ライフコーポレーション（8194） – Notice of Convocation Annual General Meeting 2022

Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. To our shareholders: (Securities Code: 8194) May 10, 2022 Takaharu Iwasaki Representative Director and President LIFE CORPORATION 3-6-2 Nihonbashi-Honcho, Chuo-ku, Tokyo Notice of the 67th Annual General Meeting of Shareholders We are pleased to announce the 67th Annual General Meeting of Shareholders of LIFE CORPORATION (the “Company”) to be held as indicated below. If you will not be attending the meeting in person, you may exercise your voting rights in writing (postal mail) or via the internet. Please review the attached Reference Documents for the General Meeting of Shareholders, follow the “Guide to Exercising Voting Rights” (in Japanese only), and exercise your voting rights by 6:00 p.m. on Wednesday, May 25, 2022 (JST). 1. Date and Time: Thursday, May 26, 2022, at 10:00 a.m. (JST) 2. Venue: Large conference room, 1st floor of the Osaka Headquarters of the Company 2-2-22, Nishimiyahara, Yodogawa-ku, Osaka 3. Purpose of the Meeting Matters to be reported: 1. The Business Report and the Consolidated Financial Statements for the 67th fiscal year (from March 1, 2021 to February 28, 2022), and the audit results of the Consolidated Financial Statements by the Accounting Auditor and the Board of Corporate Auditors 2. The Non-consolidated Financial Statements for the 67th fiscal year (from March 1, 2021 to February 28, 2022) Matters to be resolved: Proposal No. 1 Appropriation of Surplus Proposal No. 2 Amendment to the Articles of Incorporation Proposal No. 3 Election of Nine (9) Directors – When you attend the meeting, please present the enclosed voting form at the reception. – Among the documents to be provided with this notice, “Matters Related to Establishing System for Ensuring the Propriety of Business Activities” in the Business Report, “Notes to the Consolidated Financial Statements” in the Consolidated Financial Statements and “Notes to the Non-consolidated Financial Statements” in the Non-consolidated Financial Statements are posted on the Company’s website (http://www.lifecorp.jp/) pursuant to laws and regulations, as well as Article 15 of the Company’s Articles of Incorporation, and are not included in the documents attached to this notice. Accordingly, the attached documents to this notice constitute a part of the documents that were audited by the Corporate Auditors and the Accounting Auditors in preparing the audit results. – Any corrections to the Reference Documents for the General Meeting of Shareholders, the Business Report, the Non-consolidated Financial Statements or Consolidated Financial Statements will be posted on the Company’s website (http://www.lifecorp.jp/). – 1 – [Important Notices] COVID-19 Measures for the General Meeting of Shareholders – For those attending the General Meeting of Shareholders in person, please confirm the status of COVID-19 infection trends and your own health on the day of the meeting, wear a mask, and take efforts to prevent infection. – Please fully utilize the option of exercising voting rights at this General Meeting of Shareholders in writing (postal mail) or via the internet. – We may take measures to prevent the spread of infectious diseases at the venue for the General Meeting of Shareholders. Please cooperate with such measures. We ask for the understanding and cooperation of all shareholders under the given circumstances. – 2 – Reference Documents for the General Meeting of Shareholders Proposal No. 1 Appropriation of Surplus The Company regards the return of profit to its shareholders as one of the management policies of utmost importance and maintains a basic policy to continuously carry out stable payment of dividends. The Company has given comprehensive consideration to matters including the above basic policy, strengthening of our management structure and future business development. The Company also wishes to commemorate the 60th anniversary of opening its first supermarket and express gratitude for the daily support of all shareholders. Therefore, the Company proposes the payment of the year-end dividend and other appropriation of surplus for the 67th fiscal year as set forth below. 1. Year-end dividends (1) Type of dividend property To be paid in cash. (2) Allotment of dividend property and their aggregate amount In addition to ¥30 per common share in regular dividends, the Company proposes to add ¥10 per share as a commemorative dividend for a total of ¥40 per share. In this event, the total dividends will be ¥1,878,303,920. Accordingly, including the interim dividend (¥30 per share), the annual dividend will be ¥70 per share. (3) Effective date of dividends of surplus The effective date of dividends will be May 27, 2022. (Reference) Trends in dividends per share and dividend payout ratio 63rd Fiscal Year ended February 2018 64th Fiscal Year ended February 2019 65th Fiscal Year ended February 2020 66th Fiscal Year ended February 2021 67th Fiscal Year ended February 2022 Interim dividend (¥) 15.00 15.00 20.00 25.00 30.00 Year-end dividend (¥) 15.00 15.00 20.00 25.00 40.00 (Includes commemorative dividend of ¥10) 21.4 19.0 23.9 13.1 21.6 Consolidated dividend payout ratio (%) 2. Other appropriation of surplus (1) Item of surplus to be increased and amount of increase General reserve: ¥10,700,000,000 (2) Item of surplus to be decreased and amount of decrease Retained earnings brought forward: ¥10,700,000,000 – 3 – Proposal No. 2 Amendment to the Articles of Incorporation 1. Reasons for the amendment Since the revised provisions provided for in the proviso to Article 1 of the Supplementary Provisions of the Act Partially Amending the Companies Act (Act No. 70 of 2019) are to be enforced on September 1, 2022, the Company proposes to make the following changes to its Articles of Incorporation in preparation for the introduction of the system for providing informational materials for the general meeting of shareholders in electronic format. (1) Article 15, paragraph 1 in “Proposed Amendments” below will stipulate that the Company shall take measures for providing information that constitutes the content of reference documents for the general meeting of shareholders, etc. in electronic format. (2) Article 15, paragraph 2 in “Proposed Amendments” below will establish the provision to limit the scope of the items to be stated in the paper-based documents to be delivered to shareholders who requested the delivery of paper-based documents. (3) Since the provisions for Internet Disclosure and Deemed Provision of Reference Documents for the General Meeting of Shareholders, Etc. (Article 15 of the current Articles of Incorporation) will no longer be required, they will be deleted. (4) Accompanying the aforementioned establishment and deletion of provisions, supplementary provisions regarding the effective date, etc. will be established. 2. Amendments Details of amendments are as follows. Current Articles of Incorporation Proposed Amendments Articles 1. through 14. (Text omitted) Articles 1. through 14. (Unchanged) Article 15. (Internet Disclosure and Deemed Provision of (Deleted) (Changed portion is underlined) Reference Documents for the General Meeting of Shareholders, Etc.) When the Company convenes a general meeting of shareholders, if it discloses information that is to be stated or presented in the reference documents for the general meeting of shareholders, business report, financial statements and consolidated financial statements through the internet in accordance with the provisions prescribed by the Ministry of Justice Order, it may be deemed that the Company has provided this information to shareholders. (Newly established) Article 15. (Measures, etc. for Providing Information in Electronic Format) 1. When the Company convenes a general meeting of shareholders, it shall take measures for providing information that constitutes the content of reference documents for the general meeting of shareholders, etc. in electronic format. 