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Home , Convenience store, Ministop

MINISTOP CO., LTD. 1-5-1 Nakase, Mihama-ku, Chiba City, Chiba 261-8540 Tel: 81-43-212-6471 Fax: 81-43-212-6746 URL: http://www.ministop.co.jp/ MINISTOP CO., LTD. ©2008 MINISTOP Co., Ltd. 08.10 President’s Message

The goal of MINISTOP is to work with franchised store challenges. Retailers need to adapt to structural social Our Satisfaction is Derived from the changes, diversifying customer values, and competition Satisfaction of Our FC Owners. owners in order to create stores that can earn the with other formats. This competition is producing an unforgiving operating environment in which retail chains We hope to share the satisfaction and joy of trust and support of our customers. unable to earn customers’ support will be forced out of managing MINISTOP stores with every single business. franchised (FC) store owner. Toward a common To succeed, we will reinforce our competitive edge goal, we will progress together to take the next by building on the “Combo Store” format that we have step forward. refi ned since the fi rst MINISTOP opened. One way is by developing even more in-store menu items. In MINISTOP’s purpose is to deliver original products addition, we are rolling out a new Combo Store format. and services that satisfy our customers through the store business. However, before reaching Capturing synergies with the ÆON Group, ’s that point, we consider it a major precondition that FC largest retailing organization, will also be pivotal to our owners feel satisfied and happy managing MINISTOP. success. For example, MINISTOP will increase the use of Giving serious consideration to building a system for WAON, the ÆON Group’s e-money, to offer customers making that happen, and putting it into practice—that is greater convenience. We will further differentiate our stores the role we play as we walk hand in hand with FC owners. by selling many original products, including products sold MINISTOP values this partnership approach. We do not under the TOPVALU . force our corporate logic on anyone, but hope instead to Going one more step, we created a unique store maintain a relationship in which we share the same goals personnel training system called the Yellowtail Program. as our FC owners and work together by giving our best to This gives our stores another way to overcome even each other toward that goal. greater competitive challenges. We are now upgrading this program to make store personnel more skilled in serving customers and improving the selection of merchandise. The aim is to achieve even greater customer satisfaction. Headquarters Franchised MINISTOP will continue to take on new challenges. We are Stores strongly committed to working with our franchised store owners in order to create stores that can earn the trust Nobuyuki Abe President and Representative Director and support of our customers. Since its inception, MINISTOP has distinguished its while achieving the highest gross profi t margin in the operations from those of other chains by operating sector. Convenience stores in Japan “Combo Stores,” which combine the conventional face many challenges. The most serious are the nation’s CONTENTS convenience store and in-store prepared fast food declining population and the falling number of children as President and Representative Director MINISTOP Brand Combo Store ...... 2 retailing models. We have used this strategy to grow the population ages. We must also overcome many other Winning Customers’ Hearts with ...... PROFILE Our Products and Services 4 Store Backup through Information and Management Philosophy of MINISTOP Born in Niigata Prefecture Logistics Systems ...... 8 Mission March 1982 Joined Ministop Co., Ltd. Environmental Protection and Social Activities ...... 10 Contribute to the health, peace of mind, and convenience of each MINISTOP customer in their March 1997 General Manager, Development Div. Process of Store Opening everyday life. May 1997 Director Mission Differentiate MINISTOP from competitors through a strategy of combination, and strive for growth —Following up on new store openings...... 12 and prosperity together with people who value independence. March 2001 General Manager, Operations Div. Franchise Contract ...... 15 Vision March 2005 General Manager, West Region ...... The 21st Century will be the age of MINISTOP. Business Div. Introduction to the MINISTOP Education System 16 Vision Value Establish the MINISTOP brand image at home and abroad as the symbol of the highest quality May 2005 Managing Director Profile of ÆON Co., Ltd...... 20 Combo Store, renowned for convenience and delicious food. March 2007 General Manager, FC Support Div. Corporate Data...... Value 22 ◎ Placing the customer first ◎ Adapting to change ◎ Emphasizing in-store performance May 2008 President and Representative Director Messages from FC Owners...... 24 ◎ Harmony with the community ◎ Respecting people ◎ Fairness ◎ Having fun (concurrently General Manager, FC Support Div.) 1 MINISTOP Brand Combo Store

Only one in the industry. The unique style of “Combo Stores.”

The biggest distinction between MINISTOP and other convenience stores lies in the fact that we are not just a convenience store, but a Combo Store. A Combo Store is a business style that integrates a convenience store with a fast food shop. In addition to regular convenience store goods, we characteristically offer an original menu of fast food including soft serve , parfaits, pita , X-Fried Potatoes and chinese steamed buns. The greatest advantage of this unique style is the high gross profit margin that gives a boost to store Dー Merchandise gondola management. Stores are set up with an Eat-in corner that is a distinctive E —Specially designed for its conspicuous, feature of a Combo Store, so customers can immediately enjoy easy-to-take purpose their freshly prepared fast food and purchased products.

F

D

B Eー Walk-in chiller —Easily manages A

C Fー Open case chiller A Soft serve ice cream freezer ー — Ensures the freshness of chilled foods —Easy operation

Sales breakdown by product group (As of the end of February 2008)

Books and services: In-store prepared fast food:

Centrally prepared Household goods: fast food: 4.0% 7.6% 8.7%

19.3% Pylon sign —Easily identified even from a distance

MINISTOP means, “to drop in just for a 48.3% 12.1% moment.” The logo represents our desire to Processed foods, products, provide home-style warmth and comfort by Beverages: Chilled foods, modeling a house amid trees. Bー Kitchen space Cー Eat-in corner Frozen foods, : —Uniquely designed for the Combo Store —Cu stomers can immediately enjoy foods 2 purchased onsite. 3 Winning Customers’ Hearts with Our Products and Services

We are delivering health, peace of mind and MINISTOP’s abundant selection of fast food products convenience by providing products and services Cold Desserts Major cold dessert products that customers will love. Soft Serve Ice Cream AVanilla Soft Serve Ice Cream BBelgium Soft Serve Ice Cream CBelgium Chocolate and Vanilla Soft Serve Ice Cream Parfaits DApple Mango Parfait EPudding Parfait FCondensed and Strawberry Parfait Central to the Combo Store concept is providing a rich array of new products in response to customers’ Halo-Halo GLemonade Halo-Halo HGreen Tea with Red Beans Halo-Halo IApricot with Lychee Halo-Halo needs as quickly as possible. We deliver fast food known for its superior taste and freshness, and high BC EFHI quality, safe convenience store goods to our customers. For example, to be responsive to customers’ food preferences, we carefully select production sites and ingredients, and offer products that are reasonably priced without compromising taste or quality.

Fast Food

Fast food generates high profitability for the FC stores. All of MINISTOP’s fast food offerings are flavorful and fresh. We are proud of the variety in our original menu—from the ever A D G popular soft serve ice cream to new products made of selected materials featuring a rich mixture of raw materials directly imported from abroad—which has distinguished MINISTOP as the premier Combo Store over a broad customer base. Foods *Not available in some areas. Major foods products Major products AB Pita Sandwiches ABlackened Chicken BShrimp with Thousand Island Sauce AX-Fried Potatoes BSpicy Fried Potatoes Hot Dogs CHot dog Cold Desserts Foods Snacks CFried Chicken Seasoned with DHot dog with Cheese Sauce and Spicy Chili Sauce Spices MINISTOP is famous for its soft serve Major foods like jumbo pita Fried potatoes, fried chicken, Chinese DFried Octopus Dumplings with ice cream. Fine quality fruit parfaits sandwiches with juicy chicken and steamed buns. A rich variety of snacks B Sweet and Spicy Sauce and summer Halo-Halo specials are succulent shrimp earn customers’ to satisfy lighter hunger cravings. EJapanese Style Hot Plate also popular. satisfaction. C FHandmade Chinese Steamed Bun GChinese Steamed Bun Filled with Red Beans

C E G

D D F

A

*Part of sold products.

Product Development Developing products that our stores are proud to stock

Keiko Fujii Assistant Manager, Cold Dessert Sec., Fast Food Development Dept., Fast Food Merchandising Div.

Developing new fast food products begins with researching rival products and making taste and ingredient decisions based on market research, such as identifying the most popular and fruits of the season. Procuring raw ingredients and coordinating factory production lines is integral. The most time-consuming step is creating the distinctive flavor that MINISTOP is known for. In some cases, we have over 100 samples, and it can take over a year to settle on a flavor. We plan to continue our dedication to flavor and ingredients in order to develop products that our stores will be proud to sell.

