This exchange offer is made for the securities of a foreign company. The offer is subject to disclosure
requirements of a foreign country that are different from those of the United States. Financial statements
included in the document, if any, have been prepared in accordance with foreign accounting standards that
may not be comparable to the financial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the federal
securities laws, since the issuer is located in a foreign country, and some or all of its officers and directors
may be residents of a foreign country. You may not be able to sue a foreign company or its officers ordirectors in a foreign court for violations of the U.S. securities laws. It may be difficult to compel a foreigncompany and its affiliates to subject themselves to a U.S. court's judgment.
You should be aware that the issuer may purchase securities otherwise than under the exchange offer, suchas in open market or privately negotiated purchases.
This document has been translated from the Japanese-language original for reference purposes only. While
this English translation is believed to be generally accurate, it is subject to, and qualified by, in its entirety,
the Japanese-language original. Such Japanese-language original shall be the controlling document for all
purposes.

-1-

(Stock Exchange Code 3222)
May 8, 2024
(Date of commencement of measures for electronic provision: May 1, 2024)
To Shareholders with Voting Rights:
Motohiro Fujita
President and Representative Director
United Super Markets Holdings Inc.
1 Kanda Aioi-cho, Chiyoda-ku, TokyoNOTICE OF THE 9TH ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation to you for your continued support and patronage.
Please be informed that the 9th Annual General Meeting of Shareholders of United Super Markets Holdings
Inc. (the “Company”) will be held for the purposes as described below.
The Company has taken measures for electronic provision in convening this General Meeting of Shareholders
and posted matters subject to measures for electronic provision as the “NOTICE OF THE 9TH ANNUAL
GENERAL MEETING OF SHAREHOLDERS” on the following websites on the Internet.
[The Company’s website]
https://www.usmh.co.jp/ir/shareholders (Japanese only) Please access the above website and review the “NOTICE OF THE 9TH ANNUAL GENERALMEETING OF SHAREHOLDERS” in the “Notice of Annual General Meetings of Shareholders andRelated Materials” section.
[Tokyo Stock Exchange (TSE) website (Listed Company Search)]https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show Please access the website of the TSE above, perform a search by inputting the name or securities code of
the Company, and select “Basic information” and then “Documents for public inspection/PR information.”
If you are unable to attend the meeting in person, you can exercise your voting rights by mail (voting rights
exercise form) or via the Internet, etc. Please review the Reference Documents for the General Meeting of
Shareholders contained in the matters subject to measures for electronic provision and exercise your voting
rights in accordance with the guidance on pages 3 to 4 of the Japanese original by 6 p.m. Japan time on Thursday,
May 23, 2024.
1. Date and Time:

Friday, May 24, 2024 at 10:00 a.m. Japan time

2. Place:

Banquet Room “Hisho” (4th floor)
Asakusa View Hotel
3-17-1 Nishiasakusa, Taito-ku, Tokyo, Japan

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
9th Fiscal Year (March 1, 2023 - February 29, 2024) and results of audits by
the Accounting Auditor and the Audit & Supervisory Board of theConsolidated Financial Statements
2. Non-consolidated Financial Statements for the Company’s 9th Fiscal Year
(March 1, 2023 - February 29, 2024)

Proposals to be resolved:
Proposal 1:
Election of Six (6) Directors
Proposal 2:
Election of One (1) Corporate Auditor
Proposal 3:
Approval of Share Exchange Agreement Between the Company and Inageya-2-Co., Ltd.
■ Pursuant to the provisions of laws and regulations and Article 16, Paragraph 2 of the Articles of Incorporationof the Company, the following matters are not contained in the paper copy sent to shareholders who haverequested it. The Corporate Auditors and the Accounting Auditor audit the documents subject to audit,
including the following matters.
 “Part of Matters Concerning the Current Situations of the Group,” “Matters Concerning Shares of theCompany,” “Part of Matters Concerning Company Officers,” “Matters Concerning the Accounting
Auditor,” and “Systems and Policies of the Company” in the Business Report Consolidated Financial Statements
 Non-Consolidated Financial Statements Accounting Audit Report on the Consolidated Financial Statements Accounting Audit Report on the Non-Consolidated Financial Statements
 Audit Report of the Audit & Supervisory Board
 Contents of the non-consolidated financial statements, etc. for the most recent business year of InageyaCo., Ltd. in “Proposal 3: Approval of Share Exchange Agreement Between the Company and InageyaCo., Ltd.” in the Reference Documents for the General Meeting of Shareholders*If any revisions are made to the matters subject to measures for electronic provision, the revised content
will be posted on the websites listed on page 1.

◎ Video shooting and video/audio recording/keeping of the venue on the day of the meeting, as well as
posting them on social media, are strictly prohibited.
◎ The meeting will be live-streamed and questions from investors are accepted in advance. Shareholders
who desire to watch the livestream or send a question are asked to review pages 5 to 6 of the Japaneseoriginal of this NOTICE.
◎ Notice of Resolution of the Annual General Meeting of Shareholders will be posted on theabovementioned Company’s website in lieu of mailing the notice.

-3-

Requests for the exercise of voting rights
If you exercise your voting rights by mail

Please indicate your approval or disapproval for each proposed resolution on the enclosed voting right
exercise sheet and return the sheet to us. If approval or disapproval is not indicated on the sheet, it willbe treated as indicating your approval.



Please cut off the left part and return it to us.



Request for early mailing:
Many voting right exercise sheets arrive after the deadline for the exercise of voting rights. Please mailthe sheet early.



Deadline:
The sheet must arrive by 6:00 p.m. on Thursday, May 23, 2024.
If you exercise your voting rights via the Internet

Please access the below-listed voting right exercise website via your personal computer or
smartphone, follow the instructions on the screen, and register your approval or disapproval for each
proposed resolution by the deadline for the exercise of voting rights.



If voting rights are exercised two or more times via the Internet, the last indication of approval ordisapproval will be considered as effective.

Internet connection fees should be borne by the shareholder.



Voting right exercise website:
https://soukai.mizuho-tb.co.jp/
For details, please see the next page.

Deadline:
Voting rights must be exercised by 6:00 p.m. on Thursday, May 23, 2024.



If voting rights are exercised both in writing and via the Internet, the indication of approval ordisapproval via the Internet will be considered as effective.
Attendance at the General Meeting of Shareholders

Please bring the enclosed voting right exercise sheet with you and submit it to the reception at themeeting site.



The General Meeting of Shareholders will be held from 10:00 a.m. on Friday, May 24, 2024.



If voting rights are exercised both in writing and via the Internet, the indication of approval ordisapproval via the Internet will be considered as effective.

For institutional investors
In addition to exercising voting rights via the Internet, etc., if you apply in advance, you can use theelectronic voting right exercise platform operated by Investor Communications Japan, Inc. (ICJ), funded by
the Tokyo Stock Exchange and other organizations.

-4-Information on the exercise of voting rights via the Internet
If voting rights are exercised two or more times via the Internet, the last indication of approval or disapproval
will be considered as effective.
“Smart exercise” by reading the QR codeYou can log in to the voting right exercise website without entering the voting right exercise code or password.
1.

Please read the QR code printed on the lower right part of the voting right exercise sheet.
(The “QR code” is a registered trademark of Denso Wave Inc.)

2. Please enter your approval or disapproval according to instructions on the screen afterward.
“Smart exercise” allows you to exercise voting rights only once.
If you wish to change the voting rights exercised after exercising them, please access the voting right
exercise website by entering the voting right exercise code and password as instructed to the right andexercise your voting rights again.
*If you read the QR code again, you can move to the voting right exercise website.
How to enter the voting right exercise code and password1.

Please access the voting right exercise website.
https://soukai.mizuho-tb.co.jp/

2.

Please enter the voting right exercise code written on the voting right exercise sheet.

3.

Please enter the password written on the voting right exercise sheet. You need to change the password
at the first log-in.
Please enter the password and set a new password that you will use in the second blank.
Please click the “Register” （「登録」）button.

4.

Please enter your approval or disapproval according to the instructions on the screen afterward.
If you make mistakes a certain number of times or more when entering the password, the screen will belocked. If the screen is locked, please follow the instructions shown on the screen.
If you have any questions on how to vote via Internet, please call Stock Transfer Agency Department ofMizuho Trust & Banking Co., Ltd. at 0120-768-524 (between 9:00 – 21:00)-5-

Notice of live streaming and pre-submitted questions
1.

About live streaming
We will broadcast the General Meeting of Shareholders live over the Internet, allowing shareholders towatch from the comfort of their homes as detailed below. To view the live streaming, pre-registration isrequired. Please check the following details.
We will take privacy into consideration during the filming at the venue, but please beaware that shareholders may unavoidably appear in the video. Please understand this inadvance.
Dedicated website
URL: https://us06web.zoom.us/webinar/register/WN_UnekrpVoSpmFP0IBbV2ucA*We will send a confirmation email to shareholders who have registered.
After logging in to the dedicated website, please register the necessary information (shareholder number andemail address). We will send you the URL (streaming address) via email at a later date, so please prepare
accordingly.
Registration
periodFrom May 1, 2024 (Wed) at 10:00 AM to May 19, 2024 (Sun) at 6:00 PM

Viewing method On the day of the general meeting, you can watch via the dedicated website forshareholders.
*Note: The broadcast will be open about 15 minutes before the start, around 9:45 AM on
the day.
*After receiving the email, please test your viewing environment on the viewing website
in advance.
<Important notes regarding viewing the live streaming>(1) Due to unavoidable circumstances, it may not be possible to conduct the live streaming. In such cases,
we will notify you on our website (https://www.usmh.co.jp).
(2) Watching the live streaming does not constitute attendance at the General Meeting of Shareholders
under the Companies Act, and we will not be able to accept any statements, including exercising voting
rights or asking questions. Voting rights must be exercised in advance either in writing or via Internet.
(3) Viewing is limited to the shareholder themselves.
(4) It is strictly prohibited to film, record, save, or share the live streaming on social media or any otherplatforms.
(5) Please be aware that issues with the video or audio may occur depending on your computer environment(model, performance, etc.) or Internet connection (line condition, speed, etc.).
(6) Depending on your device or network environment, it may not be possible to view the live streaming, so
please use an alternative access method in such cases.
(7) Any costs associated with viewing (Internet connection fees, communication charges, etc.) will be borneby the shareholder.

2.

About receiving pre-submitted questions-6-

The general meeting will accept pre-submitted questions through the dedicated website. After logging into the dedicated website (shareholder number and email address), please make use of it. We plan to respondto the questions received on the day of the general meeting. Please note that the content of the questions
will be related to the agenda of the general meeting.
■Dedicated website
URL: https://usmh.iqform.jp/form/sokai_9/*We will send a confirmation email to shareholders who have registered.
Registration
periodHow to enterquestions

From May 1, 2024 (Wed) at 10:00 AM to May 19, 2024 (Sun) at 6:00 PM
You may submit one question per person, and only once.

Contact information for the dedicated website
United Super Markets Holdings Inc.
Human Resources and General Affairs, TEL 03-3526-4761
Reception hours: Weekdays from 10:00 AM to 6:00 PM (excluding Saturdays, Sundays, and public
holidays)
Location to enter the shareholder number

The shareholder number-7-

Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal 1:

Election of Six (6) Directors

The terms of office of all nine (9) Directors will expire at the conclusion of this year’s Annual General
Meeting of Shareholders. In order to strengthen the supervisory function of Directors and further clarify thebusiness execution structure of Executive Officers, the Company has decided to introduce an Executive Officer
System. Accordingly, the Company proposes that the number of Directors be reduced by three (3) and that six(6) Directors be elected, including three (3) Outside Directors. The three (3) Outside Directors satisfy therequirements for Independent Director prescribed by the Tokyo Stock Exchange and the Criteria for
Independence of Independent Outside Directors/Corporate Auditors specified by the Company as describedon page 11. The Company has determined the matters on page 11 as the policy for nomination of candidates
for Director and all the candidates for Director satisfy these requirements.
■List of candidates for Director
No.

Name

Position at the Company

Attendance at the Boardof Directors meeting

1Motohiro Fujita

Re-appointed

President and Representative
Director

100.0%(12/12)2

Masaharu Homma

Re-appointed

Vice President andRepresentative Director

100.0%(12/12)

3

Motoya Okada

Re-appointed

Director and Advisor

100.0%(12/12)

4

Shigekazu Torikai

Director

100.0%(12/12)

5

Naoko Makino

Director

100.0%(12/12)

6

Shinobu Okamoto

Corporate Auditor

100.0%(12/12)Re-appointed
Outside Director
Independent Director
Re-appointed
Outside Director
Independent Director
Newly appointed
Outside Director
Independent Director

-8-

No.

Name
(Date of birth)

Career summary, positions and assignment in the Company
and significant concurrent positions
March 1978
May 2000
May 2004
March 2005

1

Motohiro Fujita(July 11, 1955)
Re-appointed

Joined KASUMI CO., LTD.
Director, KASUMI CO., LTD.
Managing Director, KASUMI CO., LTD.
Senior Executive Officer; Manager, Business Services
Division; Manager, Compliance Control Office, KASUMI
CO., LTD.
May 2006
Manager, Development Division, KASUMI CO., LTD.
May 2007
Senior Managing Director, KASUMI CO., LTD.
February 2009Manager, Store Development and Service Division,
KASUMI CO., LTD.
September 2010 Manager, Sales Managing Division; Manager, Food
Market Managing Division, KASUMI CO., LTD.
September 2011 Manager, Sales Control Division; Manager, Food Market
Managing Division, KASUMI CO., LTD.
March 2012
President and Representative Director, KASUMI CO.,LTD.
March 2015
Executive Vice-President, the Company
March 2017
President and Representative Director, the Company (topresent)
Executive Officer responsible for the Supermarket
Business, AEON CO., LTD.
Director, KASUMI CO., LTD.
May 2017
Director, MAXVALU KANTO CO., LTD. (to present)
March 2019
Vice President and Representative Executive Officer
responsible for the Supermarket Business, AEON CO.,LTD.
March 2020
Vice President and Representative Executive Officer
responsible for the Supermarket Business andMerchandise/Logistics, AEON CO., LTD.
March 2021
Vice President and Representative Executive Officer
responsible for the Supermarket Business, AEON CO.,LTD.
March 2022
Executive Officer and Vice Chairman, AEON CO., LTD.
March 2024
Chairman and Director, KASUMI CO., LTD. (to present)[Reasons to be nominated as candidate for Director]
Mr. Motohiro Fujita is the President and Representative Director of theCompany and has abundant experience and an excellent track record as acorporate manager in the formulation of medium- and long-term strategies,
implementation of structural reforms, etc. The Company nominated him as a
candidate for Director based on the judgment that his experience and insightmake him a suitable person to serve as the Company’s Director.
[Special interests]
There are no special interests between Mr. Motohiro Fujita and the Company.

-9-

Number ofshares of theCompany held

142,900

No.

Name(Date of birth)

Career summary, positions and assignment in the Company
and significant concurrent positions
March 1992
March 2010

Joined The Maruetsu, Inc.
Manager, Corporate Planning Department, Corporate
Planning Division, The Maruetsu, Inc.
May 2013
Executive Officer; Manager, Corporate Planning
Department, Corporate Planning Division, The Maruetsu,
Inc.
May 2015
Director, MAXVALU KANTO CO., LTD.
March 2017
Executive Officer responsible for administration; General
Manager, Corporate Planning Division, The Maruetsu,
Inc.
March 2019
Executive Officer; General Manager, Corporate Planning
Division, The Maruetsu, Inc.
May 2019
Managing Executive Officer; General Manager, Corporate
Planning Division, The Maruetsu, Inc.
Masaharu Homma May 2020
Director and Managing Executive Officer, General
Manager, Corporate Planning Division, The Maruetsu,
2 (October 11, 1969)
Inc.
Re-appointed
May 2021
Director, the Company
March 2023
President and Representative Director, The Maruetsu, Inc.
(to present)
May 2023
Vice President and Representative Director, the Company(to present)[Reasons to be nominated as candidate for Director]
Mr. Masaharu Homma is the President and Representative Director of a
subsidiary of the Company and has experience and an excellent track record
as a corporate manager in finance, accounting, investment strategies, etc. The
Company nominated him as a candidate for Director based on the judgmentthat his experience and insight make him a suitable person to serve as theCompany’s Director.
[Special interests]
There are no special interests between Mr. Masaharu Homma and theCompany.
March 1979
Joined JUSCO Co., Ltd. (currently AEON CO., LTD.)May 1990
Director, JUSCO Co., Ltd.
February 1992
Managing Director, JUSCO Co., Ltd.
May 1995
Senior Managing Director, JUSCO Co., Ltd.
June 1997
President and Representative Director, JUSCO Co., Ltd.
May 2002
Director and Advisor, AEON Mall Co., Ltd. (to present)
May 2003
Director, President and Representative Executive Officer,
AEON CO., LTD.
May 2004
Director and Advisor, KASUMI CO., LTD.
November 2005 Outside Director and Advisor, TSURUHA HOLDINGSInc.
March 2012
Director, President and Representative Executive Officer,
and Group CEO, AEON CO., LTD.
August 2014
Outside Director, KUSURI NO AOKI HOLDINGS CO.,LTD. (to present)
Motoya Okada
(June
17,
1951)
November
2014
Director, WELCIA HOLDINGS CO., LTD. (to present)
3
March 2015
Director and Advisor, the Company (to present)
Re-appointed
March 2020
Director, Chairman and Representative Executive Officer,
AEON CO., LTD. (to present)[Reasons to be nominated as candidate for Director]
Mr. Motoya Okada is Director, Chairman and Representative Executive
Officer of AEON CO., LTD. and has abundant experience and an excellent
track record as a corporate manager who leads the AEON Group. The
Company nominated him as a candidate for Director based on the judgmentthat his experience and insight make him a suitable person to serve as theCompany’s Director.
[Special interests]
Mr. Motoya Okada is Director, Chairman and Representative Executive
Officer of AEON CO., LTD. Transactions between the AEON Group and theCompany’s subsidiaries The Maruetsu, Inc., KASUMI CO., LTD. and
MAXVALU KANTO CO., LTD. include procurement of merchandise, store
leasing, contracted credit operations, purchase of facilities, and member store
contracts.

- 10 -

Number ofshares of theCompany held

12,550

0

No.

Name
(Date of birth)

Career summary, positions and assignment in the Company
and significant concurrent positions
April 1975
April 1990
April 1994
March 2015
June 2017

4

5

Joined a tax accountant office
Registered as Attorney
Representative, Torikai Management and Law Office(currently Torikai Law Office) (to present)
Director, the Company (to present)
External Member of the Audit & Supervisory Board,
Kurita Water Industries Ltd.

Shigekazu Torikai
June 2018
Outside Director, RISO KAGAKU CORPORATION(March 12, 1947)
January 2023
Outside Director, Murakoshi Holdings (to present)[Reasons to be nominated as candidate for Outside Director and his[Outside Director] expected roles]
Mr. Shigekazu Torikai has abundant experience of corporate legal affairs as[Independent
an attorney-at-law and extensive knowledge of tax affairs and accounting.
Director]
The Company considers that he can fulfill his duties as Outside Director
appropriately and serve as Chairman of the Advisory Committee tosupervise management in a highly effective way from an independent andRe-appointed
objective standpoint by utilizing his experience and knowledge.
[Special interests]
There are no special interests between Mr. Shigekazu Torikai and theCompany.
[Years of service as Outside Director]
Mr. Shigekazu Torikai will have served as Outside Director for nine years
and two months at the conclusion of this General Meeting of Shareholders.
April 1990
Joined Asako Aramaki Office Co., Ltd.
January 1996
Freelance (Member of Association of Freelance Dieticiansin Nakano Ward)
March 2004
Representative Director, Studio Ku Ltd. (to present)
May 2007Council and Member of Editorial Committee, Japan
Society of Food Science Education
April 2013
Councilor, General Incorporated Association Japan
Society of Food Science Education; Member of Editorial
Committee, General Incorporated Association Japan
Society of Food Science Education
January 2016
Member of Planning Committee, General Incorporated
Association Japan Society of Food Science Education (topresent)
Naoko Makino
May 2016
Director, the Company (to present)(January 28, 1968)
January 2022
Councilor, General Incorporated Association Japan
Society of Food Science Education (to present); Member[Outside Director]of Award Nomination Committee, General Incorporated
Association Japan Society of Food Science Education[Independent[Reasons to be nominated as candidate for Outside Director and her
Director]
expected roles]
Ms. Naoko Makino started her career as a managerial dietician and currently
is a member of the Japan Society for the Study of Obesity and serves as aRe-appointed
lecturer for the lifelong education program of Kagawa Nutrition University
and as a lecturer of Kagawa Nutrition University. The Company considers
that she can leverage her abundant experience of food as a culinary expert
and extensive knowledge about nutrition and cookery for management of
the Company and also serve as a member of the Advisory Committee tosupervise management in a highly effective way from an independent andobjective standpoint.
[Special interests]
There are no special interests between Ms. Naoko Makino and theCompany.
[Years of service as Outside Director]
Ms. Naoko Makino will have served as Outside Director for eight years at
the conclusion of this General Meeting of Shareholders.

- 11 -

Number ofshares of theCompany held

0

0

No.