2. Among items for which the measures for providing information in electronic format will be taken, the Company may exclude all or some of those items designated by the Ministry of Justice Order from statements in the paper-based documents to be delivered to shareholders who requested the delivery of paper-based documents by the record date of voting rights. – 4 – Articles 16. through 37. (Text omitted) Articles 16. through 37. (Unchanged) Current Articles of Incorporation (Newly established) Proposed Amendments (Supplementary provisions) (Transitional Measures for Providing Informational Materials for the General Meeting of Shareholders in Electronic Format) 1. The amendment to the Articles of Incorporation pertaining to Article 15 shall be effective from September 1, 2022, which is the date of enforcement of the revised provisions provided for in the proviso to Article 1 of the Supplementary Provisions of the Act Partially Amending the Companies Act (Act No. 70 of 2019) (hereinafter referred to as the “Date of Enforcement”). 2. Notwithstanding the provisions of the preceding paragraph, Article 15 of the Articles of Incorporation (Internet Disclosure and Deemed Provision of Reference Documents for the General Meeting of Shareholders, Etc.) shall remain effective regarding any general meeting of shareholders held on a date within six months from the Date of Enforcement. 3. These Supplementary Provisions shall be deleted on the date when six months have elapsed from the Date of Enforcement or three months have elapsed from the date of the general meeting of shareholders in the preceding paragraph, whichever is later. – 5 – 1 2 3 4 5 6 7 8 9 Proposal No. 3 Election of Nine (9) Directors At the conclusion of this meeting, the terms of office of all ten (10) Directors will expire. Therefore, the Company proposes to elect nine (9) Directors. The details of this proposal were deliberated at the “Nomination & Remuneration Advisory Committee,” which is a consultative body to the Board of Directors with an independent outside Director as the chair. The results of the deliberation were reported to the Board of Directors, where the proposal was approved. The candidates for Directors are as follows: Candidate No. Name Gender Current position in the Company Attendance at Board of Directors meetings in FY2021 Re-election Takaharu Iwasaki Re-election Toshiaki Namiki Re-election Takashi Sumino Re-election Nobuyuki Kawai Re-election Tomehisa Morishita Male Male Male Male Male Representative Director and President Director & Senior Managing Executive Officer Director & Senior Managing Executive Officer Director & Managing Executive Officer Director & Managing Executive Officer Re-election Independent Outside Re-election Independent Outside Re-election Independent Outside New election Independent Outside Koichi Narita Male Director Haruhiko Yahagi Male Director Hiroko Kono Female Director Takashi Katayama Male – 16/16 (100%) 16/16 (100%) 16/16 (100%) 16/16 (100%) 16/16 (100%) 16/16 (100%) 13/13 (100%) 13/13 (100%) – Note: For Haruhiko Yahagi and Hiroko Kono, attendance at Board of Directors meetings indicates their attendance after they assumed office as Directors. – 6 – Reference: Major experience fields of Director candidates (skill matrix) The major experience fields for candidates for Directors are as follows: Name Takaharu Iwasaki ● Toshiaki Namiki Tomehisa Morishita Takashi Sumino Nobuyuki Kawai Koichi Narita Haruhiko Yahagi Hiroko Kono Takashi Katayama ● Overall management Sustainability and ESG HR and labor Finance and accounting Legal and Compliance IT Digital marketing International experience Sales Logistics Store development Expertise and experience ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Note: The above table does not represent all of the expertise and experience possessed by each candidate. – 7 – Candidate No. Name (Date of birth) Career summary, positions and responsibilities in the Company, and significant concurrent positions outside the Company Number of the Company’s shares owned 1 Takaharu Iwasaki (March 27, 1966) Re-election Period as Director: 23 years (as of conclusion of this General Meeting of Shareholders) Apr. 1989 Feb. 1994 May 1999 Oct. 2001 Mar. 2006 June 2014 Jan. 2017 Jan. 2018 May 2019 Joined Mitsubishi Corporation Princes Limited Director, Assistant to Division COO of Sales General Division of the Company Senior Managing Director, Division COO of Tokyo Region Business Division Representative Director, President & Chief Operating Officer, and Group CEO of Business Group Headquarters Representative Director, President & Chief Operating Officer, Group CEO of Business Group Headquarters, and Group CEO of Development Group Headquarters Representative Director, President & Chief Operating Officer, and Group CEO of Business Group Headquarters Representative Director, President & Chief Operating Officer, and Group CEO of Business Group Headquarters Representative Director and President, and Group CEO of Business Group Headquarters (current position) (Significant concurrent positions outside the Company) Representative Director and Vice President of Nihon Ryutsu Sangyo Co., Ltd. Representative Director and Chairman of LIFE FINANCIAL SERVICE (Reason for nomination as Director) Takaharu Iwasaki, in addition to gaining experience at a general trading company, has amassed knowledge in the distribution industry and the Company’s overall management through serving as President of the Company for 16 years since 2006. Therefore, the Company has nominated him as a candidate for Director. 21,507 shares (of which, the number of shares to be granted under the performance-linked share remuneration plan: 8,145 shares) – 8 – Candidate No. Name (Date of birth) Career summary, positions and responsibilities in the Company, and significant concurrent positions outside the Company Number of the Company’s shares owned 2 Toshiaki Namiki (May 15, 1954) Re-election Period as Director: 21 years (as of conclusion of this General Meeting of Shareholders) 12,016 shares (of which, the number of shares to be granted under the performance-linked share remuneration plan: 3,620 shares) Aug. 1983 Apr. 1994 Dec. 1999 May 2001 Mar. 2007 Feb. 2008 Jan. 2011 Mar. 2012 Apr. 2014 Jan. 2017 May 2019 Sept. 2020 Joined the Company General Manager of Public Relations and Secretary Section in Tokyo General Manager of Public Relations and Secretary Section in the Tokyo Region, and General Manager of Environmental Measure Office Director, General Manager of President’s Office, General Manager of Public Relations and Secretary Section in the Tokyo Region, and General Manager of Environmental Measure Office Managing Director, General Manager of President’s Office, and General Manager of Public Relations and Secretary Section in the Osaka Region Managing Director, Division COO of Human Resources Division, and General Manager of Secretary Section Managing Director, Division COO of Sales Planning and Marketing Division, General Manager of Sales Planning and Marketing Department in the Tokyo Region, General Manager of Secretary Section, General Manager of Public Relations Department, and General Manager of CSR and Environmental Affairs Department Senior Managing