AEON delight Report2022

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

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

Facility management
for a better tomorrow
For our 50 years of existence, the AEON delight Group has been providing safety
and security to facilities and their surrounding environments.
We will continue to solve social issues through facility management
and grow as an environmental value-creating company
that helps create a society full of joy.

Management Principle

Table of contents/Editorial policy

We Pursue the Creation of "Environmental Value"
for our Customers and for the Local Communities.

■ Contents

The environmental value we consider includes all the values in the following;value in the business environment of the corporation,
value in the usage environment of the customers of the corporation,
value in the workplace environment employees work in and value in the local community.
By creating environmental value, we strive to provide “delight” such as joy, shine and richness of mind.
To achieve that goal, we constantly aim to improve safety, security,
cleanliness and comfort, and keep stepping forward
towards “the future with a dream.”

Delight

SafetyComfortHuman Environment
01

01 Management Principle

09 The Last 50 Years

23 Materiality

39 Risk Management

02 Table of Contents/Editorial Policy

11 Toward a Future with Dreams

25 Sustainability Management

40 Society

03 Business Fields

13 Message from the CEO

26 Environment

45 Six-Year Summary

04 Services

19 Value Creation

27 TCFD

05 Global Network

21 Financial and NonFinancial Highlights

31 Corporate Governance

47 Company Profile/
Stock Information

06 Our Strengths

38 Compliance■ Editorial policy■ Editorial policy

The AEON delight Report 2022 is published to inform shareholders, investors, and all other stakeholders of the Group's businessactivities, growth strategies, and future outlook based on our Management Principle.
In preparing this report, we referred to the International Integrated
Framework of the International Integrated Reporting Council (IIRC)
and the GRI Sustainability Reporting Standards, focusing on information that we deemed important from the standpoint of mediumand long-term corporate value creation.

■ Period

March 1, 2021 – February 28, 2022
＊Some sections include information for March 2022 and beyond.

■ Forward-looking statements

This report contains projections and forward-looking statements
regarding our Group's future plans, strategies and performance.
These statements are based not only on historical facts, but also
on assumptions made with information currently available to thecompany. As such, actual results may differ from projections.

■ Organization

AEON DELIGHT CO., LTD. and AEON delight GroupWEB

Investor Relations▶ https://www.aeondelight.co.jp/english/ir/
Sustainability▶ https://www.aeondelight.co.jp/english/csr/

02Services

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

■Management Services
Enhance and maximize facility performance
Energy Management

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

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

Workplaces

Business Continuity Plan (BCP)

We propose both soft and hard solutions that transform office spaces as well as work habits andprocesses.

We formulate plans that enable customers to continue operating and promptly restore facilities in theevent of a disaster, minimizing impact on corporate
activities.

Maintenance Plan Development
and Management

Partner Management(Evaluation & Guidance)

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

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

■Operations Services

Business Fields

Optimally operate facilities

The AEON delight Group is a facility management groupthat offers various solutions for facilities and surrounding environments in responseto the challenges faced by customers in Japan, China, and the ASEAN region.

03

Facility Budget Management

Office buildings
and public facilities

Commercial
facilities

Hospitals
and research facilities

Factories
and warehouses

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

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

Hospitals and research facilities have higher sanitation
requirements compared toother facilities. To address this,
we provide optimal solutions
that meet the specific needs ofeach facility, ranging fromhighly sanitary environments
achieved through infection
control to robust security enviro n m e n t s u s i n g a d v a n c e ddisaster prevention equipment.

For factories and warehouses,
we support a variety of outsourcing needs aimed at improving
management and operation
efficiency, including energy
savings through facility management. In addition, we propose
preparation solutions t h a t
enable facilities to fulfill theirproduction and supply roles inthe event of a major disaster by
ensuring continued operation
and rapid recovery.

Facility Management

Building Construction

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

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

Security

Vending Machines

We offer a wide range of services from facility security to traffic guidance and event security, providing
unique plans that incorporate advanced equipment.

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

Materials

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

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

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

WEB

FMNavi Service menu(Japanese)▶ https://service.aeondelight.co.jp/s/service04

Global Network

Our Strengths

Aiming to become Asia's No. 1
facility management company

Providing the best facility solutions as a group of
experts for facility management

We have standardized the technology and quality control methods
we have developed over the past 50 years in Japan.
With the aim of becoming Asia's No. 1 facility management company,
we are extending the AEON delight brand from Japan to China and ASEAN countries.

The strength of the AEON delight Group rests in our ability to provide optimal solutions tocustomer issues through our diverse array of facility-related services and our network ofexpert personnel in Japan and overseas.

Over

300

Japan
China

service offerings
AEON DELIGHT (SHANGHAI) COMPREHENSIVE FACILITYMANAGEMENT SERVICE CO.,LTD.
Zhejiang Metelan Property Management Co., Ltd.
AEON DELIGHT (CHINA) CO., LTD.

Cambodia

20,000

Aeon Delight (Jiangsu)
Comprehensive Facility Management Service Co., Ltd.
Wuhan Xiaozhu Comprehensive Facility
Management Service Co.,Ltd.

Vietnam

Consolidated Subsidiaries
in Japan
AEON DELIGHT ACADEMY CO., LTD.
AEON DELIGHT SECURITY CO., LTD.
Kankyouseibi Co., Ltd.
AEON DELIGHT CONNECT CO.,LTD.
Aqutia Co.,Ltd.
AEON COMPASS CO., LTD.
Hakuseisha CO., LTD.

50

AEON DELIGHT(VIETNAM)CO., LTD.

Malaysia

years of experience

Japan=●Headquarters(function) / ●Regional Offices

AEON DELIGHT(MALAYSIA)SDN., BHD.

certified employees

China/ASEAN=●Headquarters / ●Branches

24/7
365

05

WEB

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

affiliates
in Japan and Asia
(China, ASEAN)

Over

8,000
facilities undermanagement* As of May 31, 2022
* Recurring customers excluding spot contracts

Indonesia
PT Sinar Jernih Sarana

30

500

locationsthroughout Japan

Crisis Management
System(As of February 28,2022)

Approx.

Network ofapproximately

Over

WEB

AEON delight's Strengths▶ https://www.aeondelight.co.jp/english/fms/advantage.html* As of February 28, 2022
(as of May 31, 2022 for number of facilities under management)

06

Our Strengths

Advanced expertise in Facility Management

Ability to transform in response tochanges in the environment~Continuous training of professional personnel withboth technical and human capabilities~■ COVID-19 response■ Over 20,000 qualified employees
Our Group employs over 20,000 qualified personnel, ranging from essential personnel
for facility maintenance to those with knowledge and skills related to reducing
environmental impact (see p. 40). These employees are deployed to our more than 500
service locations throughout Japan. We maintain a network of approximately 5,000
partners to uniformly provide highly specialized services throughout Japan.

■ Unique training facilities held within the GroupWe have our own training facility, AEON delight Academy Nagahama, where
employees can gain knowledge and skills through practical training and lectures in asimulated facility environment. In addition to technical capabilities, we are constantly
developing professional personnel who can put themselves in the customer's shoes
and provide hospitality. We are committed to providing world-class service quality
with our technical and human capabilities.

Training facility AEON delight Academy Nagahama■ Technical contests aimed at improving quality of operations
Starting in FY2019, we have been hosting technology contests to encourage experts invarious fields to hone their technical capabilities and further develop ideas generated
in the field into shared assets for the Group. In addition to our domestic and overseas
group companies in the facilities management, security, and cleaning businesses, we
also have partner companies participating in the contest.
Through these technical contests, we strive to improve the expertise of not only ourown company but also our overall service network.

* Customer Support Center (CSC)
We have Customer Support Centers established under our eight regional offices in Japan. These
centers provide remote support for facility management operations through various systems andsensors, and also gather customer requests and information on each facility.

07

New Standard Cleaning ser vice launched in
September 2020 as a new standard for cleaning in
the age of COVID. Cleaning services are carried out
by staff who have completed specialized training,and quality is measured and quantified throughmonitoring.

■ Digital transformation promotion initiatives

Community crisis management support
We have two AD Solution Centers (ADSC) in Japan, one in Osaka City and the other inKomaki City, Aichi Prefecture (AEON Komaki Crisis Management Center), which serveas our core crisis management centers for disaster prevention. ADSC constantly
collects and analyzes disaster information and remotely monitors our facilities undermanagement for abnormalities in order to prepare for disaster risks. In the event ofdisasters such as earthquakes, floods, and major power outages, we handle thesituation as an organization with the ADSC in charge of collecting information. To date,
we have supported our customers' crisis management by restoring damaged facilities,
dispatching support personnel, coordinating with relevant ministries and agencies,
and procuring disaster response equipment and supplies, in an effort to minimize
damage and restore facilities quickly (see p. 30).
In addition, our new headquarters, which began operations in September 2021, ishome to the Kanto Regional Office's Customer Support Center (CSC)*, which canfunction as a substitute for the ADSC. By sharing systems and data among our threelocations in Osaka, Komaki, and Tokyo, and by establishing a backup system for crisis
management functions, we have built a system that can demonstrate resilience in theevent of a major, widespread disaster.
In the event of a disaster, one of the eight nationwide CSCs located close to thedisaster area will quickly gather information and work toward early recovery andreconstruction of the affected area by carrying out disaster response efforts thatleverage field expertise in cooperation with the ADSC.

Amid the COVID-19 pandemic, we continued to provide a safe and secure environment
for people using our facilities by implementing a variety of infection prevention
measures in response to the changing environment.
By leveraging our network and procurement capabilities in the materials business,
we were able to provide a stable supply of infection prevention materials such as
alcohol dispensers, face masks for business use, and acrylic partitions from the earlystages of the pandemic. In addition, by harnessing the expertise we accumulated
through our hygiene control service, a cleaning service including infection control that
we have developed and offered to healthcare facilities before the pandemic, we wereable to develop our New Standard Cleaning service designed for the age of COVID-19,
which we launched in September 2020. We provide a hygienic environment backed byscientific evidence in accordance with a cleaning procedure manual developed under
the supervision of infection control experts. Moreover, we developed a Network CO2
Density Monitoring System with a manufacturer for the purpose of promoting
ventilation in facilities, and began offering the system in April 2021. By visualizing CO2
density, we promote improved ventilation while fostering a sense of security for peopleusing our facilities.
We continue to provide safe and secure facility environments even amid the
pandemic by implementing various infection prevention measures.

Third AEON delight Skill Contest[Equipment Division]

As the labor shortage in the facility management industry becomes increasingly
severe, we are moving forward with digital transformation to promote area
management*1, a new facility management concept. The remote support provided by
the CSC has helped us reduce resident facility managers, and we are shifting fromconventional resident-based individual facility management to a multiple facility
management system that mainly consists of patrolling by area. At the same time, thedata collected and accumulated from inside and outside facilities are processed into
valuable information and shared to help solve customer issues. We continue to update
the information with the AEON delight Platform*2, which also functions as a shareddata collaboration platform for our entire service network, including group companies
and partner companies.
Through these efforts, we are transforming our business into a sustainable modelthat adapts to changes in the environment (see p. 16).

Improving ventilation by installing a network-enabled
CO2 density monitoring system*1: Area management refers to a facility management model that efficiently manages multiple facilities
in an area through remote management.
*2: AEON delight Platform is an information collaboration platform that processes data collected andaccumulated from inside and outside facilities into valuable information that helps solve customer
issues and shares it throughout the entire service network comprising group companies andpartner companies.

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

In June 2021, we were selected as a Certified Digital Transformation Business in recognitionof our digital transformation promotion system aimed at building a sustainable businessmodel in facility management, which meets the criteria for certification by the Ministry of
Economy, Trade and Industry (METI).

WEB

AEON delight’s measures taken against COVID-19▶ https://www.aeondelight.co.jp/english/covid19/

08

This mural is located in the elevator hall on the second floor of the new headquarters (Teito Kanda Building), which opened in September
2021. It was created with the aim of taking us back to our roots and reaffirming our purpose and mission, as well as to carry our legacy into
the future. The mural features employees working in our seven business fields in seven different colors, along with two symbolic disasters:
the 1972 Sennichi Department Store fire, which triggered the establishment of our company, and the Great East Japan Earthquake of 2011.
Through facility management, we will continue to support many people by ensuring the safety and security of facilities both in normal times
and in the event of a disaster. As we celebrate our 50th anniversary, we renew our pride in our mission and will continue to bring “delight"
to society, even as society continues to change in the future.

The Last 50 Years

AEON delight celebrates
its 50th anniversary● Other major M&A and subsidiary acquisitions
2001
2004
2007
2008
2009
2011
2012

The roots of our company can be traced back to the fire at the Sennichi Department Storein Osaka in May of 1972, which is considered to be the worst fire in the history of building fires in Japan.
With the aim of preventing such a tragic accident from ever happening again,
the building maintenance division was spun off from the retailer Nichii (presently AEON Retail)to form our predecessor company.

Establishment

Business expansion and IPO

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

1972

Nichii Maintenance Co., Ltd. established in Higashi-ku,
Osaka City as a subsidiary of Nichii Corporation(presently AEON Retail Co., Ltd.)

1976 Company name changed toJapan Maintenance Co., Ltd.

Logo of Japan Maintenance Co., Ltd.

Scene ofequipment inspection
at the time

*1 Founding: AEON delight was established in 1973 as Nichii Japan Kaihatsu Co., Ltd.,and merged with Nichii Maintenance Co., Ltd. in 1976, changing its name to Japan
Maintenance Co., Ltd. As a result of the 1976 merger, Nichii Japan Kaihatsu Co., Ltd.
ceased operations, and Nichii Maintenance Co., Ltd. effectively became the surviving
company.
*2 Sennichi Department Store Fire: At the time, The Nichii Sennichimae Store was atenant in the building. The fire shutters on each floor and escalator fire compartments
were not closed, toxic gases and smoke filled the floors, and elevators were stopped.Customers and employees panicked as they lost their way out, which resulted in 118
fatalities, making it the deadliest building fire in Japan since the end of World War II.

09

AEON delight logo
“Good-jo-kun”

Merger and business expansion

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

Expanded sales through merger with AEON Techno Service Co., Ltd. and CERTO Corporation
Enhanced service offerings as a facility management businessWe merged with AEON Techno Service Co., Ltd. a general building maintenance company in the AEON Group,and became the largest comprehensive building maintenance company in Japan. Then, in 2010, we mergedwith CERTO Corporation, which operated a vending machine business and a materials business, and expanded
our services as a facility management company. Subsequently, we began providing integrated facility management (IFM) services overseas in response to outsourcing demand for back office operations, including building
maintenance. In addition, we added subsidiaries in Japan and overseas through M&A and by establishing joint
ventures to form the AEON delight Group, which is comprised of approximately 30 companies.

AEON DELIGHT CO., LTD. is founded.

2006

Merged with AEON Techno Service Co., Ltd.
Changed trade name to AEON DELIGHT CO., LTD.
Joined the AEON Group2010

1978 〜1986 Established regional subsidiaries in Hokkaido,
Tohoku, Shinetsu, and Kyushu regions
1995 Listed on the Second Section of the Osaka Securities Exchange
1997 Opened Technical Training Center in Sanda City, Hyogo Prefecture
1999 Listed on the Second Section of the Tokyo Stock Exchange
2000 Listed on the First Section of both the Tokyo Stock Exchange
and the Osaka Securities Exchange
Reorganized into a two-headquarter system with an Osaka
headquarters and a Tokyo headquarters.

Aeon Techno Service Co., Ltd. logo

CERTO Corporation logo

Merged with CERTO Corporation.
Expanded business domain to include material procurement and vending machine management

Unveiling of new uniforms

Listed on the Second Sectionof the Osaka Securities Exchange

2013
2015
2017
2018

Japan Maintenance Academy Co., Ltd. (presently AEON DELIGHT Academy Co., Ltd.)
Japan Maintenance Security Co., Ltd. (presently AEON DELIGHT SECURITY CO., LTD.)
A to Z Service Co., Ltd. (presently AEON DELIGHT CONNECT CO., LTD.)
AEON DELIGHT (BEIJING) CO., LTD (presently AEON DELIGHT (CHINA) CO., LTD.)
Kankyouseibi Co., Ltd.
DO SERVICE Co., Ltd. (presently AEON DELIGHT CONNECT CO., LTD.)
KAJITAKU Co., Ltd. (presently AQUTIA CO., Ltd.)AEON DELIGHT (MALAYSIA) SDN. BHD. / AEON COMPASS CO., LTD.
AEON delight Sufang (Suzhou) Comprehensive Facility Management Service (presently AEON delight (Jiangsu)
Comprehensive Facility Management Service Co.,Ltd.)AEON DELIGHT (VIETNAM) CO., LTD. / Wuhan Xiaozhu Comprehensive Facility Management Service Co.,Ltd.
Hakuseisha Co., Ltd.
AEON DELIGHT (SHANGHAI) MANAGEMENT CO., LTD.
PT Sinar Jernih Sarana

WEB

History

2010 Opened research and training facility AEON delight Academy Nagahama
in Nagahama City, Shiga Prefecture, Japan
2012 Established representative office in Beijing, China
2012 〜 2021 Moved forward with establishing overseas subsidiaries
and acquiring shares to gain subsidiaries▶ https://www.aeondelight.co.jp/english/corporate/history.html

2021

Moved to new Tokyo Headquarters
10

WEB

Toward a future with dreams

Sustainable facilities, sustainable smiles.

