Situation of Corporate Governance

The company believes that a strong corporate governance function and improved competitiveness through expeditious decision-making are indispensable to achieving sustainable growth.
The company has adopted an Audit & Supervisory Board system. As of the date of submission of our annual securities report (May 19, 2022), the company had 13 directors (five of whom are outside directors) and four members of the Audit & Supervisory Board (three of whom are outside members). By including outside directors who are well versed in a variety of areas in the board of directors, we conduct highly effective supervision and strengthen our management structure. We are also working to bolster the functions of the Audit & Supervisory Board, thereby maintaining and strengthening sound management. As a general rule, the board of directors and the Audit & Supervisory Board meet once a month. In addition to these mechanisms, the Company strives to disseminate information through committees led by general managers or other managers below the rank of a representative director. The purpose of these committees is to ensure efficient business activities.
Our outside financial statement auditors, and the Management Auditing Department maintain a close working relationship, exchanging information and opinions as necessary. This system is designed to ensure improvements in the practicability and efficiency of our audits.
Each member of the Audit & Supervisory Board attend board of director meetings, while full-time members of the Audit & Supervisory Board are always present at meetings of the Management Council and other important meetings.

Board of directors:
Meetings are held once a month, chaired by the President and CEO, to strengthen management supervision functions.Audit & Supervisory Board members also attend.(Five out of 13 directors are independent officers)

Audit & Supervisory Board:
Exchanges information and opinions with the financial statement auditors and Management Auditing Department (the internal audit division) for greater effectiveness and efficiency of audits.(Two out of four Audit & Supervisory Board members are independent officers)

Management coouncil:
Meetings are held in principle once a week, with full-time and higher-ranked directors, the full-time Audit & Supervisory Board member, and those nominated by the President as core members. Serves as an advisory body for the President for stronger management strategy functions and more efficient decision-making processes.

Management auditing department:
14 dedicated personnel work with various department heads for streamlined management and controls, investigating and assessing the effectivenss and practicability of internal controls across general business operations. Is an independent body from on-site executive departments.

We conducted an evaluation of the effectiveness of the board of directors through a group discussion based on the results of the questionnaire, which consisted of both multiple-choice and open-ended answers. We also incorporated the results of an analysis of the answers by a third-party organization. The results of the evaluation were reported to the Nomination and Compensation Committee, which offered an exchange of opinions. Last, the results were verified and discussed at a meeting of the board of directors. At the board of director meeting in question, sufficient time was set aside for discussing board effectiveness. After a lively exchange of varied opinions and experiences from directors and members of the Audit & Supervisory Board, the board of directors determined that the board functioned appropriately. In particular, the board recognized improvements in the evaluations of executive directors as a result of the establishment of the Nomination and Compensation Committee. In addition, we concluded that advice and discussions backed by the expertise of outside directors and members of the Audit & Supervisory Board contributed not only to the board of directors, but also served as strengths in establishing a flexible management structure.
On the other hand, it is clear that certain issues are ongoing and must be addressed for the future. These issues include establishing a more transparent management system for board of director meetings and conducting deliberations from the perspective of medium- to long-term management strategies and supervision. Other ongoing issues include speeding up decision-making and clarifying executive responsibilities through a review of business execution authority. As part of our efforts to resolve these issues, we have changed the composition of our board of directors to five independent outside directors (38.5% of board members). We also established a Management Strategy Advisory Committee to provide advice based on committee member expertise.
The Company will continue to implement policies to improve board of director functions, striving for more robust board meeting deliberations and greater board effectiveness.

1. System for retention and management of information on the execution of duties by Directors of the Company
   The Company prepares approval documents, meeting minutes, and other documents necessary for the execution of the duties by the executive director or employee, in accordance with the internal rules of the Company.
   Documents (including electronic media) that have been prepared are stored and managed in a secure, fully searchable format appropriate for each storage medium, and are maintained in a viewable form as necessary.
   The management division specified in the Document Management Rules takes charge of the management of such records and prevents leakage to external parties.


2. Rules for controlling the risk of operating loss incurred by the Company and its subsidiaries (“the Group”) and other systems
   The Company designates its President and CEO as the executive director of risk management and business division heads as directors in charge of risk management.
   These individuals are tasked with developing a system and environment to ensure business continuity and the safety of human lives.
   The Group has established Risk Management Rules to prevent crises or minimize damages in the event of a crisis, striving to reduce risk and mitigate any damages. We have designated management divisions to address risk management by category, and we strive to improve overall corporate value by managing risks of loss for the group as a whole.
   In addition, for the Company to be able to protect and manage information assets from organizational, human, physical, and technical perspectives, the Company has established the Information Security Management Rules to clarify the responsibility hierarchies structures for information security for the Group, and strive to maintain and improve the information security level, as well as information systems of the Company.
   The Company shall establish the Risk Management Committee chaired by the General Manager of the Administration Division to discuss issues and countermeasures related to the promotion of risk management for the entire Group, and report the proceedings to the Management Meeting. Compliance matters deemed highly important by the Compliance Committee are escalated to the board of directors and included in annual reporting.
   In order to enhance the effectiveness of risk management, the Department in charge of internal audits formulates an annual audit plan and conducts internal audits in accordance with the Internal Auditing Rules. The annual audit plan will be reported to the Board of Directors.


