(TRANSLATION ONLY)
Securities Code: 2651
April 30, 2013
To All Shareholders with Voting Rights
Takeshi Niinami
Representative Director
LAWSON, INC.
11-2, Osaki 1-chome, Shinagawa-ku, TokyoNOTICE OF THE 38th ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 38th Ordinary General Meeting of Shareholders to be held as follows.
If you are unable to attend the meeting, please exercise your voting rights using either of the methods described below after
reading the attached REFERENCE 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 20, 2013.
[Voting by Electronic Means (Internet, etc.)]
Please exercise your voting rights by 5:45 p.m. on Monday, May 20, 2013 after reading the attached document“Exercising Voting Rights via the Internet, etc.”
1. Date and Time: 10:00 a.m., Tuesday, May 21, 2013
2. Venue: Tokyo International Forum, Hall C, 5-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo
3. Objectives of the Meeting
Reports:
The Business Report, the Consolidated Financial Statements and the Non-Consolidated Financial Statements for the 38th
Fiscal Term (from March 1, 2012 to February 28, 2013), and the Audit Reports Thereof
Matters to Be Resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Partial Amendment to the Articles of Incorporation
Proposal No. 3: Election of One (1) Director
Proposal No. 4: Election of One (1) Corporate Auditor

If you attend in person, please present the enclosed Voting Rights Exercise Form at the reception desk on arrival at the meeting. The
reception desk will open at 9:00 a.m. Please arrive a little early because the reception desk can be congested immediately before themeeting begins.
If you wish to exercise your voting rights by proxy, your proxy is requested to present a document evidencing his/her proxy, such asa power of attorney, together with the Voting Rights Exercise Form in the proxy’s own name at the reception desk. (The qualified
proxy is limited to one shareholder having voting rights for this meeting as per the relevant provision in the Articles ofIncorporation.)

1

(TRANSLATION ONLY)
BUSINESS REPORT(March 1, 2012 through February 28, 2013)
I. CURRENT STATUS OF THE CORPORATE GROUP
1. Summary of Operations(1) Business Developments and Results of Operations
During the consolidated fiscal year under review, or fiscal 2012 ended February 28, 2013, the LAWSON Group (“theGroup”) implemented measures to enhance its function as a form of social infrastructure that provides essential items andservices at the local level with the aim of realizing the Group’s corporate philosophy of “Creating Happiness andHarmony in our Communities.” Based on its analysis of purchase data retrieved from the multipartner loyalty program,
Ponta, the Group focused on customer relationship management (CRM)*1 and supply chain management (SCM)*2 in order
to offer a merchandise assortment that meets the specific needs of customers in each neighborhood.
In terms of operating results for the consolidated fiscal year under review, total operating revenues increased year on yearby ¥8,487 million to ¥487,445 million (up 1.8%) as a result of new store openings and efforts to expand customer bases
comprising homemakers and seniors. Operating income grew ¥4,476 million to ¥66,246 million (up 7.2%) and ordinary
income climbed ¥4,198 million to ¥65,926 million (up 6.8%). Net income rose ¥8,297 million to ¥33,182 million (up33.3%) owing to a decrease of ¥10,784 million in extraordinary loss resulting mainly from the absence of a loss on
adjustment for changes of accounting standard for asset retirement obligations and loss from disaster caused by the Great
East Japan Earthquake posted in the previous consolidated fiscal year.
*1 CRM: A marketing management method for providing merchandise and services that meet the specific needs ofcustomers.
*2 SCM: A business administration method for comprehensively managing all stages of business, from procurement
to sales, to streamline and optimize the entire business process.
Operating results by business segment were as follows:(Convenience Store Operations)
Merchandise Strategy
On the merchandising front, we upheld the expansion of our perishable food offerings as an important strategic agenda. In
October 2012, we launched our Fresh Foods Convenience Store Declaration to strengthen our lineup of precut vegetables
and other fresh food items. We also strived to offer a wider range of seasonings and other home cooking supplies that meetgrowing consumer demand for at-home dining.
As of the end of February 2013, we are now operating nine Lawson Farms. The farms were established with the aim ofsupplying the Group’s stores with vegetables and fruits on a stable basis as well as providing produce for use as
ingredients in LAWSON’s original products.
In the rice category, the high value-added Furusato-no-umai! line released under the Onigiri-ya range was tremendously
popular thanks to its high-quality ingredients. To offer products with even higher added value, the line will be expanded toinclude lunch boxes.
We have expanded our cooked-in-store fast-food product range by increasing our lineup of deep-fried foods, including
the addition of Torikara fried chicken in June 2012.
The number of stores equipped with MACHI café, which offers casual but authentic drip coffee, increased to 2,860.
Thanks to coffee sales, we have been able to deepen our interaction with customers.
In the dessert category, we launched Ankoya, a new Japanese dessert line from the Uchi Café SWEETS brand. Ankoya
was developed to meet customer needs for smaller Japanese desserts with subdued sweetness. The intrinsic flavor of
adzuki beans and the refreshing and reserved sweetness proved appealing to a wide range of customers.
In sales promotions, the Group, which has know-how in the entertainment field, executed a joint promotional campaign
with the Aeon Group, which operates a diverse range of retail outlets, including AEON general merchandise stores and
MINISTOP convenience stores. The business alliance was formed with the aim of leveraging synergies to create superior
contents and appealing to a wider range of customers, especially families.
In addition, we implemented region-specific promotional campaigns, such as the Hokkaido Gourmet Fair, Chiba
Promotional Campaign, Shinshu Seasonal Travel Campaign, and Kumamoto Yokamon Fair to market merchandise fromeach region.

2

Store Operations
In store operations, we continued to reinforce adherence to our Triple Emphasis policy, which emphasizes (1)sincere customer service; (2) offering a merchandise assortment focused on basic items with high demand; and (3)keeping the store and local areas clean, in addition to ensuring that products are safe, reliable, healthy, and delicious.
Notably, in tandem with the increase in the number of stores with MACHI café, we strived to comprehensively
improve the quality of stores by clarifying the customer service goals to be pursued by store employees andfostering leaders among them.
Total Ponta members exceeded 50 million as of the end of February 2013, accounting for 45% of total sales. Basedon customer base analysis using Ponta membership purchase data, we strived to improve accuracy in orderplacement, develop new products, focus on measures to promote customer visits in the evening and at night, andreduce sales opportunity loss.
Store Development and Store Format Strategy
In opening new stores, the Group strictly adhered to its proprietary return-on-investment (ROI)-focused store
development standard to prioritize profitability.
Regarding store format strategy, we promoted store openings to meet the needs of customers specific to eachneighborhood by leveraging the LAWSON, NATURAL LAWSON, and LAWSON STORE 100 store formats tobetter advantage.
In an effort to reinforce stores that cater to healthcare needs, we increased the number of stores offering
over-the-counter pharmaceuticals to 72 (up 31) and the number of Pharmacy LAWSON (pharmaceuticalconvenience stores), a store format that integrates drug-dispensing pharmacies operated by Qol Co., Ltd. with
LAWSON and NATURAL LAWSON, to 30 (up 23) as of the end of February 2013. In August 2012, Lawson, Inc.
(“the Company”) acquired 5% of the total number of shares issued by Qol Co., Ltd., forming a capital alliance.
Change in Total Number of Stores(Stores)

LAWSON
Total stores as ofFebruary 29, 2012
Change during fiscal
year
Total stores as ofFebruary 28, 2013

NATURALLAWSONLAWSON STORE
100

Total

9,038

100

1,172

10,310

604

10

52

666

9,642

110

1,224

10,976

Overseas Operations
In the People’s Republic of China, the Company established Lawson (China) Holdings, Inc. (“Lawson China”) in
Shanghai in May 2012 as a holding company that controls business investment, trademark licensing management, andadministrative management functions within China. The Company’s subsidiaries in Shanghai, Chongqing, and Dalian will
be placed under the control of Lawson China to ensure efficient management. As of the end of February 2013, Shanghai
Hualian Lawson, Inc. in Shanghai operated a total of 305 LAWSON stores (down nine year on year), Chongqing Lawson,
Inc. in Chongqing, 49 stores (up 11 year on year), and Dalian Lawson, Inc. in Dalian, eight stores (up five year on year).
In Indonesia, PT MIDI UTAMA INDONESIA Tbk (“MIDI”), in which Lawson Asia Pacific Holdings Pte. Ltd. (“LAP”),
the Company’s subsidiary in Singapore, holds a 30% stake, operates LAWSON stores. As of the end of February 2013,
MIDI operated 574 stores following its own store format and 83 LAWSON stores (up 68 year on year) in Jakarta and its
outskirts as well as on the island of Bali.
In the United States, Lawson USA Hawaii, Inc., the Company’s US subsidiary in Hawaii, launched its first LAWSON
store in Honolulu in July 2012. As of the end of February 2013, two LAWSON stores were operating in Hawaii—one in
the Sheraton Waikiki Hotel and the other in Moana Surfrider—both attracting customers from around the world in
addition to Japanese customers.
In Thailand, in November 2012, we established Saha Lawson Co., Ltd., a joint venture between LAP and the SAHAGroup, Thailand’s leading distributor of consumer goods, in preparation for opening stores in the country in fiscal 2013.
Total Operating Revenues in the Convenience Store BusinessTotal Operating Revenues (¥ millions)421,150

3

Year-on-Year (%)
100.8

Net Sales at All LAWSON Stores in the Convenience Store Business
Previous fiscal year
Current fiscal year
Fiscal period
March 1, 2011
March 1, 2012
to February 29, 2012
to February 28, 2013
Sales
Percentage of
Sales
Percentage of
Product group
total (%)
total (%)
(Millions of yen)
(Millions of yen)
Processed foods
1,022,619
56.0
1,064,133
55.8
Fast foods
345,42418.9
373,385
19.6
Daily
delivered foods
Nonfood products
Total

YOY percentagechange
(%)
104.1
108.1

263,179

14.4

272,312

14.3

103.5

194,58610.7

196,716

10.3

101.1

1,825,809

100.0

1,906,547

100.0

104.4

Other Businesses
In addition to convenience store operations and overseas operations, the Group is involved in the entertainment/homedelivery business, financial services, and other businesses.
In the Group’s entertainment/home convenience business, the Company’s subsidiary, Lawson HMV Entertainment, Inc.,
successfully organized large-scale concerts by popular musicians, along with other events. As a result, revenues from theGroup’s ticketing services for fiscal 2012 exceeded ¥100 billion, a record high, which secured the Group a top-tierposition in the ticketing industry.
In January 2013, Smart Kitchen, Inc., a joint venture with Yahoo JAPAN Corp., launched an online food delivery service
targeting busy homemakers. By consolidating the Group’s merchandise procurement capacity—well proven by the
popularity of NATURAL LAWSON among working women—and its know-how in original product development with
Yahoo’s expertise in creating and operating high-traffic websites, Smart Kitchen offers via smartphone and tablet aneasy-to-use and convenient online shopping service, delivering proprietary food ingredient sets that can be cooked in notime by following simple directions. Moreover, the assortment of items available is as large as that of a large-scale
supermarket.
Lawson ATM Networks, Inc., which operates a financial services-related business, posted a solid performance owing toan increase in the number of ATMs installed in LAWSON and other stores, along with a rise in the number of transactions.
We started providing financial services for eight new banks as their business partner, bringing the total number of our
financial institution partners to 58 nationwide, including online banks, and the number of ATMs installed nationwide to
9,672 (up 670 year on year) as of the end of February 2013.
Total Operating Revenues in Other Businesses
Total Operating Revenues (¥ millions)
70,947Year-on-Year (%)
108.3

Environmental and Social Contribution Activities
The Company’s Environment and Social Contribution Division promoted environmental protection and social
contribution activities, working together with franchise store owners and Group employees.
In response to the launch of the Feed-in Tariff Scheme for Renewable Energy, a measure taken by the government against
global warming, we started introducing solar power generation systems at our stores in October 2012 as our own initiative
to tackle domestic energy issues. The systems will be installed at a total of 2,000 stores by the end of fiscal 2013.
In December 2012, we opened a cutting-edge energy-saving pilot store in Ebina-shi, Kanagawa Prefecture. Based on joint
research with the Institute of Industrial Science of the University of Tokyo, the pilot store harnesses renewable energy,
such as solar power and geo-heat, to reduce electricity consumption by about 30% compared with the fiscal 2010 level.
In our efforts to undertake social contribution activities at stores, we have been hosting the LAWSON Green Fund, adonation project active since 1992; the Support for Dreams Fund, a scholarship program for senior high school students
affected by the 2011 Great East Japan Earthquake; and a donation campaign for regions hit by heavy rains in northern
Kyushu. These initiatives have raised a combined total of ¥502 million in fiscal 2012.
With a view to functioning as a lifeline to the community under all circumstances, the Group strives to improve its
management system to ensure that its stores are kept open or restored to operation as soon as possible during or
subsequent to a disaster. This enhancement is based on our hands-on experience in coping with various disasters since theGreat Hanshin-Awaji Earthquake. When the Great East Japan Earthquake struck, the Group endeavored to continue
operations in disaster-hit areas and promptly resumed operations in areas struck by the tsunami by setting up temporary
stores. In addition, we helped these areas in their own restoration efforts, proactively sharing our experiences with the
public.

4

In recognition of such activities, the Group received the Business Continuity Advancement Organization (BCAO) Award,
which is presented to organizations that have contributed to the dissemination and practical execution of the business
continuity concept in Japan.
The Group also received Japan’s 2012 Minister of the Environment Award for the Promotion of Measures to Cope with Global
Warming in recognition of its significant contribution to prevent global warming by adopting environmentally friendly
materials for its packaging. This was the third time the Group was given the award, following presentations in 2004 and 2009.
(2) Capital Expenditures and Financing
Capital expenditures of the LAWSON Group during the year totaled ¥51,046 million, of which ¥43,677 million was
primarily for store facility investment in land and buildings, and ¥5,907 million was for the upgrading of information
systems.
(3) Changes in Operating Results and Financial Position[1] Changes in Operating Results and Financial Position of the Corporate Group
Category/Fiscal Term

Fiscal 2009th

35 Term
Total operating revenues

Fiscal 2010

Fiscal 2011thth

36 Term

37 Term

Fiscal 2012
38th Term

467,192

441,277

478,957

487,445

49,44054,59461,72865,926

Net income (¥ millions)

12,562

25,38624,88533,182

Net income per share (¥)

126.67254.61

249.17332.20(¥ millions)
Ordinary profit(¥ millions)

Total assets (¥ millions)448,131476,036

531,453

579,809

Net assets (¥ millions)

198,135

208,466

214,662

230,181

Net assets per share (¥)

1,935

2,037

2,114

2,267

Notes:
1. Net income and net income per share declined in the 35th term due to an extraordinary loss of ¥12,616 million recorded as a result of
misappropriation of funds by former directors of consolidated subsidiary LAWSON ENTERMEDIA, INC.
2. A ¥1,936 million loss on a prior-period adjustment posted in the 35th term is reflected retrospectively in the operating results andfinancial position of the 35th term.