Future Vision▶ https://www.aeondelight.co.jp/english/fms/vision.html

AEON delight Vision 2025
We aim to become an environmental value-creating company that solves social issues in Asia
by focusing on the three pillars of our growth strategy consisting of
ensuring safety and security, resolving labor shortages, and addressing environmental issues.

We, the AEON delight Group,
have been and will continue to be a company that protects

people's precious places by continuously improving
our technical and human capabilities to ensure
the safety and security of facilities.

To embody this aspiration,

we formulated the AEON delight Vision 2025.

Safety and Security

Labor shortage

Environment

Natural disasters such as typhoons,
torrential rains, and earthquakes are
happening more frequently and becoming more devastating. Under thesecircumstances, we will help our customers develop disaster prevention andmitigation systems during normal times,
and provide crisis management support
to minimize damage from disasters in
the event of an emergency.
I n a d d i t i o n , we w i l l c o n t i n u e toadvance the safety and security we provide to our customers by promoting digital transformation initiatives across ourcrisis management system and disasterrecovery operations.

Labor shortages are becoming more
and more serious in various industries,
including the facilities management
industry. With the aim of resolving labor
shortages within our company and forour customers, we will build a sustainable facilit y management businessmodel by promoting digital transformation initiatives to expand our new area
management model, while also renewing the AEON delight Platform (see p. 8).

Solving environmental issues such as
climate change and marine plastic pollution has become a global challenge. We
will work together with our customers
and local communities to help create asustainable, decarbonized society by
expanding our environmentally friendly
business, including implementing energy-saving measures at facilities, managing electric power, and enhancing environmentally friendly products madefrom biomass materials, wood, andpaper.

FY2025 Targets
Net sales:

471.0
billion yen

11

Sales:
Globally,

TOP10
Asia
No.1

Operating income:

37.0
billion yen

Operating income
marginGlobaltop level

12Message from the CEO

To continue protecting people's
precious places as an environmental
value-creating company
The AEON delight Group celebrated its 50th anniversary in 2022.
This is a result of the support of our stakeholders, including customers, partners, and shareholders,
as well as the efforts of our management and employees over the years,
who have continued to take on a variety of challenges while staying true to our founding philosophyof protecting the safety and security of facilities.
We will continue to protect people's precious places as an environmental value-creating company
by constantly transforming to adapt to changes in the environment.

Kazumasa Hamada
President & CEO, Group CEO

Celebrating our 50th anniversary-- The past and futureof the AEON delight Group -Origin of the AEON delight GroupThe origin of the AEON delight Group can be traced back to
the Sennichi Department Store fire that broke out in Osaka in
May 1972. It was the worst fire incident in the history ofbuilding fires in Japan, leaving 118 people dead. With the aimof preventing such a tragic accident from ever happeninga g a i n, we fo u n d e d t h e c o m p a ny a n d d eve l o p e d o u r13expertise and techniques in facility management to "pursue
facility safety and provide an environment where customers
can visit our stores with peace of mind." Our company, whichstarted with only a few employees out of deep regret for the
tragic accident, has grown into a corporate group with over
20,000 employees providing services throughout Japan andAsia (see p. 9-10).

AEON delight and the creationof the environmental value
management principle
AEON delight was formed in 2006 through the merger of
its predecessors, Japan Maintenance and Aeon Techno

Ser vice. We then discussed what we needed to do inorder for AEON delight to make even greater strides, which
resulted in the creation of our management principle to"pursue the Creation of ‘Environmental Value’ for ourCustomers and for the Local Communities" The phrase"creation of environmental value" expresses our aspiration
to become a company that continues to protect people's
precious places by expanding the value we provide fromsafety and security, our founding philosophy, and including
cleanliness, comfort, and reducing environmental impact.
Since 2006, we have continued to grow by bringing incompanies that share our vision. We believe that the factthat the AEON delight People, which come from diverse
backgrounds, have been able to unite and continue to grow islargely attributable to the establishment of this management

principle, which ser ves as the basis for our corporate
activities.

Beliefs that will never change and things
that must be changed
The AEON delight Group celebrated its 50th anniversary in
2022, and the role we fulfill in society will remain unchangedin the years to come.
Our role is to create environmental value and to continue
protecting people's precious places. However, the means
and the goals we need to achieve change with the times.
For example, the standards for people's safety and security
have changed when the COVID-19 pandemic came about,
14

Message from the CEO

Various initiatives basedon the three basic policies● Enhancing customer contact points

by reorganizing office area structure

In April 2022, we reorganized our eight regional of ficestructure in Japan in line with customer needs, facility
characteristics, and regional characteristics, with the aimof enhancing our customer contact points. We replaced
our former 41 office and 13 sales branch structure with 97
new a re a s unde r 37 of f ic e s. At the s a me time, byredefining the responsibilities of each job level, fromoperations to management, we are building a system thate n a b l e s a l l o f o u r r e g i o n a l o f f i c e s to d i r e c t l y s e r ve
customers in their respective regions.

❶ Customer-oriented Management

and infection prevention measures are now the norm inevery facility. The New Standard Cleaning that we beganoffering in 2020 is a new standard for cleaning services
that incorporates infection prevention measures developed
in response to these changing needs.
The AEON delight Group will aim to achieve fur thersustainable growth by continuing to transform in responseto changes in the business environment. This is why weestablished AEON delight Vision 2025 (Vision 2025) (see p.
12 ) as our aspiration for the future, and formulated athree-year medium-term management plan (medium-term
management plan) starting in FY2021 to accelerate ourgrowth toward achieving our Vision 2025. Under the threebasic policies of Customer-oriented Management, Digital
Transformation (DX) Promotion, and Group Management,
the medium-term management plan calls for net sales of
361 billion yen, operating income of 22 billion yen, and net
income attributable to parent company shareholders of 14
billion yen in FY2023, the final year of the plan.

Progress of Medium-Term Management Plan
Net sales and operating/ordinary income rose in FY2021,
but we need to accelerate our initiatives
In FY2021, we successfully expand sales and increase
operating and ordinary income by implementing various
measures in accordance with the three basic policies set
15■ Figure 1: Medium-term management plan KPI progress(highlighted letters indicate improved items)

Basic
policyCustomeroriented
Management

Basic
KPI (end-FY2023)
policyEnd-FY2021

End-FY2020

Percentage of sales inside/outside the Aeon Group: 60%/40%*

64.4%:35.6%

64.3%/35.7%

Operating income margin: 6.0%*,
Maintain full-year ROE of 12%
by improving operating income margin

Operating income
margin: 5.0%
ROE: 11.7％

Operating income
margin: 5.1%
ROE: 14.1%

Number of facilities under
Area Management: 360 facilities

151 facilities

27 facilities

Number of permanent posts reduced
through Area Management: 180

115 posts

DX Promotion

Reallocate 20% of headquarters staff
to direct departments by consolidating
functions

Began improving
business processes
in the headquarters

Domestic Group company net sales
65 billion yen

52.1 billion yen

52.8 billion yen

Overseas sales ratio: Over 8%*

7.8％

6.7%

Shift to shared services
for domestic Group financeand accounting departments

Financeand accounting
department beganproviding support
to all domestic
Group companies

Group
Management*Previous revenue recognition standard

forth in our medium-term management plan. Although wewere able to systematically implement the various
measures set for th at the beginning of FY2021, results
were short of the medium-term quantitative targets owing
to delays in achieving the benefits of some measuresste mming from the gre ate r-tha n - exp e c te d impac t of
COVID-19. To this end, we have been promoting various
initiatives with a greater sense of urgency since FY2022.

The previous regional office, office, and center structure
has been reorganized into a regional office, office, area,and site structure. We reorganized ourselves into a structurethat bet ter fits the new area management* facilit ymanagement model that we are currently developing inan effort to create a sustainable business model. At thesame time, we redefined the role of the office manager
from "head of operations” to “growth leader,” positioning
them to formulate growth strategies for their jurisdictions
and to be responsible for achieving targets. Accordingly,
we re a s signe d our existing c e nte r ma nage r s to a re a
managers that manage multiple facilities in an area. The
structure is such that the of fice manager designs the
optimal area within their jurisdiction based on factors suchas customer service and operational efficiency, and thearea manager is responsible for the overall management ofmultiple facilities in the area under their jurisdiction. In
addition, the of fice manager will also engage in sales
activities for new contracts in their jurisdiction incooperation with the headquarters, regional office salesd e p a r t m e n t , a n d s e r v i c e d eve l o p m e n t d e p a r t m e n t .
Fur thermore, it is essential for office managers to takeownership as a business leader and enhance their skills
to draw up growth strategies anchored in the characteristics
o f t h e i r r e g i o n . To t h i s e n d , we l a u n c h e d a t r a i n i n g
program for of fice managers nationwide in April 2022,
w i t h lecturer s from our management team, including
myself.
* Area Management refers to a facility management model that manages
multiple facilities by area, mainly through remote management and patrolling
services. We are moving away from the previous resident-based individual
facility management by automating inspection work using cameras andsensors, and by consolidating some work into customer support centers
equipped with remote monitoring functions (deployed in all eight regional
offices in Japan) to save labor for resident facility management work.
● Expand market share by strengthening sales

structure

In FY2021, we began full-fledged account sales activities
with an account manager responsible for all transactions
with each customer, with the aim of promoting customer
needs-driven proposal activities. This customer-oriented
structure has led to improved customer satisfaction,
expanded market share, and other results. Meanwhile, interms of new customer development, we establishedspecialized divisions with expertise in different industries
at the end of FY2020 and are continuing to work on theseac tivitie s. A lthou gh the re we re re s tr ic tio n s o n s a le sactivities related to COVID-19, we began to see steadyresults in FY2022 as we continued to make customer-driven
proposals and started providing services at a wide varietyof new facilities.
We i n te n d to e s t a b li s h th i s s a l e s cyc l e a s s o o n a s
possible in order to further expand our market share.
● Develop consulting business by selling solutions

In a d di ti o n to s tr e n g th e n i n g a c c o u n t s a l e s a n d n ew
customer development, we began developing ourconsulting business by selling solutions in two domainsthat require advanced expertise in FY2022.
The first domain is the healthcare market. As society
becomes more conscious of the need to prevent
infections, we established a dedicated sales departmenta nd a re ac tively p roposing facilit y hygie ne standa rd
improvement solutions built on our expertise gained byof fering hygiene control* and New Standard Cleaning
services. This will help us speed up facility management
contract acquisition for a variety of buildings.
The second domain is the decarbonization market. We
o r g a n i z e d o u r s e r v i c e s t h a t c o n t r i b u te to r e d u c i n genvironmental impact, including energy saving proposals
that we have been providing as par t of our facilit ymanagement, under the keyword "decarbonization". We
formed a dedicated sales force for this as well, and havel a u n c h e d i n i ti a ti ve s to f u ll y s u p p o r t o u r c u s to m e r s'
decarbonization efforts.
* Hygiene control service refers to our cleaning service for healthcare-related
facilities that includes infection control, which we began offering in FY2014.

❷ DX Promotion● Updating the AEON delight Platform,

a data collaboration platform
We aim to propose and efficiently provide all our customers
with the best solutions tailored for their specific challenges.
Accordingly, we are building and updating our AEON
delight Platform (AD Platform; see p. 17), a data collaboration
plat for m that c olle c ts and analy ze s va r ious t ype s of
information gained from both within and outside offacilities by digitally transforming business processes into
valuable information and sharing it throughout our service
network, which includes all Group companies and partnercompanies.
One important factor to consider when thinking about
how to leverage our AD Platform is the quality of input
data. We continuously provide ser vices to over 8,0 0 0
facilities in Japan, but we are first working on capturing
various input data from approximately 500 commercial
facilities, which is our forte. We collect basic informationon the facilities as well as data obtained from day-to-day
management and operations, and compare, verify, andanalyze the data against each other. This will enable us tovisualize the latent needs of our customers and produce
valuable proposals that will help us resolve theirrespective issues. We already use this type of data as partof our sales activities.
16

Message from the CEO❶ Acquiring expertise■ Figure 2: AEON delight Platform

Propose and Communicate
OfficesCommercial
Facilities

Hospitals

PatrolAs I mentioned earlier, we began selling solutions in thehealthcare and decarbonization markets, but we plan toexpand beyond these two domains and provide highly
specialized solutions in other domains as well. To this end,
we will explore acquiring new exper tise through M & A
deals.
❷ Creating regional economic zones

Partnercompanies

Marketing DX Management

Share
information

Sales departmen

Analysis
resultsData
accumulation

Regional officeGroupcompanies

Service development
andqualitycontrol department

CSC

Customer Support Center

Facility data
Customer needs

Accumulate
andanalyze data
Remotemanagement

PatrolSmalland medium
facilities

Facility
data
Customerneeds● Further development of area management

While updating the AD platform, we will further develop
area management in FY2022, aiming to save manpower in
10 0 a d d i t i o n a l f a c i l i t i e s ( 278 f a c i l i t i e s i n to t a l ) a n dreallocate 40 facility management personnel (155 people
in total).
In addition, to carry out this series of initiatives, we will
aggressively invest in areas such as digital transforming
our business and sales activities, recruiting specialized
personnel, and enhancing IT training.

❸ Group Management
In Japan, we will strive for further grow the AEON delightG r o u p by s t r e n g t h e n i n g c o o p e r a t i o n a m o n g G r o u pcompanies and solving issues each company faces from a
post-pandemic perspective, while taking into account thebusiness characteristics of each group company.
In China, which we consider to be the largest growtharea in Asia, we will steadily expand business by focusing
on securing more contracts for key target facilities such as
me dium - a nd high - e nd shopping c e nte r s, hospit a ls,
nursing homes, and redevelopment areas through our core
operating companies Aeon Delight (Jiangsu)
Comprehensive Facility Management Service Co., Ltd. and
Wuhan Xiaozhu Comprehensive Facilit y Management
S e r v i c e C o., L t d . u n d e r g r o u p m a n a g e m e n t b y o u rcontrolling company AEON DELIGHT (CHINA) CO., LTD.*
Furthermore, in FY2021, AEON delight Jiangsu acquired ahighly specialized company with a proven track record inoutsourced factory operations in Suzhou, and in March
2022, AEON delight China acquired a local company with
17

❸ Building overseas bases

In addition to expanding local businesses in China and
ASEAN countries, we will look into M& A opportunities toexpand our services to Japanese companies operating invarious regions and to enter new businesses.
Factories

Other
large facilities

Area
management

In order to create regional economic zones in facilit ymanagement and to further solidify our ability to expand
our business throughout the country, we will explore M&A
opportunities with companies that are closely tied to local
communities and have strengths in specific areas.

Remotemanagement
Facility data
Customer needs

strengths in outsourced medical-related facility operations
in Zhejiang and Jiangxi provinces as a subsidiar y. In
addition to organic growth, we plan to make further strides
in China by capturing expertise, expanding our businessdomain, and strengthening our customer base throughthese types of M&A deals and business alliances.
Moreover, in the ASE AN business, where we expect
fur ther grow th over the me dium to long term, we arepreparing to open an ASE AN headquar ters in order toenhance our governance structure and draw up a new
grow th strategy. In the summer of 2022, we opened apreparatory office for our ASEAN headquarters in Kuala
Lumpur, Malaysia, which is conveniently located for easeof access to various ASE AN countries. In addition topreparing to open the ASEAN headquarters in 2023, we will
actively communicate with local subsidiaries in eachcountry where we operate to understand the issues they
face and provide support to help resolve them. At the sametime, we began market research in Singapore andThailand, which we are considering for our next expansion.

