ABC-MART, INC.
Annual Report 2014
For the year ended February 28, 2014

Contents
1

Consolidated Balance Sheets3

Consolidated Statements of Income

5

Consolidated Statements of Comprehensive Income

6

Consolidated Statements of Changes in Net Assets

7

Consolidated Statements of Cash Flows9

Notes to Consolidated Financial Statements
Independent Auditors' ReportConsolidated Balance Sheets
ABC-MART, INC. and consolidated subsidiaries
As of February 28, 2014 and 2013
Thousands of yen
ASSETS

2014

2013

Current Assets:
Cash and deposits (Notes 3, 4 and 11)¥78,884,221¥

68,852,158

Notes and accounts receivable – trade (Note 4)

6,463,290

5,064,083

Less － allowance for doubtful accounts (Note 4)(30,704)(23,645)

Net trade receivables

6,432,586

5,040,438

Merchandise and finished goods

38,962,423

32,682,063

Work in process

13,583

44,833

Raw materials and supplies

479,689

485,939

Currency Option (Notes 4 and 7)－

1,314,421

Deferred tax assets (Note 9)

1,414,815

1,166,442

Other

3,355,309

3,480,723

129,542,628

113,067,021

Buildings and structures

22,758,728

20,886,196

Tools, furniture and fixtures

8,012,820

6,266,116

Land (Note 11)

17,696,636

17,483,893

Total current assets

Noncurrent assets:
Property, plant and equipment (Notes 6, 14 and 15):

Constructions in progress

90,87160,071

Other593,253

468,848

49,152,310

45,165,126(16,367,393)(13,576,767)

32,784,917

31,588,359

2,682,855

2,465,569

Goodwill

7,195,840

6,821,704

Other

1,770,403

1,506,138

11,649,099

10,793,412

Investment in securities (Notes 4 and 5)

125,485

109,651

Investment in non-consolidated subsidiaries (Note 4)

94,07584,175Long-term loans receivable (Note 4)

2,575,092

928,471

Lease and guarantee deposits (Notes 4, 11 and 17)

18,960,429

16,494,299

Other

1,150,443

1,094,030(1,138)－

Total investments and other assets

22,904,387

18,710,627

Total noncurrent assets

67,338,404

61,092,399

Total
Less accumulated depreciation
Net property, plant and equipment

Intangible assets:
TrademarkTotal intangible assets

Investments and other assets:

Less-allowance for doubtful accounts

Total assets

See accompanying notes to consolidated financial statements.

¥ 196,881,032¥

174,159,421

Consolidated Balance Sheets
ABC-MART, INC. and consolidated subsidiaries
As of February 28, 2014 and 2013
Thousands of yen
LIABILITIES

2014

2013

Current Liabilities:
Notes and accounts payable:
Trade (Notes 4 and 11)¥

Facilities (Note 4)

8,551,245¥

778,252

7,477,486
936,279

Short-term loans payable (Notes 4, 8 and 11)

3,278,312

4,135,826

Current portion of long-term loans payable (Notes 4, 8 and 11)

1,002,800

1,002,800

Income taxes payable (Note 4)

7,113,474

7,455,270

Provision for bonuses

654,690642,716

Provision

234,480

178,038

Asset retirement obligations (Note 10)26,927

17,861

5,722,294

4,114,601

27,362,478

25,960,880

Convertible bonds (Notes 4 and 8)

33,000,000

33,000,000

Long-term loans payable (Notes 4, 8 and 11)

1,500,000

2,502,800

Provision

658,157

798,867

Asset retirement obligations (Note 10)

243,579

218,207－265,084

2,197,632

1,648,895

Total noncurrent liabilities

37,599,368

38,433,856

Total liabilities

64,961,847

64,394,736

Other
Total current liabilities

Noncurrent liabilities:

Currency option (Notes 4 and 7)
Other

Commitments and contingent liabilities (Note 11)
NET ASSETS (Note 12)
Shareholders’ equity:
Common stock, authorized 334,500,000 shares, issued 75,294,429 shares
3,482,930

3,482,930

Capital surplus

in 2014 and 2013

7,488,686

7,488,686

Retained earnings

112,310,302

96,311,831

(522)

(522)

123,281,397

107,282,926

Treasury stock, at cost, 164 shares in 2014 and 2013
Total shareholders’ equity

Accumulated other comprehensive income (Note 13):
Net unrealized gains (losses) on available-for-sale securities
Foreign currency translation adjustments
Total accumulated other comprehensive income
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and net assets

See accompanying notes to consolidated financial statements.

¥

23,24813,4328,241,814

2,177,708

8,265,062

2,191,141

372,724

290,616

131,919,185

109,764,684

196,881,032¥

174,159,421

Consolidated Statements of Income
ABC-MART, INC. and consolidated subsidiaries
For the years ended February 28, 2014 and 2013
Thousands of yen
2013

2014
Net sales¥

Cost of sales

188,045,018¥

159,418,140

84,317,067

68,109,105

103,727,951

91,309,034

Packing and transportation expenses

2,162,656

2,210,771

Advertising expenses

7,263,553

6,931,745

Warehousing expenses

2,044,219

1,293,183

Directors' compensations, salaries and allowances

18,737,865

16,431,626

Bonuses

1,139,234

1,083,784

647,109

640,700

Gross profit

Selling, general and administrative expenses:

Provision for bonuses
Legal and employee benefits expenses

2,418,684

2,113,560

Rents

17,738,673

15,326,723

Depreciation and amortization

3,885,923

3,250,878

Utilities expenses

2,050,493

1,793,573

Commission fee

3,461,581

2,677,576

Taxes and dues

873,247

668,623

796

1,820

Amortization of goodwill

1,023,343

549,441

Other

6,154,542

5,959,908

69,601,927

60,933,917

Allowance for doubtful accounts

Total
Operating income(Continued)¥

34,126,024¥

30,375,117

Thousands of yen
2014

2013

Other income (expenses):
Interest income¥

79,574¥46,729Interest expenses(53,899)(74,012)

Foreign exchange gains

60,92380,501－

106,753

Gain on cancellation of derivatives

1,713

－

Loss on cancellation of derivatives(1,051,049)－

Gain on valuation of derivatives

Rent income

664,362

481,790

Rent expenses(347,882)（271,275）

62,70657,450Advertising income
Gain on sales of noncurrent assets (Notes 14)

935

545

Loss on sales of noncurrent assets (Notes 14)

－

(343)

(175,150)(114,733)

Loss on liquidation of business－(65,595)

Loss on valuation of golf club membership－(7,075)

Impairment loss (Note 15)(263,840)(408,046)

Loss on disposal of merchandise(95,575)－

Other, net

222,269(55,781)

Total(894,911)(223,093)

33,231,112

30,152,024

Current

13,598,256

13,126,285

Deferred(319,740)(220,612)

13,278,516

12,905,672

19,952,596

17,246,351(36,470)(51,225)

Loss on retirement of noncurrent assets (Note 14)

Income before income taxes and minority interests

Income taxes (Note 9):

Total
Income before minority interests
Minority interests
Net income

See accompanying notes to consolidated financial statements.

