Contents
Consolidated Financial Statements
02

Consolidated Statement of Financial Position

04

Consolidated Statement of Proﬁt or Loss andConsolidated Statement ofComprehensive Income

06

Consolidated Statement of Changes in Equity

08

Consolidated Statement of Cash Flows09

Notes to Consolidated Financial Statements

71

Notes on reconciliation of equity

74

Notes to reconciliations of proﬁt or loss andcomprehensive income

76

Independent Auditorʼs Report1. Consolidated Financial Statements, etc.
(1) Consolidated Financial Statements
1) Consolidated Statement of Financial Position
Notes

IFRS Transition Date As of February 28,
2017(March 1, 2016)
Millions of yen

Millions of yen

As of February 28,
2018
Millions of yen

AssetsCurrent assets
Cash and cash equivalents

728,14931,86738,883

Trade and other receivables

8

117,545

122,703

125,649

Other financial assets

10

5,947

5,852

4,067

Inventories

927,85334,33233,755

Other current assets

12

8,112

5,462

6,076

Assets held for sale

11

Total current assets

–

1,049

6,732

187,608

201,268

215,164

Non-current assets
Property, plant and equipment

455,375

459,979

458,877

Goodwill

14

568

534

523

Investment property

15

179,442

189,013

195,608

Intangible assets

14

2,912

3,426

3,588

Investments accounted for using equity method

02

13,19

16

26,171

26,033

16,425

Other financial assets

10,19

93,941

94,840100,016

Deferred tax assets

17

11,005

8,974

7,286

Other non-current assets

12

14,79420,99824,857

Total non-current assets

784,211803,800

807,183

Total assets

971,820

1,005,069

1,022,348

NotesIFRS Transition Date As of February 28,
2017(March 1, 2016)
Millions of yen

Millions of yen

As of February 28,
2018
Millions of yen

Liabilities and equity
Liabilities
Current liabilities
Bonds and borrowings

18,19

89,148101,229

46,230Trade and other payables

21

145,537

143,711

141,343

Other financial liabilities

18,19,20

32,822

31,41930,811

8,322

7,117

9,202

1,826

2,177

202

Income tax payables
Provisions

23

Other current liabilities

24

Total current liabilities

52,63654,40764,561

330,295

340,062

292,351

Non-current liabilities
Bonds and borrowings

18,19

109,885

104,722

137,972

Other financial liabilities

18,19,20

35,00332,21734,240Retirement benefit liabilities

22

32,894

31,76029,909Provisions

23

5,193

5,158

4,595

Deferred tax liabilities

17

58,80557,86861,161Other non-current liabilities

24

4,942

11,836

11,231

Total non-current liabilities

246,724

243,562

279,109

Total liabilities

577,019583,625

571,460

EquityCapital25

30,00030,00031,974

Share premium

25

209,565

209,551

211,864

Treasury shares

25(11,286)(11,281)(15,244)

Other components of equity

25

11,615

12,61015,772Retained earnings

25

104,615

127,690

151,151

Parent344,510368,571395,519

Non-controlling interests

50,29052,87255,368

Total equity

394,800

421,444

450,887

Total liabilities and equity

971,820

1,005,069

1,022,348

032) Consolidated‌Statement of Profit or Loss and Consolidated Statement of Comprehensive Income

Consolidated Statement of Profit or Loss
Notes

Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

Millions of yen

Millions of yen

Sales revenue

27

452,505

469,915

Cost of sales

29(239,938)(256,979)

212,567

212,935

Gross profit
Selling, general and administrative expense

30(167,668)(166,688)

Other operating income

28

4,084

8,967

Other operating expense

31(7,255)(5,668)41,72749,546

Operating profit
Finance income

32

1,353

1,090

Finance costs

32(1,370)(1,194)898(1,171)42,60848,271(12,165)(16,415)

30,44331,855

Owners of parent

27,052

28,486

Non-controlling interests

3,390

3,368

Profit30,44331,855

Share of profit (loss) of investments accounted forusing equity method
Profit before tax
Income tax expense

17

ProfitProfit attributable to:Earnings per share

04

Basic earnings per share (Yen)34

103.43108.92

Diluted earnings per share (Yen)34

103.43108.86

Consolidated Statement of Comprehensive Income
Notes

ProfitFiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

Millions of yen

Millions of yen
30,44331,855

33,36

2,167

3,464

Remeasurements of defined benefit plans

33

2,905

2,298

Share of other comprehensive income of entities
accounted for using equity method

33

(411)

(3)

4,660

5,758

Other comprehensive income
Items that will not be reclassified to profit or loss
Financial assets measured at fair value throughother comprehensive income

Total items that will not be reclassified to profit or loss
Items that may be reclassified to profit or loss
Cash flow hedges

33

164

57

Exchange differences on translation of foreign
operations

33

(118)

69

Share of other comprehensive income of entities
accounted for using equity method

33

(333)

70

Total items that may be reclassified to profit or loss

(286)

197

Other comprehensive income, net of tax

4,374

5,955

Comprehensive income

34,81737,811

Owners of parent

31,39334,450Non-controlling interests

3,423

3,360

Comprehensive income

34,81737,811

Comprehensive income attributable to:053) Consolidated Statement of Changes in Equity
Equity attributable to owners of parent
Other components of equity
Notes

Share
premium

CapitalTreasurysharesExchangedifferenceson translationof foreign
operations

Cash flow
hedgesFinancial assets
measured at fairvalue through othercomprehensive
incomeMillions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen
Balance at March 1, 2016

30,000(11,286)–

73

11,542

Profit

–

–

–

–

–

–

Other comprehensive income

–

–

–

(154)

(140)

2,065

Total comprehensive income

–

–

–

(154)

(140)

2,065

Issuance of new shares

–

–

–

–

–

–

Purchase of treasury shares

–

–

(10)

–

–

–

Disposal of treasury shares

–

(0)

15

–

–

–

Dividends

–

–

–

–

–

–

Changes in ownership interests in subsidiaries

26

–

–

–

–

–

–

Share-based payment transactions

–

(14)

–

–

–

–

Transfer from other componentsof equity to retained earnings

–

–

–

–

–

(775)

Other

–

–

–

–

–

–

Total transactions with owners

–

(14)

4

–

–

(775)

Balance at February 28, 2017

30,000209,551(11,281)

(154)

(66)

12,832

Profit

–

–

–

–

–

–

Other comprehensive income

–

–

–

92

111

3,471

Total comprehensive income
Issuance of new shares

25

Purchase of treasury shares

25

–

–

–

92

111

3,471

1,974

1,974

–

–

–

–

–

–

(3,963)

–

–

–

–

(0)

0

–

–

–

–

–

–

–

–

–

Changes in ownership interests in subsidiaries

–

(56)

–

–

–

–

Share-based payment transactions

–

395

–

–

–

–

Transfer from other componentsof equity to retained earnings

–

–

–

–

(60)

(472)

Other

–

–

–

18

–

–

Disposal of treasury shares
Dividends

06

209,565

26

Total transactions with owners

1,974

2,313

(3,962)

18

(60)

(472)

Balance at February 28, 2018

31,974

211,864(15,244)

(43)

(15)

15,831Equity attributable to owners of parent
Other components of equity
Notes Remeasurements of
Total
definedbenefit plans

Retainedearnings

Noncontrollinginterests

Total

Total

Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen
Balance at March 1, 2016–

Profit11,615

104,615

344,51050,290394,800––

27,052

27,0523,390

30,443

Other comprehensive income

2,570

4,341

–

4,341

32

4,374

Total comprehensive income

2,570

4,341

27,052

31,393

3,423

34,817

–

–

–

–

–

–

Issuance of new shares
Purchase of treasury shares

–

–

–

(10)

–

(10)

Disposal of treasury shares

–

–

–

14

–

14

Dividends––(7,323)(7,323)(840)(8,163)

Changes in ownership interests in subsidiaries

26

–

–

–

–

–

–

Share-based payment transactions

–

–

–

(14)

–

(14)

Transfer from other componentsof equity to retained earnings(2,570)(3,345)

3,345

–

–

–

–

–

(0)

(0)

(0)

(0)

Other
Total transactions with owners(2,570)(3,345)(3,977)(7,333)(840)(8,174)

Balance at February 28, 2017–12,610127,690368,571

52,872

421,444

ProfitOther comprehensive income
Total comprehensive income
Issuance of new shares

25

Purchase of treasury shares

25

–

–

28,48628,486

3,368

31,855

2,287

5,963

–

5,963

(7)

5,955

2,287

5,963

28,48634,4503,360

37,811

–

–

–

3,948

–

3,948

–

–

–

(3,963)–(3,963)

–

–

–

0

–

0

–

–

(7,846)(7,846)(911)(8,757)

Changes in ownership interests in subsidiaries

–

–

–

(56)

56

–

Share-based payment transactions

–

–

–

395

–

395

Transfer from other componentsof equity to retained earnings(2,287)(2,820)

2,820

–

–

–

–

18

–

18

(10)

8

Disposal of treasury shares
Dividends

Other

26

Total transactions with owners(2,287)(2,801)(5,025)(7,502)(865)(8,367)

Balance at February 28, 2018–

15,772

151,151

395,519

55,368450,887074) Consolidated Statement of Cash Flows
Notes
Cash flows from/(used in) operating activities
Profit before tax
Depreciation and amortization expense
Impairment loss
Finance income
Finance costs
Share of loss (profit) of investments accounted for using equity method
Loss (gain) on sales of non-current assets
Loss (gain) on disposals of non-current assets
Decrease (increase) in inventories
Decrease (increase) in trade and other receivables
Increase (decrease) in trade and other payables
Increase (decrease) in retirement benefit liabilities
Decrease (increase) in retirement benefit assets
Other, net
SubtotalInterest received
Dividends received
Interest paid
Proceeds from compensation
Income taxes paid
Income taxes refund
Net cash flows from/(used in) operating activities
Cash flows from/(used in) investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment property
Proceeds from sales of investment property
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation
Other, net
Net cash flows from/(used in) investing activities
Cash flows from/(used in) financing activities
Net increase (decrease) in current borrowings
Net increase (decrease) in commercial papers
Proceeds from non-current borrowings
Repayments of non-current borrowings
Proceeds from issuance of bonds
Redemption of bonds
Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other, net
Net cash flows from/(used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period

08

37

18
18
18
18
18

18

7
7

Fiscal year ended
February 28, 2017
Millions of yen

Fiscal year ended
February 28, 2018
Millions of yen

42,60817,284774(1,353)
1,370(898)(1,953)2,051(6,466)(5,634)(1,778)(1,134)(1,131)(1,684)42,054207
390(1,337)
7,855(17,206)
1,799
33,764

48,271
18,683
2,576(1,090)1,194
1,171(3,103)
1,609(354)(3,557)(1,971)(1,850)(3,455)
12,47470,597131
330(1,108)–(14,833)
1,961
57,079(26,885)
10,423(12,436)–(2,463)
4,462–(1,052)(27,952)(17,708)2,089(8,993)
1,810(1,946)
2,857
1,839
1,020
(19,030)

(100)
3,001
46,000(42,005)––(21)(7,305)(846)(819)(2,097)
3,714
28,1493
31,867950(32,799)
16,500(28,960)
34,838(12,000)(15)(7,822)(911)(827)(31,048)
7,000
31,86715
38,883

Notes to Consolidated Financial Statements

1

Reporting Entity

J. FRONT RETAILING Co., Ltd. (the“ Company”
or theand its subsidiaries (the‘Group’), as well as the Group’s“parent”) is a company located in Japan. The registeredinterests in associates.

address of its head office is Chuo-ku, Tokyo.

For the Group’s major business activities, please refer to“6.

The Company’s consolidated financial statements for the

Segment Information.”

fiscal year ended February 28, 2018 comprise the Company

2

Basis of Preparation(1)Compliance with IFRS and first-time adoption

International Financial Reporting Standards “IFRS(
1”), the

The consolidated financial statements of the Group haveGroup’s accounting policies are in accordance with IFRS

been prepared in compliance with International Financial

effective February 28, 2018.

Reporting Standards “IFRS”() issued by the International

The exemptions adopted are provided in“42. First-Time

Accounting Standards Board.

Adoption.”

Pursuant to the provisions of Article 93 of the“Ordinanceon Terminology, Forms, and Preparation Methods of(2)Basis of measurement

Consolidated Financial Statements”(Ordinance of the

The Group’s consolidated financial statements have been

Ministry of Finance No. 28 of 1976), the consolidated

prepared on a historical cost basis except for certain

financial statements of the Group have been prepared infinancial instruments, etc. measured at fair value as statedcompliance with IFRS since the Company qualifies as ain“3. Significant Accounting Policies.”“S p e c i f i e d C o m p a n y C o m p l y i n g w i t h D e s i g n a t e dInternational Accounting Standards”prescribed in Article(3)Functional currency and presentation currency

1-2 of the Ordinance.

The Group’s consolidated financial statements are

The Group has adopted IFRS for the first time in the fiscalpresented in Japanese yen, which is the Company’syear ended February 28, 2018, and the date of transition

functional currency, and figures are rounded down to the

to IFRSs is March 1, 2016. The impact of the transition tonearest million yen.

IFRSs on financial position, operating results and cash
flows of the Group on the IFRS transition date and in the(4)Early adoption of new accounting standards

comparative year is provided in“42. First-Time Adoption.”

The Group has early adopted IFRS 9 Financial Instruments

Except for IFRS that have not been early adopted and(amended in July 2014;“IFRS 9”).

exemptions permitted under IFRS 1 First-time Adoption of3

Significant Accounting Policies

Significant accounting policies are applied consistently for all

the consolidated financial statements of the Group fromperiods presented in these consolidated financial statements

the date when the Group gains control until the date(including the consolidated statement of financial position onwhen it ceases to control the subsidiary.

the date of transition to IFRSs), except as otherwise provided.

In cases where the accounting policies applied by a
subsidiary are different from those applied by the Group,(1)Basis of consolidation
1)Subsidiaries

adjustments are made to the subsidiary’s financial
statements, if necessary. All intergroup balances,

Subsidiaries are entities controlled by the Group. Control

transactions and unrealized gains or losses arising frommeans the power to govern the financial and operatingtransactions within the Group are eliminated in preparing

policies of the entity so as to obtain benefits from its

the consolidated financial statements.

business activities.

When the Company retains control when there has been

The financial statements of subsidiaries are included inpartial disposal of ownership interest in a subsidiary, the09partial disposal is accounted for as an equity transaction.

of the acquiree. Any excess of the consideration

Any difference between the amount by which the non-transferred over the fair value of identifiable assets andcontrolling interests are adjusted and the fair value of

liabilities is recognized as goodwill in the consolidated

the consideration paid or received is recognized directlystatement of financial position. Conversely, any deficit isin equity attributable to owners of the parent.

immediately recognized as income in the consolidated

The additional acquisition of non-controlling interests isstatement of profit or loss.

accounted for as a capital transaction, and therefore no

The Group elects to measure non-controlling interests at

goodwill is recognized with respect to such transactions.

fair value, or at the proportionate share of the recognizedNon-controlling interests in consolidated subsidiaries areamounts of identifiable net assets, on a transaction-by-

identified separately from the Group’s equity therein.

transaction basis.

Comprehensive income of subsidiaries is attributed to

Acquisition-related costs are expensed as incurred.

owners of the parent company and to the non-controlling

The Group applies exemption of IFRS 1 and does notinterests even if this results in the non-controlling

retrospectively apply IFRS 3 Business Combinations

interests having a negative balance.

“IFRS
(
3”
) for the business combinations that occurred

When subsidiaries’fiscal year end is not the end of

before the date of transition to IFRSs (March 1, 2016).

February, which is the fiscal year end of the Company,

Accordingly, goodwill resulted from acquisitions that

because the legal system of the region where theoccurred before the date of transition to IFRSs is recorded

subsidiaries are located does not allow them to have theat its carrying amount under former accounting standards

same fiscal year end as that of the Company, or for other(Japanese GAAP) on the date of transition to IFRSs.

reasons, adjustments are made by additionally preparing
their financial statements as of the fiscal year end of theCompany or other means.

(3)Foreign currency translation
1)Foreign currency transactions
Each entity of the Group has set its own functional

2)Associates

currency as the currency of the primary economic

An associate is defined as an entity over which theenvironment in which the entity operates. Transactions

Group has significant influence on financial and operatingof each entity are measured at the functional currency.

policies but does not have control.

When each entity prepares non-consolidated financial

Investments in associates are recognized at cost at thestatements, transactions in currencies other than its

time of the acquisition, and are accounted for by thefunctional currencies are translated using the exchange

equity method thereafter. Goodwill recognized onrate prevailing at the dates of transactions.

acquisition (less accumulated impairment) is included in

Foreign currency monetary assets and liabilities at theinvestments in associates.

end of the reporting period are translated using exchange

In cases where the accounting policies applied by anrates at the end of the reporting period.

associate are different from those applied by the Group,

Exchange differences arising from translation or

adjustments are made to the associate’s financial

settlement are recognized as profit or loss. However,statements, if necessary.

when gains or losses on non-monetary items are

For associates whose fiscal year end is not the end ofrecorded in other comprehensive income, exchange

February, which is the fiscal year end of the Company,

differences are also recorded in other comprehensive

due to relationships with other shareholders or otherincome.

reasons, adjustments are made by additionally preparing
their financial statements as of the fiscal year end of theCompany or other means.

2)Financial statements of foreign subsidiaries, etc.
Assets and liabilities of foreign subsidiaries, etc. aretranslated into Japanese yen at the exchange rate(2)Business combinations

10

prevailing at the end of the reporting period. Income andBusiness combinations are accounted for using theexpenses of foreign subsidiaries, etc. are translated intoacquisition method. The cost of an acquisition is measured

Japanese yen at the average exchange rate for theas the aggregate of the acquisition date fair value of theperiod, unless there is significant change in theassets transferred, liabilities assumed and equity

exchange rate during the period. When there is

instruments issued by the Company in exchange for control

significant change in the exchange rate, the income andexpenses are translated using the exchange rate at theusing the effective interest method, foreign exchangetransaction date.

gains and losses and impairment losses are recognized

Exchange differences arising from translation of thein profit or loss, and changes in the fair value excluding

financial statements of foreign subsidiaries, etc. arethese are recognized in other comprehensive income

recognized in other comprehensive income. Exchange(may be reclassified to profit or loss).

differences for foreign subsidiaries, etc. are recognized

For investments in equity instruments that are not held

as profit or loss in the period during which the foreignfor sale, the Group may make an irrevocable election at

subsidiaries, etc. are disposed of.

initial recognition to measure them at fair value and

The Group has applied the exemption of IFRS 1, andrecognize any changes in the fair value in otherdeemed cumulative exchange differences for foreign

comprehensive income. In this case, changes in the fairsubsidiaries, etc. arising before the date of transition asvalue are recognized in other comprehensive income (notzero and transferred all of them to retained earnings.

reclassified to profit or loss). The cumulative amountrecognized as other comprehensive income is transferred(4)Financial instruments
1)Non-derivative financial assets

to retained earnings when the financial asset isderecognized. Dividends are recognized in profit or loss

Trade and other receivables are initially recognized onunless they obviously represent a partial recovery of thethe date when they are incurred. All other financial

cost of the investment.

assets are initially recognized on the trade date whenTransaction cost directly attributable to acquisition of

the Group becomes a party to the contractual provisions

financial assets at FVTOCI is included in the fair value.

of the financial instruments.
An overview of classification and measurement model of
non-derivative financial assets is as follows.

(iii) ‌Financial assets measured at fair value through profit
or loss (financial assets at FVTPL)
Financial assets other than the above are measured at(i) Financial assets measured at amortized costfair value with changes in fair value recognized in profit

With regard to investments in debt instruments, when theor loss. Transaction cost directly attributable tocontractual cash flows consist of principal and interest

acquisition of financial assets at FVTPL is recognized in

paid on specified dates, and the Group holds suchprofit or loss as incurred.

investments based on a business model whose objective

The Group does not designate any debt instrument as

is to hold the instrument to collect contractual cash

measured at fair value through profit or loss to eliminate

flows, the debt financial assets are measured ator significantly reduce an accounting mismatch.

amortized cost. Transaction cost directly attributable toacquisition of financial assets measured at amortized(iv) ‌Impairment of financial assets

cost is included in the fair value.

