Annual Securities Report(Report in accordance with Article 24, paragraph (1) of
the Financial Instruments and Exchange Act)The 17th fiscal year (from March 1, 2023 to February 29, 2024)

J. FRONT RETAILING Co., Ltd.
E03516The information contained in this Annual Securities Report is the same as the information in the Japanese originalof the Annual Securities Report for the 17th fiscal year that was disclosed on May 29, 2024. However, the English
translation of the report has not been audited by the Accounting Auditor.

Table of Contents
Annual securities report for the 17th 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.

Approach to and efforts for sustainability ............................................................................................... 23

3.

Business risks........................................................................................................................................... 43

4.

Management analysis of financial position, operating results, and cash flows........................................ 57

5.

Critical contracts for operation ................................................................................................................ 67

6.

Research and development activities ....................................................................................................... 67

III. Information About Facilities ........................................................................................................................ 68
1.

Overview of capital expenditures, etc...................................................................................................... 68

2.

Major facilities ......................................................................................................................................... 68

3.

Planned additions, retirements, etc. of facilities ...................................................................................... 71

IV. Information About Reporting Company ...................................................................................................... 72
1.

Company’s shares, etc. ............................................................................................................................ 72

2.

Acquisition and disposal of treasury shares ............................................................................................. 77

3.

Dividend policy ....................................................................................................................................... 78

4.

Status of corporate governance, etc. ........................................................................................................ 79

V.

Financial Information ................................................................................................................................ 132
1.

Consolidated Financial Statements, etc. ................................................................................................ 133

2.

Non-consolidated Financial Statements, etc. ......................................................................................... 204

VI. Outline of Share-Related Administration of Reporting Company ............................................................. 216
VII. Reference Information of Reporting Company ......................................................................................... 218

B.

1.

Information about parent company, etc. of reporting company ............................................................. 218

2.

Other reference information................................................................................................................... 218

Information About Reporting Company’s Guarantor, Etc. .............................................................................219

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 29, 2024

Fiscal year

The 17th fiscal year (from March 1, 2023 to February 29, 2024)

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

ONO Keiichi, 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+81-3-6865-7620 (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

2-70, Konan 1-chome, Minato-ku, Tokyo

Telephone number+81-3-6865-7620 (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 GroupTerm

13th fiscal year

14th fiscal year

15th fiscal year

16th fiscal year

17th fiscal year

Fiscal year-end

February 2020

February 2021

February 2022

February 2023

February 2024

480,621319,079

331,484

359,679

407,006

Profit (loss) before tax(Millions of yen)

37,161(28,672)

6,190

16,873

41,343

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

21,251(26,193)

4,321

14,237

29,913Comprehensive income
attributable to owners of parent(Millions of yen)

19,259(27,296)

6,173

16,38430,561Equity attributable to owners ofparent(Millions of yen)

387,188352,171

350,368

359,385

381,898

1,240,308

1,263,722

1,192,907

1,120,953

1,114,726

1,479.07

1,344.91

1,337.29

1,370.43

1,453.71

81.19(100.03)

16.50

54.32

114.06

Diluted earnings (loss) per
share
(Yen)

81.17

(100.03)

16.50

54.30

114.06

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

31.2

27.9

29.4

32.1

34.3

Profit/equity attributable toowners of parent (ROE)

5.4

(7.1)

1.2

4.0

8.1

Revenue(Millions of yen)

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

(Yen)

(%)

Price earnings ratio (PER)(Times)

14.13

–

58.29

23.27

13.02

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

73,35856,47149,86665,48090,692

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

(49,559)(20,870)(5,289)(13,371)

13,429Net cash provided by (used in)financing activities(Millions of yen)

(14,829)58,727(80,392)(105,694)(72,746)

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

34,633

128,925

93,27839,874

71,342

6,579

6,528

5,589

5,115

5,277

[3,265][3,107][2,559][2,143][2,092]

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

1.
2.
3.

4.

The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards(IFRS).
Amounts have been rounded down to the nearest one million yen.
The Company has introduced the “officer remuneration BIP trust,” and the Company shares held by the officer
remuneration BIP trust are recorded as treasury stock in the consolidated financial statements. The Company shares
held by the trust are included in treasury stock to be deducted in the calculation of the total number of shares
outstanding at the end of the period for the purpose of calculating equity attributable to owners of parent per share andin the calculation of the average number of shares outstanding during the period for the purpose of calculating basic
earnings or loss per share and diluted earnings or loss per share.
The average number of temporary employees includes dedicated employees and fixed-term employees.

-4-

5.
6.

Diluted profit or loss per share for the 14th and 17th fiscal years is equal to basic profit or loss per share because there
are no potential shares that have 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.

-5-

(2) Business results of the reporting company
Term

13th fiscal year

14th fiscal year

15th fiscal year

16th fiscal year

17th fiscal year

Fiscal year-end

February 2020

February 2021

February 2022

February 2023

February 2024

34,116

13,812

15,482

15,23816,512

28,163

8,849

9,505

8,284

8,741

27,948

7,487

14,253

8,448

17,251

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

328,871329,351

335,241

336,121345,175

531,341

675,917641,307574,302639,463

1,256.46

1,258.07

1,280.48

1,282.90

1,316.73

36.00

27.00

29.00

31.00

36.00

[18.00][9.00][14.00][15.00][16.00]106.80

28.60

54.44

32.25

65.82

–

28.60

54.44

32.24

65.82

61.9

48.7

52.3

58.5

54.0

8.74

2.28

4.29

2.52

5.06

10.74

35.56

17.67

39.19

22.57

33.71

94.41

53.27

96.12

54.69

147

133

138

151

185

[17]

[17]

[16]

[16]

[16]

95.9

87.6

85.5

112.5

133.4

[96.4][121.8][125.9][136.6][188.0]

1,612

1,175

1,218

1,286

1,634.50

1,116

600

882

867

1,182.00

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.

Amounts have been rounded down to the nearest one million yen.
The highest and lowest share prices are those quoted on the First Section of the Tokyo Stock Exchange before April 3,
2022. After April 4, 2022, the figures are those on the Tokyo Stock Exchange Prime Market.

-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
Apr. 4, 2022

Oct. 27, 2022

Dec. 1, 2022
Jan. 5, 2023

Sept. 27, 2023

Nov. 14, 2023

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 the Company makes G6TMK 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. transfers all shares of NEUVE A Co., Ltd. to Libra Invesco Co., Ltd.
Daimaru Matsuzakaya Department Stores Co. Ltd. merges with and absorbs Daimaru
Matsuzakaya Sales Associates Co. Ltd.
The Company removes Dimples’ Co., Ltd. from the scope of consolidation upon transfer
of 90% of its shares to WORLD HOLDINGS CO., LTD.
Due to the revision of the market classification of the Tokyo Stock Exchange, theCompany moves from the First Section of the Tokyo Stock Exchange to the Prime
Market.
The Company acquires all shares of JAPAN RETAIL ADVISORS Co., Ltd. fromPARCO Co., Ltd. and changes its trade name to J. FRONT CITY DEVELOPMENT Co.,Ltd.
The Company acquires shares of XENOZ CO., Ltd. and makes it a consolidated
subsidiary.
PARCO Co., Ltd. acquires a part of the preferred shares of Shinsaibashi Kaihatsu Tokutei
Mokuteki Kaisha (Shinsaibashi TMK), and the Company makes Shinsaibashi TMK an
associate accounted for using the equity method.
The Company excludes StylingLife Holdings Inc. from the scope of associates accounted
for using the equity method by agreeing to the purchase of treasury shares by StylingLife
Holdings Inc., which transferred those shares to SLH Partners Limited Liability
Investment Partnership.
Liquidation of Taiwan Daimaru Kogyo, Ltd. is completed.

-8-

3. Description of business
The corporate group, of which the Company is the holding company, consists of 37 companies (including theCompany). Its principal business is the Department Store Business, and its other businesses include the Shopping
Center (SC) Business, the Developer Business, the Payment and Finance Business, wholesaling, commissioned
back-office service, 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 SPACE SYSTEMS Co., Ltd., J. Front Design &Consolidated subsidiaries: 5
Construction Co., Ltd., PARCO Digital Marketing Co., Ltd.,
Associates: 5
and J. FRONT CITY DEVELOPMENT Co., Ltd.

Payment and FinanceBusiness

JFR Card Co., Ltd.

Wholesale Business

Daimaru Kogyo, Ltd., Daimaru Kogyo International Trading(Shanghai) Co., Ltd., and Daimaru Kogyo (Thailand) Co.,
Consolidated subsidiaries: 3
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., Daimaru Matsuzakaya
Tomonokai Co., Ltd., and XENOZ CO., Ltd.

Consolidated subsidiaries: 5
Associates: 2

Consolidated subsidiaries: 1-9-Our business structure is shown below.
(Company submitting consolidated financial
statements)
J. FRONT RETAILING Co., Ltd.
SC Business(Consolidated subsidiaries)
PARCO CO., LTD.
PARCO (Singapore) Pte Ltd
Other one associate (*)

Department Store BusinessLeasing ofreal estate,etc.

Contracts with credit card member stores

Payment and Finance Business(Consolidated subsidiary)
JFR Card Co., Ltd.

Sale of food products, etc.

Wholesale Business(Consolidated subsidiaries)
Daimaru Kogyo, Ltd.
Daimaru Kogyo International
Trading (Shanghai) Co., Ltd.
Daimaru Kogyo (Thailand)Co., Ltd.
Other one subsidiary

Notes:

1.
2.
3.
4.

(Consolidated subsidiaries)
Daimaru Matsuzakaya
Department Stores Co. Ltd.
The Hakata Daimaru, Inc.
Kochi Daimaru Co., Ltd.
Leasing, development, supervision, operation,etc. of real estate
Design and construction contracting

Developer Business(Consolidated subsidiaries)
PARCO SPACE SYSTEMS
CO., LTD.
J. Front Design & Construction
Co., Ltd.
PARCO Digital Marketing CO.,LTD.
J. FRONT CITY
DEVELOPMENT Co., Ltd.

Provisionof various
services
Entrustmentof
information
processing,
etc.

Other
(Consolidated subsidiaries)
Consumer Product End-Use
Research Institute Co., Ltd.
JFR Information Center Co.,Ltd.
Daimaru Matsuzakaya
Tomonokai Co., Ltd.
JFR Service Co. Ltd.
Angel Park Co., Ltd.
XENOZ CO., Ltd.
(Associates)
HMK LOGI SERVICE Co.,
Ltd. (*)
Wakamiya Park Co., Ltd. (*)
Other five subsidiaries
Other one associate (*)(Associates)
Shinsaibashi Kyodo Center
Building, K.K. (*)
Ginza 6-chome Kaihatsu
Tokutei Mokuteki Kaisha (*)
Yaesu shopping mall Co., Ltd.
(*)
Shinsaibashi Kaihatsu Tokutei
Mokuteki Kaisha (*)
Other two subsidiaries
Other one associate (*)

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.
Liquidation of Taiwan Daimaru Kogyo, Ltd. was completed on November 14, 2023.
The Company removed StylingLife Holdings Inc. from the scope of the equity method upon the transfer of 100% of its
shares on September 27, 2023.

- 10 -

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

Address

Share 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]Lending of funds

PARCO Co., Ltd.
(Notes 3 and 4)

Toshima-ku, TokyoSC Business

100.0

Interlocking of
officers
Lending of funds

Millions ofSingapore
SC Businessdollars4

100.0[100.0]Name

Major businesses

Relationship(Consolidated subsidiaries)

PARCO (SINGAPORE) PTE
SingaporeLTD34,367

Interlocking of
officers
Lending of funds

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]J. FRONT CITY
DEVELOPMENT Co., Ltd.

Shibuya-ku, Tokyo

110

Developer Business

100.0

Interlocking of
officers

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
Lending of funds

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.

Bangkok, Thailand

Millions of Thaibaht Other (Wholesale)
202

99.9
[99.9]

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

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]XENOZ CO., Ltd.

Shibuya-ku, Tokyo

100

Other (Managementof e-sports team, etc.)

51.6- 11 -

Interlocking of
officers

Address

Share capital(Millions ofyen)

Major businesses

Ratio of voting
rights holding(held)(%)

Chuo-ku, Osaka

50

Developer Business(Real estate leasing)

50.0[50.0]Developer Business(Services related tothe acquisition of
specified assets andtheir management anddisposal, etc.)

50.0[50.0]

Name

Relationship(Equity method associates)
Shinsaibashi Kyodo Center
Building, K.K.

Ginza 6-chome Kaihatsu
Tokutei Mokuteki Kaisha

Chuo-ku, Tokyo

2,890

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]Developer Business(Real estatedevelopment andinvestment)

38.9[38.9]

Shinsaibashi Kaihatsu Tokutei
Chuo-ku, Tokyo
Mokuteki Kaisha
Notes:

1.
2.
3.
4.

2,563

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 revenue (excluding internal
revenue among consolidated companies) to consolidated revenue exceeds 10%. The main profit and loss 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)

Revenue

220,081

57,872(ii)

Profit before tax

23,084

7,487

(iii)

Profit16,675

5,408

(iv)

Total equity

150,262

74,523(v)

Total assets

425,689

300,707- 12 -

5. Information about employees(1) Consolidated companies
As of February 29, 2024
Number of employees(Persons)

Segment name
Department Store Business

2,945[1,361]SC Business

496

[111]

Developer Business

855

[381]

Payment and Finance Business

256

[24]

Other

540

[199]

Corporate (shared)
Total
Notes:

1.
2.

185

[16]

5,277

[2,092]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 29, 2024
Number of employees(Persons)
185[16]
Segment name

Average age(Years old)

2.
3.
4.

15.0

8,059,030

Number of employees(Persons)

Total
1.

Average annual salary
(Yen)

47.9

Corporate (shared)
Notes:

Average length of service(Years)

185

[16]

185

[16]

The number of employees indicates the number of working employees, including those seconded from
Daimaru Matsuzakaya Department Stores Co. Ltd. and other Group companies.
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.
Average length of service for employees seconded from the Group is calculated by aggregating the number ofyears 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 29, 2024).
(1) Management policy
Under a holding company structure, the Group will strive to enhance the competitiveness and profitabilityof the retail business (Department Store Business and SC Business) and all constituent companies by
optimizing and making 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 centered on retail business in a balanced manner.
(2) Management target
On April 15, 2024, the Group published the FY2024–FY2026 Medium-term Business Plan.
1. Key performance indicator targets
For fiscal 2026, we will aim to achieve consolidated business profit of ¥52,000 million, profit/equity
attributable to owners of parent (ROE) of 8.0% or more, and Return on Invested Capital (ROIC) of
5.0% or more. In addition, as non-financial targets, we will aim to achieve a reduction in greenhousegas (GHG) emissions of 58.0% and a ratio of women in management positions of 31.0%.
FY2026 targets
Consolidated business profit (IFRS)FY2023 results¥52,000 million¥44,300 million

Consolidated ROE

8.0% or more

8.1%

Consolidated ROIC

5.0% or more

5.1%

Greenhouse gas emissions*1(58.0)%(57.5)%

Ratio of women in management
positions*2

31.0%

22.5%

*1 Scope 1 and 2 emissions (compared with FY2017); result for FY2023 is a rough estimate as of May 29, 2024.
*2 As of March 1, 2024: 26.2%

2. Financial policy
With the aim of medium- to long-term improvement of capital profitability, we will focus on realizing
growth derived from profitability as well as optimizing the amount of equity and enhancing
shareholder returns.

Under the current Medium-term Business Plan, we will generate operating cash flow of ¥220,000
million (including depreciation of right-of-use assets) over three years, ¥175,000 million of which will
be injected into capital and growth strategy investments.
As for investments, with our sights on 2030, we will concentrate on upfront investments and growthstrategy investments in the Developer Business directed toward achieving Group synergies, in addition
to the core retail business. Regarding shareholder returns, we are working to optimize the amount ofequity through dividends at a consolidated payout ratio of 40% or more and by flexibly andresponsively repurchasing treasury shares.

- 14 -

(3) Priority operational and financial issues that the Company should address
Under the new management system, the Company set its sights on 2030 with the start of the new
Medium-term Business Plan (FY2024–FY2026).
Under the previous Medium-term Business Plan (FY2021–FY2023), despite the prolongation of the
COVID-19 pandemic, we worked to ensure that we captured recovering domestic consumption andinbound demand as the country transitioned towards normalization of social and economic activity bymoving steadily forward with key strategies and measures mainly in the mainstay Department StoreBusiness and the SC Business, as well as through fixed cost reductions and other management structurereforms. As a result of these initiatives profit has recovered to pre-COVID-19 levels, and we achieved the
key performance indicator targets set in the previous Medium-term Business Plan, including
improvements to the financial standing of the Company.
On the other hand, the environment in which the Company operates is characterized by increasing
uncertainty, such as the emergence of geopolitical risks, fears of a slowdown in overseas economies, andtrends in prices and financial markets. Moreover, the perceptions and actions of consumers who lived
through the COVID-19 pandemic have changed dramatically, as shown by their heightened awareness ofsuch themes as population decline, the polarization of income and consumption, the advance oftechnology, and environmental and social issues.
During the formulation of the Medium-term Business Plan, the Company saw these changes in theenvironment as an opportunity for business innovation, drew up its Vision for 2030, with sustainability at
the core of management, and designated key strategies to execute during the period of the current plan.
Looking ahead to substantial growth in the run up to 2030, the Company seeks to bring together thestrengths of the Group, centered on retail operations such as the Department Store Business and the SC
Business, and two evolve into a corporate group that continues to provide new value to its stakeholders,
including customers.
Based on the management direction under the current Medium-term Business Plan, in addition to
deepening the retail business and evolving Group synergies in preparation for substantial growth, we will
focus on strengthening the Group’s management foundation to heighten the effectiveness of thesestrategies.
<Management direction looking ahead to 2030>
The Company is promoting corporate activities that are aligned with “sustainability management” aimed
at tackling environmental and social issues and finding solutions for them through business in order torealize the Group Vision of “Create and Bring to Life ‘New Happiness.’” Moreover, the Company
recognizes our strengths as being our excellent customer base and store real estate primarily in major
cities across Japan, the connections and trust it has with our stakeholders, and the capabilities of creationand management of commercial spaces/experiences and overall discernment it has cultivated through thedepartment stores, PARCO, and others.
In defining our management approach for the coming years, the Company, after considering the
aforementioned strengths that the Company possesses, along with important changes in the businessenvironment, has drawn up a “Vision for 2030.”
The Company intends to evolve into a “Value Co-creation Retailer Group” that constantly provides“Three Values of Co-creation” centered on the retail businesses.

- 15 -

1) Changes in the business environment the Company considers important・Generational shift in the major market segments, advance of globalization (inbound demand, etc.)
Consumption ・Growing desire for “connections through empathy, support, and trust” that replenish the soul・Further raise in awareness of “circulation” from the cycle of production and consumption
・Declining population and growing income inequality in Japan
Market・Renewal of urban functions and the progression of consolidation and urban development
・Reduced workforce in regional economies, increased interest in unique regional traditions andcultures・Progress of climate change and other environmental issues, emergence of geopolitical risks

Society・People and communities becoming less connected, growing digital communities
・Deepening labor shortages, greater emphasis on self-realization and social contribution in choosing
a job2) Vision for 2030
(i) Three values of co-creation — Materiality
Leveraging the solid foundation provided by the Company’s inherent strengths without being
constrained by traditional boundaries, the Company will cultivate a culture in which anyone canshare in the creation of new values that offer heart-felt fulfillment for customers, thereby
contributing to raising the charm and vitality of cities, while building a sustainable environment andsociety.
Concentrating on the retail businesses, the Company will broaden the wheel of “Co-creation” with
our stakeholders, particularly our customers, continually providing the following three values of cocreation:“Co-creation of Excitement”: Customers and employees working together to generate excitement.
“Co-prosperity with Communities”: Enhancing local community charm while giving it an importantand essential presence.
“Co-existence with the Environment”: Cultivating a culture in which anyone can contribute tobuilding a society that co-exists with the environment.

Based on the above three values of co-creation, the Company has reviewed our materiality todesignate five themes of materiality. We are promoting the alignment of these initiatives formateriality with our business strategies and working to realize sustainable growth for the Company
and a “Well-Being Life” for all our stakeholders.
For information about our sustainability, please see “2. Approach to and efforts for sustainability.”(ii) Strategic approach
Through overwhelming support from the domestic and overseas premium andaspirational consumer group, we will evolve into a “Value Co-creation Retailer Group”
to always offer the three values of co-creation

In today’s world, as consumption diversity advances, we are seeing a vanishing desire for uniformity
in products and services. As such, the Company aims to evolve into a “Value Co-creation Retailer
Group” that constantly provides the three values of co-creation to the premium and aspirational- 16 -

consumer group (all individuals who favor consuming high-quality goods and having heart-lifting
experiences that fulfill their own preferences and values).
To realize this goal, the Company believes it is now necessary to integrate the JFR Group’s efforts
more than ever before and extend our strengths. For this purpose, along with deepening our retailbusiness, we aim to grow exponentially by pursuing synergies that JFR Group offers in the threeareas of “customer,” “area,” and “content” outlined below.

<Customer Synergy>
In addition to deepening our excellent customer base, the Company will strengthen connections withnew customers, including overseas customers and generations Y (millennials) and Z (collectively
hereinafter the “Generation MZ”). We will connect with our customers across stores, businesscompanies, and regions, and continue to be a partner chosen by our customers throughout their lives.

<Area Synergy>
The Company will utilize store real estate and business foundations in major cities nationwide
across the JFR Group to contribute to enhancing city charm. Especially in the seven priority areas*,
the Company will hone the uniqueness of our department stores and PARCO stores, and work on
creating vibrant cities and further enhancing their charm through medium- to long-term development
plans, customer collaboration within the area, and promotion of foot-traffic circulation.
*Priority areas: Sapporo, Tokyo, Nagoya, Kyoto, Osaka, Kobe, and Fukuoka<Content Synergy>
The Company will promote the development of our own content for new growth in the retailbusiness, including business expansion in Japan as well as overseas and in the digital domain, by
creating a synergistic fusion encompassing our cultivated discernment and purchasing power, alongwith JFR Group’s network of connections with regions, business partners and creators.

In order to realize these three areas of synergies, the Company is working to strengthen the
management foundation into one that is capable of bringing together the capabilities of the JFRGroup, such as the cross-pollination of talent and the integration of systems, that give rise to newvalue.

<2024–2026 Medium-term Business Plan>
1) Positioning of the Medium-term Business Plan within the overall long-term strategy
This Medium-term Business Plan is positioned as a “period of reform” to ensure JFR Group’s
realization of the Vision for 2030, and achievement of medium- to long-term growth.

Specifically to achieve this, under this plan, the Company is targeting the creation of profits
centered on the principle retail businesses (Department Store Business and SC Business), and in
addition, planning to expand upfront investments and growth strategy investments aimed atbringing about the synergies of the JFR Group.

- 17 -



Initiatives will be concentrated on the key strategies of this Medium-term Business Plan:“Deepening the Retail Businesses,” “Evolving Group Synergies,” and along with “Strengthening
the Group’s Management Foundation.”

2) Key performance indicator targets
The Company has set the following financial targets for the final year of this Medium-term Business
Plan (FY2026 ending February 28, 2027), which is positioned as the “period of reform.” The
Company is targeting consolidated business profit (on an IFRS basis) of ¥52,000 million, and aconsolidated ROE of 8.0% or more. We have also set the following non-financial targets. The
Company aims to achieve 58.0% greenhouse gas emission reduction target and a 31.0% ratio of
women in management positions.

3) Financial and capital policy
With the aim of medium- to long-term improvement of capital profitability, we will focus on“realizing growth derived from profitability” as well as “optimizing the amount of equity andenhancing shareholder returns.”(i) Realizing growth derived from profitability
・ We will promote ROE management on a consolidated basis and ROIC management bybusiness segment. We will realize growth derived from profitability in part by taking athorough approach to managing investments based on growth potential and profitability, while
expanding growth investment with our sights set on 2030.
・ Under our investment plans set forth in the Medium-term Business Plan, we will concentrate
on upfront investments and on growth strategy investments in the Developer Business directed
toward achieving Group synergies, in addition to the retail business.
(ii) Optimizing the amount of equity and enhancing shareholder returns
・ We will establish a financial base in seeking ongoing improvement in capital profitability, in
addition to profit generated through business growth.
・ Under the Medium-term Business Plan, we seek to optimize the amount of equity and enhanceshareholder returns by maintaining a consolidated dividend payout ratio of 40% or more andconducting purchases of treasury shares.

4) Framework for the Medium-term Business Plan(i) Deepening the retail business
A. Expand the customer base in Japan and overseas
・ In the Department Store Business, we will strive to expand the customer base centered on
department store gaisho (out-of-store sales) in part by extending the reach of services forcustomers who use apps and by broadening the geographical scope of gaisho activities. We
will also promote gaisho collaborations with PARCO stores and elsewhere within the Group.
・ In the SC Business, we will collaborate with JFR Card in strengthening and promoting efforts
to gain members upon issuance of new cards, along with app members.

- 18 -

・ In the Department Store Business and the SC Business, we will strive to enhance relationships
with overseas customers. This will involve seeking customer collaboration throughpartnerships with overseas companies particularly in Asia and leveraging mutual use of store
facilities. In addition, we will direct foreign tourists visiting Japan to various stores andstrengthen information dissemination.

B. Elevate appeal of customer contact points
・ In the Department Store Business, we will establish competitive superiority in each of ourgeographic locations by striving to elevate the appeal of our stores where customer
engagement originates. This will involve persistently enhancing key categories particularly
with respect to the Matsuzakaya Nagoya store and other flagship stores, creating sales settings
that cater to next-generation customers such as Generation MZ and adapting to market
changes, and improving spatial value particularly in terms of offering pleasant store
environments with premium value and eco-friendly design.
・ We will expand digitally-based customer contact points through efforts that involve enhancing
customer communications by overhauling department store apps and dedicated customer
websites.
・ In the SC Business, we will strive to increase the distinctive brand value of PARCO and thevalue of visiting our stores through strategic renovations focusing on four key store locations,with our sights set on extending support from the perspective of Generation MZ and overseas
customers. In addition to carrying out the first major renovations at Shibuya PARCO and
Shinsaibashi PARCO, at Nagoya PARCO we will work on integrating different shops to create
one of the largest entertainment and pop culture zones in the area, introducing next-generation
fashion, and implementing other initiatives.
・ We will enhance the appeal of customer contact points in part by better disseminating
information to customers through Company-wide use of customer data at PARCO stores andonline, and also by rolling out new services for members.

C. Expand content for the premium and aspirational consumer group
・ In the Department Store Business, we will persistently enhance offerings such as luxury brands
and watches that are highly regarded by our domestic and overseas customers. We will also
propose options with respect to new lifestyles aligned with market changes, particularly in theareas of fashion, beauty, and health.
・ In addition, we will also work to expand our lineup of new products and services incooperation with other companies to enhance our response to the affluent market segment.
・ In the SC Business, we will enhance entertainment offerings with respect to PARCO’s
strengths in theater, music and cinema, as well as e-sports and other digital entertainment, in
addition to operating Japan pop culture zones through store renovations and rolling out brands
enlisting collaboration with department stores.

- 19 -

(ii) Evolving Group synergies
A. Expand the Group customer base・ During the course of the Medium-term Business Plan, as well as expanding app membership,
we will consolidate issuance operations for in-house card, such as GINZA SIX and PARCO,
within the Group. We will also tap into opportunities arising from establishing a Group
payment infrastructure if efforts for expanding the Group customer base and improving
customer lifetime value (LTV).
・ In addition to making progress in arranging customer collaboration beyond our business andstores, we will also formulate and promote a Group customer strategy that involves customer
database analysis and use centered in key areas.

B. Maximize the area value
・ During the current Medium-term Business Plan, of the seven key areas, we will concentrate on
generating synergies in the Nagoya’s Sakae area.
・ In addition to major renovations at the Matsuzakaya Nagoya and Nagoya PARCO stores,
through the opening of a commercial complex by the Developer Business (scheduled for 2026)
and the expansion of external affiliated stores using the JFR card, we will promote the mutual
exchange of customers and encourage customers to move around within the area. Throughsuch initiatives, we will help in creating bustling towns and making them more appealing
thereby maximizing area value.
・ As well as opening commercial complexes in the Nagoya’s Sakae and Osaka’s Shinsaibashi
areas (scheduled for 2026), we are strengthening investment in the Developer Business topromote development plans for the Fukuoka’s Tenjin area. On the other hand, we will also
work to improve profitability by making better use of, selling, or replacing underutilized
assets.
・ We will integrate and reorganize the current construction and interior design business andbuilding management business, and expand the business by creating high-quality spatial value
in facilities inside and outside the Group, including key areas, enhancing the quality ofprocesses such as facility maintenance and management, and recruiting and developing
specialized professionals.

C. Own and develop in-house contents
・ In preparation for new growth in the retail business, we will develop and own in-house
contents and services with a view to business development, not only in Japan but also
overseas, including in the digital domain. We will also promote the development of new
businesses in collaboration with other companies by combining the organizational capabilitiesof the department stores and PARCO, including their discernment, procurement capabilities,
and networks.
・ Leveraging the Company’s business foundation deployed in major cities nationwide, we will
work on identifying and developing distinctive products and services specific to each region
with respect to food culture and other local characteristics.

- 20 -

・ As well as attracting visionary new content and tenants, we will promote the development andownership of content such as games centered on particular subcultures.
・ In addition to strengthening the subscription business, we will promote the development of
new operations through collaboration with other companies, such as by entering new
businesses that promote the circulation of consumption.
・ To accelerate and promote these initiatives, we will strengthen M&A and collaboration withother companies, and growth strategy investments through the Company’s business succession
and CVC funds.

(iii) Strengthening the Group’s management foundation
We are working together as a Group to strengthen the management foundation to achieve our Vision
for 2030 and enhance the effectiveness of our strategies. In particular, we will prioritize investments
in human resources, which are the source of value creation, and promote the acceleration of ourhuman resource strategy.
A. Human resource strategy
・ We will promote a human resource strategy that is integrated with the management strategy,
such as by strengthening recruitment of highly specialized professionals and enhancing skills
development programs, systematically nurturing next-generation staff, and promoting theparticipation of women.
・ As well as seeking to blend the knowledge of our employees by energizing human interactions
within the Group, we will cultivate a spirit of taking on challenges by expanding opportunities
for human resources to play an active role.
・ We aim to become a human resources development company by creating an environment andorganizational structure that allows every employee to take on new challenges, and by drawing
out their intentions, desires, and abilities so that both people and organizations can achievesustainable growth.

B. Financial strategy
・ With the aim of medium- to long-term improvements in capital profitability, we will
strengthen promotion of ROIC management through such initiatives as taking a thoroughapproach to managing investments based on growth potential and profitability, andencouraging this to take root within the Company through cooperation with operatingcompanies.
・ We will generate free cash flows based on capital market trends, securing long-term stable
funding, and controlling interest-bearing liabilities to improve our financial standing.

C. Systems strategy
・ We will build Group common systems and groupware that encourage collaboration between
operating companies and active internal and external communications.
・ We aim to sophisticate the management and administration as well as streaming operations
through the full-fledged deployment of a common Group accounting system. In addition to- 21 -

working to strengthen our ability to handle both information security and business continuity,
we will promote IT governance by enhancing system investments and asset management.

D. Corporate governance・ Under the new management system that began in fiscal 2024, we aim to acceleratemanagement decision-making and execution, and we seek to realize medium- to long-term
growth and continuous enhancement of corporate value by enhancing the oversight function of
the Board of Directors and advancing governance.

- 22 -

2. Approach to and efforts for sustainability(1) JFR Group’s sustainability management goals
The Group has encountered many crises over its 300 to 400-year history. Each time, we have returned to our
Corporate Credo “Service before Profit” and “Abjure All Evil and Practice All Good,” conducting ourbusiness activities honestly while responding quickly to changes in our customers and society. This has led us
to our current management. Companies cannot develop without coexisting with society. Today, it is essential
for management to take a long-term perspective and create a vision of what the company should be for the
future, a company that will have a prominent presence in society. It is evident that we cannot conductbusiness activities while turning a blind eye to the growing seriousness of global environmental issues suchas global warming, ocean pollution, and loss of biodiversity, as well as human rights issues in the supply
chain. We believe we can obtain a framework to realize sustainable management for future growth byintegrating and promoting the concept of sustainability into our corporate and business strategies to resolvethese issues.
Based on this belief, J. Front Retailing will promote sustainability management and contribute to the “WellBeing Life” of our stakeholders by practicing CSV (Creating Shared Value) that balances the resolution ofenvironmental and social issues with corporate growth, towards the aim of realizing a sustainable society andnew happiness in people’s lives.
<Overview of sustainability management>(i) GovernanceSpecific policies on sustainability initiatives, including responses to environmental and social issues, arediscussed and approved by the Group Management Meeting, the highest decision-making body for businessexecution. Matters approved by the Group Management Meetings are shared with all operating companies
via the Sustainability Committee, an advisory body to the President and Representative Executive Officer.
In addition, the Sustainability Committee monitors the implementation plans and progress of each operatingcompany to enhance the effectiveness of Group-wide initiatives.
Accordingly, the Board of Directors receives reports on the matters approved by the Group Management
Meeting and activities of the Sustainability Committee, then discusses and supervises target setting, policies,
and action plans.
・ Board of Directors skill matrix
In selecting candidates for the Board of Directors, the Company uses a skills matrix to clarify the expertiseand experience expected of directors. Given our promotion of sustainability management, we have identified- 23 -

“environment,” “society,” “governance,” and “human resources and organizational development” as skill
categories, and we select directors who can appropriately oversee our sustainability initiatives.
*

To view the skill matrix, please click the link below.
Notice of Convocation for the 17th fiscal year
https://www.j-front-retailing.com/_data_json/news/_upload/240425_Notice_of_Convocation_E.pdf

・ Incorporating non-financial indicators into the officer remuneration system
Since FY2021, “reduction of Scope 1 and 2 emissions” and “ratio of female managers” have been set as
non-financial indicators for determining performance-linked remuneration under the officer remuneration
system. These are linked to the KPIs in the Medium-term Business Plan to clarify the responsibility of
executive officers for achieving the targets for climate-related issues and to function as an incentive forrealizing and promoting sustainability management.
*

For information about our officer remuneration system, please see “4. Status of corporate governance, etc., (4) Officer
remuneration.”<JFR Group’s sustainability management system>
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- 24 -

<Main agenda items of the Sustainability Committee>
・ Lecture by an external instructor on “ESG/sustainability management”
April

・ How to advance the Women’s Empowerment Promotion Project・ Report on results of first supplier assessment (environment/human rights)

May・ Lecture by an external instructor on “Diversity as a management strategy”・ Group-wide KPI progress report for FY2021 and action plan for FY2022

2022

September

April
2023

・ Progress report on Women’s Empowerment Promotion Project and discussion of future direction
・ Progress report for 1H FY2022
・ Lecture by an external instructor on “Business and human rights”
・ Status of initiatives to promote diversity and inclusion at operating companies
・ Report on results of employee awareness survey
・ Progress report for FY2022 and sustainability action plan for FY2023

・ Lecture by an external instructor on “Overview and importance of biodiversity”
September ・ Overview of second supplier assessment
・ Group-wide KPI progress report for 1H FY2023(ii) Risk management
The Group defines risk as “uncertainty that affects the achievement of corporate management goals and has
both positive and negative aspects.” Risk management is positioned as “activities to enhance corporate value
by managing risk in a rational and optimal manner from a company-wide perspective.” The Group aims toachieve sustainable corporate growth by appropriately addressing both the positive and negative aspects ofrisk.
*

For information about sustainability-related risks and other risks of extremely high importance to Group Management in
the medium term, please see “II. Overview of Business, 3. Business risks.”
For information about environment-related risks, please see “(2) Addressing climate-related issues (TCFD disclosures),(ii) Risk management.” For information about human capital-related risks, please see “(4) Approach to human capital, (ii)
Risk management.”(iii) Strategy
In formulating the current Medium-term Business Plan starting from FY2024, the Company has reviewed
its materiality and identified five themes. Rather than merely resolving issues, we will promote materiality
initiatives by integrating them with our business strategy to link materiality to corporate growth. For thisreason, we have changed to more proactive language based on the belief that the enthusiasm and actions ofevery employee are more important than ever before. For information about our business strategy, please see“II. Overview of Business, 1. Management policy, management environment, issues to be addressed, etc.”- 25 -

*For details on the process for identifying important sustainability issues please visit the following website.
https://www.j-front-retailing.com/english/sustainability/materiality.html(iv) Metrics and targets
The following are our main metrics and targets for sustainability.
Metrics

Details of targets
Aiming for net zero Scope 1, 2, and 3 GHG emissions by 2050

GHG emissions

58% reduction of Scope 1 and 2 GHG emissions by 2026 (vs. FY2017)60% reduction by 2030
Aiming for 40% reduction of Scope 3 GHG emissions by 2030 (vs.
FY2017)

Ratio of renewable energy in electric
power used in business activities

100% by 2050

Food recycling rate

85% by 2030

Development of environmentally friendly
products

Increase transaction volume of environmentally friendly products (including
certified products) by 2030

60% by 2030

Acquisition of environmental certifications
100% by 2030
for newly developed properties
Ratio of women in management positions

31% by 2026

Gender wage gap

Reduce the gap by 2026 by strengthening efforts to prevent loss of career,
for example career development and training for women and management
positions

Ratio of men taking childcare leave

95% by 2026

Turnover rate

5.3% or lower by 2026

(2) Addressing climate-related issues (TCFD disclosures)
Recently, climate change has progressed to an extremely serious level, endangering not only future
generations but all people, including the present generation.
The Company has positioned climate change as a key issue in our sustainability management. Based on therecognition that the risks and opportunities associated with climate change will have a significant impact on
the Group’s business strategies, we are working to achieve net zero emissions* throughout the entire value
chain by the year 2050 through measures to both “reduce greenhouse gas emissions” and “promote a circular
economy.”- 26 -

*To thoroughly reduce GHG emissions and reduce the remaining emissions to virtually zero after subtracting the amountof emissions removed through forest absorption and CCS (CO2 capture and storage), etc.

