Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.
Securities Code: 9627
July 9, 2024
Start date of measures for electronic provision: July 2, 2024
To Our Shareholders
Kiichi Otani
President and Representative Director
AIN HOLDINGS INC.
5-2-4-30, Higashisapporo, Shiroishi-ku, Sapporo

Notice of Convocation of
the 55th Ordinary General Meeting of Shareholders
You are cordially invited to attend the 55th Ordinary General Meeting of Shareholders of AIN HOLDINGS INC. (hereinafter the“Company”) to be held as described below.
In convening this General Meeting of Shareholders, the Company has taken measures for providing information that constitutes thecontent of reference documents for the general meeting of shareholders, etc. (matters for which measures for providing information inelectronic format are to be taken) in electronic format, and has posted the information on the Company’s website. Please access thewebsite below to view the information.
The Company’s website:
https://www.ainj.co.jp/corporate/english/ir-library.html(Access the above website and view the documents listed under FY4/24)
In addition to the Company’s website, the matters subject to measures for electronic provision are also posted on each of the following
websites.
Website for posted informational materials for the general meeting of shareholders:
https://d.sokai.jp/9627/teiji/ (in Japanese)
Tokyo Stock Exchange website (Listed Company Search):https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show(Access the TSE website by using the internet address shown above, enter “AIN HOLDINGS” in “Issue name (company name)” or
the Company’s securities code “9627” in “Code,” and click “Search.” Then, click “Basic information” and select “Documents for
public inspection/PR information.” Under “Filed information available for public inspection,” click “Click here for access” under“[Notice of General Shareholders Meeting /Informational Materials for a General Shareholders Meeting].”)In the event that you do not attend the meeting, you may exercise your voting rights either via the Internet or in writing (by mail). Please
review the Reference Documents for the General Meeting of Shareholders and refer to “Information on Exercise of Voting Rights” onpages 3 to 4 to exercise your voting rights.

-1-1. Date and Time:
2. Location:

10:00 a.m., Tuesday, July 30, 2024 (Reception will open at 9:00 a.m.)
Sapporo Grand Hotel, “Grand Hall” (2nd Floor)

Nishi 4, Kita 1, Chuo-ku, Sapporo
3. Agenda for the Meeting
Matters to be Reported:(1) The Business Report, the Consolidated Financial Statements, and the report on results of the audits by the Accounting
Auditor and the Board of Corporate Auditors regarding the Consolidated Financial Statements for the 55th business term(from May 1, 2023 to April 30, 2024)(2) The Non-Consolidated Financial Statements for the 55th business term (from May 1, 2023 to April 30, 2024)
Matters to be Resolved:(Company Proposals)
Proposal No. 1:

Distribution of Surplus

Proposal No. 2:
Proposal No. 3:

Election of Eleven (11) Directors
Election of Three (3) Corporate Auditors

Proposal No. 4:
Partial Amendment to the Articles of Incorporation(Shareholder Proposals)
Proposal No. 5:
Proposal No. 6:

Dismissal of Two (2) Directors
Election of Four (4) Directors

Proposal No. 7:
Proposal No. 8:

Determination of the fixed remuneration amount paid to each Outside Director
Determination of Remuneration for Granting Restricted Shares to Outside Directors

4. Information on Exercise of Voting Rights
・ If you exercise your voting rights more than once via the Internet, only the voting rights you exercise last will be valid.
・ If you exercise your voting rights both via the Internet and in writing (by mail), only the voting rights you exercise via theInternet will be valid regardless of the date and time the written form was received by the Company.
・ If you exercise your voting rights in writing (by mail) and do not indicate your approval or disapproval of the proposals on
the Voting Rights Exercise Form, it will be treated as an indication of your approval for the Company proposals anddisapproval of the shareholder proposals.
・ Please refer to “Information on Exercise of Voting Rights” below as well.
 If attending the meeting in person, please present the Voting Rights Exercise Form at the reception desk.
 If you will be exercising your voting rights by proxy, you may appoint one other shareholder with voting rights as proxy to attend
the General Meeting of Shareholders.
 If revisions to the matters subject to measures for electronic provision arise, a notice of the revisions and the details of the items
before and after the revisions will be posted on the Company’s aforementioned website, the website for posted informational materials
for the general meeting of shareholders and the TSE website.
 Paper-based documents stating matters subject to measures for electronic provision are sent to shareholders who have requested thedelivery of paper-based documents, however those documents do not include the following matters in accordance with the provisionsof laws and regulations and Article 16 of the Company’s Articles of Incorporation.
(i) “Main business activities,” “Main offices,” “Status of employees,” “Status of main lenders,” “Other material matters regarding
the current status of the Company Group,” “Status of accounting auditor,” “System for ensuring the appropriateness of businessand the status of operation of said system,” “Basic policy regarding control of the Company,” and “Policy regarding decision ofdividends of surplus, etc.,” in the Business Report(ii) “Consolidated statements of changes in shareholders’ equity” and “Notes to consolidated financial statements” in theConsolidated Financial Statements(iii) “Balance sheet,” “Statement of income,” “Non-consolidated statements of changes in shareholders’ equity,” and “Notes to nonconsolidated financial statements” in the Non-Consolidated Financial Statements(iv) “Accounting audit report on the consolidated financial statements,” “Accounting audit report on the non-consolidated financial
statements,” and “Audit Report by Board of Corporate Auditors” in the Audit Report
Accordingly, Business Report, and Consolidated Financial Statements included in these paper-based documents are part of thesubject documents that were audited by the Accounting Auditor in preparing the Accounting Auditor’s Report and by the
Corporate Auditors in preparing their Audit Report.
 In order to further deepen communication with shareholders, the Company has introduced “Smart Convocation,” which enables
shareholders to easily view key content and related information of Reference Documents for the General Meeting of Shareholders,etc., and exercise their voting rights via smartphones and other devices.
https://p.sokai.jp/9627/ (in Japanese)-2-

Information on Exercise of Voting Rights
Exercise of voting rights at the Company’s General Meeting of Shareholders is shareholders’ important right.
Please review the Reference Documents for the General Meeting of Shareholders and exercise your voting rights.
Shareholders have submitted shareholder proposals for this General Meeting of Shareholders; however, the Board of Directors of theCompany is opposed to Proposal No. 5 through to Proposal No. 8, which are proposals made by shareholders.
We ask that all shareholders who support the opinion of the Board of Directors of the Company exercise their voting rights by voting“approval” for the Company proposals and “disapproval” for the shareholder proposals.
Please note that more detailed information on the opinion of the Board of Directors of the Company can be found on pages 29 to 46 of
the “Reference Documents for the General Meeting of Shareholders.”
You may exercise your voting rights by one of the following three methods.

If you are attending themeeting

Exercise of voting rights via
the Internet

Exercise of voting rights inwriting (by mail)Please submit the Voting Rights Exercise
Form at the reception.

Please enter your approval or disapprovalof the proposals by following the
instructions on page 4.

Please indicate your approval ordisapproval of the proposals on the Voting
Rights Exercise Form and return it to theCompany.

Date and Time:

Deadline for exercise of voting rights via
the Internet

Deadline for exercise of voting rights by
mail

10:00 a.m., Tuesday, July 30,
2024 (Reception will open at
9:00 a.m.)

All data entry to be completed
no later than 6:00 p.m.,
Monday, July 29, 2024.

To be received no later than
6:00 p.m., Monday, July 29,
2024.

Guidance for the Filling in of the Voting Rights Exercise Form
Resolutions will be passed on Company proposals and shareholder proposals at this General Meeting of Shareholders.
Shareholders who agree with the opinions of the Company’s Board of Directors are requested to exercise their voting rights by voting“approval” for the Company proposals and “disapproval” for the shareholder proposals.
・・

If you exercise your voting rights both via the Internet and in writing (by mail), only the voting rights you exercise via the Internet
will be valid, regardless of the date and time the written form was received by the Company. If you exercise your voting rights
more than once via the Internet, only the voting rights you exercise last will be valid.
If you exercise your voting rights in writing (by mail) and do not indicate your approval or disapproval of the proposals on the
Voting Rights Exercise Form, it will be treated as an indication of your approval for the Company proposals and disapproval of
the shareholder proposals.

-3-

Guidance for the Exercise of Voting Rights via the Internet
Scanning the login QR CodeEntering voting rights exercise code and password“Smart Vote”
You can simply log in to the voting website without
entering your voting rights exercise code and password.

Voting website:

1 Please scan the QR Code printed on the lower righthand side of the Voting Rights Exercise Form.
* “QR Code” is a registered trademark of DENSO WAVE
INCORPORATED.
2 Indicate your approval or disapproval by following the
instructions on the screen.

1 Please access the website for the exercise of voting
rights.
2 Enter the voting rights exercise code printed on the
Voting Rights Exercise Form.
3 Enter the password printed on the Voting Rights
Exercise Form.
4 Indicate your approval or disapproval by following the
instructions on the screen.

Please note that exercising voting rights by using “Smart
Vote®” method is available only once.
If you need to make a correction to the content of yourvote after you have exercised your voting rights, please
access the website for personal computer and log in byentering your voting rights exercise code and password
printed on the Voting Rights Exercise Form, and exercise
your voting rights again.
* You can access the website for personal computer by
scanning the QR Code again.
In case you need instructions for how to operate
your personal computer, smartphone or mobile
phone in order to exercise your voting rights via
the Internet, please contact:

https://soukai.mizuho-tb.co.jp/ (inJapanese)

Mizuho Trust & Banking Co., Ltd. Stock Transfer Agency
Internet Help Dial

0120-768-524 (toll free only from Japan)(9:00 a.m. – 9:00 p.m. except New Year holidays)

Institutional investors may make use of the Electronic Voting Platform for institutional investors operated by ICJ, Inc.

-4-

Reference Documents for the General Meeting of Shareholders<Company Proposals (from Proposal No. 1 to Proposal No. 4)>
Proposal No. 1:
Distribution of Surplus
As we consider returning profits to shareholders to be one of the most important management issues, and taking into consideration futurebusiness development while maintaining stable dividends, the Company proposes to pay a year-end dividend for the fiscal year as
follows:
Type of dividend property
To be paid in cash.
Allotment of dividend property and their aggregate amount¥80 per common share of the Company
Effective date of dividends of surplus

Total payment: ¥2,826,249,680

July 31, 2024

-5-

Proposal No. 2:

Election of Eleven (11) Directors

At the conclusion of this General Meeting of Shareholders, the terms of office of all 11 Directors will expire. Therefore, taking into
account the findings of the Nomination and Remuneration Committee, the Company proposes the election of 11 Directors as theCompany’s proposal for the number of internal Directors to be reduced by one and the number of outside Directors to be increased by
one to further enhance the supervisory function.
The candidates for Director are as follows:

Candidate No.

Name

GenderCurrent positions and responsibilities in the Company

1

Kiichi Otani

Male

2

Shoichi Shudo

3

Toshihide
Mizushima

4

Miya Oishi

5

Rieko Kimei

6

Nobuyuki Takakura

7

Noriko Endo

Female Outside Director

8

Hideki Kuriyama

Male

9

Mariko Watahiki

Female –10

Nobumichi Hattori

Male

–

11

Shigeki Kimura

Male

–

President and Representative Director

Representative Senior Managing Director
in charge of Store Development and Dispensing Pharmacy
Operations Management
Representative Senior Managing Director
Male in charge of Cosmetic and Drug Store Operations
Management, Operational Support and Digital Promotion
Representative Senior Managing Director
Femalein charge of External Affairs
DirectorFemaleDivision Manager of Personnel
DirectorMalein charge of Risk Management
Male

Reelection
Reelection

12/12(100%)

Reelection

12/12(100%)

Reelection
Reelection
Reelection
Reelection
OutsideIndependent
Reelection
OutsideIndependent
New election
OutsideIndependent
New election
OutsideIndependent
New election
OutsideIndependent

Outside Director

Reelection
Candidate for Director to be reelected
New election Candidate for Director to be newly elected
OutsideIndependent

Candidate
attributes

Candidate for outside Director
Independent officer as stipulated by the Tokyo Stock Exchange-6-

Attendance atBoard ofDirectors
meetings forthe fiscal year
2023
12/12
(100%)

12/12(100%)
12/12(100%)
10/10(100%)
11/12
(92%)
10/12
(83%)
–

–

–

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
July 1980
Nov. 1981

July 1983
May 1985
May 1988

1

Number of theCompany’s shares
owned

President and Representative Director of Otani
Corporation (now AIN HOLDINGS INC.)
Founder and Director of Daiichi Medical
Testing Laboratories Co., Ltd., (Asahikawa,
now AIN HOLDINGS INC.)
President and Representative Director
Managing Director of the Company
President and Representative Director (current
post)

3,239,704 shares
Kiichi Otani(July 19, 1951)
Reelection
Number of years in office at theconclusion of this general
meeting of shareholders: 44
years
Attendance at Board of
Directors meetings: 12/12(100%)[Reasons for nomination]
Mr. Otani has always demonstrated excellent leadership and decisiveness in leading the Company, and has grown thedispensing pharmacy business of the Group into one of the largest in Japan. His proactive approach to the expansion of
the business has resulted in 24 consecutive years of growth as of the fiscal year ended April 30, 2024. As chairman of
the Sustainability Committee he has also promoted sustainable management and made significant contributions toincreases in corporate value.
The Company proposes Mr. Otani as a candidate for Director because of his management experience and knowledge infinancial affairs, sustainable management and both businesses, and because the Company believes that he is qualified
for the position of Director to continue to make decisions on management policy and corporate strategy and tosupervise the execution of business operations.

-7-

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Mar. 1982

May 1991
June 1994

Feb. 2000
July 2000
May 2003
May 2004

2

Shoichi Shudo(November 16, 1959)
Reelection
Number of years in office at theconclusion of this general
meeting of shareholders: 24
years
Attendance at Board of
Directors meetings: 12/12(100%)

May 2012
Nov. 2015
May 2020
Nov. 2023
Dec. 2023

May 2024

Joined Daiichi Medical Testing Laboratories
Co., Ltd. (Asahikawa, now AIN HOLDINGS
INC.)
Division Manager of Corporate Planning of theCompany
Director and Division Manager of
Administration of AIN MEDICAL SYSTEMS
Inc. (now AIN HOLDINGS INC.)
Department Manager of Kansai Sales,
Dispensing Pharmacy Business of the Company
Director
Managing Director
Division Manager of Dispensing Pharmacy
Business
Senior Managing Director
Representative Senior Managing Director(current post) in charge of Store Development
Chairman of Nippon Pharmacy Association(NPhA)
President and Representative Director of AIN
PHARMACIEZ INC. (current post)
In charge of Store Development and Division
Manager of Dispensing Pharmacy Operations
Management of the Company
In charge of Store Development and Dispensing
Pharmacy Operations Management (current
post)

Number of theCompany’s shares
owned

10,089 shares[Reasons for nomination]
Having previously served as the Division Manager of Corporate Planning of the Company, Mr. Shudo has taken
responsibility for investment decisions as the head of the Dispensing Pharmacy Business and of store development,
including M&A, he has contributed significantly to the expansion of the Group’s business through his wide-ranging
personal connections and his high-level coordination abilities.
The Company proposes Mr. Shudo as a candidate for Director because of his management experience and knowledge infinancial affairs and the Dispensing Pharmacy Business, and because the Company believes that he is qualified for the
position of Director to continue to make decisions on management policy and corporate strategy and to supervise theexecution of business operations.

-8-Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Apr. 1986
May 2000
July 2000
Feb. 2001
May 2003
May 2012
Nov. 20123

Toshihide Mizushima
Nov. 2015(March 10, 1960)
Reelection
Number of years in office at theconclusion of this general
July 2018
meeting of shareholders: 24
years
Attendance at Board of
May 2020
Directors meetings: 12/12(100%)
Dec. 2023

Joined Otani Corporation (now AINHOLDINGS INC.)
Department Manager of Drug Store, Cosmetic
and Drug Store Business of the Company
Director
Division Manager of Cosmetic and Drug StoreBusiness
Managing Director
Senior Managing Director and Division
Manager of Administration
President and Representative Director of
WHOLESALE STARS Co., Ltd. (current post)
Representative Senior Managing Director of theCompany (current post)in charge of Operating Management andOperational Support
In charge of Operating Management,
Operational Support and Information
Technology Management
In charge of Operating Management,
Operational Support and Digital Promotion
In charge of Cosmetic and Drug StoreOperations Management, Operational Supportand Digital Promotion (current post)

Number of theCompany’s shares
owned

28,089 shares[Reasons for nomination]
Utilizing his strong leadership and decisiveness in charge of the management of the Dispensing Pharmacy Business,
Cosmetic and Drug Store Business, and Operational Support of the Company, Mr. Mizushima has appropriately
promoted business process improvement projects and the digital field, and contributed significantly to the improvementof productivity in both businesses. As deputy chairman of the Sustainability Committee he has also promoted
sustainable management and made contributions to increases in corporate value.
The Company proposes Mr. Mizushima as a candidate for Director because of his management experience andknowledge in financial affairs, sustainable management and both businesses, and because the Company believes that heis qualified for the position of Director to continue to make decisions on management policy and corporate strategy andto supervise the execution of business operations.

-9-Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
July 1993
May 2007
July 2008
Apr. 2011

Feb. 2012
July 20124

Miya Oishi(August 7, 1960)
Reelection
Number of years in office at theconclusion of this general
meeting of shareholders: 12
years
Attendance at Board of
Directors meetings: 12/12(100%)

July 2014
Nov. 2015

May 2019
July 2021
May 2023
July 2023

Director of DAICHIKU Co., Ltd. (current post)
Managing Director
President and Representative Director
Vice President and Representative Director of
AIN MEDICAL SYSTEMS Inc. (now AINHOLDINGS INC.)
President and Representative Director
Director and Deputy Department Manager of
Dispensing Pharmacy Business of the Company
Managing Director
Division Manager of Operating Management
President and Representative Director of AIN
PHARMACIEZ INC.
In charge of Dispensing Pharmacy Operations
Management of the Company
Division Manager of Dispensing Pharmacy
Operations Management
Director of AIN PHARMACIEZ INC. (current
post)
Representative Senior Managing Director, incharge of External Affairs of the Company(current post)

Number of theCompany’s shares
owned

7,456 shares[Reasons for nomination]
As the President and Representative Director of a major subsidiary of the Company and the head of the Dispensing
Pharmacy Business, Ms. Oishi has contributed significantly to the expansion of the Group’s business scale through her
excellent leadership skills and strong sense of responsibility from a practical and multilateral perspective. As the person
in charge of materiality for the Dispensing Pharmacy Business, she has also contributed to increases in corporate value.
The Company proposes Ms. Oishi as a candidate for Director because of her management experience and knowledge insustainable management and both businesses, and because the Company believes that she is qualified for the position of
Director to continue to make decisions on management policy and corporate strategy and to supervise the execution ofbusiness operations.

- 10 -

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Dec. 1995

May 2003

May 2004
May 2009

5

Rieko Kimei(February 26, 1962)
Reelection
Number of years in office at theconclusion of this general
meeting of shareholders: 10
years
Attendance at Board of
Directors meetings: 12/12(100%)

Aug. 2009
May 2013
July 2014
Sept. 2015
July 2016
Feb. 2018
July 2018
May 2022

Joined Daiichi Medical Testing Laboratories
Co., Ltd. (Sapporo, now AIN HOLDINGS
INC.)
Department Manager of Merchandise,
Cosmetic and Drug Store Business of theCompany
Department Manager of Personnel,
Administration Division
Division Manager of Cosmetic and Drug StoreBusiness and Department Manager ofMerchandise
Executive Officer
In charge of Personnel
Director (current post)
Vice President and Representative Director of
AYURA LABORATORIES Inc.
President and Representative Director
Director of AIN PHARMACIEZ INC. (current
post)
In charge of Personnel of the Company
Division Manager of Personnel (current post)

Number of theCompany’s shares
owned

6,325 shares[Reasons for nomination]
Having previously served as the person in charge of the Cosmetic and Drugstore Business, in her role as Division
Manager of Personnel she has demonstrated outstanding planning abilities and leadership by building an organization
for investing in human capital and improving employee engagement, and reforming the personnel system, making
significant contributions to increases in corporate value. She has also worked to promote opportunities for women in theworkplace, leading to a major subsidiary receiving Eruboshi certification and Platinum Kurumin certification.
The Company proposes Ms. Kimei as a candidate for Director because of her management experience and knowledge
in sustainable management and the Cosmetic and Drug Store Business, and because the Company believes that she isqualified for the position of Director to continue to make decisions on management policy and corporate strategy and tosupervise the execution of business operations.

- 11 -

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Apr. 1981
Aug. 2002

July 2004
Aug. 2007

July 2009

July 2010

July 2011

6

Nobuyuki Takakura(January 14, 1957)
Reelection
Number of years in office at theconclusion of this general
meeting of shareholders: 1 year
Attendance at Board of
Directors meetings: 10/10(100%)

Sept. 2012

July 2013
Oct. 2013
Apr. 2014
Apr. 2016

Apr. 2017

Apr. 2019
Apr. 2020
July 2020
July 2023

Joined Ministry of Health and Welfare (nowMinistry of Health, Labour and Welfare)
Director, Economic Affairs Division of Health
Policy Bureau, Ministry of Health, Labour andWelfareDirector, Pension Division of Pension Bureau,
Ministry of Health, Labour and Welfare
Director, General Affairs Division of Equal
Employment, Children and Families Bureau,
Ministry of Health, Labour and Welfare
Deputy Assistant Minister for International
Affairs, Minister’s Secretariat, Ministry of
Health, Labour and Welfare
Deputy Director General, Minister’s
Secretariat, Ministry of Internal Affairs andCommunications (In charge of PublicEnterprise)
Assistant Commissioner of the Fire andDisaster Management Agency, Ministry ofInternal Affairs and Communications
Councilor for Pension Service, Minister’s
Secretariat, Ministry of Health, Labour andWelfareRetired from Ministry of Health, Labour andWelfareSenior Adviser of TEIJIN LIMITED
Teijin Group Corporate Officer, Deputy Chief
Social Responsibility Officer
Teijin Group Corporate Officer, Chief Social
Responsibility Officer, in charge of corporate
auditing department, and in charge ofutilization of factory sites
Teijin Group Corporate Officer, Chief Social
Responsibility Officer, and in charge ofcorporate auditing department
Senior Adviser (part-time)
Adviser of the Company
Senior Managing Director of AIN
PHARMACIEZ INC. (current post)
Director in charge of Risk Management of theCompany (current post)

Number of theCompany’s shares
owned

1,198 shares[Reasons for nomination]
Helped by his abundant knowledge of CSR issues, Mr. Takakura has played a central role in the systematization ofsustainability management, including identifying material issues (materiality) for the Company. As the person in chargeof Risk Management at the Company he has also promoted the strengthening of risk management and compliance, andmade significant contributions to increases in corporate value. The Company proposes Mr. Takakura as a candidate for
Director because of his knowledge in legal and compliance and sustainable management, and because the Company
believes that he is qualified for the position of Director to continue to make decisions on management policy andcorporate strategy and to supervise the execution of business operations.

