Annual Securities Report(The 73rd Fiscal Year)
From April 1, 2020 to March 31, 2021

WACOAL HOLDINGS CORP.
29, Nakajima-cho, Kisshoin, Minami-ku, Kyoto, Japan

E00590

The 73rd Fiscal Year (from April 1, 2020 to March 31, 2021)

Annual Securities Report1.

2.

This is an English translation of the Annual Securities Report filed
pursuant to Paragraph 1, Article 24 of the Financial Instruments andExchange Act via the Electronic Disclosure for Investors’ Network(“EDINET”) as set forth in Article 27-30-2 of the same Act.
This does not contain English translations of the attachments to theAnnual Securities Report filed as set out in 1. above, other than theaudit report, the English translation of which is included at the end of
this document.

WACOAL HOLDINGS CORP.

Certain References and Information
This report is prepared for overseas investors and compiled based on the contents of the Annual Securities Report(“Yukashoken Hokokusho”) of WACOAL HOLDINGS CORP. filed with the Director of the Kanto Local Finance
Bureau of Japan on June 29, 2021.
As used in this report , unless the context otherwise requires, “the Company” and “Wacoal Holdings” refer to
Wacoal Holdings Corp., and “Wacoal,” “we,” “us,” “our” and similar terms refer to Wacoal Holdings Corp. and its
consolidated subsidiaries. References to “U.S. dollars” or “$” are to the currency of the United States andreferences to “yen” or “¥” are to the currency of Japan.
All financial statements and information contained in this report have been prepared in accordance with accounting
principles generally accepted in the United States, or U.S. GAAP except where otherwise noted.
A Cautionary Note on Forward-Looking Statements
This report contains forward-looking statements that are based on our current expectations, assumptions, estimatesand projections about our companies and our industry. You can identify these statements by the fact that they do
not relate strictly to historic or current facts. The forward-looking statements discuss future expectations, identify
strategies, contain projections of results of operation or of financial position, or state other “forward-looking”
information. Forward-looking statements are contained in the sections entitled “II. Business Overview, 2. 【Risk
Factors】” and elsewhere in this report.
The forward-looking statements are subject to various risks and uncertainties. Information contained in thesections listed above and elsewhere in this annual report identifies factors that could cause our actual results,
performance or achievements to differ materially from those expressed or implied in any forward-looking
statement.
We undertake no obligation to update any forward-looking statements contained in this annual report, whether as aresult of new information, future events or otherwise.

Contents
Page
Annual Securities Report for the 73rd Fiscal Year1

【Cover】
Part I【Information on Wacoal Holdings Corp. and its consolidated subsidiaries.】…………………………………

2

I.

【Overview of Wacoal Holdings Corp. and its consolidated subsidiaries.】……………………………………

2

1.【Key Financial Data】 ………………………………………………………………………………………

2

2.【History】 ……………………………………………………………………………………………………

6

3.【Description of Business】 …………………………………………………………………………………

7

II.

III.

IV.

4.【Information on Subsidiaries and Affiliated Companies】 …………………………………………………

9

5.【Employees】 ………………………………………………………………………………………………

11【Business Overview】 …………………………………………………………………………………………

12

1.【Management Policy, Business Environment and Management Issues】 …………………………………

12

2.【Risk Factors】 ………………………………………………………………………………………………

15

3.【Analyses of Financial Position, Results of operation, and Cash Flows by Management】 ………………

20

4.【Material Agreements, etc.】 ………………………………………………………………………………

31

5.【Research and Development】 ………………………………………………………………………………

32【Property, Plants, and Equipment】 ……………………………………………………………………………

33

1.【Summary of Capital Investment, etc.】 ……………………………………………………………………

33

2.【Major Property, Plants, and Equipment】 …………………………………………………………………

33

3.【Plans for Capital Investment, Disposals of Property, Plants, and Equipment, etc.】………………………

35【Information on the Company】 ………………………………………………………………………………

36

1.【Information on the Company’s Stock, etc.】 ………………………………………………………………

36

2.【Information on Acquisition etc. of Treasury Stock】………………………………………………………

68

3.【Dividend Policy】 …………………………………………………………………………………………

69

4.【Corporate Governance, etc.】 ………………………………………………………………………………

70

V.

【Financial Information】 ………………………………………………………………………………………

100

1.【Consolidated Financial Statements】 ………………………………………………………………………

100

VI.

【Stock-Related Administration for the Company】 ……………………………………………………………

146

VII. 【Reference Information on the Company】 ……………………………………………………………………

147

1.【Information on the Parent Company】 ……………………………………………………………………

147

2.【Other Reference Information】……………………………………………………………………………… 147
Part II【Information on Guarantors etc. for the Company】……………………………………………………………

Auditors’ Report and Internal Control Report147

End of this document

【Cover】【Document Filed】

Annual Securities Report (“Yukashoken Hokokusho”)【Applicable Law】

Paragraph 1, Article 24 of the Financial Instruments and Exchange Act【Filed to】

Director, Kanto Local Finance Bureau【Filing Date】

June 29, 2021

【Fiscal Year】

The 73rd Fiscal Year (from April 1, 2020 to March 31, 2021)【Company Name】

KABUSHIKI KAISHA WACOAL HOLDINGS【Company Name in English】

WACOAL HOLDINGS CORP.

【Position and Name of Representative】

Hironobu Yasuhara, Representative Director, President and Corporate Officer of
the Company【Address of Head Office】

29, Nakajima-cho, Kisshoin, Minami-ku, Kyoto【Phone No.】

Kyoto (075) 682-1007【Contact Person】

Ichiro Hirokawa, General Manager of Accounting Department【Contact Address】

29, Nakajima-cho, Kisshoin, Minami-ku, Kyoto【Phone No.】

Kyoto (075) 682-1007【Contact Person】

Ichiro Hirokawa, General Manager of Accounting Department【Place Where Available for PublicTokyo Stock Exchange, Inc.

Inspection】(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)

1

Part I【Information on Wacoal Holdings Corp. and its consolidated subsidiaries.】
I. 【Overview of Wacoal Holdings Corp. and its consolidated subsidiaries.】
1. 【Key Financial Data】(1) Consolidated Financial Data, etc.
(Millions of yen, unless otherwise stated)
Fiscal Year

69th

70th

71st

72nd

73rd

Year-EndMarch 2017

March 2018

March 2019

March 2020

March 2021

Sales

195,881

195,725

194,201

186,760

152,204

Operating (loss) income

10,282

11,494

4,879

6,632

(1,115)

Net income attributable to
Wacoal Holdings Corp.

12,525

9,745

341

3,472

7,025

Comprehensive income (loss)

12,296

16,448(5,046)

1,521

13,043

Wacoal Holdings Corp.
shareholders' equity

227,568

232,712

216,494

205,371

215,612

Total assets

294,958

298,534

281,767

277,688322,761(yen)

3,317.05

3,454.40

3,321.57

3,291.06

3,454.18(yen)

180.26143.46

5.16

54.26

112.57(yen)

179.71142.98

5.14

54.05

112.09

Shareholders’ equity ratio

(%)

77.2

78.0

76.8

74.0

66.8

Return on equity

(%)

5.5

4.2

0.2

1.6

3.3

Price earnings ratio(times)

15.24

21.47

533.33

43.25

21.81

Net cash provided by operating
activities

16,351

15,493

13,62013,3254,260

Net cash (used in) provided byinvesting activities(3,032)(7,362)(2,474)2,569(2,562)

Net cash provided by (used in)financing activities(13,055)(12,303)(10,872)(17,471)

33,605

Cash and cash equivalents, endof year33,99529,48730,13327,90563,557

21,139[1,018]20,904[771]

20,662[739]

20,984[675]

19,824[492]

Shareholders’ equity per share
Net income per share
attributable to Wacoal Holdings
Corp.
Diluted net income attributable
to Wacoal Holdings Corp. per
share

Number of employees[Average number of part-time
employees, etc.](Notes)(person)1.

The foregoing consolidated financial data has been prepared in conformity with accounting principles generally

2.
3.

accepted in the United States of America (U.S. GAAP). In the above table, operating income is stated instead ofordinary income.
Sales do not include consumption taxes, etc.
We have conducted a share consolidation of common stock of the Company pursuant to which two (2) shares wereconsolidated into one (1) share effective as of October 1, 2017. Accordingly, “Shareholders’ equity per share,” “Net
income per share attributable to Wacoal Holdings Corp.” and “Diluted net income attributable to Wacoal Holdings
Corp. per share” have been calculated assuming that such share consolidation had been conducted at the beginning of
the 69th fiscal year.

2

4.

New accounting guidance, Improving the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost (ASU No. 2017-07), has been applied since the beginning of the 71st fiscal year.
Accordingly, key financial data for the 70th and earlier fiscal years are the amounts after the retroactive applicationof such accounting guidance.

3(2) Financial data etc. of the Company(Millions of yen, unless otherwise stated)
Fiscal Year

69th

70th

71st

72nd

73rd

Year-EndMarch 2017

March 2018

March 2019

March 2020

March 2021

Operating revenue

13,13912,644

15,715

13,346

16,429Ordinary income

9,215

6,308

11,255

9,111

12,048Net income

11,453

6,461

5,968

8,762

11,544

Common stock

13,26013,26013,26013,26013,260143,378

71,68970,68968,58965,589Net assets

145,496

140,510

134,813130,996

140,106

Total assets

165,022160,086

154,554

156,000

191,737

Total number of issued andoutstanding shares(thousandshares)Net assets per share(yen)

2,114.38

2,078.38

2,060.13

2,090.11

2,235.07

Dividends per share(Interim dividends per
share)

(yen)

36.00
(－)

54.00
(18.00)72.00(36.00)60.00(40.00)40.00(20.00)Net income per share(yen)

164.85

95.12

90.24

136.93184.98

Diluted net income per
share

(yen)

164.32

94.47

89.91

136.39184.16

Shareholders’ equity ratio

(%)

87.9

87.5

86.9

83.6

72.8

Return on equity

(%)

7.9

4.5

4.3

6.6

8.6

Price earnings ratio(times)

16.67

32.38

30.50

17.14

13.27

Dividend payout ratio

(%)

43.7

75.7

79.8

43.8

21.6

Number of employees[Average number of parttime employees, etc.](person)

81
[－]

95
[－]

90
[－]

94
[－]

85
[－]

Total shareholders’ return

(%)

105.0

120.0

110.5

97.7

103.2

(Benchmark: TOPIX incl.
dividends)(%)(114.7)(132.9)(126.2)(114.2)(162.3)Highest share price

(yen)

1,463

3,640

3,485

3,115

2,537

2,595

2,110

1,630

(1,648)Lowest share price

(yen)

970

3,015
(1,309)(Note)

1.

Operating revenue does not include consumption taxes, etc.

4

2.

3.

We have conducted a share consolidation of common stock of the Company pursuant to which two (2) shares wereconsolidated into one (1) share effective as of October 1, 2017. Accordingly, “Net assets per share,” “Net income
per share” and “Diluted net income per share” have been calculated assuming that such share consolidation had been
conducted at the beginning of the 68th fiscal year.
Dividends per share of 54.00 yen for the 70th fiscal year are a total of the interim dividend (18.00 yen) and the yearend dividend (36.00 yen). As we have conducted a share consolidation of common stock of the Company pursuant
to which two (2) shares were consolidated into one (1) share effective as of October 1, 2017, such interim dividend

4.

and year-end dividend are the amounts before such share consolidation and after such share consolidation,
respectively. Dividends per share for the 70th fiscal year will be 72.00 yen if calculated based on the per share
information after such share consolidation.
We have adopted ASBJ Statement No. 28 Partial Amendments to the Accounting Standard for Tax Effect5.
6.

Accounting (February 16, 2018) starting from the beginning of the 71st fiscal year. Accordingly, key financial data
for the 70th and earlier fiscal years are the amounts after the retroactive application of such accounting guidance.
The highest and lowest share prices are market prices on the first section of the Tokyo Stock Exchange.
We have conducted a share consolidation of common stock of the Company pursuant to which two (2) shares wereconsolidated into one (1) share effective as of October 1, 2017. The share prices for the 70th fiscal year indicate thehighest and lowest prices after such share consolidation, and the share prices in brackets indicate the highest andlowest prices before such share consolidation.

7.

The amount of dividends per share for the 72nd fiscal year includes the 70tth anniversary dividend of 8.00 yen.

5

2. 【History】
June 1946

Wako Shoji founded by late Koichi Tsukamoto

November 1949

Wako Shoji Corp. established with 1 million yen in capital (Nakagyo-ku, Kyoto)

June 1951

Head office relocated to Anekoji-agaru, Muromachi-dori, Nakagyo-ku, Kyoto; plant opened; self-manufacturing
beginsNovember 1957

Company name changed to Wacoal Inc.

November 1959

Tokai Wacoal Sewing Corp. established as a domestic manufacturing company, and seven sewing subsidiaries

June 1964

established in Japan
Company name changed to Wacoal Corp.

September 1964

Wacoal listed on the Second Section of the Tokyo and Osaka Stock Exchanges and the Kyoto Stock Exchange

August 1970

A joint venture company, Korea Wacoal Corp. established in Korea

October 1970

A joint venture company, Thai Wacoal Co., Ltd. (current Thai Wacoal Public Co., Ltd.) established in Thailand

October 1970

Taiwan Wacoal Co., Ltd. established as joint venture company

January 1971

Wacoal listed on the First Section of the Tokyo and Osaka Stock Exchanges

April 1978

Singapore office (current Wacoal Singapore Private Ltd.) opened

August 1979

Acquired shares from Torica Inc., a subsidiary of the Company, by way of capital increase through third-party
allocation

June 1981

Wacoal America, Inc. (current Wacoal International Corp.) established as an overseas subsidiary

March 1982

Acquired shares from Nanasai Co., Ltd., a subsidiary of the Company, by way of capital increase through third-

February 1983

party allocation
Wacoal Hong Kong Co., Ltd., established as an overseas subsidiary

December 1983

Acquired all shares in Teenform Inc., an American corporation (current Wacoal America, Inc.)

January 1986

Beijing Wacoal Co., Ltd. (current Wacoal China Co., Ltd.), established as joint venture company

April 1989

Philippine Wacoal Corp. established as joint venture company

January 1990

Wacoal France S.A. established as an overseas subsidiary (current Wacoal Europe SAS)

January 1991

Indonesia Wacoal Co., Ltd. (current PT.Indonesia Wacoal), established as a joint venture company

April 1993

Joint venture agreement for Korea Wacoal Corp. canceled; investment made into Shinyoung Inc. (current

January 1995

Shinyoung Wacoal Inc.) in Republic of Korea
Guangdong Wacoal Inc. established as an overseas subsidiary

June 1997

Vietnam Wacoal Corp. established as an overseas subsidiary

December 2000

Joint venture agreement for Beijing Wacoal Co., Ltd. (current Wacoal China Co., Ltd.), canceled and

May 2003

reestablished as Beijing Wacoal Co., Ltd., a wholly owned subsidiary
Wacoal Malaysia Sdn Bhd established as a joint venture company

August 2003

Dalian Wacoal Co., Ltd., established as an overseas subsidiary

October 2005

Company name changed to Wacoal Holdings Corporation pursuant to the transition to holding company system
Wacoal Corp. established through incorporation-type company split

January 2008

Peach John Co., Ltd. (“Peach John”), became a wholly owned Wacoal subsidiary through share exchange

August 2009

Lecien Corp. became a wholly owned Wacoal subsidiary through stock exchange

April 2012

Eveden Group Limited (currently Wacoal Europe Ltd.) became a wholly owned Wacoal subsidiary through theJanuary 2016acquisition of all of the issued and outstanding shares of Eveden Group Limited
A Tech Textile Co., Ltd. and one other company established as joint venture companies

July 2019

Intimates Online, Inc . became a wholly owned Wacoal subsidiary through the acquisition of all of the issued andoutstanding shares.

63. 【Description of Business】
Our corporate group consists of one holding company (Wacoal Holdings Corp.), 58 subsidiaries, and seven affiliates, and isprincipally engaged in the manufacturing and wholesale distribution of innerwear (primarily women’s foundation wear, lingerie,nightwear, and children’s underwear), outerwear, sportswear, and other textile goods and related products, as well as the direct saleof certain products to consumers. Our corporate group also conducts business in the restaurant, culture, service, and interior designbusinesses.
We have changed our reporting segment starting from the current fiscal year.
The Company falls under the definition of “Specified Listed Companies” as prescribed under Paragraph 2, Article 49 of the
Cabinet Office Ordinance on Restrictions on Securities Transactions, etc. For this reason, whether an incident is minor (and not amaterial fact) under the insider trading restrictions will be determined on the basis of consolidated figures.
Segment information and a summary of the various companies that make up our corporate group are as follows:(1) Wacoal Business (Domestic)
This segment is composed of Wacoal Holdings Corp. and 11 subsidiaries in Japan.
Wacoal Corp. engages in the planning and designing of the above-mentioned products, procurement of materials for theabove-mentioned products, commercialization of semifinished products purchased from sewing companies in Japan andoverseas and other business associates after inspection, and distribution to end consumers through department stores, generalmerchandisers, and other general retailers in Japan, as well as directly managed retail stores, E-commerce(EC) websites anddistributors in Japan and overseas. Each of our 4 apparel manufacturing companies, including Kyushu Wacoal Manufacturing
Corp., receives a supply of raw materials from Wacoal Corp., conducts sewing and processing of innerwear and sportswear,
and delivers the semifinished products to Wacoal Corp. We have 3 sales companies, including Une Nana Cool Corp., which
conduct retail sales of innerwear, outerwear and swimsuit products.
(2) Wacoal Business (Overseas)
This segment is composed of 37 companies, including our overseas subsidiaries and affiliates.
Among our 31 overseas subsidiaries, nine companies are located in North and Central America; six companies are locatedin Europe; and 16 companies are located in Asia/Oceania. Six overseas affiliates are located in Asia.
Among our nine overseas subsidiaries in North and Central America, Wacoal Dominicana Corp., an apparel
manufacturing company of innerwear products, ships its products to Wacoal America, Inc., a manufacturing and sales
company, which supplies these products to end consumers through local department stores, specialty retail stores and EC
websites. In addition, Eveden Inc., a sales company, distributes innerwear products, which are mainly supplied from Wacoal
Timex LTD. and Wacoal Emea Ltd.
Among our six overseas subsidiaries in Europe, Wacoal Emea Ltd. sells products such as innerwear, which are supplied
by Wacoal Timex Ltd., to end consumers through department stores and specialty retail stores mainly in the United Kingdom.
Our two subsidiaries and four affiliates in Asia/Oceania are manufacturing and sales companies, which distribute products
to end-consumers through their local department stores and specialty retail stores, and also distribute a part of their products to
Wacoal Corp. and sales companies in Asia. Our sales companies include six subsidiaries, including Wacoal Singapore PrivateLtd., Eveden Israel Ltd., and one affiliate. These sales companies distribute innerwear products, which are mainly supplied
from the group companies, to their local department stores, specialty retail stores and directly managed retail stores. Our eightremaining subsidiaries include four apparel manufacturing companies producing innerwear, two raw materials manufacturing
companies, one company that procures materials for subsidiaries and affiliates in Asia, and one investment company whichmake investments in the local subsidiaries and local affiliates that manufacture and sell innerwear.
(3) Peach John BusinessThis segment is composed of four companies, including our domestic and overseas subsidiaries. The one domestic
subsidiary and three overseas subsidiaries are sales companies, and Peach John mainly engages in the retail sales of productsthat are independently supplied mainly from nongroup companies.
(4) Other
This segment is composed of a total of 13 companies, including six domestic subsidiaries, six overseas subsidiaries andone domestic affiliate.
Among the six domestic subsidiaries, Nanasai Co., Ltd. (“Nanasai”) engages in manufacturing, sales and rental ofmannequins and fixtures, and interior design work and Lecien Corporation engages in the manufacture and wholesale
distribution of women’s innerwear and clothing, lace, thread, and fabrics for handicrafts. Our four remaining subsidiaries
include an apparel manufacturing company and three other subsidiaries which engage in sales, other textile-related business,real estate leasing business, and/or other businesses.
Six overseas subsidiaries are located in Asia.
Four of our subsidiaries in Asia are apparel manufacturing companies. The other two subsidiaries engage in the
manufacture and sale of mannequins and fixtures, interior design work and other textile-related business.
The business distribution diagram of these subsidiaries and affiliates follows on the next page:7

Consumer/Client(Apparel Manufacturing: 4 companies)
Kyushu Wacoal Manufacturing Corp.
Hokuriku Wacoal Sewing Corp.
Niigata Wacoal Sewing Corp.
Torica Inc.

(Other Textile Related: 1 company)
Wacoal Distribution Corp.

(Manufacturing and Sales: 1 company)
Wacoal Corp.

(Cultural Business Service: 1 company)
Wacoal Art Center Co., Ltd.

(Sales: 3 companies)
Une Nana Cool Corp.
2 other companies(Other: 1 company)
Wacoal I Next Corp.

Wacoal Business (Domestic)

Peach John Business

Wacoal Business (Overseas)

Other(North/Central America: 9 companies)(Sales: 4 companies)
Peach John Co., Ltd.
3 other companies

Wacoal International Corp.

(U.S.)

Wacoal America, Inc.
Wacoal Dominicana Corp.

(U.S.)(Dominican Republic)
Eveden Inc(U.S.)(Lecien: 7 companies)
Lecien Corporation
Lecien （Vietnam） Co., Ltd.
(Vietnam)
5 other companies

5 other companies(Europe: 6 companies)
Wacoal Europe Ltd.

(U.K.)

Wacoal Emea Ltd.
Wacoal Europe SAS.

(U.K.)(France)3 other companies(Asia/Oceania: 22 companies)
Wacoal Investment Co., Ltd.
(Taiwan)Wacoal International Hong Kong Co., Ltd.
(Hong Kong)
Wacoal China Co., Ltd.
(China)Wacoal Singapore Private Ltd.
(Singapore)
Wacoal Hong Kong Co., Ltd.
(Hong Kong)
Guangdong Wacoal Inc.
(China)Wacoal Timex Limited(Sri Lanka)
A Tech Textile Co., Ltd(Thailand)*Shinyoung Wacoal Inc.
(South Korea)*Taiwan Wacoal Co., Ltd.
(Taiwan)*Thai Wacoal Public Co., Ltd(Thailand)
11 other companies,
including 3 equity method affiliates

Wacoal Holdings Corp. (holding company)
Without mark: a consolidated subsidiary*: an equity method affiliate

8(Other: 6 companies)
Nanasai Co., Ltd.
Ai Co., Ltd
Wacoal Service Co., Ltd.
Wacoal Career Service Corp.
*House of Rose Co., Ltd.
1 other company

4. 【Information on Subsidiaries and Affiliated Companies】
Relationship

Capital(Millions of yen)

Principal Business

Percentage of
Voting Rights
Owned or Held(%)

Minami-ku, Kyoto

5,000

Wacoal Business (Domestic)(Research and development,
product planning and sale ofinnerwear products, etc.)

1003Peach John Co., Ltd.

Minato-ku, Tokyo

90

Peach John Business (Productplanning and sale of innerwear
products)

100

2

－

Lecien Corp.

Minami-ku, Kyoto

90

Other
(Product planning and sale ofinnerwear products, etc.)

1002Rent of office･
storage building70

Wacoal Business (Domestic)(MTO (make to order) of innerwear
products)

Company Name

Location

Number of Company
Officer(s) holding a Position as
Officer in such Subsidiaries
and Affiliated Company

Lease/Rent ofFacilities(Consolidated Subsidiary)*1, *5
Wacoal Corp.

Kyushu Wacoal Manufacturing Corp.

Unzen-shi,
NagasakiNiigata Wacoal Sewing Corp.

Nishiura-ku,
Niigata

50

Same as above

Torica Inc.

Ibaraki-shi, Osaka

92

Same as above

90

Other
(Leasing of mannequins, interior
design and construction work of
stores)Nanasai Co., Ltd.

Minami-ku, Kyoto*1
Wacoal International Corp.

New York, USA

20,000 thousand
USD

Wacoal Business (Overseas)(a US holding company)

Wacoal America, Inc.

New York, USA

2,062 thousand
USD

Wacoal Business (Overseas)(Product planning and sale ofinnerwear products)

Santo Domingo,
Wacoal Dominicana Corp.

Wacoal Europe Ltd.

Dominican
Republic
Northamptonshire,
UK

Wacoal Emea Ltd.

Northamptonshire,
UK

Wacoal Europe SAS.

Saint-Denis, France

Wacoal Hong Kong Co., Ltd.
*1
Wacoal International Hong Kong Co., Ltd.

Hong Kong

Hong Kong

20 thousand
USD

Wacoal Business (Overseas)(MTO of innerwear products)

175 thousand
GBP

Wacoal Business (Overseas)(a holding company)

250 thousand
GBP

Wacoal Business (Overseas)(Product planning and sale ofinnerwear products)

8 thousand
EUR
3,000 thousand
HK$373,690
thousandHK$

Wacoal Business (Overseas)(Sale of innerwear products)
Same as above
Wacoal Business (Overseas)(Procurement of innerwear products
and raw materials)

100
(100）

100
(100）

57
(57）

99
100
(100）

100
(100）

100
(100）

100
100
(100）

100
(100）

80
(80）

100
(100）

54,604 million
VND

Wacoal Business (Overseas)(MTO and sale of innerwear
products)

Taipei, Taiwan

59,000 thousand
NT$

Wacoal Business (Overseas)(a Taiwan holding company)

100

Guandong Wacoal Inc.

Guangzhou, China

17,730 thousand
RMB

Wacoal Business (Overseas)(MTO of innerwear products)

100*1
Wacoal China Co., Ltd.

Beijing, China

Vietnam Wacoal Corp.

Bien Hoa, Vietnam

Wacoal Investment Co., Ltd.

189,364
thousand
RMB

Wacoal Business (Overseas)(Product planning, manufacturing
and sale of innerwear products)

Bangkok, Thailand

1,000
million
THB

Wacoal Business (Overseas)(Manufacturing of raw materials)

Thai Wacoal Public Co., Ltd.

Bangkok, Thailand

120 million
THB

Wacoal Business (Overseas)(Product planning, manufacturing
and sale of innerwear products)

PT.Indonesia Wacoal

Bogor, Indonesia

Shinyoung Wacoal Inc.

Seoul, South Korea

Taiwan Wacoal Co., Ltd.

Taoyuan, Taiwan*1
A Tech Textile Co., Ltd.

100
(100）

(100）
(100）

100
(100）

54
(54）

－

Rent of officebuilding

Rent of officebuilding－

Same as above

－

－

2

Rent ofoffice building

2

－

1

－

－

－

2

－

－

－

－

－

－

－

1

－

－

－

1

－

－

－

1

－

－

－

2

－

2

－

1

－

2

－

－

－

38 other companies(Equity Method Affiliate)*4House of Rose Co., Ltd.

Minato-ku, Tokyo

2,500 million
IDR
4,500 million
WON
800 million NT$

934

Same as above
Same as above
Same as above
Other(Development and sale of cosmetics
and healthcare products, etc.)

34
(34）

42
(42）

25
50
(50）

21

2 other companies(Note)*1 Wacoal Corp., Wacoal International Corp., Wacoal International Hong Kong Co., Ltd, Wacoal China Co., Ltd. and A
Tech Textile Co., Ltd. are categorized as a specified subsidiary under the Financial Instruments and Exchange Act.
9

2
3

The number in brackets under the “Percentage of Voting Rights Owned or Held” column means the percentage ofindirect holding.
The name of operating segments is shown under the “Principal Business” column.

*4 House of Rose Co., Ltd. is a company that is obliged to file an annual securities report.
*5 Wacoal Corp.’s sales (excluding the internal sales recorded among consolidated subsidiaries) account for more than
10% in our consolidated sales.
Key Income Summary (i) Sales

81,409 million yen(ii) Ordinary income

1,519 million yen(iii) Net income

1,204 million yen(iv) Net assets

95,848 million yen(v) Total assets

120,418 million yen

10

5. 【Employees】(1) Employees within group
As of March 31, 2021
Name of Operating Segment

Number of Employees

Wacoal Business (Domestic)

7,232

[351]

Wacoal Business (Overseas)

10,223

[42]

488

[21]

1,881

[78]

19,824[492]

Peach John Business
Other
Total
(Note)

1

The number of employees is the number of individuals working within our group (excludes individuals seconded fromour group to third parties, but includes individuals seconded from third parties to our group). The average number of
temporary employees is indicated in brackets for the current consolidated fiscal year.

2

Temporary employees include temporary staff and part-time workers whose working period is about 3 months.

(2) Employees of the Company
As of March 31, 2021
Number of Employees
85(Note)

Average Age

Average Years of Service
47.1

Average Annual Salary (Yen)

21.0

1
2

The number of employees is the number of individuals working within the Company.
The average annual salary includes bonus and extra wages.

3

All employees of the Company belong to the Wacoal Business (Domestic) segment.

5,963,509(3) Relationship with Labor Union
Employees of the Company are members of the Wacoal Labor Union. The Wacoal Labor Union is a member of The
Japanese Federation of Textile, Chemical, Food, Commercial, Service, and General Workers’ Unions.
Certain subsidiaries have their own labor unions.
Our relationship with Labor Unions is very stable and we have nothing to report on this matter.

11

II. Business Overview
1.【Management Policy, Business Environment and Management Issues】
Any forward-looking statement contained below is based on our judgements as of the end of the current fiscal year. Actual
results and performance may differ from the estimates set out in this document due to various risks, uncertainties and otherfactors arising in the future.
(1) Basic Business Policy
Our business activities are built upon “relationships founded in mutual trust,” which are based on our listening to the voice ofeach and every one of our customers, and continuously transforming our business with a sense of humility. This spirit of mutual
trust and respect for humanity serves as the starting point for all of our business activities and has been our management
philosophy since our establishment. Our group will continuously enhance our corporate value by making efforts to increasetransparency in our corporate management and ensuring fairness and independence of our corporate management in order tobuild “mutual trust” in relationships with every stakeholder, including shareholders, customers, employees, business partners andthe local community.
■Our Mission
We will contribute to society by helping women to express their beauty.
■Our VisionWe, the employees and management of Wacoal, will maintain a refined corporate culture based on mutual trust and willcontinually strive to make the Company a global leader in the industry.
■Our Value
1. Create products loved by customers
2. Develop new products that meet the needs of the times
3. Conduct business in a fair manner with a forward focus
4. Build a better Wacoal through better human resources
5. Fear not failure and boast not of success(2) Our Medium- and Long-term Business Strategy and Measures for Business Targets(i) Long-Term Vision
We continue to move forward with efforts to become “Global Wacoal as a Group”, that is, to continue to offer pioneering
products to the global markets by taking full advantage of our management resources and our group’s network, and to gain
reputation for our reliability from stakeholders around the world with our group’s products and services as well as ourcommitments to social issues by cultivating new market opportunities for the undergarment industry.
Furthermore, in order to achieve a competitive edge in the global markets, we will invest in new business areas and growth
opportunities and rise to the challenge of realizing unprecedented growth. In addition, we will make efforts to continuously
improve our management foundation, generate greater results, and thereby aim to achieve sustainable growth and enhance
our corporate value, and make progress toward becoming a global company that is expected to continue to exist in 100 years.
Our goals of a “Global Wacoal”
1. The Wacoal Group’s products and services and efforts to address social issues are highly trusted by customers and allother stakeholders in markets worldwide.
2. The number of countries and regions in which we operate continues to increase.
3. Under our Group network, we are operating businesses in a coordinated manner on a global scale.
4. We always provide pioneering products to the world and continue to lead the industry of innerwear culture.
5. The Group mission and philosophy are instilled in employees across the world.
Fiscal 2028 Targets- Net sales: 300.0 billion yen (including sales through equity-method affiliated companies)- Consolidated operating income and ROE: above 10%12(ii) Medium-Term Management Plan
To realize our vision to become “Global Wacoal as a Group”, we will engage in efforts to achieve strong growth domesticallyand globally under the three-year medium-term management plan (FY2020-FY2022) by confronting reality andimplementing fast reforms.
Basic policy--

Understand the actual situation, estimate future demand and implement drastic reform, while emphasizing growth
Achieve strong growth in Japan and overseas
Examine the potential of unprofitable businesses and brands, and promote review and structural reform of group businesses
where no business will be safe from such review or structural reform
Enhance corporate value by improving economic and social values
Based on these goals, the medium-term management plan will pick up pace to address operational issues by expanding ourcustomer service advanced by digital technology; implementing plans for unrivaled CX strategies(*); launching new highvalue added products without regional boundaries; strengthening cooperation with key third-party EC websites and building
our EC websites that match country and geographical characteristics; making investments in growth for business expansion
in countries and regions where we have a market presence but our business remains small; reforming business models
suffering from systemic fatigue; and building a highly competitive supply chain network.
To realize a sustainable society, we will make efforts to achieve advanced CSR procurement in cooperation with
manufacturers that we outsource to, better live within the global environment through efforts to reduce plastic use andunsold inventory, and build an organization that encourages diversity and inclusion by taking advantage of diverse humanresources. We will commit in a responsible manner to create new value through cultivation of a sustainable businessfoundation.
We will make stable distributions and make repurchases in a flexible manner, and will make efforts to improve profitability
and capital efficiency through our business activities. We will also make efforts to maintain a real total return ratio of 100%excluding any gain (loss) on valuation of marketable securities and investments (recognized as other income (expenses)
under the statements of income under the U.S. accounting standards). In addition, while we prioritize investments that
support sustainable growth of our business, we will seek to hold an adequate cash balance by reducing, as appropriate, crossshareholdings with other companies.
*The “Wacoal Omni-Channel Strategy”, our digital strategies under which we have promoted the installation of our 3Dbody scanning and AI (artificial intelligence)-based customer service system and integration between online and offline
activities, has been renamed to “CX Strategies” to promote customer-oriented strategies and build a deeper relationship witheach customer.
(iii) Group policies in response to spread of the new coronavirus pandemic
The business environment surrounding our group continues to remain difficult due to economic stagnation resulting from theglobal coronavirus pandemic (“COVID-19”). While vaccination has started in many countries and regions and we see
progress toward the end of COVID-19, we must remain vigilant of the impact of COVID-19 spreading further especially inJapan, and the future remains uncertain.
Under such circumstances, we are moving forward with our initiatives to create a management structure that leads to highprofitability based on the following policies for regrowth, while conducting business by prioritizing the safety and wellbeing of our customers, employees and partner companies.
<Basic Policies>
To prioritize the health and well-being of our customers, employees and partner companies<Short-Term Policies>
To implement cost reduction in response to deterioration in business conditions and to secure a stable financial foundation・ to reassess our current initiatives and spending plans in all business・ to strengthen liquidity on hand in preparation for the prolonged impact of COVID-19
・ to adjust production to avoid having excess inventory resulting from decreased sales<Mid- and Long-Term Policies>
To conduct thorough inspection and renovation of the value chain – opportunity to create management structure toward highprofitability
・ to reassess current cost structure (promote initiatives to reduce fixed costs)
・ to accelerate initiatives on digital transformation・ to review and rebuild customer touchpoints (in response to changes in key sales channels)

13

・ to develop products and services that our customers want to buy for their new lifestyle and to strengthen our capability toaddress new customer service and sale styles
Due to the impact of COVID-19, it has become difficult to achieve the business targets that we have initially planned under
our medium-term management plan. During the fiscal year 2022, which is the last year of our current medium-term
management plan, we will be in a phase to conduct structural reform to create a management structure that leads to highprofitability, and will move forward with initiatives to correct the high-cost structure, the underlying issue we face. At thesame time, we plan to continue to make investments in growth in the digital, IT and logistics business to maximize corporate
value.
Under the above-described initiatives, our target for fiscal year 2022, which is the last of our current medium-term
management plan, is to achieve net sales of 184.0 billion yen, operating income of 6.0 billion yen (ratio of operating income
to net sales of 3.3%), and net income attributable to Wacoal Holdings Corp. of 5.5 billion yen.
(3) Issues to Address
The global COVID-19 pandemic has changed the values and awareness of well-being, and has brought significant changes to
consumer behavior. The threat of COVID-19 continues to unfold, and while vaccination has started in certain countries andregions, we believe that full-scale recovery will take a long time as economic activities may continue to be restricted by infection
prevention measures, in certain aspects, including on social outings.
We expect that consumer behavior will further change in the new normal after COVID-19. Consumers will likely continue toaspire to have a lifestyle that focuses on well-being and safety, and to select high-value added products or better services with realvalue. It is essential to be responsive to various changes in the awareness of consumers and to take appropriate measures thatmeet consumers’ perspective in order to achieve regrowth in the “new normal.
Under such circumstances, we will move forward with our initiatives to create a management structure that leads to highprofitability while conducting business activities that prioritize the safety and well-being of our customers, employees and partnercompanies. We will aim to build a deeper, broader and longer relationship with each customer by continuing to develop andprovide products and services that consumers expect in their new lifestyles, which have significantly changed as a result of
COVID-19, and by promoting our unique CX strategies, including on the merger between online and offline activities andutilization of a customer database, in efforts to improve customer experience.
In addition, as environmental problems continue to worsen, consumers’ awareness of sustainability is evolving. We plan to move
forward with our ESG (Environment, Social and Governance) management, which aims to grow by enhancing social andeconomic values, and to further address important issues such as governance, human rights and environmental issue. At the sametime, we will promote establishment of an operating base that achieves sustainable growth through work-style reform (including
teleworking), cultivation of human resources supporting business growth and creation of a corporate culture that offers job
satisfaction.

14

2. 【Risk Factors】
Major risk factors related to business and financial conditions described in this report as identified by the management that
may significantly impact the financial position, results of operation and cash flows within group are as follows.
Forward-looking statements in this report are made based on information available as of the end of fiscal year 2021.

(1) Impact of COVID -19
The global pandemic caused by COVID -19 has had a significant impact on the sales and production of our group. In the current fiscal
year, our group has established “the COVID-19 Infection Control Committee” (Director and Managing Corporate Officer acting as theGeneral Manager), as a subcommittee of the Corporate Ethics and Risk Management Committee which implements appropriate measur es
depending on conditions pertaining to COVID -19 in order to prioritize the safety of our customers, partner companies and employees and toprevent the spread of infection. Wacoal Corp., our core subsidiary, makes decisions on the work framework of employees and o peration ofretail stores while responding to communications and/or requests by the national and local governments . Specifically, during the state of
emergency, we have established the work framework for our back office staff based on the period of the declaration and by are as (byencouraging work from home, and restricting business trips and in -person conferences). As a company handling daily necessities, we
dispatch our in-store sales staff at shops (physical stores) upon request by local customers and partner companies to protect sanitary andcomfortable life environment and to continue to deliver safety to our customers, on the condition that the measures to prevent the spread of
infection have been implemented by in-store sales staff at these shops to ensure the well -being and safety of our customers and employees.
Also, we have expanded our borrowing facilities with financial institutions in order to build a strong financial foundation.
If the pandemic is further prolonged, the business results and financial position of our group will be further adversely affe cted. In orderto address these risks, we will anticipate change in individual consumer behavior as consumers adopt a new lifestyle following the end of
the pandemic, strengthen services that meet the customers’ needs such as e -commerce, introduce new products, continue to make efforts to
reduce costs and reassess new investments in order to ensure sound management.