¥

19,989,067¥

17,297,577

Consolidated Statements of Comprehensive Income
ABC-MART, INC. and consolidated subsidiaries
For the years ended February 28, 2014 and 2013
Thousands of yen
2014
Income before minority interests¥

19,952,596

2013¥

17,246,351

Other comprehensive income (Note 13):
Net unrealized gains on available-for-sale securities

9,815

19,178Foreign currency translation adjustments

6,113,174

3,651,247

Total other comprehensive income

6,122,990

3,670,426

Comprehensive Income¥

26,075,586¥

20,916,777¥

26,062,988¥

20,926,789

Comprehensive income attributable to:Shareholders of ABC-MART, INC.
Minority interests

See accompanying notes to consolidated financial statements.

12,598(10,012)

Consolidated Statements of Changes in Net Assets
ABC-MART, INC. and consolidated subsidiaries
For the years ended February 28, 2014 and 2013
Thousands of yen
Accumulated other comprehensive
Shareholders’ equity

Balance at February 29, 2012¥

incomeNet unrealized

Foreign

Minority

gains (losses) on

currencyinterests in

CommonCapitalRetained

Treasury

available-for-saletranslation

consolidated

stock

surplusearnings

stock, at cost

securities

adjustments

subsidiaries

3,482,930¥

7,488,686¥ 82,402,496

¥

(522)

¥

(5,746)¥(1,432,324)¥

300,628

Total net assets¥

92,236,148

Net income－－

17,297,577

－

－

－

－

17,297,577

Dividends from surplus－－(3,388,241)

－

－

－

－

(3,388,241)

Net change during the year

－

－

－

－

19,1783,610,033(10,012)3,619,200

3,482,930

7,488,686

96,311,831(522)

13,432

2,177,708

290,616

109,764,684－－

19,989,067

－

－

－

－

19,989,067

Dividends from surplus－－(3,990,596)

－

－

－

－

(3,990,596)

Net change during the year

－

－

－

－

9,815

6,064,106

82,1086,156,029

7,488,686¥112,310,302

Balance at February 28, 2013
Net income

Balance at February 28, 2014¥

3,482,930¥

See accompanying notes to consolidated financial statements.

¥

(522)

¥

23,248¥8,241,814¥

372,724¥

131,919,185

Consolidated Statements of Cash Flows
ABC-MART, INC. and consolidated subsidiaries
For the years ended February 28, 2014 and 2013
Thousands of yen
2014

2013

Net cash provided by (used in) operating activities:
Net income before income taxes and minority interests¥

Depreciation and amortization
Increase in provision for bonuses
Increase (decrease) in allowance for doubtful accounts

33,231,112¥

30,152,024

3,885,923

3,250,878

8,583

62,672

3,636(12,264)

Interests and dividends income(80,297)(47,453)

Interest expenses

53,89974,012Foreign exchange gains(85,952)(104,166)

Loss on valuation of investment in securities－

16,582Gain on valuation of derivatives－(106,753)

1,049,336－

174,214

114,531

Loss on cancellation of derivatives
Loss on sales and retirement of noncurrent assets
Impairment loss

263,840

408,046

Increase in notes and accounts receivable － trade(853,310)(620,481)(4,455,464)(5,362,064)

Increase in inventories
Increase (decrease) in notes and accounts payable － trade659,116(915,849)

3,002,399

723,693

36,857,037

27,633,408

Interest and dividends received

56,90832,920Interest expenses paid

(52,708)(76,415)(13,863,300)(12,193,959)

Other
Subtotal

Income taxes paid
Net cash provided by operating activities(Continued)¥

22,997,936¥

15,395,953

Thousands of yen
2014

2013

Net cash provided by (used in) investing activities:
Payment for time deposits¥

Proceeds from withdrawal of time deposits－¥(5,400)33,236

120,526(3,862,523)(4,093,447)

4,918

5,137

(466,501)(419,560)

Payment for removal of stores(92,037)(55,935)

Increase in loans receivable(1,770,000)(185,000)

85,23383,062

Payment for purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payment for purchase of intangible assets

Proceeds from collection of loans receivable
Payment for purchase of investment in a subsidiary resulting in change in scope of
consolidation(10,999,115)－

Payment for lease and guarantee deposits(1,993,985)(2,562,575)

Proceeds from collection of lease and guarantee deposits

586,420

1,011,240

Other, net(98,194)(102,608)(7,573,433)(17,203,674)(972,001)

864,471

Repayment of long-term loans payable(1,002,800)(2,259,060)

Cash dividends paid

(3,989,669)(3,384,043)

69,510－－33,000,000(21,823)(11,371)

Net cash provided by (used in) financing activities(5,916,784)

28,209,995

Effect of exchange rate changes on cash and cash equivalents

475,789

378,867

Net increase in cash and cash equivalents

9,983,508

26,781,142

Cash and cash equivalents at beginning of period

68,772,082

41,990,939

Net cash used in investing activities
Net cash provided by (used in) financing activities:
Net increase (decrease) in short-term loans payable

Proceeds from share issuance to minority shareholders
Proceeds from issuance of convertible bonds
Other, net

Cash and cash equivalents at end of period (Note 3)

See accompanying notes to consolidated financial statements.

¥

78,755,590¥

68,772,082

Notes to Consolidated Financial Statements
ABC-MART, INC. and consolidated subsidiaries

1. Basis of Presentation and Financial Statement Translation
The accompanying consolidated financial statements of ABC-MART, INC. and consolidated subsidiaries (“the Group”) are prepared on thebasis of accounting principles generally accepted in Japan, which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards (“IFRS”), and are compiled from the consolidated financial statements preparedby

ABC-MART, INC. (“the Company”) as required by the Financial Instruments and Exchange Act of Japan. Effective March 1, 2009, theCompany adopted the “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial
Statements” (PITF No. 18). In accordance with PITF No. 18, the accompanying consolidated financial statements for the years ended
February 28, 2014 and 2013 have been prepared by using the accounts of foreign consolidated subsidiaries prepared in accordance with either
IFRS or accounting principles generally accepted in the United States as adjusted for certain items.
In addition, for the convenience of readers outside Japan, the accompanying consolidated financial statements, including the notes thereof,
have been reclassified and contain additional information which is not required under accounting principles generally accepted in Japan.
As permitted under the Financial Instruments and Exchange Law of Japan, amounts of less than one thousand yen have been omitted. As
a result, the totals shown in the accompanying Consolidated Financial Statements do not necessarily agree with the sums of the individual
amounts. Certain reclassifications have been made to prior year balances in order to conform to the current year presentation.

