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

-1-Securities code: 8182
June 7, 2024
To Shareholders with Voting Rights:
Yoshikazu Motosugi
Representative Director andPresident
Inageya Co., Ltd.
6-1-1 Sakae-cho, Tachikawa City,
Tokyo, JapanNOTICE OF CONVOCATION OF
THE 76th ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
We hereby inform you that the 76th Annual General Meeting of Shareholders of Inageya Co., Ltd. (the“Company”) will be held as described below.
In convening this General Meeting of Shareholders, the Company has taken measures to provide theinformation contained in the Reference Documents for the General Meeting of Shareholders (Items forElectronic Provision) electronically. Please access each website below to view this information.
The Company’s website
https://www.inageya.co.jp/ir/holder/ (Japanese only)
Tokyo Stock Exchange website (TSE Listed Company Information service)https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show
Please access the above, enter ”Inageya” in the issue name (company name) or “8182” in the securities
code field, select “Basic Information,” “Documents for Public Inspection” from “Documents for Public
Inspection/PR Information,“ then “Notice of General Shareholders Meeting /Informational Materials for a
General Shareholders Meeting” to view.
Please review the attached Reference Documents for the General Meeting of Shareholders listed in theitems for electronic provision, and exercise your voting rights.
1. Date and Time:

Wednesday, June 26, 2024 at 10:00 a.m. Japan time
Reception will start at 9:00 a.m.

2. Place:

Carlo, 4th floor, HOTEL emisia TOKYO TACHIKAWA
2-14-16 Akebono-cho, Tachikawa City, Tokyo, Japan

3. Meeting Agenda:
Matters to be reported:1. The Business Report and Consolidated Financial Statements for theCompany’s 76th Fiscal Year (April 1, 2023 - March 31, 2024) andresults of audits by the Accounting Auditor and the Audit &Supervisory Board of the Consolidated Financial Statements
2. Non-consolidated Financial Statements for the Company’s 76th Fiscal
Year (April 1, 2023 - March 31, 2024)
Proposals to be resolved:
Appropriation of Surplus
Proposal 1:
Approval of Share Exchange Agreement between the Company and United
Proposal 2:
Super Markets Holdings Inc.
Election of Nine (9) Directors
Proposal 3:-2-

Proposal 4:
Proposal 5:Election of One (1) Audit & Supervisory Board Member
Appointment of an Accounting Auditor

In the event of any modifications to the items for electronic provision, the Company will post themodifications on the respective websites.
In accordance with provisions of laws and regulations as well as Article 16 of the Company’s Articles
of Incorporation the following items for electronic provision are not provided in the documents
attached to this Convocation Notice. Accordingly, a portion of the Business Report that was auditedby the Audit & Supervisory Board Members and the Consolidated Financial Statements and Nonconsolidated Financial Statements that were audited by the Audit & Supervisory Board Members andthe Accounting Auditor in preparing the Auditor’s Report is included in this Convocation Notice.
“Matters Regarding Accounting Auditors,” “Matters Regarding Establishment of Systems to
Ensure the Properness of Operations” and the “Policy on Determining the Dividends of Surplus,etc.” in the Business Report; “Consolidated Statement of Changes in Equity” and “Notes toConsolidated Financial Statements” of the consolidated financial statements; “Non-consolidated
Statement of Changes in Equity” and “Notes to Non-consolidated Financial Statements” of the
non-consolidated financial statements; “Accounting Auditor’s Audit Report on Consolidated
Financial Statements,” “Accounting Auditor’s Audit Report on Non-consolidated Financial
Statements,” and “Audit Report by the Audit & Supervisory Board” in the Audit Reports; and“Contents of Non-consolidated Financial Statements for the final fiscal year of United Super
Markets Holdings Inc.” in Proposal 2 “Approval of Share Exchange Agreement between the Company
and United Super Markets Holdings Inc.”-3-

How to exercise your voting rights

If you exercise your voting rights by mailPlease indicate your approval or disapproval for each proposed resolution on the enclosed voting right
exercise sheet and return the sheet to us before the deadline. If approval or disapproval is not indicatedon the sheet, it will be treated as indicating your approval.



Deadline: The sheet must arrive by 6:00 p.m. on Tuesday, June 25, 2024.
If you exercise your voting rights via the Internet

Please access the below-listed voting right exercise website, follow the instructions on the screen, andregister your approval or disapproval for each proposed resolution.



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



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

Voting right exercise website: https://evote.tr.mufg.jp/
For details, please see the next page.



Deadline: Voting rights must be exercised by 6:00 p.m. on Tuesday, June 25, 2024.
Attendance at the General Meeting of Shareholders



The General Meeting of Shareholders will be held from 10:00 a.m. on Wednesday, June 26, 2024.



Please bring the enclosed voting right exercise sheet with you and submit it to the reception at themeeting site. Please do not rip the right part of the sheet.

If your agent is attending the meeting, the agent needs to bring the voting right exercise sheet and yourpower of attorney. Only one agent per shareholder having a voting right of the Company may attend
the meeting.

*Any changes to the details and operations of the General Meeting of Shareholders will be announced on
our website at https://www.inageya.co.jp/ir/holder/.
*Photography, video recording and audio recording of the meeting, as well as storing thereof and posting
thereof on SNS are strictly prohibited.

-4-

Information on the exercise of voting rights via the Internet
Deadline: Voting rights must be exercised by 6:00 p.m. on Tuesday, June 25, 2024.


By reading the QR code

You can log in to the voting right exercise website without entering the voting right exercise code or password.
1.

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

2.


Please enter your approval or disapproval according to instructions on the screen afterward.
By entering the voting right exercise code and password

1.

Please access the voting right exercise website.
https://evote.tr/mufg.jp/

2.

Please enter the login ID and temporary password written on the voting right exercise sheet.

3.

Please enter your approval or disapproval according to the instructions on the screen afterward.

Any cost incurred in connection with accessing the voting website (e.g. Internet connection fees) should beborne by the shareholder.
If you have any questions on how to vote via Internet, please call Stock Transfer Agency Department(helpdesk) of Mitsubishi UFJ Trust and Banking Corporation at 0120-173-027 (between 9:00 – 21:00)[For institutional investors]
You may also exercise your voting rights via the electronic voting right exercise platform operated by Investor
Communications Japan, Inc. (ICJ).

-5-Live Streaming
We will broadcast the General Meeting of Shareholders live over the Internet, allowing shareholders towatch from the comfort of their homes as detailed below. We will take privacy into consideration during thefilming at the venue, but please be aware that shareholders may unavoidably appear in the video. Please
understand this in advance.
Date and Time: From June 26 (Wed.), 2024, at 10:00 AM until the end of the General Meeting of Shareholders
Viewing method:(1) Please access the designated website at https://engagement-portal.tr.mufg.jp/
your laptop or smartphone.

using(2) Please enter your login ID and password-Login ID (12 digits): 3252-

XXXX-XXXX-(8-digit shareholder number)

XXX(leave them blank)*Please make a note of your shareholder number before submitting the voting right exercise sheet.
-Password (11 digits): XXXXXXX2024(7-digit postal code of your registered address (as of March 2024)(3) Once you have logged in, please click “live streaming” button.
Please accept terms and conditions of the live streaming by ticking the “accept” box before accessing thelive streaming.
Important notes regarding viewing the live streaming(1) Watching the live streaming does not constitute attendance at the General Meeting of Shareholders
under the Companies Act, and we will not be able to accept any statements, including exercising voting
rights or asking questions. Voting rights must be exercised in advance either in writing or via Internet.
(2) Due to unavoidable circumstances, it may become impossible to conduct the live streaming. In suchcase, we will notify you on our website (https://www.inageya.co.jp/ir/holder/).
(3) Viewing is limited to the shareholder themselves.
(4) It is strictly prohibited to film, record, save, or share the live streaming on social media or any otherplatforms.
(5) Please be aware that issues with the video or audio may occur depending on your computer environment(model, performance, etc.) or Internet connection (line condition, speed, etc.).
(6) Any costs associated with viewing (Internet connection fees, communication charges, etc.) will be borneby the shareholder.
[Questions on how the designated website, login method, login ID or password]
Stock Transfer Agency Department, Mitsubishi UFJ Trust and Banking Corporation
Tel: 120-676-808 (Accept calls: (1) between 9:00 – 17:00 on weekdays until June 25 (Tue.); and (2) between
9:00 and the end of the General Meeting of Shareholders on June 26 (Wed.))[Questions relating to live streaming]
V-cube, Inc.
Tel: 03-6833-6879 (Accept calls between 9:00 and the end of the General Meeting of Shareholders on June 26(Wed.))-6-

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

Appropriation of Surplus

We would like to appropriate our surplus as follows.
Matters concerning year-end dividend
We regard the return of profits to our shareholders to be an important management policy. While upholding
a basic policy of paying out stable dividends on an ongoing basis, we comprehensively considered ourconsolidated business performance and future business development as well as internal reserves forincreasing our earning power and strengthening our financial strength, and decided that we would like to
pay a year-end dividend as follows.
(1) Type of dividend property
Cash(2) Matters concerning the allotment of dividend property and the total amount thereof
7.50 yen per share of common stock of the Company for a total amount of 348,257,213 yen
The annual dividend for the fiscal year under review, including interim dividends, will be 15.00 yen
per share.
(3) Effective date of distribution of surplus
June 27, 2024

-7-

Proposal 2:

Approval of Share Exchange Agreement between the Company and United Super Markets
Holdings Inc.

The Company and United Super Markets Holdings Inc. (“U.S.M.H”) decided at their respective Board of
Directors meetings held on April 18, 2024 to implement a share exchange effective November 30, 2024 inwhich U.S.M.H will become the wholly owning parent company in the share exchange and the Company
will become the wholly owned subsidiary in the share exchange (the “Share Exchange”), and U.S.M.H
will make the Company a wholly owned subsidiary of U.S.M.H (“make Inageya a wholly owned
subsidiary”). On the same date, the Company and U.S.M.H concluded a share exchange agreement (the“Share Exchange Agreement”) regarding the Share Exchange.
This proposal requests our shareholders to approve the Share Exchange Agreement. The reasons for
conducting the Share Exchange, the details of the Share Exchange, and other matters related to this
Proposal are described below.
If this proposal is approved, prior to the effective date of the Share Exchange, the common stock of theCompany (“Inageya Stock”) is scheduled to be delisted from the Prime Market of the Tokyo Stock
Exchange, Inc. (“Tokyo Stock Exchange”) (the last trading date of the shares will be November 27, 2024).
1. Reasons for Conducting the Share Exchange
U.S.M.H was established on March 2, 2015 through a joint share transfer by The Maruetsu, Inc.
(“Maruetsu”), Kasumi Co., Ltd. (“Kasumi”), and MaxValu Kanto Co., Ltd. (“MV Kanto”; hereinafter,
U.S.M.H, Maruetsu, Kasumi, and MV Kanto are collectively referred to as “U.S.M.H Group
Companies” ). U.S.M.H is comprised of twelve (12) consolidated subsidiaries and three (3) affiliatedcompanies (as of June 2024). U.S.M.H welcomes the participation of like-minded supermarket
companies in the Tokyo metropolitan area under the basic philosophy to “offer customers healthy andvaluable choices in food, cultivate deep relationships to build prosperous local communities, andconstantly pursue innovation and move with the times.” U.S.M.H aims to become the number one
supermarket company in the Tokyo metropolitan area by establishing 1,000 stores with one (1) trillion
yen in sales as the core of AEON CO., LTD. (“AEON”)’s Kanto supermarket business.
Inageya was founded in 1900 in Tachikawa City, Tokyo, and operates supermarket and drug store
businesses in one (1) metropolitan area and three (3) prefectures in the Kanto region (Tokyo, Kanagawa,
Saitama, and Chiba). Inageya aims to contribute to society as a “helpful local business” by promoting“sukoyakeku,” which means “contributing to the realization of healthy, rich and warm daily lives, anda healthier society for customers” and practicing “the way of the merchant” which refers to “a groupof people who can experience the joy of their customers as their own joy.”
AEON is promoting management based on the basic philosophy of “pursuing peace, respecting
humans, and contributing to local communities, always with customers as our starting point” and aims
to become a “company that contributes to local communities to the upmost of its ability” by responding
to increasingly diverse environmental changes and by continuing to provide customers with a better
lifestyle and improved convenience as competition across business lines is expected to intensify against
the background of changes in consumer lifestyles and purchasing behavior.
In the food supermarket industry, demand for home meals increased due to the spread of COVID19, which increased the number of people spending time at home and working from home. The industry
as a whole performed well and was temporarily greatly affected by this “stay-at-home demand.”However, the business environment has become increasingly severe, as consumer behavior has shiftedaway from stay-at-home meals to eating out due to the normalization of economic and social activities.
Further, operating costs have increased due to rising raw material prices, rising wages, and rising waterand utility costs. In addition, the handling of food products by other industries, such as e-commerce
operators and drug stores has increased due to Japan’s declining birthrate and aging population, as wellas due to changes in consumer lifestyles and purchasing behavior. As a result, competition acrossindustries has become more intense. Consequently, further shakeout and industry restructuring is
expected in the future.
Based on this recognition of the environment, AEON, the Company, and U.S.M.H have continued
to share information and discuss issues and have strived to realize their respective principles andincrease corporate value. As announced in the press release dated April 25, 2023 “AEON CO., LTD.,
Inageya Co., Ltd., and United Super Markets Holdings Inc. Announce the Execution of a Memorandumof Understanding Regarding the Business Integration for Realization of a JPY1 trillion Supermarket in
Kanto” (the “25 April 2023 Press Release”) AEON, the Company, and U.S.M.H have come to theconclusion that, in order to continue to respond to customers’ needs with a sense of speed, and to-8-

coexist with local communities and grow together in the Tokyo metropolitan area, where competitionis expected to intensify further in the future, it is most appropriate to further deepen the relationshipthrough strengthening capital relationships and management integration. This will allow AEON, theCompany and U.S.M.H to make the most of the AEON Group’s various assets such as digital, products,
human resources, and payment infrastructure. The goal being to evolve into a new business model thatutilizes economies of scale as a combined one (1) trillion yen supermarket group. The Company and
U.S.M.H will set aside sufficient time for discussions following the execution of the memorandum of
understanding with a view to determining how to maximize synergies by around November 2024.
AEON and the Company, which have already formed an alliance, will further strengthen their capitaland business alliance relationship. AEON and the Company determined that they can promptly realize
synergies by utilizing various assets of the AEON Group. AEON conducted a tender offer to theCompany (the “Tender Offer”), as announced in the “Notice of Commencement of Tender Offer toInageya Co., Ltd. (Securities Code: 8182)” dated October 6, 2023, and now holds 51.0% of shares of
the Company, as announced in the “Notice of Results of Tender Offer for Shares of Inageya Co., Ltd.
and Change of Subsidiary” dated November 30, 2023.
The preparatory committee for integration, which was jointly established on June 19, 2023, by theCompany and U.S.M.H Group Companies, discussed and reviewed the realization and effect of thesynergies envisaged following the execution of the memorandum of understanding. As a result of
discussions, it has been determined that, in addition to contributing to the enhancement of corporate
value through the synergies described below, in an increasingly competitive environment,
strengthening the dominance of the Company and U.S.M.H in the Tokyo metropolitan area, wherestable demand is expected to continue, will lead to the creation of various economies of scale.
In response to a proposal from U.S.M.H, the Company commenced consideration of whether toproceed with the transactions that would make Inageya a wholly owned subsidiary of U.S.M.H,
including the Share Exchange (the “Transactions”). After thorough consideration of the potential
disadvantages associated with the delisting of the Company, such as its corporate creditworthiness andthe impact on current shareholders, the Company concluded that it would benefit from becoming awholly owned subsidiary of U.S.M.H. This is because the Company considered that it will be able tomaintain its corporate creditworthiness as a major group company of U.S.M.H even following theShare Exchange, and that it is possible to provide the shareholders of the Company with the value andbenefits that can be generated by the Share Exchange through the delivery of shares of U.S.M.H asconsideration for the Share Exchange. The Company considered that the Share Exchange will bebeneficial not only for U.S.M.H but also for the shareholders of Inageya. AEON agreed with theCompany’s plans and approved the Share Exchange. Further, as described in “Notice Regarding 100%
Acquisition of Welpark Co., Ltd. by WELCIA HOLDINGS CO., LTD., Changes in Subsidiary at
Inageya Co., Ltd. (share transfer) and receipt of special dividend from such Subsidiary, as well as
Recognition of Extraordinary Income” dated April 18, 2024, the Company has reached an agreementwith WELCIA HOLDINGS CO., LTD. (“Welcia HD”), a subsidiary of AEON, to transfer the sharesof Welpark Co., Ltd. (“Welpark”), which is a subsidiary of the Company and operates a drug store
business, to Welcia HD prior to the execution of the Transactions. The consideration of the Share
Exchange by U.S.M.H and the Company is subject to the transfer of the shares of Welpark to Welcia
HD.
As a result of the above, both Boards of Directors resolved to implement the Share Exchange as ofApril 18, 2024. Specifically, the two (2) companies expect the following synergies to arise, which will
result in the improvement of corporate value:(i) Increase in sales and gross margin by expanding the use of TOPVALU private label products;(ii) Cost reduction through joint product procurement (national brand products, regional products, andimported products);(iii) Promotion of mutual efforts to revitalize food supermarkets, develop stores tailored to local
customers, etc.;(iv) Cost reduction by organizing and utilizing the functions of distribution centers, and process centers,
etc.;(v) Cost reduction through joint procurement of materials, fixtures and equipment, and integration of
back-office operations;(vi) Joint use of credit cards, e-money and loyalty cards;(vii) E-commerce initiatives such as joint research and development of online businesses;(viii) Utilization of AEON Group’s education system and personnel exchange;(ix) Provision of analysis services combining membership information and POS information; and(x) Cost reduction through system sharing, and DX promotion.

-9-2. Contents of the Share Exchange Agreement
The contents of the Share Exchange Agreement are as stated in the Share Exchange Agreement(copy) as follows.
Share Exchange Agreement (copy)
United Super Markets Holdings Inc. (hereinafter “U.S.M.H”) and Inageya Co., Ltd. (hereinafter“Inageya”) will enter into a share exchange agreement (hereinafter the “Agreement”) as follows on April
18, 2024 (hereinafter the “Agreement Conclusion Date”).
Article 1 (The Share Exchange)
Pursuant to the provisions of the Agreement, U.S.M.H and Inageya shall conduct a share exchange(hereinafter the “Share Exchange”) in which U.S.M.H will become the wholly-owning parent company
in the share exchange and Inageya will become the wholly-owned subsidiary in the share exchange.
Through the Share Exchange, U.S.M.H shall acquire all of Inageya’s outstanding shares.
Article 2 (Trade names and addresses of the wholly-owning parent company in the share exchange andthe wholly-owned subsidiary in the share exchange)
The trade names and addresses of U.S.M.H and Inageya are as follows.
(1) U.S.M.H (the wholly-owning parent company in the share exchange)
Trade name: United Super Markets Holdings Inc.
Address: 1 Kanda Aioi-cho, Chiyoda-ku, Tokyo(2) Inageya (the wholly-owned subsidiary in the share exchange)
Trade name: Inageya Co., Ltd.
Address: 6-1-1 Sakae-cho, Tachikawa-shi, Tokyo
Article 3 (Matters regarding shares to be delivered at the time of the Share Exchange and their allotment)
1. At the time of the Share Exchange, immediately before the time when U.S.M.H acquires all of theoutstanding shares of Inageya through the Share Exchange (hereinafter the “Reference Time”),
U.S.M.H shall provide each shareholder listed or recorded in the shareholder register of Inageya(excluding U.S.M.H; hereinafter the “Shareholders Eligible for Allotment”) with a number of sharesof U.S.M.H common stock equal to the total number of shares of Inageya common stock owned byeach multiplied by 1.46 (hereinafter the “Exchange Share Ratio”).
2. Regarding the allotment of consideration in the preceding paragraph, U.S.M.H shall allot to each of
the Shareholders Eligible for Allotment the number of U.S.M.H common shares obtained bymultiplying each share of Inageya common stock owned by each said shareholder by the Exchange
Share Ratio.
3. If there is a fraction less than one share in the number of U.S.M.H common shares to be delivered toeach of the Shareholders Eligible for Allotment pursuant to the provisions of the preceding two
paragraphs, it shall be handled in accordance with the provisions of Article 234 of the Companies
Act and other related laws and regulations.
Article 4 (U.S.M.H’s amount of capital and reserves)
U.S.M.H’s amount of capital and reserves to be increased through the Share Exchange shall be the amountseparately determined by U.S.M.H in accordance with Article 39 of the Regulations on Corporate
Accounting.
Article 5 (Effective date)
The date on which the Share Exchange shall become effective (hereinafter the “Effective Date”) shall be
November 30, 2024. However, if necessary due to the necessity of proceeding with the procedures for
the Share Exchange or for any other reason, U.S.M.H and Inageya may change this upon consultation
and agreement.
Article 6 (Approval at the general meeting of shareholders)
1. By the day before the Effective Date, U.S.M.H shall seek approval at its general meeting ofshareholders for the matters necessary for the Agreement and the Share Exchange, and shall endeavor
to the extent reasonably practical to obtain such approval by resolution at said general meeting of- 10 -

shareholders.
2. By the day before the Effective Date, Inageya shall seek approval at its general meeting ofshareholders for the matters necessary for the Agreement and the Share Exchange, and shall endeavor
to the extent reasonably practical to obtain such approval by resolution at said general meeting ofshareholders.
Article 7 (Cancellation of treasury shares)
By resolution at a Board of Directors meeting held by the day before the Effective Date, Inageya shall,at the Reference Time, cancel all treasury shares (including treasury shares acquired in response to a sharepurchase request from a dissenting shareholder as stipulated in Article 785, Paragraph 1 of the Companies
Act, exercised at the time of the Share Exchange) held at the Reference Time.
Article 8 (Operation of business, etc.)
From the Agreement Conclusion Date until the Effective Date, U.S.M.H and Inageya will each carry out
their own business operations and manage and operate their assets within the scope of normal business
and with the care of prudent managers, as well as have their respective subsidiaries carry out their own
business operations and manage and operate their assets with the care of prudent managers. Except withthe prior written consent of the other party, neither company shall commit itself or its subsidiaries to any
act that could result in a significant change in its financial status or that could have a material impact on
the Share Exchange.
Article 9 (Changes to and termination of the Agreement)
If there are any significant changes in the financial status or management status of U.S.M.H or Inageya
between the Agreement Conclusion Date and the day before the Effective Date, or in the event of asituation arising or showing signs of arising that will seriously impede the execution of the Share
Exchange, making it difficult to achieve the purpose of the Share Exchange, U.S.M.H and Inageya may,through consultation, change the contents of the Agreement including the terms and conditions of the
Share Exchange, or terminate the Agreement.
Article 10 (Validity of the Agreement)
The Agreement shall lose its validity if, by the day before the Effective Date, (i) approval by U.S.M.H
and Inageya’s general meetings of shareholders as specified in Article 6 cannot not obtained, if (ii) thenecessary approvals from relevant government agencies, etc. for the execution of the Share Exchange as
stipulated by laws and regulations cannot be obtained, or if (iii) the Agreement is terminated inaccordance with the preceding Article.
Article 11 (Governing law and jurisdiction)
The Agreement shall be governed by and interpreted in accordance with Japanese law, and all disputes
regarding the performance or interpretation of the Agreement shall be under the exclusive jurisdiction of
the Tokyo District Court at the first instance.
Article 12 (Good faith consultation)
If any questions arise regarding matters not stipulated in or the interpretation of the Agreement, U.S.M.H
and Inageya shall consult in good faith and endeavor to resolve the issue.
(Remainder of page intentionally left blank.)- 11 -

As proof of completion of the Agreement, two copies of this document shall be prepared, and each party
shall retain one copy with their names and seals affixed.
April 18, 2024
U.S.M.H: 1 Kanda Aioi-cho, Chiyoda-ku, Tokyo
United Super Markets Holdings Inc.
President and Representative Director: Motohiro Fujita
Seal:

Inageya: 6-1-1 Sakae-cho, Tachikawa-shi
Tokyo
Inageya Co., Ltd.
Representative Director and President: Yoshikazu Motosugi
Seal:

3. Matters Related to the Appropriateness of the Consideration for the Exchange(1) Matters related to the appropriateness of the total number of considerations for the Share Exchange
1) Details of the ownership ratio for the Share Exchange
U.S.M.H
Inageya(to become the parent company(wholly owned subsidiary
resulting from the shareresulting from the shareexchange)exchange)
Allotment ratio related to the1
1.46
Share Exchange
Number of shares to be delivered
U.S.M.H ordinary shares (planned)
as a result of the Share Exchange
67,794,529 shares(Note 1) Allotment ratio of shares
For each share of Inageya Stock, 1.46 shares of U.S.M.H stock (the “U.S.M.H Stock”) shall beallocated and delivered. However, no shares will be allotted through the Share Exchange for the Inageya
Stock that U.S.M.H holds as at the Reference Time (as defined below). The above allotment ratio related
to the Share Exchange (the “Share Exchange Ratio”) is subject to change upon consultation andagreement between the companies in the event of any material change to the terms and conditions on
which the calculation is based. As of June, 2024, U.S.M.H does not hold any Inageya Stock. However,as of the end of March 2024, Kasumi, a subsidiary of U.S.M.H, held 96,000 shares of Inageya Stock.
As part of the Share Exchange, shares of the U.S.M.H Stock will be allotted and delivered in accordancewith the number of shares of the Inageya Stock held by Kasumi as at the Reference Time. Such shares
will then be disposed of at a reasonable time in accordance with the provisions of Article 135, Paragraph
3 of the Companies Act.
(Note 2) Number of shares of U.S.M.H Stock to be delivered in the Share Exchange
In connection with the Share Exchange, U.S.M.H shall deliver the number of shares of the U.S.M.H
Stock that is calculated by multiplying the total number of outstanding shares of the Company that
U.S.M.H holds by 1.46 to the shareholders of the Company (however, meaning the shareholders after
the cancellation of the treasury shares described below, excluding U.S.M.H) at the time immediately
prior to the time when U.S.M.H acquires all Inageya Stock (the “Reference Time”) (except for theInageya Stock held by U.S.M.H) through the Share Exchange, in exchange for the Inageya Stock theyhold.
In addition, the shares to be delivered by U.S.M.H will be allocated as newly issued shares.
Furthermore, pursuant to the resolution of the board of directors’ meeting of the Company to be held
no later than the day prior to the effective date of the Share Exchange, the Company will cancel at theReference Time all of the treasury shares it held as at the Reference Time (including the treasury shares- 12 -

to be acquired through the purchase of shares pertaining to the dissenting shareholders’ appraisal rights
as provided in Article 785, Paragraph 1 of the Companies Act that will be exercised in connection with
the Share Exchange).
(Note 3) Handling of shares less than one (1) unit
Pursuant to the provisions of the articles of incorporation and share handling regulations of U.S.M.H,
shareholders who will hold shares less than one (1) unit (less than one hundred (100) shares) of U.S.M.H
as a result of the Share Exchange will be entitled to use the following system. Shares less than one (1)unit cannot be sold on the financial instruments exchange market.
1. System requiring additional purchase for shares less than one (1) unit (additional purchase toconstitute one hundred (100) shares)
Pursuant to the provisions of Article 194, Paragraph 1 of the Companies Act and the Articles ofIncorporation of U.S.M.H, a shareholder who holds less than one (1) unit of U.S.M.H shares maypurchase from U.S.M.H the additional number of shares that when combined together with thenumber of shares less than one (1) unit the shareholder already holds will collectively constitute one(1) unit.
2. System for requesting purchase of shares less than one (1) unit (sale of shares less than one (1) unit)
Pursuant to Article 192, Paragraph 1 of the Companies Act, shareholders who hold shares less thanone (1) unit of U.S.M.H may make a request to U.S.M.H requesting that U.S.M.H purchase theirshares that constitute less than one (1) unit.
(Note 4) Handling of fractions of less than one (1) share
Pursuant to Article 234 of the Companies Act and other relevant laws and regulations, the Company's
shareholders that will receive fractional U.S.M.H shares less than one (1) share as a result of the Share
Exchange shall be entitled to the number of U.S.M.H shares sold by U.S.M.H equivalent to the total
whole number of shares that such fraction represents (any fraction less than one (1) in the total number
shall be rounded down), and U.S.M.H shall pay the fractional percentage of such sale proceeds to suchshareholders.
2) Basis for the Share Exchange allocation
a. Basis and reasons for the allocation
U.S.M.H and the Company have separately appointed third-party valuation institutions andlegal advisors that are independent of U.S.M.H, the Company and AEON to ensure that the Share
Exchange Ratio is determined in a fair and appropriate manner. U.S.M.H appointed Mizuho
Securities Co., Ltd. (“Mizuho Securities”) and the Company appointed Nomura Securities Co.,
Ltd. (“Nomura Securities”) as its respective third-party valuation institutions. U.S.M.H appointed
Yodoyabashi & Yamagami LPC and the Company appointed Nagashima Ohno & Tsunematsu as
its respective legal advisors. The third-party valuation institutions and legal advisors commenced
thorough examinations.
As described in 1) “Measures to Ensure Fairness” and 2) “Measures to Avoid Conflicts ofInterest” in (3) “Matters Taken into Consideration to Avoid Conflicts of Interest with theCompany’s Shareholders Other than U.S.M.H” below, U.S.M.H conducted careful examinationand discussion upon taking into account the share exchange ratio calculation report received from
Mizuho Securities on April 17 2024, as well as advice from Yodoyabashi & Yamagami LPC, andthe results of due diligence that U.S.M.H conducted on the Company. U.S.M.H also considered
instructions and advice from the U.S.M.H Special Committee, which consists solely of
independent members who have no interest in the Company and AEON, and the contents of thereport received on April 18, 2024. As a result, U.S.M.H concluded that the Share Exchange Ratio
is appropriate and will benefit the shareholders of U.S.M.H Therefore, U.S.M.H determined that
it is appropriate to implement the Share Exchange based on the Share Exchange Ratio.
As described in 1) “Measures to Ensure Fairness” and 2) “Measures to Avoid Conflicts ofInterest” in (3) “Matters Taken into Consideration to Avoid Conflicts of Interest with theCompany’s Shareholders Other than U.S.M.H” below, the Company conducted a careful
examination and discussion upon taking into account the share exchange ratio calculation reportobtained from Nomura Securities on April 18, 2024, as well as advice from Nagashima Ohno &Tsunematsu, and the results of the due diligence that the Company conducted on U.S.M.H. The
Company also took into account instructions and advice from the Company’s Special Committee,- 13 -

