(TRANSLATION ONLY)
Securities Code: 2651
May 1, 2020
To All Shareholders with Voting Rights
Sadanobu Takemasu
President, Representative Director
Lawson, Inc.
11-2, Osaki 1-chome, Shinagawa-ku, TokyoNOTICE OF THE 45th ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are cordially notified that the 45th Ordinary General Meeting of Shareholders will be held as follows.
If you do not attend the meeting, please exercise your voting rights using either of the methods described below after
reading the attached REFERENCE DOCUMENTS FOR THE GENERAL MEETING OF SHAREHOLDERS.
[Voting in Writing (by Mail)]
Please indicate your approval or disapproval of the matters to be resolved on the Voting Rights Exercise Form
enclosed herewith and return it so that it reaches us by 5:45 p.m. on Tuesday, May 26, 2020.
[Voting by Electronic Means (Internet, etc.)]
Please exercise your voting rights by 5:45 p.m. on Tuesday, May 26, 2020 after reading the attached document“Exercising Voting Rights via the Internet, etc.”
1. Date and Time: 10:00 a.m., Wednesday, May 27, 2020
2. Venue: Bellesalle Shiodome, B1 Sumitomo Real Estate Shiodome Hamarikyu Bldg., 8-21-1 Ginza, Chuo-ku, Tokyo
3. Objectives of the Meeting
Reports:
The Business Report, the Consolidated Financial Statements and the Nonconsolidated Financial Statements for the
45th Fiscal Term (from March 1, 2019 to February 29, 2020), and the Audit Reports Thereof
Matters to Be Resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Partial Amendment to the Articles of Incorporation
Proposal No. 3: Election of Eight (8) Directors
Proposal No. 4: Election of Two (2) Audit and Supervisory Board Members
Proposal No. 5: Revision of the Amount of Remuneration Paid to Audit and Supervisory Board Members••

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.)

(TRANSLATION ONLY)

BUSINESS REPORT(March 1, 2019 through February 29, 2020)
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 2019 ended February 29, 2020, changes in society’s needs
resulting from an aging population, the prevalence of the nuclear family, the increasing number of working
women, and the heightening awareness of healthy lifestyles are serving as a tailwind for the convenience store
industry. Meanwhile, competition is intensifying across sector lines and circumstances surrounding franchise
stores are also becoming increasingly challenging due to a labor shortage and rising personnel expenses. Givensuch a business environment, we have made efforts to raise store productivity by making maximum use ofdigital technology. Specifically, since 2015, we have been introducing a semi-automatic ordering system andnew point-of-sale (POS) cash registers equipped with an automatic change dispenser function.
In April 2019, we formulated an action plan to reinforce our relationship with franchise stores and provide
stronger support for them and announced our progress in November. Furthermore, we announced in February2020 new short-, medium- and long-term initiatives to enhance the financial stability of our franchise stores,
including supporting low-profit franchise store owners in operating multiple stores, helping develop store
managers, and measures for new franchise owners. We will continue strengthening our partnerships with ourfranchise stores.
Due to the recent spread of the new coronavirus (COVID-19), changes have been observed in the sales ofsome merchandise as well as trends in customer visits. However, the impact of such changes on our financial
results for the fiscal year under review was insignificant.
In terms of operating results for the fiscal year, gross operating revenue grew to 730,236 million yen (up4.2%), operating income increased to 62,943 million yen (up 3.6%) and ordinary income decreased to 56,346
million yen (down 2.3%) and profit attributable to owners of parent decreased to 20,108 million yen (down
21.4%).
Furthermore, we also focused on improving our group-wide internal control system and addressing operating
risks based on the 2019 Basic Policy for Improvement of Internal Control Systems. We will continue promotinginternal control going forward.
Operating results by business segment were as follows:(Domestic Convenience Store Business)
In our convenience store business, we are striving to establish LAWSON stores as convenience stores
endorsed by all our customers. To this end, we are implementing measures to achieve our three commitments,
namely, to pursue compelling taste, to be considerate to people, and to be environmentally friendly. Bydeveloping distinctive products that are compellingly delicious and health-conscious, we are aiming to further
reinforce our product lineup, while rigorously working to offer thoughtful customer service at our stores andensure environmental friendliness by reducing food waste and the use of plastics.
The consumption tax rate was raised in Japan from 8% to 10% on October 1, 2019, although certain items
are subject to a reduced rate. At LAWSON stores, reduced tax rates are applied to food and beverage items,
excluding those consumed within their eat-in areas, and alcoholic beverages. In addition, as part of the Japanese
government’s support scheme to alleviate the impact of the tax hike, customers making cashless payments atapplicable LAWSON stores receive a 2% refund on their payment amount.
[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. During the current fiscal year, we aretaking decisive steps to improve store operations and strengthen franchise support by headquarters.
With regard to our initiative to introduce self-checkout machines by leveraging the self-checkout functionof the POS cash registers installed at all stores during the previous fiscal year, we will continue to introduce
the machines at more stores. In January 2020, we temporarily closed 102 franchise stores nationwide during
the New Year holidays as part of an experimental trial. Based on the results, we will discuss our initiatives forthe next fiscal year.

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(TRANSLATION ONLY)[Merchandising and Service Strategies]
On the merchandise side, we focused on new product development and quality enhancement of our existingproducts with the aim of achieving compellingly superior taste. In the rice range, our new “Kinshari Onigiri
Rice Ball” series featuring distinct and plump grains of rice, which was launched in April 2019, was hugely
popular, and our “Akuma-no-onigiri” (meaning “devil’s rice ball”) series, now an iconic LAWSON product,
also recorded solid sales. In the processed bread range, we revamped our sandwich range and captured a new
type of meal demand by launching the new “SAND FULL” series, which resulted in continuous strong sales.
In the counter fast food range, our revamped “L-Chiki” (fried chicken) series as well as standard and newseasonal products offered at “MACHI café” enjoyed popularity.
In our dessert range, “BASCHEE” (Basque-style cheesecake) launched in March 2019 was received withgreat popularity, and hit products were also successively released from the “Uchi Café” dessert range, resultingin Lawson’s desserts garnering considerable attention. In the bakery products range, we launched, in March
2019, our “Machinopan” (meaning “town bakery”) series featuring meticulously selected basic ingredients andsophisticated production methods in a quest to offer items with exquisite texture and delicious fillings, while
also revamping our existing standard products, which resulted in ongoing strong sales.
On the sales promotion side, we rolled out stamp campaigns and implemented effective measures to attract
customers, including a smartphone stamp rally and the Wakuwaku speed lottery, by capitalizing on our strength
in the entertainment field.
[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
1,237,391
52.8
102.9
Fast foods

546,542

23.3

100.4

Daily delivered foods

351,442

15.0

106.6

Nonfood products

209,624

8.9

100.5

Total

2,345,000

100.0

102.6

Note: These figures include stores operated by both Lawson, Inc. and Lawson Sanin, Inc.
[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 554 stores. Meanwhile, we closed a total of 769 such stores in the
country as a result of shutting down stores with low earnings and for other reasons. As of the end of February
2020, the total number of domestic stores was 14,444.*
In an effort to establish convenience store models catered to an aging population and a trend toward selftreatment, we are building partnerships with dispensing pharmacy and drug store chains to operate healthcareoriented LAWSON stores that offer over-the-counter pharmaceuticals and prescription drugs, as well as a wider
assortment of cosmetics and daily necessities than conventional LAWSON stores. The number of stores
offering non-prescription drugs has reached 222 stores (includes 49 pharmacy LAWSON stores equipped withdrug-dispensing pharmacies) as of the end of February 2020. Moreover, the number of stores offering nursing
care consultation services has reached 24 as of the end of February 2020. Furthermore, we have also been
expanding our chain of “in-hospital LAWSON stores,” which feature strengthened focus on medical, sanitary,
nursing and rehabilitation supplies in addition to merchandise and services offered at standard convenience
stores. The number of such stores has reached 323 as of the end of February 2020. Building on our expertisedeveloped through operation of in-hospital LAWSON stores, we will continue to support the lives of all peopleinteracting with hospitals.
With the aim of supporting our customers’ beauty, health, and comfortable lifestyles, our NATURALLAWSON stores offer an exclusive assortment of items including original products adopting select ingredients
as well as products produced in collaboration with renowned brand names. Meanwhile, our LAWSONSTORE100 meets customers’ needs with a wide-ranging assortment of products sold at the value-for-money
price of 100 yen, including fresh fruit and vegetables, daily delivered fresh foods, prepared dishes, beverages,
and daily necessities. As of the end of February 2020, we operate 145 NATURAL LAWSON stores and 742
LAWSON STORE100 stores.
* The numbers of store openings and closings and total number of stores in Japan include stores operatedby Lawson, Inc., subsidiary Lawson Sanin, Inc. and three equity-method affiliates, Lawson Kochi, Inc.,
Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.

3

(TRANSLATION ONLY)[Change in Total Number of Domestic Stores]
Total stores as ofFebruary 28, 2019
LAWSON

Change during fiscal
year

Total stores as ofFebruary 29, 2020

13,714(157)

13,557

NATURAL LAWSON

139

6

145

LAWSON STORE100

806

(64)

742

14,659(215)

14,444Total[Other]On December 16, 2019, Lawson, Inc. concluded a capital business partnership agreement with KDDI
Corporation to promote data marketing utilizing the customer bases of both companies and create newconsumption experiences through the application of advanced technologies. Based on this partnership, Lawson
and KDDI will combine KDDI’s advanced technologies including 5G, the fifth-generation mobile
communication system, with Lawson’s 14,000-plus-strong real-store infrastructure to develop next-generation
convenience store services involving data and financial offerings to create new consumption experiences forcustomers.
In February 2020, we commenced a pilot experiment involving checkout-free store service at the Lawson
Fujitsu Shinkawasaki TS Store. By leveraging digital technology, the Lawson store allows customers to shop
without the need to pay at a cash register.
As a result, Domestic Convenience Store Business posted gross operating revenue of 471,551 million yen(up 0.6% from previous fiscal year) and segment profit of 47,121 million yen (down 2.4% from previous fiscal
year).
(Seijo Ishii Business)
At stores of Seijo Ishii, a high-end supermarket chain offering quality foods, we provide our customers withwell-selected, safe, and reliable foods. The number of directly operated Seijo Ishii stores reached 154 as of theend of February 2020. Seijo Ishii’s original quality prepared food continued to be supported by many customers,
contributing to steady sales. By continuing to leverage the company’s strengths including its productdevelopment expertise, know-how acquired as a manufacturing retailer, and retailing techniques, we will
endeavor to enhance the brand capacity of Seijo Ishii.
As a result, Seijo Ishii Business posted gross operating revenue of 93,119 million yen (up 7.4% from previous
fiscal year) and segment profit of 8,348 million yen (up 12.6% from previous fiscal year).
(Entertainment-related Business)
With regard to our Entertainment-related Business, the ticketing business of Lawson Entertainment, Inc.,
which forms the core of the business, continued to secure top-class transaction value in the ticketing industry.
In our product sales business, as of the end of February 2020, we operate 56 stores, mainly comprised of HMV
stores dedicated to selling music and video software nationwide, as well as HMV&BOOKS, which markets
books, CDs, and DVDs, and HMV record shop stores specializing in analog records.
As of the end of February 2020, United Cinemas Co., Ltd., an operator of cinema complexes, operates cinema
theaters at 43 sites nationwide, offering 389 screens including those operated on commission.
As a result, Entertainment-related Business posted gross operating revenue of 85,346 million yen (up 9.3%
from previous fiscal year) and segment profit of 5,313 million yen (up 18.1% from previous fiscal year).

4

(TRANSLATION ONLY)(Financial Services Business)
With respect to our Financial Services Business, in our ATM business, the foundation of our banking
business, we expanded our network of financial institution partners, while working to expand the ATM serviceof Lawson Bank, Inc.
Lawson Bank, Inc. issues LAWSON Ponta Plus credit cards, which allow cardholders to collect extra Ponta
points when used at LAWSON, NATURAL LAWSON, or LAWSON STORE100 stores as well as whencertain usage conditions are achieved. As a result of such expanded services, credit card membership is seeing
steady growth.
As of the end of February 2020, the number of ATMs installed nationwide reached 13,353 (down 106 fromprevious fiscal year), with each ATM used 47.5 times a day on average. The total number of our financial
institution partners increased to 124 nationwide (up 13 from previous fiscal year), including online banks.
As a result, Financial Services Business posted gross operating revenue of 34,089 million yen (up 11.5%
from previous fiscal year) and segment profit of 3,088 million yen (up 38.9% from previous fiscal year).
(Other Business)
In addition to the aforementioned businesses, the Group is also involved in the Overseas Business.
With regards to Overseas Business, the Group’s operating companies opened LAWSON stores in the
People’s Republic of China, Thailand, Indonesia, the Philippines, and the United States of America (Hawaii).
In the People’s Republic of China, we have expanded mainly into Shanghai, as well as into Chongqing,
Dalian, Beijing, Wuhan, Hefei, Changsha, Shenyang, and other cities. The number of LAWSON stores in theentire country reached 2,646 as of the end of February 2020.
[Distribution of Lawson Brand Stores Overseas by Region]
Number of stores(as of February 28,
2019)
1,227

Change during
fiscal year
347

Number of stores(as of February 29,
2020)
1,574

China Chongqing

198

37

235

China Dalian

146

46

192

China Beijing and surrounding area

108

45

153

China Shenyang

－

26

26

China Wuhan

308

93

401

China Hefei

20

30

50

China Changsha

－

15

15

Thailand

120

13

133

Indonesia

42

30

72

Philippines

39

26

65

United States of America Hawaii

2

－

2

2,210

708

2,918

Country/Region
China Shanghai and surrounding area

Total

As a result, Other Business posted gross operating revenue of 57,275 million yen (up 26.1% from previous
fiscal year) and segment loss of 929 million yen (down 42.6% from previous fiscal year).

5

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

Issues

KPIs for 2030

KPIs for 2050

Reducing food waste

Reduce by 50% over 2018

Reduce by 100%

Reducing plastic use(for containers and packaging)

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

Reducing plastic use（Plastic shopping bags）

Plastic shopping bags
Reduce by 100% over 2017―

Reducing CO2 emissions

Reduce by 30% over 2013

Reduce by 100%

To reduce food waste, for a period of 82 days from June 11 to August 31, 2019, we performed a food waste
reduction experiment dubbed “Another Choice” at a total of 452 Lawson stores as of the end of August 2019(216 stores in Ehime Prefecture and 236 in Okinawa Prefecture). Based on this experimental program,
Lawson donated a total of 8,290,838 yen (3,254,673 yen in Ehime and 5,036,165 yen in Okinawa) to help
provide meals for children during summer vacation.
To reduce plastic use, we started replacing the S-sized plastic cups used for iced coffee offered at “MACHIcafé” with paper cups and adopting lids with openings to eliminate the need for straws. Through such efforts,
the amount of plastic used per cup is expected to be reduced by approximately 80%.
As it will become mandatory for retailers nationwide to charge fees for plastic bags from July 1, 2020, weare in the process of deciding on the specifications and price of our plastic bags and discussing related
operations.