Name
(Date of birth)

Career summary, positions and assignment in the Company
and significant concurrent positions

Co-ordination Division, Management and Co-ordination
Department, Tokyo Regional Taxation Bureau
July 2005
Special Officer (Planning and Co-ordination), First
Taxation Department, Tokyo Regional Taxation Bureau
July 2006
District Director, Kawashima Tax Office (Tokushima
Prefecture), Takamatsu Regional Taxation Bureau
Chief Examiner, Third Taxation Department, Tokyo
July 2007
Regional Taxation Bureau
July 2008
Director, Planning Division, Management and Coordination Department, Tokyo Regional Taxation Bureau
July 2009
Director, First Personnel Division, Management and Coordination Department, Tokyo Regional Taxation Bureau
Chief Internal Inspector, Commissioner’s Secretariat,
July 2012
National Tax Agency
June 2013
Assistant Regional Commissioner (Management and Coordination), Nagoya Regional Taxation Bureau
July 2014
Regional Commissioner, Kumamoto Regional Taxation
Shinobu Okamoto
Bureau(June 18, 1954)
October 2015 Representative Partner, Shinobu Okamoto Certified Tax
Accountant Office (to present)[Outside Director] May 2016
Corporate Auditor, the Company (to present)
June
2019
Outside Audit & Supervisory Board Member,[Independent
YAMAICHI ELECTRONICS CO., LTD.
Director]
June 2022
Outside Director (Audit and Supervisory Committee
Member), YAMAICHI ELECTRONICS CO., LTD. (toNewly appointed
present)[Reasons to be nominated as candidate for Outside Director and his
expected roles]
Mr. Shinobu Okamoto has abundant experience of corporate accounting as
a tax accountant and extensive knowledge of tax affairs and accounting. He
has appropriately performed his duties as an Outside Corporate Auditor of
the Company from an independent and objective standpoint by utilizing his
abundant experience and knowledge. The Company considers that he canalso fulfill his duties as Outside Director appropriately and continue to serve
as a member of the Advisory Committee to supervise management in ahighly effective way from an independent and objective standpoint.
[Special interests]
There are no special interests between Mr. Shinobu Okamoto and theCompany.
[Years of service as Outside Corporate Auditor]
Mr. Shinobu Okamoto will have served as Outside Corporate Auditor foreight years at the conclusion of this General Meeting of Shareholders.
April 1977

6

Number ofshares of theCompany held

0

(Notes)1. The Company has entered into agreements with Mr. Shigekazu Torikai and Ms. Naoko Makino to limit
their liability pursuant to Article 423, Paragraph 1 of the Companies Act to the minimum amountstipulated in Article 425 of the said Act. Subject to approval of their reelection, the Company intends
to continue the said agreements with them. In addition, subject to approval of election of Mr. Shinobu
Okamoto, the Company intends to enter into a similar agreement with him.
2. The Company has entered into a directors and officers liability insurance contract with an insurancecompany, which covers any loss or damage that may arise due to the insured assuming responsibilities
for the execution of their duties or receiving a claim pertaining to the pursuit of such responsibilities.
All candidates for Director will be covered as the insured under the said insurance contract. The
Company plans to renew the said contract with the same contents the next time it expires.
3. Of the candidates for Director, Mr. Shigekazu Torikai, Ms. Naoko Makino, and Mr. Shinobu Okamoto
are candidates for Outside Director.
4. Mr. Shigekazu Torikai, Ms. Naoko Makino, and Mr. Shinobu Okamoto satisfy the requirements for- 12 -

Independent Director prescribed by the Tokyo Stock Exchange and the Company designated Mr.
Shigekazu Torikai, Ms. Naoko Makino, and Mr. Shinobu Okamoto as Independent Directors prescribedby the Tokyo Stock Exchange on which the Company’s shares are listed and submitted a notificationof the designation to the said Exchange. The Company considers that they satisfy the Criteria for
Independence of Independent Outside Directors/Corporate Auditors specified by the Company.
5. The number of shares of the Company held is the number of shares of the Company held as of February
29, 2024. It does not include the number of shares of the Company held through the Executives’
Shareholding Association.

- 13 -

Proposal 2:

Election of One (1) Corporate Auditor

The term of office of Corporate Auditor Mr. Shinobu Okamoto will expire at the conclusion of this year’s
Annual General Meeting of Shareholders, and Corporate Auditor Mr. Chiharu Takeshima will resign.
Accordingly, the election of one (1) Corporate Auditor is proposed.
If this proposal is approved, the number of Corporate Auditors of the Company will be reduced by one (1)to four (4), but considering the current status of the Company’s audit system, the Company believes that it will
be able to continuously ensure the effectiveness of audits.
The Company has specified the following matters as a policy for nomination of candidates for Corporate
Auditor and the candidates for Corporate Auditor satisfy these requirements. The Audit & Supervisory Board
has previously given its approval to this proposal.
■Candidate for Corporate Auditor
Name

Satoshi Mitsui

Attendance at the Board of
Directors meeting

Attendance at Audit &Supervisory Board
meeting——

Newly appointed
Outside Corporate Auditor
Independent Corporate Auditor“Policy for Nomination of Candidates for Corporate Auditor”
Based on the management philosophy of the Company, the person shall audit execution of duties of
Directors and prevent violation of laws and regulations or the Articles of Incorporation and also be capable ofcontributing to maintenance and improvement of sound management and social credibility of the Company.
The person shall be capable of contributing to securing soundness of management by auditing execution ofduties of Directors audits from a neutral and objective perspective.

- 14 -

Name(Date of birth)

Career summary, positions in the Company
and significant concurrent positions
December 2004
July 2007
November 2010
January 2014

Joined ChuoAoyama Audit Corporation
Joined Ernst & Young ShinNihon
Joined Hongo Tsuji Tax & Consulting
Established Mitsui CPA and Tax Accountant Office(currently Mitsui CPA Office)Director (to present)
Satoshi Mitsui
January 2014
Established Gentle Partners Co., Ltd.
(January 31, 1977)
Representative Director (to present)
December 2017 Outside Corporate Auditor, NITCHO CORPORATION[Outside Corporate
September 2018 Established Futaba Tax Accountant Corporation,
Auditor]
Representative Partner (to present)
December
2018
Outside Director (Audit and Supervisory Committee[Independent
Member), NITCHO CORPORATION (to present)
Corporate Auditor][Reasons to be nominated as candidate for Outside Corporate Auditor]
Newly appointed Mr. Satoshi Mitsui has abundant experience of corporate accounting as a tax
accountant and deep insight cultivated through his experience as a corporate
manager. The Company considers that he can fulfill his duties as Outside
Corporate Auditor appropriately by utilizing his extensive knowledge of tax
affairs and accounting in management.
[Special interests]
There are no special interests between Mr. Satoshi Mitsui and the Company.

Number ofshares of theCompany held

0

(Notes)1. The candidate for Corporate Auditor Mr. Satoshi Mitsui is a candidate for Outside Corporate Auditor.
2. Mr. Satoshi Mitsui satisfies the requirements for Independent Auditor prescribed by the Tokyo Stock
Exchange and the Company designated Mr. Satoshi Mitsui as an Independent Auditor prescribed by the
Tokyo Stock Exchange on which the Company’s shares are listed and submitted a notification of thedesignation to the said Exchange. The Company considers that he satisfies the Criteria for Independenceof Independent Outside Directors/Corporate Auditors specified by the Company.
3. Subject to approval of election of Mr. Satoshi Mitsui, the Company intends to enter into an agreementwith him to limit his liability pursuant to Article 423, Paragraph 1 of the Companies Act to the minimum
amount stipulated in Article 425 of the said Act.
4. The Company has entered into a directors and officers liability insurance contract with an insurancecompany, which covers any loss or damage that may arise due to the insured assuming responsibilities
for the execution of their duties or receiving a claim pertaining to the pursuit of such responsibilities.
Corporate Auditor candidate Mr. Satoshi Mitsui will be covered as the insured under the said insurance
contract. The Company plans to renew the said contract with the same contents the next time it expires.
5. The number of shares of the Company held is the number of shares of the Company held as of February
29, 2024. It does not include the number of shares of the Company held through the Executives’
Shareholding Association.

- 15 -

<Reference>“Policy for Nomination of Candidates for Director”
In nominating candidates for Director, the Company sees whether the person is capable of contributing tofurther development of the entire group, based on the management philosophy of the Company. In addition,
the Company comprehensively takes into consideration whether the person is capable of precisely identifying
the issues of the divisions he or she is responsible for and solving the problems in cooperation with othermanagers and employees, has insights concerning compliance with laws and regulations and corporate ethics,
and has other necessary qualities. The table below shows Directors’ skills and expertise that are expected toenhance the effectiveness of the Board of Directors.
Financia/
Corporat HR
ConsumOrganiza l/Accou
Legal /
Business Global
e
nting
Name
Title
Governa Transfor Perspect er
Manage tional
Investm
Perspect
Develop ent
nce
mation
ive
ment
ive
ment
Strategy
Mo to h iro
F u j i t a●●

Masaharu D i r e c t o r
H o m m a Candidate●●

MotoyaO k a d a●

Shigekazu
To rik a i●

Director
N a o k o Candidate
M a k i n o (Outside/In
dependent)
ShinobuOkamotoTa k e s h i
N e m o t o C o rp o ra te
Tadayoshi A u d i t o r
Yo y o g io rp o ra te
Hirofumi CA
I s h i m o t o ( Ouudt siitdoe )r
C o rp o ra teuditorSatoshi A
Candidate
M i t s u i (Outside/In
dependent)

●
●
●
●

●

●
●

●

●

●

●
●
●

●

●

●

●

“Criteria for Independence of Independent Outside Directors/Corporate Auditors”
1. He/she does not currently serve as Director (excluding Outside Director), Corporate Auditor (excluding
Outside Corporate Auditor), Executive Officer, or employee of the Company or the Company’s
subsidiaries (hereinafter the “U.S.M.H Group”) and he/she has not served as Director (excluding Outside
Director), Corporate Auditor (excluding Outside Corporate Auditor), Executive Officer, or employee of the
U.S.M.H Group in the past.
2. He/she has not served as Director, Corporate Auditor, Executive Officer, or employee of the Company’s
parent company (*1) in any of the past five business years.
3. He/she has not served as Director, Corporate Auditor, Executive Officer, or employee of the Company’s
fellow subsidiaries (*2) in any of the past five business years.
4. He/she has not served as Director, Corporate Auditor, Executive Officer, or employee of any of theCompany’s major shareholders (*3) or of a company of which the U.S.M.H Group has been a major
shareholder in any of the past five business years.
5. He/she does not serve as Director, Corporate Auditor, Executive Officer, or employee of any of the major
suppliers/customers of the U.S.M.H Group (*4).
6. He/she does not serve as Director, Corporate Auditor, Executive Officer, or employee of any of thecorporations, organizations, etc. that are recipients of a large amount of donations from the U.S.M.H Group(*5).
- 16 -

7. He/she has not served as Representative Partner, Senior Partner, Partner, or employee of the accounting
auditor of the U.S.M.H Group in any of the past five business years.
8. He/she is not an attorney-at-law, certified public accountant, consultant or other professional who receivesa large amount of money (*6) or other property from the U.S.M.H Group other than remuneration for
Directors/Corporate Auditors.
9. He/she is not a spouse, a relative in the second degree of kinship, a relative residing together with theperson specified below, or he/she is not in the same household as the person specified below:(1) Director, Corporate Auditor, Executive Officer, or important employee of the U.S.M.H Group (*7)(2) Person who has served as Director, Corporate Auditor, Executive Officer, or important employee of the
U.S.M.H Group in any of the past five business years.
(3) Person who comes under the restrictions specified in the above Items 2.-8.
10. There is no doubt about his/her independence in fulfilling his/her duties as Independent
Director/Corporate Auditor.
(*1) The “parent company” means a company that has control over the organ (General Meeting of
Shareholders or the like) that decides the Company’s financial, sales or business policies.
(*2) “Fellow subsidiary” means a company that has the same parent company (including a person
controlling the Company’s management) as the Company.
(*3) “Major shareholder” means a company that own 10% or more of the total voting rights.
(*4) “Major supplier/customer” means a company whose transactions with the U.S.M.H Group (amount
paid or received) are equal to 2% or more of consolidated sales of the Company or of such company(including its parent company and significant subsidiaries) in the most recent business year and in anyof the preceding three business years.
(*5) “A large amount of donations” means donations exceeding ¥10 million per year on average in the past
three business years, or 2% of consolidated sales or total revenues of the donation recipient, whichever
the larger.
(*6) A large amount of money means an amount exceeding ¥10 million per year on average in the past threebusiness years in the case of an individual and, in the case of an organization, an amount exceeding ¥10
million per year on average for the past three business years or 2% of consolidated sales of theorganization, whichever the larger.
(*7) “Important employee” means an employee whose position is department manager or higher.
Proposal 3:
Approval of Share Exchange Agreement Between the Company and Inageya Co., Ltd.
The Company and Inageya Co., Ltd. (hereinafter “Inageya”) have decided to implement a share exchange(hereinafter the “Share Exchange”) in which the Company will become the wholly-owning parent company
in the share exchange and Inageya the wholly-owned subsidiary in the share exchange, based on resolutionsof the Boards of Directors of both companies on April 18, 2024. On the same date, a share exchange agreement(hereinafter the “Share Exchange Agreement”) was concluded between the two companies, and a businessintegration agreement (hereinafter the “Business Integration Agreement”) regarding the business integrationof Inageya by the Company was concluded between the Company, The Maruetsu, Inc. (hereinafter“Maruetsu”), KASUMI CO., LTD. (hereinafter “KASUMI”), MAXVALU KANTO CO., LTD. (hereinafter“MV KANTO”), Inageya and AEON CO., LTD. (hereinafter “AEON”).
Accordingly, the Company proposes approval of the Share Exchange Agreement.
The Share Exchange is scheduled to take effect on November 30, 2024, after obtaining approval of the
Share Exchange Agreement by resolution at this year’s Annual General Meeting of Shareholders and Inageya’s
annual general meeting of shareholders scheduled to be held on June 26, 2024.
The reasons for conducting the Share Exchange, the overview of the contents of the Share Exchange
Agreement, and other matters related to this proposal are as follows.
1. Reasons for Conducting the Share Exchange
The Company was established on March 2, 2015 through a joint share transfer between Maruetsu,
KASUMI and MV KANTO. The Company consists of 12 consolidated subsidiaries and 3 affiliatedcompanies (as of April 18, 2024), and its basic philosophy is to “offer customers healthy and valuablechoices in food, cultivate deep relationships to build prosperous local communities, and constantly pursue
innovation and move with the times.” Based on this basic philosophy, the Company welcomes theparticipation of like-minded supermarket (hereinafter “SM”) companies in the Tokyo metropolitan area,
and as the core of AEON’s Supermarket Business in Kanto, the Company aims to become the number one
SM company in the Tokyo metropolitan area by achieving net sales of ¥1 trillion and building a network of
1,000 stores.

- 17 -

Inageya was founded in 1900 in Tachikawa City, Tokyo, and operates supermarket and drugstore
businesses in the metropolitan area and three prefectures in Kanto (Tokyo and Kanagawa, Saitama, andChiba prefectures). Inageya strives for the realization of Sukoyakeku: “Contributing to the creation ofhealthy, fulfilling, and warm daily lives for customers and a healthier society,” and the implementation of
the Merchant’s Way: “A group of people who can feel the joy of customers as their own joy.” Moreover,Inageya aims to contribute to society as a “helpful business for local communities.”
AEON promotes management based on the foundational ideals of “pursuing peace, respecting humans,and contributing to local communities, always with customers as our starting point.” While competition
across business categories is expected to intensify due to changes in consumer lifestyles and purchasing
behavior, AEON is responding to increasingly diverse environmental changes and continuing to provide
customers with fulfilling lifestyles and convenience, aiming to become the company that contributes mostto local communities.
Recently, the food supermarket industry tapped strong demand for home-cooked meals due to the risein people who refrained from going out and started working from home during the COVID-19 pandemic,
and while the industry as a whole is performing well, for a time, it was significantly affected by “stay-athome demand.” However, with the normalization of economic and social activities, consumer behavior has
shifted from eating in to eating out. In addition, the business environment surrounding the industry is
becoming increasingly difficult, with operating costs increasing due to soaring raw material prices, rising
wages, and rising utility costs. Moreover, against the backdrop of the declining birthrate and aging
population, as well as changes in consumer lifestyles and purchasing behavior, the volume of food products
handled by other industries, such as e-commerce businesses and drug stores, is increasing, and competition
across business categories is intensifying. It is likely that the industry and businesses will undergo more
shakeouts.
Recognizing this environment, AEON, Inageya, and the Company have continuously shared informationand issue recognition, striving to realize the philosophies of each company and improve corporate value.
On April 25, 2023, the companies announced the “Announcement on the Conclusion of a Basic Agreement
between AEON CO., LTD., Inageya Co., Ltd., and United Super Market Holdings Inc. for Business
Integration to Realize the ‘Concept of SM with ¥1 Trillion in Sales in Kanto’” (hereinafter the “Press
Release dated April 25, 2023”). In this press release, it was announced that, in order to continue to speedily
respond to customer needs, coexist with local communities, and grow together in the Tokyo metropolitanarea, where competition is expected to intensify, AEON, Inageya, and the Company would further deepen
their relationship through strengthened capital ties and business integration, and make full use of the various
assets of the AEON Group, including digital assets, products, human resources, and payment infrastructure.
Moreover, AEON, Inageya, and the Company came to the conclusion that as a SM Group with ¥1 trillion
in sales, it would be best to evolve into a new business model that takes advantage of economies of scale.
After signing this agreement, Inageya and the Company agreed to secure sufficient time for discussions tomaximize synergies by November 2024. AEON and Inageya, who already had a partnership, further
strengthened their capital and business alliance and determined that they would be able to quickly createsynergies if Inageya leveraged the various assets of the AEON Group. AEON carried out a tender offer for
Inageya as stated in the “Notice Regarding Commencement of Tender Offer for Inageya Co., Ltd. (Securities
Code: 8182)” dated October 6, 2023. AEON came to hold 51.0% of Inageya’s shares, as stated in the “NoticeRegarding the Results of Tender Offer for Shares of Inageya Co., Ltd. and Changes in Subsidiaries” dated
November 30, 2023.
Inageya and the Company jointly established an Integration Preparation Committee on June 19, 2023,
and the Committee discussed and examined the realization and effects of synergies that were envisioned at
the time of the basic agreement’s conclusion. As a result of this consideration, it was determined that thesynergies described below would not only contribute to increasing corporate value, but also, in an
increasingly competitive environment, strengthen the dominance of the Company and Inageya, as the same
corporate entity, in the Tokyo metropolitan area, where stable demand is expected to continue in the future,
which would lead to the enjoyment of various economies of scale.
In response to a proposal from the Company, Inageya undertook concrete consideration of a transaction(hereinafter the “Transaction”), including the Share Exchange, by the Company to make Inageya into awholly-owned subsidiary. Inageya carefully considered the possible disadvantages of Inageya’s delisting,such as the impact on corporate creditworthiness and current shareholders, and came to the conclusion thateven after the Share Exchange, Inageya, as a major Group company of the Company, would be able tomaintain the same level of corporate creditworthiness as before. Moreover, Inageya believed that it would
be possible to provide value and benefits arising from the Share Exchange to Inageya’s shareholders throughthe delivery of the Company’s shares as consideration for the Share Exchange, and that carrying out the
Share Exchange would benefit not only the Company’ shareholders but also Inageya’s. In light of this,Inageya came to the conclusion that it would benefit from becoming a wholly-owned subsidiary of the- 18 -

Company. AEON also agreed with these opinions of the Company and Inageya and approved the Share
Exchange. Furthermore, as stated in the “Notice Regarding Welpark’s Becoming a Wholly-Owned
Subsidiary of WELCIA HOLDINGS CO., LTD., the Changes to a Subsidiary of Inageya Co., Ltd. (Share
Transfer), and the Receipt of Special Dividends from Said Subsidiary and Recording of Extraordinary Profit”
dated April 18, 2024, Inageya reached an agreement with WELCIA HOLDINGS CO., LTD. (hereinafter“WELCIA HD”), a subsidiary of AEON, to transfer the shares of Welpark, which operates a drugstore
business and was a subsidiary of Inageya before the execution of the Transaction, to WELCIA HD. The
Company and Inageya’s consideration of the Share Exchange was based on the assumption that the sharesof Welpark would be transferred to WELCIA HD.
As a result of the above, both companies decided to implement the Share Exchange by resolution of
their respective Boards of Directors on April 18, 2024. Specifically, both companies envision the following
synergies as measures to increase corporate value.
(i) Increased sales and gross profit by expanding the introduction of private brand products such as
TOPVALU(ii) Cost reduction through joint procurement of products (national brand products, regional products,
imported products)(iii) Promotion of initiatives to revitalize mutual food supermarkets and development of stores tailoredto local customer bases, etc.
(iv) Cost reduction through the organization and utilization of functions of distribution centers, process
centers, etc.
(v) Cost reduction through joint procurement of materials, fixtures, equipment, etc., and integration ofback office operations(vi) Initiatives for joint use of credit cards, electronic money, and point cards(vii) Initiatives in e-commerce, such as joint research and development of online businesses(viii)Utilization of AEON Group’s training system and personnel exchanges(ix) Provision of analysis services that combine member information and POS information(x) Cost reduction and DX promotion through system sharing- 19 -