Director, Group CEO of Administration and Management Headquarters, Division COO of General Affairs Division, General Manager of Secretary Section, and General Manager of Public Relations Department Senior Managing Director, Group CEO of Administration and Management Headquarters, General Manager of Secretary Section, General Manager of Public Relations Department, and General Manager of CSR and Environmental Affairs Department Senior Managing Director, Group CEO of Development Group Headquarters, General Manager of Secretary Section, and in charge of Industry Group Relations Director & Senior Managing Executive Officer, Group CEO of Development Group Headquarters, and General Manager of Secretary Section Director & Senior Managing Executive Officer, Assistant to the President, and Group CEO of Development Group Headquarters (current position) – 9 – Candidate No. Name (Date of birth) Career summary, positions and responsibilities in the Company, and significant concurrent positions outside the Company Number of the Company’s shares owned (Reason for nomination as Director) Toshiaki Namiki has successively served as head of corporate planning and administration division of the Company. He has a wide range of operation knowledge as well as insight on the Company’s overall management, administration and business operation. Therefore, the Company has nominated him as a candidate for Director. – 10 – Candidate No. Name (Date of birth) Career summary, positions and responsibilities in the Company, and significant concurrent positions outside the Company Number of the Company’s shares owned 3 Tomehisa Morishita (December 9, 1959) Re-election Period as Director: 8 years (as of conclusion of this General Meeting of Shareholders) 5,141 shares (of which, the number of shares to be granted under the performance-linked share remuneration plan: 3,365 shares) Apr. 1982 Sept. 2001 Feb. 2007 Mar. 2009 Nov. 2009 Feb. 2014 May 2014 June 2015 June 2016 Jan. 2017 Jan. 2018 May 2019 Feb. 2020 Apr. 2020 Joined the Company General Manager of Osaka Region Apparel Department General Manager of Information System Department Executive Officer, Division COO of Corporate Strategy and Planning Division, and General Manager of Corporate Strategy and Planning Department Executive Officer, Division COO of Osaka Region Apparel and Lifestyle Products Division, General Manager of Osaka Region Apparel Department, and General Manager of Osaka Region Lifestyle Products Department Executive Officer, Deputy Division COO of Osaka Region Sales Division, and Division COO of Osaka Region Apparel and Lifestyle Products Division Director, Deputy Division COO of Osaka Region Sales Division, and Division COO of Osaka Region Apparel and Lifestyle Products Division Director, Division COO of Corporate Strategy and Planning Division, and Division COO of New Business Development Division Managing Director, Division COO of Corporate Strategy and Planning Division, and in charge of New Businesses Managing Director, Group CEO of Administration and Management Headquarters Managing Director, Group CEO of Corporate Functions Group Headquarters Director & Managing Executive Officer, Group CEO of Corporate Functions Group Headquarters Director & Managing Executive Officer, Group CEO of Corporate Functions Group Headquarters, and Division COO of Information Strategy Division Director & Senior Managing Executive Officer, Group CEO of Corporate Functions Group Headquarters, and Division COO of Information Strategy Division (current position) (Reason for nomination as Director) Tomehisa Morishita has successively served as head in various divisions including sales, systems and corporate strategy and planning in the Company and has amassed insight on the Company’s overall management, administration and business operation. Therefore, the Company has nominated him as a candidate for Director. – 11 – Candidate No. Name (Date of birth) Career summary, positions and responsibilities in the Company, and significant concurrent positions outside the Company Number of the Company’s shares owned 4 Takashi Sumino (January 25, 1956) Re-election Period as Director: 10 years (as of conclusion of this General Meeting of Shareholders) 7,815 shares (of which, the number of shares to be granted under the performance-linked share remuneration plan: 2,561 shares) Mar. 1980 Jan. 2001 Mar. 2004 Mar. 2006 Mar. 2008 Mar. 2009 Feb. 2010 May 2012 June 2015 Jan. 2017 Jan. 2018 May 2019 Feb. 2021 Jan. 2022 Joined the Company General Manager of Osaka Region Sales Promotion Department General Manager of Osaka Region Logistics Department General Manager of Osaka Region Operational Reforms Promotion Office Executive Officer, General Manager of Osaka Region Operational Reforms Promotion Office Executive Officer, General Manager of Logistics Planning of Sales Management Division Executive Officer, Division COO of Osaka Region Store Support Division Director, Division COO of Osaka Region Chain Store Division, and Division COO of Osaka Region Store Support Division Managing Director, Division COO of Osaka Region Sales Division Managing Director, Division COO of Corporate Strategy and Planning Division, and in charge of New Businesses Managing Director, Group CEO of Infrastructure Group Headquarters, and Division COO of Information Strategy Division Director & Managing Executive Officer, Group CEO of Infrastructure Group Headquarters, and Division COO of Information Strategy Division Director & Managing Executive Officer, Group CEO of Infrastructure Group Headquarters, and Division COO of E-Commerce Operation Division Director & Managing Executive Officer, Group CEO of Infrastructure Group Headquarters (current position) (Reason for nomination as Director) Takashi Sumino has successively served as head of sales division of the Company. He has abundant operation knowledge, mainly in the sales division, as well as insight on distribution industry and the the Company’s overall management. Therefore, Company has nominated him as a candidate for Director. – 12 – Candidate No. Name (Date of birth) Career summary, positions and responsibilities in the Company, and significant concurrent positions outside the Company Number of the Company’s shares owned 5 Nobuyuki Kawai (April 18, 1963) Re-election Period as Director: 3 years (as of conclusion of this General Meeting of Shareholders) 2,173 shares (of which, the number of shares to be granted under the performance-linked share remuneration plan: 1,973 shares) Apr. 1987 Dec. 2005 May 2010 May 2012 Apr. 2014 May 2016 July 2018 Oct. 2018 Jan. 2019 May 2019 Mar. 2021 Jan. 2022 Joined Mitsubishi Corporation Senior Manager, Accounting & Finance Team Accounting Department, Kansai Branch Head, Planning and Development, Structured Finance, M&A Advisory Dept. Deputy General Manager, Corporate Auditors’ Office Executive Vice President and CFO, Mitsubishi Company (Thailand) Ltd. Executive Vice President and CFO, Thai-MC Company Limited Chief Administrative Officer, Tata Consultancy Services Japan, Ltd. General Manager of Department in charge of Special Missions, Business Group Headquarters of the Company Assistant to Group CEO of Corporate Functions Group Headquarters Executive Officer, Deputy Division COO of Corporate Finance and Accounting Division, and responsible for Corporate Strategy and Planning Department Director & Senior Executive Officer, Division COO of Corporate Finance and Accounting Division Director & Managing Executive Officer, Assistant to Group CEO of Corporate Functions Group Headquarters, and Division COO of Corporate Finance and Accounting Division Director & Managing