Strengthen ESG management system
Newly established Sustainability
Committee and Special Committee
To enhance our ability to solve social issues as stated inour Vision 2025, we must practice ESG management,
which involves our business as well as the environmentand society. Accordingly, we are strengthening our ESG
management system.
In April 2022, we established a Sustainability Committee,
with myself as the chairperson and executive officers as

members. As a company-wide promotion body for ESG
management, we will identify the highest priority issues
and determine initiatives to resolve them based on the
Basic Policies for Sustainability and Materiality.
Furthermore, in May, we expressed our support for therecommendations of the Task Force on Climate-related
Financial Disclosures (TCFD). (See p. 27-30.) In addition,on the governance front, we established a new Special
Committee in May, consisting of independent outside
directors. As an advisory body to the Board of Directors,
its purpose is to ensure that the opinions of minorit yshareholders and other stakeholders are appropriatelyreflected in the Board of Directors. The AEON delight
Group will continue to fur ther strengthen Group
governance and foster a healthy organizational culture that
supports sustainable growth (see p. 35-37).

Finally -- To Our Stakeholders -The world is facing a variety of challenges to achieve asustainable society, including environmental and humanrights issues. As a corporate group that aims to solve
social issues by ensuring safety and security, resolving
labor shor tages, and addressing environmental issues
through facility management, we sense ever y day that
there are more and more fields we should pursue.
We will continue to protect people's precious places byadapting to the changing environment as well as people'svalues, while continuing to transform ourselves.
We look forward to your continued support as we takenew steps toward the next 50 years.

* On September 28, 2022, AEON DELIGHT (CHINA) CO., LTD shifted to an
investment company with broader business operations capabilities.
● Positioning M&A as a key strategic option

I believe we need to explore and pursue M&A opportunities
with a greater sense of urgency.
M & A deals are one of the key strategic options for ourGroup to achieve Vision 2025. The aim is to fill in the gaps
in our functionality. In selecting M&A targets, we examine
three factors : Acquiring exper tise, creating a regional
economic zone, and building overseas bases.
18

Value Creation

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

Inputs(Management Resources)

Outcomes(Business Results)

Business Model / Outputs

Aspiration
Environmental
value-creating company
that solves social issues

Big data related tofacility management

Economic value
created by AEON delight

Proposal /provision of solutions
Collaborative
research institutions
with government/
academia

Outcomes(Value Offered)Human
resource
development

Medium-term
management planfor FY2021-2023

Partnercompanies

Customers

Net sales
361 yenbillionOperating income 22 yenyen
Net income
14 billion

Comfortable, hygienic, andhealthy facility environments
Better prevention / mitigation ofdisasters andother emergencies

billionCore Competencies

Facility management
expertise

Provision ofsafety & security

Contribution toresolving labor shortages
Alleviating labor shortagesamongcustomers and partner companies

Skills and expertise
Specialist personnel inJapan and overseas

AEON delight
Group companies

Ability to create
solutions

AEON delight
Vision 2025

More efficient use of
personnel throughdigital transformation

Net sales 471 yen
Global Top 10 No. 1 in Asia
billionService network
across Asia

Research&development

AEONDELIGHT
PLATFORM

Information collection, analysis,
and processing

Collection/
accumulation offacility information/needs
Growth investment indigital transformationand M&A,
backed by robust
financial base

Operating income 37 yen

billionOperating income margin
Global top-level

Contribution to
global environment
Contribution to
decarbonizing society
Biodiversity conservation
Promotion of
resource recycling

Use of Technology
Strengthened corporate governance

19

20

Financial and Non-Financial Highlights

Financial data (Consolidated)

Non-financial data (Non-consolidated)

Net Sales

Reduction in power consumption by installed energy-saving
equipment
Lighting equipment
Air conditioning equipment

Net Sales Composition by Segment（Billion yen）
320

302.9
300

300.0

292.3

（MWh）
80,000

317.6

308.5

Facility Management

61.5 Billion yen 19.4 %Security Services

47.2 Billion yen 14.9 %Cleaning Services

66.9 Billion yen 21.1%

250

60,000

1,615
1,645

20,406

Vending Machine Services

26.3 Billion yen

8.3 %Support Services

16.0 Billion yen

5.0 %20,000

2018

2019

2020

33,3562021 （FY）

2017

33,404

Net income attributable to parent company shareholders/
Net income per share
Net income attributable to parent

Operating income（Billion yen）
20

16.0
15

10

12.9
4.4

13.0

5.2

Operating income margin（%）
6

company shareholders
Net income per share（Billion yen）
12

（Yen）
300

2019

2021 （FY）

2020

11.6

5.1

15.7
5.0

9.3

233.7

5

4

0

122.9

0

0

2019

2020

2021 （FY）

Female）

Dividend per share

（Yen）
80

60

40

82

467

3,693

3,691

3,707

1,760

1,712

1,660

9

2,000

61

50.1

63

84

（%）
80

65
60

0

0

2017

90

51.3

2018

Total assets

144.6
134.0

2019

2020

34.7

35.1

39.4

1,203

1,087

1,074

944

1,202

0

2021 （FY）

2017

2018

2019

2020

2021 （FY）

2019

2020

136.9

Capital-asset ratio

136.5

59.5
89.1

54.6
75.5

Number of women in managerial positions
Ratio of women（%）
3.0（People）
20

66.2

2021 （FY）

88.2

95.4

8.1

8.5

2017

2018

2019

8.0

7.5

3

0

2019

2020

2020

2021 （FY）

Number of Independent Directors/
Ratio of Outside Directors
Number of Independent Directors
Ratio of Outside Directors（%）
60（People）
10

50.0

50.0

8

2021 （FY）

50
40

10

0

2018

2.5

6

2.3

5

2017

2.6

9

4

7

1.5
1.3

1.5

1.2
1.0

0

2017

2018

2019

2020

2021 （FY）

5

27.3

2.0

8

WEB
21

8.2

50

30

0

10.1

50.0

16

15

15

57.6
81.2

142.8

（%）
70

30

0

2018

12.0

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

Number/Ratio of women in managerial positions

60
20

0

Net assets

64.0

40

20

2017

120

11.2

6

1,000

（Billion yen）
150

12.2
11.0

Female100

Total Assets/Net Assets/Capital-Asset Ratio
Payout ratio

Male（Year）
15*Includes permanent employees, contract employees,
and fixed-term employees

Dividend per Share/Payout Ratio (%)

2021 （FY）
2017
2018
2019
2020
*Amounts correspond to the ratio of shares held in equity method
affiliates Kikugawa Ishiyama Solar Co., Ltd.
and Kikugawa-Horinouchiya Solar Co., Ltd.

Average length of service

12

1,560

1,455

3

5

3,702

3,000

6.4
121.7

3,712

200

Male

427

381

348

322

4,000

213.3

187.2

8

6.3

4.3

2018

Employees（
MaleFemale）
Average number of temporary employees（

10.6
15.2

4

2017

Number of employees/
Average number of temporary employees（People）
5,000

7,912

2,000

26,165*Estimated annual electricity use reduction in facilities where data
is available

Operating Income/Operating Income Margin

7,717

4,000

24,691

2018

7,600

24,26600

201734,775

7,806

6,000

17,737

Materials / Supplies Sourcing Services 56.4 Billion yen 17.8 %

8,016

1,794

20,168

9,688

40,000（MWh）
10,000

8,000

3,590
1,296

43.0 Billion yen 13.5 %Construction Work

Refrigerated display cases

Amount of solar power generated

4

4

4

4

30
20

23.1
2

10
0

0

2017

2018

2019

2020

2021 （FY）

Financial Data and Results ▶ https://www.aeondelight.co.jp/english/ir/financial/
ESG Data ▶ https://www.aeondelight.co.jp/english/csr/esg_data/
22

Materiality

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

5 Areas12 Material Issues

Safety and Security■ 12 Material Issues

Providing safe living
environments■ Materiality identification process
Reference to SDGs, FTSE, Global Risks Report, and other sources, we have identified 59 issues as areas of particular relevance to our Group.
We then analyzed the 59 issues. We followed this up by evaluating risks and opportunities for each business and the entire Group, as wellas risks and opportunities for stakeholders based on stakeholder interviews, and created a matrix that reflects the significance of theserisks and opportunities.

STEP

2 Assess issue importance

Improvingproductivity throughefficient allocationof talentMateriality Matrix● Nature conservation and environmental

impact reduction

STEP

5 Develop materiality KPIs

countermeasures● Use of Technology● Improving productivity through efficient

allocation of talentenvironments● Appropriate labor management● Corporate Governance● Providing safe and secure living● : Safety and Security

Low● : Labor Shortage● : Corporate Governance● : Use of Technology

MiddlePromoting diversity
and inclusion

3.8%● 20% of sales from BCP and infection control-related services*1

Improve business continuity by solving labor shortages

22.1%● 30% female managers on a consolidated basis compared to FY2021● 50% reduction in consolidated annual employee turnover rate (regular employees,

23.7%

contract employees, and temporary employees) compared to FY2021● 50% reduction in consolidated annual overtime per person compared to FY2021

2.5%● 10% of sales from GHG emission reduction related services*3

Of 822 total vehicles, 591 gasoline/diesel
vehicles, 230 hybrid 230 vehicles, 1 electric vehicle● 50% of sales in the materials business from environmentally friendly products● 50% recycling rate (bottle-to-bottle) in vending machine business

14.9%
15%

▼ Initiatives to support the above activities● Enable unmanned management through robotization of facilities● Reduce facility lifecycle costs by using FM big data and AI to diagnose buildings

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

Corporate
GovernanceCorporate
Governance

Growing health risks accompanying
increased employment ofelderly personnel

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

Expand AEON delight Economic
Zone by strengthening relationships
with Group management andpartner companies

Risk of decline in service quality due toinsufficient personnel training

Improve quality and productivity
by securing diverse personnel

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

Expanding need for services as
women enter the workforce

Decline in corporate power due toinadequate communication skills andmulticultural understanding
Risk of non-compliance, including
affiliates and partner companies

Develop new services bystrengthening relationships withlocal communities, partnercompanies, and relevant
government agencies

Appropriate labor
management

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

Climate change andglobal warming
countermeasures

Growing need for energy-saving
and renewable energy use

Nature conservationand environmental
impact reduction

Growing need for environmentallyfriendly products and services

Use of Technology

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

Decline in service quality and market
share due to lagging digitaltransformation

Growing need to strengthen facility
information security

Risk of cyber-attacks leading tooperational shutdown or information leak

Addressing
informationsociety risks

Leverage the latest technology to research and develop new services● Develop solutions business leveraging our unique FM data

Decline in corporate image if infectious
disease impact is not prevented

Risk of not gaining trust/understanding
when expanding overseas due toinadequate handling of target country
risks (changes in political, economic,
and social environments)
Risk of difficulties in securing personnel
due to inadequate enforcement of properlabor management
Employee accident and mental healthrisks during work

Increased cost burden due toenvironmental measures and soaring
energy prices

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

139 accidents

Expand environmentally-friendly business

Use ofTechnology

Growing need for improved
productivity and operational efficiency

268 hours● 30% reduction in number of consolidated annual work-related accidents*2 compared to FY2021● Zero gasoline and diesel vehicles, including hybrid vehicles, for business (consolidated)

Environment

FY2021 results

Expand provision of safe and secure services

Use of Technology

2030 Targets

Environment

Promote recruitment of diverse
personnel

Related SDGs

Difficulties in continuing operations
due to disaster or infrastructure outage

Promotingmulti-stakeholder
engagement■ 2030 Materiality Targets

Labor
Shortage

Growing need for hygienic/healthyliving environments

High

AEON delight Importance

Safety andSecurity

Growing demand for high-quality
services in Japan and abroad● Addressing information society risks

environments● : Environment● Promoting multi-stakeholder engagement● Providing hygienic/healthy living● Resolving labor shortages

Middleand identification
4 Discussion
by top management

Stakeholder ImportanceSTEP

3 Create materiality matrix

Growing need forfacilities/equipment resilient against
disasters and infrastructure outages

Risks to our Group● Promoting diversity and inclusion● Climate change and global warming

STEP

Resolving labor
shortages

Labor Shortage

1 Examine and identify social issues

High

STEP

Providing hygienic/
healthy living
environments

Opportunities for our GroupStrengthening
Group governanceCurtail costs with prompt problem
detection/resolution throughstrengthened governanceRisk of information leaks

Adverse effect on corporate activities
and damage to social reputation
due to inadequate governance systems
Risk of harm to business performancedue to inability to handle target country risks
when expanding overseas (changes inpolitical, economic, and social environments)*1 BCP services include disaster prevention and countermeasure construction, provision of remote monitoring systems, infection control measures, infection control
cleaning (New Standard Cleaning), sales of related materials, and construction work related to droplet and contact infection control measures.
*2 Work-related accidents resulting in four or more days of absence from work
*3 Includes installation of energy management systems, freon management, installation of EV chargers, installation of energy-saving equipment (lighting, air conditioning,refrigeration cases), installation of water-based floor coding agents, etc.

23

24

Sustainability Management

Environment

Sustainability Committee establishedto promote ESG management

Achieving environmental targets throughour business activities

In August 2021, the AEON delight Group established the Basic Policies for Sustainability
as a basic approach to promoting ESG management.
In addition, in April 2022, we established the Sustainability Committee as a company-wide promotion bodyfor ESG management to solve social issues and help create a sustainable society
through our business activities.

We have established the following environmental targets as part of our Quality and Environmental Policy.
Starting in FY2021, we added initiatives to achieve environmental targets through our business activities
as part of the policy, and each of our departments established their own environmental activity targets.
1 To protect the global environment, we will implement activities that minimize environmental impact and activities that havea positive impact on the environment.

2 We will strive to prevent environmental pollution.
3 As a company that creates environmental value, we will contribute to the environmental protection activities

that our customers and stakeholders promote through our business activities.

■ Started disclosing GHG

emission information

Basic Policies for Sustainability
AEON delight’s management philosophy is "We Pursue the Creation of ’Environmental Value’ for ourCustomers and for the Local Communities.” Based on this management philosophy, we will contribute tosolving social issues and achieving a sustainable society by creating "environmental value" in all aspects ofour business together with our many stakeholders.

・ We will strive to create a safe, secure, hygienic, and healthy usage environment in and around our facilities.
・ By providing solutions that meet society's expectations, we will contribute to achieving a decarbonized society,conserving biodiversity, and promoting recycling.
・ We will comply with laws and social norms, build relationships of mutual trust with our business partners, and conduct
fair business activities throughout the supply chain.
・ We will respect the human rights of each individual and create a vibrant organizational culture in which diverse humanresources can demonstrate their abilities.
・ As a corporate citizen, we will engage in social contribution activities that aim for a better environment and society.

AEON Decarbonization Vision(excerpt)

We believe the impact of climate change to be a significant
risk. Accordingly, we expressed our support for the TCFD
( Ta s k Fo r c e o n C l i m a te - r e l a te d Fi n a n c i a l D i s c l o s u r e )recommendations in F Y2022 ( see p. 27-30 ) , and began
disclosing information on our GHG emissions. Going forward,
we w i l l c o n t i n u e to ex te n s i ve l y a n a l y ze t h e r i s ks a n dopportunities that climate change poses to our business,reflect them in our management strategies, and proactively
disclose information. In addition, by further promoting climatechange initiatives such as preparing for disasters and making
facilities more energy efficient, we will improve disaster
resilience and reduce GHG emissions for our customers aswell as our Group, and help achieve the AEON Group's AEON
Decarbonization Vision.

Stores
We will reduce the total GHG emissions
from our stores to zero
(to be achieved by 2040)

Products and Logistics
We will continue our efforts to achieve zero GHG
emissions from our business operations

Hand in hand with customers
We will cooperate with our customers for the realizationof a decarbonized societyInterimtargetSwitch 50% of electricity used in stores
to renewable energy by 2030 (Japan)

FY2021 GHG emissions (non-consolidated)
Formulated on August, 2021

Scope1 (direct emissions from fuel use)

■ Established Sustainability
In A pr il 2022 , the AEON delight Group established theSustainability Committee, chaired by the President, as acompany-wide promotion body for ESG management aimed
at solving social issues through business activities. The
Sustainability Committee determines the highest priority
issues based on the Basic Policies for Sustainability andMateriality (key issues), formulates related policies, targets,and key measures, manages their progress, and reports to
the Board of Directors.
In FY2022, the first year of the committee’s launch, we haveidentified "human rights, safety, and health," "environment,"and "supply chain" as priority issues that society strongly
demands be addressed. Human rights, safety and healthmainly covers respect for human rights, occupational healthand safety, and health management for employees, whileenvironment focuses on our energy use and waste emissions,and supply chain covers supply chain management related tothe environment and human rights.
In addition, we established subcommittees for each issue
under the Sustainability Committee, which are chaired by an
executive officer. Going forward, the subcommittees will be
responsible for formulating and promoting specific measuresrelated to the issues.