which consists solely of independent members who have no interest in U.S.M.H and AEON, andthe contents of the report received on April 18, 2024. As a result, the Company concluded that the
Share Exchange Ratio is appropriate and will benefit the shareholders of the Company. Therefore,
the Company determined that it is appropriate to implement the Share Exchange based on the
Share Exchange Ratio.
As stated above, both U.S.M.H and the Company carefully considered the results of theirrespective due diligence reviews of the other party by reference to the calculation results of theshare exchange ratio submitted by their respective third-party valuation institutions, and repeatedly
conducted negotiations and consultations by comprehensively taking into account factors, such as
their financial condition, asset status and future prospects. As a result, U.S.M.H and the Company
have concluded that the Share Exchange Ratio is appropriate and will contribute to the interests of
their respective shareholders, and, therefore, they have determined that it is appropriate to conduct
the Share Exchange based on the Share Exchange Ratio.
The Share Exchange Ratio may be amended by consultation and agreement between the two(2) companies in the event of any material change to the terms and conditions that serve as thebasis for calculation of the Share Exchange Ratio pursuant to the Share Exchange Agreement.
b. Matters relating to calculation(i) Name of the valuation institution and its relationship with the listed company and other companies
Mizuho Securities, U.S.M.H’s third-party valuation institution, and Nomura Securities, theCompany's third-party valuation institution, are both valuation institutions that are independent
from U.S.M.H, the Company, and AEON, and are not related parties of U.S.M.H, the Company,
or AEON.
Mizuho Bank, Ltd. (“Mizuho Bank”), a group company of Mizuho Securities, is a shareholder
in the Company and AEON. Mizuho Trust Bank Co., Ltd. (“Mizuho Trust Bank”) is a shareholder
in U.S.M.H and AEON. Mizuho Bank does not have any significant interest in connection with
the Share Exchange, although it is involved in financing transactions with U.S.M.H, the Company
and AEON as part of their ordinary banking transactions. Mizuho Securities stated that it hasestablished and implemented an appropriate conflict of interest management system, including
information barrier measures between Mizuho Securities, Mizuho Bank and Mizuho Trust Bankin accordance with the applicable laws and regulations as set forth in Article 36, Paragraph 2 of
the Financial Instruments and Exchange Act (Act No. 25 of 1948; as amended) and Article 70-4of the Cabinet Office Ordinance on Financial Instruments Business. Through these measures, thedepartment in charge of financial advisory at Mizuho Securities valued the shares of the two (2)companies independently in connection with the Share Exchange without being affected by any
conflict of interest and without considering the status of Mizuho Bank and Mizuho Trust Bank asshareholders and the status of Mizuho Bank as lender. An appropriate conflict of interest
management system has been established and implemented at Mizuho Securities, theindependence of Mizuho Securities as a third-party valuation institution has been secured because
U.S.M.H and Mizuho Securities conduct transactions under the same terms and conditions as
general trading partners, and Mizuho Securities has a track record of acting as a third-party
valuation institution in similar cases in the past. For these reasons, U.S.M.H has judged that
Mizuho Securities’ independence has been secured and accordingly selected Mizuho Securities as
its third party valuation institution.
(ii) Overview of calculation
Mizuho Securities calculated the exchange ratio by using the market price standard method
because U.S.M.H is listed on the Tokyo Stock Exchange Standard Market and the Company on
the Tokyo Stock Exchange Prime Market, and therefore market share prices for both companies
exist (using April 25, 2023 as the calculation base date, Mizuho Securities analyzed the closing
price of the market share prices by reference to the calculation base date on the Tokyo Stock
Exchange Standard Market and the Tokyo Stock Exchange Prime Market based on the simple
average closing price for the past one (1) month, the simple average closing price for the past three(3) months, and the simple average closing price for the past six (6) months.). Mizuho Securities
also utilized the comparable multiple valuation method because there are several similar listedcompanies which are comparable to both companies and it is possible to infer share values bycomparing similar companies. Finally, Mizuho Securities utilized the discounted cash flow method(the “DCF Method”) to reflect the expected value of the future business activities of both- 14 -

companies in the calculation. The valuation ranges for each of the valuation methods where thevalue per share for U.S.M.H is set at one (1) is as follows.
Method used
Calculation range of share exchange ratio
Market price standard method
1.13 to 1.17
Comparable multiple valuation method
0.78 to 1.22
DCF method0.53 to 1.78
Under the market price standard method, using April 25, 2023, which is the date of theannouncement of the 25 April 2023 Press Release, as the calculation base date, the closing priceon that date and the simple average of the closing prices for each period of the past one (1) month,
the past three (3) months, and the past six (6) months ended on April 25, 2023 were used for both
U.S.M.H and the Company.
The financial forecasts for U.S.M.H and Inageya, which Mizuho Securities used as a base incalculating the DCF Method, include fiscal years in which significant increases and decreases in
profits are expected. Specifically, operating income is expected to increase significantly from theprevious fiscal year in the fiscal years ending February 2025 and February 2026, mainly due to anincrease in same-store sales and the implementation of various measures to reduce SG&A
expenses. Net income is expected to increase significantly from the previous fiscal year in thefiscal years ending February 2026 and February 2027. In addition, the Company's financial
forecasts also includes fiscal years in which significant changes in profit are expected. Specifically,in terms of operating profit, we expect a significant increase in profit from the previous fiscal year
in the fiscal years ending March 2024 and 2025, mainly due to improvements in the gross profit
margin at each store, and in terms of net income, we expect a return to profitability in the fiscal
year ending March 2024 because there will be no impact from the reversal of deferred tax assets
recorded in the fiscal year ending March 2023, and we expect a significant increase in profit fromthe previous fiscal year in the fiscal year ending March 2025, due to the aforementioned increasein operating profit. The synergies expected to be realized through the execution of the Share
Exchange are not reflected in the financial forecasts of the two (2) companies because it is difficult
to estimate the impact on earnings in detail at present. Therefore, such synergies are not reflectedin the valuation using the DCF Method. The financial forecasts of the two (2) companies are notbased on the implementation of the Share Exchange.
In calculating the share exchange ratio, Mizuho Securities assumed that prior to the effective
date of the Share Exchange, the Company will receive a special dividend of JPY 1,263 million
from Welpark and transfer its Welpark shares to Welcia HD for JPY 6,989 million, as described in“Notice Regarding 100% Acquisition of Welpark Co., Ltd. by WELCIA HOLDINGS CO., LTD.,
Changes in Subsidiary at Inageya Co., Ltd. (share transfer) and receipt of special dividend fromsuch Subsidiary, as well as Recognition of Extraordinary Income” announced by Welcia HD, theCompany and AEON as of April 18, 2024. In addition, in principle, the information provided by
U.S.M.H and the Company, as well as publicly available information has been adopted as is (i.e.,
without modification). All such materials and information are assumed to be accurate and complete,and Mizuho Securities has not independently verified their accuracy and completeness. In addition,
Mizuho Securities has not conducted any independent evaluation or assessment of assets andliabilities (including unrecorded assets, liabilities and other contingent liabilities) of U.S.M.H andthe Company and their affiliates, nor has it requested a third party to conduct an evaluation orassessment. Mizuho Securities has relied on such information without independently verifying theaccuracy, adequacy or feasibility of the companies’ business plans. Mizuho Securities’ calculations
reflect the above information up to April 17, 2024.
Nomura Securities calculated the share exchange ratio between the two (2) companies by using
the market price average method because U.S.M.H is listed on the Standard Market of the Tokyo
Stock Exchange and the Company is listed on the Prime Market of the Tokyo Stock Exchange,
and therefore market share prices for both companies exist. Nomura Securities also utilized thecomparable valuation method because there are several similar listed companies which arecomparable to both companies, and it is possible to infer share values by comparing similar
companies. Finally, Nomura Securities utilized the DCF Method to reflect the expected value ofthe future business activities of both companies in the calculation. In calculating the shareexchange ratio, Nomura Securities assumed that prior to the effective date of the Share Exchange,
the Company will receive a special dividend of JPY 1,263 million from Welpark and transfer its
Welpark shares to Welcia HD for JPY 6,989 million, as described in “Notice Regarding 100%
- 15 -

Acquisition of Welpark Co., Ltd. by WELCIA HOLDINGS CO., LTD., Changes in Subsidiary at
Inageya Co., Ltd. (share transfer) and receipt of special dividend from such Subsidiary, as well as
Recognition of Extraordinary Income” announced by Welcia HD, the Company and AEON as ofApril 18, 2024.
The valuation range for the Company under each of the valuation methods when the value pershare for U.S.M.H is set at one (1) is as follows.
Calculation method
Calculation range of share exchange ratio
Market price average method
1.34 to 1.50
Comparable multiple valuation method
1.16 to 1.20
DCF method
0.96 to 1.68
Under the market price average method, using April 17, 2024 as the calculation base date, theclosing price of U.S.M.H shares on the Tokyo Stock Exchange Standard Market on the calculationbase date and the simple average of the closing prices on the last five (5) business days, one (1)month, three (3) months, and six (6) months up to the calculation base date were used for U.S.M.H
shares, and, using April 17, 2024 as the calculation base date, the closing price of Inageya Stockon the Tokyo Stock Exchange Prime Market on the calculation base date and the simple averageof the closing prices on the last five (5) business days, one (1) month, three (3) months, and six (6)months up to the calculation base date were used for the Company's shares.
Under the comparable multiple valuation method, JM Holdings Co., Ltd., Ecos Co., Ltd., Life
Corporation Co., Ltd., Yaoko Co., Ltd., Mammy Mart Co., Ltd., and Belc Co., Ltd. were selected
as listed companies deemed to be similar to the supermarket business, which is the main businessof the two (2) companies, U.S.M.H and the Company, and the calculation was made using themultiple (“EBITDA Multiple”) of operating income before depreciation and amortization(“EBITDA”).
Under the DCF Method, the share value of U.S.M.H is evaluated by discounting the free cash
flow that U.S.M.H is expected to generate in and after the fiscal period ending February 2025 topresent value at a certain discount rate, based on various factors, including earnings and investment
plans in business plans from the fiscal period ending February 2025 to the fiscal period ending
February 2027 prepared by U.S.M.H, and public information. The discount rate for U.S.M.H isbetween 3.25% and 3.75%, and the perpetual growth rate is between −0.25% and 0.25%, and the
EBITDA multiple is between 5.0 times and 7.0 times, using the perpetual growth rate method andthe multiple method. Meanwhile, regarding the valuation of shares in the Company, the free cash
flow that the Company is expected to generate in and after the fourth quarter of the fiscal year
ending March 2024 is discounted to present value at a certain discount rate, based on various
factors including earnings forecasts and investment plans in the Company's business plans fromthe fiscal period ending March 2024 to the fiscal period ending March 2027 and public information.
Discount rates ranging from 3.25% to 4.25% are used, and the perpetual growth rate and themultiple method are used to calculate the continuing value, with the perpetual growth rate ranging
from −0.25% to 0.25% and the EBITDA multiple ranging from 5.0 times to 7.0 times, respectively.
The financial projections of U.S.M.H and the Company used by Nomura Securities for the
calculation using the DCF Method refer to the fiscal years in which significant increases anddecreases in profit are expected. Specifically, for the fiscal years ending February 2025, February
2026 and February 2027, U.S.M.H expects a significant increase in profit from the previous fiscal
year mainly due to an increase in same-store sales and the implementation of various measures toreduce SG&A expenses. In particular, operating income is expected to increase by more than 30%
compared to the previous year for the fiscal year ending February 2025 and by more than 30%
compared to the previous year for the fiscal year ending February 2026. Net income is expected
to increase by more than 70 compared to the previous year in the fiscal year ending February 2027.
The financial forecasts for U.S.M.H are not based on the implementation of the Share Exchange.
For Inageya, the company expects a significant increase in profit from the previous fiscal year in
the fiscal years ending March 2024, March 2026 and March 2027, mainly due to improvement in
profit by revitalization through renovation of existing stores and expansion of new stores, andintroduction and expansion of private brand products. In particular, operating income is expected
to increase by more than 70% compared to the previous year in the fiscal year ending March 2024
and by more than 30% compared to the previous year in the fiscal year ending March 2026. Net
income is expected to increase by more than 40% compared to the previous year in the fiscal year
ending March 2027. In addition, in the fiscal year ending March 2025, due to increases incorporation tax and corporation tax adjustments, the Company expects net income to decrease by- 16 -

more than 60% from the previous fiscal year. The financial forecasts for the Company are notbased on the implementation of the Share Exchange.
The calculation of the share exchange ratio by Nomura Securities is based on financial,economic, market, business environment and other conditions as of calculation base date, andNomura Securities relies on information available to it as of that date. Nomura Securities assumes
the accuracy and completeness of public information reviewed by Nomura Securities and financial,legal, regulatory, tax, accounting and other information provided to Nomura Securities, and has
not independently verified the accuracy and completeness thereof. In addition, Nomura Securities
has not conducted any independent evaluation, appraisal or valuation of the assets or liabilities of
the two (2) companies and their affiliates (including financial derivatives, off-balance sheet assets
and liabilities and other contingent liabilities), including analysis and valuation of individual assets
and liabilities, and has not requested any third-party institution to conduct any evaluation, appraisal
or valuation. Nomura Securities assumes that the financial forecasts and other forward-looking
information of the two (2) companies have been reasonably prepared or considered by the
management of the companies based on the best and good faith forecasts and judgments currently
possible, and that the financial condition of the companies will vary in accordance with suchforecasts, and relies on such financial forecasts and other forward-looking information without
conducting any independent investigation.
(2) Reasons for selecting U.S.M.H ordinary shares as consideration for the Share Exchange
The Company and U.S.M.H selected the ordinary shares of U.S.M.H, the wholly owning parent
company in the Share Exchange, as consideration for the Share Exchange. Since U.S.M.H is listed on
the Tokyo Stock Exchange and has a high level of liquidity, which will ensure trading opportunities,
and taking into consideration the fact that it will be possible for shareholders who hold Inageya Stockto enjoy the benefits of the integration resulting from the Share Exchange by receiving the ordinary
shares of U.S.M.H, which will become the wholly owning parent company in the Share Exchange, it
was determined that it is appropriate to use U.S.M.H’s ordinary shares as consideration for the Share
Exchange.
(3) Matters Taken into Consideration to Avoid Conflicts of Interest with the Company’s Shareholders
Other than U.S.M.H
1) Measures to ensure fairness
In the Share Exchange, AEON is the parent company of U.S.M.H and the Company, and there
is a structure through which mutual conflicts of interest may arise through AEON. Therefore,
U.S.M.H and the Company have determined that it is necessary to ensure the fairness of the Share
Exchange and have implemented the following measures.
a. Valuation reports from independent third-party institutions
In order to ensure fairness in the calculation of the share exchange ratio to be used for the Share
Exchange, U.S.M.H selected Mizuho Securities, a third-party institution that is independent of
U.S.M.H, the Company and AEON, and obtained a valuation report on the share exchange ratio
as of April 17, 2024, and the Company selected Nomura Securities, a third-party institution that is
independent of U.S.M.H, the Company and AEON, and obtained a valuation report on the shareexchange ratio as of April 18, 2024. For an overview of each evaluation, please see 2) “Basis for
the Share Exchange allocation” “b. Matters relating to calculation” in (1) Matters related to theappropriateness of the total number of considerations for the Share Exchange above. Neither ofthe companies obtained any written opinions (fairness opinions) from any third-party valuation
institution to the effect that the share exchange ratio for the Share Exchange is fair from a financial
viewpoint for the shareholders of U.S.M.H and the Company.
b. Advice from independent law firms
U.S.M.H has appointed Yodoyabashi & Yamagami LPC to act as its legal advisor for the Share
Exchange and has received legal advice regarding the procedures for the Share Exchange, and thedecision-making methods and processes of the board of directors. Yodoyabashi & Yamagami LPC
has no significant conflict of interest with U.S.M.H, the Company or AEON. The Company, on
the other hand, has appointed Nagashima Ohno & Tsunematsu as its legal advisor for the Share
Exchange, and has received their legal advice regarding the procedures for the Share Exchange,
the decision-making methods and processes of the board of directors, and other matters.

- 17 -Nagashima Ohno & Tsunematsu does not have any significant conflict of interest with U.S.M.H,
the Company or AEON.
Although Yodoyabashi & Yamagami LPC has legal advisory agreements in place with U.S.M.H
and AEON, they are an outside law firm that provides legal services to several clients and not
limited to these two (2) companies. The firm’s independence from U.S.M.H and AEON is not
impaired by the existing legal advisory agreements. Since the firm provides legal advice
regarding the Share Exchange as a legal advisor independent of U.S.M.H, the Company and AEON,
U.S.M.H has determined that the firm’s independence is secured.
2) Measures to avoid conflicts of interest
In the Share Exchange, AEON is the parent company of U.S.M.H and the Company, and there
is a structure through which mutual conflicts of interest may arise through AEON. Therefore, thefollowing measures have been implemented to avoid conflicts of interest.
a. Acquisition by U.S.M.H of a report from a special committee with no interest
In an effort of being careful with the decision making in connection with the Share Exchange
and for the purpose of confirming that eliminating the possibility of arbitrariness and conflicts ofinterest arising from the decision-making process of the board of directors of U.S.M.H, ensuring
the fairness of such process, and causing the board of directors of U.S.M.H to approve the Share
Exchange is not disadvantageous to minority shareholders of U.S.M.H, the company has
established a special committee consisting of three (3) members: Mr. Shigekazu Torikai (Torikai
Law Office) and Ms. Naoko Makino have no conflict of interest with AEON or the Company, areoutside directors of U.S.M.H and have filed with the Tokyo Stock Exchange that they are
independent officers; and Mr. Shinobu Okamoto, an outside auditor of U.S.M.H and for whom
U.S.M.H has filed with the Tokyo Stock Exchange as an independent officer (“U.S.M.H Special
Committee”). In considering the Share Exchange, U.S.M.H has consulted with the U.S.M.H
Special Committee on whether the Share Exchange would be disadvantageous to the minority
shareholders of U.S.M.H (“U.S.M.H Matters for Consultation”).
The U.S.M.H Special Committee held a total of 8 meetings between January 31, 2024, andApril 15, 2024. In addition, it carefully considered the U.S.M.H Matters for Consultation by
expressing opinions and collecting information via email and other means outside the meetingsand by holding consultations as necessary. Specifically, the U.S.M.H Special Committee
confirmed at its first meeting that there were no problems with the independence and expertise of
the financial advisor, Mizuho Securities, a third-party appraiser, and the legal advisor, Yodoyabashi& Yamagami LPC, both of which were appointed by the U.S.M.H, and approved their appointment.
Afterwards, we received an explanation from and conducted a question-and-answer session
with U.S.M.H on the purpose of the Share Exchange, pros and cons of the implementation of the
Share Exchange, expected synergies to be realized from the Share Exchange, and the process andsummary of the preparation of the business plan of U.S.M.H that serves as a precondition for theshare exchange ratio. From Yodoyabashi & Yamagami LPC, a legal advisor of U.S.M.H, wereceived an explanation on the measures taken to ensure fairness of the operation of U.S.M.H
Special Committee and other procedures in connection with the Share Exchange, including thedecision-making methods and processes of the board of directors, and to avoid conflicts of interest,
as well as the results of legal due diligence on the Company, followed by a question-and-answer
session. Furthermore, upon U.S.M.H’s request, we received an explanation from and conducted aquestion-and-answer session with PwC Advisory G.K. on the results of financial and tax due
diligence on the Company. We also received an explanation from and conducted a question-andanswer session with Mizuho Securities, a financial advisor of U.S.M.H and a third-party valuation
institution, on the methods and results of the calculation of the Share Exchange Ratio, in order toverify their reasonableness. Moreover, U.S.M.H Special Committee received advice from Mizuho
Securities and Yodoyabashi & Yamagami LPC for setting our negotiation policy on the Share
Exchange Ratio, received updates on the negotiation periodically, gave instructions as needed, andtook other actions to substantially involve in the negotiation process with the Company.
Under these circumstances, the U.S.M.H Special Committee carefully discussed and considered the
U.S.M.H Matters for Consultation and submitted a report to the board of directors of U.S.M.H on April
18, 2024, to the effect that the Share Exchange is not disadvantageous to minority shareholders of
U.S.M.H.

- 18 -

b. Approval of all directors of U.S.M.H excluding those who have a conflict of interest, andsupportive opinions of all auditors excluding those who have a conflict of interest
All seven (7) of the nine (9) directors of U.S.M.H, excluding Mr. Motohiro Fujita and Mr.
Motoya Okada, attended the meeting of the board of directors of U.S.M.H held on April 18, 2024
and resolved to approve the Share Exchange with the support of all the directors present. In
addition, all auditors of U.S.M.H participated in the above meeting, and they expressed no
objection to the above resolution.
Mr. Motohiro Fujita is concurrently serving as Advisor to AEON, and Mr. Motoya Okada isconcurrently serving as Director, Chairperson and Representative Executive Officer of AEON.
Considering their possible conflict of interest in connection with the Share Exchange, neither ofthem participated in the deliberation or resolution regarding the Share Exchange at the board of
directors’ meeting of U.S.M.H, nor participated in the discussion or negotiation with the Company
regarding the Share Exchange in the capacity of U.S.M.H.
c. Receipt of a report from a special committee with no conflict of interest with the Company
In an effort of being careful with the decision making in connection with the Share Exchange
and the purpose of eliminating the possibility of arbitrariness and conflicts of interest which may
arise from a decision-making process of its board of directors, ensuring the fairness thereof, andconfirming that the decision to implement the Share Exchange by the board of directors will not
be disadvantageous to the minority shareholders of the Company, the Company established a
special committee (“Inageya Special Committee”), consisting of Mr. Shuichi Otani and Ms. Yaeko
Ishida (Kitadai), who have no conflict of interest in AEON or U.S.M.H and are independent
outside directors of the Company, for whom the Company has filed with the Tokyo Stock
Exchange that they are independent officers, and Mr. Koji Makino, who is an outside corporate
auditor of the Company and for whom the Company has filed with the Tokyo Stock Exchange thatthe auditor is an independent officer. In considering the Share Exchange, the Inageya Special
Committee was consulted with matters, including: (i) the reasonableness of the purpose of the
Share Exchange (including whether it will contribute to increasing corporate value); (ii) the
appropriateness of the terms and conditions of the Share Exchange; (iii) the fairness of theprocedures for the Share Exchange; and (iv) based on the above (i) to (iii), whether the Share
Exchange would be considered disadvantageous to the minority shareholders (collectively, (i)through (iv) below, the “Inageya Matters for Consultation”). In deciding the matters in connection
with the Share Exchange at the board of directors meeting, the board of directors of the Company
resolved that the Special Committee’s judgment should be respected to the extent possible, andthat in considering the above matters for consultation, the Inageya Special Committee shall (1)have the authority to collect information necessary for considering the matters for consultation(authority to request necessary information from the executing side of the Company and otherparties); (2) have the authority to seek professional advice from Nomura Securities, which is afinancial advisor appointed by the Company and a third-party valuation institution, and Nagashima
Ohno & Tsunematsu, which is a legal advisor; (3) have the authority to designate or appoint, as
necessary, an independent advisor of the Inageya Special Committee; and (4) have the authority
to negotiate, as necessary, the terms and conditions of the Share Exchange with other parties(expenses related to (1) through (3) above shall be borne by the Company).
In addition to holding a total of 13 meetings between January 12, 2024, and April 18, 2024,
the Inageya Special Committee also expressed its opinions and collected information via email
and other means outside the meetings, held ad hoc discussions, and carefully considered theInageya Matters for Consultation. Specifically, the Inageya Special Committee first confirmed the
independence and expertise of Nomura Securities, which is the financial advisor appointed by theCompany and a third-party valuation institution, and Nagashima Ohno & Tsunematsu, which is alegal advisor, and approved their appointment. Subsequently, the Inageya Special Committee senta questionnaire to U.S.M.H regarding the purpose, etc. of the Share Exchange, and received fromand conducted a question-and-answer session with U.S.M.H on the purpose of the Share Exchange,
background to the Share Exchange, reason for selecting the Share Exchange, policy behind the
management policy and approach to the treatment of employees after the Share Exchange, andtreatment of Shareholder Yutai Plan. The Company also received advice from Nagashima Ohno &Tsunematsu, the Company’s legal advisor, regarding the decision making methods of the board of
directors of the Company relating to the Share Exchange, the operation of the Special Committee,
and other measures to ensure the fairness of the procedures relating to the Share Exchange andmeasures to avoid conflicts of interest, as well as the results of legal due diligence, and conducted- 19 -

a question-and-answer session. In addition, the Inageya Special Committee received the results offinancial and tax due diligence conducted on U.S.M.H by EY Strategy & Consulting Co., Ltd. and
Ernst & Young Tax Co. pursuant to a request from the Company, and conducted a question-andanswer session. Furthermore, the Inageya Special Committee received explanations from Nomura
Securities, the Company's financial advisor and a third-party valuation institution, on the method
and results of the calculation of the consideration for the Transactions (e.g., the Share Exchange
Ratio), and conducted a question-and-answer session to verify their reasonableness. Finally, basedon advice from Nomura Securities and Nagashima Ohno & Tsunematsu, the Inageya Special
Committee was substantially involved in the negotiations with U.S.M.H, such as by setting thenegotiation policy for the consideration for the Transactions (e.g., the Share Exchange Ratio),receiving updates on the negotiations periodically, and giving instructions as needed.
Under such circumstances, the Inageya Special Committee carefully discussed and considered
the Inageya Matters for Consultation, and submitted a report to the board of directors of theCompany on April 18, 2024, to the effect that the Share Exchange was considered notdisadvantageous to the minority shareholders of the Company.
d. Unanimous approval of all directors of the Company excluding directors who have a conflict ofinterest
At the meeting of the board of directors of the Company held on April 18, 2024, which resolved
the proposal regarding the Share Exchange, eight (8) of the nine (9) directors, excluding Mr.
Hiroyuki Watanabe to avoid a potential conflict of interest due to his position of Executive Vice
President of AEON and the positions of directors of AEON Financial Service Co., Ltd. and AEON
DELIGHT CO., LTD., which are included in the AEON Group, resolved the Share Exchange by
unanimous vote. In order to avoid a conflict of interest, Mr. Hiroyuki Watanabe did not participate
in the discussions or negotiations regarding the Share Exchange in his capacity of the Company,
nor did he participate in the deliberations regarding the Share Exchange at the aforementioned
meeting of the board of directors of the Company.
(4) Matters related to amounts of U.S.M.H’s capital and reserves
U.S.M.H’s amount of capital and reserves to be increased through the Share Exchange shall be theamount separately determined by U.S.M.H in accordance with Article 39 of the Regulations on
Corporate Accounting. Such handling was decided within the scope of laws and regulations after
comprehensive consideration of U.S.M.H’s capital policy and other circumstances, and wasdetermined to be appropriate.
4. Matters for Referral in Regard to Consideration(1) Provisions of the Articles of Incorporation of U.S.M.H
The provisions of the Articles of Incorporation of U.S.M.H are as stated in the Attachment.
(2) Matters related to the conversion method of the exchange consideration
1) Market for trading exchange consideration
U.S.M.H’s common stock is traded on the Tokyo Stock Exchange Standard Market
2) Persons acting as an intermediary, agent or proxy for transactions of exchange consideration
The common stock of U.S.M.H is handled by intermediaries and agents at securities companies,
etc. nationwide.
3) Details of restrictions on transfer and other disposition of exchange consideration.
This item is not applicable.
(3) Matters related to the market price of exchange consideration
The trends in share price of the common stock of U.S.M.H on the Tokyo Stock Exchange Standard
Market over the past six months are as follows.
By month
Highest price¥
Lowest price¥Nov. 2023

Dec.

Jan. 2024

Feb.

Mar.

Apr.

1,076

1,021

1,042

1,017

1,011

1,009

1,004

981

1,004

983

949

869

- 20 -

The market price of the common stock of U.S.M.H and trends thereof can be viewed by means ofstock price information and charts, etc. disclosed by the Japan Exchange Group at the URL below.
https://www.jpx.co.jp/english/(4) Details of balance sheets for U.S.H.M. for each fiscal year ended in the past five years
U.S.M.H submits a securities report for each fiscal year pursuant to Article 24, Paragraph 1 of the
Financial Instruments and Exchange Act.
5. Matters Related to the Appropriateness of Provisions Regarding Stock Acquisition Rights Related to
the Share ExchangeThis item is not applicable.
6. Matters Related to Non-consolidated Financial Statements, etc.
(1) Details of non-consolidated financial statements, etc. for the most recent business year of U.S.M.H
Non-consolidated financial statements for U.S.M.H’s most recent business year (March 1, 2023 to
February 29, 2024) are posted on the Company’s website（https://www.inageya.co.jp/ir/holder/）(Japanese only) and the Tokyo Stock Exchange website (Tokyo Stock Exchange Listed Company
Search (https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show).
(2) Details of events occurring after the last day of the most recent business year that have a significant
impact on the status of company assets of the Company and U.S.M.H
1) The Company
a. The Company concluded the Share Exchange Agreement with U.S.M.H on April 18, 2024. The
contents of the Share Exchange Agreement are described in “2. Contents of the Share Exchange
Agreement” above.
b. In light of the drugstore industry's ongoing shakeouts and industry restructuring, the Company
determined that Welpark, a consolidated subsidiary of the Company, will achieve the further
improvement and growth of its corporate value in what is a severely competitive environment byacquiring the support of Welcia HD, which operates a nationwide drugstore business, rather thanaiming to grow independently as the Group's drugstore business. At the Board of Directors meeting
held on April 18, 2024, the Company resolved to transfer all of Welpark's shares to Welcia HD
after receiving a special dividend of 1,263 million yen with an effective date of August 30, 2024
(scheduled), and concluded a Share Transfer Agreement with Welcia HD. The overview of theshare transfer is as follows.
Transferee:Number of shares to be transferred:
Transfer date:
Transfer price:

Welcia HD
16,000,000 shares
September 2, 2024 (scheduled)
6,989 million yen

2) U.S.M.H
U.S.M.H concluded the Share Exchange Agreement with the Company on April 18, 2024. The
contents of the Share Exchange Agreement are described in “2. Contents of the Share Exchange
Agreement” above.
Attachment: Articles of Incorporation of United Super Markets Holdings Inc. (copy)- 21 -

Articles of Incorporation of United Super Markets Holdings Inc.