The Group recognizes impairment of debt financial

After initial recognition, amortization cost is measured

assets measured at amortized cost or at fair value

using the effective interest method, and impairment

through other comprehensive income based on its

losses are deducted where necessary. Interest revenue,

evaluation at the end of each reporting period of whether

foreign exchange gains and losses and impairment

there has been a significant increase in credit risk oflosses on financial assets measured at amortized costfinancial assets or groups of financial assets since initial

are recognized in profit or loss.

recognition. Specifically, when there has been no
significant increase in the credit risk since initial(ii) Financial‌assets measured at fair value through otherrecognition, 12-month expected credit losses arecomprehensive income (financial assets at FVTOCI)

recognized as allowance for credit losses. On the other

With regard to investments in debt instruments, when thehand, when there has been a significant increase incontractual cash flows consist of principal and interest

credit risk since initial recognition, lifetime expected

paid on specified dates, and the Group holds suchcredit losses of the financial assets are recognized as

investments based on a business model whose objective

allowance for credit losses. Whether credit risk has

is both to collect contractual cash flows and to sell thesignificantly increased or not is determined based on thefinancial assets, the debt financial assets are measuredchanges in default risk.

at fair value. In this case, interest revenue measured

For trade receivables arising from the ordinary course of11

business of the Group, since the period until collection

objective, the strategy for implementation of the hedge

is short, as a practical expedient,expected credit losses

transaction, the hedging instrument and the hedged item,of such trade receivables are recognized over their

the nature of the hedged risk, the method for assessing

remaining lives from inception based on historical credit

the effectiveness of the hedge relationship and theloss experience.

method of measuring effectiveness and ineffectiveness.
The Group assesses whether the hedging instrument is(v) Derecognition‌of financial assets

expected to be highly effective in achieving offsetting

The Group derecognizes a financial asset when thechanges in fair values or cash flows of the hedged item

contractual rights to the cash flows from the financial

attributable to the hedged risk throughout the period for

asset expire, or the contractual rights to receive cash

which the hedge is designated, at the inception of theflows from the financial asset are transferred in ahedge and on an ongoing basis.

transaction where substantially all the risks and rewards

To apply cash flow hedges to forecast transactions, theincidental to ownership of the financial asset are

forecast transaction must be highly probable.

transferred. Any interests in transferred financial assets

Derivatives are initially recognized at fair value and thethat are created or continuously retained by the Grouptransaction costs are recognized in profit or loss as

are recognized as a separate asset or liability.

incurred. After initial recognition, derivatives aremeasured at fair value, and any changes in the fair value

2)‌Non-derivative financial liabilities

are accounted for as follows.

The Group recognizes financial liabilities at the date oftransaction when the Group becomes a party to the(i) ‌Cash flow hedges

contract for the financial instrument.

When a derivative is designated as a hedging instrument

The Group derecognizes a financial liability when theto hedge changes in cash flows attributable to certain

financial liability is extinguished, i.e. when therisks related to highly probable transactions that could

contractual obligation is discharged or cancelled oraffect recognized assets and liabilities or profit or loss,

expires.

the effective portion of the hedge in changes in fair

The Group principally has borrowings, bonds, tradevalue of the derivative is included in other components

payables, other short-term payables, common giftof equity as“cash flow hedges.”The balance of cash

certificates for department stores nationwide, deposits

flow hedges is deducted from other comprehensive

received, etc. as non-derivative financial liabilities. These

income in the consolidated statement of comprehensive

financial liabilities are initially recognized at fair value

income and transferred to profit or loss under the sameand subsequently measured at amortized cost based on

item as the hedging instrument in the same period as thethe effective interest method.

period in which cash flows of the hedged item affectprofit or loss. The ineffective portion of the hedge in3)‌Presentation of financial assets and liabilities

changes in fair value of the derivative is immediately

Financial assets and liabilities are offset and the net

recognized in profit or loss.

amount is presented in the consolidated statement of

When the hedge no longer meets the criteria for hedge

financial position only when the Group has a legally

accounting, the hedging instrument expires or is sold,enforceable right to offset the recognized amounts andterminated or exercised, or the designation of the hedge

intends either to settle on a net basis, or to realize theis revoked, the application of hedge accounting, isasset and settle the liability simultaneously.

discontinued prospectively.
If hedge accounting is discontinued, the Group continues

4)‌Derivatives and hedge accounting
The Group uses derivatives to hedge interest ratealready been recognized in other comprehensive income

fluctuation risk and foreign exchange fluctuation risk.

until the forecast transaction affects profit or loss. When

Derivatives used by the Group primarily include forward

forecast transactions are no longer expected to occur,

exchange contracts and interest rate swaps.

the balance of cash flow hedges is immediately

At the time of initial designation of the hedge, the Group

recognized in profit or loss.

documents the relationship between the hedging
instrument and the hedged item, the risk management12

to record the balance of cash flow hedges that have

(ii) Fair‌value hedges

the acquisition of the asset, costs related to disassembly,

Changes in fair value of derivatives that are hedging

retirement and site restoration, and borrowing costs that

instruments are recognized in profit or loss. Carrying

should be capitalized.

amounts of hedged items are measured at fair value. For

Depreciation of assets other than land and construction in

gains or losses on hedged items attributable to hedged

progress is recognized using the straight-line method overrisk, any changes in the fair value are recognized in

the estimated useful lives of the assets. The estimatedprofit or loss.

useful lives of major components of property, plant andequipment are as follows:(5)‌Cash and cash equivalents

・ Buildings and structures

3 to 50 years

Cash and cash equivalents consist of cash, demand・ Machinery and vehicles

2 to 20 years

deposits, and short-term investments with maturities of・ Furniture and fixtures		

2 to 20 years

three months or less from the date of acquisition that are

The estimated useful lives, residual values andreadily convertible to cash and subject to insignificant risk

depreciation methods are reviewed at the end of the fiscalof change in value.

year, and if there are any changes made, those changes
are applied prospectively as a change in an accounting(6)‌Inventories

estimate.

Inventories are measured at the lower of cost and net
realizable value. Net realizable value is the estimated(9)‌Goodwill

selling price in the ordinary course of business less the

The Group measures goodwill at the amount calculated byestimated costs necessary to make the sale. The

deducting the net recognized amount (usually, fair value)acquisition cost is calculated mainly using the specificof identifiable assets acquired and liabilities assumed at

identification method, and includes all costs of purchasethe date of acquisition from the fair value of theand other costs incurred in bringing the inventories to theirconsideration for the transfer including the recognizedpresent location and condition.

amount of non-controlling interests in the acquiree, whichis measured at the date of acquisition.

(7)‌Assets held for sale

Goodwill is not amortized. Instead, it is tested forIf the carrying amounts of non-current assets are recovered

impairment in each period, or whenever there are

principally through a sale transaction rather than throughindications of impairment.

continuing use, these assets (or disposal groups) are

Impairment losses of goodwill are recognized in theclassified under“assets held for sale.”consolidated statement of profit or loss, and not reversed

The condition for classifying an asset under“assets held

subsequently.

for sale”is only met by an asset whose sale is highly

In addition, goodwill is carried at cost less accumulated

probable and which is available for immediate sale in its

impairment on the consolidated statement of financial

present condition. Management must have committed toposition.

the execution of a sale plan for that asset, and the sale of
the asset must be scheduled to be completed within one(10)‌Intangible assets

year from the day it is classified as an asset held for sale.

Intangible assets are measured using the cost model andAn asset held for sale is measured at the lower of its

stated at cost less accumulated amortization andcarrying amount and fair value less cost to sell. After

accumulated impairment.

property, plant and equipment, intangible assets andIntangible assets acquired separately are measured at costinvestment property have been classified under“assets

at initial recognition.

held for sale,”depreciation or amortization will not be

After initial recognition, intangible assets other thanapplied to these assets.

goodwill are amortized using the straight-line method overrespective estimated useful lives, except for intangible(8)‌Property, plant and equipment

assets with indefinite useful lives. Estimated useful lives ofProperty, plant, and equipment is measured using the cost

major intangible assets are as follows. In addition, themodel and is carried at cost less accumulated depreciation

Group has no intangible assets with indefinite useful lives.

and accumulated impairment.

・ Software		

The acquisition cost includes costs directly attributable to

The estimated useful lives, residual values and5 years13

amortization methods are reviewed at the end of the fiscal

the Group’s non-financial assets excluding inventories andyear, and if there are any changes made, those changes

deferred tax assets may be impaired. If any indication

are applied prospectively as a change in an accounting

exists, the recoverable amount of the asset is estimated.

estimate.

For goodwill and intangible assets that have indefinite
useful lives or not yet available for use, the recoverable(11)‌Leased assets

amount is estimated at the same time each year.

Leases are classified as finance leases whenever

The recoverable amount of an asset or a cash-generating

substantially all the risks and rewards incidental tounit is the larger of its value in use and fair value less cost

ownership of leased assets are transferred to the Groupof disposal. In calculating value in use, the estimatedunder the contract. All other leases are classified as

future cash flows are discounted to their present value

operating leases.

using a pretax discount rate that reflects the time value ofIn finance lease transactions, leased assets are recordedmoney and the risks specific to the asset. The cash-in the consolidated statement of financial position at thegenerating unit is the smallest group of funds thatlower of the fair value of the leased property or the present

generates cash inflows, from continuous use, that arevalue of the aggregated minimum lease payments, eachlargely independent of the cash inflows from other assets

determined at the inception of the lease. Leased assets

or groups of assets.

are depreciated over the shorter of their estimated useful

To test goodwill for impairment, cash-generating units tolives or the lease term.

which the goodwill is allocated are integrated so that

Lease payments are apportioned between the financeimpairment is tested reflecting the smallest unit related tocosts based on the interest method and the payment of thethe goodwill. Goodwill acquired in a business combinationlease obligations, and interest expense is recognized in theis allocated to cash-generating units that are expected toconsolidated statement of profit or loss.

benefit from the synergies of the combination.

Lease payments under an operating lease are recognizedSince the Group’s corporate assets do not generate

as an expense on a straight-line basis over the lease term

independent cash inflows, the recoverable amount of cash-in the consolidated statement of profit or loss. In addition,

generating units to which the corporate assets arecontingent rent is recognized as an expense in the period

attributed is determined if there is any indication thatin which it is incurred.

corporate assets are impaired.

Determination of whether an arrangement is, or contains, a

An impairment loss is recognized as profit or loss if thelease is based on the substance of the arrangement, incarrying amount of an asset or cash-generating unit

accordance with IFRIC 4 Determining whether an Arrange-

exceeds the estimated recoverable amount. The

ment contains a Lease even if the arrangement does not

impairment loss recognized in association with a cash-

take the legal form of a lease.

generating unit is first allocated to reduce the carrying
amount of goodwill allocated to this unit, and then the(12)‌Investment property

carrying amounts of other assets in the cash-generating

Investment property is property held to earn rentals or for

unit are reduced on a pro rata basis.

capital appreciation or both.

Impairment losses related to goodwill are not reversed.

Investment property is measured using the cost model andWith regard to other assets, for previously recognizedstated at cost less accumulated depreciation andimpairment losses, the Group assesses whether there isaccumulated impairment (For the depreciation method andany indication that the loss may have decreased or may nouseful lives, please refer to“(8) Property, plant andlonger exist at the end of each reporting period. An

equipment”).

impairment loss is reversed when there has been a change

When the investment property portion of a property cannot

in the estimates used to determine the recoverable amount.

be accounted for separately from other portions of a

An impairment loss is reversed up to the carrying amountproperty, the entire property is accounted for as investmentthat would have been determined had no impairment loss

property only if the owner-occupied portion is insignificant.

been recognized, net of necessary depreciation andamortization.

(13)‌Impairment of non-financial assets
The Group determines at the end of every reporting period
whether there is any indication that carrying amounts of14(14)‌Employee benefits
The Group has established defined benefit plans (such asa corporate pension fund plan and lump-sum retirement

will be required to settle the obligation and when a reliable

benefit plan) as employee retirement benefit plans, andestimate can be made of the amount of the obligation. To

certain consolidated subsidiaries have adopted defined

determine the amount of a provision, when the effect of thecontribution plans.

time value of money is material, the estimated future cash

The projected unit credit method is used to determine theflows are discounted to their present value using a pretax

present value of defined benefit obligation, related current

discount rate that reflects the time value of money and theservice cost and past service cost.

risks specific to the liability. Increases in provisions overThe discount rate is determined by reference to market

time are recognized in finance costs.

yields at the end of the fiscal year on high quality corporate

Asset retirement obligations

bonds corresponding to the discount period established

Asset retirement obligations are recorded at the estimatedbased on the period to the date when the future benefits

amount of restoration costs for leased stores offices, etc.

for each fiscal year are to be paid.

for which the Group has obligations to restore to their

Net defined benefit liability or asset is determined as theoriginal state at the time when the lease agreement ispresent value of defined benefit obligation less the fairterminated and costs for removing harmful substances

value of plan assets.

related to non-current assets.

Remeasurements of net defined benefit liability or asset are

Provision for loss on business liquidation

recognized as other comprehensive income andA loss is recorded for the cost of store dismantlement, etc.

immediately transferred from other components of equity tothat is expected to be borne in the future as a result of

retained earnings. Remeasurements consist of actuarial

business liquidation, store closure and store rebuilding.

gains and losses on defined benefit obligation, return onplan assets (excluding the amount of interest revenue on(17)‌Sales revenue

plan assets) and others.

Sales revenue is measured at the fair value of the

Past service costs are immediately accounted for as profit

consideration received from the sale of goods andor loss.

rendering of services, less any discounts, rebates andCosts for defined contribution benefits are recognized as

sales-related taxes.

expenses when the contributions are made.
1)‌Sale of goods(15)‌Share-based payment

Revenue from the sale of goods is recognized when the

The Company has adopted an officer remuneration BIP

Group has transferred the significant risks and rewards(Board Incentive Plan) trust (hereinafter referred to as theof ownership of the goods to the buyer; the Group retains“BIP Trust”) as a performance-linked, share-based payment

neither continuing involvement nor effective control overto ensure steady execution and progress of the Medium-the goods; it is probable that economic benefits related

term Business Plan.

to the transaction will flow to the Group; and these

The BIP Trust is a system of granting the Company’sbenefits and corresponding costs can be measured

shares to officers (in certain cases, the Company’s sharesreliably.

are converted into cash within the trust and cash in the

For sales under a customer loyalty program in whichamount equivalent to their conversion value is paid) inpoints are granted at the time of sales, fair value of theaccordance with the officers’rank and level of achievement

points is estimated and the amount less the estimatedof the Medium-term Business Plan, etc. The consideration

fair value is recognized as revenue.

for the services received is calculated using the fair valueof the Company’s shares on the grant date. This value is2)Rendering of services

expensed over the vesting period from the grant date, andRendering of services of the Group is principally lease ofa corresponding amount is recognized as an increase inproperties, etc. and revenue is recognized according toequity.

the lease period or the rendering of services.

(16)‌Provisions

3)‌Interest revenue

A provision is recognized when the Group has a present

Interest revenue is recognized using the effective interest

legal or constructive obligation as a result of a past event,method.

when it is probable that an outflow of financial resources15

4)‌Dividends

1)‌Current taxes

Divided income is recognized when the right to receive

Current taxes are measured in the amount of thedividends is established.

expected tax payables to or receivables from the taxation
authorities. Calculation of the amount of tax is based on

5)‌Gross and net presentation of revenue

the tax rates and tax laws enacted or substantively

When the Group conducts transactions as a principal,

enacted by the end of the reporting period in countries

revenue is presented at the gross amount of

where the Group conducts business and earns taxable

consideration received from customers. When the Group

profit.

conducts transactions as an agent for the benefit of athird party, revenue is presented at the net amount2)‌Deferred taxes

calculated by deducting the amount collected for theDeferred taxes are recognized for temporary differences

benefit of the third party from the gross amount of

between the carrying amounts of assets or liabilities inconsideration received from customers.

the statement of financial position and its tax base, andThe following indicators are taken into account in thefor tax loss carryforwards and unused tax credits.

determination of whether the Group conducts a

No deferred tax assets and liabilities are recognized ontransaction as a principal or agent:

the following temporary differences:・ ‌Whether the Group has principal responsibility for・ ‌Temporary differences arising from the initial

providing the goods or services to the customer or for
fulfilling the order・ ‌Whether the Group has inventory risk before or after
the customer order, during shipping or on return・ ‌Whether the Group has discretion in establishingprices directly or indirectly

recognition of goodwill・ ‌Temporary differences arising from initial recognitionof assets and liabilities from transactions that are notbusiness combinations and affect neither accounting
income or taxable profit・ ‌Taxable temporary differences associated with・ ‌Whether the Group bears credit risk of the customer

investments in subsidiaries and associates for whichin association with receivables from the customer

the Group is able to control the timing of the reversal

・ Whether‌
the amount received is predetermined, beingof the temporary difference and it is probable that theeither a fixed fee per transaction or a statedtemporary difference will not reverse in thepercentage of the amount billedforeseeable future
A deferred tax liability is recognized for all taxable(18)‌Government grants

temporary differences in principle, and a deferred tax

Government grants are measured and recognized at fairasset is recognized for all deductible temporary

value, if the conditions attaching to them are complieddifferences to the extent that it is probable that taxable

with, and there is reasonable assurance that the grants willprofit will be available against which deductible

be received. Grants for expenses incurred are recorded as

temporary differences can be utilized.

income in the same fiscal year as the fiscal year in which

Carrying amount of deferred tax assets is reassessed at

the expenses are incurred. Grants related to acquisition of

the end of each reporting period and reduced to thean asset are recorded as other operating income on aextent that it is no longer probable that sufficient taxable

systematic basis over the useful life of the asset, andprofit will be available to use all or part of the benefit ofunearned government grants are recorded in liabilities as

the deferred tax assets. Unrecognized deferred tax

deferred income.

assets are reassessed each period and are recognized
to the extent that it has become probable that future(19)‌Income tax

taxable profit will allow the deferred tax assets to be

Income tax consists of current taxes and deferred taxes.

recovered.

Income tax is recognized as profit or loss, except for taxes

Deferred tax assets and liabilities are measured at therelated to business combinations and taxes related to

tax rates and by the tax laws that are expected to apply

items that are recognized directly in equity or in otherto the period when the assets are realized or thecomprehensive income.

liabilities are settled, based on the statutory tax rates
and tax laws enacted or substantively enacted by theend of the reporting period.

16Deferred tax assets and liabilities are offset if the Grouppurpose of allocating management resources to eachhas a legally enforceable right to offset current tax

segment and assessing performance.

assets against tax liabilities and income taxes are leviedby the same taxation authority on the same taxable
entity.

(22)‌Treasury shares
Treasury shares are valued at cost and deducted fromequity. No gain or loss is recognized on the purchase, sale(20)‌Earnings per shareor cancellation of the Company’s treasury shares. Any

Basic earnings per share are calculated by dividing profit

difference between the carrying amount and consideration(loss) attributable to ordinary equity holders of the parent

received on the sale of treasury shares is recognized as

entity by the weighted average number of ordinary sharesshare premium.

outstanding during the period, adjusted for treasury shares.
Diluted earnings per share are calculated by adjusting forthe effects of all dilutive potential ordinary shares.

(23)‌Borrowing costs
The Group includes borrowing costs directly attributable tothe acquisition, construction or production of an asset that(21)‌Operating segments

necessarily takes a substantial period of time to get readyOperating segments are components of entities thatfor its intended use or sale, i.e., a qualifying asset, as part

engage in business activities that earn revenue and incurof the cost until the asset is substantially ready for its

costs including transactions with other operating segments.

intended use or sale.

Operating results of all the operating segments, for which

All borrowing costs other than those above are recognized

the financial information is separately available, areas profit or loss in the fiscal period in which they arereviewed periodically by the Board of Directors for the

incurred.

4

Significant Accounting Estimates and Judgments

In the preparation of consolidated financial statements,

present value of future cash flows generated from ultimate

management is required to make judgments, estimates anddisposal of the asset. These estimates are based onassumptions that affect application of accounting policies as

management’s best estimates, but may differ from actual

well as amounts of assets, liabilities, revenue and expenses.

results due to effects of changes in uncertain future

Actual results may differ from these estimates.

economic conditions.

The estimates and their underlying assumptions are reviewed
on an ongoing basis. The effects of changes in accounting(2)‌Useful lives of property, plant and equipment andestimates are recognized in the fiscal period in which theinvestment property

estimates are changed and in future periods that are affected.

The useful lives of property, plant and equipment andEstimates and judgments made by management thatinvestment property are reviewed at the end of the fiscal

significantly affect the amounts in the consolidated financial

year, and if any changes are required, those changes arestatements are as follows.

applied prospectively as a change in an accounting
estimate.

(1)‌Property, plant and equipment, goodwill, intangible assets

If revisions to the useful lives become necessary, suchand investment property

revisions could have a material effect on the amounts

The Group conducts impairment tests if there is an

recognized in the consolidated financial statements in theindication that property, plant and equipment, goodwill,

next fiscal year and beyond.

intangible assets and investment property may be impaired.
Impairment tests are performed by comparing the carrying(3)‌Recoverability of deferred tax assets

amount and the recoverable amount of the asset. If the

The Group recognizes deferred tax assets to the extent

recoverable amount is less than the carrying amount, anthat it is probable that taxable profit will be available

impairment loss is recognized.

against which deductible temporary differences can be

In calculating the recoverable amount, the Group estimatesutilized, and the judgment of the recoverability is made on

the discounted present value of future cash flows

the basis of an estimate of taxable profit for each future

generated from use of the asset and the discounted

fiscal year determined based on the Group’s business plan.

17

The estimate of taxable profit for future fiscal years may be(5)‌Post-employment benefits

affected by changes in uncertain future economic

The Group has defined benefit and defined contribution

conditions.

post-employment benefit plans for employees and retirees.
Present value of defined benefit obligations, service costs(4)‌Provisions

and others are determined based on various actuarial

The Group recognizes asset retirement obligations andassumptions. For actuarial assumptions, a variety ofprovision for loss on business liquidation as provisions infactors, such as discount rates, future payment of salaries,

the consolidated statement of financial position.

those who withdraw from the plan in the future and life

The amount recognized as provisions is estimated based

expectancy of members, are estimated. These estimateson best estimates which take into account historical andare made based on management’s best estimates, but mayother information on the reporting date for expendituresdiffer from actual results due to effects of changes innecessary to settle current obligations, but may differ fromuncertain future economic conditions and amendment or

actual results.

promulgation of relevant laws and regulations.

