Annual Securities Report(Report in accordance with Article 24, paragraph (1) of
the Financial Instruments and Exchange Act)The 15th fiscal year (from March 1, 2021 to February 28, 2022)

J. FRONT RETAILING Co., Ltd.
E03516

Table of Contents
Annual securities report for the 15th fiscal year
Cover pageA.

Company Information .........................................................................................................................................4I.

Overview of the Company ............................................................................................................................. 4
1.

Summary of business results...................................................................................................................... 4

2.

Company history........................................................................................................................................ 7

3.

Description of business .............................................................................................................................. 94.

Overview of subsidiaries and associates ...................................................................................................11

5.

Information about employees .................................................................................................................. 13

II.

Overview of Business .................................................................................................................................. 14
1.

Management policy, management environment, issues to be addressed, etc........................................... 14

2.

Business risks........................................................................................................................................... 19

3.

Management analysis of financial position, operating results and cash flows......................................... 54

4.

Critical contracts for operation ................................................................................................................ 65

5.

Research and development activities ....................................................................................................... 65

III. Information About Facilities ........................................................................................................................ 66
1.

Overview of capital expenditures, etc...................................................................................................... 66

2.

Major facilities ......................................................................................................................................... 66

3.

Planned additions, retirements, etc. of facilities ...................................................................................... 69

IV. Information About Reporting Company ...................................................................................................... 70
1.

Company’s shares, etc. ............................................................................................................................ 70

2.

Acquisition and disposal of treasury shares ............................................................................................. 75

3.

Dividend policy ....................................................................................................................................... 76

4.

Status of corporate governance, etc. ........................................................................................................ 77

V.

Financial Information ................................................................................................................................ 127
1.

Consolidated Financial Statements, etc. ................................................................................................ 128

2.

Non-consolidated Financial Statements, etc. ......................................................................................... 202

VI. Outline of Share-Related Administration of Reporting Company ............................................................. 214
VII. Reference Information of Reporting Company ......................................................................................... 216

B.

1.

Information about parent company, etc. of reporting company ............................................................. 216

2.

Other reference information................................................................................................................... 216

Information About Reporting Company’s Guarantor, Etc. .............................................................................217

Independent Auditor’s ReportCover page
Document title

Annual Securities Report

Clause of stipulation

Article 24, paragraph (1) of the Financial Instruments and Exchange Act

Place of filing

Director-General of the Kanto Local Finance Bureau

Filing date

May 27, 2022

Fiscal year

The 15th fiscal year (from March 1, 2021 to February 28, 2022)

Company name

Ｊ.フロント リテイリング株式会社 (J. FRONT RETAILING
Kabushiki Kaisha)Company name in English

J. FRONT RETAILING Co., Ltd.

Job title and name of representative

YOSHIMOTO Tatsuya, President and Representative Executive Officer

Address of registered headquarters

10-1, Ginza 6-chome, Chuo-ku, Tokyo(Above is the address registered as the location of the head office of theCompany. Actual business operations are conducted at the following“Nearest place of contact.”)

Telephone number+81-3-6895-0179 (from overseas)

Name of contact person

NOGUCHI Hideki, Executive Officer, Senior General Manager of
Accounting and Tax Affairs Division of Financial Strategy Unit

Nearest place of contact

4-1, Nihonbashi 1-chome, Chuo-ku, Tokyo

Telephone number+81-3-6895-0179 (from overseas)

Name of contact person

NOGUCHI Hideki, Executive Officer, Senior General Manager of
Accounting and Tax Affairs Division of Financial Strategy Unit

Place for public inspection

Tokyo Stock Exchange, Inc.
(2-1, Nihonbashi Kabutocho, Chuo-ku, Tokyo)
Nagoya Stock Exchange, Inc.
(8-20, Sakae 3-chome, Naka-ku, Nagoya)

A.

Company Information

I. Overview of the Company
1. Summary of business results(1) Business results of the GroupInternational Financial Reporting Standards (IFRS)

Term
11th fiscal year

12th fiscal year

13th fiscal year

14th fiscal year

15th fiscal year

February 2018

February 2019

February 2020

February 2021

February 2022

469,915459,840

480,621319,079

331,484

Profit (loss) before tax(Millions of yen)

48,271

42,126

37,161(28,672)

6,190

Profit (loss) attributable toowners of parent(Millions of yen)

28,48627,35821,251(26,193)

4,321

Comprehensive income
attributable to owners of parent(Millions of yen)

34,45025,631

19,259(27,296)

6,173

Equity attributable to owners ofparent(Millions of yen)

395,519

412,700

387,188352,171

350,368

1,022,348

1,029,573

1,240,308

1,263,722

1,192,907

1,511.91

1,576.68

1,479.07

1,344.91

1,337.29

108.92104.5581.19(100.03)

16.50

Diluted earnings (loss) per share(Yen)

108.86104.5281.17(100.03)

16.50

Ratio of equity attributable toowners of parent to total
assets
(%)

38.7

40.1

31.2

27.9

29.4

Profit/equity attributable toowners of parent (ROE)

7.5

6.8

5.4

(7.1)

1.2

Price earnings ratio (PER)(Times)

17.91

11.79

14.13

–

58.29

Net cash provided by (used in)operating activities(Millions of yen)

57,07934,87073,35856,47149,866

Net cash provided by (used in)investing activities(Millions of yen)

(19,030)(26,836)(49,559)(20,870)(5,289)Net cash provided by (used in)financing activities(Millions of yen)

(31,048)(21,274)(14,829)58,727(80,392)

Cash and cash equivalents at endof period(Millions of yen)

38,88325,65934,633

128,925

93,278

6,723

6,695

6,579

6,528

5,589

[3,706][3,581][3,265][3,107][2,559]Fiscal year-end
Sales revenue(Millions of yen)

Total assets(Millions of yen)
Equity attributable to owners ofparent per share(Yen)
Basic earnings (loss) per
share

(Yen)

(%)

Number of employees(Persons)[Separately, average number of
temporary employees]
Notes:

1.
2.
3.
4.
5.
6.

The Company has adopted the International Financial Reporting Standards (IFRS) from the 11th fiscal year.
Amounts have been rounded down to the nearest one million yen.
Sales revenue does not include consumption taxes.
The average number of temporary employees includes dedicated employees and fixed-term employees.
Diluted loss per share for the 14th fiscal year is equal to basic loss per share because there are no potential shares thathave dilutive effects.
The price earnings ratio (PER) for the 14th fiscal year is not presented because a loss attributable to owners of parent
was recorded.

-4-

Japanese GAAP

Term

11th fiscal year

Fiscal year-end

February 2018

Net sales(Millions of yen)
Ordinary profit(Millions of yen)

947,879
41,032

Profit attributable to owners ofparent(Millions of yen)

26,110Comprehensive income(Millions of yen)

36,695

Net assets(Millions of yen)
Total assets(Millions of yen)
Net assets per share(Yen)
Basic earnings per share(Yen)
Diluted earnings per share(Yen)
Equity ratio(%)
Return on equity (ROE)(%)

493,713
1,066,480
1,651.46
99.83
–
40.5
6.2

Price earnings ratio (PER)(Times)19.54

Net cash provided by (used in)operating activities(Millions of yen)

57,001

Net cash provided by (used in)investing activities(Millions of yen)

(18,719)

Net cash provided by (used in)financing activities(Millions of yen)

(31,280)

Cash and cash equivalents at endof period(Millions of yen)

38,863

Number of employees(Persons)[Separately, average number of
temporary employees]
Notes:

1.
2.
3.

6,723
[3,706]

Net sales do not include consumption taxes.
The average number of temporary employees includes dedicated employees who shifted to non-fixed term contracts
and fixed-term employees.
The figures for the 11th fiscal year are based on Japanese GAAP and were not subject to an audit pursuant toprovisions of Article 193-2, paragraph (1) of the Financial Instruments and Exchange Act.

-5-

(2) Business results of the reporting company
Term

11th fiscal year

12th fiscal year

13th fiscal year

14th fiscal year

15th fiscal year

Fiscal year-end

February 2018

February 2019

February 2020

February 2021

February 2022

14,776

18,77034,116

13,812

15,482

9,892

13,98728,163

8,849

9,505

8,579

13,897

27,948

7,487

14,253

31,974

31,974

31,974

31,974

31,974

270,565,764

270,565,764

270,565,764

270,565,764

270,565,764

305,802

310,329

328,871329,351

335,241

421,361

415,927

531,341

675,917641,307

1,169.25

1,186.13

1,256.46

1,258.07

1,280.48

35.00

35.00

36.00

27.00

29.00

[16.00][17.00][18.00][9.00][14.00]

32.80

53.12

106.80

28.60

54.44

–

–

–

28.60

54.44

72.6

74.6

61.9

48.7

52.3

2.81

4.51

8.74

2.28

4.29

59.48

23.21

10.74

35.56

17.67

106.71

65.89

33.71

94.41

53.27

99

132

147

133

138

[15]

[19]

[17]

[17]

[16]

115.1

75.5

72.6

66.6

65.1

[117.6][109.3][105.3][133.1][137.6]

2,190

1,944

1,612

1,175

1,218

1,426

1,184

1,116

600

882

Operating revenue(Millions of yen)
Ordinary profit(Millions of yen)
Profit(Millions of yen)
Share capital(Millions of yen)
Total number of issued
shares(Shares)

Net assets(Millions of yen)
Total assets(Millions of yen)
Net assets per share(Yen)
Dividends per share(Yen)[Interim dividends per share]
Basic earnings per share(Yen)
Diluted earnings per share(Yen)
Equity ratio(%)
Return on equity (ROE)(%)
Price earnings ratio (PER)(Times)Dividend payout ratio(%)
Number of employees(Persons)[Separately, average number of
temporary employees]
Total shareholder return(%)[Benchmark index: Dividendincluded TOPIX](%)
Highest share price(Yen)
Lowest share price(Yen)
Notes:

1.
2.
3.

Operating revenue does not include consumption taxes.
The dividends per share of ¥35 for the 11th fiscal year include a commemorative dividend of ¥2.
The highest and lowest share prices were those recorded on the first section of the Tokyo Stock Exchange.

-6-2. Company history
Apr. 9, 2007

May 24, 2007

Sept. 3, 2007

Nov. 1, 2007
Sept. 1, 2008

Jan. 1, 2009
Mar. 1, 2009
Dec. 1, 2009
Mar. 1, 2010

Sept. 1, 2010

Mar. 1, 2011

Mar. 30, 2011
Jan. 4, 2012
Mar. 23, 2012
Aug. 20, 2012
Aug. 27, 2012

Sept. 3, 2012

Apr. 1, 2013
Aug. 31, 2013
Dec. 20, 2013

The Daimaru, Inc. and Matsuzakaya Holdings Co., Ltd. resolve at their meetings of theBoard of Directors to jointly establish a holding company through a share transfer,
subject to the approval at their respective Annual Shareholders Meetings, and at the sametime to prepare a “Share Transfer Plan” and conclude an “Agreement on Business
Integration.” The details of the proposals regarding the share transfer to be submitted to
the respective Annual Shareholders Meetings are resolved at the meetings of the Boardsof Directors of both companies.
At the Annual Shareholders Meetings of both companies, it is resolved that the twocompanies would become the holding company’s wholly owned subsidiaries by way of
joint share transfer.
The two companies establish the Company by way of a share transfer.
The Company’s common shares are listed on Tokyo Stock Exchange, Inc., Osaka
Securities Exchange Co., Ltd., and Nagoya Stock Exchange, Inc.
The Company merges with and absorbs Matsuzakaya Holdings Co., Ltd.
Daimaru Design & Engineering Co., Ltd. merges with three other companies, Daimaru
Mokko Co., Ltd., Matsuzakaya Seiko Co., Ltd., and Refex Japan, Inc., and changes thecompany name to J. Front Design & Construction Co., Ltd. Dimples’ Co., Ltd. merges
with and absorbs Daimaru Sales Associates Co., Ltd.
Matsuzakaya Co., Ltd. merges with and absorbs Yokohama Matsuzakaya Co., Ltd.,
which ceased its operations on October 26, 2008.
Restaurant Peacock Co., Ltd. merges with and absorbs Shoei Foods Co., Ltd. andchanges the company name to J. Front Foods Co., Ltd.
JFR Service Co., Ltd. (renamed from Matsuzaka Services Co., Ltd. on September 1,2009) merges with and absorbs Daimaru Lease & Service Co., Ltd.
Matsuzakaya Co., Ltd. merges with and absorbs The Daimaru, Inc. and changes thecompany name to Daimaru Matsuzakaya Department Stores Co. Ltd.
J. Front Design & Construction Co., Ltd. merges with and absorbs DHJ Co., Ltd.
The Company establishes JFR Consulting Co. Ltd.
The Daimaru Tomonokai, Inc. merges with and absorbs Matsuzakaya Tomonokai Co.,
Ltd. and changes the company name to Daimaru Matsuzakaya Tomonokai Co., Ltd.
The Daimaru Home Shopping, Inc. takes over part of the direct marketing business split
off from Daimaru Matsuzakaya Department Stores Co. Ltd. and changes the company
name to JFR Online Co. Ltd.
The Company acquires shares of StylingLife Holdings Inc. and makes it an associateaccounted for using the equity method.
Daimaru Kogyo, Ltd. establishes Daimaru Kogyo (Thailand) Co., Ltd.
The Company acquires shares of PARCO Co., Ltd. and makes it an associate accounted
for using the equity method.
The Company establishes JFR PLAZA Inc.
The Company acquires additional shares of PARCO Co., Ltd., making PARCO Co., Ltd.
and its five subsidiaries consolidated subsidiaries of the Company, and also making two
subsidiaries and one associate of PARCO Co., Ltd. associates accounted for using theequity method.
The Company splits off the commissioned sales business operated by Dimples’ Co., Ltd.,and Daimaru Matsuzakaya Sales Associates Co. Ltd., which established the saidbusiness, takes over the business.
On the same day, Dimples’ Co., Ltd. transfers all of its shares in Daimaru Matsuzakaya
Sales Associates Co. Ltd. to Daimaru Matsuzakaya Department Stores Co. Ltd., andDaimaru Matsuzakaya Sales Associates Co. Ltd. becomes a subsidiary of Daimaru
Matsuzakaya Department Stores Co. Ltd.
The Company transfers all shares in Peacock Store Ltd. to Aeon Co., Ltd.
Liquidation of Imabari Daimaru Co., Ltd. is completed.
The Company acquires shares of Forest Co., Ltd. and makes it a consolidated subsidiary.
-7-

Feb. 24, 2014
Aug. 18, 2014
Jan. 7, 2015
Apr. 22, 2015
May 7, 2015
Dec. 17, 2015
Sept. 1, 2016

Mar. 1, 2017
Aug. 31, 2017
Dec. 31, 2017
Feb. 26, 2018

Jul. 2, 2019
Dec. 9, 2019

Mar. 1, 2020Feb. 26, 2021
June 30, 2021
Sept. 1, 2021
Feb. 28, 2022

Liquidation of Central Park Building Co., Ltd. is completed.
Liquidation of Parco Consulting (Suzhou) Co., Ltd. is completed.
Daimaru Kogyo, Ltd. establishes Taiwan Daimaru Kogyo, Ltd.
The Company acquires shares of Senshukai Co., Ltd.
The Company acquires additional shares of Senshukai Co., Ltd. and makes it an associateaccounted for using the equity method.
Daimaru Matsuzakaya Department Stores Co. Ltd. transfers all shares of Hakuseisha Co.,
Ltd. to AEON DELIGHT CO., LTD.
Daimaru Matsuzakaya Department Stores Co. Ltd. merges with and absorbs Daimaru
COM Development Inc.
JFR Service Co. Ltd. merges with and absorbs JFR Office Support Co., Ltd. and JFRConsulting Co. Ltd.
JFR Online Co. Ltd. transfers all its business operations to Feel Life Inc., a wholly
owned subsidiary of Senshukai Co., Ltd.
The Company transfers all shares of Forest Co., Ltd. to EDION Corporation.
Liquidation of JFR PLAZA Inc. is completed.
Senshukai Co., Ltd. is excluded from the scope of associates accounted for using theequity method due to the Company’s agreement upon the purchase of treasury shares by
Senshukai Co., Ltd.
Liquidation of JFR Online Co. Ltd. is completed.
Daimaru Matsuzakaya Department Store Co., Ltd. acquires a part of the preferred sharesof Ginza 6-chome Kaihatsu Tokutei Mokuteki Kaisha (G6TMK) through Ginza 6-chome
Shogyo Godo Kaisha and makes it an associate accounted for using the equity method.
Daimaru Matsuzakaya Department Stores Co. Ltd. merges with and absorbs The
Shimonoseki Daimaru, Inc.
The Company transfers all shares in J. Front Foods Co., Ltd. to Dancin’ Diner co., ltd.
PARCO Co., Ltd. transferred all shares of NEUVE A Co., Ltd. to Libra Invesco Co., Ltd.
Daimaru Matsuzakaya Department Stores Co. Ltd. merged with and absorbed Daimaru
Matsuzakaya Sales Associates Co. Ltd.
The Company removed Dimples’ Co., Ltd. from the scope of consolidation upon transfer
of 90% of its shares to WORLD HOLDINGS CO., LTD.

-8-

3. Description of business
The corporate group, of which the Company is the holding company, consists of 35 companies (including theCompany). Its principal business is the Department Store Business, and its other businesses include the SC
Business, the Developer Business, the Payment and Finance Business, wholesaling, commissioned back-officeservice, parking, leasing, etc.
The Company is a specified listed company. As a result of falling under the category of specified listed company,
the criteria for insignificant material events under the insider trading regulations will be determined based on
consolidated figures.
Description of business, etc.

Names of major Group companies

Number of companies

Department Store Business

Daimaru Matsuzakaya Department Stores Co. Ltd., The
Hakata Daimaru, Inc., and Kochi Daimaru Co., Ltd.

Consolidated subsidiaries: 3

SC Business

PARCO Co., Ltd. and PARCO (SINGAPORE) PTE LTD

Consolidated subsidiaries: 2
Associates: 1

Developer Business

PARCO Co., Ltd., PARCO SPACE SYSTEMS Co., Ltd., J.
Front Design & Construction Co., Ltd., PARCO DigitalMarketing Co., Ltd., and JAPAN RETAIL ADVISORS Co.,
Ltd.

Consolidated subsidiaries: 5
Associates: 4

Payment and FinanceBusiness

JFR Card Co., Ltd.

Consolidated subsidiaries: 1

Wholesale Business

Daimaru Kogyo, Ltd., Daimaru Kogyo International Trading(Shanghai) Co., Ltd., Daimaru Kogyo (Thailand) Co., Ltd., Consolidated subsidiaries: 4
and Taiwan Daimaru Kogyo, Ltd.

Commissioned back-officeservice, real estate leasing,parking and leasing

JFR Service Co. Ltd. and Angel Park Co., Ltd.

Consolidated subsidiaries: 2
Associates: 1

OtherConsumer Product End-Use Research Institute Co., Ltd.,JFR Information Center Co., Ltd., and Daimaru
Matsuzakaya Tomonokai Co., Ltd.

Consolidated subsidiaries: 3
Associates: 2-9-Our business structure is shown below.

Notes:

1.
2.
3.
4.
5.

Companies marked with an asterisk (*) are equity method associates.
In segment information, wholesaling, parking, leasing, etc. are shown together as “Other.” The other businesses are
categorized in accordance with the segments.
PARCO Co., Ltd. transferred all the shares of NEUVE A Co., Ltd. on June 30, 2021.
Daimaru Matsuzakaya Department Stores Co. Ltd. merged with and absorbed Daimaru Matsuzakaya Sales Associates
Co. Ltd. on September 1, 2021.
The Company removed Dimples’ Co., Ltd. from the scope of consolidation upon transfer of 90% of its shares on
February 28, 2022.

- 10 -

4. Overview of subsidiaries and associates
Ratio of voting
rights holding(held)(%)

Address

Capital(Millions ofyen)

Daimaru Matsuzakaya
Department Stores Co. Ltd.
(Notes 3 and 4)

Koto-ku, Tokyo

10,000Department StoreBusiness

100.0

The Hakata Daimaru, Inc.

Chuo-ku, Fukuoka

3,037

Department StoreBusiness

69.9[69.9]

Kochi Daimaru Co., Ltd.

Kochi, Kochi

300

Department StoreBusiness

100.0[100.0]PARCO Co., Ltd.
(Notes 3 and 4)

Toshima-ku, Tokyo

34,367SC Business,
Developer Business

100.0

Name

Major businesses

Relationship(Consolidated subsidiaries)

PARCO (SINGAPORE) PTE
Singapore
LTD

Millions ofSingapore
SC Businessdollars
4

Interlocking of
officers
Lending of funds

Interlocking of
officers
Lending of funds

100.0[100.0]PARCO SPACE SYSTEMS
Co., Ltd.

Shibuya-ku, Tokyo

100

Developer Business

100.0[100.0]J. Front Design &Construction Co., Ltd.

Chuo-ku, Osaka

100

Developer Business

100.0

PARCO Digital Marketing
Co., Ltd.

Shibuya-ku, Tokyo

10

Developer Business

100.0[100.0]JAPAN RETAIL ADVISORS
Shibuya-ku, Tokyo
Co., Ltd.

10

Developer Business

100.0[100.0]JFR Card Co., Ltd.

Takatsuki, Osaka

100

Payment and FinanceBusiness

100.0Interlocking of
officers
Lending of funds

Daimaru Kogyo, Ltd.

Chuo-ku, Osaka

1,800

Other (Wholesale)

100.0Interlocking of
officers

Daimaru Kogyo International
Shanghai, China
Trading (Shanghai) Co., Ltd.

Millions of US
dollars Other (Wholesale)2

100.0[100.0]

Daimaru Kogyo (Thailand)Co., Ltd.

Millions of Thaibaht Other (Wholesale)
202

99.9
[99.9]

Millions of New
Taiwan dollars Other (Wholesale)
60

100.0
[100.0]

Bangkok, Thailand

Taiwan Daimaru Kogyo, Ltd. Taipei, Taiwan

Interlocking of
officers

Consumer Product End-Use
Research Institute Co., Ltd.

Nishi-ku, Osaka

100

Other (Merchandise
test and quality
control)

100.0Interlocking of
officers

Angel Park Co., Ltd.

Naka-ku, Nagoya

400

Other (Parking)

50.2[49.8]

Interlocking of
officers

JFR Service Co. Ltd.

Koto-ku, Tokyo

100

Other (Commissioned
back-office service,
parking and leasing)

100.0Interlocking of
officers
Lending of funds

JFR Information Center Co.,Ltd.

Tennoji-ku, Osaka

10

Other (Information
service)

100.0Interlocking of
officers

Daimaru Matsuzakaya
Tomonokai Co., Ltd.

Chuo-ku, Osaka

100

Other
(Specified prepaid
transaction service)

100.0[100.0]- 11 -

Address

Capital(Millions ofyen)

Major businesses

Ratio of voting
rights holding(held)(%)

Shinsaibashi Kyodo Center
Building, K.K.

Chuo-ku, Osaka

50

Developer Business(Real estate leasing)

50.0[50.0]

StylingLife Holdings Inc.

Shinjuku-ku, Tokyo

100

Other (Generalretailing)

49.0

Developer Business(Services related tothe acquisition of
specified assets andtheir management anddisposal, etc.)

33.3[33.3]

Name

Relationship(Equity method associates)

Ginza 6-chome Kaihatsu
Tokutei Mokuteki Kaisha

Chuo-ku, Tokyo

5,595

HMK LOGI SERVICE Co.,Ltd.

Chuo-ku, Osaka

34

Other (Freighttransportation)

32.4[32.4]

Wakamiya Park Co., Ltd.

Naka-ku, Nagoya

1,063

Other (Parking)

20.9[20.9]

Yaesu shopping mall Co., Ltd. Chuo-ku, Tokyo

100

Developer Business(Real estate leasing
and tenant leasing)

28.3[28.3]

Apparel-web, Inc.

Chuo-ku, Tokyo

100

Developer Business

20.3[20.3]

SAN-A PARCO, Inc.

Ginowan, Okinawa

10

SC Business

49.0[49.0]

Notes:

1.
2.
3.
4.

Interlocking of
officers

The names in the “Major businesses” column are the segment names.
The figures in brackets in the “Ratio of voting rights holding (held)” column indicate the percentage of indirectownership.
Falls under the category of specified subsidiary.
For Daimaru Matsuzakaya Department Stores Co. Ltd. and PARCO Co., Ltd., the ratio of sales revenue (excludinginternal sales revenue among consolidated companies) to consolidated sales revenue exceeds 10%. The main profit andloss information of Daimaru Matsuzakaya Department Stores Co. Ltd. and PARCO Co., Ltd. is as follows:(Millions of yen)
Daimaru Matsuzakaya
Department Stores Co. Ltd.

PARCO Co., Ltd.

(i)

Sales revenue

174,988

57,488(ii)

Profit before tax(3,246)

2,425

(iii)

Profit(2,995)

841(iv)

Total equity

136,672

140,462(v)

Total assets

455,040

417,097- 12 -

5. Information about employees(1) Consolidated companies
As of February 28, 2022
Number of employees(Persons)

Segment name
Department Store Business

2,724[1,324]SC Business

494

[102]

Developer Business

873

[415]

Payment and Finance Business
Other
Corporate (shared)
Total
Notes:

1.
2.

201

[34]

1,159

[668]

138

[16]

5,589

[2,559]The number of employees indicates the number of working employees.
Figures in brackets in the “Number of employees” column (not included in number of employees) represent
dedicated employees and fixed-term employees.

(2) Reporting company
As of February 28, 2022
Number of employees(Persons)
138[16]
Segment name

Average age(Years old)

4.

18.0

7,089,444

Number of employees(Persons)

Total
1.
2.
3.

Average annual salary
(Yen)

46.4

Corporate (shared)
Notes:

Average length of service(Years)

138

[16]

138

[16]

The number of employees indicates the number of working employees.
Average annual salary includes bonuses and surplus wages.
Figures in brackets in the “Number of employees” column (not included in number of employees) represent
dedicated employees and fixed-term employees.
The Company’s employees are seconded from Daimaru Matsuzakaya Department Stores Co. Ltd. and othergroup companies. The average years of service of employees is calculated by aggregating the employee’s
number of years of service at each company.

(3) Status of labor union
The Group includes the J. Front Retailing Group Federation of Labor Union which is a member of UA
ZENSEN.
As the relationship between the Company and the union is favorable and based on mutual trust, there areno significant matters to report.

- 13 -

II. Overview of Business
1. Management policy, management environment, issues to be addressed, etc.
Forward-looking statements in this Annual Securities Report are based on the Company’s management decisions
and forecasts made according to information available as of the filing date of this document (May 27, 2022).
(1) Management policy
Under a holding company structure, the Group will strive to enhance the competitiveness and profitabilityof the Department Store Business, the SC Business and all constituent companies by optimizing andmaking an effective use of management resources including the store network and customer bases of
Daimaru, Matsuzakaya and PARCO as well as responding appropriately to changing times, maximizing
customer satisfaction and operating in the most efficient way.
In addition, with the aim of realizing the Group Vision “Create and Bring to Life ‘New Happiness,’” wewill restructure our business portfolio by allocating resources to areas with greater potential so that it
consists of highly competitive and profitable businesses in a balanced manner.
(2) Management target
On April 13, 2021, the Group formulated the FY2021-FY2023 Medium-term Business Plan.
1. Key performance indicator targets
ROIC (Return on Invested Capital) will be applied as the indicator to manage the capital’s profitability
from this medium-term business plan.
For fiscal 2023, we will aim to achieve consolidated operating profit of ¥40,300 million, profit/equity
attributable to owners of parent (ROE) of 7%, Return on Invested Capital (ROIC) of 5%. In addition, as
sustainability targets, we will aim to achieve a reduction in greenhouse gas (GHG) emissions of 40%
and a ratio of women in management positions of 26%.
2. Financial policy
We will generate operating cash flow of ¥190,000 million or more (including depreciation of right-ofuse assets) over three years, ¥90,000 million of which will be injected into the growth and capital
investments. Until fiscal 2023, investment allocation will be made giving priority to projects that
contribute to profit and the “developer strategy.”
We will reduce interest-bearing debt (excluding lease liabilities) to ¥260,000 million by the end of fiscal
2023.
We will provide shareholder returns on the basis of maintaining a consolidated dividend payout ratio ofat least 30% and also consider the option of purchasing treasury shares as appropriate.
(3) Priority operational and financial issues that the Company should address
For fiscal 2021, which constituted the initial year of the Medium-term Business Plan, whereas ourrecovery in earnings results remained moderate relative to initial estimates amid ongoing proliferation of
COVID-19, we achieved some success with respect to our three key strategies particularly in terms ofdigitalizing customer contact points and prioritizing investing in our flagship stores, developing newcontent, and promoting management structure reforms.
On the other hand, we have been encountering an increasingly uncertain business environment amid
prolonged effects of the pandemic and rising tensions in international affairs, with such factors in turn
giving rise to soaring raw material costs and supply-side constraints. In particular, this situation calls for
us to take action that includes strengthening our response to risk such as “changes in consumer behavior
due to COVID-19” and “decline of existing business models,” pursuing business model reforms withrespect to our existing businesses, and furthermore heightening our ability to execute looking toward
enabling the Group to achieve sustainable growth.
Meanwhile, corporations are intensively urged to tackle and address issues regarding the environment,
society, and human rights through their business activities, in addition to achieving economic value, amida scenario of drastically changing social structures and consumption patterns.
The Company regards such structural changes as opportunities for corporate transformation andaccordingly strives to increase its medium- to long-term corporate value and enable its stakeholders toachieve the notion of a “Well-Being Life.” This involves seeking business growth and creating business- 14 -

opportunities by promoting sustainability management, in addition to our persisting efforts in areas that
include reducing environmental burden and seeking solutions to social challenges.



Accelerating implementation of key strategies and management structure reforms looking toward“complete recovery” and “regrowth”
During fiscal 2022, the second year of the Medium-term Business Plan, we seek to take a solid step
toward achieving complete recovery. To such ends, we will steadily derive results from investment
concentrated toward our key strategies and initiatives in our existing businesses such as the Department
Store and SC businesses, while striving to increase profitability by promoting management structurereforms in part by reducing fixed costs.
Meanwhile, we will set a clear trajectory toward “regrowth” with our sights set on the year 2030 amid
heightening importance of business portfolio transformation due to changes in the businessenvironment. This will involve seeking growth in the non-retail realm particularly in our Developer
Business and Payment and Finance Business by making the most of the Group’s management
resources. Beginning this fiscal year, we have sought to strengthen our framework for formulating andpromoting management strategies that include the “business portfolio transformation,” “Group
Corporate Real Estate (CRE),” and “Group digital” strategies under our holding company organization.
In so doing, we will carry out initiatives from the perspective of pursuing overall optimization andsynergies. This will involve picking up the pace in realizing our strategic aims in terms of extending
each of the key strategies by strengthening our alliances with the respective operating companies andother companies, considering new fields of business from a creating shared value (CSV) perspective,
and concentrating allocation of management resources.

(1) Accelerating implementation of the three key strategies and management structure reforms
1) Real x digital strategy
We will transform the business model into one that provides new experience value through the useof digital technologies originating from brick-and-mortar stores and human resources. We will work
to increase the attractiveness of our stores through investment concentrated toward the flagshipstores of the Department Store and SC businesses and expand business using online platforms, inorder to achieve quick recovery of earnings under the Medium-term Business Plan.
Moreover, in step with promoting strategies in our respective businesses, we will engage in an“offense-oriented digital strategy” drawing on alliances with our respective businesses. This will
involve formulating a Group customer strategy enlisting integration of our customer database andhastening mutual exchange of customers in our key areas.
(i) Increase the attractiveness of storesWe will take steps to establish competitive advantages in each of our business locations byconcentrating on enhancing key categories including luxury items, art, and watches centeredon our flagship department stores. Meanwhile, we will more swiftly address market changes
that have become increasingly apparent due to the COVID-19 pandemic, in part bystreamlining sales floors that handle practical merchandise.

We will promote reforms of the SC business model through initiatives that involve
undertaking investment concentrated toward our key stores such as Ikebukuro PARCO andNagoya PARCO, engaging in merchandising development to replace the conventional fashionzone format, and bringing in new tenants to address market changes in each location.
- 15 -



We will seek to strengthen alliances through initiatives that include having our department
stores and PARCO locations hold collaborative events in the Shinsaibashi and Nagoya areas.

(ii) Expand online businessWe will strengthen our original OMO business originating from brick-and-mortar stores. This
will involve having our department stores set up “DEPACO” online stores handling cosmetics
integrated with stores and enhance e-commerce products, and having PARCO locations
renovate online stores and facilitate mutual exchange of customers between physical storesand online platforms in partnership with our tenants.

2) Prime life strategy
We will strengthen our proposals for “consumers who enjoy fulfilling, sustainable lifestyles,” whichis the aim of our prime life strategy. Under the Medium-term Business Plan, we will engage ininitiatives for developing new products and services and prompting evolution of communication
with our customers using digital technologies, largely based on department store gaisho (out-of-store
sales).
At the same time, we will take steps to realize the medium- to long-term strategies of the Payment
and Finance Business, positioned as a core business for achieving “regrowth.”(i) Develop new products and services

Our department stores will engage in efforts that involve deepening our mainstay categories,
identifying new content for serving the affluent market segment, and enhancing loyalty
programs. Meanwhile, the Payment and Finance Business will work to upgrade its insurancerelated financial products through alliances with other companies.

(ii) Evolve communication with customers

Our department stores will develop more extensive customer relationship management(CRM) practices. This will involve prompting evolution of gaisho activities using digitaltechnologies in part by enlisting our loyal customer-exclusive website and online customer
services, and identifying potential customers using data analysis. In addition, the Payment and
Finance Business will strengthen its in-person and online proposals in alignment withcustomers’ life stages.

(iii) Achieve medium- to long-term strategies of the Payment and Finance BusinessWe will work to achieve strategies of the Payment and Finance Business from a medium- tolong-term perspective and will strengthen its business foundations through efforts that involve
building Group payment infrastructure, attaining geographic expansion with respect to the
network of affiliated stores, and developing services that provide substantial added value.

3) Developer strategy
Under our developer strategy, which is positioned as a driver of growth toward achieving“regrowth,” we will carry forward initiatives of fiscal 2021 in terms of promoting development
projects in the Group’s key areas and building foundations for business growth.
In addition, we will formulate and promote medium- to long-term business strategies anddevelopment plans with our sights set on the year 2030 by strengthening alliances with the holding
company and operating companies.
- 16 -

(i) Promote area-specific development projects


We will make effective use of our existing properties, continue to promote development
projects in Nagoya’s Sakae area, and promote development plans in the Group’s key
locations such as Osaka’s Shinsaibashi area.

(ii) Strengthen business foundations


We will work to strengthen our business foundations by undertaking asset replacement,
organizing and embarking on management of a private subscription fund, and establishing aconsignment framework for the asset management business.

(iii) Formulate and promote medium- to long-term business strategies and development plansWe will help create bustling towns underpinned by coexistence with local communities while
formulating and promoting medium- to long-term business strategies and development plans
with a focus on centrally managing and making sophisticated use of the Group’s asset
holdings.

4) Management structure reforms
We will make steady progress in implementing our three key strategies and management structurereforms consisting of our most important measures for achieving “complete recovery” in fiscal
2023. Beginning in fiscal 2022, we will develop a system for enabling us to engage in initiatives
focused on tracking progress of each of priority measures and promoting such measures.
(i) Reduce fixed costs (¥10,000 million lower than in fiscal 2019)

In addition to results of our organizational and personnel structure reforms in the current
fiscal year, we will review our cost structure through efforts that involve reorganizing theGroup’s offices and extending Group-wide purchasing of materials and supplies.

(ii) Increase management efficiency and asset efficiency

We will improve management efficiency by narrowing our business foundations based on
future prospects and growth potential. We will also increase asset efficiency by identifying
non-business assets.

Strengthen management foundations to support achievement of medium- to long-term growth
We will work to strengthen management foundations to support achievement of medium- to long-term
growth. In particular, we will enhance our human resource strategy largely by realizing sustainability
management and undertaking investment with priority on human resources who create new value, amida highly uncertain business environment.

1) Group human resource strategy
We will bolster our investment in human capital through initiatives that include strengthening
recruitment and developing skills of highly specialized professionals based on our business portfoliotransformation and key strategies, early-stage identification and development of management
personnel who will serve as future leaders, encouraging active participation of women, andpromoting health and productivity management. In addition, we will furthermore assign each andevery employee to positions aligned with their commitment, motivation, and capabilities, and will
- 17 -

facilitate personnel interaction on a Group-wide basis. These initiatives will underpin efforts thatinvolve actively embracing diversity, giving rise to a corporate culture unencumbered bystereotypes, and serving as a “Human Resource Development Company” that seeks to enable
individuals and organizations to achieve sustainable growth.

2) Group systems strategy
We will provide support for promoting digital strategies in each of our businesses while seeking tostandardize and streamline our administrative systems in part by rebuilding our backbone systems toincrease the sophistication of management and administration from the perspective of overall
optimization. In addition, we will promote information technology governance by ensuring
information security in our maintenance of next-generation networks and cloud computing
environments, enhancing measures for business continuity, and engaging in centralized managementof investment planning and development processes.

3) Group financial strategy
We will strive to improve our financial standing and create free cash flows by taking a flexible
approach that involves reducing interest-bearing debt and selling non-business assets, while
monitoring effects of the spread of COVID-19 on our operations. In addition, we will seek tosteadily transform our business portfolio by developing more sophisticated management andadministration, which will involve redoubling our efforts to improve our rate of return on invested
capital (ROIC) in each of our businesses.

4) Strengthening corporate governance
We will develop more sophisticated corporate governance practices by speeding up management
decision-making and execution toward achieving medium- and long-term growth, and by further
strengthening the oversight function of the Board of Directors separately from business execution.

- 18 -

2. Business risks
The matters recorded in the annual securities report concerning the overview of business, financial information,etc., include following key risks that are recognized by the management as having the potential to exert material
impact on the financial position, operating results, and cash flows of consolidated companies.
Forward-looking statements in this Annual Securities Report represent the judgement of the Group as of thefiling date of this document (May 27, 2022).

(1) Approach and system for risk management
・ Risk Management
The Group defines risk as “uncertainties that have both potential positive and negative sides that could
have an impact on the achievement of targets by a company’s management.” The Company has
positioned risk management as “activity that increases corporate value by managing risks by reasonable
and optimal methods from a company-wide perspective” to achieve sustainable corporate growth byaddressing the positive side and the negative side of risk properly.

・ Risk management system
The Company has established the Risk Management Committee, which is chaired by the President andRepresentative Executive Officer and comprises Executive Officers and others, as an advisory body to
the President and Representative Executive Officer. The committee discusses important matters,
including risk identification and evaluation, and determination of risks to be reflected in strategies, andutilizes risk management for management decision-making. The committee also reports details of its
deliberations to the Board of Directors in a timely manner.
The committee has established a secretariat headed by an officer in charge of risk management. The
secretariat shares important decisions of the committee with operating subsidiaries, and promotes
enterprise risk management (ERM). Moreover, by positioning risk as the starting point of strategy andlinking it to strategy, we are striving to make risk management contributes to corporate value increase.
Furthermore, in order to effectively perform risk management, we have established the following threelines.
・ First line (Operating divisions such as operating subsidiaries): These divisions identify risks andtake the necessary measures on their own.
・ Second line (The holding company’s divisions): Each division provides support, guidance andmonitoring regarding risk management from a perspective which is independent of the operating
divisions.
・ Third line (The Internal Audit Division): This division oversees the validity of the risk management
functions and the internal control system from a perspective which is independent of the operating
divisions and each division of a holding company.

- 19 -

Risk Management System(2) Risk management process
The Group promotes risk management through the following processes. Specifically, we are striving toensure that risks of high importance to the Group are not overlooked, under the external and internal
environmental analysis, and based on the recognition of Directors, the management team, and the persons
responsible for practical operation.
Over the medium-term, we have positioned “corporate risks” as having extremely high importance for theGroup’s management, and have used these as starting points for the Group Medium-term Business Plan.
Furthermore, the risks for the fiscal year identified from “corporate risks” are summarized in the Group risk
list, evaluated using a risk map, then ranked by priority before implementing countermeasures. For“corporate risks” and the “JFR Group Risk List,” changes in the environment surrounding risks and progressof measures are monitored semiannually, and the Risk Management Committee discusses the matters andthen reports their contents to the Board of Directors.

- 20 -

The chart below shows “corporate risks” which the Group has positioned as the most important risks that willaffect growth and survival of the Group over the medium-to-long term.
Among these, “1. Advanced sustainability management,” “2. Decline of existing business models,” “3.
Response to increasingly accelerated digitalization,” and “4. Changes in consumer behavior after COVID19” could potentially have an extremely large impact on our Group management, and have therefore been
positioned as risks to be addressed with the highest priority in the Medium-term Business Plan.

Risks that have an extremely large impact and are being addressed with the highest priority- 21 -

“Corporate risks” other than the above risks(3) Recognition of recent environmental changes and risks
After the unprecedented impact of COVID-19 on the Group’s management, as replacement by Omicron
varieties has progressed, the number of newly infected people remains at a high level at the moment. With ahigh probability of the disease’s spreading intermittently in the future, the situation remains unpredictable.
However, the Company believes that the impact of the spread of COVID-19 will diminish gradually due
largely to experience in infection control to date, the progress of third vaccination, and the widespread of useof pills.
In the meantime, Russia’s invasion of Ukraine has been affecting the Group in different ways. Escalating
prices of fuels and crops attributed to this invasion has been also spreading to other products, causing higher
costs of living worldwide. In response to these price increases, the U.S. has started to raise the policy interest
rate, and Europe is also proceeding with the preparations for interest rate increase. However, there is apossibility that such increases in interest rates may cause economic recession and decline in stock prices,
depending on their extent or speed.
On the other hand, Japan has kept low interest rates for economic recovery, and this has contributed a sharp
depreciation of the yen. This yen depreciation is adding fuel to high costs of living and certainly dampening
consumer sentiment. If stock prices decline further worldwide, stock prices in Japan will also follow thetrend and consumer spending will slow down further, also affecting operating results of the Group
profoundly.
Moreover, other than those above, the Group has also been affected in many aspects such as delay in delivery
and hiking of prices due to shortage of mineral resources and semiconductors, and increase in transportation
costs and delay in arrival of goods in association with detours to avoid courses over Russia.
Thus, business activities will continue to be placed under pressure amid an uncertain future and an extremely
adverse management environment this year.
- 22 -

The impact of COVID-19 is further accelerating changes in consumer values, consumer behavior, what isrequired of the retail business, etc. The establishment of remote work and people’s lifestyles, and even theway that cities function are all changing dramatically, and the Department Store Business and the SC
Business, which are core businesses of the Group, cannot avoid evolution to a new business model.
As one of the relevant measures, the Group is promoting the “real x digital strategy.” While making
investment with priority in areas such as luxury items, art, and watches in “real,” the Group will develop
diverse channels fusing with physical channels by expanding businesses that utilize online spaces in “digital”
to provide truly valuable products in a timely and appropriate manner.
In addition, we once again recognized during the COVID-19 pandemic that initiatives are not supported
unless they are sustainable. Consumers’ awareness of a “sustainable community and society” is increasing
due to the COVID-19 pandemic, and many companies are also trying to redefine their existence inconformity with such awareness. Fortunately, the Group has the corporate credos leading to sustainable
management “Service before profit” and “Abjure all evil and practice all good,” which have been kept for
300 to 400 years, and will continue to move ahead steadily towards sustainable growth going forward.
The corporate risks revised based on the environmental changes described above are considered risks that
could have an impact on your investment and other decisions as of the filing date of the annual securities
report. In line with the Group’s risk definition (uncertainties that have both potential positive and negativesides that could have an impact on the achievement of targets by a company’s management), we present ourrisk recognition and countermeasures on the following pages.

- 23 -

1

Advanced sustainability management
ImpactVery severe

Outlook for the future (*)

Amid increasing uncertainty about the environment surrounding companies due to global
warming, ocean pollution, prolonged COVID-19 pandemic, issues over human rights insupply chains, etc., initiatives for sustainability management gain more and more importance
The Company’s
and are positioned as one of the highest priorities. We believes that stakeholders’ expectations
risk recognition
are for how the Company contributes to realization of a sustainable society as a corporation,and the Company cannot even achieve its own sustainable growth without initiatives that meetthese expectations.
Negative side • Defection of stakeholders, and lower rating and brand power
Positive side
• Sustainable growth, and improvement of the Group’s presence
The Group has positioned the goal of the Group Vision “Create and Bring to Life ‘New
Happiness’ as “Well-Being Life” of stakeholders. To realize this goal, we have identified sevenmateriality issues (important issues)* and are working on corresponding measures.
* “Realization of decarbonized society,” “Promotion of circular economy,” “Management of
the entire supply chain,” “Realization of customers’ healthy/safe/secure life,” “Coexistencewith local communities,” “Promotion of diversity & inclusion,” and “Realization of work-life
integration”
Needless to say, as for environmental issues and human rights issues, we need to proactively
work to solve these issues as our basic corporate attitude.
MeasuresOn the other hand, it is also possible to create both social and economic value at the same timeby finding business chances in the above materiality issues, including resolution of such issues.
Initiatives for which such a value creation story in CSV is clarified are important.
In the fiscal year under review, we launched the fashion subscription business (fixed-fee
fashion rental service) that is a circular economy (recycling-oriented economy) model, andpromoted development of new-concept medical wellness malls that seamlessly provide a rangeof services from medical treatment to the sales of goods and services as part of the realizationof customers’ healthy/safe/secure life. Going forward, we will continue to discover potential
needs to solve social issues and create added value in cooperation with many customers, local
communities, suppliers, etc. who the Group meet through its businesses.
We will continuously seek our own value creation stories and realize Well-Being Life of
stakeholders.

(*) Prospect of changes in risks during the Medium-term Business Plan period, which takes into account the
impact on the Group, relevant measures, and others.

- 24 -

2

Decline of existing business models
ImpactVery severe

Outlook for the future

Each business of the Group is centered on in-person business models. In-person businesses
have faced significant restrictions during the COVID-19 pandemic. Although COVID-19 ischanging from an invisible threat to what we coexist with, many changes brought to
The Company’s consumers, supplies, etc. during the pandemic have been becoming a new normal, and keeping
risk recognition traditional business models will inevitably cause decline of existing businesses.
As particularly value and role of places of retail stores, which are the Group’s main force, arechanging at an increasingly accelerating pace, we believe that changing business models isnecessary.
Negative side • Decreased vitality of the entire Group due to weak performance of large-scale store-based
retail business
Positive side
• Regrowth by radical change of the business model of large-scale store-based retail businessIn response to the environmental changes leading to decline of existing business models, theGroup is promoting its efforts in two directions.
One of them is digitalizing customer contact points. We strive to overcome weakness of
traditional in-person businesses by having customers and sales staff connected in digital which
is not constrained by place and time, and offering similar value-added services to physicalstores. In addition, we analyze data on behaviors more than purchase, which is obtained
through digital contact points to improve accuracy of marketing.
Furthermore, to meet customer needs to freely shop any time they choose, we are improving
UX (experience value) online and strengthening OMO (merging physical stores with online).

Measures

Another one is reviewing the role of stores. Large-scale stores in city centers and suburban
areas enable us to provide various values including encounter with real experience andsomething new, and connections with people, other than sales of goods. In the fiscal year underreview, we developed sales floors that enlist integration of direct-to-consumer brands (where
creators and manufacturers deal directly with consumers). We have continued to enhance themedia function for communicating various information by taking advantage of favorable
locations, the gallery function for introducing high-value goods and services, entertainment
functions, and solutions functions, among others, and strive to realize increase in theattractiveness of stores and diversification of revenue.
While the market is also increasingly fragmented in retail functions, the mainstay, we areworking to develop sales floors that meet diverse consumer needs in cooperation with
suppliers.
We will ensure a trajectory toward regrowth of existing businesses by promoting these changes
at a speed on par with the environmental changes.

- 25 -

3

Response to increasingly accelerated digitalization
ImpactVery severe

Outlook for the future

Changes in consumer behavior due to digital shift such as progress in promotion of ecommerce have increased the needs for changes from businesses that rely on traditional
The Company’s physical stores and establishment of business models in new business fields.
risk recognition We think that the way and speed of responding to digitalization affect growth of the Group as awhole and thus are important, and at the same time, also are vital in improvement inproductivity of operations.
Negative side • Sluggish growth of the entire Group• Declining competitiveness due to delay in digitalization
Positive side
• Changing the business models through the use of digitalization• More efficient operations, and going paperless
A response to digitalization is inevitable for growth, and we are proceeding to transform bothour business models and our operations.
In changing the business models, we worked to maximize customer experience value throughopening of stores at virtual markets of department stores and OMO, diversify payment
methods, and sophisticate customer relationship management (CRM).
Going forward, there is a possibility that WEB3.0, metaverse, NFT (*1) and others will
drastically change consumers’ lifestyles.
The Company newly established the “Group Digital Unit” and the “Group System Unit” in thefiscal year under review.

Measures

The Group Digital Unit will promote an offense-oriented digital strategy including increase inrevenue and development of an environment for integrated database through the use of digital,and consideration of building new business models. The Group System Unit will work to
improve and advance system infrastructure and promote swift business development, the stable
operation of information system and the realization of solid security. In line with theorganizational reform, securing and training of digital human resources will also be reinforced
further.
While such efforts include the expansion of teleworking and online meetings, and thedigitalization of business documents and seals, the efforts have helped improve productivity
and flexibility in work styles and contribute to the “realization of work-life integration.”(*1) WEB3.0: A new decentralized web world that is about to be realized mainly by blockchain technologies.
Metaverse: A word coined from “meta (transcending)” and “universe.” All service
products that enable virtual spaces and communications there.
NFT: Non-Fungible-Token. A technology that proves uniqueness through the use ofblock chain technologies.

- 26 -

4

Changes in consumer behavior after COVID-19
ImpactVery severe

Outlook for the future

Consumer values and consumer behavior change with the times. Many of changes occurring in
the wake of COVID-19 are expected to be entrenched even after COVID-19. Among others,
we believe that the value of putting more emphasis on “what one wants to be” than on others’
The Company’s eyes and consumer behavior that gives importance on contributing to social value will be arisk recognition sweeping trend in the future.
The Group operates businesses that handle a diverse range of products and services, whichmean it is important to pay careful attention to direction of consumption after COVID-19 andfind out how to adapt to such consumption to operate businesses.
Negative side • Defection of customers due to failure to meet consumer needs
Positive side
• New market creation
The Group is considering businesses that respond to rise of the value of putting emphasis on“what one wants to be.” As an example, focusing on art and cosmetics that create affluence andhappiness from both inside and outside, the Group increases added value in combination withpower of “people,” which is the Group’s property, and provides such value both throughphysical stores and online.

Measures

To respond to the consumer behavior that gives importance on contributing to social value, we
focus on the development of products and services based on the theme of “sustainable.”
Specifically, we are promoting the establishment of businesses in the circular economy model,
recycling campaigns, and waste reduction as attention to the environment, and the discovery
and introduction of goods and services in local communities and support of local companies
through crowd-funding as contribution to local communities.
We are reducing commodities that are difficult to be differentiated and for which consumer
behavior is done based on price and availability, and promoting replacement of them with
contents that provide new added value.
Beyond our present efforts, we will keep abreast of changes in consumer behavior by using
internal data and other means, and create new markets.

- 27 -Urban decentralization (Rebalancing between urban and rural areas)
5

Outlook for the
futureImpact: Severe

・ Lifestyle changes such as remote working and working close to home have become
entrenched, eroding the relative advantage of city centers as places of consumption. On theother hand, rural centers and suburbs are becoming more active.
Risk
recognition

・ However, our analysis is that central city real estate demand will continue to be firm, as the
expected yield from central city offices and retail businesses has been stable recently, andoffice lease fees are on a long-term recovery trend, among other factors.
・ The Group’s real estate holdings are dispersed throughout Japan, and therefore the Group
recognizes that rebalancing between urban and rural areas is an important risk to be monitored
constantly its business operations.
・ In March 2022, the Group established the CRE (Corporate Real Estate) Planning Division toestablish strategies for the entire Group’s real estate development and real estate holdings, andto maximize the value of real estate holdings. Specifically, the Division will draft plans for theacquisition, disposal, and sale of the real estate holdings of each Group company, constructs
new property development schemes, and so forth, and realize the developer strategy of theGroup.

Measures・ In Japan’s major cities of Tokyo, Nagoya, Osaka, Kobe, Kyoto, Fukuoka, and Sapporo, theGroup has already achieved certain results in store real estate in prime locations, mainly indevelopment of large-scale commercial facilities. Among these, we have positioned
Shinsaibashi, Nagoya, and Fukuoka as key areas where department stores and PARCO areadjacent. In these areas, we are promoting the redevelopment of complexes, aiming to co-exist
with local communities, propose diverse urban lifestyles, and develop attractive local areas.

Accelerated income polarization
6

Outlook for the
futureImpact: Severe・ Income polarization is advancing steadily. The impacts of high prices caused by the COVID19 pandemic and Russia’s invasion of Ukraine have been a shock to the middle class.
Risk
・ On the other hand, the potential purchasing power of the affluent class remains at a high level.
recognition
The net worth of the affluent class is expected to continue increasing, and the Group
recognizes that polarization will continue in the absence of government policies to correct the
disparity.
・ Middle-class consumption behavior has become severe, making it even more difficult tocapture demand. The Group will therefore review the appropriate scale for mass produced
mass-market products and services and segment the market to provide competitive products.

Measures・ On the other hand, with an eye on the expanding affluent market segment, we will strengthen
our proposals for “consumers who enjoy fulfilling, sustainable lifestyles,” which is the aim ofour prime life strategy. Specifically, at brick-and-mortar stores, we have strengthened
categories in high demand, such as luxury and art, and established exclusive lounges; while atonline stores, we have been working to provide a special customer experience and concierge
service, and to expand our range of scarce merchandise.
・ In addition, we are developing new affluent markets by providing content that goes beyond theretail domain, such as insurance and financial products, and high-class residences.