(2) Risks related to business environment and strategies(i) Risks related to economic environment
In the major domestic and overseas markets in which we operate, development in the economic environment may have amaterial impact on our sales, results of operation and financial position. For example, weak consumer spending resulting fromthe temporary closings or shortened business hours of retail stores during the state of emergency declared due to the spread of
COVID-19 has had a material impact on our domestic sales and results of operation.
(ii) Risks related to domestic businessApproximately 63% of our net sales at Wacoal Corp., our group’s core operating company, was generated in department stores,
general merchandisers, and other general retailers in Japan. Due to the ongoing structural change in the retail market, however,
we expect that the share of sales from department stores, general merchandisers and other general retailers in the overall retailmarket will continue to decline. During the current fiscal year, sales are estimated to have decreased by 700 million yen due tothe closure of nine department stores, 32 general merchandisers, and 61 other general retails that had business transactions with
Wacoal Corp. one department stores and eight general merchandisers have already announced that they will close during the
fiscal year ending March 31, 2022. Our group has addressed these risks by shifting to an area-based sales system that cuts acrossbusiness categories and strengthening directly managed retail stores and e-commerce sales. In order to address the accounts
receivable collection risk following store closures and bankruptcies, we manage our credit exposure at all times and keep
adequate inventory at stores.
While sales in the domestic women’s innerwear market continue to decline, different types of competitors are increasing
their presence in the market. In the domestic innerwear market, in addition to competition from wholesalers and direct retailers
in the mid- to high-end garment in the domestic innerwear market, we must also compete against e-commerce vendors and fast
fashion manufacturers across sales channels (our e-commerce website of Wacoal Corp. for the current fiscal year showedstrong sales, achieving 155% of such sales for the previous fiscal year).
Competition may intensify with new entrants. Increased competition could result in declines in prices, increased marketing
expenditures, and loss of sales volume and market share, all of which may have a material adverse effect on our sales, financial
position, and results of operation.
In order to address these risks, we have set out and promote the “Wacoal Omni-Channel Strategy” as our major initiative under
our medium-term management plan to restore growth and improve profitability of Wacoal Corp. (In order to utilize the customer
database that we have obtained and to build a deeper relationship with each customer, we will rename it as “CX Strategies” from15

fiscal 2022 promoting more “customer-oriented” strategies.) Under this strategy, we aim to retain customers with digitaltechnology-based innovation of our strength in sales service, which we have developed over many years, by developing our
relationship with our customers through coordination among physical stores and e-commerce channels. During the current fiscal
year, we have installed “Wacoal 3D smart & try”, our next generation system at the core of the omni-channel strategy, at 16
shops, mainly at department stores, and we plan to expand the number of stores installing the 3D smart & try system.
We also make efforts to improve profitability of our domestic group companies other than Wacoal Corp. through drastic measures
including selection and concentration of businesses, reforming the structure of businesses and personnel deployment andbolstering collaboration within the Group and alliances with other companies. With these efforts and initiatives to improveearnings within the entire Wacoal Group, we have established as our target a 3~5% operating income.
(iii) Risks related to overseas business
We operate our business overseas and aim to expand sales in Europe and North America, as well as in Asia. We may be
exposed to the following risks related to our overseas business.
While the number of global transactions continues to increase, geopolitical issues such as competition among nations may
impact our business activities. For example, Wacoal Europe Ltd., our subsidiary located in the United Kingdom, was impactedwith increases in expenses, including customs duties and customs clearance expenses which were newly imposed in connection
with Brexit. In order to address these risks, we will continue collect information on and watch closely political and economical
situations, and developments in tax system or laws and regulations of the countries in which we engage in our business.
We may be exposed to the risk that our business will be adversely affected if we fail to understand customer tastes andpreferences in overseas markets, and the risk of not being able to timely adjust to cultural differences, which may lead tostaffing or management failure adversely affecting our group business. In order to address these risks, we have continued toinvest through our three major corporate entities in the United States, Europe, and China to achieve business growth. In the
United States, for example, we acquired Intimates Online, Inc. (“Intimates Online”) during the fiscal year ended March 31,
2020 to appeal to the millennials as customers, to create growth opportunities in the e-commerce market, and to strengthen ourcompetitiveness. We acquired Intimates Online for 86,041 thousand U.S. dollars (approximately 9,348 million yen using theexchange rate at the date of acquisition), and we also agreed to pay contingent consideration to the current shareholders ofIntimates Online based on performance achievements (“earn-out consideration”). We expect under our growth scenario toachieve an operating profit after two years (for the fiscal year ending March 31, 2023), net sales of 100 million dollars and an
operating income of 12%~15% after three years (for the fiscal year ending March 31, 2024). In addition, we are making
efforts to develop our distribution channels and continue to expand our e-commerce business in Europe and China. As our
initiatives to expand our presence in the emerging countries, we plan to accelerate opening shops and to actively invest inadvertisement to expand our business in India.
We have gradually increased the amount of goods we produce and raw materials we procure for our products in lower-cost
countries in Asia. In recent years, we have shifted our overseas production base from China to ASEAN countries in response tochanges in the social and/or working environment. At the same time, we are facing challenges in productivity and profit
performance at a number of our production bases that we newly launched. Although the impact on our group has been minor,
safet y in Myanmar, for example, is deteriorating since the military takeover in February 2021 and as a result of protest against
the military coup. We have suspended operations at Myanmar Wacoal Company Limited, to ensure safety of our employees.
Under such circumstances, we are aiming to build a global production base that is capable of supplying competitive products
and raw materials and making efforts to establish a management system within our group based on our medium-term management
plan.
(3) Risks related to business administration(i) Risks related to quality and quality labeling
Our ability to provide high-quality products on a global basis is one of our strengths. If we sell defective products or if our
products harm our customers’ health, we may suffer costs for product recalls and brand damage. In such an event, our reputation
as a producer of high-quality products may be damaged and we may lose trust from society, which may adversely affect ourbusiness results.
In 2020, Peach John, our subsidiary, voluntarily recalled certain brassier products to prevent accidents after discovering thata wire may poke out from these products. Any violation of law concerning misrepresentation of quality labeling or
exaggeration of functionality may cause us to lose trust from society, incur costs for product recalls and label corrections, andloss of sale opportunity, any of which may have a material adverse effect on our results of operation and financial position.
In order to address these risks, each of our group companies formulates safety guidelines, ensures strict clearance rules on
product development, implements measures to thoroughly trace causes of problems and prevent reoccurrence with respect to16each defect and engages in efforts to maintain and improve product quality. At the same time, we have established the “Quality
Assurance Inquiry Committee” to advance quality assurance efforts within our group and introduced such efforts to Group
companies to raise the basic level of the entire group.
(ii) Compliance-related risks
We are subject to various laws and regulations in Japan and overseas, and if we violate these laws or act in contrary to any
social order, we may suffer an economic and/or social impact as a result of punishment or loss of trust from society. Our groupmakes efforts to prevent violation of law by implementing measures, through “the Compliance Committee”, such ascompliance awareness training for employees, an internal alert system, and compliance review by external experts. We also
address this issue as one of our material issues as part of our “ESG initiatives” under the current medium-term management
plan. In particular, we focus on labor and human rights issues in our supply chain for our group’s businesses. We have begun
working on these issues in response to the concerns raised by a non-profit human rights organization about working conditions
and human rights issues at an overseas sewing factory with which we contract. In April 2018, we established “the CSR
Procurement Committee” and are proactively making efforts such as self-assessment, on-site audit and disclosure of our
supplier list.
(iii) Risks related to personal information
We possess personal information of our customers for business purposes. Under our medium-term management plan,
Wacoal Corp., our core operating company, has established the CX Strategies as the pillar of our growth strategy and promotes
business strategies using digital data including collected personal information. In addition, our overseas subsidiaries directly
obtain the personal information of customers in the course of sales through their websites, which they have strengthened as apillar of growth. In 2014, our website was defaced by a hacker and we were forced to suspend sales for a month. With thegrowing significance of personal information protection for our business activities, we have launched an IT Governancedepartment with a specialized mission in April 2020. This department focuses on security measures to protect personal
information against external threats, including strengthening of management of personal information, implementing responses
to amendments of applicable laws and regulations, and providing training for employees. Any leak or alteration of personal
information, deletion of material data or system failures may impact our business management and strategies, and as a result,
may have a material adverse effect on our results of operation and financial position.
(iv) Risk of infringement of our intellectual property rights or claims that we infringe the intellectual property rights of others
We believe that our intellectual property rights, our brands and related trademarks in particular, are important to our ability tocreate and sustain demand for our products and to the value of our business. We may encounter trademark and related disputes
in the future, and imitation of our products or the infringement of our trademarks and intellectual property rights by other could
materially harm our operations and financial position. Additionally, other parties have asserted in the past, and may assert in the
future, that we have infringed their intellectual property rights. Such assertions or related claims may substantially harm ourresults of operation and financial position. As cross-border e-commerce has expanded and become borderless, our brand may
be less competitive in the market if we fail to implement measures globally to control our brand, in addition to any brandmanagement measures in each country. In order to address these risks, “the Intellectual Property Committee” has been
established, and we also provide annual e-learning programs to enhance the awareness of employees, improve the researchcapability of responsible personnel, use external researchers, and cooperate with outside experts.
(4) Risks related to accounting/tax matters(i) Risks of price fluctuation of equity securities
We hold equity securities in publicly traded Japanese and other companies. Our group adopts the U.S. accounting standards
and we are required to recognize any fluctuation in the value of equity securities under the consolidated statements of income.
A significant fluctuation in the value of these equity securities could have an adverse impact on our financial results in therelevant reporting period.
During the current fiscal year, we recorded a gain of 10,390 million yen as “Valuation gain on marketable securities andinvestments – (net)”, due to a significant increase in the value of equity securities.
Under the current medium-term management plan, we plan to reduce cross-shareholdings with other companies by at least
20,000 million yen based on the market price as of March 31, 2019 by the fiscal year ending March 31, 2022 and have soldshares in a total accumulated amount of 17,500 million yen (16,200 million yen in market price as of March 31, 2019) and
2,200 million yen during the current fiscal year. In addition, we examine from time to time whether it is appropriate to holdshares from a medium- to long-term perspective and whether benefits and risks associated with such holdings are worth the17cost of capital, and the results are reported to the Board of Directors on a regular basis. The Board of Directors then examines
whether the holdings will enhance the corporate value of the Company from a medium-to long-term perspective based on suchexamination results, and determines whether to continue to hold or dispose of such shares.
(ii) Risks of impairment charges on fixed assets
We may be required to record impairment charges on fixed assets upon the occurrence of negative industry or economic trends
or underperformance relative to projected future operation results. During the current fiscal year, we recorded 1,136 million yenof impairment charges on real estate held by our group and on property, plant and equipment at certain underperforming directly
managed retail stores. Wacoal Europe has continued to show stable growth since our acquisition in 2012 by developing highvalue-added products and implementing marketing activities that are tailored to the characteristics of each country where we dobusiness or operate distribution channels. However, in light of the impact of COVID-19 and the customs clearance expenses
incurred in connection with Brexit, we reassessed the fair value of goodwill based on our outlook of our business, and recorded
impairment charges of 2,673 million yen. As a result, the residual value of goodwill with respect to Wacoal Europe and Intimates
Online, were 9,398 million yen and 11,771 million yen, respectively. Because valuation of goodwill is based on the future
management plan, we may be required to reassess the fair value and record impairment charges if the interest rate or tax rateincreases, or if business growth and synergies at Wacoal Europe and Intimates Online do not sufficiently exceed the level weanticipates upon investment, in addition to the deterioration in the economy due to COVID-19. Goodwill is tested for impairment
annually, or more frequently if conditions indicate an earlier review is necessary.
(iii) Risks in relation to liability for termination and retirement benefits
Costs and obligations for termination and retirement benefits are based on the actuarial assumptions that are used for the
calculation of the expected rate of return on plan assets or projected benefit obligations for termination and retirement benefits.
Such costs and obligations for termination and retirement benefits may increase if the actual results differ from the assumptions
or if there is any change to the assumptions, due to fluctuations in the market for securities as well as the interest rate environment.
In addition, our group’s results of operation and financial position could be adversely affected if the retirement benefit scheme
is amended. Our approach to establishing the discount rate is based upon corporate bond indices. For discount rates, please see
3.(6) “Significant Accounting Policies and Estimates”. Wacoal Corp., our core operating company, which accounts for a majority
of costs and obligations for termination and retirement benefits, has established the Pension Committee, which reviews the statusof assets under management on a quarterly basis and takes necessary measures.
(iv) Risks relating to tax matters
According to our current accounting standards, deferred tax assets are recorded based on reasonable assumptions about our
future taxable income. However, deferred tax assets may decrease due to changes in the estimated amount of future taxable
income or changes in tax rates following tax reforms, which could have an adverse impact on our results of operation andfinancial position.
As the international tax avoidance by certain multinational enterprises turned into a political issue, OECD prepared and released
a report on BEPS (base erosion and profit shifting) at the request of G20 in October 2015 in efforts to improve tax rules.
Following the release of this report, each country has reformed and reviewed its domestic tax laws and tax treaties. We do notbelieve that implementation of any new international taxation rules will have a material impact on our group; however, theopinion of the tax authorities in a country may differ from our opinion regarding any newly prescribed transfer pricing
documentation and we may suffer additional tax obligations. In order to address these risks, we have a system to obtain the latest
tax-related information internally and externally, and receive advice from external experts. We established the “Tax Code of
Conduct”, which was announced in January 2021, to earn the trust of our stakeholders by conducting highly transparent tax
management.
(5) Risks related to human resources
Securing personnel domestically and internationally is a key issue for our group. If we fail to secure and/or foster highly
qualified personnel for manufacturing, sales representative, personnel specialized in the areas of management of foreigncompanies and new technology, we may not achieve future growth or gain advantages against competitors. As a result, there
may be a material adverse effect on the results of operation and financial position. In order to address these risks, we hire andretain necessary personnel by implementing new recruiting methods such as job-focused employment and develop humanresources through group lectures and online professional expertise training, and strengthen onsite training through on-the-job
training and overseas training programs.

18

(6) Risks related to natural disasters or epidemics
In the event of a large-scale natural disaster such as an earthquake, outbreak of an epidemic, dispute, act of terror or riot that
affects our ability to continue using any of our sales or manufacturing facilities or many of our employees or triggers confusion
in our operation or delays or stoppages in logistics resulting from closed traffic, energy outage or blocked communication, oursales and marketing efforts will be adversely affected. We will face the possibility that consumption will stagnate, which could
have a significant negative effect on the sales of our products, if a large natural disaster such as an earthquake, outbreak of an
epidemic, dispute, act or terror or riot occurs in any area where our products are sold.
In particular, “Earthquake directly beneath the capital, ” or a “Nankai megathrust earthquake ” will cause damage at large
consumption markets where the main offices or stores of our group are located and it will have a significant impact on ourbusiness continuity. We have set up the BCP project within the Incident and Disaster Control Committee and intend to make a
BCP and BCM basic plan for the whole group as well as BCP plans for specific disasters such as a large earthquake that directly
hits the Tokyo metropolitan area.

19

3. 【Analyses of Financial Position, Results of operation, and Cash Flows by Management】
The overview of financial position, results of operation and cashflows (“business performance etc.”) of our group (theCompany, consolidated subsidiaries and equity method affiliates) and analysis and consideration of business performance fromthe viewpoint of management for the current fiscal year are as follows.
Any forward-looking statements contained below are based on our judgment as of the end of the current fiscal year.
(1) Results of operation(Millions of Yen)
Previous Fiscal
Year (ended
March 31,2020)

Current Fiscal
Year (ended
March 31,2021)

Net sales

186,760

152,204(34,556)(18.5％)

Cost of sales

84,95967,798(17,161)(20.2％)

Sales profit

101,801

84,406(17,395)(17.1％)

Selling, general and administrative expenses

93,927

81,700(12,227)(13.0％)

Impairment charges on property, plant and equipment

769

1,136

＋367

＋47.7％

A: Impairment charges on goodwill and other intangible
assets473

2,685＋2,212＋467.7％

Operating (loss) income

6,632(1,115)(7,747)－

Other income/expenses

1,487

1,517

＋30

＋2.0％

(3,760)

10,390＋14,150－

Income before income taxes and equity in net income ofaffiliated companies

4,359

10,792＋6,433＋147.6％

Net income attributable to Wacoal Holdings Corp.

3,472

7,025

＋3,553＋102.3％

7,105

1,570

(5,535)(77.9％)

8,592

3,087

(5,505)(64.1％)

B: Valuation gain / (loss) on marketable securities andinvestments - net

Reference figure (i): Operating income not taking into
account A
Reference figure (ii): Income before income taxes andequity in net income of affiliated companies not taking

Changes from Previous
Fiscal Year
Amount%into account A and B

During the current fiscal year (from April 1, 2020 to March 31, 2021), the global spread of the new coronavirus (“COVID-19”)
has significantly impacted people’s livelihoods and economic activities. Our business in Japan has continued to remain difficult
due to a decrease in the number of customers visiting stores and a decline in consumer confidence resulting from the impact of
temporary closings of retail stores and stay-at-home measures implemented during a state of emergency. In addition, our businessin the overseas markets has also continued to remain difficult due to a number of lockdown measures mainly in the major cities
in Europe and North America due to the prolonged impact of COVID-19.
Under such circumstances, we moved forward with our initiatives to create a management structure that leads to highprofitability while conducting business activities that prioritize the safety and well-being of our customers, employees and partnercompanies and promoted our unique CX strategies to build a deeper, broader and longer relationship with each customer (the “CX
Strategy”, our digital strategies under which we have promoted the installation of 3D body scanning and AI (artificial intelligence)based customer service system, and merger between online and offline activities, has been renamed to “CX Strategies” to promotea deeper relationship with each customer).
Our consolidated sales for the current fiscal year were 152,204 million yen, a decrease of 18.5% as compared to suchconsolidated sales for the previous fiscal year. Despite growth in e-commerce sales in response to higher demand from consumers
staying home, revenue significantly decreased due to the impact of temporary closings or shortened business hours of retail stores
due to stay home measures, as well as a decrease in the number of customers visiting stores in the metropolitan areas.

20

We recorded a consolidated operating loss of 1,115 million yen (consolidated operating income of 6,632 million yen for theprevious fiscal year). Our efforts to reduce costs at our operating companies, as well as our use of an employment adjustment
subsidy and other government assistance in various countries were not enough to offset the impairment charges recorded on
goodwill related to Wacoal Europe and fixed assets at other group companies due to the impact of COVID-19.
Wacoal Europe has continued to show stable growth since our acquisition in 2012 by developing high value-added products
and implementing marketing activities that are tailored to the characteristics of each country where we do business or operate
distribution channels. However, in light of the impact of COVID-19 in the United Kingdom and Europe and the customs clearance
expenses incurred in connection with Brexit, we reassessed the fair value of goodwill based on our outlook of our business, andrecorded the impairment charges of 2,673 million yen. As a result, the residual value of goodwill with respect to Wacoal Europe
was 9,398 million yen (61.7 million pound) based on the exchange rate as of the end of the current fiscal year.
Consolidated income before income taxes and equity in net income of affiliated companies was 10,792 million yen, an increaseof 147.6% as compared to such consolidated income for the previous fiscal year. This significant increase was due to therecognition of a valuation gain on marketable securities and investments (net) of 10,390 million yen.
As a result of the above, net income attributable to Wacoal Holdings Corp. and the ratio of net income attributable to Wacoal
Holdings Corp. to shareholders’ equity for the current fiscal year were 7,025 million yen (an increase of 102.3% from such net
income for the previous fiscal year) and 3.3%, respectively. The exchange rates used for the current fiscal year (previous fiscal
year) were: 106.06 yen (108.74 yen) to the U.S. dollars; 138.68 yen (138.24 yen) to the Sterling pound; and 15.48 yen (15.78 yen)
to the Chinese yuan.
(Under the U.S. accounting standards that we use, we adopt the accounting policy that an employment adjustment subsidy is
deducted from cost of sales and selling, general and administrative expenses. Equity securities held by the Wacoal Holdings Corp.
and consolidated subsidiaries are measured at fair value, and any change from the beginning of the period are recognized as
valuation loss/gain on marketable securities and investments – net under other income/expenses.)
The following is a summary of results of operations by operating segments.
Since the current consolidated cumulative first quarter, information on Ai Co., Ltd., which had previously been included in our“Wacoal Business (Domestic)” segment, and “Peach John Business” segment, has been included in our “Other” segment following
review of certain management classification of performance within our group. In addition, starting from the current consolidated
cumulative second quarter, we have changed our “Peach John Business” to be presented as a separate reporting segment, which
had been included in our “Other” segment, because it satisfied the relevant quantitative criteria. The segment information for theprevious consolidated fiscal year has been prepared based on the segments reported for the current consolidated fiscal year.
(Millions of Yen)

Previous Fiscal Year(ended March 31, 2020)% toAmountSales

Current Fiscal Year(ended March 31,2021)% to
AmountSales

Changes from Previous
Fiscal Year%
AmountChange186,760

100.0％

152,204

100.0％(34,556)(18.5)％

106,112

56.8％

86,13356.6％(19,979)(18.8)％

49,80826.7％

41,35527.2％(8,453)(17.0)％

Peach John Business

11,2246.0％

12,200

8.0％

＋976

＋8.7％

Other

19,616

10.5％

12,516

8.2％(7,100)(36.2)％

Total Net Sales
Wacoal Business(Domestic)
Wacoal Business(Overseas)21

(Millions of Yen)

Previous Fiscal Year(ended March 31, 2020)% toAmountSales

Current Fiscal Year(ended March 31, 2021)% to
AmountSales

Changes from Previous
Fiscal Year%
AmountChange

6,632

3.6％

(1,115)－(7,747)

－

6,083

5.7％

627

0.7％

(5,456)(89.7)％

1,493

3.0％

(2,603)－(4,096)－Peach John Business

(351)

－

1,591

13.0％

+1,942

－

Other

(593)

－

(730)

－

(137)

－

Operating Income/(Loss)
Wacoal Business(Domestic)
Wacoal Business(Overseas)(Reference) Net Sales and Operating Income/ (Loss) of Major Subsidiaries（Millions of Yen ）Net Sales

Previous Fiscal Year(ended March 31,
2020)
Distributi
Amounton Ratio(%)

Current Fiscal Year(ended March 31,
2021)
Distributi
Amounton Ratio(%)

Increased/(Decreased)from previous fiscal
year
Amount％Wacoal Corp

99,22453.1％

79,87752.5％(19,347)(19.5)％

Wacoal International Corp. (U.S)

19,194

10.3％

17,64911.6％(1,545)(8.0)％

Wacoal Europe Ltd.

12,988

7.0％

9,896

6.5％

(3,092)(23.8)％

Wacoal China Co., Ltd.

10,337

5.5％

8,755

5.8％

(1,582)(15.3)％

Peach John Co., Ltd.

11,2246.0％

12,200

8.0％

＋976

＋8.7％

Lecien Corporation

5,760

3.1％

4,614

3.0％

(1,146)(19.9)％

Nanasai Co., Ltd.

8,717

4.7％

5,312

3.5％

(3,405)(39.1)％*Sales to external customers only
（Millions of Yen ）Operating Income/(Loss)

Previous Fiscal Year(ended March 31,
2020)
% to
AmountSales

Current Fiscal Year(ended March 31,
2021)

Increased/(Decreased)from previous fiscal
year

Amount % to Sales

Amount

％

3,140

3.2％

(2,022)－(5,162)

－

401

2.1％

(914)

－

(1,315)

－

1,007

7.8％

666

6.7％

(341)

(33.9)％

Wacoal China Co., Ltd.

923

8.9％

625

7.1％

(298)

(32.3)％

Peach John Co., Ltd.

(351)

－

1,591

13.0％

＋1,942－

Lecien Corporation

(478)

－

221

4.8％

＋699

－

Wacoal Corp
Wacoal International Corp. (U.S)
Wacoal Europe Ltd.

2.5％
－
－
Nanasai Co., Ltd.
218
(358)
(576)
*Net sales and operating income/(loss) for the major subsidiaries above are based on the accounting standards ofthe respective countries.

22

Wacoal Business (Domestic)
Sales attributable to our “Wacoal Business (Domestic)” segment were 86,133 million yen (a decrease of 18.8%
from such sales for the previous fiscal year) and operating income was 627 million yen (a decrease of 89.7% fromsuch operating income for the previous fiscal year). Despite a significant decrease in profit due to the impact of
decreased revenue, we recorded an operating income as a result of our efforts to reduce costs and our use of an
employment adjustment subsidy and other government assistance.

23

Wacoal Corp.:
Sales from Wacoal Corp. decreased by 19.5% as compared to such sales for the previous fiscal year as a result of
weak sales from physical stores over the year due to the impact of COVID-19, while our e-commerce website
maintained high growth. Sales for the first half of the current fiscal year (from April to September) decreased by
30.6% as compared to such sales for the corresponding period of the previous fiscal year due to the absence ofincreased demand before the consumption tax increase during the previous fiscal year, in addition to the impact
of temporary closings of physical stores and stay-at-home measures implemented during a state of emergency.
Although sales recovered during the current consolidated third quarter, sales for the second half of the current
fiscal year (from October to March) also decreased by 5.5% as compared to the corresponding period of theprevious fiscal year due to consumers staying home during another state of emergency declared in the current
consolidated fourth quarter.
While sales from general merchandise stores in the suburbs were strong, sales from physical stores located in thecenter of the metropolitan areas including outlet malls or other large-scale commercial facilities were stagnant
due to a decrease in the number of customers visiting our retail stores reflectin efforts to promote remote work,
as well as changes in consumer attitudes and behavior that led to less travel and fewer crowds.
Sales from our strategically strengthened e-commerce website significantly increased since the previous fiscal
year (an increase of 55.2% as compared to such sales for the previous fiscal year) as a result of additional
acquisition of new customers making purchases from home, online-to-offline marketing initiatives such as
redirecting our retail store-registered members to our e-commerce website, as well as the positive impact of
expanded sales from existing customers whose purchase rate increased due to our marketing utilizing automation
involving distribution of content tailored to each customers. Our virtual one-on-one consultation by our store
personnel also significantly contributed to the acquisition of new customers in a new life style.
In efforts to improving CX (customer experience), we promoted the installation of our 3D body scanning and AI(artificial intelligence)-based customer service system and are providing such service at sixteen shops as of March
31, 2021 (addition of ten shops since the end of the previous fiscal year). We are piloting an avatar counselingsystem, which we are developing to introduce an online customer service by our store personnel during the current
fiscal year, and are addressing issues toward commercialization.
Our efforts to reduce costs were not enough to offset the impact of the decreased revenue and as a result, werecorded an operating loss of 2,022 million yen (operating income of 3,140 million yen for the previous fiscal
year). An employment adjustment subsidy of 1,998 million yen is not included and reflected in such operating
loss, because it is recognized as non-operating income (which has been reclassified as operating loss under the
consolidated business results and segment information of Wacoal Business (Domestic) based on the U.S.
accounting standards).
Wacoal Business (Overseas)
Sales attributable to our “Wacoal Business (Overseas)” segment on a Japanese yen basis were 41,355 million
yen (a decrease of 17.0% from such sales for the previous fiscal year) due to temporary closing of physicalstores and stay-at-home efforts resulting from the spread of COVID-19, as well as the impact of the appreciationof the Japanese yen (715 million yen). Sales of our Peach John brand products sold in China, which werepreviously recorded under this “Wacoal Business (Overseas)” segment, are now recorded under our “Peach John
Business” segment starting with the current fiscal year, and the business result for the previous fiscal year has
been revised retroactively (the effect following such change (and one of the factors decreasing sales) isapproximately 507 million yen for the current fiscal year (approximately 744 million yen for the previous fiscal
year)).
We recorded an operating loss of 2,603 million yen (operating income of 1,493 million yen for the previous
fiscal year). This operating loss was due to our continued strategic marketing investments to achieve rapid
growth of Intimates Online Inc. (“Intimates Online”), which we acquired during the previous fiscal year, as wellas the recognition of impairment charges on goodwill with respect to Wacoal Europe, in addition to the impact
of decreased revenue, despite our efforts to reduce costs and by using government assistance provided bygovernments across the world.
Wacoal International Corp. (U.S.):
Sales from Wacoal International Corp. (U.S.) on a local currency basis decreased by 5.7% (a decrease of 8.0%
on a Japanese yen basis) as compared to such sales for the previous fiscal year. Although there was a positive
impact of the inclusion of sales from Intimates Online on our sales for the first half of the current fiscal year,
revenue decreased by 15.4% as compared to such revenue for the corresponding period of the previous fiscal
year due to the weak sales from Wacoal America Inc., which distributes “Wacoal” and “b.tempt’d” brand24

products at physical stores (department stores), resulting from the impact of COVID-19. On the other hand,revenue for the second half of the current fiscal year increased by 5.4% as compared to such revenue for thecorresponding period of the previous fiscal year as a result of strong sales from Intimates Online, which
maintained a high purchase rate and average spending per customer, as well as high growth in sales achieved
from our e-commerce website and third-party e-commerce websites, which offset declines in sales from physicalstores. During the current consolidated fourth quarter, Intimates Online commenced transactions with Target
Corporation, a major retailer in the United States, and is distributing LIVELY brand products through ecommerce channels and physical stores.
We recorded an operating loss of 8.6 million dollars on a local currency basis (914 million yen on a Japanese
yen basis) (operating income of 3.7 million dollars (401 million yen on a Japanese yen basis) for the previous
fiscal year) due to our continued strategic growth investments in our LIVELY brand distributed by Intimates
Online, as well as the impact of the decreased revenue, despite our efforts to reduce costs and use of government
assistance.
Wacoal Europe Ltd.:Sales from Wacoal Europe on a local currency basis decreased by 24.0% (a decrease of 23.8% on a Japanese
yen basis) as compared to such sales for the previous fiscal year. Sales for the first half of the current fiscal year
decreased by 33.6% as compared to such sales for the corresponding period of the previous fiscal year due to thesignificant impact of the lockdown measures implemented in the United Kingdom and major countries in
Europe. While signs of recovery were visible during the Christmas sale season, sales for the second half of thecurrent fiscal year decreased by 12.6% as compared to such sales for the corresponding period of the previous
fiscal year due to additional lockdown measures implemented during the current consolidated fourth quarter,
which impacted our business operations. Sales from our e-commerce business, which we launched in theprevious fiscal year, exceeded our plan, and now accounts for 5.4% of sales from Wacoal Europe for the current
fiscal year.
Although operating income on a local currency basis significantly decreased by 34.2% (a decrease of 33.9% on
a Japanese yen basis) due to the impact of decreased revenue, we were able to record profit as a result of ourefforts to reduce costs (excluding the impairment charges of 2,673 million yen on goodwill with respect toWacoal Europe).
Wacoal China Co., Ltd.:Sales from Wacoal China Co., Ltd. on a local currency basis decreased by 13.7% (a decrease of 15.3% on a
Japanese yen basis) as compared to such sales for the previous fiscal year. Sales for the first half of the current
fiscal year (from January to June) decreased by 25.8% as compared to such sales for the corresponding period of
the previous fiscal year due to temporary closings of physical stores following the impact of COVID-19, despite
strong sales from third-party e-commerce websites from aggressive distribution of our AMPHI brand products.
For the second half of the current fiscal year (from July to December), while we struggled to attract orders
through a large-scale promotion campaign conducted by e-commerce vendors in November, sales from physicalstores (department stores) recovered due to strong sales from our “WACOAL” and “Salute” brand products, andas a result, sales increased by 2.6%.
Although operating income on a local currency basis significantly decreased by 31.2% (a decrease of 32.3% on
a Japanese yen basis) due to the impact of decreased revenue, we recorded profit as a result of our efforts to
reduce costs.
Peach John Business
Sales attributable to our “Peach John Business” segment were 12,200 million yen (an increase of 8.7% ascompared to such sales for the previous fiscal year) as a result of our new product planning that met ourconsumer needs and development of trending content, as well as our successful marketing activities that were
efficient in increasing the number of new customers and annual purchase frequency. Sales of our Peach John
brand products sold in China, which were previously recorded under the “Wacoal Business (Overseas)”segment, are now recorded under this “Peach John Business” segment starting with the current fiscal year, andthe business result for the previous fiscal year has been revised retroactively (the effect following such change(and one of the factors increasing sales) is approximately 507 million yen for the current fiscal year
(approximately 744 million yen for the previous fiscal year)).
E-commerce sales through our website in Japan increased by 43.5% from such sales for the corresponding
period of the previous fiscal year as a result of an increase in the number of new customers over the year, as wellas the steady sales of our regular products. Sales from our retail stores, however, decreased by 11.9% due to theimpact of the temporary closings of physical stores during the current consolidated first quarter, although the25reduction of cost and improvement in the purchase rate of customers visiting our retail stores contributed to thestrong sales after the current consolidated second quarter.
We recorded an operating income of 1,591 million yen (operating loss of 351 million yen for the previous fiscal
year), a significant increase from the previous fiscal year. This profit was attributable to the positive impact of
the increased revenue, the impact of improved gross profit rate from increased e-commerce sales through our
website as a percentage of total sales and a lower percentage of sales subject to discounts.
Other
Overall sales attributable to our “Other” business segment were 12,516 million yen (a decrease of 36.2% ascompared to such sales for the previous fiscal year), while we recorded an operating loss of 730 million yen(operating loss of 593 million yen for the previous fiscal year).
Lecien Corporation:
Sales from Lecien Corporation decreased by 19.9% as compared to such sales for the previous fiscal year due tothe weak sales of our private products sold by general merchandise stores, which were impacted by our clients’
expense control efforts over purchases. We recorded an operating income of 221 million yen (operating loss of
478 million yen for the previous fiscal year) due to our efforts to withdraw from underperforming businesses in
the consolidated fourth quarter of the previous fiscal year and to reduce costs.
Nanasai Co., Ltd.:Sales from Nanasai Co., Ltd. decreased by 39.1% as compared to such sales for the previous fiscal year due toour construction business weakened by the cancellation and postponement of new shop openings and various
events following the spread of COVID-19. We recorded an operating loss of 358 million yen (operating incomeof 218 million yen for the previous fiscal year) due to a significant impact of decreased revenue, despite our efforts
to reduce costs.
(ii) Financial Position
Our total assets as of March 31, 2021 were 322,761 million yen, an increase of 45,073 million yen from the endof the previous fiscal year, mainly due to an increase in cash and cash equivalents in effort to ensure liquidity on
hand.
Our liabilities were 104,145 million yen, an increase of 35,905 million yen from the end of the previous fiscal
year, mainly due to increases in short-term bank loans for reasons similar to those discussed with respect to assets.
Shareholders’ equity was 215,612 million yen, an increase of 10,241 million yen from the end of the previous
fiscal year, mainly due to recognition of net income and changes in pension liability adjustments.
As a result of the above, our total shareholders’ equity ratio as of March 31, 2021 was 66.8%, a decrease of 7.2%
from the end of the previous fiscal year.
(iii) Cash Flow Status
The balance of cash and cash equivalents at the end of fiscal year 2021 was 63,557 million yen, an increase of
35,652 million yen as compared to the end of the previous fiscal year.
(Cash flow provided by operating activities)
Cash flow provided by operating activities was 4,260 million yen, a decrease of 9,065 million yen as comparedto the previous fiscal year, after adjustments for changes in assets and liabilities to our net income of 6,804
million yen plus adjustments for depreciation expenses and deferred taxes.
(Cash flow used in investing activities)
Cash flow used in investing activities for this current fiscal year was 2,562 million yen, as compared to cash
flow provided by investing activities in the amount of 2,569 million yen for the previous fiscal year, due topayments made to acquire tangible and intangible assets.
(Net cash provided by financing activities)

26

Cash flow provided by financing activities for this current fiscal year was 33,605 million yen, as compared to
cash flow used in financing activities in the amount of 17,471 million yen for the previous fiscal year, due toprocurements of short-term loan and long-term debt, despite cash dividend payments, payments to acquireinterests in subsidiaries from noncontrolling interests and contingent consideration payment.

27

(iv) Production, Orders Received, and Sales
a. Production Results
Our consolidated production results by operating segment for fiscal year ended March 2021 are as follows. No data is available
for the Peach John Business since all of its entities are sales companies. The production results for other segment are not shownsince it is hard to define such term in this segment.
Amount (Millions of yen)

Changes as Compared toPrevious Fiscal Year (%)

Wacoal Business (Domestic)

34,462

81.7

Wacoal Business (Overseas)

12,792

85.5

47,254

82.7

Name of Operating Segment

Total(Note)The amount of results of operation is based on the manufacturing costs and does not include consumption tax, etc.
b.

Orders Received

Among Other, the department of Nanasai, which handles interior design and construction of general housings and stores atcommercial facilities, adopts the build-to-order production system.
The status of orders received for other segment for fiscal year ended March 2021 is as follows:
Amount of Orders Changes as Compared Balance of Amount of Changes as Compared
Name of Operating Segment
Received
to Previous Fiscal
Orders Received
to Previous Fiscal(Millions of yen)
Year (%)(Millions of yen)
Year (%)
Other(Note)

3,012

50.8

204

76.1

The amounts in the above table do not include consumption tax, etc.
c. Sales Results
Our consolidated sales results by operating segment for fiscal year ended March 2021 are as follows:
Changes as Compared
Name of Operating Segment
Amount (Millions of yen)to Previous Fiscal Year (%)

Wacoal Business (Domestic)

86,133

81.2

Wacoal Business (Overseas)

41,35583.0

Peach John Business

12,200

108.7

Other

12,516

63.8

152,204

81.5

Total
(Note)

1
2
3None of the customers ’ sales accounts for 10% or more of the total sales results.
The amounts in the above table do not include consumption tax, etc.
The amounts for the previous fiscal year used to generate Changes as Compared to Previous Fiscal Year have been
reclassified to reflect the change in the reporting segment from the current fiscal year.