- 12 -

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
June 1994
Mar. 2006
Sept. 2013
Apr. 2015
July 2018
June 20197

Joined DIAMOND, Inc.
Deputy Editor of Diamond Weekly,
DIAMOND, Inc.
Visiting Researcher at Policy Alternatives
Research Institute, University of Tokyo
Project Professor, Graduate School of Mediaand Governance, Keio University
Outside Director of the Company (current post)
Outside Director of Hankyu Hanshin Holdings,
Inc. (current post)
Specially Appointed Professor of Keio
University Global Research Institute (current
post)
Outside Director of Techpoint, Inc.
Outside Director of Japan Elevator Service
Holdings Co., Ltd. (current post)
Outside Members of the Board of NIPPONTELEGRAPH AND TELEPHONECORPORATION (current post)
Professor of Research Council, Waseda
University (current post)

Number of theCompany’s shares
owned

Noriko Endo
Apr. 2020
Name on family register:
200 shares
Noriko Tsujihiro(May 6, 1968)
Mar. 2021
Reelection
June 2021
OutsideIndependent
Number of years in office at the June 2022
conclusion of this general
meeting of shareholders: 6 years
Attendance at Board ofApr. 2024
Directors meetings: 11/12(92%)[Reasons for nomination and overview of expected roles]
Ms. Endo has a wealth knowledge through her journalistic activities as the editor of an economic magazine withresponsibility for numerous sectors, including retail and distribution. She is also well-versed in energy andenvironmental problems as a result of her research into public policy as it pertains to energy, in which area she
possesses a wide range of insights. In addition, through her experience as an outside Director of other listed companies
she has developed a deep knowledge of corporate management in the IT, telecommunications, railroad, real estate, andother businesses. Since being appointed outside Director of the Company, at meetings of the Board of Directors and atother times she has offered advice mainly on business strategy and compliance.
The Company proposes Ms. Endo as a candidate for outside Director because of her knowledge in financial affairs,
legal and compliance, and sustainable management, and because the Company believes that she is qualified for the
position of Director to continue to make decisions on management policy and corporate strategy and to supervise theexecution of business operations.
Reason for concluding that the candidate is independent
The candidate fulfills the requirements for an independent officer as provided for by the Tokyo Stock Exchange, theindependence criteria for outside Directors and outside Corporate Auditors set out by the Company, and also theimmaterial criteria for the judgement that the relationship with the Company is unlikely to affect shareholder’s decision
concerning the exercise of voting rights, and is thus deemed to have a high degree of independence. Until May 2018,
Ms. Endo had an advisory contract with the Company, but the advisory fees in question were less than 10 million yen
per annum, and she fulfills the above requirements.

- 13 -

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Apr. 2004
Apr. 2008
Nov. 2011
Nov. 2021
Jan. 2022
Apr. 2022
July 2022
Jan. 2024

8

Assistant Professor of Hakuoh University
Professor (current post)
Manager of Hokkaido Nipponham Fighters
Manager of Japan National Baseball Team
Professor of Hokkaido Nipponham Fighters
Specially Appointed Professor of HokkaiGakuen University (current post)
Outside Director of the Company (current post)
Chief Baseball Officer of Hokkaido
Nipponham Fighters (current post)

Number of theCompany’s shares
owned

Hideki Kuriyama– shares(April 26, 1961)
Reelection
OutsideIndependent
Number of years in office at theconclusion of this general
meeting of shareholders: 2 years
Attendance at Board of
Directors meetings: 10/12(83%)[Reasons for nomination and overview of expected roles]
Mr. Kuriyama has a wide range of knowledge and experience regarding governance and human resource development
in organizations, having served as a manager of a professional baseball team and of the Japan national baseball team,and as a professor of faculty of business administration at a university, among other roles. Since being appointed
outside Director of the Company, at meetings of the Board of Directors and at other times he has offered advice mainly
from the perspective of investing in human capital management.
The Company proposes Mr. Kuriyama as a candidate for outside Director because of his knowledge in sustainable
management such as organizational governance and human capital management, and because the Company believes
that he is qualified for the position of Director to continue to make decisions on management policy and corporate
strategy and to supervise the execution of business operations.
Reason for concluding that the candidate is independent
The candidate fulfills the requirements for an independent officer as provided for by the Tokyo Stock Exchange, theindependence criteria for outside Directors and outside Corporate Auditors set out by the Company, and also theimmaterial criteria for the judgement that the relationship with the Company is unlikely to affect shareholder’s decision
concerning the exercise of voting rights, and is thus deemed to have a high degree of independence.

- 14 -

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Apr. 1980
Mar. 20099

Number of theCompany’s shares
owned

Assistant Judge of the Tokyo District Court
Senior Judicial Research Official, the Supreme
Court of Japan (civil affairs)Mar. 2012
Chief Judge of the Utsunomiya District Court
July 2014
Chief Judge of the Yokohama Family Court
June 2015
Judge of the Tokyo High Court (Presiding
Judge)
Apr. 2016
President of the Sapporo High Court
Sept. 2018
President of the Nagoya High Court
Aug. 2020
Registered as an attorney at law
Aug. 2020
Joined Okamura Law Office (current post)
June 2021
Outside Director of Toshiba Corporation
June 2021
Outside Director, Member of Nomination
Committee and Member of GovernanceCommittee of LIXIL Corporation
June
2022
Outside Director, Member of Nomination
Mariko Watahiki– sharesCommittee, Member of Governance Committee(May 2, 1955)
and Member of Compensation Committee
New election
Oct. 2022
Chair of Expert Committee of Daiko
OutsideAdvertising Inc.
Independent
Number of years in office at the June 2023
Outside Director, Chairperson of Compensation
conclusion of this general
Committee, Member of Nomination Committee
meeting of shareholders: - years
and Member of Governance Committee ofAttendance at Board of
LIXIL Corporation
Directors meetings: -/Aug. 2023
Chairperson of Third-party Investigation
Committee of Nihon University
June 2024
Outside Director, Chairperson of Nomination
Committee, Member of Compensation
Committee and Member of GovernanceCommittee of LIXIL Corporation (current post)
June 2024
President of Family Problems Information
Center (current post)[Reasons for nomination and overview of expected roles]
Ms. Watahiki has many years of experience as a judge, and in addition to having resolved numerous civil cases,
including some related to corporate legal and labor issues, she has served as the president of multiple high courts. She
has a thorough understanding of compliance and governance, and a long track record of involvement in organizational
management in such areas as personnel management, human resources development and crisis management. She has
also experience as Chairperson of Third-party Investigation Committee. The Company proposes Ms. Watahiki as a
candidate for outside Director because of her knowledge in legal affairs and compliance, and because the Company
believes that she is qualified for the position of Director to make decisions on management policy and corporate
strategy and to supervise the execution of business operations.
Reason for concluding that the candidate is independent
The candidate fulfills the requirements for an independent officer as provided for by the Tokyo Stock Exchange, theindependence criteria for outside Directors and outside Corporate Auditors set out by the Company, and also theimmaterial criteria for the judgement that the relationship with the Company is unlikely to affect shareholder’s decision
concerning the exercise of voting rights, and is thus deemed to have a high degree of independence.

- 15 -

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Apr. 1981
June 1989

10

Number of theCompany’s shares
ownedJoined Nissan Motor Co., Ltd.
Joined New York Headquarters of Goldman
Sachs & Co.
Nov. 1998
Managing Director of Goldman Sachs (Japan)
Ltd. (now Goldman Sachs Japan Co., Ltd.)
Oct. 2003
Visiting Associate Professor of School ofInternational Corporate Strategy of
Hitotsubashi University
June 2005
Outside Director of Miraka Holdings, Inc. (now
H.U. Group Holdings, Inc.)
Nov. 2005
Outside Director of FAST RETAILING CO.,LTD. (current post)
Oct. 2006
Visiting Professor of School of International
Nobumichi Hattori– shares
Corporate Strategy of Hitotsubashi University(December 25, 1957)
Apr. 2009
Visiting Professor of Graduate School of
New election
Finance, Accounting and Law (now Graduate
OutsideSchool of Business and Finance) of Waseda
Independent
University (current post)
Number of years in office at the Mar. 2015
Outside Corporate Auditor of Frontierconclusion of this general
Management Inc.
meeting of shareholders: - years
June 2015
Outside Director of Hakuhodo DY Holdings
Attendance at Board of
Inc. (current post)
Directors meetings: -/July 2016
Special Guest Professor of Graduate School ofBusiness Administration of Keio University
Apr. 2017
Guest Professor of Graduate School of Business
Administration of Keio University (current
post)[Reasons for nomination and overview of expected roles]
Having gained experience in the supervision of the M&A advisory business at a major U.S. investment bank, Mr.
Hattori is currently engaged in teaching M&A, corporate valuation, and other concepts at a graduate institute ofeducation, and is well-versed in corporate valuation in the capital markets. In addition, his experience as an outside
Director at other listed companies has given him a deep knowledge of corporate management in the retail industry andother areas. The Company proposes Mr. Hattori as a candidate for outside Director because it believes that his
knowledge in financial affairs makes him qualified for the position of a Director who performs the function ofsupervising the decision making of the Company’s management policies and corporate strategies and the execution ofbusiness.
Reason for concluding that the candidate is independent
The candidate fulfills the requirements for an independent officer as provided for by the Tokyo Stock Exchange, theindependence criteria for outside Directors and outside Corporate Auditors set out by the Company, and also theimmaterial criteria for the judgement that the relationship with the Company is unlikely to affect shareholder’s decision
concerning the exercise of voting rights, and is thus deemed to have a high degree of independence.

- 16 -

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Mar. 1986
May 2013

11

Number of theCompany’s shares
ownedJoined Seven-Eleven Japan Co., Ltd.
Division Manager of Financial Accounting andDivision Manager of Corporate Behavior
Promotion Office
Mar. 2014
Executive Officer
May 2016
Senior Officer of Secretary Office of Seven & i
Holdings Co., Ltd.
Dec. 2016
Executive Officer and Senior Officer ofCorporate Development Department
July 2017
Outside Director of the Company
Mar. 2019
Division Manager of the Corporate Personnel
Planning of Seven & i Holdings Co., Ltd.
Director of Seven-Eleven Japan Co., Ltd.
Shigeki Kimura– shares
May 2019
Director of Seven & i Holdings Co., Ltd.
(March 16, 1962)
July 2019
Retired as outside Director of the Company
New election
Mar. 2020
In charge of Affiliates Governance of Seven & i
OutsideHoldings Co., Ltd.
Independent
Director, Senior Managing Executive Officer
Number of years in office at theand Division Manager of Management ofconclusion of this general
Seven-Eleven Japan Co., Ltd.
meeting of shareholders: - years
Apr. 2020
In charge of President Office and Group
Attendance at Board of
Liaison of Seven & i Holdings Co., Ltd.
Directors meetings: -/May 2022
Retired as Director of Seven & i Holdings Co.,
Ltd.
Mar. 2024
Director, Executive Vice President andDivision Manager of Management of SevenEleven Japan Co., Ltd. (current post)[Reasons for nomination and overview of expected roles]
As a Director of a major retailer, Mr. Kimura not only has abundant knowledge of management roles but also possesses
wide-ranging insights and experience in such areas as management accounting, and risk management. Furthermore, heserved as an outside Director of the Company between July 2017 and July 2019, and during this period offered advice
mainly on finance, compliance and governance at meetings of the Board of Directors and at other times. The Company
proposes Mr. Kimura as a candidate for outside Director because of his management experience, knowledge in financial
affairs, legal and compliance, and the Cosmetic and Drug Store Business, and because the Company believes that he isqualified for the position of Director to make decisions on management policy and corporate strategy and to supervise
the execution of business operations.
Reason for concluding that the candidate is independent
The candidate fulfills the requirements for an independent officer as provided for by the Tokyo Stock Exchange, theindependence criteria for outside Directors and outside Corporate Auditors set out by the Company, and also theimmaterial criteria for the judgement that the relationship with the Company is unlikely to affect shareholder’s decision
concerning the exercise of voting rights, and is thus deemed to have a high degree of independence.
Seven-Eleven Japan Co., Ltd., where he is a Director, and subsidiaries of the Company, have transactions such as realestate leasing, however, the amount of such transactions is less than 1% of the annual consolidated net sales of bothcompanies, and therefore meets the above criteria.

- 17 -

(Notes) 1.

2.

3.

4.

5.
6.

Independent officer
Ms. Noriko Endo, Mr. Hideki Kuriyama, Ms. Mariko Watahiki, Mr. Nobumichi Hattori and Mr. Shigeki Kimura are
candidates for outside Director. The Company has submitted notification to the Tokyo Stock Exchange that Ms. Noriko
Endo and Mr. Hideki Kuriyama have been designated as independent officers. If they are reelected, the Company plans
for their designation as independent officers to continue. The Company also plans to register Ms. Mariko Watahiki, Mr.
Nobumichi Hattori and Mr. Shigeki Kimura as independent officers with the Tokyo Stock Exchange.
Ms. Noriko Endo, Mr. Hideki Kuriyama, Ms. Mariko Watahiki, Mr. Nobumichi Hattori and Mr. Shigeki Kimura fulfill
the requirements for an independent officer as provided for by the Tokyo Stock Exchange, the independence criteria foroutside Directors and outside Corporate Auditors set out by the Company, and also the immaterial criteria for thejudgement that the relationship with the Company is unlikely to affect shareholder’s decision concerning the exercise of
voting rights (see on page 24).
Liability limitation agreement
Pursuant to Article 427, paragraph (1) of the Companies Act and the Company’s Articles of Incorporation, the Company
has entered into liability limitation agreements with Ms. Noriko Endo and Mr. Hideki Kuriyama between the Company
that limits liability under Article 423, paragraph (1) of the same act for damages up to the amount stipulated by law, andif the reelection of both candidates is approved, the above liability limitation agreements will be continued. If theelections of Ms. Mariko Watahiki, Mr. Nobumichi Hattori and Mr. Shigeki Kimura are approved at this General Meetingof Shareholders, the Company plans to enter into the same liability limitation agreements with each one of them.
Indemnification Agreement
The Company has no plans to enter into an Indemnification Agreement with each candidate for the expenses stipulated
in Article 430-2, paragraph (1), item (i) of the Companies Act and any losses stipulated in item (ii) of the same paragraph.
Directors and officers liability insurance policy
The Company has entered into a directors and officers liability insurance policy as provided for in Article 430-3,
paragraph (1) of the Companies Act with an insurance company. The policy covers losses such as amount of
indemnification, settlement money and court costs incurred in cases where the insured receives claims for damages from
unfair acts based on their position, during the period of insurance. If the election of each candidate is approved, eachcandidate will be included as an insured in the policy. Also, the Company plans to renew the insurance policy with thesame contents at the next renewal date.
There is no special interest between any of the candidates for Director and the Company.
The main skills of Directors and Corporate Auditors after this general meeting of shareholders when Proposals No. 2
and No. 3 are approved as originally proposed are as described on pages 25 to 27.

- 18 -

Proposal No. 3:

Election of Three (3) Corporate Auditors

At the conclusion of this General Meeting of Shareholders, the terms of office of all 3 Corporate Auditors will expire. Therefore, theCompany proposes the election of three Corporate Auditors.
The consent of the Board of Corporate Auditors has been obtained for this proposal.
The candidates for Corporate Auditor are as follows:

Candidate No.

1

Name

Koichi Kawamura

GenderMale

Current positions in the Company

Standing Corporate Auditor

2

Ayako Sano

Female–3

Minako Mizutani

Female–Reelection

Reelection
Newelection
OutsideIndependentNewelection
OutsideIndependent

Candidate for Corporate Auditor to be reelected

New election Candidate for Corporate Auditor to be newly elected
OutsideCandidate for outside Corporate Auditor
Independent

Candidate
attributes

Independent officer as stipulated by the Tokyo Stock Exchange- 19 -

Attendance atAttendance atBoard ofBoard ofCorporate
Directors
Auditors
meetings formeetings forthe fiscal year
the fiscal year
2023
2023
12/12
12/12
(100%)(100%)––––

Candidate
No.

Name
(Date of birth)

Career summary and positions in the Company, and significant
concurrent positions outside the Company
Oct. 1985

May 1995
July 1997
Apr. 2000

May 2003

1

Joined Daiichi Medical Testing Laboratories
Co., Ltd. (Sapporo, now AIN HOLDINGS
INC.)
Deputy Manager of Accounting Dept. of theCompany
Corporate Auditor
Managing Director and Department Manager of
Accounting of AIN MEDICAL SYSTEMS Inc.
(now AIN HOLDINGS INC.)
Department Manager of Administration Dept.
of the Company
Corporate Auditor of AIN MEDICALSYSTEMS Inc. (now AIN HOLDINGS INC.)
Standing Corporate Auditor of the Company(current post)

Number of theCompany’s shares
owned

Koichi Kawamura
5,000 shares
Apr. 2005(February 17, 1952)
Reelection
Number of years in office at the July 2012conclusion of this general
meeting of shareholders: 12
years
Attendance at Board of
Directors meetings: 12/12(100%)
Attendance at Board of
Corporate Auditors meetings:
12/12 (100%)[Reasons for nomination]
As Department Manager of Accounting and also Corporate Auditor of a major subsidiary of the Company, Mr.
Kawamura is involved in procedures for the settlement of accounts, the preparation of financial statements, audit
procedures, and other matters, and has abundant knowledge of finance and accounting. Since being appointed Standing
Corporate Auditor of the Company, he has utilized this extensive experience to make appropriate statements atmeetings of the Board of Corporate Auditors and the Board of Directors, require necessary explanations from Directors,
and audit properly the execution of duties by Directors. The Company proposes Mr. Kawamura as a candidate for
Corporate Auditor because of his knowledge in financial affairs, legal and compliance, and because the Company
believes that he is qualified for the position of Corporate Auditor to continue to audit the execution of duties byDirectors of the Company.

- 20 -

Candidate
No.

Name
(Date of birth)

Career summary and positions in the Company, and significant
concurrent positions outside the Company
Apr. 2001
Dec. 2008
Jan. 2009
Oct. 2018
Dec. 2018
Mar. 20192

Joined Goldman Sachs (Japan) Ltd. (nowGoldman Sachs Japan Co., Ltd.)
Registered as an attorney at law
Joined Tokyo Nishi Law Office (now TNLAW
Legal Professional Corporation)
Civil Conciliator of the Tokyo District Court
Representative of Aya Law Office (current
post)
Outside Director of SKYLARK HOLDINGS
CO., LTD. (current post)
Outside Director (Audit &Supervisory
Committee Member) of Metaps Inc. (nowMetaps Holdings, Inc.)
Outside Director of Sodick Co., Ltd. (current
post)
Outside Corporate Auditor of CLAS Inc.
(current post)

Number of theCompany’s shares
ownedMar. 2021
Ayako Sano
– shares(December 9, 1977)
New election
Mar. 2024
OutsideIndependent
Number of years in office at the May 2024
conclusion of this general
meeting of shareholders: - years
Attendance at Board of
Directors meetings: -/Attendance at Board of
Corporate Auditors meetings: -/[Reasons for nomination]
Ms. Sano has a practical background in a securities company and wide-ranging knowledge of corporate legal affairs as
an attorney at law, in addition to which she has insights into taxation and experience in defending cases involving
economic crimes. As outside Director of other companies she has also been involved in the operation of whistleblowing
systems and in the management of a sustainability committee, as well as having experience as the chair of a special
committee to investigate proposals for MBOs and delisting. The Company proposes Ms. Sano as a candidate for outside
Corporate Auditor because of her knowledge in financial affairs, legal and compliance, and because the Company
believes that she is qualified for the position of Corporate Auditor to audit the execution of duties by Directors of theCompany.
Reason for concluding that the candidate is independent
The candidate fulfills the requirements for an independent officer as provided for by the Tokyo Stock Exchange, theindependence criteria for outside Directors and outside Corporate Auditors set out by the Company, and also theimmaterial criteria for the judgement that the relationship with the Company is unlikely to affect shareholder’s decision
concerning the exercise of voting rights, and is thus deemed to have a high degree of independence.

- 21 -

Candidate
No.