6

(TRANSLATION ONLY)To prevent global warming and reduce electricity consumption, we have been installingchlorofluorocarbon CFC-free (CO2 refrigerant) refrigerator/freezer systems. The number of stores equippedwith such systems reached approximately 3,700 as of the end of February 2020, up 300 stores from the endof the previous fiscal year.
We also continued with our scholarship program for children from single-parent families, selecting 400
students to whom we provided scholarships in fiscal 2019. In addition, donations were collected for victims
of typhoons Faxai and Hagibis, as well as for the reconstruction of Shuri Castle in Okinawa Prefecture, which
had been destroyed in a fire, by placing fundraising boxes and accepting donations of reward points at
Lawson Group stores in Okinawa.
As a member of society, we will continue to contribute to the promotion of SDGs through our measures
to address social and environmental issues together with franchise stores, customers and business partners.
(2) Capital Expenditures
Capital expenditures of the Group during the fiscal year totaled 45,903 million yen, of which 34,187
million yen was primarily for store facility investment in buildings, and 10,968 million yen was for the
upgrading of information systems.

(3) Changes in Operating Results and Financial Position① Changes in Operating Results and Financial Position of the Corporate Group
Fiscal 2016
Fiscal 2017
Fiscal 2018
Category/Fiscal Term
42nd Term
43rd Term
44th Term
Gross operating revenue
631,288
657,324700,647(millions of yen)
Ordinary income (millions of yen)
73,014
65,141
57,700
Profit attributable to owners of parent
36,40026,82825,585(millions of yen)
Profit per share (yen)363.96268.16255.71

Fiscal 201945th Term
730,236
56,346
20,108200.95

Total assets (millions of yen)

866,577

900,256

1,342,329

1,357,732

Net assets (millions of yen)

285,995

281,446

281,982

275,347

Net assets per share (yen)2,748.39

2,755.06

2,763.54

2,707.08

Note: Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Statement No. 28;
February 16, 2018), etc. have been applied from the beginning of the fiscal year ended February 29, 2020 inpreparing the consolidated financial statements. The standards have been retrospectively applied to theconsolidated financial statements for the previous fiscal year.
② Changes in Operating Results and Financial Position of the Company
Fiscal 2016
Fiscal 2017
Category/Fiscal Term
42nd Term
43rd Term
Net sales of all convenience stores
2,027,504
2,110,454(millions of yen)
Gross operating revenue
356,186
372,891(millions of yen)
Ordinary income (millions of yen)
56,45950,508

Fiscal 2018
44th Term

Fiscal 201945th Term

2,236,125

2,296,156

385,678

390,81151,44345,962

Profit (millions of yen)

19,08819,41731,002

15,486

Profit per share (yen)190.86

194.09309.85154.76

Total assets (millions of yen)

767,986

798,603

838,260

858,770

Net assets (millions of yen)

237,409

233,489

240,280

233,705

Net assets per share (yen)2,370.59

2,331.65

2,399.24

2,333.04

7

(TRANSLATION ONLY)(4) Priority Issues of the Group① Continue to ensure stable management of franchised stores
The Company recognizes that maintaining the stable management of franchised stores is an important issue.
The Company will implement short-term and medium- to long-term initiatives such as measures to stabilize
management by promoting the management of multiple franchised stores as well as measures to enable new
franchised store owners to start their business with peace of mind, thereby building stronger partnerships withfranchised stores.
② Strengthen our product appeal
By setting out and thoroughly implementing the Three Lawson Promises of “Superior taste,” “Humankindness,” “Environmental (Machi) friendliness,” we aim to further strengthen our product lineup and addresssocial issues, and thus create stores that are recommended by customers.
③Address labor shortages
We are working to address shortages of FC store owners and store crew stemming from the declining birthrate,
the aging of the population and the increase in the number of stores. We will be recruiting new FC store owners
and pursuing multi-store operation, as well as making the maximum use of digital technology to simplify store
operation, increase efficiency, make working environments more pleasant, and reduce labor needs to enablepeople of all sexes, ages and nationalities to work at our stores.
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 Financial Services Business, Seijo Ishii Business, Entertainment-related Business, Overseas Business. We
will also work hard to make maximum use of each Group company’s distinctive features to generate synergistic
effects.
For such purposes, we will utilize advanced digital technologies as well as management resources such asreal stores and customer bases, etc. held by the Group.
⑤ Response to social issues
To help resolve social issues pertinent to the Sustainable Development Goals (SDGs), the SDGs Committee,
which was formed last year, is clarifying the items and issues to be addressed by the Lawson Group, and will
be regularly checking on the progress made in this regard to ensure the Group is striving to resolve issues andhelp bring about a sustainable society.
With respect to risks and opportunities related to climate change, we will also consider the disclosure offinancial impacts in addition to risk management.
⑥ Promote internal control systems and address operating risks
We believe that enhancing internal control across the Group as a whole and dealing with business risks are
absolutely necessary to develop our business on a continual basis. Proactive efforts in corporate governancethat will enable us to meet the expectations of all stakeholders involved with our Group will help improve ourcorporate value. We will continue focusing our efforts on enhancing internal control and addressing businessrisks.
The Company became a consolidated subsidiary of Mitsubishi Corporation in February 2017 and, although
we are publicly listed as a parent/subsidiary pair, we have appointed several independent executives having noconflict of interest with general shareholders. Five of the six directors are independent executives, and a“Nomination and Compensation Advisory Committee” comprising only non-executive directors and non-fulltime outside Audit and Supervisory Board members has been voluntarily established to deliberate on executive
compensation and candidates for representative director/director positions and to advise the Board of Directors,
constituting a system able to ensure the highest levels of management transparency and fairness.
We conduct business activities under our corporate philosophy, “Creating Happiness and Harmony in Our
Communities”. We continue to make companywide efforts to “master the basics”, “respond to changes” and“meet the challenge of further growth.”
We look forward to the continued support and encouragement of our shareholders.

8

(TRANSLATION ONLY)
2. Current Status at the End of February 2020
(1) Major Business Segments of the Corporate Group and Principal Offices(Domestic Convenience Store Business)① Lawson, Inc.
Major Business:
Primarily operates the Lawson-brand franchise system and undertakes management ofcompany-operated stores as the head office of LAWSON, NATURAL LAWSON and
LAWSON STORE100 convenience store chains.
Head Office:Shinagawa-ku, Tokyo
Principal Offices:
Hokkaido area office (Kita-ku, Sapporo), Tohoku area office (Aoba-ku, Sendai),
Chubu area office (Naka-ku, Nagoya), Kinki area office (Suita city, Osaka),
Chushikoku area office (Kita-ku, Okayama) and Kyushu area office (Hakata-ku,
Fukuoka)Note: In addition to the above sites, the Company has 112 offices throughout Japan,
including branches.
② Lawson Sanin, Inc.
Major Business:
Operates LAWSON stores in the Sanin area.
Head Office:Yonago city, Tottori
Note: Lawson Sanin, Inc. was merged into Lawson, Inc. effective March 1, 2020.
③ Lawson urbanworks, Inc.
Major Business:
Operates LAWSON stores mainly in Tokyo and Chiba prefectures.
Head Office:Shinagawa-ku, Tokyo④ Lawson Store100, Inc.
Major Business:
Operates LAWSON STORE100 stores, provides guidance, and engages inmerchandise-related businesses.
Head Office:Shinagawa-ku, Tokyo⑤ SCI, Inc.
Major Business:
Food wholesaler, including processed meats and frozen foods, and wholesaler ofpacking materials.
Head Office:Shinagawa-ku, Tokyo[Stores]Number ofstores673

IbarakiNumber ofstores223

Kyoto

Aomori
Akita

270

Tokyo

1,715

Shiga

156

Tokushima

136

185

Kanagawa

1,088

Nara

138

Kochi

139

Iwate

175

Shizuoka

285

Wakayama

148

Fukuoka

517

Miyagi252

Yamanashi

135

Osaka

1,123

Saga

74

Yamagata

114

Nagano

172

Hyogo

666

Nagasaki

111

Fukushima

162

Aichi

723

Okayama

202

Oita

188

Niigata

225

Gifu

180

Hiroshima

235

Kumamoto

159

Tochigi

199

Mie

138

Yamaguchi

116

Miyazaki

104

Gunma

195

Prefecture
Hokkaido

Prefecture

Prefecture

Number ofstores322

Prefecture
Ehime

243

Ishikawa

105

Tottori

139

Kagoshima

Saitama689

Toyama185

Shimane145

Okinawa

Chiba

603

Fukui

110

Kagawa132

Total (domestic)

Number ofstores211

239
14,444

Note: These figures include stores operated by Lawson, Inc., subsidiary Lawson Sanin, Inc. and three equity-method
affiliates, Lawson Kochi, Inc., Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.

9

(TRANSLATION ONLY)(Seijo Ishii Business)
SEIJO ISHII CO., LTD.
Major Business:
Operates a chain of small supermarkets that seeks to develop and manufacturehigh-value-added products.
Head Office:Setagaya-ku, Tokyo(Entertainment-related Business)① Lawson Entertainment, Inc.
Major Business:
Sells tickets for various events and music/video software inside LAWSON stores andothers.
Head Office:Shinagawa-ku, Tokyo② United Cinemas Co., Ltd.
Major Business:
Manages multiplex movie theaters
Head Office:Shinagawa-ku, Tokyo(Financial Services Business)
Lawson Bank, Inc.
Major Business:
Operates a banking business
Head Office:Shinagawa-ku, Tokyo(Other Business)
・Overseas Business① Lawson (China) Holdings, Inc.
Major Business:
Controls companies that operate overseas business in China.
Head Office:Shanghai, China② Shanghai Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Shanghai, China③ Shanghai Le Song Trading Co., Ltd.
Major Business:
Operates Company-operated convenience stores.
Head Office:Shanghai, China④ Shang Hai Gong Hui Trading Co., Ltd
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Shanghai, China⑤ Zhejiang Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Hangzhou, China⑥ Chongqing Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Chongqing, China⑦ Dalian Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Dalian, China⑧ Beijing Lawson, Inc.
Major Business:
Operates Company-operated convenience stores and franchise stores.
Head Office:Beijing, China⑨ BEIJING LUOSONG Co., Ltd.
Major Business:
Operates Company-operated convenience stores.
Head Office:Beijing, China⑩ Saha Lawson Co., Ltd.
Major Business:
Operates stores under the store brand of LAWSON 108 and 108SHOP.
Head Office:Bangkok, Thailand
・Consulting Business
BestPractice, Inc.
Major Business:
Conducts surveys of convenience stores to give advice and make specific proposals
for the improvement of LAWSON stores.
Head Office:Shinagawa-ku, Tokyo

10

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

Number of Employees

Year-on-Year Change

Domestic Convenience Store Business

5,426

15

Seijo Ishii Business

1,087

71

Entertainment-related Business

1,213

131

Financial Services Business150

9Other Business

2,696

(49)

Total

10,572177

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

Number of Employees

Year-on-Year Change

4,599

48

Average Age

Average Years of Service
40.3

13.1

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

Amount Borrowed (millions of yen)

Syndicated loan

180,000

Mitsubishi Corporation Financial &Management Services(Japan)Ltd.

133,000

Sumitomo Mitsui Banking Corporation

20,000Mizuho Bank, Ltd.

10,000MUFG Bank, Ltd.

5,000

(4) Parent Company and Significant Subsidiaries and Equity-method Associates① Parent Company
Capital Stock
Shareholding
Parent Company
Major Business(millions of yen)(%)
Natural Gas, Industrial Materials,
Petroleum & Chemicals, Mineral
Mitsubishi Corporation
204,446
50.2
Resources, Industrial Infrastructure,
Automotive & Mobility, Food
Industry, Consumer Industry, Power
Solution, Urban Development, etc.
• Relationship with parent company
Mitsubishi Corporation, our parent company, holds 50,150,000 of our shares (50.2% of voting rights).
Mitsubishi Corporation provides guarantees for loans payable and engages in other transactions with the Lawson
Group.
• Information on transactions with the parent company:
a. Ensuring that engaging in these transactions is not harmful to our interests
We have entered into guarantee entrustment agreements with our parent company, and we have paid ourparent company guarantee fees for some of our loans payable based on these agreements. In conducting thesetransactions, we have established transaction conditions that compare with prevailing market prices, as we dofor general transactions.
b. Board of Directors’ assessment on whether these transactions are harmful to our interests, and grounds for thatassessment
Given the perspective in a. above, we solicit appropriate feedback on our management at Board of Directors’
meetings attended by outside directors and outside Audit and Supervisory Board members, with decisions madeafter multi-faceted discussions, and we have determined that such transactions are not harmful to our interests.
c. Views of outside directors if they differ from the Board of Directors’ assessment
Not applicable.

11

(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 Sanin, Inc.

25

million yen

100.0 %

Lawson urbanworks, Inc.

10

million yen

100.0 %

Lawson Store100, Inc.

99

million yen

100.0 %

SCI, Inc.

10

million yen

100.0 %SEIJO ISHII CO., LTD.

100

million yen

100.0 %

Lawson Entertainment, Inc.

100

million yen

100.0 %

Lawson HMV Entertainment United
Cinema Holdings, Inc.

100

million yen

100.0 %

United Entertainment Holdings Co., Ltd.

100

million yen

100.0 %

United Cinemas Co., Ltd.

100

million yen

100.0 %

Lawson Bank, Inc.

11,600

million yen

95.0%

Lawson (China) Holdings, Inc.

2,352 million Chinese yuan

100.0 %

Overseas BusinessShanghai Lawson, Inc.

353 million Chinese yuan

100.0 %

Overseas BusinessShanghai Le Song Trading Co., Ltd.

0.1 million Chinese yuan

100.0 %

Overseas BusinessShang Hai Gong Hui Trading Co., Ltd.

0.3 million Chinese yuan

85.0 %

Overseas Business

Zhejiang Lawson, Inc.

10 million Chinese yuan

100.0 %

Overseas Business

Chongqing Lawson, Inc.

190 million Chinese yuan

100.0 %

Overseas Business

Dalian Lawson, Inc.

66 million Chinese yuan

98.3 %

Overseas Business

Beijing Lawson, Inc.

184 million Chinese yuan

100.0 %

Overseas Business

BEIJING LUOSONG Co., Ltd.

0.1 million Chinese yuan

100.0 %

Overseas Business

Saha Lawson Co., Ltd.

Seijo Ishii BusinessEntertainment-related
Business
Entertainment-related
Business
Entertainment-related
Business
Entertainment-related
Business
Financial Services
Business

1,367

million baht

49.2 %

Overseas Business10

million yen

100.0 %

Consulting Business

BestPractice, Inc.