5

Accounting Standards That Have Been Published but Not Yet Applied

Accounting standards and interpretations newly established

IFRS 15 Revenue from Contracts with Customers will not beor revised by the approval date of the consolidated financial

significant, and the impact of the application of IFRS 16

statements but not early applied by the Group are primarily as

Leases is being assessed and cannot be estimated atfollows.

present.

The Group estimates that the impact of the application of
Mandatory application(From the fiscal year
beginning on or after)

IFRS

To be appliedby the Group

Description of new standards andinterpretations or revisions

IFRS 15 Revenue fromContracts with Customers

January 1, 2018

From fiscal year ending
February 28, 2019

Revision of accounting treatment
for revenue recognition

IFRS 16 Leases

January 1, 2019

From fiscal year ending
February 29, 2020

Revision of accounting treatment
for leases

6

Segment Information(1)Overview of reportable segments

clothing, general goods, household goods, food products

The reportable segments of the Group are components ofand others. The PARCO Business undertakes development,

the Group for which separate financial information is

management, supervision and operation of shopping

obtainable. These segments are periodically examined bycenters. The Real Estate Business carries out

the Board of Directors for the purpose of deciding thedevelopment, supervision, operation, etc. of real estate.

allocation of management resources and evaluating

The Credit Finance Business undertakes issuance andbusiness results.

administration of credit cards.

The Group is comprised, under a holding company
structure, of the“Department Store Business,”“PARCO

Revenue and business results by reportable segments ofBusiness reportable segments with the Department Storethe Group are as follows. Inter-segment transactions are

Business at its core.

generally based on prevailing market prices.

The Department Store Business carries out the sale of18(2)Segment revenue and business results

Business,”“Real Estate Business”and“Credit FinanceFiscal year ended February 28, 2017
Reportable segments
Department PARCO Real Estate Credit FinanceStore Business Business BusinessBusiness

Total

Other

Total

Adjustments Consolidated

Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen
External revenue

267,873

93,382

4,523

5,448

371,227

81,278452,505–

452,505

Inter-segment revenue

359

398

481

4,399

5,638

33,30638,945(38,945)–

Total

268,233

93,780

5,004

9,847

376,866

114,584

491,451(38,945)452,505

Segment profit

22,224

13,021348

2,856

38,4502,981

41,431

295

41,727

Finance income

1,353

Finance costs(1,370)Share of profit (loss)of investments
accounted for using
the equity method

898

Profit before tax

42,608Segment assets

419,160

246,434

179,898

66,444

911,938

133,640 1,045,578(40,509) 1,005,069

Other items
Depreciation

10,470

5,268

509

5

16,253

1,133

17,387(102)

17,284

Impairment loss

–

683

–

–

683

90

774

–

774

Amounts invested inentities accounted
for using the equity
method

2,625

67

–

–

2,692

165

2,858

23,174

26,033

Capital expenditures

13,271

19,2069,296

241,777739

42,517(104)

42,413

Notes:

1. The‌ “Other”category is a business segment not included as a reportable segment. It includes wholesaling, design and construction contracting,manufacture and sale of furniture, parking, leasing, etc.
2. A
‌ djustments are made as follows.
(1) ‌The adjustment for segment profit includes an inter-segment elimination and corporate income and expenses not attributable to any reportable segment.
Corporate income and expenses are mainly income and expenses of the company submitting consolidated financial statements that are not attributable
to any reportable segment.
(2) ‌The adjustment for segment assets includes elimination of segment receivables, unrealized adjustments on non-current assets, and assets of thecompany submitting consolidated financial statements that are not attributable to any reportable segment.
(3) ‌The adjustment for depreciation consists of inter-segment transfers.
(4) ‌The adjustment for amounts invested in entities accounted for using the equity method consists of investments accounted for using the equity methodof the company submitting consolidated financial statements that are not attributable to any reporting segment.
(5) ‌The adjustment for capital expenditures consists mainly of inter-segment unrealized profit.
3. S‌ egment profit is adjusted to operating profit in the consolidated financial statements.

19

Fiscal year ended February 28, 2018
Reportable segments
Department
CreditPARCO Real EstateStore
FinanceBusiness BusinessBusiness
Business

Total

Other

Total

Adjustments Consolidated

Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen
External revenue

273,937

91,254

12,761

5,881

383,834

86,080469,915–

469,915Inter-segment revenue

371

366

665

4,295

5,699

31,76537,465(37,465)–

Total

274,308

91,621

13,427

10,176

389,534

117,845507,380(37,465)469,915

Segment profit

26,65911,752

4,131

2,742

45,285

4,744

50,030(483)

49,546

Finance income

1,090

Finance costs(1,194)

Share of profit (loss)of investments
accounted for using
the equity method(1,171)

Profit before tax

48,271

Segment assets

420,990259,502

186,778

71,123

938,395

114,908 1,053,303(30,955) 1,022,348

10,250

5,662

2,089

6

18,009931

18,940(256)

18,683

Other items
Depreciation
Impairment loss

396

458

–

–

855

104

959

1,617

2,576

Amounts invested
in entities
accounted for using
the equity method

2,768

37

–

–

2,805

166

2,971

13,454

16,425

Capital expenditures

6,153

15,3097,450

2728,939887

29,827(3,232)

26,594

Notes:

1.

‌ “Other”category is a business segment not included as a reportable segments. It includes wholesaling, design and construction contracting,The
manufacture and sale of furniture, parking, leasing, etc.

2. Adjustments‌are made as follows.
(1) ‌The adjustment for segment profit includes an inter-segment elimination and corporate income and expenses not attributable to any reportable segment.
Corporate income and expenses are mainly income and expenses of the company submitting consolidated financial statements that are not attributable
to any reportable segment.
(2) ‌The adjustment for segment assets includes elimination of segment receivables, unrealized adjustments on non-current assets, and assets of thecompany submitting consolidated financial statements that are not attributable to any reportable segment.
(3) ‌The adjustment for depreciation consists of inter-segment transfers.
(4) ‌The adjustment for impairment loss consists of impairment loss of the company submitting consolidated financial statements that are not attributable toany reportable segment.
(5) ‌The adjustment for amounts invested in entities accounted for using the equity method consists of investments accounted for using the equity methodof the company submitting consolidated financial statements that are not attributable to any reporting segment.
(6) ‌The adjustment for capital expenditures consists mainly of inter-segment unrealized profit.
3. Segment‌profit is adjusted to operating profit in the consolidated financial statements.

20

(3)Information by geographical area

Non-current assets

Sales revenue from external customers

This information has been omitted, as the amount of non-This information has been omitted, as sales revenue fromcurrent assets located in Japan accounts for a large

external customers in Japan accounts for a large

percentage of the amount recorded on the consolidated

percentage of sales revenue recorded on the consolidated

statement of financial position.

statement of profit or loss.

7

Cash and Cash Equivalents

The breakdown of cash and cash equivalents is as follows:
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Millions of yen

Millions of yen

Millions of yen

Cash and deposits

3,109

3,085

2,979

Time deposits with deposit terms of threemonths or less

25,03928,78135,90428,14931,86738,883Total

8

Trade and Other Receivables

The breakdown of trade and other receivables is as follows.
All these receivables have been classified as financial assets measured at amortized cost.
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Millions of yen

Millions of yen

Millions of yen

Notes receivable - trade

3,104

2,816

3,022

Accounts receivable - trade

65,736

66,43964,354

Accounts receivable - other45,374

49,97253,591

Other

3,329

3,474

4,679

117,545

122,703

125,649

Total

9Inventories

The breakdown of inventories is as follows:

Merchandise and finished goods
Work in process
Real estate for sale in process
Supplies
Total
Inventories scheduled to be sold after 12 months

IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Millions of yen

Millions of yen

Millions of yen

26,987

27,176

22,955

571

389

514

–

6,406

9,846

294

359

437

27,85334,33233,755

–

6,406

9,846

The amount of inventories that were recognized as expenses and included in cost of sales was ¥231,137 million in the fiscal
year ended February 28, 2017 and ¥246,401 million in the fiscal year ended February 28, 2018.

21

The amounts of write-down of inventories recognized as expenses are as follows:(Millions of yen)
Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

Millions of yen
Amounts of write-down

Millions of yen
485

215

10 Other Financial Assets
The breakdown of other financial assets is as follows:
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Millions of yen

Millions of yen

Millions of yen

Financial assets measured at amortized cost
Time deposits with deposit terms of morethan three months

4,291

4,471

4,805

Lease and guarantee deposits

58,132

57,86356,885Loans receivable

1,779

1,926

2,008

Other

5,194

6,863

6,305

67

70

–

Financial instruments measured at fair value
through profit or loss
Derivative financial assets
Financial assets measured at fair value
through other comprehensive income
Shares and investments in capital
Total

30,42329,49834,07999,888100,693

104,084

Total current assets

5,947

5,852

4,067

Total non-current assets

93,941

94,840100,016

11 Assets Held for Sale
The breakdown of assets held for sale is as follows:
As of February 28, 2017

As of February 28, 2018

Millions of yen

Millions of yen

Millions of yen

Property, plant and equipment

–

1,049

–

Shares of subsidiaries and associates

–

–

6,732

Total

–

1,049

6,732

As of February 28, 2017, assets held for sale were property,

As of February 28, 2018, assets held for sale were shares ofplant and equipment of two company residences held bySenshukai Co., Ltd. Since the decision to sell these assets

Daimaru Matsuzakaya Department Stores Co. Ltd., which

was made, the assets were classified as assets held for salebelongs to the Department Store Business. Since theas of February 28, 2018. The sale was completed in May

decision to sell these assets was made, the assets were

2018.

classified as assets held for sale as of February 28, 2017.

With regard to the assets, because the carrying amountThe sale was completed in March 2017.

exceeds the fair value less costs to sell, an impairment loss

For these assets, gain on sales of non-current assets ofof ¥1,617 million was recorded.

¥1,473 million was recorded.

22

IFRS Transition Date
(March 1, 2016)

12 Other Assets
The breakdown of other assets is as follows:
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Millions of yen

Millions of yen

Millions of yen

Prepaid expense
Advance payments - trade

10,657

9,823

10,095

478

637

517

Suspense payments

3,113

678

400

Retirement benefit assets

5,687

10,742

14,197

Other

2,970

4,579

5,721

22,907

26,46030,933

Other current assets

8,112

5,462

6,076

Other non-current assets

14,79420,99824,857Total

13 Property, Plant and Equipment(1)Schedule of changes
Changes in acquisition costs and accumulated depreciation and impairment of property, plant and equipment are as follow:
Acquisition costs
Land

Buildings andstructures

Machineryand vehicles

Furniture andfixtures

Constructionin progress

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

278,754426,676

3,387

16,917

6,844

732,580

7,209

10,296

121

1,906

10,32529,859

Sales or disposals(6,996)(13,791)(81)(1,575)–(22,445)

Transfer among line items(38,709)

5,420

577

(428)

31,018(2,122)

Balance as of March 1, 2016
Acquisitions

Other
Balance as of February 28, 2017

–

0

–

(0)

–

0

240,258

428,601

4,005

16,81948,188

737,872

Acquisitions

–

8,798

193

1,529

5,128

15,649

Sales or disposals–(5,616)

(56)

(952)

–

(6,626)

Transfer among line items

(402)

185

14

(260)

(880)

(1,344)

Exclusion from consolidation

–

(242)

(100)

(204)

–

(547)

Other

–

1

–

0

–

2

239,856

431,726

4,055

16,931

52,435745,005

Balance as of February 28, 201823

Accumulated depreciation and impairment

Balance as of March 1, 2016Land

Buildings andstructures

Machineryand vehicles

Furniture andfixtures

Constructionin progress

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen(1,704)(259,983)(2,379)(13,137)–(277,205)

Depreciation expense–(13,592)(151)(1,288)–(15,033)

Impairment loss

(10)

(308)

(0)

(56)

–

(376)

Sales or disposals

942

10,675

77

1,399

–

13,095

Transfer among line items

118

897

(4)

615

–

1,626

Balance as of February 28, 2017

(653)

(262,312)(2,458)(12,468)–(277,892)–(13,713)(194)(1,501)–(15,409)

Depreciation expense
Impairment loss

–

(760)

(0)

(111)

–

(872)

Sales or disposals

165

5,057

54

898

–

6,174

–

371

(0)

1,019

–

1,390

Transfer among line items
Exclusion from consolidation
Balance as of February 28, 2018

–

232

71

175

–

479

(487)

(271,124)(2,527)(11,988)–(286,128)

Land

Buildings andstructures

Machineryand vehicles

Furniture andfixtures

Constructionin progress

Total

Carrying amounts

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Balance as of March 1, 2016

277,050

166,692

1,007

3,779

6,844

455,375

Balance as of February 28, 2017239,605

166,288

1,546

4,350

48,188459,979

Balance as of February 28, 2018239,368

160,601

1,527

4,942

52,435458,877

Notes:

1. The‌amount of depreciation expense for property, plant and equipment is included in“cost of sales”and“selling, general and administrative expense”in
the consolidated statement of profit or loss.
2. Please‌refer to“28. Other Operating Income”for the gain on sales of non-current assets for the fiscal years ended February 28, 2017 and February 28,
2018, and“31. Other Operating Expense”for the loss on disposals of non-current assets for the fiscal years ended February 28, 2017 and February 28,
2018.

(2)Leased assets
Carrying amounts of leased assets under finance leases included in property, plant and equipment are as follows:
Buildings and structures Machinery and vehicles Furniture and fixtures
Millions of yen

Millions of yen

Millions of yen

Millions of yen

–

423

1,363

1,787

Balance as of February 28, 2017

298

398

1,418

2,115

Balance as of February 28, 2018

642

376

979

1,998

Balance as of March 1, 2016(3)Impairment loss

and equipment, the carrying amount is reduced to theProperty, plant and equipment are grouped based on therecoverable amount and the reduction is recorded as ansmallest cash-generating unit (principally stores) that

impairment loss in“other operating expense.”

generates cash inflows largely independent of those of

The breakdown of the assets for which impairment losses

other assets.

were recognized by segment is as follows:

For buildings, etc. and land among these property, plant

24

Total

Fiscal year ended February 28, 2017(Millions of yen)Segment

Company name (Location)

Use

Type
Land

PARCO Co., Ltd.
(Utsunomiya, Tochigi, etc.)

Store, etc.

Other

5

Buildings and structures

102

Machinery and vehicles

0

Furniture and fixtures

5

Other

PARCO Business
NEUVE A Co., Ltd.
(Omiya-ku, Saitama, etc.)

Store, etc.

PARCO SPACESYSTEMS Co., Ltd.
(Naka-ku, Nagoya, etc.)

Parking space, etc.

J. Front Foods Co., Ltd.
(Tokoname, Aichi, etc.)

Store, etc.

JFR PLAZA Inc.
(Taiwan)Store, etc.

Impairment loss

5

Buildings and structures

146

Furniture and fixtures

35

Leased assets

12

Buildings and structures

3

Furniture and fixtures

1

Buildings and structures

55

Furniture and fixtures

2

Total

376

1) ‌With regard to the PARCO Business, principally

loss arising from operating activities of JFR PLAZA Inc.

because the recovery of the amount invested cannot be

was expected to continue to be a negative amount, theexpected due to the decreased profitability ofcarrying amount of the cash-generating unit was

Utsunomiya PARCO, the carrying amount of the cash-

reduced to the recoverable amount and the reduction

generating unit was reduced to the recoverable amount

was recognized as an impairment loss. The recoverable

and the reduction was recognized as an impairment

amount of the cash-generating unit was measured atloss. The recoverable amount was measured at fairvalue in use. Since the value in use based on future

value less costs of disposal. The fair value less costs ofcash flows was a negative figure, the carrying amount ofdisposal was based on the amount assessed by a real-each asset was impaired to zero.

estate appraiser, and the fair value has been classified
as Level 3 in the hierarchy.

There was no reversal of impairment losses recorded in thefiscal year ended February 28, 2017.

2) ‌With regard to other segment, primarily because gain or
Fiscal year ended February 28, 2018
(Millions of yen)Segment
Department StoreBusiness

PARCO Business

Other

Company name (Location)

Use

Daimaru Matsuzakaya
Department Stores Co. Ltd.
(Ashiya, Hyogo, etc.)

Store, etc.

PARCO Co., Ltd.
(Utsunomiya, Tochigi, etc.)

Store, etc.

NEUVE A Co., Ltd.
(Shibuya-ku, Tokyo)

Store, etc.

J. Front Foods Co., Ltd.
(Kita-ku, Osaka)

Store, etc.

Type

Impairment loss

Buildings and structures

327

Machinery and vehicles

23

Furniture and fixtures

2

Other

1

Buildings and structures

138

Machinery and vehicles

0

Furniture and fixtures

19

Buildings and structures

213

Furniture and fixtures

41

Buildings and structures

79

Furniture and fixtures

24

Total

872

25

1) ‌With regard to the Department Store Business,

loss. The recoverable amount was measured at fair

principally because the recovery of the amount invested

value less costs of disposal. The fair value less costs ofcannot be expected due to the decreased profitability ofdisposal was based on the amount assessed by a real-

Daimaru Ashiya store, the carrying amount of the cash-

estate appraiser, and the fair value has been classified

generating unit was reduced to the recoverable amountas Level 3 in the hierarchy.

and the reduction was recognized as an impairment
loss. The recoverable amount of the cash-generating

There was no reversal of impairment losses recorded in theunit was measured at value in use. Since the value infiscal year ended February 28, 2018.

use based on future cash flows was a negative figure,the carrying amount of each asset was impaired to zero.

(4)Assets pledged as collateral
Please refer to“19. Bonds and Borrowings”for assets2) ‌With regard to the PARCO Business, primarily because

pledged as collateral.

gain or loss arising from operating activities of
Utsunomiya PARCO was expected to continue to be a(5)Commitments

negative amount, the carrying amount of the cash-

Please refer to“39. Commitments”for commitments

generating unit was reduced to the recoverable amountrelated to purchase of property, plant and equipment.

and the reduction was recognized as an impairment

14 Goodwill and Intangible Assets(1)‌Changes in acquisition costs, accumulated amortizationand impairment and carrying amounts of goodwill andand impairment and carrying amounts of goodwill andintangible assets are as follows:

intangible assets
Changes in acquisition costs, accumulated amortization
Acquisition costs
Other intangible assets

Goodwill

Software

Other

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

568

7,302

891

8,194

Acquisitions

–

1,688

164

1,852

Sales or disposals

–

(443)

(52)

(495)

–

434

(525)

(91)

568

8,981

478

9,459

Balance as of March 1, 2016

Transfer among line items
Balance as of February 28, 2017
Acquisitions

–

1,565

8

1,574

Sales or disposals–(2,602)(35)(2,638)Transfer among line items
Balance as of February 28, 2018

26

–

–

65

65

568

7,944

516

8,460

Accumulated amortization and impairment
Other intangible assets

Goodwill

Software

Other

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Balance as of March 1, 2016–

(4,877)(404)(5,281)

Amortization expense–(1,168)(2)(1,171)

Impairment loss

(34)

(29)

–

(29)

Sales or disposals

–

111

–

111

Transfer among line items
Balance as of February 28, 2017

–

334

2

337

(34)

(5,629)(404)(6,033)

Amortization expense–(1,271)(2)(1,274)

(10)

(29)

–

(29)

Sales or disposals

–

2,497

25

2,522

Transfer among line items

–

–

(58)

(58)

(44)

(4,433)(439)(4,872)

Impairment loss

Balance as of February 28, 2018

Carrying amounts
Other intangible assets

Goodwill
Millions of yen

Software

Other

Total

Millions of yen

Millions of yen

Millions of yen

Balance as of March 1, 2016

568

2,425

487

2,912

Balance as of February 28, 2017

534

3,352

74

3,426

Balance as of February 28, 2018

523

3,511

77

3,588

Note:	The amount of amortization expense for intangible assets is included in“cost of sales”and“selling, general and administrative expense”in the consolidated
statement of profit or loss.

(2)‌Leased assets
Carrying amounts of leased assets under finance leases included in intangible assets are as follows:
Software

Total

Millions of yen
Balance as of March 1, 2016

Millions of yen––

Balance as of February 28, 2017

54

54

Balance as of February 28, 20184141(3) Impairment test on goodwill
Goodwill arising in business combinations is allocated to cash-generating units that benefit from the business combination on
the acquisition date. The breakdown of the carrying amount of goodwill by segment is as follows:
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Millions of yen

Millions of yen

Millions of yen

PARCO Business

568

534

523

Total

568

534

523

27

The Group tests goodwill for impairment each fiscal year,

disposal of the asset. These estimates are based on

or whenever there is an indication of impairment.

management’s best estimates, but may differ from actual

To test goodwill for impairment, cash-generating units toresults due to effects of changes in uncertain future

which the goodwill is allocated are integrated so that

economic conditions.

impairment is tested reflecting the smallest units related to

There is a risk that impairment may arise if major

the goodwill. Goodwill acquired in a business combination

assumptions used for impairment test are changed.

is allocated to cash-generating units that are expected to

However, the value in use sufficiently exceeds the carrying

benefit from the synergies of the combination.

amount of the cash-generating unit or the group of cash-

In calculating the recoverable amount, the Group estimates

generating units, and the Group considers value in use

the discounted present value of future cash flows

unlikely to fall below the carrying amount even if major

generated from use of the asset and the discounted

assumptions used for impairment tests change within apresent value of future cash flows generated from ultimate

reasonably foreseeable range.

