(TRANSLATION ONLY)
Securities Code: 2651
May 1, 2024
Commencement of electronic provision: April 25, 2024
To All Shareholders with Voting Rights
Sadanobu Takemasu
President, Representative Director
Lawson, Inc.
11-2, Osaki 1-chome, Shinagawa-ku, TokyoNOTICE OF THE 49th ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are cordially notified that the 49th Ordinary General Meeting of Shareholders will be held as follows.
In convening the Ordinary General Meeting of Shareholders, the Company takes measures to provide the materials forthe meeting electronically and has posted the “Notice of the 49th Ordinary General Meeting of Shareholders” on thefollowing website providing the agenda materials for the General Meeting of Shareholders and other related materials
electronically.
Lawson Website
https://www.lawson.co.jp/company/ir/event/meeting/Electronic agenda materials for the General Meeting of Shareholders and other related materials are posted on thewebsite of the Tokyo Stock Exchange (TSE) as well. Please access the following TSE website (Listed Company
Search), enter the issue name (company name) or securities code in the search field, and select “Basic Information (基本情報)” and then “Documents for Public Inspection/PR Information (縦覧書類／ＰＲ情報).”TSE website (Listed Company Search)https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show

If you do not attend the meeting, please exercise your voting rights using either of the methods described below after
examining REFERENCE DOCUMENTS FOR THE GENERAL MEETING OF SHAREHOLDERS attached hereinor posted on the website specified above.

[Voting by Electronic Means (Internet, etc.)]
Please exercise your voting rights by 5:45 p.m. on Monday, May 20, 2024, after reading the attached document“Exercising Voting Rights via the Internet, etc.”[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, 2024. If neither approvalnor disapproval is indicated for any matter on the Voting Rights Exercise Form, it will be treated as anindication of approval.

1. Date and Time: 10:00 a.m., Tuesday, May 21, 2024
2. Venue: Hall C, Tokyo International Forum, 5-1 Marunouchi 3-chome, Chiyoda-ku, Tokyo
3. Objectives of the Meeting
Reports:
The Business Report, the Consolidated Financial Statements and the Nonconsolidated Financial Statements for the49th Fiscal Term (from March 1, 2023, to February 29, 2024), and the related Audit Reports
Matters to Be Resolved:
Proposal No. 1: Election of Five (5) Directors
Proposal No. 2: Election of Two (2) Audit and Supervisory Board Members

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•

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

2(TRANSLATION ONLY)REFERENCE DOCUMENT FOR THE GENERAL MEETING OF SHAREHOLDERS
Proposal No. 1: Election of Five (5) Directors
The terms of office of all five (5) Directors expire at the conclusion of this 49th Ordinary General Meeting of
Shareholders. Accordingly, we propose the election of five (5) Directors.
The Company has endeavored to ensure management transparency and fairness, and has a rule to appoint
Independent Directors equaling one-third or more of the Board’s composition. If this proposal is approved and passed,
there will be five (5) Directors of the Company after the meeting of shareholders, of which two (2) will be Outside
Directors. All of the Outside Directors are “Independent Directors/Audit and Supervisory Board Members.” Therefore,
we propose that you continue to elect Independent Directors equaling one-third or more of the Board’s composition.
The candidates for Directors are as stated in the following table. Please refer to pages 4 to 8 for the brief personal
histories of the indicated candidates.
Furthermore, please refer to page 13 for the policy and procedures of the Company’s Board of Directors fornominating candidates for Directors.

Position at the Company, etc.

Board ofDirectors’
meeting
attendance
rate

No.

Name

1

Sadanobu Takemasu

President and CEO,
Representative Director

Reappointment

100%

2

Masayuki Itonaga

Executive Managing
Officer, Member of the
Board

Reappointment

100%

3

Miki Iwamura

Member of the Board

Reappointment, outside,
independent

93.3%

4

Satoko Suzuki

Member of the Board

Reappointment, outside,
independent

100%

5

Shota Kondo—

New appointment—

Notes:
1. Ms. Miki Iwamura’s legal name is Miki Oku.
2. Positions at the Company, etc., are as of April 18, 2024.

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Brief Personal History, Position, Assignment and Important
Concurrent Positions

No.
1

April 1993

Joined Mitsubishi Corporation

June 2010

Executive Assistant to President and Chief Executive Officer,
Corporate Administration Department and Corporate Strategy
and Planning Department, Mitsubishi Corporation
Senior Executive Vice President, Representative Director,
Division Director of Corporate Sales Division ― Lawson
Mart, Lawson, Inc.

May 2014

March 2016

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

■Number of the Company’s
shares held:
12,800June 2016

President and COO, Representative Director, Lawson, Inc.

March 2017

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

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

September 2017

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

February 2019

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

March 2019

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

March 2020

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

March 2021

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

Sadanobu Takemasu(August 12, 1969)
Reappointment■Years in office 10 years(as of the conclusion of
the meeting ofshareholders)

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

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

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(TRANSLATION ONLY)No.
2

Brief Personal History, Position, Assignment and Important
Concurrent Positions
April 1990

Joined Mitsubishi Corporation

March 1995

Trade Finance Team, International Finance Department,
Mitsubishi Corporation

August 1997

Accounting Department, Kansai Branch, Mitsubishi
Corporation
Seconded to Bridgestone Sales (Thailand) Co., Ltd. in
Thailandas Financial and Administrative Director
Assistant General Manager, Administration Department,
Living Essentials Group, Mitsubishi Corporation

December 2000

Masayuki
Itonaga

January 2006
April 2012

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

Reappointment

March 2016

Deputy General Manager, Administration Department,
Metals Group, Mitsubishi Corporation■Number of theCompany’s shares held:
100

March 2018

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

April 2022

Financial Administration Division, Lawson, Inc.

■Attendance at Board of
Directors’ meetings
14 out of 14 (100%)

May 2022

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

March 2023

Executive Managing Officer, Member of the Board and CFO,
Lawson, Inc. (Current position)(February 7, 1967)■Years in office

Two years (as of theconclusion of themeeting ofshareholders)

Reasons for nomination as Director
Mr. Masayuki Itonaga is a Director, Executive Managing Officer, Member of theBoard and CFO of the Company and is responsible for the Company's finance andaccounting, business risk management, investor relations (IR), and purchasing
management. He has been nominated as a candidate for Director as we would liketo continue to benefit from his management and supervision of the Company byleveraging his experience.

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

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Brief Personal History, Position, Assignment and Important
Concurrent Positions

No.

3

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

1,100■Attendance at Board of
Directors’ meetings
14 out of 15 (93.3%)■Years in office

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

Joined Dentsu Inc. (currently Dentsu Group Inc.)

October 1995

Joined Booz Allen Hamilton Inc.

October 2001

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

July 2003

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

July 2007

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

May 2015

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

May 2018

Outside Director, Lawson, Inc. (Current position)

May 2019

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

April 2021

Executive Vice President, University of Tokyo (Current
position)

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

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

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Brief Personal History, Position, Assignment and Important
Concurrent Positions

No.

4

April 1999

Joined Nihon L’Oreal KK

September 2006

Joined Boston Consulting Group K.K.

September 2011

Lecturer, Graduate School of Management, Kyoto
University

April 2016

Associate Professor, Graduate School of Management,
Kyoto University

April 2017

Associate Professor, The School of International Corporate
Strategy at the Graduate School of Business Administration,
Hitotsubashi University [Associate Professor, School ofInternatinoal Corporate Strategy, Hitotsubashi University
Business School]

May 2020

Outside Director, Lawson, Inc. (Current position)

June 2022

Outside Director, Stanley Electric Co., Ltd. (Current
position)

September 2023

Professor, School of Internatinoal Corporate Strategy,
Hitotsubashi University Business School (Current position)

Satoko Suzuki(November17, 1977)
Reappointment, outside,
independent■Number of the Company’s
shares held:
600■Attendance at Board of
Directors’ meetings
15 out of 15 (100%)■Years in office

Four years (as of theconclusion of the meetingof shareholders)

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

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

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Brief Personal History, Position, Assignment and Important
Concurrent Positions

No.

5

April 1991

Joined Mitsubishi Corporation
Seconded to Diamond Gas Holdings Sendirian Berhad(Kuala Lumpur)
Seconded to Malaysia LNG Tiga Sdn. Bhd. (Kuala Lumpur)

April 1996
August 2000
August 2002

Australia Project Unit, Natural Gas Business Div.,
Mitsubishi Corporation

September 2006

Energy Business Group CEO Office, Mitsubishi Corporation

Shota Kondo

April 2009

Corporate Planning Dept., Mitsubishi Corporation(September 27, 1967)

May 2013

General Manager, Russia Business Dept., Natural Gas
Business Div., Mitsubishi Corporation

April 2016

General Manager, Shale Gas Business Dept., Natural Gas
Business Div., Mitsubishi Corporation

April 2017

General Manager, Canada Oil & Gas Business Dept.,
Energy Resources Div. B, Mitsubishi Corporation

April 2019

General Manager, Houston Branch, Mitsubishi Corporation(Americas)(Concurrently) General Manager, Houston Branch,
Mitsubishi International Corporation

April 2020

General Manager, Natural Gas Group CEO Office,Mitsubishi Corporation

April 2021

Senior Vice President, General Manager, Natural Gas GroupCEO Office, Mitsubishi Corporation

April 2022

Senior Vice President, General Manager, Corporate Strategy& Planning Dept., Mitsubishi Corporation

April 2024

Executive Vice President, Group CEO, Smart Life Creation
Group, Mitsubishi Corporation (Current position)

New appointment■Number of the Company’s
shares held:—

Reasons for nomination as Director
Mr. Shota Kondo has been nominated as a candidate for Director, as he has a wealthof knowledge on businesses in the energy field, as well as on corporate managementin general including management strategy, through his duties at Mitsubishi
Corporation, the parent company of Lawson, Inc., and his secondment to overseas
subsidiaries and investees of Mitsubishi Corporation. We would like to benefit fromhis supervision of the Company’s management by leveraging his experience.

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

Notes:
1. In accordance with Article 24 of the current Articles of Incorporation, Lawson, Inc. has concluded liability
limitation agreements with Ms. Miki Iwamura and Ms. Satoko Suzuki. Under the liability limitation agreement
concluded with the Company, Directors (excluding those who are executive directors, etc.) assume liability fordamages specified in Article 423, Paragraph 1 of the Companies Act within a limit not exceeding the amountstipulated by laws and regulations, provided that they have performed duties which resulted in a cause of suchliability in good faith without gross negligence. The Company plans to enter into a similar liability limitationagreement with Mr. Shota Kondo upon his election and assumption of office as a Director.
2. The Company has entered into indemnity agreements as prescribed under Article 430-2, Paragraph 1 of theCompanies Act with all of its Directors and Audit and Supervisory Board Members, whereby the Company shallindemnify the expenses set forth in item (i) of the said Paragraph and the losses set forth in item (ii) of the saidParagraph within the limits prescribed by laws and regulations. The Company plans to enter into a similar
indemnity agreement with Mr. Shota Kondo upon his election and assumption of office as a Director.
3. The Company has concluded corporate officer liability insurance (D&O insurance) contract designating its
Directors and Audit and Supervisory Board Members as the insured. The insurance contract covers damages suchas indemnities and contentious expenses based on the legal liability for damages incurred by the insured due to8

(TRANSLATION ONLY)

4.

actions taken by the insured as an officer of the Company. If each of the candidates is elected and assumes office
as a Director, all of such Directors will be insured under the said insurance contract. The term of the insurance
contract is one (1) year, and it is scheduled to be renewed by resolution of the Board of Directors before theexpiration of the term.
The information in nominees’ Brief Personal Histories, Positions, Assignments and Important Concurrent Positions iscurrent as of April 18, 2024.

9

(TRANSLATION ONLY)
Proposal No. 2: Election of Two (2) Audit and Supervisory Board Members
The terms of office of Shuichi Imagawa, Audit and Supervisory Board Member, and Keiko Yoshida, Audit andSupervisory Board Member, expire at the conclusion of this 49th Ordinary General Meeting of Shareholders.
Accordingly, we propose that you elect two (2) Audit and Supervisory Board Members.
The consent of the Audit and Supervisory Board has been obtained for this proposal.
The candidates for Audit and Supervisory Board Members are as stated below.
Furthermore, please refer to page 13 for the policy and procedures of the Company’s Board of Directors fornominating candidates for Audit and Supervisory Board Members.

Brief Personal History, Position and Important Concurrent
PositionsNo.
1

Shuichi Imagawa

December 1984

Joined Lawson West Japan Inc. (currently Lawson, Inc.)

January 2002

General Manager, Product Support Department, Product andLogistics Division, Lawson, Inc.

September 2007

Director and Senior Vice President, and Branch Manager of
Lawson Kinki, Lawson, Inc.

March 2009

Senior Vice President and Marketing Group Leader, Lawson,
Inc.

March 2013

Executive Vice President, and COO of CVS Group, Lawson,Inc.

May 2013

Executive Vice President, and Vice President of CVS
Company, Lawson, Inc.

March 2015

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

March 2017

Executive Managing Officer ―Compliance and Risk
Management, and Human Resources, Lawson, Inc.

May 2020

Audit and Supervisory Board Member (full-time), Lawson,
Inc. (Current position)(September 4, 1958)
Reappointment■Number of the Company’s
shares held:

5,694■Attendance at Board of
Directors’ meetings
15 out of 15 (100%)■Attendance at Audit &Supervisory Board
meetings
17 out of 17 (100%)■Years in office
Four years (as of theconclusion of the meetingof shareholders)

Reasons for nomination as Audit and Supervisory Board Member
Mr. Shuichi Imagawa has been nominated as a candidate for Audit and Supervisory
Board Member, as he has been responsible for compliance and risk management aswell as human resources strategy of the Lawson Group as an officer in charge ofcompliance and risk management and human resources after serving as manager incharge of the Store Operation Division, Product and Logistics Division, branchmanager, vice president of CVS Company in Japan and then division director of theSales Strategy Division at Lawson, Inc. While contributing to compliance and risk
management of the Lawson Group, he also has considerable expertise in convenience
store business and franchise business, and has been appropriately auditing theexecution of duties of directors. He is therefore expected to continue to sufficiently
fulfill the role of an Audit and Supervisory Board Member.

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

10

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Brief Personal History, Position and Important Concurrent
PositionsNo.
2November 1978

Keiko Yoshida(January 26, 1954)

April 1982

Joined Showa Audit Corporation (currently Ernst & Young
ShinNihon LLC)
Registered as Certified Public Accountant

December 1992

Registered as Certified Public Tax Accountant

May 1993

Established Shiba Kaikei Jimusho as Representative (Current
position)

November 2004

Outside Director, Passlogy Co., Ltd. (Current position)

June 2015

Outside Director, YOROZU Corporation (audit andsupervisory committee member)

April 2017

Professor, Faculty of Economics, Teikyo University

May 2020

Outside Audit and Supervisory Board Member, Lawson, Inc.
(Current position)

Reappointment, outside,
independent■Number of the Company’s
shares held:

400■Attendance at Board of
Directors’ meetings
15 out of 15 (100%)■Attendance at Audit &Supervisory Board
meetings
17 out of 17 (100%)■Years in office
Four years (as of theconclusion of the meetingof shareholders)

Reasons for nomination as Outside Audit and Supervisory Board
Member
Ms. Keiko Yoshida has been nominated as a candidate for Outside Audit andSupervisory Board Member, as she has considerable tax, accounting and management
knowledge as a certified public accountant and a representative of an accounting
office, and has been appropriately auditing the execution of duties of directors. She istherefore expected to continue to sufficiently fulfill the role of an Audit andSupervisory Board Member.
Ms. Keiko Yoshida serves as a member of the Company’s Nomination andCompensation Advisory Committee, which consists exclusively of non-executive
directors and part-time outside Audit and Supervisory Board members. She has beenregistered as an Independent Director/Audit and Supervisory Board Member with theTokyo Stock Exchange, Inc., pursuant to the rules specified by the exchange.

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

1.

2.

3.

4.

In accordance with Article 32 of the current Articles of Incorporation, Lawson, Inc. has concluded liability
limitation agreements with Mr. Shuichi Imagawa and Ms. Keiko Yoshida. Under the liability limitationagreement concluded with the Company, Audit and Supervisory Board Members assume liability for damages
specified in Article 423, Paragraph 1 of the Companies Act within a limit not exceeding the amount stipulated bylaws and regulations, provided that they have performed their duties which resulted in a cause of such liability ingood faith without gross negligence.
The Company has entered into indemnity agreements as prescribed under Article 430-2, Paragraph 1 of theCompanies Act with all of its Directors and Audit and Supervisory Board Members, whereby the Company shallindemnify the expenses set forth in item (i) of the said Paragraph and the losses set forth in item (ii) of the saidParagraph within the limits prescribed by laws and regulations.
The Company has concluded corporate officer liability insurance (D&O insurance) contract designating its
Directors and Audit and Supervisory Board Members as the insured. The insurance contract covers damages suchas indemnities and contentious expenses based on the legal liability for damages incurred by the insured due toactions taken by the insured as an officer of the Company. If each of the candidates is elected and assumes office
as an Audit and Supervisory Board Member, all of such Audit and Supervisory Board Members will be insured
under the said insurance contract. The term of the insurance contract is one (1) year, and it is scheduled to be
renewed by resolution of the Board of Directors before the expiration of the term.
The information in nominees’ Brief Personal Histories, Positions and Important Concurrent Positions is current
as of April 18, 2024.

11

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Reference: Proposed management system following the approvals of Proposal Nos. 1 and 2
Main areas of experience and expertise
Name

Sadanobu
Takemasu
Masayuki
Itonaga

PositionNew
appointment /reappointment

President andCEO,
Reappointment
Representative
Director
Member of theBoard,
Reappointment
Executive
Managing Officer

GenderNomination andOutsideCompensation Years inindepende
Corporate
Advisory
officent officer
management
Committee

Male

10

●

Male

2

●
●

Miki
IwamuraSatokoSuzukiMember of the
Board

Reappointment

Female○○6

Member of the
Board

Reappointment

Female○○4

Shota Kondo

Member of the
Board

New
appointment

Male

○

－

Audit andSupervisory Board－
Jun Miyazaki Member (fulltime)
Audit andShuichiSupervisory Board
Reappointment
Member(fullImagawa
time)
Audit and－
Yuko Gomi Supervisory Board
MemberAudit and
Keiko
Supervisory Board Reappointment
YoshidaMemberAudit and－
Yuko Miyata Supervisory Board
MemberCorporatefinance /accounting

Legal affairs/
compliance andriskMarketing

IT/DX

Globalexperience

●

●

●

●

Franchise orretail business

●

●
●

●

●

●

●

●

●

●

●

Male

3

●

●

●

Male

4

●

●

●

●

Female○○5Female○○4

Female

○

○

1

●
●

●

●

●

Note:
Members of the Board with titles and members of the Nomination and Compensation Advisory Committee will be determined at the Board of Directors’ meeting
after the General Meeting of Shareholders, while Audit and Supervisory Board Member (full-time) will be determined at the Audit and Supervisory Board
meeting after the General Meeting of Shareholders.
.

12

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

1.

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

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

13

(TRANSLATION ONLY)

BUSINESS REPORT(March 1, 2023 through February 29, 2024)
I. CURRENT STATUS OF THE CORPORATE GROUP
1. Summary of Operations(1) Business Developments and Results of Operations
During the fiscal year under review, or fiscal 2023 ended February 29, 2024, we made concerted Groupwide efforts to realize the “Lawson Group Challenge 2025” medium-term management vision, while society
shifted toward a post-COVID world driven primarily by the downgrade in the categorization of COVID-19 toClass 5, which includes seasonal flu. Specifically, we undertook various measures under our Lawson Group
Sweeping Transformation Executive Committee, which was launched in September 2020, and the whole
Lawson Group collectively endeavored to resolve medium- to long-term issues for sustainable growth, acquire
new revenue opportunities, foster job satisfaction, and introduced a range of LGBTQ initiatives aimed atcreating a workplace environment and system that maximizes the full potential of diverse human resources and
we received the Gold rating in the PRIDE Index 2023. *1 Focusing on community, individual customers, andindividual stores, we expanded a company system in eight areas across Japan and transferred authority andfunctions from the headquarters to the frontline stores with the aim of facilitating our organizational structure
to more vigorously pursue the creation of customer value at locations that are in close proximity to ourcustomers. We have undertaken various initiatives under this new structure.
*1 An assessment index established in 2016 by general incorporated association “work with Pride” with theaim of evaluating workplace initiatives to promote the inclusion of LGBTQ+ and other sexual minority
employees.
As a result, for fiscal 2023 on a consolidated basis, gross operating revenue increased to 1,087,964 million
yen (up 8.8% from previous fiscal year) and profit before tax increased to 77,292 million yen (up 64.0% fromprevious fiscal year). Profit attributable to owners of parent was 52,148 million yen (up 75.5% from previous
fiscal year).
We also focused on improving our group-wide internal control system and addressing operating risks basedon the 2023 Basic Policy for Improvement of Internal Control Systems. We will continue promoting internal
control going forward.
Operating results by business segment were as follows.
(Domestic Convenience Store Business)
During the fiscal year under review, a general increasing trend was seen in the movement of people. Against
this backdrop, each area company reinforced their sales floors with a particular focus on the scope ofmerchandise assortment and the quantity of inventory by building on the foundation established by the Lawson
Group Sweeping Transformation Executive Committee, which has been proceeding with store renovations andexpanding the merchandise assortment of frozen foods and other daily necessities. As of February 29, 2024,
12,712 stores have introduced MUJI products, which began full-scale introduction in 2022. In response to the2024 logistics problem and reduction of CO2 emissions, we have been progressively changing the number of
shipments to stores of chilled and temperature-controlled products from three to two daily deliveries since
December 2023. Also, as we work our way toward 2025, our 50th anniversary year, we continue to expand
HAPPY LAWSON PROJECT! with the aim of creating “hubs of refreshment in every community,” andpromoted measures to fulfill the three promises of our business policy— “Superior taste,” “Human kindness,”and “Environmental (Machi) friendliness”—in an effort to operate LAWSON stores endorsed by all ourcustomers.
In addition to further strengthening our distinctive products that focus on taste and health, we are also
working to provide heartfelt customer service in our stores, and we are continuing with our environmentallyfriendly measures such as reducing food loss, plastic usage, and CO 2 emissions.
[Store Operations]
In store operations, we continued to focus on reinforcing adherence to the Three Essential Practices, whichemphasizes (1) serving customers courteously; (2) offering a merchandise assortment focused on basic itemswith high demand; and (3) keeping our stores and communities clean. In our efforts to increase sales, we also
focused on expanding our merchandise assortment to respond to changes in customer lifestyles and values.
Furthermore, we kept up our initiatives to increase the profitability of franchise stores, including helping themstreamline their store operation and control costs associated with food waste and utility expenses.

