(TRANSLATION ONLY)
Securities Code: 2651
April 30, 2021
To All Shareholders with Voting Rights
Sadanobu Takemasu
President, Representative Director
Lawson, Inc.
11-2, Osaki 1-chome, Shinagawa-ku, TokyoNOTICE OF THE 46th ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are cordially notified that the 46th Ordinary General Meeting of Shareholders will be held as follows.
If you do not attend the meeting, please exercise your voting rights using either of the methods described below after
reading the attached REFERENCE DOCUMENTS FOR THE GENERAL MEETING OF SHAREHOLDERS.
[Voting in Writing (by Mail)]
Please indicate your approval or disapproval of the matters to be resolved on the Voting Rights Exercise Form
enclosed herewith and return it so that it reaches us by 5:45 p.m. on Monday, May 24, 2021.
[Voting by Electronic Means (Internet, etc.)]
Please exercise your voting rights by 5:45 p.m. on Monday, May 24, 2021, after reading the attached document“Exercising Voting Rights via the Internet, etc.”
1. Date and Time: 10:00 a.m., Tuesday, May 25, 2021
2. Venue: Hall C, Tokyo International Forum, 5-1 Marunouchi 3-chome, Chiyoda-ku, Tokyo
3. Objectives of the Meeting
Reports:
The Business Report, the Consolidated Financial Statements and the Nonconsolidated Financial Statements for the
45th Fiscal Term (from March 1, 2020, to February 28, 2021), and the Audit Reports Thereof
Matters to Be Resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Election of Seven (7) Directors
Proposal No. 3: Election of One (1) Audit and Supervisory Board Member•••

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

(TRANSLATION ONLY)

BUSINESS REPORT(March 1, 2020 through February 28, 2021)
I. CURRENT STATUS OF THE CORPORATE GROUP
1. Summary of Operations(1) Business Developments and Results of Operations
During the fiscal year under review, or fiscal 2020 ended February 28, 2021, the novel coronavirus disease(COVID-19) spread across the world. In Japan, the first state of emergency was declared in April 2020. This
had an immense impact on the nation’s economic and social activities and the daily lives of its people. Although
the economy showed a gradual recovery trend after the state of emergency was lifted in May 2020, the numberof new infections increased again in November 2020, resulting in the second state of emergency being declaredin January 2021 for 11 prefectures including Tokyo. This dampened the recovery in economic and social
activities and affected people’s daily lives. Meanwhile, changes in consumer lifestyles and purchasing behavior
have progressed, such as remote work becoming prevalent. Such changes have also affected the business of theLawson Group, significantly reducing its net sales, but the Group continues to strive to address the changes bystrengthening its merchandise assortment in line with the shifting customer demands, among other measures as
strengthening its merchandise assortment, expanding its delivery service, and enhancing its smartphone-based
sales campaign initiatives in line with the shifting customer demands.
As a result, for fiscal 2020 on a consolidated basis, gross operating revenue decreased to 666,001 million
yen (down 8.8% from previous fiscal year), operating income decreased to 40,876 million yen (down 35.1%
from previous fiscal year) and ordinary income decreased to 37,610 million yen (down 33.3% from previous
fiscal year). Profit attributable to owners of parent decreased to 8,689 million yen (down 56.8% from previous
fiscal year).
Against such a backdrop, based on our belief that as a company that provides essential and life-sustaining
infrastructure our most important mission is to meet the needs of local people and stay close to our customers,
our headquarters and franchise stores have made unified efforts toward making our stores the “Hub of
refreshment in every community” under our Group philosophy of “Creating Happiness and Harmony in Our
Communities.”
Furthermore, we also focused on improving our group-wide internal control system and addressing operating
risks based on the 2020 Basic Policy for Improvement of Internal Control Systems. We will continue promotinginternal control going forward.
Operating results by business segment were as follows.
It should be noted that new reportable segments have been applied since fiscal 2020 and that the comparison
and analysis of figures for the fiscal year from March 1, 2020 to February 28, 2021 were based on the newreportable segments.
(Domestic Convenience Store Business)
After the state of emergency was lifted in May 2020, recovery trends were seen in the number of customers
and sales. However, COVID-19 spread again after November 2020, resulting in the declaration of Japan’s
second state of emergency in January 2021, which had an immense impact on the number of customers. The
number of new COVID-19 cases started decreasing again in February 2021, leading to a recovery trend incustomer behavior.
As precautionary store measures against COVID-19, we continued to have transparent plastic barriers
installed at cash registers; ensured social distancing; and made sure employees practiced rigorous hand washingand gargling, disinfected their hands with alcohol-based disinfectant, and wore face masks, giving top priority
to the safety of customers and store employees. We are also promoting self-checkout systems, which allow us
to reduce interpersonal contact at checkout.
In store operations, we are striving to establish LAWSON stores as convenience stores endorsed by all ourcustomers. To this end, we are continuing to implement measures to achieve our three commitments, namely,
to pursue compelling taste, to be considerate to people, and to be environmentally friendly. By developing
distinctive products that are compellingly delicious and health-conscious, we are aiming to further reinforce
our product lineup, while rigorously working to offer thoughtful customer service at our stores and ensure
environmental friendliness by reducing food waste, the use of plastics and CO2 emissions, etc.
[Store Operations]
In store operations, we continued to focus on reinforcing adherence to the Three Essential Practices, whichemphasizes (1) serving customers courteously; (2) offering a merchandise assortment focused on basic itemswith high demand; and (3) keeping our stores and communities clean. Furthermore, we kept up our initiatives
to increase the profits made by franchise stores, including helping them streamline their store operation and1

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reduce costs associated with food waste and utility expenses. Meanwhile, we also focused on expanding ourmerchandise assortment of items subject to heightened demand amid the COVID-19 crisis in our efforts to
respond to customer needs and increase sales.
[Merchandising and Service Strategies]
On the merchandise side, net sales decreased significantly owing to a decline in the number of customers,
but sales surged in fresh vegetables, frozen foods, and daily delivered foods, among others, as a result of
expanding the merchandise assortment in response to the rise in home cooking instead of dining out. In thespring of 2020, we divided our Lawson Select private brand products into two series, “L basic” and “L marche.”
We are working to develop new products for the private brands with newly designed logos and packaging,
focusing on ready-made dishes that are high in demand.
We will continue creating stores tailored to customers’ changing lifestyles and needs amid the spread of
COVID-19.
In the rice range, we revamped our “Kinshari Onigiri Rice Ball” series in November 2020 by blending
different varieties of brand-name rice—produced in the prefectures of Yamagata, Ishikawa, Toyama, or Gifu—
for different geographic markets. High value-added products in the series such as those featuring rare andseasonal ingredients were launched, enjoying high popularity.
In the cooked noodles range, we launched the “RAMEN YOKOCHO” series of microwavable noodle
products in October 2020 under the supervision of popular ramen noodle eateries nationwide, and they enjoyedrobust sales.
In the dessert range, our original dessert products contributed to sales. Specifically, the “Uchi Café Spécialité”
series, our newly released “reward dessert” products that bring out the pure tastiness of the ingredients, waswell received by customers, along with our regular products including our BASCHEE Basque-style cheesecake
as well as our novel dessert products that we are continuing to develop.
The Machikado Chubo in-store kitchen service offering freshly prepared boxed meals is being received well,partly owing to reduced opportunities to go out amid the COVID-19 crisis.
A range of promotional campaigns featuring popular contents designed to be fun for a wide variety ofcustomers proved effective in driving sales of related products.
In food delivery service, for which needs have been growing owing to the COVID-19 crisis, we started
offering delivery service through foodpanda in November 2020 in addition to Uber Eats. As a result, thecombined number of stores listed on food delivery services reached 1,472 in 27 prefectures as of February 28,
2021. In addition, Uber Eats started delivering over-the-counter (OTC) drugs sold at three LAWSON stores inTokyo as the first OTC drugs included in Uber Eats’ lineup in Japan.
The SMARI service, our non-face-to-face package shipment service using SMARI Box, which had been
designed exclusively for the service, was expanded into the Chubu region in November 2020, with 250 storesin Aichi Prefecture introducing the service. As of the end of February 2021, the service is offered at 2,850
stores in the Tokyo, Nagoya and Osaka metropolitan areas.
[Breakdown of Sales by Merchandise Category at Chain Stores in Domestic Convenience Store Business]
Sales
Percentage of total
Year on Year
Product group(millions of yen)(%)(%)
Processed foods
93.5
1,156,760
53.4
Fast foods

462,497

21.3

84.6

Daily delivered foods

343,772

15.9

97.8

Nonfood products

202,788

9.4

96.7

Total

2,165,818

100.0

92.4

[Store Development]
In opening new stores, the Group continued to focus on developing profitable stores.
During the fiscal year under review, the total number of LAWSON, NATURAL LAWSON and LAWSONSTORE100 stores opened in Japan stood at 373 stores. Meanwhile, a total of 341 stores in the country wereclosed. As of the end of February 2021, the total number of domestic stores was 14,476.*
In an effort to establish convenience store models catered to an aging population and a trend toward selftreatment, we are building partnerships with dispensing pharmacy and drug store chains to operate healthcareoriented LAWSON stores that offer over-the-counter pharmaceuticals and prescription drugs, as well as a wider
assortment of cosmetics and daily necessities than conventional LAWSON stores. The number of stores
offering non-prescription drugs has reached 250 stores (includes 53 pharmacy LAWSON stores equipped withdrug-dispensing pharmacies) as of the end of February 2021. Moreover, the number of stores offering nursing
care consultation services has reached 23 as of the end of February 2021. Furthermore, we have also been
expanding our chain of “in-hospital LAWSON stores,” which feature strengthened focus on goods for2

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inpatients and medical, sanitary, and nursing supplies in addition to merchandise and services offered atstandard convenience stores. The number of such stores has reached 335 as of the end of February 2021.
Building on our expertise developed through operation of in-hospital LAWSON stores, we will continue tosupport the lives of all people interacting with hospitals.
With the aim of supporting our customers’ beauty, health, and comfortable lifestyles, our NATURALLAWSON stores offer an exclusive assortment of items including original products adopting select ingredients
as well as products produced in collaboration with renowned brand names. Meanwhile, our LAWSONSTORE100 stores, which are mini supermarkets in the size of a convenience store, aim to sustain the daily livesof consumers by offering fresh, high-quality, safe, and reliable fruits and vegetables. The stores are visited bycustomers of all ages including children and the elderly, and particularly single people and homemakers. As ofthe end of February 2021, we operate 143 NATURAL LAWSON stores and 679 LAWSON STORE100 stores.
* The numbers of store openings and closings and total number of stores in Japan include stores operatedby Lawson, Inc. and equity-method affiliates, Lawson Kochi, Inc., Lawson Minamikyushu, Inc. and Lawson
Okinawa, Inc.
[Change in Total Number of Domestic Stores]
Total stores as ofFebruary 29, 2020
LAWSON

Change during fiscal
year

Total stores as ofFebruary 28, 2021

13,55797

13,654

NATURAL LAWSON

145

(2)

143

LAWSON STORE100

742

(63)

679

14,44432

14,476

Total[Other]On September 10, 2020, Lawson, Inc. entered into a joint business agreement with POPLAR Co., Ltd. toconvert and operate some of the stores under the POPLAR, SEIKATSU SAIKA, and THREE EIGHT brands
into LAWSON POPLAR or LAWSON brand stores.
Based on the content of the “Fact-Finding Survey Report on Transactions between the Headquarters ofConvenience Stores (Franchisers) and their Franchisees” (September 2020) and the “Fact-Finding Survey on
Transactions between the Headquarters of Convenience Stores (Franchisers) and their Franchisees (Overall
Questionnaire Results)” compiled by the Japan Fair Trade Commission, Lawson, Inc. implemented a selfinspection program, and formulated and announced an improvement plan on November 30, 2020.
As part of our measures to enhance the financial stability of our franchise stores, we are proceeding with arange of short-, medium-, and long-term initiatives to support them with multiple store ownership, store
manager development, and measures for new franchise owners. In addition, we have been providing financial
support to stores facing considerable sales declines due to the spread of COVID-19, and will proceed withfurther measures to increase their sales and profits under strong partnerships with them.
We jointly develop products with regional business operators nationwide that have been affected by COVID19. Through such initiatives, we aim to support local businesses and producers through our LAWSON stores.
As a result, Domestic Convenience Store Business posted gross operating revenue of 422,501 million yen(down 10.4% from previous fiscal year) and segment profit of 28,739 million yen (down 39.0% from previous
fiscal year).
.
(Seijo Ishii Business)
At stores of Seijo Ishii, a high-end supermarket chain offering quality foods, we provide our customers withwell-selected, safe, and reliable foods. The number of directly operated Seijo Ishii stores reached 164 as of theend of February 2021. Demand at supermarkets remained high amid the spread of COVID-19, and demand for
perishables including fruit and vegetables as well as meat and fish grew markedly, especially at street-sidestores. In addition, Seijo Ishii’s original ready-made dishes that had always been popular among manycustomers were also in high demand, contributing to pushing up overall sales significantly. By continuing toleverage the company’s strengths including its product development expertise, know-how acquired as amanufacturing retailer, and retailing techniques, we will endeavor to enhance the brand capacity of Seijo Ishii.
As a result, Seijo Ishii Business posted gross operating revenue of 103,037 million yen (up 10.7% from

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previous fiscal year) and segment profit of 10,329 million yen (up 23.7% from previous fiscal year).
(Entertainment-related Business)
With regard to our Entertainment-related Business, the ticketing business of Lawson Entertainment, Inc., weexperienced a precipitous drop in ticket transaction value as a result of event cancellations and postponements
owing to the spread of COVID-19. Hosting of events continues to be restricted, but we are striving to expand
ticket transactions for online live streaming events featuring prominent artists and for leisure facilities andsports events that have reopened/resumed, as well as boosting our e-commerce business, for which demand has
risen due to voluntary stay-at-home efforts.
In our product sales business, a total of 57 stores are in operation nationwide as of February 28, 2021,
including our mainstay HMV stores dedicated to selling music and video software, HMV&BOOKS, whichmarkets books, CDs and DVDs, and HMV record shop stores specializing in analog records.
United Cinemas Co., Ltd., an operator of cinema complexes, had to close all its theaters when the state of
emergency was declared in April 2020, and operated with limits imposed on audience sizes even after the stateof emergency was lifted. Currently, however, it is executing normal operations, with the exception of someregions. Audience numbers continued to grow after popular films were launched in October 2020, resulting ina recovery trend in sales. As of February 28, 2021, all 43 sites nationwide offering 389 screens including those
operated on commission are in operation while taking rigorous measures to protect their customers andemployees from infection.
As a result, Entertainment-related Business posted gross operating revenue of 57,909 million yen (down
32.1% from previous fiscal year) and segment loss of 297 million yen (segment profit was 5,313 million yen
in previous fiscal year).
(Financial Services Business)
With respect to our Financial Services Business, in our ATM business, the foundation of our banking
business, we expanded our network of financial institution partners, while working to expand the ATM serviceof Lawson Bank, Inc.
As of the end of February 2021, the number of ATMs installed nationwide reached 13,458 (up 105 fromprevious fiscal year), with each ATM used 43.1 times a day on average, decreasing as a result of the decline
in the number of customers visiting LAWSON stores due to the spread of COVID-19. The total number ofour financial institution partners was 129 nationwide (up 5 from previous fiscal year), including online banks.
By harnessing Lawson Bank’s ATMs and their transaction network, we are continuing with our efforts toenhance the bank’s functions and convenience and to expand our service partners. In June 2020, we started
offering an “instant bank account settlement service,” in which money can be withdrawn from a user’s bankaccount to top up a mobile payment app. Furthermore, other new services have been launched including the“ATM charge service,” where cash can be charged to the user’s mobile payment app at an ATM; the“smartphone ATM service,” which allows the user to deposit and withdraw cash at an ATM with the bank’ssmartphone app without using the user’s bank card; and the “ATM deposit service for business operators,”
which allows store revenues to be deposited to a Lawson Bank account at an ATM by using a dedicateddeposit card.
During the fourth quarter, Lawson Bank entered into partnerships with overseas remittance service
providers Unidos Co., Ltd. and SBI Remit Co., Ltd., allowing their overseas remittance cards to be used at its
ATMs.
In addition, the LAWSON Ponta Plus credit card issued by Lawson Bank allows cardholders to earn
additional Ponta points when making purchases with their card at LAWSON, NATURAL LAWSON, and
LAWSON STORE100 stores to encourage the use of the card. Furthermore, the Ponta point reward rate wasraised in November 2020 to facilitate point accumulation when using the credit card at other stores. By
implementing promotional campaigns and soliciting new cardholders at LAWSON stores, we are also trying
to expand its membership.
* “Up/down from previous fiscal year-end” represents a comparison with the figure as of the end of
February 2020.
As a result, Financial Services Business posted gross operating revenue of 31,573 million yen (down 7.4%
from previous fiscal year) and segment profit of 1,753 million yen (down 43.2% from previous fiscal year).
(Other Business)
With regards to Overseas Business, the Group’s operating companies opened LAWSON stores in the
People’s Republic of China, Thailand, Indonesia, the Philippines, and the United States of America (Hawaii).
In the People’s Republic of China, we advanced into Haikou, Hainan province in October 2020. The
number of LAWSON stores in the entire country reached 3,344 as of the end of February 2021. In responseto the spread of COVID-19, we closed some stores or shortened their opening hours at the beginning of the
fiscal year under review, but as normal operations were resumed relatively earlier than in Japan and other

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regions, net sales have generally recovered.
In other regions, apart from some stores that have suspended their operations in response to the spread of
COVID-19, all other stores are carrying out normal operations, with rigorous infection prevention measuresin place, in order to sustain the daily lives of customer.
[Distribution of Lawson Brand Stores Overseas by Region]
Number of stores(as of February 29,
2020)

Change during
fiscal year

Number of stores(as of February 28,
2021)

1,574

252

1,826

China Chongqing

235

106

341

China Dalian

192

57

249

China Beijing and surrounding area

153

62

215

China Shenyang

26

52

78

China Wuhan

401

40

441

China Hefei

50

56

106

China Changsha

15

50

65

China

－

23

23

Thailand

133

7

140

Indonesia

72

(4)

68

Philippines

65

2

67

United States of America Hawaii

2

－

2

2,918

703

3,621

Country/Region
China Shanghai and surrounding area

HaikouTotal

As a result, Overseas Business posted gross operating revenue of 61,356 million yen (up 9.2% fromprevious fiscal year) and segment profit of 809 million yen (segment loss was 1,005 million yen in previous
fiscal year).

