(TRANSLATION ONLY)
Securities Code: 2651
May 2, 2022
To All Shareholders with Voting Rights
Sadanobu Takemasu
President, Representative Director
Lawson, Inc.
11-2, Osaki 1-chome, Shinagawa-ku, TokyoNOTICE OF THE 47th ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are cordially notified that the 47th Ordinary General Meeting of Shareholders will be held as follows.
If you do not attend the meeting, please exercise your voting rights using either of the methods described below after
reading the attached REFERENCE DOCUMENTS FOR THE GENERAL MEETING OF SHAREHOLDERS.
[Voting in Writing (by Mail)]
Please indicate your approval or disapproval of the matters to be resolved on the Voting Rights Exercise Form
enclosed herewith and return it so that it reaches us by 5:45 p.m. on Tuesday, May 24, 2022.
[Voting by Electronic Means (Internet, etc.)]
Please exercise your voting rights by 5:45 p.m. on Tuesday, May 24, 2022, after reading the attached document“Exercising Voting Rights via the Internet, etc.”
1. Date and Time: 10:00 a.m., Wednesday, May 25, 2022
2. Venue: Hall C, Tokyo International Forum, 5-1 Marunouchi 3-chome, Chiyoda-ku, Tokyo
3. Objectives of the Meeting
Reports:
The Business Report, the Consolidated Financial Statements and the Nonconsolidated Financial Statements for the
47th Fiscal Term (from March 1, 2021, to February 28, 2022), and the related Audit Reports
Matters to Be Resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Partial Amendment to the Articles of Incorporation
Proposal No. 3: Election of Five (5) Directors•••

If you attend in person, please present the enclosed Voting Rights Exercise Form at the reception desk on arrival at the meeting.
You do not need to enter your approval or disapproval in the Voting Rights Exercise Form if you will attend.
If you wish to exercise your voting rights by proxy, your proxy is requested to present a document evidencing his/her proxy,such as a power of attorney, together with the Voting Rights Exercise Form in the proxy’s own name at the reception desk. (Thequalified proxy is limited to one shareholder having voting rights for this meeting as per the relevant provision in the Articles
of Incorporation.)
Please note that we will not provide souvenirs for shareholders attending the General Meeting of Shareholders.

(TRANSLATION ONLY)

BUSINESS REPORT(March 1, 2021 through February 28, 2022)
I. CURRENT STATUS OF THE CORPORATE GROUP
1. Summary of Operations(1) Business Developments and Results of Operations
During the fiscal year under review, or fiscal 2021 ended February 28, 2022, we continued to take rigorous
prevention measures against the infection of the novel coronavirus and responded to new normal demand byexerting concerted Group-wide efforts. Specifically, under the leadership of our Lawson Group Sweeping
Transformation Executive Committee, which was launched in September 2020 to realize “Challenge 2025”
formulated for 2025, the 50th anniversary of our establishment, we renovated our stores and revamped our
product lineups in Domestic Convenience Store Business in response to changes in the business environment,
and the whole Lawson Group endeavored to resolve medium to long-term issues for sustainable growth, acquire
new revenue opportunities and foster job satisfaction.
As a result, for fiscal 2021 on a consolidated basis, gross operating revenue increased to 698,371 million yen(up 4.9% from previous fiscal year), operating income increased to 47,096 million yen (up 15.2% from previous
fiscal year) and ordinary income increased to 47,571 million yen (up 26.5% from previous fiscal year). Profit
attributable to owners of parent increased to 17,900 million yen (up 106.0% from previous fiscal year).
We also focused on improving our group-wide internal control system and addressing operating risks basedon the 2021 Basic Policy for Improvement of Internal Control Systems. We will continue promoting internal
control going forward.
In addition, with a view to promoting the Sustainable Development Goals (SDGs) and focusing on
environmental, social and governance (ESG) practices in management, we established the Lawson Group
Human Rights Policy and Lawson Group Sustainability Policy in June and August 2021, respectively, andrevised the Lawson Group Environmental Policy in August.
Operating results by business segment were as follows.
(Domestic Convenience Store Business)
During the fiscal year under review, the number of new COVID-19 cases increased, resulting in a state of
emergency or quasi-emergency being declared in many prefectures, while vaccinations by municipalities andworkplaces progressed. During the first half of the fiscal year, legal and voluntary restrictions were imposedon a variety of social activities, but in the second half, new infection cases started decreasing in October 2021,
leading to the nationwide lifting of the state of emergency or quasi-emergency, an easing of restrictions onsocial activities, and a recovery trend in the movement of people. However, in January 2022, the movement ofpeople started showing a decreasing trend again due to the rapid spread of the Omicron variant.
Under such circumstances, Lawson has been proceeding with store renovations in line with the businessenvironment surrounding each store, helping them expand their merchandise assortment of frozen foods andother daily necessities to adapt to changes in customers’ lifestyles and better address customer needs. We
renovated 2,636 stores in the fourth quarter, completing the refurbishment of 4,305 stores by the end of the
fiscal year. Installation of the Machikado Chubo in-store kitchen service at stores also progressed, with 8,359
stores equipped with the service as of the end of February 2022.
In store operation, we are striving to establish LAWSON stores as convenience stores endorsed by all ourcustomers. To this end, we are implementing measures to achieve our three commitments, namely, to pursue
compelling taste, to be considerate to people, and to be environmentally friendly. In addition to further
strengthening our distinctive products that focus on taste and health, we are also working to provide heartfelt
customer service in our stores, and to strictly address environmental concerns such as reducing food loss,
plastic usage, and CO2 emissions, etc. We adopted an AI-based system that prompts stores to make timely
discounts by providing reminders as part of our efforts to reduce food loss, conducted a pilot experiment on
optimizing store delivery routes by using AI to reduce CO2 emissions, and started selling food by weight at
NATURAL LAWSON stores to reduce plastic.
[Store Operations]
In store operations, we continued to focus on reinforcing adherence to the Three Essential Practices, whichemphasizes (1) serving customers courteously; (2) offering a merchandise assortment focused on basic itemswith high demand; and (3) keeping our stores and communities clean. In our efforts to respond to customer
needs and increase sales, we also focused on expanding our merchandise assortment to respond to changes in
consumer lifestyles and values. Furthermore, we kept up our initiatives to increase the profitability of franchise1

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stores, including helping them streamline their store operation and reduce costs associated with food waste andutility expenses.
[Merchandising and Service Strategies]
Sales continued to surge in fresh foods, frozen foods, daily delivered foods, room temperature
Japanese/Western desserts, and alcoholic beverages, whose assortments we have been endeavoring to expand
with the aim of supporting the daily lives of customers. In the frozen food range, sales strengthened as aresult of expanding our merchandise assortment in phases from November 2021 by developing
groundbreaking items such as frozen dessert, as well as capturing customer needs for stocking up on
ingredients and ready-made dishes. In the rice range, our “Korega BENTO” box lunch series, which wasrevamped into a long-lasting chilled range in March 2021, continued to record steady sales throughout the
fiscal year under review, and our “Kinshari Onigiri Rice Ball” series also enjoyed robust sales along with themodified regular lineup of onigiri rice balls. Our original products consecutively became huge hits,
exemplified by “Nama Gateau Chocolat,” our new dessert product, and “Pari Chiki,” our new fast-foodcounter item, launched in September and October 2021, respectively. Partly owing to customers having fewer
opportunities to go out, the Machikado Chubo in-store kitchen service enjoyed especially strong demand foritems its products with established popularity including the “Thick-Sliced Sangenton Pork Cutlet Sandwich,”
and items offered in collaboration with food service companies that provide delicious dishes from specialty
restaurants as well as the “Local Bowl” Series that responds to regional needs.
Regarding food delivery services, we started offering “Demae-can” in February 2022 in addition to the five
services we already provide including Uber Eats, which was provided by Lawson for the first time in theconvenience store sector. As a result, the combined number of stores listed on food delivery services reached2,903 in 45 prefectures as of February 28, 2022. In addition, Uber Eats delivers over-the-counter (OTC)
drugs sold at 71 LAWSON stores in 14 prefectures.

[Breakdown of Sales by Merchandise Category at Chain Stores in Domestic Convenience Store Business]
Sales
Percentage of total
Year on Year
Product group(millions of yen)(%)(%)
Processed foods
103.0
1,190,886
53.9
Fast foods

480,260

21.7

103.8

Daily delivered foods

343,668

15.5

100.0

Nonfood products

197,166

8.9

97.2

Total

2,211,981

100.0

102.1

[Store Development]
In opening new stores, the Group continued to focus on developing profitable stores.
During the fiscal year under review, the total number of LAWSON, NATURAL LAWSON and LAWSONSTORE100 stores opened in Japan stood at 483 stores. Meanwhile, we closed a total of 303. As of the end of
February 2022, the total number of domestic stores was 14,656 *1. Based on the joint business agreement
concluded with POPLAR Co., Ltd. in September 2020, we converted 122 stores from its brand to the
LAWSON POPLAR or LAWSON brand stores from this year. Based on the comprehensive business allianceentered into with H2O Retailing Corporation in May 2021, Lawson converted 97 station stores andconvenience stores operated by asnas Co., Ltd., an H2O Retailing Corporation Group company, from “asnas”
stores into LAWSON stores.
In an effort to establish convenience store models catered to an aging population and a trend toward selftreatment, we are building partnerships with dispensing pharmacy and drug store chains to operate
healthcare-oriented LAWSON stores that offer over-the-counter pharmaceuticals and prescription drugs, aswell as a wider assortment of cosmetics and daily necessities than conventional LAWSON stores. The
number of stores offering non-prescription drugs has reached 280 stores (includes 49 pharmacy LAWSON
stores equipped with drug-dispensing pharmacies) as of the end of February 2022. Moreover, the number ofstores offering nursing care consultation services has reached 22 as of the end of February 2022.
Furthermore, we have also been expanding our chain of “in-hospital LAWSON stores,” which featurestrengthened focus on medical, sanitary, nursing and rehabilitation supplies in addition to merchandise andservices offered at standard convenience stores. The number of such stores has reached 337 as of the end of
February 2022. Building on our expertise developed through operation of in-hospital LAWSON stores, wewill continue to support the lives of all people interacting with hospitals.
Our NATURAL LAWSON stores, which are popular particularly among female customers for supporting
their beauty, health, and comfortable lifestyles, marked their 20th anniversary in July 2021. NATURAL

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(TRANSLATION ONLY)LAWSON stores offer an exclusive selection of finely picked items of value, including food made withhealthy ingredients and environmentally friendly detergents and cosmetics. Meanwhile, our LAWSONSTORE100 stores offer high quality, safe and reliable fruits and vegetables with a focus on freshness anddaily necessities, supporting customers’ daily dietary lives by helping them plan their meals. The stores are
visited by customers of all ages including children and the elderly, and particularly single people andhomemakers. As of the end of February 2022, we operate 136 NATURAL LAWSON stores and 669
LAWSON STORE100 stores.
*1 The numbers of store openings and closings and total number of stores in Japan include stores operatedby Lawson, Inc. and three equity-method affiliates, Lawson Kochi, Inc., Lawson Minamikyushu, Inc. and
Lawson Okinawa, Inc.
[Change in Total Number of Domestic Stores]
Total stores as ofFebruary 28, 2021
LAWSON

Change during fiscal
year

Total stores as ofFebruary 28, 2022

13,654

197

13,851

NATURAL LAWSON

143

(7)

136

LAWSON STORE100

679

(10)

669

14,476180

14,656Total

As a result, Domestic Convenience Store Business posted gross operating revenue of 424,567 million yen(up 0.5% from previous fiscal year) and segment profit of 28,396 million yen (down 1.2% from previous fiscal
year).
(Seijo Ishii Business)
Seijo Ishii provides customers with well-selected, safe, and reliable foods under its philosophy of “Quality
food for a quality life.” Operating diverse store formats including street-side stores and stores in stationbuildings and commercial facilities, the supermarket chain leverages its distinguished product development
expertise to offer original products and food items made in-house under the Seijo Ishii brand. The number of
directly operated Seijo Ishii stores reached 169 as of the end of February 2022. Until the end of the first half ofthe fiscal year, street-side stores, which captured the demand that would have been fulfilled by supermarkets
had it not been for the intermittent declarations of states of emergency. In the second half of the fiscal year,
after the state of emergency was lifted in October 2021, sales growth slowed mainly at street-side storesprimarily due to a decrease in demand from stay-at-home customers. Product wise, dishes produced in-houseat our central kitchen continued to enjoy robust sales driven by a range of measures. We will continue striving
to elevate the brand power of Seijo Ishii by promoting the sustainable development of products of value,
effective promotional campaigns, and publicity activities as a manufacturing retailer eager to send messagesout to consumers.
As a result, Seijo Ishii Business posted gross operating revenue of 108,632 million yen (up 5.4% fromprevious fiscal year) and segment profit of 11,240 million yen (up 8.8% from previous fiscal year).

(Entertainment-related Business)
In our Entertainment-related Business undertaken by Lawson Entertainment, Inc., a large number of eventswere postponed, cancelled or restricted in terms of the number of admissions in the first half of the fiscal year
as a result of the declaration of states of emergency and quasi-emergency. In the second half, however, as thestates of emergency and quasi-emergency were lifted in October 2021, concerts began to be staged, which led
to a recovery trend. In January 2022, a state of quasi-emergency was issued in response to the spread of theOmicron variant, adversely affecting our business environment by forcing us to cancel the scheduled sale of
Go To Eat coupons and restricting the number of admission tickets for popular live events. Notwithstanding
this situation, the ticket transaction value continued to display a recovery trend as a result of our concentrated
efforts to secure an expanded lineup of concerts and sporting events. We are also continuing with our efforts
to expand ticket transactions for online live performances, a fledgling market, while striving to further expand
sales for our steady e-commerce business by putting our live commerce into full swing. In our product sales
business, a total of 55 stores are in operation nationwide as of February 28, 2022. Stores are making efforts to3

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expand earnings through a range of measures including organizing store events and selling goods at concert
venues.
In the first half of the fiscal year, United Cinemas Co., Ltd., an operator of cinema complexes, had been
affected by the states of emergency and quasi-emergency in applicable regions, such as having to reduce
seating capacity and adopt shorter operating hours, but in the second half, almost all theaters resumed theirusual operating hours from October 2021, although business hours were shortened at cinemas in someregions after a state of quasi-emergency was declared in January 2022. Furthermore, the company has
continued with its efforts to increase the number of visitors, such as by rolling out contents-based initiatives.
As of February 28, 2022, 42 cinema complexes nationwide with 387 screens are operating.
As a result, Entertainment-related Business posted gross operating revenue of 62,996 million yen (up 8.8%
from previous fiscal year) and segment profit of 2,275 million yen (segment loss was 297 million yen inprevious fiscal year).
(Financial Services Business)
With respect to our Financial Services Business, we worked to expand our network of financial institution
partners and improve the Lawson Bank ATM service in our foundational ATM business. As of the end of
February 2022, the number of ATMs installed nationwide reached 13,547 (up 89 from previous fiscal year) ,with each ATM used 48.4 times a day on average. The total number of our financial institution partners
reached 378 nationwide (up 249 from the previous fiscal year) with the addition of shinkin banks in April
2021. As of the end of February 2022, the “smartphone ATM (QR code deposit/withdrawal)”*2 service and“Immediate Account Settlement Service,”*3 had five partners and 12 partners (nine financial institutions andthree other service operators), respectively. In addition to the conventional needs to withdraw cash, the useof our ATMs has been increasing, driven by the “ATM charge service,” where cash can be charged at an ATM
to “au PAY,” “WebMoney Prepaid Card,” or “PayPay” mobile payment apps. Regarding LAWSON Ponta
Plus credit cards issued by Lawson Bank, Inc, we are steadily expanding credit card membership by rollingout a range of promotional campaigns and strengthening promotional efforts at stores.
*2 A service where customers can deposit/withdraw cash or take out/repay a credit card loan at an ATM
by using a smartphone app instead of a bank card.
*3 A service that allows customers to top up their mobile payment app from their account with a financial
institution by harnessing the ATM network.
As a result, Financial Services Business posted gross operating revenue of 33,603 million yen (up 6.4%
from previous fiscal year) and segment profit of 2,962 million yen (up 69.0% from previous fiscal year).
(Overseas Business)
With regards to Overseas Business, the Group’s operating companies opened LAWSON stores in the
People’s Republic of China, Thailand, Indonesia, the Philippines, and the United States of America (Hawaii).
In the People’s Republic of China, where business is continuing to expand, the number of LAWSON
stores exceeded 4,000 in September 2021, reaching 4,560 as of the end of February, up 1,216 from the endof the previous fiscal year. In addition to opening new stores through our subsidiaries, we are also launching
stores by concluding mega franchise agreements with local retailers in different cities, as well as area
license agreements—where partner companies serve as headquarters in designated areas and assume overall
operation and development—in efforts to accelerate the expansion of business areas and the number ofstores.
Chongqing Lawson, Inc. and Guangdong Lawson, Inc. agreed to acquire 100% of the shares of Sichuan
WOWO Supermarket Chain Management Co., Ltd. in December 2021 and Tianhong Weiwo Convenience
Store (Shenzhen) Co., Ltd. in January 2022, respectively. As a result, we are seeing an expansion of ourstore network in China and an increased recognition of Lawson in the country, which has led to rises in thenumber of franchised store applicants, franchised store openings, and directly operated stores converting tofranchise stores. We will work to offer our signature high-quality original products including rice anddessert items, enhance the value of the Lawson brand in China, and increase earnings.
In other regions of the world, although some stores have suspended their operations in response to the
spread of COVID-19, all other stores are carrying out normal operations with rigorous infection prevention
measures in place, sustaining the daily lives of our customers as their most accessible store.

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(TRANSLATION ONLY)[Distribution of Lawson Brand Stores Overseas by Region]
Number of stores(as of February 28,
2021)

Change during
fiscal year

Number of stores(as of February 28,
2022)

1,826

523

2,349

341

148

489

327

134

461

China Beijing and surrounding area
(Beijing, Tianjin, Hebei)

215

128

343

China Hubei (Wuhan, etc.)

441

85

526

China Anhui (Hefei, etc.)

106

69

175

China Hunan (Changsha, etc.)

65

52

117

China Hainan (Haikou, etc.)

23

77

100

Thailand

140

26

166

Indonesia

68

(3)

65

Philippines

67

2

69

United States of America Hawaii

2

－

2

3,621

1,241

4,862

Country/Region
China Shanghai and surrounding area
(Shanghai, Zhejiang, Jiangsu)
China Chongqing and surrounding area
(Chongqing, Sichuan)
China Liaoning (Shenyang, Dalian)

Total

As a result, Overseas Business posted gross operating revenue of 80,039 million yen (up 30.5% fromprevious fiscal year) and segment profit of 2,342 million yen (up 189.4% from previous fiscal year).

(Measures to pursue Sustainable Development Goals (SDGs))
With the aim of achieving a sustainable society through Lawson’s business activities based on our
corporate philosophy, “Creating Happiness and Harmony in Our Communities,” we established the SDGs
Committee effective March 1, 2019. We are making Group-wide efforts led by our SDGs Committee to
conduct individual initiatives that solve social issues through our business activities. Furthermore, on March
1, 2021 the position of Chief Sustainability Officer (CSO) was assumed by the president and CEO andrepresentative director to further strengthen our initiatives.
Specifically, we identified issues having significant impacts on the environment, society and economy
across our business activities including our value chains, identified social issues that should be prioritized,
and uphold them as our six material issues (materiality).
Lawson’s “Six Material Issues”
1. Providing safety/security-oriented overwhelmingly high value-added products and services friendly tosociety and the environment
2. Supporting health promotion for all people through products and stores
3. Providing comfortable work environment leading to job satisfaction
4. Supporting women, senior people as well as children’s growth
5. Coexisting synergistically with communities by serving as part of social infrastructure
6. Sustainable environment preservation activities toward carbon-free society
We are especially making focused efforts on addressing our sixth material issue, “sustainable environment
preservation activities toward carbon-free society,” by setting social and environmental key performanceindicators (KPIs) as Goals for 2030 in three areas: (1) reducing CO2 emissions; (2) reducing food waste;and (3) reducing plastic use (for containers, packaging and shopping bags). Furthermore, toward Lawson’s
Vision 2050, we are taking on difficult challenges to achieve high goals so that we can create a carbon-freesociety and contribute more to the ideal world that the SDGs aim to realize. To fulfill Lawson’s Vision 2050,
we are looking back on what we have done so far and examining and discussing what we should do now tosteadily proceed with our material issues and KPIs for 2030.

