Consolidated Financial Statements
For the year ended February 20, 2018

Nitori Holdings Co., Ltd.

Consolidated Balance Sheet
Nitori Holdings Co., Ltd. and consolidated subsidiaries
As of February 20, 2018ASSETS
Current Assets:
Cash and deposits (Notes 9 and 11)
Notes and accounts receivable-trade (Note 11)
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets (Note 16)
Forward exchange contracts
Other
Allowance for doubtful accounts
Total current assets
Non-Current Assets:
Property, plant and equipment:
Buildings and structures, net (Notes 5 and 17)
Machinery, equipment and vehicles, net (Note 5)
Tools, furniture and fixtures, net (Note 5)
Land (Note 17)
Leased assets, net (Notes 5 and 10)
Construction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets:
Investment securities (Notes 5, 11 and 12)Long-term loans receivable
Guarantee deposits (Notes 5 and 11)
Lease deposits (Note 11)
Deferred tax assets (Note 16)
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

Millions of Yen

Thousands of
U.S. Dollars(Note 2)

2017

2018

2018

¥70,560
18,486
46,520
92
2,354
1,001
15,002
16,174(9)
170,182¥63,339
22,45849,690
56
2,985
5,309
–
20,191–
164,031$593,066
210,282
465,269
529
27,95649,711–
189,055–
1,535,871

103,763
3,899
5,379
126,9232,514
5,615
248,094
13,732

107,258
4,273
6,179
167,153
2,330
4,120
291,315
13,887

1,004,293
40,01057,863
1,565,104
21,82038,5772,727,669
130,036

3,531
856
15,72020,515
2,952
12,239(9)55,804
317,631¥487,814

26,472804
14,813
21,8805,447
11,854(0)81,273
386,476¥550,507

247,865
7,535
138,704
204,870
51,010111,000(1)
760,985
3,618,691$5,154,562

1

Consolidated Balance Sheet
Nitori Holdings Co., Ltd. and consolidated subsidiaries
As of February 20, 2018

Millions of Yen

Thousands of
U.S. Dollars(Note 2)

2017

2018

2018

LIABILITIES AND NET ASSETS
Current Liabilities:
Notes and accounts payable-trade (Notes 5 and 11)
Short-term loans payable (Notes 11 and 21)
Lease obligations (Notes 10 and 21)
Accounts payable-other (Note 11)
Income taxes payable (Note 11)
Deferred tax liabilities (Note 16)
Provision for bonuses
Provision for point card certificates
Provision for special benefits to shareholders
Asset retirement obligations (Note 22)
Other (Note 5)
Total current liabilities¥16,001
625
187
19,291
15,630
564
3,751
1,301
214
44
18,11275,724¥19,607
2,000
187
18,323
17,399
–
3,395
1,625
290
4
20,592
83,425$183,594
18,726
1,751
171,564
162,919–
31,78915,222
2,715
38
192,812781,135

Non-Current Liabilities:
Long-term loans payable (Notes 11 and 21)
Lease obligations (Notes 10 and 21)
Deferred tax liabilities (Note 16)
Provision for directors’ retirement benefits
Net defined benefit liability (Note 14)
Asset retirement obligations (Note 22)
Other (Note 5)
Total non-current liabilities
Total liabilities

–
2,330
3
228
2,634
4,565
7,548
17,31093,035

8,000
2,143
4
228
2,713
4,950
7,373
25,413
108,839

74,906
20,06838
2,143
25,41046,351
69,039237,958
1,019,094

Net Assets (Note 8):
Shareholders’ Equity:
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

13,37016,306361,103(10,188)
380,592

13,37018,232415,108(8,640)438,072

125,194
170,720
3,886,785(80,901)
4,101,800

Accumulated Other Comprehensive Income:Unrealized holding gain (loss) on securities (Note 12)
Unrealized gain (loss) from hedging instruments (Note 13)
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income

884
10,3692,243(396)
13,100

796
(704)
3,105
(279)
2,918

7,461
(6,595)29,081(2,617)27,329940
144
394,778¥487,814

677–
441,668¥550,507

6,339–
4,135,468$5,154,562

Subscription Rights to Shares
Non-controlling Interests
Total net assets
Total liabilities and net assets
See Notes to Consolidated Financial Statements.

2

Consolidated Statement of Income
Nitori Holdings Co., Ltd. and consolidated subsidiarie
For the year ended February 20, 2018

Net Sales
Cost of Sales
Gross profit
Selling, General and Administrative Expenses (Notes 6 and 15)
Operating income
Non-Operating Income:Interest income
Dividends income
Foreign exchange gains
Vending machine income
Gain on sales of goods
Construction revenue from tenants
Facility use revenue
Share of profit of entities accounted for using equity method
Gain on forgiveness of debts
Other
Non-Operating Expenses:
Interest expenses
Foreign exchange losses
Other
Ordinary income
Special Gains:
Gain on sales of non-current assets (Note 6)
Subsidy income
Penalty income
Gain on reversal of subscription rights to shares
Gain on sales of shares of subsidiaries and associates
Other
Special Losses:
Loss on sales and disposal of non-current assets (Note 6)
Penalty for the scrap and build of outlets
Impairment loss (Note 6)
Special retirement expenses
Cancellation penalty
Loss on change in equity
Loss on valuation of investment securities (Note 12)
Other
Income before income taxes
Income Taxes (Note 16):
Current
Deferred
Net Income
Net Income Attributable to:Non-controlling interests
Owners of parent

2017¥512,958
234,684
278,274
192,497
85,776

Millions of Yen
2018¥572,060
257,281314,778
221,400
93,378

Thousands of
U.S. Dollars(Note 2)
2018
$5,356,372
2,409,004
2,947,367
2,073,035
874,331

433
34
102
246
300
147
174
－
－
425
1,865

451
36
－
249
356
36
－
37
206
459
1,833

4,227
339
－
2,339
3,336
339
－
353
1,932
4,302
17,17059－
1978
87,563

69
235
47
351
94,860

651
2,200
443
3,294
888,206

645
80
52
7
－
16
801

201
－
36
49
3,842
－
4,129

1,882
－
339
464
35,982－
38,668

73
148
10
54
190
－
61
4
543
87,822

130
46
5,417
354
－
256
－
－
6,206
92,7831,220
437
50,728
3,322
－
2,404
－
－
58,113868,762

28,565(787)
27,77760,04430,875(2,310)28,56464,219289,093(21,634)
267,458
601,30345¥59,999－¥64,219－$601,303

See Notes to Consolidated Financial Statements.

3Consolidated Statement of Comprehensive Income
Nitori Holdings Co., Ltd. and consolidated subsidiarie
For the year ended February 20, 2018

Net Income
Other Comprehensive Income (Loss):
Unrealized holding gain (loss) on securities
Unrealized gain (loss) from hedging instruments
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income (loss) (Note 7)
Comprehensive Income
Total Comprehensive Income Attributable to:
Owners of parent
Non-controlling interests

2017¥60,044

Millions of Yen
2018¥64,219

Thousands of
U.S. Dollars(Note 2)
2018
$601,303

594
6,204
(57)
(91)
6,649
¥66,694(87)(11,074)862
116(10,182)¥54,037(816)(103,691)
8,077
1,092
(95,338)$505,965¥66,64945¥54,037－$505,965－

See Notes to Consolidated Financial Statements.

4Consolidated Statement of Changes in Net Assets
Nitori Holdings Co., Ltd. and consolidated subsidiaries
For the year ended February 20, 2018
Millions of Yen
Shareholders’ Equity

Common stock Capital surplus

Balance at February 21, 2016
Changes of items during the year
Dividends from surplus
Net income attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Change in ownership interest of parent due totransactions with non-controlling interests
Other
Net changes in items other than those inshareholders’ equity
Total changes of items during the year
Balance at February 21, 2017
Changes of items during the year
Dividends from surplus
Net income attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Change in ownership interest of parent due totransactions with non-controlling interests
Other
Net changes in items other than those inshareholders’ equity
Total changes of items during the year
Balance at February 20, 2018¥13,370¥14,411Retained earnings¥308,854

Treasury stock Total shareholders’ equity－¥13,370

1,894¥16,306

52,249¥361,103

54,004¥415,108

Total accumulated othercomprehensive income¥(305)¥6,450

Subscription rights to shares Non-controlling interests Total net assets(7,749)59,999
(4)
5,102

－
－

－
－
6,204
6,204
¥10,369(57)(57)¥2,243(91)(91)¥(396)

6,649
6,649¥13,100¥1,174

(233)
(233)
¥940

¥98

45
45
¥144

¥330,968

6,461
63,809¥394,778

3,203¥(10,188)

57,348¥380,592

(3)
1,552

(10,273)
64,219(3)
3,412(10,273)
64,219
(3)
3,412

66
58

66
58

58

1,926
¥18,232

Remeasurements ofdefined benefit plans

(4)
3,208

594
594
¥884

¥4,165¥2,301(7,749)59,999
(4)
5,102

66

－
¥13,370¥289

Foreign currencytranslation adjustment¥323,244(10,273)
64,219
1,859

Unrealized holding gain (loss) Unrealized gain (loss) fromon securities
hedging instruments¥(13,392)(7,749)59,999
1,894

Accumulated Other Comprehensive Income

1,548¥(8,640)

57,479¥438,072(87)(11,074)862

116(10,182)

(263)

(144)

(10,590)

(87)
¥796

(11,074)¥(704)