15 Investment Property(1)‌Changes in acquisition costs, accumulated amortizationand impairment and carrying amounts of investment

and impairment and carrying amounts of investment

property and fair values as of the end of each fiscal year

property and fair values

are as follows:

Changes in acquisition costs, accumulated amortization
Acquisition costs
Investment property
Millions of yen
Balance as of March 1, 2016

187,756

Acquisitions

9,299

Sales or disposals(133)

Transfer among line items

1,851

Balance as of February 28, 2017

198,774

Acquisitions

10,624

Sales or disposals(1,152)

Transfer among line items(1,085)

Balance as of February 28, 2018

207,160

Accumulated depreciation and impairment
Investment property
Millions of yen
Balance as of March 1, 2016

(949)

Impairment loss

(323)

Sales or disposals
Transfer among line items

6
(179)

Balance as of February 28, 2017

(9,760)Depreciation expense(2,079)Impairment loss–

Sales or disposals

853

Transfer among line items(565)

Balance as of February 28, 201828

(8,314)

Depreciation expense(11,551)

Carrying amounts and fair values(Millions of yen)
IFRS Transition Date
(March 1, 2016)
Investment property

As of February 28, 2017

As of February 28, 2018

Carrying amount

Fair value

Carrying amount

Fair value

Carrying amount

Fair value

179,442

195,186

189,013210,050

195,608

257,872(2)Impairment loss

Investment property is grouped based on the smallest

Fair value of investment property is based on real-estate

cash-generating unit that generates cash inflows largely

appraisal by an external real-estate appraiser with recent

independent of those of other assets. However, idle assets

experience in appraisal for the region where the property is

are grouped on an individual basis.

located and the type of the property to be valued who

For buildings, etc. among these properties, the carrying

holds certified professional qualifications and others. The

amount is reduced to the recoverable amount and theappraisal is based on market evidence reflecting the

reduction is recorded as an impairment loss in“othertransaction price of similar assets in accordance with

operating expense.”

valuation standards of the country where the property is

The breakdown of the assets for which impairment losses

located.

were recognized by segment is as follows:

Fiscal year ended February 28, 2017(Millions of yen)Segment
PARCO BusinessCompany name (Location)
Sannomiya ZERO GATE
(Kobe, Hyogo)

Use

Type

Impairment loss

Buildings and structures

Store

323

Furniture and fixtures

0

Total

323

In regard to Sannomiya ZERO GATE, the Group reduced

There was no reversal of impairment losses recorded in thethe carrying amount of the asset group to the recoverable

fiscal year ended February 28, 2017.

amount and recognized the amount of the reduction as an
impairment loss because the recoverable amount fell below

Fiscal year ended February 28, 2018

the carrying amount following the decision on rebuilding.

There was no impairment loss recorded in the fiscal year

The recoverable amount of Sannomiya ZERO GATE was

ended February 28, 2018.

measured at value in use. Since the decision on the

Furthermore, there was no reversal of impairment losses

rebuilding was made, the carrying amount of buildings, etc.

recorded in the fiscal year ended February 28, 2018.

was impaired to zero.
(3)Income and expenses from investment property
(Millions of yen)
Fiscal year ended February 28, 2017

Fiscal year ended February 28, 2018

Rental income

7,190

15,024

Direct operating expense

3,274

9,173

The amounts of rental income from investment property and accompanying direct operating expense are included in“sales
revenue”and“cost of sales,”respectively, in the consolidated statement of profit or loss.
(4) Commitments
Please refer to“39. Commitments”for commitments
related to purchase of investment property.

29

16 Investments Accounted for Using the Equity Method(1) Investments in associates
The carrying amount of investments in associates that are not individually material is as follows:(Millions of yen)
IFRS Transition Date
(March 1, 2016)
Total carrying amount

As of February 28, 2017

26,171

As of February 28, 2018

26,033

16,425The Group’s share of comprehensive income of associates that are not individually material is as follows:(Millions of yen)
Fiscal year ended February 28, 2017

Fiscal year ended February 28, 2018

Share of profit898(1,171)

Share of other comprehensive income

(745)

66

Share of comprehensive income

153(1,105)17 Income Tax(1)Deferred tax assets and liabilities
The breakdown of and changes in deferred tax assets and liabilities by major cause are as follows:
Fiscal year ended February 28, 2017(Millions of yen)
Balance as ofMarch 1, 2016

Recognized in
profit or loss

16,356(1,208)

Recognized in othercomprehensive
incomeBalance as ofFebruary 28,
2017

Deferred tax assets
Retirement benefit liabilities
Allowance for credit losses
Non-current assets
Other financial assets
Asset retirement obligations
Tax loss carryforwards
Gain on adjustment of accounts payable
Long-term unearned revenue(1,662)

13,485

617

230

–

848

6,673

(1,300)

–

5,372

658

(27)

(52)

578

1,093

112

–

1,205

356

(14)

–

341

4,102

(232)

–

3,869

–

2,116

–

2,116

Prepaid expense (Land leasehold right)

3,089

(151)

–

2,938

Other

4,324

(344)

159

4,139

37,272(820)(1,555)34,896

Non-current assets

76,880(1,449)(7)75,423

Securities

5,837

–

573

6,410

Total
Deferred tax liabilities

Other
Total
Net amount of deferred tax assets

30

2,354

(602)

204

1,955

85,071(2,051)

769

83,789(47,799)

1,231(2,325)(48,893)

Fiscal year ended February 28, 2018
(Millions of yen)
Balance as ofMarch 1, 2017

Recognized in
profit or loss

Recognized in othercomprehensive
incomeBalance as ofFebruary 28,
2018

Deferred tax assets
Retirement benefit liabilities

13,485

(598)

(994)

11,893

Allowance for credit losses

848

(143)

–

705

Non-current assets

5,372

90

–

5,463

Other financial assets

578

(55)

(1)

520

1,205

(195)

–

1,009

341

47

–

389

Asset retirement obligations
Tax loss carryforwards
Gain on adjustment of accounts payable

3,869

49

–

3,918

Long-term unearned revenue

2,116

(603)

–

1,513

Prepaid expense (Land leasehold right)

2,938

11

–

2,949

Other
Total

4,139

(749)

90

3,480

34,896(2,146)(905)

31,84475,423362(19)75,767

Deferred tax liabilities
Non-current assets
Securities

6,410

–

1,521

7,932

Other

1,955

(114)

179

2,019

Total
Net amount of deferred tax assets

83,789247

1,681

85,719(48,893)(2,394)(2,587)(53,875)

Deferred tax assets and liabilities in the consolidated statement of financial position are as follows:(Millions of yen)
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Deferred tax assets

11,005

8,974

7,286

Deferred tax liabilities

58,80557,86861,161(47,799)(48,893)(53,875)

Net amountIn recognizing deferred tax assets, the Group takes into

Based on the result of the above assessment ofaccount the possibility that tax loss carryforwards orrecoverability of deferred tax assets, the Group has notdeductible temporary differences can be utilized against

recognized deferred tax assets for certain tax loss

future taxable profit. In the recoverability of deferred tax

carryforwards and deductible temporary differences. Tax

assets, the Group considers the scheduled reversal ofloss carryforwards and deductible temporary differences fordeferred tax liabilities, projected future taxable profit andwhich deferred tax assets have not been recognized are as

tax planning.

follows:

(Millions of yen)
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Tax loss carryforwards

2,853

3,470

4,054

Deductible temporary differences

34,692

36,57836,08637,54640,04940,140Total

31The deferral period of tax loss carryforwards for which deferred tax assets have not been recognized is as follows:(Millions of yen)
IFRS Transition Date
(March 1, 2016)
1st year

As of February 28, 2017–

As of February 28, 201899

0

2nd year

76

72

–

3rd year

143

135

–

4th year
5th year and after
Total

382

360

–

2,251

2,802

4,054

2,853

3,470

4,054

(2)Income tax

for the calculation of deferred tax assets and liabilities is

The effective statutory tax rate used for the calculation of

30.6%, with respect to the temporary differences expecteddeferred tax assets and liabilities is 30.9%, with respect toto be reversed in and after the fiscal year beginning March

the temporary differences expected to be reversed on or

1, 2019.

after the end of the fiscal year under review (February 28,

The breakdown of income tax is as follows:2018). Furthermore, the effective statutory tax rate used(Millions of yen)
Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

13,38314,060Current taxes:
Current period
Prior periods
Total current taxes

13

(39)

13,396

14,021

1,573

1,968

Deferred taxes:
Origination and reversal of temporary differences, etc.
Changes in unrecognized deferred tax assets
Changes in tax rates, etc.
Total deferred taxes
Total

(14)

430

(2,789)(4)(1,231)

2,394

12,165

16,415(3)Reconciliation between effective tax rates
Differences between the effective statutory tax rate and average effective tax rate are as follows:
Fiscal year ended
February 28, 2018%%

Effective statutory tax rate

33.1

30.9

Entertainment expense

0.7

0.7

Bonuses for directors (and other officers)

0.2

0.3

Dividend income

0.0

(0.0)

Share of profit (loss) of investments accounted for using equity method

(0.7)

0.7

Unrecognized deferred tax assets

0.5

1.9

Effect of changes in tax rates

(6.5)

(0.0)

Other
Average effective tax rate

32

Fiscal year ended
February 28, 2017

1.1

(0.6)

28.5

34.0

On March 29, 2016, the“Act for Partial Revision of theyear beginning on or after March 1, 2017, the effective

Income Tax Act, etc.”(Act No. 15 of 2016) and the“Actstatutory tax rate used to measure deferred tax assets andon Partial Revision of the Local Tax Act, etc.”(Act No. 13

liabilities has been changed from 32.3% to 30.9%. In

of 2016) were enacted in the Diet, resulting in changes in

addition, for temporary differences expected to be reversed

the rates of income taxes for fiscal years beginning on orin fiscal years beginning on or after March 1, 2019, theafter April 1, 2016. In accordance with these revisions, foreffective statutory tax rate used to measure deferred tax

temporary differences expected to be reversed in fiscal

assets and liabilities has been changed to 30.6%.

18 Cash Flow Information(1)Changes in liabilities arising from financing activities
Changes in liabilities arising from financing activities are as follows:
Fiscal year ended February 28, 2017
Changes that do not affect cash flows
Changes due
to businesscombinations

Exchangedifferenceson translationof foreign
operations

Changes infair values

Other

Balance asof February
28, 2017

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen––

39,18555,430–––33,799Balance asof March 1,
2016

Changesthat affectcash flows

Millions of yen

Millions of yen

Current borrowings

58,350(42,105)–

Commercial papers

30,7983,001–

Non-current borrowings

82,97046,000–(3)–(39,185)

89,782

Bonds

26,914

–

–

–

–

25

26,939Lease obligations

3,295

(826)

–

–

–

1,287

3,756

Derivatives

201

–

–

–

(98)

–

102

Total

202,531

6,069

–

(3)

(98)

1,312

209,811

Derivatives are held in order to hedge interest rate fluctuation risk and foreign exchange fluctuation risk.
Fiscal year ended February 28, 2018
Changes that do not affect cash flows
Changes due
to businesscombinations

Exchangedifferenceson translationof foreign
operations

Changes infair values

Other

Balance asof February
28, 2018

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Balance asof March 1,
2017

Changesthat affectcash flows

Millions of yen
Current borrowings

55,430(28,010)

(50)

–

–

17,86045,230Commercial papers

33,799(32,799)

–

–

–

–

1,000

Non-current borrowings

89,782

16,440

(200)

(1)

–

(17,860)

88,160

Bonds

26,93922,838

–

–

–

34

49,812

Lease obligations

3,756

(723)

–

–

–

2,260

5,293

Derivatives

102

60

–

–

(90)

–

72

Total

209,811(22,193)

(250)

(1)

(90)

2,294

189,569

Derivatives are held in order to hedge interest rate fluctuation risk and foreign exchange fluctuation risk.

33

(2)Non-cash transactions
Property, plant and equipment and investment property acquired through finance leases are as follows:
Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

Millions of yen

Millions of yen

Property, plant and equipment and investment property
acquired through finance leases

1,077

2,058

19 Bonds and Borrowings(1)Breakdown of financial liabilities
The breakdown of“bonds and borrowings”and“other financial liabilities”is as follows:
IFRS Transition
Date(March 1, 2016)

As of February
28, 2017

As of February
28, 2018

Averageinterest rate
(Note 1)Millions of yen

Millions of yen

Millions of yen%

Current borrowings

58,35055,43045,230Commercial papers

30,79833,799

1,000

–

–

–

12,000–––Non-current borrowings

82,97089,782

88,1600.52

Bonds (Note 2)

26,914

14,93949,812(Note 2)

826

723

693

–

–

Current portion of bonds (Note 2)

Current lease obligations

Repayment deadline

0.51

–

From March 2019 toNovember 2027
(Note 2)

Non-current lease obligations

2,469

3,033

4,599

–

–

Guarantee deposits received

31,88328,715

29,133

–

–

Other

32,647

31,16430,624

–

–

Total

266,860

269,588249,254––

Current liabilities

121,971

132,649

77,041––

Non-current liabilities

144,888

136,939

172,213––

Notes:

1.
2.

The average interest rates are weighted-average interest rates based on the contract interest rates and the closing balances for each borrowing.
Summary of issuing conditions of bonds is as follows:(Millions of yen)Company
nameBond name

IFRS Transition Date As of February As of February
Date of issue28, 2017
28, 2018(March 1, 2016)

J. FRONTRETAILING
Co., Ltd.

1st series of
unsecuredbonds

November 16, 2012

12,00012,000J. FRONTRETAILING
Co., Ltd.

3rd series of
unsecuredbonds

August 5, 2015

10,000J. FRONTRETAILING
Co., Ltd.

4th series of
unsecuredbonds

August 5, 2015

J. FRONTRETAILING
Co., Ltd.

5th series of
unsecuredbonds

J. FRONTRETAILING
Co., Ltd.

6th series of
unsecured
bonds

Total

34

Interest rate(%)

Maturity date

–

0.49

November 16, 2017

10,00010,0000.30

August 5, 2020

5,000

5,000

5,000

0.46

August 5, 2022

August 4, 2017––

15,0000.16

August 4, 2022

August 4, 2017––

20,0000.43

August 4, 2027

27,00027,00050,000Agreements on some of borrowings of the Group require(2)Assets pledged as collateral

the maintenance of specific financial ratios and net assets

The Group has pledged corporate properties as collateral

at a certain level.

for borrowings, etc. Secured creditors have the right to

The Group has complied with all the agreements onreceive the payment of their claims prior to otherborrowings.

unsecured creditors with regard to the Group’s properties.
Assets pledged as collateral for borrowings, etc. are as
follows:

(Millions of yen)
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017 As of February 28, 2018

Land

6,620

6,620

5,290

Buildings and structures

10,77910,458

2,638

265

455

855

Other financial assets
Inventories
Total

51

53

–

17,716

17,588

8,784

The corresponding obligations are as follows:(Millions of yen)
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017 As of February 28, 2018

Current borrowings

1,000

500

300

Non-current borrowings

1,625

1,125

825

Trade and other payables

524

430

361

3,149

2,055

1,486

Total

20 Leases
finance lease arrangements and their present value are(1)As lessee
1)Finance lease obligations

as follows:

The total of future minimum lease payments under(Millions of yen)
Minimum lease payments
IFRS
Transition Date
(March 1, 2016)
Due within one year

As of
February 28,
2017

846

867

Present value of minimum lease payments

As ofFebruary 28,
2018
954

IFRS
Transition Date
(March 1, 2016)
826

As of
February 28,
2017
723

As of
February 28,
2018
693

Due after one year through five years

1,288

1,940

2,485

1,212

1,371

1,484

Due after five years

1,572

3,306

5,496

1,256

1,662

3,115

3,295

3,756

5,293

Total
Future finance costs
Present value of lease obligations

3,706

6,115

8,937

411

2,358

3,643

3,295

3,756

5,293

Future minimum lease payments receivable on non-and others in the information service business as acancellable subleases as of February 28, 2018 werelessee.

¥2,782 million. There is no information to be disclosed

Renewal options and purchase options have beenon the IFRS transition date and February 28, 2017.

attached to certain lease agreements. In addition, there

The Group leases system facilities (furniture and fixtures)are no contingent rents payable, no escalation clauses

35

(clause providing for an increase in the lease agreement2)Operating Leases

amount) and no restrictions imposed by lease

Future minimum lease payments under non-cancellable

agreements (such as restrictions related to dividends,

operating leases are as follows:

additional borrowing and additional leases).
(Millions of yen)
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017 As of February 28, 2018

Due within one year

4,567

5,437

5,942

Due after one year through five years

12,094

12,80014,693Due after five years

9,626

9,953

10,791

26,28828,191

31,428

Total

Minimum lease payments and contingent rents under operating lease agreements recognized as expenses are as follows:(Millions of yen)
Fiscal year ended February 28, 2017
Minimum lease payments

17,04015,718687

686

17,727

16,405

Contingent rents
Total

Fiscal year ended February 28, 2018

The Group leases commercial buildings and others as

Sublease payments receivable recognized as revenue

the lessee.

under cancellable or non-cancellable operating leases in

Renewal options and purchase options have been

the fiscal years ended February 28, 2017 and February

attached to certain lease agreements. In addition, there

28, 2018 were ¥10,636 million and ¥9,582 million,

are no escalation clauses (clause providing for an

respectively.

increase in the lease agreement amount) and norestrictions imposed by lease agreements (such as(2)As lessor

restrictions related to dividends, additional borrowing and

1)Finance leases

additional lease).

The information has been omitted due to its

Future minimum lease payments receivable on non-immateriality.

cancellable sublease agreements as of the IFRStransition date, February 28, 2017 and February 28,2)Operating Leases

2018 were ¥3,945 million, ¥3,886 million and ¥2,814

Future minimum lease payments receivable under non-million, respectively.

cancellable operating leases are as follows:(Millions of yen)
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017 As of February 28, 2018

Due within one year

3,210

3,347

4,645

Due after one year through five years

9,475

7,658

9,155

Due after five years

2,756

2,020

5,520

15,442

13,02519,321Total

The Group leases commercial buildings and others as the lessor.
Contingent rents recognized as revenue are as follows:(Millions of yen)
Fiscal year ended February 28, 2017
Contingent rents
Total

36

Fiscal year ended February 28, 2018

27,603

26,87427,603

26,874

21 Trade and Other Payables
The breakdown of trade and other payables is as follows.
These are all classified as financial liabilities measured at amortized cost.
(Millions of yen)
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017 As of February 28, 2018

Notes payable - trade

2,580

2,711

3,318

Accounts payable - trade88,18885,26482,001

Accounts payable - other

25,46324,16926,938Deposits received

27,022

29,562

27,978

Other

2,283

2,001

1,105

145,537

143,711

141,343

Total

The average payment maturity of notes payable - trade, accounts payable - trade and accounts payable - other is 150 to 155
days, 20 to 60 days and 30 to 63 days, respectively.

22 Employee Benefits
The Group has established defined benefit plans (such as a

the board of representatives is elected from among thecorporate pension fund plan and lump-sum retirement benefit

employers.

plan) as employee retirement benefit plans, and certain

Decisions of the board of representatives are made by aconsolidated subsidiaries have adopted defined contribution

majority of members in attendance, but in the case of a tie,plans. In addition, the Group may pay early retirement

the President, who is the Chairperson, has the authority to

payments when employees retire before their normal

make a decision. However, it is stipulated that decisions

retirement date. Certain consolidated subsidiaries haverelated to particularly important matters shall be determined

instituted a retirement benefit trust.

by a majority in excess of the above.

In regard to the corporate pension fund plan, the Group has

The board of representatives holds the authority to makeobligations including paying contributions to the corporate

decisions about all important matters, such as investment

pension fund under the Defined-Benefit Corporate Pension

policies. Actual asset management is conducted by aAct, etc. Directors of the fund have responsibilities including

managing trustee under an investment service agreement,

a duty of loyalty to comply with laws and regulations,and directions from the board of representatives regarding

dispositions made by the Minister of Health, Labour andinvestment in individual securities, etc. are forbidden by laws

Welfare and Director-Generals of Regional Bureaus of Healthand regulations.

and Welfare in accordance with laws and regulations, and

The Company is required to pay contributions to thethe rules of the corporate pension fund and resolutions of thecorporate pension fund and contributions are regularly

board of representatives, and faithfully execute operations

reviewed within the range permitted by laws and regulations.

related to managing and operating funds in the interests ofWhile the Company is obligated to make contributions

the fund. In addition, it is stipulated that directors are

stipulated by the fund into the future, in addition to theseforbidden from entering into any asset management contract

contributions, it also funds a retirement benefit trust on a

aimed at serving the interests of a third party, and rules ofvoluntary basis.

conduct that include forbidding acts that create a conflict ofWith regard to the lump-sum retirement benefit plan, theinterest are clarified.