(i) Governance
Please see “(1) JFR Group’s sustainability management goals, (i) Governance.”(ii) Risk management(a) Detailed processes for identifying and assessing environmentrelated risks and opportunities
The Group considers risk as the starting point of its strategy.
It defines risk as “uncertainty, both positive and negative, that
affects the achievement of corporate management goals,” andbelieves that the appropriate handling of risks leads
companies to sustainable growth.
We use the following processes for identifying and assessing
environment-related risks and opportunities—which we
consider to be one of the many types of risks andopportunities that have a substantial impact on our businessstrategy—in terms of both positive and negative aspects.
First, we identify a comprehensive set of risks andopportunities for each activity item in the supply chain
process. Next, we assess the risks and opportunities based on
two criteria: importance to the Company and importance tostakeholders.
Note: For details, please see “(iii) Strategy” immediately
below.

- 27 -<Risk management process>(b) Detailed processes for management of environment-related
risks
The Group is working to share environment-related risks with

<Risk management system>
Risk management
process

Responsible meeting bodies andexecuting entities

each of its operating companies by examining the risks in・ Board of Directors

more detail within the Sustainability Committee. Operating

・ Group Management Meeting
・ Risk Managementcompanies incorporate environment-related initiatives into

their action plan and confirm the progress through discussions Identification/assessment of risks
at meetings chaired by their president. The GroupManagement Meeting, the Risk Management Committee and・ Sustainability Committee(Environment-related risks)

the Sustainability Committee monitor the progress and,
finally, report to the Board of Directors.

Committee (Overallmanagement risk)

Response to risks

・ Operating companies
・ Board of Directors
・ Group Management Meeting

Monitoring/report

・ Risk Management
Committee (Overallmanagement risk)
・ Sustainability Committee(Environment-related risks)(c) How the processes are integrated into the organization’s overall risk management
Please see “II. Overview of Business, 3. Business risks.”(iii) 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 appropriate
milestones because of the potential impact on its business activities over the long term. Accordingly, theGroup has positioned the execution window of the Medium-term Business Plan up to FY2026 as the short
term; the period up to FY2030, which is the short-term target year set by the SBTi (Science Based Targets
initiative)*, as the medium term; and the period up to FY2050, which is the SBTi net zero target year, as
the long term.
*

Jointly established in 2014 by CDP, the UN Global Compact, World Resources Institute (WRI), and the World Wide
Fund for Nature (WWF) to enable companies to set ambitious emission reduction targets in line with the latest climate
science<Definition of the periods for consideration of climate-related risks and opportunities in the JFR Group>
Periods for consideration of climate-relatedrisks and opportunities
Short term

JFR Group definitions

Until FY2026

Execution period of the Medium-term Business Plan

Medium term

Until FY2030

Period to the short-term target year for SBTiLong term

Until FY2050

Period to SBTi Net Zero Target Year(b) Description of risks and opportunities and their degree of impact on the organization’s business, strategy
and financial planning
The Group conducts scenario analysis in order to understand the risks, opportunities, and impacts ofclimate change for the Group and to examine the resilience of the Group’s strategies and the need forfurther measures for the world we envision in FY2030.
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 the goal of the Paris Agreement to keep the global average temperature- 28 -

increase well below 2˚C above pre-industrial levels and to limit it to 1.5˚C (the below 1.5˚C/2˚C scenario)
and one that envisages the world without the introduction of new environment-related policies andregulations (the 4˚C scenario).
Based on these two scenarios, the Group—which is centered on the retail business (e.g. department stores,
shopping centers)—extracted climate-related risks and opportunities for each activity in its value chain
process, in line with TCFD recommendations. In addition, we defined the transition risks (policy
regulation, technology, market, and reputation) and physical risks (acute and chronic) arising from climatechange, as well as the opportunities (resource efficiency, energy sources, products and services, markets,and resilience) arising from responding appropriately to it.
<Existing scenarios taken into consideration>
Envisioned world
Below 1.5˚C/2˚C scenario
4˚C scenario

Existing scenarios“Net-Zero Emissions by 2050 Scenario (NZE)” (IEA, 2023)“Representative Concentration Pathways (RCP2.6)” (IPCC, 2014)“Stated Policy Scenario (STEPS)” (IEA, 2023)“Representative Concentration Pathways (RCP8.5)” (IPCC, 2014)(c) Risks, opportunities, and financial impacts based on relevant scenarios and strategies and resilienceagainst them
The Group identified climate risks and opportunities and assessed their importance based on two criteria,
the “importance to the Company (impact x urgency)” and the “importance to stakeholders.” For items thatwere rated as particularly important, the Group has conducted both quantitative and qualitative analyses ofthe financial impacts in FY2030 assuming the below 1.5˚C/2˚C scenario and the 4˚C scenario anddeveloped measures for each scenario.
Notably, when it is difficult to obtain data to quantitatively assess risks and opportunities, we conduct
qualitative assessments, and the results are indicated in three levels according to the slope of the arrow.
<Climate change risks and opportunities of particular importance to the JFR Group and their financial
impacts in FY2030>
Impact on the JFR Group’s business and finance expected to be very large.
Impact on the JFR Group’s business and finance expected to be large.
Impact on the JFR Group’s business and finance expected to be negligible.

- 29 -

Long term

Medium term

Type of climaterelated risk andopportunity

Short termTime ofemergence

Financial impact
Climate-related risks andopportunities of particularimportance to the JFR
Group

Below
1.5˚C/2˚Cscenario

4˚C scenario

Measures Reduction of GHG emissions through Increased costs
Approximately Approximately
aggressive energy conservation measures inassociated with
¥1,300¥1,500● ●stores and expansion of renewable energy
introduction of carbon
1
1
million*million*switching to achieve the 2050 net-zero target
tax, etc.
 Increased costs
associated with thedevelopment of Financing through Green Bonds, etc.
● ● ● properties with high Cost-effective equipment installation
environmental
performance and theinstallation of equipment
Transition
 Increased investment forrisk Introduction of internal carbon pricing
introduction of high Cost-effective and well-planned investment
●
●
●
Risk
efficiency energy-saving
considerations
equipment
 Introduction of internal carbon pricing
 Increase in renewable Reduction of renewable energy procurement
energy procurement
risk and mid- to long-term costs throughcosts due to increased Approximately Approximately diversification of renewable energy● ●demand for electricity ¥700 million*2 ¥300 million*2 procurement methods
derived from renewable Improvement of energy self-sufficiency
energythrough installation of renewable energy
equipment in the company’s facilities, etc.
 Increased resilience of stores and business Decrease in revenue due Approximately Approximately
Physicalsites through BCP preparation¥10,300
to store closures caused¥5,200●●risk
Improvement of disaster prevention
by natural disasters
million*3
million*3
performance of stores Decrease in energy
procurement cost due to Replacement with energy-saving, highEnergy
introduction of highApproximately ¥400 million*4●●●
efficiency equipment at the appropriate timesourceefficiency energy-saving
equipment Expand handling of environmentally friendly
products and services
 Recycling waste cooking oil as made-in Decarbonization of theJapan SAF
entire value chain and Collaboration with suppliers on efforts to
Products
expansion of earnings
reduce food waste through AI demandandby responding to● ●forecasting systems, etc.
servicesincreased demand for Decarbonization-oriented dialogue withenvironmentally friendly
suppliers, for example encouraging them toproducts and services
calculate GHG emissions and holding
briefings for collaboration on Scope 3
Opporemissions data
tunity Expansion of new
growth opportunities
 Expansion of sharing, upcycling, and otherthrough new entry into
circular businesses such as the fashion
the circular businesses
subscription business “AnotherADdress”● ● ●  Expansion of profits Launch of circular businesses throughthrough acquisition ofeffective use of M&A and CVC* investments
new customers byproposing sustainable
Marketlifestyles
 Expansion of profits due Acquisition of environmental certifications
to increased
for newly developed properties (ZEB,
opportunities to acquire Approximately―
CASBEE, etc.)¥2,500● ● ● new tenants through Promoting the use of renewable energy inconversion to stores
million*5
stores to achieve RE100
with high environmentalvalue- 30 -*

CVC (Corporate Venture Capital): A mechanism to efficiently and effectively promote business co-creation through investmentin promising start-ups. In FY2022, the Company established the “JFR MIRAI CREATORS Fund” to promote open innovation.

Basis for calculation of quantitative financial impacts expected in FY2030*1 Calculated by multiplying the JFR Group’s Scope 1 and 2 GHG emissions in FY2030 by the carbon tax price per tonne of CO2(Parameters: $140/t-CO2 (1.5˚C scenario), $120/t-CO2 (4˚C scenario))*2 Calculated 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 Calculated by multiplying the amount of sales losses due to suspension of store operations during past natural disasters by the
future frequency of floods(Source: “Representative Concentration Pathways (RCP2.6, 8.5)” (IPCC, 2014))*4 Estimated by multiplying energy procurement costs by the amount of energy saved by the JFR Group as of FY2030*5 Estimated by multiplying the JFR Group’s real estate revenue and profits in FY2030 by the degree of impact of new contractconclusion fees for buildings with environmental certification

Based on the above scenarios, we have analyzed the impact of climate change and examined ourcountermeasures. We found that the measures the Group is already implementing and has planned are
effective and flexible enough for reducing risks and contributing to realizing opportunities. We willcontinue to translate our efforts into enhanced management resilience.
・ JFR Group’s 2050 Net Zero Transition Plan
The Group believes that it needs to strengthen its strategies from a medium- to long-term perspective toachieve net zero emissions by 2050. To this end, the Group has formulated a transition plan. The planclarifies specific initiatives from short-, medium- and long-term perspectives to acquire new growth
opportunities, including proactively responding to market changes in response to positive opportunities,
while developing appropriate measures to avoid negative risks in our business.
In February 2024, we established Internal Carbon Pricing (ICP). By converting internal CO2 emissions
into monetary values, we aim to visualize CO2 emission reductions and their costs, and to foster
awareness of the need for decarbonization and promote decision-making linked to decarbonization
investments. By anticipating the future costs of carbon taxes, etc., and taking proactive measures toaddress them, we believe that this will lead to cost reductions over the long term and provide opportunities
for business creation.
Additionally, given that more than 90% of our Scope 3 emissions fall into Category 1 (purchased goods
and services), controlling or reducing emissions in this category on our own is extremely difficult. The
entire value chain must work together to reduce these emissions. Therefore, we will make gradual efforts
through dialogue with suppliers, encouraging them to calculate their GHG emissions and asking those
who already calculate those figures to establish reduction targets.

- 31 -

<2050 Net Zero Transition Plan*>(iv) Metrics and targets(a) 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,
and 3 GHG emissions and the ratio of renewable energy within electricity used in business activities.
(b) GHG emissions (Scope 1, 2, and 3)
The Group has been calculating its total GHG emissions for the Group since fiscal 2017. In fiscal 2023,
the Group’s Scope 1 and 2 GHG emissions are forecast at approximately 82,000 t-CO2 (down 57.5% fromfiscal 2017), and Scope 3 GHG emissions are forecast at approximately 2,898,000 t-CO2 (down 1.0%
from fiscal 2017). The ratio of renewable energy is forecast at 52.9%. The Company plans to obtain thirdparty assurances for its Scope 1, 2, and 3 GHG emissions and renewable energy electricity consumption
for FY2023.

- 32 -

<JFR Group’s Scope 1, 2, and 3 GHG emission results and forecast>
FY2017

FY2022

Results*1

Results*1

Total Scope 1 and 2 emissions
Breakdown(Unit: t-CO2)
Forecast in FY2023
Compared with
FY2017(compared with basefiscal year)

Forecast

194,154

109,785

82,450(57.5)%

Scope 1 emissions

16,052

13,714

13,720(14.5)%

Scope 2 emissions

178,102

96,07168,730(61.4)%

2,927,320

2,761,669

2,898,650(1.0)%

–

33.6

52.9

–

Total Scope 3 emissions*2
Ratio of renewable energy (%)*1 Obtained third-party assurance from LRQA
*2 Calculated in accordance with “Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply
Chain ver. 2.6 (March 2024, Ministry of the Environment and Ministry of Economy, Trade and Industry)” and “Databaseof Emissions per Base Unit for Calculating Organizational GHG Emissions through Supply Chains, etc. ver. 3.4 (March
2024)” IDEAv2.3 (for supply chain GHG emissions calculation).

(c) Targets used by the organization to manage climate-related risks and opportunities and performanceagainst targets
The Group has set long-term GHG emission reduction targets since 2018 to achieve the global under
1.5˚C target and obtained certification from the SBTi in 2019 for its Scope 1, 2, and 3 GHG emissions
reduction targets. In 2021, we raised our 2030 Scope 1 and 2 GHG emission targets from the previous
40% reduction to a 60% reduction compared with FY2017 (the base year) and reacquired SBTi
certification for the 1.5˚C target. In February 2023, we also obtained SBTi certification for “Net Zero
Target” by 2050 for Scope 1, 2, and 3 GHG emissions.
To achieve these long-term targets, in FY2019 the Group started procuring renewable energy-derived
electricity at its own facilities, and in October 2020 joined RE100*, which aims to achieve a 100%
renewable energy rate for electricity used in business activities by 2050. Moreover, as an interim target,
we aim to achieve a 60% renewable energy rate for electricity used in business activities by 2030.
Looking ahead, we will work to expand procurement of electricity sourced from renewable energy
towards achieving net zero by 2050.
*

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

<Targets used by the JFR Group to manage climate-related risks and opportunities>
Metrics
GHG emissions
Ratio of renewable energy inelectric power used in businessactivities

Target year

Details of targets

2050

Net zero emissions of Scope 1, 2, and 3 GHG emissions*1

2030

60% reduction of Scope 1 and 2 GHG emissions (compared to
FY2017)*1
Aiming for 40% reduction of Scope 3 GHG emissions (vs. FY2017)*1

2050

100%*22030

60%*1 Obtained SBT certification*2 Joined RE100 in 2020

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

- 33 -

(3) Addressing nature-related issues (TNFD disclosures)
In recent years, companies have been required to understand the impact of their business activities on nature,stop the loss of biodiversity, and contribute to biodiversity recovery. As a retailer with its main business indepartment stores and shopping centers, the JFR Group is in contact with a wide range of stakeholders,
including business partners, customers, and local communities. We will leverage this connection to promotenature-positive initiatives through our business, such as procuring environmentally friendly products,
proposing lifestyles that are harmonious with nature, developing retail locations with advanced
environmental performance, and promoting other nature-positive efforts.
・ Participation in the TNFD ForumIn November 2023, the Group endorsed the philosophy of the Taskforce on Nature-related Financial
Disclosures (TNFD)*1 and joined the TNFD Forum*2 to support activities to those ends. We will use the
TNFD framework for disclosures to identify correlations (dependencies and impacts) between the Group’sbusiness and natural capital, sort out risks and opportunities, and promote proactive information
disclosure.
*1 TNFD is an international organization with a framework for disclosing the impact of nature-related risks andopportunities on corporate finance. The organization encourages companies and financial institutions to disclose
information on natural capital and shift the global flow of capital from nature-negative outcomes to nature-positive
outcomes.
*2 The TNFD Forum comprises corporations, government agencies, academic institutions, and other organizations withcross-sectoral expertise. Its activities include providing support for developing disclosure frameworks and sharing
information related to TNFD.

(i) Governance
Please see “(1) JFR Group’s sustainability management goals, (i) Governance.”(ii) Risk management
Please see “(2) Addressing climate-related issues (TCFD disclosures), (ii) Risk management.”(iii) Strategy(a) Dependencies and impacts on nature
The Group’s business is dependent on the many blessings of nature (ecosystem services), including
agricultural products, livestock, marine products, wood, and water in addition to soil, forests, and seasonal
weather. That said, our business activities also impact the natural environment in various ways, such as
GHG emissions, waste emissions, and wastewater. We recognize the importance of understanding andresponding to the correlation between our business activities and the natural environment—specificallytheir dependencies and impacts on each other.

- 34 -

<Relationship between business activities and ecosystem services>(b) Evaluating nature-related issues based on the LEAP* approach
The LEAP Approach is an TNFD recommended, integrated process for assessing nature-related issues,
including contact points with nature, evaluating dependencies and impacts, and assessing risk andopportunities.
In fiscal 2023, Daimaru Matsuzakaya Department Stores Co., Ltd.—the Group’s main operatingcompany—used the LEAP approach to identify and assess nature-related issues (dependencies/impacts,
risks/opportunities) at its 15 department stores throughout Japan.
*

LEAP: stands for Locate, Evaluate, Assess, Prepare(i)Outward appearance of dependencies and impacts (Locate)
We used ENCORE—a TNFD-recommended tool for identifying interdependencies and impacts onnature—to identify interdependencies and impacts throughout the value chain in our Department StoreBusiness and create a heat map to verify the degree of dependencies and impacts on natural capital bydirect operations (store management and development) and upstream in the value chain (procurement).

(ii) Identification of stores to assess for risks and opportunities (Locate)
We used Risk Filter Suite (WWF’s tool for analyzing risk in ecosystems and water), Aqueduct (WRI’s
water risk analysis tool), and other tools to verify the state of ecosystems in areas where our stores arelocated, and also conducted an importance evaluation in conjunction with our own standards forownership of land and buildings, scale of sales, and the like. As a result, we identified the Daimaru
Shinsaibashi store as one of particularly high importance for biodiversity preservation.
(iii) Sorting out factors behind dependencies and impacts on nature (Evaluate)
We sorted out factors in the context of the business activities of the Daimaru Shinsaibashi store forstore development, clothing and food products, and packaging materials, which involve major
dependencies and impacts on ecosystem services in the value chain.

- 35 -

(iv) Assessment of risks and opportunities, preparation of countermeasures (Assess, Prepare)
Based on the dependencies and impacts on ecosystem services at the Daimaru Shinsaibashi store sorted
out in the first three steps, we identified and assessed nature-related risks and opportunities that impact
our business activities and considered actions to address them. We also qualitatively assessed impacts
on business activities based on two criteria—importance to the Company and importance tostakeholders—and rated the impact on a three-point scale (major, moderate, minor).
<Assessing risks and opportunities, preparing countermeasures>
Item

Description of risk/opportunity
Acute

Physical
Chronic

ImpactDescription of activities

・ Decrease in profits due to store
closures caused by increasingly
frequent extreme weather eventsand natural disasters

Major

・ Increased resilience of stores andbusiness sites through BCP preparation
・ Improvement of disaster prevention
performance of stores

・ Increase in energy costs associatedwith global warming

Moderate

・ Replacement of existing equipmentwith high-efficiency energy-saving
equipment at the appropriate time・ Destabilization of profits due todecrease in the number ofagricultural and marine products
offered due to crop failures, poor
・ Discussion and strategy development
Moderatequality, and lower yields
for procurement risks of important
ingredients・ Decrease in store visitors andchanges in sales items due to global
warming and changes in rainfall
patterns
Moderate

・ Reduction of GHG emissions throughaggressive energy conservation
measures in stores and expansion ofrenewable energy switching

Minor

・ Expanded use of timber from forest
thinning in Japan・ Decrease in profits due to inability
to meet rising consumer demand
for sustainable products

Major

・ Expanded handling of certified products
and other environmentally friendly
products
・ Switchover to FSC-certified and otherenvironmentally friendly packaging
materials
・ Promoting the selection of smart
wrapping and simple packaging

・ Loss of reputation due toinsufficient procurement of
products manufactured using
sustainable methods

・ Expanded handling of certified products
Moderate ・ Smart delivery (reduce the number ofdeliveries)

・ Reputation suffers due to increasein or improper disposal of waste

・ Introduction of AI demand forecasting
service to reduce food waste
・ Compost community activities byModerate
employees to reduce food waste
・ Proper response to plastic recycling
legislation

・ Decrease in costs associated withmore efficient water use

Minor

Policy and ・ Increase in costs due to stronger
regulations
regulations on GHG emissions
・ Difficulty in store development(including exteriors, interiors,
additions, and reconstruction) due
to construction material shortages,
increase in construction-related
costs

Risk

MarketTransition

Reputation

Opportunity

Resource efficiency- 36 -

・ Use of rainwater, gray water
・ Use of water-saving equipment

Item

Description of risk/opportunity

ImpactDescription of activities

Major

・ Encourage establishment ofprocurement rules and acquisition ofcertifications (e.g. CASBEE, ZEB), andbroadly promote accomplishments

Major

・ Expanded handling of certified products・ Raising awareness and educating
customers about certified products・ Store operations are
sustained/maintained throughmitigation of violent storms,
typhoons, etc.

Major

・ Environmental improvement to enjoy
ecosystem services (e.g. creating rules
after ascertaining location, vegetation,
climatology)

・ Increase in customer traffic due toreal estate development and store
operation (land use) focused on
biodiversity and landscape

Moderate

・ Rooftop greening, rooftop urban
beekeeping

・ Increase in financing ability due tohigher environmental value ofbuildings

Major

・ Acquisition of environmental
certifications for newly developed
properties
・ Financing through Green Bonds, etc.

・ Improvement in reputation by
providing rooftop gardens andother rest areas

Moderate

・ Rooftop greening, rooftop urban
beekeeping

・ Improvement in reputation bypromoting recycling-oriented
business

・ Establishment of partnerships withother companies to recycle waste plastic
Moderateand food waste (e.g. POOL Project,
Made-in-Japan SAF Project)

Ecosystem
preservation,
restoration, andregeneration

・ Decrease in compliance costs byimproving traceability of products(especially risk commodities)

Minor・ Strengthening engagement withcustomers, for example throughassessments

Sustainable use ofnatural resources

・ Improvement of store brand value
associated with decrease in paper
product usage and increase inalternative material usage

Minor・ Switchover to FSC-certified and otherenvironmentally friendly packaging
materials
・ Going paperless

・ Increase in property value ofbuildings due to real estatedevelopment based on sustainable
material procurement and reduced
energy consumption
Products and services
・ Increase in profits associated withincrease in handling of certified
products/products manufactured
using sustainable methods

MarketCapital flow andfundraising

Reputation(iv) Metrics and targets
The Group recognizes that biodiversity loss and climate change are inseparable issues, and has establishedmetrics and targets to comprehensively resolve both issues.
<Metrics and targets used by the JFR Group to manage nature-related risks and opportunities>
Metrics
GHG emissions
Ratio of renewable energy

Target year

Details of targets

Please see “(2) Addressing climate-related issues (TCFD disclosures), (iv) Metrics andtargets.”

Food recycling rate

2030

85%

Development of environmentallyfriendly products

2030

Expand transaction volume of environmentally friendly products (including
certified products)

Rate of acquisition ofenvironmental certifications for
newly developed properties

2030

100%

Looking ahead, we will prioritize and expand the scope of our initiatives and conduct biodiversity
assessments and otherwise communicate proactively with major suppliers to improve the effectiveness of
our efforts toward nature positivity. We will also work to raise customer awareness, for example byexpanding our handling of certified products.
- 37 -

*We will disclose details about climate- and nature-related issues in our TCFD and TNFD reports
scheduled for release at a later date.

(4) Approach to human capital
Uncertainty is on the rise as technology and other elements surrounding the Company advance and change atever-increasing speeds. Amid such circumstances, we believe our human resources are the only ones who cancarve a path for the Group’s future.
We consider our employees as our most important partners in value co-creation. Accordingly, we intend toachieve the Group vision by making the “realization of employee Will” the driving force of the Company’s
growth through the provision of systems and environments that support the full expression of each
employee’s Will (will, desire, and intrinsic motivation) and by providing career development and othergrowth support to maximize their potential.
<Concept of JFR’s human capital management>

・ Personnel management based on the philosophy of human resource capabilities
In fiscal 2019, we departed from a duty-based personnel system and began operating a personnel system
based on our principle of “human resource capabilities.” Our distinct human resource management systempromotes personal growth through work by properly assigning and evaluating our employees based on theirabilities, which we refer to as human resource capabilities. These capabilities encompass surface-levelaspects such as results, behavior, knowledge, and skills, as well as intangible abilities, including humanresource value, personal values, character, aspirations, and interests.

- 38 -

“Human capital value” comprises the perspective of<Definition of human resource capabilities>

reproducibility and versatility that leads to steadyresults and contributions under any circumstances(intention and motivation, learning ability,
innovation and creativity, influence, negotiation
ability, and development ability), and we have set therequired level for each stage.

(i) Governance
Please see “(1) JFR Group’s sustainability management goals, (i) Governance.”(ii) Risk management
In the future, if competition for human resources intensifies due to a shortage of workers caused by the
decline in the working population and the increased mobility of human resources, resulting in an increase in
the outflow of human resources or difficulty in acquiring excellent human resources, it may not only affectour business performance but also our evolution into the “Value Co-Creation Retailer Group” that we aim tobecome in 2030.
Our human resource strategy is to develop change leaders, support voluntary learning by employees, andpromote diversity, equity and inclusion to establish an environment where employees can experience growthand job satisfaction. We will also create a comfortable work environment while standing behind every
employee so that everyone can work with vigor in good physical and mental health.
(iii) Strategy
Human resource development policy
We support and accompany employees in learning and taking on challenges through the four processes of“Visualize,” “Gain Capabilities,” “Practice,” and “Extend” in the Will Realization Cycle, which starts fromthe will, drive, and intrinsic motivation of employees, and by implementing effective personnel measures foreach of these processes. In addition, we will accelerate this cycle by practicing the JFR WAY—ourimportant approach to achieving our vision.

- 39 -

<Will realization cycle of employees>(1) Support for self-discovery
Through high-quality one-on-one dialogues, we help each and every employee discover and express theirinherent will and develop their skills and careers in line with their characteristics and aspirations.
In addition, by educating managers who are our employees’ main supporters, we will promote the creationof a workplace with a high level of psychological safety, enhance dialogue skills to share true thoughts andfeelings, and improve their capabilities to maximize the strengths and individuality of employees.

(2) Provision of learning opportunities
We will expand open-type training programs, subsidize education and training expenses, and operate JFR
College—a self-learning portal site available to all Group employees—to support the autonomous careerand skills development of employees. These measures aim to create an environment where employees canlearn by their own initiative and choice, without being limited by job description or work location.
We will also engage in “Transformation Leader Development Training (T3 Training)” to nurture humanresources who will lead the transformation of their own organizations and the entire Group by working torealize their Will through practical work situations.

(3) Provision of opportunities to act
We provide various means for employees to take on challenges and put their Will into practice. Specifically,
we will promote the use of RED, in which employees work together with management to create new ideas,
and establish a variety of mechanisms (e.g., secondment to investee companies and others outside the- 40 -

Group, and open recruitment for Group companies) exploring completely new business domains for theCompany.

(4) Celebration of challenges
We believe that “taking on challenges” is a crucial factor in the process of growth for human resources. If achallenge is achieved, this will give employees confidence and energy to take on new challenges. Even if
the expected outcome is not realized, however, we believe that the insights and discoveries gained along theway will become important learning experiences that lead to the next challenge.
For this reason, while the Company focuses on results and achievements, we celebrate and value “thecourage of our employees to take on challenges.” We also believe that when an employee displays thisattitude and enthusiasm for taking on challenges, it will inspire those around them to do the same. By
spreading this enthusiasm widely throughout the company, the Will Realization Cycle for Employees willcontinue in a powerful way.
Internal environment improvement
・ Diversity, equity, and inclusion
We believe that incorporating a diverse range of individuality and converting it into organizational strengths
will lead to the realization of sustainable growth. To this end, we promote excellent young employees,
stimulate middle- and senior-level employees, and otherwise create an environment where all employees canutilize their unique strengths and flourish. Given that a majority of the Group’s employees are women, it isessential for us to further promote their participation. In addition to our efforts to improve the workplaceenvironment and reform working styles, we will also strengthen the formulation of development planstailored to individual employees and promote regular follow-up after appointment to management positions.
We will also eliminate unconscious bias stemming from age, sex, work styles, and other factors, andpromote and assign roles in line with people’s strengths and aspirations.
・ Securing human resources
Securing and expanding the human resources capable of creating the three co-creation values is essential forour evolution into a “Value Co-creation Retailer Group.” Toward this end, we are striving to improve thehuman resource system and expand paths to employment at the Company, such as alumni and referrals, toenhance its recruiting capabilities.
Specifically, in addition to new graduates and young people, we have expanded our hiring targets toproactively acquire people with advanced expertise in real estate, banking and finance, and other areas. In
the retail business, we will focus on hiring people who can create new content and services by graspingcustomer needs, and digital human talent who can lead our digital transformation.
In parallel, we are also working on wage policies and work environment improvements to support theretention of human resources.
・ Promotion of physical and mental health
Physical and mental health are prerequisites for employees to remain energetic and take on challenges. We
support the creativity and productivity of employees by conducting periodic surveys, sharing the results withmanagement, departments, and employees, and carefully implementing the PDCA cycle of planning andexecuting actions that lead to improvement.
- 41 -

・ Reinforcement of the personnel systems
The human resources department plays a more important role than ever in maximizing the potential of every
employee. We enhance the expertise of the human resources department and promote operational efficiency
to help them respond quickly and appropriately to hiring, placement, training, evaluation and other realworld tasks. We are also striving to create a system that can contribute as a business partner to management
and business unit managers.
(iv) Metrics and targets
Metrics
Ratio of women in management
positions

FY2023 results
22.5%

FY2026 targets
31%

All employees

65.3%

Regular employees

74.4%

Non-regular
employees

72.7%

Reduce the gap by strengthening efforts to prevent
career loss, including career development and training
for women and management positions

Ratio of men taking childcare leave

87.5%

95%

Turnover rate

5.4%

5.3% or less

Gender wage gap*1 Ratio of women in management positions and gender wage gap calculated based on the provisions of the Act on the
Promotion of Women’s Active Engagement in Professional Life (Act No. 64 of 2015).
*2 Group totals, unless otherwise indicated.
*3 Gender wage gap shows the wages of female employees as a percentage of the wages of male employees.
*4 Metrics and targets as of May 2024; subject to addition or revision to align with future human resource strategy.

- 42 -

3. Business risks
The matters recorded in the annual securities report concerning the overview of business, financial information,etc. include the following key risks that are recognized by the management as having the potential to exert amaterial impact on the financial position, operating results, and cash flows of consolidated companies.
Forward-looking statements in this Annual Securities Report represent the judgment of the Group as of thefiling date of this document (May 29, 2024).

(1) Approach and system for risk management
・ Approach for risk management
The Group defines risk as “uncertainties that have both potentially 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 companywide 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 of the Company and the presidents
of major operating companies, as an advisory body to the President and Representative Executive
Officer. The committee discusses important matters, including risk identification and evaluation, andthe determination of risks to be reflected in strategies, and utilizes risk management for management
decision-making. The committee also reports details of its deliberations to the Board of Directors in atimely 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 contribute to corporate value.
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 that 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 that is independent of the operating
divisions and each division of a holding company.

Support and monitoring from the second line and independent oversight from the third line allow the
first line (operating divisions) to independently execute risk response through proper procedures andwithout delay.
- 43 -

(2) Processes and risk identification method
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 are based on the recognition of Directors, the management team, external
experts, and practical operation divisions.

Since we consider risk to be the starting point of strategy, we reviewed risks of high importance to theCompany and our method of identifying them predicated on the current Medium-term Business Plan.
Over the medium term, we have positioned “important risks for the JFR Group” (hereinafter referred to as“important risks for the Group”) as having extremely high importance for the Group’s management and haveused these as starting points for the Group Medium-term Business Plan.
We also broke down and specified “important risks for the Group” in terms of fiscal years, which, coupledwith risks that require individual attention in a given fiscal year (mainly operation risk, system response, andthe like), we refer to as “risks for the JFR Group’s fiscal year” (hereinafter referred to as “risks for theGroup’s fiscal year”), and prioritize and execute countermeasures accordingly.
For “risks for the Group’s fiscal year,” change in the environment surrounding risks and the progress ofmeasures are monitored semiannually, and the Risk Management Committee discusses the matters and thenreports their contents to the Board of Directors.

- 44 -

Risk identification method and PDCA

The chart below shows “important risks for the Group” that the Group has positioned as the most importantrisks that will affect growth and survival of the Group over the medium to long term.
Four of them—changes in industrial structure of existing business, intensification of competition for humanresources, acceleration of technology innovations, increasing importance of environmental issues—have an
extremely substantial impact on the Group’s management; we position these as priority risks to be addressedin the Medium-term Business Plan.

- 45 -

Overview of “important risks for the Group”
Asterisks (*) denote priority risks with an extremely substantial impact.

The following graphic shows how the current “important risks for the Group” are related to the former“important risks for the Group” through fiscal 2023. The risks have been revised in response to changing
circumstances, while also covering risks we have been addressing to date.
Important risks for the Group (from March 2024)

Previous important risks for the Group (until FY2023)
Advanced sustainability management●●

Changes in industrial structure of existing business

Decline of existing business models●●

Intensification of competition for human resources

Response to increasingly accelerated digitalization●●

Acceleration of technology innovations

Changes in consumer behavior after COVID-19●●

Increasing importance of environmental issues

Urban decentralization (Rebalancing between urban and●rural areas)●

Instability of economic trends

Accelerated income polarization●●

Declining birthrate, population aging, and increasing
income inequality

Changes in customers (low birthrate / longevity)●●

Diversification of consumers’ values and behavior

Uncertainty about non-Japanese market●●

Increased presence of non-Japanese consumers

Accelerated reorganization and M&A beyond industry
boundaries●●

Increasing inequality between cities

Frequent natural disasters / epidemics●●

Natural disasters and epidemics

Increasing importance of information security●

Increasing importance of financing management●

Emergence of geopolitical and geo-economic
risk●

Need for cost structure that can respond to environmental●
changesWork styles in new normal era and progress of●
HR/organization reforms

NEW

Increase in information security threats* Risks indicated in red are particularly important and are to
be addressed with the highest priority- 46 -

(3) Risks(i) Strategic risks

Changes in industrial structure of existing business
Impact: Very severe

Outlook for the future:(escalate greatly)

The industrial and profit structures that form the basis of our business operations are changing; for example,
competition in the industry is intensifying, e-commerce and other competitors and forms of business are entering
the scene, relations with suppliers are changing, consumer markets are shrinking and changes in consumer
Risk
recognition

behavior are progressing, and fixed costs are increasing and more variable. The industry of the Department StoreBusiness—the Group’s main business—is declining over the long term, making it difficult to maintain or increase
profits by doing nothing more than continuing to apply existing business models.
Building new business models and rearranging business portfolios in response to these structural changes present
opportunities to increase profits. However, failure to respond properly could compromise our performance andpresent accounting and tax risks (e.g. necessitate impairment of fixed assets).
The Group positions the current Medium-term Business Plan as a period of transformation to ensure substantial
growth by 2030, and aims for substantial growth by striving for profit growth through deepening of the core retailbusiness and pursuing Group synergies in three domains: customers, area, and content. Additionally, with an eye
toward 2030, we will promote growth strategies for the Developer Business and the Payment and FinanceBusiness as well as the retail business.