CHAPTER I GENERAL PROVISIONS(Trade Name)
Article 1. The name of the Company shall be United Supermarket Holdings Kabushiki Kaisha inJapanese, and United Super Markets Holdings Inc. in English.
(Purposes)
Article 2. The purposes of the Company shall be to operate the following businesses, and to control ormanage the business activities of companies that operate those businesses by holding shares or
equity in said companies.
(1) Retail of apparel, foodstuffs, household goods, daily necessities, electrical products, furnitureproducts, cosmetics, accessories, and other various goods, as well as the manufacture,processing, wholesale, and import/export of related goods(2) Sale of rice and grains, salt, tobacco products, postage stamps, revenue stamps, firearms andswords, and secondhand goods, as well as the sale and distribution of lottery tickets(3) Retail, wholesale, and import/export of alcoholic beverages(4) Sale and import/export of pharmaceuticals, quasi-pharmaceuticals, industrial chemical products,
veterinary drugs, pesticides, poisonous substances, deleterious substances, petroleum, gases,
fertilizers, feedstuffs, and measuring instruments(5) Sale, import/export, and leasing of vehicles such as automobiles, bicycles, light vehicles andother transport vehicles, yachts, motorboats, and their parts and accessories, and the automobile
maintenance business(6) Production, sale, import/export, and leasing of movies, records, compact discs, videotapes, andvideo discs, etc.
(7) Sale, import/export, and leasing of paintings and other works of art, sports equipment, medical
equipment, kitchen equipment, and store equipment(8) Raising of livestock and pets, cultivation of plants, and their sale, import/export, and lease(9) Mail-order sales through catalogs(10) Sale of communication equipment, and agency business related to the solicitation for use of
telecommunication lines and promotion of those usage rights(11) Entrustment with data entry using computer systems and related administrative processing
services, and undertaking of filing and classification of documents and magnetic tapes, etc.,
photocopying of office documents, document preparation and shipping agency services, andaccounting and accounting processing works, including cost accounting, journal entries, andfinancial statements(12) Development, production, sales, rental, installation support, and maintenance of video
equipment, communications equipment, information equipment, educational equipment,
computers and related system software, and related service business(13) Information processing services, information provision services, and personnel placement
services, as well as telecommunications services and agency business thereof(14) Management of pharmacies, clinics, restaurants, entertainment facilities, amusement centers,
public baths, sports facilities, private nursing homes, movie theaters and other theaters, andparking facilities(15) Management of wedding venues, exhibition venues, and ticketing agencies(16) Planning and operation of cram schools, cooking classes, and other culture classes(17) Management of nursery schools and childcare centers(18) Management guidance for affiliated stores using the franchise chain system(19) Building maintenance, building security, cleaning business, and hotel business(20) Automobile transportation, freight forwarding, port freight forwarding agency, and warehousingbusiness(21) Entrustment with management and operation of logistics centers and logistics operations, andcollection and processing of logistics information(22) Business related to photography, hairdressing, beauty, travel agency, printing, publishing, andadvertising(23) Information provision and mediation services for marriage counseling and ceremonial occasions- 22 -

(24) Sale, purchase, lease, brokerage, management and appraisal of real estate, as well as undertakingof civil construction work, landscaping work, and interior decorating work(25) Management consulting business(26) Research, planning, design, and supervision related to regional development, urban
development, and environmental improvement, as well as agency services for tenant
recruitment, planning, research, and design services related to the effective use of land andbuildings, and entrustment therewith(27) Agency services related to intermediation, guarantee, collection and payment of money lending
and money borrowing, business related to investment, operation, purchase, sale, management,
and brokerage of investment securities, credit card handling, and general leasing business(28) Issuance, sale, and management of electronic money, electronic points, and other electronicvalue-related information and pre-paid payment instruments, and provision of electronic
payment systems(29) Non-life insurance agency business and life insurance solicitation business, as well as mediationand support for the entrustment of specified financial product transaction services with non-life
insurance companies(30) Brokerage business for financial products(31) Sale of specified welfare equipment, lending of specified welfare equipment, sale of specified
preventive long-term care equipment, and lending of specified preventive long-term careequipment pursuant to the Long-Term Care Insurance Act(32) Power generation business and management and operation thereof, as well as business related tothe purchase and sale of electricity(33) Collection, transportation, and treatment of general industrial waste, and the effective utilizationof related useful resources, including recovery, recycling, and regeneration(34) All other operations related to the items mentioned above(Location of Head Office)
Article 3: The head office of the Company shall be located in Chiyoda-ku, Tokyo.
(Organizational Bodies)
Article 4: The Company shall have the following organizational bodies in addition to the General
Meeting of Shareholders and Directors(1) Board of Directors(2) Corporate Auditors(3) Board of Corporate Auditors(4) Accounting Auditor(Method of Public Notices)
Article 5: Public notices by the Company shall be by method of electronic notifications; provided,
however, that if electronic notification is not possible due to an incident or other unavoidable
circumstance, public notice shall be by publication in the Nihon Keizai Shimbun.
CHAPTER II. SHARES(Total Number of Authorized Shares)
Article 6: The total number of shares authorized to be issued by the Company shall be five hundred
million (500,000,000) shares.
(Acquisition of Treasury Stock)
Article 7: The Company may acquire treasury stock through market transactions or tender offer by
resolution of the Board of Directors pursuant to the provisions of Article 165, Paragraph 2 of
the Companies Act.
(Unit of Shares)
Article 8: The number of shares constituting one unit of shares of the Company shall be one hundred(100) shares.

- 23 -

(Rights Regarding Fractional Shares)
Article 9: A shareholder of the Company may not exercise rights regarding fractional shares other than
the rights stated below.
(1) The rights stated in each item of Article 189, Paragraph 2 of the Companies Act(2) The right of demand pursuant to the provisions of Article 166, Paragraph 1 of theCompanies Act(3) The right to allocations of offered shares and offered stock acquisition rights proportionallyto the number of shares held by the shareholder(4) The right of demand stipulated in the following Article(Additional Purchase of Fractional Shares)
Article 10: A shareholder of the Company may request the Company to sell a number of shares that,together with the number of fractional shares held by the shareholder, would constitute one
unit of shares, pursuant to the provisions of the Share Handling Regulations.
(Shareholder Register Administrator)
Article 11: The Company shall have a Shareholder Register Administrator.
2. The Shareholder Register Administrator and its business office shall be determined by resolutionof the Board of Directors, and public notice thereof shall be issued by the Company.
3. The preparation and retention of the Company’s Shareholder Register and Share Option
Register, as well as other administrative matters related to the Shareholder Register and Share
Option Register shall be entrusted to the Shareholder Register Administrator and shall not be
handled by the Company.
(Share Handling Regulations)
Article 12: The handling of procedures for exercising the rights of shareholders of the Company andother matters related to shareholders shall be in accordance with laws and regulations, theArticles of Incorporation, and the Share Handling Regulations established by the Board of
Directors.
CHAPTER III. GENERAL MEETING OF SHAREHOLDERS(Convocation)
Article 13: An Ordinary General Meeting of Shareholders of the Company shall be convened within three(3) months following the last day of each fiscal year, and an Extraordinary General Meetingof Shareholders shall be convened whenever necessary.
(Record Date for Ordinary General Meeting of Shareholders)
Article 14: The record date for the Ordinary General Meeting of Shareholders of the Company shall be
the last day of February each year.
(Convener and Chairperson)
Article 15: A General Meeting of Shareholders of the Company shall be convened and chaired by the
President by resolution of the Board of Directors, unless otherwise provided by laws andregulations.
2. In the event that the President is incapacitated, a General Meeting of Shareholders shall be
convened and chaired by another Director determined in an order previously determined by the
Board of Directors.
(Measures for Electronic Provision, etc.)
Article 16: The Company shall, when convening a General Meeting of Shareholders, provide information
contained in the Reference Documents for the General Meeting of Shareholders, etc.
electronically.
2. Among the matters to be provided electronically, the Company may omit all or part of thematters specified in the Ordinance of the Ministry of Justice from the written documents
delivered to shareholders who have requested a paper copy by the record date for voting rights.

- 24 -

(Method of Resolutions)
Article 17: Resolutions of a General Meeting of Shareholders require the majority vote of attending
shareholders who are eligible to exercise voting rights, unless otherwise provided by laws,
regulations and the Articles of Incorporation.
2. Resolutions stipulated in Article 309, Paragraph 2 of the Companies Act require no less than
two-thirds of the voting rights of attending shareholders who hold one-third or more of thevoting rights of shareholders eligible to exercise voting rights.
(Exercise of Voting Rights by Proxy)
Article 18: A shareholder may exercise voting rights through one (1) proxy who has voting rights in the
Company.
2. A shareholder or proxy must submit a document certifying the proxy right to the Company foreach General Meeting of Shareholders.
CHAPTER IV. DIRECTORS AND BOARD OF DIRECTORS(Number of Directors)
Article 19: The number of Directors of the Company shall be no more than sixteen (16).
(Election of Directors)
Article 20: Directors shall be elected at a General Meeting of Shareholders.
2. Resolutions for the election of Directors require the majority vote of attending shareholders who
hold one-third or more of the voting rights of shareholders eligible to exercise voting rights.
3. Resolutions for the election of Directors shall not be conducted by cumulative voting.
(Term of Office of Directors)
Article 21: The term of office of each Director shall expire upon conclusion of the Ordinary General
Meeting of Shareholders held with respect to the most recent business year ending within one(1) year from assumption of office.
(Representative Directors and Directors with Special Titles)
Article 22: The Board of Directors shall, by resolution, appoint Representative Directors.
2. The Board of Directors may, by resolution, appoint one (1) Chairman of the Board of Directors,
one (1) President, and one or more Executive Vice Presidents, Senior Managing Directors,
Managing Directors, and Directors & Advisors.
(Persons with the Right to Convene a Board of Directors Meeting, and Chairperson)
Article 23: A Board of Directors meeting shall be convened and chaired by the President, unlessotherwise provided by laws and regulations.
2. In the event that the President is incapacitated, the Board of Directors meeting shall be
convened and chaired by another Director determined in an order previously determined by the
Board of Directors.
(Convocation of a Board of Directors Meeting)
Article 24: A notice of convocation of a Board of Directors meeting shall be sent to each Director andCorporate Auditor no later than three (3) days prior to the meeting; provided, however, that in
the case of urgency, such period may be shortened.
2. When the consent of all Directors and Corporate Auditors is obtained, a Board of Directors
meeting may be held without following the convocation procedures.
(Omission of Resolution by the Board of Directors)
Article 25: The Company shall deem that a resolution of the Board of Directors has been adopted when
the conditions provided in Article 370 of the Companies Act have been fulfilled.
(Regulations of the Board of Directors)- 25 -

Article 26: Matters relating to the Board of Directors shall be governed by the Regulations of the Boardof Directors established by the Board of Directors, in addition to laws, regulations, and the
Articles of Incorporation.
(Remuneration, etc. for Directors)
Article 27: Directors’ remuneration, bonuses, and other financial benefits received from the Company asconsideration for the execution of duties (hereinafter, “Remuneration, etc.”) shall be
determined by resolution of the General Meeting of Shareholders.
(Exemption from Liabilities of Directors)
Article 28: The Company may, by resolution of the Board of Directors, waive the liability for damages of
Directors (including former Directors) for negligence of duties to the limit prescribed in laws
and regulations pursuant to the provisions of Article 426, Paragraph 1 of the Companies Act.
2. The Company may enter into agreements with Outside Directors to limit their liability fordamages due to the neglect of duties pursuant to the provisions of Article 427, Paragraph 1 of
the Companies Act; provided, however, that the maximum amount of liability under suchagreements shall be the amount stipulated by laws and regulations.
CHAPTER V. CORPORATE AUDITORS AND BOARD OF CORPORATE AUDITORS(Number of Corporate Auditors)
Article 29: The number of Corporate Auditors of the Company shall be no more than five (5).
(Election of Corporate Auditors)
Article 30: Corporate Auditors shall be elected at a General Meeting of Shareholders.
2. Resolutions for the election of Corporate Auditors require a majority vote of attending
shareholders who hold one-third or more of the voting rights of shareholders eligible to exercise
voting rights.
(Term of Office of Corporate Auditors)
Article 31: The term of office of each Corporate Auditor shall expire upon conclusion of the Ordinary
General Meeting of Shareholders held with respect to the most recent business year ending
within four (4) years from assumption of office.
2. The term of office of a Corporate Auditor who is appointed as a substitute for a Corporate
Auditor who retires prior to the expiration of term of office shall continue until the expiration of
the term of office of the retired Corporate Auditor.
(Standing Corporate Auditors)
Article 32: The Board of Corporate Auditors shall appoint Standing Corporate Auditors by resolution.
(Convocation of a Board of Corporate Auditors Meeting)
Article 33: A notice of convocation of a Board of Corporate Auditors Meeting shall be sent to each
Corporate Auditor no later than three (3) days prior to the meeting; provided, however, that in
the case of urgency, such period may be shortened.
2. When the consent of all Corporate Auditors is obtained, a Board of Corporate Auditors Meeting
may be held without following the convocation procedures.
(Regulations of the Board of Corporate Auditors)
Article 34: Matters relating to the Board of Corporate Auditors shall be governed by the Regulations of
the Board of Corporate Auditors established by the Board of Corporate Auditors, in addition
to laws, regulations, and the Articles of Incorporation.
(Remuneration, etc. for Corporate Auditors)
Article 35: Remuneration, etc. for Corporate Auditors shall be determined by resolution of the General
Meeting of Shareholders.
(Exemption from Liabilities of Corporate Auditors)- 26 -

Article 36: The Company may, by resolution of the Board of Directors, waive the liability for damages ofCorporate Auditors (including former Corporate Auditors) for negligence of duties to the limit
prescribed in laws and regulations pursuant to the provisions of Article 426, Paragraph 1 of
the Companies Act.
2. The Company may enter into agreements with Outside Corporate Auditors to limit their liability
for damages due to the neglect of duties pursuant to the provisions of Article 427, Paragraph 1of the Companies Act; provided, however, that the maximum amount of liability under suchagreements shall be the amount stipulated by laws and regulations.
CHAPTER VI. ACCOUNTS(Fiscal Year)
Article 37: The fiscal year of the Company shall begin on March 1 of each year and end on the last day of
February the following year.
(Decision-making Body with Respect to Distribution of Surplus, etc.)
Article 38: The Company shall determine the distribution of surplus and other matters stipulated in each
item of Article 459, Article 1 of the Companies Act by resolution of the Board of Directors,
and not by resolution of the General Meeting of Shareholders, unless otherwise provided bylaws and regulations.
(Record Date for Distribution of Surplus)
Article 39: The record date for distribution of year-end dividends of the Company shall be the last day of
February each year.
2. The record date for distribution of interim dividends of the Company shall be August 31 eachyear.
3. In addition to the preceding two paragraphs, the Company may distribute dividends of surplus
by stipulating a record date.
(Exclusion Period for Distribution of Surplus)
Article 40: The Company shall be released from its obligation to pay any cash dividends that remain
unclaimed after the lapse of three (3) years from the date of commencement of payment.
2. Interest shall not accrue on unpaid dividends.
Date of establishment:
Date of implementation:
Date of amendment:
Date of amendment:
Date of amendment:
Date of amendment:

March 2, 2015
March 2, 2015
May 1, 2015
May 21, 2018
May 21, 2021
May 20, 2022

- 27 -

<Supplementary Explanation>
Please refer to the following list of Frequently Asked Questions regarding Proposal 2 (Approval of Share
Exchange Agreement between the Company and United Super Markets Holdings Inc.).
Q1. Why did you choose a share exchange method using U.S.M.H shares as consideration?
The Share Exchange is one that uses U.S.M.H shares as consideration and is not a cash-out involving
cash consideration. Following the Share Exchange, through which U.S.M.H shares, which are theconsideration for the Share Exchange, will be delivered to shareholders of the Company, the shareholdersof the Company will become shareholders of U.S.M.H, which will be the Company’s wholly owningparent company, and it will be possible to provide the value and benefits that can be generated by the
Share Exchange. In addition, U.S.M.H’s shares are listed shares with a high level of liquidity, making it
possible to secure trading opportunities for our shareholders. Therefore, we have adopted the shareexchange method as we believe it will be beneficial for shareholders of the Company.
Q2. Does the Share Exchange constitute a tax-qualified reorganization? Or does it incur tax for theshareholders of the Company?
We believe that the Share Exchange will be recognized as a tax-qualified reorganization.
Although we understand that the tax-qualified reorganization itself will not result in any tax liability forour shareholders, it is possible that tax liability may arise if U.S.M.H shares are sold after the Share
Exchange. Please consult a tax professional for more information.
Q3. Until when can the Company’s shares be sold on the market?
As a result of the Share Exchange, the Company will become a wholly owned subsidiary of U.S.M.H asof the effective date (November 30, 2024) (scheduled). The Company’s shares can be traded on themarket until the final trading day of November 27 (scheduled).
Q4. What will happen to the Company’s shares in the Share Exchange?
On the effective date of the Share Exchange (November 30, 2024) (scheduled), 1.46 shares of U.S.M.H
shall be allocated and delivered for each share of the Company’s stock, and the Company’s shareholders
will hold U.S.M.H shares in exchange for the shares they hold in the Company.
Q5. What will happen to fractional shares less than one share in the Share Exchange?
In accordance with the provisions of Article 234 of the Companies Act and other related laws andregulations, for the Company’s shareholders who will receive fractions of U.S.M.H shares less than one
share as a result of the Share Exchange, U.S.M.H will sell a number of U.S.M.H shares equivalent to thetotal number of such fractions (if there is a fraction less than 1 in the total number, it will be roundeddown), and the sale proceeds will be distributed to the Company’s shareholders in proportion to thefractions thereof.
Q6. How was the allotment ratio for the Share Exchange determined?
The Company appointed Nomura Securities Co., Ltd. and Nagashima Ohno & Tsunematsu as its
respective third-party valuation institution and legal advisor independent of AEON, and U.S.M.H
appointed Mizuho Securities Co., Ltd. and Yodoyabashi & Yamagami LPC as its respective third-party
valuation institution and legal advisor independent of AEON, and both companies conducted thoroughexaminations.
Both companies obtained share exchange ratio calculation reports submitted by their respective thirdparty valuation institution, and carefully discussed and considered the advice from their respective legal
advisor, and the results of their respective due diligence review conducted on the other party, andrepeatedly conducted negotiations and consultations by comprehensively taking into account factors,
such as their financial condition, asset status and future prospects. In addition, both companies
established a Special Committee, which consists solely of independent members with no conflict of- 28 -

interest in the other party or AEON, and carefully discussed and considered in light of the instructions,advice, and content of the report from the committee.
As a result, the Company and U.S.M.H concluded that the allotment ratio for this Share Exchange isappropriate and will benefit the respective shareholders, and therefore determined that it is appropriate toimplement the Share Exchange based on the Share Exchange Ratio.
Q7. Is the allotment ratio for the Share Exchange appropriate?
As stated in the response to Q6., the Company obtained a share exchange ratio calculation report from
Nomura Securities, our third-party valuation institution, and carefully discussed and considered thematters, taking into account the advice received from Nagashima Ohno & Tsunematsu, our legal advisor,
the results of the due diligence review of U.S.M.H by the Company, the instructions and advice received
from the Company’s Special Committee, which consists solely of independent members with no conflictof interest in U.S.M.H or AEON, as well as the content of the report received from the Committee. As aresult, the Company determined that the Share Exchange Ratio allotting 1.46 shares of U.S.M.H for eachshare of the Company’s stock is appropriate and will contribute to the interests of the Company’s
shareholders, and has therefore determined that it is appropriate to implement the Share Exchange basedon the Share Exchange Ratio.
The valuation range of the Share Exchange Ratio by Nomura Securities is as follows.
Calculation method
Market price average method
Comparable multiple valuation method
DCF method

Calculation range of share exchange ratio
1.34 to 1.50
1.16 to 1.20
0.96 to 1.68

Q8. What will happen to U.S.M.H shares constituting less than one unit that will be held as a result of
the Share Exchange?
Pursuant to the provisions of the Articles of Incorporation and the Share Handling Regulations of
U.S.M.H, the shareholders of the Company who will hold less than one unit (less than 100 shares) of
U.S.M.H shares as a result of the Share Exchange will be eligible to use the following systems withregard to U.S.M.H shares: (1) System for requiring additional purchase of shares less than one unit
(additional purchase to constitute 100 shares); (2) System for requesting purchase of shares less than one
unit (sale of shares less than one unit). (Please refer to (Note 3) on page 9 of the Notice of Convocationof the Ordinary General Meeting of Shareholders.) Shares less than one (1) unit cannot be sold on thefinancial instruments exchange market.

- 29 -

Proposal 3:

Election of Nine (9) Directors

The terms of office of all nine (9) Directors will expire at the conclusion of this General Meeting of
Shareholders.
Accordingly, the Company requests the election of nine (9) Directors.
The candidates for Director are as follows:

No.

1
2

3

4

5

6
7

Name

Current positions and responsibilities
at the Company

Yoshikazu Motosugi [Reappointment] Representative Director and President
Senior Managing Director[Reappointment] Responsible for Compliance andAdministration
Managing Director
Kazuhiko Shimamoto [Reappointment] Responsible for Group Management Strategy,
Sales Strategy, and IR
Director
Makoto Sugaya[Reappointment] Responsible for Store Operations; General
Manager of Sales Division
Director
Responsible for Merchandise and Logistics;
Masato Moriya[Reappointment]
General Manager of Perishable Foods andPrepared Meals Strategy Division
Director
Shigeru Nakabayashi [Reappointment]
Responsible for Information Systems
Kazushige Hamura

Hiroyuki Watanabe[Reappointment] Director[Reappointment]
8
Shuichi Otani[Outside]
Outside Director[Independent][Reappointment]
9
Yaeko Ishida[Outside]
Outside Director[Independent][Reappointment] Candidate for reappointment as Director[Outside] Candidate for Outside Director[Independent] Independent director stipulated by the rules of stock exchanges, etc.

*

Attendanceat theBoard ofDirectors
meetings
25/25(100%)
24/25(96.0%)
19/19(100%)
25/25(100%)
19/19(100%)
19/19(100%)
14/19(93.3%*)
25/25(100%)
25/25(100%)

Attendance record of Mr. Hiroyuki Watanabe
Since Mr. Hiroyuki Watanabe’s assumption of office as Director, 19 Board of Directors meetings
were held during the fiscal year under review. Of these meetings, four were dedicated todeliberations on management integration. He did not attend these four meetings as he was aninterested party with respect to the subject matter of these meetings, and therefore, his attendance
rate was calculated, taking such circumstances into consideration.
Note: The Company’s decision policy on nominations and the distribution of Directors’ major knowledge,
experience, ability, etc. of Directors after the General Meeting are stated on pages 44 to 46.

- 30 -

No.

Name(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions

Number of sharesof the Company
heldApril 1986
June 2011
October 2012

Yoshikazu Motosugi(March 20, 1964)
1[Reappointment]

Joined the Company
Executive Officer
General Manager of Sales & Marketing Planning
Headquarters
September 2014 General Manager of Group Human Resources
Headquarters
June 2016
Director
General Manager of Sales Headquarters
July 2018
General Manager of Merchandise Headquarters
October 2019
General Manager of Sales & Marketing Headquarters
April 2020
Representative Director and President (to present)

5,800[Significant concurrent positions]
None[Attendance at the Boardof Directors meetings]
25/25(100%)[Reason for nomination as a candidate for Director]
Mr. Yoshikazu Motosugi has fulfilled an appropriate role in decision-making on important matters, supervising businessexecution, etc. with the aim of contributing to society as a useful business to the region. He is well versed in all aspects ofbusinesses and, as the Company’s Representative Director and President, committed to transformation and challenge, he has
been responsible for management to resolve various important issues through the initiatives for key strategies based on the
Inageya Group Sustainability Policy. The Company has renominated him as a Director candidate because it considers him to
be an appropriate talented person to achieve sustainable growth and medium- to long-term increase of the Group’s corporate
value by reflecting in the Company’s management the synergy with the AEON Group to be achieved through the management
integration.
There is no special interest between the candidate and the Company.

- 31 -

No.

Name(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions
April 1988
April 2008
January 2011
October 2011
January 2015
August 2017
August 2019
October 2019
June 2020

2

Kazushige Hamura(January 16, 1964)

December 2020

[Reappointment]

June 2021[Attendance at the Boardof Directors meetings]
24/25(96.0%)

April 2022
October 2022
June 2023

Joined the Kyowa Bank, Ltd. (currently Resona Bank,
Limited)General Manager of Customer Service Division, Akishima
Branch, Resona Bank, Limited
Senior Auditor of Internal Audit Division
General Manager of Sales Division III, Shinjuku BranchCompliance Officer of Compliance Division and Advisorof Sales Support Division
Seconded to the Company
Joined the Company
Executive Officer of the Company; In charge of IR; incharge of Finance; and General Manager of Finance
Division
Director
General Manager of Administrative Headquarters; incharge of IR; in charge of Finance; and General Manager
of Finance Division
General Manager of Administrative Headquarters; incharge of IR; in charge of Finance; in charge ofCompliance; and General Manager of Finance Division
Managing Director
General Manager of Administrative Headquarters; incharge of Compliance; and General Manager of Inageya
Group Life Service Center
General Manager of Administrative Headquarters; incharge of Compliance
In charge of Compliance; Human Resources; General
Affairs; Finance; Store Development; Information Systems
Senior Managing Director (to present)
Responsible for Compliance and Administration (topresent)

Number of sharesof the Company
held

5,680

[Significant concurrent positions]
None[Reason for nomination as a candidate for Director]
Mr. Kazushige Hamura has fulfilled an appropriate role in decision-making on important matters, supervising businessexecution, etc. with the aim of contributing to society as a useful business to the region. Leveraging his abundant experienceand a high level of insight in financial institution operations, as Senior Managing Director, he has been focusing on raisingawareness of and providing guidance on compliance, and managing risks, and has exercised leadership in the cultivation of asound working environment and corporate culture, as well as the restructuring of the organization, systems, and functions.
The Company has renominated him as a Director candidate because it considers him to be an appropriate talented person toachieve sustainable growth and medium- to long-term increase of the Group’s corporate value by reflecting in the Company’s
management the synergy with the AEON Group to be achieved through the management integration.
There is no special interest between the candidate and the Company.

- 32 -

No.

Name(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions

Number of sharesof the Company
held

July 1981
July 2009

Kazuhiko Shimamoto(April 16, 1961)[Reappointment]
3[Attendance at the Boardof Directors meetings]
19/19(100%)

Joined the Company
Executive Officer
General Manager of FM Headquarters
June 2011
Director
General Manager of FM Headquarters
October 2012
General Manager of Sales Headquarters; General Manager
of FM Headquarters
August 2013
General Manager of Sales Headquarters
June 2016
Managing Director
In charge of President’s Office and Diversity; General
Manager of Human Resources Headquarters
June 2017
Senior Executive Director, Welpark Co., Ltd.
November 2019 Representative Director and President
June 2023
Managing Director of the Company (to present)
Responsible for Group Management Strategy, Sales
Strategy, and IR (to present)

9,000[Significant concurrent positions]
None[Reason for nomination as a candidate for Director]
Mr. Kazuhiko Shimamoto has fulfilled an appropriate role in decision-making on important matters, supervising businessexecution, etc. with the aim of contributing to society as a useful business to the region. Leveraging his abundant businessexperience in the sales divisions of the Company and management experience at a subsidiary of the Company, etc., as aManaging Director, he has promoted strengthening of the sales plan, strengthening of the new businesses, operational
improvement, etc. and has exercised leadership concerning the management strategy and the sales strategy. The Company hasrenominated him as a Director candidate because it considers him to be an appropriate talented person to achieve sustainablegrowth and medium- to long-term increase of the Group’s corporate value by reflecting in the Company’s management thesynergy with the AEON Group to be achieved through the management integration.
There is no special interest between the candidate and the Company.

- 33 -

No.

Name(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions
March 1993
July 2011
October 2012
August 2013
September 2014
March 2016
March 2019

Makoto Sugaya(December 6, 1969)
4[Reappointment][Attendance at the Boardof Directors meetings]
25/25(100%)

June 2019
October 2019
June 2020
June 2021
October 2022
June 2023

Joined the Company
General Manager of Ageo-shonan Store
General Manager of Noda-mizuki StoreManager of Grocery SV GroupManager of No.7 Sales Group
General Manager of No.6 Sales Group
General Manager in charge of Model Stores and Division
PL
Executive Officer
In charge of Human Resources and Division PL
In charge of Human Resources and General Affairs; andGeneral Manager of General Affairs Division
Director (to present)
General Manager of Sales Strategy Headquarters
In charge of Store Reform; General Manager of Sales
Division
Responsible for Store Operations; General Manager ofSales Division (to present)

Number of sharesof the Company
held

3,468

[Significant concurrent positions]
None[Reason for nomination as a candidate for Director]
Mr. Makoto Sugaya has fulfilled an appropriate role in decision-making on important matters, supervising business execution,etc. with the aim of contributing to society as a useful business to the region. Leveraging his abundant experience in theoperations of the Company’s sales divisions, he has promoted initiatives to improve store competitiveness and exercisedleadership concerning store operation. The Company has renominated him as a Director candidate because it considers him
to be an appropriate talented person to achieve sustainable growth and medium- to long-term increase of the Group’s corporate
value by reflecting in the Company’s management the synergy with the AEON Group to be achieved through the management
integration.
There is no special interest between the candidate and the Company.

- 34 -

No.

Name(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions
April 1988
August 2006
July 2009
July 2010
February 2012
June 2013
August 2013
April 2014

Masato Moriya(February 24, 1966)[Reappointment]
5[Attendance at the Boardof Directors meetings]
19/19(100%)

June 2018

July 2018
June 2020
April 2021
June 2023

Joined the Company
General Manager of Processed Meat Division
General Manager of Sales & Marketing Headquarters
General Manager of Tachikawa-saiwai Store
General Manager of Fresh Fruit & Vegetables
Executive Officer
Deputy General Manager of Merchandise Headquarters,
General Manager of Perishables; Group Manager of Fresh
Fruit & Vegetables
General Manager of Sales & Marketing Planning
Headquarters
Senior Executive Officer
General Manager of Sales & Marketing Planning
Headquarters; General Manager of Sales & Marketing
Planning Division; in charge of ESBI Operations
General Manager of Sales Headquarters
Senior Executive Director, SAVIA Corporation
Representative Director and President
Director of the Company (to present)
Responsible for Merchandise and Logistics; General
Manager of Perishable Foods and Prepared Meals Strategy
Division (to present)

Number of sharesof the Company
held

2,000

[Significant concurrent positions]
None[Reason for nomination as a candidate for Director]
Mr. Masato Moriya has fulfilled an appropriate role in decision-making on important matters, supervising business execution,etc. with the aim of contributing to society as a useful business to the region. Leveraging his extensive experience in the
Company’s merchandise, sales planning, and sales divisions of the Company and management experience at a subsidiary of
the Company, he has promoted strengthening of private-brand products and enhancement of logistics efficiency and exercisedleadership concerning the merchandise and logistics strategies. The Company has renominated him as a Director candidate
because it considers him to be an appropriate talented person to achieve sustainable growth and medium- to long-term increaseof the Group’s corporate value by reflecting in the Company’s management the synergy with the AEON Group to be achieved
through the management integration.
There is no special interest between the candidate and the Company.