- 28 -

Changes in customers, particularly low birthrate / longevity
7

Outlook for the
futureImpact: Severe

・ In 2021, the number of births reached a new record low, and the trend of a falling birthrate andaging population is continuing. Since the number of weddings in Japan is also decreasing due
to the COVID-19 pandemic, the decline in birthrate is expected to continue.
Risk
recognition

On the other hand, advances in medical technology and increased health consciousness are
expected to drive further increases in longevity and extend healthy life.
・ These population trends are deeply connected with consumption, and they are always animportant risk in the Group’s strategy.
・ As the market for children also polarizes in response to the falling birthrate and income
polarization, the Group are concentrating its response on the high quality children’s appareland accessory market, and on the education business. As part of this, the Group entered theeducation business with a special focus on English language education.

Measures・ On the other hand, as the “life shift (transition to an era of 100-year lifespans) continues, themarket of seniors who enjoy economic power is increasing. For senior gaisho customers, weare enhancing convenience by having online staff work closely with them to introduce and sell
products.
・ In addition, we will provide opportunities for customers to visit brick-and-mortar storesthrough both tangible and intangible offerings, such as strengthening categories of highinterest to seniors, like art, culture, and wellness, and introducing libraries and aquariums thatcan be enjoyed by all generations in a family. Senior customers are one of the Group’s
strengths, and we are committed to supporting them in achieving “Well-Being Life” going
forward.

Uncertainty about non-Japanese market
8

Outlook for the
futureImpact: Severe

Risk
recognition

・ Relaxation of border entry restrictions is proceeding gradually, and there is concern that there
will be no visible change in inbound tourism until the end of the fiscal year. In China, drastic
countermeasures against the spread of COVID-19 are being taken, and an economic slowdown
is apparent, while economic growth is also slowing in East Asian countries.
・ On the other hand, demand among foreigners for tourism in Japan and Japanese products isfirm, and human traffic and the economy are expected to recover, while the market forforeigners is also expected to return to its previous level.
・ It will take considerable time for inbound tourism consumption to recover. As consumption
patterns change, bulk purchases of cosmetics and so forth are also expected to decrease.

Measures・ On the other hand, trust in Japanese product quality and brands is high, and with the tailwind
provided by the weak yen, we believe that we can stimulate consumption by accurately
responding to needs. To enable us to approach consumers without delay as human traffic
recovers, we will gather information and we are also preparing cooperation with business
partners and sales promotion strategies.
・ Furthermore, we are also working to develop Japanese content by strengthening e-commerce
and live commerce in the Asian region and so forth.

- 29 -

Accelerated reorganization and M&A beyond industry boundaries
9

Outlook for the
futureImpact: Severe

・ M&A in Japan are increasing both in number and in value, and the retail sector is also seeing
increased activity in M&As across industry boundaries. Factors behind this trend include anincreasing need for listed companies to select and concentrate their businesses, an increase inbusiness succession needs due to aging of business owners in non-listed companies, and an
environment conducive to financing due to fiscal easing.

Riskrecognition ・ Going forward, we believe that M&As will increase even more as the economic impact of
COVID-19 begins to subside.

・ As customer behavior and values change dramatically, M&As are certainly becoming morenecessary and important, and we recognize this a domain that we should focus on from theperspectives of both offense and defense.
・ In the Group overall, we will proceed to select our businesses and optimize the allocation ofmanagement resources in terms of growth and capital efficiency. This will increase thecompetitive advantage and capital efficiency of each business, and ultimately the corporate
value of the entire Group, and serve as a preparation against hostile takeovers.
Measures・ On the other hand, in our offensive strategy, we have established the Business Portfolio
Transformation Promotion Division, which will examine and explore new businesses to serveas the next pillar after the retail, developer, and finance businesses, and support the businesscreation and development of the operating companies that are in charge of these businesses.
・ M&As are an important option for optimizing the Group’s business portfolio and increasing
the freedom of management, and we will give wide-ranging consideration to the optimal
format, including investment and business alliances with target companies.

- 30 -

Frequent natural disasters / epidemics
10

Outlook for the
futureImpact: Very severe・ As economic globalization and the flow of people between countries become the norm, it
seems likely that a COVID-19 or a similar pandemic could occur in the near future.
・ The risk of earthquakes is increasing, including an upward revision in January 2022 of theprobability of an earthquake occurring in the Nankai Trough. Due to global warming, natural
disasters such as typhoons and torrential rains have been increasing in frequency and scale of
Riskdamage year by year.
recognition
・ If the sudden materialization of such risks accompanied by a rapid deterioration in businessresults necessitated the impairment of non-current liabilities or a write-down of deferred tax
assets, there is an accounting and tax risk that could have a further negative impact on the
Company’s operating results and financial position.
・ Based on an analysis of our response to COVID-19, the company has updated its “NewInfectious Disease Response Manual,” which sets out the emergency response for ensuring thesafety of human life and minimizing the impact on business in the event that a new infectious
disease occurs in the future, as well as matters relating to the preparation of systems during
normal times.
・ Furthermore, we will monitor infection trends and if signs of spreading appear, we will
analyze the impact according to multiple scenarios and respond dynamically.
Measures・ To prepare against natural disasters that threaten business continuity, we will strengthen oursystems from a perspective of continuing key operations (funding and payment operations)and securing important infrastructure (systems, etc.). Moreover, we have been continuously
implementing BCP training for rapidly recovering from a disaster and restarting operations.
・ Impairment of non-current assets, which is an accounting and taxation risk, is based on ourbusiness plan for estimation of future cash flows, and valuation of the recoverability ofdeferred tax assets is based on our business plan for estimating future taxable income.
Therefore, we revise our plan as necessary to maintain its accuracy.

- 31 -

Increasing importance of information security
11

Outlook for the
futureImpact: Severe

・ With the spread in remote work and the use of cloud systems, cyberattacks and unauthorized
system access targeting important corporate information are on the rise around the world, andmethods of attack are growing more sophisticated. Furthermore, with rising awareness of
Risk
privacy protection, the introduction of more robust systems and system security measures arerecognition
essential for the use of customer data.
・ The Group recognizes that information security is becoming more important and considers it ahigh priority risk.
・ In March 2022, the Company established the Group System Unit, to upgrade and improve theGroup’s overall system infrastructure and realize safe operation of information systems andhighly robust security. Recent incidents are becoming more diverse and complex year by year,
and we believe that further initiatives are needed in both hard and soft measures.

Measures・ In terms of hard aspects, we are phasing in security products and monitoring services that can
detect suspicious behavior on a terminal and respond rapidly when an incident occurs. We alsouse multi-factor authentication for logging on to the system, enabling us to restrict devices thatcan connect and prevent unauthorized access due to password leaks and so forth.
・ In terms of the soft aspects, considering recent changes in IT usage environment, we willrevamp our Group security guidelines. Moreover, we are working to increase the level ofliteracy among all employees by using e-learning and conducting targeted attack email training
based on information about the latest incidents.

Increasing importance of financing management
12

Outlook for the
futureImpact: Severe

Risk
recognition

Measures・ Among the Bank of Japan’s financial measures for COVID-19, policies for large corporations
have now ended, and there is concern over a rise in interest rates for procuring funds.
Furthermore, high prices caused by the Ukraine crisis will also feed into interest rate rises overthe medium to long term, and the environment for fund procurement has changed.
・ As uncertainty due to COVID-19 is gradually dispelled, the need to suddenly procure funds
has decreased. However, in fund procurement management the level of impact is also asignificant risk for building a foundation for the overall growth of the Group.
・ As a response to COVID-19, we have held higher levels of cash on hand than usual. However,the need for this is diminishing. As interest is also expected to increase, cash on hand andinterest-bearing debt will be right-sized, paying adequate attention to stability, including
infection trends. In addition, we will support the promotion of sustainability management by
diversifying fund procurement, including giving consideration to financing by ESG bonds,
such as sustainability bonds, and ESG loans.
・ Moreover, we will look at strengthening asset finance using the Group’s assets, such as realestate and credit receivables to provide lateral support for progress on our growth strategy.

- 32 -

Need for cost structure that can respond to environmental changes
13

Outlook for the
futureImpact: Very severe

Risk
recognition

・ While the potential for stores to be subjected to restrictions such as government requests tosuspend operations is receding, new environmental changes are impacting the Group’s
performance, such as high prices for raw materials and commodities due to the Ukraine crisis
and a global economic slow-down.
・ Lowering the break-even point and transforming into a structure that can cope withenvironmental changes is an extremely important risk that will dictate the success or failure of
our response, because it will consolidate our business base and set us on path to regrowth.
・ The Group has established a dedicated department and promoted structural reforms based on
the two pillars of “cost reduction by business model reform” and “narrowing down businessbase.” From March 2022, we are promoting reforms that encourage each department
responsible for operations to demonstrate its expertise and increase speed.

Measures・ With regard to cost reduction, we are taking steps such as reorganizing offices, reviewing theoperation design and the composition of required staff in each business, and strengthening thestructure for managing expenses across the Group.
・ To narrow down the business base, we have sold off non-operating assets and transferred theshares of consolidated subsidiaries that are expected to see declining synergies. Moreover, inMarch 2022, we established the Business Portfolio Transformation Promotion Division, andwe will promote business portfolio optimization, also looking at acquisitions through M&As
and alliances to strengthen the business.

- 33 -

Work styles in new normal era, progress of HR/organization reforms
14

Outlook for the
futureImpact: Severe

Risk
recognition

・ The successful execution of the Group’s management strategies is contingent upon securing
appropriate human resources for the strategy. In securing human resources, we must be
responsive to changes that have been accelerated by the COVID-19 pandemic, such as hybrid
workstyles combining telework and commuting to the office, and increasing priority on family
and private time.
・ Furthermore, it is also important to build an organization that enables human resources to fully
realize their potential, and the advance of human resource and organizational reforms is a riskthat is deeply connected with corporate management going forward.
・ To adapt to changes in business strategy, the Company is working to visualize its humanresource portfolio, based on “the principle of human resource strengths,” which is the standard
that we use for the Company’s human resource evaluation. Based on this, we strive tostrengthen human capital by promoting human resource development through programs thatare recurrent (cultivating awareness of life-long education) and re-skilling (acquiring the skills
needed for work), as well as aggressively recruiting mid-career personnel for highly
specialized areas

Measures・ When securing human resources, we will give weight to increasing productivity byimplementing personnel measures that can respond flexibly to values that emphasize work-lifebalance and changes in life stage.
・ In our organizational reforms, we have made Diversity & Inclusion a key theme, starting up a
project headed by the president for promoting active roles for women, and initiating activities
with a KPI of increasing the ratio of women in management. We are also aiming to nurture
young human resources by providing opportunities to have dialogue with the president, having
them participate in projects that play a part in our growth strategy, and so forth.

- 34 -

List of Group “corporate risks”
Item

1

Advancedsustainability
management

Strategy risk

CateNo.
gory

Outlook
Impact for the
future (*)

Negative side

Positive side

Measures・ Clarifying our value creation story for
simultaneously generating social andeconomic value
・ Realizing “Well-Being Life” forstakeholders

Verysevere・ Defection of・ Sustainable growth, andstakeholders, and lower
improvement of therating and brand power
Group’s presence

Verysevere・ Digitalizing customer touch points～Providing the same added value as・ Decreased vitality of thestores and increasing marketing・ Regrowth by radical
entire Group due toprecisionchange of the businessweak performance ofmodel of large-scale store- ・ Revising the role of storeslarge-scale store-based
based retail business～Providing spaces for experiences,
retail businessencounters, and connections between
peopleVerysevere・ Transforming the business model by
maximizing customer experience value
・ Sluggish growth of the ・ Transformation ofand so forth
entire Groupbusiness model throughuse of digital technology ・ Building business models in new
・ Drop in competitivemarkets such as the metaverse
edge due to delayed use ・ More efficient operations,of technology
and going paperless
・ Standardizing and streamlining
operation systems

2

Decline of existing
business models

3

Response toincreasingly
accelerated
digitalization

4

Changes in consumer
Verybehavior after COVIDsevere
19・ Defection of customers
due to failure to meet ・ New market creation
consumer needs

・ Analyzing the details of changes in
consumption trends
・ Creating new markets such assustainable products and services

5

Urban decentralization(Rebalancing between Severe
urban and rural areas)・ Decline in conventional
urban commercial
・ Business in response tofacilities’ ability tourban decentralization
attract customers

・ Proposing strategies for Group-wide realestate development and real estateholdings; maximizing the value of realestate holdings
・ Working with communities to propose
diverse urban living and appealing local
area development through complex
redevelopment

6

Accelerating income
polarization

・ Stimulation of new・ Decrease in sales due to
middle-class demand
contraction of mass
・ Development of newmarketaffluent market

・ Revising and segmenting categorizationof mass market products and services toan appropriate scale
・ Cultivating affluent market in both realand digital realms
・ Intensively responding to high-quality
children’s apparel and education
business
・ Increasing shopping convenience forsenior customers and strengthening
categories of interest to them, such aswellness

Severe7

Changes in customers,
particularly low
Severebirthrate / longevity

・ Shrinkage of domestic
market scale

・ Expansion of seniormarkets

8

Uncertainty about nonSevere
Japanese market

・ Prolonged slump in
inbound sales

・ Gradual recovery in・ Preparing sales promotion strategies for
inbound sales
recovery in inbound market
・ Capture of outside
・ Strengthening development of EC anddemand by development
live commerceof EC and live commerce9

Accelerated
reorganization and
SevereM&A beyond industry
boundaries

・ Transformation ofbusiness portfolio
・ Hostile takeover of theGroup・ Corporate growth using
M&A

Work styles in newnormal era, progress of

14 HR/organization
reforms

Severe・ Selecting existing businesses andoptimizing allocation of management
resources
・ Examining and exploring new
businesses, promoting development ofoperating subsidiaries to take them on,
and cultivating their business・ Strengthening human capital based on“the principle of human resource
・ Outflow of talented
・ Increase in employee
capability”
human resources, loss ofengagement andcompetitiveness in・ Executing measures to improveorganizational capability
attracting humanworkstyle flexibility
・ Promotion of businessresources
・ Organizational reforms that respect
strategy; creation ofdiversity・ Decrease in employee
innovation
motivation
・ Developing young human resources
through various opportunities- 35 -

CateNo.
gory

Item

Positive side

MeasuresVerysevere11 of information security Severe・ Occurrence of personal
・ Implementing new security
information leaks,
・ Stable running ofcountermeasures to increase prevention
lawsuits, and liability
operations and systems
and detection of incidents
for damages, loss of・ Operation streamlining
・ Reviewing Group security guidelines
social trust
and promotion of remote
and improving employee understanding
・ Delay/stagnation ofworkthrough training
operations

10 disasters / epidemics

Increasing importance

Increasing importance

Finance risk

Negative side・ Strengthening preparations against new
infectious disease by analyzing response
to COVID-19
・ Damage to the lives ofcustomers and・ Envisaging multiple scenarios andemployees
・ Stable business operations analyzing impacts on business・ Business continuity
・ Continuously implementing practicalcrisisBCP training
・ Carrying out appropriate and timely
revision of business plans

Frequent natural

Hazard risk

Outlook
Impact for the
future (*)

12 of financing

Severemanagement

Need for cost structureVery
13 that can respond tosevereenvironmental changes

・ Lowered cost of capital・ Remaining high cost of・ Support for promoting
capitalgrowth strategies

・ Right-sizing cash on hand and interestbearing debt
・ Diversifying fund procurement throughsustainability bonds and so forth・ Transformation of・ Decline in profitability
business portfolio
・ Curbs on investment
・ Strengthen businessfoundations

・ Reducing costs by business model
reforms, office reorganization, staff
composition reviews, and so forth・ Promoting business portfolio
optimization(*) Changes to risks during the period of the Medium-Term Business Plan are projected taking into account the severity of theirimpact on the Group and countermeasures.
: Risks that have an extremely heavy impact and are given priority- 36 -

(4) Information disclosure in line with TCFD recommendations(i) Sustainability management that the Group aims for
The Group articulated the notion of sustainability management and cited “Well-Being Life” as the goal of its
Group Vision, “Create and Bring to Life ‘New Happiness’” in its Medium-term Business Plan launched infiscal 2021.
The world has changed drastically due to the spread of COVID-19 infection and social structure andconsumption structure are changing. And the value expected of retailers is also changing. Amid increasing
uncertainty, we carefully considered and had many discussions on the models that lead to new wealth,security and happiness in the future after the COVID-19 pandemic to promote sustainability initiatives andrealize the Group Vision. As a result, we reached a decision that the goal of the Group Vision we should aim
for is the realization of the Well-Being Life of all people. (Figure 1)
The Group thinks of Well-Being Life as “both mentally and physically fulfilling life” that realizes spiritual
wealth (intellectual and cultural wealth), physical wealth and social wealth as well as conventional material
wealth and economic wealth and the wealth of the environment surrounding them. The JFR Group willrealize the Well-Being Life of stakeholders by connecting tangible goods and intangible goods that are rooted
in culture across the world and Japan with consumers and proposing it from the perspective that combines“beauty,” “health,” “high quality,” “culture” and “trust” with “sustainability” and our “ability to connect
makers and users.

Figure 1:

Overview of sustainability management- 37 -

Sustainability management is the management that solves social issues and achieves corporate growth at thesame time. The Group’s sustainability management has entered the phase of constantly examining its value
creation story: “How can we provide both economic and social value while solving social issues?” andrealizing CSV. We will write our value creation story based on the seven priority materiality issues to beaddressed by the Group (Table 1) and put it into action in order to realize Well-Being Life” for all of our
stakeholders, such as customers, employees, and suppliers.
The Group will promote sustainability initiatives and contribute to the “realization of decarbonized society,”
which the Japanese government aims to realize, and strive to solve as many social issues as possible throughthe growth of businesses.

- 38 -

Table 1: Seven materiality issues addressed by the JFR Group
Materiality issues

KPIs for FY2030

The Group’s commitment to realizing a sustainable society
In order to pass on the irreplaceable environment of the
Leading a carbon-freeearth to the next generation, we will contribute to theRealization ofsociety and creating a global
realization of a decarbonized society by working together
decarbonized society
climate for the next
as one to expand procurement of renewable energy andgeneration
rigorously implement energy-saving measures, etc.
Realizing a sustainableglobal environment for the
We will cooperate with our suppliers and customers toPromotion of circular future and growth as acreate innovative business models for generating new
economycompany through theenvironmental value and capture competitive advantages inpromotion of circular
the circular economy.
economyWe will share our thinking on sustainability with our
Realizing sustainable supply suppliers and work together with them to fulfill our social
chain created along withresponsibilities, thereby contributing to the creation of a
suppliers
sustainable society for the future through our entire supply
chain.
We will engage in procurement, etc., of environmentally
Realizing decarbonizationconsiderate products and services with our suppliers, while
throughout the entire supply
also working to shift to renewable energy and energy
Management of thechain created along withsaving so that we can contribute to the realization of aentire supply chain
suppliers
decarbonized society throughout the entire supply chain.
Realizing Well-Being inwhich we, along with
We will work with our suppliers to create working
suppliers, protect the human environments in our supply chain in which the humanrights and health of therights of workers are protected, and in which people canpeople working along thecontinue to work healthily.
supply chain
We will contribute to the creation of sustainable
Together with local
communities that utilize local assets by working with local
communities, creating
communities, governments, NGOs and NPOs, centered on
Coexistence with local prosperous future-oriented
our stores. Moreover, we will provide exciting newcommunities
communities where people
experiences for the people who gather in communities bygather, centered on our
discovering and disseminating the appeal of the local
storesregion.
We will propose personally adapted Well-Being andRealizing a future-oriented
abundant and exciting futures to each customer by
Well-Being Life thatproviding high quality, comfortable products and services
satisfies the mind and body
conducive to lifestyles of healthy mind and body and peaceof customersof mind.
Realization of
We will increase the resilience of our stores by addressing
customers’
disaster-prevention and epidemic risk, and businesshealthy/safe/secure life
Creating safe, secure, andcontinuity plans (BCPs). Moreover, at the same time we
resilient stores with an eye
will build operations that make use of digital technology toon the future
create new customer contact points that consider safety andsecurity as we promote the creation of stores that meetsociety’s expectations.

- 39 -

Materiality issues

KPIs for FY2030

The Group’s commitment to realizing a sustainable society
Based on the themes of diversity and flexibility, we willvalue the different individuality and perspectives of all our
Realizing a highly
stakeholders, which form the essence of diversity, anddiversified society where
create a company where diverse abilities can be
Promotion of diversity everyone recognizes eachdemonstrated. We will also aim to grow our business in& inclusion
other’s diversity and flexibly
line with diverse customers’ expectations by driving
demonstrates his/her
innovation through the mutual interaction andindividuality
complementary functions of diverse individualities andabilities (inclusion).
We will promote work styles that reflect the concepts ofRealizing Well-Being for thediversity and flexibility as the new work styles for the new
employees and their families
Realization of worknormal era, and at the same time preserve mental andthrough new work styles forlife integration
physical health. In this way, we will realize the Well-Being
the future to realize diversityof employees and their families, which will lead toand flexibility
improved productivity in our organization.

- 40 -

(ii) Initiatives Towards Realizing “JFR Group 2050 Net Zero”
Recently, climate change has moved to a much more serious level, endangering not only future generations,but all people, including the present generation.
The Intergovernmental Panel on Climate Change (IPCC) provided a scientific indicator in its 1.5°C special
report in 2018, which stated that it is necessary to reach net zero*1 emissions by 2050 in order to achieve the
1.5°C target. Meanwhile, in 2021 the Science Based Targets initiative (SBTi)*2 announced a new corporate
net zero standard based on scientific knowledge. Now, companies are unable to overlook the need to reachnet zero by 2050 at the latest in order to achieve the 1.5°C target.
In light of the above social situation, the JFR Group has positioned climate change as its most important
issue in sustainability management, and is taking countermeasures, recognizing that the risks andopportunities associated with climate change will exert a huge influence on its business strategy. The Groupobtained certification from the SBTi in fiscal 2019 for its Scope 1, 2, and 3 greenhouse gas (GHG) emissions
reduction targets. Furthermore, in fiscal 2021, in line with the evolution of our materiality issues, we lifted
our target for reducing Scope 1 and 2 GHG emissions from the previous 40% reduction to a 60% reduction
compared with FY2017 (the base year), and reacquired certification for the 1.5°C target that is the newstandard set by the SBTi. Going forward, based on the Corporate Net-Zero Standard set by the SBTi, we will
aim to achieve “2050 Net Zero” within the range of Scope 1, 2, and 3 GHG emissions.
The Group’s 2050 Net Zero target incorporates three of the seven materiality issues: “realization of
decarbonized society,” “management of the entire supply chain,” and “promotion of circular economy.” By
combining these, we will realize decarbonization of the entire supply chain as well as corporate growth of theGroup.
Going forward, the Group will cooperate with its suppliers, who are business partners, and customers, who
are consumers, in efforts to reduce Scope 1, 2, and 3 GHG emissions, while working to adopt the 3Rs and to
expand a circular-type business model, aiming to reduce its business risks while also capturing business
opportunities.

*1

Deducting the amount of carbon absorbed by tree planting and forest management, etc., and theamount removed by GHG recovery and sequestration under ground from GHG emission so that the
total is effectively zero.

*2

Established by a collaboration between four organizations including CDP, the UN Global Compact,
World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) in 2014 for the
purpose of promoting the achievement of science-based GHG emissions reduction targets to limit thetemperature increase to below 2˚C compared to pre-industrial levels.

(iii) Information disclosure in line with the four disclosure items recommended by the TCFD
The JFR Group expressed its agreement with the final report of the Task Force on Climate-Related
Disclosures (TCFD recommendations) in 2019. The TCFD recommendations is a common global framework
for comparable climate-related disclosure, recommending that all corporations provide disclosures in linewith four recommended items: governance, risk management, strategy, and metrics and targets. (Table 2)
The Group uses the TCFD recommendations as a guideline for verifying the appropriateness of its climatechange response, and conducts proactive dialogue with institutional investors to ensure effective disclosureof information.

- 41 -

Table 2: Four Disclosure Items Required of Corporations by the TCFD Recommendations
Disclosure
items

Specific disclosures(a)Governance

(b)
(a)

Risk
management

Strategy(b)(c)

How the processes are integrated into the organization’s overall risk management(a)

Detailed risks and opportunities the organization has identified over the short, medium
and long term
Description of risks and opportunities and their degree of impact on the organization’s
business, strategy and financial planning
Risks, opportunities and financial impacts based on relevant scenarios, and strategies
and resilience against it

(b)
(c)

Metrics andtargets

Process by which the Board of Directors receives reports on climate-related issues,frequency with which these issues are tabled for discussion, and monitored items
Responsibility of management for climate-related issues, process for receiving reports(committees, etc.), and method of monitoring
Detailed processes for identifying and assessing climate-related risks, and method for
determining importance
Detailed processes for management of important climate-related risks, and method ofprioritizing them(a)The metrics used to manage climate-related risks and opportunities(b)

GHG emissions (Scope 1, 2 and 3)(c)

The targets used by the organization to manage climate-related risks and opportunities
and performance against targets
Source: Recommendations of the “Task Force on Climate-related Financial Disclosures (final report)” (2017)- 42 -

<Governance (Governance concerning environmental issues)>(a) Process by which the Board of Directors receives reports on climate-related issues, frequency with whichthese issues are tabled for discussion, and monitored items
In the Group, the Group Management Meeting, which is the highest decision-making body in businessexecution, discusses and makes decisions on specific measures related to environmental issues in order topromote sustainability management across the Group in a cross-organizational manner. Furthermore, theSustainability Committee, which meets once every six months, shares the policies for responding toenvironmental issues discussed and decided by the Group Management Meeting, formulates action plans for
the Group’s environmental issues, and monitors their progress.
The Board of Directors receives reports on the discussions and decisions made by the Group Management
Meeting and the Sustainability Committee, then discusses and oversees the Group’s policies for responding
to environmental issues and its action plans and so forth. (Figure 2)(b) Responsibility of management for climate-related issues, the process for receiving reports (committees,etc.), and method of monitoring
The President and Representative Executive Officer chairs the Group Management Meeting, also serves as
the chairperson of the Risk Management Committee and the Sustainability Committee, both of which areadvisory committees under his direct supervision, and assumes the ultimate responsibility for businessdecisions related to environmental issues. The matters discussed and resolved by the Group Management
Meeting and the Sustainability Committee are finally reported to the Board of Directors. (Table 3)

Figure 2:

Environmental management structure of the Group
Board of Directors
Supervision
ReportPresident and Representative Executive Officer
ReportReportConsultation

Group Management
Meeting
ReportConsultation

Sustainability Committee
Cooperation

Cooperation
ReportInstruction

Risk Management
Committee

Instruction

Operating companies

ReportReportInstruction

Instruction
Cooperation

Sustainability Promotion Division- 43 -

Table 3: JFR Group environmental management meeting bodies and executing entities and their roles
Meeting bodies and executing
entities
Board of Directors
GroupManagement
Meeting
Meetingbody

Risk Management
Committee
Sustainability
Committee

ExecutingentityPresident andRepresentative
Executive Officer
Operatingsubsidiaries(Management
Meeting, Risk
Management
Committee,
Sustainability
Committee, etc.)

Role
Supervises the progress of environment-related initiatives discussed andapproved in business execution. Meets monthly.
Discusses and decides on the measures related to the group-wide management
including specific environment-related initiatives. The decisions are reported
to the Board of Directors. Held weekly.
Extracts comprehensive risks, and discusses and decides on the measuresagainst them. Monitors the progress of operating subsidiaries, and thedecisions are reported to the Board of Directors. Meets as needed.
Discusses and decides on the policy to address environmental issues discussed
at the Group Management Meeting. Formulates the long-term plans and
KGIs/KPIs related to environmental issues and monitors the progress ofoperating subsidiaries. The decisions are reported to the Board of Directors.
Meets semiannually.
Chairs the Group Management Meeting, also serves as the chairperson of the
Risk Management Committee and the Sustainability Committee. Assumes theultimate responsibility for business decisions related to environmental issues.
Plan and executive initiatives for environmental issues as operating
subsidiaries based on the policy for responding to environmental issues thathas been discussed and decided by the JFR Group’s Risk Management
Committee and Sustainability Committee. In addition, report on the status ofprogress to the JFR Group’s Risk Management Committee and Sustainability
Committee.

Promotes the group-wide response to environmental issues. Collects
Sustainability
environment-related information and reports to the Group Management
Promotion Division
Meeting, the Sustainability Committee and the Risk Management Committee.
<Risk management>(a) Detailed processes for identifying and assessing climate-related risks, and method for determining
importance
The Group considers risk to be an inspiration for strategy, and we have defined it as “uncertainty that affects
the corporate management’s achievement of goals, having both a positive and a negative side.” We believethat appropriate handling of risk leads companies to sustainable growth.
The Sustainability Committee conducts more detailed examinations of the environmental risks and shares theresults with operating subsidiaries. Operating subsidiaries incorporate climate actions into their action plans.
They discuss and confirm the progress of the action plans at the meetings chaired by their presidents. The
Group Management Meeting, the Risk Management Committee and the Sustainability Committee monitor
the progress, and finally, report to the Board of Directors. (Table 4)(b) Detailed processes for management of important climate-related risks, and method of prioritizing themWith the recognition that climate-related risks and opportunities have a great impact on its businessstrategies, the Group identified climate-related risks and opportunities through the process below andassessed their importance.
Firstly, the Group extracted climate-related risks and opportunities exhaustively for each activity item ofsupply chain process: “product procurement,” “transportation and customer movement,” “sales in stores,”“use of products and services” and “disposal.” Next, we identified important climate-related risks and- 44 -

opportunities for the Group from among the exhaustively extracted climate-related risks and opportunities.
Finally, we assessed the importance of the identified climate-related risks and opportunities based on two
assessment criteria including the “degree of impact on the Group and the probability of occurrence” and the“degree of impact on stakeholders.”
The Group reflects, under the supervisory system of the Board of Directors, the climate-related risks andopportunities rated as particularly important through the above process in its strategies as its corporate risks
to address them.
(c) How the processes are integrated into the organization’s overall risk management
The Group has established the Risk Management Committee based on the importance of building a structure
for managing risk companywide. The Risk Management Committee identifies and assesses corporate risks,
including environmental risks, based on external environment analysis, narrows them down to the risks thatneed to be preferentially addressed, and monitors progress on them. (Figure 3)
The matters discussed and approved by the Risk Management Committee are reflected in the Group’s
strategy and implemented under the supervisory system by the Board of Directors.

Figure 3: Risk management process of the Group Table 4: Risk management system of the Group

External environment analysis

Internal
environment
analysisInterview withmanagement

Identification/assessment/
narrowing down of risks

Response to risks

Monitoring/report

Responsible meeting bodies andexecuting entities
・ Board of Directors

Sustainability Committee (environmental risks)

Risk Management Committee (overall risk)

Risk management
process

Identification/assessm
ent/narrowing downof risks

Response to risks

・ Group Management Meeting
・ Risk Management Committee(Overall management risk)
・ Sustainability Committee(Environmental risks)・ Operating subsidiaries(Management Meeting, Risk
Management Committee,
Sustainability Committee, etc.)
・ Board of Directors
・ Group Management Meeting

Monitoring/report

・ Risk Management Committee(Overall management risk)
・ Sustainability Committee(Environmental risks)- 45 -

<Strategy>(a) Detailed risks and opportunities the organization has identified over the short, medium and long term
The Group considers it important to examine climate-related risks and opportunities at the appropriate
milestone occasions because of the potential impact of climate-related risks and opportunities on its businessactivities over the long term. Accordingly, the Group has positioned the execution window of the MediumTerm Business Plan up to FY2023 as the short term, the period up to FY2030, which is the year set by the
SBTi for Scope 1, 2, and 3 GHG emissions, as the medium term, and the period to FY2050, which is the
SBTi net zero target year for Scope 1, 2, and 3 GHGs, as the long term. (Table 5)
The Group has formulated a Group strategy for climate-related risks and opportunities by back-casting fromFY2050, when it is to realize net zero, and is working to apply the strategy.
Table 5: Definition of the periods for consideration of climate-related risks and opportunities in the Group
Periods for consideration ofclimate-related risks andopportunities

The Group’s definition

Short-term

Until FY2023

Execution period of the Medium-term Business Plan

Mediumterm

Until FY2030

Period until the SBT setting fiscal year for the Scope 1, 2 and 3 GHG
emissionsLong-term

Until FY2050

Period until the SBT Net-zero Target setting fiscal year for the Scope 1, 2
and 3 GHG emissions(b) Description of risks and opportunities and their degree of impact on the organization’s business, strategy andfinancial planning
The Group conducts scenario analysis in order to understand the risks, opportunities, and impacts of climatechange for the Group and to examine the resilience of the Group’s strategies envisaging the world in Fiscal
2030, and the necessity of further measures.
In the scenario analysis, we referenced multiple existing scenarios announced by the International Energy
Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC), then considered two world
scenarios: one that envisages striving for a target of the goal of the Paris Agreement to limit the increase in
the global average temperature to below 2˚C above pre-industrial levels (the below 1.5˚C/2˚C scenario); andone that envisages the increase in global GHG emissions beyond the present without the introduction of newpolicies and systems (the 4˚C scenario). (Table 6)
Based on these two scenarios, the Group extracted climate-related risks and opportunities following the
TCFD recommendations for each activity in its supply chain process. In addition, we defined the transition
risks (policy regulation, technology, market, reputation) and physical risks (acute, chronic) arising fromclimate change, as well as the opportunities (resource efficiency, energy sources, products and services,markets, and resilience) arising from responding appropriately to it. (Table 7)
Table 6: Existing scenarios taken into consideration
Possible world

Existing scenarios“Net‐Zero Emissions by 2050 Scenario (NZE)” (IEA, 2021)

Below 1.5˚C/2˚C scenario“Sustainable Development Scenario (SDS)” (IEA, 2021)“Representative Concentration Pathways (RCP2.6)” (IPCC, 2014)4˚C scenario“Stated Policy Scenario (STEPS)” (IEA, 2021)“Representative Concentration Pathways (RCP6.0, 8.5)” (IPCC, 2014)- 46 -

Table 7: Overview of climate-related risks and opportunities in the Group
Type of climaterelated risks andopportunities

Time ofemergence

Overview of climate-related risks and opportunities in the Group

Opportunity

Physical risk

Risk

Transition risk

・ Increase in energy costs associated with the introduction of policies tocontrol GHG emissions, such as carbon taxes and the strengthening of
regulations
Policy Short- andregula- medium- ・ Increase in cost of reducing GHG emissions by purchasing green electricity
tion
term
certificates and so forth・ Increase in energy procurement cost due to increased demand forrenewable energy associated with geopolitical risk
・ Increase in operation costs for responding to high efficiency, energy-saving
equipment
Technol- Short- and ・ Increase in energy procurement cost due to the spread of new non-carbon
ogy long-term
energy sources such as hydrogen and ammonia
・ Increase in operation cost due to CCUS (CO2 capture, utilization andstorage) and tree-planting activities.
・ Increase in renewable energy procurement cost due to increase in use ofelectricity from renewable energy sources
Short- and・ Loss of growth opportunities due to a delay in response to market changes
Market mediumsuch as increased demand for low-carbon products
term・ Loss of growth opportunities due to a delay in response to increased risk ofinfectious diseases (COVID-19, etc.) caused by climate change
・ Risk of reputation loss due to slow response to environmental issues andslow response to diversification of consumption patterns
Short- andReputa・ Risk of reputation loss due to lack of preparation for demand frommediumtion
investors for environmental information disclosureterm
・ Negative impact on recruitment of new employees and employee
engagement due to loss of reputation among stakeholders
・ Loss of sales opportunities for products and services resulting from
disruption of logistics routes due to natural disasters caused by climatechangeShort- and・ Reduction in profits due to damage to stores and business sites andAcute mediumsuspension of operations because of natural disasters caused by climate
termchange・ Loss of sales opportunities in stores due to increased risk of infectious
diseases (COVID-19, etc.) caused by climate change
・ Increase in procurement cost due to destabilization of agricultural
Mediumproduction associated with increase in rainfall and changing weather
Chronic and longpatterns
term・ Increase in employee health damage due to infectious diseases caused byclimate change (COVID-19, etc.)
・ Decrease in energy procurement cost due to strengthening of energy-saving
Short- andResourcemeasuresmediumefficiency
・
Decrease in energy procurement cost due to conversion to stores andtermbusiness sites of high environmental value
・ Decrease in energy procurement cost due to introduction of the latest highenergy-efficiency equipment
Short- andEnergy source
・ Decrease in energy procurement cost due to introduction of energy creation
long-term
・ Reduction in renewable energy procurement costs associated with thedevelopment of new policies and systems related to renewable energy
・ Expansion of earnings due to response to an increase of demand for sharing
Short- andand upcycled products due to collaboration with suppliers
Products andmedium- ・ Expansion in earnings due to response to an increase of customer demand
servicestermfor environmental products and services, such as re-used products andrecycled products- 47 -

Type of climaterelated risks andopportunities

Time ofemergence

Overview of climate-related risks and opportunities in the Group

Market・ Expansion of new growth opportunities through new entry into the circularbusinesses
・ Improvement in profitability due to rebuilding of business portfolio acrossthe framework of the retail business and entry into and expansion in the
Short- andmarket for low carbon products
long-term ・ Expansion of earnings due to opening of environmentally conscious tenant
stores following conversion to stores and business sites with highenvironmental value
・ Capture of new growth opportunities by response to increased infectious
disease risk (such as COVID-19) caused by climate change

Resilience

Medium- ・ Increase in energy resilience following advances in renewable energy andtermenergy saving(c) Risks, opportunities and financial impacts based on relevant scenarios, and strategies and resilience against
it
The JFR Group exhaustively extracted climate risks and opportunities and assessed their importance basedon two assessment criteria including the “degree of impact on the Group and the probability of occurrence”
and the “degree of impact on stakeholders.”
Furthermore, the Group has conducted both quantitative and qualitative analyses of the financial impacts in
FY2030 assuming the below 1.5˚C/2˚C scenario and the 4˚C scenario with regard to the climate related risks
and opportunities that it has evaluated as being of particularly high importance. (Table 8)
The qualitative financial impacts are presented in three levels by the direction of the arrow symbols.

Table 8: Climate change risks and opportunities of particular importance to the JFR Group and their financial
impacts: The impact on the Group’s business and finance is expected to be very large.
: The impact on the Group’s business and finance is expected to be slightly large.
: The impact on the Group’s business and finance is expected to be negligible.

- 48 -

Financial impacts
Climate-related risks and opportunities ofparticular importance to the JFR GroupBelow
1.5˚C/2˚Cscenario

Measures4˚C scenario

Risk・ Increase in energy costs
・
Cost increase Cost increase
associated with the introductionofofof policies to control GHG
approximately approximately
emissions, such as carbon taxes¥1.1 billion*1 ¥0.6 billion*1
and the strengthening of
regulations
・ Increase in cost of reducing GHG
・emissions by purchasing green
electricity certificates and so
forth・

Reduction in energy usage due
to introduction of latest highenergy-efficiency equipment atstores and business sites
In-house generation andconsumption of renewableenergy through introduction ofenergy creation system, suchcapital investment inrenewable energy at in-housefacilities

・ Increase in renewable energy
procurement cost due to increasein use of electricity fromrenewable energy sources

Cost increase Cost increaseofof
approximately approximately¥0.7 billion*2 ¥0.2 billion*2

・ Reduction in profits due todamage to stores and businesssites and suspension ofoperations because of natural
disasters caused by climatechangeSales decrease Sales decrease・ Increased resilience of storesofofand business sites through BCP
approximately approximately
preparation*3 ¥10.3 billion*3¥5.2 billion
・ Diversification of sales
channels through promotion ofReal × Digital Strategy
formulated in the MediumTerm Business Plan.
・ Reduction in energy usage due
to introduction of latest highenergy-efficiency equipment atstores and business sites

・ Loss of sales opportunities instores due to increased risk ofinfectious diseases (COVID-19,
etc.) caused by climate change

Opportunity

Reduction in Scope 1 and 2
GHG emissions due toswitching to energy-saving andrenewable energy at stores andbusiness sites

・ Decrease in energy procurement
cost due to introduction of thelatest high energy-efficiency
equipment
・ Expansion of earnings due toopening of environmentallyconscious tenant stores following
conversion to stores and businesssites with high environmental
value
・ Expansion of earnings due toresponse to an increase of
demand for sharing and upcycled
products due to collaboration
with suppliers・ Expansion in earnings due toresponse to an increase ofcustomer demand forenvironmental products andservices, such as re-used products
and recycled products・ Capture of new growth
opportunities by response toincreased infectious disease risk(such as COVID-19) caused byclimate change

Salesincrease of
approximately ¥1.0billion*4―

・ Acquisition of environmental
certification for stores andbusiness sites throughswitching to energy-saving andrenewable energy
・ Conversion to a circularbusiness model, including
sharing and upcycling throughcollaboration with suppliers・ Increase in the level of 3R
through collaboration withcustomers and suppliers andexpansion in handling ofenvironmental products andservices・ Diversification of sales
channels through promotion ofReal × Digital Strategy
formulated in the MediumTerm Business Plan.

- 49 -

Grounds for estimation of quantitative financial impacts expected in FY2030*1

Estimated by multiplying the JFR Group’s Scope 1 and 2 GHG emissions in FY2030 by the
carbon tax price per tonne of CO2*2

Estimated by multiplying the JFR Group’s electricity usage in FY2030 by the additional price of
renewable energy-sourced electricity per kWh compared to ordinary electricity charges*3

Estimated by multiplying the amount of sales losses due to suspension of operations during pastnatural disasters by the frequency of floods*4

Estimated by multiplying the JFR Group’s real estate revenue and profits in FY2030 by the rate ofchanges volatility of new contract conclusion fees for buildings with environmental certification

To realize our most important materiality issue, “realization of decarbonized society,” the Group analyzed theimpacts of climate change on the Group’s business activities, assuming the above scenarios, then examined
our countermeasures to verify the Group’s strategy resilience.
For this reason, in the business strategies and the Medium-term Business Plans, we formulate appropriate
measures to avoid negative risks, while for positive opportunities, we aim to capture new growth
opportunities such as responding actively to market changes and so forth.

•

JFR Group’s FY2050 Net Zero Transition Plan
The JFR Group believes it necessary to strengthen its highly strategic resilience from a medium- to long-term
perspective under both the below 1.5˚C/2˚C scenario and the 4˚C scenario towards realizing net zero in
FY2050.
Therefore, the Group has formulated a transition plan for realizing net zero in FY2050. (Figure 4) Under thisplan, in our business strategy, we have formulated appropriate strategies to avoid negative risks, while forpositive opportunities we have clarified specific initiatives from short-, medium- and long-term perspectives
aimed at capturing new growth opportunities, such as responding proactively to market changes.

- 50 -

Figure 4:*

FY2050 Net Zero Transition Plan*

The plan is current as of the end of May 2022, and may be revised depending on business strategies
going forward.

- 51 -

<Metrics and targets>(a) The metrics used to manage climate-related risks and opportunities
The Group has established two metrics for managing climate-related risks and opportunities: Scope 1, 2 and3 GHG emissions and the ratio of renewable energy within electricity used in business activities.
Furthermore, in the Officer Remuneration Policy revised in April 2021, Scope 1 and 2 GHG emissions
reduction targets were set as indicators for determining performance-linked remuneration, to clarify
executive officers’ responsibility with regard to the issue of climate change.

(b) GHG emissions (Scope 1, 2 and 3)
The Group started calculating the total GHG emissions for the Group in fiscal 2017. The Group’s Scope 1
and 2 GHG emissions in fiscal 2021 are forecast at approximately 130,000 t-CO2 (down 1.6% from fiscal
2020 and down 33.0% from fiscal 2017). Further, the Group’s Scope 3 GHG emissions in fiscal 2021 areforecast at approximately 2,850,000 t-CO2 (up 15.4% from fiscal 2020 and down 2.6% from fiscal 2017).
(Table 9)
The Company expects to obtain third-party assurance for its Scope 1, 2, and 3 GHG emissions for FY2021.

Table 9: The Group’s Scope 1, 2 and 3 GHG emission results and forecast(Unit: t-CO2, %)GHG emission results
FY2017 (basefiscal year)
Total Scope 1 and 2
emissions
Scope 1emissions
Breakdown
Scope 2emissions
Total Scope 3 emissions*2

FY2020GHG emission forecast
Compared with
FY2017Compared withFY2021(compared withFY2020base fiscalyear)

194,154*1

132,106*1

130,000(1.6)(33.0)

16,052*1

11,983*1

14,500

+21.0

(9.7)

178,102*1

120,123*1

115,500(3.8)(35.1)

2,470,411*1

2,850,000

+15.4

(2.6)

2,927,320*1

Obtained third-party assurance from LRQA

2

In accordance with “Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout theSupply Chain ver. 2.4 (March 2022, Ministry of the Environment and Ministry of Economy, Tradeand Industry), we calculated the GHG emissions by category using the formula: “activity amount ×
emissions per base unit”(c) The targets used by the organization to manage climate-related risks and opportunities and performanceagainst targets
The JFR Group has set long-term GHG emission reduction targets since FY2018 to achieve the global under2˚C target, and obtained certification from the SBTi in FY2019 for its Scope 1, 2, and 3 greenhouse gas(GHG) emissions reduction targets. In FY2021, in line with the evolution of our materiality issues, we lifted
our target for reducing Scope 1 and 2 GHG emissions from the previous 40% reduction to a 60% reduction
compared with FY2017 (the base year), and reacquired certification for the 1.5°C target that is the newstandard set by the SBTi. Moreover, based on the Corporate Net-Zero Standard set by the SBTi, we have set
a target to achieve “2050 Net Zero” within the range of Scope 1, 2, and 3 GHG emissions.

- 52 -

To achieve these long-term targets, in FY2019 the group started procuring electricity from renewable energy
sources for its own facilities, and in October 2020 jointed the RE100*, which aims to achieve 100%
renewable energy rate for electricity used in business activities by FY2050. Moreover, as an interim target,
we aim to achieve a 60% renewable energy rate for electricity used in business activities by FY2030.
Looking ahead, we will work to expand procurement of electricity from renewable energy towards achieving
net zero in FY2050.
*

A global initiative that aims to source 100% renewable energy to power business operations by 2050

Table 10: The targets used by the Group to manage climate-related risks and opportunities
Metrics

Target year
2050

GHG emissions
Ratio of renewable energy
in electric power used inbusiness activities*1

Approved by SBTi

*2

Joined RE100 in 2020

2030
2050
2030

Details of targets
Net zero emissions of Scope 1, 2, and 3 GHG emissions
60% reduction of Scope 1 and 2 GHG emissions (compared to
FY2017)*1
40% reduction of Scope 3 GHG emissions (compared to FY2017)*1
100% ratio of renewable energy in electric power used in businessactivities*2
60% ratio of renewable energy in electric power used in businessactivities

Going forward, the Group will promote strengthening of governance in environmental management under thesupervisory system of the Board of Directors and promote companywide initiatives such as the formulationof action plans for achieving medium- to long-term targets.

- 53 -

3. Management analysis of financial position, operating results and cash flows(1) Financial position and operating results(i) Operating results for the current fiscal year
(Millions of yen, %)Fiscal year ended
February 28, 2022

Against Octoberforecasts

Year-on-year changes

Gross sales

875,281

105,828

Change inpercentage
13.8

Sales revenue

331,484

12,405

3.9(26,016)Gross profit
Selling, general andadministrative expense
Business profit

147,842

13,47410.0(4,658)136,123

4,122

3.1

(4,377)

11,718

9,352

395.1

(282)

Other operating income

11,068

5,357

93.8

4,068

Other operating expense

13,406(18,937)(58.6)(94)

Operating profit
Profit attributable to ownersof parent

9,380

33,645

-

3,880

4,321

30,514-

3,321

Change in amount

Change in amount(46,719)

In the fiscal year under review, the Japanese economy encountered ongoing instability, which was partly
attributable to a situation where the worldwide spread of COVID-19 persisting since last year significantly
affected social and economic activities in Japan and overseas, and also attributable to rapidly mounting
geopolitical risks in the latter half of the fiscal year.
As for corporate earnings, signs of improvement emerged largely due to expanding external demand amid
resumption of global economic activity, yet earnings disparity between industries widened amid a situation
where the in-person services sector has been subject to severe restrictions limiting movement particularly in theform of controls on flows of people and voluntary restraints on business operations associated with the spreadof COVID-19. In addition, the outlook has become furthermore uncertain amid increasingly conspicuous effectsof surging resource prices and materials supply shortages.
Despite personal spending having exhibited signs of recovery beginning in October of last year amid adecreasing number of COVID-19 cases and progress made with respect to vaccinations, challenging
circumstances have persisted amid a resurgence of deteriorating consumer sentiment caused by factors that
include rapid proliferation of infections involving COVID-19 variants at the end of the fiscal year andimposition of strict infection control measures.
With respect to initiatives for the initial fiscal year of the FY2021-FY2023 Medium-term Business Plan, theCompany has embarked on its new Medium-term Business Plan, which positions sustainability at the core ofmanagement and sets its sights on the corporate vision for 2030, amid the unprecedented crises of the COVID19 pandemic. Under the Medium-term Business Plan, (1) we aim to achieve “complete recovery” in terms of
ensuring that our performance indicators return to levels of fiscal 2019 prior to the COVID-19 pandemic, and(2) we have positioned the period covered by the plan to be one of poising ourselves for “regrowth” beginningin fiscal 2024.
During the current fiscal year, which constituted the initial year of the Medium-term Business Plan, the outlook
remained uncertain due to COVID-19 with the infection having spread intermittently throughout the year. Amid
those circumstances, we strove to manage operations in a manner that involves addressing persistently changing
circumstances across our respective businesses, with our top priority placed on ensuring the safety and securityof our customers and employees, and achieving business continuity. We also took a flexible approach in termsof implementing measures that entail cutting costs and carefully selecting investments even during the fiscal
year.
Our commitment to sustainability primarily involved engaging in business activities and new businessdevelopment integrating our seven materiality issues (priority issues) with our key strategies, reducing- 54 -

greenhouse gas emissions looking toward our medium- to long-term targets, and seeking solutions toenvironmental and social challenges in cooperation with our suppliers.
At the same time, we steadily promoted initiatives set forth in the Medium-term Business Plan in terms of the“three key strategies,” “management structure reforms,” and “strengthening of management foundation.”
As for our “three key strategies and management structure reforms,” we have been implementing theCompany’s digital strategy as part of our “real x digital strategy” with the aim of providing new experiencevalue extending beyond temporal and spatial constraints by enlisting digital technologies combined with theappeal of brick-and-mortar stores and human resources, thereby extending above and beyond initiatives thatmerely involve strengthening e-commerce.
Our efforts to increase the attractiveness of our stores has involved developing content that provides new value
for department stores, particularly in terms of enhancing luxury brands and other key categories centered on theflagship stores, developing sales floors that enlist integration of direct-to-consumer brands (where creators andmanufacturers deal directly with consumers), having PARCO promote renovation of its flagship stores withsights set on rebranding of stores, and opening medical wellness malls that seamlessly provide a range ofservices from medical treatment to the sales of goods and services.
Our efforts involving use of digital technologies have entailed digitalizing customer contact points particularly
by increasing the app membership count in the Department Store and PARCO businesses, and developing
original OMO operations (offline brick-and-mortar stores merged with online) particularly for cosmetics andart, inspired by brick-and-mortar stores, looking toward expanding business using online platforms. In addition,
we have entered the market of fashion subscription, which serves as a business initiative undertaken from theperspective of CSV (creating shared value) using online platforms.
Under our prime life strategy, we have been expanding our high-quality customer base, which is a strength of
the Company, while strengthening our proposals for consumers who enjoy fulfilling, sustainable lifestyles.
In the Department Store Business, we worked to increase the value of the customer experience derived fromboth brick-and-mortar stores and online platforms. This has involved enhancing key categories, developing
refined store environments that are distinctive to brick-and-mortar stores particularly by constructing lounges
for our loyal customers, offering scarce merchandise and services through our loyal customer-exclusive
website, and upgrading our remote sales services. In addition, we took steps to provide new services including afamily trust service in our Payment and Finance Business.
We have set our sights on transforming our business portfolio under our developer strategy. This has involved
efforts of the Developer Business, which is a new business segment, in terms of helping to create bustling
towns underpinned by coexistence with local communities, building foundations for “regrowth” in fiscal 2024
and beyond with a focus on increasing the value of our real estate holdings, and proceeding with upfront
investment.
In the current fiscal year, we have made progress in deriving revenue from existing properties unified within
PARCO through their effective use, and have furthermore been promoting district development in Nagoya’s
Sakae area in partnership with other companies. In addition, we have been building foundations for achieving
medium- to long-term growth, which has involved devising plans for development of large-scale complexes in
the Group’s key areas, making sophisticated use of our asset holdings, and taking action to diversify into
multiple revenue streams.
In terms of management structure reforms, we have been implementing the most important measures forcomplete recovery to levels of fiscal 2019 in conjunction with our key strategies, which have involved: (1)reducing fixed costs through structure reforms, and (2) increasing management efficiency and asset efficiency.
As for our initiatives to reduce fixed costs during the current fiscal year, we achieved reductions exceeding
initial estimates primarily by promoting organizational and personnel structure reforms through business model
reforms in the Department Store Business and by prompting a shift to digital advertising.
In addition, our efforts to improve management efficiency and asset efficiency involved setting our sights ontransforming our business portfolio. To such ends, we transferred all shares of NEUVE A Co., Ltd. in the- 55 -

specialty store business at the end of June, transferred some shares of Dimples’ Co., Ltd. in the staffing service
business at the end of February, and furthermore sold non-business assets.
In terms of strengthening of management foundation to support the achievement of medium- and long-term
growth, under the Group financial strategy, we have been seeking to ensure liquidity of funds aligned withchanges in the business environment amid the COVID-19 pandemic. The Company furthermore issued
sustainability bonds for the first time in May as a new means of procuring funds. In addition, we made thedecision to adopt the consolidated taxation system beginning in fiscal 2022 in aiming to strengthen tax
governance and optimize tax costs.
Under the Group human resource strategy, we made progress in recruiting work-ready professionals equippedwith requisite specialized knowledge and skills particularly in the digital realm with the aim of steadily
promoting our key strategies. In addition, we promoted initiatives on the basis of the Company’s materiality
issues, particularly with respect to encouraging active participation of women and setting up remote work
arrangements aligned with diversification of work styles.
Under the Group IT strategy, we have embarked on efforts to rebuild backbone systems in seeking to develop
more sophisticated management and administration, particularly by revamping Group-wide accounting systems
in conjunction with lending support for promoting digital strategies in our respective businesses.
With respect to consolidated earnings for the current fiscal year, sales revenue was ¥331,484 million, up 3.9%
year on year, partly due to a rebound in the wake of suspended store operations and shortened operating hours
in the Department Store and PARCO businesses in the previous fiscal year, in addition to various measures
including those mentioned above.
Furthermore, business profit was ¥11,718 million, up 395.1% year on year, as a result of efforts throughout the
fiscal year that involved curbing investment and reducing expenses. Operating profit was ¥9,380 million(operating loss of ¥24,265 million in the previous fiscal year) largely due to recording of gain on sales of sharesof subsidiaries, gain on sales of non-current assets, and structural reform costs. Profit before tax was ¥6,190
million (loss before tax of ¥28,672 million in the previous fiscal year), and profit attributable to owners ofparent was ¥4,321 million (loss attributable to owners of parent of ¥26,193 million in the previous fiscal year).