Name
(Date of birth)

Career summary and positions in the Company, and significant
concurrent positions outside the Company
Apr. 1995
June 1998
Oct. 1998
Sept. 2011
Apr. 2013
Sept. 2016
June 2020

Joined Masanori Otsubo Tax Accountant Office
Joined Ishiwata, Nishimura & Nakane Tax
Office (now Moore Shisei Tax Corporation)
Registered as a tax accountant
Joined Tokyo Kyodo Accounting Office
Joined Seishin Tax Accountant Office (now
Moore Shisei Tax Corporation)
Partner of Moore Shisei Tax Corporation
Outside Corporate Auditor of The Yamanashi
Chuo Bank, Ltd. (current post)
Representative Partner of Moore Shisei Tax
Corporation (current post)

Number of theCompany’s shares
owned

Sept. 2023
Minako Mizutani– shares(September 24, 1969)
New election
OutsideIndependent
Number of years in office at the3conclusion of this general
meeting of shareholders: - years
Attendance at Board of
Directors meetings: -/Attendance at Board of
Corporate Auditors meetings: -/[Reasons for nomination]
Due to her experience as a tax accountant, Ms. Mizutani has abundant specialist experience in finance and accounting.
The Company proposes Ms. Mizutani as a candidate for outside Corporate Auditor because of her knowledge infinancial affairs, and because the Company believes that she is qualified for the position of Corporate Auditor to audit
the execution of duties by Directors of the Company.
Reason for concluding that the candidate is independent
The candidate fulfills the requirements for an independent officer as provided for by the Tokyo Stock Exchange., theindependence criteria for outside Directors and outside Corporate Auditors set out by the Company, and also theimmaterial criteria for the judgement that the relationship with the Company is unlikely to affect shareholder’s decision
concerning the exercise of voting rights, and is thus deemed to have a high degree of independence.
(Notes) 1. Independent officer
Ms. Ayako Sano and Ms. Minako Mizutani are candidates for outside Corporate Auditor.
Both candidates fulfill the requirements for an independent officer as provided for by the Tokyo Stock Exchange, theindependence criteria for outside Directors and outside Corporate Auditors set out by the Company, and the immaterial
criteria for the judgement that the relationship with the Company is unlikely to affect shareholder’s decision concerning
the exercise of voting rights (see page 24), and the Company plans to register both candidates as independent auditorswith the Tokyo Stock Exchange.
2. Liability Limitation Agreement
Pursuant to Article 427 of the Companies Act and the Company’s Articles of Incorporation, Mr. Koichi Kawamura hasentered into a liability limitation agreement with the Company to limit his liability for damages under Article 423,
paragraph (1) of the same act up to the amount stipulated by law, and if he is reelected, the Company plans to continue
said liability limitation agreement. If the election of Ms. Ayako Sano and Ms. Minako Mizutani is approved at this
General Meeting of Shareholders, the Company plans to enter into similar liability limitation agreements with each ofthem.
3. Indemnification Agreement
The Company does not intend to enter into an indemnification agreement with each candidate regarding the expenses
stipulated in Article 430-2, paragraph (1), item (i) of the Companies Act and the losses stipulated in item (ii) of the same
paragraph.
4. Directors and Officers Liability Insurance Policy
The Company has entered into a directors and officers liability insurance policy as provided for in Article 430-3,
paragraph (1) of the Companies Act with an insurance company, and in the event that a claim for damages is madeagainst the insured during the insurance period due to an unfair act performed by the insured based on his or her position,
the insurance policy will cover damages and litigation costs incurred by the insured. If the election of each candidate isapproved, each candidate will be included as an insured under the policy. In addition, the insurance policy is scheduled
to be renewed with the same content at the next renewal date.
- 22 -

5.
6.

There is no special interest between any of the candidates for Corporate Auditor and the Company.
The main skills of Directors and Corporate Auditors after this general meeting of shareholders when Proposals No. 2
and No. 3 are approved as originally proposed are as described on pages 25 to 27.

- 23 -

[Reference] Independence Criteria for Outside Directors and Outside Corporate Auditors
An outside Director and/or an outside Corporate Auditor of the Company (hereinafter referred to as the “outside officer”) will be
determined as sufficiently independent from the Company if the said outside officer satisfies the requirements set forth below:
1.

Presently or at any time within the past ten years, the person has never been an executing person of the Company or a consolidated
subsidiary (hereinafter referred to as the “the Group.”)2.

Presently or at any time within the past five years, the person has not fallen under any of the following items of (1) to (9):(1) A person who directly or indirectly holds 10% or more of the total voting rights of the Company, or its executing person;(2)

A person of a company of which the Group holds directly or indirectly 10% or more of the total voting rights, or its
executing person;(3)

A counterparty which has transactions principally with the Group (total amount of transactions with the Group exceeding
2% of annual consolidated sales of the party), or its executing person;(4)

A principal counterparty of the Group (total amount of transactions with the party exceeding 2% of annual consolidated
sales of the Group), or its executing person;(5)

A consultant, accounting professional or legal professional who has been paid money exceeding the greater of 2% or 10
million yen of the annual consolidated sales (the annual consolidated revenue) of the person or other assets in addition to
the remuneration for officers by the Group. (where the entity that acquired the relevant assets is an organization, such as acorporation or a union, etc., refers to individuals who belong to the relevant organization);

3.

(6)

A person/organization, or their business executors, who receives donations or subsidies from the Group exceeding thegreater of 30% of the gross expense of the person/organization or 10 million yen;

(7)

A person who is a major lender of the Group (the amount of borrowings from the person exceeding 2% of total consolidated
assets of the Group), or its executing person;

(8)
(9)

A person who belongs to auditing firm, which is an accounting auditor of the Group;
An executing person in other company of which the executing person of the Company is an outside officer of the othercompany
If an executing person of the Company or a person listed Clause 2 of this criteria corresponds to an important person (director
except outside director, corporate auditor except outside corporate auditor, executive officer, department manager and higher
management grades), a person is not a spouse of, relative within the second degree of relationship with said person.

[Reference] Immaterial criteria for the judgement that the relationship with the Company is unlikely to affect shareholder’s
decision concerning the exercise of voting rights
In the event that an outside director or an outside corporate auditor of the Company (hereinafter referred to as the “outside officer”)
satisfies the requirements set forth below, the Company judges that the attribute information of the outside officer is unlikely to affectshareholder’s decision concerning the exercise of voting rights:
1. A counterparty with the total amount of transactions with the Group not exceeding 1% of the annual consolidated sales of the2.

Group nor the sales of the party in the previous fiscal years, or its executing person.
A person that has received donations or subsidies not exceeding 10 million yen from the Group in the previous fiscal years, or
its executing person.

- 24 -

[Reference] The skill sets and main skills of Directors and Corporate Auditors after this general meeting of shareholders
The Company has a business strategy of growth in both the Dispensing Pharmacy Business and the Cosmetic and Drugstore Business,
and after deliberations by the Nomination and Remuneration Committee regarding skills for providing supervisory functions that
contribute to increases in corporate value over the medium to long term, the Board of Directors has been reviewing the required skills.
Recently, the Board has made a partial review of the skill sets, adding “experience in financial strategies such as investment decisionmaking, including M&A” to the skills content of “finance,” and changing “legal affairs and risk management” to “legal and compliance,”and has identified them as follows.
Required skill

Management experience

Finance

Legal /
Compliance

Details of skill

Has management experience in a listedcompany or core business company
Holds certified public accountant or tax
accountant qualifications, or has operational
experience in financial institutions or
accounting departments, or has experiencein financial strategy, such as investment
decisions, including M&A
Holds attorney at law qualifications, or has
experience as a corporate auditor, or has
operational experience in legal affairs, risk
management, internal audit, or compliancedepartments, or possesses specialist
knowledge

Reason for selecting
Necessary for building appropriate
management strategies for increasing
corporate value over the medium to longterm, and providing effective supervision of
execution by management
Necessary for achieving sound management
and promoting financial strategy that iscongruent with management strategy

Because a proper awareness andmanagement of various risks associatedwith corporate activities and of complianceis necessary for appropriate execution by
management

Sustainable management

Has operational or management experienceof sustainable management, such as humancapital or environmental conservation, or
possesses specialist knowledge

Necessary for the promotion of appropriate
management strategies to achievesustainable growth of the business andincreases in corporate value over the
medium to long term

Dispensing Pharmacy BusinessKnowledge and experience of the
Dispensing Pharmacy Business, such as
market development (store operation,
development, implementation of new
initiatives, etc.), or healthcare policy(formulation and execution of strategies
aimed at revisions in laws and regulations,etc.)

Necessary for achieving a bird’s eye viewof the business in general, including such
issues as healthcare industry insurance
systems, and legal regulations, and for
effectively supervising execution ofbusiness

Cosmetic and Drug StoreBusiness

Knowledge and experience of the Cosmetic
and Drug Store Business, including market
and product development, or branddevelopment

Necessary for achieving a bird’s eye viewof the business in general, including market
trends in the retail industry, and for
effectively supervising execution ofbusiness- 25 -

The main skills of Directors and Corporate Auditors after this general meeting of shareholders when Proposals No. 2 and No. 3 areapproved and adopted as originally proposed are as follows:
Name
President andRepresentative
Director
Kiichi Otani
Representative Senior
Managing Director
Shoichi Shudo

IndependenceManagement(for outside
experience
officers only)

Finance

－

●

●

－

●

●

Representative Senior
Managing Director
Toshihide Mizushima

－

●

●

Representative Senior
Managing Director
Miya Oishi－

Director
Rieko Kimei－

Director
Nobuyuki Takakura－

Outside Director
Noriko Endo●

Outside Director
Hideki Kuriyama
Outside Director
Mariko Watahiki

Legal /
Compliance

Outside Director
Shigeki Kimura●

Cosmetic andDrug StoreBusiness

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●
●

Dispensing
Pharmacy
Business●●

Outside Director
Nobumichi Hattori

Sustainable
management

●
●

●

●

●

Standing Corporate
Auditor－●●Koichi Kawamura
Outside Corporate●●●
AuditorAyako Sano
Outside Corporate
Auditor●●Minako Mizutani(Note) This is an indication of the skills expected by the Company and does not represent all the skills possessed.

- 26 -●

Experience, etc. providing the basis for skills
Management experience: President and Representative Director of the Company / Finance: Promotes financial strategy as
Representative Director / Sustainable management: Promotes sustainable management as chairman of the Sustainability
Committee / Dispensing Pharmacy Business: Holds pharmacist qualifications, founded and has driven the expansion of thebusiness / Cosmetic and Drug Store Business: Founded and has driven the expansion of the drugstore business
Management experience: Representative Director of the Company, President and Representative Director of AIN
PHARMACIEZ INC. / Finance: In charge of Store Development for the Company / Dispensing Pharmacy Business: In chargeof Dispensing Pharmacy Operations Management of the Company
Management experience: Representative Director of the Company / Finance: Promotes financial strategy as person in charge ofOperational Support/ Sustainable management: Promotes sustainable management as the deputy chairman of the Sustainability
Committee / Dispensing Pharmacy Business: In charge of Operating Management of the Company, President and Representative
Director of WHOLESALE STARS Co., Ltd. / Cosmetic and Drug Store Business: In charge of Cosmetic and Drug StoreOperations Management of the Company
Management experience: Representative Director of the Company, President and Representative Director of AIN
PHARMACIEZ INC. / Sustainable management: Promotes initiative as person responsible for the materialities of: contribute to
local healthcare; safety, piece of mind and trust; ensure sound management base; cooperate with local communities andbusinesses / Dispensing Pharmacy Business: Holds pharmacist qualifications,
Division Manager of Dispensing Pharmacy Operations Management of the Company / Cosmetic and Drug Store Business:
President and Representative Director of AIN PHARMACIEZ INC.
Management experience: Director of the Company, President and Representative Director of AYURA LABORATORIES Inc. /Sustainable management: as Division Manager of Personnel of the Company, leads initiatives for diversity and opportunities for
women in the workplace / Cosmetic and Drug Store Business: Division Manager of Cosmetic and Drug Store Business of theCompany and President and Representative Director of AYURA LABORATORIES Inc.
Legal and compliance: Person in charge of Risk Management, Chief Social Responsibility Officer at Teijin Group and CSR
Officer, experience having led responses of said group’s compliance and risk management efforts from a CSR perspective /Sustainable management: Experience having played a central role in systematizing the Company’s sustainable management,
experience having led the promotion of CSR at Teijin Group as Chief Social Responsibility Officer and CSR Officer
Financial: Knowledge of international finance, fiscal policy, macro economy, and other areas as the editor of an economics
magazine / Legal and compliance: Research at university into risk and security governance / Sustainable management:
Knowledge of energy and environmental problems obtained through research into public policy as it pertains to energy
Sustainable management: Knowledge in organizational governance and human capital management, gained through efforts todevelop human resources as a manager of a professional baseball team and of the Japan national baseball teamLegal and compliance: Holds attorney at law qualifications, experience as a judge
Financial: Managing Director of Goldman Sachs (Japan) Ltd. (now Goldman Sachs Japan Co., Ltd.), Visiting Professor of
School of International Corporate Strategy of Hitotsubashi University, Visiting Professor of Graduate School of Business andFinance of Waseda University, Guest Professor of Graduate School of Business Administration of Keio University
Management experience: Director of Seven & i Holdings Co., Ltd., Director of Seven-Eleven Japan Co., Ltd. / Financial:
Division Manager of Financial Accounting and Division Manager of Management of Seven-Eleven Japan Co., Ltd. / Legal andcompliance: Division Manager of Management of Seven-Eleven Japan Co., Ltd. / Cosmetic and Drug Store Business: Directorof Seven & i Holdings Co., Ltd., Director of Seven-Eleven Japan Co., Ltd.
Financial: Department Manager of Accounting Dept. and Corporate Auditor of AIN MEDICAL SYSTEMS Inc. (now AINHOLDINGS INC.), Standing Corporate Auditor of the Company / Legal and compliance: Department Manager of
Administration Dept. of the Company, Standing Corporate Auditor of the Company
Financial: Was employed by Goldman Sachs (Japan) Ltd. (now Goldman Sachs Japan Co., Ltd.), tax attorney procedures / Legaland compliance: Holds attorney at law qualifications, has experience as member of risk review team as outside director ofanother company, outside corporate auditor of another company
Financial: Holds tax accountant qualification- 27 -

Proposal No. 4:
1.

Partial Amendment to the Articles of Incorporation

Reasons for proposal
In order to promote separation of the supervisory and business execution functions and to speed up decision-making and ensure
effective discussions at Board of Directors meetings, Article 19 of the current Articles of Incorporation will be amended to reducethe maximum number of Directors from 20 to 15.
In addition, for the purpose of enabling flexible operation of the Board of Directors and to improve the independence, objectivity
and transparency of the decision-making process, Article 24 of the current Articles of Incorporation, which currently limits theauthority to convene and chair the Board of Directors Meetings to the Director and President, will be amended to allow other
Directors, including Outside Directors, to serve as the convener and chairperson of the Board of Directors Meetings.

2.

Details of amendments
The details of amendments are as follows. (Underlined portions indicate the proposed amendments.)
Current Articles of Incorporation
Proposed Amendments(Number of Directors)(Number of Directors)
Article 19.
Article 19.
The maximum number of Directors of the Company shall be 20. The maximum number of Directors of the Company shall be 15.
(Convener and Chairperson of Board of Directors Meetings)
Article 24.
1. Unless otherwise provided by laws or regulations, theDirector and President shall convene and chair meetings ofthe Board of Directors of the Company.
2. In cases where the Director and President is unable to act
due to an accident, one of the other Directors, selected in
the order determined in advance by the Board of Directors,
shall convene and chair the meeting.

(Convener and Chairperson of Board of Directors Meetings)
Article 24.
1. Unless otherwise provided by laws or regulations, a
Director determined in advance by the Board of Directors
shall convene and chair meetings of the Board of Directorsof the Company.
2. In cases where the Director in the previous paragraph isunable to act due to an accident, one of the other Directors,
selected in the order determined in advance by the Board of
Directors, shall convene and chair the meeting.

- 28 -

<Shareholder proposals>
Proposals No. 5 to No. 8 are proposals made by shareholders.
The main points of and reasons for the proposals submitted by the requesting shareholders, and career summaries of the candidates, havebeen presented in their original form in the appendix, to which shareholders are asked to refer.
Opinion of the Board of Directors of the Company on the Shareholder’s Proposals

The Board of Directors of the Company opposes Proposals No. 5 to No. 8.
A summary of the opinions of the Company’s Board of Directors is as follows. Details are described in Opinions of the Boardof Directors on Proposals No. 5 to No. 8. Please also refer to the following materials disclosed by the Company.
https://www.ainj.co.jp/corporate/english/ir-library.html
1. Introduction
As noted during the financial results briefing held on June 12, 2024, the group of the Company (the “Our Group” or the“Group”) achieved the revised plan for the fiscal year ended April 30, 2024 and generated record-high results, with net sales
and operating profit respectively increasing by 11.5% and 27.7% year on year on a consolidated basis. We would like toexpress our sincere gratitude to our customers, business partners, shareholders, and employees for their support.
Our Group will continue to build on its dispensing pharmacy business, centered on the operation of dispensing pharmacies, andcosmetic and drug store business, centered on the development of high-value-added, distinctive stores, to become a company
that makes people feel "glad to have AIN in this town," and to become the "No. 1" group, both in name and reality, for all
stakeholders.
In the fiscal year ending April 30, 2025, We will continue to aggressively open new stores (increasing from 1,312 to 1,384
locations) as We strive to achieve steady growth in the future through investments, including M&As. We would appreciate
your continued support.
It’s against this backdrop of steady growth and development that the Proposing Shareholder has submitted agenda items andproposals to dismiss the Company’s outside directors and nominate new outside director candidates.
However, the Board of Directors of the Company has thus far achieved a steady track record of success and has responded
appropriately to various problems that have arisen from time to time. The Board of Directors of the Company wishes tocontinue to operate the Company with the management team it believes best suit to lead the Company and therefore opposes all
proposals set forth in the Shareholder Proposal.
We respectfully request that you, our shareholders, have confidence in the Board of Directors of the Company and vote “FOR”
the Company's proposals and “AGAINST” the Shareholder Proposals.
2. Summary of the Board of Directors' opinion on each agenda item and proposal(1) In Proposal No. 5, the Proposing Shareholder argues that the Company's independent outside directors, Mr. Junro Ito(“Director Ito”) and Mr. Shigeru Yamazoe (“Director Yamazoe”) “lack independence” and should be “immediately
dismissed” because these two directors keeping their positions as independent outside directors is “harmful to theCompany.”
However, as described below, both Director Ito and Director Yamazoe are independent and have, with their respective
expertise, surely contributed to improving the Company’s corporate value and securing the common interests of theshareholders, so there is no reason to dismiss both directors “immediately.”
In particular, the Proposing Shareholder states, “In view of the fact that the scandal occurred while members fromcompanies having capital and business alliances with the Company have long been “independent” outside directors, there
is an urgent need to appoint individuals who are not from companies having capital and business alliances [original text]
and who have no special interests with the Company, and who have relevant expertise and experience and will contributeto enhancing the Company's corporate values.” However, the incident (the “Case”) where officers (now retired) of theGroup were arrested on suspicion of obstructing an auction related to a public contract and convicted in the first trial inconnection with the proposal-based competitive bidding conducted by KKR Sapporo Medical Center in November 2020
for on-site pharmacies cannot be attributed to the fact that “members from companies having capital and businessalliances with the Company [original text]” serve as outside directors or to the independence of outside directors.
Therefore, the Proposing Shareholder’s claim cannot be grounds for dismissing both directors. It is also not clear why the
Proposing Shareholder demands that, out of all outside directors, only Director Ito and Director Yamazoe be dismissed.
The occurrence of a compliance incident such as the Case is deeply regrettable to the Company, and we sincerely
apologize for it again. We will continue to review and implement what we need to do in order to prevent any similar
incident from ever occurring again. To this end, as described in 1. and 2. of Opinion of the Board of Directors of theCompany on the Shareholder’s Proposal No. 6, the Company has conducted a third-party investigation and made every
effort to prevent a recurrence. Both directors have fulfilled their roles as board members in making decisions andsupervising such actions.
For the above reasons, the Board of Directors of the Company opposes the proposal to dismiss Director Ito and Director
Yamazoe (Proposal No. 5).
- 29 -

As described in 1. of Opinion of the Board of Directors of the Company on the Shareholder’s Proposal No. 5, Director Itoand Director Yamazoe are scheduled to retire from the director of the Company upon expiration of their terms of office at
the conclusion of the General Meeting of Shareholders. Therefore, the dismissal of both directors at the General Meetingof Shareholders will have no practical significance.
(2) In Proposal No. 6, the Proposing Shareholder expresses doubts about the objectivity, neutrality, and professionalism of theinvestigation into the Case (the “Investigation”) conducted by the investigation team (the “External Investigation Team”)
comprised of outside attorneys. They propose that four candidates of the Shareholder Proposal (“Shareholder-proposed
Candidates”) be appointed as outside directors of the Company, on the grounds that there is an urgent need to appoint
individuals who have no special interest in the Company, have relevant expertise and experience, and will contribute toenhancing the Company's corporate value.
However, the Investigation was conducted by a team that was composed solely of experienced, expert outside attorneys at
law and did not include any officers or employees of the Group. The team determined the scope of the investigation
without any limits and conducted the investigation over a long period of time without any restrictions on their methods ofinvestigation. Therefore, there is no room for doubt concerning objectivity, neutrality, and professionalism. We have fully
cooperated with the investigation team, and there is no reason to doubt its objectivity, neutrality, and professionalism. The
fact that the Proposing Shareholder presents an assessment of the case as if a problematic investigation had been
conducted is nothing less than a manifestation of the intention to present a one-sided and misguided assessment.
As noted above, neither the facts the Proposing Shareholder uses as a basis for their assessment nor their assessment aretrue. In addition to that, the Company deems all four Shareholder-proposed Candidates unfit to serve as its outside
directors in light of the one-on-one interviews conducted by the Nomination and Remuneration Committees of theCompany with all of them. The Nomination and Remuneration Committees of the Company found that, although theyshould be highly evaluated for their knowledge, all of the candidates lacked experience as outside directors of listedcompanies and possessed little knowledge about the Company and the industry in which it operates. If the Shareholderproposed Candidates become outside directors of the Company, there will be overlap in the candidates with the knowledge
and experience that the Board of Directors of the Company deems necessary. This is why the Board of Directors of theCompany deems that the outside director candidates it will propose at the General Meeting of Shareholders to be the best
candidates. In light of the Case, the Company will also propose to enhance the Board of Corporate Auditors at the General
Meeting of Shareholders.
For the above reasons, the Board of Directors of the Company opposes the proposal to appoint four outside directors(Proposal No. 6).
(3) In Proposals No. 7 and No. 8, the Proposing Shareholder proposes that the amount of remuneration to be paid to eachoutside director be determined at a general meeting of shareholders and that allowances be made to grant stockcompensation to outside directors. However, the Board of Directors of the Company and Nomination and Remuneration
cCommittees, based on a resolution passed at a general meeting of shareholders, discuss and draft the range of monthly
remuneration for each position, details of performance and other evaluations related to bonuses, and the amount of nonmonetary compensation for each position, and the President and Representative Director, who is delegated by the Board of
Directors of the Company, then decides the specific amounts to be paid. As a result of these considerations, the Company
does not grant stock compensation to outside directors.
As noted in the guidelines published by the Ministry of Economy, Trade and Industry, the Company believes that theburdens and responsibilities of outside directors vary and that it is important that an appropriate level of remuneration be
set accordingly. Therefore, the Company does not think it is appropriate to uniformly determine a specific payment
amount at a general meeting of shareholders. In addition, the Company is aware that there is a lot of debate around theworld over whether to provide stock compensation for outside directors, and presently the Company does not consider it
appropriate to provide such compensation.
For the above reasons, the Board of Directors of the Company opposes both the proposal to determine the amount of
individual fixed compensation for each outside director at a general meeting of shareholders (Proposal No. 7) and the
proposal to determine remuneration for granting restricted shares to outside directors (Proposal No. 8).
For the reasons for the above objections, please see opinions of the Board of Directors of the Company on Proposals No. 5 toNo. 8, which provide as well.
All of us in the Group will make every effort to meet the expectations of all stakeholders.
We hope that our shareholders will continue to place their confidence in our Board of Directors of the Company and lookforward to the sound and sustainable enhancement of our corporate value.