862¥3,105116¥(279)(10,182)¥2,918

(263)
¥677

(144)
¥－

46,889¥441,668

Thousands of U.S. Dollars (Note 2)
Shareholders’ Equity

Common stock Capital surplus

Balance at February 21, 2017
Changes of items during the year
Dividends from surplus
Net income attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Change in ownership interest of parent due totransactions with non-controlling interests
Other
Net changes in items other than those inshareholders’ equity
Total changes of items during the year
Balance at February 20, 2018

$125,194$152,683

Retained earnings$3,381,123

Treasury stock Total shareholders’ equity

18,037$170,720

505,662$3,886,785

Remeasurements ofdefined benefit plans

Total accumulated othercomprehensive income$(3,709)$122,667

Subscription rights to shares Non-controlling interests Total net assets(37)
14,538(96,190)
601,303(37)
31,949

625
549

625
549

14,500$(80,901)

538,200$4,101,800

(816)
(816)
$7,461$97,096$21,004(96,190)
601,303(37)
31,949549$8,277

Foreign currencytranslation adjustment$3,563,599

625－$125,194

Unrealized holding gain (loss) Unrealized gain (loss) fromon securities
hedging instruments$(95,401)(96,190)
601,303
17,411

Accumulated Other Comprehensive Income(103,691)(103,691)$(6,595)

8,077
8,077
$29,081

1,092
1,092
$(2,617)(95,338)(95,338)$27,329$8,809(2,470)(2,470)$6,339$1,350(1,350)(1,350)$－$3,696,426(99,158)
439,042$4,135,468

See Notes to Consolidated Financial Statements.

5Consolidated Statement of Cash Flows
Nitori Holdings Co., Ltd. and consolidated subsidiarie
For the year ended February 20, 201

Millions of Yen

Thousands of
U.S. Dollars(Note 2)

2017

2018

2018

Cash Flows from Operating Activities:
Income before income taxes
Depreciation and amortization
Impairment loss
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuse
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for point card certificates
Loss (gain) on sales of shares of subsidiaries and associates
Interest and dividends income
Interest expenses
Share of (profit) loss of entities accounted for using equity method
Penalty for the scrap and build of outlets
Loss (gain) on sales and disposal of non-current assets
Loss (gain) on change in equity
Subsidy income
Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trad
Increase (decrease) in accrued consumption taxes
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Payment of penalty for the scrap and build of outlets
Income taxes paid
Income taxes refund
Net cash provided by operating activitie¥87,822
12,312
10
1
733
266
270
－
(468)
59
－
148
(571)
－
(80)
61
(1,816)(3,742)
1,409
2,447
470
99,334
465
(56)
(15)
(29,311)7,512
77,930¥92,783
13,030
5,417
(19)
(355)
202
324
(3,842)
(487)
69
(37)
46
(70)
256
－
－
(866)
(3,743)
2,544(520)(4,835)99,895
435
(55)
(26)
(30,085)
6,677
76,840$868,762
122,005
50,728(180)(3,333)
1,892
3,034(35,982)(4,567)
651
(353)
437
(661)
2,404
－
－
(8,114)(35,051)
23,823(4,874)(45,275)
935,346
4,078
(517)
(250)
(281,699)
62,525
719,482

Cash Flows from Investing Activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Proceeds from sales of intangible assets
Purchase of short-term and long-term investment securities
Proceeds from sales of short-term and long-term investment securities
Proceeds from sales of shares of subsidiaries and associates
Proceeds from government subsidy
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Payments for lease deposits
Proceeds from collection of lease deposits
Proceeds from guarantee deposits received
Proceeds from lease deposits received
Repayments of lease deposits received
Purchase of long-term prepaid expenses
Payments of loans receivable
Proceeds from collection of loans receivable
Other payments
Other proceeds
Net cash used in investing activities(6,581)
7,361(34,966)
1,708(4,155)
395
－
17
－
291
(1,678)128(2,856)
56
387
1,145
－
(2,103)(1,191)18(26)－(42,047)(6,320)8,372(60,888)292(3,084)－(23,300)
10
4,473
－
(655)
202
(1,696)
280
－
193
(138)
(361)
(170)
38
(11)
13
(82,751)(59,183)
78,394(570,116)
2,736(28,877)－(218,164)93
41,888－(6,135)
1,893(15,883)
2,626
－
1,807
(1,301)(3,381)(1,600)
358
(105)
121
(774,828)6

Consolidated Statement of Cash Flows
Nitori Holdings Co., Ltd. and consolidated subsidiarie
For the year ended February 20, 201

Cash Flows from Financing Activities:
Repayment of long-term loans payable
Proceeds from long-term loans payable
Repayments of lease obligations
Purchase of treasury stock
Cash dividends paid
Proceeds from exercise of stock options
Other payments
Net cash provided by (used in) financing activities
Effect of Exchange Rate Changes on Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at the Beginning of the Year
Cash and Cash Equivalents at the End of the Year (Note 9)

Millions of Yen

Thousands of
U.S. Dollars(Note 2)

2017

2018

2018

(1,504)－(188)(4)(7,753)
3,036－(6,414)(227)
29,24036,794¥66,035(625)
10,000(187)(3)(10,272)
1,822
(77)
655
143
(5,111)
66,035¥60,923(5,852)
93,632(1,757)(37)(96,187)
17,060
(724)
6,134
1,346
(47,865)
618,308$570,443

See Notes to Consolidated Financial Statements.

7

Notes to Consolidated Financial Statements
Nitori Holdings Co., Ltd. and consolidated subsidiaries
For the year ended February 20, 2018

1. Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated financial statements have been prepared based on the accounts maintained by
Nitori Holdings Co., Ltd. (the “Company”) and its consolidated subsidiaries (collectively the “Group”) in
accordance with accounting principles generally accepted in Japan, which are different in certain respects as tothe application and disclosure requirements of International Financial Reporting Standards, and have been
compiled from the consolidated financial statements prepared by the Company as required by the Financial
Instruments and Exchange Act of Japan.
Japanese yen amounts less than a million yen have been rounded down to the nearest million yen, except for per
share data.

2. Basis of Translation
The accompanying consolidated financial statements are expressed in Japanese yen, and solely for theconvenience of the reader, have been translated into United States dollars at the rate of ¥106.80 = U.S.$1, theexchange rate prevailing on February 20, 2018. This translation should not be construed as a representation thatthe amounts shown could be converted into U.S. dollars at such rate.
U.S. dollar amounts less than a thousand dollars have been rounded down to the nearest thousand dollars,
except for per share data.

3. Principles of Consolidation and Accounting for Investments in Associates
1) Scope of consolidation(1) As of February 20, 2018, the Company had 23 consolidated subsidiaries (23 consolidated subsidiaries as ofFebruary 20, 2017).
Names of major consolidated subsidiaries:
Nitori Co., Ltd.
Home Logistics Co., Ltd.
NITORI Taiwan Co., Ltd.
NITORI (CHINA) HOLDINGS Co., Ltd.
Deco Home China Co., Ltd.
NITORI (SHANGHAI) HOME FURNISHING CO., LTD.
NITORI (SHANGHAI) HOME FURNISHINGS SALES CO., LTD.
NITORI (Taicang) Trading & Logistics Co., Ltd.
NITORI USA, Inc.
NITORI FURNITURE VIETNAM EPE
NITORI FURNITURE Ba Ria-Vung Tau Co., Ltd.
NITORI Public Co., Ltd.
HOME DECO Co., Ltd.
and other 10 subsidiaries
Shanghai Liqiao Industrial Co., Ltd., which had been a consolidated subsidiary of the Company, was
excluded from the scope of consolidation as the entire shareholding in the company previously held by Groupwas transferred during the year ended February 20, 2018. Furthermore, the Company passed a resolution atits board of directors meeting held on August 30, 2017 to liquidate P.T. NITORI FURNITURE INDONESIA,
which is a consolidated subsidiary of the Company, and said company is currently in the process ofliquidation.
NITORI (SHANGHAI) HOME FURNISHINGS SALES CO., LTD. was newly included in the scope of
consolidation as it was incorporated during the year ended February 20, 2018.
(2) Names of major unconsolidated subsidiaries
The Company did not have any unconsolidated subsidiaries.

8
FY2017 Nitori Holdings Co., Ltd.

2) Application of equity method(1) As of February 20, 2018, the Company had one associate accounted for using the equity method (none as ofFebruary 20, 2017).
Name of associate accounted for using equity method:
KATITAS Co., Ltd.
KATITAS Co., Ltd. became an associate accounted for using the equity method as the Company acquired its
shares during the year ended February 20, 2018.
(2) Other specific information if deemed necessary about application of equity method
As the associate’s reporting date is different from the balance sheet date of the Company, financial
statements provisionally prepared based on its latest quarterly financial statements have been used.
3) Financial statements of consolidated subsidiaries
The reporting dates of the following consolidated subsidiaries are different from the balance sheet date of theCompany.
NITORI Furniture Co., Ltd. ······························· December 20, 2017
NITORI Taiwan Co., Ltd.
NITORI (CHINA) HOLDINGS Co., Ltd.
Deco Home China Co., Ltd.
NITORI (SHANGHAI) HOME FURNISHING CO., LTD.
NITORI (SHANGHAI) HOME FURNISHINGS SALES CO., LTD.
NITORI (Taicang) Trading & Logistics Co., Ltd.
NITORI USA, Inc.
NITORI FURNITURE VIETNAM EPE
NITORI FURNITURE Ba Ria-Vung Tau Co., Ltd.
NITORI Public Co., Ltd.
and other 7 subsidiaries ·································· December 31, 2017
HOME DECO Co., Ltd. ···································· January 31, 2018
The financial information of the above subsidiaries has been consolidated using their financial statements as of
their respective reporting dates, and necessary adjustments have been made for consolidation purposes to reflect
any significant transactions that occurred between the reporting dates of respective subsidiaries and the date of
the consolidated financial statements.