Measures

For growth strategy investments, with the aim of new growth in the retail business, we will promote thedevelopment and ownership of proprietary content, services, and more with an eye toward business expansion not
only domestically, but also overseas and in the digital domain. We will also promote M&As and new businessdevelopment based on our vision, and open innovation through CVC by cooperating with investees.
<Reference> Examples of specific efforts made to date
Corporate venture capital (CVC) activities: https://www.j-frontretailing.com/_data_json/news/_upload/221011_CVC.pdf (in Japanese)
Establishment of a “business succession fund”: https://www.j-frontretailing.com/_data_json/news/_upload/20240118jigyousyoukei.pdf (in Japanese)- 47 -

Intensification of competition for human resources
Impact: Very severe

Outlook for the future:(escalate greatly)

The decline of the working population is causing labor shortages and more transience of human resources thathave increased the ferocity of competition for human resources. Continuously securing human resources is a
Risk
recognition

requirement for sustainable management, and to reform our business portfolio, we require a dynamic humanresources portfolio linked thereto.
To continuously secure the required quality and quantity of human resources, we must make proper investments,
provide proper training, acquire (hire) new human resources, and improve mobility within the Company throughcareer development and reskilling for existing human resources.
Based on our distinct ideology of the power of human resources, we will make effective investments in humanresources to realize the human resources portfolio we need to execute our strategies. We will make proactive
investments to strengthen hiring of innovators and highly skilled human resources, promote exchange within theGroup through open recruiting, and develop human resources through career development, reskilling, and the like.
Specifically, for digital human resources, we will conduct internal training for managers and other employees andcontinue to develop “digital core human resources.” We will also continue efforts to offer competitive wages andMeasuresbenefits and create work environments that allow diverse human resources to flourish, regardless of characteristics
such as age or sex.
<Reference> Examples of specific efforts made to date
Experts hired: 218 (2023), 161 (2022), 103 (2021)
*

Ratio of women in management positions: 22.5% (2023), 22.2% (2022), 21.3% (2021)
For details about our approach to human capital, please see “2. Approach to and efforts for sustainability, (4)Approach to human capital.”

Acceleration of technology innovations
Impact: Very severe

Outlook for the future:(escalate greatly)

Of all the technology innovations with a substantial impact on business, generative AI has a particularly broad
Risk
recognition

scope of application and is changing the very nature of operations. Additionally, Web 3.0, XR, NFTs, and othernew digital technologies and services are changing consumers’ lifestyles, values, and communication, offering
potential for growth into prominent markets and impacting existing business models.
Using technology to establish new business models allows us to adapt to changing consumer behavior andcontributes to increased profits; however, failure to respond properly could delay business reforms and result inlost business opportunities, lower operational efficiency, and other problems.
The Group is introducing interactive generative AI for use in proprietary environments in an effort to streamline
and improve the effectiveness of operations. We are also making efforts to create new experience value by fusing
the real and digital worlds; for example, we have begun selling avatars and holding XR-based events at our
department stores and PARCO locations. Additionally, we have earned DX Certification (from METI), which
certifies that our efforts have prepared us for DX promotion for social reform using digital technology.

Measures<Reference> Examples of specific efforts made to date
Certified as a “DX-certified operator” by METI:

https://www.j-front-retailing.com/_data_json/news/_upload/202305010dx.pdf (in Japanese)
Daimaru Matsuzakaya Department Stores have begun selling avatars:

https://www.daimaru-matsuzakaya.com/assets/news/3d_12_22.pdf (in Japanese)
PARCO Digital Marketing XR media launch (Displaying event articles at stores):https://xr.parco-digital.co.jp/ (in Japanese)- 48 -

Increasing importance of environmental issues
Impact: Very severe

Risk

Outlook for the future:(escalate)

Global warming, marine pollution, loss of biodiversity, and other global environmental problems are becoming
increasingly severe, and we recognize that they impact corporate business activities over the long term.
Corporations must not only respond to these problems, but also create solutions-based businesses and take othersteps to fulfill active roles and contribute to creating a sustainable environment and society.
The Company considers climate change to be a key sustainability management issue, and is aiming for net zero*1
GHG emissions throughout the value chain by 2050. Specifically, we are working to reduce GHG emissions andpromote a circular economy toward realizing net zero emissions.
*1 To thoroughly reduce GHG emissions and reduce the remaining emissions to virtually zero after subtracting
the amount of emissions removed through forest absorption and CCS (CO2 capture and storage), etc.
<Reference> Examples of specific efforts made to date
Reducing GHG emissions
Reducing Scope 1 and 2 emissions (e.g. expanding conversions to renewable energy, transitioning to LED
lighting for stores and EVs for commercial vehicles)

Measures

Reducing Scope 3 emissions (holding briefings and otherwise encouraging suppliers)
Promotion of circular economy

Participating in the “Fry to Fly Project” aiming to manufacture made-in-Japan SAF from waste food oil:https://www.daimaru-matsuzakaya.com/assets/news/saf.pdf (in Japanese)“AnotherADdress” fashion subscription business: https://www.anotheraddress.jp/ (in Japanese)“ECOFF,” an initiative to collect, recycle, and reuse used clothing, etc.: https://dmdepart.jp/ecoff/about/ (in*Japanese)
For details about our response to environmental issues, please see “2. Approach to and efforts forsustainability, (2) Addressing climate-related issues (TCFD disclosures)” and “2. Approach to and efforts forsustainability, (3) Addressing nature-related issues (TNFD disclosures).”- 49 -

Declining birthrate, population aging, and increasing income inequality
Impact: Severe

Outlook for the future:(escalate)

Depopulation will cause the consumer population of Japan to decline, and over the medium and long term, theRiskrecognition

core of consumption will shift from younger Boomers to Millennials and Gen Zers (collectively, the “Generation
MZ”), a group with widely different values and behavior patterns from other generations. Additionally, as life
expectancy increases, the active senior market should expand, necessitating business operations tailored to seniors
who prefer different lifestyles from those we have come to expect for elderly people.
Income inequality is increasing worldwide, and polarization is progressing in Japan as well, necessitating speed
and strategy for properly accommodating target customers.
In today’s world, as consumption diversity advances, we are seeing a vanishing desire for uniformity in products
and services. As such, the Group will provide new value to all consumers who favor consuming high-quality
goods and having heart-lifting experiences that fulfill their own preferences and values (especially the Generation
MZ, the affluent market segment, and inbound tourists).
Accordingly, in addition to deepening our excellent customer base—one of the Company’s strengths—we will
expand connections with non-Japanese customers, the Generation MZ, and other new customers who will drive
consumption in Japan. To maximize regional value and expand our customer base by demonstrating groupsynergies mainly in the seven key areas* in which we have business foundations, we will strengthen and promote

Measuresthe Developer Business and Payment and Finance Business centered on the Department Store Business and the SC
Business. Furthermore, as an initiative for new business, we will acquire XENOZ CO., Ltd. to enter the e-sportsbusiness, which is popular with the Generation MZ, and strengthen collaboration with PARCO and others.
<Reference> Examples of specific efforts made to dateMaximize regional value and expand customer base by merging Daimaru Matsuzakaya and GINZA SIX
cards:
https://www.jfr-card.co.jp/corporate/news/20231006.pdf (in Japanese)
Acquisition of XENOZ CO., Ltd.:
https://www.j-front-retailing.com/_data_json/news/_upload/20221027esports.pdf (in Japanese)*

Sapporo, Tokyo, Nagoya, Kyoto, Osaka, Kobe, and Fukuoka- 50 -

Diversification of consumers’ values and behavior
Impact: Severe

Outlook for the future:(escalate)

Changes in consumers’ values are becoming more apparent amid the ongoing shift of the main consuming
generation. Consumption is diversifying, trending from owning to using, from convenience-based to emotional
Risk
recognition

narrative-based, toward experiences that can only be had in the present moment, and from competition to cocreation. Additionally, people are seeking sustainable economic activity. Consumer behavior processes are also
diversifying, and we have seen the emergence of consumers who wish to do all their consuming and enjoy all theirservices online. The recent surge in commodity and energy resource prices has also impacted customers’ appetite
for consumption.
If we can respond properly to these changes in consumers’ behavior and needs, we can improve our brand powerand seize opportunities to increase profits.
To respond to the aforementioned market changes and accommodate the next generation of customers, we willcontinue to strengthen luxury brands with robust support from Japanese and non-Japanese customers in addition tomodeling lifestyles; investing in renovations for beauty, health, and other areas; and strengthening thecompetitiveness of stores in all regions. Plans include major renovations for luxury and other new fashion andlifestyle modeling at the Matsuzakaya Nagoya store, the first major renovations at stores in Shibuya andShinsaibashi, introducing entertainment and pop culture zones at the Nagoya store, and more. Additionally, we are

Measuresexpanding the subscription business of Daimaru Matsuzakaya Department Stores to include art, frozen cuisine,and other categories in addition to the existing category of fashion.
<Reference> Examples of specific efforts made to date
Launched “Rakurich,” a frozen cuisine home delivery subscription service:

https://www.daimaru-matsuzakaya.com/assets/news/5_16.pdf (in Japanese)
Launched the PARCO game business:
https://www.parco.co.jp/pdf/jp/store/storage/cname_20230907152708.pdf (in Japanese)

Increased presence of non-Japanese consumers
Impact: Severe

Outlook for the future:(escalate)

In contrast to Japan’s ongoing low growth, emerging economies in Asia and elsewhere continue to experiencehigh growth. Mature cities in Asia have many major commercial facilities already, while in growing cities,
national-level growth is fueling a growing number of urban development, complex development projects, andRisk
recognition

more. Other signs point to the growing importance of Asia as a driver of consumption, including an increasing
affluent market segment and a rapidly expanding middle class in terms of both population and income.
Now that the COVID-19 pandemic is under control throughout the world, the non-Japanese consumer market
should expand.
Therefore, non-Japanese consumers are a major target for the Group, and turning our focus to properly
accommodating this market presents opportunities. However, we should also continue to devote energy to serving
Japanese customers in case inbound tourism drops off dramatically due to political strife or other circumstances.
Acquiring the non-Japanese consumer market is an essential issue for future growth; to promote the staying powerof this segment, the Company established a new dedicated department for overseas business. We are also taking
steps to strengthen luxury brands with robust support from Japanese and non-Japanese customers and other areas
to steadily capture burgeoning inbound demand, in addition to promoting the development and ownership of

Measurescontent and services that allow us to expand business overseas and in the digital domain. Meanwhile, we willcontinue to make efforts to expand our Japanese customer base.
<Reference> Examples of specific efforts made to dateCollaborating with other companies to strengthen our approach to the affluent non-Japanese market:
https://www.j-frontretailing.com/_data_json/news/_upload/7bf3b433bca8fb939f2f086f494d305128d9d56a.pdf (in Japanese)- 51 -

Increasing inequality between cities
Impact: Severe

Outlook for the future:(escalate)

Amid ongoing depopulation, birthrate decline, and population aging in Japan, people are continuing to move into
Tokyo, Osaka, Nagoya, and other major cities, expanding job opportunities and markets in those cities, but also

Risk
recognition

increasing inequality when compared to the working populations and economies of other cities.
Urban areas require disaster risk reduction and mitigation, business continuity planning, and other infrastructure
improvements to enhance safety with respect to natural disasters and aging infrastructure; however, they also
require comfortable, environmentally friendly housing and cultural coexistence.
If the JFR Group can collaborate with local governments, NPOs, and other organizations in cities and participate
in building communities and resolving their issues, it will be possible both for communities to advance and for theGroup to expand its profits.
To enhance our Developer Business, the Group established J. FRONT CITY DEVELOPMENT Co., Ltd. in
March 2023 and promotes the following types of efforts.
Measures

Promoting development to update the attractiveness of seven major cities in which the Group has locations(major complex development and other construction work in the “Nishiki 3-chome” area of the Sakae district

of Nagoya and the Shinsaibashi area of Osaka scheduled for completion in 2026)
Development of complexes featuring commercial facilities as well as office space, hotel accommodations,

residences, and more with the aim of co-prosperity with local communities
Proactive efforts to acquire environmental certification for new facility development with the aim ofcoexisting with the environment<Reference> Examples of specific efforts made to date“Nishiki 3-chome District 25 project (tentative name)” in Nagoya:https://www.parco.co.jp/news/detail/?id=2573 (in Japanese)

Shinsaibashi project:https://www.j-front-retailing.com/_data_json/news/_upload/20220510shinsaibashi_p.pdf (in Japanese)(ii) Financial risks

Instability of economic trends
Impact: Severe

Outlook for the future:(escalate)

The Japanese economy is impacted by the global economy; exchange rates, interest rates, stock prices, and otherindicators are extremely unpredictable, with interest rates having a particularly outsized effect on the Developer
Risk
recognition

Business handled by J. FRONT CITY DEVELOPMENT. When considering and implementing measures inthese highly uncertain economic circumstances, the JFR Group must formulate multiple scenarios and respondflexibly.
If we respond properly, we can expand opportunities for profit and reduce risks. Failure to respond properly may
cost us opportunities for profit, increase the cost of capital, and have other negative impacts.
Additionally, failure to procure funding for new investments, refinancing existing interest-bearing debts,
operations, and the like could delay business portfolio reforms and result in contracted business activities.
Considering the characteristics of our business, we mainly procure long-term funding at fixed interest rates;
therefore, we are not subject to sudden increases in interest expenses due to rising interest rates or othersubstantial short-term effects.

Measures

However, given rising interest rates, we are seeing an increase in interest expenses when we secure funding forinvesting in future growth strategies and refinance existing interest-bearing debts. In the new funding phase, wewill work on measures to minimize financing costs, for example by appropriately selecting funding measures.
Additionally, in terms of strategy, we are constantly monitoring fluctuations and their impacts, and will revise
the Medium-term Business Plan and reflect our findings in policy for the following fiscal year as necessary.

- 52 -

(iii) Hazard risks

Natural disasters and epidemics
Impact: Very severe

Outlook for the future:(remain important)

The risk of huge earthquakes, such as the Nankai Trough earthquake or an earthquake directly under the Tokyo
metropolitan area, is increasing. Natural disasters caused by extreme weather events, such as giant typhoons andtorrential rains, are increasing in both frequency and scale of damage.
Riskrecognition

Although control of COVID-19 is within sight, new epidemics and similar pandemics are still possible.
If such risks materialize and cause serious disruptions to business operations, such as human casualties,
suspension of business activities, disruption of supply chains, or costs associated with facility renovations, theGroup could be substantially affected. We must envision what will happen when risks emerge and implement
proper measures and drills in advance.
In response to natural disasters and other risks that threaten the continuity of our business, we are developing
systems for sustaining operations in terms of securing the necessary operations (e.g. funding, payment
operations) and infrastructure (e.g. systems) based on business continuity plans, enhancing those plans (forexample, by developing a manual to guide the response after an eruption of Mount Fuji), regularly implementing

Measures

BCP drills at our operating companies, and taking other steps to improve the capacity and effectiveness of our
response to a wide range of crises.
As for infectious diseases, the Company will respond based on its “New Infectious Disease Response Manual,”
which stipulates items related to ensuring the safety of human life, minimizing the impact on business, andpreparing systems during normal times.

Emergence of geopolitical and geo-economic risk
Impact: Severe

Outlook for the future:(escalate)

Geopolitical risks other than the conflict in Ukraine are emerging. These risks have an increasing effect oftrapping resources, food, cutting-edge technology, and other benefits within national borders, and are impacting
Risk
recognitioncommodity prices, supply chains, and consumer trends.
To ensure safety and security for our overseas employees as uncertainty mounts throughout the world, it isessential for us to monitor global trends and use our findings to formulate plans and conduct drills to prepare.
We must envision what could happen and be prepared before it does so that we can take the proper actions at theright times when risks emerge.
We will establish an overseas risk management system and enhance response capacity in line with the risk
environments and circumstances at our employees’ overseas postings and business trip destinations. We will also
revise the business continuity plans of our operating companies with locations and employees stationed outside
Japan (e.g. Daimaru Matsuzakaya, Daimaru Kogyo, PARCO). Specifically, we will establish a new action plan

Measuresthat sets out responses to incidents in East Asia—where the Group has locations—and sustain and strengthencountermeasures, namely revising our manual for overseas safety measures and other steps to ensure the safetyof our overseas employees.
In terms of strategy, we will constantly monitor factors of instability and their impact on business, and reflect ourfindings in policy for the following fiscal year as necessary and change measures accordingly.

- 53 -

Increase in information security threats
Impact: Severe

Outlook for the future:(escalate)

While remote work has been established and operations using cloud computing and mobile devices are
expanding, cyberattacks, unauthorized access, and other methods are rapidly diversifying and becoming moresophisticated, making the cyber risks surrounding the Group even more serious. In addition, the Group holds alarge amount of customer and personal information, making it essential to introduce more robust systems andRiskrecognition

system security measures for storing and handling information.
If risks, such as external leakage of critical information or large-scale service outages, were to materialize due toexternal attacks, human error, or inadequate management by contractors, the Group could lose credibility, or its
performance and financial position could be affected, depending on the scale of the damage. We must improveand enhance our information security management while ensuring that our employees have the correctknowledge and act appropriately.
To ensure information security, the Group promotes efforts under the following course of action.
Establish organizations dedicated to information security. Integrate IT organizations within the Group andestablish system environments that facilitate the demonstration of organizational capabilities

Prevent infiltration of internal networks by unauthorized equipment brought in by employees by integrating,developing, and enhancing Group infrastructure, establishing safe information system operations and highlyrobust security, and switching to internal Wi-Fi with enhanced security
Promote advancement of security operations, such as enhancement of the monitoring system using new
solutions and external monitoring services, the expansion of the scope of vulnerability management, and theimprovement of the response quality to prevent information leaks, etc.

MeasuresStrengthen the management structure for systems delegated to outside entities
Promote the proper operation of IT governance, for example improving system investment-related
operation, institutionalizing new IT asset management-related operation, and considering IT business
continuity plans



Revise Group security guidelines, strengthen security incident response systems
Improve employees’ security awareness and literacy by conducting incident response training for IT
personnel and ongoing information security e-learning and targeted attack e-mail training for all employees- 54 -

Category

List of important risks for the JFR Group

Item

ImpactChanges in industrial
structure of existing
businessVerysevereStrategy

Intensification ofcompetition forhuman resources

Negative side

Positive side

Measures・Decreased vitality ofthe entire Group due
to weak performanceof large-scale storebased retail business・Loss ofcompetitiveness inattracting humanresources, outflow oftalented humanresources
・Decrease inemployee motivation
・Sluggish growth ofthe entire Group・Declining
competitiveness due
to delay use oftechnology

・Regrowth by radical
change of thebusiness model oflarge-scale storebased retail business・Promotion ofbusiness strategy;
creation of
innovation
・Increase in employee
engagement andorganizational
capability
・Transformation ofbusiness modelthrough use oftechnology
・Operation
streamlining

・Strengthen existing businesses anddevelop businesses to transform thebusiness portfolio
・Invest through M&As and CVC basedon our vision

Acceleration oftechnology
innovations

VerysevereIncreasing importanceof environmental
issuesVerysevere・Defection of
stakeholders andlower rating andbrand power

・Sustainable growthand improvement of
the Group’s presence

Declining birthrate,
population aging, andincreasing income
inequality

Major

・Shrinkage ofdomestic market
scale
・Contraction of highvolume sector, theexisting target

・Expansion of newmarkets throughtargetaccommodation

Diversification of
consumers’ values andbehavior

Major

・Decrease in sales andprofit・Expansion of newmarkets

Major

・Delays inincorporating
inbound tourism
・Sudden decrease in
inbound tourism

・Expansion of
inbound sales
・Capture foreign
demand by
developing ecommerce, etc.

Major

・Decline in urban
commercial facilities’ability to attract
customers

・Businessdevelopment throughcontribution to urban
needs and urban
development

Major

・Loss of opportunities
for profit
・Increased cost ofcapital・Promotion of growthstrategies andbusiness portfoliochanges・Lowered cost ofcapitalIncreased presence of
non-Japanese
consumers

Increasing inequality
between cities

FinanceVerysevereOutlook
for thefutureInstability of
economic trends- 55 -

・Recruit professional human resources,group personnel exchanges,
development
・Realization of Well-Being Life of
employees through investment in
human resources
・Utilization of Group database・Operation streamlining through AI
utilization
・Building business models for Web 3.0,
XR, NFTs, and other new markets
・Developing digital human resources
・Reducing GHG emissions
・Expand handling of environmentallyfriendly products and services
・Expansion of circular businesses such as
sharing and upcycling
・Approach consumers who favor
consuming high-quality goods andhaving heart-lifting experiences that
fulfill their own preferences and values
・Expand customer/business base to reachthe aforementioned target
・Promote measures in line with thevalues of consumers who favor
consuming high-quality goods andhaving heart-lifting experiences that
fulfill their own preferences and values(e.g. subscription business, homedelivery business, entertainment, pop
culture)・Sustain and strengthen categories of
products with robust support fromJapanese and non-Japanese customers
・Promote development and ownership ofcontent that allows us to expand in thedigital domain outside Japan・Ongoing efforts to expand the Japanesecustomer base・Participate in community-building incollaboration with local governments
and other organizations in the Group’s
major locations (e.g. commercial
facilities, office space, hotel
accommodations, residences)
・Long-term funding at fixed interest rates
・Selection of appropriate financing
measures during the new funding phaseCategory

Item

Hazards

Natural disasters andepidemics

Emergence ofgeopolitical and geoeconomic risk

Increase in
information security
threats

ImpactOutlook
for thefutureNegative side

Positive sideVerysevere・Damage to the livesof customers andemployees
・Business continuity
crisis・Stable business
operations

Major

・Danger anddifficulties in life for
employees stationed
overseas (or on
business trips)

・Stable overseas
business operations

Major

・Occurrence of
personal information
leaks, lawsuits, andliability for damages,
loss of social trust・Delay/stagnation ofoperations

・Stable running ofoperations andsystems
・Operation
streamlining andpromotion of remoteworkMeasures・Continuously implementing practical
BCP training
・Periodic reviews of business continuity
plans
・Strengthen preparation for new
pandemics
・Establish and promote an overseas risk
management system in line with the risk
environments and circumstances at ouremployees’ overseas postings andbusiness trip destinations
・Monitor impact on the Company’sbusiness (especially overseas business)・Develop and upgrade the Group’scommon system infrastructure
・Promoting sophistication of security
operations and strengthening the
response system
・Reviewing Group security guidelines
and improving employee security
awareness and understanding throughtraining

Impact: Consideration of economic impact on the Group and impact on brand value during the period of the Medium-term Business
Plan
Outlook for the future: Projected changes to risks during the period of the Medium-term Business Plan taking into account theseverity of their impact on the Group:

Risks that have an extremely heavy impact and are given priority

When a risk bridges multiple categories, we placed it in the category with the highest impact and relevance to the Group’s strategies- 56 -

4. 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 29, 2024

Against Octoberforecasts

Year-on-year changes

Gross sales

1,151,972

153,217

Change inpercentage
15.3

Revenue

407,006

47,327

13.2

1,506

Gross profit
Selling, general andadministrative expenses
Business profit

195,516

25,980

15.3

3,016

151,185

6,503

4.5

1,185

44,33019,476

78.4

1,830

Other operating income

3,673

(867)

(19.1)

473

Other operating expenses

4,955(5,381)(52.1)(745)

Operating profit
Profit attributable to ownersof parent

43,04823,989

125.9

3,048

29,913

15,676

110.1

2,913

Change in amount

Change in amount
20,972

During the fiscal year under review, the Japanese economy continued to experience a moderate recovery driven
mainly by growth in service consumption and inbound demand in the context of the progressive normalizationof social and economic activities, which overcame rising uncertainty caused by the increasingly unstableinternational situation and slowdowns in overseas economies.
Regarding personal spending, as improvements in the employment and income environments continued, inperson services and the like grew, but price increases pushed down real wages, preventing the recovery fromgaining momentum as the rally in consumption appeared to stall.
Since fiscal 2021 the Company has been promoting the Medium-term Business Plan (FY2021–FY2023), which
positions sustainability at the core of management. During the current Medium-term Business Plan, we haveachieved a “complete recovery” from the COVID-19 pandemic, positioned the period beginning in fiscal 2024
as a time of “regrowth,” and focused mainly on our three key strategies, on management structure reforms, andon strengthening the management foundation to support medium- to long-term growth.
During the fiscal year under review, the final fiscal year under the current Medium-term Business Plan, we
steadily promoted the key strategies and measures established by the Medium-term Business Plan to achieve“regrowth” from fiscal 2024 onward, having created a strong foothold for “complete recovery” to ensure that
we captured domestic consumption, which is continuing to recover, and inbound demand.
In terms of initiatives for sustainability, we have worked to resolve environmental and social issues mainly
through activities that integrate our seven materiality issues (key issues) with the key strategies.
Although the effects of COVID-19 continued for longer than expected, the results of the above initiatives
enabled us to more or less achieve our key performance indicator targets set under the current Medium-term
Business Plan, including that for consolidated operating profit (¥40,300 million), and led to improvements in
our financial standing, mainly through reductions in interest-bearing liabilities.
In parallel with the promotion of strategies to achieve the targets of the current Medium-term Business Plan, we
have formulated a Group vision for 2030, as well as the next Medium-term Business Plan (FY2024–FY2026),
which begins in fiscal 2024. In addition, we made the decision to adopt a new management system under whichto launch the next Medium-term Business Plan, with the objective of further strengthening Group management
and enhancing corporate value.
In addition to making strategic investments in the Department Store Business and the SC Business based on our“Real x Digital Strategy,” by expanding key categories and carrying out renovations centered on flagship stores
to increase the attractiveness of real stores, we have strengthened promotions aimed at increasing the value of- 57 -

visiting our stores, which includes the holding of large-scale mobilization events. Our use of digital technology
has entailed the expansion of online businesses such as subscription services, and the digitalization of customer
contact points through the use of apps and other measures to build strong relationships with customers.
Under our Prime Life Strategy, to enhance our response to the affluent market segment, based largely on
department store gaisho (out-of-store sales), we have expanded our key categories, developed merchandise andservices with scarcity value, both in-store and online, and worked to expand our customer base by winning newcustomers.
In terms of our Developer Strategy, under the new business promotion framework launched during the fiscal
year under review, we formulated and promoted long-term development plans centered in the key areas ofseven cities in which the Company maintains its business foundation, such as Nagoya’s Sakae area and Osaka’s
Shinsaibashi area, to which we have recently added Fukuoka’s Tenjin area. We also entered the residential realestate business to use our real estate holdings effectively, and promoted the development of properties.
In our management structure reforms, we have succeeded in reducing costs more than initially planned byreviewing our outsourcing and digitalizing our advertising methods in addition to effects from organizational
and personnel structure reforms to reduce fixed costs. As a means of further improving management efficiency,
we transferred to another entity all shares held by the Company in StylingLife Holdings Inc. As a result, thesaid company has been removed from being an equity method associate of the Company. We ceased operationsof Shintokorozawa PARCO at the end of February 2024.
In addition to promoting these strategies, looking ahead to the reform of the business portfolio and to launching
new businesses through co-creation with other companies we took equity stakes in Financie, Inc. and QON Inc.,as well as investing in eight other companies through a CVC (corporate venture capital) fund. Additionally,
based on the concept of “coexistence with local communities” that is a key sustainability issue for theCompany, we have established a business succession fund in collaboration with another company in March
2024, with the objectives of contributing to local communities as well as unearthing, and ensuring thecontinuation of, products and services that are deeply rooted in their regions of origin.
Under the Group human resources strategy, not only are we strengthening recruitment of highly specialized
professionals and enhancing skills development programs at the holding company and individual businesses,
but we are also working on Group-wide human resources development initiatives, such as the systematic
nurturing of digital human resources and the promotion of active participation by mid-career and younger
employees. We also promoted open recruitment and placement to reflect the intentions and desires of ouremployees, and actively facilitated personnel interaction to improve the diversity of our organizations andpersonnel.
In accordance with the Group financial strategy, we worked to improve our financial standing through measuresthat took into account changes in the business environment and the outlook going forward, including optimizing
the balance of cash and deposits, and reducing interest-bearing liabilities. Looking ahead to the next Mediumterm Business Plan, we have also formulated a medium- to long-term financial policy.
Under our Group systems strategy, in addition to supporting the promotion of key strategies in each business,
we promoted the deployment among operating companies of a common accounting system for the Group, withthe objective of enhancing management and administration and raising its productivity, and also strengthened
our ability to handle both information security and business continuity.
As a result of various measures, including those mentioned above, revenue was ¥407,006 million (up 13.2%
year on year) with respect to consolidated earnings for the current fiscal year. Business profit was ¥44,330
million, up 78.4% year on year, as a result of improvement in revenue, along with the effects from reduced
fixed costs and expenses. Operating profit was ¥43,048 million (up 125.9% year on year), partly due to thetransfer of shares of equity method associates while impairment losses were recorded at some branches of ourdepartment stores. Profit before tax was ¥41,343 million (up 145.0% year on year), and profit attributable toowners of parent was ¥29,913 million (up 110.1% year on year), demonstrating a large increase in profit.
Regarding dividends, the Company has decided to pay an annual dividend of ¥36 per share (¥31 in the previous
fiscal year), for an increase of ¥5 relative to the previous fiscal year.
- 58 -

Results by segment are as follows:
Due to the organizational restructuring effective March 1, 2023, real estate assets have been transferred fromPARCO Co., Ltd. to J. FRONT CITY DEVELOPMENT Co., Ltd. Accordingly, they have been retroactively
adjusted as if the transfer had been effective from the beginning of the previous fiscal year (March 1, 2022).
Business results by segment<Department Store Business>(Millions of yen, %)Fiscal year ended
February 29, 2024

Against Octoberforecasts

Year-on-year changes

Revenue

239,125

23,371

Change inpercentage
10.8

Business profit

26,265

13,431

104.6

1,965

Operating profit

23,587

16,058

213.3

1,287

Change in amount

Change in amount
3,825

With social and economic activities progressively normalizing, in addition to the results of strategies andpolicies aimed mainly at the solid affluent market, we also saw further growth in revenue from foreign tourists
visiting Japan, resulting in a significant expansion of net sales.
By store, the Daimaru Shinsaibashi and Daimaru Kyoto stores, which had particularly strong sales from foreign
tourists visiting Japan, and the Daimaru Tokyo and Daimaru Sapporo stores, which are on terminal sites, saw
significant improvements in customer numbers and net sales.
In terms of executing key strategies, as well as programs centered on flagship stores involving renovations andthe strengthening of key categories, such as luxury brands and high-end watches, we worked to build a higherquality shopping experience through the introduction of lounges for regular customers and other measures. In
addition, to strengthen the online business, we worked on the creation of new customer experiences using
digital technologies, such as expanding subscription services for fashion, art and food. To achieve our goal ofbuilding strong relationships with customers, we also moved steadily forward with the digitalization ofcustomer contact points through the use of the Daimaru and Matsuzakaya app, as well as implementing
measures for real stores.
As a result of various measures, including those mentioned above, revenue was ¥239,125 million (up 10.8%
year on year). Operating profit was ¥23,587 million (up 213.3% year on year) despite an increase in variable
costs associated with the improvement of revenue, demonstrating a large increase in profit.

- 59 -

<SC Business>(Millions of yen, %)Fiscal year ended
February 29, 2024

Against Octoberforecasts

Year-on-year changes
Change in amount

Change inpercentage

Change in amount

Revenue

57,944

4,165

7.7

(508)

Business profit

8,379

2,525

43.1

1,189

Operating profit

9,414

5,170

121.8

1,316

The number of customers visiting stores and tenant transaction volume increased primarily due to the effects ofstrategic remodeling centering on flagship stores and promotions such as unified plans for all stores, and anincrease in the number of foreign tourists visiting Japan, including those visiting Shibuya PARCO and
Shinsaibashi PARCO.
To increase the attractiveness of stores based on our key strategies, we promoted strategic innovations such as
the creation of zones that integrate a number of high-profile entertainment shops at Ikebukuro PARCO, and the
expansion of unisex and women’s elements and the revamp of common areas at Nagoya PARCO. We also
welcomed tenants at Urawa PARCO under the themes of “proposing charming and quality lifestyles” and“comfortable daily living.” Furthermore, to increase the value of visiting stores, we worked on PARCO’s own
promotion, such as by developing large-scale mobilization events for popular TV anime, and for Shibuya
PARCO, which is celebrating its 50th anniversary, we held an exhibition titled “The Advertisements(Advertising PARCO) 1969–2023” covering the history of creative advertising spanning over half a century. We
ceased operations of Shintokorozawa PARCO at the end of February 2024.
As a result of various measures, including those mentioned above, revenue was ¥57,944 million (up 7.7% year
on year). Operating profit was ¥9,414 million (up 121.8% year on year) due to the improved revenue and a gainon sales of our properties, demonstrating a large increase in profit.

<Developer Business>(Millions of yen, %)Fiscal year ended
February 29, 2024

Against Octoberforecasts

Year-on-year changes

Revenue

78,41823,166

Change inpercentage
41.9

Business profit

7,546

5,070

204.7

546

Operating profit

7,437

4,253

133.5

337

Change in amount

Change in amount
2,518

Under our new business promotion framework launched in fiscal 2023, we worked on formulating medium- tolong-term development plans centered in the key areas of seven cities in which the Group maintains its businessfoundation, from the standpoints of Group-wide optimization. Specifically, we promoted redevelopment plansslated for completion and opening in 2026 for Nishiki 3-chome District 25 (tentative name) in Nagoya’s Sakae
area, and the Shinsaibashi Project (tentative name) in Osaka’s Shinsaibashi area, as well as in Fukuoka’s Tenjin
area. In terms of development of non-commercial facilities using our assets, we completed the construction of
three residential properties in which the Company was involved.
In the construction and interior design business, we seized investment opportunities for redevelopment andstore expansion in cities, participated in development projects for hotels and other facilities, and worked tostrengthen marketing capabilities by growing orders mainly from specially selected brands.
As a result of various measures such as those mentioned above, revenue was ¥78,418 million (up 41.9% year
on year), due to increases in interior and facilities work inside and outside the Group, facilities management
contracting, and the sale of developed properties to a fund formed by the Company itself. As a result of theabove, operating profit was ¥7,437 million, up 133.5% year on year.
- 60 -

<Payment and Finance Business>(Millions of yen, %)Fiscal year ended
February 29, 2024

Against Octoberforecasts

Year-on-year changes
Change in amount

Change inpercentage

Change in amount

Revenue

13,115

226

1.8

(435)

Business profit

2,777

(709)

(20.4)(475)

Operating profit

2,583

(902)

(25.9)(574)

In the payment business, in addition to gaining members through cooperation with department stores, we
implemented special events aimed at raising awareness of our unique points program (QIRA Point). We also
worked to strengthen external affiliated stores through such measures as improving the payment environment inGroup commercial facilities, and collaborating with the facilities of other companies in areas adjacent to Group
stores. In the finance business, we promoted the development of new services for members through cooperationand collaboration with other companies.
As a result of the above efforts, revenue reached ¥13,115 million, up 1.8% year on year, but due in part toincreases in investment expenses, etc. aimed at expanding the business foundation, and costs associated with anincrease in unauthorized credit card use, operating profit was ¥2,583 million, down 25.9% year on year.