- 30 -

Proposal No. 5: Dismissal of Two (2) Directors(a) Main points of the proposal
Dismissal of Director Shigeru Yamazoe (Candidate No.1) and Director Junro Ito (Candidate No. 2).
(b) Reasons for proposal
As presented in the appendix.
＜Opinion of the Board of Directors of the Company on the Shareholder’s Proposal No. 5＞
The Board of Directors is opposed to Proposal No. 5.
1.

Performance of the two directors and their contribution to improving the Company's corporate value as well as securing the common
interests of shareholders(1) Performance of Director Ito and his contribution to improving the Company's corporate value as well as securing the common
interests of shareholders
Director Ito brings extensive management experience after directing the company's operations for many years as the representative
director and chief sustainability officer of Seven & i Holdings Co., Ltd., one of Japan's leading global retailers. In particular, he has
extensive knowledge about ESG, risk management, accounting and finance, social marketing, and more. In fact, he has provided
substantial advice and oversight on management, such as measures to streamline the operation of each of the Group's stores, thereby
contributing significantly to improving the Company's corporate value.
In addition, Director Ito actively expresses his opinions at the Company’s board meetings and fully contributes to the function ofsupervising and checking the Board of Directors’ performance of duties. To date, Director Ito, as a director of the Company, has
never acted in such a way that would prioritize the interests of our capital and business alliance partner, Seven & i Holdings, overours and has taken actions with due consideration to protecting the interests of general shareholders.
Director Ito is scheduled to retire from the director of the Company upon expiration of his terms of office at the conclusion of theGeneral Meeting of Shareholders.
(2) Performance of Director Yamazoe and his contribution to improving of the Company's corporate value as well as securing thecommon interests of shareholders
Director Yamazoe has been engaged in the management of a major trading company for many years and has extensive knowledgeof global economic activities. In particular, he has provided effective advice and supervision on the Company's management strategy
as well as finance and accounting, significantly contributing to the improvement of the Company's corporate value. He has also
fully served as the function of supervising and checking the execution of business operations by freely expressing his opinions on
decisions at the Company’s board meetings.
Director Yamazoe is scheduled to retire from the director of the Company upon expiration of his terms of office at the conclusionof the General Meeting of Shareholders.
2.

Independence of the two directors

In appointing an independent outside director candidate, We place great importance on not only the externality requirements of theCompanies Act, but also whether the candidate will bring a wealth of experience and deep insight into corporate management, etc. In
addition, in order to objectively assess the independence of outside directors, the Company has established the “independence criteria
for outside directors and outside corporate auditors” (“Independence Criteria”) and “immaterial criteria for the judgement that therelationship with the Company is unlikely to affect shareholder’s decision concerning the exercise of voting rights” (“Immaterial
Criteria”).
The Company's Independence Criteria and Immaterial Criteria provide more specific standards than the independence criteria by Tokyo
Stock Exchange (“TSE Criteria”) described in “Practical Matters to Note on Securing Independent Directors/Auditors (Revised Version
as of January 2024).” The Board of Directors of the Company believes that assessing the independence of outside directors based onthese criteria warrants sufficient rationality and objectivity.
Director Ito and Director Yamazoe do not violate the TSE Criteria, the Company's Independence Criteria and Immaterial Criteria, andthe Company has designated both directors as independent officers specified by the Tokyo Stock Exchange. In fact, as stated in 1 above,
both directors fully perform the functions of supervising and checking the execution of the Company's business and act from a standpointthat is independent of management.
3.

Unreasonableness of the reasons for dismissal asserted by the Proposing Shareholder

The Proposing Shareholder cites the occurrence of the Case as one of the reasons for requesting the dismissal of the two directors.
However, Director Ito and Director Yamazoe fulfill their duties adequately in accordance with their respective knowledge and skills,- 31 -

and it is not appropriate to make claims suggesting that the independence of both Directors was the cause of the Case. The Proposing
Shareholder biasedly asserts that the independence of the Company's outside directors is questionable and links the independence issue
with the occurrence of the Case. This is a leap of logic that goes beyond any reasonable grounds for dismissing the two directors, andthese are not grounds for dismissing both directors.
4.

Conclusion

As noted above, both Director Ito and Director Yamazoe, as outside directors of the Company, are fully independent and exercise theirfunctions of supervision and check over the execution of business from a fully objective standpoint based on their backgrounds andskills. Furthermore, both directors are scheduled to retire from the director of the Company upon the expiration of their terms of officeat the conclusion of the General Meeting of Shareholders, and therefore, the dismissal of both directors will have no practicalsignificance.
Therefore, the Board of Directors of the Company opposes this Shareholder Proposal.

- 32 -

Proposal No. 6: Election of Four (4) Directors(a) Main points of the proposal
It is proposed that Mr. Hajime Yoshitake, Mr. Shogo Maeda, Mr. Alexander Dmitrenko, and Mr. Kenji Shinmori be elected as
Directors.
(b) Reasons for proposal
As presented in the appendix.

(c) Biography and other information about the candidate
Birthday: July 1, 1956
Candidate No.

Hajime Yoshitake

Number of shares of the Company
owned: 0 Shares■Biography, position, responsibilities, and status of important concurrent positions
Apr. 1979

1

The Kyowa Bank Ltd. (currently Resona Bank, Limited.)

Apr. 1991

Manager, New York Branch, The Kyowa Saitama Bank, Limited,

Apr. 2002

Nihon Unisys, Ltd. (currently BIPROGY Inc.)

Oct. 2007

Part-time Lecturer, Professional Graduate School of Meiji University (current
position)

June. 2008

Director, The Institute of lnternal Auditors-Japan (current position)

June. 2009

Executive Officer and General Manager of Internal Audit Division, Resona
Holdings, Inc.,

June. 2011

Full-time Company Auditor, Saitama Resona Bank Limited

Apr. 2013

Part-time Lecturer, College of Law of Nihon University

June. 2016

Full-time Outside, Independent Company Auditor, TAIYO YUDEN CO., LTD.

May 2021
July 2023

Advisor, Specified Non-profit Corporation Japan Platform
Special Advisor to International Internal Audit Standards Board, The InstituteMay 2024

Auditor, Specified Non-profit Corporation Japan Platform (current position)

July 2024

Institute Relations Committee Member (scheduled to assume the position in
July 2024), The Institute of Internal Auditors, Inc.

of Internal Auditors, Inc.

＜Status of important concurrent positions＞
Part-time Lecturer, Professional Graduate School of Meiji University
Director, The Institute of lnternal Auditors-Japan
Auditor, Specified Non-profit Corporation Japan Platform
The Institute of Internal Auditors, Inc. Institute Relations Committee Member
There is no special interest between the candidate and the Company.
■Reasons for Nomination as a Director Candidate
Mr. Yoshitake has many years of experience as a company auditor in the private sector, as well as leadingteaching positions at educational institutions as an internal audit professional and as director of the Instituteof Internal Auditors-Japan. He is a leader in internal auditing and related fields in Japan. He also has
experience working at major financial institutions and IT vendors, and a wealth of expertise in finance and IT
and digital transformation.
In the Investigation Report addressing the case in which the directors of the Company and its subsidiary werearrested, it is confirmed that the Internal Audit Section of the Company had not conducted the necessary audit
and warning and, therefore, drastic improvement in the corporate governance system on a company-widebasis (including internal auditing) is now required. It is expected that Mr. Yoshitake will provide useful advice
and supervisory functions to the management of the Company based on his expertise and experience incorporate governance including internal auditing cultivated over many years.
For these reasons, Oasis proposes to appoint Mr. Yoshitake as a Director.
Note: Mr. Hajime Yoshitake is a candidate for Outside Director.

- 33 -

Birthday: January 1, 1957
Candidate No.

Shogo Maeda

Number of shares of the Company
owned: 0 Shares■ Biography, position, responsibilities, and status of important concurrent positions
July 1981
Oct. 1985
Nov. 1987
Sept. 1989
Sept. 1994
Apr. 2002

Jan. 2006
Dec. 2012
Mar. 2018

Japan Equity Analyst at Overseas Investment Advisor Office, Nomura
Securities Co., Ltd.
Investment Banking Group, New York Headquarters, Manufacturers
Hanover Trust Company
Nomura Investment Management Co., Ltd. (currently Nomura AssetManagement Co., Ltd.)
Senior Portfolio Manager, Nomura Investment Management Co., Ltd.
Head of Japanese Equities, Goldman Sachs Asset Management Co., Ltd.
Director, Asia-Pacific Equities CIO, and Head of Japan Equities, Goldman
Sachs Asset Management Co., Ltd.
Head of Japan Equities, Schroder Investment Management Limited
Director and Head of Japan Equities, Schroder Investment Management(Japan) Limited
Executive Director, The Grew Bancroft Foundation (current position)＜Status of important concurrent positions＞

2

Executive Director, The Grew Bancroft Foundation
There is no special interest between the candidate and the Company.
■ Reasons for Nomination as a Director Candidate
Mr. Maeda has held important positions, such as director, in various financial institutions, and has a deep
expertise in finance in general and capital markets in particular.
The Company's stock price has been stagnant for a long period of time, and its total shareholder return (TSR)
has been significantly lower than TOPIX on a long-term basis. Although the Company is in an emergent
situation as the directors of the Company and its subsidiary were arrested, the Company's communication
with investors was insufficient such that appropriate disclosure to investors concerning the investigation intosuch scandal was delayed. Under these circumstances, as Mr. Maeda has a deep expertise in finance andcapital markets, it can be expected that Mr. Maeda can provide useful advice and supervision to the
management of the Company, not only for implementation of appropriate M&A and business investment, butalso in considering actions for enhancing the corporate value and dialogue with shareholders given that oneof the Company's important business challenges is to engage in and/or respond to the future restructuring of

the industry.
For these reasons, Oasis proposes to appoint Mr. Maeda as a Director.
Note: Mr. Shogo Maeda is a candidate for Outside Director.

- 34 -

Birthday: May 25, 1977
Candidate No.

Alexander Dmitrenko

Number of shares of the Company
owned: 0 Shares■ Biography, position, responsibilities, and status of important concurrent positions
Mar. 2001

Roy Elliott O'Connor LLP

Oct. 2006

Dewey & LeBoeuf LLP

Oct. 2009

Sojitz Corporation

July 2013

Debevoise & Plimpton LLP

Sept. 2015

Freshfields Bruckhaus Deringer LLP

Oct. 2019

Counsel and Head of Asia Sanctions, Freshfields Bruckhaus Deringer LLP

Nov. 2019

Chairperson, Japan Sub-Committee, Asia Advisory Committee, Temple
Law School’s Center for Compliance and Ethics (current position)

Jan. 2020

Adjunct Professor, Temple Law School Japan Campus (current position)

May 2021

Head of Sanctions, Freshfields Bruckhaus Deringer LLP

Nov. 2021

Partner elect, Ashurst LLP

Jan. 2022

Partner, Ashurst LLP (current position)＜Status of important concurrent positions＞

3

Adjunct Professor, Temple Law School Japan Campus
Chairperson, Japan Sub-Committee, Asia Advisory Committee, Temple
Law School's Center for Compliance and Ethics
Partner, Ashurst
There is no special interest between the candidate and the Company.
■ Reasons for Nomination as a Director Candidate
During his more than 20 years practicing law both inside and outside Japan, Mr. Dmitrenko has provided
advice to companies across Asia and, in particular, Japanese corporations, with respect to all aspects of crossborder transactions, compliance, and crisis management and also teaches at Temple Law School and has
extensive expertise in this area. As the Company is in need of drastically improving its corporate governancesystem[original text], Mr. Dmitrenko is expected to provide useful advice and supervisory functions to theCompany's management from both a legal and strategic standpoint.
In addition, Mr. Dmitrenko undertakes the position of chairperson at a non-profit organization for sexual
minorities (LLAN) and at the Tokyo English Life Line (TELL Japan) and, through these volunteer activities,
has gained broad expertise on diversity and human rights issues, areas relevant to the Company's business,and is expected to provide useful advice and supervision to the Company in these areas.
For these reasons, Oasis proposes to appoint Mr. Dmitrenko as a Director.
Note: Mr. Dmitrenko is a candidate for Outside Director.

- 35 -

Birthday: June 2, 1959
Candidate No.

Kenji Shinmori

Number of shares of the Company
owned: 0 Shares■ Biography, position, responsibilities, and status of important concurrent positions

Apr. 1982
Apr. 2006
Apr. 2010
Apr. 2011
Apr. 2014
Apr. 20184

Apr. 2019
Apr. 2020
Apr. 2022
Nov. 2023

Sumitomo Corporation
Head of Human Resources, Sumitomo Corporation
Deputy General Manager of Lifestyle & Retail Business, Sumitomo
Corporation
General Manager of Lifestyle & Retail Business Unit, Sumitomo
Corporation
General Manager of Public Relations Department, Sumitomo Corporation
Executive Officer and General Manager of Public Relations Department,
Sumitomo Corporation
President & CEO, Jupiter Shop Channel Co., Ltd.
Advisor, Sumitomo Corporation
Special Advisor, Jupiter Shop Channel Co., Ltd.
Executive Director, Smileseed Cooperative Association (current position)＜Status of important concurrent positions＞

Executive Director, Smileseed Cooperative Association
There is no special interest between the candidate and the Company.
■ Reasons for Nomination as a Director Candidate
Mr. Shinmori engaged in consumer business at a trading house and has substantive expertise andexperience in various types of consumer business. In particular, Mr. Shinmori, as General Manager ofthe Lifestyle & Retail Business Unit at Sumitomo Corporation, supervised the drugstore business
operated by Tomod’s Inc. and, thus, has experience in the Company’s business area. Mr. Shinmori
also held key positions in the corporate division of Sumitomo Corporation.
The scandal the Company is now facing may require strategic reconstruction of its in-hospital
pharmacy business that is a strategic pillar of the Company's business. Additionally, the issue of
insufficiency of dialogue with stakeholders concerning crisis management has been raised. Based on
his expertise in consumer business and the pharmaceutical industry, and his experience as General
Manager of Public Relations Department, among other positions at one of the top Japanesecompanies, Mr. Shinmori is expected to provide useful advice and supervision concerning theCompany's management and disclosure.
For the above reasons, Oasis proposes to appoint Mr. Shinmori as a Director.
Note: Mr. Shinmori is a candidate for Outside Director.
＜Opinion of the Board of Directors of the Company on the Shareholder’s Proposal No. 6＞
The Board of Directors is opposed to Proposal No. 6.
With regard to the Investigation conducted by the External Investigation Team, the Proposing Shareholder claims that “there is no
guarantee that objectivity, neutrality, and expertise were actually ensured during the process for preparation of the investigation report.”
The Proposing Shareholder then claims that “there is an urgent need to appoint individuals who are not from companies having capitaland business alliances [original text] and who have no special interests with the Company, and who have relevant expertise andexperience and will contribute to enhancing the Company's corporate values.”
However, in the first place, the Investigation requested by the Company was carried out by the External Investigation Team. (i) This
team consisting of professional experts did not include any officers or employees of the Group. (ii) The team was led by a highly
specialized and disciplined attorney who had served as a former prosecutor for the Supreme Public Prosecutors Office and other relevant
positions and had no interest in the Group (such as signing an advisory contract) and was composed of attorneys at law with extensive
experience in multiple investigation committees. (iii) The External Investigation Team investigated matters it deemed necessary, without
any limitation or restriction on the scope of the investigation imposed by the Company. (iv) The External Investigation Team conducted
an in-depth investigation, including a digital forensic investigation, over a period of about seven months without any limitation of means.
Therefore, it goes without saying that objectivity, neutrality, and professionalism were ensured. In the Investigation, the Company
believes that the substance of the investigation is important, as described in 1 below, and that the label given to the investigation team,whether it be a “third-party committee” or “External Investigation Team,” has no real positive significance.
As described above, the Company believes that the Investigation was conducted properly and rigorously while taking due consideration
not to affect the progress of the investigation and trial related to the ongoing criminal proceedings of the Case. In fact, the External- 36 -

Investigation Team has not pointed out any lack of cooperation during the Investigation by the Group, and as a matter of fact, no officers
or employees of the Group were involved in the preparation of the contents of the investigation report on the Case (the “Investigation
Report”).
On that basis, as described below, We believe that the candidates that the Board of Directors of the Company will propose at the General
Meeting of Shareholders are the best and most likely to “contribute to enhancing the Company's corporate value” as outside directors.
As noted in 3 below, the Board of Directors of the Company, after deliberation over the proposed candidates by the Nomination andRemuneration Committees of the Company and discussion at the board meeting of the Company based on the committees’ findings,
concluded that the director candidates proposed by the Company should bring new knowledge to the Board of Directors of the Company
and contribute to various measures to further improve the Company's performance, as well as bolster the compliance system andgovernance structure. The Board of Directors of the Company also believes that these director candidates possess diverse and sufficient
skills, including legal and compliance skills relevant to the Case. In addition, each candidate not only has a solid track record in theirrespective fields of expertise, but also has experience as an outside officer at other listed companies and valuable international
experience.
As described above, a board of directors composed of director candidates proposed by the Board of Directors of the Company will not
only be well-balanced in light of the skills matrix, having members equipped with the right skills and experience required for the Boardof Directors of the Company, but also appropriately sized to conduct substantive and active discussions.
On the other hand, although they might bring a wealth of knowledge to the table, the Board of Directors of the Company deems all four
Shareholder-proposed Candidates unfit to serve as its outside directors since they have no experience as outside directors of listedcompanies and little knowledge about the Company and the industry in which it operates. These Shareholder-proposed Candidates also
did not seem to have any strong desire to serve as outside directors of the Company. In addition to that, as detailed below, if thesecandidates become outside directors of the Company, there would be an overlap in the candidates with the knowledge and experiencethat the Board of Directors of the Company deems necessary. If the Shareholder-proposed Candidates were elected as outside directors,
the size of the board of directors would deviate significantly from the size the Board of Directors of the Company considers to beappropriate. Considering all these factors as well as the individual circumstances of each candidate, the Company has determined that
their election as outside directors would not be desirable for the Company.
Therefore, the Board of Directors of the Company opposes this Shareholder Proposal.
Below is additional information on the reason for this Shareholder Proposal.
1. Occurrence of the Case and investigation(1) We announced the occurrence of the Case in its May 10, 2024 press release entitled “Notice Regarding the Establishment of Special
Website for Recommendations on Measures to Prevent Recurrence and Voluntary Return of Officer Remuneration” and in thenotice on the Company website released on the same date, entitled “Report on the investigation by the External Investigation Team
comprised of external experts, and initiatives based on their recommendations on measures to prevent reoccurrence.”
First of all, the Board of Directors of the Company would like to once again apologize to all concerned that the Case occurred.
(2) Following the arrest of the officers on August 31, 2023, We commenced an external investigation on the same day. On October 5of the same year, We as noted above, established the External Investigation Team, consisting of five outside attorneys at law witha high level of expertise and professional discipline with no interest in the Company, to investigate the facts, including the existenceof similar cases, determine the cause, and formulate measures to prevent any recurrence. On May 9, 2024, We received theInvestigation Report from the External Investigation Team.
(3) The Investigation Report points out that the cause of the Case lies in a lack of awareness on the part of the executives and managers
about the risks involved in the sales activities for opening new pharmacies in the On-site Pharmacy business (awareness-relatedcause), as well as deficiencies in the internal control and risk management system for the risks involved in the sales activities for
opening new pharmacies in the On-site Pharmacy business (system-related cause). At the same time, the Investigation Report points
out that the Group's internal control and internal audit functions are concentrated on risk management, efficiency, compliance, etc.
related to operations at each store and audits of those operations, but does not indicate any deficiencies in the supervision of theestablishment and operation of the Group's overall internal control system. It rather recognizes a high level of awareness about theimportance of compliance with anti-bribery and anti-corruption measures as well as self-control imposed by the Group whosebusiness involves frequent contact with doctors and other personnel of national hospitals and the like, public officials, etc.
(4) The Proposing Shareholder claims that, with regard to the investigation of the Case by the External Investigation Team, “theCompany did not disclose this fact for more than six months” and that “governance by the outside directors ... has been inadequate”
on the grounds that the External Investigation Team is not a “third-party committee” and that “there is no guarantee that objectivity,
neutrality, and expertise were actually ensured during the process for preparation of the investigation report.” However, according
to the following facts, all these arguments are used to set up the issue in an external and abstract manner and are clearly misdirective.
 The reason why We refrained from disclosing information on the Case was that We were concerned that the content of the- 37 -

Investigation and its report could affect the trials of individuals in criminal cases and was following the advice of its general
counsel. In fact, on April 18, 2024, the day the first ruling on the criminal case was issued, We disclosed the background of
the Case, the fact that We had established the External Investigation Team to investigate the facts of the Case, including theexistence of similar cases, the investigation of the cause, the formulation of measures to prevent any recurrence, and future
policies. Upon receiving the Investigation Report from the External Investigation Team on May 9 of the same year, We
disclosed the said report and published its recommendations for measures to prevent a recurrence on the following day. In thisway, We have disclosed information in accordance with laws and regulations every time there has been an event that should
be made known to the public, with due consideration not to disclose erroneous or inaccurate information.