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

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Issues

KPIs for 2030

KPIs for 2050

Reducing food waste

Reduce by 50% over 2018

Reduce by 100%

Reducing plastic use(for containers and packaging)

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

Reducing plastic use（Plastic shopping bags）

Plastic shopping bags
Reduce by 100%―

Reducing CO2 emissions

CO2 emissions per store
Reduce by 30% over 2013

Reduce by 100%

To reduce food waste, we optimize the number of purchases, offer discounts to sell out all stock, andreduce unsold leftovers by selling special feature items on a reservation basis. Meanwhile, we take leftover
food products to recycling plants to have them recycled into pig and chicken feed or fertilizers for growing
vegetables. Oil waste is also recycled into nutritional additives for feedstuffs and biodiesel.
To reduce plastic use, we have replaced the plastic cups used for iced coffee and café latte offered at“MACHI café” with paper cups and adopted lids with openings to eliminate the need for straws. We also
started charging fees for plastic shopping bags in response to the mandatory surcharge implemented
nationwide from July 2020, and now use plastic bags with a mix of 30% plant-derived materials. As a resultof these measures, the percentage of Lawson customers declining single-use plastic shopping bags iscurrently 74.9% as of the end of February 2021.
To prevent global warming and reduce electricity consumption at stores, we have been installingchlorofluorocarbon (CFC)-free (CO2 refrigerant) refrigerator/freezer systems. The number of stores
equipped with such systems reached approximately 4,200 as of the end of February 2021, up 500 stores fromthe end of the previous fiscal year. Furthermore, Lawson, Inc. endorsed the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD) in April 2020. To combat worsening climate change
issues, we have analyzed climate-related risks and opportunities and made our first disclosure on our official
website in December 2020. We will further implement scenario analysis on major transition risks andphysical risks, identify their impact on our business strategies, examine measures to take, and endeavor toproactively disclose information.
On March 1, 2021, the position of chief sustainability officer (CSO) was established and assumed by thepresident and CEO, representative director. We intend to further strengthen our initiatives under the new
structure.
We also continued with our scholarship program for children from single-parent families, selecting 400
students to receive scholarships in fiscal 2020. Since August 2019, Lawson has periodically donated originaldessert products and processed foods that missed their store delivery deadlines (but were still well within
their best-before dates) to the Japan Food Bank Promotion Group and Kodomo Takushoku Oendan, a charity
organization that delivers food to children. The donated products are delivered to various bodies across Japan,
which then provide them to families who need food aid, children’s cafeterias, orphanages, facilities for people
with a disability, etc. In fiscal 2020, we donated a total of some 270,000 items (about 30 tons) of food products,
including Lawson’s original items and national-label products developed exclusively for Lawson.
While working to take protective measures against the spread of COVID-19 at our stores, we have also
conducted various initiatives to support people who are forced to persevere amid difficult situations in their
day-to-day lives. In March 2020, in response to a request, we distributed free rice balls to after-school
childcare centers in 47 prefectures nationwide as a way to supplement children’s lunches during the
temporary school closure. Under the three-day program, 584,983 rice balls were delivered to 307,332
children at a total of 7,163 facilities. In addition, for children with limited space to play during the stay-homeperiod, LAWSON stores helped them have fun at home by offering free printouts of coloring sheets produced
using multifunction copiers at our stores from March to April 2020. Furthermore, we developed food products
using milk intended for school lunches and sea bream produced in Ehime Prefecture, consumption of which
decreased due to the COVID-19 crisis, to support local producers across the nation.

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(TRANSLATION ONLY)(2) Capital Expenditures
Capital expenditures of the Group during the fiscal year under review totaled 30,510 million yen, of which
21,332 million yen was primarily for store facility investment in buildings, and 8,481 million yen was for the
upgrading of information systems.

(3) Changes in Operating Results and Financial Position① Changes in Operating Results and Financial Position of the Corporate Group
Fiscal 2017
Fiscal 2018
Fiscal 2019
Category/Fiscal Term
43rd Term
44th Term
45th Term
Gross operating revenue
657,324700,647
730,236(millions of yen)
Ordinary income (millions of yen)
65,141
57,70056,346
Profit attributable to owners of parent(millions of yen)
Profit per share (yen)Fiscal 2020
46th Term
666,001
37,61026,82825,585

20,1088,689

268.16255.71200.9586.84

Total assets (millions of yen)

900,256

1,342,329

1,357,732

1,365,430

Net assets (millions of yen)

281,446

281,982

275,347

272,931

Net assets per share (yen)2,755.06

2,763.54

2,707.08

2,674.53

Note: Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Statement No. 28;
February 16, 2018), etc. have been applied from the beginning of the fiscal year ended February 29, 2020 inpreparing the consolidated financial statements. The standards have been retrospectively applied to theconsolidated financial statements for the previous fiscal year.
② Changes in Operating Results and Financial Position of the Company
Fiscal 2017
Fiscal 2018
Category/Fiscal Term
43rd Term
44th Term
Net sales of all convenience stores
2,110,454
2,236,125(millions of yen)
Gross operating revenue
372,891
385,678(millions of yen)
Ordinary income (millions of yen)
50,50851,443Fiscal 201945th Term

Fiscal 2020
46th Term

2,296,156

2,165,818

390,811354,825

45,96233,700

Profit (millions of yen)

19,41731,002

15,486

15,894

Profit per share (yen)194.09309.85154.76158.84

Total assets (millions of yen)

798,603

838,260

858,770

839,426

Net assets (millions of yen)

233,489

240,280

233,705

234,977

Net assets per share (yen)2,331.65

2,399.24

2,333.04

2,344.86

7

(TRANSLATION ONLY)(4) Priority Issues of the Group① Response to social issues
To help resolve social issues pertinent to the Sustainable Development Goals (SDGs), the SDGs Committee
is clarifying the items and issues to be addressed by the Lawson Group with the aim of ensuring that the Groupcan work toward resolving issues and help bring about a sustainable society.
With respect to risks and opportunities related to climate change, we will also consider the disclosure offinancial impacts in addition to risk management.
② Continue to ensure stable management of franchised stores

The Company recognizes that maintaining the stable management of franchised stores is an important issue.
The Company will implement short-term and medium- to long-term initiatives such as measures to stabilize
management by promoting the management of multiple franchised stores as well as measures to enable new
franchised store owners to start their business with peace of mind while addressing shortages of FC store owners
stemming from the declining birthrate, thereby building stronger partnerships with franchised stores.
In addition, we will make the maximum use of digital technology to simplify store operation, increase
efficiency, make working environments more pleasant, and reduce labor needs to develop an environment thatenables people of all ages and nationalities to work at our stores, while addressing issues faced by franchised
stores such as the shortage of store crew.
③ Strengthen our product appeal

By setting out and thoroughly implementing the Three Lawson Promises of “Superior taste,” “Human kindness,”“Environmental (Machi) friendliness,” we aim to further strengthen our product appeal and realize the offeringof products that match the various lifestyles and needs of our customers while addressing social issues, and thus
create stores that are recommended by customers.
④ Take on challenges in future growth areas

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

We believe that enhancing internal control across the Group as a whole and dealing with business risks are
absolutely necessary to develop our business on a continual basis. Proactive efforts in corporate governancethat will enable us to meet the expectations of all stakeholders involved with our Group will help improve ourcorporate value. We will continue focusing our efforts on enhancing internal control and addressing businessrisks. The Company has a listed parent company (Mitsubishi Corporation) and, although we are publicly listed
as a parent/subsidiary pair, we appoint one-third or more independent directors who have no conflict of interest
with general shareholders. In addition, a “Nomination and Compensation Advisory Committee” comprising
only non-executive directors and non-fulltime outside Audit and Supervisory Board members, the majority ofwhich are independent executives, has been voluntarily established to deliberate on executive compensationand candidates for representative director/director positions and to advise the Board of Directors, constituting
a system able to ensure the highest levels of management transparency and fairness.

We conduct business activities under our corporate philosophy, “Creating Happiness and Harmony in Our
Communities”. We continue to make companywide efforts to “master the basics”, “respond to changes” and“meet the challenge of further growth.”
We look forward to the continued support and encouragement of our shareholders.

8

(TRANSLATION ONLY)
2. Current Status at the End of February 2021
(1) Major Business Segments of the Corporate Group and Principal Offices(Domestic Convenience Store Business)① Lawson, Inc.
Major Business:
Primarily operates the Lawson-brand franchise system and undertakes management ofcompany-operated stores as the head office of LAWSON, NATURAL LAWSON and
LAWSON STORE100 convenience store chains.
Head Office:Shinagawa-ku, Tokyo
Principal Offices:
Hokkaido area office (Kita-ku, Sapporo), Tohoku area office (Aoba-ku, Sendai),
Chubu area office (Naka-ku, Nagoya), Kinki area office (Suita city, Osaka),
Chushikoku area office (Kita-ku, Okayama) and Kyushu area office (Hakata-ku,
Fukuoka)Note: In addition to the above sites, the Company has 119 offices throughout Japan,
including branches.
② Lawson urbanworks, Inc.
Major Business:
Operates LAWSON stores mainly in Tokyo and Chiba prefectures.
Head Office:Shinagawa-ku, Tokyo③ Lawson Store100, Inc.
Major Business:
Operates LAWSON STORE100 stores, provides guidance, and engages inmerchandise-related businesses.
Head Office:Shinagawa-ku, Tokyo④ SCI, Inc.
Major Business:
Food wholesaler, including processed meats and frozen foods, and wholesaler ofpacking materials.
Head Office:Shinagawa-ku, Tokyo[Stores]Number ofstores679

IbarakiNumber ofstores226

Kyoto

Number ofstores321

Aomori

278

Tokyo

1,692

Shiga

155

Tokushima

135

Akita

182

Kanagawa

1,076

Nara

137

Kochi

139

Iwate

182

Shizuoka

281

Wakayama

152

Fukuoka515

Miyagi

255

Yamanashi

137

Osaka

1,113

Saga

75

Yamagata

113

Nagano

174

Hyogo

663

Nagasaki

112

Fukushima

171

Aichi

723

Okayama

211

Oita

193

Niigata

230

Gifu

183

Hiroshima

244

Kumamoto

160

Tochigi

199

Mie

137

Yamaguchi

120

Miyazaki

111

241

Ishikawa

104

Tottori

136

Kagoshima

199

695

Toyama183

Shimane142

Okinawa

245

Prefecture
Hokkaido

Gunma
SaitamaPrefecture

Prefecture

Chiba

Prefecture
Ehime

Number ofstores212

Total (domestic)
604 Fukui
109 Kagawa
132
14,476
Note: These figures include stores operated by Lawson, Inc., and three equity-method affiliates, Lawson Kochi, Inc.,
Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.

9

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

10

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

Number of Employees

Domestic Convenience Store Business

5,374

(52)

Seijo Ishii Business

1,217

130

Entertainment-related Business

1,178

(35)

Financial Services Business

165

15

Overseas Business

2,309

(208)

Other Business

142

(37)

10,385

(187)

Total

Year-on-Year Change

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

Number of Employees

Year-on-Year Change

4,752

153

Average Age

Average Years of Service
40.7

13.6

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

Amount Borrowed (millions of yen)

Syndicated loan

180,000

Mitsubishi Corporation Financial &Management Services (Japan) Ltd.

64,070Mizuho Bank, Ltd

8,000

Sumitomo Mitsui Banking Corporation

8,000

MUFG Bank, Ltd.

8,000

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

Mitsubishi Corporation

204,446

50.2

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

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

•

11

(TRANSLATION ONLY)c.

Views of outside directors if they differ from the Board of Directors’ assessment
Not applicable.

② Significant Subsidiaries

Company Name

Capital Stock

Shareholding

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

Lawson urbanworks, Inc.

10

million yen

Lawson Store100, Inc.

99

million yen

SCI, Inc.

10

million yen

SEIJO ISHII CO., LTD.

100

million yen

100.0 %

Seijo Ishii Business

Lawson Entertainment, Inc.

100

million yen

100.0 %

100

million yen

100.0 %

100

million yen

100.0 %

100

million yen

100.0 %

Lawson Bank, Inc.

11,600

million yen

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

Lawson (China) Holdings, Inc.

2,749 million Chinese yuan

100.0 %

Overseas BusinessShanghai Lawson, Inc.

452 million Chinese yuan

100.0 %

Overseas BusinessShanghai Le Song Trading Co., Ltd.

0.1 million Chinese yuan

100.0 %

Overseas BusinessShang Hai Gong Hui Trading Co., Ltd.

0.3 million Chinese yuan

85.0 %

Overseas Business

Zhejiang Lawson, Inc.

10 million Chinese yuan

100.0 %

Overseas Business

Chongqing Lawson, Inc.

190 million Chinese yuan

100.0 %

Overseas Business

Dalian Lawson, Inc.

66 million Chinese yuan

98.3 %

Overseas Business

Beijing Lawson, Inc.

284 million Chinese yuan

64.8 %

Overseas Business

BEIJING LUOSONG Co., Ltd.

0.1 million Chinese yuan

64.8 %

Overseas Business

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

Saha Lawson Co., Ltd.

1,367

million baht

49.2 %

Overseas Business10

million yen

100.0 %

Consulting Business

BestPractice, Inc.

Notes:
1. Shareholding includes indirectly held shares.
2. Lawson Sanin, Inc. was merged into Lawson, Inc. effective March 1, 2020.
3. Beijing Lawson, Inc. implemented a third-party allocation of shares in October 2020, and the ratio ofvoting rights of BEIJING LUOSONG Co., Ltd., a 100% subsidiary of Beijing Lawson, Inc., also changed.
③ Significant Equity-method Associates

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

Capital Stock(millions of yen)
10
100
50

Shareholding
(%)
49.0
49.0
49.0

12

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

(TRANSLATION ONLY)
II. CURRENT STATUS OF THE COMPANY
1. Shares at the End of the Year
(1) Total Number of Shares Authorized to Be Issued:
409,300,000 shares(2) Total Number of Shares Issued and Outstanding:
100,300,000 shares(Including 232,954 shares of treasury shares)(3) Number of Unit (tangen) Shares:
100 shares(4) Number of Shareholders:
31,317(5) Top 10 Major Shareholders:Number of Shares Held(thousand shares)

Shareholding(%)

Mitsubishi Corporation

50,15050.1

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

5,119

5.1

Custody Bank of Japan, Ltd. (Trust account)

2,886

2.9

KDDI CORPORATION

2,110

2.1

NTT DOCOMO, INC.