Notes:
1. Shareholding includes indirectly held shares.
2. Lawson Sanin, Inc. was merged into Lawson, Inc. effective March 1, 2020.
③ Significant Equity-method Associates

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

Capital Stock(millions of yen)
10
100
50

Shareholding
(%)
49.0
49.0
49.0

12

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

(TRANSLATION ONLY)
II. CURRENT STATUS OF THE COMPANY
1. Shares at the End of the Year
(1) Total Number of Shares Authorized to Be Issued:
409,300,000 shares(2) Total Number of Shares Issued and Outstanding:
100,300,000 shares(Including 237,762 shares of treasury shares)(3) Number of Unit (tangen) Shares:
100 shares(4) Number of Shareholders:
31,293(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)

4,799

4.8

Japan Trustee Services Bank, Ltd. (Trust account)

2,654

2.7

NTT DOCOMO, INC.

2,092

2.1

STATE STREET BANK WEST CLIENT － TREATY 505234

1,804

1.8

JPMorgan Securities Japan Co., Ltd.

1,262

1.3

Japan Securities Finance Co., Ltd.

1,179

1.2

Japan Trustee Services Bank, Ltd. (Trust account 7)

1,140

1.1

Japan Trustee Services Bank, Ltd. (Trust account 5)

1,009

1.0

Japan Trustee Services Bank, Ltd. (Trust account 9)

942

0.9

Shareholder’s Name

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

13

(TRANSLATION ONLY)
2. Status of Stock Acquisition Rights(1) Stock Acquisition Rights Held by Corporate Officers of the Company as of February 29, 2020
12th Stock
13th Stock
14th Stock
16th Stock
Acquisition
Acquisition
Acquisition
Acquisition
RightsRightsRightsRightsNumber of option holders and the number of stock acquisition rights (units)
Directors (excluding
0 person1 person
2 persons
2 persons(0 unit)(5 units)(32 units)(43 units)
Outside Directors)
1 person1 person1 person1 person
Outside Directors(5 units)(5 units)(5 units)(5 units)
Class and number ofCommon stock of Common stock of Common stock of Common stock ofshares subject to stock
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
acquisition rights
500
1,000
3,700
4,800
Amount of property
contributed upon the
1 yen
1 yen
1 yen
1 yen
exercise of the sharesubscription rights (pershare)
April 10, 2014
April 10, 2015
May 2, 2016
April 12, 2013
Exercise period
through March 26, through March 23, through March 24, through April 12,
2033
2034
2035
2036
Main exercise
Note 1
Note 1
Note 1
Note 1
conditions
19th Stock
17th Stock
20th Stock
Acquisition
Acquisition
Acquisition
Right
RightsRightsNumber of option holders and the number of stock acquisition rights (units)
Directors (excluding
3 persons
5 persons
5 persons(72 units)(101 units)(116 units)
Outside Directors)
2 persons
2 persons
3 personsOutside Directors(10 units)(10 units)(15 units)
CommonClass and number ofCommon stock of Common
stock of Common stock ofshares subject to stock
Lawson, Inc.
Lawson, Inc.
Lawson, Inc.
acquisition rights
11,1008,200
13,100
Amount of property
contributed upon the
1 yen
1 yen
1 yen
exercise of the sharesubscription rights (pershare)
May 1, 2017
June 8, 2018
June 7, 2019
Exercise period
through April 11,
through May 21,
through May 20,
2038
2037
2039
Main exercise
Note 1
Note 1
Note 1
conditions

14

(TRANSLATION ONLY)(2) Stock Acquisition Rights Issued during the Fiscal Year to Senior Vice Presidents of the Company as
Compensation for Performing Their Duties
20th Stock
Acquisition
RightsNumber of SVPs andthe number of stock acquisition rights
Senior Vice
10 persons
Presidents(47 units)
Class and number ofCommon stock ofshares subject to stock
Lawson, Inc.
acquisition rights
4,700
Amount of property
contributed upon the
1 yen
exercise of the sharesubscription rights (pershare)
June 7, 2019
Exercise period
through May 20,
2039
Main exercise
Note 1
conditions
Notes:
1. A stock acquisition rights holder may exercise his or her rights within the exercise period only fora period of 10 days from the day after losing his or her position as either director and/or executive
officer of the Company.
2. “Senior Vice Presidents” exclude those who concurrently serve as a member of the board.
The total number of shares subject to stock acquisition rights that remain unexercised as of February 29,
2020, is 57,200 shares, accounting for 0.06% of the total number of shares issued and outstanding.

15

(TRANSLATION ONLY)
3. Members of the Board and Corporate Auditors(1) Positions, Names and Assignments (As of February 29, 2020)
Position, Assignments and Important Concurrent Positions
Name
Note: Important concurrent positions of Outside Directors given later in (6) Outside
Directors and Outside Corporate Auditors
Sadanobu Takemasu President and CEO,CHO and Marketing Division Director
Representative Director,
Chairman of the Board
Katsuyuki Imada
Senior Executive Managing
Corporate Strategy and Planning Division Director
Officer, Member of the Board
Satoshi Nakaniwa
Executive Vice President,
CFO and Shared Services Division Director
Member of the Board
Emi OsonoMember of the Board
Yutaka Kyoya
Member of the Board
Executive Vice President, Group CEO, Consumer
Industry Group, Mitsubishi Corporation and Member ofthe Board, Olam International Limited
Keiko Hayashi
Kazunori Nishio

Member of the Board
Member of the Board

Miki Iwamura
Toshio Takahashi

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

Masakatsu Gonai
Eiko Tsujiyama
Yuko Gomi

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

Notes:
1. Three Member of the Board (Emi Osono, Keiko Hayashi and Miki Iwamura) are outside directors as
stipulated in Article 2, Item 15, of the Companies Act of Japan (the “Companies Act”).
2. Three auditors (Toshio Takahashi, Audit and Supervisory Board Member (full-time), Eiko Tsujiyama,
Audit and Supervisory Board Member and Yuko Gomi, Audit and Supervisory Board Member) are outside
corporate auditors as stipulated in Article 2, Item 16, of the Companies Act.
3. Toshio Takahashi, Audit and Supervisory Board Member (full-time), has considerable expertise infinance and accounting, serving at city banks engaged in treasury, risk management and internal audits,
as well as serving as a full-time auditor at the Japanese subsidiary of a major foreign IT firm.
Eiko Tsujiyama, Audit and Supervisory Board Member, has long-term experience as a university professorin accounting and therefore has considerable expertise in finance and accounting.
Yuko Gomi, Audit and Supervisory Board Member, has a wealth of work experience of law and risk
management mainly in relation to the legal affairs of companies, based on her viewpoint of law as a lawyer
and her broad knowledge.
4. The following personnel changes were approved at the board of corporate auditors’ meeting and the44th general meeting of shareholders held on May 21, 2019.
Appointment
Audit and Supervisory Board
Yuko Gomi
MemberAudit
and Supervisory Board
Tetsuo Ozawa
Resignation

16

(TRANSLATION ONLY)[Reference] Members of the Boards and Senior Vice Presidents(Excluding Non-Executive Directors) (As of March 1, 2020)
Name
Sadanobu Takemasu

Shuichi Imagawa
Yuichi Wada
Motonobu Miyake

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

Akihito Watanabe

Executive Vice President

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

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

Tatsuya Murase
Kisho Tsuruta
Miwako Tate
Hajime Kawamura
Yasuhiro Iseki

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

Hiroko Otani

Senior Vice President

Katsuyuki Imada
Satoshi Nakaniwa
Jun Miyazaki

Position and Major Title
CHO

Corporate Strategy and Planning Division Director
CFO
Corporate Communications Division Director, ―Human
Resources and Executive Assistant to CHO―Compliance & Risk Management and ―Human Resources
Store Operations Division Director
China Business Division Director and Lawson (China) Holdings,
Inc. General Manager
Lawson Entertainment, Inc., United Cinemas Co., Ltd. and
Lawson Travel, Inc. President and Representative Director
Merchandising Division Director
Merchandising Division Deputy Director
Executive Assistant to President
Shanghai Lawson, Inc. General Manager
Corporate Sales and Store Development Division Director
Financial Services and Digital Business Division Director
Asia Pacific Business Division (IT System) and China Business
Division (IT System)
Franchisee Business Support Division Director
Marketing Strategy Division Director
Communication Division Director
Franchisee Business Support Division Deputy Director
SEIJO ISHII CO., LTD. Member of the Board, Senior Executive
Vice President (Temporary Transfer)Marketing Strategy Division Deputy Director and Merchandising
Division Deputy Director

17

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

Number of
Corresponding
Directors andCorporate Auditors

211

171

39

8

34

30

4

3

74

74

－

5

50
285

50
245

－
39

4
13

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

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

18

(TRANSLATION ONLY)[Basic compensation]
Basic compensation of directors is composed of fixed compensation with fixed monthly payments andvariable compensation, which fluctuates in response to the Company’s financial performance for each period.
• Fixed compensation
The amount of fixed compensation commensurate with the position is determined based on standards
stipulated by internal rules.
• Variable compensation
In order to link the remuneration of directors with shareholder returns, the Company has adopted acompensation system that is linked to the Company’s financial performance.
Variable compensation is paid in accordance with earnings indicators such as EPS (consolidated net
income per share). Regarding five non-executive directors, Emi Osono, Yutaka Kyoya, Keiko Hayashi,
Kazunori Nishio and Miki Iwamura, variable compensation is not applicable as they are focused on theirsupervisory and advisory roles as the Company’s representative directors and in the board of directors
meetings.
[Stock price-linked compensation]
Stock options as stock-based compensation
By incorporating stock options as stock-based compensation linked with stock prices as part ofcompensation paid to directors, the Company has a system in which management shares with stockholders
the benefits from a rise in stock price as well as the risks associated with a price decline. The Company
positions stock options as compensation that is linked to medium to long-term improvement of its corporate
value.
Exercise price on stock options as stock-based compensation is 1 yen per share and the amount of units
granted is determined in accordance with the position of directors. In addition, stock options as stock-based
compensation can be exercised only during designated periods after retirement from office; directors are notallowed to exercise their stock option rights during their term in office.
④ Limit on the amount of remuneration paid to directors
The limit on the amount of remuneration paid to the Company’s directors is determined at the general meetingof shareholders in accordance with laws and regulations.
• Amount of remuneration paid to directors
Resolutions at the general meeting of shareholders as of May 24, 2001: 400 million yen or less per year
• Amount of stock options granted to directors
Resolutions at the general meeting of shareholders as of May 27, 2014: 300 million yen or less per year
(5) Policy on Decisions Concerning the Amount of Remuneration Paid to Corporate Auditors① Basic policy on decisions concerning the amount of remuneration paid to corporate auditors
Regarding the amount of remuneration paid to corporate auditors, it is the Company’s basic policy to reward
each corporate auditor with a sufficient and adequate amount of compensation for the execution of their duties.
② Decision-making process for the amount of remuneration paid to corporate auditors
The amount of remuneration paid to corporate auditors is determined based on discussions among corporate
auditors and is within the remuneration amount limit resolved at the general meeting of shareholders.
③ Details of remuneration paid to corporate auditors
The Company’s corporate auditors receive basic compensation (fixed compensation) in cash.
The amount of basic compensation is decided based on discussions among corporate auditors, taking into
consideration whether or not they are working on a full-time basis, and segregation of auditing duties. Regarding
retirement benefits, the system itself was abolished.
④ Limit of the amount of remuneration paid to corporate auditors
The limit of the amount of remuneration paid to the Company’s corporate auditors is determined at the general
meeting of shareholders in accordance with laws and regulations.
Amount of remuneration paid to corporate auditors
Resolutions at the general meeting of shareholders as of May 29, 2012: 80 million yen or less per year

19

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

Outside Director(Independent)

Name

Emi Osono

Position Concurrently Held

Details

Relationship between
the Company andCompany Where
Position Concurrently
Held

Graduate School ofInternational Corporate
Strategy, Hitotsubashi
University

Professor－

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

Vice President, AsiaPacific, Japan(Marketing)

－

－

－

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

Outside Director(Independent)

KeikoHayashi

Outside Director(Independent)

Miki
IwamuraGoogle Japan LLC

Corporate Auditor
Toshio(Independent)
Takahashi－

Outside Corporate
Eiko
AuditorTsujiyama(Independent)

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

Waseda University
ORIX Corporation

Emeritus Professor

NTT DOCOMO, INC.
Shiseido Company, Limited

T.Kunihiro & Co. Attorneys-at-Law

Outside Corporate
Auditor
Yuko Gomi(Independent)

Outside director
Outside corporate
auditorOutside corporate
auditorNTT DOCOMO, INC.,
for which Eiko Tsujiyama
serves as an outside
corporate auditor, is alarge shareholder of theCompany, and has abusiness relationship with
the Company in thetelecommunications fieldunder an extensive
business allianceagreement.

Partner

NIPPON GAS CO., LTD.

Outside corporate
auditor

ALPS ALPINE CO., LTD.

Outside director
Audit and supervisorycommittee member－

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

20

(TRANSLATION ONLY)② Major Activities during the Year

Position in the
Company

Name

Outside Director(Independent)

Emi Osono

Outside Director(Independent)

Keiko Hayashi

Outside Director(Independent)

Miki Iwamura

Corporate Auditor(Independent)

Toshio Takahashi

OutsideCorporate Auditor(Independent)

Eiko Tsujiyama

OutsideCorporate Auditor(Independent)

Yuko Gomi

Major Activities
Ms. Osono attended 11 of 13 board of directors’ meetings held during
the year, and as an academic, appropriately questioned and/or
remarked based on her abundant knowledge of global corporate
management, corporate strategy and organizational behavior, etc. Ms.
Osono is also a member of the Company’s Nomination andCompensation Committee.
Ms. Hayashi attended all 13 board of directors’ meetings held
throughout the year during her term in office and, as a management
executive, appropriately questioned and/or remarked based on her
abundant knowledge. Ms. Hayashi is also a vice chairperson of theCompany’s Nomination and Compensation Committee.
Ms. Iwamura attended 12 of 13 board of directors’ meetings held
throughout the year during her term in office, and as an executive Vice
President of a global IT company, appropriately questioned and/or
remarked based on a wealth of her experience and knowledge. Ms.
Iwamura is also a member of the Company’s Nomination andCompensation Committee.
As a standing corporate auditor, Mr. Takahashi examined financial
documents and visited relevant establishments and business partners to
examine their business operations and financial situation. Mr.
Takahashi monitored and verified the execution of duties of directors
and other personnel including those relating to the improvement ofinternal control systems.
Mr. Takahashi attended all 13 board of directors’ meetings and all 19
board of corporate auditors’ meetings held during the year andappropriately questioned and/or remarked based on his deep
knowledge finance and accounting and using his experience ofassuming responsible posts for many years on the board of audit ofJapan.
Ms. Tsujiyama attended all 13 board of directors’ meetings and all 19
board of corporate auditors’ meetings held during the year andappropriately questioned and/or remarked based on her deep
knowledge of accounting as an emeritus professor in this field. Ms.
Tsujiyama is also a chairperson of the Company’s Nomination andCompensation Committee.
Ms. Gomi attended all 11 board of directors’ meetings and all 14 boardof corporate auditors’ meetings held during the year and, as a lawyer,
appropriately questioned and/or remarked based on her viewpoint of
law as a lawyer and her broad knowledge. Ms. Gomi is also a memberof the Company’s Nomination and Compensation Committee.