- 35 -

No.

Name(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions

Number of sharesof the Company
heldApril 1988
February 2003

Shigeru Nakabayashi(January 17, 1966)[Reappointment]
6[Attendance at the Boardof Directors meetings]
19/19(100%)

Joined Fujitsu Limited
General Manager of the Project Section, No. 1 Logistics
Solutions Dept 1
October 2009
General Manager of Retail Solution Dept. 3, Fujitsu
System Solutions Limited
April 2015
General Manager of the Information Service Department,
Fujitsu Systems East Limited
November 2016 General Manager of the Information Service Department,
Fujitsu Limited
June 2021
Representative Director and President of AB System
Solutions Limited
April 2023
Joined the Company
System Advisor, Information Systems Division
June 2023
Director (to present)
Responsible for Information Systems (to present)

0[Significant concurrent positions]
None[Reason for nomination as a candidate for Director]
Mr. Shigeru Nakabayashi has fulfilled an appropriate role in decision-making on important matters, supervising businessexecution, etc. with the aim of contributing to society as a useful business to the region. Leveraging his extensive businessexperience as a system engineer engaged in information system construction services mainly for the retail industry, he haspromoted strengthening of the Information Systems Division and improvement of efficiency of field operations by promoting
digitalization and exercised leadership concerning information systems. The Company has renominated him as a Director
candidate because it considers him to be an appropriate talented person to achieve sustainable growth and medium- to longterm increase of the Group’s corporate value by reflecting in the Company’s management the synergy with the AEON Groupto be achieved through the management integration.
There is no special interest between the candidate and the Company.

- 36 -

No.

7

Name
(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions

April 1982
Joined Isejin Jusco Co., Ltd. (currently AEON CO., LTD.)
September 2003 General Manager, Administration Department, Kanto
Company, Jusco Co., Ltd.
May 2006
Representative Director, AEON Financial Project Co., Ltd.
(currently AEON Bank, Ltd.)
September 2006 Director, Head of Personnel & General Affairs and Public
Relations
April 2008
Director and Managing Executive Officer; in charge of
Personnel Department and General Affairs Department
June 2012
Director and Managing Executive Officer; General
Manager of Administrative Headquarters
Hiroyuki Watanabe
November 2012 Director, AEON CREDIT SERVICE CO., LTD. (currently(July 17, 1958)
AEON Financial Service Co., Ltd.)
April 2013
Director; in charge of Personnel & General Affairs, Legal[Reappointment]& Compliance
April 2014
Representative Director; Senior Managing Executive
Officer and General Manager of Sales Division, AEON
[Attendance at the Board
Bank Co., Ltd
of Directors meetings]
April 2015
President & CEO
14/19
June 2016
Director, AEON CREDIT SERVICE CO., LTD. (currently(93.3%)AEON Financial Service Co., Ltd.)
Since his assumption of
June
2017
Executive Vice President, AEON Financial Service Co.,
office as Director, 19
Ltd.
Board of Directors
meetings were held during September 2018 Executive Officer, in charge of Human Resources &Administration; Risk Management, AEON CO., LTD.
the fiscal year under
October
2018
Director, AEON Financial Service Co., Ltd. (to present)
review. Of these meetings,
May 2021
Director, AEON DELIGHT CO., LTD. (to present)
four were dedicated todeliberations on
March 2022
Executive Vice President, in charge of Human Resourcesmanagement integration.
& Administration; Risk Management, AEON CO., LTD.
He did not attend these June 2023
Outside Director of the Company
four meetings as he was an November 2023 Director (to present)interested party with
March 2024
Executive Vice President and Executive Officer
respect to the subject
Chief Human Resources and AEON Living Zone
matter of these meetings,
Promotion Officer, Supervisor of Risk Management,
and therefore, his
AEON CO., LTD. (to present)
attendance rate was[Significant
concurrent
positions]calculated, taking such
Executive Vice President, AEON CO., LTD.
circumstances into
consideration.
Director, AEON Financial Service Co., Ltd.
Director, AEON DELIGHT CO., LTD.

Number of sharesof the Company
held0[Reason for nomination as a candidate for Director]
Mr. Hiroyuki Watanabe has been engaged in management of AEON Group companies for many years and has abundant
experience and a high level of insight as a corporate manager. He has actively voiced his opinion at Board of Directors
meetings, and has fulfilled an appropriates role in decision-making on important matters, supervising business execution, etc.
The Company has renominated him as a Director candidate because it considers him to be an appropriate talented person toachieve sustainable growth and medium- to long-term increase of the Group’s corporate value by reflecting in the Company’s
management the synergy with the AEON Group to be achieved through the management integration.
Special interests between the candidate and the Company.
Mr. Hiroyuki Watanabe is concurrently Executive Vice President and Executive Officer, AEON CO., LTD., which is the parent of
the Company and with which the Company deposits funds for management.
Mr. Hiroyuki Watanabe is concurrently Director of AEON Financial Service Co., Ltd., which is a business alliance partner of theCompany.
Mr. Hiroyuki Watanabe is concurrently Director of AEON DELIGHT CO., LTD., which is a business alliance partner of theCompany.

- 37 -

No.

Name(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions
April 1977
April 2002
April 2004
April 2009
June 2009
June 2011
April 2018
June 2020

Shuichi Otani(April 9, 1954)

Joined Nissan Motor Co., Ltd.
General Manager of Materials DivisionCorporate Officer
Senior Vice President, NISSAN SHATAI CO., LTD.
Director and Senior Vice President
Representative Director and President, NISSAN SHATAICOMPUTER SERVICE Co., Ltd.
AdvisorOutside Director of the Company (to present)[Significant concurrent positions]
None
100

[Reappointment][Outside][Independent]

8

Number of sharesof the Company
held[Term of Office as
Director]
4 years at the conclusionof this General Meeting[Attendance at the Boardof Directors meetings]
25/25(100%)[Reason for nomination as a candidate for Outside Director and summary of expected roles]
Mr. Shuichi Otani has been engaged in corporate management for many years and has abundant experience and a high levelof insight as a corporate manager. He has actively voiced his opinion at Board of Directors meetings, provided helpful advice
and supervision, and fulfilled an appropriate role as Outside Director of the Company. He has also contributed to moretransparent and fair management as Chairman of the Nomination and Compensation Committee. To achieve sustainablegrowth and medium- to long-term increase of the Company’s corporate value, his expected role will be to utilize his
experience and insight to provide supervision and advice. The Company has therefore renominated him as an Outside Director
candidate.
[Matters concerning independence]
The Company has designated him as an independent director, who does not violate the independence standards stipulated by
the Tokyo Stock Exchange nor represent risks of conflicts of interest with general shareholders.
There is no special interest between the candidate and the Company.

- 38 -

No.

Name(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions

Number of sharesof the Company
held

October 2000
October 2000
October 2005
January 2007
April 2016

Yaeko Ishida(August 18, 1970)[Reappointment][Outside][Independent]

9[Term of Office as
Director]
3 years at the conclusionof this General Meeting

Registered as an attorney-at-law
Joined Yamazaki General Law OfficePartner, Yamazaki General Law Office
Judicial Commissioner of Tokyo Summary Court
Conciliation Commissioner of Tachikawa Branch ofTokyo Family Court
June 2019
Outside Audit & Supervisory Board Member of Citizen
Watch Co., Ltd. (to present)
November 2019 Partner of Midorikawa-Kitadai Law Office (to present)
June 2021
Outside Director of the Company (to present)
April 2022
Vice-president of Dai-Ichi Tokyo Bar Association
June 2023
Outside Director of Shindengen Electric ManufacturingCo., Ltd. (to present)[Significant concurrent positions]
Partner of Midorikawa-Kitadai Law OfficeOutside Audit & Supervisory Board Member of Citizen Watch Co., Ltd.
Outside Director of Shindengen Electric Manufacturing Co., Ltd.

0

[Attendance at the Boardof Directors meetings]
25/25(100%)[Reason for nomination as a candidate for Outside Director and summary of expected roles]
Ms. Yaeko Ishida has abundant experience and a high level of insight as an attorney-at-law. Although she has never been
involved in corporate management other than as an outside officer, she has actively voiced her opinion at Board of Directors
meetings, provided helpful advice and supervision, and fulfilled an appropriate role as Outside Director of the Company. She
has also contributed to more transparent and fair management as Nomination and Compensation Committee Member. To
achieve sustainable growth and medium- to long-term increase of the Company’s corporate value, her expected role will beto utilize her experience and insight to provide supervision and advice. The Company has therefore renominated her as an
Outside Director candidate.
[Matters concerning independence]
The Company has designated her as an independent director, who does not violate the independence standards stipulated by
the Tokyo Stock Exchange nor represent risks of conflicts of interest with general shareholders.
There is no special interest between the candidate and the Company.

- 39 -

Notes:1.
Mr. Shuichi Otani and Ms. Yaeko Ishida are candidates for Outside Director.
2.
Pursuant to Article 427, Paragraph 1 of the Companies Act and the provisions of the Company’s Articles
of Incorporation, the Company has concluded liability limitation agreements with Mr. Hiroyuki
Watanabe, who is a non-executive Director, and Mr. Shuichi Otani and Ms. Yaeko Ishida, who are
Outside Directors, which limit their liability for damages stipulated in Article 423, Paragraph 1 of thesaid Act. If they are reelected and assume their positions, the Company plans to continue the same
liability limitation agreements with them. The maximum amount of liability for damages under these
agreements is the minimum amount of liability set forth in Article 425, Paragraph 1 of the Companies
Act.
3.
Pursuant to Article 430-3, Paragraph 1 of the Companies Act, the Company has concluded a directors
and officers liability insurance contract with an insurance company, to cover losses arising fromdamages claims related to the execution of his or her duties (except in cases corresponding toexemptions under the insurance contract) to be borne by the insured parties. If the candidates are elected
and assume their positions, they will be covered under this insurance contract. The term of the insurance
contract is one year, and the Company intends to renew the contract before this term expires, byresolution of the Board of Directors.
4.
Ms. Yaeko Ishida’s name in her capacity as an attorney-at-law is Yaeko Kitadai.

- 40 -

Proposal 4:

Election of One (1) Audit & Supervisory Board Member

The term of office of Audit & Supervisory Board Member Mr. Masakazu Yamamoto will expire at theconclusion of this General Meeting of Shareholders. Accordingly, the election of one (1) Audit &Supervisory Board Member is proposed.
The consent of the Audit & Supervisory Board has been obtained with regard to the submission of this
Proposal.
The candidate for Audit & Supervisory Board Member is as follows:
Name(Date of birth)

Career summary and positions

Number of sharesof the Company
heldApril 1978

Joined The Fuji Bank, Limited (currently Mizuho Bank,Ltd.)
December 1987 Assistant to General Manager, International Business
Planning Division
July 1992
Senior Assistant to General Manager, Business Promotion
Section, International Treasury Division
January 1994
Deputy Manager, Foreign Currency Treasury Section,
International Treasury Division
May 1994
Deputy General Manager, Customer Relations Section,
International Treasury Division
October 1997
Masakazu Yamamoto
Deputy Councilor, International Business Planning
Division(August 25, 1955)
December 1997 General Manager, Hong Kong Dealing Office,International Treasury Division[Reappointment]
April 2002
Councilor, Hong Kong Treasury Office, Market Planning[Outside]
Division, Mizuho Corporate Bank, Ltd. (currently Mizuho[Independent]
Bank, Ltd.)
August 2002
General Manager, Hanoi Branch[Term of Office as Audit &March 2005
General Manager, Singapore BranchSupervisory Board Member]
April 2007
Deputy Director-General, Assistant to Osaka Sales
8 years at the conclusion of this
Division II, Seconded to Sharp Corporation
General Meeting
March 2008
Deputy General Manager, Accounting Headquarters;
General Manager, Treasury Department, Sharp[Attendance at the Board of
Corporation
Directors meetings]
April 2013
General Manager, Finance Department; Chief, Treasury
25/25Group, Corporate Headquarters
April
2015
Director, Finance Department, Corporate Headquarters(100%)
April 2016
Senior Counselor, Finance Department, Accounting &Finance Headquarters[Attendance at the Audit &June 2016
Outside Audit & Supervisory Board Member of theSupervisory Board meetings]
Company (to present)
20/20[Significant concurrent positions](100%)
None0[Reason for nomination as a candidate for Audit & Supervisory Board Member]
Mr. Masakazu Yamamoto was engaged in financial affairs at financial institutions and business companies for many years. The
Company has renominated him as an Audit & Supervisory Board Member candidate so that his abundant experience and a highlevel of insight will be reflected in the Company’s audit.
Although he has never been involved in the management of a company other than as an outside officer, the Company believes that
he will be able to appropriately fulfill his duties as Outside Audit & Supervisory Board Member based on the reasons above.
[Matters concerning independence]
The Company has designated him as an independent auditor, who does not violate the independence standards stipulated by the
Tokyo Stock Exchange nor represent risks of conflicts of interest with general shareholders. Although he used to work for Mizuho
Bank, Ltd., from which the Company borrows money, he retired from it more than 10 years ago.
There is no special interest between the candidate and the Company.

- 41 -

Notes:1.
Pursuant to Article 427, Paragraph 1 of the Companies Act and the provisions of the Company’s Articles
of Incorporation, the Company has concluded a liability limitation agreement with Mr. Masakazu
Yamamoto, which limits his liability for damages stipulated in Article 423, Paragraph 1 of the said Act.
If Mr. Masakazu Yamamoto is reelected and assumes his position, the Company plans to continue thesame liability limitation agreement with him. The maximum amount of liability for damages under these
agreements is the minimum amount of liability set forth in Article 425, Paragraph 1 of the Companies
Act.
2.
Pursuant to Article 430-3, Paragraph 1 of the Companies Act, the Company has concluded a directors
and officers liability insurance contract with an insurance company, to cover losses arising fromdamages claims related to the execution of his or her duties (except in cases corresponding toexemptions under the insurance contract) to be borne by the insured parties. If the candidate is elected
and assumes his positions, he will be covered under this insurance contract. The term of the insurance
contract is one year, and the Company intends to renew the contract before this term expires, byresolution of the Board of Directors.

- 42 -

Proposal 5: Appointment of an Accounting Auditor
The term of appointment of the current Accounting Auditor, GYOSEI & CO., will expire at the conclusionof this General Meeting of Shareholders.
Accordingly, it is proposed to appoint Deloitte Touche Tohmatsu LLC as Accounting Auditor.
Deloitte Touche Tohmatsu LLC is engaged in accounting audits of all domestic operating companies of
AEON CO., LTD., the parent of the Company. Therefore, based on the decision of the Audit & Supervisory
Board, it is proposed to appoint the same Accounting Auditor as the parent company’s.
The candidate for Accounting Auditor is as follows:
Name
Deloitte Touche Tohmatsu LLC
Principal Office
Marunouchi Nijubashi Building
3-2-3 Marunouchi, Chiyoda-ku, Tokyo
History
May 1968
Tohmatsu Awoki & Co. establishedMay 1975
Joined Touche Ross International (TRI) alliance (currently
Deloitte Touche Tohmatsu Limited (DTTL))
February 1990 Changed the company name to Tohmatsu & Co.
July 2009
Converted to a limited liability company and changed thecompany name in English to Deloitte Touche Tohmatsu LLC
Overview
Share capital:
1,173 million yen
Members:
Employees:
Certified public accountants:
480
Specified employees:
61
Staff:
Certified public accountants:
2,514
Persons who passed the certified public accountant examination (including
assistant accountants):
1,236
Other professionals:
3,610
Clerical staff:
89
Total:
7,990
Number of companies audited:
3,162- 43 -

(Reference)[Decision Policy on Nominations]
Prerequisites for all officers:Strongly empathize with the Group Management Philosophy of realizing Sukoyakeku (to contributeto realizing our customers’ healthy, prosperous, warm daily lives and a healthier society) andpracticing a customer-first approach to businessPossess the ability to contribute to the Group’s sustainable growth and the enhancement of corporate
value



Possess an abundant awareness of compliance with laws, regulations, social and other rules

Possess outstanding character, dignity, knowledge and insight, and a high standard of ethics

Be capable of constructing optimal management systems and structures, and engaging in appropriate andproper corporate management through the establishment of high corporate ethics



Be able to engage in constructive dialogue with shareholders, and reflecting in management theinsights obtained through this dialogue

Configuration of the Board of Directors


The Company selects and nominates members of the Board of Directors with consideration to thebalance of knowledge, experience, ability, diversity, etc. for the Board of Directors overall.

Policy on the selection of internal Directors


Deeply comprehend the Group Code of Conduct, and are able to serve as a model for employees

Possess outstanding management sense, management and leadership qualities, etc.

Possess abundant knowledge, ability, expertise, experience and achievements related to business
operationsPossess the ability to take a high-level, comprehensive view of company-wide business operations,execute business and supervise business execution accordinglyBe able to promote achievement of the Sustainable Development Goals (SDGs), to continue to be acompany that enjoys the support of its customers

Policy on the nomination of Outside Directors

Possess the ability to supervise the execution of business, and provide advice and recommendations
regarding the Company’s sustainable growth from an independent and objective perspective

Possess a high degree of specialized knowledge and abundant experience in fields such as corporate
management, industry knowledge, financial accounting, legal affairs, finance, DX, etc.

Can be expected to voice opinions and act from a stance independent to the execution of business, andcontribute to constructive deliberation at Board of Directors meetingsAre able to engage in effective supervision of management, through important decision-making
regarding Directors, including their appointment and dismissal- 44 -

Policy and process for the appointment of Audit & Supervisory Board Members


Audit & Supervisory Board Members candidates are nominated after consideration whether they
possess sufficient knowledge and insight in fields such as finance, accounting and legal affairs, andafter obtaining the consent of the Audit & Supervisory Board- 45 -

The distribution of Directors’ major knowledge, experience, ability, etc.
Name

Corporate
management

Industry
experience& insight

Finance &accounting

Legal & risk
management

HR &personnel
development

Information
systems &DX

Sustainability& ESG

Yoshikazu○○○○
Motosugi
Kazushige○○○
HamuraKazuhiko○○○○
Shimamoto
Makoto○○SugayaMasato○○○MoriyaShigeru○○○
Nakabayashi
Hiroyuki
○
○
○
○
○
○
Watanabe
Shuichi Otani○○○
Yaeko Ishida○(Note) The above table does not indicate all knowledge, experience, ability, etc. possessed by eachcandidate.

Reason for selecting the various knowledge, experience, ability, etc. categories
Skill type

ReasonCorporate management

Corporate management skill is selected as a necessary requirement in order toappropriately formulate strategies, allocate management resources and makeimportant decisions based on changes in the business environment.
Industry experience & insight Industry experience & insight skills are selected as necessary requirements inorder to meet the diversified needs of our clients in the retail industry.
Finance & accounting
Finance & accounting skills are selected as necessary requirements to enableaccurate and timely disclosure of information and appropriate businessdecisions.
Legal & risk management
Legal and risk management skills are selected as necessary requirements tostrengthen the governance and compliance of the Group.
HR & personnel development HR & personnel development skills are selected as necessary requirements todevelop human resources to support the growth of the Group.
Information systems & DX
Information systems and DX skills are selected as a necessary requirement topromote operational reforms to cope with the digitalized society and toachieve growth.
Sustainability & ESG
Sustainability and ESG skills are selected as necessary requirements topromote measures for the realization of a sustainable society and the mediumto long-term growth of the Group.

- 46 -

(Appendix)

Business Report(April 1, 2023 - March 31, 2024)

1. Overview of the Corporate Group(1)

Business Progress and Results
During the fiscal year ended March 31, 2024, the Japanese economy witnessed an upswing insocioeconomic activity and a recovery in inbound tourism demand, due in part to COVID-19 being
downgraded to a Class 5 Infectious Disease under the Infectious Diseases Act. On the other hand,prices of raw materials and services continue to rise, due to various factors such as the weak yen,rising energy prices and labor shortages, and defensive sentiment remains high among consumers.
As such, the future outlook of the economy remains uncertain.
In the food supermarket industry to which the Group belongs, increasingly diverse buying patterns
among consumers, particularly in online sales, among other factors, are contributing to the ongoingseverity of the environment surrounding sales.
Under these circumstances, in the spirit of “the customer comes first,” the Group has engaged inits business activities with the aim of providing safe and reliable food and contributing to theenrichment of local communities as a useful business to the region.
In operating results for the fiscal year under review, operating revenue increased by 5.2% year on
year to 261,486 million yen, due to a recovery in customer traffic at existing stores, which increasedby 2.6% year on year, achieved by strengthening “sale of the day” and point card measures. Operating
gross profit was 80,642 million yen, up 4.8% year on year, and selling, general and administrative
expenses increased by 3.6% to 77,710 million yen due to efforts to improve efficiency, including
self-checkout systems and electronic shelf labels.
As a result, operating profit amounted to 2,931 million yen (up 54.3% year on year), ordinary profit
amounted to 2,892 million yen (up 32.4% year on year), and net profit attributable to owners of theparent amounted to 497 million yen (net loss attributable to owners of the parent of 2,105 million
yen in the previous fiscal year).
The Group became a consolidated subsidiary of the AEON Group on December 6, 2023.

- 47 -

The status by reportable segment of the Group was as follows:

Supermarket
Business

Net sales

Operating profit

203, 925 million yen(year-on-year difference: up 5.4%)

2,037 million yen(year-on-year difference: up 145.1%)

Share ofNet sales

Operating profit

net sales

81.4%(million yen)(million yen)

FY ended
March 31, 2023

193,470

FY ended
March 31, 2023

831

FY ended
March 31, 2024

203,925

FY ended
March 31, 2024

2,037With the management goal of “delivering freshness at reasonable prices and with heart” and the aimof giving customers a sense of enjoyment, delicious taste, and freshness, the Company has promoted
policies based on a theme of increasing the frequency of customer visits through the development of
products that offer value, the provision of goods at reasonable prices, and the creation of places for
shopping from the customers’ viewpoint.
In terms of goods, we worked to strengthen our fresh foods, prepared meals, and in-store bakery
items in our efforts to differentiate ourselves from our competitors. In January 2024, our “Chokotto
Tabetai Katsuo-don,” a snack-size bonito rice bowl developed by our young buyers, received anaward for excellence in the sushi category of the Bento and Prepared Meal Awards hosted by the
National Supermarket Association of Japan. In such ways, we have been able to convey thedeliciousness and appeal of our goods and deliver discerning products to our customers. For grocery
items, to counter price rises of many products caused by soaring raw material costs, we periodically
implemented discount sales by category in our efforts to expand the number of customers.
In sales promotions, we implemented a sale-of-the day approach for commodity goods as anincentive for customers to visit our stores, and strengthened point card measures for member
customers. We also worked to expand contact points with customers with the use of digital content,
including a LINE mini app and native apps, as well as paper leaflets.
To respond to changes in lifestyle, we strengthened the development of online supermarkets,
reaching 18 stores as of March 31, 2024. We will further pursue initiatives in quick commerce as a
response to last-mile delivery (from receipt of order from customer to delivery).
To allay the concerns of customers in regional areas, we expanded the service area of theTokushimaru mobile supermarket service, launching operations at the Yokohama Sakonyama store(Asahi-ku, Yokohama City) in February. We have steadily increased the number of the fleet, whichstood at 25 vehicles as of March 31, 2024.
With the aims of mitigating customers’ stress when waiting in checkout lines, responding toincreasingly diverse payment methods, and eliminating labor shortages, we are accelerating the
introduction of semi and full self-checkout systems.
In terms of capital investment, we opened one new store, the Nerima Nakamura-Minami Store(Nerima-ku, Tokyo) through a scrap-and-replace scheme and closed four stores, namely ina21- 48 -

Nerima Nakamura-Minami Store (Nerima-ku, Tokyo), ina21 Machida Aihara-Ekimae Store(Machida City, Tokyo), Tachikawa Minamiguchi Store (Tachikawa City, Tokyo), and Kawasaki
Nakanoshima Store (Tama-ku, Kawasaki City), the last for scrap-and-build purposes. We also
continued to promote the revitalization of existing stores with the refurbishment of 16 stores,
including Yokohama Sakonyama Store (Asahi-ku, Yokohama City), Moro Store (Moroyama-machi,
Iruma-gun, Saitama), and Chofu Sengawa Store (Chofu City, Tokyo). The number of stores as ofMarch 31, 2024 stood at 130, a decrease of three stores from the end of the previous fiscal year.
In the third quarter, the Company became a subsidiary of AEON CO., LTD., making it a memberof AEON Group. Currently, the Company is working to gradually expand TOPVALU private brandproducts, an asset of the AEON Group, to differentiate itself from its competitors. We are also
working to improve customer convenience by introducing AEON Pay, a payment method of the
AEON Group.
As a result of the above, net sales at existing stores increased 5.4% year on year, with segment
sales (external customers) of 203,925 million yen (up 5.4%) and segment profit of 2,037 million yen(up 145.1%) in the fiscal year under review.

Drugstore
Business

Net sales

Operating profit

46,196 million yen(year-on-year difference: up 5.8%)

589 million yen(year-on-year difference: down 22.3%)

Share ofNet sales

net sales

18.4%(million yen)

Operating profit(million yen)

FY ended
March 31, 2023

43,676

FY ended
March 31, 2023

758

FY ended
March 31, 2024

46,196

FY ended
March 31, 2024

589

Under the basic policy of "Enhancing growth capacity and profitability by deepening chain store
management,” Welpark Co., Ltd. is working on new drugstore openings and the refurbishment ofexisting drugstores, promoting drugstores with dispensing pharmacies attached, and striving toincrease its growth capacity through the expansion of e-commerce channels. Welpark is also engaging
in sales activities with the aim of maximizing the benefits of chain store management, such as
improving sales per employee hour with the full transition to a new distribution center to reduce
receiving operations at stores, thus enhancing the appeal of individual stores and increasing customer
satisfaction.
In terms of capital investment, a new store with attached dispensing pharmacy, Higashimurayama
Fujimi-cho 3-chome Store (Higashimurayama City, Tokyo) was opened, while four stores, including
Niiza Katayama Store (Niiza City, Saitama), Futamatagawa Kitaguchi Store (Asahi-ku, Yokohama
City), Fujimino Store (Fujimino City, Saitama), and Koshigaya Store (Koshigaya City, Saitama) wereclosed. In addition, 23 stores, including Hanakoganei Ekimae Store (Kodaira City, Tokyo) wererefurbished, and a dispensing pharmacy was newly added to the Kunitachi Yagawa Store (KunitachiCity, Tokyo), as part of the revitalization of existing stores. The number of stores as of March 31,- 49 -

2024 stood at 140.
As a result of the above, net sales at existing stores increased 4.9% year on year, with segment
sales (external customers) of 46,196 million yen (up 5.8%) and segment profit of 589 million yen(down 22.3%) in the fiscal year under review.

Retail Support
Business

Net sales

Operating profit

471 million yen(year-on-year difference: down 41.6%)

320 million yen(year-on-year difference: up 10.5%)

Share ofNet sales(million yen)

Operating profit

FY ended
March 31, 2023

806

FY ended
March 31, 2023

289

FY ended
March 31, 2024

471

FY ended
March 31, 2024320

net sales

0.2%(million yen)

SUN FOOD JAPAN CO., LTD., a wholesaler of daily food products and manufacturer of prepared
meals, is engaged in the provision of goods that are safe, reliable and delicious and that offer value.
The company’s prepared meals manufacturing business has concentrated its efforts in providing
backup for the strengthening of this business within the Group, such as the joint development ofproprietary products with Inageya Co., Ltd., and in-house manufacturing.
SAVIA Corporation is engaged in the planning, design, security, and cleaning of buildings andfacilities, with a particular focus on commercial facilities. To assist the enhancement of the Inageya
Group’s corporate value as a useful business to the region, the company works on cost reductions
and risk mitigations in the development and management of stores through its involvement indeliberations from the planning stage. It has also provided non-Group clients with safe, reliable, andcomfortable functions and services that it has accumulated in its operations within the Group.
Inageya Wing Co., Ltd., a special subsidiary that aims to promote the employment of people withdisabilities, is engaged in support for the employment of people with disabilities at Group companies,
as well as developing employees’ skills and supporting their independence. The company also plays
a role in deepening understanding of people with disabilities among Group companies through such
efforts as assisting people with disabilities to become settled in their workplaces.
INAGEYA DREAM FARM CO. LTD. is engaged in agricultural management, such as open-field
cultivation and hydroponic cultivation, and works to improve quality and promote local production
and local consumption, with the aim of creating wellbeing and smiles with “safety,” “reliability,” and“deliciousness.” The company also plays a role in human resources development in the Group,
including conducting agricultural training as a learning opportunity for fresh fruit and vegetables
staff at Inageya Co., Ltd.
As a result of the above, segment sales (external customers) amounted to 471 million yen (down
41.6% year on year), and segment profit was 320 million yen (up 10.5%) in the fiscal year underreview.

- 50 -

The status of environmental and community contribution activities of the Group is as follows:
As a useful business to the region that offers customers in local communities a daily life that iscentered on safe and reliable food, the Inageya Group has formulated a Sustainability Policy basedon its corporate creed, management philosophy, and Group Vision and is engaged in the promotionof sustainable management.
In our environmental initiatives, to realize a carbon-free society, we will work on the introductionof energy-saving equipment and more installation of solar power facilities, with the aim of achieving
a 46% reduction in carbon emissions by 2030 and carbon neutrality by 2050. We will also continue
to engage in the reduction of food loss, food recycling, and PET bottle recycling (bottle-to-bottle)
for the realization of a recycling-oriented society.
With respect to social contribution activities, the Group has implemented various initiatives, suchas promoting the employment of people with disabilities (Inageya Wing Co., Ltd.), promoting local
production and local consumption (INAGEYA DREAM FARM CO. LTD.), responses to customers
who have difficulties shopping at physical stores (mobile supermarket Tokushimaru), and fundraising activities at stores (support for guide dog training).
The Inageya Group was recognized again in the fiscal year under review in the 2024 CertifiedHealth & Productivity Management Outstanding Organizations Recognition Program run by the
Ministry of Economy, Trade and Industry and Nippon Kenko Kaigi, in recognition of our efforts
toward health and productivity management under the Group’s Health Management Declaration.
Going forward, we will continue to cherish our connections with local communities and contributeto the realization of a healthy society.
(2)

Status of Capital Investment
The total amount spent by the Group on capital investment in the fiscal year under review wasapproximately 4,300 million yen, the main use of which are as follows:(i) Major facilities completed in the consolidated fiscal year under review
Segment

Supermarket
Business
Drugstore
Business

Location

Opening date

Sales floorarea (m2)

Nerima-ku, Tokyo

Nov. 10, 2023

1,385

Higashimurayama
City, Tokyo

Oct. 18, 2023

825

Store
Nerima Nakamura-MinamiStore *1
Higashimurayama Fujimicho 3-chome Store *2*1. New store through scrap and replacement*2. Store with dispensing pharmacy(ii) Ongoing construction and expansion of major facilities during the consolidated fiscal year underreview
Segment
Drugstore
Business

Store
Cross Mukogaoka
store
Other (3 stores)

Location
Tama-ku,
Kawasaki City
Tokyo, other- 51 -

Scheduled
opening date

Sales floor area(m2)

Apr. 5, 2024

434

1st half of 2024

-

(3)

Status of Financing
The Group conducts financing that it deems most favorable and appropriate at each point in time,taking the prevailing business climate and financial situation into comprehensive consideration.
There was no capital increase in the consolidated fiscal year under review.