4 5 Winning Customers’ Hearts with Our Products and Services

Convenience store goods SERVICES

We work diligently to develop original products that accurately respond to market trends. We are expanding our services to attract more customers than ever. Convenience products are essential to our customers’ everyday lives. MINISTOP distinguishes itself from competitors by One of the reasons behind MINISTOP’s popularity with customers is the wide variety of services offered over the counter. We offering a full selection of high-value products from ÆON Group, while also focusing on an original MINISTOP line. provide a varied range of services essential to daily life, such as payment services for utility bills including electricity and gas, *Not available in some areas. and accepting orders for parcel delivery.

ÆON’s Private Brand TOPVALU Counter Services

TOPVALU is an ÆON private brand that ●Yu-Pack ●Advance orders and sales at the shop helps customers meet their basic daily ●Preken (prepaid card, a type of electronic money) • Year-round catalog gifts • Advance order • Osechi (festive food prepared for the New Year) needs. Products incorporating safety ●Color copy service • Rolled sushi for Eho (lucky direction) and consideration for the environment ●Industrial and bulk garbage processing tickets • Mother’s Day and Father’s Day gifts as well as providing value and savings to ●FAX service • Mid-summer gifts • Year-end gifts • Christmas cakes the customer are sold at MINISTOP and ●Telephone card • New Year’s greeting card printing other outlets of group companies. ●Internet Delivery Service ●ATM banking ●Payment service ● Internet Delivery Service ● • Telephone bills (fi xed-line and cellular phones) • payments • order purchases • Electricity fees • Gas fees MINISTOP has begun an internet delivery service which allows • Water fees • NHK licence fees customers to pick up products that they have bought at various •Public funds (national pension premiums, automobile tax, light vehicle tax, online shops from our stores. Our main business partners are used- property tax, inhabitant tax, national health insurance premiums and others) book dealer E-Bookoff, online catalogue stores Cecile and Dinos, Original Products Open-case chillers • Online payments • SmartPit and bookseller Rakuten Books.

MINISTOP has a head start on the convenience industry We offer select seasonal products in our open-case chillers. with our line of chilled, refi ned sake. We are involved from the We boast a diverse lineup—from enticing desserts that beg to We are ÆON very early stages of rice cultivation, and are committed to be enjoyed, to juicy grilled hamburger boxed lunches. achieving the fi nest quality. We have also developed original with electronic money sake-friendly snacks, and our delicious Snack Laboratory and Introducing WAON at all store locations Maestro Master series. MINISTOP now offers ÆON’s electronic money WAON service at all locations. With WAON, payment is easy with just a single touch, offering a heightened shopping experience to customers. Additionally, we believe Exchange to that our point system, which awards shoppers based electronic money Saved point on their purchase amount, will attract customers to MINISTOP.

Credit Card

We are ÆON Benefits include a 5% discount on purchases made on Saturdays in MINISTOP stores in Japan (by December 27, 2008). Aside from the ÆON Card, customers can also use First in the industry! Presenting fair trade products. VISA, JCB and MasterCard for their purchases at stores. In 2008 ÆON released a new JMB card with WAON and JAL Fair trade means providing fair prices to those who provide our raw ingredients, eliminating child labor, mileage bank functions. ◎ÆON cards are issued by the ÆON Credit Service Co., Ltd. and conducting fair interactions at all levels of production. We released the world’s first fair trade *As of the end of May 2008 canned coffee in October 2006, and now in 2008 we are proud to introduce a fair trade orange juice line, already popular in our stores. These two new TOPVALU products have received international fair trade certification.

6 7 Store Backup through Information and Logistics Systems

With advanced systems designed to meet the needs of customers, we are able to efficiently and effectively fill orders, handle shipping and make purchases.

Customers in which sex and age group purchased what kinds of products and services, when, and in what quantities—MINISTOP utilizes a POS system based on cutting-edge Information Technology (IT) to grasp and analyze valuable data that will shape our future product lineup and marketing strategy. We have also simplified the processes involved in receiving, ordering and returning goods at the store, helping to achieve higher efficiency. Furthermore, instead of limiting information to a single store, we can enhance the competitive strength of stores by referring to local sale trends and the best practices of other MINISTOP stores.

Telecommunication and Logistics Network

Communication Shipping MINISTOP stores

Machines used in stores with explanatory comments

a a Graphic terminal (GT) c Delivery of Delivery of Orders can be made while attending to the sales floor. Sales trends, including the goods goods identification of fastest moving items and sales records, can be recognized at a glance.

b Handy terminal (Receiving inspection terminal) A compact, lightweight and easy-to-use terminal. Delivered goods as well as those to Ambient temperature center Temperature-controlled center be returned can be quickly confirmed. 3–6 times weekly 3 times daily POS register ¡Alcohol and soft drinks Delivery of c ¡Confectionary goods ¡Lunch boxes and rice balls Checkout for various goods or services can be performed effectively using a bar code ¡Chilled beverages ¡Processed foods and non-food b scanner or a touch-panel; customers are served quickly with little or no waiting time. d items ¡Desserts, Prepared dishes d Store controllers Direct delivery service A computer system responsible for centralized control of peripheral equipment such 1–2 times daily as graphic terminals, receiving inspection terminals and POS registers. It covers a Information ¡Certain Order broad range of store operations from product ordering, delivery confirmation and transmission ¡Ice cream ¡Frozen foods ¡ and magazines marketing analysis to retail price change processes and salary calculations. The Shipment Shipment system is highly functional but simple to use, enabling easy operability for anyone. of orders of orders

Synergy We are enhancing our synergy with ÆON Group companies.

MINISTOP, by cooperating with business partners in the of ÆON companies, is Supplies Supplies enhancing Group synergy. Lunch boxes and sandwiches developed by MINISTOP are sold at retail stores in the ÆON Group. We are working jointly with ÆON to procure raw ingredients and prepare certain salads and prepared dishes. In addition, original instant noodles and chilled beverages are offered for sale at ÆON- affiliated stores. Even disposable chopsticks offered to customers are jointly procured with ÆON, with whom we share manufacturing facilities and processes to reduce costs. We also contribute to the development of the ÆON private brand TOPVALU, expanding the product items we offer, which has helped us create a product lineup supported by Headquarters customers.

8 9 Environmental Protection and Social Activities We are involved in various socially and environmentally conscious activities in the local community

Through numerous efforts rooted in local communities and various environmentally conscious activities, ◎ For details, please refer to “MINISTOP CSR report 2008” and the URL below. MINISTOP aspires to create stores that can be trusted by their customers and neighborhoods. http://www.ministop.co.jp/eco_social/index.html

Enviromental Report Social Report A Completed Food Circle Active Involvement in Food Safety

MINISTOP is expanding its program to recycle leftover food products by turning them into reusable MINISTOP considers food safety an important part of its CSR, and is actively involved in maintaining raw ingredients. Up to this point, collected leftover products were processed into formula feed, which product quality, from the procurement of raw ingredients to in-store hygiene standards. We have notably was provided to hog farmers. However in April 2008, we completed the circle by offering new pork expanded our in-store checklist management of food and product expiration dates from fast food to all products originating from pigs raised on this feed; our waste has been “reborn” into new merchandise. general products. We make continuous efforts to provide our customers with complete peace of mind.