2. Overview of the Contents of the Share Exchange Agreement
The contents of the Share Exchange Agreement are as follows.
Share Exchange Agreement (copy)
United Super Markets Holdings Inc. (hereinafter “U.S.M.H”) and Inageya Co., Ltd. (hereinafter “Inageya”)
will enter into a share exchange agreement (hereinafter the “Agreement”) as follows on April 18, 2024
(hereinafter the “Agreement Conclusion Date”).
Article 1 (The Share Exchange)
Pursuant to the provisions of the Agreement, U.S.M.H and Inageya shall conduct a share exchange (hereinafter
the “Share Exchange”) in which U.S.M.H will become the wholly-owning parent company in the shareexchange and Inageya will become the wholly-owned subsidiary in the share exchange. Through the Share
Exchange, U.S.M.H shall acquire all of Inageya’s outstanding shares.
Article 2 (Trade names and addresses of the wholly-owning parent company in the share exchange and thewholly-owned subsidiary in the share exchange)
The trade names and addresses of U.S.M.H and Inageya are as follows.
(1) U.S.M.H (the wholly-owning parent company in the share exchange)
Trade name: United Super Markets Holdings Inc.
Address: 1 Kanda Aioi-cho, Chiyoda-ku, Tokyo(2) Inageya (the wholly-owned subsidiary in the share exchange)
Trade name: Inageya Co., Ltd.
Address: 6-1-1 Sakae-cho, Tachikawa-shi, Tokyo
Article 3 (Matters regarding shares to be delivered at the time of the Share Exchange and their allotment)
1. At the time of the Share Exchange, immediately before the time when U.S.M.H acquires all of theoutstanding shares of Inageya through the Share Exchange (hereinafter the “Reference Time”), U.S.M.H
shall provide each shareholder listed or recorded in the shareholder register of Inageya (excluding
U.S.M.H; hereinafter the “Shareholders Eligible for Allotment”) with a number of shares of U.S.M.H
common stock equal to the total number of shares of Inageya common stock owned by each multipliedby 1.46 (hereinafter the “Exchange Share Ratio”).
2. Regarding the allotment of consideration in the preceding paragraph, U.S.M.H shall allot to each of the
Shareholders Eligible for Allotment the number of U.S.M.H common shares obtained by multiplying eachshare of Inageya common stock owned by each said shareholder by the Exchange Share Ratio.
3. If there is a fraction less than one share in the number of U.S.M.H common shares to be delivered to eachof the Shareholders Eligible for Allotment pursuant to the provisions of the preceding two paragraphs, it
shall be handled in accordance with the provisions of Article 234 of the Companies Act and other related
laws and regulations.
Article 4 (U.S.M.H’s amount of capital and reserves)
U.S.M.H’s amount of capital and reserves to be increased through the Share Exchange shall be the amountseparately determined by U.S.M.H in accordance with Article 39 of the Regulations on Corporate Accounting.
Article 5 (Effective date)
The date on which the Share Exchange shall become effective (hereinafter the “Effective Date”) shall be
November 30, 2024. However, if necessary due to the necessity of proceeding with the procedures for the
Share Exchange or for any other reason, U.S.M.H and Inageya may change this upon consultation andagreement.
Article 6 (Approval at the general meeting of shareholders)
1. By the day before the Effective Date, U.S.M.H shall seek approval at its general meeting of shareholders
for the matters necessary for the Agreement and the Share Exchange, and shall endeavor to the extent
reasonably practical to obtain such approval by resolution at said general meeting of shareholders.
2. By the day before the Effective Date, Inageya shall seek approval at its general meeting of shareholders
for the matters necessary for the Agreement and the Share Exchange, and shall endeavor to the extent
reasonably practical to obtain such approval by resolution at said general meeting of shareholders.
Article 7 (Cancellation of treasury shares)- 20 -

By resolution at a Board of Directors meeting held by the day before the Effective Date, Inageya shall, at theReference Time, cancel all treasury shares (including treasury shares acquired in response to a share purchaserequest from a dissenting shareholder as stipulated in Article 785, Paragraph 1 of the Companies Act, exercisedat the time of the Share Exchange) held at the Reference Time.
Article 8 (Operation of business, etc.)
From the Agreement Conclusion Date until the Effective Date, U.S.M.H and Inageya will each carry out theirown business operations and manage and operate their assets within the scope of normal business and withthe care of prudent managers, as well as have their respective subsidiaries carry out their own business
operations and manage and operate their assets with the care of prudent managers. Except with the prior writtenconsent of the other party, neither company shall commit itself or its subsidiaries to any act that could resultin a significant change in its financial status or that could have a material impact on the Share Exchange.
Article 9 (Changes to and termination of the Agreement)
If there are any significant changes in the financial status or management status of U.S.M.H or Inageya
between the Agreement Conclusion Date and the day before the Effective Date, or in the event of a situation
arising or showing signs of arising that will seriously impede the execution of the Share Exchange, making it
difficult to achieve the purpose of the Share Exchange, U.S.M.H and Inageya may, through consultation,change the contents of the Agreement including the terms and conditions of the Share Exchange, or terminate
the Agreement.
Article 10 (Validity of the Agreement)
The Agreement shall lose its validity if, by the day before the Effective Date, (i) approval by U.S.M.H andInageya’s general meetings of shareholders as specified in Article 6 cannot not obtained, if (ii) the necessary
approvals from relevant government agencies, etc. for the execution of the Share Exchange as stipulated bylaws and regulations cannot be obtained, or if (iii) the Agreement is terminated in accordance with thepreceding Article.
Article 11 (Governing law and jurisdiction)
The Agreement shall be governed by and interpreted in accordance with Japanese law, and all disputes
regarding the performance or interpretation of the Agreement shall be under the exclusive jurisdiction of theTokyo District Court at the first instance.
Article 12 (Good faith consultation)
If any questions arise regarding matters not stipulated in or the interpretation of the Agreement, U.S.M.H andInageya shall consult in good faith and endeavor to resolve the issue.
As proof of completion of the Agreement, two copies of this document shall be prepared, and each party shallretain one copy with their names and seals affixed.
April 18, 2024
U.S.M.H: 1 Kanda Aioi-cho, Chiyoda-ku, Tokyo
United Super Markets Holdings Inc.
President and Representative Director: Motohiro Fujita
Inageya: 6-1-1 Sakae-cho, Tachikawa-shi, Tokyo
Inageya Co., Ltd.
Representative Director and President: Yoshikazu Motosugi- 21 -

3. Overview of the Content of Matters Listed in Article 193 (Excluding Items 5 and 6) of the Ordinance for
Enforcement of the Companies Act(1) Matters related to the appropriateness of the consideration for the exchange
1) Contents of allotment related to the Share Exchange
The Company
Inageya(wholly-owning parent company(wholly-owned subsidiary inin the stock exchange)
the stock exchange)
Allotment ratio related to the1
1.46
Share Exchange
Number of shares to be delivered
The Company’s common shares: 67,794,529 shares (scheduled)through the Share Exchange(Note 1) Share allotment ratio
1.46 shares of the Company’s stock will be allotted and delivered for each share of Inageya’s stock. However, noshares will be allotted through the Share Exchange for Inageya shares held by the Company at the Reference Time(defined below; the same applies hereinafter). The above allotment ratio for the Share Exchange (hereinafter the“Share Exchange Ratio”) may be changed upon consultation and agreement between both companies if there are
any significant changes in the terms and conditions on which the calculation are based. As of April 18, 2024, theCompany does not own any Inageya shares, but as of the end of March 2024, KASUMI, a subsidiary of theCompany, holds 96,000 Inageya shares. Regarding Inageya shares held by KASUMI at the Reference Time, theCompany shares will be allotted and delivered through the Share Exchange, but they are scheduled to be disposedof at an appropriate time in accordance with the provisions of Article 135, Paragraph 3 of the Companies Act.
(Note 2) Number of the Company shares to be delivered through the Share Exchange
At the time of the Share Exchange, the Company shall deliver to each Inageya shareholder immediately before
the time when the Company acquires all of the outstanding shares of Inageya through the Share Exchange(hereinafter the “Reference Time”) (however, this refers to a shareholder after the treasury shares below have beencanceled, and excludes the Company), in place of Inageya shares held by such shareholders, the number of theCompany shares obtained by multiplying the total number of Inageya shares each held by 1.46.
In addition, the shares to be delivered by the Company are scheduled to be allocated with newly issued shares.
Inageya intends to cancel all treasury shares held at the Reference Time (including treasury shares acquired by
Inageya through the purchase of shares related to the share purchase request of dissenting shareholders as
stipulated in Article 785, Paragraph 1 of the Companies Act, exercised in connection with the Share Exchange) at
the Reference Time through resolution at an Inageya Board of Directors’ meeting to be held by the day before theeffective date of the Share Exchange.
(Note 3) Handling of shares less than one unit
Inageya shareholders who will come to hold shares less than one unit (less than 100 shares) of the Company asa result of the Share Exchange may use the following system regarding the Company’s shares, as stipulated by
the Company’s Articles of Incorporation and Share Handling Regulations. Furthermore, it is not possible to sellshares less than one unit on the financial instruments trading market.
(i) Additional purchase system for shares less than one unit (additional purchase to reach 100 shares)
This is a system in which shareholders who hold shares of the Company that constitute less than one unit canpurchase additional shares from the Company to constitute one unit by combining with their shares less than
one unit, based on the provisions of Article 194, Paragraph 1 of the Companies Act and the provisions of theCompany’s Articles of Incorporation.
(ii) Purchase request system for shares less than one unit (sale of shares less than one unit)
This is a system in which shareholders who hold shares of the Company that constitute less than one unit canrequest that the Company purchase their shares less than one unit, based on the provisions of Article 192,
Paragraph 1 of the Companies Act.
(Note 4) Handling of fractions less than one share
In accordance with the provisions of Article 234 of the Companies Act and other related laws and regulations,for Inageya shareholders who will receive fractions of the Company shares less than one share as a result of the
Share Exchange, the Company will sell a number of the Company shares equivalent to the total number of such
fractions (if there is a fraction less than 1 in the total number, it will be rounded down), and the sale proceeds will
be distributed to such Inageya shareholders in proportion to the fractions thereof.

2) Basis, etc. for the contents of the allotment related to the Share Exchange(a) Basis and reasons for allotment contents
In order to ensure fairness and validity in determining the Share Exchange Ratio, the Company andInageya individually selected third-party calculation institutions and legal advisors that are independent
from the Company, Inageya, and AEON. The Company appointed Mizuho Securities Co., Ltd. (hereinafter“Mizuho Securities”) and Inageya selected Nomura Securities Co., Ltd. (hereinafter “Nomura Securities”)- 22 -

as third-party calculation institutions. The Company selected Yodoyabashi & Yamagami LPC and Inageya
selected Nagashima Ohno & Tsunematsu as legal advisors. With that, full-scale consideration began.
As stated in 3) “Measures to ensure fairness” and 4) “Measures to avoid conflicts of interest” below, theCompany carefully discussed and considered matters based on the share exchange ratio calculation reportobtained from the Company’s third-party calculation institution Mizuho Securities on April 17, 2024,
advice from the Company’s legal advisor Yodoyabashi & Yamagami LPC, and the results of due diligence
conducted by the Company on Inageya, as well as based on instructions and advice from a special
committee consisting only of independent members who have no interest with Inageya or AEON, and thecontents of the report received from said committee on April 18, 2024. As a result, it was concluded that
the Share Exchange Ratio was appropriate and would contribute to the interests of the Company’s
shareholders. Accordingly, the Company determined that it was appropriate to conduct the Share Exchange
based on the Share Exchange Ratio.
As stated in 3) “Measures to ensure fairness” and 4) “Measures to avoid conflicts of interest” below,
Inageya carefully discussed and considered matters based on the share exchange ratio calculation reportobtained from Inageya’s third-party calculation institution Nomura Securities on April 18, 2024, advice
from Inageya’s legal advisor Nagashima Ohno & Tsunematsu, and the results of due diligence conductedby the Inageya on the Company, as well as based on instructions and advice from a special committee
consisting only of independent members who have no interest with the Company or AEON, and thecontents of the report received from said committee on April 18, 2024. As a result, it was concluded that
the Share Exchange Ratio was appropriate and would contribute to the interests of Inageya’s shareholders.
Accordingly, Inageya determined that it was appropriate to conduct the Share Exchange based on the Share
Exchange Ratio.
As stated above, the Company and Inageya referenced the calculation results for the share exchange ratiothat both companies received from their respective third-party calculation institutions, carefully considered
the results of due diligence conducted on the other party, and, after comprehensively considering factors
such as the financial situations, asset situations, future outlooks, etc. of both companies, held numerous
negotiations and discussions. As a result, the Company and Inageya concluded that the Share Exchange
Ratio was appropriate and would contribute to the interests of their respective shareholders. Accordingly,
the Company and Inageya determined that it was appropriate to conduct the Share Exchange based on the
Share Exchange Ratio.
In accordance with the Share Exchange Agreement, the Share Exchange Ratio may be changed upon
consultation and agreement between both companies in the event that there are any significant changes inthe terms and conditions on which the calculation is based.
(b) Matters related to calculation(i) Names of calculation institutions and relationships with listed companies and partner companies
Both Mizuho Securities, the Company’s third-party calculation institution, and Nomura Securities,
Inageya’s third-party calculation institution, are calculation institutions independent from the Company,
Inageya, and AEON, and they are not related parties of the Company, Inageya, and AEON.
Mizuho Bank, Ltd. (hereinafter “Mizuho Bank”), a group company of Mizuho Securities, holds the
position of shareholder of Inageya and AEON, and Mizuho Trust & Banking Co., Ltd. (hereinafter “Mizuho
Trust & Banking”), also a group company of Mizuho Securities, holds the position of shareholder of theCompany and AEON. While Mizuho Bank has made financing transactions with the Company, Inageya
and AEON as part of normal banking transactions, the Bank has no material conflict of interest with theCompany, Inageya, or AEON regarding the Share Exchange. According to Mizuho Securities, theSecurities has established and implemented an appropriate conflict of interest management system,
including information barrier measures between Mizuho Securities, Mizuho Bank, and Mizuho Trust &Banking, in accordance with Article 36, Paragraph 2 of the Financial Instruments and Exchange Act (ActNo. 25 of 1948; including subsequent amendments) and Article 70-4 of the Cabinet Office Order on
Financial Instruments Business, etc., which are applicable laws and regulations. As a result of thesemeasures, Mizuho Securities’ department in charge of financial advisory services remains unaffected byany conflicts of interest regarding the Share Exchange, and calculates the stock value of both companies
from a standpoint independent from its status as Mizuho Bank and Mizuho Trust & Banking’s shareholder
as well as its status as Mizuho Bank’s lender. Considering that Mizuho Securities has established andimplemented an appropriate conflict of interest management system, that the Company and Mizuho
Securities conduct transactions on the same terms and conditions as general business partners, which
ensures Mizuho Securities’ independence as a third-party calculation institution, and that Mizuho Securities
has a track record as a third-party calculation institution for similar cases in the past, the Company
concluded that Mizuho Securities’ independence as a third-party calculation institution could be ensured,and therefore selected it as the third-party calculation institution.
- 23 -

(ii) Overview of calculation
For calculation, Mizuho Securities used the market price standard method (with April 25, 2023 as thecalculation reference date, the analysis was based on the simple average closing price for the past month
up to the same date on the Tokyo Stock Exchange Prime Market, the simple average closing price for the
past three months up to the same date, and the simple average closing price for the past six months up to
the same date) because the Company is listed on the Tokyo Stock Exchange Standard Market and Inageya
is listed on the Tokyo Stock Exchange Prime Market, and both companies have market stock prices.
Mizuho Securities also used the comparable multiple valuation method because there are multiple similar
listed companies that can be compared to both companies, and it is possible to infer stock value bycomparing similar companies, as well as the discounted cash flow method (hereinafter “DCF method”) toreflect the future business activities of both companies in the evaluation. Inageya’s evaluation range foreach evaluation method is as follows, assuming the stock value per share of the Company is 1.
Method used
Calculation range of share exchange ratio
Market price standard method
1.13 to 1.17
Comparable multiple valuation method
0.78 to 1.22
DCF method0.53 to 1.78
Under the market price standard method, the calculation reference date for both the Company and Inageya
was April 25, 2023, which is the publication date of the Press Release dated April 25, 2023, and the closing
price on the same date, as well as the simple average closing prices for the past one month up to the samedate, the past three months up to the same date, and the past six months up to the same date, were used.
The financial forecasts for the Company that Mizuho Securities used as a basis for calculation under the
DCF method included business years in which significant increases and decreases in profits are expected.
Specifically, mainly due to increased net sales at existing stores and the implementation of various SG&A
expenses reduction measures, significant year-on-year increases in operating income are expected for the
fiscal year ending February 28, 2025 and the fiscal year ending February 28, 2026. Moreover, significant
year-on-year increases in profit attributable to owners of parent are expected for the fiscal year ending
February 28, 2026 and the fiscal year ending February 28, 2027. Inageya’s financial forecasts also include
business years in which significant increases and decreases in profits are expected. Specifically, significant
year-on-year increases in operating income are expected for the fiscal year ended March 31, 2024 and thefiscal year ending March 31, 2025, mainly as a result of improvements in the gross profit margin at stores.
Profit attributable to owners of parent is expected to become profitable in the fiscal year ended March 31,
2024, as there was no impact from the reversal of deferred tax assets recorded in the fiscal year ended
March 31, 2023. In addition, due to the contribution of the increases in operating income mentioned above,significant year-on-year increases in earnings are expected for the fiscal year ending March 31, 2025. As
it is difficult to specifically estimate the impact the synergies that are expected to be realized through theexecution of the Share Exchange will have on revenues at this point, it is not reflected in the financial
forecasts of the two companies, which are the basis for calculation using the DCF method. Moreover, thefinancial forecasts of both companies do not assume the implementation of the Share Exchange.
When calculating the share exchange ratio, Mizuho Securities assumed that Inageya would receive
special dividends of ¥1,263 million from Welpark and that the shares of Welpark would be transferred to
WELCIA HD for ¥6,989 million before the effective date of the Share Exchange, as stated in the “NoticeRegarding Welpark’s Becoming a Wholly-Owned Subsidiary of WELCIA HOLDINGS CO., LTD., theChanges to a Subsidiary of Inageya Co., Ltd. (Share Transfer), and the Receipt of Special Dividends from
Said Subsidiary and Recording of Extraordinary Profit” announced by WELCIA HD, Inageya, and AEON
on April 18, 2024. In addition, as a general rule, Mizuho Securities used information provided by theCompany and Inageya as well as publicly available information, etc., as is, assuming that all such materials
and information were accurate and complete. Mizuho Securities did not independently verify their accuracy
and completeness. Moreover, Mizuho Securities did not conduct any independent evaluation or assessmentof the assets and liabilities (including off-balance sheet assets and liabilities, and other contingent
liabilities) of the Company, Inageya, or their affiliated companies, nor did they request that any third-party
organizations make an appraisal or assessment. Mizuho Securities relied on this information without
independently verifying the accuracy, validity and feasibility of the business plans of both companies.
Mizuho Securities’ calculation reflects the above information up to April 17, 2024.
Nomura Securities used the market price average method to calculate the share exchange ratio for thetwo companies because the Company is listed on the Tokyo Stock Exchange Standard Market and Inageya
is listed on the Tokyo Stock Exchange Prime Market, and they have market stock prices. Nomura Securities
also used the comparable multiple valuation method because there are multiple similar listed companies
that can be compared to both companies, and it is possible to infer stock value by comparing similar
companies, as well as the DCF method to reflect future business activities in the evaluation.
When calculating the share exchange ratio, Nomura Securities assumed that Inageya would receive- 24 -

special dividends of ¥1,263 million from Welpark and that the shares of Welpark would be transferred to
WELCIA HD for ¥6,989 million before the effective date of the Share Exchange, as stated in the “NoticeRegarding Welpark’s Becoming a Wholly-Owned Subsidiary of WELCIA HOLDINGS CO., LTD., theChanges to a Subsidiary of Inageya Co., Ltd. (Share Transfer), and the Receipt of Special Dividends from
Said Subsidiary and Recording of Extraordinary Profit” announced by WELCIA HD, Inageya, and AEON
on April 18, 2024.
Inageya’s evaluation range is as follows, assuming the stock value per share of the Company’ stock basedon each evaluation method is 1.
Calculation method
Calculation range of share exchange ratio
Market price average method
1.34 to 1.50
Comparable multiple valuation method
1.16 to 1.20
DCF method
0.96 to 1.68
Under the market price average method, for the Company, April 17, 2024 was the calculation referencedate, and the closing price of the Company’s shares on the Tokyo Stock Exchange Standard Market on thecalculation reference date, as well as the simple average closing prices for the most recent five businessdays, one month, three months, and six months up to the calculation reference date were used. For Inageya,
April 17, 2024 was the calculation reference date, and the closing price of Inageya’s shares on the Tokyo
Stock Exchange Prime Market on the calculation reference date, as well as the simple average closing
prices for the most recent five business days, one month, three months, and six months up to the calculationreference date were used.
Under the comparable multiple valuation method, for the Company and Inageya, JM-Holdings CO., LTD.,
Eco’s Co., Ltd., LIFE CORPORATION, YAOKO Co., Ltd., Mammy Mart Corporation, and Belc CO.,LTD. were selected as comparable listed companies judged to have businesses similar to the SM business,
which is the main business of both companies. After selecting these companies, calculations were
performed using a multiple (hereinafter the “EBITDA multiple”) of earnings before interest, taxes,
depreciation and amortization (hereinafter “EBITDA”).
Under the DCF method, for the Company, the Company’s stock value was evaluated by discounting thefree cash flows that are expected to be generated as of the fiscal year ending February 28, 2025 onwards
to their present value using a fixed discount rate, based on factors such as revenue and investment plans in
the Company’s business plan for the period from the fiscal year ending February 28, 2025 to the fiscal year
ending February 28, 2027, information disclosed to the public, and more. The Company’s discount rate
was 3.25% to 3.75%, and in calculating the terminal value, the perpetual growth rate method andcomparable multiple valuation method were used, with the perpetual growth rate being -0.25% to 0.25%,
and the EBITDA multiple being 5.0x to 7.0x. For Inageya, Inageya’s stock value was evaluated bydiscounting the free cash flows that are expected to be generated as of the fourth quarter of the fiscal year
ended March 31, 2024 onwards to their present value using a fixed discount rate, based on factors such as
revenue forecasts and investment plans in Inageya’s business plan for the period from the fiscal year ended
March 31, 2024 to the fiscal year ending March 31, 2027, information disclosed to the public, and more.
The discount rate was 3.25% to 4.25%, and in calculating the terminal value, the perpetual growth rate
method and comparable multiple valuation method were used, with the perpetual growth rate being -0.25%
to 0.25%, and the EBITDA multiple being 5.0x to 7.0x.
The financial forecasts for the Company and Inageya that Nomura Securities used for calculations under
the DCF method included business years in which significant increases and decreases in profits are
expected. Specifically, for the Company, operating income is expected to increase by over 30% year-onyear in the fiscal year ending February 28, 2025, and by over 30% year-on-year in the fiscal year ending
February 28, 2026, and profit attributable to owners of parent is expected to increase by over 70% yearon-year in the fiscal year ending February 28, 2027, mainly due to increased net sales at existing stores andthe implementation of various SG&A expenses reduction measures in the fiscal year ending February 28,
2025, the fiscal year ending February 28, 2026, and the fiscal year ending February 28, 2027. The
Company’s financial forecasts do not assume the implementation of the Share Exchange. For Inageya,
operating income is expected to increase by over 70% year-on-year in the fiscal year ended March 31, 2024,
and by over 30% year-on-year in the fiscal year ending March 31, 2026, due to an increase in net sales
caused by revitalization through the renovation of existing stores and the expansion of new store openings,
as well as improved profits due to the introduction and expansion of private brand products in the fiscal
year ended March 31, 2024, the fiscal year ending March 31, 2026, and the fiscal year ending March 31,
2027. Profit attributable to owners of parent is expected to increase by over 40% year-on-year in the fiscal
year ending March 31, 2027. Moreover, for the fiscal year ending March 31, 2025, profit attributable toowners of parent is expected to decrease by more than 60% year-on-year due to an increase in income taxes
and income taxes - deferred. Inageya’s financial forecasts do not assume the implementation of the Share
Exchange.
- 25 -