2. Summary of(1)

Significant Accounting Policies

Basis of Consolidation

The accompanying Consolidated Financial Statements include the accounts of the Company and 12 subsidiaries (12 subsidiaries as ofFebruary 28, 2013) with an exception of 2 non-consolidated subsidiaries due to immaterial impact on the consolidated financial statements.
The investments in the non-consolidated subsidiaries are not accounted for by the equity-method because of the immaterial impact on the
consolidated financial statements in aggregated amount of net income and retained earnings, and therefore carried at cost (¥94,075 thousandand ¥84,175 thousand as of February 28, 2014 and 2013, respectively).
During the year ended February 28, 2014, the Company established a subsidiary of which the Company owns 100% of its shares. The
subsidiary is not included in scope of consolidation due to immaterial effects on the consolidated results.
The year end at ABC-MART KOREA, INC., ABC-MART TAIWAN, INC., LaCrosse Footwear, Inc. and its 6 subsidiaries is December 31.
The financial statements as of December 31 are used in preparing the consolidated financial statements for the subsidiaries. All materialtransactions during the period from January 1 to balance sheet date are adjusted for in the consolidation process.
(2)

Securities

Available-for-sale securities are classified into two categories, where (a) the fair value is available and (b) the fair value is not available.
(a)Securities whose fair value is available are valued at the quoted market price prevailing at the end of the year. Net unrealized gains orlosses on these securities are reported as a separate component of net assets at a net-of-tax amount. Cost of sales is determined using themoving-average method.

(b)

Securities whose fair value is not available are valued at cost and the cost is determined using the moving-average method.

(3)

Inventories

Inventories held for sale in the ordinary course of business are stated at cost. The book value of inventories is reduced on the basis of declines
in profitability and is determined principally by the average method for merchandise, the FIFO method for finished goods, work in process andraw materials and supplies in overseas subsidiaries, and the specific identification method for raw materials and supplies in the Company andits domestic subsidiaries.

(4)Property, Plant and Equipment(a)

The Company and its domestic subsidiaries

Property, plant and equipment are stated at cost. Depreciation is mainly calculated using the declining-balance method at rates based on theestimated useful lives and residual values as prescribed by Japanese tax laws, except for the buildings (excluding building facilities) acquiredon or after April 1, 1998, which are depreciated based on the straight-line method.
(Change in accounting policies)
Following the revision of the Corporate Tax Act, the Company and its domestic consolidated subsidiaries changed the depreciation method forproperty, plant and equipment which were acquired on and after March 1, 2013 to comply with the revised Corporate Tax Act in the year
ended February 28, 2014. The impact of this change on consolidated result is immaterial.
(b)

Foreign subsidiaries:

Depreciation is calculated using the straight-line method.
(5)

Intangible Assets

Intangible assets, excluding software for internal use and goodwill, are amortized using the straight-line method over the estimated useful
lives as prescribed by Japanese tax laws. Software for internal use is amortized using the straight-line method over an estimated useful life of
five years. The useful life of goodwill is individually estimated based on a reasonable determination. Goodwill is amortized using thestraight-line method over the period determined.
(6)

Leased assets

Depreciation of leased assets from finance lease transactions that are deemed to transfer ownership of the leased property is calculated using
the same method applied to noncurrent assets of which the Company has ownership. Depreciation of leased assets from finance leasetransactions that are not deemed to transfer ownership of the leased property is calculated using the straight-line method with no residual
value except for the finance lease transactions executed prior to March 1, 2009 which are accounted for by the same method as that applied toordinary operating leases.
(7)

Allowances for Doubtful Accounts

Allowances for doubtful accounts are provided in amounts management considers sufficient to cover possible losses on collection. With respect
to normal trade accounts receivable, it is stated at an amount based on the actual rate of historical bad debts, and for certain doubtfulreceivables, the uncollectible amount is individually estimated.
(8)

Provision for Bonuses

As a provision for the payment of bonuses to employees, an appropriate portion of the estimated total bonus payment requirement has beenaccounted for in the year under review.
(9)

Foreign Currency Translation

All assets and liabilities of the Company and its domestic consolidated subsidiaries denominated in foreign currencies are translated into
Japanese yen at the exchange rate in effect at the respective balance sheet dates. Translation gains or losses are included in the accompanying
Consolidated Statements of Income.
All balance sheet accounts of foreign subsidiaries are translated into Japanese yen at the exchange rate in effect at the respective balance
sheet dates except for shareholders’ equity, which is translated at the historical rates. All income and expense accounts are translated at the
average exchange rate for the period. The resulting translation adjustments are included in the accompanying Consolidated Balance Sheets
under “Foreign currency translation adjustments” and “Minority interests in consolidated subsidiaries.”(10) Derivative Transactions and Hedge Accounting
Derivative financial instruments are valued at fair value.
(a)Hedge accounting

If derivative financial instruments are used as hedges and meet certain hedge criteria, recognition of gains or losses resulting from changes intheir fair value is deferred until the related losses or gains on the hedged items are recognized. Forward foreign exchange contracts whichmeet specific matching criteria are translated at the foreign exchange rate stipulated in the contracts.

(b)Hedging instruments and hedged items


Hedging instruments – Derivative transactions (forward foreign exchange contracts)Hedged items – Hedged items are primary trade payables denominated in foreign currencies which have risks associated withadverse fluctuations in foreign currency.

(c)Hedge policy

Hedging transactions are being performed to mitigate future losses on the hedged items.
(d)Assessment of hedge effectiveness

Effectiveness of hedge is assessed by verifying if the foreign currency risks on the hedged items are mitigated.
(11) Cash and Cash Equivalents
Cash and cash equivalents in the accompanying Consolidated Statements of Cash Flows are comprised of cash on hand, demand deposits, andshort term investments with maturities of three months or less from the date of acquisition, that are liquid, readily convertible into cash, andare subject to minimum risk of price fluctuation.
(12) Accounting for Consumption Taxes
The Japanese consumption taxes withheld and consumption taxes paid are not included in the accompanying Consolidated Statements ofIncome.