2,092

2.1

STATE STREET BANK WEST CLIENT － TREATY 505234

1,433

1.4

Employee stockholding association

844

0.8

Custody Bank of Japan, Ltd. (Trust account 7)

812

0.8

Japan Securities Finance Co., Ltd.

799

0.8

Custody Bank of Japan, Ltd. (Trust account 5)

790

0.8

Shareholder’s Name

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

13

(TRANSLATION ONLY)
2. Status of Stock Acquisition Rights(1) Stock Acquisition Rights Held by Corporate Officers of the Company as of February 28, 2021
13th Stock
14th Stock
16th Stock
17th Stock
Acquisition
Acquisition
Acquisition
Acquisition
RightsRightsRightsRightsNumber of option holders and the number of stock acquisition rights (units)
Directors (excluding
1 person
2 person
2 persons
3 persons(5 unit)(32 units)(43units)(72 units)
Outside Directors)
0 person0 person0 person1 person
Outside Directors(0 units)(0 units)(0 units)(5 units)
Class and number ofCommon stock of Common stock of Common stock of Common stock ofshares subject to stock
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
acquisition rights
500
3,200
4,300
7,700
Amount of property
contributed upon the
1 yen
1 yen
1 yen
1 yen
exercise of the sharesubscription rights (pershare)
April 10, 2015
May 2, 2016
May 1, 2017
April 10, 2014
through April 11,
Exercise period
through March 23, through March 24, through April 12,
2034
2035
2036
2037
Main exercise
Note 1
Note 1
Note 1
Note 1
conditions
20th Stock
19th Stock
21st Stock
Acquisition
Acquisition
Acquisition
RightsRightsRightsNumber of option holders and the number of stock acquisition rights (units)
Directors (excluding
5 persons
5 persons
5 persons(101 units)(116 units)(151 units)
Outside Directors)
1 persons
2 persons
2 personsOutside Directors(5 units)(10 units)(10 units)
CommonClass and number ofCommon stock of Common
stock of Common stock ofshares subject to stock
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
acquisition rights
12,60010,600
16,100
Amount of property
contributed upon the
1 yen
1 yen
1 yen
exercise of the sharesubscription rights (pershare)
June 8, 2018
June 7, 2019
June 12, 2020
Exercise period
through May 21,
through May 20,
through May 26,
2039
2038
2040
Main exercise
Note 1
Note 1
Note 1
conditions

14

(TRANSLATION ONLY)(2) Stock Acquisition Rights Issued during the Fiscal Year to Senior Vice Presidents of the Company as
Compensation for Performing Their Duties
21st Stock
Acquisition
RightsNumber of SVPs andthe number of stock acquisition rights
Senior Vice
10 persons
Presidents(67 units)
Class and number ofCommon stock ofshares subject to stock
Lawson, Inc.
acquisition rights
6,700
Amount of property
contributed upon the
1 yen
exercise of the sharesubscription rights (pershare)
June 12, 2020
Exercise period
through May 26,
2040
Main exercise
Note 1
conditions
Notes:
1. A stock acquisition rights holder may exercise his or her rights within the exercise period only fora period of 10 days from the day after losing his or her position as either director and/or executive
officer of the Company.
2. “Senior Vice Presidents” exclude those who concurrently serve as a member of the board.
The total number of shares subject to stock acquisition rights that remain unexercised as of February 28,
2021, is 75,000 shares, accounting for 0.07% of the total number of shares issued and outstanding.

15

(TRANSLATION ONLY)
3. Members of the Board and Corporate Auditors(1) Positions, Names and Assignments (As of February 28, 2021)
Position, Assignments and Important Concurrent Positions
Name
Note: Important concurrent positions of Outside Directors given later in (6) Outside
Directors and Outside Corporate Auditors
Sadanobu Takemasu President and CEO,CHO
Chairman of the Board
Katsuyuki Imada
Senior Executive Managing
Corporate Strategy and Planning Division Director
Officer, Member of the Board―Human Resources
Satoshi Nakaniwa
Executive Vice President,
CFO
Member of the Board
Yutaka Kyoya
Member of the Board
Executive Vice President, Group CEO, Consumer
Industry Group, Mitsubishi Corporation

Keiko Hayashi
Kazunori Nishio

Member of the Board
Member of the Board

Miki Iwamura
Satoko Suzuki
Masakatsu Gonai

Member of the Board
Member of the Board
Audit and Supervisory Board
Member (full-time)
Audit and Supervisory Board
Member (full-time)
Audit and Supervisory Board
MemberAudit and Supervisory Board
MemberAudit and Supervisory Board
Member

Shuichi Imagawa
Eiko Tsujiyama
Yuko Gomi
Keiko Yoshida

Senior Vice President, Division COO, Retail Div.,
Mitsubishi Corporation

Notes:
1. Three members of the Board (Keiko Hayashi, Miki Iwamura and Satoko Suzuki) are outside
directors as stipulated in Article 2, Item 15, of the Companies Act of Japan (the “CompaniesAct”).
2. Three auditors (Eiko Tsujiyama, Audit and Supervisory Board Member, Yuko Gomi, Audit andSupervisory Board Member and Keiko Yoshida, Audit and Supervisory Board Member) areoutside corporate auditors as stipulated in Article 2, Item 16, of the Companies Act.
3. Eiko Tsujiyama, Audit and Supervisory Board Member, has long-term experience as a university
professor in accounting and therefore has considerable expertise in finance and accounting.
Yuko Gomi, Audit and Supervisory Board Member, has a wealth of work experience of law and risk
management mainly in relation to the legal affairs of companies, based on her viewpoint of law as
a lawyer and her broad knowledge.
Keiko Yoshida, Audit and Supervisory Board Member, is a certified public accountant, serving as
the representative of an accounting firm, and therefore has considerable expertise in taxation,accounting and management.
4. The following personnel changes were approved at the board of corporate auditors’ meeting andthe 45th general meeting of shareholders held on May 27, 2020.
Appointment
Member of the Board
Satoko Suzuki
Audit and Supervisory Board
Shuichi Imagawa(full-time)
Audit and Supervisory Board
Keiko Yoshida
Member of the Board
Emi Osono
Resignation
Audit and Supervisory Board
Toshio Takahashi(full-time)

16

(TRANSLATION ONLY)[Reference] Members of the Boards and Senior Vice Presidents(Excluding Non-Executive Directors) (As of March 1, 2021)
Name
Sadanobu Takemasu

Katsuyuki Imada

Satoshi Nakaniwa
Jun Miyazaki

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

Executive Managing Officer

Motonobu Miyake

Executive Vice President

Akihito Watanabe

Executive Vice President

Hitoshi Fujii
Tatsushi Sato
Kazuhiro Wakui
Yasuhiko Hirokane
Zhang Joshua
Toshihiko Chihiro

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

Satoshi Kumagai
Tatsuya Murase
Noriaki Tsuruta
Miwako Tate
Yasuhiro Iseki

Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President

Takeji Hino

Senior Vice President

Tomoki Takanishi
Kazuhiro Harada
Hiroko Otani

Senior Vice President
Senior Vice President
Senior Vice President

Noboru Kakiuchi

Senior Vice President

Position and Major Title
CSO

Corporate Strategy and Planning Division Director,―Human Resources, ―New Business Division,
and Executive Assistant to CSO
CFO
Corporate Communications Division Director, ―Compliance &Risk Management,―Human Resources(deputy in charge) and
Executive Assistant to CSOStore Operations Division Director
and ―Corporate Sales and Store Development
China Business Division Director and Lawson (China) Holdings,
Inc. General Manager
Lawson Entertainment, Inc., United Cinemas Co., Ltd. President
and Representative Director
Merchandising Division Director
Franchisee Business Support Division Director
Merchandising Division Deputy Director
Executive Assistant to President
Shanghai Lawson, Inc. General Manager
SEIJO ISHII CO., LTD. Member of the Board, Senior Executive
Vice President (Temporary Transfer)
Financial Services and Digital Business Division Director
Store Development Division Director
Marketing Strategy Division Director
Communication Division Director
POPLAR CO.,LTD. Senior Executive Vice President(Business Reform)
Human Resources Division Director and LAWSONWILL, Inc
President and Representative Director
Financial Administration Division Director
IT Systems Solution Division Director
Marketing Strategy Division Deputy Director and Merchandising
Division Deputy Director
Franchisee Business Support Division Deputy Director

17

(TRANSLATION ONLY)(2) Outline of Liability Limitation Agreements
The Company has entered into agreements with its directors (excluding persons who are executive directors,etc.) and corporate auditors to limit their liability with regard to the damages outlined under Article 423,
Paragraph 1 of the Companies Act, whereby their liability shall be, at a maximum, the total sum of the amounts
set forth in the respective relevant items of Article 425, Paragraph 1 of the Companies Act. The
aforementioned liability limitation is valid only in cases where the said director or corporate auditor has
performed duties which resulted in a cause of such liability in good faith without committing acts of grossnegligence.
(3) Amounts of Remuneration Paid to Directors and Corporate Auditors
Remuneration paid to officers
Total
Total Compensation Paid by Type
Compensation(millions of yen)
CategoryPaid
Basic(millions ofStock Options
Compensationyen)
Directors(Including Outside Directors)
Outside Directors
Corporate Auditors(Including Outside Corporate
Auditors)
Outside Corporate Auditors
Total

Number of
Corresponding
Directors andCorporate Auditors

252

180

72

9

34

30

4

4

81

81

－

6

39
334

39
261

－
72

4
15

(4) Policy on Decisions Concerning the Amount of Remuneration Paid to Directors① Basic policy on decisions concerning the amount of remuneration paid to directors
Regarding the amount of remuneration paid to directors, it is the Company’s basic policy to design the
remuneration system in close correlation with shareholder returns while ensuring that it will function
sufficiently as an incentive for the enhancement of corporate value, sustainable growth and improvement ofoperating performance, and reward each director with a sufficient and adequate amount of compensation for
the execution of their duties.
② Decision-making process for the amount of remuneration paid to directors
In order to enhance management transparency, the amount of remuneration paid to directors is determinedat the board of directors meeting based on recommendations by the Company’s Compensation Committee,
which consists exclusively of non-executive directors and audit and supervisory board members (part-time)(six out of seven are independent directors).
Members of the Nomination and Compensation Committee:
Director
Yutaka Kyoya
Outside Director
Keiko Hayashi(Vice Committee Chairperson)
Outside Director
Miki Iwamura
Outside Director
Satoko Suzuki
Yuko Gomi
Outside Corporate
Eiko Tsujiyama
Outside Corporate
Auditor(Committee Chairperson)
AuditorKeiko Yoshida
Outside Corporate
Auditor③ Details of remuneration paid to directors

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

[Basic compensation]
Basic compensation of directors is composed of fixed compensation with fixed monthly payments andvariable compensation, which fluctuates in response to the Company’s financial performance for each period.
• Fixed compensation
The amount of fixed compensation commensurate with the position is determined based on standards
stipulated by internal rules.
• Variable compensation
In order to link the remuneration of directors with shareholder returns, the Company has adopted acompensation system that is linked to the Company’s financial performance.

18

(TRANSLATION ONLY)
Variable compensation is paid in accordance with earnings indicators such as EPS (consolidated net
income per share). Regarding five non-executive directors, Yutaka Kyoya, Keiko Hayashi, Kazunori Nishio,
Miki Iwamura and Satoko Suzuki, variable compensation is not applicable as they are focused on theirsupervisory and advisory roles as the Company’s representative directors and in the board of directors
meetings.
[Stock price-linked compensation]
Stock options as stock-based compensation
By incorporating stock options as stock-based compensation linked with stock prices as part ofcompensation paid to directors, the Company has a system in which management shares with stockholders
the benefits from a rise in stock price as well as the risks associated with a price decline. The Company
positions stock options as compensation that is linked to medium to long-term improvement of its corporate
value.
Exercise price on stock options as stock-based compensation is 1 yen per share and the amount of units
granted is determined in accordance with the position of directors. In addition, stock options as stock-based
compensation can be exercised only during designated periods after retirement from office; directors are notallowed to exercise their stock option rights during their term in office.
④ Limit on the amount of remuneration paid to directors
The limit on the amount of remuneration paid to the Company’s directors is determined at the general meetingof shareholders in accordance with laws and regulations.
• Amount of remuneration paid to directors
Resolutions at the general meeting of shareholders as of May 24, 2001: 400 million yen or less per year
• Amount of stock options granted to directors
Resolutions at the general meeting of shareholders as of May 27, 2014: 300 million yen or less per year
(5) Policy on Decisions Concerning the Amount of Remuneration Paid to Corporate Auditors① Basic policy on decisions concerning the amount of remuneration paid to corporate auditors
Regarding the amount of remuneration paid to corporate auditors, it is the Company’s basic policy to reward
each corporate auditor with a sufficient and adequate amount of compensation for the execution of their duties.
② Decision-making process for the amount of remuneration paid to corporate auditors
The amount of remuneration paid to corporate auditors is determined based on discussions among corporate
auditors and is within the remuneration amount limit resolved at the general meeting of shareholders.
③ Details of remuneration paid to corporate auditors
The Company’s corporate auditors receive basic compensation (fixed compensation) in cash.
The amount of basic compensation is decided based on discussions among corporate auditors, taking into
consideration whether or not they are working on a full-time basis, and segregation of auditing duties. Regarding
retirement benefits, the system itself was abolished.
④ Limit of the amount of remuneration paid to corporate auditors
The limit of the amount of remuneration paid to the Company’s corporate auditors is determined at the general
meeting of shareholders in accordance with laws and regulations.
Amount of remuneration paid to corporate auditors
Resolutions at the general meeting of shareholders as of May 27, 2020: 100 million yen or less per year

19

(TRANSLATION ONLY)(6) Outside Directors and Outside Corporate Auditors① Relationship between Major Positions Concurrently Held and the Company
Position in the
Company

Name

Position Concurrently Held

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

Details

Relationship between
the Company andCompany Where
Position Concurrently
Held

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

Outside Director(Independent)

KeikoHayashi

Outside Director(Independent)

Miki
IwamuraGoogle Japan LLC

Vice President, AsiaPacific, Japan(Marketing)－Outside Director(Independent)

SatokoSuzuki

Hitotsubashi University
Business School
School of International
Corporate Strategy

Associate Professor－

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

Waseda University
Outside Corporate
Eiko
AuditorTsujiyama(Independent)

NTT DOCOMO, INC.

T.Kunihiro & Co. Attorneys-at-Law

Outside Corporate
Auditor
Yuko Gomi(Independent)

Outside Corporate
Auditor(Independent)

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

NIPPON GAS CO., LTD.

Outside corporate
auditor

ALPS ALPINE CO., LTD.

Outside director
Audit and supervisorycommittee member－

Representative

Shiba Kaikei Jimusho－
Outside director

Passlogy Co., Ltd.

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

20

(TRANSLATION ONLY)② Major Activities during the Year

Position in the
Company

Name

Outside Director(Independent)

Keiko Hayashi

Outside Director(Independent)

Miki Iwamura

Outside Director(Independent)

Satoko Suzuki

OutsideCorporate Auditor(Independent)

Eiko Tsujiyama

OutsideCorporate Auditor(Independent)

Yuko Gomi

Outside Corporate
Auditor(Independent)

Keiko Yoshida

Major Activities
Ms. Hayashi attended all 13 board of directors’ meetings held
throughout the year during her term in office and, as a management
executive, appropriately questioned and/or remarked based on her
abundant knowledge. Ms. Hayashi is also a vice chairperson of theCompany’s Nomination and Compensation Committee.
Ms. Iwamura attended 12 of 13 board of directors’ meetings held
throughout the year during her term in office, and as an executive Vice
President of a global IT company, appropriately questioned and/or
remarked based on a wealth of her experience and knowledge. Ms.
Iwamura is also a member of the Company’s Nomination andCompensation Committee.
Ms. Suzuki attended all 11 board of directors’ meetings held
throughout the year during her term in office and, as an academic,
appropriately questioned and/or expressed opinions based on her
extensive knowledge of consumption behavior, marketing and brandmanagement. Ms. Suzuki is also a member of the Company’s
Nomination and Compensation Committee.
Ms. Tsujiyama attended all 13 board of directors’ meetings and all 17
board of corporate auditors’ meetings held during the year andappropriately questioned and/or remarked based on her deep
knowledge of accounting as an emeritus professor in this field. Ms.
Tsujiyama is also a chairperson of the Company’s Nomination andCompensation Committee.
Ms. Gomi attended all 13 board of directors’ meetings and all 17 boardof corporate auditors’ meetings held during the year and, as a lawyer,
appropriately questioned and/or remarked based on her viewpoint of
law as a lawyer and her broad knowledge. Ms. Gomi is also a memberof the Company’s Nomination and Compensation Committee.
Ms. Yoshida attended all 11 board of directors’ meetings and all 12
board of corporate auditors’ meetings held throughout the year during
her term in office and, as a certified public accountant, appropriately
questioned and/or expressed opinions based on her expertise intaxation, accounting and management. Ms. Yoshida is also a memberof the Company’s Nomination and Compensation Committee.