<Other>(Millions of yen, %)Fiscal year ended
February 29, 2024

Against Octoberforecasts

Year-on-year changes

51,925(3,997)

Change inpercentage(7.1)

Business profit

965

41

4.4

(435)

Operating profit

1,370

471

52.3

(330)

Revenue

Change in amount

Change in amount(4,475)In the Daimaru Kogyo business, a fall in orders in the mainstay electronic devices business, declining sales in
the overseas business, and other factors led to revenue falling to ¥51,925 million, down 7.1% year on year.
However, operating profit reached ¥1,370 million, up 52.3% year on year, due mainly to foreign exchange gain
and gain on sales of fixed assets.

- 61 -

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

As of February 28, 2023

As of February 29, 2024

Change in amount

201,860

246,501

44,641

919,092

868,225(50,867)

1,120,953

1,114,726(6,227)

Current liabilities

317,953

331,261

13,308Non-current liabilities

431,589389,232(42,357)

Total liabilities

749,542

720,494(29,048)

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

359,385

381,898

22,513

32.1

34.3

2.2

371,410394,232

22,822

Total assets

Total assets as of February 29, 2024 were ¥1,114,726 million, down ¥6,227 million compared with February 28,
2023. Total liabilities were ¥720,494 million, a decrease of ¥29,048 million compared with February 28, 2023.
Interest-bearing liabilities (including lease liabilities) were ¥364,398 million, down ¥49,551 million comparedwith February 28, 2023.
Total equity was ¥394,232 million, an increase of ¥22,822 million compared with February 28, 2023.

(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, 2023

Fiscal year ended
February 29, 2024

Change in amount

65,48090,692

25,212(13,371)

13,42926,80052,109104,12252,013(105,694)(72,746)

32,948(53,585)

31,37584,96039,874

71,342

31,468The balance of cash and cash equivalents (hereinafter “cash”) as of February 29, 2024, was ¥71,342 million, up¥31,468 million compared with February 28, 2023.
Cash flow positions in the current fiscal year and the factors for these are as follows.
Net cash provided by operating activities was ¥90,692 million. In comparison with the previous fiscal year,
cash provided increased by ¥25,212 million, largely due to an increase in profit before tax.
Net cash provided by investing activities was ¥13,429 million. In comparison with the previous fiscal year, cash
provided increased by ¥26,800 million despite making capital investments, mainly due to proceeds from salesof shares of subsidiaries accounted for using equity method and of investment property.
Net cash used in financing activities was ¥72,746 million. In comparison with the previous fiscal year, cashused decreased by ¥32,948 million despite ongoing repayment of interest-bearing liabilities during the fiscal
year under review.

- 62 -

(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
(%)

610

81.4

Production is not shown for contracted work because it is difficult to define production.
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 Business
Note:

1.

Year-on-year comparison(%)

62,915159.3

No items to report for segments other than above.

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

Sales(Millions of yen)

Daimaru Matsuzakaya
Department Stores

220,058

The Hakata Daimaru

15,701

111.5

Other

3,366

101.1

239,125110.8

57,868

107.7

75

117.9

Segment name

Department StoreBusiness

Total
PARCO
SC Business

Other

Developer Business

Total

57,944

107.7

19,381254.8

J. Front Design & Construction

35,902

127.6

PARCO SPACE SYSTEMS

21,982

120.8

Other

1,151

88.7

78,418141.9

13,115

101.8

Payment and Finance
JFR Card
Business
Wholesale

35,981

92.9

Other

15,94492.8

51,925

92.9

Total

Notes:

1.
2.

110.9

J. FRONT CITY
DEVELOPMENT

Total

Other

Year-on-year comparison(%)

Adjustments(33,523)

98.8

Total

407,006

113.2

Adjustments for inter-segment transactions are made in the adjustments column.
Sales amount shows revenue.

(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- 63 -

selection and application of accounting policies by the management and accounting estimates that
affect the 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) Revenue
Revenue increased by ¥47,327 million from the previous fiscal year to ¥407,006 million.
b) Operating profit
Operating profit increased by ¥23,989 million from the previous fiscal year to ¥43,048
million.
c) Profit before tax
Profit before tax increased by ¥24,470 million from the previous fiscal year to ¥41,343
million.
d) Profit attributable to owners of parent
Profit attributable to owners of parent increased by ¥15,676 million from the previous fiscal
year to ¥29,913 million.
e) Financial position
Total assets as of February 29, 2024, were ¥1,114,726 million, down ¥6,227 million comparedwith February 28, 2023. Total liabilities were ¥720,494 million, a decrease of ¥29,048 million
compared with February 28, 2023. Interest-bearing liabilities (including lease liabilities) were¥364,398 million, down ¥49,551 million compared with February 28, 2023. Total equity was¥394,232 million, an increase of ¥22,822 million compared with February 28, 2023. As aresult, operating profit/total assets (ROA) was 3.9%, profit/shareholders’ equity (ROE) was
8.1%, and the ratio of equity attributable to owners of parent to total assets was 34.3%.
f) Cash flows
Net cash provided by operating activities was ¥90,692 million. Net cash used in investing
activities was ¥13,429 million, and net cash used in financing activities was ¥72,746 million.
As a result, the balance of cash and cash equivalents as of February 29, 2024, was ¥71,342
million, up ¥31,468 million compared with February 28, 2023.
Looking forward, the Group plans to provide appropriate distribution of profit and capital
investment, giving consideration to the level of profit and cash flow trends among otherfactors.

- 64 -

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” 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 business profit and sustainable improvement of
the business 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 business 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 needed funding throughintra-Group financing using a cash management system.
Based on the above policy, the Company raised ¥3,400 million in long-term borrowings fromfinancial institutions during the current fiscal year. Meanwhile, with the repayment of ¥9,100
million in short-term borrowings and ¥29,500 million in long-term borrowings, our balance ofinterest-bearing liabilities (excluding lease liabilities) decreased by ¥35,100 million compared
to February 28, 2023 to ¥213,900 million.
Details on risks associated with financing are mentioned in “II. Overview of Business, 3.
Business risks.”(Financial policy)
Financial policies under the “FY2024–FY2026 Medium-term Business Plan” are described in“II. Overview of Business, 1. Management policy, management environment, issues to beaddressed, etc.”(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.”- 65 -

2) Achievement status of management goals
In fiscal 2023, the final year of the 2021–2023 Medium-term Business Plan, the results of the above
initiatives enabled us to more or less achieve our key performance indicator targets, including that for
consolidated operating profit (¥40,300 million), and led to improvements in our financial standing,mainly through reductions in interest-bearing liabilities.
Medium-term Business Plan
targets*1
Consolidated operating profit (IFRS)
Consolidated ROE

FY2023 results¥40,300 million¥43,048 million

7.0%

8.1%

Consolidated ROIC

5.0%

5.1%

GHG emissions*2(40.0)%(57.5)%

Ratio of women in management positions*3

26.0%

22.5%

*1 At the time of the plan’s formulation, the Company set the goals of achieving a “full recovery”
from the COVID-19 pandemic by returning the financial figures to FY2019 levels by FY2023, thefinal year of the plan, while at the same time positioning the plan period as one for getting back on
track for “regrowth” from FY2024 onward.
*2 Scope 1 and 2 reduction rate (compared with FY2017); result for FY2023 is a rough estimate as of
May 29, 2024.
(Reference) Scope 1 emissions: Direct emissions of greenhouse gases from an organization itself(gasoline for company vehicles, etc.)
Scope 2 emissions: Indirect emissions from the use of electricity, heat, or steam
provided by another company (electrical usage in stores andoffices, etc.)*3 Ratio of women in management positions: 26.2% as of March 1, 2024

As noted in “II. Overview of Business, 1. Management policy, management environment, issues to beaddressed, etc.,” the Company has formulated the “2024–2026 Medium-term Business Plan.” Under
the current Medium-term Business Plan, in addition to deepening the retail business in the Department
Store Business and the SC Business and evolving Group synergies in preparation for substantial
growth, we will focus on strengthening the Group’s management foundation to heighten theeffectiveness of these strategies, and make efforts to achieve the management goals.

- 66 -

5. 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.

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

- 67 -

III. Information About Facilities
1. Overview of capital expenditures, etc.
In the current fiscal year, total capital expenditures of ¥16,194 million were made, mainly in the SC Business andDepartment Store Business.
The breakdown by segment is as follows:
Capital expenditures(Millions of yen)Segment name
Department Store Business

6,751

SC Business

8,479

Developer Business

5,700

Payment and Finance Business

51

Other

584

Adjustments(5,374)
Total

Notes:

1.
2.

16,194

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

The main projects in the Department Store Business were the Matsuzakaya Nagoya store and the renovation of thesales floors in the Daimaru Sapporo store, while in the SC Business they included the acquisition of assets inconnection to PARCO_ya Ueno, and the acquisition of assets associated with the construction of HAB @Kumamoto. In the Developer Business they included the acquisition of assets associated with the construction of
parking facilities within condominiums developed by the Company, and investments in the renovation of store
interiors and upgrading facilities.
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 29, 2024
Carrying amounts(Millions of yen)

Office name
(Location)

Segment name

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

Corporate(Shared)

Note:

Facilities

Office, etc.

Buildings
andstructures

188

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

–
[–]

323

Other

–

Total

512

Number of
employees(Persons)

185

The number in the 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.

- 68 -[16]

(2) Domestic subsidiaries
As of February 29, 2024

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.

25,982

7,919
[11]

8,498

667

43,067200[71]

Department
Store
Business

Store, etc.

151

10,15531

10,339131[93]

Daimaru Tokyo store(Chiyoda-ku, Tokyo)

Department
Store
Business

Store, etc.

2,501

16,932

58

19,491

110[70]

Daimaru Kyoto store(Shimogyo-ku, Kyoto)

Department
Store
Business

Store, etc.

9,802

8,759
[10]

3,070

92

21,724201[136]

Daimaru Kobe store(Chuo-ku, Kobe)

Department
Store
Business

Store, etc.

7,272

1,693
[11]

12,124132

21,223

227[198]

Daimaru Suma store(Suma-ku, Kobe)

Department
Store
Business

Store, etc.

803

561

3

1,369

13
[3]

Daimaru Ashiya store(Ashiya, Hyogo)

Department
Store
Business

Store, etc.

11

650

–

661

8
[10]

Department
Store
Business

Store, etc.

7,055

12,696
[8]

122

72

19,947140[154]Store, etc.

–

1,302
[11]

0

–

1,303

50
[29]

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.

14,73065,919
[19]

7,670

165

88,486450[145]

Matsuzakaya Ueno store(Taito-ku, Tokyo)

Department
Store
Business

Store, etc.

3,564

27,718
[7]

579

14

31,877

159[39]

Matsuzakaya Shizuoka
store(Aoi-ku, Shizuoka)

Department
Store
Business

Store, etc.

3,599

6,628
[7]

57

98

10,38354[44]

Matsuzakaya Takatsuki
store(Takatsuki, Osaka)

Department
Store
Business

Store, etc.

1,187

3,738
[5]

2

30

4,958

10
[1]

GINZA SIX
(Chuo-ku, Tokyo)

Department
Store
Business

Store, etc.

13,411

82,660
[4]

208

258

96,5392[0]

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

Department
Store
Business

Office, etc.

2,111

4,317
[37]

526

78

7,033

923
[252]

Total

–

–

92,186

223,354[135]

61,1601,704

378,406

2,678[1,245]- 69 -

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

Store, etc.

5,032

7,101
[8]

7,231

–

19,365215[101]

Department
Store
Business

Store, etc.

809

414
[3]

393

72

1,689

52
[15]

Sapporo PARCO(Sapporo, Hokkaido)

SC BusinessStore, etc.

1,573

5,011
[2]

408

67

7,060

18
[4]

Sendai PARCO(Sendai, Miyagi)

SC BusinessStore, etc.

8,220

4,261
[2]

6,226

76

18,78518[1]Urawa PARCO(Saitama, Saitama)

SC BusinessStore, etc.

7,335

10,300[7]76

63

17,77618[2]

Ikebukuro PARCO(Toshima-ku, Tokyo)

SC BusinessStore, etc.

4,377

7,120
[1]

12,46558

24,021

21[5]

PARCO_ya Ueno
(Taito-ku, Tokyo)

SC BusinessStore, etc.

985

5,665

29

6,680

7
[1]

Kichijoji PARCO(Musashino, Tokyo)

SC BusinessStore, etc.

1,682

3,281

29

4,993

10
[4]

Shibuya PARCO(Shibuya-ku, Tokyo)

SC BusinessStore, etc.

16,718

1,406

705

53,77923[2]

Kinshicho PARCO(Sumida-ku, Tokyo)

SC BusinessStore, etc.

1,752

9,047

17

10,817

Chofu PARCO(Chofu, Tokyo)

SC BusinessStore, etc.

3,424

1,237

71

12,76315[2]SC BusinessStore, etc.

698

627

9

1,335

9
[1]

SC BusinessStore, etc.

5,612

6,261
[2]

7,991

89

19,95529[3]SC BusinessStore, etc.

12,87521,309
[4]

386

281

34,85321[3]

Hiroshima PARCOSC Business(Hiroshima, Hiroshima)

Store, etc.

2,886

5,580
[2]

2,355

101

10,92318[4]

Fukuoka PARCO(Fukuoka, Fukuoka)

SC BusinessStore, etc.

3,993

23,633
[3]

1,831

30

29,48917[–]

Shintokorozawa
PARCO(Tokorozawa, Saitama)

SC BusinessStore, etc.

636

1,706
[5]

50

2

2,397

Hibarigaoka PARCO(Nishi-Tokyo, Tokyo)

SC BusinessStore, etc.

350

1,365

3

1,719

Matsumoto PARCO(Matsumoto, Nagano)

SC BusinessStore, etc.

5

447
[3]

1

–

454

8
[2]

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

SC Business

Office, etc.

1,640

2,225
[3]

2,899

179

6,945

261
[76]

–

–

74,771130,835[49]

57,326

1,819

264,752493[110]

Developer
Business

Multi-tenantbuilding

10,67015,825[2]381–

26,878Developer
Business

Commercial
buildings,
rentalproperties,
etc.

10,64138,378[20]

14,996–64,016

65
[6]

–

–

21,312

54,204[23]

15,378–90,89465[6]

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

Total
Ueno Frontier Tower(Taito-ku, Tokyo)
J. FRONTOther
CITY
DEVELOPM (Shibuya-ku, Tokyo,
etc.)
ENT Co.,
Ltd.
Total

Notes:

1.
2.

Number of
employees(Persons)

Buildings
andstructures

–
[–]

–
[–]
34,948
[3]

–
[–]
8,029
[4]

–
[–]

–
[–]

Other

Total

–
[–]

–
[–]

–
[–]

–
[–]

The number in the 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.
Of the major facilities, the ones rented from external sources are listed in “Agreements relating to leases” under “5.
Critical contracts for operation” in “II. Overview of Business.”- 70 -

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 amountCompany name

Office name
(Location)

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

Segment nameFacilities

Department
Sales floor
Store Business renovation, etc.

Total
(Millions ofyen)

14,186

J. FRONT
Nagoya Sakae
CITY
Kadochi
DEVELOPME (Naka-ku,
NT Co., Ltd.
Nagoya)Developer
Business

Multi-tenantbuilding

13,423

J. FRONT
Shinsaibashi
CITY
Plaza
DEVELOPME (Chuo-ku,
NT Co., Ltd.
Osaka)Developer
Business

Multi-tenantbuilding

1,442(2) Retirements, etc. of significant facilities
There are no significant matters to report.

- 71 -

Amountalready paid
(Millions of
yen)

Funds
procurement
methodFunds on hand

282 and borrowings

Start

Scheduledcompletion

March 2024

February 2025

Funds on hand

3,700 and borrowings October 2018
Funds on hand

– and borrowings

December
2022

2026

April 2026

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

Class

Number of issued
shares as of fiscal
year end(Shares)(As of February 29,
2024)

Number of issued
shares as of filingdate(Shares)(As of May 29,2024)

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

Details

Ordinary shares

270,565,764

270,565,764

Prime Market of the Tokyo
Stock Exchange
Premier Market of the Nagoya
Stock Exchange

The number ofshares per shareunit
100 shares

Total

270,565,764

270,565,764––(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(Thousands ofshares)shares)
2,446

270,565

Change in sharecapital(Millions of yen)

Balance of sharecapital(Millions of yen)

Change in legal
capital surplus(Millions of yen)

Balance of legal
capital surplus(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)- 72 -

(5) Shareholding by shareholder category
As of February 29, 2024
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)

–

67

31

Number ofshares held
(Units)–999,357

Shareholding
ratio (%)

–

37.01

Category

Notes:

1.

2.

Shares lessthan one unit
(Shares)Companies,
etc.

Individuals

Individuals
and others

1,034

317

228

164,554

166,231–

156,321

159,097

539,103

531

845,5622,699,971

568,664

5.79

5.89

19.97

0.02

31.32

100.00–Total

The 6,277,182 treasury shares include 62,771 share units under “Individuals and others” and 82 shares under “Sharesless than one unit.” In addition, the 6,277,182 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 29, 2024
Name / Company name
The Master Trust Bank of Japan, Ltd. (Trust
Account)

Address

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

Akasaka Intercity AIR,
1-8-1 Akasaka, Minato-ku, Tokyo

45,154

17.09

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

22,542

8.53

Nippon Life Insurance Company

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

9,828

3.72

J. Front Retailing Kyoei Supplier
Shareholding Association

Shinagawa Season Terrace,
1-2-70 Konan, Minato-ku, Tokyo

6,295

2.38

SMBC Nikko Securities Inc.

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

4,261

1.61

JPMorgan Securities Japan Co., Ltd.

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

3,628

1.37

The Dai-ichi Life Insurance Company,
Limited

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

3,439

1.30

Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd.

1-9-2 Otemachi, Chiyoda-ku, Tokyo

3,401

1.29

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

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

3,204

1.21

JUNIPER(Standing proxy: MUFG Bank, Ltd.)

P.O. Box 2992, Riyadh 11169,
Kingdom of Saudi Arabia (2-7-1
Marunouchi, Chiyoda-ku, Tokyo)

2,871

1.09

104,627

39.59

Total
Notes:

1.
2.

–

J. Front Retailing Kyoei Supplier Shareholding Association is a shareholder association comprised of business partnersof the Group.
In addition to the above, there are 6,277,000 treasury shares (the percentage of the number of treasury shares owned tothe total number of issued shares is 2.32%), and the shareholding ratio is calculated after excluding those treasury
shares.
Treasury shares do not include shares held by the officer remuneration BIP trust.

- 73 -

(7) Voting rights(i) Issued shares
As of February 29, 2024
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)

–

–

–

–

–
–

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

6,277,100

Shares with full voting rights (Other)

Ordinary shares

263,720,000

2,637,200

Shares less than one unit

Ordinary shares

568,664––

Total number of issued shares

270,565,764––

Total number of voting rights–

2,637,200–

Notes:

1.

2.

Figures under “Shares with full voting rights (Other)” include 2,143,400 shares of the Company held by the officer
remuneration BIP trust (21,434 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 82 treasury shares held by the Company and 47 treasury shares
held by the officer remuneration BIP trust.

(ii) Treasury shares, etc.
As of February 29, 2024
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
(%)

6,277,100–

6,277,100

2.32

6,277,100–

6,277,100

2.32

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” thatwas introduced in 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 (the “System”). In addition to
officers of the Company and Daimaru Matsuzakaya Department Stores Co. Ltd., the System covers
Executive Officers of PARCO Co., Ltd. and Representative Directors of JFR Card Co., Ltd., J. FRONTCITY DEVELOPMENT Co., Ltd., and J. Front Design & Construction Co., Ltd.
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 Corporate Officers of Daimaru Matsuzakaya Department Stores Co. Ltd. as well as
Representative Directors of JFR Card Co., Ltd., J. FRONT CITY DEVELOPMENT Co., Ltd., and
J. Front Design & Construction Co., Ltd. to help the Group achieve sustainable growth and increase
corporate value over the medium to long term (“Trust I”).
(ii) The trust that issues the Company’s shares in a way that is not linked to performance with theobjective of involving Non-executive Directors of the Company (Independent Outside Directors as- 74 -

well as the chairperson of the Board of Directors, Audit Committee members and other internal
Non-executive Directors; collectively the “Non-executive Directors”) in management with amedium- to long-term view in order that they should strengthen proactive and defensive
governance of the Company from a different standpoint to the executives as representatives of
stakeholders (“Trust II”).
(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. as well as
Representative Directors of JFR
Card Co., Ltd., J. FRONT CITY
DEVELOPMENT Co., Ltd., and
J. Front Design & Construction
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 andCorporate Officers of Daimaru
Matsuzakaya Department Stores
Co. Ltd. as well as
Non-executive Directors of theRepresentative Directors of JFR Company who meet theCard Co., Ltd., J. FRONT CITY beneficiary requirements
DEVELOPMENT Co., Ltd., and
J. Front Design & Construction
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 (changed on July 20, 2021)

July 9, 2018 (changed on July 27,
2021)(viii) Trust period:

July 14, 2017, to August 31, 2022 (Extension until August 31, 2024,
due to amendment of trust agreement on July 20, 2021)

July 9, 2018, to July 31, 2023
(Extension until August 31, 2024,
due to amendment of trust
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- 75 -

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

3) The structure of share distribution trust(1) Resolutions by Remuneration Committee(3) Contribution of
funds(1) Resolutions by
Shareholders
Meeting

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- 76 -(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
Acquisition based on the provisions of Article 459, paragraph (1) of the Companies Act
Category

Number of shares (Shares)

Status of resolution at Board of Directors meeting (April 15,
2024)(Purchase period: From May 1, 2024 to July 31, 2024)

Total value (Yen)

8,000,000

10,000,000,000

Treasury shares acquired prior to the current fiscal year––

Treasury shares acquired during the current fiscal year––

Total number and value of remaining resolution shares

–

–

–

–

–

–

–

–

Percentage of unexercised shares as of the end of the current
fiscal year (%)
Treasury shares acquired during the period from March 1,
2024, to the filing date of this Annual Securities Report
Percentage of unexercised shares as of the filing date (%)
Note:

The figure for treasury shares acquired during the period from March 1, 2024, to the filing date of this Annual Securities
Report does not include the number of shares acquired during the period from May 1, 2024, until the filing date of thisAnnual Securities 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

5,122

7,148,439

Treasury shares acquired during the period from March 1, 2024, tothe filing date of this Annual Securities Report

1,098

1,699,267

Note:

The figure for treasury shares acquired during the period from March 1, 2024, 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 from shareholders uponrequest during the period from May 1, 2024, 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 29, 2024
Category

From March 1, 2023, 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 of

–

–

–

–

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

–

–

–

–

–

–

6,277,950–

Other (Decrease due to sales ofshares less than one unit toshareholders upon request)
Treasury shares held
Note:

60

95,7286,277,182–

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, 2024, until the filing date of thisAnnual Securities Report.

- 77 -

3. Dividend policy
The Company’s basic policy is to maintain and enhance its sound financial standing while appropriately returning
profits by providing stable dividends and enlisting a flexible and agile approach to purchasing its treasury sharesin a manner that involves taking profit levels, future capital investment, free cash flow trends and other suchfactors into consideration.
In accordance with this policy, during the period of the current Medium-term Business Plan (FY2024–FY2026),
the Company aims to optimize the amount of equity by maintaining a consolidated dividend payout ratio of 40%
or more and conducting purchases of treasury shares.
With respect to internal reserves, the Company intends to enhance corporate value by using them for such
purposes as investing in store refurbishments to further strengthen the retail business, upfront investment in theDeveloper Business to realize group synergies, and growth investment.
The Company has paid an annual dividend of ¥36 per share for the current fiscal year, comprising an interim
dividend of ¥16 per share and a year-end dividend of ¥20 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 a 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 10, 2023
Resolution of the Board of Directors
April 15, 2024
Resolution of the Board of Directors- 78 -

Dividends per share
(Yen)
4,228

16.00

5,285

20.00

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 the authority for matters affecting thebusiness of the Group, it accordingly delegates authority to its respective operating subsidiaries withrespect to matters involving business execution by the business subsidiaries in order to 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, Group
Annual Management Policy, and Sustainability 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, CRE Strategy Unit, Digital
Strategy 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
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’s management.
 The Company will enable decisions of business execution to be delegated to Executive Officers,
clarify authority and responsibilities, 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.
- 79 -

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 of the Board of Directors as listed below.
They are to do so in accordance with 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 the Group’s management is to take by engaging inconstructive discussions with respect to the Group Vision, the Sustainability Policy, the Group
Medium-term Business Plan, the Group Management Policy for the fiscal year, and otherfundamental 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 Group’s
management 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 the
progress of the President and Representative Executive Officer succession planning andpersonnel assignment plans pertaining to managerial talent and Executive Officer training in
consultation with the Nomination 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.
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:

YOSHIMOTO Tatsuya, HAMADA Kazuko, ONO Keiichi, and
WAKABAYASHI Hayato

Outside Directors:

KOIDE Hiroko (Chairperson), YAGO Natsunosuke, HAKODA Junya,
UCHIDA Akira, SEKI Tadayuki, and OMURA Emi

Evaluation of Effectiveness of the Board of Directors
Since 2015, the Company performs an annual third-party evaluation of the effectiveness of theBoard of Directors.
Evaluation Items
Approximately 40 items including 1) Contribution of the Board of Directors to the overall Group,2) Composition of the Board of Directors, 3) Operational status, 4) Content of discussions, and 5)
Effectiveness of the activities of the Nomination, Remuneration, and Audit Committees.
Evaluation Method
Based on a preliminary questionnaire, a third party organization conducted individual interviews(Note) and the results were compiled and analyzed in a report, which was then discussed at theBoard of Directors meeting.
- 80 -

Note: Individual interviews
Based on the results of the questionnaire, a third party organization conducted individualinterviews of approximately one hour with each member of the Board of Directors (both internaland external), to hear their thoughts on and awareness regarding various questions related to theBoard of Directors. The Board of Directors uses the results of the interviews to resolve issues.
Evaluation Results and Initiatives to Address Issues
The past eight evaluations have clarified issues such as strengthening discussion of important
agenda items and reviewing the composition of the Board of Directors. Through efforts aimed at
improvement, the supervisory function is being strengthened such as by increasing the ratio of
Outside Directors, strengthening agenda setting, and enhancing the content of deliberations.
According to the third party organization, the ninth evaluation of effectiveness of the Board of
Directors conducted from August to September 2023 showed that the Company’s Board of
Directors had succeeded in improving its effectiveness by building an advanced governancesystem involving the transition to a company with three committees (nomination, audit, andremuneration committees) and a Board of Directors on which independent Outside Directors
make up a majority of the members, as well as by strengthening the functions of the threestatutory committees. On the other hand, whereas these structural improvements are nearlycomplete in terms of format, issues in terms of substance have been identified from theperspective of increasing medium- to long-term corporate value, such that include, “monitoring of
the Medium-term Business Plan,” and “thoroughly engaging in preparation and analysis fordiscussions on growth strategy.” In response to these issues, we will continue to strive to shareissues based on the evaluation of the effectiveness of the Board of Directors and improve thesubstantive effectiveness of the Board of Directors.
Board of Directors Meeting Dates and Agenda Items
In FY2023 (from March 2023 to February 2024), 15 Board of Directors meetings were held. The
attendance rate of Directors was 98.8%. (The average duration of each meeting was 2 hours and28 minutes.)
Date and Time

Main Agenda Items

March 28, 2023

Status of implementation of Basic Policy to Build Internal Control System andevaluation results of internal controls related to financial reporting, etc.

April 11

Financial reports

April 25

Sale of shares held, etc.

May 25

Revision of Corporate Governance Policy, Corporate Governance Report, and Basic
Policy to Build Internal Control System, etc.

June 28

Formulation of the next Medium-term Business Plan, etc.

July 25

Outline of the next Medium-term Business Plan, etc.

August 29
September 26

Outline of the next Medium-term Business Plan, validation of cross-shareholdings
rationale, etc.
Next Medium-term Business Plan, Payment and Finance Business growth strategy,etc.

October 10

Financial reports

October 31

Results of evaluation of the effectiveness of the Board of Directors, financial strategy
of next Medium-term Business Plan, etc.

November 28

Next Medium-term Business Plan, JFR’s human capital management, etc.

December 26

Next Medium-term Business Plan, etc.

January 30, 2024
February 27

Nomination and dismissal of Representative Executive Officer, JFR’s officer
personnel, etc.
Next Medium-term Business Plan, FY2024 profit and loss budget, financial planning,
BS budget, etc.

- 81 -

B. Three Committees(Nomination Committee)
The Nomination Committee is composed of three (3) independent Outside Directors and one (1)full-time Director who does not execute business, and the Chairperson is chosen from among
independent Outside Directors from the standpoint of ensuring transparency and objectivity.
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, and
YOSHIMOTO Tatsuya

Nomination Committee Meeting Dates and Agenda Items
In FY2023 (from March 2023 to February 2024), 15 Nomination Committee meetings were held.
The attendance rate of members was 100%. (The average duration of each meeting was 1 hourand 23 minutes.)
Date and Time

Main Agenda Items

March 17, 2023

Directors’ structure and skills matrix, etc.

April 3Nomination of 11 candidates for Director, recommendations to the Board of Directors,
etc.

April 20

Management structure of JFR Group companies

May 8

Independent Outside Director structure, future approach of the Nomination
Committee, etc.

May 25

FY2023 Nomination Committee schedule, etc.

June 19

Succession plan, independent Outside Director structure, etc.

July 18

Succession plan, independent Outside Director structure, etc.

July 24

Independent Outside Director structure

August 18

Succession plan, independent Outside Director structure, etc.

September 13

Succession plan, independent Outside Director structure, etc.
Succession plan, mid-term evaluation of executive officers and presidents of major
operating subsidiaries, etc.
Succession plan, FY2024 JFR executive structure, independent Outside Director
structure

October 24
November 20
December 18

Succession plan, FY2024 executive structure for JFR and major operating subsidiaries

January 22, 2024

Succession plan, FY2024 executive structure for JFR and major operating subsidiaries

February 19

FY2024 JFR Directors’ structure(Audit Committee)
The Audit Committee is composed of three (3) independent Outside Directors and one (1) fulltime Director who does not execute business, and the Chairperson is chosen from among
independent Outside Directors from the standpoint of ensuring transparency and objectivity.
The Audit Committee effectively audits whether the execution of duties by Executive Officers andDirectors is in compliance with laws, regulations, and the Articles of Incorporation of theCompany and whether they are performing their duties efficiently in accordance with theCompany’s basic philosophy and the Group Vision, and it provides necessary advice andrecommendations, etc.
Members:

HAKODA Junya (Chairperson), SEKI Tadayuki, OMURA Emi, and HAMADA
Kazuko- 82 -

Audit Committee Meeting Dates and Agenda Items
In FY2023 (from March 2023 to February 2024), 24 Audit Committee meetings were held. The
attendance rate of members was 97.3%. (The average duration of each meeting was 1 hour and 18
minutes.)
Date and Time

Main Agenda Items

March 9, 2023

Evaluation of Accounting Auditor, etc.

March 16

Internal Audit Division report, etc.

March 28
April 10
April 19
May 11
May 25

Status of implementation of Basic Policy to Build Internal Control System, report on
evaluation results of internal controls related to financial reporting, etc.
Audit report of Accounting Auditor for the 16th fiscal year, audit report of Audit
Committee for the 16th fiscal year, reappointment of Accounting Auditor, Internal
Audit Division report, etc.
Report from corporate auditors of Group companies for second half of FY2022, audit
findings of Audit Committee members for FY2022, etc.
Corporate auditor structure of Group companies for FY2023, report from Accounting
Auditor, evaluation feedback for Accounting Auditor, Compliance Committee report,
Internal Audit Division report, etc.
FY2023 audit policy and plan, nomination of nominated and specific Audit Committee
members, etc.

June 8

Accounting Auditor management letter report

June 15

Accounting Auditor’s audit plan for the 17th fiscal year, agreement on Accounting
Auditor’s remuneration

July 6

Workshop for Group company corporate auditors

July 13First quarter Accounting Auditor’s review report for the 17th fiscal year, IT audit,
Internal Audit Division report, etc.

August 17

Internal Audit Division report, operating company phase management report, etc.

September 7

Summary of workshop for Group company corporate auditors, etc.

September 14

Compliance Committee report, Internal Audit Division report

October 6

Financial Strategy Unit report, etc.

October 13

Second quarter Accounting Auditor’s review report for the 17th fiscal year, reportfrom corporate auditors of Group companies for first half of FY2023, etc.

November 1

Internal Audit Division report, etc.

November 9Compliance Committee report, etc.

December 7Internal Audit Division report

December 14

Audit report from Audit Committee

January 11, 2024

Third quarter Accounting Auditor’s review report for the 17th fiscal year, Internal
Audit Division report, etc.

January 18

Operating company phase management, evaluation of Accounting Auditor

February 1

Internal Audit Division report, liaison meeting with corporate auditors

February 9

Report from Accounting Auditor (KAM, disclosure of remuneration-related
information in response to revised ethics rules)(Remuneration Committee)
The Remuneration Committee is composed of three (3) independent Outside Directors and one (1)full-time Director who does not execute business, and the Chairperson is chosen from 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 major
subsidiaries of the Group (Directors, Executive Officers, and Audit & Supervisory Board
Members) and determines the contents themselves of individual remuneration for Directors andExecutive Officers of the Company.
- 83 -

Members:

UCHIDA Akira (Chairperson), YAGO Natsunosuke, KOIDE Hiroko, and
YOSHIMOTO Tatsuya

Remuneration Committee Meeting Dates and Agenda Items
In FY2023 (from March 2023 to February 2024), 13 Remuneration Committee meetings were
held. The attendance rate of members was 100%. (The average duration of each meeting was 55
minutes.)
Date and Time
March 17, 2023
April 20
May 8
May 25Main Agenda Items
Total amount of FY2022 bonuses for directors, review of officer remuneration system(revision of regulations and remuneration policy)
Performance-linked factor and number of points paid for stock-based remuneration for
officers (short-, medium-, and long-term performance share), FY2022 officer
evaluation results
FY2022 bonuses for directors by individual and short-term performance share points
paid, FY2023 mission grade and remuneration by individual, etc.
FY2023 mission grade and remuneration by individual, Remuneration Committee
schedule, etc.

June 19

Review of officer remuneration system

July 18

Review of officer remuneration system

August 18

Review of officer remuneration system

October 24

Review of officer remuneration system

November 20

Review of officer remuneration system

December 18

Review of officer remuneration system

December 26

Review of officer remuneration system

January 22, 2024

Review of officer remuneration system

February 19

Review of officer remuneration system, remuneration by individual- 84 -

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, the Group Medium-term Business Plan, overall policy
and plan for the Group management, M&As, the Group financing plans, and other individual
important matters relating to the Group management. In order to speed up business decisions andexecution, the task of determining matters involving business execution other than the above shall bedelegated to execution, with the exception of matters which have a material impact on the Groupmanagement.
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.
- 85 -

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 the compliance system and the status of
implementation through enhanced collaboration with departments in charge of the 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) and 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 direction of the President and Representative Executive Officer. In accordancewith 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 orproperly report the results of audits of operations, examine the properness and effectiveness of theprocesses for their operations, and provide guidance, advice and proposals to all departments at theCompany and to operating subsidiaries.
E. Structure of the Audit Committee
Regarding the structure of the Audit Committee, it is chaired by an Outside Director and composed offour members, including an internal Director who does not execute business. The Audit Committee
shall audit the legality and suitability of the execution of duties by the Executive Officers andDirectors. 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.
Under the direction of the Audit Committee, the Audit Committee Secretariat has been established as
an organization to support the Committee’s duties. Regarding personnel appointments and changes for
the Audit Committee Secretariat staff members and personnel evaluation of the responsible person for
the Audit Committee Secretariat, the Audit Committee’s advance approval is required to ensure
independence.