Regarding dividends, the Company has decided to pay an annual dividend of ¥29 per share (¥27 in the previous
fiscal year), for an increase of ¥2 relative to the previous fiscal year. With respect to the balance of the interim
dividend and year-end dividend, the interim dividend amounted to ¥14 per share for an increase of ¥5 relative tothe previous fiscal year (¥9 in the previous fiscal year), and the year-end dividend amounted to ¥15 per sharefor a decrease of ¥3 relative to the previous fiscal year.

Business results by segment<Department Store Business>(Millions of yen, %)Fiscal year ended
February 28, 2022

Against Octoberforecasts

Year-on-year changes
Change in amount

Change inpercentage

Change in amount

Sales revenue

190,739

16,908

9.7(10,861)

Business profit

1,798

4,734

–

(1,202)

Operating profit(4,594)

16,191–(3,394)

The adverse business environment persisted amid a situation where each store was forced to suspend on-sitesales of items other than daily necessities particularly in the first half, along with imposition of shorter
operating hours and entry restrictions, all associated with application of state of emergency declarations andstrict infection control measures.
- 56 -

On the other hand, we promoted digital sales activities that involved strengthening app-based communications
with customers and upgrading remote sales services. Moreover, our OMO initiatives entailed launching the new
ARToVILLA media service for conveying the appeal of art in both physical stores and online.
To increase the attractiveness of stores, we enhanced key categories and constructed lounges for our loyal
customers particularly in our flagship stores. We also sought to create new stores that are integral to theirrespective communities with renovation and re-openings of the Daimaru Suma store in March and the
Matsuzakaya Takatsuki store in July. In addition, at the Daimaru Tokyo store we sought development of newcontent that entailed opening “asumise,” a showrooming space for direct-to-consumer brands. We ceased
operations of the Matsuzakaya Toyota store in September.
In addition, we engaged in initiatives involving organizational and personnel structure reforms with our sights
set on business model reforms, which was in addition to absorption-type merger of a sales function subsidiaryand overhaul of outsourcing operations for the sake of heightening flexibility in addressing the changing
business environment as well as improving organizational and employee productivity.
As a result of various measures including those mentioned above, along with a rebound from suspension of
store operations, among other factors, sales revenue was ¥190,739 million, up 9.7% year on year. Operating
loss improved relative to the previous fiscal year to ¥4,594 million (operating loss of ¥20,785 million in theprevious fiscal year), partly due to recording of structural reform cost.

<SC Business>(Millions of yen, %)Fiscal year ended
February 28, 2022

Against Octoberforecasts

Year-on-year changes

Sales revenue

52,556(2,893)

Change inpercentage(5.2)

Business profit

3,844

2,836

281.3

(356)

Operating profit

2,055

9,023

–

255

Change in amount

Change in amount(2,444)Adverse circumstances in the business environment persisted as was the case with the Department StoreBusiness, amid a situation where the spread of COVID-19 resulted in suspended store operations, shortened
operating hours, and restrictions imposed on entrance to entertainment venues.
Amid those circumstances, we sought to advance customer communications through initiatives that included
digitalizing customer contact points particularly in terms of expanding app membership in partnership with our
tenants, strengthening the “PARCO ONLINE STORE,” and enhancing app payment functions. In terms of store
rebranding, we undertook renovation centered on our flagship stores including Urawa PARCO, Sendai PARCO,
and Fukuoka PARCO, and we actively operated pop-up stores that are highly distinctive to luxury brands at
Shibuya PARCO. In addition, we arranged events enlisting collaboration with popular characters andfurthermore held anniversary events at Shibuya and Shinsaibashi PARCO.
As a new business in the area of wellness, we participated in the development and operation of medical malls
and opened the 1st “Welpa” new-concept medical wellness mall in Shinsaibashi PARCO in November.
As a result of various measures including those mentioned above, sales revenue from store operations
increased, but sales revenue overall decreased by 5.2% year on year to ¥52,556 million due to transfer of allshares of NEUVE A Co., Ltd. in the specialty store business in June. Operating profit increased substantially to¥2,055 million (operating loss of ¥6,968 million in the previous fiscal year), partly due to a rebound withrespect to store closure-related expenses incurred in the previous fiscal year.

- 57 -

<Developer Business>(Millions of yen, %)Fiscal year ended
February 28, 2022

Against Octoberforecasts

Year-on-year changes

Sales revenue

50,633(3,192)

Change inpercentage(5.9)

Business profit

3,134

294

10.3

(266)

Operating profit

4,711

2,730

137.7

1,211

Change in amount

Change in amount(5,867)

We promoted use of our existing properties on the basis of the Real Estate Business having been consolidated
into PARCO in the previous fiscal year. This involved opening a commercial facility at the former site of a
Matsuzakaya distribution center in March while also engaging in non-commercial multi-purpose development,
and furthermore selling off non-business assets. In July, we decided to open stores in a new building (formerly
Kumamoto PARCO) in central Kumamoto.
Meanwhile, our efforts to develop the Nagoya Sakae area to make it more appealing involved promoting
development of Nishiki 3-chome District 25, slated for completion and opening in 2026.
As a result of various measures including those mentioned above, along with factors that include rent
concessions associated with business suspension, a backlash effect with respect to prior special demand forbuilding interior work, and reconsideration of postponed work order schedules, sales revenue was ¥50,633
million, down 5.9% year on year. However, operating profit was ¥4,711 million, up 137.7% year on year, partly
as a result of recording gain on sales of non-current assets.

<Payment and Finance Business>(Millions of yen, %)Fiscal year ended
February 28, 2022

Against Octoberforecasts

Year-on-year changes

Sales revenue

11,037

2,002

Change inpercentage
22.2

Business profit

1,906

1,510

380.4

766

Operating profit

1,970

1,549

367.8

770

Change in amount

Change in amount237

In the payment business, we worked to maintain and expand the customer base through initiatives that included
updating cards in the previous fiscal year and introducing a new points program (QIRA Point). We alsoachieved geographic expansion with respect to the network of affiliated stores and initiated operations such as
those involving mutual exchange of customers among Group stores.
In the finance business, we integrated the insurance agency business within the Group and started offeringfamily trust service in seeking to expand into new financial products.
As a result of various measures including those mentioned above, sales revenue was ¥11,037 million, up 22.2%
year on year primarily due to recovery in transaction volume handled by department stores and increased
revenues from annual membership fees associated with updating cards. Meanwhile, operating profit was ¥1,970
million, up 367.8% year on year.

- 58 -

<Other>(Millions of yen, %)Fiscal year ended
February 28, 2022

Against Octoberforecasts

Year-on-year changes

Sales revenue

61,755(804)

Change inpercentage(1.3)

Business profit

1,252

(402)

(24.3)

52

Operating profit

1,199

(525)

(30.5)

99

Change in amount

Change in amount(2,245)In the electronic devices division and automotive components division of Daimaru Kogyo, Ltd., which isengaged in the wholesale business, revenue decreased amid tight supply of semiconductors. Meanwhile,
Dimples’ personnel recruitment business achieved an increase in revenue in part due to recovery of businessinvolving its client facilities.
As a result of the above, sales revenue was ¥61,755 million, down 1.3% year on year, and operating profit was¥1,199 million, down 30.5% year on year.
Dimples’ has been removed from the scope of consolidation upon partial sale of its shares at the end of
February.

- 59 -

(ii) Financial position(Millions of yen, %)Current assets
Non-current assets

As of February 28, 2021

As of February 28, 2022

Change in amount

273,605

234,884(38,721)990,116

958,022(32,094)

1,263,722

1,192,907(70,815)

Current liabilities

389,926

347,413(42,513)

Non-current liabilities

509,451

483,373(26,078)

Total liabilities

899,378

830,787(68,591)

Equity attributable to owners of parent
Ratio of equity attributable to owners ofparent to total assets
Total equity

352,171

350,368(1,803)

27.9

29.4

1.5

364,343

362,120(2,223)

Total assets

Total assets as of February 28, 2022 was ¥1,192,907 million, down ¥70,815 million compared with February
28, 2021. Total liabilities was ¥830,787 million, a decrease of ¥68,591 million compared with February 28,
2021. Interest-bearing debt (including lease liabilities) was ¥502,109 million, down ¥60,706 million comparedwith February 28, 2021, as a result of the Company having taken steps to optimize cash and deposits on handsecured to provide for effects of the COVID-19 pandemic, and having proceeded with repayment.
Total equity was ¥362,120 million, a decrease of ¥2,223 million compared with February 28, 2021.

(iii) Cash flows(Millions of yen)
Net cash flows from (used in) operating
activities
Net cash flows from (used in) investing
activities
Free cash flows
Net cash flows from (used in) financing
activities
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at end of period

Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Change in amount

56,47149,866(6,605)(20,870)(5,289)15,58135,601

44,577

8,976

58,727(80,392)(139,119)

94,328(35,815)(130,143)

128,925

93,278(35,647)

The balance of cash and cash equivalents (hereinafter “cash”) as of February 28, 2022 was ¥93,278 million,
down ¥35,647 million compared with February 28, 2021.
Cash flow positions in the current fiscal year and the factors for these are as follows.
Net cash provided by operating activities was ¥49,866 million. In comparison with the previous fiscal year,
despite profit before tax having returned to profitability, cash provided decreased by ¥6,605 million, largely due
to an increase in trade receivables (decrease of cash provided).
Net cash used in investing activities was ¥5,289 million. In comparison with the previous fiscal year, cash useddecreased by ¥15,581 million, largely due to proceeds from sales of investment property and subsidiary shares,in addition to a decrease in purchase of property, plant and equipment.
Net cash used in financing activities was ¥80,392 million. In comparison with the previous fiscal year, although
there were proceeds from issuance of bonds, cash provided decreased by ¥139,119 million, largely due to therebound after fund raising for COVID-19 measures carried out in the previous year.
- 60 -

(iv) Production, orders received and sales
1) Production
Production by segments for the current fiscal year are as follows.
Production(Millions of yen)Segment name
Developer BusinessNotes:

1.
2.

Year-on-year comparison
(%)

608

80.5

Consumption taxes are not included in the amounts above.
No items to report for segments other than above.

2) Orders received
Orders received by segments for the current fiscal year are as follows.
Orders received(Millions of yen)Segment name
Developer BusinessNotes:

1.
2.

Year-on-year comparison(%)

33,625

84.9

Consumption taxes are not included in the amounts above.
No items to report for segments other than above.

3) SalesSales by segments for the current fiscal year are as follows.
Segment name

Department StoreBusiness

Breakdown

174,881109.7

The Hakata Daimaru, Inc.

12,539

112.4

Other

3,319

91.6

190,739109.7

49,227

113.1

Total
Other

3,329

27.9

52,556

94.8

PARCO

8,111

104.8

J. Front Design & Construction

23,645

86.5

PARCO SPACE SYSTEMS

17,830

100.7

Total

Developer Business

Other
Total
Payment and Finance
JFR Card
Business
Other

1.
2.
3.

1,045

98.7

50,633

94.1

11,037122.2

Wholesale

34,632

99.4

Other

27,12397.8

61,755

98.7

Total

Notes:

Year-on-year comparison(%)

Daimaru Matsuzakaya
Department Stores Co. Ltd.

PARCOSC Business

Sales(Millions of yen)

Adjustments(35,239)–

Total

331,484

103.9

Adjustments for inter-segment transactions are made in the adjustments column.
Sales amount shows sales revenue.
Consumption taxes are not included in the amounts above.

(2) Management’s analysis and discussion of operating results
Analysis and discussion of the Group’s financial position and operating results are, in principle, content
that has been analyzed based on the consolidated financial statements.
Items in the text below that concern the future were determined as of the end of the current fiscal year.
(i) Significant accounting policies and estimates
The Group’s consolidated financial statements are prepared in accordance with the International
Financial Reporting Standards. The preparation of the consolidated financial statements requires- 61 -

selection and application of accounting policies by management and accounting estimates that affectthe reported amounts and disclosures of assets, liabilities, revenues and expenses. Although the
management makes reasonable judgments for these estimates based on past results and current
circumstances, actual results may differ from these estimates due to uncertainties unique to theestimation.
The significant accounting policies for preparation of the Group’s consolidated financial statements
are described in “V. Financial Information, 1. Consolidated Financial Statements, etc., Notes toConsolidated Financial Statements, 3. Significant Accounting Policies.”
In addition, accounting estimates used in the preparation of the consolidated financial statements andassumptions used in those estimates are described in “V. Financial Information, 1. Consolidated
Financial Statements, etc., Notes to Consolidated Financial Statements, 4. Significant Accounting
Estimates and Judgments.”(ii) Perception, analysis and discussion of operating results, etc. for the current fiscal year
1) Operating results, etc.
Information by segment is described in (1) Financial position and operating results (i) Operating
results for the current fiscal year.
a) Sales revenue
Sales revenue increased by ¥12,405 million from the previous fiscal year to ¥331,484 million,
mainly due to suspended store operations and shortened operating hours at department stores
and PARCO in the previous fiscal year due to the impact of the COVID-19 pandemic.
b) Operating profit
Operating profit increased by ¥33,645 million from the previous fiscal year to ¥9,380 million.
c) Profit before tax
Profit before tax increased by ¥34,862 million from the previous fiscal year to ¥6,190 million.
d) Profit attributable to owners of parent
Profit attributable to owners of parent increased by ¥30,514 million from the previous fiscal
year to ¥4,321 million.
e) Financial position
Total assets as of February 28, 2022 was ¥1,192,907 million, down ¥70,815 million comparedwith February 28, 2021. Total liabilities was ¥830,787 million, a decrease of ¥68,591 million
compared with February 28, 2021. Interest-bearing debt (including lease liabilities) was¥502,109 million, down ¥60,706 million as a result of the Company having taken steps to
optimize cash on hand and deposits secured to provide for effects of the COVID-19
pandemic, and having proceeded with repayment.
Total equity was ¥362,120 million, a decrease of ¥2,223 million compared with February 28,
2021.
As a result, operating profit/total assets (ROA) was 0.8%, profit/equity attributable to ownersof parent (ROE) was 1.2%, and the ratio of equity attributable to owners of parent to total
assets was 29.4%.
f) Cash flows
Net cash provided by operating activities was ¥49,866 million. Net cash used in investing
activities was ¥5,289 million and net cash used in financing activities was ¥80,392 million.
As a result, the balance of cash and cash equivalents as of February 28, 2022 was ¥93,278
million, down ¥35,647 million compared with February 28, 2021.

- 62 -

Looking forward, the Group plans to provide appropriate distribution of profit and capital
investment, giving consideration to the level of profit, cash flow trends, among other factors.
g) Liquidity and capital resources(Basic capital policy)
The Company believes that any increase in free cash flow and improvement in ROE should
help to ensure its sustainable growth and increase corporate value over the medium to longterm. To such ends, the Company promotes a capital policy that takes a balanced approach to“undertaking strategic investment,” “enhancing shareholder returns,” and “expanding net
worth being” after taking into consideration the business environment and risk readiness.
Moreover, in procuring funds through interest-bearing debt, we aim to achieve an optimal
structure of debt to equity in a manner cognizant of our funding efficiency and cost of capital,
carried out on the basis of having taken into consideration our capacity for generating free
cash flows and our balance of interest-bearing debt.
A business strategy where higher sales are accompanied by profits and a financial strategy(encompassing the capital policy) that heightens profitability of invested capital are essential
elements with respect to improving free cash flows and ROE. In addition, we believe it is
crucial that we achieve maximization of the operating profit and sustainable improvement of
the operating profit margin by strengthening our core businesses and concentrating
management resources on initiatives such as business field expansion and active developmentof new businesses.
The key financial indicators for the achievement of the Medium-term Business Plan are ROE
for capital efficiency, consolidated operating profit and ROIC for business profitability, free
cash flow for profitability and safety, and equity ratio attributable to owners of the parent(equity ratio) for financial soundness.
(Status of procurement)
The Group’s basic policy is to source funds needed for business activities using funds
generated by the Group. Moreover, when the need arises for business investment or otherexpenditures, the holding company spearheads efforts to procure such funds mainly by issuingbonds and borrowing from financial institutions, with consideration placed on maintaining
financial soundness.
The Group subsidiaries do not procure funds from financial institutions, but instead we
promote streamlined means of procuring Group funds by seeking necessary funds throughintra-Group financing using a cash management system.
For the current fiscal year, based on the above policy, we procured ¥30,000 million (of which,¥15,000 million involved sustainability bonds) through issuance of unsecured straight bonds.
Meanwhile, we gradually embarked on efforts to optimize cash and deposits on hand secured
to provide for effects of the COVID-19 pandemic, and made progress on repayment ofcommercial paper of ¥55,000 million and long-term borrowings of ¥17,100 million. As aresult, our balance of interest-bearing debt (excluding lease liabilities) decreased by ¥42,200
million compared to the end of the previous fiscal year to ¥317,700 million. We also scaled
back the commitment line to ¥200,000 million, a decrease of ¥100,000 million.
Details on risks associated with financing are mentioned in “II. Overview of Business, 2.
Business risks.”(Financial policy)
Financial policies under the “FY2021-FY2023 Medium-term Business Plan” are described in“II. Overview of Business, 1. Management policy, management environment, issues to beaddressed, etc.”- 63 -(Dividend policy)
The Company’s basic policy on dividends of surplus and dividend results for the current fiscal
year are described in “IV. Information About Reporting Company, 3. Dividend policy.”2) Achievement status of management goals
The achievement status of management goals given as targets for FY2021, the first year of the
FY2021-FY2023 Group Medium-term Business Plan, are as follows.
We will continue working on the growth strategy outlined in “1. Management policy, management
environment, issues to be addressed, etc.” and strive to realize our management goals.
FY2021 results
Consolidated operating profit (IFRS)FY2023 targets¥9,380 million¥40,300 million

Consolidated ROE

1.2%

7.0%

Consolidated ROIC

1.2%

5.0%

(under calculation)

(40)%

21.3%

26%

GHG emissions*
Ratio of women in management positions* Compared with fiscal 2017 Scope 1 (direct GHG emissions from the business operators) and Scope
2 (indirect emissions from the use of electricity, heat, and steam supplied by other companies);
fiscal 2021 results are currently being calculated.

- 64 -

4. Critical contracts for operation<Consolidated subsidiaries>
Agreements relating to leases
Company name

Office name

Daimaru Osaka
Umeda store

Leasedproperty

LessorOsaka Terminal
Building Co., Ltd.

Area
(m2)

Rent

Building(1) Fixed portion of rent
expenses¥6,186 million per annum
95,101 (2) Variable portion of rent
expenses
1.5% of net sales amount inexcess of ¥85,000 million

Daimaru
Matsuzakaya
Department Stores
Co. Ltd.
Daimaru Tokyo
store

JR East Cross Station
Co., Ltd.

Building(1) Fixed portion of rent
expenses¥5,330 million per annum(2) Variable portion of rent
64,657
expenses
1% of the amount in excessof the highest annual net
sales in the most recent threefiscal years.

Main Building

The Nishinippon
Shimbun Building
Inc.
KAMIYOFUDOSAN CO. LTD

Building

31,258 ¥1,266 million per annum

East hall (ELLEGALA)

The Nishinippon
Shimbun Building
Inc.

Building

15,155 ¥1,041 million per annum

The Hakata Daimaru,
Inc.

5. Research and development activities
There are no significant matters to report.

- 65 -

III. Information About Facilities
1. Overview of capital expenditures, etc.
In the current fiscal year, total capital expenditures of ¥21,083 million were made, mainly in the Department StoreBusiness and SC Business.
The breakdown by segment is as follows:
Capital expenditures(Millions of yen)Segment name
Department Store Business

10,921SC Business

5,121

Developer Business

4,698

Payment and Finance Business

38

Other

1,136

Adjustments

(833)
Total

Notes:

1.
2.

21,083

Guarantee deposits for store opening, etc. are included in the amounts above.
Newly acquired right-of-use assets are included in the amounts above.

Mainly, in the Department Store Business this included investment in refurbishment of sales floors at the Daimaru
Kobe store, and in the Developer Business this included opening of a commercial facility at the former site of a
Matsuzakaya distribution center.
The funds required for these expenditures were appropriated from funds on hand and borrowings.
2. Major facilities
Major facilities of the Group are as follows:(1) Reporting company
As of February 28, 2022
Office name
(Location)

J. FRONTRETAILING Co.,Ltd.
(Chuo-ku, Tokyo)

Notes:

1.
2.

Carrying amounts(Millions of yen)Segment name

Corporate(Shared)Facilities

Buildings
andstructures

Right-of-use
Land
assets[Area in m2]

Other

Total

–
Office, etc.

77

[–]

Number of
employees(Persons)

138
155

16

249

[16]

Consumption taxes are not included in the amounts above.
The number in brackets in the “Number of employees” column (not included in number of employees) refers to theyearly average number of dedicated employees, fixed-term employees, etc.

- 66 -

(2) Domestic subsidiaries
As of February 28, 2022

Company
nameCarrying amounts(Millions of yen)

Office name
(Location)

Segment
nameFacilities

Daimaru Osaka
Shinsaibashi store(Chuo-ku, Osaka)

Department
Store
Business

Daimaru Osaka Umeda
store(Kita-ku, Osaka)

Number of
employees(Persons)

Buildings
andstructures

Land[Thousandsof m2]

Right-ofuse assets

Other

Store, etc.

29,541

7,919[11]

11,484899

49,845193[70]

Department
Store
Business

Store, etc.

41

21,6881

21,731

125[107]

Daimaru Tokyo store(Chiyoda-ku, Tokyo)

Department
Store
Business

Store, etc.

2,903

26,13869

29,111

107[76]

Daimaru Kyoto store(Shimogyo-ku, Kyoto)

Department
Store
Business

Store, etc.

9,532

8,759
[10]

2,725

50

21,068215[145]

Daimaru Kobe store(Chuo-ku, Kobe)

Department
Store
Business

Store, etc.

7,071

1,693
[11]

6,648

83

15,497

235[187]

Daimaru Suma store(Suma-ku, Kobe)

Department
Store
Business

Store, etc.

908

611

6

1,526

13
[3]

Daimaru Ashiya store(Ashiya, Hyogo)

Department
Store
Business

Store, etc.

10

706

–

716

9
[8]

Department
Store
Business

Store, etc.

6,936

12,696
[8]

122

100

19,856128[128]

Store, etc.

2,065

1,408
[11]

51

99

3,624

49
[31]

Daimaru Sapporo store
Daimaru(Chuo-ku, Sapporo)
Matsuzakaya
Department
Daimaru Shimonoseki
Stores Co.
store
Ltd.
(Shimonoseki,
Yamaguchi)

–
[–]

–
[–]

–
[–]

–
[–]

Total

Department
Store
Business

Matsuzakaya Nagoya
store(Naka-ku, Nagoya)

Department
Store
Business

Store, etc.

15,721

65,919
[19]

5,457

269

87,367444[155]

Matsuzakaya Ueno store(Taito-ku, Tokyo)

Department
Store
Business

Store, etc.

4,491

27,718
[7]

741

34

32,985158[42]

Matsuzakaya Shizuoka
store(Aoi-ku, Shizuoka)

Department
Store
Business

Store, etc.

3,388

6,628
[7]

69

146

10,233

68[55]

Matsuzakaya Takatsuki
store(Takatsuki, Osaka)

Department
Store
Business

Store, etc.

1,387

3,738
[5]

3

12

5,141

9
[1]

GINZA SIX
(Chuo-ku, Tokyo)

Department
Store
Business

Store, etc.

15,29882,660
[4]

320

431

98,711

9[6]

Head office/Others(Koto-ku, Tokyo, andother locations)

Department
Store
Business

Office, etc.

2,421

4,317
[43]

6,614

87

13,440

697
[193]

Total

–

–

101,719

223,460[141]

83,383

2,292

410,856

2,459[1,207]- 67 -

Company
nameOffice name
(Location)

Carrying amounts(Millions of yen)Segment
nameFacilities

Daimaru Fukuoka
Department
The Hakata Tenjin store, etc.
Store
Daimaru, Inc. (Chuo-ku, Fukuoka, andBusinessother locations)
Kochi
Kochi Daimaru store
Daimaru Co.,
(Kochi, Kochi)
Ltd.

Land
[Thousandsof m2]

Right-ofuse assets

Other

Store, etc.

5,456

7,101
[8]

10,096343

22,998214[100]

Department
Store
Business

Store, etc.

1,154

414
[3]

658

84

2,311

51
[17]

Sapporo PARCO(Sapporo, Hokkaido)

SC BusinessStore, etc.

1,813

5,011
[2]

659

88

7,571

12
[2]

Sendai PARCO(Sendai, Miyagi)

SC BusinessStore, etc.

9,128

4,261
[4]

6,870

39

20,29818[–]

Urawa PARCO(Saitama, Saitama)

SC BusinessStore, etc.

7,896

10,300
[11]

139

87

18,42315[1]

Ikebukuro PARCO(Toshima-ku, Tokyo)

SC BusinessStore, etc.

4,893

7,120
[1]

13,18560

25,26016[–]

PARCO_ya Ueno
(Taito-ku, Tokyo)

SC BusinessStore, etc.

12,93315,808
[2]

386

86

29,213

6[1]

Kichijoji PARCO(Musashino, Tokyo)

SC BusinessStore, etc.

2,050

3,595

57

5,703

8
[1]

Shibuya PARCO(Shibuya-ku, Tokyo)

SC BusinessStore, etc.

18,542

1,683

1,146

56,320

17[1]

Kinshicho PARCO(Sumida-ku, Tokyo)

SC BusinessStore, etc.

2,085

10,25337

12,3762[2]

Chofu PARCO(Chofu, Tokyo)

SC BusinessStore, etc.

3,996

1,719

52

13,79814[1]

Shizuoka PARCO(Shizuoka, Shizuoka)

SC BusinessStore, etc.

1,354

1,700

30

3,085

11
[–]

SC BusinessStore, etc.

5,757

6,261
[2]

8,934

90

21,04422[2]

SC BusinessStore, etc.

14,96821,309
[4]

553

490

37,32314[3]

Hiroshima PARCOSC Business(Hiroshima, Hiroshima)

Store, etc.

3,168

5,580
[2]

3,194

49

11,992

14[–]

Fukuoka PARCO(Fukuoka, Fukuoka)

SC BusinessStore, etc.

4,965

24,877
[4]

2,378

88

32,31018[–]

Shintokorozawa
PARCO(Tokorozawa, Saitama)

SC BusinessStore, etc.

991

1,706
[5]

636

8

3,343

Tsudanuma PARCO(Funabashi, Chiba)

SC BusinessStore, etc.

136

653

12

803

Hibarigaoka PARCO(Nishi-Tokyo, Tokyo)

SC BusinessStore, etc.

361

1,950

6

2,319

Matsumoto PARCO(Matsumoto, Nagano)

SC BusinessStore, etc.

733

447
[3]

367

13

1,562

7
[2]

Head office/Others(Shibuya-ku, Tokyo,
etc.)

SC Business
Developer
Business

Office, etc.

13,07745,689[67]

17,061

334

76,163

360
[89]

–

–

108,856

191,352[120]

75,925

2,779

378,914561[106]

PARCO Co., Nagoya PARCO
Ltd.
(Nagoya, Aichi)
Shinsaibashi PARCO(Osaka, Osaka)

Total

Notes:

1.
2.
3.

4.

Number of
employees(Persons)

Buildings
andstructures–[–]
34,948
[3]

–
[–]
8,029
[4]

–
[–]

–
[–]

–
[–]

Total

–
[–]
7
[1]

–
[–]

Consumption taxes are not included in the amounts above.
The number in brackets in the “Number of employees” column (not included in number of employees) refers to theyearly average number of dedicated employees, fixed-term employees, etc.
Following the absorption and merger of Daimaru Matsuzakaya Sales Associates Co., Ltd. on September 1, 2021, thenumber of employees at Matsuzakaya Department Stores Co. Ltd. increased by 573 compared to the previous fiscal
year-end, and the annual average number of employees such as specialist employees and fix-term temporary employees
increased by 818 compared to the previous fiscal year-end.
Of the major facilities, the ones rented from external sources are listed in “Agreements relating to leases” under “4.
Critical contracts for operation” in “II. Overview of Business.”- 68 -

3. Planned additions, retirements, etc. of facilities
Planned additions, retirements, etc. of significant facilities are as follows:(1) Additions, etc. of significant facilities
Planned investment amountAmountalready paid
(Millions of
yen)

Funds
procurement
methodCompany name

Office name
(Location)

Segment nameFacilities

J. FRONTRETAILING
Co., Ltd.

Head Office(Chuo-ku,
Tokyo)

Companywide(Common)Construction of
a newaccounting
system

1,878

347 and borrowings

Department
Sales floor
Store Business renovation, etc.

13,515

1,306 and borrowings

Rentalcondominium,
etc.

6,240

Matsuzakaya
Daimaru
Nagoya store,
Matsuzakaya
etc.
Department(Naka-ku,
Stores Co. Ltd.
Nagoya, etc.)
PARCO Co.,
Ltd.

Note:

Chiyoda,Nagoya, etc.
(Naka-ku,
Nagoya, etc.)

Developer
Business

Total(Millions ofyen)Consumption taxes are not included in the amounts above.

(2) Retirements, etc. of significant facilities
There are no significant matters to report.

- 69 -

Start

Scheduledcompletion

March 2021

Undetermined

March 2022

February 2023

1,767 and borrowings October 2021

August 2023

Funds on handFunds on handFunds on handIV. Information About Reporting Company
1. Company’s shares, etc.
(1) Total number of shares(i) Authorized shares
Number of shares authorized(Shares)Class
Ordinary shares

1,000,000,000
Total

1,000,000,000(ii) Number of issued shares
Number of issued
shares as of fiscal
year end(Shares)(As of February 28,
2022)

Class

Number of issued
shares as of filingdate(Shares)(As of May 27,
2022)

Ordinary shares

270,565,764

270,565,764

Total

270,565,764

270,565,764

Name of financial instruments
exchange on which securities
are listed or authorized
financial instruments businessassociation to which securities
are registered

Details

First section of the Tokyo Stock
Exchange(as of the end of the fiscal year)
Prime Market of the Tokyo
Stock Exchange
The number of(as of the filing date)shares per shareFirst section of the Nagoya
unit
Stock Exchange
100 shares(as of the end of the fiscal year)
Premier Market of the Nagoya
Stock Exchange(as of the filing date)––(2) Share acquisition rights(i) Employee share option plans
No items to report.
(ii) Rights plans
No items to report.
(iii) Share acquisition rights for other uses
No items to report.
(3) Exercises of moving strike convertible bonds, etc.
No items to report.
(4) Changes in number of issued shares, share capital and legal capital surplus

Date

July 24, 2017
(Note)

Note:

Change in the total Balance of the total
number of issued
number of issued
sharesshares(Thousands of(Thousandsofshares)shares)
2,446

270,565

Change in sharecapitalBalance of sharecapitalChange in legal
capital surplus

Balance of legal
capital surplus(Millions of yen)

(Millions of yen)

(Millions of yen)

(Millions of yen)

1,974

31,974

1,974

9,474

Third-party allotment
Price of issue: ¥1,614
Amount to be included in capital: ¥807
Allottee: The Master Trust Bank of Japan, Ltd. (Trust account for officer remuneration BIP trust)- 70 -

(5) Shareholding by shareholder category
As of February 28, 2022
Shareholding status (Number of shares per share unit: 100 shares)
Foreign investors, etc.

Public sector

Financial
institutions

Financial
instruments
business
operators

Other
corporations

Number ofshareholders(Persons)

–

56

37

Number ofshares held
(Units)–967,249

Shareholding
ratio (%)

–

35.83

Category

Notes:

1.

2.

Shares lessthan one unit
(Shares)Companies,
etc.

Individuals

Individuals
and others

970

302

172

144,599

146,136–

149,111

169,121558,847455

855,0822,699,865

579,264

5.52

6.26

20.70

0.02

31.67

100.00–Total

The 6,264,146 treasury shares include 62,641 share units under “Individuals and others” and 46 shares under “Sharesless than one unit.” In addition, the 6,264,146 treasury shares are the shares listed on the shareholder register, and thisis the same as the actual number of treasury shares owned as of the end of the fiscal year.
The number of units under “Other corporations” includes 94 share units registered in the name of Japan Securities
Depository Center, Incorporated.

(6) Status of Major Shareholders
As of February 28, 2022
Name / Company Name

Address

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

2-11-3 Hamamatsucho, Minato-ku,
Tokyo

Number of shares
held(Thousands ofshares)Shareholding ratio(excluding treasury
shares)(%)

43,781

16.56

Custody Bank of Japan, Ltd. (Trust Account) 1-8-12 Harumi, Chuo-ku, Tokyo

15,163

5.73

Nippon Life Insurance Company

1-6-6 Marunouchi, Chiyoda-ku,
Tokyo

9,828

3.71

J. Front Retailing Kyoei Supplier
Shareholding Association

Nihonbashi 1-Chome Mitsui
Building,
1-4-1 Nihonbashi, Chuo-ku, Tokyo

6,344

2.40

DAIWA CM SINGAPORE LTD NOMINEE ROBERT LUKE COLLICK(Standing proxy: Daiwa Securities Co. Ltd.)

7 STRAITS VIEW MARINA ONE
EAST TOWER, #16-05 AND #16-06
SINGAPORE 018936(1-9-1 Marunouchi, Chiyoda-ku,
Tokyo)

5,439

2.05

The Dai-ichi Life Insurance Company,
Limited

1-13-1 Yurakucho, Chiyoda-ku,
Tokyo

5,158

1.95

BNYM AS AGT / CLTS NONTREATYJASDEC(Standing proxy: MUFG Bank, Ltd.)240 GREENWICH STREET, NEW
YORK, NEW YORK 10286 U.S.A(2-7-1 Marunouchi, Chiyoda-ku,
Tokyo)

4,308

1.62

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

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

3,207

1.21

SMBC Trust Bank Ltd. (Sumitomo Mitsui
Banking Corporation Retirement Benefit
Trust Account)

1-3-2 Marunouchi, Chiyoda-ku,
Tokyo

3,204

1.21

JP Morgan Securities Japan Co., Ltd.

Tokyo Building,
2-7-3 Marunouchi, Chiyoda-ku,
Tokyo

2,909

1.10

99,345

37.58

Total
Notes:

1.

—

J. Front Retailing Kyoei Supplier Shareholding Association is a shareholder association comprised of business partnersof the Group.

- 71 -

2.

In addition to the above, there are 6,264,000 treasury shares (the percentage of number of treasury shares owned tototal number of issued shares is 2.31%), and the shareholding ratio is calculated after excluding those treasury shares.
Treasury shares do not include shares held by the officer remuneration BIP trust.

(7) Voting rights(i) Issued shares
As of February 28, 2022
Number of voting
rights(Rights)

Number of shares(Shares)Category

Details

Shares without voting rights

–

–

–

Shares with restricted voting rights(Treasury shares, etc.)

–

–

–

Shares with restricted voting rights(Other)

–

–

–

–

–

2,637,224–

Shares with full voting rights (Treasury
shares, etc.)(Treasury shares)
Ordinary shares

6,264,100

Shares with full voting rights (Other)

Ordinary shares

263,722,400

Shares less than one unit

Ordinary shares579,264––

Total number of issued shares

270,565,764––

Total number of voting rights–

2,637,224–

Notes:

1.

2.

Figures under “Shares with full voting rights (Other)” include 2,492,800 shares of the Company held by the officer
remuneration BIP trust (24,928 voting rights) and 9,400 shares registered in the name of Japan Securities Depository
Center, Incorporated (94 voting rights).
The number of “Shares less than one unit” includes 46 treasury shares held by the Company and 9 treasury shares heldby the officer remuneration BIP trust.

(ii) Treasury shares, etc.
As of February 28, 2022
Name of shareholder(Treasury shares)
J. FRONT RETAILING
Co., Ltd.
Total
Note:

Address of shareholder

10-1, Ginza 6-chome,
Chuo-ku, Tokyo–

Number of shares Number of shares
held under own
held under thenamename of others(Shares)(Shares)

Total number ofshares held
(Shares)

Shareholding
ratio
(%)

6,264,100–

6,264,100

2.31

6,264,100–

6,264,100

2.31

Treasury shares do not include shares of the Company held by the officer remuneration BIP trust.

(8) Share ownership plan for directors (and other officers) and employees
1) Overview of New Stock-Based Remuneration System for Officers
The Company resolved to replace the “stock-based remuneration system for officers utilizing trust” thathas been introduced since fiscal 2017 as an incentive plan targeting the officers of the Company and theCompany’s main subsidiary, Daimaru Matsuzakaya Department Stores Co. Ltd. (the “Former System”)
by introducing a new stock-based remuneration system for officers which additionally targets theofficers of the Company’s main subsidiary, PARCO Co., Ltd. (The “System”).
For the introduction of the System, the three trusts described below, including those already establishedunder the Former System, will continue to be used as trusts of the System by making changes to partsof the trust so that they match the details of the System, extending the trust periods, and adding
additional monetary trusts as required.
(i) The trust that issues the Company’s shares for Executive Officers of the Company and Directors
and Executive Officers of Daimaru Matsuzakaya Department Stores Co. Ltd. to help the Group
achieve sustainable growth and increase corporate value over the medium to long term (“Trust I”).
- 72 -

(ii) The trust that issues the Company’s shares in a way that it not linked to performance, with theobjective of involving Non-executive Directors of the Company (Independent Outside Directors aswell as chairperson of the Board of Directors, Audit Committee members and other internal Nonexecutive Directors; collectively, the “Non-executive Directors”) in management with a medium- tolong-term view in order that they should strengthen proactive and defensive governance of theCompany from a different standpoint to the executives as representatives of stakeholders (“TrustII”).
(iii) The trust that issues the Company’s shares for Executive Officers of PARCO Co., Ltd. to help theGroup achieve sustainable growth and increase corporate value over the medium to long term(“Trust III”).
2) Overview of the trust agreement(Reference) “Trust I”“Trust II”“Trust III”

(i) Trust category:Monetary trust other than a specific individually operated monetary trust (third-party benefit trust)(ii) Trust objective:

To provide incentive to
Executive Officers of theCompany and Directors andCorporate Officers of Daimaru
Matsuzakaya Department Stores
Co. Ltd.

(iii) Settlor:

The Company(iv) Trustee:

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

Sumitomo Mitsui Trust Bank,
Limited(Re-trust Trustee: Custody Bankof Japan, Ltd.)(v) Beneficiaries:

Executive Officers of theCompany and Directors andNon-executive Directors of the
Corporate Officers of Daimaru
Company who meet the
Matsuzakaya Department Stores
beneficiary requirements
Co. Ltd. who meet thebeneficiary requirements

Executive Officers of PARCO
Co., Ltd. who meet thebeneficiary requirements(vi) Trustadministrator:

Third party with no relationship of interest with the Company (certified public accountant)(vii) Date of trust
agreement:

July 14, 2017 (scheduled to change on July 20, 2021)(viii) Trust period:

July 9, 2018 to July 31, 2023
July 14, 2017 to August 31, 2022 (Planned extension until August 31, (Planned extension until August2024 due to amendment of trust agreement on July 20, 2021)
31, 2024 due to amendment oftrust agreement on July 27, 2021)(ix) Execution of
voting rights

None

To have Non-executive Directorsof the Company engage inmanagement as representatives of
stakeholders from a medium- tolong-term perspective and from astandpoint that is different fromthat of Executive Officers- 73 -

To provide incentive to Executive
Officers of PARCO Co., Ltd.

July 9, 2018 (scheduled tochange on July 27, 2021)

3) The structure of Share Distribution Trust(1) Resolutions by Remuneration Committee(1) Resolutions by
Shareholders(3) Contribution of
Meetingfunds

Eligible subsidiaries[Settlor]
The Company(8) Gratis transfer
andcancellation ofresidualshares(4) Shares(3) Trustof theestablishment
Company(5) Dividends (4) Payment(9) Delivery ofresidualassets[Trustee]
Mitsubishi UFJ Trust and Banking Corporation
or Sumitomo Mitsui Trust Bank, Limited
The Company’s shares and cash benefits(7) Delivery of theCompany’s
shares andcash benefits(6) Instruction on non-exercise of voting rights, etc.

Trust administrator- 74 -(2) Establishmentof ShareDelivery Policy[Beneficiaries]
Eligible corporate
officers

2. Acquisition and disposal of treasury sharesClass of shares, etc.

Acquisition of ordinary shares under Article 155, item (vii) of the Companies Act(1) Acquisitions by resolution of Shareholders Meeting
No items to report.
(2) Acquisition by resolution of Board of Directors meeting
No items to report.
(3) Acquisition not based on resolution of Shareholders Meeting or Board of Directors meeting
Number of shares(Shares)Category

Total value(Yen)

Treasury shares acquired during the current fiscal year

32,621

32,628,940

Treasury shares acquired during the period from March 1,2022 to the filing date of this Annual Securities Report

1,456

1,399,478

Note:

The figure for treasury shares acquired during the period from March 1, 2022 to the filing date of this Annual
Securities Report does not include the number of shares arising from purchases of shares less than one unit fromshareholders upon request during the period from May 1, 2022 until the filing date of this Annual Securities
Report.

(4) Disposal of acquired treasury shares and number of treasury shares held
Fiscal year ended February 28, 2022
Category

From March 1, 2022 until the filing date ofthis Annual Securities Report

Number of shares(Shares)

Total disposal value(Yen)

Number of shares(Shares)

Total disposal value(Yen)

Acquired treasury shares offered forsubscription

–

–

–

–

Acquired treasury shares that were
disposed

–

–

–

–

Acquired treasury shares transferred
for merger, share exchange, sharedelivery and company split

–

–

–

–

Other (Decrease due to sales ofshares less than one unit toshareholders upon request)
Other (Disposal to trusts related tostock-based remuneration system forofficers)
Treasury shares held
Note:

352

562,255

365,100

583,858,245

6,264,146–

28

44,690––6,265,574–

The “Treasury shares held” includes the number of shares from purchases of shares less than one unit. The figure does notinclude the number of shares from purchases of shares less than one unit from May 1, 2022 until the filing date of thisAnnual Securities Report.

- 75 -

3. Dividend policy
The Company’s basic policy is to appropriately return profits. Hence, while maintaining and enhancing its soundfinancial standing, the Company strives to provide stable dividends and target a consolidated dividend payout
ratio of no less than 30%, taking profit levels, future capital investment, free cash flow trends and other suchfactors into consideration. The Company also gives consideration to the option of purchasing its own shares asappropriate, in accordance with aims that include improving capital efficiency and implementing a flexible capital
policy.
With respect to internal reserves, the Company intends to enhance corporate value by using them for such
purposes as investing in store refurbishments and business expansions to strengthen sales, as well as strengthening
the Company’s financial standing.
The Company has paid an annual dividend of ¥29 per share for the current fiscal year, comprising an interim
dividend of ¥14 per share and a year-end dividend of ¥15 per share.
The Company’s basic policy on dividends of surplus is to pay a dividend twice a year, in the form of an interim
dividend and a year-end dividend, and the Articles of Incorporation stipulate that the Company may pay dividends
based on resolution of a Board of Directors meeting.
Note:

Dividends of surplus with record dates falling in the current fiscal year are as follows:
Resolution date

Total amount of dividends(Millions of yen)

October 12, 2021
Resolution of the Board of Directors
April 12, 2022
Resolution of the Board of Directors- 76 -

Dividends per share
(Yen)
3,700

14.0

3,964

15.0

4. Status of corporate governance, etc.
(1) Overview of corporate governance(i) Overview of corporate governance system and reasons for adopting the system
The Company has established Corporate Governance Guidelines that set out the role of corporate
governance in the Company and its subsidiaries (the “Group”). The aims of the Guidelines are to
realize our best possible corporate governance practices in order to ensure the sustainable growth of
the Group and increase corporate value over the medium to long term.
The Company is a holding company and, with the exception of authority for important mattersrelating to business of the Group, it accordingly delegates authority to its respective operating
subsidiaries with respect to matters involving business execution by the business subsidiaries, in orderto speed up business decisions and to make managerial responsibilities clear.
The roles and responsibilities of the Company, as a holding company, are as described below.
Accordingly, the Company: Plans, formulates and penetrates the Group Vision, Group Medium-term Business Plan and Group
Annual Management Policy, and tracks the progress and results thereof; Sets business domains of the Group; Business portfolio management (Optimally allocates the Group’s management resources); Generates synergies between businesses;
 Establishes Group-wide risk management system; Organization design and operation of the entire Group; Human resource management of the entire Group; Management of shareholders; Establishes corporate governance practices for the entire Group; Makes decisions on important matters of business execution relating to management of the Group;and Provides advice and approval for management policy and management strategy of respective
operating subsidiaries, and oversees and evaluates progress thereof.
The Company has six supervisory units (Management Strategy Unit, Group Digital Unit, Group
System Unit, Financial Strategy Unit, Human Resources Strategy Unit and Administration Unit) as
management bodies of the Company to clarify each unit’s roles, responsibilities and authorities,
thereby reinforcing the supervisory function and improving the internal control systems of the entire
JFR Group.
The Company has adopted the organizational structure of a company with three committees(nomination, audit and remuneration committees). This is for the purpose of carrying out initiatives tofurther strengthen corporate governance from the following perspectives:
 The Company will strengthen the oversight function for business execution of the Board of
Directors by separating oversight from execution.
In addition, the Company aims to promote sophistication of strategy by having the Board of
Directors actively include the insights of external persons in order to hold rigorous discourse on
important strategic issues relating to the Group management.
 The Company will enable decisions of business execution to be delegated to Executive Officers,
clarify the authority and responsibility, and carry out speedy management decision making.
 The Company will improve the transparency and objectivity of management by adopting thestructure of a company with three committees (nomination, audit and remuneration committees).
The majority of the members of each of these committees are independent Outside Directors.
 The Company will build a governance structure that is easy to understand from global perspectives,
such as those of overseas investors.
- 77 -

1) Organization of the Company
A. Board of Directors
Directors who are appointed by the shareholders and are entrusted with management of theCompany are to carry out the roles and responsibilities in the Board of Directors as listed below.
They are to do so in accordance with of their fiduciary responsibility and accountability toshareholders, and with the aim of realizing the Group Vision. Accordingly, these roles andresponsibilities include: Indicating the overall direction that Group management is to take, by engaging in constructive
discussions with respect to the Group Vision, the Sustainability Policy, the Group Mediumterm Business Plan, the Group Management Policy for the fiscal year, and other fundamental
management policies, and carrying out multifaceted and objective deliberations that include
evaluation of risks with respect to the aforementioned;
 Appropriately making decisions in terms of overall policy and plans pertaining to the Groupmanagement on the basis of the direction noted above and overseeing progress and results ofthe plans; Developing an environment conducive to encouraging offense-oriented management geared toachieving discontinuous growth; Taking steps to build and develop internal control systems of the Group overall, and otherwise
overseeing the operational status of such systems; Overseeing conflicts of interest between related parties; and On the basis of summary reports furnished by the Nomination Committee, overseeing progressof President and Representative Executive Officer succession planning, personnel assignment
plans pertaining to managerial talent and Executive Officer training, in consultation with theNomination Committee.
The Board of Directors of the Company is to be composed of an appropriate number of Directors,
but not more than 11, as stipulated in the Articles of Incorporation. The number of Directors iscurrently ten (10) (including six (6) independent Outside Directors), and the term of office is one
year. From the standpoint of separating supervision and execution and ensuring the effectivenessof discussions in the Board of Directors meetings, a majority of its membership comprises
independent Outside Directors. The chairperson of the Board of Directors is chosen from amonginternally promoted Directors who do not execute business from the standpoint of separatingsupervision and execution and ensuring the smooth operation of the Board of Directors.
We take steps to ensure diversity when nominating candidates for positions of Director, upongiving consideration to bringing about a balance of knowledge, experience and abilities within the
Board of Directors as a whole.
Members of the Board of Directors are as follows.
Internal Directors:

YAMAMOTO Ryoichi (Chairperson), HAMADA Kazuko,
YOSHIMOTO Tatsuya, and WAKABAYASHI Hayato.

Outside Directors:

YAGO Natsunosuke, HAKODA Junya, UCHIDA Akira, SATO Rieko,
SEKI Tadayuki, and KOIDE Hiroko.

- 78 -

B. Three Committees(Nomination Committee)
The Nomination Committee is composed of three (3) independent Outside Directors andchairperson of the Board of Directors who does not execute business. The chairperson is chosenfrom among independent Outside Directors from the standpoint of ensuring transparency andobjectivity.
The Nomination Committee determines the contents of proposals on the nomination and dismissalof Directors submitted to shareholders’ meetings and reports to the Board of Directors upon
consultations from the Board of Directors regarding the nomination and dismissal of Executive
Officers as well as the chairpersons and members of individual statutory committees, and othermatters.
Members:

YAGO Natsunosuke (Chairperson), UCHIDA Akira, KOIDE Hiroko, andYAMAMOTO Ryoichi(Audit Committee)
The Audit Committee is composed of three (3) independent Outside Directors and one (1) fulltime internal Director who does not execute business, and the Chairperson is chosen from among
independent Outside Directors from the standpoint of ensuring transparency and objectivity.
In accordance with the overall policy and plan determined by the Board of Directors, the Audit
Committee audits the execution of business by Executive Officers and Directors, importantmatters submitted to the Board of Directors, and other individual matters the Audit Committee
considers necessary, as well as the status of establishing and implementing internal controls, andthen prepares audit reports.
Members:

HAKODA Junya (Chairperson), SATO Rieko, SEKI Tadayuki, and HAMADA
Kazuko(Remuneration Committee)
The Remuneration Committee is composed of three (3) independent Outside Directors andchairperson of the Board of Directors who does not execute business. The chairperson is chosenfrom among independent Outside Directors from the standpoint of transparency and objectivity.
The Remuneration Committee determines the policy on deciding the contents of individual
remuneration for Directors and Executive Officers of the Company and officers of its subsidiaries(Directors, Audit & Supervisory Board Members and Executive Officers), and determines thecontents themselves of individual remuneration for Directors and Executive Officers of theCompany.
Members:

UCHIDA Akira (Chairperson), YAGO Natsunosuke, KOIDE Hiroko, andYAMAMOTO Ryoichi- 79 -

2) Corporate governance structure

Shareholders Meeting
Appoint and Dismiss

ReportExecutive
SessionBoard of Directors

Oversight

Directors
Audit

ReportRemuneration
Committee

Nomination
Committee

Audit Committee

ReportEvaluate

Accounting
AuditorCooperate

Oversight
ReportCooperate

Audit

Execution

Risk Management
Committee

Consult

Sustainability
Committee

Consult

ReportReportRepresentative
Executive Officer

Consult
ReportCompliance
Committee
DirectExecutive Officers
ReportInternal Audit
DivisionGroup Management
Meeting
Audit

Operating Units
Audit(ii) Status of internal control system
The Board of Directors of the Company adopted the following resolution (Basic Policy to Build
Internal Control System) concerning “the matters prescribed by Ministry of Justice Order as thosenecessary for the execution of the duties of the audit committee” (Article 416, paragraph (1), item (i)(b) of the Companies Act), and “the development of systems necessary to ensure that the execution ofduties by executive officers complies with laws and regulations and the articles of incorporation, andother systems prescribed by Ministry of Justice Order as systems necessary to ensure the propernessof operations of a Stock Company and of operations of a group of enterprises consisting of the Stock
Company and its Subsidiary Companies” (Article 416, paragraph (1), item (i) (e) of the Companies
Act).
Basic Policy to Build Internal Control System
A. Group management system
Regarding the group management system, the Board of Directors shall perform an oversight function
by monitoring the Executive Officers’ and Directors’ execution of business. The Board of Directors
shall discuss and resolve matters defined in the Companies Act and/or the Articles of Incorporation, as
well as the Group Vision, Sustainability Policy, Group Medium-term Business Plan, overall policy
and plan for Group management, M&As, Group financing plans, and other individual matters relating
to Group management. In order to speed up business decisions and execution, the matters involving
business execution other than the above shall be delegated to execution, with the exception of matterswhich have a material impact on the Group management.
Regarding a management execution framework, the Company shall clearly separate management
oversight and execution and strengthen the Board of Directors’ oversight function while delegating
authority for execution to enable swift management decision-making.

- 80 -

Regarding a system for promoting internal controls, under the direction of the President andRepresentative Executive Officer, to strengthen internal control over execution, the departments andresponsible persons in charge of internal controls shall be established, and shall manage thedevelopment and operation of the internal controls in relation to the Companies Act and the internal
control system in relation to the Financial Instruments and Exchange Act at the Company and theoperating subsidiaries.
B. Risk management system
Regarding the risk management, the Company shall establish the Risk Management Committee. The
committee is chaired by the President and Representative Executive Officer and comprises Executive
Officers and others. The Risk Management Committee shall discuss important matters, including risk
identification and evaluation, and determination of risks to be reflected in strategies, and utilize it for
management decision-making. The committee also reports details of its deliberations to the Board of
Directors in a timely manner.
Regarding crisis risk response, crisis management shall be controlled by the “Emergency Response
Headquarters,” which is headed by the President and Representative Executive Officer, for crisis
events such as large-scale earthquakes, fires and accidents.
C. Legal compliance system
Regarding the legal compliance system, the Company shall establish the Compliance Committee. The
President and Representative Executive Officer shall be the chairperson and the members of thecommittee shall be corporate lawyers, Executive Officers and others. The Compliance Committee
continuously oversees development of the foundations of compliance system and the status of
implementation through enhanced collaboration with departments in charge of compliance of each
operating subsidiary, and promotes compliance with laws and regulations, corporate ethics, and othersuch standards. It also draws up a policy for addressing matters involving serious compliance-related
violations. The committee also reports details of its deliberations to the Audit Committee in a timely
manner.
In addition, regarding a whistle-blowing system, the Company shall establish the “JFR Group
Compliance Hotline” as the whistle-blowing system of the Group that also extends beyond companies(to a corporate lawyer), which may be used by all persons working at the Company and operating
subsidiaries. For hotline reports concerning management personnel, the Company shall build astructure whereby the reports are submitted directly to the Audit Committee and subjected todirections from the Audit Committee so as to secure an independent reporting route.
D. Internal audit structure
Regarding the internal audit structure, the Company shall establish an independent internal audit
department under the President and Representative Executive Officer. In accordance with internal
audit rules and under the direction of the President and Representative Executive Officer, the internal
audit department shall audit the operations of the Company and operating subsidiaries or properly
report the results of audits of operations, examine the properness and effectiveness of the processes
for their operations, and provide guidance, advice and proposals to all departments at the Company
and to operating subsidiaries.
E. Structure of the Audit Committee
Regarding the structure of the Audit Committee, the Audit Committee shall audit the legality andsuitability of the execution of duties by the Executive Officers and Directors. The Audit Committee
shall have periodic meetings with the President and Representative Executive Officer to share
information. Moreover, the Company’s Executive Officers and Directors may be asked to attend Audit
Committee meetings to provide reports and opinions as necessary.
The Audit Committee Secretariat has been established as an organization in charge of assistance for
the Audit Committee’s duties. Regarding personnel appointments and changes for the Audit
Committee Secretariat organization and staff members, and personnel evaluation of the responsible
person for the Audit Committee Secretariat, the Audit Committee’s advance approval is required toensure independence.

