Translation: Please note that the following purports to be an accuratelytranslated excerpt of the original Japanese version prepared for theconvenience of investors outside Japan. However, in the case of any
discrepancy between the translation and the Japanese original, the lattershall prevail.

Stock Exchange Code: 8252
May 29, 2019
3-2, Nakano 4-chome, Nakano-ku, TokyoMARUI GROUP CO., LTD.
Hiroshi Aoi
President and Representative Director

Notice of Convocation of the 83rd Ordinary General Meeting of Shareholders
Dear Shareholders:
You are cordially invited to attend the 83rd Ordinary General Meeting of Shareholders of MARUI GROUP
CO., LTD. (the “Company”).
If you are unable to attend the aforesaid meeting, you can exercise your votes through either of themethods stated below. The Company respectfully requests you to view the “Reference Document
Concerning the General Meeting of Shareholders” below and exercise your voting rights on or before
7:00 p.m. (JST) June 19, 2019 (Wednesday).

GUIDANCE ON THE WAY TO EXERCISE THE VOTING RIGHTS:[For those attending the General Meeting of Shareholders]
Please submit the Voting Rights Exercise Form enclosed herewith to the reception at the venue of themeeting. Furthermore, please be advised that persons other than the shareholders such as proxy who is
not a shareholder and persons accompanying you shall not be able to enter the place of meeting.
[For those exercising voting rights by mail]Please indicate on the Voting Rights Exercise Form enclosed herewith your consent or dissent to the
proposals on the agenda, and return the form to the Company by mail on or before the deadline statedabove.
[For those exercising voting rights via the Internet]
Please scan the QR code printed on the enclosed Voting Rights Exercise Form or access the website forthe exercise of voting rights (https://evote.tr.mufg.jp/), and indicate whether you approve or disapprove
the items on the agenda by following the instructions on the screen by the deadline stated above.

(English Translation)―1―

With respect to exercising voting rights via the Internet, the Company takes liberty to ask shareholders
to confirm the Guidelines for the Exercise of Voting Rights via the Internet. (Note: This paragraphintentionally omitted as the Internet voting service is only available in Japan in the Japanese language.)(English Translation)―2―

PARTICULARS

1. Date and Time of the Meeting:Thursday, June 20, 2019 at 10:00 a.m.
(Reception commences at 9:00 a.m.)

2. Place of the Meeting: 3rd Floor of the Head Office of MARUI GROUP CO., LTD.
at 3-2, Nakano 4-chome, Nakano-ku, Tokyo, Japan
3. Matters to be Addressed at the Meeting:
Matters to be Reported:
1. Report on the Business Report, the Consolidated Financial Statements andthe Non-Consolidated Financial Statements for the 83rd Fiscal Year (from
April 1, 2018 to March 31, 2019).
2. Report on the Results of the Audits of Consolidated Financial Statements by
the Accounting Auditor and the Audit & Supervisory Board.
Matters to be Resolved:
Proposal 1: Proposed Disposal of Surplus
Proposal 2: Election of Eight (8) Directors
Proposal 3: Election of One (1) Audit & Supervisory Board Member
Proposal 4: Election of One (1) Substitute Audit & Supervisory Board Member
Proposal 5: Revision of Performance-Linked Stock Compensation Plan for Directors
Proposal 6: Election of Accounting Auditor
Guidance for Exercising Voting Rights:(1) In the event that a shareholder exercises voting rights both via return mail (Voting Rights
Exercise Form) and the Internet, the Company will consider the exercise of voting rights
via the Internet to be valid.
(2) In the event that a shareholder exercises voting rights via the Internet more than once, theCompany will consider the last exercise of voting rights to be valid.
- End -(English Translation)―3―

・ If there is any amendment to the contents of the Reference Document Concerning the General Meetingof Shareholders, the Business Report, the Non-Consolidated Financial Statements, the Consolidated
Financial Statements, the Company will announce such amendment on the Company’s homepage(http://www.0101maruigroup.co.jp/).

(English Translation)―4―

A message to all of our shareholders
Hiroshi Aoi
President and Representative
Director, Group Representative
Executive Officer, and CEO
Let me begin by expressing my sincere appreciation for your ongoing patronage and support of the
MARUI GROUP.
Since its founding in 1931, the Group has continued to evolve its unique business model merging retailingand finance to reflect changes in the times and consumers, all the while being guided by the co-creation
philosophy that “creditability should be built together with customers.”
Our corporate philosophy is to “continue evolving to better aid our customers” and we “equate thedevelopment of our people with the development of our company.” Based on this philosophy, we practice“Co-creation Sustainability Management” to co-create “happiness” of all of our stakeholders.
The Group’ “Co-creation Sustainability Management“ aims to achieve harmony between, and expand“happiness” of, the six rings of stakeholders including customers, investors, business partners,
communities and society, employees and future generations to build a sustainable society and global
environment though our businesses.
The MARUI GROUP will engage in communication with shareholders while aiming to build aflourishing and inclusive society that offers happiness to everyone. We sincerely ask for continued
support and encouragement from our shareholders.
May 2019(English Translation)―5―

Reference Document Concerning the General Meeting of Shareholders
Proposals and Reference Materials
Proposal 1:

Proposed Disposal of Surplus

The Company considers that returning the profit to the shareholders is one of the important management
priorities. The Company will endeavor to continuously increase the level of dividends according to long term
growth in EPS (Earnings per share) to realize high growth coupled with high returns. The Company will
gradually raise its target for the consolidated payout ratio from 40% with the aim for a consolidated payout
ratio of approximately 55% by the fiscal year ending March 31, 2024 and implement ongoing, long-term
dividend increases.
Based on the above basic policy, it is proposed that the year-end dividends for the fiscal year under review
be 26 yen per share. Together with the interim dividends of 23 yen per share which have been paid, the annual
payment of dividends for the fiscal year under review shall be 49 yen per share, an increase of 11 yen per
share compared with the previous fiscal year, which is the increase in dividends for seven (7) consecutive
fiscal years.
Matters related to the year-end dividend:(1) Type of assets distributed: Cash
(2) Matter related to distribution of cash and total amount:
26 yen per share of common stock of the Company
Total amount: 5,666,646,700 yen(3) Effective date for distribution of surplus: June 21, 2019(English Translation)―6―

Proposal 2:

Election of Eight (8) Directors

The term of office of all of the seven (7) Directors will resign from his office expire at the close of this
General Meeting.
Director, Mr. Tomoo Ishii will resign from his office at the close of this General Meeting.
In order to further strengthen the management structure, the Company would like to propose to elect Eight(8) Directors, including two (2) new candidates for Directors.
The candidates for Directors are as follows:
Candidate
Number1

2

3

4

Attendance toPositions and Responsibilities the Meetings ofthe Board of
at the Company

Name

Directors

Hiroshi Aoi【Reappointment】【Reappointment】【Candidate for External Director】【Candidate for Independent Director】【Reappointment】
Yoshitaka Taguchi 【Candidate for External Director】【Candidate for Independent Director】【Reappointment】
Masahiro Muroi 【Candidate for External Director】【Candidate for Independent Director】
Etsuko Okajima

President and Representative
Director, Group
Representative Executive
Officer, and CEO

10/10
100%

External Director

9/10
90%

External Director

*8/8
100%

External Director

10/10
100%

Director and Senior Managing
Executive Officer
Responsible for FinTech
10/10
Business5
Masao Nakamura 【Reappointment】
In charge of Corporate
100%
Planning, Real EstateBusiness and Customer
Success
Director and Managing
Executive Officer, CFO
General Manager, IR
10/10
Division
6
Hirotsugu Kato 【Reappointment】
In charge of Finance,
100%
Investment Research,
Sustainability and ESG
Promotion
Senior Executive Officer
7
Masahisa Aoki 【New appointment】
In charge of Anime Business
Executive Officer
General Manager, Group
8
Yuko Ito【New appointment】
Design Center andArchitecture Division*Attendance to the Meetings of the Board of Directors for Mr. Yoshitaka Taguchi indicates the status after his assumption of
office as Director on June 25, 2018.

(English Translation)

―7―

Name
(Date of Birth)(Brief History, Positions, Responsibilities, and Important
Positions at Other Organizations Concurrently Assumed, If Any)
Jul. 1986
Apr. 1991
Apr. 1995
Jan. 2001
Jun. 2004

Hiroshi Aoi(January 17, 1961)【Reappointment】

1

Attendance to the▸
Meetings of the Board of
Directors: 10 out of 10(100%)

Apr. 2005
Oct. 2006
Apr. 2019

Joined the Company
Director, and General Manager, Sales Planning
Headquarters
Managing Director, Deputy General Manager,
Sales Promotion Headquarters, and General
Manager, Sales Planning Division
Managing Director, and General Manager, Sales
Promotion Headquarters
Executive Vice President and Representative
Director
President and Representative Director
President and Representative Director, and Group
Representative Executive Officer
President and Representative Director, Group
Representative Executive Officer and CEO(Incumbent)

Reasons for nomination as a candidate for Director
Mr. Hiroshi Aoi has properly operated the Board of Directors as
the chairman and duly performed his supervisory functions forimportant management decision making and operational
execution as President and Representative Director of theCompany since 2005. He has ample business experience andknowledge as a corporate manager, and has controlled overall
operation of the Group and performed his duties properly asGroup Representative Executive Officer. Based on the above
reasons, the Company believes that he can fully perform his
functions for long- and medium-term improvement in corporate
value of the Company. Therefore, the Company has nominatedhim as a candidate for a Director.

Note: There is no special interest between the candidate and the Company.

(English Translation)―8―

Number of
Shares Held

1,538,300

2

Name(Date of Birth)(Brief History, Positions, Responsibilities, and Important
Positions at Other Organizations Concurrently Assumed, If Any)

Etsuko Okajima(May 16, 1966)

Apr. 1989
Jan. 2001
Jul. 2005

Joined Mitsubishi Corporation
Joined McKinsey & Company
Representative and CEO, GLOBIS Management
Bank
Representative and CEO, ProNova Inc.
(Incumbent)
External Director, the Company (Incumbent)
External Director, Link and Motivation Inc.
(Incumbent)
Outside Director, euglena Co., Ltd. (Incumbent)【Reappointment】【Candidate for External
Director】【Candidate for
Independent Director】

Jun. 2007▸ Term of office from theappointment as Directorof the Company to theclose of this Ordinary
General Meeting of
Shareholders: 5 years▸ Attendance to the
Meetings of the Board of
Directors: 9 out of 10(90%)

Reasons for nomination as a candidate for External Director

Jun. 2014
Mar. 2016
Dec. 2018

Number of
Shares Held0

Ms. Etsuko Okajima has experience and extensive knowledge ofcorporate management and is well versed in diversity. She has
currently performed her duties as External Director of theCompany properly from an independent, objective position. As
the Company believes that she can continue to contribute to thereinforcement of supervisory function for management of theCompany, the Company has nominated her as a candidate for anExternal Director.

Notes: 1. There is no special interest between the candidate and the Company.
2. Ms. Etsuko Okajima is candidate for External Directors and the Company has submitted a notification designating
her as an independent director to Tokyo Stock Exchange, Inc.
3. Ms. Etsuko Okajima’s name on the family register is Ms. Etsuko Mino.
4. The Company has entered into a liability limiting agreement with Ms. Etsuko Okajima under which her liability
shall be limited to the higher of a predetermined amount of 10 million yen or the amount set by the laws andregulations. In the event that Ms. Etsuko Okajima is elected as External Director, the Company plans to continue
the liability limiting agreement with her.

(English Translation)

―9―

Name
(Date of Birth)(Brief History, Positions, Responsibilities, and Important
Positions at Other Organizations Concurrently Assumed, If Any)
Mar. 1985
Jul. 1989

Yoshitaka Taguchi(April 20, 1961)【Reappointment】【Candidate for External
Director】【Candidate for
Independent Director】

3▸ Term of office from theappointment as Directorof the Company to theclose of this Ordinary
General Meeting of
Shareholders: 1 year
▸ Attendance to the
Meetings of the Board of
Directors: 8 out of 8
(100%)

Jul. 1991
Jun. 1996
Oct. 1998
Jun. 2003
Jun. 2018

Joined Seino Transportation Co., Ltd. (current
Seino Holdings Co., Ltd.)
Director, Seino Transportation Co., Ltd. (current
Seino Holdings Co., Ltd.)Managing Director, Seino Transportation Co.,
Ltd. (current Seino Holdings Co., Ltd.)
Senior Managing Director, Seino Transportation
Co., Ltd. (current Seino Holdings Co., Ltd.)
Representative Director and Vice President,
Seino Transportation Co., Ltd. (current Seino
Holdings Co., Ltd.)
President and Chief Operating Officer, Seino
Transportation Co., Ltd. (current Seino Holdings
Co., Ltd.) (Incumbent)
External Director, the Company (Incumbent)

Number of
Shares Held400

Reasons for nomination as a candidate for External Director

Mr. Yoshitaka Taguchi has ample experience and extensive
knowledge with many years of active participation in corporate
management. As the Company believes that he can continue tocontribute to the reinforcement of supervisory function for
management of the Company from an independent and objective
position as External Director of the Company, the Company has
nominated him as a candidate for an External Director.
Notes: 1. Mr. Yoshitaka Taguchi is candidate for External Directors and the Company has submitted a notification
designating him as an independent director to Tokyo Stock Exchange, Inc.
2. Mr. Yoshitaka Taguchi concurrently serves as Representative Director of Seino Holdings Co., Ltd. A subsidiary of
the Company recorded 24 million yen of commission fee for instore delivery services, etc., received from two
subsidiaries of the said company (Seino Transportation Co., Ltd. and another company) for the most recent fiscal
year. The amount accounted for 0.01% of the total consolidated operating revenue of the Company, and therefore
he satisfies the “Criteria for Independence for External Directors and Audit & Supervisory Board Members” of theCompany. For the “Criteria for Independence for External Directors and Audit & Supervisory Board Members” of
the Company, please see “Criteria for Independence for External Directors and Audit & Supervisory Board
Members” set forth as follows hereafter.
3. The Company has entered into a liability limiting agreement with Mr. Yoshitaka Taguchi under which his liability
shall be limited to the higher of a predetermined amount of 10 million yen or the amount set by the laws andregulations. In the event that Mr. Yoshitaka Taguchi is elected as External Director, the Company plans to continue
the liability limiting agreement with him.