3. Cash and Cash Equivalents
Cash and Cash equivalents as of February 28, 2014 and 2013 consist of the following:Thousands of yen

Cash and deposits

2014

2013

¥ 78,884,221¥ 68,852,158(128,630)(80,075)¥ 78,755,590¥ 68,772,082

Time deposits with maturities over three months
Cash and cash equivalents at end of period

4. Financial Instruments(1)

Qualitative information on financial instruments(a)Policies relating to financial instruments

The Group invests its funds mainly in short-term deposits and raises funds by loans from financial institutions and issuance of bonds.
Derivative transactions are foreign exchange forward contracts which are only used to avoid the risks described below. The Group does notengage in derivative transactions for speculative purposes.
(b)

Details of financial instruments

and associated risk

Trade notes and accounts receivable, which are mostly related to tenant sales and credit card sales of commercial facilities, are exposed tocredit risk of customers.
Investment securities, which are mostly related to foreign debt securities and stocks of financial institutions, are exposed to market pricevolatility risk and credit risk of issuers.
Investment in non-consolidated subsidiary does not have market price and is exposed to impairment risk due to financial result of thesubsidiary.
Long-term loans receivable, which are related to loans to business partners and leasehold contracts of stores, are exposed to credit risk ofborrowers.
Lease and guarantee deposits, which are mostly related to leasehold contracts of stores, are exposed to credit risk of lessors.
All notes and accounts payable and income taxes payable are due in one year.
Short-term loans payable are mostly related to funds used as payment of imported goods and Long-term loans payable are mostly related
to capital expenditures. Loans are generally borrowed with fixed rate and therefore, there is no interest rate risk.
Convertible bonds are related to funds used as mid-term capital investment and the term of redemption of the convertible bonds are 3
years and 11 months at the longest.
Derivative transactions are foreign exchange forward contracts which are used to mitigate the risk of currency exchange rates
fluctuations for receivables and payables denominated in foreign currencies. The Company also uses derivatives as hedging instruments,
which is described in Note 2. “Summary of Significant Accounting Policies”.
(c)Risk management systems relating to financial instruments(i)Management of credit risk (risk relating to non-performance of a contract obligation by a counterparty, etc.)
With respect to trade receivables related to credit card sales, credit risk is fairly low because counterparties are group of financial
institutions. With respect to trade receivables related to tenant sales, as same as lease, guarantee deposits and construction assistancefund receivables, Store Development Department monitors the counterparty to reduce credit risk by early identification of a possible
default caused by financial trouble of the counterparty.
With respect to long-term loans receivable related to loans to business partners, quarterly monitoring of financial condition of theborrowers are performed to reduce credit risk by early identification of a possible default caused by financial trouble.
The Company believes that the credit risk under derivative transactions is fairly low because counterparties of derivativetransactions are limited to financial institutions with a high credit rating.

(ii)Management of market risks (risks associated with fluctuations in foreign currency exchange as well as interest rates, etc.)
With respect to investment securities and investment in non-consolidated subsidiary, the Group quarterly monitors fair values as well as
the financial status of issuers (counterparties).
Basic policy of derivative transactions are decided by the Board of Directors and Import Team in Accounting Department performs
and manages transactions. Balance of derivative transactions and status of gain and losses are periodically reported to the Board of
Directors.

(iii)

Management of liquidity risks associated with the procurement of funds (the risk of being unable to make payments on due dates)(d)Supplementary explanation for fair values, etc. of financial instruments

The Group manages its liquidity risk by adequate preparation and update of financial planning depending on the status of funds.
Fair values of financial instruments are determined by market prices. If no market price is available, the fair value is based on the value thatis calculated in a reasonable manner. The determination of such value contains variable factors, and the adoption of wide ranging anddiffering assumptions may cause values to change.
(2)

Fair Value of financial instruments

Book values and fair values of the financial instruments on the Consolidated Balance Sheet on February 28, 2014 and 2013 are as follows.
Financial instruments whose fair value is deemed highly difficult to measure are excluded from the table.
Thousands of yen
2014

Cash and deposits

Book value

Fair value

Difference

¥

¥

¥

78,884,221

Notes and accounts receivable – trade6,463,290

Less － allowance for doubtful accounts(30,704)

Net trade receivables

78,884,221－

6,432,586

6,432,586－

105,050

105,050－

Long-term loans receivable

2,575,092

2,600,078

24,985

Lease and guarantee deposits

15,232,984

15,592,520

359,536

Total assets

103,229,935

103,614,457

384,521

Notes and accounts payable – trade

Investment securities

8,551,245

8,551,245－

Notes payable – facilities

778,252

778,252－

Short-term loans payable

3,278,312

3,278,312－

Income taxes payable

7,113,474

7,113,474－

Convertible bonds

33,000,000

37,042,500

4,042,500

Long-term loans payable (including current portion)

2,502,800

2,513,645

10,845

Total liabilities¥

55,224,084¥

59,277,430¥

4,053,345

Thousands of yen
2013

Cash and deposits

Book value

Fair value

Difference

¥

¥

¥

68,852,158

Notes and accounts receivable – trade

68,852,158－

5,064,083

Less － allowance for doubtful accounts(23,645)
5,040,438

5,040,438－

Investment securities

Net trade receivables

89,21689,216－Long-term loans receivable

928,471946,670

18,199Lease and guarantee deposits

12,725,554

13,014,689

289,135

Total assets

87,635,839

87,943,173

307,334

Notes and accounts payable – trade

7,477,486

7,477,486－

Notes payable – facilities

936,279

936,279－

Short-term loans payable

4,135,826

4,135,826－

Income taxes payable

7,455,270

7,455,270－

Convertible bonds

33,000,000

34,270,500

1,270,500

Long-term loans payable (including current portion)

3,505,600

3,529,476

23,87656,510,462

57,804,838

1,294,376

Total liabilities
Derivative transactions *¥1,049,336¥

1,049,336¥－* The value of assets and liabilities arising from derivative transactions are shown by net value. Net liabilities are shown in parentheses.
Note 1: Items relating to the calculation of the fair value of financial instruments and derivative instruments(Assets)(1)

Cash and deposits and notes and accounts receivable, trade
Given that those items are of short duration, their current value approximates their book value, and therefore the fair value is deemed tobe that book value.

(2)

Investment securities
Fair value of equity securities is based on quoted market prices, and fair value of debt securities is based on quoted market prices orquotes obtained from financial institutions. Additional information on securities classified by holding purpose is presented in Note 2.
“Summary of Significant Accounting Policies”.

(3)Long-term loans receivable
The fair value of long-term loans receivable is based on the present value, which is obtained by discounting the total of principal andinterest by the interest rate that would be applied if similar new loans were entered into.

(4)

Lease and guarantee deposits
Given that lease and guarantee deposits are considered redeemable after a fixed period, their market value is calculated at a present
value discounted across the period to maturity at the government bonds interest rates closest to the maturity date.