4. Summary of Significant Accounting Policies
1) Investment securities
The Group has available-for-sale securities. Available-for-sale securities with market quotations are carried at fairvalue with changes in unrealized holding gain or loss, net of the applicable income taxes, included directly in “Net
Assets,” and the cost of securities sold is determined by the gross average method. Available-for-sale securities
without market quotations are stated at cost determined by the gross average method.
2) Inventories
Inventories are stated at the lower of cost or market, cost being determined by the moving-average method.
3) Derivatives
Derivative financial instruments are stated at fair value.
4) Property, plant and equipment (except leased assets)
Depreciation of property, plant and equipment (except leased assets) of the Company and its consolidated domestic
subsidiaries is computed by the declining balance method based on the estimated useful lives of the assets, except forbuildings (excluding facilities attached to buildings) acquired on or after April 1, 1998 and facilities attached to buildings
and structures acquired on or after April 1, 2016, which are depreciated by the straight-line method. Consolidated
overseas subsidiaries apply the straight-line method to their property, plant and equipment. The ranges of estimateduseful lives are as follows:
Buildings and structures
5 to 40 years
Machinery, equipment and vehicles
4 to 12 years
Tools, furniture and fixtures
5 to 10 years

9
FY2017 Nitori Holdings Co., Ltd.

For buildings on fixed term leaseholds, the Company and its consolidated domestic subsidiaries compute thedepreciation using the straight-line method over the lease term assuming no residual value. These lease terms are
principally 20 years.
5) Intangible assets (except leased assets)
Intangible assets are amortized using the straight-line method. Software for internal use is amortized using thestraight-line method over an estimated useful life of 5 years.
6) Leased assets
Leased assets under finance lease transactions are depreciated to a residual value of zero by the straight-line
method using the contract term as the useful life.
Finance lease transactions that do not transfer ownership to the lessee, commencing on or before February 20,
2009, are accounted for as operating leases, and related payments are charged to expense as incurred.
7) Allowance for doubtful accounts
The Company and certain consolidated subsidiaries record the allowance for doubtful accounts based on
historical experience for normal receivables and on an individual assessment of the collectability of the accountfor doubtful receivables.
8) Provision for bonuses
The Company and certain consolidated subsidiaries record the provision for bonuses at the amount expected tobe paid to their employees based on actual results during the fiscal year in order to cover the payments to theemployees in the following fiscal year.
9) Provision for point card certificates
Customers earn loyalty points (Nitori Members Card Points) by presenting their members card at the time ofpurchase. Provision for point card certificates is recorded at the amount expected to be used by customers infuture.
10) Provision for special benefits to shareholders
Provision for special benefits to shareholders is recognized for future utilization of granted shareholder benefits
and recorded at the amount expected to be used by shareholders in future based on the historical rate of use ofshareholder benefits.
11) Provision for directors’ retirement benefits
Provision for directors’ and corporate auditors’ retirement benefits is recorded at the amount required to be paid inaccordance with internal rules if all directors and corporate auditors were to retire at the balance sheet date. The
plans of the Company and its consolidated domestic subsidiaries were abolished in April 2004 and December
2005, respectively, and the recorded amount represents benefits incurred but not yet paid.
12) Accounting method for retirement benefits
Projected benefit obligations are attributed to periods on a benefit formula basis.
Actuarial gains and losses are amortized using the straight-line method over a specific period (10 years), which iswithin the average remaining years of service of the employees at the time of occurrence, from the fiscal year
following the year in which each gain or loss occurs.
Prior service costs are amortized using the straight-line method over a specific period (10 years), which is within
the average remaining years of service of the employees at the time of occurrence.
13) Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at theexchange rate in effect at the balance sheet date, and the resulting exchange gains or losses are credited or
charged to income as incurred.
The balance sheet accounts of consolidated overseas subsidiaries are translated into Japanese yen at theexchange rate prevailing at the balance sheet date except for the components of net assets excluding
non-controlling interests which are translated at the historical rate. Differences arising from such translation are
shown as “foreign currency translation adjustment” in the net assets section. Revenue and expense accounts ofconsolidated overseas subsidiaries are translated into Japanese yen at the average exchange rate.

10FY2017 Nitori Holdings Co., Ltd.

14) Hedge accounting
Hedging instruments are recorded at fair value and accounted for using the deferral hedge accounting, underwhich unrealized gain or loss is deferred as a separate component of net assets.
Hedging instruments: Derivative transactions (foreign exchange forward contracts)
Hedged items: Accounts payable-trade denominated in foreign currencies
Hedging policy: The derivative transactions are used solely for hedging the risk arising from adverse
fluctuations in foreign currency exchange rates.
The Company assesses the hedge effectiveness every half year based on internal rules covering derivativetransactions. Derivative transactions are never entered into for the purpose of trading or speculation.
15) Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of cash flows consist of cash on hand, bank deposits
payable on demand, and short-term investments with a maturity of three months or less, which are readily
convertible into cash and subject to insignificant risk of change in value.
16) Consumption taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.
17) Income taxes
Deferred tax assets and liabilities are recognized in the consolidated financial statements with respect to thedifferences between the financial reporting and tax bases of the assets and liabilities, and measured using theenacted tax rates and laws which will be in effect when the differences are expected to reverse.
18) Accounting standards issued but not yet effective- “Partial Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan(“ASBJ”) Statement No. 28, February 16, 2018)- “Implementation Guidance on Accounting Standard for Tax Effect Accounting” (ASBJ Guidance No. 28, February
16, 2018)- “Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26 (revised 2018),
February 16, 2018)- “Implementation Guidance on Tax Effect Accounting for Interim Financial Statements” (ASBJ Guidance No. 29,
February 16, 2018)(1) Overview
The amendments include: (i) treatment of taxable temporary differences associated with shares of subsidiaries,
etc.; (ii) treatment of the recoverability of deferred tax assets of companies that qualify as (Category 1); (iii)changes in the classification of deferred tax assets into investments and other assets and deferred tax liabilities
into non-current liabilities; (iv) a note on information regarding the breakdown of valuation allowance; and (v) anote on information regarding tax losses.
(2) Scheduled date of adoption
The Company expects to adopt the above amendments from the beginning of the fiscal year ending February 20,
2020.
(3) Impact of adopting the amendments
The Company is currently evaluating the impact of adopting the amendments on its consolidated financial
statements.
19) Additional information
The Group adopted the “Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No.
26 (revised 2016), March 28, 2016) from the year ended February 20, 2018.

11
FY2017 Nitori Holdings Co., Ltd.

5. Notes to Consolidated Balance Sheet
1) Accumulated depreciation of property, plant and equipment
Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

¥92,379¥102,072$955,735

Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

¥2,079¥1,933$18,101

23

50

471

¥2,102¥1,983$18,572

Notes and accounts payable-trade

¥23

¥58

$546

Other (current liabilities)

124

117

1,103

Other (non-current liabilities)

2,162

1,954

18,302Total¥2,310¥2,130$19,952

Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

¥–

¥23,080$216,113

As of February 20

Accumulated depreciation

2) Assets pledged as collateral
Assets pledged as collateral and collateralized liabilities are as follows:

As of February 20

Pledged assets:
Buildings and structures
Guarantee deposits
Total
Corresponding liabilities:

3) Investment securities
Investments in associates are as follows:

As of February 20

Investment securities

4) Amount of reduction entry
The amount of adjustment deducted from the acquisition cost of property, plant and equipment in order to reflect
government subsidies, etc. is as follows:
Millions of Yen

Thousands of
U.S. Dollars

As of February 20

2017

2018

2018

Tools, furniture and fixtures

¥431

¥431

$4,04212FY2017 Nitori Holdings Co., Ltd.