Nomura Securities’ calculation of the share exchange ratio was based on financial, economic, market,
business environment, and other conditions as of the calculation reference date, and relied on information
obtained by Nomura Securities as of said date. Nomura Securities assumed that all public informationconsidered by Nomura Securities as well as financial, legal, regulatory, tax, accounting, and otherinformation provided to Nomura Securities was accurate and complete, and therefore did not independently
verify accuracy and completeness. Moreover, Nomura Securities did not conduct any independent
evaluation, assessment, or appraisal of the assets and liabilities (including financial derivatives, off-balance
sheet assets and liabilities, and other contingent liabilities) of the two companies or their affiliatedcompanies, including analysis and evaluation of individual assets and liabilities, nor did Nomura Securities
request that any third-party organizations make an evaluation, assessment or appraisal. Based on theassumption that the financial forecasts and other forward-looking information of both companies had beenreasonably prepared and considered by the management teams of both companies based on the best
currently available and honest forecasts and judgments, as well as the assumption that the financial
conditions of both companies will change in accordance with those forecasts, Nomura Securities relied onsuch financial forecasts and other forward-looking information without conducting any independent
research.
3) Measures to ensure fairness
As AEON is the parent company of both the Company and Inageya, and because there is a structure inwhich conflicts of interest may arise with each other through AEON, the Company and Inageya havedetermined that it is necessary to ensure the fairness of the Share Exchange and have implemented thefollowing measures to ensure fairness.
(a) Obtaining calculation reports from independent third-party calculation institutions
In order to ensure fairness in calculating the share exchange ratio used in the Share Exchange, theCompany selected Mizuho Securities, a third-party calculation institution independent from the Company,
Inageya and AEON, and obtained a calculation report on the share exchange ratio on April 17, 2024, while
Inageya selected Nomura Securities, a third-party calculation institution independent from the Company,
Inageya and AEON, and obtained a calculation report on the share exchange ratio on April 18, 2024. For
an overview of each calculation report, please refer to (b) “Matters related to calculation” above. Neither
company obtained a written opinion (fairness opinion) from the third-party calculation institutions statingthat the share exchange ratio of the Share Exchange is fair from a financial standpoint for shareholders of
the Company and Inageya.
(b) Advice from independent law firms
The Company appointed Yodoyabashi & Yamagami LPC as its legal advisor for the Share Exchange andreceived advice from a legal perspective concerning the procedures for the Share Exchange and thedecision-making methods and processes of the Board of Directors. Yodoyabashi & Yamagami LPC has nomaterial interests in the Company, Inageya, or AEON. Inageya appointed Nagashima Ohno & Tsunematsu
as its legal advisor for the Share Exchange and received advice from a legal perspective concerning theprocedures for the Share Exchange and the decision-making methods and processes of the Board of
Directors. Nagashima Ohno & Tsunematsu has no material interests in the Company, Inageya, or AEON.
Yodoyabashi & Yamagami LPC has concluded legal advisory agreements with the Company and AEON,
respectively, but the firm is an external law firm that provides legal services to a large number of clients,
not just the two companies, and its independence from both companies is not compromised by the fact thatit has concluded legal advisory agreements with them. The firm can therefore provide legal advice
regarding the Share Exchange as a legal advisor independent from the Company, Inageya, and AEON.
Given this, the Company determined that there were no problems with the independence of this firm.
4) Measures to avoid conflicts of interest
Regarding the Share Exchange, AEON is the parent company of both the Company and Inageya, creatinga structure in which conflicts of interest may arise with each other through AEON. Therefore, the following
measures have been implemented to avoid conflicts of interest.
(a) Obtaining a report from a special committee that has no interests in the Company
For the purpose of exercising caution in making decisions regarding the Share Exchange, eliminating thepossibility of arbitrariness and conflicts of interest in the decision-making process of the Board of Directorsof the Company and ensuring its fairness, as well as confirming that the decision of the Board of Directorsof the Company to carry out the Share Exchange would not be disadvantageous to the Company’s minority
shareholders, the Company established a special committee (hereinafter the “Company’s Special
Committee”), consisting of three members, all of whom have no interests in Inageya or AEON. The
members are Mr. Shigekazu Torikai (Torikai Law Office) and Ms. Naoko Makino, who are Outside- 26 -

Directors of the Company and have been registered as Independent Directors with the Tokyo Stock
Exchange, as well as Mr. Shinobu Okamoto, who is an Outside Corporate Auditor of the Company and has
been registered as an Independent Auditor with the Tokyo Stock Exchange. In considering the Share
Exchange, the Company’s Special Committee was consulted on whether or not the Share Exchange could
be considered disadvantageous to the Company’s minority shareholders (hereinafter the “Company’s
Consultation Matters”).
The Company’s Special Committee held a total of eight meetings between January 31, 2024 and April
15, 2024, and even outside the meetings, expressed opinions and gathered information via e-mail, etc., inaddition to holding discussions as necessary to carefully consider the Company’s Consultation Matters.
Specifically, at the first meeting of the Company’s Special Committee, it was confirmed that there were no
problems with the independence and expertise of Mizuho Securities, the financial advisor and third-party
calculation institution appointed by the Company, and Yodoyabashi & Yamagami LPC, the legal advisor
appointed by the Company, and their appointment was approved.
In addition, the Committee received an explanation from the Company on the purpose of the Share
Exchange, the advantages and disadvantages of implementing the Share Exchange, the specific details of
the synergies expected to be realized through the Share Exchange, as well as an explanation on the
Company’s business plan formulation procedure and its outline, which form the basis for the shareexchange ratio, and then conducted a question-and-answer session. In addition, Yodoyabashi & Yamagami
LPC, the Company’s legal advisor, provided an explanation on measures to ensure fairness in the operationof the Company’s Special Committee and other procedural aspects related to the Share Exchange, including
the decision-making method and process of the Company’s Board of Directors regarding the Share
Exchange, as well as an explanation on measures to avoid conflicts of interest. Moreover, the Committee
received an explanation on the results of legal due diligence regarding Inageya, and conducted a questionand-answer session. Furthermore, based on the Company’s request, the Committee received an explanationon the results of financial and tax due diligence on Inageya from PwC Advisory LLC and PwC Tax Japan,
who conducted the financial and tax due diligence on Inageya, and then conducted a question-and-answer
session. In addition, the Committee received an explanation from Mizuho Securities, the Company’s
financial advisor and third-party calculation institution, regarding the evaluation method and results of the
Share Exchange Ratio, conducted a question-and-answer session, and verified its rationality. The
Company’s Special Committee received advice from Mizuho Securities and Yodoyabashi & Yamagami
LPC, determined a negotiation policy for the Share Exchange Ratio, and participated substantially in thenegotiation process with Inageya, receiving reports on the content of the negotiations and providing
instructions as necessary.
Based on this background, the Company’s Special Committee carefully discussed and considered theCompany’s Consultation Matters, and submitted a report to the Company’s Board of Directors on April 18,
2024 stating that the Share Exchange had not been deemed disadvantageous to the Company’s minority
shareholders.
(b) Approval from all Directors of the Company, excluding those with interests, and opinion stating that
there are no objections from all Corporate Auditors, excluding those with interests
All seven of the nine Directors of the Company, excluding Mr. Motohiro Fujita and Mr. Motoya Okada,attended the meeting of the Board of Directors of the Company held on April 18, 2024, and a resolution
was passed to approve the Share Exchange, with the unanimous approval of all Directors in attendance. In
addition, all of the Company’s Corporate Auditors participated in the above Board of Directors meeting,and all of them expressed the opinion of having no objections to the above resolution.
Given that Mr. Motohiro Fujita concurrently serves as Advisor at AEON, and Mr. Motoya Okada
concurrently serves as Director, Chairman and Representative Executive Officer of AEON, there is a riskof a conflict of interest arising concerning the Share Exchange, therefore neither of them participated in
the deliberations and resolutions regarding the Share Exchange at the Board of Directors meeting of theCompany. Furthermore, neither of them, as being in the position of representing the Company, participatedin discussions and negotiations with Inageya regarding the Share Exchange.
(c) Obtaining a report from a special committee that has no interests in Inageya
For the purpose of exercising caution in making decisions regarding the Share Exchange, eliminating thepossibility of arbitrariness and conflicts of interest in the decision-making process of Inageya’s Board of
Directors and ensuring its fairness, as well as confirming that Inageya’s Board of Directors’ decision tocarry out the Share Exchange would not be disadvantageous to Inageya’s minority shareholders, Inageya
established a special committee (hereinafter “Inageya’s Special Committee”), consisting of members who
have no interests in AEON or the Company. The members are Mr. Shuichi Ohtani and Ms. Yaeko Ishida(Kitashiro), who are Independent Outside Directors of Inageya and have been registered as Independent- 27 -

Directors with the Tokyo Stock Exchange, as well as Mr. Koji Makino, who is an Outside Auditor of
Inageya and has been registered as an Independent Auditor with the Tokyo Stock Exchange. In considering
the Share Exchange, Inageya’s Special Committee was consulted on: (i) the rationality of the purpose of
the Share Exchange (including whether or not it contributes to the improvement of corporate value), (ii)the validity of the terms and conditions of the Share Exchange, (iii) the fairness of the procedures of the
Share Exchange, and (iv) based on (i) to (iii) above, whether or not the Share Exchange could be considereddisadvantageous to Inageya’s minority shareholders (hereinafter, (i) to (iv) will be collectively referred toas “Inageya’s Consultation Matters”). In addition, Inageya’s Board of Directors resolved that decisions by
the Board of Directors regarding the Share Exchange should be made with the utmost respect for thedecisions of Inageya’s Special Committee, and in considering the aforementioned consultation matters, theBoard of Directors granted the Committee the authority to 1) collect information necessary for considering
consultation matters stated above (authority to request that Inageya’s execution side and other parties
provide necessary information), 2) seek professional advice from Nomura Securities, the financial advisor
and third-party calculation institution appointed by Inageya, and Nagashima Ohno & Tsunematsu, the legal
advisor appointed by Inageya, 3) nominate and appoint advisors unique to Inageya’s Special Committee asnecessary, and 4) negotiate the terms and conditions of the Share Exchange with other parties as necessary(expenses related to 1) to 3) will be borne by Inageya).
Inageya’s Special Committee held a total of thirteen meetings between January 12, 2024 and April 18,
2024, and even outside the meetings, expressed opinions and gathered information via e-mail, etc., inaddition to holding discussions as necessary to carefully consider Inageya’s Consultation Matters.
Specifically, Inageya’s Special Committee first confirmed that there were no problems with theindependence and expertise of Nomura Securities, the financial advisor and third-party calculation
institution appointed by Inageya, and Nagashima Ohno & Tsunematsu, the legal advisor appointed by
Inageya, and approved their appointment. Then, after sending a letter of inquiry to the Company regarding
the purpose, etc. of the Share Exchange, Inageya’s Special Committee received an explanation from theCompany regarding the purpose of the Share Exchange, the background and circumstances leading up to
the Share Exchange, the reasons for choosing a share exchange, the management policy and approach to
the treatment of employees after the Share Exchange, the handling of the shareholder benefit system, andmore. Following this, Inageya’s Special Committee conducted a question-and-answer session. In addition,
Nagashima Ohno & Tsunematsu, Inageya’s legal advisor, provided advice on measures to ensure fairness
in the procedural aspects related to the Share Exchange, including the decision-making method of Inageya’s
Board of Directors regarding the Share Exchange, the operation of Inageya’s Special Committee, as wellas on measures to avoid conflicts of interest. Moreover, the Committee received an explanation on the
results of legal due diligence regarding the Company, and conducted a question-and-answer session.
Furthermore, based on Inageya’s request, the Committee received a report on the results of financial andtax due diligence on the Company from EY Strategy and Consulting Co., Ltd. and Ernst & Young Tax Co.,
who conducted said financial and tax due diligence, and then conducted a question-and-answer session. In
addition, the Committee received an explanation from Nomura Securities, Inageya’s financial advisor andthird-party calculation institution, regarding the calculation method and results of consideration for theTransaction (Share Exchange Ratio, etc.), conducted a question-and-answer session, and verified its
rationality. Inageya’s Special Committee received advice from Nomura Securities and Nagashima Ohno &Tsunematsu, determined a negotiation policy for consideration for the Transaction (Share Exchange Ratio,etc.), and participated substantially in the negotiation process with the Company, receiving reports on thecontent of the negotiations and providing instructions as necessary.
Based on this background, Inageya’s Special Committee carefully discussed and considered Inageya’s
Consultation Matters, and submitted a report to Inageya’s Board of Directors on April 18, 2024 stating that
the Share Exchange had not been deemed disadvantageous to Inageya’s minority shareholders.
(d) Approval from all Directors of Inageya, excluding those with interests
Mr. Hiroyuki Watanabe serves as Executive Vice President and Executive Officer of AEON, as well as
Director of AEON Financial Service Co., Ltd. and AEON DELIGHT CO., LTD., both of which are
members of the AEON Group. Accordingly, from the perspective of avoiding conflicts of interest, at
Inageya’s Board of Directors meeting held on April 18, 2024, at which the proposal regarding the Share
Exchange was resolved, eight out nine Directors of Inageya, excluding Mr. Hiroyuki Watanabe, deliberated,
and the resolution was passed with unanimous approval. Furthermore, from the perspective of avoiding
conflicts of interest, Mr. Hiroyuki Watanabe did not participate in discussions and negotiations regarding
the Share Exchange, as being in the position of representing Inageya, nor did he participate in the
deliberations regarding the Share Exchange at Inageya’s Board of Directors’ meeting mentioned above.
(2) Matters regarding the appropriateness of the Company’s amount of capital and reserves- 28 -

The Company’s amount of capital and reserves to be increased through the Share Exchange shall be theamount separately determined by the Company in accordance with Article 39 of the Regulations on
Corporate Accounting. Such handling was decided within the scope of laws and regulations after
comprehensive consideration of the Company’s capital policy and other circumstances, and wasdetermined to be appropriate.
4. Matters regarding the Appropriateness of Provisions regarding Stock Acquisition Rights related to the
Share Exchange
Not applicable.
5. Matters regarding Inageya
1) Non-consolidated financial statements, etc. for the most recent business year
In accordance with laws and regulations and Article 16 of the Company’s Articles of Incorporation, thisinformation is posted on the Company’s website (https://www.usmh.co.jp/ir/shareholders) (Japaneseonly).
2) Details of events occurring after the last day of the most recent business year that have a significant
impact on the status of company assets, such as disposal of important assets, burden of significant debts,
etc.
(a) Inageya resolved to implement the Share Exchange, with the Company becoming the wholly
owning parent company in the share exchange and Inageya the wholly-owned subsidiary in theshare exchange, by a resolution of the Board of Directors on April 18, 2024, and on the same date,the Share Exchange Agreement was concluded. The contents of the Share Exchange Agreement are
as described in “2. Overview of the Contents of the Share Exchange Agreement” above.
(b) By a resolution of the Board of Directors on April 18, 2024, Inageya resolved to receive special
dividends of ¥1,263 million from Welpark, a subsidiary that operates a drugstore business, with
August 30, 2024 as the effective date (scheduled), and to transfer the shares of Welpark to WELCIA
HD for ¥6,989 million, with September 2, 2024 as the share transfer execution date (scheduled).
On April 18, 2024, Inageya concluded a share transfer agreement (hereinafter the “Share Transfer
Agreement”) with WELCIA HD.
6. Details of Events Occurring after the Last Day of the Company’s Most Recent Business Year that Have a
Significant Impact on the Status of Company Assets, such as Disposal of Important Assets, Burden of
Significant Debts, etc.
The Company resolved to implement the Share Exchange, with the Company becoming the whollyowning parent company in the share exchange and Inageya the wholly-owned subsidiary in the shareexchange, by a resolution of the Board of Directors on April 18, 2024, and on the same date, the Share
Exchange Agreement was concluded. The contents of the Share Exchange Agreement are as described in“2. Overview of the Contents of the Share Exchange Agreement” above.