[2] Changes in Operating Results and Financial Position of the Company
Category/Fiscal Term

Fiscal 2009

Fiscal 2010

Fiscal 2011

Fiscal 2012

35th Term

36th Term

37th Term

38th Term

1,472,415

1,502,754

1,621,328

1,693,435

271,513

263,209272,498

282,752

44,57749,312

56,11059,459Net income (¥ millions)

20,66524,643

22,46230,314

Net income per share (¥)

208.38247.15224.91

303.49Total assets (¥ millions)

420,444444,821500,667

532,619

Net assets (¥ millions)200,506

211,448

216,826

227,974

Net assets per share (¥)

2,018

2,113

2,166

2,277

Total net sales of
LAWSON stores,
including franchised
stores (¥ millions)
Total operating revenues(¥ millions)
Ordinary profit(¥ millions)5(4) Pressing Issues
The Group is promoting the following management measures with the aim of realizing its corporate philosophy of“Creating Happiness and Harmony in Our Communities.”(i) Develop merchandise assortments that meet customer needs
In an effort to create stores that meet the needs of customers from the local neighborhood, the Group will continue to
use the Ponta data to develop customer-centric merchandise assortments. We will place special focus on offering
evening and nighttime merchandise assortments that differentiate our stores from others as well as healthy andhigh-quality fresh foods.
(ii) Develop overseas business
The Group will strive to understand potential customer needs in each country and region overseas and will establish
business models tailored to each locality. Not being bound by Japanese-style business models or store formats, we will
pursue the hospitable customer service that is a signature feature of Japanese convenience stores while respecting local
cultures.
(iii) Provide home delivery service to offer customers more convenience
The Group will offer customers the luxury of convenience store shopping from the comfort of their own homes. To start
with, we will establish a full-fledged home delivery network based on our Smart Kitchen delivery service to meet theneeds of busy homemakers and others.
(iv) Promote internal control systems and address operating risks
In order to ensure business continuity, it is imperative to foster the Group’s internal control in its entirety and address
operating risks. In addition, we believe that taking a proactive approach to corporate governance will provide us with ashortcut to enhance corporate value. We will therefore continue to focus on promoting internal control and addressing
operating risks.
We look forward to the continued support and encouragement of our shareholders.

62. Current Status at the End of February 2013
(1) Major Business Operations and Principal Offices(Convenience Store Operations and Overseas Businesses)[1] Lawson, Inc.
Major Business:
Lawson, Inc. operates the LAWSON-brand franchise system and company-operated
stores as the headquarters of LAWSON and NATURAL LAWSON convenience store
chainsHead Office:Shinagawa-ku, Tokyo
Principal Offices:
Hokkaido Lawson Branch (Chuo-ku, Sapporo), Tohoku Lawson Branch (Aoba-ku,
Sendai), North Kanto Lawson Branch (Shinagawa-ku, Tokyo), South Kanto Lawson
Branch (Shinagawa-ku, Tokyo), Chubu Lawson Branch (Naka-ku, Nagoya), Kinki
Lawson Branch (Suita, Osaka), Chugoku & Shikoku Lawson Branch (Kita-ku,
Okayama) and Kyushu Lawson Branch (Hakata-ku, Fukuoka)
Note: In addition to the above sites, the Company has 91 offices throughout Japan, including
branches.

[2] Ninety-nine Plus, Inc.
Major Business:

Head Office:[3] SCI, Inc.
Major Business:
Head Office:Ninety-nine Plus, Inc. operates company-operated and franchise system stores as theheadquarters of the LAWSON STORE100 fresh foods convenience store chains.
The 1,224 LAWSON STORE100 stores operated by Ninety-nine Plus, Inc. are includedin the table on the next page.
Shinagawa-ku, Tokyo

SCI, Inc. operates the wholesale of meats, such as processed foods and frozen foods, andpacking materials.
Shinagawa-ku, Tokyo
Note: SCI, Inc. was established as a wholly owned subsidiary of the Company in July 2012.

[4] Lawson (China) Holdings, Inc.
Major Business:
Lawson (China) Holdings, Inc. controls companies that operate overseas businesses in
China.
Head Office:Shanghai, China
Note: Lawson (China) Holdings, Inc. was established as a wholly-owned subsidiary of theCompany in May 2012.

[5] Shanghai Hualian Lawson, Inc.
Major Business:
Shanghai Hualian Lawson, Inc. operates company-operated and franchise system storesof the LAWSON convenience store chains.

Head Office:The 305 LAWSON stores operated by Shanghai Hualian Lawson, Inc. are included in thetable on the next page.
Shanghai, China

7[6] Chongqing Lawson, Inc.
Major Business:
Chongqing Lawson, Inc. operates company-operated stores.

Head Office:[7] Dalian Lawson, Inc.
Major Business:
Head Office:Stores:Prefecture
Hokkaido
Aomori
Akita
Iwate
Miyagi
Yamagata
Fukushima
Niigata
Tochigi
Gunma
Saitama
Chiba
RegionShanghai

Number ofStores
576
186
168
159
200
66
91
114
125
80
462
437
Number ofStores305

The 49 LAWSON stores operated by Chongqing Lawson, Inc. are included in the tablebelow.
Chongqing, China

Dalian Lawson, Inc. operates company-operated stores.
The 8 LAWSON stores operated by Dalian Lawson, Inc. are included in the table below.
Dalian, China

Prefecture
IbarakiTokyo
Kanagawa
Shizuoka
Yamanashi
Nagano
Aichi
Gifu
Mie
Ishikawa
ToyamaFukui
RegionChongqingNumber ofStores
124
1,549
799
205
91
141
513
131
104
99

Prefecture
Kyoto
Shiga
Nara
Wakayama
Osaka
Hyogo
Okayama
Hiroshima
Yamaguchi
Tottori

191
102
Number ofStores49

ShimaneKagawaRegionDalianNumber ofStores
266
135
100
118
1,004
593
131
155
114
98
101
104
Number ofStores8Prefecture
Ehime
Tokushima
Kochi
Fukuoka
Saga
Nagasaki
Oita
Kumamoto
MiyazakiKagoshima

Number ofStores
168
108
64
393
65
92
148
103
89
114

Total

10,976

RegionNumber ofStores362

Overseas
total[8] Lawson Asia Pacific Holdings Pte, Ltd.
Major Business:
Lawson Asia Pacific Holdings Pte, Ltd. controls the Company’s subsidiaries andaffiliates that operate overseas businesses (excluding China).
Head Office:Singapore8

(Other Business)
Company Name
Lawson HMVEntertainment, Inc.

Head Office
Shinagawa-ku,
Tokyo

Smart Kitchen, Inc.

Shinagawa-ku,Tokyo

Lawson ATM Networks,
Inc.
BestPractice Inc.

Shinagawa-ku,
Tokyo
Shinagawa-ku,
Tokyo

Major BusinessSells tickets for various events andmusic/video software inside LAWSON
stores, etc.
Entertainment/Home
Operates a regular home delivery
convenience businessservice for foods and daily necessities
using the Internet
Financial services–related
Installs jointly operated ATMs inbusiness
LAWSON stores, etc.
Consulting businessConducts surveys of convenience
stores to give advice and makespecific proposals for the
improvement of LAWSON storesEntertainment/Home
convenience businessNote: Smart Kitchen, Inc. was established as a 51 % owned subsidiary of the Company in June 2012.

(2) Employees[1] Employees of the Corporate Group
Designation of Business Segment
Convenience store business
Overseas businessEntertainment/Home convenience business
Financial services-related business
Consulting business
Advertising business
Total[2] Employees of the Company
Number of Employees
3,482

Number of Employees
4,751
660
817
24
152
0
6,404

YoY Change

YoY Change
(25)
(105)
52
3
8
(4)
(71)

Average Age
140

39.1

9

Average Years of Service
12.5

(3) Status of Major Business Combinations[1] Important Subsidiaries
Company Name
Common Stock
Ninety-nine Plus, Inc.
¥99 million
SCI, Inc.
¥10 million
Lawson (China) Holdings, Inc.
CNY600,000
Thousand
Shanghai Hualian Lawson, Inc.
CNY165,898
ThousandChongqing Lawson, Inc.
CNY102,411
ThousandDalian Lawson, Inc.
CNY22,000
ThousandLawson Asia Pacific Holdings Pte,
S$66 million
Ltd.
Lawson HMV Entertainment, Inc.
¥100 million
Smart Kitchen, Inc.
Lawson ATM Networks, Inc.
BestPractice Inc.

Shareholding (%)
100.0
100.0
100.0

Major BusinessConvenience store businessConvenience store business
Overseas business

85.0

Overseas business

100.0

Overseas business

95.0

Overseas business

100.0

Overseas business

100.0Entertainment/Home conveniencebusiness
Entertainment/Home conveniencebusiness
Financial services-related business
Consulting business¥490 million

51.0¥3,000 million¥10 million

76.5
100.0

Notes:
1. SCI, Inc. was established as a wholly owned subsidiary of the Company in July 2012 and became LAWSON’s consolidated
subsidiary.
2. Lawson (China) Holdings, Inc. was established as a wholly owned subsidiary of the Company in May 2012 and became
LAWSON’s consolidated subsidiary.
3. Smart Kitchen, Inc. was established as a 51 % owned subsidiary of the Company in June 2012 and became LAWSON’s
consolidated subsidiary.
4. Lawson Toyama, Inc., which had been a consolidated subsidiary in the previous consolidated fiscal year, was merged with theCompany in December 2012.
5. Cross Ocean Media, Inc., which had been a consolidated subsidiary in the previous consolidated fiscal year, was excluded fromthe scope of consolidation because its liquidation was completed in November 2012.

[2] Other Important Business Combinations
1) Important Affiliated Companies
Company Name
Common Stock
Lawson Okinawa, Inc.
¥10 million
PT MIDI UTAMA INDONESIA Tbk
Rp. 288,235
millionShareholding (%)
49.0
30.0

Major BusinessConvenience store business
Overseas businessNotes:
Venture Republic Inc., which had been an equity method affiliate in the previous consolidated fiscal year, was excluded from thescope of the equity method affiliate because the Company sold all the equities it owned in Venture Republic Inc. in May 2012.

2) Important Business Alliances
Mitsubishi Corporation holds 32.5% of the total voting rights (32,399 thousand shares) of the Company(including indirect holdings). Recognizing Mitsubishi Corporation as the most important strategic partner, theCompany has entered into an extensive business tie-up agreement with Mitsubishi Corporation for theenhancement of existing businesses and the development of new businesses.

10II. CURRENT STATUS OF THE COMPANY
1. Shares at the End of the Year
(1) Total Number of Shares Authorized to Be Issued: 409,300,000 shares(2) Total Number of Shares Issued and Outstanding: 100,300,000 shares (Including 406,853 shares of treasury stock)(3) Number of Unit (tangen) Shares:
100 shares(4) Number of Shareholders:
33,629(5) Major Shareholders:
Investment in the Company
Shareholder’s Name

Number of shares held(Thousands)

Shareholding (%)

Mitsubishi Corporation

32,08932.1

STATE STREET BANK AND TRUST COMPANY 505223

2,877

2.9

Japan Trustee Services Bank, Ltd. (Trust account)

2,462

2.5

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

2,228

2.2

NTT DOCOMO, INC.

2,092

2.1

STATE STREET BANK AND TRUST COMPANY

1,856

1.9

The Chase Manhattan Bank NA, London SL, Omnibus Account

1,853

1.9

STATE STREET BANK AND TRUST COMPANY 502202

1,653

1.7

STATE STREET BANK AND TRUST COMPANY 505225

1,638

1.6

MELLON BANK N.A. AS AGENT FOR ITS CLIENT MELLON OMNIBUS US

1,580

1.6

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

11

2. Status of stock acquisition rights
Stock Acquisition Rights Held by Corporate Officers of the Company as of February 28, 2013
5th Stock
6th (a) Stock
7th (a) Stock
8th (a) Stock
Acquisition Rights
Acquisition Rights
Acquisition Rights
Acquisition Rights
Number of option holders and the number of stock acquisition rights (units)
Directors (Excluding
1 person
2 persons
3 persons
3 personsoutside directors)(112 units)(122 units)(146 units)(210 units)
Outside directors
2 persons
2 persons
2 persons
2 persons(10 units)(8 units)(8 units)(12 units)
Class and number ofCommon stock ofCommon stock ofCommon stock ofCommon stock ofshares subject to stock
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
acquisition rights
12,20013,00015,40022,200
Value of property
invested in exercising
¥1
¥1
¥1
¥1
stock acquisition rights(per share)
Exercise period
October 13, 2005
October 27, 2006
September 6, 2007
January 17, 2009
through May 31,
through May 26,
through August 20,
through December
2025
2026
2027
15, 2028
Main exercise
Note 1
Note 2
Note 2
Note 2conditions
10th Stock
11th Stock
9th Stock
Acquisition Rights
Acquisition Rights
Acquisition Rights
Number of option holders and the number of stock acquisition rights (units)
Directors (Excluding
3 persons
3 persons
3 personsoutside directors)(168 units)(144 units)(215 units)
Outside directors
2 persons
2 persons
2 persons(10 units)(10 units)(10 units)
Class and number ofCommon stock ofCommon stock ofCommon stock ofshares subject to stock
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
acquisition rights
17,80015,40022,500
Value of property
invested in exercising¥1¥1¥1
stock acquisition rights(per share)
Exercise period
February 18, 2010
February 26, 2011
February 18, 2012
through February 1,
through February 10, through February 1,
2030
2031
2032
Main exercise
Note 2
Note 2
Note 2conditions
Notes:
1. A stock acquisition rights holder may exercise his or her rights only for a period of 5 years from the day after losing his or her position
as a director of the Company.
2. A stock acquisition rights holder may exercise his or her rights within the exercise period only for a period of 5 years from the day
after losing his or her position as either director and/or executive officer of the Company.
The total number of shares subject to stock acquisition rights that remain unexercised as of February 28, 2013, is 179,500 shares,
accounting for 0.2% of the total number of shares issued and outstanding.