(v) Capital Resources and Liquidity
Our current policy is to fund our cash needs from cash flows from operating activities, which allows us to secure most ofworking capital, make capital investments, and pay dividends without relying on substantial borrowings or other financing
from outside of our group companies. As of March 31, 2021, we had credit facilities at financial institutions totaling 80,464
million yen, and the balance of loan which established line of credit amounted to 42,204 million yen. Of these loans, 40,000
million yen is available to the Company, 1,218 million yen is available to Wacoal International Corp. and 671 million yen isavailable to Wacoal Europe Ltd.
In general, most of our credit facilities have automatically renewed terms, and we are not aware of any issues with respect toany of our lenders that could cause these facilities to become unavailable. Even if any of our subsidiaries loses access tofunds from our credit facilities, we believe that it is possible for other companies in our group to provide any necessary funds.
Our borrowing requirements are not affected by seasonality.
We are not aware of any restrictions on the transfers of funds from a subsidiary to a parent company in the form of a cash
dividend.

28

Our group’s business activities have been impacted by COVID-19 and our cash flows from operating activities may
significantly decrease on a short-term basis. For this reason, we have set up new borrowing facilities with financial institutions
after April 2020 to ensure liquidity on hand. We will reduce the cash outflow that had been planned for operating activities byreassessing it from scratch, and review the timing of new investments in order to ensure liquidity.
a.
Capital Investments
Please see “III. Property, Plants and Equipment – 1. Summary of Capital Investment, etc.”b.
Cash Flows
Please see “(iii) Cash Flow Status.”(vi) Significant Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of the consolidated
financial statements requires our management to make estimates and assumptions. We believe that the followings are some of
the more critical judgment areas in applying our accounting policies in the preparation of our consolidated financial statements.
The assumptions on future business results are subject to uncertainties such as the impact of the COVID-19 and other factorsthat may arise in the future, and are based on information currently available. Please see “Use of Estimates” under “V.
Financial Information – 1. Consolidated Financial Statements (1) Consolidated Financial Statements – Notes to Consolidated
Financial Statements – 1. Summary of Significant Accounting Policies” for the impact of the COVID-19 outbreak on estimates.
a. Revenue Recognition
We recognize revenue when control of promised products are transferred to customers and performance obligations are
satisfied. Our Group’s revenue is recognized for transactions, net of any trade discounts or rebates given. In addition,
provision for expected returns is deducted from revenue based on actual return amounts from previous fiscal year. Potential
increases in trade discounts, rebates or returns resulting from changes in market conditions or consumer demand may
adversely affect our revenue.
b. Allowance for Doubtful Receivable
We are required to assess the collectability of notes and accounts receivable. A considerable amount of judgment is requiredin assessing the ultimate realization of these notes and receivables, including the current creditworthiness of each applicable
customer, to take account business conditions, turnover of receivables, and financial positions for significant customers. In
the event that a customer’s financial condition worsens, the allowance for doubtful receivables may increase and may
adversely affect our financial condition and performance.
c.

Valuation Loss on Inventories

Inventories are stated at the lower of cost or market, cost being determined on a first-in, first-out basis for raw materials andon an average cost basis for work in process and finished products. Market value, or net realizable value, is the estimatedselling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to
make a sale. A periodic review of inventory is performed in order to determine if inventory is properly stated at the lower ofcost or market. Inventories are written down to the estimated net realizable values, if appropriate. Factors, such as expected
average selling price, expected average cost to make a sale, markdown rate, and class or type of inventories, based on
judgments regarding historical results future consumer demand, and other factors, are analyzed to determine estimated net
realizable value. We also consider potential disposal of inventories. We believe that the amount written down is appropriate.
However, if market conditions and demand are less favorable than our projections, the amount we write down may increase
and may adversely affect our business performance etc.
d.

Deferred Tax Assets

We currently have significant deferred tax assets, which are subject to periodic recoverability assessments. Realization of ourdeferred tax assets is principally dependent upon the realization of projected future taxable income. In estimating our futuretaxable income, we consider past results of operation, the feasibility of ongoing tax planning strategies, and other factors. Our
judgments regarding future profitability may change due to future market conditions and other factors. These changes, if any,
may require recognition of a significant valuation allowance for these deferred tax asset balances. In the event we determinethat certain deferred tax assets may not be recoverable, such amounts will be reserved for and may adversely affect net
income. We believe our deferred tax assets after adjustments for valuation allowance are recoverable. If we record lower29

than-expected earnings and our deferred tax assets become unrecoverable, however, a valuation allowance must be recorded
against the amount that is not likely to be recovered, and this may have a negative impact on our profit and loss.
e. Valuation Loss on Marketable securities and Investments
Valuation loss on debt securities are charged to earnings when a decline in fair value below the cost is other than temporary.
We periodically determine whether a decline in the fair value of debts securities and investments is deemed to be other-thantemporary decline, based on criteria that include the duration and severity of market decline, the extent to which cost exceeds
market value, our financial position and business outlook, and our intent and ability to retain the impaired marketablesecurities and investments for sufficient period of time for anticipated recovery in fair value.
Equity securities are measured at fair value and unrealized holding gain or loss is recorded in net profit or loss.
We believe that the criteria for evaluating impairment are reasonable. However, changes in the market or circumstances ofeach individual investment due to unforeseen changes in economic and business assumptions could affect the valuations ofmarketable securities and investments.
As of March 31, 2021, we did not hold any debt securities that had a material unrealized holding loss.
f. Impairment of Long-Lived Assets
The carrying values of long-lived assets, held and used by the Companies, are evaluated for impairment whenever there is an
event or change in circumstances that indicates that such assets have been impaired or that the carrying amounts of such assets
might not be recoverable. When we determined impairment, we evaluate the carrying amount of the assets based on their fairvalue.
In fiscal year 2021, the carrying values of land, building and structures of the Company, buildings and structures, machineryand equipment, vehicles and tools, furniture and fixtures in Wacoal Corp. and its subsidiaries, whose fair values fell below thebook values, were reduced as a result of an impairment test on fixed assets. The impairment charges of 1,136 million yen
were recognized as operating costs and expenses in amounts of 1,088 million yen, 25 million yen and 23 million yen of“Wacoal Business (Domestic)”, “Wacoal Business (Overseas)” and “Other” segments, respectively.
g.

Impairment of Goodwill and Other Intangible Assets

We are required to perform an annual impairment test of our intangible assets with indefinite useful lives and goodwill at least
once a year. We also assess the impairment of such goodwill and intangible assets whenever events or changes incircumstances indicate that the carrying amount may not be recoverable. Some of the factors we consider important that
could trigger an impairment review include the following: significant negative industry or economic trends; significant
underperformance relative to projected future operation results; significant changes in the manner of the strategy for our
overall business; and significant changes in risk-adjusted discount rates.
When we determine that the carrying amount of goodwill and intangible assets may not be recoverable based upon theexistence of one or more of the above indicators of impairment, we evaluate the carrying amount of the assets based on theirfair value. If the fair value is less than the carrying amount of the assets, we record an impairment charge based on the
difference between the carrying amount and the fair value of the assets.
If we make an initial determination that the carrying amount of goodwill and intangible assets may not be recoverable, we
engage an independent appraiser to assist us in our determination of the fair values of our reporting units. In our
determination of the fair value of goodwill, the appraiser utilizes the net present value method with incorporate relevant
unobservable inputs. In our determination of the fair value of trademark, the appraiser utilizes the relief-from-royalty methodwith incorporate relevant unobservable inputs.
As a result of evaluation performed for fiscal year 2021, we recorded 2,673 million yen of impairment charges on goodwill
respectively.
h. Employee Retirement Benefits
We provide a number of retirement benefit plans to a substantial portion of our employees. Our wholly owned subsidiary,
Wacoal Corp., has a contributory retirement plan. The amount of the projected retirement benefit obligation and pension
costs are dependent on management’s assumptions used by actuaries in calculating such amount. The key assumptions
include discount rates, the expected long-term rate of return on plan assets, retirement rates, mortality expectations, and otherfactors. Our management believes that these actuarial assumptions and methods are appropriate in light of our circumstances.
However, due to a change in an actuarial assumption, the amount of the projected retirement benefit plan obligations and costs
may be adversely affected.

30

Our approach to establishing the discount rate is based upon domestic bond rates. The discount rate assumption is based upon
the effective yields as of March 31, 2021 on Japanese government bonds whose maturity dates approximate the timing of the
expected future benefit payments. On March 31, 2021, the discount rate was 0.6.
We determine the expected long-term rate of return on plan asset assumptions by evaluating both historical returns, as well as
estimates of future returns. The expected return on assets was based on expected equity and debt securities returns weighted
by the percentage of each of the major asset classes. The estimate of the long-term rate of return on assets for the contributory
retirement plan is 2.5% for fiscal years 2019 and 2020. The estimated long-term rate of return is based on an asset allocationof equity securities of 26.0%, debt securities of 54.0%, life insurance company general accounts of 18.0%, and short-term
financing of 2.0%.
These assumptions have a significant effect on the amount of the obligation and periodic benefit cost reported. A change of
0.5% in the discount rate and the expected long-term rate of return on plan assets would have the following effects:
Effect on net periodic benefit

Effect on benefit obligation

costs(Millions of yen)

(Millions of yen)

Discount rate: 0.5% decrease

an increase of 236

an increase of 1,803

Discount rate: 0.5% increasea decrease of 191

a decrease of 1,652

Expected long-term rate of
return on plan assets: 0.5%

an increase of 233-

a decrease of 67-

decrease
Expected long-term rate of
return on plan assets: 0.5%
increase

The other retirement plans provide for either lump-sum termination benefits or periodic payments under certain conditions.
Benefits are usually paid as a lump sum at the employee’s termination before the mandatory retirement age.
i. Recent Accounting Pronouncements:
Please see “V. Financial Information – Notes to Consolidated Financial Statements – 1. Summary of Significant Accounting
Policies – Recent Accounting Pronouncements”.

4. 【Material Agreements, etc.】
Not applicable.

31

5. 【Research and Development】
Our research and development activities are mainly conducted by our Human Science Research Center to achieve harmony
between the human body and clothing and to support better product making.
Since 1964, we have been conducting research into the female body in order to accurately understand the Japanese woman’s
physique. In particular, we have developed a silhouette analysis system and introduced a three-dimensional measuring system. We
are also working on an even more advanced measurement of sensory comfort. Our research and development activities focus onaddressing the proportional, physiological, and mental aspects of garment design. One of our most important research results was
the enrichment of our research on sensory comfort through our participation in a project led by the Ministry of Trade and Industry(presently the Ministry of Economy, Trade and Industry) from 1995 to 1998. Based on this research, we have been focusing on
developing new products that are not only comfortable for the wearer, but also have a positive physiological effect based on thebasic study from three factors, which are pressure, heat, and touch. In 2005, we developed and created a new market for ourbreakthrough Style Science series products, which support the creation of a healthy and beautiful body by changing the idea of
everyday walking to walking for exercise. In 2010, we conducted an analysis and announced principles on the physiologicalchanges associated with the aging period from a person’s 20s to their 50s. We also strengthened the development of new products
coping with aging and have been working on developing new functional products based on the lifestyle habits of people as they
undergo small physical changes associated with aging.
Our Human Science Research Center is promoting research and development, which is based on a survey analysis of the body
shapes and needs of young customers including customers of an age of which the products for the first time are introduced, and asenior generation.
During the current fiscal year, we conducted research and development focused on our body care products including wirelessbrassieres and bottoms that protect against gravity and on our body make products including size adjustable brassieres using newmaterials, thermostatic and flexible resin.
As a result of the above, we recorded 463 million yen for our research and development during the fiscal year ended March 2021.
Our research and development activities cover a wide range of research from basic research to product development, mainly of
women’s innerwear. Therefore, it is difficult to relate each of such activities to a specific segment, and thus, we do not provide
information regarding such research and developments by segment.
In order to promote “the realization of an industry supporting women with unbounded living beauty,” we will make efforts toenrich research and development activities that contribute to the improvement of customer satisfaction and corporate value basedon the key concepts of beauty, comfort, and health. We will also work toward strengthening product appeal and developing new
products or services that can gain support from and satisfy our customers.

32

III. 【Property, Plants, and Equipment】
1. 【Summary of Capital Investment, etc. 】
The amount of capital investment for the fiscal year ended March 31, 2021, was 5,604 million yen, mainly including
expenditures for expansion of our Moriyama Distribution Center, information system investments incurred by our subsidiaries,and expenditures for the maintenance and repair of real estate.
The amounts of capital investment made in Wacoal Business (Domestic), Wacoal Business (Overseas), Peach John Business,
and Other were 4,203 million yen, 1,097 million yen, 122 million yen, and 182 million yen, respectively.

2. 【Major Property, Plants, and Equipment】
The table below shows our major property, plants, and equipment within our group (Company and consolidated subsidiaries).
(1) Wacoal Holdings Corp.
As of March 31, 2021
Book Value (Millions of yen)
Facility(Location)

Head Office(Minami-ku, Kyoto) and other

OperatingSegment

Type of Equipment
and Facilities
Buildings andstructures

WacoalFacilities for

Business

administration(Domestic)

affairs, etc.

17,918

MachineryandEquipment

1,196Land (m2)

17,581(263,380)

Number of
Employee(s)Total

36,69685［－］(2) Domestic Subsidiaries
As of March 31, 2021
Book Value (Millions of yen)
Name of Company(Location)

Wacoal Corp. Head Office

OperatingSegment

Type of Equipment
and Facilities
Buildings andstructures

WacoalFacilities for

Business

administration(Domestic)

affairs

Wacoal Corp. Tokyo OfficeWacoalFacilities for(Chiyoda-ku, Tokyo)

Business

administration

One other business office in Tokyo(Domestic)

affairs

Wacoal Corp. Spiral Business

WacoalDepartment

Business(Minato-ku, Tokyo)(Domestic)

Wacoal Distribution Corp.

WacoalFacilities forMoriyama Distribution Center

Businessmerchandise(Moriyama, Shiga)(Domestic)

management

Kyushu Wacoal Manufacturing

WacoalCorp., Nagasaki Plant

Business(Unzen, Nagasaki)(Domestic)

Torica Inc.

Wacoal(Saihakugun Nanbucho, Tottori)

BusinessThree other plants(Domestic)(Minami-ku, Kyoto)
Two other business office in Kyoto
districtNanasai Co., Ltd.
Osaka Commodity Center(Yodogawa-ku, Osaka)

Other

Sales facilities

Manufacturing
facilities
Manufacturing
facilities
Manufacturing
facilities

33

Number of
Employee(s)Machinery,
Vehicle,Equipment,
and Fixtures

Land (m2)

45

175

－

221

20

43

－

63

46

33

－

79

17

89

－

106

－

53

－

53

373

65

171

6

180
(40,840)150(2,790)

Total

618

327

2,111
［ 79］

1,482
［ 51］
－
［ －］
327
［ －］
313
［－ ］
161
［ 49］
22
［－ ］

(3) Overseas Subsidiaries
As of March 31, 2021
Book Value (Millions of yen)
Name of Company(Location)

OperatingSegment

Type of Equipment
and Facilities
Buildings andstructures

Machinery,
Vehicle,Equipment,
and Fixtures

Land (m2)

Total

Number of
Employees

Facilities for
Wacoal America, Inc.
(New York, USA)

Wacoaladministration

Businessaffairs/(Overseas)

merchandise

891

443

573

211

12

19

273

－

248

17

267

192

1,602

(32,300)［ －］management
Wacoal Dominicana Corp.

Wacoal(Santo Domingo, Dominican

Business

Republic)(Overseas)

Wacoal Singapore Private Ltd.
(Singapore)
Wacoal Hong Kong Co., Ltd.
(Hong Kong)(Beijing, China)(Guandong, China)(Bien Hoa City, Vietnam)

Dalian Wacoal Co., Ltd.
(Dalian, China)(Overseas)affairs

WacoalFacilities for

Business

administration

WacoalBusiness

WacoalBusiness

WacoalBusiness(Overseas)
WacoalBusiness(Overseas)

A Tech Textile Co., Ltd.
(Kabin Buri, Thailand）

1
2
3
4

administration(Overseas)

Vietnam Wacoal Corp.

(Note)

Facilities for

Business(Overseas)

Guandong Wacoal Inc.

facilities

Wacoal(Overseas)

Wacoal China Co., Ltd.

Manufacturing

WacoalBusiness(Overseas)

90

1,962

874

(24,459)
203

［ －］
45

234

(235）

［ 10］
143

273

－

［ 28］

affairs
Facilities for adm－

inistration affairs/
manufacturing
Facilities

605

265

（－）
［ 11,871］［ －］－Manufacturing
facilities

74

99

66

126

Facilities for adm

（－）

413

173

［ 11,224］［ －］－inistration affairs/
manufacturing

1,763

192

（－）

［ 1］

［ 25,195］

Facilities－

Manufacturing

181

facilities

220

554

401

（－）

［ 3］

［ 27,543］

Manufacturing

71

facilities

207

227

222

506

（ 58,481）［－］

The amount of book value above does not include consumption taxes, etc.
Area of land under lease by the Company is shown in brackets.
None of our major facilities is currently out of service.
Buildings and land regarding certain domestic subsidiaries under (2) above are under lease by the Company. The bookvalue of the buildings and land are as follows:
Name of Business Office(Location)

Type of Equipment andFacilities

Operating Segment

Book Value (Millions of yen)
Buildings and structures

Land (m 2)

Wacoal Corp. Head Office(Minami-ku, Kyoto)

Wacoal Business

Facilities for

Two other business office in(Domestic)

administration affairs(Chiyoda-ku, Tokyo)

Wacoal Business

Facilities for

One other business office in(Domestic)

administration affairs

10,466

1,885(11,208)

Kyoto district
Wacoal Corp. Tokyo Office
1,109

1,945
(1,471)

Tokyo
Wacoal Corp. Spiral Business
Department(Minato-ku, Tokyo)
Wacoal Distribution Corp.
Moriyama Distribution
Center(Moriyama, Shiga)

Wacoal Business

Sales facilities(Domestic)

938

Facilities for

Wacoal Businessmerchandise(Domestic)

management

34

2,047

3,972
(1,739)1,419(38,923)

Kyushu Wacoal Manufacturing
Corp., Nagasaki Plant(Unzen, Nagasaki)

5
6

Wacoal Business

Manufacturing(Domestic)facilities

52

237

(19,369)

The average number of temporary employees during the period is in brackets.
The details of the major leased facilities by other entities other than the above consolidated subsidiaries are as follows.
(1) Domestic Subsidiaries
Name of Business Office(Location)

Operating Segment

Peach John Co., Ltd. Head Office

Peach John

(Shibuya-ku, Tokyo)

Business

Type of Equipment
and Facilities

Annual Lease
Amount(Millions of yen)

Buildings (m2)Land (m2)

1,554

－

Buildings (m2)Land (m2)

4,772

－

331

926

－

15

Facilities foradministration95

affairs(2) Overseas Subsidiaries
Name of Company(Location)

Wacoal America, Inc.
(New York, USA)
Philippine Wacoal Corp.
(Manila, Philippines)

Operating Segment

Type of Equipment
and Facilities

WacoalFacilities for

Business

administration(Overseas)affairs

WacoalFacilities for

Business

administration(Overseas)affairs

Annual Lease
Amount(Millions of yen)

3. 【Plans for Capital Investment, Disposals of Property, Plants, and Equipment, etc.】(1) Additions of Important Facilities
Name of Company
Name of Business
OfficeLocation

Segment

Type of
Equipment andFacilities

Expected investment amount
Total amount(Millions ofyen)Amount paid
(Millions of
yen)

4,290

900

Start and completion dateFinancingmethodStartCompletion

2020.72022.1

WacoalDistribution Corp.
Moriyama
Distribution Center

Moriyama, Shiga

WacoalBusiness(Domestic)

Facilities formerchandise
management(2) Disposals of Important Facilities
Not applicable.

35

Own resourcesand debt

IV. 【Information on the Company】
1. 【Information on the Company’s Stock, etc.】(1) Total number of shares, etc.
(i) Total number of shares
Class

Total Number of Shares Authorized to be Issued

Common stock

250,000,000 shares

Total

250,000,000 shares(ii) Number of Shares Issued
Names of Stock Exchanges on
Number of Shares Issued
Number of Shares Issued which the Company is listed
as of the end of Fiscal
as of the Filing Dateor Names of AuthorizedYear (March 31, 2021)(June 29, 2021) (shares) Financial Instruments Firms(shares)
Association

Class

Common stock

65,589,042

65,589,042

Total

65,589,042

65,589,042

Description

Shareholders haveunlimited standard rights.
The number of sharesconstituting a unit is 100.

First section of Tokyo
Stock Exchange－－(2) Status of Stock Acquisition Rights(i) 【Stock Option Plans】（1st Stock Acquisition Rights / 2nd Stock Acquisition Rights）
Date of resolution

July 30, 2008

Category and number of eligible grantees
Number of stock acquisition rights
Class, description and number of shares represented by stockacquisition rights
Amount to be paid upon exercise of stock acquisition rights

Director of the Company 5

Director of subsidiary 5

19 (Note 1)

4 (Note 1)

Common stock

Common stock

9,500 shares (Note 2)

2,000 shares (Note 2)

One yen per share
From September 2, 2008

Exercise period

until September 1, 2028
Issue price: 2,275 yen
Amount capitalized as common

Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

stock: 1,138 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights
accompanying reorganization acts

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2021). No change has been made as ofthe end of the month preceding the filing date (May 31, 2021).
(Note) 1
The number of shares represented by one (1) stock acquisition right is 500 shares.
2
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company

36

conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day
following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such3

date, the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the(2)

Exercise Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i)if the Exercise Start Date of the Option holder has not occurred by September 1, 2027

From September 2, 2027 until September 1, 2028.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company awholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,(3)
4

if a resolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.
If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.

In the event that the Company conducts Organizational Restructuring, stock acquisition rights of the Surviving
Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving
Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:

(2)
(3)

(4)

The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued
upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid
after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise of(5)each stock acquisition right to be granted.
Exercise Period for Stock Acquisition Rights:

37

From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table
above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.
(6)

Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
40-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up
to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common

(7)
(8)

stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approvesof any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer;(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribesthat the Company shall be required to obtain the approval of the shareholders of the Company for the(9)acquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that theCompany shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above:（3rd Stock Acquisition Rights / 4th Stock Acquisition Rights）
Date of resolution

July 30, 2009

Category and number of eligible grantees
Number of stock acquisition rights
Class, description and number of shares represented by stockacquisition rights
Amount to be paid upon exercise of stock acquisition rights

Director of the Company 4

Director of subsidiary 4

20 (Note 1)

4 (Note 1)

Common stock

Common stock

10,000 shares (Note 2)

2,000 shares (Note 2)

One yen per share
From September 2, 2009

Exercise period

until September 1, 2029

Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

Issue price:2,169 yen
Amount capitalized as common
stock: 1,085 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights
accompanying reorganization acts

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2021). No change has been made as ofthe end of the month preceding the filing date (May 31, 2021).

38

(Note)1
2

The number of shares represented by one stock acquisition right is 500 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Ratio

=

Conversion Ratio prior toadjustment

X

Ratio of stock split
or reverse stock split

This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company
conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day
following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion

3

Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by suchdate, the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the(2)

expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the“Exercise Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2028
From September 2, 2028 until September 1, 2029.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company awholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,
if a resolution of the board or determination by the chief executive officer of the Company is passed):4

For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving
Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving
Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition(3)

Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:(4)

To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:

(2)

39

The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued
upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid
after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise ofeach stock acquisition right to be granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table

(5)

(6)

above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:
(i)

(7)
(8)

In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
17-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up
to the nearest yen.

(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common
stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer.
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights.
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approvesof any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer;(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribesthat the Company shall be required to obtain the approval of the shareholders of the Company for theacquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that theCompany shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.

(9)

Other Conditions relating to the Exercise of Stock Acquisition Rights.
To be determined pursuant to Note 3 above.

（5th Stock Acquisition Rights / 6th Stock Acquisition Rights）
Date of resolution

July 30, 2010

Category and number of eligible grantees
Number of stock acquisition rights
Class, description and number of shares represented by stockacquisition rights
Amount to be paid upon exercise of stock acquisition rights

Director of the Company 4

Director of subsidiary 3

21 (Note 1)

4 (Note 1)

Common stock
10,500 shares (Note 2)

Common stock
2,000 shares (Note 2)

One yen per share
From September 2, 2010
until September 1, 2030

Exercise period

Issue price: 2,163 yen

Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

Amount capitalized as common
stock: 1,082 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)40

Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights
accompanying reorganization acts

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2021). No change has been made as ofthe end of the month preceding the filing date (May 31, 2021).
(Note)

1
2

The number of shares represented by one stock acquisition right is 500 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Ratio

=

Conversion Ratio prior toadjustment

X

Ratio of stock split
or reverse stock split

This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company
conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day
following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion

3

Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by suchdate, the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the(2)

expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the
Exercise Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2029
From September 2, 2029 until September 1, 2030.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company awholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,
if a resolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.
If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving(3)4Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving
Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:

41

(2)
(3)

(4)

(5)

(6)

The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued
upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid
after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise ofeach stock acquisition right to be granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table
above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:
(i)

(7)
(8)

In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
17-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up
to the nearest yen.

(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common
stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approvesof any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer;(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribesthat the Company shall be required to obtain the approval of the shareholders of the Company for theacquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that theCompany shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.

(9)

Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

（7th Stock Acquisition Rights / 8th Stock Acquisition Rights）
Date of resolution

July 29, 2011

Category and number of eligible grantees

Director of the Company 5

42

Director of subsidiary 5

Number of stock acquisition rights
Class, description and number of shares represented by stockacquisition rights
Amount to be paid upon exercise of stock acquisition rights

31 (Note 1)

4 (Note 1)

Common stock
15,500 shares (Note 2)

Common stock
2,000 shares (Note 2)

One yen per share
From September 2, 2011
until September 1, 2031

Exercise period

Issue price: 1,757 yen

Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

Amount capitalized as common
stock: 879 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights
accompanying reorganization acts

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2021). No change has been made as ofthe end of the month preceding the filing date (May 31, 2021).
(Note) 1
The number of shares represented by one stock acquisition right is 500 shares.
2

In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company
conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day
following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by suchdate, the Company shall provide prompt notification or announcement thereafter.

3(1)

Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the
Exercise Start Date.

(2)

Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i)if the Exercise Start Date of the Option holder has not occurred by September 1, 2030
From September 2, 2030 until September 1, 2031.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company awholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,
if a resolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.

43

(3)
4

If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving
Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving
Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
(2)
(3)

(4)

Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued
upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid
after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise ofeach stock acquisition right to be granted.

(5)

Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table
above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.

(6)

Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
17-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up
to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common

(7)
(8)

stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approvesof any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribesthat the Company shall be required to obtain the approval of the shareholders of the Company for the(9)acquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that theCompany shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
44

To be determined pursuant to Note 3 above.
（9th Stock Acquisition Rights / 10th Stock Acquisition Rights）
Date of resolution

July 31, 2012

Category and number of eligible grantees
Number of stock acquisition rights
Class, description and number of shares represented by stockacquisition rights
Amount to be paid upon exercise of stock acquisition rights

Director of the Company 5

Director of subsidiary 4

35 (Note 1)

3 (Note 1)

Common stock
17,500 shares (Note 2)

Common stock
1,500 shares (Note 2)

One yen per share
From September 4, 2012
until September 3, 2032

Exercise period

Issue price: 1,599 yen

Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

Amount capitalized as common
stock: 800 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights(Note 4)

accompanying reorganization acts

Above is based on information available as of the end of the current fiscal year (March 31, 2021). No change has been made as ofthe end of the month preceding the filing date (May 31, 2021).
(Note) 1
The number of shares represented by one stock acquisition right is 500 shares.
2

In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company
conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day
following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by suchdate, the Company shall provide prompt notification or announcement thereafter.

3(1)

Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the
Exercise Start Date.

(2)

Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i)if the Exercise Start Date of the Option holder has not occurred by September 1, 2031

45

From September 2, 2031 until September 3, 2032.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a(3)4wholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,
if a resolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.
If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving
Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving
Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:
(1)

(2)
(3)

(4)

(5)

(6)

Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued
upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid
after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise ofeach stock acquisition right to be granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table
above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:
(i)

(7)
(8)

In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
17-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up
to the nearest yen.

(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common
stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approvesof any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;46

(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribesthat the Company shall be required to obtain the approval of the shareholders of the Company for theacquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that theCompany shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.
(9)

Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

（11th Stock Acquisition Rights / 12th Stock Acquisition Rights）
Date of resolution

July 31, 2013

Category and number of eligible grantees
Number of stock acquisition rights
Class, description and number of shares represented by stockacquisition rights
Amount to be paid upon exercise of stock acquisition rights

Director of the Company 5

Director of subsidiary 6

34 (Note 1)

8 (Note 1)

Common stock
17,000 shares (Note 2)

Common stock
4,000 shares (Note 2)

One yen per share
From September 3, 2013
until September 2, 2033

Exercise period

Issue price: 1,837 yen

Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

Amount capitalized as common
stock: 919 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights(Note 4)

accompanying reorganization acts

Above is based on information available as of the end of the current fiscal year (March 31, 2021). No change has been made as ofthe end of the month preceding the filing date (May 31, 2021).
(Note) 1
The number of shares represented by one stock acquisition right is 500 shares.
2

In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company
conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day
following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by suchdate, the Company shall provide prompt notification or announcement thereafter.

47

3

(1)

(2)

Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the
Exercise Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2032
From September 2, 2032 until September 2, 2033.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company awholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,
if a resolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.

(3)
4

If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving
Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving
Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
(2)
(3)

(4)

Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued(5)

upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid
after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise ofeach stock acquisition right to be granted.
Exercise Period for Stock Acquisition Rights:(6)

From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table
above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
17-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up
to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common
stock stipulated in (i) above.

(7)
(8)

Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
48

In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approvesof any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes(9)that the Company shall be required to obtain the approval of the shareholders of the Company for theacquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that theCompany shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

（13th Stock Acquisition Rights / 14th Stock Acquisition Rights）
Date of resolution

July 31, 2014

Category and number of eligible grantees

Director of the Company 5

Director of subsidiary 5

Number of stock acquisition rights

31[30](Note 1)

9 (Note 1)

Class, description and number of shares represented by stock

Common stock

Common stock

15,500[15,000] shares (Note 2)

4,500 shares (Note 2)

acquisition rights
Amount to be paid upon exercise of stock acquisition rights

One yen per share
From September 2, 2014
until September 1, 2034

Exercise period

Issue price: 1,875 yen
Amount capitalized as common

Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

stock: 938 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights
accompanying reorganization acts

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2021). Information which has changed
after the end of the current fiscal year until the end of the month preceding the filing date (May 31, 2021) is shown in square
brackets as of the end of the month preceding the filing date. No change has been made to other information since the end of thecurrent fiscal year.
(Note)

1
2

The number of shares represented by one stock acquisition right is 500 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Ratio

=

Conversion Ratio prior toadjustment

X

Ratio of stock split
or reverse stock split

This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company
conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day

49

following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion

3

Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by suchdate, the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the(2)

expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the
Exercise Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2033
From September 2, 2033 until September 1, 2034.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company awholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,
if a resolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.
If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving(3)4Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving
Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
(2)
(3)

(4)

Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued
upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid
after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise ofeach stock acquisition right to be granted.

(5)

Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table
above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.

(6)

Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:

50

(i)

In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
17-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up

to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common
stock stipulated in (i) above.
(7)(8)

Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approvesof any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribesthat the Company shall be required to obtain the approval of the shareholders of the Company for theacquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that the(9)Company shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

（15th Stock Acquisition Rights / 16th Stock Acquisition Rights）
Date of resolution

July 31, 2015

Category and number of eligible grantees
Number of stock acquisition rights
Class, description and number of shares represented by stockacquisition rights
Amount to be paid upon exercise of stock acquisition rights

Director of the Company 5

Director of subsidiary 4

37[32] (Note 1)

6 (Note 1)

Common stock
18,500[16,000] shares (Note 2)

Common stock
3,000 shares (Note 2)

One yen per share
From September 2, 2015
until September 1, 2035

Exercise period
Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

Issue price: 2,839 yen
Amount capitalized as common
stock: 1,420 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights
accompanying reorganization acts

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2021). Information which has changed
after the end of the current fiscal year until the end of the month preceding the filing date (May 31, 2021) is shown in square
brackets as of the end of month preceding the filing date. No change has been made to other information since the end of thecurrent fiscal year.
(Note) 1
The number of shares represented by one stock acquisition right is 500 shares.

51

2

In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company
conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day
following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such3

date, the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the(2)

Exercise Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2034
From September 2, 2034 until September 1, 2035.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company awholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,
if a resolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.

(3)
4

If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving
Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving
Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
(2)
(3)

(4)

Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:

52

The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued
upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid

(5)

(6)

after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise ofeach stock acquisition right to be granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table
above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:
(i)

(7)
(8)

In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
17-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up
to the nearest yen.

(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common
stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approvesof any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribesthat the Company shall be required to obtain the approval of the shareholders of the Company for theacquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that theCompany shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.

(9)

Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

（17th Stock Acquisition Rights / 18th Stock Acquisition Rights）
Date of resolution

July 29, 2016

Category and number of eligible grantees
Number of stock acquisition rights
Class, description and number of shares represented by stockacquisition rights
Amount to be paid upon exercise of stock acquisition rights

Director of the Company 4

Director of subsidiary 6

43 (Note 1)

22[15] (Note 1)

Common stock

Common stock

21,500 shares (Note 2)

11,000[7,500] shares (Note 1)

One yen per share
From September 2, 2016
until September 1, 2036

Exercise period53Issue price: 2,089 yen
Amount capitalized as common

Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

stock: 1,045 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights
accompanying reorganization acts

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2021). Information which has changed
after the end of the current fiscal year until the end of the month preceding the filing date (May 31, 2021) is shown in square
brackets as of the end of month preceding the filing date. No change has been made to other information since the end of thecurrent fiscal year.
(Note)

1
2

The number of shares represented by one stock acquisition right is 500 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company
conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day
following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such3

date, the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the(2)

Exercise Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2035
From September 2, 2035 until September 1, 2036.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company awholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,
if a resolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.

(3)
4

If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving
Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving

54

Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
(2)
(3)

(4)

Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued(5)

upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid
after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise ofeach stock acquisition right to be granted.
Exercise Period for Stock Acquisition Rights:(6)

From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table
above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
17-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up
to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common
stock stipulated in (i) above.

(7)
(8)

Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approvesof any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribesthat the Company shall be required to obtain the approval of the shareholders of the Company for theacquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that the(9)Company shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

（19th Stock Acquisition Rights / 20th Stock Acquisition Rights）
Date of resolution

July 31, 201755

Category and number of eligible grantees
Number of stock acquisition rights
Class, description and number of shares represented by stockacquisition rights
Amount to be paid upon exercise of stock acquisition rights

Director of the Company 4

Director of subsidiary 7

28 (Note 1)

13[9] (Note 1)

Common stock
14,000 shares (Note 2)

Common stock
6,500[4,500] shares (Note 2)

One yen per share
From September 2, 2017
until September 1, 2037

Exercise period
Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

Issue price: 2,919 yen
Amount capitalized as common
stock: 1,460 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights
accompanying reorganization acts

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2021). Information which has changed
after the end of the current fiscal year until the end of the month preceding the filing date (May 31, 2021) is shown in square
brackets as of the end of month preceding the filing date. No change has been made to other information since the end of thecurrent fiscal year.
(Note) 1
The number of shares represented by one stock acquisition right is 500 shares.
2

In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company
conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day
following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by suchdate, the Company shall provide prompt notification or announcement thereafter.

3(1)

Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the
Exercise Start Date.

(2)

Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i)if the Exercise Start Date of the Option holder has not occurred by September 1, 2036
From September 2, 2036 until September 1, 2037.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a56

wholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,
if a resolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3)
4

If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving
Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving
Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:
(1)

(2)
(3)

(4)

Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued
upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid
after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise ofeach stock acquisition right to be granted.

(5)

Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table
above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.

(6)

Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
17-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up
to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common

(7)
(8)

stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approvesof any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer; or57

(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribesthat the Company shall be required to obtain the approval of the shareholders of the Company for theacquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that the(9)Company shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

(21st Stock Acquisition Rights / 22nd Stock Acquisition Rights）
Date of resolution

July 20, 2018

Category and number of eligible grantees
Number of stock acquisition rights
Class, description and number of shares represented by stockacquisition rights

Director of the Company 5

Director of subsidiary 5

147 (Note 1)

62 (Note 1)

Common stock
14,700 shares (Note 2)

Common stock
6,200 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

Exercise period

From August 18, 2018
until August 17, 2038

Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

Issue price: 3,006 yen
Amount capitalized as common
stock: 1,503 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights
accompanying reorganization acts

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2021). No change has been made as ofthe end of the month preceding the filing date (May 31, 2021).
(Note)

1
2

The number of shares represented by one stock acquisition right is 100 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company
conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day
following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such3

date, the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the
Exercise Start Date.

58

(2)

Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by August 17, 2037
From August 18, 2037 until August 17, 2038.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company awholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,
if a resolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.

(3)
4

If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving
Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving
Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:
(1)

(2)
(3)

(4)

Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued
upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid
after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise ofeach stock acquisition right to be granted.

(5)

Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table
above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.

(6)

Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
17-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up
to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common

(7)
(8)

stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves59

of any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribesthat the Company shall be required to obtain the approval of the shareholders of the Company for theacquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that the(9)Company shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

(23rd Stock Acquisition Rights / 24th Stock Acquisition Rights）
Date of resolution

June 27, 2019

Category and number of eligible grantees
Number of stock acquisition rights
Class, description and number of shares represented by stockacquisition rights

Director of the Company 4

Director of subsidiary 6

172 (Note 1)

113 (Note 1)

Common stock
17,200 shares (Note 2)

Common stock
11,300 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

Exercise period

From July 23, 2019
until July 22, 2039

Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

Issue price: 2,517 yen
Amount capitalized as common
stock: 1,259 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights
accompanying reorganization acts

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2021). No change has been made as ofthe end of the month preceding the filing date (May 31, 2021).
(Note)

1
2

The number of shares represented by one stock acquisition right is 100 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company
conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day
following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.

60

Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such3

date, the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the(2)

Exercise Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by July 22, 2038
From July 23, 2038 until July 22, 2039.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company awholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,
if a resolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.

(3)
4

If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving
Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving
Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:
(1)

(2)
(3)

(4)

Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued
upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid
after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise ofeach stock acquisition right to be granted.

(5)

Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table
above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.

(6)

Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
17-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up
to the nearest yen.