- 29 -

Business report(From March 1, 2023 to February 29, 2024)
1. Matters related to the current situation of the Group(1) Progress and results of the businessIn this consolidated fiscal year, the management environment faced significant challenges due to a sharp
depreciation of the yen, which continued to drive up energy and raw material prices, causing a surge in prices
for food and household goods and posing a strong headwind to consumer spending. Additionally, wage increases
due to employment expansion and cost increases due to responses to the logistics 2024 issue have led to pricepass-through moves primarily in the manufacturing sector, accelerating the transition to inflation. Consumers
are economizing more in this environment, increasingly choosing products and prices that align with their values
from various channels, further driven by the trend of digitalization.
Under these conditions, the Group has taken measures to swiftly transition to a different structure byimplementing supply chain reforms, logistics to reduce labor costs, and digital investments to mitigate thepressure on profits from rising costs, such as logistics costs, material prices, and utilities.
Specifically, in terms of supply chain reform and focusing on the logistics challenges of 2024, we havelaunched the "U.S.M.H. Yachiyo Grocery Center," a joint logistics center introducing facilities and material
handling equipment that contribute to automation and labor-saving, and it has been in full operation since
September 2023. Additionally, as a practical example of a new model of integrated manufacturing and retail,we have developed "INNER COLOR DELI" as part of the "Green Growers" sustainable product line incollaboration with Orbis Inc. It has been manufactured by our consolidated subsidiary, Rose Corp., and went onsale in October 2023.
In digital initiatives, in December 2023, we signed a business partnership with Vietnam's VTI JOINT STOCKCOMPANY to focus on IT services and accelerate the development of various products and services including"ignica," aiming to enhance customer value and expand our product deployment business.
The main subsidiaries during this consolidated fiscal year, such as The Maruetsu, Inc. and MaxValu Kanto
Co., Ltd., saw a recovery in the number of store visitors and average spend per customer, resulting in improved
operating revenue, and gross profit.
On the other hand, Kasumi Co., Ltd. launched a new card in July 2023, shifting from flyer-based price appeals
to a new initiative aimed at providing tailored deals based on individual customer preferences and needs, as well
as digital experiences and services for customers paying in cash. However, due to a required initial penetration
period, operating revenue decreased to 94.8% compared to the previous term, resulting in decreased revenue
and profit. Nevertheless, the trends in operating revenue and gross profit are showing a clear recovery.
Across the Group, the gross profit margin improved by 0.4% compared to the previous term, leading to a
101.0% increase in total operating profit. Regarding SG&A, while we managed to reduce electricity costs
through reduced power usage and changes in power procurement contracts, increased labor costs and the needto respond to diversifying shopping styles led to increased investments in EC convenience enhancements,
diversified payment functions including self-checkouts, and labor-saving devices, which in turn caused anincrease in depreciation expenses and promotional expenses due to strategies to expand customer visits,
ultimately increasing costs by 0.7% over the previous term. As a result, the consolidated financial results forthis consolidated fiscal year included operating revenue of 706.657 billion yen (a 0.3% decrease from theprevious term), operating income of 6.907 billion yen (an 8.2% increase), ordinary income of 6.929 billion yen(a 6.0% increase), and net profit attributable to the owners of the parent of 1.008 billion yen (a 24.6% decrease).
During this consolidated fiscal year, The Maruetsu, Inc. opened four new stores, and Kasumi Co., Ltd. opened
one new store. On the other hand, to optimize management resources, The Maruetsu, Inc. closed four stores,
and MaxValu Kanto Co., Ltd. closed one store, bringing the total number of stores in the Group at the end of
the consolidated fiscal year to 529.
The Maruetsu, Inc., a major subsidiary, expanded its "online delivery" to 44 stores and increased the numberof stores offering "Uber Eats" service to 119 stores to enhance customer convenience. Furthermore, as a newcustomer touchpoint and to address shopping challenges in difficult areas, sales have begun with two "mobile
supermarkets." Additionally, self-checkout was expanded to 214 stores, and smartphone payments became
available in all stores. As a productivity improvement measure, electronic shelf labels were expanded to 107
stores, and demand-forecasting ordering systems were initiated in all stores. Regarding new store openings,
starting with the Lincos Shirokane The Sky store, four stores were opened. Additionally, we started "food drive"
activities in 10 new stores to address local community problems and contribute to food loss reduction, expanding
to 77 stores.
Kasumi Co., Ltd. focused on increasing the utilization of the ignica brand prepaid point card "Scan&Go Card"- 30 -

as a key strategy. The number of cards issued exceeded 1.19 million by the end of February 2024, and wecontinuously offered point programs to seniors and parents while implementing various sales strategies that
included point rewards, thereby expanding convenience. In December 2023, a new food market model store
aimed at making daily food shopping richer and more enjoyable was opened in Kamisato, Saitama at Aeon
Town Kamisato.
MaxValu Kanto Co., Ltd. implemented store revitalization in two stores during this consolidated fiscal year
based on individual employee input, enhancing products and services tailored to the local customers' lifestyles.
Particularly in February 2024, the revitalization at MaxValu Warabi store focused on enhancing face-to-facesales, strengthening fresh prepared foods, expanding proprietary products, enhancing OMO, and creating new
Cafe & Dine spaces, thus enhancing the shopping experience as an experiential supermarket. Additionally, inFebruary 2024, in collaboration with the city of Chiba, a "mobile supermarket" began operations in the
Hanamigawa district of Chiba city.
The Group operates the supermarket business as a single segment and omits segment information for otherbusinesses due to their lack of importance.
(Reference Information)
Regarding the major consolidated subsidiaries during this consolidated fiscal year, the operating revenue of
The Maruetsu, Inc. was 390.138 billion yen (a 3.8% increase from the previous term), Kasumi Co., Ltd. was
269.891 billion yen (a 5.2% decrease), and MaxValu Kanto Co., Ltd. was 45.183 billion yen (a 4.0% increase).
(2) ESG (Environmental, Social, and Corporate Governance) Initiatives① Initiatives towards environmental and social contributions

The Group is committed to creating a carbon-neutral society by reducing electricity usage, promoting
renewable energy, minimizing food waste and other waste materials through recycling, and transitioning toenvironmentally conscious materials that eliminate plastic use (e.g., plant-based biomass composite cutlery andshopping bags). Furthermore, starting with our exclusive sales contract with Beyond Meat, we focus ondeveloping and selling products that reduce environmental impact (Green Growers), aiming to realize asustainable society.
Additionally, based on the "Integrated Report 2022," we have formulated a specific roadmap for the key
issues identified and have started initiatives to achieve these goals while setting performance targets. During
this consolidated fiscal year, each business entity within the Group implemented renewable energy solutions,exceeding Group-wide CO2 reduction targets significantly.
Furthermore, each company within the Group is committed to strengthening connections with local
communities by engaging in social contribution activities tailored to local characteristics and needs, foodsupport activities together with customers, fundraising efforts, comprehensive cooperation agreements withlocal governments, and operating mobile supermarkets in areas with shopping difficulties to address local issues.
In response to the Noto Peninsula earthquake in January 2024, The Maruetsu, Inc. held the "Hokuriku Support
Fair," allocating a portion of the sales revenue from well-known Hokuriku products and confections forreconstruction efforts, and the Group also conducted a fundraising campaign and donated the collected funds.
Going forward, the Group will continue to engage in activities that address local community issues.

② Initiatives for strengthening corporate governance

Based on our core philosophy, vision, and mission that form the backbone of our business activities, we haveestablished a basic policy on corporate governance and disclosed it on our website. Our main initiatives include
the establishment of a Human Resources and Compensation Advisory Committee and an Evaluation Advisory
Committee, composed mainly of independent outside executives, following the Regular General Meeting of
Shareholders in May 2016. The Human Resources and Compensation Advisory Committee provides
recommendations on compensation systems and amounts for our directors and subsidiary directors, while the
Evaluation Advisory Committee continuously works on improving the effectiveness of the Board of Directors
based on analyses and evaluations of its effectiveness.
(3) Challenges to be addressed
The environment of cost-push inflation due to wage increases and rising costs of many imported resources
and raw materials is expected to continue, requiring more rigorous cost-benefit analysis, and concerns overinterest rate increases due to the lifting of the Bank of Japan's negative interest rate policy, necessitating more
precise investments. Furthermore, given the intensifying competition across business formats and theanticipated effects of an aging and declining population, it is urgent to redefine business domains and markets
by transitioning to a business that integrates digital and physical elements, such as OMO. In response, the Group- 31 -

has formulated and is implementing various measures under the third medium-term business plan, covering
three fiscal years from FY2023 (February 2024 term to February 2026 term). Specifically, the plan includes ①
redefining and revitalizing our existing supermarket business through transformation of products and stores (thefirst engine), ② expanding out-of-store revenue through the implementation of OMO (the second engine), and③ developing businesses targeting new areas leveraging our accumulated digital intellectual property (the third
engine). These three engines are being driven concurrently to realize the vision set forth in our third mediumterm business plan, "Beyond Supermarket," which aims to transcend traditional supermarket business structures.
(4) Financial and Profit and Loss Situation of the Group
Category

By fiscal year

Net sales
Ordinary income
Net profit attributable to owners of theparentEarnings per share
Total assets
Net assets
Equity ratio
Net assets per share

Sixth Period(FY 2020)

Seventh Period(FY 2021)

Eighth Period(FY 2022)

Ninth Period(FY 2023)

718,904 million
701,159 million
yenyen
19,433 million yen 12,474 million yen

691,981 million
yen6,536 million yen

690,498 million
yen
6,929 million yen

8,845 million yen

5,374 million yen

1,336 million yen

1,008 million yen

68.97 yen
285,090 million
yen148,797 million
yen
52.0％

41.89 yen
280,741 million
yen152,238 million
yen
54.0％

10.41 yen
278,729 million
yen
150,022 million
yen
53.7％

7.85 yen
285,505 million
yen
150,250 million
yen
52.5％

1,155.18 yen

1,180.56 yen

1,167.15 yen

1,168.73 yen(Notes) 1. Earnings per share for the current term are calculated based on the average total number of shares issued during theperiod, while net assets per share are calculated based on the number of shares issued at the end of the period.
2. "Accounting Standard for Revenue Recognition" (Corporate Accounting Standard No. 29, issued March 31, 2020) has
been applied since the beginning of the eighth period.

- 32 -

(5) Situation of parent company and important subsidiaries① Situation of the parent company
CapitalCompany name
Capital stock
contribution
ratio
220,007
million52.20%
Aeon Co., Ltd.
yen
(51.0％)

Main business
content

Businessrelationship

Pure holding―
company
Pure holding
Aeon Market Investment Inc.
100 million yen
51.0%―
company(Notes) 1. The numbers in parentheses under the capital contribution ratio column represent the percentage ofindirect ownership.
2. Aeon Market Investment Inc. owns 52.4% of voting rights in the Company and has a capital contribution
ratio of 51.0%. Aeon Co., Ltd. owns 100.0% of the voting rights in Aeon Market Investment Inc.
② Issues related to transactions with the parent company and related entities

a. Matters taken into account to ensure that these transactions do not harm our profits
The Group purchases private brand products such as "Top Valu" and other items from Aeon Co., Ltd.,a Group company. Additionally, the Group engages in real estate leasing transactions with the same Groupfor our store facilities, among other properties. In conducting these transactions, to protect minority
shareholders, we ensure that the necessity and terms of the transactions are not significantly different fromthose with third parties, and decisions are made fairly and properly based on rational judgment.
b. Regarding the decision by the Board of Directors on whether these transactions harm our profit and thereasons for their decision
United Super Markets Holdings (hereinafter “The Company”), considering the independence from theparent company and appropriate opinions from independent outside directors, makes decisions on whether
to conduct these transactions after multifaceted discussions in the Board of Directors. In terms of business
operations, we execute our duties based on decisions made primarily by our Board of Directors,
maintaining our independence as a listed company and conducting our management and business activities
appropriately while respecting each other’s positions.
③ Situation of important subsidiaries

Our capital
Capital stock contribution
Main business content
ratio
million
The Maruetsu, Inc.
100yen100.0%
Supermarket businessmillionKasumi Co., Ltd.
100yen100.0%
Supermarket businessmillion
MaxValu Kanto Co., Ltd.
100yen100.0%
Supermarket business(Notes) 1. The Company has 12 subsidiaries.
2. Kyoei A&I Co., Ltd., previously a consolidated subsidiary, has been excluded from the consolidated
fiscal year since we divested our equity interest.
Company name

④ Situation of important affiliated companies

Our capital
Main business content
contribution ratio
27.7%
Seibu Co., Ltd.
50 million yen
Supermarket business(27.7)%(Notes) 1. We have three affiliated companies, including the important affiliated company mentioned above.
2. The numbers in parentheses under the capital contribution ratio column represent the percentage ofindirect ownership.
Company name

Capital stock- 33 -

⑤ Status of specified wholly owned subsidiaries at the end of the business year

Company name
The Maruetsu, Inc.
Kasumi Co., Ltd.

Address
5-51-12 Higashi-Ikebukuro,
Toshima, Tokyo
599-1 Nishi-Ohashi, Tsukuba,
IbarakiTotal book value
62,179 million yen
64,257 million yen

Our total assets
160,479 million yen(6) Capital investment and funding status
The Group's capital investments focused on expanding the supermarket business, including opening five newstores and revitalizing existing stores.
As a result, capital investment expenditures for this consolidated fiscal year amounted to 24.275 billion yen.
Furthermore, the funds required for capital investments made during this consolidated fiscal year werecovered by internal funds, etc., and interest-bearing debt increased by 1.63 billion yen compared to the end of
the previous consolidated fiscal year, totaling 44.876 billion yen.
(7) Main business content (as of February 29, 2024)

The Group consists of the Company, 12 subsidiaries, and 3 affiliated companies, operating in the supermarket
business, related product supply business, and other businesses including real estate.
The business content and the role of the Company and related companies in these businesses are as follows.
① Supermarket businessCompany nameCategory

The Company

Manages the supermarket business

The Maruetsu, Inc.
Kasumi Co., Ltd.
MaxValu Kanto Co., Ltd.
Seibu Co., Ltd.

Mainly engaged in supermarket business including groceries,
household goods, and apparel

Maruetsu Fresh Foods Co., Ltd.
ROSE CORPORATION Co.,Ltd.
Kasumi Green Co., Ltd.
Kasumi Mirai Co., Ltd.

Fresh food processing businessInvolved in the processing, manufacturing, and sales of foodproducts.
Vegetable processing and packaging, etc.

② Other businesses
Company nameCategory

Maruetsu-Kaihatsu CO., LTD.

Real estate business

Clover CO.,Ltd.

Product development business

Food Quality Management Center Co., Ltd.

Quality control and inspection services

Marno Co., Ltd.

Business outsourcing services

Asubiz Support Co., Ltd.

Human resources outsourcing services

Nippon Ryutsu Mirai Kyoiku Center Co., Ltd.

Education services

ESUO CORPORATION

Retail operations including cashier and store management- 34 -

(8) Major bases of the corporate group (as of February 29, 2024)① The Company

Business location

Address

Head office

Chiyoda, Tokyo

Warabi office

Warabi, Saitama

THE TERRABASE Tsuchiura
U. S. M. H Yachiyo Grocery
CenterTsuchiura, Ibaraki
Yachiyo, Chiba② Subsidiary
Company nameHead office, stores, and business sites[Head office] Toshima, Tokyo[Stores and business sites]
149 stores in Tokyo, 55 in Saitama, 49 in Chiba, 49 in Kanagawa,1 in Ibaraki, 1 in Tochigi, totaling 304 stores
Kawasaki Complex Center (Kawasaki, Kanagawa),
Misato Complex Center (Misato, Saitama)

The Maruetsu, Inc.

[Head office] Tsukuba, Ibaraki[Stores and business sites]
108 stores in Ibaraki, 40 in Chiba, 34 in Saitama, 7 in Tochigi, 4 in Gunma,
2 in Tokyo, totaling 195 stores
Central Distribution Center (Kasumigaura, Ibaraki),
Sakura Distribution Center (Sakura, Chiba),
Meat Processing Center (Tsuchiura, Ibaraki)

Kasumi Co., Ltd.

[Head office] Koto, Tokyo
MaxValu Kanto Co., Ltd.

[Stores and business sites]
14 stores in Chiba, 12 in Tokyo, 2 in Saitama, 2 in Kanagawa, totaling 30 stores(9) Employee situation of the corporate group (as of February 29, 2024)
Category

Number of employees

Supermarket business
Other businesses

7,121 employees(18,945 employees)

71 employees(1,768 employees)

Total
7,192 employees(20,713 employees)(Notes) 1. The number of employees is based on the number of working personnel.
2. The numbers in parentheses indicate the annual average number of part-time and temporary workers(converted to 8-hour days)(10) Major lenders and borrowing balances (as of February 29, 2024)
LenderBorrowing balance

The Joyo Bank, Ltd.

5,890 million yen

The Norinchukin Bank

4,020 million yen

Development Bank of Japan Inc.

4,000 million yen

Saitama Resona Bank, Ltd.

3,950 million yen

Shinkin Central Bank

3,000 million yen- 35 -

2. Matters related to the Company's shares (as of February 29, 2024)(1) Total number of authorized shares

500,000,000 shares(2) Total number of outstanding shares

131,681,356 shares
119,390 persons(3) Number of shareholders(4) Major shareholders (top 10)
Shareholder name

Number of shares held

Aeon Market Investment Inc.

thousandsharesthousand
5,673
sharesthousand
2,854
sharesthousand
2,300
sharesthousand
1,629
sharesthousand
1,528
sharesthousand
1,099
sharesthousand
1,091
sharesthousand
1,010
sharesthousand846
shares67,159The Master Trust Bank of Japan, Ltd. (trust account)
U.S.M.H. Group Business Partners Shareholding Association
Public Interest Incorporated Foundation Kambayashi
International Student Scholarship Foundation
Aeon Co., Ltd.
Nippon Access, Inc.
Kokubu Group Corp.
Mitsubishi Shokuhin Co., Ltd.
Kowa Company, Ltd.
Custody Bank of Japan, Ltd. (trust account)

Shareholding percentage
52.31%
4.41%
2.22%
1.79%
1.26%
1.19%
0.85%
0.84%
0.78%
0.65%

(Notes) 1. Treasury stock (3,311,059 shares) is not included in the major shareholders' list.
2. Shareholding percentages are calculated excluding treasury stock (3,311,059 shares) and are displayedrounding down to the third decimal place.
3. Share counts are displayed rounding down to the nearest thousand.

(5) Status of shares issued to executives as compensation for execution of duties during this business year
Category

Number of shares (shares)

Director

8,900 shares(excluding outside directors)
Note: The above includes shares issued to directors who have resigned.

(For reference)- 36 -

Number of recipients (persons)

4 persons(6) Matters related to stock acquisition rights, etc.
① Summary of stock acquisition rights issued as compensation for the execution of duties held by executives
at the end of the business year
Category

Name(Date of resolution)

First stock
Directoracquisition right(May 29, 2017)

Second stock
Directoracquisition right(May 21, 2018)

Third stock
Directoracquisition right(May 24, 2019)

Fourth stock
Directoracquisition right(May 20, 2020)

Fifth stock
Directoracquisition right(May 21, 2021)

Sixth stock
Directoracquisition right(May 20, 2022)

Seventh stock
Directoracquisition right

Numberof holders
andquantity
5 persons
245 units
5 persons
169 units
5 persons
216 units
5 persons
200 units
5 persons
226 units
5 persons219 units
5 personsshares:Issue price(per unit)

Exercise price(per share)

113,800 yen

1 yen

June 27, 2017 toJune 26, 2047

138,600 yen

1 yen

June 11, 2018 toJune 10, 2048

89,200 yen

1 yen

June 10, 2019 toJune 9, 2049

106,300 yen

1 yen

101,600 yen

1 yen

98,600 yen

1 yen

103,100 yen

1 yen

24,500 shares
Commonshares:
16,900 shares
Commonshares:21,600 shares
Commonshares:
20,000 shares
Commonshares:
22,600 shares
Commonshares:21,900 shares
Commonshares:Exercise period

June 8, 2020 toJune 7, 2050
June 14, 2021 toJune 13, 2051
June 13, 2022 toJune 12, 2052
June 19, 2023 toJune 18, 2053
11,600 shares(Notes) 1. Directors referred to here exclude outside directors and part-time directors.
2. The exercise of stock acquisition rights is conditional on the holder not being an active director or corporate auditor of
the Company or any consolidated subsidiary. Rights can only be exercised in a lump sum within ten days following theloss of their position as a director or auditor of the Company or any consolidated subsidiary.
3. Transfer of stock acquisition rights requires the approval of our Board of Directors.
(May 19, 2023)

116 units

Typeandnumberofsharestargeted
Common② Summary of stock acquisition rights issued as compensation for execution of duties to our employees
during this business year
Category

Subsidiary
Director

Name(Date of resolution)

Seventh stockacquisition right(May 19, 2023)

Number ofrecipientsand units

Type and number ofshares targeted

8 personsCommon shares:

107 units

10,700 shares

Issue price(per unit)

Exercise
price(per share)

103,100 yen

1 yen

Exercise period
June 19, 2023 toJune 18, 2053

(Notes) 1. The exercise of stock acquisition rights is conditional on the holder not being an active director or corporate
auditor of the Company or any consolidated subsidiary. Rights can only be exercised in a lump sum withinten days following the loss of their position as a director or auditor of the Company or any consolidated
subsidiary.
2. Transfer of stock acquisition rights requires the approval of our Board of Directors.

- 37 -

3. Matters concerning company executives(1) Names, etc. of directors and corporate auditors (as of February 29, 2024)

Position
Name
Responsibilities and important concurrent positions
Vice Chairman at Aeon Co., Ltd.,
Representative
Director andMotohiro Fujita Director at Kasumi Co., Ltd.,
President
Director at MaxValu Kanto Co., Ltd.
Representative
Head of Digital Division,
Shinichiro
Director Vice
Yamamoto
Representative Director and President at Kasumi Co., Ltd.
President
Representative Masaharu Honma
Director Vice
Representative Director and President at The Maruetsu, Inc.,
President
Director Vice
Satoshi Shimada President at MaxValu Kanto Co., Ltd., Director
President
The Maruetsu, Inc. Director, Executive Officer, Head of Education
Director
Hiroshi Saito Human Resources Department, also in charge of Business Designand Management Planning.
Director and Representative Executive Chairman at Aeon Co., Ltd.
Mall Corp. Director Counselor
Director
Motoya Okada Aeon
Counselor
Welcia Holdings Co., Ltd. Director
Kusuri no Aoki Holdings Co., Ltd. Director at Aoki Holdings Inc.
Director
Tomonobu Miki Executive officer and head of the first food division at Marubeni Corp.
Representative of Torikai General Law Office
Shigekazu
Director
Torikai
Outside Director at Murakoshi Holdings Co., Ltd.
Representative Director of Limited Company Studio Ku
Director
Naoko Makino Delegate of the Japanese Society of Food Education and member of
the Planning Committee
Full-time
Corporate
Takeshi Nemoto Corporate Auditor at The Maruetsu, Inc.
AuditorFull-time
Corporate
Tadayoshi Yoyogi Corporate Auditor at Kasumi Co., Ltd.
AuditorDeputy head of the first food division and head of the first and second
Corporate
Chiharu
AuditorTakeshima
strategic planning offices of the food division at Marubeni Corp.
Corporate
Hirofumi
Full-time Corporate Auditor at Aeon Big Co., Ltd.
Auditor
Ishimoto
Representative of Okamoto Shinobu Tax Accountant Office
Corporate
Shinobu
Outside Director at Yamaichi Electronics Co., Ltd. (Audit andAuditorOkamoto
Supervisory Board Member)(Notes) 1. Changes in directors and corporate auditors during the business year
Directors Ryota Furuse and Akira Terakawa, and Corporate Auditors Masami Sakamoto and Koichi Ihara
retired upon the conclusion of their terms at the 8th Regular General Meeting of Shareholders held on May
19, 2023.
2. At the 8th Regular General Meeting of Shareholders held on May 19, 2023, Hiroshi Saito and Tomonobu
Miki were newly appointed as directors, and Takeshi Nemoto and Chiharu Takeshima were newly
appointed as corporate auditors.
3. Directors Tomonobu Miki, Shigekazu Torikai, and Naoko Makino qualify as outside directors under Article
2, Paragraph 15 of the Companies Act. Additionally, Directors Shigekazu Torikai and Naoko Makino are
registered as independent executives with the Tokyo Stock Exchange, where the Company is listed.
4. Corporate Auditors Chiharu Takeshima, Hirofumi Ishimoto, and Shinobu Okamoto qualify as outside
corporate auditors under Article 2, Paragraph 16 of the Companies Act. Additionally, Corporate Auditor
Shinobu Okamoto is registered as an independent executive with the Tokyo Stock Exchange where theCompany is listed.
5. Corporate Auditor Shinobu Okamoto primarily has extensive experience in corporate accounting and abroad understanding of taxation and accounting as a certified public accountant.