3. System to ensure the efficiency of duties executed by Directors of the Company, and directors, executive officers, employees who execute business operations, personnel who execute duties as specified in Article 598, Paragraph 1 of the Companies Act, and other persons equivalent to such personnel of the Company’s subsidiaries (“subsidiaries’ directors, etc.”)
   In addition to holding regular Board of Directors meetings at least once a month, AEON MALL convenes extraordinary meetings of the Board of Directors as deemed necessary.
   Decisions encompassing substantial risk threatening far-reaching impact on the Group are brought to the Management Meeting for discussion. These decisions are then approved by the President and/or by resolution of the Board of Directors.
   The Management Strategy Advisory Committee meets once a month to establish topics in advance from important policy and management issues in response to consultation from the president and CEO. The committee discusses and exchanges opinions on approaches, the direction of initiatives, specific plans, progress, etc., and implements policies and resolves management issues based on the opinions and advice of Independent Outside Directors.
   In the execution of duties, management responsibilities are clarified by granting the authority required for the performance of duties according to the predetermined Rules for Organization Management, Rules for Segregation of Duties, and Rules of Jurisdiction.
   As a system to ensure the efficiency of the performance of duties of the subsidiaries’ directors, etc., the Company approves a Group Medium-term Management Plan, annual management goals, budget distribution, etc. that include subsidiaries at the meetings of the Board of Directors, inspects the progress of business strategies and measures in line with such plan and goals on a quarterly basis, and receives reports on other important information.


4. System to ensure compliance in the performance of duties by Directors and employees the Company, and directors, etc. and employees of its subsidiaries with laws and regulations and the Articles of Incorporation
   We emphasize compliance management and compliance with the AEON Code of Conduct, which is the code of conduct of the AEON Group, fostering improved relations with local communities and meeting our social responsibilities. To prevent harassment, we will establish Anti-Harassment Regulations, providing education and awareness building for employees. To prevent bribery, we are improving our internal structures within the Group and conducting education based on the Basic Rules for the Prevention of Bribery.
   AEON MALL has established a Compliance Committee, which is chaired by the general manager of Administration Division. The role of this committee is to ensure compliance with laws, regulations, the Articles of Incorporation, and internal rules. The committee is also responsible for identifying problems and advancing discussions to resolve said problems. Compliance matters deemed highly important by the Compliance Committee are escalated to the board of directors and included in annual reporting.
   The company has established a help line (AEON MALL Hotline) for internal reporting. The helpline will be set up at subsidiaries in accordance with the Company's system. We ensure privacy protection for users of this help line and that such users are not penalized. Additionally, we investigate any problems reported to the company through this help line. If wrongdoing is confirmed, we take necessary actions in line with our internal rules. The issue in question is reported to the Compliance Committee and the company implements Group-wide measures to prevent recurrence in the future.


5. System to ensure the appropriate operations of the corporate group, comprising the Company, its parent, and subsidiaries
   At the Management Council, discussions are initiated for any business transactions conducted by a director where conflicts of interest may occur between the director or any third party (e.g. the parent company, a subsidiary, or other AEON Group company) and the company, or in those instances where there is, in essence, competition with the same. Such transactions are only allowed to proceed upon approval by the board of directors.
   When conducting transactions with AEON Group companies, such transactions comply with the provisions of our Rules for Managing Related-Party Transactions. Once a year, we report the rate of increase/decrease in annual transaction amounts with each affiliated business partners, and scrutinize the rationality and appropriateness of transactions.
   The Governance Committee, which is an advisory body to the Board of Directors and is composed solely of independent outside directors, examines the fairness and reasonableness of such transactions deemed important. This examination reflects the perspective of improving the corporate value of the Company. Once the examination is completed, the matter is submitted to the Board of Directors for approval. Individuals with special interests in the transaction are excluded from the discussions to ensure the fairness of the procedures.
   The Group also makes decisions after confirming the fairness and reasonableness of transactions.
   As a system of reporting matters concerning the performance of duties by the subsidiaries’ directors, etc. to the Company, the Company requires subsidiaries to report to the Management Meeting based on Rules for Management of Affiliates established by the Company.
   The department in charge of internal auditing performs audits of the Company and its subsidiaries according to the Internal Auditing Rules to ensure the appropriate operations of the Company and its subsidiaries and reports to the President and the full-time Audit & Supervisory Board Members by means of a written internal audit report. Audit results are reported to the Board of Directors on a regular basis.


6. Matters concerning employees who provide assistance with the duties of Audit & Supervisory Board Members of the Company (“Assistants”) when the Audit & Supervisory Board Members decide to hire such Assistants, matters concerning the independence of the Assistants from Directors of the Company, and matters related to ensuring the effectiveness of the instructions provided to the Assistants
   The Company selects and appoints Assistants for the Audit & Supervisory Board Members upon consultation with the Audit & Supervisory Board. The Assistants will not receive orders or instructions from the Directors or any other employees.
   The personnel appraisal of Assistants is performed through consultation with the Audit & Supervisory Board Members, and personnel changes and reprimanding of Assistants require the advance agreement of the Audit & Supervisory Board members.


7. System of reporting to Audit & Supervisory Board Members of the Company
   Company Directors and employees, as well as Directors and employees of subsidiaries, report on management status, business operations, financial position, the progress of internal audits, the status of risk management and compliance, and other matters at meetings of the Board of Directors or Management Meeting attended by the Audit & Supervisory Board Members.
   If Directors or employees of the Company, or directors, etc. or employees of its subsidiaries discover matters that affect the operations or business performance of the Company or its subsidiaries, violations of laws and regulations, or other issues concerning legal compliance, which may cause serious damage to the Company or its subsidiaries, or these have been reported by any of such persons, they shall immediately report to Audit & Supervisory Board of the Company.
   The Company or its subsidiaries prohibit treating the persons who have made such a report in an unfair manner because they have made the report, and will ensure that this rule is clearly communicated to Directors and employees of the Company, and directors, etc., Audit & Supervisory Board Members, and employees of its subsidiaries.