Executive Officer, Deputy Group CEO of Corporate Functions Group Headquarters, and Division COO of Corporate Finance and Accounting Division (current position) (Reason for nomination as Director) Nobuyuki Kawai has amassed significant knowledge in finance and accounting through his long-standing experience at the finance and accounting divisions in a general trading company and has also abundant knowledge in compliance. Therefore, the Company has nominated him as a candidate for Director. – 13 – Candidate No. Name (Date of birth) Career summary, positions and responsibilities in the Company, and significant concurrent positions outside the Company Number of the Company’s shares owned 6 0 shares Koichi Narita (June 30, 1954) Re-election Independent Outside Period as outside Director: 4 years (as of conclusion of this General Meeting of Shareholders) Apr. 1977 Aug. 1992 May 1993 June 1993 May 1995 May 1995 Sept. 2003 Apr. 2006 Apr. 2008 Apr. 2009 Apr. 2010 Apr. 2013 July 2014 May 2018 Joined Mitsubishi Corporation Counselor, Deputy Division COO of Sales General Division of the Company Director Director, Deputy Division COO of Sales General Division, and Division COO of Store Business Division Retired from Director Mitsubishi Corporation (returned) General Manager of Living Essentials Group CEO Office Division COO of Foods (Products) Div. Executive Officer, Division COO of Foods (Products) Div. Executive Officer, General Manager of Living Essentials Group CEO Office Representative Director and President of SIGMAXYZ Inc. (seconded) Representative Director, President and Executive Officer of IT Frontier Corporation Representative Director, Senior Vice President of Tata Consultancy Services Japan, Ltd. Outside Director of the Company (current position) (Reasons for nomination as outside Director and outline of expected role) The Company has nominated Koichi Narita as a candidate for outside Director because he left a record of remarkable accomplishments as a corporate manager of Tata Consultancy Services Japan, Ltd. and other companies, possesses a high level of knowledge of business operation in IT solutions, and has contributed to the enhancement of corporate value as an outside Director of the Company by appropriately giving advice for the Company’s management and supervising business execution. The Company expects that he will continue to fulfill his role described above. Mr. Narita’s period as outside Director of the Company will have been four years at the conclusion of this meeting. – 14 – Candidate No. Name (Date of birth) Career summary, positions and responsibilities in the Company, and significant concurrent positions outside the Company Number of the Company’s shares owned 7 0 shares Haruhiko Yahagi (December 21, 1962) Re-election Independent Outside Period as outside Director: 1 year (as of conclusion of this General Meeting of Shareholders) Apr. 1989 Jan. 1998 Dec. 1998 Sept. 2001 Mar. 2003 Sept. 2009 Mar. 2015 July 2020 May 2021 General Manager of Innovation and Integration Division of Pricewaterhouse Consultant Co., Ltd. Manager of Global Service Division of Electronic Data Systems Corp. General Manager of Consumer Business Division of Deloitte Tohmatsu Consulting Co., Ltd. Division COO of Consulting Division of ASUKATECHNOLOGY Corporation Director, Head of Business Process Innovation (BPI) Team of Capgemini Japan K.K. Leader of Japan and Asian Consumer Business Industry Headquarters of Deloitte Tohmatsu Consulting LLC Partner, in charge of Consumer Products and Retail Industry of PwC Consulting LLC Managing Director (current position) Outside Director of the Company (current position) (Reasons for nomination as outside Director and outline of expected role) Haruhiko Yahagi has never been directly involved in the management of a company. However, the Company has nominated him as a candidate for outside Director because he has amassed knowledge in retail and digital marketing through serving as a consultant, and his performance and insight that can be found in his writings are highly regarded and the Company expects that he will continue to fulfill his role as outside Director of the Company as he can contribute to the enhancement of corporate value by appropriately giving advice for the Company’s management and supervising business execution. Mr. Yahagi’s period as outside Director of the Company will have been one year at the conclusion of this meeting. – 15 – Candidate No. Name (Date of birth) Career summary, positions and responsibilities in the Company, and significant concurrent positions outside the Company Number of the Company’s shares owned 8 0 shares Hiroko Kono (May 8, 1965) Re-election Independent Outside Period as outside Director: 1 year (as of conclusion of this General Meeting of Shareholders) Apr. 1989 July 1992 Jan. 2001 Feb. 2003 July 2008 July 2011 Nov. 2013 Mar. 2016 Nov. 2018 May 2021 Mar. 2022 Joined Mitsubishi Corporation Joined Tokyo Office, Capital International Research, Inc. Los Angeles Headquarters, The Capital Group Companies, Inc. Washington, D.C. Office, Capital International Research, Inc. Tokyo Office, Capital International, Inc. Council and Director of International School of Asia, Karuizawa Establishment Preparation Foundation Director and Head of Operations of International School of Asia, Karuizawa Head of Operations of UWC ISAK Japan Executive Coach of COACH A Co., Ltd. Outside Director of the Company (current position) Officer, Executive Coach of COACH A Co., Ltd. (current position) (Reasons for nomination as outside Director and outline of expected role) Hiroko Kono has never been directly involved in the management of a company. However, the Company has nominated her as a candidate for outside Director because her work experience at investment companies and performance and insight concerning school operation and human resource development nurtured in a human resource development company are highly regarded and the Company expects that she will continue to fulfill her role as outside Director of the Company as she can contribute to the enhancement of corporate value by appropriately giving advice for the Company’s management and supervising business execution. Ms. Kono’s period as outside Director of the Company will have been one year at the conclusion of this meeting. – 16 – Candidate No. Name (Date of birth) Career summary, positions and responsibilities in the Company, and significant concurrent positions outside the Company Number of the Company’s shares owned 9 200 shares Takashi Katayama (October 27, 1953) New election Independent Outside Period as outside Director: 0 years (as of conclusion of this General Meeting of Shareholders) Apr. 1976 Apr. 1977 Apr. 1989 Apr. 1994 Mar. 1996 Mar. 2001 Jan. 2004 Mar. 2013 Jan. 2015 Mar. 2018 Mar. 2019 Assistant at College of Science and Technology, Nihon University Joined Teraoka Seiko Co., Ltd. Director of Digi Europe Ltd. (UK) Managing Director Managing Director of Teraoka Weigh-System Ltd. (Singapore) Director and General Manager of Global Business Development Department of Teraoka Seiko Co., Ltd. Director and General Manager of Food Industry System Department Senior Director President Advisor Representative of RTK-Design (current position) (Reasons for nomination as outside Director and outline of expected role) The Company has nominated Takashi Katayama as a candidate for outside Director because he left a record of remarkable accomplishments as a corporate manager of Teraoka Seiko Co., Ltd. and other companies and possesses a high level of knowledge related to logistics environment systems and overseas logistics. Therefore, the Company expects that he will fulfill his role as outside Director of the Company such as by appropriately giving advice for the Company’s management and supervising business execution. Notes: 1. Takaharu Iwasaki, a candidate for Director, is concurrently serving as Representative Director of Nihon Ryutsu Sangyo Co., Ltd. The Company and Nihon Ryutsu Sangyo Co., Ltd. have a business relationship, which includes the purchase of products. 