- 81 -

F. System for storage and management of information
For documents (including electromagnetic documents) relating to the execution of duties by
Executive Officers and Directors, in accordance with the laws and regulations, and the rules on
confidential information management, each responsible department shall carry out document storageand management during the stipulated period and shall develop a system to enable inspections of such
documents at any time.
Regarding information security, Senior Executive General Manager of the system departments shallcontrol information security management of the Company based on the Information Security Policy
and the IT Governance Policy, and shall report periodically and whenever necessary on the status of
information system management and related matters to the Board of Directors, the Audit Committee,
the Management Meeting and the President and Representative Executive Officer.
(iii) Overview of limited liability agreement
The Company concludes a limited liability agreement with each Director who does not executebusiness pursuant to the provisions of Article 427, paragraph (1) of the Companies Act so that
Directors who do not execute business can adequately fulfill their expected roles. The limited liability
agreement stipulates that the maximum amount of liability for damages due to negligence of duties by
a Director who does not execute business shall be the higher of twelve million (12,000,000) yen or theamount fixed by laws and regulations; however, the limitation of liability is applicable only when theduties that caused the liability were executed by the Director who does not execute business in goodfaith and without gross negligence.
(iv) Number of Directors
The Articles of Incorporation stipulate that the number of Directors of the Company shall be eleven(11) or fewer.
(v) Requirements for a resolution to elect Directors
The Articles of Incorporation stipulate that a resolution to elect a Director of the Company shall be
adopted by a majority of the voting rights of shareholders present at the meeting where theshareholders holding at least one-third of the voting rights of the shareholders entitled to exercise theirvoting rights are present, and such resolution shall not be held by cumulative voting.
(vi) Requirements of special resolution of a shareholders meeting
The Articles of Incorporation stipulate that a special resolution of a shareholders meeting provided forin Article 309, paragraph (2) of the Companies Act shall be adopted by at least two-thirds of thevoting rights of the shareholders present at the meeting where the shareholders holding at least onethird of the voting rights of the shareholders entitled to exercise their voting rights are present. The
purpose of this is to facilitate the operation of the shareholders meeting by providing an easier quorum
requirement for special resolutions at shareholders meetings.
(vii) Organizational body to determine dividends of surplus, etc.
To implement even more flexible dividend measures, the Company provides in the Articles ofIncorporation that matters regarding dividends of surplus, including matters prescribed in the items of
Article 459, paragraph (1) of the Companies Act, shall be determined by a resolution of a Board of
Directors without obtaining a resolution at a shareholders meeting unless otherwise provided for bylaws and regulations.
(viii) Basic policy regarding control of the Company
1) Contents of basic policy
The Company believes it is necessary for the party controlling the Company’s financial and business
policy decisions to be a party who sufficiently understands the financial and business details of theGroup and the sources of the Group’s corporate value, continuously and sustainably ensures that thecorporate value of the Group and, by extension, the common interests of shareholders are served,
and enables further improvement in this area.
As the Company is a listed enterprise, the Company’s policy regarding its shareholders is that, ingeneral, they are determined through free market transactions on the financial instruments market.
Furthermore, even in the case of a purchase of shares of the Company above a certain scale byspecific shareholders or specific groups (hereinafter “Large-Scale Purchase”), if this Large-Scale- 82 -

Purchase will contribute to the corporate value of the Group and, by extension, the common interestsof its shareholders, the Company believes that this should not be rejected outright and that,
ultimately, the decision on whether to accept or reject it should be left to the discretion of theCompany’s shareholders.
Nevertheless, a Large-Scale Purchase that involves a serious risk of causing damage to the corporate
value of the Group may be envisaged. This may include a Large-Scale Purchase that, in view of its
purpose and other factors, would demonstrably harm the Group’s corporate value; one with thepotential to involve substantial coercion of shareholders to sell shares of the Company; or one thatwould not provide sufficient time and information for the Company’s Board of Directors andshareholders to consider factors such as the details of the large-scale purchaser’s proposal, or for theCompany’s Board of Directors to make an alternative proposal.
A party attempting this kind of Large-Scale Purchase, which would not contribute to the corporate
value of the Group and, by extension, the common interests of its shareholders (hereinafter, the“Large-Scale Purchaser”), would not be appropriate as a party controlling the Company’s financial
and business policy decisions. Accordingly, the Company believes that it is the duty of theCompany’s Board of Directors, which is entrusted by the shareholders to manage the Company, torespond to this kind of Large-Scale Purchase by ensuring that processes such as provision of
information by the Large-Scale Purchaser and considerations and evaluations by the Company’s
Board of Directors are carried out, and securing sufficient time for the Company’s Board of
Directors and shareholders to consider the details of the Large-Scale Purchaser’s proposal in order toprevent damage to the corporate value of the Group and, by extension, the common interests of its
shareholders.
2) Frameworks contributing to realization of basic policy
Since the foundation of Daimaru and Matsuzakaya, the Group has been engaged in businesses ofkimono fabric stores and department stores for many years based on the corporate philosophies andtraditional spirits of these businesses, which are: “Service before profit (those who place service
before profit will prosper),” “Abjure all evil and practice all good” and “In doing good to others, we
do good to ourselves.”
The Company believes that the sources of the Group’s corporate value are the relationships of trust it
has established with customers and with society, which have been refined on the basis of thesephilosophies and spirits.
Accordingly, in order to exemplify the principles of “customer-first principle” and “contribution tosociety,” which are in common with these philosophies and spirits, the Company has established thefollowing basic philosophies of the Group: “to aim at providing high quality products and services
that meet the changing times and satisfying customers beyond their expectations” and “to aim atdeveloping the Group by making a broad contribution to society as a fair and trusted business entity.”
Based on these basic philosophies, the Company implements a wide range of measures, aiming torealize the Group’s vision of “Create and Bring to Life ‘New Happiness,’” in order to make acontribution to securing and enhancing the corporate value of the Group and, by extension, thecommon interests of shareholders.
3) Framework to prevent parties deemed inappropriate in light of basic policy from controlling thefinancial and business policy decisions of the Company
At present, the Company has not specifically stipulated a concrete framework for a case in which a
Large-Scale Purchaser appears, commonly known as takeover defense measures.
Nevertheless, the Company believes that, in order to prevent damage to the Group’s corporate value
if a Large-Scale Purchaser appears, it is necessary to carefully examine the impact a Large-Scale
Purchase would have on the Group’s corporate value after ascertaining certain information about theLarge-Scale Purchaser. Such information would include the nature of the Large-Scale Purchaser, thepurpose of the Large-Scale Purchase, the Large-Scale Purchaser’s proposed financial and business
policies and their policy for handling shareholders, the Group’s customers, business partners,
employees, the communities that surround the Group and other stakeholders.
Accordingly, if this occurs, the Company will establish an independent committee composed of
Outside Directors and experts with viewpoints that are independent from the Company’s
management personnel and Internal Directors. If the Company judges that the said Large-Scale
Purchaser is inappropriate in light of the aforementioned basic policy after considering advice and- 83 -

opinions from the committee, the Company will act to secure the Group’s corporate value and, byextension, the common interests of shareholders by taking necessary and appropriate measures.
4) Judgment of the Company’s Board of Directors regarding concrete framework and reasons forsuch judgment
Various measures formulated by the Group are formulated based on the Group’s basic philosophy,
and are intended to further build up the relationships of trust with customers and with society, which
are the sources of the Group’s corporate value. Therefore, the Company believes that these measures
are in line with the contents of the basic policy and contribute to securing and enhancing thecorporate value of the Group and, by extension, the common interests of shareholders.
Furthermore, if the Company takes necessary and appropriate countermeasures against a Large-Scale
Purchaser judged to be inappropriate in light of the basic policy, the fairness, neutrality and rationalityof this judgment will be ensured by making it in consideration of advice and opinions from an
independent committee whose independence from the management personnel and Internal Directorsof the Company is assured. Accordingly, the Company believes that these measures would not
damage the corporate value of the Group or the common interests of shareholders, and that they are
not intended to maintain the positions of the officers of the Company.

- 84 -

(2) Information about officers(i) List of officers
Officers include 16 males and 3 females. (Percentage of female officers: 15.79%)(1) Directors
Title and
position

Name

Date of birth

Career summary
April 1973

Joined The Daimaru, Inc.

May 2003

President and COO and General
Manager of Department StoreOperations, Group Headquarters

September
2007

Director of J. FRONTRETAILING Co., Ltd.

Term ofofficeNumber ofshares held(Thousandsof shares)(Note 2)97

In charge of Sales Reform andOut-of-Store Sales (gaisho)
Reform Promotion
Executive General Manager ofDepartment Store Operations
Headquarters and Planning
Office for New Umeda Store,
Head Office of The Daimaru,
Inc.
Director of Matsuzakaya Co.,Ltd.
Director
Chairpersonof Board of
Directors

YAMAMOTO
RyoichiMarch 27,
1951

March 2008

Executive General Manager ofSales Headquarters, Head Officeof The Daimaru, Inc.

March 2010

President of Daimaru
Matsuzakaya Department Stores
Co. Ltd.

September
2012

President of Daimaru
Matsuzakaya Department Stores
Co. Ltd. and President of
Daimaru Matsuzakaya Sales
Associates Co. Ltd.

April 2013

President and Representative
Director of J. FRONTRETAILING Co., Ltd.

May 2017

Director, President andRepresentative Executive
Officer

May 2020

Director, Chairperson of Boardof Directors (present)

June 2021

Outside Director of Daido SteelCo., Ltd (present)
Outside Director of NORITAKE
CO., LIMITED (present)- 85 -

Title andposition

Director

Name

HAMADA Kazuko

Date of birth

Career summary
April 1985

Joined PARCO Co., Ltd.

September
2000

General Manager of Marketing
Department of SalesManagement Division

March 2002

Deputy General Manager ofKichijoji PARCO

March 2005

General Manager of Kichijoji
PARCO

September 6, March 2007
1962
March 2010

General Manager of
Shintokorozawa PARCO
Executive Officer (Personnel)

March 2013

Executive Officer(Administration and Personnel)

March 2015

Executive Officer (Group Audit
Office)May 2020

AuditorMay 2021

Director of J. FRONTRETAILING Co., Ltd. (present)- 86 -

Term ofofficeNumber ofshares held(Thousandsof shares)(Note 2)0

Title andposition

Director

Name

YAGO
Natsunosuke

Date of birth

May 16, 1951

Career summary
April 1977

Joined EBARACORPORATION

June 2002

Executive Officer

April 2004

Senior Executive Officer, Group
Executive of Precision
Machinery Group of EBARACORPORATION,
Representative Director andChairman of Ebara Precision
Machinery Europe GmbH,
Representative Director andChairman of Ebara Technologies
Inc. and Chairman of Ebara
Precision Machinery Shanghai
Inc.

June 2004

Director of EBARACORPORATION

April 2005

Director of EBARACORPORATION and Chairmanof Ebara Precision Machinery
Taiwan Inc.

June 2005

Director, President of Precision
Machinery Company andGeneral Manager of Fujisawa
Operation of EBARACORPORATION

April 2006

Director and Managing
Executive Officer
President of Precision
Machinery Company

April 2007

President and Representative
Director

May 2007

President and Representative
Director and General Manager
of Internal Control Promotion
Department

July 2009

President and Representative
Director and General Manager
of Internal Control Department

April 2013

Chairman & Director

October 2017

Representative Director of The
Ebara Hatakeyama Memorial
Foundation (present)

March 2019

Retired from the office ofChairman & Director of EBARACORPORATION

June 2019

Outside Director of SUBARUCORPORATION (present)

May 2020

Outside Director of J. FRONTRETAILING Co., Ltd. (present)

May 2021

Director of PARCO Co., Ltd.

- 87 -

Term ofofficeNumber ofshares held(Thousandsof shares)(Note 2)4

Title andposition

Director

Name

HAKODA Junya

Date of birth

Career summary
April 1974

Joined Mitsubishi Rayon Co.,
Ltd. (present Mitsubishi
Chemical Corporation)

November
1980

Joined Pricewaterhouse CPA
Office(Reorganized as Aoyama Audit
Corporation in June 1983)

April 1984

Registered as Certified Public
Accountant

April 2000

Partner at the merged firm,
ChuoAoyama Audit
Corporation/PricewaterhouseCo
opers

August 2006

Representative of Arata Audit
Corporation/Partner ofPricewaterhouseCoopers

April 2008

Eminent Professor of Graduate
School of Keio University(internal audit theory)

September
2009

Member of the Agreement
Monitoring Committee of theJapan External Trade
Organization (JETRO)

September
2010

Director of Japan Internal
Control Research Association

July 10, 1951 December
2014

Outside Corporate Auditor of
Schroder Investment
Management (Japan) Limited(present)

March 2015

Director of Institute ofCorporate Governance, Japan(present)

June 2015

Outside Corporate Auditor of
Yamaha Corporation

June 2015

Outside Director of AEON
Financial Service Co., Ltd.

June 2017

Outside Director andChairperson of the Audit
Committee of Yamaha
Corporation

September
2019

Member of the Ethics
Committee of the JapaneseInstitute of Certified Public
Accountants (present)

May 2021

Outside Director of J. FRONTRETAILING Co., Ltd. (present)

August 2021

Chairperson of the Committee
on Training and Research for
Outside Officers, JapaneseInstitute of Certified Public
Accountants (present)- 88 -

Term ofofficeNumber ofshares held(Thousandsof shares)(Note 2)0

Title andposition

Name

Date of birth

Career summary
April 1975

Joined Toray Industries, Inc.

June 1996

Executive Vice President of
Toray Industries (America), Inc.

June 2000

General Manager on Special
Assignment of Corporate
Strategic Planning Division 1,
General Manager on Special
Assignment of Corporate
Communications Dept. of Toray
Industries, Inc.

June 2004

Counsellor of Corporate
Strategic Planning Division, andCounsellor of Investor Relations
Dept.

June 2005

Member of the Board, General
Manager of Finance andController’s Division

Term ofofficeNumber ofshares held(Thousandsof shares)(Note 2)

4

President, Toray Holding (USA),Inc.
June 2009

Director

UCHIDA Akira

October 4,
1950

Senior Vice President (Memberof the Board), General Manager
of Finance and Controller’s
Division
President, Toray Holding (USA),Inc.

June 2012

Senior Vice President (Memberof the Board), in charge of CSR;
General Manager of General
Administration and Legal
Division, Investor Relations
Dept., Corporate
Communications Dept., andAdvertising Dept., Tokyo Head
OfficeJune 2016

AdviserMarch 2019

Retired from Adviser

May 2019

Outside Director of J. FRONTRETAILING Co., Ltd. (present)

June 2019

Outside Director of Yokogawa
Electric Corporation (present)

May 2020

Director of Daimaru
Matsuzakaya Department Stores
Co. Ltd.

May 2022

Director of PARCO Co., Ltd.
(present)- 89 -

Title andposition

Name

Date of birth

Career summary
April 1984

Director

SATO Rieko

November28, 1956

Number ofshares held(Thousandsof shares)(Note 2)

2

Registered as attorney at law

August 1989

Shearman & Sterling LLP

July 1998

Partner of Ishii Law Office(present)

June 2004

External Audit & Supervisory
Board Member of AjinomotoCo., Inc.

June 2012

Outside Corporate Auditor of
NTT DATA CORPORATION

June 2015

Outside Director of The Dai-ichi
Life Insurance Company,
Limited

October 2016

Outside Director (Audit andSupervisory Committee
Member) of Dai-ichi Life
Holdings, Inc. (present)

May 2018

Outside Director of J. FRONTRETAILING Co., Ltd. (present)

May 2019

Director of Daimaru
Matsuzakaya Department Stores
Co. Ltd.

June 2020

Outside Director (Member of the
Audit and Supervisory
Committee) of NTT DATACORPORATION (present)
Outside Audit & Supervisory
Board Member of Mitsubishi
Corporation (present)- 90 -

Term ofofficeTitle andposition

Director

Name

SEKI Tadayuki

Date of birth

Career summary
April 1973

Joined ITOCHU Corporation

June 1998

General Manager, Finance
Division, ITOCHU International
Inc. (Stationed in New York)

June 2004

Executive Officer of ITOCHU
Corporation, CFO of Food
Company

April 2007

Managing Executive Officer,
General Manager of Finance
Division

June 2009

Representative Director,
Managing Director, Chief
Officer for Finance, Accounting,
Risk Management and CFO

April 2010

Representative Director, Senior
Managing Executive Officer

May 2011

Representative Director, Senior
Managing Executive Officer and
CFO

April 2013

Representative Director,
Executive Vice President and
CFO

December 7, April 2014
1949

Representative Director,
Executive Vice President,
Executive Advisory Officer,
CFO & CAO

April 2015

Adviser

May 2016

External Director of PARCO
Co., Ltd.

June 2016

Outside Director of NIPPONVALQUA INDUSTRIES, LTD.
(present VALQUA, LTD.)(present)

April 2017

Advisory Member of ITOCHU
Corporation (present)

June 2017

Outside Director of JSR
Corporation (present)

July 2017

Outside Statutory Auditor of
Asahi Mutual Life Insurance
Company (present)

May 2020

Outside Director of J. FRONTRETAILING Co., Ltd. (present)
Director of PARCO Co., Ltd.

May 2022- 91 -

Director of Daimaru
Matsuzakaya Department Stores
Co. Ltd. (present)

Term ofofficeNumber ofshares held(Thousandsof shares)(Note 2)2

Title andposition

Director

Name

KOIDE Hiroko

Date of birthAugust 10,
1957

Career summary
September
1986

Joined J. Walter Thompson
Japan K.K. (present Wunderman
Thompson Tokyo G.K.)

May 1993

Joined Nippon Lever K.K.
(present Unilever Japan K.K.)

April 2001

Director

April 2006

General Manager of Marketing
Management Division ofMasterfoods Ltd. (present Mars
Japan Limited)

April 2008

Chief Operating Officer

November2010

President and Representative
Director of Parfums ChristianDior Japon K.K.

January 2013

Outside Director of Kirin Co.,Ltd.

April 2013

Senior Vice President of Global
Marketing of Newell
Rubbermaid Inc. (U.S.) (present
Newell Brands Inc.)

June 2016

Outside Director of Mitsubishi
Electric Corporation (present)

April 2018

Director of Vicela Japan Co.,Ltd.

June 2019

Outside Director of Honda
Motor Co., Ltd
Outside Director of J-OILMILLS, Inc. (present)

May 2021- 92 -

Outside Director of J. FRONTRETAILING Co., Ltd. (present)

Term ofofficeNumber ofshares held(Thousandsof shares)(Note 2)0

Title andposition

Director

Name

YOSHIMOTO
Tatsuya

Date of birth

April 13,
1956

Career summary
April 1979

Joined The Daimaru, Inc.

March 2000

Senior Manager of Preparatory
Office for Opening Sapporo
Store of Planning Office for
Sapporo Store, Head Office

January 2008

General Manager of Tokyo StoreMay 2008

Corporate Officer, General
Manager of Tokyo Store

January 2010

Corporate Officer, General
Manager of Sales Planning
Promotion Division andMarketing Planning Promotion
Division of Department Stores
Coordination Division of J.
FRONT RETAILING Co., Ltd.

March 2010

Corporate Officer of Daimaru
Matsuzakaya Department Stores
Co. Ltd.
Senior General Manager ofManagement Planning Division

May 2012

Director and Corporate Officer

April 2013

President of Daimaru
Matsuzakaya Department Stores
Co. Ltd. and President of
Daimaru Matsuzakaya Sales
Associates Co. Ltd.

May 2013

Director of J. FRONTRETAILING Co., Ltd. (present)

May 2017

Representative Managing
Executive Officer

May 2020

Director, President andRepresentative Executive
Officer (present)- 93 -

Term ofofficeNumber ofshares held(Thousandsof shares)(Note 2)81

Title andposition

Name

Date of birth

Career summary
April 1985

Joined Matsushita ElectricIndustrial Co., Ltd. (present
Panasonic Corporation)

April 1998

President of Panasonic Financial
Center Malaysia Co., Ltd.

April 2007

Director and Chief Executive
Officer of Matsushita Electric(China) Finance Limited

February 2009

Finance Planning Team Leader(Manager), Headquarters
Finance & IR Group of
Panasonic Corporation

July 2013

General Manager, Finance & IR
Group, Corporate Strategy
Division and Finance Strategy
Team Leader of Panasonic
Corporation (Director)

May 2015

Joined J. FRONT RETAILING
Co., Ltd.

Term ofofficeNumber ofshares held(Thousandsof shares)(Note 2)13

In charge of Finance Policy,
Administration Unit
Director

WAKABAYASHI
HayatoAugust 31,
1961

September
2015

Executive Officer
In charge of Financial Strategy
and Policy, Administration Unit

March 2016

Senior Executive General
Manager of Financial Strategy
Unit and in charge of Finance
PolicyMay 2016

Director (present)

March 2017

In charge of Financing and
Finance Policy

May 2017

Managing Executive Officer(present)

May 2018

Senior General Manager ofFinancing and Finance Policy
Division

May 2020

Director of PARCO Co., Ltd.
(present)

June 2020

Senior Executive General
Manager of Financial Strategy
Unit of J. FRONT RETAILING
Co., Ltd. (present)

Total
Notes:

1.
2.

206

Directors YAGO Natsunosuke, HAKODA Junya, UCHIDA Akira, SATO Rieko, SEKI Tadayuki, and KOIDE Hiroko
are Outside Directors.
The term of office will be from the conclusion of the Annual Shareholders Meeting for the fiscal year ended February
28, 2022 to the conclusion of the Annual Shareholders Meeting for the fiscal year ending February 28, 2023.

- 94 -

2) Executive officers
Career summary

Term ofofficeNumber ofshares held(Thousands ofshares)Title and position

Name

Date ofbirth

President andRepresentative
Executive Officer

YOSHIMOTO
Tatsuya

April 13,
1956

(Note 1)

(Note 2)

81

Managing
Executive Officer
Senior Executive WAKABAYASHI August 31,
Hayato1961
General Manager
of Financial
Strategy Unit

(Note 1)

(Note 2)13

(Note 2)

4(Note 2)

1

Managing
Executive Officer
Senior Executive
General Manager
of Management
Strategy UnitManaging
Executive Officer
Senior Executive
General Manager
of Group Digital
Unit

April 1998

Joined The Daimaru, Inc.

September
2016

General Manager of Sales
Promotion Department, Daimaru
Kyoto store of Daimaru
Matsuzakaya Department Stores
Co. Ltd.

March 2018

Executive Officer of J. FRONTRETAILING Co., Ltd.
President and Representative
Director of Dimples’ Co., Ltd.

ONO Keiichi

HAYASHI
Naotaka

August 2,
1975

October 2020

Executive Officer and Senior
General Manager of Structural
Reform Promotion Division,
Financial Strategy Unit of J.
FRONT RETAILING Co., Ltd.

March 2022

Managing Executive Officer
Senior Executive General
Manager of Management
Strategy Unit and in charge of
Risk Management (present)

May 2022

Director of PARCO Co., Ltd.
(present)

April 1991

Joined PARCO Co., Ltd.

March 2009

General Manager of Ecommerce Business Department
of PARCO-CITY Co., Ltd.
(present PARCO DigitalMarketing Co., Ltd.)March 2013

General Manager of Web
Communication Department of
PARCO Co., Ltd.

March 2016

Executive Officer (WebMarketing Department andMedia Communication
Department)

September7, 1968
March 2017

Executive Officer (Group ICTStrategy Office)May 2020

Executive Officer (CRM
Promotion Department andDigital Promotion Department)

March 2022

Managing Executive Officer andSenior Executive General
Manager of Group Digital Unitof J. FRONT RETAILING Co.,
Ltd. (present)- 95 -

Title and position

Managing
Executive Officer
Senior Executive
General Manager
of Group System
Unit

Name

Date ofbirth

Career summary
April 1992

Joined Mitsubishi Corporation

April 1998

General Manager of New
Business Development
Department of eCubeNet. com
Co., Ltd.

April 2003

Executive Officer Partner of
Eupholink Co., Ltd.

April 2004

Vice President and COO

April 2008

Distribution Trading Company
Sector Partner of SIGMAXYZ
Inc.

April 2015

Leader of Process Engineering
Unit, IT Planning Dept. of
Mitsubishi Corporation

March 2017Retired from Mitsubishi
Corporation

April 2017

Joined J. FRONT RETAILING
Co., Ltd.

Term ofofficeNumber ofshares held(Thousands ofshares)(Note 2)

5

Senior General Manager ofGroup Digital Strategy Division
and Senior General Manager of
New Business Division,
Management Strategy Unit
NAKAYAMA
Takashi

October 14, September
1966
2017

Executive Officer, Senior
General Manager of Group
Digital Strategy Division,
Management Strategy Unit andSenior General Manager of New
Business Division

March 2019

Executive Officer and Senior
General Manager of Group
Digital Strategy Division,
Management Strategy Unit

May 2020

Executive Officer, Senior
Executive General Manager ofGroup Digital Strategy Unit andSenior General Manager of
Digital Promotion Division

May 2021

Managing Executive Officer andSenior Executive General
Manager of Group Digital
Strategy Unit

March 2022

Managing Executive Officer andSenior Executive General
Manager of Group System Unit
(present)

May 2022

Director of Daimaru
Matsuzakaya Department Stores
Co. Ltd. (present)- 96 -

Title and position

Managing
Executive Officer
Senior Executive
General Manager
of HumanResources
Strategy Unit andAdministration
Unit

Name

MATSUDA
Hirokazu

Date ofbirth

Career summary
April 1983

Joined The Daimaru, Inc.

April 2005

General Manager in charge ofLabor, Personnel Department,
Administration Division, Group
Headquarters

January 2008

General Manager of Personnel
Department, Operation Division,
Group Headquarters

March 2010

General Manager of
Administration Headquarters
and in charge of Personnel
Structure Reform, Head Officeof Daimaru Matsuzakaya
Department Stores Co. Ltd.

March 2014

General Manager of Personnel
Department of Administration
Headquarters, in charge of
Personnel Structure Reform, andin charge of Personnel Planningand Labor, Head Office

May 2014

Corporate Officer and in chargeof Group Organizational andPersonnel Policy, Management
Strategy Unit of J. Front
Retailing Co., Ltd.

March 29,1960

Corporate Officer and General
Manager of Personnel
Department, Administration
Headquarters of Daimaru
Matsuzakaya Department Stores
Co. Ltd.
January 2015

Senior Executive General
Manager of Administration
Headquarters and in charge ofCompliance and Risk
Management

May 2015

Director and Corporate Officer

May 2017

Director and Corporate
Executive Officer

May 2018

Corporate Executive Officer

March 2021

Managing Executive Officer,
Senior Executive General
Manager of Human Resources
Strategy Unit andAdministration Unit and in
charge of Compliance (present)

May 2022

Director of Daimaru
Matsuzakaya Department Stores
Co. Ltd. (present)- 97 -

Term ofofficeNumber ofshares held(Thousands ofshares)(Note 2)13

Title and position

Executive Officer

Name

KAWASE Kenji

Date ofbirth

Career summary
April 1992

Joined PARCO Co., Ltd.

March 2012

General Manager of President
OfficeSeptember
2012

Representative Director andPresident of PARCO-CITY Co.,Ltd.

March 2017

Representative Director andPresident of PARCO DigitalMarketing Co., Ltd.

March 2019

Executive Officer (Collaboration
Business Planning Office) of
PARCO Co., Ltd.

January 2,
May 2020
1970

Executive Officer (Collaboration
Business Group)

March 2021

Executive Officer(Entertainment Department)

March 2022

Executive Officer, Senior
General Manager ofManagement Planning Division,
Business Portfolio
Transformation Promotion
Division, and Group
Communications Promotion
Division of Management
Strategy Unit of J. FRONTRETAILING Co., Ltd. (present)- 98 -

Term ofofficeNumber ofshares held(Thousands ofshares)(Note 2)–

Title and position

Executive Officer

Name

HIRAI Yuji

Date ofbirth

Career summary
April 1982

Joined The Taiyo Kobe Bank,
Limited (present Sumitomo
Mitsui Banking Corporation)

April 1988

Joined PARCO Co., Ltd.

March 1999

General Manager ofDevelopment Department,
Development Unit

March 2001

General Manager of Subsidiaries
and Associates Corporate
Planning Department, Corporate
Planning Office

March 2002

Manager in charge of Financial
Planning, Financial
Administration Unit

March 2003

Manager in charge ofManagement Planning,
Corporate Office

March 2006

Manager in charge ofManagement Planning and in
charge of Subsidiaries andAssociates, Corporate Planning
OfficeJanuary 29,
March 2007
1960

Executive Officer, Executive
General Manager ofDevelopment Unit

March 2008

Executive Officer, General
Manager of Corporate Planning
OfficeMarch 2010

Executive Officer (Development
Business Department andProperty Management)

March 2012

Executive Officer (ZERO GATE
Business Department)

March 2013

Executive Officer (Real Estate
Strategy Division)

May 2020

Executive Officer (Real Estate
Strategy Group)

March 2022

Executive Officer and Senior
General Manager of CRE
Planning Division ofManagement Strategy Unit of J.
FRONT RETAILING Co., Ltd.
(present)
Executive Officer of PARCO
Co., Ltd. (present)- 99 -

Term ofofficeNumber ofshares held(Thousands ofshares)(Note 2)1

Title and position

Executive Officer

Name

YAMAZAKI
Shiro

Date ofbirth

Career summary
April 1993

Joined The Daimaru, Inc.

March 2004

Staff of Sales Planning
Department, Sales Planning &CS Promotion Division ofTokyo StoreMarch 2007

Staff of Tokyo Metropolitan
Area Strategy Office of J.
FRONT RETAILING Co., Ltd.

March 2010

Staff of Management Planning
Office, Head Office of Daimaru
Matsuzakaya Department Stores
Co. Ltd.

September
2013

Staff of Sales Promotion
Department, Daimaru
Shinsaibashi store

September
2015

Staff of Shinsaibashi New Store
Planning Office, Head Office

January 26, September
1970
2019

Staff of Sales Promotion
Department, Daimaru
Shinsaibashi store

January 2020

Staff of Group Digital Strategy
Division, Management Strategy
Unit of J. FRONT RETAILING
Co., Ltd.

March 2020

Staff of Group Digital Strategy
Unit

May 2020

Representative Director andPresident of JFR Information
Center Co., Ltd.

March 2022

Executive Officer and Senior
General Manager of System
Planning Division of Group
System Unit of J. FRONTRETAILING Co., Ltd. (present)

Term ofofficeNumber ofshares held(Thousands ofshares)(Note 2)–

(Note 2)

1

Director of JFR Information
Center Co., Ltd. (present)

Executive Officer

NOGUCHI
Hideki

April 1990

Joined PARCO Co., Ltd.

March 2007

General Manager in charge of
Accounting & Finance
Department, Financial
Administration Unit

March 2010

Executive Officer (Accounting
Department and Finance/IR
Department)

May 2020

Executive Officer (Accounting
Department, Business
Management Department, andAdministration and Legal
Department)

May 15,1965
May 2021

Executive Officer (Accounting& Finance Department, Business
Administration Department,
Business Management
Department, and Administrationand Legal Department)

March 2022

Executive Officer and Senior
General Manager of Accounting
and Tax Affairs Division,
Financial Strategy Unit (present)- 100 -

Title and position

Executive Officer

Name

UMEBAYASHI
Akira

Date ofbirth

May 4,
1972

Career summary
April 1995

Joined The Daimaru, Inc.

May 2009

Assistant to Business Promotion
Department, Administration
Headquarters (Assigned
Exclusively to Union)(Responsible for the TokyoStore)

September
2016

Staff of Group Personnel
Department, Administration
Unit of J. FRONT RETAILING
Co., Ltd.

March 2017

Staff of Group Personnel
Department, Administration
Unit and Staff of the Board of
Directors Secretariat

September
2017

Senior General Manager ofGroup Personnel Department,
Administration Unit (in chargeof Group Personnel Policy) andStaff of the Board of Directors
Secretariat

May 2018

Senior General Manager ofGroup Human Resources Policy
Division, Human Resources
Strategy Unit and Staff of theBoard of Directors Secretariat

March 2020

Senior General Manager ofGroup Human Resources Policy
Division, Human Resources
Strategy Unit and Staff ofNomination Committee
Secretariat and Remuneration
Committee Secretariat

October 2020

Senior General Manager ofGroup Human Resources Policy
Division, Human Resources
Strategy Unit, Staff ofNomination Committee
Secretariat and Remuneration
Committee Secretariat, and Staffof Structural Reform Promotion
Division, Financial Strategy
Unit

September
2021

Senior General Manager ofGroup Human Resources Policy
Division and Group Human
Resources Development
Division, Human Resources
Strategy Unit, Staff ofNomination Committee
Secretariat and Remuneration
Committee Secretariat, and Staffof Structural Reform Promotion
Division, Financial Strategy
Unit- 101 -

Term ofofficeNumber ofshares held(Thousands ofshares)(Note 2)–

Title and position

Name

Date ofbirth

Career summary
March 2022

Total
Notes:

1.
2.

Term ofofficeNumber ofshares held(Thousands ofshares)Executive Officer and Senior
General Manager of Group
Human Resources Policy
Division, Group Human
Resources Development
Division, and Group Welfare
Division of Human Resources
Strategy Unit, and Staff ofNomination Committee
Secretariat and Remuneration
Committee Secretariat (present)
123

Described in “(1) Directors” in “(i) List of officers” in “(2) Information about officers.”
The term of office of an Executive Officer shall expire at the end of the first meeting of the Board of Directors held
after the end of the Annual Shareholders Meeting that relates to the latest business year that ending within one (1) year
after his/her election to office.

(ii) Outside officers
The Company has six Outside Directors.
The basic views of the Company under the corporate governance structure with three committees arethat more than half of the Board of Directors must be independent Outside Directors. By doing so, theCompany aims to separate supervision and execution, ensure the effectiveness of the Board of
Directors’ discussions, and maintain and improve transparency and objectivity. Two internal Directors
who do not execute business, and are well informed about internal information because of theirextensive business experience in businesses of the Group companies, fulfill their roles as chairpersonof the Board of Directors and as Audit Committee member, and six independent Outside Directors,
who have extensive external management experience or in-depth knowledge in specialized areas,
fulfill their roles as chairperson of any of the Nomination, Audit and Remuneration Committee, or
members of the three committees, so that the effectiveness of independent and objective management
supervision can be ensured.

- 102 -

1) Relationship with the Company and appointment of Outside Directors
Name

YAGO Natsunosuke

Important concurrent positions(As of May 27, 2022)

Outside Director of SUBARUCORPORATION

Member of the Ethics Committeeof the Japanese Institute ofCertified Public Accountants;
HAKODA Junya

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

Relationship with the Company and appointment
YAGO Natsunosuke has been involved in top-level company
management for many years, and has abundant experience instrengthening financial bases and in compliance management. He
also possesses highly specialized knowledge of internal control andcorporate governance gained through his experience of being
involved in the transition to a company with three committees(nomination, audit and remuneration committees). He has
contributed to improving the effectiveness of the Board of Directors
by actively and assertively providing advice and oversight on theoverall management strategy of a holding company, including theimportance of the will and leadership of the Group’s top
management, what the developer business should aspire to be, anddrastic measures such as structural reforms leading to a review of its
business foundation. As the Chairperson of the Nomination
Committee, he has promoted discussions on the ideal structure of theBoard of Directors of the Company and its major subsidiaries,
focusing on succession plans, making transparent and fair personnel
decisions for executives, and confirming the status of candidates for
future senior management positions. As a member of theRemuneration Committee, he has contributed to the strengthening of
the management human resources function by providing advice asnecessary in the deliberation of policies and review of specificoperational rules concerning the executive remuneration system andthe calculation method of stock-based remuneration and bonuses. In
light of his track record, abundant experience and high level of
insight, the Company expects him to contribute greatly to
management of the Group, and has accordingly appointed him as an
Outside Director. The Company has no interest in or relationshipwith him.
HAKODA Junya was involved in accounting audits, management
consulting, and internal audits of auditing firms, etc. for many years
at PricewaterhouseCoopers, also served as an eminent professor
teaching internal audit theory at Graduate School of Keio University,and therefore has abundant experience and high-level expertise incorporate auditing. He also has a high level of expertise in corporate
governance and management auditing, having served as the
Chairperson of the Audit Committee of Yamaha Corporation when
the company changed its organizational design to a company withthree committees (nomination, audit, and remuneration committees).
He has also contributed to improving the effectiveness of the Boardof Directors by actively and assertively furnishing advice andoversight regarding the importance of indicators, such as ROIC as a
Medium-term Business Plan objective and cash flow at the time ofbusiness infrastructure review and segment review, and the creationof a road map for monitoring digital strategies from a comprehensive
perspective. Moreover, as a member of the Audit Committee, he has
endeavored to strengthen the audit function by fulfilling his roles ofauditing the execution of duties by Directors and Executive Officers
of a company with three committees (nomination, audit, andremuneration committees), while exchanging opinions and engaging
in discussions from the perspective of legality and appropriateness,
etc. related to items submitted to the Board of Directors and items
judged to require monitoring by the Audit Committee, which he isexpected to promote. He is also simultaneously working to enhance
the governance of the Group as a whole. In light of his track record,abundant experience and high level of insight, the Company expects
him to contribute greatly to management of the Group, and has
accordingly appointed him as an Outside Director. The Company has
no interest in or relationship with him.

- 103 -Name

UCHIDA Akira

SATO Rieko

SEKI Tadayuki

Important concurrent positions(As of May 27, 2022)

Relationship with the Company and appointment

Outside Director of Yokogawa
Electric Corporation

UCHIDA Akira possesses broad experience and knowledge in thecorporate division, as a manager in charge of management planningand IR, as well as as the person responsible for the finance andaccounting division, and has contributed to improving theeffectiveness of the Board of Directors by actively and assertively
providing advice and oversight with respect to appropriately
conveying information to stakeholders, strengthening collaboration
as a holding company among the Group, the need for new businesses
when reviewing business portfolios, etc. As the Chairperson of theRemuneration Committee, he has promoted discussions on thereview of specific operational rules concerning the executive
remuneration system and the calculation method of stock-based
remuneration and bonuses. As a member of the Nomination
Committee, he has contributed to the strengthening of the
management human resources function by providing advice asnecessary in the deliberation on the ideal structure of the Board of
Directors of the Company and its major subsidiaries, focusing on
succession plans, making transparent and fair personnel decisions for
executives, and confirming the status of candidates for future senior
management positions, etc. In light of his track record and abundantinsight, the Company expects him to contribute greatly to
management of the Group, and has accordingly appointed him as an
Outside Director. The Company has no interest in or relationshipwith him.

Partner of Ishii Law Office;Outside Director (Audit &Supervisory Committee Member)of Dai-ichi Life Holdings, Inc.;
Outside Director (Member of the
Audit and Supervisory Committee)of NTT DATA CORPORATION;
Outside Audit & Supervisory
Board Member of Mitsubishi
Corporation

SATO Rieko possesses abundant experience as an outside director
and outside audit & supervisory board member at other companies,in addition to having made a career in handling many projects within-depth and specialized knowledge as an attorney at law
specializing in corporate legal affairs. She has contributed to
improving the effectiveness of the Board of Directors by providing
assertive and active advice and oversight from legal perspectives on
strengthening measures as a holding company for the Medium-term
Business Plan, the need for measures to increase the speed of digitalstrategies, formulating concrete proposals in line with the Group’sbusiness policy for the fiscal year, and on other proposed agenda
items. Moreover, as a member of the Audit Committee, she has
contributed to strengthening the audit function by auditing theexecution of duties by Directors and Executive Officers of thecompany with three committees (nomination, audit, andremuneration committees), while exchanging opinions and engaging
in discussions from the perspective of legality and appropriateness
related to items submitted to the Board of Directors and items judged
to require monitoring by the Audit Committee. In light of her trackrecord and abundant insight, the Company expects her to contribute
greatly to management of the Group, and has accordingly appointed
her as an Outside Director. The Company has no interest in or
relationship with her.

Outside Director of VALQUA,
LTD.;
Outside Director of JSR
Corporation;
Outside Statutory Auditor of Asahi
Mutual Life Insurance Company

SEKI Tadayuki was involved in international business management
and risk management at a general trading company for many years,
and has extensive experience in finance and accounting as CFO, aswell as abundant experience as an outside director and outside
corporate auditor of multiple companies. He has contributed to
improving the effectiveness of the Board of Directors by actively
and assertively providing advice and oversight on the importance ofcapital cost-conscious financial strategies, the need for an adequate
variation in M&A business portfolios, etc. Moreover, as a member ofthe Audit Committee, he has contributed to strengthening the audit
function by auditing the execution of duties by Directors andExecutive Officers of the company with three committees(nomination, audit, and remuneration committees), while exchanging
opinions and engaging in discussions from the perspective of legality
and appropriateness related to items submitted at the Board of
Directors or items judged to require monitoring by the Audit
Committee. In light of his track record and high level of insight, theCompany expects him to contribute greatly to management of theGroup, and has accordingly appointed him as an Outside Director.
The Company has no interest in or relationship with him.

- 104 -

Important concurrent positions(As of May 27, 2022)

Relationship with the Company and appointment

Outside Director of Mitsubishi
Electric Corporation;
Outside Director of J-OIL MILLS,Inc.

KOIDE Hiroko has knowledge based on her extensive experience inthe global management field and the marketing field, having served
as an officer at foreign companies for many years, and having been
engaged in corporate management as the head of marketing at thehead office of a U.S. company, as well as abundant knowledge
gained as an Outside Director at several listed companies. She has
contributed to improving the effectiveness of the Board of Directors
by actively and assertively providing advice and oversight withrespect to making measures more concrete for the Medium-term
Business Plan, etc. as a holding company, the importance of amarketing-oriented way of thinking, such as identifying targets andneeds, analyzing the factors and providing measures in cases when
there are gaps between the target and the actual results, etc. She has
contributed to the strengthening of the management human resources
function by providing advice as necessary as a member of theNomination Committee in the deliberation on the ideal structure of
the Board of Directors of the Company and its major subsidiaries,
focusing on succession plans, making transparent and fair personnel
decisions for executives, and confirming the status of candidates for
future senior management positions, etc., and as a member of theRemuneration Committee in the deliberation of policies and reviewof specific operational rules concerning the executive remuneration
system and the calculation method of stock-based remuneration andbonuses. In light of her track record, abundant experience and highlevel of insight, the Company expects her to contribute greatly to
management of the Group, and has accordingly appointed her as an
Outside Director. The Company has no interest in or relationshipwith her.

Name

KOIDE Hiroko(iii) Coordination between supervision by the Outside Directors, the internal audits and accounting audit, andrelationship with the internal control department
The Company’s Outside Directors, as members of the Board of Directors, make decisions on the basic
policy for management policy and management strategy of the Group, and execution of othermanagement-related operations, and fulfill the highly effective oversight function over the
management from the standpoint independent from the execution of operations. As stated in “(3)Status of audit” below, the Audit Committee conducts audits for the legal compliance andappropriateness of the execution of operations by Directors and Executive Officers by cooperatingwith the Accounting Auditor and utilizing internal organizations in accordance with the audit policy
and plan developed by the Audit Committee.
(3) Status of audit(i) Status of audit by Audit Committee
1) Organization, members and procedures of Audit Committee
The Audit Committee consists of four Audit Committee Members (as of the filing date of theannual securities report; one full-time member and three outside members).
Chairperson of the Audit Committee, HAKODA Junya, has a wealth of experience as a Certified
Public Accountant and extensive expertise in corporate accounting. Audit Committee Member
SEKI Tadayuki has served as CFO at Itochu Corporation and possesses considerable insight infinance and accounting. Moreover, Audit Committee Member SATO Rieko has a wealth ofexperience and extensive expertise as an attorney in the field of corporate law.
From the previous fiscal year, the Audit Committee Members clearly documented in the Rules of
Audit Committee the right of approval of the Audit Committee concerning appointments andtransfers of Audit & Supervisory Board Members in the Group companies to strengthen theauditing function in accordance with points made regarding the effectiveness evaluation of theBoard of Directors, and working to enhance the auditing systems of organizations, the Audit &Supervisory Board Members in the Group companies concurrently serve on the Audit Committee
Secretariat.

- 105 -

In accordance with the audit policy and plan developed by the Audit Committee, the Audit
Committee conducts audits for the legal compliance and appropriateness of the execution ofoperations by Directors and Executive Officers by cooperating with the Accounting Auditor andutilizing internal organizations, and prepares an audit report.
2) Activities of Audit Committee
In the current fiscal year, the Company held a total of 20 meetings of the Audit Committee. The
attendance of each Audit Committee member at the meetings is as follows.

Category

Attendance at the meetings of the
Audit Committee

Name(Note 1)Chairperson of Audit Committee(outside)

NISHIKAWA Koichiro(Note 2)Chairperson of Audit Committee(outside)

HAKODA Junya

Audit Committee Member (full-time)
Audit Committee Member (full-time)
Audit Committee Member (full-time)(Note 3)
TSUTSUMI Hiroyuki(Note 2)
MURATA Soichi(Note 2)
HAMADA Kazuko(Note 3)

6/6
14/14
6/6
6/6
14/14

Audit Committee Member (outside)

SATO Rieko

20/20

Audit Committee Member (outside)

SEKI Tadayuki

20/20

Notes:

1.
2.
3.

Based on the number of meetings held during officers’ terms of office.
Retired on May 27, 2021.
Assumed office on May 27, 2021.

The main activities and matters for discussion of the Audit Committee (held 20 times) and the
Audit Committee Meetings (held 15 times) were as follows.
In addition, the activities of the full-time Corporate Auditors included confirming circularapproval memos, attending important internal meetings, confirming auditing issues throughperiodic meetings with the Internal Audit Division, the Accounting Auditor, and the corporate
auditors of other Group companies, and have promoted the construction of an organization audit
structure while working to share information with other members.
Main activities
・ Conduct audits of the execution of duties by the Representative Executive Officer andexchange opinions
・ Audit the execution of duties of Directors and Executive Officers, and interview them・ Receive reports from the Internal Audit Division
・ Discuss the audit plan of the Accounting Auditor, exchange opinions and receive review
report・ Receive audit reports from corporate auditors of Group companies
・ Receive reports from Finance Division, etc.
・ Interview Risk Management Committee and Compliance Committee
・ Interview those responsible for the business report preparation process
・ Discuss with the Accounting Auditor regarding Key Audit Matters (KAM)
Main items for discussion
・ Audit policy, KAM, audit plan, allocation of work
- 106 -

・ Preparation of audit environment (organizational audit structure, etc.) and key issues to beaddressed
・ Status of compliance with laws and regulations
・ Construction and operation status of internal control system
・ Appropriateness of audits by the Accounting Auditor and evaluation of the Accounting
AuditorBased on the information received through these discussions, the Audit Committee makes
periodic audit reports to the Board of Directors, and offers guidance and proposals in the form of“audit findings” regarding matters deemed to be of particular importance.
(ii) Status of internal audit
1) Organization, members and procedures of internal audit
The Company has established an independent Internal Audit Division (nine members) under the
President and Representative Executive Officer. The Internal Audit Division verifies and evaluates
the legality and effectiveness of systems of corporate governance, risk management andcompliance management, in addition to performing audits on business operations of the Company
and the Group companies.
The Company shall adopt a dual-reporting system where both the President and Representative
Executive Officer and the Audit Committee shall receive reports, and audit results andimprovement measures related to audit findings are regularly reported on. As for orders related to
improvement measures from management, issues are promptly handled in collaboration with theaudited departments.
2) Coordination between the internal audits, auditing by the Audit Committee members andaccounting audit, and their relationship with the internal control department
In addition to the contents described in “(i) Status of audit by Audit Committee,” when theInternal Audit Division prepares its audit policy and plan, it submits the relevant report in advanceto the Audit Committee. In addition, its audit results are regularly reported to President andRepresentative Executive Officer and the Audit Committee. The Audit Committee is authorized tomake requests to the Internal Audit Division on the execution of additional audits, or directly
conduct audits if necessary. Regarding personnel appointment and changes related to the
Executive General Manager of the Internal Audit Division, the Audit Committee’s advanceapproval is required.
(iii) Status of accounting audit
1) Name of audit firm
Ernst & Young ShinNihon LLC
2) Consecutive audit period
70 years
Note: The Company is a holding company jointly established by The Daimaru, Inc. andMatsuzakaya Holdings Co., Ltd. through transfer of shares in 2007, and the above
consecutive audit period includes the consecutive audit period of The Daimaru, Inc.
3) Certified public accountants who executed the audit duties
TAKENOUCHI Kazunori (Consecutive audit period: 4 years)
SHIBAYAMA Yoshihisa (Consecutive audit period: 5 years)
MATSUURA Hiroshi (Consecutive audit period: 5 years)
4) Breakdown of support staff for audit operations
Support staff for financial audit operations consist of 30 certified public accountants and 41
others.

- 107 -

5) Policies and reasons for selecting audit firm
The Audit Committee draws up criteria in advance for selecting and evaluating the Accounting
Auditor, that is composed of matters relating to the auditor’s independence, expertise and otheraspects of executing the audit, with the aim of ensuring that the Accounting Auditor properly
carries out the audit. On the basis of that criteria, the Audit Committee takes into account theopinions of the management team, and then makes decisions on proposals for election, dismissal
and non-reappointment of the Accounting Auditor that are submitted to the Shareholders Meeting.
The Audit Committee is to take necessary measures that include dismissing the Accounting
Auditor upon resolution of the committee, or otherwise making a decision on proposals to dismissor not reappoint the Accounting Auditor submitted to the Shareholders Meeting, in the event that
the Audit Committee deems it appropriate to dismiss or otherwise not reappoint the Accounting
Auditor either if there are grounds for dismissal as provided for in Article 340, paragraph (1) of
the Companies Act of Japan, or if a situation arises whereby the audit of the Company has beensignificantly impeded such as would be the case if the supervisory authorities were to issue anorder requiring suspension of auditing activities.
6) Assessment of audit firm by Audit Committee
The Audit Committee assesses the appropriateness and validness of audit activities by the
Accounting Auditor based on the Accounting Auditor Evaluation Standards established by the
Audit Committee.
(iv) Details of audit fee, etc.
1) Remuneration to certified public accountants, etc. for audits
Previous fiscal year
Fees for audit
certification services(Millions of yen)

Category

Current fiscal year

Fees for non-audit
services(Millions of yen)

Fees for audit
certification services(Millions of yen)

Fees for non-audit
services(Millions of yen)

Reporting company

102

10

119

13

Consolidated
subsidiaries

143

–

175

9

245

10

295

23

Total
Note:

The content of non-audit service for the Company is accounting support in real estate transfer for the previous fiscal year
and support for application of the standard for revenue recognition in the current fiscal year.
The content of non-audit service at consolidated subsidiaries is support for construction of internal control system.

2) Remuneration to companies which are comprised of the same network of certified public
accountants, etc. for audits (Ernst&Young).
Previous fiscal year
Fees for audit
certification services(Millions of yen)

Category

Current fiscal year

Fees for non-audit
services(Millions of yen)

Fees for audit
certification services(Millions of yen)

Fees for non-audit
services(Millions of yen)

Reporting company

–

3

–

217

Consolidated
subsidiaries

5

4

6

0

5

7

6

217

Total
Note:

The content of non-audit service for the Company is taxation support, etc. in real estate transfer for the previous fiscal year
and support operations related to accounting systems in the current fiscal year.
The content of non-audit service at consolidated subsidiaries is taxation support operations, etc.

3) Policy on determining audit fee
The fee is determined in view of the audit system, the number of days for audit, and other factors.

- 108 -

4) Rationale for Audit Committee’s agreement on remuneration of the Accounting Auditor, etc.
The Audit Committee furnished its agreement with respect to the amount of remuneration, etc.
provided to the Accounting Auditor, which has been deemed appropriate upon conducting areview regarding audit appropriateness with respect to the Accounting Auditor’s audit plan, its
execution of duties, the basis used for calculating remuneration estimates and other factors.
(4) Remuneration, etc. for officers(i) Matters regarding the policy on determination of the amounts of compensation paid to officers and thecalculation method thereof
The Company established and published an Officer Remuneration Policy (hereinafter the “Policy”) in
April 2017. On May 27, 2021, the Remuneration Committee with a majority of independent Outside
Directors embarked on review of the Officer Remuneration System in alignment with the new
Medium-term Business Plan to ensure that officer remuneration functions as an incentive forachieving and promoting sustainability management. The Policy has been revised accordingly and is
now in effect.
1) Basic policy for officer remuneration
The Company’s officer remuneration system is operated under the following basic policy with aview to realizing and promoting sustainability management (pay for purpose). The same basic
philosophy is also established by Daimaru Matsuzakaya Department Stores and PARCO, which
are major subsidiaries of the Group.
 Contribute to the sustainable growth and increase of the corporate value of the Group over the
medium to long term, and also be compatible with its corporate culture Establish a remuneration system that facilitates the achievement of duties (mission) based on
management strategies of professional corporate managers.
 Remuneration levels that can secure and retain human resources who have the desirable
managerial talent qualities required by the Company.
 Increase shared awareness of profits with shareholders and awareness of shareholder-focusedmanagement.
 Enhanced transparency and objectivity in the remuneration determining process.
2) How to determine remuneration levels
To make quick responses to changes in the external environment and the market environment, theCompany refers to objectively verifiable remuneration survey data from specialist externalorganizations (such as from “Manager Remuneration Survey” of Human Resources Governance
Leaders Co., Ltd.), adopts the officer remuneration levels of companies in the same industry(department stores / retailers) and companies of a comparable size (selected based on market
capitalization and consolidated operating profit) in other industries as a benchmark, and compares
the remuneration levels of its Executive Officers and Directors with the benchmark every year. In
principle, the peer group should comprise 30 to 50 companies (including portions that aresupermarkets and drugstores). The same treatment shall apply to the Directors and Executive
Officers of Daimaru Matsuzakaya Department Stores and PARCO.
3) Composition of remuneration<Executive Officer>
Remuneration for Executive Officers shall comprise (i) basic remuneration (monetary
remuneration) in accordance with mission grade, (ii) bonuses (monetary remuneration) based on
individual evaluations conducted each business year, and (iii) performance shares linked to theconsolidated performance achievement rate, etc. provided in the Medium-term Business Plan as astock-based remuneration system (trust-type stock-based remuneration).
With regard to the composition of remuneration for Executive Officers, the ratio of performancelinked remuneration and of stock-based remuneration is set with an awareness of its function as ahealthy incentive to help achieve sustainable growth.