61

(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common
stock stipulated in (i) above.
(7)(8)

Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approvesof any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribesthat the Company shall be required to obtain the approval of the shareholders of the Company for theacquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that the(9)Company shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

(25th Stock Acquisition Rights / 26th Stock Acquisition Rights）
Date of resolution

June 26, 2020

Category and number of eligible grantees
Number of stock acquisition rights
Class, description and number of shares represented by stockacquisition rights

Director of the Company 5

Director of subsidiary 6

245 (Note 1)

112 (Note 1)

Common stock
24,500 shares (Note 2)

Common stock
11,200 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

Exercise period

From July 18, 2020
until July 17, 2040

Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

Issue price: 1,769 yen
Amount capitalized as common
stock: 885 yen

Terms and conditions for exercising the stock acquisition rights(Note 3)Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

Matters related to the grant of stock acquisition rights
accompanying reorganization acts

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2021). No change has been made as ofthe end of the month preceding the filing date (May 31, 2021).
(Note)

1
2

The number of shares represented by one stock acquisition right is 100 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted inaccordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which
the reverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company

62

conducts a stock split that is conditioned on approval at a general meeting of shareholders of the Company of anincrease in stockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that therecord date for such stock split is set prior to the conclusion of such general meeting of shareholders, from the day
following the conclusion of such general meeting of shareholders, the adjustment will apply retroactively from the day
following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such3

date, the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided, however, thatin such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the(2)

Exercise Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only
during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by July 17, 2039
From July 18, 2039 until July 17, 2040.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company awholly owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required,
if a resolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.

(3)
4

If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving
Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following
terms and conditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving
Company shall issue new stock acquisition rights; provided, however, that this shall be limited to the case where thegrant of stock acquisition rights of the Surviving Company pursuant to the following conditions is stipulated in theabsorption-type demerger agreement, incorporation-type demerger agreement, merger and spin-off agreement, newspin-off plan, stock swap agreement, or share transfer plan:
(1)

(2)
(3)

(4)

Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid
after restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued
upon the exercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid
after restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise ofeach stock acquisition right to be granted.

(5)

Exercise Period for Stock Acquisition Rights:

63

From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table
above and (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the
exercise of stock acquisition rights as stipulated in the table above.
(6)

Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due tothe Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shallbe increased by half the limit for increases in common stock that are calculated in accordance with Article
17-1 of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up
to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capitalshall be increased by the amount remaining after deducting the increase in the limit for increase in common

(7)
(8)

stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approvesof any of the following), the Company may acquire stock acquisition rights without compensation on a dateseparately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company,
with respect to all of its issued shares, shall be required to obtain the approval of the shareholders of theCompany for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribesthat the Company shall be required to obtain the approval of the shareholders of the Company for the(9)acquisition of the shares to be issued upon the exercise of stock acquisition rights by transfer or that theCompany shall obtain all of the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

(ii) 【Right Plans】
Not applicable.
(iii) 【Other Stock Acquisition Rights】
Not applicable.
(3) Status of Exercise of Bonds with Stock Acquisition Rights containing a Clause for Exercise Price Adjustment
Not applicable.

(4) Trends in the Total Number of Shares Issued, Common Stock, etc.

Date

October 1, 2017 (Note 1)

May 25, 2018 (Note 2)

Changes in the
Total Number of
Shares Issued(Thousands ofshares)Balance of Total
Number of Shares
Issued (Thousandsof shares)

Changes in
Common Stock(Millions of yen)

Balance ofCommon Stock(Millions of yen)

Changes in
Additional Paid-in
Capital (Millions ofyen)

Balance of
Additional Paid-in
Capital(Millions ofyen)△71,689

71,689－13,260－29,294△1,00070,689－13,260－29,29464

May 24, 2019 (Note 2)

May 25, 2020 (Note 2)(Note)△2,10068,589－13,260－29,294△3,10065,589－13,260－29,294

1

Reflect the share consolidation pursuant to which two (2) shares were consolidated into one (1) share.

2

The decrease was due to the cancellation of treasury stock.

(5) Status of Shareholders
As of March 31, 2021
Status of Shares (1 unit = 100 shares)
Shares Less
Than One
Unit(share)Foreign Shareholders
Category

Number ofshareholders

National and
Local
Governments

Financial
Institutions

Securities
Companies

Other
Corporations

Foreignshareholders
other than
individuals

Individuals

－

51

27

195

194

15

14,88315,365－－

301,842

11,576111,21088,94653

140,956

654,583

130,742

－

46.11

1.77

16.99

13.59

0.01

21.53

100

－

Individuals
and Other

Total

Number ofshares held
(units)Ratio (%)

(Note)

1

Out of the treasury stock of 3,168,353 shares, 31,683 units are included under “Individuals and Other,” and 53
shares of less than one unit are included under “Shares less than One Unit.”

2 Shares under “Other Corporations” and “Shares less than One Unit” include 2 units and 27 shares,
respectively, held under the name of the Japan Securities Depository Center.

65

(6) Status of Major Shareholders
As of March 31, 2021
Name of Shareholder
Custody Bank of Japan, Ltd. (Trust

Address

Number of Shares
held by Shareholder(Thousands of shares)

Shareholding
Ratio (%)

1-8-12, Harumi, Chuo-ku, Tokyo

4,000

6.41

The Master Trust Bank of Japan, Ltd.
(Trust Account)

2-11-3, Hamamatsucho, Minato-ku, Tokyo

3,938

6.31

The Bank of Mitsubishi UFJ,Ltd.

2-7-1, Marunouchi, Chiyoda-ku, Tokyo

3,095

4.96

Meiji Yasuda Life Insurance Company

2-1-1, Marunouchi, Chiyoda-ku, Tokyo

3,050

4.89

The Bank of Kyoto, Ltd.

700, Yakushimae-cho, Karasuma-dori,Matsubara-agaru, Shimogyo-ku, Kyoto

2,352

3.77

1,836

2.94

Account)

Nippon Life Insurance Company

1-6-6, Marunouchi, Chiyoda-ku, Tokyo(Nippon Life Insurance Securities Services)

The Shiga Bank, Ltd.

1-38, Hamamachi, Otsu-shi, Shiga

1,775

2.84

Mitsubishi UFJ Trust and Banking
Corporation

1-4-5, Marunouchi, Chiyoda-ku, Tokyo

1,525

2.44

The Dai-ichi Life Insurance Company,
Limited13-1, Yurakucho 1-chome, Chiyoda-ku,
Tokyo

1,366

2.19

Asahi Kasei Corporation

1-2 Yurakucho 1-chome, Chiyoda-ku,
Tokyo

1,241

1.99

Total

──────

24,18038.74(Note)

1

The Company is holding 3,168 thousand shares of treasury stock, which are not listed in the above list of major
shareholders.

2

The numbers of shares held by Custody Bank of Japan, Ltd. (Trust Account) and The Master Trust Bank of Japan, Ltd.
(Trust Account) are related to their respective trust services.

3

The substantial shareholding report dated April 13, 2018, filed by Mitsubishi UFJ Financial Group, Inc., which is
publicly available, indicates that the shareholders in the below table are holding the respective number of theCompany’s shares as of April 9, 2018. However, as we were unable to confirm the actual status of the shareholdings ofthese shareholders as of the end of fiscal year 2021, those shareholdings have not been reflected in the above list. In
addition, the content of such substantial shareholding report (the amended report) is as follows:

Name of Shareholder

Address

Number of Shares
held by Shareholder Shareholding Ratio(Thousands of(%)
shares)The Bank of Mitsubishi UFJ, Ltd.

2-7-1, Marunouchi, Chiyoda-ku, Tokyo

3,295

4.60

Mitsubishi UFJ Trust and Banking
Corporation

1-4-5, Marunouchi, Chiyoda-ku, Tokyo

3,167

4.42

Mitsubishi UFJ International AssetManagement Co., Ltd.

1-12-1, Yurakucho, Chiyoda-ku, Tokyo

187

0.26

6,649

9.28

Total

66

(7) Status of Voting Rights(i) Shares Issued
As of March 31, 2021
Number of Shares(Shares)Number of Voting Rights(Units)Description

Shares without voting rights

－

－

－

Shares with restricted voting rights –treasury stock, etc.

－

－

－

Shares with restricted voting rights –
other

－

－

－

Category(Treasury stock)

Shares with full voting rights –treasury stock, etc.

Common stock

Common stock
62,290,000

622,900

Common stock

Shares less than one unit

130,742

Total number of shares issued

65,589,042

Total voting rights held by all
shareholders
1

rights. The number ofshares constituting a unit
is 100.

－3,168,300

Shares with full voting rights – other(Note)

Shareholders haveunlimited standard

Same as above.

－

Same as above.

－－
622,900－－

Shares under “Shares with full voting rights – other” include 200 shares held under the name of the Japan Securities
Depository Center. Also, 2 units of the voting right under the “Number of Voting Rights” are related to the shares with fullvoting rights held under the name of the Japan Securities Depository Center.

(ii) Treasury Stock, etc.
As of March 31, 2021
Name of
Shareholder

Address

Number of
Shares held under
Own Name

Number of
Shares held under
the Name of
OthersTotal Number of
Shares held

Shareholding Ratio(%)(Treasury stock)

29 Nakajima-cho,

Wacoal Holdings
Corp.

Kisshoin, Minamiku, Kyoto

3,168,300－

3,168,300

4.83

Total

－

3,168,300－

3,168,300

4.83

67

2. 【Information on Acquisition etc. of Treasury Stock】<Class of shares>
Acquisition of shares of common stock under the condition set forth in Article 155, Item 7 of the Companies Act(1) Acquisition of Treasury Stock based on a Resolution of General Meeting of Shareholders
Not applicable.
(2) Acquisition of Treasury Stock based on a Resolution of Board of Directors
Not applicable.
(3) Acquisition of Treasury Stock not based on a Resolution of Ordinary General Meeting of Shareholders or Board of Directors
Acquisition pursuant to Article 155, Item 7 of the Companies Act
Number of Shares
Category
Total Amount (Yen)(Shares)
Treasury stock acquired during the current fiscal year443

910,741

Treasury stock acquired during the current period－－(Note)The number of shares of treasury stock acquired during the current period does not include the number ofshares less than one unit purchased during the period from June 1, 2021 until the filing date of this report.

(4) Status of Disposition and Holding of Acquired Treasury Stock
Current Fiscal Year
Category

Current Period

Number of Total Disposition
Number of Total Disposition
Shares (Shares) Amount (Yen)
Shares (Shares) Amount (Yen)

Acquired treasury stock that was offered to subscribers
for subscription

－

－

－

－

3,000,000

8,404,303,715

－

－

－

－

－

－

－

－

－

－

Other (exercise of stock acquisition rights)

18,50051,818,500

8,500

23,808,500

Number of shares of treasury stock held

3,168,353－

3,159,853－

Acquired treasury stock that was canceled
Acquired treasury stock that was transferred due tomerger, stock swap, stock delivery, or company split
Other (transfer of shares less than one unit perpurchase request)(Note)The number of shares of treasury stock held during the current period does not include shares less than one unit purchased
or sold during the period from June 1, 2021 until the filing date of this report.

68

3. 【Dividend Policy】
Our basic policy on profit distribution to shareholders is to make stable distributions based on consideration of our consolidated
performance, while seeking to increase our enterprise value through active investment aimed at higher profitability and to increase
net income per share.
Our basic policy is to distribute earnings twice a year in the form of interim and year-end dividends and the Board of Directors
is the decision-making body for distribution of earnings.
Based on such policy, we plan to distribute a year-end dividend of 20.00 yen per share as a distribution of earnings for thecurrent fiscal year. As a result, the annual cash dividend per share, including an interim dividend of 20.00 yen per share, is 40.00
yen for the current fiscal year.
As for retained earnings, with the aim of improving our corporate value, we have actively invested in expanding new points ofcontact with consumers for our domestic business and our overseas businesses. We also plan to use our retained earnings in our
strategic investments for maintaining competitiveness and reinforcing growth. With these efforts, we seek to benefit ourshareholders by improving future profitability.
We also provide that the Company may distribute earnings subject to the resolution of the Board of Directors pursuant to theprovisions of Paragraph 1, Article 459 of the Companies Act.
(Note)The distribution of earnings for which record date belongs to the current fiscal year is as follows:
Total Dividend Amount
Dividend Amount per Share
Date of Resolution(Millions of yen)
(Yen)

October 30, 2020
Resolution of Board of Directors’ meeting
May 14, 2021
Resolution of Board of Directors’ meeting

69

1,248

20.00

1,248

20.00

4【Corporate Governance, etc.】(1) 【Status of Corporate Governance】(ⅰ) Fundamental Policies for Corporate Governance:
The purpose and basic policy of our group’s corporate governance is to continuously enhance our corporate value
by increasing transparency and securing the fairness and independence of our corporate management to establish mutual
confidence relationship with all stakeholders, including our shareholders, customers, employee, client and community.
(ⅱ) Outline of System of Corporate Governance and Reason for Adoption of such Systema.

Outline of System of Corporate Governance
We, as a holding company, use an “Audit & Supervisory Board Member system” for the purpose of ensuring thecorporate governance of group companies, and have both the Board of Directors and the Audit & Supervisory Board monitor
and supervise the management operating the Company.
Our Board of Directors is composed of seven Directors (including three Outside Directors) and one of them isfemale. Their roles are to supervise and make business judgments from an objective perspective. We have been working toenhance the supervisory function and to improve the decision-making process. Further, the term of office of each Director is
one year for the purpose of clarifying the responsibilities of our management, and establishing a management system that may
respond promptly to changes in the business environment.
In addition to the supervisory function of the Board of Directors, the Audit & Supervisory Board is composed offive Audit & Supervisory Board Members (including three Outside Audit & Supervisory Board Members). Their function is
to monitor and supervise our management.
We have designated the above-stated three Outside Directors and three Outside Audit & Supervisory Board
Members (i.e., six persons in total) as our independent officers.
We, as a holding company, seek to govern our group companies with the management, audit, and supervisorysystems as set out below:
The Board of Directors shall hold a regular Board of Directors’ meeting every month and also hold a special Boardof Directors’ meeting from time to time, as necessary, in accordance with the rules of the Board of Directors, tomake decisions on matters concerning important business, such as management policy and management strategy
and matters stipulated by laws or ordinances or our Articles of Incorporation. Further, we have established the“Group Management Meeting” comprising our Directors and major management members, which considers--

matters concerning the management strategy of our group and other important management issues and conducts
preliminary reviews of matters for review by our Board of Directors.
The Audit & Supervisory Board shall hold regular monthly meetings at the same time as the Board of Directors’
meetings and also hold special meetings from time to time, as necessary, in accordance with the rules of the Audit& Supervisory Board, to make decisions on matters concerning the preparation of audit reports and audit policies,
method of asset status investigation and execution of duties by the Audit & Supervisory Board Members.
We have established the “Executive Nomination Advisory Committee” and “Executive Compensation Advisory
Committee”, which are each chaired by the Independent Outside Director and half of which is filled by the Outside
Directors. These Committees discuss and provide recommendations on nomination, promotion and remunerationof Directors. The “Executive Nomination Advisory Committee” shall be held, in principle, in January when the
Board of Directors’ meeting is held, and the “Executive Nomination Advisory Committee” shall be held, inprinciple, in April, July and February when the Board of Directors’ meeting is held. Each Committee is operated--

with a high degree of transparency and fairness pursuant to resolutions approved unanimously with all members
in attendance.
The Independent Outside Officers Meeting, which is joined mainly by the Independent Officers, performs anevaluation on the Board of Directors after exchange of views among the members of such Meeting. The details of
discussions are reported to the Board of Directors, which are also disclosed in our Corporate Governance Report.
In order to improve our system of compliance, we have established a Corporate Ethics and Risk Management
Committee, for which our Representative Director and President acts as head in charge of the committee and the
Director of Supervisor of Group Business Management acts as chairman, which will consider any complianceissues which may have a material impact on the Wacoal Group, enhance awareness and enlightenment on corporate
ethics and effectively promote control of any management risks on the Wacoal Group.

70

The members of each Committee/Meeting are as follows (● indicates chair or chairman, ○ indicates members
and * indicates supervisor):

Board of
Title

Name

Directors’Meeting

Representative
Director andChairman

Yoshikata
Tsukamoto

Audit &

Executive

Executive

Independent

Supervisory

Nomination

Compensation

OutsideBoard

Advisory

Advisory

Officers

Meeting

Committee

Committee

Meeting○

Group
Management
Meeting

Corporate Ethics
and RiskManagement
Committee○

Representative
Director,
President andHironobu

Corporate

Yasuhara

●

○

○

*

○

○

●

●

○

○

Officer of theCompany
Director andVice President

Tomoyasu

Corporate

Ito○

Officer
Director andManaging

Akira

Corporate

Miyagi

○

○

○

●

○

○

○

○

○

○

○

○

○

●

●

○

Officer
Outside Director
Outside Director
Outside Director
Standing Audit& Supervisory
Board Member
Standing Audit& Supervisory
Board Member
Audit &
Supervisory
Board Member
Audit &
Supervisory
Board Member
Audit &
Supervisory
Board Member

MadokaMayuzumi
Shigeru
Saito
Tsunehiko
Iwai
Shinichi
Kitagawa
Katsuhiro
Okamoto
HiroshiShirai
Mitsuhiro
Hamamoto
MinoruShimada

○

●

○

○

○

○

○

○

○

○

○

○

○

○

○
○

Other

71

○

The following diagram illustrates the outline of our corporate governance system:
General Meeting of Shareholders

Executive Nomination Advisory Committee
Chaired by: Outside Director
Members: 5 (including 3 Outside Directors)

Executive Compensation Advisory Committee
Chaired by: Outside Director
Members: 5 (including 3 Outside Directors)

Submitrecommendation

Audit & Supervisory Board
Members: 5 (including 3 Outside Audit &Supervisory Board Members)

Audit

Board of Directors
Members: 7 (including 3 Outside Directors)

Submitrecommendation

Appointment
and removal

Appointment and removal of
Audit & Supervisory Member

Appointment and removal of Director

Cooperate

Secretarial Office for Audit & Supervisory Board

Evaluate/
examineIndependent Outside Officers Meeting

Audit

Appointment and removal

Representative Director, President and Corporate
Officer of the Company

Cooperate

Audit Office

Key Management Committees

Group Management Meeting

Corporate Ethics and Risk
Management Committee

Accounting audit

Corporate Ethics Hotline
Management Issues
Review Committee

Quarterly Business Results
Review Committee

Give instructions

ReportCompliance Committee

Give instructions

Business Execution Divisions/Group Companies

72

CSR Procurement Committee

ReportInternal audit

Accounting Auditor

Execution ofoperation

b. Reason for Adoption of Corporate Governance System
The Company has adopted a governance system by a “Board of Directors” composed of Directors who are experts
in each business area and Outside Directors with diverse careers, and an “Audit & Supervisory Board” including Outside
Audit & Supervisory Board Members. We, as a holding company, believe that this governance system is effective insupervising and auditing the execution of duties at our group companies and to realize and maintain high-quality management.
For the foregoing reason, we have adopted our current governance system.
(ⅲ) Other Matters regarding Corporate Governance Systema.

Status of Improvement of Internal Control System
Our fundamental philosophy toward the internal control system and the status of improvement thereof, details of
which have been determined at the Board of Directors’ meetings, are as follows:＜System to Ensure Appropriate Business Conduct＞(System to ensure that execution of duties by Directors and/or employees is in compliance with laws and regulations and the
Articles of Incorporation)
To ensure that all Directors and employees of the business group comprised of the Company and its subsidiaries (“theWacoal Group”) comply with laws and regulations and the Articles of Incorporation and conduct business based on
sound social norms, we have enacted the “Wacoal Code of Ethics” and the “Corporate Ethics: Wacoal Standards ofConduct”.
-

In order to improve our system of compliance, we have established a Corporate Ethics and Risk Management
Committee, for which our Representative Director and President acts as administrative manager and the Director ofSupervisor of Group Business Management acts as chairman, which will consider any compliance issues which may
have a material impact on the Wacoal Group, enhance awareness and enlightenment on corporate ethics and effectively
promote control of any management risks on the Wacoal Group. The Management Planning Department shall act asorganizer, and shall be responsible for the corporate ethics and risk management related to the Wacoal Group.

-

We have established a system under which our legal/compliance department could be promptly notified if the fact thata Director and/or employee of the Wacoal Group may have violated the “Wacoal Code of Ethics” or the “Corporate
Ethics: Wacoal’s Code of Conduct”, or any other compliance issues is found. We have also established an internal
alerting system (corporate ethics hotline to the legal/compliance department and a law firm). After being notified
and/or alerted, the legal/compliance department conducts an investigation and formulates preventive measures after
discussions with the related department. If the issue is critical, the legal/compliance department will refer the matterto the Corporate Ethics and Risk Management Committee and will report the results of its deliberation to the Board of
Directors and/or Audit & Supervisory Board.

-“The Corporate Ethics: Wacoal Standards of Conduct” prescribes that Directors, and employees shall firmly refuse tocomply with demands of antisocial forces. In order to handle unjust demands of antisocial forces, we cooperate withoutside specialized institutions, collect and/or control information related to antisocial forces and are building aninternal system.

(System concerning the Storage and Management of Information related to Execution of Duties by Directors)
With the approval of the Board of Directors, we have enacted the “Document Management Rules” pursuant to which
we store the following documents (including electromagnetic records; hereafter the same) along with any relatedmaterials:-

Minutes of the General Meeting of Shareholders, minutes of the Board of Directors’ meetings, minutes of theGroup Management meetings, documents for which a Director is the final decision maker, and any otherdocuments prescribed in the “Document Management Rules”.
The retention period and the place for storage of the documents prescribed in the preceding paragraph shall be subject
to the “Document Management Rules”, but such retention period shall be at least ten years. The Directors and Audit& Supervisory Board Members shall have access to these documents at all times.

(Rules and Other Systems Concerning Risk Management of Losses)
In order to understand the management risk within the Wacoal Group in general and to improve and/or strengthen ourrisk management system, we have established the Corporate Ethics and Risk Management Committee, for which ourRepresentative Director and President acts as administrative manager and the Director of Supervisor of Group Business
Management as Chairman. The Management Planning Department shall act as the organizer.

73

-

-

The Corporate Ethics and Risk Management Committee prescribes “the Risk management basic rules”, subject to theapproval of the Board of Directors, which form the basis for our risk management system. The Corporate Ethics andRisk Management Committee clarifies the responsibilities by risk category pursuant to these rules, and formulates arisk management system that thoroughly and/or comprehensively controls potential risk within the Wacoal Group.
The Corporate Ethics and Risk Management Committee regularly reports on the operations of the Wacoal Group’s risk
management system to the Board of Directors.

(System to Ensure Effective Execution of Duties by Directors)---

In order to enhance appropriate decision-making by our Directors, we will at least one-third of all Directors will be
independent Outside Directors.
We will formulate a medium-term management plan to be shared by the Directors and/or employees within the Wacoal
Group and will direct and confirm courses of action and business targets in the mid to short term that are consistent
with such plan.
We will follow the business results of each Wacoal Group company on a monthly basis and report back to the Boardof Directors. In addition, by holding “Quarterly Business Results Review Committee”, we will confirm the businessresults and the implementation of measures and policies, consider measures in the event targets are not achieved, andreview such targets, as may be necessary.
We adopt a corporate officer system, under which we seek to build an appropriate and efficient management system
which clearly defines the delegation of authority and responsibilities with respect to major Group companies(System to Ensure Appropriate Business Conduct within Group Companies)
We have enacted “the Group Management Rules”, which prescribe basic policies regarding the management of Group
companies and matters to be decided by our Board of Directors, as well as matters to be reported to the Company andmanage our Group companies in accordance with the rules.
--

We conduct any intercompany transaction fairly in compliance with laws and regulations, accounting principles andthe tax system.
Our audit office will conduct internal audits, including an audit of the establishment and/or operation of our compliancesystem and risk management system, within the group companies and will report the results of its audits to the Boardof Directors and appropriate departments and give guidance and/or advice related to the above group companies toensure the appropriate conduct of business.
Our foreign subsidiaries will comply with the laws and regulations of their respective home countries and will adopt asystem that is in line with our policies to the extent reasonable.

(Matters Concerning Assistants to Audit & Supervisory Board Members)-

Audit & Supervisory Board Members may appoint employees of the Company as their assistants who are to assist theduties of the Audit & Supervisory Board Members.
Such assistants shall be full-time employees. In order to ensure the effectiveness and independence of such assistants,
decisions on personal affairs, including appointment, evaluation, relocation and discipline of such assistants will be
subject to the consent of the Audit & Supervisory Board Members.

-(Reporting System of Directors and Employees to the Audit & Supervisory Board Members and Other Reporting System to
Audit & Supervisory Board Members)--

Directors of the Wacoal Group will promptly report to the Audit & Supervisory Board Members if they become awareof a material fact that violates the applicable laws and regulations and/or our Articles of Incorporation, misconduct ora fact that may cause significant damage to any company of the Wacoal Group.
Employees of the Wacoal Group may directly report to the Audit & Supervisory Board Members if they become awareof a material fact that violates the applicable laws and regulations and/or our Articles of Incorporation, misconduct ora fact that may cause significant damage to any company of the Wacoal Group. Any employee who makes such reportwill not be at a disadvantage for the reason of making such report.

-

Through the reporting of the following matters in addition to statutory matters to the Audit & Supervisory Board
Members by Directors and employees of the Wacoal Group, we strive to have the Audit & Supervisory Board Members
audit conducted effectively.
Matters referred to the Group Management Meeting
Monthly and quarterly group management conditions
Results of audits of operations
74

The condition of our internal reporting to our internal alert system
Other significant matters(Other Systems to Ensure Effective Audit by the Audit & Supervisory Board Members)
The majority of the Audit & Supervisory Board Members will be independent Outside Audit & Supervisory Board
Members to enhance the transparency and neutrality of audit.
The Audit & Supervisory Board Members may order employees who belong to the audit office to perform any tasks-

that are required to provide audit services. In addition, the Audit & Supervisory Board Members may request theCompany for reimbursement of expenses incurred for performing their duties.
Audit & Supervisory Board Members will attend meetings of the Board of Directors and may also attend other primary
meetings of the Wacoal Group.
The Audit & Supervisory Board Members will regularly meet with the audit office and the Accounting Auditor toreceive reports and to exchange opinions.
The Audit & Supervisory Board may consult legal counsel, certified public accountants, consultants, or other outsideadvisers as it deems necessary.

< Outline of Operation of our “System to Ensure Appropriate Business Conduct>(System to ensure that execution of duties by Directors and/or employees is in compliance with laws and regulations andthe Articles of Incorporation)
We have a Compliance Committee which specifically establishes and operates our compliance system. The-

Compliance Committee held a meeting each quarter and discussed and reviewed awareness of compliance and mattersreported to us through the internal alert system.
Our legal/compliance department continued to provide level-specific group education and e-learning programs as
part of our educational activities for our employees. We are also making step-by-step efforts to strengthen theinternal alert system for our overseas Group companies by providing compliance awareness training and carrying out
compliance review by a third-party as well as by expanding our external corporate ethics hotline.

(System concerning the Storage and Management of Information related to Execution of Duties by Directors)
Documents prescribed in the “Document Management Rules” have been properly stored in accordance with the“Document Management Rules” and the Directors and Audit & Supervisory Board Members have access to these
documents on a timely basis.
(Rules and Other Systems Concerning Risk Management of Losses)
The Corporate Ethics and Risk Management Committee assessed risks, monitored the implementation of measurestaken, and reported to the Board of Directors on a quarterly basis.
--

In April 2018, we established the CSR Procurement Committee as a subcommittee of the Corporate Ethics and Risk
Management Committee. As part of our group purchase policy, we worked on an initiative that links the following
functions, which we continue to expand, in order to check the outsources’ compliance with the “Wacoal Group CSRbased Procurement Guidelines”, which includes promotion of business transactions with business enterprises thatemphasize attention to social needs with respect to human rights, labor practices, environment and ethics; monitoringof self-evaluation by outsources; analysis/assessment feedback; correction/improvement plans; and follow-up.
In response to the coronavirus pandemic, we have established the Coronavirus Pandemic Countermeasure Team, as a
subcommittee of the Corporate Ethics and Risk Management Committee, in February 2020. The Coronavirus Pandemic
Countermeasure Team gathered and delivered pandemic-related information within our group, formulated guidelines
and policies based on the guidance issued by the government and local authorities, and made efforts to spreadawareness of such policies and guidance within our group companies.

(System to Ensure Effective Execution of Duties by Directors)
We engage in highly transparent decision-making by appointing three independent Outside Directors among our seven
Directors.
We discussed and drafted Wacoal Group’s plan which is during fiscal year 2022.
We held meetings of the “Quarterly Business Results Review Committee” on a quarterly basis and confirmed andreviewed the business results and implementation of measures.

75

(System to Ensure Appropriate Business Conduct within Group Companies)-

Matters to be decided and reported by our subsidiaries are appropriately managed in accordance with the “GroupManagement Rules”.
Our audit office develops an audit plan for each fiscal year and conducts audits on the operation and internal controlsof the Company and our domestic and overseas subsidiaries.

(Matters Concerning Assistants to Audit & Supervisory Board Members)-

Our audit office is currently assisting the duties of the Audit & Supervisory Board Members upon their request fromtime to time. Audit & Supervisory Board Members have not requested or appointed any assistant for their duties.

(Reporting System of Directors and Employees to the Audit & Supervisory Board Members and Other Reporting System
to Audit & Supervisory Board Members)-

The Audit & Supervisory Board Members attended primary meetings and received reports on matters that werediscussed and on the management condition, and also received reports, from time to time, on the results of internal
audits and matters reported through the internal alert system.

(Other Systems to Ensure Effective Audits by Audit & Supervisory Board Members)--

We enhance the effectiveness of audit by appointing three independent Outside Audit & Supervisory Board Members
among the five Audit & Supervisory Board Members.
The Company reimburses any and all expenses incurred by the Audit & Supervisory Board Members for performing
their duties.
The Audit & Supervisory Board Members attend meetings of the Board of Directors and other important meetings,
conduct hearings with the Directors and also visit our subsidiaries to conduct audits. In addition, the Audit &Supervisory Board Members presided at “Audit & Supervisory Board Group Meetings” and received periodic reports
from the audit & supervisory board members of the domestic subsidiaries.
The Audit & Supervisory Board Members have, regularly and whenever necessary, exchanged information andopinions with the Accounting Auditor and the audit office.

b.

Matters Concerning Limitation of Liability Agreements with Outside Directors and Outside Audit & Supervisory Board
Members
Pursuant to the provisions of Paragraph 1, Article 427 of the Companies Act and our Articles of Incorporation, theCompany has executed an agreement with its Directors (excluding executive directors, etc.) and Audit & Supervisory Board
Members to limit their liability for damages as stipulated in Paragraph 1, Article 423 of the Companies Act.
The maximum amount of liability under such agreement is the minimum amount as provided by laws andregulations.

c.

Number of Directors
Our Articles of Incorporation prescribe that the number of Directors of the Company shall be not more than eight.

d.

Requirement for Appointment of Directors
Our Articles of Incorporation prescribe that resolutions to appoint Directors shall be made by a majority vote of thevoting rights of shareholders present at a General Meeting of Shareholders, where such shareholders present shall hold shares
representing one-third or more of the voting rights of all shareholders who are entitled to exercise such voting rights and that
resolutions to appoint Directors shall not be adopted by cumulative voting.

e.

Requirement for Special Resolutions at General Meeting of Shareholders
Our Articles of Incorporation prescribe that a resolution as stipulated in Paragraph 2, Article 309 of the Companies
Act shall be adopted by a two-thirds majority of the voting rights held by the shareholders present at the General Meeting of
Shareholders, who shall represent one-third or more of the total number of voting rights of the shareholders who are entitled
to exercise such voting rights. The purpose of this provision is to more surely secure the quorum for a special resolution at
any General Meeting of Shareholders.

76

f.

Decision-Making Body for Distribution of Earnings, etc.
Our Articles of Incorporation prescribe that matters set out in each Item of Paragraph 1, Article 459 of the Companies
Act (including the matters concerning distribution of earnings) shall be determined by a resolution of the Board of Directors,
unless otherwise provided for in any laws or regulations, for the purpose of performing an expeditious profit return to ourshareholders.

(2)【Directors and Audit & Supervisory Board Members】(ⅰ) List of Officers
Male: 11 persons
Female: 1 person (which accounted for 8.3% of the total number of directors and audit & supervisory board members)
Number of
Title

Name

Date of BirthBusiness Experience and Position(s) and Office(s)Office Shares Owned
Term (Thousands ofshares)Representative
Director andChairman

Yoshikata
TsukamotoJan. 29, 1948

Apr. 1972

Joined the Company

Nov. 1977

Director of the Company

Nov. 1981

Managing Director of the Company

Sep. 1984

Executive Vice President of the Company

Sep. 1984

Representative Director (acting)Jun. 1987
Oct. 2005

President and Director of the Company
Representative Director, President and Corporate Officer ofNote 1

279

Note 1

12Note 1

4

Wacoal Corp.
Apr. 2011

Representative Director and Chairman of Wacoal Corp.

Jun. 2018

Representative Director and Chairman of the Company (acting)Apr. 2020

Chairman of Kyoto Chamber of Commerce and Industry (acting)Mar. 1975

Joined the Company

Apr. 1997

President of Wacoal China Co., Ltd.

Apr. 2005

Corporate Officer/General Manager of Wing Brand Business
Department of the Company

Jun. 2006

Director and Managing Corporate Officer, General Manager ofWing Brand Business Department, of Wacoal Corp.

Representative
Director,
President andCorporate

Apr. 2010

Director and Senior Managing Corporate Officer, and General
Manager of Wacoal Brand Business Department, of Wacoal

Hironobu
Yasuhara

Dec. 28, 1951

Corp.
Apr. 2011

Representative Director, President and Corporate Officer of
Wacoal Corp.

OfficerJun. 2011

Director of the Company

Jun. 2013

Senior Managing Director of the Company

Jun. 2016

Vice President and Director of the Company

Apr. 2018
Jun. 2018

Representative Director and Chairman of Wacoal Corp.
Representative Director of the Company and President

Apr. 2020

Representative Director, President and Corporate Officer of theCompany (acting)Apr. 1983

Joined the Company

Apr. 2006

General Manager of Sales Planning Division, Wacoal -Brand
Operations of Wacoal Corp.

Apr. 2007

Representative Director and President of Studio Five Corp.

Apr. 2011

General Manager of Innerwear Merchandising Division, Wacoal Brand Operations of Wacoal Corp.

Director and

Apr. 2014

Vice President

Tomoyasu

Corporate

ItoJan. 18,1960

Director, Corporate Officer, Head of Wacoal-Brand Operationsof Wacoal Corp.

Apr. 2015

Officer

Director, Managing Corporate Officer, Head of Wacoal -Brand
Operations of Wacoal Corp.

Apr. 2016

Director, Senior Managing Corporate Officer, Head of Wacoal-Apr. 2018

Brand Operations of Wacoal Corp
Appointed Representative Director, President and Corporate
Officer of Wacoal Corp (acting).

Apr. 2020

Vice President Corporate Officer

Jun.2020

Director and Vice President Corporate Office (acting)77Mar. 1984

Joined the Company

Oct. 2007

General Manager of Business Management and Administrationof Wacoal Brand Operation Division of Wacoal Corp.

Apr. 2011

Director and Deputy General Manager of Wacoal China Co.,Ltd.

Director andManaging

Akira

Corporate

MiyagiOct. 18,1960

Apr. 2014

General Manager of Corporate Planning of the Company

Apr. 2017
Jun. 2018

Corporate Officer of Wacoal Corp.
Director and General Manager of Corporate Planning of theNote 1

3Note 1－

Note 1

1Note 1－

Note 51Company

OfficerJun.2019

Managing director and General Manager of Corporate Planningof the Company

Apr. 2020

Director and Managing Corporate Officer in charge of Group
Finance of the Company

Jun. 2021

Director and Managing Corporate Officer in charge of Group
Business Management (acting)

Aug. 1996

Launched and organized monthly haiku magazine Gekkan
HepburnJan. 2001

Member of “National Language Subdivision” of Council for
Cultural Affairs, Ministry of Education, Culture, Sports, Scienceand Technology

Director

MadokaMayuzumi

Dec. 2004

Member of “Council for the Promotion of Cultural Diplomacy”,

Apr. 2010

Cabinet Secretariat“Japan Cultural Envoy” appointed by the Agency for Cultural
Affairs

Jul. 31, 1962
May. 2013

Member of “Forum to Realize Culture and Arts-Oriented
Nation” held by Minister of Education, Culture, Sports, Scienceand Technology

Apr. 2014

Member of “Cultural Policy Subdivision” of Council for Cultural
Affairs, Ministry of Education, Culture, Sports, Science andTechnology

Apr. 2014

Advisor of the Company

Jun. 2015

Director of the Company (acting)Nov. 1979

Joined Tose Co., Ltd.
General Manager of Development Department

Director

Shigeru
Saito

Jan 26, 1957

Oct. 1985

Director of Tose Co., Ltd.

Feb. 1987

Representative Director and President of TOSE CO., LTD.

Sep. 2004

Representative Director and President, and CEO of TOSE CO.,LTD.

Dec. 2015

Representative Director and Chairman, and CEO of TOSE CO.,LTD. (acting)Jun. 2017

Director of the Company (acting)Apr. 1979

Joined Shiseido Co., Ltd.

Apr. 2002

General Manager of Product Commercialization, Planning
Department, Shiseido Co., Ltd.

Apr. 2008

Corporate Officer, General Manager of Technical Department,
Shiseido Co., Ltd.

Director

Tsunehiko
Iwai

May 28, 1953

Jun. 2014

Director, Corporate Executive Officer in charge of Research &Development, Production and Technical Affairs, Shiseido Co.,
Ltd.

Jan. 2016

Representative Director, Executive Vice President Chief
Technology & Innovation Officer, Shiseido Co., Ltd.

Mar. 2018
Jun. 2018

Senior Advisor, Shiseido Co., Ltd.
Director of the Company (acting)Mar. 1985

Joined the Company

Apr. 2008

Director and General Manager of Accounting and
Administration Division of Studio Five Corp.

Standing Audit& Supervisory
Board Member

Shinichi
Kitagawa

Apr. 2009

Director and General Manager of Business Control Division ofApr. 2013

Studio Five Corp.
IR/Public Relations Officer of the Company.

Apr. 2018

General Manager of Accounting Department of the Company

Jun. 2020

Audit & Supervisory Board Member of the Company (acting)Jun. 2021

Audit & Supervisory Board Member of Wacoal Corp. (acting)Dec. 29, 196278

Mar. 1986

Joined the Company

Apr. 2010Materials Control Manager of Technology/Production Divisionof Wacoal Corp.

May. 2012

Representative Director and President of Hokuriku Wacoal
Sewing Corp.