845 t-CO

Board of Directors

Committee

Sustainability Committee

Committee Chairperson: President and Representative Director

Subcommittees by theme
Human Rights, Safety, and HealthSupply chain

Subcommittee Chairperson: Executive Ofﬁcer in charge

Instruct

Business Unit

ReportSales
department

Management
department

HQ, regional ofﬁce,
branch ofﬁce, area, site2

■ Promoting proper waste disposal
From FY2022, we also began disclosing our industrial waste
emissions. We properly manage waste while complying withvarious laws and regulations, such as the Waste Management
and Public Cleansing Act and the Construction Recycling Act,and conduct legal compliance assessments under the ISO
14001 framework.

2021
Breakdown ofindustrial waste

Industrial waste emissions (non-consolidated)
2017

2018

2019

2020

2021

12,328 t

16,629 t

15,942 t

20,474 t

19,697 t

Sludge20%

Glass waste
Concrete waste
Ceramic waste

16%

Mixed waste

15%

Metal waste

12%

Alkali waste

11%
Mixed construction waste 11%
Plastic waste

6%

Debris

5%

Other

4%

ISO 14001:2015 and JIS Q 14001:2015 certification status
Registered Office

Registration Date

Certification Body

Registration Number

AEON DELIGHT CO., LTD.

2003/07/11

Japan Audit and Certification Organization for Environment and Quality (JACO)

EC09J0013

Scope of registration(Figure: Promotion structure chart centered on the Sustainability Committee)

25

617t-CO2

ReportEnvironment

Scope2 (indirect emissions from electricity use)

Provision of facility management services (facility management, security, cleaning, construction
management, material procurement, support for vending machine installation, and customer support services)

26

TCFD

Endorsed TCFD recommendations andformulated strategies

Significant risks/opportunities and their impact
As a result of the scenario analysis, while there are various risks and opportunities, such as transition risks and physical risks assumed
with climate change, we identified the following as important risks and opportunities for our Group.

In May 2022, we expressed our support for the Task Force on Climate-related Financial Disclosures (TCFD)
recommendations to promote understanding and disclosure of the impact of climate change on our businessactivities.
We provide climate change-related disclosures in accordance to the recommendations.

■ Strengthened decarbonization
support services, addressing climatechange through businessWe have adopted ESG management, which is designed to solve
social issues through business, and have identified Materiality
issues (see p.23-24), which include climate change and global
warming countermeasures and nature conser vation andenvironmental impact reduction. In addition, as a member of the
AEON Group, we will support initiatives to reduce total GHG
emissions from stores to zero in accordance with the AEON
Decarbonization Vision. After reviewing both the opportunities
and risks surrounding our Group associated with climate change,
we believe that the opportunities for our business activities
outweigh the risks. This is based on the premise that we continue
to appropriately manage risk and strengthen our existing crisis
response capabilities against disasters and other incidents, aswell as the decarbonization support services we provide to ourcustomers, including facility energy conservation. We willcontinue to extensively analyze the risks and opportunities thatclimate change poses to our business, confirm the direction of
our own initiatives, and reflect them in our management
strategies, thereby improving the resilience to climate change for
our Group and our customers. Furthermore, we will proactively
disclose information regarding our efforts to address climatechange in order to help create a decarbonized society andensure our sustainable growth as a company.
Below is a description of each of the AEON delight Group's
policies on climate change with respect to governance, strategy,
risk management, and indicators and targets.

Role of the management (executive) team
The Group's Executive Committee, consisting of President &CEO and key executive officers, deliberates on social issues,
including climate change and sustainability, and evaluates thestatus of environmental initiatives. In addition, the executive
officer in charge of ESG, who is also a member of the Executive
Committee, will take the lead in promoting company-wide
initiatives.

AEON Decarbonization Vision (Aeon Co., Ltd.)

Overall
Evaluation

Timeframe

Increase in raw material prices due to introduction of carbon tax

Small

Medium-term

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

Small

Medium-term

Increase in electricity and fuel costs

Small

Medium-term

Capture demand for environmentally friendly products and services

MediumShort-term

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

MediumShort-term

Risk/Opportunity
Transition risk

Sourcing

Risk

Directoperation

Risk

Products &Services

Opportunity

Physical risk

■ Strategy
Sourcing

Selection of scenario
The Group has selected the "less than 1.5℃/ 2℃ scenario," inwhich the impacts on the transitional side become apparent, andthe "4℃ scenario," in which the impacts on the physical side
become apparent, as published by the Intergovernmental Panelon Climate Change (IPCC) and the International Energy Agency(IEA). For the time frame, we selected 2030 for the medium termand 2050 for the long term.
In conducting the scenario analysis, in order to ascertain theimpact on the entire AEON delight Group, the analysis covered all
domestic businesses (excluding certain support businesses),
which comprise approximately 90% of the Group's sales.

Deliberation process
Identificationof risk andopportunities

WEB

Area ofimpactImpactassessment

Considerationofcountermeasures

Increase in procurement costs due to supply chain disruptions

MediumMedium-term

Opportunity

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

Mediumto large

Medium-term

MediumMedium-term

Small

Medium-term

Directoperation
Risk

Products &Services
Quantificationof critical
items

Risk

Opportunity

Operational impact (reduction or shutdown of distribution center
functions), inability to operate stores, inventory loss from damaged
and discarded merchandise
Decrease in earnings due to work restrictions, operational impact,
employee injuries and illnesses, and difficulty in recruiting humanresources due to the increased number of extremely hot days
Expansion of demand for cleaning and disinfection services in
response to increased risk of infectious diseases due to global
warming* For transition risk, "SDS" (IEA WEO2020, less than 2℃ scenario), "NZE" (IEA Net Zero by 2050, 1.5℃ scenario), SSP1-1.9, SSP1-2.6 (IPCC AR6, less than 2℃ scenario)(equivalent to RCP2. 6 of AR5) are referenced for less than 1.5℃/ 2℃ scenarios. For physical risk, SSP2-7.0 (IPCC AR6, 4℃ scenario) (equivalent to RCP8. 5 of AR5) as
4℃ scenario. 6), and for physical risks, SSP2-7.0 (IPCC AR6, 4℃ scenario) (equivalent to RCP8.5 of AR5) and STEPS (IEA, 4℃ scenario) are referenced for 4℃
scenarios.

▶ https://www.aeon.info/en/sustainability/datsutanso/

Material Issues▶ https://www.aeondelight.co.jp/english/csr/materiality.html■ GovernanceSupervision by the Board of Directors
The Board of Directors receives and monitors repor ts on
activities and issues related to climate change in accordancewith the annual agenda of the Board of Directors.
In August 2021, the Board of Directors approved and announced
the ‘Basic Policies for Sustainability’. The Board of Directors willoversee the implementation of initiatives with a stronger focus onsustainability in business models, growth strategy, and businessactivities.
27

Introduction of carbon tax and increased costs

Increase in renewable energy procurement costs

In order to achieve carbon neutrality by 2050, a carbon tax is
expected to be introduced in Japan, the AEON delight Group's
primary base of operations. Based on our calculations, we
assume that even if a carbon tax is introduced, the additional
cost will be limited to less than 1% of the Group's net income. We
will continue our efforts to conserve energy in order to reduce theimpact on our business.

In order to achieve the AEON Decarbonization Vision 2050, the
AEON delight Group may switch the procuring electricity torenewable energy sources. Even if we replace 100% of ourelectricity with renewable energy, the additional cost is expected
to be limited to less than 1% of our Group's net income.

28

TCFD
Growing demand for decarbonization andservices for energy saving
The AEON delight Group provides a variety of services that help
combat global warming, including installation of energy-saving
equipment, energy-saving operations of various facilities,
fluorocarbon management services based on the Fluorocarbons
Emission Control Law, and proposing environmentally friendly
materials.
Going forward, we will provide solutions to fully support ourcustomers' decarbonization efforts by adding renewable energy
procurement support and other services to these solutions.
■ Proposing energy reduction in facilities

We propose energy-saving air conditioning equipment andlarge-scale facilities, including LED lighting, which can significantly
reduce electricity consumption, in addition to introducing BEMS
( Building a nd Ener g y Ma nagement S ys tem ) , a n ener g y
management system that monitors, controls, and visualizes
electricity consumption in buildings and other structures.
■ Implementing an open network system

We propose the introduction of an open network system that
networks the various equipment in a facility and enables
centralized management in real time. This system allows
customers to operate their facilities efficiently by making full useof remote operations and also contributes to energy saving in thefacilities.
■ Providing fluorocarbons management services

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

■ Developing renewable energy-related businesses

We provide electricity services to commercial facilities, officebuildings, medical institutions, and other special high-voltage andhigh-voltage electricity using facilities, supplying electricity atreasonable prices and with the same quality and stability as in thepast. At the same time, we are working together with ourcustomers to prevent global warming by offering "CO2 emission
reduction plans" combined with non-fossil fuel energy certificates*and "100% renewable energy plans" such as solar power, wind
power, and biomass.
In addition, we are developing solar power generation businesses
at Kikugawa Ishiyama Solar Ltd. and Kikugawa-Horinouchiya SolarCo., Ltd. (in Kikugawa City, Shizuoka Prefecture), both of which areequity method affiliates.

with the Act on Promotion of Resource Circulation for Plastics.
In FY2020, we began offering paper straws developed in-house.
These straws have a four-layer structure that is both strong andwater-resistant. In FY2021, we provided approximately 50 million
pieces of cutlery and switched 48% of our straw shipments topaper straws, contributing to a reduction of approximately 150 tonsof single-use plastic per year for cutlery and straws combined.
We also promote the use of biomass resources to reduce the useof fossil resources and the carbon dioxide emitted into theatmosphere during incineration. For example, we propose to ourcustomers the use of plastic bags and packaging materials madeof biomass plastic and inks containing biomass-derived
ingredients.
WEB

Environment▶ https://www.aeondelight.co.jp/english/csr/environment/

Occurrence of major disasters caused byclimate change
Following the occurrence of a major or wide-area disaster,
including natural disasters caused by climate change, the AEON
delight Group has supported its customers' crisis management
by setting up a disaster response headquarters immediately after
the disaster, utilizing its nationwide network of service bases andits own internal and external networks to restore damaged
facilities, dispatch support personnel, coordinate with relevant
government agencies (fire departments, police departments,
water authorities, etc.), and procure disaster response materials,
equipment, and supplies. The AD Solution Center (Osaka City,
Osaka Prefecture and Komaki City, Aichi Prefecture), a disasterprevention center that plays a central role in responding todisasters, constantly collects and analyzes disaster information
and remotely monitors managed facilities for abnormalities inorder to prepare for risks caused by disasters. From August 2021,
we further strengthened our disaster resilience by assigning ourhead office in Chiyoda-ku, Tokyo with backup functions for the
AD Solution Center. In addition to our own business continuity
plan (BCP), we will continue to work on the development ofdisaster prevention and mitigation systems, including BCPs forour customers.

AD Solution Center provides crisis management services such as
information gathering and distribution on natural disasters andaccidents, and remote monitoring of facilities for abnormalities, 24hours a day, 365 days a year.
In addition, the AD Solution Center has established Customer
Support Center (CSC) at eight branch offices nationwide, which
provides remote support for the management and operation ofcustomer facilities in each region. In the event of an emergency,
the AD Solution Center serves as the information gathering andanalysis team and coordinates with the CSCs to provide prompt
disaster support and achieve early restoration and resumption ofoperations at customer facilities.

Disaster outline● A magnitude 7.4 earthquake

occurred off the coast of
Fukushima Prefecture, withan intensity of 6 Upper on
the Japanese seismic scalein Miyagi and Fukushima
Prefectures, causinglarge-scale power outages
mainly in the Tohoku andKanto regions.
● Many customer facilities
were damaged over a wide
area in the Tohoku region.

AEON delight Group's main support activities● Dispatched a total of 577 support personnel*● Arranged disaster response equipment (fireextinguishers, generators, temporary toilets, fuel, etc.)● Provided relief supplies (water, food, daily necessities)● Fixed leaks in sprinklers, boilers, and water supply

and drainage pipes● Supplied water in response to water outage● Responded to partial power outages and power leaks● Restored escalators and elevators● Closed compartments and conducted restoration

work for falling ceilings and walls, cracks, and floor
cracksEarthquake off the coast of Fukushima Prefecture (February 13, 2021)
Disaster outline● A magnitude 7.3 earthquake

occurred off the coast of
Fukushima Prefecture, witha maximum intensity of 6Upper on the Japaneseseismic scale.
● Many customer facilities
were damaged over a wide
area in the Tohoku region.

AEON delight Group's main support activities● Dispatched a total of 519 support personnel*● Arranged disaster response equipment (fireextinguishers, generators, temporary toilets, fuel, etc.)● Provided relief supplies (water, food, daily necessities)● Removed fallen objects and arranged collection anddisposal of damaged items● Restored damaged sprinklers● Drained and cleaned flooding associated with broken

sprinklers and water supply and drainage pipes● Checked for people confined within elevators due tostoppage

The AEON delight Group has distribution centers located acrossJapan. Although the risk of river flooding may increase due tomore severe extreme weather events in the future, which may
cause flooding risk to some distribution centers, we estimate thatthe amount of damage, such as inventory losses, will be minor. In
addition, measures are in place to deliver replacement goods
from other distribution centers in the event that a distribution
center is shut down due to a power outage or disaster.

Advancement of scenario analysis going forward
Through scenario analysis, we have reaffirmed the magnitude of
the risks and opportunities that climate change presents to ourbusiness. The risks are not necessarily enormous, and we
confirmed that we have already taken measures to addresscertain key risks.
At the same time, we have confirmed that the AEON delightG r o u p' s c l i m a t e c h a n g e c o u n t e r m e a s u r e s a n d c r i s i smanagement contribute to risk avoidance and to improving
climate change risk resilience not only for ourselves but for ourcu s to m e r s a s we ll. We w ill c o n t inu e to s t r e n g t h e n o u r
decarbonization services and crisis management to help reduceclimate change risks in society.

● Supported restoration work for damaged facilities,etc.

Hokkaido Eastern Iburi Earthquake (September 6, 2018)
Disaster outline● A magnitude 6.7 earthquake

occurred in thecentral-eastern part of the
Iburi region of Hokkaido,
with a maximum intensity of
7 on the Japanese seismic
scale. A series of power
plant shutdowns caused by
the earthquake resulted inlarge-scale power outages.
● Many customer facilities
were damaged due topower outages throughout
Hokkaido.

Disaster outline● The torrential rains triggered

by Typhoon No. 7 and theseasonal rain front caused
record-breaking damage
across a wide area of thecountry, especially inwestern Japan.
● Many of AEON delight's
customer facilities were
flooded or inundated.

AEON delight Group's main support activities● Dispatched a total of 171 support personnel*● Arranged disaster response equipment (fireextinguishers, generators, temporary toilets, fuel, etc.)● Provided relief supplies (water, food, daily necessities)● Activated permanent generators and emergency

generators● Inspected and restored facilities and equipment

associated with the restoration of power

AEON delight Group's main support activities● Dispatched a total of 328 support personnel*● Arranged disaster response equipment (fireextinguishers, generators, temporary toilets, fuel, etc.)● Provided relief supplies (water, food, daily necessities)● Cleaned and disinfected the inside/outside of facilities

after they were flooded● Conducted temporary water supply work, such asarranging for a water truck to transport water from thewater treatment plant to affected areas.

● Checked the water quality during the restoration ofwater supply● Installed temporary power sources● Investigated the leakage of electricity due to theflooding and restored the malfunction of equipment,etc.

* We calculated the number of support personnel by converting every 8 hours of
their work per day as 1 person (for approximately one month after theearthquake).

WEB■ Proposing environmentally-friendly

We deployed alternative functions for the Crisis
Management Center at our new Headquarters▶ https://www.aeondelight.co.jp/english/news/2021083_new-headquarters-is-assigned-the-backup-function-of-a-crisis-management-center.pdf
We deployed alternative functions for the Crisis
Management Center at our new Headquarters (Japanese)▶ www.aeondelight.co.jp/news/20210309

commercial products

29

Earthquake off the coast of Fukushima Prefecture (March 16, 2022)

Operational Impact■ Risk management
AEON delight Group has established the AEON delight Group
Basic Regulations for Risk Management and has a r isk
management system in place to make necessary judgments andtake actions against various risks foreseeable in our businessactivities (see page 39).
The Risk Management Committee is responsible for overseeing
the risk assessment, analysis, and proposed countermeasuresconducted by each Risk Management Department, and forverifying each risk scenario. In the future, we plan to integrate
climate change risk into our company-wide risk management
process.

July 2018 Torrential Rain (June 28 to July 8, 2018)■ AD Solution Center and Customer Support Center (CSC)* Non-fossil fuel energy certificates: Certificates of the environmental value
provided by electricity generated from renewable energy sources that do notemit CO2.