123. Directors and Corporate Auditors(1) Positions, Names and Assignments
Name

Position

Assignments and Important Concurrent Positions
Note: Important concurrent positions of outside directors given later in (5) Outside Directors and Outside
Corporate Auditors

Takeshi Niinami
Genichi Tamatsuka
Yoshiyuki Yahagi
Toru Moriyama

Representative Director
Director
Director
Director

Reiko Yonezawa
Takehiko Kakiuchi
Emi Oosono
Atsuhiko Seki

Director
Director
DirectorStanding Corporate
AuditorStanding Corporate
AuditorCorporate Auditor
Corporate Auditor

Shinichi Hokari
Tetsuo Ozawa
Eiko Tsujiyama

President and CEO and Group CEO, Overseas Business
Senior Executive Vice President, COO and Group CEO, CVS
Senior Executive Vice President and CFO
Executive Vice President and Group CEO, Living Essentials Group,
Mitsubishi Corporation

Notes:
1. Directors Reiko Yonezawa, Takehiko Kakiuchi and Emi Oosono are outside directors as stipulated in Article 2, Item 15, of theCompanies Act of Japan (the “Companies Act”).
2. Standing Corporate Auditor Shinichi Hokari and Corporate Auditors Tetsuo Ozawa and Eiko Tsujiyama are outside corporate auditors
as stipulated in Article 2, Item 16, of the Companies Act.
3. Standing Corporate Auditor Shinichi Hokari has assumed responsible posts for many years on the Board of Audit of Japan andtherefore has considerable expertise in finance and accounting.
Corporate Auditor Tetsuo Ozawa, lawyer, has practiced law and advised on legal matters and risk management mainly in relation to
the legal affairs of companies and therefore has considerable expertise in finance and accounting.
Corporate Auditor Eiko Tsujiyama has long-term experience as a university professor in accounting and therefore has considerable
expertise in finance and accounting.
4. Changes in appointment, approved with resolutions by the 37th Ordinary General Meeting of Shareholders held on May 29, 2012 are,as follows:
Appointment

Retirement from officeDirector

Genichi Tamatsuka

Director

Emi Oosono

Standing Corporate Auditor

Shinichi Hokari

Director

Manabu Asano

Director

Hiroshi Tasaka

Standing Corporate Auditor

Munehiko Nakano

5. Executive officers who are not directors are as follows:
Senior Executive Vice President

Takatoshi Kawamura

Senior Vice President

Kiyoteru Suzuki

Executive Vice President

Shuichi Imagawa

Senior Vice President

Tetsu Yamada

Executive Vice President

Masaharu Kamo

Senior Vice President

Shigeaki Kawahara

Senior Vice President

Norikazu Nishiguchi

Senior Vice President

Tatsushi Sato

Senior Vice President

Katsuyuki Imada

Senior Vice President

Kei Murayama

Senior Vice President

Takaki Mizuno

Senior Vice President

Masakatsu Gounai

Senior Vice President

Jun Miyazaki

Senior Vice President

Yasuhiro Iseki

Senior Vice President

Ichiro Kijima

Senior Vice President

Hajime Nakai

Senior Vice President

Hisashi Yasuhira

Senior Vice President

Atsushi Maeda

Senior Vice President

Masayuki Sawada

Senior Vice President

Kazuo Togasa

Senior Vice President

Masahiro Oyama

13(2) Amounts of Remuneration, etc., Paid to Directors and Corporate Auditors
1) Remuneration paid to officers
Total Compensation Paid by Type
Total
(Millions of Yen)
Compensation
Category
Paid
Retirement
Basic
Stock Options(Millions of Yen)
BenefitCompensation
Directors(Including outside directors)(Outside directors)
Corporate Auditors(Including outside corporate
auditors)(Outside corporate auditors)
Total

Number of
Directors andCorporate
Auditors
Applicable

213

213

–

–

9

(24)

(24)

(–)

(–)

(4)

73

67

–

6

5

(51)
287

(44)
281

(–)
–

(6)
6

(4)
14

Notes:
1. As of February 28, 2013, the number of directors in office was 7 and that of corporate auditors was 4.
2. The above figures include remuneration paid to 2 directors and 1 corporate auditor who retired at the conclusion of the 37th Ordinary
General Meeting of Shareholders held on May 29, 2012.
(Reference)
At the board of directors meeting held on March 27, 2013, the Company resolved that stock options worth ¥148 million will be
granted to directors (¥8 million for outside directors) as compensation for the fiscal year under review in addition to the above
compensation.

2) Remuneration paid to representative directors
Name

Officer Category

Takeshi Niinami

Representative
Director
Chairman and
Director

Company Category

Consolidated
Total Compensation Paid by Type
Total Amount of
BasicStock Options
Compensation
Compensation

Lawson, Inc.

¥108 million–

Ninety-nine Plus, Inc.

¥3 million–¥112 million(Reference)
At the board of directors meeting held on March 27, 2013, the Company resolved that stock options worth of ¥82 million will be granted
as compensation for the fiscal year under review in addition to the above compensation.

14

(3) Policy on Decisions Concerning the Amount of Remuneration Paid to Directors
1) Basic policy on decisions concerning the amount of remuneration paid to directors
Regarding the amount of remuneration paid to directors, it is the Company’s basic policy to design the
remuneration system in close correlation with shareholder returns while ensuring that it will function sufficiently as
an incentive for the enhancement of corporate value, sustainable growth and improvement of operating
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 determined at theBoard of Directors meeting based on recommendations by the Company’s Compensation Committee, which
consists exclusively of outside officers (three outside directors and one outside corporate auditor).
Members of the Compensation Committee
Outside Director:
Takehiko Kakiuchi (chairperson)
Outside Director:
Reiko Yonezawa
Outside Director:
Emi Oosono
Outside Corporate Auditor: Tetsuo Ozawa
3) Details of remuneration paid to directors
Remuneration paid to the Company’s directors is composed of basic compensation through cash payments andstock price-linked compensation through the granting of stock options.
[Basic compensation]
Basic compensation of directors is composed of fixed compensation with fixed monthly payments and variable
compensation, which fluctuates in response to the Company’s financial performance for each period.
i) Fixed compensation
The amount of fixed compensation commensurate with the position is determined based on standards stipulated
by internal rules.
ii) 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.
Variable compensation is paid in accordance with earnings indicators such as EPS (consolidated net income pershare). Regarding nonexecutive directors, including Toru Moriyama, Reiko Yoneyama, Takehiko Kakiuchi and
Emi Oosono, variable compensation is not applicable as they are focused on their supervisory and advisory roles as
the Company’s representative directors and in the Board of Directors meetings.
[Stock price-linked compensation]
Stock options as stock-based compensation
By incorporating stock options as stock-based compensation linked with stock prices as part of compensation paid
to directors, the Company has a system in which management shares with stockholders the benefits from a rise instock price as well as the risks associated with a price decline. The Company positions stock options ascompensation that is linked to medium to long-term improvement of its corporate value.
Exercise price on stock options as stock-based compensation is ¥1 per share and the amount of units granted isdetermined in accordance with the position of directors. In addition, stock options as stock-based compensation canbe exercised only during designated periods after retirement from office; directors are not allowed to exercise theirstock option rights during their term in office.

15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 meeting ofshareholders in accordance with laws and regulations.
i) Amount of remuneration paid to directors
Resolutions at the general meeting of shareholders as of May 24, 2001: ¥400 million or less per yearii) Amount of stock options granted to directors
Resolutions at the general meeting of shareholders as of May 26, 2006: ¥200 million or less per year16(4) Policy on Decisions Concerning the Amount of Remuneration Paid to Corporate Auditors
1) 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 eachcorporate 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. Retirement benefits upon the abolishment of retirement benefits
to corporate auditors were paid out following the resolution at the 37th Ordinary General Meeting of Shareholders
held on May 29, 2012.
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 29, 2012: ¥80 million or less per year17(5) Outside Directors and Outside Corporate Auditors
1) Relationship between Major Positions Concurrently Held and the Company
Position in the

Name

Company
Director

Position

Details

Concurrently Held
Reiko Yonezawa

The R Co., Ltd.

Relationship between the Company andCompany Where Position Concurrently Held

President

The Company and The R Co., Ltd. (President
Reiko Yonezawa), have a business
relationship consisting of reception services
for the Company’s head office provided by
the latter. The Company entrusted The R Co.,
Ltd. to provide services after receiving bids
from several suitable companies andverifying their economic efficiency.

Director

Takehiko Kakiuchi

Mitsubishi

Division COO,

The Company and Mitsubishi Corporation, of

Corporation

Foods

which Mr. Kakiuchi is an employee and(Commodity)

which is a large shareholder of the Company,

Div.

have a business relationship under an

Outside director

extensive business alliance agreement.

KentuckyFried

Chicken Japan, Ltd.

Director

Emi Oosono

Hitotsubashi

Professor

University Graduate
School ofInternational
Corporate Strategy
Resona Holdings,

Outside director

Inc.
Corporate auditor

Shinichi Hokari

Corporate auditor

Tetsuo Ozawa

Tokyo Fuji Law

LawyerOffice(Partner)

Monex Group, Inc.

Outside corporate
auditorCorporate auditor

Eiko Tsujiyama

CEMEDINE CO.,Outside corporateLTD.

auditorWaseda University

Professor

Mitsubishi Corporation, for which Eiko

School of

Tsujiyama serves as an outside corporate

Commerce andauditor, is a large shareholder of the

Graduate School ofCompany and there is a business relationshipCommerce

between the two companies based on a

Mitsubishi

Outside corporate

comprehensive business alliance agreement.

Corporation

auditorNTT DOCOMO, INC., for which Eiko

ORIX Corporation

Outside director

Tsujiyama serves as an outside corporate

NTT DOCOMO,

Outside corporate

auditor, is a large shareholder of theINC.

auditorCompany and there is a business relationshipShiseido Company,

Outside corporatein the telecommunications field between the

Limitedauditortwo companies based on a comprehensive
business alliance agreement.

Note: Where nothing is written in the column Relationship between the Company and Company Where Position Concurrently Held, itmeans that the Company has no important business or other relationship with that company.

182) Major Activities during the Year
Position in the Company Name
Director
Reiko Yonezawa(Independent director)

Major Activities
Ms. Yonezawa attended 10 of 12 board of directors’ meetings held
during the year and appropriately questioned and/or remarked basedon her abundant experience and knowledge as a management
executive. Ms. Yonezawa is also a member of the Company’s
Compensation Committee.

Director

Takehiko Kakiuchi

Mr. Kakiuchi attended 11 of 12 board of directors’ meetings held
during the year and appropriately questioned and/or remarked basedon his deep knowledge about the consumer lifestyles industry andwas also responsible for smooth operations of the board of directors
as its Chairman. Mr. Kakiuchi is also a member of the Company’s
Compensation Committee.

Director

Emi Oosono(Independent director)

Ms. Oosono attended all 10 board of directors’ meetings held
throughout the year during her term in office and, as an academic,
appropriately questioned and/or remarked based on her abundant
knowledge of global corporate management, corporate strategy andorganizational behavior, etc. Ms. Oosono is also a member of theCompany’s Compensation Committee.

Corporate auditor

Shinichi Hokari(Independent director)

As a standing corporate auditor, Mr. Hokari examined financial
documents, and visited relevant establishments and business partners
to examine their business operations and financial situation. Mr.
Hokari monitored and verified the execution of duties of directors
and other personnel including those relating to the improvement ofinternal control systems. Mr. Hokari attended all 10 board of
directors’ meetings and all 11 board of corporate auditors’ meetings
held throughout the year during his term in office and appropriately
questioned and/or remarked based on his deep knowledge financeand accounting, and using his experience of assuming responsible
posts for many years on the board of audit of Japan.

Corporate auditor

Tetsuo Ozawa(Independent director)

Mr. Ozawa attended 11 of 12 board of directors’ meetings and 14 of
15 board of corporate auditors’ meetings held during the year andappropriately questioned and/or remarked based on his abundant
experience and knowledge as a lawyer. Mr. Ozawa is also a memberof the Company’s Compensation Committee.

Corporate auditor

Eiko Tsujiyama(Independent director)

Ms. Tsujiyama attended 11of 12 board of directors’ meetings and all
15 board of corporate auditors’ meetings held during the year andappropriately questioned and/or remarked based on her deep
knowledge of accounting as a university professor in this field.

19

(6) Judgment Criteria Concerning IndependenceWith the aim of enhancing corporate governance, the Company has specified the following judgment criteria regarding
independent directors, and has appointed outside directors and/or outside corporate auditors who do not meet the
judgment criteria as independent directors as specified in the rules set forth by the Tokyo Stock Exchange, Inc. and the
Osaka Stock Exchange Co., Ltd.
1) Those who are engaged in business operations of the Company’s parent company
2) Those who are engaged in business operations of the Company’s sister companies
3) Those who conduct business transactions with the Group as a major business partner or those who are engaged insuch business operations
Business partner groups that provide the Group with products and/or services and whose total amount of business
transactions with the Group during the latest fiscal year account for 2% or more of their consolidated net sales
4) The Group’s major business partners or those who are engaged in such business operations
Business partner groups to which the Group provides its products and/or services and for which the Group’s total
amount of business transactions during the latest fiscal year accounted for 2% or more of the Company’s
consolidated net sales (total operating revenues)5) Consultants, accounting professionals, and legal professionals who have received any monetary or property benefits
from the Group other than remuneration paid to officers
Consultants, accounting professionals such as certified accountants, and legal professionals such as lawyers who
have received any monetary or property benefits from the Group other than remuneration paid to officers and who
have received remuneration totaling ¥5 million or more per year6) The Company’s major shareholders (those who are engaged in business operations of applicable corporations incases where major shareholders are corporations)7) Those with close family members who are engaged in business operations of the Group8) Those with close family members who are nonexecutive directors or accounting advisors of the Company (in cases
where independent directors are outside corporate auditors)(7) Outline of Liability Limitation Agreements with Outside Directors and Outside Corporate Auditors
The Company has entered into agreements with the outside directors and outside corporate auditors to limit their
liability with regard to the damages outlined under Article 423, Paragraph 1, of the 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.

