(TRANSLATION ONLY)
Securities code: 2651
May 8, 2009
To Those Shareholders With Voting Rights
Takeshi Niinami
Representative Director
LAWSON, INC.
11-2, Osaki 1-chome, Shinagawa-ku, TokyoNOTICE OF THE 34th ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 34th Ordinary General Meeting of Shareholders to be held as follows.
If you are unable to attend the meeting, please exercise your voting rights using either of the methods described below after
reading the attached REFERENCE DOCUMENT 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 Monday, May 25, 2009.
[Voting by Electronic Means (Internet, etc.)]
Please exercise your voting rights by 5:45 p.m. on Monday, May 25, 2009 after reading the attached document “Exercising
Voting Rights via the Internet, etc.”
1. Date and Time: 10:00 a.m., Tuesday, May 26, 2009
2. Place: Melpark Hall, 5-20, Shiba-Koen 2-chome, Minato-ku, Tokyo
3. Objectives of the Meeting
Reports
The Business Report, the Consolidated Financial Statements and the Non-Consolidated Financial Statements for the 34th
Fiscal Term (from March 1, 2008 to February 28, 2009), as well as the Audit Reports Thereof
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 One (1) Corporate Auditor•••

For those attending, please present the enclosed Voting Rights Exercise Form at the reception desk on arrival at the meeting. Pleasearrive a little early because the reception desk can be congested immediately before the meeting begins.
If you wish to exercise your voting rights by proxy, your proxy is requested to present a document evidencing his/her proxy, such asa power of attorney, together with the Voting Rights Exercise Form in the proxy’s own name at the reception desk. (The qualified
proxy is limited to one shareholder having voting rights for this meeting as per the relevant provision in the Articles ofIncorporation.)
If any amendment is made to this notice, such amendment will be posted on the Company’s Web site. Results of resolutions will
also be posted on the Company’s Web site, but not sent by mail as in the past.
(http://www.lawson.co.jp/company/ir/index.html)

1

(TRANSLATION ONLY)
BUSINESS REPORT(March 1, 2008 through February 28, 2009)
I. CURRENT STATUS OF THE CORPORATE GROUP
1. Summary of Operations(1) Business Developments and Results of Operations
During fiscal 2008, the year ended February 28, 2009, the Japanese economy faced an increasingly uncertain outlook. Thiswas due to climbing prices for daily necessities amid rising prices for crude oil and raw materials since the previous fiscal
year, as well as to the increasing severity of the global financial crisis from the third quarter. In annualized terms, Japan’s
GDP for the October-December quarter of 2008 contracted at the fastest rate since the first oil shock in 1973. As economic
conditions worsened, consumers increasingly tightened their belts mainly due to concerns over job security and fallingpersonal income that were prompted by sluggish corporate results in the wake of plummeting exports.
In Japan’s retail industry, major developments included growth in sales of PB (private brand) goods in response toincreasingly conservative consumer spending patterns and capital alliances and operational tie-ups between major GMS(General Merchandise Store) chains and drugstores against the backdrop of the amendments to the Pharmaceutical Affairs
Act that come into effect in 2009.
In the convenience store (CVS) industry, although fierce competition persisted in terms of both store openings andmerchandise development, all CVS companies posted strong existing-store sales. Among other factors, more customers
visited stores, driven by the introduction of cigarette vending machines that require taspo cards (adult identification IC
cards) to make a purchase. Favorable weather conditions were another factor that benefited sales.
In this operating environment, the LAWSON Group (the “Company”) took steps with the aims of realizing its corporate
philosophy of “Happiness and Harmony in our Community,” and improving customer satisfaction in convenience store
operations and other businesses.
In terms of our operating results, total operating revenues increased 16.0% to ¥349,476 million, partly due to a ¥9,484
million increase in franchise commissions from franchised stores. Ordinary profit rose ¥2,542 million, or 5.5%, to ¥48,787
million. Net income climbed ¥3,187 million, or 14.4%, year on year to ¥25,306 million.
Operating results by business segment were as follows:
Convenience Store Operations
Merchandise Strategy and Services
On the merchandise front, in addition to focusing on developing merchandise assortments that appeal to a wide range ofcustomer groups, the Company also developed several dishes with generous servings that are aimed at its traditional corecustomer base of young men. These dishes included Genki Na Omori Katsudon (super-size pork cutlet rice bowl) andNiku-tappuri Hiyashi Chuka (cold Chinese egg noodles with extra white meat topping). In sales promotions, the Company
conducted campaigns with a stronger emphasis on entertainment based on the “Lawson Genki Plan” (in Japanese Genkimeans to be vibrant, cheerful, and vigorous). The Fall Rilakkuma Fair campaign, which ran from September throughNovember 2008, helped immensely in expanding new customer groups, including women. Furthermore, the Company
launched sales of Lemon Flavor Karaage-kun to a strong customer response. The launch of this new lemon-seasoned
Japanese-style fried chicken was based on the results of a customer survey.
On the services front, the Company’s bill settlement services processed more than 156 million transactions for customers,
representing a total transaction value of ¥1,506.5 billion. Meanwhile, ATMs (automatic teller machines) were installed instores in 1 new prefecture, bringing the total number of prefectures with LAWSON stores that have ATMs to 37. Strong
subscriber support has enabled the membership cards, LAWSON PASS and MY LAWSON POINT, to enroll
approximately 8.5 million members, reflecting aggressive membership promotions.
On December 1, 2008, the Company began allowing LAWSON PASS and MY LAWSON POINT members to exchange
shopping points on their cards for discounts on purchases at the check-out counter, at the rate of ¥1 for every shopping
point.

2

Store Operations
In store operations, the Company continued providing guidance to franchise owners in order to ensure merchandise
assortments match customer needs in each location. Guidance is continuously provided to individual stores based on athorough understanding of the customers in each area so as to create merchandise assortments that will satisfy thesecustomers.
In specific terms, the Company endeavored to increase ordering accuracy by refining and making greater use of store charts,
a decision-making tool created from analyses of marketing and management at the individual store level. The aim is tominimize lost sales opportunities, which result from stores being out of stock when a product is needed by customers, and to
reduce product disposal losses, which are incurred by franchise owners when disposing of unsold products.
Furthermore, the Company has commenced store guidance activities designed to promote ordering based on the customer’s
perspective (via a new ordering system planned for deployment in fiscal 2009).
The Company continued to implement the “Mystery Shopper” program, which helps to strengthen store operation
capabilities. In this program, “undercover” researchers visit individual LAWSON stores as ordinary shoppers andobjectively and quantitatively evaluate them from a customer’s perspective.
Store Development
The Company worked to develop stores that it expects to generate high earnings, by rigorously adhering to proprietary
standards for opening stores. This entailed concentrating on opening new stores mainly in major metropolitan areas in the
Kanto, Kinki and Chubu regions. As a result, daily sales at new stores grew steadily.
Ninety-nine Plus Inc., which became a consolidated subsidiary on September 5, 2008, is working to achieve further growth
as a member of the LAWSON Group, based around a convenience store business specializing in perishable foods that canmeet the needs of housewives and middle-aged and elderly customers.
[Change in Total Number of Stores] (March 1, 2008 to February 28, 2009)(Stores)Total
LAWSON
NATURALLAWSONLAWSONSTORE100 and
SHOP99Total stores as of
8,424
91
72
8,587
February 29, 2008
Change during fiscal
85
2
853
940
year
Total stores as of
8,509
93
925
9,527
February 28, 2009
As of December 31, 2008, SHANGHAI HUALI AN LAWSON CO., LTD., a Chinese equity-method affiliate operating a
convenience store chain in Shanghai, had 300 stores.

3

Corporate Social Responsibility (CSR) Activities
In the CSR field, the CSR Promotion Office, which reports directly to the president, continued to lead environmental
protection and social contribution activities, working together with franchise owners and employees. The Company actively
took part in disaster restoration and relief activities, including raising disaster relief funds and providing emergency relief
supplies to areas affected by typhoons, earthquakes and other disasters. At the fiscal year-end, the total funds raised for the“Green Fund” and disaster relief funds since 1992 amounted to approximately ¥3.6 billion. Turning to waste reduction
efforts, by the end of the fiscal year the Company’s food recycling rate had reached roughly 24% thanks to waste reductions
achieved by recycling cooking oils, promoting the conversion of food waste into animal feed and fertilizers, and using
composting machines. Furthermore, in order to make more effective use of limited resources, in March 2007 the Company
began a “Carry-It Campaign,” which encourages customers to carry regularly their own shopping bags and chopsticks to
reduce usage of plastic bags and disposable wooden chopsticks. Since the beginning of the campaign, a total of
approximately 2 million "Convenience Store Eco-bags” have been distributed, mainly at stores. In recognition of its actions,
LAWSON was awarded the “Minister of Economy, Trade and Industry Award” and the “Minister of the Environment
Award for excellence in packaging” at the Achievement in Promoting 3R (Reduce, Reuse, Recycle Activities) Awards. In
addition, by the end of the fiscal year, approximately 7,200 tons of CO2 had been offset through the Company’s carbon
offset program, an initiative launched in April 2008 that allows customers to contribute to reducing CO2 by purchasing
carbon credits using their accumulated shopping points or cash, or by purchasing products designated for carbon offset.
Moving forward, working together with customers, the Company will continue its environmental protection and social
contribution activities.
Other Activities
In terms of business alliances, on January 21, 2009 LAWSON reached an agreement with SAN-A CO., LTD., which
operates supermarkets and other businesses mainly in Okinawa, for a tie-up in Okinawa Prefecture. Going forward, the twocompanies will look at collaborating on developing boxed lunches and prepared foods made from local ingredients, newproduct proposals, and store openings, as well as exchange information on strong-selling products, and conduct joint sales
promotions.
Furthermore, on March 13, 2009, LAWSON concluded a transfer agreement with REX Holdings Inc. to purchase all of theshares in and receivables of am/pm convenience store operator am/pm Japan Co., Ltd. owned by REX Holdings. Thisacquisition was originally scheduled to take place on March 30, but has been postponed because LAWSON decided that
continued discussions were necessary regarding terms and conditions of the transfer agreement in order to ensure a seamlessacquisition.
During fiscal 2008, the Company continued its efforts to improve internal control systems and instill awareness ofcompliance issues throughout the entire organization, based on the “2008 Basic Policy for Maintaining Internal Control
Systems.”[Total Operating Revenues in the Convenience Store Business]
Total Operating Revenues (¥ millions)Year on Year (%)
327,530
115.9[Net Sales at All LAWSON Stores in the Convenience Store Business]
Product Group
Sales (¥ millions)Composition Ratio (%)
Processed foods
844,324
54.2
Fast foods
332,894
21.4
Daily delivered foods
186,109
11.9
Non-food products
195,453
12.5
Total
1,558,781
100.0Year on Year (%)
116.2
101.6
114.4
98.6
110.2

Other Businesses
In addition to convenience store operations, the LAWSON Group is involved in ticket sales, financial services, and otherbusinesses.
LAWSON TICKET INC., which operates the ticket sales business, recorded year-on-year gains in ticket sales and operating
profit thanks to robust concert ticket sales, a mainstay of this business.
LAWSON ATM Networks, Inc., which operates a financial services-related business, performed strongly as a result of4increases in the number of ATM machines installed nationwide in LAWSON stores and in the number of transactions. As of
February 28, 2009, the number of ATMs installed nationwide was 5,970.
[Total Operating Revenues in Other Businesses]
Total Operating Revenues (¥ millions)
26,265