(Liabilities)(1)

Notes and accounts payable – trade, notes payable – facilities, short-term loans payable and income taxes payable
Given that those items are of short duration, their current value approximates their book value, and therefore the fair value is deemed tobe that book value.

(2)

Convertible bonds
The fair value of convertible bonds is based on market price.

(3)Long-term loans payable (including current portion)
The fair value of long-term loans payable is based on the present value, which is obtained by discounting the total of principal andinterest by the interest rate that would be applied if similar new borrowings were entered into.

Note 2: Items for which fair value is deemed highly difficult to measure
Thousands of yen
2014

2013

Investment securities:
Non-listed securities (*1)¥

20,435¥20,435Investment in non-consolidated subsidiary:
Non-listed securities (*2)
Lease and guarantee deposits (*3)

94,07584,175

3,727,444

3,768,744(*1) Non-listed securities classified as investment securities are not included in “Investment securities” in the tables of fair value of financial
instruments above since determining their estimated fair values was deemed to be highly difficult, due to the fact that these do not havemarket prices.
(*2) Investment in non-consolidated subsidiary are not included in the tables of fair value of financial instruments above since determining
their estimated fair values was deemed to be highly difficult, due to the fact that these do not have market prices.
(*3) These are not included in “Lease and guarantee deposits” in the tables of fair value of financial instruments above since determining
their fair values was deemed to be highly difficult, due to the fact that the amount to be refunded cannot be reasonably estimated.
Note 3: Redemption schedule for receivables and marketable securities with maturities
Thousands of yen
2014

Within one year
Deposits
Notes and accounts receivable – trade¥ 78,573,392

After one year

After five years

within five years

within ten years¥

6,463,290

¥

－

－

－

After ten years
¥

－

－
－

Investment securities:
Available-for-securities with maturities:
Debt securities

63,606－－－75,583630,988

1,693,849

174,671

3,045,109

11,766,656

1,110,857

404,876¥ 88,220,982¥ 12,397,644

Long-term loans receivable
Lease and guarantee deposits (*)
Total

¥

2,804,707¥

579,547

Thousands of yen
2013

Within one year
Deposits
Notes and accounts receivable – trade¥ 68,574,899

After one year

After five years

within five years

within ten years¥

5,064,083

－

¥

－

－

After ten years
¥

－

－
－

Investment securities:
Available-for-securities with maturities:
Debt securities－

56,848－－70,032

291,155

347,063

220,220

3,073,462

9,369,110

829,487

378,073

Long-term loans receivable
Lease and guarantee deposits (*)
Total
(*)

¥ 76,782,478¥

9,717,114¥

1,176,550¥

598,293

Items for which fair values is deemed to be highly difficult, due to the fact that the amount to be refunded cannot be reasonably
estimated, are not included in “Lease and guarantee deposits”.

5. Securities
Book value and acquisition cost of available-for-sale securities as of February 28, 2014 and 2013 are as follows:
Thousands of yen
2014Book value

Acquisition cost

Difference

Securities with book value exceeding acquisition cost:
Equity securities¥

Debt securities
Other
Sub-total

31,959¥17,788¥14,17073,09149,75923,332－－－

105,050

67,54737,503－－－

Securities with book value not exceeding acquisition cost:
Equity securities
Debt securities

－

－

－

Other

20,43520,435－Sub-total

20,43520,435

－

Total

¥

125,485¥

87,982¥37,503Thousands of yen
2013
Book value

Acquisition cost

Difference

Securities with book value exceeding acquisition cost:
Equity securities¥

Debt securities
Other
Sub-total

25,627¥

17,788¥

7,839

63,58949,75913,830－－－89,21667,547

21,669Securities with book value not exceeding acquisition cost:
Equity securities

－

－

－

Debt securities

－

－

－

Other

20,43520,435－Sub-total

20,43520,435

－

Total

¥

109,651¥

87,982¥

21,669

6. Leases(1)

Finance leases

Leased properties are store facilities (tools, furniture and fixtures) for retail business and leased intangible assets are software.
Finance lease transactions that are not deemed to transfer ownership of the leased property to the lessee and that were concluded prior
to March 1, 2009 are accounted for by the same method as that applied to ordinary operating leases.
A summary of assumed amounts of acquisition cost, accumulated depreciation, and net book value, including the interest portion, as ofFebruary 28, 2014 and 2013 are as follows:
Thousands of yen
2014

2013

Tools, furniture and fixtures:
Acquisition costs

¥

5,429

Accumulated depreciation
Net book value
Lease payments¥¥(4,848)(4,072)

581

1,357

775

Depreciation expense (*)

5,429

¥

1,347

775

1,347

(*) Depreciation expense is computed using the straight-line method over the lease term assuming no residual value.
The future lease payments of the Company’s finance leases, including the interest portion, as of February 28, 2014 and 2013 are as follows:
Thousands of yen
2014

Due within one year¥581

Due after one year

¥

775
581

－

Total

(2)

2013

¥

581

¥

1,357

Operating leases

The amounts of outstanding future lease payments under lease agreements other than finance leases, which are non-cancelable, including theinterest portion, as of February 28, 2014 and 2013 are as follows:
Thousands of yen
2014

Due within one year¥

Due after one year
Total

1,692,825

2013¥

4,010,281¥

5,703,107

1,430,535
2,717,412¥

4,147,947

7. Derivatives
There are no outstanding derivative transactions as of February 28, 2014. Outstanding derivatives transactions not applicable under hedge
accounting criteria as of February 28, 2013 are summarized as follows:
Thousands of yen
2013
Contract value
Total

After one year

Fair value

¥

¥

Gains

Currency option contracts:
Sell, put – US dollar¥ 103,140,600

Buy, call – US dollar

35,045,500

25,457,800¥ 138,186,100¥ 101,831,200

Total

Note 1:

76,373,400－¥

1,049,336¥

1,049,336－
1,049,336¥

1,049,336

Currency option contracts are zero-cost option contracts and no option premium are paid and received. With respect to the zero-cost
option contracts, fair value and gains of sell, put and buy, call contracts are shown in net amounts.

Note 2:

Fair value of derivative transactions is based on quotes obtained from financial institutions.