(English Translation)― 10 ―

Name(Date of Birth)(Brief History, Positions, Responsibilities, and Important
Positions at Other Organizations Concurrently Assumed, If Any)
Apr. 1978

Masahiro Muroi(July 13, 1955)【Reappointment】【Candidate for External
Director】【Candidate for
Independent Director】

4▸ Term of office from theappointment as Directorof the Company to theclose of this Ordinary
General Meeting of
Shareholders: 2 years▸ Attendance to the
Meetings of the Board of
Directors: 10 out of 10(100%)

Joined Nomura Computer System Co., Ltd.
(current Nomura Research Institute, Ltd.)
Jun. 2000
Member of the Board, Nomura ResearchInstitute, Ltd.
Apr. 2009
Representative and Senior Executive Managing
Director, Member of the Board, Nomura
Research Institute, Ltd.
Apr. 2013
Representative and Vice President, Member ofthe Board, Nomura Research Institute, Ltd.
Apr. 2015
Vice chairman, Member of the Board, Nomura
Research Institute, Ltd.
Jun. 2016
External Director, Ryoden Corporation(Incumbent)
Jun. 2017
External Director, the Company (Incumbent)
Jun. 2018
Audit & Supervisory Board Member, The
Norinchukin Bank (Incumbent)
Reasons for nomination as a candidate for External Director

Number of
Shares Held0

Mr. Masahiro Muroi has experience in taking the initiative incorporate governance reforms as a corporate manager and deep
knowledge of leading-edge technology and the digital field. As
the Company believes that he can contribute to the reinforcementof supervisory function for management of the Company whendeveloping a growth strategy by digital innovation which theCompany will promote, the Company has nominated him as a
candidate for an External Director.
Notes: 1. There is no special interest between the candidate and the Company.
2. Mr. Masahiro Muroi is candidate for External Directors and the Company has submitted a notification designating
her as an independent director to Tokyo Stock Exchange, Inc.
3. The Company has entered into a liability limiting agreement with Mr. Masahiro Muroi under which his liability
shall be limited to the higher of a predetermined amount of 10 million yen or the amount set by the laws andregulations. In the event that Mr. Masahiro Muroi is elected as External Director, the Company plans to continue
the liability limiting agreement with him.

(English Translation)― 11 ―

Name(Date of Birth)(Brief History, Positions, Responsibilities, and Important
Positions at Other Organizations Concurrently Assumed, If Any)
Apr. 1983
May 2003

Masao Nakamura(June 11, 1960)【Reappointment】

5▸
Attendance to the
Meetings of the Board of
Directors: 10 out of 10(100%)

Joined the Company
General Manager, Store Planning Division, Sales
Promotion Headquarters
Apr. 2007
Executive Officer, and General Manager, Group
Business Promotion DivisionJun. 2008
Director and Executive Officer, and General
Manager, Corporate Planning Division andBusiness Development Division
Apr. 2011
Managing Director and Managing Executive
OfficerPresident and Representative Director, MARUICo., Ltd.
Apr. 2015
Director and Managing Executive Officer
Responsible for Retailing and Store Operations
Business
May 2016
Director and Managing Executive Officer, theCompany
Responsible for Retailing Business
Oct. 2017
Director and Managing Executive Officer
Responsible for FinTech Business
Apr. 2019
Director and Senior Managing Executive Officer
Responsible for FinTech BusinessIn charge of Corporate Planning, Real EstateBusiness and Customer Success (Incumbent)
Reasons for nomination as a candidate for Director

Number of
Shares Held

Mr. Masao Nakamura has business experience in corporate
planning, business development, store planning, etc. and has
performed his supervisory functions properly for importantmanagement decision making and operational execution as
Director of the Company since 2008. He has controlled fintech
business, corporate planning, real estate business and customer
success departments and performed his duties properly asManaging Executive Officer of the Company. Based on theabove reasons, the Company believes that he can fully perform
his functions for long- and medium-term improvement incorporate value of the Company. Therefore, the Company has
nominated him as a candidate for a Director.
Note: There is no special interest between the candidate and the Company.

(English Translation)― 12 ―

22,000Name(Date of Birth)(Brief History, Positions, Responsibilities, and Important
Positions at Other Organizations Concurrently Assumed, If Any)
Mar. 1987
Apr. 2013
Apr. 2015
Oct. 2015
Jun. 2016
Oct. 2016

Apr. 2017
Hirotsugu Kato
(July 30, 1963)【Reappointment】

6▸
Attendance to the
Meetings of the Board of
Directors: 10 out of 10(100%)

Oct. 2017

Apr. 2019

Joined the Company
General Manager, Corporate Planning Division
Executive Officer, and General Manager,
Corporate Planning Division
Executive Officer, and General Manager,
Corporate Planning Division and IR Division
Director and Senior Executive Officer
General Manager, Corporate Planning Division
and IR Division
Director and Senior Executive Officer
General Manager, Corporate Planning Division
and IR Division
In charge of ESG Promotion
Director and Senior Executive Officer
General Manager, IR Division
In charge of Corporate Planning Division and
ESG Promotion
Director and Senior Executive Officer
CDO
General Manager, IR Division
In charge of Corporate Planning and ESG
Promotion
Director and Managing Executive Officer, CFO
General Manager, IR Division
In charge of Finance, Investment Research,
Sustainability and ESG Promotion (Incumbent)

Reasons for nomination as a candidate for Director
Mr. Hirotsugu Kato has business experience in Corporate
Planning, Finance and IR Divisions, etc. and has performed his
supervisory functions properly for important management
decision making and operational execution as Director of theCompany since 2016. He also has controlled finance, investment
research, sustainability and ESG promotion and performed his
duties properly as Senior Managing Executive Officer of theCompany. Based on the above reasons, the Company believes
that he can fully perform his functions for long- and mediumterm improvement in corporate value of the Company. Therefore,
the Company has nominated him as a candidate for a Director.
Note: There is no special interest between the candidate and the Company.

(English Translation)― 13 ―

Number of
Shares Held

5,800

Name
(Date of Birth)(Brief History, Positions, Responsibilities, and Important
Positions at Other Organizations Concurrently Assumed, If Any)
Apr. 1992
Apr. 2015

7

Masahisa Aoki
(July 16, 1969)【New appointment】▸
Attendance to the
Meetings of the Board of
Directors: -Joined MOVING CO., LTD.
Store Manager, Shinjuku Marui Annex, MARUICO., LTD.
Apr. 2016
General Manager, Anime Business Department,
the Company
Apr. 2017
Executive Officer, and General Manager, Anime
Business Department
Apr. 2018
Executive Officer, and General Manager, New
Business Development Department
In charge of Anime Business
Senior Executive Officer
Apr. 2019
President and Representative Director, MARUICo., Ltd.
In charge of Anime Business (Incumbent)
Reasons for nomination as a candidate for Director

Number of
Shares Held

Mr. Masahisa Aoki has business experience in the planning
division for logistics, store operation, and direct marketing, andas a store manager of a Marui store. He also has controlled store
operation and direct marketing, and anime business andperformed his duties properly as Senior Executive Officer of theCompany. Based on the above reasons, the Company believes
that he can fully perform his functions for long- and mediumterm improvement in corporate value of the Company. Therefore,
the Company has nominated him as a candidate for a Director.

Note: There is no special interest between the candidate and the Company.

(English Translation)― 14 ―

4,300

Name
(Date of Birth)(Brief History, Positions, Responsibilities, and Important
Positions at Other Organizations Concurrently Assumed, If Any)
Mar. 1986
Oct. 2007
Apr. 2012
Apr. 2014
Apr. 20188

Yuko Ito(June 2, 1962)【New appointment】▸
Attendance to the
Meetings of the Board of
Directors: -Apr. 2019

Joined the Company
General Manager, Architecture Department
Director, AIM CREATE CO., LTD.
Executive Officer, and General Manager,
Architecture Department, the Company
Executive Officer, and General Manager, Group
Design Center and Architecture Department(Incumbent)
Managing Director, AIM CREATE CO., LTD.
(Incumbent)

Reasons for nomination as a candidate for Director
Ms. Yuko Ito has business experience in the planning andconstruction control division for architecture and interiors. She
also has controlled groupwide design strategy and thearchitecture division and performed her duties properly as
Executive Officer of the Company. Based on the above reasons,the Company believes that she can fully perform her functions
for long- and medium-term improvement in corporate value of
the Company. Therefore, the Company has nominated her as a
candidate for a Director.

Note: There is no special interest between the candidate and the Company.

(English Translation)

Number of
Shares Held― 15 ―

7,700

Proposal 3:

Election of One (1) Audit & Supervisory Board Member

The term of office of Audit & Supervisory Board Member Mr. Hideaki Fujizuka, one (1) of current four (4)Members, will expire at the close of this General Meeting.
Accordingly, the Company would like to propose to elect one (1) Audit & Supervisory Board Member.
Furthermore, the Audit & Supervisory Board has consented to this proposal.
The candidate for Substitute Audit & Supervisory Board Member is as follows:
Name(Date of Birth)(Brief History, Positions, and Important Positions at Other Organizations
Concurrently Assumed, If Any)
Apr. 1980
Jun. 2007

Hideaki Fujizuka(September 1, 1955)【Reappointment】▸ Attendance to the
Meetings of the Board of
Directors: 10 out of 10(100%)▸ Attendance to the
Meetings of the Audit &Supervisory Board: 17 outof 17 (100%)

Jun. 2010
Apr. 2012
Jun. 2015

Joined The Mitsubishi Bank Ltd. (current MUFG Bank,
Ltd.)
Executive Officer and General Manager, General
Affairs Dept., The Bank of Tokyo Mitsubishi UFJ, Ltd.
(current MUFG Bank, Ltd.)
President and Director, Chitose Kosan, Co., Ltd.
Director, Senior Executive Managing Officer and Group
President of Corporate Center, Olympus Corp.
Audit & Supervisory Board Member, the Company(Incumbent)

Reasons for nomination as a candidate for Audit & Supervisory Board
MemberMr. Hideaki Fujizuka has held important posts at The Bank of Tokyo
Mitsubishi UFJ, Ltd. (current MUFG Bank, Ltd.) and Olympus Corp, etc.,
and has excellent insights in finance, accounting, and risk management, etc.,
obtained based on his abundant experience. As the Company believes that
he can continue to contribute to fair audit as Audit & Supervisory Board
Member of the Company based on his excellent insight, the Company has
nominated him as a candidate for Audit & Supervisory Board Member.

Note: There is no special interest between the candidate and the Company.

(English Translation)― 16 ―

Number of
Shares Held

1,200

Proposal 4: Election of One (1) Substitute Audit & Supervisory Board Member
The resolution of electing Mr. Akira Nozaki as a Substitute Audit & Supervisory Board Member made at the82nd Ordinary General Meeting of Shareholders of the Company held on June 25, 2018 will be in effect until
the start of this General Meeting.
For the purpose of preparing for the case in which the number of Audit & Supervisory Board Member falls
below the minimum number stipulated in the laws and regulations, the Company would like to propose toelect one (1) Substitute Audit & Supervisory Board Member.
Furthermore, the Audit & Supervisory Board has consented to this proposal.
The candidate for Substitute Audit & Supervisory Board Member is as follows:
Name(Date of Birth)

Akira Nozaki(November 20, 1957)【Candidate for
Substitute External
Audit & Supervisory
Board Member】【Candidate for
Independent Audit &Supervisory Board
Member】(Brief History and Important Positions at Other Organizations Concurrently
Assumed, If Any)
Apr. 1988
Jun. 2015
Jun. 2017

Number of
Shares Held

Registered as Attorney
External Director, ICHIKAWA CO., LTD. (Incumbent)
Audit & Supervisory Board Member, J-OIL MILLS, Inc.
(Incumbent)

Reasons for nomination as a candidate for Substitute External Audit &Supervisory Board Member
The Company believes that he can carry out audit of the Company based on
his legal knowledge and experience obtained through his long-term practiceas a lawyer. Therefore, the Company has nominated him as a candidate for a
Substitute External Audit & Supervisory Board Member.

Notes: 1. There is no special interest between the candidate and the Company.
2. Mr. Akira Nozaki is a candidate for Substitute External Audit & Supervisory Board Member of the Company. In theevent that his election is approved and he assumes the post of External Audit & Supervisory Board Member, theCompany plans to submit an Independent Officer Registration Statement to the Tokyo Stock Exchange, Inc. thatdesignates him as an independent audit & supervisory board member.
3. In the event that Mr. Akira Nozaki is elected and assumes the post of External Audit & Supervisory Board Member,the Company plans to enter into a liability limiting agreement with Mr. Akira Nozaki under which his liability shallbe limited to the higher of a predetermined amount of 10 million yen or the amount set by the laws and regulations.

(English Translation)― 17 ―

0

Criteria for Independence for External Directors and Audit & Supervisory Board Members
MARUI GROUP aims to ensure the appropriate levels of objectivity and transparency necessary for effective
corporate governance. For this reason, it has established the following criteria for determining theindependence of External Directors, External Audit & Supervisory Board Members, and candidates for thesetwo positions. Individuals that meet all of these criteria are judged to be sufficiently independent from theCompany.
1. The individual must not be a person involved in operation*1 of the Company, its subsidiaries, or its
affiliates and must not have been a person involved in operation during the past ten (10) years.
2. The individual must not be a major supplier*2 of the Company, its subsidiaries, or its affiliates or aperson involved in operation of a major supplier.
3. The individual must not be a major customer*3 of the Company, its subsidiaries, or its affiliates or aperson involved in operation of a major customer.
4. The individual must not be a major shareholder of the Company possessing direct or indirect holdings
equating to 10% or more of voting rights, or a person involved in operation of a major shareholder.
5. The individual must not be a person involved in operation of an entity in which the Company, its
subsidiaries, or its affiliates possesses direct or indirect holdings equating to 10% or more of the total
voting rights of such entity.
6. The individual must not be a consultant, a certified public accountant or other accounting specialist,
or a lawyer or other legal specialist receiving large amounts of monetary payments or other financial
assets*4 from the Company, its subsidiaries, or its affiliates that are separate from the compensation
paid for services as a Director or Audit & Supervisory Board Member. The individual also must notbelong to a company or other organization that receives such payments or assets.
7. The individual must not receive large amounts of monetary payments or other financial assets*4 as
donations from the Company, its subsidiaries, or its affiliates and must not belong to a company orother organization that receives such donations.
8. The individual must not be the accounting auditor of the Company. The individual also must notbelong to a company or other organization that serves as the accounting auditor of the Company.
9. The individual must not have been applicable under items 2. to 8. during the past five (5) years.
10. The individual must not be a relative*5 of an individual that qualifies under Items 2. to 8. (onlyapplicable to relatives of important persons involved in operation*6 for all items except Items 6. and
8.).
11. The individual must not be a person involved in operation of another company with which theCompany is in interrelationship of external officers*7.
*1 A “person involved in operation” is defined as an executive director, executive officer, or employee with operational
execution responsibilities of a stock company; a director of a non-company legal entity or organization; or individuals
serving persons in similar positions or at similar companies, non-company legal entities, or organizations.
*2 A “major supplier” is defined as an entity that fulfills one of the following conditions:a. A supplier group (the corporate group to which the supplier that serves as the direct transaction counterparty
belongs) that provides products or services to the Company, its subsidiaries, or its affiliates and for whichtransactions with the Company, its subsidiaries, and its affiliates equated to 10 million yen or more and represented
more than 2% of the total consolidated net sales (the total consolidated operating revenue) or transaction revenuesof the supplier group in the most recently completed fiscal year.
b. A supplier group with which liabilities of the Company, its subsidiaries, or its affiliates are associated and for which
the applicable liabilities equated to 10 million yen or more and represented more than 2% of the consolidated total
assets of the supplier group as of the end of the most recently completed fiscal year.
*3 A “major customer” is defined as an entity that fulfills one of the following conditions:(English Translation)― 18 ―

a. A customer group (the corporate group to which the customer that serves as the direct transaction counterparty
belongs) to which the Company, its subsidiaries, or its affiliates provide products or services and for which the total
amount of transactions with the customer group equated to 10 million yen or more and represented more than 2%of the total consolidated operating revenue of the Company in the most recently completed fiscal year.
b. A customer group possessing liabilities that are associated with the Company, its subsidiaries, or its affiliates andthat equated to 10 million yen or more and represented more than 2% of the consolidated total assets of the Company
as of the end of the most recently completed fiscal year.
c. A financial group (the financial group to which the customer that serves as the direct transaction counterparty
belongs) from which the Company, its subsidiaries, or its affiliates procure funds through borrowings and fromwhich the total amount of funds borrowed represented more than 2% of the consolidated total assets of the Company
as of the end of the most recently completed fiscal year.
*4 A “large amount of monetary payments or other financial assets” means monetary payments or other financial assets,
the total amount of which is 10 million yen or more within the most recent fiscal year.
*5 A “relative” means a spouse of, and any family member who has relation within the second degree with, the individual.
*6 “Important persons involved in operation” refers to directors, executive officers, and employees with operational
execution responsibilities ranked as division manager or higher, or individuals with similar operational execution
authority.
*7 “Interrelationship of external officers” refers to a relationship whereby a person involved in operation of the Company,
its subsidiaries and its affiliates serves as an external officer of another company, and a person involved in operation of
the said company serves as an external officer of the Company.