2. Koichi Narita, a candidate for outside Director, previously served as a person who executed business in the Company during the period from August 1992 to May 1995. For part of that period, from May 1993 to May 1995, Mr. Narita served as Director of the Company. For ten years, Mr. Narita served as a person who executed business in the Mitsubishi Corporation, a specified related business operator of the Company. His other positions and responsibilities are listed in “Career summary, positions and responsibilities in the Company, and significant concurrent positions outside the Company” above. He resigned from Mitsubishi Corporation in April 2013. 3. There is no special interest between any other candidates for Director and the Company. 4. Koichi Narita, Haruhiko Yahagi, Hiroko Kono, and Takashi Katayama are candidates for outside Director. 5. The Company has submitted notification to Tokyo Stock Exchange that Koichi Narita, Haruhiko Yahagi, and Hiroko Kono, candidates for outside Director, have been appointed as an independent officer. Since Takashi Katayama also meets the requirements for independent officer pursuant to the rules of the Tokyo Stock Exchange, the Company plans to notify him as an independent officer if he is elected. 6. The Company states in the Articles of Incorporation that the Company may enter into an agreement with outside Directors to limit their liability for damages to the Company in order for outside Directors to fully perform the roles expected of them as outside Directors. The Company has entered into the aforementioned limited liability agreement with Koichi Narita, Haruhiko Yahagi, and Hiroko Kono. If they are elected, the Company plans to renew this agreement with them. If Takashi Katayama is elected, the Company plans to newly enter into the same limited agreement with him. The outline of the agreement is as follows: ● Outside Directors shall be liable to the Company for damages caused by neglect of his/her duties up to the minimum liability amount provided for under Article 425, paragraph (1) of the Companies Act. ● The limitation of the liability above shall apply only when outside Director in question acted in good faith and without gross negligence in performing the duties giving rise to said liabilities. 7. The Company has entered into a directors and officers liability insurance policy, as defined in Article 430-3, paragraph (1) of the Companies Act, with an insurance company to provide coverage under said insurance policy for damages that may arise from the assumption of liability incurred in the course of the execution of duties by the insured, including – 17 – Directors of the Company, or claims pertaining to the pursuit of such liability. If candidates are elected and assume the office as Directors, they will be added to the insured of said insurance policy. The Company plans to renew this insurance policy with the same contents at the next renewal. – 18 – Reference: Nomination Policy After consultation at the Board of Directors and deliberation and reports by the Nomination & Remuneration Advisory Committee, the Company nominates officer candidates who fulfill the following requirements. The evaluation of effectiveness of the Board of Directors confirms whether or not current Directors fulfill the following requirements and whether they will be nominated again. Also, the Company maintains a policy for selecting candidates from both inside and outside the Company who are suitable as officers. [Requirements of all officers] 1. Deeply share the corporate philosophy, “through reliable management with noble aspirations, contribute towards the realization of a sustainable and flourishing society.” 2. Possess an excellent personality, strong virtue, a sense of fairness, a rich knowledge and wealth of experience. 3. Understand social responsibility and missions, possess the ability to perform fair and accurate business operations and management based on the corporate philosophy and code of conduct of the Company. 4. Possess adaptability to boldly address changes in the external environment, as well as objective decision making ability, insight, and foresight. 5. Does not possess an interest that could impact execution of duties. [Requirements of inside Directors] 1. Possess rich knowledge, experience and accomplishments related to the business of the Group. 2. Ability to execute business and manage organizations under a cross-company perspective, not just in the field of one’s own experience. [Requirements of outside Directors] growth of the Company. [Requirements of Corporate Auditors] 1. Possess a wealth of experience and expertise in the following areas: corporate management, industrial knowledge, finance/accounting, crisis management, internal controls, legal affairs, government, education, HR, marketing, development/investment, technology, and others. 2. Can provide objective management supervision and judgement, and advice and support for the sustainable Possess experience and expertise of legal affairs, accounting, tax accounting, auditing, and others. – 19 – Reference: Criteria for Determining Independence of Outside Officers of the Company Outside officers who do not correspond to any of the following are designated as independent officers. 1 A person who is currently or has been within the past ten years an executive director, executive officer, manager, or employee (hereinafter “Business Executor”) of the Company or its subsidiaries. 2 A shareholder who directly or indirectly holds 10% or more of the voting rights of the Company. 3 A party in which the Company or its subsidiaries directly or indirectly hold 10% or more of the voting rights. 4 A party whose major business partner is the Company or its subsidiaries (a party for whom total sales to the Company or its subsidiaries in the most recent fiscal year comprise 2% or more of the party’s net sales for that fiscal year). 5 A party who is a major business partner of the Company or its subsidiaries (a party to whom total annual sales of the Company or its subsidiaries in the most recent fiscal year comprise 2% or more of consolidated net sales of the Company for that fiscal year, or a party who has provided financing for 2% or more of consolidated total assets of the Company at the end of the most recent fiscal year). 6 A party receiving over ¥10 million annually in donations or monetary aid from the Company or its subsidiaries. 7 A Business Executor or full-time corporate auditor of a company in which a Business Executor or full-time Corporate Auditor of the Company or its subsidiaries is also serving concurrently as a Director or Corporate Auditor. 8 A CPA, or partner, manager, or employee of a CPA office or auditing corporation that is the accounting auditor of the Company or its subsidiaries. 9 A consultant, accounting professional, or legal expert receiving ¥10 million or more annually in monetary or other assets (outside of officer remuneration) from the Company or its subsidiaries (if the party receiving the assets is a corporation or organization, a party to whom the total amount paid by the Company or its subsidiaries in the most recent fiscal year is 2% or more of the party’s consolidated net sales for that fiscal year). 