- 86 -

F. System for storage and management of information
Regarding documents relating to the execution of duties by Executive Officers and Directors, as well
as minutes and related materials of meetings hosted by Executive Officers and Directors (including
electromagnetic documents), in accordance with the laws and regulations and the rules on confidential
information management, each responsible department shall carry out document storage andmanagement 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 a resolution shall not be held by cumulative voting.
(vi) Requirements of a 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, who continuously and sustainably ensuresthat the corporate value of the Group and, by extension, the common interests of shareholders areserved, and who 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 by- 87 -

specific shareholders or specific groups (hereinafter “Large-Scale Purchase”), if this Large-Scale
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 to prevent
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 the 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- 88 -

Purchaser is inappropriate in light of the aforementioned basic policy after considering advice andopinions 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 relationship 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.

- 89 -

(2) Information about officers(i) List of officers
Officers include 15 males and 4 females. (Percentage of female officers: 21.05%)(1) Directors
Title and
position

Director
Chairpersonof Board of
Directors

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 (scheduled
to retire in June 2024)

April 2018

Director of Vicela Japan Co.,Ltd.

June 2019

Outside Director of Honda
Motor Co., Ltd
Outside Director of J-OILMILLS, Inc. (scheduled to retirein June 2024)

May 2021- 90 -

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

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

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

May 2020

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

May 2021

Director of PARCO Co., Ltd.

- 91 -

Term ofofficeNumber ofshares held(Thousandsof shares)(Note 2)8

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/
PricewaterhouseCoopers

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

December
2014

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

July 10, 1951
March 2015

Director of Institute ofCorporate Governance, Japan(present)

June 2015

Outside Corporate Auditor of
Yamaha Corporation
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

August 2020

Vice Chairperson of theCommittee on Training andResearch for Outside Officers,
Japanese Institute of Certified
Public Accountants

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- 92 -

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

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)

6

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)- 93 -

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.)

April 2017

Advisory Member of ITOCHU
Corporation

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)

May 2022

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

Director of PARCO Co., Ltd.

- 94 -

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

Title andposition

Director

Name

OMURA Emi

Date of birth

Career summary
October 2002

Registered as attorney at law
Joined Iwasaki & Motoyama

March 2007

Registered as attorney at law of
New York State, U.S.A.

July 2008

Partner of Athena Law Office

September
2010

Associate Expert, International
Labour Standards Department,International Labour
Organization in Geneva,
Switzerland

September
2013

Partner of Athena Law Office

January 2014

Director, Office of International
Affairs, Japan Federation of Bar
Associations

September
2014

Outside Director of Digital
Garage, Inc. (scheduled to retirein June 2024)

September 2,
June 20191976

Counsel of Kamiyacho
International Law Office

April 2021

Counsel of CLS HIBIYATOKYO LAW OFFICE

November
2021

Outside Director, Audit andSupervisory Committee Memberof Valuence Holdings Inc.
(present)

January 2022

Partner of CLS HIBIYATOKYO LAW OFFICE(present)

December
2022

External Director (Audit &Supervisory Committee
Member) of FOOD & LIFE
COMPANIES LTD. (present)

June 2023

Auditor of Japan Association for
Women’s Education (present)

May 2024

Outside Director of J. FRONTRETAILING Co., Ltd. (present)- 95 -

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

Title andposition

Director

Director

Name

YOSHIMOTO
Tatsuya

HAMADA Kazuko

Date of birth

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

April 13,1956
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

President and Representative
Executive Officer

March 2023

President and Representative
Executive Officer and Senior
Executive General Manager of
CRE Strategy Unit

March 2024

Executive Officer of J. FRONTRETAILING Co., Ltd.

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)- 96 -

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

107

(Note 2)1

Title andposition

DirectorName

ONO Keiichi

Date of birthAugust 2,
1975

Career summary
April 1998

Joined The Daimaru, Inc.

April 2007

Planning Office for New Umeda
Store, Department StoreBusiness Division, Head Office

September2010

In charge of Sales Promotion
and Advertising of Business
Promotion Division of Daimaru
Umeda Store, Daimaru
Matsuzakaya Department Stores
Co. Ltd.

November
2012

Store Planning Department,
Head Office of PARCO Co.,Ltd.

November2013

In charge of Inbound Businessof Sales Planning Unit of Sales& Marketing Headquarters,
Head Office of Daimaru
Matsuzakaya Department Stores
Co. Ltd.

September
2015

General Manager of InboundBusiness, Merchandising andChannel Development Division,
Head Office

September
2016

General Manager of Business
Promotion Division of Daimaru
Kyoto store

March 2018

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

October 2020

Senior General Manager ofStructural 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

May 2022

Director of PARCO Co., Ltd.

March 2024

President and Representative
Executive Officer and Senior
Executive General Manager of
CRE Strategy Unit (present)- 97 -

Term ofofficeNumber ofshares held(Thousandsof shares)(Note 2)8

Title andposition

Director

Name

WAKABAYASHI
HayatoDate of birthAugust 31,
1961

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.
In charge of Finance Policy,
Administration Unit

September
2015

Executive Officer

Term ofofficeNumber ofshares held(Thousandsof shares)(Note 2)19

In charge of Financial Strategy
and Policy, Administration Unit
March 2016

Senior Executive General
Manager of Financial Strategy
Unit (present) and in charge ofFinance Policy

May 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.

May 2023

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

Total
Notes:

1.
2.

161

Directors KOIDE Hiroko, YAGO Natsunosuke, HAKODA Junya, UCHIDA Akira, SEKI Tadayuki, and OMURA Emi
are Outside Directors.
The term of office will be from the conclusion of the Annual Shareholders Meeting for the fiscal year ended February
29, 2024, to the conclusion of the Annual Shareholders Meeting for the fiscal year ending February 28, 2025.

- 98 -

(2) Executive officers
Career summary

Term ofofficeNumber ofshares held(Thousands ofshares)Title and position

Name

Date ofbirth

President andRepresentative
Executive Officer
Senior Executive
General Manager
of CRE Strategy
Unit

ONO Keiichi

August 2,
1975(Note 1)

(Note 2)

8

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

(Note 1)

(Note 2)19

(Note 2)0Managing
Executive Officer
Senior Executive
General Manager
of Management
Strategy Unit

HAYASHIKenichi

April 1983

Joined The Daimaru, Inc.

February 2007

General Manager of Men’s Wear
& Accessory Division of
Daimaru Kyoto store

March 2009

General Manager of Men’s Wear
& Accessory Division, General
Manager of Home Culture
Products Division, and General
Manager of Art, Kimono &Jewelry Division of Daimaru
Kyoto store

March 2011

General Manager of Men’s Wear
& Accessory Division, General
Manager of Home Culture
Products Division, and General
Manager of Art, Kimono &Jewelry Division of Daimaru
Kobe store of Daimaru
Matsuzakaya Department Stores
Co. Ltd.

March 2013

General Manager of Sales
Department of Matsuzakaya
Shizuoka store

September
1, 1960 September
2015

General Manager ofMerchandising and Channel
Development Division (incharge of Event Planning andManagement), Merchandising
Strategy Promotion Office, Sales& Marketing Headquarters

January 2016

Representative Director andPresident of JFR Online Co.,Ltd.

March 2017

Director and General Manager
of Sales Management
Department of The Hakata
Daimaru, Inc.

May 2018

Senior General Manager ofMerchandising Planning and
New Business Development
Office, Sales & Marketing
Headquarters, General Manager
of Merchandising Planning
Department of Daimaru
Matsuzakaya Department Stores
Co. Ltd.

- 99 -

Title and position

Name

Date ofbirth

Career summary
August 2018

President & CEO of Daimaru
Kogyo, Ltd.

January 2021

Corporate Officer, Executive
Store Manager in Charge of
Administration of Daimaru
Sapporo store of Daimaru
Matsuzakaya Department Stores
Co. Ltd.

March 2024

Managing Executive Officer,
Senior Executive General
Manager of Management
Strategy Unit and in charge of
Risk Management of J. FRONTRETAILING Co., Ltd. (present)

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

6

Director of PARCO Co., Ltd.
(present)

Managing
Executive Officer
Senior Executive
General Manager
of Digital
Strategy Unit

HAYASHI
Naotaka

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)

March 2017

Executive Officer (Group ICTStrategy Office)September May 2020
7, 1968

Executive Officer (CRM
Promotion Department andDigital Promotion Department)

March 2022

Managing Executive Officer(present) and Senior Executive
General Manager of Group
Digital Unit of J. FRONTRETAILING Co., Ltd.

December
2023

Senior Executive General
Manager of Group Digital Unit
and Group System Unit

March 2024

Senior Executive General
Manager of Digital Strategy
Unit (present)
Director of Daimaru
Matsuzakaya Department Stores
Co. Ltd. (present)- 100 -

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

March 29,
1960

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 of J.
FRONT RETAILING Co., Ltd.
(present)

May 2022

Director of Daimaru
Matsuzakaya Department Stores
Co. Ltd.

December
2023

Director of PARCO Co., Ltd.
(present)- 101 -

Term ofofficeNumber ofshares held(Thousands ofshares)(Note 2)20

Title and position

Executive Officer

Name

UMEBAYASHI
Akira

Date ofbirth

May 4,
1972

Career summary

Term ofofficeApril 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 of(Note 2)
Group 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- 102 -

Number ofshares held(Thousands ofshares)3

Title and position

Executive Officer

Name

OCHIAI Isao

Date ofbirth

Career summary
March 2022

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

March 2023

Executive Officer and Senior
General Manager of Group
Human Resources Development
Division and Group Welfare
Division of Human Resources
Strategy Unit

March 2024

Executive Officer and Senior
General Manager of Board of
Directors Office (present)

April 1993

Joined Matsuzakaya Co., Ltd.

March 2020

General Manager ofManagement Planning Division,
Management Planning Office,Head Office of Daimaru
Matsuzakaya Department Stores
Co. Ltd., General Manager of
MIRAITEIBAN KENKYUJYOJanuary 2021

Executive Store Manager of
Matsuzakaya Shizuoka store

December21, 1968 March 2023

March 2024

- 103 -

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

Term ofofficeNumber ofshares held(Thousands ofshares)(Note 2)0

Title and position

Name

Executive Officer MORITA Kosuke

Executive Officer

NOMURA
TaiichiDate ofbirth

February
14, 1978December25, 1963

Career summary
April 2000

Joined PARCO Co., Ltd.

March 2019

General Manager ofCollaboration Business Planning
Department

September
2020

General Manager of Wellness
Business Department

March 2022

General Manager of Content
Development Department

March 2023

Executive Officer (Content
Development Department,
Collaboration Business Planning
Department, and Digital
Promotion Department)

March 2024

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

April 1987

Joined ALL NIPPON AIRWAYS
CO., LTD.

April 2011

Senior General Manager of
Innovation Management
Department of Peach Aviation
LimitedApril 2015

Director of Ad Value Creation
Lab

April 2016

Director in charge of ANA
HOLDINGS Digital Design Lab
of ALL NIPPON AIRWAYS
CO., LTD.

April 2017

Director of Innovation
Promotion Department,
Business Process Reform Office(concurrent position)

April 2022

Chief Digital Designer of Group
Digital Unit of J. FRONTRETAILING Co., Ltd.

March 2024

Executive Officer and Senior
General Manager of Group
System Promotion Division of
Digital Strategy Unit (present)- 104 -

Term ofofficeNumber ofshares held(Thousands ofshares)(Note 2)0(Note 2)0

Title and position

Executive Officer

Executive Officer

Name

NOGUCHI
HidekiIMAZU Takako

Date ofbirth

Career summary
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

August 7,
1971

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 of J.
FRONT RETAILING Co., Ltd.
(present)

April 1995

Joined The Daimaru, Inc.

March 2019

Senior General Manager ofGroup Human Resources
Development Division, Daimaru
Sapporo store of Daimaru
Matsuzakaya Department Stores
Co. Ltd.

December
2022

Corporate Unit Executive
Officer of J. FRONT CITY
DEVELOPMENT Co., Ltd.

March 2024

Executive Officer and Senior
General Manager of Group
Human Resources Development
Division and Group Welfare
Division of Human Resources
Strategy Unit of J. FRONTRETAILING Co., Ltd. (present)

Total
Notes:

1.
2.

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

6(Note 2)067

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 ends within one (1) year
after his/her election to office.

- 105 -

(ii) Outside officers
The Company has six Outside Directors.
The basic view of the Company under the corporate governance structure with three committees isthat 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. Six independent
Outside Directors, who have extensive external management experience or in-depth knowledge in
specialized areas, fulfill their roles as chairperson of the Board of Directors, chairpersons of any of theNomination, Audit, and Remuneration Committees, or members of the three committees, so that theeffectiveness of independent and objective management supervision can be ensured.
1) Relationship with the Company and appointment of Outside Directors
Name

KOIDE Hiroko

Important concurrent positions(As of May 24, 2024)

Relationship with the Company and appointment

Outside Director of Mitsubishi
Electric Corporation (scheduled toretire in June 2024);
Outside Director of J-OIL MILLS,
Inc. (scheduled to retire in June
2024)

KOIDE Hiroko has extensive knowledge based on her richexperience in the fields of global management and marketing, having
served as an officer at foreign companies for many years, and having
been engaged in corporate management as the head of marketing at
the head office of a U.S. company, as well as a wealth of 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 a wide range of matters including the importance ofstrategies for evolving existing core businesses, clarifying anddelving into customer targets based on marketing thinking, andsynchronizing medium- to long-term management strategies withhuman resource strategies. As a member of the Nomination
Committee, she conducts discussions that ensure objectivity,transparency, and continuity and deliberates on the decision process
for the new President and Representative Executive Officer based on
the succession plan. As a member of the Remuneration Committee,
she reviews the officer remuneration system in conjunction with thenext Medium-term Business Plan and provides necessary advice atsuitable times on the introduction of a new calculation method for
officer remuneration and reviews of remuneration standards,
composition, and performance evaluation indicators, etc., andcontributes to strengthening the management personnel functions. In
light of her track record, abundant experience and high level 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.

- 106 -

Name

Important concurrent positions(As of May 24, 2024)

Relationship with the Company and appointment

YAGO Natsunosuke

YAGO Natsunosuke has been involved in top-level corporate
management for many years, and has a wealth of experience incompliance management and strengthening financial bases. He also
possesses a high level of expertise in internal control and corporate
governance gained through his experience in transitioning to acompany with three committees (nomination, audit, andremuneration committees). He has contributed to improving theeffectiveness of the Board of Directors by actively and assertively
providing advice in many areas, including on the formulation of theMedium-term Business Plan with an awareness of overall
optimization, the approach to cross-shareholdings, overseas businessexpansion based on past experiences and reflections, and approaches
to human resource investment and human resource evaluation. As
the Chairperson of the Nomination Committee, he conducts
discussions that ensure objectivity, transparency, and continuity andresolves on the new President and Representative Executive Officer
based on the succession plan. As a member of the Remuneration
Committee, he reviews the officer remuneration system inconjunction with the next Medium-term Business Plan and provides
necessary advice at suitable times on the introduction of a new
calculation method for officer remuneration and reviews of
remuneration standards, composition, and performance evaluation
indicators, etc., and contributes to strengthening the management
personnel functions. In light of his track record, abundant experienceand 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.

HAKODA Junya

HAKODA Junya was involved in accounting audits, management
consulting, and internal audits of auditing firms, etc. for many years
at PricewaterhouseCoopers and 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 providing advice andoversight regarding a wide range of matters including KPI
perspectives necessary for monitoring the Medium-term Business
Plan, consideration of financial policies in light of the macro
environment, utilization of internal human resources in new businessdevelopment, and approaches to the appointment of human resourcesin times of change. Moreover, as Chairperson of the Audit
Committee, he has endeavored to strengthen the audit function byfulfilling his roles of auditing the execution of duties by Directors
and Executive Officers of a company with three committees(nomination, audit, and remuneration 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 is expected to promote. He is also
simultaneously working to enhance the governance of the Group as awhole. In light of his track record, abundant experience and highlevel 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.

- 107 -

Name

Important concurrent positions(As of May 24, 2024)

Relationship with the Company and appointment

Outside Director of Yokogawa
Electric Corporation

UCHIDA Akira possesses extensive experience and knowledge of
not only business planning and IR but also corporate departments as
the person responsible for the finance and accounting division. He
has contributed to improving the effectiveness of the Board of
Directors by actively and assertively providing advice and oversightwith respect to a wide range of matters including the importance ofidentifying issues and addressing risks when formulating the
Medium-term Business Plan, aligning sustainability management
policies with business strategies, digital strategies that also utilize
stores, and the Company’s approach to human capital management.
As Chairperson of the Remuneration Committee, he reviews theofficer remuneration system in conjunction with the next Mediumterm Business Plan and introduces a new calculation method for
officer remuneration and reviews remuneration standards,
composition, and performance evaluation indicators, etc. As amember of the Nomination Committee, he conducts discussions that
ensure objectivity, transparency, and continuity and provides
necessary advice at suitable times regarding deliberation on thedecision process for the new President and Representative Executive
Officer based on the succession plan, and contributes tostrengthening the management personnel functions. In light of his
track record and abundant insight, the Company expects him tocontribute greatly to management of the Group and has accordingly
appointed him as an Outside Director. The Company has no interestin or relationship with him.

SEKI Tadayuki

Outside Director of JSR
Corporation;
Outside Statutory Auditor of Asahi
Mutual Life Insurance Company

SEKI Tadayuki has many years of experience in international
business management and risk management at a general trading
company, and has extensive knowledge and experience in financeand accounting as CFO, as well as broad knowledge as an outside
director and outside statutory auditor of multiple companies. He has
contributed to improving the effectiveness of the Board of Directors
by actively and assertively providing advice on a wide range ofmatters including the promotion of business strategies with anawareness of the cost of capital, the importance of responding tostores and businesses facing challenges in the transformation ofbusiness portfolios, and the risks involved in entering new
businesses and how to respond to those risks. As a member of the
Audit Committee, he is working to strengthen audit functions byfulfilling expectations of him in terms of exchanging and discussing
opinions from the perspective of legality, appropriateness, etc. on
items submitted to the Board of Directors and items judged torequire monitoring by the Audit Committee, while auditing theexecution of duties by Directors and Executive Officers of acompany with three committees (nomination, audit, andremuneration committees). He is also simultaneously working toenhance the governance of the Group as a whole. In light of his trackrecord and high level of insight, the Company expects him tocontribute greatly to management of the Group and has accordingly
appointed him as an Outside Director. The Company has no interestin or relationship with him.

OMURA Emi

In addition to her global experience in handling abundant cases ininternational organizations and specialized insights in labor law asPartner of CLS HIBIYA TOKYOan attorney, OMURA Emi has extensive experience as an outside
LAW OFFICE;
director (audit & supervisory committee member) at listed
Outside Director of Digital Garage,
companies (B to C business). In particular, she is well versed in theInc. (scheduled to retire in June
practical aspects of sustainability and ESG legal fields such as2024);
human rights due diligence, and has extensive experience in
Outside Director, Audit andproviding objective advice and oversight on various issues that
Supervisory Committee Member ofcompanies face, including diversity management. In light of her
Valuence Holdings Inc.;
track record, extensive experience and considerable insights, theExternal Director (Audit &Company expects that she will apply them to the appropriate
Supervisory Committee Member) of
supervision of management in the Group and has accordingly
FOOD & LIFE COMPANIES LTD.
appointed her as an Outside Director. The Company has no interestin or relationship with her.

UCHIDA Akira- 108 -

(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 a standpoint that is 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.

- 109 -

(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.
New Audit Committee member OMURA Emi has global experience in handling abundant cases ininternational organizations and specialized insights in labor law as an attorney. The Audit
Committee Secretariat (three members) has been established to support the Audit Committee in its
auditing duties.
From fiscal 2021, the Audit Committee Members clearly documented in the Rules of Audit
Committee the right of approval of the Audit Committee concerning appointments and transfers of
Audit & Supervisory Board Members in the Group companies to strengthen the auditing functionin accordance with points made regarding the effectiveness evaluation of the Board 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.
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 it prepares an audit report.

- 110 -

2) Activities of Audit Committee
Audit Policy and Key Audit Matters
The Audit Committee effectively audits with a fair an unbiased attitude whether the execution ofduties by Executive Officers and Directors is in compliance with laws, regulations, and the
Articles of Incorporation of the Company and whether they are performing their duties efficiently
in accordance with the Company’s basic philosophy and the Group Vision, and it provides
necessary observations and recommendations, etc. as the basic audit policy. Based on this policy,
the Audit Committee sets “matters related to business and management foundation based on theGroup’s management policy” and the “status of efforts to maintain and improve sound andsustainable company structure” as Key Audit Matters (KAM) for the current fiscal year, andperforms audits from a perspective of governance, risk, and compliance.
Overview of Audit Activities
In the current fiscal year, the Audit Committee held a total of 24 meetings. The attendance of each
Audit Committee member at the meetings is as follows.
Category

Name

Attendance at the meetings of the
Audit Committee

Chairperson of Audit Committee(outside)

HAKODA Junya

23/24

Audit Committee Member (full-time)

HAMADA Kazuko

24/24

Audit Committee Member (outside)

SATO Rieko (Note 1)

22/24

Audit Committee Member (outside)

SEKI Tadayuki

24/24

Audit Committee Member (outside)

KATAYAMA Eiichi (Note 2)

17/17

Audit Committee Member (outside)

OMURA Emi (Note 3)–

Note 1: Retired on May 23, 2024.
Note 2: Assumed office on May 25, 2023 and retired on May 23, 2024.
Note 3: Assumed office on May 23, 2024.

To improve the effectiveness of audits and discussions at the Audit Committee, Audit Committee
meetings are held separately from the Audit Committee, and they were held 18 times during thecurrent fiscal year. The average duration of a combined Audit Committee and Audit Committee
meeting is approximately two hours. The main activities of the Audit Committee and Audit
Committee meetings are 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 they promoted the construction of an organization audit
structure while working to share information with other members.
Major activities of the Audit Committee
Matters to be resolved
・ Audit policy, KAM, audit plan, allocation of work
・ Independent Auditor’s Report, Audit findings
・ Reappointment of Accounting Auditor, Consent to audit fees・ Group company corporate auditor structure for next fiscal year
Matters to be discussed
・ Appropriateness of audits by the Accounting Auditor and evaluation of the Accounting
Auditor・ Regarding Key Audit Matters (KAM)- 111 -

Matters to be reported
・ Reports from the Internal Audit Division
・ Reports from the Accounting Auditor (financial reports, etc.)
・ Receive audit reports from corporate auditors of other Group companies
・ Reports from the finance division (financial reports, financial conditions, etc.)
・ Status of compliance with laws and regulations (collaboration with Legal Division andCompliance Committee)
・ Construction and operation status of internal control system
Major activities of the Audit Committee meetings
・ 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・ Prior consultation on matters to be resolved at the Audit Committee
・ Reports from the full-time Corporate Auditors
Based on the information received through these discussions, the Audit Committee makes reportsmonthly to the Board of Directors and offers guidance and proposals in the form of “audit
findings” regarding matters deemed to be of particular importance.
3) Enhancement of organizational audits
The Company has established an organizational audit system, as shown in the chart below, inwhich the Audit Committee, Internal Audit Division, and the corporate auditors of other Group
companies always share information on issues discovered through regular meetings and reports
and work together to resolve such issues. In addition to the Audit Committee, the Internal Audit
Office and the corporate auditors of other Group companies hold regular meetings with the
Accounting Auditor, and the content of these meetings is shared with the Audit Committee in aneffort to enhance organizational auditing throughout the Group.
Organizational audit structure chart- 112 -

(ii) Status of internal audit
1) Organization, members, and procedures of internal audit
The Company has established an independent Internal Audit Division (eight 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 the 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 appointments 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
72 years
Note: The Company is a holding company jointly established by The Daimaru, Inc. andMatsuzakaya Holdings Co., Ltd. through the 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
OJIMA Koji (Consecutive audit period: 1 year)
SHIBAYAMA Yoshihisa (Consecutive audit period: 7 years)
MATSUURA Hiroshi (Consecutive audit period: 7 years)
4) Breakdown of support staff for audit operations
Support staff for financial audit operations consists of 24 certified public accountants and 42
others.
5) Policies and reasons for selecting audit firm
The Audit Committee draws up criteria in advance for selecting and evaluating the Accounting
Auditor, which are composed of matters relating to the auditor’s independence, expertise andother aspects 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 accountthe opinions of the management team, etc. and then makes decisions on proposals for the 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- 113 -

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 validity 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

136

3

139

–

Consolidated
subsidiaries

195

3

247

–

331

6

387

–

Total

2) Remuneration to companies which comprise 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

–

332

–

96

Consolidated
subsidiaries

9

8

11

–

9

341

11

96

Total
Note:

The content of non-audit services for the Company is accounting system-related support services, etc.

When outsourcing non-audit services, the Company confirms that the services to be provided will
not cause any impediments to the independence of the Accounting Auditor, etc. and obtains theprior approval of the Audit Committee.
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.
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.

- 114 -

(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 Mediumterm Business Plan to ensure that officer remuneration functions as an incentive for achieving andpromoting sustainability management, and the Policy has been revised accordingly and is now in
effect.
<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 for Directors and Executive Officers of Daimaru Matsuzakaya
Department Stores Co. Ltd. and PARCO Co., Ltd. and Representative Directors of JFR Card Co.,
Ltd., J. FRONT CITY DEVELOPMENT Co., Ltd., and J. Front Design & Construction Co., Ltd.
(“eligible officers of major subsidiaries of the Group”), which are major subsidiaries of the Group.
1) 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.
2) Establish a remuneration system that facilitates the achievement of duties (mission) based on
management strategies of professional corporate managers.
3) Remuneration levels that can secure and retain human resources who have the desirable
managerial talent qualities required by the Company.
4) Increase shared awareness of profits with shareholders and awareness of shareholder-focusedmanagement.
5) Enhanced transparency and objectivity in the remuneration determining process.
<How to determine remuneration levels>
To make quick responses to changes in the external environment and the market environment, theCompany refers to objectively verifiable survey data from specialist external organizations andadopts the officer remuneration levels of companies in the same industry (department stores /retailers) and companies of a comparable size (selected based on market capitalization andconsolidated operating profit) in other industries as a benchmark and compares the remunerationlevels of its Executive Officers and Directors with the benchmark every year. The same treatment
is applied to the eligible officers of major subsidiaries of the Group.

- 115 -

<Composition of remuneration>
Executive Officer
Remuneration for Executive Officers shall comprise basic remuneration (monetary remuneration)in accordance with mission grade, bonuses (monetary remuneration) based on individual
evaluations conducted each business year, and performance shares linked to the consolidated
performance achievement rate, etc. provided in the Medium-term Business Plan as a stock-based
remuneration system (trust-type stock-based remuneration). The performance indicators forbonuses and performance shares were selected, as shown in the table below, with an awarenessthat they function as sound incentives for the achievement of KPIs and sustainable growth in the
final year of the Medium-term Business Plan.
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
Quantitativeevaluation*2<50%>

Fiscal year’s
financial
evaluation

Bonuses(variable)

Qualitativeevaluation*2<50%>

Consolidated
operating profit*3

50

Level ofachievement ofaction plan forachieving individual
mission30

Fiscal year’s Level of
non-financial achievement ofevaluation
action plan forachieving nonfinancial targets inline with materiality
issues20[Short term: 40%] Base amount by mission grade × Performance achievement
factor*4*4. Calculated based on the following measures of achievement*4
Annual payment
Evaluation
weights (%)

Details
Consolidated operating profit

in stocks*6100[Medium to long term: 60%] Base amount by mission grade × Performance
Performanceachievement factor*5
linked stock- *5. Calculated based on the following measures of achievement
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*6
10
2 emissions)Non-financial indicators
Goal achievement for ratio of<20%>
10
women in management
positions*2.

For the eligible officers of major subsidiaries of the Group, the quantitative evaluation is 70% and the qualitative evaluation
30%, with the evaluation weights for the qualitative evaluation being 20% for the achievement of action plans to achieve
individual missions and 10% for the achievement of action plans to achieve non-financial goals in line with materiality.
*3. 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, 5. The performance-linked factor for performance-linked stock-based remuneration is calculated by the following calculation
method: The rate of change for the ratio of women in management positions is evaluated using the fiscal 2020 results as thereference. Actual results = Results - fiscal 2020 results, Target = 26% - fiscal 2020 results- 116 -

Performance target achievement
200% or more
0% or more but less than 200%
Less than 0%*6.

Performance-linked factor
2
Actual results ÷ Target
0

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.

(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 evaluations and thefiscal year’s non-financial indicators, which include qualitative evaluations. For the fiscal year’s
financial indicators, the Company evaluates the level of achievement against target figures set for
consolidated financial indicators announced after a resolution by the Board of Directors at thestart of each fiscal year. (Where the officer is in charge of a certain business, the target figures forthat business are used.) For the fiscal year’s non-financial indicators, the Company evaluates thelevel of achievement of the action plan for achieving each officer’s individual mission for eachfiscal year and the action plan for achieving the Company’s materiality. Taking the weighting of
the fiscal year’s financial and non-financial indicators as 50:50, two-fifths of the fiscal year’s nonfinancial indicators (20% of the total weight) is taken as the evaluation of the action plan forachieving the Company’s materiality issues. For the fiscal year’s financial indicators, theevaluation is made based on the achievement 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 in charge of a certain business, the target figures for operating profit for thatbusiness decided by the Company’s Board of Directors at the start of the fiscal year are used. The
Company selected the indicators referred to above because they are linked to the respective
indicators mentioned in the Medium-term Business Plan. However, since the target figures of theconsolidated financial indicators for FY2023, the final year of the Medium-term Business Plan,are lower than the initially planned target figures, the Compensation Committee has decided toapply a revised standard amount of bonus set for each mission grade, which is calculated by
dividing the target figures of the consolidated financial indicators (where the officer is in chargeof a certain business, the target figures for that business are used) to be announced at the
beginning of the current fiscal year after a resolution by the Board of Directors by the target
figures of the consolidated financial indicators for the relevant fiscal year in the Medium-term
Business Plan. For the fiscal year’s non-financial indicators, the President and Representative
Executive Officer, who is the evaluator, conducts an interview with each Executive Officer at thestart 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. Under this system, 60% of the entire amount of performance-linked
stock-based remuneration will be issued in a single issuance at the end of the Medium-term
Business Plan, with the remaining 40% to be issued each year in order to promote managementfrom the shareholders’ perspective. Of the portion issued at the end of the Medium-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, this being the numerical targets of the Mediumterm Business Plan (IFRS based) announced following a resolution of the Board of Directors. The
remaining 20% is evaluated based on non-financial indicators. For non-financial targets, thesystem bases the evaluation on a weighting of 10% for GHG reductions (scope 1 & 2 emissions)- 117 -

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 with theperformance achievement rate is between 0% and 200%. However, since the target figures of theconsolidated financial indicators for FY2023, the final year of the Medium-term Business Plan,are lower than the initially planned target figures, the Compensation Committee has decided toapply a revised reference point set for each mission grade, which is calculated by dividing thetarget figures of the consolidated financial indicators (where the officer is in charge of a certain
business, the target figures for that business are used) to be announced at the beginning of thecurrent fiscal year after resolution by the Board of Directors by the target figures of theconsolidated financial indicators for the relevant fiscal year in the Medium-term Business Plan.
[Performance-linked stock-based remuneration targets]
KPI

Target figures for medium
to long term

Evaluation
weights

Profitability(i)Consolidated operating profit¥40,300 million (FY2023)

40%

Efficiency

(ii)

ROE

7% (at the end of FY2023)

40%

(iii)

GHG reductions (Scope 1 & 2 emissions)(iv)

Raise the ratio of women in management
positionsNon-financial

40% reduction (comparedwith FY2017)26% (at the end of
FY2023)

10%
10%

Note:

KPI stands for Key Performance Indicator.

Note:

For the short term, only 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. However, since the target figures of theconsolidated financial indicators for FY2023, the final year of the Medium-term
Business Plan, are lower than the initially planned target figures, the Compensation
Committee has decided to apply a revised reference point set for each mission grade,which is calculated by dividing the target figures of the consolidated financial indicators(where the officer is in charge of a certain business, the target figures for that businessare used) announced at the beginning of the relevant fiscal year after resolution by the
Board of Directors by the target figures of the consolidated financial indicators for the
relevant fiscal year in the Medium-term Business Plan.

Note:

In the medium to long term, we will use the ¥40,300 million target established for
FY2023 in the Medium-term Business Plan.

(Targets and results of indicators for performance-linked remuneration in the current fiscal year
(from March 2023 to February 2024))
Type of remuneration
Bonuses

Performancelinked stockbased
remuneration

Note:(Millions of yen)
Results

TargetFinancial
perspective

Consolidated operating profit

38,50043,048

Short term

Consolidated operating profit

38,50043,048

Consolidated operating profit

40,30043,0487%

8.1%

GHG reductions

40% reduction(compared with
FY2017)(55)%

Ratio of women in management
positions

26% (at the endof FY2023)

22.5%

ROE
Medium term

Results of GHG reductions are the forecast as of February 29, 2024.
- 118 -

<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 three independent Outside Directors and the chairperson of
the Board of Directors, who is an internal Director and does not execute business, and it is headedby an independent Outside Director. Since the members of the Company’s Remuneration
Committee and its Nomination Committee are the same, they can use a common evaluation sheet
for both committees to coordinate together in activities related to the areas of nomination andremuneration of management, including eligible officers of major subsidiaries of the Group. The
Remuneration Committee determines the policy on deciding the contents of individual
remuneration for eligible officers of major subsidiaries of the Group, and the contents ofindividual remuneration for Directors and Executive Officers of the Company. The Committee
also deliberates on and resolves internal regulations and other rules for remuneration of theCompany’s Directors and Executive Officers. The individual remuneration details for the eligible
officers of major subsidiaries of the Group are deliberated on by the nomination and remunerationcommittees (among the Group’s major subsidiaries, those committees are established at Daimaru
Matsuzakaya Department Stores Co. Ltd. and PARCO Co., Ltd. and whose members include
independent Outside Directors of the Company), which are established at the discretion of eachcompany, and are decided by each company’s Board of Directors after being resolved by eachcompany’s Annual Shareholders Meeting if such approval is 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 13 meetings.
In addition, the Company appoints external remuneration consultants with a view to introducing
objective viewpoints from outside the Company and expertise on Officer Remuneration Systems.
With their support, the Company reviews its remuneration levels and remuneration system in lightof 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 on 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 incentives to them to work for the improvement of the- 119 -

financial performance and corporate value of the Company from the medium- to long-term
perspective.
The eligible officers of major subsidiaries of the Group shall adopt the same policy for theiracquisition 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 ofrecipient
Directors (andother officers)(Persons)

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

Performancelinked bonuses

Performancelinked stockbased
remuneration

Nonperformancelinked stockbased
remuneration

207

161

–

–

45

9

[117]

[95]

[–]

[–]

[21]

[7]

Executive
Officer

377

182

104

90

–

10

Total

584

344

104

90

45

19

Category of
officer

Director[of which,OutsideDirector]

Notes:

1.
2.
3.

4.

Other than the above, the total amount of remuneration, etc. received by Outside Directors from subsidiaries of theCompany in the current fiscal year is ¥7 million.
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.
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 the degree of achievement of single fiscal year results and the degree of achievement of
the Medium-term Business Plan targets, as well as non-performance-linked stock-based remuneration for Directors
who do not execute business. The results of indicators related to the calculation of bonuses and performance shares,
including the current fiscal year, are described in “Targets and results of indicators for performance-linked
remuneration in the current fiscal year (from March 2023 to February 2024).”
Figures in the “performance-linked bonuses” and “performance-linked stock-based remuneration” columns represent
amounts recognized as provisions (expenses) (standard amounts) before adjustment for the results of performance
evaluations for the fiscal year ended February 2024. The actual amounts to be paid and amounts to be paid on an
individual basis will be determined by a meeting of the Remuneration Committee scheduled in or after April 2024.