21

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

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

22

(TRANSLATION ONLY)
III. SYSTEMS AND POLICIES OF THE COMPANY
1. Determination of Resolution of Systems to Ensure the Propriety of Business Operations
Based on improvements and the operation of the preceding “2018 Basic Policy for Improvement of Internal
Control Systems,” which was approved at the board of directors’ meeting held on February 18, 2019, the Company
passed a resolution called the “2019 Basic Policy for Improvement of Internal Control Systems,” as indicatedbelow.
(1) Systems to Ensure Compliance of the Execution of Duties by Directors and Employees with Laws andRegulations and the Articles of Incorporation① The board of directors shall determine the improvement policies and plans for internal control systems,
including those for compliance with laws, regulations and the like (“Compliance”), and receive status
reports thereof periodically.
② The board of directors shall maintain and improve the supervising function regarding the execution ofduties by the directors by electing outside Directors on an ongoing basis.
③ The corporate auditors shall independently audit the execution of duties by the directors, including thestatus concerning the improvement of the internal control systems.
④ The board of directors shall maintain and raise the awareness of officers and employees regarding
compliance by thoroughly disseminating the Group Code of Conduct and the Lawson Ethical Mission
Statement by such measures as, including, but not limited to, appointing a Chief Compliance Officer,
establishing a department to oversee compliance, assigning personnel in charge of compliance at eachdepartment, streamlining the rules in relation to compliance, and providing periodic training on ethics andawareness surveys on compliance.
⑤ The Legal Affairs Department shall be reinforced to fortify foundations for complying with legal
requirements by identifying the laws and regulations applicable to the Company’s businesses andcommunicating the content thereof to the relevant departments and sections.
⑥ The Internal Audit Department, which is independent from the business-executing bodies, shall audit thestatus concerning the improvement of the internal control systems and recommend improvements thereof, as
required.
⑦ With the aim to strive for the early detection of violations or possible violations of laws, regulations, etc.
across the Group and the entire chain, the Company shall establish and upgrade normal reporting routes forreporting any violations of laws, regulations or internal rules. It shall establish reporting and consulting
systems (internal consulting contact points, group-wide outside consulting contact points and consulting
contact points for employees and business counterparties for Lawson’s franchised stores) that fully protect
those who make such reports. If violations of laws, regulations or internal rules are discovered, corrective
measures shall be taken immediately and policies implemented to prevent recurrences.
⑧ The Company shall never become involved with antisocial forces or bodies that threaten the order andsecurity of society, and shall take a firm stance on, and deal with, improper demands by consulting withlawyers the police and the like.
(2) Systems to Preserve and Manage Information Pertaining to the Execution of Duties by Directors① The Company shall record, preserve and manage information relating to decision making at important
meetings such as those of the board of directors and the management council, and authorizing documents,
including those approved by the president and representative director, as well as financial, clerical and risk
and compliance-related information (including information contained in electromagnetic media). Moreover,
the Company shall put in place a system allowing relevant parties to inspect the above information.
② The Company shall manage and monitor its information systems in a secure manner, in addition tomaintaining the systems, by sufficiently taking into account contingencies.
③ The Company shall establish and maintain rules regarding the management of documents (including
electromagnetic recording media), keep everyone informed about the responsibility and authority for
document management, document storage periods and management methods, and periodically monitor the
status of document storage and management.
④ The Company shall establish and maintain rules regarding the protection of personal information and the
management of trade secrets, and appropriately and safely store and manage personal information andimportant trade secrets.
⑤ The Company shall establish and maintain an information security system for the Group by putting inplace a Chief Information Security Officer and a division that oversees information security with the aim ofpromoting information security in a consolidated and unified manner in view of both risk management andsystem technology security.
⑥ The Company shall establish and maintain rules regarding the disclosure of important Company
information, and upgrade the system for disclosing information that must be disclosed according to therequirements of laws, regulations and stock exchanges, in an appropriate, timely and fair manner.

23

(TRANSLATION ONLY)(3) Rules and Other Systems Regarding Risk Management① The Company shall establish a department to oversee risk management, improve rules related to risk
management, and improve group-wide risk prevention systems during normal operations. Moreover, theCompany shall respond according to the characteristics of risks by identifying risks that might have adverse
effects on the Company’s management in connection with its business purposes in each department,
analyzing the probability of such risk factors materializing and their impact, and evaluating whether
intensive countermeasures should be taken.
② To ensure the effectiveness of risk management, the Company shall establish a specialist committee(“Compliance & Risk Management Committee”) and clarify the authority and responsibility of thecommittee and its chairperson. Furthermore, the Company shall endeavor to increase awareness about risk
management by assigning risk management staff to departments and associated companies and conducting
risk management training.
③ The Company shall develop contingency systems and formulate policy for contingency response bodies inadvance to prepare for the occurrence or possible occurrence of unanticipated situations or events, whichmight have adverse effects on management of the Company, in order to provide a quick response to any
actual occurrence thereof and to take effective measures to prevent a reoccurrence.
④ The Company shall formulate a Business Continuity Plan (BCP) and a Business Continuity Management(BCM) system to minimize the business interruption and maintain the lifeline function of convenience storesin the event of the occurrence of situations or events inflicting substantial damage on the Company such as alarge-scale natural disaster or an epidemic of a new-type influenza. In order to be prepared for major
earthquakes, the Company shall conduct disaster prevention drills three times a year while working to secure
effectiveness of the “Disaster Countermeasure Manuals” and the “BCP” system.
(4) Systems to Ensure the Efficient Execution of Duties by Directors① The Company shall clarify the functional authority and responsibility of corporate officers and employees
for decision making and execution of business affairs. The Company shall also improve rules for thedivision of duties to ensure and encourage more appropriate division of duties and collaboration amongorganizational bodies.
② The Company shall work to raise operational efficiency by simplifying business processes, streamlining theorganization and making appropriate use of IT.
③ In order to promote the proper communication of information and communications between officers andemployees, the Company shall improve systems so that management guidelines and policies are
disseminated to employees by corporate officers and important field information is properly
communicated by employees to corporate officers in a timely manner.
④ The Company shall seek to improve labor productivity by promoting work style reform.
(5) Systems to Ensure the Propriety of Business Operations Conducted by the Corporate Group Consistingof the Company, Its Parent Company, and Its Subsidiaries① System for reporting to the Company on matters pertaining to the execution of duties by the subsidiary’s
directors, etc., and system for ensuring that the subsidiary’s directors, etc., carry out their duties efficiently• The Company shall develop regulations to specify the management of subsidiaries and affiliated companies(“Associated Companies”) and endeavor to maintain and enhance the Lawson brand through close
collaboration with Associated Companies. However, with regard to affiliated companies, the Company will
work to appropriately establish and maintain systems through phased implementation, taking into accountsuch factors as relations with other leading shareholders differences in laws, regulations and businesscustoms and the like of foreign countries.
• While establishing a department that supervises the management system of Associated Companies andrespecting the independence of Associated Companies, in view of the purpose of the Company’s equity
participation in Associated Companies, the Company shall strengthen measures aimed at optimizing themanagement system of Associated Companies by providing consultation and advice as required andestablishing a reporting system from Associated Companies.
② Regulations and other systems for risk management by the subsidiary, and system for ensuring that thesubsidiary’s directors, etc., and employees execute their duties in conformity with laws, ordinances, and thearticles 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 strive to ensure that the Group Code of Conduct
is widely disseminated among Associated Companies.
• By establishing an organization in charge of Associated Companies (responsible department,

department in charge) as well as a specialized department to support Associated Companies from a
specialist perspective, the Company shall strive to ensure the appropriateness of the operations of
Associated Companies.
• The Company shall appoint designated persons at major Associated Companies to be responsible for24

(TRANSLATION ONLY)
promoting compliance and risk management and promote communications between the Company
and major subsidiaries with a view to ensuring appropriate business operations across the entire
Group.
• The Company shall develop a system in which immediate reporting is made by compliance managers of

associated companies in the event that they have identified any facts that may cause material damage totheir companies.
• The Internal Audit Department shall cooperate in auditing the status of establishment of internal control
systems at Associated Companies and promote improvements based on the results of audits.
③ The Company shall develop a system in which the parent company is immediately notified in the event any
facts that may cause material damage to the Company and its associated companies have been identified.
(6) Necessary Systems to Ensure Proper Financial Reporting by the Company and Its Group ofCompanies① The Company shall enhance systems for preparing financial statements according to laws, regulations, andaccounting standards and disclosing the same after they have been discussed, examined, and confirmed inaccordance with regulations governing information disclosure in order to report financial information in aproper 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 importantbusiness bases and the status of Company-wide internal controls. The results of these evaluations of, andimprovements at, the Company and important subsidiaries shall be regularly reported to the board of
directors.
(7) Matters Concerning Employees Where a Corporate Auditor Requests Employees to Assist with Duties① The Company shall assign appropriate personnel to the auditors’ office (“Corporate Auditors’ Staff”) as
employees exclusively to assist corporate auditors in the execution of their duties.
② Corporate Auditors’ Staff may serve concurrently as corporate auditors of Associated Companies.
③ Corporate Auditors’ Staff shall have the authority to conduct investigations necessary for audits bycorporate auditors following the instructions of corporate auditors.
(8) Independence of Employees from Directors in the Preceding Item
Performance reviews of Corporate Auditors’ Staff shall be conducted by the standing corporate auditors toensure that Corporate Auditors’ Staff carry out their duties appropriately. Personnel changes require the priorconsent of the standing corporate auditors.
(9) Systems for Directors and Employees to Report to Corporate Auditors and Other Reporting Systems
to the Corporate Auditors① Directors and employees of the Company shall report important corporate management and businessadministration matters, as well as the status and results of the execution of their duties, to corporate
auditors so that the corporate auditors can carry out their duties effectively. Such important matters include
compliance- and risk-related issues and other matters relating to internal control.
② If directors become aware of any fact or event that will likely cause the Company to suffer significant
damage or loss, they shall immediately inform the board of corporate auditors.
③ Reports to corporate auditors shall basically be made in good faith without fail, and shall be madepromptly, if required, in addition to periodic reports.
④ The Company shall develop a system in which the contents of consultations sought or reports made to the
Independent Whistleblower Hotline across the Group are reported to corporate auditors on a timely basis.
(10) Other Systems to Ensure Effective Audits by Corporate Auditors① The representative directors and corporate auditors shall have regular meetings to enhance smoothcommunications with each other.
② Directors shall cooperate with the corporate auditors with regards to communications, the collection andexchange of information and so on between the corporate auditors and the corporate directors and the likeof Associated Companies so that the corporate auditors can perform their duties appropriately.
③ Directors shall also cooperate in conducting surveys of significant business partners, which the corporate
auditors deem necessary.
④ Directors shall enable the corporate auditors to collaborate with outside experts such as lawyers andcertified public accountants, if any corporate auditor deems it necessary in executing his/her duties.
⑤ The Legal Affairs, Risk Management, Internal Audit, and Finance and Accounting departments of theCompany shall assist in conducting necessary surveys for audits when requested by any corporate auditor.

25

(TRANSLATION ONLY)
2. Outline of Operational Status of Systems to Ensure the Propriety of Business Operations
The Company operates internal control systems in accordance with the aforementioned basic policy. Their operational status is as
outlined below.
(1) Compliance and Risk Management Systems① The Company strives to be a good corporate citizen able to act according to high ethical standards and with integrity andthoughtfulness by implementing the PDCA (Plan-Do-Check-Action) cycle while integrating its code of conduct, educationand training, communication function and monitoring activities in an organic manner.
② The Company has streamlined the Lawson Ethical Mission Statement. Along with that, The Company has established The
Group Code of Conduct as its code of conduct, published them in the “Lawson Group C&R Handbook,” and distributed
the handbook to all employees in an effort to thoroughly disseminate its content with the aim of ensuring the propriety ofbusiness operations across the Group.
③ In order to promote compliance and establish and promote the risk management system, the CR Executive Officer is appointed
as an executive officer with overall responsibility for compliance and risk management, and the position of Compliance &Risk Management Officer (CRO) is established for each head office and region. CROs attend the Compliance & Risk
management meetings organized by the executive officer in charge of Compliance & Risk Management, thoroughly
disseminate measures determined at the meetings, and monitor the progress of such measures and formulate, disseminate andimplement compliance measures and risk management measures of their own departments as leaders promoting such measures,in an effort to create a corporate culture that emphasizes compliance with social norms and prevents the occurrence of risk
events.
④ On the educational/training front, the Company aims to further improve ethical awareness and the ability to withstand crises
by conducting compliance and risk management training for all employees every year. In addition, the Company has
established an educational system to enable systematic learning by providing training upon joining the Group and upon
promotion to a managerial position, and training by job types and training conducted by external lecturers for company
management. The Company is seeking measures to ensure that employees of various job positions and job types will be able
to share problems to improve their operations by maintaining these educational/training programs while revising their content
in line with changing risk conditions.
⑤ With respect to whistleblowing reports, the Company has established a consultation contact point exclusively for sexual
harassment and power harassment, which is offered by the Human Resources Department, as well as an internal consultation
and reporting contact point for compliance and risk management matters. In addition, there are the Group Independent
Whistleblower Hotline at a law firm and other external organizations as well as an anonymous consultation contact point for
employees of the Company’s business counterparties and store staff. The Company shall seek to strengthen self-rectification
within the organization by treating instances of whistleblowing appropriately, reviewing the system to prevent recurrence, andintroducing specific cases at meetings and through training programs and internal notifications.
⑥ The Company has established the Compliance & Risk Management Office and the Information Security Management Officecomprising dedicated staff under the leadership of the CR Executive Officer. As departments in charge of the promotion andestablishment of compliance and risk management, the two offices act as the secretariat of the Compliance & Risk
Management Committee Meeting and the Information Security Committee Meeting, which are cross-organizational meetings,
and manage the progress of measures by each department. Meanwhile, four subcommittees (Food Safety and Hygiene
Management Subcommittee, BC Subcommittee, Regional Office Crime Prevention and Disaster Defense Subcommittee and
CSV Subcommittee) have been separately established under the Compliance & Risk Management Committee Meeting in aneffort to manage the progress of key measures and prevent risks⑦ In terms of monitoring activities, the Company continuously conducts awareness surveys targeting all employees andquestionnaire surveys targeting the Company’s business partners with regard to matters such as product delivery and store
construction, and thus reviews and improves its compliance system from a broad perspective. In addition, the Company provides
thorough guidance and improvement proposals based on the results of audits conducted by the Internal Audit Department.
⑧ At major Associated Companies, officers in charge of compliance risk management (Affiliated Company Compliance Officers)
are also appointed and these officers attend the Affiliated Company Compliance Officers Meeting. Affiliated Company
Compliance Officers strive to enhance awareness among employees by formulating the code of ethics and providing training
while conducting employee awareness surveys and questionnaire surveys for business counterparts in collaboration with theCompany. In addition, through the operational audits conducted on Associated Companies by the Company’s Internal Audit
Department and the liaison meetings for the Group’s corporate auditors organized by the Company’s corporate auditors, etc.,
guidance and advice have been offered to improve the compliance and risk management systems of the Group.
⑨ A former employee of the Company’s IT Department was found to have conspired with a business counterparty for
approximately nine years from 2011 to 2019 to allow the business counterparty to pool a large amount of money labeledreserve funds by inflating outsourcing fees and to use the money privately. The Company publicly announced this incident inAugust 2019. Because we had one employee in charge of the same work for many years, the internal monitoring function did
not operate properly, and we were unable to detect the misconduct through regular operational checks. In order to prevent therecurrence of similar incidents, we will implement regular personnel rotation for operations involving decision-making related
to the appointment of business partners and continuation of transactions so that same personnel cannot continue to be in chargeof the same business operations. At the same time, we are working to further raise awareness of compliance through training.
To this end, we are strengthening our internal check-and-balance system with regular internal business surveys, and developinga system that makes it easier to detect misconduct by utilizing questionnaires for the Company’s business partners and26