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(TRANSLATION ONLY)
Issues

KPIs for 2030

KPIs for 2050

Reducing CO2 emissions

CO2 emissions per store
Reduce by 50% over 2013
(Target revised upward in June
2021)

Reduce by 100%

Reducing food waste

Reduce by 50% over 2018

Reduce by 100%

Reducing plastic use(for containers and packaging)

Reduce by 30% over 2017(50% of materials used for
Lawson’s original productcontainers and packaging areeco-friendly)(100% of materials used for
Lawson’s original productcontainers and packaging areeco-friendly)

Reducing plastic use(Plastic shopping bags)

Plastic shopping bags
Reduce by 100%―

To reduce CO2 emissions, we will start using solar-derived renewable energy in the fiscal year ending
February 2023 at approximately 3,600 stores in the Kanto Koshinetsu region and Gifu, Shizuoka, Aichi andMie prefectures in collaboration with Mitsubishi Corporation. This will lead to an annual CO2 emissions
reduction of about 19,000 tons. Moreover, Lawson, Inc. endorsed the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD) in April 2020. To combat worsening climate change issues,
we analyze climate-related risks and opportunities and have been disclosing the results on our official website
since December 2020. We will identify impact on our business strategies, examine measures to take, andendeavor to proactively disclose information.
To reduce food waste, we strive to optimize the number of purchases and offer discounts at stores to sellout all stock by utilizing AI, and reduce unsold leftovers by selling special feature items on a reservationbasis. In addition, we also seek to develop more bento box lunches and ready-made dishes with longer shelf
lives and expand our frozen foods lineup, while reducing waste by introducing the Machikado Chubo instore kitchen service at more stores.
To reduce plastic use, we have replaced the plastic cups used for iced coffee and café latte offered at“MACHI café” with paper cups. We started using paper containers for our bento box lunches and cooked
noodles, and have adopted thinner plastics and environmentally friendly materials. At about 10 NATURALLAWSON and LAWSON stores, we sell detergents and dried fruit and nuts by weight, and are looking to
expand this sales format. In July 2021, we embarked on a pilot experiment at a store in Yokohama City
with the aim of promoting the recycling of used plastic bottles in partnerships with Kirin Holdings
Company, Limited and Kirin Beverage Company, Limited by using their infrastructure. Furthermore, timed
with the enforcement of the Plastic Resource Circulation Act in April 2022, we will start introducing inphases from April 1 shorter plastic spoons and forks with an opening in the handle, which is expected toreduce plastic by approximately 67 tons.
Additionally, we implemented the following initiatives during the fiscal year under review in relation to
SDGs.
In the area of education for children, we continued with our scholarship program for children fromsingle-parent families, selecting 400 students to receive scholarships in fiscal 2021. Furthermore, in thesecond half of the fiscal year, we offered special in-hospital classes for children at university hospitals inthree prefectures.
Since August 2019, Lawson has periodically donated original dessert products and processed foods thatmissed their store delivery deadlines (but were still well within their best-before dates) to the Japan Food
Bank Promotion Group and Kodomo Takushoku Oendan, a charity organization that delivers food tochildren. The donated products are delivered to various bodies across Japan, which then provide them tofamilies who need food aid, children’s cafeterias, orphanages, facilities for people with disabilities, etc. In
fiscal 2021, we donated a total of some 270,000 items (about 30 tons) of food products, including Lawson’s
original items and national-label products developed exclusively for Lawson.
While working to take protective measures against the spread of COVID-19 at our stores, we have also
conducted various initiatives to support people who are forced to persevere amid difficult situations in their

6

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day-to-day lives. In our efforts to support medical professionals and care managers, we offered acomplimentary s-size MACHI café coffee to each registered member of a website dedicated to medical
professionals and a website dedicated to care managers in May/June and August 2021, respectively. In
December 2021, we presented a gift of some 900 Christmas cakes to students and other people in need ofsupport amid the pandemic, as well as 282 sets of New Year’s osechi meals to 846 medical professionals
and children requiring support. Furthermore, December 31 and January 1, 2022, we sold “Hot Milk” at 65
yen including tax, half the regular price, to raise demand for milk, which had been suffering a delayed
recovery in demand owing to the pandemic and reduced consumption due to schools closing for the winterholiday when no lunches are served. The initiative was extremely popular. We intend to continue providing
support to people who are negatively affected by the spread of COVID-19.
(2) Capital Expenditures
Capital expenditures of the Group during the fiscal year under review totaled 44,991 million yen, of which
33,263 million yen was primarily for store facility investment in buildings, and 8,082 million yen was for the
upgrading of information systems.
(3) Changes in Operating Results and Financial Position① Changes in Operating Results and Financial Position of the Corporate Group
Fiscal 2018
Fiscal 2019
Fiscal 2020
Category/Fiscal Term
44th Term
45th Term
46th Term
Gross operating revenue
700,647
730,236
666,001(millions of yen)
Ordinary income (millions of yen)
57,70056,346
37,610
Profit attributable to owners of parent(millions of yen)
Profit per share (yen)Fiscal 2021
47th Term
698,371
47,571

25,585

20,108

8,689

17,900255.71200.9586.84

178.87

Total assets (millions of yen)

1,342,329

1,357,732

1,365,430

1,337,245

Net assets (millions of yen)

281,982

275,347

272,931

278,473

Net assets per share (yen)2,763.54

2,707.08

2,674.53

2,726.97

Note: Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Statement No. 28;
February 16, 2018), etc. have been applied from the beginning of the fiscal year ended February 29, 2020 inpreparing the consolidated financial statements. The standards have been retrospectively applied to theconsolidated financial statements for the previous fiscal year.
② Changes in Operating Results and Financial Position of the Company
Fiscal 2018
Fiscal 2019
Category/Fiscal Term
44th Term
45th Term
Net sales of all convenience stores
2,236,125
2,296,156(millions of yen)
Gross operating revenue
385,678
390,811(millions of yen)
Ordinary income (millions of yen)
51,44345,962

Fiscal 2020
46th Term

Fiscal 2021
47th Term

2,165,818

2,211,981

354,825

355,10233,70034,278

Profit (millions of yen)

31,002

15,486

15,894

13,470

Profit per share (yen)309.85154.76158.84134.61

Total assets (millions of yen)

838,260

858,770

839,426

793,925

Net assets (millions of yen)

240,280

233,705

234,977

233,294

Net assets per share (yen)2,399.24

2,333.04

2,344.86

2,327.59

7

(TRANSLATION ONLY)(4) Priority Issues of the Group① Response to social issues
The Company promotes ESG-focused management, and the SDGs Committee is clarifying the items andissues to be addressed by the Lawson Group with the aim of ensuring that the Group can work toward resolving
issues. In particular, the Group is focused on promoting decarbonization activities, reducing food waste, andeliminating plastics in order to help bring about a sustainable society.
② Continue to ensure stable management of franchised stores
The Company recognizes that maintaining the stable management of franchised stores is an important issue. Based on
franchise store profit-focused management, we are developing a system in which our headquarters takes responsibility forproviding comprehensive support to franchise stores in response to soaring store expenses and labor shortages. In addition,
we will make the maximum use of digital technology to simplify store operation, increase efficiency, make working
environments more pleasant, and reduce labor needs to develop an environment that enables people of all ages andnationalities to work at our stores, while addressing issues faced by franchised stores such as the shortage of store crew.
Furthermore, we will implement short-term and medium- to long-term initiatives such as measures to stabilize management
by promoting the management of multiple franchised stores as well as measures to enable new franchised store owners tostart their business with peace of mind while addressing shortages of FC store owners stemming from the declining birthrate,
thereby building stronger partnerships with franchised stores.
③ Pursuit of an ideal store format with enhanced product appeal and product assortment
By setting out and thoroughly implementing the Three Lawson Promises of “Superior taste,” “Human kindness,” and“Environmental (Machi) friendliness,” we aim to further strengthen our product appeal and create stores that match thevarious lifestyles and needs of our customers. By promoting store renovations to pursue the ideal store format based on theabove, we strive to create stores that generate word-of-mouth recommendations by customers. In addition, in order to deeply
understand customer needs that vary by area and respond to such needs, we will shift to a system in which we formulate andimplement sales, product, and store development strategies in each area.
④ Take on challenges in future growth areas

We will continue to take on challenges to establish new business models in future growth areas not only inour domestic convenience store business, the core business of the Group, but also in various other fields such as
Seijo Ishii Business, Entertainment-related Business, Financial Services Business, and Overseas Business. We
will also work hard to make maximum use of each Group company’s distinctive features to generate synergistic
effects.
For such purposes, we will utilize advanced digital technologies as well as management resources such as real
stores and customer bases, etc. held by the Group.
⑤ Promote internal control systems and address operating risks

We believe that enhancing internal control across the Group as a whole and dealing with business risks are
absolutely necessary to develop our business on a continual basis. Proactive efforts in corporate governance asan enterprise listed on the prime market that will enable us to meet the expectations of all stakeholders involved
with our Group will help improve our corporate value. We will continue focusing our efforts on enhancing
internal control and addressing business risks.
The Company has a listed parent company (Mitsubishi Corporation) and, although we are publicly listed as aparent/subsidiary pair, we appoint one-third or more independent directors who have no conflict of interest withgeneral shareholders. In addition, a “Nomination and Compensation Advisory Committee” comprising only nonexecutive directors and non-fulltime outside Audit and Supervisory Board members, the majority of which are
independent executives, has been voluntarily established to deliberate on executive compensation and candidates
for representative director/director positions and to advise the Board of Directors, constituting a system able toensure the highest levels of management transparency and fairness.
We conduct business activities under our corporate philosophy, “Creating Happiness and Harmony in Our
Communities”. We continue to make companywide efforts to “master the basics”, “respond to changes” and“meet the challenge of further growth.”
We look forward to the continued support and encouragement of our shareholders.

8

(TRANSLATION ONLY)
2. Current Status at the End of February 2022
(1) Major Business Segments of the Corporate Group and Principal Offices(Domestic Convenience Store Business)① Lawson, Inc.
Major Business:
Primarily operates the Lawson-brand franchise system and undertakes management ofcompany-operated stores as the head office of LAWSON, NATURAL LAWSON and
LAWSON STORE100 convenience store chains.
Head Office:Shinagawa-ku, Tokyo
Principal Offices:
Hokkaido area office (Kita-ku, Sapporo), Tohoku area office (Aoba-ku, Sendai), Kanto
area office (Minato-ku, Tokyo), Chubu area office (Naka-ku, Nagoya), Kinki area
office (Suita city, Osaka), Chushikoku area office (Kita-ku, Okayama) and Kyushu
area office (Hakata-ku, Fukuoka)
Note: In addition to the above sites, the Company has 118 offices throughout Japan,
including branches.
② Lawson urbanworks, Inc.
Major Business:
Operates LAWSON stores mainly in Tokyo and Chiba prefectures.
Head Office:Shinagawa-ku, Tokyo③ Lawson Store100, Inc.
Major Business:
Operates LAWSON STORE100 stores, provides guidance, and engages inmerchandise-related businesses.
Head Office:Saiwai-ku, Kawasaki-shi, Kanagawa④ SCI, Inc.
Major Business:
Food wholesaler, including processed meats and frozen foods, and wholesaler ofpacking materials.
Head Office:Shinagawa-ku, Tokyo[Stores]Number ofstores675

IbarakiNumber ofstores217

Kyoto

Number ofstores329

Aomori

279

Tokyo

1,683

Shiga

154

Tokushima

135

Akita

182

Kanagawa

1,077

Nara

138

Kochi

138

Iwate

178

Shizuoka275

Wakayama

153

Fukuoka529

Miyagi

255

Yamanashi

137

Osaka

1,175

Saga

75

Yamagata

112

Nagano

174

Hyogo

698

Nagasaki

125

Fukushima

170

Aichi

717

Okayama

235

Oita

197

226

Gifu

181

Hiroshima

297

Kumamoto

161
109

Prefecture
Hokkaido

Niigata
Tochigi

Prefecture

Prefecture

Prefecture
Ehime

Number ofstores
212

197

Mie

136

Yamaguchi

127

Miyazaki

Gunma

244

Ishikawa

103

Tottori

136

Kagoshima

202

Saitama692

Toyama181

Shimane141

Okinawa

260

Chiba

Total (domestic)
600 Fukui
107 Kagawa
132
14,656
Note: These figures include stores operated by Lawson, Inc., and three equity-method affiliates, Lawson Kochi, Inc.,
Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.

9

(TRANSLATION ONLY)(Seijo Ishii Business)
SEIJO ISHII CO., LTD.
Major Business:
Operates a chain of small supermarkets that seeks to develop and manufacturehigh-value-added products.
Head Office:Setagaya-ku, Tokyo(Entertainment-related Business)① Lawson Entertainment, Inc.
Major Business:
Sells tickets for various events and music/video software inside LAWSON stores andothers.
Head Office:Shinagawa-ku, Tokyo② United Cinemas Co., Ltd.
Major Business:
Manages multiplex movie theaters
Head Office:Shinagawa-ku, Tokyo(Financial Services Business)
Lawson Bank, Inc.
Major Business:
Operates a banking business
Head Office:Shinagawa-ku, Tokyo(Overseas Business)① Lawson (China) Holdings, Inc.
Major Business:
Controls companies that operate overseas business in China.
Head Office:Shanghai, China② Shanghai Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Shanghai, China③ Shanghai Le Song Trading Co., Ltd.
Major Business:
Operates Company-operated convenience stores.
Head Office:Shanghai, China④ Shang Hai Gong Hui Trading Co., Ltd
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Shanghai, China⑤ Zhejiang Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Hangzhou, China⑥ Chongqing Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Chongqing, China⑦ Dalian Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Dalian, China⑧ Beijing Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Beijing, China⑨ BEIJING LUOSONG Co., Ltd.
Major Business:
Operates Company-operated convenience stores.
Head Office:Beijing, China⑩ Saha Lawson Co., Ltd.
Major Business:
Operates stores under the store brand of LAWSON 108 and 108SHOP.
Head Office:Bangkok, Thailand(Other Business)
・Consulting Business
BestPractice, Inc.
Major Business:
Head Office:Conducts surveys of convenience stores to give advice and make specific proposals
for the improvement of LAWSON stores.
Shinagawa-ku, Tokyo

10

(TRANSLATION ONLY)(2) Employees① Employees of the Corporate Group
Name of Business Segment

Number of Employees

Domestic Convenience Store Business

5,218

(156)

Seijo Ishii Business

1,294

77

Entertainment-related Business

1,152

(26)

Financial Services Business

169

4

Overseas Business

2,393

84

Other Business

136

(6)

10,362

(23)

Total

Year-on-Year Change

Note: Number of employees is full-time employees.
② Employees of the Company

Number of Employees

Year-on-Year Change

4,617

(135)

Average Age

Average Years of Service
41.3

14.3

Note: Number of employees is full-time employees.
(3) Major Lenders
Lenders

Amount Borrowed (millions of yen)

Syndicated loan

130,000

Mitsubishi Corporation Financial &Management Services (Japan) Ltd.

52,062

Mizuho Bank, Ltd

19,000Sumitomo Mitsui Banking Corporation

15,000(4) Parent Company and Significant Subsidiaries and Equity-method Associates① Parent Company
Capital Stock
Shareholding
Major Business
Parent Company(millions of yen)(%)

Mitsubishi Corporation

204,446

50.2•

Natural Gas, Industrial Materials,
Petroleum & Chemicals Solution,
Mineral Resources, Industrial
Infrastructure, Automotive &Mobility, Food Industry, Consumer
Industry, Power Solution, Urban
Development, etc.

Relationship with parent company
Mitsubishi Corporation, our parent company, holds 50,150,000 of our shares (50.2% of voting rights).
Mitsubishi Corporation provides guarantees for loans payable and engages in other transactions with the Lawson
Group.
• Information on transactions with the parent company:
a. Ensuring that engaging in these transactions is not harmful to our interests
We have entered into guarantee entrustment agreements with our parent company, and we have paid ourparent company guarantee fees for some of our loans payable based on these agreements. In conducting thesetransactions, we have established transaction conditions that compare with prevailing market prices, as we dofor general transactions.
b. Board of Directors’ assessment on whether these transactions are harmful to our interests, and grounds for thatassessment
Given the perspective in a. above, we solicit appropriate feedback on our management at Board of Directors’
meetings attended by outside directors and outside Audit and Supervisory Board members, with decisions madeafter multi-faceted discussions, and we have determined that such transactions are not harmful to our interests.
c. Views of outside directors if they differ from the Board of Directors’ assessment

11

(TRANSLATION ONLY)•

Not applicable.
The following outlines the agreements, etc. that the Company has concluded with its parent company with regard to
significant financial and business policies:
The Company resolved at its Board of Directors’ meeting held on September 16, 2016 to amend the business allianceagreement that the Company had concluded with Mitsubishi Corporation in February 2000 (including amendments
thereto; hereinafter, the “Original Business Alliance Agreement”) and on the same day concluded the businessalliance agreement (which came into effect on February 15, 2017).
a. Reason for amendment of the Original Business Alliance Agreement
The Company and Mitsubishi Corporation concluded that it was necessary to further strengthen their collaborationand further bolster the Company’s business foundation by enabling the Company to take even greater advantage of
Mitsubishi Corporation’s network and human resources for the benefit of the Company’s domestic convenience store
business, overseas convenience store business, and other peripheral businesses through making the Company aconsolidated subsidiary of Mitsubishi Corporation.
b. Details of amendments to the Original Business Alliance Agreement(a) The fields of business alliance will be as follows:(i) domestic convenience store business,(ii) overseas convenience store business,(iii) peripheral businesses, and(iv) other businesses separately agreed on by the companies;(b) Mitsubishi Corporation will implement the business alliance while respecting the Company’s management
independence and identity, as well as respecting the interests of the franchise stores, which constitute the essenceof the franchise business;(c) In order to effectively and substantially promote the business alliance, Mitsubishi Corporation will dispatch
personnel as necessary upon mutual consultation, and the Company will accept such dispatched personnel; and(d) The amended business alliance agreement will become effective on the settlement commencement date of thetender offer for shares of the Company’s common stock by Mitsubishi Corporation announced on September 16,
2016 and will remain effective until a time separately agreed to in writing by Mitsubishi Corporation and theCompany.

12

(TRANSLATION ONLY)② Significant Subsidiaries

Company Name

Capital Stock

Shareholding

Major Business
Domestic Convenience Store
100.0 %
Business
Domestic Convenience Store
100.0 %
Business
Domestic Convenience Store
100.0 %
Business

Lawson urbanworks, Inc.

10

million yen

Lawson Store100, Inc.

99

million yen

SCI, Inc.

10

million yen

SEIJO ISHII CO., LTD.

100

million yen

100.0 %

Seijo Ishii Business

Lawson Entertainment, Inc.

100

million yen

100.0 %

100

million yen

100.0 %

100

million yen

100.0 %

100

million yen

100.0 %

Lawson Bank, Inc.

11,600

million yen

95.0%Entertainmentrelated BusinessEntertainment-related
Business
Entertainment-related
Business
Entertainment-related
Business
Financial Services
Business

Lawson (China) Holdings, Inc.

3,359 million Chinese yuan

100.0 %

Overseas BusinessShanghai Lawson, Inc.

452 million Chinese yuan

100.0 %

Overseas BusinessShanghai Le Song Trading Co., Ltd.

0.1 million Chinese yuan

100.0 %

Overseas BusinessShang Hai Gong Hui Trading Co., Ltd.

0.3 million Chinese yuan

85.0 %

Overseas Business

Zhejiang Lawson, Inc.

10 million Chinese yuan

100.0 %

Overseas Business

Chongqing Lawson, Inc.

240 million Chinese yuan

100.0 %

Overseas Business

Dalian Lawson, Inc.

66 million Chinese yuan

98.3 %

Overseas Business

Beijing Lawson, Inc.

284 million Chinese yuan

64.8 %

Overseas Business

BEIJING LUOSONG Co., Ltd.

0.1 million Chinese yuan

64.8 %

Overseas Business

Lawson HMV Entertainment United
Cinema Holdings, Inc.
United Entertainment Holdings
Co., Ltd.
United Cinemas Co., Ltd.

Saha Lawson Co., Ltd.

1,367

million baht

49.2 %

Overseas Business10

million yen

100.0 %

Consulting Business

BestPractice, Inc.

Notes:
1. Shareholding includes indirectly held shares.
③ Significant Equity-method Associates

Company Name
Lawson Okinawa, Inc.
Lawson Minamikyushu, Inc.
Lawson Kochi, Inc.

Capital Stock(millions of yen)
10
100
50

Shareholding
(%)
49.0
49.0
49.0

13

Major Business
Domestic Convenience Store Business
Domestic Convenience Store Business
Domestic Convenience Store Business

(TRANSLATION ONLY)
II. CURRENT STATUS OF THE COMPANY
1. Shares at the End of the Year
(1) Total Number of Shares Authorized to Be Issued:
409,300,000 shares(2) Total Number of Shares Issued and Outstanding:
100,300,000 shares(Including 228,807 shares of treasury shares)(3) Number of Unit (tangen) Shares:
100 shares(4) Number of Shareholders:
31,941(5) Top 10 Major Shareholders:Number of Shares Held(thousand shares)

Shareholding(%)

Mitsubishi Corporation

50,15050.1

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

7,176

7.2

Custody Bank of Japan, Ltd. (Trust account)

2,174

2.2

KDDI CORPORATION

2,110

2.1

NTT DOCOMO, INC.

2,092

2.1

Japan Securities Finance Co., Ltd.

1,522

1.5

STATE STREET BANK WEST CLIENT － TREATY 505234

1,456

1.5

Employee stockholding association

877

0.9

BNYM TREATY DTT 15

869

0.9

SMBC Nikko Securities Inc.

797

0.8

Shareholder’s Name

Notes:
1. The number of shares held in the above table is based on the register of shareholders.
2. The equity position in the above table is calculated after deducting treasury shares.