(4)

Issues to Be Addressed
Management policy, etc.
Establishing the management policy, ultimate vision, and raison d’être of the Group in the form of
the Group Corporate Creed, Group Management Philosophy, and Group Vision, we will conduct ourbusiness that is strongly committed to a “customer first” approach.
(i) Group Corporate Creed (management policy)
Inageya Group’s Corporate Creed is to broadly serve society through sales and to ensure that thecompany’s development is always aligned with the happiness of its employees.
(ii) Group Management Philosophy (ultimate vision)
The realization of Sukoyakeku
Contribute to the creation of healthy, fulfilling, and warm daily lives for customers and ahealthier society
The implementation of the Merchant’s Way
A group of people who can feel the joy of customers as their own joy(iii) Group Vision (raison d’etre)
To contribute to society as a useful business to the region
Inageya Group Sustainability Policy
With pride in the patronage of its customers since its foundation in 1900, the Inageya Group strives
to promote sustainable management based on the Group Corporate Creed, Group Management
Philosophy, and Group Vision. While pursuing the satisfaction of both customers and employees, wewill continue to contribute to the realization of a healthier and sustainable society as an eternal
enterprise that is of useful to the region.

Growthstrategy(i)(i)

Materiality
Creation of businesscompetitivenessCo-prosperity withlocal communities(iii) Promotion ofpartnerships

Promise“We will continue to grow”
We will pursue customer satisfaction by continuously
creating new competitiveness and providing customers inlocal communities with safe, reliable, and high-quality
goods and services.
“We will be useful to the region”
As a useful business to the region, we will grow andprosper together with local communities by contributing
to solutions for those communities’ concerns through ourbusiness activities.
“We will work together”
We will work together to solve issues by boosting thecomprehensive strengths of the Inageya Group andpromoting cooperation with suppliers.

- 52 -

ESG
strategy(iv) Human resources
development thatconnects to the future
along with the growthof the Group(v) Sustainable mitigationof environmental
impact(vi) Building of a strong
governance structure“We will value people”
We will respect the character and values of every
individual, establish an environment in which diverse
human resources can demonstrate their abilities so that
we can make the most of each other's strengths, andthereby pursue employee satisfaction.
“We will protect the global environment”
So that people may continue to enjoy their daily lives
with peace of mind, we will strive to protect the global
environment with responses to climate change and theefficient use of resources throughout our businessactivities.
“We will establish safety and security”
We will conduct fair and highly transparent businessactivities in compliance with laws, regulations, andsocial norms and build a governance structure for thereinforcement of risk management.

Inageya Group Key Strategies
Supermarket Business[Growth strategy] (for next development and convenience)
1. Creation of business competitiveness

Strengthen existing business(Create appealing shopping spaces, streamline store operations and logistics, improvecustomer service levels, etc.)Develop and venture into new businessesStrengthen information systems and leverage digital technologies

2. Coexistence with local communities


Solve concerns of local communities(e.g., dilution of local community, people with difficulties accessing shopping)Promote customers’ health

3. Formulation of partnerships


Boost Group’s comprehensive strengths

Promote cooperation with external parties[ESG strategy] (for sustainable growth)
4. Development of human resources that connects to future along with growth of the Group

Develop next-generation and professional human resources

Active participation of diverse human resources

Establish employee-friendly environmentPromote employees’ health

5. Sustainable mitigation of environmental impact
Reduce waste including food lossPromote conservation of resources- 53 -

Respond to climate change

6. Building of a strong governance structureStrengthen compliance

Thorough information securityStrengthen responses to disaster risks

Promote dialogue with stakeholders

Drugstore Business
1. Expansion of new store openings and development of type-based format strategy
Enhance growth capacity by expanding market share

2. Building of a profit scheme by strengthening health-related products and services andpromoting the reduction of merchandise losses and costsEnhance profitability by improving efficiency

3. Establishment of life-support drugstores
Promote differentiation from competitors by enhancing human capabilities- 54 -

(5)Trends in Assets and Income[Consolidated]

Item

Operating revenue
Net sales
Operating profit
Ordinary profit
Profit (loss) attributable toowners of parent
Profit (loss) per share (yen)Total net assets
Total assets
Net assets per share (yen)(In millions of yen, unless otherwise specified.)
76th fiscal
73rd fiscal
74th fiscal
75th fiscal
year ended
year ended
year ended
year ended
March 31,
March 31,
March 31,
March 31,
2024
2021
2022
2023
(Fiscal year
under review)
265,917
251,417
248,546
261,486
255,637
240,877
237,953
250,594
6,982
3,525
1,899
2,931
7,290
3,880
2,184
2,892
4,124

2,399

(2,105)497

88.98
55,53399,064
1,174.24

51.77
56,886
98,6981,202.24(45.43)54,98097,451
1,160.26

10.73
56,016102,320
1,181.55

Note: In the previous fiscal year, there were errors in the reversal of deferred tax assets in the accounts of thefiling company, Inageya Co., Ltd. Those errors have been corrected retrospectively, and the corrected
figures are presented here.

[Non-consolidated]

Item

Operating revenue
Net sales
Operating profit
Ordinary profit
Profit (loss)
Profit (loss) per share (yen)Total net assets
Total assets
Net assets per share (yen)(In millions of yen, unless otherwise specified.)
76th fiscal
74th fiscal
75th fiscal
year ended
73rd fiscal
year ended
year ended
March 31,year ended
March 31,
March 31,2024
March 31, 2021
2022
2023
(Fiscal year
under review)
213,918
205,064
203,841
214,607
203,739
5,272
5,561
3,023
65.22
42,70981,541
921.24

194,617
2,142
2,436
1,919
41.42
43,72882,351
943.59193,472831
1,259(2,414)(52.09)41,86981,505903.38203,928
2,037
2,133
1,416
30.56
43,455
85,119937.58

Note: In the previous fiscal year, there were errors in the reversal of deferred tax assets. Those errors have beencorrected retrospectively, and the corrected figures are presented here.

(6)

Principal BusinessInageya Group consists of the Company and five consolidated subsidiaries and is engaged
in retail business and retail support business with supermarket businesses and drugstore
business as its pillars.

(7)

Significant Parent Company and Subsidiaries (as of March 31, 2024)(i)

Relationship with the parent company- 55 -

AEON CO., LTD. is the parent company of the Company and holds 50.80% of the voting
rights in the Company.

(ii) Matters concerning transaction with the parent company, etc.
a.

Matters considered to ensure the Company’s interests are not harmed in thesetransactions
Regarding the deposits for investment transactions with the parent company
presented under “Notes Regarding Transactions with Related Parties” in the Notes to
Non-Consolidated Financial Statements, for surplus funds arising in the timely
preparation and updating of financing plans, the Company compared thesetransactions with relatively safe financial instruments, and conducted thesetransactions if it was determined that the transactions would be able to ensure higher
investment benefits and liquidity.

b.

Judgment of the Board of Directors regarding whether or not these transactions would
harm the interests of the Company and the reasons therefor
The Company makes decisions on whether to conduct these transactions after
multifaceted deliberations in the Board of Directors, while also obtaining appropriate
opinions about the Company’s management from the Independent Outside Directors,
based on the perspective of securing the Company’s independence from the parent
company. Business operations are executed based on the Company’s own decisions,centered on the Board of Directors, and appropriate management and businessactivities are conducted while ensuring the independence of management, respecting
our mutual positions as listed companies.

c.

Opinions of the Outside Directors if such opinions differed from the determination of
the Board of Directors
Not applicable.

(iii) Status of significant subsidiaries
Business division
Retailbusiness

Retailsupportbusiness

Company nameDrugstore businessWelpark Co., Ltd.

Wholesale offoods/Manufacture ofprepared foods

SUN FOOD JAPANCO., LTD.

Facilities management

SAVIA Corporation- 56 -

Ownership ofCapitalthe Company Description of main businesses(million yen)(%)
Sales of pharmaceuticals,
950
84.2
cosmetics, daily necessities,
and food products
Purchase and sales of daily
foods and processed marine
100
100.0
products, manufacturing of
prepared foods
Planning, design,
maintenance, repair,
300
100.0
security, and cleaning ofstoresSpecial subsidiary(Employment of people
with disabilities)

Inageya Wing Co., Ltd.

10

100.0

Subcontracting of store
support operation

Agricultural
management

INAGEYA DREAM
FARM CO. LTD.

95

100.0

Cultivation and productionof agricultural products

Note: The consolidated subsidiaries of the Company are those five companies in the above table.

(8)

Principal Business Locations (as of March 31, 2024)
Company nameCategory

Name, location, etc. of principle businesses

Head office6-1-1 Sakae-cho, Tachikawa City, Tokyo
Tachikawa Fruit and Vegetables and Perishables
Center (Tachikawa City, Tokyo)

Logistics center

Musashimurayama Center (Musashimurayama
City, Tokyo)
Tokyo(70 stores)

The Company Inageya Co., Ltd.

Saitama
Retail stores(130 stores)(29 stores)
Kanagawa(25 stores)
Chiba(6 stores)

Subsidiaries

Welpark Co., Ltd.

Head office

Chofu Sengawa Store, Hanakoganei Ekimae
Store, Nerima Kamishakujii Minami Store
Oizumi-Gakuen Store, Matsubushi Store,
Tokorozawa Sayamagaoka Store
Atsugi Sanda Store, Yokohama HoshikawaekiMae Store, Kawasaki Kyomachi Store
Kimitsu Store, Noda Mizuki Store, Otaki Store
6-1-1 Sakae-cho, Tachikawa City, Tokyo

Retail stores(140 stores)

Ikegami Store, Nishitachikawa Store,
Musashimurayama StoreSUN FOOD JAPANCO., LTD.

Head office

1st floor, Tachihi 204, 935-27 Izumi-cho,Tachikawa City, Tokyo

SAVIA Corporation

Head office6-1-1 Sakae-cho, Tachikawa City, Tokyo

Inageya Wing Co., Ltd.

Head office6-1-1 Sakae-cho, Tachikawa City, Tokyo

INAGEYA DREAM
FARM CO. LTD.

Head office6-1-1 Sakae-cho, Tachikawa City, Tokyo- 57 -

(9)Employees (as of March 31, 2024)
Category

Number of employees

Change from end of
previous fiscal year

Average age

The Group

2,623 (6,273)

Down 54 (Down 25)―

The Company

2,002 (5,359)

Down 64 (Down 26)

46.5 years old

Average length ofservice―21.6 years

Notes:
1. Numbers in parenthesis ( ) show the annual average number of part-time and casual workers (converted
to 8 hours per day)
2. Temporary employees are not included in part-time and casual workers.
3. Number of employees excludes employees who have been temporarily assigned to outside the Group
from the Group and includes employees who have been temporarily assigned to the Group from outside
the Group.

(10) Major lenders (as of March 31, 2024)
Outstanding borrowings(Millions of yen)
Resona Bank, Limited
2,328
MUFG Bank, Ltd.
1,500
Aioi Nissay Dowa Insurance Co., Ltd.
465
Sumitomo Mitsui Banking Corporation
464
Mizuho Bank, Ltd.
464
Nippon Life Insurance Company
440
Sumitomo Mitsui Trust Bank, Limited
101
The Norinchukin Bank
81
Meiji Yasuda Life Insurance Company
70
Development Bank of Japan Inc.
60
Note: The outstanding borrowings of Resona Bank, Ltd., MUFG Bank, Ltd., and Mizuho Bank, Ltd.
include the unredeemed amount of bonds (private placement bonds) totaling 2,212 million yen).
Lenders- 58 -

(11) Other significant matters concerning the current status of the corporate group
The Company and United Super Markets Holdings Inc. (hereinafter “U.S.M.H”) have decided to
implement a share exchange (hereinafter the “Share Exchange”) in which U.S.M.H will become thewholly-owning parent company in the share exchange and the Company the wholly-owned
subsidiary in the share exchange, based on resolutions of the Boards of Directors of both companies
on April 18, 2024. On the same date, a share exchange agreement (hereinafter the “Share Exchange
Agreement”) was concluded between the two companies, and a business integration agreement(hereinafter the “Business Integration Agreement”) regarding the business integration of theCompany by U.S.M.H was concluded between U.S.M.H, The Maruetsu, Inc. (hereinafter“Maruetsu”), KASUMI CO., LTD. (hereinafter “KASUMI”), MAXVALU KANTO CO., LTD.
(hereinafter “MV KANTO”; hereinafter U.S.M.H, Maruetsu, KASUMI, and MV KANTO arecollectively referred to as “U.S.M.H Group Companies”), the Company and AEON CO., LTD.
(hereinafter “AEON”).
The Share Exchange is scheduled to take effect on November 30, 2024, after obtaining approvalof the Share Exchange Agreement by resolution at U.S.M.H’s annual general meeting of shareholders
scheduled to be held on May 24, 2024 and the Company’s annual general meeting of shareholders
scheduled to be held on June 26, 2024. Prior to the effective date of the Share Exchange, theCompany’s common shares (hereinafter the “Company Shares") will be delisted from the Prime
Market of the Tokyo Stock Exchange (the last trading date will be November 27, 2024).
As a result of execution of the Share Exchange, the Company will become a wholly owned
subsidiary of U.S.M.H.
Purpose of becoming a wholly-owned company through the Share Exchange
The Company, AEON, and U.S.M.H have come to the conclusion that, in order to continue to respondto customers’ needs with a sense of speed, and to coexist with local communities and grow together
in the Tokyo metropolitan area, where competition is expected to intensify further in the future, it ismost appropriate to further deepen the relationship through strengthening capital relationships andmanagement integration. This will allow the Company, AEON and U.S.M.H to make the most of the
AEON Group’s various assets such as digital, products, human resources, and payment infrastructure.
The goal being to evolve into a new business model that utilizes economies of scale as a combinedone (1) trillion yen supermarket group. Based on this conclusion, on April 25, 2023, the Company,
AEON, and U.S.M.H concluded a Memorandum of Understanding Regarding the Business
Integration for Realization of a JPY1 trillion Supermarket in Kanto. The Company and U.S.M.H will
set aside sufficient time for discussions following the execution of the memorandum of
understanding with a view to determining how to maximize synergies by around November 2024.
The Company and AEON, which have already formed an alliance, will further strengthen their capitaland business alliance relationship. The Company and AEON determined that they can promptly
realize synergies by utilizing various assets of the AEON Group. AEON conducted a tender offer tothe Company (the “Tender Offer”) dated October 6, 2023, and now holds 51.0% of shares of Inageya,- 59 -

as announced in the “Notice of Results of Tender Offer for Shares of Inageya Co., Ltd. and Changeof Subsidiary” dated November 30, 2023.
The preparatory committee for integration, which was jointly established on June 19, 2023, by theCompany and U.S.M.H Group Companies, discussed and reviewed the realization and effect of thesynergies envisaged following the execution of the memorandum of understanding. As a result of
discussions, it has been determined that, in addition to contributing to the enhancement of corporate
value, in an increasingly competitive environment, strengthening the dominance of the Company and
U.S.M.H in the Tokyo metropolitan area, where stable demand is expected to continue, will lead tothe creation of various economies of scale.
In response to a proposal from U.S.M.H, the Company commenced consideration of whether toproceed with the transactions that would make Inageya a wholly owned subsidiary of U.S.M.H,
including the Share Exchange (the “Transactions”). After thorough consideration of the potential
disadvantages associated with the delisting of the Company, such as its corporate creditworthinessand the impact on current shareholders, the Company concluded that it would benefit from becoming
a wholly owned subsidiary of U.S.M.H. This is because the Company considered that it will be able
to maintain its corporate creditworthiness as a major group company of U.S.M.H even following theShare Exchange, and that it is possible to provide the shareholders of the Company with the value
and benefits that can be generated by the Share Exchange through the delivery of shares of U.S.M.H
as consideration for the Share Exchange. The Company considered that the Share Exchange will bebeneficial not only for U.S.M.H but also for the shareholders of the Company. AEON agreed withthe plans of the Company and U.S.M.H and approved the Share Exchange. Further, as described in“Notice Regarding 100% Acquisition of Welpark Co., Ltd. by WELCIA HOLDINGS CO., LTD.,
Changes in Subsidiary at Inageya Co., Ltd. (share transfer) and receipt of special dividend from such
Subsidiary, as well as Recognition of Extraordinary Income” dated April 18, 2024, the Company hasreached an agreement with WELCIA HOLDINGS CO., LTD. (“Welcia HD”), a subsidiary of AEON,to transfer the shares of Welpark Co., Ltd. (“Welpark”), which is a subsidiary of the Company andoperates a drug store business, to Welcia HD prior to the execution of the Transactions. The
consideration of the Share Exchange by the Company and U.S.M.H is subject to the transfer of theshares of Welpark to Welcia HD.
As a result of the above, the Company decided to implement the Share Exchange by resolution of
the Board of Directors on April 18, 2024.
For details, please refer to the Notes to Consolidated Financial Statements (Notes Regarding
Significant Subsequent Events).

- 60 -

2. Status of Shares (as of March 31, 2024)(1) Total number of shares authorized to be issued

200,000,000 shares(2) Total number of shares outstanding

52,381,447 shares(including 5,947,152 treasury shares)(3) Number of shareholders

8,702 persons(4) 10 Major shareholders
Number of shares
held (Thousand
shares)23,586

Name
AEON CO., LTD.

Ratio ofshareholding (%)
50.80

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

1,972

4.25

Wakagikai Shareholders Association

1,216

2.62

Custody Bank of Japan, Ltd. (trust account)

887

1.91

Resona Bank, Limited

791

1.71

679

1.46

436

0.94

419

0.90

379

0.82

365

0.79

NIPPON ACCESS,INC.
Mitsubishi Shokuhin Co., Ltd.
KOKUBU GROUP CORP.
Inageya Employee Shareholders Association
Nippon Life Insurance Company

Notes:
1. The Company holds 5,947,000 shares of treasury shares, which are not included in the above list of major
shareholders.
2. Ratio of shareholding is calculated after deducting the number of treasury shares (5,947,000 shares).
3. 84,000 shares of the Company held as trust assets in the stock benefit trust for officers and the stock benefit
trust for employees are not included in the number of treasury shares stated above.

- 61 -

3. Company Officers(1)

Directors and Corporate Auditors (as of March 31, 2024)

(1)

Name
Yoshikazu Motosugi
Kazushige Hamura

Kazuhiko Shimamoto

Makoto Sugaya

Masato Moriya

Shigeru Nakabayashi
Hiroyuki Watanabe
Shuichi Otani

Yaeko Ishida
Masakazu Yamamoto
Kenichiro Takayanagi

Positions and Responsibilities

Important concurrent positions

Representative Director andPresident
Senior Managing Director
Responsible for Complianceand Administration
Managing Director
Responsible for GroupManagement Strategy, Sales
Strategy, and IR
Director
Responsible for StoreOperations; General Manager ofSales Division
Director
Responsible for Merchandiseand Logistics; General Manager
of Perishable Foods andPrepared Meals Strategy
Division
Director
Responsible for Information
Systems
Director

Executive Vice President, AEON CO., LTD.
Director, AEON Financial Service Co., Ltd.
Director, AEON DELIGHT CO., LTD.

Outside Director
Outside Director
Full-time Outside Audit &Supervisory Board Member
Full-time Audit & Supervisory
Board Member

Masami Shinozaki

Outside Audit & Supervisory
Board Member

Koji Makino

Outside Audit & Supervisory
Board Member

Partner of Midorikawa-Kitadai Law OfficeOutside Audit & Supervisory Board Member of
Citizen Watch Co., Ltd.
Outside Director of Shindengen Electric
Manufacturing Co., Ltd.

Representative of Shinozaki & Partners
Outside Audit & Supervisory Board Member of
MarkLines Co., Ltd.
Outside Audit & Supervisory Board Member ofMaezawa Kasei Industries Co., Ltd.
Representative Director, BE1 & Co.
Outside Director, Audit and Supervisory
Committee Member of Digital
Garage, Inc.
Outside Director of Obara Group Inc.

(2)

Notes:
1. At the conclusion of the 75th Annual General Meeting of Shareholders held on June 22, 2023, Directors Mr.
Shintaro Kakui, Mr. Mikio Uehara, and Mr. Yoshitomo Suzuki retired from their positions due to the
expiration of their terms of office.
2. At the 75th Annual General Meeting of Shareholders held on June 22, 2023, Mr. Kazuhiko Shimamoto, Mr.
Masato Moriya, Mr. Shigeru Nakabayashi, and Mr. Hiroyuki Watanabe were newly elected as Directors andassumed office.
3. Outside Director Shinya Watanabe passed away on September 13, 2023 and retired from his position on thesame day.
4. Outside Directors Mr. Shuichi Otani and Ms. Yaeko Ishida have been notified to the Tokyo Stock Exchange
as independent officers with no risk of conflicts of interest with general shareholders.
5. Full-time Outside Audit & Supervisory Board Member Mr. Masakazu Yamamoto and Outside Audit &Supervisory Board Members Mr. Masami Shinozaki and Mr. Koji Makino have been notified to the Tokyo
Stock Exchange as independent officers with no risk of conflicts of interest with general shareholders.

- 62 -

6. Full-time Outside Audit & Supervisory Board Member Mr. Masakazu Yamamoto and Outside Audit &Supervisory Board Members Mr. Masami Shinozaki and Mr. Koji Makino have considerable knowledge offinance and accounting as follows.
 Mr. Masakazu Yamamoto has many years of experience engaging in financial operations at financial
institutions and operating companies.
 Mr. Masami Shinozaki is a certified public tax accountant.
 Mr. Koji Makino is a certified public accountant and a certified public tax accountant.
7. Mr. Wataru Higuchi was elected as a substitute Outside Audit & Supervisory Board Member at the 72nd
Annual General Meeting of Shareholders held on June 25, 2020, in anticipation of the event where thenumber of Audit & Supervisory Board Members falls short of the statutory number.
8. Changes in positions and responsibilities of directors during the fiscal year under review are as follows.
Name

Now

BeforeDate of changeManaging Director

Kazushige Hamura

In charge of Compliance; Human
Senior Managing Director
Responsible for Compliance Resources; General Affairs;
Finance; Store Development;
and Administration

June 22, 2023

Information Systems

Managing Director
Responsible
for
Group
Kazuhiko Shimamoto
Management Strategy, Sales
Strategy, and IR
Director
Responsible
for
Store
Makoto Sugaya
Operations; General Manager
of Sales Division
Director
Responsible for Merchandise
andLogistics;
GeneralMasato Moriya
Manager of Perishable Foods
and Prepared Meals Strategy
Division
Director
Shigeru Nakabayashi Responsible for Information
Systems(2)

Representative Director andPresident, Welpark Co., Ltd.

June 22, 2023

Director
In charge of Store Reform;
General Manager of Sales
Division

June 22, 2023

Representative Director
President,
SAVIA Corporation

June 22, 2023

System Advisor,
Systems Division

andInformation

June 22, 2023

Outline of Limited Liability Agreement
The Company has concluded a limited liability agreement with Non-executive Directors, Outside
Directors, and Audit & Supervisory Board Members to limit their liability for damages under
Article 423, Paragraph (1) of the Companies Act, in accordance with Article 427, Paragraph (1)of the same Act.
The maximum amount of liability for damages under the Agreement shall be the minimum
amount of liability stipulated in Article 425, Paragraph (1) of the same Act.

(3)

Outline of Directors and Officers Liability Insurance Agreement
The Company has entered into a directors and officers liability insurance agreement with aninsurance company, as stipulated in Article 430-3, Paragraph (1) of the Companies Act, underwhich Directors, Audit & Supervisory Board Members, Executive Officers, etc. of the Company
and its subsidiaries are the insured, and renews this agreement every year.
Pursuant to this agreement, damage arising from a claim for damages in connection with theperformance of his/her duties that the insured would bear (excluding those that fall under the
grounds for exemption specified in the insurance agreement) shall be indemnified under the
insurance agreement.
Payment of the total amount of the insurance premiums is shared between the Company and- 63 -

its subsidiaries.
(4)

Compensation, etc. of Directors and Audit & Supervisory Board Members for the
fiscal year under review(i) Outline of policy for the determination of compensation, etc. of Officers
The Company has set forth a Policy Concerning the Determination of Compensation, Etc.
of Officers (hereinafter the “Determination Policy”) in the Board of Directors as follows.
For the resolution by the Board of Directors, the Company has submitted the details of
the matters to be resolved to the Nomination and Compensation Committee, the majorityof whose members are independent Outside Directors, and received the Committee’s
response in advance.
In addition, with respect to compensation, etc. for individual Directors for the fiscal
year under review, the Board of Directors has confirmed the details and determination
method of compensation, etc. and that the details of the determined compensation, etc.
are in conformity with the Determination Policy and respect the response from theNomination and Compensation Committee, and has judged that the compensation, etc.
for individual Directors is in line with the Determination Policy.
a.

Basic Policy
I. Compensation shall place emphasis on links with performance and long-term
corporate value, and value will be shared with shareholders, with the aim ofprofit growth and appropriate shareholder returns through sound businessactivities.
II. Compensation shall maintain transparency of management that is able to beaccountable.

b.

Compensation Structure
Directors’ compensation comprises “Basic Compensation,” which is fixedcompensation, and “Short-term Performance-linked Compensation” and “Mediumto Long-term Performance-linked Compensation (Performance-linked Stock
Compensation,” which will vary depending on financial performance. From theperspectives of their role and independence, compensation of Outside Directors andAudit & Supervisory Board Members comprises Basic Compensation only.
I.

Basic Compensation
Taking economic circumstances and societal standards into consideration,
Basic Compensation is paid in cash every month as fixed compensationaccording to roles and responsibilities.

II.

Short-term Performance-linked Compensation
Short-term Performance-linked Compensation is paid to Directors, excluding
Outside Directors, and is calculated by multiplying Basic Compensation by aco-efficient corresponding to the single fiscal year’s financial performance. It
is paid in cash and comprises a portion paid in monthly installments and a- 64 -

portion paid as a lump sum. The monthly installment portion is calculated bymultiplying the Basic Compensation amount, as the basis for calculation, by aco-efficient (0% - 75%) that corresponds to the rate of achievement of theprevious fiscal year’s consolidated operating profit target. Meanwhile, aprerequisite for payment of the lump-sum portion is that consolidated operating
profit, consolidated ordinary profit, and consolidated profit have each exceeded
the actual results for the previous fiscal year. It is calculated by multiplying themonthly amount of Basic Compensation by a co-efficient (25% - 400%)
corresponding to the amount by which consolidated operating profit exceeded
the target amount.
III. Medium- to Long-term Performance-linked Compensation
Directors, excluding Outside Directors, are paid shares and cash in a lump sum
on retirement from their positions due to their beneficiary rights in monetarytrusts (stock benefit trusts) that are not cash trusts. Directors who meet therequirements for retirement, etc. as Director are granted Company shares andcash according to the number of points granted according to their Director’s
position and degree of achievement of performance targets. Share-based
compensation varies within a range of 0% to 200%, according to the degree ofachievement of numerical targets for consolidated net sales in each fiscal year
set on the basis of the Medium-term Management Plan together with theCompany’s subsidiaries from the perspective of “Group management” and, as
an evaluation of sustainability, according to the reduction of the consolidated
inventory loss ratio.
A system has been established whereby, if an eligible Director is involved
in serious misconduct or illegal act, etc., the Company may forfeit (malus
clause) the Director’s beneficiary rights to shares scheduled to be delivered
according to the number of points awarded.
IV. Component percentages of compensation
Although the percentage of total compensation that each compensation
component comprises will change according to the degree of achievement of
performance targets, the compensation structure has been designed so that theratio of Basic Compensation, Short-term Performance-linked Compensation,and Medium- to Long-term Performance-linked Compensation will be around
5:4:1 in the event that the targets are achieved. Compensation for Outside
Directors and Audit & Supervisory Board Members comprises Basic
Compensation only, in light of their roles and independence.
(ii) Resolutions at the general meeting of shareholders regarding the compensation, etc. of
Directors and Audit & Supervisory Board Members- 65 -

The amount of monetary compensation for Directors was resolved to be no more than
350 million yen per year (not including the portion of employee’s salary for Directors
who concurrently serve as employees) at the 43rd Annual General Meeting of
Shareholders held on June 27, 1991. The number of Directors at the close of that Annual
General Meeting of Shareholders was fourteen (14).
In addition, separately from this monetary compensation, a scheme for share-based
compensation was introduced upon resolution at the 70th Annual General Meeting of
Shareholders held on June 21, 2018 and was partially revised at the 73rd Annual General
Meeting of Shareholders held on June 24, 2021. Based on the Stock Award Regulations
set forth in this scheme, share compensation amounts are contributed to a trust with an
upper limit of 198 million yen (including 60 million yen for the Company’s Directors)
over three fiscal years. With respect to this scheme, the upper limit for delivery of sharesfor the relevant three-year period shall be 90,000 points (including 27,000 points for theCompany’s Directors) for each relevant three-year period according to the position anddegree of achievement of performance targets in each year of the relevant period(excluding Outside Directors). The number of Directors of the Company eligible under
this scheme at the conclusion of that Annual General Meeting of Shareholders was five(5).
The amount of monetary compensation for Audit & Supervisory Board Members
was resolved to be no more than 60 million yen per year at the 47th Annual General
Meeting of Shareholders held on June 29, 1995. The number of Audit & Supervisory
Board Members at the close of that Annual General Meeting of Shareholders was four(4).