Year on Year (%)111.8(2) Capital Expenditures and Financing
Capital expenditures of the LAWSON Group during the year totaled ¥36,392 million, of which ¥25,153 million was
primarily for store facility investment in land and buildings, and ¥11,101 million was for the reinforcement of information
systems.
The LAWSON Group’s own funds were used for all the capital expenditures during the year ended February 28, 2009.
(3) Changes in Operating Results and Financial Position
1) Changes in Operating Results and Financial Position of the Corporate Group
Category/Fiscal
Fiscal 2005
Fiscal 2006
Fiscal 2007
Term
31st Term
32nd Term
33rd Term
Total operating
268,058
283,053
301,176
revenues(¥ millions)
Ordinary profit
43,94044,646
46,244(¥ millions)
Net income
22,02520,983
22,119(¥ millions)
Net income per215.50201.50214.69share (¥)
Total assets
375,106
398,258
397,107(¥ millions)
Net assets
175,184
199,493
188,573(¥ millions)
Net assets per
1,712
1,868
1,867
share (¥)

5

Fiscal 2008
34th Term
349,476

48,78725,306255.22436,171203,178
1,983

2) Changes in Operating Results and Financial Position of the Company
Category/Fiscal
Term
Total net sales of
LAWSON storesincludingfranchised stores(¥ millions)
Total operating
revenues(¥ millions)
Ordinary profit(¥ millions)
Net income(¥ millions)
Net income pershare (¥)
Total assets(¥ millions)
Net assets(¥ millions)
Net assets per
share (¥)

Fiscal 2005
31st Term
1,360,495

Fiscal 2006
32nd Term
1,377,842

Fiscal 2007
33rd Term
1,402,786

Fiscal 2008
34th Term
1,506,312

248,041

256,023

269,582279,739

43,63944,52645,29847,321

22,707

21,73318,89922,066222.18208.70183.43222.54368,276

389,109385,335

402,117

179,505

200,257

187,146

195,634

1,754

1,917

1,886

1,969

(4) Pressing Issues
In fiscal 2009, Japan’s economy is expected to continue worsening based on the strong yen resulting from economic
stagnation in the U.S. and Europe, and other factors. It is therefore unlikely that we will see any improvement in consumer
spending, which has been weakened by concerns about job security and declining personal income due to sluggish corporate
results.
Furthermore, the competitive landscape facing the convenience store industry is undergoing increasingly tumultuous change.
Conventional convenience store businesses offer merchandise assortments and services principally aimed at the core targetof young men in their 20s and 30s whose priority is time saving and convenience. If the Company adheres to thisconventional format, it will be unable to avoid a battle of attrition between undifferentiated convenience stores in a mature
market. This will in turn make it increasingly difficult to achieve stable and sustainable growth in an aging society with afalling birthrate.
In this environment, the LAWSON Group is pursuing a strategy aimed at creating stores that bring joy to customers, as
outlined in the management policy for fiscal 2009 “Your Choice of CVS LAWSON –Cheerful and Happy Communities –”.
In line with this policy, the Company will carry out the following measures.
(i) Enhance existing customer satisfaction
In order to offer merchandise assortments and develop shopping facilities that suit the needs of customers in each “Machi”(store location), the Company is making use of data gathered from the 8.5 million LAWSON PASS and MY LAWSONPOINT card members to create customer-oriented merchandise assortments.
Concerning merchandise, LAWSON will base its product development efforts on market analysis, particularly on data
gathered from the card member programs, in order to develop products that reflect customer’s opinions. In addition, theCompany will pass the benefits of the lower cost of fuel and raw materials and the strong yen on to customers. Moreover, inorder to enhance ties with local communities, the Company will work together with local governments to promote
initiatives targeting local and non-local consumption of locally produced products.
With regard to sales promotions, the Company will seek to utilize the LAWSON PASS and MY LAWSON POINT
membership cards in an effective manner.
These measures are also expected to lead to a greater number of customers and generate higher revenues, thereby raising thesatisfaction levels of franchised store owners.
6

(ii) Improve asset efficiency by opening high-quality new stores and curbing store closures
LAWSON aims to improve asset efficiency as a whole by developing high-quality stores in accordance with proprietary
store opening guidelines and reducing extraordinary losses from store closures by reducing store closures.
(iii) Strengthen personnel development
In accordance with its management policy and action guidelines, LAWSON is determined to nurture people who can think
for themselves and not rely on direction from the top. In addition, personnel rotations are implemented to prepare future
management candidates.
(iv) Introduce next-generation IT systems
LAWSON will introduce next-generation IT systems during fiscal 2009, with a view to revamping merchandise assortments
based on customer-generated data. By doing so, the Company expects to reduce lost sales opportunities at stores and losses
from product disposals while improving ordering precision and enhancing product development.
(v) Improve internal controls
The Company will follow its “2009 Basic Policy for Maintaining Internal Control Systems,” to implement the necessary
frameworks for ensuring legal compliance, information storage and control and risk management. In addition, regarding
internal controls over financial reporting, effective from fiscal 2009, companies in Japan will be subject to the internal
control reporting system stipulated by the Financial Instruments and Exchange Act. LAWSON will establish a dedicatedinternal organization to ascertain and document the status of internal controls throughout the Company and the various
business processes that occur at the major operating bases. Through this process, the Company will put in place internal andthird-party evaluation systems and related improvements, and implement them appropriately.
We look forward to the continued support and encouragement of our shareholders.

72. Current Status at the End of February 2009(1) Major Business Operations and Principal Offices
Convenience Store Business
1) LAWSON, INC.
Major Business:
LAWSON, INC. operates the LAWSON-brand franchise system andCompany-operated stores as the headquarters of LAWSON and
NATURAL LAWSON convenience store chains
Head Office:Shinagawa-ku, Tokyo
Principal Offices:
Hokkaido LAWSON Branch (Chuo-ku, Sapporo), Tohoku LAWSON
Branch (Aoba-ku, Sendai), Kanto LAWSON Branch (Shinagawa-ku,
Tokyo), Chubu LAWSON Branch (Naka-ku, Nagoya), Kinki
LAWSON Branch (Suita, Osaka), Chugoku & Shikoku LAWSON
Branch (Okayama, Okayama) and Kyushu LAWSON Branch(Hakata-ku, Fukuoka)
Note: In addition to the above sites, the Company has 102 offices throughout
Japan including District Offices.

Stores:Prefecture
Hokkaido
Aomori
Iwate
Miyagi
Akita
Yamagata
Fukushima
IbarakiTochigi
Gunma
Saitama
Chiba

Number ofStores
498
162
166
183
142
56
98
106
105
68
372
342

Prefecture
Tokyo
Kanagawa
NiigataToyamaIshikawa
Fukui
Yamanashi
NaganoGifu
Shizuoka
Aichi
Mie

Number ofStores
1,233
640
100
106
78
92
66
133
110
167
423
84

Prefecture
Shiga
Kyoto
Osaka
Hyogo
Nara
Wakayama
Tottori
Shimane
Okayama
Hiroshima
Yamaguchi
Tokushima

8

Number ofStores
123
236
935
529
104
110
87
82
122
132
108
109

Prefecture
KagawaEhime
Kochi
Fukuoka
Saga
Nagasaki
Kumamoto
Oita
MiyazakiKagoshima
Okinawa
Total

Number ofStores
98
150
60
331
58
84
90
126
84
106
133
9,527

2) VALUE LAWSON, Inc.
Major Business:
Head Office:3) Ninety-nine Plus Inc.
Major Business:
Head Office:

VALUE LAWSON, Inc. operates LAWSON STORE100 stores. The LAWSONSTORE100 stores (72) are included in the table above.
Shinagawa-ku, Tokyo
Ninety-nine Plus Inc. operates LAWSON STORE100 and SHOP99 stores. The 853
LAWSON STORE100 and SHOP99 stores operated by Ninety-nine Plus, including
those operated by Ninety-nine Plus Kansai, Inc., are included in the table above.
Kodaira, Tokyo4) Ninety-nine Plus Kansai, Inc.
Major Business:
Ninety-nine Plus Kansai, Inc. operates LAWSON STORE100 and SHOP99 stores.
Head Office:Osaka-shi, Osaka
Other BusinessCompany NameLAWSON TICKET, INC.
i-Convenience, Inc

Head Office
Shibuya-ku,
Tokyo
Shinagawa-ku,
Tokyo

LAWSON ATM Networks, Inc

Shinagawa-ku,
Tokyo

BestPractice Inc.

Shinagawa-ku,
Tokyo

Ticket sales businesse-commerce business

Financialservices–related
business
Consulting business(2) Employees
1) Employees of the Corporate Group
Designation of Business Segment
Convenience store business
Ticket sales businesse-commerce business
Financial services-related business
Consulting business
Total

Major BusinessSells tickets for various events inside
LAWSON stores, etc.
Provides merchandise, services andinformation through its mobile phonesite “LAWSON MOBILE”
Installs jointly operated ATMs in
LAWSON stores, etc.
Conducts surveys of convenience storesto give advice and make specificproposals for the improvement of
LAWSON stores

Number of Employees (YoY Increase)
4,820 (1,398)
215
(41)
35
(2)
21
(1)
95
(9)
5,186 (1,451)(Note) The number of employees in the convenience store business as of February 28, 2009 includes 1,250 employees of new
consolidated subsidiaries Ninety-nine Plus Inc. and Ninety-nine Plus Kansai, Inc.

2) Employees of the Company
Number of Employees
3,459(YoY Increase)(143)

Average Age
37.1

9Average Years of Service
10.4

(3) Status of Major Business Combinations
1) Important Subsidiaries
Company Name
Common Stock(¥ millions)
VALUE LAWSON, Inc.
99
Ninety-nine Plus Inc.
5,338
Ninety-nine Plus Kansai, Inc.
370
LAWSON TICKET, INC.
2,892
i-Convenience, Inc
2,000
LAWSON ATM Networks, Inc
3,000
BestPractice Inc.
10

Shareholding (%)
100.0
76.8
76.8
75.1
100.0
53.0
100.0

Major BusinessConvenience store businessConvenience store businessConvenience store business
Ticket sales businesse-commerce business
Financial services-related business
Consulting businessNotes:
1. Ninety-nine Plus Inc. became a consolidated subsidiary of LAWSON as a result of the Company purchasing an additional 75,175
shares on September 5, 2008 through a public tender for Ninety-nine Plus Inc. shares. This additional share purchase raised
LAWSON’s equity interest in Ninety-nine Plus Inc. from 34.2% to 76.8%. Ninety-nine Plus Kansai, Inc. is a consolidated subsidiary
wholly owned by Ninety-nine Plus Inc.
2. On May 1, 2009, Ninety-nine Plus Inc. and LAWSON subsidiary VALUE LAWSON, Inc. plan to merge. Ninety-nine Plus Inc. will be
the surviving company.
3. i-Convenience, Inc merged with LAWSON TICKET, INC. on March 1, 2009. LAWSON TICKET, INC. is the surviving company.

2) Other Important Business Combinationsi) Important Affiliated Companies
Company NameSHANGHAI HUALIAN LAWSON
CO., LTD.