20

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 auditor2) Sum of money and other property benefits to be paid by the Company and its
subsidiaries to the independent auditor¥83 million¥132 million

Note:
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 each other. Therefore, the amount in 1) above indicates the total for the two audits.
2. Five of the important subsidiaries of LAWSON overseas are subject to audit by an independent auditor other than LAWSON’s
independent auditor.

(3) Nonaudit Services
The Company entrusts the following services, which do not come under the services set forth in Article 2, Paragraph 1,of the Certified Public Accountant Act (nonaudit services), to the independent auditor:
Advice and guidance on the preparation of documents translated into English for earnings reports and various otherfinancial documents.
(4) Policy on Decisions Concerning Dismissal or Non-Reappointment of the Independent Auditor
If the independent auditor violates or infringes the Companies Act, the Certified Public Accountant Act, or other laws
or regulations, or the Company considers it necessary to do so, the Board of Directors shall, after obtaining theagreement of the Board of Corporate Auditors, submit a proposal for dismissal or nonreappointment of the independent
auditor to a general meeting of shareholders. In addition, the board of corporate auditors can dismiss the independent
auditor with a unanimous resolution if it determines that any act or circumstance of the independent auditor falls under
any items of Article 340, Paragraph 1, of the Companies Act.

21

III. SYSTEMS TO ENSURE COMPLIANCE OF THE DIRECTORS’ EXECUTION OF DUTIES WITH LAWS
AND REGULATIONS AND THE ARTICLES OF INCORPORATION, AS WELL AS OTHER SYSTEMS TO
ENSURE THE PROPRIETY OF BUSINESS OPERATIONSAt the Board of Directors’ meeting held on February 19, 2013, based on improvements and the operation of the preceding“2012 Basic Policy for Improvement of Internal Control Systems,” which was approved at the Board of Directors’ meeting
held on February 20, 2012, the Company passed a resolution called the “2013 Basic Policy for Improvement of Internal
Control Systems,” as indicated below.
(1) Systems to Ensure Compliance of the Execution of Duties by Directors and Employees with Laws andRegulations and the Articles of Incorporation
1) The board of directors shall determine the improvement policies and plans for internal control systems, including
those for compliance with laws, regulations and the like (the “Compliance”), and receive status reports thereof
periodically.
2) The board of directors shall maintain and improve the supervising function regarding the execution of duties by the
directors by electing outside Directors on an ongoing basis.
3) The corporate auditors shall independently audit the execution of duties by the directors, including the statusconcerning the improvement of the internal control systems.
4) The Internal Audit Department, which is independent from the business-executing bodies, shall audit the statusconcerning the improvement of the internal control systems, and recommend improvements thereof, as required.
5) The board of directors shall maintain and raise the awareness of officers and employees regarding compliance bythoroughly disseminating the LAWSON Group Code of Conduct and the LAWSON Ethical Mission Statement bysuch measures as, including, but not limited to, appointing a Chief Compliance Officer (CCRO), establishing adepartment to oversee compliance, assigning personnel in charge of compliance at each department, streamlining
the rules in relation to compliance, and providing periodic training on ethics and awareness surveys on compliance.
6) The Legal Affairs Department shall be reinforced to fortify foundations for complying with legal requirements byidentifying the laws and regulations applicable to the Company’s businesses and communicating the content thereof
to the relevant departments and sections.
7) With the aim to strive for the early detection of violations or possible violations of laws, regulations, etc. across the
LAWSON Group and the entire LAWSON chain, the Company shall establish and upgrade normal reporting routes
for reporting any violations of laws, regulations or internal rules. It shall establish reporting and consulting systems(internal consulting contact points, group-wide outside consulting contact points and consulting contact points for
employees and business counterparties for LAWSON’s franchised stores) that fully protect those who make suchreports.
8) The Company shall never become involved with antisocial forces or bodies that threaten the order and security ofsociety, and shall take a firm stance on, and deal with, improper demands by consulting with lawyers, the police andthe like.
(2) Systems to Preserve and Manage Information Pertaining to the Execution of Duties by Directors
1) The Company shall record, preserve and manage information relating to decision making at important meetings
such as those of the board of directors and the management council, and authorizing documents, including those
approved by the president, as well as financial, clerical and risk- and compliance-related information (including
information contained in electromagnetic media). Moreover, the Company shall put in place a system allowing
relevant parties to inspect the above information.
2) The Company shall manage and monitor its information systems in a secure manner, in addition to maintaining thesystems, 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.

22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 and important
trade secrets.
5) Through the close collaboration between the Risk Management Department and the IT Department, the Company
shall strive to establish a consolidated and unified information security governance system.
6) The Company shall establish and maintain an information security system for the LAWSON Group to cope with the
expansion of e-commerce business and active promotion of overseas business.
7) The Company shall establish and maintain rules regarding the disclosure of important Company information, andupgrade the system for disclosing information that must be disclosed according to the requirements of laws,
regulations and stock exchanges, in an appropriate, timely and fair manner.
(3) Rules and Other Systems Regarding Risk Management
1) The Company shall establish a department to oversee risk management, improve rules related to risk management,
and improve group-wide risk prevention systems during normal operations. Moreover, the Company shall respondaccording 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 advanceto prepare for the occurrence or possible occurrence of unanticipated situations or events, which might have adverse
effects on management of the Company, in order to provide a quick response to any actual occurrence thereof and to
take effective measures to prevent a reoccurrence. In particular, the Company shall formulate a Business Continuity
Plan (BCP) and a Business Continuity Management (BCM) system to minimize the business interruption in theevent 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.
4) In order to be prepared for major earthquakes, the Company shall conduct disaster prevention drills three times ayear while working to improve effectiveness of the “Disaster Countermeasure Manuals” and the “BCP” system.
(4) Systems to Ensure the Efficient Execution of Duties by Directors
1) The Company shall clarify the functional authority and responsibility of corporate officers and employees for
decision making and execution of business affairs. The Company shall also improve rules for the division 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 theorganization and making appropriate use of IT.
3) In order to promote the proper communication of information and communications between officers and employees,
the Company shall improve systems so that management guidelines and policies are disseminated to employees bycorporate officers, and important field information is properly communicated by employees to corporate officers ina timely manner.
(5) Systems to Ensure the Propriety of Business Operations Conducted by the Corporate Group Consisting of theCompany and its Subsidiaries
1) The Company shall endeavor to maintain and enhance the LAWSON brand through close collaboration withsubsidiaries and affiliated companies (“Associated Companies”). However, with regard to affiliated companies, theCompany will work to appropriately establish and maintain systems through phased implementation, taking into
account such factors as relations with other leading shareholders differences in laws, regulations and businesscustoms and the like of foreign countries.

232) While respecting the independence of Associated Companies, in view of the purpose of the Company’s equity
participation in Associated Companies, the Company shall establish Group regulations such as basic policies for the
management of Associated Companies and management policies thereof, and keep the Associated Companies fully
informed of the LAWSON Group Code of Conduct.
3) 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 witha view to ensuring appropriate business operations across the entire LAWSON Group.
4) The Internal Audit Department shall cooperate in auditing the status of establishment of internal control systems at
Associated Companies, and promote improvements based on the results of audits.
(6) Necessary Systems to Ensure Proper Financial Reporting by the Company and its Group of Companies
1) The Company shall enhance systems for preparing financial statements according to laws, regulations, andaccounting standards and disclosing the same after they have been discussed, examined, and confirmed inaccordance with regulations governing information disclosure in order to report financial information in a properand 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 andimprovement through the identification and recording of business processes at important business bases and thestatus 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 Duties
1) 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.
4) The Legal Affairs, Risk Management and Finance and Accounting departments of the Company shall assist in
conducting necessary surveys for audits when requested by any corporate auditor.
(8) Independence of Employees from Directors in the Preceding Item
Performance reviews of Corporate Auditors’ Staff shall be conducted by the standing corporate auditors to ensurethat Corporate Auditors’ Staff carry out their duties appropriately. Personnel changes require the prior consent of thestanding corporate auditors.
(9) Systems for Directors and Employees to Report to Corporate Auditors and Other Reporting Systems to the
Corporate Auditors
1) Directors and employees of the Company shall report important corporate management and business administration
matters, as well 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 to internal control.
2) If directors become aware of any fact or event that will likely cause the Company to suffer significant damage orloss, they shall immediately inform the board of corporate auditors.
3) Reports to corporate auditors shall basically be made in good faith without fail, and shall be made promptly, if
required, in addition to periodic reports.
(10) Other Systems to Ensure Effective Audits by Corporate Auditors
1) The representative directors and corporate auditors shall have regular meetings to enhance smooth communications
with each other.
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 AssociatedCompanies so that the corporate auditors can perform their duties appropriately.

243) Directors shall also cooperate in conducting surveys of significant business partners, which the corporate auditors
deem necessary.
4) Directors shall enable the corporate auditors to collaborate with outside experts such as lawyers and certified public
accountants, if any corporate auditor deems it necessary in executing his/her duties.
The above amounts and the number of shares in this Business Report are rounded down to the nearest unit and the ratios arerounded to the nearest whole number.

25

(TRANSLATION ONLY)
Consolidated Balance Sheets(Millions of yen)
Assets
Account item

Liabilities

As ofFebruary29, 2012

Account item

As ofFebruary28, 2013(for reference)

Current assets
Cash and bank deposits
Accounts receivable—duefrom franchised stores
Marketable securities
Merchandise inventories
Prepaid expenses

160,157
79,074
19,521

Accounts receivable—other
Deferred tax assets
Other
Allowance for doubtful
accounts

32,645
4,800
3,080
(149)

4,999
8,075
8,110

(for reference)

217,978
13,761
74,501

239,794
11,16976,018

1,390
－
500

1,403
1,431
－

11,223
17,541
15,30575,004

14,48926,105
14,47487,529

3,204
701

2,544
215

101
4,743
98,812

108
4,304
109,833－
37,9028,745

148
47,207
9,898

308

332

35,73534,804

15,161
958
316,791

16,682
758
349,627

211,835
58,506

225,785
58,50647,707
107,249(1,627)(680)

47,718
121,154(1,593)
690

(11)

78

(567)
(101)

(567)
1,179

442
3,064
214,662
531,453

427
3,279
230,181579,809

Property and store equipment
Buildings and structures
Furniture, fixtures, andequipment
Land
Lease assets
Construction in progress

183,835
107,061
14,013
6,815
54,1371,806

8,295
65,7991,910

Intangible assets

38,97734,089Software

19,28822,255

Software in progress
Goodwill
Other
Investments and other
Investments in securities
Long-term loans receivable

8,263
10,871
553
148,483
7,702
32,138

1,659
9,683
491
156,285
10,09834,580Long-term prepaid expenses
Lease deposits
Deferred tax assets
Other

7,988
83,665
16,87015,968

Allowance for doubtful
accounts(15,851)

9,130
Capital surplus
86,109Retained earnings
16,215
Treasury stock
1,368 Accumulated othercomprehensive income(1,217)Net unrealized gain (loss) on
available-for-sale securities
Land revaluation difference
Foreign currency translation
adjustments
Stock acquisition rights
Minority interests
Total net assets
579,809
Total Liabilities and Total Net
AssetsTotal Assets

371,295

531,453

As of
February28, 2013

180,296 Current liabilities
84,770Accounts payable—trade25,374
Accounts payable—trade for
franchised stores
Due to franchised stores－
8,963
Short-term loans payable
8,793
Current portion of long-term
debt
46,008
Lease obligations
4,656
Accounts payable—other
3,011
Income taxes payable(1,281)
Deposits received
Accrued employees’ bonuses
Provision for use of points
granted209,138
Asset retirement obligations
118,372
Other
14,761 Long-term liabilities

Fixed assets

As ofFebruary29, 2012

399,513Long-term loans payable
Long-term lease obligations
Allowance for employees’
retirement benefits
Allowance for retirement
benefits to executive officers
and corporate auditors
Deposits received from
franchisees and lessees
Asset retirement obligations
Other
Total liabilities
Net assets
Shareholders’ equity
Common stock

Note: Figures as of February 29, 2012, are included in the table above for comparative purposes only.

26

(TRANSLATION ONLY)
Consolidated Statements of Income

Account item

From March 1, 2011 to
February 29, 2012

(Millions of yen)
From March 1, 2012 toFebruary 28, 2013

(for reference)

Operating revenues
Franchise commissions from franchised stores
Other
Net sales
Net sales
Total operating revenues
Cost of goods sold
Gross profit on sales
Operating gross profit
Selling, general, and administrative expenses
Operating income
Nonoperating income
Interest received
Penalty income
Equity in earnings of affiliates
Other
Nonoperating expenses
Interest expense
Loss on cancellation of store lease contract
Other
Recurring profit
Extraordinary gains
Gain on step acquisitions
Gain on sales of investment securities
Gain on negative goodwill
Compensation income
Other
Extraordinary losses
Loss on disposal of fixed assets
Loss on impairment of long-lived assets
Provision of allowance for doubtful accounts
Loss on disaster
Loss on adjustment for changes of accounting
standard for asset retirement obligations
Other
Income before income taxes and minority interests
Income taxes – current
Income taxes – deferred
Income before minority interests
Minority interests in net income
Net income

215,573
55,320(208,063)(156,245)(51,817)

270,893
208,063
478,957
156,245

230,00264,500(192,942)(144,885)(48,056)

322,711
260,941
61,769
672
44
380
1,169
1,122
661
526

1,570
－
291
－
197

2,268

2,309
61,728

2,059

2,068
3,318
－
3,460
8,292
361
22,963(2,321)

192,942
487,445
144,885
342,560
276,313
66,246

756
265
394
794
1,231
534
765

－
145
153
71
11

2,211

2,531
65,926

381

1,641
2,929
1,127
－
－
17,502
46,285
20,64125,643758
24,885

1,018
25,345748

Note: Figures from March 1, 2011 to February 29, 2012, are included in the table above for comparative purposes only.