To provide customers with safe products, rice As incidents of food we conduct factory hygiene inspections twice a year through balls and lunches that pass their sell-by date are Food Recycle Loop deception shock the a third party institution. disposed of as leftover food. MINISTOP treats public, and food safety Last but not least, we pay great attention to hygiene these products as “reusable resources,” and and security rise as management in our stores, where we come face-to- since 1998 has undergone various composting a common concern, face with our customers. In addition to product expiration

experiments. Currently we provide these Food resources as waste products of Daily collections with special refrigerated MINISTOP has taken management, we conduct kitchen hygiene inspections more resources for the production of hog feed mainly individual stores trucks to preserve freshness a tough stance on than twice a year, and strictly check the cleanliness and in the Kanto Region. ensuring quality hygiene of cooking utensils and other equipment with an all- This complete recycle loop begins with the standards at every level; inclusive and objective 4-category monitoring approach. It is everyday collection of leftover food products from selecting safe our goal to maintain the valued trust of MINISTOP customers

from each store, followed by transportation Petit Minced Pork-Cutlet raw ingredients and production plants to enforcing hygiene that we have earned over the years. We promise to continue Nori Boxed Lunch via refrigerated trucks (to preserve freshness) regulations in both production and store locations. providing safe and secure products. After meat processing, production Providing formula feed to hog Safe production of formula feed at to recycling plants in Chiba and Kanagawa and sale of boxed lunches farmers regeneration/recycling facilities Our treatment of raw ingredients not only meets all food Prefectures, where the leftovers are turned into health laws and other applicable laws, but we implement an safe formula feed for pigs. The pigs raised on this feed in From a person in charge array of additional inspections and tests based on company From a person in charge hog farms in Chiba are then used for our Petit Minced Pork- Hideaki Noguchi Environment Promotion, CA promotion Dept., Managing and Planning Div. standards. Shigeru Masuda Assistant Manager, Quality Control Sec., Merchandising Div. Cutlet Nori Boxed Lunch. This complete recycling loop has been a hit with affiliated plants and When choosing our production partners, we conduct prior While of course it is our job to maintain quality standards and gain the We have expanded this food recycling program to 260 farmers that we work with. When we first tried to turn leftovers into tests based on company standards, and also conduct fi eld trust of our customers with consistently safe products, it is important stores (as of February 2008) in the Kanto region, and plan to hog feed, there were problems with the pigs not eating it, etc., but research to track the route of raw ingredients. Additionally, to create a system where those standards can be thoroughly and with refined experience and knowledge, we have finally established a continually met. All departments work together to create a MINISTOP continue expansion to Aichi Prefecture and beyond. system. We would like to further expand this program. that our customers can trust.

Communicating Japan’s forest Our commitment to 17 years of Circle of Flowers Celebrating the 200th cleanup of Building strongholds for safe community 375 elementary and junior high problems with chopsticks preventing global warming MINISTOP cooperates with a program hosted Ueno Park living: the “Safety Station” activity school students got educational work Through the proactive use of MINISTOP’s main source of greenhouse gas by the Foundation for Flowering and Greening. MINISTOP MINISTOP is involved with the “Safety Station” experience domestic lumber, MINISTOP emission is electricity. In efforts to decrease The program’s goals are to encourage children employees and activity together with Japan Franchise The “MINISTOP Child Internship Program,” has formed a cooperative with the amount of electricity used, we have to think about the importance of life through affiliates, along Association member convenience stores. which provides elementary and junior high the Forestry Agency in their implemented energy-saving equipment through planting flower and tree seedlings, and to with their In addition to strengthening safeguards against school students with educational work “Kizukai Undo” (Tree Awareness the “leading runner approach,” and have increase flowers and greenery in schoolyards and friends, crimes such as robbery and , we experience, accepted 375 students from 129 Movement) to support domestic actively introduced inverter and low-pressure and classrooms. In 2007—its 17th year— periodically report on disasters, schools in fiscal 2007. The program started in forestry, and is the first controllers. MINISTOP sent flower and tree seedlings to organize cleanup accidents and medical 2005 with the goal of instilling gratitude toward convenience store in Japan to 1,000 elementary schools with donations from events in Ueno emergencies, and workers in young people through hands-on offer the “Go yen no kizukai” (5 yen to care for What is leading runner approach? our customers and Park. October respond to the needs of work experience our trees) chopstick line from domestic lumber, The concept that product makers should treat the a percentage from 2008 will mark the 200th event. These cleanup women and children for in greeting, which are available in approximately 1,000 highest-performing energy conservation products as our soft serve ice events, which were initiated in 1992 and have shelter. These activities customer service, stores (as of February 2008). Additionally, with the minimum standard in developing new products. cream sales. continued to this day, are an expression of are important for safe cleaning, and the “Dokodemo my hashi” (portable chopstick) Through the implementation of these products, we gratitude returned to our customers. community living. stocking items. set, we are proud to contribute to a lifestyle that can expect great energy conservation results. 10 prevents global warming. 11 Process of Store Opening—Following up on new store openings

Trustworthy support enabling prospective owners Systems for focusing management resources to open a store with confidence. MINISTOP provides many systems to ensure that after opening, FC owners can feel secure and focus on managing their business. From accounting support services to mutual benefit provisions, we have a full array of structural support systems for MINISTOP provides every aspect of support, including the development of goods and services, management our franchisees. advice, sales promotion, introduction to capital funding, provision of an information system, accounting and Accounting support mutual benefit systems, while thoroughly surveying location conditions and catchment area. ●Bookkeeping and accounting ●Preparation of an income statement and a balance sheet ●Salary calculation for employees ●Payments for purchasing ●Inventory check every quarter Prior to entering into contracts, we make sure to take plenty of time to educate potential FC owners about A Mutual system the MINISTOP franchise system, such as providing on-site training in existing stores while interacting with MINISTOP will pay all condolence insurance fees in the case of death of FC owners or managers. (From September 2008) customers. Then, once the final decision is made, we conclude the franchise contract. Of course, we provide ●Condolence money system for FC owners ●Condolence money system for managers ●Accident survivor insurance system ●Medical insurance system ●Income guarantee system ●Pension program ●Injury insurance system ●Comprehensive life medical insurance system ample training to fully prepare FC owners prior to the store opening. ●Cancer insurance system ●Care pension insurance system ●Comprehensive life insurance

カウンターサービスProcess of Store Opening

1 Inquiries 2 Guidance for management 3 Discussion meeting 4 Primary interview 5 (FC reservation contract system)6 Property recommendations 7 Secondary interview 8 On-site training

To request informational We will provide an outline In responding to inquiries We will seek confirmation This is a system that Taking into consideration An interview will be Prospective owners will gain materials or to make of the MINISTOP franchise from interested parties, on any problems or provides preferential your own ideas, we propose conducted with the first-hand experience at an appointment for an system and the MINISTOP we also make certain questions that may have introduction to available a possible store plan based individual in charge of an actual MINISTOP store explanatory meeting, we store. inquiries regarding preferred arisen in the course of properties. on our detailed examination franchising and a final before signing the contract accept inquiries through our locations, family situation the discussion meeting of the location conditions confirmation will be sought. (one day). website or via our toll-free (such as helpers), and (including re-confirmation of and other factors. telephone line. personal preparations owners’ wish to open a FC (including financial plans). store).

Following up education after store opening

9 Explanation of the contract 10 Conclusion of the franchise contract11 Owner training 12 Preparation for opening 13 Z Strategy 14 Opening 15 Follow-up Seminar (1 day) The enrollment period is between 3 to 6 months after store opening. An exchange of information with other FC owners will be held, and management strategy will be reviewed.

16 The Year after Seminar (2 days) We provide explanations Prospective owners will sign Owners must participate Job interviews and staff Visit customers in the The successful completion The enrollment period is between 12 to of our statutory disclosure and stamp the contract and in training. For details, hiring, staff training, neighborhood door-to-door, of all preparations: a fully 15 months after store opening. Looking documents, and we will pay the joining fee within please refer to explanations preparations for store prior to the store opening. prepared store, in which the back on the past year, participants will read through the contract the next three days. We provided in the Flow of opening (settings, setting owner confidently greets discuss the issues that lie ahead and together with prospective will follow this up with an Owner Training on page 17. working shifts and other), customers with a smile. reconsider goals. owners so they can fully explanation on preparations and registration with related understand the contract. to be made leading up to ministries. the store opening. 17 Contract Renewal Seminar (3 days) The enrollment period is 9 to 6 months prior to contract renewal. Participants ◎ We consider it a vital and important duty to precisely and succinctly explain the substantive contents of the franchise contract to will formulate a management vision potential franchisees. In order to develop personnel capable of understanding the needs of potential franchisees with the ideas for the seven-year term until the next and motivation required to engage in problem-solving, we have established certification system for the position of “FC Contract contract renewal. Officer.” For detailed information, please refer page 18. ◎ An eight-day cooling-off period is applied, including the date of the contract signing. 12 13 Franchise Contract

Post Store Opening Support Structure Choose from four different types of contracts to suit your specific plans and circumstances.