Common Stock
CNY165,898
thousand

Shareholding (%)
49.0

Major BusinessConvenience store businessNotes:
1. On April 30, 2008, LAWSON sold all shares it held in LAWSON CS Card, INC. to Credit Saison Co., Ltd.
2. On December 26, 2008, LAWSON sold 727 of the shares it held in naturalBeat Co., Ltd. to LOTTE Co., Ltd. As this brought
LAWSON’s shareholding down to 19.9%, naturalBeat Co., Ltd. is no longer included as an equity-method affiliate.

ii) Important Business Alliances
Mitsubishi Corporation holds 32.7% of the total voting rights (32,399 thousand shares) of the Company (including
indirect holdings). Recognizing Mitsubishi Corporation as the most important strategic partner, the Company hasentered into an extensive business tie-up agreement with Mitsubishi Corporation for the enhancement of existing
businesses and the development of new businesses.
On March 13, 2009, LAWSON concluded a comprehensive business alliance agreement with am/pm Japan Co.,
Ltd.

10

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: 99,600,000 shares(Including 432,015 shares of treasury stock)(3) Number of Unit (tangen) Shares:
100 shares(4) Number of Shareholders:
33,358(5) Major Shareholders:Shareholder’s Name
Mitsubishi Corporation
Japan Trustee Services Bank, Ltd. (Trust account)
The Master Trust Bank of Japan, Ltd. (Trust account)
Japan Trustee Services Bank, Ltd. (Trust account 4G)
Marubeni Foods Investment Co., Ltd.
NTT DoCoMo, Inc.
Trust & Custody Services Bank, Ltd. (Securities investment trust account)
STATE STREET BANK AND TRUST COMPANY 505223
The Nomura Trust & Banking Co., Ltd. (Investment trust account)
STATE STREET BANK AND TRUST COMPANY 505225
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 stock.

11

Investment in the Company
Number of shares
Shareholding (%)
held (Thousands)
32,089
32.4
6,613
6.7
6,031
6.1
5,035
5.1
4,786
4.8
2,092
2.1
1,185
1.2
1,178
1.2
1,038
1.0
979
1.0

2. Status of stock acquisition rights(1) Stock Acquisition Rights Held by Corporate Officers of the Company as of February 28, 2009
3rd Stock Acquisition 4th Stock Acquisition
RightsRightsNumber of option holders and the number of stock acquisition rights (units)
Directors (Excluding
2 persons
3 personsoutside directors)(130 units)(160 units)
Outside directors
2 persons
3 persons(60 units)(90 units)
Class of shares subject to Common stock ofCommon stock ofstock acquisition rights
LAWSON, INC.
LAWSON, INC.
Number of sharessubject to stock
19,00025,000acquisition rights
Value of property
invested in exercising¥4,320¥4,160stock acquisition rights(per share)
Exercise period
June 10, 2006
October 12, 2007
through June 9, 2009 through December 31,
2010
A stock acquisition
Main exercise conditions A stock acquisitionrights holder may
rights holder may
apply to the Company
apply to theCompany to exercise to exercise his or her
rights only when thehis or her rights only
stock price of thewhen the stock priceCompany’s commonof the Company’scommon stock on the stock on the Tokyo
Stock ExchangeTokyo Stockexceeds the amount of
Exchange exceeds
the above “Value ofthe amount of theproperty invested inabove “Value of
exercising stock
property invested inacquisition rights (perexercising stock
share)” by 1.1 times
acquisition rights
or more.
(per share)” by 20%
or more.

12

5th Stock Acquisition
Rights6th (a) Stock
Acquisition Rights

1 person(112 units)
3 persons(21 units)
Common stock of
LAWSON, INC.

3 persons(137 units)
3 persons(18 units)
Common stock of
LAWSON, INC.

13,300¥1
October 13, 2005
through May 31,
2025
A stock acquisitionrights holder may
exercise his or her
rights only for aperiod of five (5)years from the day
after losing his or her
position as a directorof the Company.

15,500¥1
October 27, 2006
through May 26,
2026
A stock acquisitionrights holder may
exercise his or her
rights within theexercise period only
for a period of five(5) years from the
day after losing his or
her position as either
director and/or
executive officer of
the Company.

7th (a) Stock
8th (a) Stock
6th (b) Stock
Acquisition Rights
Acquisition Rights
Acquisition Rights
Number of option holders and the number of stock acquisition rights (units)
Directors (Excluding
4 persons (239 units)
3 persons (180 units)
4 persons (162 units)
outside directors)
Outside directors
3 persons (90 units)
3 persons (18 units)
3 persons (25 units)
Class of shares subject Common stock ofCommon stock ofCommon stock of
to stock acquisition
LAWSON, INC.
LAWSON, INC.
LAWSON, INC.
rightsNumber of sharessubject to stock
27,00018,00026,400acquisition rights
Value of property
invested in exercising¥4,053¥1¥1stock acquisitionrights (per share)
Exercise period
October 28, 2008
September 6, 2007
January 17, 2009
through October 26,
through August 20,
through December 15,
2011
2027
2028
A stock acquisition
A stock acquisition
Main exercise
A stock acquisitionrights holder may
rights holder may
conditions
rights holder may
exercise his or her
exercise his or her
exercise his or her
rights within therights within thestock options when
exercise period only
exercise period only
the closing price forfor a period of five (5) for a period of five (5)ordinary transactions
years from the day
years from the dayof the Company’s
after losing his or her
after losing his or her
common stock on theposition as either
position as either
Tokyo Stockdirector and/or
director and/or
Exchange on the day
executive officer of
executive officer of
immediately
the Company.
preceding the exercise the Company.
date (the closing priceof the nearest
preceding trading day
if such closing price
was not established on
the preceding day)exceeds the amount of
the above “Value of
property invested in
exercising stockacquisition rights (pershare)” by 1.1 times
or more (with afraction below one (1)yen to be rounded up).

13

(2) Stock Acquisition Rights Issued to Executive Officers of the Company During the Year
Date of resolution adopted by the Board of Directors
December 16, 2008
Number of persons to whom the stock acquisition rights were issued and the number of stock acquisition rights (units):
Executive officers of the Company (Excluding those who
11 persons (360 units)
concurrently serve as corporate officers of the Company)
Class of shares subject to stock acquisition rights
Common stock of LAWSON, INC.
Number of shares subject to stock acquisition rights
36,000
Value of property invested in exercising stock acquisition¥5,174rights (per share)
Exercise period
January 18, 2011 through December 15, 2013
Main exercise conditions
A stock acquisition rights holder may exercise his or her
stock options when the closing price for ordinarytransactions of the Company’s common stock on the Tokyo
Stock Exchange on the day immediately preceding theexercise date (the closing price of the nearest preceding
trading day if such closing price was not established on thepreceding day) exceeds the amount of the above “Value of
property invested in exercising stock acquisition rights (pershare)” by 1.1 times or more (with a fraction below one (1)yen to be rounded up).
3. Directors and Corporate Auditors(1) Positions, Names and Assignments
Position
Name
Representative
Director
DirectorTakeshi Niinami

Director

Yoshiyuki Yahagi

Director
Director
Director
Director

Manabu Asano
Hiroshi Tasaka
Reiko Yonezawa
Takehiko Kakiuchi

Standing Corporate
AuditorStanding Corporate
AuditorCorporate Auditor
Corporate Auditor

Munehiko Nakano

Toru Moriyama

Postings, Assignments in the Company or Representative
Positions in Other Companies
President and CEO
Senior Executive Vice President and General Manager;
Merchandising & Logistics Division
Executive Vice President and CFO, General Manager,
Management Services Office and Corporate Planning
OfficeExecutive Vice President and CCO
Professor, Graduate School of Tama University
President, The R Co., Ltd.
Division COO, Foods(Commodity) Div., Mitsubishi
Corporation

Kenji Yamakawa
Tetsuo Ozawa
Hiroshi Kuwata

Lawyer
General Manager, Risk Management Department,
Mitsubishi Corporation

Notes:
1. Directors Hiroshi Tasaka, Reiko Yonezawa and Takehiko Kakiuchi are outside directors as stipulated in Article 2, Item 15, of the
Corporate Law of Japan.
2. Standing Corporate Auditor Munehiko Nakano and Corporate Auditors Tetsuo Ozawa and Hiroshi Kuwata are outside corporate
auditors as stipulated in Article 2, Item 16, of the Corporate Law.
3. Standing Corporate Auditor Munehiko Nakano has assumed responsible posts for many years in the accounting and administration
departments of Mitsubishi Corporation and therefore has considerable expertise in finance and accounting.
Standing Corporate Auditor Kenji Yamakawa has assumed responsible posts for many years in the finance and accounting
departments of the Company and other companies and therefore has considerable expertise in finance and accounting.
Corporate Auditor Tetsuo Ozawa, lawyer, has practiced law and advised on legal matters and risk management mainly in relation to
the legal affairs of companies and therefore has considerable expertise in finance and accounting.

14

Corporate Auditor Hiroshi Kuwata has served for many years in the investment management and examination departments and risk
management of Mitsubishi Corporation and therefore has considerable expertise in finance and accounting.
4. Director Yoshiyuki Yahagi was promoted from the post of Executive Vice President to the post of Senior Executive Vice President on
March 1, 2009.
Director Toru Moriyama left the post of Senior Executive Vice President on April 1, 2009.
5. Executive officers who are not directors are as follows:

Senior Executive Vice
President
Executive Vice
President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President

Takatoshi Kawamura

Senior Vice President

Noriyuki Nobayashi

Yoichi Yokomizo

Senior Vice President

Hajime Nakai

Shigeru Niikura
Norikazu Nishiguchi
Shigeaki Kawahara
Takaki Mizuno
Yoshio Shinozaki
Jun Miyazaki

Senior Vice President

Atsushi Maeda(2) Amounts of Remuneration, etc., Paid to Directors and Corporate Auditors
Category
Number of persons
Directors
7
Corporate Auditors
4
Total
11

Amount paid (¥ millions)
253
65
319

Notes:
1. As of February 28, 2009, the number of directors in office was 7 and that of corporate auditors was 4.
2. Of the above total, the remuneration to 6 outside corporate officers (outside directors and outside corporate auditors) was ¥81 million.
In addition to the above, total remuneration received from LAWSON subsidiaries, etc. by outside corporate officers was ¥1 million,
which was received by 1 person.
3. The above remuneration figures include amounts corresponding to stock acquisition rights as stock options to directors and thereserve for retirement benefits to corporate auditors for the reporting year.