10 For items 2 to 6, a Business Executor of the party’s parent company or consolidated subsidiary in the case where the party is a corporation. 11 A person to whom any of items 2 to 10 have applied within the past three years. 12 A relative within the second degree of kinship of a person described in items 1 to 11. In the case where a relative within the second degree of kinship is the subject of this item, a Business Executor refers to a Director (excluding outside Directors), Executive Officer, or General Manager. 13 A person who does not fall under the above items, but whose independence is questionable due to a risk of enduring and substantial conflict of interest with general shareholders. – 20 – Reference: Corporate Governance Basic Policy Under the corporate philosophy, “through reliable management with noble aspirations, contribute towards the realization of a sustainable and flourishing society,” the Group ensures compliance and achieves sustainable company growth to enhance the Group’s contribution to society as a supermarket group trusted by all stakeholders. In order to achieve this, the Group established a Corporate Governance Basic Policy to realize transparent, fair, swift, and bold decision-making, and continuously strive to fulfill corporate governance based on this policy. The Group also established the Internal Controls System Management Committee, Risk Management Committee, and Nomination & Remuneration Advisory Committee as organizations to enhance corporate governance. Each committee engages in vibrant discussion, deliberates measures, and makes decisions to fulfill their purpose. These details are deliberated in the Board of Directors meetings. The Group also established the Sustainability Promotion Committee in March 2022 in order to strengthen sustainability efforts. The Internal Controls System Management Committee deliberates proper execution of internal controls and reports the results of these discussions and makes proposals to the Board of Directors. The Risk Management Committee deliberates risks related to the business execution of the Group and reports the results of these discussions and makes proposals to the Board of Directors. The Nomination & Remuneration Advisory Committee advises the Board of Directors on matters related to the nomination of Directors and Executive Officers as well as remuneration. The Sustainability Promotion Committee deliberates the proper promotion of sustainability and reports the results of these discussions and makes proposals to the Board of Directors. – 21 – I. Status of the corporate group 1. Business activities and results (Attached Documents) Business Report (March 1, 2021 to February 28, 2022) Operating revenue Change from the previous fiscal year Operating profit Change from the previous fiscal year ¥768,335 million +1.2% ¥22,932 million -16.3% Ordinary profit Change from the previous fiscal year Profit attributable to owners of parent Change from the previous fiscal year ¥23,695 million -15.8% ¥15,208 million -14.7% In the fiscal year under review, the Japanese economy continued to see weak recovery due to the impact of repeated outbreaks of the COVID-19 pandemic. The situation remained far from optimistic also because of geopolitical risks and other factors impacting the Japanese economy. In this economic environment, there are clouds on the horizon for the food supermarket industry, which is the Group’s area of business, despite the industry continuing to benefit from increased demand for eating at home caused by COVID-19. In addition, amid sluggish growth in individual income and limited recovery in consumer confidence, increasing price competition, expansion of e-commerce, expansion of grocery delivery services, expansion of takeout and delivery services from restaurants, intensifying competition across industry boundaries, and higher costs, including personnel expenses and raw materials expenses, have led to a tougher environment for business operations. In an environment characterized by the presence of COVID-19, the Group has put in place a variety of measures including social distancing, so it can continue fulfilling its mission of providing a lifeline to residents while putting the highest priority on ensuring the safety and security of customers and employees. Also, the Group ran ongoing promotions, such as sales to support specific locales, to help producers, restaurant industry companies, and manufacturers who were impacted by fewer tourists due to people staying at home. Other major initiatives during the fiscal year under review included those for the online supermarket business, which has received positive reviews in various private surveys. In terms of systems, the Group collaborated with 10X, Inc. to further improve convenience and launched the Life Online Supermarket App, the first mobile app version of the online supermarket, in March 2021, and acquired downloads steadily. In terms of distribution, the Group made efforts to construct a stable and high-quality distribution network for the online supermarket service as well as the home delivery service for in-store purchases. In April, the Company and Maguchi Holdings Co., Ltd. established LIFE HOME DELIVERY, a new company that provides last-mile delivery. Having started operations in June, this company is gradually expanding its business, with nine stores for the online supermarket service and 25 stores for the home delivery service covered as of the end of February 2022. In terms of organization, in January 2022, the Company established E-Commerce Business Division, which directly reports to the President, in order to accelerate the further development and expansion of the online supermarket business, and reorganized related organizations into the new division. Also, the Group held a special campaign from September 2021 through February 2022 to celebrate the 60th anniversary of the Company and the 5th anniversary of the LC JCB CARD, the Group’s co-branded credit card. The Company is striving to expand credit card memberships and usage such as by establishing Card Business Department in January. Further, the Company expanded the delivery area of its service for Amazon Prime members that began in September 2019. In the Tokyo region, the delivery area now covers all or part of 23 wards and 13 cities in Tokyo, eight cities in Kanagawa prefecture, 13 cities in Chiba prefecture, and five cities in Saitama prefecture. In the Osaka region, it now covers 23 cities in Osaka prefecture, six cities in Hyogo prefecture, and three cities in Kyoto prefecture, with the exception of certain areas. – 22 – In addition, the Group strengthened its product development and lineup of BIO-RAL, a private brand that uses healthy materials and production methods for customers interested in health and natural products. The Group also created new BIO-RAL natural supermarkets as well as dedicated sections at existing stores. The Group opened eight new stores: Higashinippori Store (Tokyo) in March 2021, Mizonokuchi Store (Kanagawa prefecture) in April, Shijo karasuma Store (Kyoto prefecture) and Hongo 3-chome Ekimae Store (Tokyo) in September, BIO-RAL EKI MARCHE OSAKA Store (Osaka prefecture), which is the third location for the natural supermarket brand, in October, SEVEN PARK Amami Store (Osaka prefecture) in November, HIRAKATA T-SITE Store (Osaka prefecture) in December, and BIO-RAL Shimokitazawa Ekimae Store (Tokyo), the fourth location for the natural supermarket brand, in February 2022. On the other hand, three stores were closed. For existing stores, the Group