8. Matters concerning policies for the advance payment of expenses required for the performance of duties by Audit & Supervisory Board Members of the Company and reimbursement and other procedures for the treatment of expenses or obligations associated with the performance of such duties
   When the Company receives a request for the advance payment, etc. of expenses from Audit & Supervisory Board Members based on Article 388 of the Companies Act, the Company shall pay such expenses without delay based on the internal rules. The responsible department takes measures regarding the budget required for such payment in every fiscal period.


9. Other systems to ensure the effective auditing by Audit & Supervisory Board Members of the Company
   The department in charge of internal auditing works closely with the Audit & Supervisory Board by, for instance, discussing the details of internal audits with the Audit & Supervisory Board Members as appropriate, and performs audit operations in cooperation to contribute to effective auditing by the Audit & Supervisory Board Members.

1. Organization, Personnel and Procedures
   The company has a total of four members of the Audit & Supervisory Board, of which three are outside members.
   The status of each Audit & Supervisory Board member is as follows.
   
   • Full-time Audit & Supervisory Board Member (Outside Member)
     Maki Watanabe
     Ms. Maki Watanabe possesses extensive practical experience and considerable knowledge in accounting, and has experience as an Audit & Supervisory Board member at other companies.
   • Independent Outside Audit & Supervisory Board Member
     Takao Muramatsu
     Mr. Takao Muramatsu has experience at the Regional Taxation Bureau, extensive specialized knowledge in taxation, and experience as a director and Audit & Supervisory Board member at other companies.
   • Independent Outside Audit & Supervisory Board Member
     Emi Torii
     Ms. Emi Torii possesses specialized knowledge and experience as an attorney in matters of corporate legal affairs.
   • Audit & Supervisory Board Member
     Masato Nishimatsu
     Mr. Masato Nishimatsu possesses broad expertise and and specialized knowledge cultivated at several AEON Group companies, and has knowledge in general business management.
   *The Audit & Supervisory Board is chaired by the full-time Audit & Supervisory Board member and, in principle, is held every month. In addition, we have assigned one person as dedicated staff for assisting the performance of duties by Audit & Supervisory Board members.


2. Activity Status
   
   
   1. The attendance status of each Audit & Supervisory Board member at the Audit & Supervisory Board and board of directors meetings held during the fiscal year is as follows.
      Maki Watanabe:
      15/15 Audit & Supervisory Board meetings (100%), 14/14 board of directors meetings (100%)
      Takao Muramatsu:
      13/15 Audit & Supervisory Board meetings (87%), 12/14 board of directors meetings (86%)
      Emi Torii:
      15/15 Audit & Supervisory Board meetings (100%), 14/14 board of directors meetings (100%)
      Masato Nishimatsu:
      15/15 Audit & Supervisory Board meetings (100%), 14/14 board of directors meetings (100%)
   
   
   2. Major Matters for Consideration at the Audit & Supervisory Board
      (Matters for resolution)
      • Audit policy for Audit & Supervisory Board members, audit plans including priority audit items, and division of duties
      • Appointment or reappointment / non-reappointment of financial statement auditors
      • Agreement to audit remuneration for the financial statement auditors
      (Matters for information sharing and reporting)
      • Information exchange with the President and CEO
      • Information exchange with the financial statement auditors regarding audit policies, audit plans, and audit status
      • Information exchange with the Management Auditing Department regarding audit policies, audit plans, and audit status
      • Reports from executive directors and others on priority audit items and topics arising during the period
      • Monthly audit activity report from the full-time Audit & Supervisory Board member
   
   
   3. Audit Activities
      Members of the Audit & Supervisory Committee attend board of director and Management Council meetings, including by way of methods using the Internet and other channels, according to Audit & Supervisory Board standards, audit policies, and audit plans, etc. determined by the Audit & Supervisory Committee. Members audit the execution of duties by directors through the inspection of important documents and observations of operating departments, etc.
      The full-time Audit & Supervisory Board member, in addition to attending all Management Council meetings held within the fiscal year, also attends major meetings such as those of the Risk Management Committee, Compliance Committee, ESG Promotion Committee, and the Disclosure Committee, checking the status of execution of director duties and providing opinions as necessary. In addition, independent outside auditors and corporate auditors also attend the Management Strategy Advisory Committee meetings, which focus on important policies and management issues in consultation with the president and CEO. The member also inspects and confirms the content of approval documents, minutes, major contracts, and other materials for executive directors.
      Independent outside directors and Audit & Supervisory Board members collaborate to hold monthly information exchange meetings with executive directors, executive employees, and directors of subsidiaries, where one to two of these officers will attend. At these meetings, information is exchanged regarding progress, issues, and other matters for the fiscal year’s policy at each business unit or subsidiary. Furthermore, the full-time Audit & Supervisory Board Member requests reports on the status of execution of duties from executive directors, employees, and others as necessary. The independent outside Audit & Supervisory Board members have been appointed as members of the Nomination and Compensation Committee, where they provide advice and reports to the President and CEO.
      The Audit & Supervisory Board receives reports from financial statement auditors about financial statement audit systems, audit plans including priority audit areas, audit execution status and audit results and exchanges opinions regarding these. Furthermore, the full-time Audit & Supervisory Board member conducts information exchanges at the appropriate timings with financial statement auditors, interacting actively with these auditors. The Audit & Supervisory Board also receives reports from the Management Auditing Department about internal audit systems, plans, execution status, and results and exchanges opinions regarding these. Furthermore, the full-time Audit & Supervisory Board member holds regular meetings with the Management Auditing Department, building a system of cooperation. In addition to these efforts to strengthen cooperation in three-party audits, we are working toward more efficient and effective Audit & Supervisory Board audits with the cooperation of internal controls departments.