Communicating with FC Stores S -type SL -type CL -type ML -type Owner directly manages the store in Owner directly manages the store, Owner pays for the interior and exterior Owner manages the store, which is a building and property owned which is prepared by and rented from construction cost and manages the prepared by MINISTOP. or rented by the owner. MINISTOP. store prepared by MINISTOP. FC stores FC stores and the Store Advisors (SAs) together prepare precise plans for sales and merchandise layout. Specific requirements Specific requirements Specific requirements Specific requirements We collect information on fast-moving Owner intends to convert an Owner intends to manage the Owner intends to manage the Owner intends to manage the existing retail store to MINISTOP, MINISTOP store and can put up the MINISTOP store and can put up the MINISTOP store but cannot put up items and best practices. or to manage a MINISTOP store on required capital funding. costs of interior and exterior the required capital money. his/her own property. construction. Age requirements Age requirements Age requirements Age requirements There is no age limit for contractors. However, Over 20 years old two full-time store employees over 20 years old are required. This contract is limited to a married couple, ( or cohabitating parent/child or siblings. ) Ownership and responsibility Ownership and responsibility Ownership and responsibility Ownership and responsibility

Building Building Building Building sOwner (Security deposit paid) sOwner (Security deposit paid) sMINISTOP (Security deposit paid) sMINISTOP ¡Data analysis, sorting and distribution by staff in each division. Interior/exterior Building Building Building construction cost sOwner sOwner sMINISTOP sMINISTOP ¡Weekly operations meetings and regional operations meetings (Rent) (Rent) (Rent) Store Interior/exterior sOwner Interior/exterior sOwner Interior/exterior s We deliver the latest information. for sharing product information and best practices. equipment cost sMINISTOP construction cost construction cost construction cost MINISTOP Store s Store s Store s ¡Sharing feedback from customers. equipment cost MINISTOP equipment cost MINISTOP equipment cost MINISTOP Headquarters Reliable backup system ¡Obtaining latest information through hand-held data devices. Royalty Royalty Royalty Royalty 30% of gross profit on sales 30% of gross profit on sales Variable gross profit on sales (monthly basis)Va methodriable gross profit on sales (monthly basis) method We are building an organizational (monthly basis) (monthly basis) Portion of ¥3.6 million and less: 36% Portion of ¥3.6 million and less: 36% Business bases structure geared to local communities (for 24-hour operations) (for 24-hour operations) Portion of more than ¥3.6 million: 58% Portion of more than ¥3.6 million and ¥4.5: 70% million and less Portion of more than ¥4.5 million: 73% to reinforce localized strategies by Tokyo Business Dept. II Advantages of MINISTOP Franchise Package providing products and services that Tokyo Business Dept. I Tohoku Business Dept. The royalty in S-type and SL-type contracts is 30% (For 24-hour operations) of gross profit on sales, reflecting Aichi Business Dept. Ibaraki / Tochigi Business Dept. Advantageous royalty for the FC store are the best match for customer needs MINISTOP’s desire to motivate FC owners. Gifu / Mie Business Dept. Saitama / Gunma Business Dept. in each locality. Our 12 nationwide A short-term contract of just seven years provides flexibility for any potential change in circumstances after Kinki Business Dept. Chiba Business Dept. A short-term contract for seven years entering into the agreement. operational bases offer powerful Shikoku Business Dept. Kanagawa Business Dept. Encouragement of contract upgrades and Upgrades from ML to CL / SL and from CL to SL are possible. Shizuoka Business Dept. backup for FC owners. multiple store management Possibility of business expansion through operation of multiple stores.

◎Required joining fee will be ¥2,550,000 (¥1,500,000 for deposit and ¥1,050,000 for opening preparation expense), including tax. In addition to the above, you will be required to prepare an amount that covers living and transportation expenses for a two- to three-month period including System Support Specialist Advanced IT system for providing additional support for store operations pre-opening training and after the opening. Guarantee system Tatsuya Tsubota Accounting Sec., Systems Dept., Systems Div. FC gross income guarantee Supporting seamless communication with FC owners with the power of IT. We guarantee the amount of 21 million yen a year to the FC store as minimum FC gross income (for 24-hour operations). (The headquarters makes up the difference when the FC gross income does not reach the guaranteed amount in a given year.) In the Systems Department we help our stores run smoothly on a daily basis through system Net profit guarantee (Limited to the new store opening under ML-type and CL-type) building and support, and network operation. For example, is the store’s order data being sent For the month of opening and the following two months, the headquarters makes up the difference when FC’s net profit is less than ¥380,000 a month properly? Is the sent data reaching the vendors? Is acceptance data for scheduled shipments (calculated daily during the month of opening).

reaching the stores in time? We check all the steps before the goods are delivered to the store. While Monthly FC gross income guarantee (Limited to the new store opening under ML-type and CL-type) this seems like routine work, it is actually very important to prevent mistakes from occurring. For eight months after the month that the net profit guarantee expires, we guarantee the FC store a monthly gross income of ¥1,800,000 excluding One of the projects we are working on currently is electronic money. An important task for the disposal, the maximum amount of such disposal is ¥400,000. This will expire when gross profit on sales exceeds ¥3,400,000 for two successive months after the net income guarantee expires. system department, and for me, is how to get customers to use increasingly diversified services such as WAON and Suica in a manner that will improve store operating efficiency.

Store Advisor Aiming to create stores with FC owners that customers will love. Store Development SpecialistAiming to develop information transmission facilities to area stores and create communication nodes.

Reiko Ohto Saitama-West Area, Saitama / Gunma Business Dept. East Region Business Div. Koichi Harada Kanagawa Area, Kanagawa Business Dept.

A store advisor’s job is to, hand-in-hand with the FC owner, create a store that will be popular. Along It is rewarding to hear “we’re so glad we became MINISTOP franchisees” from FC owners and with understanding business conditions from financial statements, we communicate various ideas “the opening of MINISTOP has made life more convenient” from customers. The job of a Store for improvement regarding employees and the selling floor arrangement. While we always have the Development Specialist is to brainstorm with franchisee candidates to create new stores that same goals as the owners, which is to make a good store, there are times when we have different will meet the needs of neighborhood customers. While the convenience store business is a retail views about how to achieve them. endeavor, what customers really want these days from us is not just the offering of goods for sale, but for us to be a source of information for residents and a place where they can communicate. We set specific and concrete goals regarding the kind of store desired, and devote our complete resources to supporting FC owners in managing their stores in a manner that appeals to customers. 14 15 Introduction to the MINISTOP Education System

MINISTOP Education System Flow of Owner Training

MINISTOP headquarters takes full responsibility for startup training, follow-up and staff education. MINISTOP offers help in raising the level of FC owners through pre-opening training as well as various training and You may be a prospective owner attracted to the idea of managing MINISTOP, but unsure if you are up to it. Don’t worry! We educational opportunities after store opening. FC owners will learn about the entire operational process including checkout provide detailed educational programs that not only cover training for starting your franchise business but also extend to service, fast food processing, placing orders and staff training. follow-up training after you open your store. MINISTOP headquarters will also take the initiative in providing backup for staff education. In addition, we thoroughly educate our SAs and other MINISTOP employees who support FC owners, so that we Before contract signing can send personnel with excellent abilities and personal integrity to FC owners. ◎ On-site training (one day) Owner education We provide on-site training prior to signing the FC contract. Training takes place at the (Education for new and existing FC owners) Franchised Stores FC store staff education nearest directly-managed store and includes simple checkout service and fast food processing. This allows for a smooth transition to training provided after signing the ◎ Study seminars for FC owners (twice a year or more) ◎ Staff education system contract. ◎ Exhibition of merchandise & selling floor arrangement Introduction of Yellowtail Program ◎ Training for new FC owners (See page 19) ◎ Education for existing FC owners

Pre-opening period after contract signing (a month and a half) Headquarters

Employee education ◎ Operation Training Step 1: Training center seminars (fi ve days) ◎ MINISTOP step-up program ① MINISTOP’s basic corporate philosophy and the ÆON Code of Conduct ◎ Job-specific education (Store Adviser education, Development Specialist education, Merchandiser education) ② The Four Basic Principles ◎ FC contract officer certification program ◎ ÆON Business School ◎ ÆON management education program ③ The basics of service (checkout service and fast food processing) ◎ Supervisor education (management training, newly appointed manager training) ④ Cash register operation ◎ Postgraduate education program within Japan, ÆON code of conduct education, environmental education ⑤ The basics of operation (written and on-site exams) and personal information protection education