(TRANSLATION ONLY)
reviewing contract terms.
(2) Preparations against and Responses to Risks① The Company places particular emphasis on “food safety and hygiene management,” information security” and “disaster
relief,” and it has prepared a structure for responding to emergencies and resolving problems rapidly. In normal times, theCompliance & Risk management meetings and four sub-committees are organized to assess risks and formulate and promoterisk prevention measures with the aim of preventing the occurrence of risk events. In the event of significant risk events,
the Emergency Risk Management Committee is convened in an effort to swiftly solve issues and minimize damage. Once theproblems have been resolved, the Company analyzes the factors contributing to their occurrence and reviews and improves
the relevant countermeasures to prevent any recurrence.
② With regard to the information security system, the “Lawson Group Privacy Policy” has been formulated to promote protectionof personal information. To ensure that the relevant personnel understand the specific details of the contents and are preparedto implement them, the Company produces and publishes various manuals illustrating potential mistakes and complaints that
may arise at the stores, accompanied by practical responses to them, for stores in an effort to raise awareness. Matters to beobserved are compiled in the Information Security Guidebook, and employees are tested periodically to ensure that they are
all acting reliably based on the “Lawson Office Security Rules.” The Company also conducts training to respond to targeted
attack emails.
In handling the personal information of customers, a system has been established to specify collection and retention methods,
retention period, administration manager, etc. particularly with respect to each measure and go through the check by aspecialized unit prior to execution. When consigning responsibility for storing personal information to outside organizations,
we require that a detailed investigation of the organization’s security framework be conducted in advance and that consignmentof the responsibility be made only to organizations that satisfy the Company’s conditions. Additionally, an onsite or
documented inspection is conducted annually to ensure that the conditions are maintained.
In term of information security management at stores, we request FC store owners to provide their store staff with education
on SNS while disseminating educational videos on SNS to store computers to raise awareness.
Moreover, the Company carries out checks such as evaluation of the vulnerability of information systems, information
security audits by the Internal Audit Department and office security audits by a specialized company.
③ We are reinforcing our emergency response capabilities through efforts such as formulating the Business Continuity Plan
(BCP) and implementing disaster mitigation measures. Our aim is to institute a business continuity (BC) framework thatprevents interruption of important business activities, even in the case of significant damage due to a large-scale disaster, etc.
The Company believes that interruption of important business activities shall be avoided, while maintaining a priority on
securing people’s safety and wellbeing. Even if business operations are unavoidably interrupted, critical functions shall beresumed quickly and life infrastructure functions of convenience stores shall be maintained in order to avoid undermining
customer satisfaction or our corporate value. In order to achieve such objective, practical procedures are compiled in theBusiness Continuity Plan (BCP), and we are pursuing efforts to establish a BC framework in line with the BCP, and to sustain
and enhance it, as an important issue for management. In an effort to enhance its ability to respond to crises across the Group,
the Company has been constantly reviewing and improving both “hard” aspects such as office buildings and lifelines and “soft”
aspects such as the BCP and manuals as well as the skills of employees and franchisees.
The Company has formulated the “Disaster Relief Manual” based on the disaster relief policy, defining its approach toward disaster relief
and the standard of conduct of the organization and its employees in the event of a disaster. There are three parts to the manual: “Concept ofOperations,” “Initial Actions,” and “Response and Recovery Actions,” in which the response rules and procedures for measures according to
the disaster level for all employees and the entire organization are described. Additionally, in the event of a major incident impacting theheadquarters operations, to ensure the continuance of important business activities as the franchise headquarters, we have formulated the“BCP Guidelines” based on the Business Continuity Plan, defining the organization’s standard of conduct.

When large-scale disasters occur, our first priority is to confirm the safety of the Company’s employees and our FC owners
and crews. The Company conducts Companywide disaster prevention drills three times a year in which participants acquire
experience in implementing a variety of measures, including responding by telephone, email and disaster message dialing andapplying the safety check system. This prepares every individual to respond smoothly should emergencies arise. Manuals
elucidating the requisite disaster preparedness and responses are distributed to the stores. When large-scale disasters occur,
disaster relief headquarters are set up immediately in three locations in the affected area: headquarters, regional offices andlocal sites. The Company takes advantage of a Disaster Information Map System designed to enable personnel to confirm thedisaster situation in real-time and implement support measures for shops, factories and delivery centers, so that stores in thedisaster area can be reopened for business at an early timing.
In addition, the Company has been working to conclude agreements on the procurement of goods and support for stranded
commuters during a large-scale disaster event with the aim of engaging in mutual cooperation with municipal governments
in disaster stricken areas and fulfilling a lifeline function. We were named a designated public institution assigned by thePrime Minister pursuant to the Basic Act on Disaster Control Measures. To fulfill the lifeline functions expected of it as adesignated public institution by maintaining store operations and providing emergency relief supplies to disaster-hit areas, theCompany ordinarily prepares/revises disaster-prevention business plans, conducts disaster-prevention drills, stockpiles
supplies/materials, and pursues other disaster-prevention approaches, implementing its disaster-response measures whendisasters actually occur.

27

(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 an associated company to the Company,
information on risk cases at the Company or its associated companies is appropriately reported to the parent company on atimely basis.
② By establishing an organization in charge of Associated Companies as well as a specialized department to support AssociatedCompanies from a specialist perspective, the Company shall strive to ensure the appropriateness of the operations of
Associated Companies.
(4) Securing Effectiveness of Performance of Corporate Auditors① Corporate Auditors’ Staff are assigned to the auditors’ office to provide exclusive assistance to corporate auditors in theexecution of their duties. Corporate Auditors’ Staff have the authority to conduct investigations necessary for audits bycorporate auditors. In addition, relevant departments assist in conducting necessary investigations for audits by corporate
auditors in accordance with the content of the audits.
② With regard to reporting to corporate auditors, matters that should be reported to corporate auditors have been reported tocorporate auditors in a timely and appropriate manner.
The above monetary amounts and the numbers of shares in this Business Report are rounded down to the nearest unit andpercentages are rounded to the nearest one decimal place.

28

(TRANSLATION ONLY)

Consolidated Balance Sheet(Millions of yen)
AssetsLiabilities
As of February
28, 2019(for reference)

As ofFebruary 29,
2020

619,603354,240

636,697
343,587

Current liabilities
Accounts payable-trade598,522
123,408

561,963
129,397

47,17947,366

Short-term loans payable

126,600

39,85019,12017,876

20,862120,969
57,355(124)722,726
382,300
207,755
16,056
9,052
146,880

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

2,223

1,825

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

331
106,672
49,791
46,836
9,468
576
233,753
31,14044,024
107,034

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

Deferred tax assets

30,99534,378Other

21,39518,938

Allowance for doubtful accounts

(835)

(630)

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

Total assets

1,342,329

1,357,732

29

Account item

As of February
As of28, 2019
February 29,(for reference)
2020

Current portion of long-term
50,000loans payable
Lease obligations
38,750Accounts payable-other
101,995
Income taxes payable
6,683
Deposits received
131,804
Provision for bonuses
4,263
Other
15,015
Non-current liabilities
461,824
Long-term loans payable
260,000
Lease obligations
131,441
550
Deferred tax liabilities
Provision for retirement
benefits to executive officers
300
and audits and supervisoryboard members
Net defined benefit liability
15,125
Asset retirement obligations
31,102
Other
23,303
Total liabilities
1,060,347
Net assets
Shareholders’ equity
270,649
Capital stock
58,506
Capital surplus
46,984Retained earnings
166,187
Treasury shares(1,028)
Accumulated other5,865
comprehensive income
Valuation difference on
3,349
available-for-sale securities
Revaluation reserve for land
(566)
Foreign currency translation
3,930
adjustment
Remeasurements of defined(848)
benefit plans
Subscription rights to shares
215
5,251
Non-controlling interests
Total net assets
281,982
Total liabilities and net assets 1,342,329－
45,61094,848
7,915
193,096
4,667
46,577
520,421
310,000
136,665521
282
16,24535,335
21,3701,082,385
267,181
58,50644,605
165,081(1,011)
3,695
1,496
(207)
3,341
(934)
255
4,214
275,347
1,357,732

(TRANSLATION ONLY)

Consolidated Statement of Income(Millions of yen)
From March 1, 2018 to
February 28, 2019
(for reference)

From March 1, 2019 toFebruary 29, 2020

Income from franchised stores

302,136

314,260

Other operating revenue

109,931

412,067

113,132

427,393(288,579)

288,579(302,843)

302,843(198,040)

700,647
198,040(205,746)

730,236
205,746

Account item
Operating revenue

Net sales
Net sales
Gross operating revenue
Cost of sales(90,539)

Gross profit
Operating gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Share of profit of entities accounted for using
equity method
Compensation income
Penalty income

524,490441,825
60,781

461,547
62,943

714

651

320

571

382

680

322

408

1,716

Other

(97,097)502,607

3,456

1,381

3,692

Non-operating expenses
Interest expenses
Loss on cancellation of leases

2,768
1,655

Other

2,113

4,006
3,675
6,538

2,607

57,700Ordinary income
Extraordinary income
738

Gain on sales of investment securities

738

10,28956,346164

164

Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets

224
4,141

508
6,120

Impairment loss

13,891
303

18,722

Other

18,561840

39,876

Profit before income taxes
Income taxes-current

18,328(4,015)

Income taxes-deferred
Profit30

30,31912,814

14,31325,562(22)
25,585

Profit attributable to non-controlling interests
Profit attributable to owners of parent

26,191(2,563)

10,25020,068(39)
20,108

(TRANSLATION ONLY)

Consolidated Statement of Changes in Equity(From March 1, 2019 to February 29, 2020)
Shareholders’ equity

Balance at beginning of current
periodAccumulated other comprehensive income

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equityValuationdifference on
available-forsale securities

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans

Total
accumulated
othercomprehensive
incomeSubscription
rights toshares

Noncontrollinginterests

Total net
assets58,506

46,984

166,187(1,028)

270,649

3,349

(566)

3,930

(848)

5,865

215

5,251

281,982

Cumulative effects of changes
in accounting policies
Restated balance(Millions of yen)

(593)
58,506

46,984

165,593(593)(1,028)270,056

(593)
3,349

(566)

3,930

(848)

5,865

215

5,251

281,388

Changes of items during period
Change in ownership interestof parent due to transactions
with non-controllingshareholders
Dividends of surplus(2,375)

Profit attributable to ownersof parent(2,375)(2,375)(20,262)(20,262)(20,262)

20,108

20,108

20,108

(0)

(0)

(358)

(358)

14

14

Purchase of treasury shares(0)

Reversal of revaluation
reserve for land

(358)

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

(3)

18

Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current period(1,852)

358

(589)

(86)

(2,169)39(1,037)(3,167)－(2,379)(512)

17(2,874)(1,852)

358

(589)

(86)

(2,169)39(1,037)(6,041)58,50644,605

165,081(1,011)

267,181

1,496

(207)

3,341

(934)

3,695

255

4,214

275,347

(TRANSLATION ONLY)(Notes to Consolidated Financial Statements)(Accounting Policies for the Preparation of Consolidated Financial Statements)
1. Scope of consolidation(1) Number of consolidated subsidiaries: 21(Domestic)
Lawson Entertainment, Inc.
BestPractice, Inc.
SCI, Inc.
Lawson Store100, Inc.
Lawson HMV Entertainment United Cinemas Holdings, Inc.
United Entertainment Holdings Co., Ltd.
United Cinemas Co., Ltd.
SEIJO ISHII CO., LTD.
Lawson Sanin, Inc.
Lawson Bank, Inc.
Lawson urbanworks, Inc.
Chongqing Lawson, Inc.
(Foreign)
Shanghai Lawson, Inc.
Dalian Lawson, Inc.
Lawson (China) Holdings, Inc.
Saha Lawson Co., Ltd.
Shanghai Le Song Trading Co., Ltd.
Shang Hai Gong Hui Trading Co., Ltd.
Zhejiang Lawson, Inc.
Beijing Lawson, Inc.
BEIJING LUOSONG Co., Ltd.
Of the above subsidiaries, Lawson Sanin, Inc. was merged into Lawson, Inc. effective March 1, 2020.
(2) Names of non-consolidated subsidiaries and others
LAWSONWILL, Inc.
(Domestic)
Seikaken, Inc.
Lawson Syuhan, Inc.
TOKYO EUROPE TRADE CO., LTD.
Lawson Travel, Inc.
Lawson Digital Innovation Inc.
(Foreign)
Lawson USA Hawaii, Inc.
Jiangsu Lawson, Inc.
Lawson Philippines, Inc.
LAWSON (TIANJIN) INC.
SLV Retail Company Limited
Shenyang LAWSON Inc.
(Reasons for exclusion from the scope of consolidation)
The above nonconsolidated subsidiaries have been excluded from the scope of consolidation because
they are all small in scale and their total assets, net sales, profit or loss (corresponding to equity interest)
and retained earnings (corresponding to equity interest) and others have no material influence on the
consolidated financial statements.
2. Application of the equity method(1) Equity-method associates: 3(Domestic)
Lawson Okinawa, Inc.
Lawson Minamikyushu, Inc.
Lawson Kochi, Inc.