14

(TRANSLATION ONLY)
2. Status of Stock Acquisition Rights(1) Stock Acquisition Rights Held by Corporate Officers of the Company as of February 28, 2022
14th Stock
16th Stock
17th Stock
19th Stock
Acquisition
Acquisition
Acquisition
Acquisition
RightsRightsRightsRightsNumber of option holders and the number of stock acquisition rights (units)
1 person1 person1 person
3 persons
Directors (excluding(27 unit)(38 units)(62 units)(91 units)
Outside Directors)
0 person0 person1 person1 person
Outside Directors(5 units)(0 units)(0 units)(5 units)
Class and number ofCommon stock of Common stock of Common stock of Common stock ofshares subject to stock
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
acquisition rights
2,700
3,800
6,700
9,600
Amount of property
contributed upon the
1 yen
1 yen
1 yen
1 yen
exercise of the sharesubscription rights (pershare)
April 10, 2015
May 2, 2016
May 1, 2017
June 8, 2018
through March 24, through April 12,
through April 11,
through May 21,
Exercise period
2035
2036
2037
2038
Main exercise
Note 1
Note 1
Note 1
Note 1
conditions
21st Stock
20th Stock
22nd Stock
Acquisition
Acquisition
Acquisition
RightsRightsRightsNumber of option holders and the number of stock acquisition rights (units)
3 persons
3 persons
3 persons
Directors (excluding(141 units)(106 units)(175 units)
Outside Directors)
2 persons
2 persons
3 personsOutside Directors(10 units)(15 units)(10 units)
Class and number ofCommon stock of Common stock of Common stock ofshares subject to stock
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
acquisition rights
15,10011,60019,000
Amount of property
contributed upon the
1 yen
1 yen
1 yen
exercise of the sharesubscription rights (pershare)
June 7, 2019
June 12, 2020
June 11, 2021
through May 20,
through May 26,
through May 24,
Exercise period
2040
2039
2041
Main exercise
Note 1
Note 1
Note 1
conditions

15

(TRANSLATION ONLY)(2) Stock Acquisition Rights Issued during the Fiscal Year to Senior Vice Presidents of the Company as
Compensation for Performing Their Duties
22nd Stock
Acquisition
RightsNumber of SVPs andthe number of stock acquisition rights
11 persons
Senior Vice
(51 units)
Presidents
Class and number ofCommon stock ofshares subject to stock
Lawson, Inc.
acquisition rights
5,100
Amount of property
contributed upon the
1 yen
exercise of the sharesubscription rights (pershare)
June 11, 2021
through May 24,
Exercise period
2041
Main exercise
Note 1
conditions
Notes:
1. A stock acquisition rights holder may exercise his or her rights within the exercise period only fora period of 10 days from the day after losing his or her position as either director and/or executive
officer of the Company.
2. “Senior Vice Presidents” exclude those who concurrently serve as a member of the board.
The total number of shares subject to stock acquisition rights that remain unexercised as of February 28,
2022, is 86,000 shares, accounting for 0.09% of the total number of shares issued and outstanding.

16

(TRANSLATION ONLY)
3. Members of the Board and Corporate Auditors(1) Positions, Names and Assignments (As of February 28, 2022)
Position, Assignments and Important Concurrent Positions
Name
Note: Important concurrent positions of Outside Directors given later in (6) Outside
Directors and Outside Corporate Auditors
CSO
Sadanobu Takemasu President Representative
Director, Chairman of the Board
Katsuyuki Imada
Senior Executive Managing
Senior Executive Managing Officer,
Officer, Member of the Board- Corporate Strategy,- Human Resources,
Head Director, New Business Division,
Executive Assistant to Deputy CSO (CSR Promotion)
Satoshi Nakaniwa
Executive Vice President,
CFO
Member of the Board
Keiko Hayashi
Member of the Board
Miki Iwamura
Member of the Board
Satoko Suzuki
Member of the Board
Kiyotaka Kikuchi
Member of the Board
Executive Vice President, Group CEO, Consumer
Industry Group (Concurrently) Division COO, RetailDiv. Mitsubishi Corporation
Shuichi Imagawa
Audit and Supervisory Board
Member (full-time)
Jun Miyazaki
Audit and Supervisory Board
Member (full-time)
Eiko Tsujiyama
Audit and Supervisory Board
MemberYuko Gomi
Audit and Supervisory Board
MemberKeiko Yoshida
Audit and Supervisory Board
MemberNotes:
1. Three members of the Board (Keiko Hayashi, Miki Iwamura and Satoko Suzuki) are outside
directors as stipulated in Article 2, Item 15, of the Companies Act of Japan (the “CompaniesAct”).
2. Three auditors (Eiko Tsujiyama, Audit and Supervisory Board Member, Yuko Gomi, Audit andSupervisory Board Member and Keiko Yoshida, Audit and Supervisory Board Member) areoutside corporate auditors as stipulated in Article 2, Item 16, of the Companies Act.
3. Eiko Tsujiyama, Audit and Supervisory Board Member, has long-term experience as a university
professor in accounting and therefore has considerable expertise in finance and accounting.
Yuko Gomi, Audit and Supervisory Board Member, has a wealth of work experience of law and risk
management mainly in relation to the legal affairs of companies, based on her viewpoint of law as
a lawyer and her broad knowledge.
Keiko Yoshida, Audit and Supervisory Board Member, is a certified public accountant, serving as
the representative of an accounting firm, and therefore has considerable expertise in taxation,accounting and management.
4. The following personnel changes were approved at the board of corporate auditors’ meeting andthe 46th general meeting of shareholders held on May 25, 2021.
Appointment
Member of the Board
Kiyotaka Kikuchi
Audit and Supervisory Board
Jun Miyazaki(full-time)Member of the Board
Yutaka Kyoya
Resignation
Member of the Board
Kazunori Nishio
Audit and Supervisory Board
Masakatsu Gonai(full-time)

17

(TRANSLATION ONLY)[Reference] Members of the Boards and Senior Vice Presidents(Excluding Non-Executive Directors) (As of March 1, 2022)
Name
Sadanobu Takemasu

Yuichi Wada
Motonobu Miyake

President, Representative
Director, Chairman of the
Board
Executive Vice President,
Member of the Board
Senior Executive Managing
Officer
Executive Managing Officer
Executive Managing Officer

Hitoshi Fujii
Akihito Watanabe

Executive Managing Officer
Executive Vice President

Tatsushi Sato
Hiroyuki Karasawa
Tatsuya Murase
Suguru Kawabata

Executive Vice President
Executive Vice President
Executive Vice President
Executive Vice President

Kazuhiro Wakui
Yasuhiko Hirokane
Toshihiko Chihiro

Executive Vice President
Senior Vice President
Senior Vice President

Satoshi Kumagai
Miwako Tate
Takeji Hino

Senior Vice President
Senior Vice President
Senior Vice President

Tomoki Takanishi
Katsuaki Sakai

Senior Vice President
Senior Vice President

Gyo Katsuta
Noboru Kakiuchi

Senior Vice President
Senior Vice President

Hiroyuki Oki
Hiroko Otani

Senior Vice President
Senior Vice President

Satoshi Nakaniwa
Masakatsu Gonai

Position and Major Title
CSO

CFO
Chief Risk Officer,
Division Director of Franchisee Business Support Division
Company President of Kinki Company
Company President of China Company,
General Manager of Lawson (China) Holdings, Inc.
Division Director of Merchandising Division
Lawson Entertainment, Inc., United Cinemas Co., Ltd. President
and Representative Director
Division Director of IT Systems Solution Division
Division Director of Corporate Strategy and Planning Division
Division Director of Store Sales Division
Division Director of Corporate Sales and Store Development
Division
Merchandising Division Deputy Director
Company President of Hokkaido Company
SEIJO ISHII CO., LTD. Member of the Board, Senior Executive
Vice President (Temporary Transfer)
Company President of Financial Services Company
Communication Division Director
Human Resources Division Director and LAWSONWILL, Inc
President and Representative Director
Financial Administration Division Director
Company President of Incubation Company,
General Manager of Open Innovation Center
Division Director of Marketing Strategy DivisionCorporate Sales and Store Development Division Deputy
Director
Store Sales Division Deputy Director
General Manager of CS Promotion Office18

(TRANSLATION ONLY)(2) Outline of Liability Limitation Agreements
The Company has entered into agreements with its directors (excluding persons who are executive directors,etc.) and corporate auditors to limit their liability with regard to the damages outlined under Article 423,
Paragraph 1 of the Companies Act, whereby their liability shall be, at a maximum, the total sum of the amounts
set forth in the respective relevant items of Article 425, Paragraph 1 of the Companies Act. The
aforementioned liability limitation is valid only in cases where the said director or corporate auditor has
performed duties which resulted in a cause of such liability in good faith without committing acts of grossnegligence.
(3) Outline of Indemnity Agreements
The Company has entered into indemnity agreements prescribed under Article 430-2, Paragraph 1 of theCompanies Act with its directors (Sadanobu Takemasu, Katsuyuki Imada, Satoshi Nakaniwa, Keiko Hayashi,
Miki Iwamura, Satoko Suzuki, and Kiyotaka Kikuchi) and corporate auditors (Shuichi Imagawa, Jun
Miyazaki, Eiko Tsujiyama, Yuko Gomi, and Keiko Yoshida), whereby the Company shall indemnify the
expenses set forth in item (i) of the said Paragraph and the losses set forth in item (ii) of the said Paragraphwithin the limits prescribed by laws and regulations.
In addition, the Company takes measures to prevent the impairment of appropriate execution of duties by
the Company’s officers by not providing compensation in cases where loss is attributable to bad faith or grossnegligence in the execution of duties, or in cases where there is a reason that exempts the insurance provider
from payment as stipulated in the directors and officers (D&O) liability insurance agreements concluded
between the Company and the insurer and by setting a certain amount as a deductible for losses per event.
(4) Outline of Directors and Officers (D&O) Liability Insurance Agreements
The Company has entered into directors and officers (D&O) liability insurance agreements prescribed under
Article 430-3, Paragraph 1 of the Companies Act with an insurance provider, whereby litigation expenses anddamages arising from compensation payments to be borne by the insured shall be covered by the said insurance
agreements. The insured under the directors and officers (D&O) liability insurance agreements shall bedirectors, corporate auditors, executive officers, etc. of the Company and its subsidiaries, and all insurance
premiums for the insured shall be borne by the Company. In addition, the Company takes measures to preventthe impairment of appropriate execution of duties by the Company’s officers by ensuring that the said
insurance shall not be applied in cases where loss is attributable to bad faith or gross negligence in theexecution of duties by the insured, or in cases where there is a reason that exempts the insurance provider
from payment as stipulated in the said agreements.
(5) Amounts of Remuneration Paid to Directors and Corporate Auditors
Remuneration paid to officers

Category

Directors(Including Outside Directors)
Outside Directors
Corporate Auditors(Including Outside
Corporate Auditors)
Outside Corporate Auditors
Total

Total Compensation Paid by Type
Total
(millions of yen)Compensation
Paid
Fixed
VariableStock(millions ofcompensationcompensation
Optionsyen)

Number of
Corresponding
Directors andCorporate
Auditors

258

135

53

69

9

35

30

－

5

3

84

84

－

－

6

36
342

36
219

－
53

－
69

3
15

(6) Policy on Decisions Concerning the Amount of Remuneration Paid to Directors
The Company resolved the following policy on decisions concerning the amount of remuneration paid to directors at
its Board of Directors’ meeting held on December 15, 2021.
① Basic policy on decisions concerning the amount of remuneration paid to directors

Regarding the amount of remuneration paid to directors, it is the Company’s basic policy to design the
remuneration system in close correlation with shareholder returns while ensuring that it will function
sufficiently as an incentive for the enhancement of corporate value, sustainable growth and improvement ofoperating performance, and reward each director with a sufficient and adequate amount of compensation for

19

(TRANSLATION ONLY)
the execution of their duties.
② Decision-making process for the amount of remuneration paid to directors

In order to enhance management transparency and fairness, the amount of remuneration paid to theCompany’s directors is determined through the following processes:
i The limit on the amount of remuneration paid to directors is resolved at the general meeting ofshareholders following the decision by the Board of Directors based on consultation with andrecommendations of the Nomination and Compensation Committee.
ii Directors’ remuneration system and calculation rules are determined by the Board of Directors basedon consultation with and recommendations of the Nomination and Compensation Committee. The standard
remuneration amount commensurate with the position is determined by the President of the Company basedon consultation with and recommendations of the Nomination and Compensation Committee.
iii With regard to the amount of remuneration for each year, in accordance with the calculation rules, theamount of remuneration paid to individual directors is calculated based on the standard remuneration, taking
into account the Company’s financial performance, etc., and qualitative assessment. The total amount of
remuneration is determined at the board of directors’ meeting based on consultation with and therecommendations of the Nomination and Compensation Committee, and the amount of remuneration paid toindividual directors is determined by Sadanobu Takemasu, President, Representative Director, as entrusted by
the board of directors. The Company has delegated the above authority to the President because it believes
that a decision by the President is the most appropriate way to determine the amount of remuneration from acomprehensive perspective, taking into account the business environment and business performance of theCompany and the execution of duties by each Executive Director. The amount of remuneration paid toindividual directors is determined by the President of the Company based on consultation with andrecommendations of the Nomination and Compensation Committee in order to ensure transparency andfairness as well as the appropriate execution of delegated authority.
As the amount of remuneration paid to individual directors for the current fiscal year was determined inaccordance with these procedures, the Board of Directors has determined that the decision is in line with thebasic policy.
Members of the Nomination and Compensation Committee:
Consisting exclusively of non-executive directors and outside audit & supervisory board members (part-time)(6 independent directors out of 7 members)
Director
Kiyotaka Kikuchi
Outside Director
Keiko Hayashi(Vice Committee Chairperson)
Outside Director
Miki Iwamura
Outside Director
Satoko Suzuki
Yuko Gomi
Eiko Tsujiyama
Outside Corporate
Outside Corporate(Committee
Chairperson)
Auditor
AuditorKeiko Yoshida
Outside Corporate
Auditor③ Details of remuneration paid to directors

Remuneration paid to the Company’s directors is composed of basic compensation through monthly cash
payments during the term of office and stock price-linked compensation through the granting of stock options.

[Basic compensation]
Basic compensation of directors is composed of fixed compensation with fixed monthly payments andvariable compensation, which fluctuates in response to the Company’s financial performance for each period.
• Fixed compensation (60% of the total)
The amount of fixed compensation commensurate with the position is determined based on standards
stipulated by internal rules.
• Variable compensation (40% of the total)
In order to link the remuneration of directors with shareholder returns, the Company has adopted acompensation system that is linked to the Company’s financial performance. Variable compensation is paidin accordance with the degree to which targets for EPS (earnings per share) and SDGs targets (CO2
reduction rate, etc.). As a result of the review of some KPIs in the 47th term, KPIs will be determined basedon the percentage of budget achievement for “EPS” and “SDGs targets (CO2 reduction rate, etc.)”. The EPS
targets are aimed at better sharing value with shareholders and linking this to the Company’s operating
results, while the SDGs targets are aimed at achieving the Company’s environmental vision of “Lawson
Blue Challenge 2050!”((1) reducing CO2 emissions; (2) reducing food waste; and (3) reducing plastic use

20

(TRANSLATION ONLY)(for containers, packaging and shopping bags)). The amount of variable compensation is determined basedon the above by adding a qualitative assessment (10%) through the interview with the Nomination andCompensation Committee.
Regarding 4 non-executive directors, Keiko Hayashi, Miki Iwamura, Satoko Suzuki, and Kiyotaka
Kikuchi, variable compensation is not applicable as they are focused on their supervisory and advisory roles
as the Company’s representative directors and in the board of directors meetings.
[Targets and results concerning variable compensation for the current fiscal year (March 2021 through February 2022)]

March 2020 through February
2021
KPI

Reasons for selecting indicators

Ratio
Targets

Results

EPS

20%

49.96 yen

86.84 yen

To link compensation with theCompany’s financial performance andthereby create a shared interest withshareholders

Year-on-year increase
in total price mark-up(gross profit) at existing
stores10%100.9%

91.6%

To increase franchise store profits

Note: The variable compensation for the current fiscal year is calculated based on the financial results for the previous fiscal year
ended February 2021.

[Stock price-linked compensation]
Stock options as stock-based compensation
By incorporating stock options as stock-based compensation linked with stock prices as part ofcompensation paid to directors, the Company has a system in which management shares with stockholders
the benefits from a rise in stock price as well as the risks associated with a price decline. The Company
positions stock options as compensation that is linked to medium to long-term improvement of its corporate
value.
Exercise price on stock options as stock-based compensation is 1 yen per share and the amount of units
granted is determined in accordance with the position of directors. In addition, stock options as stock-based
compensation can be exercised only during designated periods after retirement from office; directors are notallowed to exercise their stock option rights during their term in office.
[Targets and results concerning stock options as stock-based compensation for the current fiscal year
(March 2021 through February 2022)]

March 2020 through February 2021
KPI

EPS

Targets

Results

49.96 yen

86.84 yen

Note: The stock options as stock-based compensation for the current fiscal year are calculated based on thefinancial results for the previous fiscal year ended February 2021.
④ Limit on the amount of remuneration paid to directors

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(TRANSLATION ONLY)
The limit on the amount of remuneration paid to the Company’s directors is determined at the general meetingof shareholders in accordance with laws and regulations.
• Amount of remuneration paid to directors
Resolutions at the general meeting of shareholders as of May 24, 2001: 400 million yen or less per year
Number of directors: 20• Amount of stock options granted to directors
Resolutions at the general meeting of shareholders as of May 27, 2014: 300 million yen or less per year
Number of directors: 9(7) Policy on Decisions Concerning the Amount of Remuneration Paid to Corporate Auditors① Basic policy on decisions concerning the amount of remuneration paid to corporate auditors
Regarding the amount of remuneration paid to corporate auditors, it is the Company’s basic policy to reward
each corporate auditor with a sufficient and adequate amount of compensation for the execution of their duties.
② Decision-making process for the amount of remuneration paid to corporate auditors
The amount of remuneration paid to corporate auditors is determined based on discussions among corporate
auditors and is within the remuneration amount limit resolved at the general meeting of shareholders.
③ Details of remuneration paid to corporate auditors
The Company’s corporate auditors receive basic compensation (fixed compensation) in cash.
The amount of basic compensation is decided based on discussions among corporate auditors, taking into
consideration whether or not they are working on a full-time basis, and segregation of auditing duties. Regarding
retirement benefits, the system itself was abolished.
④ Limit of the amount of remuneration paid to corporate auditors
The limit of the amount of remuneration paid to the Company’s corporate auditors is determined at the general
meeting of shareholders in accordance with laws and regulations.
Amount of remuneration paid to corporate auditors
Resolutions at the general meeting of shareholders as of May 27, 2020: 100 million yen or less per year
Number of corporate auditors: 5

22

(TRANSLATION ONLY)(8) Outside Directors and Outside Corporate Auditors① Relationship between Major Positions Concurrently Held and the Company
Position in the
Company

Outside Director(Independent)

Name

Keiko
HayashiPosition Concurrently Held

Details

Relationship between
the Company andCompany Where
Position Concurrently
Held

DoCLASSE the Store, Co., Ltd.
DoCLASSE Co., Ltd.

President and CEO
President and CEO
President and CEO
President and CEO
President and CEO－

IMA Holdings
fitfit Co., Ltd.
IMA People Co., Ltd.

Vice President, AsiaPacific, Japan(Marketing)

Google Japan LLC
Outside Director(Independent)

Outside Director(Independent)

Miki
IwamuraSatokoSuzukiThe University of Tokyo

Executive Vice President

Hitotsubashi University
Business School
School of International
Corporate Strategy

Associate Professor

Waseda University
Outside Corporate
Eiko
AuditorTsujiyama(Independent)

NTT DOCOMO, INC.

T.Kunihiro & Co. Attorneys-at-Law

Outside Corporate
Auditor
Yuko Gomi(Independent)

Outside Corporate
Auditor(Independent)

Keiko
Yoshida－－NTT DOCOMO, INC.,
for which Eiko Tsujiyama
serves as an outside
director (Audit andEmeritus Professor
Supervisory Committee),is a large shareholder of
Outside director (Audit the Company, and has aand Supervisorybusiness relationship with
Committee)
the Company in thetelecommunications fieldunder an extensive
business allianceagreement.
Partner

NIPPON GAS CO., LTD.

Outside corporate
auditor

ALPS ALPINE CO., LTD.

Outside director
Audit and supervisorycommittee member

Shiba Kaikei Jimusho

Representative

Passlogy Co., Ltd.

Outside director－－

Note: If there is an empty space in the column “Relationship between the Company and company Where
Position Concurrently Held,” it means that the Company has no important business or other relationshipwith that company.

23

(TRANSLATION ONLY)② Major Activities during the Year

Position in the
Company

Name

Outside Director(Independent)

Keiko Hayashi

Outside Director(Independent)

Miki Iwamura

Outside Director(Independent)

Satoko Suzuki

OutsideCorporate Auditor(Independent)

Eiko Tsujiyama

OutsideCorporate Auditor(Independent)

Yuko Gomi

Outside Corporate
Auditor(Independent)

Outline of activities, provision ofcomments, and duties performed in linewith expected roles

Keiko Yoshida

Ms. Hayashi attended all 15 board of directors’ meetings held
throughout the year during her term in office and, as a management
executive, appropriately questioned and/or remarked based on her
abundant knowledge. Ms. Hayashi is also a vice chairperson of theCompany’s Nomination and Compensation Committee.
Ms. Iwamura attended all 15 board of directors’ meetings held
throughout the year during her term in office, and as an executive Vice
President of a global IT company, appropriately questioned and/or
remarked based on a wealth of her experience and knowledge. Ms.
Iwamura is also a member of the Company’s Nomination andCompensation Committee.
Ms. Suzuki attended all 15 board of directors’ meetings held
throughout the year during her term in office and, as an academic,
appropriately questioned and/or expressed opinions based on her
extensive knowledge of consumption behavior, marketing and brandmanagement. Ms. Suzuki is also a member of the Company’s
Nomination and Compensation Committee.
Ms. Tsujiyama attended all 15 board of directors’ meetings and all 16
board of corporate auditors’ meetings held during the year andappropriately questioned and/or remarked based on her deep
knowledge of accounting as an emeritus professor in this field. Ms.
Tsujiyama is also a chairperson of the Company’s Nomination andCompensation Committee.
Ms. Gomi attended all 15 board of directors’ meetings and all 16 boardof corporate auditors’ meetings held during the year and, as a lawyer,
appropriately questioned and/or remarked based on her viewpoint of
law as a lawyer and her broad knowledge. Ms. Gomi is also a memberof the Company’s Nomination and Compensation Committee.
Ms. Yoshida attended all 15 board of directors’ meetings and all 16
board of corporate auditors’ meetings held throughout the year during
her term in office and, as a certified public accountant, appropriately
questioned and/or expressed opinions based on her expertise intaxation, accounting and management. Ms. Yoshida is also a memberof the Company’s Nomination and Compensation Committee.