Based on the Aeon Plastic Utilization Policy, which aims to halve
the amount of single-use plastic by 2030 (compared to 2018), weare promoting the reduction of plastic materials used in stores. In
addition to conventional methods such as making materials thinnerand lighter, we are also working on a plastic-free initiative to change
the material of spoons and forks to paper and wood in accordance

Examples of Past Support Activities■ Indicators and targets
AEON Decarbonization Vision
Based on the AEON Decarbonization Vision, the AEON Group is
promoting initiatives to reduce the total amount of greenhousegas emissions from its stores to zero by conserving and creatingenergy, using a three-pronged approach from the perspective of“stores”, "products and logistics," and “hand in hand withcustomers". The AEON delight Group will also contribute to thedecarbonization of society by promoting energy conservation atcustomer facilities and other measures to combat global
warming, as well as through selling environmentally friendly
products(see p.26).

Materiality-based targets
In FY2021, AEON delight Group identified 12 materialities aspriority issues to be addressed, and set our 2030 targets for eachof them. We also set targets for environmental materialities of"climate change/global warming countermeasures and nature
conservation and environmental impact reduction" (see pages
23-24).

Support activities following the Great East Japan Earthquake:
AEON delight’s Contributions (Japanise)▶ https://www.aeondelight.co.jp/csr/society/pdf
Customer Support Center (CSC)30

Corporate GovernanceOutside Director Message

Outside Director Message

DX is the way forward,
and the future issue ismanagement talent development

Becoming a rewarding
and open group company

Keiji Yoshikawa Outside Director

After working at Morgan Stanley Japan Securities Co.,
Ltd. and other firms, Ms. Takada moved into academia,
where she is currently a professor at the HOSEIBusiness School of Innovation Management Global
MBA Program. She specializes in organizational
behavior, leadership, management organization, andfamily business, and has authored several books forbusinesspeople.

Asako Takada Outside Director|

Conversely, what do you think are the Group’s issues?

What I believe is an issue is the development of management
personnel who are well-versed in business. More than ever, weneed managers who have the DNA of AEON Delight to grasp
issues that arise in the field. AEON delight has many employees
who are well-proficient in business operations, but I believe welack sufficient management personnel. Management and administration are fundamentally different. Administration entails allocating
people and budgets in order to increase profits, whereas management requires making major decisions in uncharted territory. In
31

My expectation of the Group management team is to draw up abusiness portfolio based on the future vision we are aiming for,and to disseminate that vision throughout the Group. To achievethis, they need to establish a medium-term management plan.
They need to think about what the business structure should look
like in five years. In some cases, the suspension of certain businesses will be an option. Management resources are limited, and it
is management's job to optimize their allocation. As a result of DX,
there is now a network of information throughout the Group, which
will be useful in such decision-making.
In addition, management personnel need to improve their communication skills. Considering AEON delight's future expansion
overseas, management personnel need to be able to work together with people from different languages and cultures to achieve
results. I believe that the information network introduced by DX will
be useful in utilizing such human resources.

Prior to my appointment as an Outside Director, I had imagined
AEON delight to be a company with strong Aeon Group colors,
given that it is a subsidiary of the distribution giant. However, after
observing this company for a year, I realized that this was not thecase. My impression is that the company has a strong desire tocreate new businesses on its own, and while inheriting the enterprise values that the Aeon Group holds dear, it is a company with
its own unique color that differs from that of its parent company.
In terms of management, AEON delight Group is commendable
for taking the orthodox path of emphasizing human resource
development while also focusing on its core business. In particular,
the Group is investing in human resource development by further
increasing its training budget from FY2022, and is implementing
initiatives in line with the basic principle that "what makes a company great is its people.” It may take time until these initiatives leadto results, but that also means that it has a bright future ahead. I
will cooperate with the Group to the best of my ability.

Conversely, what do you think are the Group’s issues?

I feel that one of the issues is diversity. As common in Japanesecompanies, the decision-making bodies of AEON delight are
currently almost entirely composed of men, and the Board of
Directors has discussed increasing the number of female managers in order to achieve gender diversity. However, since thenumber of female employees is small to begin with, this will not
happen overnight. AEON delight positions office managers as“regional managers" who play an important role in the company’s
growth, and in April of this year, it held a training program for them,in which I served as a lecturer. In that training, I stressed the need
for women to advance in the workforce. However, even at theoffice manager level, only about half of the participants understood exactly what I was saying and agreed with me. It takes time
to change people's mindset. I believe it is necessary for those in
the management level to keep repeatedly communicating theimportance of achieving diversity.
In some cases, a quota system, in which a certain percentage of
positions are allocated to women, is introduced to correct thegender gap. However, I believe that AEON delight is not yet readyfor that stage. The prerequisite for a successful quota system isthe existence of a certain number of capable female candidates,
but the company has an overwhelmingly small number of female
employees. I believe it is important to first increase the number offemale employees and create an environment that encourages
them to work for a long time.

Going forward, is there anything you would like to workon as an Outside Director?

|

Is there anything you would like to advise management onin the future?

How do you evaluate AEON delight Group’s governance?

|

Japan, personnel who have done administrative work often
become managers, and most companies do not have a system fordeveloping specialized management personnel. AEON delight is
no exception.
Under these circumstances, I believe AEON delight's future challenge is how to develop management personnel. One possible
solution is the use of subsidiaries. AEON delight has many subsidiaries in Japan and abroad with different business structures.
I believe that by selecting people from all AEON delight as candidates for future management and giving them hands-on experience in a completely different career path at a subsidiary, they willgrow into management personnel.

||

How do you evaluate AEON delight Group’s governance?

AEON delight is a listed subsidiary, but the corporate governancestructure itself is comparable to other listed companies I haveseen. In addition, the Executive Division is highly motivated to
grow in markets outside the Aeon Group, and the Board of Directors has had many discussions on this issue.
It has been a year since I became an Outside Director and what
has impressed me the most is AEON delight's strong will to transform its business model through digital transformation (DX) andthat these efforts are moving in the right direction.
AEON delight is engaged in a wide range of businesses and uses
a variety of systems in its operations. In promoting DX, the Group
first promoted the integration of these systems, but this is not
simply a matter of connecting systems via a network; rather, it istaking stock of each business process, streamlining those
processes, and then integrating the systems. I feel that AEON
delight is taking an approach that understands the essence of DX,
rather than just digitalization. As a result of thZese efforts, necessary data is being shared within the Group, and a system is now
being established to make effective use of this data.

|

From 2012 to 2015, Mr. Yoshikawa ser ved as
Director, Representative Director, President andCEO of Nippon Sheet Glass Co., Ltd. He then took
the helm of a global company where approximately
80% of the employees were non-Japanese as aresult of a large M&A with a foreign company, andhelped to improve productivity at the manufacturingsite. He currently serves as an Outside Director for
AEON delight and several other listed companies,
and is also active as a management consultant.

I would like to have more opportunities to communicate withGroup employees and hear many real voices. AEON delight Group
has a diverse workforce, including women, LGBTQ people, young
people, and non-regular employees. Since the Group has gone
through several mergers, there are also many employees whose
corporate culture they have grown up with is different from that of
AEON delight. I would like to listen to their frank opinions andreflect them in management. By doing so, I hope to foster an open
corporate culture in which a diverse range of people can work
together in a rewarding and open environment.

32Corporate GovernanceManagement Structure■ Directors (As of May 18, 2022)■ Auditors (As of May 18, 2022)
New Appointment

Kazumasa
HamadaJan. 1999 Joined Japan Maintenance Co., Ltd. (currently AEON delightCo., Ltd.)
Jun. 2007 Manager, QMS Department, Crisis Management & QMS Division
Mar. 2008 Manager, Cleaning Business Department, Cleaning Business
DivisionMar. 2010 General Manager, Cleaning Business Division
May 2016 Executive Officer and General Manager of Cleaning Business
Division
Nov. 2018 Executive Officer and General Manager of Service Network
Promotion Division
Jul. 2019 Executive Officer and Manager of Kanto Regional Office
Mar. 2020 Executive Officer in charge of overseeing East Japan operations
Feb. 2021 Executive Officer in charge of overseeing Marketing DX
Mar. 2021 Managing Director in charge of overseeing Marketing DX
May 2022 Director and Managing Director in charge of overseeing
Marketing DX (current position)

New Appointment

Director andManaging Director
COO of Japan Group
Companies

Director andManaging Director
Marketing DX

President & CEOGroup CEOMar. 1987 Joined JUSCO Co., Ltd. (currently AEON Co., Ltd.)
Nov. 2006 Head of Management Planning Department of Posful
Corporation (currently AEON Hokkaido Corporation)
Mar. 2007 Executive Officer, Posful Corporation (currently AEON
Hokkaido Corporation)
Sep. 2008 General Manager of Control Division of AEON Retail Co., Ltd.
Mar. 2011 Executive Officer, AEON Retail Co., Ltd.
Mar. 2013 Director and Control and Accounting Officer of Aeon Co., Ltd.
Feb. 2015 Regional Office Manager of Kitakanto and Niigata Companyof AEON Retail Co., Ltd.
Director and Senior Managing Officer, AEON Retail Co., Ltd.
Mar. 2017 Senior Managing Executive Officer, AEON Retail Co., Ltd.
Mar. 2018 Temporarily transferred to AEON delight Co., Ltd. (Advisor)
May 2018 President and CEO, AEON delight Co., Ltd.
Dec. 2018 Representative of Commissioner, PT Sinar Jernih Sarana(current position)
Jul. 2019 Group CEO, AEON delight Co., Ltd.
Dec. 2019 General Manager of Financial and Accounting Division (CFO),
AEON Delight Co., Ltd.
Apr. 2020 Representative Director, President and CEO, AEON delightCo., Ltd. (current position)
Jul. 2021 Director of AEON delight (China) Co., Ltd. (current position)

Hideyuki
Mito

Goro
MiyamaeApr. 1980 Joined Japan Maintenance Co., Ltd. (currently AEON delightCo., Ltd.)
Sep. 2006 Manager of Sales Department IV
Mar. 2011 General Manager of Sales Promotion Division
Mar. 2012 Manager of Minamikanto Regional Office
Mar. 2013 Executive Officer in charge of overseeing East Japan Regional
Office operations
May 2015 In charge of overseeing West Japan Regional Office operations
May 2017 Managing Director in charge of operations
May 2018 Director and Managing Director in charge of operations
Mar. 2019 Director and Managing Director in charge of overseeing businessJul. 2019 Managing Director in charge of overseeing businessMar. 2020 Managing Director in charge of overseeing business, and
COO of Japan Group Business
Oct. 2020 Managing Director and COO of Japan Group BusinessPresident, A to Z Service Co., Ltd. (currently AEON DELIGHT
CONNECT CO., LTD.)
Feb. 2021 President, DO SERVICE Co., Ltd. (currently AEON DELIGHT
CONNECT CO., LTD.)May 2021 Director, AEON delight Co., Ltd.
Mar. 2022 Director and Managing Director
Apr. 2022 Director and Managing Director, and COO of Japan Group
Business (current position)

Independent Auditor

Hiroyuki
Watanabe

Takashi
KurodaTsukasa
Takahashi

Director

Outside Auditor

Outside Auditor

Apr. 1982 Joined Isejin Jusco Co., Ltd. (currently Aeon Co., Ltd.)
Sep. 2003 General Manager of Administration Division of Kanto Company of
JUSCO Co., Ltd.
May 2006 Representative Director of AEON Financial Project Co., Ltd.
(currently, AEON Bank, Ltd.)
Sep. 2006 Director in charge of overseeing Human Resources and General
Affairs, and Public Relation
Apr. 2008 Director and Managing Executive Officer in charge of Human
Resources and General Affairs
Jun. 2012 Director, Senior Managing Executive Office, and Head ofCorporate Management DivisionNov. 2012 Director of AEON CREDIT SERVICE CO., LTD. (currently, AEON
Financial Service Co., Ltd.)
Apr. 2014 Representative Director and Senior Managing Executive Officer,
Head of Sales Division of AEON Bank, Ltd.
Apr. 2015 President and Representative Director
Jun. 2017 Director and Executive Vice President of AEON Financial Service
Co., Ltd.
Sep. 2018 Executive Of ficer in charge of Human Resources andAdministration, Administration & Risk Management of Aeon Co., Ltd.
Oct. 2018 Director of AEON Financial Service Co., Ltd. (current position)
May 2021 Director, AEON delight Co., Ltd. (current position)
Mar. 2022 Executive Vice President and Executive Officer in charge of
Human Resources and Administration, Administration & Risk
Management of Aeon Co., Ltd. (current position)

Apr. 1987 Joined The Chuo Trust and Banking Company, Limited(currently Sumitomo Mitsui Trust Bank, Limited)Nov. 2000 Director and General Manager of Administration Division of
DBMG Inc.
Dec. 2006 Affiliates Department of AEON Co., Ltd.
Sep. 2008 Temporarily transferred to The Daiei, Inc.
Apr. 2014 Project Team Leader, AEON Financial Service Co., Ltd.
Apr. 2015 Manager of Strategy Department
Apr. 2016 Executing Officer in charge of overseeing strategy of AEON
Bank, Ltd.
Jun. 2018 Director and Executive Officer in charge of Business Planning
Apr. 2019 Director, Executive Officer and General Manager of Business
Planning Division
Apr. 2019 Director in charge of Business Planning of AFS Corporation
Co., Ltd.
Jun. 2019 Director and Executive Officer, Head of Business Planning
Division of AEON Bank, Ltd.
Apr. 2021 Director, Managing Executive Officer, and Head of Corporate
Management Division
May 2022 Outside Auditor, AEON delight Co., Ltd. (current position)

Apr. 1989 Registered with the Osaka Bar Association and Joined
Katsube Law Office (currently Katsube Takahashi Law Office)Apr. 1994 Partner, Katsube Takahashi Law Office (current position)
Apr. 2006 Part-time Instructor, Kwansei Gakuin University Law School
Apr. 2007 Part-time Instructor, Kyoto University Law School
Apr. 2010 Vice President, Osaka Bar Association
Apr. 2012 Visiting Professor, Kyoto University Law School
Apr. 2013 Special Professor, Kyoto University Law School
May 2013 Outside Auditor, AEON delight Co., Ltd. (current position)
Mar. 2019 Outside Auditor, Nippon Electric Glass Co.，Ltd. (current position)
Jun. 2020 Outside Auditor, NIPPON SHOKUBAI CO., LTD. (current position)

New Appointment
Independent Director

Independent Director

Independent Director

Independent Director

Independent Auditor

MasaakiFujitaYoshiaki
Hompo

Keiji
Yoshikawa

Asako
TakadaYuji
KawabeMari
Ebisui

Outside Director

Outside Director

Outside Director

Outside Director

AuditorOutside Auditor

Apr. 1978 Joined Matsushita Electric Industrial Co., Ltd. (currently
Panasonic Corporation)
Apr. 2003 Chief of PDP TV Business Unit, Imaging Business Group of
Panasonic AVC Network Company
Apr. 2006 Senior Vice President, Chief of PDP TV Business Unit, Visual
Products and Display Devices Business Group of Panasonic
AVC Network Company
Jun. 2009 Director, Corporate Quality Administration Division, in chargeof Corporate FF Customer Support & Management Division,
Panasonic Corporation
Mar. 2010 Division Manager of Technology & Quality Division in charge of
FF Market Response Division; in charge of Global Procurement
and Director of Procurement Division; in charge of Global
Logistics and Director of Corporate Global Logistics Division; incharge of Trading Company, Panasonic Corporation
Apr. 2011 Managing Executive Officer, Panasonic Corporation
Apr. 2014 Specially Appointed Professor of Industry-University
Cooperative Center for Advanced Education Research
Organization for the 21st Century, Osaka Prefecture University
May 2015 Outside Director, AEON delight Co., Ltd. (current position)

Apr. 1974 Joined the Ministry of Transport (General Affairs Division of Civil
Aviation Bureau)
Apr. 1983 Seconded to Geneva Office of Japan National Tourism
Organization (JNTO)
May 1988 First Secretary of Permanent Delegation of Japan to theOrganisation for Economic Cooperation and Development (OECD)
Jan. 1991 Deputy Assistant Vice-Minister
Jul. 2001 Deputy Director-General (Maritime Bureau & Ports and Harbours
Bureau ) of Minister’s Secretariat of Ministr y of Land,
Infrastructure, Transport and Tourism
Apr. 2003 Senior Vice President (Logistics & International Division), Japan Post
Jul. 2007 Deputy Vice Minister for Tourism Policy, Minister’s Secretariat of
Ministry of Land, Infrastructure, Transport and Tourism
Oct. 2008 Commissioner of Japan Tourism Agency
Apr. 2010 Professor at Tokyo Metropolitan University
Jan. 2014 Special Adviser of Japan Tourism Agency
Nov. 2014 Adjunct Professor of Tokyo Institute of Technology
Apr. 2015 Research Professor of Faculty of Urban Environment, Tokyo
Metropolitan University
Jun. 2015 Outside Director, THE KEIHIN CO., LTD. (current position)
Jun. 2016 Chief, UNWTO Regional Support Office for Asia and the Pacific(current position)
Apr. 2017 Visiting Professor of Tokyo University of Engineering
May 2017 Outside Director, AEON delight Co., Ltd. (current position)
Apr. 2018 Visiting Professor at Tokyo Metropolitan University (current position)
Aug 2021 Director and Chairman of Tobu Top Tours Co., Ltd.