32

(TRANSLATION ONLY)(2) Non-consolidated subsidiaries and entities excluded from the scope of the equity-method application
Nonconsolidated subsidiaries excluded from the scope of the equity-method application(LAWSONWILL, Inc., Seikaken, Inc., Lawson Syuhan, Inc., TOKYO EUROPE TRADE CO., LTD.,
Lawson Travel, Inc., Lawson Digital Innovation Inc., Lawson USA Hawaii, Inc., Jiangsu Lawson, Inc.,
Lawson Philippines, Inc., LAWSON (TIANJIN) INC., SLV Retail Company Limited and Shenyang
LAWSON Inc.) and entities excluded from the scope of the equity-method application (Double Culture
Partners Co., Ltd., Loyalty Marketing, Inc., Lawson Staff, Inc., TA Platform Corporation, LTF Co., Ltd.,
StageAround TOKYO Production Committee, Jiangyin Hualian Guzhitian Food Co., Ltd., POPLAR
Co.,Ltd., New Designed by Tokyo Ltd. and Lawson Farm Chiba and others) were excluded from the scopeof the equity-method application because their profit or loss (corresponding to equity interest) and retained
earnings (corresponding to equity interest) of these entities are not significant either individually or inaggregate to the consolidated financial statements.
3.

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

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

33

(TRANSLATION ONLY)③ Leased assets:

Leased assets related to finance leases that do not transfer ownership of leased property
The Company applies the straight-line method using the lease term as the useful life and a residual
value of zero.
(3) Accounting standard for significant reserves① Allowance for doubtful accounts:
Allowance for doubtful accounts is provided at the amount of possible losses from uncollectible
receivables based on the actual rate of losses from bad debt for ordinary receivables and on estimatedrecoverability for specific doubtful receivables.
② Provision for bonuses:
Provision for bonuses is provided for payments of employees’ bonuses based on the estimated amounts.
③ Provision for retirement benefits to executive officers and audit and supervisory board members:
Provision for retirement benefits to executive officers of the Company and audit and supervisory board
members of consolidated subsidiaries is recorded under internal regulations.
(4) Accounting method for retirement benefits① Period attributable method of estimated amount of retirement benefits
In calculating retirement benefit obligation, in order to attribute estimated amount of retirement benefits
in the period up to the end of the current fiscal year, it is based on the benefit formula basis.
② Cost treatment method of actuarial difference and prior service cost
Prior service cost is amortized starting the fiscal year incurred mainly on a straight-line basis over acertain period (10 years) within an average remaining service period of employees at the time of theirrecognition.
Actuarial differences are mainly amortized from the following fiscal year on a straight-line basis over acertain period (10 years) within an average remaining service period of employees at the time of theirrecognition.
Certain consolidated subsidiaries apply the simplified method to estimate the amount required forvoluntary resignations at the end of the fiscal year as the retirement benefit liability in order to calculate
net defined benefit liability and retirement benefit expenses.
(5) Significant foreign currency transactions and foreign currency financial statements
All short-term and long-term monetary receivables and payables denominated in foreign currencies aretranslated into Japanese yen at the exchange rates at the consolidated balance sheet date. The foreignexchange gains and losses from translation are recognized in the consolidated statement of income. The
consolidated balance sheet accounts as well as revenue and expense accounts of foreign subsidiaries andaffiliated companies are translated into Japanese yen at the current exchange rate as of the consolidatedbalance sheet date except for shareholders’ equity, which is translated at the historical rate. Differences
arising from such translation are shown as “foreign currency translation adjustments” and “noncontrolling interests,” a separate component of net assets.
(6) Amortization method and period of goodwill
Goodwill is amortized on a straight-line basis over the relevant years, depending on the reason for theoccurrence of goodwill, with a maximum of 20 years.

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

(8) Adoption of consolidated taxation system
The Company and certain consolidated subsidiaries in Japan adopt the consolidated taxation system.
(Changes in Accounting Policies)
The Company’s foreign consolidated subsidiaries have applied International Financial Reporting Standard
16 (IFRS 16) “Leases” from the first quarter of the fiscal year ended February 29, 2020, meaning the Company
recognizes all applicable leases as assets and liabilities on the consolidated balance sheet, in principle.
The impact of the application of IFRS 16 on the Company’s consolidated financial statements is immaterial.
(Changes in Presentation)
The Company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting”(ASBJ Statement No. 28; February 16, 2018) from the beginning of the fiscal year ended February 29, 2020.
Consequently, “Deferred tax assets” are presented under “Investments and other assets” and “Deferred tax
liabilities” are presented under “Non-current liabilities”.

34

(TRANSLATION ONLY)
In the “Non-operating income” section, “Dividend income” which was separately presented in the
consolidated statement of income in prior periods is now included in “Other” from the current fiscal year due
to a decline in financial materiality.
In the “Non-operating income” section, “Penalty income” which was included in “Other” in the consolidated
statement of income in prior periods is now separately presented as “Penalty income” from the current fiscal
year due to an increase in financial materiality.
In the “Non-operating expenses” section, “Loss on disaster” which was separately presented in the
consolidated statement of income in prior periods is now included in “Other” from the current fiscal year due
to a decline in financial materiality.
(Notes to Consolidated Balance Sheet)
1. Accumulated depreciation of property and store equipment:

366,817 million yen

2. Revaluation of land used for businessLand used for business was revalued on the basis prescribed by the Law Concerning Revaluation of Land
(Law No. 34, March 31, 1998). The resulting revaluation difference has been included in net assets as“Revaluation reserve for land.”
Revaluation method: The value of land is determined based on the notified prices adjusted reasonably as
stipulated in Article 2, Item 4 of the Ordinance Implementing the Law Concerning
Revaluation of Land (Government Ordinance No. 119, March 31, 1998) and theassessed value as stipulated in Article 2, Item 5 of the same ordinance.
Date of revaluation: February 28, 2002
The difference between book value and market value of the revalued land as of the consolidated balance
sheet date was 81 million yen.

35

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

StoresImpairment loss
(millions of yen)

Location

AssetsTokyo

Buildings; Tools, furniture and fixtures; and others

2,533

Osaka

"

1,689

Others"13,434

―

Land

116

―

Software

947

―

―

18,722

Other

Total

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

10,774
708
116
6,104
947
70

million yen
"
"
"
"
"

The recoverable amount of the asset groups is the higher of net selling price or value in use. The net selling
price of land was calculated based on the value appraised by a real estate appraiser or contract price, and thevalue in use was calculated by discounting estimated future cash flows mainly using a discount rate of 3.8%.

36

(TRANSLATION ONLY)(Notes to Consolidated Statement of Changes in Equity)
1. Number of outstanding shares and treasury shares
Number of shares
Number of shares
Increase during
Decrease during
at the end of
at the end of thethe period
the periodprevious period
period(thousand shares) (thousand shares)(thousand shares)(thousand shares)
Outstanding shares
100,300

Common stock－－

100,300

Treasury shares
241
0
4
237
Common stock
Notes:
1. The increase in treasury shares of 0 thousand shares resulted from purchases of stock of less than one
share unit.
2. The decrease in treasury shares of 4 thousand shares resulted from the exercise of stock 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 21, 2019)

Commonstock

12,757127.50February 28, 2019

May 22, 2019

Directors’ meeting(October 9, 2019)

Common
stock

7,504

75.00

August 31, 2019

November 8, 2019(2) Dividends for which the record date is in the current period and the effective date is after the
year-end consolidated balance sheet date
Dividend
Dividend
Class of Source ofRecordEffective
Date of resolution
payment
per sharesharesdividenddate
date(millions of yen)
(yen)
General meeting ofCommon RetainedMay
Februaryshareholders
7,504
75.00
stock
earnings
29, 2020
28, 2020(May 27, 2020)
3. Number of stock that can be exercised by outstanding subscription rights to shares (excluding those
not yet in the exercisable period)
57,200 shares

37

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

38

(TRANSLATION ONLY)
2. Matters relating to the fair values of financial instruments
The carrying amount, fair values, and difference as of February 29, 2020, are as follows. (Financial instruments whose fairvalue cannot be reliably determined are not included as described in “(Note 2) Financial instruments whose fair values cannot be
reliably determined.”)(Millions of yen)

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

Carrying
amount47,366

Fair value

Difference

47,366

17,876
159,122(23)
159,098

17,597－(278)

159,098

－

9,495

9,212

(282)

(4) Investment securities
Available-for-sale securities (*2)

47,523(62)(5) Long-term loans receivable
Allowance for doubtful accounts (*1.4)

47,460107,193(415)
106,777
388,075

46,607(852)

108,385
388,2681,607
193

129,397
39,850129,397
39,850－(4) Deposits received

94,848
193,096

94,848
193,096－－(5) Long-term loans payable (*3)

310,000

310,000－(5,250)(6) Guarantee deposits
Allowance for doubtful accounts (*1)
Total assets(1) Accounts payable-trade(2) Short-term loans payable(3) Accounts payable-other－187,311
182,060(6) Lease obligations (*3.4)
Total liabilities
949,252(5,250)954,503(*1) Allowance for doubtful accounts related to accounts receivable-other, long-term loans receivable and guarantee deposits
have been deducted.
(*2) Available-for-sale securities include shares of listed affiliates not accounted for by the equity method, and the difference invalue is based on the market value of such shares.
(*3) Long-term loans payable and lease obligations include liabilities maturing within one year.
(*4) As long-term loans receivable and lease obligations satisfy the offsetting requirements, long-term loans receivable areoffset against lease obligations and the net amount is shown in the consolidated balance sheets. The offset amount is 5,034
million yen.
(Note 1) Method of calculating the fair values of financial instruments Assets(1) Accounts receivable-due from franchised stores and (3) Accounts receivable-other
These instruments are stated at their carrying values, because they are short-term and their carrying values areapproximately the same as their fair values.
(2) Lease receivables
The fair values of lease receivables are calculated by discounting future cash flows using the yield rate of government
bonds for the remaining period.
(4) Investment securities
The fair values of investment securities are stated at the quoted market price on the stock exchange for the equity
instruments.
(5) Long-term loans receivable
The fair values of long-term loans receivable are determined based on the present value, derived by discounting the total
amount of principal and interest at the expected rate of interest to be applied for similar loans.
(6) Guarantee deposits
Guarantee deposits are determined by discounting future cash flows, which reflect the collectability, using the yield rate ofgovernment bonds over the remaining period.
Liabilities(1) Accounts payable-trade, (3) Accounts payable-other and (4) Deposits received
These instruments are stated at their carrying values, because they are short-term and their carrying values are

39

(TRANSLATION ONLY)
approximately the same as their fair values.
(2) Short-term loans payable)
These instruments are stated at their carrying values, because they are determined using floating interest rates that reflectmarket rates in a short-time and their carrying values are approximately the same as their fair values.
(5) Long-term loans payable (including current portion of long-term loans payable)
These instruments are stated at their carrying values, because they are determined using floating interest rates that reflectmarket rates in a short-time and their carrying values are approximately the same as their fair values.
(6) Lease obligations (including current portion of lease obligations)
The fair values of lease obligations are determined by discounting the cash flows related to the obligations at the expected
rate of interest to be applied for similar lease transactions.
(Note 2) Financial instruments whose fair values cannot be reliably determined
Category

Carrying amount (millions of yen)
308

Unlisted equity securities

17,562

Investments in subsidiaries and affiliated companies

1,299
Other
Because financial instruments listed above do not have market prices and their fair values cannot be reliably determined,
they are not included in “(4) Investment securities.”(Notes to Per-Share Data)
1. Net assets per share
2. Profit per share

2,707.08 yen
200.95 yen(Notes to Significant Subsequent Events)
Not applicable.

40

(TRANSLATION ONLY)

Non-consolidated Balance Sheet(Millions of yen)
AssetsLiabilities
As of February
28, 2019(for reference)

As ofFebruary29, 2020

169,053
8,266

199,530
22,21846,03245,997

Lease receivables

26,69825,125Merchandise

1,501

1,276

16,89857,662
12,043(51)
669,207341,088
163,750
30,565
10,087
8,999
125,580

17,29379,0938,534(8)659,239
332,337
157,103
29,06912,182
8,860
123,520

2,106

1,601

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

47,784
31,86815,431
485
280,333
12,861

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

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

63,22467,529

Capital surplus

19,83823,82243,07941,741

714

555

Long-term prepaid expenses
Guarantee deposits
Deferred tax assets

17,415
93,68929,145

15,50793,30731,315

Other

1,197

1,224

Allowance for doubtful accounts

(833)

(630)

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

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

Total assets

838,260

858,770

As of February
28, 2019(for reference)

As ofFebruary28, 2020

Current liabilities
Accounts payable-trade413,869
109,034

392,206
113,119

Short-term loans payable

54,80038,00032,75040,85050,000－34,391
23,1332,752
2,260
96,943
2,950
4,854
184,110－
121,603
11,79436,18528,678
5,860
2,294
115,864
3,142
8,211
232,858
50,000118,104
12,566201

226

27,57822,932597,980

31,537
20,423625,065

237,281
58,506

232,160
58,50647,76147,757

Legal capital surplus

47,696

47,696

Other capital surplus

64

60

132,042

126,908

727

727

50,00050,00081,31576,180(1,028)(1,011)

2,782

1,288

3,349

1,496

(566)
215
240,280
838,260(207)
255
233,705
858,770

Account item

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

41

(TRANSLATION ONLY)

Non-consolidated Statement of Income(Millions of yen)
From March 1, 2018 to
February 28, 2019
(for reference)

Account item

From March 1, 2019 toFebruary 29, 2020

Operating revenue
294,483

Income from franchised stores

305,631

Other operating revenue
Net sales

39,818334,30237,499343,131

Net sales
Gross operating revenue(51,376)

51,376385,678(47,680)

47,680390,811(37,187)

37,187(34,426)

34,426

Cost of sales(14,188)

Gross profit
Operating gross profit(13,254)
348,491

356,385

Selling, general and administrative expenses

302,779

311,660

Operating income
Non-operating income

45,711

44,725Interest income

618

556

Dividend income
Other

8,796
1,821

6,224
2,220

11,236

9,001

Non-operating expenses
Interest expenses

1,984

2,248

Loss on cancellation of leases
Other

1,626
1,084

3,648
1,867

5,505
51,443

Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on liquidation of subsidiaries and associates

7,764
45,962

738
5,756

164

222
3,857
12,981505
5,852
18,310－164

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

303

Other

17,365610

40,572

Income before income taxes
Income taxes – current

12,438

Income taxes – deferred(2,868)42

20,8486,754

9,569
31,002

Profit25,279(1,391)

5,362
15,486

(TRANSLATION ONLY)

Non-consolidated Statement of Changes in Equity(From March 1, 2019 to February 29, 2020)(Millions of yen)

Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings
Retained
Generalearnings
reservebrought
forwardTotal
retainedearnings

TreasurysharesTotalshareholders’equity81,315132,042(1,028)237,281

Dividends of surplus(20,262)(20,262)(20,262)

Profit15,486

15,486

15,486

Balance at the beginning of current
periodCapital
stock

Legal
retainedearnings

Other
capitalsurplusTotal
capitalsurplusLegalretainedearnings

58,506

47,69664

47,761727

50,000Changes of items during period

Purchase of treasury shares(0)

Reversal of revaluation reserve for
land

(358)

Exercise of subscription rights toshares (Delivery of treasury shares)

(3)

(3)

(358)

(0)
(358)

18

14

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

－

－

(3)

(3)

－

－

(5,134)(5,134)17(5,121)58,506

47,69660

47,757727

50,00076,180126,908(1,011)

232,160

43

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

3,349

(566)

2,782

Subscription rights toshares215

Total
net assets
240,280

Dividends of surplus(20,262)

Profit15,486

Purchase of treasury shares(0)

Reversal of revaluation reserve for land
Exercise of subscription rights toshares (Delivery of treasury
shares)Net changes of items other than

(358)
14

shareholders' equity(1,852)358(1,493)39(1,453)

Total changes of items during
period

(1,852)358(1,493)39(6,574)

Balance at end of current period

1,496

(207)

1,288

255

233,705

44

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

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

3. Accounting standard for significant reserves(1) Allowance for doubtful accounts:
Allowance for doubtful accounts is provided at the amount of possible losses from uncollectible
receivables based on the actual rate of losses from bad debt for ordinary receivables and on estimatedrecoverability for specific doubtful receivables.
(2) Provision for bonuses:
Accrued employees’ bonuses are provided for payments of employees’ bonuses based on the estimatedamounts.
(3) Provision for retirement benefits:
Provision for retirement benefits is provided at the amount calculated based on the retirement benefit
liability and pension assets at the consolidated balance sheet date.
① Method of attributing the estimated amount of retirement benefits to periods
In calculating the retirement benefit obligation, the benefit formula method is used to attribute theestimated amount of retirement benefits to periods up to the end of the current fiscal year.
② Accounting treatment for actuarial differences
Actuarial differences are mainly amortized from the following fiscal year on a straight-line basis overa certain period (10 years) within an average remaining service period of employees at the time ofrecognition.
Treatment of unrecognized actuarial differences in the non-consolidated balance sheet differs fromthe consolidated balance sheet.