- 109 -

Type ofremuneration

Payment basis

Basicremuneration(fixed)Determined separately for each mission grade

Payment
methodComposition of remuneration(%)
President

Officers otherthan President

Monthly
payment in cash

38.5

45.4

Annual payment
in cash

23.0

27.3

38.5

27.3

Base amount by mission grade × Rate of change*1*1. The rate of change is based on a calculation of scores using thequantitative and qualitative evaluations below.
Evaluation
weights (%)

Details
Quantitative evaluation Fiscal year’s
financial<70%>
evaluation

Consolidated
operating profit*2

70

Level ofachievement ofaction plan forachieving fiscal
year’s financial
evaluation

Bonuses(variable)

20

Qualitative evaluation Fiscal year’s
non-financial Level of<30%>
achievement ofevaluation
action plan forachieving nonfinancial targets inline with materiality
issues10[Short term: 40%] Base amount by mission grade × Performance achievement
factor*3*3. Calculated based on the following measures of achievement*4
Annual payment
Evaluation
weights (%)

Details
Consolidated operating profit

in stocks*5100[Medium to long term: 60%] Base amount by mission grade × Performance
Performanceachievement factor*3
linked stock- *3. Calculated based on the following measures of achievement*4
based
Evaluation
Details
remuneration
At theweights (%)(variable)
expiration of theConsolidated operating profit
40
term of each
Financial indicators
Medium-term
ROE
40
<80%>
Business Plan in
GHG reductions (Scope 1 &stocks*5
10
2 emissions)Non-financial indicators
Goal achievement for ratio of<20%>
women in management
10
positions*2. In principle, the target figures are based on consolidated financial indicators but if an officer is in charge of a certain business,target figures for that business are used.
*4. The performance-linked factor for performance-linked stock-based remuneration is calculated by the following calculation
method: The rate of change for ratio of women in management positions is evaluated using fiscal 2020 results as the reference.
Actual results = Results - fiscal 2020 results, Target = 26% - fiscal 2020 results
Performance target achievement
200% or more
0% or more, but less than 200%
Less than 0%

Performance-linked factor
2
Actual results ÷ Target
0*5. In principle, the equivalent of 50% of the Company’s shares to be issued is converted and paid as cash to provide funds forpayment of tax.
However, in cases where there are undisclosed material facts in the Company, the Company’s shares will not be converted.

- 110 -

(Basic remuneration)
Basic remuneration is positioned as a fixed remuneration, and is decided for each mission grade
based on the size (weight) of the responsibility borne by each officer. Payments are made every
month in the form of money.
(Bonuses)
Bonuses are paid as performance-linked remuneration to facilitate the achievement of goals set foreach fiscal year as milestones for the Medium-term Business Plan, and evaluation for the bonuses
is carried out using the fiscal year’s financial indicators, serving as quantitative evaluation, andthe fiscal year’s non-financial indicators, which include qualitative evaluation. For the fiscal
year’s financial indicators, the Company evaluates the level of achievement against target figures
set for consolidated financial indicators announced after resolution by the Board of Directors at
the start of each fiscal year (where the officer is in charge of a certain business, the target figures
for that business are used). For the fiscal year’s non-financial indicators, the Company evaluates
the level of achievement of the action plan for achieving financial indicators for each fiscal year
and the action plan for achieving non-financial targets in accordance with each officer’s mission
based on the Company’s materiality issues. Taking the weighting of the fiscal year’s financial andnon-financial indicators as 70:30, one-third of the fiscal year’s non-financial indicators (10% of
the total weight) is taken as the evaluation of the action plan for achieving the Company’s
materiality issues. For the fiscal year’s financial indicators, the evaluation is made based on theachievement level of the fiscal year’s target, using the forecast figure of the consolidated
operating profit announced at the start of the fiscal year (IFRS based). Where the officer is incharge of a certain business, the target figures for operating profit for that business decided by theCompany’s Board of Directors at the start of the fiscal year are used. The Company selected theindicators referred to above because they are linked to the respective indicators mentioned in theMedium-term Business Plan. For the fiscal year’s non-financial indicators, the President, who isthe evaluator, conducts an interview with each Executive Officer (the Chairman of the Board of
Directors conducts an interview with the President) at the start of the fiscal year to formulate an
action plan based on each Executive Officer’s mission.
(Performance share (Performance-linked stock-based remuneration))
Performance-linked stock-based remuneration is issues of the Company’s shares linked to theconsolidated performance achievement rate, etc. provided in the Medium-term Business Plan.
This remuneration is designed to help the Group achieve sustainable growth and increase
corporate value over the medium to long term. When the shares are issued, in principle theequivalent of 50% of the Company’s shares to be issued is converted and paid as cash to provide
funds for payment of tax. However, in cases where there are undisclosed material facts in the
Company, the Company’s shares will not be converted. Under this system, 60% of the entire
amount of performance-linked stock-based remuneration will be issued in a single issuance at theend of the Medium-term Business Plan, with the remaining 40% to be issued each year in order topromote management from the shareholders’ perspective. Of the portion issued at the end of theMedium-term Business Plan, 80% is evaluated by financial indicators and is weighted so that 40%
is evaluated based on consolidated operating profit and 40% on ROE, being the numerical targetsof the Medium-term Business Plan (IFRS based) announced following a resolution of the Boardof Directors. The remaining 20% is evaluated based on non-financial indicators. For non-financial
targets, the system bases evaluation on a weighting of 10% for GHG reductions (scope 1 & 2
emissions) and 10% for raising the ratio of women in management positions. Regarding the
portion issued each year, the level of achievement with respect to figures announced in the initial
forecast (IFRS based) following a resolution of the Board of Directors will be evaluated based
only on consolidated operating profit. The fluctuation range for remuneration in accordance withthe performance achievement rate is between 0% and 200%.

- 111 -

[Performance-linked stock-based remuneration targets]
Target figures for medium tolong term

KPI
Profitability(i)Efficiency

(ii)
(iii)

Nonfinancial(iv)

Consolidated operating profit(Millions of yen)
ROE(%)
GHG reductions (Scope 1 & 2 emissions)(%)
Raise the ratio of women in management
positions(%)

40,300(FY2023)(at the end of7

FY2023)(compared with(40)

FY2017)(at the end of
FY2023)26

Note:

KPI stands for Key Performance Indicator.

Note:

For the short term, only (i) consolidated operating profit is used. The target figure used isthe forecast figure (IFRS based) for the fiscal year announced in the Company’s financial
results reports each year in April.

(Targets and results of indicators for performance-linked remuneration in the current fiscal year
(from March 2021 to February 2022))(Millions of yen)Type of remuneration
Bonuses

Performancelinked stockbased
remuneration

TargetResults

Financial
perspective

Consolidated operating profit

11,0009,380

Short-term

Consolidated operating profit

11,000

9,380

–

–

Consolidated operating profit
ROE
Medium-term

GHG reductions
Ratio of women in management
positions<Director>
Non-executive Directors’ remuneration shall consist only of fixed remuneration, which shall be (i)basic remuneration (monetary remuneration) in accordance with responsibilities and (ii) restricted
stock (non-performance-linked stock-based remuneration, which is trust-type stock-based
remuneration), which is not linked to performance, as part of the stock-based remuneration
system.
4) Remuneration determination process
To ensure the appropriateness of the level and amount of remuneration, and the transparency ofdecision-making processes, decisions are made by deliberation and resolution of theRemuneration Committee comprising independent Outside Directors and a non-executive
Chairman of the Board of Directors, and headed by an independent Outside Director. Since themembers of the Company’s Remuneration Committee and its Nomination Committee are thesame, they can coordinate together in activities related to the areas of nomination andremuneration of management, including selection and evaluations. The Remuneration Committee
determines the policy for deciding the content of individual remuneration for officers of theCompany, Daimaru Matsuzakaya Department Stores Co. Ltd. and PARCO Co., Ltd. (Directors,
Executive Officers and Corporate Officers), as well as deciding the content of individual
remuneration for Directors and Executive Officers of the Company. The Committee alsodeliberates and resolves internal regulations and other rules for remuneration of the Company’s
Directors and Executive Officers. The remuneration details for individual officers of Daimaru
Matsuzakaya Department Stores and PARCO are deliberated by the nomination and remuneration- 112 -

committees (whose members include independent Outside Directors of the Company), which areestablished at the discretion of each company, and are decided by each company’s Board of
Directors, after being resolved by each company’s Annual Shareholders Meeting if such approvalis required.
It is planned that the Remuneration Committee shall meet at least four times a year. Revisions of
the officer remuneration system will be undertaken based on Medium-Term Business Plan
periods. The Company will revise the level of basic remuneration during the Medium-term
Business Plan if it is necessary to significantly revise basic remuneration due to extreme changes,
etc. in the external environment. In the current fiscal year, the Remuneration Committee held 11
meetings.
In addition, the Company appoints an external remuneration consultant (Human Resources
Governance Leaders Co., Ltd.) with a view to introducing objective viewpoints from outside theCompany and expertise on officer remuneration systems. With its support, the Company reviews
its remuneration levels and remuneration system in light of external data, economic environment,
industry trends, business conditions and corporate culture, among others.
5) Forfeiture of remuneration, etc. (clawback/malus clauses)
With regard to bonuses and stock-based remuneration, in cases where the Board of Directors has
resolved that serious accounting errors or fraudulent adjustments after the settlement of accounts
have occurred, or in cases where serious infringements of the delegation agreement, etc. between
the Company and an officer have taken place, or in cases where a person has resigned for theirown reasons during their tenure against the wishes of the Company, the right to be paid/issued
remuneration may be forfeited, and the Company may demand the repayment of remuneration
already paid or issued.
Furthermore, if a significant change occurs in the management environment, and so forth, theRemuneration Committee may deliberate reducing the amount of officer remuneration in cases
where it receives a submission from Executive Officers and Directors volunteering to reduce theirremuneration.
6) Stock acquisition and holding
Any shares of the Company acquired by Executive Officers as stock-based remuneration shallcontinue to be held by respective Executive Officers at least for three years from the grant date of
the shares (or at least for one year after they retire from the office of Executive Officer). The
purpose of this requirement is to deepen the common interest of shareholders and officers. In
particular, the purpose of granting shares of the Company to Executive Officers who areresponsible for business execution as remuneration through performance-linked stock-based
remuneration is to provide additional incentive to them to work for the improvement of thefinancial performance and corporate value of the Company from the medium- to long-term
perspective.
Directors and Executive Officers of Daimaru Matsuzakaya Department Stores and PARCO shalladopt the same policy for their acquisition and holding of the Company’s shares.
(ii) Total amount of remuneration, etc. by each category of Directors and Executive Officers, total amount of
remuneration, etc. by type, and number of Directors and Executive Officers to be paid
Total amount of remuneration, etc. by type(Millions of yen)

Number ofrecipientdirectors (andother officers)(Persons)

Total amount of
remuneration,
etc.
(Millions of yen)Basicremuneration

Performancelinked bonuses

Performancelinked stockbased
remuneration

Nonperformancelinked stockbased
remuneration

197

155

–

–

42

12

[102]

[84]

[–]

[–]

[18]

[8]

Executive
Officer

447

213

95

139

–

19

Total

645

368

95

139

42

31

Category of
officer

Director[of which,OutsideDirector]- 113 -

Notes:

1.
2.

3.
4.
5.

6.

7.

Other than the above, the total amount of remuneration, etc. received by Outside Directors from subsidiaries of theCompany in the current fiscal year is ¥14 million.
In the above table, the remuneration, etc. for Directors of ¥197 million includes ¥24 million (including nonperformance-linked stock-based remuneration) paid to four Directors who held the post between March 1 and May 27,
2021.
The remunerations, etc. paid to Directors who concurrently serve as Executive Officers as compensation for the
performance of duties during the term of the Executive Officers is shown in the Executive Officer row.
The remunerations, etc. that are paid as compensation for the performance of duties during the term of the Executive
Officers is shown in the Executive Officer row.
Beginning in the fiscal year ended February 28, 2018, to ensure steady execution of the Medium-term Business Planfor realizing the Group Vision, the Company has adopted the stock-based remuneration system using a trust for officers(a system of granting the Company’s shares to officers (in certain cases, the Company’s shares are converted into cash
within the trust and cash in the amount equivalent to their conversion value is paid) in accordance with the officers’
rank and level of achievement of the Medium-term Business Plan, etc.) The stock-based remuneration in the above
chart is the total recorded as expenses for the period under review. It is divided into performance-linked stock-based
remuneration corresponding to degree of achievement of single fiscal year results and degree of achievement of theMedium-Term Business Plan targets, as well as non-performance-linked stock-based remuneration for Directors who
do not execute business.
The figure in the “Performance-linked bonuses” column represents an amount recognized as a provision (expense),
factoring in the results of performance evaluation for the fiscal year ended February 28, 2022. The actual amounts to be
paid after factoring in the earnings performance assessment of each Executive Officer and amounts to be paid on an
individual basis will be determined by a meeting of the Remuneration Committee scheduled in or after April 2022.
The “Performance-linked stock-based remuneration” column reflects a reversal of provisions for short-term incentives
and medium-term and long-term incentives in the fiscal year ended February 28, 2021 (¥65 million for short-term
incentives and ¥356 million for medium- and long-term incentives), pursuant to the officer remuneration system set up
in alignment with the previous Medium-term Business Plan. In April 2021, however, the Company partially revised its
Officer Remuneration System, including its method for calculating the performance-linked factor, upon taking into
account contingencies with respect to earnings results having been substantially affected by the COVID-19 pandemic.
Accordingly, the Company recorded an additional provision of ¥29 million in relation to medium- and long-term
performance share to be paid in alignment with degrees of achievement with respect to targets set for the final fiscal
year of the previous Medium-term Business Plan. The provision of ¥29 million is included in the performance-linked
stock-based remuneration of ¥139 million for Executive Officers in the above table, and also includes ¥11 million
slated for payment to six Executive Officers who held the post between March 1, 2017, and February 28, 2021.

- 114 -

(iii) Total amount of consolidated remuneration, etc. per Director and Executive Officer
Total amount ofconsolidated
Category of officer
remuneration, etc.
(Millions of yen)

Name

Total amount of remuneration, etc. by type(Millions of yen)
Category ofcompany

PerformanceBasic
Performance- linked stockremuneration linked bonuses
based
remuneration

Nonperformancelinked stockbased
remuneration

YAMAMOTO
Ryoichi67

Director

Reporting company

43

–

8

16

HAMADA Kazuko

22

Director

Reporting company

16

–

–

6

YAGO Natsunosuke

19

Director (Note 1) Reporting company

16

–

–

3

HAKODA Junya

16

Director (Note 1) Reporting company

14

–

–

2

UCHIDA Akira

20

Director (Note 1) Reporting company

17

–

–

3

SATO Rieko

19

Director (Note 1) Reporting company

16

–

–

3

SEKI Tadayuki

19

Director (Note 1) Reporting company

16

–

–

3

KOIDE Hiroko

11

Director (Note 1) Reporting company

9

–

–

2

YOSHIMOTO
Tatsuya108

Executive Officer Reporting company

46

23

39

–

SAWADA Taro

72

Executive Officer Reporting company

40

12

20

–

MAKIYAMA Kozo

80

Executive Officer Reporting company

42

22

16

–

WAKABAYASHI
Hayato45

Executive Officer Reporting company

23

11

11

–

ONO Keiichi

29

Executive Officer Reporting company

14

8

7

–

HIRANO Hidekazu

38

Executive Officer Reporting company

20

10

8

–

HAYASHI Naotaka–

Executive Officer Reporting company

–

–

–

–

39

Executive Officer Reporting company

19

10

10

–

42

Executive Officer Reporting company

20

11

11

–

KAWASE Kenji–

Executive Officer Reporting company

–

–

–

–

HIRAI Yuji–

Executive Officer Reporting company

–

–

–

–

YAMAZAKI Shiro–

Executive Officer Reporting company

–

–

–

–

NOGUCHI Hideki–

Executive Officer Reporting company

–

–

–

–

UMEBAYASHI
Akira

–

Executive Officer Reporting company

–

–

–

–

NAKAYAMA
Takashi
MATSUDA
Hirokazu

Notes:

1.
2.
3.
4.

Independent Outside Director.
Lists only those who were officers as of the shareholders meeting of May 26, 2022.
Directors who concurrently serve as officers are listed in the “Executive Officer” column.
In the case of Executive Officers who serve concurrently at operating companies, remuneration paid by each company
is included.

- 115 -

(5) Ownership of shares(i) Classification criteria and approaches for investment shares
The Company and the Group have defined the classification of investment shares held for the purposeof pure investment and investment shares held for purposes other than pure investment (crossshareholdings) as follows.
(Investment shares held for the purpose of pure investment)
Shares held exclusively for the purpose of profiting through fluctuations in share prices or from thereceipt of dividends(Investment shares held for any purpose other than pure investment)
Shares held because the Group judged that they are necessary for the promotion of the Group’sbusiness strategy, and that the holding of such shares will contribute to the increase of corporate value
in the medium to long term(ii) Ownership of shares in the Group
1) Investment shares held for any purpose other than pure investment
A. Holding policy and the method to verify the reasonableness of the holding, as well as detailsof such verification by the Board of Directors concerning the appropriateness of the holdingof the respective stocks
The Group has prescribed the holding policy and method for validation of rationale of crossshareholdings, etc. in the Corporate Governance Policy as follows, and the Board of Directors
decides whether or not the holding is appropriate.
(Holding policy)
 Shares will not be newly acquired in principle.
 If listed shares (including deemed shareholdings) that are already held are judged to “not be
rational” based on the results of the validation of the rationale of holding, which occurs every
year, the Group will negotiate with corporate customers and business partners, and reduce themas appropriate upon receiving consent regarding sale method, period, etc.
 For unlisted shares, the Company’s executive management discussed whether or not tocontinue holding them, with a view to selling and reducing holdings. However, from thecurrent fiscal year, we will confirm the suitability of holding all shares, in the same way aslisted shares, from both qualitative and quantitative aspects, and strengthen our initiatives
towards reducing holdings.
(Method for validation of rationale)
The Group periodically validates the rationale of holding individual issues from the following
perspective.
 Qualitative validation
The perspective relating to business strategies such as maintaining harmonious and favorable
business relationships with corporate customers and business partners, and securing supply
chains Quantitative validation
The perspective relating to whether profitability by holding shares, including related trading
profits and dividends, exceed capital costs, etc.
(Details of verification by the Board of Directors concerning the appropriateness of the holding of
the respective stocks)
 The results of the above validation that takes place based on the holding policy, judgment
regarding the continuation or disposal of held shares, and reduction plan are discussed at themeeting of the Board of Directors held every August, and the Group confirms the reduction
result at the meeting of the Board of Directors held the following March.

- 116 -

As a result, the number of the Group’s cross shareholdings as of February 28, 2022 haddecreased by 6 stocks compared with the previous fiscal year-end to 163 stocks (of which, thenumber of stocks of listed companies excluding deemed holdings was 21).
Process for validation of rationale Validation is conducted with a focus on continued qualitative rationality in accordance with the
purpose at the time of acquisition.

Qualitative
perspective×

Holdings
to bereduced○Quantitative
perspectiveComprehensive
judgment

×

○

×

○
○: Rational
×: Not rational

Continued holdings

Schedule for validation of rationale, negotiation and reduction*

Implementation
periodContent of
implementation

X

First half

AugustX + 1 year
Secondhalf

MarchFirst half

Operating unit

Validation of rationale
Development of reduction
plan

Board ofDirectors

Negotiation/reduction

Decision on
Discussion continuation/
reduction
Confirmation: Efforts in : Year X (first year),

Negotiation/
reduction result- 117 -

August: X + 1 year,: X + 2 years

X + 2 years
Secondhalf

MarchFirst half

AugustSecondhalf

B. Number of issues and consolidated statement of financial position amount (IFRS)(Shares not listed)
Previous fiscal
year
Number of issues(security titles)
Consolidated
statement of financial
position amount(Millions of yen)

Increase or
decrease inmarket value

Current fiscal
year

Increase

Decrease

139

3

(7)

–

135

18,269

970

(42)

1,637

20,834

Increase

Decrease

Increase or
decrease inmarket value

23

–

(2)

–

21

4,427

–

(90)

(1,003)

3,334

Increase

Decrease

Increase or
decrease inmarket value

7

–

–

–

7

7,850

–

(34)

1,190

9,006

Reason for increasein number of shares

Acquisition
mainly aiming toacquire know-how
for newbusinesses,
strengthen
existing
businesses, etc.

(Shares other than those not listed)
Previous fiscal
year
Number of issues(security titles)*Consolidated
statement of financial
position amount(Millions of yen)

Current fiscal
year

Reason for increasein number of shares–(Deemed shareholdings)
Previous fiscal
year
Number of issues(security titles)*Consolidated
statement of financial
position amount(Millions of yen)

Current fiscal
year

Reason for increasein number of shares–* Of the issues, one issue is included in both shares other than those not listed and deemed shareholdings.

- 118 -



Changes in the number of cross-shareholdings (listed shares excluding deemed shareholdings)(Billions of yen)

(Issues)Amount recorded on consolidated
statement of financial position (Billions ofyen)
Number of issues held (Issues)

15.0

70
60

48

50

41

10.0

40
11.2

26

30

23
21

5.0

20
8.6

4.4

4.0

10
3.3
0

0.0
FY2017FY2018FY2019FY2020

FY2021(iii) Ownership of shares in the reporting company (Japanese GAAP)
As for the reporting company, the ownership is as follows.
1) Investment shares held for any purpose other than pure investment
A. Number of issues and carrying amount(Shares not listed)
Previous fiscal
year

Increase

Decrease

Year-end
valuation

Current fiscal
year

Number of issues(security titles)

5

2

–

–

7

Carrying amount(Millions of yen)

1,131

509

–

(4)

1,636

Increase

Decrease

Increase or
decrease inmarket value

Reason for increasein number of shares
Acquisition mainly
aiming to acquireknow-how for new
businesses,
strengthen existing
businesses, etc.

(Shares other than those not listed)
Previous fiscal
year

Current fiscal
year

Number of issues(security titles)

1

–

–

–

1

Carrying amount(Millions of yen)

28

–

–

(4)

24

Reason for increasein number of shares–

B. Information on the number of shares and carrying amount by issue of specified investment
shares and shares subject to deemed shareholding(Specified investment shares)
The Company validates the rationale of all cross-shareholdings based on the qualitative
perspective, which relates to business strategies such as maintaining harmonious and favorable
business relationships with corporate customers and business partners, and securing supply
chains, as well as the quantitative perspective, which relates to whether profitability by holding
shares, including related trading profits and dividends, exceed capital costs, etc.
- 119 -

The quantitative effects of shareholdings have not been provided from the viewpoint of trade
secrets, etc.

Issue nameCurrent fiscal year

Previous fiscal year

Number of shares(Shares)Number of shares(Shares)

Carrying amount(Millions of yen)

Carrying amount(Millions of yen)

Purpose of holding

Quantitative effects ofshareholding

Reason forincrease in
number ofsharesHolding of theCompany’s
shares–None(Quantitative standard)・ Not met

12,00012,000(Purpose of holding)(Comprehensive
judgment)

・ Made judgment tocontinue to holdtaking into
consideration the factthat this company is
・ Promotion of arts andindispensable forculturedeveloping art andculture in the area inwhich the reporting
company’s storesexist.
・ Contribution tocommunity
development

Misonoza Theatrical
Corporation

24

28(iv) Ownership of shares in Daimaru Matsuzakaya Department Stores Co. Ltd. (Japanese GAAP)
As for Daimaru Matsuzakaya Department Stores Co. Ltd. of which the carrying amount of investment
shares on the balance sheet is the largest among the Company and consolidated subsidiaries (company
with the largest holdings), the ownership of shares is as follows.
1) Investment shares held for any purpose other than pure investment
A. Number of issues and carrying amount(Shares not listed)
Previous fiscal
year

Increase

Decrease

Year-end
valuation

Current fiscal
year

Number of issues(security titles)

99

–

(5)

–

94

Carrying amount(Millions of yen)

2,709

–

(37)

–

2,672

Reason for increasein number of shares–(Shares other than those not listed)
Previous fiscal
year

Increase

Decrease

Increase or
decrease inmarket value

Current fiscal
year

Number of issues(security titles)*

17

–

(1)

–

16

Carrying amount(Millions of yen)

3,991

–

(41)

(917)

3,033

Increase

Decrease

Increase or
decrease inmarket value

Reason for increasein number of shares–(Deemed shareholdings)
Previous fiscal
year

Current fiscal
year

Number of issues(security titles)*

7

–

–

–

7

Carrying amount(Millions of yen)

7,850

–

(34)

1,190

9,006

Reason for increasein number of shares–* Of the issues, one issue is included in both shares other than those not listed and deemed shareholdings.

- 120 -

B. Information on the number of shares and carrying amount by issue of specified investment
shares and shares subject to deemed shareholding(Specified investment shares)
The Group validates the rationale of all cross-shareholdings based on the qualitative perspective,
which relates to business strategies such as maintaining harmonious and favorable business
relationships with corporate customers and business partners, and securing supply chains, as wellas the quantitative perspective, which relates to whether profitability by holding shares, including
related trading profits and dividends, exceed capital costs, etc.
The quantitative effects of shareholdings have not been provided from the viewpoint of trade
secrets, etc.
Of the following, the Company has obtained consent for the sale of five stocks.
Current fiscal Previous fiscal
year
year

Issue name

Number ofshares(Shares)Number ofshares(Shares)

Carrying
amountCarrying
amount(Millions ofyen)(Millions ofyen)

222,893

222,893(Segment)(Quantitative standard)

310,400

310,400

Stable merchandise sales

Maintaining goodbusiness relationships

Made judgment tocontinue to hold taking
into consideration the factthat this is a corecompany in the area inwhich stores of Daimaru
Matsuzakaya Department
Stores exist, and therecognition that it hascontinuously contributed
to a stable level of profit.

(Segment)(Quantitative standard)

Department store(Comprehensive judgment)Stable merchandise sales

Maintaining goodbusiness relationships- 121 -

–

Yes

–

Yes

Not met(Purpose of holding)591

Reason for Holding ofincrease inthenumber of Company’s
sharesshares

Not met(Comprehensive judgment)

1,395

OSAKA GAS CO., LTD.

654

Department store(Purpose of holding)Toho Gas Co., Ltd.

685

Quantitative effects ofshareholding

Purpose of holding

Made judgment tocontinue to hold taking
into consideration the factthat this is a corecompany in the area inwhich stores of Daimaru
Matsuzakaya Department
Stores exist, and therecognition that it hascontinuously contributed
to a stable level of profit.

Current fiscal Previous fiscal
year
year

Issue name

Number ofshares(Shares)Number ofshares(Shares)

Carrying
amountCarrying
amount(Millions ofyen)(Millions ofyen)

Purpose of holding(Segment)
200,000

200,000 

Department store(Purpose of holding)Misonoza Theatrical
Corporation
403

568,205

Contribution tocommunity development

Promotion of arts andculture476

568,205

Not met(Comprehensive judgment)Made judgment tocontinue to hold taking
into consideration the factthat this company is
indispensable fordeveloping art and culturein the area in which storesof Daimaru Matsuzakaya
Department Stores exist.

(Quantitative standard)

Department store(Comprehensive judgment)Advertisement including
public relations activities

Maintaining goodbusiness relationships

318

313

82,20082,200 (Segment)
Department store

Made judgment tocontinue to hold taking
into consideration the factthat this is a corecompany in the area inwhich stores of Daimaru
Matsuzakaya Department
Stores exist, and therecognition that it hascontinuously contributed
to a stable level of profit.


207

209 



171,337 

Hakuyosha Co., Ltd.
203

144,803166

Department store

–

None

–

Yes

–

None

(Quantitative standard)

Not met(Comprehensive judgment)Provision of services tocustomers
Maintaining goodbusiness relationships

Made judgment tocontinue to hold taking
into consideration the factthat it is indispensable formaintaining customer
service.

(Segment)(Quantitative standard)

Department store

144,803 (Purpose of holding)

Meiko Trans Co., Ltd.

Yes

Maintaining goodbusiness relationships(Purpose of holding)

402

–

Met

Stable merchandise sales(Segment)
171,337

None(Quantitative standard)(Purpose of holding)

ANA HOLDINGS INC.

–

Not met(Purpose of holding)LTD.

Reason for Holding ofincrease inthenumber of Company’s
sharesshares(Quantitative standard)(Segment)

CHUBU-NIPPONBROADCASTING CO.,

Quantitative effects ofshareholdingStable merchandise sales

Maintaining goodbusiness relationships

166- 122 -

Not met(Comprehensive judgment)Made judgment tocontinue to hold taking
into consideration the factthat this is a corecompany in the area inwhich stores of Daimaru

Current fiscal Previous fiscal
year
year

Issue name

Number ofshares(Shares)Number ofshares(Shares)

Carrying
amountCarrying
amount(Millions ofyen)(Millions ofyen)

Quantitative effects ofshareholding

Purpose of holding

Reason for Holding ofincrease inthenumber of Company’s
sharessharesMatsuzakaya Department
Stores exist.
(Segment)
42,50042,500 

Department store(Quantitative standard)Met(Purpose of holding)Toppan Printing Co., Ltd.
95

52,00052,000

LTD.

6,600



Maintaining goodbusiness relationships

6,600(Quantitative standard)

Department store(Comprehensive judgment)Stable merchandise sales

Maintaining goodbusiness relationships(Quantitative standard)(Comprehensive judgment)Stable merchandise sales

Maintaining goodbusiness relationships

79,200 

CORPORATION
52

Department store

Sangetsu Corporation
38

36



Stable merchandise sales

Maintaining goodbusiness relationships

Department store

Made judgment tocontinue to hold taking
into consideration therecognition that it hascontinuously contributed
to a stable level of profit.

–

None

–

None

–

None

(Quantitative standard)

Not met(Purpose of holding)(Comprehensive judgment)Stable merchandise sales

Maintaining goodbusiness relationships- 123 -Yes

Not met24,000 –(Quantitative standard)(Comprehensive judgment)(Segment)
24,000Made judgment tocontinue to hold taking
into consideration therecognition that it hascontinuously contributed
to a stable level of profit.

(Purpose of holding)66*1

Not met(Purpose of holding)

59

WASHINGTON HOTEL

Made judgment tocontinue to hold taking
into consideration therecognition that it hascontinuously contributed
to a stable level of profit.

(Segment)
Department store

Yes

Not met(Purpose of holding)(Segment)
79,200–(Segment)

98

OKAYA & CO., LTD.

62

Securing supply chain

71

YOMEISHU SEIZO CO.,92



Made judgment tocontinue to hold taking
into consideration therecognition that it hascontinuously contributed
to a stable level of profit.

Current fiscal Previous fiscal
year
year

Issue name

Number ofshares(Shares)Number ofshares(Shares)

Carrying
amountCarrying
amount(Millions ofyen)(Millions ofyen)

Purpose of holding

21,750 

THE ROYAL HOTEL,LIMITED24

Department storeStable merchandise sales

Maintaining goodbusiness relationships

26,620 

Department store(Purpose of holding)

Ltd.


13

16 

1,155

1,155 Made judgment tocontinue to hold taking
into consideration therecognition that it hascontinuously contributed
to a stable level of profit.



10

12 

5,000

5,000 Department storeDepartment store

–57,973

–

41

–

None

–

None

(Quantitative standard)(Purpose of holding)

SERVICE CO., LTD.

Yes

Maintaining goodbusiness relationships

Inc.

ISEWAN TERMINAL–

Met

Stable merchandise sales

Yamaguchi Financial Group,

3 

None

(Quantitative standard)(Segment)

3–

Maintaining goodbusiness relationships(Purpose of holding)


None

Met

Stable merchandise sales(Segment)

Rinnai Corporation–(Quantitative standard)

Hayashikane Sangyo Co.,*2

Not met(Comprehensive judgment)(Segment)
26,260(Purpose of holding)28

Reason for Holding ofincrease inthenumber of Company’s
sharesshares(Quantitative standard)(Segment)
21,750Quantitative effects ofshareholdingMet

Stable merchandise sales
Maintaining goodbusiness relationships––*1. Held by Toppan Printing Co., Ltd. and its subsidiary TOPPAN FORMS CO., LTD.
*2. All sold in the current fiscal year upon reaching an agreement.

(Deemed shareholdings)
Shares of which the holding is considered by the Company to contribute to the increase of
corporate value in the medium to long term have been contributed to the retirement benefit trust
for the purpose of achieving sound pension financing in Daimaru Matsuzakaya Department Stores
Co. Ltd., a subsidiary of the Company.
The right of instructions for the exercise of voting rights is possessed by Daimaru Matsuzakaya
Department Stores Co. Ltd.
Furthermore, the quantitative effects of shareholdings have not been provided from the viewpointof trade secrets, etc.
Of the following, the Company has obtained consent for the sale of six stocks.
- 124 -

Issue nameCurrent fiscal Previous fiscal
year
year
Number of
Number ofsharesshares(Shares)(Shares)
Carrying
Carrying
amountamount(Millions of (Millions of
yen)
yen)

(Purpose of holding)
4,913,000

4,913,000



Mitsubishi UFJ Financial

Quantitative effects ofshareholding

Purpose of holding

Financial transactions
and collection ofbusiness information
Maintaining goodbusiness relationships(Quantitative standard)




2,741

(Purpose of holding)
670,500

670,500Financial transactions
and collection ofbusiness information



Sumitomo Mitsui TrustHoldings, Inc.

Not met(Comprehensive judgment)Group, Inc.
3,498

Reason for Holding ofincrease inthenumber of Company’s
sharessharesMade judgment tocontinue to hold taking
into consideration therelationship with thecompany whose shares
we hold, and therecognition that it hascontinuously contributed
to a stable level of profit.

–(Quantitative standard)

Not met(Comprehensive judgment)Made judgment to

Maintaining goodcontinue to hold taking

business relationships

into consideration the–relationship with this
2,755

None

2,348

Yes
*1

company, and therecognition that it hascontinuously contributed
to a stable level of profit.

280,000

280,000(Purpose of holding)

Sumitomo Mitsui Financial
Group, Inc.

Financial transactions(Quantitative standard)Metand collection of
1,153

1,047

–

business information


Yes
*2

Maintaining goodbusiness relationships(Segment)
300,000

 Department store
300,000 (Purpose of holding)(Quantitative standard)

Not met(Comprehensive judgment)Stable merchandise sales

Maintaining goodcontinue to hold taking

business relationships

into consideration theMade judgment tofact that this is a core

OSAKA GAS CO., LTD.

company in the area inwhich stores of Daimaru
632

571

Matsuzakaya Department
Stores exist, and therecognition that it hascontinuously contributed
to a stable level of profit.

- 125 -–Yes

Issue nameCurrent fiscal Previous fiscal
year
year
Number of
Number ofsharesshares(Shares)(Shares)
Carrying
Carrying
amountamount(Millions of (Millions of
yen)
yen)

(Segment)
270,000

270,000



Department store(Purpose of holding)
YAMATO HOLDINGS CO.,Reason for Holding ofincrease inthenumber of Company’s
sharesshares(Quantitative standard)

Not met(Comprehensive judgment)

Securing supply chain

Maintaining goodcontinue to hold taking

business relationships

into consideration the

LTD.
606

Quantitative effects ofshareholding

Purpose of holdingMade judgment to
–

Yes

–

None

–

None

fact that it is756

indispensable formaintaining customer
service.
(Segment)
102,700

115,000



Department store(Purpose of holding)OUG Holdings Inc.
*3


284

324

Stable merchandise(Quantitative standard)

Not met(Comprehensive judgment)Made judgment topurchasing

continue to hold taking

Maintaining good

into consideration thebusiness relationships

recognition that it hascontinuously contributed
to a stable level of profit.

(Purpose of holding)
33,00033,000Financial transactions
and collection ofbusiness information

The Nanto Bank, Ltd.
7059

(Quantitative standard)

Not met(Comprehensive judgment)Made judgment to

Maintaining goodcontinue to hold taking

business relationships

into consideration therelationship with thecompany whose shares
we hold.

*1. Held by Sumitomo Mitsui Trust Holdings, Inc.’s subsidiary Sumitomo Mitsui Trust Bank, Limited.
*2. Held by Sumitomo Mitsui Financial Group, Inc.’s subsidiaries Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui
Card Company, Limited.
*3. Partially sold in the current fiscal year upon reaching an agreement.

- 126 -

V. Financial Information
1. Basis of preparation of the consolidated and non-consolidated financial statements(1) Pursuant to the provisions of Article 93 of the “Ordinance on Terminology, Forms, and Preparation
Methods of Consolidated Financial Statements” (Ordinance of the Ministry of Finance No. 28 of 1976;
hereinafter referred to as the “Ordinance on Consolidated Financial Statements”), the consolidated
financial statements of the Company have been prepared in compliance with International Financial
Reporting Standards (“IFRS”).
(2) The non-consolidated financial statements of the Company have been prepared in accordance with the“Ordinance on Terminology, Forms, and Preparation Methods of Financial Statements” (Ordinance of the
Ministry of Finance No. 59 of 1963; hereinafter referred to as the “Ordinance on Financial Statements”).
The Company meets the criteria of a company allowed to file specified financial statements under the
Financial Instruments and Exchange Act and prepares non-consolidated financial statements pursuant to
the provisions of Article 127 of the Ordinance on Financial Statements.
(3) The amounts presented in this report are rounded down to the nearest million yen.
2. Note on independent audit
The consolidated financial statements for the fiscal year (from March 1, 2021 to February 28, 2022) and thenon-consolidated financial statements for the fiscal year (from March 1, 2021 to February 28, 2022) wereaudited by Ernst & Young ShinNihon LLC in accordance with Article 193-2, paragraph (1) of the Financial
Instruments and Exchange Act.
3. Special efforts to ensure the appropriateness of the consolidated financial statements, etc. and development ofa system for appropriate preparation of the consolidated financial statements, etc. in accordance with IFRSThe Company makes special efforts to ensure the appropriateness of the consolidated financial statements, etc.
and develops a system for appropriate preparation of the consolidated financial statements, etc. in accordancewith IFRS. The details of such are as follows:(1) To develop a system for ensuring correct understanding of accounting standards, etc. and appropriate
responses to any changes in accounting standards, etc., the Company has joined the Financial AccountingStandards Foundation and attends seminars, etc. held by the foundation and others.
(2) For the adoption of IFRS, the Company keeps up with the latest accounting standards by obtaining press
releases and standards published by the International Accounting Standards Board as needed. To prepare
appropriate consolidated financial statements under IFRS, the Company has developed accounting
policies of the Group in compliance with IFRS and performs accounting procedures based on thesepolicies.

- 127 -

1. Consolidated Financial Statements, etc.
(1) Consolidated Financial Statements
1) Consolidated Statement of Financial Position
Notes

As of February 28, 2021

As of February 28, 2022

Millions of yen

Millions of yen

AssetsCurrent assets
Cash and cash equivalents

6

128,925

93,278Trade and other receivables
Other financial assets

7,27
9,36

113,414
5,841

112,262
11,929Inventories
Other current assets

8
10

20,684
4,739

12,4594,954

273,605

234,884

11,20

493,644480,380

Right-of-use assets
Goodwill

13
12

157,819523

140,470
523

Investment property
Intangible assets

14
12

188,879
5,752

189,688
7,289

Investments accounted for using equity method
16
Other financial assets
9,20,36

37,81586,87038,761
79,977

Deferred tax assets
Other non-current assets

6,751
12,0618,209
12,721

Total current assets
Non-current assets
Property, plant and equipment

18
10

Total non-current assets
Total assets- 128 -

990,116

958,022

1,263,722

1,192,907

Notes

As of February 28, 2021

As of February 28, 2022

Millions of yen

Millions of yen

Liabilities and equity
Liabilities
Current liabilities
Bonds and borrowings

19,20

145,151

108,152

Trade and other payables
Lease liabilities

21
13,19

121,937
29,799116,107
28,554

Other financial liabilities

13,19,
20,36

30,211

29,915

1,957
914

4,485
954

Income tax payables
Provisions

23

Other current liabilities

24,27

Total current liabilities

59,95359,243389,926

347,413

Non-current liabilities
Bonds and borrowings
Lease liabilities

19,20
13,19

214,779
173,085

209,562
155,839

Other financial liabilities

13,19,
20,36

39,23736,741Retirement benefit liabilities
Provisions

22
23

19,781
10,534

19,416
9,553

Deferred tax liabilities
Other non-current liabilities

18
24

51,301
731

51,697563

509,451

483,373

899,378

830,787

Total non-current liabilities
Total liabilities
EquityCapitalShare premium

25
25

31,974
188,542

31,974
188,894

Treasury shares
Other components of equity

25
25(14,830)
9,578(14,780)
9,574

Retained earnings

25

136,906

134,705

352,171

350,368

Total equity attributable to owners of parent
Non-controlling interests

12,171

11,751

Total equity

364,343

362,120

1,263,722

1,192,907

Total liabilities and equity- 129 -

2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income
Notes

Sales revenue
Cost of sales

Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Millions of yen

Millions of yen

27
29

Gross profit

319,079(184,711)

331,484(183,642)

134,368

147,842

Selling, general and administrative expense

30(132,001)(136,123)

Other operating income
Other operating expense

28
31

5,711
(32,343)

11,068(13,406)(24,265)

9,380

962
(6,086)

1,335(5,890)

717

1,364

(28,672)

6,190

2,251

(2,225)

Profit (loss)(26,421)

3,964

Profit (loss) attributable to:
Owners of parent(26,193)

4,321

Non-controlling interests

(227)

(356)

(26,421)3,964(100.03)(100.03)

16.50
16.50

Operating profit (loss)
Finance income
Finance costs

32
32

Share of profit (loss) of investments accounted forusing equity method
Profit (loss) before tax
Income tax expense

18

Profit (loss)
Earnings per share
Basic earnings (loss) per share (Yen)
Diluted earnings (loss) per share (Yen)34
34- 130 -

Consolidated Statement of Comprehensive Income
Notes

Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Millions of yen(26,421)

Profit (loss)

Millions of yen
3,964

Other comprehensive income
Items that will not be reclassified to profit or loss
Financial assets measured at fair value throughother comprehensive income
Remeasurements of defined benefit plans
Share of other comprehensive income ofentities accounted for using equity method

33,36(2,106)

(52)

33

1,107

1,632

33

(94)

136

(1,093)

1,716

33

13

(13)

33

(26)

151

33

3

(0)

(9)

136

Total items that will not be reclassified to profit orloss
Items that may be reclassified to profit or loss
Cash flow hedges
Exchange differences on translation of foreign
operations
Share of other comprehensive income ofentities accounted for using equity method
Total items that may be reclassified to profit orloss
Other comprehensive income, net of tax(1,102)

1,853(27,523)

5,818

Owners of parent
Non-controlling interests(27,296)
(226)

6,173
(355)

Comprehensive income(27,523)

5,818

Comprehensive income
Comprehensive income attributable to:- 131 -

3) Consolidated Statement of Changes in Equity
Equity attributable to owners of parent
Other components of equity
Notes

Exchangedifferences ontranslation offoreign
operations

Cash flow
hedgesFinancial assets
measured at fairvalue throughothercomprehensive
incomeMillions of yen

Millions of yen

Millions of yen

CapitalShare premium

Treasury shares

Millions of yen

Millions of yen

Millions of yen

31,974

189,340(14,974)

Profit (loss)

–

–

–

–

–

–

Other comprehensive income

–

–

–

(24)

15

(2,107)

–

–

–

(24)

15

(2,107)

–

–

(3)

–

–

–

Balance at March 1, 2020

Total comprehensive
incomePurchase of treasury shares

25

(65)

(3)

11,710

Disposal of treasury shares

25

–

(0)

0

–

–

–

Dividends

26

–

–

–

–

–

–

–

(796)

148

–

–

–

–

–

–

–

–

53

–

(797)

144

–

–

53

31,974

188,542(14,830)

(89)

11

9,656

Profit (loss)

–

–

–

–

–

–

Other comprehensive income

–

–

–

150

(13)

(53)

–

–

–

150

(13)

(53)

Share-based paymenttransactions
Transfer from othercomponents of equity toretained earnings
Total transactions withownersBalance at February 28, 2021

Total comprehensive
incomePurchase of treasury shares

25

–

–

(32)

–

–

–

Disposal of treasury shares

25

–

(0)

0

–

–

–

Dividends

26

–

–

–

–

–

–

–

351

81

–

–

–

–

–

–

–

–

(86)

–

351

49

–

–

(86)

31,974

188,894(14,780)

60

(1)

9,516

Share-based paymenttransactions
Transfer from othercomponents of equity toretained earnings
Total transactions withownersBalance at February 28, 2022

- 132 -

Equity attributable to owners of parent
Notes

Balance at March 1, 2020

Other components of equity

Profit (loss)
Total comprehensive
incomeTotal

Non-controllinginterests

Total

Remeasurements of defined
benefit plans

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

11,641

169,206

387,188

12,493399,681–

Other comprehensive income

Retainedearnings––(26,193)(26,193)(227)(26,421)

1,013(1,103)–(1,103)0(1,102)

1,013(1,103)(26,193)(27,296)(226)(27,523)

–

–

(3)

–

(3)

Purchase of treasury shares

25–

Disposal of treasury shares

25

–

–

–

(0)

–

(0)

Dividends

26

–

–

(7,066)(7,066)(94)(7,161)

–

–

–

(648)

–

(648)

(1,013)

(959)

959

–

–

–

(1,013)(959)(6,107)(7,719)(94)(7,813)–

9,578

136,906

352,171

12,171

364,343

–

–

4,321

4,321

(356)

3,964

1,769

1,852

–

1,852

1

1,853

1,769

1,852

4,321

6,173

(355)

5,818

Share-based paymenttransactions
Transfer from othercomponents of equity toretained earnings
Total transactions withownersBalance at February 28, 2021
Profit (loss)
Other comprehensive income
Total comprehensive
incomePurchase of treasury shares

25

–

–

–

(32)

–

(32)

Disposal of treasury shares

25

–

–

–

0

–

0

Dividends

26

–

–

(8,377)(8,377)(64)(8,442)

–

–

–

433

–

433

(1,769)(1,855)

1,855

–

–

–

(1,769)(1,855)(6,522)(7,976)(64)(8,041)–

9,574

134,705

350,368

11,751

362,120

Share-based paymenttransactions
Transfer from othercomponents of equity toretained earnings
Total transactions withownersBalance at February 28, 2022

- 133 -

4) Consolidated Statement of Cash Flows
Notes

Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Millions of yen

Millions of yen

Cash flows from (used in) operating activities
Profit (loss) before tax(28,672)

6,190

50,361

49,62914,122(962)

1,136(1,335)

6,086

5,890

(717)

(1,364)0(2,666)

Loss on disposals of non-current assets

1,260

1,726

Gain on sales of shares of subsidiaries–(3,951)

Loss on sales of shares of subsidiaries

–

1,818

(1,522)

5,904

Depreciation and amortization expense
15

Impairment loss
Finance income
Finance costs
Share of loss (profit) of investments accounted forusing equity method
Loss (gain) on sales of non-current assets

Decrease (increase) in inventories
Decrease (increase) in trade and other receivables

26,608(536)

Increase (decrease) in trade and other payables(12,720)(4,159)

Increase (decrease) in retirement benefit liabilities

(267)

(365)

Decrease (increase) in retirement benefit assets

2,988

(407)

Other, net

5,666

228

62,232

57,737

Interest received

110

130

Dividends received

232

208

Interest paid
Income taxes paid

(6,028)(6,251)(5,808)(4,548)Subtotal

Income taxes refund

6,176

2,147

Net cash flows from (used in) operating activities

56,47149,866

Purchase of property, plant and equipment(14,729)(5,820)

Proceeds from sales of property, plant andequipment

7492(3,813)(2,601)

Cash flows from (used in) investing activities

Purchase of investment property

–

2,887

Purchase of investment securities

Proceeds from sales of investment property(1,401)(2,760)

Proceeds from sales of investment securities

1,480

2,503

91

3,479

Other, net(2,505)(3,469)Net cash flows from (used in) investing activities(20,870)(5,289)Proceeds from sales of shares of subsidiaries that
result in change in scope of consolidation

19- 134 -

NotesFiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Millions of yen

Millions of yen

Cash flows from (used in) financing activities
Net increase (decrease) in current borrowings

19(13,000)–

Net increase (decrease) in commercial papers

19

66,001(54,998)

Proceeds from non-current borrowings
Repayments of non-current borrowings

19
19

82,000(23,400)–(17,150)

Proceeds from issuance of bonds

19–

29,867

Redemption of bonds

19(10,000)–

Repayments of lease liabilities

13,19(29,254)(29,674)

Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Payments from changes in ownership interests in
subsidiaries that do not result in change in scopeof consolidation
Other, net

(3)

(32)

(7,056)(8,348)

(94)

(64)

(6,471)–

6

8

Net cash flows from (used in) financing activities

58,727(80,392)

Net increase (decrease) in cash and cash equivalents

94,328(35,815)

34,633

128,925(37)

168

128,925

93,278Cash and cash equivalents at beginning of period
Effect of exchange rate changes on cash and cash

6

equivalents
Cash and cash equivalents at end of period6- 135 -

Notes to Consolidated Financial Statements
1. Reporting Entity
J. FRONT RETAILING Co., Ltd. (the “Company”) is the ultimate parent of the Company group (the “Group”)
and a company located in Japan. The registered address of its head office is Chuo-ku, Tokyo.
The Company’s consolidated financial statements for the fiscal year ended February 28, 2022 comprise theCompany and its subsidiaries’ interests in the Group’s associates.
For the Group’s major business activities, please refer to “5. Segment Information.”
2. Basis of Preparation(1) Compliance with IFRSThe consolidated financial statements of the Group have been prepared in compliance with International
Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board.
Pursuant to the provisions of Article 93 of the “Ordinance on Terminology, Forms, and Preparation
Methods of Consolidated Financial Statements” (Ordinance of the Ministry of Finance No. 28 of 1976),
the consolidated financial statements of the Group have been prepared in compliance with IFRS since theCompany qualifies as a “Specified Company Complying with Designated International AccountingStandards” prescribed in Article 1-2 of the Ordinance.
(2) Basis of measurement
The Group’s consolidated financial statements have been prepared on a historical cost basis except for
certain financial instruments, etc. measured at fair value as stated in “3. Significant Accounting Policies.”(3) Functional currency and presentation currency
The Group’s consolidated financial statements are presented in Japanese yen, which is the Company’sfunctional currency, and figures are rounded down to the nearest million yen.
3. Significant Accounting Policies
Significant accounting policies are applied consistently for all periods presented in these consolidated financial
statements, except as otherwise provided.
(1) Basis of consolidation
1) Subsidiaries
Subsidiaries are entities controlled by the Group. Control means the power to govern the financial andoperating policies of the entity so as to obtain benefits from its business activities.
The financial statements of subsidiaries are included in the consolidated financial statements of theGroup from the date when the Group gains control until the date when it ceases to control thesubsidiary.
In cases where the accounting policies applied by a subsidiary are different from those applied by theGroup, adjustments are made to the subsidiary’s financial statements, if necessary. All intergroupbalances, transactions and unrealized gains or losses arising from transactions within the Group are
eliminated in preparing the consolidated financial statements.
When the Company retains control when there has been partial disposal of ownership interest in a
subsidiary, the partial disposal is accounted for as an equity transaction. Any difference between theamount by which the non-controlling interests are adjusted and the fair value of the consideration paidor received is recognized directly in equity attributable to owners of the parent.
The additional acquisition of non-controlling interests is accounted for as a capital transaction, andtherefore no goodwill is recognized with respect to such transactions.
Non-controlling interests in consolidated subsidiaries are identified separately from the Group’s
equity therein. Comprehensive income of subsidiaries is attributed to owners of the parent company
and to the non-controlling interests even if this results in the non-controlling interests having anegative balance.
When subsidiaries’ fiscal year end is not the end of February, which is the fiscal year end of theCompany, because the legal system of the region where the subsidiaries are located does not allow
them to have the same fiscal year end as that of the Company, or for other reasons, adjustments are- 136 -

made by additionally preparing their financial statements as of the fiscal year end of the Company orother means.
2) Associates
An associate is defined as an entity over which the Group has significant influence on financial andoperating policies but does not have control.
Associates are recognized at cost at the time of the acquisition, and are accounted for by the equity
method thereafter. Goodwill recognized on acquisition (less accumulated impairment) is included ininvestments in associates.
In cases where the accounting policies applied by an associate are different from those applied by theGroup, adjustments are made to the associate’s financial statements, if necessary.
For associates whose fiscal year end is not the end of February, which is the fiscal year end of theCompany, due to relationships with other shareholders or other reasons, adjustments are made byadditionally preparing their financial statements as of the fiscal year end of the Company or othermeans.
3) Joint control
A joint arrangement is a contractual arrangement of which two or more parties have joint control.
The Group classifies its involvement in joint arrangements as joint operations (when the Group hasrights to assets and assumes obligations for liabilities in association with the arrangement) and joint
ventures (when the Group only has rights to net assets of the arrangement), depending on rights andobligations of the parties to the arrangement.
In the case of joint operations, the Group recognizes its own assets, liabilities, income and expenses aswell as the amount equivalent to its share when the Group jointly holds or assumes them. Joint
ventures are recognized at cost at the time of the acquisition and are subsequently accounted for using
the equity method.
(2) Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition ismeasured as the aggregate of the acquisition date fair value of the assets transferred, liabilities assumed
and equity instruments issued by the Company in exchange for control of the acquiree. Any excess of theconsideration transferred over the fair value of identifiable assets and liabilities is recognized as goodwill
in the consolidated statement of financial position. Conversely, any deficit is immediately recognized asincome in the consolidated statement of income.
The Group elects to measure non-controlling interests at fair value, or at the proportionate share of therecognized amounts of identifiable net assets, on a transaction-by-transaction basis.
Acquisition-related costs are expensed as incurred.
(3) Foreign currency translation
1) Foreign currency transactions
Each entity of the Group has set its own functional currency as the currency of the primary economic
environment in which the entity operates. Transactions of each entity are measured at the functional
currency.
When each entity prepares non-consolidated financial statements, transactions in currencies other thanits functional currencies are translated using the exchange rate prevailing at the dates of transactions.
Foreign currency monetary assets and liabilities at the end of the reporting period are translated using
exchange rates at the end of the reporting period.
Exchange differences arising from translation or settlement are recognized as profit or loss. However,when gains or losses on non-monetary items are recorded in other comprehensive income, exchange
differences are also recorded in other comprehensive income.
2) Financial statements of foreign subsidiaries and associates
Assets and liabilities of foreign subsidiaries and associates are translated into Japanese yen at theexchange rate prevailing at the end of the reporting period. Income and expenses of foreign- 137 -

subsidiaries and associates are translated into Japanese yen at the average exchange rate for theperiod, unless there is significant change in the exchange rate during the period. When there issignificant change in the exchange rate, the income and expenses are translated using the exchange
rate at the transaction date.
Exchange differences arising from translation of the financial statements of foreign subsidiaries andassociates are recognized in other comprehensive income. Exchange differences for foreignsubsidiaries and associates are recognized as profit or loss in the period during which the foreignsubsidiaries and associates are disposed of.
(4) Financial instruments
1) Non-derivative financial assets
Trade and other receivables are initially recognized on the date when they are incurred. All otherfinancial assets are initially recognized on the trade date when the Group becomes a party to thecontractual provisions of the financial instruments.
An overview of classification and measurement model of non-derivative financial assets is as follows.
(i) Financial assets measured at amortized cost
With regard to investments in debt instruments, when the contractual cash flows consist ofprincipal and interest paid on specified dates, and the Group holds such investments based on abusiness model whose objective is to hold the instrument to collect contractual cash flows, thedebt instruments are measured at amortized cost. Transaction cost directly attributable toacquisition of financial assets measured at amortized cost is included in the amount of initial
measurement.
After the initial recognition, amortization cost is measured using the effective interest method, andimpairment losses are deducted when recognized. Interest revenue, foreign exchange gains andlosses and impairment losses on financial assets measured at amortized cost are recognized in
profit or loss.
(ii) Financial assets measured at fair value through other comprehensive income (financial assets at
FVTOCI)
With regard to investments in debt instruments, when the contractual cash flows consist ofprincipal and interest paid on specified dates, and the Group holds such investments based on abusiness model whose objective is both to collect contractual cash flows and to sell the financial
assets, the debt instruments are measured at fair value. In this case, interest revenue, foreignexchange gains and losses and impairment losses measured using the effective interest method arerecognized in profit or loss, and changes in the fair value excluding them are recognized in othercomprehensive income. The cumulative amount recognized in other comprehensive income as at
the time of derecognition of the financial asset is reclassified to profit or loss.
For investments in equity instruments that are not held for sale, the Group may make anirrevocable election at initial recognition to measure them at fair value and recognize any changes
in the fair value in other comprehensive income. In this case, changes in the fair value arerecognized in other comprehensive income (not reclassified to profit or loss). The cumulative
amount recognized as other comprehensive income is transferred to retained earnings when thefinancial asset is derecognized. Dividends are recognized in profit or loss unless they obviously
represent a partial recovery of the cost of the investment.
Transaction cost directly attributable to acquisition of financial assets at FVTOCI is included in
the amount of initial measurement.
(iii) Financial assets measured at fair value through profit or loss (financial assets at FVTPL)
Financial assets other than the above are measured at fair value with changes in fair value
recognized in profit or loss. Transaction cost directly attributable to acquisition of financial assets
at FVTPL is recognized in profit or loss as incurred.
The Group does not designate any debt instrument as measured at fair value through profit or loss
to eliminate or significantly reduce an accounting mismatch.