24

(TRANSLATION ONLY)
4. Independent Auditor(1) Independent Auditor
Deloitte Touche Tohmatsu LLC(2) Amounts of Remunerations, etc., to be Paid to the Independent Auditor
1) Remuneration to be paid by the Company to the independent auditor

197 million yen

Sum of money and other property benefits to be paid by the Company and its
317 million yen
subsidiaries to the independent auditor
Notes:
1. The audit agreement entered into by the independent auditor and the Company does not clearly
distinguish the amount for the audit under the Companies Act and for the audit under the Financial
Instruments and Exchange Act, and the two amounts cannot be substantially distinguished from eachother. Therefore, the amount in 1) above indicates the total for the two audits.
2. As a result of confirmation and consideration of the content of the audit plan, former audits and actual
remuneration paid in the past, and the basis for calculating remuneration estimates, etc. as well as the
progress of discussions with accounting auditors, etc. in light of the Practical Guidance on
Collaboration with Accounting Auditors issued by the Japan Audit and Supervisory Board Members
Association, the Board of Corporate Auditors gave its consent with regard to the remuneration of
accounting auditors pursuant to Article 399, Paragraph 1 of the Companies Act.
3. Ten of the important subsidiaries of Lawson overseas are subject to audit by an independent auditor
other than Lawson’s independent auditor.
2)(3) Details of Services Other Than Audit
The Company pays fees to Deloitte Touche Tohmatsu LLC for the “provision of information and advice concerning theapplication of the new accounting standards,” which is a service other than the services prescribed in Article 2, Paragraph 1of the Certified Public Accountants Act.

(4) Policy on Decisions Concerning Dismissal or Nonreappointment of the Independent Auditor
If the independent auditor violates or infringes the Companies Act, the Certified Public Accountant Act, orother laws or regulations, or the Company considers it necessary to do so, the board of directors shall, after
obtaining the agreement of the Board of Corporate Auditors, submit a proposal for dismissal or
nonreappointment of the independent auditor to a general meeting of shareholders. In addition, the board ofcorporate auditors can dismiss the independent auditor with a unanimous resolution if it determines that any act
or circumstance of the independent auditor falls under any items of Article 340, Paragraph 1, of the Companies
Act.

25

(TRANSLATION ONLY)
III. SYSTEMS AND POLICIES OF THE COMPANY
1. Determination of Resolution of Systems to Ensure the Propriety of Business Operations
Based on improvements and the operation of the preceding “2020 Basic Policy for Improvement of Internal
Control Systems,” which was approved at the board of directors’ meeting held on February 17, 2021, the Company
passed a resolution called the “2021 Basic Policy for Improvement of Internal Control Systems,” as indicatedbelow.
(1) Systems to Ensure Compliance of the Execution of Duties by Directors and Employees with Laws
and Regulations and the Articles of Incorporation① The board of directors shall determine the improvement policies and plans for internal control systems, including thosefor compliance with laws, regulations and the like (“Compliance”), and receive status reports thereof periodically.
② The board of directors shall maintain and improve the supervising function regarding the execution of duties by the
directors by electing outside Directors on an ongoing basis.
③ The corporate auditors shall independently audit the execution of duties by the directors, including the status concerning
the improvement of the internal control systems.
④ The board of directors shall maintain and raise the awareness of officers and employees regarding compliance bythoroughly disseminating the Group Code of Conduct and the Lawson Ethical Mission Statement by such measuresas, including, but not limited to, appointing a Chief Compliance Officer, establishing a department to oversee
compliance, assigning personnel in charge of compliance at each department, streamlining the rules in relation tocompliance, and providing periodic training on ethics and awareness surveys on compliance.
⑤ The Legal Affairs Department shall be reinforced to fortify foundations for complying with legal requirements byidentifying the laws and regulations applicable to the Company’s businesses and communicating the content thereof
to the relevant departments and sections. Especially for compliance with the Act on Prohibition of Private
Monopolization and Maintenance of Fair Trade, Subcontract Act, Act Against Unjustifiable Premiums and Misleading
Representations and other consumer-related laws, the Intellectual Property Act, the Labor Standards Act, etc., theCompany shall strive to disseminate information about applicable laws and regulations to employees.
⑥ The Internal Audit Department, which is independent from the business executing bodies, shall conduct efficient andeffective audits of the status concerning the improvement of the internal control systems, and recommend
improvements thereof, as required.
⑦ The Company shall establish and upgrade normal reporting routes for reporting any violations of laws, regulations orinternal rules, and by establishing consulting and reporting point (internal contact points, a group-wide consulting
contact point and a consulting contact point for employees and business counterparties for Lawson’s franchised stores)that fully protect informants, the Company shall strive for early detection of violation or possible violation of laws,
regulations, etc. across the entire Lawson chain. If a violation of laws, regulations or internal rules is discovered, theCompany shall act promptly to rectify the situation and prevent recurrences.
⑧ The Company shall never become involved with antisocial forces or bodies that threaten the order and security of society,and shall take a firm stance on, and deal with, improper demands by consulting with lawyers the police and the like.
⑨ The Company shall rotate personnel periodically to prevent wrongdoings resulting from specific employees
monopolizing certain business processes.

(2) Systems to Preserve and Manage Information Pertaining to the Execution of Duties by Directors① The Company shall record, preserve and manage information relating to decision making at important

meetings such as those of the board of directors and the management council, and authorizing documents,
including those approved by the president and representative director, as well as financial, clerical and risk
and compliance-related information (including information contained in electromagnetic media). Moreover,
the Company shall put in place a system allowing relevant parties to inspect the above information.
② The Company shall manage and monitor its information systems in a secure manner, in addition tomaintaining the systems, by sufficiently taking into account contingencies.
③ The Company shall establish and maintain rules regarding the management of documents (including
electromagnetic recording media), keep everyone informed about the responsibility and authority for
document management, document storage periods and management methods, and periodically monitor the
status of document storage and management.
④ The Company shall establish and maintain rules regarding the protection of personal information and the
management of trade secrets, and appropriately and safely store and manage personal information andimportant trade secrets.
⑤ The Company shall establish and maintain an information security system for the Group by putting inplace a Chief Information Security Officer and a division that oversees information security with the aimof promoting information security in a consolidated and unified manner in view of both risk management
and system technology security.
⑥ The Company shall establish and maintain rules regarding the disclosure of important Company
information, and upgrade the system for disclosing information that must be disclosed according to therequirements of laws, regulations and stock exchanges, in an appropriate, timely and fair manner

26

(TRANSLATION ONLY)(3) Rules and Other Systems Regarding Risk Management① The Company shall establish a department to oversee risk management, improve rules related to risk management, and improve group-widerisk prevention systems during normal operations. Moreover, the Company shall respond according to the characteristics of risks by identifying
risks that might have adverse effects on the Company’s management in connection with its business purposes in each department, analyzing
the probability of such risk factors materializing and their impact, and evaluating whether intensive countermeasures should be taken.
② To ensure the effectiveness of risk management, the Company shall establish a specialist committee (“Compliance & Risk Management
Committee”) and clarify the authority and responsibility of the committee and its chairperson. Furthermore, the Company shall endeavor
to increase awareness about risk management by assigning risk management staff to departments and associated companies and conducting
risk management training.
③ The Company shall develop contingency systems and formulate policy for contingency response bodies in advance to prepare for the occurrenceor possible occurrence of unanticipated situations or events, which might have adverse effects on management of the Company, in order toprovide a quick response to any actual occurrence thereof and to take effective measures to prevent a reoccurrence.
④ The Company shall formulate a Business Continuity Plan (BCP) and a Business Continuity Management (BCM) system to minimize thebusiness interruption and maintain the lifeline function of convenience stores in the event of the occurrence of situations or events inflicting
substantial damage on the Company such as a large-scale natural disaster or an epidemic of an infectious disease including new-type influenza.
In order to be prepared for major earthquakes, the Company shall conduct disaster prevention drills three times a year while working to secure
effectiveness of the “Disaster Countermeasure Manuals” and the “BCP” system.

(4) Systems to Ensure the Efficient Execution of Duties by Directors① The Company shall clarify the functional authority and responsibility of corporate officers and employees for decision making

and execution of business affairs. The Company shall also improve rules for the division of duties to ensure and encourage
more appropriate division of duties and collaboration among organizational bodies.
② The Company shall work to raise operational efficiency by simplifying business processes, streamlining the organization andmaking appropriate use of IT.
③ The Company shall promote digital transformation (DX) through the renewal of IT infrastructure.
④ In order to promote the proper communication of information and communications between officers and employees, theCompany shall improve systems so that management guidelines and policies are disseminated to employees by corporate
officers and important field information is properly communicated by employees to corporate officers in a timely manner.
⑤ The Company shall seek to improve labor productivity by promoting work style reform.
(5) Systems to Ensure the Propriety of Business Operations Conducted by the Corporate Group Consisting of theCompany, Its Parent Company, and Its Subsidiaries① System for reporting to the Company on matters pertaining to the execution of duties by the subsidiary’s directors, etc., andsystem for ensuring that the subsidiary’s directors, etc., carry out their duties efficiently• The Company shall develop regulations to specify the management of subsidiaries and affiliated companies (“AssociatedCompanies”) and endeavor to maintain and enhance the Lawson brand through close collaboration with AssociatedCompanies. However, with regard to affiliated companies, the Company will work to appropriately establish and maintainsystems through phased implementation, taking into account such factors as relations with other leading shareholders
differences in laws, regulations and business customs and the like of foreign countries.
• While establishing a department that supervises the management system of Associated Companies and respecting theindependence of Associated Companies, in view of the purpose of the Company’s equity participation in AssociatedCompanies, the Company shall strengthen measures aimed at optimizing the management system of AssociatedCompanies by providing consultation and advice as required and establishing a reporting system from AssociatedCompanies.
② Regulations and other systems for risk management by the subsidiary, and system for ensuring that the subsidiary’s directors,
etc., and employees execute their duties in conformity with laws, ordinances, and the articles of incorporation• While respecting the independence of Associated Companies, in view of the purpose of the Company’s equity participationin Associated Companies, the Company shall strive to ensure that the Group Code of Conduct is widely disseminatedamong Associated Companies.
• By establishing an organization in charge of Associated Companies (responsible department, department in charge) as well
as a specialized department to support Associated Companies from a specialist perspective, the Company shall strive toensure the appropriateness of the operations of Associated Companies.
• The Company shall appoint designated persons at major Associated Companies to be responsible for promoting
compliance and risk management and promote communications between the Company and major subsidiaries with a viewto ensuring appropriate business operations across the entire Group.
• The Company shall develop a system in which immediate reporting is made by compliance managers of associatedcompanies in the event that they have identified any facts that may cause material damage to their companies.
• The Internal Audit Department shall cooperate in auditing the status of establishment of internal control systems at

Associated Companies and promote improvements based on the results of audits.
③ The Company shall develop a system in which the parent company is immediately notified in the event any facts that may causematerial damage to the Company and its associated companies have been identified.

27

(TRANSLATION ONLY)(6) Necessary Systems to Ensure Proper Financial Reporting by the Company and Its Group of Companies① The Company shall enhance systems for preparing financial statements according to laws, regulations, and accounting

standards and disclosing the same after they have been discussed, examined, and confirmed in accordance with regulations
governing information disclosure in order to report financial information in a proper and timely manner.
② The Company shall establish a dedicated internal organization in order to properly implement the internal control reporting
system required by the Financial Instruments and Exchange Act as an internal control for financial reporting. Furthermore,
the Company shall establish a system for self-evaluation and third-party evaluation and improvement through theidentification and recording of business processes at important business bases and the status of Company-wide internal
controls. The results of these evaluations of, and improvements at, the Company and important subsidiaries shall be regularly
reported to the board of directors.
(7) Matters Concerning Employees Where a Corporate Auditor Requests Employees to Assist with Duties① The Company shall assign appropriate personnel to the auditors’ office (“Corporate Auditors’ Staff”) as employees exclusively

to assist corporate auditors in the execution of their duties.
② Corporate Auditors’ Staff may serve concurrently as corporate auditors of Associated Companies.
③ Corporate Auditors’ Staff shall have the authority to conduct investigations necessary for audits by corporate auditors

following the instructions of corporate auditors.
(8) Independence of Employees from Directors in the Preceding Item
Performance reviews of Corporate Auditors’ Staff shall be conducted by the standing corporate auditors to ensure that Corporate
Auditors’ Staff carry out their duties appropriately. Personnel changes require the prior consent of the standing corporate auditors.
(9) Systems for Directors and Employees to Report to Corporate Auditors and Other Reporting Systems to the
Corporate Auditors① Directors and employees of the Company shall report important corporate management and business administration matters, aswell as the status and results of the execution of their duties, to corporate auditors so that the corporate auditors can carry out
their duties effectively. Such important matters include compliance- and risk-related issues and other matters relating tointernal control.
② If directors become aware of any fact or event that will likely cause the Company to suffer significant damage or loss, theyshall immediately inform the board of corporate auditors.
③ Reports to corporate auditors shall basically be made in good faith without fail, and shall be made promptly, if required, in
addition to periodic reports.
④ The Company shall develop a system in which the contents of consultations sought or reports made to the Independent
Whistleblower Hotline across the Group are reported to corporate auditors on a timely basis.
⑤ No person shall be subject to disadvantageous treatment by reason of having made a report to Corporate Auditors.
(10) Other Systems to Ensure Effective Audits by Corporate Auditors① The representative directors and corporate auditors shall have regular meetings to enhance smooth communications with eachother.
② Directors shall cooperate with the corporate auditors with regards to communications, the collection and exchange of

information and so on between the corporate auditors and the corporate directors and the like of Associated Companies so thatthe corporate auditors can perform their duties appropriately.
③ Directors shall also cooperate in conducting surveys of significant business partners, which the corporate auditors deem
necessary.
④ Directors shall enable the corporate auditors to collaborate with outside experts such as lawyers and certified public
accountants, if any corporate auditor deems it necessary in executing his/her duties.
⑤ The Legal Affairs, Risk Management, Internal Audit, and Finance and Accounting departments of the Company shall assist in
conducting necessary surveys for audits when requested by any corporate auditor.
⑥ Expenses etc. incurred by Corporate Auditors in the performance of their duties shall be promptly reimbursed, except in cases
where the Company has proven that they were unnecessary for said performance of duties.
2. Outline of Operational Status of Systems to Ensure the Propriety of Business Operations
The Company operates internal control systems in accordance with the aforementioned basic policy. Their operational status is as
outlined below.
(1) Compliance and Risk Management Systems① The Company strives to be a good corporate citizen able to act according to high ethical standards and with integrity andthoughtfulness by implementing the PDCA (Plan-Do-Check-Action) cycle while integrating its code of conduct, educationand training, communication function and monitoring activities in an organic manner.
② The Company has streamlined the Lawson Ethical Mission Statement. Along with that, The Company has established The
Group Code of Conduct as its code of conduct, published them in the “Lawson Group C&R Handbook,” and distributed

28

(TRANSLATION ONLY)
the handbook to all employees in an effort to thoroughly disseminate its content with the aim of ensuring the propriety ofbusiness operations across the Group.
③ In order to promote compliance and establish and promote the risk management system, the CR Executive Officer is appointed
as an executive officer, and the position of Compliance & Risk Management Officer (CRO) is established for each head office
and region. CROs monitor the progress of such measures and formulate, disseminate and implement compliance measures andrisk management measures of their own departments as leaders promoting such measures, in an effort to create a corporate
culture that emphasizes compliance with social norms and prevents the occurrence of risk events.
④ On the educational/training front, the Company aims to further improve ethical awareness and the ability to withstand crises
by conducting compliance and risk management training for all employees every year. In addition, the Company has
established an educational system to enable systematic learning by providing training upon joining the Group and upon
promotion to a managerial position, and training by job types and training conducted by external lecturers for company
management. The Company is seeking measures to ensure that employees of various job positions and job types will be able
to share problems to improve their operations by maintaining these educational/training programs while revising their content
in line with changing risk conditions.
⑤ With respect to whistleblowing reports, the Company has established a consultation contact point exclusively for sexual
harassment and power harassment, which is offered by the Human Resources Department, as well as an internal consultation
and reporting contact point for compliance and risk management matters. In addition, there is the Group Independent
Whistleblower Hotline to a law firm and other external organizations as well as an anonymous consultation contact point for
employees of the Company’s business counterparties and store staff and a consultation contact point for FC store owners. The
Company shall seek to strengthen self-rectification within the organization by treating instances of whistleblowing
appropriately, reviewing the system to prevent recurrence, and introducing specific cases at meetings and through training
programs and internal notifications.
⑥The Company has established the Legal Affairs Department that oversees compliance matters and the Risk and Information
Security Management Department that oversees risk management matters under the leadership of the CR Executive Officer.
The two departments work in collaboration and act as the secretariat of the cross-organizational Compliance & Risk
Management Committee Meeting and manage the progress of measures by each department, and thus promote an effective
compliance and risk management system. In addition, by working closely with the IT Department, the Risk and Information
Security Management Department acts as the secretariat of the Information Security Committee Meeting and further enhances
measures to manage information security risks. Meanwhile, five subcommittees (Food Safety and Hygiene Management
Subcommittee, BC Subcommittee, Regional Office Crime Prevention and Disaster Defense Subcommittee, Intellectual
Property and Premiums and Representations Subcommittee, and Overseas Business-Related Compliance Subcommittee) havebeen separately established under the Compliance & Risk Management Committee Meeting in an effort to manage the progressof key measures and prevent risks.
⑦ In terms of monitoring activities, the Company continuously conducts awareness surveys targeting all employees andquestionnaire surveys targeting the Company’s business partners with regard to matters such as product delivery and store
construction, and thus reviews and improves its compliance system from a broad perspective. In addition, the Company provides
thorough guidance and improvement proposals based on the results of audits conducted by the Internal Audit Department.
⑧ At principal affiliated companies, officers in charge of compliance and risk management (Affiliated Company Compliance
Officers; renamed Affiliated Company Compliance & Risk Management Officers in the second half of the current fiscal year)
are appointed and participate in the Affiliated Company Compliance Officers Meeting (renamed Lawson Group Compliance &Risk Management Meeting in the second half of the current fiscal year). Affiliated Company Compliance Officers (Company
Compliance and Risk Officers) strive to enhance awareness among employees by formulating the code of ethics and providing
training while conducting employee awareness surveys and questionnaire surveys for business counterparts in collaboration
with the Company. In addition, through the operational audits conducted on Associated Companies by the Company’s Internal
Audit Department and the liaison meetings for the Group’s corporate auditors organized by the Company’s corporate auditors,
etc., support have been offered to improve the compliance and risk management systems of the Group.
(2) Preparations against and Responses to Risks① The Company places particular emphasis on “food safety and hygiene management,” “information security” and “disaster
relief,” and it has prepared a structure for responding to emergencies and resolving problems rapidly. In normal times, theCompliance & Risk management meetings and five sub-committees are organized to assess risks and formulate and promoterisk prevention measures with the aim of preventing the occurrence of risk events. In the event of significant risk events,
the Emergency Risk Management Committee is convened in an effort to swiftly solve issues and minimize damage. Once theproblems have been resolved, the Company analyzes the factors contributing to their occurrence and reviews and improves
the relevant countermeasures to prevent any recurrence.
② With regard to the food safety and hygiene management system, we strictly enforce food safety and hygiene management in
the process of developing, manufacturing and selling original products. We use raw materials that have passed examination
based on our voluntary standards, and after the examination of product specifications, we take samples from the production
line to confirm their safety. At our original product manufacturing plants, we have adopted a factory management method
based on the HACCP concept, and we have established a system to record each priority management item, such as cooking
time and product temperature, and to immediately investigate the cause of any problems and take measures when they occur.
Product information (thermal label) is displayed in compliance with laws and regulations, and the Quality Control Department

29

(TRANSLATION ONLY)
and a third-party organization check the content of the labeling. In order to ensure thorough hygiene management at our stores,
voluntary inspections at our stores and hygiene inspections by the headquarters are conducted every month, and surpriseinspections are conducted by external organizations.
③ With regard to the information security system, the “Lawson Group Privacy Policy” has been formulated to promote protectionof personal information. To ensure that the relevant personnel understand the specific details of the contents and are preparedto implement them, the Company produces and publishes various manuals illustrating potential mistakes and complaints that
may arise at the stores, accompanied by practical responses to them, for stores in an effort to raise awareness. Based on the
Information Security Guidebook that compiles matters to be observed, headquarters employees are tested periodically toensure that they are all complying with the information security rules. The Company also conducts training to respond totargeted email attacks.
In handling the personal information of customers, a system has been established to specify collection and retention methods,
retention period, administration manager, etc. particularly with respect to each measure and go through the check by aspecialized unit prior to execution. When consigning affairs for storing personal information to outside organizations, we
require that a detailed investigation of the organization’s security framework be conducted in advance and that consignmentof the responsibility be made only to organizations that satisfy the Company’s conditions. Additionally, an onsite or
documented inspection is conducted annually to ensure that the conditions are maintained.
In term of information security management at stores, we request FC store owners to provide their store staff with education
on SNS while disseminating educational videos on SNS to store computers to raise awareness.
Moreover, the Company carries out checks from various angles to ensure that there are no gaps in the information security
system, including evaluation of the vulnerability of information systems, information security audits by the Internal Audit
Department and office security audits by a specialized company.
④ We are reinforcing our emergency response capabilities through efforts such as formulating the Business Continuity Plan
(BCP) and implementing disaster mitigation measures. Our aim is to institute a business continuity (BC) framework thatprevents interruption of important business activities, even in the case of significant damage due to a large-scale disaster, etc.
The Company believes that interruption of important business activities shall be avoided, while maintaining a priority on
securing people’s safety and wellbeing. Even if business operations are unavoidably interrupted, critical functions shall beresumed quickly and life infrastructure functions of convenience stores shall be maintained in order to avoid undermining
customer satisfaction or our corporate value. In order to achieve such objective, practical procedures are compiled in theBusiness Continuity Plan (BCP), and we are pursuing efforts to establish a BC framework in line with the BCP, and to sustain
and enhance it, as an important issue for management. In an effort to enhance its ability to respond to crises across the Group,
the Company has been constantly reviewing and improving both “hard” aspects such as office buildings and lifelines and“soft” aspects such as the BCP and manuals as well as the skills of employees and franchisees.
The Company has formulated the “Disaster Relief Manual” based on the disaster relief policy, defining its approach toward disaster relief
and the standard of conduct of the organization and its employees in the event of a disaster.