8. Short-Term and Long-Term Debt
Short-term and long-term debt as of February 28, 2014 and 2013 consist of the following:Thousands of yen
2014
Short-term loans payable¥

Current portion of long-term loans payable

3,278,312

Total short-term and long-term debt¥

4,135,826
1,002,800

21,020－1,500,000

2,502,800

38,377－33,000,000

33,000,000

Lease obligations (excluding current portion)
Convertible bonds¥

1,002,800

Current portion of lease obligations
Long-term loans payable (excluding current portion)

2013

38,840,511¥

40,641,426

Weighted-average rate of interest:
Short-term loans payable

0.49%

0.96%

Current portion of long-term loans payable

0.88%

0.89%

Current portion of lease obligations

1.90%

－

Long-term loans payable (excluding current portion)

0.88%

0.89%

Lease obligations (excluding current portion)

1.92%

－

－

－

Convertible bonds

On February 5, 2013, the Company issued ¥ 33,000,000 thousand of Euro-yen convertible bonds with stock acquisition rights due in 2018.
Summary of the convertible bonds with stock acquisition right are as follows:
Type of stock to be issued upon conversion

Common stock of ABC-MART, INC.

Issue price of stock acquisition rights－

Conversion price (yen)¥ 4,588

Number of shares of common stock (Note 1)

7,192,676

Issue price of bonds (thousands of yen)

¥ 33,000,000

Common stock issued upon conversion－

Percentage of stock acquisition rights granted

100%

Exercise period of conversion

February 19, 2013 to January 22, 2018

PledgeUnsecured

Redemption dateFebruary 5, 2018

Balance of stock acquisition rights as of February 28, 2014－

Note 1: Numbers of shares of common stock are calculated on the assumption that all convertible bonds with stock acquisition rights areconverted as of February 28, 2014.
Note 2: Exercise of a stock acquisition right causes the corresponding bond to be cancelled in lieu of a cash payment of purchase of shares, andthe amount of the convertible bonds with stock acquisition right is the same as the amount of issuance.

The aggregate annual maturities of long-term debt including convertible bonds within 5 years after the years of February 28, 2014 aresummarized as follows:

Thousands of yen
Year ending February 28 or 29,
2016

2014
¥

1,021,405

2017

514,9872018

33,000,276

2019

283

Total long-term debt¥

34,536,951

9. Income Taxes(1)

The significant components of deferred tax assets and liabilities as of February 28, 2014 and 2013 are as follows:
Thousands of yen
2014

2013

Deferred tax assets:
Accrued enterprise tax¥

490,270¥489,207

Provision for bonuses

241,505

221,417

Depreciation and amortization

80,62287,511

Allowance for doubtful accounts

12,036

3,682

Loss on valuation of inventories

320,148

229,991

Impairment loss

58,90880,697Tax laws adopted foreign subsidiaries

72,535

126,847

Accrued social insurance

34,716

31,402

Accrued business office tax

39,071

32,997

Asset retirement obligation

427,713367,838

Allowance for accrued pension and severance costs

285,924

302,083

Other

461,166

254,676

Total deferred tax assets before net of valuation allowances

2,524,619

2,228,354

Valuation allowances(133,212)(110,735)

Total deferred tax assets

2,391,406

2,117,618(261,261)(127,342)(1,510,655)(1,288,719)(36,214)(27,380)(1,808,131)(1,443,442)

Deferred tax liabilities:
Property, plant and equipment
Intangible assets
Other
Total deferred tax liabilities
Net deferred tax assets(2)¥583,275¥

674,176

The reconciliation of the difference between the statutory tax rate and the effective tax rate for the years ended February 28, 2014 and2013 are as follows:
2014

Statutory tax rate

2013

38.0%

40.6%

Income taxes on retained earnings of family company

2.5%

2.1%

Tax rate difference in subsidiaries(1.3%)(0.9%)

Amortization of goodwill

1.2%

0.7%

Other

(0.4%)

0.3%

40.0%

42.8%

Adjustments:

Effective tax rate

(3)

Change in the income tax rate after the balance sheet date

Following the promulgation on March 31, 2014 of “Act for Partial revision of the Income Tax Act, etc.” (Act No. 10 of 2014), the special
corporate tax for reconstruction will not be imposed from the years beginning on or after April l, 2014. As a result of this application, theeffective tax rates, which are used to calculate deferred income taxes, will be reduced from 38.01% to 35.64% for temporary differences thatare expected to be eliminated in the year beginning on March 1, 2015. The impact of this change in tax rate on consolidated financial
statements is immaterial.

10. Asset Retirement Obligations(1)(a)

Asset retirement obligations recorded in the Consolidated Financial Statements.
Summary of asset retirement obligations
The Company recorded asset retirement obligations mainly related to the obligation to return stores to their original condition upon
termination of their lease contracts.

(b)

Calculation method of the asset retirement obligations
In the calculation process of asset retirement obligations, the Company estimates terms of use between 3 and 6 years and use
government bond interest rates as discount rates.

(c)

Changes in the total amounts of applicable asset retirement obligations in the year ended February 28, 2014 and 2013
Thousands of yen

As of March 1

2014

2013

¥ 236,069¥ 147,762

20,72572,610

Increase due to acquisition of property, plant and equipment
Adjustment due to passage of time

10,1195,541

Decrease due to settlement of asset retirement obligations(22,380)(5,567)

Others25,973

15,723¥ 270,506¥ 236,069

As of February 28(2)

Asset retirement obligations not included in the consolidated balance sheets
Asset retirement obligations for leasehold contracts of certain offices and stores, for which the related amount could not be reasonably
estimated because the period of use of the properties is uncertain and there is no current plan to vacate the properties, are not included in
the consolidated balance sheets.
For certain lease and guarantee deposits, instead of recording asset retirement obligations as liability, a reasonable estimate of theamount of deposits from rental properties, that cannot be recovered at the end of the leasehold contracts, is made, and the portion for thecorresponding year is recorded as expenses. Lease and guarantee deposits that are expected not to be recovered at the end of theleasehold contracts are ¥956,151 thousand and ¥1,018,497 thousand as of February 28, 2014 and 2013, respectively.

11. Commitment and Contingencies
The amount of assets pledged as collateral by the Company and corresponding liabilities as of February 28, 2014 and 2013 are as follows:
2014
Assets pledged:

Thousands of yen

Corresponding liabilities:

Thousands of yen

Land

¥

584,000

Accounts payable¥

79,570Cash and deposits¥

114,630

Accounts payable¥

45,928Bank loans

264,040

Note: Total assets of LaCrosse Footwear, Inc. (¥9,891,249 thousand) are pledged for a commitment line agreement.
2013
Assets pledged:

Thousands of yen

Corresponding liabilities:

Lease and guarantee deposits¥

810

Cash and deposits¥

140,317

Thousands of yen

Bank loans¥

Accounts payable¥

Bank loans

580,484
42,058280,009

Note: Total assets of LaCrosse Footwear, Inc. (¥7,871,203 thousand) are pledged for a commitment line agreement.