End(English Translation)― 19 ―

Proposal 5: Revision of Performance-Linked Stock Compensation Plan for Directors
1.

Reason for the Proposal and Reason Why the Revised Compensation is Reasonable
The Company’s compensation plan for Directors (excluding External Directors and non-residents;
hereinafter the same shall apply in this proposal) was approved in “Revision of Compensation Plan for
Directors” at the 80th Ordinary General Meeting of Shareholders held on June 29, 2016, and that iscomposed of fixed basic compensation (up to 300 million yen per year), performance-linked bonus
based on performance of the Company for each fiscal year as a short term incentive (up to 100 million
yen per year), and performance-linked stock compensation plan based on medium to- long term
performance of the Company as a long- and medium-term incentive (amount contributed by theCompany shall be 300 million yen in total for three (3) fiscal years (equivalent to 100 million yen per
fiscal year.))For the performance-linked stock compensation plan, in order to promote Co-creation Sustainability
Management, the Company proposes to revise the maximum amount to be contributed and the
maximum number of shares of the Company to be delivered with an increase in the ratio of medium- tolong term incentives (stock compensation), providing the possibility to introduce an ESG rating, as
follows (hereinafter the revised plan shall be referred to as the “Plan”).
The purpose of the Plan is to clarify the connection between compensation for Directors and the stock
value of the Company, further enhance the sharing of value with shareholders, and further raise Directors’
consciousness of contributing to long- and medium-term improvements in performance and corporate
value, and the Company believes these revisions to be appropriate.
Compensation for External Directors will continue to consist only of fixed “basic compensation.”
The number of Directors who will be eligible for the Plan will be five (5) if Proposal 2 “Election ofEight (8) Directors” is approved as originally proposed.

2.

Amount and Details of Compensation, etc. Under the Revised Plan, etc.
(1) Outline of the Plan
This Plan is a performance-linked stock compensation under which a delivery and payment (“Delivery,etc.”) of shares of the Company and an amount of cash equivalent to the conversion value of the sharesof the Company into cash will be made through a trust (the “Trust”) established with cash contributedby the Company. The revision of the Plan will change the target period, which was a period of three (3)years from the fiscal year ending March 31, 2017 through the fiscal year ending March 31, 2019 under
the previous Plan, to a period of two (2) fiscal years from the fiscal year ending March 31, 2020 throughthe fiscal year ending March 31, 2021 covered by the current medium-term management plan, by
amending the trust agreement and contributing additional trust funds.
Upon expiry of a trust period of the Trust, the Company may continue the Trust by amending the trust
agreement and contributing additional trust fund. In such case, the Company shall set a new target periodof between two (2) and five (5) years, corresponding to the medium-term management plan at that timeand other medium-term plans for Co-creation Sustainability Management (collectively with the initialperiod of two (2) fiscal years mentioned above, referred to as the “Target Period), and extend the trust
period of the Trust for such period, and make additional contributions for each extended trust period tocontinue the provision of points to Directors and Delivery, etc. of the Shares of the Company, etc. (Moredetailed information is provided from item (2) onward.)(English Translation)― 20 ―

(a) Eligible persons who are entitled
to receive Delivery, etc. of the
Shares of the Company, etc.
under this proposal

Directors of the Company(excluding External Directors and non-residents)(b) Effect of the shares of the Company delivered under this proposal on the aggregate number of issued
shares of the Company

Maximum amount contributed by
the Company

Maximum number of the Shares of
the Company, etc. acquired by
Directors and the method ofacquisition of the shares of theCompany(c) Details of conditions of
performance achievement(d) Timing of Delivery, etc. of the
Shares of the Company, etc. to
Directors

・ 200 million yen per fiscal year multiplied by the number ofyears in the Target Period, with a maximum of 400 million
yen for the two (2) fiscal years in the initial Target Period(The initial Target Period is the two (2) fiscal years from thefiscal year ending March 31, 2020 through the fiscal year
ending March 31, 2021.)
・ 100,000 shares multiplied by the number of years in theTarget Period, with a total maximum of 200,000 shares to bedelivered and paid to Directors for the two (2) fiscal years of
the initial Target Period・ The above maximum number of shares to be delivered of
200,000 shares accounts for approximately 0.09% of theaggregate number of issued shares of the Company(excluding treasury stock as of March 31, 2019).
・ The shares of the Company will be acquired from the stock
market or the Company (disposition of treasury stock) (forthe initial Target Period, the shares will be acquired from thestock market).
・ The number of shares to be delivered will be determined in
the range from 0 to 110% based on the performanceindicators including the level of achievement against thetarget value of corporate performance indicators in the final
fiscal year of the Target Period.
・ For the initial Target Period, ROE, EPS, and ROIC, as wellas an ESG rating, etc., based on research by a third-party
institution, etc., to promote the Company’s Co-creation
Sustainability Management, will be used as performanceindicators.
・ From June immediately following the final fiscal year of theTarget Period (for the initial Target Period, from June 2021
after the conclusion of the current medium-term management
plan)
・ However, a transfer restriction period of one (1) year fromthe time of delivery shall be established for shares delivered
for the initial Target Period (a period in which the transfer,creation of security interests, or other disposal shall not be
permitted).

(2) Maximum amount contributed by the Company
The period subject to the Plan shall be fiscal years covered by the current medium-term management
plan and other medium-term plan for Co-creation Sustainability Management of the Company.

(English Translation)― 21 ―

Furthermore, the initial Target Period shall be the two (2) fiscal years from the fiscal year ending March
31, 2020 through the fiscal year ending March 31, 2021. If the Target Period is extended as set forth in(1) above, the new Target Period shall be a period of between two (2) and five (5) years, corresponding
to the medium-term plan for the Company’s management at that time, and the trust period of the Trustshall be extended by the same period as the new Target Period.
The maximum amount of cash to be contributed by the Company to the Trust as compensation for
Directors shall be an amount equivalent to 200 million yen per fiscal year multiplied by the number ofyears in the Target Period (400 million yen for the initial Target Period of two (2) fiscal years, andbetween 400 million yen and 1,000 million yen for the extended Target Period of between two (2) andfive (5) years.) The Trust will acquire shares of the Company from the stock market or the Company(disposition of treasury stock), with a total maximum of 100,000 shares per fiscal year multiplied by the
number of years in the Target Period (200,000 shares for the initial Target Period of two (2) fiscal years,
and between 200,000 shares and 500,000 shares for the extended Target Period of between two (2) andfive (5) years), for each Target Period by using funds trusted in accordance with directions of theadministrator of the Trust.
The Company will contribute trust fund for acquisition of shares of the Company to be delivered
separately to executive officers, and for acquisition of shares of the Company to be delivered to directorsof each subsidiary of the Company that has made contributions (the “Target Subsidiaries”). The Trust
will collectively hold the shares of the Company to be delivered and paid to Directors of the Company
and the shares of the Company to be delivered and paid to executive officers and directors of each Target
Subsidiary (the “Executive Officers, etc.”) as compensation and manage them in separate accounts. If
the Company continues the Trust, any shares, etc. remaining in the assets of the Trust on the last day of
the trust period to be extended (the “Remaining Shares, etc.”) shall be succeeded to by the extended
Trust. In such case, the total amount of the Remaining Shares, etc. and the amount of trust fund to be
additionally contributed shall be within the maximum amount approved at this General Meeting of
Shareholders (amount equivalent to 200 million yen per fiscal year multiplied by the number of years
in Target Period.) In this case, the Company additionally contribute the amount as compensation for
Executive Officers, etc. for the trust period separately extended.
(3) Method of calculation of number of the Shares of the Company, etc. acquired by Directors and the
maximum number thereof
The maximum number of points to be granted to Directors of the Company shall be 100,000 points(equivalent to 100,000 shares) multiplied by the number of years in the Target Period. In addition, themaximum total number of Shares of the Company, etc. to be delivered and paid to Directors by the Trustshall be 100,000 points multiplied by the number of years in the Target Period, and the maximum
number of points for the initial Target Period (two (2) years) shall be 200,000 points. If the trust period
is extended, the maximum number of points shall be 100,000 points multiplied by the number of years
in the extended trust period. The maximum number of the shares to be delivered is established based on
the aforementioned maximum amount of the trust fund as well as in consideration of the most recent
share price.
The number of the Shares of the Company, etc. to be delivered and paid to Directors will be calculated
by multiplying the accumulated number of points granted to Directors based on their position during
the Target Period by the performance-linked coefficient, at a certain time each year. The performancelinked coefficient will be determined in the range from 0 to 110% based on the performance indicators
including the level of achievement against the target value of corporate performance indicators in the
final fiscal year of the Target Period (for the initial Target Period, ROE, EPS, and ROIC, as well as an
ESG rating, etc., based on research by a third-party institution, etc., to promote the Company’s Cocreation Sustainability Management, will be used.)(English Translation)― 22 ―

Furthermore, one share of common stock of the Company will be delivered for one (1) point, but in thecase where an event that is deemed fair to adjust the number of points due to stock split and stock
consolidation occurs during a trust period, the number of points will be adjusted in accordance with the
split ratio, consolidation ratio, etc.
(4) Delivery, etc. of Shares of the Company, etc. to Directors
Directors who satisfy the eligibility requirements will receive Delivery, etc. of the shares of theCompany, etc. in accordance with the number of points calculated after the June immediately following
the final fiscal year of the Target Period. In this case, such Directors will receive shares of the Company
equivalent to a certain amount of points, and receive the remaining shares as the amount of cash
equivalent to the conversion value of the shares of the Company into cash after converted in the Trust.
However, a transfer restriction period of one (1) year from the time of delivery shall be established forshares delivered after the conclusion of the current medium-term management plan (a period in which
the transfer, creation of security interests, or other disposal shall not be permitted). If the Target Period
is extended and the Trust will be continued with the new Target Period of two (2) years, corresponding
to the medium-term plan for the Company’s management at that time, the same transfer restriction
period of one (1) year from the time of delivery as mentioned above shall be established for sharesdelivered for such Target Period.

(5) Clawback system, etc.
If serious wrongdoing or violation of laws and regulations occurs by the eligible Directors, the Company
shall establish a system to enable it to have said persons forfeit beneficiary rights for undelivered shares(malus) and demand the return of the amount equivalent to the delivered shares (clawback) under thePlan for such eligible Directors.
(6) Treatment of dividends from shares of the Company in the Trust
Dividends from shares of the Company in the Trust will be received by the Trust and appropriated totrust fees and the cost of the Trust.
(7) Other matters
To secure the neutrality of management, no voting rights shall be exercised for the shares of theCompany in the Trust during a trust period.
Other matters regarding the Plan will be determined by the Board of Directors each time when the Trustis set up, a trust agreement is amended, and additional contribution is made to the Trust.
(Reference)
For details of this stock compensation plan, please refer to the press release for May 14, 2019, “Noticeon renewal and partial revision to the performance-linked stock compensation plan for Directors.”(English Translation)― 23 ―

Proposal 6:

Election of Accounting Auditor

The term of office of the Company’s Accounting Auditor, KPMG AZSA LLC, will expire at theconclusion of this Ordinary General Meeting of Shareholders.
Accordingly, based on the resolution of the Audit & Supervisory Board, the Company requests approval
to appoint PricewaterhouseCoopers Aarata LLC as the Accounting Auditor.
1. The reasons of the Audit & Supervisory Board to nominate PricewaterhouseCoopers Aarata LLC
as a candidate for the Accounting Auditor
The current Accounting Auditor established a system aimed at ensuring that accounting audits will be
carried out appropriately and reasonably, however, the Company determined that it was appropriate toreview the Accounting Auditor at this time as the duration of service by current Accounting Auditor has
been an extended period. Accordingly, after comprehensively taking into account the fact that
PricewaterhouseCoopers Aarata LLC has the expertise, independence, and quality control systems required
for an Accounting Auditor and an understanding of our unique business models with integrated retailingand FinTech, after comparison with and review of other several auditing firms, the Audit & Supervisory
Board has determined that PricewaterhouseCoopers Aarata LLC is qualified to be the Company’s
Accounting Auditor and appointed it as a candidate for the Accounting Auditor.
2. Summary of the Accounting Auditor
Name

PricewaterhouseCoopers Aarata LLC
Main Offices Otemachi Park Building,
1-1 Otemachi 1-chome, Chiyoda-ku, Tokyo
June 2006
Establishment of Aarata Kansa Hojin (as a member firm in Japan ofPricewaterhouseCoopers (PwC))
July 2006
Commencement of operations
History
July 2015
Changed its corporate name to “PwC Aarata Kansa Hojin”
July 2016
Converted to a “limited liability audit corporation”, and changed its
corporate name to “PwC Aarata Yugen Sekinin Kansa Hojin”(English
name : PricewaterhouseCoopers Aarata LLC)
Capital:1 billion yen
Partners
145
CPAs
931
Junior certified public accountant and those 566
Staffing:
Profilewho have passed all subjects
USCPAs and other professionals
908
Clerks
612
Total
3,162
(as of June 30, 2018)(English Translation)― 24 ―

(Attached Materials)

Business Report(For the fiscal year from April 1, 2018 to March 31, 2019)
1. Information on the Status of Marui Corporate Group(1) Development of the Businesses of the Corporate Group and Financial Results
Total group transactions for the fiscal year under review increased by 16% and 350.3 billion yen fromthe previous fiscal year to 2,539.6 billion yen, thanks to the strong growth of card shopping transactionsin the FinTech segment. Revenue increased by 5% from the previous fiscal year to 251.4 billion yen, andoperating income increased by 13% from the previous fiscal year to 41.2 billion yen, which is an increasein operating income for ten (10) consecutive fiscal years.
In addition, net income attributable to owners of parent increased by 21% from the previous fiscal year
to 25.3 billion yen, which is an increase in net income attributable to owners of parent for eight (8)consecutive fiscal years. The Group recorded increases both in revenue and income for two (2)consecutive fiscal years.
With regard to KPI, which the Group emphasized, EPS (earnings per share) for the fiscal year underreview increased by 24% and 22.8 yen from the previous fiscal year to 116.0 yen, and ROE (return on
equity) increased by 1.5 % from the previous fiscal year to 9.1%, which was the highest record in the past
28 years since 1991, and ROIC (return on invested capital) increased by 0.4% from the previous fiscal
year to 3.7%.