6. Notes to Consolidated Statement of Income
1) The major components of selling, general and administrative expenses are as follows:
Millions of Yen
For the years ended February 20

Thousands of
U.S. Dollars

2017

2018

2018

Customer delivery expenses¥23,685¥26,448$247,644

Advertising expenses

14,804

16,726

156,617

Salaries, allowances and bonuses

55,19861,381

574,734

Provision for bonuses

3,361

2,850

26,689Retirement benefit expenses

1,091

1,250

11,709Rent expenses

28,02733,561

314,247

Depreciation and amortization

10,406

11,357

106,339

Outsourcing expenses

10,925

14,021

131,286

Millions of Yen

Thousands of
U.S. Dollars

2) The breakdown of gain on sales of non-current assets is as follows:

For the years ended February 20

2017

2018

2018

Buildings and structures

¥603

¥0

$0

Machinery, equipment and vehicles

37

169

1,586

Tools, furniture and fixtures

4

1

16

Other (property, plant and equipment)

–

29

279

¥645

¥201

$1,882

Total

3) The breakdown of loss on sales and disposal of non-current assets is as follows:
Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

¥40

¥77

$728

Machinery, equipment and vehicles

1

2

25

Tools, furniture and fixtures

12

13

129

Other (property, plant and equipment)

12

21

204

Other (intangible assets)

2

8

77

Machinery, equipment and vehicles

–

–

–

Tools, furniture and fixtures

3

1

16

Land

–

–

–

Other (intangible assets)

–

4

37

¥73

¥130

$1,220For the years ended February 20

Loss on disposal:
Buildings and structures

Loss on sales:

Total

13
FY2017 Nitori Holdings Co., Ltd.

4) Impairment loss
For the year ended February 20, 2017
Location

Use

Class

Iwata City, Shizuoka

Store

Buildings andstructures, and
other

¥6

Kamikawa, Hokkaido

Idle

Land

4

Millions of Yen

The Group’s assets are grouped according to the type of business. An impairment loss was recognized for a store,
taking its profitability into account. Furthermore, for land whose market price fell, the carrying amount was
reduced to its recoverable amount to recognize an impairment loss.
When the recoverable amount was measured at the net selling price, it was computed based on the assessedvalue for fixed asset tax and other value. When the recoverable amount was measured at the value in use, theGroup assumed that the value in use was zero.
For the year ended February 20, 2018
Millions of Yen

Thousands of
U.S. Dollars

Buildings andstructures, land,
and leaseholds¥4,500$42,141

Buildings andstructures, and
other

460

4,313

Republic of Indonesia Plant facility

Buildings andstructures, and
other

432

4,052

Republic of ChinaStore

Buildings andstructures, and
other

19

179

The United States ofAmericaStore

Tools, furniture andfixtures227

Location

Use

Class

Ota-ku, Tokyoand otherStore

People’s Republic of
China

Store

The Group’s assets are grouped according to the type of business. Impairment loss was recognized for somestores, taking their profitability into account. Furthermore, for land whose market price fell, the carrying amount
was reduced to its recoverable amount to recognize an impairment loss.
When the recoverable amount was measured at the net selling price, it was computed based on the real estateappraisal value, assessed value for fixed asset tax, and other value. When the recoverable amount wasmeasured at the value in use, the Group assumed that the value in use was zero.

14
FY2017 Nitori Holdings Co., Ltd.

7. Notes to Consolidated Statement of Comprehensive Income
For the years ended February 20

Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

¥801

¥(136)$(1,276)45––

Unrealized holding gain (loss) on securities
Amounts arising during the year
Reclassification adjustments
Amount before income tax effect

846

(136)

(1,276)

Income tax effect

(252)

49

460

Subtotal

594

(87)

(816)

8,776

(16,017)(149,973)

–

–

–

8,776

(16,017)(149,973)

Unrealized gain (loss) from hedging instruments
Amounts arising during the year
Reclassification adjustments
Amount before income tax effect
Income tax effect(2,571)

4,942

46,281

Subtotal

6,204(11,074)(103,691)

(57)

862

8,077

(57)

862

8,077

(122)

7

68

41

114

1,074

Foreign currency translation adjustment
Amounts arising during the year
Subtotal
Remeasurements of defined benefit plans, net of tax
Amounts arising during the year
Reclassification adjustments
Amount before income tax effect

’

(80)

122

1,142

Income tax effect

(10)

(5)

(50)

Subtotal

(91)

116

1,092

¥6,649¥(10,182)$(95,338)

Total other comprehensive income (loss)

15
FY2017 Nitori Holdings Co., Ltd.

8. Notes to Consolidated Statement of Changes in Net Assets
1) Class and total number of issued stock and treasury stock
For the year ended February 20, 2017

Number of Shares (Thousands)
Balance at
beginning of year

Increase

Decrease

Balance at
end of year

Issued stock:
Common stock

114,443––

114,443

Treasury stock:
Common stock

3,854

0

923

2,931

Class of shares

Notes: 1. The increase of 0 thousand shares in treasury stock is due to the purchase of shares less than one unit.
2. The decrease of 923 thousand shares in treasury stock consists of a decrease of 156 thousand shares due to the exercise of“Stock Benefit Trust (J-ESOP),” which was introduced by the resolution at the board of directors meeting held on December 20,
2011, and a decrease of 767 thousand shares due to the exercise of stock options.
3. The treasury stock balance at the fiscal year-end includes 262 thousand shares of common stock held by Trust & Custody
Services Bank, Ltd. (Trust Account E), which is the trustee under the Stock Benefit Trust (J-ESOP).
For the year ended February 20, 2018

Number of Shares (Thousands)
Balance at
beginning of year

Increase

Decrease

Balance at
end of year

Issued stock:
Common stock

114,443––

114,443

Treasury stock:
Common stock

2,931

0

446

2,485

Class of shares

Notes: 1. The increase of 0 thousand shares in treasury stock is due to the purchase of shares less than one unit.
2. The decrease of 446 thousand shares in treasury stock consists of a decrease of 98 thousand shares due to the exercise of“Stock Benefit Trust (J-ESOP),” which was introduced by the resolution at the board of directors meeting held on December 20,
2011, and a decrease of 348 thousand shares due to the exercise of stock options.
3. The treasury stock balance at the fiscal year- end includes 164 thousand shares of common stock held by Trust & Custody
Services Bank, Ltd. (Trust Account E), which is the trustee under the Stock Benefit Trust (J-ESOP).

2) Subscription rights to shares
Millions of Yen

Thousands of
U.S. Dollars

As of February 20

2017

2018

2018

Subscription rights to shares as stock options

¥940

¥677

$6,3393) Dividends(1) Dividends paid to shareholders
For the year ended February 20, 2017Class of shares

Total amount ofdividends(Millions of Yen)

Amount ofdividends per share(Yen)

Shareholders’
cut-off date

Effective dateCommon stock¥3,885¥35

February 20,
2016

April 22,
2016

Board of directors meeting
held on September 27, 2016
(Note 2)
Common stock

3,887

35

August 20,
2016

October 25,
2016

Resolution at

Board of directors meeting
held on March 28, 2016
(Note 1)

Notes: 1. The total amount of dividends includes dividends of ¥14 million on shares held by Trust & Custody Services Bank, Ltd. (Trust
Account E), which is the trustee under the Stock Benefit Trust (J-ESOP).
2. The total amount of dividends includes dividends of ¥9 million on shares held by Trust & Custody Services Bank, Ltd. (Trust
Account E), which is the trustee under the Stock Benefit Trust (J-ESOP).

16
FY2017 Nitori Holdings Co., Ltd.

For the year ended February 20, 2018
Total amount ofdividends(Millions of Yen)

Total amount ofdividends(Thousands of
U.S. Dollars)

Amount ofAmount ofdividends
dividends
per shareper share(Yen) (U.S.Dollars)

Resolution atClass ofsharesBoard of directors meeting
held on March 28, 2017
(Note 1)

Commonstock¥5,252$49,184

¥47

$0.44

Board of directors meeting
held on September 27, 2017 Common(Note 2)
stock

5,039

47,19045

0.42

Shareholders’
cut-off date Effective dateFebruary 20,
2017

April 21,2017

August 20, October 24,
2017
2017

Notes: 1. The total amount of dividends includes dividends of ¥12 million ($115 thousand) on shares held by Trust & Custody Services
Bank, Ltd. (Trust Account E), which is the trustee under the Stock Benefit Trust (J-ESOP).
2. The total amount of dividends includes dividends of ¥7 million ($69 thousand) on shares held by Trust & Custody Services Bank, Ltd.
(Trust Account E), which is the trustee under the Stock Benefit Trust (J-ESOP).

(2) Dividends with a shareholders’ cut-off date during the current fiscal year but an effective date in the following
fiscal year
For the year ended February 20, 2017

Resolution atClass ofsharesPaid fromTotal amount ofdividends(Millions of Yen)

Board of directors
meeting held on
March 28, 2017

Common Retainedstockearnings¥5,252

Amount ofdividends
per share(Yen)

Shareholders’
cut-off date

Effective date¥47

February 20,
2017

April 21,2017

Note: The total amount of dividends includes dividends of ¥12 million on shares held by Trust & Custody Services Bank, Ltd. (Trust
Account E), which is the trustee under the Stock Benefit Trust (J-ESOP).
For the year ended February 20, 2018

Resolution atClass ofsharesPaid from

Board of directors
meeting held on
March 27, 2018

Commo
n stock

Retainedearnings

Total amount
Total amount ofof dividends
dividends (Thousands of
U.S. Dollars)(Millions of Yen)

¥5,269$49,341

Amount ofdividends
per share(Yen)

Amount ofdividends
per share(U.S. Dollars)

Shareholders’
cut-off date

Effective date

¥47

$0.44

February 20,
2018

April 26,2018

Note: The total amount of dividends includes dividends of ¥7 million ($72 thousand) on shares held by Trust & Custody Services Bank, Ltd.
(Trust Account E), which is the trustee under the Stock Benefit Trust (J-ESOP).

4) Shareholder’s Equity
The Companies Act of Japan (the “Act”) provides that an amount equal to 10% of the amount to be disbursed as
distributions of capital surplus (other than the capital reserve) and retained earnings (other than the legal reserve)
be transferred to the capital reserve and the legal reserve, respectively, until the sum of the capital reserve andthe legal reserve equals 25% of the common stock. Such distributions can be made at any time by resolution at
the shareholders meeting, or at the board of directors meeting if certain conditions are met, but neither the capitalreserve nor the legal reserve is available for distributions.