Internal Audits
The Management Auditing Department is independent of other executive departments reporting directly to the president. As of February 28, 2022, 14 employees have been assigned to conduct internal audits. The Management Auditing Department conducts internal audits to confirm whether the execution of operations is conducted in accordance with various laws and regulations, company regulations, business plans, etc. The department also confirms whether operations are conducted effectively and efficiently, providing guidance and advice for improvement.
The Management Auditing Department coordinates and exchanges opinions with members of the Audit & Supervisory Board and financial statement auditors on a regular and ad hoc basis to exchange opinions on internal audit implementation plans and results.

Financial Statement Auditor

1. Name
   Deloitte Touche Tohmatsu LLC


2. Continuous Audit Period
   31 Years
   (Note) This period is within the possible scope of investigation by the company; the actual continuous audit period may exceed the above.


3. Certified public accountants assisting in financial statement audits
   Tomoyasu Maruyama
   Jun Miyashita


4. Individuals assisting in financial statement audits
   Nine certified public accountants and 19 others assist in financial statement audit procedures.


5. Policies and reasons for financial statement auditor selection
   In selecting a financial statement auditor, we take into account the overall organization, quality management systems, independence, audit implementation structure, and ability to centrally manage overseas subsidiary firms. We also consider audit fees and other factors.
   We received a presentation from Deloitte Touche Tohmatsu LLC explaining the firm’s corporate structure and policies regarding audits of our company. Subsequently, members of the Audit & Supervisory Board conducted a careful review and determined that Deloitte Touche Tohmatsu LLC was an appropriate selection as our financial statement auditor.
   Policies Regarding the Dismissal or Non-Reappointment of Financial Statement Auditors If the Audit & Supervisory Board determines that the financial statement auditor is subject to the provisions of Article 340, Paragraph 1 of the Companies Act, the Audit & Supervisory Board shall dismiss the accounting auditor, subject to the consent of all members of the Audit & Supervisory Board.
   In addition, if the Audit & Supervisory Board determines issues have arisen related to the audit quality, quality management, independence, etc., of the financial statement auditor, and that such issues represent a significant hindrance to the execution of audit procedures, the Audit & Supervisory Board shall submit a resolution at the general shareholders’ meeting for the dismissal non-reappointment of the proposed financial statement auditor.


6. Evaluation of Financial Statement Auditor by the Members of the Audit & Supervisory Board and the Audit & Supervisory Board
   Based on financial statement auditor selection standards and evaluation standards established by the Audit & Supervisory Board, the Audit & Supervisory Board shall evaluate the quality management structure of the financial statement auditor, as well as the financial statement auditor’s independence, expertise, understanding of AEON MALL business operations, audit fees, communication with company management and members of the Audit & Supervisory Board, coordination with global network member firms, audit plans reflecting considerations of the risk of fraud, etc. Further, the Audit & Supervisory Board shall seek the opinions of the Finance and Accounting Division and Management Auditing Department (executive divisions participating in financial statement audits) in said evaluation.

Activities of outside directors and outside auditors (FY 2021)

	Name	Attendances		Activities
		Board of Directors	Audit & Supervisory
Outside Directors	Kunihiro Koshizuka	15/15	-	Applying his knowledge, expertise and experience in digital and scientific technologies gained as an engineer, Kunihiro Koshizuka has been stating his opinions properly, such as the proposals related to digital transformation for the enhancement of the Company’s corporate value over the medium and long term. Moreover, undertaking the role of a consensus builder for the Outside Directors as the leading independent Outside Director, he provides supervision through deliberation on personnel affairs and remuneration of Directors, etc. as Chair of the Nomination and Compensation Committee.
	Yasuko Yamashita	15/15	-	Applying her good judgment as an accounting expert, Yasuko Yamashita has been providing appropriate supervision and advice, such as on growth strategies and management issues in Japan and overseas, fixing her eyes on the entire Group and adopting fairness and transparency as her perspectives.
	Hironobu Kurosaki	11/11 (Notes)	-	Applying his management experience gained as an executive officer in charge of an overseas affiliated company, Hironobu Kurosaki has been providing appropriate supervision and advice regarding the realization of highly profitable growth for such subjects as the promotion of plans for opening new stores overseas, risk management at times of expanding stores, and the suitability of investment and profitability plans.
	Junko Owada	11/11 (Notes)	-	Applying her experience from the human resources field and IT problem solving, Junko Owada has been providing appropriate supervision and advice to realize sustainable growth for the Company and for the enhancement of medium- to longterm corporate value, such as identifying points in the content of deliberation that requires further examination and making proposals relating to promoting diversity and empowerment of women in the workplace.
	Chisa Enomoto	11/11 (Notes)	-	Chisa Enomoto has been stating her opinions properly, particularly with respect to enhancing the Company’s brand value and reputation, from a general perspective grounded upon her extensive knowledge and experience in public relations strategies that she gained as a public relations officer at multiple companies. Moreover, she has been providing supervision on the effectiveness of the Board of Directors as Chair of the Governance Committee.
Outside Audit & Supervisory Board Member	Maki Watanabe	15/15	14/14	Applying her wealth of knowledge related to accounting and her experience as audit & supervisory board member at other companies, Maki Watanabe has been providing supervision of management, such as stating her opinions on corporate soundness and appropriateness from the perspectives in fields centered on financial affairs and accounting, and on appropriateness of investment profitability plans in accordance with the Company’s business strategies and the way internal control should be.
	Takao Muramatsu	13/15	12/14	Applying his wealth of expertise related to tax affairs and experience as a director and audit & supervisory board member at other companies, Takao Muramatsu has been providing supervision of management, such as stating his opinions on capital costs, appropriateness of investment profitability standards and strengthening governance in Japan and overseas from the medium-and long-term perspective of corporate value enhancement, in addition to offering his proposals on tax affairs.
	Emi Torii	15/15	14/14	Applying her expertise and experience as a lawyer, Emi Torii has been providing supervision of management, such as providing insights on appropriateness of transactions, and the enhancement of the effectiveness of the Board of Directors, from the perspectives of the Companies Act and of the protection of the interests of minority shareholders.