Standing Audit

Katsuhiro& Supervisory

OkamotoBoard Member

Oct. 20, 1963

Apr. 2014

Representative Director and President of Kyushu Wacoal

Apr. 2016

Manufacturing Corp.
General Manager of Innerwear Merchandising Supervisory

Note 6－Note 44Note 62

Note 3

1

Division, Wacoal-Brand Operations of Wacoal Corp.
Apr. 2018

Corporate Officer, General Manager of Wacoal-Brand Innerwear
Products Supervisory Division, Wholesale Division of Wacoal
Corp.

Audit &
Supervisory Board
MemberHiroshiShiraiOct. 21, 1953

Jun. 2021

Audit & Supervisory Board Member of Wacoal Corp. (acting)Jun. 2021

Audit & Supervisory Board Member of the Company (acting)Nov. 1977

Joined Pricewaterhouse

Aug. 1982

Registered as Certified Public Accountant

Jul. 1992

Joined Aoyama Audit Corporation

Aug. 2007

Joined Deloitte Touche Tohmatsu

Jun. 2010

Vice Chairman of The Japanese Institute of Certified Public
Accountants Kinki Chapter

Sep. 2011

Left Deloitte Touche Tohmatsu

Oct. 2011

Established Shirai public accounting firm, Managing Partner(acting)

Audit &
Supervisory
Board Member

Mitsuhiro
Hamamoto

Apr. 18, 1970

Jun. 2015

Audit & Supervisory Board Member (acting)Oct. 2000

Admitted to the Bar

Oct. 2000

Joined the Law Office of Tadashi Yamada

Oct. 2004

Joined the Kikkawa Law Office

Apr. 2008

Partner at the Kikkawa Law OfficeJun. 2017

Audit & Supervisory Board Member of the Company (acting)Feb. 2019

Managing Partner of Hamamoto Law Office (acting)Apr. 1977

Joined The Bank of Tokyo, Ltd. (current “MUFG Bank, Ltd.”)

Jun. 2004

Corporate Officer, General Manager of Corporate Banking
Group No.1, Corporate Banking Division No.4, The Bank ofTokyo Mitsubishi, Ltd. (current “MUFG Bank, Ltd.”)

May. 2005

Corporate Officer, Manager of New York Branch

Apr. 2008

Managing Corporate Officer, General Manager of Corporate
Banking Group, Nagoya Branch, The Bank of Tokyo -Mitsubishi

Audit &
Supervisory
Board Member

MinoruShimadaUFJ, Ltd. (current “MUFG Bank, Ltd.”)
Feb. 22,1955

Jun. 2010

Representative Director and Vice President, SOTSU
CORPORATION

Jun. 2011

Representative Director and President, NAIGAICONSTRUCTION CO., LTD.

Jun. 2012

Representative Director and President, SOTSU CORPORATION
Representative Director and President, SOTSU AMENITY

Jun. 2018

SERVICE CORPORATION
Director and Chairman, SOTSU CORPORATION
Audit & Supervisory Board Member of the Company (acting)
Total(Note)

1
2
3
4
5
6
7

8

310

The term of office of a Director is one year from the conclusion of the Ordinary General Meeting of Shareholders heldon June 29, 2021.
Directors Ms. Madoka Mayuzumi, Mr. Shigeru Saito and Mr. Tsunehiko Iwai are Outside Directors.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of the Ordinary General
Meeting of Shareholders held on June 28, 2018.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of the Ordinary General
Meeting of Shareholders to be held on June 27, 2019.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of the Ordinary General
Meeting of Shareholders to be held on June 26, 2020.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of the Ordinary General
Meeting of Shareholders to be held on June 29, 2021.
Audit & Supervisory Board Members Mr. Hiroshi Shirai, Mr. Mitsuhiro Hamamoto and Mr. Minoru Shimada are
Outside Audit & Supervisory Board Members.
We have adopted the corporate officer system in order to clarify executive responsibility and accelerate the speed of
execution of duties.

The Corporate Officers who do not concurrently serve as Directors are as follows:79TitleCorporate
Officer

Name
Katsuya

General Manager of Corporate Planning

HirookaCorporatein charge of Group Personnel, Director and Corporate Officer and General Manager of Personnel and

Takahiko

Officer

Administration Division of Wacoal Corp.

Hasegawa

Corporatein charge of Group Technology and Production, Director and Corporate Officer and General

Kazuhiro

OfficerManager of Technology/Production Division of Wacoal Corp.

Shibahara

Corporatein charge of Group International Business, Director and Managing Corporate Officer and General

Masaaki

OfficerManager of Global Division of Wacoal Corp.

YajimaCorporatein charge of Group Research and Development, Corporate Officer and Director of Human Science

Hiroshi

Officer

Research Center of Wacoal Corp.

Imai

Corporatein charge of Group IT Promotion, Corporate Officer and Manager of IT Supervisory Division of

Officer

Wacoal Corp.

(ii)

Shuji
Morimoto

Status of Outside Officers
We have three Outside Directors and three Outside Audit & Supervisory Board Members.
We have elected those persons playing an active role widely in the field of arts and culture in Japan and overseas
and persons having extensive knowledge and experience as executives to our Outside Directors, and each of such persons
takes a role in improving the appropriateness of the decision made by the Board of Directors by giving objective andindependent advice based on their long careers in each business area and extensive professional knowledge. Also, we haveelected those persons who have experiences as business administrators in financial services, independent attorneys at law or
independent certified public accountants having a considerable degree of finance and accounting knowledge, to our Outside
Audit & Supervisory Board Members. Each Outside Audit & Supervisory Board Member conducts a strict audit on the legalityof Directors’ decision making and performance of their businesses from a technical perspective by maintaining high levels of
independence.
The Company prescribes “Criteria for Appointment of Officers” and “Criteria for Appointment of Outside Officers(that ensures independence)” for appointing an Outside Director and an Outside Audit & Supervisory Board Member.
Upon the appointment of an Outside Director Board Member, the “Executive Nomination Advisory Committee”
will submit a list of candidates based on the following criteria to the Board of directors, and a candidate for Audit &Supervisory Board Member is appointed at a Board of Directors’ meeting with the approval of the Audit & Supervisory Board.
The list of candidates for Audit & Supervisory Board Member is then submitted to a general meeting of shareholders as anagenda item.
- A candidate with superior character and knowledge and is mentally and physically healthy;- A candidate pursues a law-abiding spirit;- A candidate has comprehensive experience in business operation, company management, legal community,
administration, accounting, education or culture and art and upon re-appointment, his/her management
performance and contribution to the group management during the term of office shall be considered;- A candidate is not in violation of the “Criteria for Appointment of Outside Officers (that ensures independence)”
separately prescribed by the Company;- A candidate is not currently holding a position as an officer of 4 or more listed companies;- By appointing such candidate, Board of Directors and the Audit & Supervisory Board will each have a balanced
knowledge, experience and expertise that ensures diversity such as gender and internationalism;
We also believe that an Outside Director and an Outside Audit & Supervisory Board Member shall maintain an
independent position so that each will not cause any conflict of interest with general shareholders. From this aspect, theCompany shall appoint a candidate for an Outside Officer who does not fall under any of the following items:
1. Has held a position to execute duties at any of our group companies;
2. A major shareholder holding the shares of the Company under its name or other name, is equal to or higher than
5% as percentage of voting rights; in case such major shareholders is a legal entity or an association such as
general partnership (“Entities”), a candidate who is holding a position to execute duties at such Entities;
3. A candidate who:80

- is the major client of our group or considers our group as the candidate’s major client; in case such candidate
is an Entity, a candidate who is holding a position to execute duties at such Entity;- is the major lender of our group; in case such lender is an Entity, a candidate who is holding a position to
execute duties at such Entity;- is holding a position to execute duties at lead manager securities company; or- is holding a position to execute duties at any Entity in which our group hold shares, whose percentage ofvoting rights is equal to or greater than 5%.
4. A certified public accountant who works at an audit firm, which is the Accounting Auditor of our group;
5. Any legal counsel, accountant, tax accountant, patent attorney, consultant or other expert who receives large
amount of monies or other assets from our group; in case such candidate is an Entity, an expert who works atsuch Entity;
6. Anyone who receives large amount of donation from our group; in case such candidate is an Entity, a candidate
who is holding a position to execute duties at such Entity;
7. A candidate who is holding a position to execute duties at other companies having a relationship involving
mutual appointment of outside officers;
8. A spouse or second-degree relative of a person (limited to those significant) who falls under any of the items
under 1 through 7 above;
9. A candidate who used to fall under any of the items under 1 through 8 above during the past three years;
10. A candidate who is deemed to have a special circumstance where a possible conflict of interest with generalshareholders of the Company may arise.
It should be noted, however, that a candidate who falls under any of the items under 2 through 9 above, but who
fulfills the requirements of an outside officer under the Companies Act, and if the Company deems it appropriate for suchcandidate to be appointed as an outside officer, may exceptionally become a candidate for an outside officer by describing
the reasons of the Company for making such judgment.
For our Outside Directors, the Management Planning Department hands out documents setting out the proposals
presented to the Board of Directors’ meetings in advance and gives prior explanations on important matters to them. For
Outside Audit & Supervisory Board Member, Standing Audit & Supervisory Board Member does it.
One of our Outside Director and three of our Outside Audit & Supervisory Board Members hold 1,000 and 8,000
shares of common stock of the Company, respectively. Other than the foregoing, there are no special interests between our
Outside Directors or Outside Audit & Supervisory Board Members and the Company.

81

The reasons for the election of our Outside Directors and Outside Audit & Supervisory Board Members are as
follows:
Title

Name

Outside Director

Madoka Mayuzumi

Outside Director

Shigeru Saito

Outside Director

Tsunehiko Iwai

Outside Audit &Supervisory Board
MemberHiroshi Shirai

Outside Audit &Supervisory Board
MemberMitsuhiro Hamamoto

Reasons for Election
Ms. Mayuzumi plays an active role as a haiku poet in the field of arts andculture in Japan and overseas. While serving as Advisor of the Company from
April 2014, she has provided advice that addresses social challenges andeducational training for employees of the Company and Wacoal Corp. We
expect that, with her knowledge and experience, she will contribute to theCompany’s management which respects diversity.
Although Ms. Mayuzumi has never been involved in the Company’s
management other than by way of serving as an Outside Director or Outside
Audit & Supervisory Board Member in the past, we believe that she will beable to perform her duties appropriately for the above-stated reasons.
Also, because she meets the eligibility requirements which the Company
prescribes under “Criteria for Appointment of Outside Officers (to ensure
independence)” and because there are no concerns that any conflict of interest
with general shareholders may arise, we have designated her as an independent
officer.
Mr. Saito currently serves as the Representative Director and Chairman at
another company, and has many years of experience and knowledge as abusiness manager. We believe that he is qualified to be an Outside Director tofurther strengthen the supervisory function of the Company management.
Also, because he meets the eligibility requirements which the Company
prescribes under “Criteria for Appointment of Outside Officers (to ensure
independence)” and because there are no concerns that any conflict of interest
with general shareholders may arise, we have designated him as an independent
officer.
We believe that Mr. Iwai is qualified to be an Outside Director to further
strengthen the supervisory function of the Company management, as he has
extensive knowledge and experience as management, as well as specialized
knowledge in the fields of research & development, production and technology.
Also, because he meets the eligibility requirements which the Company
prescribes under “Criteria for Appointment of Outside Officers (to ensure
independence)” and because there are no concerns that any conflict of interest
with general shareholders may arise, we have designated him as an independent
officer.
We believe that Mr. Shirai is qualified to be our Outside Audit & Supervisory
Board Member, as he has knowledge and experience in accounting and finance(including U.S. accounting standards) as a certified public accountant.
Mr. Shirai worked at Deloitte Touche Tohmatsu LLC, our accounting auditor,
from August 2007 to September 2011, but he was never involved in the audit
services engaged for the Company during such period. It has been eight years
and eight months since Mr. Shirai left Deloitte Touche Tohmatsu LLC.
Also, because he meets the eligibility requirements which the Company
prescribes under “Criteria for Appointment of Outside Officers (to ensure
independence)” and because there are no concerns that any conflict of interest
with general shareholders may arise, we have designated him as anindependent officer.
We believe that Mr. Hamamoto is qualified to be our Outside Audit &Supervisory Board Member, as he has legal knowledge and great store ofexperience of business and commercial issues as an attorney at law.
Also, because he meets the eligibility requirements which the Company
prescribes under “Criteria for Appointment of Outside Officers (to ensure
independence)” and because there are no concerns that any conflict of interest
with general shareholders may arise, we have designated him as anindependent officer.

82

Outside Audit &Supervisory Board
Member(ⅲ)

Minoru Shimada

We believe that Mr. Shimada is qualified to be our Outside Audit &Supervisory Board Member, as he has years of experience in the financial
industry and also has extensive experience and expertise in different industrial
sectors.
Also, because he meets the eligibility requirements which the Company
prescribes under “Criteria for Appointment of Outside Officers (to ensure
independence)” and because there are no concerns that any conflict of interest
with general shareholders may arise, we have designated him as anindependent officer.

Supervision or Audit and Internal Audit by Outside Directors or Outside Audit & Supervisory Board Members, Audit byAudit & Supervisory Board Members and Mutual Collaboration with Accounting Auditor, as well as Relationship with Internal
Control Division
Outside Directors fulfill the supervisory function of management by providing recommendations at the Board of Directors meetings
based on their extensive knowledge and experience after they receive necessary documents and are explained about agenda items
which they receive prior to the Board of Directors meetings, as well as by serving as the chair or a member of the “Executive
Compensation Advisory Committee” and/or “Executive Nomination Advisory Committee”. Outside Directors also contribute to
the implementation and/or maintenance of the internal control system by receiving various reports from the internal control division.
Outside Audit & Supervisory Board Members perform the audit of the internal control system, including fair presentation of financial
statements, by attending meetings of the Audit & Supervisory Board, and by establishing sufficient communication channels andcoordinating with the Standing Audit & Supervisory Board Members, who in turn report to the Outside Audit & Supervisory Board
Members the status of audit on operations, details of important meetings and other matters as necessary, as well as by receiving
various reports from the Accounting Auditor and internal control division. In addition, based on matters discussed at the meetings of
the Audit & Supervisory Board, Outside Audit & Supervisory Board Members attend the Board of Directors meetings and otherimportant meetings and enhance the effectiveness of audit by visiting and conducting hearings at our subsidiaries.
In addition to the above, Outside Directors and Outside Audit & Supervisory Board Members exchange opinions on issues raised inconnection with the operation of the Board of Directors’ meeting.

(3)【Status of Audit】(ⅰ) Status of Audit by Audit & Supervisory Board Members
a. Organization and Members
Our Audit & Supervisor Board are composed of five members, who are two Standing Audit & Supervisory Board Members and three
Outside Audit & Supervisory Board Members. Standing Audit & Supervisory Board Member Mr. Shinichi Kitagawa serves as thehead of the Audit & Supervisor Board. Standing Audit & Supervisory Board Member Mr. Shinichi Kitagawa and outside Audit &Supervisory Board Member Mr. Hiroshi Shirai, qualified as a certified accountant, has a considerable degree of finance andaccounting knowledge. Standing Audit & Supervisory Board Member Mr. Katsuhiro Okamoto provides audit and advices based on
his extensive knowledge and experience at Wacoal Corp., our core operating entity, as well as our overseas subsidiaries. Outside
Audit & Supervisory Board Member Mr. Mitsuhiro Hamamoto provides audit and advices based on his legal knowledge as a lawyer
and experience in business law, which is his area of specialization. Outside Audit & Supervisory Board Member Mr. Minoru Shimada
provides audit and advices based on extensive experience in financial industry and extensive knowledge as a corporate executive.
These increase the effectiveness of audit by the Audit & Supervisory Board Members. The foregoing members have enhanced theeffectiveness of audit. In addition, we have a full-time assistant for the Secretarial Office for the Audit & Supervisory Board to assist
the duties of the Audit & Supervisory Board Members and our Audit Office assists the duties of the Audit & Supervisory Board
Members upon their request from time to time.

b. Activities of Audit & Supervisory Board
The Audit & Supervisory Board generally meets once a month before the Board of Directors meeting and also from time to time asnecessary. We held 15 meetings during the current fiscal year. The attendance record of each Audit & Supervisory Board Member
is as follows.

83TitleStanding Audit &Supervisory
Board Member
Standing Audit &Supervisory
Board Member
Outside Audit &Supervisory
Board Member
Outside Audit &Supervisory
Board Member
Outside Audit &Supervisory
Board Member

Name

Meeting attendance (Attendance rate)

Kiyotaka

15/15 (100%)

Hiroshima
Shinichi

15/15 (100%)

Kitagawa
Hiroshi

15/15 (100%)

Shirai
Mitsuhiro

15/15 (100%)

Hamamoto
Minoru15/15 (100%)

ShimadaThe Audit & Supervisory Board prepares an audit report, determines appointment and removal of Standing
Audit & Supervisory Board Members, audit policies, procedures of investigation on the conduct of the business,
the assets, properties and matters regarding the execution of duties of Audit & Supervisory Board Members inaccordance with the Companies Act. The Audit & Supervisory Board also examines matters to be resolved by
the Audit & Supervisory Board such as matters regarding appointment and removal or non-reappointment of theaccounting auditor, consent on the amount of compensation, etc. paid for the accounting auditor, consent on
appointment of Audit & Supervisory Board Members, examines the agenda of the Board of Directors inadvance, exchanges information and opinions in relation to audit, exchanges opinions with the Representative
Director and Chairman and the Representative Director and President, and conducts hearings on the executionof duties with our executive Directors and the Directors of Wacoal Corp., our major subsidiary. The Audit &Supervisory Board monitors and inspects the status of the audit by the accounting auditor through results ofquarterly review and the status of its accounting audit at the end of the fiscal year, as well as hearings on thesystem to ensure the appropriate execution of duties of the accounting auditor and the results of audits on theinternal controls as appropriate.
c. Activities of Audit & Supervisory Board Members
The Audit & Supervisory Board Members attend meetings of the Board of Directors and other important
meetings such as Group Management Meeting, express their opinions as necessary and hear explanation on
important operational matters from the Directors etc. in accordance with the audit standards prescribed by the
Audit & Supervisory Board. The Audit & Supervisory Board Members also monitors and inspects the system toensure appropriate business conduct to perform audits on legality and validity of the execution of duties of the
Directors. In addition, Outside Audit & Supervisory Board Member Mr. Minoru Shimada attends the Executive
Nomination Advisory Committee and the Executive Compensation Advisory Committee as an observer andexpresses his opinions as necessary and Standing Audit & Supervisory Board Members attend the Corporate
Ethics and Risk Management Committee, the Compliance Committee and the CSR Procurement Committee as
an observer and express their opinions as necessary in order to strengthen the monitoring function on
operations.
Standing Audit & Supervisory Board Members make efforts to communicate with the Directors and employees,
maintain an environment for information gathering and auditing, conduct audits on the status of principal offices
and the assets and properties, receive monthly reports from Audit Office and share the information with Outside
Audit & Supervisory Board Members in accordance with the audit standards and the assignment of work
responsibilities prescribed by the Audit & Supervisory Board. Standing Audit & Supervisory Board Members
also hold Audit & Supervisory Board group meetings annually, receive annual reports from the Audit &Supervisory Board Members of the domestic subsidiaries and visit the domestic subsidiaries to conduct audits
with Outside Audit & Supervisory Board Members as much as possible in order to understand the management
condition through hearings from the management. Standing Audit & Supervisory Board Members receive
reports regarding the management conditions of the major overseas subsidiaries from Global division from time84

to time.
During the current fiscal year, we focused on audits on how we ensure objective decision-making at Board of
Directors meetings, progress on designing a system concerning executive compensation and nomination tothoroughly fulfill functions required by the Board of Directors, how the Company is responding to amendments
to the Companies Act or revisions to the Corporate Governance Code, and Company’s policies on groupmanagement.
(ⅱ) Status of Internal Audit
Pursuant to the “Internal Audit Regulations”, our Audit Office, the internal audit division, which is directly under thecontrol of the Representative Director and President, audits the legality and appropriateness of the execution ofoperations at the Company and our domestic and overseas subsidiaries, and evaluates the effectiveness of the internal
controls. The results of such audit and evaluation are regularly reported to the Representative Director and President.
The number of staff of our internal audit department (Audit Office) was nine.
Our Audit & Supervisory Board Members and internal audit department (Audit Office) have a regular meeting forreporting and confirmation once a month. The main purpose of such meeting is to report the discussions at major
meetings at which our Audit & Supervisory Board Members attended, activities conducted by our Audit Office, andother matters. We have implemented an audit system allowing the sharing of documents and information necessary foraudit so that audit working papers are mutually exchanged and confirmed by our Audit & Supervisory Board Members
and Audit Office, and the audit can be performed more efficiently and effectively through alliance between our Audit &Supervisory Board Members and Audit Office.
Further, our Audit & Supervisory Board Members and Accounting Auditor have regular meetings for discussion six
times a year. The purpose of such discussion is mainly to report and confirm the plan and status of the audit and to
exchange opinions on the management. In addition, they have meetings from time to time as necessary.
(ⅲ) Status of Accounting Audita.

Name of Audit Firm
An accounting audit agreement has been executed between the Company and Deloitte Touche Tohmatsu LLC(“Tohmatsu”) pursuant to the Companies Act and the Financial Instruments and Exchange Act.

b. Consecutive Number of Years during which Audit Was Performed
53 yearsc. Names of the certified public accountants who were engaged in the audit:
Designated Limited Liability Partners and Managing Members:
Tsuji
d.

Koichiro Tsukuda, Hiroaki Sakai, Tomomi

Composition of the assistants for the audit services:
8 certified public accountants, 5 persons who passed the certified public accountant examination and 8 otherpersons

e．Policies and Reason for Appointing Audit Firm
The Audit & Supervisor Board selects the certified public accountants, etc. on the condition that such certified public accountant
does not fall under any of the item under Paragraph 1, Article 340 of the Companies Act and that there are no event that may
impair the eligibility and independence of such certified public accountant.
We have selected Tohmatsu based on the fact that it has the required independence, expertise, and appropriateness and adequacy
in auditing activities, and on our judgment that it has the system to ensure that the accounting audit of the Company will be
conducted appropriately and sufficiently.
f．Evaluation of Audit Firm by Audit & Supervisory Board Members and Audit & Supervisory Board
Upon the discussion and resolution on the appointment and non-reappointment of Tohmatsu at a meeting held on April 24, 2020,
the Audit & Supervisory Board performed an evaluation from the following perspectives: (1) how the compliance system has
85been established and operated; (2) ensuring and/or monitoring of independence; (3) system to ensure audit quality; (4) high levelof audit and/or accounting expertise; (5) communication with the Audit & Supervisory Board Members; and (6) sufficiency oftime taken for audit procedures and adequacy of remuneration for audit.
(ⅳ) Audit Fees
A. Fees to Certified Public Accountants
Fiscal Year Ended March 31, 2020
Category
Fees for Audit Services(Millions of yen)

Fiscal Year Ended March 31, 2021

Fees for Nonaudit
Services(Millions of yen)

Fees for Audit Services(Millions of yen)

Fees for Nonaudit
Services(Millions of yen)

The Company

146

82

139

71

Consolidated
subsidiaries

14

－

14

－

Total

160

82

153

71

Fees paid to the certified public accountants for fiscal year ended March 31, 2020 and March 31, 2021 werecompensation for the advice and guidance regarding the creation of Group Accounting Rules and consulting services
for CSR procurement activities, and for the advice and guidance regarding accounting standards and information
disclosure, respectively, which are out of the scope of the services that are set forth in Paragraph 1, Article 2 of theCertified Public Accountants Act.
B．Fees to the same network as the CPA (Deloitte) (excluding A)
Fiscal Year Ended March 31, 2020
Category

Fees for Audit
Services

Fees for Nonaudit
Services

Fiscal Year Ended March 31, 2021
Fees for Audit
Services

Fees for Nonaudit
Services(Millions of yen)
(Millions of yen)
(Millions of yen)
(Millions of yen)－－
The Company
2220
Consolidated
111
57
105
37
subsidiaries
Total
111
79
105
57
For both fiscal years ended March 31, 2020 and 2021, the Company paid fees to the accounting auditor or certified
public accountants as compensation for the advice and guidance regarding tax.
In the fiscal year ended March 31, 2020, the consolidated subsidiaries paid fees to the accounting auditor or certified
public accountants as compensation for the advice and guidance regarding tax and M&A. In the fiscal year ended
March 31, 2021, the consolidated subsidiaries paid fees to the accounting auditor or certified public accountants ascompensation for the advice and guidance regarding tax.
C. Other material audit fees
Not applicable.
D. Policy on determination of audit fees
The Company determines the amount of audit fees to be paid to the certified public accountants, etc., taking into
account the number of days required for the audit, the characteristics of services, and other factors.
E．Reason by Audit & Supervisory Board Members for giving consent on the amount of fees payable to the accounting
auditor
The Audit & Supervisory Board has obtained necessary documents and received explanations regarding thecomparison of the estimated time under the audit plan from the previous fiscal year and the actual time used for audit
performance and the trend in the amount of fees paid for the audit performance during the past fiscal years from therelevant departments and the accounting auditor, has reviewed the details of audit planning, basis for calculating fees
and level of fees presented by the accounting auditor for the current fiscal year, and after deliberating whether theamount of fees for the audit performance is appropriate to maintain the independence of the accounting auditor and tocarry out its accounting audit under appropriate audit system and audit plan for the assessment of risks related to the86audit environment and internal control system of the business group (including the Company and its consolidated
subsidiaries), the Audit & Supervisory Board has deemed the amount of fees for the current fiscal year is appropriate.
Based on the above, the Audit & Supervisory Board has given its consent, pursuant to the provisions of Paragraph 1,
Article 399 of the Companies Act, on the amount of fees payable to the accounting auditor.
(4)【Remunerations Paid to Officers】(ⅰ)Details and Policies of Calculation methods for Amount of Remunerations, etc., Paid to Officers or Method of Calculatingsuch AmountThe Company has established a policy on determining the details of compensation payable to each Director (this “Policy”). The
remunerations paid to Directors under our compensation system for officers consists of “Basic Compensation,” the amount of
which is fixed, and “Bonus,” which is linked to the business results of each fiscal year, as well as “Stock Option,” which is linked
to medium- and long-term business results. In the case of Outside Directors and Audit & Supervisory Board Members who shallbe in the position independent from the management, only “Basic Compensation” is paid because any remuneration linked tobusiness results are not appropriate in such case.
<Basic Compensation>
Basic compensation, the amount of which is fixed, is designed to be determined for each position, but may be increased, within acertain range, based on the contribution made to the management of the Company in the past years. The Company annually
verifies the adequacy of the level of remuneration, which has been set according to the business results and scale of the Company
and is based on comparison with other companies within the same industry or of the same scale through the investigation results
on remuneration prepared by an external agency.
Specific details of basic compensation amount for Directors are determined by the Board of Directors based on the reports
prepared by the Executive Compensation Advisory Committee, which is composed by members, half of which are Independent
Outside Directors. The basic compensation amount for Audit & Supervisory Board Members is determined after discussion
within the Audit & Supervisory Board.
Only basic compensation, the monthly amount of which is fixed, is paid to Outside Directors and Outside Audit & Supervisory
Board Members in light of the nature of their duties.
<Performance-based Bonus (performance-based compensation)>
The total amount of the performance-based bonus is based on achievement as a percentage of the consolidated operating income
recorded for each fiscal year, plus other performance factors (consolidated net sales, consolidated income before income taxes),
to increase the degree of linkage between bonuses and consolidated business performance. Performance-based bonus is paid
once a year after approval at the general meeting of shareholders for the relevant fiscal year.
The amount of performance-based bonus to Directors is resolved at a Board of Directors meeting and the total amount isapproved at the general meeting of shareholders based on reports prepared by the Executive Compensation Advisory Committee,
which is composed of members, half of which are Independent Directors.
<Share-based Stock Options (non-monetary compensation)>
The share-based stock options are determined in consideration of the monthly amount of basic compensation and the fair value ofstock, which in turn are determined pursuant to the recommendations of the Executive Compensation Advisory Committee,
which is composed of members, half of which are Independent Outside Directors and will be allotted in the number determined
and resolved at a Board of Directors meeting once a year. Option holder is eligible to exercise after losing all of their position(s)as Director, Audit & Supervisory Board Member of corporate officer, until the earlier of the twenty-year anniversary of the datesuch stock acquisition rights were granted, and the five-year anniversary of the day following the date on which they can start toexercise. Provided, however, that option holder waives all stock acquisition rights that are unexercised if in violation of the termsof the agreement on allotment of stock acquisition rights or discharged from its position as Director or corporate officer.
At the 73rd Ordinary General Meeting of Shareholders held on June 29, 2021, it was resolved to newly introduce the restricted
stock compensation plan for Directors (excluding Outside Directors) and discontinue the share-based stock options, for further
sharing of price fluctuation risk with our shareholders and increasing incentives to contribute to the improvement of share priceand corporate value.
The Executive Compensation Advisory Committee held discussions and deliberations, including with respect to the consistencyof the draft with this Policy, upon determination of the compensation and other matters with respect to each Director for the87

current fiscal year, and therefore, the Board of Directors respects the Committee’s recommendations and believes that thedetermination is generally consistent with this Policy.
The maximum annual amounts of the basic remuneration paid to Directors and Audit & Supervisory Board Members were
determined to be 350 million yen (excluding the amount paid as salaries for employees to the Directors who concurrently serve as
employees) and 75 million yen, respectively, by the resolution adopted at the 57th Ordinary General Meeting of Shareholders
held on June 29, 2005. The numbers of Directors and Audit & Supervisory Board Members upon the resolution wereseven (7) and five (5), respectively.
The amount of Performance-Linked bonuses was determined to be such amount as is determined according to the business resultsof each fiscal year, which is resolved at each Ordinary General Meeting of Shareholders held for the relevant year. Further, themaximum annual amount of stock options was determined to be 70 million yen by the resolution adopted at the 60th Ordinary
General Meeting of Shareholders held on June 27, 2008. Totaling eight directors jointed to the resolution.
The basic compensation, performance-based bonus and share-based stock options as percentages of total compensation are as
follows, when the performance-based bonus is calculated as the reference value.
basic compensation 71%; performance-based bonuses 18%; and stock options 11%.
(assuming the performance-linked bonuses meet the base amount)
The retirement allowance system for officers was abolished by the resolution adopted at the 57th Ordinary General Meeting of
Shareholders held on June 29, 2005.
<Roles and Activities of Executive Compensation Advisory Committee>
As an advisory body to Board of Directors, the Executive Compensation Advisory Committee discusses and resolves mattersrelated to officers’ compensation and system from an independent and objective perspective. Half of the members of the
Executive Compensation Advisory Committee, chaired by Independent Outside Director Mr. Tsunehiko Iwai, are Independent
Outside Directors. The Executive Compensation Advisory Committee is also attended by the Outside Audit & Supervisory
Board Member(s) as an observer to ensure transparency.
The Executive Compensation Advisory Committee has resolved after discussion on the matters related to the remuneration paid
to officers for the current fiscal year as follows:
We have resolved upon discussion the matters below related to the remuneration of officers for the current fiscal year:
December 25, 2020:

Mid- and long-term incentive (examination of compensation other than stock options)February 5, 2021:

Policy on determining details of compensation to each Director

March 25, 2021:

Verification of the level of remuneration for officers and basic remuneration amount

April 28, 2021:

Performance-linked bonus for officers<Roles and Agenda at the Board of Directors’ Meeting>Board of Directors discusses and resolves matters related to officers’ remuneration based on recommendations received from the
Executive Compensation Advisory Committee.
The Board of Directors has resolved after discussion on the matters related to the remuneration paid to officers for the current
fiscal year as follows:
June 26, 2020:

Basic remuneration amount for the current fiscal year

June 26, 2020:

Issuance of stock options

February 24, 2021:

Policy on determining details of compensation to each Director

May 27, 2021:

Performance-linked bonus for officers

The Executive Compensation Advisory Committee continues to work on restructuring the whole compensation system forexecutives including the following:- Examination and formulation of the basic policy regarding the compensation for executives- Composition of basic compensation, performance-linked bonuses and mid- and long-term incentives (reassessment of theamount and relative proportions)- Calculation method for performance-linked bonuses (to strengthen their link to business targets in accordance with the88medium- and long-term management plan)(ⅱ) Aggregate amount of remunerations, etc., paid to each category of officers, aggregate amount of remunerations, etc., bytype thereof, as well as the number of relevant officers:
Aggregate
Aggregate Amount of Remunerations, etc., by Type Thereof
Amount of(Millions of yen)
Category of Officers
Remunerations,
Basic
PerformanceNon-monetary
etc. (Millions ofStock Option
Remuneration based Bonus
compensationyen)
Directors(Excluding Outside
Directors)
Audit & Supervisory Board
Members(Excluding Outside Audit &Supervisory Board
Members)
Outside Officers(Note)

1.

2.

3.

Number of
Relevant
Officers

263

219

－

43

43

5

32

32

－

－

－

3

50

50

－

－

－

6

The number of Directors, Audit & Supervisory Board Members and Outside Officers was five (5), two (2) andsix (6), respectively. The number of Audit & Supervisory Board Members in the table above includes one (1)Audit & Supervisory Board Member who resigned upon the close of the 72nd Ordinary General Meeting of
Shareholders held on June 26, 2020.
Following the spread of COVID-19, our officers accepted the gravity of the severe financial conditions, and theofficers’ monthly remuneration was reduced by 30% for the Chairman and President and by 20% for other
Directors (excluding Outside Directors) and Audit & Supervisory Board Members (excluding Outside Audit &Supervisory Board Members) for six months from May 2020 to October 2020. The amounts of basic remunerationin the table above reflect such reduction in remuneration.
Non-monetary compensation to Directors (excluding Outside Directors) comprises stock options in the amountof 43 million yen.

(ⅲ) Aggregate amount, etc., of the consolidated remunerations, etc., of the person who receives 100 million yen or more as
remunerations, etc., on a consolidated basis:Amount of Consolidated Remunerations, etc., by Type
Aggregate
Thereof (Millions of yen)Amount ofConsolidated
Category of
Relevant
Name
Remunerations,
Officers
Company
Non-monetary
Basic
etc.
Bonus
Stock Option
Remunerationcompensation(Millions ofyen)

Yoshikata
Tsukamoto(Note)

1.

2.

WacoalHoldings
110
－
19
19
Corp.
Following the spread of COVID-19, our officers accepted the gravity of the severe financial conditions, and themonthly remuneration for Mr. Yoshikata Tsukamoto was reduced by 30% for six months from May 2020 to
October 2020. The amount of basic remuneration in the table above reflects such reduction in remuneration.
Non-monetary compensation comprises stock options in the amount of 19 million yen.
129

Director(5)【Information on Shareholdings】(ⅰ) Standard and Concept for Categories of Investment Stocks
With respect to the category of the investment stocks that are held for the purpose of pure investment and that are held for the
purposes other than pure investment, the Company does not hold any shares for the purpose of pure investment as part of asset
management, but holds shares of other companies for purposes other than pure investment that are strategically important for ourgroup, to maintain and enhance business transactions, to build, maintain and enhance cooperative and transactional relationships
for business expansion, and to maintain steady financial transactions.
(ⅱ)Equity securities held by Wacoal Corp.
Shares held by Wacoal Corp., which is among the Company and our consolidated subsidiaries and holds the largest amount ofequity securities on the balance sheet (i.e., the balance sheet amount of investment stocks) are as follows:89

A．Equity securities held for purposes other than pure investment
a. Policies and method to verify the rationality of shareholding, as well as the verification process at meeting of Board of
Directors regarding appropriateness of holding certain stock of shares
The Company examines whether it is appropriate to hold shares from a medium-to long-term perspective, whether risks
associated with such holding are worth the cost of capital, and profits in connection with the transaction and dividend
income indices are reported to the Board of Directors on a regular basis. The Board of Directors then examines whether
the holding will be enhance corporate value of the Company from a medium-to long-term perspective based on suchverification results, and determines whether to continue to hold or dispose such shares.
b. Number of Stock and Amount Recorded in the Balance Sheet
Number of Total Amount Recorded in the
StocksBalance Sheet (Millions of yen)
Unlisted Stock of Shares

28

1,613

Shares Other than Unlisted
Stock of Shares

45

48,499(Name of stock of shares which increased during the current fiscal year)
Total Acquisition Amount for
Number of
Increased Shares (Millions ofStocksyen)

Reason for Increase in the Number of Shares

Unlisted Stock of Shares

－

－

－

Shares Other than Unlisted
Stock of Shares

1

1

Increased through purchases made by shareownership plan for shares in clients(Name of stock of shares which decreased during the current fiscal year)
Total Disposal Amount for
Number of
Decreased Shares (Millions ofStocksyen)
Unlisted Stock of Shares

10

Shares Other than Unlisted
Stock of Shares

12

2,230

c. Information on specified investment stocks and stocks deemed to be held, including number of shares by stock, and theamount recorded in the balance sheet
Specified investment stocks:
Fiscal Year 2021
Issuer Name

Fiscal Year 2020

Number of Shares
Number of Shares Purpose of Holding, Quantitative Effects of Whether Issuer
Shareholding (Note 2) and Reason for
Holds Company(Shares)(Shares)
Increase in Number of Shares
SharesAmount Recorded in Amount Recorded in
the Balance Sheet
the Balance Sheet(Millions of yen)
(Millions of yen)
1,520,500

1,520,500

We engage in a transaction involving
communications equipment andinfrastructure with the issuer and continue

4,850

to hold the issuer’s shares to maintain andstrengthen our good relationship from theperspective of enhancing corporate value.

KDDI
Corporation
5,162

No

We engage in a transaction involving
1,544,932

1,544,410

Aeon Co., Ltd.
5,096

3,705

90

women’s garments and continue to holdthe issuer’s shares to maintain andstrengthen our good relationship from theperspective of enhancing corporate value.
The number of shares has increased due toparticipation in the stock ownershipassociation.

Yes569,997

569,997

Bank of Kyoto,
Ltd.
3,881

1,960

445,900

445,900

KyoceraCorporation
3,132

743,000

2,857

825,000

Shimadzu
Corporation

We engage in a financial transaction with
the issuer, as a major local financial firm,and continue to hold the issuer’s shares tomaintain and strengthen our good
relationship from the perspective ofenhancing corporate value.
We have close connections with the issuer,
as a local firm, through information
sharing, and continue to hold the issuer’s
shares to maintain and strengthen our

We have close connection with the issuer,
as a local firm, through information
sharing and continue to hold the issuer’s
shares to maintain and strengthen our
good relationship from the perspective of
business strategy.

2,347

1,509,400

1,509,400

We have close connection with the issuer
as a major supplier of office furniture andstationery and continue to hold the issuer’s

2,282

shares to maintain and strengthen our
good relationship from the perspective ofenhancing corporate value.