17
FY2017 Nitori Holdings Co., Ltd.

9. Note to Consolidated Statement of Cash FlowsThe reconciliation between cash and deposits reported in the consolidated balance sheet and cash and cash
equivalents at the fiscal year-end in the consolidated statement of cash flows is as follows:
Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

Cash and deposits¥70,560¥63,339$593,066

Time deposits with maturities exceeding 3 months(4,525)(2,416)(22,622)

Cash and cash equivalents¥66,035¥60,923$570,443

As of February 20

10. Leases
As Lessee:
The Group leases certain buildings for retail stores. Finance leases that do not transfer ownership to the lesseecommencing on or before February 20, 2009 are accounted for in a manner similar to accounting treatment forordinary rental transactions. The information on these lease transactions is omitted because it is insignificant.
Future minimum lease payments under non-cancelable operating leases are as follows:
Millions of Yen
As of February 20

Thousands of
U.S. Dollars

2017

2018

2018

Due within one year

¥4,824¥5,659$52,990

Due after one year

35,43833,877317,201

Total¥40,263¥39,536$370,191

As Lessor:
Future minimum lease payments to be received under non-cancelable operating leases are as follows:
Millions of Yen
As of February 20

Thousands of
U.S. Dollars

2017

2018

2017

Due within one year

¥1,133¥1,159$10,860

Due after one year

10,201

9,315

87,220

Total¥11,335¥10,475$98,081

11. Financial Instruments
1) Overview(1) Policy for financial instruments
The Group raises necessary funds based on capital investment plans and cash flow plans, mainly through loans
from banks. The Group utilizes derivative financial instruments only to manage risks described below and does notenter into such transactions for speculative trading purposes.
(2) Types of financial instruments and related risk and risk management
Notes and accounts receivable-trade are exposed to credit risk of customers, but the collection period is short,and the historical bad debt ratio is extremely low. The Group manages credit risk by monitoring due dates andoutstanding balances for each customer and makes efforts to promptly collect receivables from customers infinancial difficulties.
Investment securities with market quotations are exposed to market risk, and those without market quotations
are exposed to impairment risk due to the relevant companies’ operating results. The Group periodically reviews
the fair values of such financial instruments.
Guarantee deposits and lease deposits, which are mostly related to leases on stores, are exposed to credit riskof lessors. The Group manages credit risk by monitoring due dates and outstanding balances for each lessor aswell as makes efforts to identify and decrease concerns about collecting deposits from lessors in financial
difficulties at an early stage.

18
FY2017 Nitori Holdings Co., Ltd.

Most of notes and accounts payable-trade, accounts payable-other and income taxes payable are due within
three months.
Long-term loans payable are for long-term working capital. Variable rate long-term loans payable are exposed tointerest rate fluctuation risk.
Regarding derivatives, the Group enters into foreign exchange forward contracts to hedge foreign currency risk
related to payables denominated in foreign currencies. The Group believes that the credit risk under derivativetransactions is fairly low because counterparties of derivative transactions are limited to financial institutions witha high credit rating. The finance department executes and manages derivative transactions upon approval by
person(s) with authority in accordance with internal rules stipulating authority of transactions.
(3) Supplementary explanation on estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price. When no quoted market price isavailable, fair value is reasonably estimated. Since various assumptions and factors are reflected in estimating
the fair value, different assumptions and factors could result in different fair value.
The notional amounts of derivatives in Note 13. Derivatives are not necessarily indicative of the actual market
risk involved in derivative transactions.
2) Estimated fair value of financial instruments
The carrying value of financial instruments on the consolidated balance sheet as of February 20, 2017 and 2018
and estimated fair value are shown below. The following table does not include financial instruments for which it isextremely difficult to determine the fair value (please refer to Note 2 below).
Millions of Yen
As of February 20, 2017

Carrying value

Estimated fair value

Difference(1) Cash and deposits¥70,560¥70,560¥–(2) Notes and accounts receivable-trade

18,476

18,476–(3) Investment securities

3,226

3,226

–

(4) Guarantee deposits

15,72017,061

1,341(5) Lease deposits

20,51520,054(461)(1) Notes and accounts payable-trade¥16,001¥16,001¥–(2) Accounts payable-other

19,291

19,291–(3) Income taxes payable

15,63015,630

–

625

624

(0)

¥14,998¥14,998¥–

Assets:Liabilities:(4) Long-term loans payable, including current
portion of long-term loans payable

Derivative transactions (*)

19
FY2017 Nitori Holdings Co., Ltd.

Millions of Yen
As of February 20, 2018

Carrying value

Estimated fair value

Difference(1) Cash and deposits¥63,339¥63,339¥–(2) Notes and accounts receivable-trade22,45822,458–Available-for-sale securities

3,090

3,090

–

Shares of associates

23,08042,73919,658(4) Guarantee deposits

14,81316,013

1,199(5) Lease deposits

21,88021,535(344)(1) Notes and accounts payable-trade¥19,607¥19,607¥–(2) Accounts payable-other

18,32318,323–(3) Income taxes payable

17,39917,399–(4) Long-term loans payable, including
current portion of long-term loans payable

10,00010,01515

Derivative transactions (*)¥(1,018)¥(1,018)¥–

Carrying value

Estimated fair value

Difference(1) Cash and deposits$593,066$593,066$–(2) Notes and accounts receivable-trade210,282

210,282–

Available-for-sale securities

28,93428,934–

Shares of associates

216,113400,186

184,072(4) Guarantee deposits

138,704

149,934

11,230(5) Lease deposits

204,870

201,641(3,229)(1) Notes and accounts payable-trade$183,594$183,594$–(2) Accounts payable-other171,564

171,564–(3) Income taxes payable

162,919

162,919–(4) Long-term loans payable, including
current portion of long-term loans payable

93,632

93,782

149

Derivative transactions (*)$(9,539)$(9,539)$–

Assets:(3) Investment securities:

Liabilities:

Thousands of U.S. Dollars
As of February 20, 2018

Assets:(3) Investment securities:

Liabilities:(*) The value of assets and liabilities arising from derivatives is shown at net value, and with the amount in parentheses representing net
liability position.
Notes: 1. Methods to determine the estimated fair value of financial instruments
Assets:(1) Cash and deposits, and (2) Notes and accounts receivable-trade
Since these items are settled in a short period of time, their carrying value approximates fair value.
(3) Investment securities
The fair value of stocks is based on quoted market prices. For information on securities classified by holding purpose, pleaserefer to Note 12. Securities.

20
FY2017 Nitori Holdings Co., Ltd.

(4) Guarantee deposits
The fair value of guarantee deposits is based on the present value of the estimated future cash flows adjusted for credit risk inaccordance with the maturity schedule by applying the discount rate determined by reference to an appropriate index such as agovernment bond yield.
(5) Lease deposits
The fair value of lease deposits is based on the present value of the estimated future cash flows adjusted for credit risk by certain
period of time by applying the discount rate determined by reference to an appropriate index such as a government bond yield.
Liabilities:(1) Notes and accounts payable-trade, (2) Accounts payable-other, and (3) Income taxes payable
Since these items are settled in a short period of time, their carrying value approximates fair value.
(4) Long-term loans payable
The fair value of long-term loans payable is based on the present value of the total of principal and interest discounted by theinterest rate applicable to similar new borrowings.
Derivative transactions:
Please refer to Note 13. Derivatives.
2. Financial instruments for which it is extremely difficult to determine the fair value
Millions of Yen

Thousands of
U.S. Dollars

As of February 20

2017

2018

2018

Unlisted stocks

¥304

¥300

$2,817

Unlisted stocks are excluded from “Assets, (3) Investment securities” because no quoted market price is available and it isextremely difficult to determine the fair value.
3. Redemption schedule for financial assets with maturities
Millions of Yen
As of February 20, 2017

Due in 1 year or
less

Due after 1 year
through 5 years

Due after 5 years

Cash and deposits¥70,560¥–¥–

Notes and accounts receivable-trade

18,486

–

–

Total

¥89,047¥–¥–

As of February 20, 2018

Due in 1 year or lessDue after 1 year
through 5 years

Due after 5 years

Cash and deposits¥63,339¥–¥–

Notes and accounts receivable-trade22,458

–

–

Total

¥85,797¥–¥–

As of February 20, 2018

Due in 1 year or
less

Due after 1 year
through 5 years

Due after 5 years

Cash and deposits$593,066$–$–

Notes and accounts receivable-trade210,282

–

–

Total

$803,349$–$–

Millions of Yen

Thousands of U.S. Dollars

Guarantee deposits and lease deposits are not disclosed because it is difficult to determine the redemption schedule for all theyears presented.
4. Redemption schedule for long-term loans payable
Millions of Yen
Due in 1
year or less
As of February 20, 2017

Due after 3
Due after 2
Due after 1
year through years through years through4 years
3 years
2 years

Due after 4
years through5 years

Due after 5
years

Long-term loans
payable

¥625

¥–

¥–

¥–

¥–

¥–

Total

¥625

¥–

¥–

¥–

¥–

¥–

21
FY2017 Nitori Holdings Co., Ltd.

Millions of Yen

As of February 20, 2018

Due in1 yearor less

Due after
1 yearthrough
2 years

Due after
2 years
through
3 years

Due after
3 years
through
4 years

Due after
4 years
through
5 years

Due after
5 years

Long-term loans
payable¥2,000¥2,000¥2,000¥2,000¥2,000¥–Total¥2,000¥2,000¥2,000¥2,000¥2,000¥–Thousands of U.S. Dollars
Due in1 yearor less

Due after
1 yearthrough
2 years

Long-term loans
payable$18,726$18,726$18,726$18,726$18,726$–

Total$18,726$18,726$18,726$18,726$18,726$–

As of February 20, 2018

Due after
2 years
through
3 years

Due after
3 years
through
4 years

Due after
4 years
through
5 years

Due after
5 years22
FY2017 Nitori Holdings Co., Ltd.