(Notes) The Board of Directors’ meetings were held 11 times since May 20, 2021 when Outside Directors Hironobu kurosaki, Junko Owada and Chisa Enomoto took office upon their appointment at the 110th Ordinary General Meeting of Shareholders.

Holding of Concurrent Position of Outside Directors and Audit & Supervisory Board Members, Reasons for Election, etc. (as of May 19, 2022 )

	Name	Organization	Concurrent Position	Relationship With AEON MALL
		Reasons for Election
Outside Directors	Kunihiro Kosizuka	Tokyu Construction Co., Ltd.	Outside director	No business relationship
		HOUSEI Inc.	Outside director
		In addition to serving as director related to technology strategies, new business creation, and large-scale acquisition projects, he also possesses expertise, knowledge, and experience in digital science and technology cultivated as an engineering professional. Our expectation is that he is capable of offering appropriate advice and supervision regarding management issues, businesses that produce future ways of living for a new era, and promotion of digital transformation. Therefore, we have appointed him as a director. We believe Mr. Koshizuka qualifies as an independent officer having no relationships that may result in a conflict of interest. He is not a shareholder of Aeon Mall, nor does he have any personal relationships with major Aeon Mall transaction partners.
	Hironobu Kurosaki	－	－	－
		As the chief responsible party (President) of overseas local subsidiaries and in activities there, he has built up experience and expertise in his involvement with management, e.g. building structures and expanding business, and has developed knowledge about risk management overseas in his experience while assigned abroad in developing nations. Our expectation is that he will be able to leverage these to offer appropriate advice and supervision regarding the achievement of high profit growth in overseas businesses, a management issue for the company. Therefore, we have appointed him as a director. We believe Mr. Kurosaki qualifies as an independent officer having no relationships that may result in a conflict of interest. He is not a shareholder of Aeon Mall, nor does he have any personal relationships with major Aeon Mall transaction partners.
	Junko Owada	Tokyo Ichiban Foods Co., Ltd	Advisor	No business relationship
		Hitachi, Ltd	Assigned under Professional Contract of Human Resources Area
		Arbeit Times Co., Ltd	Outside Director
		She has deep knowledge in a number of personnel recruitment education-related areas, such as human resources utilization, personnel solutions, diversity, and work-style reform. Our expectation is that she will be fully able to leverage her experience and achievements as an advisor and consultant aiding problem-solving in the IT and personnel fields to offer recommendations on the promotion of diversity and work-style reform, which are important issues for the company. Therefore, we have appointed her as a director. We believe Ms. Owada qualifies as an independent officer having no relationships that may result in a conflict of interest. She is not a shareholder of Aeon Mall, nor does she have any personal relationships with major Aeon Mall transaction partners.
	Chisa Enomoto	PERSOL HOLDINGS CO., LTD.	Independent Director (Member of Supervisory Committee)	No business relationship
		Meiji University	Member of Communication Strategy Committee
		She has abundant experience and achievements as a leader at multiple companies, including multinational firms, and possesses a broad network and scope of activities, including initiatives at universities and serving as an outside director to other companies. Our expectation is that she will be fully able to offer advice and supervision from a multifaceted point of view and with her broad knowledge with regard to information disclosure and brand strategy promotion, which are important issues for the company. Therefore, we have appointed her as a director. We believe Ms. Enomoto qualifies as an independent officer having no relationships that may result in a conflict of interest. She is not a shareholder of Aeon Mall, nor does she have any personal relationships with major Aeon Mall transaction partners.
	Junko Taki	Taki Certified Public Accountants Office.	Representative	No business relationship
		Ms. Taki has experience in business strategy planning, business management infrastructure restructuring, and financial internal controls at other companies as an executive working closely with management. She also has a high degree of knowledge cultivated as a specialist in accounting audits, accounting consulting, and corporate governance at a major audit firm as a certified public accountant. Our expectation is that she is capable of offering appropriate advice and supervision regarding investment decisions, business strategies, internal control audits, etc., in the Company's financial areas from a multifaceted perspective (corporate experience x financial expertise). We believe Ms. Taki qualifies as an independent officer having no relationships that may result in a conflict of interest. She is not a shareholder of Aeon Mall, nor does she have any personal relationships with major Aeon Mall transaction partners.
Outside Audit & Supervisory Board Member	Maki Watanabe	－	－	－
		Ms. Watanabe has extensive expertise and experience in accounting at AEON Co. and has served as an Audit & Supervisory Board member at various Aeon Group companies. We believe she will continue to contribute her expertise and experience to Aeon Mall management.
	Takao Muramatsu	MURAMATSU TAX ACCOUNTANT OFFICE	Director	No business relationship
		BESTERRA CO., LTD	Outside Audit & Supervisory Board Membe
		Serendip Holdings Co., Ltd.	Outside Audit & Supervisory Board Membe
		GLOBERIDE, Inc.	Outside Director (audit and supervisory committee member)
		Mr. Muramatsu contribute advice and oversight based on his extensive knowledge in tax matters stemming from his experience at the Regional Taxation Bureau, as well as his experience as a director and member of the Audit & Supervisory Board at other companies. He will continue to contribute his expertise and experience to Aeon Mall management. We believe Mr. Muramatsu qualifies as an independent officer having no relationships that may result in a conflict of interest. He is not a shareholder of Aeon Mall, nor does he have any personal relationships with major Aeon Mall transaction partners.
	Emi Torii	Nozomi Sogo Attorneys at Law	Partner	No business relationship
		Kanto-Shinetsu Regional Pension Records Correction Council, Ministry of Health, Labour and Welfare	Committee Member
		Ms. Torii possesses experience and expertise as an attorney related to corporate law. We have selected her to contribute opinions and viewpoints to Aeon Mall management from the standpoint of legal matters. We believe Ms. Torii qualifies as an independent officer having no relationships that may result in a conflict of interest. He is not a shareholder of Aeon Mall, nor does he have any personal relationships with major Aeon Mall transaction partners.