Ltd.
2,587

Yes

good relationship from the perspective of
business strategy.

2,975

Kokuyo Co.,

Yes

Yes

Yes

We have close connection with the issuer,
SCREEN
Holdings Co.,Ltd.

217,179

2,115

217,179868

as a local firm, through information
sharing and continue to hold the issuer’s
shares to maintain and strengthen our
good relationship from the perspective ofYesbusiness strategy.

Mitsubishi UFJ
Financial Group,
Inc.

Saha PathanaInter-Holding

2,885,850

We engage in overall financial
2,885,850 transactions with the issuer as a major
financial institution and continue to holdthe issuer’s shares to maintain and

1,707

7,606,666

1,162 strengthen our good relationship from theperspective of enhancing corporate value.

7,606,666

PCL
1,615

230,000
Horiba, Ltd.
1,605

Yes
(Note 3)

1,664

We have close cooperative relationship inbusiness deployment in the Kingdom ofThailand and continue to hold the issuer’s
shares to maintain and strengthen ourNogood relationship from the perspective ofenhancing corporate value in the Kingdomof Thailand.

We have close connection with the issuer,
230,000 as a local firm, through information
sharing and continue to hold the issuer’s
shares to maintain and strengthen our
1,237 good relationship from the perspective ofYesbusiness strategy.
Takara Holdings
Inc.

1,000,000

We have close connection with the issuer,
1,000,000 as a local firm, through information
sharing and continue to hold the issuer’s

91

Yes

1,507

shares to maintain and strengthen our
810 good relationship from the perspective of
business strategy.

274,000
Tokio Marine
Holdings, Inc.
1,442

NipponShinyaku Co.,Ltd.

Heiwado Co.,
Ltd.

IsetanMitsukoshi
Holdings Ltd.

175,000

We have various general insurances to274,000 minimize business risks and continue tohold the issuer’s shares to maintain andstrengthen our good relationship from the
1,356
perspective of enhancing corporate value.
175,000

1,440

1,484

517,531517,531

1,161

985

1,315,769

1,315,769

1,023

828

We have close connection with the issuer,
as a local firm, through information
sharing and continue to hold the issuer’s
shares to maintain and strengthen our

Yes(Note 3)Yes

good relationship from the perspective of
business strategy.
We engage in a transaction of women’s
garments and continue to hold the issuer’s
shares to maintain and strengthen our
good relationship from the perspective ofenhancing corporate value.
We engage in a transaction of various
products, mainly the women’s garments
and continue to hold the issuer’s shares tomaintain and strengthen our good

Yes

Yes
(Note 3)

relationship from the perspective ofenhancing corporate value.
Issuer is a group company of Aeon Co.,

687,300

687,300

Aeon Financial
Service Co., Ltd.
1,020

795

398,000

462,408

Shiga Bank, Ltd.

Ltd. with whom we engage in atransaction of women’s garments andcontinue to hold the issuer’s shares tomaintain and strengthen our good
relationship with Aeon group from theperspective of business strategy.
We engage in a financial transaction with
the issuer, as a major local financial firm,and continue to hold the issuer’s shares tomaintain and strengthen our good
relationship from the perspective ofenhancing corporate value.

953

1,187

132,000

132,000

We continue to hold the issuer’s shares tomaintain and strengthen our good
relationship from the perspective of

942

876

enhancing corporate value in a close andcooperative connection in businessdeployment.

Fukuyama
Transporting
Co., Ltd.

204,400

204,400

932

790

Chori Co., Ltd.

548,890548,890

TaishoPharmaceutical
Holdings Co.,
Ltd.

No

Yes

Yes

We have close connection in logistics
transaction and continue to hold theissuer’s shares to maintain and strengthen
our good relationship from the perspectiveof enhancing corporate value.
As the issuer is one of major suppliers of
textile-related products, we continue tohold the issuer’s shares to enhance

92

Yes

Yes

924

843

corporate value and to maintain andstrengthen our good relationship through astable supply.

426,000

We have close connection with the issuer
in printing advertisements, mainly
catalogues, and continue to hold the

796

705

issuer’s shares to maintain and strengthen
our good relationship from the perspectiveof enhancing corporate value.

598,195

598,195

426,000
Toppan Printing
Co., Ltd.

Asahi Kasei
Corporation

Seven & i
Holdings Co.,Ltd.

Hisamitsu

762

457

154,969

154,969691

554

90,00090,000648

453

197,500

197,500

Odakyu Electric
597

468

Yes

strengthen our good relationship through astable supply.
We engage in a transaction of women’s
garments and continue to hold the issuer’s
shares to maintain and strengthen our
good relationship from the perspective of

PharmaceuticalCo., Inc.

Railway Co.,Ltd.

As the issuer is one of major suppliers of
textile-related products, we continue tohold the issuer’s shares to enhance
corporate value and to maintain and

Yes

No

enhancing corporate value.

We continue to hold the issuer’s shares tomaintain and strengthen our good
relationship as we have close connection
in building cooperative and transactional
relationship in business deployment.

Yes

We engage in a transaction of various
products, mainly the women’s garmentswith Odakyu Department Store Co., Ltd,
which is the issuer’s subsidiary, andcontinue to hold the issuer’s shares tomaintain and strengthen our good
relationship from the perspective ofYesenhancing corporate value.
283,000

283,000

Seino Holdings
Co., Ltd.

436

331

381,300

381,300

Chuo Warehouse
Co., Ltd.
431

459

296,500

296,500

Nichicon
Corporation
332

200

93

We have close connection in logistics
transaction and continue to hold theissuer’s shares to maintain and strengthenYes

our good relationship from the perspectiveof enhancing corporate value.
We have close connection in logistics
transaction and continue to hold theissuer’s shares to maintain and strengthen
our good relationship from the perspectiveYesof enhancing corporate value.
We have close connection with the issuer,
as a local firm, through information
sharing and continue to hold the issuer’s
shares to maintain and strengthen our
good relationship from the perspective of
business strategy.

YesWe engage in a transaction of various
Kintetsu
Department
Store Co., Ltd.

100,000

325

170,500

100,000

251

170,500

Yomeishu Seizo
Co., Ltd.
324

334

products, mainly the women’s garments
and continue to hold the issuer’s shares tomaintain and strengthen our good
relationship from the perspective ofYesenhancing corporate value.
We continue to hold the issuer’s shares tomaintain and strengthen our good
relationship from the perspective of
business strategy, as we have close
connection in building cooperative andtransactional relationship in businessYes

deployment.
151,487

151,487

Marui Group
Co., Ltd.
314

2,677,300

274

2,677,300

I.C.C
INTERNATIONAL PLC

310

299

45,64845,648IZUMI Co., Ltd.
197

205,000

136

205,000

Matsuya Co.,Ltd.

Fuji Company,
LimitedDai Nippon
Printing Co.,Ltd.

Aoyama Trading
Co., Ltd.

188

125

62,60062,600We engage in a transaction of various
products, mainly the women’s garments
and continue to hold issuer’s shares tomaintain and strengthen good relationshipfrom the perspective of enhancing
corporate value.
We have close cooperative relationship inbusiness deployment in the Kingdom ofThailand, and continue to hold the issuer’s
shares to maintain and strengthen our

We engage in a transaction of women’s
garments and continue to hold the issuer’s
shares to maintain and strengthen our
good relationship from the perspective of
We engage in a transaction of various
products, mainly the women’s garments
and continue to hold the issuer’s shares tomaintain and strengthen our good
relationship from the perspective ofenhancing corporate value.
We engage in a transaction of women’s
garments and continue to hold the issuer’s
shares to maintain and strengthen our
good relationship from the perspective of

58,00058,000We have close connection with the issuer
in printing advertisements, mainly
catalogues, and continue to hold the133

issuer’s shares to maintain and strengthen
our good relationship from the perspectiveof enhancing corporate value.

117

141,500

131
94

No

enhancing corporate value.

112

141,500

Yes

good relationship from the perspective ofenhancing corporate value in the Kingdomof Thailand.

134

134

Yes

Yes

Yes

enhancing corporate value.

Yes

We have close connection with the issuer
through information sharing as apparel
manufacturers and exploring potential
cooperation in business strategy andcontinue to hold the issuer’s shares toYesmaintain and strengthen our good
relationship from the perspective of
business strategy.
71,10071,100As the issuer is one of major suppliers of
textile-related products, we continue tohold the issuer’s shares to enhance97

corporate value and to maintain andstrengthen our good relationship through astable supply.

YAGI & CO.,
LTD.
102

168,000

168,000

King Co., Ltd.
98

90

20,00020,000Fujibo Holdings,
Inc.
57

As the issuer is one of major suppliers of
textile-related products, we continue to100,000

71

46

corporate value and to maintain andstrengthen our good relationship through astable supply.

60,00060,000100,000
Inc.

70

58

Yes

strengthen our good relationship through astable supply.
As the issuer is one of major suppliers of
textile-related products, we continue tohold the issuer’s shares to enhance

Toray Industries,

Yes

our good relationship from the perspectiveof business strategy.

hold the issuer’s shares to enhance
corporate value and to maintain and80

Takashimaya
Co., Ltd.

We have close connection with the issuer
through information sharing as apparel
manufacturers and continue to hold theissuer’s shares to maintain and strengthen

Yes

Yes

We engage in a transaction of various
products, mainly the women’s garments
and continue to hold the issuer’s shares tomaintain and strengthen our good
relationship from the perspective ofYesenhancing corporate value.
94,38094,380Sankyo Seiko
Co., Ltd.
51

20,04346

20,043

KuraboIndustries Ltd.
38

51

11,00011,000We have close connection with the issuer
through information sharing as apparel
manufacturers and continue to hold theissuer’s shares to maintain and strengthen
our good relationship from the perspectiveof business strategy.
As the issuer is one of major suppliers of
textile-related products, we continue tohold the issuer’s shares to enhance
corporate value and to maintain and

Yes

Yes

strengthen our good relationship through astable supply.
We engage in a transaction of women’s

Tenmaya Store
Co., Ltd.

Mitsubishi UFJ
Lease & Finance

13

10

－

1,320,000

95

garments and continue to hold the issuer’s
shares to maintain and strengthen our
good relationship from the perspective ofenhancing corporate value.
We engage in a transaction of leases,
mainly auto leases, and continue to hold

Yes

No

Company
Limited－702

the issuer’s shares to maintain andstrengthen our good relationship from theperspective of enhancing corporate value.

－

120,200

Hankyu Hanshin
Holdings, Inc.
－

436

Issuer is a group company of H2O
Retailing Corporation with whom weengage in a transaction of various
products, mainly the women’s garments
and continue to hold the issuer’s shares tomaintain and strengthen our good
relationship from the perspective ofYesenhancing corporate value.

－

310,759

H2O Retailing
Corporation
－

－

245

100,000

Sanyo Shokai
Ltd.
－

134

We engage in a transaction of various
products, mainly the women’s garments at
the issuer’s subsidiaries such as
department store and general merchandise
stores and continue to hold the issuer’s
shares to maintain and strengthen ourNogood relationship from the perspective ofenhancing corporate value.
We have close connection with the issuer
through information sharing as apparel
manufacturers and exploring potential
cooperation in business strategy andcontinue to hold the issuer’s shares tomaintain and strengthen our goodYes

relationship from the perspective of
business strategy.
We have close connection with the issuer,－

147,000

Nissha Co., Ltd.
－105

as a local firm, through information
sharing and continue to hold the issuer’s
shares to maintain and strengthen our
good relationship from the perspective ofNobusiness strategy.
－

46,800We have close connection with the issuer
through information sharing as apparel
manufacturers and continue to hold the72

issuer’s shares to maintain and strengthen
our good relationship from the perspectiveof business strategy.

Takihyo Co.,
Ltd.
－

－

75,891

Toda
Corporation
－

47

－

2,000

Toyobo Co., Ltd.
－

2

96

We have close connection with the issuer
through proposals and information sharing
related to facilities and continue to holdthe issuer’s shares to maintain and

Yes

Yes

strengthen our good relationship from theperspective of business strategy.
As the issuer is one of major suppliers of
textile-related products, we continue tohold the issuer’s shares to enhance
corporate value and to maintain andstrengthen our good relationship through astable supply.

No13,564
Izutsuya Co.,
Ltd.
－

2

－

7,400

Daiwa Co., Ltd.
－
(Note)

1

We engage in a transaction of various
products, mainly the women’s garments
and continue to hold the issuer’s shares tomaintain and strengthen our good
relationship from the perspective ofenhancing corporate value.
We engage in a transaction of women’svarious products, mainly of women’s
garments and continue to hold the issuer’s
shares to maintain and strengthen ourNoNogood relationship from the perspective ofenhancing corporate value.

1“－” indicates that we do not hold any shares of such stock.

2
3

The quantitative effects of shareholding are difficult to describe as it relates to an individual transaction.
The company in which we hold the stocks does not hold any shares of the Company, while its subsidiary holds sharesof the Company.
Stocks deemed to be held:
Fiscal Year 2021
Issuer Name

Fiscal Year 2020

Number of Shares
Number of Shares Purpose of Holding, Quantitative Effects of Whether Issuer
Shareholding (Note2) and Reason for
Holds Company(Shares)(Shares)
Increase in Number of Shares
SharesAmount Recorded in Amount Recorded in
the Balance Sheet
the Balance Sheet(Millions of yen)
(Millions of yen)

2,544,000

2,544,000

KDDI
Corporation
8,636

3,365,000

8,115

3,365,000

Mitsubishi UFJ
Financial Group,
Inc.
1,991

1,356

We engage in a transaction ofcommunications equipment andinfrastructure with the issuer and continue
to hold issuer’s shares to maintain andstrengthen good relationship with theissuer from the perspective of enhancing
corporate value. We currently haveNo

retirement benefit trust agreement underwhich we withhold our right to give
directions on the exercise of voting rights.
We engage in overall financialtransactions with the issuer as a major
financial institution and continue to holdissuer’s shares to maintain and strengthen
good relationship with the issuer from theperspective of enhancing corporate value.
We currently have retirement benefit trust
agreement under which we withhold ourYes(Note 3)right to give directions on the exercise of
voting rights.
(Note) 1
2
3

The specified investment stock and stocks deemed to be held are not combined when selecting the top stocks based on
the amount recorded in the balance sheet.
The quantitative effects of shareholding are difficult to describe as it relates to an individual transaction.
The company in which the Company holds the stocks does not hold any shares of the Company, while its subsidiaryholds shares of the Company.

d.

Equity securities held for pure investment
Not Applicable.

e.

Equity securities reclassified from held for pure investment to held for purposes other than pure investment during thecurrent fiscal year:
97

Not Applicable.
Equity securities reclassified from held for purposes other than pure investment to held for pure investment during thecurrent fiscal year:f.

Not Applicable.

(ⅲ)

Equity securities held by Wacoal holdings Corp.

A．Equity securities held for purposes other than pure investmenta.

Policies and method to verify the rationality of shareholding, as well as the verification process at meeting of Board of
Directors regarding appropriateness of holding certain stock of shares
The Company examines whether it is appropriate to hold shares from a medium-to long-term perspective, whether risks
associated with such holding are worth the cost of capital, and profits in connection with the transaction and dividend
income indices are reported to the Board of Directors on a regular basis. The Board of Directors then examines whether
the holding will be enhance corporate value of the Company from a medium-to long-term perspective based on suchverification results, and determines whether to continue to hold or dispose such shares.
The information on quantitative effects of shareholding is omitted since it relates to an individual transaction.

b.

Number of Stock and Amount Recorded in the Balance Sheet
Total Amount Recorded in the
Number of
Balance Sheet
Stock(shares)(Millions of yen)

Unlisted Stock of Shares

22

Shares Other than Unlisted
Stock of Shares－－(Name of stock of shares which increased during the current fiscal year)

98

Number ofStock(shares)

Total Acquisition Amount for
Increased Shares (Millions of Reason for Increase in the Number of Sharesyen)

Unlisted Stock of Shares

－

－

－

Shares Other than Unlisted
Stock of Shares

－

－

－

(Name of stock of shares which decreased during the current fiscal year)
Total Disposal Amount for
Number of
Decreased Shares (Millions of
Stock
yen)
(shares)
Unlisted Stock of Shares－－

Shares Other than Unlisted
Stock of Shares

－

－

c.

Information on specified investment stocks and stocks deemed to be held, including number of shares by stock, and theamount recorded in the balance sheet
Not Applicable.

d.

Equity securities held for pure investment:
Not Applicable.
Equity securities reclassified from held for pure investment to held for purposes other than pure investment during thecurrent fiscal year:e.

f.

Not Applicable.
Equity securities reclassified from held for purposes other than pure investment to held for pure investment during thecurrent fiscal year:
Not Applicable.

99

Wacoal Holdings Corp. and Subsidiaries
Consolidated Balance Sheets
March 31, 2021 and 2020

Millions of Yen
2021
2020

ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Time deposits
Marketable securities (Notes 3, 20 and 21)
Notes and accounts receivable (Note 6)
Allowance for doubtful receivables (Note 4)Inventories (Note 5)
Return assets
Other current assets (Notes 6, 21 and 22)
Total current assets¥

63,557
1,443
253
17,571(346)
43,250
600
7,794

¥

27,905797
656
20,062(489)
43,427868
4,964

Thousands of
U.S. Dollars(Note 2)2021$

98,1901,212,567

PROPERTY, PLANT AND EQUIPMENT:Land (Notes 9, 10, and 21)
Buildings and structures (Notes 9, 10, 11 and 21)
Machinery and equipment (Note 21)
Construction in progress
Total
Accumulated depreciation (Note 10)

20,56972,97819,356
1,264
114,167(64,409)21,46074,03918,782
1,090
115,371(63,288)

185,960
659,778
174,993
11,427
1,032,158(582,307)

Net property, plant and equipment

49,75852,083449,851

12,72921,20751,603
21,16915,220
9,533
1,649
5,771

13,54021,59543,904
22,371
14,547
4,974
1,118
5,366

115,080
191,728
466,531
191,384
137,600
86,186
14,90852,174

138,881

127,415

1,255,591

Total other assets

TOTAL

CURRENT LIABILITIES:
Short-term bank loans (Note 9)
Notes and accounts payable:
Trade notes payable
Trade accounts payable (Note 6)
Other payables (Notes 7 and 21)
Accrued payroll and bonuses
Income taxes payable (Note 17)
Refund liabilities
Short-term operating lease liabilities (Note 10)
Other current liabilities (Notes 9, 12, 18, 20, 21 and 22)
Total current liabilities

574,604
13,046
2,287
158,856(3,128)391,014
5,424
70,464

134,122OTHER ASSETS:
Operating leases right-of-use assets (Note 10)
Investments in affiliated companies (Note 6)
Investments (Notes 3, 20 and 21)
Goodwill (Notes 7, 8 and 21)
Other intangible assets (Notes 7, 8 and 21)
Prepaid pension expense (Note 12)
Deferred income taxes (Note 17)
Other (Note 6)

LIABILITIES AND EQUITYLONG-TERM LIABILITIES:Long-term debt (Notes 9 and 20)
Liability for termination and retirement benefits (Note 12)
Deferred income taxes (Note 17)
Long-term operating lease liabilities (Notes 1 and 10)
Contingent consideration (Notes 7 and 21)
Other long-term liabilities (Notes 11, 12 and 17)
Total long-term liabilities¥

Millions of Yen
2021
2020

Thousands of
U.S. Dollars(Note 2)2021

40,672

$

¥

3,364

367,706

712
8,734
6,610
6,822
1,025
2,266
4,411
4,819
76,071

1,112
9,588
7,107
6,734
4,878
2,645
4,600
4,079
44,107

6,437
78,962
59,76061,676
9,267
20,48639,87943,568687,741

1,498
1,942
12,292
8,520
1,639
2,183
28,074

35
2,069
7,911
9,101
2,786
2,231
24,133

13,543
17,557111,129
77,02814,81819,735
253,810

13,26029,120181,346

13,26029,836
185,233

119,881263,267
1,639,508

1,770(1,008)762(1,033)(4,594)(5,627)

16,002(9,113)6,889(8,876)(17,331)(80,246)

215,612
3,004
218,616

205,371
4,077
209,448

1,949,299
27,1591,976,458¥ 322,761¥ 277,688$ 2,918,009

COMMITMENTS AND CONTINGENCIES (Notes 9, 10 and 13)¥ 322,761¥ 277,688

EQUITY:WACOAL HOLDINGS CORP. SHAREHOLDERS' EQUITY:
Common stock, no par value –authorized, 250,000,000 shares in 2021 and 2020;
issued 65,589,042 shares and 68,589,042 shares in 2021 and2020, respectively
Additional paid-in capital (Note 14)
Retained earnings
Accumulated other comprehensive (loss) income(Notes 12 and 16):
Foreign currency translation adjustments
Pension liability adjustments
Total accumulated other comprehensive loss
Treasury stock, at cost – 3,168,353 shares and
6,186,410 shares in 2021 and 2020, respectively
Total Wacoal Holdings Corp. shareholders' equity(Note 15)
Noncontrolling interests
Total equity$ 2,918,009

TOTAL

See notes to consolidated financial statements.

100Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Income
Years Ended March 31, 2021, 2020 and 2019

2021

Millions of Yen
2020

2019

Thousands of
U.S. Dollars(Note 2)2021

¥ 152,204¥ 186,760¥ 194,201$ 1,376,042

67,79884,95989,804

612,946

81,70093,92793,517

738,632

1,136
2,673

769
217

167
4,325

10,27024,166

12

256

1,509

108

153,319

180,128

189,322

1,386,122(1,115)

6,632

4,879

(10,080)

61
(78 )
1,126

177
(19 )
1,506

289
(11 )
1,429

551
(705)
10,180

10,390408(3,760)(177)(5,430)1,047

93,933
3,689

Total other income (expenses) – net

11,907(2,273)(2,676)

107,648

INCOME BEFORE INCOME TAXES AND EQUITYIN NET INCOME OF AFFILIATED COMPANIES

10,792

4,359

2,203

97,568

INCOME TAXES (Note 17):
Current
Deferred

1,803
2,278

7,126
(5,673)5,350(2,817)

16,30020,595

4,081

1,453

2,533

36,895

INCOME (LOSS) BEFORE EQUITY IN NET
INCOME OF AFFILIATED COMPANIES

6,711

2,906

(330)

60,673

EQUITY IN NET INCOME OF AFFILIATEDCOMPANIES (Note 6)

93

62

725

840

6,804

2,968

395

61,513

221

504

(54 )

1,998

NET SALES (Notes 6, 10 and 18)
OPERATING COSTS AND EXPENSES:
Cost of sales (Notes 6 and 12)
Selling, general and administrative expenses (Notes
7,10, 11, 12 and 14)
Impairment charges on property, plant and equipment(Note 21)
Impairment charges on goodwill (Notes 8 and 21)
Impairment charges on other intangible assets (Notes 8
and 21)
Total operating costs and expenses
OPERATING (LOSS) INCOME
OTHER INCOME (EXPENSES):Interest income (Note 6)
Interest expense
Dividend income (Note 6)
Gain (loss) on sale, exchange and valuation ofmarketable securities and investments – net (Notes
3 and 21)
Other – net (Notes 10, 12, 16 and 22)

Total income taxes

NET INCOME
NET LOSS (INCOME) ATTRIBUTABLE TONONCONTROLLING INTERESTSNET INCOME ATTRIBUTABLE TO WACOALHOLDINGS CORP.

¥

7,025

¥

3,472

¥

341

$

63,511(Continued)
101

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Income
Years Ended March 31, 2021, 2020 and 2019

2021

Yen
2020

2019

U.S. Dollars(Note 2)2021

NET INCOME ATTRIBUTABLE TO WACOALHOLDINGS CORP. PER SHARE (Note 19):
Basic
Diluted¥ 112.57¥ 112.09¥ 54.26¥ 54.05¥ 5.16¥ 5.14$ 1.02$ 1.01NET INCOME ATTRIBUTABLE TO WACOALHOLDINGS CORP. PER AMERICAN DEPOSITARYRECEIPT (5 shares of common stock) (Note 19):
Basic
Diluted¥ 562.84¥ 560.47¥ 271.29¥ 270.25¥ 25.78¥ 25.68$ 5.09$ 5.07

See notes to consolidated financial statements.

(Concluded)102

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Comprehensive Income
Years Ended March 31, 2021, 2020 and 2019

2021
NET INCOME¥

OTHER COMPREHENSIVE INCOME (LOSS), NET
OF TAX (Note 16):
Foreign currency translation adjustments:
Amounts arising during the year
Total foreign currency translation
adjustments

Millions of Yen
2020

6,804

¥ 2,968

2,648(2,532)(750)

23,9402,648(2,532)(750)

23,940

Unrealized gain (loss) on securities:
Amounts arising during the year
Reclassification adjustments
Total unrealized gain (loss) on securities
Pension liability adjustments:
Amounts arising during the year
Reclassification adjustments
Total pension liability adjustments

2019
¥

395

Thousands of
U.S. Dollars(Note 2)2021$

61,513

(7 )
(97 )
(104)
2,838
753
3,591

125
960
1,085

(4,787)200(4,587)25,6586,808
32,466OTHER COMPREHENSIVE INCOME (LOSS)

6,239(1,447)(5,441)

56,406COMPREHENSIVE INCOME (LOSS)

13,043

1,521(5,046)

117,919COMPREHENSIVE LOSS (INCOME) ATTRIBUTABLETO NONCONTROLLING INTERESTS

371

452

(18 )

3,354

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE
TO WACOAL HOLDINGS CORP.

¥ 13,414¥ 1,973¥ (5,064)$ 121,273

See notes to consolidated financial statements.

103

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Equity
Years Ended March 31, 2021, 2020 and 2019

BALANCE, APRIL 1, 2018
Cumulative effects (net of tax) of adoption of new accounting standards
Net income
Foreign currency translation adjustments
Unrealized loss on securities
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, ¥360 per 5 shares ofcommon stock
Cash dividends paid to noncontrolling interests
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stock
Share-based compensation granted (exercised) (Note 14)
Equity transactions with noncontrolling interests
BALANCE, MARCH 31, 2019
Cumulative effects (net of tax) of adoption of new accounting standards(Note 1)
Net income
Foreign currency translation adjustments
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, ¥300 per 5 shares ofcommon stock
Cash dividends paid to noncontrolling interests
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stock
Share-based compensation granted (exercised) (Note 14)
Equity transactions with noncontrolling interests
BALANCE, MARCH 31, 2020
Net income
Foreign currency translation adjustments
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, ¥200 per 5 shares ofcommon stock
Cash dividends paid to noncontrolling interests
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stock
Share-based compensation granted (exercised) (Note 14)
Equity transactions with noncontrolling interests
BALANCE, MARCH 31, 2021

Shares of
Outstanding
Common Stock(Thousands)
67,367

Millions of Yen
Accumulated
Other
TreasuryComprehensive
Stock,
Income (Loss)at CostCommonStock

Additional
Paid-in
CapitalRetained
Earnings¥ 13,260¥ 29,765¥ 172,418¥ 28,597

27,834341(27,320)¥ (11,328)

Total Wacoal
Holdings Corp.
Shareholders'EquityNoncontrolling
Interests

Total Equity¥ 232,712¥ 4,785¥ 237,497

514
341
(723)
(104)
(4,578)

(723)
(104)
(4,578)(4,811)

54
(27 )
(9 )

(4,811)(191 )(2,200)011
65,17842
13,26029,807(6,919)02,631
32(2,631)(12 )
193,139(4,128)(15,584)(515 )
3,472(2,584)
1,085(4,907)(6,919)
0
62

62
38

216,494

4,650

221,144

(515)
3,472
(2,584)1,085(504 )
52

(515)
2,968
(2,532)
1,085(4,907)23
62,40329
13,26029,836(7,745)
0
5,935
63

(0 )
(5,935)(21 )
185,233(5,627)(17,331)

7,025
2,803
3,586
(2,496)(1)

1862,42124(740 )¥ 13,260¥ 29,120(8,404)(12 )¥ 181,346(7,745)
0
71

8,404
52
¥

762

¥

(8,876)(4,907)(237)(7,745)
0

116

71
116

205,371

4,077

209,448

7,025
2,803
3,586

(221 )(155 )
5

6,804
2,648
3,591

(81 )

(2,496)(81 )(1 )(2,496)(0 )(4,811)(191)(6,919)038(237 )(2,798)
0

514
395
(750)
(104)
(4,587)

(1 )
64
(740)

(621 )

64(1,361)¥ 215,612¥ 3,004¥ 218,616(Continued)
104

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Equity
Years Ended March 31, 2021, 2020 and 2019

BALANCE, MARCH 31, 2020

CommonStock

Additional
Paid-in
CapitalRetained
Earnings$ 119,881$ 269,740$ 1,674,650

Net income
Foreign currency translation adjustments
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, $1.8 per 5 shares ofcommon stock
Cash dividends paid to noncontrolling interests
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stock
Share-based compensation granted (exercised) (Note 14)
Equity transactions with noncontrolling interests
BALANCE, MARCH 31, 2021

Thousands of U.S. Dollars (Note 2)
Accumulated
Total Wacoal
Other
Treasury
Holdings Corp.
Comprehensive
Stock,
Shareholders'
Income (Loss)at CostEquity$ (50,872)$ (156,686)

63,511
25,341
32,420(22,566)$ 119,881$ 263,267(75,979)(108)$ 1,639,508

Total Equity$ 1,856,713$ 36,859$ 1,893,572

63,511
25,341
32,420(1,998)(1,401)
45

61,51323,94032,465(732)(22,566)
(732)
(9 )

(22,566)(9)217(6,690)Noncontrolling
Interests

75,979
470
$

6,889

$

(80,246)(9 )579(6,690)(5,614)579(12,304)$ 1,949,299$ 27,159$ 1,976,458

See notes to consolidated financial statements.

(Concluded)105

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2021, 2020 and 2019

Millions of Yen
2020

2021
OPERATING ACTIVITIES:Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Share-based compensation (Note 14)
Allowance for returns and doubtful receivables – net
Deferred income taxes(Gain) loss on sales or disposal of property, plant and equipment – net
Impairment charges on property, plant and equipment (Note 21)
Impairment charges on goodwill (Notes 8 and 21)
Impairment charges on other intangible assets (Notes 8 and 21)(Gain) loss on sale, exchange and valuation of marketable securities and investments – net (Note 3)
Equity in net loss (income) of affiliated companies, less dividends received
Changes in assets and liabilities:
Decrease in notes and accounts receivable
Decrease (increase) in inventories
Decrease (increase) in return assets
Increase in other current assets(Decrease) increase in notes and accounts payable(Decrease) increase in refund liabilities
Increase (decrease) in liability for termination and retirement benefits(Decrease) increase in accrued expenses, income taxes payable and other current liabilities
Other
Net cash provided by operating activities¥

INVESTING ACTIVITIES:
Increase in time deposits
Decrease in time deposits
Proceeds from sales and redemption of equity securities
Payments to acquire equity securities
Proceeds from redemption of debt securities
Payments to acquire debt securities
Proceeds from sales of property, plant and equipment
Payments to acquire property, plant and equipment
Payments to acquire intangible assets (Note 8)
Acquisition of a subsidiary (net of cash acquired) (Note 7)
Proceeds from sales of shares of affiliated companies
Payments for loans (Note 6)
Other
Net cash (used in) provided by investing activities
FORWARD

6,804

¥

2,968

2019
¥

395

Thousands of
U.S. Dollars(Note 2)2021$

61,513

6,128
63
(199)
2,278
(365)
1,136
2,673
12
(10,390)
469

6,029
71
299
(5,673)
103
769
217
256
3,760
480

5,647
62
(2,263)(2,817)
48
167
4,325
1,509
5,430
(211)

55,402570(1,799)20,595(3,300)10,27024,166
108(93,934)
4,240

2,767
972
268
(2,632)
(859)
(379)
226
(4,485)
(227)
4,260

4,685
(1,350)
312
(29)
(373)
(837)
776
665
197
13,325822(76 )(1,180)(653)(1,640)
3,482
(620)
1,075
118
13,62025,016
8,788
2,423(23,795)(7,766)(3,426)
2,043(40,548)(2,052)38,514

(941)
291
2,340
(7)
742

(438)
3,576
15,252
(339)
544

889
(2,764)(2,840)104(3,442)(3,539)(9,181)(4,783)
5,226
2,497
(323)
1,008
(900)
276
(2,603)(3,180)(8,507)
2,631
21,156
(63 )
6,708
0
8,037
(24,989)(25,676)

270

¥

(315)
43
(2,562)

32
2,569

38
(2,474)

1,698¥ 15,894¥ 11,146(2,848)389(23,162)$

15,352(Continued)
106

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2021, 2020 and 2019

2021
FORWARD¥

FINANCING ACTIVITIES:
Increase (decrease) in short-term bank loans withoriginal maturities of three months or less – net
Procurement of short-term loan (over 3 months)
Repayment of short-term loan (over 3 months)
Procurement of long-term debt
Repayments of long-term debt
Purchase of treasury stock
Disposal of treasury stock
Dividends paid on common stock
Dividends paid to noncontrolling interests
Proceeds from share issuance of noncontrollinginterests
Payments to acquire interests in subsidiaries fromnoncontrolling interests
Payments of contingent consideration (Note 7)
Net cash provided by (used in)financing activities

1,698¥ 17,208
20,424
(424)
1,447
(50 )
(1)
(2,496)(81 )Thousands of
U.S. Dollars(Note 2)
2021

Millions of Yen
2020

2019

¥ 15,894¥ 11,146$¥¥$ 155,573
184,649(3,833)13,082(452)(9 )(4,645)

1,061

(53 )
(7,745)0(4,907)
(237)

(50 )
(6,919)0(4,811)
(191)

116

38

(1,361)(1,061)

15,352(22,567)(732)(12,304)(9,592)33,605(17,471)(10,872)

303,815

EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS

349

(651)

372

3,155

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS

35,652(2,228)646

322,322

CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR27,90530,13329,487

252,283¥ 63,557¥ 27,905¥ 30,133$ 574,605¥¥¥

CASH AND CASH EQUIVALENTS, END OFYEARADDITIONAL CASH FLOW INFORMATION:
Cash paid for:
Interest
Income taxes

72
8,643

NONCASH INVESTING ACTIVITIES:Acquisition of a subsidiary (contingent
consideration) (Note 7)
Acquisition of property, plant and equipment byassuming payment obligation

20
4,758

1
5,068

$ 651
78,139¥954$6,365¥4,172¥704

751

See notes to consolidated financial statements.

(Concluded)107

Wacoal Holdings Corp. and Subsidiaries
Notes to Consolidated Financial Statements
1.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of Financial Statements – Wacoal Holdings Corp. (the "Company") and subsidiaries are predominantly
engaged in one industry, the manufacturing and sale of apparel, including foundation garments, lingerie,nightwear, and outerwear in Japan, the United States of America, Europe and certain other countries in Asia.
The accompanying consolidated financial statements, stated in Japanese yen, have been prepared on the basisof accounting principles generally accepted in the United States of America ("U.S. GAAP").
Consolidation – The consolidated financial statements include the accounts of the Company and its majorityowned subsidiaries (collectively, the "Companies"). All intercompany transactions and balances have been
eliminated.
Some foreign subsidiaries of the Company have a fiscal year ending December 31. The accounts of thosesubsidiaries are included in the Company's consolidated financial statements based on the subsidiaries' fiscal
year end. Necessary adjustments have been made for significant events related to subsidiaries that occurred
during the period between their fiscal year ends and March 31.
Investments in affiliated companies where the Companies' ownership is 20% to 50% are accounted for using
the equity method.
Significant influence is generally deemed to exist if the Companies have an ownership interest in the voting
stock of the investee from 20% to 50%, although other factors are considered in determining whether theequity method of accounting is appropriate.
Use of Estimates – The preparation of consolidated financial statements in conformity with U.S. GAAP
requires management to make estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates.
The Companies reflected the impact of the COVID-19 outbreak in such estimates. The official views of when
the outbreak will be contained have not been announced by public institutions. The Companies are anticipatingthat COVID-19 will continue to have an impact on our business results until September 2021, and that our
results in October 2021 will recover to the level before the outbreak. The Companies developed futurebusiness plans and used them for the estimates of impairment charges on property, plant and equipment,
goodwill and other intangible assets based on this assumption.
Significant account estimate is ¥9,398 million valuation of goodwill arising from the acquisition of WACOALEUROPE LTD.
To test for goodwill impairment, the carrying amount of each reporting unit is compared with its fair value. If
the carrying amount of a reporting unit exceeds its fair value, an impairment charge is recognized in an amountequal to that excess.
Such assumptions include recovery from the recession in business activities caused by COVID-19, tax rates
and risk-adjusted discount rates. There is a possibility that impairment charges would be recognized if theforecast of business results deteriorates or the tax rates or risk-adjusted discount rates increase.
See Note 21 for further information about measurement of fair value.

108

Cash and Cash Equivalents – Cash and cash equivalents include all highly liquid investments with original
maturities of three months or less.
Foreign Currency Translation – Assets and liabilities of foreign subsidiaries have been translated to Japanese
yen at period-end exchange rates and income and expenses have been translated using average exchange rates
for the period. Translation adjustments resulting from the process of translating consolidated financial
statements, net of tax, are included in accumulated other comprehensive income (loss), which is a separate
component of equity. Exchange gains and losses resulting from foreign currency transactions and theconversion of monetary assets and liabilities denominated in foreign currencies are included in other income(expenses) in the consolidated statements of income.
Foreign currency translation gains (losses) for the years ended March 31, 2021, 2020 and 2019 were ¥168
million, ¥36 million and ¥76 million, respectively. They have been included in other – net of other income(expenses).
Marketable Securities and Investments – The Companies classify their marketable securities and investments
in debt securities into one of two categories: available-for-sale or held-to-maturity. Available-for-salesecurities are recorded at fair value with a corresponding recognition of unrealized holding gain or loss (net oftax) in accumulated other comprehensive (loss) income, which is a separate component of equity, until
realized. Held-to-maturity securities are measured at amortized cost. The Companies classify debt securities as
held-to-maturity only if the Companies have the positive intent and ability to hold those securities to maturity.
Gains and losses on sales of debt securities are computed based on cost determined using the average cost
method. The Company periodically determines whether any decline in the value of debt securities is
temporary, based on the period and extent of the decline, the issuer's financial position and prospects, and theintention to hold it for a sufficient period of expected recovery of fair value. If it is determined that the decline
is not temporary, the difference between the carrying amount and its fair value is recognized as a valuation
loss.
Equity securities are measured at fair value and unrealized holding gain or loss is recorded in net profit or loss.
Allowance for Doubtful Receivables – An allowance for doubtful notes and receivables is estimated based on
historical collection experience and additional information including current economic conditions and thecreditworthiness of each applicable customer.
Inventories – Inventories are stated at the lower of cost or net realizable value, cost being determined by the
first-in, first-out method for raw materials and the average cost method for work in process and finishedproducts. Cost includes net prices paid for materials purchased, production labor cost, factory overhead andcharges for customs duties.
Property, Plant and Equipment – Property, plant and equipment is stated at cost less impairment charges.
Property, plant and equipment are amortized over their estimated useful lives mainly using the straight-line
method. The estimated useful lives are as follows:
Buildings and structures

2 to 50 years (mainly 38 years)

Machinery and equipment(except for the part of the paintings)

2 to 20 years (mainly 5 years)

Depreciation expenses for the years ended March 31, 2021, 2020 and 2019 were ¥3,139 million, ¥3,545
million and ¥3,538 million, respectively.