12. Securities
1) Available-for-sale securities (with market value)
Millions of Yen
As of February 20, 2017

Acquisition cost

Unrealized gain
(loss)¥274¥1,705

1,246

1,677

(431)

¥3,226¥1,952¥1,274

Carrying value

Securities whose carrying value exceeds their acquisition cost:
Stocks¥1,980

Securities whose acquisition cost exceeds their carrying value:
StocksTotal

Note: Unlisted stocks (¥304 million in the consolidated balance sheet) are not included in the above table because no quoted market priceis available and it is extremely difficult to determine the fair value.
Millions of Yen
As of February 20, 2018

Acquisition cost

Unrealized gain
(loss)¥274¥1,302

1,512

1,677

(165)

¥3,090¥1,952¥1,137

Carrying value

Securities whose carrying value exceeds their acquisition cost:
Stocks¥1,577

Securities whose acquisition cost exceeds their carrying value:
Stocks
Total

Thousands of U.S. Dollars
As of February 20, 2018

Acquisition cost

Unrealized gain
(loss)$2,568$12,199

14,166

15,711(1,544)$28,934$18,280$10,654

Carrying value

Securities whose carrying value exceeds their acquisition cost:
Stocks$14,768

Securities whose acquisition cost exceeds their carrying value:
StocksTotal

Note: Unlisted stocks (¥300 million ($2,817 thousand) in the consolidated balance sheet) are not included in the above table because noquoted market price is available and it is extremely difficult to determine the fair value.

2) Sales of available-for-sale securities
Millions of Yen
For the year ended February 20, 2017 Proceeds from sales

Gain on sales

Loss on sales

¥17

¥16

¥–

¥17

¥16

¥–

For the year ended February 20, 2018 Proceeds from sales

Gain on sales

Loss on sales

¥10

¥6

¥–

¥10

¥6

¥–

Stocks
Total

Millions of Yen

Stocks
Total

Thousands of U.S.
Dollars
For the year ended February 20, 2018 Proceeds from sales

StocksTotal

Gain on sales

Loss on sales

$93

$57

$–

$93

$57

$–

23
FY2017 Nitori Holdings Co., Ltd.

3) Impairment of available-for-sale securities
Millions of Yen

Thousands of
U.S. Dollars

For the years ended February 20

2017

2018

2018

Loss on valuation of investment securities(unlisted stocks)

¥61

¥–

$–

If the fair value of securities as of the fiscal year-end declines more than 50% compared with the acquisition cost,those securities are written down to the fair value, and the resulting losses are charged to the statement of income
for the period. If the fair value of securities as of the fiscal year-end declines from 30% to 50% compared with theacquisition cost, those securities are written down to the amount determined taking into consideration themateriality of such amount, recoverability and other factors, and the resulting losses are charged to the statementof income for the period.

24
FY2017 Nitori Holdings Co., Ltd.

13. Derivatives
1) Derivative transactions to which hedge accounting is not applied
Currency-related transactions
As of February 20, 2017

Category

Over-thecountertransactions

Millions of Yen

Transaction type

Notional
amountNotional
amountmaturing
over 1 year

Fair value

Unrealized
gain (loss)

¥546

¥–

¥3

¥3

Foreign exchange
forward contract
Selling U.S. dollars

Note: The fair value of derivative transactions is measured at the quoted price obtained from the counterparty financial institution.
As of February 20, 2018

Not applicable.
2) Derivative transactions to which hedge accounting is applied(1) Currency-related transactions
As of February 20, 2017

Millions of Yen
Main hedged item

Notional amount

Notional amountmaturing over 1 year

Fair value

Accounts
Buying U.S. dollars payable-trade¥170,590¥–¥14,998

Main hedged item

Notional amount

Notional amountmaturing over 1 year

Fair value

Accounts
Buying U.S. dollars payable-trade¥54,487¥–¥(1,018)

Main hedged item

Notional amount

Notional amountmaturing over 1 year

Fair value

Accounts
Buying U.S. dollars payable-trade$510,179$–$(9,539)

Hedge accounting method Transaction type

Deferral method

Foreign exchange
forward contract

As of February 20, 2018

Millions of Yen

Hedge accounting method Transaction type

Deferral method

Foreign exchange
forward contract

As of February 20, 2018

Thousands of U.S. Dollars

Hedge accounting method Transaction type

Deferral method

Foreign exchange
forward contract

Note: The fair value of derivative transactions is measured at the quoted price obtained from counterparty financial institutions for all theyears presented.

(2) Interest-related transactions
As of February 20, 2017

Not applicable.
As of February 20, 2018

Not applicable.

25
FY2017 Nitori Holdings Co., Ltd.

14. Retirement Benefits
1) Summary of employees’ retirement benefit plans
The Company and certain consolidated subsidiaries have a defined benefit corporate pension plan, a lump-sum
payment plan and a defined contribution pension plan. The Company and certain consolidated subsidiaries may
provide to employees upon retirement extra retirement payments, which are not included in the projected benefit
obligations based on actuarial calculation and are determined by reference to their current rate of pay, length ofservice and conditions under which the termination occurs.
2) Defined benefit plan
(1) The reconciliation from the beginning balance to the ending balance of projected benefit obligations is as follows:
Millions of Yen

Thousands of
U.S. Dollars

For the years ended February 20

2017

2018

2018

Balance at beginning of year

¥4,836¥5,570$52,160

Balance at beginning of year (as restated)

4,836

5,570

52,160Service cost

764

822

7,700

Interest cost

47

26

248

Actuarial loss (gain)

176

110

1,033

Benefits paid

(253)

(517)

(4,843)¥5,570¥6,012$56,300

Balance at end of year

Note: The above table includes amounts under plans in which the simplified method is applied.

(2) The reconciliation from the beginning balance to the ending balance of plan assets at fair value is as follows:
Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

¥2,556¥2,936$27,494

Expected return on plan assets

51

58

549

Actuarial gain (loss)

93

91

858

Employer contributions

322

313

2,931

Benefits paid

(87)

(100)

(943)

¥2,936¥3,299$30,890

For the years ended February 20

Balance at beginning of year

Plan assets at fair value at end of year

(3) The reconciliation between projected benefit obligations and plan assets at the fiscal year-end and the amountrecognized in the consolidated balance sheet is as follows:
Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

Projected benefit obligations (funded plans)¥2,929¥3,277$30,686

Plan assets at fair value(2,936)(3,299)(30,890)

(7)

(21)

(204)

Projected benefit obligations (unfunded plans)

2,641

2,735

25,614

Net defined benefit liability in the consolidatedbalance sheet

2,634

2,713

25,410Defined benefit liability

2,634

2,713

25,410Net defined benefit liability in the consolidatedbalance sheet¥2,634¥2,713$25,410

As of February 20

Note: The above table includes amounts under plans in which the simplified method is applied.

26
FY2017 Nitori Holdings Co., Ltd.

(4) The components of retirement benefit expenses are as follows:
Millions of Yen

Thousands of
U.S. Dollars

For the years ended February 20

2017

2018

2018

Service cost

¥764

¥822

$7,700Interest cost

47

26

248

Expected return on plan assets

(51)

(58)

(549)

Actuarial loss

39

149

1,404

Prior service cost

(35)

(35)

(329)

Retirement benefit expenses on defined benefit plan

765

904

8,473

Special retirement expenses

¥54

¥354

$3,322

Amortization and expenses:

Notes: 1. The above table includes amounts under plans in which the simplified method is applied.
2. Special retirement expenses have been recorded under special losses.

(5) The components of remeasurements of defined benefit plans recognized in other comprehensive income(loss) before income tax effect are as follows:
Millions of Yen

Thousands of
U.S. Dollars

For the years ended February 20

2017

2018

2018

Prior service cost

¥(35)

¥(35)

$(329)

Actuarial gain (loss)

(45)

157

1,472

Total

¥(80)

¥122

$1,142(6) The components of remeasurements of defined benefit plans recognized in accumulated other comprehensive
income (loss) before income tax effect are as follows:
Millions of Yen

Thousands of
U.S. Dollars

As of February 20

2017

2018

2018

Unrecognized prior service cost

¥144

¥109

$1,024

Unrecognized actuarial loss

(669)

(512)

(4,799)Total¥(525)¥(403)$(3,774)(7) The plan assets, by major category, as a percentage of total plan assets are as follows:(% of total plan
assets)
As of February 20

2017

2018

Life insurance company general accounts

45 %

44 %

Bonds

27

30

Stocks

26

25

Other

2

1

Total

100 %

100 %

(8) The expected long-term rate of return on plan assets is determined based on the current and expected future
allocation of plan assets and the current and expected future long-term rate of return on various assets of whichplan assets are composed.

27
FY2017 Nitori Holdings Co., Ltd.

(9) Assumptions used for the actuarial calculation are as follows:
As of February 20

Discount rate
Expected long-term rate of return on plan assets
Expected rate of salary increase

2017

Primarily 0.6 %2018

Primarily 0.5 %

2.0

2.0

Primarily 4.6

Primarily 4.6

3) Defined contribution plan
Contributions made to the defined contribution plan for the years ended February 20, 2017 and 2018 were ¥329
million and ¥368 million ($3,454 thousand), respectively.