(English Translation)― 25 ―

(Consolidated financial results for the fiscal year ended March 31, 2019)
Fiscal year ended
March 31, 2018
EPS (Yen)ROE (%)ROIC (%)*

Total Group Transactions
Revenue*
Gross Profit
Selling, General and
Administrative Expenses*
Operating Income*Ordinary Income
Net Income Attributableto Owners of Parent

Increase (Decrease) from
Fiscal year ended
Year on Year
March 31, 2019
the previous fiscal year

93.2
7.6
3.3
(Billionsof yen)2,189.4
240.5
175.9

116.0
9.1
3.7
(Billionsof yen)2,539.6
251.4
190.5

124%
-

139.5

149.3

107

9.8

36.4
35.1

41.2
39.8

113
113

4.8
4.6

20.9

25.3

121

4.4

(%)
116
105
108

22.8
1.5
0.4
(Billionsof yen)

350.3
10.9
14.6

* The amount deposited by customers after write-offs of operating receivables (installment sales accounts
receivable and consumer loans outstanding) in the FinTech segment was previously recorded as gain on
bad debts recovered under non-operating income after deducting the cost of recovery, however, theCompany has changed the method from the fiscal year under the review to record such deposited amounts
as revenue and such cost of recovery as selling, general and administrative expenses. In line with thischange, the figures for the fiscal year ended March 31, 2018 are those retroactively reflected the change ofsuch accounting policy.
Retailing segment
In the retail segment, as consumer needs are changing from consumption of goods to consumption ofexperiences, and from the fiscal year ended March 31, 2015, the Company has been transitioning storesfrom the traditional business model of department stores, which entails procuring and selling goods, toshopping center-types of commercial facilities, which earn rent revenue from fixed-term rental contracts(SC-type stores under fixed-term lease contracts), to stabilize revenue. As scheduled, the Company
achieved 100% in the fixed-term lease contract conversion ratio in the fiscal year under review, which isthe fifth year, and also promoted expansion of area leased under fixed-term lease contracts by changing
back spaces to retail spaces.
A shift in the composition of store categories from the present focus on apparel to lifestyle categories
focused on restaurants, services and sundries, leading to an increase in the number of visitors. The numberof visiting customers in this fiscal year under the review reached a record of 210 million people.
Moreover, in the EC (e-commerce) business, the Company promoted omni-channel retailing, including
promotion of receiving products at Marui stores, to improve profitability.
As a result, operating income in the retailing segment increased by 29% and 2.6 billion yen from theprevious fiscal year to 11.4 billion yen, which is an increase for two (2) consecutive fiscal years.
FinTech segment
In the FinTech segment, in order to increase EPOS card membership, the Company has been holding
promotional activities at Marui stores and on the internet, rolling out collaboration with commercial
facilities, resulting in collaboration with 25 facilities including 8 facilities which newly started
collaboration in the fiscal year under the review. Also, the Company has been pursuing business alliancesin high-growth fields, such as EC, service contents-related areas.
The number of card memberships totaled 6,880 thousand members, a 5% increase from the previous fiscal
year. The number of Platinum/Gold card memberships grew significantly to 2,150 thousand members, a(English Translation)― 26 ―

17% increase from the previous fiscal year, due to tireless efforts to increase regular customers.
Transaction volume in card shopping continued to grow significantly to 1,877.0 billion yen, a 17%
increase from the previous fiscal year, and service transaction volume such as rent guarantee steadily
increased to 281.2 billion yen, a 25% increase from the previous fiscal year.
As a result, operating income in the FinTech segment for the fiscal year under review increased by 11%
to 35.0 billion yen, an increase both in revenue and income for seven (7) consecutive fiscal years.
(Information on the status of the FinTech segment for the fiscal year ended March 31, 2019)

Increase(Decrease) from
Fiscal year ended Fiscal year ended
March 31, 2018 March 31, 2019 Year on Year the previous fiscal(10Thousands of (10Thousands of(%)
year
persons)
persons)(10Thousands of
persons)

Number of New Card Memberships

75

81

108

6

[Of which, from outside the Group]

[19]

[22]

[113]

[2]

Number of Card Memberships

657

688

105

31

Platinum / Gold

184

215

117

31

(Billionsof yen)(Billionsof yen)(Billionsof yen)Year on Year(%)

FinTech Transactions

1,972.5

2,310.6

117

338.2

Card Shopping

1,600.9

1,877.0

117

276.1

[Outside the Group][1,489.3][1,768.9][119][279.6]

Financial Services

225.1

281.2

125

56.1

Card Advance

138.0

143.3

104

5.3

(Segment Information)
Category(Millions of yen)
Retailing
Segment

FinTechSegment

Total

Adjustments

Consolidated

Revenue
To Outside Customers

125,410126,005

251,415－

251,415Inter-Segment
Revenue orTransferred Revenue

6,270

2,296

8,567

(8,567)－

131,681

128,301

259,982(8,567)

251,415[Year on Year (%)]

[95.4][116.2][104.6][－][104.6]

Segment Profit

11,42135,01846,439(5,255)

41,184[Year on Year (%)]

[129.4][111.4][115.3][－][113.2]

8.7

27.3

－

－

16.4

Total

Operating Margin (%)(English Translation)― 27 ―

(Details of Total Group Transactions)Category

Total Transactions(Millions of yen)

Composition
Ratio (%)

Year on Year (%)

Product sales
49,6182.0
84.3
Consignment sales
54,133
2.1
63.2
Rent revenues and others
208,659
8.2
130.5
Retailing-related services
24,5941.0
102.2
Retailing segment
337,006
13.3
102.6
Card shopping
1,876,951
73.9
117.2
Financial services
281,173
11.1
124.9
Cash advances
143,3125.6
103.8
IT and others
9,198
0.4
108.2
FinTech segment
2,310,635
91.0
117.1
Eliminations(108,010)
(4.3)
－
Total
2,539,631
100.0
116.0
Note: Total transactions for retailing-related services include interior design and furnishing for retail stores,
publicity and advertising, distribution/logistics for fashion goods, while IT and others includes IT
systems services, and the management and maintenance of buildings and rent on real estate, etc.
(2) Capital Investments
The capital investments of the Group were mainly for the renovation of sales floors at existing stores andinvestment in system infrastructure. The total expenditures on capital investments during the fiscal year
under review amounted to 9,094 million yen.
(3) Fund Procurement
The Group raises funds with the highest priority given to ensuring financial stability, while making efforts
to lengthen its funding period and diversifying its maturity dates as well as funding methods.
During the consolidated fiscal year under review, the Group raised funds of 37.0 billion yen in loans fromfinancial institutions and 20.0 billion yen from the issuance of bonds in response to an increase inoperating receivables of the FinTech segment and the repayment of loans. Additionally, the Group
increased the amount of funds raised through the securitization of receivables by 55.0 billion yen.
(4) Issues to be Addressed
In the consumption environment, a shift in consumption from “goods” to “experiences” has further
progressed and there is continued growth seen in the EC market in the retail sector. However, there is apotential risk of a future decline in business models that rely on real stores focused on merchandise sales.
In the credit market, while infrastructure development has progressed in preparation of the 2020
Olympics and Paralympic Games and markets are expected to grow, there will be a possibility thatmarkets will drastically change due to innovation in financial services driven by new technology.
In order to respond to these business environment changes, the Group has been evolving its uniquebusiness models where retailing and FinTech are integrated to enhance corporate value.
Our corporate philosophy is to “continue evolving to better aid our customers” and we “equate thedevelopment of our people with the development of our company.” Based on this philosophy, ourmission is to contribute to co-creation of a flourishing and inclusive society with stakeholders that offers
happiness to everyone.
The Group aims to increase profit for all stakeholders including customers, investors, communities
and society, business partners, employees and future generations. In order to achieve this aim, we(English Translation)― 28 ―

endeavor to create value that we can share with stakeholders by thinking and taking an action on all
matters from stakeholders’ perspectives. As a result, we are promoting “Co-creation Sustainability
Management” to improve corporate value.
The Group aims to further improve corporate value generated as its outcome, and under the five-year
medium-term management plan with the fiscal year ending March 31, 2021 as the final year, we will
strive to achieve targets of 130 yen or more in EPS (earnings per share), 10% or higher in ROE (returnon equity), and 4% or higher in ROIC (return on invested capital) for the final year.
■ Initiatives targeting achievement of the medium-term management plan
(Retailing segment)
With regard to store business, we will improve capital productivity by completing transition of its
business structure from a department store-type business by pursuing the conversion to SC-type stores
under fixed-term lease contracts, and deploying next-generation lifestyle-oriented shopping centers.
With regard to omni-channel retailing, we will develop businesses focused on Internet sales while
expanding the scope of business that combine Group expertise and other unique business models.
With regard to facility management and distribution, we will utilize store renovation, distribution,building management, and other retailing expertise in an integrated manner and advance business-tobusiness operations.
(FinTech segment)
With regard to credit card business, we will increase number of EPOS card fans across Japan andreinforce collaboration with commercial facilities and companies while maintaining high profit margins
and simultaneously expanding business scale.
With regard to financial services business, we will expand revenues from rent guarantee, insurance,and other services utilizing credit know-how to improve ROIC through business requiring minimal
invested capital.
With regard to IT business, we will support expansion of Group business scope by utilizing newtechnologies to improve customer convenience.
(Optimal capital structure/Growth investments/Productivity improvement)
We create structure in which ROIC consistently exceeds capital costs by improving ROIC throughincome growth and establishing optimal capital structure suited to Group business structure.
We develop commercial facilities utilizing shopping center and fixed-term rental know-how, invest in
venture companies to acquire new technologies, and execute other growth investments for improving
corporate value.
We utilize human resources as necessitated by business portfolio as a united MARUI GROUP tofurther improve Group productivity.
With these initiatives, we are aiming to achieve a five-year medium-term management plan with thefiscal year ending March 31, 2021, as its final year. We sincerely ask for continued support andencouragement from our shareholders.

(English Translation)― 29 ―

(5) Assets and Profits and Losses
Fiscal year ended
Category
March 31, 2016
Total Grouptransactions
1,703,353(Millions of yen)
Revenue *1
245,867(Millions of yen)
Ordinary income
29,163(Millions of yen)
Profit attributableto owners of
17,771parent(Millions of yen)
Earnings per
share
70.68
(Yen)
ROE (%)

Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

Fiscal year ended
March 31, 2019

1,933,685

2,189,374

2,539,631

237,022240,469

251,415

31,13935,14539,786

18,72420,90725,341

80.24

93.18

115.99

6.7

7.6

9.1

6.0

Total assets *2
730,126
806,575
865,887
890,196(Millions of yen)
Net assets
282,101
274,339
274,900
284,752(Millions of yen)
* From the fiscal year under the review, gain on bad debts recovered, which has previously been recorded
under “non-operating income”, is recorded under “revenue” (*1). Also, “Partial Amendments to
Accounting Standard for Tax Effect Accounting" (Accounting Standards Board of Japan (ASBJ),
Guidance No. 28, February 16, 2018), etc. has been applied (*2). In line with this change, the figures forthe fiscal year ended March 31, 2018 are those retroactively reflected the change of such accounting
policy.

(English Translation)― 30 ―

(6) Major Subsidiaries of the Groupi. Major Subsidiaries of the Group
Company Name

Capital Stock(Millions of yen)

MARUI Co., Ltd.

100

Epos Card Co., Ltd.

500

MRI SERVICER Co.,
Ltd.

500

AIM CREATE CO.,
LTD.

100

MOVING CO., LTD.

100

Percentageof Ownership(%)

Principal Business

Marui Store Business Operation,
Original Sales and Private Brand
100.0 Operation and Development, Online
Shopping and Mail-order, Outside
Specialty Store Business
Credit Card Business, Credit Loan
100.0
Business
Collection and Management of
100.0
Receivables Business, Credit Check[100.0]Business
Proposal of Commercial Facilities
Category, Design and Interior
Decoration, Operation and
100.0Management, Operation of Modi
stores, Planning and Making ofAdvertisement
Trucking Business, Forwarding
100.0
Business
Software Development,
100.0
Computer Operation
Building Management Service
100.0
Business, Security Service Business

M&C SYSTEMS CO.,234
LTD.
MARUI FACILITIES
100
Co., Ltd.
MARUI HOME
100
100.0 Real-Estate Rental Business
SERVICE Co., Ltd.
Notes: 1. The figure in square brackets “[ ]” in the Percentage of Ownership column indicates theshare of indirect ownership as an included number.
2. Percentage of Ownership to M&C SYSTEMS CO., LTD. became 100% (95.0% at the end of
the previous fiscal year) as a result of acquisition of shares held by other companies.
3. As of April 1, 2019, Modi business division of AIM CREATE CO., LTD. has been succeeded
by MARUI Co., Ltd. through the company split.
ii. Status of Specified Wholly Owned Subsidiaries as of the End of the Fiscal Year under Review
Total Amount ofCompany Name
Address
Total Assets of the Company
Book ValueMARUI Co., Ltd.

3-2, Nakano 4chome, Nakanoku, Tokyo(Millions of yen)

(Millions of yen)

222,529772,534(7) Lines of Business of the GroupThe Group’s lines of business are Retailing (rental and operational management of commercial facilities,
etc. and over-the-counter and online sales of apparel, luxury and accessory goods, etc.,), and FinTech(credit card services, consumer loans, and rent guarantees, etc.).

(English Translation)― 31 ―

(8) Major Business Hubsi. Head Office
Company Name

Location

MARUI GROUP CO., LTD.
MARUI Co., Ltd.
Epos Card Co., Ltd.
MRI SERVICER Co., Ltd.
Nakano-ku, Tokyo

AIM CREATE CO., LTD.
M&C SYSTEMS CO., LTD.
MARUI FACILITIES Co., Ltd.
MARUI HOME SERVICE Co., Ltd.
MOVING CO., LTD.