proactively made renovations at a total of 32 stores to address the changing needs of customers, including Oyodo Store, Tatsumi Store, Nagata Store, Kyodo Store, Takidani Store, Nijo Ekimae Store, Central Square Morinomiya Store, Fuchu Nakagawara Store, Bentencho Store, and Kawasaki Miyuki Store. Effects of opening new stores, expanding e-commerce such as online supermarkets (e-commerce, electronic sales), bolstering BIO-RAL and other private brand products, and implementing product initiatives that sought to enhance taste contributed to the Group’s performance. As a result, operating revenue was ¥768,335 million (up 1.2% year on year) and gross profit increased due to improved profit margin. On the other hand, as for selling, general and administrative expenses, the Group saw increases in personnel expenses from increased hiring activities, rent expenses from opening new stores, and non-personnel expenses from strengthening the growing e-commerce business. As a result, operating profit was ¥22,932 million (down 16.3% year on year), ordinary profit was ¥23,695 million (down 15.8% year on year), and profit attributable to owners of parent was ¥15,208 million (down 14.7% year on year) as each item saw a year-on-year decline. Results by segment are as follows: Retail Business Operating revenue was ¥767,379 million (up 1.2% year on year), with net sales of ¥745,080 million (up 1.2% year on year) and segment profit of ¥23,556 million (down 15.8% year on year). Net sales by department were ¥323,082 million (up 2.6% year on year) for fresh produce, ¥324,343 million (up 0.9% year on year) for general food, ¥64,823 million (down 3.2% year on year) for lifestyle products, ¥23,150 million (down 1.6% year on year) for apparel, and ¥9,680 million (up 0.01% year on year) for tenants. (Unit: Millions of yen; figures in ( ) indicate percentage of net sales) * Amounts less than one million yen are rounded down. Fresh produce General food Apparel Tenants Total Lifestyle products 65th Fiscal Year (2019/3 – 2020/2) 66th Fiscal Year (2020/3 – 2021/2) 67th Fiscal Year (2021/3 – 2022/2) 289,745 303,211 64,268 25,875 (41.8) (43.8) (9.3) (3.7) 314,783 321,393 66,971 23,516 (42.8) (43.6) (9.1) (3.2) 323,082 324,343 64,823 23,150 (43.4) (43.5) (8.7) (3.1) 9,961 (1.4) 9,680 (1.3) 9,680 (1.3) 693,062 (100.0) 736,346 (100.0) 745,080 (100.0) Other Business Operating revenue from LIFE FINANCIAL SERVICE was ¥2,415 million (up 3.7% year on year), with segment profit of ¥139 million (down 24.5% year on year). New store information for March 2021 to February 2022 Mar. 2021 Higashinippori Store (Tokyo) Apr. 2021 Mizonokuchi Store (Kanagawa Prefecture) Sept. 2021 Shijo karasuma Store (Kyoto Prefecture) Sept. 2021 Hongo 3-chome Ekimae Store (Tokyo) Oct. 2021 Dec. 2021 BIO-RAL EKI MARCHE OSAKA Store (Osaka Prefecture) HIRAKATA T-SITE Store (Osaka Prefecture) Nov. 2021 Feb. 2022 SEVEN PARK Amami Store (Osaka Prefecture) BIO-RAL Shimokitazawa Ekimae Store (Tokyo) – 23 – 2. Capital expenditures Major capital expenditures during the fiscal year under review are as follows: (1) Stores opened during the fiscal year under review Osaka Region: Tokyo Region: Shijo karasuma Store, BIO-RAL EKI MARCHE OSAKA Store, SEVEN PARK Amami Store, and HIRAKATA T-SITE Store Higashinippori Store, Mizonokuchi Store, Hongo 3-chome Ekimae Store, and BIO-RAL Shimokitazawa Ekimae Store (2) Stores renovated during the fiscal year under review Osaka Region: Tokyo Region: Oyodo Store, Tatsumi Store, Nagata Store, Takidani Store, Nijo Ekimae Store, Central Square Morinomiya Store, Bentencho Store, Sakaisuji Honmachi Store, Kishibe Store, Hattori Store, Okamachi Store, Shiokusa Store, Shimodera Store, Kitabatake Store, Central Square Nishi-miyahara Store, and Hishie Store Kyodo Store, Fuchu Nakagawara Store, Kawasaki Miyuki Store, Kanda Izumi-cho Store, Rokucho Ekimae Store, Shakujiidai Store, Osaki Hyakutan-dori Store, Katsushika Kamakura Store, Nishi-oizumi Store, Actopia Kita-akabane Store, Tsurumi Store, Higashi-ogu Store, Sagamihara Mall Store, Osaki New City Store, Central Square Oshiage Ekimae Store, and Niiza Store Financing for the abovementioned facilities was primarily allocated from the Group’s own funds. 3. Financing Not applicable. – 24 – 4. Trends in assets and operating results (1) Trends in assets and operating results of the corporate group Category ended February 2019 ended February 2020 ended February 2021 Period 64th Fiscal Year 65th Fiscal Year 66th Fiscal Year 67th Fiscal Year (fiscal year under review) ended February 2022 Operating revenue (Millions of yen) 698,693 714,684 759,146 768,335 Ordinary profit (Millions of yen) 12,831 14,558 Profit attributable to owners of parent (Millions of yen) 7,401 7,834 28,156 17,824 23,695 15,208 Earnings per share (Yen) 157.91 167.17 380.32 324.50 Total assets (Millions of yen) 246,812 262,053 268,307 270,229 Net assets (Millions of yen) 75,340 81,360 97,560 110,299 Net assets per share (Yen) 1,607.47 1,735.94 2,081.61 2,353.44 Notes: 1. Earnings per share is calculated based on the average number of shares outstanding during each fiscal year and amount of net assets per share is calculated based on the total number of shares outstanding at the end of each fiscal year. Treasury shares are excluded from the average number of shares outstanding during each fiscal year and from the total number of shares outstanding at the end of each fiscal year. 2. Amounts less than one million yen are rounded down, except for amounts of earnings per share and net assets per share. (2) Trends in assets and operating results of the reporting company Category ended February 2019 ended February 2020 ended February 2021 Period 64th Fiscal Year 65th Fiscal Year 66th Fiscal Year 67th Fiscal Year (fiscal year under review) ended February 2022 Operating revenue (Millions of yen) 698,075 713,879 758,259 767,379 Ordinary profit (Millions of yen) 12,850 Profit (Millions of yen) 7,423 Earnings per share (Yen) 158.39 14,541 7,787 166.15 27,972 17,665 376.93 23,556 15,066 321.46 Total assets (Millions of yen) 253,497 269,377 274,950 275,299 Net assets (Millions of yen) 76,646 82,616 98,170 110,634 Net assets per share (Yen) 1,635.32 1,762.74 2,094.63 2,360.60 Notes: 1. Earnings per share is calculated based on the average number of shares outstanding during each fiscal year and amount of net assets per share is calculated based on the total number of shares outstanding at the end of each fiscal year. Treasury shares are excluded from the average number of shares outstanding during each fiscal year and from the total number of shares outstanding at the end of each fiscal year. 2. Amounts less than one million yen are rounded down, except for amounts of earnings per share and net assets per share. – 25 – 5. Significant parent company and subsidiaries (1) Parent company Not applicable. (2) Significant subsidiaries Company name Share capital Ownership Principal lines of business LIFE FINANCIAL SERVICE ¥499 million 100.0% Credit card and e-money business Issues to be addressed 6. The future outlook for the Japanese economy continues to provide little room for optimism, given the ongoing impact of COVID-19 with factors including an increase in the number of cases and the progress of vaccinations. There are also overseas factors that would affect the Japanese economy, such as excessive inflation, frequent occurrence of natural disasters, U.S. financial, monetary, and trade policies, trends in the Chinese economy, and geopolitical risks including the situation in Ukraine. Although demand for eating at home is still strong due to changes in consumer behavior caused by