27

294,503

6,717
59,58926,09433,494311
33,182

(TRANSLATION ONLY)
Consolidated Statement of Changes in Net Assets(From March 1, 2012 to February 28, 2013)(Millions of yen)
Shareholders’ equity

Accumulated other comprehensive income
Net

Commonstock

CapitalsurplusRetainedearnings

Treasurystock

unrealized
Totalgain (loss)
shareholders’ on availableequity
for-saleLand
revaluationdifference

securities

Balance at the beginning of
the current period

58,50647,707

107,249(1,627)

211,835

(11)

(567)

Total
Stock
Foreignaccumulatedacquisition
currency
otherrightstranslation comprehensive
adjustments
income

(101)

(680)

442

Minority
interests

Total net
assets

3,064

214,662

Changes of items during theperiod(19,278)
33,182

Dividends from surplus
Net income
Purchase of treasury stock –at cost(19,278)
33,182(19,278)
33,182

(7)

(7)

(7)

Disposal of treasury stock

0

0

0

0

Exercise of stock acquisitionrights to shares (delivery oftreasury stock)

11

41

52

52

Net changes of items otherthan shareholders’ equity
Total changes of items during
the period
Balance at the end of thecurrent period

89

1,280

1,370

(15)

214

1,569

–

11

13,90433

13,950

89

–

1,280

1,370

(15)

214

15,51958,50647,718

121,154(1,593)

225,785

78

(567)

1,179

690

427

3,279

230,18128

(TRANSLATION ONLY)(Notes to the Consolidated Financial Statements)
1. Scope of consolidation(1) Number of Consolidated subsidiaries: 11(Domestic) Lawson HMV Entertainment, Inc.
Lawson ATM Networks, Inc.
BestPractice, Inc.
Ninety-nine Plus, Inc.
Smart Kitchen, Inc.
SCI, Inc.
(Foreign)
Chongqing Lawson, Inc.
Shanghai Hualian Lawson, Inc.
Dalian Lawson, Inc.
Lawson Asia Pacific Holdings Pte, Ltd.
Lawson (China) Holdings, Inc.
Among those listed above, Smart Kitchen, Inc., SCI, Inc. and Lawson (China) Holdings, Inc. were included in
the scope of consolidation as those subsidiaries were newly established in the consolidated fiscal year underreview.
Lawson Toyama, Inc., which was a consolidated subsidiary in the previous consolidated fiscal year, has been
excluded from the scope of consolidation due to merger with Lawson, Inc. on December 1, 2012. In addition,
Cross Ocean Media, Inc., which was a consolidated subsidiary in the previous consolidated fiscal year, has been
excluded from the scope of consolidation due to completion of liquidation on November 27, 2012.
(2) Names of major nonconsolidated subsidiaries, etc.
(Domestic) Natural Lawson Direct, LLP.
LAWSONWILL, Inc.
HATS UNLIMITED CO., LTD.
(Foreign)
Lawson USA Hawaii, Inc.
Shanghai Lesong Trading Co., Ltd.
Hangzhou Lawson Department Store Co., Ltd.
Nonconsolidated subsidiaries were excluded from the scope of consolidation because they have a negligible
impact on total assets, total operating revenues, net income, retained earnings, etc., and do not interfere withreasonable judgments of the corporate group’s financial condition and business results.
2. Application of the equity method(1) Number of unconsolidated subsidiaries and affiliated companies to which the equity method is applied: 2(Domestic) Lawson Okinawa, Inc.
(Foreign)
PT MIDI UTAMA INDONESIA Tbk
Venture Republic Inc., which had been categorized as an equity method affiliate in the previous consolidated
fiscal year, was excluded from the application of the equity method because all shares of Venture Republic Inc.
have been sold.
(2) Affiliated companies to which the equity method is not applied
The Company does not apply the equity method to Natural Lawson Direct, LLP., LAWSONWILL, Inc., HATSUNLIMITED CO., LTD., Lawson USA Hawaii, Inc., Shanghai Lesong Trading Co., Ltd., and Hangzhou
Lawson Department Store Co., Ltd., all of which were categorized as nonconsolidated subsidiaries, as well as
KOBE HOT DELI Co., LTD.; Healthsiru Co., Ltd.; Double Culture Partners Co., Ltd.; Lawson Farm Chiba,
Inc.; Lawson Farm Kagoshima, Inc.; Lawson Farm Tokachi, Inc. ; Lawson Farm Oita, Inc.; Lawson Farm Oita
Bungoono, Inc.; Lawson Farm Tottori, Inc.; Lawson Farm Hiroshima Jinsekikogen-cho, Inc.; Lawson Farm
Miyazaki, Inc.; Lawson Farm Ehime, Inc.; and Saha-Lawson, Co.,Ltd., all of which were categorized as
nonequity method-applied affiliates, because the financial figures such as net income, retained earnings, andothers are negligibly insignificant in comparison with the Company’s consolidated financial statements.
(3) Special notes concerning procedures for application of the equity method:
The closing date of PT MIDI UTAMA INDONESIA Tbk is December 31. When preparing the consolidated
financial statements, the Company used this company’s financial information prepared as of such closing date,
and as required, made certain adjustments for significant transactions that subsequently occurred in theintervening period up to the end of the consolidated fiscal year.

29

(TRANSLATION ONLY)
3. Fiscal year end of the consolidated subsidiaries
The balance sheet date of Chongqing Lawson, Inc.; Shanghai Hualian Lawson, Inc.; Dalian Lawson, Inc.; andLawson (China) Holdings, Inc. is December 31. In order to prepare the consolidated financial statements, theCompany used these companies’ financial information prepared as of such closing date and significant transactions
which occur between the balance sheet date and the consolidated balance sheet date are adjusted as required forconsolidation. The fiscal year end dates for other consolidated subsidiaries correspond with the consolidatedbalance sheet date.
4. Summary of Significant Accounting Policies(1) Valuation basis and method for important assets
Marketable securities and investments in securities:
Held-to-maturity debt securities: Carried at amortized cost (straight-line method)
Available-for-sale securities:
Securities whose market value is readily determinable: Recorded at market value with net unrealized gains
and losses as a separate component of net assets. The cost of securities sold is determined based on themoving-average method.
Other: Stated at cost determined by the moving-average method.
Inventories:
Inventories at cost being determined by the retail method (the book value in the consolidated balance sheet iswritten down based on any decline in profitability).
Merchandise of some consolidated subsidiaries is stated at cost determined by the specific identification
method (the book value in the consolidated balance sheet is written down based on any decline inprofitability).
(2) Depreciation
Property and store equipment (except for leased assets):
Depreciation is mainly computed using the declining-balance method at rates based on estimated useful
lives of the assets. The ranges of useful lives are from 10 to 34 years for buildings and structures and fromfive to eight years for furniture, fixtures and equipment.
Intangible assets (except for lease assets):
Amortization of intangible assets is computed by the straight-line method.
Costs of software for internal use are amortized by the straight-line method over five years, which is theestimated useful life.
Lease assets:
In terms of the depreciation method for 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 theuseful life and a residual value of zero.
ASBJ Statement No.13 “Accounting Standard for Lease Transactions” requires that all finance leasetransactions be capitalized to recognize lease assets and lease obligations in the consolidated balance sheet.
However, the ASBJ Statement No.13 permits leases that do not transfer ownership of the leased property to
the lessee and whose lease inception was before March 31, 2008, to be accounted for as operating leasetransactions. The Group applied the ASBJ Statement No.13 effective March 1, 2009 and continued toaccount for such leases as operating lease transactions.
Long-term prepaid expenses:
Amortization of long-term prepaid expenses is computed by the straight-line method.
(3) Accounting policies for important reserves
Allowance for Doubtful Accounts:
Allowance for doubtful accounts is provided at 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.
Accrued Employees’ Bonuses:
Accrued employees’ bonuses are provided for payments of employees’ bonuses based on the estimatedamounts.
Provision for use of points granted:
The Company provides, to MY LAWSON POINT holders and LAWSON PASS holders when purchasing
goods, an entitlement to certain points that the holder can redeem for a discount on subsequent purchasesfrom LAWSON stores. Provision for points granted is recorded at the amount that is expected to be used asof the consolidated balance sheet date.

30

(TRANSLATION ONLY)
Allowance for Employees’ Retirement Benefits:
Allowance for employees’ retirement benefits is provided at the amount calculated based on the projected
benefit obligations and plan assets at the consolidated balance sheet date. Actuarial differences are mainly
amortized from the following consolidated fiscal year on a straight-line basis over a certain period (10years) within the average remaining service period of employees at the time of their occurrence. Prior
service cost is mainly amortized, starting with the consolidated fiscal year when it was incurred, on astraight-line basis over a certain period (10 years) within the average remaining service period of
employees.
Allowance for Retirement Benefits to Executive Officers and Corporate Auditors:
Allowance for retirement benefits to executive officers of the Company, and to directors and corporate
auditors of a consolidated subsidiary is recorded as a liability at 100% of the amount that would be
required if all corporate auditors, executive officers, and directors terminated their services with theCompany at the consolidated balance sheet date.
(4) Foreign Currency Translation and Foreign Currency Financial Statements
All short-term and long-term monetary receivables and payables denominated in foreign currencies aretranslated into Japanese yen at the exchange rates at the consolidated balance sheet date. The foreign exchange
gains and losses from translation are recognized in the consolidated statement of income. The balance sheet
accounts as well as revenue and expense accounts of foreign subsidiaries and affiliated companies are translated
into Japanese yen at the current exchange rate as of the consolidated balance sheet date except for shareholders’equity, which is translated at the historical rate. Differences arising from such translation are shown as “foreign
currency translation adjustments” and “minority interests”, separate components of net assets.
(5) Accounting for Consumption Tax
Consumption tax is excluded from income and expense.
5. Amortization of Goodwill
Goodwill is amortized on a straight-line basis over the relevant years, depending on the reason for the occurrence of
goodwill, with a maximum of 20 years.
(Changes in Method of Presentation)
1. In the “Investments and other” section, “Claims provable in bankruptcy, claims provable in rehabilitation and other”
were separately listed in the consolidated balance sheet before. Due to a decline in financial materiality, “Claims
provable in bankruptcy, claims provable in rehabilitation and other” (¥589 million for the consolidated fiscal year
under review) are included in “Other” from the consolidated fiscal year under review.
2. In the “Current liabilities” section, “Accounts payable-trade for franchised stores” (¥74,501 million for the previous
consolidated fiscal year) were included in “Accounts payable-trade” before. From the standpoint of clarity,“Accounts payable-trade for franchised stores” (¥76,018 million for the consolidated fiscal year under review) are
separately presented from the consolidated fiscal year under review.
3. In the “Long-term liabilities” section, “Accumulated impairment loss on long-term leased assets” was separately
listed in the consolidated balance sheet before. Due to a decline in financial materiality, “Accumulated impairment
loss on long-term leased assets” (¥552 million for the consolidated fiscal year under review) is included in “Other”
from the consolidated fiscal year under review.
4. In the “Nonoperating income” section, “Penalty income” (¥44 million for the previous consolidated fiscal year) was
included in “Other” before. Due to an increase in financial materiality, “Penalty income” (¥265 million for the
consolidated fiscal year under review) is separately presented from the consolidated fiscal year under review.
5. In the “Nonoperating income” section, “Compensation income” was separately listed in the consolidated balance
sheet before. Due to a decline in financial materiality, “Compensation income” (¥161 million for the consolidated
fiscal year under review) is included in “Other” from the consolidated fiscal year under review.
6. In the “Extraordinary losses” section, “Loss on sales of fixed assets” was separately listed in the consolidatedbalance sheet before. Due to a decline in financial materiality, “Loss on sales of fixed assets” (¥36 million for the
consolidated fiscal year under review) is included in “Other” from the consolidated fiscal year under review.
(Additional Information)
For the accounting changes and error corrections made after the beginning of the consolidated fiscal year underreview, the Group has adopted the “Accounting Standard for Accounting Changes and Error Corrections” (ASBJ
Statement No. 24 of December 4, 2009) and the “Guidance on Accounting Standard for Accounting Changes andError Corrections” (ASBJ Guidance No. 24 of December 4, 2009).

31

(TRANSLATION ONLY)(Notes to the Consolidated Balance Sheet)
1. Accumulated depreciation of property and store equipment:¥207,651 million

2. Revaluation of land used for businessLand used for business was revalued on the basis prescribed by the Law Concerning Revaluation of Land (Law No.
34, March 31, 1998). The resulting revaluation difference has been included in net assets as land revaluationdifference.
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 the assessed value as stipulated in
Article 2, Item 5 of the same ordinance.
Date of revaluation: February 28, 2002
The difference between book value and market value of the revalued land as of the consolidated balance sheet datewas ¥ 307 million.
(Notes to the Consolidated Statement of Income)Loss on impairment of long-lived assets
The Company and the consolidated subsidiaries (together, the “Group”) identified each store as the smallest cash
generating unit.
The Group recognized an impairment loss on the following assets that declined in value mainly due to continuous
operating losses. The carrying amounts of those assets were written down to the recoverable amount and wererecorded as extraordinary losses.
Category by use
Location
AssetsMillions of yen
Buildings and structures
420
Tokyo
Furniture, fixtures, equipment, and others
Buildings and structures
StoresOsaka
472
Furniture, fixtures, equipment, and others
Buildings and structures
Others
2,009
Furniture, fixtures, equipment, and others–
Software
25
Other
–
Other
1
Total
–
–
2,929
By category of fixed assets(Millions of yen)
Buildings and structures
1,923
Furniture, fixtures, and equipment
204
Lease assets
758
Software
25
Other
17
The recoverable value of the impaired assets is calculated based on net selling price or value in use. Net selling
price of land was calculated based on the value appraised by the real estate appraiser or expected contract price,and the value in use was calculated by discounting estimated future cash flows to which a discount rate of 4.0%
was primarily applied.