- 38 -

(2) Matters concerning the compensation of directors and corporate auditors
In response to the amendments to the Companies Act enacted on March 1, 2021, the Company adopted aresolution at the Board of Directors meeting held on February 26, 2021, regarding policies for the individualcompensation of directors, based on our corporate governance guidelines.
Excluding our outside executives, our officer compensation policy reflects a commitment to "enhancing
medium- to long-term financial results and fostering a healthy entrepreneurial spirit among directors to drive
sustainable growth and enhance corporate value" as a basic policy. This executive compensation systemincreases the proportion linked to performance, and the amounts paid to directors are determined within thelimits set by the resolution of the General Meeting of Shareholders, based on recommendations from the Human
Resources and Compensation Advisory Committee.
The compensation for outside directors and corporate auditors consists solely of a monthly salary. The levelof compensation is determined based on third-party benchmarks for compensation levels at domestic companies.
The amount of compensation for corporate auditors is decided through discussions among the auditors, within
the limits set by a resolution at the General Meeting of Shareholders.
Additionally, a "Human Resources and Compensation Advisory Committee" primarily composed ofindependent outside executives is continuously positioned under the Board of Directors. Each April, thecommittee reviews the previous year's financial results for each operating company to verify the appropriatenessof compensation levels, ensuring objectivity and transparency.
① Overview of the compensation system for directors (excluding outside executives)
Plan

Type

Monthly Compensation

Monthly
compensation

Basic
compensationRole-based
compensation

Annual performancecompensation (reflected
monthly)

EquityCompensation

Restricted stock compensation(RS)

Stock compensation
Stock option (SO)Content
Monetary compensation
paid monthly, fixedaccording to the director's
position
Amounts are determinedbased on the previous fiscal
year's performanceachievement rate and theindividual director's
evaluation, consisting of
performance-linked
monetary compensation
Linked to the medium-termbusiness plan, stockcompensation predetermined annually for thetarget period
Granted based on theachievement rate of theprevious fiscal year's
performance, it is a form of
the Company's stockcompensation- 39 -

Performancelinked

Deliverable

Fixed

EvaluationTarget－Monetary
Shortterm

Performance
Linked
Stock

New
share

ReservationrightsMediumto longterm

②

Overview of position-specific compensation, performance-linked compensation, and non-monetarycompensation distribution ratios
Based on the table below, individual compensation is calculated based on the performance achievement points,
which are derived from the completion rate of the budget for consolidated operating revenue and consolidated
ordinary income. Within the range of the payout rate predetermined according to each director's role, the payout
rate is determined by each director's performance evaluation. The compensation amount is then determined bymultiplying the payout rate by the standard value. The Company uses the following performance indicators toconsistently realize improvements in corporate value. In this business year, consolidated operating revenue was706.6 billion yen, and consolidated ordinary income was 6.9 billion yen, with a performance achievement rateof 69.3%.
Ratio (composition %)Position-specific compensation

Fixed
compensation

Performance-linked compensation

Monetary compensation(Representative Director)
Chairman & President(Representative Director) Vice
President(Non-representative) Chairman& Vice President
Senior Managing Director

Stock-based
compensation (SO)

Restricted stockcompensation
(RS)

45

40

10

5

45

40

10

5

50

35

10

5

55

30

10

5

Managing Director

58

27

10

5

Concurrent Director

60

25

10

5

Total (%)

100

Note: The composition ratio percentages are calculated based on the total compensation amount as 100%, and listed as averagevalues (%) for each type of compensation.

③ Procedures for determining compensation
To ensure the appropriateness and transparency of the compensation decision process for targeted directors,
the Company has established a Human Resources & Compensation Advisory Committee as an advisory bodyto the Board of Directors, with a majority of its members being independent outside executives. The structureof directors' compensation, the appropriateness of the design of performance-linked compensation systems, thesetting of targets, and performance evaluations are deliberated within the Human Resources & Compensation
Advisory Committee, then reported to the Board of Directors for decision.
In determining individual directors' compensation for this business year, the Human Resources &Compensation Advisory Committee conducts a comprehensive review, including consistency with the officer
compensation policy, before making a recommendation. The Board of Directors respects the content of theserecommendations, judging them to be in line with the officer compensation policy.

- 40 -

④ Total amount and number of directors and corporate auditors' compensation for the current term
Executive classification

Directors(excluding outside
directors)
Corporate Auditors(excluding outside
corporate auditors)

Total amountofcompensation(million yen)

Total amount of compensation by type (million yen)Monthly
compensati
onStock options

Restrictedcompensation

stock

Numberexecutives
involved(persons)

66

41

12

10

7

18

18

－

－

3

Outside Directors

23

23

－

－

4

Outside Corporate Auditors

11

11

－

－

4

of

(Notes) 1. The total number of directors and corporate auditors compensated includes payments to two
directors and two corporate auditors who retired upon the conclusion of the 8th Regular General
Meeting of Shareholders held on May 19, 2023.
2. The annual limit for directors' compensation was set at the 1st Regular General Meeting of
Shareholders held on May 19, 2016, at up to 150 million yen annually (of which up to 35 million
yen is for outside directors), with nine directors at the time of this resolution (including threeoutside directors). At the 2nd Regular General Meeting of Shareholders held on May 19, 2017, it
was resolved to continue providing monetary compensation for stock-based compensation(assigning stock acquisition rights with an exercise price of 1 yen per share) within the annual limitof 150 million yen established for directors (excluding outside directors and part-time directors) at
the 1st Regular General Meeting of Shareholders held on May 19, 2016. At the time of thisresolution, the target number of directors was nine (including three outside directors).
3. At the 2nd Regular General Meeting of Shareholders held on May 19, 2017, it was resolved to
introduce a restricted stock compensation system for targeted directors to provide incentives forsustained enhancement of corporate value and to further share value with shareholders.
Additionally, separate from the directors' compensation, the upper limit of the monetary
remuneration claim for restricted stock paid to the directors was set at 150 million yen annually,
with the total number of company shares granted not exceeding 200,000 per year. Furthermore, atthe 5th Regular General Meeting of Shareholders held on May 20, 2020, part of the restricted stockcompensation system was revised. For the first, second, and third years of the medium-termbusiness plan, stocks with a one-year restriction period were granted, with all restrictions lifted if
the previous business year's achievement points reached 100% or higher, and all forfeited if lessthan 100%. However, the monetary remuneration claim related to the restricted stock compensation
system for targeted directors is intended to be paid in a lump sum as compensation for one year of
execution of duties, effectively within an annual limit of 50 million yen and up to 66,667 shares,
following the previous system. At the time of this resolution, the number of targeted directors wasfive.
4. The annual limit for corporate auditors' compensation was set at the 1st Regular General Meetingof Shareholders held on May 19, 2016 at up to 50 million yen, with five corporate auditors at thetime of the resolution (including three outside corporate auditors).
5. The above payments include the cost of stock acquisition rights granted to five directors by aresolution of the Board of Directors held on May 19, 2023 for the current term, amounting to 14
million yen.
6. In addition to the above compensation, the total amount of officer compensation received byoutside corporate auditors from the parent company and its subsidiaries, etc. (excluding theCompany) is 11 million yen, paid to one person.
7. The amounts for stock options and restricted stock compensation represent the expense recorded
for the current business year.
8. The monthly compensation of 41 million yen for directors (excluding outside directors) consists ofa fixed monthly compensation of 36 million yen and performance-linked monetary compensationof 5 million yen based on annual financial results. The total amount for performance-linked
compensation is 28 million yen, and the total for non-monetary compensation is 23 million yen.
9. Monthly compensation for corporate auditors (excluding outside corporate auditors), outside
directors, and outside corporate auditors consists entirely of fixed monetary compensation.

- 41 -

(3) Directors and corporate auditors who retired during this business year
Name
Ryota Furuse

Date of retirement
May 19, 2023

Reason for
retirement

Term
expiredPosition at the time of retirement, and importantconcurrent positions
Director of the Company
Representative Director and Chairman of The Maruetsu,
Inc.

Director of the Company
Akira Terakawa

May 19, 2023

Term

Representative Director and Senior Executive Vice

expiredPresident; CEO of the Consumer Products Group at
Marubeni Corp.

Masami Sakamoto May 19, 2023
Koichi Ihara

May 19, 2023

Term
expiredTerm
expiredCorporate Auditor of the Company
Corporate Auditor of the Company
Manager of the Consumer Products Group at Marubeni
Corp.

(4) Major changes in the positions of directors and corporate auditors after the end of this business year
Name

New position

Motohiro Fujita Chairman of Kasumi Co., Ltd.

Previous position
Vice Chairman at Aeon Co., Ltd.,
Director at Kasumi Co., Ltd.,

Director at Kasumi Co., Ltd.,

Representative Director andShinichiro

Head of Digital Division andPresident at Kasumi Co., Ltd.

Yamamoto

Management Strategy Division at

Head of Digital Division at the

the Company

Company

Tomonobu Miki Director at Marubeni Corp.
Deputy head of the first food
Chiharu
Takeshima

division and head of the first andsecond strategic planning officesof the food division at Marubeni
Corp.

Executive officer and head of the firstfood division at Marubeni Corp.

Date of change
March 1, 2024

March 1, 2024

April 1, 2024

Deputy head of the first fooddivision and head of the first andsecond strategic planning offices ofthe food division at Marubeni Corp.

- 42 -

April 1, 2024

(5) Matters concerning outside executives① Important concurrent positions and relations with the Group- Important concurrent positions of outside directors and outside corporate auditors are as listed in "3.
Matters concerning company executives (1) Names, etc. of directors and corporate auditors (as ofFebruary 29, 2024)."- Tomonobu Miki and Chiharu Takeshima, who hold concurrent positions at Marubeni Corporation, areinvolved in transactions such as the procurement of goods between the Group and the Marubeni group.
- There are no special relationships with the concurrent positions of other outside directors and outside
corporate auditors.
② Attendance at the Board of Directors and Audit and Supervisory Board during this business year (numberof attendances/number of meetings)
Category

Name

Board of Directors
10 times/10 tim(Attendance rate
Director* Tomonobu Mikies 100.0%)
Shigekazu
12 times/12 tim(Attendance rate
Director
Torikaies 100.0%)
12
times/12
tim(Attendance rate
Director
Naoko Makino
es 100.0%)
Corporate
10 times/10 tim(Attendance rate
* Chiharu
AuditorTakeshimaes 100.0%)
Corporate
Hirofumi
12 times/12 tim(Attendance rate
Auditor
Ishimoto
es 100.0%)
Corporate
Shinobu
12 times/12 tim(Attendance rate
AuditorOkamotoes 100.0%)
Note: The * indicates the status after appointment on May 19, 2023.

Audit and Supervisory Board―――
10 times/10 times (Attendance
rate 100.0%)
13 times/13 times (Attendance
rate 100.0%)
13 times/13 times (Attendance
rate 100.0%)③ Main activities during this business year
- Tomonobu Miki has played a proper role in ensuring the appropriateness and correctness of decisionmaking due to his deep insight gained from experience as an overseas corporate manager, contributing
objective perspectives and active participation in strategic corporate management.
- Shigekazu Torikai, as an outside director, has played a proper role in ensuring the appropriateness andcorrectness of decision-making by providing an objective, independent perspective primarily from his
professional standpoint as a lawyer and actively participating in discussions. He also serves as thechairperson of the Human Resources & Compensation Advisory Committee, performing a supervisory
function in the selection of executive candidates and decision-making processes concerning officer
compensation from a neutral standpoint.
- Naoko Makino, as an outside director, has played a proper role in ensuring the appropriateness andcorrectness of decision-making by bringing a consumer's objective and independent perspective to
discussions, enriched by her extensive experience and knowledge in nutrition and cooking. She also serves
as a member of the Human Resources & Compensation Advisory Committee, performing a supervisory
function in the selection of executive candidates and decision-making processes concerning officer
compensation from a neutral standpoint.
- Chiharu Takeshima, as an outside corporate auditor, has played a proper role in ensuring theappropriateness and correctness of decision-making by contributing his adequate knowledge andexperience in mainly business administration from an audit perspective and actively participating in
discussions. He also serves as a member of the advisory committee evaluating the effectiveness of theBoard of Directors, contributing as needed to problem-solving efforts.
- Hirofumi Ishimoto, as an outside corporate auditor, has played a proper role in ensuring the appropriatenessand correctness of decision-making, actively contributing his views based on the extensive management
experience and knowledge gained from his long involvement with other companies.
- 43 -

- Shinobu Okamoto, as an outside corporate auditor, has played a proper role in ensuring the appropriatenessand correctness of decision-making by providing an objective, independent perspective as a tax accountant
with rich experience in corporate accounting and a broad understanding of taxation and accounting,actively participating in discussions. He also serves as a member of the Human Resources &Compensation Advisory Committee, performing a supervisory function in the selection of executive
candidates and decision-making processes concerning officer compensation from a neutral standpoint.
(6) Summary of the liability limitation agreement
The Company has provisions in the articles of incorporation allowing for the limitation of compensation
liability under Article 427, Paragraph 1 of the Companies Act for outside executives.
Accordingly, all outside executives have entered into contracts that limit the amount stipulated in Article
425, Paragraph 1 of the Companies Act, provided they perform their duties in good faith and without grossnegligence.
(7) Summary of the directors and officers liability insurance contract
We have entered into a directors and officers liability insurance contract with an insurance firm asprovided under Article 430-3, Paragraph 1 of the Companies Act, which covers damages or costs associatedwith litigation arising from the execution of their duties. The insured under this insurance contract includes
the Company's directors and corporate auditors, as well as those of subsidiaries, and all premiums are entirely
borne by the Company.

- 44 -

4. Matters related to the accounts auditor(1) Name of the accounts auditor: Deloitte Touche Tohmatsu LLC(2) Amount of compensation① Amount of compensation for the accounts auditor for this business year

31 million yen② Total amount of monetary and other property benefits payable to the accounts auditor 110 million yen
by the Company and its subsidiaries(Notes) 1. Reason the Audit and Supervisory Board agreed to the compensation of the accounts auditor
Our Audit and Supervisory Board, after obtaining necessary documents and reports from the Board of
Directors, internal departments, and the accounts auditor, reviewed the previous accounts auditor's
execution of duties, the current term's audit plan, audit hours, and the basis for estimating compensation.
Consequently, they consented to the amount of compensation for the accounts auditor as per Article
399, Paragraph 1 of the Companies Act.
2. The Company pays the accounts auditor for advisory and guidance services related to the applicationof revenue recognition standards, which are tasks other than those specified under Article 2, Paragraph
1 of the Certified Public Accountants Act.
3. In our audit contract with the accounts auditor, the compensation amount for the audit under theCompanies Act and the Financial Instruments and Exchange Act is not distinguished, and effectively,
these amounts cannot be separated; thus, ① includes these total amounts.
(3) Policy on dismissal or non-reappointment
If deemed necessary, such as when there is an impediment to the execution of duties by the accounts
auditor, the Audit and Supervisory Board will decide on a proposal for dismissal or non-reappointment of
the accounts auditor, and the Board of Directors will submit this proposal to the General Meeting of
Shareholders based on that decision.
Furthermore, if the accounts auditor is deemed to meet the criteria specified under Article 340, Paragraph
1 of the Companies Act, the Audit and Supervisory Board, with the consent of all corporate auditors, will
dismiss the accounts auditor. In this case, the corporate auditor selected by the Audit and Supervisory Board
will report the dismissal and its reasons at the first General Meeting of Shareholders convened after thedismissal.

- 45 -

5. Company Structure and Policy(1) Basic policy on the Company’s corporate governance① Basic policy on corporate governance- Respect the autonomy of operating companies and base operations on the core philosophy, vision, andmission established at the founding, which focus on “customer-first” and “contributing to the local
community”.
- Ensure transparency and fairness in decision-making to achieve proper collaboration with shareholders
and other stakeholders.
- Treat shareholders, especially those who provide feedback through their daily shopping, and otherstakeholders who can collaborate effectively from a medium- to long-term perspective as importantpartners. Create an environment conducive to constructive dialogue and establish a system thatincorporates their input into our management.
- Based on the above three principles, ensure rationality in the management decision-making process todemonstrate healthy entrepreneurial spirit and make rapid and decisive decisions, striving for theCompany's sustainable growth and medium- to long-term increase in corporate value.
② Overall structure of the corporate governance system- The Board of Directors makes significant management decisions, and as a company with an audit andsupervisory board, independent corporate auditors and the Audit and Supervisory Board audit theexecution of duties by the directors.
- Enhance the independence of the Board of Directors and the effectiveness of supervision over the
management team and directors by maintaining a system with two independent outside directors andappointing one independent outside corporate auditor.
- Establish a special committee with enhanced independence to deliberate and report on significant
transactions that may conflict with the interests of minority shareholders.
- Establish the "Human Resources & Compensation Advisory Committee," consisting mainly of
independent outside executives under the Board of Directors, to ensure the appropriateness andtransparency of executive compensation levels and performance evaluations, and to set procedures
and compensation systems for the appointment of directors through fair and transparent processes.
③ Role and responsibilities of the Board of Directors- The Board of Directors establishes the direction of management strategies and other important mattersin accordance with laws, articles of incorporation, and Board regulations.
- Clarify and thoroughly communicate the duties and responsibilities of directors and each department
through the Management Committee Regulations, job authority regulations, decision-making
standards, and job responsibilities chart, thereby supporting appropriate risk-taking by executive
management.
- The Board of Directors recognizes the medium-term business plan as a commitment to shareholders
and strives to realize it. If significant deviations from target figures occur, they analyze the causes,
set up opportunities to explain it to shareholders and investors, and reflect it in plans for the next
period and beyond.
- In nominating the next representative director or new directors, the Board of Directors works incoordination with the operating company to properly evaluate candidates, ensuring a highly
transparent and fair succession planning system.
④ Role, responsibilities, and enhancement of functions of the Audit and Supervisory Board- The Audit and Supervisory Board, as an independent institution entrusted by shareholders, defines its
roles and responsibilities according to the corporate auditor audit standards.
- In performing their duties, corporate auditors strive to maintain their independence, always uphold an
impartial and unbiased attitude, and make appropriate judgments independently and objectively
based on their own convictions.
- Appoint one independent outside corporate auditor to strengthen the independence and enhance thefunctions of the Audit and Supervisory Board.
- Facilitate information exchange with outside directors and establish the “Group Audit and Supervisory
Board Liaison Committee” to coordinate with the corporate auditors and internal audit department of
the operating company, striving for effective auditing.
- 46 -

(2) Overview of the effectiveness evaluation of the Board of Directors
Annually in March, the Company conducts a self-evaluation by directors and corporate auditors through asurvey to analyze and identify issues. By addressing these issues with targeted measures, we enhance theeffectiveness of our Board of Directors. The creation, collection, and partial analysis of the survey are
performed using external agencies to enhance transparency and ensure effectiveness.
- The Evaluation Advisory Committee, consisting of two outside directors (including the chairperson) andtwo outside corporate auditors, continuously works on enhancing the effectiveness of the Board of Directors
based on these evaluations.
① Survey Overview

14 members including directors and corporate auditors (including outside
executives)① Role and functions of the Board of Directors② Size and composition of the Board of Directors
Evaluation Items③ Operation of the Board of Directors
20 questions plus
④ Collaboration with auditing bodies
open-ended responses⑤ Communication with management⑥ Communication with shareholders and investors
Anonymous scoring from 3 (satisfied) to 1 (dissatisfied) and open-ended
Response Method
responses
Analysis by a third party and reporting and verification to the Board of
Evaluation Method
Directors
Respondents② Identifying Issues from Survey Resultsa. Operational Improvement Items- Enhancing discussions within the Board of Directors (strategy, results, review)- Information exchange between outside directors and operating company executives- Reporting internal audit status in the Board of Directors
b. Items for Reporting to the Board of Directors- Dialogue and information transmission with individual shareholders- Training opportunities for directors and corporate auditors- Successor training plan