14

(TRANSLATION ONLY)[Merchandising and Service Strategies]
Sales continued to surge in fast-food counter items, soft drinks and the rice range, products offered by the
Machikado Chubo in-store kitchen service, bakery, and the cosmetics range driven by an increase in the
movement of people. In the fast-food counter range, a new Japanese fried chicken product, “L-kara,” and otherproducts as well as regular items such as the “Kara-age-kun” chicken nuggets drove strong sales. In the rice
range, sales continued to surge in rice bowls such as the renewed “Kinshari Onigiri Rice Ball” series. In the
Machikado Chubo, we saw strong performance for regular items such as the Donburi rice bowls as well as box
lunch items in which rice is packed separately. In the daily delivered food range, a new bakery product, “Melonpan Bread with Salty Butter,” and regular bakery and ice cream items drove sales up, while in the non-foodrange, sales for MUJI products and cosmetics products under a new brand jointly developed with a popular
cosmetics brand enjoyed growth.
In food delivery service, the combined number of stores listed on four food delivery services such as Uber
Eats, reached 4,884 in 47 prefectures as of February 29, 2024. In addition, Uber Eats delivers over-the-counter
drugs sold at 115 LAWSON stores in 22 prefectures.
[Breakdown of Sales by Merchandise Category at Chain Stores in Domestic Convenience Store Business]
Sales
Percentage of total
Year on Year
Product group(millions of yen)(%)(%)
Processed foods
105.0
1,291,512
53.1
Fast foods

550,397

22.7

106.4

Daily delivered foods

372,842

15.3

105.9

Nonfood products

216,083

8.9

107.7

Total

2,430,835

100.0

105.7

[Store Development]
In opening new stores, the Group continued to focus on developing profitable stores.
During the fiscal year under review, the total number of LAWSON, NATURAL LAWSON and LAWSONSTORE100 stores opened in Japan stood at 280 stores. Meanwhile, we closed a total of 268. As of February
29, 2024, the total number of domestic stores was 14,643 *2.
In an effort to establish convenience store models catered to an aging population and a trend toward selftreatment, we are building partnerships with dispensing pharmacy and drug store chains to operate healthcareoriented LAWSON stores that offer over-the-counter pharmaceuticals and prescription drugs, as well as a wider
assortment of cosmetics and daily necessities than conventional LAWSON stores. The number of stores
offering over-the-counter drugs has reached 309 stores (includes 45 pharmacy LAWSON stores equipped withdrug-dispensing pharmacies) as of February 29, 2024. Moreover, the number of stores with nursing careconsultation desks for seniors has reached 19 as of February 29, 2024. Furthermore, we have also been
expanding our chain of “in-hospital LAWSON stores,” which feature strengthened focus on medical, sanitaryand nursing supplies in addition to merchandise and services offered at standard convenience stores. The
number of such stores has reached 342 as of February 29, 2024. Building on our expertise developed throughoperation of in-hospital LAWSON stores, we will continue to support the lives of all people interacting withhospitals.
Our NATURAL LAWSON stores, which are popular among customers for supporting their beauty, health,and comfortable lifestyles, offer an exclusive selection of finely picked items of value, including food madewith healthy ingredients and environmentally friendly detergents and cosmetics. Meanwhile, our LAWSONSTORE100 stores consistently offer safe and high-quality fruits and vegetables with a focus on freshness anddaily necessities, supporting customers’ daily dietary lives by helping them plan their meals. The stores are
visited by customers of all ages including children and the elderly, and particularly single people andhomemakers. As of February 29, 2024, we operate 130 NATURAL LAWSON stores and 648 LAWSONSTORE100 stores.
*2 The numbers of store openings and closings and total number of stores in Japan include stores operatedby Lawson, Inc., Lawson Kochi, Inc., Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.

15

(TRANSLATION ONLY)[Change in the Total Number of Domestic Stores]
Total stores as ofFebruary 28, 2023
LAWSON

Change during fiscal
year

Total stores as ofFebruary 29, 2024

13,83926

13,865

NATURAL LAWSON

131

(1)

130

LAWSON STORE100

661

(13)

648

14,631

12

14,643Total

As a result, Domestic Convenience Store Business posted gross operating revenue of 755,397 million yen(up 8.2% from previous fiscal year) and segment profit of 69,734 million yen (up 46.5% from previous fiscal
year).
(Seijo Ishii Business)
Seijo Ishii Co., Ltd provides customers with well-selected, and highly original foods under its philosophy of“Quality food for a quality life.” Operating diverse store formats including street-side stores and stores in stationbuildings and commercial facilities, the supermarket chain leverages its distinguished product development
expertise to offer original products and food items made in-house under the Seijo Ishii brand. The number of
directly operated Seijo Ishii Co., Ltd stores reached 181 as of February 29, 2024. Sales at stores in officebuildings recovered from the sluggish sales resulting from the COVID-19 pandemic. Product-wise, daily
delivered foods and dishes produced in-house at Seijo Ishii’s central kitchen recorded steady sales, while sales
also grew for fresh food including fruits and vegetables, meat, and fish, primarily at street-level stores. In
November 2023, the first store, Seijo Store, was completely renovated as a new flagship store. We will continue
striving to elevate the brand power of Seijo Ishii by promoting the sustainable development of products ofvalue, effective promotional campaigns, and publicity activities as a manufacturing retailer eager to send
messages out to consumers.
As a result, Seijo Ishii Business posted gross operating revenue of 112,544 million yen (up 2.2% fromprevious fiscal year) and segment profit of 12,247 million yen (down 4.3% from previous fiscal year).
(Entertainment-related Business)
With respect to our ticketing business in our Entertainment-related Business undertaken by Lawson
Entertainment, Inc., concerts, leisure, and other events enjoyed brisk demand. In addition, we focused ourefforts on securing an expanded lineup of events and strengthening sales in each genre, which resulted in a
year-on-year increase in our ticket transaction value. Furthermore, sales for our product sales business at HMV
music/video software stores and others grew as a result of a rise in the number of concerts and events held,
which drove up sales for related products, as well as an increase in the movement of people. In our e-commercebusiness, we are making efforts to expand the scope of merchandise we handle, including band and artist
merchandise, cosmetics and other items. The number of stores has reached 49 as of February 29, 2024,
including HMV stores, HMV&BOOKS, which markets books, CDs and DVDs, and HMV record shop storesspecializing in analog records.
During the fiscal year under review, United Cinemas Co., Ltd., an operator of cinema complexes, attracted
more moviegoers and generated higher sales than in the previous fiscal year as a result of the release of muchtalked-about and highly anticipated movies, such as during the long holiday in spring and the summer holiday
season, as well as the strong performance of high ticket-price films screened using 4D movie screening systems.
As of February 29, 2024, 43 cinema complexes nationwide with 398 screens are operating. United Cinemas
Co., Ltd. will have changed its name to Lawson United Cinemas, Inc. effective March 1, 2024.
As a result, Entertainment-related Business posted gross operating revenue of 80,884 million yen (up 12.1%
from previous fiscal year) and segment profit of 6,593 million yen (up 35.7% from previous fiscal year).
(Financial Services Business)
With respect to our Financial Services Business, we endeavored to offer an expanded range of new services
through Lawson Bank, Inc.’s ATMs and ATM settlement network. As of February 29, 2024, the number ofATMs installed nationwide reached 13,591, with each ATM used 55.9 times a day on average. The total numberof our financial institution partners reached 401 nationwide. We now have 15 partners for the cash charging at
ATMs, 8 for the “Smartphone ATM (QR code deposit/withdrawal)” *3 service, 25 for the “Immediate AccountSettlement Service”*4 (19 financial institutions and 6 other service operators), and 12 for international moneytransfer cards. In addition to cash deposit and withdrawal services, charging to cashless payment services has

16

(TRANSLATION ONLY)
also contributed to the increased use of ATMs, etc. Furthermore, new-model ATMs have been installed
gradually from January 2024 to support new banknotes (scheduled to enter circulation in July 2024) andincorporate universal design perspectives.
Regarding LAWSON Ponta Plus credit cards issued by Lawson Bank, Inc, we are continuing to work on
promoting card usage by drawing public attention to the benefits of using the card at LAWSON stores andother Ponta affiliated stores.
*3 A service where customers can deposit/withdraw cash or take out/repay a credit card loan at an ATM byusing a smartphone app instead of a bank card. “Smartphone ATM” is a registered trademark of Seven Bank,
Ltd.
*4 A service that allows customers to top up their mobile payment app from their account with a financial
institution by harnessing the ATM network.
As a result, Financial Services Business posted gross operating revenue of 35,682 million yen (up 3.5% fromprevious fiscal year) and segment profit of 2,960 million yen (down 23.1% from previous fiscal year).
(Overseas Business)
With regards to Overseas Business, the Group’s operating companies have developed LAWSON stores in
the People’s Republic of China, Thailand, the Philippines, the United States of America (Hawaii) andIndonesia.
The number of LAWSON stores in the People’s Republic of China, exceeded 6,000 in August 2023 andreached 6,288 as of February 29, 2024, up 668 stores from the end of previous fiscal year. In addition to
opening new stores through our subsidiaries, we are also launching stores by concluding mega franchise
agreements with local retailers in different cities, as well as area license agreements, where partner companies
serve as headquarters in designated areas and assume overall operation and development, in efforts toaccelerate the expansion of business areas and the number of stores. The spread of the COVID-19 pandemic
passed its peak from the end of 2022 to early January of 2023 and daily sales increased due to the recovery inthe movement of people, though there are regional differences in the degree of recovery. We will work tooffer our signature high-quality original products including rice and dessert items, enhance the value of theLawson brand in China, and increase earnings by strengthening our delivery business.
With regard to regions other than China, sales increased due to the recovery in the movement of people
resulting from the elimination and easing of COVID-related restrictions in respective countries. We have been
accelerating the pace of new store openings, with the total number of stores in Thailand, the Philippines, theUnited States (Hawaii) and Indonesia exceeded 1,000 in January 2024 and reached 1,056 as of February 29,
2024, up 516 stores from the end of the previous fiscal year. Having achieved a record-high number of storesin these countries combined, we will continue to operate our stores to sustain the daily lives of our customers
and strive to further expand our earnings.

17

(TRANSLATION ONLY)[Distribution of LAWSON Brand Stores Overseas by Region]
Change during
fiscal year

Number of stores(As of February
29, 2024)

2,483

191

2,674

China Chongqing and surrounding area
(Chongqing, Sichuan)

798

66

864

China Liaoning(including Shenyang, Dalian)

586

138

724

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

432

78

510

China Guangdong and Fujian(including Shenzhen, Xiamen)

174

147

321

China Hubei and Henan(including Wuhan, Xinyang)

617

34

651

China Anhui (including Hefei)

231

(3)

228

China Hainan (including Haikou)

139

34

173

China Hunan (including Changsha)

160

(17)

143

5,620

668

6,288

Thailand

181

7

188

Philippines

101

43

144

2

–

2

256

466

722

6,160

1,184

7,344

Country/Region

Number of stores(As of February
28, 2023)

China Shanghai and surrounding area
(Shanghai, Zhejiang, Jiangsu)

China Subtotal

United States of America (Hawaii)Indonesia
Total

As a result, Overseas Business posted gross operating revenue of 114,686 million yen (up 20.8% fromprevious fiscal year) and segment profit of 2,501 million yen (segment loss was 4,999 million yen for theprevious fiscal year).

(Sustainability Philosophy and Initiatives)
Based on our corporate philosophy, “Creating Happiness and Harmony in Our Communities,” we aim toachieve a sustainable society by implementing ESG-focused management that addresses environmental andsocial issues through the Group’s business activities with the vision of creating “hubs of refreshment in every
community.” We established the SDGs Committee on March 1, 2019 as an organization to promote Groupwide initiatives. Furthermore, on March 1, 2021 the position of Chief Sustainability Officer (CSO) was
assumed by the president and CEO and representative director to further strengthen those initiatives.
We believe that coexistence with stakeholders is essential to create happiness in our communities. To thisend, we identified issues that should be highly prioritized as our six material issues (materiality) among issues
having significant impacts on the environment, society and economy across our business activities including
the Group’s value chains.
Lawson’s “Six Material Issues”
1. Providing safety/security-oriented overwhelmingly high value-added products and services friendly tosociety and the environment
2. Supporting health promotion for all people through products and stores
3. Providing comfortable work environment leading to job satisfaction
4. Supporting women, senior people as well as children’s growth
5. Coexisting synergistically with communities by serving as part of social infrastructure
6. Sustainable environment preservation activities toward carbon-free society

18

(TRANSLATION ONLY)
In practicing ESG-focused management, we formulated its environmental vision, “Lawson Blue Challenge
2050!”, aiming to realize a (1) reducing CO2 emissions; (2) reducing food waste; and (3) reducing plastic use(for containers, packaging and shopping bags) and focused efforts are under way. To achieve these high goals,
we believe that it is essential to have a diverse workforce with a variety of personalities. To provide
opportunities for diverse human resources to play active roles, we are working on initiatives to enhance theGroup’s human capital including the promotion of Diversity Equity & Inclusion (DE&I) and improvement of
the working environment, and expansion of our education system, while measuring the quantitative effects ofthese activities.
The Group considers the promotion of women’s advancement to be one of its most important initiatives inpromoting DE&I. We are endeavoring to develop female executive candidates and promote them with the aimof achieving the target of raising the proportion of female managers to 30% by fiscal 2030.
・Respect for Human Rights
In June 2021, we established the Lawson Group Human Rights Policy as our top-level basic policy onhuman rights based on the Lawson Group Code of Conduct. In May 2022, we signed the United Nations Global
Compact, a worldwide initiative to achieve sustainable growth in the international community. Toward therealization of the Lawson Group Human Rights Policy, the Group is promoting initiatives to respect humanrights including human rights due diligence in various aspects of its business activities with support and respect
for international norms such as the United Nations Guiding Principles on Business and Human Rights. We
will work to establish and operate a supply chain that takes human rights into consideration and to create aworkplace environment where diverse human resources can play active roles.
Goals related to the environmental aspect (KPIs)
IssuesShort-term KPIs
for 2025

Medium-term KPIs
for 2030

Long-term KPIs
for 2050

Reducing CO2 emissions(per store)

Reduce by 15%
over 2013

Reduce by 50%
over 2013

Reduce by 100%over 2013

Reducing food waste(per store)

Reduce by 25%
over 2018

Reduce by 50%
over 2018

Reduce by 100%over 2018

Reducing plastic use(for containers andpackaging)

Reduce by 30%(100% of materials usedover 2017
for Lawson’s original(50% of materials used for
product containers andLawson’s original productpackaging arecontainers and packaging
eco-friendly)are eco-friendly)

Reduce by 15%
over 2017

Reducing plastic use(Plastic shopping bags)

Plastic shopping bags
Reduce by 100%――

Data on Active Role of Female Employees
FY 2020

FY 2021

FY 2022

FY 2023

Number of female managers(percentage of women in this role)

121
11.4%

134
12.2%

154
13.8%

159
14.1%

Number of female senior managers(percentage of women in this role)
Number of female (Deputy) Senior Vice
Presidents*(percentage of women in this role)
Number of female corporate officers*(percentage of women in this role)

10
6.2%

14
8.3%

11
7.1%

15
9.1%

2
5.7%

2
5.6%

2
6.1%

1
3.3%

6
6
5
5
46.2%
50.0%
50.0%
50.0%
* The number of senior vice presidents is the total number of senior vice presidents and deputy vicepresidents. Also, the number of corporate officers is the total number of members of the board and audit& supervisory board members.

19

(TRANSLATION ONLY)(2) Capital Expenditures
Capital expenditures of the Group during the fiscal year under review totaled 61,457 million yen, of which
35,688 million yen was primarily for store facility investment in buildings, and 20,622 million yen was forthe upgrading of information systems.
(3)
Changes in Operating Results and Financial Position① Changes in Operating Results and Financial Position of the Corporate GroupIFRS
Fiscal 2021
Fiscal 2022
Category/Fiscal Term
47th Term
48th Term

Fiscal 2023
49th Term

Gross operating revenue (millions of yen)

943,206

1,000,385

1,087,964

Profit attributable to owners of parent (millions of yen)

22,62529,70852,148

Basic earnings per share (Yen)

226.09296.86521.08

Total assets (millions of yen)

2,144,778

2,242,421

2,297,498

235,693

253,858

289,300

Equity (millions of yen)

2,316.89
2,497.49
2,845.30
Equity attributable to owners of parent per share (yen)Note: The consolidated financial statements have been prepared in accordance with IFRS from the 49th term.
The figures for the 47th and 48th term are also presented in accordance with IFRS for reference.
Japanese GAAP
Fiscal 2020
46th Term

Category/Fiscal Term

Fiscal 2021
47th Term

Fiscal 2022
48th Term

Gross operating revenues (millions of yen)

666,001

698,371

988,621

Ordinary income (millions of yen)

37,61047,57153,453

Profit attributable to owners of parent (millions of yen)

8,689

17,90024,689Profit per share (yen)86.84

178.87

246.70Total assets (millions of yen)

1,365,430

1,337,245

1,366,166

Net assets (millions of yen)

272,931

278,473

287,099

Net assets per share (yen)2,674.53

2,726.97

2,810.33

Fiscal 2022
48th Term

Fiscal 2023
49th Term

2,299,518

2,416,293

357,571

391,793

40,61868,928② Changes in Operating Results and Financial Position of the Company
Fiscal 2020
Fiscal 2021
Category/Fiscal Term
46th Term
47th Term
Net sales of all convenience stores
2,165,818
2,211,981(millions of yen)
Gross operating revenue
354,825
355,102(millions of yen)
Ordinary income (millions of yen)
33,70034,278
Profit (millions of yen)

15,894

13,47022,59544,722

Profit per share (yen)158.84134.61225.78446.87

Total assets (millions of yen)

839,426

793,925805,367

820,527

Net assets (millions of yen)

234,977

233,294

240,073

266,412

Net assets per share (yen)2,344.86

2,327.59

2,395.60

2,657.51

20

(TRANSLATION ONLY)(4) Priority Issues of the Group① Response to social issues
The Company promotes ESG-focused management and has been clarifying the items and issues to beaddressed by the Lawson Group with the aim of ensuring that the Group can work toward resolving issues. In
particular, the Group is focused on promoting decarbonization activities, reducing food waste, and eliminating
plastic uses in order to help bring about a sustainable society.
② Continue to ensure stable management of franchised stores and enhance human capital
The Company recognizes that maintaining the stable management of franchised stores, our largest partners, is an important
issue. Based on franchise store profit-focused management, we are developing a system in which our headquarters takes
responsibility for providing comprehensive support to franchise stores in response to soaring store expenses and labor
shortages. In addition, we will make the maximum use of digital technology to efficiency store operation, make working
environments more pleasant, and reduce labor needs to develop an environment that enables people of all ages andnationalities to work at our stores, while addressing issues faced by franchised stores such as the shortage of store crew.
Furthermore, we will implement short-term and medium- to long-term initiatives such as measures to stabilize management
by promoting the management of multiple franchised stores while addressing shortages of FC store owners stemming fromthe declining birthrate, thereby building stronger partnerships with franchised stores.
At the same time, the Group's employees are its most important capital in pursuit of happiness in our communities and ahigh level of store productivity. To improve job satisfaction and productivity, we are striving to foster a culture that recognizes
diversity and to create an environment that provides optimal personnel systems and training, support for maintaining andimproving health as well as encourages employees to take on challenges.
③ Pursuit of an ideal store format with enhanced product appeal and product assortment
We aim to further strengthen our product appeal and create stores that match the various lifestyles and needs of ourcustomers. By promoting store renovations to pursue the ideal store format based on the above, we strive to create stores thatgenerate word-of-mouth recommendations by customers. In addition, in order to deeply understand customer needs that varyby area and respond to such needs in an appropriate and prompt manner, each area company will further promote a system
in which they formulate and implement sales, product, and store development strategies.
④ Take on challenges in future growth areas

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

We believe that enhancing internal control across the Group as a whole and dealing with business risks are
absolutely necessary to develop our business on a continual basis. Proactive efforts in corporate governance asan enterprise listed on the prime market that will enable us to meet the expectations of all stakeholders involved
with our Group will help improve our corporate value. We will continue focusing our efforts on enhancing
internal control and addressing business risks.
The Company has a listed parent company (Mitsubishi Corporation) and, although we are publicly listed asa parent/subsidiary pair, we appoint one-third or more independent directors who have no conflict of interest
with general shareholders. In addition, we install “Nomination and Compensation Advisory Committee” and“Special Committee” on a voluntary basis and maintaining a system able to ensure the highest levels ofmanagement transparency and fairness.

21

(TRANSLATION ONLY)
2. Current Status as of February 29, 2024
(1) Major Business Segments of the Corporate Group and Principal Offices(Domestic Convenience Store Business)① Lawson, Inc.
Major Business:
Primarily operates the Lawson-brand franchise system and undertakes management ofcompany-operated stores as the head office of LAWSON, NATURAL LAWSON and
LAWSON STORE100 convenience store chains.
Head Office:Shinagawa-ku, Tokyo
Principal Offices:
Hokkaido area office (Kita-ku, Sapporo), Tohoku area office (Aoba-ku, Sendai), Kanto
area office (Minato-ku, Tokyo), Chubu area office (Naka-ku, Nagoya), Kinki area office(Suita city, Osaka), Chushikoku area office (Kita-ku, Okayama) and Kyushu area office(Hakata-ku, Fukuoka)
Note: In addition to the above sites, the Company has 117 offices throughout Japan,
including branches.
② Lawson urbanworks, Inc.
Major Business:
Operates LAWSON stores mainly in Tokyo and Chiba prefectures.
Head Office:Shinagawa-ku, Tokyo③ Lawson Store100, Inc.
Major Business:
Operates LAWSON STORE100 stores, provides guidance, and engages inmerchandise-related businesses.
Head Office:Saiwai-ku, Kawasaki-shi, Kanagawa④ Lawson Minamikyushu, Inc.
Major Business:
Operates LAWSON stores in Kagoshima prefecture.
Head Office:Kagoshima-shi, Kagoshima⑤ SCI, Inc.

Major Business:
Head Office:

Food wholesaler, including processed meats and frozen foods, and wholesaler ofpacking materials.
Shinagawa-ku, Tokyo[Stores]Number ofstores702

Aomori
Akita

Prefecture
Hokkaido

IbarakiNumber ofstores217

Kyoto

Number ofstores
326

279

Tokyo

1,651

Shiga

152

Tokushima

135

1,060

Nara

134

Kochi

138

155

Fukuoka

525

Saga

78

Prefecture

Prefecture

Prefecture
Ehime

Number ofstores218

178

Kanagawa

Iwate

178

Shizuoka

273

Wakayama

Miyagi259

Yamanashi

134

Osaka

1,195

Yamagata

108

Nagano

167

Hyogo

705

Nagasaki

123

Fukushima

169

Aichi

719

Okayama

245

Oita

200

Niigata

223

Gifu

177

Hiroshima

302

Kumamoto

167

Tochigi

198

Mie

136

Yamaguchi

129

Miyazaki

111

Gunma

240

Ishikawa

101

Tottori

136

Kagoshima

201

Saitama688

Toyama176

Shimane140

Okinawa

262

Chiba

595

Fukui

106

Kagawa132

Total (domestic)

14,643

Note: These figures include stores operated by Lawson, Inc., Lawson Kochi, Inc., Lawson Minamikyushu, Inc. and
Lawson Okinawa, Inc.

22

(TRANSLATION ONLY)(Seijo Ishii Business)
SEIJO ISHII CO., LTD.
Major Business:
Operates a chain of small supermarkets that seeks to develop and manufacture highvalue-added products.
Head Office:Setagaya-ku, Tokyo(Entertainment-related Business)① Lawson Entertainment, Inc.
Major Business:
Sells tickets for various events and music/video software inside LAWSON stores and others.
Head Office:Shinagawa-ku, Tokyo② United Cinemas Co., Ltd.
Major Business:
Manages multiplex movie theaters
Head Office:Shinagawa-ku, Tokyo
Note: Effective March 1, 2024, United Cinemas Co., Ltd. changed its name to Lawson United
Cinemas, Inc.
(Financial Services Business)
Lawson Bank, Inc.
Major Business:
Operates a banking business
Head Office:Shinagawa-ku, Tokyo(Overseas Business)① Lawson (China) Holdings, Inc.
Major Business:
Controls companies that operate overseas business in China.
Head Office:Shanghai, China② Shanghai Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Shanghai, China③ Shanghai Le Song Trading Co., Ltd.
Major Business:
Operates Company-operated convenience stores.
Head Office:Shanghai, China④ Shang Hai Gong Hui Trading Co., Ltd
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Shanghai, China⑤ Zhejiang Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Hangzhou, China⑥ Chongqing Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Chongqing, China⑦ Dalian Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Dalian, China⑧ Lawson (BEIJING), Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Beijing, China⑨ BEIJING LUOSONG Co., Ltd.
Major Business:
Operates Company-operated convenience stores.
Head Office:Beijing, China⑩ Chengdu Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Chengdu, China⑪ Guangdong Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Guangdong, China⑫ Shenzhen Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Shenzhen, China⑬ Saha Lawson Co., Ltd.
Major Business:
Operates stores under the store brand of LAWSON 108 and 108SHOP.
Head Office:Bangkok, Thailand⑭ Lawson Philippines, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:
Manila, Philippines

23

(TRANSLATION ONLY)(Other Business)
 Consulting Business
BestPractice, Inc.
Major Business:
Head Office:Conducts surveys of convenience stores to give advice and make specific proposals for the
improvement of LAWSON stores.
Shinagawa-ku, Tokyo(2) Employees① Employees of the Corporate Group
Name of Business Segment

Number of Employees

Domestic Convenience Store Business

5,013

(42)

Seijo Ishii Business

1,250

12

Entertainment-related Business

1,184

(6)

Financial Services Business

192

29

Overseas Business

3,833

117

Other Business

194

(13)

11,66697

Total

Year-on-Year Change

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

Number of Employees

Year-on-Year Change

Average Age

Average Years of Service

4,361

(93)

42.7

15.8

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

Amount Borrowed (millions of yen)

Mitsubishi Corporation Financial &Management Services (Japan) Ltd.