Apr. 1973 Joined Nippon Sheet Glass Co., Ltd.
Jun. 2004 Corporate Officer, General Manager of Information &Telecommunication Device Division, and Plant Manager ofSagamihara Plant
Jan. 2008 Corporate Officer and General Manager of IT Business Unit
Jun. 2008 Director, Executive Officer, and Head of Specialty GlassWorldwide
Feb. 2012 Director, Representative Executive Officer, and Executive Vice
President and CPMO (Chief Project Management Officer)
Apr. 2012 Director, Representative Executive Officer, and President andCEOJun. 2015 Advisor
Jun. 2018 Outside Director of Kansai Paint Co., Ltd. (current position)
May 2021 Outside Director, AEON delight Co., Ltd. (current position)
Jun. 2021 Outside Director and Member of the Audit and Supervisory
Committee of Fujikura Ltd. (current position)

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

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

Apr. 1981 Joined Personnel Division, Police Affairs Bureau of National
Police Agency
Aug. 2002 Director of Police Administration Department of Chiba Prefectural
Police Headquarters
Aug. 2004 Chief of Tochigi Prefectural PoliceJan. 2006 Counsellor of Cabinet Secretariat (Cabinet Intelligence andResearch Office)Jan. 2010 Chief of Aichi Prefectural PoliceAug. 2012 Deputy Director-General to Commissioner-General's Secretariat(Security Bureau) of National Police Agency
Aug. 2013 Deputy Director-General of Cabinet Satellite Intelligence
Center of Cabinet Secretariat
Nov. 2015 Advisor of Aeon Co., Ltd. (current position)
May 2016 Auditor of AEON Retail Co., Ltd. (current position)
May 2016 Auditor of The Daiei, Inc. (current position)
May 2017 Auditor, AEON delight Co., Ltd. (current position)
Jun. 2017 Auditor, AEON Credit Service Co., Ltd. (current position)
May 2022 Advisor of Aioi Nissay Dowa Insurance Co., Ltd. (current position)

Apr. 1985 Joined Ajinomoto General Foods, Inc. (currently Ajinomoto
AGF, Inc.)
Nov. 1997 Certified as certified public tax accountant in the United States
Mar. 1998 Joined KPMG Peat Marwick Tokyo (currently KPMG Tax
Corporation)
Jul. 2001 Representative Director, Ebisui Accounting & Consulting (current
position)
Apr. 2008 Registered as a United States certified public accountant(USCPA)
Jun. 2016 Registered as a Certified Fraud Examiner (CFE)
Jun. 2020 Director of JAPAN Society of U.S. CPAs
Apr. 2021 Outside Director of Ricoh Leasing Company, Ltd. (current position)
May 2022 Advisory Board Member of Japan Corporate GovernanceResearch Institute (current position)
Outside Auditor, AEON delight Co., Ltd. (current position)■ Executive Officers (As of May 18, 2022)
Managing Directors

33

Executive Officers

Yasuo Miyake

Keiji Sagata

Noriaki Ikuta

Hiroki Miyamoto

Akira Inada

Kiichi Goto

Chen Liuhang

Guan Zhujuan

Tsutomu Taniguchi

Takayuki Kojio

China BusinessGroup Strategy and ESG

General Manager
of Regional Offices Division

General Manager ofSales Division

General Manager of Corporate Sales
Division of Sales Division

Materials and Vending Machines Business

COO of China business

COO of ASEAN Business

Tetsuya Akutsu

Jouji Kitabayashi

Hiroshi Kato

Souichi Yamaguchi

Hiroaki Ochi

Daisuke Ninomiya

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

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

General Manager of Financial and Accounting Division (CFO)

General Manager of
Quality Control Division

General Manager ofConstruction Work Division

General Manager ofGroup Control Division

General Manager of Group Governance Division,
Organizational Culture Reform

General Manager of Group Personnel,
General Affairs and IT Division34

Corporate Governance

Basic Philosophy

Board of Directors

Based on our Management Principle, "We pursue the creation of 'environmental value' for the customers and for the
local communities," we fulfill our responsibilities to our stakeholders through sustainable growth of our company and byincreasing the value of our company, and implement an optimal corporate governance system designed to best meetthe needs of society and the business environment.
In AEON delight Corporate Governance Guidelines, we have defined our corporate governance system as "a mechanismthat helps to bring about sustainable growth of our company by maintaining balance between 'offense' and 'defense' inthe four areas as follows":

2
3
4

Means for integrating the business activities of the members (executives and employees) of our enterprise under one policy orvector and then utilizing managerial resources to the maximum degree
Basic promises that underpin the trusting relationships with stakeholders who support our enterprise
Preparedness for unexpected ordinary or extraordinary events
Rules each enterprise should follow for surviving as a member of societyWEB

Ordinary General Meeting of Shareholders
Propose,Vote

Accounting Auditor

Audit Report

Accounting
Audit

Board of Directors

Request, Advise

Audit

4 Inside Directors
Nomination and Compensation
Advisory Committee
Evaluation Advisory Committee
Special Committee

Request,AdviseParticipate

4 Outside Directors(incl. 4 Independent
Directors)

Assess,Confirm

Board of Auditors
1 Internal corporate
auditors

3 Outside corporate auditors(incl. 2 Independent
Director)
ReportInternal control
Status report
ReportReportBusiness
performance
reportingby directors

Report,ProposeGroup Corporate Audit
Department
Audit

Business Execution
Structure of AEON delight
President & CEO
Management Committee
Regional Office Management Committee
Domestic Group Management Committee
Overseas Group Management Committee
Operational Strategy Committee
Credit Management Committee

35

Meeting ofGroup
Auditors

Consolidated Subsidiaries
Auditors of Consolidated Subsidiaries

Supervise

ReportBusiness
Department
Sales
Department
Management
Departments

Corporate Auditors attend the meetings of the Board of Directors
and Board of Executive Officers as well as other important
meetings, and serve a key supervisory function with regard todecisions made and duties executed by the Directors and Board of
Directors.
No. of meetings held in FY2021: 20■ Voluntary advisory groups to theboard of directors
Nomination and Compensation
Advisory Committee
The Nomination and Compensation Advisory Committee wasestablished to enhance the transparency and objectivity of theBoard of Directors. To this end, it advises and reports to the Board of
Directors on the selection and nomination of candidates for Director
and Corporate Auditor, succession planning for the President andRepresentative Director, and incentive plans and compensation for
Directors. The Committee likewise advises and reports on theelection and dismissal of Representative Directors and Directors ofGroup companies. After the 2022 Annual Meeting of Shareholders,
we have made the majority of the members of the Nomination andCompensation Advisory Committee independent Outside Directors.

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

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

Strengthening the system to enhanceGroup governance
We are building the following three pillars of Group governance toaccelerate the growth strategy of the entire AEON delight Group andto strengthen the Group governance system: (1) growth strategy byindividual company; (2) budget and performance management; and(3) internal control system.
We established a monitoring and auditing system to ensure thatthese three pillars of Group governance are functioning
systematically. Specifically, our Board of Directors, the Domestic
Group Management Meeting and the Overseas Group Corporate
Audit Department, which have been delegated authority by our
Board of Directors, conduct monitoring, and Corporate Auditors andthe Corporate Audit Department audit the overall effectiveness ofthe system.

Other Voluntary Committees
Since March 2021, we established two committees (see p. 42). One
is the Group Governance Enhancement Promotion Committee,
which, in addition to strengthening the existing Risk Management
Committee, is responsible for monitoring the maintenance andcontinuation of measures to prevent the recurrence of accounting
irregularities that occurred at AEON delight's consolidated
subsidiary in the past. The second is the Corporate Culture
Committee, which is responsible for disseminating the Group's
common philosophy and the Delight Way as a mindset for all Group
employees, as well as for promoting diverse work styles andenvironments based on diversity.
In FY2021, two meetings of the Risk Management Committee were
held, and 12 meetings of the Group Governance Enhancement
Promotion Committee were held. The Corporate Culture Committee
conducted a Questionnaire Survey on Organizational Culture to
employees, including Group company employees, and reported theresults of the survey at a Board of Directors meeting.
These three committees have put in place a system to resolve
issues throughout the organization, such as by working together
according to their responsibilities, and compiling identified issues
under the supervision of the Executive Officer in charge oforganizational climate reform, which are then reported to the AEON
delight Board of Directors. In this way, these committees havestrengthened the Group’s structures, including Group governance.
In April 2022, we established the Sustainability Committee as acompany-wide promotion body for ESG management, in which weseek to resolve social issues through our business activities. The
Sustainability Committee is scheduled to meet twice a year to
make decisions on top-priority issues and initiatives based on the
Basic Sustainability Policy and Materiality (see page 25).

Implementation status of each committee meeting (FY2021)

Directors, Executive Officers

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

Audit

Approve

Supervise

No. of meetings held in FY2021: 16

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

■ Corporate Governance System (As of May 20, 2022)

Propose, Vote

Corporate Auditors andBoard of Auditors

Management Committee

AEON delight Corporate Governance Guidelines,Corporate Governance Report,System for Timely Disclosure▶ https://www.aeondelight.co.jp/english/ir/management/disclosure.html

Appointments and Removals

The Board of Directors plays the second most important role in
AEON delight's corporate governance system after the General
Meeting of Shareholders. The Board of Directors makes importantmanagement decisions and provides highly effective supervisionof Directors, Executive Officers, and other senior management. In
principle, Regular Board of Directors Meetings are held once amonth, and Extraordinary Board of Directors Meetings are held asnecessary.

Committee

Division,
Regional Office,Branch Office,
Area, Cite

Number of sessions

Committee Members

Nomination andCompensation
Advisory Committee

10

Masaaki Fujita, Independent Outside Director(Committee Chairman)
Kazumasa Hamada, President; Keiji Yoshikawa, Independent Outside Director;
Asako Takada, Independent Outside Director; Goro Miyamae, Director*1= Four-party coordination:

Evaluation
Advisory Committee

1

Auditors, Group Corporate
Audit Department,
Accounting Auditor, Outside
Directors

Yoshiaki Hompo, Independent Outside Director(Committee Chairman)
Kazumasa Hamada, President; Keiji Yoshikawa, Independent Outside Director;
Tsukasa Takahashi, Independent Outside Auditor

Special Committee*2

Yoshiaki Hompo(Committee Chairman), Masaaki Fujita, Keiji Yoshikawa, Asako Takada*3|

1

No. of meetings held in FY2021: 18*1 Mr. Yoshikawa and Mr. Miyamae were newly appointed as committee members from May 18, 2022
*3 All committee members consist of Independent Outside Directors*2 Established from May 2022

36

Corporate GovernanceCompliance■ Effectiveness assessment of theboard of directors■ Policy and process for determining remuneration, etc.

of directors and corporate auditors

Evaluation process
The Evaluation Advisory Committee, a voluntary advisory body to
the Board of Directors, administered a self-evaluation based on aquestionnaire* in February 2022, and analyzed and evaluated theresults. Based on the results of the analysis and evaluation by the
Evaluation Advisory Committee and an opinion from the Company’s
legal counsel, the Board of Directors assessed the effectiveness of
the Board of Directors at a meeting held on April 26, 2022.
* Self-evaluation based on a questionnaire: All directors and corporate auditors
responded to a questionnaire regarding the effectiveness of the Board of
Directors.

Remuneration for directors is determined by the Board of Directors within the rangeof the total amount of remuneration resolved at the Ordinary General Meeting of
Shareholders, based on recommendations from the Nomination and Compensation
Advisory Committee and other factors. In addition, the President, who is delegated by
the Board of Directors to determine the individual remuneration of each director,
prepares the amount of basic compensation for each director and an evaluation andallocation plan for performance-linked compensation based on the performance ofthe business for which each director is responsible, and makes decisions based on
the report of the Nomination and Compensation Advisory Committee and otherfactors. Remuneration for corporate auditors is determined through discussions
among the corporate auditors within the range of the total amount of remuneration
resolved at the Ordinary General Meeting of Shareholders. Remuneration for outside
directors and corporate auditors is limited to basic compensation that is not linked tobusiness performance due to the nature of their roles. Remuneration for internal
directors (directors who are not outside directors, hereinafter the same meaning)
consists of basic compensation, performance-linked compensation, and stock
options, as follows.

Basic compensation shall consist of a fixed monthly compensation paid within
the standard amount set for each position, which is determined based on
individual evaluations.

① Composition of the Board of Directors② Operation of the Board of Directors③ Agenda of the Board of Directors④ Structure to support the Board of Directors⑤ Roles and responsibilities of the Board of Directors⑥ Others

B Performance-linked compensation
Performance-linked compensation shall consist of the following Company andi n d i v i d u a l p e r f o r m a n c e - l i n k e d c o m p e n s a t i o n .T h e p e r c e n t a g e o f
performance-linked compensation shall be 100% of the base amount uponachievement of the target set at the beginning of the fiscal year, and shall vary
between 0% and 200% based on the Company's performance and eachindividual's evaluation during the fiscal year. Performance-linked compensation
shall be paid at a specified time each year.

Overview of evaluation resultsa Company performance-linked compensation
Company performance-linked compensation shall be determined based on
the Company's achievement rate in relation to the base amount for eachposition, taking into consideration the overall performance of the Company.

We evaluated that the effectiveness of decision-making andsupervision of business execution by the Board of Directors is being
maintained in line with the Company's basic approach to corporate
governance.
We evaluated that some improvements were made, including thefact that half of the Board of Directors consists of outside directors,
that the diversity of Board members has increased with theappointment of female directors, and that the agenda for Board
meetings is managed based on an annual plan and is organized inadvance of the meetings. On the other hand, there are clear areas
for improvement, including ongoing issues such as medium- tolong-term management strategies, discussion from the perspectiveof managerial supervision and reporting on the status of businessexecution, and succession planning.

C Stock options (non-monetary compensation)■ Director and corporate
auditor compensation, etc.

■ Target indicators and results related tob Individual performance-linked compensation
Individual performance-linked compensation shall be determined by acoefficient based on individual evaluations of departmental performance andachievement rates of management targets, in relation to the base amount foreach position.

Stock acquisition rights are allocated to directors as stock options, with the aimof increasing their motivation and ambition to continuously boost businessperformance and enhance corporate value by linking stock price and businessperformance with compensation and sharing with shareholders not only thebenefits of a rise in stock price but also the risks associated with a decline instock price. The number of stock acquisition rights to be granted shall be
determined by the Board of Directors based on the average stock price over acertain period of time and the performance of the relevant fiscal year against thebase amount for each position, following a recommendation by the Nomination
and Compensation Advisory Committee. Stock acquisition rights are granted at a
specified time in each fiscal year in accordance with the terms and conditions
stipulated in the Regulations for Director and Corporate Auditor Remuneration.

Code of Conduct

My Promises

1 I am always g ratef ul to the many other indiv iduals who
prov ide help and support,and I nev er forget to act withhumility.
1 I always act with integrity and sincerity in every situation.
1 I always work to improve myself so as to offer services thatexceed customer expectations.
1 I continually challenge myself, without hesitation, to help
AEON delight to create environmental values.
1 I always act as a good corporate citizen in serving local communities.
1 I always seek to improve and maintain a delightful workplace
and to respect my fellow employees.

1 I promise never to violate relevant laws and regulations.
1 I will comply with the quality manuals and never betray thecustomer's trust.
1 I w ill g ive safet y top pr ior it y and str ive to prevent any
accidents.
1 I will never fail to report, communicate, and consult withcustomers and my superiors on any relevant matters.
1 I will abide by contracts with customers.
1 I promise to do my utmost to prevent environmental pollution.

■ Compliance training
We conduct annual Code of Conduct and human rights training forexecutives and all employees of the company. We strive to ensure
thorough compliance through “Executive Compliance Training” forGroup company CEOs and executives, “AEON Code of Conduct
Senior Employee Training” for department and store managers,and “Aeon Code of Conduct General Employee Training” for general employees.