(3) Outside Directors and Outside Corporate Auditors
1) Hiroshi Tasaka (Director)
Positions concurrently held as an executive director, etc., of other corporations:– President, SophiaBank Limited– Director, SBI Holdings, Inc.
– Fellow, The Japan Research Institute, Limited
The Company has no business relationship with SophiaBank Limited, of which Hiroshi Tasaka is President; SBI
Holdings, Inc., of which he is a Director; or The Japan Research Institute, Limited, of which he is a Fellow.
Major activities during the year:(Attendance at Board of Directors’ meetings)
Mr. Tasaka attended 12 of 16 Board meetings held during the year and appropriately questioned and/or remarked
based on his abundant experience and knowledge as a learned person and a management executive.
2) Reiko Yonezawa (Director)
Position concurrently held as an executive director, etc., of other corporations:– President, The R Co., Ltd.
The Company and The R Co., Ltd., in which Reiko Yonezawa is President, have a business relationship with regard
to the entrustment of reception services and employment agency services.
Positions concurrently held as an outside officer of other corporations:– Outside director, Japan Post Holdings Co., Ltd.
– Outside director, Culture Convenience Club Co., Ltd.
Major activities during the year:(Attendance at Board of Directors’ meetings)
Ms. Yonezawa attended 15 of 16 Board meetings held during the year and appropriately questioned and/or remarked
based on her abundant experience and knowledge as a management executive.
3) Takehiko Kakiuchi (Director)
Position concurrently held as an executive director, etc., of other corporations:– Division COO, Foods(Commodity) Div., Mitsubishi Corporation
15

The Company and Mitsubishi Corporation, of which Mr. Kakiuchi is an employee and which is a large shareholder of
the Company, have a business relationship under an extensive business alliance agreement.
Positions concurrently held as an outside officer of other corporations:– Outside director, Kentucky Fried Chicken Japan, Ltd.
– Outside director, NIHON SHOKUHIN KAKO CO., Ltd.
Major activities during the year:(Attendance at Board of Directors’ meetings)
Mr. Kakiuchi attended 11 of 16 Board meetings held during the year and appropriately questioned and/or remarked
based on his deep knowledge about consumer lifestyles.
4) Munehiko Nakano (Standing Corporate Auditor)
Position concurrently held as an outside officer of other corporations:
Outside corporate auditor, Ninety-nine Plus Inc.
Major activities during the year:
As a standing corporate auditor, Mr. Nakano examined financial documents, and visited relevant establishments andbusiness partners to examine business operations and financial positions thereof. Also, while he monitored andverified the execution of duties of directors and other personnel including those relating to the improvement ofinternal control systems, he is responsible for smooth operations of the Board of Corporate Auditors as its Chairman.
(Attendance at Board of Directors’ and Board of Corporate Auditors’ meetings)
Mr. Nakano attended 16 of 16 Board of Directors’ meetings and 14 of 14 Board of Corporate Auditors’ meetings held
during the year and appropriately questioned and/or remarked based on his abundant occupational experience inaccounting and investment management.
5) Tetsuo Ozawa (Corporate Auditor)
Positions concurrently held as an outside officer of other corporations:– Outside corporate auditor, Monex Group, Inc.
– Outside corporate auditor, Monex Inc.
– Outside corporate auditor, CEMEDINE CO., LTD.
Major activities during the year:(Attendance at Board of Directors’ and Board of Corporate Auditors’ meetings)
He attended 16 of 16 Board of Directors’ meetings and 14 of 14 Board of Corporate Auditors” meetings held during
the year and appropriately questioned and/or remarked based on his abundant experience and knowledge as a lawyer.
6) Hiroshi Kuwata (Corporate Auditor)
Position concurrently held as an executive director, etc., of other corporations:– General Manager, Risk Management Department, Mitsubishi Corporation
The Company and Mitsubishi Corporation, of which Mr. Kuwata is an employee and which is a large shareholder of
the Company, have a business relationship under an extensive business alliance agreement.
Major activities during the year:(Attendance at Board of Directors’ and Board of Corporate Auditors’ meetings)
Mr. Kuwata attended 13 of 16 Board of Directors’ meetings and 14 of 14 Board of Corporate Auditors’ meetings held
during the year and appropriately questioned and/or remarked based on his abundant occupational experience in risk
management.
(4) Outline of Liability Limitation Agreements With Outside Directors and Outside Corporate Auditors
The Company has entered into agreements with the outside directors and outside corporate auditors to limit their
liability with regard to the damages outlined under Article 423, Paragraph 1, of the Corporate Law, 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 Corporate Law.

16

4. Independent Auditor(1) Independent Auditor
Deloitte Touche Tohmatsu(2) Amounts of Remunerations, etc., to Be Paid to the Independent Auditor
1) Remuneration to be paid by the Company to the Independent Auditor: ¥50 million2) Sum of money and other property benefits to be paid by the Company and its subsidiaries to the Independent Auditor:¥125 million
Note: The audit agreement entered into by the Independent Auditor and the Company does not clearly distinguish the amount for theaudit under the Corporate Law and that for the audit under the Financial Instruments and Exchange Act, and the two amounts
cannot be substantially distinguished from each other. Therefore, the amount in 1) above indicates the total for the two audits.

(3) Non-Audit Services
The Company entrusts the following services, which do not come under the services set forth in Article 2, Paragraph 1,of the Certified Public Accountant Law (non-audit services), to the Independent Auditor:
1) Consulting on the disclosure of quarterly financial information;2) Consulting on the preparation of documents translated into English for earnings reports and other various financial
documents; and
3) Advice on and guidance on internal controls for financial reporting.
(4) Policy on Decisions Concerning Dismissal or Non-Reappointment of the Independent Auditor
If the Independent Auditor violates or infringes the Corporate Law, the Certified Public Accountant Law, or other laws
or regulations, or the Company considers it necessary to do so, the Board of Directors shall, after obtaining theagreement of the Board of Corporate Auditors, submit a proposal for dismissal or non-reappointment of the Independent
Auditor to a general meeting of shareholders. In addition, the Board of Corporate 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 Corporate Law.
III.

SYSTEMS TO ENSURE COMPLIANCE OF THE DIRECTORS’ EXECUTION OF DUTIES WITH LAWS
AND REGULATIONS AND THE ARTICLES OF INCORPORATION, AS WELL AS OTHER SYSTEMS TO
ENSURE THE PROPRIETY OF BUSINESS OPERATIONSAt the Board of Directors’ meeting held on February 18, 2009, based on improvements and the operation of thepreceding “2008 Basic Policy for Improvement of Internal Control Systems,” which was approved at the Board of
Directors’ meeting held on February 19, 2008, the Company passed a resolution called the “2009 Basic Policy for
Improvement of Internal Control Systems,” as indicated below.

(1) Systems to Ensure Compliance of the Execution of Duties by Directors and Employees with Laws and Regulations
and the Articles of Incorporation
1) The Board of Directors shall determine the improvement policies and plans for internal control systems, including
those for compliance with laws, regulations and the like (hereinafter the “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 statusconcerning the improvement of the internal control systems.
4) The Internal Audit Department, which is independent from the business-executing bodies, shall audit the statusconcerning the improvement of the internal control systems, and recommend improvements thereof, as required.
5) The Board of Directors shall maintain and raise the awareness of officers and employees regarding compliance bythoroughly disseminating the LAWSON Group Code of Conduct and the LAWSON Ethical Mission Statement bysuch measures including, but not limited to, as appointing a Chief Compliance Officer (CCO), assigningpersonnel in charge of compliance, streamlining the rules in relation to compliance and providing periodic
training on ethics.
6) 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.

177) The Company shall establish and upgrade reporting and consulting systems (internal and outside contact points
and a group-wide consulting contact point) that fully protect informants.
8) The Company shall never become involved with antisocial forces or bodies that threaten the order and security ofsociety, and shall take a firm stance on and deal with improper demands by consulting with lawyers, the police
and the like.
(2) Systems to Preserve and Manage Information Pertaining to the Execution of Duties by Directors
1) 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, 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 to maintaining
the system 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.
(3) Rules and Other Systems Regarding Risk Management
1) The Company shall identify risks that might have adverse effects on the Company’s management in connection
with its business purposes, analyze the probability of such risk factors materializing and their impact, andevaluate whether intensive countermeasures should be taken. At the same time, the Company shall improve rules
related to risk management and group-wide risk-prevention systems during normal operations.
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 inadvance to prepare for the occurrence or possible occurrence of unanticipated situations or events, which might
have adverse effects on management of the Company, in order to provide a quick response to any actual
occurrence thereof and to take effective measures to prevent a reoccurrence.
(4) Systems to Ensure the Efficient Execution of Duties by Directors
1) 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 ofduties 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 theorganization and making appropriate use of IT.
3) In order to promote the proper communication of information and communications between officers andemployees, the Company shall improve systems by which management guidelines and policies are disseminatedto employees by corporate officers, and important field information is properly communicated by employees tocorporate officers in a timely manner.
(5) Systems to Ensure the Propriety of Business Operations Conducted by the Corporate Group Consisting of theCompany and Its Subsidiaries
1) The Company shall endeavor to maintain and enhance the LAWSON brand through close collaboration withsubsidiaries and affiliated companies (hereinafter “Associated Companies”). However, with regards to affiliatedcompanies, the Company will work to establish and maintain systems through phased implementation, taking into
account such factors as relations with other leading shareholders, difference in laws, regulations and businesscustoms and the like of foreign countries.
2) While respecting the independence of Associated Companies, in view of the purpose of the Company’s equity
participation in Associated Companies, the Company shall establish Group regulations such as basic policies forthe management of Associated Companies and management policies thereof to ensure the appropriateness ofGroup-wide business operations.

183) 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.
(6) Necessary Systems to Ensure Proper Financial Reporting by the Company and its Group of Companies
1) The Company shall enhance systems for preparing financial statements according to laws and regulations andaccounting standards and disclosing same after they have been discussed, examined and confirmed in accordancewith 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- and third-party evaluation andimprovement through the identification and recording of business processes at important business bases and thestatus of Companywide internal controls.
(7) Matters Concerning Employees Where a Corporate Auditor Requests Employees to Assist With Duties
1) The Company shall assign appropriate personnel to the Auditors’ Office as employees exclusively to assist
Corporate Auditors in the execution of their duties (hereinafter “Corporate Auditors’ Staff”).
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.
4) The Legal Affairs, Risk Management and Finance and Accounting departments of the Company shall assist in
conducting necessary surveys for audits when requested by any Corporate Auditor.
(8) Independence of Employees From Directors in the Preceding Item
Performance reviews of Corporate Auditors’ Staff shall be conducted by the Standing Corporate Auditors toensure that Corporate Auditors’ Staff carry out their duties appropriately. Personnel changes require the priorconsent of the Standing Corporate Auditors.
(9) Systems for Directors and Employees to Report to Corporate Auditors and Other Reporting Systems to the Corporate
Auditors
1) Directors and employees of the Company shall report important corporate management and businessadministration matters, as well as the status and results of the execution of their duties, to Corporate Auditors sothat the Corporate Auditors can carry out their duties effectively. Such important matters include compliance- andrisk-related issues and other matters relating to internal control.
2) If directors become aware of any fact or event that will likely cause the Company to suffer significant damage orloss, they shall 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.
(10) Other Systems to Ensure Effective Audits by Corporate Auditors
1) The Representative Directors and Corporate Auditors shall have regular meetings to enhance smoothcommunications with each other.
2) Directors shall cooperate with the Corporate Auditors with regards to communications, the collection andexchange of information and so on between the Corporate Auditors and the corporate directors and the like of
Associated Companies so that the 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.
The above amounts and the number of shares in this Business Report are rounded down to the nearest unit and the ratios arerounded to the nearest whole number.