When large-scale disasters occur, our first priority is to confirm the safety of the Company’s employees and our FC owners
and crews. The Company conducts Companywide disaster prevention drills three times a year in which participants acquire
experience in implementing a variety of measures, including responding by telephone, email and disaster message dialing andapplying the safety check system. This prepares every individual to respond smoothly should emergencies arise. Manuals
elucidating the requisite disaster preparedness and responses are distributed to the stores. When large-scale disasters occur,
disaster relief headquarters are set up immediately in three locations in the affected area: headquarters, regional offices andlocal sites. The Company takes advantage of a Disaster Information Map System designed to enable personnel to confirm thedisaster situation in real-time and implement support measures for shops, factories and delivery centers, so that stores in thedisaster area can be reopened for business at an early timing.
In addition, the Company has been working to conclude agreements on the procurement of goods and support for stranded
commuters during a large-scale disaster event with the aim of engaging in mutual cooperation with municipal governments
in disaster stricken areas and fulfilling a lifeline function. We were named a designated public institution assigned by thePrime Minister pursuant to the Basic Act on Disaster Control Measures. To fulfill the lifeline functions expected of it as adesignated public institution by maintaining store operations and providing emergency relief supplies to disaster-hit areas, theCompany ordinarily prepares/revises disaster-prevention business plans, conducts disaster-prevention drills, stockpiles
supplies/materials, and pursues other disaster-prevention approaches, implementing its disaster-response measures whendisasters actually occur.
⑤ In light of the COVID-19 pandemic, we have been promoting thorough measures to prevent infection by prioritizing themeasures to ensure that customers can use our stores with peace of mind as everyday infrastructure in their communities thatprovide food and general merchandise and to secure the safety of our employees working in our stores.
(3) System to Ensure the Propriety of Business Operations Conducted by the Corporate Group① Through a system that has been established for the reporting of any risks that occur at an associated company to the Company,
information on risk cases at the Company or its associated companies is appropriately reported to the parent company on atimely basis.
② By establishing an organization in charge of Associated Companies as well as a specialized department to support AssociatedCompanies from a specialist perspective, the Company shall strive to ensure the appropriateness of the operations of
Associated Companies.

30

(TRANSLATION ONLY)(4) Securing Effectiveness of Performance of Corporate Auditors① Corporate Auditors’ Staff are assigned to the auditors’ office to provide exclusive assistance to corporate auditors in theexecution of their duties. Corporate Auditors’ Staff have the authority to conduct investigations necessary for audits bycorporate auditors. In addition, relevant departments assist in conducting necessary investigations for audits by corporate
auditors in accordance with the content of the audits.
② With regard to reporting to corporate auditors, matters that should be reported to corporate auditors have been reported tocorporate auditors in a timely and appropriate manner.
The above monetary amounts and the numbers of shares in this Business Report are rounded down to the nearest unit andpercentages are rounded to the nearest one decimal place.

31

(TRANSLATION ONLY)

Consolidated Balance Sheet(Millions of yen)
AssetsLiabilities
As of February
28, 2021(for reference)

As ofFebruary 28,
2022

690,811402,584

667,627
388,463

Current liabilities
Accounts payable-trade

767,754
127,486

704,691
125,681

46,38547,202

Short-term loans payable

42,32047,072

16,621

15,071

Merchandise
Accounts receivable-other
Other
Allowance for doubtful accounts
Non-current assets
Property and store equipment
Buildings and structures

20,657161,062
43,519(20)
674,618
367,640

22,128146,443
48,334(17)
669,618
368,768

191,977

189,190

Tools, furniture and fixtures
Land
Leased assets-net
Construction in progress
Other-net

19,044
8,468
131,779
1,818
14,551

22,762
8,507
124,978
4,720
18,609Intangible assets

86,406

77,746

Software
Goodwill
Trademark right
Other
Investment and other assets
Investment securities
Long-term loans receivable
Guarantee deposits
Deferred tax assets
Other

39,08838,215
8,349
752
220,571
27,624
40,621103,030
33,484
16,47434,88434,4597,721
680
223,103
21,73838,044103,277
34,736
26,066

Allowance for doubtful accounts

(663)

(759)

Account item
Current assets
Cash and deposits
Accounts receivable-due from
franchised stores
Lease receivables

Total assets

1,365,430

1,337,245

32

Account item

As of February
As of28, 2021
February 28,(for reference)
2022

Current portion of long-term
100,000
loans payable
Lease obligations
44,584
Accounts payable-other
90,798
Income taxes payable
4,078
Deposits received
246,110
Provision for bonuses
4,818
Call money
40,000
Deposits received for banking
52,168business
Other
15,388Non-current liabilities
324,743
Long-term loans payable
130,000
Lease obligations
121,491
Deferred tax liabilities
485
Provision for retirement
benefits to executive officers
277
and audits and supervisoryboard members
Net defined benefit liability
16,278Asset retirement obligations
35,694
Other
20,516
Total liabilities
1,092,498
Net assets
Shareholders’ equity
262,508
Capital stock
58,506
Capital surplus
46,494Retained earnings
158,498
Treasury shares(991)
Accumulated other
5,123
comprehensive income
Valuation difference on
1,782
available-for-sale securities
Revaluation reserve for land
(207)
Foreign currency translation
3,684
adjustment
Remeasurements of defined(134)
benefit plans
Subscription rights to shares333
Non-controlling interests
4,965
Total net assets
272,931
Total liabilities and net assets 1,365,430

20,00045,95590,412
7,368
151,809
4,854
108,000
91,42012,117354,080
160,000
118,445449
248
17,43836,622
20,875
1,058,771
265,327
58,50646,495
161,299
(973)
7,563
1,585
(69)
6,273
(227)
368
5,213
278,473
1,337,245

(TRANSLATION ONLY)

Consolidated Statement of Income(Millions of yen)
From March 1, 2020 toFebruary 28, 2021
(for reference)

From March 1, 2021 to
February 28, 2022

Income from franchised stores

288,480

291,802

Other operating revenue

101,576

390,056

114,331

406,134(275,945)

275,945(292,237)

292,237(188,441)

666,001
188,441(199,738)

698,371
199,738

Account item
Operating revenue

Net sales
Net sales
Gross operating revenue
Cost of sales(92,498)(87,503)

Gross profit
Operating gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income

477,559
436,682498,633
451,537

40,87647,096730

976

Dividend income
Gain on investments in investment partnerships

403
109

369
1,624

Compensation income

490

483

Employment adjustment subsidy due to novel
coronavirus disease

793

1,762

2,016

Other

4,544

1,202

6,420

Non-operating expenses
Interest expenses
Loss on cancellation of leases

3,678

3,440

2,065

1,423

Expense due to system failure
Other

828
1,238

－
1,081

7,810
37,610Ordinary income
Extraordinary income
6,232

Gain on sales of investment securities

6,232

5,944
47,571

1,103

1,103

Extraordinary losses
3,213
16,635

Loss on retirement of non-current assets
Impairment loss
Loss on novel coronavirus disease

3,607
2,158

Other

1,746
16,616
701
25,613

1,512

18,230

Profit before income taxes
Income taxes-current

9,197
378

Income taxes-deferred
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

33

20,57628,098

11,226
9,576
8,653(1,160)10,06518,032

(36)

131

8,689

17,900(TRANSLATION ONLY)

Consolidated Statement of Changes in Equity(From March 1, 2021 to February 28, 2022)
Shareholders’ equity

Balance at beginning of current
period(Millions of yen)

Accumulated other comprehensive income

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equityValuationdifference on
available-forsale securities

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans

Total
accumulated
othercomprehensive
incomeSubscription
rights toshares

Noncontrollinginterests

Total net
assets58,50646,494

158,498(991)

262,508

1,782

(207)

3,684

(134)

5,123

333

4,965

272,931

Changes of items during period
Increase by merger

49

Change in ownership interestof parent due to transactions
with non-controllingshareholders

0

49

49

0

0

Dividends of surplus(15,010)(15,010)(15,010)

Profit attributable to ownersof parent

17,90017,90017,900Purchase of treasury shares

(0)

(0)

(0)

Disposal of treasury shares

0

0

0

(138)

(138)

18

18

Reversal of revaluation reserve
for land(138)

Exercise of subscription
rights to shares(Delivery of treasury shares)

0

17

Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current period

(196)

138

2,589

(92)

2,439

34

248

2,722

－

0

2,800

17

2,818

(196)

138

2,589

(92)

2,439

34

248

5,541

58,50646,495

161,299(973)

265,327

1,585

(69)

6,273

(227)

7,563

368

5,213

278,473

34

(TRANSLATION ONLY)(Notes to Consolidated Financial Statements)(Accounting Policies for the Preparation of Consolidated Financial Statements)
1. Scope of consolidation(1) Number of consolidated subsidiaries: 20(Domestic)

Lawson urbanworks, Inc.
Lawson Store100, Inc.
SCI, Inc.
SEIJO ISHII CO., LTD.
Lawson Entertainment, Inc.
Lawson HMV Entertainment United Cinemas Holdings, Inc.
United Entertainment Holdings Co., Ltd.
United Cinemas Co., Ltd.
Lawson Bank, Inc.
BestPractice, Inc.

(Foreign)

Lawson (China) Holdings, Inc.
Shanghai Lawson, Inc.
Shanghai Le Song Trading Co., Ltd.
Shang Hai Gong Hui Trading Co., Ltd.
Zhejiang Lawson, Inc.
Chongqing Lawson, Inc.
Dalian Lawson, Inc.
Beijing Lawson, Inc.
BEIJING LUOSONG Co., Ltd.
Saha Lawson Co., Ltd.

(2) Names of nonconsolidated subsidiaries and others(Domestic)
LAWSONWILL, Inc.
Seikaken, Inc.
SEIJO ISHII SYUHAN CO., LTD.
TOKYO EUROPE TRADE CO., LTD.
Lawson Digital Innovation Inc.
(Foreign)

Lawson USA Hawaii, Inc.
Jiangsu Lawson, Inc.
Lawson Philippines, Inc.
LAWSON (TIANJIN) INC.
SLV Retail Company Limited
Shenyang LAWSON Inc.
Guangdong Lawson, Inc.
Chengdu Lawson, Inc.

(Reasons for exclusion from the scope of consolidation)
The above nonconsolidated subsidiaries have been excluded from the scope of consolidation because they are
all small in scale and their total assets, net sales, profit or loss (corresponding to equity interest) and retained
earnings (corresponding to equity interest) and others have no material influence on the consolidated financial
statements.

35

(TRANSLATION ONLY)
2. Application of the equity method(1) Equity-method associates: 3(Domestic)
Lawson Okinawa, Inc.
Lawson Minamikyushu, Inc.
Lawson Kochi, Inc.
(2) Nonconsolidated subsidiaries and entities excluded from the scope of the equity-method application
Nonconsolidated subsidiaries (LAWSONWILL, Inc., Seikaken, Inc., SEIJO ISHII SYUHAN CO., LTD.,TOKYO EUROPE TRADE CO., LTD., Lawson Digital Innovation Inc., Lawson USA Hawaii, Inc., Jiangsu
Lawson, Inc., Lawson Philippines, Inc., LAWSON (TIANJIN) INC., SLV Retail Company Limited and
Shenyang LAWSON Inc., Guangdong Lawson, Inc., Chengdu Lawson, Inc.) and entities (Double Culture
Partners Co., Ltd., Loyalty Marketing, Inc., Lawson Staff, Inc., TA Platform Corporation, LTF Co., Ltd.,
StageAround TOKYO Production Committee, Jiangyin Hualian Guzhitian Food Co., Ltd., POPLAR Co.,
Ltd., New Designed by Tokyo Ltd., Boogie Woogie Entertainment Co., Ltd., TA PlatformSoftware, andLawson Farm Chiba and others) were excluded from the scope of the equity-method application because
their profit or loss (corresponding to equity interest) and retained earnings (corresponding to equity interest)of these entities are not significant either individually or in aggregate to the consolidated financial
statements.
3.

Fiscal year end of the consolidated subsidiaries
The balance sheet date of Lawson (China) Holdings, Inc., Shanghai Lawson, Inc., Shanghai Le Song
Trading Co., Ltd., Shang Hai Gong Hui Trading Co., Ltd., Zhejiang Lawson, Inc., Chongqing Lawson, Inc.,
Dalian Lawson, Inc., Beijing Lawson, Inc., BEIJING LUOSONG Co., Ltd., and Saha Lawson Co., Ltd. is
December 31. In order to prepare the consolidated financial statements, the Company used these companies’
financial information prepared as of such balance sheet date and significant transactions which occur between
the balance sheet date and the consolidated balance sheet date are adjusted as required for consolidation.
The balance sheet date of Lawson Bank, Inc. is March 31. In formulating the consolidated financial
statements, the Company used this subsidiary’s provisional settlement of accounts as of the consolidatedbalance sheet date.
The fiscal year end date for the other consolidated subsidiaries corresponds with the consolidated balance
sheet date.

4. Summary of Significant Accounting Policies(1) Valuation basis and method for significant assets① Securities:
Marketable securities and investments in securities:
Available-for-sale securities:
Securities whose market value is readily determinable:
Recorded at market value with net unrealized gains and losses as a separate component of net
assets. The cost of securities sold is determined based on the moving-average method.
Other:
Stated at cost determined by the moving-average method.
② Inventories:
Merchandise:Stated at cost determined mainly by the retail method (the book value in the balance sheet is written
down based on the decline in profitability).
(2) Depreciation method of depreciable significant assets① Property and store equipment (except for leased assets):
Mainly computed by the straight-line method.
The ranges of useful lives are from 10 to 34 years for buildings and structures and from 5 to 8
years for tools, furniture and fixtures.
② Intangible assets (except for leased assets):
Computed by the straight-line method.
Costs of software for internal use are amortized by the straight-line method over 5 years, which isthe estimated useful life. Furthermore, for right of trademark, amortization is mainly computed using
the straight-line method over 20 years.

36

(TRANSLATION ONLY)③ Leased assets:

Leased assets related to finance leases that do not transfer ownership of leased property
The Company applies the straight-line method using the lease term as the useful life and a residual
value of zero.
④ Rights-of-use assets:

Rights-of-use assets of the Company’s foreign consolidated subsidiaries that apply International Financial
Reporting Standard 16 (IFRS 16) “Leases”
The Company applies the straight-line method using the lease term as the useful life and a residual
value of zero.
(3) Accounting standard for significant reserves① Allowance for doubtful accounts:
Allowance for doubtful accounts is provided at the amount of possible losses from uncollectible
receivables based on the actual rate of losses from bad debt for ordinary receivables and on estimatedrecoverability for specific doubtful receivables.
② Provision for bonuses:
Provision for bonuses is provided for payments of employees’ bonuses based on the estimated amounts.
③ Provision for retirement benefits to executive officers and audit and supervisory board members:
Provision for retirement benefits to executive officers of the Company and audit and supervisory board
members of consolidated subsidiaries is recorded under internal regulations.
(4) Accounting method for retirement benefits① Period attributable method of estimated amount of retirement benefits
In calculating retirement benefit obligation, in order to attribute estimated amount of retirement benefits
in the period up to the end of the current fiscal year, it is based on the benefit formula basis.
② Cost treatment method of actuarial difference and prior service cost
Prior service cost is amortized starting the fiscal year incurred mainly on a straight-line basis over acertain period (10 years) within an average remaining service period of employees at the time of theirrecognition.
Actuarial differences are mainly amortized from the following fiscal year on a straight-line basis over acertain period (10 years) within an average remaining service period of employees at the time of theirrecognition.
Certain consolidated subsidiaries apply the simplified method to estimate the amount required forvoluntary resignations at the end of the fiscal year as the retirement benefit liability in order to calculate
net defined benefit liability and retirement benefit expenses.
(5) Significant foreign currency transactions and foreign currency financial statements
All short-term and long-term monetary receivables and payables denominated in foreign currencies aretranslated into Japanese yen at the exchange rates at the consolidated balance sheet date. The foreignexchange gains and losses from translation are recognized in the consolidated statement of income. The
consolidated balance sheet accounts as well as revenue and expense accounts of foreign subsidiaries andaffiliated companies are translated into Japanese yen at the current exchange rate as of the consolidatedbalance sheet date except for shareholders’ equity, which is translated at the historical rate. Differences
arising from such translation are shown as “foreign currency translation adjustments” and “noncontrolling interests,” a separate component of net assets.
(6) Amortization method and period of goodwill
Goodwill is amortized on a straight-line basis over the relevant years, depending on the reason for theoccurrence of goodwill, with a maximum of 20 years.
(7) Accounting for consumption tax
Consumption tax and local consumption tax are accounted for using the tax exclusion method.
(8) Adoption of consolidated taxation system
The Company and certain consolidated subsidiaries in Japan adopt the consolidated taxation system.
(9) Application of tax effect accounting for transition from consolidated taxation system to group tax
sharing system
The Company and certain domestic consolidated subsidiaries have calculated the amounts of deferred tax
assets and deferred tax liabilities in accordance with tax laws in effect before amendment based on thetreatment of Paragraph 3 of “Practical Solution on the Treatment of Tax Effect Accounting for theTransition from the Consolidated Taxation System to the Group Tax Sharing System” (ASBJ Practical

37

(TRANSLATION ONLY)
Issues Task Force No.39, March 31, 2020) instead of applying the provision in Paragraph 44 of“Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No.28, February 16, 2018),
regarding the transition to group tax sharing system established in “Act for Partial Amendment of the
Income Tax Act, etc.” (Act No.8 of 2020), and items for which the non-consolidated taxation system has
been reviewed in the line with the transition to the group tax sharing system.
(Changes in Presentation)
In the “Current liabilities” section, “Call money” (40,000 million yen for the previous fiscal year) was
included in “Other” in the previous fiscal year. Due to an increase in financial materiality, it is presented
separately in the current fiscal year (108,000 million yen).
In the “Current liabilities” section, “Deposits received for banking business” (52,168 million yen for theprevious fiscal year) was included in “Other” in the previous fiscal year. Due to an increase in financial
materiality, it is presented separately in the current fiscal year (91,420 million yen).
In the “Non-operating income” section” section, “Gain on investments in investment partnerships” (109
million yen for the previous fiscal year) was included in “Other” in the previous fiscal year. Due to anincrease in financial materiality, it is presented separately in the current fiscal year (1,624 million yen).
In the “Non-operating income” section, “Share of profit of entities accounted for using equity method” (50million yen for the previous fiscal year) was presented separately in the previous fiscal year. Due to a decline
in financial materiality, it is now included in “Other.”Accounting Standard for Disclosure of Accounting Estimates (ASBJ Statement No.31, March 31, 2020)
has been applied to the consolidated financial statements from the current the fiscal year, and theconsolidated financial statements include notes to accounting estimates.
((Notes to Accounting Estimates)
Impairment of fixed assets(1) Amounts recorded in consolidated financial statements for the current fiscal year
Property and store equipment
16,189 million yen
Intangible assets
67
"
Other
359
"
(2) Information on significant accounting estimates concerning identified items(i) Calculation method
The Company and its consolidated subsidiaries (collectively, the “Group”) identify each store as thesmallest cash generating unit. With regard to asset groups showing signs of impairment, undiscounted future
cash flows were calculated, and when they were less than the carrying value, the recoverable amount wasmeasured based on the net selling price or value in use and the carrying value was written down, with thedifference recognized as an impairment loss under extraordinary losses. The net selling price of land was
calculated based on the value appraised by a real estate appraiser or contract price, and the value in use wascalculated by discounting estimated future cash flows mainly using a discount rate of 2.6%.
(ii) Major assumptions
The estimates of undiscounted future cash flows related to the recognition of impairment loss of fixed
assets of the Company’s stores are based on profit forecasts by each store. In addition, it is assumed that the
impact of the COVID-19 pandemic will continue even after the fiscal year ending February 2023 in somestores, and such impact is incorporated into profit forecasts.
(iii) Impact on consolidated financial statements for the next fiscal year
In cases where the assumptions used in the aforementioned estimates need to be reviewed due to changes
in uncertain economic conditions in the future, additional impairment loss (extraordinary loss) may be
incurred in the consolidated financial statements for the next fiscal year and thereafter.