Company is obligated to pay benefits directly to the

The plan is mainly operated by a corporate pension fund that

beneficiaries. There are no statutory requirements regarding

is independent from the Group. The board of representatives

funding.

comprises the same number of representatives elected fromamong the employers (elected representatives) andrepresentatives elected from among employees (mutuallyelected representatives), and the chairperson (president) of37

(1)Defined benefit plans
The relationship between the present value of the defined benefit obligations and the fair value of the plan assets and theamounts recognized in the consolidated statement of financial position is as follows:(Millions of yen)
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017 As of February 28, 2018

Present value of funded defined benefit obligations

39,39836,68834,605

Fair value of plan assets(42,108)(45,039)(46,994)

Subtotal(2,709)(8,351)(12,388)

Present value of unfunded defined benefit obligations

29,91629,36828,100Liabilities of defined benefit plans

27,20721,017

15,711Retirement benefit liabilities

32,894

31,76029,909Retirement benefit assets

5,687

10,742

14,197

27,20721,017

15,711

Amounts in the consolidated statement offinancial position

Net defined benefit liability or (asset) in the
consolidated statement of financial position

Changes in the present value of the defined benefit obligations are as follows:(Millions of yen)
Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

Present value of defined benefit obligations at beginning of period

69,31566,057

Service cost

2,288

2,181

103

139

Actuarial gains and losses arising from changes in demographic assumptions

(47)

(8)

Actuarial gains and losses arising from changes in financial assumptions

243

(343)

Interest expense
Remeasurements

Past service cost
Benefits paid
Other
Present value of defined benefit obligations at end of period––(5,897)(5,332)50

1366,05762,705

Changes in the fair value of the plan assets are as follows:(Millions of yen)

Fair value of plan assets at beginning of period
Interest revenue

Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

42,10845,039

68

97

4,766

2,945

Remeasurements
Return on plan assets
Contributions by employer

2,046

1,991

Benefits paid

(3,951)(3,080)Other
Fair value of plan assets at end of period

38

–

–

45,03946,994

The fair value of each item of plan assets is as follows:
IFRS transition date (March 1, 2016)
Items of plan assets(Millions of yen)
Assets with quoted market Assets without quoted market
prices in active markets
prices in active markets

Cash and cash equivalents

1,197

Domestic shares
Overseas shares
Jointly operated trusts (shares)

Total

–

1,197

15,598–15,598

3,701

–

3,701

–

616

616

Domestic bonds

381

10,647

11,028Overseas bonds

55

2,008

2,063

Jointly operated trusts(public and corporate bonds)

–

1,711

1,711

General accounts of life insurance companies

–

5,527

5,527

Other
Total

51

612

663

20,984

21,123

42,108

As of February 28, 2017
Items of plan assets
Cash and cash equivalents(Millions of yen)
Assets with quoted market Assets without quoted market
prices in active markets
prices in active markets
518

Total

–

518

Domestic shares

18,553–

18,553

Overseas shares

3,767

–

3,767

–

894

894

Domestic bonds

Jointly operated trusts (shares)

397

12,691

13,089Overseas bonds

48

330

379

Jointly operated trusts(public and corporate bonds)

–

1,526

1,526

General accounts of life insurance companies

–

5,579

5,579

Other
Total

–

731

731

23,286

21,75345,039As of February 28, 2018
Items of plan assets(Millions of yen)
Assets with quoted market Assets without quoted market
prices in active markets
prices in active markets

Cash and cash equivalents

1,058

Domestic shares
Overseas shares
Jointly operated trusts (shares)

Total

–

1,058

19,534–

19,534

4,161

–

4,161

–

1,036

1,036

Domestic bonds

360

12,512

12,872

Overseas bonds

91

200

291

Jointly operated trusts(public and corporate bonds)

–

1,610

1,610

General accounts of life insurance companies

–

5,672

5,672

Other
Total

–

755

755

25,206

21,78846,99439

The Group’s management of plan assets is aimed atplan assets are intended to cover benefits for services

ensuring the necessary income over the long-term toalready rendered, in addition to benefits for services to bereliably make pension and lump-sum payments into therendered in future.

future. Its investment policy to achieve this is

In accordance with the provisions of the Defined-Benefit

fundamentally to make diversified investments after

Corporate Pension Act, the rules of the corporate pension

analyzing characteristics of risks and returns for eachfund stipulate that the amount of contributions shall be

asset and taking into account correlations between

recalculated every three to five years with a record date ofrespective assets.

the fiscal year end, in order to preserve a balanced budget

Specifically, the Group develops the policy asset mix that

into the future. During the recalculation, the basic rates

is the optimal combination now and in the future after

related to contributions (expected interest rates, expectedtaking into account the expected rate of return and risksmortality rates, expected withdrawal rates, expected salaryon eligible investments, and the managing trustee manages

increase indexes, expected number of new participants,

assets accordingly.

etc.) are reviewed, and the appropriateness of the

In regard to plan assets, the status of asset management is

contributions is reverified.

managed primarily by regularly reviewing the financial

The Group plans to pay contributions of ¥1,173 million inposition of the plans, formulating long-term management

the fiscal year ending February 28, 2019.

policies, and monitoring the status of asset allocation.

The weighted average duration of the defined benefit

The Group’s pension funding is determined after taking into

obligations as of February 28, 2018 was 7.24 years.

consideration various factors such as the allowable limit of

The main actuarial assumptions used to calculate thedeductible expenses under tax laws, the funding status ofpresent value of the defined benefit obligations are asplan assets and actuarial calculations. Contributions tofollows:

IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

%

%

%

Discount rate

Mainly 0.1

Mainly 0.2

Mainly 0.2

Anticipated rate of salary increase

Mainly 3.8

Mainly 3.8

Mainly 3.8

Sensitivity analyses are conducted based on changes in

actuarial assumptions may affect the sensitivity analysis.

assumptions that are reasonably possible, as of the end of

If there are no other changes to assumptions, thethe fiscal year.

sensitivity of defined benefit obligations at the end of each

The sensitivity analysis is based on the premise that all

fiscal year to changes in the discount rate is as follows.

actuarial assumptions remain constant other than the

Furthermore, the Group does not expect any changes in

actuarial assumption that is the focus of the analysis, but

the anticipated rate of salary increase.

in reality there is a possibility that changes in other(Millions of yen)
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Changes in discount rate
0.5% increase(2,504)(2,458)(2,169)0.5% decrease

2,828

2,576

2,312

Amounts recognized as retirement benefit expense are as follows:(Millions of yen)
Fiscal year ended February 28, 2018

Service cost

2,288

2,181

Net interest

34

41

Other

141

197

2,464

2,420

Total

40

Fiscal year ended February 28, 2017

(2)Defined contribution plans

retirement payments was ¥196 million in the fiscal year

The amount recorded as expenses in relation to defined

ended February 28, 2017 and included in“other operating

contribution plans is ¥439 million for the fiscal year ended

expense”in the consolidated statement of profit or loss.

February 28, 2017 and ¥470 million for the fiscal year
ended February 28, 2018, and included in“cost of sales”(4)Employee salary expense

and“selling, general and administrative expense”in the

The amount of employee salary expense was ¥77,648

consolidated statement of profit or loss.

million in the fiscal year ended February 28, 2017 and¥77,879 million in the fiscal year ended February 28,(3)Early retirement payments

2018, and included in“cost of sales”and“selling, general

Early retirement payments may be provided when an

and administrative expense”in the consolidated statement

employee retires prior to the normal retirement date.

of profit or loss.

The amount recorded as expenses in relation to early

23 Provisions
The breakdown and changes of provisions are as follows:(Millions of yen)
Asset retirement
obligations
Balance as of March 1, 2016
Increase during the period
Discounted interest expenses for the period
Decrease during the period (use)Decrease during the period (reversal)
Other
Balance as of February 28, 2017
Increase during the period
Discounted interest expenses for the period
Decrease during the period (use)Decrease during the period (reversal)
Other
Balance as of February 28, 2018

Provision for loss
on business liquidation

Total

3,531

3,488

7,019

341

1,862

2,204

45

–

45

(123)

(1,481)(1,605)
(327)

–

(327)

(0)

–

(0)

3,794

3,541

7,335

137

–

137

43

–

43

(386)

(1,889)(2,275)

–

(432)

(432)

(11)

–

(11)

3,577

1,219

4,797

The breakdown of provisions in the consolidated statement of financial position is as follows:(Millions of yen)
IFRS Transition Date
(March 1, 2016)

Current liabilities

1,826

Non-current liabilities
Total(1)Asset retirement obligations

As of February 28, 2017 As of February 28, 2018
2,177

202

5,193

5,158

4,595

7,019

7,335

4,797

related to non-current assets. These expenses are

Asset retirement obligations are recorded at the estimatedexpected to be mainly paid after two to 50 years or moreamount of restoration costs for rented stores, offices, etc.

have passed, and will be affected by future business plans,

for which the Group has obligations to restore to theiretc.

original state at the time when the lease agreement isterminated and costs for removing harmful substances

41

store rebuilding. These expenses are expected to be(2)Provision for loss on business liquidation
An amount of loss is recorded for the cost of store

mainly paid within two years after store closure or

dismantlement, etc. that is expected to be borne in therebuilding, but will be affected by changes in the

future as a result of business liquidation, store closure andsurrounding environment and others.

24 Other Liabilities(1)The breakdown of other liabilities is as follows:(Millions of yen)
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Accrued bonuses

5,913

5,699

5,652

Accrued paid absences

2,679

2,849

2,840

Advances received

3,269

5,554

13,946

Deferred income

5,300

5,137

5,103

Accruals for gift certificates (Note)

22,49023,86625,254

Other accrued expense

7,116

6,127

6,796

Other

10,812

17,011

16,201

Total

57,57966,24375,792Other current liabilities

52,63654,40764,561Other non-current liabilities

4,942

11,836

11,231

Note:

These represent gift certificates issued by Daimaru Matsuzakaya Tomonokai Co., Ltd., a consolidated subsidiary of the Company.

(2)The breakdown of deferred income is as follows:(Millions of yen)
IFRS Transition Date
(March 1, 2016)
Customer loyalty program

5,159

Government grants
Total

As of February 28, 2017

As of February 28, 2018

5,010

4,988

140

127

114

5,300

5,137

5,103

25 Equity and Other Equity Items(1)Capital and share premium
Changes in the number of authorized shares, number of issued shares, and the balances of capital, etc. are as follows:

IFRS transition date (March 1, 2016)
Changes during the period
As of February 28, 2017
Changes during the period
As of February 28, 2018
Note:

42

Number of
authorized shares(Shares)Number of issued
shares(Shares)

Capital(Millions of yen)

Share premium(Millions of yen)

1,000,000,000

268,119,164

30,000209,565

–

–

–

(14)

1,000,000,000

268,119,164

30,000209,551–

2,446,600

1,974

2,313

1,000,000,000

270,565,764

31,974

211,864

All shares issued by the Company are ordinary shares with no restrictions and no par value. Issued shares are fully paid.

(2)Treasury shares
Changes in the number and balance of treasury shares are as follows:
Number of shares (Shares)
IFRS transition date (March 1, 2016)
Changes during the period
As of February 28, 2017
Changes during the period
As of February 28, 2018
Notes:

Amount (Millions of yen)

6,575,238(11,286)(1,644)

4

6,573,594(11,281)2,454,750(3,962)

9,028,344(15,244)

1. The major factor for changes during the fiscal year ended February 28, 2017 was purchase or demand for sale of shares less than one unit.
2. The‌major factor for changes during the fiscal year ended February 28, 2018 was an inclusion of the Company’s shares held by the officer remuneration
BIP trust into the above number of treasury shares.

(3)‌Nature and purposes of share premium and retained

represent the translation differences that occurred whenearnings

consolidating financial statements denominated in a foreign1)Share premium

currency for companies including foreign subsidiaries.

It is stipulated in the Companies Act of Japan“Companies(
Act”), that at least 50% of the payment of

Cash flow hedges

certain issues of common shares shall be credited to

The Group uses derivatives to hedge the risk of fluctuations

capital. The remainder of the payment shall be credited

in future cash flows. Cash flow hedges represent theto legal capital surplus included in share premium. In

effective portion of changes in fair value of derivative

addition, the Companies Act permits, upon approval oftransactions designated as cash flow hedges.

the shareholders meeting, the transfer of amounts fromlegal capital surplus to capital.

Financial assets measured through other comprehensive
income2)Retained earnings

Financial assets measured at fair value through other

Under the Companies Act, 10% of the amount paid ascomprehensive income represent the changes in fair value

dividends from surplus shall be reserved as legal capitalof financial assets measured at fair value through othersurplus (an item of share premium) or legal retained

comprehensive income.

earnings (an item of retained earnings), until the total
amount of legal capital surplus and legal retained

Remeasurements of defined benefit plans

earnings reaches 25% of capital. The legal retained

Remeasurements of defined benefit plans are the effect ofearnings may be used to eliminate or reduce a deficit, ordifference between actuarial assumptions as at the

may be reversed by resolution of the shareholders

beginning of the period and actual results in defined benefit

meeting.

plans and the effect of changes in actuarial assumptions.
They are recognized in other comprehensive income when(4)Nature and purposes of other components of equity
Exchange differences on translation of foreign operations

incurred and immediately transferred from othercomponents of equity to retained earnings.

Exchange differences on translation of foreign operations

43

26 Dividends(1)Dividends paid
Fiscal year ended February 28, 2017
Resolution

Class of shares

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Board of Directors
meeting held on
April 7, 2016

Ordinary shares

3,661

Board of Directors
meeting held on
October 4, 2016

Ordinary shares

Record date

Effective date

14.00

February 29, 2016

May 6, 2016

3,661

14.00

August 31, 2016

November 9, 2016

Record date

Effective dateFiscal year ended February 28, 2018
Resolution

Class of shares

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Board of Directors
meeting held on
April 10, 2017

Ordinary shares

3,661

14.00

February 28, 2017

May 8, 2017

Board of Directors
meeting held on
October 10, 2017

Ordinary shares

4,223

16.00

August 31, 2017

November 8, 2017

Note:	Total amount of dividends resolved at the Board of Directors meeting held on October 10, 2017 includes ¥39 million of dividends paid to the Company’sshares held by the officer remuneration BIP trust.

(2)‌Dividends whose effective date belongs to the following fiscal year
Fiscal year ended February 28, 2017
Resolution

Class of shares

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Board of Directors
meeting held on
April 10, 2017

Ordinary shares

3,661

14.00

Record date

Effective dateFebruary 28, 2017

May 8, 2017

Record date

Effective dateFebruary 28, 2018

May 7, 2018

Fiscal year ended February 28, 2018
Resolution

Class of shares

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

Board of Directors
meeting held on
April 10, 2018

Ordinary shares

5,015

19.00

Note:	Total amount of dividends resolved at the Board of Directors meeting held on April 10, 2018 includes ¥46 million of dividends paid to the Company’s sharesheld by the officer remuneration BIP trust.

44

27 Sales Revenue
The breakdown of sales revenue is as follows:(Millions of yen)
Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

Revenue on sales of goods

380,298

396,658

Revenue on real estate leasing, etc.

13,545

17,156

Revenue on other services

58,662

56,100452,505

469,915Total

28 Other Operating Income
The breakdown of other operating income is as follows:(Millions of yen)

Gain on sales of non-current assets
Gain on sales of shares of subsidiaries and associates
Compensation income

Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

1,953

3,103

–

1,926

975

1,951

1,154

1,985

4,084

8,967

Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

Cost of goods sold214,643

228,875

Personnel expense

16,52917,549Depreciation expense

5,974

7,739

Other
Total

29 Cost of Sales
The breakdown of cost of sales is as follows:(Millions of yen)

Other
Total

2,791

2,815

239,938

256,97945

30 Selling, General and Administrative Expense
The breakdown of selling, general and administrative expense is as follows:(Millions of yen)
Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

Personnel expense

63,51362,989Depreciation and amortization expense

11,31010,944Advertising expense

11,763

10,534

Rent expense

24,821

24,372

Operational costs

8,259

8,148

Other

47,99949,698167,668

166,688

Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

2,051

1,609

Total

31 Other Operating Expense
The breakdown of other operating expense is as follows:(Millions of yen)

Loss on disposals of non-current assets
Impairment loss

774

2,576

Loss on business liquidation

2,155

–

Other

2,274

1,482

7,255

5,668

Total

32 Finance Income and Finance Costs
The breakdown of finance income is as follows:(Millions of yen)
Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

926

758

395

330

Interest income
Financial assets measured at amortized cost
Dividend income
Equity financial assets measured at fair value throughother comprehensive income
Other
Total

31

0

1,353

1,090

Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

1,222

1,065

148

129

1,370

1,194

The breakdown of finance costs is as follows:(Millions of yen)Interest expense
Financial liabilities measured at amortized cost
Other
Total

46

33 Other Comprehensive Income
The amount arising during the period and reclassification adjustments to profit or loss for each item of other comprehensive
income and tax effect are as follows:(Millions of yen)
Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

Financial assets measured at fair value through othercomprehensive income
Amount arising during the period

2,740

4,985

Tax effect(573)(1,521)

Financial assets measured at fair value through othercomprehensive income

2,167

3,464

Amount arising during the period

4,567

3,292

Tax effect(1,662)

(994)

2,905

2,298

Amount arising during the period

(615)

(6)

Reclassification adjustments

203

2

Share of other comprehensive income of entities
accounted for using the equity method

(411)

(3)

4,660

5,758

245

55

–

–

Before tax effect

245

55

Tax effect

(81)

2

164

57

(118)

71

–

(2)

(118)

69

Remeasurements of defined benefit plans

Remeasurements of defined benefit plans
Share of other comprehensive income of entities accounted
for using the equity method

Total items that will not be reclassified to profit or loss
Items that may be reclassified to profit or loss
Cash flow hedges
Amount arising during the period
Reclassification adjustments

Cash flow hedges
Exchange differences on translation of foreign operations
Amount arising during the period
Reclassification adjustments
Before tax effectTax effectExchange differences on translation of foreign operations

–

–

(118)

69

(497)

102

–

–

Share of other comprehensive income of entities accounted
for using the equity method
Amount arising during the period
Reclassification adjustments
Before tax effect

(497)

102

Tax effect

164

(31)

Share of other comprehensive income of entities
accounted for using the equity method

(333)

70

Total items that may be reclassified to profit or loss

(286)

197

Total other comprehensive income

4,374

5,955

47

34 Earnings per Share
Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 201827,052

28,486––

27,052

28,486

261,547,498

261,541,599

Profit attributable to ordinary equity holders of the parent
entity (Millions of yen)
Adjustment to profit
Profit used to calculate diluted earnings per share(Millions of yen)
Average number of ordinary shares during the period(Shares)
Increase in the number of ordinary shares:
Share acquisition rights (Shares)

2,048

–

–

151,779

261,549,546

261,693,378

Basic earnings per share (Yen)103.43108.92

Diluted earnings per share (Yen)103.43108.86

Officer remuneration BIP trust (Shares)
Average number of diluted ordinary shares during theperiod (Shares)

Note:	The calculation of basic earnings per share and diluted earnings per share excludes the number of the Company’s shares owned by the officer remuneration
BIP trust from the average number of ordinary shares during the period because such shares are treated as the Company’s treasury shares.

The overview of potential ordinary shares that are not included in the calculation of diluted earnings per share because they
have no dilutive effect is as follows:
Fiscal year ended February 28, 2017
The Company’s share acquisition rights:
8,500 shares by resolution of the annual shareholders
meeting held on May 25, 2006

Fiscal year ended February 28, 2018
The Company’s share acquisition rights:
N/A

35 Share-Based Payment(1)Stock option plan

Company are equity-settled share-based payment.

1)Details of stock option plan

The exercise period has been set forth in the allotment

The Company has adopted a stock option plan. Stockagreement. If any stock option is not exercised within

options are granted to the Company’s Directors, Audit &that period, the option is forfeited. No vesting conditions

Supervisory Board Members, Executive Officers andhave been attached.

employees in accordance with the content approved at

Details of stock options issued by the Company are as

its shareholders meeting. All stock options issued by thefollows:

No. 5 plan

Grant date

Exercise period

May 25, 2006

From September 3,
2007 to July 14,
2026

Number of stock
options granted(Shares)

Outstanding(Shares)

Exercise price(Yen)

63,0008,500

1Note:	In regard to the stock options for the No. 5 plan, the Company newly granted the stock options granted by Matsuzakaya Co., Ltd. as per the stock transfer
contract entered into on September 3, 2007.