- 120 -

(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
Ryoichi59

Director

Reporting company

43

–

–

16

HAMADA Kazuko

29

Director

Reporting company

21

–

–

8

YAGO Natsunosuke

16

Director (Note 1) Reporting company

13

–

–

3

HAKODA Junya

21

Director (Note 1) Reporting company

18

–

–

3

UCHIDA Akira

20

Director (Note 1) Reporting company

17

–

–

3

SATO Rieko

16

Director (Note 1) Reporting company

13

–

–

3

SEKI Tadayuki

19

Director (Note 1) Reporting company

16

–

–

3

KOIDE Hiroko

15

Director (Note 1) Reporting company

12

–

–

3

KATAYAMA Eiichi

11

Director (Note 1) Reporting company

9

–

–

2

YOSHIMOTO
Tatsuya

115

Executive Officer Reporting company

46

26

43

–

ONO Keiichi

43

Executive Officer Reporting company

20

12

11

–

WAKABAYASHI
Hayato48

Executive Officer Reporting company

23

14

11

–

HAYASHI Kenichi–

Executive Officer Reporting company

–

–

–

–

HAYASHI Naotaka

38

Executive Officer Reporting company

18

10

10

–

42

Executive Officer Reporting company

20

11

11

–

27

Executive Officer Reporting company

13

7

7

–

OCHIAI Isao28

Executive Officer Reporting company

13

8

7

–

MORITA Kosuke–

Executive Officer Reporting company

–

–

–

–

YAMAZAKI Shiro

26

Executive Officer Reporting company

13

6

7

–

NOMURA Taiichi–

Executive Officer Reporting company

–

–

–

–

NOGUCHI Hideki

28

Executive Officer Reporting company

13

8

7

–

IMAZU Takako–

Executive Officer Reporting company

–

–

–

–

MATSUDA
Hirokazu
UMEBAYASHI
Akira

Notes:

1.
2.
3.
4.

Independent Outside Director
Lists only those who were officers as of the Shareholders Meeting of May 23, 2024.
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.

- 121 -

(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 increasing corporate value inthe 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 the validation of the rationale forcross-shareholdings, 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. However, this does not apply to shares where it
has been recognized that they are necessary for the promotion of the Group’s business strategy
and that the holding of such shares will contribute to increasing corporate value in the medium
to long term through the validation of the rationale for holding them.
 The Group annually validates shares that are already held, and for those that are judged to not
be rational, the Group will negotiate with the companies that hold them and reduce them asappropriate upon receiving consent regarding sale method, period, etc.
The number of the Group’s cross-shareholdings as of February 29, 2024, had decreased by 3
stocks compared with the previous fiscal year-end to 145 stocks (of which the number of stocks oflisted companies was 11).
(Method for validation of rationale)
The Group annually validates the rationale for holding individual issues from the following
perspective using the Group’s common validation method.
 Qualitative perspective
The perspective relating to business strategies, such as maintaining harmonious and favorable
business relationships with companies that make up the local community together, corporate
customers, and business partners, and securing supply chains Quantitative perspective
The perspective relating to whether profitability by holding shares, including related trading
profits and dividends, exceeds 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, the judgment
regarding the continuation or reduction of held shares, and the reduction plan are discussed at
the meeting of the Board of Directors held every August, and the Group confirms the reduction
result at the meeting of the Board of Directors held in the following March.

- 122 -

□

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.

□

Schedule for validation of rationale, negotiation and reduction*

Implementation
periodContent of
implementation

X

First half

August: Efforts in : Year X (first year),X + 1 year
Secondhalf

MarchFirst half

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

X + 2 years
Secondhalf

MarchFirst half

AugustSecondhalf

Operating unit

Validation of rationale
Development of reduction
plan

Board ofDirectors

Negotiation/reduction

Decision on
Discussion continuation/
reduction
Confirmation

Negotiation/
reduction result(Execution of voting rights)
The Group determines whether to exercise its voting rights pertaining to cross-shareholdings
considering both whether such exercise will contribute to the sustainable growth and the mediumto long-term enhancement of corporate value of the company whose shares are held and whether
such exercise will contribute to the sustainable growth and the medium- to long-term
enhancement of corporate value of the Group. Particularly, in regard to proposals that we consider
to be of high priority with respect to strengthening corporate governance, such as proposals
relating to the corporate governance system (selection of officers), proposals relating toshareholder return (appropriation of surplus), and proposals that have an impact on shareholder
value (introduction of takeover defense measures), we will establish policies upon which to basejudgment of our exercise of voting rights, and acting as the Group as a whole, we will respond to- 123 -

them in line with such policies. We will engage in dialogue with companies whose shares we holdif necessary.
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

129

10

(5)

–

134

22,605

1,392(5,494)(971)

17,532

Reason for increasein number of shares(Increased shares)
Start-up companies
with innovativetechnologies andbusiness models, etc.
(Purpose)
Creation of new
businesses throughbusiness alliances
and transformation ofexisting businesses* Of the seven issues, the acquisition was made by JFR MIRAI CREATORS Fund, a corporate venture capital fund.

(Shares other than those 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

16

–

(5)

–

11

2,916

3

(1,073)

335

2,181

Increase

Decrease

Increase or
decrease inmarket value

3

–

(3)

–

–

1,229

–

(1,229)––Reason for increasein number of shares(Increased shares)
Regular contributions
to stock ownership
plans(Purpose)
Maintaining business
relationships(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–

The ratio of the amount recorded in the consolidated statement of financial position of crossshareholdings to the equity attributable to owners of parent is 5.18%.

- 124 -

□

Changes in the number of cross-shareholdings (listed shares excluding deemed shareholdings)(Billions of yen)
12.0
120

(Issues)

64

70

60

Amount recorded on consolidated

100
10.0
48
80
8.0

statement of financial position (Billions of

60

yen)
Number of issues held (Issues)

50

41

40
60
6.0

11.9
119
9.9
99

11.2
112

26
8.6
86

40
4.0
20
2.0

23

30

21
16

40
4.0

4.4
44

11
3.3
33

2.9
29

FY2021

FY2022

21
2.1

0
0.0

20
10
0

FY2015FY2016FY2017FY2018FY2019- 125 -FY2020

FY2023

(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)

6

2

–

–

8

Carrying amount(Millions of yen)

1,740

889

–

(585)

2,044

Increase

Decrease

Increase or
decrease inmarket value

Reason for increasein number of shares(Increased shares)
Start-up companies
with innovativetechnologies andbusiness models, etc.
(Purpose)
Creation of new
businesses throughbusiness alliances
and transformation ofexisting businesses(Shares other than those not listed)
Previous fiscal
year

Current fiscal
year

Number of issues(security titles)

1

–

–

–

1

Carrying amount(Millions of yen)

21

–

–

1

22

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 for all cross-shareholdings using the Group’s common
validation method.
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 and Quantitative effects ofshareholding andoverview of businesscomprehensive judgment
alliance, etc.

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

12,000(Comprehensive
judgment)

12,000(Purpose of holding)・ Made judgment tocontinue to holdtaking into
consideration the factthat this company is
・ Promotion of arts andindispensable forculturedeveloping art andculture in the area inwhich stores of
Daimaru Matsuzakaya
Department Storesexist.
・ Contribution tocommunity
development

Misonoza Theatrical
Corporation

22

21- 126 -

(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)

91

1

(2)

–

90

Carrying amount(Millions of yen)

2,628

50

(466)

–

2,212

Reason for increasein number of shares(Increased shares)
Start-up companies
with innovativetechnologies andbusiness models(Purpose)
Creation of new
businesses throughbusiness alliances
and transformation ofexisting businesses(Shares other than those not listed)
Previous fiscal
year

Increase

Decrease

Increase or
decrease inmarket value

Current fiscal
year

Number of issues(security titles)

11

–

(5)

–

6

Carrying amount(Millions of yen)

2,574

–

(1,073)

284

1,785

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)*

3

–

(3)

–

–

Carrying amount(Millions of yen)

1,229

–

(1,229)––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 Group validates the rationale for all cross-shareholdings using the Group’s common
validation method.
The quantitative effects of shareholdings have not been provided from the viewpoint of trade
secrets, etc.
Of the issues held at the end of the current fiscal year, it is agreed that one will be sold in their
entirety.

- 127 -

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

Reason for Holding of
Quantitative effects of
Purpose of holding and overview
increase intheshareholding and comprehensiveof business alliance, etc.
number of Company’s
judgment
sharesshares(Segment)(Quantitative standard)

Department store(Purpose of holding andoverview of transaction)

Toho Gas Co., Ltd.
669

568,205

Maintaining good
relationships



Stable merchandise sales

568,205

BROADCASTING CO.,LTD.

(Quantitative standard)

Department store(Purpose of holding andoverview of transaction)


Maintaining good
relationships

Advertisement including
public relations activities

200,000 

Department store(Purpose of holding)Corporation

Contribution tocommunity development

Promotion of arts andculture378

360

41,10082,200 (Segment)
Department store(Purpose of holding andoverview of transaction)

ANA HOLDINGS INC.*1
134

227



Maintaining good
relationships



Stable merchandise sales- 128 -

–

Yes

–

Yes

–

None

–

None

Not met(Comprehensive judgment)
305

Misonoza Theatrical

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)(Segment)
200,000

569

CHUBU-NIPPON

402



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

(Quantitative standard)

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)

Not met(Comprehensive judgment)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)

70,903

6,600(Segment)(Quantitative standard)

Department store

144,803 (Purpose of holding andoverview of transaction)

Meiko Trans Co., Ltd.*1

108

Reason for Holding of
Quantitative effects of
Purpose of holding and overview
increase intheshareholding and comprehensiveof business alliance, etc.
number of Company’s
judgment
sharesshares

Maintaining good
relationships



Stable merchandise sales

OKAYA & CO., LTD.

93

67

–

310,400

OSAKA GAS CO., LTD.*2

–

686

–

86,337138–

21,750

THE ROYAL HOTEL,

None

–

None

–

–

Yes

–

–

None

–

–

None

(Quantitative standard)

Department store(Purpose of holding andoverview of transaction)


Maintaining good
relationships



Stable merchandise sales–

LIMITED*2–



Hakuyosha Co., Ltd.*2–

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.

(Segment)

–

–



173

6,600

Not met(Comprehensive judgment)30- 129 -

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
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 of
yen)

–

1,155

Rinnai Corporation*2
–

11

–

5,000

Yamaguchi Financial Group,
Inc.*2–

Reason for Holding of
Quantitative effects of
Purpose of holding and overview
increase intheshareholding and comprehensiveof business alliance, etc.
number of Company’s
judgment
sharesshares

–

–

–

None

–

–

–

None

4

*1. Partially sold in the current fiscal year upon reaching an agreement*2. Fully sold in the current fiscal year upon reaching an agreement- 130 -

(Deemed shareholdings)
Shares of which the holding is considered by the Company to contribute to increasing corporate
value in the medium to long term have been added to the retirement benefit trust for the purposeof achieving sound pension financing in Daimaru Matsuzakaya Department Stores Co. Ltd., asubsidiary of the Company. The right of instructions for the exercise of voting rights is possessedby Daimaru Matsuzakaya Department Stores Co. Ltd.
The quantitative effects of shareholdings have not been provided from the viewpoint of trade
secrets, etc.
In addition, the Company completed the sale of all three issues held at the end of the previous
fiscal year with the agreement of the other party in the current fiscal year.

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

–

Quantitative effects ofshareholding andcomprehensive judgment

–

–

–

Yes

–

–

–

Yes

–

–

–

None

300,000

OSAKA GAS CO., LTD.

–

663

–

135,000

YAMATO HOLDINGS CO.,
LTD.
–

310

–

102,700OUG Holdings Inc.
–

Reason for Holding of
theincrease in
number of Company’s
sharessharesPurpose of holding andoverview of business alliance,
etc.

255

- 131 -

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, 2023 to February 29, 2024) and thenon-consolidated financial statements for the fiscal year (from March 1, 2023 to February 29, 2024) 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.

- 132 -

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

As of February 28, 2023

As of February 29, 2024

Millions of yen

Millions of yen

AssetsCurrent assets
Cash and cash equivalents

7

Trade and other receivables
Other financial assets

8,28
10,37

Inventories
Other current assets

911

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

12

Right-of-use assets
Goodwill

14
13,16

Investment property
Intangible assets

15
13

Investments accounted for using equity method 17,20
10,21,
Other financial assets
37
Deferred tax assets
19
Other non-current assets

11

Total non-current assets
Total assets- 133 -

39,874
129,12171,342
143,321

10,836
16,932

11,43915,193

5,094

5,203

201,860

246,501

469,401
119,501

458,623
107,623995
187,247

560
181,985

7,797
41,402

7,886
23,531

79,711

72,034

3,137
9,897

3,636
12,343919,092

868,225

1,120,953

1,114,726

Notes

As of February 28, 2023

As of February 29, 2024

Millions of yen

Millions of yen

Liabilities and equity
Liabilities
Current liabilities
Bonds and borrowings

20,21

63,53057,330Trade and other payables
Lease liabilities

22
14,20

133,835
28,411

151,230
27,222Other financial liabilities

20,21,
37

29,97528,362

Income tax payables
Provisions

24

1,527
2,397

7,183
2,487

Other current liabilities

25,28

58,27657,445317,953

331,261

Total current liabilities
Non-current liabilities
Bonds and borrowings
Lease liabilities

20,21
14,20

185,593
136,414

156,618
123,228

Other financial liabilities

20,21,
37

35,29034,798Retirement benefit liability
Provisions

23
24

16,754
8,699

15,980
6,746

Deferred tax liabilities
Other non-current liabilities

19
25

48,366469

51,439419

431,589389,232

749,542

720,494

Total non-current liabilities
Total liabilities
EquityShare capital
Capital surplus

26
26

31,974
189,068

31,974
189,172

Treasury shares
Other components of equity

26
26(14,466)
10,654(14,231)
7,383

Retained earnings

26

142,153

167,600

Total equity attributable to owners of parent

359,385

381,898

Non-controlling interests

12,025

12,333

Total equity
Total liabilities and equity- 134 -

371,410394,232

1,120,953

1,114,726

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

Revenue
Cost of sales

Fiscal year ended February 28,
2023

Fiscal year ended February 29,
2024

Millions of yen

Millions of yen

28
30

Gross profit

359,679(190,142)

407,006(211,490)

169,536

195,516

Selling, general and administrative expenses

31(144,682)(151,185)

Other operating income
Other operating expenses

29
32

4,540
(10,336)

3,673(4,955)

19,05943,048871(5,218)

1,609(4,847)

Share of profit (loss) of investments accounted forusing equity method

2,161

1,532

Profit before tax

16,873

41,343Operating profit
Finance income
Finance costs

Income tax expense33
33(2,611)(11,096)

Profit19

14,26230,247

Profit attributable to:
Owners of parent

14,237

29,913

Non-controlling interests
Profit25

333

14,26230,247

54.32
54.30

114.06114.06

Earnings per share
Basic earnings per share (Yen)
Diluted earnings per share (Yen)35
35- 135 -

Consolidated Statement of Comprehensive Income
Fiscal year ended February 28,
2023

Fiscal year ended February 29,
2024

Millions of yen
14,262Millions of yen
30,24734,37

823(1,638)

34

1,176

2,276

34

(7)

(75)

1,992

562

34

(1)

20

34

144

103

34

4

1

147

126

2,140

688

16,40230,935

Owners of parent
Non-controlling interests

16,38430,561

18

373

Comprehensive income

16,40230,935

Notes

ProfitOther 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
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
Comprehensive income
Comprehensive income attributable to:- 136 -

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

Balance at March 1, 2022

Share capital

Capital surplus

Treasury shares

Millions of yen

Millions of yen

Millions of yen

Exchangedifferences ontranslation offoreign
operations

Cash flow
hedgesFinancial assets
measured at fairvalue throughothercomprehensive
incomeMillions of yen

Millions of yen

Millions of yen

31,974

188,894(14,780)60(1)Profit

–

–

–

–

–

–

Other comprehensive income

–

–

–

148

(1)

822

–

–

–

148

(1)

822

Total comprehensive
income9,516

Purchase of treasury shares

26

–

–

(8)

–

–

–

Disposal of treasury shares

26

–

(0)

1

–

–

–

Dividends

27

–

–

–

–

–

–

–

–

–

–

–

–

–

175

322

–

–

–

–

–

–

–

–

109

–

174

314

–

–

109

31,974

189,068(14,466)209(2)10,448

Profit

–

–

–

–

–

–

Other comprehensive income

–

–

–

105

20

(1,647)

–

–

–

105

20

(1,647)

–

–

(7)

–

–

–

Obtaining of control ofsubsidiaries
Share-based paymenttransactions
Transfer from othercomponents of equity toretained earnings
Total transactions withownersBalance at February 28, 2023

Total comprehensive
incomePurchase of treasury shares

26

Disposal of treasury shares

26

–

(0)

0

–

–

–

Dividends

27

–

–

–

–

–

–

–

104

240

–

–

–

–

–

–

–

–

–

–

0

–

–

–

–

–

–

–

–

–

(1,749)

–

103

234

–

–

(1,749)31,974

189,172(14,231)

314

17

7,050

Share-based paymenttransactions
Change due to capital increaseof consolidated subsidiaries
Changes in ownership interestsin subsidiaries
Transfer from othercomponents of equity toretained earnings
Total transactions withownersBalance at February 29, 2024

- 137 -

Equity attributable to owners of parent
Notes

Balance at March 1, 2022
ProfitOther comprehensive income
Total comprehensive
incomeOther components of equity
Remeasurements of defined
benefit plans

Total

Millions of yen

Millions of yen

Non-controllinginterests

Total

Millions of yen

Millions of yen

Millions of yen

Retainedearnings

Total

Millions of yen

–

9,574

134,705

350,368

11,751

362,120––

14,237

14,23725

14,262

1,177

2,147

–

2,147

(6)

2,140

1,177

2,147

14,237

16,38418

16,402(8)

Purchase of treasury shares

26

–

–

–

(8)

–

Disposal of treasury shares

26

–

–

–

0

–

0

Dividends

27

–

–

(7,857)(7,857)(64)(7,921)

–

–

–

–

319

319

–

–

–

497

–

497

(1,177)(1,067)

1,067

–

–

–

(1,177)(1,067)(6,789)(7,368)255(7,113)–

10,654142,153359,385

12,025

371,410

Obtaining of control ofsubsidiaries
Share-based paymenttransactions
Transfer from othercomponents of equity toretained earnings
Total transactions withownersBalance at February 28, 2023
ProfitOther comprehensive income
Total comprehensive
income––29,91329,913333

30,247

2,169

648

–

648

40

688

2,169

648

29,91330,561373

30,935

–

(7)

–

(7)

Purchase of treasury shares

26

–

–

Disposal of treasury shares

26

–

–

–

0

–

0

Dividends

27

–

–

(8,386)(8,386)(64)(8,450)

–

–

–

344

–

344

–

–

–

–

6

6

–

–

–

0

(7)

(6)

(2,169)(3,919)

3,919

–

–

–

(2,169)(3,919)(4,466)(8,048)(65)(8,113)–

7,383

167,600

381,898

12,333394,232

Share-based paymenttransactions
Change due to capital increaseof consolidated subsidiaries
Changes in ownership interestsin subsidiaries
Transfer from othercomponents of equity toretained earnings
Total transactions withownersBalance at February 29, 2024

- 138 -

4) Consolidated Statement of Cash Flows
Notes

Fiscal year ended February 28,
2023

Fiscal year ended February 29,
2024

Millions of yen

Millions of yen

Cash flows from (used in) operating activities
Profit before tax

16,873

41,343

Depreciation and amortization expense

49,10746,492

5,900
(871)

2,310
(1,609)

5,218

4,847

(2,161)(1,532)

(771)

(757)

Impairment loss
Finance income

16

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

2,102

1,302

Decrease (increase) in inventories(2,185)

3,748

Decrease (increase) in trade and other receivables(16,898)(13,010)

Increase (decrease) in trade and other payables

17,59918,001

Increase (decrease) in retirement benefit liabilities(2,661)(773)

Decrease (increase) in retirement benefit assets

3,360(2,306)

Other, net

1,944

(812)

76,55897,245123

150

SubtotalInterest received
Dividends received

170

899

(5,172)(4,803)(8,282)
2,083(4,679)1,880

65,48090,692

Purchase of property, plant and equipment(8,641)(7,030)

Proceeds from sales of property, plant andequipment

190

241

Purchase of investment property(3,043)(1,594)

Proceeds from sales of investment property

1,599

4,014

Purchase of intangible assets(3,099)(2,863)Purchase of investment securities(1,946)(1,885)Interest paid
Income taxes paid
Income taxes refund20

Net cash flows from (used in) operating activities
Cash flows from (used in) investing activities

Proceeds from sales of investment securities

2,072

22,179Purchase of shares of subsidiaries resulting inchange in scope of consolidation

20

(207)

–

Proceeds from refund of guarantee deposits

2,342

2,422

Other, net(2,638)(2,054)

Net cash flows from (used in) investing activities(13,371)

13,429- 139 -

NotesFiscal year ended February 28,
2023

Fiscal year ended February 29,
2024

Millions of yen

Millions of yen

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

20(24,000)(9,100)Net increase (decrease) in commercial papers

20(15,002)–

Proceeds from non-current borrowings

20

5,500

3,400

Repayments of non-current borrowings

20(15,150)(29,530)

Redemption of bonds

20,21(20,000)–

Repayments of lease liabilities

14,20(29,138)(29,088)

Purchase of treasury shares

(9)

(8)

(7,832)(8,362)

(64)

(64)

2

6

Net cash flows from (used in) financing activities(105,694)(72,746)

Net increase (decrease) in cash and cash equivalents(53,585)

31,375

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

93,27839,874181

92

39,874

71,342

Dividends paid
Dividends paid to non-controlling interests
Other, net

equivalents
Cash and cash equivalents at end of period- 140 -

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 29, 2024 comprise theCompany and its subsidiaries’ interests in the Group’s associates.
For the Group’s major business activities, please refer to “6. 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.

- 141 -

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.
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.
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
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.
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
as well 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 measures non-controlling interests at the proportionate share of the recognized amounts ofidentifiable net assets.
- 142 -

(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 foreignsubsidiaries 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 using the effective interest method.
(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.
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.
(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.
- 143 -

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.
(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.
Non-derivative financial liabilities include borrowings, bonds, trade payables, other short-termpayables, common gift certificates for department stores nationwide, deposits received, etc. These
financial liabilities are initially recognized at fair value and subsequently measured at amortized costbased on the effective interest method.
The Group derecognizes a financial liability when the financial liability is extinguished, i.e. when thecontractual obligation is discharged or cancelled or expires.
(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.”
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.
- 144 -

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

2 to 60 years
2 to 20 years
2 to 20 years(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.
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 significant intangible
assets with indefinite useful lives.
• Software

5 to 10 years(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 73 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.

- 145 -

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.
(13) Investment property
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”).
(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. The cash-generating unit is the smallest group of assets that generates cash inflows,from continuous use, that are largely independent of the cash inflows from other assets or groups ofassets.
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.
An impairment loss is recognized as profit or loss, if the carrying amount of an asset or cash-generating
unit exceeds the recoverable amount. For an impairment loss recognized in the past, when there is anindication of a reversal of impairment loss and a change in the estimates used to determine the recoverable
amount, the impairment loss is reversed to the recoverable amount. However, impairment losses related togoodwill are not reversed. An impairment loss is reversed up to the carrying amount that would have been
determined had no impairment loss been recognized, 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.
Net defined benefit liability or asset is determined as the present value of defined benefit obligation lessthe fair value of plan assets (including adjustments to the cap on 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.
Costs for defined contribution benefits are recognized as expenses in the period in which the employees
render the related service.
(16) Share-based payment
To ensure steady execution of the Medium-term Business Plan for realizing the Group Vision, theCompany has adopted a stock-based remuneration system for officers utilizing a trust (officer
remuneration BIP trust).
The officer remuneration 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- 146 -

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 acorresponding 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) 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. Revenue recognition by business segment is as follows:
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 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 determinedthat performance obligation is satisfied at the time when goods are delivered to customers,
revenue is recognized at the time of delivery of such goods. Payments for goods are received at
the time of delivery of the goods, which is the time when performance obligation is satisfied.
- 147 -

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, sales, supervision, 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. Revenue from sales of real estate is recognized at the time of delivery.
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) 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
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.
(19) Income tax
Income tax consists of current taxes and deferred taxes, and is recognized as profit or loss except for theitems that are recognized in other comprehensive income.
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.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply when temporary
differences are reversed based on the laws enacted or substantively enacted by the end of the reporting
period.
The recoverability of deferred tax assets is reviewed at the last day of every fiscal year after recognizing
deferred tax assets to the extent that it is probable that taxable profit will be available against which
deductible temporary differences, unused tax losses, and unused tax credits can be utilized. A deferred tax
liability is recognized for all taxable temporary differences in principle.
The Company and some of its subsidiaries apply the Japanese group relief system.

- 148 -

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.
In terms of the business environment, while the impact of COVID-19 on social and economic activities has
diminished, there are still uncertainties such as the emergence of geopolitical risks, slowdown in overseas
economies, and growing concerns of economic recession due to inflation and other factors. Given thesecircumstances, the Group factors in the effects of strategies and measures in each business and has madereasonable estimates that reflect the situation as of the end of the reporting period, based on the assumption thatdomestic spending will remain solid in FY2024 and inbound tourism demand will continue to increase. If
uncertainty further increases, the Group may revise the carrying amounts of assets and liabilities in futureaccounting 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. In calculating the value in use, future
cash flows generated from the use of the asset, future cash flows generated by its final disposal, and thediscount rate are used as estimation factors.
The forecasting period for future cash flows is estimated by considering the remaining useful life of therelevant asset.
Future cash flows before discounting are estimated based on the business plan. The main assumptions
include forecast for personal spending trend in Japan and projected inbound tourism demand, and the rateof sales growth after the period of business plan.
For the forecast for personal spending trends in Japan, which is the basis of revenue, the Group refers toforecast trends provided by several external specialist organizations, factors in the effect of measures in its
business plan, and sets the revenue for each of the relevant primary business segments for the following
fiscal year onward. In addition, in the outlook for inbound tourism demand, the Group creates a scenario
based on international shipping forecasts and tourism demand forecasts by external organizations, andforecasts the demand within the scope of that scenario.
Although it is difficult to forecast changes in the impact of consumption and other factors due to changes
in social and economic conditions, the Group has made certain assumptions and incorporated them into
the forecast of domestic consumer spending trends.
The sales growth rate for the period since the business plan is determined by making reference to longterm growth rates for the 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.

- 149 -

Moreover, the amounts of impairment losses and non-financial assets in the Department Store Businessand the SC Business are as follows.
Department Store BusinessImpairment losses(Millions of yen)
SC Business

1,654

29

Property, plant and equipment

228,220

201,597

Right-of-use assets

62,001

54,987

Intangible assets

3,799

871

109,518

5,050

Investment property(2) Recoverability of deferred tax assets
The Group recognizes deferred tax assets to the extent that it is probable that, after the scheduling, taxable
profit will be available against which deductible temporary differences can be utilized.
The judgment of the recoverability is made on the basis of an estimate of taxable profit, etc. for eachfuture fiscal year determined based on the Group’s business plan.
The significant assumptions in the Group’s business plan are forecast for revenue that incorporates theeffect of each business plan based on market growth rates predicated on forecast for personal spending
trends in Japan, the outlook for tourism demand, and the like in the Department Store Business, the SC
Business, and the Payment and Finance Business segments; forecast for revenue that incorporates new
development projects from the business plans in the Developer Business segment; and forecast for
operating profit taking into account the effects of cost reductions achieved through business structurereforms 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 and beyond.
The breakdown of deferred tax assets by major cause and their carrying amounts are stated in “19. 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 “23. Employee Benefits.”(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.”- 150 -

5. New Standards Not Yet Applied
The main new standards and interpretations that were newly established or revised by the date of approval of theconsolidated financial statements and which have not been early adopted by the Group are as follows.
The impact of the adoption of IFRS 18 Presentation and Disclosure in Financial Statements on the Group’s
consolidated financial statements is currently being reviewed.
Standard

IFRS 18

Presentation andDisclosure in
Financial Statements

Mandatory
application period(fiscal year
starting from)Group’s scheduled
application period

Overview of new and revised
standards

January 1, 2027

Fiscal year ending
February 29, 2028

New standard that replaces thecurrent IAS 1 accounting standard on
presentation and disclosure in
financial statements

6. 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, operation, etc.
of shopping centers. The Developer Business carries out development, sales, management, operation,interior decorating work, etc. of real estate. The Payment and Finance Business undertakes issuance andadministration, etc. of credit cards.
Due to the organizational restructuring effective March 1, 2023, real estate assets have been transferredfrom PARCO Co., Ltd. to J. FRONT CITY DEVELOPMENT Co., Ltd. Accordingly, the prior year’s
results for SC Business and Developer Business have been retroactively adjusted as if the transfer had
been effective from the beginning of the previous fiscal year (March 1, 2022).
(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.

- 151 -

Fiscal year ended February 28, 2023
Reportable segment
Other

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions of
yen

7,585

318,486

41,193359,679–

359,679

12,372

5,304

19,19014,72833,919(33,919)–

53,77955,252

12,889337,676

55,922

393,599(33,919)359,679

4,244

3,184

3,485

18,443899

19,343(283)

19,059Department
Store
SC BusinessBusiness

Developer
Business

Payment and
FinanceBusiness

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyen

215,295

52,72542,880

459

1,053

Total

215,754

Segment profit

7,529

External revenue
Inter-segment revenue

Adjustments Consolidated

Finance income

871

Finance costs(5,218)

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

2,161

Profit before tax

16,873

Segment assets

544,939302,219

134,846

80,272

1,062,277

132,614

1,194,892(73,938)

1,120,953

Depreciation andamortization expense

30,624

13,915

4,313

158

49,012

1,460

50,472(1,365)

49,107

Impairment loss

3,887

2,006

–

–

5,894

6

5,900

–

5,900

Investments accounted
for using equity
method22,26041

996–

23,299156

23,455

17,94741,402

Capital expenditures

12,057

2,596

5,735

128

20,517

1,272

21,790780

22,570

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 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 profit 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 is adjusted to operating profit in the consolidated financial statements.

- 152 -

Fiscal year ended February 29, 2024
Reportable segment
Other

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions of
yen

6,148

368,501

38,505407,006–

407,006

11,559

6,967

20,103

13,42033,523(33,523)–

57,94478,418

13,115

388,604

51,925440,530(33,523)

407,006

9,414

7,437

2,583

43,022

1,370

44,392(1,343)43,048Department
Store
SC BusinessBusiness

Developer
Business

Payment and
FinanceBusiness

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyen

238,62956,864

66,859

496

1,080

Total

239,125

Segment profit

23,587External revenue
Inter-segment revenue

Adjustments Consolidated

Finance income

1,609

Finance costs(4,847)

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

1,532

Profit before tax

41,343

Segment assets

547,074

297,665

144,221

84,2681,073,229

79,985

1,153,214(38,488)

1,114,726

Depreciation andamortization expense

29,72812,9194,295

177

47,1201,154

48,275(1,782)

46,492

Impairment loss

1,654

29

179

–

1,864

11

1,875

435

2,310

Investments accounted
for using equity
method22,481

51

841–

23,374

156

23,5301

23,531

Capital expenditures

6,322

8,464

2,078

52

16,918575

17,493(5,405)12,087

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 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 profit 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 is adjusted to operating profit in the consolidated financial statements.

(3) Information by geographical area
Revenue from external customers
This information has been omitted, as revenue from external customers in Japan accounts for a large
percentage of 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.
- 153 -

7. Cash and Cash Equivalents
The breakdown of cash and cash equivalents is as follows:
As of February 28, 2023

As of February 29, 2024

Millions of yen

Millions of yen

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

2,744

3,228

37,12968,11439,874

71,342

8. 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, 2023

As of February 29, 2024

Millions of yen

Millions of yen

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

2,667
60,67454,553
6,832
4,392

2,564
79,56549,879
6,821
4,491

Total

129,121

143,321

9. Inventories
The breakdown of inventories is as follows:
As of February 28, 2023

As of February 29, 2024

Millions of yen

Millions of yen

Merchandise and finished goods
Work in process
Real estate for sale in process
Supplies
Total

12,051
30
4,304
546

12,664
147
2,010
371

16,932

15,193

The amount of inventories that were recognized as expenses was ¥175,548 million in the fiscal year ended
February 28, 2023 and ¥192,734 million in the fiscal year ended February 29, 2024.
The amounts of write-down of inventories recognized as expenses are as follows:
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Millions of yen
Amounts of write-down

Millions of yen
69- 154 -

85

10. Other Financial Assets
The breakdown of other financial assets is as follows:
As of February 28, 2023

As of February 29, 2024

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
SharesOther
Financial assets measured at fair value throughother comprehensive income
Shares and investments in capital
Total
Total current assets
Total non-current assets

4,915

4,981

53,436
1,621
4,924

52,079
1,604
4,821

6
–
–

25
464
127

25,645

19,36890,54883,473

10,836
79,711

11,43972,034

11. Other Assets
The breakdown of other assets is as follows:
As of February 28, 2023

As of February 29, 2024

Millions of yen

Millions of yen

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

2,768
794
389
6,145
4,894

3,290
867
299
8,451
4,636

Total

14,991

17,546

5,094
9,897

5,203
12,343

Other current assets
Other non-current assets- 155 -

12. 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

287,268

506,616

4,174

16,504335

814,899

Acquisitions

12

8,677

63

842

203

9,799

Sales or disposals(34)(9,296)

(44)

(443)

–

(9,818)Transfer among line items

–

103

–

0

(114)

(10)

Other

–

7

–

4

(232)

(220)

287,246

506,108

4,193

16,908

192

814,649

Acquisitions

9

5,953

85

411

389

6,850

Sales or disposals–(3,184)

(189)

(116)

–

(3,489)Transfer among line items

–

136

5

(4)

(275)

(138)

Other

–

(123)

(6)

(1)

–

(131)

287,255

508,889

4,089

17,198306

817,739

MachineryandvehiclesMillions ofyen

Furnitureand fixtures

Constructionin progress

Total

Millions ofyen

Buildings
andstructures
Millions ofyenMillions ofyenMillions ofyenMillions of
yen

(499)

(319,115)(2,961)(11,942)–(334,518)

Depreciation–(15,557)(224)(1,236)–(17,019)

Impairment loss(50)

(2,508)

(4)

(94)

–

(2,657)

Sales or disposals

–

8,529

35

384

–

8,949

Transfer among line items

–

(1)

–

–

–

(1)

(549)

(328,653)(3,154)(12,888)–(345,247)

Depreciation–(14,670)(202)(1,039)–(15,911)

Impairment loss

(58)

(1,258)

(0)

(88)

–

(1,404)

Sales or disposals

–

3,016

188

116

–

3,322

Transfer among line items

–

–

–

0

–

0

Other

–

116

6

1

–

124

(608)

(341,449)(3,161)(13,897)–(359,116)

Land

Balance as of March 1, 2022

Balance as of February 28, 2023

Balance as of February 29, 2024

Accumulated depreciation and impairment
Land

Balance as of March 1, 2022

Balance as of February 28, 2023

Balance as of February 29, 2024

- 156 -

Carrying amount
MachineryandvehiclesMillions ofyen

Furnitureand fixtures

Constructionin progress

Total

Millions ofyen

Buildings
andstructures
Millions ofyenMillions ofyenMillions ofyenMillions ofyen

Balance as of March 1, 2022

286,768

187,500

1,213

4,561

335

480,380

Balance as of February 28, 2023

286,696

177,454

1,038

4,019

192

469,401

Balance as of February 29, 2024

286,647

167,440

927

3,300

306

458,623Land

Notes:

1.