The Japan Federation of Bar Associations’ guidelines for third-party committees in corporate misconduct cases (“Third-party
Committee Guidelines”) require a corporation that has established an external investigation team to disclose information, suchas the scheduled date of publishing investigation results with respect to the investigation by the external investigation team. In
the case of the Investigation conducted by the External Investigation Team, however, since We were unable to schedule suchdate in consideration of the possibility that the content of its investigation report might affect individual criminal trials, We
simply did not adopt the “formality” of following the Third-party Committee Guidelines, but otherwise, the Company’s
investigation team complied with the Third-party Committee Guidelines, and the Investigation and the contents of Investigation
Report are sufficiently objective, neutral, and professional.

2.

Our approach to the Case

(1) Our Group is dedicated to improving the health and happiness of our customers by supporting their health and beauty through its
business activities. To attain this goal, which is enshrined in the Group Statement, Our Group is primarily engaged in the dispensing
pharmacy business (business related to the operation of dispensing pharmacies and consulting related to the establishment ofdispensing pharmacies) and the cosmetic and drug store business (business related to the management of cosmetics and drug stores).
As each of these businesses is responsible for the health of people, Our Group recognizes that it is essential to continue sound andtransparent business activities that place the utmost importance on compliance. The Internal Audit Office, which is under the directcontrol of the President and is independent from business management, conducts on-the-spot audits to ensure thorough compliancewith relevant laws and regulations as well as internal rules and regulations. In addition, Our Group has established the Compliance
Committee consisting of all Directors and Corporate Auditors to widely spread and establish corporate ethics and legal compliancesystems not only among the management but also all employees, and the Sustainability Committee (chairperson: President andRepresentative Director) to further strengthen CSR and ESG activities, and We have been working to enhance corporate governance.
(2) Under such circumstances, the occurrence of a compliance incident such as the Case is deeply regrettable to the Company, and we
sincerely apologize for it. We will continue to review and implement what Our Group needs to do in order not to cause a similar
situation again. Specifically, We disclosed that it would steadily implement the measures to prevent recurrence, which wasformulated on May 10, 2024, based on the findings of the External Investigation Team and recommendations for measures toprevent recurrence. As measures to prevent recurrence, the following measures have been implemented up to June 26, 2024 (Fordetails of other measures to prevent recurrence, please visit our website “Report on the investigation by the external investigationteam comprised of external experts, and initiatives based on their recommendations on measures to prevent reoccurrence.”).


Under the direction of President and Representative Director, Kiichi Otani, We strictly and concretely implemented
improvements for the executives and employees involved in the on-site pharmacy business to prevent similar events fromoccurring again (review of the flow and establishment of prohibitions when making a proposal under the public solicitation
proposal method).

Revision of regulations and development of audit systems necessary to fulfill the roles and responsibilities of the Compliance
Committee more appropriately for the purpose of developing, disseminating, and establishing a compliance promotion system(in particular, establishment of direct reporting lines from the Internal Audit Division to the Board of Corporate Auditors, etc.).
Development of risk management rules necessary for strengthening risk management
Preparation and distribution of practical manuals for sales representatives (pocket manuals describing responses to public
medical institutions in sales activities)

 Conducting internal study sessions including legal considerations in sales activities for executives and employees of the Group(3) The Board of Directors of the Company recognizes that promptly identifying and evaluating situations such as the Case, andformulating, implementing and verifying measures to prevent recurrence are required responses to scenes where compliance issues
and corporate governance issues intersect. And We believe that it is a scene where We should show that its corporate governanceis fully functioning while ensuring that all stakeholders, including our shareholders as well as customers, business partners andemployees, are aware of the status of the Group through fair and transparent disclosure.
From this perspective, the Board of Directors of the Company has already begun to further strengthen the compliance promotion
system promptly with the advice of experts. In addition, the Board of Directors of the Company is implementing measures such as- 38 -

the analysis of the cause of the Case in order to establish a further effective governance system. However, there is no goal in theprocess of seeking better governance, and it is necessary to continuously examine and improve the system, and, once again
recognizing these facts, we will continue to work to strengthen the system. As part of this, We have decided to submit a proposal
for the election of candidates for outside corporate auditors, including Ms. Ayako Sano, who is attorney at law and has expertiseand experience in legal affairs and compliance, such as experience in the risk case review team as an outside director of anothercompany, to this General Meeting of Shareholders as a company proposal (For details, please refer to Proposal No. 3), thus We alsoplan to renew the outside corporate auditors whose terms of office expire at the conclusion of this General Meeting of Shareholders,
and to expand the corporate auditors’ audit to implement measures to prevent the recurrence of the Case, which is a compliancecase.
(4) The Proposing Shareholder has also claimed that the Case has already had a material adverse effect on the Company's business, butplease note that this is a factual error or speculation. As of June 26, 2024, there has been no substantial adverse effect on the
Company's business. In fact, as of December 1, 2023, We were suspended from bidding for 55 cases by government agencies andlocal governments following the Case and were unable to participate in public solicitation conducted by such organizations for acertain period of time. However, 54 cases of nomination suspension have ended by June 26, 2024, and no auctions were conductedduring this period, so, there was no substantial impact on the Company's business. In addition, even after the Case was reported, noparticular change has occurred in customers or business partners who use Our Group. We will continue to strive to repay ourcustomers and business partners.
3.

From the viewpoint of improving the Company's corporate value, the Board of Directors of the Company that is composed ofcandidates proposed by the Company is appropriate and best(1) In light of the Case, etc., the Board of Directors of the Company discussed candidates for director after the Nomination andRemuneration Committees of the Company deliberated on the candidate proposals, and took into consideration the findings fromthe Nomination and Remuneration Committees of the Company, in order to further strengthen the compliance promotion system
and governance system, and in turn, improve the corporate value of the Company.
As a result, at this General Meeting of Shareholders, the Board of Directors of the Company decided to make a proposal relating to
the election of director candidates who are listed in Proposal No. 2 (the “Company Proposal”), as these candidates are expected tobring new expertise to the Board of Directors of the Company and contribute to various measures for further improvement ofbusiness performance and strengthening of the compliance promotion and governance systems.
If the director candidates related to the Company Proposal are approved as proposed at the General Meeting of Shareholders, theskill matrix of the Board of Directors of the Company will be as described in pages 25 to 27.
(2) The policy and process of the Board of Directors of the Company for selecting candidates for director at the General Meeting of
Shareholders are as follows.
Appointments, dismissals and nominations of senior management and director candidates are comprehensively judged on thebasis that they are capable of making accurate and prompt decisions while taking into consideration the balance of expertise,
experience and abilities of the management and the Board of Directors of the Company as a whole, and that each individual ispopular and has insight into compliance with laws and regulations and corporate ethics. In addition, the Board of Directors of
the Company will comprehensively consider the balance that can cover each function and division of the Company, theperspective of the right person for accurate and prompt decision-making, and other factors in the election of Directors, and willalso endeavor to give consideration of diversity.
As mentioned in 1. and 2. of Opinion of the Board of Directors of the Company on the Shareholder’s Proposal No. 5, inselecting candidates for independent outside directors, the Company selects candidates who are independent and are
specifically expected to contribute to the enhancement of the corporate value of the Company. In accordance with this policy,
We have gone through a careful decision process from the viewpoint of improving the corporate value of the Company andsecuring common interest of shareholders regarding the director candidates related to the Company Proposal to be submitted
to the General Meeting of Shareholders: after deliberation by the Nomination and Remuneration Committees of the Company,
with conducting the necessary research including interviews with the candidates for director over a period of approximately
10 months from September 2023 to June 2024, and reviewing the composition of the Board of Directors of the Company andthe necessary talent.



The Nomination and Remuneration Committees of the Company were established as advisory committees chaired by President
and Representative Director Kiichi Otani and composed of independent outside director Ms. Noriko Endo and Director
Yamazoe for the purpose of enhancing the fairness, transparency, and objectivity of the procedures pertaining to appointments,
dismissals and nominations of directors. The Nomination and Remuneration Committees of the Company have a system inwhich a majority of their members are independent outside directors to ensure their independence and to enable them to provide
accurate advice and recommendations.
- 39 -

In the process of considering the Company's proposals, the Nomination and Remuneration Committees of the Company
interviewed each of the candidates proposed by the Proposing Shareholder and conducted a face-to-face interview regarding
their expertise, understanding of the Company and the Company's business and industry, relationship with the Proposing
Shareholder, and views on being elected as a director of the Company, etc. Based on the interview results, the Nomination andRemuneration Committees of the Company evaluated each candidate.
(3) Based on the above basic policy and process as well as the findings from the Nomination and Remuneration Committees of theCompany, the Board of Directors of the Company has carefully discussed the proposal and determined that the candidates listed in
Proposal No. 2 are the best candidates for Director of the Company.
At the Board of Directors of the Company composed of the director candidates related to the Company Proposal, five(5) outof the total number of 11 Directors are independent outside directors (the ratio of independent outside directors rose from 36%
to 45%.); the supervisory functions are further strengthened compared to the past; and the Board of Directors of the Company
have an appropriate size and sufficient supervisory functions for fulfilling discussions at the Board of Directors of theCompany. In addition, four(4) of the 11 directors will be female. In such a case, not only will the ratio of female directors on
the Board of Directors of the Company be 36%, which is much higher than the average of companies listed on the Prime
Market of the Tokyo Stock Exchange as of the end of July 2023 (approximately 13.6%), but also the ratio of female directors
will be 43% of the total number of executives of the Company (14) including corporate auditors, which will enable theCompany's executives to get closer to being a management team where many women are active and fulfill their talents.
The Board of Directors of the Company that will be composed of the director candidates related to the Company Proposal
continues to have management experience in listed companies, broad expertise in finance, governance and human resource
development in organizations, and abundant skills and experience in the pharmacy and retail businesses. As described in thereasons for the election of the director candidates related to the Company Proposal, the Board of Directors of the Company
will continue to have the necessary and sufficient skills and experience to exercise the supervisory function for the improvement



of the Company's corporate value over the medium to long term.
Moreover, in order to strengthen the Company's management structure, the following competencies are required with high priority:(i) further enhancement of legal function and compliance in light of this Case, etc., (ii) strengthening of skills in financial strategies
such as investment decision-making, including M&As, which has important significance for improving medium- to long-term
corporate value of the Company, which places the dispensing pharmacy business and cosmetic and drug store business as its corebusiness, and (iii) strengthening of skills in providing substantial advice and supervision in store opening strategies and building
sales floors for further growth and expansion of the steadily growing cosmetic and drug store business, which is growing steadily,with a focus on AINZ & TULPE, which is expanding its business by making its product mixes and building sales floors uniquefrom other stores. In accordance with these requirements, the Company proposes the following three candidates for new
independent outside directors: (i) Ms. Mariko Watahiki (“Ms. Watahiki”), who has served as a judge for long years and been
involved in a large number of civil cases including corporate legal affairs and labor issues. Through her experience in judicial
administration, she also has a record of accomplishment in organizational management such as thorough establishment ofcompliance/governance, human resource management/human resource development, and crisis management; (ii) Mr. Nobumichi
Hattori (“Mr. Hattori”), who, after experiencing supervising M&A advisory services, is currently teaching at a graduate school on
M&As and corporate value assessment, etc. He has substantive expertise in corporate value assessment in capital markets and,from his experience as an outside director of another listed company, possesses a great insight into corporate management such asretail; and (iii) Mr. Shigeki Kimura (“Mr. Kimura”), who has extensive management experience as a director of a major retailbusiness and possesses expertise related to the Company's cosmetic and drug store business, as well as broad expertise andexperience in accounting management, legal affairs and compliance, risk management, etc.
 In order to improve the corporate value of the Company over the medium to long term, in the dispensing pharmacy businessand the cosmetic and drug store business, the Company will expand the scale through the use of organic store openings andM&As, promote its pharmacy and store management strategies such as improving its specialization and expanding productselection, and strengthen its management foundation through human capital strategies, DX and capital finance strategies, andsustainability management. In addition, in consideration of the interests of shareholders, the Company has set a medium-termtarget of 13% ROE and a long-term target of 15% ROE. In order to achieve these targets, it is necessary to improve profits
through higher business efficiency, implement measures to reduce SG&A expense ratios through scale expansion, pursue
further shareholder returns and capital efficiency through acquisition of own shares and other measures, and grow businessthrough strategic investments. The Board of Directors of the Company believes that the Board of Directors of the Compnaythat is composed of the director candidates related to the Company Proposal has sufficient skills and experience necessary forthe realization of these measures and is the best structure from the viewpoint of achieving sound and sustainable growth,

improving corporate value over the medium to long term, and ultimately improving common interests of shareholders.
(4) On the other hand, as outlined below, there are concerns regarding the election of the candidates proposed by the Proposing- 40 -

Shareholder for outside director of the Company.
 None of the candidates proposed by the Proposing Shareholder has experience as an outside director of a listed company. In
addition, it must be said that they do not have an active awareness of the characteristics of the Company's cosmetic and drug
store business as well as the dispensing pharmacy business, which is the core business of the Group.
The Board of Directors of the Company does not necessarily consider executive experience at other listed companies orexpertise of the Company and the industry to be a necessary condition for a new candidate for outside director. However, inlight of the current status of the Company, which operates stores nationwide and has the largest dispensing pharmacy businessin the industry, and where AINZ & TULPE business is rapidly expanding and is positioned as one of the Company's future
focus areas, candidates without such experience and expertise should have clear and specific reasons and grounds for theCompany to believe that, without such experience and expertise, they will be able to conduct substantial and sufficient activities
during their one-year term. However, the Company was not able to find such reasons and grounds for each candidate and had
to conclude that they do not meet preconditions to act as outside director of the Company.
If the candidates proposed by the Proposing Shareholder become outside directors of the Company, there will be overlap withthe candidates for Director with expertise and experience deemed necessary by the Board of Directors of the Company. In
addition, if the candidates proposed by the Proposing Shareholder become outside directors of the Company, the skills matrix
would be less balanced compared to that obtained when only candidates proposed by the Board of Directors of the Company
become outside directors. There is also a concern that the size of the Board of Directors of the Company would be deviatedfrom that considered to be appropriate by the Board of Directors of the Company.
In fact, as a result of interviews conducted by the Nomination and Compensation Committees of the Company with eachcandidate proposed in the Shareholder Proposal, we could not confirm that they are capable of demonstrating their abilities toenhance the corporate value of the Company, as described below.
① Mr. Hajime Yoshitake
Mr. Hajime Yoshitake is described as having expertise in compliance and internal audit. In fact, the content of the
explanation in the interview indicates his expertise, which are highly respectful. However, for the roles when the Boardof Directors of the Company wants to get advice only on his field of expertise such as consulting on internal audits andrelated matters from a specialized perspective, he cannot be considered to be the most suitable candidate for outside
director, which is expected to provide a wide range of advice including management. And as described in (1) and (2)above, the Board of the Company is already implementing various measures in light of the Case to enhance compliancepromotion system and build more effective governance system. As described in (3) above, among the director candidates
related to the Company Proposal, there are the most suitable candidates from the viewpoint of strengthening complianceand internal audit of the Company, including Ms. Watahiki and Mr. Kimura. In addition, if Mr.Hajime Yoshitake becomesan outside director of the Company, there could be duplication of candidates for director with expertise and experience
deemed necessary by the Board of Directors of the Company.
② Mr. Shogo Maeda
The Shareholder Proposal indicates that Mr. Shogo Maeda has expertise in finance in general. However, according to his
background and responses to interviews, his experience is mainly related to asset management within the financial
industry, and he did not provide specific explanations that he has abundant specific experience and expertise in finance ingeneral such as M&As.
We believe that an urgent priority for the Company, whose core business is the pharmacy business centered on dispensaries
and the cosmetic and drug store business centered on store development characterized by high added value, is to enhanceskills in specific financial strategies, such as investment decision-making including M&As, which are important measures
to improve the medium- to long-term corporate value of the Company. Based on this view, the Board of Director of theCompany proposes to newly appoint Mr. Hattori, who clearly possesses such skills and has a solid record ofaccomplishment in M&As, as a candidate proposed by the Company. Mr. Hattori is evaluated as possessing sufficientknowledge of capital markets as well as expertise in investments such as M&As, and has extensive experience as an
outside director of a listed company. Therefore, he is considered to be a candidate who can contribute to the improvementof the Company's corporate value. In addition, if Mr. Shogo Maeda becomes an outside director of the Company, there
could be duplication of candidates for director with expertise and experience deemed necessary by the Board of Directorsof the Company.
③ Mr. Alexander Dmitrenko
Mr. Alexander Dmitrenko is considered to be a legal expert and not in a position to directly engage in business experience
or corporate business execution. If We want to acquire a legal expert related to compliance as an outside director rather
than as a legal advisor, etc. (for global expansion of the business), it should, with the Case in mind, seek an individualwith expertise and experience based on Japanese law. Therefore, as an outside director candidate, the Board of Directors- 41 -

of the Company has proposed Ms. Watahiki. The Board of Directors of the Company believes that it is optimal to utilize
her skills in legal affairs and compliance from an independent standpoint. In addition, if Mr. Alexander Dmitrenko
becomes an outside director of the Company, there could be duplication of candidates for director with expertise andexperience deemed necessary by the Board of Directors of the Company.
④ Mr. Kenji Shinmori
Mr. Kenji Shinmori is described as having experience and expertise in various types of consumer business both in Japanand overseas. However, the drugstore business he was in charge of and the dispensing pharmacy business and cosmetic
and drug store business that the Company operates are two completely different business types in terms of their strategic
positioning from the perspective of their brand image, product mixes, and building store floors. Individuals who can fully
demonstrate their roles as supervisors and checkers on the back of their familiarity with the business are required to haveexperience and expertise different from those in the drugstore business. In addition, his experience and expertise do not
relate to a business that operates stores throughout Japan as the Group does. The Board of Directors of the Company has
proposed Mr. Kimura as a candidate with expertise of the business conducted by the Company. He not only has extensive
management experience as a director of a listed company engaged in a major retail business operating nationwide, butalso has deep understanding in the Company's cosmetic and drug store business, which is characterized by its uniqueproduct mixes and building sales floors. Mr. Kimura is considered to be a candidate who can more contribute to theenhancement of the corporate value of the Company. In addition, if Mr. Kenji Shinmori becomes an outside director of
the Company, there could be duplication of candidates for director with expertise and experience deemed necessary by
the Board of Directors of the Company.
4. Conclusion
Based on the above basic policy and process, the Board of Directors of the Company has carefully discussed each candidate. As a result,the Board of Directors of the Company has determined that the Board of Directors of the Company that is composed of the director
candidates related to the Company Proposal is appropriate and best for the Company to realize sound and sustainable growth, and toachieve improvement in corporate value over the medium to long term, as well as improvement in common interests of shareholders.
Therefore, the Board of Directors of the Company opposes this Shareholder Proposal.

- 42 -

Proposal No. 7: Determination of the fixed remuneration amount paid to each Outside Director(a) Main points of the proposal

We hereby propose to set 10,000,000 JPY as the fixed compensation amount paid to each outside Director for each business
year.
(b) Reasons for proposal
As presented in the appendix.
＜Opinion of the Board of Directors of the Company on the Shareholder’s Proposal No. 7＞
The Board of Directors is opposed to Proposal No. 7.
1.