- 66 -

(iii) Total Amount of Compensation, etc. of Directors and Audit & Supervisory Board Member
Total amount by compensation type(Millions of yen)
Medium- toTotal
Long-term
amountNumber of
Short-term
Category
Performance(Millions ofeligible
Officers
Basic
Performancelinked
yen)Compensation
linkedCompensation
Compensation(StockCompensation)
Directors(excluding Outside
61
48
8
4
9
Directors)
Audit &
Supervisory Board
Members(excluding Outside
15
15
1
Audit &
Supervisory Board
Members
Outside Directors
14144Outside Audit &25
25
3Supervisory Board
MemberNotes:
1. The amount of 35 million yen in the employee’s salary portion of Directors who concurrently serve as employees
is not included.
2. The number of officers on the last day of the fiscal year under review was nine (9) Directors (including four (2)Outside Directors) and four (4) Audit & Supervisory Board Members (including 3 Outside Audit & Supervisory
Board Members).
3. The conditions, etc. for calculation of Short-term Performance-linked Compensation are as described in “(i) Outlineof policy for the determination of compensation, etc. of Officers.” The performance indicator that provides the basis
for calculation of the installment portion is the rate of achievement of the target for consolidated operating profit in
the previous fiscal year. As the actual result was 52.8%, the Company paid 8 million yen in Short-term Performancelinked Compensation. As the prerequisite conditions for the lump-sum portion were not met, no payments weremade for this portion.
4. The details and conditions, etc. for calculation of Medium- to Long-term Performance-linked Compensation (Stock
Compensation) are as described in “(i) Outline of policy for the determination of compensation, etc. of Officers.”
This compensation comprises a portion pertaining to the degree of achievement in each fiscal year of the numericaltarget for consolidated net sales based on the Medium-term Management Plan, in accordance with the performanceindicators that provide the basis for calculation, and a portion pertaining to the reduction of consolidated inventory
loss, as an evaluation of sustainability. Regarding the portion pertaining to the degree of achievement in each fiscal
year of the numerical target for consolidated net sales, as the actual result was 103.3%, the Company posted
provision for share awards of 4 million yen. Regarding the portion pertaining to the reduction of consolidated
inventory loss, no amount was recorded for this portion as the results did not meet the requirements.

- 67 -

(5)Outside Officers(i) Relationships with the other corporations, etc. at which Outside Officers hold significant
concurrent positions.
There are no special relationships between the other corporations, etc. at which Outside
Officers hold concurrent positions and the Company.

(ii) Main activities of the Outside Officers
Category
Name
Attendance and Comments
Mr. Otani attended all 25 meetings of the Boardof Directors held in the fiscal year under review
Director
Shuichi Otani
and made comments based on his abundant
experience and high degree of insight as acorporate manager.

Director

Full-time Audit &Supervisory Board
MemberYaeko Ishida

Ms. Ishida attended all 25 meetings of the Boardof Directors held in the fiscal year under review
and made comments based on her expert
knowledge and high degree of insight as an
attorney.

Masakazu Yamamoto

Mr. Yamamoto attended all 25 meetings of theBoard of Directors and all 20 meetings of the
Audit & Supervisory Board held in the fiscal year
under review and made comments from an
objective standpoint based on his abundant
experience and high degree of insight, mainly
from his involvement in finance-related
operations.

Audit & Supervisory
Masami Shinozaki
Board Member

Mr. Shinozaki attended 21 of the 25 meetings ofthe Board of Directors and all 20 meetings of the
Audit & Supervisory Board held in the fiscal year
under review and made comments from an
objective standpoint based on his expert
knowledge and high degree of insight as an
attorney and certified public tax accountant.

Audit & Supervisory
Koji Makino
Board Member

Mr. Makino attended 24 of the 25 meetings of theBoard of Directors and all 20 meetings of the
Audit & Supervisory Board held in the fiscal year
under review and made comments from an
objective standpoint based on his expert
knowledge and high degree of insight as acertified public accountant and certified public
tax accountant.

(iii) Outline of duties executed by the Outside Directors relating to their expected roles
Outline of duties executed by the Outside
Category
Name
Directors relating to their expected roles
Director

Shuichi Otani

As described in (ii) above, Mr. Otani contributed
to the improvement of the effectiveness of theCompany’s Board of Directors by actively
commenting in Board of Directors meetings.

- 68 -

CategoryDirector

Outline of duties executed by the Outside
Directors relating to their expected roles

Name

Yaeko Ishida

As described in (ii) above, Ms. Ishida contributed
to the improvement of the effectiveness of theCompany’s Board of Directors by actively
commenting in Board of Directors meetings.

- 69 -

Consolidated Financial Statements(April 1, 2023 - March 31, 2024)

Consolidated Balance Sheet(As of March 31, 2024)
Description(Assets)
Current assets
Cash and deposits
Accounts receivable-trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deposits paid to subsidiaries andassociates
Other
Non-current assets
Property, plant and equipment
Buildings and structures
Land
Leased assets
Construction in progress
Other
Intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Retirement benefit asset
Guarantee deposits
Other
Allowance for doubtful accounts
Deferred assets
Bond issuance costs

Total assets

Amount44,119
6,482
9,518
8,600
9,990
7
177

Description(Liabilities)
Current liabilities
Accounts payable-trade
Electronically recorded obligations operating
Current portion of bonds payable
Current portion of long-termborrowings
Lease liabilities
Income taxes payable

5,000(In millions of yen)Amount34,49019,332
233
523
1,548
450
802

Accrued consumption taxes

409

Provision for bonuses
Provision for bonuses for directors
58,152(and other officers)
Provision for point card certificates
33,41012,266
Contract liabilities
16,455
Asset retirement obligations
1,160
Other
263 Non-current liabilities
3,264
Bonds payable
Long-term borrowings
1,871
Lease liabilities
22,87010,273
Deferred tax liabilities
10
Provision for share awards
Provision for share awards for directors
945(and other officers)
1,747
Retirement benefit liability
9,378
Asset retirement obligations
532
Other
Total liabilities
ሺ16)
48 (Net Assets)

2,114

4,344

48

102,320

Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive
incomeValuation difference on available-forsale securities
Remeasurements of defined benefit
plans
Non-controlling interests
Total net assets
Total liabilities and net assets- 70 -

18
96
2,524
154
6,280
11,814
1,689
2,214
1,077
1,274
19
39
656
3,793
1,049
46,30449,066
8,981
13,59832,750
ሺ6,263)
5,697
5,076
620
1,251
56,016102,320

Consolidated Statement of Income(April 1, 2023 - March 31, 2024)(In millions of yen)
Description

Amount[Operating revenue]［261,486］

Net sales

250,594

Cost of sales

180,844

Gross profit

69,749Operating revenue

10,892

Operating gross profit

80,642

Selling, general and administrative expenses

77,710Operating profit

2,931

Non-operating income
Interest income

26

Dividend income

184

Subsidy income

37

Commission income

107

Gain on receipt of donated non-current assets

7

Other

54

417

Non-operating expenses
Interest expenses

55

Amortization of bond issuance costs

11

Commission expenses

365

Provision of allowance for doubtful accounts

16

Other

7

Ordinary profit

456
2,892

Extraordinary income
Gain on sale of investment securities

440

Compensation income

117

558

Extraordinary losses
Loss on disposal of non-current assets

25

Impairment losses

722

Other

39

Profit before income taxes

787
2,663

Income taxes - current

694

Income taxes - deferred

1,423

2,118

Profit544

Profit attributable to non-controlling interests

47

Profit attributable to owners of parent

497- 71 -

Non-Consolidated Financial Statements(April 1, 2023 - March 31, 2024)

Non-Consolidated Balance Sheet(As of March 31, 2024)(In millions of yen)
Description(Assets)
Current assets
Cash and deposits

Amount34,458
5,626

Accounts receivable-trade

7,533

Securities

8,600

Merchandise and finished goods

4,219

Raw materials and supplies
Prepaid expenses
Short-term loans receivable
Short-term loans receivable fromsubsidiaries and associates
Deposits paid to subsidiaries andassociates
Accounts receivable-other
Current portion of guarantee
deposits
Other
Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings
Structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land
Leased assets
Construction in progress
Intangible assets
Leasehold interests in land
Software
Other
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Long-term loans receivable

146
1,183
2
109

Description(Liabilities)
Current liabilities
Accounts payable-trade
Electronically recorded
obligations-operating
Short-term borrowings fromsubsidiaries and associates
Current portion of bonds
payableCurrent portion of long-termborrowings
Lease liabilities
Accounts payable-otherAccrued expenses

Amount32,168
11,883
233
7,223
523
1,508
400
3,621
1,456

5,000

Income taxes payable

605

1,884

Accrued consumption taxes

361

Deposits received

558

215
33
(96)
50,61228,476
10,365
496
362
2,530
13,521
1,066
133
1,662
18
1,419
224
20,473
10,272946
10- 72 -

Provision for bonuses
Provision for executive
bonuses
Provision for point cardcertificatesContract liabilities
Asset retirement obligations
Non-current liabilities
Bonds payable
Long-term borrowings
Lease liabilities
Provision for share awards
Provision for share awards for
directors (and other officers)
Provision for retirement
benefits
Asset retirement obligations
Long-term guarantee deposits

1,797
13
73
1,795
112
9,494
1,689
2,134
864
17
23
652
3,089
1,023

Total liabilities(Net assets)

41,663

Shareholders’ equity
Share capital
Capital surplus

38,3798,981
13,598Prepaid pension costs
Deferred tax assets
Guarantee deposits
Other

752
209
7,926
354

Deferred assets

48

Bond issuance costs

48

Total assets

85,119- 73 -

Legal capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for tax purpose
reduction entry of noncurrent assets
General reserve
Retained earnings brought
forwardTreasury shares
Valuation and translation
adjustments
Valuation difference on
available-for-sale securities
Total net assets

13,59822,062
1,544
20,518

Total liabilities and net assets

85,119366
17,3002,852(6,263)
5,076
5,076
43,455

Non-Consolidated Statement of Income(April 1, 2023 - March 31, 2024)(In millions of yen)
Description

Amount[Operating revenue]［214,607］

Net sales

203,928

Cost of sales

147,805

Gross profit

56,122

Operating revenue

10,679Operating gross profit

66,802

Selling, general and administrative expenses

64,764

Operating profit

2,037

Non-operating income
Interest income

11Interest on securities

9

Dividend income

368

Commission income

91

Other

55

536

Non-operating expenses
Interest expenses

55

Amortization of bond issuance costs

11

Commission expenses

365

Other

7

Ordinary profit

439
2,133

Extraordinary income
Gain on sale of investment securities

440

Compensation income

117

558

Extraordinary losses
Loss on disposal of non-current assets

41

Impairment losses

595

Other

43

Profit before income taxes

680
2,011

Income taxes - current

397

Income taxes - deferred

197

Profit595
1,416- 74 -

Matters Regarding Accounting Auditors(1)

Accounting Auditor’s NameGYOSEI & CO.

(2)

Accounting Auditor’s Compensation, etc.
(In millions of yen)Amount of compensation

Category
Amount of compensation, etc. to be paid by the Company for the fiscal
49
year under review:
Total amount of money or other economic benefits to be paid by the62Company and the Company’s subsidiaries:
Notes:
1. In the audit agreement concluded between the Company and the Accounting Auditor, no distinction ismade between audit compensation for audits based on the Companies Act and audits based on the Financial
Instruments and Exchange Act, and such distinction cannot be substantively made. For this reason, theabove amount of compensation, etc. to be paid by the Company for the fiscal year under review represents
the total amount of compensation, etc., for audits based on the two Acts.
2. As a result of deliberation of the number of scheduled audit hours, the appropriateness of the compensation
amount, and other matters contained in the audit plan for the fiscal year under review after comparison of
the audit plan and audit results for the previous fiscal year and confirmation of trends in audit hours andcompensation amounts based on the Practical Guidelines for Cooperation with Accounting Auditors
published by Japan Audit & Supervisory Board Members Association, the Audit & Supervisory Board has
given its consent to the Accounting Auditor’s compensation, etc.
3. Accounting Auditor’s compensation, etc. includes 0 million yen in compensation for audits of the nonconsolidated financial statements related to the corrected report based on the Financial Instruments andExchange Act.

(3)

Policy for determination of dismissal or non-reappointment of Accounting Auditor
If the Accounting Auditor is deemed to fall under any of the items of Article 340, Paragraph (1) of theCompanies Act, the Accounting Auditor shall be dismissed by the Audit & Supervisory Board with theunanimous consent of all Audit & Supervisory Board Members.
In addition, the Audit and Supervisory Board comprehensively evaluates the Accounting Auditor
based on its competence, expertise, independence from the Company, and other criteria, and if it is foundnecessary to change the Accounting Auditor, the Audit and Supervisory Board shall decide the contents
of a proposal concerning the dismissal or non-reappointment of the Accounting Auditor, and the Boardof Directors shall submit the proposal to the General Meeting of Shareholders based on that decision.

Matters Regarding Establishment of Systems to Ensure the Properness of Operations(1)

Systems for Ensuring the Properness of Business Operations
The basic policy regarding systems to ensure the properness of operations (internal control system)
resolved by the Board of Directors of the Company is as follows:(i) Systems to ensure that the execution of duties by Directors and employees (hereinafter “Officers
and Employees”) of the Company complies with laws, regulations, and the Articles of Incorporation(a) We have established the "Inageya Group Philosophy" to describe the laws, regulations andsocial norms, etc. that Officers and Employees must comply with (hereinafter “compliance”)
regarding our management stance and response to customers that the Company and the Group
aim to achieve. To ensure that the Inageya Group Philosophy is thoroughly implemented, we
will establish the Inageya Group Compliance Committee to supervise compliance activities
across the Group. The Committee will conduct its activities in a planned manner and report thesituation to the Board of Directors and the Audit & Supervisory Board as necessary.
(b) We will establish helplines both within and outside of the Company as contact points for
consultation and whistleblowing regarding compliance for Officers and Employees of theCompany and individual Group companies. We will establish a system in which, if any- 75 -

compliance-related problems arise, details of and countermeasures against such problems will
be immediately reported to the Board of Directors and the Audit and Supervisory Board
through the Inageya Group Compliance Committee.
(c) Audit & Supervisory Board Members will audit the execution of duties by Directors from an
independent standpoint. As the department responsible for internal audits, we will establish an
audit office that will conduct auditing of the day-to-day operations of each department.
(d) We will have no involvement whatsoever with anti-social forces or groups that threaten social
order and security, and we will cooperate with attorneys, the police, and others in dealing withunreasonable demands in a resolute manner.
(ii) Systems regarding the retention and management of information pertaining to the execution of theduties of Directors of the Company(a) We will establish a system in which information pertaining to matters resolved at and reported
to the Board of Directors, Management Meetings, and other meetings is recorded, retained, andmanaged in accordance with laws, regulations, and internal regulations and made available forinspection by Directors and Audit & Supervisory Board Members as necessary.
(b) We will retain and manage documents and electronic data in accordance with regulations suchas the Confidential Information Management Rules and Basic Rules for the Protection of
Personal Information and various manuals, and we will revise these regulations as necessary.
(iii) Rules and other systems related to management of the risk of loss of the Company(a) In accordance with the Risk Management Committee Regulations, we will identify, analyze,
and evaluate risks of the Company and its subsidiaries and build effective risk management
systems.
(b) We will establish a system in which, if the risk of loss is found by internal audit, this fact will
immediately be reported to the general administration division and responsible department(s).
(iv) Systems to ensure that the execution of the duties of Directors of the Company is performed
efficiently(a) The Board of Directors will set forth company-wide management goals to be shared by Officers
and Employees. Executive Directors will then determine specific and individual targets toachieve such goals and regularly assess whether the execution of these targets is progressing
as initially planned and revise them through situation reports.
We will establish a Nomination and Compensation Committee whose membership will include
independent Outside Directors as a voluntary advisory body to the Board of Directors tostrengthen its supervisory functions by ensuring objectivity and transparency of procedures
regarding nomination and compensation.
(b) The Management Meeting, which will be held twice a month in principle, will make swift
decisions on important matters other than matters for resolution by the Board of Directors andwill share information after receiving reports from its members regarding the execution ofduties.
(v) Systems to ensure the properness of business operations in a group of enterprises comprised of theCompany and its subsidiaries(a) We will establish a system to monitor the business operations of its subsidiaries, such as
establishing Company approval and reporting procedures regarding important matters ofsubsidiaries and a system for regular reporting to the Company.
(b) We will establish a system in which the status of subsidiaries’ business operations and theexecution of duties by their Directors, etc. will be reported at the Group Presidents Meeting.
(c) The Group will identify, analyze, and evaluate risks in accordance with the Risk Management
Committee Regulations.
(d) We will establish a department responsible for the administration of subsidiaries and strive toimprove the soundness and efficiency of management across the Group through deliberationof and information exchanges on important matters by the responsible department with therelevant subsidiaries.

- 76 -

(e) We will establish a system that will enable the Company to monitor the properness of
subsidiaries’ business operations, while respecting the autonomy of subsidiaries, by means
such as Officers and Employees of the Company assuming Director or Audit & Supervisory
Board Member posts at the subsidiaries and receiving reports from subsidiaries on a regularbasis.
(f) We will appoint members of the Inageya Group Compliance Committee from the subsidiaries
as well and promote Group compliance activities together with the subsidiaries.
(vi) Matters related to such employees if the Company’s Audit & Supervisory Board Members requestthat an employee be appointed to assist with the Audit & Supervisory Board Members duties,
matters related to such employees’ independence from Directors; and matters related to ensuring
the effectiveness of instructions to such employees(a) Audit & Supervisory Board Members may direct the staff of the audit office to assist withauditing work as assistants to the Audit & Supervisory Board Members. Staff members who
receive such directions will not receive directions or supervision from Directors or the head of
the audit office in relation to such directions given by the Audit & Supervisory Board Members.
(b) The prior consent of the Audit & Supervisory Board is required for transfers and disciplinary
action of the staff of the audit office.
(vii) Systems for Officers and Employees of the Company to report to the Audit & Supervisory Board
Members and systems for those who have received reports from Officers and Employees ofsubsidiaries and Audit & Supervisory Board Members of such subsidiaries or any of these persons
to report to the Audit & Supervisory Board Members of the Company
Any person who receives a report from Officers and Employees of the Company and its subsidiaries
and Audit & Supervisory Board Members of subsidiaries or any of these persons will promptly
report to an Audit & Supervisory Board Member of the Company if he or she finds any facts, etc.
such as matters that may violate laws and regulations or others, whistleblowing, and other facts that
may cause significant damage to the Company and the Group. The Audit & Supervisory Board
Members of the Company may seek explanations directly from the person who made the report asnecessary.
(viii) Systems to ensure that persons who have made reports as set forth in the preceding item will not betreated unfavorably on the grounds of having made such reports
In the Internal Reporting Regulations, the Company prohibits the unfair treatment of any person on
the grounds of having made such reports, as well as any search for such whistleblower. It is also
strictly prohibited to treat any person who has made an internal report to an Audit & Supervisory
Board Member unfavorably on the grounds of having made such reports.
(ix) Matters related to policies for the procedures for advance payment or reimbursement of expenses
incurred in the execution of duties by Audit & Supervisory Board Members of the Company andfor the treatment of other expenses or obligations incurred in the execution of duties
When Audit & Supervisory Board Members request advance payments or reimbursement, etc. for
expenses necessary for the execution of his/her duties, the Company will promptly address said
expenses or obligations.
(x) Other systems to ensure effective execution of audits by Audit & Supervisory Board Members of
the Company(a) We will hold regular meetings to exchange opinions with the Audit and Supervisory Board,
Accounting Auditor, and the Representative Director.
(b) The Board of Directors and individual Directors will fully respect the opinions of each Audit& Supervisory Board Member with regard to ensuring the effectiveness of audits.
(c) Audit & Supervisory Board Members may attend important meetings and committees,
including the Board of Directors meetings and Management Meetings in order to understandthe status of important decision-making and business execution.
(xi) Systems to ensure the credibility of financial reporting
To ensure the credibility of financial reporting of the Group, including subsidiaries, the Company- 77 -

will build and maintain sufficient systems throughout the Group and operate internal control systems
in accordance with the Financial Instruments and Exchange Act and other relevant laws andregulations and the Inageya Group Philosophy. In addition, we will appoint an internal control
promotion officer under the direction of the President and Representative Director, who is the
responsible officer for internal control, and we will regularly verify and evaluate whether the internal
control system is functioning properly and how effective it is and make correction as necessary.

(2)

Status of operation of systems for ensuring the properness of business operations
Pursuant to the basic policy described above, the Company will strive for maintenance and appropriate
operation of internal control system. Major initiatives conducted in the fiscal year under review are as
follows:(i) Status of initiatives for compliance and risk management
We held six meetings of the Inageya Group Compliance Committee, which supervises complianceactivities across the Group to check the initiatives taken by individual Group companies and share
information. The Company is engaged in various initiatives such as implementation of grade-based
training and the strengthening of store inspections by Compliance Committee members, in ourefforts to verify measures to prevent the recurrence of incident and check the implementation statusof such measures, as well as to encourage deeper understanding and penetration of compliance on
the frontlines. We also conducted a compliance awareness survey of all employees of the Group toclarify workplaces’ current issues. By sharing priorities for the recognition and solution of issues
and linking them to the next compliance activity measures, we are striving for early detection andremedy of issues.
In terms of initiatives for risk management, we held four meetings of the Risk Management
Committee to work on the identification, analysis, and evaluation of risks across the Group. We arealso striving to identify problems related to risk events that have occurred and to strengthen andimprove management systems, such as implementing risk management measures for the preventionof recurrences.
(ii) Status of initiatives for ensuring the properness and efficiency of the execution of duties
The Board of Directors met 25 times during the fiscal year under review. At these meetings, inaddition to deliberation of individual proposals and the supervision of the status of execution ofduties, etc., we confirmed the status of the establishment and implementation of the internal control
system for each business year. Further, we set up a Nomination and Compensation Committee as avoluntary advisory body for the Board of Directors. This Committee’s membership comprises one
internal Director and two Outside Directors and is run with an Outside Director elected and serving
as chair. It exchanges opinions on the nomination of Directors and on the structure of compensationand deliberates and provides responses to matters that have been submitted to it by the Board of
Directors. In addition, the Outside Directors and Audit & Supervisory Board Members exchange
information about important issues when necessary and appropriate.
(iii) Status of initiatives for ensuring the properness of business operations in the GroupThe Group regularly holds meetings of the Group Presidents Meeting, whose members are thePresidents of the Company and its subsidiaries. These meetings were held six times in the fiscal
year under review, in which the members received reports and shared information on matters suchas financial performance, the state of progress of management plans and policies, and the status ofexecution of operations.
(iv) Status of initiatives for ensuring that the system for reporting to Audit & Supervisory Board
Members and audits by the Audit & Supervisory Board Members are conducted effectively
The Audit & Supervisory Board met 20 times during the fiscal year under review, at which
discussions were held on important matters concerning audits and advice and proposals regarding
management were made as necessary. The Audit & Supervisory Board also holds regular exchangesof opinion with the Representative Directors, Accounting Auditor, and staff of the audit office. The
Full-time Audit & Supervisory Board Member attends Management Meetings and other important
meetings, obtains necessary information from Directors and employees, etc., and shares information- 78 -

with Outside Audit & Supervisory Board Members, in his/her efforts to improve the effectivenessof audits.
Policy on Determining the Dividends of Surplus, etc.
The Company considers returning profits to shareholders a key management policy, and it has adopted a basic
dividend policy of continuing stable dividends while taking into comprehensive account matters such as thestatus of consolidated financial performance, future business outlook, improvement of profitability, and internal
reserves for strengthening the Company’s financial condition.
The Company has established provisions in the Articles of Incorporation that allow the dividend of surplus,
etc. by resolution of the Board of Directors, and has a policy of issuing dividends twice a year, namely an interim
dividend and a year-end dividend.

- 79 -

Consolidated Statement of Changes in Equity(April 1, 2023 – March 31, 2024)(In millions of yen)
Shareholders’ equity
Share capital
Balance as of April 1, 2023
Cumulative effects of correction oferrorsBalance as of April 1, 2023 reflecting
correction of errors

8,981

Capital surplus Retained earnings
13,59833,898Treasury shares

Total
shareholders’equity(6,266)50,211

(948)
8,981

13,59832,949(948)(6,266)49,262

Changes during period
Dividends of surplus

(696)

(696)

Profit attributable to owners ofparent497

497

Purchase of treasury shares
Disposal of treasury shares

(0)

(0)

0

3

3

Net changes in items other thanshareholders’ equity
Total changes during period

−

−

(199)

3

(195)

Balance as of March 31, 2024

8,981

13,59832,750(6,263)49,066

Accumulated other comprehensive income
Total accumulated
Valuation
Remeasurements
otherdifference onof definedcomprehensive
available-for-salebenefit plansincomesecurities

Non-controllinginterests

Total
net assets

1,205

55,929Balance as of April 1, 2023
Cumulative effect of correction oferrorsBalance as of April 1, 2023 reflecting
correction of errors

4,213

299

4,512

(948)
4,213

299

4,512

1,205

54,980Changes during period
Dividends of surplus(696)

Profit attributable to owners ofparent497

Purchase of treasury shares(0)

Disposal of treasury shares

3

Net changes in items other thanshareholders’ equity

863

321

1,184

46

1,231

Total changes during period

863

321

1,184

46

1,035

Balance as of March 31, 2024

5,076

620

5,697

1,251

56,016- 80 -

Notes to the Consolidated Financial Statements
Notes Regarding the Basis for Preparation of Consolidated Financial Statements
1. Scope of consolidation
Number of consolidated subsidiaries
5
Names of consolidated subsidiaries
SAVIA Corporation
SUN FOOD JAPAN CO., LTD.
Welpark Co., Ltd.
Inageya Wing Co., Ltd.
INAGEYA DREAM FARM CO. LTD.
2. Application of the equity method
Not applicable.
3. Fiscal years of consolidated subsidiaries
The fiscal year end of the consolidated subsidiaries is the same as the consolidated fiscal year end.
4. Accounting policies(1) Basis and methods for valuation of assets(i) Securities
Available-for-sale securities
Securities other than shares … Fair value method (with the entire amount of valuationthat do not have a market
differences recorded directly into net assets, and the cost ofvalue
sales calculated using the moving average method)
Shares that do not have amarket value(ii) Inventories… Cost method based on the moving average method… Primarily, the cost method based on the retail method (theamount stated in the balance sheet is calculated by writing down
the book value of assets based on declines in profitability) is
applied. For perishable foods, center merchandise, anddispensary division merchandise, etc., the last purchase cost
method (the amount stated in the balance sheet is calculated bywriting down the book value of assets based on declines in
profitability) is applied.

(2) Depreciation methods for non-current assets(i)

Property, plant andequipment(excluding leased assets)… The straight-line method is applied. However, the retail support
business subsidiary applies the declining balance method. For
buildings (excluding facilities attached to buildings) acquiredon or after April 1, 1998 and facilities attached to buildings andstructures acquired on or after April 1, 2016, the straight-line
method is applied.
The principal periods of useful life are as follows.
Buildings and structures
Tools, furniture and fixtures- 81 -

3 to 50 years
3 to 20 years

(ii) Intangible assets… The straight-line method is applied. For software for internaluse, the straight-line method is used based on the expected
useful life period (5 years).

(iii) Leased assets… The straight-line method is applied using the lease term as
service life and a residual value of zero.

(3) Treatment of deferred assets
Bond issuance costs… The amount is amortized using the straight-line method over theterm of the bonds.

(4) Recognition criteria for provisions(i)

Provision for bonuses… To provide for bonuses for employees, an amount is recorded
based on the estimated amount of payment.

(ii) Provision for bonuses for
directors (and otherofficers)… To provide for bonuses for directors (and other officers), an
amount is recorded based on the estimated amount of payment.

(iii) Provision for point cardcertificates… To provide for the use of points other than those resulting fromsales granted to point card members for the purpose of sales
promotion, an amount estimated to be used in future at the endof the fiscal year under review is recorded.

(iv) Provision for share awards… To provide for the awarding of shares of the Company toeligible senior managers of the Group pursuant to the StockAward Regulations, an amount is recorded based on the
expected amount of share award liabilities at the end of the
fiscal year under review.

(v) Provision for share awards
for directors (and otherofficers)… To provide for the awarding of shares of the Company toeligible Directors, etc. of the Group pursuant to the StockAward Regulations, an amount is recorded based on the
expected amount of share award liabilities at the end of the
fiscal year under review.

(5) Accounting of retirement benefits… When calculating pension benefit liabilities, the method for
attributing expected benefit payments for the period to thefiscal year under review is based on the benefit calculation
criteria.
Actuarial gains and losses are treated as expenses in the fiscal
year following the fiscal year in which they arise, in an amountproportionally divided using the straight-line method over a
fixed number of years (7 years) that is within the average
number of years of remaining service of employees at the timethose gains and losses emerge each fiscal year.
In addition, for the calculation of retirement benefit liabilities- 82 -

and retirement benefit costs for part-time workers, a simplified
method is applied that uses a method of treating estimatedretirement benefit payments based on voluntary termination at
the end of the fiscal year as retirement benefit liabilities.
(6) Recognition criteria for revenue and expenses(i)

Revenue recognition
pertaining to sale of goods(ii) Revenue recognition
pertaining to company
points program… Revenue that accrues from contracts with the Group’s
customers are primarily based on the sale of goods in the retailbusiness, which centers on the Supermarket Business andDrugstore Business. Revenue from these sales of goods arerecognized at the time the goods are delivered to the customer.
Regarding goods sales in which the Group considers itself to bean agent, revenue is recognized in the net amount obtained bysubtracting the amount paid to the supplier from the total
amount of consideration received by the customer.
… Recognizing points awarded to point card members for sales in
the Supermarket Business and Drugstore Business asperformance obligations, the Group distributes transaction
prices on the basis of independent sale prices calculated withconsideration of future expected loss of validity and otherfactors, and recognizes revenue at the time that the points areused.

Notes Regarding Important Accounting Estimates(Impairment of non-current assets)(1) Amount recorded in the consolidated financial statements for the fiscal year under review
Impairment losses
Property, plant and equipment

722 million yen
33,410 million yen(2) Other information to aid in understanding changes in accounting estimates
Regarding the identification, recognition, and measurement of signs of impairment losses of non-current
assets, future performance forecasts and future cash flow estimates are made based on future businessplans and past cash flow results.
These estimates, etc. may be affected by future uncertain market developments and other factors, andif the actual amounts accrued differ from the estimates, there is a possibility of significant impact on the
impairment of non-current assets in the consolidated financial statements of the following fiscal year.
Notes Regarding Correction of Errors
At Inageya Co., Ltd., there were errors in some of the amounts recorded in deferred tax assets for the fiscal
year ended March 31, 2023. For this reason, correction of errors from previous years has been made.
The cumulative impact of the correction of these errors is reflected in the book value of net assets at the
beginning of the fiscal year under review. As a result, the opening balance for the fiscal year under review
decreased by 948 million yen, reflecting the correction of errors in retained earnings in the Consolidated
Statement of Changes in Equity.
Notes to the Consolidated Balance Sheet
Accumulated depreciation of property, plant and equipment- 83 -

45,967 million yen

Notes to the Consolidated Statement of Changes in Equity
1. Total number of outstanding shares as of March 31, 2024
Common shares:
52,381,447 shares
2. Dividends(1) Dividend amountResolution
Annual General
Meeting of
Shareholders on
June 22, 2023
Board of Directors
meeting on
November 14,
2023

Class of shares

Total amount ofdividends

Dividend
per share

Commonshares

348 million yen

Commonshares

348 million yen

Record date

Effective date

7.50 yenMarch 31, 2023

June 23, 2023

7.50 yen

September 30,
2023

November 24,
2023*1 The total amount of dividends resolved at the Annual General Meeting of Shareholders held on June 22, 2023 includes 0 million
yen in dividends for treasury shares held as trust assets in the officers’ share-based remuneration scheme and the employees’
share-based incentive scheme.
*2 The total amount of dividends resolved at the Board of Directors meeting held on November 14, 2023 includes 0 million yen in
dividends for treasury shares held as trust assets in the officers’ share-based remuneration scheme and the employees’ share-based
incentive scheme.