60,000Sumitomo Mitsui Banking Corporation

15,000Mizuho Bank, Ltd.

10,000(4) Parent Company and Significant Subsidiaries and Equity-method Associates① Parent Company
Capital Stock
Shareholding
Major Business
Parent Company(millions of yen)(%)

Mitsubishi Corporation

204,446

50.2•

Environmental Energy, Materials
Solution, Mineral Resources, Urban
Development & Infrastructure,
Mobility, Food Industry, Smart-Life
Creation, Power Solution, etc.

Relationship with parent company
Mitsubishi Corporation, our parent company, holds 50,150,000 of our shares (50.2% of voting rights).
Mitsubishi Corporation provides guarantees for loans payable and engages in other transactions with the Lawson
Group.
• Information on transactions with the parent company:
a. Ensuring that engaging in these transactions is not harmful to our interests
We have entered into guarantee entrustment agreements with our parent company, and we have paid our

24

(TRANSLATION ONLY)
parent company guarantee fees for some of our loans payable based on these agreements. In conducting thesetransactions, we have established transaction conditions that compare with prevailing market prices, as we dofor general transactions.
b. Board of Directors’ assessment on whether these transactions are harmful to our interests, and grounds for thatassessment
Given the perspective in a. above, we solicit appropriate feedback on our management at Board of Directors’
meetings attended by outside directors and outside Audit & Supervisory Board members, with decisions madeafter multi-faceted discussions, and we have determined that such transactions are not harmful to our interests.
c. Views of outside directors if they differ from the Board of Directors’ assessment
Not applicable.
• The following outlines the agreements, etc. that the Company has concluded with its parent company with regard to
significant financial and business policies:
The Company resolved at its Board of Directors’ meeting held on September 16, 2016 to amend the business allianceagreement that the Company had concluded with Mitsubishi Corporation in February 2000 (including amendments
thereto; hereinafter, the “Original Business Alliance Agreement”) and on the same day concluded the businessalliance agreement (which came into effect on February 15, 2017).
a. Reason for amendment of the Original Business Alliance Agreement
The Company and Mitsubishi Corporation concluded that it was necessary to further strengthen their collaborationand further bolster the Company’s business foundation by enabling the Company to take even greater advantage of
Mitsubishi Corporation’s network and human resources for the benefit of the Company’s domestic convenience store
business, overseas convenience store business, and other peripheral businesses through making the Company aconsolidated subsidiary of Mitsubishi Corporation.
b. Details of amendments to the Original Business Alliance Agreement(a) The fields of business alliance will be as follows:(i) domestic convenience store business,(ii) overseas convenience store business,(iii) peripheral businesses, and(iv) other businesses separately agreed on by the companies;(b) Mitsubishi Corporation will implement the business alliance while respecting the Company’s management
independence and identity, as well as respecting the interests of the franchise stores, which constitute the essence ofthe franchise business;(c) In order to effectively and substantially promote the business alliance, Mitsubishi Corporation will dispatch
personnel as necessary upon mutual consultation, and the Company will accept such dispatched personnel.
(d) The amended business alliance agreement will become effective on the settlement commencement date of thetender offer for shares of the Company’s common stock by Mitsubishi Corporation announced on September 16,
2016 and will remain effective until a time separately agreed to in writing by Mitsubishi Corporation and theCompany.
The Company resolved at its Board of Directors meeting held on March 27, 2024, that it would express its opinion infavor of the tender offer for the Company’s common shares, etc. by KDDI Corporation (“KDDI”) (the “Tender Offer”)
and recommended that the Company’s shareholders tender their shares in the Tender Offer. In relation to the Tender
Offer, the Company entered into a capital and business alliance agreement with Mitsubishi Corporation and KDDI(collectively referred to as the “Offeror Related Parties”) (the “Capital and Business Alliance Agreement”) on February
6, 2024. A summary of the Capital and Business Alliance Agreement is as follows.
(i) Purpose• Maximize the corporate value of the Lawson Group by strengthening each business of the Lawson Group toward therealization of a new-generation “hub of refreshment in every community” that creates new consumer value throughthe integration of “real, digital and green”, taking advantage of one of the main consumer contact points in Japan.
• Expand business infrastructure and create new values of the Mitsubishi Corporation Group and the KDDI Groupthrough the growth of the Lawson Group.
(ii) Details of capital alliance• Establish capital relationship between the Offeror Related Parties and the Company through the Tender Offer. (Theprovision becomes effective on the closing date (meaning the day when the share consolidation, which is to take place
upon the completion of the Tender Offer, becomes effective and the ratio of voting rights held by Mitsubishi
Corporation and KDDI in the Company becomes 50.00% each; hereinafter the same.))(iii) Details of the business alliance

25

(TRANSLATION ONLY)• Substantially implement the business alliance in the following fields (the “Business Alliance”), contribute to andcooperate in the promotion of each of the following measures (The provision becomes effective on the closing date.),and establish a collaboration promotion committee as a forum for discussions of the policies and progress of theBusiness Alliance.
(A) Relation to real stores: Create a new type of store that can provide new services utilizing the functions andcommodities of each company at real stores, which are the strengths of both the Company and the KDDI.
(B) Relation to digital collaboration: Expand users of the Lawson Group’s services and make them loyal customers bylinking the membership information held by each group of the Offeror Related Parties and the Company andutilizing their customer data bases.
(C) Relation to green collaboration: Promote decarbonization and a circular economy business of the Lawson Groupby utilizing the business infrastructure of the Offeror Related Parties and their groups.
(D) Business collaboration in other fields: Cooperate in the initiatives in other fields to maximize the Lawson Group’s
corporate value, as determined by the collaboration promotion committee after discussions between the Offeror
Related Parties and the Company.
• Discuss and consider such matters as the schemes of the Business Alliance and roles of each party based on theassumption that the Offeror Related Parties and their groups provide their management resources to the Lawson Groupsufficiently within the scope of economic rationality, and the Lawson Group provides its management resources to
the Offeror Related Parties and their groups sufficiently within the scope of economic rationality (The provision
becomes effective on the closing date.)• Agree at the collaboration promotion committee on the details of the schemes of the Business Alliance and specificroles of each party within 12 months from the date of execution of the Capital and Business Alliance Agreement,
based on the results of the above discussions and considerations (The provision becomes effective on the closing
date.)• Within three years from the closing date as a general rule, conduct the schemes agreed by the collaboration promotion
committee (Such schemes and roles of each party are reviewed every three years starting from the time of the above
agreement.)(The provision becomes effective on the closing date.)(iv) Management, etc. of the Company• The Offeror Related Parties confirm that the officers and employees of the Lawson Group will, through the Business
Alliance, strengthen the Company’s existing businesses and develop new businesses, maximize the Company’s
corporate value, and operate the Company with the aim of “improving Life Time Value for consumers” and “affluent
Japanese communities.” (The provision becomes effective on the closing date.)• The Offeror Related parties, to the maximum extent within the commercially reasonable scope, respect the Company’s
trade practice existing before the closing date regarding the Lawson Group’s contractual relationships and business
relationships existing before the closing date (including the terms of contracts with franchisee owners of the stores),to the extent conducive to enhance the Lawson Group’s corporate value. (The provision becomes effective on theclosing date.)• The Offeror Related Parties’ obligations to maintain the employment of the Lawson Group’s employees and to ensurethat the level of the employment conditions for such employees does not substantially fall below the level as of theexecution date of the Capital and Business Alliance Agreement, except in the case of their compulsory retirement or
disciplinary actions issued against them based on laws and regulations and internal rules, the required change to theemployment conditions for the employees of the Lawson Group due to the significant change of market conditions orbusiness environments, or otherwise following the traditionally established practical operations of the Lawson Group.
(The provision becomes effective on the closing date.)• Discuss in good faith the Company’s stock option system existing as of the execution date of the Capital and Business
Alliance Agreement.
• The Company’s obligation to request, to the commercially reasonable extent, that each employee stock ownershipassociation take measures to tender all the Company’s Shares held by each holding company of the Lawson Group in
the Tender Offer and measures necessary to comply with the laws and regulations applicable to the Tender Offer.
• Dispatch or temporarily transfer the Offeror Related Parties and the officers and employees of their groups to theLawson Group as necessary in order to effectively and substantially promote the Business Alliance. (The provision
becomes effective on the closing date.)

26

(TRANSLATION ONLY)② Significant Subsidiaries

Company Name

Capital Stock

Shareholding

Major Business
Domestic Convenience StoreBusiness
Domestic Convenience StoreBusiness
Domestic Convenience StoreBusiness
Domestic Convenience StoreBusiness

Lawson urbanworks, Inc.

10

million yen

100.0 %

Lawson Store100, Inc.

99

million yen

100.0 %

Lawson Minamikyushu, Inc.

100

million yen

100.0 %

SCI, Inc.

10

million yen

100.0 %SEIJO ISHII CO., LTD.

100

million yen

100.0 %

Seijo Ishii Business

Lawson Entertainment, Inc.

100

million yen

100.0 %

United Cinemas Co., Ltd.

100

million yen

100.0 %

Lawson Bank, Inc.

11,600

million yen

95.0 %

Entertainment-related
Business
Entertainment-related
Business
Financial Services
Business

Lawson (China) Holdings, Inc.

3,359 million Chinese yuan

100.0 %

Overseas BusinessShanghai Lawson, Inc.

452 million Chinese yuan

100.0 %

Overseas BusinessShanghai Le Song Trading Co., Ltd.

0.1 million Chinese yuan

100.0 %

Overseas BusinessShang Hai Gong Hui Trading Co., Ltd.

0.3 million Chinese yuan

85.0 %

Overseas Business

Zhejiang Lawson, Inc.

20 million Chinese yuan

100.0 %

Overseas Business

Chongqing Lawson, Inc.

490 million Chinese yuan

100.0 %

Overseas Business

Dalian Lawson, Inc.

66 million Chinese yuan

98.3 %

Overseas Business

Beijing Lawson, Inc.

284 million Chinese yuan

64.8 %

Overseas Business

BEIJING LUOSONG Co., Ltd.

0.1 million Chinese yuan

64.8 %

Overseas BusinessChengdu Lawson, Inc.

180 million Chinese yuan

100.0 %

Overseas Business

Guangdong Lawson, Inc.

300 million Chinese yuan

100.0 %

Overseas Business

Shenzhen Lawson, Inc.

55 million Chinese yuan

100.0 %

Overseas Business

Saha Lawson Co., Ltd.

1,367

million baht

49.2 %

Overseas Business

Lawson Philippines, Inc

2,700

million pesos

100.0 %

Overseas Business10

million yen

100.0 %

Consulting Business

BestPractice, Inc.

Notes:
1. Shareholding includes indirectly held shares.
2. The Company acquired additional shares of Lawson Minamikyushu, Inc., converting it from an equity-method
associate (joint venture) to a consolidated subsidiary.
3. Lawson (China) Holdings, Inc. changed its Chinese trade name on November 24, 2023.
4. United Cinemas Co., Ltd. will have changed its name to Lawson United Cinemas, Inc. effective March 1, 2024.
③ Significant Equity-method Associates

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

Capital Stock(millions of yen)
10
50

Shareholding
(%)
49.0
49.0

27

Major Business
Domestic Convenience Store Business
Domestic Convenience Store Business

(TRANSLATION ONLY)
II.CURRENT STATUS OF THE COMPANY
1. Shares at the End of the Year
(1) Total Number of Shares Authorized to Be Issued:
409,300,000 shares(2) Total Number of Shares Issued and Outstanding:
100,300,000 shares(Including 222,085 shares of treasury shares)(3) Number of Unit (tangen) Shares:
100 shares(4) Number of Shareholders:
23,206(5) Top 10 Major Shareholders:Number of Shares Held(thousand shares)

Shareholding(%)

Mitsubishi Corporation

50,15050.1

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

6,515

6.5

BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)

2,155

2.2

Custody Bank of Japan, Ltd. (Trust account)

2,134

2.1

KDDI CORPORATION

2,110

2.1

NTT DOCOMO, INC.

2,092

2.1

MSIP CLIENT SECURITIES

1,821

1.8

BNYM SA/NV FOR BNYM FOR BNY GCM CLIENT ACCOUNTSM LSCB RD

1,513

1.5

JPLLC-CL JPY

1,007

1.0

926

0.9

Shareholder’s Name

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

28

(TRANSLATION ONLY)
2. Status of Stock Acquisition Rights(1) Stock Acquisition Rights Held by Corporate Officers of the Company as of February 29, 2024
14th Stock
16th Stock
17th Stock
19th Stock
Acquisition
Acquisition
Acquisition
Acquisition
RightsRightsRightsRightsNumber of option holders and the number of stock acquisition rights (units)
1 person1 person1 person1 person
Directors (excluding(27 units)(38 units)(62 units)(57 units)
Outside Directors)
0 person0 person0 person0 person
Outside Directors(0 units)(0 units)(0 units)(0 units)
Class and number ofCommon stock of Common stock of Common stock of Common stock ofshares subject to stock
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
acquisition rights
2,700
3,800
6,200
5,700
Amount of property
contributed upon theexercise of the stock
1 yen
1 yen
1 yen
1 yen
acquisition rights (pershare)
April 10, 2015
May 2, 2016
May 1, 2017
June 8, 2018
through March 24, through April 12,
through April 11,
through May 21,
Exercise period
2035
2036
2037
2038
Main exercise
Note 1
Note 1
Note 1
Note 1
conditions
21st Stock
22nd Stock
20th Stock
Acquisition
Acquisition
Acquisition
RightsRightsRightsNumber of option holders and the number of stock acquisition rights (units)
1 person1 person1 person
Directors (excluding(90 units)(112 units)(64 units)
Outside Directors)
persons
1 person
12 person
2 personsOutside Directors(10units)(10 units)(5 units)(5 units)
CommonCommonClass and number ofCommon stock of Common
stock of Common
stock ofstock
ofstockof
of
stock
of
stock
shares subject to stock
Lawson, Inc.
Lawson, Inc.
Lawson,Inc.
Lawson,Inc.
Lawson,Lawson,Inc.
Lawson,Inc.
acquisition rights
6,900
9,500
12,200Inc.
11,00011,00011,00011,000
Amount of property
contributed upon the
1 yen
1 yen
1 yen
exercise of the stock
1 yen
1 yen
1 yen
1 yen
acquisition rights (per
June
8,
2018
June
8,8,2018
June
8,
2018
June
2018
share)
throughMaythroughMaythroughMaythrough
May
June 7, 2019
June 12, 2020
June 11, 2021
21,
21,
21,
21,
through May 20,
through May 26,
through May 24,
Exercise period
2038
2038
2038
2038
2040
2041
2039
Note1 1
Note1 1Note
Note
Main exercise
Note 1
Note 1
Note 1
conditions

29

23rd Stock
Acquisition
Rights2 persons(117 units)
2 persons(10 units)
Common stock of
Lawson, Inc.
12,700

1 yen

June 10, 2022
through May 24,
2042
Note 1

(TRANSLATION ONLY)
24th Stock
Acquisition
RightsNumber of option holders and the number ofstock acquisition rights (units)
3 persons
Directors (excluding(170 units)
Outside Directors)
2 personsOutside Directors(10 units)
Class and number ofCommon stock ofshares subject to stock
Lawson, Inc.
acquisition rights
18,000
Amount of property
contributed upon theexercise of the stock
1 yen
acquisition rights (pershare)
June 9, 2023
through May 23,
Exercise period
2043
Main exercise
Note 1
conditions
Note 1: A stock acquisition rights holder may exercise his or her rights within the exercise period only for a periodof 10 days from the day after losing his or her position as either director and/or executive officer of theCompany.
(2) Stock Acquisition Rights Issued during the Fiscal Year to Senior Vice Presidents of the Company as
Compensation for Performing Their Duties
24th Stock
Acquisition
RightsNumber of SVPs and the number of stockacquisition rights
13 persons
Senior Vice
(86 units)
Presidents
Class and number ofCommon stock ofshares subject to stock
Lawson, Inc.
acquisition rights
8,600
Amount of property
contributed upon theexercise of the stock
1 yen
acquisition rights (pershare)
June 9, 2023
through May 23,
Exercise period
2043
Main exercise
Note 1
conditions
Notes:
1. A stock acquisition rights holder may exercise his or her rights within the exercise period only fora period of 10 days from the day after losing his or her position as either director and/or executive
officer of the Company.
2. “Senior Vice Presidents” exclude those who concurrently serve as a member of the board.
(3) Other Information related to Stock Acquisition Rights
The total number of shares subject to stock acquisition rights that remain unexercised as of February 29,
2024, is 106,000 shares, accounting for 0.11% of the total number of shares issued and outstanding.

30

(TRANSLATION ONLY)
3. Members of the Board and the Audit & Supervisory Board(1) Positions, Names and Assignments (As of February 29, 2024)
Position, Assignments and Important Concurrent Positions
Name
Note: Important concurrent positions of Outside Directors given later in (8) Outside
Directors and Outside Audit & Supervisory Board Members
President and CEO, Representative
Sadanobu Takemasu
CSO
Director, Chairman of the Board
Executive Managing Officer,
Masayuki Itonaga
CFO
Member of the Board
Miki Iwamura
Member of the Board
Satoko Suzuki
Member of the Board
Executive Vice President, Group CEO, Consumer
Kiyotaka Kikuchi
Member of the Board
Industry Group, Mitsubishi Corporation
Audit & Supervisory Board
Jun Miyazaki
Member (full-time)
Audit & Supervisory Board
Shuichi Imagawa
Member (full-time)
Audit & Supervisory Board
Yuko Gomi
MemberAudit & Supervisory Board
Keiko Yoshida
MemberAudit & Supervisory Board
Yuko Miyata
MemberNotes:
1. Two members of the Board (Miki Iwamura and Satoko Suzuki) are outside directors as stipulated
in Article 2, Item 15, of the Companies Act of Japan (the “Companies Act”).
2. Three Audit & Supervisory Board Members (Yuko Gomi, Keiko Yoshida, and Yuko Miyata) areoutside Audit & Supervisory Board Members as stipulated in Article 2, Item 16, of the Companies
Act.
3. Yuko Gomi, Audit & Supervisory Board Member, has a wealth of work experience of law and risk
management mainly in relation to the legal affairs of companies, based on her viewpoint of law as
a lawyer and her broad knowledge.
Keiko Yoshida, Audit & Supervisory Board Member, is a certified public accountant, serving as therepresentative of an accounting firm, and therefore has considerable expertise in taxation,accounting and management.
Yuko Miyata, Audit & Supervisory Board Member, has broad experience of human resource
management at overseas global companies and considerable expertise in general business decisionmaking, governance, and compliance.
4. The following personnel changes were approved at the 48th general meeting of shareholders held on
May 24, 2023.
Appointment
Audit & Supervisory Board Member
Yuko Miyata
MemberAudit& Supervisory Board Member
Eiko Tsujiyama
Resignation

31

(TRANSLATION ONLY)[Reference] Members of the Boards and Senior Vice Presidents(Excluding Non-Executive Directors) (As of March 1, 2024)
Name
Sadanobu Takemasu

Motonobu Miyake

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

Hitoshi Fujii
Tatsushi Sato
Tatsuya Murase
Suguru Kawabata

Executive Managing Officer
Executive Managing Officer
Executive Managing Officer
Executive Managing Officer

Miwako Tate
Gyo Katsuta
Akihito Watanabe
Kazuhiro Wakui
Katsuaki Sakai

Executive Managing Officer
Executive Managing Officer
Executive Managing Officer
Executive Vice President
Executive Vice President

Satoshi Kumagai
Takeji Hino

Senior Vice President
Senior Vice President

Tomoki Takanishi
Hiroyuki Oki
Kazuki Tsukiuda
Taiji Yoshida
Daisuke Hara
Yasuhiko Hirokane

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

Toshihiko Ito

Senior Vice President

Masayuki Itonaga
Masakatsu Gonai
Yuichi Wada

Position and Major Title
CSO

CFO
Chief Risk Officer, Executive Assistant to CSO,
General Manager of CS Promotion Office
Company President of Kinki Company
Company President of China Company,
General Manager of Lawson (China) Holdings, Inc.
Division Director of Merchandising Division
Division Director of IT Systems Solution Division
Division Director of Store Sales Division
Division Director of Corporate Strategy and Planning Division,
Division Director of Corporate Sales and Store Development
Division
Division Director of Corporate Communications Division
Division Director of Marketing Strategy Division
Company President of Entertainment Company
Merchandising Division Deputy Director
Deputy Division Director of Corporate Strategy and Planning
Division (Responsible for Promotion of Alliance With Japan
Post)
Company President of Financial Services Company
Human Resources Division Director and LAWSONWILL, Inc
President and Representative Director
Financial Administration Division Director
Company President of Kyushu Company
Division Director of Franchisee Business Support Division
Company President of Incubation Company
Company President of Shutoken Company
Deputy Division Director of Corporate Sales and Store
Development Division
Deputy Division Director of Merchandising Division(2) Outline of Liability Limitation Agreements
The Company has entered into agreements with its directors (excluding persons who are executive directors,etc.) and Audit & Supervisory Board members 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 sumof the amounts set forth in the respective relevant items of Article 425, Paragraph 1 of the Companies Act.
The aforementioned liability limitation is valid only in cases where the said director or Audit & Supervisory
Board member has performed duties which resulted in a cause of such liability in good faith withoutcommitting acts of gross negligence.
(3) Outline of Indemnity Agreements
The Company has entered into indemnity agreements prescribed under Article 430-2, Paragraph 1 of theCompanies Act with its directors (Sadanobu Takemasu, Masayuki Itonaga, Miki Iwamura, Satoko Suzuki,
and Kiyotaka Kikuchi) and Audit & Supervisory Board members (Jun Miyazaki, Shuichi Imagawa, Yuko
Gomi, Keiko Yoshida, and Yuko Miyata), whereby the Company shall indemnify the expenses set forth initem (i) of the said Paragraph and the losses set forth in item (ii) of the said Paragraph within the limitsprescribed by laws and regulations.
In addition, the Company takes measures to prevent the impairment of appropriate execution of duties by
the Company’s officers by not providing compensation in cases where loss is attributable to bad faith or grossnegligence in the execution of duties, or in cases where there is a reason that exempts the insurance provider
from payment as stipulated in the directors and officers (D&O) liability insurance agreements concluded
between the Company and the insurer and by setting a certain amount as a deductible for losses per event.