(1) Matters concerning a policy regarding determinations and calculation methods of remuneration amounts, etc., for directors
The company has established a policy regarding determinations and calculation methods of remuneration amounts, etc., for directors, the details of which are as follows.

1. Director remuneration provides strong motivation to carry out management policies, is linked to business performance, and is designed to ensure objectivity and transparency.


2. Director remuneration consists of basic compensation, performance-linked compensation, and stock options.
   
   
   
   1. Basic Compensation
      Basic compensation is paid on a monthly basis, as determined by individual evaluation and within the standard amount established for each title.
   
   
   2. Performance-Linked Compensation
      Performance-linked compensation is weighted at approximately 30% of total cash compensation (basic compensation plus performance-linked compensation), weighted according to individual responsibility.
      Performance-linked compensation paid to each director (individual basis) is calculated according to performance-linked amount and performance-linked payout ratio, reflecting a payout ratio based on corporate earnings (0% to 170%) and an evaluation of individual performance. We have selected budget-toactual for the beginning of ordinary income as the most appropriate indicator of normal business performance for the company. The budget-to-actual indicator for ordinary income for the current fiscal year was 61.8%.
      Evaluations of individual director performance are conducted by independent outside directors serving as members of the Nomination and Compensation Committee, based on an annual performance report of the individual director in question. These evaluations finalized after an additional evaluation by the president of the company. The president of the company provides the final results of director evaluations and performance-linked payout ratios to the independent outside directors. Performance-linked compensation is paid once a year within three months after the end of the fiscal year.
   
   
   3. Stock Options
      Our aim is to increase the motivation and morale toward medium- and long-term sustained earnings and corporate value improvement through the allocation of stock acquisition rights as stock options reflecting corporate earnings. We accomplish this by strengthening the relationship between share prices, earnings, and compensation, ensuring directors share the same benefits of share price increases and risk of share price decreases with shareholders.
      Allocation amounts are determined based on performance for the fiscal year in question with respect to standard allocation amounts determined by position. The fair value of Performance-Linked Stock Options was limited to a maximum ¥100 million per fiscal year as approved at the meeting of general shareholders (resolution of the 96th regular meeting of shareholders held on May 17, 2007). If ordinary income for the grant year is less than 80% of budget, half of planned options will be granted. Allocation timing is determined at the board of directors meeting held yearly in April.
   
   
3. Outside directors are paid a fixed compensation only. Company earnings and individual performance evaluations are not considered as part of this compensation.


4. The remuneration limit for directors as the combined monetary total of basic compensation and performance-linked remuneration was limited to a maximum ¥600 million per fiscal year as approved at the 96th regular meeting of shareholders, held May 17, 2007. The company had a total of 20 directors serving at the time of the resolution.


5. The president and CEO is the person with the authority to determine the amount of individual director remuneration, etc., and who is also best suited to evaluate the performance of each director from a high level overlooking the overall performance of the Company. The particulars of this authority and scope of discretion relates to individual remuneration amounts (cash portion) for each director. At a meeting held in November 2018, the board of directors resolved to establish the Nomination and Compensation Committee, which began operating in January 2019. The Nomination and Compensation Committee consists of seven independent outside directors (as of February 28, 2022) who conduct deliberations, and advising and reporting to the president and chief executive officer of the company. The president and CEO determines performance-linked compensation within a pre-established range based on Company performance and reports from the committee. Compensation evaluations are based on the performance of each individual director.


6. Given their independent position in supervising the execution of duties by directors, members of the Audit& Supervisory Committee are paid only fixed compensation. This level of remuneration is necessary to ensure the appropriate people play a central role in establishing and operating high-quality corporate governance. The remuneration limit for directors was limited to a maximum ¥50 million per fiscal year as approved at the 91st regular meeting of general shareholders, held May 8, 2002, finalized subsequent to negotiations with the members of the Audit & Supervisory Board. The company had a total of four members of the Audit & Supervisory Board serving at the time of the resolution.
   The following outlines policies related to remuneration of members of the Audit & Supervisory Board:
   
   
   
   1. Basic Compensation
      The company pays a fixed amount according to the experience, insight, and title of each member of the Audit & Supervisory Board.
   
   
   2. Performance-Linked Compensation
      The company does not offer performance-linked compensation to members of the Audit & Supervisory Board.
   
   
   3. Stock Options
      The company does not offer stock options to members of the Audit & Supervisory Board.

Ratio of Remuneration by Type for Directors According to Title

Title	Basic compensation	Performance-linked compensation	Medium- and long-term incentive stock options	Total
Executive Directors	61% to 69%	22% to 30%	9%	100%
Directors	68% to 72%	22% to 25%	6% to 7%
Outside Directors	100%	0%	0%

(Note)

1. This model represents 100% achievement of targets related to performance-linked compensation. The ratios above will change according to changes in company earnings performance, share price fluctuations, etc.