Step 2: 5-day training at directly-managed training stores and 1-day training at training center Owners will receive in-depth training on basic operations at an actual store. QSC Merchandise assortment ＋ ● Review of practical in-store training ● Developing staff into a workforce We emphasize service and cleanliness to maintain stores that are supported and chosen by customers. ● Learning the merchandise assortment Today, even convenience stores can no longer survive competition on product lineup alone. We must provide an even higher ● Understanding how to read an income statement, a balance sheet and a profi t sharing calculation quality of service and an environment in which customers can comfortably do their shopping and enjoy their food. Excellent quality and product lineup are a given. MINISTOP aspires to become the top operator by stressing service and Practice Training cleanliness. ◎ Step 3: Training at directly-managed store—Flagship Store (19 days including holiday) ① Receive in-depth training on kitchen sanitation and other late- operations ● Quality ② Receive practical education on all ordering operations The quality control focus is on controlling freshness, sanitation ③ Learn about the theory and practice of budget formulation and temperature. ④ Gain in-depth understanding of the store manager’s job ● Service by working as a temporary store manager Quality In order to maintain the top priority on customers, MINISTOP advocates three service principles: “Smile,” “Speed” and “Friendliness.” Accreditation of Completion: Last Friday of Step 3 Service Cleanliness Cleanliness ● ① Gain requisite knowledge about being a manager and merchant The cleanliness of stores is maintained at the same level as when ② Formulate and announce management vision and environmental targets they first opened, in order to make customers feel comfortable Merchandise ③ Learn about preparation and related issues for store opening assortment while shopping and to ensure the safety of merchandise. ● Merchandise assortment A variety of fresh merchandise is available at the time and in the quantity desired by customers.

16 17 カウンターサービスPost-opening education Staff Education

MINISTOP expects FC owners to continue striving to raise the quality of their stores and staff even after opening, and Create attractive stores and realize an environment in which owners can concentrate on provides various study opportunities for FC owners to ensure their stores will continue to be the customers’ choice. management by turning staff into an effective workforce. To raise the quality of communication with customers and service, it is essential to turn staff into a veritable workforce Follow-up Seminar (1 day) Enrollment period: 3 to 6 months after store opening through appropriate educational programs. This is also effective in relieving owners from daily business and allowing them to concentrate on management. MINISTOP does not leave this task to the owners. Our headquarters will offer original know- The purpose is to follow up with new FC owners. We look back on events after the opening of the how to support owners providing training and education for all staff including part-timers. FC store and ascertain the progress of the management vision. Through the exchange of information with other FC owners, the seminar leads to goal-setting going forward. The seminar consists of both lectures conducted by staff from headquarters and group work. Store Manager, Chief FC Staff Education Program Staff member who takes total —Yellowtail Program responsibility for store management MINISTOP follows an original educational program to enable all employees to remain highly The Year after Seminar (2 days) Enrollment period: 12 to 15 months after store opening Store Leader Staff member who takes on the responsibilities motivated in their work and steadily improve their Through media presentations on their store’s selling floor, FC owners engage in discussions with of the store manager or chief in their absence skills. We call it the Yellowtail Program. other FC owners. The purpose of this seminar is to look back on the first year of operations and The yellowtail is a type of fish commonly recognize the strengths and weaknesses of his/her own stores, to identify issues as well as solutions SS Staff associated with gradual success. We provide a going forward, and to re-set goals. The seminar consists of lectures on product development, Training period to become a staff member lectures on creating the ideal selling floor, group work on selling floor arrangement, and setting up with managing responsibilities system in which staff can advance their careers action plans. by learning the required skills in a step-by-step S Staff process and having their progress assessed. This Contract Renewal Seminar (3 days) Enrollment period: 9 to 6 months prior to contract renewal Staff member who has the responsibility of system nurtures even part- running operations smoothly The purpose of this seminar is to exchange opinions with other FC owners, and based on various time staff into an adequate types of information, look back on the previous seven years and establish a vision for store workforce with abilities and a management for the next seven years. The seminar consists of a coaching seminar to improve A Staff sense of management. in-store communication, analysis of problem areas based on the study of customer data and changes Staff member who is responsible for Training classes with the executing tasks assigned to them in the sales data from the previous seven year period, exchanging of opinions with other FC owners, support of headquarters are and presentation of management vision going forward. conducted in each locale for Exhibition of merchandise and selling floor arrangement: twice a year (spring & fall) B Staff staff above the level of S staff. Staff member who is responsible for This is an invaluable study opportunity in which not only FC owners themselves but all of their staff executing basic tasks assigned to them (They have completed five days of training) YP badge can also participate. These exhibitions offer information on major products for the spring-summer A gold or silver YP badge is and fall-winter seasons and on new products, know-how on display of merchandise for each season, conferred upon staff members methods of developing staff into a workforce, and the best practices collected from stores around the C Staff that complete each of the country. They provide a productive opportunity to receive guidance on on anticrime measures and Training period to become hygiene management methods and a thorough education on MINISTOP’s environmental initiatives. a B Staff member YP badge training classes, (They will attend five days of training) according to their titles. Progress

FC Store training FC owners come in all shades and colors, and we support them all cheerfully and unwaveringly. Training classes for S Staff

Akira Iwanami Manager, FC Store Training Dept., FC Support Div. S Staff members take charge of the store in the absence of owners or managers. S Staff The main goal of FC store training is to provide support to owners so that they can confidently members are required to have the communications ability and the self-initiative that is necessary open their stores and dedicate themselves to their businesses, both leading up to, and after, the to act in this capacity. MINISTOP holds S Staff training classes every month, and participants opening. Participants in the training program range from newcomers to the business to experienced who successfully complete all four of the training classes set forth below are conferred with a convenience store owners, and to effectively train, we must constantly challenge ourselves to learn certification of completion and an YP badge (silver badge). Furthermore, we have also developed and put ourselves in the owners’ shoes. Above all, we strive to communicate to FC owners that in a support system with SAs available on completion of these training classes. business, the customers’ needs take the highest priority. ● S Staff 1: Provides instructions on customer service through video recording The market size of the convenience store industry is over 7 trillion yen, and now the convenience and discussion (in-store) store is one of the major retail formats in Japan. The truth is, there is fierce competition among the upper-ranked chains. We provide ● S Staff 2: Engages in role-playing focused on training new staff and responding to specific claims support through training programs so that MINISTOP will become a franchise with a strong base that can stay in the competition. ● S Staff 3: Expiration date management and hygiene management guidance to ensure food safety, importance of fast food sales, and sales plan preparation ● S Staff 4: Prioritization of store tasks, selling floor maintenance, enhancement of understanding of product 18 display logic and techniques 19 Profile of ÆON Co., Ltd.