45

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

4.

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

5.

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

(Changes in Presentation)
1. The Company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting”(ASBJ Statement No. 28; February 16, 2018) from the beginning of the fiscal year ended February 29,
2020. Consequently, “Deferred tax assets” are presented under “Investments and other assets” and“Deferred tax liabilities” are presented under “Non-current liabilities”.

2. In the “Non-operating expenses” section, “Loss on disaster ”, which was presented separately in the nonconsolidated statement of income in prior periods, is now included in “Other” from the current fiscal year
due to a decline in financial materiality.
(Notes to the Non-consolidated Balance Sheet)
1. Accumulated depreciation of property and store equipment:
2.

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

305,834 million yen

35,366
49
7,025
338

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 theassessed value as stipulated in Article 2, Item 5 of the same Ordinance.
Date of revaluation: February 28, 2002
The difference between book value and market value of the revalued land as of the non-consolidatedbalance sheet date was 81 million yen.

4.

Guarantee obligations
The Company guarantees the accounts payable-trade and deposit liabilities of the following
subsidiaries
Lawson Bank, Inc.
130,000 million yen"
SCI, Inc.
554"
Lawson Entertainment, Inc.
332

(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

46

45,726427
48,105
6,666

million yen"""

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

237,762 shares(Notes to Accounting for Income Taxes)
Components of deferred tax assets and liabilities
Enterprise taxes payable
Accrued employees’ bonuses
Loss on write-down of investments in affiliated companies
Excess of depreciation
Excess of amortization of software
Provision for retirement benefits
Allowance for doubtful accounts
Impairment loss
Other
Subtotal of deferred tax assets
Less valuation allowances
Total deferred tax assets

508 million yen
962
"
8,371
"
8,134
"
600
"
"
5,556
"
195
"
11,768"
4,662
40,759 million yen(9,444)"31,315 million yen
31,315 million yen

Deferred tax assets-net

47

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

Parent Company

EquityBusiness line
ownershipCompany nameor profession
percentage

Mitsubishi
Corporation

GeneralTradingCompany

Directholding
50.2%

RelationshipTransaction
EndingDescription
amountbalance
Directors’ofAccount item
Business(millionsposts held transactions (millions ofrelationshipyen)of yen)concurrently
Receipt of
debt
Transactions
－
－
3,000
guarantees
under abusiness
Payment
Nocollaborationof0－
agreement－
guarantee
feesTransaction conditions and the policies for determining those conditions:
1. The Company is provided with debt guarantees for loans payable from Mitsubishi Corporation Financial &Management Services(Japan)Ltd. by Mitsubishi Corporation. Guarantee fee rates are determined rationally,taking into account market interest rates.
Subsidiaries and affiliates
Attribute

EquityBusiness line
Company nameownershipor profession
percentage

SCI, Inc.

Domestic
Convenience
Store BusinessDirectholding100.0%

LawsonEntertainmentEntertainment,
RelatedInc.
Business

Directholding100.0%

Sale oftickets andsoftware formusic andvideo

SEIJO ISHII
CO., LTD.

Seijo Ishii
Business

Directholding100.0%

Purchase ofgoods
Supervisionofmanagement

Lawson Bank,Inc.

Financial
Services
Business

Directholding
95.0%

Bankingbusiness

Directholding
49.0%Managementof LAWSON
THREE F
stores

Subsidiary

Affiliate

RelationshipTransaction
EndingDescription
amountbalance
Directors’ofAccount item
Business(millionsposts held transactions (millions ofrelationshipyen)of yen)concurrently
Repayment
44,700of funds
Short-term
10,200Borrowingloans payable
SCM
46,800Yes
Accruedof funds
0
interest
Borrowing0
interest

Domestic
LTF Co., Ltd. Convenience
Store Business

Yes

Repaymentof funds
Borrowingof funds
Borrowinginterest

16,500

Short-termloans payable
12,500Accruedinterest
1

Borrowingof funds
Borrowinginterest

10,900130,000

Yes

Guarantee
obligations
Receipt ofguarantee
fees

Yes

Receipt oflease fees

Yes

Short-termloans payable
Accrued0interest

13

1,184

1

10,9000－－Accounts
receivableother

3

Lease
receivables

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.

48

17,5008,658

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

Subsidiaryof the parent
company

RelationshipTransaction
EndingEquityDescription
Company Business line
amountAccount balance
Directors’
ownership Businessof
nameor profession(millions of
item(millionspercentage relationship posts heldtransactions
yen)of yen)concurrently
PurchasesforcompanyAccounts
16,602operated
61,835payable(756,763)
storestrade(purchases
Mitsubishi
Sales offor
Shokuhin processed
VendorNo－
franchisedCo., Ltd.
foods
stores)Accounts
Shipping
payable5,051
57,539costs
otherReceipt of
Accounts
shipping
57,866
4,618
receivablecosts
otherMitsubishi

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

Recipient ofloansn)Ltd.

No

Repaymentof funds
Borrowingof funds
Borrowinginterest

68,68061,880
1

Short-termloanspayableAccruedinterest

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

49

3,000
0

(TRANSLATION ONLY)(Notes to Per-Share Data)
1. Net assets per share
2. Profit per share

2,333.04 yen
154.76 yen(Notes to Significant Subsequent Events)
Not applicable.

50

(TRANSLATION ONLY)INDEPENDENT AUDITOR'S REPORT
April 6, 2020
To the Board of Directors of
Lawson, Inc.:
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:Kazuaki Furuuchi

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

Pursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited the consolidated
financial statements, namely, the consolidated balance sheet as of February 29, 2020 of Lawson, Inc. (the"Company") and its consolidated subsidiaries, and the related consolidated statements of income and changes
in equity for the fiscal year from March 1, 2019 to February 29, 2020, and the related notes.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial statementsthat are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on the auditor's judgment, including
the assessment of the risks of material misstatement of the consolidated financial statements, whether due tofraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the consolidated financial statements in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.

Audit Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Lawson, Inc. and its consolidated subsidiaries as of February 29, 2020, andthe results of their operations for the year then ended in accordance with accounting principles generally
accepted in Japan.
51

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

52

(TRANSLATION ONLY)INDEPENDENT AUDITOR'S REPORT
April 6, 2020
To the Board of Directors of
Lawson, Inc.:
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:Kazuaki Furuuchi
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Masumi Nakagawa

Pursuant to the first item, second paragraph of Article 436 of the Companies Act, we have audited thefinancial statements, namely, the balance sheet as of February 29, 2020 of Lawson, Inc. (the "Company"),
and the related statements of income and changes in equity for the 45th fiscal year from March 1, 2019 toFebruary 29, 2020, and the related notes and the accompanying supplemental schedules.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements and theaccompanying supplemental schedules in accordance with accounting principles generally accepted in Japan,
and for such internal control as management determines is necessary to enable the preparation of financial
statements and the accompanying supplemental schedules that are free from material misstatement, whether
due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements and the accompanying
supplemental schedules based on our audit. We conducted our audit in accordance with auditing standards
generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements and the accompanying supplemental schedules are freefrom material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements and the accompanying supplemental schedules. The procedures selected depend on
the auditor's judgment, including the assessment of the risks of material misstatement of the financial
statements and the accompanying supplemental schedules, whether due to fraud or error. In making thoserisk assessments, the auditor considers internal control relevant to the entity's preparation and fairpresentation of the financial statements and the accompanying supplemental schedules in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements and the accompanying supplemental schedules.

53

(TRANSLATION ONLY)
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Audit Opinion
In our opinion, the financial statements and the accompanying supplemental schedules referred to above
present fairly, in all material respects, the financial position of Lawson, Inc. as of February 29, 2020, and theresults of its operations for the year then ended in accordance with accounting principles generally accepted inJapan.
Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure isrequired under the provisions of the Certified Public Accountants Act.
The above represents a translation, for convenience only, of the original report issued in the Japanese languageand "the accompanying supplemental schedules" referred to in this report are not included in the attachedfinancial documents.

54

(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 45th business term from March 1,
2019 to February 29, 2020, we have prepared this Audit Report, through due deliberations based on theaudit reports prepared by each Audit & Supervisory Board Member, and hereby report as follows:
１．Auditing Methods Employed by the Audit & Supervisory Board Members and Audit & Supervisory
Board and Contents of Such Methods(1) We have established audit policies and audit plans for the current term, and received the reports fromeach Audit & Supervisory Board Member regarding their execution of audits and results thereof, as
well as reports from the Directors, other relevant personnel, and the Accounting Auditor regarding
the execution of their duties, and asked for explanations as necessary.
(2) Each Audit & Supervisory Board Member, pursuant to the auditing standards of Audit & Supervisory
Board Members established by the Audit & Supervisory Board , has followed the audit policies andaudit plans for the current term, communicated with the Directors, officers, internal audit department
and other relevant employees, endeavored to collect information and develop the audit environment,
and performed the audit using the following methods:(i) We have attended the Board of Directors meetings, the management meetings, Compliance &Risk management committee meetings, Internal Control over Financial Reporting committee
meetings and the like, and other important meetings, received reports from the Directors,
officers, internal audit department and other relevant employees regarding the execution of
their duties, asked for explanations whenever necessary, reviewed important approval
documents and the like, and investigated the status of operations and assets at the head office,area office, and other principal offices and stores. With respect to subsidiaries, we havecommunicated and exchanged information with the Directors, Audit & Supervisory Board
Members and other relevant personnel of subsidiaries, requested the subsidiaries to report on
their business where necessary, and investigated their status of operations and assets.
(ii) Pursuant to the audit items and audit methods regarding internal control system established by
the Audit & Supervisory Board , we have monitored and verified the resolution of the Boardof Directors regarding the development of the system as prescribed by item (vi) of paragraph
4, Article 362 of the Companies Act and paragraph 1 and paragraph 3, Article 100 of theOrdinance for Enforcement of the Companies Act and the status of the development andoperation of the system based on such resolution (Internal Control System), as the system
necessary to ensure that the execution of the duties by the Directors, described in business
report, complies with laws and regulations and the Articles of Incorporation and other system
necessary to ensure the properness of operations of a Stock Company and corporate groupconsisting of its subsidiaries. In connection with internal control over financial reporting, we
received reports from the Directors and other relevant personnel, and Deloitte Touche
Tohmatsu LLC regarding the status of evaluation and audit of such internal control
respectively, and asked for explanations whenever necessary.
(iii) Regarding the transaction with the parent company described in the business report, we havecarefully examined the matter noted in item (v)-(a) of Article 118 of the Ordinance for
Enforcement of the Companies Act and the judgment and its reasons in item (v)-(b) based on
the status of deliberations of the Board of Directors and others.
55

(TRANSLATION ONLY)(iv) We have monitored and verified whether Accounting Auditor maintained its independence
and properly conducted its audit, and we received reports from Accounting Auditor regarding
the status of the execution of its duties and, whenever necessary, asked for explanations. In
addition, we have received the notice from the Accounting Auditor that “System for ensuring
proper execution of duties” (matters set forth in each item of Article 131 of the Company
Accounting Regulations) is organized in accordance with the “Quality Control Standards for
Audits” (Business Accounting Council, October 28, 2005) and the like, and, when necessary,
asked for explanations.