Reason for opposition(1) After discussion by the Nomination and Remuneration Committees of the Company and the Board of Directors of the Company,
the Company adopted a system in which the remuneration of the Company's directors consists of three combinations: (i) monthly
remuneration, which is fixed remuneration in accordance with the roles and responsibilities of the directors; (ii) bonuses, which are
performance-linked remuneration that enhance the transparency and objectivity of the remuneration determination process andserve as performance incentives; and (iii) non-monetary remuneration, which aims to raise awareness of sustainable growth fromthe same perspective as shareholders. However, the remuneration for outside directors shall be based on a remuneration structure
appropriate to the roles and responsibilities of supervising the management of the Company from an independent and objective
standpoint. Specifically, only (i) monthly remuneration shall be paid.
(2) With respect to the amount of remuneration for each individual director, the Nomination and Remuneration Committees of theCompany prepare drafts on the range of monthly remuneration for each position, the content of evaluation of performance, etc.
related to bonuses, and the amount of non-monetary remuneration for each position within the range of the maximum amount of
remuneration determined by the General Meeting of Shareholders in advance. After resolution by the Board of Directors of theCompany on the drafts, the President and Representative Director is delegated to make decisions on specific content within thescope of the resolution. As described above, the amount of remuneration for each individual outside director is also determinedwith the involvement of the Nomination and Remuneration Advisory Committees of the Company, whose independence is ensured,and by a process that ensures independence from the Board of Directors of the Company, which is the decision-making body forbusiness execution.
(3) On the other hand, if the amount payable to each outside director is decided in advance at a shareholders meeting, as the Shareholder
Proposal argues, it will be difficult to design flexible remuneration in light of changes in the external environment and the market
environment, which, in turn, will hinder flexibility in accordance with the role and responsibility required of outside directors,
disable the Company from determining the appropriate amount of remuneration, and make it difficult to acquire excellent
individuals. For example, the Practical Guidelines for Corporate Governance Systems (CGS Guidelines) released by the Ministryof Economy, Trade and Industry on July 19, 2022 also point out the importance of an appropriate level of remuneration for outside
directors in accordance with their burdens and responsibilities. We believe that, in principle, remuneration for outside directors
should also be determined for each individual outside director in light of the fact that each of them is responsible for a differentrole.
(4) The Proposing Shareholder claims that the current remuneration for outside directors “cannot secure competent individuals,” butthere is no doubt that the outside directors of the Company at present are extremely capable individuals. The candidates for outside
directors proposed by the Company are also competent individuals. The Company has nominated them with the expectation thatthey will contribute to the improvement of the Company's corporate value based on their backgrounds and skills if they are elected
as outside directors at the General Meeting of Shareholders. Thus, the assumption that the Company cannot secure competent
individuals as outside director is incorrect.
(5) Note that there are some cases where the Proposing Shareholder submits a shareholder proposal related to the determination of theamount of remuneration to each outside director (although the specific amount differs from the amount of the Shareholder Proposal)
when the Proposing Shareholder submits to other companies a shareholder proposal for the election of outside directors. It cannot
be ruled out that this is one of the manifestations of a case where the Proposing Shareholder, while aiming at the election of theoutside directors it proposes, offers certain conditions and assurances, at the stage of sounding out candidates, regarding
remuneration to be paid to its candidates if they are successfully elected as outside directors, with an aim to motivate them toconform to the wishes of the Proposing Shareholder.
2. Conclusion
Based on the above, the Board of Directors of the Company opposes this Shareholder Proposal.
- 43 -

- 44 -

Proposal No. 8: Determination of Remuneration for Granting Restricted Shares to Outside Directors(a) Main points of the proposal
While the Company adopted, as a separate stock compensation additional to cash-based remuneration, a remuneration for granting
shares with restriction on transfer, targeting Directors (other than Outside Directors) with the upper limit of 50 million JPY and 50,000
shares per annum (the “Current Stock Compensation Plan”) at the 53rd Annual General Meeting of Shareholders held on July 28,
2022, the Company should newly introduce a separate stock compensation plan (the “Plan”), targeting Outside Directors, which isbased on the Current Stock Compensation Plan, but making the following changes. The Plan is another compensation arrangement,
which is separate from “Proposal No. 4: Revision of Remuneration Amount for Directors” and “Proposal No. 5: Determination of
Remuneration for Granting Restricted Shares to Directors (Excluding outside Directors)”, which were approved at the 53rd Annual
General Meeting of Shareholders held on July 28, 2022.
(1) The content of the Plan
The remuneration to be paid to Outside Directors (the “Eligible Directors”) for the purpose of granting restricted shares under the Plan
shall be monetary claims, and the total amount of such claims shall be within 50 million JPY per year. Moreover, the Board of
Directors will decide the specific timing and allocation of payments to each Eligible Director. The Eligible Directors shall contributeall of the monetary claims provided by this Plan as contributions-in-kind based on resolution by the Board of Directors of theCompany, and then they shall receive the common stock of the Company issued or disposed of by the Company. The total number ofshares of common stock of the Company to be thereby issued or disposed of shall be 50,000 shares or less per year (provided,
however, in the event where the common stock of the Company undergoes a split (including the gratis allotment of the common stockof the Company) or reverse split or other event which requires adjustment of the total number of shares of common stock of theCompany to be issued or disposed of by the Company as restricted shares after the date of the Plan being approved and adopted, thetotal number of the common stock issued or disposed of shall be adjusted within the appropriate range).
The amount to be paid per share will be decided by the Board of Directors within the range not constituting an especially favorable
price to the Eligible Director who receives the common stock, based on the closing price of the Company's common stock on theTokyo Stock Exchange on the business day immediately before each resolution of the Board of Directors (if the trading is notconducted on that day, the latest trading day prior to that). The issuance or disposal of the Company's common stock and thecontribution of monetary claims as contributions-in-kind shall be subject to execution of an agreement for allotment of shares withtransfer restrictions (the “Allotment Agreement”) entered into by and between the Company and the Eligible Director, which includes
the following terms:(2) Summary of the Terms of the Allotment Agreement(i) Transfer Restriction Period
An Eligible Director shall not transfer, render as collateral, or otherwise dispose of the Company's common stock allotted under thisAllotment Agreement (the “Allotted Shares”) from the date of receiving the allotment until retirement from the position of Outside
Director of the Company (the “Transfer Restriction Period”) (the “Transfer Restriction”).
(ii) Handling upon retirement
If an Eligible Director resigns from Outside Director of the Company before expiration of the term determined by the Board of
Directors of the Company in advance (the “Term of Service”), the Company will, as a matter of course, acquire the Allotted Shares
free of charge except for the cases of resignment due to expiration of his/her term of office or death, or any other justifiable reason.
(iii) Lifting of the Transfer Restriction
The Company shall lift the Transfer Restriction for all Allotted Shares when the Transfer Restriction Period expires subject to thecondition that the Eligible Director has been in the position of Outside Director of the Company throughout his/her Term of Service.
Provided, however, (i) if the Eligible Director resigns from the position of Outside Director of the Company due to justifiable reasons
before expiration of the Term of Service, or (ii) if the Eligible Director resigns from a position determined by the Board of Directors of
the Company in advance after expiration of the Term of Service but before expiration of the Transfer Restriction Period for any
reasons other than justifiable reasons, the number of Allotted Shares subject to lifting of Transfer Restriction and the timing for lifting
the Transfer Restriction shall be reasonably adjusted as necessary. Immediately after the Transfer Restrictions have been lifted inaccordance with the above mentioned, the Company will acquire, as a matter of course and free of charge, the Allotted Shares forwhich the Transfer Restrictions have not been lifted.
(iv) Handling in case of group reorganization, etc.
Notwithstanding item (i) above, if (a) a merger agreement in which the Company becomes an extinguished company, (b) a shareexchange agreement or a share transfer plan, in which the Company becomes a wholly owned subsidiary, or (c) other items related to
the Company's reorganization is approved by the General Meeting of Shareholders of the Company (or by the Board of Directors of
the Company, if approval by the General Meeting of Shareholders of the Company is not required for the organizational restructuring,etc.) during the Transfer Restriction Period, the Company shall, prior to the effective date of the subject organizational restructuring
and by resolution of the Board of Directors of the Company, lift the Transfer Restrictions for the number of Allotted Shares reasonably
determined based on the period from the start date of the Transfer Restriction Period to the date of approval of the relevant
reorganization. Immediately after the Transfer Restriction has been lifted in accordance with the above mentioned, the Company will
acquire, as a matter of course and free of charge, the Allotted Shares for which the Transfer Restrictions have not been lifted.
(v) Other matters
Other matters concerning this Allotment Agreement shall be determined by the Board of Directors of the Company.

(b) Reason for the proposal
As presented in the appendix.

- 45 -

＜Opinion of the Board of Directors of the Company on the Shareholder’s Proposal No. 8＞
The Board of Directors is opposed to Proposal No. 8.
1.

Reason for opposition(1) At the 53rd Ordinary General Meeting of Shareholders held on July 28, 2022, the Company passed a resolution to introduce a
restricted stock compensation plan for directors excluding outside directors, with the aim of providing incentives for continuously
improving the Company’s corporate value and promoting further value sharing with shareholders. This plan (the restricted stockcompensation plan) excludes outside directors from the scope of eligibility. As described in 1. of Opinion of the Board of Directorsof the Company on the Shareholder’s Proposal No. 7, the Company presently uses a compensation system for outside directors
consisting of only a basic remuneration paid in a fixed amount.
(2) We are aware that there is a lot of debate going on across the globe on the pros and cons of providing restricted stock compensation
to outside directors, as stated in the Shareholder Proposal, and believe that due consideration should be given to whether suchcompensation is appropriate in the first place. In fact, voting against such a proposal to introduce a stock compensation plan iscurrently the general practice of many institutional investors in Japan.
(3) Note that there are some cases, similar to 1. (5) of Opinion of the Board of Directors of the Company on the Shareholder’s Proposal
No. 7, where the Proposing Shareholder has submitted a shareholder proposal concerning the determination of the amount of
remuneration to each outside directors in order to grant them restricted shares (although the specific amount differs from the amountstated in the Shareholder Proposal) when the Proposing Shareholder submits to other companies a shareholder proposal for theelection of outside directors. It cannot be ruled out that this is one of the manifestations of a case where the Proposing Shareholder,
while aiming at the election of the outside directors it proposes, offers certain conditions and assurances, at the stage of soundingout candidates, regarding remuneration to be paid to its candidates if they are successfully elected as outside directors, with an aim
to motivate them to conform to the wishes of the Proposing Shareholder.
(4) Based on the above, at least at the present stage, a consensus has not been formed to actively introduce restricted stock compensationfor outside directors, and it is appropriate for the Company to closely monitor future discussions on compensation design, mainlyby the Nomination and Remuneration Committees, and the Company does not see any need to implement it.
(5) The Company has confirmed with the outside director candidates proposed by the Company that they do not intend to accept
restricted stock compensation if the proposal to elect them as well as this Shareholder Proposal is approved. Therefore, if thisShareholder Proposal is passed, restricted stock compensation will be granted only to outside director candidates proposed by the
Proposing Shareholder.
2. Conclusion
Based on the above, the Board of Directors of the Company opposes this Shareholder Proposal.

- 46 -

(Appendix) Note: The main points, reason for the proposal and other content of the shareholder proposals have been presented as statedin the respective original documents.
I.

Proposed Agenda Items
Agenda I: Dismissal of two (2) Directors
Agenda 2: Appointment of four (4) Directors
Agenda 3: Determination of the fixed remuneration amount paid to each Outside Director
Agenda 4: Determination of Remuneration for Granting Restricted Shares to Outside Directors

II.

Outline of the proposals and reasons for the proposals
1.

Agenda 1: Dismissal of two (2) Directors

The general reasons applicable to each of the proposals falling within Agenda 1 and Agenda 2 above are as follows:
Taking into account that there is a possibility that the Company's Stock Handling Rules require that reasons provided for each proposal
must not exceed 400 letters in Japanese, we have drafted the reasons for Agenda l and Agenda 2 combined using less than 2400 lettersin Japanese.
As publicized in the Company's press release dated April 18, 2024, former directors of the Company and its subsidiary (the “Defendants”)
were arrested and charged with obstruction of public contract-related auctions, and subsequently convicted (although the Defendants
have since appealed). The Company explained that an investigation team was set up on October 5, 2023, but the Company did notdisclose this fact for more than six months - until the press release dated on April 18, 2024, which was publicized in response to theguilty verdict against the Defendants. The “investigation team” cannot be said to be a “third-party committee” following the “ThirdParty Committee Guidelines” and the “Scandal Response Principles”, which means there is no guarantee that objectivity, neutrality, andexpertise were actually ensured during the process for preparation of the investigation report (the “Investigation Report”) by theinvestigation team.
From the perspective of corporate governance, the above scandal reveals the existence of serious problems in the Company. In thisregard, the Investigation Report clearly points out that the sales approach adopted by the Company and its subsidiary, “can be viewed
as illegal activities or, even if not so, as improper or wrong conduct, not only from the view point of competitor companies, but also
from the viewpoint of common sense, which may evoke substantial reputational risk”. Furthermore, it was revealed that such sales
approach (i.e., proposal replacement) had been used for other cases than the Case, such as Case X and Case Y, as well.
Additionally, the Investigation Report confirmed the fact that the Company's board has never, in substance, reviewed “the legal andcompliance risk with respect to the business activities for development of in-hospital pharmacies” nor controlled nor supervised suchbusiness activities, which means that the Board of Directors of the Company failed to develop effective corporate governance. The
Investigation Report indicates the enhancement of governance by outside officers as a preventative measure against recurrence ofincidents like the Case. The fact that enhancement of governance by outside officers should act as a preventative measure against suchscandals shows such governance by the outside directors to date has been inadequate. In this regard, individuals who lack substantive
independence have assumed the position of the Company's “independent directors” for such a long time and therefore, it cannot be said
that the Company's governance has been working effectively, and this led to the scandal. Therefore, it is necessary to invite competentoutside directors who can truly exercise their governance functions and rebuild the Company's corporate governance structure as soon
as possible.
For example, Mr. Yamazoe had been working for years and held the position of Senior Executive Vice President and Vice Chairman in
Marubeni Corporation (“Marubeni”) which has a close relationship with the Company since Marubeni's investment in Ain in 1999. The
Company has continuously accepted more than seven (7) directors from among individuals who are working for (or had worked for)Marubeni from 1999 to date. Mr. Yamazoe holds a position of director thanks to his long career at Marubeni and, thus, has a conflict inthat he could prioritize interests of Marubeni, a company has a business relationship with the Company, rather than the common interestsof the Company's shareholders.
Furthermore, Mr. Yamazoe once held an independent outside director position in FUJITEC CO., LTD. (“Fujitec”), when Fujitec was- 47 -

accused of corporate governance issues regarding related-party transactions with Fujitec's founding family. Mr. Yamazoe, as anindependent outside director, held a lead position in the investigation and eventually concluded, as chairman of the board, that there
were no issues with the board of directors' resolution from either a legal or corporate governance viewpoint. However, there were later
claims that the investigation was inadequate, so an additional investigation by a third-patty committee was required. That ended withthe abnormal situation that the third-patty committee abandoned the investigation saying they could not build a trust relationship with
Fujitec management. Furthermore, Fujitec itself acknowledged a part of the suspicion of defamation and intimidation or other influenceagainst candidates for director proposed through shareholder's proposals arose. Each of these events occurred when Mr. Yamazoe was
required to show his supervisory responsibility and explicitly reveals his inadequacy as independent outside director.
Mr. lto is a Representative Director of Seven & i Holdings Co., Ltd. (“Seven & i”) which has been in a capital and business alliance with
the Company since 2008. Members from Seven & i, as well as Marubeni, have held director positions for generations even before Mr.
Ito became an outside director. Thus, Mr. lto, like Mr. Yamazoe, has a conflict with the Company and the Company’s general shareholders
in that he could prioritize Seven & i's interests. Outside directors are required to represent the common interests of all shareholders
including minority shareholders, independent from the management, but these two individuals lack substantive independence.
The Company has faced a critical event where the Defendants were arrested and charged with obstruction of public contract-related
auctions, and subsequently convicted in the first trial in relation to the Company’s business and drastic corporate governance structurereform is an urgent issue. In this situation, not only the fact that Mr. Yamazoe and Mr. Ito lack substantive independence (a fundamental
requirement for proper function of outside directors), but also past incidents show Mr. Yamazoe's inability to perform his supervisory
responsibilities. It is necessary to dismiss Mr. Yamazoe and Mr. Ito immediately since the two directors keeping their positions as“independent” outside directors is harmful to the Company.
In view of the fact that the scandal occurred while members from companies having capital and business alliances with the Company
have long been “independent” outside directors, there is an urgent need to appoint individuals who are not from companies having capitaland business alliances and who have no special interests with the Company, and who have relevant expertise and experience and willcontribute to enhancing the Company's corporate values. In order to achieve this purpose, Oasis proposes to appoint Mr. Hajime
Yoshitake, Mr. Shogo Maeda, Mr. Alexander Dmitrenko, and Mr. Kenji Shinmori, and as candidates for the Board of Directors.
(1) Proposal 1(A) Summary
Dismissal of Director Mr. Shigeru Yamazoe Shigeru(B) Reasoning
As given above(2) Proposal 2(A) Summary
Dismissal of Director Mr. Junro Ito(8) Reasoning
As given above
2.

Agenda 2: Appointment of four (4) Directors
The common reasoning for Agenda 2 is as given above. Each of the candidates is proposed to be approved to be a director of theCompany. Agenda 2 of this shareholder's proposal requires separate appointment of each candidate.
(1) Proposal I(A) Summary
Appointment of Mr. Hajime Yoshitake as Director(B) Reasoning- 48 -

As given above(C) Biography and other information about the candidate
Hajime Yoshitake

Birthday: July 1, 1956
Number of shares of the Company owned: 0 Shares■Biography, position, responsibilities, and status of important concurrent positions
Apr, 1979

The Kyowa Bank Ltd. (currently Resona Bank, Limited.)

Apr, 1991

Manager, New York Branch, The Kyowa Saitama Bank, Limited,

Apr, 2002

Nihon Unisys, Ltd. (currently BIPROGY Inc.)

Oct, 2007

Part-time Lecturer, Professional Graduate School of Meiji University (current position)

Jun, 2008
Jun, 2009

Director, The Institute of lnternal Auditors-Japan (current position)
Executive Officer and General Manager of Internal Audit Division, Resona Holdings, Inc.,

Jun, 2011

Full-time CompanyAuditor, Saitama Resona Bank Limited

Apr, 2013

Part-time Lecturer, College of Law of Nihon University

Jun, 2016

Full-time Outside, Independent CompanyAuditor, TAIYO YUDEN CO., LTD.

May, 2021

Advisor, Specified Non-profit Corporation Japan Platform

July, 2023

Special Advisor to International Internal Audit Standards Board, The Institute of Internal Auditors,
Inc.

May, 2024
July, 2024

Auditor, Specified Non-profit Corporation Japan Platform (current position)
The Institute of Internal Auditors, Inc. Institute Relations Committee Member (scheduled to assume
the position in July 2024)<Status of important concurrent positions>Part-time Lecturer, Professional Graduate School of Meiji University Director, The Institute oflnternal Auditors-Japan
Specified Non-profit Corporation Japan Platform, Auditor
The Institute of Internal Auditors, Inc. Institute Relations Committee Member

There is no special interest between the candidate and the Company.
■ Reasons for Nomination as a Director Candidate
Yoshitake has many years of experience as a company auditor in the private sector, as well as leading teaching positions at
educational institutions as an internal audit professional and as director of the Institute of Internal Auditors-Japan. He is aleader in internal auditing and related fields in Japan. He also has experience working at major financial institutions and IT
vendors, and a wealth of expertise in finance and IT and digital transformation.
In the Investigation Report addressing the case in which the directors of the Company and its subsidiary were arrested, itis
confirmed that the Internal Audit Section of the Company had not conducted the necessary audit and warning and, therefore,
drastic improvement in the corporate governance system on a company-wide basis (including internal auditing) is now
required. Itis expected that Mr. Yoshitake will provide useful advice and supervisory functions to the management of theCompany based on his expertise and experience in corporate governance including internal auditing cultivated over many
years.
For these reasons, Oasis proposes to appoint Mr. Yoshitake as a Director.
Note: Mr. Hajime Yoshitake is a candidate for Outside Director.
(2) Proposal 2(A) Summary
Appointment of Mr. Shogo Maeda as Director.
(B) Reasoning
As given above(C) Biography and other information about the candidate- 49 -

Shogo Maeda

Birthday: January 1, 1957
Number of shares of the Company owned: 0 Shares■Biography, position, responsibilities, and status of important concurrent positions
Jul, 1981

Japan Equity Analyst at Overseas Investment Advisor Office, Nomura Securities Co., Ltd.

Oct, 1985

Investment Banking Group, New York Headquarter, Manufacturers Hanover Trust Company

Nov, 1987

Nomura Investment Management Co., Ltd. (currentlyNomura Asset Management Co., Ltd.)

Sep, 1989

Senior Portfolio Manager, Nomura Investment Management Co., Ltd.

Sep, 1994

Head of Japanese Equities, Goldman Sachs Asset Management Co., Ltd.

Apr, 2002

Director, Asia-Pacific Equities CTO, and Head of Japan Equities, Goldman Sachs AssetManagement Co., Ltd.

Jan, 2006

Head of Japan Equities, Schroder Investment Management Limited

Dec, 2012

Director and Head of Japan Equities, Schroder Investment Management (Japan) Limited

Mar, 2018

Executive Director, The Grew Bancroft Foundation (current position)< Status of important concurrent positions>Executive Director, The Grew Bancroft Foundation

There is no special interest between the candidate and the Company.
■Reasons for Nomination as a Director Candidate
Mr. Maeda has held important positions, such as director, in various financial institutions, and has a deep expertise in financein general and capital markets in particular.
The Company's stock price has been stagnant for a long period of time, and its total shareholder return (TSR) has beensignificantly lower than TOPIX on a long-term basis. Although the Company is in an emergent situation as the directors of
the Company and its subsidiary were arrested, the Company's communication with investors was insufficient such thatappropriate disclosure to investors concerning the investigation into such scandal was delayed. Under these circumstances,as Mr. Maeda has a deep expertise in finance and capital markets, it can be expected that Mr. Maeda can provide usefuladvice and supervision to the management of the Company, not only for implementation of appropriate M&A and business
investment, but also in considering actions for enhancing the corporate value and dialogue with shareholders given that oneof the Company's important business challenges is to engage in and/or respond to the future restructuring of the industry.
For these reasons, Oasis proposes to appoint Mr. Maeda as a Director.
Note: Mr. Shogo Maeda is a candidate for Outside Director.
(3) Proposal 3(A) Summary
Appointment of Mr. Alexander Dmitrenko as Director(B) Reasoning
As given above(C) Biography and other information about the candidate- 50 -

Alexander Dmitrenko

Birthday: May 25, 1977
Number of shares of the Company owned: 0 Shares■Biography, position, responsibilities, and status of important concurrent positions
Mar 2001

Roy Elliott O' Connor LLP

Oct 2006

Dewey & LeBoeuf LLP

Oct 2009

Sojitz Corporation

Jul 2013

Debevoise & Plimpton LLP

Sep 2015

Freshfields Bruckhaus Deringer LLP

October 2019

Counsel and Head of Asia Sanctions, Freshfields Bruckhaus Deringer LLP

Nov 2019

Chairperson, Japan Sub-Committee, Asia Advisory Committee, Temple Law School's Center for
Compliance and Ethics (current position)

Jan 2020

Adjunct Professor, Temple Law School Japan Campus (current position)

May2021Counsel and Head of Sanctions, Freshfields Bruckhaus Deringer LLP

Nov 2021

Partner elect, Ashurst LLP

Jan 2022

Partner, Ashurst LLP (current position)< Status of important concurrent positions>
Adjunct Professor, Temple Law School Japan Campus
Chairperson, Japan Sub-Committee, Asia Advisory Committee, Temple Law School's Center for
Compliance and Ethics
Partner, Ashurst

There is no special interest between the candidate and the Company.
■Reasons for Nomination as a Director Candidate
During his more than 20 years practicing law both inside and outside Japan, Mr. Dmitrenko has provided advice tocompanies across Asia and, in particular, Japanese corporations, with respect to all aspects of cross-border transactions,compliance, and crisis management and also teaches at Temple Law School and has extensive expertise in this area. As theCompany is in need of drastically improving its corporate governance system, Mr. Dmitrenko is expected to provide usefuladvice and supervisory functions to the Company's management from both a legal and strategic standpoint.
In addition, Mr. Dmitrenko undertakes the position of chairperson at a non-profit organization for sexual minorities (LLAN)
and at the Tokyo English Life Line (TELL Japan) and, through these volunteer activities, has gained broad expertise on
diversity and human rights issues, areas relevant to the Company's business, and is expected to provide useful advice andsupervision to the Company in these areas.
For these reasons, Oasis proposes to appoint Mr. Dmitrenko as a Director.
Note: Mr. Dmitrenko is a candidate for Outside Director.
(4) Proposal 4(A) Summary
Appointment of Mr. Kenji Shinmori as Director(B) Reasoning
As given above(C) Biography and other information about the candidate- 51 -

Kenji Shinmori

Birthday: June 2, 1959
Number of shares of the Company owned: 0 Shares■Biography, position, responsibilities, and status of important concurrent positions
Apr, 1982

Sumitomo Corporation

Apr, 2006

Head ofHunan Resources, Sumitomo Corporation

Apr, 2010

DeputyGeneral Manager of Lifestyle & Retail Business, Sumitomo Corporation

Apr, 2011

General Manager of Lifestyle & Retail Business Unit, Sumitomo Corporation

Apr, 2014

General Manager of Public Relations Department, Sumitomo Corporation

Apr, 2018

Executive Officer and General Manager of Public Relations Department, Sumitomo Corporation

Apr, 2019

President& CEO, Jupiter ShopChannel Co., Ltd.