21

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

138 million yen
Sum of money and other property benefits to be paid by the Company and its
2)
306 million yen
subsidiaries to the independent auditor
Notes:
1. The audit agreement entered into by the independent auditor and the Company does not clearly
distinguish the amount for the audit under the Companies Act and for the audit under the Financial
Instruments and Exchange Act, and the two amounts cannot be substantially distinguished from eachother. Therefore, the amount in 1) above indicates the total for the two audits.
2. As a result of confirmation and consideration of the content of the audit plan, former audits and actual
remuneration paid in the past, and the basis for calculating remuneration estimates, etc. as well as the
progress of discussions with accounting auditors, etc. in light of the Practical Guidance on
Collaboration with Accounting Auditors issued by the Japan Audit and Supervisory Board Members
Association, the Board of Corporate Auditors gave its consent with regard to the remuneration of
accounting auditors pursuant to Article 399, Paragraph 1 of the Companies Act.
3. Ten of the important subsidiaries of Lawson overseas are subject to audit by an independent auditor
other than Lawson’s independent auditor.
(3) Details of Services Other Than Audit
The Company pays fees to Deloitte Touche Tohmatsu LLC for the “provision of information and advice
concerning the application of the new accounting standards,” which is a service other than the services prescribedin Article 2, Paragraph 1 of the Certified Public Accountants Act.
(4) Policy on Decisions Concerning Dismissal or Nonreappointment of the Independent Auditor
If the independent auditor violates or infringes the Companies Act, the Certified Public Accountant Act, orother laws or regulations, or the Company considers it necessary to do so, the board of directors shall, after
obtaining the agreement of the Board of Corporate Auditors, submit a proposal for dismissal or
nonreappointment of the independent auditor to a general meeting of shareholders. In addition, the board ofcorporate auditors can dismiss the independent auditor with a unanimous resolution if it determines that any act
or circumstance of the independent auditor falls under any items of Article 340, Paragraph 1, of the Companies
Act.

22

(TRANSLATION ONLY)
III. SYSTEMS AND POLICIES OF THE COMPANY
1. Determination of Resolution of Systems to Ensure the Propriety of Business Operations
Based on improvements and the operation of the preceding “2019 Basic Policy for Improvement of Internal
Control Systems,” which was approved at the board of directors’ meeting held on February 17, 2020, the Company
passed a resolution called the “2020 Basic Policy for Improvement of Internal Control Systems,” as indicatedbelow.
(1) Systems to Ensure Compliance of the Execution of Duties by Directors and Employees with Laws andRegulations and the Articles of Incorporation① The board of directors shall determine the improvement policies and plans for internal control systems, including thosefor compliance with laws, regulations and the like (“Compliance”), and receive status reports thereof periodically.
② The board of directors shall maintain and improve the supervising function regarding the execution of duties by the
directors by electing outside Directors on an ongoing basis.
③ The corporate auditors shall independently audit the execution of duties by the directors, including the status concerning
the improvement of the internal control systems.
④ The board of directors shall maintain and raise the awareness of officers and employees regarding compliance bythoroughly disseminating the Group Code of Conduct and the Lawson Ethical Mission Statement by such measuresas, including, but not limited to, appointing a Chief Compliance Officer, establishing a department to oversee
compliance, assigning personnel in charge of compliance at each department, streamlining the rules in relation tocompliance, and providing periodic training on ethics and awareness surveys on compliance.
⑤ The Legal Affairs Department shall be reinforced to fortify foundations for complying with legal requirements byidentifying the laws and regulations applicable to the Company’s businesses and communicating the content thereof
to the relevant departments and sections. Especially for compliance with the Act on Prohibition of Private
Monopolization and Maintenance of Fair Trade, Subcontract Act, Act Against Unjustifiable Premiums and Misleading
Representations and other consumer-related laws, the Intellectual Property Act, the Labor Standards Act, etc., theCompany shall strive to disseminate information about applicable laws and regulations to employees.
⑥ The Internal Audit Department, which is independent from the business executing bodies, shall conduct efficient andeffective audits of the status concerning the improvement of the internal control systems, and recommend
improvements thereof, as required.
⑦ The Company shall establish and upgrade normal reporting routes for reporting any violations of laws, regulations orinternal rules, and by establishing consulting and reporting point (internal contact points, a group-wide consulting
contact point and a consulting contact point for employees and business counterparties for Lawson’s franchised stores)that fully protect informants, the Company shall strive for early detection of violation or possible violation of laws,
regulations, etc. across the entire Lawson chain. If a violation of laws, regulations or internal rules is discovered, theCompany shall act promptly to rectify the situation and prevent recurrences.
⑧ The Company shall never become involved with antisocial forces or bodies that threaten the order and security of society,and shall take a firm stance on, and deal with, improper demands by consulting with lawyers the police and the like.
⑨ The Company shall rotate personnel periodically to prevent wrongdoings resulting from specific employees
monopolizing certain business processes.

(2) Systems to Preserve and Manage Information Pertaining to the Execution of Duties by Directors① The Company shall record, preserve and manage information relating to decision making at important
meetings such as those of the board of directors and the management council, and authorizing documents,
including those approved by the president and representative director, as well as financial, clerical and risk
and compliance-related information (including information contained in electromagnetic media). Moreover,
the Company shall put in place a system allowing relevant parties to inspect the above information.
② The Company shall manage and monitor its information systems in a secure manner, in addition tomaintaining the systems, by sufficiently taking into account contingencies.
③ The Company shall establish and maintain rules regarding the management of documents (including
electromagnetic recording media), keep everyone informed about the responsibility and authority for
document management, document storage periods and management methods, and periodically monitor the
status of document storage and management.
④ The Company shall establish and maintain rules regarding the protection of personal information and the
management of trade secrets, and appropriately and safely store and manage personal information andimportant trade secrets.
⑤ The Company shall establish and maintain an information security system for the Group by putting inplace a Chief Information Security Officer and a division that oversees information security with the aimof promoting information security in a consolidated and unified manner in view of both risk management
and system technology security.
⑥ The Company shall establish and maintain rules regarding the disclosure of important Company
information, and upgrade the system for disclosing information that must be disclosed according to therequirements of laws, regulations and stock exchanges, in an appropriate, timely and fair manner

23

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

(4) Systems to Ensure the Efficient Execution of Duties by Directors① The Company shall clarify the functional authority and responsibility of corporate officers and employees for decision making
and execution of business affairs. The Company shall also improve rules for the division of duties to ensure and encourage
more appropriate division of duties and collaboration among organizational bodies.
② The Company shall work to raise operational efficiency by simplifying business processes, streamlining the organization andmaking appropriate use of IT.
③ In order to promote the proper communication of information and communications between officers and employees, theCompany shall improve systems so that management guidelines and policies are disseminated to employees by corporate
officers and important field information is properly communicated by employees to corporate officers in a timely manner.
④ The Company shall seek to improve labor productivity by promoting work style reform.
(5) Systems to Ensure the Propriety of Business Operations Conducted by the Corporate Group Consisting of the Company,
Its Parent Company, and Its Subsidiaries① System for reporting to the Company on matters pertaining to the execution of duties by the subsidiary’s directors, etc., andsystem for ensuring that the subsidiary’s directors, etc., carry out their duties efficiently• The Company shall develop regulations to specify the management of subsidiaries and affiliated companies (“AssociatedCompanies”) and endeavor to maintain and enhance the Lawson brand through close collaboration with AssociatedCompanies. However, with regard to affiliated companies, the Company will work to appropriately establish and maintainsystems through phased implementation, taking into account such factors as relations with other leading shareholders
differences in laws, regulations and business customs and the like of foreign countries.
• While establishing a department that supervises the management system of Associated Companies and respecting theindependence of Associated Companies, in view of the purpose of the Company’s equity participation in AssociatedCompanies, the Company shall strengthen measures aimed at optimizing the management system of AssociatedCompanies by providing consultation and advice as required and establishing a reporting system from AssociatedCompanies.
② Regulations and other systems for risk management by the subsidiary, and system for ensuring that the subsidiary’s directors,
etc., and employees execute their duties in conformity with laws, ordinances, and the articles of incorporation• While respecting the independence of Associated Companies, in view of the purpose of the Company’s equity participationin Associated Companies, the Company shall strive to ensure that the Group Code of Conduct is widely disseminatedamong Associated Companies.
• By establishing an organization in charge of Associated Companies (responsible department, department in charge) as well
as a specialized department to support Associated Companies from a specialist perspective, the Company shall strive toensure the appropriateness of the operations of Associated Companies.
• The Company shall appoint designated persons at major Associated Companies to be responsible for promoting
compliance and risk management and promote communications between the Company and major subsidiaries with a viewto ensuring appropriate business operations across the entire Group.
• The Company shall develop a system in which immediate reporting is made by compliance managers of associatedcompanies in the event that they have identified any facts that may cause material damage to their companies.
• The Internal Audit Department shall cooperate in auditing the status of establishment of internal control systems at

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

24

(TRANSLATION ONLY)(6) Necessary Systems to Ensure Proper Financial Reporting by the Company and Its Group of Companies① The Company shall enhance systems for preparing financial statements according to laws, regulations, and accounting
standards and disclosing the same after they have been discussed, examined, and confirmed in accordance with regulations
governing information disclosure in order to report financial information in a proper and timely manner.
② The Company shall establish a dedicated internal organization in order to properly implement the internal control reporting
system required by the Financial Instruments and Exchange Act as an internal control for financial reporting. Furthermore,
the Company shall establish a system for self-evaluation and third-party evaluation and improvement through theidentification and recording of business processes at important business bases and the status of Company-wide internal
controls. The results of these evaluations of, and improvements at, the Company and important subsidiaries shall be regularly
reported to the board of directors.
(7) Matters Concerning Employees Where a Corporate Auditor Requests Employees to Assist with Duties① The Company shall assign appropriate personnel to the auditors’ office (“Corporate Auditors’ Staff”) as employees exclusively
to assist corporate auditors in the execution of their duties.
② Corporate Auditors’ Staff may serve concurrently as corporate auditors of Associated Companies.
③ Corporate Auditors’ Staff shall have the authority to conduct investigations necessary for audits by corporate auditors
following the instructions of corporate auditors.
(8) Independence of Employees from Directors in the Preceding Item
Performance reviews of Corporate Auditors’ Staff shall be conducted by the standing corporate auditors to ensure that Corporate
Auditors’ Staff carry out their duties appropriately. Personnel changes require the prior consent of the standing corporate auditors.
(9) Systems for Directors and Employees to Report to Corporate Auditors and Other Reporting Systems to the Corporate
Auditors① Directors and employees of the Company shall report important corporate management and business administration matters, aswell as the status and results of the execution of their duties, to corporate auditors so that the corporate auditors can carry out
their duties effectively. Such important matters include compliance- and risk-related issues and other matters relating tointernal control.
② If directors become aware of any fact or event that will likely cause the Company to suffer significant damage or loss, theyshall immediately inform the board of corporate auditors.
③ Reports to corporate auditors shall basically be made in good faith without fail, and shall be made promptly, if required, in
addition to periodic reports.
④ The Company shall develop a system in which the contents of consultations sought or reports made to the Independent
Whistleblower Hotline across the Group are reported to corporate auditors on a timely basis.
⑤ No person shall be subject to disadvantageous treatment by reason of having made a report to Corporate Auditors.
(10) Other Systems to Ensure Effective Audits by Corporate Auditors① The representative directors and corporate auditors shall have regular meetings to enhance smooth communications with eachother.
② Directors shall cooperate with the corporate auditors with regards to communications, the collection and exchange of
information and so on between the corporate auditors and the corporate directors and the like of Associated Companies so thatthe corporate auditors can perform their duties appropriately.
③ Directors shall also cooperate in conducting surveys of significant business partners, which the corporate auditors deem
necessary.
④ Directors shall enable the corporate auditors to collaborate with outside experts such as lawyers and certified public
accountants, if any corporate auditor deems it necessary in executing his/her duties.
⑤ The Legal Affairs, Risk Management, Internal Audit, and Finance and Accounting departments of the Company shall assist in
conducting necessary surveys for audits when requested by any corporate auditor.
⑥ Expenses etc. incurred by Corporate Auditors in the performance of their duties shall be promptly reimbursed, except in cases
where the Company has proven that they were unnecessary for said performance of duties.
2. Outline of Operational Status of Systems to Ensure the Propriety of Business Operations
The Company operates internal control systems in accordance with the aforementioned basic policy. Their operational status is as
outlined below.
(1) Compliance and Risk Management Systems① The Company strives to be a good corporate citizen able to act according to high ethical standards and with integrity andthoughtfulness by implementing the PDCA (Plan-Do-Check-Action) cycle while integrating its code of conduct, educationand training, communication function and monitoring activities in an organic manner.
② The Company has streamlined the Lawson Ethical Mission Statement. Along with that, The Company has established The
Group Code of Conduct as its code of conduct, published them in the “Lawson Group C&R Handbook,” and distributed

25

(TRANSLATION ONLY)
the handbook to all employees in an effort to thoroughly disseminate its content with the aim of ensuring the propriety ofbusiness operations across the Group.
③ In order to promote compliance and establish and promote the risk management system, the CR Executive Officer is appointed
as an executive officer, and the position of Compliance & Risk Management Officer (CRO) is established for each head office
and region. CROs monitor the progress of such measures and formulate, disseminate and implement compliance measures andrisk management measures of their own departments as leaders promoting such measures, in an effort to create a corporate
culture that emphasizes compliance with social norms and prevents the occurrence of risk events.
④ On the educational/training front, the Company aims to further improve ethical awareness and the ability to withstand crises
by conducting compliance and risk management training for all employees every year. In addition, the Company has
established an educational system to enable systematic learning by providing training upon joining the Group and upon
promotion to a managerial position, and training by job types and training conducted by external lecturers for company
management. The Company is seeking measures to ensure that employees of various job positions and job types will be able
to share problems to improve their operations by maintaining these educational/training programs while revising their content
in line with changing risk conditions.
⑤ With respect to whistleblowing reports, the Company has established a consultation contact point exclusively for sexual
harassment and power harassment, which is offered by the Human Resources Department, as well as an internal consultation
and reporting contact point for compliance and risk management matters. In addition, there is the Group Independent
Whistleblower Hotline to a law firm and other external organizations as well as an anonymous consultation contact point for
employees of the Company’s business counterparties and store staff and a consultation contact point for FC store owners. The
Company shall seek to strengthen self-rectification within the organization by treating instances of whistleblowing
appropriately, reviewing the system to prevent recurrence, and introducing specific cases at meetings and through training
programs and internal notifications.
⑥The Company has established the Legal Affairs Department that oversees compliance matters and the Risk Management
Department that oversees risk management matters under the leadership of the CR Executive Officer. The two departments
work in collaboration and act as the secretariat of the cross-organizational Compliance & Risk Management Committee
Meeting and manage the progress of measures by each department, and thus promote an effective compliance and risk
management system. In addition, by working closely with the IT Department, the Risk Management Department acts as thesecretariat of the Information Security Committee Meeting and further enhances measures to manage information security
risks. Meanwhile, five subcommittees (Food Safety and Hygiene Management Subcommittee, BC Subcommittee, Regional
Office Crime Prevention and Disaster Defense Subcommittee, Intellectual Property and Premiums and Representations
Subcommittee, and Overseas Business-Related Compliance Subcommittee) have been separately established under theCompliance & Risk Management Committee Meeting in an effort to manage the progress of key measures and prevent risks.
⑦ In terms of monitoring activities, the Company continuously conducts awareness surveys targeting all employees andquestionnaire surveys targeting the Company’s business partners with regard to matters such as product delivery and store
construction, and thus reviews and improves its compliance system from a broad perspective. In addition, the Company provides
thorough guidance and improvement proposals based on the results of audits conducted by the Internal Audit Department.
⑧ At major Associated Companies, officers in charge of compliance and risk management (Affiliated Company Compliance
Officers) are also appointed and these officers attend the Affiliated Company Compliance Officers Meeting. AffiliatedCompany Compliance Officers strive to enhance awareness among employees by formulating the code of ethics and providing
training while conducting employee awareness surveys and questionnaire surveys for business counterparts in collaboration
with the Company. In addition, through the operational audits conducted on Associated Companies by the Company’s Internal
Audit Department and the liaison meetings for the Group’s corporate auditors organized by the Company’s corporate auditors,
etc., support have been offered to improve the compliance and risk management systems of the Group.
⑨ The Human Resources Department manages job rotation in accordance with the list of individual employees to prevent
misconduct by eliminating the personalization of specific jobs and continues to operate the rotation plan based on the rules byconducting dialogue with each department at the time of periodical rotation. By clarifying the areas in which individual
employees should be trained and implementing rotation plans, we aim to develop human resources who can take charge of
Lawson’s growth and appropriate business management.
(2) Preparations against and Responses to Risks① The Company places particular emphasis on “food safety and hygiene management,” information security” and “disaster
relief,” and it has prepared a structure for responding to emergencies and resolving problems rapidly. In normal times, theCompliance & Risk management meetings and five sub-committees are organized to assess risks and formulate and promoterisk prevention measures with the aim of preventing the occurrence of risk events. In the event of significant risk events,
the Emergency Risk Management Committee is convened in an effort to swiftly solve issues and minimize damage. Once theproblems have been resolved, the Company analyzes the factors contributing to their occurrence and reviews and improves
the relevant countermeasures to prevent any recurrence.
② With regard to the food safety and hygiene management system, we strictly enforce food safety and hygiene management in
the process of developing, manufacturing and selling original products. We use raw materials that have passed examination
based on our voluntary standards, and after the examination of product specifications, we take samples from the production
line to confirm their safety. At our original product manufacturing plants, we have adopted a factory management method
based on the HACCP concept, and we have established a system to record each priority management item, such as cooking