109

Impairment of Property, Plant and Equipment – The carrying amount of long-lived assets held and used by
the Companies is evaluated for impairment whenever there is an event or change in circumstances thatindicates that such assets have been impaired or that the carrying amounts of such assets might not berecoverable. The carrying amount of property, plant and equipment is not recoverable if it exceeds the sum of
the undiscounted cash flows expected to result from the use and eventual disposition of the asset. That
assessment is based on the carrying amount of the asset at the date it is tested for recoverability, whether in use
or under development. The impairment charge is measured as the amount by which the carrying amount ofproperty, plant and equipment exceeds its fair value.
Goodwill and Other Intangible Assets – Goodwill represents the excess of the purchase price of an acquired
entity over the fair value of assets acquired and liabilities assumed.
Goodwill and other intangible assets with indefinite useful lives are tested for impairment annually, or more
frequently if conditions indicate an earlier review is necessary. The goodwill is allocated to the reporting unit
in which the business that the goodwill resides. To test for goodwill impairment, the carrying amount of eachreporting unit is compared with its fair value. If the carrying amount of a reporting unit exceeds its fair value,
an impairment charge is recognized in an amount equal to that excess. To test for impairment of otherintangible assets with indefinite useful lives, the carrying value of an intangible asset is compared with its fairvalue. If the carrying amount of an intangible asset with indefinite useful life exceeds its fair value, an
impairment charge is recognized in an amount equal to that excess.
Other intangible assets with finite useful lives consist primarily of brands, customer relationships and software
are amortized over their estimated useful lives using the straight-line method. The estimated useful lives are as
follows:
BrandsCustomer relationships
Software10, 20 and 25 years (mainly 25 years)
5 years
5 years

Asset Retirement Obligations – The Companies have obligations arising from contractual commitments toremove leasehold improvements from leased facilities and return the property to a specified condition when
the lease terminates. The Companies recognize asset retirement obligations at the inception of a lease. The
asset retirement obligations are measured with an expected present value technique based on historicalexperience and recorded in other long-term liabilities in the consolidated balance sheets and subsequently
adjusted for changes in estimated disposal costs. The difference between the gross expected future cash flow
and its present value is accreted over the life of the related lease, which is determined using best estimates
because the Companies' lease contracts generally have automatic renewal provisions. The estimated asset
retirement costs are capitalized as part of the carrying amount of the associated long-lived asset anddepreciated over its useful life. For some lease contracts that are automatically renewed at the end of thecontract, asset retirement obligations are calculated based on a reasonable estimate of the end of the contract.
Termination and Retirement Plans – Termination and retirement benefits are accounted for in accordancewith the guidance for retirement benefits. The Companies amortize net actuarial gains and losses and priorservice cost over the average employees' remaining service period by the declining-balance method and by thestraight-line method, respectively.
Leases – As for lessor accounting, the Companies recognized revenue mainly from contracts consisting ofleasing mannequins, display furniture and real estate owned by the Companies to our customers. These leasearrangements are classified as operating leases and related revenue is recognized ratably over the lease term.
Options to extend or terminate the leases are included in some of the contracts. The Companies take such
options into account to determine the lease term when it is probable that these options will be exercised.
Moreover, almost all of the contracts do not contain variable consideration and purchase options for theircustomers. Some of the contracts contain lease and non-lease components and the consideration in thecontracts are allocated based upon estimated standalone selling prices of the lease and non-lease components.

110

As for lessee accounting, the Companies have leases for assets such as retail stores, warehouses, offices,
corporate housing, vehicles, machinery, and equipment, which are classified as an operating lease. The
Companies determine whether a contract is, or contains a lease at the inception of the contract. Options toextend or terminate the lease contracts are included in some of the contracts. The Companies take such options
into account in order to determine the lease term when it is probable that these options will be exercised. Someof the contracts contain variable lease payments. Most of the variable lease payments are for our retail stores,
which depend on their sales. Material residual value guarantees and restriction or covenants imposed by leases
do not exist in the contracts.
Some of the contracts contain lease and non-lease components. Considerations in the contracts for which
underlying assets are land and buildings and structures are allocated based upon the estimated standalone
selling prices of the lease and non-lease components, which are accounted for separately. On the other hand,
the Companies elect the practical expedient and did not separate lease components from non-lease components
for leases for which underlying assets are machinery and equipment. The Companies use the incremental
borrowing rate based on the information available at commencement date to determine the present values oflease payments, unless the implicit rate is readily determinable. The Companies also elect the practical
expedient which allows entities to expense leases with a term of 12 months or less at the commencement dateas incurred. Operating lease cost is recognized on a straight-line basis over the lease term.
The Financial Accounting Standards Board ("FASB") guidance issued in April 2020 allows a lessee of a leasesubject to a rent concession occurring as a direct consequence of the COVID-19 pandemic to elect to apply asimplified accounting treatment. Under this guidance, the lessee may elect to apply the practical expedient andnot assess whether a COVID-19-related rent concession that meets certain prescribed conditions is a "leasemodification," as stipulated in Accounting Standard Codification 842, "Leases" ("ASC 842"). The Companies
have elected to apply this practical expedient for rent concessions that meet those certain prescribed conditions
referred to above and the rent concessions are accounted for as variable lease payments rather than being
treated as lease modifications.
Treasury Stock – The Companies account for treasury stock under the cost method and include treasury stock
as a component of equity.
Acquisitions – The Companies account for acquisitions using the acquisition method in accordance with theguidance for business combinations. The Companies allocate the purchase price to the assets acquired andliabilities assumed based on the estimated fair values at the date of acquisition, including intangible assets thatcan be identified and named. The purchase price in excess of the fair value of the net assets is recorded as
goodwill. In the case where the purchase price is below the fair value of the net assets, the Companies
recognize the excess of fair value of the net assets over the purchase price in earnings as a gain on bargain
purchase in the consolidated statements of income. The Companies measure contingent consideration
classified as liabilities at the fair value as of the date of acquisition and remeasure them to fair values at eachreporting date until the contingencies are resolved. Fluctuations of the fair values due to the remeasurement arerecognized in income or expenses as incurred.
Revenue Recognition – The Companies recognize revenue when control of promised products is transferred tocustomers and performance obligations are satisfied. The Companies' revenue is recognized for transactions,net of any trade discounts or rebates given. In addition, provision for expected returns is deducted fromrevenue based on historical return.
Shipping and Handling Costs – Shipping and handling costs are expensed as incurred.
Advertising Expenses – Advertising costs are expensed as incurred. Advertising expenses for the years ended
March 31, 2021, 2020 and 2019 were ¥11,239 million, ¥13,169 million and ¥12,329 million, respectively, andhave been included in selling, general and administrative expenses.
Research and Development Costs – Research and development costs are expensed as incurred. Research anddevelopment costs for the years ended March 31, 2021, 2020 and 2019 were ¥463 million, ¥508 million and¥739 million, respectively, and have been included in selling, general and administrative expenses.

111

Consumption Taxes – Consumption taxes are excluded from sales, costs, and expenses in the consolidated
statements of income.
Income Taxes – The provision for income taxes is determined under the asset and liability method in
accordance with the guidance for income taxes. Under this method, deferred tax assets and liabilities are
determined for temporary differences between the carrying amounts of assets and liabilities in the financial
statements and tax bases of assets and liabilities and tax loss carryforwards at presently enacted tax rates. A
valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax
assets will not be realized in the future.
The Companies assess their income tax positions and record tax benefits for all years subject to examination
based upon their evaluation of the facts, circumstances and information available as of the end of the fiscal
year. For those tax positions only where there is greater than a 50% likelihood that the tax position will besustained, the Companies record the largest amount of tax benefit that may potentially be realized uponultimate settlement with a taxing authority that has full knowledge of all relevant information. Interest andpenalties related to income taxes are included in the consolidated statements of income.
Share-Based Compensation – Share-based compensation is accounted for in accordance with ASC 718,
"Compensation – Stock Compensation." The Company measures share-based compensation cost at the grantdate, based on the fair value of the award and recognizes the cost over the requisite service period, which is thevesting period. The fair value of the award is estimated using the Black-Scholes option-pricing model.
Derivatives – Derivative instruments, including certain derivative instruments embedded in other contracts, areaccounted for in accordance with the guidance for derivatives and hedging. Because such derivative
instruments are not designated as hedges, changes in the fair value of the derivatives are recorded in earnings
or losses.
Government Grant – Government grants are recognized when there is reasonable assurance that theCompanies will comply with the conditions attached to the grant and that the grant will be received.
Government grants are recognized as reductions from operating costs and expenses. The amounts of reductions
from cost of sales and selling, general and administrative expenses for the year ended March 31, 2021 were
¥1,049 million and ¥2,922 million, respectively.
Subsequent Events – In accordance with the guidance for subsequent events, the Company has evaluatedsubsequent events through June 29, 2021.
Reclassifications – Certain reclassifications have been made to the prior years' consolidated financial
statements to conform to the current year's presentation.
Recent Accounting Pronouncements:
Recently Adopted Accounting GuidanceInternal-Use Software – In August 2018, the FASB issued guidance related to internal-use software. This
guidance clarifies the accounting for costs of implementation activities performed in a cloud computing
arrangement that is a service contract. This guidance is effective for fiscal years beginning after December 15,
2019 and interim periods within that annual period. The Companies have adopted the guidance from thequarter beginning April 1, 2020. The adoption of this guidance did not have a material impact on the
Company's balance sheets and statements of income.
Disclosure on Fair Value Measurement – In August 2018, the FASB issued guidance related to the fair value
measurement disclosure. This guidance removes, modifies, and adds some of the disclosure requirements onfair value. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods
within that annual period. The Companies have adopted the guidance from the quarter beginning April 1,
2020. The adoption of this guidance did not have a material impact on the Company's balance sheets andstatements of income.

112

Disclosure on Defined Benefit Plans – In August 2018, the FASB issued guidance related to disclosure on
defined benefit plans. This guidance removes, modifies, and adds the disclosure requirements on defined
benefit pension. This guidance is effective for fiscal years ending after December 15, 2020 and interim periods
within that annual period. The Companies have adopted the guidance from the quarter beginning April 1,
2020. The adoption of this guidance did not have a material impact on the Company's balance sheets andstatements of income.
Recent Accounting Guidance Not Yet Adopted
Measurement of Credit Losses on Financial Instruments – In June 2016, the FASB issued new accounting
guidance related to measurement of credit losses on financial instruments. This guidance introduces a new
impairment model based on expected losses rather than incurred losses. Using this model will result in more
timely recognition of losses than under the current incurred approach. In November 2019, the FASB issued
additional guidance related to the change in the effective date of the above guidance. As a result, the guidanceis effective for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years.
The Company is currently evaluating the impact of adoption on the Company's consolidated financial position,
results of operations or cash flows.
2.

TRANSLATION INTO U.S. DOLLAR STATEMENTS
The consolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and operates. The translation of Japanese yen amounts into U.S. dollar amounts is
included solely for the convenience of readers outside of Japan and has been made at the rate of ¥110.61 to $1,
the noon buying rate for yen in New York City as of March 31, 2021. Such translation should not be construed
as representations that the Japanese yen amounts could be converted into U.S. dollars at the above or any other
rate.

3.

MARKETABLE SECURITIES AND INVESTMENTS
Debt Securities – The fair value of debt securities is based on quoted market prices as of March 31, 2021 and2020. The cost, gross unrealized gain and loss and the fair value by major security type were as follows:

2021

Cost

Held-to-maturity securities:
Current:
Corporate debt securities¥222

Millions of Yen
Gross
Gross
Unrealized
Unrealized
Gain
Loss

¥2

Cost

Held-to-maturity securities:
Current:
Corporate debt securities
Noncurrent:
Corporate debt securities

¥656

¥2

¥329

¥4

113

¥224

Millions of Yen
Gross
Gross
Unrealized
Unrealized
Gain
Loss

2020

Fair Value¥1

Fair Value

¥657
¥333

Gross unrealized losses and fair values of debt securities, for those that have been in a continuous unrealized
loss position for more than 12 months as of March 31, 2021 and 2020, were as follows:
Millions of Yen
2021

2020
Gross
Unrealized
Loss

Fair Value
Held-to-maturity securities:
Marketable securities:
Corporate debt securities

Fair Value

Gross
Unrealized
Loss

¥109

¥1

Gross unrealized losses and fair values of debt securities, for those that have been in a continuous unrealized
loss position for less than 12 months as of March 31, 2021 and 2020, were as follows:
Millions of Yen
2021
Fair Value

2020
Gross
Unrealized
Loss

Held-to-maturity securities:
Marketable securities:
Corporate debt securities

Fair Value

Gross
Unrealized
Loss

¥220

¥0

The Companies periodically determine whether a decline in the fair value of debt securities is deemed to beother than temporary based on criteria that include the duration of the market decline, the extent to which costexceeds fair value, the financial position and business outlook of the issuer, and the intent and ability of theCompanies to retain the impaired held-to-maturity securities for a sufficient period of time for anticipated
recovery in fair value. No debt securities were identified that meet the Companies' criteria for recognition of an
impairment charge on debt securities in an unrealized loss position presented above. Therefore, the Companies
do not believe the unrealized losses represent an other than temporary impairment as of March 31, 2021 and2020.
Future maturities of debt securities classified as held-to-maturity securities as of March 31, 2021, were as
follows:
Millions of Yen
Fair
Cost
Value
Due within one year

¥ 222

¥ 224

Total

¥ 222

¥ 224

As a result of the conversion of convertible bonds into equity securities, the Company recorded gains on
exchange of marketable securities of ¥140 million for the year ended March 31, 2019. There were no exchangeof marketable securities and investments during the years ended March 31, 2021 and 2020.

114

Equity Securities – Realized and unrealized gains and losses on equity securities during the years ended
March 31, 2021 and 2020, were as follows:
2021
Realized gains (losses) recognized during the period on equity
securities sold during the period
Unrealized gains (losses) recognized during the period on equity
securities still held at March 31
Net gains (losses) recognized during the period on equity
securities
4.

¥

Millions of Yen
2020

2019

91

¥ 1,620¥(77)

10,299(5,380)(5,493)¥ 10,390¥ (3,760)¥ (5,570)

ALLOWANCES FOR DOUBTFUL RECEIVABLES
Information related to the Companies' allowance for doubtful receivables as of March 31, 2021, 2020 and 2019
was as follows:

5.

2021

Millions of Yen
2020

2019

Balance at the beginning of the year
Charged to expenses
Balances written-off/reversed

¥ 489
33
(176)

¥ 229
270
(10 )

¥ 207
36
(14 )

Balance at the end of the year

¥ 346

¥ 489

¥ 229

INVENTORIESThe components of inventories as of March 31, 2021 and 2020 were as follows:
Millions of Yen
2021
2020

6.

Finished products
Work in process
Raw materials¥ 37,217
3,748
2,285

¥ 37,224
3,938
2,265

Total

¥ 43,250¥ 43,427

INVESTMENTS IN AFFILIATED COMPANIES
Certain investments are accounted for using the equity method if the Companies have the ability to exercise
significant influence over an investee. Significant influence is generally deemed to exist if the Companies havean ownership interest in the voting stock of the investee between 20% and 50%, although other factors are
considered in determining whether the equity method of accounting is appropriate. The Companies record
investments in equity method investees meeting these characteristics as "Investments in affiliated companies."
Under the equity method, the Companies record their proportionate share of an affiliated company's income orloss based on the most recently available financial statements.

115

The primary affiliated companies and percentage of ownership as of March 31, 2021 and 2020 were as
follows:
Percentage of Ownership (%)
2021
2020

Name of Investee
Shinyoung Wacoal Inc.
Taiwan Wacoal Co., Ltd.
Thai Wacoal Public Co., Ltd.
PT. Indonesia Wacoal
House of Rose Co., Ltd.

25
50
34
42
21

25
50
34
42
21

Aggregate carrying amounts and fair values of investments in affiliated companies which have a quoted
market price as of March 31, 2021 and 2020 were as follows:
Millions of Yen
2021
2020
Carrying amount
Aggregate value of quoted market price¥13,652
10,034¥14,431
9,421

The following tables represent the affiliated companies' summarized balance sheets and statements of income
as of and for the years ended March 31, 2020 and 2019. Such information as of and for the year ended March
31, 2021 were not disclosed as they were immaterial.
Millions of Yen
2020
2019
Current assets
Noncurrent assets¥ 43,974
42,161¥ 41,929
44,635

Total¥ 86,135¥ 86,564

Current liabilities
Long-term liabilities
Equity

¥

¥

Total

¥ 86,135

9,048
7,583
69,5048,569
7,145
70,850¥ 86,564

Millions of Yen
2020
2019
Net sales
Gross profit
Income before income taxes
Net income¥ 62,676
32,455
1,654
860

116

¥ 63,066
32,1053,458
2,714

The balance of receivables and payables to affiliated companies as of March 31, 2021 and 2020 were as
follows:
Millions of Yen
2021
2020
Accounts receivable
Accounts payable
Other receivable
Long-term loan

¥372
501
173
315

¥618
509
329

The amounts of transaction with affiliated companies for the years ended March 31, 2021, 2020 and 2019 were
follows:
2021
Sales
Cost of sales corresponding to sales of material and products
Purchases
Royalties
Interest income¥ 1,636
1,751
3,681
203
3

Millions of Yen
2020

2019

¥ 2,838
2,826
5,302
330

¥ 3,257
3,175
5,612
299

Dividends received from affiliated companies were ¥602 million, ¥542 million and ¥514 million for the years
ended March 31, 2021, 2020 and 2019, respectively.
7.

ACQUISITIONSThe Company decided to enter into a share purchase agreement pursuant to which the Companies acquired
through our U.S. subsidiary Wacoal International Corp. ("Wacoal International") all of the issued andoutstanding shares of Intimates Online, Inc. ("Intimates Online"), a women's innerwear design and sales
company in the U.S. at the meeting of our board of directors held on July 30, 2019. Wacoal International
entered into the share purchase agreement on the same day (U.S. time) and acquired all of the issued andoutstanding shares of Intimates Online on July 31, 2019 (U.S. time).
Intimates Online designs and sells women's innerwear products under its "LIVELY" brand in the U.S.
thorough its e-commerce website and directly managed retail stores. The Companies expect discontinuous
growth in the U.S. by acquiring its customer base mainly for millennials and its unique marketing method tospread its reputation and online reviews by organizing its customers as its ambassador.
Consideration for the acquisition was ¥13,520 million and is consisted of ¥9,348 million (USD 86 million) of
cash and ¥4,172 million (USD 38 million) of contingent consideration.
The contingent consideration was agreed with previous shareholders upon the share purchase agreement andwill be paid to them over a period of four fiscal years. Payment is contingent on Intimate Online's performanceachieving certain goals such as sales targets. The total contingent payment amount will be within the range of
USD 20 million and USD 55 million.
The fair value of the contingent consideration was ¥2,901 million (USD 26 million) and ¥3,874 million (USD
36 million) as of March 31, 2021 and 2020, respectively. The changes in fair value were recognized in selling,
general and administrative expenses. The contingent consideration of ¥1,262 million (USD 11 million) and¥1,088 million (USD 10 million), for which the consideration has been fixed, was recognized in Notes andaccounts payable as of March 31, 2021 and 2020, respectively.
For the year ended March 2020, acquisition-related costs were ¥245 million and had been included in selling,
general and administrative expenses. For the year ended March 2021, acquisition-related cost did not occur.

117

As a result of the purchase price allocation, the Company recognized ¥11,551 million of goodwill and ¥1,923
million of other intangible assets in Wacoal Business (Overseas). The goodwill arising from the acquisition
consists largely of the expected growth of Intimates Online, synergies and economies of scale expected fromcombining the operations with Wacoal International. Other intangible assets were composed of ¥1,097 million
brands, ¥793 million customer relationships, and ¥33 million of noncompetition agreements, respectively.
Goodwill is not deducted for tax purposes. The amount of brands, customer relationships and noncompetition
agreements are amortized based on the estimated useful lives of 10 and 5 years, respectively.
The Company adjusted the fair values of assets acquired and liabilities assumed as of the acquisition datebased on the information the Company obtained subsequent to the acquisition date. These adjustments arereflected retrospectively to the fair value of assets acquired and liabilities assumed as of the acquisition date.
The fair values of assets acquired and liabilities assumed as of the acquisition date were as follows:
Millions of yen
July 31, 2019
BeforeAfter
Adjustment
Adjustment
Cash and cash equivalents
Notes and accounts receivable
Inventories
Other current assets
Property, plant and equipment
Operating leases right-of-use assets
Goodwill
Other intangible assets
Other assets
Total assets

¥

167
14
341
16
14
295
13,50518
14,370Notes and accounts payables
Short-term operating lease liabilities
Other current liabilities
Deferred income taxes
Long-term operating lease liabilities
Total liabilities

¥

167
14
383
12
17
290
11,5511,923
18
14,375222
47
42

Total equity

249
560

228
47
43
288
249
855

¥ 13,810¥ 13,520

Pro Forma Financial Information (Unaudited)
Unaudited supplemental pro forma information for the combined result of operation of the Company and its
subsidiary as though the acquisition had occurred as of April 1, 2018 were as follows:
Millions of yen
2020
2019
Net sales
Operating income
Net income (loss) attributable to Wacoal Holdings Corp.

¥187,482
6,338
3,172

¥195,684
4,346
(193)

Net sales and operating loss of Intimates Online included in the Company's consolidated statements of income
for the year ended March 31, 2020 are ¥1,301 million and ¥1,250 million, respectively.

118

8.

GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill – Changes in the carrying amount of goodwill by operating segments for the years ended March 31,
2021, 2020 and 2019 were as follows.
Millions of Yen
2021

Balance at the beginning of the year:
Acquisition cost
Accumulated impairment charges
Carrying amount
Acquisition during the year
Impairment charges
Foreign currency translation adjustments
Balance at the end of the year:
Acquisition cost
Accumulated impairment charges
Carrying amountWacoalBusiness(Overseas)

Peach John

¥ 22,371¥

Total¥ 22,371

22,371

22,371(2,673)
1,471(2,673)
1,471

24,103(2,934)

24,103(2,934)¥ 21,169¥¥ 21,169

Millions of Yen
2020

Balance at the beginning of the year:
Acquisition cost
Accumulated impairment charges
Carrying amount
Acquisition during the year
Impairment charges
Foreign currency translation adjustments
Balance at the end of the year:
Acquisition cost
Accumulated impairment charges
Carrying amountWacoalBusiness(Overseas)

Peach John

¥ 11,954¥

Total¥ 11,954

11,954
11,551(217)(917)

11,954
11,551(217)(917)

22,594(223)

22,594(223)¥ 22,371¥¥ 22,371

Millions of Yen
2019
WacoalBusiness(Overseas)
Balance at the beginning of the year:
Acquisition cost
Accumulated impairment charges
Carrying amount
Impairment charges
Foreign currency translation adjustments
Balance at the end of the year:
Acquisition cost
Accumulated impairment charges¥ 12,269
12,269Peach John

Total

¥ 11,203(6,878)4,325(4,325)¥ 23,472(6,878)
16,594(4,325)(315)

11,203(11,203)

23,157(11,203)(315)
11,954

Carrying amount¥ 11,954

119¥¥ 11,954

The Company recorded impairment charges on goodwill of ¥2,673 million for the WACOAL EUROPE LTD.
in the year ended March 31, 2021, which was included in operating costs and expenses of Wacoal Business(Overseas). The Company recorded impairment charges on goodwill of ¥217 million for the G Tech MaterialCo., LTD. ("G Tech") in the year ended March 31, 2020, which was included in operating costs and expensesof Wacoal Business (Overseas). The Company recorded impairment charges on goodwill of ¥4,325 million for
the Peach John Business in the year ended March 31, 2019, which was included in operating costs andexpenses of the Peach John Business. See Note 21 for further information about measurement of fair value.
Other Intangible Assets – The components of intangible assets excluding goodwill as of March 31, 2021 and2020 were as follows:Year Ended March 31
Amortized intangible assets:
BrandsSoftware
OthersTotal
Unamortized intangible assets:
Trademarks
Other
Total

Gross
Carrying
Amount¥7,479
17,9102,544Millions of Yen
2021
Accumulated
Amortization
Grossand Impairment
Carrying
ChargesAmount
¥

2,748
9,273
1,256

¥

6,670
16,0392,534

2020
Accumulated
Amortization
and Impairment
Charges
¥

2,076
8,163
1,022

¥ 27,933¥ 13,277¥ 25,243¥ 11,261¥ 5,31675¥ 4,827¥ 5,31676¥ 4,827¥ 5,391¥ 4,827¥ 5,392¥ 4,827

Other intangible assets acquired during the year ended March 31, 2021 totaled ¥3,073 million, which primarily
consist of software. Other intangible assets acquired during the year ended March 31, 2020 totaled ¥5,313
million, which primarily consist of brands and software. Other intangible assets acquired during the year ended
March 31, 2019 totaled ¥3,266 million, which primarily consist of software. Estimated useful life for brands
and software are ten and five years, respectively.
During the year ended March 31, 2021, the Companies recorded impairment charges on software of Taiwan
Peach John of ¥12 million, which was included in operating costs and expenses of the Peach John Business.
During the years ended March 31, 2020 and 2019, the Companies recorded impairment charges on the
trademark of Peach John of ¥191 million and ¥1,314 million, which was included in operating costs andexpenses of the Peach John Business. During the year ended March 31, 2020, the Companies also recorded¥65 million of impairment charges on software of the A Tech Textile Co., LTD. ("A Tech"), which was
included in operating expenses of the Wacoal Business (Overseas). During the year ended March 31, 2019, theCompanies recorded ¥195 million of impairment charges on software of Ai Co., Ltd., which was included inoperating expenses of the Other segment. See Note 21 for further information.

120

Aggregate amortization expenses for the years ended March 31, 2021, 2020 and 2019 related to otherintangible assets were ¥2,989 million, ¥2,484 million and ¥2,109 million, respectively. Future estimatedamortization expenses as of March 31, 2021 were as follows:
Millions of
Yen

Year Ending March 31
Estimated amortization expense
2022
2023
2024
2025
2026

¥

Total
9.

2,912
2,834
2,416
1,782
1,040

¥ 10,984

SHORT-TERM BANK LOANS AND LONG-TERM DEBT
Short-term bank loans as of March 31, 2021 and 2020 consisted of the following:
Millions of Yen
2021
2020
Unsecured bank loans¥40,672¥3,364

The weighted-average annual interest rates on short-term bank loans as of March 31, 2021 and 2020 were0.2% and 0.3%, respectively.
Unused lines of credit for short-term financing as of March 31, 2021 and 2020 aggregated to ¥37,614 millionand ¥28,657 million, respectively.
Long-term debt as of March 31, 2021 and 2020 was summarized below. The interest rates and maturities were
for loans as of March 31, 2021.
Millions of Yen
2021
2020
Collateralized bank loans, with fixed interest at 0.6%, maturing
through 2022
Unsecured bank loans, with fixed interest at 0.0 ~ 1.8%,
maturing through 2026
Total
Less current portion of long-term portionLong-term debt, less current portion

¥

15

¥ 35

1,518
1,533
(35 )

50
85
(50)

¥ 1,498¥ 35

The annual maturities of long-term debt as of March 31, 2021 were as follows:
Millions of
Yen

Year Ending March 31
2022
2023
2024
2025
2026

¥

35

Total

¥ 1,533

1,498

121

A subsidiary has pledged assets as security for loans. As of March 31, 2021 and 2020, assets pledged ascollateral for bank loans were as follows:
Millions of Yen
2021
2020
Land
Buildings

¥ 150
124

¥ 150
146

Total

¥ 274

¥ 296

As is customary in Japan, both short-term and long-term loans are made under general agreements which
provide for security and guarantees for future and present indebtedness to be given upon request of the bank.
The bank has the right to offset cash deposits against obligations that have come due or, in the event of default,
against all obligations due to the bank.
10.

LEASES
Lessor Accounting
Operating lease income for the years ended March 31, 2021 and 2020 was as follow. Lease income wasincluded in net sales and other net income.
Millions of Yen
2021
2020
Operating lease income¥1,741¥2,392

The acquisition costs of equipment leased to customers under operating leases were ¥2,756 million and ¥2,756
million of land and ¥513 million and ¥516 million of building and building improvements. Accumulated
depreciation on these equipment was ¥416 million and ¥413 million as of March 31, 2021 and 2020. These areincluded in net property, plant and equipment.
Future minimum lease income classified as operating leases as of March 31, 2021 were as follows. Note thatlease payments related to mannequins and display furniture which were mainly part of the Companies' lease
income were not included in the below table because the contracts terms were not material.
Millions of
Yen

Year Ending March 31
2022
2023
2024
2025
2026
Thereafter

¥

Total

¥ 2,046

122

249
187
186
127
93
1,204

Lessee Accounting
Operating lease costs for the years ended March 31, 2021 and 2020 were as follows. Lease expenses were
included in cost of sales and selling, general and administrative expenses.
Gain or loss recognized as a result of not being treated as lease modifications are ¥550 million and these are
reduced from variable lease cost.
Millions of Yen
2021
2020
Operating lease costs
Short-term lease costs
Variable lease costs¥ 5,121535
424¥ 4,945
635
1,295

Total

¥ 6,080¥ 6,875

Supplemental cash flow information related to operating leases for the years ended March 31, 2021 and 2020
was as follows.
Millions of Yen
2021
2020
Cash paid for amounts included in the measurement of leaseliabilities
Non-cash activities concerning right-of-use assets obtained in
exchange for new operating lease liabilities.

¥ 4,542¥ 4,798

4,523

5,483

Weighted-average remaining lease term and discount rate for operating leases were as follows:

Weighted-average remaining lease term
Weighted-average discount rate

2021

2020

60.1 months
1.7%

63.0 months
1.7%

Future minimum lease payments classified as operating leases as of March 31, 2021 were as follows:
Millions of
Yen

Year Ending March 31
2022
2023
2024
2025
2026
Thereafter¥

Total minimum lease payments
Less interest cost

4,602
2,841
1,682
1,223
866
2,466
13,680(749)

Total lease liabilities¥ 12,931

Any material leases commenced after April 1, 2021 were not recognized as of March 31, 2021.

123

11.

ASSET RETIREMENT OBLIGATIONSThe Companies recorded the fair value of asset retirement obligations in order to recognize legal obligations
associated with the removal of leasehold improvements from leased facilities and return of the property to a
specified condition when the lease terminates.
A reconciliation of the beginning and ending aggregate carrying amount of the asset retirement obligation is asfollows:

12.

2021

Millions of Yen
2020

2019

Balance at the beginning of the year
Accretion expense
Liabilities incurred
Liabilities settled
Change due to foreign currency translation

¥ 827
3
38
(41 )
(1 )

¥ 813
3
63
(52 )
0

¥ 825
2
92
(106)
0

Balance at the end of the year

¥ 826

¥ 827

¥ 813

TERMINATION AND RETIREMENT PLANS
Employee Retirement Plans – Certain subsidiaries of the Company sponsor termination and retirement benefit
plans that cover substantially all employees. Benefits are based on the employee's years of service, positionand performance. If the termination is involuntary or caused by death, the employee is usually entitled togreater payments than in the case of voluntary termination.
Certain subsidiaries of the Company have contributory defined retirement benefit plans and several unfunded
termination plans administered by certain subsidiaries of the Company. Benefits under the contributory
defined retirement benefit plan are usually paid in a lump sum at the earlier of termination or retirement,
although periodic payments are available under certain conditions. Benefits under the other termination andretirement benefit plan are paid either as lump sum payments or periodic payments under certain conditions.
The benefits are usually paid as a lump sum payment, if the employee resigns before the mandatory retirement
age.

124

Contributory Defined Retirement Benefit Plan – The following provides a reconciliation of benefit
obligations, plan assets and funded status of the plans:
2021
Change in benefit obligations:Benefit obligations at the beginning of the year
Service cost
Interest cost
Participants' contributions
Actuarial (gain) loss
Loss based on prior service benefits
Benefits paid from plan assets
Settlement paid from plan assets
Settlement paid by the Company and certain subsidiaries
Changes in foreign currency exchange rates
Benefit obligations at the end of the year

¥ 37,674
1,109
180
59
(902)

Millions of Yen
2020

2019
¥ 34,580
1,196
178
62
4,937

(950)
(1,097)(301)(5 )35,767¥ 38,681
1,243
176
60
(217)
253
(961)
(1,275)(289)
337,674

Change in plan assets:
Fair value of plan assets at the beginning of the year
Actual return on plan assets
Employer contributions
Participants' contributions
Benefit payments
Settlement payments
Changes in foreign currency exchange rates
Fair value of plan assets at the end of the year

¥ 40,464
4,121
594
59
(950)
(1,097)24
43,215¥ 40,680
1,375
579
60
(961)
(1,275)
6
40,464¥ 42,736
(846)
657
62
(961)
(976)
8
40,680Funded status at the end of the year

¥

¥

¥

7,448

2,790

(961)
(976)
(339)
4
38,681

1,999

Amounts recognized in the consolidated balance sheets as of March 31, 2021 and 2020 consist of:Millions of Yen
2021
2020
Prepaid pension expense
Other current liabilities
Liability for termination and retirement benefits¥ 9,533(143)(1,942)¥ 4,974(115)(2,069)Total¥ 7,448¥ 2,790

Amounts recognized in accumulated other comprehensive income, as of March 31, 2021 and 2020 were as
follows:
Millions of Yen
2021
2020
Actuarial loss
Prior service cost

¥ (164)(232)¥ (5,048)
(253)

Total

¥ (396)¥ (5,301)

The accumulated benefit obligation for all defined retirement benefit plans as of March 31, 2021 and 2020 was
as follows:
Millions of Yen
2021
2020
Accumulated benefit obligations¥35,658

125¥37,532

The projected benefit obligations and the fair value of the plan assets for certain subsidiaries' of the Company
with projected benefit obligations in excess of the fair value of plan assets, and the accumulated benefit
obligations and the fair value of the plan assets for certain subsidiaries' pension plans with accumulated benefit
obligations in excess of the fair value of plan assets were as follows:
Millions of Yen
2021
2020
Plans with projected benefit obligations in excess of plan
assets:
Projected benefit obligations
Fair value of plan assets
Plans with accumulated benefit obligations in excess of the fairvalue of plan assets:
Accumulated benefit obligations
Fair value of plan assets¥ 2,971735¥ 3,075
738

2,971
735

3,075
738

Net periodic benefit costs for plans of certain subsidiaries' of the Company consisted of the following for theyears ended March 31, 2021, 2020 and 2019:
Millions of Yen
2020

2019

¥ 1,109180(1,015)876
21¥ 1,243
176(1,006)
1,186¥ 1,196
178(1,007)5¥ 1,171¥ 1,599¥

2021
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss (gain)
Amortization of prior service benefits372

The unrecognized net actuarial gain or loss and prior service benefits are amortized within 12 years (theaverage remaining service life of active participants) using the declining-balance method and the straight-line
method, respectively.
Other changes in plan assets and benefit obligations recognized in other comprehensive income for the years
ended March 31, 2021, 2020 and 2019 were as follows:
2021
Actuarial gain (loss)
Amortization of actuarial loss (gain)
Prior service benefits
Amortization of prior service benefits¥ 4,008
876

Millions of Yen
2020
¥

2019

586
1,186
(253)

¥ (6,790)5¥ 1,519¥ (6,785)

21¥ 4,905

Certain subsidiaries of the Company use a measurement date of March 31 for their plans. The weightedaverage assumptions used as of March 31, 2021 and 2020 in computing the benefit obligations shown above
were as follows:

Discount rate
Expected revaluation rate for cash balance plan

126

2021

2020

0.6%
0.9%

0.5%
0.9%

The weighted-average assumptions used as of March 31, 2021, 2020 and 2019 in computing the net periodic
benefit costs shown above were as follows:

Discount rate
Rate of increase in future compensation
Expected long-term rate of return on plan assets
Expected revaluation rate for cash balance plan

2021

2020

2019

0.5%
5.3%
2.5%
0.9%

0.5%
5.3%
2.5%
0.9%

0.5%
5.3%
2.5%
0.9%

Certain subsidiaries of the Company approach to establishing the discount rate is based upon corporate bondindices. The discount rate assumption is based upon effective yields as of March 31, 2021 on the corporatebond indices for which maturity dates approximate the timing of the expected future benefit payments.
The retirement benefit plan of certain subsidiaries of the Company is a point-based benefits system, and,
therefore, the rate of compensation increase has not been included in computing the benefit obligations.
The expected long-term rate of return on plan assets is derived proportionally from return assumptions
determined for each of the major asset classes. The return expectations for each of the asset classes are basedlargely on assumptions about economic growth and inflation, which are supported by long-term historical data.
The estimated long-term rate of return is based on an asset allocation of equity securities of 26.0%, debt
securities of 54.0%, life insurance company general accounts of 18.0% and other short-term investments of
2.0%.
The plan investment strategy of certain subsidiaries of the Company is to maintain actual asset weightings
within a preset range of target allocations. The plan investment strategy of certain subsidiaries of the Company
is broadly diversified, consisting primarily of equity and debt securities. Certain subsidiaries of the Company
believe these ranges represent an appropriate risk profile for the planned benefit payments of the plans basedon the timing of the estimated benefit payments.
The asset allocation as of March 31, 2021 and 2020 was as follows:

Equity securities
Debt securities
Life insurance company general accounts
Real estate
Other short-term investments

2021

2020

48.8%
28.6%
7.5%
6.5%
8.6%

44.7%
31.1%
9.3%
3.2%
11.7%

The target allocation percentages are reviewed and approved by the Pension Committee. The actual allocationsfor 2021 and 2020 are different from the target allocation percentages primarily because Wacoal Corp.
maintained additional equity securities within a separate plan asset which is assigned to the plan based on anagreement between Wacoal Corp. and its employees and is not governed by the Pension Committee. As such,the actual allocation percentage of equity securities to the total plan assets is higher than the target allocation
and, similarly, the actual allocation for some other types of assets is lower than the target allocation.
The following tables present the plan assets of certain subsidiaries of the Company using the fair value
hierarchy as of March 31, 2021 and 2020. The fair value hierarchy has three levels based on the reliability of
the inputs used to determine the fair value. For references to each level, see Note 21.