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(iv) Impairment of financial assets
The Group recognizes impairment of debt instruments measured at amortized cost or at fair value
through other comprehensive income based on its evaluation at the end of each reporting period of
whether there has been a significant increase in credit risk of financial assets or groups offinancial assets since initial recognition. Specifically, when there has been no significant increasein the credit risk since initial recognition, 12-month expected credit losses are recognized asallowance for credit losses. On the other hand, when there has been a significant increase in credit
risk since initial recognition, lifetime expected credit losses of the financial assets are recognized
as allowance for credit losses. Whether credit risk has significantly increased or not is determinedbased on changes in default risk.
For trade receivables arising from the ordinary course of business of the Group, since the period
up to the collection is short, expected credit losses of such trade receivables are recognized overtheir remaining lives from the inception simply based on historical credit loss experience.
(v) Derecognition of financial assets
The Group derecognizes a financial asset when the contractual rights to the cash flows from thefinancial asset expire, or the contractual rights to receive cash flows from the financial asset aretransferred in a transaction where substantially all the risks and rewards incidental to ownership ofthe financial asset are transferred. Any interests in transferred financial assets that are created orcontinuously retained by the Group are recognized as a separate asset or liability.
2) Non-derivative financial liabilities
The Group recognizes financial liabilities at the date of transaction when the Group becomes a party
to the contract for the financial instrument.
The Group derecognizes a financial liability when the financial liability is extinguished, i.e. when thecontractual obligation is discharged or cancelled or expires.
The Group principally has borrowings, bonds, trade payables, other short-term payables, common gift
certificates for department stores nationwide, deposits received, etc. as non-derivative financial
liabilities. These financial liabilities are initially recognized at fair value and subsequently measured atamortized cost based on the effective interest method.
3) Presentation of financial assets and liabilities
Financial assets and liabilities are offset and the net amount is presented in the consolidated statementof financial position only when the Group has a legally enforceable right to offset the recognizedamounts and intends either to settle on a net basis, or to realize the asset and settle the liability
simultaneously.
4) Derivatives and hedge accounting
The Group uses derivatives to hedge interest rate fluctuation risk and foreign exchange fluctuation
risk. Derivatives used by the Group primarily include forward exchange contracts and interest rate
swaps.
At the time of initial designation of the hedge, the Group documents the relationship between thehedging instrument and the hedged item, the risk management objective, the strategy for
implementation of the hedge transaction, the hedging instrument and the hedged item, the nature ofhedged risk, the method for assessing effectiveness of the hedge relationship and the method of
measuring the effective portion and ineffective portion.
The Group assesses whether the hedging instrument is expected to be highly effective in achieving
offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk
throughout the period for which the hedge is designated, at the inception of the hedge and on an
ongoing basis.
To apply cash flow hedges to forecast transactions, the forecast transaction must be highly probable.
Derivatives are initially recognized at fair value and the transaction costs are recognized in profit orloss as incurred. After initial recognition, derivatives are measured at fair value, and any changes in
the fair value are accounted for as follows.

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(i) Cash flow hedges
When a derivative is designated as a hedging instrument to hedge changes in cash flows
attributable to certain risks related to highly likely forecast transactions that could affectrecognized assets and liabilities or profit or loss, the effective portion of the hedge in changes infair value of the derivative is included in other components of equity as “cash flow hedges.” Thebalance of cash flow hedges is deducted from other comprehensive income in the consolidated
statement of comprehensive income and transferred to profit or loss under the same item as thehedged item in the same period as the period in which cash flows of the hedged item affect profit
or loss. The ineffective portion of the hedge in changes in fair value of the derivative isimmediately recognized in profit or loss.
When the hedge no longer meets the criteria for hedge accounting, the hedging instrument expires
or is sold, terminated or exercised, or the designation of the hedge is revoked, the application ofhedge accounting, is discontinued prospectively.
If hedge accounting is discontinued, the Group continues to record the balance of cash flow
hedges that have already been recognized in other comprehensive income until the forecast
transaction affects profit or loss. When forecast transactions are no longer expected to occur, thebalance of cash flow hedges is immediately recognized in profit or loss.
(ii) Fair value hedges
Changes in fair value of derivatives that are hedging instruments are recognized in profit or loss.
Carrying amounts of hedged items are measured at fair value. For gains or losses on hedged items
attributable to hedged risk, any changes in the fair value are recognized in profit or loss.
(5) Cash and cash equivalents
Cash and cash equivalents consist of cash, demand deposits, and short-term investments with maturities ofthree months or less from the date of acquisition that are readily convertible to cash and subject toinsignificant risk of change in value.
(6) Inventories
Inventories are measured at the lower of cost and net realizable value. Net realizable value is the estimatedselling price in the ordinary course of business less the estimated costs necessary to make the sale. The
acquisition cost is calculated mainly using the specific identification method, and includes all costs ofpurchase and other costs incurred in bringing the inventories to their present location and condition.
(7) Assets held for saleIf the carrying amounts of non-current assets are recovered principally through a sale transaction rather
than through continuing use, these assets (or disposal groups) are classified under “assets held for sale.”
The condition for classifying an asset under “assets held for sale” is only met by an asset whose sale ishighly probable and which is available for immediate sale in its present condition. Management must havecommitted to the execution of a sale plan for that asset, and the sale of the asset must be scheduled to becompleted within one year from the day it is classified as an asset held for sale.
An asset held for sale is measured at the lower of its carrying amount and fair value less cost to sell. Afterproperty, plant and equipment, intangible assets and investment property have been classified under“assets held for sale,” depreciation or amortization will not be applied to these assets.
(8) Property, plant and equipment
Property, plant and equipment is measured using the cost model and is carried at cost less accumulated
depreciation and accumulated impairment.
The acquisition cost includes costs directly attributable to the acquisition of the asset, costs related todisassembly, retirement and site restoration, and borrowing costs that should be capitalized.
Depreciation of assets other than land and construction in progress is recognized using the straight-line
method over the estimated useful lives of the assets. The estimated useful lives of major components ofproperty, plant and equipment are as follows:• Buildings and structures• Machinery and vehicles• Furniture and fixtures

3 to 50 years
2 to 20 years
2 to 20 years- 140 -

The estimated useful lives, depreciation methods, etc. are reviewed at the end of the fiscal year, and if
there are any changes made, those changes are applied prospectively as a change in an accounting
estimate.
(9) Goodwill
The Group measures goodwill at the amount calculated by deducting the net recognized amount (usually,
fair value) of identifiable assets acquired and liabilities assumed at the date of acquisition from the fairvalue of the consideration for the transfer including the recognized amount of non-controlling interests inthe acquiree, which is measured at the date of acquisition.
Goodwill is not amortized. Instead, it is tested for impairment annually, or whenever there are indicationsof impairment.
Impairment losses of goodwill are recognized in the consolidated statement of income, and not reversed
subsequently.
In addition, goodwill is carried at cost less accumulated impairment on the consolidated statement offinancial position.
(10) Intangible assets
Intangible assets are measured using the cost model and stated at cost less accumulated amortization andaccumulated impairment.
Intangible assets acquired separately are measured at cost at initial recognition.
After initial recognition, intangible assets other than goodwill are amortized using the straight-line method
over respective estimated useful lives, except for intangible assets with indefinite useful lives. Estimateduseful lives of major intangible assets are as follows. In addition, the Group has no intangible assets withindefinite useful lives.
• Software

5 years

The estimated useful lives, residual values and amortization methods are reviewed at the end of the fiscal
year, and if there are any changes made, those changes are applied prospectively as a change in an
accounting estimate.
(11) Right-of-use assets
The Group confirms a right-of-use asset on the lease commencement date and initially measures it at its
acquisition cost. The aforementioned acquisition cost consists of the amount of the lease liability, theamount of lease payments made before the lease commencement date adjusted to exclude any received
lease incentives, and the initial direct cost that was incurred.
After the initial measurement, right-of-use assets are depreciated using the straight-line method over thelease term. The lease term is determined based on the non-cancellable term of the lease, taking into
consideration any term for which there is reasonable certainty of extension and any term for which there isreasonable certainty of non-cancellation. In cases where a right-of-use asset is impaired, the impairment
loss is deducted from the carrying amount of the right-of-use asset.
Right-of-use assets are depreciated using the straight-line method mainly over 2 to 59 years from thecommencement date.
(12) Lease liabilities
Lease liabilities are initially measured at the present value of the lease payments to be paid in the future
over the lease term on and after the lease commencement date. When calculating the present value, if theinterest rate implicit in the lease can be readily determined, that is used, and if it cannot, the lessee’s
incremental borrowing rate is used.
The lease payments used in the measurement of lease liabilities mainly include the fixed lease payments,
the lease payments of the extended term if the lease term reflects the exercise of a lease extension option,and the cancellation fees if the lease term reflects the exercise of a lease cancellation option.
After the initial measurement, lease liabilities are measured at the amortized cost using the effective
interest method. Moreover, if changes in future lease payments arise due to changes in indexes or rates, or
if changes in the assessment regarding the potential for execution of an extension option or a cancellation
option arises, the Group remeasures the lease liabilities.
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If remeasuring the lease liabilities, the carrying amount of the right-of-use asset is also adjusted using theremeasured amount of the lease liabilities. However, if the decrease in liabilities due to remeasurement of
the lease liabilities is larger than the carrying amount of the right-of-use asset, the amount remaining after
impairing the right-of-use asset to zero is recognized in profit or loss.
Furthermore, for rent concessions arising as a direct consequence of the novel coronavirus disease(COVID-19), which meet specified requirements, the Group has selected to apply the practical expedientand therefore does not assess whether rent concessions are lease modifications.
(13) Investment property
Investment property is property held to earn rental income or for capital appreciation or both.
Investment property is measured using the cost model and stated at cost less accumulated depreciation andaccumulated impairment (For the depreciation method and useful lives, please refer to “(8) Property, plantand equipment”).
When the investment property portion of a property cannot be accounted for separately from otherportions of a property, the entire property is accounted for as investment property only if the owneroccupied portion is insignificant.
(14) Impairment of non-financial assets
The Group determines at the end of every reporting period whether there is any indication that carrying
amounts of the Group’s non-financial assets excluding inventories and deferred tax assets may be
impaired. If any indication exists, the recoverable amount of the asset is estimated. For goodwill andintangible assets that have indefinite useful lives or not yet available for use, the recoverable amount isestimated at the same time each year.
The recoverable amount of an asset or a cash-generating unit is the larger of its value in use and fair valueless cost of disposal. In calculating value in use, the estimated future cash flows are discounted to theirpresent value using a pretax discount rate that reflects the time value of money and the risks specific to theasset. The cash-generating unit is the smallest group of assets that generates cash inflows, fromcontinuous use, that are largely independent of the cash inflows from other assets or groups of assets.
To test goodwill for impairment, cash-generating units to which the goodwill is allocated are integrated sothat impairment is tested reflecting the smallest unit related to the goodwill. Goodwill acquired in abusiness combination is allocated to cash-generating units that are expected to benefit from the synergiesof the combination.
Since the Group’s corporate assets do not generate independent cash inflows, the recoverable amount ofcash-generating units to which the corporate assets are attributed is determined if there is any indicationthat corporate assets are impaired.
An impairment loss is recognized as profit or loss, if the carrying amount of an asset or cash-generating
unit exceeds the recoverable amount. The impairment loss recognized in association with a cashgenerating unit is first allocated to reduce the carrying amount of goodwill allocated to this unit, and thenthe carrying amounts of other assets in the cash-generating unit are reduced on a pro rata basis.
Impairment losses related to goodwill are not reversed. With regard to other assets, for previously
recognized impairment losses, the Group assesses whether there is any indication that the loss has
decreased or been extinguished at the end of the reporting period. An impairment loss is reversed when
there has been a change in the estimates used to determine the recoverable amount. An impairment loss isreversed up to the carrying amount that would have been determined had no impairment loss beenrecognized, net of necessary depreciation and amortization.
(15) Employee benefits
The Group has established defined benefit plans (such as a corporate pension fund plan and lump-sum
retirement benefit plan) as employee retirement benefit plans, and certain consolidated subsidiaries haveadopted defined contribution plans.
The projected unit credit method is used to determine the present value of defined benefit obligation,
related current service cost and past service cost.
The discount rate is determined by reference to market yields at the end of the fiscal year on high quality
corporate bonds corresponding to the discount period established based on the period to the date when the
future benefits for each fiscal year are to be paid.
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Net defined benefit liability or asset is determined as the present value of defined benefit obligation lessthe fair value of plan assets.
Remeasurements of net defined benefit liability or asset are recognized as other comprehensive income
and immediately transferred from other components of equity to retained earnings. Remeasurements
consist of actuarial gains and losses on defined benefit obligation, return on plan assets (excluding theamount of interest revenue on plan assets) and others.
Past service costs are immediately accounted for as profit or loss.
Costs for defined contribution benefits are recognized as expenses when the contributions are made.
(16) Share-based payment
The Company has adopted an officer remuneration BIP (Board Incentive Plan) trust (hereinafter referred
to as the “BIP Trust”) as a performance-linked, share-based payment to ensure steady execution of theMedium-term Business Plan aimed at realizing the Group Vision.
The BIP Trust is a system of granting the Company’s shares to officers (in certain cases, the Company’s
shares are converted into cash within the trust and cash in the amount equivalent to their conversion value
is paid) in accordance with the level of achievement of the Medium-term Business Plan, etc. The
consideration for the services received is calculated using the fair value of the Company’s shares on the
grant date. This value is expensed over the vesting period from the grant date, and a corresponding
amount is recognized as an increase in equity.
(17) Provisions
A provision is recognized when the Group has a present legal or constructive obligation as a result of apast event, when it is probable that an outflow of financial resources will be required to settle theobligation and when a reliable estimate can be made of the amount of the obligation. To determine theamount of a provision, when the effect of the time value of money is material, the estimated future cash
flows are discounted to their present value using a pretax discount rate that reflects the time value ofmoney and the risks specific to the liability. Unwinding of the discount over time is recognized in financecosts.
Asset retirement obligations
Asset retirement obligations are recorded at the estimated amount of restoration costs for leased stores,
offices, etc. for which the Group has obligations to restore them to the original state at the time when thelease is terminated.
Provision for loss on business liquidation
Legal or constructive obligations are recorded for the cost of store dismantlement, etc. that is expected to
be borne in the future as a result of business liquidation, store closure and store rebuilding.
(18) Sales revenue
Based on the following five-step approach, the Group recognizes revenue as the amount of consideration
to which the Group expects to be entitled in exchange for the transfer of goods or services promised tocustomers.
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the entity satisfies a performance obligation
The Group, under a holding company structure, develops businesses such as the SC Business, theDeveloper Business, and the Payment and Finance Business, with the Department Store Business at its
core. The Department Store Business carries out the sale of clothing, general goods, household goods,
food products and others. With regard to these sales of goods, since performance obligations are deemed
to be satisfied at the time of delivery of goods when customers gain control of such goods, the Group
mainly recognizes revenue at the time of delivery of such goods. Furthermore, revenue is measured at theamount of consideration promised in contracts between customers, less any discounts, rebates and sales
returns, etc.
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1) Revenue recognition by business segmenti) Department Store Business
The Department Store Business carries out the sale of clothing, general goods, household goods,
food products and others. With regard to these sales of goods, since performance obligations are
deemed to be satisfied at the time when goods are delivered to customers, the Group recognizes
revenue at the time of delivery of such goods. Payments for goods are principally received at thetime of delivery of the goods, which is the time when the performance obligation is satisfied.
ii) SC Business
The SC Business undertakes development, management, supervision and operation, etc. of
shopping centers as well as sale of personal belongings, general goods and others.
With regard to services, because these services are provided on a continuous basis and thus it isdetermined that performance obligation is satisfied over a certain period of time, revenue isrecognized as the services are rendered.
With regard to the sale of accessories, general goods and others, since it is usually determined that
performance obligation is satisfied at the time when goods are delivered to customers, revenue isrecognized at the time of delivery of such goods. Payments for goods are received at the time ofdelivery of the goods, which is the time when performance obligation is satisfied.
Revenue from lease of shopping centers and others is recognized over the lease term, in
accordance with IFRS 16.
iii) Developer Business
The Developer Business carries out development, management, operation, interior decorating
work, etc. of real estate.
Revenue from lease of real estate and others is recognized over the lease term, in accordance withIFRS 16.
With regard to the design and operation of interior decorating work, if the outcome of a work
contract can be estimated reliably, revenue is recognized according to the stage of completion of
the performance obligation. If the outcome of a work contract cannot be estimated reliably,revenue is recognized only to the extent that it is probable that the contract costs incurred will berecoverable.
iv) Payment and Finance Business
The Payment and Finance Business undertakes issuance and administration, etc. of credit cards.
In the Payment and Finance Business, annual membership fees from cardholders, and fees fromdepartment stores and external affiliated stores are recognized as revenue. With regard to interest
on installment sales, the Group multiplies the revolving balance and number of installment
payments by their respective set interest rates to calculate interest revenue, and recognizes theinterest in the period to which it is attributable, in accordance with IFRS 9.
v) OtherWithin other, for sales of products and merchandise such as electronic components, automobile
components, industrial supplies, and liquor within the wholesale business, the Group deems thatin most cases the customer acquires control of the products when they are delivered and its
performance obligations are satisfied. Therefore, usually revenue is recognized for the goods upon
their delivery.
2) Interest revenue
Interest revenue is recognized using the effective interest method.
3) Dividends
Dividend income is recognized when the right to receive dividends is established.
4) Gross and net presentation of revenue
When the Group conducts transactions as a principal, revenue is presented at the gross amount ofconsideration received from customers. When the Group conducts transactions as an agent for the- 144 -

benefit of a third party, revenue is presented at the net amount calculated by deducting the amountcollected for the benefit of the third party from the gross amount of consideration received from
customers.
The following indicators are taken into account in the determination of whether the Group conducts atransaction as a principal or an agent:• Whether the entity is primarily responsible for fulfilling a contract• Whether the entity has inventory risk before or after the customer order, during shipping or on
return• Whether the entity has discretion in establishing prices(19) Government grants
Government grants are measured and recognized at fair value, if the conditions attaching to them arecomplied with, and there is reasonable assurance that the grants will be received. Grants for expenses
incurred are recorded as income in the same fiscal year as the fiscal year in which the expenses are
incurred. Grants related to acquisition of an asset are recorded as other operating income on a systematic
basis over the useful life of the asset, and unearned government grants are recorded in liabilities asdeferred income.
(20) Income tax
Income tax consists of current taxes and deferred taxes. Income tax is recognized as profit or loss, except
for taxes related to business combinations and taxes related to items that are recognized directly in equity
or in other comprehensive income.
1) Current taxes
Current taxes are measured in the amount of the expected tax payables to or receivables from thetaxation authorities. Calculation of the amount of tax is based on the tax rates and tax laws enacted or
substantively enacted by the end of the reporting period in countries where the Group conducts
business and earns taxable profit.
2) Deferred taxes
Deferred taxes are recognized for temporary differences between the carrying amounts of assets or
liabilities in the statement of financial position and its tax base, and for unused tax losses and unused
tax credits.
No deferred tax assets and liabilities are recognized on the following temporary differences:• Temporary differences arising from the initial recognition of goodwill• Temporary differences arising from initial recognition of assets and liabilities from transactions thatare not business combinations and affect neither accounting income or taxable profit• Taxable temporary differences associated with investments in subsidiaries and associates for which
the Group is able to control the timing of the reversal of the temporary difference and it is probablethat the temporary difference will not reverse in the foreseeable future
A deferred tax liability is recognized for all taxable temporary differences in principle, and a deferred
tax asset is recognized for all deductible temporary differences to the extent that it is probable thattaxable profit will be available against which deductible temporary differences can be utilized.
Carrying amount of deferred tax assets is reassessed at the end of each reporting period and reduced tothe extent that it is no longer probable that sufficient taxable profit will be available to use all or partof the benefit of the deferred tax assets. Unrecognized deferred tax assets are reassessed each period
and are recognized to the extent that it has become probable that future taxable profit will allow thedeferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates and by the tax laws that are expected toapply to the period when the assets are realized or the liabilities are settled, based on the statutory tax
rates and tax laws enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if the Group has a legally enforceable right to offset
current tax assets against tax liabilities and income taxes are levied by the same taxation authority on
the same taxable entity.
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(21) Earnings per share
Basic earnings per share are calculated by dividing profit (loss) attributable to ordinary equity holders of
the parent entity by the weighted average number of shares outstanding during the period, adjustingtreasury shares. Diluted earnings per share are calculated by adjusting for the effects of all dilutive
potential shares.
(22) Operating segments
Operating segments are components of entities that engage in business activities that earn revenue andincur costs including transactions with other operating segments. Operating results of all the operating
segments, for which the financial information is separately available, are reviewed periodically by the
Board of Directors for the purpose of allocating management resources to each segment and assessing
performance.
(23) Treasury shares
Treasury shares are assessed at acquisition cost and deducted from equity. No gain or loss is recognizedon the purchase, sale or cancellation of the Company’s treasury shares. Any difference between the
carrying amount and consideration received on the sale of treasury shares is recognized as share premium.
(24) Borrowing costs
The Group includes borrowing costs directly attributable to the acquisition, construction or production ofan asset that necessarily takes a substantial period of time to get ready for its intended use or sale, that is, aqualifying asset as part of the acquisition cost until the asset is substantially ready for its intended use orsale.
All borrowing costs other than those above are recognized as profit or loss in the fiscal period in which
they are incurred.
4. Significant Accounting Estimates and Judgments
In the preparation of consolidated financial statements, management is required to make judgments, estimates andassumptions that affect application of accounting policies as well as amounts of assets, liabilities, revenue andexpenses. Actual results may differ from these estimates.
The estimates and their underlying assumptions are reviewed on an ongoing basis. The effects of changes inaccounting estimates are recognized in the fiscal period in which the estimates are changed and in future periods
that are affected.
As a result of the global spread of COVID-19, the Group has been impacted by the deterioration in businessresults due to demands for temporary closures and shortened operating hours of stores, self-curfew, etc. by theJapanese government and each local government, and other factors. Amid these circumstances, the future impact
is uncertain as it is difficult at this time to predict when the pandemic will end and when there will be a recovery
in consumption. Given these circumstances, the Group factors in the effects of strategies and measures in eachbusiness and has made reasonable estimates that reflect the situation as of the end of the reporting period, basedon the assumption that the recovery trend in domestic spending will continue in FY2022 and inbound tourism
demand will head for a full-scale recovery from FY2023. If uncertainty further increases, the Group may revise
the carrying amounts of assets and liabilities in future accounting periods.
Estimates and judgments made by management that significantly affect the amounts in the consolidated financial
statements are as follows.
(1) Property, plant and equipment, right-of-use assets, intangible assets and investment property
The Group conducts impairment tests if there is an indication that property, plant and equipment, right-ofuse assets, intangible assets and investment property may be impaired.
Impairment tests are performed by comparing the carrying amount and the recoverable amount of theasset. If the recoverable amount is less than the carrying amount, an impairment loss is recognized.
The recoverable amount is usually determined by the value in use. For the value in use, the Groupestimates the discounted present value of future cash flows generated from the use of the asset and thediscounted present value of future cash flows generated by its final disposal.
The forecasting period for future cash flows is estimated by considering the remaining useful life of therelevant asset.
- 146 -

Future cash flows before discounting are estimated based on the business plan. The main assumptions
include forecast trends for personal spending in Japan and projected recovery in inbound tourism demand,the impact of COVID-19, and the rate of sales growth after the business plan.
For the forecast trend for personal spending in Japan, the Group refers to forecast trends provided byseveral external specialist organizations, factors in the effect of measures in its business plan, and sets thesales growth rates for each of the relevant primary business segments for the following fiscal year onward.
In addition, in the outlook for inbound tourism demand recovery, the Group creates a scenario based oninternational shipping forecasts and tourism demand forecasts by external organizations, and forecasts thedemand recovery within the scope of that scenario.
For the impact of COVID-19, it is difficult to predict future trends and the time when the pandemic will
come to an end; however, at this point in time the Group expects the impact of COVID-19 on its earnings
to be apparent until FY2023.
The growth rate after the business plan is determined by making reference to long-term growth rates forthe relevant markets. These estimates are based on management’s best estimates, but may differ from
actual results due to effects of changes in uncertain future economic conditions.
Moreover, the amounts of impairment losses and non-financial assets in the Department Store Businessand the SC Business are as follows.
(Millions of yen)
SC Business

Department Store BusinessImpairment losses

113

234

Property, plant and equipment

237,310

240,894

Right-of-use assets

85,641

59,784

Intangible assets

4,247

1,569

113,343

1,314

Investment property(2) Recoverability of deferred tax assets
The Group recognizes deferred tax assets to the extent that it is probable that taxable profit will beavailable against which deductible temporary differences can be utilized.
The judgment of the recoverability is made on the basis of an estimate of taxable profit for each futurefiscal year determined based on the Group’s business plan.
The significant assumptions in the Group’s business plan are forecast trends for personal spending inJapan and the projected recovery in inbound tourism demand as well as the forecast for sales revenue thatincorporates the effect of each business plan based on the market growth rate factoring in the impact of
COVID-19, etc. for the Department Store Business, the SC Business and the Payment and FinanceBusiness segments; the forecast for sales revenue that incorporates new development projects from thebusiness plan in the Developer Business segment; and the forecast for operating profit taking into accountthe effects of cost reductions achieved through business structure reforms in each segment.
These significant assumptions are based on management’s best estimates, but may differ from actual
results due to effects of changes in uncertain future economic conditions. If significant revisions become
necessary, it may have a material impact on the amounts to be recognized in the consolidated financial
statements for the next fiscal year.
The breakdown of deferred tax assets by major cause and their carrying amounts are stated in “18. IncomeTax.”(3) Post-employment benefits
The Group has defined benefit and defined contribution post-employment benefit plans for employees andretirees. Present value of defined benefit obligations, service costs and others are determined based on
various actuarial assumptions. For actuarial assumptions, a variety of factors, such as discount rates,
future payment of salaries, those who withdraw from the plan in the future and life expectancy ofmembers, are estimated. These estimates are made based on management’s best estimates, but may differ
from actual results due to effects of changes in uncertain future economic conditions and amendment or
promulgation of relevant laws and regulations.
Of the assumptions provided above, the discount rate and anticipated rate of salary increase, which areparticularly important, are provided in “22. Employee Benefits.”- 147 -

(4) Determination and revision of lease periods
The Group determines the lease periods based on the non-cancellable term of the lease, taking into
consideration any term for which there is reasonable certainty of extension and any term for which there isreasonable certainty of non-cancellation. Specifically, the Group estimates the period for which there isreasonable certainty considering changes in rent expenses resulting from extension or shortening of thelease period, the existence of cancellation penalties, and the payback period for investments in significant
fixtures, facilities, etc. for rental properties.
For real estate leases in which the Group is the lessee in the Department Store Business, there may berevisions to the lease period for the flagship store or properties tied to the flagship store coinciding with
the next individual-store large-scale renovation plan or when the next Medium-term Business Plan isdecided. If revisions to the lease periods become necessary, such revisions could have a material effect on
the amounts recognized in the consolidated financial statements in the next fiscal year and beyond.
Details of lease periods are stated in “3. Significant Accounting Policies.”
5. Segment Information(1) Overview of reportable segments
The reportable segments of the Group are constituent units of the Group for which separate financial
information is obtainable. These segments are periodically examined by the Board of Directors for the
purpose of deciding the allocation of management resources and evaluating business results.
The Group is comprised, under a holding company structure, of the reportable segments “Department
Store Business,” “SC Business,” “Developer Business” and “Payment and Finance Business,” with the
Department Store Business at its core.
The Department Store Business carries out the sale of clothing, general goods, household goods, foodproducts and others. The SC Business undertakes development, management, supervision and operation,etc. of shopping centers. The Developer Business carries out development, management, operation,interior decorating work, etc. of real estate. The Payment and Finance Business undertakes issuance andadministration, etc. of credit cards.
Towards our business growth based on the conversion of PARCO Co., Ltd. into a wholly-owned
subsidiary and consolidation of the Real Estate Business, reportable segment classifications have beenchanged to the above classifications effective from the first quarter of the fiscal year ended February 28,2022.
In addition, Daimaru Matsuzakaya Sales Associates Co. Ltd., which was a consolidated subsidiary of theCompany, merged with and was absorbed by Daimaru Matsuzakaya Department Stores Co. Ltd., which isa consolidated subsidiary of the Company, on September 1, 2021.
As a result of this change, Daimaru Matsuzakaya Sales Associates Co. Ltd., which was previously
included in “Other,” has been included in “Department Store Business” from the fiscal year ended
February 28, 2022.
Furthermore, segment information for the fiscal year ended February 28, 2021 has been prepared anddisclosed based on the reportable segment classifications after the change.
(2) Segment revenue and business results
Revenue and business results by reportable segments of the Group are as follows. Inter-segment
transactions are generally based on prevailing market prices.

- 148 -

Fiscal year ended February 28, 2021
Reportable segments
Other

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions of
yen

5,952

276,527

42,552

319,079–

319,079

11,314

3,083

15,61420,00735,622(35,622)–55,44953,825

9,035

292,142

62,559354,701(35,622)

319,079(6,968)

1,981

421

(25,351)

1,724(23,626)(638)(24,265)

Department
Store
SC BusinessBusiness

Developer
Business

Payment and
FinanceBusiness

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyen

173,185

54,87742,511

645

571

Total

173,831

Segment profit (loss)(20,785)

External revenue
Inter-segment revenue

Adjustments Consolidated

Finance income

962

Finance costs(6,086)

Share of profit (loss)of investments
accounted for using
equity method

717(Loss) before tax
Segment assets(28,672)
578,453

348,404

111,550

70,165

1,108,573

108,019

1,216,593

47,1291,263,722

Depreciation andamortization expense

31,59013,5264,405

133

49,655

1,768

51,424(1,063)50,361

Impairment loss

10,357

3,167

7

–

13,533245

13,778343

14,122

Investments accounted
for using equity
method21,958–45–

22,003

158

22,161

15,65337,815

Capital expenditures

19,600

8,661

9,082

149

37,494631

38,126(8,765)29,360

Other items

Notes:

1.

The “Other” category is a business segment not included in reportable segments. It includes wholesaling, parking, leasing, etc.

2.

Capital expenditures are the amount of the increase in property, plant and equipment, right-of-use assets, investment property andintangible assets.

3.

Adjustments are made as follows.
(1) The adjustments for segment profit (loss) include inter-segment eliminations and corporate income and expenses not attributable
to any business segment. Corporate income and expenses are mainly income and expenses of the company submitting
consolidated financial statements that are not attributable to any business segment.
(2) The adjustment for segment assets includes elimination of segment receivables, unrealized adjustments on non-current assets,
and assets of the company submitting consolidated financial statements that are not attributable to any business segment.
(3) The adjustment for depreciation and amortization expense consists of inter-segment transfers.
(4) The adjustment for amounts invested in entities accounted for using equity method consists of investments in entities accounted
for using equity method of the company submitting consolidated financial statements that are not attributable to any businesssegment.
(5) The adjustment for capital expenditures consists mainly of inter-segment eliminations and inter-segment unrealized profit.

4.

Segment profit (loss) is adjusted to operating profit (loss) in the consolidated financial statements.

- 149 -

Fiscal year ended February 28, 2022
Reportable segments
Other

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions of
yen

7,273

289,864

41,619331,484–

331,484

9,935

3,764

15,103

20,13535,239(35,239)–

52,55650,633

11,037

304,967

61,755366,723(35,239)

331,484

2,055

4,711

1,970

4,142

1,199

5,341

4,039

9,380

Department
Store
SC BusinessBusiness

Developer
Business

Payment and
FinanceBusiness

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyen

190,307

51,58540,698

431

971

Total

190,739

Segment profit (loss)(4,594)External revenue
Inter-segment revenue

Adjustments Consolidated

Finance income

1,335

Finance costs(5,890)Share of profit (loss)of investments
accounted for using
equity method

1,364

Profit before tax

6,190

Segment assets

566,354334,273

106,420

72,505

1,079,554

108,065

1,187,620

5,287

1,192,907

30,416

14,671

4,102

154

49,345

1,704

51,049(1,419)49,629

113

234

776

–

1,123

13

1,136

–

1,136

Investments accounted
for using equity
method21,861–

47–

21,908156

22,065

16,696

38,761

Capital expenditures

10,582

5,074

3,745

38

19,441

1,132

20,57358

20,632Other items
Depreciation andamortization expense
Impairment loss

Notes:

1.

The “Other” category is a business segment not included in reportable segments. It includes wholesaling, parking, leasing, etc.

2.

Capital expenditures are the amount of the increase in property, plant and equipment, right-of-use assets, investment property andintangible assets.

3.

Adjustments are made as follows.
(1) The adjustments for segment profit (loss) include inter-segment eliminations and corporate income and expenses not attributable
to any business segment. Corporate income and expenses are mainly income and expenses of the company submitting
consolidated financial statements that are not attributable to any business segment.
(2) The adjustment for segment assets includes elimination of segment receivables, unrealized adjustments on non-current assets,
and assets of the company submitting consolidated financial statements that are not attributable to any business segment.
(3) The adjustment for depreciation and amortization expense consists of inter-segment transfers.
(4) The adjustment for amounts invested in entities accounted for using equity method consists of investments in entities accounted
for using equity method of the company submitting consolidated financial statements that are not attributable to any businesssegment.
(5) The adjustment for capital expenditures consists mainly of inter-segment eliminations, inter-segment unrealized profit, andcapital expenditures of the company submitting consolidated financial statements that are not attributable to any businesssegment.

4.

Segment profit (loss) is adjusted to operating profit (loss) in the consolidated financial statements.

(3) Information by geographical area
Sales revenue from external customers
This information has been omitted, as sales revenue from external customers in Japan accounts for a large
percentage of sales revenue recorded on the consolidated statement of income.
Non-current assets
This information has been omitted, as the amount of non-current assets located in Japan accounts for alarge percentage of the amount recorded on the consolidated statement of financial position.
- 150 -

6. Cash and Cash Equivalents
The breakdown of cash and cash equivalents is as follows:
As of February 28, 2021

As of February 28, 2022

Millions of yen

Millions of yen

Cash
Deposits (including time deposits with deposit
terms of three months or less)
Total

4,031

2,654

124,893

90,624

128,925

93,278

7. Trade and Other Receivables
The breakdown of trade and other receivables is as follows.
All these receivables have been classified as financial assets measured at amortized cost.
As of February 28, 2021

As of February 28, 2022

Millions of yen

Millions of yen

Notes receivable - trade
Accounts receivable - trade
Accounts receivable - other
Contract assets
Other

2,342
53,512
49,990
3,280
4,289

2,081
53,164
49,675
3,193
4,147

Total

113,414112,262

8. Inventories
The breakdown of inventories is as follows:
As of February 28, 2021

As of February 28, 2022

Millions of yen

Millions of yen

Merchandise and finished goods
Work in process
Supplies
Total

20,061
127
495

11,982117
360

20,684

12,459–3

Inventories sold beyond 12 months

The amount of inventories that were recognized as expenses was ¥155,579 million in the fiscal year ended
February 28, 2021 and ¥171,024 million in the fiscal year ended February 28, 2022.
The amounts of write-down of inventories recognized as expenses are as follows:
Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Millions of yen

Millions of yen

Amounts of write-down

205- 151 -

138

9. Other Financial Assets
The breakdown of other financial assets is as follows:
As of February 28, 2021

As of February 28, 2022

Millions of yen

Millions of yen

Financial assets measured at amortized cost
Time deposits with deposit terms of morethan three months
Lease and guarantee deposits
Loans receivable
Other
Financial instruments measured at fair value
through profit or loss
Derivative financial assets
Financial assets measured at fair value throughother comprehensive income
Shares and investments in capital
Total
Total current assets
Total non-current assets

4,918

4,853

56,8201,693
5,860

55,053
1,604
5,739

27

7

23,391

24,64892,711

91,907

5,841
86,87011,92979,977

10. Other Assets
The breakdown of other assets is as follows:
As of February 28, 2021

As of February 28, 2022

Millions of yen

Millions of yen

Prepaid expense
Advance payments - trade
Suspense payments
Retirement benefit assets
Other

2,368
618
382
9,098
4,332

2,131
1,009
337
9,506
4,690

Total

16,80017,675

4,739
12,061

4,954
12,721Other current assets
Other non-current assets- 152 -

11. Property, Plant and Equipment(1) Schedule of changes
Changes in acquisition costs and accumulated depreciation and impairment of property, plant andequipment are as follow:
Acquisition costs
MachineryandvehiclesMillions ofyen

Furnitureand fixtures

Constructionin progress

Total

Millions ofyen

Buildings
andstructures
Millions ofyenMillions ofyenMillions ofyenMillions ofyen

271,884

482,344

3,965

18,085835

777,115

Acquisitions–

11,742

39

939

1,033

13,754

Sales or disposals–(5,014)

(26)

(608)

–

(5,648)15,831

20,339252(674)(1,597)34,150

–

(497)

–

(125)

–

(623)

287,715

508,914

4,229

17,617271

818,748

43

4,655

75

721

145

5,642

(490)

(5,396)

(131)

(448)

–

(6,466)

Transfer among line items

–

(148)

–

9

(80)

(220)

Exclusion from consolidation–(1,409)–(1,395)–(2,804)287,268

506,616

4,174

16,504335

814,899

Land

Balance as of March 1, 2020

Transfer among line items
Other
Balance as of February 28, 2021
Acquisitions
Sales or disposals

Balance as of February 28, 2022

- 153 -

Accumulated depreciation and impairment
MachineryandvehiclesMillions ofyen

Furnitureand fixtures

Constructionin progress

Total

Millions ofyen

Buildings
andstructures
Millions ofyenMillions ofyenMillions ofyenMillions of
yen

(481)

(289,092)(2,704)(11,669)–(303,947)

Depreciation expense–(15,471)(236)(1,333)–(17,041)

Impairment loss–

(8,240)

(25)

(234)

–

(8,500)

Sales or disposals

–

4,701

24

588

–

5,314

(18)

(1,825)

79

251

–

(1,513)

–

476

–

107

–

583

Land

Balance as of March 1, 2020

Transfer among line items
Other
Balance as of February 28, 2021

(499)

(309,452)(2,863)(12,289)–(325,104)

Depreciation expense–(15,920)(225)(1,347)–(17,493)

Impairment loss

–

(41)

(2)

(14)

–

(58)

Sales or disposals

–

4,865

130

436

–

5,432

Transfer among line items

–

149

(0)

(6)

–

143

Exclusion from consolidation

–

1,282

–

1,278

–

2,561

Balance as of February 28, 2022

(499)

(319,115)(2,961)(11,942)–(334,518)

MachineryandvehiclesMillions ofyen

Furnitureand fixtures

Constructionin progress

Total

Millions ofyen

Buildings
andstructures
Millions ofyenMillions ofyenMillions ofyenMillions ofyen

Balance as of March 1, 2020

271,403

193,252

1,260

6,415

835

473,167

Balance as of February 28, 2021

287,215

199,462

1,366

5,328

271

493,644

Balance as of February 28, 2022

286,768

187,500

1,213

4,561

335

480,380

Carrying amounts
Land

Notes:

1.

The amount of depreciation expense for property, plant and equipment is included in “cost of sales,” “selling, general andadministrative expense” and “other operating expense” in the consolidated statement of income.

2.

Please refer to “28. Other Operating Income” for the gain on sales of non-current assets for the fiscal years ended February 28, 2021
and February 28, 2022, and “31. Other Operating Expense” for the loss on disposals of non-current assets for the fiscal years ended
February 28, 2021 and February 28, 2022.

(2) Assets pledged as collateral
Please refer to “20. Bonds and Borrowings” for assets pledged as collateral.
(3) Commitments
Please refer to “39. Commitments” for commitments related to purchase of property, plant and equipment.

- 154 -

12. Goodwill and Intangible Assets(1) Schedule of changes
Changes in acquisition costs, accumulated amortization and impairment and carrying amounts of goodwill
and intangible assets are as follows:
Acquisition costs
Other intangible assets
Goodwill

Millions of yen
Balance as of March 1, 2020

Software

Other

Total

Millions of yen

Millions of yen

Millions of yen

568

11,167587

11,754

Acquisitions

–

2,426

1

2,428

Sales or disposals

–

(691)

(40)

(732)

Transfer among line items

–

147

(58)

88

Other

–

(12)

(4)

(16)

568

13,036

485

13,521

Acquisitions

–

3,675

3

3,678

Sales or disposals

–

(916)

(7)

(924)

Transfer among line items

–

(61)

1

(60)

Exclusion from consolidation–(1,018)(0)(1,018)

Balance as of February 28, 2022

568

14,715481

15,197

Balance as of February 28, 2021

Accumulated amortization and impairment
Other intangible assets
Goodwill

Millions of yen
Balance as of March 1, 2020

Software

Other

Total

Millions of yen

Millions of yen

Millions of yen(44)(5,658)(433)(6,092)

Amortization expense–(1,834)(1)(1,836)

Impairment loss

–

(451)

–

(451)

Sales or disposals

–

691

–

691

Transfer among line items

–

(93)

2

(91)

Other

–

10

–

10

(44)

(7,336)(432)(7,769)Amortization expense–(1,993)(1)(1,994)

Impairment loss

–

(1)

–

(1)

Sales or disposals

–

912

7

919

Transfer among line items

–

(0)

(0)

(0)

Exclusion from consolidation

–

939

–

939

Balance as of February 28, 2022

(44)

(7,480)(426)(7,907)

Balance as of February 28, 2021

- 155 -

Carrying amounts
Other intangible assets
Goodwill

Millions of yen

Software

Other

Total

Millions of yen

Millions of yen

Millions of yen

Balance as of March 1, 2020

523

5,508

153

5,662

Balance as of February 28, 2021

523

5,699

52

5,752

Balance as of February 28, 2022

523

7,235

54

7,289

Note:

The amount of amortization expense for intangible assets is included in “cost of sales” and “selling, general and administrative expense” inthe consolidated statement of income.

(2) Impairment test on goodwill
Goodwill arising in business combinations is allocated to cash-generating units that benefit from thebusiness combination on the acquisition date. The breakdown of the carrying amount of goodwill bysegment is as follows:
As of February 28, 2021

As of February 28, 2022

Millions of yen

Millions of yen

SC Business

523

523

Total

523

523

The Group tests goodwill for impairment each fiscal year, or whenever there is an indication of
impairment.
To test goodwill for impairment, cash-generating units to which the goodwill is allocated are integrated sothat impairment is tested reflecting the smallest units related to the goodwill. Goodwill acquired in abusiness combination is allocated to cash-generating units that are expected to benefit from the synergiesof the combination.
The recoverable amount is usually determined by the value in use. The Group estimates the discounted
present value of future cash flows generated from use of the asset and the discounted present value of
future cash flows generated from ultimate disposal of the asset. These estimates are based on
management’s best estimates, but may differ from actual results due to effects of changes in uncertain
future economic conditions.
There is a risk that impairment may arise if major assumptions used for impairment test are changed.
However, the value in use sufficiently exceeds the carrying amount of the cash-generating unit or thegroup of cash-generating units, and the Group considers value in use unlikely to fall below the carrying
amount even if major assumptions used for impairment tests change within a reasonably foreseeable
range.
13. Leases(1) As lessee
The Group enters into lease contracts for real estate, various facilities, etc. in the Department StoreBusiness mainly for the purpose of ensuring flexibility relating to asset replacement, reducing theadministrative burden relating to asset management, and efficiently operating funds. In cases where such acontract transfers the right to control the use of an identified asset for a period of time in exchange forconsideration, the contract is deemed to be a lease or to contain a lease, and the right-of-use assets andlease liabilities are recognized on the date of the commencement of the lease. However, for short-termleases and leases for which the underlying asset is of low value, the Group may recognize the lease
payments related to the lease as an expense using the straight-line method over the lease term.
In some lease contracts among those aforementioned agreements, an option for the lessee to extend thelease period is attached.
The Group exercises the option to extend a lease if it judges it necessary to exercise that option after
comprehensively considering the profitability of the underlying asset of the agreement, changes to theenvironment of the neighborhood market and the exercise conditions of the option. However, in cases
where there is no reasonable certainty that the option will be exercised on the start date of the lease, the- 156 -

corresponding extension period is not included in the lease period and the lease payment for that period is
not included in the measurement of lease liabilities.
For both the option to extend the lease period and the option to cancel the lease, the Group reviews thepossibility of exercising the option each period.
The total amount of agreements that contain contingent rents or residual value guarantee, or the total
amount of leases that have not yet started regardless of whether the agreement has been concluded are
immaterial.
The breakdown of right-of-use assets is as follows:(Millions of yen)Type of underlying assets
Buildings andMachinery, tools

structuresand fixtures

Intangible assets,

Land

Total

other

As of February 28, 2021

131,651

2,221

22,400

1,546

157,819

As of February 28, 2022

115,049

1,603

22,433

1,382

140,470

Profit or loss related to right-of-use assets
Costs related to leases and cash outflow are as follows.
(Millions of yen)
Fiscal year ended

Fiscal year ended

February 28, 2021

February 28, 2022

Depreciation expense of right-of-use assets (Note)
Items with buildings and structures as the underlying

23,092

22,441

988

919

1,161

1,201

165

156

Total depreciation expense of right-of-use assets

25,40824,718Interest expenses related to lease liabilities

4,445

4,009

Costs related to current lease obligations

428

487

Costs related to leases of low-value assets

1,053

1,084

576

163

Total (net) of costs related to leases

6,504

5,744

Repayments of lease liabilities

29,25429,674

Income from subleasing (Note)

11,72011,962

Cash outflow related to leases

24,03823,456assets
Items with machinery, tools and fixtures as theunderlying asset
Items with land as the underlying asset
Items with intangible assets, other as the underlying asset

Contingent rents not included in the measurement oflease liabilities

Note:

Right-of-use assets that fall under the definition of investment property are excluded.

- 157 -

Lease liabilities
A maturity analysis for lease liabilities is as follows.
(Millions of yen)
As of February 28, 2021

As of February 28, 2022

Contractual undiscounted cash flows
Due within one year

33,13731,932

Due after one year through two years

30,34729,089Due after two years through three years

28,04827,524Due after three years through four years

26,51821,935Due after four years through five years

21,676

14,913Due after five years

90,37685,426

Balance of lease liabilities before discount230,103

210,821

Current

29,79928,554Non-current

173,085

155,839(2) As lessor
The Group mainly leases investment property and tenant space inside commercial facilities using financelease or operating lease transactions.
These lease assets are exposed to the risk of being damaged due to the use by the lessee that is above andbeyond regular use, or as a result of intentional acts or gross negligence. To avoid and mitigate such risks,
the Group requires in accordance with lease contracts that lessees provide a lease or guarantee deposit of acertain amount, and if the asset is actually damaged, the lease or guarantee deposit is used to fund thecosts required for repair.
1) Finance leases (As lessor)
The information has been omitted due to its immateriality.
2) Operating leases (As lessor)
Revenue related to operating leases is as follows:
Fiscal year ended
February 28, 2021

(Millions of yen)
Fiscal year ended
February 28, 2022

Lease revenue (other than contingent rents)

26,37228,532

Lease revenue (contingent rents)

21,62824,956The maturity analysis for lease payments relating to operating leases is as follows:
As of February 28, 2021

(Millions of yen)
As of February 28, 2022

Due within one year
Due after one year through two years
Due after two years through three years
Due after three years through four years
Due after four years through five years
Due after five years

21,93919,507
18,945
17,612
15,876
120,61221,12919,63018,09916,50915,182
111,513

Total

214,493

202,064- 158 -

Changes in the carrying amount, acquisition cost, and accumulated depreciation and impairment ofunderlying assets of operating leases recorded under property, plant and equipment in the consolidated
statement of financial position are as follows:
Carrying amount(Millions of yen)
Buildings and structures

Land
Balance as of March 1, 2020
Acquisitions
Acquisition due to business combinations
Sales or disposals
Changes due to commencement and expirationof leases
Transfer among line items
Depreciation expense
Impairment loss
Exchange differences on translation of foreign
operations
Other
Balance as of February 28, 2021
Acquisitions
Sales or disposals
Changes due to commencement and expirationof leases
Transfer among line items
Depreciation expense
Impairment loss
Exchange differences on translation of foreign
operations
Other
Balance as of February 28, 2022

112,472

78,383

–
–
–

9,167
–
(66)

21,2596,288

15,831–(263)

17,163(6,364)(1,141)

–

–

(49)

–

149,250

103,431

43
–

1,620
(170)

–

–

–
–
–

–
(7,537)
(41)

–

–

(63)

57

149,231

97,359Acquisition costs(Millions of yen)
Buildings and structures

Land
Balance as of March 1, 2020

112,687

168,111

Balance as of February 28, 2021

149,729

206,992

Balance as of February 28, 2022

149,709

208,406

Accumulated depreciation and impairment(Millions of yen)
Buildings and structures

Land
Balance as of March 1, 2020

215

89,727

Balance as of February 28, 2021

478

103,561

Balance as of February 28, 2022

478

111,046- 159 -

14. Investment Property(1) Schedule of changes
Changes in acquisition costs, accumulated depreciation and impairment and carrying amounts ofinvestment property and fair values as of the end of each fiscal year are as follows:
Acquisition costs
Self-owned assets

Right-of-use assets

Total

Millions of yen

Millions of yen

Millions of yen

Balance as of March 1, 2020

212,433

31,278

243,711

Acquisitions
Sales or disposals
Transfer among line items
Other

4,569
(185)
(34,227)
(726)

4,193
–
(251)
(132)

8,763
(185)
(34,479)(859)

Balance as of February 28, 2021

181,86235,088

216,950

Acquisitions
Sales or disposals
Transfer among line items
Other

3,472
(1,133)
175
71

4,007
–
–
(129)

7,480
(1,133)
175(57)

Balance as of February 28, 2022

184,446

38,967

223,413

Accumulated depreciation and impairment
Self-owned assets

Right-of-use assets

Total

Millions of yen

Millions of yen

Millions of yen

Balance as of March 1, 2020

(15,962)(8,394)(24,356)

Depreciation expense
Impairment loss
Sales or disposals
Transfer among line items
Other(2,322)
(130)
54
1,509
216

(3,118)
(47)
–
6
116

(5,441)
(177)
54
1,516
332

Balance as of February 28, 2021

(16,634)(11,436)(28,071)

Depreciation expense
Impairment loss
Sales or disposals
Transfer among line items
Other(1,964)
(805)
426
(154)
–

(3,221)
(83)
–
–
147

(5,185)
(888)
426
(154)
147

Balance as of February 28, 2022

(19,131)(14,594)(33,725)

Carrying amounts and fair values(Millions of yen)
As of February 28, 2022

As of February 28, 2021
Carrying amount
Investment property

Fair value

188,879

266,687

Carrying amount
189,688

Fair value
257,720

Fair value of investment property is based on real-estate appraisal by an external real-estate appraiser withrecent experience in appraisal for the region where the property is located and the type of the property to
be valued who holds certified professional qualifications and others. The appraisal is based on market
evidence reflecting the transaction price of similar assets in accordance with valuation standards of thecountry where the property is located.