32

(TRANSLATION ONLY)(4) Outline of Directors and Officers (D&O) Liability Insurance Agreements
The Company has entered into directors and officers (D&O) liability insurance agreements prescribed under
Article 430-3, Paragraph 1 of the Companies Act with an insurance provider, whereby litigation expenses anddamages arising from compensation payments to be borne by the insured shall be covered by the said insurance
agreements. The insured under the directors and officers (D&O) liability insurance agreements shall bedirectors, Audit & Supervisory Board members, executive officers, etc. of the Company and its subsidiaries,
and all insurance premiums for the insured shall be borne by the Company. In addition, the Company takes
measures to prevent the impairment of appropriate execution of duties by the Company’s officers by ensuringthat the said insurance shall not be applied in cases where loss is attributable to bad faith or gross negligencein the execution of duties by the insured, or in cases where there is a reason that exempts the insurance provider
from payment as stipulated in the said agreements.
(5) Amounts of Remuneration Paid to Directors and Audit & Supervisory Board Members
Remuneration paid to officers

Category

Directors(Including Outside Directors)
Outside Directors
Audit & Supervisory Board
Members(Including Outside Audit &Supervisory Board Members)
Outside Audit & Supervisory
Board Members
Total

Total Compensation Paid by Type
Number of
Total(millions of yen)
Corresponding
Compensation
Directors andPaid
Audit &
(millions of
Fixed
Variable
Stock
Supervisory
yen)Compensation Compensation Options Board Members
248

117

43

87

5

30

26

–

4

2

87

87

–

–

6

39

39

–

–

4

336

205

43

87

11

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

Regarding the amount of remuneration paid to directors, it is the Company’s basic policy to design the
remuneration system in close correlation with shareholder returns while ensuring that it will function
sufficiently as an incentive for the enhancement of corporate value, sustainable growth and improvement ofoperating performance, and reward each director with a sufficient and adequate amount of compensation for
the execution of their duties.
② Decision-making process for the amount of remuneration paid to directors

In order to enhance management transparency and fairness, the amount of remuneration paid to theCompany’s directors is determined through the following processes:
i The limit on the amount of remuneration paid to directors is resolved at the general meeting ofshareholders following the decision by the Board of Directors based on consultation with andrecommendations of the Nomination and Compensation Committee.
ii Directors’ remuneration system and calculation rules are determined by the Board of Directors based on
consultation with and recommendations of the Nomination and Compensation Committee. The standard
remuneration amount commensurate with the position is determined by the President of the Company basedon consultation with and recommendations of the Nomination and Compensation Committee.
iii With regard to the amount of remuneration for each year, in accordance with the calculation rules, theamount of remuneration paid to individual directors is calculated based on the standard remuneration, taking
into account the Company’s financial performance, etc., and qualitative assessment. The total amount of
remuneration is determined at the board of directors’ meeting based on consultation with and therecommendations of the Nomination and Compensation Committee, and the amount of remuneration paid toindividual directors is determined by Sadanobu Takemasu, President and CEO, Representative Director,

33

(TRANSLATION ONLY)
Chairman of the Board, CSO as entrusted by the board of directors. The Company has delegated the above
authority to the President because it believes that a decision by the President is the most appropriate way todetermine the amount of remuneration from a comprehensive perspective, taking into account the businessenvironment and business performance of the Company and the execution of duties by each Executive
Director. The amount of remuneration paid to individual directors is determined by the President of theCompany based on consultation with and recommendations of the Nomination and Compensation Committee
in order to ensure transparency and fairness as well as the appropriate execution of delegated authority.
As the amount of remuneration paid to individual directors for the current fiscal year was determined in accordance with theseprocedures, the Board of Directors has determined that the decision is in line with the basic policy.

Members of the Nomination and Compensation Committee:
Consisting exclusively of non-executive directors and outside Audit & Supervisory Board members (part-time) (5independent directors out of 6 members)
Director

Kiyotaka Kikuchi

Outside Director

Outside Director

Satoko Suzuki

Outside Audit &Supervisory Board
MemberKeiko Yoshida

Outside Audit &Supervisory Board
MemberOutside Audit &Supervisory Board
MemberMiki Iwamura(Vice Committee Chairperson)
Yuko Gomi(Committee Chairperson)
Yuko Miyata③ Details of remuneration paid to directors

Remuneration paid to the Company’s directors is composed of basic compensation through monthly cash
payments during the term of office and stock price-linked compensation through the granting of stock options.
[Basic compensation]
Basic compensation of directors is composed of fixed compensation with fixed monthly payments andvariable compensation, which fluctuates in response to the Company’s financial performance for each period.
• Fixed compensation (60% of the total)
The amount of fixed compensation commensurate with the position is determined based on standards
stipulated by internal rules.
• Variable compensation (40% of the total)
In order to link the remuneration of directors with shareholder returns, the Company has adopted acompensation system that is linked to the Company’s financial performance.
Variable compensation is determined based on the percentage of budget achievement for EPS (earnings
per share) and SDGs targets (CO2 reduction rate per store, etc.). The EPS targets are aimed at better sharing
value with shareholders and linking this to the Company’s operating results, while the SDGs targets are
aimed at achieving the Company’s environmental vision of “Lawson Blue Challenge 2050!”((1) reducing
CO2 emissions; (2) reducing food waste; and (3) reducing plastic use (for containers, packaging andshopping bags)). The amount of variable compensation is determined based on the above by adding aqualitative assessment (10%) through the interview with the Nomination and Compensation Committee.
Regarding 3 non-executive directors, Miki Iwamura, Satoko Suzuki, and Kiyotaka Kikuchi, variable
compensation is not applicable as they are focused on their supervisory and advisory roles as the Company’s
representative directors and in the board of directors meetings.

34

(TRANSLATION ONLY)[Targets and results concerning variable compensation for the current fiscal year (March 2023 through February 2024)]

KPI

Ratio

March 2022 through February
2023
Targets

Reasons for selecting indicators

Results

EPS budget

20%

100%

112.2%

SDGs targets

10%

100%

136.7%

To link compensation with theCompany’s financial performance andthereby create a shared interest withshareholders
Toward achieving “Lawson Blue
Challenge 2050!”

Note: The variable compensation for the current fiscal year is calculated based on the financial results for the previous fiscal year
ended February 2023.

We reviewed part of our KPIs from March 2023 and decided to add the percentage of budget achievement
for business profit (index equivalent to consolidated operating profit by the Japanese standard, calculated bysubtracting the cost of goods sold as well as selling, general, and administrative expenses from the operating
profit). Laying out the same targets as employees will lead to improvement of the company’s competitiveness.
[Stock price-linked compensation]
Stock options as stock-based compensation
By incorporating stock options as stock-based compensation linked with stock prices as part ofcompensation paid to directors, the Company has a system in which management shares with stockholders
the benefits from a rise in stock price as well as the risks associated with a price decline. The Company
positions stock options as compensation that is linked to medium- to long-term improvement of its corporate
value.
Exercise price on stock options as stock-based compensation is 1 yen per share and the amount of units
granted is determined in accordance with the position of directors. In addition, stock options as stock-based
compensation can be exercised only during designated periods after retirement from office; directors are notallowed to exercise their stock option rights during their term in office.
[Targets and results concerning stock options as stock-based compensation for the current fiscal year
(March 2023 through February 2024)]

KPI

March 2022 through February 2023
Targets

EPS budget

Results100%

112.2%

Note: The stock options as stock-based compensation for the current fiscal year are calculated based on thefinancial results for the previous fiscal year ended February 2023.
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 of shareholders in accordance with laws and regulations.
• Amount of remuneration paid to directors
Resolutions at the general meeting of shareholders as of May 24, 2001: 400 million yen or less per year
Number of directors: 20• Amount of stock options granted to directors
Resolutions at the general meeting of shareholders as of May 27, 2014: 300 million yen or less per year
Number of directors: 9(7) Policy on Decisions Concerning the Amount of Remuneration Paid to Audit & Supervisory Board Members① Basic policy on decisions concerning the amount of remuneration paid to Audit & Supervisory Board
members
Regarding the amount of remuneration paid to Audit & Supervisory Board members, it is the Company’s basic
policy to reward each Audit & Supervisory Board member with a sufficient and adequate amount of compensation
for the execution of their duties.

35

(TRANSLATION ONLY)② Decision-making process for the amount of remuneration paid to Audit & Supervisory Board members

The amount of remuneration paid to Audit & Supervisory Board members is determined based on discussions
among Audit & Supervisory Board members and is within the remuneration amount limit resolved at the general
meeting of shareholders.
③ Details of remuneration paid to Audit & Supervisory Board members
The Company’s Audit & Supervisory Board members receive basic compensation (fixed compensation) incash.
The amount of basic compensation is decided based on discussions among Audit & Supervisory Board members,
taking into consideration whether or not they are working on a full-time basis and segregation of auditing duties.
④ Limit of the amount of remuneration paid to Audit & Supervisory Board members

The limit of the amount of remuneration paid to the Company’s Audit & Supervisory Board members isdetermined at the general meeting of shareholders in accordance with laws and regulations.
Amount of remuneration paid to Audit & Supervisory Board members
Resolutions at the general meeting of shareholders as of May 27, 2020: 100 million yen or less per year
Number of Audit & Supervisory Board members: 5

36

(TRANSLATION ONLY)(8) Outside Directors and Outside Audit & Supervisory Board Members① Relationship between Major Positions Concurrently Held and the Company (As of February 29, 2024)
Relationship between
the Company andPosition in the
Name
Position Concurrently Held
Details
Company Where
Company
Position Concurrently
Held
Vice President, AsiaGoogle Japan LLC
Pacific, Japan
Outside Director
Miki(Marketing)–(Independent)
IwamuraExecutive Vice
The University of Tokyo
President
Hitotsubashi University
Business School
Professor
School of International
Outside Director
SatokoCorporate Strategy–(Independent)
SuzukiSTANLEY ELECTRIC CO.,Outside director
LTD.
T.Kunihiro & Co. Attorneys-atLaw

Outside Audit &Supervisory Board
Yuko Gomi
Member(Independent)
ALPS ALPINE CO., LTD.

Outside Audit &Supervisory Board
Member(Independent)

Keiko
YoshidaPartner

Outside director
Audit and supervisorycommittee member

Shiba Kaikei Jimusho

Representative

Passlogy Co., Ltd.

Outside director––

HR consultant
Outside Audit &Supervisory Board
Yuko Miyata
MemberTakeuchi Manufacturing Co.,
(Independent)
Ltd.

Sole proprietorship
Outside Director,
Audit and Supervisory
Committee Member–

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

37

(TRANSLATION ONLY)② Major Activities during the Year

Position in the
Company

Outside Director(Independent)

Miki Iwamura

Outside Director(Independent)

Satoko Suzuki

Outside Audit &Supervisory
Board Member(Independent)

Yuko Gomi

Outside Audit &Supervisory
Board Member(Independent)

Keiko Yoshida

Outside Audit &Supervisory Board
Member (Independent)

Outline of activities, provision of comments,
and duties performed in line with expected roles

Name

Yuko Miyata

Ms. Iwamura attended 14 of 15 board of directors’ meetings held
throughout the year during her term in office, and as an executive
Vice President of a global IT company, appropriately questioned
and/or remarked based on a wealth of her experience and knowledge.
Ms. Iwamura is also a vice chairperson of the Company’s
Nomination and Compensation Committee.
Ms. Suzuki attended all 15 board of directors’ meetings held
throughout the year during her term in office and, as an academic,
appropriately questioned and/or expressed opinions based on her
extensive knowledge of consumption behavior, marketing and brandmanagement. Ms. Suzuki is also a member of the Company’s
Nomination and Compensation Committee.
Ms. Gomi attended all 15 board of directors’ meetings and all 17
Audit & Supervisory Board meetings held during the year and, as alawyer, appropriately questioned and/or remarked based on her
viewpoint of law as a lawyer and her broad knowledge. Ms. Gomi isalso chairperson of the Company’s Nomination and Compensation
Committee.
Ms. Yoshida attended all 15 board of directors’ meetings and all 17
Audit & Supervisory Board meetings held throughout the year and,as a certified public accountant, appropriately questioned and/or
expressed opinions based on her expertise in taxation, accounting andmanagement. Ms. Yoshida is also a member of the Company’s
Nomination and Compensation Committee.
Ms. Miyata attended all 12 board of directors’ meetings and all 13
Audit & Supervisory Board meetings held throughout the year during
her term in office and appropriately questioned and/or expressed
opinions based on her experience of human resource management
and her extensive knowledge in general business decision-making,governance, and compliance. Ms. Miyata is also a member of theCompany’s Nomination and Compensation Committee.

The above monetary amounts and the numbers of shares in this Business Report are rounded down to the nearest unit andpercentages are rounded to the nearest decimal place.

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

188 million yen

Sum of money and other property benefits to be paid by the Company and its
305 million yen
subsidiaries to the independent auditor
Notes:
1. The audit agreement entered into by the independent auditor and the Company does not clearly
distinguish the amount for the audit under the Companies Act and for the audit under the Financial
Instruments and Exchange Act, and the two amounts cannot be substantially distinguished from eachother. Therefore, the amount in 1) above indicates the total for the two audits.
2. As a result of confirmation and consideration of the content of the audit plan, former audits and actual
remuneration paid in the past, and the basis for calculating remuneration estimates, etc. as well as the
progress of discussions with accounting auditors, etc. in light of the Practical Guidance on
Collaboration with Accounting Auditors issued by the Japan Audit and Supervisory Board Members
Association, the Audit & Supervisory Board gave its consent with regard to the remuneration of
accounting auditors pursuant to Article 399, Paragraph 1 of the Companies Act.
3. 17 of the important subsidiaries of Lawson overseas are subject to audit by an independent auditor
other than Lawson’s independent auditor.
2)(3) Policy on Decisions Concerning Dismissal or Nonreappointment of the Independent Auditor
If the independent auditor violates or infringes the Companies Act, the Certified Public Accountant Act, orother laws or regulations, or the Company considers it necessary to do so, the board of directors shall, after
obtaining the agreement of the Audit & Supervisory Board, submit a proposal for dismissal or
nonreappointment of the independent auditor to a general meeting of shareholders. In addition, the Audit &Supervisory Board 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 theCompanies Act.

39

(TRANSLATION ONLY)

III. SYSTEMS AND POLICIES OF THE COMPANY
1. Determination of Resolution of System to Ensure the Propriety of Business Operations
Based on improvements and the operation of the preceding “2022 Basic Policy for Improvement of Internal Control
Systems,” which was approved at the board of directors’ meeting held on February 15, 2023, the Company passed a resolution
called the “2023 Basic Policy for Improvement of Internal Control Systems,” as indicated below.
(1)Systems to Ensure Compliance of the Execution of Duties by Directors, Senior Vice Presidents and Employees withLaws and Regulations and the Articles of Incorporation① The board of directors shall determine the improvement policies and plans for internal control systems, including thosefor compliance, 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 Audit & Supervisory Board Members shall independently audit the execution of duties by the directors, including
the status concerning the improvement of the internal control systems.
④ The Board of Directors shall raise and maintain the awareness of directors, senior vice presidents and employees
regarding compliance by thoroughly disseminating the Lawson Group Code of Conduct and the Lawson Ethical
Mission Statement as well as measures that shall include, but not be limited to: establishing a specialist committee(“Compliance & Risk Management Committee”), appointing a Chief Compliance and Risk Management Officer andestablishing a department that oversees compliance, assigning personnel in charge of compliance to each department,
streamlining the rules in relation to compliance, and providing training on ethics and conducting complianceawareness surveys on a periodic basis.
⑤ The Legal Department shall establish foundations for complying with legal requirements by identifying the laws andregulations applicable to the Company’s businesses and communicating the content thereof to the relevant departments
and sections. Especially for compliance with the Act on Prohibition of Private Monopolization and Maintenance ofFair Trade, Subcontract Act, consumer-related laws including Act Against Unjustifiable Premiums and Misleading
Representations, Food Labeling Act and Food Sanitation Act, the Intellectual Property Act, the Labor Standards Act,etc., the Company shall strive to disseminate information about applicable laws and regulations to employees.
⑥ The Internal Audit Department, which is independent from the business executing bodies, shall conduct efficient andeffective audits of the status concerning the improvement of the internal control systems, and recommend
improvements thereof, as required.
⑦ The Company shall establish and upgrade reporting routes for reporting any violations of laws, regulations, or internal
rules as well as any negative impacts on human rights in carrying out the Company’s business operations (hereinafter,“Violations of Laws and Regulations, etc.”). Moreover, by establishing consulting and reporting points (internal
contact points, a Group-wide consulting contact point, and a consulting contact point for employees and businesscounterparties for Lawson’s franchised stores) that can be used by informants with anonymity and peace of mind andmaking prospective users aware of such facilities, the Company shall strive for early detection of Violations of Laws
and Regulations, etc. across the entire Lawson Group and Lawson chain. If a Violation of Laws and Regulations, etc.
is discovered, the Company shall act promptly to rectify the situation and prevent any recurrence.
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.
⑨ The Company shall rotate personnel periodically to prevent wrongdoings resulting from specific employees
monopolizing certain business processes.

(2) Systems to Preserve and Manage Information Pertaining to the Execution of Duties by Directors① The Company shall record, preserve and manage information relating to decision making at important meetings such as
those of the board of directors and the management council, and authorizing documents, including those approved by
the president and representative director, as well as financial, clerical and risk and compliance-related information(including information contained in electromagnetic media). Moreover, the Company shall put in place a system allowing
relevant parties to inspect the above information.
② The Company shall manage and monitor its information systems in a secure manner, in addition 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.
④ The Company shall establish regulations regarding the safeguarding of personal information and management ofconfidential business information and shall properly and safely store and manage personal information and importantconfidential business information.
⑤ The Company shall establish a specialist committee (Information Security Management Committee), appoint a Chief
Information Security Officer and establish departments to generally control information security and allocate
appropriate personnel thereto. The Company shall also strive to establish an information security system for the
Lawson Group in order to promote information security risk management and System Technology Security in aninteractive and comprehensive manner.

40

(TRANSLATION ONLY)⑥ 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 Management① The Company shall establish a department to oversee risk management, and improve rules related to risk management
and group-wide risk-prevention systems during normal operations. Furthermore, each department shall identify risks thatmight have adverse effects on the Company’s management in connection with its business purposes, analyze theprobability of such risk factors materializing and their impact, and evaluate whether intensive countermeasures should
be taken as part of measures tailored to the nature of risks.
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, subsidiaries and affiliated companies (hereinafter “Associated Companies”) and conducting risk
management training.
③ The Company shall develop contingency systems and formulate policy for contingency response bodies in advance toprepare 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 takeeffective measures to prevent a reoccurrence.
④ As a designated public institution, the Company shall work to formulate a business continuity plan (BCP) and establish
a business continuity management (BCM) system in order to maintain the essential infrastructure functions ofconvenience stores and minimize any disruption to operations caused by events that could have a detrimental impact on
the Company, including a major disaster or infectious disease outbreak, such as that of a new strain of influenza. In order
to be prepared for major earthquakes, the Company shall conduct disaster prevention drills three times a year whileworking to improve effectiveness of the “Disaster Countermeasure Manuals” and the “BCP Manuals.”⑤ As for the risk of human rights violations in terms of business-related risks, the Company implements human rights due
diligence based on the Lawson Group Human Rights Policy and promotes initiatives to prevent and mitigate any negative
impacts on human rights.
(4) Systems to Ensure the Efficient Execution of Duties by Directors① The Company shall clarify the functional authority and responsibility of corporate officers and employees for decision
making and execution of business affairs. The Company shall also improve rules for the division of duties to ensure andencourage 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 The Company shall promote digital transformation (DX) through the renewal of IT infrastructure.
④ In order to promote the proper communication of information and communications between officers and employees,
the Company shall improve systems by which management guidelines and policies are disseminated to employees bycorporate officers, and important field information is properly communicated by employees to corporate officers in atimely manner.
⑤ The Company shall seek to improve labor productivity by promoting job satisfaction reform and enhancing
employees’ willingness to work and job satisfaction.
(5) Systems to Ensure the Propriety of Business Operations Conducted by the Corporate Group Consisting of theCompany, Its Parent Company, and Its Subsidiaries① Systems for reporting to the Company on matters pertaining to the execution of duties by the Associated Companies’
directors, etc., and systems for ensuring that the performance of duties by the Associated Companies’ directors, etc. isefficient.
• The Company shall establish rules concerning the management of Associated Companies and endeavor to maintain andenhance the Lawson brand through close collaboration with them. However, with regards to affiliated companies, theCompany will work to establish and maintain systems through phased implementation, taking into account such factors
as relations with other leading shareholders, difference in laws, regulations and business customs and the like of foreigncountries.
• While respecting the independence of Associated Companies, we shall step up action to optimize a system forsupervising Associated Companies by taking into account the reasons that the Company has taken a stake in the
Associated Company, engaging in negotiations or providing advice to Associated Companies as necessary, operating asystem for receiving reports from them, etc.
② Rules and other systems for risk management by Associated Companies and systems for ensuring that the AssociatedCompanies’ directors, senior vice presidents and employees execute their duties in conformity with laws, ordinances,and the articles of incorporation• While respecting the independence of Associated Companies, in view of the purpose of the Company’s equity
participation in Associated Companies, the Company shall keep the Associated Companies fully informed of the Lawson
Group Code of Conduct.
• The Company shall establish an organization with jurisdiction over Associated Companies, and a dedicated department

41

(TRANSLATION ONLY)

that can provide support to Associated Companies from technical standpoints, and endeavor to ensure the soundness ofoperations at Associated Companies.
• The Company shall appoint designated people at major Associated Companies to be responsible for promoting
compliance and risk management (hereinafter, “People in Charge of Compliance and Risk Management at AssociatedCompanies”). Moreover, the departments that oversee risk management and compliance for the Company also meetwith the People in Charge of Compliance and Risk Management at Associated Companies on a regular basis to confirm
the status of development of internal rules at Associated Companies and give advice if necessary, and thus strive toensure appropriate business operations across the entire Lawson Group.
• The Company will establish a system that the People in Charge of Compliance and Risk Management at AssociatedCompanies will report immediately to the Company if they are aware of the situation that could harm AssociatedCompanies.
• The Internal Audit Department shall cooperate in auditing the status of establishment of internal control systems at
Associated Companies, and promote improvements based on the results of audits.
③ The Company will report immediately to the parent company if they are aware of the situation that could harm theCompany and Associated Companies.
(6) Necessary Systems to Ensure Proper Financial Reporting by the Company and Its Group of Companies① The Company shall enhance systems for preparing financial statements according to laws, regulations, and accounting
standards and disclosing the same after they have been discussed, examined, and confirmed in accordance withregulations governing information disclosure in order to report financial information in a proper and timely manner.
② The Company shall establish a dedicated internal organization in order to properly implement the internal control
reporting system required by the Financial Instruments and Exchange Act as an internal control for financial reporting.
Furthermore, the Company shall establish a system for self-evaluation and third-party evaluation and improvement
through the identification and recording of business processes at important business bases and the status of Companywide 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 Audit & Supervisory Board Member Requests Employees to Assist with
Duties① The Company shall assign appropriate personnel to the auditors’ office (“Audit & Supervisory Board Members’ Staff”)
as employees exclusively to assist Audit & Supervisory Board Members in the execution of their duties.
② Audit & Supervisory Board Members’ Staff may serve concurrently as Audit & Supervisory Board Members of AssociatedCompanies.
③ Audit & Supervisory Board Members’ Staff shall have the authority to conduct investigations necessary for audits by
Audit & Supervisory Board Members following the instructions of Audit & Supervisory Board Members.
(8) Independence of Employees from Directors in the Preceding Item
Performance reviews of Audit & Supervisory Board Members’ Staff shall be conducted by the Audit & Supervisory
Board Members to ensure that Audit & Supervisory Board Members’ Staff carry out their duties appropriately. Personnel
changes and disciplinary action require the prior consent of the Audit & Supervisory Board Members.
(9)Systems for ensuring that directors, senior vice presidents and employees of the Company and directors, Audit &Supervisory Board Members, senior vice presidents and employees of Associated Companies make reports to
Audit & Supervisory Board Members and other systems concerning reports to Audit & Supervisory Board
Members① Directors, senior vice presidents and employees of the Company shall report important corporate management andbusiness administration matters, as well as the status and results of the execution of their duties, to Audit & Supervisory
Board Members so that the Audit & Supervisory Board Members can carry out their duties effectively. Such importantmatters include compliance and risk-related issues and other matters relating to internal control.
② Should directors, senior vice presidents and employees of the Company and directors, Audit & Supervisory Board
Members, senior vice presidents and employees of Associated Companies become aware of any fact or event that will
likely cause the Company or Associated Companies to suffer significant damage or loss, they shall immediately so
inform Audit & Supervisory Board Members of the Company.
③ Reports to Audit & Supervisory Board Members shall basically be made in good faith without fail, and shall be madepromptly, if required, in addition to periodic reports.
④ The Company will establish a system for cross-external consultation and reporting content will be reported to theauditors in a timely manner.
⑤ No person shall be subject to disadvantageous treatment by reason of having made a report to Audit & Supervisory
Board Members.
(10) Other Systems to Ensure Effective Audits by Audit & Supervisory Board Members① The representative directors and Audit & Supervisory Board Members shall have regular meetings to enhance smoothcommunications with each other.