COVID-19, conditions in the retail industry remain challenging due to concerns about deterioration of corporate profitability, slow growth in personal income, and a decline in consumer confidence in the future. The industry is undergoing significant changes, as seen by new entrants from outside the sector, including major e-commerce players, offering fresh produce. In this difficult environment, we decided to extend the scope of the 6th Medium-Term Plan by one year, making fiscal 2022 its final year, in order to address issues remaining from the COVID-19 pandemic. This plan, commenced in fiscal 2018, aims to make each of our stores the No. 1 in the area with even greater trust from customers. In the 6th Medium-Term Plan, while reassessing the issues that the Company is facing, we have clearly expressed the Group’s vision as the “True to LIFE Declaration” comprised of three keywords: “delicious,” “exciting,” and “happy.” To achieve this vision, we will continue to execute the action plan whose outline is set out below. ● The store is the star! – Each and every store strives to embody the concept of “True to LIFE” in a way that meets the needs of local customers, with all initiatives based on the notion that “the store is the star” so that we can empower eager and spirited store staff to independently think and put ideas into action. ● Investment in people – We seek to become a company that provides great job satisfaction to its employees, at which diverse people succeed in a stress-free environment without being pressed for time. ● Investment in stores – We will review all of our measures from the ground up, including customer service, store design and displays, renovations, and new stores, with the goal of creating stores that customers associate with ideas and feelings such as “True to LIFE,” “delicious,” “welcoming,” “comfortable,” “reassuring,” and “a little fun.” ● Investment in merchandise – In addition to focusing on a customer-oriented perspective, we aim to provide merchandise that does not compromise on the elements that make up “delicious,” namely ingredients, recipes, and freshness. ● LIFE’s strengths – By honing in on our online supermarket strategy and card business strategy in particular, we will significantly differentiate ourselves from competitors and grow these aspects into strengths of the Company. ● Strategy to support “True to LIFE” – We will enhance our sales support strategy involving sales promotions and other measures, infrastructure strategy on logistics, food process centers, and information systems, and cost reduction / funds procurement strategy, which consists of initiatives for optimizing purchasing costs and for finance. – 26 – ● Activities to instill, develop, and maintain the concept of “True to LIFE” – By ensuring that every individual from officers to employees including part-timers understand the concept of “True to LIFE,” base their thinking on this notion, and practice it in day-to-day operations, we aim to not only convey this “True to LIFE” concept to customers but also to create an organization that develops the next generation of human resources with excellent teamwork through such activities. Through the abovementioned action plan, we aim to improve our corporate value and achieve sustained growth, as a business entity that is trusted by customers, society and employees. Further, based on reflections of the 6th Medium-Term Plan and changes in the external environment, the Group will shift into a new 7th Medium-Term Plan, whose period will begin in fiscal 2023. Under the new plan, the Group will seek to differentiate itself from the competition and further refine the “True to LIFE” concept by taking measures that utilize data and technology, further developing its online supermarkets and the BIO-RAL natural supermarket business, and expanding its unique product lineup, while reassessing the status of current issues. The COVID-19 pandemic has made it extremely difficult to accurately forecast performance outlook, given the serious negative impact it has had on operations of certain industries, despite causing changes to consumer behavior that generate demand for eating at home in the food supermarket industry, including the Company. For the final year of the 6th Medium-Term Plan (fiscal 2022), the Group forecasts operating revenue of ¥770.0 billion(Note), operating profit of ¥23.2 billion (up 1.2% year on year), ordinary profit of ¥24.0 billion (up 1.3% year on year), and profit attributable to owners of parent of ¥15.5 billion (up 1.9% year on year), although the outlook remains unclear due to the presence of COVID-19. The performance forecast may be revised in response to changes in the socioeconomic environment and other factors, but in order to achieve the goal of “True to LIFE” that was set in the 6th Medium-Term Plan, we will continue to steadily make investments in people, investments in stores, and investments in merchandise, all based on the notion that “the store is the star.” Note: The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29), etc., from the beginning of the fiscal year ending February 28, 2023. Therefore, the operating revenue forecast represents the amount calculated by applying the said accounting standard, etc., but does not include year-on-year change as the accounting treatment method subject to comparison differs. The Company expects operating revenue to decrease by approximately ¥22.0 billion due to this change. 7. Principal lines of business (As of February 28, 2022) The Group is mainly engaged in a retail business handling fresh produce, general food, sundries and other lifestyle products, and apparel, as well as a credit card and e-money business. The Group also conducts incidental operations including leasing of stores. 8. Major business locations (As of February 28, 2022) 160 stores in the Osaka region 125 stores in the Tokyo region 285 stores 124 stores 16 stores 17 stores 3 stores Tokyo Kanagawa Prefecture Chiba Prefecture Saitama Prefecture 84 stores 29 stores 5 stores 7 stores Osaka Prefecture Kyoto Prefecture Hyogo Prefecture Nara Prefecture (1) Logistics centers and other locations of the Company 1) Osaka Prefecture Nanko Food Process Center Sakai Food Process Center Suminoe Logistics Center Shintempozan Low Temperature Logistics Center Tempozan Food Process Center – 27 – 2) Tokyo 3) Saitama Prefecture 4) Chiba Prefecture 5) Kanagawa Prefecture Osaka Hirabayashi Comprehensive Logistics Center Osaka Hirabayashi Food Process Center Higashigotanda Satellite Delicatessen Center Sakurashinmachi Satellite Delicatessen Center Kurihashi Food Process Center Yoshikawa Ekimae Bakery Center Kazo Food Process Center Matsudo Comprehensive Logistics Center Funabashi Food Process Center Kawasaki Comprehensive Logistics Center (2) Head offices and headquarters of subsidiaries LIFE FINANCIAL SERVICE Head Office and Headquarters (Taito-ku, Tokyo) – 28 – 9. Employees (As of February 28, 2022) (1) Employees of the corporate group Number of employees Increase/decrease from the previous fiscal year-end 6,847 +271 Note: In addition to the above, the average number of part-timers employed during the period was 23,972 (converted on an eight-hour workday basis). (2) Employees of the reporting company Number of employees Increase/decrease from the previous fiscal year-end Average age Average years of service 6,839 +270 41.2 years old 15.4 years Note: In addition to the above, the average number of part-timers employed during the period was 23,972 (converted on an eight-hour workday basis). 10. Major creditor banks and balance of borrowings (As of February 28, 2022) Creditor