- 160 -

(2) Income and expenses from investment property(Millions of yen)
Fiscal year ended
February 28, 2022

Fiscal year ended
February 28, 2021
Rental income
Direct operating expense

16,027
10,271

17,054
10,398The amounts of rental income from investment property and accompanying direct operating expense areincluded in “sales revenue” and “cost of sales,” respectively, in the consolidated statement of income.
(3) Commitments
Please refer to “39. Commitments” for commitments related to purchase of investment property.
15. Impairment of Non-financial Assets
Non-financial assets are grouped based on the smallest cash-generating unit (principally stores) that generates
cash inflows largely independent of those of other assets.
Impairment losses are recorded in “other operating expense” in the consolidated statement of income.
The breakdown of the assets for which impairment losses were recognized by segment is as follows:
Fiscal year ended February 28, 2021
Segment

Company name (Location)

Use

Type
Buildings and structures

Daimaru Matsuzakaya Department Stores
Department Store
Co. Ltd.
Business(Kita-ku, Osaka, etc.)

Store, etc.

2

Furniture and fixtures

41

Right-of-use assets

3,386
44

Buildings and structures
Store, etc.

SC Business
NEUVE A Co., Ltd.
(Shibuya-ku, Tokyo, etc.)

Developer
Business

PARCO SPACE SYSTEMS Co., Ltd.
(Tokorozawa, Saitama, etc.)

Store, etc.

Office, etc.

Office, etc.

Other
Daimaru Kogyo, Ltd.
(Chuo-ku, Osaka, etc.)
Adjustments(corporate)

J. FRONT RETAILING Co., Ltd.
(Chuo-ku, Tokyo)

Office, etc.

Other

7

Furniture and fixtures

24

Right-of-use assets

1,204

Investment property

54

Buildings and structures

146

Furniture and fixtures

156

Right-of-use assets

341

Software

56

Other

7

Furniture and fixtures

2

Right-of-use assets

5
138

Furniture and fixtures

3

Software

5

Other

13

Buildings and structures

16

Machinery and vehicles

16

Furniture and fixtures

6

Software46

Software

343
Total

Note:

1,171

Machinery and vehicles

Buildings and structures
J. Front Foods Co., Ltd.
(Chuo-ku, Tokyo, etc.)

6,883

Machinery and vehicles

Other

PARCO Co., Ltd.
(Matsumoto, Nagano, etc.)(Millions of yen)
Impairment loss

14,122Since reportable segments have been changed from the fiscal year ended February 28, 2022, the figures for the fiscal year ended February
28, 2021 have been reclassified based on the new segment classifications.

1) With regard to the Department Store Business, principally because of decreased profitability of
Daimaru Matsuzakaya Department Stores Co. Ltd.’s Daimaru Umeda store, the carrying amount of- 161 -

buildings and structures, etc. was reduced to the recoverable amount and the reduction of ¥9,534
million was recognized as an impairment loss. The recoverable amount of the cash-generating unit
was measured at value in use, and was calculated by discounting future cash flows by a pre-tax
discount rate of 3.7%, which was based on the WACC at the time of measurement, taking into accountthe future profitability and other factors.
2) With regard to the SC Business, principally because of decreased profitability of PARCO Co., Ltd.’s
Matsumoto PARCO, the carrying amount of buildings and structures, etc. was reduced to therecoverable amount and the reduction of ¥783 million was recognized as an impairment loss. The
recoverable amount of the cash-generating unit was measured at value in use, and was calculated bydiscounting future cash flows by a pre-tax discount rate of 3.6%, which was based on the WACC at
the time of measurement, taking into account the future profitability and other factors.
In addition, with regard to PARCO Co., Ltd.’s Tsudanuma PARCO for which the decision to cease
operations was made, an impairment loss (¥925 million) was recorded as loss on business liquidation.
The recoverable amount of the cash-generating unit was measured at value in use, and was calculatedby discounting future cash flows by a pre-tax discount rate of 3.4%, which was based on the WACC at
the time of measurement, taking into account the future profitability and other factors.
There was no reversal of impairment losses recorded in the fiscal year ended February 28, 2021.
Fiscal year ended February 28, 2022
Segment

Company name (Location)

Daimaru Matsuzakaya Department Stores
Department Store
Co. Ltd.
Business(Chuo-ku, Tokyo, etc.)

SC Business

PARCO Co., Ltd.
(Funabashi, Chiba, etc.)

Use
Investment
property, etc.

Store, etc.

Developer
Business

PARCO Co., Ltd.
(Osaka, Osaka, etc.)

Store, etc.

Other

Daimaru Kogyo, Ltd.
(Chuo-ku, Osaka, etc.)

Office, etc.

Type

(Millions of yen)
Impairment loss

Right-of-use assets

6

Investment property

106

Buildings and structures

41

Machinery and vehicles

2

Furniture and fixtures

0

Right-of-use assets

188

Software0

Furniture and fixtures

0

Right-of-use assets

76

Investment property

698

Furniture and fixtures

12

Software

0
Total

1,136

1) With regard to the Department Store Business, the main item is an impairment loss of ¥103 million
recognized for an expected decrease in revenue due to tenant withdrawals and write-down of thecarrying amount of buildings and structures to the recoverable amount in relation to the formulation ofa rebuilding and redevelopment plan for the Ginza Core building, in which Daimaru Matsuzakaya
Department Stores Co. Ltd. participates as a joint building business. The recoverable amount of the
cash-generating unit is measured as the fair value less cost of disposal.
2) With regard to the SC Business, the main item is an impairment loss of ¥231 million recognized for awrite-down of the carrying amount of right-of-use assets to the recoverable amount due to a decreasein the profitability of PARCO Co., Ltd.’s Tsudanuma PARCO. The recoverable amount of the cashgenerating unit was measured at value in use, and was calculated by discounting future cash flows by
a pre-tax discount rate of 3.9%, which was based on the WACC at the time of measurement, taking
into account the future profitability and other factors.
3) With regard to the Developer Business, the main item is an impairment loss of ¥593 million
recognized for a write-off of the entire amount of the carrying amount of investment real estate due toa decision to terminate the PARCO Co., Ltd.’s Dotonbori ZERO GATE project. The recoverable
amount was based on the value-in-use, which was zero.
In addition, an impairment loss of ¥159 million was recognized for the entire amount of the carrying
amount of the structure portion only of investment real estate due to a decision to dismantle andrebuild PARCO Co., Ltd.’s Nishiki 3-chome building. The recoverable amount was based on thevalue-in-use, which was zero.
- 162 -

There was no reversal of impairment losses recorded in the fiscal year ended February 28, 2022.
16. Investments Accounted for Using the Equity Method
Investments in associates
The carrying amount of investments in associates that are not individually material is as follows:
As of February 28, 2021
Total carrying amount37,815(Millions of yen)
As of February 28, 2022
38,761The Group’s share of comprehensive income of associates that are not individually material is as follows:(Millions of yen)
Fiscal year ended
February 28, 2022

Fiscal year ended
February 28, 2021
Share of profit

717

1,364

Share of other comprehensive income

(91)

136

Share of comprehensive income

626

1,500

17. Joint Operations
In the Group, Daimaru Matsuzakaya Department Stores Co. Ltd., a subsidiary, works on the joint operation of
GINZA SIX, a commercial facility located at Ginza 6-chome 10, running the joint operation with partners,
namely L Real Estate S.C.A SICAR and SUMITOMO CORPORATION. With regard to revenue and expenses
related to the operation of this commercial facility, including profit and loss based on tenant agreements, theamount corresponding to the ownership ratio of Daimaru Matsuzakaya Department Stores Co. Ltd. (68%),
determined according to the ownership category of the commercial facility and other factors, was recognized.

- 163 -

18. Income Tax(1) Deferred tax assets and liabilities
The breakdown of and changes in deferred tax assets and liabilities by major cause are as follows:
Fiscal year ended February 28, 2021
(Millions of yen)
Balance as ofMarch 1, 2020

Recognized in
profit or loss

Recognized inothercomprehensive
income

5,810
665
5,900
–
1,061
30

1,534
(50)
(527)
85
883
5,457

(164)
–
–
(31)
–
–

–
–
–
6
–
–

7,180
614
5,372
60
1,944
5,487

4,714

520

–

–

5,235

104

1

–

–

106

Other (Note)

Balance as ofFebruary 28,
2021

Deferred tax assets
Retirement benefit liabilities
Allowance for credit losses
Non-current assets
Other financial assets
Asset retirement obligations
Tax loss carryforwards
Gain on adjustment ofaccounts payable
Long-term unearned revenue
Prepaid expense (Landleasehold right)
Lease liabilities
Other

2,972

–

–

–

2,972

62,46911,673(2,885)(1,594)

–
(294)

–
–

59,584
9,784

Total

95,401

3,425

(490)

6

98,34374,6766,442
62,445
678

4,612
(781)
(6,208)
1,727

–
(786)
–
611

(384)
–
(3)
(134)

78,903
4,873
56,233
2,882

Total

144,243

(650)

(175)

(522)

142,893

Net amount of deferred tax
assets(48,841)

4,076

(314)

529

(44,550)

Deferred tax liabilities
Non-current assets
Securities
Right-of-use assets
Other

Note:

Changes, etc. due to the sale of a consolidated subsidiary are included in “Other.”- 164 -

Fiscal year ended February 28, 2022
(Millions of yen)
Balance as ofMarch 1, 2021

Recognized in
profit or loss

Recognized inothercomprehensive
income

7,180
614
5,372
60
1,944
5,487

(451)
46
(717)
28
(261)
1,142

(734)
–
–
(79)
–
–

–
(3)
(1)
–
–
–

5,994
657
4,653
8
1,683
6,630

5,235

422

–

–

5,658

106

(7)

–

–

98

Other (Note)

Balance as ofFebruary 28,
2022

Deferred tax assets
Retirement benefit liabilities
Allowance for credit losses
Non-current assets
Other financial assets
Asset retirement obligations
Tax loss carryforwards
Gain on adjustment ofaccounts payable
Long-term unearned revenue
Prepaid expense (Landleasehold right)
Lease liabilities
Other

2,972

11

–

–

2,984

59,584
9,784(6,424)
5,654

–
–

43
(284)

53,20315,154

Total

98,343

(555)

(814)

(245)

96,72778,903
4,873
56,2332,882(3,287)199(5,714)
5,821

–
435
–
(23)

0
–
(107)
(2)

75,616
5,508
50,411
8,679

Total

142,893(2,980)

412

(109)

140,215

Net amount of deferred tax
assets(44,550)

2,424(1,226)(136)(43,488)

Deferred tax liabilities
Non-current assets
Securities
Right-of-use assets
Other

Note:

Changes, etc. due to the sale of a consolidated subsidiary are included in “Other.”

Deferred tax assets and liabilities in the consolidated statement of financial position are as follows:(Millions of yen)
As of February 28, 2022

As of February 28, 2021
Deferred tax assets
Deferred tax liabilities
Net amount

6,751
51,301

8,209
51,697(44,550)(43,488)

In recognizing deferred tax assets, the Group takes into account the possibility that tax loss carryforwards
or deductible temporary differences can be utilized against future taxable profit. In the recoverability ofdeferred tax assets, the Group considers the scheduled reversal of deferred tax liabilities, projected futuretaxable profit and tax planning.
Based on the result of the above assessment of recoverability of deferred tax assets, some of the Group’s
subsidiaries have not recognized deferred tax assets for certain tax loss carryforwards and deductible
temporary differences. Tax loss carryforwards and deductible temporary differences for which deferred
tax assets have not been recognized are as follows:
Major balances of deferred tax assets of the Group are related to the consolidated taxation group in which
the Company is the consolidated parent corporation, and many of these deferred tax assets were recordedat Daimaru Matsuzakaya Department Stores Co. Ltd. and PARCO Co., Ltd., which are domestic
subsidiaries.
(Millions of yen)
As of February 28, 2022

As of February 28, 2021
Tax loss carryforwards
Deductible temporary differences
Total- 165 -

12,31054,097

5,297
45,082

66,40850,380

The deferral period of tax loss carryforwards for which deferred tax assets have not been recognized is asfollows:(Millions of yen)
As of February 28, 2021

As of February 28, 2022

1st year––

2nd year––

3rd year––

4th year––

12,3105,297

12,3105,297

5th year and after
Total

The Company and some of its domestic subsidiaries decided in October 2021 to apply the consolidated
taxation system effective from the fiscal year ending February 28, 2023 and applied for approval for the
consolidated taxation system to the relevant authorities in November 2021, and the consolidated taxation
system is to be applied from the next fiscal year. Accordingly, from the current fiscal year, the Company
and some of its domestic subsidiaries have applied accounting treatment assuming the adoption of the said
system. The above figures do not include the amounts of deductible temporary differences and unused tax
losses for which deferred tax assets have not been recognized, related to local taxes (inhabitant tax andbusiness tax), which are not subject to the said system. As of February 28, 2022, the amount of deductible
temporary differences related to local taxes (inhabitant tax and business tax) was ¥56,515 million, and theamount of unused tax losses was ¥7,477 million.
As of February 28, 2021 and February 28, 2022, the total amount of temporary differences forinvestments in subsidiaries that were not recognized as deferred tax liabilities were ¥140,938 million and¥130,448 million, respectively.
(2) Income tax
The breakdown of income tax is as follows:(Millions of yen)
Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Current taxes:
Current period

1,910

4,624

Prior periods

(86)

25

Total current taxes

1,824

4,650

Origination and reversal of temporary
differences, etc.

(9,692)757

Changes in unrecognized deferred tax assets

5,616(3,182)(4,076)(2,424)(2,251)

2,225

Deferred taxes:

Total deferred taxes
Total- 166 -

(3) Reconciliation between effective tax rates
Differences between the effective statutory tax rate and average effective tax rate are as follows:
Fiscal year ended February 28, 2021

Fiscal year ended February 28, 2022%%

Effective statutory tax rate

30.6

30.6

Entertainment expense

(0.3)

1.4

Bonuses for directors (and other officers)

(0.0)

0.3

Dividend income

0.0

(0.3)

Share of profit (loss) of investments accounted
for using equity method

0.8

(6.8)

(23.2)(5.1)

Unrecognized deferred tax assets
Consolidation adjustments for gain (loss) on
sales of shares of subsidiaries
Difference from the applicable tax rate of
subsidiaries

–

10.3

(0.3)

4.8

Other

0.2

0.7

Average effective tax rate

7.9

36.0

19. Cash Flow Information(1) Changes in liabilities arising from financing activities
Changes in liabilities arising from financing activities are as follows:
Fiscal year ended February 28, 2021
Changes that do not affect cash flows
Balance as ofMarch 1, 2020

Changes that
affect cash flows

New leases andchanges inagreements

Changes in fairvaluesOther

Balance as ofFebruary 28, 2021

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Current borrowings

71,000(13,000)–––

58,000Commercial papers

4,000

66,001–––70,001

Non-current
borrowings

103,51058,600–––162,110

Bonds

79,766(10,000)––

52

69,819Lease liabilities

220,497(29,254)

11,701–(59)

202,885

478,773

72,346

11,701–(6)

562,815

Total- 167 -

Fiscal year ended February 28, 2022
Changes that do not affect cash flows
Balance as ofMarch 1, 2021

Changes that
affect cash flows

New leases andchanges inagreements

Changes in fairvaluesOther

Balance as ofFebruary 28, 2022

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Current borrowings

58,000––––58,000Commercial papers

70,001(54,998)–––

15,002

Non-current
borrowings

162,110(17,150)–––

144,960

Bonds

69,81929,867––65

99,752

Lease liabilities

202,885(29,674)

11,891–(708)

184,394562,815(71,955)

11,891–(642)

502,109

Total(2) Non-cash transactions
Right-of-use assets acquired through leases are as follows:
Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Millions of yen

Millions of yen
10,883Right-of-use assets acquired through leases

8,333(3) Loss of control
1) Transfer of NEUVE A Co., Ltd.
(i) Overview of transaction
In accordance with the share transfer agreement concluded with Libra Invesco Co., Ltd. on May
10, 2021, PARCO Co., Ltd., a consolidated subsidiary of the Company, transferred all the sharesof NEUVE A Co., Ltd. held by PARCO Co., Ltd. on June 30, 2021. Due to this transfer, theCompany lost control of NEUVE A Co., Ltd.
(ii) The amounts of assets and liabilities disposed of(Millions of yen)AmountCash and cash equivalents

650

Other current assets

3,085

Non-current assets

1,189

Total assets

4,924

Current liabilities

2,226

Non-current liabilities

402

Total liabilities

2,628- 168 -

(iii) Cash flows arising from loss of control(Millions of yen)AmountCash and cash equivalents received as compensation for loss of control

600

Expenses related to transfer of a subsidiary(79)

Cash and cash equivalents in a subsidiary of which the Company lost control(650)

Payments for sales of shares of subsidiaries that result in change in scope of consolidation (Note)

(129)

Note:

Payments for sales of shares of subsidiaries that result in change in scope of consolidation are included in cash flows from (usedin) investing activities in the consolidated statement of cash flows.

2) Transfer of Dimples’ Co., Ltd.
(i) Overview of transaction
In accordance with the share transfer agreement concluded with WORLD HOLDINGS CO., LTD.
on January 6, 2022, the Company transferred 90% of the total number of shares of Dimples’ Co.,
Ltd. held by the Company on February 28, 2022. Due to this transfer, the Company lost control ofDimples’ Co., Ltd.
(ii) The amounts of assets and liabilities disposed of(Millions of yen)AmountCash and cash equivalents

309

Other current assets

760

Non-current assets

495

Total assets

1,565

Current liabilities

1,221

Non-current liabilities

149

Total liabilities

1,370(iii) Cash flows arising from loss of control(Millions of yen)AmountCash and cash equivalents received as compensation for loss of control

3,788

Cash and cash equivalents in a subsidiary of which the Company lost control(309)

Proceeds from sales of shares of subsidiaries that result in change in scope of consolidation (Note)

3,479

Note:

Proceeds from sales of shares of subsidiaries that result in change in scope of consolidation are included in cash flows from (usedin) investing activities in the consolidated statement of cash flows.

- 169 -

20. Bonds and Borrowings(1) Breakdown of financial liabilities
The breakdown of “bonds and borrowings” and “other financial liabilities” is as follows:
As of February 28, 2021

As of February 28, 2022

Averageinterest rate
(Note 1)Millions of yen

Millions of yen%

Repayment
deadline

Current borrowings

75,15073,1500.29–

Commercial papers

70,001

15,002––

Non-current borrowings

144,960

129,8100.38

From March 2023
to May 2035

Bonds (Note 2)

69,81999,752

Guarantee deposits received

39,55537,790

–

–

Other

29,893

28,866

–

–

Total

429,379

384,372––

Current liabilities

175,363

138,068––

Non-current liabilities

254,016

246,304––

Notes:

1.
2.

(Note 2)

(Note 2)

The average interest rates are weighted-average interest rates based on the contract interest rates and the closingbalances for each borrowing.
Summary of issuing conditions of bonds is as follows:(Millions of yen)Company name

J. FRONTRETAILING Co.,Ltd.
J. FRONTRETAILING Co.,Ltd.
J. FRONTRETAILING Co.,Ltd.
J. FRONTRETAILING Co.,Ltd.
J. FRONTRETAILING Co.,Ltd.
J. FRONTRETAILING Co.,Ltd.
J. FRONTRETAILING Co.,Ltd.

Date of issue

As of February
28, 2021

As of February
28, 2022

Interest
rate(%)

Maturity dateAugust 5, 2015

5,000

5,000

0.46

August 5, 2022

5th series of
unsecured bonds

August 4, 2017

15,00015,0000.16

August 4, 2022

6th series of
unsecured bonds

August 4, 2017

20,00020,0000.43

August 4, 2027

May 22, 2019

20,00020,0000.20

May 22, 2024

May 22, 201910,00010,0000.37

May 22, 2029

9th series of
unsecured bonds

May 26, 2021–

15,0000.17

May 26, 2026

10th series of
unsecured bonds

May 26, 2021–

15,0000.47

May 26, 2028

70,000100,000

0.30

Bond name

4th series of
unsecured bonds

7th series of
unsecured bonds
8th series of
unsecured bonds

Total- 170 -

Agreements on some of borrowings of the Group require the maintenance of specific financial ratios and net assets at a
certain level.
The Group has complied with all the agreements on borrowings.

(2) Assets pledged as collateral
The Group has pledged corporate properties as collateral for borrowings, etc. Secured creditors have theright to receive the payment of their claims prior to other unsecured creditors with regard to the Group’s
properties.
Assets pledged as collateral for borrowings, etc. are as follows:(Millions of yen)
As of February 28, 2021

As of February 28, 2022

Land

5,290

–

Buildings and structures

2,288

–

Other financial assets

241

160

Inventories

83

81

7,903

242

Total

The corresponding obligations are as follows:(Millions of yen)
As of February 28, 2021

As of February 28, 2022

Long-term borrowings

225–

Trade and other payables

110

177

Total

335

177

21. Trade and Other Payables
The breakdown of trade and other payables is as follows.
These are all classified as financial liabilities measured at amortized cost.
(Millions of yen)
As of February 28, 2021

As of February 28, 2022

Notes payable - trade

2,276

2,353

Accounts payable - trade

61,74162,937

Accounts payable - other

32,49527,327

Deposits received

22,893

21,602

Other

2,530

1,886

121,937

116,107Total

22. Employee Benefits
The Group has established defined benefit plans (such as a corporate pension fund plan and lump-sum
retirement benefit plan) as employee retirement benefit plans, and certain consolidated subsidiaries haveadopted defined contribution plans. In addition, the Group may pay extra retirement payments whenemployees retire before their normal retirement date. Certain consolidated subsidiaries have instituted aretirement benefit trust.
- 171 -

In regard to the corporate pension fund plan, the Group has obligations including paying contributions to thecorporate pension fund under the Defined-Benefit Corporate Pension Act, etc. Directors of the fund have
responsibilities including a duty of loyalty to faithfully execute operations related to managing and operating
funds in the interests of the fund. In addition, it is stipulated that directors are forbidden from entering into any
asset management contract aimed at serving the interests of a third party, and rules of conduct that include
forbidding acts that create a conflict of interest are clarified.
The plan is mainly operated by a corporate pension fund that is independent from the Group. The board ofrepresentatives comprises the same number of representatives elected from among the employers (elected
representatives) and representatives elected from among employees (mutually elected representatives), and thechairperson (president) of the board of representatives is elected from among the employers.
Decisions of the board of representatives are made by a majority of members in attendance, but in the case ofa tie, the President, who is the Chairperson, has the authority to make a decision. However, it is stipulated thatdecisions related to particularly important matters shall be determined by a majority in excess of the above.
The board of representatives holds the authority to make decisions about all important matters, such as
investment policies. Actual asset management is conducted by a managing trustee under an investment service
agreement, and directions from the board of representatives regarding investment in individual securities, etc.
are forbidden by laws and regulations.
The Company is required to pay contributions to the corporate pension fund and contributions are regularly
reviewed within the range permitted by laws and regulations. While the Company is obligated to makecontributions stipulated by the fund into the future, in addition to these contributions, it also funds a retirement
benefit trust on a voluntary basis.
With regard to the lump-sum retirement benefit plan, the Company is obligated to pay benefits directly to thebeneficiaries. There are no statutory requirements regarding funding.
(1) Defined benefit plans
The relationship between the present value of the defined benefit obligations and the fair value of the plan
assets and the amounts recognized in the consolidated statement of financial position is as follows:(Millions of yen)
As of February 28, 2021

As of February 28, 2022

Present value of funded defined benefit
obligations

25,291

23,729Fair value of plan assets(36,043)(35,179)(10,752)(11,450)

21,43521,36010,683

9,910

Retirement benefit liabilities

19,781

19,416Retirement benefit assets

9,098

9,506

10,683

9,910

SubtotalPresent value of unfunded defined benefit
obligations
Liabilities of defined benefit plans
Amounts in the consolidated statement offinancial position

Net defined benefit liability or asset in the
consolidated statement of financial position- 172 -

Changes in the present value of the defined benefit obligations are as follows:(Millions of yen)
Fiscal year ended
February 28, 2021
Present value of defined benefit obligations at

Fiscal year ended
February 28, 2022
47,341

46,726

1,652

1,480

79

190

(146)

(25)

802

(148)

(2,877)(3,135)

Other

(125)

1

Present value of defined benefit obligations at
end of period

46,72645,089beginning of period
Service cost
Interest expense
Remeasurements
Actuarial gains and losses arising fromchanges in demographic assumptions
Actuarial gains and losses arising fromchanges in financial assumptions
Benefits paid

Changes in the fair value of the plan assets are as follows:(Millions of yen)
Fiscal year ended
February 28, 2021
Fair value of plan assets at beginning of period

Fiscal year ended
February 28, 2022
39,25336,04360

143

Return on plan assets

2,268

2,193

Contributions by employer

819

764

Benefits paid

(2,360)(2,265)Return of trust assets(4,000)(1,700)2–

36,04335,179Interest revenue
Remeasurements

Other
Fair value of plan assets at end of period- 173 -

The fair value of each item of plan assets is as follows:
As of February 28, 2021
(Millions of yen)
Items of plan assets

Assets with quoted market
prices in active markets

Assets without quoted
market prices in active
markets

Cash and cash equivalents

1,704

–

1,704

Domestic shares

11,085238

11,323

Overseas shares

3,888

249

4,137

–

684

684

Domestic bonds

353

7,758

8,112

Overseas bonds

120

2,588

2,708

–

1,149

1,149

General accounts of life insurancecompanies

–

5,444

5,444

Other

–

778

778

17,151

18,891

36,043

Assets with quoted market
prices in active markets

Assets without quoted
market prices in active
markets

Cash and cash equivalents

1,269

–

1,269

Domestic shares

12,092283

12,376

Overseas shares

3,588

280

3,869

–

761

761

Domestic bonds

298

6,112

6,411

Overseas bonds

98

3,872

3,970

Jointly operated trusts(public and corporate bonds)

–

977

977

–

4,735

4,735

–

808

808

17,347

17,83235,179

Jointly operated trusts(shares)

Jointly operated trusts(public and corporate bonds)

Total

Total

As of February 28, 2022
(Millions of yen)
Items of plan assets

Jointly operated trusts(shares)

General accounts of life insurancecompanies
Other
Total

Total

The Group’s management of plan assets is aimed at ensuring the necessary income over the long-term toreliably make pension and lump-sum payments into the future. Its investment policy to achieve this isfundamentally to make diversified investments after analyzing characteristics of risks and returns for each
asset and taking into account correlations between respective assets.
Specifically, the Group develops the policy asset mix that is the optimal combination now and in the
future after taking into account the expected rate of return and risks on eligible investments, and the
managing trustee manages assets accordingly.
- 174 -

In regard to plan assets, the status of asset management is managed primarily by regularly reviewing thefinancial position of the plans, formulating long-term management policies, and monitoring the status ofasset allocation.
The Group’s pension funding is determined after taking into consideration various factors such as theallowable limit of deductible expenses under tax laws, the funding status of plan assets and actuarial
calculations. Contributions to plan assets are intended to cover benefits for services already rendered, in
addition to benefits for services to be rendered in future.
In accordance with the provisions of the Defined-Benefit Corporate Pension Act, the rules of the corporate
pension fund stipulate that the amount of contributions shall be recalculated every three to five years witha record date of the fiscal year end, in order to preserve a balanced budget into the future. During therecalculation, the basic rates related to contributions (expected interest rates, expected mortality rates,
expected withdrawal rates, expected salary increase indexes, expected number of new participants, etc.)
are reviewed, and the appropriateness of the contributions is reverified.
The Group plans to pay contributions of ¥823 million in the fiscal year ending February 28, 2023.
The weighted average duration of the defined benefit obligations as of February 28, 2021 was 9.48 years.
The weighted average duration of the defined benefit obligations as of February 28, 2022 was 9.28 years.
The main actuarial assumptions used to calculate the present value of the defined benefit obligations are
as follows:
As of February 28, 2021

As of February 28, 2022%%

Discount rate

Mainly 0.3

Mainly 0.4

Anticipated rate of salary increase

Mainly 4.6

Mainly 4.6

The sensitivity analysis is conducted based on changes in assumptions that are reasonably possible, as ofthe end of the fiscal year.
The sensitivity analysis is based on the premise that all actuarial assumptions remain constant other than
the actuarial assumption that is the focus of the analysis, but in reality there is a possibility that changes inother actuarial assumptions may affect the sensitivity analysis.
If there are no other changes to assumptions, the sensitivity of defined benefit obligations at the end ofeach fiscal year to changes in the discount rate is as follows. Furthermore, the Group does not expect any
changes in the anticipated rate of salary increase.
(Millions of yen)
As of February 28, 2021

As of February 28, 2022

Changes in discount rate
0.5% increase(2,094)(1,981)

0.5% decrease

2,266

2,139

- 175 -

Amounts recognized as retirement benefit expense are as follows:(Millions of yen)
Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Service cost

1,652

1,480

Net interest

19

47

Other

76

122

1,748

1,650

Total

(2) Defined contribution plans
The amount recorded as expenses in relation to defined contribution plans is ¥4,575 million for the fiscal
year ended February 28, 2021 and ¥4,479 million for the fiscal year ended February 28, 2022, andincluded in “cost of sales” and “selling, general and administrative expense” in the consolidated statementof income. The above amounts include the amount of the employer’s contribution to welfare pension
insurance premiums.
(3) Extra retirement payments
Extra retirement payments may be provided when an employee retires prior to the normal retirement date.
The amount recorded as expenses in relation to extra retirement payments was ¥101 million in the fiscal
year ended February 28, 2021 and ¥3,477 million in the fiscal year ended February 28, 2022, and included
in “other operating expense” in the consolidated statement of income.
(4) Employee benefit expenses
The amount of employee benefit expenses was ¥61,307 million in the fiscal year ended February 28, 2021
and ¥62,009 million in the fiscal year ended February 28, 2022, and included in “cost of sales” and“selling, general and administrative expense” in the consolidated statement of income.

- 176 -

23. Provisions
The breakdown and changes of provisions are as follows:(Millions of yen)
Asset retirement
obligations

Provision for loss on
business liquidation

Total

Balance as of March 1, 2020

3,952

1,956

5,908

Increase during the period

3,024

3,637

6,661

43

–

43

(118)

(505)

(623)

–

(102)

(102)

Other

(192)

(245)

(438)

Balance as of February 28, 2021

6,708

4,740

11,449

122

–

122

48

–

48

Decrease during the period (use)

(362)

(443)

(805)

Decrease during the period (reversal)

(51)

(82)

(134)

Other

(123)

(48)

(172)

Balance as of February 28, 2022

6,342

4,165

10,507

Discounted interest expenses for theperiodDecrease during the period (use)Decrease during the period (reversal)

Increase during the period
Discounted interest expenses for theperiodThe breakdown of provisions in the consolidated statement of financial position is as follows:(Millions of yen)
As of February 28, 2021
Current liabilities
Non-current liabilities
Total

As of February 28, 2022
914

954

10,534

9,553

11,44910,507(1) Asset retirement obligations
Asset retirement obligations are recorded at the estimated amount of restoration costs for rented stores,
offices, etc. for which the Group has obligations to restore to original state at the time when the leaseagreement is terminated. These expenses are expected to be mainly paid after one year or longer has
passed from the end of the fiscal year, and will be affected by future business plans, etc.
(2) Provision for loss on business liquidation
An amount of loss is recorded for the cost of store dismantlement, etc. that is expected to be borne in the
future as a result of business liquidation, store closure and store rebuilding. These expenses are expected
to be mainly paid after store closure or rebuilding (within four years from the end of the fiscal year), butwill be affected by changes in the surrounding environment and other factors.

- 177 -

24. Other Liabilities
The breakdown of other liabilities is as follows:(Millions of yen)
As of February 28, 2021

As of February 28, 2022

Accrued bonuses

3,794

4,504

Accrued paid absences

3,389

2,479

Deferred income (Note)

434

408

Contract liabilities

42,93539,739Other accrued expense

6,949

9,939

Other

3,182

2,734

60,68559,80659,95359,243

731

563

Total
Other current liabilities
Other non-current liabilities
Note:

The breakdown of deferred income in the fiscal year ended February 28, 2021 was ¥434 million in government grants.
The breakdown of deferred income in the fiscal year ended February 28, 2022 is ¥408 million in government grants.

25. Equity and Other Equity Items(1) Capital and share premium
Changes in the number of authorized shares, number of issued shares, and the balances of capital, etc. are
as follows:

As of March 1, 2020
Changes during the period
As of February 28, 2021
Changes during the period
As of February 28, 2022
Note:

Number of
authorized shares(Shares)Number of issued
shares (Shares)

Capital(Millions of yen)

Share premium(Millions of yen)

1,000,000,000

270,565,764

31,974

189,340

–

–

–

(797)

1,000,000,000

270,565,764

31,974

188,542

–

–

–

351

1,000,000,000

270,565,764

31,974

188,894

All shares issued by the Company are ordinary shares with no restrictions and no par value. Issued shares are fully paid.

(2) Treasury shares
Changes in the number and balance of treasury shares are as follows:
Number of shares (Shares)
As of March 1, 2020

Amount (Millions of yen)

8,862,367(14,974)

Changes during the period(87,087)144

As of February 28, 2021

8,775,280(14,830)

Changes during the period(18,325)50

As of February 28, 2022

8,756,955(14,780)

Note:

Treasury shares include shares of the Company owned by the officer remuneration BIP trust.

- 178 -

(3) Nature and purposes of share premium and retained earnings
1) Share premium
It is stipulated in the Companies Act of Japan (“Companies Act”), that at least 50% of the payment ofcertain issues of common shares shall be credited to capital. The remainder of the payment shall becredited to legal capital surplus included in share premium. In addition, the Companies Act permits,upon approval of the shareholders meeting, the transfer of amounts from legal capital surplus tocapital.
2) Retained earnings
Under the Companies Act, 10% of the amount paid as dividends from surplus shall be reserved aslegal capital surplus (an item of share premium) or legal retained earnings (an item of retained
earnings), until the total amount of legal capital surplus and legal retained earnings reaches 25% ofcapital. The legal retained earnings may be used to eliminate or reduce a deficit, or may be reversedby resolution of the shareholders meeting.
(4) Nature and purposes of other components of equity
Exchange differences on translation of foreign operations
Exchange differences on translation of foreign operations represent the translation differences that
occurred when consolidating financial statements denominated in a foreign currency for companies
including foreign subsidiaries.
Cash flow hedges
The Group uses derivatives to hedge the risk of fluctuations in future cash flows. Cash flow hedges
represent the effective portion of changes in fair value of derivative transactions designated as cash flow
hedges.
Financial assets measured through other comprehensive income
Financial assets measured at fair value through other comprehensive income represent the changes in fairvalue of financial assets measured at fair value through other comprehensive income.
Remeasurements of defined benefit plans
Remeasurements of defined benefit plans are the effect of difference between actuarial assumptions as at
the beginning of the period and actual results in defined benefit plans and the effect of changes in actuarial
assumptions. They are recognized in other comprehensive income when incurred and immediatelytransferred from other components of equity to retained earnings.
26. Dividends(1) Dividends paid
Fiscal year ended February 28, 2021
Resolution
Board ofDirectors meeting
held on April 10,
2020
Board ofDirectors meeting
held on October
13, 2020
Note:

Class of shares

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Ordinary shares

4,751

Ordinary shares

2,375

Record date

Effective date18.00

February 29, 2020

May 8, 2020

9.00

August 31, 2020

November 11,
2020

Total amount of dividends resolved at the Board of Directors meeting held on April 10, 2020 includes ¥40 million of dividends paid on the
Company’s shares held by the officer remuneration BIP trust.
Total amount of dividends resolved at the Board of Directors meeting held on October 13, 2020 includes ¥19 million of dividends paid on
the Company’s shares held by the officer remuneration BIP trust.

- 179 -

Fiscal year ended February 28, 2022
Resolution
Board ofDirectors meeting
held on April 13,
2021
Board ofDirectors meeting
held on October
12, 2021
Note:

Class of shares

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Ordinary shares

4,751

Ordinary shares

3,700

Record date

Effective date18.00

February 28, 2021

May 7, 2021

14.00

August 31, 2021

November 11,
2021

Total amount of dividends resolved at the Board of Directors meeting held on April 13, 2021 includes ¥39 million of dividends paid to theCompany’s shares held by an officer remuneration BIP trust.
Total amount of dividends resolved at the Board of Directors meeting held on October 12, 2021 includes ¥34 million of dividends paid on
the Company’s shares held by the officer remuneration BIP trust.

(2) Dividends whose effective date belongs to the following fiscal year
Fiscal year ended February 28, 2021
Resolution

Class of shares

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Board ofDirectors meeting
held on April 13,
2021

Ordinary shares

4,751

18.00

Note:

Record date

Effective dateFebruary 28, 2021

May 7, 2021

Total amount of dividends resolved at the Board of Directors meeting held on April 13, 2021 includes ¥39 million of dividends paid to theCompany’s shares held by an officer remuneration BIP trust.

Fiscal year ended February 28, 2022
Resolution

Class of shares

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Board ofDirectors meeting
held on April 12,
2022

Ordinary shares

3,964

15.00

Note:

Record date

Effective dateFebruary 28, 2022

May 6, 2022

Total amount of dividends resolved at the Board of Directors meeting held on April 12, 2022 includes ¥37 million of dividends paid on the
Company’s shares held by the officer remuneration BIP trust.

27. Sales Revenue(1) Disaggregation of revenue
In accordance with IFRS 8 Operating Segments, the Group reports information about its four segments,
namely “Department Store Business,” “SC Business,” “Developer Business” and “Payment and FinanceBusiness.” These reportable segments are periodically examined by the Board of Directors for the purposeof deciding the allocation of management resources and assessing business results. Furthermore, the“Other” category is an operating segment not included as a reportable segment. It includes wholesaling,
parking, leasing, etc.
The Group considers that the categories of these reportable segments can be used to meet the objective forthe disaggregation disclosure requirement in paragraph 114 of IFRS 15. The following table shows thedisaggregation of revenue in accordance with the above categories and includes the reconciliation
representing how disaggregated revenue relates to each segment.
Revenue arising from these businesses is mainly recorded in accordance with contracts with customers,
and the amount of sales revenue related to variable consideration, etc. is immaterial. In addition, theamount of promised consideration does not include any significant financing.
In addition, sales revenue in the fiscal year ended February 28, 2021 was prepared based on the reportablesegment classifications after the change, and sales of the Corporate Sales Division and revenue
attributable to the head office, which had been included in the relevant stores in the Department StoreBusiness, prepared as other stores, etc. were disclosed.

- 180 -

Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Millions of yen

Millions of yen

Osaka Shinsaibashi store

16,285

19,158Osaka Umeda store

14,298

14,840Tokyo store

12,65014,721

Kyoto store

14,43915,440

Segment

Daimaru

Kobe store

18,645

21,233

Sapporo store

13,084

14,708

Matsuzakaya
Nagoya store

30,14834,150

Ueno store

6,837

7,529

Other stores, etc.

47,441

48,956

Elimination of inter-segment revenue

(645)

(431)

173,185

190,307PARCO

43,85249,358Other

11,596

3,198

(571)

(971)

Department Store BusinessElimination of inter-segment revenue
SC Business

54,87751,585

PARCO

7,736

8,130

PARCO SPACE SYSTEMS

17,71818,150J. Front Design & Construction

27,32523,645

Other
Elimination of inter-segment revenue
Developer Business

42,511

40,698

9,035

11,037

Elimination of inter-segment revenue(3,083)(3,764)

5,952

7,273

Other

62,55961,755

Elimination of inter-segment revenue(20,007)(20,135)

42,552

41,619319,079

331,484

267,861

274,803

Other
Total
Revenue from contracts with customers
Revenue arising from other sources
Sales revenue

1)706(9,935)

Payment and Finance Business
Payment and FinanceBusiness

Note:

1,044
(11,314)51,21756,680319,079

331,484

The “Department Store Business,” “SC Business” and “Developer Business” categories include lease revenue based on IFRS
16, and the “Payment and Finance Business” category includes interest revenue based on IFRS 9. Lease revenue and interest
revenue are included in “Revenue arising from other sources.” The “Other” category is a business segment not included inreportable segments. It includes wholesaling, parking, leasing, etc.

Department Store Business
The Department Store Business carries out the sale of clothing, general goods, household goods, foodproducts and others. With regard to these sales of goods, since performance obligations are deemed to besatisfied at the time when goods are delivered to customers, the Group recognizes revenue at the time ofdelivery of such goods. Payments for goods are principally received at the time of delivery of the goods,
which is the time when the performance obligation is satisfied.
This business was greatly affected by shortened operating hours of stores, voluntary business restrictions
and other factors due to the spread of COVID-19, thus resulting in a significant decline in sales revenue
compared to before the spread of COVID-19 in both the previous fiscal year and the current fiscal year.

- 181 -

2)

SC Business
The SC Business undertakes development, management, supervision and operation, etc. of shopping
centers as well as sale of personal belongings, general goods and others.
With regard to services, because these services are provided on a continuous basis and thus it isdetermined that performance obligation is satisfied over a certain period of time, revenue is recognized as
the services are rendered.
With regard to the sale of accessories, general goods and others, since it is usually determined that
performance obligation is satisfied at the time when goods are delivered to customers, revenue isrecognized at the time of delivery of such goods. Payments for goods are received at the time of deliveryof the goods, which is the time when performance obligation is satisfied.
Revenue from lease of shopping centers and others is recognized over the lease term, in accordance withIFRS 16.
This business was greatly affected by temporary closures and shortened operating hours of PARCO stores,
temporary closures of entertainment facilities, and other factors due to the spread of COVID-19, thus
resulting in a significant decline in sales revenue compared to before the spread of COVID-19 in both theprevious fiscal year and the current fiscal year.

3)

Developer Business
The Developer Business carries out development, management, operation, interior decorating work, etc.
of real estate.
Revenue from lease of real estate and others is recognized over the lease term, in accordance with IFRS
16.
With regard to the design and operation of interior decorating work, if the outcome of a work contract canbe estimated reliably, revenue is recognized according to the stage of completion of the performanceobligation. If the outcome of a work contract cannot be estimated reliably, revenue is recognized only tothe extent that it is probable that the contract costs incurred will be recoverable.

4)

Payment and Finance Business
The Payment and Finance Business undertakes issuance and administration, etc. of credit cards.
In the Payment and Finance Business, annual membership fees from cardholders, and fees fromdepartment stores and external affiliated stores are recognized as revenue. With regard to interest on
installment sales, the Group multiplies the revolving balance and number of installment payments by theirrespective set interest rates to calculate interest revenue, and recognizes the interest in the period to which
it is attributable, in accordance with IFRS 9.

5)

Other
Within other, for sales of products and merchandise such as electronic components, automobile
components, industrial supplies, and liquor within the wholesale business, the Group deems that in mostcases the customer acquires control of the products when they are delivered and its performanceobligations are satisfied. Therefore, usually revenue is recognized for the goods upon their delivery.

(2) Balance of contracts
Balance of contracts of the Group is as follows:
Fiscal year ended February 28, 2021
As of March 1, 2020
Receivables from contracts with customers(Millions of yen)
As of February 28, 2021

105,283

87,602Contract assets

6,494

3,280

Contract liabilities

35,41142,935- 182 -

Fiscal year ended February 28, 2022
As of March 1, 2021

(Millions of yen)
As of February 28, 2022

Receivables from contracts with customers

87,60285,715Contract assets

3,280

3,193

Contract liabilities

42,93539,739Notes: 1.

Receivables from contracts with customers
Receivables from contracts with customers primarily consist of receivables in association with the use of credit
cards issued by the Group, and the amount includes the amount collected on behalf of third parties as agent

2.

transactions. The collection period of these receivables is mainly within one to two months.
Contract assets
Contract assets are related to rights to considerations arising when the Group is to receive payments from
customers in line with a series of performances, and are recognized mainly in association with contracted work
agreements. For the completed part of work, the Group recognizes contract assets in advance, and they aretransferred to trade receivables at the time when the customer conducts acceptance inspection and the invoice issent.
Contract assets are included in trade and other receivables in the consolidated statement of financial position.

3.

Contract liabilities
Contract liabilities are related to consideration received prior to performance under contracts and transferred torevenue at the time when the Group performs obligations under contracts.
Contract liabilities are included in other current liabilities in the consolidated statement of financial position.

Of contract liabilities at the end of the previous period, the amount recognized in revenue in the fiscal year
ended February 28, 2022 was ¥21,112 million.
The decrease in contract liabilities in the fiscal year ended February 28, 2022 is mainly due to a decline
because of completion of contracted work exceeding an increase as a result of a rise in annual
membership fees for cards.
Regarding performance obligations satisfied or partially satisfied in prior periods, no amount wasrecognized in sales revenue in the fiscal years ended February 28, 2021 and February 28, 2022.
(3) Transaction price allocated to the remaining performance obligations
With regard to transaction price allocated to the remaining performance obligations, the Group willrecognize revenue in accordance with progress toward completion of construction work, the actual use ofgift certificates and points, and performance of services from membership fees. The total amount oftransaction price allocated to the remaining performance obligations and the timing when revenue is
expected to be recognized are as follows:
As of February 28, 2021
Due within one year
Due after one year through two years
Due after two years
Total- 183 -

(Millions of yen)
As of February 28, 2022

31,7704,175
5,184

30,103
11,4199,207

41,13050,72928. Other Operating Income
The breakdown of other operating income is as follows:
Fiscal year ended
February 28, 2021
Gain on sales of shares of subsidiaries
Gain on sales of non-current assets
Subsidies for employment adjustment
Other subsidies
Compensation income
Other
Total
Notes:(Millions of yen)
Fiscal year ended
February 28, 2022

–
0
2,574
–
5
3,131

3,951
2,666
399
1,012
–
3,038

5,711

11,068

1. Gain on sales of shares of subsidiaries for the fiscal year ended February 28, 2022, is a gain on the transfer of
90% of the shares of Dimples’ Co., Ltd. to WORLD HOLDINGS CO., LTD. Gain on valuation at the time of
measuring the remaining portion of 10% at fair value was ¥411 million and recognized as gain on sales of sharesof subsidiaries.
2. Gain on sales of non-current assets for the fiscal year ended February 28, 2022, is mainly a gain on sales due tothe sale of real estate holdings in the Developer Business.
3. The Company was eligible for subsidies for employment adjustment and other special measures due to the impact
of COVID-19.

29. Cost of Sales
The breakdown of cost of sales is as follows:
Fiscal year ended
February 28, 2021
Cost of goods sold
Personnel expense
Depreciation expense
Other
Total

(Millions of yen)
Fiscal year ended
February 28, 2022

143,158
12,713
19,737
9,101

137,226
14,552
21,965
9,899

184,711

183,642

30. Selling, General and Administrative Expense
The breakdown of selling, general and administrative expense is as follows:
Fiscal year ended
February 28, 2021
Personnel expense
Depreciation and amortization expense
Advertising expense
Operational costs
Other
Total

(Millions of yen)
Fiscal year ended
February 28, 2022

48,627
25,1357,996
6,117
44,12449,94425,971
9,189
6,677
44,340132,001

136,123(Changes in presentation)“Rent expense,” which was presented as a major expense item in the fiscal year ended February 28, 2021,
has been reclassified as “Other” due to its immateriality. The amount for the fiscal year ended February
28, 2021, and the fiscal year ended February 28, 2022, is ¥2,105 million and ¥997 million, respectively.

- 184 -

31. Other Operating Expense
The breakdown of other operating expense is as follows:
Fiscal year ended
February 28, 2021
Loss on sales of shares of subsidiaries
Loss on disposals of non-current assets
Impairment loss
Costs associated with temporary closures
Structural reform costs
Loss on business liquidation
Other
Total
Notes:

1.
2.

3.

(Millions of yen)
Fiscal year ended
February 28, 2022–
1,260
13,196
11,473
–
4,663
1,748

1,818
1,726
1,136
3,146
3,802
–
1,775

32,343

13,406

Loss on sales of shares of subsidiaries for the fiscal year ended February 28, 2022, was a loss on sale related to thetransfer of all shares of NEUVE A Co., Ltd. to Libra Invesco Co., Ltd.
Costs associated with suspension of store operations are mainly fixed costs (depreciation and amortization,
personnel expenses, etc.) incurred by Daimaru Matsuzakaya Department Stores Co. Ltd. and PARCO Co., Ltd.
during the suspension of operations of stores, etc. that closed due to the impact of the spread of COVID-19.
Structural reform costs in the fiscal year ended February 28, 2022, are mainly extra retirement payments due to the
expanded voluntary early retirement program for Daimaru Matsuzakaya Department Stores Co. Ltd. and The
Hakata Daimaru, Inc.

32. Finance Income and Finance Costs
The breakdown of finance income is as follows:(Millions of yen)
Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Interest income
Financial assets measured at amortized cost

759

1,127

203

208

962

1,335

Dividend income
Equity financial assets measured at fair value
through other comprehensive income
Total

The breakdown of finance costs is as follows:(Millions of yen)
Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Interest expense
Financial liabilities measured at amortized
cost

1,135

1,205

Interest expenses related to lease liabilities

4,445

4,009

505

676

6,086

5,890

Other
Total

- 185 -

33. Other Comprehensive Income
The amount arising during the period and reclassification adjustments to profit or loss for each item of othercomprehensive income and tax effect are as follows:(Millions of yen)
Fiscal year ended

Fiscal year ended

February 28, 2021

February 28, 2022

Financial assets measured at fair value through othercomprehensive income
Amount arising during the period(2,564)

461

457

(515)

(2,106)(52)

Amount arising during the period
Tax effect

1,520
(412)

2,349
(716)

Remeasurements of defined benefit plans
Share of other comprehensive income of entities accounted for

1,107

1,632

(143)

208

49

(72)

(94)

136

(1,093)

1,716

Cash flow hedges
Amount arising during the period

19

(20)

Reclassification adjustments
Before tax effect

–
19

–
(20)

Tax effectCash flow hedges

(6)
13

6
(13)

Amount arising during the period
Reclassification adjustments

(26)
–

151
–

Before tax effectTax effect

(26)
(0)

151
–

Exchange differences on translation of foreign operations

(26)

151

using equity method
Amount arising during the period

3(0)Reclassification adjustments
Before tax effect

–
3

–
(0)

Tax effect
Share of other comprehensive income of entities accounted

(0)

(0)

3

(0)

(9)

136

(1,102)

1,853

Tax effectFinancial assets measured at fair value through othercomprehensive income
Remeasurements of defined benefit plans

using equity method
Amount arising during the period
Tax effect
Share of other comprehensive income of entities accounted
for using equity method
Total items that will not be reclassified to profit or loss
Items that may be reclassified to profit or loss

Exchange differences on translation of foreign operations

Share of other comprehensive income of entities accounted forfor using equity method
Total items that may be reclassified to profit or loss
Total other comprehensive income- 186 -

34. Earnings Per Share
Fiscal year ended
February 28, 2021
Profit (loss) attributable to owners of parent (Millionsof yen)Fiscal year ended
February 28, 2022

(26,193)

4,321

–

–

(26,193)

4,321

261,842,400

261,863,266–

66,841

261,842,400

261,930,107

Basic earnings (loss) per share (Yen)(100.03)

16.50

Diluted earnings (loss) per share (Yen)(100.03)

16.50

Adjustment to profit
Profit (loss) used to calculate diluted earnings per share(Millions of yen)
Average number of ordinary shares during the period(Shares)
Increase in the number of ordinary shares:
Officer remuneration BIP trust (Shares)
Average number of diluted ordinary shares during theperiod (Shares)

Notes:

1.

2.

The calculation of basic earnings (loss) per share and diluted earnings per share excludes the number of the Company’s
shares owned by the officer remuneration BIP trust from the average number of ordinary shares during the period
because such shares are treated as the Company’s treasury shares.
Diluted loss per share for the fiscal year ended February 28, 2021 is equal to basic loss per share because there are no
potential shares that have dilutive effects.

35. Share-Based Payment(1) Share-based payment plan1) Details of share-based payment plan
The Group has also adopted an officer remuneration BIP (Board Incentive Plan) trust (hereinafter the“BIP Trust”) as a performance-linked share-based payment for officers of PARCO Co., Ltd., which
had previously used a Share Distribution Trust, in addition to the Company and Daimaru Matsuzakaya
Department Stores Co. Ltd., from June 2021. The BIP Trust, which is similar to performance shareplans and restricted stock plans in the U.S. and Europe, is a system of granting the Company’s shares
to officers (in certain cases, the Company’s shares are converted into cash within the trust and cash in
the amount equivalent to their conversion value is paid) in accordance with the officers’ rank and levelof achievement of the Medium-term Business Plan, etc.
2) Number of points granted during the period and weighted average fair value of the points
In the assessment of fair value, a calculation is made based on the market price of shares adjusted
after taking into account expected dividends. The number of points granted during the period andweighted average fair value of the points are as follows:
Fiscal year ended February 28, 2021
BIP Trust
Short-term PS
Number of points granted during
the period
Weighted average fair value (Yen)

Medium- to long-term
PS

Share Distribution
Trust

RS

37,560126,490

33,491

59,981

1,483

1,475

1,475

1,850

- 187 -

Fiscal year ended February 28, 2022
(Former plan)
BIP Trust
Medium- to long-term

Short-term PS

Share Distribution
Trust

RS

PS

Number of points granted during
the period–

41,00533,491

11,772

Weighted average fair value (Yen)

–

1,475

1,475

1,850

(New plan)
BIP Trust
Short-term PS

Medium- to long-term PS

RS

Number of points granted during
the period

84,857

138,857

23,079Weighted average fair value (Yen)

989

922

922

Notes:1.