32

(TRANSLATION ONLY)(Notes to the Consolidated Statement of Changes in Net assets)
1. Number of shares of outstanding stock and treasury stock
Number of shares at
Increase during the Decrease during thethe beginning of
periodperiodcurrent period(thousand shares)(thousand shares)(thousand shares)
Outstanding stock
100,300––
Common stock

Number of sharesat the end of theperiod(thousand shares)
100,300

Treasury stock
Common stock (Notes)

416
1
10
406
Notes:
1. Out of common stock, the increase of 1 thousand shares in treasury stock is attributable to purchase of stock
less than one share unit.
2. Out of common stock, the 10 thousand share decrease in treasury stock resulted from the 10 thousand-sharedecrease due to the exercise of stock option rights and a 0 thousand-share purchase request of stock less than
one share unit.
2. Dividend(1) Dividend payment

Date of resolution
The general meetingof shareholders(May 29, 2012)
Meeting of board of
directors (October 3,
2012)Class ofsharesAmount ofdividend payment(millions of yen)

Dividend pershare (yen)Date attributable
to dividend

Effective
date

Common
stock

9,289

93

As of February
29, 2012

As of May30, 2012

Common
stock

9,988

100

As of August
31, 2012

As ofNovember
9, 2012(2) Dividends for which the effective date is after the year-end balance sheet date, while dividends attributed tothis period
Amount of
DateClass of Reserve of
Dividend per
Effective
Date of resolution
dividend payment
attributablesharesdividend
share (yen)date(millions of yen)
to dividend
The general meeting
As of
CommonRetained
As of Mayof shareholders
9,989
100
Februarystockearnings
22, 2013(May 21, 2013)28, 2013
3. Kind and number of stock that can be exercised by outstanding stock acquisition rights (excluding those notyet in the exercisable period).
Common stock
179,500 shares

33

(TRANSLATION ONLY)(Notes regarding financial instruments)
1. Matters relating to the status of financial instruments(1) Policy for financial instruments
The LAWSON Group primarily uses short-term deposits, etc., to manage its funds and raises funds, asnecessary, 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 other accounts receivable are exposed to credit risk from business counterparties.
Long-term loans receivable (primarily referring to construction cooperation funds, which are loaned to thelandowners when a store opens and loans to franchised stores) and lease deposits are exposed to credit risk fromthe landowners, etc. The responsible department monitors these risks on receivables on a daily basis with theaim of early detection and reduction of concerns associated with the collectibility of debt due to deterioration in
the financial conditions of the owners.
Investment securities are primarily shares of companies with business relationships and listed shares of 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.
Among trade payables, most of the accounts payable-trade and accounts payable-trade for franchised stores anddeposits held as a result of bill settlement services have payment due dates within one month, while mostdeposits held as a result of ticket sales transactions have payment due dates within six months.
The primary purpose of lease obligations related to finance lease transactions is securing the funds required forcapital investments, and the maximum redemption date is 10 years after the consolidated balance sheet date.
Deposits received from franchisees and lessees which are primarily operational deposits received from
franchised stores based on franchise contracts are returned to franchised stores after the expiry of the franchisecontract term (contract term is 10 years in principle).
With regard to the liquidity risk associated with fund-raising (risk that payments cannot be executed on thepayment 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 the quoted price in active markets. If quoted price is notavailable, other rational valuation techniques are used instead. Since estimation of the fair values considers
multiple factors, the results of the estimation might differ if other valuation techniques were used.

34

(TRANSLATION ONLY)
2. Matters relating to the fair values of financial instruments
The carrying amount, fair values, and difference as of February 28, 2013, 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.”)(1) Cash and bank deposits(2) Accounts receivable—other
Allowance for doubtful accounts (*1)

Carrying amount
84,77046,008(1,188)44,819Fair value
84,770(Millions of yen)
Difference–

44,819

–

1,190
4,227

1,190
6,658

–
2,430

34,53652

79,141
251,116(6,407)(3,924)(3) Investment securities(i) Available-for-sale securities(ii) Investment in subsidiaries andaffiliated companies(4) Long-term loans receivable
Allowance for doubtful accounts (*1)

34,580(96)
34,484
86,109(560)
85,548255,041(5) Lease deposits
Allowance for doubtful accounts (*1)

Total assets(1) Accounts payable—trade andAccounts payable—trade for
87,18787,187–
franchised stores(2) Deposits received
87,52987,529–(3) Lease obligations (*2)
61,696
62,113417(4) Deposits received from franchisees
34,804
32,115(2,689)and lessees
Total liabilities
271,218
268,945(2,272)(*1) Allowances for doubtful accounts related to accounts receivable—other, long-term loans receivable and leasedeposits have been deducted.
(*2) Lease obligations include liabilities maturing within one year.

35

(TRANSLATION ONLY)(Note 1) Method of calculating the fair values of financial instruments
Assets(1) Cash and bank deposits (2) Accounts receivable—other
The carrying fair values of cash and bank deposits and accounts receivable—other approximate fair value
because of their short maturities.
(3) Investment securities
The fair values of investment securities are measured at the quoted market price on the stock exchange for theequity instruments.
(4) Long-term loans receivable
The fair values of long-term loans receivable are determined by discounting the cash flows related to the loansat the interest rate deemed to be applied for similar loans.
(5) Lease deposits
The fair values of lease deposits are determined by discounting future cash flows, which reflect the collectibility,
using the yield rate of government bonds for the remaining period.
Liabilities(1) Accounts payable—trade and Accounts payable—trade for franchised stores (2) Deposits received
The carrying values of accounts payable—trade and deposits received approximate fair value because of theirshort maturities.
(3) Lease obligations
The fair values of lease obligations are determined by discounting the cash flows related to the obligations at theGroup’s assumed corporate discount rate.
(4) Deposits received from franchisees and lessees
The fair values of deposits received from franchisees and lessees are determined by discounting future cash
flows based on the estimated repayment amount with the yield rate of government bonds during the remaining
period.
(Note 2) Financial instruments whose fair values cannot be reliably determined
Category
Carrying amount (millions of yen)
Unlisted equity securities
1,038
Investments in subsidiaries and affiliated
3,179
companies
Others461
Because financial instruments listed above do not have market prices and their fair values cannot be reliably
determined, they are not included in “(3) Investment securities.”

36

(TRANSLATION ONLY)(Accounting for income taxes)
Components of deferred tax assets and liabilities were as follows:(Millions of yen)Enterprise taxes payable
Accrued employees’ bonuses
Excess of depreciation
Excess of amortization of software
Allowance for employees’ retirement benefits
Allowance for doubtful accounts
Impairment loss
Tax loss carryforwards
Other
Subtotal of deferred tax assets
Less valuation allowances
Total deferred tax assets

1,132
968
10,022
566
5,602
673
3,123
7,095
2,782
31,966(9,044)22,922

Investments in subsidiaries and affiliated companies(paid-in capital decrease)
Total deferred tax liabilities(2,050)

Deferred tax assets-net

20,872(2,050)(Accounting for retirement benefits)
Summary of the retirement benefit plans:
The Company and domestic subsidiaries have defined benefit lump-sum severance indemnity plans. These companies
established a trust fund for its lump-sum severance indemnity plan. In addition, these companies have a defined
contribution plan for severance payments.
Projected benefit obligations
a. Projected benefit obligations
b. Plan assets
c. Projected benefit obligations in excess of plan assets (= a + b)
d. Unrecognized prior-service coste. Unrecognized actuarial differences
f. Allowance for employees’ retirement benefits (=c + d + e)

(Millions of yen)
(16,659)
5,578(11,081)
175
1,007(9,898)Net periodic benefit cost
(Millions of yen)a. Service cost
1,273
b. Interest cost
290
c. Amortization of prior-service cost
170
d. Amortization of actuarial differences
54
e. Net periodic benefit cost (= a + b +c + d)
1,789
f. Contribution to defined contribution plan289
g. Total (= e + f)
2,078
Note: Net periodic benefit cost in the consolidated subsidiary, which adopted the simplified method, isincluded in “a. Service cost.”
Basis of calculation of projected benefit obligations:a. Discount rate
1.2% (mainly)
b. Expected rate of return on plan assets
0%c. Allocation method of estimated total retirement Straight-line basis (a method to allocate
benefits
estimated total retirement benefits equallyto the respective periods in theemployee’s entire service period)(Per-Share data)
1. Net assets per share
2. Net income per share

2,267.17 yen
332.20 yen

37

(TRANSLATION ONLY)
Nonconsolidated Balance Sheets(Millions of yen)
Assets
Account item

Liabilities

As ofFebruary29, 2012

Account item

As ofFebruary28, 2013(for reference)

Current assets
Cash and bank deposits
Accounts receivable—due from
franchised stores
Marketable securities
Merchandise inventories

137,840
75,38918,064

Prepaid expenses
Accounts receivable—other
Deferred tax assets
Other
Allowance for doubtful accounts

7,070
26,212
3,122
2,245
(73)

Fixed assets

4,999
807

362,826

Property and store equipment
Buildings
Structures
Furniture, fixtures, andequipmentLand

162,075
86,686
11,126
11,884

Lease assets

43,787

Construction in progress
Intangible assets
Software
Software in progress
Goodwill
Other
Investments and other
Investments in securities
Investments in subsidiaries andaffiliated companies
Investments in affiliated private
limited company
Long-term loans receivable
Long-term loans receivable fromsubsidiaries and affiliates
Long-term prepaid expenses
Lease deposits

1,776
27,413
17,891
8,194
871
455
173,337460
27,288

6,815

As of
February29, 2012

As ofFebruary28, 2013(for reference)

137,523 Current liabilities
67,420Accounts payable—trade23,544
Accounts payable—trade for
franchised stores
Due to franchised stores－
763
Short-term loans payable tosubsidiaries and affiliates
7,761
Lease obligations
30,613
Accounts payable—other
3,097
Income taxes payable
4,409
Accrued expenses(85)
Deposits received
Accrued employees’ bonuses
395,096
Provision for use of points
granted187,341
Other
96,686 Long-term liabilities
12,514Long-term lease obligations
12,312
Allowance for employees’
retirement benefits
8,295
Allowance for retirement benefits
to executive officers
55,705
Deposits received from
franchisees and lessees
1,826
Asset retirement obligations
24,546
Other
20,934
Total liabilities
1,072
Net assets
2,076 Shareholders’ equity
463
Common stock
183,208
Capital surplus
2,620
Additional paid-in capital
28,140
Other capital surplus

205,548
1,443
71,283

1,006
15,8301,062
23,5508,545
13,902
14,2591,757
63,587
3,012
556

11,526
12,758
13,614
1,665
65,443
2,365
215

1,194
87,43530,6998,188

619
99,09741,026
9,108

289

298

35,71834,958

11,642897
283,840

12,999705
304,645

216,986
58,50647,707
47,696
10

228,068
58,50647,71847,696
21

112,400

123,437

3,006

9,203

32,075
9,907

34,5772,700

Legal reserve
Other retained earnings

727

727

7,551
78,4508,705
81,29950,00061,67350,00072,709Deferred tax assets
Other

14,475
1,502

15,845
1,275(1,627)(602)(1,593)(520)

Allowance for doubtful accounts(1,380)(1,159)General reserve
Earned surplus brought
forwardTreasury stock
Valuation and translation
adjustments
Net unrealized gain (loss) on
available-for-sale securities
Land revaluation difference
Stock acquisition rights
Total net assets
Total Liabilities and Total Net Assets

(35)

46

(567)
442
216,826
500,667(567)
427
227,974
532,619

Total Assets

500,667

532,619

Retained earnings

196,405
1,796
70,955

Note: Figures as of February 29, 2012, are included in the table above for comparative purposes only.

38

(TRANSLATION ONLY)
Nonconsolidated Statements of Income

Account item

From March 1, 2011 to
February 29, 2012

(Millions of yen)
From March 1, 2012 toFebruary 28, 2013

(for reference)

Operating revenues
Franchise commissions from franchised stores
Other
Net sales
Net sales
Total operating revenues
Cost of goods sold
Gross profit on sales
Operating gross profit
Selling, general, and administrative expenses
Operating income
Nonoperating income
Interest and dividend income
Penalty income
Other
Nonoperating expenses
Interest expense
Loss on cancellation of store lease contract
Other
Recurring profit
Extraordinary gains
Gain on sales of subsidiaries and affiliates’ stocks
Compensation income
Gain on extinguishment of tie-in shares
Other
Extraordinary losses
Loss on disposal of fixed assets
Loss on impairment of long-lived assets
Loss on disaster
Loss on adjustment for changes of accounting
standard for asset retirement obligations
Loss on valuation of investments in capital ofsubsidiaries and affiliates
Other
Income before income taxes
Income taxes – current
Income taxes – deferred
Net income

209,045
24,035(39,417)(28,035)(11,382)

233,080
39,417
272,498
28,035

221,442
26,645(34,665)(24,691)(9,974)244,462
188,199
56,263
837
44
756
850
579
361

2
－
－
94

1,638

1,791
56,110

97

1,164
258
678
907
523
542

202
71
38
10
1,547
2,382
－
－

－

1,813

21,216(2,545)

15,074
41,133
18,67022,462

34,665
282,752
24,691
258,061
198,730
59,331

1,888
2,764
3,229
6,823

369

248,087381
23,740(396)

Note: Figures from March 1, 2011 to February 29, 2012, are included in the table above for comparative purposes only.

39

2,101

1,973
59,459323

6,125
53,65823,34330,314

(TRANSLATION ONLY)
Nonconsolidated Statement of Changes in Net Assets(From March 1, 2012 to February 28, 2013)(Millions of yen)
Shareholders’ equity
Retained earnings
Other retained earnings
EarnedLegal
Generalsurplusreserve
reservebrought
forwardCapital surplus
Commonstock

Balance at the beginning of the current
periodChanges of items during the period
Dividends from surplus
Net income
Purchase of treasury stock – at cost
Disposal of treasury stock
Exercise of subscription rights to shares(delivery of treasury stock)
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Balance at the end of the current period

58,506–58,506

Additional
paid-in
capitalOther capitalsurplus47,696

10–
47,696

Total
capitalsurplus47,707727

50,000Total
retainedearnings

61,673

112,400(19,278)
30,314(19,278)
30,314

Treasury
stock

Total
shareholders’equity(1,627)

216,986

0

0

(7)
0

(19,278)
30,314
(7)
0

11

11

41

52

11
21

11
47,71833(1,593)

11,081
228,068

40

–
727

–
50,00011,036
72,70911,036
123,437

(TRANSLATION ONLY)(Millions of yen)
Valuation and translation adjustments
Net unrealized
gain (loss) on availablefor-sale securities
Balance at the beginning of the current
periodChanges of items during the period
Dividends from surplus
Net income
Purchase of treasury stock – at cost
Disposal of treasury stock
Exercise of subscription rights to shares(delivery of treasury stock)
Net changes of items other thanshareholders’ equity
Total changes of items during the period
Balance at the end of the current period

(35)

Land
revaluation difference

(567)

Total
valuation and translation
adjustments

(602)

Stock
acquisition rights

Total
net assets

442

216,826(19,278)
30,314
(7)
0
52

82
82
46

–
(567)

41

82

(15)

66

82
(520)