ÆON is a retail group comprising 169 companies in Japan and abroad, centered on operating holding company ÆON Co., Ltd. In 1989 we changed the Group name from the JUSCO Group Major Group Companies to ÆON Group, and on August 21, 2001, changed it further to ÆON. Under our long-term goal of establishing management standards that are global in both word and deed, we will endeavor to build a solid group management structure. While pursuing constant innovation towards that goal, we will also fi rmly uphold the unchanging ÆON principle of “placing the customer at the starting ÆON Hokkaido Co., Ltd. Registered on the OTC market in point to seek peace, respect human dignity and contribute to local communities.” Ever mindful of 1996. Simultaneously listed on TSE second section and Sapporo the “ÆON’s Corporate Commitment” that serves as a guideline for action towards the realization Securities Exchange in 1998 ÆON CREDIT SERVICE CFS TSURUHA HOLDINGS INC. The Maruetsu, Inc. (moved to TSE first section in Listed on Nagoya Stock Exchange Listed on TSE second section in 2000). General retailer based in CO., LTD. Registered on the OTC market in of our principle, we will continue to contribute in enriching the lives of our customers. MaxValu Chubu Co., Ltd. second section in 1988. Listed on 1977 (moved to first section in Hokkaido area. Listed on TSE second section in 1998 Listed on TSE second Belc CO., LTD. Listed on Nagoya Stock Exchange 1984). SM chain based in Kanto 1996 (moved to first section in TSE second section in 1996 section in 2001 (move to first Registered on the OTC market in second section in 1987. SM area. AEON Stores 1998). Financial services firm (moved to first section in 1997). section in 2002) .Converted to a 1994. SM chain based in chain based in Chubu area. (Hong Kong) Co., Ltd. with more than 1.29 million Japan’s leading regional chain stock corporation in November developing food and drug Saitama and Gunma pref. () members. 2005. A drugstore centered on Became an equity method MaxValu Nishinihon businesses in the Shizuoka and Hokkaido Prefecture. affiliate company of ÆON on May Co., Ltd. Listed on Hong Kong exchange in AEON CREDIT SERVICE Kanto area. ÆON Basic Principles 1994. A leading general retailer 2007 at the general meeting of Listed on Osaka Securities () CO., LTD. (China) in the Hong Kong district. shareholders. Exchange second section in Inageya Co., Ltd. Listed on Hong Kong exchange 1997. SM chain based in Listed on TSE second section in AEON Co. (M) Bhd. in 1995. Local subsidiary of A universal principle for an ever-changing ÆON Western Japan. 1978 (moved to first section in (Malaysia) AEON Credit Service. Kusuri no Aoki Co., Ltd. 1984). SM chain centered in the Listed on TSE second section in MaxValu Tohoku Co., Ltd. Listed on main board of Kuala WELCIA KANTO CO., LTD. Tama area of western Tokyo with AEON THANA SINSAP 2006. Lumpur exchange in 1996. A Established in the Kanto region in Under our principle of “placing the customer at the starting point in pursuing peace, respecting human Listed on TSE second section in the Kanto region as its base. () PLC. A drugstore chain based in four 2000. Leading SM chain based in leading general retailer in March 2006 as a result of the Listed on Thailand exchange in prefectures in the Hokuriku and Tohoku area. Malaysia. merger between Greencross-Core dignity and contributing to the community,” which has remained unchanged since the founding of our 2001. Local subsidiary of AEON Joetsu regions centered on SUNDAY CO., LTD. Co., Ltd. and Iino Co., Ltd. MaxValu Tokai Co., Ltd. ÆON Kyushu Co., Ltd. Credit Service. Listed on TSE second section. Ishikawa Pref. Group, we have consistently practiced “customer first.” Now, as we enter the new era of the 21st Registered on the OTC market in Registered on the OTC market in 1995. Home center chain in the Listed on TSE second section in KASUMI CO., LTD. 2000. Leading general retailer Tohoku region centered on 2004. SM chain based in Chubu Listed on TSE second section in century, and a time of significant changes for the Group, we have adopted the “ÆON’s Corporate based in Kyushu area. Aomori pref. and Western Kanto area centered 1982 (moved to first section in The Customer Commitment” as a guideline for actions to be taken to give solid shape to our unchanging principle. on Shizuoka pref. 1984). SM chain based in the MaxValu Hokkaido Northern Kanto area centered on Terashima Co., Ltd. Ibaraki pref. We will create a future of limitless promise—an —by transforming daily life through our open, Co., Ltd. Registered on the OTC market in dynamic approach. Based on our deep commitment to life and living, the enrichment of life and daily Registered on the OTC market in 1998. A drugstore in the Kanto 1995. Leading SM chain based in area centered on Ibaraki pref. Hokkaido area. lifestyles constitutes our most important mission. Together with our customers and together with the MINISTOP CO., LTD. ÆON CO., LTD. Listed on TSE second section in community, we will strive towards our goal of a future of limitless promise—the other meaning to the Listed simultaneously on Tokyo, Osaka, and Nagoya Exchange 1993 (moved to first section in Medical Ikko Co., Ltd. 1996). Convenience store chain second sections in 1974 (listing moved to first section of each Latin word “ÆON,” which signifies “eternity.” To become a true driving force for realizing this dream, combining CVS goods and fast- exchange in 1976). Listed on the JASDAQ market in food services. 2004. Pharmacy chain in the we will mobilize the capabilities of the entire Group in an all-out effort to pursue our principles and Chubu and Kinki areas centered on Mie pref. continue with our innovation.

TAKA:Q Co., Ltd. Registered on the OTC market in The Talbots, Inc. (USA) YAMAYA CORP. ÆON Fantasy Co., Ltd. ÆON DELIGHT CO., LTD. ÆON Mall Co., Ltd. Corporate Profile 1984. listed in TSE second section in 1986 (moved to first Listed on NYSE in 1993. Registered on the OTC market in Registered on the OTC market Listed on Osaka Securities Listed on TSE first section in (As of February 20, 2008) section in 1989), A specialty Exclusive fashion chain 1994. Listed on TSE second in 2002. Listed on TSE second Exchange second section in 2002. A specialized SC store chain with the planning and purveying total fashion concepts section in 2002 (moved to first section in 2003 (moved to first 1995. Listed on TSE second developer of multi-purpose retail sales of men's apparel as to U.S. women. section in 2004). A leading section in 2005). An in-door section in 1999 (moved to first commercial complexes. its primary business. store. amusement facilities operator section in 2000). An enterprise Name: ÆON Co., Ltd. No. of employees: 76,624 based within Shopping with national reach providing Centers. comprehensive maintenance Date established: September 1926 Company headquarters: 1-5-1 Nakase, Mihama-ku, Chiba City, Chiba 261-8515 BLUE GRASS Co., Ltd. services including facilities Registered on the OTC market TSURUYA SHOE STORE management, security and Capital: ¥198.7 billion Website address: http://www.aeon.info/ in 1995. A "young and casual" Co., Ltd. cleaning services. fashion and household goods Listed on Nagoya Stock Exchange No. of stores: 402 Scope of business: Total retail business chain catering primarily to in 2000. A national shoe store CERTO Corporation COX CO., LTD. teens. chain. Listed on the NASDAQ Registered on the OTC market in exchange in 2004. Provider of ZWEI CO., LTD. 1990. A casual fashion chain. back office support services. No. of Listed on the JASDAQ market in 2004. No. of ¡GMS: 606 ¡: 1,182 ¡Super Centers: 27 ¡Home Centers: 116 Match-making service that creates happy Group Data Companies: marriage opportunities. stores: ¡ ¡ ¡ 169 Convenience Stores: 3,082 Specialty Stores: 4,504 Food Services, Services: 1,757 ● General Merchandise Stores (GMS) * Maxvalu Hokkaido Co., Ltd. YAMAYA CORP. AEON BANK, LTD. ● Merchandise procurement and * ÆON CO., LTD. KOHYO Co., Ltd TSURUYA SHOE STORE Co., Ltd. A·C·S CREDIT MANAGEMENT CO., LTD. Food-processing operations * ÆON Hokkaido Corporation Maxvalu Kyushu Co., Ltd. COX CO., LTD. N·C·S KOSAN CO., LTD. AIC Inc. * AEON Stores (Hong Kong) Co., Ltd. AEON(Thailand)CO., LTD. BLUE GRASS Co., Ltd. AEON CREDIT CARD () CO., LTD. AEON GLOBAL SCM CO., LTD. Consolidated Financial Highlights * AEON Co. (M) Bhd. ● Drugstores Abilities Jusco Co., Ltd. AEON CREDIT GUARANTEE (CHINA) CO., LTD. AEON GLOBAL MERCHANDISING CO., LTD. * ÆON KYUSHU CO., LTD. * CFS Corporation ÆON FOREST CO., LTD. AEON CREDIT SERVICE (TAIWAN) CO., LTD. AEON TOPVALU CO., LTD. (As of February 20, 2008) ÆON SUPERCENTER CO., LTD * TSURUHA HOLDINGS INC. ÆON Bakery Systems Co., Ltd. AEON INFORMATION SERVICE Cordon Vert CO., LTD. AEON Marché Co., Ltd. * WELCIA KANTO CO., LTD. ORIGIN TOSHU CO., LTD. (SHENZHEN) CO., LTD. DELICA SYOKUHIN CO., LTD. MYCAL CORPORATION * Kusuri no Aoki Co., Ltd. Claire’s Nippon Co., Ltd. PT.AEON CREDIT SERVICE Food Supply Jusco Co., Ltd. Revenues Gross Profit Ordinary Income Total Assets RYUKYU JUSCO CO., LTD. * Kraft Holdings Inc. Talbots Japan Co., Ltd. ● Services Tasmania Feedlot Pty. Ltd. AEON (China) Co., Ltd. * Terashima Co., Ltd. NUSTEP CO., LTD. * ÆON DELIGHT CO., LTD. ● E-commerce businesses (Millions of yen) (Millions of yen)189,728 (Millions of yen)188,303 (Millions of yen) 3,591,406 Beijing AEON Co., Ltd. * Medical Ikkou Co., Ltd. PETCITY CO., LTD. * ÆON Fantasy Co., Ltd. AEON VISTY CO., LTD. 5,167,366 175,989 3,534,346 166,105 166,326 Guangdong JUSCO Teem Stores Co., Ltd. Welpark Co., Ltd. MYCAL CANTEVOLE Co., Ltd. * ZWEI CO., LTD. 4,824,775 156,040 156,099 Qingdao AEON Dongtai Co., Ltd. TAKIYA Co., Ltd. MIRAIYA SHOTEN CO., LTD. * CERTO Corporation •ÆON 1% Club 4,430,285 146,777 2,928,682 4,195,843 2,752,088 Shenzhen AEON Friendship Co., Ltd. ● Home centers Mega Sports Co., Ltd. ÆON CINEMAS CO., LTD. •ÆON Environment Foundation 132,212 131,354 2,609,271 Taiwan AEON Stores Co., Ltd. * SUNDAY CO., LTD. MEGA PETRO Co., Ltd. ÆON Demonstration Service Inc. •The Cultural Foundation of Okada 3,546,215 ● Supermarkets Joy Co., Ltd. LAURA ASHLEY JAPAN CO., LTD. ÆON BODY Co.,Ltd. * The Maruetsu, Inc. Homac Corp. ● SC development operations JUSVEL CO., LTD. *enterprises offering public stock * Inageya Co., Ltd. ● Convenience stores ÆON Mall Co., Ltd. Research Institute For Quality Living Co., Ltd. (As of April, 2008) * KASUMI CO., LTD. * MINISTOP CO., LTD. LOC DEVELOPMENT CO., LTD. Reform Studio Co., Ltd. * Maxvalu Chubu Co., Ltd. ● Department stores ● Financial services Warner Mycal Corporation * Maxvalu Nishinihon Co., Ltd. Bon Belta Co., Ltd. ÆON CREDIT SERVICE CO., LTD. ● Food services * Maxvalu Tohoku Co., Ltd. ● Specialty stores AEON CREDIT SERVICE (ASIA) CO., LTD. ÆON Eaheart Co., LTD. * Maxvalu Tokai Co., Ltd. The Talbots, Inc. AEON THANA SINSAP (THAILAND) PLC. * Belc CO., LTD. Taka:Q Co., Ltd. AEON CREDIT SERVICE (M) BERHAD ’03 ’04 ’05 ’06 ’07 ’03 ’04 ’05 ’06 ’07 ’03 ’04 ’05 ’06 ’07 ’03 ’04 ’05 ’06 ’07 20 21 Corporate Data