Toda-shi, Saitama Prefectureii. Stores
Prefecture
Tokyo
Kanagawa
Saitama
Chiba
Shizuoka
Osaka
Kyoto
Hyogo
Fukuoka(English Translation)

Store Name
Shinjuku, Ikebukuro Marui, Shibuya Marui and Modi, Kinshicho, Ueno Marui,
Kitasenju Marui, Yurakucho Marui, Nakano Marui, Kichijoji, Machida Marui andModi, Kokubunji Marui
Marui City Yokohama, Marui Family Mizonokuchi, Marui Family Ebina, Totsuka
Modi
Omiya Marui, Soka Marui, Marui Family Shiki, Kawagoe Modi
Kashiwa Marui and Modi
Shizuoka Marui and Modi
Namba MaruiKyoto Marui
Kobe Marui
Hakata Marui― 32 ―

(9) Matters concerning Employees
Business Category

Number of Employees

Retailing segment
FinTech segment
Corporate (Common functions)(Number of Person)
3,479
1,525
322

Total

5,326

Comparison with
the Previous Fiscal Year End(Number of Person)
427 (decrease)160 (increase)
45 (increase)222 (decrease)

Notes: 1. The number of employees shown above does not include part-time employees. Average numberof part-time employees during the fiscal year (calculated based on monthly work hours) is 1,520.
2. Corporate (Common functions) refers to corporate management departments and others thatcannot be included in any specific segment.
(10) Main Loan Lenders
Lenders

Outstanding Balance(Millions of yen)

Syndicated loan

125,000

MUFG Bank, Ltd.

112,000

Sumitomo Mitsui Banking Corporation
Development Bank of Japan Inc.

50,000Mizuho Bank, Ltd.

17,300Sumitomo Mitsui Trust Bank, Limited

9,500

22,000Note: Syndicated loan is co-financing whose manager is MUFG Bank, Ltd.

(English Translation)― 33 ―

2. Matters concerning the Shares of the Group(1) Total Number of Shares Authorized to be Issued: 1,400,000,000 shares(2) Number of Shares Issued and Outstanding: 223,660,417 shares (including 5,712,467 shares oftreasury stock)(3) Number of Shareholders: 27,369 shareholders(4) Principal Shareholders (Top 10)
Registered Name
The Master Trust Bank of Japan, Ltd. (Trust Account)

Number of SharesHeld(thousand shares)
34,194

Percentage ofShareholding%
15.7

Japan Trustee Services Bank, Ltd. (Trust Account)

17,825

8.2

Aoi Real Estate Company

6,019

2.8

MUFG Bank, Ltd.

5,808

2.7

4,284

2.0

Toho Co., Ltd.

3,779

1.7

Japan Trustee Services Bank, Ltd. (Trust Account 7)

3,699

1.7

Japan Trustee Services Bank, Ltd. (Trust Account 5)

3,274

1.5

Aoi scholarship Foundation

3,237

1.5

Japan Trustee Services Bank, Ltd. (Trust Account 9)

2,992

1.4

Trust & Custody Services Bank,
Investment Trust Account)Ltd.(Securities

Notes: 1. The Company holds 5,712 thousand shares of treasury stock which is excluded from the above
principal shareholders.
2. Percentage of shareholding is calculated based on the total number of shares issued andoutstanding, excluding the treasury stock of 5,712 thousand shares.
3. The calculation for the percentage of shareholding includes 502 thousand shares held by the
Officer Compensation BIP Trust and Stock Benefit ESOP Trust.
(5) Other Significant Matters concerning Equity
1. Acquisition of treasury stock (purchased through Tokyo Stock Exchange)
・Treasury stock acquired as authorized at the Board of Directors’ Meeting held on May 10, 2018:
Type and total number of shares acquired: 2,944,300 shares of common stock
Total cost of acquisition: 6,999,876,000 yen
Period of acquisition: From May 22, 2018 to November 30, 2018
2. Cancellation of treasury stock・Treasury stock cancelled as authorized at the Board of Directors’ Meeting held on May 10, 2018:
Type and total number of shares cancelled: 10,000,000 shares of common stock
Date of cancellation: May 31, 2018(English Translation)― 34 ―

3. Matters concerning Officers of the Group(1) Names of Directors and Audit & Supervisory Board Members of the Group
Name

Position in Charge and Important Position of
Other Organizations Concurrently Assumed

Position

Hiroshi Aoi

President and Representative
Director, and Group
Representative Executive
Officer

Etsuko Okajima

Director

Representative and CEO, ProNova Inc.
External Director, Link and Motivation Inc.
Outside Director, euglena Co., Ltd.

Yoshitaka Taguchi

Director

President and Chief Operating Officer, Seino
Holdings Co., Ltd.

Masahiro Muroi

Director

Tomoo Ishii

Director and Senior Managing
Executive Officer

Masao Nakamura

Director and Managing
Executive Officer

Hirotsugu Kato

Director and Senior Executive
Officer

Hideaki Fujizuka

Audit & Supervisory Board
Member (Full time)

Nariaki Fuse

Audit & Supervisory Board
Member (Full time)

Tadashi Ooe

Audit & Supervisory Board
MemberAttorney
External Director, Jeco Co., Ltd.
Outside Director, NISSAN CHEMICALINDUSTRIES. LTD.

Takehiko Takagi

Audit & Supervisory Board
MemberTax Accountant
External Audit & Supervisory Board
Member, KAWADA technologies, Inc.

External Director, Ryoden Corporation
Audit & Supervisory Board Member, The
Norinchukin Bank
CSO, CHO
In charge of Audit, General Affairs,
Personnel and Healthcare Promotion
President and Representative Director,
MOVING CO., LTD.
Responsible for FinTech BusinessPresident and Representative Director, AIM
CREATE CO., LTD.
CDO and General Manager, IR Division
In charge of Corporate Planning and ESG
Promotion

Notes: 1. Director, Mr. Koichiro Horiuchi retired from his post at the expiration of his term of office at theclose of the 82nd Ordinary General Meeting of Shareholders held on June 2018.
2. Audit & Supervisory Board Member, Mr. Tetsuji Sunami retired from his post at the expirationof his term of office at the close of the 82nd Ordinary General Meeting of Shareholders held on
June 2018.
3. Directors, Ms. Etsuko Okajima, Mr. Yoshitaka Taguchi and Mr. Masahiro Muroi are External
Directors. The Group has submitted a notification to Tokyo Stock Exchange, Inc. designatingthem as an independent director.
4. Audit & Supervisory Board Members, Mr. Tadashi Ooe and Mr. Takehiko Takagi are External
Audit & Supervisory Board Members. The Group has submitted a notification to Tokyo Stock
Exchange, Inc. designating them as independent audit & supervisory board members.
5. The Group has no special relations with entities in which Directors Ms. Etsuko Okajima and Mr.
Masahiro Muroi, and Audit & Supervisory Board Members Mr. Tadashi Ooe and Mr. Takehiko
Takagi concurrently assume office.
(English Translation)― 35 ―

6. Mr. Yoshitaka Taguchi concurrently serves as Representative Director of Seino Holdings Co., Ltd.
A subsidiary of the Company recorded 24 million yen of commission fee for instore delivery
services, etc., received from two subsidiaries of the said company (Seino Transportation Co., Ltd.
and another company) for the most recent fiscal year. The amount accounted for 0.01% of thetotal consolidated operating revenue of the Company, and therefore he satisfies the “Criteria for
Independence for External Directors and Audit & Supervisory Board Members” of the Company.
7. Director, Ms. Etsuko Okajima’s name on the family register is Ms. Etsuko Mino.
8. Audit & Supervisory Board Member, Mr. Tadashi Ooe is a qualified attorney and well-versed incorporate law.
9. Audit & Supervisory Board Member, Mr. Takehiko Takagi is a certified public tax accountant andhas an appreciable extent of knowledge in finance and accounting.
10. There were changes in directors’ positions, duties and important concurrent offices as of April
1, 2019.
Name

Previous

Present

Hiroshi Aoi

President and Representative Director President and Representative Director
Group Representative Executive
Group Representative Executive
Officer
Officer, and CEO

Tomoo Ishii

Director and Senior Managing
Executive Officer
CSO
CHO
In charge of Audit, General Affairs,
Personnel and Healthcare Promotion
President and Representative
Director, MOVING CO., LTD.

Masao Nakamura

Director and Managing Executive
Officer
Responsible for FinTech BusinessPresident and Representative
Director, AIM CREATE CO., LTD.

Director and Senior Managing
Executive Officer
Responsible for FinTech BusinessIn charge of Corporate Planning,
Real Estate Business and Customer
Success

Hirotsugu Kato

Director and Senior Executive Officer
CDO
General Manager, IR Division
In charge of Corporate Planning and
ESG Promotion

Director and Managing Executive
Officer, CFO
General Manager, IR Division
In charge of Finance, Investment
Research, Sustainability and ESG
Promotion(English Translation)― 36 ―

Director and Senior Managing
Executive Officer
CHO
In charge of Audit, General Affairs,
Personnel and Healthcare Promotion

(Reference)
Executive Officers (excluding those who concurrently serve as Director) are as follows. (As of April 1,
2019)
Name

Position

Position in Charge

Vice-President, Executive
Officer

CSO

Toshikazu Takimoto

Managing Executive Officer

CIO
Responsible for Retailing BusinessPresident and Representative Director, M&C
SYSTEMS CO., LTD.

Yoshinori Saito

Managing Executive Officer

President and Representative Director, Epos
Card Co., Ltd.

Motohiko Sato

President and Representative Director, AIM
CREATE Co., Ltd.
In charge of Architecture Division of theCompany
President and Representative Director,
MARUI Co., Ltd.
In charge of Anime Business of theCompany

Hajime Sasaki

Senior Executive Officer

Masahisa Aoki

Senior Executive Officer

Masahiro Aono

Senior Executive Officer

Senior Managing Director, MARUI Co., Ltd.

Yoshiaki Kogure

Executive Officer

President and Representative Director,
MARUI FACILITIES Co., Ltd.

Yuko Ito

Executive Officer

General Manager, Group Design Center andArchitecture Division
Managing Director, AIM CREATE CO.,LTD.

Mayuki Igayama

Executive Officer

President and Representative Director,
MOVING CO., LTD.

Junko Tsuda

Executive Officer

Director, Epos Card Co., Ltd.
General Manager, Members Services
Division

Miyuki Kawara

Executive Officer

Director and Store Manager, Marui Family
Mizonokuchi, MARUI Co., Ltd.

Tatsuo Niitsu

Executive Officer

Director and General Manager, Business
Planning Division, MARUI Co., Ltd.

Takeshi Ebihara

Executive Officer

CDO
Director and General Manager, Digital
Transformation Promotion Department,
M&C SYSTEMS CO., LTD.,

Reiko Kojima

Executive Officer

General Manager, Health Management
Division(English Translation)― 37 ―

(2) Compensation, etc. to Directors and Audit & Supervisory Board Members
Category

Total Amount of Compensation by Type
Number of
Persons
PerformanceBasic
Performancesubject tolinked stock
Compensation
linkedBonus
Payment
compensation(People)(Millions of yen)

(Millions of yen)

(Millions of yen)

Total Amount ofCompensation(Millions of yen)

Director
8
190
17
17
225
(External Director)
(4)
(33)
(-)
(-)
(33)
Audit & Supervisory
Board Member
550
50(External Audit &
(2)
(15)
(-)
(-)
(15)
Supervisory Board
Member)
Total
13
241
17
17
276
Notes: 1. The number of Directors and Audit & Supervisory Board Members at the end of the fiscal year
under the review is seven (7) Directors and four (4) Audit & Supervisory Board Members.
However, the above amount of compensation includes the amount for one (1) Director and one(1) Audit & Supervisory Board Member who retired due to the expiration of terms of office at
the conclusion of the 82nd Ordinary General Meeting of Shareholders held on June 2018.
2. Basic compensation for Directors with the resolution at the General Meeting of Shareholders has
a maximum limit of 300 million yen per year (compensation for Directors does not include salary
portion payable to Directors who concurrently serve as employees of the Company.) (Resolution
Date of the General Meeting of Shareholders: June 27, 2012) Of those amount, basic
compensation for Outside Directors has a maximum limit of 50 million yen per year
(Resolution Date of the General Meeting of Shareholders: June 29, 2016.) In addition, separate
from the aforementioned maximum limit, compensation for Directors (other than External
Directors) from the performance-linked bonus has a maximum limit of 100 million yen per year(compensation for Directors does not include bonus portions payable to Directors who
concurrently serve as employees of the Company), and compensation for Directors (other thanExternal Directors) by performance-linked stock compensation has a maximum limit of 300
million yen for the three fiscal years from the fiscal year ended March 31, 2017 to the fiscal year
ending March 31, 2019 and each three fiscal years thereafter. (Resolution Date of the General
Meeting of Shareholders: June 29, 2016)
3. Basic compensation for Audit & Supervisory Board Member with the resolution at the General
Meeting of Shareholders has the ceiling amount of 6 million yen per month. (Resolution Date of
the General Meeting of Shareholders: April 28, 1987)
4. The amount of performance-linked bonus and performance-linked stock compensation are theestimated amounts and the amount of expenses posted respectively.

(English Translation)― 38 ―

(3) Policy Regarding Decision on Compensation of Directors and Audit & Supervisory Board
Members
・ The amount of compensation paid to individual Directors is decided by the Nomination andCompensation Committee and set within the limit approved at general meeting of shareholders.
・ The Nomination and Compensation Committee consists of three (3) or more members, two (2) ofwhich are, in principle, External Directors, and has been set to improve the transparency andobjectivity of deliberation process related to compensation plans for Directors.
・ Compensation for Directors has been set at a level that will serve as an adequate motivation for
Directors to properly perform their duties of making management decisions and providing
supervisory functions.
・ Compensation for Directors includes fixed compensation as well as performance-linked
compensation. The portion of compensation linked to performance is meant to provide incentive
for pursuing sustainable growth for the Company. However, external directors will only receive
fixed compensation based on their position to ensure that they maintain an independent standpoint.
・ Compensation for Audit & Supervisory Board Members consists only of fixed compensation andis decided through discussion among the Audit & Supervisory Board and set within the limit
approved at a general meeting of shareholders.

(English Translation)― 39 ―

(4) Information on External Officers
i.Principal Activities of External Officers
Position

Directors

Name

Principal Activities of External Officers

Etsuko Okajima

Attended 9 of the 10 meetings of the Board of Directors held
during the fiscal year under review. Raised questions and madecomments, mainly from the perspective of an experienced
manager, and, as necessary, expressed her opinions in a timely
and appropriate manner.

Yoshitaka Taguchi

Masahiro Muroi

Attended all 8 meetings of the Board of Directors held after his
appointment at the 82nd Ordinary General Meeting of
Shareholders. Raised questions and made comments, mainly
from the perspective of an experienced manager, and, as
necessary, expressed his opinions in a timely and appropriatemanner.
Attended all 10 meetings of the Board of Directors held during
the fiscal year under review. Raised questions and madecomments, mainly from the perspective of an experienced
manager, and, as necessary, expressed his opinions in a timely
and appropriate manner.

Tadashi Ooe

Attended all 10 meetings of the Board of Directors and all 17
meetings of the Audit & Supervisory Board held during the
fiscal year under review. Expressed his opinions in a timely andappropriate manner based mainly on his professional
knowledge as an attorney. In addition, held meetings
periodically with the Representative Director; exchanged
opinions regarding risks confronting the Company, major issues
related to audit of the Company, and other matters; and is
working to deepen mutual understanding and trust.

Takehiko Takagi

Attended all 10 meetings of the Board of Directors and 16 of
the 17 meetings of the Audit & Supervisory Board held during
the fiscal year under review. Expressed his opinions in a timely
and appropriate manner based mainly on his professional
knowledge as a certified public tax accountant. In addition, held
meetings periodically with the Representative Director;
exchanged opinions regarding risks confronting the Company,
major issues related to auditing of the Company, and othermatters; and is working to deepen mutual understanding andtrust.