2. Different compensation tables are applied depending on director role and grade. Therefore, ratio of compensation by type may differ for individuals, even those who have the same title.

Board of Director Activities
The AEON MALL board of directors made the following deliberations and decisions related to director remuneration during the current fiscal year:

• April 13, 2021:Decision regarding performance-linked remuneration for directors
• April 13, 2021:Issuance of stock acquisition rights as 14th Performance-Linked Stock Options
• April 13, 2021:Allocation of stock acquisition rights as 14th Performance-Linked Stock Options
• May 20, 2021: Decision regarding basic compensation for directors for fiscal 2021

Role and Activities of the Nomination and Compensation Committee
The Nomination and Compensation Committee serves as an advisory organ to the president and chief executive officer. The committee deliberates, exchanges opinions, and provides advice and reports to the president of the company regarding the propriety of basic compensation and performance-linked compensation paid to directors, as well as the validity of performance evaluations of said directors.

• March 8, 2021: Matters related to the evaluation of individual executive director performance
• April 8, 2021: Report on matters related to individual director performance evaluation results and performance-linked compensation payout ratios
• July 20, 2021: Election of committee chairpersons, selection of the head independent director, and size and composition of the board of directors
• January 21, 2022: Nominees for new outside directors, director structure for the next fiscal year, matters concerning polices and plans for developing successors and other director candidates, and matters concerning the evaluation of individual executive director performance

(2) Total Amount of remuneration, etc. by Each Director Title, Total Amount by Type of Remuneration, etc., and Number of Directors Eligible

Director Title	Total Amount of Remuneration, etc. (million yen)	Total Amount of Remuneration by Type (million yen)				Number of Eligible Directors
		Basic Compensation	Stock Options	Performance-Linked Compensation	Non-monetary compensation, etc. (excluding in the left column)
Directors (Excluding Outside Directors)	160	130	14	15	14	10
Members of the Audit & Supervisory Board (Excluding Outside Members)	－	－	－	－	－	－
Outside Directors	56	56	－	－	－	9

Note:
1. The above does not include one unpaid director and one unpaid member of the Audit & Supervisory Board.
2. The breakdown of the total amount of non-monetary compensation, etc., to directors (excluding outside directors) is 14 million yen in stock options.

(3) Total Amount of Consolidated Remuneration, etc. for Each Director
Not provided, as no individual is paid total consolidated remuneration of more than ¥100 million.

(4) Important Matters Related to Salaries of Directors Also Serving as Employees
No applicable items.

(1) Standards and Approach to Investment Stock Classification
The company classifies investment stock as stock held for purposes of pure investment and stock held for purposes other than pure investment. Investment stock held for purposes of pure investment is held for the purpose of generating profit from fluctuations in market value. Investment stock held for purposes other than pure investment is held for purposes other than profit.

(2) Investment Stock Held for Purposes Other Than Pure Investment

1. The Company's policy on strategic cross-shareholdings is to hold stock for the purpose of contributing to the enhancement of the Group corporate value from a medium- to long-term perspective, taking into account business strategies, business relationships, and other factors in a comprehensive manner.
   The Board of Directors meets once a year to determine the rationale for holding individual stocks by examining economic rationale, including the purpose of the holding, holding risk, and cost of capital, etc., from a comprehensive perspective. If a stock is deemed to have little significance, the Company will consider selling the shareholding, taking into account the impact on the market, etc.


2. Number of Stock Holdings and Balance Sheet Balances

	Number of Stock Holdings (Holdings)	Total Balance Sheet Balance (million yen)
Unlisted Stocks	2	6
Stocks Other Than Unlisted Stocks	11	1,985

(Holdings with increased number of shares in the current fiscal year)
Not applicable.

(Holdings with decreased number of shares in the current fiscal year)
Not applicable.

3. Information Regarding Number of Shares, Balance Sheet Balances, etc., for Each Specified Investment Stock or Constructively Owned Stock Specific Investment Stocks