28
FY2017 Nitori Holdings Co., Ltd.

15. Stock Options
For the years ended February 20, 2017 and 2018, the Group recognized expenses regarding stock options of¥315 million and ¥105 million ($987 thousand), respectively, which are included in selling, general andadministrative expenses.
For the years ended February 20, 2017 and 2018, the Group recognized gains due to forfeited stock options of ¥7
million and ¥49 million ($464 thousand), respectively, which are presented in special gains as “Gain on reversal ofsubscription rights to shares.”1) Description of stock options as of February 20, 2018
The Fourth and Fifth Subscription Rights toSharesResolution at annual general
meeting of shareholders heldon

May 12, 2011

Resolution at board of
directors meeting held on

March 29, 2012

Grantees

Directors

4

Company auditors

2

Officers

16

Directors of subsidiaries

5

Employees of subsidiaries

Number of shares by class

Common stock (shares)

Grant date

April 2, 2012

2,664

1,389,100

Vesting conditions

None

Vesting period

From April 2, 2012 to March 29, 2015

Exercise period

From March 30, 2015 to March 29,
2017

The Sixth Subscription Rights to Shares

The Seventh Subscription Rights to Shares

Resolution at annual general
meeting of shareholders heldon

May 9, 2014

May 9, 2014

Resolution at board of
directors meeting held on

June 27, 2014

June 27, 2014

Grantees

Directors

8

Officers

14

Company auditors

3

Directors of subsidiaries

4

Employees of subsidiaries

3,239

Common stock (shares)

904,100

Number of shares by class

Common stock (shares)

Grant dateJuly 14, 2014

June 30, 2014

Vesting conditions

None

None

Vesting period

From July 14, 2014 to July 14, 2017

From June 30, 2014 to June 30, 2017

Exercise period

From July 15, 2017 to July 14, 2020

From July 1, 2017 to June 30, 2020

121,000

Note: The Company completed a two-for-one stock split of its common stock on February 21, 2014. The number of shares by class in theabove table has been adjusted for the stock split.

29
FY2017 Nitori Holdings Co., Ltd.

2) Summary of stock option activity during the year ended February 20, 2018
The Fourth and Fifth Subscription Rights to Shares

Non-vested (Shares):At the beginning of the year–

Granted–Forfeited–

Vested–At the end of the year–

Vested (Shares):At the beginning of the year

165,400

Vested–Exercised

102,800

Forfeited

62,600At the end of the year–

The Sixth Subscription Rights to Shares

The Seventh Subscription Rights to Shares

119,000

827,400

Granted––Forfeited

10,0006,000

Vested––At the end of the year

–

–

–

–

Vested109,000

821,400

Exercised

88,700157,100

Forfeited

–

5,400

20,300658,900

Non-vested (Shares):At the beginning of the year

Vested (Shares):At the beginning of the year

At the end of the year

Note: The Company completed a two-for-one stock split of its common stock on February 21, 2014. The number of the fourth and fifth
subscription rights to shares issued has been adjusted for the stock split based on the assumption that the stock split was completed
at the time of issue.

The unit price information is as follows:
The Fourth and Fifth Subscription Rights to Shares
Yen

U.S. dollars

Exercise price¥3,959$37.06

Average stock price at exercise

13,160123.22

Fair value per stock on grant date

706

6.61

The Sixth Subscription Rights to Shares
Yen

U.S. dollars

Exercise price¥5,650$52.90

Average stock price at exercise

16,841

157.68Fair value per stock on grant date

1,022

9.56

30
FY2017 Nitori Holdings Co., Ltd.

The Seventh Subscription Rights to Shares
Yen

U.S. dollars

Exercise price¥5,540$51.87

Average stock price at exercise

16,742156.76

Fair value per stock on grant date

996

9.32

Note: The Company completed a two-for-one stock split of its common stock on February 21, 2014. The price of the fourth and fifth
subscription rights to shares has been adjusted for the stock split based on the assumption that the stock split was completed at thetime of issue.

3) Method of estimating the number of vested options
The number of non-vested, forfeited options is estimated by reference to the historical forfeiture rate due toretirement.

31
FY2017 Nitori Holdings Co., Ltd.

16. Income Taxes
1) Significant components of deferred tax assets and liabilities
Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

¥1,296¥1,243$11,639

222

50

473

1,012

855

8,014

Provision for point card certificates

405

512

4,800

Unrealized gain on sales of inventories

173

178

1,675

Unrealized loss from hedging instruments

–

314

2,943

765

830

7,775

As of February 20

Deferred tax assets:
Accrued enterprise tax and business office taxes
Accrued real estate acquisition tax
Provision for bonuses

Net defined benefit liability

3,134

3,843

35,984

Provision for directors' retirement benefits

70

70

656

Allowance for doubtful accounts

22

25

234

Impairment loss and penalty for the scrap and build of outlets

271

1,375

12,876

Asset retirement obligations

1,474

1,629

15,260

Other

4,206

5,399

50,556

Subtotal

13,055

16,328152,892

Less: valuation allowance(1,634)(2,611)(24,448)

11,42013,717

128,443

4,628

–

–

Unrealized holding gain on securities

390

341

3,193

Construction assistance fund receivables

798

860

8,056

Asset retirement cost related to asset retirement obligations

887

885

8,293

Retained earnings of subsidiaries

886

678

6,353

Other

443

199

1,863

Total deferred tax liabilities

8,034

2,964

27,760Net deferred tax assets¥3,386¥10,752$100,683

Depreciation and amortization

Total deferred tax assets
Deferred tax liabilities:
Unrealized gain from hedging instruments

Deferred tax assets and liabilities as of February 20, 2017 and 2018 are reflected in the following accounts in the
consolidated balance sheet:
Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

Current assets – Deferred tax assets¥1,001¥5,309$49,711

Investments and other assets – Deferred tax assets

2,952

5,447

51,010

564

–

–

3

4

38

As of February 20

Current liabilities – Deferred tax liabilities
Non-Current liabilities – Deferred tax liabilities

2) Reconciliation between the effective statutory tax rate and the actual effective tax rate
The details for the years ended February 20, 2017 and 2018 are omitted as differences between the statutory tax
rate and the actual effective tax rate are 5% or less of the effective statutory tax rate.

32
FY2017 Nitori Holdings Co., Ltd.

17. Investment and Rental Properties
The Company and certain consolidated subsidiaries own commercial facilities and other properties (includingland) for lease in major cities throughout Japan. Certain rental properties are not recognized as rental properties
but as real estate including spaces used as rental properties since the Company and certain consolidated
subsidiaries use some of the floor space of these properties.
The carrying value in the consolidated balance sheet, net change during the year, and fair value of those
properties are as follows:
2017

Millions of Yen
2018

Thousands of
U.S. Dollars
2018

Balance at beginning of year

¥29,577¥22,367$209,436

Increase (decrease)(7,210)15,212

142,443

Balance at end of year

22,36737,580351,879

Fair value at end of year

22,004

37,141

347,765¥32,297¥42,080$394,007

Increase (decrease)

9,782(1,090)(10,208)

Balance at end of year

42,08040,989383,799

Fair value at end of year

47,032

46,792

438,130

For the years ended February 20

Rental properties:
Carrying value

Real estate including spaces used as rental properties:
Carrying value
Balance at beginning of year

Notes: 1. The carrying value represents the acquisition cost less accumulated depreciation.
2. Increase in rental properties during the year ended February 20, 2017 was primarily due to the acquisition of a property in
Abeno-ku, Osaka City (Previous Sharp Corporation’s Headquarters) of ¥6,830 million and transfer from real estate including
spaces used as rental properties of ¥4,906 million. Decrease in rental properties during the year ended February 20, 2017 wasprimarily due to the termination of a lease contract on a property in Abeno-ku, Osaka City (Previous Sharp Corporation’s
Headquarters) of ¥6,589 million and transfer to real estate including spaces used as rental properties of ¥11,082 million. The
increase in rental properties during the year ended February 20, 2018 was primarily due to the acquisition of properties in
Takamatsu-cho, Nishinomiya City of ¥7,794 million ($72,979 thousand) and Higashi-ku, Osaka City of ¥7,891 million ($73,893
thousand).
3. Increase in real estate including spaces used as rental properties during the year ended February 20, 2017 was primarily due tothe transfer from rental properties of ¥15,343 million. Decrease in real estate including spaces used as rental properties during
the year ended February 20, 2017 was primarily due to the transfer to rental properties of ¥4,906 million. The decrease in realestate including spaces used as rental properties during the year ended February 20, 2018 was primarily due to a decrease in
the carrying amount attributable to depreciation of ¥991 million ($9,281 thousand).
4. The fair value at fiscal year-end is measured at the value based on certain appraisal values and other indicators reflecting themarket value.

Rent income and expenses on rental properties and real estate including spaces used as rental properties are as
follows:
2017

Millions of Yen
2018

Thousands of
U.S. Dollars
2018

Rent income¥1,024¥953$8,927

Rent expenses

654

395

3,703

Difference

370

557

5,223

For the years ended February 20

Rental properties:

Real estate including spaces used as rental properties:
Rent income¥5,122¥6,028$56,446

Rent expenses

2,841

3,179

29,772Difference

2,281

2,848

26,674

Note: Since real estate including spaces used as rental properties includes some of the floor space used by the Company and certain
consolidated subsidiaries for the purposes of providing services and management, the related rent income is not recognized.
Expenses related to the properties (depreciation, insurance, taxes, etc.) are included in rent expenses.