38

(TRANSLATION ONLY)(Notes to Consolidated Balance Sheet)
1. Accumulated depreciation of property and store equipment:

416,609 million yen

2. Revaluation of land used for businessLand used for business was revalued on the basis prescribed by the Law Concerning Revaluation of Land
(Law No. 34, March 31, 1998). The resulting revaluation difference has been included in net assets as“Revaluation reserve for land.”
Revaluation method: The value of land is determined based on the notified prices adjusted reasonably as
stipulated in Article 2, Item 4 of the Ordinance Implementing the Law Concerning
Revaluation of Land (Government Ordinance No. 119, March 31, 1998) and theassessed value as stipulated in Article 2, Item 5 of the same ordinance.
Date of revaluation: February 28, 2002
The difference between book value and market value of the revalued land as of the consolidated balance
sheet date was 9 million yen.
3. Guarantee obligations
The Company guarantees the borrowings from financial institutions of the following subsidiary.
Lawson Philippines, Inc.
1,163 million yen
Lawson USA Hawaii, Inc.
92 million yen

39

(TRANSLATION ONLY)(Notes to Consolidated Statement of Income)Impairment loss
The Company and its consolidated subsidiaries (collectively, the “Group”) identify each store as the smallest
cash generating unit.
The carrying value of asset groups whose profitability has significantly decreased was written down to therecoverable amount, with the difference recognized as impairment loss under extraordinary losses.
Category by use

StoresImpairment loss
(millions of yen)

Location

AssetsTokyo

Buildings; Tools, furniture and fixtures; and others

2,644

Osaka

"

1,500

Others"12,353

―

Land

50

―

Software

67

―

―

Other

Total

Category by non-current assets
Buildings and structures
Tools, furniture and fixtures
Land
Leased assets
Software
Other

9,812
678
50
5,648
67
359

16,616

million yen
"
"
"
"
"

The recoverable amount of the asset groups is the higher of net selling price or value in use. The net selling
price of land was calculated based on the value appraised by a real estate appraiser or contract price, and thevalue in use was calculated by discounting estimated future cash flows mainly using a discount rate of 2.6%.

40

(TRANSLATION ONLY)(Notes to Consolidated Statement of Changes in Equity)
1. Number of outstanding shares and treasury shares
Number of shares
Increase during
Decrease during
at the end of
the period
the periodprevious period(thousand shares) (thousand shares)(thousand shares)

Number of sharesat the end of theperiod(thousand shares)

Outstanding shares－

100,300

Common stock－

100,300

Treasury shares
232
0
4
228
Common stock
Notes:
1. The increase in treasury shares of 0 thousand shares resulted from purchases of stock of less than one
share unit.
2. The decrease in treasury shares of 4 thousand shares resulted from decreases of 4 thousand shares dueto the exercise of stock option rights and 0 thousand shares due to requests for additional purchases ofstock of less than one share unit.
2. Dividend(1) Dividend payment
Date of resolution

Class ofsharesDividend payment(millions of yen)

Dividend
per share(yen)

Record date

Effective date

General meeting ofshareholders(May 25, 2021)

Common
stock

7,505

75.00

February 28, 2021

May 26, 2021

Directors’ meeting(October 7, 2021)

Common
stock

7,505

75.00

August 31, 2021

November 10,
2021(2) Dividends for which the record date is in the current period and the effective date is after the
year-end consolidated balance sheet date
Dividend
Dividend
Class of
Source ofRecordEffective
Date of resolution
payment
per sharesharesdividenddate
date(millions of yen)
(yen)
General meeting ofMay
Common Retained
Februaryshareholders
7,505
75.00
stock
earnings
28, 2022
26, 2022(May 25, 2022)
3. Number of stock that can be exercised by outstanding subscription rights to shares (excluding those
not yet in the exercisable period)
86,000 shares

41

(TRANSLATION ONLY)(Notes to Financial Instruments)
1. Matters relating to the status of financial instruments(1) Policy for financial instruments
The Group primarily uses short-term deposits, etc., to manage its funds and raises funds as necessary
through borrowings from financial institutions and leasing according to the financing plan.
(2) Nature, extent of risk, and risk management system for financial instruments
Trade receivables, such as accounts receivable - due from franchised stores, lease receivables andaccounts receivable-other, are exposed to credit risk from business counterparties.
Investment securities are primarily shares of companies with business relationships and listed shares
which are exposed to the risk of market price fluctuations. With regard to this risk, the Company monitors
the financial conditions of business counterparties on a regular basis.
Long-term loans receivable (mainly construction cooperation payments) and guarantee deposits are
exposed to credit risks of borrowers and landlords, etc. With regard to this risk, the Company manages
credit on a daily basis at the relevant division and seeks early acknowledgement and minimization ofcollection concerns due to deterioration in a borrower’s financial situation, etc.
Among trade payables, most of the accounts payable-trade, accounts payable-trade for franchised stores,
accounts payable-other and deposits received held as a result of bill settlement services have payment due
dates within one month, while most deposits received held as a result of ticket sales transactions havepayment due dates within 6 months.
Short-term loans payable and call money are mainly for the purpose of procuring working capital, andare due within 1 year. These are exposed to liquidity risks, including a situation in which necessary funding
cannot be secured under certain environments.
Deposits received for banking business, which are the deposits of customers received by domestic
consolidated subsidiaries engaged in the banking business, are exposed to interest rate fluctuation risks.
Long-term loans payable are mainly for the purpose of funding necessary for the banking business andM&A, and are due within 5 years.
The primary purpose of lease obligations related to finance lease transactions is securing the funds
required for capital investments and the maximum redemption period is 15 years after the consolidatedbalance sheet date.
With regard to the liquidity risk associated with fundraising (risk that payments cannot be executed on
the payment due dates), the Company prepares and updates financial plans on a timely basis and manages
liquidity risk by measures including maintaining adequate liquidity on hand.
(3) Fair values of financial instruments
Fair values of financial instruments are based on quoted prices in active markets. If a quoted price is notavailable, other rational valuation techniques are used instead. Since multiple factors are considered in theestimation of fair value, the results of the estimation might differ if other valuation techniques were used.

42

(TRANSLATION ONLY)
2. Matters relating to the fair values of financial instruments
The carrying amount, fair values, and difference as of February 28, 2022 are as follows. (Financial instruments whose fair value
cannot be reliably determined are not included as described in “(Note 2) Financial instruments whose fair values cannot be reliably
determined.”)(Millions of yen)
Difference
Carrying amount Fair value(1) Cash and deposits

388,463

388,463－(2) Accounts receivable-due from franchised stores(3) Lease receivables

47,202
15,071
146,443(5)
146,437

47,202
14,130－(940)

146,437

－

7,513

7,513

－

(4) Accounts receivable-other
Allowance for doubtful accounts (*1)(5) Short-term and long-term investment securities
Available-for-sale securities (*2)

43,881(76)(6) Long-term loans receivable
Allowance for doubtful accounts (*1.4)

43,782(22)(1) Accounts payable-trade

43,805103,277(445)
102,831751,326
125,681

100,948
748,479
125,681(1,883)(2,846)－(2) Short-term loans payable(3) Accounts payable-other47,07290,41247,07290,412－－(4) Deposits received

151,809

151,809－(5) Call money(6) Deposits received for banking business

108,000
91,420108,000
91,420－(7) Long-term loans payable (*3)

180,000

180,002(7) Guarantee deposits
Allowance for doubtful accounts (*1)
Total assets－
2(8) Lease obligations (*3.4)
170,238
166,106(4,132)
Total liabilities
964,634
960,504(4,130)(*1) Allowance for doubtful accounts related to accounts receivable-other, long-term loans receivable and guarantee deposits
have been deducted.
(*2) Short-term and long-term investment securities and available-for-sale securities include shares of listed affiliates notaccounted for by the equity method, and the difference in value is based on the market value of such shares.
(*3) Long-term loans payable and lease obligations include liabilities maturing within one year.
(*4) As long-term loans receivable and lease obligations satisfy the offsetting requirements, long-term loans receivable areoffset against lease obligations and the net amount is shown in the consolidated balance sheets. The offset amount is 5,837
million yen.
(Note 1) Method of calculating the fair values of financial instruments
Assets(1) Cash and deposits and (2)Accounts receivable-due from franchised stores and (4) Accounts receivable-other
These instruments are stated at their carrying values, because they are short-term and their carrying values areapproximately the same as their fair values.
(3) Lease receivables
The fair values of lease receivables are calculated by discounting future cash flows using the yield rate of government
bonds for the remaining period.
(5) Short-term and long-term investment securities
The fair values of investment securities are stated at the quoted market price on the stock exchange for the equity
instruments.
(6) Long-term loans receivable
The fair values of long-term loans receivable are determined based on the present value, derived by discounting the total
amount of principal and interest at the expected rate of interest to be applied for similar loans.
(7) Guarantee deposits
Guarantee deposits are determined by discounting future cash flows, which reflect the collectability, using the yield rate of43

(TRANSLATION ONLY)
government bonds over the remaining period.
Liabilities(1) Accounts payable-trade, (3) Accounts payable-other and (4) Deposits received
These instruments are stated at their carrying values, because they are short-term and their carrying values areapproximately the same as their fair values.
(2)
Short-term loans payable
These instruments are stated at their carrying values, because they are determined using floating interest rates that reflectmarket rates in a short-time and their carrying values are approximately the same as their fair values.
(5) Call money
The fair values of these instruments are stated at their carrying values, because their contract period is short (within oneyear) and their carrying values are approximately the same as their fair values.
(6) Deposits received for banking business
The fair values of demand deposits are stated at the amount to be paid if demanded on the balance sheet date (carrying
values). In addition, the fair values of term deposits are stated at their carrying values, because their contract period is short(within one year) and their carrying values are approximately the same as their fair values.
(7) Long-term loans payable (including current portion of long-term loans payable)
The fair values of long-term loans payable with fixed interest rates are calculated based on the present value of the total
amount of principal and interest discounted at the expected interest rate for similar borrowings. The fair values of long-termloans payable with floating interest rates are stated at their carrying values, because they are determined using floating interest
rates that reflect market rates in a short-time and their carrying values are approximately the same as their fair values.
(8) Lease obligations (including current portion of lease obligations)
The fair values of lease obligations are determined by discounting the cash flows related to the obligations at the expected
rate of interest to be applied for similar lease transactions.
(Note 2) Financial instruments whose fair values cannot be reliably determined
Category

Carrying amount (millions of yen)
383

Unlisted equity securities

17,940Investments in subsidiaries and affiliated companies

2,900
Other
Because financial instruments listed above do not have market prices and their fair values cannot be reliably determined,
they are not included in “(5) Short-term and long-term investment securities.”(Notes to Per-Share Data)
1. Net assets per share
2. Profit per share

2,726.97 yen
178.87 yen(Notes to Significant Subsequent Events)
Not applicable.

44

(TRANSLATION ONLY)

Non-consolidated Balance Sheet(Millions of yen)
AssetsLiabilities
As of February
28, 2021(for reference)

As ofFebruary28, 2022

As of February
28, 2021(for reference)

As ofFebruary28, 2022

209,085
38,022

173,022
5,028

Current liabilities
Accounts payable-trade384,184
106,756

363,285
101,427

46,057

46,386

Short-term loans payable

38,07041,062

Lease receivables

16,621

15,48035,05024,730

Merchandise

1,062

934

－

20,000Prepaid expenses
Accounts receivable-other
Other
Non-current assets
Property and store equipment
Buildings
Structures
Tools, furniture and fixtures
Land
Leased assets
Construction in progress

17,897
79,4689,954
630,340
316,157
154,345
27,486
10,182
8,422
114,673
1,047

17,62979,9897,573
620,902309,252
154,144
24,484
10,266
8,461
111,020876

35,564
21,581
1,985
2,371
132,989
2,942
6,873
220,264
50,000105,735
13,55335,614
24,676
5,142
2,292
102,241
3,048
3,049
197,345
30,000102,414
14,360Intangible assets

36,151

31,451

200

151

Software24,106

21,261

Asset retirement obligations

31,80332,795

Goodwill
Other
Investments and other assets
Investment securities
Shares of subsidiaries andassociates
Investments in capital ofsubsidiaries and associates

11,475568
278,031
8,367

9,647
542
280,198
3,276

Other
Total liabilities

18,971
604,449

17,623560,631

Shareholders’ equity

233,069

231,40964,65863,866

Capital stock

58,50658,506

29,832

40,691

Capital surplus

47,76047,761Long-term loans receivable
Long-term loans receivable fromsubsidiaries and associates
Long-term prepaid expenses

39,96637,430Legal capital surplus

47,696

47,696494

482

Other capital surplus

64

64

13,575

12,294

127,793

126,114

Guarantee deposits

88,914

88,669Legal retained earnings

727

727

Deferred tax assets
Other

32,344531

33,580666

50,00050,000Allowance for doubtful accounts

(653)

(759)

Other retained earnings
General reserve
Retained earnings brought
forwardTreasury shares
Valuation and translation
adjustments
Valuation difference on
available-for-sale securities

77,06575,387

(991)

(973)

1,574

1,516

1,782

1,585

Revaluation reserve for land

(207)

(69)

Subscription rights to shares
Total net assets
Total liabilities and net assets

333
234,977
839,426368
233,294
793,925

Account item
Current assets
Cash and deposits
Accounts receivable-due from
franchised stores

Total assets

839,426

793,92545

Account item

Short-term loans payable tosubsidiaries and associates
Current portion of long-termloans payable
Lease obligations
Accounts payable-other
Income taxes payable
Accrued expenses
Deposits received
Provision for bonuses
Other
Non-current liabilities
Long-term loans payable
Lease obligations
Provision for retirement benefits
Provision for retirement benefits
to executive officers

Net assets

Retained earnings

(TRANSLATION ONLY)

Non-consolidated Statement of Income(Millions of yen)
From March 1, 2020 toFebruary 28, 2021
(for reference)

Account item

From March 1, 2021 to
February 28, 2022

Operating revenue
285,847

Income from franchised stores
Other operating revenue

321,650

36,841(33,175)

33,175(29,222)

29,222(24,224)

354,825
24,224(21,318)

355,10221,31835,803

Net sales
Net sales
Gross operating revenue
Cost of sales

289,038(8,950)Gross profit
Operating gross profit
Selling, general and administrative expenses
Operating income(7,903)
330,600
304,449

333,784
307,913

26,15025,870Non-operating income
Interest income

496

476

Dividend income

11,1298,811

Gain on investments in investment partnerships

109
1,948

1,624
1,388

Other
Non-operating expenses

325,880

13,682

Interest expenses

2,079

1,921

Loss on cancellation of leases
Expense due to system failure

1,838
828

1,414

Other
Ordinary income

1,385

6,132
33,700－558

12,301

3,894
34,278Extraordinary income
6,232

Gain on sales of investment securities
Other

221

Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Loss on novel coronavirus disease

1,360
15,741

656

187

1,408

Income taxes – current

4,255
(866)

20,871
19,283
3,388
15,894

Profit

46

－

2,592
16,213

Other
Income before income taxes
Income taxes – deferred

1,103
6,454

1,256
4,512
(1,148)

1,103

18,546
16,834
3,364
13,470(TRANSLATION ONLY)

Non-consolidated Statement of Changes in Equity(From March 1, 2021 to February 28, 2022)
(Millions of yen)

Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings
Retained
Generalearnings
reservebrought
forwardTotal
retainedearnings

TreasurysharesTotalshareholders’equity77,065

127,793(991)

233,069

Dividends of surplus(15,010)(15,010)(15,010)

Profit13,47013,47013,470

Balance at the beginning of current
periodCapital
stock

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

58,506

47,69664

47,760727

50,000Changes of items during period

Purchase of treasury shares
Disposal of treasury shares

0

Reversal of revaluation reserve for
land
Exercise of subscription rights toshares (Delivery of treasury shares)

0
(138)

0

0

(0)

(0)

0

0

(138)

(138)
17

18

Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of current period

－

－

0

0

－

－

(1,678)(1,678)17(1,660)58,506

47,69664

47,761727

50,00075,387

126,114(973)

231,409

47

(TRANSLATION ONLY)(Millions of yen)
Valuation and translation adjustments
Valuation difference
Total
Revaluation reserveon availablevaluation and translation
for landfor-sale securities
Adjustments
Balance at the beginning of current
periodChanges of items during period

1,782

(207)

1,574

Subscription rights toshares333

Total
net assets
234,977

Dividends of surplus(15,010)

Profit13,470Purchase of treasury shares(0)

Disposal of treasury shares

0

Reversal of revaluation reserve for land

(138)

Exercise of subscription rights toshares (Delivery of treasury
shares)18

Net changes of items other thanshareholders' equity

(196)

138

(57)

34

(22)

Total changes of items during
period

(196)

138

(57)

34

(1,682)

Balance at end of current period

1,585

(69)

1,516

368

233,294

48

(TRANSLATION ONLY)(Notes to the Non-consolidated Financial Statements)(Significant Accounting Policies)
1. Valuation basis and method for assets(1) Marketable securities and investments in securities:① Investments in subsidiaries and affiliated companies
Stated at cost determined by the moving-average method.
② Available-for-sale securities
Securities whose market value is readily determinable:
Recorded at market value with net unrealized gains and losses as a separate component of net
assets. The cost of securities sold is determined based on the moving-average method.
Other:
Stated at cost determined by the moving-average method.
(2) Merchandise inventories:
Merchandise:Stated at cost determined mainly by the retail method (the book value in the balance sheet iswritten down based on the decline in profitability).

2.

Depreciation method of depreciable assets(1) Property and store equipment (except for leased assets):

Computed by the straight-line method.
The ranges of useful lives are from 10 to 34 years for buildings and structures and from 5 to 8
years for tools, furniture and fixtures.
(2) Intangible assets (except for leased assets):
Computed by the straight-line method.
Costs of software for internal use are amortized by the straight-line method over 5 years, which isthe estimated useful life.
(3) Leased assets:
Leased assets related to finance leases that do not transfer ownership of leased property
The Company applies the straight-line method using the lease term as the useful life and a residual
value of zero.
(4) Long-term prepaid expenses:
Computed by the straight-line method.

3. Accounting standard for significant reserves(1) Allowance for doubtful accounts:
Allowance for doubtful accounts is provided at the amount of possible losses from uncollectible
receivables based on the actual rate of losses from bad debt for ordinary receivables and on estimatedrecoverability for specific doubtful receivables.
(2) Provision for bonuses:
Accrued employees’ bonuses are provided for payments of employees’ bonuses based on the estimatedamounts.
(3) Provision for retirement benefits:
Provision for retirement benefits is provided at the amount calculated based on the retirement benefit
liability and pension assets at the consolidated balance sheet date.
① Method of attributing the estimated amount of retirement benefits to periods
In calculating the retirement benefit obligation, the benefit formula method is used to attribute theestimated amount of retirement benefits to periods up to the end of the current fiscal year.
②Method of amortizing actuarial differences and prior service costs
Prior service costs are recorded as expense over a certain number of years within the averageremaining years of service of the corresponding employees at the time of occurrence (10 years) using
the straight-line method.
Actuarial differences are accounted for as expenses over a certain number of years within the averageremaining years of service of the corresponding employees (generally 1 year for the defined benefit
corporate pension plan and generally 10 years for the retirement lump-sum payment plan) using thestraight-line method, commencing with the consolidated fiscal year following the one in which they
were incurred.
Treatment of unrecognized actuarial and unrecognized past service costs differences in the
non-consolidated balance sheet differs from the consolidated balance sheet

49

(TRANSLATION ONLY)(4) Provision for retirement benefits to executive officers:
Provision for retirement benefits to executive officers prepared for required payments at the end of
the current fiscal year is recorded under internal regulations.

4.

Accounting for consumption tax
Consumption tax and local consumption tax are accounted for using the tax exclusion method.

5.

Adoption of consolidated taxation system
The Company adopts the consolidated taxation system.

6.

Application of tax effect accounting for transition from consolidated taxation system to group tax
sharing system
The Company have calculated the amounts of deferred tax assets and deferred tax liabilities in accordancewith tax laws in effect before amendment based on the treatment of Paragraph 3 of “Practical Solution on theTreatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the GroupTax Sharing System” (ASBJ Practical Issues Task Force No.39, March 31, 2020) instead of applying theprovision in Paragraph 44 of “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No.28,
February 16, 2018), regarding the transition to group tax sharing system established in “Act for Partial
Amendment of the Income Tax Act, etc.” (Act No.8 of 2020), and items for which the non-consolidated
taxation system has been reviewed in the line with the transition to the group tax sharing system.

(Changes in Presentation)
In the “Non-operating income” section, “Gain on investments in investment partnerships” (109 million yen
for the previous fiscal year), which was included in “Other” in the non-consolidated statement of income inprior periods, is now separately presented as “Gain on investments in investment partnerships” (1,624 million
yen for the current fiscal year) from the current fiscal year due to an increase in financial materiality.
In the “Non-operating expenses” section, “Penalty” (37 million yen for the current fiscal year), which was
separately presented in the non-consolidated statement of income in prior periods, is now included in “Other”
from the current fiscal year due to a decline in financial materiality.
Accounting Standard for Disclosure of Accounting Estimates (ASBJ Statement No.31, March 31, 2020)
has been applied to the non-consolidated financial statements from the current fiscal year, and the nonconsolidated financial statements include notes to accounting estimates.
(Notes to Accounting Estimates)
Impairment of fixed assets(1) Amounts recorded in non-consolidated financial statements for the current fiscal year
Property and store equipment
15,662 million yen
Intangible assets
20
"
Other
58
"
(2) Information on significant accounting estimates concerning identified items
The method used to calculate the amounts in (1) is the same as that described in the “Notes to Consolidated
Financial Statements (Notes to Accounting Estimates)” of the Consolidated Financial Statements.
(Notes to the Non-consolidated Balance Sheet)
1. Accumulated depreciation of property and store equipment:
2.