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

2.

Please refer to “29. Other Operating Income” for the gain on sales of non-current assets for the fiscal years ended February 28, 2023
and February 29, 2024, and “32. Other Operating Expenses” for the loss on disposals of non-current assets for the fiscal years ended
February 28, 2023 and February 29, 2024.

(2) Assets pledged as collateral
There is no property, plant and equipment pledged as collateral for liabilities.
(3) Commitments
Please refer to “40. Commitments” for commitments related to purchase of property, plant and equipment.
13. 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
Intangible assets
Goodwill
Millions of yen

Software

Other

Total

Millions of yen

Millions of yen

Millions of yen

Balance as of March 1, 2022

568

14,715481

15,197

Acquisitions

472

2,970

20

2,990

Sales or disposals–(1,317)(1)(1,319)Transfer among line items

–

(220)

(11)

(231)

Other

(44)

–

–

–

Balance as of February 28, 2023

995

16,148488

16,636

Acquisitions

–

2,807

6

2,814

Sales or disposals–(1,336)(3)(1,340)Transfer among line items

–

(181)

3

(178)

995

17,437495

17,932

Balance as of February 29, 2024
Note:

The acquisition of goodwill in the fiscal year ended February 28, 2023 was due to a business combination (acquisition of shares of XENOZCO., Ltd.).

- 157 -

Accumulated amortization and impairment
Intangible assets
Goodwill
Millions of yen
Balance as of March 1, 2022

Software

Other

Total

Millions of yen

Millions of yen

Millions of yen(44)(7,480)(426)(7,907)

Amortization expense–(2,212)(2)(2,214)

Impairment loss

–

(6)

–

(6)

Sales or disposals

–

1,287

1

1,288

Transfer among line items

–

0

0

0

Other

44

–

–

–

Balance as of February 28, 2023–

(8,412)(427)(8,839)Amortization expense–(2,454)(2)(2,457)

Impairment loss

(435)

(22)

(10)

(33)

Sales or disposals

–

1,282

3

1,285

Transfer among line items

–

(1)

–

(1)

(435)

(9,608)(437)(10,045)

Balance as of February 29, 2024
Note:

The impairment loss of goodwill in the fiscal year ended February 29, 2024 was due to a decline in profitability of XENOZ CO., Ltd.

Carrying amount
Intangible assets
Goodwill

Millions of yen

Software

Other

Total

Millions of yen

Millions of yen

Millions of yen

Balance as of March 1, 2022

523

7,235

54

7,289

Balance as of February 28, 2023

995

7,736

60

7,797

Balance as of February 29, 2024

560

7,828

58

7,886

Note:

The amount of amortization expense for intangible assets is included in “cost of sales” and “selling, general and administrative expenses”
in the consolidated statement of income.
Impairment losses of goodwill are recorded in “other operating expenses” in the consolidated statement of income.

(2) Impairment of 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, 2023

As of February 29, 2024

Millions of yen

Millions of yen

SC Business
Other

523
472

523
36

Total

995

560

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 a
- 158 -

business 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, in the SC Business segment, the value in use sufficiently exceeds the carrying amount of the
cash-generating unit or the group 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 areasonably foreseeable range.
In other segments, an impairment loss was recognized due to a decline in profitability of XENOZ CO.,Ltd. and value in use falling below the carrying amount of the cash-generating unit. The value in use wascalculated by discounting future cash flows by a pre-tax discount rate of 16.6%, which was based on the
WACC at the time of measurement, taking into account the future profitability and other factors.
14. 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, thecorresponding 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.
Both the options to extend and terminate leases are reviewed each period for the likelihood of exercise,and the lease term is reviewed if there are significant events or material change in circumstances.
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
Total

Buildings andstructures

Machinery, tools
and fixtures

As of February 28, 2023

95,554

1,308

21,414

1,223

119,501

As of February 29, 2024

85,455858

20,196

1,112

107,623- 159 -

Land

Intangible assets,otherProfit or loss and cash outflow related to right-of-use assets
1) Costs related to leases(Millions of yen)
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Depreciation expense of right-of-use assets
Items with buildings and structures as the underlying
assets
Items with machinery, tools and fixtures as theunderlying asset

22,33320,938

867

569

1,237

1,236

Items with intangible assets, other as the underlying asset

152

181

Total depreciation expense of right-of-use assets

24,59022,925

2,898

150

–

–

Items with land as the underlying asset

305

96

Items with intangible assets, other as the underlying asset

32

8

Total impairment loss of right-of-use assets

3,236

255

Interest expenses related to lease liabilities

3,607

3,297

Costs related to current lease obligations

285

307

Costs related to leases of low-value assets

990

1,176

Contingent rents not included in the measurement oflease liabilities

82

75

Items with land as the underlying asset

Impairment loss of right-of-use assets
Items with buildings and structures as the underlying
assets
Items with machinery, tools and fixtures as theunderlying asset

Notes:

1.

Depreciation and impairment losses exclude right-of-use assets that fall under the definition of investment property.

2.

The amount of depreciation expense is included in “cost of sales” and “selling, general and administrative expenses” in the
consolidated statement of income.

3.

Impairment losses are recorded in “other operating expenses” in the consolidated statement of income.

2) Income from subleasing(Millions of yen)
Income from subleasing

12,76912,6703) Cash outflow related to leases(Millions of yen)
Cash outflow related to leases

34,081- 160 -

33,920Lease liabilities
A maturity analysis for lease liabilities is as follows.
(Millions of yen)
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Contractual undiscounted cash flows
Due within one year

30,94629,983Due after one year through two years

28,78527,326

Due after two years through three years

23,72922,079Due after three years through four years

16,58913,709Due after four years through five years

11,8149,724

Due after five years

78,20770,704

Balance of lease liabilities before discount190,072

173,526

Current

28,411

27,222

Non-current

136,414

123,228(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, 2023

(Millions of yen)
Fiscal year ended
February 29, 2024

Lease revenue (other than contingent rents)

29,85033,340

Lease revenue (contingent rents)

26,60429,354The maturity analysis for lease payments relating to operating leases is as follows:
As of February 28, 2023

(Millions of yen)
As of February 29, 2024

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

20,794
18,684
17,214
15,813
14,93999,691

19,143
17,354
15,81614,995
13,52987,157

Total

187,138

167,996- 161 -

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, 2022
Acquisitions
Sales or disposals
Depreciation expense
Impairment loss
Other
Balance as of February 28, 2023
Acquisitions
Sales or disposals
Depreciation expense
Impairment loss
Other
Balance as of February 29, 2024

149,231

97,359

20
–
–
–
(31)

3,376
(237)
(7,406)(1,134)(42)

149,220

91,915

9
–
–
–
–

1,605
(113)
(6,851)(14)
60

149,229

86,601

Acquisition costs(Millions of yen)
Buildings and structures

Land
Balance as of March 1, 2022

149,709

208,406

Balance as of February 28, 2023

149,698

207,537

Balance as of February 29, 2024

149,708

207,767

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

Land
Balance as of March 1, 2022

478

Balance as of February 28, 2023

478

115,622

Balance as of February 29, 2024

478

121,166- 162 -

111,04615. 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, 2022

184,446

38,967

223,413

Acquisitions
Sales or disposals
Transfer among line items (Note 1)
Decrease due to cancellation of lease contracts
Other

4,714
(3,042)(4,411)
–
(35)

2,432
–
(455)
(1,689)722

7,146(3,042)(4,866)(1,689)687

Balance as of February 28, 2023

181,672

39,977

221,649

Acquisitions
Sales or disposals
Transfer among line items (Note 1)
Other (Note 2)

1,727(3,113)(1,986)
–

–
–
–
3,381

1,727
(3,113)(1,986)
3,381

Balance as of February 29, 2024

178,300

43,358

221,658

Notes: 1.

2.

The change in inventories mainly includes a transfer to inventories of ¥(4,304) million in the fiscal year ended February 28, 2023 and¥(2,010) million in the fiscal year ended February 29, 2024 due to a change in the holding purpose from leasing to selling of someinvestment properties in the Developer Business.
This mainly includes changes due to changes in terms and conditions.

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, 2022

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

Depreciation
Sales or disposals
Transfer among line items
Decrease due to cancellation of lease contracts
Other(1,893)
2,146
495
–
–

(3,132)
–
5
1,612
88

(5,025)
2,146
501
1,612
88

Balance as of February 28, 2023

(18,381)(16,019)(34,401)

Depreciation
Impairment loss
Sales or disposals
Other(1,988)(81)
45–(3,178)(97)–
28(5,167)
(179)
45
28

Balance as of February 29, 2024

(20,406)(19,267)(39,673)

Carrying amounts and fair values(Millions of yen)
As of February 29, 2024

As of February 28, 2023
Carrying amount
Investment property

Fair value

187,247

259,459

Carrying amount
181,985

Fair value
289,151

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.

- 163 -

(2) Income and expenses from investment property(Millions of yen)
Fiscal year ended
February 29, 2024

Fiscal year ended
February 28, 2023
Rental income
Direct operating expense

17,667
10,781

19,83011,683

The amounts of rental income from investment property and accompanying direct operating expense areincluded in “revenue” and “cost of sales,” respectively, in the consolidated statement of income.
(3) Commitments
Please refer to “40. Commitments” for commitments related to purchase of investment property.
16. 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 expenses” 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, 2023
Segment

Company name (Location)
The Hakata Daimaru, Inc.
(Chuo-ku, Fukuoka)

Use
Merchandise
Center

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

SC Business

Other

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

Store, etc.

Software

Type(Millions of yen)
Impairment loss

Buildings and structures

47

Furniture and fixtures
Buildings and structures

0
1,341

Furniture and fixtures

82

Land

50

Right-of-use assets

2,366

Buildings and structures

1,119

Machinery and vehicles

4

Furniture and fixtures

12

Right-of-use assets

870

Software

6
Total

5,900

1) With regard to the Department Store Business, principally because of decreased profitability of
Daimaru Matsuzakaya Department Stores Co. Ltd.’s Daimaru Umeda store and Daimaru Shimonoseki
store, the carrying amount of right-of-use assets, etc. was reduced to the recoverable amount and the
reduction of ¥3,840 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 rates of 4.3 - 4.5%, which were based on the WACC at the time of
measurement, taking into account the future profitability and other factors.
2) With regard to the SC Business, principally because of decreased profitability of PARCO Co., Ltd.’s
Shizuoka PARCO, the carrying amount of right-of-use assets, etc. was reduced to the recoverable
amount and the reduction of ¥1,011 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 account the future profitability and other factors.
In addition, with regard to PARCO Co., Ltd.’s Matsumoto PARCO which plans to terminate
operations at the end of February 2025, an impairment loss of ¥995 million was recorded as loss on
business liquidation. 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 account the future profitability andother factors.
There was no reversal of impairment losses recorded in the fiscal year ended February 28, 2023.
- 164 -

Fiscal year ended February 29, 2024
Segment

Company name (Location)

Kochi Daimaru Co., Ltd.
(Kochi, Kochi)

UseStore, etc.

Type

(Millions of yen)
Impairment loss

Buildings and structures

410

Furniture and fixtures

36

Right-of-use assets

199

Software

21

Other

Department StoreBusiness

5

Buildings and structures
Daimaru Matsuzakaya Department Stores Co.
Ltd.
Store, etc.
(Shimonoseki, Yamaguchi)

823

Machinery and vehicles

0

Furniture and fixtures

48

Land

58

Right-of-use assets

42

Other

7

Buildings and structures

14

Machinery and vehicles
SC Business

Developer
Business

Other

PARCO Co., Ltd.
(Matsumoto, Nagano)

Store, etc.

J. FRONT CITY DEVELOPMENT Co.,Ltd.
Store, etc.
(Naka-ku, Hiroshima)
Daimaru Kogyo, Ltd.
(Chuo-ku, Fukuoka)
XENOZ CO., Ltd.
(Shibuya-ku, Tokyo)

Store, etc.

Goodwill

0

Furniture and fixtures

0

Right-of-use assets

13

Software0

Investment property

179

Buildings and structures

9

Furniture and fixtures

1

Software0

Goodwill

435
Total

2,310

1) With regard to the Department Store Business, because of decreased profitability of Daimaru
Matsuzakaya Department Stores Co. Ltd.’s Daimaru Shimonoseki store, the carrying amount ofbuildings and structures and land, etc. were reduced to the recoverable amount and the reduction of¥980 million was recognized as an impairment loss. The recoverable amount of the cash-generating
unit is measured as the fair value less cost of disposal.
In addition, because of decreased profitability of Kochi Daimaru Co., Ltd., the carrying amount ofbuildings and structures, right-of-use assets etc. were reduced to the recoverable amount and the
reduction of ¥674 million was recognized as an impairment loss. 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 5.1%, which was based on the WACC at the time of measurement, taking
into account the future profitability and other factors.
2) With regard to other, mainly because of decreased profitability of XENOZ CO., Ltd., the carrying
amount of goodwill was reduced to the recoverable amount and the reduction of ¥435 million wasrecognized 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
16.6%, which was based on the WACC at the time of measurement, taking into account the future
profitability and other factors.
3) For the Developer Business, since it was decided to close Hiroshima ZERO GATE of J. FRONTCITY DEVELOPMENT Co., Ltd., the carrying amount of investment property was reduced to therecoverable amount and the reduction of ¥179 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 4.0%, 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 29, 2024.
- 165 -

17. Investments Accounted for Using Equity Method
Investments in associates and joint ventures
The carrying amount of investments in associates and joint ventures that are not individually material is asfollows:
As of February 28, 2023
Associates
Joint ventures
Total(Millions of yen)
As of February 29, 2024

22,056
19,346

4,468
19,063

41,402

23,531The Group’s share of comprehensive income of associates and joint ventures that are not individually material
is as follows:(Millions of yen)
Fiscal year ended
February 29, 2024

Fiscal year ended
February 28, 2023
Associates:
Share of profit
Share of other comprehensive income
Share of comprehensive income
Joint ventures:
Share of profit
Share of other comprehensive income
Share of comprehensive income
Associates and joint ventures:
Share of profit
Share of other comprehensive income
Share of comprehensive income

1,759
(3)

999
(74)

1,756

925

402
0

532
0

402

532

2,161
(3)

1,532
(74)

2,158

1,458

18. Joint Operations(1) GINZA SIX
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 another company. With regard to revenue and expenses related to theoperation of this commercial facility, including profit and loss based on tenant agreements, the amountcorresponding to the ownership ratio of Daimaru Matsuzakaya Department Stores Co. Ltd. (68%), determinedaccording to the ownership category of the commercial facility and other factors, was recognized.
(2) “Nishiki 3-chome District 25 project (tentative name)”
J. FRONT CITY DEVELOPMENT Co., Ltd., a subsidiary of the Group is engaged in the construction of a
new building in Nishiki 3-chome, Naka-ku, Nagoya City, under the “Nishiki 3-chome District 25 project(tentative name),” a joint operation with MITSUBISHI ESTATE CO., LTD., Japan Post Real Estate Co., Ltd.,
Meiji Yasuda Life Insurance Company, and Chunichi Shimbun Co., Ltd.
Of the project expenses related to the project, J. FRONT CITY DEVELOPMENT Co., Ltd. recognizes the fullamount of the construction expenses for the exclusive use areas and some common use areas for thecommercial use, and the amount equivalent to the percentage determined based on the exclusive use area
ratio, etc. for the entire common use areas.
Construction of this project is scheduled to be completed in March 2026, and the entire facility is scheduled toopen around the summer of 2026.

- 166 -

19. 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, 2023
Balance as ofMarch 1, 2022
Deferred tax assets
Retirement benefit liability
Allowance for credit losses
Non-current assets
Other financial assets
Asset retirement obligations
Tax loss carryforwards
Gain on adjustment of accounts
payableLong-term unearned revenue
Prepaid expense (Landleasehold right)
Lease liabilities
Other
Total

Recognized in profit
or loss

Recognized in othercomprehensive income(Millions of yen)
Balance as ofFebruary 28, 2023

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

(702)
223
(1,455)(6)
74(1,419)

(166)
–
–
(0)
–
–

5,125
880
3,198
1
1,758
5,210

5,658

697

–

6,355

98

(5)

–

93

2,984

9

–

2,993

53,20315,154(5,442)(346)––

47,76114,80896,727(8,374)(166)

88,18675,616
5,508
50,411
8,679(3,496)178(5,974)
1,695

–
491
–
304

72,1206,179
44,436
10,679Total

140,215(7,596)796

133,415

Net amount of deferred tax
assets(43,488)

(777)

(963)

(45,228)

Deferred tax liabilities
Non-current assets
Securities
Right-of-use assets
Other- 167 -

Fiscal year ended February 29, 2024
(Millions of yen)
Balance as ofMarch 1, 2023
Deferred tax assets
Retirement benefit liability
Allowance for credit losses
Non-current assets
Other financial assets
Asset retirement obligations
Tax loss carryforwards
Gain on adjustment of accounts
payableLong-term unearned revenue
Prepaid expense (Land leasehold
right)
Lease liabilities
Other
Total
Deferred tax liabilities
Non-current assets
Securities
Right-of-use assets
Other

Recognized in profit
or loss

Recognized in othercomprehensive
incomeBalance as ofFebruary 29, 2024

5,125
880
3,198
1
1,758
5,210

(242)
126
1,394
–
(38)
(4,189)

(283)
–
–
(1)
–
–

4,599
1,006
4,593
–
1,720
1,020

6,355

678

–

7,034

93

(5)

–

87

2,993

11

–

3,004

47,76114,808(2,107)(239)––

45,653
14,56888,186(4,612)(285)

83,28872,1206,179
44,436
10,679805(72)(1,743)
(638)

–
(539)
–
(134)

72,925
5,566
42,693
9,906

Total

133,415(1,648)(674)

131,091

Net amount of deferred tax assets(45,228)(2,963)389(47,803)

Deferred tax assets and liabilities in the consolidated statement of financial position are as follows:(Millions of yen)
As of February 29, 2024

As of February 28, 2023
Deferred tax assets
Deferred tax liabilities
Net amount

3,137
48,366

3,636
51,439(45,228)(47,803)

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 group in which the Company is theparent corporation under the Japanese group relief system, and many of these deferred tax assets wererecorded at Daimaru Matsuzakaya Department Stores Co. Ltd. and PARCO Co., Ltd., which are domestic
subsidiaries.
(Millions of yen)
As of February 29, 2024

As of February 28, 2023
Tax loss carryforwards
Deductible temporary differences
Total- 168 -

6,633
40,794

5,174
42,05747,42847,232

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, 2023

As of February 29, 2024

1st year––

2nd year––

3rd year––

4th year

–

–

6,633

5,174

6,633

5,174

5th year and after
Total

The Company and some of its domestic subsidiaries apply the Japanese group relief 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 and business tax),
which are not subject to the said system. As of February 29, 2024, the amount of deductible temporary
differences related to local taxes (inhabitant tax and business tax) was ¥44,500 million (¥52,118 million as
of February 28, 2023), and the amount of unused tax losses was ¥11,720 million (¥9,041 million as ofFebruary 28, 2023).
As of February 28, 2023 and February 29, 2024, the total amount of temporary differences forinvestments in subsidiaries that were not recognized as deferred tax liabilities were ¥136,397 million and¥158,671 million, respectively.
(2) Income tax
The breakdown of income tax is as follows:(Millions of yen)
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Current taxes:
Current period

2,619

8,123

Prior periods

(785)

8

Total current taxes

1,834

8,132

Origination and reversal of temporary
differences, etc.

34

3,417

Changes in unrecognized deferred tax assets

743

(453)

777

2,963

2,611

11,096

Deferred taxes:

Total deferred taxes
Total- 169 -

(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, 2023

Fiscal year ended
February 29, 2024%%

Effective statutory tax rate

30.6

30.6

Entertainment expense

0.7

0.6

Bonuses for directors (and other officers)

0.4

0.2

Dividend income

(0.1)

(8.4)

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

(3.9)

(1.1)

Unrecognized deferred tax assets

(7.1)

0.4

Income taxes for prior periods

(4.4)

(1.3)

Tax credits

(0.1)

(1.3)

Gain (loss) on sales of shares of subsidiaries
and associates

–

6.0

Other

(0.6)

1.3

15.5

26.8

Average effective tax rate

(Changes in presentation)“Difference from the applicable tax rate of subsidiaries,” which was presented separately in the fiscal year
ended February 28, 2023, has been included in “Other” due to the decreased materiality. In addition, “Taxcredits,” which were previously included in “Other,” have been presented separately starting from thefiscal year ended February 29, 2024 due to the increased materiality. The notes for the previous fiscal year
have been reclassified to reflect these changes in presentation.
As a result, the “Difference from the applicable tax rate of subsidiaries” of 0.1% and “Other” of (0.8)%,
which were presented in the previous fiscal year, have been reclassified as “Tax credits” of (0.1)% and“Other” of (0.6)%.

- 170 -

20. 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, 2023
Changes that do not affect cash flows
Balance as ofMarch 1, 2022

Changes that affectcash flows

New leases andchanges inagreements

Changes in fairvaluesOther

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

58,000(24,000)–––

34,00015,002(15,002)

–

–

–

–

144,960(9,650)–––135,310

Bonds

99,752(20,000)––

61

79,813

Lease liabilities

184,394(29,138)

9,570

–

–

164,825

Total

502,109(97,791)

9,570

–

61

413,949

Current
borrowings
Commercial
papersNon-current
borrowings

Balance as ofFebruary 28,
2023
Millions ofyen

Fiscal year ended February 29, 2024
Changes that do not affect cash flows
Balance as ofMarch 1, 2023

Changes that affectcash flows

New leases andchanges inagreements

Changes in fairvaluesOther

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

34,000(9,100)–––24,900135,310(26,130)–––

109,180

Bonds

79,813

–

–

–

54

79,868

Lease liabilities

164,825(29,088)

14,713––

150,450

Total

413,949(64,318)

14,713–

54364,398

Current
borrowings
Non-current
borrowings

Balance as ofFebruary 29,
2024
Millions ofyen(2) Non-cash transactions
Right-of-use assets acquired through leases are as follows:

Right-of-use assets acquired through leases

Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Millions of yen

Millions of yen
8,400

1,460

(3) Sale of shares of equity method associates
All shares of StylingLife Holdings Inc., an equity method associate, were sold in the fiscal year ended
February 29, 2024. Proceeds from sales of these shares of ¥16,945 million are included in “Proceeds fromsales of investment securities” in cash flows from (used in) investing activities in the consolidated
statement of cash flows.

- 171 -

(4) Income taxes paid
Cash flows from the sale of shares of StylingLife Holdings are recorded in “Proceeds from sales ofinvestment securities” after deducting withholding tax on deemed dividends.
Total income taxes paid for the fiscal year ended February 29, 2024, including this withholding tax,
amounted to ¥6,834 million.
21. 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, 2023

As of February 29, 2024

Averageinterest rate
(Note 1)Millions of yen

Millions of yen%

Repayment
deadline

Short-term borrowings

63,53037,3300.29–

Long-term borrowings

105,780

96,7500.42

From March 2025
to March 2035

Bonds (Note 2)

79,81379,868

Guarantee deposits
received

37,60536,165

–

–

Other

27,66026,995

–

–

Total

314,389

277,109––

Current liabilities

93,50585,692––

Non-current liabilities

220,884

191,417––

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.

Bond nameDate of issue

As of February
28, 2023

As of February
29, 2024

Interest
rate(%)

Maturity date

6th series of
unsecured bonds

August 4, 2017

20,00020,0000.43

August 4, 2027

7th series of
unsecured bonds

May 22, 2019

20,00020,0000.20

May 22, 2024

8th series of
unsecured bonds

May 22, 201910,00010,0000.37

May 22, 2029

9th series of
unsecured bonds

May 26, 2021

15,00015,0000.17

May 26, 2026

10th series of
unsecured bonds

May 26, 2021

15,00015,0000.47

May 26, 2028

80,00080,000

0.32

Total

Agreements on some of borrowings of the Group require the maintenance of specific financial ratios andnet assets at a certain level.
The Group has complied with all the agreements on borrowings.

- 172 -

(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, 2023

As of February 29, 2024

Other financial assets

197

220

Inventories

146

148

343

369

Total

The corresponding obligations are as follows:(Millions of yen)
As of February 28, 2023

As of February 29, 2024

Trade and other payables

215

356

Total

215

356

22. 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, 2023

As of February 29, 2024

Notes payable - trade

2,772

2,695

Accounts payable - trade

79,701

94,492

Accounts payable - other

28,761

31,636

Deposits received

21,581

21,866

Other

1,019

539

133,835

151,230Total

23. 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.
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- 173 -

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, 2023

As of February 29, 2024

Present value of funded defined benefit
obligations

21,32522,249Fair value of plan assets(29,631)(31,038)(8,306)(8,789)Impact of maximum amount of plan assets–

39

Present value of unfunded defined benefit
obligations

18,915

16,279Liabilities of defined benefit plans

10,6097,529

Retirement benefit liability

16,754

15,980Retirement benefit assets

6,145

8,451

10,609

7,529

Subtotal

Amounts in the consolidated statement offinancial position

Net defined benefit liability or asset in the
consolidated statement of financial position- 174 -

Changes in the present value of the defined benefit obligations are as follows:(Millions of yen)
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Present value of defined benefit obligations at
beginning of period

45,08940,240Service cost

1,511

1,321

161

396

(408)

(197)

(673)

(932)

(5,285)(2,279)

Other

(154)

(20)

Present value of defined benefit obligations at
end of period

40,24038,528Interest 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, 2023
Fair value of plan assets at beginning of period

Fiscal year ended
February 29, 2024
35,17929,631

122

289

Return on plan assets

626

2,219

Contributions by employer

766

690

Benefits paid

(2,563)(1,787)Return of trust assets(4,500)––(4)

29,631

31,038Interest revenue
Remeasurements

Other
Fair value of plan assets at end of period

Changes in the impact of maximum amount of plan assets are as follows:(Millions of yen)
Fiscal year ended
February 28, 2023
Impact of maximum amount of assets at
beginning of period

Fiscal year ended
February 29, 2024
–

–

–

39

–

39

Remeasurements
Change in impact of maximum amount ofassets
Impact of maximum amount of assets at end of
period- 175 -

The fair value of each item of plan assets is as follows:
As of February 28, 2023
(Millions of yen)
Assets with quoted market
prices in active markets

Assets without quoted
market prices in active
markets

Cash and cash equivalents

4,158

–

4,158

Domestic shares

4,499

288

4,788

Overseas shares

3,463

271

3,734

–

754

754

Domestic bonds

5,389

600

5,989

Overseas bonds

2,996

105

3,102

555

948

1,504

–

4,799

4,799

–

799

799

21,063

8,568

29,631

Assets with quoted market
prices in active markets

Assets without quoted
market prices in active
markets

Cash and cash equivalents

5,627

–

5,627

Domestic shares

3,880

357

4,238

Overseas shares

4,135

352

4,487

–

849

849

Domestic bonds

4,821

699

5,520

Overseas bonds

3,234

137

3,371

555

1,000

1,556

–

4,570

4,570

–

816

816

22,255

8,783

31,038Items of plan assets

Jointly operated trusts(shares)

Jointly operated trusts(public and corporate bonds)
General accounts of life insurancecompanies
Other
Total

Total

As of February 29, 2024
(Millions of yen)
Items of plan assets

Jointly operated trusts(shares)

Jointly operated trusts(public and corporate bonds)
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.
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.
- 176 -

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 ¥622 million in the fiscal year ending February 28, 2025.
The weighted average duration of the defined benefit obligations as of February 28, 2023 was 8.58 years.
The weighted average duration of the defined benefit obligations as of February 29, 2024 was 8.43 years.
The main actuarial assumptions used to calculate the present value of the defined benefit obligations are
as follows:
As of February 28, 2023

As of February 29, 2024%%

Discount rate

Mainly 1.0

Mainly 1.0

Anticipated rate of salary increase

Mainly 4.6

Mainly 4.7

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, 2023

As of February 29, 2024

Changes in discount rate
0.5% increase(1,624)(1,532)

0.5% decrease

1,750

1,646

Amounts recognized as retirement benefit expense are as follows:(Millions of yen)
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Service cost

1,511

1,321

Net interest

39

107

Other

4

167

1,555

1,596

Total

(2) Defined contribution plans
The amount recorded as expenses in relation to defined contribution plans is ¥3,875 million for the fiscal
year ended February 28, 2023 and ¥4,080 million for the fiscal year ended February 29, 2024, and- 177 -

included in “cost of sales” and “selling, general and administrative expenses” in the consolidated
statement of 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 ¥25 million in the fiscal
year ended February 28, 2023 and ¥20 million in the fiscal year ended February 29, 2024, and included in“other operating expenses” in the consolidated statement of income.
(4) Employee benefit expenses
The amount of employee benefit expenses was ¥51,506 million in the fiscal year ended February 28, 2023
and ¥54,706 million in the fiscal year ended February 29, 2024, and included in “cost of sales” and“selling, general and administrative expenses” in the consolidated statement of income.
24. 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, 2022

6,342

4,165

10,507

Increase during the period

632

1,027

1,660

Discounted interest expenses for theperiod36–

36

Decrease during the period (use)

(310)

(217)

(528)

Decrease during the period (reversal)

(175)

(402)

(577)

(0)

–

(0)

6,524

4,573

11,097

Increase during the period

45

–

45

Discounted interest expenses for theperiod37–

37

Decrease during the period (use)(350)(1,108)(1,458)Decrease during the period (reversal)

(224)

(303)

(527)

39

–

39

6,072

3,161

9,233

Other
Balance as of February 28, 2023

Other
Balance as of February 29, 2024

The breakdown of provisions in the consolidated statement of financial position is as follows:(Millions of yen)
As of February 28, 2023

As of February 29, 2024

Current liabilities

2,397

2,487

Non-current liabilities

8,699

6,746

11,097

9,233

Total

(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 lease- 178 -

agreement 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.
25. Other Liabilities
The breakdown of other liabilities is as follows:(Millions of yen)
As of February 28, 2023

As of February 29, 2024

Accrued bonuses

5,089

5,599

Accrued paid absences

2,671

2,672

Deferred income (Note)

383

357

Contract liabilities

39,98838,784

Other accrued expense

7,929

7,514

Other

2,682

2,936

58,74557,86558,27657,445

469

419

Total
Other current liabilities
Other non-current liabilities
Note:

The breakdown of deferred income in the fiscal year ended February 28, 2023 was ¥383 million in government grants.
The breakdown of deferred income in the fiscal year ended February 29, 2024 is ¥357 million in government grants.

26. Equity and Other Equity Items(1) Share capital and capital surplus
Changes in the number of authorized shares, number of issued shares, and the balances of share capital,
etc. are as follows:

As of March 1, 2022
Changes during the period
As of February 28, 2023
Changes during the period
As of February 29, 2024
Note:

Number of
authorized shares(Shares)Number of issued
shares (Shares)

Share capital(Millions of yen)

Capital surplus(Millions of yen)

1,000,000,000

270,565,764

31,974

188,894

–

–

–

174

1,000,000,000

270,565,764

31,974

189,068

–

–

–

103

1,000,000,000

270,565,764

31,974

189,172

All shares issued by the Company are ordinary shares with no restrictions and no par value. Issued shares are fully paid.

- 179 -

(2) Treasury shares
Changes in the number and balance of treasury shares are as follows:
Number of shares (Shares)

Amount (Millions of yen)

As of March 1, 2022

8,756,955(14,780)

Changes during the period(192,119)314

As of February 28, 2023

8,564,836(14,466)

Changes during the period(144,207)

234

As of February 29, 2024

8,420,629(14,231)

Note:

Treasury shares include shares of the Company owned by the officer remuneration BIP trust.

(3) Nature and purposes of capital surplus and retained earnings
1) Capital surplus
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 share capital. The remainder of the payment shallbe credited to legal capital surplus included in capital surplus. In addition, the Companies Act permits,upon approval of the shareholders meeting, the transfer of amounts from legal capital surplus to sharecapital.
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 capital surplus) or legal retained earnings (an item of retained
earnings), until the total amount of legal capital surplus and legal retained earnings reaches 25% ofshare capital. The legal retained earnings may be used to eliminate or reduce a deficit, or may bereversed by 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.

- 180 -

27. Dividends(1) Dividends paid
Fiscal year ended February 28, 2023
Resolution
Board ofDirectors meeting
held on April 12,
2022
Board ofDirectors meeting
held on October
11, 2022
Note:

Class of shares

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Ordinary shares

3,964

Ordinary shares

3,964

Record date

Effective date

15.00

February 28, 2022

May 6, 2022

15.00

August 31, 2022

November 11,
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.
Total amount of dividends resolved at the Board of Directors meeting held on October 11, 2022 includes ¥34 million of dividends paid on
the Company’s shares held by the officer remuneration BIP trust.

Fiscal year ended February 29, 2024
Resolution
Board ofDirectors meeting
held on April 11,
2023
Board ofDirectors meeting
held on October
10, 2023
Note:

Class of shares

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Ordinary shares

4,228

Ordinary shares

4,228

Record date

Effective date

16.00

February 28, 2023

May 2, 2023

16.00

August 31, 2023

November 13,
2023

Total amount of dividends resolved at the Board of Directors meeting held on April 11, 2023 includes ¥36 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 10, 2023 includes ¥34 million of dividends paid to
the Company’s shares held by an officer remuneration BIP trust.

(2) Dividends whose effective date belongs to the following fiscal year
Fiscal year ended February 28, 2023
Resolution

Class of shares

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Board ofDirectors meeting
held on April 11,2023

Ordinary shares

4,228

16.00

Note:

Record date

Effective dateFebruary 28, 2023

May 2, 2023

Total amount of dividends resolved at the Board of Directors meeting held on April 11, 2023 includes ¥36 million of dividends paid on the
Company’s shares held by the officer remuneration BIP trust.

Fiscal year ended February 29, 2024
Resolution

Class of shares

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Board ofDirectors meeting
held on April 15,
2024

Ordinary shares

5,285

20.00

Note:

Record date

Effective dateFebruary 29, 2024

May 7, 2024

Total amount of dividends resolved at the Board of Directors meeting held on April 15, 2024 includes ¥42 million of dividends paid to theCompany’s shares held by an officer remuneration BIP trust.

- 181 -

28. 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 revenue related to variable consideration, etc. is immaterial. In addition, the amount ofpromised consideration does not include any significant financing.
Due to the organizational restructuring effective March 1, 2023, the Developer Business facilities andtheir operation business have been transferred from PARCO Co., Ltd. to J. FRONT CITY
DEVELOPMENT Co., Ltd. Accordingly, the prior year’s results for SC Business and Developer Businesshave been retroactively adjusted as if the transfer had been effective from the beginning of the previous
fiscal year (March 1, 2022).

- 182 -

Segment
Daimaru
Osaka Shinsaibashi store
Osaka Umeda store

23,97932,768

16,101

18,047

18,223

21,130

Kyoto store

17,147

19,067

Kobe store

25,33027,236

Sapporo store
Matsuzakaya
Nagoya store
Ueno store

17,652

20,57535,382

37,144

8,551

8,439

Other stores, etc.

53,38554,715

Elimination of inter-segment revenue
PARCO
Other
Elimination of inter-segment revenue
SC Business

(459)

(496)

215,295

238,62953,71657,87262

71(1,053)(1,080)52,72556,864

J. FRONT CITY DEVELOPMENT

7,644

19,478PARCO SPACE SYSTEMS

18,751

22,631

J. Front Design & Construction

28,14235,902

Other
Elimination of inter-segment revenue
Developer Business

714

405

(12,372)(11,559)

42,88066,859Payment and Finance Business

12,88913,115

Elimination of inter-segment revenue(5,304)(6,967)

7,585

6,148

Other

55,922

51,925

Elimination of inter-segment revenue(14,728)(13,420)

41,19338,505359,679

407,006

Revenue from contracts with customers

300,164

341,462

Revenue arising from other sources

59,51465,543359,679

407,006

Payment and FinanceBusiness

Other
Total

Revenue

1)

Fiscal year ended
February 29, 2024
Millions of yen

Tokyo store

Department Store Business

Note:

Fiscal year ended
February 28, 2023
Millions of yen

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.