12. Net Assets
Net assets comprise three subsections, which are shareholders’ equity, accumulated other comprehensive income, and minority interests inconsolidated subsidiaries.
The Japanese Corporate Law (the “Law”) became effective on May 1, 2006, replacing the Japanese Commercial Code (the “Code”). The
Law is generally applicable to events and transactions occurring after April 30, 2006, and for the years ending after that date.
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common stock. However, acompany may, by a resolution of its board of directors, designate an amount not exceeding one-half of the prices of the new shares as additional
paid-in capital, which is included in capital surplus.
Under the Law, in cases where dividend distribution of surplus is made, the smaller of an amount equal to 10% of the dividend or theexcess, if any, of 25% of common stock over the total of additional paid-in capital and legal earnings reserve must be set aside as additional
paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained earnings in the accompanying Consolidated Balance
Sheets.
Under the Code, a company is required to set aside an amount equal to at least 10% of the aggregate amount of cash dividends and othercash appropriations as legal earnings reserve until the total of legal earnings reserve and additional paid-in capital equaled 25% of common
stock.
Under the Code, legal earnings reserve and additional paid-in capital could be used to eliminate or reduce a deficit by a resolution of theshareholders’ meeting or could be capitalized by a resolution of the board of directors. Under the Law, both of these appropriations generally
require a resolution of the shareholders’ meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Code, however, on condition thatthe total amount of legal earnings reserve and additional paid-in capital remained equal to or exceeded 25% of common stock, they wereavailable for distribution by a resolution of the shareholders’ meeting. Under the Law, all additional paid-in capital and all legal earnings
reserve may be transferred to other capital surplus and retained earnings, respectively, which are potentially available for dividends.
The maximum amount that a company can distribute as dividends is calculated based on the Non-Consolidated Financial Statements of theCompany in accordance with the Law.
At the annual shareholders’ meeting, held on May 28, 2014, the shareholders approved cash dividends amounting to ¥2,258,827
thousand. Such appropriations have not been accrued in the Consolidated Financial Statements as of February 28, 2014. Such appropriations
are recognized in the period in which they are approved by the shareholders.

13. Other comprehensive income
The following table presents reclassification adjustments and tax effects allocated to each component of other comprehensive income for theyear ended February 28, 2014 and 2013:
Thousands of yen
2014

2013

Net unrealized gains on available-for-sale securities:
Amount arising during the year¥

15,834

Reclassification adjustments for gains and losses included in net income¥

14,760－16,582Net unrealized gains on available-for-sale securities before tax

15,834

31,342

Tax effects(6,018)(12,163)

9,815

19,178

6,113,174

3,651,247¥ 6,122,990¥ 3,670,426

Net unrealized gains on available-for-sale securities
Foreign currency translation adjustments:
Amount arising during the year
Total other comprehensive income

14. Supplementary profit and loss information(1)

Components of gain on sales of noncurrent assets for the years ended February 28, 2014 and 2013 are as follows:
Thousands of yen
2014

Tools, furniture and fixtures

¥

¥

46

Vehicles

－

889

Total

(2)

2013

¥

545

935

¥

545

Components of loss on sales of noncurrent assets for the years ended February 28, 2014 and 2013 are as follows:
Thousands of yen
2014

2013

Vehicles

¥

－

¥

343

Total

¥

－

¥

343

(3)

Components ofloss on retirement of noncurrent assets for the years ended February 28, 2014 and 2013 are as follows:
Thousands of yen

Buildings and structures

2014

2013

¥ 27,781¥

9,943

Tools, furniture and fixtures

61,62349,313

Software

3,909

76

Store removal expenses

81,83555,399¥ 175,150¥ 114,733

Total

15. Impairment loss on property, plant and equipment
For the years ended February 28, 2014 and 2013, the Company recognized ¥263,840 thousand and ¥408,046 thousand of impairment loss,
respectively, on the following groups of assets:
Thousands of yen
Description

Location

Classification

2014

StoresUtazu town, Ayauta, Kagawa. and other. 75 stores

Buildings¥ 247,358(Close, 21 stores and renewals, 54 stores).

16,481Tools, furniture and fixtures
Total impairment loss

¥ 263,840

Thousands of yen
Description

Location

Classification

2013

StoresIsezaki city, Gunma. and other. 74 stores (Close, 20

Buildings¥ 372,672

stores and renewals, 54 stores).

Tools, furniture and fixtures
Total impairment loss

35,374¥ 408,046

Note: No impairment loss was allocated to leased properties for the years ended February 28, 2014 and 2013.
The Company groups its fixed assets by store, which is the minimum cash-generating unit. The book values of stores which are expected toclose or renew, or which incurred consecutive operating losses were reduced to recoverable amounts, and such deducted amounts wererecorded as an impairment loss. Values in use were used as recoverable amounts and relevant assets were evaluated by discounting estimatedfuture cash flows to which the 5% discount rates was applied.

16. Per Share Information
Net income and cash dividends per share for the years ended February 28, 2014 and 2013, and net assets per share as of February 28, 2014
and 2013 are as follows:
Yen
2014

2013

¥

¥

Net income per share:Basic

265.48

Diluted (*)

229.73242.33228.30Net assets per share:
Basic
Cash dividends per share¥

1,747.10¥

1,453.95

¥

50.00

¥

50.00

Basis for the calculation of basic and diluted net income per share for the years ended February 28, 2014 and 2013 are as follows:
Thousands of yen
2014

2013

Basic:Net income¥

Net income pertaining to common shareholders

19,989,067¥

17,297,577

19,989,067

17,297,577

75,294,265

75,294,265－－

7,192,676

7,192,676

Weighted-average number of shares of common stock
outstanding (shares)
Diluted:Adjustments of net income
Effect of dilutive securities – convertible bonds (shares)

Note: There is no item which had not been included in the calculation of diluted net income per share due to no dilutive effect.

17. Related Party Transaction
Information of the related parties is as follows:
Capital and
Related party

Classification

Voting rights

Addressinvestments

Business

Masahiro Miki

Major shareholder

－

－

－

Michiko Miki

Major shareholder

－

－

－

E.M Planning, LLC.

Company inwhich major

shareholders

andrelatives

majority

own

their
of

voting rights

Hamanishi Building Co.