(2) Dividends whose record date falls in the fiscal year under review, but whose effective date is after theend of the fiscal year under review
Total amount of Source of Dividend
Resolution
Class of shares
Record date Effective datedividends
dividends
per share
Annual General
Meeting ofRetained
Shareholders on
Common shares 348 million yen
7.50 yen March 31, 2024 June 27, 2024
earnings
June 26, 2024
(scheduled)*

The total amount of dividends to be resolved at the Annual General Meeting of Shareholders to be held on June 26, 2024 includes
0 million yen in dividends for treasury shares held as trust assets in the officers’ share-based remuneration scheme and theemployees’ share-based incentive scheme.

- 84 -

Notes Regarding Financial Instruments
1. Status of financial instruments(1) Policy of Initiatives for Financial Instruments
The Group raises the necessary funds mainly through bank loans and bond issues in light of its capital
investment plans. Temporary surplus funds are invested only in short-term, highly secure financial
assets and funds deposited with AEON CO., LTD., and short-term working capital is raised throughbank loans.
(2) Details of financial instruments and their risks
Although accounts receivable-trade are exposed to customer credit risk, most of these are settled in ashort period of time.
Securities are mainly joint-investment monetary trusts and beneficial interests in trusts, which havethe same nature as deposits held for surplus investment. Most of these are settled in a short period oftime.
Deposits paid to subsidiaries and associates are investment deposits entrusted with AEON CO., LTD.,a parent company of the Company, pursuant to a contract of deposit for consumption concluded withthat company.
Investment securities, which are shares related to business with partner companies and correspondent
financial institutions, are exposed to the risk of market price fluctuations.
Guarantee deposits are mainly deposits paid to the owners of stores in which the Company andWelpark Co., Ltd., a consolidated subsidiary of the Company, open stores, and are exposed to theowner’s credit risk.
Most accounts payable-trade and electronically recorded obligations-operating, which are trade
payables, are due within one month. Long-term borrowings and bonds are mainly for capital investment
financing purposes and have repayment dates or maturity dates of up to five years after the closing date.
Borrowings and bonds are mainly borrowed at fixed interest rates.
(3) Risk management system pertaining to financial instruments(i) Management of credit risk (risk of default, etc., of business partners)
In accordance with the Claims Management Rules, the individual divisions of the Group regularly
monitor the status of major business partners regarding trade receivables and guarantee deposits
and manage due dates for each partner. In addition, the Group is also making efforts to quickly
identify and mitigate concerns about collection due to the deterioration of the financial status, etc.
of business partners.
(ii) Management of market risk (foreign exchange and interest rate fluctuation risk)
Market value of investment securities, all of which are listed shares, is checked at the end of eachmonth and reported quarterly to the Board of Directors.
The financial status, etc. of the issuers of securities is periodically monitored in accordance with
the Investment Rules.
With regard to borrowings, although there is risk of fluctuation of interest rates payable on
borrowings and bonds, they are primarily borrowed at fixed interest rates.
(iii) Management of liquidity risk related to financing (risk of inability to make payments on due date)
Trade payables, borrowings, and bonds are exposed to liquidity risk, but the Group has adopted acash management system (CMS) for the purpose of efficient fund management and financing.
Individual Group companies also manage liquidity risk by methods such as preparing monthly
cash flow plans.
(iv) Supplementary explanation of matters concerning the fair value, etc. of financial instruments
As variable factors are incorporated in the calculation of market value of financial instruments, thatvalue is subject to change by adopting different assumptions.

- 85 -

2. Fair value, etc. of financial instruments
The carrying amounts, fair values, and differences between them as of March 31, 2024 (the consolidated
account closing date of the fiscal year under review) are as follows. Note that shares that do not have market
prices (please refer to (Note 2)) are not included in “available-for-sale securities.” Also, notes for cash areomitted, and for deposits, accounts receivable-trade, deposits paid to subsidiaries and associates, accounts
payable-trade, electronically recorded obligations-operating, and income taxes payable, notes are omitted
because the fair values approach the book values since they are settled in the short term.
(In millions of yen)
Carrying amounts

Fair value

Differences(1) Securities and investment
securities
Available-for-sale securities
Shares

10,272

10,272

―

Other

8,600

8,600

―

9,650

8,816

(834)

28,523

27,689

(834)

2,212

2,175

(37)

3,762

3,720

(42)

5,975

5,895

(80)

(2) Guarantee deposits (including
current portion of guarantee
deposits)
Total assets(1) Bonds (including current portionof bonds payable)(2) Long-term borrowings (including
current portion of long-termborrowings)
Total liabilities

Note 1:

Matters concerning securities
Securities and investment securities
The carrying amount, acquisition cost or amortization cost, and the differences between them foreach type of for available-for-sale securities, are as follows.
(In millions of yen)
Type
(i)

Carrying amountexceeds acquisition
cost or amortization
cost

Shares

2,955

7,317

(ii) Debentures

―

―

―

(iii) Other

―

―

―

10,272

2,955

7,317

―

―

―

(i)

Shares(ii) Debentures

―

―

―

(iii) Other

8,600

8,600

―

Subtotal

8,600

8,600

―

18,872

11,555

7,317

Total

Note 2:Differences

10,272

Subtotal
Carrying amount does
not exceed
acquisition cost or
amortization cost

Acquisition cost or
amortization cost

Carrying amount

Shares, etc. that do not have a market value(In millions of yen)
Category

Carrying amountUnlisted shares

0

Shares, etc. that do not have a market price are not included in “available-for-sale securities.”- 86 -

3. Fair value information by level within the fair value hierarchy
The fair value of financial instruments is classified into the following three levels according to theobservability and materiality of inputs used to measure fair value.
Level 1 fair value:
Level 2 fair value:

Fair value measured using observable inputs, i.e. quoted prices in active markets
for assets or liabilities that are the subject of the measurement.
Fair value measured using observable inputs other than Level 1 inputs.

Level 3 fair value:

Fair value measured using unobservable inputs.

If multiple inputs are used that are significant to the fair value measurement, the fair value measurement iscategorized in its entirety in the level of the lowest level input that is significant to the entire measurement.
(1) Financial instruments measured at fair value(In millions of yen)
Category

Fair value
Level 1

Level 2

Level 3

Total

Securities and investment
securities
Available-for-sale securities
Shares

10,272――

10,272(2) Financial instruments other than those measured at fair value(In millions of yen)
Category

Fair value
Level 1

Level 2

Level 3

Total

Securities and investment
securities
Available-for-sale securities
Other

―

8,600

―

8,600

―

8,816

―

8,816

―

17,416―

17,416

Bonds

―

2,175

―

2,175

Long-term borrowings

―

3,720

―

3,720

Total liabilities

―

5,895

―

5,895

Guarantee deposits
Total assets(3) A description of the valuation technique(s) and inputs used in the fair value measurements
Securities and investment securities
Listed shares are valued using quoted prices. As listed shares are traded in active markets, their fairvalue is classified as Level 1. On the other hand, securities (“other” under available-for-sale securities)
held by the Company are investment instruments (beneficial interests in trust, joint monetary trusts,etc.) with an investment period of three months or less that have been acquired as temporary surplus
investments of cash and deposits and are considered to be of the same nature as cash and deposits, hence
they are recorded at their acquisition costs. It is classified as Level 2 because they are not tradedfrequently in the public market and are not considered to have quoted prices in active markets.
Guarantee deposits
The fair value of guarantee deposits is measured using the present value of future cash flows, which arecalculated based on the term of contract, discounted by appropriate indicators such as yields on
government bonds. It is classified as Level 2.

- 87 -

Bonds (including current portion of bonds payable)
The fair value of bonds issued by the Company is measured using the discounted cash flow method,
based on the total amount of the sum of principal and interest, the remaining period to maturity of thosebonds, and an interest rate reflecting credit risk. It is classified as Level 2.
Long-term borrowings (including current portion of long-term borrowings)
The fair value of long-term borrowings is measured by discounting the total amount of the sum of
principal and interest at the interest rate assumed for similar new borrowings. It is classified as Level 2.
Notes on Real Estate Such as Leases
The Company and some of its subsidiaries own commercial facilities for lease in Tokyo, Saitama Prefecture,and other areas within the Kanto region. As some of such facilities are used by the Company and its
consolidated subsidiaries, they are recognized as real estate that includes portions used as real estate such asleases.
The carrying amounts, changes during the fiscal year under review, and fair values of real estate such asleases and real estate that includes portions used as real estate such as leases are as follows:(In millions of yen)
Carrying amount
Fair value as ofMarch 31, 2024

Carrying amountas of April 1, 2023

Changes during the
fiscal year underreview

Carrying amountas of March 31, 2024

Real estate such as leases

3,157

23

3,181

3,356

Real estate that includes portions
used as real estate such as leases

3,499

235

3,735

4,509

Notes:
1. Carrying amounts are the amounts obtained by subtracting accumulated depreciation and accumulated impairment loss fromthe acquisition cost.
2. Major increases during the fiscal year under review include acquisition and the like (547 million yen), and major decreases
include depreciation (182 million yen).
3. The fair values as of March 31, 2024 represent the amounts calculated by the Company mainly based on the Japan Real EstateAppraisal Standards (including those adjusted using indices).

Profit or loss on real estate such as leases and real estate that includes portions used as real estate such asleases for the fiscal year under review were as follows:(In millions of yen)
Rental income

Rental expenses

Other (gain or loss on
sale, etc.)

Difference

Real estate such as leases

123

159

(36)

(81)

Real estate that includes portions
used as real estate such as leases

380

941

(560)

(24)

Note: As real estate that includes portions used as real estate such as leases includes parts used by the Company and some of its
consolidated subsidiaries to provide services and to conduct business administration, rental income from those parts is notrecorded.
Expenses related to such real estate (depreciation, repair expenses, insurance premiums, taxes and dues, etc.) are included
in rental expenses.

- 88 -

Notes Regarding Revenue Recognition
1. Information on the breakdown of revenue generated from contracts with customers(In millions of yen)
Reportable segments
Supermarket
Business

Drugstore
Business

Retail Support
Business

Operatingrevenue (*)

Total

Total

Net sales
Retail sales

203,925

41,797―245,723―

245,723

Dispensing

―

4,399

―

4,399

―

4,399

Other

―

―

471

471

9,285

9,757

203,925

46,196471

250,594

9,285

259,879

―

―

―

―

1,607

1,607

Revenue generated fromcontracts with customers
Other revenue

Operating revenue from
203,925
46,196471
250,594
10,892
261,486
external customers(*) “Other” in operating revenue consists mainly of delivery agency income from supplying goods to stores on behalf ofsuppliers and revenue from consignment sales, and “other revenue” is real estate rental income from attracting tenants to
the Group’s stores and other facilities.

2. Information that provides the basis for the understanding of revenue generated from contracts with customers
The Group conducts retail businesses with Supermarket Business and Drugstore Business as its core, andbusiness with subsidiaries that conduct retail business. The Group’s primary revenue comes from sales ofgoods to customers at individual retail stores, and we recognize revenue at the point of sale to customers, as
we believe that our performance obligations are satisfied at the time of such sales. The consideration for the
goods is received within approximately one month from the time of delivery.
Operating revenue consists primarily of delivery agency income from supplying goods to stores on behalfof suppliers, commission fees from consignment sales, and real estate rental income from attracting tenants
to the Group’s stores, etc. We recognize revenue at the point of delivery of services because we believe thatour performance obligations will be satisfied in accordance with use. Consideration for these services isreceived within approximately one month based on contracts with business partners.
3. Reconciliation of satisfaction of performance obligations under contracts with customers and cash flows
arising from such contracts, and the amount and timing of revenue arising from contracts with customers
existing at the end of the fiscal year under review expected to be recognized in and after the following fiscal
year(1) Balance of contract liabilities, etc.
Fiscal year under review
Contract liabilities (opening balance)

2,553 million yen

Contract liabilities (closing balance)

2,524 million yen

Contract liabilities are mainly related to points granted to customers at the time of sales, and are reversed
upon recognition of revenue at the time when customers use their own available points at the time ofsales of products.
Of revenue recognized in the fiscal year under review, 1,486 million yen was included in the opening
balance of contract liabilities.
(2) Transaction prices allocated to the remaining performance obligations
For contracts with an expected initial term of one year or less, descriptions are omitted in accordancewith practical expedient.

- 89 -

Notes on Per Share Information
Net assets per share
Profit per share

1,181.55 yen
10.73 yen

Notes Regarding Significant Subsequent Events
Exchange of a Share Exchange Agreement and a Business Integration Agreement
The Company and United Super Markets Holdings Inc. (“U.S.M.H”) have decided, by resolution of Boards of
Directors of respective companies on April 18, 2024, to enter into a share exchange agreement (the “Share
Exchange Agreement”) to implement a share exchange (the “Share Exchange”) wherein U.S.M.H will become
the parent company of the Company and the Company will become U.S.M.H’s wholly owned subsidiary. In
addition, U.S.M.H, Maruetsu Co., Ltd. (“Maruetsu”), Kasumi Co., Ltd. (“Kasumi”), MaxValu Kanto Co., Ltd.
(“MV Kanto”; U.S.M.H, Maruetsu, Kasumi and MV Kanto are collectively hereinafter referred to as the“U.S.M.H Group Companies”), the Company, and AEON CO., LTD. (“AEON”) have entered into a businessintegration agreement concerning U.S.M.H’s business integration with the Company (the “Business Integration
Agreement”).
The Share Exchange is scheduled to take effect on November 30, 2024, upon approval by resolutions of theannual general meeting of shareholders of U.S.M.H to be held on May 24, 2024 and the Annual General Meetingof Shareholders of the Company to be held on June 26, 2024. Prior to the effective date of the Share Exchange,
the common stock of the Company (the “Company Stock”) is scheduled to be delisted from the Prime Marketof the Tokyo Stock Exchange, Inc. (the “Tokyo Stock Exchange”) (the last trading date of the shares will be
November 27, 2024).
The Company will become a wholly owned subsidiary of U.S.M.H upon implementation of the Share
Exchange. The details are as follows.
1. Purpose of the Share Exchange to make the company a wholly owned subsidiary
U.S.M.H was established on March 2, 2015, through a joint stock transfer by Maruetsu, Kasumi, and MV
Kanto. As of April 18, 2024, U.S.M.H is comprised of twelve consolidated subsidiaries and three affiliatedcompanies. U.S.M.H welcomes the participation of like-minded supermarket companies in the Tokyo
metropolitan area under the basic philosophy of “contributing to the rich and healthy diet of our customers,
wishing for the development and prosperity of the region, being deeply rooted in the region, constantly
innovating and taking on challenges, and remaining a company that adapts to the times.” U.S.M.H aims tobecome the number one supermarket company in the Tokyo metropolitan area by establishing 1,000 storeswith one trillion yen in sales as the core of AEON’s Kanto supermarket business.
The Company was founded in 1900 in Tachikawa City, Tokyo, and operates supermarket and drug store
businesses in one metropolitan area and three prefectures in the Kanto region (Tokyo, Kanagawa, Saitama
and Chiba). The Company aims to contribute to society as a “helpful local business” by promoting“sukoyakeku,” which means “contributing to the realization of healthy, rich and warm daily lives, and ahealthier society for customers” and practicing “the way of the merchant” which refers to “a group of people
who can experience the joy of their customers as their own joy.”
AEON is promoting management based on the basic philosophy of “pursuing peace with customers,
respecting people and contributing to local communities” and aims to become a “company that contributes
to the community to the upmost of its ability” by responding to increasingly diverse environmental changes
and by continuing to provide customers with a better lifestyle and improved convenience as competition
across business lines is expected to intensify against the background of changes in consumer lifestyles andpurchasing behavior.
In the food supermarket industry, demand for home meals increased due to the spread of COVID-19,
which increased the number of people spending time at home and working from home. The industry as awhole performed well and was temporarily yet greatly affected by this “stay-at-home demand.” However,the business environment has become increasingly severe, as consumer behavior has shifted away from stayat-home meals to eating out due to the normalization of economic and social activities. Further, operating- 90 -

costs have increased due to rising raw material prices, rising wages, and rising water and utility costs. In
addition, the handling of food products by other industries, such as e-commerce operators and drug storeshas increased due to Japan’s declining birthrate and aging population, as well as due to changes in consumer
lifestyles and purchasing behavior. As a result, competition across industries has become more intense.
Consequently, further shakeout and industry restructuring is expected in the future.
Based on this recognition of the environment, the Company, AEON, and U.S.M.H have continued toshare information and discuss issues and have strived to realize their respective principles and increase
corporate value. As announced in the press release dated April 25, 2023 “AEON CO., LTD., Inageya Co.,
Ltd., and United Super Markets Holdings Inc. Announce the Execution of a Memorandum of Understanding
Regarding the Business Integration for Realization of a JPY1 trillion Supermarket in Kanto,” the Company,
AEON, and U.S.M.H have come to the conclusion that, in order to continue to respond to customers’ needs
with a sense of speed, and to coexist with local communities and grow together in the Tokyo metropolitanarea, where competition is expected to intensify further in the future, it is most appropriate to further deepen
the relationship through strengthening capital relationships and management integration. This will allow the
Company, AEON, and U.S.M.H to make the most of the AEON Group’s various assets such as digital,
products, human resources, and payment infrastructure. The goal being to evolve into a new business modelthat utilizes economies of scale as a combined one trillion yen supermarket group. The Company and
U.S.M.H will set aside sufficient time for discussions following the execution of the memorandum of
understanding with a view to determining how to maximize synergies by around November 2024. The
Company and AEON, which have already formed an alliance, will further strengthen their capital andbusiness alliance relationship. AEON and the Company determined that they can promptly realize synergies
by utilizing various assets of the AEON Group. AEON conducted a tender offer to the Company (the “Tender
Offer”), as announced in the “Notice of Commencement of Tender Offer to Inageya Co., Ltd. (Securities
Code: 8182)” dated October 6, 2023, and now holds 51.0% of shares of the Company, as announced in the“Notice of Results of Tender Offer for Shares of Inageya Co., Ltd. and Change of Subsidiary” dated
November 30, 2023.
The preparatory committee for integration, which was jointly established on June 19, 2023, by theCompany and U.S.M.H Group Companies, discussed and reviewed the realization and effect of the synergies
envisaged following the execution of the memorandum of understanding. As a result of discussions, it has
been determined that, in addition to contributing to the enhancement of corporate value through the synergies
described below, in an increasingly competitive environment, strengthening the dominance of the Company
and U.S.M.H in the Tokyo metropolitan area, where stable demand is expected to continue, will lead to thecreation of various economies of scale.
In response to a proposal from U.S.M.H, the Company commenced consideration of whether to proceedwith the transactions that would make the Company a wholly owned subsidiary of U.S.M.H, including theShare Exchange (the “Transactions”). After thorough consideration of the potential disadvantages associatedwith the delisting of the Company, such as its corporate creditworthiness and the impact on current
shareholders, the Company concluded that it would benefit from becoming a wholly owned subsidiary of
U.S.M.H. This is because the Company considered that it will be able to maintain its corporate
creditworthiness as a major group company of U.S.M.H even following the Share Exchange, and that it ispossible to provide the shareholders of the Company with the value and benefits that can be generated by
the Share Exchange through the delivery of shares of U.S.M.H as consideration for the Share Exchange. The
Company considered that the Share Exchange will be beneficial not only for U.S.M.H but also for theshareholders of the Company. AEON agreed with such plans of the Company and U.S.M.H, and approved
the Share Exchange. Further, as described in “Notice Concerning Making Welpark Co., Ltd. a Wholly Owned
Subsidiary Company of WELCIA HOLDINGS CO., LTD., Change of Subsidiary Company in Inageya Co.,
Ltd. (Share Transfer), Receipt of Special Dividends from Subsidiary and Recording of Extraordinary Profit”
dated April 18, 2024, the Company has reached an agreement with WELCIA HOLDINGS CO., LTD.
(“Welcia HD”), a subsidiary of AEON, to transfer the shares of Welpark Co., Ltd. (“Welpark”), which is a
subsidiary of the Company and operates a drug store business, to Welcia HD prior to the execution of theTransactions. The consideration of the Share Exchange by the Company and U.S.M.H is subject to the- 91 -

transfer of the shares of Welpark to Welcia HD.
As a result of the above, Boards of Directors of both companies resolved to implement the Share
Exchange on April 18, 2024. Specifically, the two companies expect the following synergies to arise, which
will result in the improvement of corporate value:(i) Increase in sales and gross margin by expanding the use of TOPVALU private label products;(ii) Cost reduction through joint product procurement (national brand products, regional products, andimported products);(iii) Promotion of mutual efforts to revitalize food supermarkets, develop stores tailored to local
customers, etc.;(iv) Cost reduction by organizing and utilizing the functions of distribution centers, and process centers,
etc.;(v) Cost reduction through joint procurement of materials, fixtures and equipment, and integration of
back-office operations;(vi) Joint use of credit cards, e-money and loyalty cards;(vii) E-commerce initiatives such as joint research and development of online businesses;(viii) Utilization of AEON Group’s education system and personnel exchange;(ix) Provision of analysis services combining membership information and POS information; and(x) Cost reduction through system sharing, and DX promotion.
2. Overview of the Share Exchange(1) Schedule for the Share Exchange
Date of resolution by the board of directors of both companies on
the execution of the Share Exchange Agreement
Execution date of the Share Exchange Agreement (bothcompanies)
Annual general meeting of shareholders to approve the Share
Exchange Agreement (U.S.M.H)
Annual general meeting of shareholders to approve the Share
Exchange Agreement (the Company)
Final trading date (the Company)
Delisting date (the Company)
Effective date of the Share Exchange

April 18, 2024
April 18, 2024
May 24, 2024
June 26, 2024 (to be
confirmed)
November 27, 2024 (to be
confirmed)
November 28, 2024 (to be
confirmed)
November 30, 2024 (to be
confirmed)

Note: The schedule of the Share Exchange may be changed by agreement between the two companies if it becomes
necessary to satisfy the procedures of the Share Exchange or for other reasons. Any changes to the above schedule
will be announced promptly.

(2) Method of the Share Exchange
The Share Exchange is a share exchange wherein U.S.M.H will become the parent company of theCompany, and the Company will become U.S.M.H’s wholly owned subsidiary. The Share
Exchange is scheduled to take effect on November 30, 2024, subject to approval of the Share
Exchange Agreement by resolution at the annual general meeting of shareholders of U.S.M.H heldon May 24, 2024 and at the Annual General Meeting of Shareholders of the Company scheduled
to be held on June 26, 2024.

- 92 -

(3) Details of the ownership ratio for the Share Exchange
U.S.M.H
The Company(to become the parent company(wholly owned subsidiary
resulting from the shareresulting from the shareexchange)exchange)
Ownership ratio of shares1
1.46
for the Share Exchange
Number of shares to be
U.S.M.H ordinary shares (planned)delivered as a result of the
67,794,529 shares
Share Exchange(4) Overview of the Business Integration Agreement
Under the Business Integration Agreement, the Company, the U.S.M.H Group Companies, and AEON
have agreed to implement the business integration through a share exchange, whereby U.S.M.H will
become the parent company of the Company, and the Company will become U.S.M.H’s wholly owned
subsidiary. In addition to the matters related to the Share Exchange described above, the two companies
have agreed that with respect to the management structure following the Share Exchange, U.S.M.H
shall have an appropriate number of representative director(s), directors and auditors that will contributeto resolving relevant issues with the aim of realizing the basic principles of U.S.M.H and achieving
management goals. The Company, the U.S.M.H Group Companies, and AEON will cooperate witheach other to create new value beyond the scope of each company while maintaining their existing
corporate brands and maintaining the independent management of each company.
(5) Outline of the wholly owning parent company in the Share Exchange
Trade name

United Super Markets Holdings Inc.

Head office address

1 Kanda Aioi-cho, Chiyoda-ku, Tokyo

Representative nameMotohiro Fujita, President and Representative Director

Paid-in capital

10,000 million yen (as of February 29, 2024)

Net assets

150,250 million yen (as of February 29, 2024)

Total assets

285,505 million yen (as of February 29, 2024)

Business description

Management of supermarket businesses

Share Transfer Agreement
The Company (together with its subsidiaries, “the Group”), AEON CO., LTD. (“AEON” and, together with
its subsidiaries, “AEON Group”), and WELCIA HOLDINGS CO., LTD. (“Welcia” and, together with its
subsidiaries, “Welcia Group”) have entered into a share transfer agreement (“Share Transfer Agreement”)
on April 18, 2024, whereby Welcia will acquire 16 million shares (84.21%) and 3 million shares (15.79%)
of the Company’s consolidated subsidiary Welpark Co., Ltd. (“Welpark”) from the Company and AEON,
respectively (“Transaction”). As a result, Welpark will become a wholly owned subsidiary of Welcia.
As a result of the above, the Company is expected to record extraordinary income of approximately 1,623
million yen during the second quarter of the fiscal year ending March 31, 2025.
Also, as a result of the Transaction, Welpark will cease to be a consolidated subsidiary of the Company.

1.

Reason for the transfer of shares
Welcia’s corporate slogan is “To promote higher quality of life and healthy lifestyles for our customers.”
Based on this slogan, Welcia has been evolving its business model (“Welcia Model”) centered on “Instore pharmacy,” “Counselling,” “Late night operations” and “Nursing,” aiming to become a “Lifestyleplatform” offering value-added products and services on the theme of health and “Specialized General- 93 -

Store.” We aim to build stores that support a rich lifestyle, health and beauty of nearby residents by
expanding our service offering to be more convenient, to have a selection of goods that reflects theregional nature, and to provide counselling and polite customer service that leverages the specialized
knowledge of our employees. We operate stores from Hokkaido to Okinawa.
The Company operates supermarket and drug store businesses in the Kanto region (Tokyo,
Kanagawa, Saitama and Chiba). The Company aims to contribute to society as a “helpful local business”
by promoting “sukoyakeku,” which means “contributing to the realization of healthy, rich and warm
daily lives, and a healthier society for customers” and practicing “the way of the merchant” which refers
to “a group of people who can experience the joy of their customers as their own joy.”Welpark, which handles the drugstore business of the Group, has a corporate slogan of “helping witha healthy and rich everyday.” Welpark has a total of 140 stores (as of March 2024, 21 of these storesinclude pharmacies and seven stores are exclusively pharmacies) in good locations such as residential
areas, train station areas, and next to major roads, in the Kanto region (Tokyo, Kanagawa, Saitama andChiba). In recent years, Welpark has been promoting its status as a “lifestyle support drugstore” byimproving its customer interaction capabilities and its employment of personnel with qualifications,and by strengthening its e-commerce business and stores that combine sales of products together witha pharmacy.
AEON is promoting management based on the basic philosophy of “pursuing peace with customers,
respecting people and contributing to local communities.” AEON has made the evolution of health andwellness to respond to the new era an important strategy. The extension of healthy lifespan is a social
issue, and customers’ desire for improved health is at an all-time high. In this environment, AEON aims
to continue to provide convenience and a richer lifestyle to customers through evolving its health andwellness business to provide holistic products and services.
The drugstore business to date has expanded steadily in market size based on aggressive expansion
in number of stores, expanded product selection and increases in the demand for health. On the other
hand, consumers have become more cost-conscious as a result of price increases, and personnel andlogistics costs have been increasing, among other changes in the business environment. Also, the roomfor new store openings in the domestic market is shrinking, and the opportunities for restructuring areincreasing as we approach a mature stage of growth as an industry.
Through the Transaction, Welcia will be able to further strengthen its dominance of Welcia’s mothermarkets by Welpark joining the Welcia Group, as Welpark has a strong management base in the Tokyo
metropolitan area, where the population continues to grow despite the overall aging population anddecreases in birth rate. We believe Welcia will be able to increase its business operations’ efficiency
through optimized logistics and marketing. Welpark, we believe, will be able to improve its ability to
attract revenues and customers by increasing stores with in-store pharmacies and joining forces with
Welcia on its private brand products, procurement and marketing.
Welcia determined that it would be most effective for Welpark to join the Welcia Group in order toadvance its crosscutting development of the “Welcia Model” in the Tokyo metropolitan area by building
an operation that can make maximum use of both companies’ management resources. This is why wehave decided to proceed with the acquisition of shares. Welcia would like to achieve its vision ofproviding healthy living and a rich lifestyle to local customers by proactively giving back to customers
the new value created.
On the other hand, the Company also determined, taking into account the changes taking place within
the drugstore industry, it would be appropriate to leverage the synergies that would be created byutilizing both companies’ management resources after the Transaction resulting in Welpark becoming
a wholly owned subsidiary of Welcia, rather than keeping Welpark as the Company’s subsidiary, inorder to provide better products and services to customers, and to maximize the motivation of theemployees who work at Welpark and also Welpark’s corporate value. This is why the Company
determined to transfer its Welpark shares to Welcia.
AEON agrees with Welcia’s and the Company’s thoughts stated above, and that it is possible toincrease Welpark’s and Welcia’s corporate value through the Transaction. This is why AEON decided- 94 -

to transfer its Welpark shares to Welcia.
2.