Audit &
Supervisory Board
Membersii. Outline of the Content of Liability Limitation Contracts
The Company concludes contracts with each of External Directors and External Audit & Supervisory
Board Members to limit their liability for damages, as provided under Article 423, Paragraph 1 of theCompanies Act. Based on these contracts, his/her liability shall be limited to the higher of apredetermined amount of higher of a predetermined amount of 10 million yen or the amount set by thelaws and regulations.

(English Translation)― 40 ―

4. Matters concerning Accounting Auditor(1) Name of Accounting Auditor of the Company

KPMG AZSA LLC(2) Compensation, etc. to the Accounting Auditor during the Fiscal Year under Review
1.

Compensation paid for services rendered as accounting auditor for the fiscal year under review:
100 million yen

2.

Total cash and other Compensation to be paid by the Company and its subsidiaries to the accounting
auditor: 148 million yen
Note: In the audit contract between the Company and its accounting auditor, compensation paid foraudits under the Companies Act and audits under the Financial Instruments and Exchange Act
are not clearly distinguished and cannot be practically separated. Therefore, the total amounts ofcompensation, etc. paid to the accounting auditor is stated in 1 and 2 as the amount ofcompensation, etc. for the fiscal year under review.

3.

Reason for the Audit & Supervisory Board’s consent of the compensation, etc. to the accounting
auditor:In addition to obtaining necessary documents and receiving reports from Directors, related
departments of the Company and the accounting auditor, based on the status of implementation ofaudit of the previous fiscal year, the Audit & Supervisory Board has considered that the compensation
is appropriate to maintain and improve the quality of audit and gave consent to the compensation as aresult of confirmation of time required for audit and the unit rate of the compensation specified in theaudit plan submitted by the accounting auditor.

(3) Content of Non-Auditing Activities
The Company and its subsidiaries call upon the accounting auditor to conduct work related to theprovision of letters of comfort in connection with corporate bond issuance.
(4) Policy Regarding the Dismissal or Non-Reappointment of the Accounting Auditor
If the Audit & Supervisory Board deems that the accounting auditor falls under any item of Article 340,
Paragraph 1 of the Companies Act, it will dismiss the accounting auditor with unanimous consent ofAudit & Supervisory Board Members, as necessary. In such case, an Audit & Supervisory Board Member
who is delegated by the Audit & Supervisory Board will report the fact that the Audit & Supervisory
Board dismissed the accounting auditor and the reason therefor at an ordinary general meeting ofshareholders to be held for the first time after the dismissal of the accounting auditor.
In addition to the above case, if the Audit & Supervisory Board deems that the accounting auditor isunable to conduct proper audit due to an event that impairs qualification or independence of theaccounting auditor, it will decide on details of a proposal regarding dismissal or non-reappointment of
the accounting auditor.
5.

Company’s Systems and Status of Operation
System to Ensure That the Execution of Duties by Directors Complies with Laws and Ordinances
and the Articles of Incorporation, and System to Ensure That the Business Operations of theCompany, as well as of the Corporate Group Consisting of the Company and Its Subsidiaries (theGroup), is Duly Executed, and Status of Operation of Those Systems.

○ Systems
The Group will proceed with arrangement for the internal control system from the viewpoint of carryingout the Group operation and promote efficient operation with healthy and a high level of transparency.

(English Translation)― 41 ―

i. System which ensures that execution of duties by Directors comply with laws and regulations and the
Articles of Incorporation
a. Directors shall discharge legally and duly duties in accordance with the Directors’/ Audit & Supervisory
Board Members’ Internal Regulations and the Code of Conduct of the Group.
b. The Board of Directors shall hold meetings in principle ten (10) times a year and supervise the executionof duties by Directors.
c. Audit & Supervisory Board Members shall audit independently the execution of business by Directors
and Executive Officers in accordance with the Regulations of the Audit & Supervisory Boards.
d. Highly independent External Directors and External Audit & Supervisory Board Members shall be elected
and the objectivity and transparency of operation shall be enhanced.
ii. System for maintaining and managing information regarding execution of business by Directors
a. The Company shall arrange the regulations for controlling documents, pursuant to which minutes of theBoard of Directors and other important documents related to the execution of business by Directors shallbe maintained.
iii. Regulations related to controlling risk of loss and other systema. Though the 6 Committees established to control high-risk areas in business operations (Public Relations
IR Committee, Internal Control Committee, Environment CSR Promotion Committee, Information
Security Committee, Safety Control Committee and Insider Trading Prevention Committee), theCompany shall strive for speedy operational improvement and the prevention of accidents. As acoordinating function of all committees, the Compliance Promotion Board, with the Representative
Director as the chairperson, is set up for the Group’s risk management.
b. The General Affairs Department and Audit Department shall cooperate in promoting internal control.
Through documentation and the monitoring of the operation of each group company, in terms ofpredictable risks and countermeasures, they shall work to minimize operational risks.
iv. System to ensure that Directors can execute their duties efficiently
a. In accordance with the Group’s authorization rules, the duties of Directors and Executive Officers shallbe explicitly defined, and the Group’s Directors and Executive Officers shall perform their duties in an
efficient and swift manner.
v. System to ensure that financial reports are made properlya. The corporate-wide policy and procedures to ensure appropriate financial reporting shall be presented andthe proper arrangement and operation shall be secured.
b. A system for evaluating risks arising from inappropriate statements with respect to important items offinancial report and for reducing risks shall be established.
c. A system for monitoring the internal control system with respect to financial reports shall be properly
arranged to confirm the conditions and status of operation.
vi. System to ensure that subsidiaries’ Directors and the Group’s employees execute business in compliancewith laws and regulations and the Articles of Incorporationa. The Group’s Code of Conduct shall be fully understood, to promote sound corporate activities groundedon high ethical standards for the Group.
b. In order to ensure full compliance with laws and ordinances and company rules across the entire Group,
operational manuals in every category shall be prepared and internal training is encouraged.
c. The Marui Group Hot Line (Internal Reporting System) shall be set up, which allows direct contact withoutside lawyers, to prevent problems from occurring and for the early detection of problems.
d. The Group shall conduct internal audits to grasp the internal control status, and improve compliance withlaws, regulations and company rules.

(English Translation)― 42 ―

vii. Other systems to ensure the appropriateness of business operations of the Groupa. The documentation of the internal control system of each group company shall be continuously reviewed.
b. Through the Compliance Promotion Board and the 6 Committees, the Group shall confirm the latest
control status of each Group company, and maintain an appropriate system.
c. Reporting system for the important decisions of subsidiaries to the Company shall be determined inaccordance with the authorization rules of the Group.
d. The cooperation of Audit & Supervisory Board Members from each group company and the Internal
Control Department shall be strengthened to further promote the establishment of an audit system forensuring proper transactions and accounting treatments.
e. The Group shall refuse any unwarranted demands and disassociate from anti-social bodies, which threatensocial order and safety, and strengthen the ties with external specialists, such as the police and lawyers,
to establish system to eradicate anti-social bodies.
viii. Matters relating to employees if Audit & Supervisory Board Members request their appointment as
assistants, issues of independence of such employees from Directors and how to ensure the effectivenessof instructions to such employees
a. Based on the request of Audit & Supervisory Board Members, audit staff with sufficient skills andknowledge shall be assigned to conduct requested duties.
b. Audit & Supervisory Board Members shall be allowed to instruct audit staff to assist with their audit work,and no Directors shall interfere with such instruction.
ix. System to report to Audit & Supervisory Board Members from Directors or employees, system to ensure
the fair treatment of reporters
a. The internal audit system shall be reinforced and supporting function for Audit & Supervisory Board
Members shall be strengthened.
b. The Directors and employees of each group company shall make report to Audit & Supervisory Board
Members as soon as possible when Directors and employees know any undue conduct, any fact whichmight infringe seriously any company in the Group or any act violating any laws, regulations or the
Articles of Incorporation.
c. It shall be confirmed that no unfair treatment has been applied on the grounds of reporting to Audit &Supervisory Board Members.
x. Matters relating to the prepayment of expenses incurred through the execution of duties by Audit &Supervisory Board Members and reimbursement procedures and policies on processing expenses andliabilities incurred through the execution of duties by Audit & Supervisory Board Members
a. When Audit & Supervisory Board Members claim for expenses incurred during the execution of duties,
such expenses shall be reimbursed, unless they are deemed unnecessary.
xi. Other system to ensure that efficient audit is carried out by Audit & Supervisory Board Members
a. The Board of Directors shall seriously cooperate with any request made by Audit & Supervisory Board
Members in connection with discharging their duties smoothly.
b. Representative Directors and Audit & Supervisory Board Members shall have a meeting regularly andmutually confirm the status of executing business or discharging duties.
c. Audit & Supervisory Board Members may attend the Board of Directors’ and other importantmanagement meetings as necessary to grasp the process under which important decision-making is
processed and the status of executing business.
d. Audit & Supervisory Board Members may receive the provision of report or information from Directors
and employees as necessary and inspect materials and records.
e. By appointing the Company’s Audit & Supervisory Board Members as the same of its principal
subsidiaries, information sharing and accurate confirmation of status can be realized.

(English Translation)― 43 ―

○ Status of Operation of the Systems
i. Overall internal control systema. The Group recognizes and improves the status of the Group’s overall internal control system throughinternal audit jointly made by Audit & Supervisory Board Members and internal audit departments ofeach group company.
b. The Group documents business content and anticipated risks of, and measures therefor to be taken by,each group company. Also, by monitoring the status of operation of such measures through selfassessment and internal audit, the Group promotes highly effective internal control.
c. At each of the Group companies, various rules have been developed to clarify operation and rules frominternal control perspective, and the rules are reviewed and revised as necessary.
d. As for internal control related to financial reporting pursuant to the Financial Instruments and ExchangeAct, the Internal Control Committee develops, operates and evaluates such internal control by commission
from the Board of Directors.
ii. Compliance systema. The Group seeks to fully disseminate its Code of Conduct to its personnel and promote sound corporate
activities based on high ethical standards. In the fiscal year under review, as a governance risk
countermeasure, the Group formulated MARUI GROUP Information Security Policy and MARUIGROUP Tax Policy, and set forth the reinforcement of groupwide information security and complianceof taxation rules, etc.
b. In order to ensure compliance with laws and regulations and the Group’s internal regulations, the Groupdevelops various manuals and promotes operation of those manuals as well as provides education for its
personnel. In the fiscal year under review, the Group provided training to its personnel regarding“information security” and “harassment” as focused subjects, in addition to practical trainings tailored toeach business area.
c. For the purpose of prevention and correction of violation of laws and regulations and misconduct, theGroup has set up the Marui Group Hot Line (an internal reporting system) to allow its personnel to directly
report to outside lawyers, and confirmed that the system has properly operated.
iii. Risk management systema. The Group promotes efficient control of risks through the 6 Committees of Public Relations IR Committee,
Internal Control Committee, Environment CSR Promotion Committee, Information Security Committee,
Safety Control Committee and Insider Trading Prevention Committee, which were set up to manage highrisk areas for business operation. Since Personal Information Protection Promotion Committee has been
covering information security of the entire group, it has been renamed as the Information Security
Committee to be in line with the actual activities.
b. The Group holds meetings of the Compliance Promotion Board which supervises activities of thecommittees and recognizes the status of risk control of each group company. In the fiscal year underreview the Group held meetings of the Compliance Promotion Board twice.
iv. Directors’ execution of their duties
a. The Group ensures that Directors execute their duties lawfully and properly in accordance with theGroup’s internal regulations such as the Code of Conduct of the Group and Regulations for Officers.
b. The Group appoints three (3) External Directors who have extensive experience and expertise outside theGroup and have satisfied the Group’s Criteria for Independence of External Directors and Audit &Supervisory Board Members to reinforce the supervisory functions of the Board of Directors and improve
the transparency of management.
c. The Board of Directors conducts proper deliberations pursuant to the Group’s authorization rules andengages in fulfilling discussions on individual subjects such as the Group’s strategies. In the fiscal year
under review, the Board of Directors held its meetings ten (10) times.
d. The Group has set up the Management Committee that is comprised of Executive Officers appointed by
the Board of Directors and seeks to accelerate operational decision-making by commissioning suchcommittee to make important management decisions regarding execution of duties within the scope of
the Group’s authorization rules. In the fiscal year under review, the meetings of the Management(English Translation)― 44 ―

Committee were held 25 times.
v. Audit & Supervisory Board Members’ execution of their duties
a. Audit & Supervisory Board Members exchange information at any time by holding regular meetings withRepresentative Director and confirm the status of operational execution. In the fiscal year under review,the regular meetings were held four (4) times.
b. Audit & Supervisory Board Members attend meetings of the Board of Directors, the Management
Committee, etc. and understand decision making process and the status of operational execution.
c. Audit & Supervisory Board Members exchange information and opinions with External Directors,
accounting auditors and internal audit departments on a regular basis.
d. Audit & Supervisory Board Members concurrently assume office of auditors at eight (8) subsidiaries andconfirm the status of operational execution of each of such subsidiaries by attending meetings of the Boardof Directors of such subsidiaries and holding meeting of the Group’s Audit & Supervisory Board
Members Liaison Committee each month.
e. The Group has established a system where Audit & Supervisory Board Members can execute their duties
smoothly by ways such as assigning two (2) employees who work for Audit & Supervisory Board
Members.
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Treatment of rounding numbers displayed in this report
Listed amounts are rounded down to the nearest million yen unit, the number of shares are rounded down, andother is rounded to the nearest unit.