Based on the above methods, we have examined the “business report and the supplementary schedules
thereof,” the “consolidated financial statements (consolidated balance sheet, consolidated statement ofincome, consolidated statements of changes in net assets, and notes to consolidated financial statements)”
and “financial statements (balance sheet, statement of income, statements of changes in net assets, and notes
to financial statements) and supplementary schedules thereof” for this term.
1. Result of Audit(1) Result of Audit of Business Report and Other Relevant Documents(i) We have found that business report and the supplementary schedules thereof fairly present
the status of our company, in conformity with the applicable laws and regulations and the
Articles of Incorporation.
(ii) Regarding the execution of duties by the Directors, we have found no misconduct 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 to give
remarks in regard to the relevant description in the business report and execution of duties
by the Directors concerning Internal Control System.
(iv) Regarding the transaction with the parent company described in the business report, we havefound no matters on which to give remarks in regard to the particulars being given due
consideration so as not to harm the interests of our company in carrying out the transaction
and the judgment of the Board of Directors and its reasons related to whether or not thetransaction would harm the interests of our company.
(2) Result of Audit of Consolidated Financial Statements
We have found that methods and the result of the audit by the Accounting Auditor, Deloitte Touche
Tohmatsu LLC, are adequate.
(3) Result of Audit of Financial Statements and Supplementary Schedules thereof.
We have found that methods and the result of the audit by the Accounting Auditor, Deloitte Touche
Tohmatsu LLC, are adequate.
April 6, 2020
The Audit & Supervisory Board of Lawson, Inc.
Outside Audit & Supervisory Board Member Toshio Takahashi(full-time)
Audit & Supervisory Board Member
Masakatsu Gonai(full-time)
Outside Audit & Supervisory Board Member Eiko Tsujiyama
Outside Audit & Supervisory Board Member Yuko Gomi
56

(TRANSLATION ONLY)REFERENCE DOCUMENT FOR THE GENERAL MEETING OF SHAREHOLDERS
Proposals and References
Proposal No. 1: Appropriation of Surplus
The Company regards the ROE (consolidated return on equity) as a significant management indicator and has been
conducting business activities. In addition, the Company’s policy for dividend payment is to set the target for
consolidated dividend payment ratio at 50%, with the stable minimum annual amount of ¥150 per share, while
securing internal reserves necessary for future business development during the course of sustainable growth of theLawson Group.
We intend to maintain year-end dividends for the current fiscal term at ¥75 per share, the same amount as in theprevious term. Accordingly, full-year dividends, including interim dividends of ¥75 per share, will be ¥150 per share.
We intend to continue to place emphasis on the distribution of profit to shareholders into the future.
We will endeavor to raise the Company’s corporate value by appropriating internal reserves for necessary business
investments such as opening new stores, renovating existing stores and new business development.
Year-end dividends:(1) The assignment of the dividend property to shareholders and total amount thereof:¥75 per share of the Company’s common stock to a total of ¥7,504,667,850(2) Effective date of the dividends from surplus:
Thursday, May 28, 2020

57

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

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

Year-end dividend per share (Yen)40th Term

41st Term

42nd Term

43rd Term

44th Term

45th Term(Year ended
Feb. 2015)(Year ended
Feb. 2016)(Year ended
Feb. 2017)(Year ended
Feb. 2018)(Year ended
Feb. 2019)(Year ended
Feb. 2020)

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

40th Term

41st Term

42nd Term

43rd Term

44th Term

45th Term(Current Period)¥120¥122.50¥125¥127.50¥127.50¥75¥120¥122.50¥125¥127.50¥127.50(Plan) ¥75

¥240

¥245

¥250

¥255

¥255

(Plan) ¥150

¥327.08¥313.81¥363.96¥268.16¥255.71¥200.95

73.4%

78.1%

68.7%

95.1%

99.7%

(Plan) 74.6%

13.0%

12.0%

13.5%

9.7%

9.3%

7.3%

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

58

(TRANSLATION ONLY)
Proposal No. 2: Partial Amendment to the Articles of Incorporation
1. Reasons for proposal
The number of Audit and Supervisory Board Members will be increased from the current four (4) to five (5) in orderto strengthen and enhance the audit system in light of changes in economic and social conditions and expansion of thescope of audits due to the Group’s growth.
2. Particulars of amendment
The particulars of the proposed amendment are described below.
(Suggested amendments are underlined in the text.)
Current Provision of the Articles of Incorporation

Proposed Amendment(Number of Audit and Supervisory Board Members)
Article 25: The Company shall have four (4) or less Audit
and Supervisory Board Members.

(Number of Audit and Supervisory Board Members)
Article 25: The Company shall have five (5) or less Audit
and Supervisory Board Members.

59

(TRANSLATION ONLY)
Proposal No. 3: Election of Eight (8) Directors
The terms of office of all eight (8) Directors expire at the conclusion of this 45th Ordinary General Meeting of
Shareholders. Accordingly, we propose that you elect eight (8) Directors including one (1) new candidate.
If this proposal is approved and passed, there will be eight (8) Directors of the Company after the meeting ofshareholders, of which three (3) will be Outside Directors. All of the Outside Directors are “Independent
Directors/Audit and Supervisory Board Members.”
The candidates for directors are as stated in the following table. Please refer to pages 61 to 68 for the brief personal
histories of the indicated candidates.
Furthermore, please refer to page 72 for the policy and procedures of the Company’s Board of Directors fornominating candidates for Directors.

No.

Name

Position at the Company, etc.

1

Sadanobu Takemasu

2Katsuyuki Imada

3

Satoshi Nakaniwa

4

Yutaka Kyoya

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

5

Keiko Hayashi

Member of the Board

6

Kazunori Nishio

Member of the Board

7

Miki Iwamura

Member of the Board

8

Satoko Suzuki–

Notes:
1. Ms. Keiko Hayashi’s legal name is Keiko Hama.
2. Ms. Miki Iwamura’s legal name is Miki Oku.
3. Positions at the Company, etc. are as of April 9, 2020.

60

Board ofDirectors’
meeting
attendance
rate

Reappointment

100%

Reappointment

100%

Reappointment

100%

Reappointment
Reappointment, outside,
independent
Reappointment
Reappointment, outside,
independent
New appointment,
outside, independent

100%
100%
100%
92.3%
–

(TRANSLATION ONLY)
No.
1

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

Joined Mitsubishi Corporation

June 2010

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

May 2014

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

March 2016

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

June 2016

President and COO, Representative Director, Lawson, Inc.

March 2017

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

September 2017

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

February 2019

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

March 2019

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

March 2020

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

Sadanobu Takemasu(August 12, 1969)
Reappointment■Number of the Company’s
shares held:
5,000■Attendance at Board of
Directors’ meetings
13 out of 13 (100%)■Years in office

6 years (as of theconclusion of themeeting ofshareholders)

Reasons for nomination as Director
Mr. Sadanobu Takemasu has been nominated as a candidate for Director of theCompany as he has led the entire Group centered on the domestic convenience store
business, as well as contributed to the improvement of corporate value as President
and CEO, Representative Director, Chairman of the Board 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.

61

(TRANSLATION ONLY)No.
2

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

Joined Mitsubishi Corporation

March 2002

General Manager of Corporate Planning Office, Lawson,
Inc.

March 2004

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

March 2007

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

May 2008

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

October 2012

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

Reappointment

September 2013

■Number of the Company’s
shares held:
1,900

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

September 2016

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

March 2017

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

May 2017

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

April 2018

Senior Vice President, Mitsubishi Corporation

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

3 years (as of theconclusion of the meetingof shareholders)

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

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

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(TRANSLATION ONLY)No.
3

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

Joined Mitsubishi Corporation

March 1994

Investment and Credit Department, Mitsubishi Corporation

May 1999

Living Essentials Group Administration Department,
Mitsubishi Corporation

April 2005

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

December 2008

General Manager, Mitsubishi International Corporation

September 2013

Team Leader, Chemicals Group Administration Department,
Mitsubishi Corporation

October 2015

Deputy General Manager, Chemicals Group Administration
Department, Mitsubishi Corporation

February 2017
■Number of the Company’s
shares held:
600

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

March 2017

Executive Vice President and CFO, Lawson, Inc.

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

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

March 2018

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

March 2019

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

March 2020

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

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

3 years (as of theconclusion of the meetingof shareholders)

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

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

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(TRANSLATION ONLY)
No.
4

Brief Personal History, Position, Assignment and Important
Concurrent Positions

Yutaka Kyoya

April 1984

Joined Mitsubishi Corporation

April 2008

General Manager, Grain Unit, Foods (Commodity) Div.,
Mitsubishi Corporation

April 2013

Division COO, Foods (Commodity) Div., Mitsubishi
Corporation

May 2013

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

April 2014

Senior Vice President, Division COO, Living Essential
Resources Division, Mitsubishi Corporation

November 2015

Member of the Board, Olam International Limited (Current
position)

April 2016

Executive Vice President, Group CEO, Living Essentials
Group, Mitsubishi Corporation

June 2016

Member of the Board, Mitsubishi Shokuhin Co., Ltd.

April 2019

Executive Vice President, Group CEO, Consumer Industry
Group, Mitsubishi Corporation (Current position)(January 7, 1962)
Reappointment■Number of the Company’s
shares held:

100■Attendance at Board of
Directors’ meetings

Reasons for nomination as Director

13 out of 13 (100%)■Years in office

7 years (as of theconclusion of the meetingof shareholders)Mr. Yutaka Kyoya has been nominated as a candidate for Director, as he has awealth of knowledge on the consumer industry field, mainly in retail and food,
through his duties at Mitsubishi Corporation, the parent company of Lawson, Inc.
We have been receiving his proactive opinions and suggestions regarding theCompany’s management at Board of Directors’ meetings, and we would like tocontinue to benefit from his supervision of the Company’s management byleveraging his experience.
Mr. Kyoya serves as a member of the Company’s Nomination and Compensation
Advisory Committee, which consists exclusively of non-executive directors andoutside Audit and Supervisory Board members (part-time).

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

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(TRANSLATION ONLY)
No.
5

Brief Personal History, Position, Assignment and Important
Concurrent Positions

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

1,900■Attendance at Board of
Directors’ meetings

June 1983

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

November 1992

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

August 1993

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

August 1995

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

February 1998

Country Manager, VICTORIA’S SECRET Catalog,
LIMITED Group

October 1998

Merchandising Director, Disney Store Japan

December 1999

President and Representative Director, Lands’ End Japan
KK

June 2006

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

September 2007

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

February 2011

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

March 2011

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

December 2011

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

May 2016

Outside Director, Lawson, Inc. (Current position)

13 out of 13 (100%)■Years in office

4 years (as of theconclusion of the meetingof shareholders)

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

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

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(TRANSLATION ONLY)No.
6

Brief Personal History, Position, Assignment and Important
Concurrent Positions
April 1984

Joined Mitsubishi Corporation

July 2010

Seconded to CGC Japan Co., Ltd.

May 2011

Senior Managing Director, CGC Japan Co., Ltd.

October 2013

Acting General Manager, Living Essentials Group CEO
Office, Mitsubishi Corporation

April 2014

Division COO, Retail Div., Mitsubishi Corporation

April 2016

Senior Vice President, Division COO, Retail Div.,
Mitsubishi Corporation (Current position)

May 2016

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

Kazunori Nishio(July 13, 1961)
Reappointment

Reasons for nomination as Director■Number of the Company’s
shares held:

100■Attendance at Board of
Directors’ meetings

13 out of 13 (100%)

Mr. Kazunori Nishio has been nominated as a candidate for Director, as he has awealth of knowledge on the consumer industry field, mainly in retail, through his
duties at Mitsubishi Corporation, the parent company of Lawson, Inc., as well as at
a retailer to which he has been seconded. We have been receiving his proactive
opinions and suggestions regarding the Company’s management at Board of
Directors’ meetings, and we would like to continue to benefit from his supervisionof the Company’s management by leveraging his experience.

■Years in office

4 years (as of theconclusion of the meetingof shareholders)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.
7

Brief Personal History, Position, Assignment and Important
Concurrent Positions

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

300■Attendance at Board of
Directors’ meetings

12 out of 13 (92.3%)■Years in office

2 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)

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

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

67

(TRANSLATION ONLY)No.
8Brief Personal History, Position, Assignment and Important
Concurrent Positions

Satoko Suzuki

April 1999

Joined Nihon L’Oreal KK

September 2006

Joined Boston Consulting Group K.K.

September 2011

Lecturer, Graduate School of Management, Kyoto
University

April 2016

Associate Professor, Graduate School of Management,
Kyoto University

April 2017

Associate Professor, School of International Corporate
Strategy, Hitotsubashi University Business School (Current
position)(November17, 1977)
New appointment, outside,
independent■Number of the Company’s
shares held:—

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

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

Notes:
1. In accordance with Article 24 of the current Articles of Incorporation, Lawson, Inc. has concluded the following
liability limitation agreements with Mr. Yutaka Kyoya, Ms. Keiko Hayashi, Mr. Kazunori Nishio, and Ms. Miki
Iwamura. Under the liability limitation agreement concluded with the Company, Directors (excluding those whoare executive directors, etc.) assume liability for damages specified in Article 423, Paragraph 1 of the Companies
Act within the limit not exceeding the amount stipulated by laws and regulations, provided that they have
performed duties which resulted in a cause of such liability in good faith without gross negligence. The Company
plans to conclude the same contract with Ms. Satoko Suzuki.
2. The nominees’ Brief Personal History, Position, Assignment and Important Concurrent Positions are current as of April
9, 2020.

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(TRANSLATION ONLY)
Proposal No. 4: Election of Two (2) Audit and Supervisory Board Members
The term of office of Toshio Takahashi, Audit and Supervisory Board Member, expires at the conclusion of this 45th
Ordinary General Meeting of Shareholders. Accordingly, in order to strengthen and enhance the audit system, we
propose that you elect two (2) Audit and Supervisory Board Members, provided that the number of Audit andSupervisory Board Members will be increased by one (1) upon the approval of Proposal No. 2: Partial Amendment to
the Articles of Incorporation.
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 72 for the policy and procedures of the Company’s Board of Directors fornominating candidates for Audit and Supervisory Board Members.
No.
1

Brief Personal History, Position and Important Concurrent
Positions
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.

New appointment

March 2015

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

■Number of the Company’s
shares held:

March 2017

Executive Managing Officer ―Compliance and Risk
Management, and Human Resources, Lawson, Inc. (Current
position)

Shuichi Imagawa(September 4, 1958)

3,394

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 is expected to sufficiently fulfill the role ofan 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.

69

(TRANSLATION ONLY)No.
2

Brief Personal History, Position and Important Concurrent
Positions

Keiko Yoshida(January 26, 1954)

November 1978

Joined Showa Audit Corporation (currently Ernst & Young
ShinNihon LLC)

April 1982

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

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

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 is expected to sufficiently fulfill the roles of an Audit and Supervisory
Board Member.
She has been registered as an Independent Director/Audit and Supervisory Board
Member with the Tokyo Stock Exchange, Inc., pursuant to the rules specified by theexchange.

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 32 of the current Articles of Incorporation, Lawson, Inc. plans to conclude the following
liability limitation agreement 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 in good faith and without gross negligence.
2. The nominees’ Brief Personal Histories, Position and Important Concurrent Positions are current as of April 9,
2020.

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(TRANSLATION ONLY)
Proposal No. 5: Revision of the Amount of Remuneration Paid to Audit and Supervisory Board Members
The amount of remuneration of the Company’s Audit and Supervisory Board Members was approved at the 37th
Ordinary General Meeting of Shareholders held on May 29, 2012, for an annual amount of up to 80 million yen.
However, considering various factors, including subsequent changes in economic and social conditions and the
expansion of the scope of audits due to the Group’s growth, we will strengthen and enhance the audit system. In lightof various circumstances including an increase in the number of Audit and Supervisory Board Members by one (1)upon the approval of Proposal No. 4, we would like to revise the amount of remuneration of Audit and Supervisory
Board Members to an annual amount of up to 100 million yen.
While the current number of Audit and Supervisory Board Members is four (4), the number of Audit andSupervisory Board Members at the conclusion of this 45th Ordinary General Meeting of Shareholders will be five (5)upon the approval of Proposal No. 4 (Election of Two (2) Audit and Supervisory Board Members).

71

(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 six members of the committee are non-executive directors or Audit and Supervisory Board members(part-time), with five being Independent Directors/Audit and Supervisory Board Members. The committee is designed
to recommend candidates for directors, candidates for representative directors, and posts to the Board of Directors witha high level of independence. In the event that a director or representative director engages in an act that significantly
damages corporate value or ceases to satisfy the Director/Audit and Supervisory Board Member Election Standard after
assuming his/her post, a dismissal or other treatment will be considered after consultation with the Committee.
As for candidates for Audit and Supervisory Board members, those with knowledge and expertise in finance,accounting, risk management and law, which are necessary for auditing operations, are nominated as candidates for
Audit and Supervisory Board members upon obtaining the consent of the Audit and Supervisory Board.

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

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

72