Apr, 2020

Advisor, Sumitomo Corporation

Apr, 2022

Special Advisor, Jupiter Shop Channel Co., Ltd.

Nov, 2023

Executive Director, Smileseed Cooperative Association (current position)< Status of important concurrent positions>Executive Director, Smileseed Cooperative Association

There is no special interest between the candidate and the Company.
■Reasons for Nomination as a Director Candidate
Mr. Shinmori engaged in consumer business at a trading house and has substantive expertise and experience in various
types of consumer business. In particular, Mr. Shinmori, as General Manager of the Lifestyle & Retail Business Unit at
Sumitomo Corporation, supervised the drugstore business operated by Tomod's Inc. and, thus, has experience in the
Company's business area. Mr. Shinmori also held key positions in the corporate division of Sumitomo Corporation.
The scandal the Company is now facing may require strategic reconstruction of its in hospital pharmacy business that is a
strategic pillar of the Company's business. Additionally, the issue of insufficiency of dialogue with stakeholders concerning
crisis management has been raised. Based on his expertise in consumer business and the pharmaceutical industry, and his
experience as General Manager of Public Relations Department, among other positions at one of the top Japanesecompanies, Mr. Shinmori is expected to provide useful advice and super-vision concerning the Company's managementand disclosure.
For the above reasons, Oasis proposes to appoint Mr. Shinmori as a Director.
Note: Mr. Shinmori is a candidate for Outside Director.
3.

Agenda 3: Determination of the fixed remuneration amount paid to each Outside Director(A) Summary
We hereby propose to set 10,000,000 JPY as the fixed compensation amount paid to each outside Director for each business
year.
(B) Reason
In order to properly supervise the operation of the board of directors which operates under the strong influence of theCompany's founder, Mr. Otani, and to enhance corporate value, the Company must appoint individuals who are significantly
experienced, highly competent, and truly independent as outside directors. To that end, the Company should pay outside
directors fair compensation corresponding to their role and responsibility. However, the Company's compensation foroutside directors has been around 5,000,000 JPY per annum on average for the past many years. This low compensation
cannot secure competent individuals. It is also necessary to increase the predictability of compensation in order to make theoutside director position attractive to people with truly high qualifications. Furthermore, by deciding the amount payable toeach Director at the shareholders ‘meeting, it may ensure transparency in the decision-making process and may also improve
the independence of the outside directors. Therefore, Oasis proposes to set a fixed remuneration in the amount of 10,000,000
JPY per annum for each outside director.
4. Agenda 4: Determination of Remuneration for Granting Restricted Shares to Outside Directors(A) Summary
While the Company adopted, as a separate stock compensation additional to cash-based remuneration, a remuneration for
granting shares with restriction on transfer, targeting Directors (other than Outside Directors) with the upper limit of 50
million JPY and 50,000 shares per annum (the “Current Stock Compensation Plan”) at the 53rd Annual General Meetingof Shareholders held on July 28, 2022, the Company should newly introduce a separate stock compensation plan(the “Plan”),- 52 -

targeting Outside Directors, which is based on the Current Stock Compensation Plan, but making the following changes.
The Plan is another compensation arrangement, which is separate from “Proposal No. 4: Revision of Remuneration Amountfor Directors” and “Proposal No. 5: Determination of Remuneration for Granting Restricted Shares to Directors (Excluding
outside Directors)”, which were approved at the 53rd Annual General Meeting of Shareholders held on July 28, 2022.
(1) The content of the Plan
The remuneration to be paid to Outside Directors (the “Eligible Directors”) for the purpose of granting restricted shares
under the Plan shall be monetary claims, and the total amount of such claims shall be within 50 million JPY per year.
Moreover, the Board of Directors will decide the specific timing and allocation of payments to each Eligible Director.
The Eligible Directors shall contribute all of the monetary claims provided by this Plan as contributions-in-kind based on
resolution by the Board of Directors of the Company, and then they shall receive the common stock of the Company issued
or disposed of by the Company. The total number of shares of common stock of the Company to be thereby issued or
disposed of shall be 50,000 shares or less per year(provided, however, in the event where the common stock of the Company
undergoes a split(including the gratis allotment of the common stock of the Company) or reverse split or other event which
requires adjustment of the total number of shares of common stock of the Company to be issued or disposed of by theCompany as restricted shares after the date of the Plan being approved and adopted, the total number of the common stock
issued or disposed of shall be adjusted within the appropriate range).
The amount to be paid per share will be decided by the Board of Directors within the range not constituting an especiallyfavorable price to the Eligible Director who receives the common stock, based on the closing price of the Company's
common stock on the Tokyo Stock Exchange on the business day immediately before each resolution of the Board of
Directors(if the trading is not conducted on that day, the latest trading day prior to that).The issuance or disposal of theCompany's common stock and the contribution of monetary claims as contributions-in-kind shall be subject to execution ofan agreement for allotment of shares with transfer restrictions (the “Allotment Agreement”) entered into by and between
the Company and the Eligible Director, which includes the following terms:(2) Summary of the Terms of the Allotment Agreement(i) Transfer Restriction Period
An Eligible Director shall not transfer, render as collateral, or otherwise dispose of the Company's common stock allotted
under this Allotment Agreement (the “Allotted Shares”) from the date of receiving the allotment until retirement from theposition of Outside Director of the Company (the “Transfer Restriction Period”) (the “Transfer Restriction”).
(ii) Handling upon retirement
lf an Eligible Director resigns from Outside Director of the Company before expiration of the term determined by the Boardof Directors of the Company in advance (the “Term of Service”), the Company will, as a matter of course, acquire the
Allotted Shares free of charge except for the cases of resignment due to expiration of his/her term of office or death, or any
other justifiable reason.
(iii) Lifting of the Transfer Restriction
The Company shall lift the Transfer Restriction for all Allotted Shares when the Transfer Restriction Period expires subject
to the condition that the Eligible Director has been in the position of Outside Director of the Company throughout his/herTerm of Service. Provided, however, (i) if the Eligible Director resigns from the position of Outside Director of theCompany due to justifiable reasons before expiration of the Term of Service, or (ii) if the Eligible Director resigns from a
position determined by the Board of Directors of the Company in advance after expiration of the Term of Service but before
expiration of the Transfer Restriction Period for any reasons other than justifiable reasons, the number of Allotted Sharessubject to lifting of Transfer Restriction and the timing for lifting the Transfer Restriction shall be reasonably adjusted asnecessary. Immediately after the Transfer Restrictions have been lifted in accordance with the above mentioned, theCompany will acquire, as a matter of course and free of charge, the Allotted Shares for which the Transfer Restrictions havenot been lifted.
(iv) Handling in case of group reorganization, etc.
Notwithstanding item (i) above, if (a) a merger agreement in which the Company becomes an extinguished company,(b) ashare exchange agreement or a share transfer plan, in which the Company becomes a wholly owned subsidiary, or (c) otheritems related to the Company's reorganization is approved by the General Meeting of Shareholders of the Company (or by- 53 -

the Board of Directors of the Company, if approval by the General Meeting of Shareholders of the Company is not required
for the organizational restructuring, etc.) during the Transfer Restriction Period, the Company shall, prior to the effective
date of the subject organizational restructuring and by resolution of the Board of Directors of the Company, lift the Transfer
Restrictions for the number of Allotted Shares reasonably determined based on the period from the start date of the Transfer
Restriction Period to the date of approval of the relevant reorganization.
Immediately after the Transfer Restriction has been lifted in accordance with the above mentioned, the Company will
acquire, as a matter of course and free of charge, the Allotted Shares for which the Transfer Restrictions have not been
lifted.
(v) Other matters
Other matters concerning this Allotment Agreement shall be determined by the Board of Directors of the Company.

(B) Reason for the proposal
The Company has already adopted an arrangement of the Remuneration for Granting
Restricted Shares as non-cash-based remuneration. However, such arrangement is available only to Directors other than
Outside Directors. The guidelines of the Ministry of Economy, Trade and Industry1 mention granting stock compensationof which the number of shares is not affected by performance as a key option for enhancing Outside Directors' sense ofownership as members of the board and aligning their interests with those of the shareholders. Taking into account the casethat, last year, the Director of the Company was arrested, prosecuted, and convicted in the first trial, the Company is now
facing a situation that requires improvement of governance, and, for the Company's mid- and long-term growth, it isindispensable for the Board of Directors of the Company to work as one team including Outside Directors to aggressively
undertake the necessary actions aimed at enhancing the Company's corporate value. To that end, the Company needs toadopt the Plan in order to retain exceptional candidates with rich diversity and have a sense of ownership as Outside
Directors.

1

Page 65 of the Ministry of Economic, Trade and industry’s “Practical Guide for Corporate Governance System (COS Guidelines)”（https://www.meti.go.jp/policy/economy/keiei_innovation/keizaihousei/pdf/cgs/guideline2022.pdf）- 54 -

Business Report(From May 1, 2023 to April 30, 2024)

1.

Current Status of Company Group(1)

Status of businesses in fiscal year under review(i)Progress and results of businesses
In the consolidated fiscal year under review (May 1, 2023 to April 30, 2024), the Japanese economy showed signs of a
gradual recovery, including the restoration of the flow of people after the COVID-19 virus was changed to a Class 5
infectious disease as well as the easing of restrictions on activities. On the other hand, the situation continues to remain
uncertain due to rising prices, fluctuations in the financial and capital markets, etc.
In the 2024 Noto Peninsula Earthquake that occurred in January 2024, none of our employees were injured; however, 29
stores in the three Hokuriku prefectures and Niigata Prefecture suffered damage such as fallen medicine and merchandise,
as well as damage or destruction to buildings. This forced us to temporarily close two of our pharmacies; however, we
made great efforts toward resuming the provision of healthcare in the disaster-affected areas as quickly as possible, and in
addition to resuming operations, we provided monetary support for the early recovery and reconstruction of the disaster
affected areas. It should be noted that the impact of this earthquake on our performance is minor.
Our Group works to provide medical and retail services in line with our mission to “Contribute to local healthcare” and“Provide beauty and happiness,” which are two of our materiality areas. In addition, we regard diversity and inclusion as
one of the important initiatives in the materiality area of “ensure sound management base,” and the AIN Group is actively
promoting diversity by creating working environments and organizations that are welcoming and motivating for all
employees. We have been recognized as a “parenting support company” that supports a balance between work andchildcare, and in July 2023 our core operating company, AIN PHARMACIEZ INC., was awarded “Platinum Kurumin
Certification” by the Minister of Health, Labour and Welfare.
In November 2022, we formulated the “CSR Procurement Policy and Guidelines”; in July 2023, we held a briefing session
for trading partners with the objective of implementing CSR procurement across the entire supply chain; and we conducteda CSR survey in order to ascertain the current situation in August, the following month. Through these efforts, we are
evaluating and analyzing our supply chain risk, communicating in a manner that ensures compliance with the CSR, andthrough this, we are strengthening the CSR collaboration system with our trading partners.
In February 2024, we were graded “B” in the evaluation of efforts and disclosure of information on “climate change” by“CDP,” an international environmental NGO that has the world’s largest database for the disclosure of environmental
information.
In addition, we have been certified as an “Outstanding Organizations Recognition Program” by the Nippon Kenko Kaigi
for the four consecutive years since 2021, and in March 2024, we were awarded an “Outstanding Health and Productivity
Management Organization 2024 (Large Corporation Section [White 500])” for the first time, placing us in the top 500
companies.
As we continued to engage with our active efforts for various materialities described above, in April 2024, our Group’s
ESG efforts were well received, and we were awarded grade “A” in the MSCI ESG Ratings.
Looking to the future as well, our Group will continue to strive to make all stakeholders “people welcome to theircommunities” by contributing to the resolution of various social issues through our business.
As of the end of the consolidated fiscal year under review, our Group had a total of 1,312 stores.
54th business term(from May 1, 2022 toApril 30, 2023)

55th business term(from May 1, 2023 toApril 30, 2024)

Amount (Million yen)Amount (Million yen)

ChangeAmount (Million yen)

Change (%)

Net sales

358,742

399,824

41,081

11.5%

Operating profit

16,004

20,432

4,428

27.7%

Ordinary profit

17,064

21,377

4,312

25.3%

Profit attributable to owners ofparent9,234

11,401

2,167

23.5%

ROE

7.5%

8.7%

The status of sales per business segment of the Company Group is as follows.

Dispensing Pharmacy BusinessWe are striving to provide the functions of primary care pharmacists and pharmacies by coordinating with medical- 55 -

institutions, using patient medication notebooks and the like to centrally and continuously manage prescription information,and providing home-based healthcare. Through these efforts, we are enabling patients to receive medical care in theirfamiliar local community with peace of mind.
In addition, we are actively working on the promotion of digital transformation in order to improve convenience forpatients; in addition to the official AIN Pharmacy app that was launched in 2022, we opened the official AIN Pharmacy
LINE account in October 2023, making our prescription sending service even more convenient to use.
During the consolidated fiscal year under review, prescription costs have increased backed by the increasing trend toprescribe higher-cost medicines, including drugs to combat COVID-19. The number of prescriptions has also increased dueto the easing of restrictions on hospital outpatient visits as a result of the classification of COVID-19 as a Class 5 infectious
disease, as well as the strengthening of our function as primary care pharmacists and pharmacies, and improvements topatient services, such as shortened wait times.
As for the status of open stores during the consolidated fiscal year under review, including M&A, a total of 40 stores wereopened across the group, 13 stores were closed, and five stores were transferred, resulting in the Group having a total of
1,231 pharmacies.

Cosmetic and Drug Store Business
As the flow of people inside and outside Japan recovers, our number of customers has remained steady, customer purchasetrends have shifted from infection control products to beauty products, etc., which are our strength, and this has led toincreased unit prices. Sales of Asian cosmetics in particular, which we have been focusing on through measures such as
exclusives and pre-sales, have been growing. In addition, our opening and moving of stores to more favorable locations has
also been a success, leading to steady net sales as well as an improvement in earnings capabilities due to the increased
operational efficiency, etc. We will continue to monitor purchasing trends and will work toward strengthening our productlineup and creating attractive sales area layouts.
As for the status of open stores during the consolidated fiscal year under review, with the opening of six stores and theclosing of three stores, we had a total of 81 stores.

Please note that as announced on August 31, 2023, two former Directors of the Company and our Group companies werearrested on suspicion of obstruction of bidding in an auction related to a public contract during their tenure, and were
subsequently indicted and convicted. We have received an investigation report concerning this case from an investigative
team comprising solely external experts, and on May 10, 2024, we announced specific measures to prevent recurrence aswell as future efforts, based on the recommendations on measures to prevent recurrence provided in the investigation
report. In addition, four Representative Directors of the Company and Group companies have made a partial return of theirremuneration. Our company will strive to regain the trust of all of our stakeholders as soon as we can by further promoting
compliance and strengthening our risk management promotion system, and engaging in group-wide efforts on the measures
to prevent recurrence.
(ii) Status of capital expenditure and financing
The total amount of capital expenditure in the fiscal year under review is ¥11,650 million, and mainly consists of thefollowing.
A. Property, plant and equipment (Store facilities, etc.)¥9,168 million

B. Leasehold and guarantee deposits¥2,482 million

Note that there is no significant financing that should be stated.

(iii) Status of the acquisition of shares, etc. of other companies or other corporate realignment
The Company’s consolidated subsidiary AIN PHARMACIEZ INC. acquired the shares of eight dispensing pharmacy
business companies to make them into subsidiaries during the fiscal year in question.

- 56 -

(2)Status of property, profit and loss for last three fiscal years

Category

52nd business53rd business54th business55th business
term

term
(from May 1,

term(from May 1,

term(from May 1,(Fiscal year
under review)2020 to April 30, 2021 to April 30, 2022 to April 30,(from May 1,
2021)
2022)
2023)
2023 to April 30,
2024)
Net sales(Million yen)

297,305

316,247

358,742

399,824

Ordinary profit(Million yen)

12,64916,041

17,064

21,377

Profit attributable to owners ofparent(Million yen)

6,697

7,092

9,234

11,401(Yen)

189.04201.47262.87324.64(Million yen)

203,662

212,461

231,750

249,409

Earnings per share
Total assets

Net assets(Million yen)
115,837
119,010
126,546
135,411
Note: Earnings per share has been calculated with the number of the Company’s shares owned by the Custody Bank of Japan, Ltd.
(Trust Account E) being included in treasury shares, with these being deducted from the average number of shares (52ndbusiness term: － shares, 53rd business term: － shares, 54th business term: － shares, 55th business term: 27,000 shares)(3)

Status of material subsidiaries(i)

Status of material subsidiaries
Ratio ofCompany’s voting
rights(%)

Company nameShare capital(Million yen)

AIN PHARMACIEZ INC.

100

100.0

Management of dispensing pharmacies andcosmetics and drug stores

DAICHIKU Co., Ltd.

10

100.0

Management of dispensing pharmacies

Asahi Pharmacy Co., Ltd.

10

100.0

Management of dispensing pharmacies

Kom Medical Co., Ltd.

3

100.0

Management of dispensing pharmacies

AIN SHINSHU Co., Ltd.

10

100.0

Management of dispensing pharmacies

Main business activities

PHARMACY Co., Ltd.

50

100.0

Management of dispensing pharmacies

WHOLESALE STARS Co., Ltd.

50

100.0

Sales of drugs, etc.

MEDIWEL Corp.
208
91.3
Healthcare consulting
Notes: 1. The voting rights ratio of the Company is the direct ownership ratio.
2. On November 1, 2023, the dispensing pharmacy business of Nishinihon Pharmacy Co., Ltd., a wholly owned subsidiaryof the Company, was transferred to AIN PHARMACIEZ INC. through an absorption-type company split.
3. The consolidated subsidiaries of the Company number 28 in total, including the above eight material subsidiaries.
(ii)

Status of specified wholly-owned subsidiaries upon the final day of the fiscal year under review
Company nameAIN PHARMACIEZ INC.

(iii)

Address
5-2-4-30,
SapporoHigashisapporo,

Total carrying amount
Shiroishi-ku,

Total assets of thecompany

Million yen

Million yen

37,502

146,171

Other
Status of material business partnerships
Other party

Seven & i Holdings Co., Ltd.

Description of agreement
Partnership agreement for stores, sales and product development under
dispensing pharmacy and cosmetics and drug store businesses- 57 -

(4)Issues that should be addressedAbout each businessIn the Dispensing Pharmacy Business, the environment surrounding dispensing pharmacies has been changing, with theintroduction of the certified pharmacy system in August 2021, in which prefectural governors certify pharmacies as having
specified functions, the relaxation of requirements for repeat prescriptions, the online pharmaceutical guidance in April 2022,
and responding to the introduction of digital prescriptions in January 2023. These events have resulted in a diversification ofpatient needs, a growing demand for contributing to local healthcare through the provision of higher-quality patient services andas “primary care pharmacists and pharmacies,” and in addition, the roles and responsibilities of dispensing pharmacies havebecome even greater.
Our Group has further strengthened the expertise of our pharmacists, has actively participated in home medical care, and in
addition, we are continuing to provide an environment where patients can continue their prescription medication in their familiar
local community with peace of mind, through the “Anytime AIN Pharmacy” app, the official AIN Pharmacy app.
In addition, we are continuing with our business strategy of increasing the scale of our business through the opening of newstores, M&A, etc., and maximizing economies of scale.
In the Cosmetic and Drug Store Business, the COVID-19 pandemic has resulted in changes to the areas in which customers
move and their purchasing trends.
We will continue to promote investments in order to improve the brand power of “AINZ & TULPE” by opening new stores infavorable locations that will reliably attract customers, strengthening products that meet customer needs, etc., while at the sametime also working on cost optimization.
It should be noted that during the recent spread of the COVID-19 infection, we made thorough infection prevention measures our
top priority and have taken action in line with our Business Continuity Plan (BCP) in order to fulfill our social responsibilities as
a Group, such as continuing our dispensing operations, and in the case of any emergencies occurring in the future, we will takeprompt and appropriate action based on the BCP.



Toward the realization of a sustainable society
The Group is dedicated to improving the health and happiness of our customers by supporting their health and beauty through its
business activities. The Group has consistently strived to attain this goal, which is enshrined in the Group Statement, by taking asound and ethical approach in all its corporate activities. Going forward, we will seek to grow in a sustainable way by adjusting
and responding to the needs of our customers and all our other stakeholders, while also practicing sustainability management thatcreates social, environmental and economic value.
In December 2020, the Company identified the materiality (important issues) that it should address. In May 2021, it establishedprimary initiatives for those materiality areas as well as KPI and fiscal 2025 targets and commenced specific initiatives.

* Please see here for details on sustainability.
https://www.ainj.co.jp/corporate/english/sustainability/* Please see here for details on efforts to reinforce the promotion of employee health (Health and productivity management at theAIN Group).
https://www.ainj.co.jp/corporate/sustainability/social/employees/health-management.html (Japanese only)- 58 -

2.