42

(TRANSLATION ONLY)② Directors shall cooperate with the Audit & Supervisory Board Members with regards to communications, the collectionand exchange of information and so on between the Audit & Supervisory Board Members and the corporate directors
and the like of Associated Companies so that the Audit & Supervisory Board Members can perform their duties
appropriately.
③ Directors shall also cooperate in conducting surveys of significant business partners, which the Audit & Supervisory
Board Members deem necessary.
④ Directors shall enable the Audit & Supervisory Board Members to collaborate with outside experts such as lawyers
and certified public accountants, if any Audit & Supervisory Board Member deems it necessary in executing his/herduties.
⑤ The Legal Affairs, Risk Management, Internal Audit, and Finance and Accounting departments of the Company shallassist in conducting necessary surveys for audits when requested by any Audit & Supervisory Board Member.
⑥ Expenses etc. incurred by Audit & Supervisory Board Members in the performance of their duties shall be promptly
reimbursed, except in cases where the Company has proven that they were unnecessary for said performance of duties.
2. Outline of Operational Status of Systems to Ensure the Propriety of Business Operations
The Company operates internal control systems in accordance with the aforementioned basic policy. Their operational
status is as outlined below.
(1) Compliance and Risk Management Systems① The Company strives to be a good corporate citizen able to act according to high ethical standards and with integrity
and thoughtfulness by implementing the PDCA (Plan-Do-Check-Action) cycle while integrating its code of conduct,
education and training, communication function and monitoring activities in an organic manner.
② The Company has established internal rules on compliance and risk management. Along with that, the Company has
formulated the Lawson Group Human Rights Policy, the Lawson Group Purchasing Policy, and other policies, inaddition to the Lawson Ethical Mission Statement and the Lawson Group Code of Conduct as its code of conduct,
published them in the Lawson Group C&R Handbook, and distributed the handbook to all employees to disseminate
its content with the aim of ensuring the propriety of business operations across the Group.
③ The Company has appointed a CRO (Chief Compliance and Risk Management Officer) to promote and ensurecompliance while promoting risk management. In addition, CR Managers are assigned at each division and company
to take a leading role in promoting such measures. They are tasked with formulating, disseminating, and executing
compliance measures as well as risk countermeasures in their respective organizations to promote the creation of aculture that emphasizes compliance with social norms.
④ On the educational/training front, the Company aims to further improve ethical awareness and the ability to withstandcrises by conducting compliance and risk management training for all employees every year. In addition, the Company
has established an educational system to enable systematic need-based learning by providing training upon joining theGroup and upon promotion to a managerial position, training conducted by external lecturers for company management,
training by job types, and optional study group activities. The Company is seeking measures to ensure that employeesof various job positions and job types will be able to share problems to improve their operations by maintaining theseeducational/training programs while revising their content in line with changing risk conditions.
⑤ With respect to whistleblowing reports, the Company has established an internal consultation and reporting contact
point for compliance and risk management matters including those related to human rights violations,misconduct/corruption, and labor issues. In addition, there is the Group Independent Whistleblower Hotline to a law
firm and other external organizations as well as an anonymous consultation contact point for employees of theCompany’s business counterparties and store staff and a consultation contact point for FC store owners. The Company
shall seek to strengthen self-rectification within the organization by treating instances of whistleblowing appropriately,
reviewing the system to prevent recurrence, and introducing specific cases at meetings and through training programs
and internal notifications. Furthermore, the Company has also established a consultation contact point exclusively forsexual harassment and power harassment, which is offered by the Human Resources Department, and a LGBTQ
consultation contact point for anonymous consultation with a third party.
⑥ The Company has established the Legal Department that oversees compliance matters and the Risk and Information
Security Management Department that oversees risk management matters under the leadership of the CRO. The two
departments work in collaboration and act as the secretariat of the cross-organizational Compliance & Risk
Management Committee meetings and manage the progress of measures by each department, and thus promote aneffective compliance and risk management system. In addition, by working closely with the IT Department, the Risk
and Information Security Management Department acts as the secretariat of the Information Security Committee
meetings and further enhances measures to manage information security risks. Meanwhile, subcommittees have been
separately established under the Compliance & Risk Management Committee meetings in an effort to manage theprogress of key measures and prevent risks.
⑦ In terms of monitoring activities, the Company continuously conducts awareness surveys targeting all employees andquestionnaire surveys targeting the Company’s business partners with regard to matters such as product delivery andstore construction, and thus reviews and improves its compliance system from a broad perspective. In addition, theCompany provides thorough guidance and improvement proposals based on the results of audits conducted by theInternal Audit Department.

43

(TRANSLATION ONLY)⑧ At principal Lawson Group companies, officers responsible for promoting compliance and risk management (the“Company Compliance & Risk Management Officers”) have been appointed. Moreover, the departments that oversee
risk management and compliance for the Company also meet with the Company Compliance & Risk Management
Officers on a regular basis to confirm the status of development of internal rules of their companies and give advice ifnecessary, and thus strive to ensure appropriate business operations across the entire Lawson Group.
(2) Preparations against and Responses to Risks① To prepare for risks, Lawson has established departments in charge of risk management, formulated risk managementrelated regulations, and created a group-wide system to prevent risks during normal times. In each department as well,
we identify risks that may greatly influence management related to our business goals, analyze the probabilities ofsuch risks occurring and the level of their impact, assess the risks to see if they require intensive measures, and takemeasures in accordance with the characteristics of the risks.
Furthermore, to secure the effectiveness of risk management, we have established the Compliance & Risk
Management Committee meetings and Information Security Management Committee meetings while clearly defining
the administrative authority and responsibilities of these committees and chairpersons. We have also appointed risk
management personnel in each department and Associated Companies and implemented risk management training
programs and drills to maintain and improve risk management awareness.
② To respond to risks when they occur, with the purpose of minimizing damage in the event of a situation that may leadto an emergency or crisis such as interruption of its business or damage due to a risk occurring in the Lawson Groupor other situations that may cause such, Lawson has formulated rules to promptly take measures and report them inaccordance with the predetermined report route and method as well as standards to establish the headquarters’ responseto critical risk situations when they occur. After measures are taken for risks that have occurred, we analyze theircauses and then review and improve our measures to prevent any recurrence.
Furthermore, Lawson has established a system and rules related to business continuity management (BCM) to prepare
for emergencies that are accompanied with serious damage to the Lawson Group in order to avoid interruption ofimportant business, on the premise that people’s safety is secured, and resume business activities by the target recovery
time even if business activities are interrupted.
③ With regard to the food safety and hygiene management system, we strictly enforce food safety and hygiene
management in the process of developing, manufacturing and selling original products.
We use raw materials from factories that have passed examination based on our voluntary standards, and after
examination of product specifications, we take samples from the production line and inspect them to confirm theirsafety.
At our original product manufacturing plants, we have adopted a factory management method based on the HACCP
concept, and we have established a system to record each priority management item, such as cooking time and producttemperature, and to immediately investigate the cause of any problems and take measures when they occur.
Product information (thermal label) is displayed in compliance with laws and regulations, and the Quality Control
Department and a third-party organization check the content of the labeling.
In order to ensure thorough hygiene management at our stores, voluntary inspections at our stores and hygiene
inspections by the headquarters are conducted every month, and surprise inspections are conducted by externalorganizations.
④ With regard to the information security system, in order to promote the protection of personal information that theLawson Group obtains and uses, we have established the Lawson Group Privacy Policy, put in place a management
system for the protection of personal information, and appointed the manager of each division and the president ofeach company as the Personal Information Protection Administrator under the supervision of the CRO, who is an
executive officer. To help employees specifically understand and put the Privacy Policy into practice, the Company
produces and publishes various manuals illustrating potential mistakes and complaints that may arise at the stores,
accompanied by practical responses to them, for stores in an effort to raise awareness. For headquarters employees,
the Company has compiled matters to be observed in the form of the Information Security Guidebook and periodicallyconducts tests to confirm that the rules are being followed.
We have established a system for specifying methods of gathering and storing information as well as information
storage periods and for designating persons responsible for handling customers’ valuable information in each instanceafter advance checking by specialist departments.
When consigning responsibility for handling personal information to outside organizations, we require that a detailed
investigation of the organization’s security framework be conducted in advance and that consignment of the
responsibility be made only to organizations that satisfy Lawson’s conditions. An onsite or documented inspection isconducted annually, moreover, to ensure that the conditions are maintained.
In light of the increased risk of cyber-attacks in recent years, we are also striving to enhance our cyber-security bytaking measures from multiple perspectives, including technical, process/personnel, and physical aspects, and are
conducting drills during normal times to prepare for problems and reduce risks.
We also check our information security framework from a variety of perspectives to ensure that it remains robust byimplementing information security audits by our internal audit departments and employing specialized outsidecompanies to diagnose any vulnerabilities in our information systems.

44

(TRANSLATION ONLY)(3) System to Ensure the Propriety of Business Operations Conducted by the Corporate Group① Through a system that has been established for the reporting of any risks that occur at a company of the Lawson Groupto the Company, information on risk cases at the Company or the Lawson Group is appropriately reported to the parent
company on a timely basis.
② By establishing an organization in charge of the Lawson Group companies as well as a specialized department tosupport the Lawson Group from a specialist perspective, the Company shall strive to ensure the appropriateness of theoperations of the Lawson Group companies.
(4) Securing Effectiveness of Performance of Audit & Supervisory Board Members① Audit & Supervisory Board Members’ Staff are assigned to the auditors’ office to provide exclusive assistance to Audit& Supervisory Board Members in the execution of their duties. Audit & Supervisory Board Members’ Staff have theauthority to conduct investigations necessary for audits by Audit & Supervisory Board Members. In addition, relevant
departments assist in conducting necessary investigations for audits by Audit & Supervisory Board Members inaccordance with the content of the audits.
② With regard to reporting to Audit & Supervisory Board Members, matters that should be reported to Audit &Supervisory Board Members have been reported to Audit & Supervisory Board Members in a timely and appropriatemanner.

The above monetary amounts and the numbers of shares in this Business Report are rounded down to the nearest unit andpercentages are rounded to the nearest one decimal place.

45

Consolidated Statement of Financial Position(TRANSLATION ONLY)(Millions of yen)
Assets
Account item

Liabilities
As of February
28, 2023(for reference)

As ofFebruary 29,
2024

679,839399,523
223,648
13,7103,595
28,68910,671

715,868
432,464
234,295
7,707
879
29,176
11,345

1,562,582
186,398
1,069,233
46,73450,15051,416

1,581,630
193,270
1,058,069
47,841
52,25864,003

6,532

Account item

As of February
As of28, 2023
February 29,(for reference)
2024

Current liabilities
Trade and other payables
Deposits received
Borrowings
Income taxes payable
Other financial liabilities
Provisions
Other current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Other financial liabilities
Retirement benefit liability
Deferred tax liabilities
Provisions
Other non-current liabilities

905,279
231,925
274,224
92,877
10,800273,465
2,480
19,505
1,083,284
80,000923,588
21,407
16,797430
37,642
3,417

1,011,192
256,411
202,954
90,85016,012418,774
2,490
23,699997,005
99
916,105
21,585
17,280386
37,840
3,706

6,665

Total liabilities

1,988,563

2,008,197

92,916

97,502Other financial assets

5,742

8,399

EquityTotal equity attributable toowners of parent

249,941

284,752

Deferred tax assets
Other non-current assets

48,234
5,223

47,543
6,077

2,242,421

2,297,498

Share capital
Capital surplus
Treasury shares
Other components of equity
Retained earnings
Non-controlling interests
Total equity
Total liabilities and equity

58,506
46,934(948)
3,799
141,650
3,916
253,858
2,242,421

58,50647,058(947)
5,705
174,4294,548
289,300
2,297,498

Current assets
Cash and cash equivalents
Trade and other receivables
Finance lease receivables
Other financial assets
Inventories
Other current assets

Non-current assets
Property and store equipment
Right-of-use assets
Investment property
Goodwill
Intangible assets
Investments accounted for using
equity method
Guarantee deposits

Total assets

46

(TRANSLATION ONLY)

Consolidated Statement of Profit and Loss
(Millions of yen)Account item
Gross operating revenues
Cost of sales

From March 1, 2022 toFebruary 28, 2023
(for reference)
1,000,385
473,074

Operating gross profit

527,310

Selling, general and administrative expenses

462,998
3,133

Other income
Other expenses

12,985

From March 1, 2023 to
February 29, 2024
1,087,964
507,648580,315486,225
2,778
13,442

1,468
9,158

2,104

363

1,250

Profit before tax
Income taxes

47,134
17,461

77,292
24,604

ProfitProfit (loss) attributable to29,673

52,687

Owners of parent

29,708(34)

52,148Finance income
Finance costs
Share of profit of investments accounted for using
equity method

Non-controlling interests

47

9,488

538

(TRANSLATION ONLY)

Consolidated Statement of Changes in Equity(From March 1, 2023 to February 29, 2024)(Millions of yen)
Equity attributable to owners of parent
Other components of equity

Share capital

Balance as of March 1, 2023

58,506

CapitalsurplusTreasuryshares46,934(948)

Financial assets
Exchange
Remeasure- measured at fairdifferences onments ofvalue throughtranslation ofdefinedotherforeign
benefit plans comprehensive
operations
income–(1,278)

5,077

Total

3,799

ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury shares

(105)

268

1,637

1,800

(105)

268

1,637

1,800

Noncontrollinginterests

Total equity

141,650

249,941

3,916

253,858

52,14852,148538

52,687

1,800

97

1,897

53,949635

54,58552,148(4)(19,264)

Exercise of share acquisition rights(issuance of treasury shares)(5)

Share-based payment transactions

130

5Transfer to retained earnings

Balance as of February 29, 2024

Total

(4)

Dividends of surplus

Total transactions with owners

Retainedearnings

105(19,264)(4)(2)(19,267)

0

0

130

130

105

(104)

1

(1)

(0)

–

124

1

105

–

–

105

(19,369)(19,138)(3)(19,142)

58,50647,058(947)–(1,009)

6,715

5,705

174,429

284,752

4,548

289,300

48

(TRANSLATION ONLY)

Notes to Consolidated Financial Statements(Notes on Important Matters Forming the Basis for Preparation of Consolidated Financial Statements)
1. Standards for preparation
Consolidated financial statements of Lawson, Inc. (the “Company”) and its subsidiaries (collectively, the “Group”) are preparedin accordance with International Financial Reporting Standards (hereinafter, “IFRS”) pursuant to the provisions of Article 120,
Paragraph 1 of the Regulations on Corporate Accounting. Some of the line items and notes required under IFRS have been omitted
from the consolidated financial statements pursuant to the provision of the latter part of the Paragraph.
2. Scope of consolidation
Number of consolidated subsidiaries: 30(Domestic)
Lawson urbanworks, Inc.
Lawson Store100, Inc.
Lawson Minamikyushu, Inc.
SCI, Inc.
SEIJO ISHII CO., LTD.
Lawson Entertainment, Inc.
United Cinemas Co., Ltd.
Lawson Bank, Inc.
BestPractice, Inc.
(Foreign)

Lawson (China) Holdings, Inc.
Shanghai Lawson, Inc.
Shanghai Le Song Trading Co., Ltd.
Shang Hai Gong Hui Trading Co., Ltd.
Zhejiang Lawson, Inc.
Chongqing Lawson, Inc.
Dalian Lawson, Inc.
Beijing Lawson, Inc.
BEIJING LUOSONG Co., Ltd.
Chengdu Lawson, Inc.
Guangdong Lawson, Inc.
Shenzhen Lawson, Inc.
Saha Lawson Co., Ltd.
Lawson Philippines, Inc.
And 7 other entities

Of the subsidiaries listed above, the Company acquired additional shares in Lawson Minamikyushu, Inc. to make it aconsolidated subsidiary from an equity-method associate (joint venture).
Lawson (China) Holdings, Inc. changed its Chinese trade name on November 24, 2023.
United Cinemas Co., Ltd. will have changed its name to Lawson United Cinemas, Inc. effective March 1, 2024.
3. Application of the equity method
Number of equity-method associates: 11
Lawson Okinawa, Inc.
Lawson Kochi, Inc.
And 9 other entities
4. Summary of significant accounting policies(1) Basis of consolidation① Subsidiaries
The Company consolidates entities that it directly or indirectly controls. Therefore, entities in which the Group owns amajority of voting rights are generally treated as consolidated subsidiaries of the Group. However, even in cases where theGroup does not own the majority of voting rights of an entity, the entity is treated as a consolidated subsidiary if the Group isdeemed to effectively control the decision-making body of the entity.
A subsidiary is consolidated from the date of acquisition, or the date on which the Group obtains control, to the date on
which the Group loses the control.
If any accounting policies applied to a subsidiary differ from those applied to the Group, adjustments are made to thefinancial statements of the subsidiary as necessary.

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(TRANSLATION ONLY)

Intragroup transactions and balance of receivables/payables, as well as unrealized gains and losses arising from intragrouptransactions are eliminated when preparing the consolidated financial statements.
Changes in ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
The carrying amount of the parent’s interest and non-controlling interest are adjusted to reflect changes in their relative interestin the subsidiaries. Any difference between the amount of non-controlling interest and the amount of consideration paid or
received is recognized directly in equity and attributed to the parent.
If control over a subsidiary is lost, gains or losses arising from the loss of control are recognized in profit or loss.
② Associates
An associate refers to an entity that is not controlled by the Group but for which the Group has significant influence overthe decisions on financial, operating, or business policies. If the Group has 20% or more but not more than 50% of the voting
rights of another entity, the Group is presumed to have significant influence over that entity. Entities over which the Group
has significant influence on their financial, operating, or business policy decisions are also included in associates even if itholds less than 20% of the voting rights. In contrast, the equity method is not applied in cases where the Group is deemed not
to have significant influence even if it holds 20% or more of the voting rights.
An associate is accounted for using the equity method from the date on which the Group has come to have significant
influence until the date on which the Group loses significant influence.
③ Joint arrangement
Joint arrangement is a contractual arrangement of which two or more parties have joint control. The Group classifies its
involvement in joint arrangements into joint operations (where the Group has rights to the assets and obligations for theliabilities, relating to the arrangement) and joint ventures (where the Group only has rights to the net assets of the arrangement),
depending on the rights and obligations of the parties to the arrangement. For the Group’s joint operations, the assets, liabilities,
revenues, and expenses relating to its interest in the joint operations are recognized, while joint ventures are accounted forusing the equity method.
④ Reporting date
The consolidated financial statements include financial statements of subsidiaries whose closing dates are different fromthat of the Company and investments in equity-method associates, for which unification of the fiscal year end is impracticabledue to the local legal system or relationship with other shareholders. The fiscal year end of most subsidiaries and equitymethod associates is December 31, and adjustments have been made for the effects of significant transactions or events that
occurred between their closing dates and that of the consolidated financial statements.
The closing date of Lawson Bank, Inc. is March 31. For the preparation of the consolidated financial statements, theCompany uses financial statements prepared based on the provisional closing of accounts as of the end of the fiscal year.
(2) Business combinations
The Group accounts for business combinations by applying the acquisition method. The consideration transferred in a businesscombination is measured as the sum of the acquisition-date fair values of the assets transferred by the Group, the liabilities
incurred by the Group to former owners of the acquiree, and the equity instruments issued by the Group in exchange for control
over the acquiree. The non-controlling interests in the acquiree are measured at fair value. The acquisition-related costs incurred
are recognized in profit or loss.
In cases where the sum of the consideration transferred and the amount of any non-controlling interest in the acquiree exceeds
the net of the amounts of the identifiable assets acquired and the liabilities assumed, goodwill is recognized and measured at theexcess amount.
In cases where the sum of the consideration transferred and the amount of any non-controlling interest in the acquiree falls
short of the net of the amounts of the identifiable assets acquired and the liabilities assumed, the difference is recognized in
profit or loss.
In cases where a business combination is conducted in stages, the equity interests in the acquiree previously held by the Groupare revalued at the acquisition-date fair value, and any such gain or loss on step acquisition is recognized in profit or loss.
Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in othercomprehensive income are accounted for under the same method used by the acquirer in disposing of the interest.
If the initial accounting for a business combination has not been completed by the end of the reporting period in which thebusiness combination occurs, the Group accounts for the transaction at provisional amounts. Subsequently, the provisionalamounts are adjusted during the measurement period, which does not exceed one year from the acquisition date.
(3) Foreign currency translation
Items in financial statements denominated in a foreign currency are translated at the exchange rate at the transaction date, andmonetary items are retranslated at the exchange rate as at the closing date. Non-monetary items measured at fair value are
retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured athistorical cost are not retranslated. The difference arising from the retranslation of monetary items is recorded in “Other income”
or “Other expenses” in the consolidated statement of profit and loss.

50

(TRANSLATION ONLY)
The assets and liabilities of foreign operations, such as overseas subsidiaries and associates are translated into Japanese yenat the respective exchange rates on the closing date. Revenue and expense items are translated at the average exchange rates forthe period, unless exchange rates have fluctuated significantly during that period. Exchange differences arising from translation
are recognized in other comprehensive income, net of tax, and under “Other components of equity.”
If control is lost due to the disposal of foreign operations, the cumulative amount of exchange difference is reclassified into
profit or loss. In the case of partial disposal that does not lead to the loss of control of a subsidiary, the ratio of ownership interestin the cumulative amount of exchange difference is reallocated to non-controlling interests, but no amount is recognized in profit
or loss. In other cases of partial disposal that leads to the loss of significant influence or joint control, the amount proportionate
to the disposal of the cumulative amount of exchange difference is reclassified into profit or loss.
Goodwill and fair value adjustments resulting from the acquisition of foreign operations are retranslated as assets and liabilities
of such foreign operations as at the end of the reporting period, and exchange differences are recognized in “Other componentsof equity” and accumulated in equity.
(4) Financial instruments① Financial assets
i. Classification
The Group classifies financial assets into those measured at amortized cost and those measured at fair value through othercomprehensive income or profit or loss.
Financial assets measured at amortized cost
Financial assets are classified as those measured at amortized cost if both of the following conditions are met; otherwise,
they are classified as financial assets measured at fair value:• The assets are held for the purpose of collecting contractual cash flows.
• The contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.
Financial assets measured at fair value
Of the financial assets other than those measured at amortized cost, debt instruments are classified as financial assets
measured at fair value through other comprehensive income (“FVTOCI financial assets”) if both of the following conditions
are met:• The assets are held for the purpose of both collecting contractual cash flows and selling the assets.
• The contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.
Of the financial assets other than those measured at amortized cost, those not stated above are classified as financial assets
measured at fair value with fair value changes recognized through profit or loss (“FVTPL financial assets”). However, theGroup elects to designate equity instruments not held for trading purposes as equity financial assets measured at fair value
with fair value changes recognized through other comprehensive income (“FVTOCI financial assets”). A financial asset isclassified as held for trading if:• It is acquired or incurred principally for the purpose of selling it in the near term.
• On initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which
there is evidence of a recent actual pattern of short-term profit-taking.
• It is a derivative (except a derivative that is a financial guarantee contract or a designated and effective hedging
instrument).
ii. Initial recognition and subsequent measurement
The Group determines the classification of financial assets at initial recognition. The Group initially recognizes trade andother receivables on the transaction date, and all other financial assets at the transaction date on which the Group became aparty to the contract concerning such financial instruments.
Financial assets measured at amortized cost are recognized initially at fair value, plus transaction costs that are directly
attributable to the acquisition of the financial assets. However, trade receivables are recognized initially at their transaction
price if they do not contain any significant financing component. After initial recognition, financial assets are measured atamortized cost using the effective interest method.
Of the FVTOCI financial assets, changes in the fair value of equity financial assets are not recognized in profit or loss anddirectly transferred from other comprehensive income to retained earnings when the assets are derecognized. Dividend income
from equity financial assets at FVTOCI is recognized in profit or loss as part of finance income at the time when the right toreceive the dividend is established.