- 47 -

③ Future Proposals (Report to the Board of Directors)

a. Measures to build strong relationships with shareholders
b. Providing training opportunities for directors and corporate auditors
c. Developing a successor training plan for the Company and its operating units
The Board of Directors will address these issues based on reports from the Evaluation Advisory Committee.
By utilizing the functions of the Evaluation Advisory Committee and coordination with the Board of Directors,
we strive to continuously strengthen corporate governance.
(3) Policy concerning shares held by the U.S.M.H. GroupThe U.S.M.H. Group has established policies regarding cross-shareholdings and standards for exercising
voting rights associated with such shareholdings. According to the basic policy, since January 2016, theCompany has sold shares in 16 companies with a total acquisition cost of 502 million yen. The remaining
shares held at the end of the business year are regularly verified by the Board of Directors to assess whether
maintaining and strengthening business relations with corporate clients and information gathering are
beneficial in the medium- to long-term for both the U.S.M.H. Group and the corporate clients, as well as toevaluate the health and risks of the companies held, and to decide the rationality of continuing to hold theseshares. - In exercising voting rights related to held shares, decisions are made according to guidelines withthe aim of enhancing the U.S.M.H. Group’s shareholder value and the medium- to long-term corporate
value of the investment targets, and are exercised appropriately.
(4) Policy on the distribution of surplus funds such as dividends
Regarding profit distribution, returning profits to shareholders is considered a key policy. Taking into
account future business development and the management environment, our basic policy is to provide stabledividends while aiming to enhance revenue capabilities and strengthen our corporate constitution throughample retained earnings.
Retained earnings are intended for investment in future business developments.
[Regarding the distribution of surplus for the current term]
The end-of-term surplus distribution, decided by the Board of Directors on April 9, 2024, is 8 yen per share(combined with the interim dividend for an annual total of 16 yen per share).
(5) System to ensure the appropriateness of operations
The Company has resolved a basic policy regarding systems to ensure the appropriateness of operationsin accordance with relevant laws and ordinances. The content at the end of this business year is as follows.
[Overview of the Board of Directors' Resolution]① Compliance Management System- Ensure that the duties of directors and employees of the Company and its subsidiaries are performedin accordance with laws, ordinances, and the articles of incorporation, and that everyone isthoroughly familiarized with the "U.S.M.H. Code of Conduct," which is set as a guideline for action.
- The management division will work with external experts such as lawyers and certified public
accountants to implement measures for compliance and thorough familiarization with laws andordinances and for education and risk management for the Company and its subsidiaries.
- The Internal Audit Department will conduct audits of the Company and its subsidiaries in cooperation
with the Company's corporate auditors and accounts auditors, independently and objectively, andreport regularly on the internal audit and internal control status to the "Management Committee."- In case of misconduct or similar issues within the Company or subsidiaries, “internal reporting
channels” are established at the Company and its subsidiaries where executives, employees, andbusiness partners can directly provide information, and this is made known to all employees of theCompany and its subsidiaries. The information reported is kept confidential in accordance with laws,
ordinances, and internal regulations, and no adverse treatment is given to the informant. Furthermore,- 48 -

a summary of the reports and the number of reports are presented to the "Management Committee."- The "U.S.M.H. Code of Conduct" dictates a resolute stance against anti-social forces that threaten theorder and safety of civic life, cutting off all relations.
② Information Preservation System- Information related to decisions made at the Board of Directors, Management Committee, and otherimportant meetings is stored and managed according to the document management regulations, anda system is in place to allow relevant parties to access this information.
- Information that must be managed as confidential according to the Companies Act, Financial
Instruments and Exchange Act, and other laws and ordinances, such as management information andpersonal information of customers and shareholders, is protected and managed according to the"Insider Trading Management Regulations," "Personal Information Protection Regulations," andother such regulations.
③ Risk Management System- The basic matters concerning risk management for the Company and its subsidiaries are stipulated inthe "Risk Management Regulations," and their thorough implementation is ensured.
- The Company has formulated a business continuity plan (BCP) assuming a major disaster (earthquake
directly beneath the capital) and regularly conducts training to enhance the effectiveness of the plan.
- We will work on building internal controls related to financial reporting (compliance with the "J-SOXAct"), including subsidiaries.
④ Efficient Execution of Duties System- To clarify the responsibilities associated with the execution of duties, the Company and its subsidiaries
have set the term of office for directors at one year.
- Significant matters related to the management of the Company and its subsidiaries are decided by theCompany's Board of Directors after deliberation by the Management Committee, from theperspectives of effectiveness and efficiency of duties.
- Duties based on decisions made by the Board of Directors and other bodies are delegated according
to "Duty Authority" and "Business Responsibilities," ensuring the maintenance and improvement ofan efficient and appropriate execution of duties system.
- We will promote organizational streamlining and the appropriate use of IT to enhance work efficiency.
⑤ System to Ensure the Appropriateness of Operations within the Corporate Group Consisting of theCompany and Its Subsidiaries- The Company has established "Affiliated Company Management Regulations" aimed at appropriately
managing affiliated companies, smoothly providing guidance and support to affiliated companies,and contributing to the stable growth, efficiency of management, and internal controls of the
U.S.M.H. Group.
- The Company mandates its subsidiaries, through the Affiliated Company Management Regulations,
to regularly report to the Company on business performance, financial conditions, and othersignificant management matters.
- Respecting the independence of subsidiaries while regularly receiving reports on their management
situations and discussing management policies and close cooperation between companies.
- Ensures close coordination with subsidiaries to promote efficient business execution by leveraging
management know-how and other resources effectively.
- The Internal Audit Department assists in auditing the establishment of the internal control system
within subsidiaries, conducts monitoring and necessary audits of subsidiaries, and verifies theappropriateness and effectiveness of their internal management and audit systems.
⑥ System for Employees Assisting the Corporate Auditor- Directors will place suitable personnel as dedicated employees to assist the corporate auditor in theirduties upon request.
- If the corporate auditor requests assistance for their duties from employees of the Internal Audit
Department, directors will command such assistance.
- Employees tasked with assisting the corporate auditor will follow the instructions of the corporate
auditor and have the authority to conduct investigations necessary for the audit.
⑦ Ensuring the Independence and Effectiveness of Instructions to Employees Assisting the Corporate- 49 -

Auditor- To ensure the proper performance of their duties, personnel considerations and changes involving
employees assisting the corporate auditor will be done with prior consent and in consideration of theopinions of the Audit and Supervisory Board.
- Employees assisting the corporate auditor will follow the command and instructions of the corporate
auditor, and the Company ensures that this is thoroughly communicated to directors and employees.
⑧ System for Directors and Employees to Report to the Corporate Auditor- Directors and employees of the Company, as well as those of subsidiaries, will report to the corporate
auditor on significant matters related to management and business operations, as well as the status
and results of business execution.
- Directors and employees of the Company and affiliated companies (hereafter referred to as "Group
executives and employees") will immediately report to the corporate auditor if they recognize thepotential occurrence of losses or compliance violations that could affect performance forecasts.
- Group executives and employees will report promptly and honestly on relevant matters whenrequested by the corporate auditor concerning business execution.
⑨ System to Ensure that Persons Reporting to the Corporate Auditor are not Treated Unfavorably for
Making Such Reports- The Company prohibits unfavorable treatment of directors and employees of the Company and its
subsidiaries who report to the corporate auditor based on the fact that they have made such reports,
and ensures thorough communication of this prohibition to directors and employees of the Company
and its subsidiaries.
⑩ Policies related to the advance payment or reimbursement of costs incurred in the execution of duties
by the corporate auditor- When the corporate auditor requests an advance payment of expenses based on Article 388 of theCompanies Act, the responsible department deliberates and, unless it is determined that the expenses
or liabilities are not necessary for the execution of the corporate auditor's duties, will promptly
comply with such requests.
⑪ Other systems to ensure effective auditing by the corporate auditor- The representative director and the corporate auditor will hold meetings as needed to facilitate mutualcommunication and exchange opinions.
- Directors will assist the corporate auditor in performing their duties by facilitating communicationand information collection and exchange with outside directors and directors of subsidiaries, among
others.
- Directors will invite the corporate auditor to attend meetings related to significant business execution
to ensure effective auditing.
- The Internal Audit Department will report to the full-time corporate auditor in a timely manner on theimplementation of internal audits at the Company and its subsidiaries and build a coordination
system for exchanging opinions and information to ensure the effectiveness of audits.
(6) Operational status of the system to ensure the appropriateness of business operations
The following is an overview of the operational status of the system to ensure the appropriateness ofbusiness operations during this business year.
① Compliance system- Ensure that the duties of directors and employees of the Company and its subsidiaries are performedin accordance with laws, ordinances, and the articles of incorporation, and that everyone isthoroughly familiarized with the "U.S.M.H. Code of Conduct," which is set as a guideline for action.
Furthermore, continuously conduct various training sessions aimed at enhancing complianceawareness and sharing our core philosophy, specifically targeting those in positions of responsibility.
In addition, the management department continues to collaborate with external experts such as
certified public accountants this business year, considering the importance of the impact on thereliability of financial reporting, to implement education on compliance with laws and ordinances
and thorough communication for management personnel of subsidiaries.
- The Company and its subsidiaries have expanded the provisions of the internal reporting system- 50 -

related to the Revised Whistleblower Protection Act enacted in June 2022, and through awarenesscampaigns using posters and training, they strive to improve the effectiveness and proper operationof the system.
- The Internal Audit Department will conduct audits of the Company and its subsidiaries in cooperation
with the Company's corporate auditors and accounts auditors, independently and objectively, andreport regularly on the internal audit and internal control status to the "Management Committee."- In case of misconduct or similar issues within the Company or its subsidiaries, “internal reporting
channels” are established at the Company and its subsidiaries where executives, employees, andbusiness partners can directly provide information. The Company makes this known among theexecutives and employees of the Company and its subsidiaries, reporting the summary and numberof reports to the “Management Committee.”- The "U.S.M.H. Code of Conduct" dictates a resolute stance against anti-social forces that threaten theorder and safety of civic life, cutting off all relations.
② Information Preservation System- As part of information security measures, the Company has established regulations aimed atpreventing the leakage of confidential company information, including personal information, andfurther strengthens the management and disposal of documents and data to strive for improved
information management and prevention of confidential information leakage.
- In this business year, we have conducted training to prevent email virus infections and the like, aiming
to raise individual awareness and enhance information security. In response to amendments to the
Act on the Protection of Personal Information, related departments are collaborating to examine
policy content to further enhance and strengthen our measures.
③ Risk Management System- The basic matters concerning risk management for the Company and its subsidiaries are stipulated inthe "Risk Management Regulations," and their thorough dissemination is ensured. To support these
initiatives, our Human Resources and General Affairs report significant risks from subsidiaries to
the Audit and Supervisory Board monthly, and as important risks arise, they are promptly reported
to the Management Committee and Board of Directors for swift resolution.
- The Company has formulated a business continuity plan (BCP) assuming a major disaster (earthquake
directly beneath the capital) and regularly conducts training to enhance the effectiveness of the plan.
- The Company has prepared an "Internal Control Evaluation Plan" related to financial reporting, which
also includes details on the internal controls of subsidiaries. The Internal Audit Department regularly
reports on the status of internal controls to the Management Committee.
④ Director's Execution of Duties System- Based on the Company’s core philosophy, our policy since the first Regular General Meeting of
Shareholders in May 2016 has been to ensure that directors contribute to the further development of
the entire Group, accurately understand the issues of their departments, collaborate with otherexecutives and employees to resolve problems, and possess insight into compliance with laws andordinances and corporate ethics. We have also increased the number of independent outside directors
by one to enhance these capabilities.
- The Board of Directors ensures the legality and adherence to the articles of incorporation in theexecution of duties by directors and holds regular meetings to enrich deliberations. Additionally,
directors participate in surveys conducted by third-party organizations to evaluate the effectivenessof the Board of Directors, share the findings within the board, create action plans from the identified
issues, and work to enhance effectiveness.
⑤ Subsidiary Management System- The Company’s Representative Director and President concurrently serves as a director for two
subsidiaries, Kasumi Co., Ltd. and MaxValu Kanto Co., Ltd., and attends their board meetings
regularly. Additionally, two of the Company’s Representative Director Vice Presidents and one
Director Vice President serve as Presidents of The Maruetsu, Inc., Kasumi Co., Ltd., and MaxValu
Kanto Co., Ltd., respectively, convening and holding board meetings regularly for these subsidiaries.
- In this business year, we have conducted online training sessions aimed at strengthening thesupervision and functionality of the internal control systems, focusing on compliance education,- 51 -

adherence to laws and ordinances, risk management systems, and internal reporting for directors andexecutive officers of all Group subsidiaries.
- The Internal Audit Department reports to the full-time corporate auditor in a timely manner on theimplementation of internal audits at the Company and its subsidiaries and build a coordination
system for exchanging opinions and information to ensure the effectiveness of audits. We have also
conducted business audits of subsidiaries in this business year, striving to enhance reliability.
⑥ System for Reporting to the Corporate Auditor and Ensuring Effective Auditing- Since the first Regular General Meeting of Shareholders in May 2016, we have enhanced the
independence and functionality of the Audit and Supervisory Board by adding one independent
outside corporate auditor who makes judgments from an independent and objective standpointaccording to their convictions.
- In this business year, five corporate auditors (including three outside corporate auditors), newly
appointed at the eighth Regular General Meeting of Shareholders, have been reported on theexecution and results of various projects formed based on the fiscal year policy by four department
heads and responsible parties of each department. Furthermore, these five corporate auditors(including three outside corporate auditors) participated in a survey conducted by a third party forthe effectiveness evaluation of the Board of Directors and have shared the identified issues.
- Directors invite corporate auditors to attend meetings related to significant business executions toensure the effectiveness of the audits. The representative director and the corporate auditors regularly
exchange opinions to facilitate mutual communication, and the directors assist in ensuring effective
communication and information exchange between the corporate auditors and outside directors, aswell as directors of subsidiaries, to support the performance of the corporate auditors' duties.
- In this business year, in addition to exchanging information with outside directors, we have held the“Group Audit and Supervisory Board Liaison Committee” to coordinate with the corporate auditors
and internal audit departments of subsidiaries, striving for audits of high effectiveness.

- 52 -

Consolidated financial statements- 53 -

Consolidated Balance Sheet(as of February 29, 2024)

Items(Assets)
Current assets
Cash and deposits
Accounts receivable-trade
Inventory assets
Accounts receivable-other
Other
Allowance for doubtful accounts
Fixed assets
Tangible fixed assets

Buildings and structures
Machinery, equipment, and vehicles
Tools, equipment, and fixtures
Land
Construction in progress
Other

Amoun
ts
74,70921,135375
17,03930,027
6,152△21
210,795
146,758
60,292

6,111
14,05455,364

10,705Investment securities
Deferred tax assets
Retirement benefit assets
Guarantee deposits

229
16,391
8,944
7,446
47,646
2,339
11,0172,915
30,313

Other
Allowance for doubtful accounts

1,104
△43

Intangible fixed assets

Goodwill
Other

Investments and other assets

Total assets

285,505(In millions of yen)

Items
(Liabilities)
Current liabilities
Notes payable and accounts
payableCurrent portion of long-termborrowings
Accrued income taxes, etc.
Reserve for bonuses
Reserve for store closure losses
Reserve for shareholder benefits
Other
Fixed liabilities
Long-term borrowings
Reserve for sublease losses
Reserve for store closure losses
Retirement benefit liabilities
Asset retirement obligations
Other
Total liabilities(Net assets)
Shareholders’ equity
CapitalCapital surplus
Retained earnings
Treasury stock
Other accumulated comprehensive
incomeValuation difference on other securities
Accumulated retirement benefit
adjustments
Stock acquisition rights
Total net assets
Total liabilities and net assets- 54 -

Amounts
82,657
48,671
5,300
2,462
2,254
295
387
23,28552,597
39,125
45
714
23
5,900
6,787
135,254
149,029
10,000104,325
38,226△3,522
1,000
△95
1,095
220
150,250
285,505

Consolidated Income Statement(From March 1, 2023 to February 29, 2024)(In millions of yen)
Items

Amounts

Net sales
Cost of sales
Gross profit
Operating revenue
Gross operating income
Selling, general, and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Investment gain on equity method
Subsidy income
Insurance money received
Other
Non-operating expenses
Interest expenses
Commissions paid
Restoration costs
Disaster losses
Other
Ordinary income
Extraordinary income
Gain on sale of investment securities
Gain on sale of shares of subsidiaries and affiliates
Compensation income
Extraordinary losses
Impairment losses
Provision of reserve for store closure losses
Store closure losses
Net income before income taxes
Corporate, resident, and business taxes
Income taxes-deferred
Net income
Net income attributable to owners of parent

690,498
492,146
198,351
16,159214,510
207,603
6,907
24
37
36
162
92
48
176
45
40
51
64
203
80
262
2,679
1,010
131
3,176
△530

- 55 -

401

379
6,929

545

3,820
3,654
2,646
1,008
1,008

Consolidated Statement of Changes in Shareholders’ Equity(From March 1, 2023 to February 29, 2024)(In millions of yen)

Shareholders’ equity
CapitalBalance at the beginning of
the current term
Changes during the term
Dividend of surplus
Net income attributableto owners of parent
Acquisition of treasury
stock
Disposal of treasury stock
Changes in items other thanshareholders’ equity
during the term (net)Total changes during theterm
Balance at the end of thecurrent term

Capital surplus

10,000104,323

Retainedearnings
39,272

Treasury stock

Total
shareholders’equity△3,574150,021△2,053△2,053

1,008

1,008

1

△1

△1

52

54

－

1

△1,04551△992

10,000104,325

38,226△3,522

149,029- 56 -

Balance at the beginning of
the current term
Changes during the term
Dividend of surplus

Other accumulated comprehensive income
Stock
Accumulated
Total of other
Valuationacquisition
retirement
accumulateddifference on
benefitcomprehensive rights
other securities
adjustments
income
15

△241

△226

Total net assets

226△2,053

Net income attributable toowners of parent

Acquisition of treasury
stock
Disposal of treasury
stock
Changes in items otherthan shareholders’ equity
during the term (net)Total changes during theterm
Balance at the end of thecurrent term

150,022

1,008
△1
54
△110

1,337

1,227

△6

1,221

△110

1,337

1,227

△6

228

△95

1,095

1,000

220

150,250- 57 -

Consolidated notes
1. Important matters that provide the basis for the preparation of consolidated financial statements(1) Matters related to the scope of consolidation
Number of consolidated subsidiaries
12
Name of consolidated subsidiaries
The Maruetsu, Inc., Kasumi Co., Ltd., MaxValu Kanto Co., Ltd.,
Maruetsu Fresh Foods Co., Ltd., Rose Corp.,
Kasumi Green Co., Ltd., Maruetsu Development Co., Ltd., Clover Shoji Co., Ltd.,
Food Quality Control Center Co., Ltd., Marco Co., Ltd., AsuBiz Support Co., Ltd.,and Kasumi Mirai Co., Ltd.
Kyoei A&I Co., Ltd. is no longer our consolidated subsidiary because we transferred all its
shares we had held.
(2) Matters related to the application of the equity method
Number of affiliated companies
3
Name of affiliated companies
Seibu Co., Ltd., Japan Logistics Future Education Center Co., Ltd., and SO Co., Ltd.ー(3) Matters related to the business year, etc. of consolidated subsidiaries
The settlement date of consolidated subsidiaries corresponds with the consolidated settlement date.
(4) Matters related to accounting policy① Important asset valuation standards and valuation methods
a. Securities
Other securities
Securities other than shares, etc. which do not have market prices
Market value method (Valuation differences are recognized as a component of shareholders’equity, and selling prices are calculated using the moving average method)
Shares, etc. which do not have market prices
Cost method based on the moving average method
b. Inventory assets
i．Merchandise
Mainly the cost method based on the retail method (Amounts valued in the Consolidated
Balance Sheet are calculated by devaluing the book value based on the decline inprofitability)
The last cost method is used for part of the merchandise, however.
ii．Stored goods
Last cost method② Depreciation method for important depreciable assets
a．Tangible fixed assets (excluding lease assets)
Straight line method
The service life of major assets is as listed below.
Buildings and structures
8-39 years
b. Intangible fixed assets (excluding lease assets)
Straight line method
For software we use internally, the straight line method based on the period of time during
which it can be used internally (five years) is used.
c. Lease assets
Lease assets involved in finance leases exempt from passage of title
The straight line method with the lease period as the service life and the residual value atzero (If there is an agreement on residual value guarantee in the lease contract, the amount ofresidual value guaranteed applies) is used.

- 58 -

③ Standards for recognition of significant allowances and reserves
a. Allowance for doubtful accounts
To prepare for losses incurred from bad debts, for general accounts receivable, we recognize
the amount of accounts receivable not expected to be collected based on the bad debt record
rate, and for particular accounts receivable such as those feared to become uncollectible, we
do so taking into consideration the collectability of each account.
b. Reserve for bonuses
To prepare for the payment of bonuses to employees, we recognize those of amounts
expected to be paid in the future which have to be done so during the current consolidated
fiscal year.
c. Reserve for store closure losses
To prepare for losses incurred from store closures, we recognize the expected amount oflosses associated with store closures such as reasonably expected penalties for cancellations
made halfway through contracts.
d. Reserve for shareholder benefits
To prepare for the defraying of expenses based on the shareholder benefit program, werecognize the amount of benefits expected at the end of the current consolidated fiscal
year to be used in the future, based on the past record of use of the program.
e. Reserve for sublease losses
To prepare for losses incurred from store closures during the rest of the term of lease contracts,
we recognize the amount obtained by deducting the expected total amount of rent income
through subleases from the total amount of rents and other expenses we are required to pay.
Standards
for recognition of revenues and expenses④
The U.S.M.H. Group is mainly engaged in supermarket business centered on food. Since wedetermine that in this business, we fulfill our duty we should perform to customers when we deliver
merchandise to them, we recognize revenues when we do so.
If we consider that the Group acts as an agency in merchandise sales, we recognize as revenue the net
amount of sales obtained by deducting the amount paid to suppliers from the total amount ofcompensation received by customers.

- 59 -

⑤ Accounting method for retirement benefitsa. How to attribute the period for the expected amount of retirement benefits
When retirement benefit obligations are calculated, the method to attribute the expectedamount of retirement benefits to the period up to the end of the current consolidated fiscal
year is based on the benefit calculation standards.
b. How to treat mathematical calculation differences and past service costs
Differences in mathematical calculations are distributed using the straight line method basedon a certain number of years (ten years) within the average remaining service period of
employees in each consolidated fiscal year when such differences arise, and the result thus
obtained is treated as expenses from the consolidated fiscal year following the one when suchdifferences arise.
Past service costs are treated as expenses using the straight line method based on a certain
number of years (ten years) within the average remaining service period of employees whensuch costs arise.
Unrecognized mathematical calculation differences and unrecognized past service costs arerecognized as part of the accumulated adjustments related to retirement benefits in the otheraccumulated comprehensive income in the section of net assets after tax effect adjustments.
⑥ Goodwill amortization method and amortization period
Goodwill is amortized equally over 20 years.
⑦ Other important matters to prepare consolidated financial statements
Amounts are indicated by discarding fractions less than one million yen.