2)

SC Business
The SC Business undertakes development, management, supervision, and operation 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.
- 183 -

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.
3)

Developer Business
The Developer Business carries out development, sales, supervision, 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.
Revenue from sales of real estate is recognized at the time of delivery.
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, 2023
As of March 1, 2022
Receivables from contracts with customers

85,715(Millions of yen)
As of February 28, 2023
94,129Contract assets

3,193

6,832

Contract liabilities

39,73939,988

Fiscal year ended February 29, 2024
As of March 1, 2023

(Millions of yen)
As of February 29, 2024

Receivables from contracts with customers

94,12998,071

Contract assets

6,832

6,821

Contract liabilities

39,98838,784

Notes:

1.

Receivables from contracts with customers
Receivables from contracts with customers primarily consist of receivables in association with the use ofcredit cards issued by the Group, and the amount includes the amount collected on behalf of third parties asagent transactions. The collection period of these receivables is mainly within one to two months.
2. 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

- 184 -

are transferred to trade receivables at the time when the customer conducts acceptance inspection and theinvoice is sent.
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
to revenue 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 29, 2024 was ¥18,793 million.
Regarding performance obligations satisfied or partially satisfied in prior periods, no amount wasrecognized in revenue in the fiscal years ended February 28, 2023 and February 29, 2024.
(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:(Millions of yen)
As of February 29, 2024

As of February 28, 2023
Due within one year
Due after one year through two years
Due after two years
Total

39,886
11,376
7,666

37,49918,301
7,470

58,92963,271

29. Other Operating Income
The breakdown of other operating income is as follows:(Millions of yen)
Fiscal year ended
February 29, 2024

Fiscal year ended
February 28, 2023
Gain on sale of shares of subsidiaries and associates(Note 1)Gain on sales of non-current assets (Note 2)
Subsidies for employment adjustment (Note 3)
Other subsidies
Other
Total
Notes:

1.
2.

3.

–

760

790
3
904
2,842

757
–
150
2,005

4,540

3,673

Gain on sale of shares of subsidiaries and associates is a gain on sales due to the transfer of 100% of the shares of
StylingLife Holdings Inc.
Gain on sales of non-current assets for the fiscal year ended February 28, 2023, is mainly a gain on sales due tothe sale of real estate holdings in the Developer Business. Gain on sales of non-current assets for the fiscal year
ended February 29, 2024, is a gain on sales due to the sale of real estate holdings in the SC Business, wholesale
business, Developer Business, etc.
The Company was eligible for subsidies for employment adjustment and other special measures due to the impact
of COVID-19.

30. Cost of Sales
The breakdown of cost of sales is as follows:
Fiscal year ended
February 28, 2023
Cost of goods sold
Personnel expense
Depreciation and amortization expense
Other
Total

- 185 -

(Millions of yen)
Fiscal year ended
February 29, 2024

149,934
6,787
22,191
11,229170,878
7,145
21,43912,026

190,142

211,49031. Selling, General and Administrative Expenses
The breakdown of selling, general and administrative expenses is as follows:
Fiscal year ended
February 28, 2023
Personnel expense
Depreciation and amortization expense
Advertising expense
Operational costs
Other
Total

(Millions of yen)
Fiscal year ended
February 29, 2024

47,284
26,915
10,4899,581
50,41150,06725,053
10,63911,274
54,150144,682

151,185

32. Other Operating Expenses
The breakdown of other operating expenses is as follows:
Fiscal year ended
February 28, 2023
Loss on disposals of non-current assets
Impairment loss (Note 1)
Loss on business liquidation (Note 2)
Other
Total
Notes:

1.
2.

(Millions of yen)
Fiscal year ended
February 29, 2024

2,102
4,905
1,893
1,434

1,302
2,310
3
1,339

10,3364,955

For details, please refer to “16. Impairment of Non-financial Assets.”
The loss on business liquidation for the fiscal year ended February 28, 2023 is due to ¥898 million in costs related
to store closures (removal costs, sales reparations, etc.) and ¥995 million in impairment losses that were recorded
following the decision to cease operations at PARCO Co., Ltd.’s Matsumoto PARCO.

33. Finance Income and Finance Costs
The breakdown of finance income is as follows:(Millions of yen)
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Interest income
Financial assets measured at amortized cost

700

709

170

194

–

704

871

1,609

Dividend income
Equity financial assets measured at fair value
through other comprehensive income
Equity financial assets measured at fair value
through profit or loss
Total

- 186 -

The breakdown of finance costs is as follows:(Millions of yen)
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Interest expenses
Financial liabilities measured at amortized
cost

1,135

1,036

Interest expenses related to lease liabilities

3,607

3,297

475

513

5,218

4,847

Other
Total

- 187 -

34. 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
February 29, 2024

Fiscal year ended
February 28, 2023
Financial assets measured at fair value through othercomprehensive income
Amount arising during the period

1,315(2,176)

Tax effect

(491)

538

Financial assets measured at fair value through othercomprehensive income

823(1,638)

1,708

3,309

Tax effect(531)(1,032)Remeasurements of defined benefit plans

1,176

2,276

(11)

(115)

Tax effect4

40

Share of other comprehensive income of entities
accounted for using equity method

(7)

(75)

1,992

562

Amount arising during the period

(1)

26

Reclassification adjustments––

Before tax effect

(1)

26

Tax effect0(5)

Cash flow hedges

(1)

20

144

123

–

(19)

144

103

–

–

144

103

Remeasurements of defined benefit plans
Amount arising during the period

Share of other comprehensive income of entities accounted
for using equity method
Amount arising during the period

Total items that will not be reclassified to profit or loss
Items that may be reclassified to profit or loss
Cash flow hedges

Exchange differences on translation of foreign operations
Amount arising during the period
Reclassification adjustments
Before tax effectTax effectExchange differences on translation of foreign operations
Share of other comprehensive income of entities accounted
for using equity method
Amount arising during the period

41Reclassification adjustments––

Before tax effect4

1

Tax effect––

Share of other comprehensive income of entities
accounted for using equity method

4

1

Total items that may be reclassified to profit or loss

147

126

Total other comprehensive income

2,140

688

- 188 -

35. Earnings Per Share
Fiscal year ended
February 28, 2023
Profit attributable to owners of parent(Millions of yen)

Fiscal year ended
February 29, 2024
14,237

29,913––

14,237

29,913262,075,939

262,260,084

138,870–

262,214,809

262,260,084

Basic earnings per share (Yen)

54.32

114.06

Diluted earnings per share (Yen)

54.30

114.06

Adjustment to profit
Profit 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)

Note:

The calculation of basic earnings 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 suchshares are treated as the Company’s treasury shares.

36. 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 representative directors of JFR Card
Co., Ltd., J. FRONT CITY DEVELOPMENT Co., Ltd., and J. Front Design & Construction Co., Ltd.,in addition to officers of the Company, Daimaru Matsuzakaya Department Stores Co. Ltd., andPARCO Co., Ltd. The BIP Trust, which is similar to performance share plans and restricted stockplans 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 amountequivalent to their conversion value is paid) in accordance with the officers’ rank and level ofachievement 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, 2023
BIP Trust
Short-term PS

Medium- to long-term PS

RS

Number of points granted during
the period

136,871

251,398

40,971

Weighted average fair value (Yen)

988

922

922

Fiscal year ended February 29, 2024
BIP Trust
Short-term PS

Medium- to long-term PS

RS

Number of points granted during
the period

149,174

242,370

40,968Weighted average fair value (Yen)

957

922

922

- 189 -

Notes:1.

2.

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.

(2) Share-based payment expense
The amounts recognized as share-based payment expense, which were included in the consolidated
statement of income, were ¥480 million in the fiscal year ended February 28, 2023 and ¥359 million in thefiscal year ended February 29, 2024.
37. 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, 2023

As of February 29, 2024

Interest-bearing debt

413,949364,398

Equity attributable to owners of parent

359,385

381,898

1.15

0.95

D/E ratio (Times)(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.
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,- 190 -

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.
(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, 2022

111

38

3,187

835

Transfer to lifetime expected credit losses

(34)

–

77

(42)

Transfer to credit-impaired financial assets

(56)

–

(96)

153

Transfer to 12-month expected credit losses

0

–

(0)

(0)

Changes due to new arising and collectionof financial assets

88

(7)

(443)

310

Financial assets that were derecognized
during the period

–

–

–

–

Direct write-off

(0)

–

(75)

(336)

Changes in model/risk variables

–

–

–

–

Balance as of February 28, 2023

109

30

2,648

918

Transfer to lifetime expected credit losses

(49)

–

82

(33)

Transfer to credit-impaired financial assets

(201)

–

(124)

326

Transfer to 12-month expected credit losses

0

–

(0)

(0)

Changes due to new arising and collectionof financial assets

250

1

1,139

249

Financial assets that were derecognized
during the period

–

(1)

–

–

Direct write-off

(0)

–

(76)

(330)

Changes in model/risk variables

–

–

–

–

Balance as of February 29, 2024

108

31

3,669

1,131

- 191 -

(ii) The carrying amounts of financial assets by risk type (before deducting allowance for credit
losses) are as follows:
As of February 28, 2023

As of February 29, 2024

Millions of yen

Millions of yen

Financial assets measured at amortized cost, etc.
(12-month expected credit losses)

121,203

115,373

Trade and other receivables(Lifetime expected credit losses)

70,89889,421

Financial assets whose credit risk has increased
significantly since initial recognition(Lifetime expected credit losses)

4,667

5,741

957

1,181

Credit-impaired financial assets(Lifetime expected credit losses)

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
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)
Due after
Due after
Due within
one year
two years
one year through two
through
years
three years

Due after
three years
throughfour years

Due after
four years
throughfive years

Due after
five years

Carrying
amountContractual
amountTrade and other payables

133,835

133,835

133,835

–

–

–

–

–

Short-term borrowings

63,53063,67863,678

–

–

–

–

–

Long-term borrowings

105,780

107,990444

12,874

28,794

17,68622,18226,009

Bonds

79,813

81,169260

20,240220

15,207

20,15125,090

Other financial liabilities

65,26565,32929,975

522

428

14

–

34,389448,225

452,003

228,193

33,63629,44232,90742,33385,490Due after
Due after
Due within
one year
two years
one year through two
through
years
three years

Due after
three years
throughfour years

Due after
four years
throughfive years

Due after
five years

As of February 28, 2023

Non-derivative financial liabilities

Total

Note:

Short-term borrowings include the current portion of long-term borrowings.
(Millions of yen)
Carrying
amountContractual
amountTrade and other payables

151,230

151,230

151,230

–

–

–

–

–

Short-term borrowings

37,33037,43737,437

–

–

–

–

–

Long-term borrowings

96,75098,488380

28,81020,59522,185648

25,868

Bonds

79,86880,90920,240220

15,207

20,151

15,072

10,018Other financial liabilities

63,161

63,21628,362

1,346

473

345

414

32,274428,339431,282

237,650

30,37636,276

42,682

16,134

68,161

As of February 29, 2024

Non-derivative financial liabilities

Total

Note:

Short-term borrowings include the current portion of long-term borrowings.

- 192 -

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, 2023

As of February 29, 2024

Commitment line
Used

–

–

100,000

100,000

100,000

100,000

Used

16,00021,900

Unused132,430

114,330

148,430

136,230––

100,000

100,000

100,000

100,000

UnusedTotal
Overdraft limit

Total
Commercial paper issuance limit
Used
UnusedTotal3) 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.
- 193 -

(Bonds and borrowings)
The fair values of corporate bonds are estimated using the trading reference statistics of the Japan
Securities Dealers Association and others. Borrowings are mainly measured by present value obtainedby 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 tables.
As of February 28, 2023

As of February 29, 2024

Carrying amount

Fair value

Carrying amount

Fair value

Millions of yen

Millions of yen

Millions of yen

Millions of yen

54,48055,332

52,07352,47354,48055,332

52,07352,473

Borrowings

169,310

168,026

134,080

133,000

Bonds

79,81378,812

79,86879,257

Other financial liabilities (non-current)

35,29035,29034,79834,798

Total

284,414282,129

248,747

247,055

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, 2023 and February 29, 2024, there was no transfer between Level 1,
Level 2, and Level 3.

- 194 -

As of February 28, 2023
Financial assets measured at fair value on a recurring basis
Level 1Millions ofyenLevel 2Millions ofyenLevel 3
Millions of
yen

Total
Millions of
yen

–

6

–

6

2,916

–

22,31425,2312,916

6

22,31425,237

Derivative financial liabilities

–

–

–

–

Total

–

–

–

–

Level 1Millions ofyenLevel 2Millions ofyenLevel 3
Millions of
yen

Total
Millions ofyen

Derivative financial assets

–

25

–

25

Other financial assets

–

127

464

592

Other financial assets (non-current)

2,181

63

17,12319,368

Total
Liabilities:
Financial liabilities measured at fair value through profit
or loss

2,181

217

17,58819,986

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 29, 2024
Financial assets measured at fair value on a recurring basis

Assets:Financial assets measured at fair value through profit or
loss

Financial assets measured at fair value through othercomprehensive income- 195 -

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, 2023

Fiscal year ended
February 29, 2024

Millions of yen

Millions of yen

Balance at beginning of period

20,89922,314

Total gains and losses

1,286(2,825)

–

(237)

1,286

(2,587)Purchase

150

1,482

Sale

(19)

(3,382)

Other

(2)

(0)

22,314

17,588

Profit or loss (Note 1)
Other comprehensive income (Note 2)

Balance at end of period
Notes:

1.
2.

Gains or losses included in profit or loss relate to financial assets measured at fair value through profit or loss as of thereporting date. These gains or losses are recorded in “finance costs” in the consolidated statement of income.
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 fairvalue 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.

- 196 -

(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, 2023

Level 1

Level 2

Level 3

Total

Assets:Financial assets measured at amortized cost
Other financial assets (non-current)

–

4,359

50,97255,332–

4,359

50,97255,332

Borrowings–

168,026–

168,026

Bonds–

78,812–78,812Other financial liabilities (non-current)––

35,29035,290–246,838

35,290282,129

Total
Liabilities:
Financial liabilities measured at amortized cost

Total

(Millions of yen)
As of February 29, 2024

Level 1

Level 2

Level 3

Total

Assets:Financial assets measured at amortized cost
Other financial assets (non-current)

–

3,252

49,22052,473–

3,252

49,22052,473

Borrowings–

133,000–

133,000

Bonds–

79,257–

79,257

Other financial liabilities (non-current)––

34,79834,798–212,257

34,798247,055

Total
Liabilities:
Financial liabilities measured at amortized cost

Total

- 197 -

(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, 2023
(Millions of yen)AmountSecurities
Asahi Properties Inc.

6,476

Takenaka Corporation

5,416

Chunichi Shimbun Co., Ltd.

1,108

OSAKA GAS CO., LTD.

686

MBS MEDIA HOLDINGS, INC.

627

Toho Gas Co., Ltd.

569

Nagoya Dome Company, Limited

513

TOKAI TELEVISION BROADCASTING Co., Ltd.

493

Kyushu Kangyo Co., Ltd.

484

Misonoza Theatrical Corporation

381

As of February 29, 2024
(Millions of yen)AmountSecurities
Asahi Properties Inc.

4,417

Nagoya Dome Company, Limited

1,097

Chunichi Shimbun Co., Ltd.

937

MBS MEDIA HOLDINGS, INC.

843

Nagashima Resort Co., Ltd.

776

Toho Gas Co., Ltd.

669

TOKAI TELEVISION BROADCASTING Co., Ltd.

563

Kyushu Kangyo Co., Ltd.

453

CHUBU-NIPPON BROADCASTING CO., LTD.

402

Misonoza Theatrical Corporation

4002) Dividend income(Millions of yen)
Fiscal year ended
February 28, 2023

Fiscal year ended
February 29, 2024

Investments derecognized during theperiod4

67

Investments held at end of period

166

127

170

194

Total

- 198 -

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 29, 2024

Fiscal year ended
February 28, 2023
Fair value on the date of sale

471

4,534

Cumulative gain (loss) on sale

29

3,056

4) 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, 2023 and February 29, 2024, cumulative gain orloss (after tax) in other comprehensive income transferred to retained earnings were ¥(109) millionand ¥1,749 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:
As of February 28, 2023
Carrying amountContractvalueWith term
exceeding
one yearLine item in the
consolidated statement offinancial position

Changes in fair value used
to calculate the ineffective
portion of the hedge

AssetsLiabilities

Millionsof yenMillions ofyenMillions ofyenMillions of
yen

2,101

–

6

–

Other financial assets

–

–

–

–

–

Other financial
liabilities–

Millions of yen

Foreign currency
risk
Forward exchange
contracts
Interest rate risk
Interest rate swaps

As of February 29, 2024
Carrying amountContractvalueWith term
exceeding
one year

AssetsLiabilities

Millionsof yenMillions ofyenMillions ofyenMillions of
yen

1,877

–

25

–

Other financial assets

–

–

–

–

–

Other financial
liabilities–

Line item in the
consolidated statement offinancial position

Changes in fair value used
to calculate the ineffective
portion of the hedge
Millions of yen

Foreign currency
risk
Forward exchange
contracts
Interest rate risk
Interest rate swaps- 199 -

(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, 2023 and February 29, 2024, 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, 2023 and ¥3,000 million in the fiscal year ended February 29, 2024.
38. Subsidiaries
Status of subsidiaries is as follows:
Equity ratio (%)
Name

Location

Reportable segment

As ofFebruary 28,
2023

As of
February 29,
2024

Daimaru Matsuzakaya Department Stores Co. Ltd.

Japan

Department StoreBusiness

100.0

100.0

The Hakata Daimaru, Inc.

Japan

Department StoreBusiness

69.9

69.9

Kochi Daimaru Co., Ltd.

Japan

Department StoreBusiness

100.0

100.0

PARCO Co., Ltd.

JapanSC Business

100.0

100.0

PARCO (SINGAPORE) PTE LTD

Singapore

SC Business

100.0

100.0

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

J. FRONT CITY DEVELOPMENT Co., Ltd.

Japan

Developer Business

100.0

100.0

JFR Card Co., Ltd.

Japan

Payment and
Finance Business

100.0

100.0

Daimaru Kogyo, Ltd.

Japan

Other (Wholesale)

100.0

100.0

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

China

Other (Wholesale)

100.0

100.0

Daimaru Kogyo (Thailand) Co., Ltd.

Thailand

Other (Wholesale)

99.9

99.9

Taiwan Daimaru Kogyo, Ltd.

TaiwanOther (Wholesale)

100.0

–

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

Japan

Other (Merchandise
test and quality
control)

100.0

100.0

Angel Park Co., Ltd.

Japan

Other (Parking)

50.2

50.2

JFR Service Co. Ltd.

Japan

Other
(Commissioned
back-officeservice/parking andleasing)

100.0

100.0

JFR Information Center Co., Ltd.

Japan

Other (Information
service)

100.0

100.0

Daimaru Matsuzakaya Tomonokai Co., Ltd.

Japan

Other (Specified
prepaid transaction
service)

100.0

100.0

XENOZ CO., Ltd.

Japan

Other (Managementof e-sports team,
etc.)

50.8

51.6

Note:

1.

Taiwan Daimaru Kogyo, Ltd. resolved to dissolve as of August 22, 2022, and liquidation was completed on November
14, 2023.

- 200 -

39. Related Parties(1) Transactions with related parties(Millions of yen)
Type

Name

Officers andclose
relatives

NAKAYAMA
Takashi

Notes:

1.

2.

Ownership ratio ofvoting rights

Relationship

Nature of transactions

Transaction
amount(Note 2)

Item

Balance atthe end of the
fiscal year–

Ex-Managing
Executive
Officer of theCompany

Payment of appropriate
amount of remuneration,etc. (Note 1)

14

–

–

The officer mentioned above resigned from his position on December 8, 2023, midway through his term of office for
personal reasons. Upon his retirement, he was paid an appropriate amount, which was calculated based on his
remuneration, etc. from the time of his resignation to the expiration of his term of office, in accordance with aresolution of the Board of Directors.
Transaction amounts do not include consumption taxes.

(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, 2023
Officer remuneration

Fiscal year ended
February 29, 2024
1,750

1,781

Retirement benefit

1

1

Share-based payment

480

359

2,232

2,142

Total

40. Commitments
Commitments related to expenditures after the reporting date are as follows:(Millions of yen)
As of February 28, 2023

As of February 29, 2024

Purchase of property, plant and equipment

246

1,280

Purchase of intangible assets

894

208

8,062

7,067

9,203

8,556

Purchase of investment property
Total- 201 -

41. 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, 2023
Debt guarantees for employees
Total

As of February 29, 2024
0

–

0

–

42. Subsequent Events
At the meeting of the Board of Directors held on April 15, 2024, a resolution was passed concerning mattersrelated to the purchase of own shares in accordance with Paragraph 1, Article 459 of the Companies Act andArticle 39 of the Company’s Articles of Incorporation.
1.

Reason for the purchase of own shares

As announced on April 15, 2024 in the FY2024-FY2026 Medium-term Business Plan, the Company has
committed to working on the “Realization of growth with profitability” and “Optimization of equity amountand enhancement of shareholder returns” in order to enhance medium- to long-term return on capital. This
purchase will be carried out based on this policy.
2.

Details of matters related to the purchase(1) Class of shares to be purchased
Ordinary shares(2) Total number of shares to be purchased
8,000,000 shares (upper limit)(3.03% of total number of issued shares (excluding treasury shares))(3) Total value of shares to be purchased¥10,000 million (upper limit)(4) Purchase period
From May 1, 2024 to July 31, 2024
(5) Purchase method
Market purchase on the Tokyo Stock Exchange (Discretionary trading by a securities company)
43. Approval of Consolidated Financial Statements
These consolidated financial statements were approved by the President and Representative Executive Officer
Keiichi Ono on May 29, 2024.

- 202 -

(2) Other
Quarterly financial information, etc. for the current fiscal year
(Cumulative)

First three months

First six months

First nine months

Current fiscal year

Revenue (Millions of yen)

93,456

191,634

286,562

407,006

Profit before tax (Millions of
yen)

9,926

18,80429,84841,343

Profit attributable to owners ofparent (Millions of yen)

6,397

12,90021,60429,913

Basic earnings per share (Yen)

24.39

49.19

82.38

114.06(Quarterly)
Basic earnings per share (Yen)First quarter

Second quarter

24.39

24.80

- 203 -

Third quarter
33.19

Fourth quarter
31.68

2. Non-consolidated Financial Statements, etc.
(1) Non-consolidated Financial Statements
1) Non-consolidated Balance Sheet(Millions of yen)
As of February 28, 2023

As of February 29, 2024

31,08762,904

75,100113,565

4,939
124
(400)
110,851

4,804
184
(500)
180,959

185
34
219

160
28
189

1,348
1,348

2,221
2,221

1,762
378,341

2,067
367,906

81,00085,500

472
619
(500)
461,695
463,264

346
642
(500)
455,962
458,372

186
186
574,302131
131
639,463

AssetsCurrent assets
Cash and deposits
Short-term loans receivable from subsidiaries andassociates
Accounts receivable - other
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
and associates
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- 204 -

(Millions of yen)
As of February 28, 2023

As of February 29, 2024

45,530–34,33020,0002,000

78,408

719
121
194

899
132
236

122

104

178
1,105
49,971

168
841
135,11880,000105,780
777
1,652
188,209238,180

60,00096,7501,192
1,227
159,169
294,288

31,974

31,974

9,474
239,400
248,874

9,474
239,400
248,874

68,71968,719(13,526)
336,043

77,51377,513(13,316)
345,046

78

128

78
336,121574,302128
345,175
639,463

Liabilities
Current liabilities
Short-term borrowings
Current portion of bonds
Deposits received from subsidiaries andassociates
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
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-salesecurities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets- 205 -

2)

Non-consolidated Statement of Income(Millions of yen)
Fiscal year ended
February 28, 2023

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
Loss on investments in investment partnerships
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 investment securities
Loss on valuation of shares of subsidiaries andassociates
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 29, 2024

9,379
5,859
15,238
6,278
8,959

*1

672
69
45
787

*1

608
280
61
30
383
34
63
1,462
8,284

*1

–
–

*4

8,870
8,870

–

*5

656

–

*6

614

–
8,284
(1,276)
1,112
(163)
8,448

- 206 -

*1

*1,*2

*1

*3

10,536
5,975
16,512
7,972
8,539
578
939
199
1,717
545
260
54
100
193
311
49
1,515
8,741

1,271
16,341(1,013)103(909)
17,251

3)

Non-consolidated Statement of Changes in Equity

Fiscal year ended February 28, 2023
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusOtherretainedearnings
Retainedearnings
brought
forward9,474

239,400

248,874

68,20068,200

Dividends ofsurplus(7,928)(7,928)(7,928)

Profit

8,448

8,448

8,448

Share
capitalBalance at beginning of
period31,974

Total
retainedearnings

TreasurysharesTotalshareholders’equity(13,816)

335,233

Changes during period

Purchase oftreasury shares
Disposal of treasury
sharesNet changes in
items other thanshareholders’ equity
Total changes during
periodBalance at end of
periodBalance at beginning of
period

(0)

(0)

299

299

–

(0)

(0)

519

519

290

809

31,974

9,474

239,400

248,874

68,71968,719(13,526)

336,043

Valuation and translation
adjustments
Valuation
Total
difference
valuationonandavailabletranslation
for-saleadjustments
securities

Total net
assets77335,241

Dividends ofsurplus(7,928)

Profit8,448

Total changes during
periodBalance at end of
period(8)–

Changes during period

Purchase oftreasury shares
Disposal of treasury
sharesNet changes in
items other thanshareholders’ equity

(8)

(8)
299
70

70

70

70

70

879

78

78

336,121- 207 -

Fiscal year ended February 29, 2024
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusOtherretainedearnings
Retainedearnings
brought
forward9,474

239,400

248,874

68,71968,719Dividends ofsurplus(8,457)(8,457)(8,457)

Profit17,251

17,251

17,251

SharecapitalBalance at beginning of
period31,974

Total
retainedearnings

TreasurysharesTotalshareholders’equity(13,526)

336,043

Changes during period

Purchase oftreasury shares
Disposal of treasury
sharesNet changes in
items other thanshareholders’ equity
Total changes during
periodBalance at end of
periodBalance at beginning of
period

(7)

217

217

(0)

(0)

(0)

(0)

8,793

8,793

209

9,003

9,474

239,400

248,874

77,51377,513(13,316)

345,046

Valuation and translation
adjustments
Valuation
Total
difference
valuationonandavailabletranslation
for-saleadjustments
securities

Total net
assets31,974

78

78

336,121

Changes during period
Dividends ofsurplus(8,457)

Profit17,251

Purchase oftreasury shares
Disposal of treasury
sharesNet changes in
items other thanshareholders’ equity
Total changes during
periodBalance at end of
period

(7)

(7)
217
50

50

50

50

50

9,054

128

128

345,175- 208 -

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(For investments in limited liability investment partnerships (deemed to be securities based on Paragraph
2, Article 2 of the Financial Instruments and Exchange Act), these are stated by the net amountcorresponding to the Company’s equity share based on the most recent obtainable financial statements
depending on the reporting date established by the partnership agreement.)(2) Available-for-sale securities
Other than stocks and other securities with no market priceStated 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)
Stocks and other securities with no market priceStated 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
(five years).
(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- 209 -

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.
(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. Accounting policy for revenues and expenses
Revenue generated from contracts with customers for the Company, which is a holding company, mainly
consists of consulting fee income and dividend income from subsidiaries. Income from consulting fees isrecognized as revenue in equal amounts over the contract period because the performance obligation is toprovide management, planning and other guidance to subsidiaries, and such performance obligations are
satisfied on a recurring basis. Income from dividends is recognized as of the effective date.
8. 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.
(Significant accounting estimates)
1. Recoverability of deferred tax assets(1) Amounts recorded in financial statements for the current fiscal year
Deferred tax assets ¥346 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 accounting policies)
No items to report- 210 -

(Changes in presentation)
1. Non-consolidated balance sheet“Deposits received from subsidiaries and associates” (¥2,000 million in the previous fiscal year), which
was included in “Deposits received” in the previous fiscal year is recorded separately in the current fiscal
year due to its increased materiality.
2. Non-consolidated statement of income“Loss on investments in investment partnerships” (¥34 million in the previous fiscal year), which was
included in “Non-operating expenses” in the previous fiscal year is recorded separately in the current fiscal
year due to its increased materiality.

- 211 -

(Notes to non-consolidated statement of income)*1. Transactions with subsidiaries and associates(Millions of yen)
Fiscal year ended
February 28, 2023
Operating transactions
Operating revenue
General and administrative expenses
Non-operating transactions

Fiscal year ended
February 29, 2024

15,238889
672

16,512887
1,490*2. Major components of general and administrative expenses(Millions of yen)
Fiscal year ended
February 28, 2023
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
Business consignment expenses
Miscellaneous expenses

Fiscal year ended
February 29, 2024

799
1,016
194
122
64
273
331
281
265
1,068
536
331

686
1,249
236
104
55
325
368
321
161
1,703
1,000
507

*3. Provision of allowance for doubtful accounts
Fiscal year ended February 28, 2023
Loans to the subsidiary and associate JFR Kodomo Mirai Co., Ltd. were recognized as provision of allowance for
doubtful accounts.
Fiscal year ended February 29, 2024
Loans to the subsidiary and associate JFR Kodomo Mirai Co., Ltd. were recognized as provision of allowance for
doubtful accounts.
*4. Gain on sale of shares of subsidiaries and associates
Fiscal year ended February 29, 2024
Gain on sale was recognized in association with the sale of shares in the subsidiary and associate StylingLife
Holdings Inc.
*5. Loss on valuation of investment securities
Fiscal year ended February 29, 2024
Loss on valuation was recognized for shares of the invested Financie, Inc.
*6. Loss on valuation of shares of subsidiaries and associates
Fiscal year ended February 29, 2024
Loss on valuation was recognized for shares in the subsidiary and associate XENOZ CO., Ltd.

- 212 -

(Notes on securities)
Shares of subsidiaries and associates
As of February 28, 2023
(Millions of yen)
Category

Carrying amount

Fair value

Difference

Shares of subsidiaries

–

–

–

Total

–

–

–

Note:

Carrying amount of non-marketable stocks and other securities not included in the above table(Millions of yen)
Category

Carrying amount

Shares of subsidiaries
Shares of associates
Investments in investment
partnerships, etc.

368,045
10,147148

As of February 29, 2024
(Millions of yen)
Category

Carrying amount

Fair value

Difference

Shares of subsidiaries

–

–

–

Total

–

–

–

Note:

Carrying amount of non-marketable stocks and other securities not included in the above table(Millions of yen)
Category
Shares of subsidiaries
Shares of associates
Investments in investment
partnerships, etc.

Carrying amount
367,43015460- 213 -

(Notes on tax effect accounting)
1. The breakdown of deferred tax assets and liabilities by major cause(Millions of yen)
As of February 28, 2023

As of February 29, 2024

59
8
35
707
275
61
–
119
112
–
95

72
13
38
534
306
249
200
160
112
142
256

1,475
(922)
552

2,087
(1,656)
431

(20)
(34)
(14)
(10)

(15)
(56)
(2)
(10)

Total deferred tax liabilities

(80)

(85)

Net amount of deferred tax assets

472

346

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
Loss on valuation of investment securities
Provision for officer remuneration BIP trust
Loss on impairment of non-current assets
Excess depreciation expense
Other
Subtotal deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Asset retirement obligations
Valuation difference on available-for-sale securities
Business tax refund receivable
Other

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, 2023
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

As of February 29, 2024

30.6

30.6

(34.9)(41.0)

0.8

0.4

0.1
1.8
(0.3)

0.0
2.7
1.7

(2.0)

(5.6)

3. Accounting treatment for income taxes and local income taxes and related tax effect accounting
The Company shifted from the consolidated taxation system to the Japanese group relief system in the current
fiscal year. Accordingly, accounting treatment for and disclosure of income taxes and local income taxes andtax effect accounting are in accordance with Practical Solution on the Accounting and Disclosure Under theGroup Tax Sharing System (The Accounting Standards Board of Japan (ASBJ) Practical Solution No. 42,
August 12, 2021. Hereinafter “Practical Solution No. 42”). The Company considers that there is no effect of
the accounting policy that is associated with the application of Practical Solution No. 42 based on Paragraph
32 (1) of Practical Solution No. 42.

- 214 -

(Notes on business combinations)
No items to report(Notes on revenue recognition)
The basis for understanding revenues is described in “Notes (Significant accounting policies) 7. Accounting
policy for revenues and expenses.”(Significant subsequent events)
Purchase of treasury shares
Notes are omitted concerning the purchase of own shares as the same information is presented in “Significant
subsequent events” in the Notes to Consolidated Financial Statements.
4) Annexed detailed schedules[Annexed detailed schedule of property, plant and equipment, etc.](Millions of yen)
Category

Type of assets
Buildings andstructures

Property, plantand equipment

Balance at
beginning of
periodIncrease during
the period

185

–

–

Intangible assets

Software
Total

25

Accumulated
depreciation

160

42

34

–

–

5

28

18

219

–

–

30

189

60

1,348

3,392

2,229

290

2,221

–

1,348

3,392

2,229

290

2,221

–

Other
Total

Decrease during
Amortization Balance at end of
the period
during the period
period[Annexed detailed schedule of provisions](Millions of yen)

Category

Balance at
beginning of
periodAllowance for doubtful accounts

900

100

–

1,000

Provision for bonuses

194

236

194

236

Provision for bonuses for directors (and otherofficers)

122

104

122

104

Provision for officer remuneration BIP trust

956

721

317

1,360

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- 215 -

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. However, inthe case of unavoidable circumstances, such as an accident which prevents the use of
the public notice by electronic means, they shall be placed in The Nikkei 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 prices 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), Kochi Daimaru Co., Ltd., and also spending at Daimaru
Matsuzakaya ONLINE STORE and DEPACO, will be issued on thefollowing 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)

Note:

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: Complimentary admission may not apply to all cultural events.

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;- 216 -

(2)
(3)
(4)

Right to make a demand pursuant to the provisions of Article 166, paragraph (1) of the Companies Act;
Right to receive an allotment of offered shares and offered share acquisition rights in proportion to the number ofshares held by the shareholder; andRight to demand the purchase of additional shares less than one unit

- 217 -

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, Attached Documents and Written Confirmation
Fiscal year

16th fiscal year (from March 1, 2022 to February 28, 2023)

Filed to Director-General of Kanto Local Finance Bureau on May 26, 2023
(2) Internal Control Report
Filed to Director-General of Kanto Local Finance Bureau on May 26, 2023
(3) Quarterly Securities Reports and Written ConfirmationsFirst quarter of the 17th fiscal year (from March 1, 2023, to May 31, 2023)
Filed to Director-General of Kanto Local Finance Bureau on July 12, 2023
Second quarter of the 17th fiscal year (from June 1, 2023, to August 31, 2023)
Filed to Director-General of Kanto Local Finance Bureau on October 12, 2023
Third quarter of the 17th fiscal year (from September 1, 2023, to November 30, 2023)
Filed to Director-General of Kanto Local Finance Bureau on January 11, 2024
(4) Extraordinary Securities Reports
Filed to Director-General of Kanto Local Finance Bureau on May 26, 2023
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.
Filed to Director-General of Kanto Local Finance Bureau on February 6, 2024
Extraordinary Securities Report based on Article 19, paragraph (2), item (ix) (Change in Representative
Director) of the Cabinet Office Ordinance on Disclosure of Corporate Affairs, etc.
(5) Amended Shelf Registration Statements
Filed to Director-General of Kanto Local Finance Bureau on May 26, 2023
Filed to Director-General of Kanto Local Finance Bureau on February 6, 2024
Amended Shelf Registration Statements pertaining to Shelf Registration Statement filed on March 2, 2022

- 218 -

B.

Information About Reporting Company’s Guarantor, Etc.

No items to report- 219 -