51

(TRANSLATION ONLY)

Of the FVTOCI financial assets, changes in the fair value of debt financial assets are recognized in profit or loss when theassets are derecognized.
FVTPL financial assets are measured at fair value with changes in the fair value being principally recognized in profit orloss.
iii. Impairment
The Group estimates expected credit losses, and recognizes and measures a loss allowance for financial assets measured atamortized cost and debt instruments classified as FVTOCI financial assets. If credit risk on a financial instrument at a reporting
date has not increased significantly since the initial recognition, a loss allowance for the financial instrument is calculated
based on expected credit losses arising from possible events of default within 12 months from the reporting date. Meanwhile,
if credit risk on a financial instrument at a reporting date has increased significantly since the initial recognition, a loss
allowance for the financial instrument is calculated based on expected credit losses arising from all possible events of default
in expected life of the financial instrument (lifetime expected credit losses).
Based on past due information and other reasonable and supportable information that is available to the Group, the Groupassesses whether credit risk has significantly increased. If the financial instrument is determined to have low credit risk at theend of the reporting period, the Group assumes that the credit risk on a financial instrument has not increased significantly
since initial recognition.
Expected credit loss is measured based on the present value of the difference between all contractual cash flows that are
due to the entity in accordance with the contract and all the cash flows that the entity expects to receive.
Evidence of credit impairment is determined through events, including significant financial difficulty of the issuer or the
debtor, and a breach of contract, such as a default or past due event. When one or more of these events have occurred, theGroup individually assesses the financial asset as a credit-impaired financial asset and measures the expected credit loss based
primarily on historical credit loss experience and future recoverable amounts. For financial assets that are not credit impaired,expected credit losses are measured collectively based mainly on historical credit loss experience and provision rates adjusted,
as necessary, for current and future economic conditions.
However, for trade receivables that do not contain any significant financing component, a loss allowance is always
calculated at an amount equal to the lifetime expected credit losses, regardless of whether the credit risk has increased
significantly since initial recognition.
When the Group determines that receivables are unlikely to be collected, it directly writes off the amount of expected credit
losses from the receivables to derecognize them.
A provision for loss allowance on financial assets is recognized in profit and loss. If any event that reduces the loss
allowance arises, reversal of loss allowance is recognized in profit or loss.
iv. Derecognition
The Group derecognizes financial assets when and only when the contractual rights to the cash flows from the financial
assets expire, or when substantially all the risks and rewards of ownership have been transferred as a result of the transfer ofthe financial assets. In cases where the Group neither transfers nor retains substantially all the risks and rewards of ownership,
but continues to control the assets transferred, the Group recognizes the retained interest in assets and related liabilities thatmight be payable.
② Financial liabilities
i. Classification
The Group classifies financial liabilities as those measured at amortized cost.
ii. Initial recognition and subsequent measurement
The Group initially recognizes financial liabilities on the transaction date when the Group becomes a party to the contract
concerning such financial instruments. Financial liabilities are initially recognized at fair value, net of directly attributabletransaction costs.
After initial recognition, financial liabilities are measured at amortized cost using the effective interest method. The
effective interest rate is the rate that exactly discounts the estimated future cash payments through the expected life of thefinancial liability (or a shorter period where appropriate) to the net carrying amount. At the time of initial recognition, there
is no financial liability irrevocably designated as a financial liability measured at fair value through profit or loss.
iii. Derecognition
The Group derecognizes financial liabilities when the obligation specified in the contract is discharged, cancelled, or expires.
③ Offsetting financial assets and financial liabilities
If the Group currently has a legally enforceable right to offset the balance and has the intention either to settle on a net basis
or to realize assets and settle liabilities simultaneously, the Group offsets financial assets against financial liabilities andpresents the net amount in the consolidated statement of financial position.

52

(TRANSLATION ONLY)④ Equityi. Common shares
For equity instruments issued by the Company, the proceeds from issuance are recorded in “share capital” and “capitalsurplus,” and costs directly attributable to the issuance (after tax effect) are deducted from “capital surplus.”
ii. Treasury shares
When treasury shares are acquired, the consideration paid, including directly attributable transaction costs net of tax, is
recognized as a deduction from equity.

(5) Cash and cash equivalents
Cash and cash equivalents include cash on hand, demand deposits, and short-term investments maturing in three months orless from the date of acquisition that are readily convertible to known amounts of cash and subject to an insignificant risk ofchanges in value.
(6) Inventories
The cost of inventories comprises costs of purchase, costs of conversion, and all costs incurred in bringing the inventories tothe present location and condition.
Inventories are measured at the lower of cost and net realizable value. Net realizable value is presented in the amount of
estimated selling price of inventories, less the estimated costs necessary to make the sale in the ordinary course of business.
The cost of inventories is determined mainly using the retail method or the weighted-average method. For the retail method,
inventory grouping used for the calculation of profit margin is reviewed so that the results approximate cost.
(7) Property and store equipment① Recognition and measurement
Property and store equipment are measured using the cost model and presented at cost, net of accumulated depreciation andaccumulated impairment losses. Cost includes the expenses directly attributable to the acquisition of the assets, the costs of
dismantling and removing the items and restoring the site on which they are located, and borrowing costs to be capitalized.
② Depreciation
Depreciation on assets other than land and construction in progress is recognized over their respective estimated useful lives
using the straight-line method. The estimated useful lives of major classes of assets are as follows:
Buildings and structures:
10 to 34 years
Tools, furniture and fixtures:
5 to 8 years
The estimated useful lives, residual values, and depreciation method are reviewed at the end of each reporting period, andwhen any changes are made, those changes are applied prospectively as changes in accounting estimates.
③ Derecognition
Property and store equipment are derecognized upon disposal or when future economic benefits are no longer expectedfrom their continued use or disposal. A gain or loss arising from the derecognition of an item of property and store equipment
is included in profit or loss when the asset item is derecognized.
(8) Investment property
Investment property is property held to earn rentals or capital appreciation or for both. Investment property includes properties
owned by the Group and those held as right-of-use assets.
The Group adopts the cost model to measure investment properties, and presents them at cost, net of accumulated depreciation
and accumulated impairment losses.
Depreciation on assets other than land and right-of-use assets is calculated over their respective estimated useful lives, whichare 10 to 34 years, using the straight-line method. Depreciation on right-of-use assets is calculated using the straight-line method
over the shorter of their useful lives or lease terms.
(9) Goodwill and intangible assets① Goodwill
Measurement of goodwill at initial recognition is described in “(2) Business combinations.”
After initial recognition, goodwill is presented at cost, less accumulated impairment losses.
Goodwill is not amortized, but is allocated to cash-generating units identified based on the geographic area and type ofbusiness in which they operate, and tested for impairment annually, or whenever there is an indication of impairment.
Impairment loss on goodwill is recognized in profit or loss in the consolidated statement of profit and loss, and is not
subsequently reversed.
② Intangible assets
Intangible assets are measured using the cost model and presented at cost, less accumulated amortization and accumulated

53

(TRANSLATION ONLY)

impairment losses.
Separately acquired intangible assets are measured at cost at initial recognition. Cost of intangible assets acquired in abusiness combination is measured at fair value at the acquisition date. Expenditures on internally generated intangible assets
are all recognized as expenses in the period when incurred, except development costs that qualify for capitalization.
Except for those with indefinite useful lives, intangible assets are amortized over their respective estimated useful life using
the straight-line method. The estimated useful lives of major intangible assets are as follows:• Software:
5 years• Trademark rights:
Primarily 20 years
The estimated useful lives, residual values, and amortization method are reviewed at the end of each reporting period, andif any changes are made, those changes are applied prospectively as changes in accounting estimates.
(10) Leases① As a lessee
The Group recognizes right-of-use asset and lease liability at the commencement date of the lease.
The lease liability is initially measured at the present value of the lease payments that are not paid at that date. The rightof-use asset is initially measured at the amount of the initial measurement of the lease liability, adjusted for any prepaid lease
payments.
For subsequent measurement of right-of-use assets, a cost model is applied. Right-of-use assets are presented at cost, netof accumulated depreciation and accumulated impairment losses on the consolidated statement of financial position.
Right-of-use assets are depreciated using the straight-line method over the shorter of their respective useful lives or leaseterms.
The lease term is determined as the non-cancellable period of a lease, together with both periods covered by an option toextend the lease if the lessee is reasonably certain to exercise that option and periods covered by an option to terminate thelease if the lessee is reasonably certain not to exercise that option.
For initial measurement of lease liabilities, they are discounted using the interest rate implicit in the lease, if that rate canbe readily determined. If that rate cannot be readily determined, they are discounted at the incremental borrowing rate.
After the initial recognition, lease liabilities are remeasured to reflect changes in lease payments when estimated useful lifeof right-of-use assets or changes in lease payments if lease terms or lease payments are revised. The amount of theremeasurement of lease liabilities is recognized as an adjustment to the carrying amount of the right-of-use asset. Impairmentof right-of-use assets is as described in “(11) Impairment of non-financial assets.”
For short-term leases whose lease terms end within 12 months, exemptions are applied not to recognize right-of-use assets
or lease liabilities, but to recognize lease payments related to the leases as expenses over the lease period by the straight-line
method. For components of a contract, the Group has applied, for underlying properties, not to separate non-lease components
from lease components, but to account for each lease component and any associated non-lease components as a single lease
component.
② As a lessor
A lease is classified as a finance lease if, under the terms of contract, the Group transfers substantially all the risks andrewards incidental to ownership of an underlying asset to the lessee. The amount received from the lessee is presented in“Trade and other receivables” at an amount equal to the net investment in the lease. The finance income is allocated over thelease term on a rational basis against the gross investment in the lease.
Leases other than finance leases are classified as operating leases, and lease payments received are recognized evenly overthe lease term.
(11) Impairment of non-financial assets① Testing for impairment
The Group assesses at each reporting date the carrying amount of its non-financial assets, excluding inventories anddeferred tax assets to determine whether there is any indication that an asset may be impaired. If there are any events orchanges in circumstances indicating that the carrying amount may not be recoverable, the recoverable amounts of such assets
are estimated by assuming that there are indications of impairment.
The recoverable amount of goodwill and intangible assets with indefinite useful lives are assessed at the same time every
year.
Testing for impairment is conducted by asset, cash-generating unit or group of cash-generating units. If the carrying amountof the asset, cash-generating unit, or group of cash-generating units exceeds its recoverable amount, an impairment loss isrecognized as loss.
The recoverable amount of the asset, cash-generating unit, or group of cash-generating units is the higher of the value in
use or the fair value less costs to sell. Value in use is calculated by discounting the estimated future cash flows to the present
value using the pretax discount rate reflecting the risks specific to the asset or the cash-generating unit.

54

(TRANSLATION ONLY)② Cash generating units
In cases where multiple assets together generate cash inflows, the smallest unit that generates cash inflows that is largely
independent of the cash inflows from other assets or group of assets is referred to as a cash-generating unit.
A cash-generating unit, including goodwill, is set as the smallest unit at which the goodwill is managed for internalreporting purposes, and that is smaller than an operating segment. If impairment loss is recognized on a cash-generating unit,
the carrying amount of any goodwill allocated to the cash-generating unit is reduced first, and if there is any residual amount,the carrying amounts of the other assets of the unit are reduced proportionally.
③ Reversal of impairment loss
Impairment recognized in the past is reversed up to the recoverable amount if there are indications of reversal of impairment
and changes in the estimates used to determine the asset’s recoverable amount. However, no reversal is made for impairment
losses recognized for goodwill. Reversal of impairment loss is recognized up to the carrying amount that would have been
determined had no impairment loss been recognized for the asset in prior years.
(12) Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event; it isprobable that the Group will be required to settle the obligation; and a reliable estimate can be made of the amount of theobligation. The amount recognized as provision is the best estimate calculated by taking into account the risks and uncertainties
surrounding the obligation and is discounted when the time value of money is material. An increase in liabilities due to theunwinding of discount over a passage of time is recognized as finance costs.
Asset retirement obligations
An asset retirement obligation is recorded in an estimated cost required to restore the property to its original state mainly withrespect to properly lease contracts for stores. The calculations are based on an estimated useful life of mainly 20 years fromacquisition, and discount rates of mainly 1.1% to 1.5%.
(13) Employee benefits① Postemployment benefits
The Group has adopted defined benefit plans and defined contribution plans as postemployment benefit plans for its
employees.
i. Defined benefit plans
Obligations related to defined benefit plans are recognized in the amount of benefit obligations under such plans, net ofthe fair value of the plan assets, in the consolidated statement of financial position. Benefit obligations are calculated at thediscounted present value of the amount of estimated future benefits corresponding to the consideration for services alreadyprovided by employees with respect to each plan. Benefit obligations and plan assets are remeasured in each period, andbenefit obligations are calculated by qualified pension actuaries.
Changes in benefit obligations for employees’ past services due to the revision of the pension plan are recognized in profit
or loss.
The Group recognizes changes in obligations due to the remeasurement of benefit obligations and plan assets of defined
benefit plans in other comprehensive income, and immediately reclassifies the amount accumulated in “Other components ofequity” to “Retained earnings.”
ii. Defined contribution plans
Defined contribution plans are postemployment benefit plans in which the employer makes a certain amount ofcontributions to fund postemployment benefits and does not bear obligations exceeding the amount contributed. The
obligation to make contributions under defined contribution plans are recognized in profit or loss as expenses in the period
during which services were provided by employees.
②

Other employee benefits
Short-term employee benefits are measured on an undiscounted basis and are recognized as expenses when employees
render the related service.
Bonuses are recognized as a liability in the amount estimated to be paid if the Group has a present legal or constructive
obligation to make such payment and the amount can be reliably estimated.
Paid absence accruals are recognized as a liability in the amount estimated to be paid under the plan, if the Group has alegal or constructive obligation for the accumulating paid absence plan, and the amount can be reliably estimated.

(14) Share-based payments
The Company grants stock options to its directors to allow them to exercise their rights to purchase shares of the Company.
Stock options are calculated based on the fair value at the grant date and expensed on a straight-line basis over the period inwhich the Company receives services as consideration, while a corresponding amount is recorded as equity. The fair value ofstock options is calculated based on the Black-Scholes model.

55

(TRANSLATION ONLY)(15) Revenue① Methods for recognizing revenue
The Group recognizes revenue from contracts with customers by applying the following steps:(Lease payments under IFRS 16 Leases (“IFRS 16”) and interest and dividend income under IFRS 9 Financial Instruments(“IFRS 9”) are excluded.)
Step 1: Identify the contracts with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognize revenue when or as the entity satisfies a performance obligation.
Since the consideration for transactions is received primarily within one month after the performance obligation is satisfied,
the practical expedient is used, and no adjustment is made for significant financial components.
②

Revenue recognition in the Group’s main businesses
The Group primarily operates the Domestic Convenience Store Business, Seijo Ishii Business, Entertainment-related
Business, Financial Services Business, and Overseas Business.
i. Revenue from franchised stores in the Domestic Convenience Store Business, Seijo Ishii Business, and Overseas
Business
The Group has contractual obligations to franchisees in the Domestic Convenience Store Business, Seijo Ishii Business,
and Overseas Business, to provide store opening preparation services, operational know-how, trademarks and other licenses,
offer services including training and accounting paperwork, and lend store fixtures, signboards, and information systems. As
these closely interrelated activities cannot be separated and performed as individual services, they are considered to be asingle performance obligation, except for lease transactions. This performance obligation is considered to be satisfied overtime and as services are rendered; however, because the transaction price for royalty income is a variable royalty based on
the operating gross profit of the store, revenue is recognized over the contract period as such operating gross profit is generated.
ii. Revenue from the Domestic Convenience Store Business, Seijo Ishii Business, Entertainment-related Business,
Financial Services Business, and Overseas Business
The Group sells consumer goods at its directly managed stores in the Domestic Convenience Business, Seijo Ishii Businessand Overseas Business; and music and video software and concert tickets in the Entertainment-related Business. Revenue
from the sale of these goods is recognized when merchandise is delivered to a customer, at which time control is deemed tohave been transferred.
In addition, certain subsidiaries in the Domestic Convenience Store Business wholesale raw materials or merchandise.
Revenue from the sale of these goods is recognized when merchandise is delivered to and accepted by a customer, at whichtime control is deemed to have been transferred.
In the Entertainment-related Business, which operates multiplex movie theaters, revenue is recognized when the screening
is provided, at which time control is deemed to have been transferred.
The Financial Services Business provides, through ATMs, transactions using cash cards of partner financial institutions
and deposit services for sales proceeds from franchised store owners.
In identifying performance obligations, the Group conducts principal versus agent consideration. If the nature of its promise
is a performance obligation to provide specified goods or services itself, the Group presents revenue as the principal at thegross amount of the consideration; if it is a performance obligation to arrange for those goods or services to be provided by
the other party, the Group presents revenue as agent at the fee or commission amount or net amount of the consideration in
the consolidated statement of profit and loss.
To determine that the Group is a principal, the following three indicators are considered.
• The Group is primarily responsible for fulfilling the promise to provide the specified good or service.
• The Group has inventory risk before the specified good or service has been transferred to a customer or after transfer ofcontrol to the customer.
• The Group has discretion in establishing the price for the specified good or service.
Revenue is measured at the transaction price, less consideration paid to the customer, such as discounts, rebates, andrefunds.
When the Group grants a customer an option to acquire additional goods or services and provides a material right, thetransaction price is allocated to the option as a separate performance obligation, and revenue is recognized when those future
goods or services are transferred or when the option expires.

(16) Government grants
Government grants are not recognized until there is a reasonable assurance that the conditions attached to the grants are
satisfied and that the grants will be received. Government grants are recognized in profit or loss on a systematic basis over theperiods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate.

56

(TRANSLATION ONLY)

Government grants that contain main conditions requiring the Group to acquire non-current assets by purchase, construction,or other method are recognized by deducting the costs of the related assets in the consolidated statement of financial position
and are reclassified into profit or loss on a systematic and rational basis over their useful lives.
(17) Income taxes
Income taxes consist of current tax and deferred tax. They are recognized in profit or loss, except those related to businesscombinations and items recognized directly in equity or other comprehensive income.
Current tax is measured at the amount of income taxes expected to be payable to or recoverable from the taxation authorities.
Tax amounts are calculated in accordance with the tax rates and tax laws that have been enacted or substantively enacted at theend of reporting period in the countries in which the Group operates and earns taxable profits or losses.
Deferred tax is recognized in respect of temporary difference between the carrying amount of assets and liabilities in thefinancial statements and the tax basis of these assets and liabilities.
A deferred tax asset or liability is recorded based on the temporary difference between the carrying amount of the assets andliabilities for financial accounting purposes and the tax basis of these assets and liabilities under the asset and liability method.
Deferred tax assets and liabilities are not recorded for the following temporary differences arising from:• Temporary differences arising from goodwill• Temporary differences arising from initial recognition of assets and liabilities from transactions (except businesscombinations) that do not affect either accounting profit or taxable income (loss) at the time of the transaction.
• Taxable temporary differences arising from investments in subsidiaries to the extent that the Group is able to control thetiming of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply when the temporary difference isreversed, based on the laws that have been enacted or substantively enacted by the end of consolidated reporting period.
Deferred tax assets are recognized only with respect to tax losses carryforward, tax credits carryforward, and deductible
temporary differences where it is probable to reduce future taxable income. The recoverability of deferred tax assets is reviewed
at the end of each fiscal year, and the carrying amount is reduced to the extent that it is no longer probable that the related tax
benefits will be realized.
The Company and its wholly owned domestic subsidiaries have adopted the group tax sharing system.
(18) Earnings per share
Basic earnings per share is calculated by dividing profit or loss attributable to common shareholders of the parent by theweighted average number of common shares issued and outstanding during the period, adjusted for the number of treasury shares.
Diluted earnings per share are calculated by adjusting for the impact of all dilutive potential shares.
(19) Non-current assets held for sale and discontinued operations
A non-current asset or disposal group is classified as held for sale if its carrying amount will be recovered principally througha sale transaction rather than through continuing use. To be classified as held for sale, it must be available for immediate sale inits present condition and its sale must be highly probable, and only if the Group’s management is committed to implementing
the plan of sale and, in principle, the completion of the sale is scheduled within one year. After being classified as held for sale,
it is measured at the lower of its carrying amount and fair value, less costs to sell. The non-current asset or disposal group is notdepreciated or amortized.
A discontinued operation consists of a component of an entity that either has been disposed of or is classified as held for sale.
It is recognized if, it represents Group’s separate major line of business or geographical area of operations; and is part of a plan
to dispose of the separate major line of business or geographical area of operations.
(Changes in Accounting Policies)
IAS 12 Income Taxes
Deferred taxes on assets and liabilities arising from a single transaction
The Group has adopted amendments to IAS 12 “Income Taxes” (Clarification of accounting treatment for deferred taxes on
assets and liabilities arising from a single transaction) effective from the fiscal year under review. There is no significant impact
on the consolidated financial statements.
International tax reform － Pillar 2 model rules
A temporary exception was established providing an exemption from recognition and disclosure requirements of deferred tax
assets and deferred tax liabilities related to the Pillar 2 Model Rules. As the Group applies the exception retrospectively, it does
not recognize any deferred tax assets and deferred tax liabilities related to the Pillar 2 Model Rules. There are no Group companies
that will be subject to the Income Inclusion Rule (the “IIR”) in the next fiscal year (FY2024) based on the Pillar 2 Model Rules.
From FY2025 onwards, the Company, as the ultimate parent entity, will file tax returns and make payments under the IIR, as
well as GloBE information filing in Japan, in accordance with Japanese laws and regulations for all companies within the Group.
Meanwhile, regarding the Undertaxed Payment Rule (the “UTPR”), it is not applicable to the countries where companies within
the Group are located in FY2024. As the Company will be able to file and pay taxes for all Group companies based on the IIR

57

(TRANSLATION ONLY)

from FY2025, filing or paying taxes under the UTPR is not anticipated.