33
FY2017 Nitori Holdings Co., Ltd.

18. Segment Information
1) Segment information
The Group has been primarily engaged in a single segment of sales of home furnishings and interior goods.
Therefore, the disclosure of reportable segment information is omitted.
2) Related information(1) Information about products and services
Information about products and services is as follows:
Millions of Yen

For the year ended February 20, 2017

Sales of homefurnishings andinterior goods

Other

Total

Net sales to external customers¥501,591¥11,367¥512,958

For the year ended February 20, 2018

Sales of homefurnishings andinterior goods

Other

Total

Net sales to external customers¥558,906¥13,153¥572,060

For the year ended February 20, 2018

Sales of homefurnishings andinterior goods

Other

Total

Net sales to external customers$5,233,208$123,164$5,356,372

Millions of Yen

Thousands of U.S. Dollars(2) Information about geographic areasa) Net sales
Information about geographic areas is not disclosed because sales to external customers in Japan constituted
more than 90% of net sales on the consolidated statement of income.
b) Property, plant and equipment
Information about property, plant and equipment is not disclosed because property, plant and equipment in Japan
constituted more than 90% of property, plant and equipment on the consolidated balance sheet.
(3) Information about major customers
Information about major customers is not disclosed since no single customer accounts for 10% or more of net
sales on the consolidated statement of income.
3) Information about impairment loss on non-current assets by reportable segment
The Group has been primarily engaged in a single segment of sales of home furnishings and interior goods.
Therefore, this information is omitted.
4) Information about amortization and unamortized balances of goodwill by reportable segment
Not applicable.
5) Information about gain on negative goodwill by reportable segment
Not applicable.

34
FY2017 Nitori Holdings Co., Ltd.

19. Related Party Transactions
1) Related party transactions between the Company and related parties
Officers, major shareholders (individual shareholders only), etc., of the Company% of voting
rightsFor the year ended February 20, 2017

Name

Capitalstock orHeld (held byAddress contribution Occupation
others)

Officer

ShoshinKomiya–(held byDirectorothers)of theCompany Direct 0.03

Officer

Masanori
Ikeda–(held byDirectorothers)of theCompany Direct 0.03

Officer

FumihiroSudo–(held byDirectorothers)of theCompany Direct 0.01

Officer

Takao
Kubo

–

(held byDirectorothers)of theCompany Direct 0.02

Category

Officerof subsidiary

Close relativeof officer

Sigehito
Matsukura

Mitsuko
Nitori

–

–

–

–

–

–

–

–

Represe(held byntativeothers)director of
Direct 0.04
subsidiary

Mother of
representative(held bydirector,others)Akio Nitori Direct 0.01

Transaction amountYear-end balance

Businessrelationship

Details oftransaction–

Exercise ofstock options(Note 2)

¥19

–

¥–

–

Exercise ofstock options(Note 2)

15

–

–

–

Exercise ofstock options(Note 2)

19

–

–

–

Exercise ofstock options(Note 2)

15

–

–

79

–

–

Building
lease

Exercise ofstock options(Note 2)
Loans
receivable(Note 3)
Collection ofloans
receivable(Note 3)

Building
lease(Note 4)

Millions of Yen

Account

Millions of Yen

–
79

–
–

79

–
–

Lease
16 deposits

28

Notes: 1. The transaction amount does not include consumption taxes.
2. It represents the exercise of stock options granted in accordance with a resolution at the annual general meeting of shareholders
on May 12, 2011 during the fiscal year ended February 20, 2017.
3. Interest rates on loans are determined based on market interest rates.
4. The terms and rent on the building lease transaction are determined based on similar transactions in a nearby area.

35
FY2017 Nitori Holdings Co., Ltd.

% of voting
rightsFor the year ended February 20, 2018

Category

Name

Officer

Akio
Nitori

Officer

Takao
Kubo

Officer

Officer

Officer

Close relativeof officer

Takaharu
Ando

Kazuhiko
Takeshima

ShoshinKomiyaMitsuko
NitoriCapitalstock orHeld (held byAddress contribution Occupation
others)

–

–

–

–

–

–

–

Representative
director of (held byothers)theCompany Direct 3.05–

(held byDirectorothers)of theCompany Direct 0.02–

External
director of (held byothers)theCompany Direct 0.00–

External
director of (held byothers)theCompany Direct 0.00–

Formerdirector oftheCompany–

Mother of
representative(held bydirector,others)Akio Nitori Direct 0.01–

Transaction amount
Businessrelationship

Details ofTransaction

Year-end balance

Millions ofYen

Thousands of
U.S. Dollars–

Exercise ofstock options(Note 2)¥452

$4,232

–

¥–

$–

–

Exercise ofstock options(Note 2)

16

158

–

–

–

–

Exercise ofstock options(Note 2)

11

105

–

–

–

–

Exercise ofstock options(Note 2)

11

105

–

–

–

–

Exercise ofstock options(Note 3)

19

185

–

–

–

Building
lease

Building
lease(Note 4)16

Lease
151 deposits

28

267

Account

Millions of Thousands of
Yen
U.S. Dollars

Notes: 1. The transaction amount does not include consumption taxes.
2. It represents the exercise of stock options granted in accordance with a resolution at the annual general meeting of shareholders
on May 9, 2014 during the year ended February 20, 2018.
3. It represents the exercise of stock options granted in accordance with a resolution at the annual general meeting of shareholders
on May 12, 2011 during the year ended February 20, 2018.
4. The terms and rent on the building lease transaction are determined based on similar transactions in a nearby area.

2) Related party transactions between the consolidated subsidiaries and related parties
Not applicable.

36
FY2017 Nitori Holdings Co., Ltd.

20. Amounts per Share
As of and for the years ended February 20

Net assets per share of common stock

Yen

U.S. Dollars

2017

2018

2018

¥3,530.51¥3,938.89$36.88

Basic net income per share of common stock540.93574.49

5.38

Diluted net income per share of common stock536.23571.63

5.35

Note: Stocks held by Trust & Custody Services Bank, Ltd. (Trust Account E), which have been accounted for as treasury stock in the
consolidated financial statements, are excluded from the number of shares at the fiscal year-end for the calculation of net assets
per share of common stock.

1) Basis of net income per share of common stock and diluted net income per share of common stock(1) Basic net income per share
Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

Net income attributable to owners of parent¥59,999¥64,219$601,303

Net income not attributable to common stock
shareholders

–

–

–

Net income attributable to owners of parent related
to common stock

59,99964,219601,303

Average number of shares (Thousand shares)

110,918

111,785

For the years ended February 20

Note:

Stocks held by Trust & Custody Services Bank, Ltd. (Trust Account E), which have been accounted for as treasury stock in the
consolidated financial statements, are excluded from the average number of shares.

2) Diluted net income per share
Millions of Yen

Thousands of
U.S. Dollars

2017

2018

2018

Adjustment attributable to owners of parent

¥–

¥–

$–

Increase in the number of shares of common stock
corresponding to subscription rights to shares(Thousand shares)

972

557

For the years ended February 20

37
FY2017 Nitori Holdings Co., Ltd.

21. Short-term and Long-term Loans Payable
Balance atFebruary 21,
2017

Balance atFebruary 20,
2018

Millionsof YenMillionsof YenThousands of
U.S. Dollars

Averageinterest
rate (%)

Short-term loans payable

¥–

¥–

$–

–

–

Current portion of long-termloans payable

625

2,000

18,726

0.4–

Current portion of leaseobligations

187

187

1,751

–

–

Long-term loans payable(excluding current portion)

–

8,000

74,9060.4

2019 – 2022

Lease obligations(excluding current portion)

2,330

2,143

20,068–2019 – 2032

Total

¥3,143¥12,330$115,453

–

–

Item

Repayment
term

Notes: 1. The average interest rate represents a weighted-average interest rate applicable to the loans payable balance at the fiscal
year-end.
2. The average interest rate applicable to lease obligations is not disclosed since related interest charges are included in theamount of lease obligations in the consolidated balance sheet.
3. The repayment schedule of long-term loans payable due within 5 years as of February 20, 2018 is as follows:
Long-term loans payable (excluding current
portion)Millions of Yen

Thousands of
U.S. Dollars

Over 1 year less than 2 years¥2,000$18,726

Over 2 years less than 3 years

2,000

18,726

Over 3 years less than 4 years

2,000

18,726

Over 4 years less than 5 years

2,000

18,726

4. Maturities of lease obligations, excluding the current portion, due within 5 years as of February 20, 2018 are as follows:
Millions of Yen

Thousands of
U.S. Dollars

Over 1 year less than 2 years¥187$1,751

Over 2 years less than 3 years

187

1,751

Over 3 years less than 4 years

187

1,751

Over 4 years less than 5 years

187

1,751

Lease obligations (excluding current portion)

22. Asset Retirement Obligations
Disclosures are omitted because asset retirement obligations are insignificant. Details of asset retirement
obligations are also not disclosed because asset retirement obligations constituted less than 1% of the total of
liabilities and net assets on the consolidated balance sheet.

23. Subsequent Event
Not applicable.

38
FY2017 Nitori Holdings Co., Ltd.