19

Consolidated Balance Sheet (As of February 28, 2009)(Millions of yen)
Assets
Account item
Current assets
Cash and bank deposits
Accounts receivable—due from
franchised stores
Marketable securities
Merchandise inventories
Prepaid expenses
Short-term loans receivable
Accounts receivable—other
Deferred tax assets
Other
Allowance for doubtful accounts
Fixed assets
Property and store equipment

Amount154,760
82,486
21,376
5,299
5,292
7,010
300
26,692
4,061
2,382
(140)
281,410
114,999

Buildings and structures

94,321

Furniture, fixtures and equipment

13,458

Land

6,899

Construction in progress
Intangible assets
Software
Software development inprogress
Goodwill
Other
Investments and other
Investments in securities
Long-term loans receivable
Long-term prepaid expenses

320
31,902
12,014
14,571
4,851
464
134,509750
27,422
6,049

Lease deposits
Deferred tax assets

85,357
14,544

Deferred tax assets for land
revaluation
Other
Allowance for doubtful accounts
Total Assets

Liabilities
Account item
Current liabilities
Accounts payable —trade
Accounts payable— due tofranchised stores
Long-term debt due within one
year
Accounts payable—other
Income taxes payable
Deposits received
Accrued employees’ bonuses
Provision for use of points granted
Other
Long-term liabilities
Long-term debt
Allowance for employees’
retirement benefits
Allowance for retirement benefits
to executive officers and corporate
auditors
Deposits received from
franchisees and lessees
Allowance for impairment loss on
leased property
Other
Total liabilities
Net assets
Owners’ equity

Amount181,804
77,215822
816
26,641
9,455
58,844
3,199
933
3,876
51,188
1,152
5,050
201

42,440480
1,863
232,992
58,506
197,624
58,506
41,52099,310(1,712)
(937)
(28)

180

Common stock
Capital surplus
Retained earnings
Treasury stock
Valuation and translation adjustments
Net unrealized loss onavailable-for-sale securities
Land revaluation difference
Foreign currency translation
adjustments
Stock acquisition rights

2,610(2,406)436,171

Minority interests
Total net assets
Total Liabilities, and total net assets

6,217
203,178
436,171

20

(969)
59
274

Consolidated Statement of Income(From March 1, 2008 to February 28, 2009)(Millions of yen)Account item
Operating revenues
Franchise commissions from franchised stores
Other
Net sales
Net sales
Total operating revenues
Cost of goods sold
Gross profit on sales
Operating gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest received
Compensation received for removal
Other
Non-operating expenses
Loss on cancellation of store lease contract
Equity in losses of affiliated companies
Other
Ordinary profit
Special gains
Gain on sales of fixed assets
Gain on sales of investment in securities
Special losses
Loss on disposal of fixed assets
Loss on impairment of long-lived assets
Other
Income before income taxes and minority interests
Income taxes －current
Income taxes – deferred
Minority interests in net income
Net income

Amount186,927
42,604(119,943)(88,358)(31,585)

229,532
119,943
349,476
88,358261,117
211,931
49,186

943
646
467
1,493
631
331

3
91
4,053
2,013
606
17,675(1,183)

21

2,056

2,456
48,78794

6,674
42,207
16,492409
25,306

Consolidated Statement of Changes in Net Assets(From March 1, 2008 to February 28, 2009)(Millions of yen)
Owners’ equity

Balance at the end of
previous period
Changes of items during
the period
Dividends from surplus
Net income
Purchase of treasury
stock – at cost

Commo
n
stock

CapitalsurplusRetainedearnings

Treasury
stock

Total
owners’equity58,506

41,52087,390(1,837)

185,579

Exercise of stockacquisition rights (treasury
stock allotment)
Net changes of items
other than owners’ equity– net
Total changes of items－
during the period
Balance at the end of the
58,506current period(13,385)

134

(1)

(682)

140

(408)

159

3,242

Total net
assets188,573(13,385)
25,306(13,385)
25,306

(1)

(1)

(1)

126

125

125

25,306(1)

Valuation and translation adjustments
Deferred
Total
Net
Foreign
gain onvaluationStockunrealized
MinoritcurrencyLand
derivativeandloss onacquisitionyrevaluation translationstranslation
availablerights
interests
difference adjustment
under
adjustment
for-saleshedgessecurities
accounting

(162)

1

(287)

(81)

(529)

114

2,975

2,561

－

11,919125

12,044

(162)

1

(287)

(81)

(529)

114

2,975

14,605

41,52099,310(1,712)

197,624

(28)

－

(969)

59

(937)

274

6,217

203,178

22

(Notes to the Consolidated Financial Statement)
1.

Scope of consolidation
Consolidated subsidiaries: 7(Domestic) LAWSON TICKET, INC.
i-Convenience, Inc
LAWSON ATM Networks, Inc
BestPractice Inc.
VALUE LAWSON, Inc
Ninety-nine Plus Inc.
Ninety-nine Plus Kansai, Inc.
Ninety-nine Plus became a consolidated subsidiary from an affiliated company effective this fiscal year, after
increase in shares by public tender finalized on September 5, 2008.

2.

Application of the equity method(1)Affiliated companies to which the equity method is applied: 1(Foreign) SHANGHAI HUALIAN LAWSON CO., LTD.
(2) Affiliated companies to which the equity method is not applied
The Company does not apply the equity method to one affiliated company (Live Asia, Inc.), because the financial
figures such as net income, retained earnings, and others are negligibly insignificant in comparison with theCompany’s consolidated financial statements.
(3) Special notes concerning procedures for application of the equity method:Among equity method application companies, the closing date is December 31 for SHANGHAI HUALIANLAWSON CO., LTD. . When preparing the consolidated financial statements, the Company used thesecompanies’ financial information prepared based on the financial data at the end of the most recently fiscal
quarter and, as required, made certain adjustments for significant transactions that subsequently occurred in theintervening period until the end of the consolidation fiscal year.
By sales of shares of LAWSON CS Card, INC and naturalBeat Co., Ltd.. respectively, these two companies are
no more group companies.

3.

Fiscal year end of the consolidated subsidiaries
Among equity method application companies, the closing date is March 31 for Ninety-nine Plus Inc. and
Ninety-nine Plus Kansai, Inc. When preparing the consolidated financial statements, the Company used thesecompanies’ financial information prepared based on the financial data at the end of the most recently fiscal
quarter and, as required, made certain adjustments for significant transactions that subsequently occurred in theintervening period until the end of the consolidation fiscal year. The closing date of consolidated subsidiaries
except these companies is the same as the Company closing date.

4.

Summary of Significant Accounting Policies(1) Valuation basis and method for important assets
Marketable securities and investments in securities:
Held-to-maturity debt securities: Carried at amortized cost (Straight – line method).
Available-for-sale securities:
Securities whose market value is readily determinable: Recorded at the market value with net unrealized
gains and losses as a separate component of net assets. The cost of securities sold is determinedbased on the moving-average method.
Other: Stated at cost determined by the moving-average method.
Inventories:
Merchandise inventories: Principally, retail method applied on an annual average cost basis.

23

(2) Depreciation
Property and store equipment:
Depreciation is computed using the declining-balance method at rates based on estimated useful lives of
the assets. The ranges of useful lives are from 10 to 34 years for buildings and structures and from 5 to 8
years for furniture, fixtures and equipment.
Intangible assets:
Amortization of intangible assets is computed by the straight-line method.
Costs of software for internal use are amortized by the straight-line method over 5 years, which is theinternal useful life.
Long-term prepaid expenses:
Amortization of long-term prepaid expenses is computed by the straight-line method.
(3) Accounting policies for important reserves
Allowance for Doubtful Accounts:
Allowance for doubtful accounts is provided at an amount of possible losses from uncollectible receivables
based on the actual rate of losses from bad debt for ordinary receivables, and on estimated recoverability
for specific doubtful receivables.
Accrued Employees’ Bonuses:
Accrued employees’ bonuses are provided for payments of employees’ bonuses based on the estimatedamounts.
Provision for use of points granted:
The Company provides LAWSON PASS holders and MY LAWSON POINT holders when purchasing
goods, an entitlement to certain points that the holder can redeem for a discount on subsequent purchasesfrom LAWSON stores.
Allowance for Employees’ Retirement Benefits:
Allowance for employees’ retirement benefits are provided at the amount calculated based on the projected
benefit obligations and plan assets at the balance sheet date. Actuarial differences are amortized from thefollowing fiscal year on a straight-line basis over a certain period (10 years) within an average remaining
service period of employees at the time of their occurrence. Prior service cost is amortized, starting with thefiscal year incurred, on a straight-line basis over a certain period (10 years) within an average remaining
service period of employees.
Allowance for Retirement Benefits to Executive officers and Corporate Auditors:
Allowance for retirement benefits to corporate auditors and executive officers of The Company, and todirectors and corporate auditors of the certain consolidated subsidiary are calculated to state the liability at
100% of the amount that would be required if all corporate auditors, executive officers and directors
resigned their services with the Company at the balance sheet date.
(4) Foreign Currency Translation 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 balance sheet date. The foreign exchange gains andlosses from translation are recognized in the consolidated statements of income. The balance sheet accounts
as well as revenue and expense accounts of foreign affiliated companies are translated into Japanese yen at
the current exchange rate as of the balance 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” in a separate component of Net assets.

24

(5) Leases
Finance leases that do not transfer ownership of leased property to the lessee are accounted for as rental
transactions.
(6) Accounting for Consumption Tax
Consumption tax is excluded from income and expense.
5.

Valuation of assets and liabilities of consolidated subsidiaries
The assets and liabilities of consolidated subsidiaries, including the portion attributable to minority interests, arevalued at their fair values at the respective dates when the subsidiaries were initially consolidated.

6.

Amortization of Goodwill
Goodwill, or goodwill equivalent in the case of affiliates accounted for by the equity method, is amortized on astraight-line basis over relevant years, depending on the reason for the occurrence of goodwill with maximum of 20
years.

(Notes to the Consolidated Balance Sheet)
1. Accumulated depreciation of property and store equipment: ¥ 127,887 million
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 for land used for business that is scheduled to be sold has
been included in net assets as land revaluation difference, net of the related tax, which is included in deferred tax
assets for land revaluation.
Revaluation method: The value of land is determined based on the road-based prices adjusted reasonably as
stipulated in Article 2, Item 4 of the Ordinance Implementing the Law Concerning Revaluationof Land (Government Ordinance No. 119, March 31, 1998) and the assessed 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 balance sheet date was¥ 263million.
(Notes to the Consolidated Statement of Income)Long-lived assets
The Group recognized an impairment loss mainly for each store with the smallest cash generating unit.
The Group recognized an impairment loss on the following assets that declined in value due mainly to continuous
operating losses. The carrying amount, of those assets were written down to the recoverable amount and were recordedin special losses.

25Category by use

LocationTokyo

AssetsMillions of yen
Buildings and structures・Furniture, fixtures and205
equipment and others
StoresOsaka〃
164
Others
〃
1,644
Total
―
―
2,013
Category by fixed assets（Millions of yen）
Buildings and structures
1,457
Furniture, fixtures and equipment
205
Leased property
340
Other
10
Recoverable value of the impaired assets is calculated based on the net selling price or value in use. The net selling
price of land was calculated based on the appraised value by the real estate appraiser or expected contract price, andthe value in use was calculated by discounting estimated future cash flows to which mainly the 5.3% discount rate
was applied.

(Notes to the Consolidated Statement of Changes in Net assets)
1. Number of shares of outstanding stock and treasury stock.
Number of shares at
Increase during the Decrease during the Number of shares atthe end of previous
periodperiodthe end of the period
period(thousand shares)(thousand shares)(thousand shares)(thousand shares)
Outstanding stock
Common stock
99,600――99,600Treasury stock
Common stock

463
0
31
432
Note: Increase in 0 thousand shares in treasury stock was resulted from purchase of stock less than unit share.
Decrease in 31 thousand shares in treasury stock resulted from provision in relation to exercise of stock
option.
2. Dividend(1) Dividend payment

Date ofresolution
The General
meeting ofshareholders(May 23, 2008)
Directors’
meeting(October 14,
2008)

Class ofsharesAmount ofdividend
payment(Millions ofyen)

Dividend pershare (yen)Date attributable todividend

Effective dateCommon
stock

5,452

55

As of February, 29,2008

As of May, 26, 2008

Common
stock

7,933

80

As of August 31,
2008

As of November,
10, 2008

26

(2) Dividends for which the effective date is after the year - end balance sheet date, while dividends attributed in thisperiod.