Company inwhich major

shareholders

andrelatives

majorityownvoting rights

their
of

Shibuyaward,¥ 10,000 thousand

Real estate¥ 43,440 thousand

Real estateTokyo(held)
Directly
28.39%
Directly
12.59%
Directly
27.39%Nishi
ward,
Yokohama－Transactions between the Company and the related parties for the years ended February 28, 2014 and 2013 are as follows:
Thousands of yen
2014

2013

Balance of the transactions:
Masahiro Miki:
Prepaid expense¥

Lease and guarantee deposits

16,747
147,500¥

16,747
147,500

Michiko Miki:
Prepaid expense

14,437

14,437

Lease and guarantee deposits

97,50097,500Prepaid expense

39,35024,725

Lease and guarantee deposits

377,856

247,000

541－

Prepaid expense

16,80016,800

Lease and guarantee deposits

160,000

160,000¥ 191,400¥ 191,400

165,000

165,000

E.M Planning, LLC.:

Accrued expenses
Hamanishi Building Co.:

Transaction amounts:
Masahiro Miki:
Leasing of buildings
Michiko Miki:
Leasing of buildings
E.M Planning, LLC.:
Leasing of buildings
Advances

436,377

282,571

28,800,000

－

828

－

192,000

192,000

Receipt of commission
Hamanishi Building Co.:
Leasing of buildings
Note 1:Monthly rent and lease deposit in lease contracts are determined based on prevailing market prices. A part of leasing transactions ofbuildings is nominally conducted via trust bank.
Note 2:The transaction amount is exclusive of consumption taxes.

18. Segment Information(1)

Overview of reportable segments

With respect to its reportable segments, the Company is able to obtain delineated financial data from its structural units. Its segments are
subject to periodical review for the purpose of making decisions on allocation of managerial resources and evaluating business performance by
the Board of Directors.
The Group operates shoes retail stores, “ABC-MART” all over the world and sells retail products mainly shoes. In Japan, The Company,
ABC-MART, INC., operates its business, and in overseas, ABC-MART, KOREA, ABC-MART, TAIWAN and LaCrosse Footwear, Inc. (U.S.A)
operate their business independently as management units. Therefore, the Group consists of geographical reportable segments such as“Domestic” and “Overseas”. Each reportable segment sells shoes and other shoes related clothing and accessories.
(2)

Calculation methodology for revenues from operations, income or losses, assets and liabilities, and other items for each reportablesegment

The accounting treatment of each reportable segment is in line with Note 2. “Summary of Significant Accounting Policies”. Segment income asreported in this section is based on operating income. Intersegment revenues and transfers are calculated at prevailing market prices.

(3)Information on sales, income, assets and other monetary items for each reportable segment
Thousands of yen
2014
Reportable segments

Consolidated

Domestic

Overseas

Total¥ 145,187,331¥ 42,857,687¥ 188,045,018

534,661

233,886

768,547¥ 145,721,992¥ 43,091,574¥ 188,813,566

Segment income¥ 31,358,352¥

2,782,149¥ 34,140,501

Segment assets

149,087,596

47,903,934

2,349,827－

2,991,859

Adjustments

total

Sales:
Customers
Intersegment
Total revenue¥－¥ 188,045,018(768,547)－¥(768,547)¥ 188,045,018¥(14,477)¥ 34,126,024

196,991,530(110,498)

196,881,032

1,536,096

3,885,923－

3,885,923

1,023,343

1,023,343－

1,023,343

1,977,519

4,969,378－

4,969,378

Other items:
Depreciation and amortization
Amortization of goodwill
Net increase in property, plantand equipment and intangible
assetsThousands of yen
2013
Reportable segments

Consolidated

Domestic

Overseas

Total¥ 131,773,827¥ 27,644,313¥ 159,418,140

358,218

86,252444,470¥ 132,132,045¥ 27,730,565¥ 159,862,610

Segment income¥ 28,759,548¥

1,611,556¥ 30,371,104

Segment assets

135,687,435

39,097,224

2,308,166

Adjustments

total

Sales:
Customers
Intersegment
Total revenue¥－¥ 159,418,140(444,470)－¥(447,470)¥ 159,418,140

¥

4,012

¥ 30,375,117

174,784,659(625,238)

174,159,421

942,7113,250,878－

3,250,878－

549,441

549,441－

549,441

3,385,938

11,734,330

15,120,269－

15,120,269

Other items:
Depreciation and amortization
Amortization of goodwill
Net increase in property, plantand equipment and intangible
assets
Note 1:

The adjustments of ¥(14,477) thousand and ¥4,012 thousand for segment income and ¥(110,498) thousand and ¥(625,238)
thousand for segment assets are eliminations of intersegment transactions for the years ended February 28, 2014 and 2013,
respectively.

Note 2:

Segment income and segment assets are reconciled with the operating income in the Consolidated Statements of Income and total
assets in Consolidated Balance Sheet, respectively.

(Related information)(1)

Information by products and services

Information is omitted since sales to customers of single category of products and services exceed 90% of consolidated net sales.
(2)

Information by region

Information is omitted since it is described in the segment information.
(3)

Information by major customers

Information is omitted since there is no customer accounting for 10% or more of consolidated net sales.
(4)

Information regarding impairment loss on fixed assets by reportable segment for the year ended February 28, 2014 and 2013 is asfollows:
Thousands of yen
2014
Consolidated

Impairment loss

Domestic

Overseas¥¥263,840

－

Total
¥

263,840

Adjustments
¥

total

－

¥

263,840

Thousands of yen
2013
Consolidated

Impairment loss

(5)

Domestic

Overseas¥¥395,001

13,045

Total¥

408,046

Adjustments
¥

total

－

¥

408,046

Information on amortization and outstanding balance of goodwill by reportable segment for the year ended February 28, 2014 and 2013 is
as follows:
Thousands of yen
2014
Consolidated
Domestic

Overseas

Total

Adjustments

total

Amortization¥－¥ 1,023,343¥ 1,023,343¥－¥ 1,023,343

Balance at the end of year¥－

¥ 7,195,840¥ 7,195,840¥－¥ 7,195,840

Thousands of yen
2013
Consolidated
Overseas

Domestic
Amortization

¥

－

¥

Balance at the end of year¥－

¥ 6,821,704(6)

549,441

Total

Adjustments

total

549,441¥－¥¥ 6,821,704¥－¥ 6,821,704¥

549,441

Information regarding gain on negative goodwill by reportable segment

None

19. Subsequent Event
Subsequent to February 28, 2014, the Company’s Board of Directors declared a year-end cash dividend of ¥2,258,827 thousand to be payable
on May 29, 2014 to shareholders on record on February 28, 2014. The dividend declared was approved by the shareholders at the meeting heldon May 28, 2014.

ABC-MART, INC.
Registered office:Head office:Telephone:URL:

11-5, Jinnan 1-chome, Shibuya-ku, Tokyo 150-0041, Japan
19th Floor, Shibuya Mark City West,12-1, Dogenzaka 1- chome, Shibuya-ku, Tokyo 150-0043, Japan+81-3-3476-5452
http://www.abc-mart.co.jp/ir/