Due from/to subsidiaries and affiliated companies
Short-term receivables due from subsidiaries and affiliated companies
Long-term receivables due from subsidiaries and affiliated companies
Short-term payables due to subsidiaries and affiliated companies
Long-term payables due to subsidiaries and affiliated companies

50

336,023 million yen

26,672
35
4,603
333

million yen"""

(TRANSLATION ONLY)
3.

Revaluation of land used for businessLand used for business was revalued on the basis prescribed by the Law Concerning Revaluation of Land
(Law No. 34, March 31, 1998). The resulting revaluation difference has been included in net assets as“Revaluation reserve for land.”
Revaluation method: The value of land is determined based on the notified prices adjusted reasonably as
stipulated in Article 2, Item 4 of the Ordinance Implementing the Law Concerning
Revaluation of Land (Government Ordinance No. 119, March 31, 1998) and theassessed value as stipulated in Article 2, Item 5 of the same Ordinance.
Date of revaluation: February 28, 2002
The difference between book value and market value of the revalued land as of the non-consolidatedbalance sheet date was 9 million yen.

4.

Guarantee obligations
The Company guarantees the accounts payable-trade and deposit liabilities of the following
subsidiaries
million yen
Lawson Bank, Inc.
95,000Lawson Philippines, Inc.
1,163"
SCI, Inc.
311
Lawson Entertainment, Inc.
171"
Lawson USA Hawaii, Inc.
92

(Notes to the Non-consolidated Statement of Income)Transaction amount with affiliated companies
Operating transactions
Operating revenue
Goods purchased
Selling, general and administrative expenses
Transactions other than operating transactions

35,339233
48,897
8,614

million yen"""(Notes to the Non-consolidated Statement of Changes in Equity)
Number of treasury shares

228,807 shares(Notes to Accounting for Income Taxes)
Components of deferred tax assets and liabilities
Enterprise taxes payable
Accrued employees’ bonuses
Loss on write-down of investments in affiliated companies
Excess of depreciation
Excess of amortization of software
Provision for retirement benefits
Allowance for doubtful accounts
Impairment loss
Other
Subtotal of deferred tax assets
Less valuation allowances
Total deferred tax assets

539 million yen
"
933
"
8,538
"
8,607
"
362
"
6,104
"
232
"
15,550"2,377
43,247 million yen(9,667)"33,580 million yen
33,580 million yen

Deferred tax assets-net

51

(TRANSLATION ONLY)(Notes to Related-Party Transactions)
Parent Company
Attribute

ParentCompany

Business
Company nameline orprofession

Mitsubishi
Corporation

GeneralTradingCompany

Equityownership
percentage

Directholding
50.2%

RelationshipTransaction
Description
amountDirectors’ofAccount
Business
posts held transactions (millions of item
relationshipyen)concurrentl
Transactions
under abusinesscollaborationagreement

No

Receipt of
debt
guarantees
Payment ofguarantee
fees

Endingbalance(millionsof yen)22,062

－

－

0

－

－

Transaction conditions and the policies for determining those conditions:
1. The Company is provided with debt guarantees for loans payable from Mitsubishi Corporation Financial &Management Services (Japan) Ltd. by Mitsubishi Corporation. Guarantee fee rates are determinedrationally, taking into account market interest rates.
Subsidiaries and affiliates
Attribute

Business
Company nameline orprofession

SCI, Inc.

Domestic
Convenience
Store Business

LawsonEntertainmentRelated
Entertainment,
Business
Inc.

Equityownership
percentage

RelationshipTransaction
Description
amountDirectors’ofAccount
Business
posts held transactions (millions of item
relationshipyen)concurrentl

Directholding100.0%

SCM

Directholding100.0%

Sale oftickets andsoftware formusic andvideo

Purchase ofgoods
Supervisionofmanagement

Yes

Yes

Subsidiary

SEIJO ISHII
CO., LTD.

Seijo Ishii
Business

Directholding100.0%

Lawson Bank,Inc.

Financial
Services
Business

Directholding
95.0%

Bankingbusiness

Yes

Yes

Repaymentof funds
Borrowingof funds
Borrowinginterest
Repaymentof funds
Borrowingof funds
Borrowinginterest

41,800

Shortterm loans
42,400 payable
Accrued
0 interest
Shortterm loans
6,000 payable
Accrued
1 interest
5,000

Repaymentof funds
Borrowingof funds
Borrowinginterest

17,800

Guarantee
obligations
Receipt ofguarantee
fees

95,000

Shortterm loans
6,100 payable
Accrued
0 interest－

11 Accounts
receivableotherTransaction conditions and the policies for determining those conditions:
1. The Company manages the funds of some subsidiaries centrally and there are lending and borrowing
transactions between the Company and its subsidiaries.
2. The interest rates for loans and borrowings are determined rationally taking into account market interest
rates.
3. The Company provides debt guarantees for loans payable received from financial institutions by Lawson
Bank, Inc.
Guarantee fee rates are determined rationally, taking into account market interest rates.

52

Endingbalance(millionsof yen)9,500
013,5000－
0－2

(TRANSLATION ONLY)
Subsidiaries of an affiliated companies under common control
Attribute

Subsidiaryof the parent
company

RelationshipTransaction
EndingEquityDescription
amountCompany Business line
Account balance
Directors’
ownership Businessof
nameor profession(millions of
item(millionspercentage relationship posts heldtransactions
yen)of yen)concurrently
PurchasesforcompanyAccounts
10,011
operated
54,552
payable(689,330)
storestrade(purchases
Mitsubishi
Sales offor
Shokuhin processed－
VendorNo
franchised
stores)Co., Ltd.
foods
Accounts
Shipping
payable4,789
56,354costs
otherReceipt of
Accounts
shipping
56,174
4,332
receivablecosts
otherMitsubishi
Corporation
Subsidiary
Financial & Contractedof the parent Management
operations
company
Services(Japan) Ltd.

－

Recipient of
loans

No

Repaymentof funds
Borrowingof funds
Borrowinginterest

63,25071,2420

Short-termloanspayableAccruedinterest

Transaction conditions and the principles on the decision thereof:
1. The terms and conditions for goods purchased transactions are determined to be same as those for othergeneral business transactions. Furthermore, regarding purchases for the franchised stores, the Company acts
as an alternative payer but not as a direct party for the purchase.
2. The interest rates for borrowings are determined rationally taking into account market interest rates.
3. The transaction amount does not include consumption taxes. However, the ending balance includes
consumption taxes.
(Notes to Per-Share Data)
1. Net assets per share
2. Profit per share

2,327.59 yen
134.61 yen(Notes to Significant Subsequent Events)
Not applicable.

53

22,0620

(TRANSLATION ONLY)INDEPENDENT AUDITOR'S REPORT
April 5, 2022
To the Board of Directors of
Lawson, Inc.:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:Kazuaki Furuuchi

Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Masumi Nakagawa

OpinionPursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited the consolidated
financial statements, namely, the consolidated balance sheet as of February 28, 2022 of Lawson, Inc. (the"Company") and its consolidated subsidiaries, and the related consolidated statements of income and changes
in equity for the fiscal year from March 1, 2021 to February 28, 2022, and the related notes.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Lawson, Inc. and its consolidated subsidiaries as of February 28, 2022, andthe results of their operations for the year then ended in accordance with accounting principles generally
accepted in Japan.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group in accordancewith the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our other ethicalresponsibilities as auditors. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Responsibility of Management and Audit & Supervisory Board Members and the Audit & Supervisory
Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial statementsthat are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
in accordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing
the Directors’ execution of duties relating to the design and operating effectiveness of the controls over theCompany’s financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
54

(TRANSLATION ONLY)
includes our opinion. Misstatements can arise from fraud or error, and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgement and maintain professional skepticism throughout the audit. We also:・Identify and assess the risks of material misstatement of the consolidated financial statement, whether due
to fraud or error, design and perform audit procedures responsive to those risks. The procedures selected
depend on the auditor’s judgement. In addition, we obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion.
・Obtain, when performing risk assessment procedures, an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control.
・Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
・Conclude on the appropriateness of management’s use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
・Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, as well as the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
・Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Company to express an opinion on the consolidated financial statements. We areresponsible for the direction, supervision and performance of the group audit. We remain solely responsible
for our audit opinion.
We communicate with Audit &Supervisory Board members and the Audit & Supervisory Board regarding,among other matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during over audit.
We also provide Audit& Supervisory Board members and the Audit & Supervisory Board with a statementthat we have complied with relevant ethical requirements regarding independence, and communicate withthem all relationships and other matters that may reasonably be thought to bear on our independence, andwhere applicable, related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is required
to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
The above represents a translation, for convenience only, of the original report issued in the Japanese
language.

55

(TRANSLATION ONLY)INDEPENDENT AUDITOR'S REPORT
April 5, 2022
To the Board of Directors of
Lawson, Inc.:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:Kazuaki Furuuchi
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Masumi Nakagawa
Pursuant to the first item, second paragraph of Article 436 of the Companies Act, we have audited the financial
statements, namely, the balance sheet as of February 28, 2022 of Lawson, Inc. (the "Company"), and the related
statements of income and changes in equity for the 47th fiscal year from March 1, 2021 to February 28, 2022,
and the related notes and the accompanying supplemental schedules.
In our opinion, the financial statements and the accompanying supplemental schedules referred to above
present fairly, in all material respects, the financial position of Lawson, Inc. as of February 28, 2022, and theresults of its operations for the year then ended in accordance with accounting principles generally accepted inJapan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of theNonconsolidated Financial Statements section of our report. We are independent of the Company in accordancewith the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our other ethicalresponsibilities as auditors. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Responsibility of Management and Audit & Supervisory Board Members and the Audit & Supervisory
Board for the Nonconsolidated Financial Statements
Management is responsible for the preparation and fair presentation of these nonconsolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal control
as management determines is necessary to enable the preparation of nonconsolidated financial statements thatare free from material misstatement, whether due to fraud or error.
In preparing the nonconsolidated financial statements, management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the
Directors’ execution of duties relating to the design and operating effectiveness of the controls over theCompany’s financial reporting process.

Auditor's Responsibilities for the Audit of the Nonconsolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the nonconsolidated financial statements as a
56

(TRANSLATION ONLY)
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Misstatements can arise from fraud or error, and are considered material if, individually orin the aggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these nonconsolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgement and maintain professional skepticism throughout the audit. We also:・Identify and assess the risks of material misstatement of the nonconsolidated financial statement, whether due
to fraud or error, design and perform audit procedures responsive to those risks. The procedures selected dependon the auditor’s judgement. In addition, we obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion.
・Obtain, when performing risk assessment procedures, an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company’s internal control.
・Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
・Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in thenonconsolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events
or conditions may cause the Company to cease to continue as a going concern.
・Evaluate whether the overall presentation and disclosures of the nonconsolidated financial statements are inaccordance with accounting principles generally accepted in Japan, as well as the overall presentation, structure
and content of the nonconsolidated financial statements, including the disclosures, and whether thenonconsolidated financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
We communicate with Audit &Supervisory Board members and the Audit & Supervisory Board regarding,among other matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during over audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statement that
we have complied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is required
to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
The above represents a translation, for convenience only, of the original report issued in the Japanese languageand "the accompanying supplemental schedules" referred to in this report are not included in the attachedfinancial documents.

57

(TRANSLATION ONLY)<Copy of the Audit Report of the Board of Audit & Supervisory Board>

AUDIT REPORTWith respect to the directors’ performance of their duties during the 47th business term from March 1,
2021 to February 28, 2022, we have prepared this Audit Report, through due deliberations based on theaudit reports prepared by each Audit & Supervisory Board Member, and hereby report as follows:
１．Auditing Methods Employed by the Audit & Supervisory Board Members and Audit & Supervisory
Board and Contents of Such Methods(1) We have established audit policies and audit plans for the current term, and received the reports fromeach Audit & Supervisory Board Member regarding their execution of audits and results thereof, as
well as reports from the Directors, other relevant personnel, and the Accounting Auditor regarding
the execution of their duties, and asked for explanations as necessary.
(2) Each Audit & Supervisory Board Member, pursuant to the auditing standards of Audit & Supervisory
Board Members established by the Audit & Supervisory Board, has followed the audit policies andaudit plans for the current term, communicated with the Directors, officers, internal audit department
and other relevant employees by using such means as the telephone and the Internet as necessary,endeavored to collect information and develop the audit environment, and performed the audit using
the following methods:(i) We have attended the Board of Directors meetings, the management meetings, Compliance &Risk management committee meetings, Internal Control over Financial Reporting committee
meetings and the like, and other important meetings, received reports from the Directors,
officers, internal audit department and other relevant employees regarding the execution of
their duties, asked for explanations whenever necessary, reviewed important approval
documents and the like, and investigated the status of operations and assets with regard to thehead office, area office, and other principal offices and stores. With respect to subsidiaries,
we have communicated and exchanged information with the Directors, Audit & Supervisory
Board Members and other relevant personnel of subsidiaries, requested the subsidiaries toreport on their business where necessary, and investigated their status of operations andassets.
(ii) Pursuant to the audit items and audit methods regarding internal control system established by
the Audit & Supervisory Board , we have monitored and verified the resolution of the Boardof Directors regarding the development of the system as prescribed by item (vi) of paragraph
4, Article 362 of the Companies Act and paragraph 1 and paragraph 3, Article 100 of theOrdinance for Enforcement of the Companies Act and the status of the development andoperation of the system based on such resolution (Internal Control System), as the system
necessary to ensure that the execution of the duties by the Directors, described in business
report, complies with laws and regulations and the Articles of Incorporation and other system
necessary to ensure the properness of operations of a Stock Company and corporate groupconsisting of its subsidiaries. In connection with internal control over financial reporting, we
received reports from the Directors and other relevant personnel, and Deloitte Touche
Tohmatsu LLC regarding the status of evaluation and audit of such internal control
respectively, and asked for explanations whenever necessary.
(iii) Regarding the transaction with the parent company described in the business report, we havecarefully examined the matter noted in item (v)-(a) of Article 118 of the Ordinance for58

(TRANSLATION ONLY)
Enforcement of the Companies Act and the judgment and its reasons in item (v)-(b) based on
the status of deliberations of the Board of Directors and others.

(iv) We have monitored and verified whether Accounting Auditor maintained its independence
and properly conducted its audit, and we received reports from Accounting Auditor regarding
the status of the execution of its duties and, whenever necessary, asked for explanations. In
addition, we have received the notice from the Accounting Auditor that “System for ensuring
proper execution of duties” (matters set forth in each item of Article 131 of the Company
Accounting Regulations) is organized in accordance with the “Quality Control Standards for
Audits” (Business Accounting Council, October 28, 2005) and the like, and, when necessary,
asked for explanations.
Based on the above methods, we have examined the “business report and the supplementary schedules
thereof,” the “consolidated financial statements (consolidated balance sheet, consolidated statement ofincome, consolidated statements of changes in net assets, and notes to consolidated financial statements)”
and “financial statements (balance sheet, statement of income, statements of changes in net assets, and notes
to financial statements) and supplementary schedules thereof” for this term.
1. Result of Audit(1) Result of Audit of Business Report and Other Relevant Documents(i) We have found that business report and the supplementary schedules thereof fairly present
the status of our company, in conformity with the applicable laws and regulations and the
Articles of Incorporation.
(ii) Regarding the execution of duties by the Directors, we have found no misconduct or material
matter that violates applicable laws and regulations or the Articles of Incorporation.
(iii) We have found that the content of the resolution of the Board of Directors regarding theInternal Control System is adequate. In addition, we have found no matters on which to give
remarks in regard to the relevant description in the business report and execution of duties
by the Directors concerning Internal Control System.
(iv) Regarding the transaction with the parent company described in the business report, we havefound no matters on which to give remarks in regard to the particulars being given due
consideration so as not to harm the interests of our company in carrying out the transaction
and the judgment of the Board of Directors and its reasons related to whether or not thetransaction would harm the interests of our company.
(2) Result of Audit of Consolidated Financial Statements
We have found that methods and the result of the audit by the Accounting Auditor, Deloitte Touche
Tohmatsu LLC, are adequate.
(3) Result of Audit of Financial Statements and Supplementary Schedules thereof.
We have found that methods and the result of the audit by the Accounting Auditor, Deloitte Touche
Tohmatsu LLC, are adequate.
April 8, 2022
The Audit & Supervisory Board of Lawson, Inc.
Audit & Supervisory Board Member
Shuichi Imagawa(full-time)
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(TRANSLATION ONLY)
Audit & Supervisory Board Member
Jun Miyazaki(full-time)
Outside Audit & Supervisory Board Member Eiko Tsujiyama
Outside Audit & Supervisory Board Member Yuko Gomi
Outside Audit & Supervisory Board Member Keiko Yoshida60

(TRANSLATION ONLY)REFERENCE DOCUMENT FOR THE GENERAL MEETING OF SHAREHOLDERS
Proposals and References
Proposal No. 1: Appropriation of Surplus
The Company regards the ROE (consolidated return on equity) as a significant management indicator and has been
conducting business activities. In addition, the Company’s policy for dividend payment is to set the target for
consolidated dividend payment ratio at 50%, with the stable minimum annual amount of ¥150 per share, while
securing internal reserves necessary for future business development during the course of sustainable growth of theLawson Group.
We intend to maintain year-end dividends for the current fiscal term at ¥75 per share, the same amount as in theprevious term. Accordingly, full-year dividends, including interim dividends of ¥75 per share, will be ¥150 per share.
We intend to continue to place emphasis on the distribution of profit to shareholders into the future.
We will endeavor to raise the Company’s corporate value by appropriating internal reserves for necessary business
investments such as opening new stores, renovating existing stores and new business development.
Year-end dividends:(1) The assignment of the dividend property to shareholders and total amount thereof:¥75 per share of the Company’s common stock at a total of ¥7,505,339,475(2) Effective date of the dividends from surplus:
Thursday, May 26, 2022

61

(TRANSLATION ONLY)[Reference: Changes in Dividends and Consolidated Dividend Payment Ratio]

Interim dividend
per share
Year-end dividend
per share
Annual dividend
per share
Consolidated net
income per share
Consolidated
dividend payment
ratio
ROE

42nd Term

43rd Term

44th Term

45th Term

46th Term

47th Term(Current Period)¥125¥127.50¥127.50

¥75

¥75

¥75

¥125

¥127.50¥127.50¥75¥75¥75 (Planned)

¥250

¥255

¥255

¥150

¥150

¥150 (Planned)¥363.96¥268.16¥255.71¥200.95¥86.84¥178.87

68.7%

95.1%

99.7%

74.6%

172.7%

83.9% (Planned)

13.5%

9.7%

9.3%

7.3%

3.2%

6.6%

Notes：
Consolidated dividend payment ratio is calculated based on annual dividend per share divided by consolidated net
income per share.

62

(TRANSLATION ONLY)
Proposal No. 2: Partial Amendment to the Articles of Incorporation
1. Reasons for amendment
The revising provisions stipulated in the proviso to Article 1 of the Supplementary Provisions of the “Act Partially Amending
the Companies Act” (Act No. 70 of 2019) are due to come into effect on September 1, 2022. Accordingly, to prepare to
introduce a system for providing materials for the General Meeting of Shareholders in electronic format, the Company will
amend its Articles of Incorporation as described below.
It has been stipulated under laws and regulations that certain parts of materials for the General Meeting of Shareholders are
deemed provided to shareholders by posting them on website, etc., on the Internet, and the Company has provided suchmaterials accordingly. Due to the revision of the Companies Act, however, starting with the General Meeting of Shareholdersof the Company to be held after March 1, 2023, the Company will post materials for the General Meeting of Shareholders on
the Company’s website, etc., on the Internet, making the materials available to shareholders, instead of sending paper copies
by mail, unless shareholders request the delivery of such paper copies. Accordingly, the Company will make required
amendment as below.
(1) Paragraph 1, Article 14 in the proposed amendment stipulates that the Company shall take measures for providing
information that is the content of reference documents, etc. for the General Meeting of Shareholders in electronic format.
(2) Paragraph 2, Article 14 in the proposed amendment establishes a provision for limiting the scope of matters to be
described in the paper copy delivered to shareholders who requested the delivery of such paper copy.
(3) Accordingly, the provision on Internet Disclosure and Deemed Provision of Reference Documents, etc., for the General
Meeting of Shareholders (the current Article 14 of the Articles of Incorporation) will become unnecessary, and theCompany will delete it.
(4) With the additions and deletion mentioned above, a supplementary provision concerning the effective date, etc., will beestablished.
2. Particulars of amendment
The particulars of the proposed amendment are described below.
(Suggested amendments are underlined in the text.)
Current Provision of the Articles of Incorporation

Proposed Amendment(Internet Disclosure and Deemed Provision of Reference
Documents, etc., for the General Meeting of Shareholders)
Article 141.
In convening a General Meeting of
Shareholders, the Company may disclose
information concerning matters required
to be described or presented in reference
documents for the General Meeting of
Shareholders, business reports,
nonconsolidated financial statements andconsolidated financial statements via theInternet in a manner set forth in theministerial ordinances of the Ministry ofJustice.
2.
In case of disclosure as set forth in thepreceding paragraph, the Company shallbe deemed to have provided information
concerning said matters to shareholders
pursuant to the ministerial ordinances ofthe Ministry of Justice.