(15)
427

11,148
227,974

(Notes to the Nonconsolidated Financial Statements)(Significant Accounting Policies)
1. Valuation of Securities
Marketable securities and investments in securities:
Held-to-maturity debt securities: Carried at amortized cost (straight-line method)
Available-for-sale securities:
Securities whose market value is readily determinable: Recorded at market value with net unrealized gains andlosses as a separate component of net assets. The cost of securities sold is determined based on themoving-average method.
Other: Stated at cost determined by the moving-average method.
Investments in subsidiaries and affiliated companies:
Stated at cost determined by the moving-average method.
2. Valuation of Inventories
Merchandise inventories:
Inventories at cost being determined by the retail method (the book value in the nonconsolidated balance sheet iswritten down based on any decline in profitability) .
3. Depreciation
Property and store equipment (except for lease assets):
Depreciation is computed using the declining-balance method at rates based on estimated useful lives of the assets.
The ranges of useful lives are from 10 to 34 years for buildings and from five to eight years for furniture, fixtures,and equipment.
Intangible assets (except for leased assets):
Amortization of intangible assets is computed by the straight-line method.
Costs of software for internal use are amortized by the straight-line method over five years, which is the estimateduseful life.
Lease assets:
In terms of the depreciation method for leased assets related to finance leases that do not transfer ownership ofleased property, the Company applies the straight-line method using the lease term as the useful life and a residual
value of zero.
ASBJ Statement No.13 “Accounting Standard for Lease Transactions” requires that all finance lease transactions
be capitalized to recognize lease assets and lease obligations in the nonconsolidated balance sheet. However, the
ASBJ Statement No.13 permits leases that do not transfer ownership of the leased property to the lessee andwhose lease inception was before March 31, 2008, to be accounted for as operating lease transactions. The
Company applied the ASBJ Statement No.13 effective March 1, 2009 and continued to account for such leases as
operating lease transactions.
Long-term prepaid expenses:
Amortization of long-term prepaid expenses is computed by the straight-line method.
4. Accounting policies for important reserves
Allowance for Doubtful Accounts:
Allowance for doubtful accounts is provided at the amount of possible losses from uncollectible receivables basedon the actual rate of losses from bad debt for ordinary receivables, and on estimated recoverability for specificdoubtful receivables.
Accrued Employees’ Bonuses:
Accrued employees’ bonuses are provided for payments of employees’ bonuses based on the estimated amounts.
Provision for use of points granted:
The Company provides, to MY LAWSON POINT holders and LAWSON PASS holders when purchasing goods,
an entitlement to certain points that the holder can redeem for a discount on subsequent purchases from LAWSON
stores. Provision for points granted is recorded to state the liability at the amount that is expected to be used as of
the nonconsolidated balance sheet date.

42

Allowance for Employees’ Retirement Benefits:
Allowance for employees’ retirement benefits is provided at the amount calculated based on the projected benefit
obligations and plan assets at the nonconsolidated balance sheet date. Actuarial differences are amortized from thefollowing fiscal year on a straight-line basis over a certain period (10 years) within the average remaining service
period of employees at the time of their occurrence. Prior service cost is amortized, starting with the fiscal year
when it was incurred, on a straight-line basis over a certain period (10 years) within the average remaining service
period of employees.
Allowance for Retirement Benefits to Executive Officers:
Allowance for retirement benefits to executive officers of the Company is recorded as a liability at 100% of theamount that would be required if all corporate auditors and executive officers terminated their services with theCompany at the nonconsolidated balance sheet date.
5. Accounting for consumption tax
Consumption tax is excluded from income and expense.
(Changes in Method of Presentation)
1. In the “Current liabilities” section, “Accounts payable-trade for franchised stores” (¥70,955 million for the previous
fiscal year) were included in “Accounts payable-trade” before. From the standpoint of clarity, “Accounts payable-tradefor franchised stores” (¥71,283 million for the fiscal year under review) are separately presented from the fiscal year
under review.
2. In the “Current liabilities” section, “Consumption taxes payable” were separately presented before. Due to a decline infinancial materiality, “Consumption taxes payable” (¥484 million for the fiscal year under review) are included in“Other” from the fiscal year under review.
3. In the “Long-term liabilities” section, “Accumulated impairment loss on long-term leased assets” was separately
presented before. Due to a decline in financial materiality, “Accumulated impairment loss on long-term leased assets”(¥533 million for the fiscal year under review) is included in “Other” from the fiscal year under review.
4. In the “Nonoperating income” section, “Penalty income” (¥44 million for the previous fiscal year) was included in“Other” before. Due to an increase in financial materiality, “Penalty income” (¥258 million for the fiscal year underreview) is separately presented from the fiscal year under review.
5. In the “Nonoperating income” section, “Compensation income” was separately listed in the nonconsolidated statementof income before. Due to a decline in financial materiality, “Compensation income” (¥161 million for the fiscal year
under review) is included in “Other” from the fiscal year under review.
6. In the “Extraordinary gains” section, “Gain on sales of subsidiaries and affiliates’ stocks” (¥2 million for the previous
fiscal year) was included in “Other” before. Due to an increase in financial materiality, “Gain on sales of subsidiaries
and affiliates’ stocks” (¥202 million for the fiscal year under review) is separately presented from the fiscal year underreview.
7. In the “Extraordinary gains” section, “Gain on sales of fixed assets” was separately listed in the nonconsolidated
statement of income before. Due to a decline in financial materiality, “Gain on sales of fixed assets” (¥0 million for the
fiscal year under review) is included in “Other” from the fiscal year under review.
8. In the “Extraordinary gains” section, “Gain on reversal of subscription rights to shares” was separately listed in thenonconsolidated statement of income before. Due to a decline in financial materiality, “Gain on reversal of subscription
rights to shares” (¥10 million for the fiscal year under review) is included in “Other” from the fiscal year under review.
9. In the “Extraordinary losses” section, “Loss on sales of fixed assets” was separately listed in the nonconsolidated
statement of income before. Due to a decline in financial materiality, “Loss on sales of fixed assets” (¥36 million for the
fiscal year under review) is included in “Other” from the fiscal year under review.
(Additional information)
For the accounting changes and error corrections made after the beginning of the fiscal year under review, the Company
has adopted the “Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Statement No. 24 ofDecember 4, 2009) and the “Guidance on Accounting Standard for Accounting Changes and Error Corrections” (ASBJ
Guidance No. 24 of December 4, 2009).
43

(Notes to the Nonconsolidated Balance Sheet)
1. Accumulated depreciation of property and store equipment:¥186,065 million

2. Contingent Liabilities
The Company is contingently liable for guarantees for accounts payable-trade of Ninety-nine Plus, Inc.
¥1,076 million
The Company is contingently liable for guarantees for loans payable of Shanghai Hualian Lawson, Inc.
¥1,337 million
3. Due from/to subsidiaries and affiliated companies
Short-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¥7,120 million¥2,079 million¥192 million

4. 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 land revaluation difference.
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 the assessed value as stipulated in Article
2, Item 5 of the same ordinance.
Date of revaluation: February 28, 2002
The difference between book value and market value of the revalued land as of the nonconsolidated balance sheet datewas ¥307 million.
(Notes to the Nonconsolidated Statement of Income)1. Transactions with subsidiaries and affiliated companies
Operating transactions
Operating revenues
Goods purchased
Selling, general, and administrative expenses
Transactions other than operating transactions¥2,966 million¥1,759 million¥9,689 million¥596 million

2. Loss on impairment of long-lived assets
The Company generally identified each store as the smallest cash-generating unit.
The Company recognized an impairment loss on the following assets that declined in value mainly due to continuous
operating losses. The carrying amounts of those assets were written down to the recoverable amount and were recorded
as extraordinary losses.
Category by use
Location
AssetsMillions of yen
Buildings and structures
236
Tokyo
Furniture, fixtures, equipment, and others
Buildings and structures
Stores447
Osaka
Furniture, fixtures, equipment, and others
Buildings and structures
1,698
OthersFurniture, fixtures, equipment, and others
Total
–
–
2,382
By category of fixed assets(Millions of yen)
Buildings
1,398
Structures
159
Furniture, fixtures, and equipment
152
Lease assets
656
Other
15
The recoverable value of the impaired assets is calculated based on net selling price or value in use. Net selling priceof land was calculated based on the value appraised by the real estate appraiser or expected contract price, and thevalue in use was calculated by discounting estimated future cash flows to which a discount rate of 4.0% was applied.

44

(Notes to the Nonconsolidated Statement of Changes in Net assets)
Number of shares and kind of treasury stock
Common stock
406,853 shares(Accounting for income taxes)
Components of deferred tax assets and liabilities were described as follows:(Millions of yen)Enterprise taxes payable
Accrued employees’ bonuses
Loss on write-down of investments in affiliated companies
Excess of depreciation
Excess of amortization of software
Allowance for employees’ retirement benefits
Allowance for doubtful accounts
Impairment loss
Other
Subtotal of deferred tax assets
Less valuation allowances
Total deferred tax assets

1,050
898
2,357
9,068
509
5,294
340
2,960
1,877
24,357(3,364)20,992

Investments in subsidiaries and affiliated companies (paid-in
capital decrease)
Total deferred tax liabilities(2,050)(2,050)

Deferred tax assets-net

18,942(Accounting for retirement benefits)
Summary of the retirement benefit plans:
The Company has defined benefit lump-sum severance indemnity plans. The Company established a trust fund for its
lump-sum severance indemnity plan. In addition, the Company has a defined contribution plan for severance payments.
Projected benefit obligations
a. Projected benefit obligations
b. Plan assets
c. Projected benefit obligations in excess of plan assets (= a + b)
d. Unrecognized prior-service coste. Unrecognized actuarial differences
f. Allowance for employees’ retirement benefits (=c + d + e)

(Millions of yen)
(15,864)
5,578(10,285)175
1,001(9,108)Net periodic benefit costa. Service costb. Interest costc. Amortization of prior-service costd. Amortization of actuarial differences
e. Net periodic benefit cost (= a + b +c + d)
f. Contribution to defined contribution plang. Total (= e + f)

(Millions of yen)
1,004
286
175
45
1,511
289
1,801

Basis of calculation of projected benefit obligations:a. Discount rate
1.2%
b. Expected rate of return on plan assets
0%c. Allocation method of estimated total retirement
Straight-line basis (a method to allocate
benefits
estimated total retirement benefits equallyto the respective periods in the employee’s
entire service period)45

(Leases)Finance leases without ownership transfer of the leased property to the lessee and for which the lease inception was before
February 28, 2009:(1) Pro forma information as to acquisition cost, accumulated depreciation, accumulated impairment loss, and net
leased property(Millions of yen)
Accumulated
Accumulated
Acquisition cost
Net leased property
depreciation
impairment loss
Furniture, fixtures,
14,528
10,219649
3,660
and equipment(2) Obligations under finance leases(Millions of yen)
2,179
2,368
4,547
533

Due within one year
Due after one year
Total
Allowance for impairment loss on leased property(3) Lease payments, transfer from allowance for impairment loss on leased property, depreciation expense, interest
expense, and impairment loss:(Millions of yen)
Lease payments
2,330
Transfer from allowance for impairment loss on leased property
173
Depreciation expense
2,302
Interest expense
152
Impairment loss
69(4) Computation method of depreciation expense
Depreciation expense which is not reflected in the accompanying nonconsolidated statement of income is computedby the straight-line method assuming the lease period as the useful life and no residual value.
(5) Computation method of interest expense
The difference between the total lease contract amount and the acquisition cost is assumed to be the interest, andinterest expense is computed by the interest method.
(Related-Party Transactions)
Subsidiaries and affiliates
Attribute

Company name

Lawson(China)Holdings, Inc.

Business line orprofession

Overseasbusiness

Relationship

Equityownership

Business

percentage

relationshipDirectholding100.0%

Transaction

EndingDirector’s

Description ofamountbalanceposts heldtransactions(millions ofyen)concurrently

Investment in
China

Yes

Investment andcapital increase
Repayment of

Lawson ATM
Networks, Inc.
Subsidiary

Financial

Directservices-

holding

related business 76.5%

funds

Placement ofATMs inNo

LAWSON
storesBorrowing offunds
Borrowinginterest
Repayment of

Lawson HMVEntertainment,
Inc.

Entertainment/Home
conveniencebusiness

Directholding100.0%

funds

Sale of tickets
and software
for music and
video

Yes

Account item

Borrowing offunds
Borrowinginterest(millions of
yen)

7,660

1,800
3,900
4
6,000
11,500
4–
Short-term loans
payable–9,900

Accounts

3

payable–Short-term loans
payable–13,000Accounts
payable–Transaction 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.

46

2
–

Subsidiaries of an affiliated company of the Company
Attribute

Company nameBusiness line
or profession

EquityRelationshipownership

Business

percentage

relationshipTransaction

EndingDirector’s

Description ofamountbalanceposts heldtransactions(millions of

Account itemyen)concurrently(millions ofyen)Accounts
Subsidiaries ofan affiliatedcompany of
the Company

Mitsubishi

Sales of

Shokuhin Co., processed
Ltd.

foods

Reverseholds 0.3%
ownership in

Vendorthe company

No

Purchases forpayable-the Company-

trade

operated stores

11,561(purchases for(416,780)

929

Accounts
payable-the franchised

trade forstores)franchised

35,440storesTransaction conditions and the principles on the decision thereof:
The terms and conditions for purchase transactions are determined as the same as those for other general business
transactions, except that regarding the purchases made for the franchised stores, the Company acts as an alternative
payer, not as a direct party for the purchase.
(Per-Share data)
1. Net assets per share
2. Net income per share

2,277.90 yen
303.49 yen

The above figures and the number of shares in these balance sheets, statements of income, and related notes are rounded
down to the nearest unit and the ratios are rounded to the nearest whole number.

47

<Copy of the Independent Auditors’ Report>
INDEPENDENT AUDITORS' REPORT
April 3, 2013

To the Board of Directors of
Lawson, Inc.:
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant: Kinya Suzuki
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant: Junichi Fujii
Pursuant 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, 2013 of Lawson, Inc. (the “Company”) andconsolidated subsidiaries, and the related consolidated statements of income and changes in net assets for the fiscal
year from March 1, 2012 to February 28, 2013, and the related notes.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements inconformity with accounting principles generally accepted in Japan, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements arefree from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation andfair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Audit Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position of the Company and its consolidated subsidiaries as of February 28, 2013, and the results of theiroperations for the year then ended in conformity with accounting principles generally accepted in Japan.

48

Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure is required under
the provisions of the Certified Public Accountants Act.
The above represents a translation, for convenience only, of the original report issued in the Japanese language.