482)The number and weighted average exercise prices of stock options
Fiscal year ended
February 28, 2017
Weighted average
exercise price(Yen)

Number of shares(Shares)
Outstanding at beginning of period

Fiscal year ended
February 28, 2018

8,500

GrantedWeighted average
exercise price(Yen)

Number of shares(Shares)

1

–

–

–

–

–

–

Exercised

8,500

1

–

–

Forfeited

–

–

–

–

Expired

–

–

–

–

Outstanding at end of period

–

–

–

–

Exercisable at end of period

–

–

–

–

Weighted average remaining
contractual life

– years– years

The expiration date and exercise price of unexercised options in relation to stock options issued by the Company are as
follows:

No. 5 plan

Expiration date

Exercise price(Yen)

July 14, 2026

1

Number of shares (Shares)
IFRS Transition Date
(March 1, 2016)

Total

As of February 28,
2017

As of February 28,
2018

8,500

–

–

8,500

–

–

Stock options exercised in the fiscal year ended February 28, 2017 are as follows:
Number of shares exercised

Exercise date

Share price at exercise date(Yen)

No. 5 plan

8,500

May 27, 2016

1,244

Total

8,500

No stock options were exercised in the fiscal year ended February 28, 2018.
(2)Performance-linked share-based payment plancompletion of the Medium-term Business Plan for1)‌Details of performance-linked share-based payment plan

medium- to long-term PS, and in the number of shares

The Company has adopted an officer remuneration BIP

according to the rank at the time of retirement from the(Board Incentive Plan) trust (the“BIP Trust”) as aposition for RS. The consideration for the services

performance-linked share-based payment for officers toreceived is calculated using the fair value of theensure steady execution and progress of the Medium-

Company’s shares on the grant date. The consideration

term Business Plan. The BIP Trust is a system ofis expensed over the vesting period from the grant date,granting points (one point = one share) in accordance

and a corresponding amount is recognized as anwith the officers’rank and level of achievement of theincrease in equity.

Medium-term Business Plan, etc. and distributing theCompany’s shares to officers (in certain cases, the2)‌Number of points granted during the period and weighted

Company’s shares are converted into cash within the

average fair value of the points

trust and cash in the amount equivalent to their

In the measurement of fair value, a calculation is madeconversion value is paid) according to level of annual

based on the market price of the Company’s sharesaccomplishments in performance each year for short-adjusted after taking into account expected dividends.

term PS, according to level of achievement of the

The number of points granted during the period andMedium-term Business Plan (five years) after theweighted average fair value of the points are as follows:49

Fiscal year ended February 28, 2018
Short-term PS
Number of points granted during the period

1.
2.

RS

133,201

90,382

22,584

1,533

1,477

1,477

Weighted average fair value (yen)Notes:

Medium- to long-term PS

PS (Performance Share) means shares granted when a predetermined performance target for a certain period was achieved.
RS (Restricted Stock) means shares granted with restriction on transfer of shares for a certain period established.

(3)Share-based payment expense
The amount recognized as share-based payment expense,

loss, was ¥395 million in the fiscal year ended February
28, 2018.

which is included in the consolidated statement of profit or

36 Financial Instruments(1) Capital management

is the carrying amount after impairment presented in

In order to realize the Group’s vision to“Create and Bring

consolidated financial statements. The Group does not‘New Happiness’to Your Life,”the Group works tohold any properties as collateral or other credit

increase productivity and managerial efficiency as a groupenhancements in regard to exposure to these credit

and conducts capital management with the aim ofrisks.

achieving sustained improvement in corporate value.

The Group considers whether or not there has been a

The Group aims to achieve an optimal balance of debt tosignificant increase in credit risk from the date of initial

equity which takes into consideration the cost of capital.

recognition, and establishes an allowance for credit

Major indicators monitored in the capital management arelosses. Specifically, when there is no significant increase

ROE and D/E ratio.

in credit risk since initial recognition, expected credit

The Group’s, management also monitors and checks theselosses for 12 months are measured as allowance forindicators to maintain sound financial condition andcredit losses.

increase managerial efficiency including effective utilization

On the other hand, when there is a significant increaseof assets.

in credit risk since initial recognition, lifetime expected

Furthermore, the Group is not subject to any material

credit losses are measured as allowance for credit

capital regulations.

losses. Whether credit risk has significantly increased or
not is determined based on changes in default risk.

(2)Financial risk management policy

Regardless of the above, for trade receivables, lease

In the course of its business activities, the Group isreceivables, etc. without a significant financing

exposed to financial risks (credit risk, liquidity risk, foreigncomponent, allowance for credit losses is measured atcurrency risk, and interest rate risk), and engages in risk

an amount equal to lifetime expected credit losses.

management to reduce these financial risks.

In the measurement of these expected credit losses,

The Group uses derivative transactions to avoid foreign

reasonable and supportable information that is available

currency fluctuation risk or interest rate fluctuation risk and,at the fiscal year end is used for past events, current

in accordance with its policy, does not carry out any

situations and projection of future economic conditions

speculative transactions.

such as credit loss experience in past years, status ofdelinquent receivables and financial conditions of1)Credit risk management50

creditors. Expected credit losses on financial assets for

Credit risk is the risk that a business partner will default

which credit risk has not increased significantly andon contractual obligations and cause the Group to incur

trade receivables, etc. without a significant financing

a financial loss.

component are set altogether as a group and collectively

To address this risk, each Group company carries out

assessed based on historical credit losses because they

due date management and balance management forhave largely homogeneous credit risk characteristics.

each business partner and seeks early identification andExpected credit losses on financial assets for which

mitigation of collectability concerns.

credit risk has increased significantly and credit-impaired

The Group’s receivables are from a number of businessfinancial assets are individually assessed, taking into

partners in a wide range of industries and regions.

account historical credit loss experience, future

The Group does not have credit risks overly concentrated

estimated collectible amount and others.

in a single counterparty or a group to which the

If a debtor does not make a payment within 90 days

counterparty belongs.

after the due date, the situation is considered as default.

The maximum exposure to credit risk on financial assets

When financial assets are assessed as fully or partiallyuncollectible and the Group determines, as a result of(i)Changes in allowance for credit losses

credit research, that it is appropriate to write off the

The Group considers whether or not there has been aassets, the Group directly writes off the carrying amountsignificant increase in credit risk from the date of initialof the credit-impaired financial assets.

recognition, and establishes an allowance for credit
losses.
Changes in allowance for credit losses are as follows:(Millions of yen)
12-month
expected credit
lossesLifetime expectedcredit losses(Assessed
collectively)

Balance as of March 1, 2016

81

11

Transfer to lifetime expected credit losses(22)

Transfer to credit-impaired financial assets(46)

Lifetime expectedcredit losses(Assessed
individually)

Credit-impaired
financial assets(Lifetime expectedcredit losses)

2,016

713

–

44

(22)

–

(78)

125

Transfer to 12-month expected credit losses

0

–

(0)

(0)

Changes due to new arising and collectionof financial assets

74

(2)

109

265

Financial assets that were derecognized
during the period

–

–

(5)

–

(0)

–

(40)

(230)

Direct write-off
Changes in model/risk variables

–

–

–

0

Balance as of February 28, 2017

86

9

2,044

851

Transfer to lifetime expected credit losses

(21)

–

47

(25)

Transfer to credit-impaired financial assets

(50)

–

(117)

167

Transfer to 12-month expected credit losses

0

–

(0)

(0)

Changes due to new arising and collectionof financial assets

92

(1)

149

180

Financial assets that were derecognized
during the period

–

(0)

(4)

(9)

Direct write-off

(0)

–

(97)

(231)

Changes in model/risk variables

–

–

–

(0)

Balance as of February 28, 2018

106

8

2,021

932

(ii)‌The carrying amounts of financial assets by risk type (before deducting allowance for credit losses)are as follows:
IFRS Transition Date
(March 1, 2016)

As of February 28,
2017

As of February 28,
2018

Millions of yen

Millions of yen

Millions of yen

Trade and other receivables(12-month expected credit losses)

43,11145,01445,308Trade and other receivables(Lifetime expected credit losses)

74,02877,26079,896

Financial assets whose credit risk has
increased significantly since initialrecognition (Lifetime expected credit
losses)

2,514

2,568

2,551

713

851

961

Credit-impaired financial assets(Lifetime expected credit losses)

2)Liquidity risk management
Liquidity risk is the risk of failure to make payments oncompanies, and securing sufficient liquidity on handthe due date when the Group is required to fulfill its

through commitment line contracts and overdraft

payment obligations for financial liabilities due.

contracts with its main financing banks.

The Group manages liquidity risk with methods such as

The balance of financial liabilities (other than lease

preparing monthly cash flow management plans at all

obligations, etc.) by payment due date is as follows:51(Millions of yen)
IFRS Transition Date
(March 1, 2016)

Carrying
amountDue
Contractualwithin one
amountyear

Due after
one yearthrough
two years

Due after
two years
through
three
years

Due after
three
years
throughfour years

Due after
four years
throughfive years

Due after
five years

Non-derivative financial
liabilities
Trade and other payables

145,537

145,537

145,537

–

–

–

–

–

Current borrowings

58,35058,51958,519

–

–

–

–

–

Commercial paper

30,79830,80030,800

–

–

–

–

–

Non-current borrowings

82,97084,518659

37,341

16,745

11,273

17,264

1,234

Bonds

26,91427,405

112

12,112

53

53

10,038

5,035

Other financial liabilities

64,14564,082

31,826

4,071

3,079

2,346

1,892

20,865Derivative financial liabilities
Forward exchange

79

79

79

–

–

–

–

–

Interest rate swaps

305

305

102

95

56

52

–

–

409,102411,249

267,637

53,62019,935

13,72529,195

27,135

Total
Note:

Receivables and liabilities resulting from derivative transactions are presented on a net basis.

(Millions of yen)
As of February 28, 2017

Carrying
amountDue
Contractualwithin one
amountyear

Due after
one yearthrough
two years

Due after
two years
through
three
years

Due after
three
years
throughfour years

Due after
four years
throughfive years

Due after
five years

Non-derivative financial
liabilities
Trade and other payables

143,711

143,711

143,711

–

–

–

–

–

Current borrowings

55,43055,53255,532

–

–

–

–

–

Commercial paper

33,79933,80033,800

–

–

–

–

–

Non-current borrowings

89,782

91,797483

18,48713,016

19,508

11,33628,965

Bonds

26,93927,293

12,112

53

53

10,03823

5,011

Other financial liabilities

59,73760,01830,661

3,709

3,361

2,189

2,691

17,405Derivative financial liabilities
Interest rate swaps
Total
Note:

141

141

67

39

35

–

–

–

409,543

412,295

276,368

22,28916,466

31,735

14,051

51,382

Due after
one yearthrough
two years

Due after
two years
through
three
years

Due after
three
years
throughfour years

Due after
four years
throughfive years

Due after
five years

–

–

–

–

–

Receivables and liabilities resulting from derivative transactions are presented on a net basis.

(Millions of yen)
As of February 28, 2018

Carrying
amountDue
Contractualwithin one
amountyear

Non-derivative financial
liabilities
Trade and other payables

141,343

141,343

141,343

Current borrowings

45,23045,29645,296

–

–

–

–

–

Commercial paper

1,000

1,000

1,000

–

–

–

–

–

Non-current borrowings

88,16090,144443

13,085

19,576

11,404

7,694

37,940

Bonds

49,812

51,115164

164

10,149134

20,11020,391Other financial liabilities

59,68059,66630,109

4,033

2,989

3,124

1,768

17,641

24

24

24

–

–

–

–

–

Derivative financial liabilities
Forward exchangeInterest rate swaps
Total
Note:

52

52

52

27

25

–

–

–

–

385,304

388,643

218,408

17,30832,715

14,66329,57375,972

Receivables and liabilities resulting from derivative transactions are presented on a net basis.

If funds are temporarily insufficient for the payment of trade payables, etc., the Group procures funds with the following
financing methods. Fund procurement methods and the status of procurement in each fiscal year were as follows:(Millions of yen)
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Commitment line
Used

–

–

23,20025,20025,20023,20025,20025,200

8,420

8,320

9,220

138,410142,210140,710

146,830

150,530

149,930Used

30,80033,8001,000

Unused39,20036,20069,00070,00070,00070,000

UnusedTotal–

Overdraft limit
Used
UnusedTotal
Commercial paper issuance limit

Total3)Foreign currency risk management

financial instruments by type are as follows.

The Group conducts transactions denominated in foreign
currencies and is exposed to the risk of fluctuations in(Other financial assets (non-current), and other financial

exchange rates of foreign currencies against theliabilities (non-current))

Japanese yen, but this has immaterial effect on profit

The fair value of listed shares is measured based on

before tax.

market prices at the last date of a fiscal year. The fairvalue of unlisted shares is measured by discounted4)Interest rate risk management

future cash flows, valuation model based on profit and

The Group is exposed to various interest rate fluctuation

net assets, comparable company analysis method or therisks in the course of its business activities. Particularly,

like.

fluctuations in interest rates greatly affect borrowing

Other financial assets or other financial liabilities

costs.

measured at amortized cost mainly consist of lease andTo mitigate such interest rate fluctuation risks, the Groupguarantee deposits paid or lease and guarantee deposits

hedges the risks by conducting interest rate swap

received, and their fair value is measured at present

transactions and other means. Payment of interest hasvalue calculated by discounting future cash flows at thean immaterial effect on the Group’s profit or loss.

current market interest rates or the like.

(3)Fair value of financial instruments
1)Calculation method of fair value(Bonds and borrowings)
Bonds and borrowings are mainly measured by present(Cash and cash equivalents, trade and other receivables,

value obtained by discounting future cash flows atother financial assets (current), trade and other payables,interest rates that would be charged for a new similar

and other financial liabilities (current))

borrowing

The carrying amount is used as the fair value of these
instruments, given that the fair value is almost the same2)Financial instruments measured at amortized cost

as the carrying amount, as they are mostly settled in a

The carrying amounts and fair values of financial

short period of time.

instruments measured at amortized cost are as follows.

Derivatives are measured as financial assets or liabilities

Financial instruments measured at fair value andmeasured at fair value through profit or loss based on

financial instruments whose carrying amount closely

prices presented by the counterparty financial

approximates fair value are not included in the following

institutions. Carrying amount and fair value of major

table.

53

IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Carrying
amountFair value

Carrying
amountFair value

Carrying
amountFair value

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Other financial assets (non-current)

63,517

71,40365,34273,78265,93770,441

Total

63,517

71,40365,34273,78265,93770,441

Borrowings

141,320

142,551

145,212145,802

133,390

133,551

Bonds

26,914

27,17526,93927,05749,81250,168Other financial liabilities (noncurrent)

34,801

34,824

32,11432,09434,192

34,179203,037

204,551204,266

204,954

217,395

217,899

Financial assets:

Financial liabilities:

Total

Level 3: ‌Fair value that is determined using a valuation

3) Fair value measurement

technique including unobservable inputs

In regard to financial instruments measured at fair value,
the fair value amounts measured are categorized into
three levels, from Level 1 to Level 3, in accordance with

The fair value of financial instruments measured at fairthe observability and materiality of inputs used invalue is as follows.

measurement.

Any transfer between levels in the fair value hierarchy is

Level 1: ‌Market prices for identical assets or liabilities inrecognized on each reporting date. In the fiscal years
ended February 28, 2017 and February 28, 2018, there

active markets
‌ air value, other than Level 1, that is determined
Level 2: F

was no transfer between Level 1, Level 2 and Level 3.

by directly or indirectly using an observable price
IFRS Transition Date (March 1, 2016)
Financial assets measured at fair value on a recurring basis
Level 1

Level 2

Level 3

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

–

67

–

67

Assets:Financial assets measured at fair value through profit
or loss
Derivative financial assets
Financial assets measured at fair value through othercomprehensive income
Other financial assets (non-current)

11,970–18,45330,423

11,97067

18,45330,491

Derivative financial liabilities

–

384

–

384

Total

–

384

–

384

Total
Liabilities:
Financial liabilities measured at fair value throughprofit or loss

54

As of February 28, 2017
Financial assets measured at fair value on a recurring basis
Level 1

Level 2

Level 3

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

–

70

–

70

Assets:Financial assets measured at fair value through profit or loss
Derivative financial assets
Financial assets measured at fair value through othercomprehensive income
Other financial assets (non-current)

9,967

–

19,531

29,4989,967

70

19,531

29,568Derivative financial liabilities

–

141

–

141

Total

–

141

–

141

Level 1

Level 2

Level 3

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

–

–

–

–

11,276–22,802

34,07911,276–22,802

34,079Total
Liabilities:
Financial liabilities measured at fair value throughprofit or loss

As of February 28, 2018
Financial assets measured at fair value on a recurring basis

Assets:Financial assets measured at fair value through profit or loss
Derivative financial assets
Financial assets measured at fair value through othercomprehensive income
Other financial assets (non-current)
Total
Liabilities:
Financial liabilities measured at fair value throughprofit or loss
Derivative financial liabilities

–

77

–

77

Total

–

77

–

77

Level 1

Level 2

Level 3

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

6,732

–

–

6,732

6,732

–

–

6,732

Financial assets measured at fair value on a non-recurring basis

Assets:Assets held for sale
Total
Note:

For reasons for the measurement, please refer to note“11. Assets Held for Sale.”4)‌Changes, from the beginning to the end of the period, in
financial instruments whose fair value measurement isfinancial instruments whose fair value measurement iscategorized within Level 3 are as follows:

categorized within Level 3
Changes, from the beginning to the end of the period, in55

Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

Millions of yen

Millions of yen

Balance at beginning of period

18,453

19,531Other comprehensive income (Note)

891

3,124

Purchase

191

179

Sale

(5)

(26)

Other

–

(7)

19,53122,802

Balance at end of period

Note:	Gains or losses included in other comprehensive income relate to financial assets measured at fair value through other comprehensive income as of thereporting date. These gains or losses are included in“financial assets measured at fair value through other comprehensive income”in the consolidated
statement of comprehensive income.

Financial instruments classified as Level 3 principally

significant decrease (increase) in the fair value.

consist of unlisted shares. Fair value of unlisted shares ismeasured by the Group’s department in charge using the(4)‌Fair value hierarchy for assets and liabilities that are notlatest figures available for each quarter in accordance withmeasured at fair value but of which fair value has been

the Group’s accounting policies and others, and reported

disclosed

together with the basis for changes in fair value toFair values of financial instruments measured at amortizedsuperiors and to management where necessary.

cost are as follows.

Illiquidity discount that is a significant unobservable input

Financial instruments measured at fair value and financial

used for the measurement of fair value classified as Level

instruments whose carrying amount closely approximates

3 in the fair value hierarchy is 30% in the calculation.

their fair value are not included in the following tables.

A significant increase (decrease) in this input will cause a(Millions of yen)
IFRS Transition Date (March 1, 2016)

Level 1

Level 2

Level 3

Total

Financial assets:
Financial assets measured at amortized cost
Other financial assets (non-current)

–

3,747

67,65571,403–

3,747

67,65571,403

Borrowings–

142,551–

142,551

Bonds–

27,175–27,175–2,469

32,35534,824–

172,196

32,355204,551

Total
Financial liabilities:
Financial liabilities measured at amortized cost

Other financial liabilities (non-current)
Total



(Millions of yen)
As of February 28, 2017

Level 1

Level 2

Level 3

Total

Financial assets:
Financial assets measured at amortized cost
Other financial assets (non-current)

–

4,450

69,33173,782–4,450

69,33173,782

Borrowings–

145,802–145,802

Bonds–

27,057–

27,057

Other financial liabilities (non-current)

–

3,033

29,06032,094–

175,894

29,060204,954

Total
Financial liabilities:
Financial liabilities measured at amortized cost

Total

56



(Millions of yen)
As of February 28, 2018

Level 1

Level 2

Level 3

Total

Financial assets:
Financial assets measured at amortized cost
Other financial assets (non-current)

–

5,464

64,97670,441–

5,464

64,97670,441

Borrowings–

133,551–

133,551

Bonds–

50,168–50,168–4,599

29,58034,179–188,319

29,580217,899

Total
Financial liabilities:
Financial liabilities measured at amortized cost

Other financial liabilities (non-current)
Total(5)Financial assets measured at fair value through other1)Fair value of securities

comprehensive income

In regard to investments in equity instruments designated

The Group designates investments in equity instruments

as financial assets measured at fair value through other

held in order to maintain and strengthen businesscomprehensive income, the fair value of the main

relationships as financial assets measured at fair value

securities is as follows:

through other comprehensive income in the light of theholding purpose.
IFRS Transition Date (March 1, 2016)
(Millions of yen)
Securities

AmountAsahi Properties Inc.

5,167

Takenaka Corporation

5,156

Ono Pharmaceutical Co., Ltd.

2,196

Mitsubishi UFJ Financial Group, Inc.

1,136

Toho Gas Co., Ltd.

877

Kyushu Kangyo Co., Ltd.

861

Misonoza Theatrical Corporation

716

Chunichi Shimbun Co., Ltd.

709

OSAKA GAS CO., LTD.

667

Wacoal Holdings Corp.

626

As of February 28, 2017(Millions of yen)
Securities

AmountAsahi Properties Inc.

5,608

Takenaka Corporation

5,070

Misonoza Theatrical Corporation

1,028

Toho Gas Co., Ltd.

900

Kyushu Kangyo Co., Ltd.

850

Shiseido Company, Limited

751

Chunichi Shimbun Co., Ltd.

739

Mitsubishi UFJ Financial Group, Inc.

733

Wacoal Holdings Corp.

681

OSAKA GAS CO., LTD.

672

57

As of February 28, 2018
(Millions of yen)
Securities

AmountAsahi Properties Inc.

6,427

Takenaka Corporation

6,289

Misonoza Theatrical Corporation

1,810

Chunichi Shimbun Co., Ltd.