(Notes to Accounting Estimates)
Impairment of fixed assets
1. Amounts recorded in consolidated financial statements for the current fiscal year
Property and store equipment
4,780 million yen
4,485 million yen
Right-of-use assets
Intangible assets
118 million yen
Other
61 million yen
2. Information on significant accounting estimates concerning identified items(1) Calculation method
The Group identifies each store as the smallest cash generating unit, and groups its assets. The Group recognizes an
Otherimpairment loss if the carrying amount of the asset or cash-generating unit exceeds its recoverable amount.
The recoverable amount is measured at fair value, less costs of disposal or value in use. The fair value, less costs ofdisposal of land is determined based primarily on the real estate appraisal. The value in use is calculated by discounting thefuture cash flows primarily using the pretax weighted-average cost of capital of 4.6%.
(2) Major assumptions
The estimates of undiscounted future cash flows related to the recognition of impairment loss of fixed assets of theCompany’s stores are based on profit forecasts by each store.
(3) Impact on consolidated financial statements for the next fiscal year
In cases where the assumptions used in the aforementioned estimates need to be reviewed due to changes in uncertain
economic conditions in the future, additional impairment loss may be incurred in the consolidated financial statements forthe next fiscal year and thereafter.
(Notes to Consolidated Statement of Financial Position)
1. Accumulated depreciation and impairment losses on assets
Property and store equipment
Right-of-use assets
Investment property
Intangible assets
2. Allowance for doubtful accounts deducted directly from assets
Trade and other receivables (Current assets)
Other
Guarantee deposits
Other financial assets (Non-current assets)

Other

58

298,406
529,781
21,47453,808million yen
million yen
million yen
million yen

21 million yen
90 million yen
928 million yen

(TRANSLATION ONLY)(Notes to Consolidated Statement of Profit and Loss)

1. Revenue from contracts with customers
Regarding gross operating revenue, the Company does not separately present revenue from contracts with customers andrevenue from other sources. The amount of revenue from contracts with customers is described in “Notes to Revenue Recognition,
1. Information on disaggregation of revenues recognized from contracts with customers” in the notes to the consolidated financial
statements.
2. Impairment loss
The Group identifies each store as the smallest cash generating unit, and groups its assets. The Group recognizes an impairment
loss if the carrying amount of the asset or cash-generating unit exceeds its recoverable amount.
The Group recognized impairment losses of 9,446 million yen for the fiscal year ended February 29, 2024, which are included
in “Other expenses” in the consolidated statement of profit and loss. These are primarily due to reducing the carrying amount to
the recoverable amount for assets (buildings and structures, tools, furniture and fixtures, etc.) of stores whose profitability has
significantly declined.
The recoverable amount is measured at fair value, less costs of disposal or value in use. The fair value, less costs of disposalof land is determined based primarily on the real estate appraisal. The value in use is calculated by discounting the future cash
flows primarily using the pretax weighted-average cost of capital of 4.6%.
The fair value is calculated based on an appraisal by an outside independent real estate appraiser in accordance with thevaluation standards of the country where the property is located and is classified as Level 3 of the fair value hierarchy.
Business segment

Major cash-generating unit

Type

Domestic Convenience Store Business

Lawson, Inc. stores

Seijo Ishii Business

SEIJO ISHII CO., LTD. storesEntertainment-related Business

Lawson Entertainment, Inc. stores

Overseas Business

Lawson (China) Holdings, Inc.
and Shanghai Lawson, Inc. stores

Buildings and structures, right-ofuse assets
Buildings and structures, right-ofuse assets
Buildings and structures, right-ofuse assets
Buildings and structures, right-ofuse assets*The breakdown by type of assets for which impairment losses were recognizedImpairment losses
Type(Millions of yen)
Buildings and structures

4,169

Tools, furniture and fixtures

602

Other

8

Total property and store equipment

4,780

Software

118

Other

0

Total intangible assets

118

Right-of-use assets

4,485

Investment property

55

Other non-current assets

5(Long-term prepaid expenses)
Total impairment losses

9,446

59

Impairment losses(Millions of yen)
8,698
9
141
598

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

100,300

Common stock–

100,300

Treasury shares
222
0
1
222
Common stock
Notes:
1. The increase in treasury shares of 0 thousand shares resulted from purchases of stock of less than one share unit.
2. The decrease in treasury shares of 1 thousand shares resulted from decreases of 1 thousand shares due to the exercise ofstock option rights.
2. Dividend(1) Dividend payment
Date of resolution

Class ofsharesDividend payment(millions of yen)

Dividend
per share(yen)

Record date

Effective date

General meeting ofshareholders(May 24, 2023)

Common
stock

7,505

75.00

February 28, 2023

May 25, 2023

Directors’ meeting(October 13, 2023)

Commonstock

11,759117.50August 31, 2023

November 10, 2023

(2) Dividends for which the record date is in the current period and the effective date is after the year-end consolidatedbalance sheet date
Not applicable
3. Number of shares that can be exercised by outstanding subscription rights to shares (excluding those not yet in theexercisable period)
106,000 shares

60

(TRANSLATION ONLY)(Notes to Financial Instruments)
1. Matters relating to the status of financial instruments
The Group is exposed to various financial risks (credit, liquidity, foreign exchange, interest rate, and stock price fluctuation)in the course of performing business activities, requiring the Group to manage risks to mitigate these financial risks.
(1) Credit risk management
Credit risk is the risk that a counterparty will default on its contractual obligations, which may result in financial loss to theGroup. The Group’s maximum amount of the credit risk is the sum of trade and other receivables, guarantee deposits and otherfinancial assets excluding equity instruments, and finance lease receivables.
For trade receivables, such as accounts receivable-due from franchised stores and accounts receivable-other, it manages due
dates and balances for each business partner, while working to early identify and mitigate any collection concerns arising fromdeterioration in their financial position and standing. In addition, collateral and other security arrangements are made with someof the counterparties. Receivables due from closed franchised stores are treated as credit-impaired financial assets in objective
circumstances where the Group faces difficulty in collecting receivables, such as substantial delinquencies or bankruptcy of thecounterparty.
For loans receivable from associates, the Group strives to early identify and mitigate collection concerns by exercising voting
rights at their general meetings of shareholders and providing management control and guidance through the dispatch of officers,
or by gathering and assessing information about their financial position and standing.
With regard to guarantee deposits, the Group makes efforts to early identify collection concerns and mitigate credit risk bygathering and assessing information on the financial position and standing of the counterparty.
The Group has no exposure to credit risks that are over-concentrated in a single counterparty or a group to which thecounterparty belongs.
(2) Liquidity risk management
Liquidity risk is the risk that payments cannot be executed on the due dates when the Group performs repayment obligations
for maturing financial liabilities.
The Group is exposed to liquidity risk because it utilizes borrowings and leases to finance its working capital, banking business
operations, and mergers and acquisitions, and to fund its capital expenditures, as well.
The Group manages liquidity risk by having each Group company prepare and update financing agreements in a timely mannerand by maintaining sufficient liquidity on hand. In addition, line of credit agreements has been concluded with partner financial
institutions to reduce liquidity risks.
(3) Foreign exchange fluctuation risk
Foreign exchange fluctuation risk arises from transactions conducted by the Group companies in currencies other than thefunctional currency.
As the exposure to foreign exchange fluctuation risk in the fiscal year ended February 29, 2024, is minimal, the impact on theGroup is considered immaterial.
(4) Interest rate fluctuation risk
Interest rate fluctuation risk is defined as the risk that the fair value of, or future cash flows from, financial instruments willfluctuate because of changes in market interest rates.
The Group’s interest rate risk arises primarily from long-term borrowings. With floating-rate borrowings, the Group is exposedto the risk of fluctuations in future cash flows.
(5) Stock price fluctuation risk
Stock price fluctuation risk arises primarily from the Group’s holdings of equity financial assets (e.g., stocks) of entities withwhich the Group has business relationships. To manage the stock price fluctuation risk, the Group regularly monitors the fairvalues and financial conditions of the issuers and reviews the status of holdings on an ongoing basis in light of the relationshipwith the entities.
2. Fair value of financial instruments(1) Categorization by level of fair value hierarchy
Financial instruments measured at fair value on a recurring basis after initial recognition are classified into three levels of thefair value hierarchy, according to the observability and materiality of the inputs used for the measurements.
In this categorization, the fair value hierarchy is defined as follows, in the descending order of the levels:
Level 1: Fair value measured at quoted price (unadjusted) in an active market for identical asset or liability
Level 2: Fair value measured using directly or indirectly observable inputs other than Level 1 inputs
Level 3: Fair value measured using unobservable inputs
When multiple inputs are used for the fair value measurement, the level of fair value is determined based on the lowest-level
input that is significant to the entire measurement of fair value. Transfers of financial instruments between levels are recognizedon each reporting date.
(2) Financial instruments measured at fair value on a recurring basis
The breakdown of assets measured at fair value on a recurring basis at the end of the period was as follows:

61

(TRANSLATION ONLY)(Millions of yen)
Fair Value
Category

Level 1

Level 2

Level 3

Total

AssetsOther financial assets
FVTPL financial assets
–
–
3,273
3,273
883
–
3,908
4,791
FVTOCI financial assets
883
–
7,181
8,064
Total assets
Note: For assets and liabilities held at the end of the period, there were no transfers between Level 1 and Level 2.
For financial assets measured within Level 3 on a recurring basis, the changes from the beginning balances
to the ending balances were as follows:(Millions of yen)
Beginning balance

4,471

Total gains and losses
Profit or loss (Note 1)

594

Other comprehensive income (Note 2)

92

Purchase

2,066

Sale and redemption

(42)

Other

0

Ending balance
7,181
Notes:
1. Profit or loss included in total gains and losses is related to financial assets measured at fair value through profit or loss.
These profits and losses are included in “Finance income” and “Finance costs.”
2. Other comprehensive income included in total gains and losses is related to financial assets measured at fair value throughother comprehensive income. These profits and losses are included in “Net change in fair value of equity instruments
designated as measured at fair value through other comprehensive income.”(3) Fair value of financial instruments measured at amortized cost
Carrying amounts and fair values of financial instruments measured at amortized cost were as follows. The table below does
not include financial assets and liabilities whose fair values are equal or approximate to their carrying amounts, such as financial
instruments that are settled in a short period of time from the end of the reporting period.
(Millions of yen)
Carrying amount
AssetsOther financial assets
Loans receivable
Advances paid
Other
Guarantee deposits
Finance lease receivables
Liabilities
Borrowings
Other financial liabilities
Guarantee deposits received
Other19,183 18,508

Fair Value

23
180
39
97,502
7,707

22
179
39
95,135
6,685

50,09950,09919,183
2,402

18,5082,402(4) Method of fair value measurement
Long-term loans receivable
Fair values of long-term loans receivable are measured by discounting the sum of the principal and interest at the interest
rate assumed for similar loans, and are classified as Level 2.
Guarantee deposits

62

(TRANSLATION ONLY)

Fair values of guarantee deposits are measured by discounting the future cash flows related to the collection by the yieldof government bond corresponding to the remaining period, and are classified as Level 2.
Finance lease receivables
Fair values of finance lease receivables are measured by discounting the future cash flows by the yield of government
bond corresponding to the remaining period and are classified as Level 2.

Other financial assets
Fair values of listed shares are measured using quoted prices in active markets at the end of the period and are classified
as Level 1. Fair values of unlisted shares are measured using appropriate valuation techniques, such as comparable
multiple valuation method, and are classified as Level 3. Fair values of advances paid and bonds are measured bydiscounting their future cash flows by the yield of government bonds corresponding to the period to maturity, and areclassified as Level 2.
Long-term borrowings (including current portion)
Those with fixed rate are measured by discounting the sum of the principal and interest at the interest rate assumed forsimilar borrowings. For those with floating rate, the carrying amounts are used as the fair values, and are classified as
Level 2 because the market interest rate is reflected within a short period of time.
Guarantee deposits received
Fair values of guarantee deposits received are measured by discounting the future cash flows by the yield of government
bond corresponding to the remaining period, and are classified as Level 2.

63

(TRANSLATION ONLY)(Notes to Revenue Recognition)
1. Information on disaggregation of revenues recognized from contracts with customers(Millions of yen)
Reportable segment
Category

Operating revenues
Revenue recognizedfrom contracts withcustomers
Income from
franchised stores

Domestic
Entertainment Financial
Convenience Seijo Ishii
Overseas-relatedServices
Store
Business
Business
Business BusinessBusiness

OthersAdjustments

Total

273,005

877

–

–

3,681

–

–

277,563

Net sale Companyoperated stores

86,348111,542

64,923–86,060––348,875

Other

356,396105

14,382

32,57624,182

1,806–

429,449

Other revenue

31,258

18

36

–

762

–

–

32,076

Revenue from externalcustomers

747,008

112,544

79,342

32,576

114,686

1,806–

1,087,964

Intersegment revenue ortransfer

8,388

–

1,542

3,106

–

752

(13,789)–

Total
755,397
112,544
80,88435,682
114,686
2,559(13,789) 1,087,964
Note: The business segments within the “Others” category that do not fall under the main reportable segments, include Consulting
Business, etc.
2. Foundational information for understanding revenue from contracts with customers“Foundational information for understanding revenue from contracts with customers” is described in “4. Summary of
Significant Accounting Policies, (15) Revenue” in the Notes to Consolidated Financial Statements.
3. Information for understanding revenue of current fiscal year and subsequent years(1) The balances of receivables from contracts with customers and contract liabilities etc.
Category

Current fiscal year (millions of yen)

Receivables from contracts with customers(beginning balance)

130,128

Receivables from contracts with customers(ending balance)

132,445

Contract liabilities(beginning balance)

4,130

Contract liabilities(ending balance)

4,529“Contract liabilities” is included in “Other current liabilities” in the consolidated statement of financial position. Revenue
recognized for the year ended February 29, 2024, that was included in the beginning balance of contract liabilities was 3,003
million yen.
(2) Transaction price allocated to remaining performance obligations
As the Group has no material transactions for which the expected term of individual contract exceeds one year, it has notdisclosed information on remaining performance obligations of which duration was originally expected to be within one year,
by applying the practical expedient in paragraph 121 of IFRS 15.
Moreover, there are no material amounts of the consideration arising from contracts with customers that are not included in
the transaction price.
(Notes to Per-Share Data)
1. Equity attributable to owners of parent per share
2. Basic earnings per share

2,845.30 yen
521.08 yen

64

(TRANSLATION ONLY)(Notes to Significant Subsequent Events)
At the meeting on February 6, 2024, the Board of Directors approved a resolution in favor of the tender offer (the “Tender Offer”)
that KDDI Corporation (the “Offeror”) has decided to launch for the Company’s shares, Share options and American Depository
Receipts of the Company. The Company’s opinion as of the same date was to express its opinion in favor of the Tender Offer if theTender Offer is commenced, and recommend that the shareholders of the Company tender their shares in the Tender Offer, and that
the Company recommend that the holders of the American Depositary Receipts surrender their American Depositary Receipts to thedepositary bank in advance and accept the Tender Offer after receiving delivery of the Company shares represented by the American
Depositary Receipts, and to leave it to the discretion of the holders of the Stock Acquisition Rights whether or not to accept theTender Offer.
According to the “Notice Regarding Commencement of Tender Offer for Shares of Lawson, Inc. (Securities Code: 2651)”
released by the Offeror on March 27, 2024, the Offeror has decided to commence the Tender Offer on March 28, 2024. In response,
the Company once again expresses its opinion in favor of the Tender Offer and recommends that all shareholders of the Company
tender their shares in the Tender Offer and that all holders of the American Depositary Receipts surrender their American Depositary
Receipts to the Depositary Bank in advance and receive delivery of the Company shares represented by such American Depositary
Receipts, and to leave it to the discretion of the holders of the Share options as to whether or not to accept the Tender Offer.
The above resolutions of the Board of Directors’ meeting held on February 6, 2024 and the Board of Directors’ meeting held on
March 27, 2024 were passed on the assumption that, through a series of procedures scheduled after the Tender Offer, the Company’s
shareholders will be only the Offeror and Mitsubishi Corporation (“MC”, the Offeror and MC collectively, the “Tender Offeror
Parties”) and that the Company's shares are scheduled to be delisted.
1. Summary of the Offeror(1) NameKDDI Corporation(2) Address

2-3-2 Nishishinjuku, Shinjuku-ku, Tokyo(3) Title/name of representative

Makoto Takahashi, President, Representative Director and CEO(4) Details of businessTelecommunications business(5) Stated capital

141,852 million yen (as of December 31, 2023)(6) Date of establishment

June 1, 1984

(7) Major shareholders and shareholding ratio The Master Trust Bank of Japan, Ltd. (trust account)(as of September 30, 2023)
Kyocera Corporation(Note 1)
Toyota Motor Corporation
Custody Bank of Japan, Ltd. (trust account)
STATE STREET BANK WEST CLIENT - TREATY 505234(Standing Proxy: Settlement & Clearing Services Department,
Mizuho Bank, Ltd.)JP Morgan Securities Japan Co., Ltd.
SSBTC CLIENT OMNIBUS ACCOUNT (Standing proxy: The
Hongkong and Shanghai Banking Corporation Limited, Tokyo
Branch)JP MORGAN CHASE BANK 385781 (Standing Proxy:
Settlement& Clearing Services Department, Mizuho Bank, Ltd.)
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
STATE STREET BANK AND TRUST COMPANY 505103(Standing Proxy: Settlement & Clearing Services Department,
Mizuho Bank, Ltd.)

16.37%
16.00%
12.08%
6.96%
1.55%
1.19%
1.05%
1.05%
0.93%
0.88%

(8) Relationship between the Company and the Offeror
As of March 27, 2024, the Offeror owns 2,110,000 Company Shares
Capital relationship(Shareholding Ratio (Note 2): 2.11%).
Personnel relationship
Not applicable.
Business relationship

The Offeror has executed the capital and business alliance agreement with theCompany. In addition, the Offeror has executed a business alliance agreementwith the Company, MC, and menu, Inc.

Applicable status of related parties

Not applicable.

(Note 1) The description of shareholding ratio in “Major shareholders and shareholding ratio (as of September 30, 2023)”
sets out the ratio of the number of shares held to the total number of the issued shares of the Offeror (excluding
treasury shares) as of September 30, 2023 (round down to the second decimal place).

65

(TRANSLATION ONLY)(Note 2) “Shareholding Ratio” refers to the ratio (rounded to the second decimal place) of the number of Company Sharesto the number of shares (100,183,915 shares) which is the total number of issued shares as of January 12, 2024
described in the Third Quarterly Report for the 49th fiscal year (the “Company’s Third Quarterly Report”) submitted
by the Company on January 12, 2024 of 100,300,000 shares, plus 106,000 Company Shares, to be issued upon
exercise of 1,060 Share Options reported by the Company as remaining as of February 29, 2024, minus the numberof treasury shares held by the Company as of February 29, 2024 as reported by the Company (222,085 shares).
2. Purchase price(1) 10,360 yen per Company Shares(2) Share options
1 yen per each of the share options listed below:(i)Share option issued pursuant to the resolution of the Company’s board of directors meeting held on March 25, 2015 (the“14th Series of Share Options”) (the exercise period is from April 10, 2015 to March 24, 2035)(ii)

Share option issued pursuant to the resolution of the Company’s board of directors meeting held on April 13, 2016 (the“16th Series of Share Options”) (the exercise period is from May 2, 2016 to April 13, 2036)(iii)

Share option issued pursuant to the resolution of the Company’s board of directors meeting held on April 12, 2017 (the“17th Series of Share Options”) (the exercise period is from May 1, 2017 to April 11, 2037)(iv)

Share option issued pursuant to the resolution of the Company’s board of directors meeting held on July 5, 2017 (the“18th Series of Share Options”) (the exercise period is from July 21, 2017 to July 4, 2037)(v)

Share option issued pursuant to the resolution of the Company’s board of directors meeting held on May 22, 2018 (the“19th Series of Share Options”) (the exercise period is from June 8, 2018 to May 21, 2038)(vi)

Share option issued pursuant to the resolution of the Company’s board of directors meeting held on May 21, 2019 (the“20th Series of Share Options”) (the exercise period is from June 7, 2019 to May 20, 2039)(vii) Share option issued pursuant to the resolution of the Company’s board of directors meeting held on May 27, 2020 (the“21st Series of Share Options”) (the exercise period is from June 12, 2020 to May 26, 2040)(viii) Share option issued pursuant to the resolution of the Company’s board of directors meeting held on May 25, 2021 (the“22nd Series of Share Options”) (the exercise period is from June 11, 2021 to May 24, 2041)(ix)

Share option issued pursuant to the resolution of the Company’s board of directors meeting held on May 25, 2022 (the“23rd Series of Share Options”) (the exercise period is from June 10, 2022 to May 24, 2042)(x)

Share option issued pursuant to the resolution of the Company’s board of directors meeting held on May 24, 2023 (the“24th Series of Share Options”) (the exercise period is from June 9, 2023 to May 23, 2043)(3) Depositary receipts for share certificates
10,360 yen per share of the Company Shares related to the American depositary shares deposited with Citibank, N.A. andDeutsche Bank Trust Company Americas and represented by the American depositary receipts related to the Company Sharesissued by the Depositary Banks in the United States.
3. Number of share certificates to be purchased
Number of shares to be purchased

Minimum number of shares
to be purchased

47,923,815 shares

14,458,500 shares

Maximum number of shares
to be purchased– shares

Since the Offeror intends to make only the Tender Offeror Parties the shareholders of the Company, if the Offeror is unable
to acquire all of the shares subject to the Tender Offer in the Tender Offer, the Offeror plans to implement a series of procedures(reverse stock split) to make only the Tender Offeror Parties the shareholders of the Company.
4. Period of purchase, etc.
From March 28, 2024 (Thursday) to April 25, 2024 (Thursday) (21 business days)

66

(TRANSLATION ONLY)

Non-consolidated Balance Sheet(Millions of yen)
Assets
Account item
Current assets
Cash and deposits
Accounts receivable-due from
franchised stores

Liabilities
As of February
As of28, 2023
February 29,(for reference)2024

Account item

As of February
As of28, 2023
February 29,(for reference)
2024

192,4276,316

201,865
12,008Current liabilities
Accounts payable-trade

367,066
110,202386,391
117,831

49,32945,597

Short-term loans payable

11,90010,00014,196

13,59853,93066,750907
15,444
99,524
6,708
612,940
312,118
154,347
22,136
10,017
8,374
117,011833
16,130106,085
7,611
618,662
312,865
155,743
20,2209,821
8,354
118,445

35,754
26,407
8,789
2,386
109,222
3,349
5,123
198,227
30,000104,060
15,06436,20727,475
11,5802,308
103,485
3,317
7,435
167,724–
103,734
15,173

231

279

164

213

Intangible assets
Software
Goodwill
Other
Investments and other assets
Investment securities

29,08822,2396,565
284
271,732
3,003

33,47428,141
5,077
255
272,321
5,782

Short-term loans payable tosubsidiaries and associates
Lease obligations
Accounts payable-other
Income taxes payable
Accrued expenses
Deposits received
Provision for bonuses
Other
Non-current liabilities
Long-term loans payable
Lease obligations
Provision for retirement benefits
Provision for retirement benefits
to executive officers and audits
and supervisory board members
Asset retirement obligations
Other
Total liabilities
Net assets
Shareholders’ equity
Capital stock

32,98915,948565,294

33,08815,514554,115

238,806
58,506

264,263
58,506

Shares of subsidiaries andassociates

65,098108,499

Capital surplus

47,76047,75940,691–

Legal capital surplus

47,696

47,69636,16433,323

Other capital surplus

64

62

470

17

133,488

158,945

11,017
82,95032,333

10,896
82,60931,215727

727

50,00050,000

Other

827

892

82,760108,218

Allowance for doubtful accounts

(823)

(915)

(948)

(947)

938

1,694

1,007

1,763

(69)

(69)

328
240,073805,367453
266,412820,527

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

Investments in capital ofsubsidiaries and associates
Long-term loans receivable
Long-term loans receivable fromsubsidiaries and associates
Long-term prepaid expenses
Guarantee deposits
Deferred tax assets

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

Total assets

805,367

820,527

67

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

(TRANSLATION ONLY)

Non-consolidated Statement of Income(Millions of yen)
From March 1, 2022 toFebruary 28, 2023
(for reference)

Account item

From March 1, 2023 to
February 29, 2024

Operating revenue
262,581
68,569

Income from franchised stores
Other operating revenue
Net sales
Net sales
Gross operating revenue
Cost of sales

284,614331,151

76,883

361,497

26,41926,419357,571

30,29530,295
391,793

19,217

19,217

21,92021,9207,202

Gross profit
Operating gross profit

8,374
338,354369,872
311,860

303,165
35,188Selling, general and administrative expenses
Operating income
Non-operating income

58,011

Interest income

437

423

Dividend income
Other

7,100
1,446

12,605
1,096

8,985

14,124Non-operating expenses
Interest expenses

1,912

2,032

Loss on cancellation of leases
Other

1,099

398
776

543

3,555
40,618

Ordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss

828
8,054

1,628
6,244

Loss on novel coronavirus disease
Other

5
647

–
196

9,536

68,92831,082

Profit before income taxes
Income taxes – current

6,891

Income taxes – deferred

1,595

8,486
22,595

Profit

68

3,207

8,068
60,85915,352784

16,13744,722

(TRANSLATION ONLY)

Non-consolidated Statement of Changes in Equity(From March 1, 2023 to February 29, 2024)(Millions of yen)
Capital surplus

Shareholders’ equity
Retained earnings
Other retained earnings
Legal
Retainedretained
Generalearnings
earnings
reservebrought
forwardTotal
retainedearnings

TreasurysharesTotalshareholders’equity82,760133,488(948)

238,806

Dividends of surplus(19,264)(19,264)(19,264)

Profit44,722

44,722

44,722

Balance at the beginning of current
periodCapital
stock

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplus58,506

47,69664

47,760727

50,000Changes of items during period

Purchase of treasury shares
Exercise of subscription rights toshares (Delivery of treasury
shares)Net changes of items otherthan shareholders’ equity
Total changes of items during period
Balance at end of current period

(1)

(1)

(4)

(4)

5

4

–

–

(1)

(1)

–

–

25,45725,4571

25,45758,506

47,69662

47,759727

50,000108,218

158,945(947)

264,263

69

(TRANSLATION ONLY)(Millions of yen)

Valuation and translation adjustments
Valuation difference on
Revaluation reserve for
Total valuation andavailable-for-salelandtranslation adjustments
securities
Balance at the beginning of current period

1,007

(69)

938

Subscription rights toshares328

Total net assets

240,073

Changes of items during period
Dividends of surplus(19,264)

Profit44,722

Purchase of treasury shares
Exercise of subscription rights to shares(Delivery of treasury shares)
Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of current period

(4)
4
755

755

125

881

755

–

755

125

26,338

1,763

(69)

1,694

453

266,41270

(TRANSLATION ONLY)

Notes to the Non-consolidated Financial Statements(Significant Accounting Policies)
Valuation basis and method for assets(1) Marketable securities and investments in securities:① Investments in subsidiaries and affiliated companies
Stated at cost determined by the moving-average method.
② Available-for-sale securities
With market quotations:
Recorded at market value with net unrealized gains and losses as a separate component of net assets. The
cost of securities sold is determined based on the moving-average method.
Without market quotations:
Stated at cost determined by the moving-average method.
(2) Inventories:
Merchandise:Stated at cost determined mainly by the retail method (the book value in the balance sheet is written down
based on the decline in profitability).