49

<Copy of the Independent Auditors’ Report>
INDEPENDENT AUDITORS' REPORT
April 3, 2013

To the Board of Directors of
Lawson, Inc.:
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant: Kinya Suzuki
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant: Junichi Fujii

Pursuant to the first item, second paragraph of Article 436 of the Companies Act, we have audited the financial
statements, namely, the balance sheet as of February 28, 2013 of Lawson, Inc. (the “Company”), and the related
statements of income and changes in net assets for the 38th fiscal year from March 1, 2012 to February 28, 2013, andthe related notes and the accompanying supplemental schedules.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements and theaccompanying supplemental schedules in conformity with accounting principles generally accepted in Japan, and forsuch internal control as management determines is necessary to enable the preparation of financial statements and theaccompanying supplemental schedules that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements and the accompanying supplemental
schedules based on our audit. We conducted our audit in accordance with auditing standards generally accepted inJapan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements and the accompanying supplemental schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements and the accompanying supplemental schedules. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements and the accompanying
supplemental schedules, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the financial statements and theaccompanying supplemental schedules 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 entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements and the accompanying
supplemental schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Audit Opinion
In our opinion, the financial statements and the accompanying supplemental schedules referred to above present fairly,
in all material respects, the financial position of the Company as of February 28, 2013, and the results of its
operations for the year then ended in conformity with accounting principles generally accepted in Japan.

50Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure is required under
the provisions of the Certified Public Accountants Act.
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 the attached financial
documents.

51

(TRANSLATION ONLY)<Copy of the Audit Report of the Board of Corporate Auditors>
AUDIT REPORTRegarding the execution of duties by the Directors for the 38th business term from March 1, 2012 to February 28,
2013, we have prepared this Audit Report, through due deliberations based on the audit reports prepared by each
Corporate Auditor, and hereby report as follows:
1. Auditing Methods Employed by the Corporate Auditors and Board of Corporate Auditors and Details of Such
Methods
We have established audit policies, audit programs and other guidelines for the current term, and received thereports from each Corporate Auditor regarding their execution of audits and results thereof, as well as reports fromthe Directors, other relevant personnel, and the Accounting Auditor regarding the execution of their duties, andasked for explanations as necessary.
Each Corporate Auditor, pursuant to the auditing standards of Corporate Auditors established by the Board of
Corporate Auditors, has followed the audit policies and audit programs for the current term, communicated with
the Directors, officers, internal audit department and other relevant employees, endeavored to collect informationand develop the audit environment, attended the Board of Directors meetings, the management meetings,
Compliance & Risk committee meetings, Internal Control over Financial Reporting committee meetings and thelike, and other important meetings, received reports from the Directors, officers, internal audit department andother relevant employees regarding the execution of their duties, asked for explanations whenever necessary,
reviewed important authorized documents and the like, and investigated the status of operations and assets at thehead office, branches, and other principal offices and stores.
In addition, pursuant to the audit items and audit methods regarding internal control system established by the
Board of the Corporate Auditors, we have monitored and verified the resolution of the Board of Directors,
described in business report, regarding the organization of the system as prescribed by item (vi) of paragraph 4,
Article 362 of the Companies Act and paragraph 1 and paragraph 3, Article 100 of the Ordinance for Enforcementof the Companies Act and the status of the development and operation of the system based on such resolution(Internal Control System), as the system necessary to ensure that the execution of the duties by the Directors
complies with laws and regulations and the Articles of Incorporation and other system necessary to ensure theproperness of operations of a Stock Company. In connection with internal control over financial reporting, we
received reports from the Directors and other relevant personnel, and Deloitte Touche Tohmatsu LLC regarding thestatus of evaluation and audit of such internal control respectively, and asked for explanations whenever necessary.
With respect to subsidiaries, we have communicated and exchanged information with the Directors, Corporate
Auditors and other relevant personnel of subsidiaries, requested the subsidiaries to report on their business where
necessary, and investigated their status of operations and assets. Based on the above methods, we have examined
the business report and supplementary schedules thereof for this business term.

52

Furthermore, we have monitored and verified whether Accounting Auditor maintained its independent position
and implemented appropriate audit, and we received reports from Accounting Auditor regarding the status of theexecution of its duties and, whenever necessary, asked for explanations. In addition, we have received the noticefrom the Accounting Auditor that “System for ensuring that the duties are performed properly” (matters set forth ineach 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 “consolidated financial statements(consolidated balance sheet, consolidated statement of income, consolidated statements of changes instockholder’s equity, and notes to consolidated financial statements)” and “non-consolidated financial statements(balance sheet, statement of income, non-consolidated statements of changes in stockholder’s equity, and notes tonon-consolidated financial statements) and supplementary schedules thereof” for this term.
2. Result of Audit(1) Result of Audit of Business Report and Other Relevant Documents
1.

We have found that business report and the supplementary schedules thereof fairly present the status of theCompany, in conformity with the applicable laws and regulations and the Articles of Incorporation.

2.

Regarding the execution of duties by the Directors, we have found no misconduct or material matter that
violates applicable laws and regulations or the Articles of Incorporation.

3.

We have found that the content of the resolution of the Board of Directors regarding the Internal Control
System is adequate. In addition, we have found no matters on which to give remarks in regard to therelevant description in the business report and execution of duties by the Directors concerning Internal
Control System.

(2) Result of Audit of Consolidated Financial Statements
We have found that methods and the result of the audit by the Accounting Auditor, Deloitte
Touche Tohmatsu LLC, are adequate.
(3) Result of Audit of Non-consolidated Financial Statements and Supplementary Schedules thereof.
We have found that methods and the result of the audit by the Accounting Auditor, Deloitte
Touche Tohmatsu LLC, are adequate.
April 9, 2013
The Board of Corporate Auditors of Lawson, Inc.
Standing Corporate Auditor Atsuhiko Seki
Standing Corporate Auditor Shinichi Hokari(Outside Corporate Auditor)
Corporate Auditor

Tetsuo Ozawa(Outside Corporate Auditor)
Corporate Auditor(Outside Corporate Auditor)

53

Eiko Tsujiyama

(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 with the aim of achieving an ROE of 20% from a medium-term perspective. In addition, oneof our key measures for shareholder returns has been the continuous and steady payment of dividends while securing
internal reserves necessary for future business development during the course of sustainable growth of the LAWSONGroup. Based on this policy, we have been increasing dividends on a continuous basis since the initial listing of theCompany in July 2000.
It is our policy to continue to work actively 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:¥100 per share of the Company’s common stock to a total of ¥9,989,314,700
Note: The annual dividend per share will be ¥200, an increase of ¥20 from the previous period, including an interim
dividend per share of ¥100.
(2) Effective date of the dividends from surplus:
Wednesday, May 22, 2013

54

(TRANSLATION ONLY)[Reference: Changes in Dividends and Consolidated Dividend Payment Ratio]
Year-end dividend per share (Yen)Interim dividend per share (Yen)Dividend per share (Yen)(Plan)(Plan)

33rd Term

34th Term

35th Term

36th Term

37th Term

38th Term(Year ended
Feb. 2008)(Year ended
Feb. 2009)(Year ended
Feb. 2010)(Year ended
Feb. 2011)(Year ended
Feb. 2012)(Year ended
Feb. 2013)

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

Consolidated dividend payment ratio (%)

Consolidated dividend payment ratio (%)

33rd Term

34th Term

35th Term

36th Term

37th Term

38th Term(Current Period)

¥55

¥80

¥80

¥85

¥87

¥100

¥55

¥80

¥80

¥85

¥93

(Plan) ¥100

¥110

¥160

¥160

¥170

¥180

(Plan) ¥200

¥214.69¥240.10¥126.67¥254.61¥249.17¥332.20

51.2%

66.6%

126.3%

66.8%

72.2%

(Plan) 60.2%

11.6%

12.5%

6.5%

12.8%

12.0%

15.2%

(Notes)
1. In the 37th term, ROE (consolidated return on equity) declined compared to the previous period as a result of an
extraordinary loss of ¥11,753 million, which included loss due to the Great East Japan Earthquake and loss on
adjustment for changes in accounting standards for asset retirement obligations. ROE excluding these extraordinary
factors is 15.1%.
2. The amounts of the 34th and 35th terms are the retroactively adjusted amounts reflecting the loss on the prior period
adjustment of ¥1, 936 million recognized in the 35th term.
3. Consolidated dividend payment ratio is calculated based on annual dividend per share divided by consolidated net
income per share.

55

(TRANSLATION ONLY)
Proposal No. 2: Partial Amendment to the Articles of Incorporation
The Company proposes that the Articles of Incorporation be partially amended as follows.
1. Reasons for amendment
Based on the LAWSON Group’s corporate philosophy of “Creating Happiness and Harmony in Our
Communities,” the Company primarily focuses on the business of the franchise headquarters of convenience
stores. Reflecting increasing competition across industries and diversification of customer needs, we haveinitiated SCM (supply chain management)* reforms with the aim of becoming a business operator that combines
manufacturing and retail, covering upstream to downstream commercial distribution. The Group has also focused
its efforts on its home convenience business, a service providing our customers with convenience as if they were
shopping at a convenience store while staying home. For these purposes, we will strive to further improvecustomer satisfaction by operating distribution centers that are exclusive to our group, and thereby establishing anefficient logistics system. Accordingly, we propose that “Warehousing business” be added to Article 2 (Purpose of
Incorporation), paragraph 11 of the current Articles of Incorporation.
2. Particulars of amendments
Particulars of proposed amendments are described below.
(Suggested amendments are underlined in the text.)
Proposed Amendments
ARTICLE 2: Purpose of Incorporation
The Company shall be organized for the purpose ofoperating the following businesses:
1.
(No change)
10.
11. Transportation business and warehousing business12.
(No change)
23.

～

～

Current Provision of the Articles of Incorporation
ARTICLE 2: Purpose of Incorporation
The Company shall be organized for the purpose ofoperating the following businesses:
1.
(Omitted)10.
11. Transportation business
12.
(Omitted)
23.

～

～

*SCM: A business management method to improve the efficiency of and optimize all processes through comprehensive process management, from procurement tosales.

56

(TRANSLATION ONLY)
Proposal No. 3: Election of One (1) Director
Mr. Toru Moriyama, Director, is to resign at the conclusion of this 38th Ordinary General Meeting of Shareholders.
Accordingly, we propose that one (1) director be elected.
The nominee for director is as follows.
Name
Brief Personal History, Position, Assignment and Important
Number of the(Date of birth)
Concurrent Positions
Company’s Shares
Held
April 1984
Mitsubishi Corporation[Candidate for New Director][Candidate for Outside Director]
April 2008
General Manager, Grain Unit, Foods (Commodity)
Div., Mitsubishi Corporation
June 2010
Outside Auditor, Kadoya Sesami Mills Incorporated(Current position)
April 2011
Deputy General Manager, Living Essentials GroupCEO Office, Mitsubishi Corporation
April 2012
General Manager, Global Consumer Business
Nil
Yutaka Kyoya
Development Unit, Mitsubishi Corporation(January 7, 1962)
April 2013
Division COO, Foods (Commodity) Div., Mitsubishi
Corporation (Current position)[Reason for Selection of the Nominee Above for Outside Director, and Reason for Determining that He Is Capable of
Executing the Duties of Outside Director Properly]
Mr. Yutaka Kyoya has been nominated as a candidate because he possesses a deep knowledge of consumer goods
industries centering on food through his work at Mitsubishi Corporation, one of the Company’s important business
partners. The Company expects him to provide actively his opinions and suggestions to its management at the Boardof Directors, etc., as well as to apply his experiences to the supervision of the Company’s management.
[Term of Outside Director of LAWSON, INC.]
There are no relevant items, as Mr. Kyoya is a candidate for a new Outside Director position.
[Particular conflicts of interest between the Candidate and LAWSON, INC.]
There are no particular conflicts of interest between the Candidate and LAWSON, INC.
[Attendance at Board of Directors’ Meetings]
There are no relevant items, as Mr. Kyoya is a candidate for a new Outside Director position.
Notes:
1. Pursuant to Article 24 of the current Articles of Incorporation, the Company is to enter into an agreement with Mr.
Yutaka Kyoya to limit his liability with regard to the damages set out under Article 423, Paragraph 1 of theCompanies Act, to within the sum of the amounts set forth in the relevant laws and regulations as far as he has beenin good faith and without gross negligence in executing the duties as an outside director that were ascribed as thecause of the claim for damage concerned.
2. The nominee, Mr. Yutaka Kyoya, has been selected as a substitute for Mr. Toru Moriyama. Accordingly, his term ofoffice will expire at the expiration of his predecessor’s term of office.
3. The nominees’ Brief Personal History, Position, Assignment and Important Concurrent Positions are as of April 10,
2013.
4. The number of directors of the Company, if this proposal is approved and resolved, will be seven after the Ordinary
General Meeting of Shareholders, including four outside directors. Of these four outside directors, two are
independent directors/auditors (‘dokuritsu yakuin’ under the respective rules of the Tokyo Stock Exchange and the
Osaka Securities Exchange).

57

(TRANSLATION ONLY)
Proposal No. 4: Election of One (1) Corporate Auditor
The term of office of Mr. Atsuhiko Seki, Corporate Auditor, expires at the conclusion of this 38th Ordinary General Meetingof Shareholders. Accordingly, we propose that one (1) corporate auditor be elected.
The Board of Corporate Auditors has given prior consent to this proposal.
The nominee for corporate auditor is as follows.
Name
Brief Personal History, Position, and Important Concurrent Positions Number of the(Date of Birth)Company's
Shares Held
April 1977
Joined The Daiei, Inc.
July 1999

Joined LAWSON, INC.

April 2000

General Manager, General Affairs Dept.,
Office of Business Planning, LAWSON,
INC.
Deputy General Manager, General Affairs
Office, LAWSON, INC.
General Manager, General Affairs Office,
LAWSON, INC.
Executive Officer (Other), General Manager,
Line Support Division, LAWSON, INC.
Corporate Auditors Office, LAWSON, INC.
(Current position)

January 2002
Atsuhiko Seki
(October 4, 1954)

March 2004
September 2007
May 2010

1,200

Notes:
1. There are no particular conflicts of interest between the Candidate and LAWSON, INC.
2. The nominees’ Brief Personal History, Position, Assignment and Important Concurrent Positions are as of April 10,
2013.
3. The number of corporate auditors of the Company, if this proposal is approved and resolved, will be four after theOrdinary General Meeting of Shareholders, including three outside corporate auditors. All three of these outside
corporate auditors are independent directors/auditors (‘dokuritsu yakuin’ under the respective rules of the Tokyo
Stock Exchange and the Osaka Securities Exchange).

58