(Newly established)(Deleted)(Provision of Materials for the General Meeting of
Shareholders in Electronic Format, etc.)
Article 141.
In convening a General Meeting of
Shareholders, the Company shall provide
information that is the content of thereference documents, etc., for the General
Meeting of Shareholders in an electronic
format.

63

(TRANSLATION ONLY)

Current Provision of the Articles of Incorporation(Newly established)

Proposed Amendment
2.

Among the matters provided in anelectronic format, the Company may omit
all or part of the matters that are permitted
to be omitted under the ministerial
ordinances of the Ministry of Justice in thepaper copy that will be delivered toshareholders who requested the delivery ofsuch paper copy by the record date forvoting rights.
(Supplementary Provisions)(Newly established)
1.

2.

3.

64

The deletion of the former Article 14 of the
Articles of Incorporation (Internet Disclosure
and Deemed Provision of Reference
Documents, etc., for the General Meeting of
Shareholders) and the establishment of theamended Article 14 in the Articles ofIncorporation (Provision of Materials for the
General Meeting of Shareholders inElectronic Format, etc.) shall be effectivefrom September 1, 2022, the date ofenforcement of revising provisions provided
for in the proviso to Article 1 of the
Supplementary Provisions of the Act Partially
Amending the Companies Act (Act No. 70 of2019) (hereinafter, “Date of Enforcement”).
Notwithstanding the provisions of thepreceding paragraph, the former Article 14 of
the Articles of Incorporation shall remain
effective regarding any General Meeting of
Shareholders held on a date within six months
from the Date of Enforcement.
These Supplementary Provisions shall bedeleted after the date when six months havepassed from the Date of Enforcement or threemonths have passed from the date of theGeneral Meeting of Shareholders in thepreceding paragraph, whichever is later.

(TRANSLATION ONLY)
Proposal No. 3: Election of Five (5) Directors
The terms of office of all seven (7) Directors expire at the conclusion of this 47th Ordinary General Meeting of
Shareholders. Accordingly, we propose the election of five (5) Directors, including one (1) new candidate, after
reducing the number of Directors by two (2) in order to further streamline the management system.
The Company has endeavored to ensure management transparency and fairness, and has a rule to appoint
Independent Directors equaling one-third or more of the Board’s composition. If this proposal is approved and passed,
there will be five (5) Directors of the Company after the meeting of shareholders, of which two (2) will be Outside
Directors. All of the Outside Directors are “Independent Directors/Audit and Supervisory Board Members.” Therefore,
we propose that you continue to elect Independent Directors equaling one-third or more of the Board’s composition.
The candidates for directors are as stated in the following table. Please refer to pages 66 to 71 for the brief personal
histories of the indicated candidates.
Furthermore, please refer to page 73 for the policy and procedures of the Company’s Board of Directors fornominating candidates for Directors.

Position at the Company, etc.

Board ofDirectors’
meeting
attendance
rate

No.

Name

1

Sadanobu Takemasu

President,
Representative Director

Reappointment

100%

2

Masayuki Itonaga

Financial
Administration Division

New appointment–

3

Miki Iwamura

Member of the Board

Reappointment, outside,
independent

100%

4

Satoko Suzuki

Member of the Board

Reappointment, outside,
independent

100%

5

Kiyotaka Kikuchi

Member of the Board

Reappointment

100%

Notes:
1. Ms. Miki Iwamura’s legal name is Miki Oku.
2. Positions at the Company, etc., are as of April 11, 2022.

65

(TRANSLATION ONLY)

Brief Personal History, Position, Assignment and Important
Concurrent Positions

No.
1

April 1993

Joined Mitsubishi Corporation

June 2010

Executive Assistant to President and Chief Executive Officer,
Corporate Administration Department and Corporate Strategy
and Planning Department, Mitsubishi Corporation

May 2014

Senior Executive Vice President, Representative Director,
Division Director of Corporate Sales Division ― Lawson
Mart, Lawson, Inc.

March 2016

Senior Executive Vice President, Representative Director― Corporate Staff Divisions; SEIJO ISHII, Natural Lawson
and Lawson Store100 Business; Overseas Business; andEntertainment and Consumer Service Business, andDivision Director of Corporate Sales and Store Development
Division, Lawson, Inc.

■Number of the Company’s
shares held:
8,900

June 2016

President and COO, Representative Director, Lawson, Inc.

March 2017

President, Representative Director, and Division Director ofMarketing Division, Lawson, Inc.

■Attendance at Board of
Directors’ meetings
15 out of 15 (100%)

September 2017

President and CEO, Representative Director, Chairman of theBoard, CHO, and Division Director of Entertainment
Business Division, Lawson, Inc.

February 2019

President and CEO, Representative Director, Chairman of theBoard, CHO, and Division Director of Marketing Division,Lawson, Inc.

March 2019

President and CEO, Representative Director, Chairman of theBoard, CHO, and Division Director of Marketing Strategy
Division, Lawson, Inc.

March 2020

President and CEO, Representative Director, Chairman of theBoard, and CHO, Lawson, Inc.

March 2021

President and CEO, Representative Director, Chairman of theBoard, and CSO, Lawson, Inc. (Current position)

Sadanobu Takemasu(August 12, 1969)
Reappointment■Years in office

Eight years (as of theconclusion of themeeting ofshareholders)

Reasons for nomination as Director
Mr. Sadanobu Takemasu has been nominated as a candidate for Director of theCompany as he has led the entire Group with a focus on the domestic convenience
store business, as well as contributed to the improvement of corporate value and theachievement of sustainable corporate management as President and CEO,
Representative Director, Chairman of the Board, and CSO of Lawson, Inc. We would
like to continue to benefit from his management and supervision of the Company byleveraging his experience.

Particular conflicts of interest between the Candidate andLawson, Inc.
There are no particular conflicts of interest between the Candidate and Lawson, Inc.

66

(TRANSLATION ONLY)

Brief Personal History, Position, Assignment and Important
Concurrent Positions

No.
2

April 1990

Joined Information Systems and Services Administration
Department, Mitsubishi Corporation
Trade Finance Team, International Finance Department,
Mitsubishi Corporation

March 1995
August 1997

Accounting Department, Kansai Branch, Mitsubishi
Corporation

December 2000

Seconded to Bridgestone Sales (Thailand) Co., Ltd. in
Thailandas Financial and Administrative Director

January 2006

Assistant General Manager, Administration Department,
Living Essentials Group, Mitsubishi Corporation

New appointment

April 2012

■Number of the Company’s
shares held:

Seconded to Princes Limited in the U.K.
as Group Corporate Control Director

March 2016

Deputy General Manager, Administration Department,
Metals Group, Mitsubishi Corporation

March 2018

Representative Director, President and CEO, Mitsubishi
Corporation Financial and Management Services (Japan)
Ltd.

April 2022

Financial Administration Division, Lawson, Inc. (Current
position)

Masayuki Itonaga(February 7, 1967)—

Reasons for nomination as Director
Mr. Masayuki Itonaga has been nominated as a candidate for Director, as he has awealth of knowledge on administrative operations in general, mainly in financeand accounting, through his duties at Mitsubishi Corporation, the parent companyof Lawson, Inc., as well as his secondment to overseas companies. Having served
as Representative Director, President and CEO of Mitsubishi Corporation
Financial and Management Services (Japan) Ltd., a subsidiary of Mitsubishi
Corporation, Mr. Itonaga also has extensive knowledge on corporate managementin general. We would like to benefit from his supervision of the Company’s
management by leveraging his experience.

Particular conflicts of interest between the Candidate andLawson, Inc.
There are no particular conflicts of interest between the Candidate and Lawson,
Inc.

67

(TRANSLATION ONLY)

Brief Personal History, Position, Assignment and Important
Concurrent Positions

No.

3

Miki Iwamura

April 1988

Joined Dentsu Inc. (currently Dentsu Group Inc.)

October 1995

Joined Booz Allen Hamilton Inc.

October 2001

Associate Professor (Management Strategy, Marketing
Strategy), Nihon University

July 2003

Brand CEO of Mimiso NY, Richemont Japan K.K.

July 2007

Chief Marketing Officer, Google Japan Inc. (currently
Google Japan G.K.)

May 2015

Managing Director, APAC Brand and Marketing, CMO
Japan, Google G.K.

(October 24, 1965)
May 2018

Outside Director, Lawson, Inc. (Current position)

Reappointment, outside,
independent

May 2019

Vice President, APAC & Japan Marketing, Google G.K.
(Current position)■Number of the Company’s
shares held:

April 2021

Executive Vice President, Tokyo University (Current
position)

700■Attendance at Board of
Directors’ meetings
15 out of 15 (100%)■Years in office

Four years (as of theconclusion of the meetingof shareholders)

Reasons for nomination as Outside Director and expected roles
Ms. Miki Iwamura has been nominated as a candidate for Outside Director, as she
has deep insight into management, marketing, and brand reinforcement using digitalbig data through business execution as Vice President, APAC & Japan Marketing,
Google G.K. In addition, she has been proactively making suggestions anddisseminating information on workstyle reforms and the promotion of women’s
advancement in the workplace. We have been receiving her proactive opinions andsuggestions regarding the Company’s management at Board of Directors’ meetings,
and we would like to continue to benefit from her supervision of the Company’s
management by leveraging her experience.
Ms. Iwamura serves as a member of the Company’s Nomination and Compensation
Advisory Committee, which consists exclusively of non-executive directors andoutside Audit and Supervisory Board members (part-time). She has also beenregistered as an Independent Director/Audit and Supervisory Board Member with theTokyo Stock Exchange, Inc., pursuant to the rules specified by the exchange.

Particular conflicts of interest between the Candidate andLawson, Inc.
There are no particular conflicts of interest between the Candidate and Lawson, Inc.
Ms. Miki Iwamura’s legal name is Miki Oku.

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Brief Personal History, Position, Assignment and Important
Concurrent Positions

No.

4

April 1999

Joined Nihon L’Oreal KK

September 2006

Joined Boston Consulting Group K.K.

September 2011

Lecturer, Graduate School of Management, Kyoto
University

April 2016

Associate Professor, Graduate School of Management,
Kyoto University

April 2017

Associate Professor, The School of International Corporate
Strategy at the Graduate School of Business Administration,
Hitotsubashi University (Current position)

May 2020

Outside Director, Lawson, Inc. (Current position)

June 2022

Outside Director, Stanley Electric Co., Ltd. (Scheduled toassume office)Satoko Suzuki(November17, 1977)
Reappointment, outside,
independent

Reasons for nomination as Outside Director and expected roles■Number of the Company’s
shares held:
200■Attendance at Board of
Directors’ meetings
15 out of 15 (100%)■Years in office

Two years (as of theconclusion of the meetingof shareholders)Ms. Satoko Suzuki has been nominated as a candidate for Outside Director, as she
has a wealth of academic knowledge on consumer behavior, marketing and brandmanagement. She has also served as a member of public and private committees
related to “hospitality management” and “globalization of service industry,”
published many papers, presented at academic conferences and received awards.
We have been receiving her proactive opinions and suggestions regarding theCompany’s management at Board of Directors’ meetings, and we would like tocontinue to benefit from her supervision of the Company’s management byleveraging her experience.
Ms. Suzuki serves as a member of the Company’s Nomination and Compensation
Advisory Committee, which consists exclusively of non-executive directors andoutside Audit and Supervisory Board members (part-time). She has also beenregistered as an Independent Director/Audit and Supervisory Board Member with
the Tokyo Stock Exchange, Inc., pursuant to the rules specified by the exchange.

Particular conflicts of interest between the Candidate andLawson, Inc.
There are no particular conflicts of interest between the Candidate and Lawson, Inc.

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Brief Personal History, Position, Assignment and Important
Concurrent Positions

No.

5

Kiyotaka Kikuchi(November 19, 1966)
Reappointment■Number of the Company’s
shares held:—■Attendance at Board of
Directors’ meetings
12 out of 12 (100%)■Years in office
One year (as of theconclusion of the meeting ofshareholders)April 1989

Joined Mitsubishi Corporation

June 2009

Seconded to Itoham Foods Inc. as Director Executive
Officer

February 2013

Living Essentials Group CEO Office, Mitsubishi
Corporation

April 2014

General Manager, Food Retail Dept., Retail Div., Mitsubishi
Corporation

October 2015

Deputy Division COO, Living Essential Resources Div.,
Mitsubishi Corporation

April 2016

Division COO, Fresh Food Products Div., Mitsubishi
Corporation

April 2017

General Manager, Living Essentials Group CEO Office,Mitsubishi Corporation

April 2019

General Manager, Consumer Industry Group CEO Office,Mitsubishi Corporation

April 2020

Senior Vice President, General Manager, Consumer Industry
Group CEO Office, Mitsubishi Corporation

April 2021

Executive Vice President, Group CEO, Consumer Industry
Group (Concurrently) Division COO, Retail Div.,
Mitsubishi Corporation (Current position)

May 2021

Member of the Board, Lawson, Inc. (Current position)

Reasons for nomination as Director
Mr. Kiyotaka Kikuchi has been nominated as a candidate for Director, as he has awealth of knowledge on the consumer industry field, mainly in the food industry,
through his duties at Mitsubishi Corporation, the parent company of Lawson, Inc.,as well as his secondment to a meat processing manufacturer. We have been
receiving his proactive opinions and suggestions regarding the Company’s
management at Board of Directors’ meetings, and we would like to continue tobenefit from his supervision of the Company’s management by leveraging his
experience.
Mr. Kikuchi serves as a member of the Company’s Nomination and Compensation
Advisory Committee, which consists exclusively of non-executive directors andoutside Audit and Supervisory Board members (part-time).

Particular conflicts of interest between the Candidate andLawson, Inc.
There are no particular conflicts of interest between the Candidate and Lawson, Inc.

Notes:
1. In accordance with Article 24 of the current Articles of Incorporation, Lawson, Inc. has concluded the following
liability limitation agreements with Ms. Miki Iwamura, Ms. Satoko Suzuki and Mr. Kiyotaka Kikuchi. Under theliability limitation agreement concluded with the Company, Directors (excluding those who are executive
directors, etc.) assume liability for damages specified in Article 423, Paragraph 1 of the Companies Act within alimit not exceeding the amount stipulated by laws and regulations, provided that they have performed duties
which resulted in a cause of such liability in good faith without gross negligence.
2. The Company has entered into indemnity agreements as prescribed under Article 430-2, Paragraph 2 of theCompanies Act with all of its Directors and Audit and Supervisory Board Members, whereby the Company shallindemnify the expenses set forth in item (i) of the said Paragraph and the losses set forth in item (ii) of the saidParagraph within the limits prescribed by laws and regulations. The Company plans to conclude the same
indemnity agreement with Mr. Masayuki Itonaga if he is elected and assumes office as a Director.
3. The Company has concluded corporate officer liability insurance (D&O insurance) contract designating its
Directors and Audit and Supervisory Board Members as the insured. The insurance contract covers damages suchas indemnities and contentious expenses based on the legal liability for damages incurred by the insured due toactions taken by the insured as an officer of the Company. If each of the candidates is elected and assumes office
as a Director, all of such Directors will be insured under the said insurance contract. The term of the insurance

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(TRANSLATION ONLY)
4.

contract is one (1) year, and it is scheduled to be renewed by resolution of the Board of Directors before theexpiration of the term.
The information in nominees’ Brief Personal Histories, Positions, Assignments and Important Concurrent Positions iscurrent as of April 11, 2022.

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(TRANSLATION ONLY)
Reference: Proposed management system following the approvals of Proposals No. 3
Main areas of experience and expertise
Name

Sadanobu
Takemasu
Masayuki
Itonaga
Miki
IwamuraSatokoSuzuki
Kiyotaka
KikuchiPosition

Nomination andOutside Independent Compensation Years in
Corporate
officer
officer
Advisory
officemanagement
Committee

President andCEO,
Reappointment
Representative
Director
Member of theBoard,
New
Executive Viceappointment
President

8

●

0

●
●

Member of theReappointment
Board

○

○

○

4

Member of theReappointment
Board

○

○

○

2

○

1

Member of theReappointment
Board

Audit andSupervisory Board
Member (fulltime)
Audit andSupervisory Board
Jun Miyazaki Member (fulltime)
Audit and
Eiko
Supervisory Board
Tsujiyama
MemberAudit and
Yuko Gomi Supervisory Board
MemberAudit and
Keiko
Supervisory Board
YoshidaMember

ShuichiImagawaNew
appointment /reappointment

Corporatefinance /accounting

Legal affairs/
compliance andriskMarketing

IT/DX

Globalexperience

●

●

●

●

●

●
●
●

●

Franchise orretail business

●

●

●
●

●

●

●

－

2

●

●

●

－

1

●

●

●

－

○

○

◎

11

－

○

○

○

3

－

○

○

○

2

●
●
●

Notes:
1.
Members of the Board with titles and members of the Nomination and Compensation Advisory Committee will be determined at the Board of Directors’
meeting after the General Meeting of Shareholders, while Audit and Supervisory Board Member (full-time) will be determined at the Audit andSupervisory Board meeting after the General Meeting of Shareholders
2.
The double circle, ◎, indicates the chair, who will be elected by the committee members.

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(TRANSLATION ONLY)[Reference] Policy and procedures of the Company’s Board of Directors for nominating candidates
for Directors and Audit and Supervisory Board members
Lawson, Inc. has established the Director/Audit and Supervisory Board Member Election Standard as the basis fornominating candidates for directors and Audit and Supervisory Board members. Those with different expertise andexperience are nominated as candidates for directors to ensure diversity of the Board of Directors as a whole and tocarry out appropriate decision making and supervision. Furthermore, in addition to the independence standard specified
by the Tokyo Stock Exchange, Inc., we have established our own criteria concerning independence in order to appoint
two or more Independent Directors/Audit and Supervisory Board Members who are unlikely to have a conflict ofinterest with general shareholders in an effort to ensure transparency and fairness of management.
In addition, as an advisory organ that recommends candidates for directors, candidates for representative directors,
and posts to the Board of Directors, we have voluntarily established a Nomination and Compensation Advisory
Committee. All seven members of the committee are non-executive directors or Audit and Supervisory Board members(part-time), with six being Independent Directors/Audit and Supervisory Board Members. The committee is designed torecommend candidates for directors, candidates for representative directors, and posts to the Board of Directors with ahigh level of independence. In the event that a director or representative director engages in an act that significantly
damages corporate value or ceases to satisfy the Director/Audit and Supervisory Board Member Election Standard after
assuming his/her post, a dismissal or other treatment will be considered after consultation with the Committee.
As for candidates for Audit and Supervisory Board members, those with knowledge and expertise in finance,accounting, risk management and law, which are necessary for auditing operations, are nominated as candidates for
Audit and Supervisory Board members upon obtaining the consent of the Audit and Supervisory Board.

1.

Director/Audit and Supervisory Board Member Election Standard(1) A person who can deeply relate to the Lawson Group’s corporate philosophy of “Creating Happiness and Harmony
in Our Communities”(2) A person who has the capability to contribute to the sustainable growth and corporate value improvement of theLawson Group(3) A person who has no hindrance in health, both physically and mentally, in the performance of his/her duties(4) A person who is popular, possesses dignity, impeccable ethics, and a law-abiding spirit(5) A person who has objective decision-making abilities and is gifted with both foresight and insight(6) A person who has a wealth of experience and knowledge on corporate management and an area of expertise(7) A person who is able to secure enough time to do the job(8) A person who does not fall under the criteria for disqualification provided by the Companies Act(9) For Independent Directors/Audit and Supervisory Board Members, a person who does not conflict with the Criteria
concerning Independence as specified by the Company

2. Criteria concerning Independence
Besides the independence standard specified by the Tokyo Stock Exchange, Inc., we have established our own
Criteria concerning Independence. Outside directors or outside Audit and Supervisory Board members who do notconflict with either of them are appointed as Independent Directors/Audit and Supervisory Board Members.
(1) A person for whom the Lawson Group is a key business partner, or an executive officer thereof
A supplier group who provides products or services to the Lawson Group, with the amount of sales to the Lawson
Group in the most recent business year amounting to 2% of the supplier group’s consolidated net sales or more
(2) A key business partner of the Lawson Group, or an executive officer thereof
A client group to whom the Lawson Group provides products or services, with the amount of sales of the Lawson
Group to the client group in the most recent business year amounting to 2% of the Lawson Group’s consolidated net
sales (gross operating revenues) or more
(3) A consultant, accounting expert or legal expert who receives substantial monies or other property from the Lawson
Group other than as director/Audit and Supervisory Board member remuneration.
A consultant, accounting expert such as a certified public accountant, or a legal expert such as a lawyer, who receives
substantial monies or other property from the Lawson Group other than as director/Audit and Supervisory Board
member remuneration, and who has received compensation of 5 million yen per year or more over the past two years(4) A major shareholder of Lawson, Inc. (if the major shareholder is a corporation, an executive officer of thecorporation)(5) (A close relative is) An executive officer of the Lawson Group(6) (A close relative is) A non-executive director or accounting advisor (if the Independent Director/Audit andSupervisory Board Member is an outside Audit and Supervisory Board member) of the Lawson Group(7) A person whose total term of office at the time of re-appointment exceeds eight years for outside director and 12
years for outside Audit and Supervisory Board member
Even if the person falls under any of the above, said person can be elected as a candidate for an independent outside
director/Audit and Supervisory Board member if the Board of Directors deems said person to have substantial
independence. In such case, the reason will be explained and disclosed at the time of his/her election as outside
director/Audit and Supervisory Board member.

73