Date ofresolution

Class ofsharesReserve of
Dividend

The General
meeting ofshareholders(May 26,
2009)

Commonstock

Retained
Earnings

Amount ofdividend
Dividend per Date attributable topayment
share (yen)dividend(Millionsof yen)Effective date

As of February, 28,2009

As of May, 27,
2009

7,933

80

3. Kind and number of stock which can be exercised by outstanding stock acquisition rights (excluding those before
exercisable period).
Common stock352,200 shares(Accounting for income taxes)
Components of deferred tax assets and liabilities were described as follows:(Millions of yen)Enterprise taxes payable
Accrued employees' bonuses
Excess of depreciation
Excess of amortization of software
Allowance for employees’ retirement benefits
Allowance for doubtful accounts
Impairment loss
Tax loss carryforward
Loss on replacement of computer system
Other
Subtotal of deferred tax assets
Less valuation allowances
Total deferred tax assets

¥

¥

27

901
1,301
4,969
793
4,323
625
2,165
2,215
841
2,434
20,574(1,968)18,605

(Accounting for retirement benefits)
Summary of the retirement benefit plans:
The Company and a certain domestic subsidiary have defined benefit lump - sum severance indemnity plans which
cover substantially all of their employees. The Company established a trust fund for its lump - sum severance
indemnity plan.
In addition, the Company has a defined contribution plan for severance payments.
Projected benefit obligations
a. Projected benefit obligations
b. Plan assets
c. Projected benefit obligations in excess of plan assets (= a + b)
d. Unrecognized prior service coste. Unrecognized actuarial differences
f. Allowance for employees’ retirement benefits (=c + d + e)

(Millions of yen)
(12,226)
5,574(6,652)878
722(5,050)Net periodic benefit cost
(Millions of yen)a. Service cost¥872
b. Interest cost
222
c. Amortization of prior service cost
175
d. Amortization of actuarial differences
97
e. Net periodic benefit cost (= a + b +c + d)¥
1,368
f. Contribution to defined contribution plan265
g. Total (= e + f)
1,633
Note: Net periodic benefit cost in the consolidated subsidiary, which adopted the simplified method, are included in“a. Service cost.”
Basis of calculation of projected benefit obligations
a. Discount rate
b. Expected rate of return on plan assetsc. Allocation method of estimated total retirement
benefits(Per Share data)
1. Net assets per share
2. Net income per share

1,983.36
255.222.0%0%Straight-line basis (a method to allocate estimatedtotal retirement benefits equally to respective
periods in employee’s whole service period)

yen
yen

28

Non-consolidated Balance Sheet (As of February 28, 2009)(Millions of yen)
Assets
Account item
Current assets
Cash and bank deposits
Accounts receivable—due from
franchised stores
Marketable securities
Merchandise inventories
Prepaid expenses
Short-term loans receivable
Accounts receivable—other
Deferred tax assets
Other
Allowance for doubtful accounts
Fixed assets
Property and store equipment

Amount125,134
64,06821,170
3,000
1,484
6,142
3,100
23,0644,590
1,384(2,868)276,982
107,477

Buildings

75,682

Structures

12,353

Furniture, fixtures and equipment

12,222Land
Construction in progress
Intangible assets
Software
Software development in progress
Goodwill
Other
Investments and other
Investments in securities
Investments in subsidiaries andaffiliated company
Investments in affiliated limited
private company
Long-term loans receivable
Long-term prepaid expenses

6,899
320
24,132
7,990
14,552
1,148
440
145,373259
16,843

Lease deposits
Deferred tax assets
Deferred tax assets for land
revaluation
Other
Allowance for doubtful accounts

81,48913,746180

Total Assets

Liabilities
Account item
Current liabilities
Accounts payable —trade
Accounts payable— due tofranchised stores
Accounts payable—other
Income taxes payable
Consumption taxes payable
Accrued expenses
Deposits received
Accrued employees’ bonuses
Provision for use of points granted
Other
Long-term liabilities
Allowance for employees’
retirement benefits
Allowance for retirement benefits
to executive officers and corporate
auditors
Deposits received from
franchisees and lessees
Allowance for impairment loss on
leased property
Other
Total liabilities
Net assets
Owners’ equity
Common stock
Capital surplus
Additional paid-in capital
Retained earnings
Legal reserve

438

Other retained earnings

27,355
5,313

General reserve
Earned surplus brought
forwardTreasury stock
Valuation and translation adjustments
Net unrealized loss onavailable-for-sale securities
Land revaluation difference
Stock acquisition rights
Total net assets
Total Liabilities, and total net assets

2,128(2,381)
402,11729

Amount156,960
66,336764
23,072
8,439
675
1,746
51,862
3,065
928
68
49,521
4,963
147

42,434352
1,623
206,482

196,339
58,506
41,52041,52098,025727

50,00047,298(1,712)
(979)
(10)
(969)
274
195,634
402,117Non-consolidated Statement of Income(From March 1, 2008 to February 28, 2009)(Millions of yen)Account item
Operating revenues
Franchise commissions from franchised stores
Other
Net sales
Net sales
Total operating revenues
Cost of goods sold
Gross profit on sales
Operating gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest and dividend income
Compensation received for removal
Other
Non-operating expenses
Loss on cancellation of store lease contract
Other
Ordinary profit
Special gains
Gain on sales of fixed assets
Gain on sales of investment in securities
Gain on sales of investment in subsidiary
Special losses
Loss on disposal of fixed assets
Provision of allowance for doubtful accountLoss on impairment of long-lived assets
Other
Income before income taxes
Income taxes - current
Income taxes - deferred
Net income

Amount186,548
21,045(72,145)(51,760)(20,385)

207,593
72,145
279,739
51,760227,978
181,065
46,913

1,074
646
420
1,459
273

3
91
25
3,586
2,800
1,980
1,138
16,436
(566)

30

2,141

1,733
47,321

120

9,505
37,936
15,86922,066

Non-consolidated Statement of Changes in Net Assets(From March 1, 2008 to February 28, 2009)(Millions of yen)
Owners’ equity
Capital surplus

Balance at the end of
previous period
Changes of items during
the period
Dividends from surplus
Net income
Purchase of treasury stock– at cost
Exercise of stockacquisition rights(treasury stock allotment)
Net changes of items
other than owners’ equity– net
Total changes of items
during the period
Balance at the end of thecurrent period

Commonstock

Additional
paid-in
capital58,506

41,520

Other
capitalsurplusTotal
capitalsurplus-Legalreserve

41,520727

Retained earnings
Other retained earnings
EarnedGeneralsurplusreservebrought
forward50,000Total
retainedearnings

38,61889,345(13,385)
22,066(13,385)
22,066

Treasurystock(1,837)

Total
owners’equity187,534(13,385)
22,066
(1)

(1)

(1)

(1)

126

125

－

－

－

－

－

－

8,680

8,680

125

8,805

58,506

41,520－41,520727

50,00047,29898,025(1,712)

196,339

31

Valuation and translation adjustments
Net
unrealized
loss onavailablefor-salesecurities
Balance at the end of
previous period
Changes of during theperiodDividends from surplus
Net income
Purchase of treasury stock– at cost
Exercise of stockacquisition rights (treasury
stock allotment)
Net changes of items
other than owners’ equity– net
Total changes of items
during the period
Balance at the end of thecurrent period

133

Land
revaluationdifference

(682)

Total
Stock
valuation andacquisitiontranslationrightsadjustments

(548)

159

Total
net assets

187,146(13,385)
22,066
(1)
125

(144)

(287)

(431)

114

(316)

(144)

(287)

(431)

114

8,488

(10)

(969)

(979)

274

195,634

32

(Notes to the Non-consolidated Financial Statement)
1. Valuation of Securities
Held-to-maturity debt securities: Carried at amortized cost. (Straight-line method)
Available-for-sale securities:
Securities whose market value is readily determinable: Recorded at the market value with net
unrealized gains and losses as a separate component of net assets. The cost of securities sold isdetermined based on the moving-average method.
Other: Stated at cost determined by the moving-average method.
Investments in subsidiaries and affiliated companies: Stated at cost determined by themoving-average method.
2. Valuation of Inventories
Merchandise inventories: Retail method applied on an annual average cost basis.
3. Depreciation
Property and store equipment:
Depreciation is computed using the declining-balance method at rates based on estimated useful
lives of the assets. The ranges of useful lives are from 10 to 34 years for buildings and from 5 to 8
years for furniture, fixtures and equipment.
Intangible assets:
Amortization of intangible assets is computed by the straight-line method.
Costs of software for internal use are amortized by the straight-line method over 5 years, which is
the internal useful life.
Long-term prepaid expenses:
Amortization of long-term prepaid expenses is computed by the straight-line method
4. Accounting policies for important reserves
Allowance for Doubtful Accounts:
Allowance for doubtful accounts is provided at an amount of possible losses from uncollectable
receivables based on the actual rate of losses from bad debt for ordinary receivables, and on
estimated recoverability for specific doubtful receivables.
Accrued Employees’ Bonuses:
Accrued employees’ bonuses are provided for payments of employees’ bonuses based on theestimated amounts.
Provision for use of points granted:
The Company provides LAWSON PASS holders and MY LAWSON POINT holders whenpurchasing goods, an entitlement to certain points that the holder can redeem for a discount on
subsequent purchases from LAWSON stores.
Allowance for Employees’ Retirement Benefits:
Allowance for employees’ retirement benefits are provided at the amount calculated based on the
projected benefit obligations and plan assets at the balance sheet date. Actuarial differences areamortized from the following fiscal year on a straight-line basis over a certain period (10 years)
within an average remaining service period of employees at the time of their occurrence. Prior
service cost is amortized, starting with the fiscal year incurred, on a straight-line basis over acertain period (10 years) within an average remaining service period of employees.
Allowance for Retirement Benefits to Executive officers and Corporate Auditors:
Allowance for retirement benefits to corporate auditors and executive officers of the Company iscalculated to state the liability at 100% of the amount that would be required if all corporate
auditors, executive officers
resigned their services with the Company at the balance sheet date.

33

5. Leases
Finance leases that do not transfer ownership of leased property to the lessee are accounted for as rental
transactions.
6. Accounting for consumption tax
Consumption tax is excluded from income and expense.
(Notes to the Non-consolidated Balance Sheet)
1. Accumulated depreciation of property and store equipment: ¥ 122,671

million

2. Due from / to subsidiaries and affiliated companies
Short-term receivables due from subsidiaries and affiliated companies ¥ 3,331 million
Short-term payables due to subsidiaries and affiliated companies ¥ 1,182 million
Long-term payables due to subsidiaries and affiliated companies ¥ 25 million
3. Revaluation of land used for businessLand used for business was revalued on the basis prescribed by the Law Concerning Revaluation ofLand (Law No. 34, March 31, 1998). The resulting revaluation difference for land used for businessthat is scheduled to be sold has been included in net assets as land revaluation difference, net of therelated tax, which is included in deferred tax assets for land revaluation.
Revaluation method: The value of land is determined based on the road-based 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 the assessed 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 balance sheet datewas ¥ 263million.