Overview of the subsidiary experiencing the change (Welpark)
Name
Welpark Co., Ltd.
Address
1-1 Sakae-cho 6-chome, Tachikawa City, Tokyo
Name and title of
Ichiro Sugano, Representative Director
representative
Operation of drugstores and dispensing pharmacies in the greater Tokyo
Business overview
area
Paid-in capital
950 million yen (as of March 31, 2024)
Date of establishment September 17, 1990
Major shareholders
Inageya Co., Ltd.
84.21%and shareholding
AEON CO., LTD.
15.79%
ratiosThere is no relevant relationship with Welcia. However,
CapitalWelpark is a subsidiary of Inageya, which is a subsidiary
relationshipof AEON, which is Welcia’s parent company. Also,
Welpark is a subsidiary of AEON.
There is no relevant relationship with Welcia. However,
WELCIA YAKKYOKU CO., LTD., a subsidiary of
Welcia, has a director named Hiroyuki Namba, and heservices as a director of Welpark.
Relationships between Personnel
With respect to Inageya, its Director Kazuhikorelationshipthe listed company
Shimamoto concurrently serves as a director of Welpark.
Further, Kenichiro Takayanagi, a Full-time Audit &Supervisory Board Member of Inageya, also serves as anauditor of Welpark.
There is no relevant relationship with WELCIA.
Inageya has business relationships with Welpark by
Businessleasing a portion of its stores and purchasing somerelationshipproducts. Also, Inageya and Welpark have entered into
an “Agreement on Cash Management.”
Consolidated operating results and consolidated financial position of the company for the past threeyears
Fiscal year ended
March 31, 2022
March 31, 2023
March 31, 2024
Net assets
7,357 million yen
7,603 million yen
7,872 million yen
Total assets
15,545 million yen
15,752 million yen
18,359 million yen
Net assets per share
387.3 yen400.2 yen414.3 yen
Net sales
42,638 million yen
43,676 million yen
46,196 million yen
Operating profit
1,000 million yen
770 million yen
605 million yen
Ordinary profit
1,059 million yen
801 million yen
609 million yen
Profit
567 million yen
302 million yen
298 million yen
Profit per share
29.9 yen
15.9 yen
15.7 yen
Dividend per share
2.99 yen
1.60 yen
1.60 yen- 95 -

3.

Overview of the wholly owning company acquiring the shares (WELCIA HOLDINGS)Name
WELCIA HOLDINGS CO., LTD.
Address
2-15 Sotokanda 2-chome, Chiyoda-ku, Tokyo
Name and title of
Takamitsu Ikeno, Representative Director, Chairman and President
representative
Management and operation of subsidiaries and group companies which
Business overview
operate a chain of drugstores with in-store pharmacies
Paid-in capital
7,748 million yen (as of February 29, 2024)
Date of establishment September 1, 2008
Net assets
244,367 million yen (as of February 29, 2024)
Total assets
551,860 million yen (as of February 29, 2024)
AEON
50.54%The Master Trust Bank of Japan, Ltd. (trust account)
7.81%
Custody Bank of Japan, Ltd. (trust account)
3.40%
WELCIA HOLDINGS Employee Stockownership
1.88%
Major shareholders
Planand shareholding
Tsuruha Holdings, Inc.
1.60%
ratiosCustody Bank of Japan, Ltd. (trust account E)
1.39%(as of August 31,
STATE STREET BANK WEST CLIENT-TREATY
2023)
505234 (Standing proxy: Settlement & Clearing
1.36%
Services Department, Mizuho Bank, Ltd.)SMBC Nikko Securities Inc.
1.14%
Ishida Co., Ltd.
0.77%
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
0.71%
There is no relevant relationship with Inageya.
CapitalAEON holds 105,950,600 ordinary shares of Welcia
relationship(approximately 50.54%* of the total)
There is no relevant relationship with Inageya.
Personnel
Motoya Okada, Director, Chairman and Representative
Executive Officer of AEON, serves as a Director of
relationship
Welcia.
Relationships between
There is no relevant relationship with Inageya.
the listed company
The AEON Group and the Welcia Group have a
Trading
relationship that includes payment of royalties,
relationshipconsumption bailment, financial services and purchasesof products.
Relevant status
As Inageya is a subsidiary of AEON, it constitutes a
related party of WELCIA.
with respect to
AEON is Welcia’s parent company.
related parties
Note: “Shareholding ratios” refers to the percentages of the number of shares obtained by subtracting the treasury
shares (13,634 shares) held by Welcia on August 31, 2023 (however, this excludes the 3,425,219 shares of theCompany held in the stock benefit trust for officers and employees as of August 31, 2023) from the total numberof outstanding shares as of August 31, 2023 (209,656,076 shares) stated in the “Consolidated Financial Results
for the Six Months Ended August 31, 2023” submitted by Welcia on October 10, 2023. Percentages have beenrounded off to the nearest second decimal place.

- 96 -

4.

Status of share ownership before and after the acquisition of shares (transfer), acquisition (transfer)price and number of shares acquired (transferred)(1) WELCIA(1) Share ownership before change(2)

Number of shares to be acquired(3)

Acquisition price(4)

Share ownership after change(2) Inageya(1) Share ownership before transfer
(2)
(3)
(4)

Number of shares to betransferred
Transfer price
Share ownership after transfer(3) AEON(1) Share ownership before transfer
(2)
(3)
(4)
5.

Schedule
(1)
(2)
(3)

6.

7.

Number of shares to betransferred
Transfer price
Share ownership after transfer

Date of Board of Directors
resolution and Representative
Executive Officer’s decision
Date of agreement
Date of execution of sharetransfer

Receipt of dividends by Inageya(1) Dividend amount(2) Date of determination(3) Effective date(4) Impact on financial results

0 shares(Number of voting rights: 0)(Percentage of voting rights: 0.0%)
19,000,000 shares(Number of voting rights: 19,000)
Common shares of Welpark
8,300 million yen
Advisory fees, etc. (estimate)
105 million yen
8,405 million yen
Total (estimate)
19,000,000 shares(Number of voting rights: 19,000)(Percentage of voting rights: 100%)
16,000,000 shares(Number of voting rights: 84.21%)
16,000,000 shares(Percentage of voting rights: 84.21%)
6,989 million yen
0 shares(Percentage of voting rights: 0.0%)
3,000,000 shares(Number of voting rights: 15.79%)
3,000,000 shares(Percentage of voting rights: 15.79%)
1,311 million yen
0 shares(Percentage of voting rights: 0.0%)
April 18, 2024
April 18, 2024
September 2, 2024 (to be confirmed)

1,263 million yen
April 18, 2024
August 30, 2024 (to be confirmed)
Non-operating income of 1,263 million yen in
dividend income will be recorded in Inageya’s nonconsolidated financial results for the fiscal year
ending March 31, 2025. As these are dividends
received from a consolidated subsidiary, there will
be no impact on the consolidated financial results.

Recording of extraordinary income by Inageya
Once the share transfer has been executed upon satisfaction of the preconditions of the Share Transfer
Agreement, extraordinary income of 1,623 million yen will be recorded as gain on sale of shares ofsubsidiaries and associates in Inageya’s consolidated financial results for the six months ending
September 30, 2024.

- 97 -

Non-Consolidated Statement of Changes in Equity(April 1, 2023 - March 31, 2024)(In millions of yen)
Shareholders’ equity
Capitalsurplus

Balance as of April 1, 2023
Cumulative effects ofcorrection of errors
Balance as of April 1, 2023
reflecting correction of errors
Changes during period
Dividends of surplus
Reversal of reserve for tax
purpose reduction entry
of non-current assets
ProfitPurchase of treasury shares
Disposal of treasury shares
Net changes in items otherthan shareholders’ equity

Retained earnings

Other retained earnings
Reserve for
Share capital
Legal
Retainedtax purpose
Legal capitalretained
reduction
Generalearnings
surplusearnings
entry of nonreserve
brought
current
forwardassets
8,981
13,5981,544
367
17,300
3,080

8,981

13,5981,544

367

17,300(1)

Total
retainedearnings
22,291

(948)

(948)

2,131

21,343

(696)

(696)

1

−

1,416

1,416

0

0

Total changes during period

−

−

−

(1)

−

721

719

Balance as of March 31,
2024

8,981

13,5981,544

366

17,3002,852

22,062

Shareholders’ equity
Total
shareholders’ equity

Treasury shares
Balance as of April 1, 2023
Cumulative effects ofcorrection of errors
Balance as of April 1, 2023
reflecting correction of errors(6,266)

38,604

Valuation and translation
adjustments
Valuation difference on
available-for-salesecurities
4,213

(948)
(6,266)37,655Total
net assets
42,818
(948)

4,213

41,869Changes during period
Dividends of surplus

(696)

(696)

Reversal of reserve for tax
purpose reduction entry
of non-current assets−

Profit

1,416

1,416

Purchase of treasury shares

(0)

(0)

(0)

Disposal of treasury shares

3

3

3

Net changes in items otherthan shareholders’ equity
Total changes during period
Balance as of March 31, 2024

863

863

3

723

863

1,586

(6,263)38,3795,076

43,455- 98 -

Notes to Non-Consolidated Financial Statements
Notes Regarding Significant Accounting Policies
1. Basis and methods for valuation of assets(1) Securities(i) Shares of subsidiaries… Cost method based on the moving average method(ii) Available-for-sale securities
Securities other than sharesthat do not have a market
value
Shares that do not have amarket value(2) Inventories… Fair value method (with the entire amount of valuation differences
recorded directly into net assets, and the cost of sales calculatedusing the moving average method)… Cost method based on the moving average method… Primarily, the cost method based on the retail method (the amountstated in the balance sheet is calculated by writing down the bookvalue of assets based on declines in profitability) is applied. For
perishable foods and center merchandise, the last purchase cost
method (the amount stated in the balance sheet is calculated bywriting down the book value of assets based on declines in
profitability) is applied.

2. Depreciation methods for non-current assets(1) Property, plant and equipment… The straight-line method is applied.
(excluding leased assets)
The principal periods of useful life are as follows.

(2) Intangible assets(3) Leased assets

3. Treatment of deferred assets
Bond issuance costs

Buildings and structures
3 to 50 years
Tools, furniture and fixtures
3 to 20 years
Thestraight-line
methodisapplied.
For software for internal use,…
the straight-line method is used based on the expected useful life
period (5 years).
… The straight-line method is applied using the lease term as service
life and a residual value of zero.

…

The amount is amortized using the straight-line method over theterm of the bonds.

4. Recognition criteria for provisions(1) Allowance for doubtful accounts … To provide for bad debt expenses in the allowance for accounts
receivable – trade, loans receivable, etc., estimated uncollectible
receivables are recorded based on the actual rate of bad debts forgeneral receivables and on the estimated recoverability for specificdoubtful receivables.
(2) Provision for bonuses… To provide for bonuses for employees, an amount is recorded basedon the estimated amount of payment.
(3) Provision for bonuses for… To provide for bonuses for directors (and other officers), an amountdirectors (and other officers)
is recorded based on the estimated amount of payment.
(4) Provision for point card
… To provide for the use of points other than those resulting fromcertificatessales granted to point card members for the purpose of sales
promotion, an amount estimated to be used in future at the end of
the fiscal year under review is recorded.

- 99 -

(5) Provision for share awards(6) Provision for share awards for
directors (and other officers)(7) Provision for retirement benefits… To provide for the awarding of shares of the Company to eligible
senior managers pursuant to the Stock Award Regulations, anamount is recorded based on the expected amount of share award
liabilities at the end of the fiscal year under review.
… To provide for the awarding of shares of the Company to eligible
Directors, etc. of the Company pursuant to the Stock Award
Regulations, an amount is recorded based on the expected amountof share award liabilities at the end of the fiscal year under review.
To provide for retirement benefits for employees, an amount isrecorded based on the estimated amounts of retirement benefit
liabilities and pension assets at the end of the fiscal year underreview. When calculating pension benefit liabilities, the method for
attributing expected benefit payments for the period to the fiscal
year under review is based on the benefit calculation criteria.
Actuarial gains and losses are treated as expenses in the fiscal year
following the fiscal year in which they arise, in an amountproportionally divided using the straight-line method over a fixed
number of years (7 years) that is within the average number of yearsof remaining service of employees at the time those gains andlosses emerge each fiscal year.
In addition, for the calculation of provision for retirement benefits
and retirement benefit costs for part-time workers, a simplified
method is applied that uses a method of treating estimatedretirement benefit payments based on voluntary termination at theend of the fiscal year as retirement benefit liabilities.

5. Recognition criteria for revenue and expenses(1) Revenue recognition pertaining … Revenue that accrues from contracts with the Company’s
to sale of goods
customers are primarily based on the sale of goods. Revenue fromthese sales of goods are recognized at the time the goods aredelivered to the customer.
Regarding goods sales in which the Company considers itself to bean agent, revenue is recognized in the net amount obtained bysubtracting the amount paid to the supplier from the total amountof consideration received by the customer.
(2) Revenue recognition pertaining … Recognizing points awarded to point card members for sales in theto company points program
Supermarket Business as performance obligations, the Company
distributes transaction prices on the basis of independent sale prices
calculated with consideration of future expected loss of validity andother factors, and recognizes revenue at the time that the points areused.
6. Other important matters that form the basis of the preparation of the financial statements
Accounting of retirement benefits… The accounting method for unrecognized actuarial gains andlosses pertaining to retirement benefits differs from the accounting
method used in the consolidated financial statements.

- 100 -

Notes Regarding Important Accounting Estimates(Impairment of non-current assets)(1) Amount recorded in the non-consolidated financial statements for the fiscal year under review
Impairment losses
595 million yen
Property, plant and equipment
28,476 million yen(2) Other information to aid in understanding changes in accounting estimates
Regarding the identification, recognition, and measurement of signs of impairment losses of non-current
assets, future performance forecasts and future cash flow estimates are made based on future businessplans and past cash flow results.
These estimates, etc. may be affected by future uncertain market developments and other factors, andif the actual amounts accrued differ from the estimates, there is a possibility of significant impact on the
impairment of non-current assets in the non-consolidated financial statements of the following fiscal year.
Notes Regarding Correction of Errors
There were errors in some of the amounts recorded in deferred tax assets for the fiscal year ended March 31,
2023. For this reason, correction of errors from previous years has been made.
The cumulative impact of the correction of these errors is reflected in the book value of net assets at the
beginning of the fiscal year under review. As a result, the balance at the beginning of the fiscal year underreview decreased by 948 million yen, reflecting the correction of errors in retained earnings in the Nonconsolidated Statement of Changes in Equity.

Notes to the Non-Consolidated Balance Sheet
1. Accumulated depreciation of property, plant and equipment

42,295million yen

2. Monetary claims and debts related to subsidiaries and associates (excluding claims and debts presented
separately)
Short-term monetary claims
3,548million yen
Long-term monetary claims
270million yen
Short-term monetary debts
1,562million yen
Long-term monetary debts
17million yen* Short-term borrowings from subsidiaries and associates presented separately are short-term monetarydebts for the purpose of efficient fund management and procurement within the Group through the CashManagement System (CMS).
Notes to the Non-Consolidated Statement of Income
Turnover of business transactions with subsidiaries and associates
Turnover of sales transactions
Net sales
Operating revenue
Purchases
Selling, general and administrative expenses
Turnover of business transactions other than sales transactions

2 million yen
1,009 million yen
6,587 million yen
3,997 million yen
962 million yen

Notes to the Non-Consolidated Statement of Changes in Equity
Class and number of treasury shares on March 31, 2024
Common shares
6,032,108 shares* The number of treasury shares on March 31, 2024 includes 84,956 shares held as trust assets inthe stock benefit trust for officers and the stock benefit trust for employees.
- 101 -

Notes on Tax Effect Accounting
Breakdown of major factors that caused deferred tax assets and liabilities
Deferred tax assets
Impairment losses
Asset retirement obligations
Provision for retirement benefits
Bonuses payable, etc.
Provision for point card certificatesContract liabilities
Loss on valuation of shares of subsidiaries and associates
Loss on valuation of goods
Accrued business taxes
Tax losses carried forward
Other
Deferred tax assets sub-total
Valuation allowance for tax losses carried forward
Valuation allowance for total deductible temporary differences
Valuation allowances sub-total
Total deferred tax assets

2,101 million yen
980 million yen
199 million yen
643 million yen
22 million yen
549 million yen
363 million yen
211 million yen
94 million yen
371 million yen
183 million yen
5,722 million yen- million yen(2,727) million yen(2,727) million yen
2,995 million yen

Deferred tax liabilities
Valuation difference on available-for-sale securities
Prepaid pension costs
Reserve for tax purpose reduction entry of non-current assets
Retirement costs for meeting asset retirement obligations
Total deferred tax liabilities
Net deferred tax assets(2,240) million yen(230) million yen(161) million yen(152) million yen(2,785) million yen
209 million yen- 102 -

Notes Regarding Transactions with Related Parties
1. Parent company(In millions of yen)
Type

Parentcompany

Name ofcompany,etc.

AEONCO., LTD.

Percentage
of votingrights held
Holds
Direct50.8%
Indirect
0.2%

Relationship

Deposits forinvestment

Summary oftransactions
Deposits forinvestment

Transaction
amountAccount

Balanceat end ofperiod6,716

Deposits
paid tosubsidiaries
andassociates

5,000

0

-

-

(Note)

Receipt ofinterest(Note)

Transaction terms and policy for determination of transaction terms, etc.
Note: The transaction amount of deposits for investment indicates the average balance between February 2024, when the basic
contract on deposits for consumption was concluded, and March 2024. The interest rate is calculated reasonably, taking
TIBOR into account.

2. Subsidiaries(In millions of yen)Type

Name ofcompany,etc.

Percentage
of votingrights held

Relationship

Summary oftransactions

Transaction
amountWelparkCo., Ltd.

Holds
Direct84.2%

CMS
Concurrent
officers

Interest
expenses

0

SAVIA
Corporation

Holds
Direct100%

CMS
Concurrent
officers

Interest
expenses0

Subsidiary

Account
Short-termborrowings
fromsubsidiaries
andassociates
Short-termborrowings
fromsubsidiaries
andassociates

Balanceat end ofperiod

4,228

2,117

Transaction terms and policy for determination of transaction terms, etc.
Notes:
1. CMS refers to the Cash Management System consisting of short-term loan transactions for the purpose of efficient fundmanagement and procurement within the Group. Interest pertaining to these transactions is decided with reference to market
interest rates.
2. Transaction amounts do not include consumption taxes, etc.

3. Sister company(In millions of yen)Type

Name ofcompany,
etc.

Subsidiaryof theparentcompany

AEON
Financial
ServiceCo., Ltd.

Percentage
of votingrights held

Relationship

Summary oftransactions

Transaction
amountAccount

Balanceat end ofperiod-Outsourcingof credit andelectronicmoney
services

Fees forcredit andelectronicmoney
services

570

Accounts
receivabletrade

3,498(Note)
Transaction terms and policy for determination of transaction terms, etc.
Fees are determined in the same way as general terms and conditions.

- 103 -

Notes Regarding Per Share Information
Net assets per share
937.58 yen
Profit per share
30.56 yen
Notes Regarding Significant Subsequent Events
Notes are omitted as the same information is included in the Notes Regarding Significant Subsequent Events in
the Notes to the Consolidated Financial Statements.

- 104 -

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

-1-

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

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

2. Place:

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

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

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

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

-3-

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

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



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



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



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

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



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

Internet connection fees should be borne by the shareholder.



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

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



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

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



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



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

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

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

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

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

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

2.

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

3.

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

4.

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

Notice of live streaming and pre-submitted questions
1.

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

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

2.

About receiving pre-submitted questions-6-

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

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

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

The shareholder number-7-

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

Election of Six (6) Directors

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

Name

Position at the Company

Attendance at the Boardof Directors meeting

1Motohiro Fujita

Re-appointed

President and Representative
Director

100.0%(12/12)2

Masaharu Homma

Re-appointed

Vice President andRepresentative Director

100.0%(12/12)

3

Motoya Okada

Re-appointed

Director and Advisor

100.0%(12/12)

4

Shigekazu Torikai

Director

100.0%(12/12)

5

Naoko Makino

Director

100.0%(12/12)

6

Shinobu Okamoto

Corporate Auditor

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

-8-

No.

Name
(Date of birth)

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

1

Motohiro Fujita(July 11, 1955)
Re-appointed

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

-9-

Number ofshares of theCompany held

142,900

No.

Name(Date of birth)

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

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

- 10 -

Number ofshares of theCompany held

12,550

0

No.

Name
(Date of birth)

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

4

5

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

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

- 11 -

Number ofshares of theCompany held

0

0

No.

Name
(Date of birth)

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

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

6

Number ofshares of theCompany held

0

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

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

- 13 -

Proposal 2:

Election of One (1) Corporate Auditor

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

Satoshi Mitsui

Attendance at the Board of
Directors meeting

Attendance at Audit &Supervisory Board
meeting——

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

- 14 -

Name(Date of birth)

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

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

Number ofshares of theCompany held

0

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

- 15 -

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

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

MotoyaO k a d a●

Shigekazu
To rik a i●

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

●
●
●
●

●

●
●

●

●

●

●
●
●

●

●

●

●

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

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

- 17 -

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

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

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

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

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

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

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

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

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

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

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

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

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

- 29 -

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

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

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

② Initiatives for strengthening corporate governance

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

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

By fiscal year

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

Sixth Period(FY 2020)

Seventh Period(FY 2021)

Eighth Period(FY 2022)

Ninth Period(FY 2023)

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

691,981 million
yen6,536 million yen

690,498 million
yen
6,929 million yen

8,845 million yen

5,374 million yen

1,336 million yen

1,008 million yen

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

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

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

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

1,155.18 yen

1,180.56 yen

1,167.15 yen

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

- 32 -

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

Main business
content

Businessrelationship

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

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

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

④ Situation of important affiliated companies

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

Capital stock- 33 -

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

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

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

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

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

The Company

Manages the supermarket business

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

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

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

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

② Other businesses
Company nameCategory

Maruetsu-Kaihatsu CO., LTD.

Real estate business

Clover CO.,Ltd.

Product development business

Food Quality Management Center Co., Ltd.

Quality control and inspection services

Marno Co., Ltd.

Business outsourcing services

Asubiz Support Co., Ltd.

Human resources outsourcing services

Nippon Ryutsu Mirai Kyoiku Center Co., Ltd.

Education services

ESUO CORPORATION

Retail operations including cashier and store management- 34 -

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

Business location

Address

Head office

Chiyoda, Tokyo

Warabi office

Warabi, Saitama

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

The Maruetsu, Inc.

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

Kasumi Co., Ltd.

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

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

Number of employees

Supermarket business
Other businesses

7,121 employees(18,945 employees)

71 employees(1,768 employees)

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

The Joyo Bank, Ltd.

5,890 million yen

The Norinchukin Bank

4,020 million yen

Development Bank of Japan Inc.

4,000 million yen

Saitama Resona Bank, Ltd.

3,950 million yen

Shinkin Central Bank

3,000 million yen- 35 -

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

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

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

Number of shares held

Aeon Market Investment Inc.

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

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

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

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

Number of shares (shares)

Director

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

(For reference)- 36 -

Number of recipients (persons)

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

Name(Date of resolution)

First stock
Directoracquisition right(May 29, 2017)

Second stock
Directoracquisition right(May 21, 2018)

Third stock
Directoracquisition right(May 24, 2019)

Fourth stock
Directoracquisition right(May 20, 2020)

Fifth stock
Directoracquisition right(May 21, 2021)

Sixth stock
Directoracquisition right(May 20, 2022)

Seventh stock
Directoracquisition right

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

Exercise price(per share)

113,800 yen

1 yen

June 27, 2017 toJune 26, 2047

138,600 yen

1 yen

June 11, 2018 toJune 10, 2048

89,200 yen

1 yen

June 10, 2019 toJune 9, 2049

106,300 yen

1 yen

101,600 yen

1 yen

98,600 yen

1 yen

103,100 yen

1 yen

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

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

116 units

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

Subsidiary
Director

Name(Date of resolution)

Seventh stockacquisition right(May 19, 2023)

Number ofrecipientsand units

Type and number ofshares targeted

8 personsCommon shares:

107 units

10,700 shares

Issue price(per unit)

Exercise
price(per share)

103,100 yen

1 yen

Exercise period
June 19, 2023 toJune 18, 2053

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

- 37 -

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

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

- 38 -

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

Type

Monthly Compensation

Monthly
compensation

Basic
compensationRole-based
compensation

Annual performancecompensation (reflected
monthly)

EquityCompensation

Restricted stock compensation(RS)

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

Performancelinked

Deliverable

Fixed

EvaluationTarget－Monetary
Shortterm

Performance
Linked
Stock

New
share

ReservationrightsMediumto longterm

②

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

Fixed
compensation

Performance-linked compensation

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

Stock-based
compensation (SO)

Restricted stockcompensation
(RS)

45

40

10

5

45

40

10

5

50

35

10

5

55

30

10

5

Managing Director

58

27

10

5

Concurrent Director

60

25

10

5

Total (%)

100

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

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

- 40 -

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

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

Total amountofcompensation(million yen)

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

Restrictedcompensation

stock

Numberexecutives
involved(persons)

66

41

12

10

7

18

18

－

－

3

Outside Directors

23

23

－

－

4

Outside Corporate Auditors

11

11

－

－

4

of

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

- 41 -

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

Date of retirement
May 19, 2023

Reason for
retirement

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

Director of the Company
Akira Terakawa

May 19, 2023

Term

Representative Director and Senior Executive Vice

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

Masami Sakamoto May 19, 2023
Koichi Ihara

May 19, 2023

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

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

New position

Motohiro Fujita Chairman of Kasumi Co., Ltd.

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

Director at Kasumi Co., Ltd.,

Representative Director andShinichiro

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

Yamamoto

Management Strategy Division at

Head of Digital Division at the

the Company

Company

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

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

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

Date of change
March 1, 2024

March 1, 2024

April 1, 2024

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

- 42 -

April 1, 2024

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

Name

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

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

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

- 44 -

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

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

- 45 -

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

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

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

- 47 -

③ Future Proposals (Report to the Board of Directors)

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

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

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

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

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

- 52 -

Consolidated financial statements- 53 -

Consolidated Balance Sheet(as of February 29, 2024)

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

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

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

6,111
14,05455,364

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

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

Other
Allowance for doubtful accounts

1,104
△43

Intangible fixed assets

Goodwill
Other

Investments and other assets

Total assets

285,505(In millions of yen)

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

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

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

Amounts

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

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

- 55 -

401

379
6,929

545

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

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

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

Capital surplus

10,000104,323

Retainedearnings
39,272

Treasury stock

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

1,008

1,008

1

△1

△1

52

54

－

1

△1,04551△992

10,000104,325

38,226△3,522

149,029- 56 -

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

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

△241

△226

Total net assets

226△2,053

Net income attributable toowners of parent

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

150,022

1,008
△1
54
△110

1,337

1,227

△6

1,221

△110

1,337

1,227

△6

228

△95

1,095

1,000

220

150,250- 57 -

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

- 58 -

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

- 59 -

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

- 60 -

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

- 61 -

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

Type ofshares

Source ofdividends

Total
dividends (inmillions ofyen)

Dividend pershare (yen)Record date

Effective dateCommonsharesRetainedearnings

1,026

8.00

February 28, 2023

May 2, 2023

CommonsharesRetainedearnings

1,026

8.00

August 31, 2023

October 16, 2023

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

Type ofshares

Source ofdividends

Dividend pershare (yen)Record date

Effective date

Board ofDirectors,
April 9, 2024

Total dividends(in millions ofyen)

CommonsharesRetainedearnings

1,026

8.00

February 29, 2024

May 9, 2024

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

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

- 63 -

(2) Matters related to the market prices, etc. of financial instruments
The amounts recognized in the Consolidated Balance Sheet, market prices, and differences between the
two are as listed below. Shares and other instruments without market prices are not in the table below(Please see the notes). Notes are omitted for cash, and they are also omitted for deposits, accounts
receivable-trade, and accounts receivable-other, bills payable and accounts payable, short-term borrowings,
and accrued corporate taxes, etc. because their market prices are very close to their book value as they aresettled in a short period of time.
(In millions of yen)Amounts
recognized in theMarket prices
Differences
Consolidated
Balance Sheet① Investment securities②

Other securities

975

Guarantee deposits

30,313

Allowance for doubtful accounts (*1)

975－

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

44,42543,495△929△8

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

- 64 -

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

Category
Shares in affiliated companies
Unlisted shares

1,153

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

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

Market prices (in millions of yen)
Level 1

Level 2

Level 3

Total

Investment securities
Other securities
Shares

975

－

－

975

Total assets

975

－

－

975

②

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

Guarantee deposits

Market prices (in millions of yen)
Level 1

Level 2
29,054－

Level 1

Total－

29,054

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

- 65 -

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

- 66 -

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

Market prices atthe end of thecurrent
consolidated
fiscal year

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

- 67 -

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

Category
Sale of merchandise (sales)

690,498

Other (operating revenue)

5,720

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

1,862

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

1,168.73 yen
7.85 yen
7.84 yen

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

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

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

Amounts(In millions of yen)

Items

7,898
2,106
4

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

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

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

147,650
127,126

Total assets

160,479

38
3,643
3
3,257
382
0

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

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

Total net assets
Total liabilities and net assets

126,770
160,479

20,300223- 69 -

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

Items

Amounts

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

7,589
337
4,579

70
5
109
52

- 70 -

4,917
2,672

75

161
2,586
2,586
6
2,580

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

Shareholders’ equity
Capital surplus

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

Capital surplus

10,000

Other capital surplus

2,500

Total capitalsuyplus114,813

117,313

1

1

－

－

1

1

10,0002,500

114,815

117,315- 71 -

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

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

2,229

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

226

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

△1

△1

△1

52

54

54
△6

△6

526

526

51

580

△6

574

2,756

2,756

△3,522

126,549220

126,770- 72 -

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

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

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

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

3,311,059 shares- 74 -

903 million yen
5 million yen
71 million yen

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

Parentcompany

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

Aeon Co., Ltd.

Owned bythe parent
Direct:53.7％
Indirect:52.4％

Relationsh
ip with thepersons
concerned

Holding
offices
concurrent
ly

Details oftransactions

Amountoftransacti
ons

Sales
commissions

782

Deposit offunds

10,000Recovery of
funds

7,000

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

430

Other
(current
liabilities)

3,000

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

- 75 -

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

Subsidiary

Subsidiary

Subsidiary

Name ofcompanies, etc.

The Maruetsu,
Inc.

Kasumi Co.,
Ltd.

Percentage
of votingrights, etc.
owned

Relationshipwith thepersons
concerned

Business
administratio
Ownershipn
Direct: 100.0％
Holding
offices
concurrently

Business
administratio
Ownershipn
Direct: 100.0％
Holding
offices
concurrently

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

Details oftransactions

AmountoftransactionsManagement
fee

999

Loan of funds(Note)

7,500

Receipt ofinterest

44

Management
fee

850

Loan of funds(Note)

2,000

Receipt ofinterest

11

Loan of funds(Note)

6,500

Collection of
funds

7,050

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

Other(current
liabilities)

Loan of funds(Note)－ Long-term

Collection of
funds

200

Receipt ofinterest

14loans foraffiliatedcompanies
Other(current
liabilities)

－
233

4,000

－

1,300

1,300

1

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

985.82 yen
20.10 yen
20.7 yen

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