26

(TRANSLATION ONLY)
time and product temperature, and to immediately investigate the cause of any problems and take measures when they occur.
Product information (thermal label) is displayed in compliance with laws and regulations, and the Quality Control Department
and a third-party organization check the content of the labeling. In order to ensure thorough hygiene management at our stores,
voluntary inspections at our stores and hygiene inspections by the headquarters are conducted every month, and surpriseinspections are conducted by external organizations.
③ With regard to the information security system, the “Lawson Group Privacy Policy” has been formulated to promote protectionof personal information. To ensure that the relevant personnel understand the specific details of the contents and are preparedto implement them, the Company produces and publishes various manuals illustrating potential mistakes and complaints that
may arise at the stores, accompanied by practical responses to them, for stores in an effort to raise awareness. Based on the
Information Security Guidebook that compiles matters to be observed, headquarters employees are tested periodically toensure that they are all complying with the information security rules. The Company also conducts training to respond totargeted email attacks.
In handling the personal information of customers, a system has been established to specify collection and retention methods,
retention period, administration manager, etc. particularly with respect to each measure and go through the check by aspecialized unit prior to execution. When consigning affairs for storing personal information to outside organizations, we
require that a detailed investigation of the organization’s security framework be conducted in advance and that consignmentof the responsibility be made only to organizations that satisfy the Company’s conditions. Additionally, an onsite or
documented inspection is conducted annually to ensure that the conditions are maintained.
In term of information security management at stores, we request FC store owners to provide their store staff with education
on SNS while disseminating educational videos on SNS to store computers to raise awareness.
Moreover, the Company carries out checks from various angles to ensure that there are no gaps in the information security
system, including evaluation of the vulnerability of information systems, information security audits by the Internal Audit
Department and office security audits by a specialized company.
④ We are reinforcing our emergency response capabilities through efforts such as formulating the Business Continuity Plan
(BCP) and implementing disaster mitigation measures. Our aim is to institute a business continuity (BC) framework thatprevents interruption of important business activities, even in the case of significant damage due to a large-scale disaster, etc.
The Company believes that interruption of important business activities shall be avoided, while maintaining a priority on
securing people’s safety and wellbeing. Even if business operations are unavoidably interrupted, critical functions shall beresumed quickly and life infrastructure functions of convenience stores shall be maintained in order to avoid undermining
customer satisfaction or our corporate value. In order to achieve such objective, practical procedures are compiled in theBusiness Continuity Plan (BCP), and we are pursuing efforts to establish a BC framework in line with the BCP, and to sustain
and enhance it, as an important issue for management. In an effort to enhance its ability to respond to crises across the Group,
the Company has been constantly reviewing and improving both “hard” aspects such as office buildings and lifelines and “soft”
aspects such as the BCP and manuals as well as the skills of employees and franchisees.
The Company has formulated the “Disaster Relief Manual” based on the disaster relief policy, defining its approach towarddisaster relief and the standard of conduct of the organization and its employees in the event of a disaster.
When large-scale disasters occur, our first priority is to confirm the safety of the Company’s employees and our FC owners
and crews. The Company conducts Companywide disaster prevention drills three times a year in which participants acquire
experience in implementing a variety of measures, including responding by telephone, email and disaster message dialing andapplying the safety check system. This prepares every individual to respond smoothly should emergencies arise. Manuals
elucidating the requisite disaster preparedness and responses are distributed to the stores. When large-scale disasters occur,
disaster relief headquarters are set up immediately in three locations in the affected area: headquarters, regional offices andlocal sites. The Company takes advantage of a Disaster Information Map System designed to enable personnel to confirm thedisaster situation in real-time and implement support measures for shops, factories and delivery centers, so that stores in thedisaster area can be reopened for business at an early timing.
In addition, the Company has been working to conclude agreements on the procurement of goods and support for stranded
commuters during a large-scale disaster event with the aim of engaging in mutual cooperation with municipal governments
in disaster stricken areas and fulfilling a lifeline function. We were named a designated public institution assigned by thePrime Minister pursuant to the Basic Act on Disaster Control Measures. To fulfill the lifeline functions expected of it as adesignated public institution by maintaining store operations and providing emergency relief supplies to disaster-hit areas, theCompany ordinarily prepares/revises disaster-prevention business plans, conducts disaster-prevention drills, stockpiles
supplies/materials, and pursues other disaster-prevention approaches, implementing its disaster-response measures whendisasters actually occur.
(3) System to Ensure the Propriety of Business Operations Conducted by the Corporate Group① Through a system that has been established for the reporting of any risks that occur at an associated company to the Company,
information on risk cases at the Company or its associated companies is appropriately reported to the parent company on atimely basis.
② By establishing an organization in charge of Associated Companies as well as a specialized department to support AssociatedCompanies from a specialist perspective, the Company shall strive to ensure the appropriateness of the operations of
Associated Companies.

27

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

28

(TRANSLATION ONLY)

Consolidated Balance Sheet(Millions of yen)
AssetsLiabilities
As of February
29, 2020(for reference)

As ofFebruary 28,
2021

636,697
343,587

690,811402,584

Current liabilities
Accounts payable-trade561,963
129,397

767,754
127,486

47,366

46,385

Short-term loans payable

39,85042,32017,876

16,621

20,985
159,12247,802(42)721,035
392,938
201,526
20,093
8,913
146,235

20,657161,062
43,519(20)
674,618
367,640
191,977
19,044
8,468
131,779

1,825

1,818

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

14,34397,06345,151
42,381
8,849
680
231,033
28,66542,488107,193

14,551
86,40639,08838,215
8,349
752
220,571
27,624
40,621103,030

Deferred tax assets

34,37833,484

Other

18,93816,474

Allowance for doubtful accounts

(630)

(663)

Account item
Current assets
Cash and deposits
Accounts receivable-due from
franchised stores
Lease receivables
Merchandise
Accounts receivable-other
Other
Allowance for doubtful accounts
Non-current assets
Property and store equipment
Buildings and structures
Tools, furniture and fixtures
Land
Leased assets
Leased assets
Construction in progress

Total assets

1,357,732

1,365,430

29

Account item

As of February
As of29, 2020
February 28,(for reference)
2021

Current portion of long-term－loans payable
Lease obligations
45,610Accounts payable-other
94,848
Income taxes payable
7,915
Deposits received
193,096
Provision for bonuses
4,667
Other
46,577
Non-current liabilities
520,421Long-term loans payable
310,000
Lease obligations
136,665
521
Deferred tax liabilities
Provision for retirement
benefits to executive officers
282
and audits and supervisoryboard members
Net defined benefit liability
16,245
Asset retirement obligations
35,335
Other
21,370Total liabilities
1,082,385
Net assets
Shareholders’ equity
267,181
Capital stock
58,506
Capital surplus
44,605Retained earnings
165,081
Treasury shares(1,011)
Accumulated other
3,695
comprehensive income
Valuation difference on
1,496
available-for-sale securities
Revaluation reserve for land
(207)
Foreign currency translation
3,341
adjustment
Remeasurements of defined(934)
benefit plans
Subscription rights to shares
255
4,214
Non-controlling interests
Total net assets
275,347
Total liabilities and net assets 1,357,732

100,000
44,58490,798
4,078
246,110
4,818
107,557
324,743
130,000
121,491
485
277
16,27835,694
20,516
1,092,498
262,50858,50646,494
158,498
(991)
5,123
1,782
(207)
3,684
(134)
333
4,965
272,931
1,365,430

(TRANSLATION ONLY)

Consolidated Statement of Income(Millions of yen)
From March 1, 2019 toFebruary 29, 2020
(for reference)

From March 1, 2020 toFebruary 28, 2021

Income from franchised stores

314,260

288,460

Other operating revenue

113,132

427,393

101,576

390,056(302,843)

302,843(275,945)

275,945(205,746)

730,236
205,746(188,441)

666,001
188,441

Account item
Operating revenue

Net sales
Net sales
Gross operating revenue
Cost of sales(97,097)

Gross profit
Operating gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using
equity method
Compensation income
Employment adjustment subsidy due to novel
coronavirus disease(87,503)524,490

477,559

461,547
62,943436,682
40,876

651

729

70

403

571

332

680

490

―

793

Other
Non-operating expenses

1,719

3,692

Interest expenses

4,006

3,678

Loss on cancellation of leases

3,675

2,065

Expense due to system failure
Other

632
1,974

828
1,238

10,2891,794

56,346

Ordinary income
Extraordinary income
164

Gain on sales of investment securities

164

4,544

7,810
37,610

6,232

6,232

Extraordinary losses
Loss on retirement of non-current assets

6,120

3,213

Impairment loss
Loss on novel coronavirus disease18,722―
1,348

16,635
3,607

Other

26,191

2,158

30,319Profit before income taxes
Income taxes-current

12,814(2,563)

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

30

25,613
18,230

9,197
10,25020,068

378

9,576
8,653

(39)

(36)

20,1088,689

(TRANSLATION ONLY)

Consolidated Statement of Changes in Equity(From March 1, 2020 to February 28, 2021)
Shareholders’ equity

Balance at beginning of current
period(Millions of yen)

Accumulated other comprehensive income

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equityValuationdifference on
available-forsale securities

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans

Total
accumulated
othercomprehensive
incomeSubscription
rights toshares

Noncontrollinginterests

Total net
assets58,50644,605

165,081(1,011)

267,181

1,496

(207)

3,341

(934)

3,695

255

4,214

275,347

Changes of items during period
Decrease by merger(262)

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

(262)

(262)

1,886

1,886

(15,009)(15,009)(15,009)

8,689

8,689

8,689

(1)

(1)

(1)

1,886

Profit attributable to ownersof parent
Purchase of treasury shares
Disposal of treasury shares

0

0

0

0

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

3

21

24

24

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

285

343

799

1,428

78

751

2,257

－

1,889

(6,582)

20(4,672)

285

－

343

799

1,428

78

751

(2,415)58,50646,494

158,498(991)

262,508

1,782

(207)

3,684

(134)

5,123

333

4,965

272,93131

(TRANSLATION ONLY)(Notes to Consolidated Financial Statements)(Accounting Policies for the Preparation of Consolidated Financial Statements)
1. Scope of consolidation(1) Number of consolidated subsidiaries: 20(Domestic)
Lawson Entertainment, Inc.
BestPractice, Inc.
SCI, Inc.
Lawson Store100, Inc.
Lawson HMV Entertainment United Cinemas Holdings, Inc.
United Entertainment Holdings Co., Ltd.
United Cinemas Co., Ltd.
SEIJO ISHII CO., LTD.
Lawson Bank, Inc.
Lawson urbanworks, Inc.
(Foreign)

Chongqing Lawson, Inc.
Shanghai Lawson, Inc.
Dalian Lawson, Inc.
Lawson (China) Holdings, Inc.
Saha Lawson Co., Ltd.
Shanghai Le Song Trading Co., Ltd.
Shang Hai Gong Hui Trading Co., Ltd.
Zhejiang Lawson, Inc.
Beijing Lawson, Inc.
BEIJING LUOSONG Co., Ltd.
Lawson Sanin, Inc. was excluded from the scope of consolidation, because it was dissolved after merging
with Lawson, Inc. on March 1, 2020.
(2) Names of nonconsolidated subsidiaries and others(Domestic)
LAWSONWILL, Inc.
Seikaken, Inc.
SEIJO ISHII SYUHAN CO., LTD.
TOKYO EUROPE TRADE CO., LTD.
LT CO., LTD.
Lawson Digital Innovation Inc.
(Foreign)

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

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

32

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

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

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

33

(TRANSLATION ONLY)③ Leased assets:

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

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

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

(8) Adoption of consolidated taxation system
The Company and certain consolidated subsidiaries in Japan adopt the consolidated taxation system.

(9) Application of tax effect accounting for transition from consolidated taxation system to group tax
sharing system
The Company and certain domestic consolidated subsidiaries have calculated the amounts of deferred tax
assets and deferred tax liabilities in accordance with tax laws in effect before amendment based on thetreatment of Paragraph 3 of “Practical Solution on the Treatment of Tax Effect Accounting for theTransition from the Consolidated Taxation System to the Group Tax Sharing System” (ASBJ Practical

34

(TRANSLATION ONLY)
Issues Task Force No.39, March 31, 2020) instead of applying the provision in Paragraph 44 of“Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No.28, February 16, 2018),
regarding the transition to group tax sharing system established in “Act for Partial Amendment of the
Income Tax Act, etc.” (Act No.8 of 2020), and items for which the non-consolidated taxation system has
been reviewed in the line with the transition to the group tax sharing system.
(Changes in Presentation)
In the “Non-operating income” section, “Dividend income” (70 million yen for the previous fiscal year)
which was included in “Other” in the Consolidated Statement of Income in prior periods is now separately
presented as “Dividend income” (403 million yen for the current fiscal year) from the current fiscal year due
to enhance the clarity of the consolidated financial statements.
In the “Non-operating income” section, “Penalty income” (219 million yen for the current fiscal year)
which was separately presented in the Consolidated Statement of Income in prior periods is now included in“Other” from the current fiscal year due to a decline in financial materiality.
In the “Non-operating expenses” section, “Expense due to system failure” (632 million yen for theprevious fiscal year) which was included in “Other” in the Consolidated Statement of Income in prior periods
is now separately presented as “Expense due to system failure” (828 million yen for the current fiscal year)
from the current fiscal year due to enhance the clarity of the consolidated financial statements.
In the “Extraordinary losses” section, “Loss on sales of non-current assets” (295 million yen for the current
fiscal year) which was separately presented in the Consolidated Statement of Income in prior periods is now
included in “Other” from the current fiscal year due to a decline in financial materiality.
(Supplementary Information)(Accounting estimates regarding the impact of the spread of the novel coronavirus)
Due to the spread of novel coronavirus (COVID-19), changes have been observed in the sales of some storesof the Lawson Group as well as in trends of customer visits. In making accounting estimates for impairment of
fixed assets, the Group assumes that sales at most stores will recover during the fiscal year ending February2022, but that certain effects will remain at some stores even after the fiscal year ending February 2023.
However, there are many uncertainties in the aforementioned assumptions, and any change in the timing
when the spread of COVID-19 settles down and its impact on the economic environment could affect theGroup's financial position, operating results and cash flows in the future.
(Notes to Consolidated Balance Sheet)
1. Accumulated depreciation of property and store equipment:

385,891 million yen

2. Revaluation of land used for businessLand used for business was revalued on the basis prescribed by the Law Concerning Revaluation of Land
(Law No. 34, March 31, 1998). The resulting revaluation difference has been included in net assets as“Revaluation reserve for land.”
Revaluation method: The value of land is determined based on the notified prices adjusted reasonably as
stipulated in Article 2, Item 4 of the Ordinance Implementing the Law Concerning
Revaluation of Land (Government Ordinance No. 119, March 31, 1998) and theassessed value as stipulated in Article 2, Item 5 of the same ordinance.
Date of revaluation: February 28, 2002
The difference between book value and market value of the revalued land as of the consolidated balance
sheet date was 53 million yen.
3. Guarantee obligations
The Company guarantees the borrowings from financial institutions of the following subsidiary.
Lawson Philippines, Inc.
110 million yen

35

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

StoresImpairment loss
(millions of yen)

Location

AssetsTokyo

Buildings; Tools, furniture and fixtures; and others

2,626

Osaka

"

1,264

Others"

11,845

―

Land

76

―

Software

821

―

―

16,635

Other

Total

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

9,603
563
76
5,500
821
70

million yen
"
"
"
"
"

The recoverable amount of the asset groups is the higher of net selling price or value in use. The net selling
price of land was calculated based on the value appraised by a real estate appraiser or contract price, and thevalue in use was calculated by discounting estimated future cash flows mainly using a discount rate of 3.0%.