Number of Code of Conduct Training participants(Senior and General Employees) (Non-consolidated)

performance-linked compensation

AEON delight's Board of Directors, at its meeting held on February
26, 2021, approved a policy for determining the method of
calculating compensation, etc. for each individual Director.
The following two points are set forth as the basic principles of thecalculation method: (1) The compensation system should strongly
motivate Directors to implement AEON delight's management
philosophy, as well as to actively address environmental issues andmake social contributions, and to execute management strategies
that contribute to improving AEON delight's business performance;(2) The compensation system should be highly transparent and fair,and should be supported and understood by stakeholders.
The policy also stipulates that Corporate Auditor compensation
should be paid as prescribed, regardless of AEON delight's businessperformance.

As an indicator of overall profitability, the Company uses the level of achievement ofconsolidate d or dina r y income a s the ma in indicator for the payment of
performance-linked compensation and stock options, and considers the percentageof achievement of the budget for consolidated net income and consolidated
operating income, as well as the year-on-year change in each income item and thenature of the change. For the current fiscal year, the forecasted consolidated
operating income was ¥16.5 billion and the actual consolidated operating income was¥15.7 billion.

（people）
10,000

8,064

8,909

8,699

9,108

9,376

2018

2019

2020

2021 （FY）

5,000■ Reasons the Board of Directors has determined thatthe individual director remuneration for thisfiscal year is in line with the relevant policy.

0

Kazumasa Hamada, President, who was delegated this task by the Board of
Directors, has prepared an evaluation and allocation plan for performance-linked
compensation based on the amount of base compensation for each director and theperformance of the business for which each director is responsible, and based onrecommendations from the Nomination and Compensation Advisory Committee andother factors, we believe that the individual director compensation for the current
business year is in line with the relevant policy.

Executive compensation for FY2021

1

Outside Directors and Outside Corporate Auditors

54

54

15

5

|

1

9
|

Corporate Auditor (excluding Outside Corporate Auditors)

15

|

42

|

67

|

Directors (excluding Outside Directors)

Number of
eligible
directors

2|

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

* The total amount of non-monetary compensation to Directors (excluding Outside Directors) consisted of stock options totaling 15 million yen.

37

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

A Basic compensation

Evaluation items

Classification of Officers

Ensuring compliance through commitment
to the Delight Way

7

2017

■ Distribution of Delight Way cards
To spread the Delight Way and promote greater awareness of ourwhistle-blowing system, we produced Delight Way cards thatbriefly summarize what the philosophy entails, and distributed
these to all employees.
In addition to the Group’s most fundamental ideas, as encompassed in our Management Principle, Code of Conduct,and My
Promises, these compact letter-fold cards contain information on
how and where to make internal reports via the AEON delight Codeof Conduct 110 hotline. Employees are required to carry thesecards at all times and refer to the Delight Way when unsure how toproceed in their tasks.

I will consistently comply with rules and regulations.

■ Employee and business partner
reporting systems
We have established the AEON delight Code of Conduct 110
whistle-blowing hotline to handle consultations brought byemployees regarding issues that arise in their daily work.
Operation of the hotline has been entrusted to impartial legal
professionals, ensuring that employees can, regardless of personal
involvement, raise issues related to corporate ethics violations thatthey are unable to discuss with superiors.On April 1, 2021, we alsoestablished a “Business Partner Hotline” to ensure that transactions
are carried out fairly. In dealing with our Group companies, partners
can report by telephone, fax, or e-mail any legal violations, actions
that harm the rights of individuals or companies, or abuse of adominant position. Whistle-blower information is kept confidential
and will not adversely affect transactions.
In April 2022, we revised the AEON delight Group Regulations for
Handling Whistleblowing. In addition to specifying the provisions forinternal leniency*, we also specified internal and external contact
points for whistleblowing not only in Japan but also in China and
ASEAN countries.
Japan

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

China

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

AEON delight Code of Conduct 110 (external representative), Aeon Code of
Conduct 110 (two points of contact: internal representative and lawyer’s office).
*Supports Malay, Vietnamese, Khmer, and Indonesian languages* Internal Leniency: A system designed to promote whistleblowing. If an
employee voluntarily reports a violation of laws or company regulations, theemployee's liability within the company will be reduced or exempted.

AEON delight Code of Conduct 110
Business Partner Hotline

Number ofwhistle-blower
cases in FY2021

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

160 cases
38

Risk Management

Society

Implementation of risk management toaddress major risks
AEON delight Group views major risks as concerns that, once materialized, could have a very serious impact on AEON
delight and its stakeholders, not only by damaging AEON delight's business resources but also leading to a loss of
AEON delight's public credibility.
In light of this, we have established the AEON delight Group Risk Management Basic Regulations and have establisheda Risk Management Committee under the direct control of the Board of Directors in order to conduct risk management.
Furthermore, since FY2021, we have been enhancing the effectiveness of the Risk Management Committee by holding
theme-specific working-level meetings to reduce major risks and minimize losses if those risks were to materialize.

■ Basic Policy■ Risk Management System

AEON delight Group has adopted the following approach andmeasures to risk management.

AEON delight Group has established the following systems to
make necessary decisions and take actions against various
foreseeable risks in the course of its business activities.

● We manage various risks that may have a serious impact andcause losses in a centralized and continuous manner.
● We identify and analyze risks, specify major risks, consider risk

countermeasures (avoidance, mitigation, transfer, retention),and develop measures to reduce losses accompanying thematerialization of major risks. If a risk materializes, we takeappropriate and speedy action as an organization to minimize
damage to customers and other persons concerned, and torestore operations as quickly as possible.
● In the event of a disaster, we ensure the safety of our customers

and employees and work with the local community and ourbusiness partners to ensure business continuity and to fulfill oursocial mission.
● The entire AEON delight Group implements PDCA activities topromote risk management.

❶ For risk management under normal circumstances, thedepartment in charge of risk, which is designated by risk
category*, will manage risks to prevent the occurrence of risk
events and reduce losses.
* Established 83 risk items in 13 areas.

❷ The Risk Management Committee, with the Group ComplianceDepartment serving as its secretariat, shall oversee theevaluation and analysis of risks and proposed countermeasures
implemented by each department in charge of risk, examine risk
scenarios for each Group company, and periodically report theresults of these examinations to the Board of Directors. In theevent that a risk materializes and serious damage is anticipated,the executive officer in charge shall promptly report the risk to
the President & CEO, and the President & CEO shall promptly
report the risk to the Full-Time Auditor.
❸ In the event of a major crisis, a disaster response headquarters
headed by the President & CEO will be established to enable
more rapid decision-making and execution than under normal
circumstances. In addition, we will develop rules and manuals,
including basic rules for business continuity in times of crisis(Basic Rules for BCP), detailed rules for basic rules for BCP, anda handbook for disaster recovery response, and periodicallyrevise the rules and manuals, as well as systematically conductdisaster prevention drills.
❹ The department in charge of risk management shall prepare risk
scenarios for each of the business risks set by the Risk
Management Managers' Meeting, and the Group Corporate
Audit Department shall evaluate the effectiveness of risk
management through audits and other measures.

Risk Management Structure
Board of Directors

Reportaudit results

Risk Management Committee (Management Execution)
Report, evaluate,
and deliberate

Secretariat

Compliance( Group(
Department

Reportaudit results

Group
Corporate
Audit
Department

39

Domestic subsidiaries

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

■ Human Resource Development Policy❶ We will care for the safety and health of our employees and will
not neglect to invest in our human resources.
❷ We will respect the knowledge, skills, and experience of ouremployees as assets and continue to invest effectively in
education to enhance their value.
❸ We will suppor t our e mploye e s in the ir pr ofe s s iona ldevelopment and acquisition of qualifications so that they canwork with professionalism and pride in their respective fields.
❹ We will provide training programs linked to company policies tomotivate and inspire employees to contribute to management
and the improvement of business performance.

Overseas subsidiaries

Outline of Education and Training
Fiscal Year
Number of training courses
Total number of trainees
Training hours per person
Training cost per person (thousands of yen)

2019
237
10,025
20
75

2020
200
4,865
9
60

2021
425
11,840
21
82

Examples of Training Courses
Technical training● Basic facilities management training (AC, refrigeration, environmental sanitation)● Electric Works Specialist training for appointed and newly appointed personnel● Low-voltage, high-voltage, and special high-voltage electricity handling training

Qualification Training● Preparation training for 3rd-Class Electric Works Specialist exam

(theory/mechanical)■ Efforts to Improve Technical
Capabilities
There are several qualifications required to perform duties in facility
management. AEON delight Group has introduced a system to help
individual employees improve their skills and knowledge andacquire qualifications. For new graduates, we require them toacquire the qualification of a 2nd-Class Qualified Certified
Electrician at the time of their entry-level training. We also aim tohave them obtain the 3rd-Class Electric Works Specialist (Type1/2/3) or Building Sanitation Management Technician certification
within three years. Through these efforts, we are fostering a
corporate culture in which employees themselves are actively
learning and seeking to acquire various qualifications.
We have introduced the Engineer Study 2021 program, which
subsidizes the cost of attendance and purchase for correspondence
courses, e-learning courses, and textbooks for 16 eligible
certifications, as education for employees. In FY2021, we subsidized
3.59 million yen for 254 employees through this program. In addition,
we manage 206 types of qualifications held by our employees andprovide allowances to our employees for holding qualifications andappointments. In FY2021, we provided 63.17 million yen (basic
qualification allowance) as allowances for qualifications held.
AEON delight Group owns a training facility called AEON delight
Academy Nagahama, where we offer about 30 different practicaltraining programs. We offer training in preparation for 14 publiccertifications related to our business, with content tailored to eachtrainee's level of experience, such as management techniques forelectrical, AC, plumbing, and firefighting equipment, emergency
response methods, energy-saving proposal knowledge, andcleaning.

Audit

Risk Management Working-level Committee
Department in charge of risk

Human Resource Development

AEON delight
AcademyNagahama● Preparation for written and technical exams for 2nd-Class Qualified Certified

Electrician● Preparation training for certification exams(Building Sanitation Management Technician, 3rd-Class Refrigeration Equipment Supervisor)● Training to prepare for practical skills exam for Level 1 Building Cleaning

Skills Test

Management Training● Training for new Site Managers and Office Managers● Appointee training

Number of key qualified employees(as of February 28, 2022, non-consolidated)

Total number of qualified personnel for all managed licenses
Examplesofqualifications held

Building environment and sanitation management technician
Licensed electrical engineer (Type 1/2/3)
Qualified energy manager (heat, electricity)
Fluorocarbon refrigerant engineer (Type 1)
Eco-tuning engineer

20,153
1,363
949
201
531
160

■ DX Human Resource Development
AEON delight Group views digital transformation (DX) as a means torealize change, and in July 2022, began offering a DX education
program for approximately 500 full-time employees in their 20s, withthe aim of developing human resources who will lead the facility
management industry in the next generation.
This program is designed for employees under the age of 30 who
have been with the company for at least two years, and we provide
them with a curriculum where they learn the basics of DX throughe-learning and study to obtain the IT Passport certification. Those
who are not eligible can also view the e-learning videos, and we will
distribute textbooks to those who wish to take the certification examand subsidize the cost of the exam. In the future, we will continue toprovide education to those who have obtained the IT Passportcertification, and we aim to achieve the business model reform andprofitability improvement through DX promotion, which is set forth
as our goal in the medium-term management plan.
40

Society

Diversity

Respect for Human Rights

AEON delight Group has formed a diverse corporate culture through M&A in various countries and business fields since
its establishment.
Through this experience, we have come to realize that respecting the individuality of each employee and promoting the
success of diverse human resources is also the driving force behind our growth. We are promoting diversity by creating
an environment where diverse human resources can play an active role based on our Basic Sustainability Policy.

In accordance with our Basic Sustainability Policy and Aeon's Human Rights Policy, we adhere to the human rights
norms set forth in the International Labor Organization's (ILO) ILO Declaration on Fundamental Principles and Rights at
Work, and respect human rights by supporting and practicing the United Nations Guiding Principles on Business andHuman Rights.

The Company has stated in its Basic Policies for Sustainability(See P25) that it will "create a vibrant organizational culture inwhich diverse human resources can demonstrate their abilities”.
In addition, the Company and its group have grown throughmultiple mergers and consolidations since its establishment, andits employees and managers all come from a diverse range ofcompanies. For AEON delight (non-consolidated),the ratio of
mid- career hires in management positions is 47.1% ( 49employees; as of Fiscal 2021).
The Company has received the Eruboshi (level 3) certificationand the Leading Companies with Actively Participating Women in
Osaka City certification based on the Act on Promotion of
Women’s Participation and Advancement in the Workplace,and ismaking efforts to create an environment where women can
thrive, such as by dispatching employees to Aeon Group’s“Daimanzoku” College, an initiative to promote diversity, todevelop female management candidates.
The Company also strives to recruit the best possible personnel
regardless of nationality, country of origin, or gender. It hires

employees of various nationalities and countries of origin, mainly
from China and the ASEAN region where the Company has
business operations. Of the Company's (non-consolidated) new
graduate hires for fiscal 2022, university and postgraduate hires
consisted of 51.0% women and 17.7% non-Japanese.
We will continue to promote personnel utilization thatemphasizes skills and results regardless of nationality, country oforigin, gender, or employment category.

Action Plan based on the Act on the Promotion of Women's Active Engagement in Professional Life
1 Plan period

April 1, 2022 - March 31, 2024

2 AEON delight's❶ Not enough female full-time employees in order for more women to be promoted❷ Not enough female managers

challenges

Goal 1

Initiative ❶We were able to increase the number of full-time female employees by 1.7x over the last five years, from FY2017
to FY2021. Our goal is to continue this trend and increase the number of full-time female employees to 2.0x theFY2017 level by FY2023.

【 Aeon Human Rights Policy 】
In accordance with this policy, all of Aeon's executives and employees (Aeon People) will further their understanding of human rights andhelp realize a society that respects these rights.
We will adopt this policy for all Aeon People and share it with all business partners.

【 1. Our Approach to Human Rights 】
For everyone affected by our business activities, we will comply with domestic laws on human rights and labor, the International Bill of
Human Rights, and the rules on human rights set forth in the International Labour Organization's Declaration on Fundamental
Principles and Rights at Work in accordance with the Aeon Basic Principles, the Aeon Code of Conduct, and the United Nations Global
Compact, which we joined in 2004. Further, we will support and follow the United Nations Guiding Principles on Business and Human
Rights.

【 2. Respect for Human Rights in Business Activities 】
We will respect the privacy of Individuals as well as their diverse values and personalities and never discriminate against anyone for any
reasons, including discriminatory treatment based on race, nationality, ethnicity, gender, age, place of birth, religion, educational
background, physical or mental disability, sexual orientation, or gender identity. Further, we will remain mindful of the positions ofothers and respect them as our equals.
We will treat all customers in a fair and impartial manner and provide them with safe, reliable products and services as well as related
information.
We will actively communicate with local community members to ensure that we are respecting their human rights.

We will comply with sound corporate ethics and workplace environment-related laws, regulations, and international standards in ourbusiness activities by dealing with business partners fairly. Moreover, we will continually improve our performance in this regard.

We will listen to our coworkers, respect each coworker's human rights, and create workplace environments that are harassment free, safe,and employee friendly. At the same time, we will train and educate all Aeon People to further their knowledge and understanding of【 3. Implementation of Human Rights Due Diligence 】
Regarding the impact of our business activities on human rights, we will contribute to the realization of a society in which human rights
are respected through the implementation of human rights due diligence.
Revised October 2018

Promote recruitment of female full-time employees and curb retirements● We offer internship programs for regular recruits to provide female employees with an opportunity to become interested in AEON delight's

business.
● We inform employees through our website and other means of the extensive systems we have in place to achieve a better work-lifebalance, including childcare and nursing care leave systems that are more extensive than legally required. We are also working to increase
the number of employees using these systems.

Goal 2

3 Goals andInitiatives

Initiative ❶We were able to increase the number of female managers by 1.9x over the last five years, from FY2017 toFY2021. Our goal is to continue this trend and increase the number of female managers to 2.4x the FY2017 level
by FY2023.
Support career development to ensure continuity of employment● We promote interviews with supervisors to make personnel evaluations more satisfactory to employees and to motivate them to continue

working with us. (We confirm the effectiveness of the interviews based on statistical analysis of past survey data.)● We provide opportunities for female employees who are one rank belowmanagement to attend career advancement training for female

employees to motivate them to advance their careers and acquire management skills as leaders.
● We analyze quantitative and qualitative data obtained from the self-reporting system and use the data for employee career development.