34

(Notes to the Non-consolidated Statement of Income)1. Transactions with subsidiaries and affiliated companies
Operating transactions
Operating revenues
Selling, general and administrative expenses
Transactions other than operating transactions:¥ 2,271 million¥ 2,818 million¥ 229 million

2. Long-lived assets
The Company recognized an impairment loss mainly for each store with the smallest cash generating
unit.
The Company recognized an impairment loss on the following assets that declined in value due mainly
to continuous operating losses. The carrying amounts, of those assets were written down to therecoverable amount and were recorded in special losses.
Category by use

Location
Tokyo

StoresTotal

Osaka
Others―AssetsBuildings・Furniture, fixtures and equipment andothers〃〃―Millions of yen
174

Category by fixed assets(Millions of yen)
Buildings
1,224
Structures
203
Furniture, fixtures and equipment
202
Leased property
340
Other
9
Recoverable value of the impaired assets is calculated based on the net selling price or value in use.
The net selling price of land was calculated based on the appraised value by the real estate appraiser or
expected contract price, and the value in use was calculated by discounting estimated future cash flows
to which the 5.3% discount rate was applied.
3. Provision of allowance for doubtful accounts
Provision of allowance for doubtful accounts has been made for loans receivable to the consolidated
subsidiary VALUE LAWSON, Inc.
(Notes to the Non-consolidated Statement of Changes in Net assets)
Number of shares and kind of treasury stock
Common stock 432,015 shares

35

163
1,642
1,980

(Accounting for Income taxes)
Components of deferred tax assets and liabilities were described as follows:(Millions of yen)Enterprise taxes payable
Accrued employees' bonuses
Loss on write-down of investments in affiliatedcompanies
Excess of depreciation
Excess of amortization of software
Allowance for employees’ retirement benefits
Allowance for doubtful accounts
Impairment loss
Loss on replacement of computer system
Other
Subtotal of deferred tax assets
Less valuation allowances
Total deferred tax assets

¥

¥

786
1,247
801
4,848
729
4,287
1,748
1,870
841
2,018
19,181(844)
18,336(Accounting for retirement benefits)
Summary of the retirement benefit plans:
The Company has defined benefit lump - sum severance indemnity plans which cover substantially allof their employees. The Company established a trust fund for its lump - sum severance indemnity plan.
In addition, the Company has a defined contribution plan for severance payments.
Projected benefit obligations
a. Projected benefit obligations
b. Plan assets
c. Projected benefit obligations in excess of plan assets (= a + b)
d. Unrecognized prior service coste. Unrecognized actuarial differences
f. Allowance for employees’ retirement benefits (= c + d + e)
Net periodic benefit cost
(Millions of yen)a. Service costb. Interest costc. Amortization of prior service costd. Amortization of actuarial differences
e. Net periodic benefit cost (= a + b + c + d)
f. Contribution to defined contribution plang. Total (= e + f)

(Millions of yen)
(12,139)
5,574(6,565)878
722(4,963)

¥

¥

823
222
175
97
1,320
265
1,585

Basis of calculation of projected benefit obligations
a. Discount rate
2.0%
b. Expected rate of return on plan assets
0%c. Allocation method of estimated total retirement Straight-line basis (a method to allocate estimatedbenefits
total retirement benefits equally to respective
periods in employee’s whole service period)36

(Leases)Finance lease contracts other than those by which the ownership of the leased property is to betransferred to lessees:(1) The assumed data as to acquisition cost, accumulated depreciation and net leased property(Millions of yen)
Acquisition cost
Furniture,
fixtures andequipment

Accumulated
depreciation

54,200

Accumulated
impairment loss

Leased property

776

22,99630,427(2) Obligations under finance leases(Millions of yen)
Due within one year
Due after one year
Total
Allowance for impairment loss on leased property

7,123
17,101
24,224352(3) Lease payments, transfer from allowance for impairment loss on leased property, depreciation
expense, interest expense and impairment loss:(Millions of yen)
Lease payments
Transfer from allowance for impairment loss on leased property
Depreciation expense
Interest expense
Impairment loss

11,112302
10,520849
340(4) Computation method of depreciation expense
Depreciation expense is computed by the straight-line method, assuming the lease period as theuseful life and no residual value.
(5) Computation method of interest expense
The difference between the total lease contract amount and the acquisition cost is assumed to beinterest, and interest expense is computed by the interest method.

37

(Related Party Transactions)(1) Subsidiaries and affiliates
Relationship with the
Attribute

Company
nameCompany

Business line Equity ownershipor profession

Affiliated

LAWSON CS Financial

companies

Card, Inc

percentage

service―

Directors

Business

posts held

relationship―Transaction
Description ofamounttransactions(Millions ofEnding balance
Account item

yen)

yen)

Outsourcing

Decrease inof a card

short-term

service etc

loans(Millions of

20,000――receivable
Interest

37

received

Transaction conditions and the principles on the decision thereof:
1. The interest rates of short-term loans were determined rationally, referring to the market interest rate.
2. Amounts presented between LAWSON and LAWSON CS Card, INC. are related to transactions fromMarch 1, 2008 through April 30, 2008 because LAWSON sold all shares on April 30, 2008.
(2) Subsidiaries of an affiliated company of the Company
Relationship with theTransaction

Company
Attribute

Company
nameBusiness line or Equity ownershipprofession

percentage

Directors
posts held
concurrently

RYOSHOK
Subsidiaries

Sales of

U LIMITED processed

of an

foods

(Ownership)the―Business

Description ofamounttransactions(Millions of

VendorPurchases for

5,774

company

operated

is directlystorescompany ofowned(Purchases for

the Company

the franchised

Accounts

6,571

payable-trade

the Company-

affiliated(Millions of
yen)

yen)

relationship0.3 %Ending balance
Account item

(85,856)

stores)Food Service Sales of fast――

VendorPurchases for

Network Co, foods and daily

the Company-

Ltd

operateddelivered foods

14,711

Accounts

16,441payable-tradestores(Purchases for(212,886)

the franchised
stores)SAN-ESU

Confectionary

INC.

wholesale

the Company-

business

operated――

VendorPurchases for

2,013

stores(Purchases forthe franchised (31,452)
stores)38

Accounts
payable-trade

2,930

Transaction conditions and the principles on the decision thereof:
The terms and conditions for purchase transactions are determined as the same as those for other generalbusiness transactions, except that regarding the purchases made for the franchised stores, the Company
acts as an alternative payer, not as direct party of purchase.
(Per Share data)
1. Net assets per share
2. Net income per share

1,969.99
222.54yenyen

The above amounts and the number of shares in these consolidated and non-consolidated statements aretruncated below the unit, and the ratios are rounded to the nearest whole number.

39

（TRANSLATION ONLY）

INDEPENDENT AUDITORS' REPORT
April 3, 2009
To the Board of Directors of
LAWSON, INC.:
Deloitte Touche Tohmatsu
Designated Partner,
Engagement Partner,
Certified Public Accountant: Toshihiko Matsumiya
Designated Partner,
Engagement Partner,
Certified Public Accountant: Hiroyuki Morita
Pursuant to the first item, second clause of Article 436 of the Corporate Law, we have audited thefinancial statements, namely, the balance sheet as of February 28, 2009 of LAWSON INC. (the“Company”), and the related statements of income and changes in net assets, and the related notes for the34th fiscal year from March 1, 2008 to February 28, 2009 and the accompanying supplemental schedules.
These financial statements are the responsibility of the Company's management. Our responsibility is toexpress an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements and the accompanying supplemental schedules are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements and the accompanying supplemental schedules. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well as evaluating theoverall financial statement and the accompanying supplemental schedules presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and the accompanying supplemental schedules referred to above
present fairly, in all material respects, the financial position of the Company as of February 28, 2009, andthe results of its operations for the year then ended in conformity with accounting principles generally
accepted in Japan.
Our firm and the engagement partners do not have any financial interest in the Company for which
disclosure is required under the provisions of the Certified Public Accountants Law.

The above represents a translation, for convenience only, of the original report issued in the Japanese
language.

40

（TRANSLATION ONLY）

INDEPENDENT AUDITORS' REPORT
April 3, 2009
To the Board of Directors of
LAWSON, INC.:
Deloitte Touche Tohmatsu
Designated Partner,
Engagement Partner,
Certified Public Accountant: Toshihiko Matsumiya
Designated Partner,
Engagement Partner,
Certified Public Accountant: Hiroyuki Morita
Pursuant to the fourth clause of Article 444 of the Corporate Law, we have audited the consolidated
financial statements, namely, the consolidated balance sheet as of February 28, 2009 of LAWSON, INC.
(the “Company”) and consolidated subsidiaries, and the related statements of income and changes in net
assets, and the related notes for the 34th fiscal year from March 1, 2008 to February 28, 2009.
These
consolidated financial statements are the responsibility of the Company's management.
Our
responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An
audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall consolidated financial statement presentation. We believethat our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of the Company as of February 28, 2009, and the results of its operations
for the year then ended in conformity with accounting principles generally accepted in Japan.
Our firm and the engagement partners do not have any financial interest in the Company for which
disclosure is required under the provisions of the Certified Public Accountants Law .

The above represents a translation, for convenience only, of the original report issued in the Japanese
language.

41

(TRANSLATION ONLY)<Copy of the Audit Report of the Board of Corporate Auditors>
AUDIT REPORTRegarding the execution of duties by the Directors for the 34th business term from March 1, 2008 to
February 28,2009, we have prepared this Audit Report, through due deliberations based on the audit
reports prepared by each Corporate Auditor, and hereby report as follows:1.

Auditing Methods Employed by the Corporate Auditors and Board of Corporate Auditors and Details
of Such Methods
We have established audit policies, audit programs and other guidelines for the current term, andreceived the reports from each Corporate Auditor regarding their execution of audits and results thereof,
as well as reports from the Directors, other relevant personnel, and the Accounting Auditor regarding theexecution of their duties, and asked for explanations as necessary.
Each Corporate Auditor, pursuant to the auditing standards of Corporate Auditors established by the
Board of Corporate Auditors, has followed the audit policies and audit programs for the current term,
communicated with the Directors, officers, internal audit department and other relevant employees,
endeavored to collect information and develop the audit environment, attended the Board of Directors
meetings, the management meetings, Compliance & Risk committee meetings, and the like, and otherimportant meetings, received reports from the Directors, officers, internal audit department and otherrelevant employees regarding the execution of their duties, asked for explanations whenever necessary,
reviewed important authorized documents and the like, and investigated the status of operations andassets at the head office, branches, and other principal offices and stores.
In addition, pursuant to the audit items and audit methods established by the Board of the Corporate
Auditors, we have monitored and verified the resolution of the Board of Directors regarding theorganization 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 the Ordinance for Enforcement of the Companies Act
and the status of the development and operation 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 complies withlaws and regulations and the Articles of Incorporation and other system necessary to ensure theproperness of operations of a Stock Company. With respect to subsidiaries, we have communicated andexchanged information with the Directors, Corporate Auditors and other relevant personnel ofsubsidiaries, requested the subsidiaries to report on their business where necessary, and investigated theirstatus of operations and assets. Based on the above methods, we have examined the business report andsupplementary schedules thereof for this business term.
Furthermore, we have monitored and verified whether Accounting Auditor maintained its independent
position and implemented appropriate 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 that the duties are
performed properly” (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” (BusinessAccounting Council, October 28, 2005) and the like, and, when necessary, asked for explanations.
Based on the above methods, we have examined the “consolidated financial statements (consolidatedbalance sheet, consolidated statement of income, consolidated statements of changes in stockholder’sequity, and notes to consolidated financial statements)” and “non-consolidated financial statements(balance sheet, statement of income, non-consolidated statements of changes in stockholder’s equity, andnotes to non-consolidated financial statements) and supplementary schedules thereof” for this term.