36

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

Number of sharesat the end of theperiod(thousand shares)

Outstanding shares
100,300

Common stock－－

100,300

Treasury shares
237
0
5
232
Common stock
Notes:
1. The increase in treasury shares of 0 thousand shares resulted from purchases of stock of less than one
share unit.
2. The decrease in treasury shares of 5 thousand shares resulted from decreases of 5 thousand shares dueto the exercise of stock option rights and 0 thousand shares due to requests for additional purchases ofstock of less than one share unit.

2. Dividend(1) Dividend payment
Date of resolution

Class ofsharesDividend payment(millions of yen)

Dividend
per share(yen)

Record date

Effective date

General meeting ofshareholders(May 27, 2020)

Common
stock

7,504

75.00

February 29, 2020

May 28, 2020

Directors’ meeting(October 8, 2020)

Common
stock

7,505

75.00

August 31, 2020

November 10,
2020(2) Dividends for which the record date is in the current period and the effective date is after the
year-end consolidated balance sheet date
Dividend
Dividend
Class of
Source ofRecordEffective
payment
per share
Date of resolution
sharesdividenddate
date(millions of yen)
(yen)
General meeting ofCommon RetainedMay
Februaryshareholders
7,505
75.00
stock
earnings
28, 2021
26, 2021(May 25, 2021)
3. Number of stock that can be exercised by outstanding subscription rights to shares (excluding those
not yet in the exercisable period)
75,000 shares

37

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

38

(TRANSLATION ONLY)
2. Matters relating to the fair values of financial instruments
The carrying amount, fair values, and difference as of February 28, 2021 are as follows. (Financial instruments whose fair value
cannot be reliably determined are not included as described in “(Note 2) Financial instruments whose fair values cannot be reliably
determined.”)(Millions of yen)

(1) Cash and deposits(2) Accounts receivable-due from franchised stores(3) Lease receivables(4) Accounts receivable-other
Allowance for doubtful accounts (*1)

Carrying
amount402,584(1) Accounts payable-trade(2) Short-term loans payable

46,385
15,725

161,047－

12,734

12,734－

46,477(78)
46,398103,030(511)
102,519788,292
127,486

43,011(3,387)

100,857
782,347
127,486(1,662)(5,945)42,32090,79842,32090,798－－

246,110

246,110230,000
171,932

230,002
167,141－2(4,791)(3) Accounts payable-other(4) Deposits received(5) Long-term loans payable (*3)(6) Lease obligations (*3.4)

402,584

46,385
16,621
161,062(14)
161,047(6) Long-term loans receivable
Allowance for doubtful accounts (*1.4)

Total assets

Difference
－
－
(895)

(5) Short-term and long-term investment securities
Available-for-sale securities (*2)(7) Guarantee deposits
Allowance for doubtful accounts (*1)

Fair value－

Total liabilities
908,648
903,859(4,789)(*1) Allowance for doubtful accounts related to accounts receivable-other, long-term loans receivable and guarantee deposits
have been deducted.
(*2) Short-term and long-term investment securities and available-for-sale securities include shares of listed affiliates notaccounted for by the equity method, and the difference in value is based on the market value of such shares.
(*3) Long-term loans payable and lease obligations include liabilities maturing within one year.
(*4) As long-term loans receivable and lease obligations satisfy the offsetting requirements, long-term loans receivable areoffset against lease obligations and the net amount is shown in the consolidated balance sheets. The offset amount is 5,856
million yen.
(Note 1) Method of calculating the fair values of financial instruments
Assets(1) Cash and deposits and (2)Accounts receivable-due from franchised stores and (4) Accounts receivable-other
These instruments are stated at their carrying values, because they are short-term and their carrying values areapproximately the same as their fair values.
(3) Lease receivables
The fair values of lease receivables are calculated by discounting future cash flows using the yield rate of government
bonds for the remaining period.
(5) Short-term and long-term investment securities
The fair values of investment securities are stated at the quoted market price on the stock exchange for the equity
instruments.
(6) Long-term loans receivable
The fair values of long-term loans receivable are determined based on the present value, derived by discounting the total
amount of principal and interest at the expected rate of interest to be applied for similar loans.
(7) Guarantee deposits
Guarantee deposits are determined by discounting future cash flows, which reflect the collectability, using the yield rate ofgovernment bonds over the remaining period.

39

(TRANSLATION ONLY)
Liabilities(1) Accounts payable-trade, (3) Accounts payable-other and (4) Deposits received
These instruments are stated at their carrying values, because they are short-term and their carrying values areapproximately the same as their fair values.
(2) Short-term loans payable
These instruments are stated at their carrying values, because they are determined using floating interest rates that reflectmarket rates in a short-time and their carrying values are approximately the same as their fair values.
(5) Long-term loans payable (including current portion of long-term loans payable)
The fair values of long-term loans payable with fixed interest rates are calculated based on the present value of the total
amount of principal and interest discounted at the expected interest rate for similar borrowings. The fair values of long-termloans payable with floating interest rates are stated at their carrying values, because they are determined using floating interest
rates that reflect market rates in a short-time and their carrying values are approximately the same as their fair values.
(6) Lease obligations (including current portion of lease obligations)
The fair values of lease obligations are determined by discounting the cash flows related to the obligations at the expected
rate of interest to be applied for similar lease transactions.
(Note 2) Financial instruments whose fair values cannot be reliably determined
Category

Carrying amount (millions of yen)
178

Unlisted equity securities

18,532

Investments in subsidiaries and affiliated companies

1,179
Other
Because financial instruments listed above do not have market prices and their fair values cannot be reliably determined,
they are not included in “(5) Short-term and long-term investment securities.”(Notes to Per-Share Data)
1. Net assets per share
2. Profit per share

2,674.53 yen
86.84 yen

(Notes to Significant Subsequent Events)
Not applicable.

40

(TRANSLATION ONLY)

Non-consolidated Balance Sheet(Millions of yen)
AssetsLiabilities
As of February
29, 2020(for reference)

As ofFebruary
28,2021

199,530
22,218209,085
38,02245,99746,05725,125

16,621

1,276
17,29379,0938,534(8)659,239
332,337
157,103
29,06912,1828,860

1,062
17,897
79,4689,954―
630,340
316,157
154,345
27,486
10,182
8,422

123,520

114,673

1,601

1,047

Intangible assets
Software
Goodwill
Other
Investments and other assets
Investment securities
Shares of subsidiaries andassociates
Investments in capital ofsubsidiaries and associates
Long-term loans receivable
Long-term loans receivable fromsubsidiaries and associates

42,62928,772
13,387469
284,272
9,897

36,151
24,106
11,475568
278,031
8,367

67,52964,65823,822

29,832

41,741

39,966555

494

Long-term prepaid expenses
Guarantee deposits

15,50793,307

Deferred tax assets

31,315

Other

1,224

Allowance for doubtful accounts(630)

Account item
Current assets
Cash and deposits
Accounts receivable-due from
franchised stores
Lease receivables
Merchandise
Prepaid expenses
Accounts receivable-other
Other
Allowance for doubtful accounts
Non-current assets
Property and store equipment
Buildings
Structures
Tools, furniture and fixtures
Land
Leased assets
Construction in progress

Total assets

858,770

As of February
29, 2020(for reference)

As ofFebruary28, 2021

Current liabilities
Accounts payable-trade392,206
113,119384,184
106,756

Short-term loans payable

38,00038,070Account item

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

40,85035,05036,18528,678
5,860
2,294
115,864
3,142
8,211
232,858
50,000118,104
12,56635,564
21,581
1,985
2,371
132,989
2,942
6,873
220,264
50,000105,735
13,553226

200

Asset retirement obligations

31,53731,803

Other
Total liabilities

20,423625,065

18,971
604,449

232,160
58,50647,757233,069
58,50647,760Legal capital surplus

47,696

47,696

Other capital surplus

60

64

126,908

127,793727

727

50,00050,00076,18077,065(1,011)

(991)

1,288

1,574

1,496

1,782

(207)
255
233,705
858,770(207)
333
234,977
839,426

Net assets
Shareholders’ equity
Capital stock
Capital surplus

Retained earnings
Legal retained earnings

Other retained earnings
General reserve
Retained earnings brought
32,344
forwardTreasury shares
531
Valuation and translation(653)
adjustments
Valuation difference on
available-for-sale securities
Revaluation reserve for land
Subscription rights to shares
Total net assets
839,426
Total liabilities and net assets
13,57588,91441

(TRANSLATION ONLY)

Non-consolidated Statement of Income(Millions of yen)
From March 1, 2019 toFebruary 29, 2020
(for reference)

Account item

From March 1, 2020 toFebruary 28, 2021

Operating revenue
305,631

Income from franchised stores

285,847

Other operating revenue
Net sales

37,499343,13135,803

321,650

Net sales
Gross operating revenue(47,680)

47,680390,811(33,175)

33,175354,825(34,426)

34,426(24,224)

24,224

Cost of sales(13,254)

Gross profit
Operating gross profit(8,950)356,385

330,600

Selling, general and administrative expenses

311,660

304,449

Operating income
Non-operating income

44,725

26,150Interest income

556

496

Dividend income
Other

6,224
2,220

11,129
2,057

9,001

13,682Non-operating expenses
Interest expenses

2,248

2,079

Loss on cancellation of leases
Expense due to system failure

3,648
632

1,838
828

Penalty
Other

139
1,094

716
669

7,764
45,962

Ordinary income
Extraordinary income
164

Gain on sales of investment securities
Gain on liquidation of subsidiaries and associates
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss－

Loss on novel coronavirus disease
Other

33,700
6,232

164

221

5,852
18,3102,592
16,213

－
1,116

656
1,408

25,27920,848

Income before income taxes
Income taxes – current

6,754

Income taxes – deferred(1,391)

42

6,454

20,871
19,283

4,255
5,362
15,486

Profit

6,132

(866)

3,388
15,894

(TRANSLATION ONLY)

Non-consolidated Statement of Changes in Equity(From March 1, 2020 to February 28, 2021)(Millions of yen)

Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings
Retained
Generalearnings
reservebrought
forwardTotal
retainedearnings

TreasurysharesTotalshareholders’equity76,180126,908(1,011)

232,160

Dividends of surplus(15,009)(15,009)(15,009)

Profit15,894

15,894

15,894

Balance at the beginning of current
periodCapital
stock

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

58,506

47,69660

47,757727

50,000Changes of items during period

Purchase of treasury shares

(1)

(1)

Disposal of treasury shares

0

0

0

0

Exercise of subscription rights toshares (Delivery of treasury shares)

3

3

21

24

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

－

－

3

3

－

－

885

885

20

908

58,506

47,69664

47,760727

50,00077,065

127,793(991)

233,069

43

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

1,496

(207)

1,288

Subscription rights toshares255

Total
net assets
233,705

Dividends of surplus(15,009)

Profit15,894Purchase of treasury shares(1)

Disposal of treasury shares

0

Exercise of subscription rights toshares (Delivery of treasury
shares)24

Net changes of items other thanshareholders' equity

285

Total changes of items during
period285

Balance at end of current period

1,782

285

78

363

－

285

78

1,271

(207)

1,574

333

234,977

44

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

2. Depreciation method of depreciable assets(1) Property and store equipment (except for leased assets):
Computed by the straight-line method.
The ranges of useful lives are from 10 to 34 years for buildings and structures and from 5 to 8
years for tools, furniture and fixtures.
(2) Intangible assets (except for leased assets):
Computed by the straight-line method.
Costs of software for internal use are amortized by the straight-line method over 5 years, which isthe estimated useful life.
(3) Leased assets:
Leased assets related to finance leases that do not transfer ownership of leased property
The Company applies the straight-line method using the lease term as the useful life and a residual
value of zero.
(4) Long-term prepaid expenses:
Computed by the straight-line method.

3. Accounting standard for significant reserves(1) Allowance for doubtful accounts:
Allowance for doubtful accounts is provided at the amount of possible losses from uncollectible
receivables based on the actual rate of losses from bad debt for ordinary receivables and on estimatedrecoverability for specific doubtful receivables.
(2) Provision for bonuses:
Accrued employees’ bonuses are provided for payments of employees’ bonuses based on the estimatedamounts.
(3) Provision for retirement benefits:
Provision for retirement benefits is provided at the amount calculated based on the retirement benefit
liability and pension assets at the consolidated balance sheet date.
① Method of attributing the estimated amount of retirement benefits to periods
In calculating the retirement benefit obligation, the benefit formula method is used to attribute theestimated amount of retirement benefits to periods up to the end of the current fiscal year.
②Method of amortizing actuarial differences and prior service costs
Prior service costs are recorded as expense over a certain number of years within the averageremaining years of service of the corresponding employees at the time of occurrence (10 years) using
the straight-line method.
Actuarial differences are accounted for as expenses over a certain number of years within the averageremaining years of service of the corresponding employees (generally 1 year for the defined benefit
corporate pension plan and generally 10 years for the retirement lump-sum payment plan) using thestraight-line method, commencing with the consolidated fiscal year following the one in which they
were incurred.
Treatment of unrecognized actuarial and unrecognized past service costs differences in the
non-consolidated balance sheet differs from the consolidated balance sheet
45

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

4.

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

5.

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

6.

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

(Changes in Presentation)
In the “Non-operating expenses” section, “Expense due to system failure” (632 million yen for the previous
fiscal year) which was included in “Other” in the consolidated statement of income in prior periods is now
separately presented as “Expense due to system failure” (828 million yen for the current fiscal year) from thecurrent fiscal year due to enhance the clarity of the consolidated financial statements.
In the “Non-operating expenses” section, “Penalty” (139 million yen for the previous fiscal year) which was
included in “Other” in the consolidated statement of income in prior periods is now separately presented as“Penalty” (716 million yen for the current fiscal year) from the current fiscal year due to enhance the clarity of
the consolidated financial statements.
In the “Extraordinary losses” section, “Loss on sales of non-current assets” (293 million yen for the current
fiscal year) which was separately presented in the consolidated statement of income in prior periods is now
included in “Other” from the current fiscal year due to a decline in financial materiality.
(Supplementary Information)(Accounting estimates regarding the impact of the spread of the novel coronavirus)
Due to the spread of novel coronavirus (COVID-19), changes have been observed in the sales of some storesof the Company as well as in trends of customer visits. In making accounting estimates for impairment of fixed
assets, the Company assumes that sales at most stores will recover during the fiscal year ending February 2022,
but that certain effects will remain at some stores even after the fiscal year ending February 2023.
However, there are many uncertainties in the aforementioned assumptions, and any change in the timing
when the spread of COVID-19 settles down and its impact on the economic environment could affect theCompany's financial position, operating results and cash flows in the future.
(Notes to the Non-consolidated Balance Sheet)
1. Accumulated depreciation of property and store equipment:
2.

3.

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

320,318 million yen

29,186
42
6,608
338

million yen"""

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

46

(TRANSLATION ONLY)
Date of revaluation: February 28, 2002
The difference between book value and market value of the revalued land as of the non-consolidatedbalance sheet date was 53 million yen.
4.

Guarantee obligations
The Company guarantees the accounts payable-trade and deposit liabilities of the following
subsidiaries
million yen
Lawson Bank, Inc.
130,000
SCI, Inc.
Lawson Philippines, Inc.
Lawson Entertainment, Inc.