Corporate Profile Corporate Timeline Store Expansion (As of end of February, 2008) (As of end of February, 2008)

Name: MINISTOP Co., Ltd. May 1980 MINISTOP was established as a wholly-owned subsidiary of Jusco Co., Ltd. Initially capitalized at ¥30,000,000. Date established: May 21, 1980 Jul. 1980 MINISTOP Okurayama in Yokohama is the first store to open its doors. MINISTOP Co., Ltd. Capital: ¥7,491,533,000 Bar code order books and online ordering from mainframe computers was introduced from this very Republic of Korea・・・・・・993 No. of stores: 3,082 (including area FCs) first opening. No. of employees: 792 Apr. 1981 Held first public bidding for franchises in the Tokyo metropolitan area. Nov. 1982 Store development begins in the Tokai area. Company headquarters May 1985 Store network reached 100 stores. Number of Stores 1-1 Kanda-nishikicho, Chiyoda-ku, Tokyo 101-0054 Mar. 1986 Set up MINISTOP Maintenance Center. (excluding area FCs) Feb. 1987 Completed installation of first-generation POS system in all stores. Shifted over to EOB terminals and a (As of end of February, 2008) Main business office display screen-based order placement system. ■ Apr. 1988 Set up Network Service Inc., a wholly-owned subsidiary devoted to the task of strengthening the Company stores MINISTOP Co., Ltd. 1-5-1 Nakase, Mihama-ku, Chiba City, Chiba 261-8540 Company’s physical distribution business. ■ Franchisee Miyagi・・・・・・83 Feb. 1990 Started collection service for public utility fees. 1,728 1,689 Fukushima・・・・・・52 Offices Jun. 1990 Sealed convenience store business-related Technical License Agreement with Miwon Trading & Shipping 1,641 Co., Ltd. (currently MINISTOP Korea Co., Ltd.) of . 163 Ibaraki 85 Tokyo District Office 1,563 163 ・・・・・・

(First store opened in November.) 163 Kanda-bashi Yasuda Building, 1,505 Tochigi・・・・・・25 Dec. 1991 Set up the MINISTOP Green Environment Promotion Club. 153

1,565 Gunma 33 1-1 Kanda-nishikicho, Chiyoda-ku, Tokyo 101-0054 Jul. 1993 Listed on the second section of the Tokyo Stock Exchange. Increased capital to ¥4,157,533,000. ・・・・・・1,526 136 Saitama・・・・・・157 Tokai District Office Feb. 1994 Store network reached 500 stores. 1,478