- 60 -

2. Notes on changes in presentation methods
Consolidated Income Statement
Restoration costs included in “Other” of “Non-operating expenses” in the previous consolidated fiscal
year are recognized as a separate item in the current consolidated fiscal year and thereafter because they
have gained importance.
Restoration costs included in “Other” of “Non-operating expenses” in the previous consolidated fiscal
year were eleven million yen.
3. Notes on changes in accounting estimatesThose of items recognized in the current consolidated fiscal year based on accounting estimates which
may have significant effects on consolidated financial statements in the following consolidated fiscal year
are as listed below.
Impairment of fixed assets(1) Amounts recognized in the current consolidated fiscal year
Tangible fixed assets
146,758 million yen
Impairment loss
2,656 million yen(2) Information on important accounting estimates
If, in particular, the recoverable amount of stores’ fixed assets is smaller than their book value, thebook value is decreased to the recoverable amount, and the decrease is considered as impairment loss andrecognized as extraordinary loss.
When the recoverable amount is calculated, future cash flows are estimated using as major assumptions
the actual operating income and loss of each store and the company in the current consolidated fiscal year
as well as increases and decreases in sales, cost rates, personnel expenses, and other various expenses
expected when measures are taken in the future.
If amounts that actually arise due to unexpected changes such as changes in the competitiveenvironment that surrounds stores and trends in consumer spending differ from these estimates, newimpairment losses may arise in the following consolidated fiscal year.

- 61 -

4. Notes on the Consolidated Balance Sheet(1) Accumulated depreciation of tangible fixed assets
184,711 million yen(2) Assets put up as security and obligations on security① Assets put up as security
Cash and deposits
1 million yen
Buildings and structures
1,466 million yen
Land2,229 million yen
Total
3,696 million yen
Obligations
related
to
the
above
②
Bills payable and accounts payable
1 million yen
Other (deposits received)
235 million yen
Total
237 million yen③ Other assets deposited in accordance with the Real Estate Brokerage Act
Guarantee deposits
10 million yen(3) Guarantee obligations
Guarantee for the purchasing debts of affiliated companies
21 million yen
5. Notes on the Consolidated Statement of Changes in Shareholders’ Equity, etc.
(1) Matters related to the total number of shares issued
Common131,681,356 sharesshares(2) Matters related to dividends of surplus① Dividends paid
Resolution
Board ofDirectors,
April 11,
2023
Board ofDirectors,
October 10,
2023

Type ofshares

Source ofdividends

Total
dividends (inmillions ofyen)

Dividend pershare (yen)Record date

Effective dateCommonsharesRetainedearnings

1,026

8.00

February 28, 2023

May 2, 2023

CommonsharesRetainedearnings

1,026

8.00

August 31, 2023

October 16, 2023

② Dividends whose record date belongs to the current consolidated fiscal year but whose effective datebelongs to the following consolidated fiscal year are as listed below.
Resolution

Type ofshares

Source ofdividends

Dividend pershare (yen)Record date

Effective date

Board ofDirectors,
April 9, 2024

Total dividends(in millions ofyen)

CommonsharesRetainedearnings

1,026

8.00

February 29, 2024

May 9, 2024

(3) Type and number of shares for which stock acquisition rights were granted at the end of the current
consolidated fiscal year (excluding stock acquisition rights which have not seen the arrival of the first dayof the period during which they can be exercised)
Common215,200 sharesshares- 62 -

6. Notes on financial instruments(1) Matters related to the status of financial instruments① Policy for working on financial instruments
The U.S.M.H. Group manages its funds using short-term, highly safe deposits, etc. It procures working
and other funds necessary for capital investments and other purposes mainly through borrowings frombanks.
② Details of financial instruments and their risks as well as the risk management system
Accounts receivable-trade and accounts receivable-other constitute short-term trade claims for business
partners. Guarantee deposits are paid chiefly to lease real estate for stores. Accounts receivable-trade,
accounts receivable-other, and guarantee deposits are exposed to the credit risks of business partners.
We have put in place a system to analyze concerns about collectability due to worsening financial
conditions and other factors early by monitoring the status of business partners concerning the credit risksof accounts receivable-trade, accounts receivable-other, and guarantee deposits.
Of the investment securities, shares consist mainly of shares in businesses with which we have business
relationships, and listed shares are exposed to risks of fluctuation in market prices. Unlisted shares are
exposed to the credit risks of their issuers. Risks involved in shares are managed by analyzing market prices
and the financial condition of their issuers periodically.
Bills payable and accounts payable constitute short-term trade claims for suppliers.
Of the borrowings, short-term borrowings consist mainly of funds procured chiefly for business
transactions, and long-term ones comprise funds procured primarily for capital investments. Borrowings
with variable interest rates are exposed to risks of fluctuations in interest rate.
Bills payable, accounts payable, and borrowings are exposed to liquidity risks (the risk of becoming
unable to pay on the day of payment), but the U.S.M.H. Group manages them using methods such as the
preparation by each company of monthly fund management plans.
③ Supplementary explanations about matters related to the market prices, etc. of financial instruments
In addition to prices based on market prices, the market prices of financial instruments include
reasonably calculated prices if market prices are not available. Variable factors are included in thecalculation of such prices, and therefore, such prices may fluctuate depending on the different priorconditions and other factors used.

- 63 -

(2) Matters related to the market prices, etc. of financial instruments
The amounts recognized in the Consolidated Balance Sheet, market prices, and differences between the
two are as listed below. Shares and other instruments without market prices are not in the table below(Please see the notes). Notes are omitted for cash, and they are also omitted for deposits, accounts
receivable-trade, and accounts receivable-other, bills payable and accounts payable, short-term borrowings,
and accrued corporate taxes, etc. because their market prices are very close to their book value as they aresettled in a short period of time.
(In millions of yen)Amounts
recognized in theMarket prices
Differences
Consolidated
Balance Sheet① Investment securities
②

975

－

30,30429,054△1,25031,28030,030△1,25044,42543,495△929

44,42543,495△929

Other securities

975

Guarantee deposits

30,313

Allowance for doubtful accounts (*1)△8

Total assets
Long-term borrowings (*2)
Total liabilities(*1) The allowance for doubtful accounts provided for guarantee deposits is deducted.
(*2) The current portion of long-term borrowings is included.

- 64 -

(Note) Shares, etc. without market prices(In millions of yen)Amounts recognized in the Consolidated Balance
Sheet
210

Category
Shares in affiliated companies
Unlisted shares

1,153

These shares are not included in “Other securities” in the above table.
(3) Matters related to the breakdown, etc. of financial instruments by the appropriate category of market prices
The market prices of financial instruments are classified into the three levels specified below according
to the observability and importance of inputs used to calculate them.
Market Price Level 1: Market price calculated based on (unadjusted) market prices in the active market
for the same assets or liabilities
Market Price Level 2: Market price calculated using directly or indirectly observable inputs other thanLevel 1 inputs
Market Price Level 3: Market price calculated using important yet unobservable inputs
If two or more inputs that may have significant effects on the calculation of market prices are used,market prices are classified into that of levels associated with such inputs which the lowest priority isgiven to in the calculation of market prices.
①

Financial instruments recognized in market price in the Consolidated Balance Sheet
Category

Market prices (in millions of yen)
Level 1

Level 2

Level 3

Total

Investment securities
Other securities
Shares975

Total assets

975

②

－

－

－

975

－

975

Financial instruments other than those recognized in market price in the Consolidated Balance Sheet
Category

Guarantee deposits

Market prices (in millions of yen)
Level 1

Level 2－

29,054

Level 1

Total－

29,054

Total assets
29,05429,054－－Long-term
43,49543,495－－borrowings
Total liabilities
43,49543,495－－(Note) Explanations about the valuation method used to calculate market prices and inputs used to calculatemarket prices
AssetsInvestment securities
Listed shares are valued using market prices. Since listed shares are traded in active markets, theirmarket prices are classified into Level 1.
Guarantee deposits
The market price of guarantee deposits is calculated using the price obtained by deducting the estimatedamount of accounts that become irrecoverable from the present value discounted by the risk-free ratethat corresponds to the future cash flow calculated based on the term of contract, and the market prices
thus obtained are classified into Level 2.

- 65 -

Liabilities
Long-term borrowings
Long-term borrowings are based on fixed interest rates, and the total amount of principals and interest
divided into certain periods of time is calculated using the present value that is discounted by the interest
rate obtained by adding credit risks to the risk-free rate. The market prices thus obtained are classified
into Level 2.

- 66 -

7. Note on real estate such as leases(1) Matters related to the status of real estate such as leases
Some of the subsidiaries own commercial facilities, etc. for rent in the capital area.
Since some of such facilities are used by some of the consolidated subsidiaries in the U.S.M.H. Group,
they are recognized as real estate that includes portions used as real estate such as leases.
Rent revenues from such real estate during the term ended February 2024 were 1,998 million yen (rentrevenues recognized as operating revenues and major rent expenses recognized as selling, general, andadministrative expenses), and impairment losses were 219 million yen (recognized as extraordinary loss).
(2) Matters related to the market prices, etc. of real estate such as leases(In millions of yen)Amounts recognized in the Consolidated Balance Sheet
Balance at the
Increases/decreas
Balance at the end
beginning of thees during theof the current
current
current
consolidated
consolidated
consolidated
fiscal year
fiscal year
fiscal year

Market prices atthe end of thecurrent
consolidated
fiscal year

Real estate such as
12,367
12,366
10,338△1leasesReal estate that
includes portions
10,2609,696
10,425△564
used as real estatesuch as leases(Notes)1. The amounts recognized in the Consolidated Balance Sheet represent the amount obtained bydeducting the accumulated depreciation expenses and accumulated impairment losses from theacquisition prices．
2. Major increases during the current consolidated fiscal year include 349 million yen for theacquisition of real estate and two million yen for changes of use of real estate such as leases, andmajor decreases include 699 million yen for depreciation expenses and 219 million yen for
impairment losses.
3. The market prices at the current consolidated fiscal year represent the amounts calculated by us
mainly based on the Japan Real Estate Appraisal Standards (including those adjusted using
indicators, etc.) or those calculated by obtaining appraisal reports from appraisal agencies.

- 67 -

8. Notes on revenue recognition(1) Information on the dissolution of revenues arising from contracts with customers
The U.S.M.H. Group consists of a single segment that is engaged in supermarket business, and theinformation on the dissolution of revenues arising from contracts with major customers is as listed below.
(In millions of yen)
Current consolidated fiscal year

Category
Sale of merchandise (sales)

690,498

Other (operating revenue)

5,720

Total
696,219(Note) In the current consolidated fiscal year, revenues other than those arising from contracts with customers
which were included in the operating revenues in the Consolidated Income Statement were 10,438 million yen.
(2) Information that provides the basis for the understanding of revenues
The sale of merchandise (sales) consists mainly of the sale of merchandise such as food, daily necessities,
and other items at supermarkets. Determining that we fulfill our performance obligations when we deliver
merchandise to customers, we recognize these revenues when we do so. In general, we collect payments
for merchandise within one month, mainly at the time of merchandise delivery.
“Other (operating revenue)” mainly comprises revenues from commissions associated with purchasing
for internal consumption. Determining that performance obligations are fulfilled according to use, we
recognize these revenues when services are provided. In general, we collect payments within one month inaccordance with contracts with business partners.
(3) Information to understand amounts in the current consolidated fiscal year and the following consolidated
fiscal year and thereafter① Balance of contract liabilities, etc.
The balance of contract liabilities arising from contracts with customers at the beginning and end of theterm is as listed below.
(In millions of yen)
Current consolidated fiscal year
Balance at the beginning of the term

1,862

Balance at the end of the term
2,910
In the Consolidated Balance Sheet, contract liabilities are recognized as part of the “Other current
liabilities.” Contract liabilities consist mainly of the balance of points and gift certificates issued by us forwhich we have not fulfilled our performance obligations by the end of the term.
Those of revenues recognized in the current consolidated fiscal year which were included in thebalance of contract liabilities at the beginning of the term were 789 million yen.
② Transaction prices distributed to residual performance obligations
At the end of the current consolidated fiscal year, the total transaction prices distributed to residual
performance obligations associated with gift certificates, etc. were 1,758 million yen. We expect torecognize revenues for these residual performance obligations during the next one to ten years as gift
certificates, etc. are used.
The reporting of contracts whose initial expected term is one year or less is omitted by applying practical
expedients.
9. Notes on per-share information(1) Net assets per share(2) Net income per share(3) Diluted net income per share

1,168.73 yen
7.85 yen
7.84 yen

10. Notes on important subsequent events
Not applicable- 68 -

Financial statements
Balance Sheet(as of February 29, 2024)

Items(Assets)
Current assets
Cash and deposits
Accounts receivable-trade

Amounts(In millions of yen)

Items

7,898
2,106
4

Inventory assets
Other
Fixed assets(Tangible fixed assets)
Buildings
Structures
Machierby and equipment
VehiclesTools, equipment, andfixtures
Construction in progress(Intangible fixed assets)
Trademark rights
Software
Software in progress
Other

30
5,755
152,581
1,287
503
19
641
5
78

(Investments and other assets)
Shares in affiliatedcompanies
Long-term loans foraffiliated companies
Other

147,650
127,126

Total assets

160,479

38
3,643
3
3,257
382
0

(Liabilities)
Current liabilities
Current portion of long-termborrowings
Reserve for shareholder
benefits
Other
Fixed liabilities
Long-term borrowings
Asset retirement obligations
Total liabilities(Net assets)
Shareholders’ equity
CapitalAmounts
2,436
300
96
2,040
31,272
31,25022
33,709126,549
10,000Capital surplus
Capital reserve金Other capital surplus
Retained earnings
Other retained earnings
Retained earnings carriedforwardTreasury stock
Stock acquisition rights

117,3152,500
114,815
2,756
2,756
2,756
△3,522220

Total net assets
Total liabilities and net assets

126,770
160,479

20,300223- 69 -

Income Statement(From March 1, 2023 to February 29, 2024)(In millions of yen)

Items

Amounts

Operating revenue
Operating expenses
Cost of sales
Selling, general, and administrative expenses
Operating income
Non-operating income
Interest income
Other
Non-operating expenses
Interest expenses
Other
Ordinary income
Net income before tax
Corporate, resident, and business taxes
Net income

7,589
337
4,579

70
5
109
52

- 70 -

4,917
2,672

75

161
2,586
2,586
6
2,580

Statement of Changes in Shareholders’ Equity(From March 1, 2023 to February 29, 2024)(In millions of yen)

Shareholders’ equity
Capital surplus

CapitalBalance at the beginning of
the current term
Changes during the term
Dividend of surplus
Net income
Acquisition of treasury
stock
Disposal of treasury stock
Changes in items otherthan shareholders’ equity
during the term (net)Total changes during theterm
Balance at the end of thecurrent term

Capital surplus

10,000

Other capital surplus

2,500

Total capitalsuyplus114,813

117,313

1

1

－

－

1

1

10,0002,500

114,815

117,315- 71 -

Balance at the beginning of
the current term
Changes during the term
Dividend of surplus
Net income
Acquisition of treasury
stock
Disposal of treasury stock
Changes in items otherthan shareholders’ equity
during the term (net)Total changes during theterm
Balance at the end of thecurrent term

Shareholders’ equity
Retained earnings
Other retained
Treasury
earnings
Total retainedstockearnings
Retained earnings
carried forward
2,229

2,229

△2,0532,580△2,053
2,580△3,574Stock
Total
acquisition
shareholde
rightsrs’ equity
125,969

226

Total net
assets126,196△2,0532,580△2,053
2,580

△1

△1

△1

52

54

54
△6

△6

526

526

51

580

△6

574

2,756

2,756

△3,522

126,549220

126,770- 72 -

Notes to non-consolidated financial statements
1. Notes on matters related to important accounting policy(1) Asset valuation standards and methods
Shares in affiliated companies
Cost method based on the moving average method(2) Depreciation methods for fixed assets① Tangible fixed assets
Straight line method
The service life of major assets is as listed below.
Buildings
8-31 years
Machinery and equipment
10-12 years
Tools, equipment, and fixtures
3-20 years② Intangible fixed assets
Straight line method
The depreciation of software used internally is based on the period during which it can be usedinternally (five years).
(3) Valuation standards and methods for inventory assets
The valuation standards are based on the cost method (depreciating book value according to decline inprofitability).
① Products and work in progress
General average method② Raw materials and stored goods
Last purchase cost method(4) Standards for recognizing reserves
Reserve for shareholder benefits
To prepare for the incurrence of expenses based on the shareholder benefit program, we recognize
those of amounts expected to be used in the future at the end of the current fiscal year which weshould pay, based on the results of use of the program.
(5) Standards for recognizing revenues and expenses
Revenues arising from contracts between the U.S.M.H. Group, a holding company, and customers consist
mainly of management fees from its subsidiaries. The obligation we should perform is to provide services
on contract to subsidiaries in accordance with the content of contracts, and we recognize management
fees as revenues according to the progress in the performance of the obligation.
(6) Other important matters that provide the basis for the preparation of financial statements
Amounts are indicated by discarding fractions less than one million yen
2. Notes on the Balance Sheet(1) Accumulated depreciation of tangible fixed assets(2) Short-term monetary claims for affiliated companies(3) Short-term monetary liabilities for affiliated companies(4) Monetary liabilities for directors and corporate auditors
3. Notes on the Income Statement
Transactions with affiliated companies① Business transactions
Operating revenue
Dividend income
Management fees
Service revenue
Sales
Operating expenses

239 million yen
5,056 million yen
503 million yen
6 million yen

3,984 million yen
1,955 million yen
1,467 million yen
78 million yen- 73 -

Selling, general, and administrative expenses
Cost of sales② Transactions other than business transactions
4. Notes on the Statement of Changes in Shareholders’ Equity
Matters related to the number of treasury stock
Common shares

3,311,059 shares- 74 -

903 million yen
5 million yen
71 million yen

5. Notes on tax effect accounting
Breakdown of deferred tax assets and deferred tax liabilities by cause
Deferred tax assets
Losses carried forward
1,515 million yen
Stock compensation expenses
33 million yen
Shares in affiliated companies
17 million yen
Other
1 million yen
Subtotal of deferred tax assets
1,567 million yen
Valuation reserve for tax losses carried forward△1,515 million yen
Valuation reserve for the total of deductible temporary
million yen△52
differences, etc.
Total deferred tax assets－ million yen
6. Notes on transactions with the parties concerned
Parent company of the U.S.M.H. GroupType

Parentcompany

Percentage
of votingName ofrights,etc.
companies, etc.
owned
(Note)

Aeon Co., Ltd.

Owned bythe parent
Direct:53.7％
Indirect:52.4％

Relationsh
ip with thepersons
concerned

Holding
offices
concurrent
ly

Details oftransactions

Amountoftransacti
ons

Sales
commissions

782

Deposit offunds

10,000Recovery of
funds

7,000

(In millions of yen)
Balanceat theItem
end ofthe term
Other(current
liabilities)

430

Other
(current
liabilities)

3,000

Terms and conditions of transactions and policy to decide them
(Note) Aeon Co., Ltd. holds 100% of voting rights at Aeon Market Investment Inc., which holds 52.4% of
voting rights at the U.S.M.H. Group (The capital contribution ratio is 51.0%).

- 75 -

Subsidiaries of the U.S.M.H. GroupType

Subsidiary

Subsidiary

Subsidiary

Name ofcompanies, etc.

The Maruetsu,
Inc.

Kasumi Co.,
Ltd.

Percentage
of votingrights, etc.
owned

Relationshipwith thepersons
concerned

Business
administratio
Ownershipn
Direct: 100.0％
Holding
offices
concurrently

Business
administratio
Ownershipn
Direct: 100.0％
Holding
offices
concurrently

Business
administratio
MaxValu Kanto
Ownershipn
Direct: 100.0％
Co., Ltd.
Holding
offices
concurrently

Details oftransactions

AmountoftransactionsManagement
fee

999

Loan of funds(Note)

7,500

Receipt ofinterest

44

Management
fee

850

Loan of funds(Note)

2,000

Receipt ofinterest

11

Loan of funds(Note)

6,500

Collection of
funds

7,050

(In millions of yen)
Balanceat the end
Itemof theterm
Other(current274
liabilities)
Long-termloans for15,000affiliatedcompanies－
Other(current
liabilities)
Long-termloans foraffiliatedcompanies－

Other(current
liabilities)

Loan of funds(Note)－ Long-term

Collection of
funds

200

Receipt ofinterest

14loans foraffiliatedcompanies
Other(current
liabilities)

－
233

4,000
－

1,300

1,300

1

Terms and conditions of transactions and policy to decide them
(Note) The loan of funds is decided taking market interest rates into consideration.
7. Notes on revenue recognition
Information that provides the basis for the understanding of revenue
The information that provides the basis for the understanding of revenue is as described in (5) “Standards
for recognizing revenues and expenses in the “1. Notes on matters related to important accounting policy.”
8. Notes on per-share information(1) Net assets per share(2) Net income per share(3) Diluted net income per share

985.82 yen
20.10 yen
20.7 yen

9. Notes on important subsequent events
Not applicable- 76 -