   Company NameName	FY2021	FY2020	Holding Purpose, Quantitative Holding Benefit,and Reasons for Increased Holding	Holdings in AEON MALL
   	No. of Shares	No. of Shares
   	Balance Sheet Balance (million yen)	Balance Sheet Balance (million yen)
   HotLand Co.,Ltd	560,000	560,000	From the viewpoint of transaction information management, we decline to provide the quantitative benefit of holdings here. We engage in store leasing transactions with this company and hold shares of this company to ensure a smooth business relationship. We have performed a comprehensive verification of the rationality based on facts related to transactions with this company, as well as the economic rationality of the stock holding, including the cost of capital.	No
   	738	672
   AEON Delight Co., Ltd.	97,500	97,500	From the viewpoint of transaction information management, we decline to provide the quantitative benefit of holdings here. We engage in facilities maintenance contracting and other transactions with this company and hold shares of this company to ensure a smooth business relationship. We have performed a comprehensive verification of the rationality based on facts related to transactions with this company, as well as the economic rationality of the stock holding, including the cost of capital.	Yes
   	289	309
   AEON Kyushu Co., Ltd.	120,000	120,000	From the viewpoint of transaction information management, we decline to provide the quantitative benefit of holdings here. We engage in store leasing transactions with this company and hold shares of this company to ensure a smooth business relationship. We have performed a comprehensive verification of the rationality based on facts related to transactions with this company, as well as the economic rationality of the stock holding, including the cost of capital.	No
   	255	228
   AEON Fantasy Co., Ltd.	114,998	114,998	From the viewpoint of transaction information management, we decline to provide the quantitative benefit of holdings here. We engage in store leasing transactions with this company and hold shares of this company to ensure a smooth business relationship. We have performed a comprehensive verification of the rationality based on facts related to transactions with this company, as well as the economic rationality of the stock holding, including the cost of capital.	No
   	226	291
   MAXVALU NISHINIHON CO.,LTD.	58,460	58,460	From the viewpoint of transaction information management, we decline to provide the quantitative benefit of holdings here. We engage in store leasing transactions with this company and hold shares of this company to ensure a smooth business relationship. We have performed a comprehensive verification of the rationality based on facts related to transactions with this company, as well as the economic rationality of the stock holding, including the cost of capital.	No
   	184	106
   GFOOT CO.,LTD.	520,000	520,000	From the viewpoint of transaction information management, we decline to provide the quantitative benefit of holdings here. We engage in store leasing transactions with this company and hold shares of this company to ensure a smooth business relationship. We have performed a comprehensive verification of the rationality based on facts related to transactions with this company, as well as the economic rationality of the stock holding, including the cost of capital.	No
   	156	207
   DCM Holdings Co., Ltd.	80,850	80,850	From the viewpoint of transaction information management, we decline to provide the quantitative benefit of holdings here. We engage in store site leasing transactions with this company and hold shares of this company to ensure a smooth business relationship. We have performed a comprehensive verification of the rationality based on facts related to transactions with this company, as well as the economic rationality of the stock holding, including the cost of capital.	No
   	90	85
   MINISTOP Co., Ltd.	14,641	14,641	From the viewpoint of transaction information management, we decline to provide the quantitative benefit of holdings here. We engage in store leasing transactions with this company and hold shares of this company to ensure a smooth business relationship. We have performed a comprehensive verification of the rationality based on facts related to transactions with this company, as well as the economic rationality of the stock holding, including the cost of capital.	No
   	21	19
   Resona Holdings, Inc.	25,987	25,987	From the viewpoint of transaction information management, we decline to provide the quantitative benefit of holdings here. We engage in financing transactions with this company and hold shares of this company to ensure a smooth business relationship. We have performed a comprehensive verification of the rationality based on facts related to transactions with this company, as well as the economic rationality of the stock holding, including the cost of capital.	No (Note)2
   	13	11
   Mizuho Financial Group, Inc. (Note)2	5,952	5,952	From the viewpoint of transaction information management, we decline to provide the quantitative benefit of holdings here. We engage in financing transactions with this company and hold shares of this company to ensure a smooth business relationship. We have performed a comprehensive verification of the rationality based on facts related to transactions with this company, as well as the economic rationality of the stock holding, including the cost of capital.	No (Note)2
   	9	9
   Saibo Co., Ltd.	1,000	1,000	From the viewpoint of transaction information management, we decline to provide the quantitative benefit of holdings here. We engage in building lease transactions with this company and hold shares of this company to ensure a smooth business relationship. We have performed a comprehensive verification of the rationality based on facts related to transactions with this company, as well as the economic rationality of the stock holding, including the cost of capital.	Yes
   	0	0

   (Note)

   1. Fuji Retailing Co., Ltd. and Maxvalu Nishinihon Co., Ltd. conducted a share exchange on March 1, 2022, and the Company changed its shareholding to Fuji Retailing.
   
   
   2. Although the company itself does not hold shares of AEON MALL, a subsidiary of the company holds shares of AEON MALL.

   Constructive Stock Holdings
   Not applicable.

   (3) Investment Stock Held for Purposes of Pure Investment
   Not applicable.

   Auditor Remuneration Detail

   (1) Remuneration for Certified Public Accountants Performing Audits, Etc.

   Classification	FY2020		FY2021
   	Remuneration for Audit Certification Work (million yen)	Remuneration for Non-Audit Work (million yen)	Remuneration for Audit Certification Work (million yen)	Remuneration for Non-Audit Work (million yen)
   Service Provider	90	41	110	30
   Consolidated Subsidiaries	19	－	－	－
   Total	110	41	110	30

   (FY2020)
   The content of non-audit work at our company is consulting work related to ESG information disclosure.

   (FY2021)
   Non-audit services for the Company include advice on human rights due diligence.

   (2) Remuneration for Organizations Belonging to Network of Certified Public Accountants Performing Audits, Etc. (Excluding (1))

   Classification	FY2020		FY2021
   	Remuneration for Audit Certification Work (million yen)	Remuneration for Non-Audit Work (million yen)	Remuneration for Audit Certification Work (million yen)	Remuneration for Non-Audit Work (million yen)
   Service Provider	－	23	－	32
   Consolidated Subsidiaries	80	13	95	20
   Total	80	36	95	53

   (FY2020)
   The content of non-audit work at our company is work related to tax filing.
   The contents of non-audit operations at consolidated subsidiaries are operations related to market analysis and research.

   (FY2021)
   The content of non-audit work at our company is work related to tax filing.
   The contents of non-audit operations at consolidated subsidiaries are operations related to market analysis and research.

   (3) Other Remuneration Based on Important Audit Certification Work
   Not applicable.

   (4) Policy for Determining Audit Remuneration
   The company’s policy for determining certified public accountant audit remuneration considers the number of days required for an audit and other factors.

   (5) Reasons Why the Audit & Supervisory Board Agreed to Audit Remuneration, etc.
   The Audit & Supervisory Board has agreed to financial statement auditor remuneration according to the provisions of Article 399 Paragraph 1 of the Companies Act. This decision was the result of investigations of estimate reflecting audit hours, remuneration unit prices, and other factors based on internal reports and documents from the Financial Division and other divisions, details of audit plans provided by the financial statement auditor, and performance results from the prior fiscal year.