5-10 Tsubaki-cho, Nakamura-ku, Nagoya City, Aichi 453-0015 Sep. 1994 Increased capital to ¥7,491,533,000. 1,410 Chiba・・・・・・175 Jun. 1995 Sealed MINISTOP area franchise agreement for the northern Tohoku district with Nakano Business Group Tohoku District Office 1,369 Robinsons Convenience Stores, Inc. Tokyo・・・・・・307 based in Hachinohe City, Aomori Prefecture. ・・・・・・194 Kanagawa 134 90-2 Higashinanabancho, Miyagino-ku, Sendai City, Miyagi Jan. 1996 Sealed MINISTOP area franchise agreement with Lumax Co., Ltd. of Nagasaki, Nagasaki Pref. ・・・・・・983-0854 Aug. 1996 Listing moved to the first section of the Tokyo Stock Exchange. Fukui・・・・・・11 Kinki District Office Mar. 1998 Installed dual soft serve ice cream server, paving way for sales of flavors other than vanilla. Gifu・・・・・・89 Azuchi-cho Building, 2nd floor Store network reached 1,000 stores. Shizuoka・・・・・・113 Mar. 2000 Established MMH-EC Service Inc. as joint venture with Mitsubishi Corp. and Hitachi Transport System Ltd. 3-4-10 Azuchi-cho, Chuo-ku, Osaka City, Osaka 541-0052 Aichi・・・・・・192 Sealed Country Franchise Agreement with Gokongwei Group of the Philippines. Mie・・・・・・81 Scope of business Jun. 2000 Marked 100th volunteer cleanup operation at Ueno Park in Tokyo. Jul. 2000 Opened online shopping site, “e-ministop.” Shiga・・・・・・4 Develops MINISTOP, convenience store of ÆON Group, which Mar. 2001 Improved vanilla flavored soft serve ice cream. Kyoto・・・・・・33 delivers health, peace of mind, and convenience to the daily life of Sep. 2001 Introduced the industry’s first real-time integrated transport and delivery control system. Osaka・・・・・・73 each customer. Dec. 2001 Revised package for master franchise contract. Hyogo・・・・・・32 Forms franchise contracts with business owners who desire May 2002 Decided to donate 1% of soft serve ice cream sales to Circle of Flowers program. Jun. 2002 Opened first on-campus store—Musashino University Store. Nara・・・・・・9 to manage MINISTOP stores, and provides with merchandise MS Kyushu Co., Ltd.N.B.G Nov. 2002 Opened Kagamiishi Parking Area Store, the first convenience store along the Tohoku Expressway. Kagawa・・・・・・30 Fukuoka・・・・・・101 MS Network Co., Ltd. information and management know-how. At MINISTOP stores, Mar. 2003 Merged MINISTOP Kinki Co., Ltd. Oita・・・・・・1 Aomori・・・・・・43 Tokushima・・・・・・8 provides services including retailing of products ranging from Jun. 2003 Turned Daesang Distribution & Services Co. Ltd. (currently MINISTOP Korea Co., Ltd.) of South Korea into Saga・・・・・・16 Iwate・・・・・・6 Ehime・・・・・・2 fast foods, perishables, processed foods, household goods, a consolidated subsidiary. magazines, and the collection of public utility fees. Jul. 2003 Held presentation of Belgian Chocolate soft serve ice cream at the Embassy of Belgium. ’03 ’04 ’05 ’06 ’07 Sep. 2003 Introduced Soft Serve Ice Cream Meister system. Website address: http://www.ministop.co.jp/ Feb. 2004 Store network reached 1,500 stores. Mar. 2004 Launched new CL-type FC package. Undertook MINI Day campaign in a realization of MINISTOP 21 proposal. Board of Directors Apr. 2004 Turned JR Shikoku MS Networks Co., Ltd. into a consolidated subsidiary. Jun. 2004 Participated in “CO2 Reduction—Chain of a Million People” campaign which was sponsored by Ministry of Non-consolidated Financial Highlights (As of end of May, 2008) the Environment. Aug. 2004 Absorbed Shikoku MS Networks Co., Ltd. Chairman Hiroshi Yokoo Cleaning activities at Ueno Onshi Park (Taito-ku, Tokyo) entered its 15th year. Dec. 2004 Began selling local specialty products at all stores in Chiba pref. Shareholders’ Shareholders’ Sales (Including FC stores) Ordinary Income Total Assets Equity Equity Ratio President and Representative Director Nobuyuki Abe Feb. 2005 Began accepting online applications for Child Internship Program—an educational working experience for elementary school and junior high school students. (Millions of yen) (Millions of yen) (Millions of yen) (Millions of yen) (%) Senior Managing Director Masayuki Inoue Mar. 2005 Donated a portion of sales from rice balls using Koshihikari rice produced by the Chuetsu region in 53,010 53,703 Niigata Prefecture. 282,240 52,183 Jun. 2005 Began handling Japan Post’s Yu-Pack. 268,189 Managing Director Shigeru Tanaka 260,193 88,180 48,635 252,708 85,161 Debuted in Tokushima Pref. Expanded nationwide into 1 metropolitan area, 2 urban prefectures and 245,730 84,111 84,155 45,540 Managing Director Akihiko Maeda 23 prefectures. 79,174 Aug. 2005 Entered into the “Agreement for people having difficulty returning to their homes during disasters” with 8,347 8,345 8,019 7,925 Director Hisashi Asano eight metropolitan, city and prefectural governments (Tokyo, Saitama, Chiba, Kanagawa, Yokohama, 7,782 Kawasaki, Chiba City, Saitama City). Director Akihiro Fujimoto Oct. 2005 Full-scale implementation of the “Safety Station” activity. Nov. 2005 15-year anniversary of the “Circle of Flowers Program.” Director Morihiko Konishi Dec. 2005 Released brews made from scratch, “Kubiki Muroka-namagenshu (Unfiltered Unblended Sake)” and 63.0 “Kubiki Junmai Ginjo Namagenshu (Junmai Ginjo Unblended Sake).” 61.4 62.0 63.1 Sep. 2006 Began the national expansion for “Go yen no kizukai,” disposable chopsticks made from domestic timber. Director Takatoshi Ito 51.6 Oct. 2006 Transition is made to sixth-generation staff uniforms, the first change in six years. Corporate Auditor Hukunobu Hirashima Nov. 2006 Began expanding of electronic money (selected regions). Dec. 2006 Received certification for Privacy Mark. Corporate Auditor Hiroyuki Hamasaki May. 2007 First store in Ehime Prefecture; raised store presence to 24 prefectures. Including area franchises, store count reaches 3000. Corporate Auditor Kazunori Umemoto Aug. 2007 Release of original “Kubiki” sake, with a portion of sales dedicated to victims of the Niigata Prefecture Chuetsu-oki Earthquake. Corporate Auditor Seiji Fujii Sep. 2007 Charity gift presented to Kashiwazaki City, Niigata, for victims of the Niigata Prefecture Chuetsu-oki Earthquake. ’03 ’04 ’05 ’06 ’07 ’03 ’04 ’05 ’06 ’07 ’03 ’04 ’05 ’06 ’07 ’03 ’04 ’05 ’06 ’07 Mar. 2008 Debut of ÆON’s electronic money “WAON” in all MINISTOP stores. Completion of food recycle system— release of lunch boxes using pork from pigs raised on store leftovers.

22 23 Messages from FC Owners

Mr. Koji Kimishima, Mrs. Mikiko Kimishima Ohtawara fujimi Store (Ohtawara City, Tochigi Pref.) Personal Information Protection Policy

Basic Policy Numerous Appeals of MINISTOP Management Under our principle of “placing the customer at the starting point in pursuing peace, respecting human dignity and contributing to the community,” we are aware of the importance of information capable of identifying individuals (hereafter “personal information”). Through secure management of personal information, the Company protects the rights and interests of individuals.

I was interested in running a convenience store, and chose to become a Measures for personal information protection MINISTOP franchisee because I was attracted by the possibilities of being able In order to fully carry out the basic policy for personal information protection, the company enforces the following measures: to prepare fast food in my own store in a real commercial kitchen. In operating 1. All executives and employees are required to comply with the laws and regulations concerning personal information. the store there were aspects that made me nervous, but the SAs gave me 2. Establish and enforce internal regulations and operational rules concerning personal information. appropriate advice and at times shared their “excitement and sympathy.” Now I 3. Implement security measures to prevent and correct the occurrence of problems relating to personal information such as unauthorized do not worry and dedicate myself to managing the business. access, loss, tampering, leakage and corruption. 4. Appoint a person responsible for personal information management to accept responsibility and authority in attending to practices and Day to day, our number one priority is customer service. In hopes of cultivating operations concerning personal information protection, and engage in the strict supervision of personal information. a deeper level of communication with customers, our store began to place 5. Appoint a person responsible for auditing personal information and have audits concerning personal information performed. samples of our fast food items in front of the register, so customers were free to try them. We started this with the hope that 6. Based on results of such audits, improve the internal regulations and operations of the Company on a continual basis. it would give customers an opportunity to interact with us, and fortunately many customers have reacted very positively. 7. Require cooperation regarding personal information protection from MINISTOP FC stores, each of the area FC companies, business Also, to raise our level of customer service, we need competent employees. With respect to employee education, we partners, and other associated entities. always try to communicate with them in the workplace. We also proactively take advantage of the “Yellowtail Program,” the 8. This policy will be maintained, by publication on the Company website and in the corporate profile, in a manner where it is always employee education program sponsored by the headquarters. available for review. Additionally, in July we also took part in the “Child Internship Program.” We Treatment of personal information had local junior high school students get hands-on experience at the cash 1. At the time of the collection of personal information, expressly state the purpose of the collection and clearly identify the contact person. register, cleaning up and making soft serve ice cream. We received letters of Collect personal information only within the scope to which it is necessary. appreciation from the students, and I am hoping that “more children become 2. Make use of the collected personal information within the scope of the purpose for which it was collected, with appropriate oversight. fans of MINISTOP.” 3. Where disclosure, modification, deletion or suspension of usage is sought, promptly respond to such requests within a reasonable There is a lot of appeal to operating a MINISTOP. In the future, we will timeframe and within the appropriate scope. continue to have a positive attitude and always aim to be the best, most Displaying items on the shelf is Communicating with customers beloved store in the neighborhood. part of employee education through food samples May 21, 2008 Nobuyuki Abe Mr. Zenichi Nagata, Mrs. Atsuko Nagata Okazaki Horacho Store (Okazaki City, Aichi Pref.) President and Representative, Director Mr. Yoshiki Nagata Okazaki Miaicho Store (Okazaki City, Aichi Pref.) Ministop Co., Ltd. With Family Effort, a Second Store in Only Two Years

Before becoming a MINISTOP franchisee, I ran a café-. MINISTOP offers fast food and there are also a lot of opportunities to communicate with customers. In the sense of making the most of my past experience, I thought if I was going to start a convenience store it should be a MINISTOP. Right about two years after opening, we upgraded our lease agreement from an ML to an SL type, and at the same time opened a second store. For the store manager of the second store in Okazaki Miaicho, I decided to leave the management up to my son with whom I worked together managing our first store over the past two years. We also hired two staff members with experience working at other stores who proved invaluable. Since opening the second store, I discuss everything from hot-selling items to staff supervision matters with my son in managing the business. I am pleased to say that since the opening, we have been able to steadily increase sales. Each and everyday I find the experience of managing a MINISTOP interesting. There is a sports park close to the Okazaki Horacho store. We have customers who drop by every year during the prefectural and national competitions held there. As a result, there is the special appeal of being able to have contact with customers from outside the prefecture. On the other hand, the Okazaki Miaicho store has a school in the vicinity, and in response to requests from local customers, we have taken steps to offer a better product lineup of school supplies. In the future, we will continue to make communication with customers our priority, and create a store that is patronized by everyone in the neighborhood. Father and son in the middle 24 of deciding product lineup