(English Translation)― 45 ―

Consolidated Balance Sheet(As of March 31, 2019)(Millions of yen)
Item

Current assets

AmountAssetsCash and deposits
Notes and accounts receivable-trade
Accounts receivable-installment
Operating loans
Merchandise
Other

4,737

Liabilities
Current liabilities
Accounts payable-trade
Short-term loans payable
Current portion of bonds
Income taxes payable
Provision for bonuses
Provision for point card certificates
Provision for stock benefits
Reserve for loss from redemptionof gift certificates
Other
Noncurrent liabilities
Bonds payable
Long-term loans payable
Deferred tax liabilities
Provision for loss on interest
repayment
Provision for loss on guarantees
Asset retirement obligations
Other

2,112

Total liabilities

640,379
46,731
6,138
428,180
137,473
5,196
30,476

Allowance for doubtful accounts(13,818)

Noncurrent assets
Property, plant and equipment
Buildings and structures

249,817Land
Construction in progress
Other

103,044

Intangible assets
Software
Other
Investments and other assets
Investment securities
Guarantee deposits
Deferred tax assets
Other

Item

175,071
63,285
551
8,189
6,849

67,89622,172
31,895
10,5893,238

Net Assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Accumulated other comprehensive
incomeValuation difference on availablefor-sale securities
Deferred gains or losses on hedges

Total assets(English Translation)

890,196― 46 ―

Amount196,376
10,231
71,63230,0008,211
3,516
14,181673
165
57,765409,067
85,000300,000
3,470
4,957
190
2,777
12,672605,443
281,774
35,92091,323
166,858(12,327)
2,977
2,977
0

Total net assets

284,752

Total liabilities and net assets

890,196

Consolidated Statement of Income(From April 1, 2018 to March 31, 2019)(Millions of yen)
Item

AmountRevenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Dividends income
Gain on donation of non-current assets
Other
Non-operating expenses
Interest expenses
Financing expenses
Other

251,415
60,913
190,502
149,317
41,184
229
67
244
1,465
153
318

Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Extraordinary loss
Loss on retirement of noncurrent assets
Loss on closing of stores
Impairment loss
Loss on sales of investment securities
Loss on valuation of investment securities
Other

1,754
4
1,337
2,000
4
253
435
81

Income before income taxes
Income taxes-current
Income taxes-deferred
Net income
Net income attributable to non-controllinginterests
Net income attributable to owners of parent(English Translation)― 47 ―

12,301
(228)

540

1,938
39,786

1,758

4,112
37,433
12,07225,36018
25,341

Consolidated Statement of Changes in Net Assets(From April 1, 2018 to March 31, 2019)(Millions of yen)
Shareholders’ equity
Capitalstock
Balance as of April 1, 2018

Capitalsurplus35,920Retainedearnings

91,307

Total
shareholders’equityTreasurystock

168,034(22,389)

272,872

Changes in the fiscal year:
Dividends(9,452)(9,452)

Net income attributable toowners of parent

25,341

25,341

Acquisition of treasury stock(7,002)(7,002)

Disposition of treasury stock

0

0

0

Cancellation of treasury stock(17,064)

17,064－

Transfer to capital surplus
from retained earnings
Change in ownership interestof parent due to transactions
with non-controlling interests
Changes in items other thanshareholders’ equity-net

17,064(17,064)

－

15

15

Total changes in the fiscal year－15

(1,175)

10,062

8,902

Balance as of March 31, 201935,92091,323

166,858(12,327)

281,774(Millions of yen)

Accumulated other comprehensive income

Balance as of April 1, 2018

Valuationdifference on
available-forsale
securities

Deferred
gains orlosses onhedges

1,563

(1)

Total
Subscription
accumulated
rights toothersharescomprehensive
income1,561－

Noncontrollinginterests

Total
net
assets466

274,900

Changes in the fiscal year:
Dividends(9,452)

Net income attributable toowners of parent

25,341

Acquisition of treasury stock(7,002)

Disposition of treasury stock0

Cancellation of treasury stock－

Transfer to capital surplus
from retained earnings
Change in ownership interestof parent due to transactions
with non-controlling interests
Changes in items other thanshareholders’ equity-net

－
15
1,414

1

1,416

－

(466)

949

Total changes in the fiscal year

1,414

1

1,416

－

(466)

9,852

Balance as of March 31, 2019

2,977

0

2,977

－

－

284,752(English Translation)― 48 ―

Notes to Consolidated Financial Statements
1. Significant Matters on the Basis for the Preparation of the Consolidated Financial Statements(1) Scope of consolidationi) Number of consolidated subsidiaries: 9
Names of principal consolidated subsidiaries:
MARUI Co., Ltd., Epos Card Co., Ltd., MRI SERVICER Co., Ltd., AIM CREATE CO., LTD.,
MOVING CO., LTD., M&C SYSTEMS CO., LTD., MARUI FACILITIES Co., Ltd., MARUIHOME SERVICE Co., Ltd., MARUI HOME SERVICE MANAGEMENT Co., Ltd.
ii) Names of major non-consolidated subsidiaries:
Epos Small Amount and Short Term Insurance Co., Ltd., tsumiki Securities Co., Ltd, MARUIKIT CENTER CO., LTD, etc.
Reasons for excluding non-consolidated subsidiaries from the scope of consolidation
The seven non-consolidated subsidiaries above are excluded from the scope of consolidation
because each of the sums of their total assets, revenue, net income (an amount prorated toownership) and retained earnings (an amount prorated to ownership) has no significant impact
on the Company’s consolidated financial statements.
(2) Application of the equity method
The Company does not apply an equity method for the above seven non-consolidated subsidiaries and thefollowing six affiliates: MIZONOKUCHISHINTOSHI Co., Ltd., etc., because their respective net income(an amount prorated to ownership) and retained earnings (an amount prorated to ownership) have nosignificant impact on the consolidated financial statements.
(3) Summary of significant accounting policies
i) Basis and method for valuation of significant assets(a) Inventories
Merchandise is valued at cost using the monthly weighted average method (carrying amount in thebalance sheet is calculated with consideration of write-downs due to decreased profitability).
(b) Securities
Available-for-sale securities for which fair values are available are valued at the quoted market priceprevailing at the end of each consolidated fiscal year (with any unrealized gains or losses reported asa separate component of net assets at a net-of-tax amount and cost of sales determined by the movingaverage method). Available-for-sale securities for which fair values are not available are mainly statedat cost using the moving-average method.
Investments in investment limited partnerships are stated at the net value of equities based on themost recent financial statement available prepared according to the financial reporting date specified
in the respective partnership agreement.
ii) Method of depreciation and amortization of significant depreciable assets(a) Property, plant and equipment (excluding lease assets)
Property, plant and equipment are depreciated using the straight-line method.
(b) Intangible assets (excluding lease assets)
Intangible assets are amortized using the straight-line method, however, software for internal use isamortized using the straight-line method over the useful life estimated by the Company (notexceeding five years).
(c) Lease assets
Lease assets under financial lease contracts that do not transfer ownership of leased property to thelessee are depreciated using the straight-line method over the lease term with a residual value of zero.
iii) Basis for recognizing significant allowances and provisions(a) Allowance for doubtful accounts
The estimated uncollectible amounts are determined based on the historical rate of bad-debt losses
for general receivables and on the case-by-case analysis of recoverability for receivables with default
possibility.
(b) Provision for bonuses(English Translation)― 49 ―

The portion of estimated bonus payments that is incurred during the current consolidated fiscal year
is recognized.
(c) Provision for point card certificates
Based on the balance of points awarded to card members outstanding at the end of the current
consolidated fiscal year, the amount expected to be used is recognized.
(d) Reserve for loss from redemption of gift certificates
With regard to gift and other certificates that have been recognized as revenue after passage of acertain length of time after their issuance, the amount estimated to be exchanged in the future isrecognized.
(e) Provision for loss on interest repayment
The amount of consumer loan interest estimated to be repaid at the end of the current consolidated
fiscal year is recognized.
(f) Provision for loss on guarantees
With regard to the guaranteed obligations relating to consumer loans extended by financial
institutions, the amount of loss estimated to have been incurred is recognized.
(g) Provision for stock benefits
To prepare for provision of the Company’s stock benefits to officers and employees pursuant to thestock allotment regulations, provisions are recorded based on the estimated amount of stock benefit
obligations as of the end of the fiscal year under review.
iv) Other significant matters for the preparation of consolidated financial statements(a) Basis for recognizing revenues and expenses
Financial charges earned on installment sales and consumer loan interest income are recognized onan accrual basis by the method of charging on the declining balance of loans.
(b) Accounting treatment of consumption taxes
National and local consumption taxes are accounted for by the tax-excluded method.
2. Notes to Changes in Accounting Policies
Changes in accounting process of gain on bad debts recovered
The amount deposited by customers after write-offs of operating receivables (installment sales accounts
receivable and consumer loans outstanding) in the FinTech segment was previously recorded as gain on
bad debts recovered under non-operating income after deducting the cost of recovery, however, theCompany changed the method from the fiscal year under the review to record such deposited amounts asrevenue and such costs of recovery as selling, general and administrative expenses. The reasoning is thatrevenue in the FinTech segment increased to the same level as the retailing segment and FinTech is
becoming increasingly important for operating activities with the change of business structure, and theCompany reviewed the range of revenue from groupwide operating activities and strives to appropriately
present operating results.
3. Notes to Changes in Representation Methods“Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.” (ASBJ Statement No. 28
issued on February 16, 2018) has been applied from the beginning of the consolidated fiscal year ended
March 31, 2019, and deferred tax assets are presented in investments and other assets while deferred tax
liabilities are presented in noncurrent liabilities.
4. Notes to Consolidated Balance Sheet(1) Accumulated depreciation of property, plant and equipment(2) Guarantee liabilities
Loan guarantees for personal loans offered by financial institutions(3) Balance of securitized receivables(4) Accumulated reduction entry excluded national subsidy fromacquisition costs of tangible fixed assets(English Translation)― 50 ―

209,421 million yen
22,217 million yen
119,264 million yen
66 million yen

5. Notes to Consolidated Statement of Income
Impairment loss
The Group recognized the amount of impairment loss on the following asset groups.
(Unit: Millions of yen)
PurposeStoresLocation

Type

Kyoto MaruiKyoto-shi, Kyoto

AmountBuilding

4

Total

4

Assets are grouped with stores in the Group as the basic unit representing the minimum unit responsible
for generating cash flows and rental properties are grouped on the basis of properties. These carrying
amounts of the asset groups above have been written down to the recoverable amount and the amount of
the write-down has been reported as impairment loss under extraordinary losses.
Furthermore, the recoverable amount by asset group has been evaluated by its net sale value or value in
use. For stores that continue to have a negative amount of income produced through operating activities,
the value in use has been evaluated as zero because cash flow cannot be expected. For stores, etc.,
subject to closure or the disposal of equipment, the net sale value has been evaluated as zero.
6. Notes to Consolidated Statement of Changes in Net Assets(1) Type and number of shares issued
Share Class

Number of Shares
as of April 1, 2018

Increase in Shares in
the Fiscal Year

Decrease in Shares in
the Fiscal Year

Commonstock

Number of Shares
as of March 31,
2019

233,660,417 shares-

10,000,000 shares

223,660,417 shares(2) Dividendi) Cash dividend paid
Resolution
Ordinary
General Meetingof Shareholders
on June 25,
2018
Board ofDirectors
Meeting on
November 8,
2018

Share Class

Total Amount of
Dividend(Millions ofyen)

Dividend per
Share (Yen)Record Date

Effective Date

Common stock

4,417

20

March 31, 2018

June 26, 2018

Common stock

5,034

23

September 30,
2018

December 4,
2018

Note: 1. Total amount of dividend resolved by the Ordinary General Meeting of Shareholders on June 25,2018 includes 10 million yen of dividends from the Company’s shares owned by Officer
Compensation BIP Trust and Stock Benefit ESOP Trust.
2. Total amount of dividend resolved by the Board of Directors Meeting on November 8, 2018
includes 11 million yen of dividends from the Company’s shares owned by Officer Compensation
BIP Trust and Stock Benefit ESOP Trust.
ii) Dividends for which the record date falls in the current consolidated fiscal year, but the effective date falls
in the following consolidated fiscal year.
The item regarding dividend on common stock is being proposed as follows:(English Translation)― 51 ―

Resolution

Share Class

Resourcefor
Dividend

Dividend per
Share (Yen)Record Date

Effective Date

Ordinary
GeneralMeeting of
Shareholders
on June 20,
2019

Total Amount of
Dividend(Millions of yen)

Common
stock

5,666

Retainedearnings

26

March 31,2019

June 21, 2019

Note: Total amount of dividend to be resolved by the Ordinary General Meeting of Shareholders on June20, 2019 includes 13 million yen of dividends from the Company’s shares owned by Officer
Compensation BIP Trust and Stock Benefit ESOP Trust.
(3) The class and the number of shares underlying subscription rights to shares (excluding subscription rights
to shares of which the commencement date of their exercise period has not arrived) at the end of thecurrent consolidated fiscal year.
Not applicable(English Translation)― 52 ―

7. Notes to Financial Instruments(1) Matters concerning the status of financial instruments
The Group raises funds primarily through loans from financial institutions and bond issuance. Temporary
surplus funds are held in highly safe cash and bank deposits.
We strive to lower the customer credit risks relating to installment sales receivables and operating loansin accordance with our rules on extending credit. The investment securities are mainly stocks, and thefair values of listed stocks are checked on a quarterly basis. Guarantee money deposited is mainly inconnection with lease agreements for stores.
Loans are used as working capital. Interest rate swap transactions are used for a part of long-term loans
payable in order to reduce interest volatility risks. According to the Company’s policy, we utilize
derivative transactions solely for the purpose described above and not for speculative purposes.
(2) Fair value, etc. of financial instruments
Carrying amount in the consolidated balance sheets, fair value and net unrealized gain/loss of financial
instruments as of March 31, 2019 are shown in the table below.
(Millions of yen)
Consolidated Balance Sheets
Carrying Amount

Fair Value

Unrealized Gain/Loss(1) Cash and deposits

46,731

46,731-(2) Notes and accounts receivable-trade

6,138

6,138

-

469,541

50,925

134,414152,12117,706

14,63014,630－(3) Accounts receivable-installment

428,180

Allowance for doubtful accounts(9,565)
418,615(4) Operating loans

137,473

Allowance for doubtful accounts(3,058)(5) Investment securities
Other securities(6) Guarantee deposits

5,334

5,388

54

Total assets

625,865

694,552

68,686(1) Accounts payable-trade

10,231

10,231－(2) Short-term loans payable

71,632

71,632－(3) Current portion of bonds

30,00030,000－(4) Income taxes payable

8,211

8,211

－

(5) Bonds payable

85,00085,230230(6) Long-term loans payable

300,000

299,745(254)

Total liabilities

505,075

505,051(24)

Notes: 1. Method of determining the fair value of financial instruments, and matters concerning securities
and derivative transactions.

Assets(1) Cash and deposits and (2) Notes and accounts receivable-trade
For those items that are settled within short periods of time, the carrying amount is used as fairvalue because their fair value approximates their carrying amounts.
(3) Accounts receivable-installment and (4) Operating loans
Fair value of these items is determined at their present value by discounting, at the risk free rate,
their future cash flows that are adjusted for their credit risks identified in the credit control
process. With respect to receivables with default possibility, the unrecoverable amount is(English Translation)― 53 ―

estimated based on the present value of their estimated future cash flows. Their fair value thus
is very close to the balance sheets amount at the end of the consolidated fiscal year under review
less the estimated unrecoverable amount. This amount is therefore used as the fair value.
(5) Investment securities
Investment securities are measured at their quoted prices on the stock exchange.
(6) Guarantee deposits
Fair value of guarantee deposits is determined at the present value of their future cash flows,
discounted at a rate that equals the risk free rate, adjusted for credit risks.
Guarantee deposits that are expected to be repaid within one year are included.
Liabilities(1) Accounts payable-trade, (2) Short-term loans payable, (3) Current portion of bonds, and (4)Income taxes payable
These items are stated at their carrying amounts as they are settled within a short period of time
and their fair values approximate their carrying amounts.
(5) Bonds payable
Each bond is measured at the present value of the sum of the principal amount and interest
payments, discounted at a rate that takes into account the remaining period of the bond andcredit risks.
(6) Long-term loans payable
Long-term loans payable with variable rates are stated at their carrying amounts as such loans
reflect the market interest rate in a short period of time and their carrying amounts approximate
fair value. Some of these loans are subject to the special treatment for interest rate swaps (See“Derivative transactions” below). The sum of the principal amount and interest payments thatis treated in combination with such an interest rate swap is discounted at a reasonably estimatedinterest rate that would be applicable to other similar loans.
Those with a fixed interest rate are measured by discounting the sum of the principal amountand interest payments at an interest rate assumed to be applied if the same loans were newly
executed.
Derivative transactions
The interest rate swaps that are subject to the special treatment are treated in combination withlong-term loans payable that are designated as the hedged items. Their fair value is thus
presented as part of the long-term loans payable (See “(6) Long-term loans payable” above).
2. As it is extremely difficult to determine the fair value of non-publicly traded stocks (in the amountof 5,805 million yen on the consolidated balance sheets) and investments in capital to invest limited
partners (in the amount of 1,735 million yen on the consolidated balance sheet) for which no market
prices are available and the future cash flows cannot be estimated, they are not included in item (5)Investment securities above.
As it is also extremely difficult to determine the fair value of part of the lease deposits (in theamount of 27,263 million yen on the consolidated balance sheets) for which no market prices areavailable and the future cash flows cannot be estimated, they are not included in item (6) Guarantee
deposits.