920

Nagoya Dome Company, Limited

855

Shiseido Company, Limited

821

Wacoal Holdings Corp.

767

Nagashima Resort Co., Ltd.

761

Mitsubishi UFJ Financial Group, Inc.

757

Nintendo Co., Ltd.

7362)Dividend income(Millions of yen)
Fiscal year ended February 28, 2017

Fiscal year ended February 28, 2018

Investments derecognized during
the period

68

15

Investments held at end of period

326

315

Total

395

330

3)Financial assets measured at fair value through otherperiodic portfolio revisions, management of risk assets

comprehensive income derecognized during the period

and others. The fair value on the date of sale thereof

The Group sells financial assets measured at fair value

and cumulative gain or loss on the sale (before tax) arethrough other comprehensive income for the purpose of

as follows.

(Millions of yen)
Fiscal year ended February 28, 2017

Fiscal year ended February 28, 2018

Fair value on the date of sale

3,194

1,355

Cumulative gain (loss) on sale

1,258

751

4) Transfer to retained earnings(6)Derivatives and hedges

The Group transfers cumulative gain or loss caused by

1)Cash flow hedges

fluctuations in the fair value of financial assets measured

Cash flow hedges are hedges to avoid the risk ofat fair value through other comprehensive income tofluctuations in future cash flows. The Company utilizes

retained earnings when the asset is derecognized. In theforward exchange contracts to hedge fluctuations in cash

fiscal years ended February 28, 2017 and February 28,

flows for forecast transactions, and interest rate swaps and2018, cumulative gain or loss (after tax) in othercurrency swaps to hedge fluctuations in cash flows relatedcomprehensive income transferred to retained earnings

to floating-rate borrowings. Changes in fair value of

were ¥775 million and ¥472 million, respectively.

derivative transactions designated as cash flow hedges arerecognized as other comprehensive income, included inother components of equity, and transferred to profit (loss)
when the hedged item is recognized as profit (loss).

58

The details of hedging instruments designated as cash flow hedges are as follows:
IFRS transition date (March 1, 2016)
Carrying amountWith term
Contract value exceeding one
year

AssetsLiabilities

Line itemin theconsolidated
statementof financial
position

Millions of yen Millions of yen Millions of yen Millions of yen

Changes infair value used
to calculate
the ineffective
portion of thehedge
Millions of yen

Foreign currency risk
Forward exchange
contracts

1,912

–

–

79

Other financial
liabilities–

Currency swaps

300

300

67

–

Other financial
assets–29,28022,820–305

Other financial
liabilities–

Interest rate risk
Interest rate swaps

As of February 28, 2017
Carrying amountWith term
Contract value exceeding one
year

AssetsLiabilities

Line itemin theconsolidated
statementof financial
position

Millions of yen Millions of yen Millions of yen Millions of yen

Changes infair value used
to calculate
the ineffective
portion of thehedge
Millions of yen

Foreign currency risk
Forward exchange
contracts

1,733

–

2

Currency swaps

300

–

67

22,82010,260––

Other financial
assets–Other financial
assets–Other financial
liabilities–

Interest rate risk
Interest rate swaps

141

As of February 28, 2018
Carrying amountWith term
Contract value exceeding one
year

AssetsLiabilities

Line itemin theconsolidated
statementof financial
position

Millions of yen Millions of yen Millions of yen Millions of yen

Changes infair value used
to calculate
the ineffective
portion of thehedge
Millions of yen

Foreign currency risk
Forward exchange
contracts

2,116

–

–

24

Other financial
liabilities–

10,260

4,700

–

52

Other financial
liabilities–

Interest rate risk
Interest rate swaps(7)Transfer of financial assets

not derecognized.

The Group securitizes certain trade receivables by

As of the IFRS transition date, February 28, 2017 anddiscounting bills. However, some of such securitizedFebruary 28, 2018, such transferred assets were recorded

receivables impose an obligation to pay on the Group

in“trade and other receivables”and the amount of money

retrospectively if the debtor does not make a payment.

received arising at the time when the assets wereSince these securitized receivables do not meettransferred as related liabilities was recorded in“bonds andrequirements for derecognition of financial assets, they areborrowings,”at ¥18,150 million each.

59

37 Subsidiaries(1)Subsidiaries
Status of subsidiaries is as follows:
Name

Reportablesegment

Equity ratio (%)
IFRS Transition Date
(March 1, 2016)

As of February
28, 2017

As of February
28, 2018

Daimaru Matsuzakaya Department
Japan
Stores Co. Ltd.

Department StoreBusiness

100.0

100.0

100.0

The Hakata Daimaru, Inc.

Japan

Department StoreBusiness

69.9

69.9

69.9

The Shimonoseki Daimaru, Inc.

Japan

Department StoreBusiness

100.0

100.0

100.0

Kochi Daimaru Co., Ltd.

Japan

Department StoreBusiness

100.0

100.0

100.0

PARCO Co., Ltd.

Japan

PARCO Business

64.9

64.9

64.9

PARCO (SINGAPORE) PTE LTD

Singapore

PARCO Business

64.9

64.9

64.9

NEUVE A Co., Ltd.

Japan

PARCO Business

64.9

64.9

64.9

PARCO SPACE SYSTEMS Co., Ltd. Japan

PARCO Business

64.9

64.9

64.9

PARCO Digital Marketing Co., Ltd. Japan

PARCO Business

64.9

64.9

64.9

JAPAN RETAIL ADVISORS Co., Ltd. Japan

PARCO Business

64.9

64.9

64.9

JFR Card Co., Ltd.

Japan

Credit FinanceBusiness

100.0

100.0

100.0

Daimaru Kogyo, Ltd.

Japan

Other (Wholesale)

100.0

100.0

100.0

Daimaru Kogyo International
Trading (Shanghai) Co., Ltd.

China

Other (Wholesale)

100.0

100.0

100.0

Daimaru Kogyo (Thailand) Co., Ltd. Thailand

Other (Wholesale)

99.9

99.9

99.9

Taiwan Daimaru Kogyo, Ltd.

TaiwanOther (Wholesale)

100.0

100.0

100.0

J. Front Design & Construction
Co., Ltd.

Japan

Other (Designand construction
contracting/manufacture andsale of furniture)

100.0

100.0

100.0

Dimples’Co., Ltd.

Japan

Other (Staffing service)

100.0

100.0

100.0

J. Front Foods Co., Ltd.

Japan

Other (Restaurant)

100.0

100.0

100.0

Consumer Product End-Use
Research Institute Co., Ltd.

Japan

Other
(Merchandise
test and quality
control)

100.0

100.0

100.0

Angel Park Co., Ltd.

Japan

Other (Parking)

50.2

50.2

50.2

JFR Service Co. Ltd.

Japan

Other (Leasing/parking management)

100.0

100.0

100.0

JFR Information Center Co., Ltd.

Japan

Other (Information
service)

100.0

100.0

100.0

Daimaru Matsuzakaya Sales
Associates Co. Ltd.

Japan

Other (Commissioned
sales and store
operations)

100.0

100.0

100.0

Daimaru Matsuzakaya Tomonokai
Co., Ltd.

Japan

Other (Specified
prepaid transaction
service)

100.0

100.0

100.0

JFR Online Co. Ltd.

Japan

Other (Direct
marketing)

100.0

100.0

100.0

JFR PLAZA Inc.

TaiwanOther (Retailingof general goods)

90.0

90.0

–

Forest Co., Ltd.

Japan

Other (Direct
marketing)

100.0

100.0

–

Notes:

60

Location

1.
2.
3.

All business operations of JFR Online Co. Ltd. were transferred to Feel Life Inc., a wholly owned subsidiary of Senshukai Co., Ltd. on March 1, 2017.
JFR Plaza Inc. was dissolved on June 30, 2017 and the liquidation was completed as of December 31, 2017.
The Company transferred all shares of Forest Co., Ltd. on August 31, 2017.

(2)Subsidiaries with material non-controlling interests
The Company has subsidiaries with material non-controlling interests. Information on these subsidiaries is as follows:
PARCO Co., Ltd. and companies under its control
Fiscal year ended February 28, 2017
Location

Non-controlling interestsin subsidiaries (%)

Japan

Profit (loss) distributed to
non-controlling interests(millions of yen)

35.1

2,884

Accumulated noncontrolling interests(millions of yen)
41,822

Dividends paid to noncontrolling interests(millions of yen)
746

Fiscal year ended February 28, 2018
Location

Non-controlling interestsin subsidiaries (%)

Japan

Profit (loss) distributed to
non-controlling interests(millions of yen)

35.1

2,748

Accumulated noncontrolling interests(millions of yen)
43,744

Dividends paid to noncontrolling interests(millions of yen)817

Condensed financial statements before elimination of intragroup transactions including goodwill and consolidation adjustments
at the time of acquisition are as follows:
IFRS Transition Date (March 1, 2016)
(Millions of yen)
Cash and cash equivalents

6,584

Other current assets

16,338Non-current assets other than goodwill

212,691

Goodwill

44

Total assets

235,659

Current liabilities

52,627

Non-current liabilities

69,423

Total liabilities

122,051

Fiscal year ended February 28, 2017(Millions of yen)
Cash and cash equivalents

10,522Other current assets

23,025

Non-current assets other than goodwill

215,248

Goodwill

10

Total assets

248,806

Current liabilities

54,636

Non-current liabilities

73,568

Total liabilities

128,205

Sales revenue

93,780

Profit (loss)

8,795

Comprehensive income

9,124

Net cash flows from (used in) operating activities

7,690

Net cash flows from (used in) investing activities(4,961)

Net cash flows from (used in) financing activities

1,210

Net increase (decrease) in cash and cash equivalents

3,939

61

Fiscal year ended February 28, 2018
(Millions of yen)
Cash and cash equivalents

12,464

Other current assets

26,781

Non-current assets other than goodwill

222,590

Goodwill–

Total assets

261,835

Current liabilities

52,514Non-current liabilities

83,010Total liabilities

135,524

Sales revenue

92,621

Profit (loss)

7,809

Comprehensive income

8,045

Net cash flows from (used in) operating activities

21,386

Net cash flows from (used in) investing activities(11,552)

Net cash flows from (used in) financing activities(7,897)

Net increase (decrease) in cash and cash equivalents

1,936(3)Transfer of subsidiaries
The Group transferred all shares of Forest Co., Ltd. on

subsidiaries due to sale of the shares, and relationship

August 31, 2017 to EDION Corporation.

between consideration received and balance of revenue

Major components of assets and liabilities at the time ofwith expense due to the sale are as follows:

loss of control over companies that are no longer
(Millions of yen)
Fiscal year ended
February 28, 2017
Components of assets at the time of the loss of control–

Current assets

–

2,772

Non-current assets–

396

Components of liabilities at the time of the loss of control–

Current liabilities

–

2,573

Non-current liabilities–

204

Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

Cash consideration received

–

3,311

Collection of loans receivable

–

(789)

Expenses incidental to the sale of shares

–

(130)

Of assets at the time of the loss of control, cash and cash equivalents

–

(443)

Additional acquisition of shares

–

(107)

Proceeds from sale of subsidiaries

–

1,839



62

Fiscal year ended
February 28, 2018

(Millions of yen)

38 Related Parties
the note has been omitted because there were no(1)Transactions with related parties
With regard to transactions with related parties (excluding

significant transactions, etc.

those eliminated in the consolidated financial statements),(2)Remuneration for key management personnel
Description of the remuneration for Directors and other key management personnel of the Group is as follows:(Millions of yen)
Fiscal year ended
February 28, 2017

Fiscal year ended
February 28, 2018

Officer remuneration

2,179

2,127

Retirement benefit

2

1

Share-based payment

–

395

2,182

2,525

Total

39 Commitments
Commitments related to expenditures after the reporting date are as follows:(Millions of yen)
IFRS Transition Date
(March 1, 2016)

Purchase of property, plant and equipment

As of February 28, 2018

2,473

1,039

28,462

–

890

583

2,473

1,929

29,045Purchase of investment property
Total

As of February 28, 201740 Contingent Liabilities
Amount of guarantee obligations
The Group has provided guarantee for its employees’transactions with financial institutions as follows:(Millions of yen)
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

As of February 28, 2018

Debt guarantees for third parties

77

63

–

Debt guarantees for employees

11

11

10

88

75

10

Total

41 Subsequent Events
No items to report.

42 First-Time Adoption
The Group disclosed the consolidated financial statements(1)Exemption in IFRS 1

under IFRSs from the fiscal year ended February 28, 2018.

In principle, IFRSs require companies adopting IFRSs for

The most recent consolidated financial statements prepared

the first time (first-time adopters) to apply standardsin accordance with Japanese GAAP are those for the fiscal

required by IFRSs retrospectively. However, for some ofyear ended February 28, 2017, and the date of transition to

the standards required under IFRSs, IFRS 1 specifies

IFRSs is March 1, 2016.

standards for which the exemption is applied mandatorily
and those for which the exemption is applied voluntarily.
The effect of the application of these exemptions was63adjusted in retained earnings and other components ofUnder IFRS 1, an entity is recommended to apply IFRS

equity as of the date of transition to IFRSs.

2“Share-based payment”(hereinafter“IFRS 2”) to share-

The major items of exemption adopted by the Group in

based payments granted on and after November 7, 2002transitioning from Japanese GAAP to IFRSs are as follows:

and vested before the date of transition to IFRSs, though・ Business combinations

it is not mandatory. The Group elected not to apply IFRSFirst-time adopters are permitted to elect not to apply
IFRS 3 retrospectively to business combinations that
occurred prior to the date of transition to IFRSs. The

2 to share-based payments vested before the date oftransition.
・ ‌Leases

Group elected to apply this exemption and did not apply

Under IFRS 1, a first-time adopter may evaluate whether

IFRS 3 retrospectively to business combinations thatan arrangement contains a lease or not at the date ofoccurred before the date of transition to IFRSs.

transition to IFRSs. The Group adopts this exemption

Consequently, the amount of goodwill arising fromand evaluates whether an arrangement contains a leasebusiness combinations before the date of transition isor not based on facts and circumstances existing at thatbased on the carrying amount as of the date of transition
under Japanese GAAP. The Group performed andate.
・ ‌Decommissioning liabilities included in the cost of

impairment test on goodwill at the date of transition

property, plant and equipment

regardless of whether there was any indication that the

For liabilities related to obligations for decommissioning,

goodwill might be impaired.

etc. that are included in the cost of property, plant and・ Deemed costequipment, IFRS 1 permits an entity to choose either the

IFRS 1 permits an entity to measure items of property,

method where retrospective application is made from theplant and equipment, investment property and intangible

time when obligations for decommissioning, etc. initiallyassets at the date of transition to IFRSs at their faira r i s e , o r t h e m e t h o d w h e r e t h e o b l i g a tio n s fo r

value and use that fair value as deemed cost at that

decommissioning, etc. are measured at the date ofdate. The Group uses the fair value at the date oftransition.

transition to IFRSs as deemed cost at the date of

The Group has chosen the method where obligations fortransition to IFRSs for certain items of property, plant

decommissioning, etc. included in the cost of property,

and equipment and investment property.

plant and equipment are measured at the date of・ ‌Exchange differences on translation of foreign
operationstransition.
・ ‌Borrowing costs

IFRS 1 permits an entity to elect the cumulative amount

IFRS 1 permits an entity to commence capitalization ofof exchange differences on translation of foreign

borrowing costs relating to qualifying assets at the date

operations to be deemed to be zero at the date ofof transition to IFRSs. The Group has adopted thistransition to IFRSs. The Group elected to deem

exemption and continues to expense borrowing costs forcumulative exchange differences on translation of foreign

construction projects that were started and finishedoperations as zero at the date of transition to IFRSs.

before the date of transition.

・ ‌Designation of financial instruments recognized prior to

For borrowing costs for construction projects that weredate of transition

started before the date of transition and are in progress

IFRS 1 permits an entity to determine the classification

on and after the date of transition, the Group expenses

under IFRS 9 on the basis of the facts andthe borrowing costs incurred before the date of transition,

circumstances that exist at the date of transition, rather

and capitalizes those incurred on and after the date ofthan the facts and circumstances at the initialtransition in accordance with IAS 23 Borrowing Costs.

recognition. In addition, an entity is permitted todesignate changes in fair value of equity financial assets

IFRS 1 prohibits retrospective application of IFRSs forcomprehensive income based on the facts andestimates, derecognition of financial assets and financial

circumstances that exist at the date of transition.

liabilities, hedge accounting, non-controlling interests, and

The Group has determined the classification under IFRS

classification and measurement of financial assets. The

9 based on the facts and circumstances that existed at

Company has prospectively applied IFRSs for these items

the date of transition and designated certain equityfrom the date of transition.

financial assets as financial assets measured throughReconciliations that are required to be disclosed under theother comprehensive income.

first-time adoption of IFRSs are as follows:・ ‌Share-based payment

64(2)Mandatory exceptions of IFRS 1

as financial assets measured through otherReconciliation of equity as of March 1, 2016 (IFRS Transition Date)Line items under Japanese
GAAP

Japanese
GAAP

Reclassification

Differences inrecognition andmeasure-ment

IFRSs

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Notes

Line items under IFRSs

AssetsAssetsCurrent assets

Current assets

Cash and deposits

30,039(1,891)

1

28,149(1)

Cash and cash
equivalents

Notes and accounts
receivable - trade

68,04930,606

18,889117,545(2), (3)(4), (5)Trade and otherreceivables

Securities

1,233

4,648

65

5,947

(1), (3)(6)

Other financial assets

Inventories

28,205–(352)

27,853(4)

Deferred tax assets

11,671(11,671)

–

–

Other

41,865(33,537)

(215)

8,112

Allowance for doubtful accounts
Total current assets(7)(2), (6)Other current assets

(173)

173

–

–

180,890(11,671)

18,389187,608(3)

668,651(191,783)(21,492)

455,375(8), (9)Property, plant and equipment–

202,441(22,998)

179,442(8), (9)Investment property

Total current assets

Non-current assets
Property, plant and equipment

Inventories

Non-current assets

Intangible assets
Goodwill
Other

Investment securities

568

–

–

568

(10)

Goodwill

40,876(37,711)

(251)

2,912

(6)

Intangible assets–

26,284(113)

26,171(11)

Investments accounted forusing the equity method

46,98534,125

12,83093,941(3), (6)(11)

Other financial assets

Long-term loans receivable

1,503(1,503)––(6)

Lease and guarantee deposits

61,515(61,515)

–

–

(6)

Deferred tax assets

5,112

4,418

1,474

11,005(7)

Net defined benefit asset

5,687(5,687)

–

–

(6)

Other

9,980

32,640(27,826)

14,794(6)

Allowance for doubtful accounts(2,710)

2,710

–

–

(3)

Total non-current assets

838,170

4,418(58,377)

784,211

Deferred tax assets
Other non-current assets
Total non-current assets

Deferred assets
Bond issuance cost
Total deferred assets
Total assets

85

–

(85)

–

85

–

(85)

–

1,019,146(7,252)(40,073)

971,820(12)Total assets

65Line items under Japanese
GAAP

Japanese
GAAP

Reclassification

Differences inrecognition andmeasure-ment

IFRSs

Notes

Line items under IFRSs

Millions of yen Millions of yen Millions of yen Millions of yen
Liabilities and equity
Liabilities

Liabilities

Current liabilities

Current liabilities

Short-term loans payable

40,21930,79818,13189,148Commercial papers

30,798(30,798)––(5), (13)(13)

Notes and accounts payable - trade

90,76839,275

15,493

145,537(2)

Gift certificates

38,599(38,599)–––

17,943

14,87832,822

8,322

–

0

8,322

Advances received

19,318(19,318)

–

–

(14)

Provision for bonuses

5,709

–

(5,709)–(14)

Provision for directors’
bonuses

204

–

(204)

–

(14)

Provision for sales returns

21

–

(21)

–

(14)

Provision for books unsold

121

–

(121)

–

(14)

Provision for sales
promotion expenses

709

–

(709)

–

(14)

13,913–(13,913)–(14)

Provision for loss on
business liquidation

487

(487)

–

–

(14)

Provision for loss on
stores rebuilding

1,245(1,245)

–

–

(14)

–

1,826

–

1,826

(14)

Other

Other financial liabilities
Income tax payables

52,636 (2), (6), (14)Provisions
Other current liabilities

52,504

604(472)

302,944–

27,351

330,295

Bonds payable

27,000(27,000)––

Long-term loans payable

82,90527,000(19)–

33,7781,224

35,003(6)

Other financial liabilities

Net defined benefit liability

32,707–

187

32,894(15)

Retirement benefit liabilities

Deferred tax liabilities
for land revaluation

1,161

–

(1,161)–(7)

Provision for directors’
retirement benefits

37

–

(37)

–

(14)

Provision for loss on
business liquidation

564

(564)

–

–

(14)

Provision for loss on
stores rebuilding

1,191(1,191)

–

–

(14)

–

4,862

330

5,193

(14)

Provisions

Deferred tax liabilities

89,158(7,252)(23,100)

58,805(7)

Deferred tax liabilities(6), (14)Total current liabilities

Total current liabilities

Non-current liabilities

Other
Total non-current liabilities
Total liabilities

66

Trade and other payables(14)(6), (14)

Income taxes payable

Reserve for gift
certificates

Bonds and borrowings

Non-current liabilities(13)