42

2. Result of Audit(1) Result of Audit of Business Report and Other Relevant Documents
1. We have found that business report and the supplementary schedules thereof fairly present thestatus of the Company, in conformity with the applicable laws and regulations and the Articles ofIncorporation.
2. 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.
3. We have found that the content of the resolution of the Board of Directors regarding the Internal
Control System is adequate. In addition, we have found no matters on which to give remarks inregard to the execution of duties by the Directors concerning Internal Control System.
(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, are adequate.
(3) Result of Audit of Non-consolidated Financial Statements and Supplementary Schedules thereof.
We have found that methods and the result of the audit by the Accounting Auditor, Deloitte
Touche Tohmatsu, are adequate.
April 13, 2009
The Board of Corporate Auditors of Lawson, Inc.
Standing Corporate Auditor
Munehiko Nakano(Outside Corporate Auditor)
Standing Corporate Auditor
Corporate Auditor(Outside Corporate Auditor)

Kenji Yamakawa
Tetsuo Ozawa

Corporate Auditor(Outside Corporate Auditor)

Hiroshi Kuwata

43

REFERENCE DOCUMENT FOR THE GENERAL MEETING OF SHAREHOLDERS
Proposals and references
Proposal No. 1: Appropriation of Surplus
The Company intends to pay year-end dividends as specified below after comprehensively considering its
financial position, earnings, dividend payout ratio and other factors while ensuring sufficient funds are
retained to conduct future business development.
We will endeavor to raise the Company’s corporate value by appropriating internal reserves for necessary
business investments such as new store openings, existing store renovations and new businessdevelopment.
Year-end dividends:(1) The assignment of the dividend property to shareholders and total amount thereof¥80 per share of the Company’s common stock for a total of ¥7,933,438,800
Note: The annual dividend per share would be ¥160, including an interim dividend per share of ¥80, representing an
increase of ¥50 from the annual dividend applicable to the previous fiscal year.

(2) Effective date of the dividends from surplus
Wednesday, May 27, 200944

Proposal No. 2: Partial Amendment to the Articles of Incorporation
We propose partially amending the existing Articles of Incorporation as described below.
1. Reasons for the amendments(1) The Company seeks to clarify the positioning of business objectives by designating convenience store
and other franchise businesses, the Company’s main operations, as the first item in Article 2: Purposesof Incorporation, so as to enable shareholders and all other stakeholders to better understand theCompany’s business objectives. Furthermore, given that convenience stores are already awell-established part of the social infrastructure and products and services sold at stores are widely
known, the Company proposes streamlining provisions regarding the various products and services
handled mainly by convenience stores and methods of providing same in order to provide a detailed
response to customers’ constantly changing needs. At the same time, the Company proposes the item
number adjustments as required.
If, in future, the Company enters new businesses other than its main convenience store and otherfranchise operations, the Company will seek shareholder approval again for changing the businessobjectives as necessary after considering the impact on its operating results.
(2) The Company proposes the following changes due to enforcement of the “Law to Amend Part of the
Law Concerning Book-Entry Transfer of Bonds, Etc. to Streamline Settlements for Trading in Stocks,
Etc.” (Law No. 88, 2004, “Settlement Streamlining Law”)
1) Because Supplementary Provision paragraph 1 of Article 6 of the Settlement Streamlining Law
deems that the Company made a resolution to amend its Articles of Incorporation to abolishprovisions for issuing share certificates when the electronic share certificate system took effect inJapan on January 5, 2009, the Company proposes deleting existing paragraphs 2 and 3 of Article 6(Number of Unit Shares (Tangen-Kabushiki) and Issuance of Share Certificates) and text fromparagraph 3 of existing Article 9 (Custodian of Shareholders’ Register) regarding the register of
forfeited share certificates. Furthermore, because Article 221 of the Corporate Law of Japan (the“Corporate Law”) requires the creation and retention of a register of forfeited share certificateseven after the switch to the electronic share certificate system for one year from the day after theenforcement date of the Settlement Streamlining Law, the Company proposes establishing therequired provision in the supplementary provisions.
2) Because Supplementary Provision Article 2 of the Settlement Streamlining Law abolishes the“Law Concerning Depository and Book-Entry Transfer of Share Certificates, Etc.” (1984, Law No.
30) and the share certificate custodian and transfer system, the Company proposes deleting the text
in existing Article 8: Purchase by Shareholders to Make Up for Less-than-Unit (tangen) Shares)
and paragraph 3 of Article 9 relating to beneficial shareholders and the register of beneficial
shareholders.
(3) The Company proposes partially amending text in accordance with the aforementioned amendments.

45

2. Details of the amendments
Proposed amendments are described below.
Existing Articles
ARTICLE 2: Purposes of Incorporation
The Company shall be organized for the purpose ofoperating the following businesses:
1. To sell foods, daily necessities, clothing,furniture, bedclothes, electrical appliances,materials for photographic equipment and tools,
petroleum products, sporting goods, toys,cosmetics, medical equipment, quasi-drugs andpharmaceuticals;
2. To sell watches, eyeglasses, precious metals andjewelry;

3. To sell all kinds of alcoholic beverages, salt,
rice, cigarettes and smoking goods;
4. To sell post stamps, postcards and fiscal stamps;(Amendments underlined)
Proposed Amendments
ARTICLE 2: Purposes of Incorporation
The Company shall be organized for the purpose ofoperating the following businesses:
1. To conduct businesses relating to the
management of convenience stores and otherbusinesses in a franchised chain system;

2. To sell or act as a sales agent for products andservices through stores, mainly convenience stores,
the Internet and other means and to operate
wholesaling, distribution, lease, export and importof same.
DeletedDeleted5. To sell musical instruments and recording media
such as, records, video tapes, compact discs, laser
discs and DVDs;
6. To sell magazines, books, newspapers and worksof fine art;
7. To sell seeds, bulbs, plants, animals, animal
feeds and fertilizer;
8. To sell motor vehicles, motorcycles andbicycles;9. To sell computers and computer software;

Deleted10. To operate the business of catalog-based mailorders;11. To act as an agent for such businesses ascourier service, cleaning, and ticket sale;
12. To sell gift coupons;

Deleted13.
to (Related provisions omitted)
27.

3.
to (The same as existing provisions)
17.

DeletedDeletedDeletedDeletedDeletedDeleted46

28. To provide of technical support, guidance,

Deletedresearch, training, publicity and advertising withregard to the management of convenience stores ina franchised chain system, and publish printed
materials therefor;
29.
to (Related provisions omitted)
31.
32. To operate wholesaling, distribution, lease,18.
to (The same as existing provisions)
20.
Deletedexport and import of the products listed in above
1–12; and33. (Related provision omitted)

21. (The same as the existing provision)

ARTICLE 6: Number of Unit Shares(Tangen-Kabushiki) and Issuance of Share
Certificates1) (Related provision omitted)
2) The Company shall issue share certificates withrespect to the shares.
3) Notwithstanding the preceding paragraph, theCompany may not issue share certificates withrespect to less-than-unit (tangen) shares.
ARTICLE 8: Purchase by Shareholders to Make
Up for Less-than-Unit (tangen) Shares
The shareholders of the Company (including
beneficiary shareholders; hereinafter the same)
having less-than-unit (tangen) shares may request
the Company to sell additional shares tonumerically make unit shares (Tangen-Kabushiki)
together with their own shares
ARTICLE 9: Custodian of Shareholders’ Register
1) (Related provision omitted)2) (Related provision omitted)
3) The register of shareholders (including theregister of beneficiary shareholders, hereinafter thesame), the ledger of stock options and the registerof forfeited share certificates of the Company shallbe made and kept by the custodian of theshareholders’ register, and other administrative
services concerning the register of shareholders,
the ledger of stock options and the register of
forfeited share certificates of the Company shall bedelegated to the custodian of the shareholders’register, and such services shall not be handled by
the Company.
ARTICLE 15: Method of Adopting Resolutions
1) (Related provision omitted)
2) The adoption of resolutions as prescribed by
Article 309, Paragraph 2, of the Corporate CodeARTICLE 6: Number of Unit Shares(Tangen-Kabushiki)
1) (The same as existing provision)
DeletedDeletedARTICLE 8: Purchase by Shareholders to Make
Up for Less-than-Unit (tangen) Shares
The shareholders of the Company having
less-than-unit (tangen) shares may request theCompany to sell additional shares to numericallymake unit shares (Tangen-Kabushiki) together with
their own shares
ARTICLE 9: Custodian of Shareholders’ Register
1) (The same as existing provision)2) (The same as existing provision)3) The register of shareholders and the ledger ofstock options of the Company shall be made andkept by, and other administrative services shall bedelegated to, the custodian of the shareholders’register, and such services shall not be handled by
the Company.

ARTICLE 15: Method of Adopting Resolutions
1) (The same as existing provision)2) The adoption of resolutions as stipulated by
Article 309, Paragraph 2, of the Corporate Code47

shall be made by an affirmative vote of not lessthan two-thirds (2/3) of the voting rights held byshareholders present, where such shareholders
present shall hold shares representing not less than
one-third (1/3) of the exercisable voting rights ofthe shareholders.
(New establishment)

shall be made by an affirmative vote of not lessthan two-thirds (2/3) of the voting rights held byshareholders present, where such shareholders
present shall hold shares representing not less than
one-third (1/3) of the exercisable voting rights ofthe shareholders.
Supplementary Provision
The making and keeping of the register of forfeited
share certificates of the Company and otheradministrative services thereof shall be delegatedto the custodian of the shareholders’ register, andsuch services shall not be handled by theCompany. This supplementary provision will bedeleted on January 6, 2010.

48

Proposal No. 3: Election of One (1) Corporate Auditor
The term of office of current corporate auditor Kenji Yamakawa expires at the conclusion of this 34th
Ordinary General Meeting of Shareholders. Accordingly, we propose that shareholders elect one (1)corporate auditor.
The Board of Corporate Auditors has given its prior consent to this proposal.
The nominee for corporate auditor is as follows.
Name(Date of Birth)
Kenji Yamakawa(September 2, 1947)

Brief Personal History, Assignment and Position in the
Company, and Representative Positions in Other
Companies
April 1970
Joined The Daiei, Inc.
April 1992
General Manager, Accounting
Division, The Daiei, Inc.
May 1992
Corporate Auditor, LAWSON,
INC.
March 1994
General Manager, Corporate
Planning Office, The Daiei, Inc.
May 1995
General Manager, Accounting
Division, The Daiei, Inc.
February 1996
Director, General Manager,
Finance & Accounting Office,
LAWSON, INC.
January 2002
Senior Vice President, General
Manager, Internal Audit Office,
LAWSON, INC.
June 2002

April 2003

March 2004

May 2004

May 2006

Number of theCompany’s
Shares Held
3,200

Senior Vice President, Director,
Internal Audit Office, LAWSON,
INC.
Senior Vice President, Director,
General Affairs Office,
LAWSON, INC.
Senior Vice President, SVP,
General Affairs Office,
LAWSON, INC.
Standing Corporate Auditor(Current position), LAWSON,
INC.
Corporate Auditor, LAWSONTICKET INC. (Current position)

Notes:
1.
The nominee does not have any special interest in the Company.
2.
The nominee’s Brief Personal History, Assignment and Position in the Company, and Representative Positions
in Other Companies are as of April 13, 2009.

49