1.

2.

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

3.

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

71

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

4.

Basis for recording revenue and expenses(1) Methods for recognizing revenue
The Company recognizes revenue from contracts with customers by applying the following five steps:
Step 1: Identify the contracts with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognized revenue when the entity satisfies a performance obligation.
Since the consideration for the transaction price is received within one month of satisfaction of theperformance obligation, the practical expedient method is used and no adjustment for a significant financing
component.
(2) Recognition of revenues for the major businesses
The primary business comprises the Domestic Convenience Store Business.
• Revenues from franchised stores in the Domestic Convenience Store Business
For franchised stores in its Domestic Convenience Store Business, Seijo Ishii Business, and Overseas
Business, the Group has contractual obligations to prepare for their openings, provide knowledge on how to
operate the stores, grant licenses for trademarks, etc., provide training, accounting and other services, andlease fixtures for sale, signboards, and information systems, among others. As these activities are closelyinter-related and cannot be performed as separate services, they are collectively deemed as a single
performance obligation except for the lease transactions. The performance obligation is deemed to be satisfied
over time and when the services are provided, but as the royalty revenues fluctuate based on the operating
gross profit of each franchised store, the revenues are recognized whenever the applicable operating grossprofit is recognized throughout the contract period.
• Revenues from directly operated stores in the Domestic Convenience Store BusinessWe sell general consumer goods at our directly operated stores in the Domestic Convenience StoreBusiness. Revenues from selling such goods are recognized when an item is handed over to the customer, atwhich point its control is deemed to have been transferred to the customer.
In identifying a performance obligation, we assess whether we are acting as a principal or an agent in
performing the promise to provide the specified goods or services. In cases where the nature of the promise
constitutes a performance obligation of us to provide the goods or services as a principal, the revenue in total
amount of the consideration is recognized in the non-consolidated statement of income, whereas in cases
where the performance obligation requires that we arrange a third party to provide the goods or services, therevenue as an agent is recognized therein in the amount of commissions or remunerations or the net amountof the consideration.
We consider the following indicators in assessing whether we are acting as a principal.
• We have the primary responsibility to fulfill the promise to provide the specified goods or services.
• We have an inventory risk either before the specified goods or services are transferred to the customer orafter the control of the specified goods or services is transferred to the customer.
• We have discretion over the price of the specified goods or services.
Revenues are based on the transaction price less the consideration paid to the customer such as discounts
and rebates. If the Company grants the customer an option to acquire additional goods or services and provides
a material right to do so, transaction value is allocated to the optional transaction by deeming it as a separate
performance obligation, for which revenues are recognized when the goods or services are transferred to thecustomer or when the option is extinguished.

(Changes in Accounting Policies)
Application of Implementation Guidance on Accounting Standard for Fair Value Measurement
On March 1, 2023, the Company applied “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (Accounting Standards Board of Japan (“ASBJ”) Guidance No.31, June 17, 2021, “Implementation
Guidance on Accounting Standard for Fair Value Measurement”), and the new accounting policies stipulated in the
Implementation Guidance on Accounting Standard for Fair Value Measurement are applied prospectively pursuant
to the transitional treatment stipulated by Paragraph 27-2 of the Implementation Guidance on Accounting Standard
for Fair Value Measurement. The application had no impact on the financial statements.

72

(TRANSLATION ONLY)(Notes to Accounting Estimates)
Impairment of fixed assets(1) Amounts recorded in non-consolidated financial statements for the current fiscal year
Property and store equipment
6,237 million yen
Other
6 million yen(2) Information on significant accounting estimates concerning identified items
The method used to calculate the amounts in (1) is the same as that described in the “Notes to Consolidated
Financial Statements (Notes to Accounting Estimates)” of the Consolidated Financial Statements.
(Notes to the Non-consolidated Balance Sheet)
1. Accumulated depreciation of property and store equipment:

362,598 million yen

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

25,236
39
8,042
214

million yen
million yen
million yen
million yen

3. Revaluation of land used for businessLand used for business was revalued on the basis prescribed by the Law Concerning Revaluation of Land
(Law No. 34, March 31, 1998). The resulting revaluation difference has been included in net assets as“Revaluation reserve for land.”
Revaluation method: The value of land is determined based on the notified prices adjusted reasonably
as stipulated in Article 2, Item 4 of the Ordinance Implementing the Law
Concerning Revaluation of Land (Government Ordinance No. 119, March 31,
1998) and 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 non-consolidatedbalance sheet date was 36 million yen.
4.

Guarantee obligations
The Company guarantees the accounts payable-trade and deposit liabilities of the following subsidiaries
Lawson Bank, Inc.
15,000
million yen
SCI, Inc.
737
million yen
million yen
Lawson Entertainment, Inc.
412
million yen
Lawson USA Hawaii, Inc.
105

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

73

42,022
143
46,14012,543

million yen
million yen
million yen
million yen

222,085 shares

(TRANSLATION ONLY)(Notes to Accounting for Income Taxes)
1. Components of deferred tax assets and liabilities
Enterprise taxes payable
Provision for bonuses
Loss on write-down of investments in affiliated companies
Excess of depreciation
Excess of amortization of software
Provision for retirement benefits
Allowance for doubtful accounts
Impairment loss
Other
Subtotal of deferred tax assets
Less valuation allowances
Total deferred tax assets
Deferred tax assets-net

985 million yen
996 million yen
8,686 million yen
9,344 million yen
224 million yen
6,352 million yen
287 million yen
12,652 million yen
2,095 million yen
41,627 million yen(10,412) million yen
31,215 million yen
31,215 million yen

2. Accounting for corporate tax and local corporate tax or tax effect accounting related to these taxes
From the current fiscal year, the Company has applied the group tax sharing system. In addition, the Company
accounts for and discloses corporate tax and local corporate tax or tax effect accounting related to these taxes inaccordance with the “Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System”(ASBJ Practical Issues Task Force (PITF) No.42 August 12, 2021).

74

(TRANSLATION ONLY)(Notes to Related-Party Transactions)
Subsidiaries and affiliates
Relationship
Attribute

Company
nameEquityBusiness line
ownershipor profession
percentage

SCI, Inc.

Domestic
Convenience
Store
Business

LawsonEntertainmentEntertainment,
RelatedInc.
Business

Directholding100.0%

Directholding100.0%

BusinessrelationshipTransaction
amountDirectors’ Description oftransactions (millions of
posts heldyen)concurrently

Account
item

Repayment of
funds
Borrowing offunds
Borrowinginterest

Shortterm
loans
payableAccruedinterest

Yes

SCM

Sale of tickets
and software
for music and
video

Yes

Repayment of
funds
Borrowing offunds
Borrowinginterest

45,40045,700032,00033,0003Endingbalance(millions ofyen)

Shortterm
loans
payableAccruedinterest

12,300041,0001

Subsidiary
SEIJO ISHII
CO., LTD.

Lawson Bank,Inc.

Seijo Ishii
Business

Financial
Services
Business

Directholding100.0%

Purchase ofmerchandise

Directholding
95.0%

Bankingbusiness

Yes

Yes

Repayment of
funds
Borrowing offunds
Borrowinginterest
Guarantee
obligations
Receipt ofguarantee fees

2,400
13,7000

Shortterm
loans
payableAccruedinterest

0

15,000

–

–

6

–

–

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.
3. The Company provides debt guarantees for loans payable received from financial institutions by Lawson
Bank, Inc.
Guarantee fee rates are determined rationally, taking into account market interest rates.

75

11,300(TRANSLATION ONLY)
Subsidiaries of an affiliated companies under common control
Attribute

Subsidiaryof the parent
company

Company
nameMitsubishi
ShokuhinCo., Ltd.

RelationshipTransaction
EquityDescription
Business line
amountAccount
Directors’
ownership Businessofor profession
posts held(millions of
item
percentage relationship concurrently transactions
yen)
Purchases
Accounts
for10,033 payablecompany(760,834)
tradeoperatedstores(purchases
forSales of
Accounts
franchised
processed–
VendorNo
payablestores)
foods
other
Shipping
costs
Receipt ofshipping
costs

Mitsubishi
Corporation
Subsidiary
Financial &of the parent
Managementcompany
Services(Japan) Ltd.

Subsidiaryof the parent
companyKCS Co.,Ltd.

Contracted
operations

Sales ofprocessed
foods

–

–

Recipientof loans

VendorNo

No

Repaymentof funds
Borrowingof funds
Borrowinginterest
Purchasesforcompanyoperated
stores(purchasesforfranchised
stores)Endingbalance(millionsof yen)64,4604,947

56,554
Accounts
62,428 receivableother

43,900

5,094

–

–

–

–

32,00002,152(94,583)

Accounts
payabletrade

8,218

Transaction conditions and the principles on the decision thereof:
1. The terms and conditions for goods purchased transactions are determined to be same as those for othergeneral business transactions. Furthermore, regarding purchases for the franchised stores, the Company acts
as an alternative payer but not as a direct party for the purchase.
2. The interest rates for borrowings are determined rationally taking into account market interest rates.
(Notes to Revenue Recognition)
Basic information to understand revenues
The notes are omitted as the same information is stated in “(Significant Accounting Policies), 4. Basis for recording
revenue and expenses” in these Notes to Non-consolidated Financial Statements.
(Notes to Per-Share Data)
1. Net assets per share
2. Profit per share

2,657.51 yen
446.87 yen(Notes to Significant Subsequent Events)
The notes are omitted as the same information is stated in (Notes to Significant Subsequent Events) in the Notes toConsolidated Financial Statements.

The above monetary amounts and the numbers of shares in these Financial Statements and notes thereto are rounded down to thenearest unit and percentages are rounded to the nearest one decimal place.

76

(TRANSLATION ONLY)INDEPENDENT AUDITOR'S REPORT
April 12, 2024
To the Board of Directors of
Lawson, Inc.:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Koji Ishikawa

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

OpinionPursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited the consolidated
financial statements of Lawson, Inc. (the “Company”) and its consolidated subsidiaries (collectively, the“Group”), namely, the consolidated statement of financial position as of February 29, 2024 , and the related
consolidated statements of profit and loss and changes in equity for the fiscal year from March 1, 2023 to
February 29, 2024, and the related notes.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Lawson, Inc. and its consolidated subsidiaries as of February 29, 2024, andthe results of their operations for the year then ended in accordance with accounting standards prescribedpursuant to the provisions of the second sentence of the first paragraph of Article 120 of the Ordinance on
Company Accounting that omit a part of the disclosures required under International Financial ReportingStandards.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group in accordancewith the ethical requirements that are relevant to our audit of the consolidated financial statements in Japan,
and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to Notes to Significant Subsequent Events of the consolidated financial statements,
which describes that at a meeting on March 27, 2024, the Board of Directors of the Company reiterated
approved a resolution in favor of the tender offer (the “Tender Offer”) by KDDI Corporation for the Company
Shares, Share options and American Depositary Receipts of the Company, and recommended that theshareholders of the Company tender their shares in the Tender Offer and that the Company recommend that theholders of the American Depositary Receipts surrender their American Depositary Receipts to the depositarybank in advance and accept the Tender Offer after receiving delivery of the Company shares represented by theAmerican Depositary Receipts, and to leave it to the discretion of the holders of the Share options whether or
not to accept the Tender Offer.
Our opinion is not modified in respect of this matter.
Other Information
Management is responsible for the other information. Audit & Supervisory Board members and the Audit& Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the design

(TRANSLATION ONLY)
and operating effectiveness of the controls over the other information. The other information comprises theinformation included in the Business Report and the accompanying supplemental schedules.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.
Responsibility of Management and Audit & Supervisory Board Members and the Audit & Supervisory
Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting standards prescribed pursuant to the provisions of the second
sentence of the first paragraph of Article 120 of the Ordinance on Company Accounting that omit a part ofthe disclosures required under International Financial Reporting Standards, 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.
In preparing the consolidated financial statements, management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
in accordance with accounting standards prescribed pursuant to the provisions of the second sentence of thefirst paragraph of Article 120 of the Ordinance on Company Accounting that omit a part of the disclosuresrequired under International Financial Reporting Standards.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing
the Directors’ execution of duties relating to the design and operating effectiveness of the controls over theCompany’s financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Misstatements can arise from fraud or error, and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgement and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statement, whether due
to fraud or error, design and perform audit procedures responsive to those risks. The procedures selected
depend on the auditor’s judgement. In addition, we obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with accounting standards prescribed pursuant to the provisions of the second sentence of the firstparagraph of Article 120 of the Ordinance on Company Accounting that omit a part of the disclosures required
under International Financial Reporting Standards, as well as the overall presentation, structure and content

(TRANSLATION ONLY)of the consolidated financial statements, including the disclosures, and whether the consolidated financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Company to express an opinion on the consolidated financial statements. We areresponsible for the direction, supervision and performance of the group audit. We remain solely responsible
for our audit opinion.
We communicate with Audit &Supervisory Board members and the Audit & Supervisory Board regarding,among other matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during over audit.
We also provide the Audit Committee with a statement that we have complied with the ethical requirements
regarding independence that are relevant to our audit of the consolidated financial statements in Japan, and tocommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

(TRANSLATION ONLY)INDEPENDENT AUDITOR'S REPORT
April 12, 2024
To the Board of Directors of
Lawson, Inc.:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Koji Ishikawa
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Masumi Nakagawa
Pursuant to the first item, second paragraph of Article 436 of the Companies Act, we have audited thefinancial statements, namely, the balance sheet as of February 29, 2024 of Lawson, Inc. (the “Company”),
and the related statements of income and changes in equity for the 49th fiscal year from March 1, 2023 to
February 29, 2024, and the related notes and the accompanying supplemental schedules.
In our opinion, the financial statements and the accompanying supplemental schedules referred to above
present fairly, in all material respects, the financial position of Lawson, Inc. as of February 29, 2024, and theresults of its operations for the year then ended in accordance with accounting principles generally acceptedin Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Nonconsolidated Financial Statements section of our report. We are independent of the Company inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our otherethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to Notes to Significant Subsequent Events of the financial statements, which describesthat at a meeting on March 27, 2024, the Board of Directors of the Company reiterated approved a resolution
in favor of the tender offer (the “Tender Offer”)by KDDI Corporation for the Company Shares, Share options
and American Depositary Receipts of the Company, and recommended that the shareholders of the Company
tender their shares in the Tender Offer and that the Company recommend that the holders of the American
Depositary Receipts surrender their American Depositary Receipts to the depositary bank in advance andaccept the Tender Offer after receiving delivery of the Company shares represented by the American
Depositary Receipts, and to leave it to the discretion of the holders of the Share options whether or not to
accept the Tender Offer.
Our opinion is not modified in respect of this matter.
Other Information
Management is responsible for the other information. Audit & Supervisory Board members and the Audit& Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the designand operating effectiveness of the controls over the other information. The other information comprises theinformation included in the Business Report and the accompanying supplemental schedules.
Our opinion on the nonconsolidated financial statements does not cover the other information and we do(TRANSLATION ONLY)
not express any form of assurance conclusion thereon.
In connection with our audit of the nonconsolidated financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistent with thenonconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.
Responsibility of Management and Audit & Supervisory Board Members and the Audit & Supervisory
Board for the Nonconsolidated Financial Statements
Management is responsible for the preparation and fair presentation of these nonconsolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of nonconsolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the nonconsolidated financial statements, management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
in accordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing
the Directors’ execution of duties relating to the design and operating effectiveness of the controls over theCompany’s financial reporting process.

Auditor's Responsibilities for the Audit of the Nonconsolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the nonconsolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Misstatements can arise from fraud or error, and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these nonconsolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgement and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the nonconsolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks. The procedures selected
depend on the auditor’s judgement. In addition, we obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in thenonconsolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate whether the overall presentation and disclosures of the nonconsolidated financial statements are inaccordance with accounting principles generally accepted in Japan, as well as the overall presentation,
structure and content of the nonconsolidated financial statements, including the disclosures, and whether thenonconsolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with Audit &Supervisory Board members and the Audit & Supervisory Board regarding,among other matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during over audit.

(TRANSLATION ONLY)
We also provide the Audit Committee with a statement that we have complied with the ethical requirements
regarding independence that are relevant to our audit of the consolidated financial statements in Japan, and tocommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

(TRANSLATION ONLY)<Copy of the Audit Report of the Board of Audit & Supervisory Board>
AUDIT REPORTWith respect to the directors’ performance of their duties during the 49th business term from March 1,2023 to February 29, 2024, we have prepared this Audit Report, through due deliberations based on theaudit reports prepared by each Audit & Supervisory Board Member, and hereby report as follows:
1. Auditing Methods Employed by the Audit & Supervisory Board Members and Audit & Supervisory
Board and Contents of Such Methods(1)
We have established audit policies and audit plans for the current term, andreceived the reports from each Audit & Supervisory Board Member regarding their execution ofaudits and results thereof, as well as reports from the Directors, other relevant personnel, and the
Accounting Auditor regarding the execution of their duties, and asked for explanations asnecessary.
(2)
Each Audit & Supervisory Board Member, pursuant to the auditing standards ofAudit & Supervisory Board Members established by the Audit & Supervisory Board, has followed
the audit policies and audit plans for the current term, communicated with the Directors, officers,internal audit department and other relevant employees, endeavored to collect information anddevelop the audit environment, and performed the audit using the following methods:(i) We have attended the Board of Directors meetings, the management meetings, Compliance& Risk management committee meetings, Internal Control over Financial Reporting
committee meetings and the like, and other important meetings, received reports from the
Directors, officers, internal audit department and other relevant employees regarding theexecution of their duties, asked for explanations whenever necessary, reviewed important
approval documents and the like, and investigated the status of operations and assets withregard to the head office, area office, and other principal offices and stores. With respect tosubsidiaries, we have communicated and exchanged information with the Directors, Audit& Supervisory Board Members and other relevant personnel of subsidiaries, requested thesubsidiaries to report on their business where necessary, and investigated their status ofoperations and assets.
(ii) Pursuant to the audit items and audit methods regarding internal control system establishedby the Audit & Supervisory Board, we have monitored and verified the resolution of theBoard of Directors regarding the development of the system as prescribed by paragraph 1
and paragraph 3, Article 100 of the Ordinance for Enforcement of the Companies Act andthe system developed and operated based on such resolution (Internal Control System), as
the system necessary to ensure that the execution of the duties by the Directors, describedin business report, complies with laws and regulations and the Articles of Incorporation andother system necessary to ensure the properness of operations of a Stock Company andcorporate group consisting of its subsidiaries. In connection with internal control overfinancial reporting, we received reports from the Directors and other relevant personnel, andDeloitte Touche Tohmatsu LLC regarding the status of evaluation and audit of such internal
control respectively, and asked for explanations whenever necessary.
(iii) Regarding the transaction with the parent company described in the business report, we havecarefully examined the matter noted in item (v)-(a) of Article 118 of the Ordinance for(TRANSLATION ONLY)

Enforcement of the Companies Act and the judgment and its reasons in item (v)-(b) basedon the status of deliberations of the Board of Directors and others.
(iv) We have monitored and verified whether Accounting Auditor maintained its independence
and properly conducted its audit, and we received reports from Accounting Auditor
regarding the status of the execution of its duties and, whenever necessary, asked for
explanations. In addition, we have received the notice from the Accounting Auditor that
“System for ensuring proper execution of duties” (matters set forth in each item of Article
131 of the Company Accounting Regulations) is organized in accordance with the “Quality
Control Standards for Audits” (Business Accounting Council) and the like, and, whennecessary, asked for explanations.
Based on the above methods, we have examined the “business report and the supplementary schedules
thereof,” the “consolidated financial statements (consolidated statement of financial position,, consolidated
statement of income, consolidated statement of changes in equity,, and notes to consolidated financial
statements)” and “financial statements (balance sheet, statement of income, statements of changes in net
assets, and notes to financial statements) and supplementary schedules thereof” for this term.
2. Result of Audit(1)
Result of Audit of Business Report and Other Relevant Documents(i) We have found that business report and the supplementary schedules thereof fairly present
the status of our company, in conformity with the applicable laws and regulations and the
Articles of Incorporation.
(ii) Regarding the execution of duties by the Directors, we have found no misconduct ormaterial matter that violates applicable laws and regulations or the Articles of Incorporation.
(iii) We have found that the content of the resolution of the Board of Directors regarding theInternal Control System is adequate. In addition, we have found no matters on which togive remarks in regard to the relevant description in the business report and execution ofduties by the Directors concerning Internal Control System.
(iv) Regarding the transaction with the parent company described in the business report, wehave found no matters on which to give remarks in regard to the particulars being given
due consideration so as not to harm the interests of our company in carrying out thetransaction and the judgment of the Board of Directors and its reasons related to whether
or not the transaction would harm the interests of our company.
(2)
Result of Audit of Consolidated Financial Statements
We have found that methods and the result of the audit by the Accounting Auditor, Deloitte Touche
Tohmatsu LLC, are adequate.
(3)
Result of Audit of Financial Statements and Supplementary Schedules thereof.
We have found that methods and the result of the audit by the Accounting Auditor, Deloitte
Touche Tohmatsu LLC, are adequate.
April 17, 2024
The Audit & Supervisory Board of Lawson, Inc.
Audit & Supervisory Board Member
Jun Miyazaki(full-time)(TRANSLATION ONLY)

Audit & Supervisory Board Member
Shuichi Imagawa(full-time)
Outside Audit & Supervisory Board Member Yuko Gomi
Outside Audit & Supervisory Board Member Keiko Yoshida
Outside Audit & Supervisory Board Member Yuko Miyata