109,885 (12), (13)40,882(36,886)

946

4,942

275,607(7,252)(21,631)

246,724

578,552(7,252)5,720

577,019

Bonds and borrowings

Other non-current liabilities
Total non-current liabilities
Total liabilities

Line items under Japanese
GAAP

Japanese
GAAP

Reclassification

Differences inrecognition andmeasure-ment

IFRSs

Notes

Line items under IFRSs

Millions of yen Millions of yen Millions of yen Millions of yen
Net assets

EquityCapital stock

30,000––30,000CapitalCapital surplus

209,551

14–

209,565

Share premium

Treasury shares(11,286)––(11,286)

Treasury shares

Subscription rights to shares

14

(14)

–

–

Total accumulated othercomprehensive income(8,537)–

20,153

11,615 (15), (16)Other components ofequityRetained earnings

163,971–(59,355)

104,615

Retained earnings

383,713–(39,202)344,510

Parent56,880–(6,590)50,290Non-controlling interests

Non-controlling interests
Total net assets
Total liabilities and net assets(17)

440,594–(45,793)394,800

Total equity

1,019,146(7,252)(40,073)

971,820

Total liabilities and equity

67

Reconciliation of equity as of February 28, 2017
Line items under Japanese
GAAP

Japanese
GAAP

Reclassification

Differences inrecognition andmeasure-ment

IFRSs

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Notes

Line items under IFRSs

AssetsAssetsCurrent assets

Current assets

Cash and deposits

33,018(1,171)20

31,867(1)

Cash and cash
equivalents

Notes and accounts
receivable - trade

68,99735,32018,384

122,703(2), (3)(4), (5)Trade and otherreceivables

Securities

1,500

4,329

22

5,852

(1), (3)(6)

Other financial assets

Inventories

34,499–(166)

34,332(4)

Deferred tax assets

10,523(10,523)

–

–

(7)

–

1,049

–

1,049

(9)

Assets held for sale(2), (6)Other current assets

Other

44,540(39,778)

701

5,462

Allowance for doubtful
accounts

(249)

249

–

–

Total current assets

192,829(10,523)

18,962201,268(3)
Total current assets

Non-current assets
Property, plant andequipment

Inventories

Non-current assets
684,063(199,752)(24,330)

459,979(8), (9)Property, plant andequipment–

210,410(21,396)

189,013(8), (9)Investment property

Intangible assets
Goodwill

208

–

325

534

(10)

Goodwill

41,438(37,711)

(300)

3,426

(6)

Intangible assets–

26,284(251)

26,033(11)

Investments accounted
for using the equity
methodInvestment securities

45,43733,075

16,327

94,840(3), (6)(11)

Other financial assets

Long-term loans
receivable

1,534(1,534)––(6)

Lease and guarantee
deposits

60,561(60,561)

–

–

(6)

Deferred tax assets

3,695

4,389

889

8,974

(7)

Net defined benefit
asset

10,738(10,738)

–

–

(6)

Other

12,351

37,717(29,071)

20,998(6)

Allowance for doubtful
accounts(2,810)

2,810

–

–

(3)

857,220

4,389(57,808)

803,800

60

–

(60)

–

(60)

–

Other

Total non-current assets

Deferred tax assets

Other non-current assets

Total non-current assets

Deferred assets
Bond issuance cost
Total deferred assets
Total assets

68

60

–

1,050,109(6,133)(38,906) 1,005,069(12)
Total assets

Line items under Japanese
GAAP

Japanese
GAAP

Reclassification

Differences inrecognition andmeasure-ment

IFRSs

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Notes

Line items under IFRSs

Liabilities and equity
Liabilities

Liabilities

Current liabilities

Current liabilities

Short-term loans
payable37,28045,79918,150101,229

Current portion of bonds

12,000(12,000)

–

–

(13)

Commercial papers

33,799(33,799)

–

–

(13)

Notes and accounts
payable - trade87,96437,027

18,719143,711(2)

Gift certificates

38,596(38,596)–––

16,644

14,774

31,419(5), (13)

7,125

–

(7)

7,117

Advances received

24,136(24,136)

–

–

(14)

Provision for bonuses

5,493

–

(5,493)

–

(14)

21

–

(21)

–

(14)

Provision for books
unsold

133

–

(133)

–

(14)

Provision for sales
promotion expenses

445

–

(445)

–

(14)

Reserve for gift
certificates

14,493–(14,493)–(14)

Provision for loss on
business liquidation

1,855(1,855)

–

–

(14)

206

–

(206)

–

(14)

–

2,204

(26)

2,177

(14)

49,015

8,712(3,321)

54,407(2), (6),(14)

312,568–

27,494340,062

Total current
liabilities

Other financial liabilities
Income tax payables

Provision for sales
returns

Other

Trade and other payables(14)(6), (14)

Income taxes payable

Provision for directors’
bonuses

Bonds and borrowings

Provisions
Other current liabilities
Total current liabilities

Non-current liabilities

Non-current liabilities

Bonds payable

15,000(15,000)–

Long-term loans
payable89,72015,0002–

32,944

Net defined benefit
liability

31,605

Deferred tax liabilities
for land revaluation

–

(13)

104,722 (12), (13)Bonds and borrowings(726)

32,217(6)

Other financial liabilities–

154

31,760(15)

Retirement benefit
liabilities

1,100

–

(1,100)

–

(7)

5

–

(5)

–

(14)

Provision for loss on
stores rebuilding

1,712(1,712)

–

–

(14)

–

5,089

68

5,158

(14)

Provisions

Deferred tax liabilities

85,296(6,133)(21,294)

57,868(7)

Deferred tax liabilities

Other

47,262(36,321)895

11,836(6), (14)271,701(6,133)(22,005)

243,562584,269(6,133)

5,488

583,625

Provision for directors’
retirement benefits

Total non-current
liabilities
Total liabilities

Other non-current liabilities
Total non-current
liabilities
Total liabilities

69Line items under Japanese
GAAP

Japanese
GAAP

Reclassification

Differences inrecognition andmeasure-ment

IFRSs

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Notes

Net assets

EquityCapital stock

30,000––30,000CapitalCapital surplus

209,551––

209,551

Share premium

Treasury shares(11,281)–(0)(11,281)

Treasury shares

Total accumulated
other comprehensive
income(5,532)–

18,142

12,610 (15), (16)Other components ofequityRetained earnings

183,598–(55,908)

127,690

Retained earnings

406,336–(37,765)

368,571

Parent59,503–(6,630)52,872

Non-controlling interests

465,839–(44,395)

421,444

1,050,109(6,133)

Non-controllinginterests
Total net assets
Total liabilities and net assets

70

Line items under IFRSs(38,906) 1,005,069(17)

Total equity
Total liabilities and equity

Notes on reconciliation of equity(1)Reclassification of cash and deposits“other”under current assets under Japanese GAAP,Time deposits with deposit terms of more than three

have been reclassified to“other financial assets

months, which were included in“cash and deposits”(current)”under IFRSs, while“investment securities,”

under Japanese GAAP, have been reclassified to“other“long-term loans receivable”and“lease and guarantee

financial assets (current)”under IFRSs.

deposits,”which were presented separately underJapanese GAAP, have been reclassified to“other(2)‌Reclassification of accounts receivable - other andfinancial assets (non-current)”under IFRSs. In addition,accounts payable - other“net defined benefit asset,”which was presented

Accounts receivable - other, which were included inseparately under Japanese GAAP, has been reclassified“other”under current assets under Japanese GAAP,

to“other non-current assets”under IFRSs.

have been reclassified to“trade and other receivables”“Lease obligations,”which were included in“other”under

under IFRSs, while accounts payable - other, which werecurrent liabilities and“other”under non-current liabilities

included in“other”under current liabilities under

under Japanese GAAP, have been reclassified to“otherJapanese GAAP, have been reclassified to“trade andfinancial liabilities (current)”and“other financial liabilities

other payables”under IFRSs.

(non-current),”respectively, under IFRSs.

Items qualifying as levies such as property tax were“Long-term guarantee deposited”and“long-term

recognized at the time of payment under Japanese

accounts payable - other,”which were included in“other”

GAAP. Under IFRSs, they are recognized on the dateunder non-current liabilities under Japanese GAAP, havewhen an obligating event occurs.

been reclassified to“other financial liabilities (noncurrent)”under IFRSs.

(3)‌Reclassification of allowance for doubtful accounts

Land leasehold rights, which were included in“other”“Allowance for doubtful accounts (current),”which wasunder intangible assets under Japanese GAAP, havepresented separately under Japanese GAAP, has been

been reclassified to“other non-current assets”as long-reclassified to be presented on a net basis by directly

term prepaid expenses and are amortized according todeducting the item from“trade and other receivables”

the contractual period under IFRSs. As a result,“otherand“other financial assets (current)”under IFRSs.

non-current assets”as of the date of transition to IFRSs

Likewise,“allowance for doubtful accounts (non-current)”

decreased by ¥25,086 million.

has been reclassified to be presented on a net basis byUnlisted shares, which were recorded on the basis of

directly deducting the item from“other financial assets

acquisition cost under Japanese GAAP, are measured at(non-current).”

fair value under IFRSs.

(4)‌Adjustment to trade receivables and inventories due to(7)‌Reclassification of deferred tax assets and liabilities,

the change of timing of revenue recognition

and review of recoverability of deferred tax assets

With regard to certain sales of goods, which wereSince under IFRSs, all deferred tax assets and liabilities

recognized on a shipping basis under Japanese GAAP,

are to be classified into non-current items irrespective ofsince changes including recognition of revenue at thewhether they are current or non-current, deferred tax

time of delivery of goods were made,“trade and otherassets and liabilities that were recorded in current items

receivables”and“inventories”have been adjusted.

have been reclassified to non-current items. In addition,
upon the adoption of IFRSs, recoverability of all deferred(5)‌Derecognition of financial assets

tax assets has been reviewed.

Since certain assignment of receivables, etc. that met
requirements for extinguishment of financial assets under(8)‌Reclassification of investment property

Japanese GAAP does not satisfy requirements for‘’
Certain fixed assets are reclassfired from‘’property,derecognition of financial assets under IFRSs, the Group

plant and equipment’’to‘’
investment property’’underrecognizes“trade and other receivables”for such

IFRSs.’’

assignment of receivables, and records related liabilities
in“bonds and borrowings (current).”(9)‌Adjustment to the amount of property, plant andequipment and investment property(6)‌Reclassification of and adjustment to other financial

For certain property, plant and equipment and investment

assets and liabilities and other non-current assets

property, the Group elected to apply the exemption

Short-term loans receivable, which were included inwhere fair value as of the date of transition to IFRSs is

71

used as deemed cost. The carrying amount and fair“accrued expenses,”which were presented separately as

value of property, plant and equipment and investment

current liabilities under Japanese GAAP, have been

property for which deemed cost is used were ¥151,973

reclassified to“other current liabilities”under IFRSs,

million and ¥120,049 million, respectively, as of thewhile asset retirement obligations, which were included

date of transition.

in“other current liabilities”and“other non-current

In addition, taxes on the acquisition of non-current

liabilities”under Japanese GAAP, have been reclassified

assets, which were expensed under Japanese GAAP,

to“provisions (current)”and“provisions (non-current)”

are capitalized under IFRSs.

under IFRSs. Since“provision for sales returns,”

In addition, the items that satisfy the classification“provision for books unsold”and“provision for sales

requirements of assets held for sale under IFRS that

promotion expenses,”which were accounted for as

were classified under property, plant and equipment

provisions under Japanese GAAP, cannot be recorded

under Japanese GAAP are presented as“assets held foras provisions under IFRSs, adjustments have been madesale.”

to“inventories”and others for these items. Unused paidabsences, which were not accounted for under Japanese(10)‌Adjustment to the amount of goodwill

GAAP, are recorded in liabilities as“other current

Although goodwill is amortized under Japanese GAAP, itliabilities”under IFRSs.

is not amortized under IFRSs.

In addition, common gift certificates for department
stores nationwide, etc. that can be used at other(11)‌Adjustment to the amount of investments accounted
for using the equity method

companies were accounted for as“gift certificates”and“reserve for gift certificates”under Japanese GAAP.

“Investments accounted for using the equity method,”

However, under IFRSs, they are accounted for as“otherwhich was included in“investment securities”underfinancial liabilities (current),”since they satisfy

Japanese GAAP, is presented separately under IFRSs. In

requirements for financial liabilities.

addition, although goodwill for entities accounted forusing the equity method is amortized under Japanese
GAAP, it is not amortized under IFRSs.

(15)‌Adjustment to retirement benefit liabilities
Under Japanese GAAP, the Group recognized actuarial
gains and losses in other comprehensive income at the(12)‌Transfer of deferred assets

time of occurrence and amortized them by the straight-

Since“bond issuance cost,”which was recorded asline method over a certain number of years within thedeferred assets under Japanese GAAP, is measured ataverage remaining service period of employees, starting

amortized cost using the effective interest method underin the fiscal year during which they occurred. However,

IFRSs, it is included in the effective interest rate.

under IFRSs, the Group shall recognize actuarial gains
and losses in other comprehensive income at the time of(13)‌Reclassification of bonds and borrowings

occurrence, and immediately transfer them in retained“Bonds payable,”“Commercial papers,”“Short-term loans

earnings.

payable”and“long-term loans payable,”which were
presented separately as liabilities under Japanese
GAAP, have been reclassified to“bonds and borrowings”
under IFRSs.

(16)‌Transfer of cumulative exchange differences for foreignsubsidiaries
Upon the first-time adoption of IFRSs, the Group has
elected the exemption set forth under IFRS 1 and(14)‌Reclassification of other current liabilities andadjustment to provisions“Advances received,”“Provision for bonuses”and72

transferred all cumulative exchange differences as of thedate of transition to retained earnings.

(17) Adjustment‌to retained earnings
IFRS Transition Date
(March 1, 2016)

As of February 28, 2017

Millions of yen

Millions of yen

Adjustment to property, plant and equipment and investment property(44,570)(43,356)

Adjustment to intangible assets(25,699)(25,791)

Adjustment to other non-current assets(1,447)(1,018)Adjustment to other current liabilities(9,268)(9,823)Adjustment to retirement benefit liabilities(11,900)(7,849)598

598

Adjustment to exchange differences on translation of foreign operations
Other(2,323)(1,653)(94,611)(88,895)

Adjustments for tax effects

28,85825,925Adjustments for non-controlling interests

6,397

7,060

(59,355)(55,908)

Subtotal

Total

Reconciliations of profit or loss and comprehensive income for the fiscal year ended February 28, 2017 (from March 1, 2016
to February 28, 2017)
Line items under Japanese
GAAP

Japanese
GAAP

Reclassification

Differences inrecognition andmeasure-ment

IFRSs

Notes

Line items under IFRSs

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Net sales

1,108,512–(656,006)

452,505(1)

Sales revenue(1), (2)Cost of sales

Cost of sales(873,727)–

633,788(239,938)

Gross profit

234,785–(22,218)

212,567

Selling, general andadministrative expenses(190,205)(177)

22,714(167,668)

–

6,869

(2,784)–(12,030)

4,774

Gross profit(1), (2)(3), (5)Selling, general andadministrative expense

4,084

(6)

Other operating income(7,255)(2), (6)Other operating expense

Operating income

44,580(5,338)2,485

41,727

Non-operating income

5,596(5,596)––

Operating profit

Non-operating expenses(5,751)

5,751

–

–

(6)

Extraordinary income

3,609(2,325)(1,283)–(6)

Extraordinary losses(7,483)

7,460

23

–

(6)

–

744

609

1,353

(6)

Finance income–(1,181)(189)(1,370)(6)

Finance costs

–

308

589

898

(6)

(4), (6)

Share of profit ofinvestments accounted forusing the equity method

Profit before income taxes

40,550

(177)

2,235

42,608

Income taxes - current(13,577)

13,577––(7)

Income taxes - deferred

3,413(3,413)

–

–

(7)

–

(9,986)(2,179)(12,165)(7)30,386–56

30,443

ProfitProfitProfit before tax

Income tax expense

Profit attributable to ownersof parent

26,950–101

27,052

Profit attributable to:
Owners of parent

Profit attributable to noncontrolling interests

3,435

–

(45)

3,390

Profit attributable to:Non-controlling interests

Profit30,386–56

30,44373

Line items under Japanese
GAAP

Japanese
GAAP

Reclassification

Differences inrecognition andmeasure-ment

IFRSs

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Notes

Other comprehensive
incomeLine items under IFRSs

Other comprehensive
incomeItems that will not bereclassified to profit or loss

Valuation difference
on available-for-salesecurities
Remeasurements ofdefined benefit plans, netof tax

(51)

–

2,218

2,167

(8)

Financial assets measured
at fair value through othercomprehensive income

3,584

–

(679)

2,905

(5)

Remeasurements ofdefined benefit plans

–

(385)

(26)

(411)

Share of othercomprehensive incomeof entities accounted forusing the equity method

3,533

(385)

1,513

4,660

Total items that will not bereclassified to profit or loss
Items that may bereclassified to profit or loss

Deferred gains or losses
on hedges

63

–

100

164

Cash flow hedges

Foreign currencytranslation adjustment

(115)

–

(2)

(118)

Exchange differenceson translation of foreign
operations

Share of othercomprehensive incomeof entities accounted forusing the equity method

Total othercomprehensive income
Comprehensive income

(441)

385

(276)

(333)

Share of othercomprehensive incomeof entities accounted forusing the equity method

(494)

385

(178)

(286)

Total items that may bereclassified to profit or loss

3,039

–

1,334

4,374

Other comprehensive
income, net of tax

33,425–

1,391

34,817

Comprehensive income

Notes to reconciliations of profit or loss andcomprehensive income(1)Adjustment to sales revenue

reward points are granted simultaneously with sales of1)‌Under Japanese GAAP, the amount of transactions

goods, consideration is allocated to goods sold andwhich the Group conducted as a principal and thereward points granted, and revenue of the former isamount of transactions in which the Group was involved

recognized at the time of initial sale and revenue

as an agent are presented as net sales on a gross basis;

recognition for the latter is deferred until the time whenhowever, under IFRSs, transactions considered to be

the reward points are actually exchanged.

those in which the Group was involved as an agent arepresented on a net basis.

(2)Adjustment to levies
Items qualified as levies such as property tax were2)‌The Group has implemented a point program for therecognized at the time of payment under Japanese GAAP.

purpose of encouraging repeated visits to shops andUnder IFRSs, they are recognized on the date when an

shopping by customers. Under Japanese GAAP, revenue

obligation event occurs.

is recognized collectively at the time of sales, and aprovision for the amount that is prepared for future use

74(3)Adjustment to the amount of goodwill

against the unused balance at the end of each reporting

Goodwill is amortized over a certain period of time underperiod is recorded as liabilities. Under IFRSs, when

Japanese GAAP, but it is not amortized under IFRSs.

expense”and“share of profit (loss) of investments(4)‌Adjustment to the amount of investments accounted forusing the equity method

accounted for using the equity method,”for other items

Goodwill for entities accounted for using the equity method

under IFRSs.

is amortized under Japanese GAAP, but it is not amortizedunder IFRSs.

(7)Income tax expense
Although“income taxes - current”and“income taxes deferred”were presented separately under Japanese(5)Accounting of retirement benefit liabilities
Under Japanese GAAP, the Group recognized actuarial

GAAP, these items are presented collectively as“income

gains and losses in other comprehensive income at the

tax expense”under IFRSs.

time of occurrence and amortized them by the straight-line
method over a certain number of years within the average(8)‌Financial assets measured at fair value through otherremaining service period of employees, starting in the fiscal

comprehensive income

year during which they occurred. However, under IFRSs,

Unlisted shares, which were recorded on the basis of

the Group shall recognize actuarial gains and losses inacquisition cost under Japanese GAAP, are measured atother comprehensive income at the time of occurrence,

fair value under IFRSs.

and immediately transfer them in retained earnings.
Reconciliation of cash flows for the fiscal year ended
February 28, 2017 (from March 1, 2016 to February 28,(6)Adjustment to line items
Items presented in“non-operating income,”“non-operating2017)

expenses,”“extraordinary income”and“extraordinary

There are no material differences between the consolidated

losses”under Japanese GAAP are recorded as“financestatement of cash flows that is disclosed in accordance withincome”and“finance costs”for finance-related gains orJapanese GAAP and the consolidated statement of cash

losses, and as“other operating income,”“other operatingflows that is disclosed in accordance with IFRS.

43 Approval of Consolidated Financial Statements
These consolidated financial statements were approved by the President and Representative Executive Officer Ryoichi
Yamamoto on May 21, 2018.
(2)OtherQuarterly financial information, etc. for the fiscal year under review(Cumulative)

First six months

First nine months

114,084

234,510

342,495

469,915

Profit before tax(Millions of yen)

13,66825,91837,727

48,271

Profit attributable to ownersof parent(Millions of yen)

8,720

16,31523,71328,486

Basic earnings per share
(Yen)

33.34

62.38

90.67

108.92First quarter

Second quarter

Third quarter

Fourth quarter

33.34

29.04

28.29

18.25

Sales revenue(Millions of yen)

(Quarterly)
Basic earnings per share(Yen)First three months

Fiscal year under review

75

76