Current Status of Company(1)

Status of shares (As of April 30, 2024)(i)

Total number of authorized shares

44,000,000 shares(ii) Total number of issued shares

35,428,212 shares(iii) Number of shareholders

16,145(iv) Major shareholders (Top ten shareholders)Number of shares held(Thousand shares)

Shareholder name

Holding ratio(%)

Kiichi Otani

3,239

9.17

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

3,116

8.82

Seven & i Holdings Co., Ltd.

2,750

7.78

OASIS JAPAN STRATEGIC FUND LTD.

2,633

7.45

OASIS INVESTMENTS II MASTER FUND LTD.

1,911

5.41

North Pacific Bank, Ltd.

1,743

4.94

Retirement Benefit Trust managed by Mizuho Trust & Banking Co.,
Ltd. (Marubeni Corporation account)

1,594

4.51

The Hokkaido Bank, Ltd.

1,472

4.17

Custody Bank of Japan, Ltd. (Trust account)

953

2.70

Oasis Japan Strategic Fund Ltd.

729

2.07

Notes:(v)

1. Holding ratios have been calculated after deducting 100,091 treasury shares.
2. Shares held in the Retirement Benefit Trust managed by Mizuho Trust & Banking Co., Ltd. (Marubeni Corporationaccount) are shares contributed by Marubeni Corporation for a retirement benefit trust.
3. According to the Large Shareholding Report (change in holding report) provided for public inspection on June 16, 2023,
Sprucegrove Investment Management Ltd. held 4,451 thousand shares as of June 12, 2023 (shareholding ratio of 12.57%).
However, as the Company was not able to confirm the actual number of shares held as of the end of the fiscal year underreview, the above list of major shareholders is based on the number of shares held recorded in the Register of
Shareholders.
4. According to the Large Shareholding Report (change in holding report) provided for public inspection on May 1, 2024,
Oasis Management Company Limited held 5,274 thousand shares as of April 23, 2024 (shareholding ratio of 14.89%).
However, as the Company was not able to confirm the actual number of shares held as of the end of the fiscal year underreview, the above list of major shareholders is based on the number of shares held recorded in the Register of
Shareholders.
Status of shares granted to Company officers as consideration for the execution of duties during the fiscal year underreview
Number of shares

Directors (Excluding outside Directors)
Notes:

2,462 shares

Number of persons eligible for
granting of shares
8

1. Details on share remuneration at the Company are stated under (2) Status of Company officers, (iv) Remuneration of
Directors and Corporate Auditors, (a) Decision policy regarding the content of individual remuneration for Directors, c.
Policy on determining the content of performance indicators for performance-linked remuneration and calculation
methods for the number or amount thereof as well as policy on determining the content of non-monetary remunerationand calculation methods for the number or amount thereof.
2. The above also includes the shares delivered to Directors that have retired.

- 59 -

(2)Status of Company officers(i)Status of Directors and Corporate Auditors (As of April 30, 2024)
Position

Responsibilities in the Company, and significant concurrent positions
outside the Company

Name

President and Representative
Director

Kiichi Otani

Representative Senior Managing
Director

Shoichi Shudo

In charge of Store Development and Division Manager of Dispensing
Pharmacy Operations Management
President and Representative Director of AIN PHARMACIEZ INC.

Representative Senior Managing
Director

Toshihide Mizushima

In charge of Cosmetic and Drug Store Operations Management,
Operational Support and Digital Promotion

Representative Senior Managing
Director

Miya Oishi

In charge of External Affairs
Director of AIN PHARMACIEZ INC.

Director

Rieko Kimei

Division Manager of Personnel
Director of AIN PHARMACIEZ INC.

Director

Nobuyuki Takakura

In charge of Risk Management
Senior Managing Director of AIN PHARMACIEZ INC.

Director

Kaori Ishikawa

Division Manager of Cosmetic and Drug Store Operations Management
Director of AYURA LABORATORIES Inc.

Director

Noriko Endo

Outside Director of Hankyu Hanshin Holdings, Inc.
Outside Director of Techpoint, Inc.
Outside Director of Japan Elevator Service Holdings Co., Ltd.
Outside Member of the Board of NIPPON TELEGRAPH AND
TELEPHONE CORPORATION
Professor of Research Council, Waseda University

Director

Junro Ito

Seven & i Holdings Co., Ltd.
Senior Managing Executive Officer, Representative Director, Chief
Sustainability Officer, Division Manager of ESG Development andSupervising Officer of Superstore operation

Director

Shigeru Yamazoe

Outside Director (Audit and Supervisory Committee Member) of
Bewith, Inc.

Director

Hideki Kuriyama

Professor of Hakuoh University
Specially Appointed Professor of Hokkai-Gakuen University
Chief Baseball Officer of Hokkaido Nipponham Fighters

Standing Corporate Auditor

Koichi Kawamura

Corporate Auditor

Akira Ibayashi

Corporate Auditor

Osamu Muramatsu

Notes:

Chairman of Executive Partners, Inc.
Corporate Auditor of Asahi Pharmacy Co., Ltd.
1. Directors Noriko Endo, Junro Ito, Shigeru Yamazoe and Hideki Kuriyama are outside Directors.
2. Corporate Auditors Akira Ibayashi and Osamu Muramatsu are outside Corporate Auditors.
3. Standing Corporate Auditor Koichi Kawamura served as the Department Manager of Administration for the Company
from May 2003 to May 2012, as the Department Manager of Accounting for AIN MEDICAL SYSTEMS INC. from April
2000 to April 2003, and as the Corporate Auditor for that company from April 2005 to July 2012. In that capacity, heengaged in procedures for the settlement of accounts, the preparation of financial statements or audit duties, etc., and assuch has considerable knowledge of finance and accounting.
4. The Company has submitted notification to the Tokyo Stock Exchange that Directors Noriko Endo, Junro Ito, Shigeru
Yamazoe, Hideki Kuriyama, and Corporate Auditors Akira Ibayashi and Osamu Muramatsu have been designated as
independent officers as provided for by the aforementioned exchange.
5. Managing Director Masato Sakai retired left the Company due to dismissal on November 13, 2023. It should be noted thatat the time of his retirement, he was Division Manager of Dispensing Pharmacy Operations Management, and held thesignificant concurrent position of being Representative Director and President of AIN PHARMACIEZ INC., a position
from which he was resigned on November 1, 2023.

(ii) Summary of content of liability limitation contracts
Pursuant to the provisions of Article 427, paragraph (1) of the Companies Act and the Articles of Incorporation, theCompany has concluded contracts with outside Directors and with Corporate Auditors to limit their liability for damages
under Article 423, paragraph (1) of the same act.
The maximum amount of liability for damages based on the contracts is the amount stipulated by laws and regulations.

- 60 -

(iii) Summary of content of directors and officers liability insurance policy
The Company has entered into a directors and officers liability insurance policy as provided for in Article 430-3, paragraph(1) of the Companies Act with an insurance company. The policy covers losses, including damage compensation and court
costs, that may be incurred by the insured.
The insured under said insurance policy include the Directors, Corporate Auditors, employees in management or
supervisory positions, and their inheritors, of the Company and its subsidiaries (including second-tier subsidiaries). The
Company covers insurance premiums for all insured in full.

(iv) Remuneration of Directors and Corporate Auditors
A.

Decision policy regarding the content of individual remuneration for Directors
The Company resolved its decision policy pertaining to the content of individual remuneration for Directors at themeeting of the Board of Directors that was held on June 29, 2022.
Additionally, with respect to individual remuneration for Directors for the fiscal year under review, the Board of
Directors has verified that the decision method pertaining to the content of remuneration and the content of the
remuneration decided upon is consistent with the decision policy resolved by the Board of Directors and that thereport made by the voluntary Nomination and Remuneration Committee is respected, and has determined that they arein line with said decision policy.
The content of the decision policy regarding the content of individual remuneration for Directors is as follows.
a.

Basic policy
Directors of the Company are required to work towards improved business performance and sustainable growth
while sharing values with our stakeholders so that the Group can fulfill its social role and responsibility bycontributing to local healthcare and providing beauty and happiness. The remuneration for Directors of theCompany consists of a system comprising monthly fixed remuneration according to roles and responsibilities,
bonuses which are performance-linked remuneration that enhance the transparency and objectivity of the
remuneration decision process and provide performance incentives, and non-monetary remuneration forrecognizing the same perspectives on sustainable growth as shareholders.
However, the remuneration of outside Directors shall consist of a system suitable for the roles andresponsibilities of supervising the management of the Company from an independent and objective standpoint.

b.

Policy regarding determination of amount of monetary remuneration and the calculation method thereof
Monetary remuneration (that which is neither performance-linked remuneration nor non-monetary
remuneration) shall be “basic remuneration” as a fixed monthly amount and shall be decided upon following
comprehensive consideration of position, responsibilities, years in office, balance with employee wages, trendsof other companies in the same industry and past payment history.

c.

Policy on determining the content of performance indicators for performance-linked remuneration andcalculation methods for the number or amount thereof as well as policy on determining the content of nonmonetary remuneration and calculation methods for the number or amount thereof
Bonuses are determined after comprehensive consideration of consolidated operating profit and ROE for eachperiod and value not directly manifested by financial value including contribution to environmental and social
issues in each period, as well as dividends, balance with employee bonuses, trends of other companies in thesame industry and past payment history.
Non-monetary remuneration shall be paid by restricted stock (RS), and a standard amount of monetary
remuneration claim determined by position and responsibility shall be granted each year up to a total of ¥50
million, with allocation of common stock through in-kind contribution of the monetary remuneration claims.
The number of shares of the Company’s common stock to be allocated as restricted stock remuneration shall be
no more than 50,000 shares per year.
In the future, the Company will continue to keep a close eye on requests from its shareholders and otherstakeholders, trends at competitors, etc. and have the Nomination and Remuneration Committee appropriately
examine the ideal form of incentives linked with short-term to medium/long-term performance.

d.

Policy regarding decision of composition ratio for each type of remuneration
Taking into consideration the characteristics of the business, business environment, and trends of othercompanies, the composition ratio of remuneration for Directors other than outside Directors is designed so thatthe composition ratio of monthly remuneration, bonuses, and non-monetary remuneration is approximately
70:20:10. Only monthly remuneration will be paid to outside Directors.

e.

Decision method regarding the content of individual remuneration for Directors
The specific details for amounts of remuneration for each individual shall be commissioned to the President andRepresentative Director within the scope of determined parameters by resolution of the Board of Directors after
the Nomination and Remuneration Committee prepares a draft of the range of monthly remuneration amount foreach position, the content of evaluation of performance related to bonuses and the amount of non-monetary- 61 -

remuneration for each position.
The Nomination and Remuneration Committee is comprised of a majority of independent outside Directors forthe purpose of enhancing the fairness, transparency and objectivity of the procedures for determining
remuneration for Directors with matters pertaining to remuneration of Directors determined based on the above
policy.
f.

Matters relating to delegation of decision-making on content of individual remuneration for Directors
The Board of Directors has determined that the President and Representative Director is in the best position toevaluate each Director while taking into consideration the performance of the Company as a whole and otherfactors, and has delegated to President and Representative Director Kiichi Otani, the decision-making on thespecific individual remuneration amounts for basic remuneration, performance-linked remuneration, and nonmonetary remuneration for each Director. The President and Representative Director makes decisions on thedetails delegated to him within the range of amounts resolved by the Board of Directors following the report of
the Nomination and Remuneration Committee.

B.

Total amount of remuneration for the fiscal year under review

Officer category

Directors(Of whom, outside Directors)
Corporate Auditors(Of whom, outside Corporate
Auditors)
Total(Of whom, outside officers)
Notes:(v)

Total amount of
remuneration(Million yen)

Total amount of remuneration by type(Million yen)Basicremuneration

Performancelinked
remuneration

Non-monetary
remuneration

Number of
eligible officers(Persons)

239

187

39

12

12

(22)

(22)

(－)

(－)

(3)

21

20

0

－

3

(13)

(13)

(－)

(－)

(2)

260

208

39

12

15

(36)

(36)

(－)

(－)

(5)

1. Salary amounts paid to Directors who also serve as employees for their duties as employees are not included in theamounts paid to Directors.
2. The amount of remuneration for Directors was resolved at the 53rd Ordinary General Meeting of Shareholders held on
July 28, 2022 as ¥500 million or less per year (of which ¥50 million or less per year was for outside Directors. Salaries for
Directors who also serve as employees for their duties as employees were not included). The number of Directors as of
the conclusion of the Ordinary General Meeting of Shareholders in question was 12 (four of whom were outside
Directors).
Furthermore, in addition to monetary remuneration, stock remuneration of ¥50 million or less per year and a maximum
number of 50,000 shares per year (not granted to outside Directors) were resolved at the 53rd Ordinary General Meetingof Shareholders held on July 28, 2022. The number of Directors as of the conclusion of the Ordinary General Meeting of
Shareholders in question (excluding outside Directors) was eight.
3. The amount of remuneration for Corporate Auditors was resolved at the 22nd Ordinary General Meeting of Shareholders
held on July 30, 1991 as ¥30 million or less per year. The number of Corporate Auditors as of the conclusion of theOrdinary General Meeting of Shareholders in question was two.
4. The total amount of performance-linked remuneration above includes an allowance for bonuses to directors of ¥16 million
for the fiscal year under review (¥16 million for seven Directors; does not apply to outside Directors or to Corporate
Auditors). Regarding bonuses, results are stated under “1. (1) Status of businesses in fiscal year under review” based on
the policy indicated in (iv) Remuneration of Directors and Corporate Auditors. Additionally, payments were made within
the range of amounts reported by the Nomination and Remuneration Committee.
5. The number of Directors as of the final day of the fiscal year under review was 11 (four of whom were outside Directors).
The reason for the disparity with the above number of Directors is due to the inclusion of two Directors (who were notoutside Directors) who resigned following the expiration of their term of service as of the conclusion of the 54th Ordinary
General Meeting of Shareholders held on July 28, 2023, one Director (who was not an outside Director) who retired as aresult of resignation on November 13, 2023, and to the presence of two sitting Directors (one of whom was an outside
Director) who were not compensated.

Matters relating to outside officers
A.

Status of significant concurrent positions in other corporations, etc. and the relationship between the Company andsaid other corporations, etc.

Director Noriko Endo concurrently serves as Professor of Research Council, Waseda University, Outside Director ofHankyu Hanshin Holdings, Inc., Outside Director of Techpoint, Inc., Outside Director of Japan Elevator Service
Holdings Co., Ltd. and Outside Member of the Board of NIPPON TELEGRAPH AND TELEPHONECORPORATION.
There is no special relationship between the Company and said corporation or various companies.
- 62 -



Director Junro Ito concurrently serves as Senior Managing Executive Officer, Representative Director, Chief
Sustainability Officer, Divisionl Manager of ESG Development and Supervising Officer of Superstore Operation of
Seven & i Holdings Co., Ltd.
Seven & i Holdings Co., Ltd. is a major shareholder of the Company. Ito-Yokado Co., Ltd., a subsidiary of said
company, and a Company subsidiary have real estate lease transactions, but the amount of such transactions is lessthan 1% of the annual consolidated net sales of both companies.



Director Shigeru Yamazoe concurrently serves as Outside Director (Audit and Supervisory Committee Member) of
Bewith, Inc.
There is no special relationship between the Company and said company.



Director Hideki Kuriyama concurrently serves as Professor of Hakuoh University, Chief Baseball Officer of
Hokkaido Nipponham Fighters and Specially Appointed Professor of Hokkai-Gakuen University. Note that he retired
from the post of Manager of Japan National Baseball Team on May 31, 2023.
There is no special relationship between the Company and said corporations or organizations, etc.

Corporate Auditor Osamu Muramatsu concurrently serves as Chairman of Executive Partners, Inc. and Corporate
Auditor of Asahi Pharmacy Co., Ltd.
There is no special relationship between the Company and Executive Partners, Inc. Asahi Pharmacy Co., Ltd. is a
subsidiary of the Company.

B.

Total amount of officer remuneration received by outside offers from Company subsidiaries, etc.
No applicable matters are present.

C.

Status of main activities of outside officers in the fiscal year under review

Category

Name

Status of main activities and overview of duties performed with respect toexpected roles

Director

Noriko Endo

Ms. Noriko Endo attended 11 out of the 12 meetings of the Board of Directors
held during the fiscal year under review. She has worked as an editor of an
economic magazine, covering a diverse range of fields, including the retailand distribution businesses, and has gained a wealth of knowledge through herreporting activities. In addition, she has gained extensive knowledge of energy
and environmental issues through experiences such as conducting public
policy research on energy policy. Furthermore, based on her experience as an
Outside Director of other listed companies, she has deep knowledge ofcorporate management in the IT, communications, railway, and real estatebusinesses, etc., and has given advice at meetings of the Board of Directors of
the Company with a focus on business strategy and compliance.
Additionally, at the two meetings of the Nomination and Remuneration
Committee that were held in the fiscal year under review, she was involved in
discussions regarding the succession plan, the skill set of the Board of
Directors, and the scope of executive remuneration, and provided appropriate
supervision of the Company’s corporate governance.

Director

Junro Ito

Mr. Junro Ito attended all 12 meetings of the Board of Directors held during
the fiscal year under review. Based on his wide range of insight about ESG(environment, society, and governance) in a major retailer and experience ofmanaging Group subsidiaries and associates in a corporate entity, he has madeappropriate remarks from multilateral perspectives regarding the Company’s
management strategies and other agenda deliberations.
As a Representative Director of a major retailer, he has gained extensive
experience as a manager, as well as deep insight into ESG (environment,
society, and governance) and sustainability, including the promotion ofsustainability across the entire value chain, as the Chief Sustainability Officerof said retailer. In addition, he also has extensive knowledge in risk
management, accounting and finance, social marketing, etc., and has provided
advice at meetings of the Company's Board of Directors with a focus on
business strategy and governance.

- 63 -

Category

Name

Status of main activities and overview of duties performed with respect toexpected roles

Director

Shigeru Yamazoe

Mr. Shigeru Yamazoe attended all 12 Board of Directors meetings that were
held during the fiscal year under review. Based on his wide range ofknowledge and experience in corporate management as a manager of a major
trading company, he gave appropriate advice from multilateral perspectives
regarding the Company’s management strategies and other agenda
deliberations.
Additionally, at the two meetings of the Nomination and Remuneration
Committee that were held in the fiscal year under review, he was involved in
discussions regarding the succession plan, the skill set of the Board of
Directors, and the scope of executive remuneration, and provided appropriate
supervision of the Company’s corporate governance.

Director

Hideki Kuriyama

Mr. Hideki Kuriyama attended 10 out of the 12 meetings of the Board of
Directors held during the fiscal year under review. He has extensive
knowledge of governance and human resource development at organizations
from experiences such as managing a professional baseball team as well as theJapan national baseball team, and worked as a professor at the Faculty ofBusiness Administration of a university; he has provided advice at meetingsof the Board of Directors mainly from a human capital investment
perspective.

Corporate Auditor

Akira Ibayashi

Mr. Akira Ibayashi attended all 12 meetings of the Board of Directors and all
12 meetings of the Board of Corporate Auditors, which were held in the fiscal
year under review.
In the meetings of the Board of Directors and the Board of Corporate
Auditors, he made necessary remarks based on his specialist knowledge andexperience in financial affairs gained during his tenure at a financial
institution.

Corporate Auditor

Osamu Muramatsu

Mr. Osamu Muramatsu attended all 12 meetings of the Board of Directors andall 12 meetings of the Board of Corporate Auditors, which were held in thefiscal year under review.
In the meetings of the Board of Directors and the Board of Corporate
Auditors, he made necessary remarks based on his specialist knowledge andexperience in financial affairs gained during his tenure at a major securities
firm.

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Consolidated Financial Statements
Consolidated Balance Sheet(As of April 30, 2024)(Millions of yen)
Item

AmountItem

AssetsCurrent assets

AmountLiabilities
110,743

Current liabilities

103,232

Cash and deposits

48,611

Accounts payable - trade65,506

Accounts receivable - trade15,852

Short-term borrowings

3,467

Merchandise

24,299

Income taxes payable

4,532

Supplies

345

Deposits received

19,063

Short-term loans receivable

144

Provision for bonuses

3,394

Accounts receivable - other

16,000

Provision for bonuses for directors (andother officers)

19

Other current assets

5,490

Contract liabilities

465

Allowance for doubtful accounts(1)

Other current liabilities

6,784

Non-current assets

138,666

Non-current liabilities

10,765

Property, plant and equipment

43,450Long-term borrowings

3,227

Buildings and structures

27,122

Lease liabilities

38

Land

10,207Retirement benefit liability

4,662

Construction in progress

1,896

Other noncurrent liabilities

2,837

Other tangible fixed assets

4,224

Total liabilities

Intangible assets

51,242

Goodwill

44,066

Shareholders’ equity

134,847

Other intangible assets

7,176

Share capital

21,894

Investments and other assets

43,973

Capital surplus

20,131

Investment securities

3,345

Retained earnings

95,257

Treasury shares(2,436)Long-term loans receivable
Deferred tax assets
Retirement benefit asset

Net assets

671
6,403
34

113,998

Accumulated other comprehensive
incomeValuation difference on available-for-salesecurities

459
234

Leasehold and guarantee deposits

25,186

Remeasurements of defined benefit plans

225

Other investments and other assets

8,608

Non-controlling interests

104

Allowance for doubtful accounts(276)

Total assets

Total net assets

249,409- 65 -

Total liabilities and net assets

135,411249,409

Consolidated statement of income(From May 1, 2023 to April 30, 2024)(Millions of yen)
Item

AmountNet sales

399,824

Cost of sales

340,301

Gross profit

59,522

Selling, general and administrative expenses

39,090Operating profit

20,432Non-operating income

1,373Interest income

52

Dividend income

40

Commission income

9

Other

1,270

Non-operating expenses

428Interest expenses

39

Other

389

Ordinary profit

21,377Extraordinary income

441

Gain on sale of non-current assets

417

Other

23

Extraordinary losses

2,738

Loss on sale and retirement of non-current assets

331

Impairment losses

1,737

Other

668

Profit before income taxes

19,080

Income taxes - current

7,980

Income taxes - deferred(309)

Profit11,409Profit attributable to non-controlling interests

7

Profit attributable to owners of parent

11,401- 66 -