Initiative ❷Promote a system to support the balancing of work and childcare/nursing care

● We work to create a comfortable work environment for employees of child-rearing age by establishing a telework system and reducing theburden of commuting for them.
● We work to create an easy-to-understand guidebook for employees who are considering taking childcare or nursing care leave to help
them understand the systems.
● We send out internal newsletters to employees on childcare or nursing care leave to keep them informed about the company on a regularbasis.

Initiative ❸Conduct training for managers to broaden their understanding of diversity management● We work to spread understanding of diversity management by conducting Code of Conduct training for managers on a regular basis.

41■ Raising employee awareness■ Reforming our organizational culture.

AEON delight conducts human rights training and awarenessprograms for its directors and all employees to disseminate its
human rights policy widely in the workplace and to put respectfor human rights into practice in business operations. In
FY2021, we conducted compliance training for a total of 9,376
employees, including preventionof human rights violations, at alllevels of management and genera l e m p loye e s . In F Y2 02 2 , wedistributed the Human Rights
Awareness Guidebook preparedby the Aeon Group to all employees, and also established ahuman rights awareness training
program for 8,494 employees,
which was conducted separatelyfrom the compliance training.

We believe that reforming our organizational culture is essential
to achieving the AEON Delight Vision 2025 and maximizing ourenterprise value through this vision. Based on the recognition
that a good organizational culture is a powerful driver for implementing measures to achieve these goals and transforming thecompany, we established a new Corporate Culture Committee
in FY2021 and launched a variety of initiatives. In addition to ourannual Morale Survey (employee awareness survey), we conducted a questionnaire survey on organizational culture in
October 2021. We sent the questionnaire to 6,215 employees of
8 AD Group companies in Japan who were eligible for the
web-based survey, and 4,896 responded (78.8% response rate).
The questions surveyed the current status of the company as
perceived by employees in terms of Delight Way as well as challenge and creation, in addition to job satisfaction at AEON
delight.
Based on the survey results, we will conduct further interviews
to identify the true issues. At the same time, we will review ourpersonnel evaluation, commendation, internal qualification, andcompensation systems, as well as endeavor to promote theDelight Way through employee education.
42

Society

Promotion of Employee HealthSupply Chain Management

AEON delight Group is committed to maintaining and improving the health of its employees in accordance with the Aeon
Commitment to Health & Productivity Management. We will promote the health and productivity of our employees
through "promotion of mental and physical health" and "creation of a safe, secure, and energetic workplace.”

AEON delight Group's Basic Sustainability Policy stipulates that we will "build relationships of mutual trust with ourbusiness partners and conduct fair business activities throughout the supply chain.” We consider our business partners
as our partners in realizing the Aeon Delight Vision 2025, and we will strive to provide higher value together with them.

Aeon's belief is that human resources are our greatest
management resource for realizing the health and happiness of
employees and customer s and for contributing to local
communities. Based on this belief, Aeon aims to be a corporate
Group whose diverse workforce is healthy, able to demonstrate
their abilities, and continues to play an active role. The
management issue we want to solve through health andproductivity management is to ensure that each employee ishealthy both physically and mentally, that they want to continue
working for a long time, and that they are motivated to work.
The health of employees is the cornerstone of company
activities. Based on the belief that only when employees are
he a lthy c a n we p r ov i de s e r v ic e s th at b r ing he a lth a n dhappiness to local customers, Aeon announced the Aeon
Commitment to Health & Productivity Management in 2016 andhave beenpromoting health and productivity management.
In accordance with this philosophy and policy, AEON delight's
Basic Sustainability Policy, which was established in August 2021,
states that we will “strive to create a safe, secure, hygienic, andhealthy environment in and around our facilities” and “respect thehuman rights of each individual and create a vibrant organizational
culture in which diverse human resources can demonstrate theirabilities.”
We will continue to promote health throughout the company bypromoting mental and physical health through improvement of theimplementation rate of regular health checkups and specific healthguidance, and by creating a safe, secure, and energetic workplacethrough optimization of working hours and support for smoking
cessation.

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

Purpose of health promotion

Ultimate goals of health management

AEON delight's management philosophy is "We pursue thecreation of “environmental value" for the customers and for the
local communities," and we strive to be a company that continues
to protect the places that are important to people. To realize thisobjective, it is important to have a healthy and diverse workforce
and to allow each individual to continue to fully demonstrate hisor her abilities.
To this end, we must become a company in which each andever y employee is healthy, both mentally and physically,
motivated, and able to play an active role for a long time. Employee
health is the cornerstone of company activities. We believe that
only when employees are healthy can we continue to protect theusage environment of facilities, which are important places forpeople.

Increase employee satisfaction / Reduce turnover / Increase labor productivity

Promotion policy
1 Mental and physical health (periodic health checkups, specific healthguidance)

2 Creation of a safe, secure, and energetic workplace (optimal working

hours, support for smoking cessation)

3 Company-wide health promotion■ Our approach tosupply chain management■ Questionnaires to partner companies

When selecting and registering partner companies, AEON delight
Group checks and monitors their quality management andbusiness implementation systems, and their understanding ofand compliance with the Delight Way (Management Philosophy,
Code of Conduct, and My Promise), which is our basic philosophy.
In FY2021, we conducted quality control checks at 158 companies,
and we will also check their education system for legal education,
training, and compliance in the future.
In addition, we have positioned companies that haveparticularly high levels of expertise and quality in products andservices, that handle many of ouroperations, and that support
our growth policies and measures as key partner companies.

■ Communication withpartner companies
As a measure to improve quality, we conduct training sessions
related to the services provided. In the areas of security andcleaning services, which are the two areas of our business where
we outsource most of our services to partner companies, we
conduct training sessions for all partner companies with whom
we have continued contracts. In the first half of FY2021, we did
not hold training sessions in consideration of the spread of
COVID-19, but in the second half of the fiscal year, we held training
sessions at eight locations nationwide for partner companies thatprovide cleaning and security services, as in previous years, and238 companies participated in the sessions. The training sessions
were based on recent case studies and topics that were covered
included accident prevention, maintenance and improvement ofwork quality, and business manners.
AEON delight Group also holds technical contests, in which
partner companies are invited to participate as team members, inorder to promote collaborative efforts.

We conduct questionnaires for business partners to foster
mutual trust and promote continuous development through fairtransactions with partner companies.
In FY2021, we conducted a web-based survey of 2,957 partnercompanies of eight Group companies. After reporting the resultsof the survey to the Board of Directors, we identified priority issues
that need to be addressed and have implemented measures toresolve these issues. We also provide feedback to the partnercompanies that responded to the survey, and ask for their cooperation in responding to future surveys.

■ Declaration of Partnership Building
In March 2022, we announced our endorsement of the Declarationof Partnership Building*. AEON delight views this declaration as ameans of coexistence and co-prosperity with our partner companies through sustainable relationship building, as well as a way to
add value and promote fair business practices throughout the
supply chain. The Declaration sets forth the use of DX to improve
operational efficiency and contribute to the realization of a sustainable society, as well as compliance with laws and regulations,fair trade, thorough compliance, and respect for human rights inaccordance with our Basic Sustainability Policy.
* Established by the Council for the Promotion of Partnership Building for the
Future, whose members include the Chairman of Keidanren, the President of
the Japan Chamber of Commerce and Industry, the President of RENGO, andrelevant ministers. In order to build a sustainable relationship where large andsmall companies can grow together, company representatives havedeclaredcoexistence and co-prosperity throughout the supply chain, newpartnerships that transcend size and affiliation, and adherence to desirable
business practices between parent companies and subcontractors.

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

【 Declaration of Partnership Building 】(Excerpt)

Promotion goals
AEON Health Insurance Association

Head of Health Promotion
Executive Officer, Group Personnel, General Affairs and IT Division Manager

Collaborate

AEON delight Health and Safety Committee

Head of Health Promotion
Personnel Department and Personnel Planning Team

Regional Office Management Department / Personnel Department

43

Along with supply chain initiatives, we will contribute to the realization of a sustainable society by promoting efforts to combat climatechange and global warming and reduce our environmental footprint.
In accordance with the Basic Sustainability Policy, we will strive to comply with laws and regulations, conduct fair business, ensurecompliance, and respect human rights throughout our supply chain based on a relationship of mutual trust.

AEON delight labor union

Labor UnionWEB

We aim for coexistence and co-prosperity by establishing a new mechanism for value-added improvement, in addition to leveraging DX
to share and visualize information throughout the supply chain and improve operational efficiency.

Industrial physicians
Promoting Employee Health▶ https://www.aeondelight.co.jp/english/csr/social/employee_health/WEB

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

44Six-Year Summary

6 year Financial and non-financial summary
2016
Consolidated financial Indicators

2017

2018

2019

2020

2021

Unit

Net sales

Million yen

292,607292,396

302,915

308,582

300,085

317,657

Operating income

Million yen

14,13912,90913,03016,001

15,23015,733

Ordinary income

Million yen

14,263

13,381

13,362

15,94915,26815,789Net income attributable toparent company shareholders

Million yen

7,093

6,397

6,415

9,348

11,680

10,665Comprehensive income

Million yen

7,862

7,707

6,007

9,039

12,32911,529Net assets

Million yen

84,604

89,14375,53981,28688,281

95,421

Total assets

Million yen

137,870

144,678

134,071

136,917

136,565

142,859

Net assets per share

Yen

1,558.51

1,636.89

1,465.94

1,578.77

1,746.88

1,890.76

Net income per shareYen

134.99121.68122.92

187.21233.69213.26

Diluted net income per shareYen

134.62

121.34122.61186.94233.47213.12Equity ratio

%

59.4

59.5

54.6

57.6

64.0

66.2

Return on equity (ROE)

%

8.9

7.6

8.1

12.3

14.1

11.7

times

25.7

30.9

33.7

17.6

13.6

14.0

Cash flows from operating activities

Million yen

11,703

13,56812,373

7,371

10,403

12,598Cash flows from investing activities

Million yen

2,233(2,666)

12,256

13,838(7,325)(386)

Cash flows from financing activities

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

Cash and cash equivalents at end of year

Million yen

31,00438,72243,437

61,15158,93767,520

t-CO2

-

-

-

-

-

1,463

t

14,831

12,328

16,62915,942

20,474

19,697

Consolidated total number of employees

person12,55813,43020,87722,062

20,117

20,200

Number of employees

person

4,004

4,034

4,050

4,074

4,118

4,174

Number of female employees

person

298

322

348

381

427

467

Number of managers

person

616

622

618

607

662

609

Number of female managers

person

8

9

8

7

15

16

Annual paid leave acquisition rate

%

50.2

51.3

54.1

64.7

63.5

64.9

Paternal leave acquisition rate

%

0.0

12.5

18.2

6.4

3.1

7.2

Maternal leave acquisition rate

%

100.0

87.5

81.8

100.0

100.0

100.0

Employment rate of persons with disabilities

%

1.45

1.75

2.11

2.25

2.12

2.13

Occupational accident frequency rate

%

-

4.60

4.59

1.77

2.50

3.80

Number of Directors

person

13

13

11

6

6

8

Number of outside directors

person

2

3

3

3

3

4

Price/earnings ratio

Non-financial indicators
Greenhouse gas emissions(Scope1,2)Industrial waste emissions*Non-financial indicators other than the consolidated number of employees are shown on a non-consolidated basis.

45

WEB

Financial Data and Results ▶ https://www.aeondelight.co.jp/english/ir/financial/
ESG Data ▶ https://www.aeondelight.co.jp/english/csr/esg_data/46

Corporate Profile / Stock Information■ Corporate profile■ Stock information

Company Name ● AEON DELIGHT CO., LTD.

Capital

Total number of issued shares ● 54,169,633

Stock code

●

9787

FoundedDescription of Business ● Facility Management

Total number of shareholders●

29,490Fiscal year end●

End of February

Number of Employees

Stock exchange●Tokyo Stock Exchange, Prime Market●

November 16, 1972●●

3,238 million JPY
4,174 Group total: 20,200■ Offices (As of April 1,2022)■ Major shareholders

Headquarters

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

Osaka Office

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

AEON CO., LTD.

27,613

55.20

AEON Tower Makuhari Office

11F AEON Tower, 1-5-1 Nakase, Mihama-ku, Chiba City, Chiba 261-8515

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

3,439

6.88

Hokkaido Regional Office

3F SDC Kita 12-Jyo Building, 23-2-5 Kita 12-Jyo Nishi, Chuo-ku, Sapporo City,
Hokkaido 060-0012● Offices: Sapporo Office 1 / Sapporo Office 2 / Hokkaido Higashi Office

AEON delight Business Partner Stock Ownership Association

1,187

2.37

SSBTC CLIENT OMNIBUS ACCOUNT

914

1.83

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

711

1.42

Custody Bank of Japan, Ltd. (Trust account)

696

1.39

THE BANK OF NEW YORK MELLON 140044

526

1.05

AEON delight Employee Stockholding Association

507

1.01

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

389

0.78

Custody Bank of Japan, Ltd. (Trust account 4)

367

0.73

Tohoku Regional Office
Kanto Regional Office

Hokuriku-shinetsu Regional Office

3F Azeria Hills, 3-4-1 Tsutsujigaoka, Miyagino-ku, Sendai City, Miyagi 983-0852● Offices: Tohoku Kita Office / Miyagi Office / Minami Tohoku OfficeTeito Kanda Building, 1-1-1 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054● Offices: Yokohama Office / Yokohama Chuo Office / Sagami Office / Tokyo Higashi Office /Tokyo Chuo Office / Tokyo Nishi Office / Chiba Higashi Office / Chiba Chuo Office /Chiba Nishi Office / Saitama Higashi Office / Saitama Nishi Office / Kita Kanto Office
7F Plaka 2, 1-2 Sasaguchi, Chuo-ku, Niigata City, Niigata 950-0911● Offices: Niigata Office / Shinshu Office / Hokuriku Office

Tokai Regional Office

3F Aisan Building, 5-25-1 Meieki, Nakamura-ku, Nagoya City, Aichi 450-0002● Offices: Aichi and Gifu Office / Mie Office / Shizuoka OfficeKansai Regional Office

Minamisenba Heart Building, 2-3-2 Minamisenba, Chuo-ku, Osaka City, Osaka 542-0081● Offices: Osaka Office / Hannna Office / Hanwa Office / Keiji Office/ Hyogo Office

Chugoku and Shikoku Regional Office

3F Hiroshima Danbara Shopping Center, 1-3-52, Danbaraminami, Minami-ku, Hiroshima City,
Hiroshima 732-0814● Offices: Hiroshima Office / Okayama Office / Shikoku Office

Kyushu Regional Office

3F Hakata Kuramoto Ota Building, 2-1 Narayamachi, Hakata-ku, Fukuoka City,
Fukuoka 812-0023● Offices: Fukuoka Office / Kyushu Kita Office / Kyushu Naka Office /Minami Kyushu Office / Okinawa Office■ Major consolidated subsidiaries
Japan● AEON DELIGHT ACADEMY CO., LTD.

● AEON DELIGHT CONNECT CO.,LTD.

● AEON DELIGHT SECURITY CO., LTD.

● Aqutia Co.,Ltd.

● Kankyouseibi Co., Ltd.

● AEON COMPASS CO., LTD.

● Hakuseisha CO., LTD.

Shareholders

No of shares held(thousands)% of issued shares* Aside from the number of shares listed above, the Company holds 4,148 thousands treasury shares (7.66% of shares held relative to the total number of shares issued).
* The ratio of stock holding is the ratio relative to the total number of shares issued (excluding the treasury stock).
* Percentages have been rounded off to three decimal place.

■ Shares by type■ Shareholders by type

Treasury
stock
7.67%

Financial
institutions
11.21%

Individuals
and others
12.32%

Securities
firms
1.15%

Foreigninstitutions
andindividuals
14.67%

Total numberof shares

54,169 thousands

Other
Japanese
corporations
366

Securities
firms
24
Financial
institutions
19
Treasurystock
1

Total numberof shareholders

Foreigninstitutions
andindividuals
269

29,490
Other Japanese
corporations
52.98%

Individuals
and others
28,811

Overseas● AEON DELIGHT (CHINA) CO., LTD. [China]● Zhejiang Metelan Property Management Co., Ltd. [China]● Aeon Delight (Jiangsu) Comprehensive Facility Management● AEON DELIGHT(MALAYSIA)SDN. BHD. [Malaysia]

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

Service Co., Ltd. [China]● AEON DELIGHT(VIETNAM)CO., LTD [Vietnam]● PT Sinar Jernih Sarana [Indonesia]*[ ] indicates country● AEON DELIGHT (SHANGHAI) COMPREHENSIVE FACILITYMANAGEMENT SERVICE CO., LTD. [China]

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

48