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

324
110
74

"

34,341
310
43,161
11,618million yen

"

"
"
"

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

232,954 shares(Notes to Accounting for Income Taxes)
Components of deferred tax assets and liabilities
Enterprise taxes payable
Accrued employees’ bonuses
Loss on write-down of investments in affiliated companies
Excess of depreciation
Excess of amortization of software
Provision for retirement benefits
Allowance for doubtful accounts
Impairment loss
Other
Subtotal of deferred tax assets
Less valuation allowances
Total deferred tax assets

339 million yen
900
"
8,527
"
8,164
"
388
"
"
5,858
"
200
"
14,076"
3,262
41,718 million yen(9,373)"32,344 million yen
32,344 million yen

Deferred tax assets-net

47

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

ParentCompany

Business
Company nameline orprofession

Mitsubishi
Corporation

GeneralTradingCompany

Equityownership
percentage

Directholding
50.2%

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

No

Receipt of
debt
guarantees
Payment ofguarantee
fees

Endingbalance(millionsof yen)14,070

－

－

0

－

－

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

Business
Company nameline orprofession

SCI, Inc.

Domestic
Convenience
Store Business

LawsonEntertainmentEntertainment,
RelatedInc.
Business

Equityownership
percentage

Directholding100.0%

RelationshipTransaction
EndingDescription
amountbalance
Directors’ofAccount
Business(millionsposts held transactions (millions of item
relationshipyen)of yen)concurrentl
Repayment
40,700
Shortof funds
8,900
term loans
Borrowing
SCM
39,400 payableYesof funds
0
Accrued
Borrowing
0 interest
interest

Directholding100.0%

Sale oftickets andsoftware formusic andvideo

Purchase ofgoods
Supervisionofmanagement

Yes

Subsidiary

SEIJO ISHII
CO., LTD.

Seijo Ishii
Business

Directholding100.0%

Lawson Bank,Inc.

Financial
Services
Business

Directholding
95.0%

Bankingbusiness

Yes

Yes

Repaymentof funds
Borrowingof funds
Borrowinginterest
Repaymentof funds
Borrowingof funds
Borrowinginterest

Guarantee
obligations
Receipt ofguarantee
fees

Shortterm loans
22,500 payable
Accrued
1 interest

27,50007,700

Shortterm loans
8,500 payable
Accrued
1 interest

130,000－

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

48

12,50011,7000－
3

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

Subsidiaryof the parent
company

RelationshipTransaction
EndingEquityDescription
Company Business line
amountAccount balance
Directors’
ownership Businessof
nameor profession
item(millions(millions ofpercentage relationship posts heldtransactions
yen)of yen)concurrently
PurchasesforcompanyAccounts
11,105operated
54,454payable(683,534)
storestrade(purchases
Mitsubishi
Sales offor
Shokuhin processed
VendorNo－
franchisedCo., Ltd.
foods
stores)Accounts
Shipping
payable4,347
56,685costs
otherReceipt of
Accounts
shipping
53,5194,197
receivablecosts
otherMitsubishi

Subsidiary Corporation
Financial & Contractedof the parent Management
operations
company Services(Japa－

Recipient ofloansn)Ltd.

No

Repaymentof funds
Borrowingof funds
Borrowinginterest

15,15026,2200

Short-termloanspayableAccruedinterest

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

2,344.86 yen
158.84 yen(Notes to Significant Subsequent Events)
Not applicable.

49

14,0700(TRANSLATION ONLY)INDEPENDENT AUDITOR'S REPORT
April 5, 2021
To the Board of Directors of
Lawson, Inc.:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:Kazuaki Furuuchi

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

OpinionPursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited the consolidated
financial statements, namely, the consolidated balance sheet as of February 28, 2021 of Lawson, Inc. (the"Company") and its consolidated subsidiaries, and the related consolidated statements of income and changes
in equity for the fiscal year from March 1, 2020 to February 28, 2021, and the related notes.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Lawson, Inc. and its consolidated subsidiaries as of February 28, 2021, andthe results of their operations for the year then ended in accordance with accounting principles generally
accepted in Japan.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Company in accordance with the provisions of the Code of Professional Ethics in Japan, and we havefulfilled our other ethical responsibilities as auditors. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.

Responsibility of Management and Audit & Supervisory Board Members and the Audit & Supervisory
Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial statementsthat are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
in accordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing
the Directors’ execution of duties relating to the design and operating effectiveness of the controls over theCompany’s financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Misstatements can arise from fraud or error, and are considered material if, individually
50

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

51

(TRANSLATION ONLY)INDEPENDENT AUDITOR'S REPORT
April 5, 2021
To the Board of Directors of
Lawson, Inc.:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:Kazuaki Furuuchi
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Masumi Nakagawa
Pursuant to the first item, second paragraph of Article 436 of the Companies Act, we have audited thefinancial statements, namely, the balance sheet as of February 28, 2021 of Lawson, Inc. (the "Company"), andthe related statements of income and changes in equity for the 46th fiscal year from March 1, 2020 to February
28, 2021, and the related notes and the accompanying supplemental schedules.
In our opinion, the financial statements and the accompanying supplemental schedules referred to above
present fairly, in all material respects, the financial position of Lawson, Inc. as of February 28, 2021, and theresults of its operations for the year then ended in accordance with accounting principles generally acceptedin Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Nonconsolidated Financial Statements section of our report. We are independent of the Company inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our otherethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

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

Auditor's Responsibilities for the Audit of the Nonconsolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the nonconsolidated financial statements
52

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

53

(TRANSLATION ONLY)<Copy of the Audit Report of the Board of Audit & Supervisory Board>
AUDIT REPORTWith respect to the directors’ performance of their duties during the 46th business term from March 1,
2020 to February 28, 2021, we have prepared this Audit Report, through due deliberations based on the audit
reports prepared by each Audit & Supervisory Board Member, and hereby report as follows:
１．Auditing Methods Employed by the Audit & Supervisory Board Members and Audit & Supervisory Board
and Contents of Such Methods(1) We have established audit policies and audit plans for the current term, and received the reports fromeach Audit & Supervisory Board Member regarding their execution of audits and results thereof, as
well as reports from the Directors, other relevant personnel, and the Accounting Auditor regarding theexecution of their duties, and asked for explanations as necessary.
(2) Each Audit & Supervisory Board Member, pursuant to the auditing standards of Audit & Supervisory
Board Members established by the Audit & Supervisory Board , has followed the audit policies andaudit plans for the current term, communicated with the Directors, officers, internal audit department
and other relevant employees, endeavored to collect information and develop the audit environment,
and performed the audit using the following methods:(i) We have attended the Board of Directors meetings, the management meetings, Compliance &Risk management committee meetings, Internal Control over Financial Reporting committee
meetings and the like, and other important meetings, received reports from the Directors, officers,internal audit department and other relevant employees regarding the execution of their duties,
asked for explanations whenever necessary, reviewed important approval documents and the like,and investigated the status of operations and assets at the head office, area office, and otherprincipal offices and stores. With respect to subsidiaries, we have communicated and exchanged
information with the Directors, Audit & Supervisory Board Members and other relevant
personnel of subsidiaries, requested the subsidiaries to report on their business where necessary,and investigated their status of operations and assets.
(ii) Pursuant to the audit items and audit methods regarding internal control system established by
the Audit & Supervisory Board , we have monitored and verified the resolution of the Board of
Directors regarding the development of the system as prescribed by item (vi) of paragraph 4,
Article 362 of the Companies Act and paragraph 1 and paragraph 3, Article 100 of the Ordinancefor Enforcement of the Companies Act and the status of the development and operation of thesystem based on such resolution (Internal Control System), as the system necessary to ensurethat the execution of the duties by the Directors, described in business report, complies with laws
and regulations and the Articles of Incorporation and other system necessary to ensure theproperness of operations of a Stock Company and corporate group consisting of its subsidiaries.
In connection with internal control over financial reporting, we received reports from the
Directors and other relevant personnel, and Deloitte Touche Tohmatsu LLC regarding the statusof evaluation and audit of such internal control respectively, and asked for explanations whenevernecessary.
(iii) Regarding the transaction with the parent company described in the business report, we havecarefully examined the matter noted in item (v)-(a) of Article 118 of the Ordinance for
Enforcement of the Companies Act and the judgment and its reasons in item (v)-(b) based on thestatus of deliberations of the Board of Directors and others.

54

(TRANSLATION ONLY)(iv) We have monitored and verified whether Accounting Auditor maintained its independence andproperly conducted its audit, and we received reports from Accounting Auditor regarding thestatus of the execution of its duties and, whenever necessary, asked for explanations. In addition,
we have received the notice from the Accounting Auditor that “System for ensuring proper
execution of duties” (matters set forth in each item of Article 131 of the Company Accounting
Regulations) is organized in accordance with the “Quality Control Standards for Audits”(Business Accounting Council, October 28, 2005) and the like, and, when necessary, asked for
explanations.
Based on the above methods, we have examined the “business report and the supplementary schedules
thereof,” the “consolidated financial statements (consolidated balance sheet, consolidated statement of income,consolidated statements of changes in net assets, and notes to consolidated financial statements)” and “financial
statements (balance sheet, statement of income, statements of changes in net assets, and notes to financial
statements) and supplementary schedules thereof” for this term.
1. Result of Audit(1) Result of Audit of Business Report and Other Relevant Documents(i) We have found that business report and the supplementary schedules thereof fairly present thestatus of our company, in conformity with the applicable laws and regulations and the Articles
of Incorporation.
(ii) Regarding the execution of duties by the Directors, we have found no misconduct or material
matter that violates applicable laws and regulations or the Articles of Incorporation.
(iii) We have found that the content of the resolution of the Board of Directors regarding the Internal
Control System is adequate. In addition, we have found no matters on which to give remarks inregard to the relevant description in the business report and execution of duties by the Directors
concerning Internal Control System.
(iv) Regarding the transaction with the parent company described in the business report, we havefound no matters on which to give remarks in regard to the particulars being given due
consideration so as not to harm the interests of our company in carrying out the transaction andthe judgment of the Board of Directors and its reasons related to whether or not the transaction
would harm the interests of our company.
(2) Result of Audit of Consolidated Financial Statements
We have found that methods and the result of the audit by the Accounting Auditor, Deloitte Touche
Tohmatsu LLC, are adequate.
(3) Result of Audit of Financial Statements and Supplementary Schedules thereof.
We have found that methods and the result of the audit by the Accounting Auditor, Deloitte Touche
Tohmatsu LLC, are adequate.
April 7, 2021
The Audit & Supervisory Board of Lawson, Inc.
Audit & Supervisory Board Member
Masakatsu Gonai(full-time)
Audit & Supervisory Board Member
Shuichi Imagawa(full-time)
Outside Audit & Supervisory Board Member
Eiko Tsujiyama
Outside Audit & Supervisory Board Member
Yuko Gomi
Outside Audit & Supervisory Board Member
Keiko Yoshida
55

(TRANSLATION ONLY)REFERENCE DOCUMENT FOR THE GENERAL MEETING OF SHAREHOLDERS
Proposals and References
Proposal No. 1: Appropriation of Surplus
The Company regards the ROE (consolidated return on equity) as a significant management indicator and has been
conducting business activities. In addition, the Company’s policy for dividend payment is to set the target for
consolidated dividend payment ratio at 50%, with the stable minimum annual amount of ¥150 per share, while
securing internal reserves necessary for future business development during the course of sustainable growth of theLawson Group.
We intend to maintain year-end dividends for the current fiscal term at ¥75 per share, the same amount as in theprevious term. Accordingly, full-year dividends, including interim dividends of ¥75 per share, will be ¥150 per share.
We intend to continue to place emphasis on the distribution of profit to shareholders into the future.
We will endeavor to raise the Company’s corporate value by appropriating internal reserves for necessary business
investments such as opening new stores, renovating existing stores and new business development.
Year-end dividends:(1) The assignment of the dividend property to shareholders and total amount thereof:¥75 per share of the Company’s common stock at a total of ¥ 7,505,028,450(2) Effective date of the dividends from surplus:
Wednesday, May 26, 2021

56

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

Interim dividend per share (Yen)Dividend per share (Yen)Consolidated dividend payment ratio (%)

Year-end dividend per share (Yen)

41st Term

42nd Term

43rd Term

44th Term

45th Term

46th Term(Year ended
Feb. 2016)(Year ended
Feb. 2017)(Year ended
Feb. 2018)(Year ended
Feb. 2019)(Year ended
Feb. 2020)(Year ended
Feb. 2021)

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

41st Term

42nd Term

43rd Term

44th Term

45th Term

46th Term(Current Period)¥122.50¥125¥127.50¥127.50¥75¥75¥122.50¥125¥127.50¥127.50¥75¥75 (Planned)

¥245

¥250

¥255

¥255

¥150

¥150 (Planned)¥313.81¥363.96¥268.16¥255.71¥200.95¥86.84

78.1%

68.7%

95.1%

99.7%

74.6%

172.7%(Planned)

12.0%

13.5%

9.7%

9.3%

7.3%

3.2%

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

57

(TRANSLATION ONLY)
Proposal No. 2: Election of Seven (7) Directors
The terms of office of all eight (8) Directors expire at the conclusion of this 46th Ordinary General Meeting of
Shareholders. Accordingly, we propose that you elect seven (7) Directors including one (1) new candidate.
The Company has endeavored to ensure management transparency and fairness, and has a rule to appoint
Independent Directors equaling one-third or more of the Board’s composition. If this proposal is approved and passed,
there will be seven (7) Directors of the Company after the meeting of shareholders, of which three (3) will be Outside
Directors. All of the Outside Directors are “Independent Directors/Audit and Supervisory Board Members.” Therefore,
we propose that you continue to elect Independent Directors equaling one-third or more of the Board’s composition.
The candidates for directors are as stated in the following table. Please refer to pages 59 to 65 for the brief personal
histories of the indicated candidates.
Furthermore, please refer to page 69 for the policy and procedures of the Company’s Board of Directors fornominating candidates for Directors.

Position at the Company, etc.

Board ofDirectors’
meeting
attendance
rate

No.

Name

1

Sadanobu Takemasu

President,
Representative Director

Reappointment

100%

2

Katsuyuki Imada

Member of the Board,
Senior Executive
Managing Officer

Reappointment

100%

3

Satoshi Nakaniwa

Member of the Board,
Executive Managing
Officer

Reappointment

100%

4

Keiko Hayashi

Member of the Board

Reappointment, outside,
independent

100%

5

Miki Iwamura

Member of the Board

Reappointment, outside,
independent

92.3%

6

Satoko Suzuki

Member of the Board

Reappointment, outside,
independent

100%

7

Kiyotaka Kikuchi–

Notes:
1. Ms. Keiko Hayashi’s legal name is Keiko Hama.
2. Ms. Miki Iwamura’s legal name is Miki Oku.
3. Positions at the Company, etc., are as of April 8, 2021.

58

New appointment–

(TRANSLATION ONLY)
No.
1

Brief Personal History, Position, Assignment and Important
Concurrent Positions
April 1993

Joined Mitsubishi Corporation

June 2010

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

May 2014

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

March 2016

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

June 2016

President and COO, Representative Director, Lawson, Inc.

March 2017

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

September 2017

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

February 2019

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

March 2019

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

March 2020

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

March 2021

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

Sadanobu Takemasu(August 12, 1969)
Reappointment■Number of the Company’s
shares held:
7,000■Attendance at Board of
Directors’ meetings
13 out of 13 (100%)■Years in office

Seven years (as of theconclusion of themeeting ofshareholders)

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

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

59

(TRANSLATION ONLY)No.
2

Brief Personal History, Position, Assignment and Important
Concurrent Positions
April 1985

Joined Mitsubishi Corporation

March 2002

General Manager of Corporate Planning Office, Lawson,
Inc.

March 2004

Senior Vice President and Division Director of Corporate
Strategy and Planning Division, Lawson, Inc.

March 2007

Executive Vice President and Division Director of Corporate
Strategy and Planning Division, Lawson, Inc.

May 2008

Unit Manager, Retail Division, Living Essentials Group,
Mitsubishi Corporation

October 2012

Executive Vice President and Division Director of Corporate
Strategy and Planning Division, Lawson, Inc.

Reappointment

September 2013

■Number of the Company’s
shares held:
2,000

Executive Managing Officer, acting CCO, CFO, andDivision Director of Corporate Strategy and Planning
Division, Lawson, Inc.

September 2016

Executive Managing Officer, Division Director of Corporate
Strategy and Planning Division, Division Director of Next
Generation CVS Division, Lawson, Inc.

March 2017

Senior Executive Managing Officer and Division Director of
Corporate Strategy and Planning Division, Lawson, Inc.

May 2017

Member of the Board, Senior Executive Managing Officer
and Division Director of Corporate Strategy and Planning
Division, Lawson, Inc.