(English Translation)― 54 ―

8. Notes to Real Estate for Rent and Others(1) Matters concerning the status of real estate for rent and others
Certain subsidiaries of the Company own commercial properties (including land) for rent in Tokyo andother areas.
(2) Matters concerning the fair value of real estate for rent and others
Consolidated Balance Sheets Carrying Amount(Millions of yen)
Fair Value

116,134

Notes:

251,003

1. The amount shown in the consolidated balance sheets equals the cost less accumulated
depreciation and accumulated impairment loss.
2. Fair value at the end of the consolidated fiscal year under review is an amount based primarily
on real-estate appraisals including index-based adjustments by licensed outside real estateappraisers.

9. Notes to Per Share Information(1) Net assets per share(2) Net income per share

1,309.53 yen
115.99 yen

10. Notes to Significant Subsequent Events
Not applicable.
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Amounts in theses consolidated financial statements have been rounded down to the nearest unit. Ratio etc. arerounded off to the nearest digit.

(English Translation)― 55 ―

Non-Consolidated Balance Sheet(As of March 31, 2019)(Millions of yen)
Item

AmountItem
Liabilities

AssetsCurrent assets
Cash and deposits
Short-term loans receivable fromsubsidiaries and affiliates
Other
Allowance for doubtful accounts

365,52132,012
330,824

Noncurrent assets
Property, plant and equipment
Buildings
Structures
VehiclesFurniture and fixtures

407,013
1,400
16
1
26
1,355

Intangible assets
Investments and other assets
Investment securities
Stocks of subsidiaries and affiliates
Investments in capital ofsubsidiaries and affiliates
Deferred tax assets
Other

2,718
(33)

51
405,562
17,418381,529
132
6,222
260

Current liabilities
Short-term loans payable
Current portion of bonds
Short-term loans payable tosubsidiaries and affiliates
Accounts payable-otherAccrued expenses
Income taxes payable
Deposits received
Provision for bonuses
Provision for stock benefits
Other
Noncurrent liabilities
Bonds payable
Long-term loans payable
Other
Total liabilities
Net Assets
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Retained earnings brought forward
Treasury stock
Valuation and translation
adjustments
Valuation difference on availablefor-sale securities
Total net assets

Total assets(English Translation)

Amount772,534

Total liabilities and net assets― 56 ―

185,469
71,50030,00081,352
769
527
109
207
279
240
483
385,067
85,000300,000
67
570,536
199,270
35,92091,30791,30784,3688,980
75,38875,388(12,327)
2,728
2,728

201,998
772,534

Non-Consolidated Statement of Income(From April 1, 2018 to March 31, 2019)(Millions of yen)
Item

AmountOperating revenue

17,345

Operating expenses
Operating income
Non-operating income
Interest income
Other

6,835
10,510

2,302
286

2,588

Non-operating expenses
Interest expenses
Other

1,404
335

1,739

Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on sales of noncurrent assets
Extraordinary loss
Loss on sales of investment securities
Loss on valuation of investment securities
Income before income taxes
Income taxes-current
Income taxes-deferred
Net income(English Translation)

11,359
4
0
253
435
272
(33)

― 57 ―

4689
10,675239
10,436

Non-Consolidated Statement of Changes in Net Assets(From April 1, 2018 to March 31, 2019)(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings

Capital
stock

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

Other retained
earnings
Retained earnings
brought forward

Total
retainedearnings

35,92091,307－91,307

8,980

91,470100,450Dividends(9,452)(9,452)

Net income

10,436

10,436(17,064)(17,064)

Balance as of April 1, 2018
Changes in the fiscal year:

Acquisition of treasury stock
Disposition of treasury stock00Cancellation of treasury stock(17,064)(17,064)

17,064

17,064

Transfer to capital surplus
from retained earnings
Change in items other thanshareholders’ equity-net
Total changes in the fiscal
year
Balance as of March 31, 2019

－

－

－

－

－

(16,081)(16,081)

35,92091,307－91,3078,980

75,38884,368(Millions of yen)
Shareholders’ equity

Balance as of April 1, 2018

Valuation and translation adjustments

Valuation
Total
difference on
Treasuryshareholders’stockavailable-forequity
sale securities(22,389)
205,288
1,449

Total valuationand translation
adjustments
1,449

Total net assets

206,738

Changes in the fiscal year:
Dividends(9,452)

Net income(9,452)

10,436

10,436

Acquisition of treasury stock(7,002)(7,002)(7,002)

Disposition of treasury stock

0

0

0

Cancellation of treasury stock
Transfer to capital surplus
from retained earnings
Change in items other thanshareholders’ equity-net
Total changes in the fiscal year

17,064－－－－

10,062

Balance as of March 31, 2019(12,327)

1,278

1,278

1,278

(6,018)

1,278

1,278

(4,740)199,270

2,728

2,728

201,998

Amounts in these consolidated statements have been rounded down to the nearest unit.

(English Translation)― 58 ―

Notes to Non-Consolidated Financial Statements

1. Notes on Matters concerning Significant Accounting Policies(1) Basis and method for valuation of assets
Securities
Stocks in subsidiaries and affiliates are stated at cost using the moving average method.
Available-for-sale securities for which fair values are available are valued at the quoted market priceprevailing at the end of each fiscal year (with any unrealized gains or losses reported as a separate
component of net assets at a net-of-tax amount and cost of sales determined by the moving-averagemethod). Available-for-sale securities for which fair values are not available are mainly stated at costusing the moving-average method. Investments in investment limited partnerships are stated at the net
value of equities based on the most recent financial statement available prepared according to thefinancial reporting date specified in the respective partnership agreement.
(2) Method of depreciation and amortization of noncurrent assets(a) Property, plant and equipment
Property, plant and equipment are depreciated using the straight-line method.
(b) Intangible assets
Intangible assets are amortized using the straight-line method. Software for internal use, however, isamortized using the straight-line method over the useful life estimated by the Company (notexceeding five years).
(3) Basis for recognizing allowances and provisions(a) Allowance for doubtful accounts
The estimated uncollectible amounts are determined on the case-by-case analysis of recoverability
for receivables with default possibility.
(b) Provision for bonuses
The portion of estimated bonus payments that is incurred during the current fiscal year is recognized.
(c) Provision for stock benefits
To prepare for provision of the Company’s stock benefits to officers and employees pursuant to thestock allotment regulations, provisions are recorded based on the estimated amount of stock benefit
obligations as of the end of the fiscal year under review.
(4) Other significant matters for the preparation of financial statements
National and local consumption taxes are accounted for by the tax-excluded method.
2. Notes to Changes in Representation Methods“Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.” (ASBJ Statement No. 28
issued on February 16, 2018) has been applied from the beginning of the consolidated fiscal year ended
March 31, 2019, and deferred tax assets are presented in investments and other assets while deferred tax
liabilities are presented in noncurrent liabilities.
3. Notes to Non-Consolidated Balance Sheet(1) Accumulated depreciation of property, plant and equipment(2) Guarantee liabilities
Guarantee liabilities in respect to the amount of payables of theconsolidated subsidiary, Epos Card Co., Ltd. to their business partner(3) Receivables and payables to subsidiaries and affiliates
Short-term receivables
Short-term payables

839 million yen
18,872 million yen
331,048 million yen
81,590 million yen

4. Notes to Non-Consolidated Statement of Income
Transaction with subsidiaries and affiliates
Operating transactions
Operating revenues
Operating expenses
Non-operating transactions(English Translation)

17,338 million yen
1,029 million yen
2,338 million yen― 59 ―

5. Notes to Non-Consolidated Statement of Changes in Net Assets
Class and number of shares of treasury stock

Number of Shares
as of March 31,
2019
Common stock
13,269,506 shares
2,945,262 shares
10,000,001 shares
6,214,767 shares
Notes: 1. Shares of common stock held as treasury stock increased by 2,945,262 shares due to the purchaseof treasury stock (2,944,300 shares), and the purchase of shares in response to purchase demands
for less than one unit (962 shares).
2. Shares of common stock held as treasury stock decreased by 10,000,001 shares due to thecancellation of treasury stock (10,000,000 shares), and the sale of fractional shares (1 share).
3. The number of shares of common stock as of March 31, 2019 includes 502,300 shares of theCompany’s shares owned by Officer Compensation BIP Trust and Stock Benefit ESOP Trust.
Share Class

Number of Shares
as of April 1, 2018

Increase in Sharesin the Fiscal Year

Decrease in Sharesin the Fiscal Year

6. Notes to Tax Effect Accounting
Principal components of deferred tax assets and deferred tax liabilities(Deferred tax assets)
Impairment loss of investment securities in subsidiaries andaffiliates for restructuring
Other
Sub-total
Valuation allowance
Total(Deferred tax liabilities)

7,238 million yen
2,859 million yen
10,097 million yen(2,671) million yen
7,426 million yen

Valuation difference on availablefor-sale securities
Total

1,204 million yen

Net deferred tax assets

6,222 million yen(English Translation)

1,204 million yen― 60 ―

7. Notes to Transactions with Related Parties
Subsidiaries, affiliates and other related parties

Name

Business Contents

VotingRights heldby theCompany(%)

MARUI Co., Ltd.

Marui Store Business,
Private Brand
Management andDevelopment, Mail-order
Business, Outlet Business

Epos Card Co., Ltd.

Credit Card Business,
Credit Loan Business

Name

Transactions

Type

Subsidiaries

Type

Concurrent Posts of
Directors and Audit &Supervisory Board
Members

Business
Relationship(Ownership)
Direct100.0

1 personBusinessmanagement(Ownership)
Direct100.0

1 personBusinessmanagement

Amount ofTransactions(Millions of yen)Account Item

Balance as ofMarch 31, 2019
(Millions of yen)

Borrowing of funds*Note158,299

Short-term loans
payable tosubsidiaries andaffiliates

66,441Businessmanagement fee*Note2

1,601-

Lending of funds*Note1

381,403

Short-term loans
receivable fromsubsidiaries andaffiliates

Businessmanagement fee*Note2

3,527

-

-

Receipt of interests

2,288

-

-

MARUI Co., Ltd.

Subsidiaries

Epos Card Co., Ltd.

Relationship-328,205

Terms of transactions and policy for deciding transaction terms
Notes: 1. These loans are intended to centralize control of the intra-Group funds by the cash management
system. The interest rate is reasonably determined based on the market interest rate. The
transaction amounts shown in the table above are average outstanding balances.
2. These represent fees for accounting and personnel management related services provided and aredetermined on a reasonable basis.
8. Notes to Per-Share Information(1) Net assets per share(2) Net income per share

928.96 yen
47.76 yen

9. Notes to Significant Subsequent Events
Not applicable.
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Amounts in these non-consolidated financial statements have been rounded down to the nearest unit. Ratio etc. arerounded off to the nearest digit.

(English Translation)― 61 ―

[Reference]
The Company passed a resolution on the following matters at the Board of Directors meeting held on May 14,
2019. The details of the resolution are as follows:
1. Matters concerning treasury stock(1) Reasons for acquisition of treasury stock
Under the five-year medium-term management plan with the fiscal year ending March 31, 2021 as the final
year, the Group will strive for innovation and integrated management of the Group’s businesses for profit growth.
Under these financial strategies, with an aim of achieving optimal capital composition suitable to the Group’sbusiness structure, the Company will effectively utilize basic operational cash flows generated over the five
years to increase investment for growth and enhance shareholder returns. As part of this initiative, the Company
will promote acquisition of treasury stock to target EPS of 130 yen or more, ROE of 10% or higher, and ROIC
of 4% or higher, to increase corporate value. The following particulars are resolved based on the above
approaches.
(2) Particulars of acquisition of treasury stock1) Type of shares to be acquired:
Common stock2) Total number of shares to be acquired:No more than 3.9 million shares(1.79% of the total number of issued shares excluding treasury stock)3) Total amount of acquisition:
No more than 7,000 million yen
4) Period of acquisition:
From May 15, 2019 to March 31, 2020
2. Establishment of Sustainability Committee(1) Purpose of establishment of Committee
The Sustainability Committee is established as an advisory body to the Board of Directors for the purpose ofpromoting Co-creation Sustainability Management.
(2) Role of Committee
1) The Sustainability Committee will review the sustainability strategy and initiatives throughout the Groupand report and provide advice to the Board of Directors.
2) The Environmental CSR Promotion Subcommittee will be established within Sustainability Committee as abody to carry out relevant risk management and activities designated by the committee.
* The Sustainability Committee will reflect advice and proposals from the Sustainability Advisory Board insustainability initiatives.
• For details on the Sustainability Advisory Board, please see the following website.
(http://www.0101maruigroup.co.jp/pdf/settlement/18_1221/18_1221_1.pdf)(3) Composition of Committee
The Sustainability Committee is composed of the President as chairman, members appointed by the Board of
Directors from among Executive Officers, and members appointed by the Board of Directors as it deems
appropriate in the light of its purpose.
* Corporate Governance Guidelines has been revised following establishment of the Sustainability
Committee. For details, please see the following website.
(http://www.0101maruigroup.co.jp/ci/governance.html)(English Translation)― 62 ―

Major external evaluation related to ESG (From April 1, 2018 to March 31, 2019)
The MARUI GROUP wasselected for inclusion in World
Index for the first time
The MARUI GROUP wasselected for inclusion in Asia
Pacific Index for the second
consecutive year

The MARUI GROUP wasawarded CDP’s “Climate
Change A List” for the firsttime in the retail industry in
Japan

The MARUI GROUP wasselected for inclusion in the“S&P/JPX Carbon EfficientIndex”The MARUI GROUP was
included in the Health &Productivity Stock Selection
for the second consecutiveyear

The MARUI GROUP was
included in the New Diversity
Management Selection 100 for
the first time

The MARUI GROUP wasselected for inclusion in theNadeshiko Brands for thesecond consecutive year

(English Translation)

The MARUI GROUP wasselected for inclusion in
Three ESG Indexes utilized by
the GPIF for the second
consecutive year

― 63 ―For details, please see the following website.

(http://www.0101maruigroup.co.jp/en/ci/award.html)