2.
3.

PS (Performance Share) is a share-based payment plan under which shares are granted when a predetermined
performance target for a certain period is achieved. The Company’s shares are granted to officers according to the levelof annual achievement in performance each year for short-term PS and according to the level of achievement of theMedium-term Business Plan after the completion of the Medium-term Business Plan for medium- to long-term PS.
RS (Restricted Stock) is a share-based payment plan under which shares that have restrictions on transfer for a certain
period are granted at the time of retirement in accordance with rank.
The Share Distribution Trust is a system of distributing shares at the time of retirement and paying the amount of cash
equivalent to their conversion value.

(2) Share-based payment expense
The amounts recognized as share-based payment expense, which were included in the consolidated
statement of income, were ¥(537) million in the fiscal year ended February 28, 2021 and ¥455 million in
the fiscal year ended February 28, 2022.
36. Financial Instruments(1) Capital management
The Group works to increase productivity and managerial efficiency as a group and conducts capitalmanagement with the aim of achieving sustained improvement in corporate value.
One of the major indicators monitored in the Group’s capital management is the D/E ratio, andmanagement uses this for monitoring and confirmation. Furthermore, the Group is not subject to any
material capital regulations.
D/E ratio is as follows:(Millions of yen)
As of February 28, 2021

As of February 28, 2022

Interest-bearing debt

562,815502,109

Equity attributable to owners of parent

352,171

350,368

1.60

1.43

D/E ratio (%)(2) Financial risk management policy
In the course of its business activities, the Group is exposed to financial risks (credit risk, liquidity risk,
foreign currency risk, and interest rate risk), and engages in risk management to reduce these financial
risks.
The Group uses derivative transactions to avoid foreign currency fluctuation risk or interest rate
fluctuation risk and, in accordance with its policy, does not carry out any speculative transactions.

- 188 -

1) Credit risk management
Credit risk is the risk that a business partner will default on contractual obligations and cause theGroup to incur a financial loss.
To address this risk, each Group company carries out due date management and balance management
for each business partner and seeks early identification and mitigation of collectability concerns.
The Group’s receivables are from a number of business partners in a wide range of industries andregions.
The Group does not have credit risks overly concentrated in a single counterparty or a group to which
the counterparty belongs.
The maximum exposure to credit risk on financial assets is the carrying amount after impairment
presented in consolidated financial statements. The Group does not hold any properties as collateral orother credit enhancements in regard to exposure to these credit risks.
The Group considers whether or not there has been a significant increase in credit risk from the dateof initial recognition, and establishes an allowance for credit losses. Specifically, when there is no
significant increase in credit risk since initial recognition, expected credit losses for 12 months aremeasured as allowance for credit losses.
On the other hand, when there is a significant increase in credit risk since initial recognition, lifetime
expected credit losses are measured as allowance for credit losses. Whether credit risk hassignificantly increased or not is determined based on changes in default risk. Regardless of the above,
for trade receivables, lease receivables, etc. without a significant financing component, allowance for
credit losses is measured at an amount equal to lifetime expected credit losses.
In the measurement of these expected credit losses, reasonable and supportable information that isavailable at the fiscal year end is used for past events, current situations and projection of future
economic conditions such as credit loss experience in past years, status of delinquent receivables andfinancial conditions of creditors. Expected credit losses on financial assets for which credit risk has
not increased significantly and trade receivables, etc. without a significant financing component are
set altogether as a group and collectively assessed based on historical credit losses because they havelargely homogeneous credit risk characteristics.
Expected credit losses on financial assets for which credit risk has increased significantly and creditimpaired financial assets are individually assessed, taking into account historical credit loss
experience, future estimated collectible amount and others.
If a debtor does not make a payment within 90 days after the due date, the situation is considered as
default.
When financial assets are assessed as fully or partially uncollectible and the Group determines, as aresult of credit research, that it is appropriate to write off the assets, the Group directly writes off thecarrying amount of the credit-impaired financial assets.

- 189 -(i)Changes in allowance for credit losses
The Group considers whether or not there has been a significant increase in credit risk from thedate of initial recognition, and establishes an allowance for credit losses.
Changes in allowance for credit losses are as follows:

12-month
expected credit
lossesLifetime expectedcredit losses(Assessed
collectively)

Lifetime expectedcredit losses(Assessed
individually)(Millions of yen)
Credit-impaired
financial assets(Lifetime expectedcredit losses)

Balance as of March 1, 2020

163

65

2,987

927

Transfer to lifetime expected credit losses

(25)

–

78

(52)

Transfer to credit-impaired financial assets
Transfer to 12-month expected credit losses

(86)
0

–
–

(147)
(0)

233
(0)

Changes due to new arising and collectionof financial assets

78

1

265

266

Financial assets that were derecognized
during the period

–

(5)

–

(1)

Direct write-off
Changes in model/risk variables

(0)
–

–
–

(98)
–

(379)
–

Balance as of February 28, 2021

131

61

3,085

994

Transfer to lifetime expected credit losses
Transfer to credit-impaired financial assets

(32)
(59)

–
–

84
(88)

(52)
147

Transfer to 12-month expected credit losses
Changes due to new arising and collection

0

–

(0)

(0)

76

(21)

240

213

(3)

–

(39)

(3)

of financial assets
Financial assets that were derecognized
during the period
Direct write-off

(0)

–

(92)

(463)

Changes in model/risk variables
Other

–
–

–
(0)

–
(1)

–
(1)

Balance as of February 28, 2022

111

38

3,187

835

(ii) The carrying amounts of financial assets by risk type (before deducting allowance for credit
losses) are as follows:
As of February 28, 2021

As of February 28, 2022

Millions of yen

Millions of yen

Financial assets measured at amortized cost, etc.
(12-month expected credit losses)

121,407

119,123

Trade and other receivables(Lifetime expected credit losses)

60,402

59,166

Financial assets whose credit risk has increased
significantly since initial recognition (Lifetime expectedcredit losses)

4,136

4,526

Credit-impaired financial assets(Lifetime expected credit losses)

1,032

869

2) Liquidity risk management
Liquidity risk is the risk of failure to make payments on the due date when the Group is required tofulfill its payment obligations for financial liabilities due.
The Group manages liquidity risk with methods such as preparing monthly cash flow management- 190 -

plans at all companies, and securing sufficient liquidity on hand through commitment line contracts
and overdraft contracts with its main financing banks.
The balance of financial liabilities (other than lease liabilities, etc.) by payment due date is as follows:(Millions of yen)
Carrying
amountContractual
amountDue within
one year

Due after
one yearthrough
two years

Trade and other payables

121,937

121,937

121,937

–

–

–

–

–

Current borrowings

75,15075,33475,334

–

–

–

–

–

Commercial papers

70,00170,00070,000

–

–

–

–

–

Non-current borrowings

144,960

148,100

498

15,68830,012

12,844

26,76462,292

Bonds

69,81971,091

211

20,187

164

20,144124

30,260

Other financial liabilities

69,44969,44530,211

82

1,094

620

26

37,410Forward exchange

–

–

–

–

–

–

–

–

Interest rate swaps

–

–

–

–

–

–

–

–

Total

551,317555,909298,194

35,95731,27133,60826,915

129,963

As of February 28, 2021

Due after
two years
throughthree years

Due after
three years
throughfour years

Due after
four years
throughfive years

Due after
five years

Non-derivative financial liabilities

Derivative financial liabilities

Notes:

1.
2.

Current borrowings include the current portion of non-current borrowings.
Receivables and liabilities resulting from derivative transactions are presented on a net basis.
(Millions of yen)
Carrying
amountContractual
amountDue within
one year

Due after
one yearthrough
two years

Trade and other payables

116,107

116,107

116,107

–

–

–

–

–

Current borrowings

73,15073,30073,300

–

–

–

–

–

Commercial papers

15,002

15,00015,000

–

–

–

–

–

Non-current borrowings

129,810132,397482

30,012

12,844

26,764

17,662

44,629Bonds

99,752

101,452

20,283260

20,240220

15,20745,241Other financial liabilities

66,657

66,67929,915

1,034

535

–

–

35,193Forward exchange

–

–

–

–

–

–

–

–

Interest rate swaps

–

–

–

–

–

–

–

–

Total

500,480

504,937

255,090

31,30733,62026,98432,870125,064

As of February 28, 2022

Due after
two years
throughthree years

Due after
three years
throughfour years

Due after
four years
throughfive years

Due after
five years

Non-derivative financial liabilities

Derivative financial liabilities

Notes:

1.
2.

Current borrowings include the current portion of non-current borrowings.
Receivables and liabilities resulting from derivative transactions are presented on a net basis.

- 191 -

If funds are temporarily insufficient for the payment of trade payables, etc., the Group procures fundswith the following financing methods. Fund procurement methods and the status of procurement ineach fiscal year were as follows:(Millions of yen)
As of February 28, 2021

As of February 28, 2022

Commitment line
Used

–

–

300,000

200,000

300,000

200,000

Used

40,00040,000

Unused141,030

141,030

181,030

181,030

Used

70,00015,000

Unused30,00085,000100,000

100,000

UnusedTotal
Overdraft limit

Total
Commercial paper issuance limit

Total3) Foreign currency risk management
The Group conducts transactions denominated in foreign currencies and is exposed to the risk offluctuations in exchange rates of foreign currencies against the Japanese yen, but this has immaterial
effect on profit before tax.
4) Interest rate risk management
The Group is exposed to various interest rate fluctuation risks in the course of its business activities.
Particularly, fluctuations in interest rates greatly affect borrowing costs.
To mitigate such interest rate fluctuation risks, the Group hedges the risks by conducting interest rate
swap transactions and other means.
(3) Fair value of financial instruments
1) Calculation method of fair value(Cash and cash equivalents, trade and other receivables, other financial assets (current), trade andother payables, and other financial liabilities (current))
The carrying amount is used as the fair value of these instruments, given that the fair value is almost
the same as the carrying amount, as they are mostly settled in a short period of time.
Derivatives are measured as financial assets or liabilities measured at fair value through profit or loss
based on prices presented by the counterparty financial institutions.
(Other financial assets (non-current), and other financial liabilities (non-current))
The fair value of listed shares is measured based on market prices at the last date of a fiscal year. The
fair value of unlisted shares is measured by discounted future cash flows, valuation model based on
profit and net assets, comparable company analysis method or the like.
Other financial assets or other financial liabilities measured at amortized cost mainly consist of leaseand guarantee deposits paid or lease and guarantee deposits received, and their fair value is measured
at present value calculated by discounting future cash flows at rates such as the current market interest
rate.
- 192 -

(Bonds and borrowings)
Bonds and borrowings are measured by present value obtained by discounting future cash flows at
interest rates that would be charged for a new similar borrowing.
2) Financial instruments measured at amortized cost
The carrying amounts and fair values of financial instruments measured at amortized cost are as
follows.
Financial instruments measured at fair value and financial instruments whose carrying amount closely
approximates fair value are not included in the following table.
As of February 28, 2021

As of February 28, 2022

Carrying amount

Fair value

Carrying amount

Fair value

Millions of yen

Millions of yen

Millions of yen

Millions of yen

63,893

66,96755,74357,86763,893

66,96755,74357,867

Borrowings

220,110220,018

202,960

202,691

Bonds

69,81969,38799,752

99,475

Other financial liabilities (non-current)

39,23739,18936,741

36,686

Total

329,166

328,595

339,454338,853

Financial assets:
Other financial assets (non-current)
Total
Financial liabilities:

3) Fair value measurement
In regard to financial instruments measured at fair value, the fair value amounts measured are
categorized into three levels, from Level 1 to Level 3, in accordance with the observability andmateriality of inputs used in measurement.
Level 1:Market prices for identical assets or liabilities in active markets

Level 2:

Fair value, other than Level 1, that is determined by directly or indirectly using anobservable price

Level 3:

Fair value that is determined using a valuation technique including unobservable inputs

The fair value of financial instruments measured at fair value is as follows.
Any transfer between levels in the fair value hierarchy is recognized on each reporting date. In thefiscal years ended February 28, 2021 and February 28, 2022, there was no transfer between Level 1,
Level 2 and Level 3.

- 193 -

As of February 28, 2021
Financial assets measured at fair value on a recurring basis
Level 1

Level 2

Level 3

Total

Millions ofyenMillions ofyenMillions ofyenMillions of
yen

–

27

–

27

4,427

–

18,54922,9764,427

27

18,54923,004

Derivative financial liabilities

–

–

–

–

Total

–

–

–

–

Assets:Financial assets measured at fair value through profit orloss
Derivative financial assets
Financial assets measured at fair value through othercomprehensive income
Other financial assets (non-current)
Total
Liabilities:
Financial liabilities measured at fair value through profit
or loss

As of February 28, 2022
Financial assets measured at fair value on a recurring basis
Level 1

Level 2

Level 3

Total

Millions ofyenMillions ofyenMillions ofyenMillions of
yen

–

7

–

7

3,334

–

20,89924,2333,334

7

20,89924,241

Derivative financial liabilities

–

–

–

–

Total

–

–

–

–

Assets:Financial assets measured at fair value through profit orloss
Derivative financial assets
Financial assets measured at fair value through othercomprehensive income
Other financial assets (non-current)
Total
Liabilities:
Financial liabilities measured at fair value through profit
or loss- 194 -

4) Changes, from the beginning to the end of the period, in financial instruments whose fair value
measurement is categorized within Level 3
Changes, from the beginning to the end of the period, in financial instruments whose fair value
measurement is categorized within Level 3 are as follows:
Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Millions of yen

Millions of yen

Balance at beginning of period

21,471

18,549Other comprehensive income (Note)(3,022)

1,410

Purchase

100

549

Sale

(0)

(30)

Other

–

420

18,54920,899Balance at end of period
Note:

Gains or losses included in other comprehensive income relate to financial assets measured at fair value through othercomprehensive income as of the reporting date. These gains or losses are included in “financial assets measured at fair value
through other comprehensive income” in the consolidated statement of comprehensive income.

Financial instruments classified as Level 3 principally consist of unlisted shares. Fair value of unlisted
shares is measured by the Group’s department in charge using the latest figures available for eachquarter in accordance with the Group’s accounting policies and others, and reported together with thebasis for changes in fair value to superiors and to management where necessary.
Illiquidity discount that is a significant unobservable input used for the measurement of fair value
classified as Level 3 in the fair value hierarchy is 30% in the calculation.
A significant increase (decrease) in this input will cause a significant decrease (increase) in the fairvalue.
(4) Fair value hierarchy for assets and liabilities that are not measured at fair value but of which fair value has
been disclosed
Fair values of financial instruments measured at amortized cost are as follows.
Financial instruments measured at fair value and financial instruments whose carrying amount closely
approximates fair value are not included in the following tables.
(Millions of yen)
As of February 28, 2021

Level 1

Level 2

Level 3

Total

Assets:Financial assets measured at amortized cost
Other financial assets (non-current)

–

7,931

59,036

66,967–

7,931

59,036

66,967

Borrowings–

220,018–

220,018

Bonds–

69,387–

69,387

Other financial liabilities (non-current)––

39,18939,189–289,406

39,189328,595

Total
Liabilities:
Financial liabilities measured at amortized cost

Total

- 195 -

(Millions of yen)
As of February 28, 2022

Level 1

Level 2

Level 3

Total

Assets:Financial assets measured at amortized cost
Other financial assets (non-current)

–

4,301

53,56657,867–4,301

53,56657,867

Borrowings–

202,691–

202,691

Bonds–

99,475–99,475

Other financial liabilities (non-current)––

36,686

36,686–302,166

36,686

338,853

Total
Liabilities:
Financial liabilities measured at amortized cost

Total(5) Financial assets measured at fair value through other comprehensive income
The Group designates investments in equity instruments held in order to maintain and strengthen business
relationships as financial assets measured at fair value through other comprehensive income in the light of
the holding purpose.
1) Fair value of securities
In regard to investments in equity instruments designated as financial assets measured at fair value
through other comprehensive income, the fair value of the main securities is as follows:
As of February 28, 2021
(Millions of yen)AmountSecurities
Asahi Properties Inc.

4,875

Takenaka Corporation

4,243

Toho Gas Co., Ltd.

1,395

Chunichi Shimbun Co., Ltd.

986

Nagashima Resort Co., Ltd.

697

Nagoya Dome Company, Limited

682

MBS MEDIA HOLDINGS, INC.

638

OSAKA GAS CO., LTD.

591

TOKAI TELEVISION BROADCASTING Co., Ltd.

536

Misonoza Theatrical Corporation504- 196 -

As of February 28, 2022
(Millions of yen)AmountSecurities
Asahi Properties Inc.

5,578

Takenaka Corporation

4,687

Chunichi Shimbun Co., Ltd.

975

Toho Gas Co., Ltd.

685

OSAKA GAS CO., LTD.

654

MBS MEDIA HOLDINGS, INC.

614

Nagoya Dome Company, Limited

601

TOKAI TELEVISION BROADCASTING Co., Ltd.

458

Misonoza Theatrical Corporation

427

Japan Installment Deposit Guarantee Co., Ltd.

4202) Dividend income(Millions of yen)
Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Investments derecognized during theperiod20Investments held at end of period

200

207

203

208

Total

3) Financial assets measured at fair value through other comprehensive income derecognized during theperiodThe Group sells financial assets measured at fair value through other comprehensive income for the
purpose of periodic portfolio revisions, management of risk assets and others. The fair value on thedate of sale thereof and cumulative gain or loss on the sale (before tax) are as follows:(Millions of yen)
Fiscal year ended
February 28, 2021

Fiscal year ended
February 28, 2022

Fair value on the date of sale

77

183

Cumulative gain (loss) on sale1954) Transfer to retained earnings
The Group transfers cumulative gain or loss caused by fluctuations in the fair value of financial assets
measured at fair value through other comprehensive income to retained earnings when the asset isderecognized. In the fiscal years ended February 28, 2021 and February 28, 2022, cumulative gain orloss (after tax) in other comprehensive income transferred to retained earnings were ¥(53) million and¥86 million, respectively.
(6) Derivatives and hedges
1) Cash flow hedges
Cash flow hedges are hedges to avoid the risk of fluctuations in future cash flows. The Company
utilizes forward exchange contracts to hedge fluctuations in cash flows for forecast transactions, andinterest rate swaps and currency swaps to hedge fluctuations in cash flows related to floating-rateborrowings. Changes in fair value of derivative transactions designated as cash flow hedges arerecognized as other comprehensive income, included in other components of equity, and transferred to
profit (loss) when the hedged item is recognized as profit (loss).
The details of hedging instruments designated as cash flow hedges are as follows:- 197 -

As of February 28, 2021

Foreign currency
risk
Forward exchange
contracts

With term
exceeding
one year

AssetsLiabilities

Millionsof yenMillions ofyenMillions ofyenMillions of
yen

2,163

–

27

–

Other financial assets

–

–

–

–

–

Other financial
liabilities–

Carrying amountLine item in the
consolidated statement offinancial position

Changes in fair value used
to calculate the ineffective
portion of the hedge

Contract
value

Millions of yen

Interest rate risk
Interest rate swaps

As of February 28, 2022

Foreign currency
risk
Forward exchange
contracts

Line item in the
consolidated statement offinancial position

Changes in fair value used
to calculate the ineffective
portion of the hedge

ContractvalueWith term
exceeding
one year

AssetsLiabilities

Millionsof yenMillions ofyenMillions ofyenMillions of
yen

1,871

–

7

–

Other financial assets

–

–

–

–

–

Other financial
liabilities–

Carrying amountMillions of yen

Interest rate risk
Interest rate swaps(7) Transfer of financial assets
The Group securitizes certain trade receivables through the transfer of shares. However, some of suchsecuritized receivables impose an obligation to pay on the Group retrospectively if the debtor does notmake a payment. Since these securitized receivables do not meet requirements for derecognition offinancial assets, they are not derecognized.
As of February 28, 2021 and February 28, 2022, such transferred assets were recorded in “trade and otherreceivables” and the amount of money received arising at the time when the assets were transferred as
related liabilities was recorded in “bonds and borrowings,” at ¥18,000 million in the fiscal year ended
February 28, 2021 and ¥18,000 million in the fiscal year ended February 28, 2022.

- 198 -

37. Subsidiaries
Status of subsidiaries is as follows:
Equity ratio (%)
Name

Location

Daimaru Matsuzakaya Department Stores Co. Ltd.

Japan

The Hakata Daimaru, Inc.

Japan

Kochi Daimaru Co., Ltd.

Japan

PARCO Co., Ltd.

Japan

PARCO (SINGAPORE) PTE LTD

Singapore

Reportable segment

Department Store

As of
February 28,

As ofFebruary 28,

2021

2022

100.0

100.0

Department StoreBusiness

69.9

69.9

Department StoreBusiness

100.0

100.0

100.0

100.0

100.0

100.0

Business

SC Business
Developer Business
SC Business

PARCO SPACE SYSTEMS Co., Ltd.

Japan

Developer Business

100.0

100.0

J. Front Design & Construction Co., Ltd.

Japan

Developer Business

100.0

100.0

PARCO Digital Marketing Co., Ltd.

Japan

Developer Business

100.0

100.0

JAPAN RETAIL ADVISORS Co., Ltd.

Japan

Developer Business

100.0

100.0

100.0

100.0

Payment andJFR Card Co., Ltd.

Japan

Daimaru Kogyo, Ltd.

Japan

Other (Wholesale)

100.0

100.0

China

Other (Wholesale)

100.0

100.0

Daimaru Kogyo International Trading (Shanghai)Co., Ltd.

Finance Business

Daimaru Kogyo (Thailand) Co., Ltd.

Thailand

Other (Wholesale)

99.9

99.9

Taiwan Daimaru Kogyo, Ltd.

TaiwanOther (Wholesale)

100.0

100.0

Japan

Other (Merchandise
test and quality

100.0

100.0

50.2

50.2

100.0

100.0

100.0

100.0

100.0

100.0

Consumer Product End-Use Research Institute Co.,Ltd.
Angel Park Co., Ltd.

control)Japan

Other (Parking)Other

JFR Service Co. Ltd.

Japan

(Commissioned
back-officeservice/parking andleasing)

JFR Information Center Co., Ltd.

Japan

Daimaru Matsuzakaya Tomonokai Co., Ltd.

Japan

Other (Information
service)
Other (Specified- 199 -

prepaid transaction
service)38. Related Parties(1) Transactions with related parties
Notes related to transactions with related parties (excluding those eliminated in the consolidated financial
statements) have been omitted because there were no significant transactions, etc.
(2) Remuneration for key management personnel
Description of the remuneration for Directors and other key management personnel of the Group is asfollows:(Millions of yen)
Fiscal year ended
February 28, 2021
Officer remuneration

Fiscal year ended
February 28, 2022
1,685

1,675

Retirement benefit

1

1

Share-based payment

(537)

455

1,149

2,132

Total

39. Commitments
Commitments related to expenditures after the reporting date are as follows:(Millions of yen)
As of February 28, 2021
Purchase of property, plant and equipment

As of February 28, 2022
1,987

193

Purchase of intangible assets

3

219

Purchase of investment property

–

3,082

1,990

3,495

Total

40. Contingent Liabilities
Amount of guarantee obligations
The Group has provided guarantee for transactions, etc. between its employees and financial institutions asfollows:(Millions of yen)
As of February 28, 2021
Debt guarantees for employees
Total

As of February 28, 2022
2

1

2

1

41. Subsequent Events
No items to report
42. Approval of Consolidated Financial Statements
These consolidated financial statements were approved by the President and Representative Executive Officer
Tatsuya Yoshimoto on May 27, 2022.

- 200 -

(2) Other
Quarterly financial information, etc. for the current fiscal year
(Cumulative)
Sales revenue (Millions of yen)
Profit (loss) before tax (Millionsof yen)First three months

First six months

First nine months

Current fiscal year

74,097

157,333

237,479

331,484(4,413)(2,871)

2,079

6,190

(3,062)(1,995)

3,669

4,321

(11.70)(7.62)

14.01

16.50

Profit (loss) attributable toowners of parent (Millions ofyen)
Basic earnings (loss) per share(Yen)(Quarterly)
Basic earnings (loss) per share(Yen)First quarter

Second quarter(11.70)4.08- 201 -

Third quarter
21.63

Fourth quarter
2.49

2. Non-consolidated Financial Statements, etc.
(1) Non-consolidated Financial Statements
1) Non-consolidated Balance Sheet(Millions of yen)
As of February 28, 2021

As of February 28, 2022

117,81085,03026,24449,0742,050(340)
145,764

2,152
(370)
135,887

90
21
111

77
16
94

205
205

553
553

1,159
377,358

1,660
377,268

151,000

124,000

–
636
(500)
529,654529,972

1,615
479
(500)
504,524
505,172180
180
675,917247
247
641,307

AssetsCurrent assets
Cash and deposits
Short-term loans receivable from subsidiaries andassociates
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Other
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Long-term loans receivable from subsidiaries andassociates
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Bond issuance costs
Total deferred assets
Total assets- 202 -

(Millions of yen)
As of February 28, 2021

As of February 28, 2022

56,92570,001
–
626
135
106

55,15015,00220,000
616
356
139

23

95

–
1,883
129,701

111
2,393
93,86470,000144,960106
3
1,794
216,864
346,565

80,000129,810413–
1,978
212,201
306,066

31,974

31,974

9,474
239,601
249,075

9,474
239,400
248,874

62,39862,398(14,066)
329,382

68,20068,200(13,816)
335,233(30)(30)
329,351
675,9177
7335,241
641,307

Liabilities
Current liabilities
Short-term borrowings
Commercial papers
Current portion of bonds
Accrued expenses
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for officer remuneration BIP trust
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Provision for officer remuneration BIP trust
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Other retained earnings
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets- 203 -

2)

Non-consolidated Statement of Income(Millions of yen)
Fiscal year ended
February 28, 2021

Operating revenue
Dividend income
Consulting fee income
Total operating revenue
General and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Interest on bonds
Amortization of bond issuance costs
Provision of allowance for doubtful accounts
Commitment fees
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of shares of subsidiaries and associates
Total extraordinary income
Extraordinary losses
Loss on valuation of shares of subsidiaries andassociates
Loss on sale of shares of subsidiaries and associates
Impairment losses
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit*1*1*1, *2

*1
*1

*1

*3

Fiscal year ended
February 28, 2022

9,210
4,602
13,812
4,264
9,547

*1

677
158
90
926

*1

644
223
52
200
415
88
1,624
8,849

*1

–
–

*7

*1

*1, *2*1*3

10,482
5,000
15,482
4,995
10,487
712
44
22
779
672
284
65
30
574
135
1,762
9,505
3,644
3,644

*4

763

–

*5

241
343
1,348
7,500
15
(1)
13
7,487

–
–
–
13,149518(1,622)(1,103)
14,253*6- 204 -

3)

Non-consolidated Statement of Changes in Equity

Fiscal year ended February 28, 2021
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplusOtherretainedearnings
Retainedearnings
brought
forward9,474

239,601

249,075

62,03862,038Dividends of surplus(7,127)(7,127)(7,127)

Profit

7,487

7,487

7,487

Share capital

Balance at beginning of
period31,974

Total
Treasury shares shareholders’
Total retained
equityearnings(14,210)

328,878

Changes during period

Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

(0)

(0)

148

(0)

(0)

360

360

144

504

31,974

9,474

239,601

249,075

62,39862,398(14,066)

329,382(7)(7)

328,871

Dividends of surplus(7,127)

Profit7,487

Balance at end of period

148–

Changes during period

Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
period(4)–

Valuation and translation
adjustments
Valuation
Total
Total net assets
difference on valuation andavailable-fortranslation
sale securities adjustments
Balance at beginning of
period

(4)

(4)
148
(23)

(23)

(23)

(23)

(23)

480

(30)

(30)

329,351- 205 -

Fiscal year ended February 28, 2022
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplusOtherretainedearnings
Retainedearnings
brought
forward9,474

239,601

249,075

62,39862,398Dividends of surplus(8,452)(8,452)(8,452)

Profit14,253

14,253

14,253

Share capital

Balance at beginning of
period31,974

Total retained
earnings

Total
Treasury shares shareholders’equity(14,066)

329,382

Changes during period

Purchase of treasury
shares
Disposal of treasury
shares
Disposal of treasury
shares for share
distribution trust
Purchase of treasury
shares by share
distribution trust
Net changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

(0)

82

82

(200)

(200)

583

383

(383)

(383)

–

–

(200)

(200)

5,801

5,801

250

5,851

31,974

9,474

239,400

248,874

68,20068,200(13,816)

335,233

(30)

(30)

329,351

Changes during period
Dividends of surplus(8,452)

Profit14,253Purchase of treasury
shares
Disposal of treasury
shares
Disposal of treasury
shares for share
distribution trust
Purchase of treasury
shares by share
distribution trust
Net changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

(32)

(0)

Valuation and translation
adjustments
Valuation
Total
Total net assets
difference on valuation andavailable-fortranslation
sale securities adjustments
Balance at beginning of
period

(32)

(32)
82
383
(383)
38

38

38

38

38

5,889

7

7

335,241- 206 -

Notes to Non-consolidated Financial Statements(Notes on premise of going concern)
No items to report.
(Significant accounting policies)
1. Basis and method of valuation of assets(1) Shares of subsidiaries and associates
Stated at cost using the moving-average method(2) Available-for-sale securities
Securities with available fair market values
Stated at fair value based on the market prices at the fiscal year-end (Valuation differences are included in
net assets; cost of securities sold is determined by the moving-average method)
Securities without available fair market values
Stated at cost using the moving-average method
2. Basis and method of valuation of derivatives
Derivatives
Stated at fair value
3. Basis and method of valuation of inventories
Supplies
Stated at cost using the FIFO method (the book value is written down based on the decreased profitability)
4. Depreciation method of non-current assets(1) Property, plant and equipment (excluding leased assets)
Straight-line method(2) Intangible assets (excluding leased assets)
Straight-line method
Internal use software is amortized using the straight-line method over the internally expected useful life (5years).
(3) Leased assets
Leased assets in finance leases that do not transfer ownership are depreciated using the straight-line
method with zero residual value assuming the lease periods as useful lives.
5. Accounting method for deferred assets
Bond issuance costs
Amortized using the straight-line method over the period until redemption
6. Accounting policy for provisions(1) Allowance for doubtful accounts
To prepare for losses from bad debt, an estimated uncollectible amount is provided.
(2) Provision for bonuses
To prepare for the payment of bonuses to employees, the amount expected to be paid is provided.

- 207 -

(3) Provision for bonuses for directors (and other officers)
To prepare for the payment of bonuses to corporate officers, the amount expected to be paid is provided.
(4) Provision for officer remuneration BIP trust
To prepare for the granting of the Company’s shares through an officer remuneration BIP trust, theamount equivalent to the value of shares in proportion to the number of points awarded to officers inaccordance with the Stock Benefit Rules is provided.
7. Hedge accounting method(1) Hedge accounting method
Exceptional treatment is applied to interest rate swaps that satisfy the requirements for exceptional
treatment.
(2) Hedging instruments and hedged items(i) Hedging instruments
Interest rate swaps(ii) Hedged items
Borrowings and interest expenses on borrowings(3) Hedging policy
Based on the risk management policy, hedging is undertaken to hedge interest rate fluctuation risk.
(4) Method for assessing the hedge effectivenessAt the end of each fiscal year, hedge effectiveness with respect to the hedged items and hedging
instruments is assessed for each hedging transaction. This annual assessment excludes any transaction
where important terms and conditions such as principal, interest rate, and duration are identical between
the assets or liabilities of hedged items and hedging instruments.
8. Accounting treatment for consumption taxes
Consumption tax and local consumption tax are accounted for under the tax exclusion method.
Of consumption tax on assets that are not qualified for tax deductions, deferred consumption taxes stipulated
under tax law are recorded in long-term prepaid expenses and amortized on a straight-line basis during a fiveyear period.
(Additional information)(Accounting treatment following adoption of the consolidated taxation system)
Since the Company applied for approval for the consolidated taxation system in the current fiscal year andthe consolidated taxation system is to be applied from the next fiscal year, from the current fiscal year it
has applied accounting treatment assuming the adoption of the consolidated taxation system in accordancewith “Practical Solution on Tentative Treatment of Tax Effect Accounting Under Consolidated Taxation
System (Part 1)” (ASBJ PITF No. 5, January 16, 2015) and “Practical Solution on Tentative Treatment of
Tax Effect Accounting Under Consolidated Taxation System (Part 2)” (ASBJ PITF No. 7, January 16,2015).
Moreover, regarding the transition to the group tax sharing system established in the “Act Partially
Amending the Income Tax Act” (Act No. 8 of 2020) and the items revised in the non-consolidated taxation
system in line with the transition to the group tax sharing system, in accordance with the treatment of
Paragraph 3 of “Practical Solution on the Treatment of Tax Effect Accounting for the Transition from theConsolidated Taxation System to the Group Tax Sharing System” (ASBJ PITF No. 39, March 31, 2020),
the Company has not applied the provision of Paragraph 44 of “Guidance on Accounting Standard for Tax
Effect Accounting” (ASBJ Guidance No. 28, February 16, 2018), and the amounts of its deferred tax assets
and deferred tax liabilities are in accordance with the tax laws prior to revision.
- 208 -

(Significant accounting estimates)
1. Recoverability of deferred tax assets(1) Amounts recorded in financial statements for the current fiscal year
Deferred tax assets ¥1,615 million(2) Other information contributing to understanding the details of accounting estimates
This information is omitted here as it is presented under “4. Significant Accounting Estimates andJudgments” in the notes to consolidated financial statements.
(Changes in presentation)(Adoption of “Accounting Standard for Disclosure of Accounting Estimates”)
The Company has adopted the “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ
Statement No. 31, March 31, 2020) from the current fiscal year, and has presented “Significant accounting
estimates.”
However, in accordance with the transitional treatment set forth in the proviso to paragraph 11 of theaccounting standard, information related to the previous fiscal year is not provided in this note.

- 209 -

(Notes to non-consolidated statement of income)*1. Transactions with subsidiaries and associates(Millions of yen)
Fiscal year ended
February 28, 2021
Operating transactions
Operating revenue
General and administrative expenses
Non-operating transactions

Fiscal year ended
February 28, 2022

13,812591
833

15,482595
700*2. Major components of general and administrative expenses(Millions of yen)
Fiscal year ended
February 28, 2021
Officer remuneration
Employees’ salaries
Provision for bonuses
Provision for bonuses for directors (and other officers)
Retirement benefit expenses
Welfare expenses
Taxes and dues
Depreciation
Rent expenses
Operational costs
Miscellaneous expenses

Fiscal year ended
February 28, 2022

156
871
106
23
63
225
334
103
317
500
1,182

693
905
139
95
61
226
407
34
287
606
565

*3. Provision of allowance for doubtful accounts
Fiscal year ended February 28, 2021
Loans to the subsidiary and associate JFR Kodomo Mirai Co., Ltd. were recognized as provision of allowance for
doubtful accounts.
Fiscal year ended February 28, 2022
Loans to the subsidiary and associate JFR Kodomo Mirai Co., Ltd. were recognized as provision of allowance for
doubtful accounts.
*4. Loss on valuation of shares of subsidiaries and associates
Fiscal year ended February 28, 2021
Loss on valuation was recognized for shares of the subsidiary and associate J. Front Foods Co., Ltd.
*5 Loss on sales of shares of subsidiaries and associates
Fiscal year ended February 28, 2021
Loss on sale was recognized in association with the sale of shares in the subsidiary and associate J. Front Foods
Co., Ltd.
*6 Impairment loss
Fiscal year ended February 28, 2021
Impairment losses pertaining to software were recognized.

- 210 -

*7 Gain on sale of shares of subsidiaries and associates
Fiscal year ended February 28, 2022
Gain on sale was recognized in association with the sale of shares in the subsidiary and associate Dimples’ Co.,
Ltd.
(Notes on securities)
Shares of subsidiaries and associates
As of February 28, 2021
(Millions of yen)
Category

Carrying amount

Fair value

Difference

Shares of subsidiaries

–

–

–

Total

–

–

–

Note:

Shares of subsidiaries and associates whose fair values are deemed to be extremely difficult to determine(Millions of yen)
Category

Carrying amount

Shares of subsidiaries
Shares of associates

367,211
10,147

As of February 28, 2022
(Millions of yen)
Category

Carrying amount

Fair value

Difference

Shares of subsidiaries

–

–

–

Total

–

–

–

Note:

Shares of subsidiaries and associates whose fair values are deemed to be extremely difficult to determine(Millions of yen)
Category
Shares of subsidiaries
Shares of associates

Carrying amount
367,121
10,147- 211 -

(Notes on tax effect accounting)
1. The breakdown of deferred tax assets and liabilities by major cause(Millions of yen)
As of February 28, 2021

As of February 28, 2022

32
5
41
2,250
257
61
32
105
65

42
6
83
1,667
266
61
77
112
69

2,848
(2,848)
–

2,387
(767)
1,620

(3)
–

(1)
(3)

Total deferred tax liabilities

(3)

(4)

Net amount of deferred tax assets

(3)

1,615

Deferred tax assets
Provision for bonuses
Accrued insurance expenses
Accrued enterprise tax
Tax loss carryforwards
Allowance for doubtful accounts for subsidiaries and associates
Loss on valuation of shares of subsidiaries and associates
Provision for officer remuneration BIP trust
Loss on impairment of non-current assets
Other
Subtotal deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Asset retirement obligations
Valuation difference on available-for-sale securities

2. Reconciliation of significant difference between effective statutory tax rate and effective income tax rate after
application of tax effect accounting(Millions of yen)
As of February 28, 2021
Effective statutory tax rate(%)
(Adjustments)
Permanent non-taxable income for tax purposes (e.g. dividend
income)Permanent non-deductible expenses for tax purposes (e.g.
entertainment expenses)
Per capita inhabitant tax
Valuation allowance
Other
Effective income tax rate after application of tax effect accounting(Notes on business combinations)
No items to report.
(Significant subsequent events)
No items to report- 212 -

As of February 28, 2022

30.6

30.6

(37.7)(24.3)

0.0

0.0

0.0
6.6
0.6

0.0
(15.0)
0.3

0.0

(8.3)

4) Annexed detailed schedules[Annexed detailed schedule of property, plant and equipment, etc.](Millions of yen)
Category

Balance at
beginning of
periodIncrease during
the period

Buildings andstructures

90

1

–

13

77

58

Other

21

0

–

5

16

21

Type of assets

Property, plantand equipment

Total
Intangible assets

Software
Total

Decrease during
Amortization Balance at end of
the period
during the period
periodAccumulated
depreciation

111

1

–

19

94

80

205

425

63

14

553

–

205

425

63

14

553

–

[Annexed detailed schedule of provisions](Millions of yen)

Category

Balance at
beginning of
periodAllowance for doubtful accounts

840

60

30

870

Provision for bonuses

106

139

106

139

Provision for bonuses for directors (and otherofficers)

23

95

23

95

Provision for officer remuneration BIP trust

106

528

110

524

Increase during
the period

Decrease during
the period(2) Components of major assets and liabilities
The information has been omitted as the consolidated financial statements are prepared.
(3) Other
No items to report.

- 213 -

Balance at end of
periodVI. Outline of Share-Related Administration of Reporting Company
Fiscal year

From March 1 to the last day of February

Annual Shareholders Meeting

May

Record date

Last day of February

Record dates for dividends of surplus

Last day of February
August 31

Number of shares per share unit

100 shares

Purchase of shares less than one unit
Office for handling business

Shareholder register administrator

Forwarding officeHandling charge for purchase
Method of public noticeSpecial benefits for shareholders(Special account)
1-4-5 Marunouchi, Chiyoda-ku, Tokyo
Mitsubishi UFJ Trust and Banking Corporation
Stock Transfer Agency(Special account)
1-4-5 Marunouchi, Chiyoda-ku, Tokyo
Mitsubishi UFJ Trust and Banking Corporation–
No charge
The public notices of the Company shall be given by electronic means. Provided,
however, in case of unavoidable circumstances such as an accident which preventthe use of the public notice by electronic means, they shall be placed in “TheNikkei” newspaper.
(i)

For shareholders owning at least 100 shares as of the last day of February
and new shareholders owning at least 100 shares as of August 31, the“Daimaru Matsuzakaya shopping courtesy card” which entitles cardholders
to a 10% discount when shopping at marked price at department storesoperated by Daimaru Matsuzakaya Department Stores Co., Ltd. (Daimaru
Shinsaibashi store, Daimaru Umeda store, Daimaru Tokyo store, Daimaru
Kyoto store, Daimaru Kobe store, Daimaru Suma store, Daimaru Ashiya
store, Daimaru Sapporo store, Daimaru Shimonoseki store, Matsuzakaya
Nagoya store, Matsuzakaya Takatsuki store, Matsuzakaya Ueno store,
Matsuzakaya Shizuoka store), The Hakata Daimaru, Inc. (Fukuoka Tenjin
store), and Kochi Daimaru Co., Ltd., will be issued on the following basis.
For shareholders as of the last day of February, the courtesy cards will be
issued in May, with an annual spending limit set according to the number ofshares owned as described below. (Valid from mid-May (the date ofdelivery) until May 31 the following year)
Number of shares owned
as of the end of February

Spending limit
Duration of ownership:
Less than 3 years

Duration of ownership: 3
years or more

100 to 499 shares¥0.5 million per year

¥1.5 million per year

500 to 999 shares¥1.0 million per year

¥2.0 million per year

1,000 to 3,999 shares

Additional ¥1.0 million for Additional ¥1.0 million forevery 1,000 shares
every 1,000 shares

4,000 shares or more

¥5.0 million per year
(upper limit)¥6.0 million per year
(upper limit)

For new shareholders as of August 31, the courtesy cards will be issued in
November, with an annual spending limit according to the number of shares
owned set at half of the above amounts. (Valid from mid-November (the dateof delivery) until May 31 the following year)(ii)

By presenting the “Daimaru Matsuzakaya shopping courtesy card,”
shareholders may gain entry free of charge for themselves and a guest to
cultural events subject to admission fees held at facilities operated by
Daimaru Matsuzakaya Department Stores Co., Ltd. and PARCO CO., LTD.
(gallery spaces in Sapporo, Shibuya, Nagoya, Shinsaibashi, Fukuoka, etc.).
Note: Complementary admission may not apply to all cultural events.

- 214 -

(iii)Note:

The Company will issue the “PARCO shopping courtesy card” (credit card)
upon request from shareholders owning at least 100 shares of the Company
as of the end of February and August 31. The credit card will entitle theholder to a 5% discount (excluding some shops, products, services, etc.) atpoint of purchase for shopping at stores in Japan operated by PARCO Co.,
Ltd. (Sapporo PARCO, Sendai PARCO, Urawa PARCO, Shintokorozawa
PARCO, Tsudanuma PARCO, Shibuya PARCO, Ikebukuro PARCO,
Kinshicho PARCO, Hibarigaoka PARCO, Kichijoji PARCO, Chofu PARCO,
Shizuoka PARCO, Nagoya PARCO, Matsumoto PARCO, Shinsaibashi
PARCO, Hiroshima PARCO, Fukuoka PARCO and PARCO_ya UENO) andvia the PARCO ONLINE STORE e-commerce platform. (Valid from thedate of delivery until May 31 the following year)

The Company stipulates the rights regarding shares less than one unit in its Articles of Incorporation. According to the
stipulation, the holders of shares less than one unit shall not be entitled to exercise the rights of shareholders in connection
with such shares less than one unit other than those rights listed below:(1) Rights set forth in items of Article 189, paragraph (2) of the Companies Act;
(2) Right to make a demand pursuant to the provisions of Article 166, paragraph (1) of the Companies Act;
(3) Right to receive an allotment of offered shares and offered share acquisition rights in proportion to the number ofshares held by the shareholder; and(4) Right to demand the purchase of additional shares less than one unit.

- 215 -

VII. Reference Information of Reporting Company
1. Information about parent company, etc. of reporting company
The Company does not have a parent company, etc. as prescribed in Article 24-7, paragraph (1) of the Financial
Instruments and Exchange Act.
2. Other reference information
From the beginning of this fiscal year until the filing date of this Annual Securities Report, the Company has filed
the following documents.
(1) Annual Securities Report and Attached Documents, and Written Confirmation
Fiscal year

14th fiscal year (from March 1, 2020 to February 28, 2021)

Filed to Director-General of Kanto Local Finance Bureau on May 28, 2021.
(2) Internal Control Report
Filed to Director-General of Kanto Local Finance Bureau on May 28, 2021.
(3) Quarterly Securities Reports and Written ConfirmationsFirst quarter of the 15th fiscal year (from March 1, 2021 to May 31, 2021)
Filed to Director-General of Kanto Local Finance Bureau on July 14, 2021.
Second quarter of the 15th fiscal year (from June 1, 2021 to August 31, 2021)
Filed to Director-General of Kanto Local Finance Bureau on October 14, 2021.
Third quarter of the 15th fiscal year (from September 1, 2021 to November 30, 2021)
Filed to Director-General of Kanto Local Finance Bureau on January 13, 2022.
(4) Extraordinary Securities Reports
Filed to Director-General of Kanto Local Finance Bureau on May 28, 2021.
Extraordinary Securities Report based on Article 19, paragraph (2), item (ix)-2 (Results of Exercise of
Voting Rights at the Shareholders Meeting) of the Cabinet Office Ordinance on Disclosure of Corporate
Affairs, etc.
(5) Shelf Registration Statements (corporate bonds) and Attached Documents
Filed to Director-General of Kanto Local Finance Bureau on March 2, 2022.
(6) Amended Shelf Registration Statements
Filed to Director-General of Kanto Local Finance Bureau on May 28, 2021.
Amended Shelf Registration Statements pertaining to Shelf Registration Statement filed on January 30,
2020.
(7) Securities Registration Statements
Filed to Director-General of Kanto Local Finance Bureau on June 29, 2021.
(8) Amended Securities Registration Statements
Filed to Director-General of Kanto Local Finance Bureau on July 14, 2021.
Amended Securities Registration Statements pertaining to Securities Registration Statements filed on June29, 2021.

- 216 -

B.

Information About Reporting Company’s Guarantor, Etc.

No items to report.

- 217 -

Independent Auditor’s Report

The Board of Directors
J. FRONT RETAILING Co., Ltd.
OpinionWe have audited the accompanying consolidated financial statements of J. FRONT RETAILING
Co., Ltd. and its subsidiaries (the Group), which comprise the consolidated statement of financial
position as at February 28, 2022, and the consolidated statements of income, comprehensive
income, changes in equity, and cash flows for the year then ended, and notes to the consolidated
financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at February 28, 2022, and its
consolidated financial performance and its consolidated cash flows for the year then ended inaccordance with International Financial Reporting Standards (IFRSs).
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Consolidated Financial Statements section of our report. We are independent of
the Group in accordance with the ethical requirements that are relevant to our audit of theconsolidated financial statements in Japan, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significancein our audit of the consolidated financial statements of the current period. These matters wereaddressed in the context of the audit of the consolidated financial statements as a whole, and informing the auditor’s opinion thereon, and we do not provide a separate opinion on these matters.
Valuation of non-financial assets in the Department Store Business and SC Business
Description of Key Audit Matter

Auditor’s Response

As described in “Note 4. Significant Accounting
Estimates and Judgments” in the notes to theconsolidated financial statements, J.FRONTRETAILING Co., Ltd. (“the Company”)
recorded property, plant and equipment of¥237,310 million and ¥240,894 million, rightof-use assets of ¥85,641 million andWe mainly performed the following audit
procedures to consider the valuation of nonfinancial assets in the Department StoreBusines and SC Business.
・ We compared the duration of the expected
future cash flows with the remaining useful
lives of the related assets and other factors.

¥59,784 million, intangible assets of・ For the expected future cash flows, used to¥4,247 million and ¥1,596 million, andestimate the value in use of assets, weinvestment property of ¥113,343 million andconsidered the consistency with business¥1,314 million, in its Department Storeplans approved by management. We also
Business and SC Business, respectively, as ofcompared business plans prepared in priorFebruary 28, 2022. As profitability has declined
years with actual results to evaluate
due to changes in the business environment, thewhether there were deviations in
Department Store Business and SC Businessaccounting estimates and to evaluate thealso recognized impairment losses ofaccuracy of estimates by the Company.
¥113 million and ¥234 million, respectively.
・ For the key assumptions used to determine
The Company operates its Department Storeestimated future cash flows, which are
Business and SC Business as its main
forecastsofconsumerspending
business. As a result of the global spread oftrends, outlook for a recovery in the
COVID-19, the Company has been impacted
demand for inbound tourism, the impact ofby the deterioration in business results due to
COVID-19, and sales growth rates after
the temporary closures of stores and other
implementing business plans,
wefactors. Given these circumstances, theevaluated the key assumptions adopted byCompany determines whether there is an
the Company by holding discussions withindication of impairment by asset or cashmanagement and store managers to gain an
generating unit and conducts impairment tests
understanding of and analyze the key
if there is an indication of impairment.
assumptions, and by making comparisons
During impairment testing, the Company
with past trends and available external
estimates the recoverable amount of the asset
data.
or cash-generating unit by its fair value less・ We considered the consistency between
costs of disposal or its value in use. Since thethe information used to calculate thevalue in use is higher than the fair value lessdiscount rate and external information.
costs of disposal, the recoverable amount ismainly measured at value in use, which isestimated as the discounted present value of
future cash flows generated from the use of theasset and the discounted present value of
future cash flows generated from the ultimate
disposal of the asset. The Company also takes
into consideration factors such as theremaining useful life of the asset to estimate
the duration of future cash flows.
Future cash flows are estimated based on
business plans, key assumptions of which, as
described in “Note 4. Significant Accounting
Estimates and Judgments” in the notes to theconsolidated financial statements, areforecasts of domestic consumer spending
trends, outlook for a recovery in the demandfor inbound tourism, the impact of COVID19, and sales growth rates after implementing
business plans.

The valuation of non-financial assets in the
Department Store Busines and SC Businesshas a potentially large impact on the
consolidated financial statements, and the key
assumptions above used to determine
estimated future cash flows involve
uncertainties, which require judgements bymanagement. Therefore, we determined thevaluation of non-financial assets in the
Department Store Busines and SC Business to
be a key audit matter.
Recoverability of deferred tax assets (“DTAs”)
Description of Key Audit Matter

Auditor’s Response

As disclosed in the consolidated statement offinancial position, the Company recognizeddeferred tax assets (“DTAs”) totaling¥8,209 million as of February 28, 2022. As
described in “Note 18. Income Tax” in thenotes to the consolidated financial
statements, the amount of DTAs before offsets
againstdeferredtax
liabilities
is¥96,727 million, which includes DTAs
associated with tax loss carryforwards totaling¥6,630 million.

We mainly performed the following audit
procedures to consider the recoverability of
DTAs.
・ The DTAs mainly consist of deductible
temporary differences and tax loss
carryforwards belonging to the Company’s
domestic
subsidiaries,
Daimaru
Matsuzakaya Department Stores Co., Ltd.
and PARCO Co., Ltd. Therefore, we
examined whether estimates of taxable
income of Daimaru Matsuzakaya
Department Stores Co., Ltd. and PARCO
Co., Ltd. used in assessing therecoverability of DTAs are based onrevenue plans approved by management inbusiness plans, by comparing the estimateswith business plans.

The key balances of DTAs in the consolidated
statement of financial position primarily relate
to the consolidated tax return group, of which
the Company is the ultimate parent, and are
DTAs related to deductible temporary
differences and tax loss carryforwards of its
domestic subsidiaries, Daimaru Matsuzakaya・ We compared business plans prepared in
Department Stores Co., Ltd. and PARCO
prior years, which were used to estimate
Co., Ltd.
the future taxable income at that time, with
The Company recognizes DTAs to the extent
the actual results and evaluated the degree
that it is probable that taxable profit will beof accuracy of the estimated taxableavailable against which deductible temporary
income.
differences and tax loss carryforwards can be
・ For the key assumptions used to determine
utilized. Taxable income is based primarily on
estimated future taxable income, which are
the sufficiency of taxable income on the basis
forecasts of domestic consumer spendingof the consolidated tax return group, of which
trends, outlook for a recovery in the
the Company is the ultimate parent, whether
demand for inbound tourism, the impact of
there are tax planning opportunities, and the
COVID-19,
sales
revenuethatsufficiency of taxable temporary differences.

incorporates the effect of businessplans, and expected operating income
taking into account the effect of cost
reductions from business restructuring, we
evaluated the key assumptions adopted by
the Company by holding discussions withmanagement to gain a understanding andanalyze the key assumptions in detail, andby comparing the assumptions with pasttrends and available external data.

Estimated taxable income in accordance withprofitability is based on business plans, whose
key assumptions, as described in “Note 4.
Significant Accounting Estimates andJudgments” in the notes to the consolidated
financial statements, are forecasts of domestic
consumer spending trends, outlook for arecovery in the demand for inboundtourism, the impact of COVID-19, sales
revenue that incorporates the effect of business ・ We
consideredassessmentsofplans, and expected operating income taking
uncertainties by management that reflect
into account the effect of cost reductions fromcertain risks in the estimates of futurebusiness restructuring.
taxable income.

The valuation of the recoverability of DTAs is ・ We considered the reversal schedulebased on estimates of future taxable income
relating to the main balances of deductible
conducted by management. The underlying
temporary differences and tax loss
business plans involve uncertainties related tocarryforwards based on the consolidated
the key assumptions and subjective judgments
taxation system by involving tax
by management. Therefore, we determined thespecialists from our network firm.
recoverability of DTAs to be a key audit
matter.
Responsibilities of Management and the Audit Committee for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with IFRSs, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing theGroup’s ability to continue as a going concern and disclosing, as required by IFRSs, mattersrelated to going concern.
The Audit Committee is responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and toissue an auditor’s report that includes our opinion. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these consolidated financial
statements.

As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:・ Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures responsive tothose risks, and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the consolidated financial statements is not expressing an opinion on the effectiveness of theGroup’s internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability tocontinue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
・ Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation inaccordance with IFRSs.
・ Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the groupaudit. We remain solely responsible for our audit opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with the ethicalrequirements regarding independence that are relevant to our audit of the financial statements inJapan, and to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Audit Committee, we determine those matters that wereof most significance in the audit of the consolidated financial statements of the current period andare therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because theadverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.

Ernst & Young ShinNihon LLC
Tokyo, JapanMay 27, 2022

/s/ Kazunori Takenouchi
Designated Engagement Partner
Certified Public Accountant/s/ Yoshihisa Shibayama
Designated Engagement Partner
Certified Public Accountant/s/ Dai Matsuura
Designated Engagement Partner
Certified Public Accountant