April 2018

Senior Vice President, Mitsubishi Corporation

April 2021

Member of the Board, Senior Executive Managing Officer,
Division Director, Corporate Strategy, Human Resourcesand Head Director, New Business Division, and Deputy
CSO (CSR Promotion), Lawson, Inc. (Current position)

Katsuyuki Imada(January 22, 1963)■Attendance at Board of
Directors’ meetings
13 out of 13 (100%)■Years in office

Four years (as of theconclusion of the meetingof shareholders)

Reasons for nomination as Director
Mr. Katsuyuki Imada has been nominated as a candidate for Director as he has beenin charge of overall corporate strategy including corporate planning, corporate
governance, initiatives for SDGs, and the development of next-generation CVS as
Member of the Board, Senior Executive Managing Officer, Division Director,
Corporate strategy of Lawson, Inc. We would like to continue to benefit from his
management and supervision of the Company by leveraging his experience.

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

60

(TRANSLATION ONLY)No.
3

Brief Personal History, Position, Assignment and Important
Concurrent Positions
April 1993

Joined Mitsubishi Corporation

March 1994

Investment and Credit Department, Mitsubishi Corporation

May 1999

Living Essentials Group Administration Department,
Mitsubishi Corporation

April 2005

Senior Vice President, Assistant to CFO, Meidi-Ya
Corporation (currently Mitsubishi Shokuhin Co., Ltd.)

December 2008

General Manager, Mitsubishi International Corporation

September 2013

Team Leader, Chemicals Group Administration Department,
Mitsubishi Corporation

October 2015

Deputy General Manager, Chemicals Group Administration
Department, Mitsubishi Corporation

February 2017

■Number of the Company’s
shares held:
1,000

General Manager, Finance and Accounting Division,Lawson, Inc.

March 2017

Executive Vice President and CFO, Lawson, Inc.

May 2017■Attendance at Board of
Directors’ meetings
13 out of 13 (100%)

Member of the Board, Executive Vice President, and CFO,
Lawson, Inc.

March 2018

Member of the Board, Executive Vice President, CFO, andDivision Director of Shared Services Division, Lawson, Inc.

March 2019

Member of the Board, Executive Managing Officer, CFO,
and Division Director of Shared Services Division, Lawson,
Inc.

March 2020

Member of the Board, Executive Managing Officer, and
CFO, Lawson, Inc. (Current position)

Satoshi Nakaniwa(May 20, 1969)
Reappointment■Years in office

Four years (as of theconclusion of the meetingof shareholders)

Reasons for nomination as Director
Mr. Satoshi Nakaniwa has been nominated as a candidate for Director as he has beenin charge of finance and accounting, business risk management and investor relations
as well as purchase control as Member of the Board, Executive Managing Officer,
and CFO of Lawson, Inc. We would like to continue to benefit from his management
and supervision of the Company by leveraging his experience.

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

61

(TRANSLATION ONLY)
No.
4

Brief Personal History, Position, Assignment and Important
Concurrent Positions

Keiko Hayashi(March 16, 1959)
Reappointment, outside,
independent■Number of the Company’s
shares held:

3,000■Attendance at Board of
Directors’ meetings

June 1983

Joined SHIMIZU CONSTRUCTION CO., LTD, Los
Angeles, USA

November 1992

Dog Food Trade Strategy, Sales Technology Manager,
Master Foods Japan Ltd.

August 1993

Marketing Director, Member of Management Decision
Committee, Master Foods Japan Ltd.

August 1995

Marketing Director, Member of Management Committee,
Mattel Japan Ltd.

February 1998

Country Manager, VICTORIA’S SECRET Catalog,
LIMITED Group

October 1998

Merchandising Director, Disney Store Japan

December 1999

President and Representative Director, Lands’ End Japan
KK

June 2006

Founded I･M･A Co., Ltd. (currently DoCLASSE the Store
Co., Ltd.) and assumed the position of President and CEO(Current position)

September 2007

Founded DoCLASSE Co., Ltd. and assumed the position of
President and CEO (Current position)

February 2011

Founded IMA Holdings and assumed the position of
President and CEO (Current position)

March 2011

Founded fitfit Co., Ltd. and assumed the position of
President and CEO (Current position)

December 2011

Founded IMA People Co., Ltd. and assumed the position of
President and CEO (Current position)

May 2016

Outside Director, Lawson, Inc. (Current position)

13 out of 13 (100%)■Years in office

Five years (as of theconclusion of the meetingof shareholders)

Reasons for nomination as Outside Director and expected roles
Following her career in product development and marketing-related work at anadvertising agency, foreign consulting firm, and Disney Store Japan, among others,
Ms. Keiko Hayashi founded DoCLASSE Co., Ltd., which handles the planning,
manufacturing, sales and delivery of clothes, fashion goods and jewelry. As thepresident of the company, she has extensive experience and expertise in corporate
management. Ms. Hayashi has been nominated as a candidate for Outside Director,
as we have been receiving her proactive opinions and suggestions regarding theCompany’s management at the Board of Directors’ meetings, and we would like tocontinue to benefit from her supervision of the Company’s management byleveraging her experience.
Ms. Hayashi serves as Vice Chairperson of the Company’s Nomination andCompensation Advisory Committee, which consists exclusively of non-executive
directors and outside Audit and Supervisory Board members (part-time). She has
also been registered as an Independent Director/Audit and Supervisory Board
Member with the Tokyo Stock Exchange, Inc., pursuant to the rules specified by
the exchange.

Particular conflicts of interest between the Candidate andLawson, Inc.
There are no particular conflicts of interest between the Candidate and Lawson, Inc.
Ms. Keiko Hayashi’s legal name is Keiko Hama.

62

(TRANSLATION ONLY)
No.
5

Brief Personal History, Position, Assignment and Important
Concurrent Positions

Miki Iwamura(October 24, 1965)
Reappointment, outside,
independent■Number of the Company’s
shares held:

500■Attendance at Board of
Directors’ meetings

12 out of 13 (92.3%)■Years in office

Three years (as of theconclusion of the meetingof shareholders)April 1988

Joined Dentsu Inc. (currently Dentsu Group Inc.)

October 1995

Joined Booz Allen Hamilton Inc.

October 2001

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

July 2003

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

July 2007

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

May 2015

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

May 2018

Outside Director, Lawson, Inc. (Current position)

May 2019

Vice President, APAC & Japan Marketing, Google G.K.
(Current position)

April 2021

Executive Vice President, Tokyo University (Current
position)

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

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

63

(TRANSLATION ONLY)No.
6

Brief Personal History, Position, Assignment and Important
Concurrent Positions

Satoko Suzuki

April 1999

Joined Nihon L’Oreal KK

September 2006

Joined Boston Consulting Group K.K.

September 2011

Lecturer, Graduate School of Management, Kyoto
University

April 2016

Associate Professor, Graduate School of Management,
Kyoto University

April 2017

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

May 2020

Outside Director, Lawson, Inc. (Current position)(November17, 1977)
Reappointment, outside,
independent

Reasons for nomination as Outside Director and expected roles■Number of the Company’s
shares held:—■Attendance at Board of
Directors’ meetings

11 out of 11 (100%)■Years in office

One year (as of theconclusion of the meetingof shareholders)Ms. Satoko Suzuki has been nominated as a candidate for Outside Director, as she
has a wealth of academic knowledge on consumer behavior, marketing and brandmanagement. She has also served as a member of public and private committees
related to “hospitality management” and “self-rewarding consumption,” publishedmany papers, presented at academic conferences and received awards. We havebeen receiving her proactive opinions and suggestions regarding the Company’s
management at Board of Directors’ meetings, and we would like to continue tobenefit from her supervision of the Company’s management by leveraging her
experience.
She has also been registered as an Independent Director/Audit and Supervisory
Board Member with the Tokyo Stock Exchange, Inc., pursuant to the rules specified
by the exchange.

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

64

(TRANSLATION ONLY)
No.
7

Brief Personal History, Position, Assignment and Important
Concurrent Positions
April 1989

Joined Mitsubishi Corporation

June 2009

Director Executive Officer, Itoham Foods Inc., Tokyo

February 2013

Living Essentials Group CEO Office, Mitsubishi
Corporation

April 2014

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

October 2015

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

April 2016

Division COO, Fresh Food Products Div., Mitsubishi
Corporation

New appointment

April 2017

General Manager, Living Essentials Group CEO Office,Mitsubishi Corporation■Number of the Company’s
shares held:

April 2019

General Manager, Consumer Industry Group CEO Office,Mitsubishi Corporation

April 2020

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

April 2021

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

Kiyotaka Kikuchi(November 19, 1966)—

Reasons for nomination as Director
Mr. Kiyotaka Kikuchi has been nominated as a candidate for Director, as he has awealth of knowledge on the consumer industry field, mainly in the food industry,
through his duties at Mitsubishi Corporation, the parent company of Lawson, Inc.,as well as his secondment to a meat processing manufacturer. We would like tobenefit from his supervision of the Company’s management by leveraging his
experience.

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

Notes:
1. In accordance with Article 24 of the current Articles of Incorporation, Lawson, Inc. has concluded the following
liability limitation agreements with Ms. Keiko Hayashi, Ms. Miki Iwamura, and Ms. Satoko Suzuki. Under theliability limitation agreement concluded with the Company, Directors (excluding those who are executive
directors, etc.) assume liability for damages specified in Article 423, Paragraph 1 of the Companies Act within alimit not exceeding the amount stipulated by laws and regulations, provided that they have performed duties
which resulted in a cause of such liability in good faith without gross negligence. The Company plans toconclude the same contract with Mr. Kiyotaka Kikuchi.
2. The Company has concluded corporate officer liability insurance (D&O insurance) contracts with its Directors
and Audit and Supervisory Board Members as the insured. The insurance contract covers damages such asindemnities and contentious expenses based on the legal liability for damages incurred by the insured due toactions taken by the insured as an officer of the Company. If each of the candidates is elected and assumes office
as a Director, all of such Directors will be insured under the said insurance contract. The term of the insurance
contract is one (1) year, and it is scheduled to be renewed by resolution of the Board of Directors before theexpiration of the term.
3. The information in nominees’ Brief Personal Histories, Positions, Assignments and Important Concurrent Positions iscurrent as of April 8, 2021.

65

(TRANSLATION ONLY)
Proposal No. 3: Election of One (1) Audit and Supervisory Board Member
The term of office of Masakatsu Gonai, Audit and Supervisory Board Member, expires at the conclusion of this
46th Ordinary General Meeting of Shareholders. Accordingly, in order to strengthen and enhance the audit system, we
propose that you elect one (1) Audit and Supervisory Board Member.
The consent of the Audit and Supervisory Board has been obtained for this proposal.
The candidates for Audit and Supervisory Board Members are as stated below.
Furthermore, please refer to page 69 for the policy and procedures of the Company’s Board of Directors fornominating candidates for Audit and Supervisory Board Members.
No.
1

Brief Personal History, Position and Important Concurrent
Positions
April 2003

Joined Lawson, Inc.

March 2006

Senior Vice President, Division Director of Communication
Division and Public Relations Leader, Lawson, Inc.
Executive Vice President, Division Director ofCommunication Division and General Manager of Public
Relations Dept., Lawson, Inc.
Executive Managing Officer, Division Director ofCommunication Division and General Manager of Public
Relations Dept., Lawson, Inc.
Executive Managing Officer, Division Director ofCommunication Division, General Manager of Public
Relations Office, Human Resources (deputy in charge), andChairman of Lawson Health Insurance Society, Lawson, Inc.
Executive Managing Officer, Division Director of Corporate
Communications Division, General Manager of Public
Relations Office, General Manager of CEO Office, Human
Resources (deputy in charge), and Chairman of Lawson
Health Insurance Society, Lawson, Inc.
Executive Managing Officer, Division Director of Corporate
Communications Division, General Manager of Public
Relations Office, General Manager of CEO Office, Human
Resources (deputy in charge), Deputy CHO, and Chairman of
Lawson Health Insurance Society, Lawson, Inc.
Senior Executive Managing Officer, Division Director of
Corporate Communications Division, General Manager ofSecretary's Office, Human Resources (deputy in charge),
Deputy CHO, and Chairman of Lawson Health InsuranceSociety, Lawson, Inc.
Senior Executive Managing Officer, Corporate
Communications and Human Resources (deputy in charge),
Deputy CHO, and Chairman of Lawson Health InsuranceSociety, Lawson, Inc.

May 2010
March 2014

Jun Miyazaki

September 2014

(July 11, 1955)
New appointment

March 2015

■Number of the Company’s
shares held:

5,100

October 2015

March 2018

March 2020

May 2020

Senior Executive Managing Officer, Corporate
Communications, Compliance & Risk Management, Human
Resources (deputy in charge), Deputy CHO, and Chairman of
Lawson Health Insurance Society, Lawson, Inc.

March 2021

Senior Executive Managing Officer, Corporate
Communications, Compliance & Risk Management, Human
Resources (deputy in charge), Deputy CSO (Healthcare), andChairman of Lawson Health Insurance Society, Lawson, Inc.
(Current position)

Reasons for nomination as Audit and Supervisory Board Member
Mr. Jun Miyazaki has been nominated as a candidate for Audit and Supervisory
Board Member, as he has been responsible for the Company’s public relations
strategy, human resources strategy, compliance and risk management and healthpromotion as Corporate Communications, Compliance & Risk Management, Human
Resources (deputy in charge), Deputy CSO (Healthcare), and Chairman of Lawson
Health Insurance Society, after serving as General Manager of Public Relations Officeand General Manager of CEO Office at Lawson, Inc. He also has considerable
expertise in the convenience store business and franchise business through public
relations strategy as well as in compliance and risk management, and we would like tobenefit from his audit and supervision of the Company by leveraging his experience.

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

66

(TRANSLATION ONLY)
Notes:
1. In accordance with Article 32 of the current Articles of Incorporation, Lawson, Inc. plans to conclude thefollowing liability limitation agreement with Mr. Jun Miyazaki. Under the liability limitation agreement
concluded with the Company, Audit and Supervisory Board Members assume liability for damages specified in
Article 423, Paragraph 1 of the Companies Act within a limit not exceeding the amount stipulated by laws andregulations, provided that they have performed their duties in good faith and without gross negligence.
2. The Company has concluded corporate officer liability insurance (D&O insurance) contracts with its Directors
and Audit and Supervisory Board Members as the insured. The insurance contract covers damages such asindemnities and contentious expenses based on the legal liability for damages incurred by the insured due toactions taken by the insured as an officer of the Company. If Mr. Jun Miyazaki is elected and assumes office asan Audit and Supervisory Board Member, he will be insured under the said insurance contract. The term of theinsurance contract is one (1) year, and it is scheduled to be renewed by resolution of the Board of Directors
before the expiration of the term.
3. The information in nominee’s Brief Personal History, Position and Important Concurrent Positions is current asof April 8, 2021.

67

(TRANSLATION ONLY)
Reference: Proposed management system following the approvals of Proposals No. 2 and No. 3
Main area of experience and expertise
Name

Sadanobu
Takemasu
Katsuyuki
Imada
SatoshiNakaniwa

PositionNew
appointment /reappointment

OutsideofficerIndependent
officer

Nomination andCompensation
Advisory
Committee

President and CEO,
Representative Reappointment
Director
Member of theBoard,
Reappointment
Senior Executive
Managing Officer
Member of theBoard,
Reappointment
Executive
Managing Officer

Years in
office7

Corporate
management

Corporatefinance /accounting

Legal affairs

Marketing

IT

Franchise andretail business

●

●

4

●

4

●

●

Keiko Hayashi

Member of the
Board

Reappointment

○

○

○

5

Miki Iwamura

Member of the
Board

Reappointment

○

○

○

3

●

Satoko Suzuki

Member of the
Board

Reappointment

○

○

○

1

●

Kiyotaka
Kikuchi
ShuichiImagawa

Member of the
Board

New
appointment

○

0

●

Standing Corporate
Auditor－1●

Jun Miyazaki

NewStanding Corporate
Auditorappointment

0

●

Eiko
Tsujiyama

Corporate Auditor

－

○

○

◎

10

Yuko Gomi

Corporate Auditor

－

○

○

○

2

Keiko Yoshida Corporate Auditor

－

○

○

○

1

●

●

●

●

●

●

●

Notes:
1.
Members of the Board (Executive Directors) and members of the Nomination and Compensation Advisory Committee will be determined at the Boardof Directors’ meeting after the General Meeting of Shareholders, while Standing Corporate Auditors will be determined at the Audit and Supervisory
Board after the General Meeting of Shareholders
2.
The double circle, ◎, indicates the chair, who will be elected by the committee members.

68●

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

1.

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

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

69