127

2021

Level 1

Assets evaluated by other than net asset value
per share
Equity securities:
Japanese companies
Foreign companies
Debt securities:
Corporate bonds
Foreign government bonds
Life insurance company general accounts
Other types of investments:
Other short-term investments
Assets evaluated by net asset value per share (a)Equity securities:
Pooled funds (b)Debt securities:
Pooled funds (c)Other types of investments:
Hedge funds (d)Pooled funds (e)
Total

2020
Assets evaluated by other than net asset value
per share
Equity securities:
Japanese companies
Foreign companies
Debt securities:
Foreign government bonds
Life insurance company general accounts
Other types of investments:
Other short-term investments
Assets evaluated by net asset value per share (a)Equity securities:
Pooled funds (b)Debt securities:
Pooled funds (c)Other types of investments:
Hedge funds (d)Pooled funds (e)TotalMillions of Yen
Level 2
Level 3

¥ 10,934

Total¥ 10,934
¥

81
3,255

81
112
3,255

1,828

1,828

112

7,084
7,526
3,671
8,724
¥ 11,046¥ 5,164

Level 1Millions of Yen
Level 2
Level 3

¥ 9,70743¥ 43,215

Total

¥

216

9,707
43

¥ 3,773

216
3,773

2,209

2,209
5,227
8,145
3,634
7,510

¥ 9,966¥ 5,982¥ 40,464(a) Certain assets evaluated by net asset value per share (or its equivalent) are not categorized in the fairvalue hierarchy. Total amounts in the above table are presented to reconcile the amounts in the fairvalue hierarchy to the amounts stated on the consolidated balance sheets.
(b) This class includes common stock of approximately 51% Japanese companies and 49% foreigncompanies as of March 31, 2021 and 52% and 48%, respectively, as of March 31, 2020.

128

(c) This class includes approximately 89% of foreign government bonds and 11% of corporate bonds
investments as of March 31, 2021 and 83% and 17%, respectively, as of March 31, 2020.
(d) This class consists of hedge funds that invest in both securities and equity securities as of March 31,
2021 and 2020.
(e) This class includes approximately 22% corporate bonds, 1% common stock of Japanese companies,
24% common stock of foreign companies, 32% real estate and 21% other short-term investments as ofMarch 31, 2021. This class includes approximately 20% corporate bonds, 0% common stock ofJapanese companies, 29% common stock of foreign companies, 17% real estate and 34% other shortterm investments as of March 31, 2020.
Equity securities and debt securities presented in Level 1 are primarily valued using a market approach basedon the quoted market prices of identical instruments. Life insurance company general accounts categorized in
Level 2 include contracts with insurance companies with guaranteed rates of return and capital, and thosevalues are based on the sum of principal amount and return. Pooled funds are valued using the net asset value
per share provided by the administrator of the fund.
The funding policy for the funded plans of certain subsidiaries of the Company is to contribute amounts
computed in accordance with actuarial methods accepted by Japanese tax law. Certain subsidiaries of theCompany expect to contribute ¥571 million to their plans in the year ending March 31, 2022.
The following benefit payments, which reflect expected future services, are expected to be paid:
Millions of
Yen

Year Ending March 31
2022
2023
2024
2025
2026
Thereafter

¥

2,194
2,404
2,129
2,184
2,198
10,764

Defined Contribution Plan – Certain subsidiaries of the Company have defined contribution plans. The
amounts of cost recognized for their contributions to the plan were ¥327 million, ¥407 million and ¥394
million for the years ended March 31, 2021, 2020 and 2019, respectively.
Termination Plan for Directors – The Company previously had, and certain subsidiaries of the Company
currently have, termination plans for directors. Payment of termination benefits to directors is made in a lumpsum upon termination and requires the approval of the shareholders before payment. In June 2005, theCompany rescinded its termination plan for directors upon the approval of its shareholders. The amount ofbenefits for each individual was fixed as of June 29, 2005 and will remain frozen until the retirement of each
respective director. Outstanding liabilities of ¥346 million and ¥344 million as of March 31, 2021 and 2020,
respectively, were recorded in other long-term liabilities. A certain subsidiary has plans for its directors andrecorded a liability for termination benefits for directors at the amount that would be needed if all directors
were to resign at each balance sheet date in accordance with the guidance for determination of vested benefit
obligations for a defined benefit pension plan.
13.

COMMITMENT AND CONTINGENT LIABILITIESThe Company entered into a construction supervision and construction contract in the amount of ¥4,290
million, in connection with a new logistics center that will be built next to the Moriyama Distribution Center inMoriyama, Shiga on March 16, 2020.
The Company had contractual obligations of ¥3,390 million as of March 31, 2021.

129

Future payments of contractual obligations as of March 31, 2021 were as follows:
Millions of
Yen

Year Ending March 31

14.

2022
2023

¥ 3,200
190

Total¥ 3,390SHARE-BASED COMPENSATIONThe Company adopted an annual stock option plan in the year ended March 31, 2009. Under the stock option
plan, the Company granted shares of its common stock to directors of the Company, excluding outside
directors and directors of the Company's wholly-owned subsidiary, Wacoal Corp., in the years ended March
31, 2021, 2020 and 2019. The Company believes that such awards better align the interests of its directors withthose of its shareholders by sharing both risk and return from fluctuations in stock prices and giving
motivation to enhance corporate value. Each stock option is exercisable to acquire 100 shares of theCompany's common stock at ¥1 per share (for stock option granted prior to September 1, 2017, it isexercisable to acquire 500 shares of the Company's common stock). The compensation cost is measured at fairvalue on the grant date. Options vest over one year in proportion to the services rendered by the directors, andare exercisable from the day after the date of retirement up to (i) 20 years from the grant date or (ii) 5 years
from the day after the date of retirement, whichever is earlier.
The fair value of the options is estimated by using the Black-Scholes option-pricing model with the following
assumptions.
Expected dividend yield is based on the actual payout of dividends in the last fiscal year and the closing priceof the Company's common stock on the grant date. Expected volatility is based on the historical volatility of
the Company's share price over the most recent period commensurate with the expected term of the Company's
stock options. The risk-free interest rate is based on the Japanese government bond yield curve in effect at thetime of grant for a period commensurate with the expected term of the Company's share options. The expected
term of options granted is based on the average remaining service period of directors, assuming that those whoare granted options will render service until the stated retirement and they will exercise options immediately
after their retirement.

Expected dividend yield
Expected volatility
Risk-free interest rate
Expected term

2021

2020

2019

3.0%
23.6%
(0.2)%
3.6 years

2.6%
25.0%
(0.2)%
4.0 years

2.2%
24.6%
(0.1)%
3.7 years

A summary of stock option activities under the plan for the years ended March 31, 2021 and 2020 was asfollows:
Yen

Outstanding as of April 1, 2020
GrantedExercised
Outstanding as of March 31, 2021
Exercisable as of March 31, 2021

Millionsof YenShares

WeightedAverage
Exercise
Price

Years
WeightedAverage
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

255,900
35,70018,500273,100
18,300¥1
1
1
1
113.61 years
2.84 years

¥670
45

130

Yen

Outstanding as of April 1, 2019
GrantedExercised
Outstanding as of March 31, 2020
Exercisable as of March 31, 2020

Millionsof YenShares

WeightedAverage
Exercise
Price

Years
WeightedAverage
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

249,900
28,50022,500255,900
36,800¥11
1
1
112.95 years
3.23 years

¥600
86

The total intrinsic value of options exercised was ¥41 million, ¥62 million and ¥33 million as of the years
ended March 31, 2021, 2020 and 2019, respectively.
The total compensation costs recognized for the years ended March 31, 2021, 2020 and 2019 were ¥63
million, ¥71 million and ¥62 million, respectively. The total recognized tax benefits related thereto for theyears ended March 31, 2021, 2020 and 2019 were ¥19 million, ¥22 million and ¥19 million, respectively.
The weighted-average grant date fair values of options granted for the years ended March 31, 2021, 2020 and2019 were ¥1,768, ¥2,516 and ¥3,005, respectively.
As of March 31, 2021, there was ¥11 million in total unrecognized compensation cost related to nonvested
share-based compensation arrangements granted under the plan. That cost is expected to be recognized overthree months.
15.

EQUITYJapanese companies are subject to the Companies Act of Japan (the "Companies Act"). The significant
provisions in the Companies Act that affect financial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to
the year-end dividend upon resolution at the shareholders' meeting. Additionally, for companies that meetcertain criteria including (1) having a Board of Directors, (2) having independent auditors, (3) having an
Audit and Supervisory Board, and (4) the term of service of the directors being prescribed as one year
rather than the normal two-year term by its articles of incorporation, the Board of Directors may declare
dividends (except for dividends-in-kind) at any time during the fiscal year if the company has prescribedso in its articles of incorporation. The Company meets all the above criteria and, accordingly, the Boardof Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal year.
The Companies Act permits companies to distribute dividends-in-kind (noncash assets) to shareholders
subject to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if
the articles of incorporation of the companies so stipulate. The Companies Act provides certain
limitations on the amounts available for dividends or the purchase of treasury stock. The limitation isdefined as the amount available for distribution to the shareholders, but the amount of net assets after
dividends must be maintained at no less than ¥3 million.

131

(b) Increases/Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus), depending on the equity account charged
upon the payment of such dividends, until the total of the aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserve may bereversed without limitation. The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings can be transferred among the accounts under certain conditions upon resolution of theshareholders.
(c) Treasury Stock
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to theshareholders which is determined by a specific formula.
16.

OTHER COMPREHENSIVE (LOSS) INCOME
Changes in the components of accumulated other comprehensive income, including amounts attributable to noncontrolling interests were as follows:
Millions of Yen
2020

2021
Foreign
Currency
Translation
Adjustments
Balance at the beginning of the year (after-tax)
Cumulative effects (net of tax) of the adoption of
ASU No. 2016-01 and 2018-03
Amount arising during the year:
Pre-tax amountTax credit
Net amount
Reclassification adjustments:
Pre-tax amountTax credit
Net amount
Other comprehensive loss (income) attributable to noncontrollinginterests (after-tax)¥ (1,033)

Balance at the end of the year (after-tax)¥ 1,770

Unrealized
Gain onSecurities¥

PensionLiability
Adjustments

Foreign
Currency
Translation
Adjustments¥ (4,594)¥ 1,551

Unrealized
Gain onSecurities¥

2019
PensionLiability
Adjustments

Foreign
Currency
Translation
Adjustments

Unrealized
Gain onSecurities

PensionLiability
Adjustments¥ (5,679)¥ 2,274¥ 27,424¥ (1,101)(27,320)
2,685
(37 )
2,648

4,067
(1,229)2,838(2,529)(3)(2,532)

265
(140)
125

(1,056)
(303)
753
155
¥

(795 )
45(750 )

1,357
(397)
960

(5)

(52 )

¥ (1,008)¥ (1,033)

(10 )
3
(7 )

(6,866)
2,079(4,787)

(140)
43
(97 )

202
(2)
200

27
¥

¥ (4,594)¥ 1,5519¥¥ (5,679)

Reclassification adjustments (pre-tax) of unrealized gain or loss on securities are included in "Gain (loss) on sales, exchange, and valuation of marketable securities and investments – net" in the consolidated statements of income.
Reclassification adjustments (pre-tax) of pension liability adjustments are included in "Other – net" in the consolidated statements of income as the net periodic benefit costs.
17.

INCOME TAXESThe Companies are subject to a number of different taxes based on income. The effective income tax rates differed from the normal effective statutory tax rates for the following reasons for the years ended March 31, 2021, 2020 and 2019:
2021

2020

2019

Normal Japanese effective statutory tax rates
Increase (decrease) in taxes resulting from:
Permanently nondeductible expenses
Change in valuation allowance
Undistributed earnings of associated companies
Differences in foreign subsidiaries' tax rate
Tax exemption
Unrecognized tax benefits
Impairment losses on goodwill
Changes in Japanese income tax rates
Other – net

30.6%

30.6%

30.6%

2.4
(1.8)
(0.2)
0.1
(0.7)
(0.6)
7.4
(0.2)
0.8

7.3
10.3
2.3
(7.2)
(2.0)
(1.0)
1.3
(0.1)
(8.2)

22.9
25.5
3.9
(27.3)
(2.9)
1.4
60.1
(0.4)
1.2

Effective tax rates

37.8%

33.3%

115.0%

132

The approximate effect of temporary differences and tax loss carryforwards that gave rise to deferred tax
balances as of March 31, 2021 and 2020 were as follows:
Millions of Yen
2021
2020
DeferredDeferredDeferredDeferred
Tax
Tax
Tax
Tax
AssetsLiabilities
AssetsLiabilities
Refund liabilities
Allowance for doubtful receivables
Accruals not currently deductible
Inventory valuation
Accrued bonuses
Advanced depreciation on property, plant andequipment
Undistributed earnings of associated companies
Net unrealized gain on marketable securities andinvestments
Net realized gain on exchange of investments
Capitalized supplies
Enterprise taxes
Accrued vacation
Operating leases right-of-use assets
Operating lease liabilities
Asset retirement obligation
Prepaid pension expense
Liability for termination and retirement benefit
Return assets
Property, plant and equipment
Tax loss carryforwards
Intangible assets
Other temporary differences
Total
Valuation allowance

¥

598
26
167
1,176
790

Total

¥ 11,021

¥

¥

734
15
205
1,089
882

1,842
2,496

¥

1,839
2,485

8,841
416

5,848
416

94
62
774

137
352
741
4,069

3,580

4,159
257

3,616
250
2,140

720

646

611
184

266

1,517
3,025
677
13,968(2,947)

1,591
2,388
1,213
463
21,664¥ 21,664

36
12,647(2,858)
¥

9,789

1,151
277
16,582¥ 16,582

The valuation allowance decreased by ¥89 million and decreased by ¥681 million for the years ended March
31, 2021 and 2020, respectively.
The Companies also utilized ¥413 million and ¥245 million of tax loss carryforwards, and recognized tax
benefits of ¥77 million and ¥29 million for the years ended March 31, 2021 and 2020, respectively.

133

As of March 31, 2021, certain subsidiaries had tax loss carryforwards which are available to offset futuretaxable income of such subsidiaries and expire as follows:
Millions of
Yen

Year Ending March 31
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Thereafter

¥

396
526
355
709
1,417
570
155
1,005
888
1,029
3,260

Total

¥ 10,310

There was no portion of undistributed earnings of foreign subsidiaries and foreign corporate joint ventures
which was deemed to be permanently reinvested as of March 31, 2021 and 2020.
A reconciliation of beginning and ending amounts of unrecognized tax benefits is as follows:
2021

Millions of Yen
2020

Balance at the beginning of the year
Additions based on tax positions related to the current year
Addition based on tax position related to the previous years
Reductions for tax positions of prior years

¥2
1

¥ 101
1

Balance at the end of the year

¥3

2019
¥

5
60
36

(100)
¥

2

¥ 101

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is ¥3
million, ¥2 million and ¥101 million as of March 31, 2021, 2020 and 2019, respectively.
The Companies recognize interest and penalties accrued related to unrecognized tax benefits in income taxes
in the consolidated statements of income. Total amounts of interest and penalties recognized in the
consolidated statements of income for the years ended March 31, 2021, 2020 and 2019 were not material.
The Companies file income tax returns in Japan and various foreign tax jurisdictions. In Japan, the Companies
are no longer subject to regular income tax examinations by the tax authorities for years before 2017, with few
exceptions. For other countries, the Companies are no longer subject to regular income tax examinations by
the tax authorities for years before 2010, with few exceptions. For certain subsidiaries in Japan, the UnitedStates, and Asia, the transfer pricing examinations for the fiscal years ended March 31, 2007, 2010 and 2016
were completed respectively.
18.

REVENUEThe Companies focuses on sales of innerwear (women's foundation garments and lingerie, nightwear andchildren's underwear), sportswear, and other textile products and related products ("Products"), and ourcustomers include retail and wholesale distributors and consumers in Japan and overseas. See Note 23 forrevenue information for each segment, by each product and service, and by geographic area.

134

Revenue from sales of our products is recognized when performance obligations are satisfied, which is upondelivery of the products. We invoice when we satisfy the performance obligation and receive cash payment
shortly thereafter.
The Companies' revenue is recognized for transactions, net of any trade discounts or rebates given. We
generally provide a right of return to our customers. In order to estimate the transaction price, provision for
expected returns is deducted from revenue based on historical returns.
Contract liabilities from contracts with customers consists mainly of customer royalty points. Some ofsubsidiaries have customer royalty programs as part of the promotion and provide royalty points to customers
when they purchase the products. The points provided to customers are identified as performance obligations,which are satisfied when the points are redeemed for the products. The unredeemed points as of the end ofyears are recorded as contract liabilities, which are estimated based on actual redemption amounts fromprevious fiscal year. Contract liability is included in other current liabilities, and the amount of contract
liabilities as of March 31, 2021 and 2020 are as follows:
Millions of Yen
2021
2020
Contract liabilities¥1,275¥917

Revenue recognized for the years ended March 31, 2021 and 2020, which had been included in the contract
liabilities balance at beginning of year were ¥661 million and ¥494 million.
19.

EARNINGS PER SHARE
Basic net income attributable to Wacoal Holdings Corp. per share has been computed by dividing net income
attributable to Wacoal Holdings Corp. by the weighted-average number of common shares outstanding during
each year. Diluted net income attributable to Wacoal Holdings Corp. per share assumes the dilution that would
occur if share-based options to issue common stock were exercised.
The weighted-average number of common shares outstanding used in the computations of basic net income
attributable to Wacoal Holdings Corp. per share was 62,406,826 shares, 63,989,561 shares and 66,143,405
shares for the years ended March 31, 2021, 2020 and 2019, respectively. The weighted-average number ofdiluted common shares outstanding used in the computations of diluted net income attributable to Wacoal
Holdings Corp. per share was 62,670,759 shares, 64,242,244 shares and 66,393,127 shares for the years ended
March 31, 2021, 2020 and 2019, respectively.

20.

FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK
Fair Value of Financial Instruments
The carrying amounts and fair values of financial instruments as of March 31, 2021 and 2020 were as follows:
Millions of Yen
2021
2020
Carrying
Fair
Carrying
Fair
AmountValue
AmountValue
Assets:Marketable securities
Investments¥

Total assets

253
51,603¥255
51,603¥656
43,904¥657
43,908¥ 51,856¥ 51,858¥ 44,560¥ 44,565

Liabilities:
Long-term debt including current portion

¥

1,533

¥

1,532

¥

85

¥

85

Total liabilities

¥

1,533

¥

1,532

¥

85

¥

85

135

The carrying amounts of all other financial instruments approximate their estimated fair values because of theshort maturity of those instruments. For information about fair values of foreign exchange contracts andcurrency swaps, see Note 21.
Marketable Securities and Investments – The fair value of these held-to-maturity debt securities are based on
Level 1 inputs. For all other investments included in marketable securities and investments, see Notes 3 and21.
Long-Term Debt – The fair values for long-term debt are estimated by discounted cash flow analysis, using
rates currently available for similar types of borrowings with similar terms and remaining maturities. The
estimated fair value is based on Level 2 inputs.
Limitations – Fair value estimates are made at a specific point in time based on relevant market informationand information about the financial instruments. These estimates are subjective in nature and involve
uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes
in assumptions could significantly affect the estimates.
Concentration of Credit Risk – The Companies' business consists primarily of sales of women's intimate
apparel to a large number of diverse customers in the Japanese retail industry, which include well-establisheddepartment stores, general merchandise stores and other general retailers and specialty stores.
21.

FAIR VALUE MEASUREMENTS
The guidance for fair value measurements defines fair value as the price that would be received to sell an asset
or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or
liability in an orderly transaction between market participants at the measurement date. The guidance
establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value as follows:
Level 1

Inputs are quoted prices in active markets for identical assets or liabilities.

Level 2

Inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for
identical or similar assets or liabilities in markets that are not active, inputs other than quoted
prices that are observable, and inputs that are derived principally from or corroborated byobservable market data by correlation or other means.

Level 3

Inputs are unobservable.

136

Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and 2020 were as
follows:
2021

Level 1

Assets:Marketable securities
Mutual funds
Investments:
Equity securities
Mutual funds
Total
Derivative instruments:
Foreign exchange contracts¥

Millions of Yen
Level 2
Level 3

31

Total

¥

48,92091
49,011¥ 2,592

51,51291
51,603

2,592¥ 53

Total assets¥ 49,042

Liabilities:
Derivative instruments:
Foreign exchange contracts
Currency swap
Total
Contingent consideration

¥ 53

53
¥ 2,592¥ 23

Total liabilities

¥ 23

2020

Level 1

Assets:Investments:
Equity securities
Mutual funds
Total
Derivative instruments:
Foreign exchange contracts¥ 40,920
94
41,014¥ 51,687¥

23¥ 2,901¥

2,901¥ 2,901¥

2,924

Millions of Yen
Level 2
Level 3

¥ 2,561
2,561

Total

¥ 43,481
94
43,575¥ 57

Total assets¥ 41,014

Liabilities:
Derivative instruments:
Foreign exchange contracts
Currency swap
Total
Contingent consideration

¥ 57

57
¥ 2,561

¥ 24
72
96

¥ 43,632

¥

24
72
96
3,874

¥

3,970

¥ 3,874

Total liabilities

¥ 96

31

¥ 3,874

Investments presented in Level 1 are valued using unadjusted quoted market prices in active markets with
sufficient volume and frequency of transactions. Bonds presented in Level 2 are valued by financial
institutions using quoted market prices for identical instruments in markets that are not active. Mutual funds
presented in Level 2 are valued by financial institutions based on quoted prices in an inactive market for
identical instruments which are included in the mutual funds.
As discussed in Note 3, the Companies record impairment charges on debt securities if a decline in fair valueof debt securities is determined to be other than temporary.

137

Foreign exchange contracts and currency swaps presented in Level 2 are valued by financial institutions basedon market data in both active and inactive markets.
Equity securities in Level 3 are non-marketable equity securities and are valued by the comparable multiple
valuation method using financial indicators as inputs or other appropriate valuation methods. If unobservable
inputs were changed to reflect reasonably possible alternative assumptions, fair values would not change
significantly. Contingent consideration is valued by the Monte Carlo simulation using unobservable inputs. If
discount rates or volatility fall, the debt will increase. Out of the contingent consideration, ¥1,262 million inconsideration that has been fixed is included in the accounts payable on the consolidated balance sheet.
The tables below show the change in assets presented in Level 3 that are continuously assessed at fair value asof March 31, 2021 and 2020:
Millions of Yen
2021
Contingent
Investment
Consideration
Balance at the beginning of the year
Sell/payment
Purchase/assumed in acquisition
Total gains or losses for the period:(Loss) gain on sale, exchange and valuation of marketablesecurities and investments – net
Selling, general and administrative expenses
Foreign currency translation adjustments¥ 2,561(18 )¥ 3,874(1,061)

Balance at the end of the year

¥ 2,592¥ 2,901

Unrealized (loss) gain included in earnings for assets andliabilities still held as of March 31, 2021

¥

¥

49
64
24

49

64

Millions of Yen
2020
Contingent
Investment
Consideration
Balance at the beginning of the year
Purchase/assumed in acquisition
Total gains or losses for the period:(Loss) gain on valuation of marketable securities andinvestments – net
Selling, general and administrative expenses
Foreign currency translation adjustments¥ 2,287276

Balance at the end of the year

¥ 2,561¥ 3,874

Unrealized (loss) gain included in earnings for assets andliabilities still held as of March 31, 2020¥

¥ (304 )138¥ 4,172(2 )(304 )
6(2 )Information about valuation techniques and significant unobservable inputs used for Level 3 assets
continuously measured at fair value for the years ended March 31, 2021 and 2020 is as follows:

March 31, 2021

Millionsof YenFair
Value

Contingent consideration¥2,901March 31, 2020

Millionsof YenFair
Value

Contingent consideration¥3,874

Valuation
TechniquePrincipal Unobservable
Input

Range

Monte Carlosimulation

Discount rate

4.5%

Volatility

20.0%

Valuation
TechniquePrincipal Unobservable
Input

Range

Monte Carlosimulation

Discount rate

5.2%

Volatility

15.0%

Assets Measured at Fair Value on a Nonrecurring Basis
Assets measured at fair value on a nonrecurring basis as of March 31, 2021 and 2020 were as follows:
Millions of Yen
2021

Level 1

Level 2Land
Buildings and structures
Machinery and equipment
Goodwill (Note 8)
Software (Note 8)

Level 3
¥

172
38

Total
¥

172
38

9,398

Impairment
Losses
¥

9,398

(526)
(559)
(51 )
(2,673)(12 )¥ (3,821)
Millions of Yen
2020

Level 1

Buildings and structures
Machinery and equipment
Goodwill (Note 8)
Trademarks (Note 8)
Software (Note 8)

Level 2

Level 3

Total

¥ 109
324

¥ 109
324

489
14

489
14

Impairment
Losses
¥

(162)
(607)
(217)
(191)
(65 )

¥ (1,242)139

As of the end of March 31, 2020, the carrying amount of A Tech's buildings, machinery and equipment, andsoftware under the Wacoal Business (Overseas) were written down to their fair values, resulting in therecognition of an impairment charge of ¥162 million, ¥607 million, and ¥65 million, respectively. The
impairment arose due to the revision of the future business plan made in response to a decrease in sales. To
measure the fair values of A Tech's reporting units, the Companies used the discounted cash flows method andincorporated relevant unobservable inputs, such as management's assumptions about future cash flows and an
appropriately risk-adjusted discount rate, which reflected management's estimate of assumptions that market
participants would use in pricing the asset in an arm's length transaction as of the measurement date. Future
cash flows were based on management's cash flow projections for the future five years, and after five years,
future cash flows were estimated using a growth rate of 2.0%. Management's cash flow projections weredeveloped using estimates for expected future revenue growth rates, profit margins and working capital levelsof the reporting units. The risk-adjusted discount rate represents the weighted-average cost of capital (WACC).
As of the end of March 31, 2020, the carrying amount of G Tech's goodwill under the Wacoal Business(Overseas) was fully written off, resulting in an impairment charge of ¥217 million. The impairment is due tothe revision of the future business plan made in response to a decrease in sales. To measure the fair values of G
Tech's reporting units, the Companies used discounted cash flows method and incorporated relevant
unobservable inputs, such as management's internal assumptions about future cash flows and appropriately
risk-adjusted discount rates, which reflected management's estimate of assumptions that market participants
would use in pricing the asset in an arm's length transaction as of the measurement date.
As of the end of March 31, 2020, Peach John's trademarks with a carrying amount of ¥680 million were
written down to their fair values of ¥489 million, resulting in the recognition of an impairment charge of ¥191
million for the year ended March 31, 2020. The impairment is due to the decline in their fair value, which wascaused by a downturn in consumption due to general market conditions. To measure the fair value of the
trademarks, the Companies used the relief-from-royalty method and incorporated relevant unobservable inputs,
such as management's assumptions about future cash flows, the rate of royalty, and an appropriately riskadjusted discount rate, which reflected management's estimate of assumptions that market participants would
use in pricing the asset in an arm's length transaction as of the measurement date. Future cash flows werebased on management's cash flow projections for the future three years, and after three years, future cash flows
were estimated using a perpetuity growth rate from 0% to 3.0%. Management's cash flow projections weredeveloped using estimates for expected future revenue growth rates, profit margins and working capital levelsof the reporting units. The royalty rate used for the valuation was based on the actual royalty ratio used intransactions. The risk-adjusted discount rate represents a weighted-average cost of capital (WACC) adjusted
for inherent risk spread.
As of the end of March 31, 2021, the carrying amount of the Company's land, buildings and structures under
the Wacoal Business (Domestic) were written down to their fair values, resulting in the recognition of an
impairment charge of ¥526 million and ¥99 million, respectively. This is due to the fact that, as a result of
determining the necessity of impairment of fixed assets due to a change in the purpose of ownership of someasset groups owned, it was determined that the fair value was lower than the carrying amount. To measure thefair values of the Company's reporting units, the Company used appraisals prepared by independent third party
appraisers based on recent transactions involving sales of similar assets.
As of the end of March 31, 2021, the carrying amount of Wacoal Corp.'s buildings and structures, machineryand equipment, subsidiaries' buildings and structures, machinery and equipment under the Wacoal Business(Domestic) were fully written off, resulting in an impairment charge of ¥394 million, ¥29 million, ¥41 millionand ¥21 million, respectively. The impairment is due to the decline in their fair value, which was caused by adownturn in sales. To measure the fair values of Wacoal Corp. and subsidiaries' reporting units, the Companies
used discounted cash flows method and incorporated relevant unobservable inputs, such as management's
internal assumptions about future cash flows and appropriately risk-adjusted discount rates, which reflected
management's estimate of assumptions that market participants would use in pricing the asset in an arm's
length transaction as of the measurement date.

140

As of the end of March 31, 2021, the carrying amount of WACOAL EUROPE LTD.'s goodwill under the
Wacoal Business (Overseas) was written off, in light of the impact of COVID-19 and the customs clearance
expenses incurred in connection with Brexit in the United Kingdom, we reassessed the fair value of goodwill
based on our outlook of our business, and recorded the impairment charges of ¥2,673 million.
To measure the fair values of WACOAL EUROPE LTD.'s reporting units, the Companies used discounted
cash flows method and incorporated relevant unobservable inputs, such as management's internal assumptions
about future cash flows and appropriately risk-adjusted discount rates, which reflected management's estimate
of assumptions that market participants would use in pricing the asset in an arm's length transaction as of themeasurement date. Future cash flows were based on the management's cash flow projections for the future five
years, and after five years, future cash flows were estimated using the perpetuity growth rate of 2.0%.
Valuation process:
The valuation process involved in Level 3 measurements for applicable assets and liabilities is governed by thevaluation policies and procedures, including evaluation method for fair value measurements, pre-approved by
the Companies. Based on the policies and procedures, either personnel from the accounting division or
personnel in charge of valuation determine the valuation model to be utilized to measure each asset andliability at fair value. We engage independent external valuation experts to assist us in the valuation process
for certain assets over a specific amount, and the results of their valuations are reviewed by the responsible
personnel. All of the valuations, including those performed by the external experts, are reviewed and approvedby management of the Company before being recorded in the general ledger.
Information about valuation techniques and significant unobservable inputs used for Level 3 assets measured
at fair value on a nonrecurring basis for the year ended March 31, 2020 is as follows:

March 31, 2020

22.

Millionsof YenFair
Value

Buildings andstructures
Machinery andequipment
Software¥109

Trademarks

¥489

324

Valuation
TechniquePrincipal Unobservable Input
Discount rate

Expected present
value method

14
Relief-fromroyalty method

Range
10.0%

Short-term revenue growth rates(within five years)
Growth rate(over five years)(31.1)% - 102.5%

Discount rate

10.3% - 13.9%

Royalty rate
Short-term revenue growth rates(within three years)
Perpetuity growth rate(over three years)

3.0%(14.8)% - 24.3%

2.0%

0% - 3.0%

DERIVATIVE INSTRUMENTS
Risk Management Policy – The Companies are exposed to the risk of changes in foreign currency exchange
rates. Derivative instruments are used to manage such risk. Derivative instruments are used based on Company
policy and administrative provisions. There were no derivative instruments used for the purpose of speculative
trading. The Companies consider the related credit risk to be low since these derivative instruments areprovided by financial institutions with international credibility.
Foreign Exchange Risk – Assets and liabilities denominated in foreign currencies, which are primarily related
to international business, are exposed to the risk of changes in foreign currency exchange rates. Foreignexchange contracts and currency swaps are used to mitigate such risk.

141

Derivative Instruments Not Designated as a Hedge – Foreign exchange contracts and currency swaps areclassified as derivative instruments, which are not designated as a hedge since these derivative instruments do
not qualify for hedge accounting. These derivative instruments are used to mitigate the risk of changes inforeign currency exchange rates, and the changes in fair value of such derivative instruments are recorded inearnings immediately.
Notional contract amounts of derivative instruments that are not designated as hedges as of March 31, 2021
and 2020 were as follow:
Millions of Yen
2021
2020
Foreign currency exchange
Currency swaps

¥713
332

¥2,786695

The amounts of derivative instruments at fair value in the consolidated balance sheets in consolidated balance
sheets as of March 31, 2021 and 2020 were as follow:

Assets:Foreign currency exchange
Liabilities:
Foreign currency exchange
Currency swaps

Balance Sheets Location

Millions of Yen
2021
2020

Other current assets

¥53

¥57

Other current liabilities
Other current liabilities

¥23

¥24
72

The effect of derivative instruments in consolidated statements of income for the years ended March 31, 2021,
2020 and 2019 were as follow:

Foreign currency exchange
Currency swaps
23.

Statements of Income Location

2021

Millions of Yen
2020

2019

Other – net
Other – net

¥ 61
20

¥ 57
(36)

¥ 45
(5)

SEGMENT INFORMATION
Operating Segment Information
The Companies have three reportable segments: "Wacoal Business (Domestic)," "Wacoal Business(Overseas)," and "Peach John Business," which are based on their locations and brands. These segments
represent components of the Companies for which separate financial information is available and for which
operating income (loss) is reviewed regularly by the chief operating decision-maker in deciding how toallocate the Companies' resources and in assessing their performance. The accounting policies used for thesereportable segments are the same as those described in the summary of significant accounting policies in Note
1.
Starting from the current consolidated first quarter, information on Ai Co., Ltd., which was previously
presented in our "Wacoal Business (Domestic)" segment and "Peach John Business" segment, is now reflected
and presented in our "Other" segment following review of certain management classification of performancewithin the Companies. As a result of our assessment on quantitative criteria, "Peach John Business," which had
been previously presented in our "Other" segment, has satisfied the criteria and accordingly has been presented
as a separate operating segment from the current consolidated second quarter. Part of sales of our Peach John
brand products sold in China, which were previously recorded under this "Wacoal Business (Overseas)"segment, are now recorded under our "Peach John Business" segment starting with the current fiscal year. The
segment information for the previous fiscal year has been prepared based on the segments reported for thecurrent fiscal year.

142

The "Wacoal Business (Domestic)" segment primarily produces and sells innerwear (consisting of foundation, lingerie, nightwear and children's innerwear), outerwear, sportswear
and hosiery. The "Wacoal Business (Overseas)" segment produces and sells innerwear (consisting of foundation, lingerie, nightwear and children's innerwear), outerwear, sportswear,
and other textile-related products. The "Peach John Business" segment produces and sells innerwear (consisting of foundation, lingerie, nightwear), outerwear, and other textile-related
products, which are sold under the "Peach John" brand. The "Other" produces and sells innerwear (consisting of foundation, lingerie, nightwear and children's innerwear), outerwear,
other textile-related products, and mannequins and also engages in construction of stores and interior design.
Information about operating results and assets for each segment as of and for the years ended March 31, 2021, 2020 and 2019 is as follows:
Millions of Yen
2021
Net sales:
External customers
Intersegment
Total
Operating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Impairment charges on property, plant and equipment
Impairment charges on goodwill
Impairment charges on other intangible assets
Total
Operating (loss) income
Total assets and capital expenditures:
Total assets
Capital expenditures

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John
Business

Other

Elimination¥

86,133754
86,887¥ 41,355
8,769
50,124¥ 12,200219
12,419¥ 12,516
3,827
16,343¥ (13,569)(13,569)

81,461
3,711
1,088

48,086
1,943
25
2,673

10,491
325

16,901
149
23(13,569)

86,260627

52,727(2,603)

12
10,828
1,591

17,073(730)(13,569)

285,421
4,203

87,252
1,097

11,094122

15,724
182(76,730)

322,761
5,604

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John
Business

Other

Elimination

Consolidated¥ 106,112
1,107
107,219¥ 49,808
10,57060,378¥ 11,224
214
11,438¥ 19,616
5,110
24,726¥ (17,001)(17,001)

97,561
3,575

11,215383

25,170149(17,001)

101,136
6,083

55,912
1,922
769
217
65
58,885
1,493

191
11,789(351)

25,319(593)(17,001)

237,394
4,594

86,292
2,106

9,751
129

18,435
152(74,184)

Consolidated¥ 152,204
152,204
143,370
6,128
1,136
2,673
12
153,319(1,115)

Millions of Yen
2020
Net sales:
External customers
Intersegment
Total
Operating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Impairment charges on property, plant and equipment
Impairment charges on goodwill
Impairment charges on other intangible assets
Total
Operating income (loss)
Total assets and capital expenditures:
Total assets
Capital expenditures143¥ 186,760
186,760
172,857
6,029
769
217
256
180,1286,632
277,6886,981

Millions of Yen
2019
Net sales:
External customers
Intersegment
Total
Operating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Impairment charges on property, plant and equipment
Impairment charges on goodwill
Impairment charges on other intangible assets
Total
Operating income (loss)

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John
Business

Other

Elimination¥ 109,219
1,170
110,389¥ 52,048
10,121
62,169¥ 11,543
268
11,811¥ 21,391
5,363
26,754¥ (16,922)(16,922)

100,186
3,465

56,025
1,585

11,615394

26,937
203

103,651
6,738

57,610
4,559

4,325
1,314
17,648(5,837)

195
27,335(581)

249,574
3,373

78,912
1,837

8,038
494

18,876
79

Total assets and capital expenditures:
Total assets
Capital expenditures

Consolidated¥ 194,201(16,922)(16,922)(73,633)

194,201
177,841
5,647
4,325
1,509
189,3224,879
281,767
5,783

The sum of the operating (loss) income of the reportable segments agrees to the operating income on the consolidated statements of income. For a reconciliation from operating (loss)
income to income before income taxes and equity in net income of affiliated companies, see other income (expenses) on the consolidated statements of income.
The Companies account for intersegment sales and transfers at cost plus a markup. Operating (loss) income represents net sales less operating costs and expenses.
Products and Services Information
Net sales information by product and service for the years ended March 31, 2021, 2020 and 2019 is as follows:

Innerwear:
Foundation and lingerieNightwear
Children's underwear
Subtotal
Outerwear/sportswear and others
Hosiery
Other textile goods and related products
Others
Total

2021

Millions of Yen
2020

2019

¥ 122,776
6,522
749
130,047¥ 144,933
7,459
1,014
153,406¥ 146,525
8,296
1,213
156,034

¥

¥

¥

8,836
918
5,354
7,049

¥ 152,204

12,746
1,563
7,545
11,500¥ 186,760

14,733
1,881
9,428
12,125¥ 194,201

144

Geographic Information
Information by major geographic area as of and for the years ended March 31, 2021, 2020 and 2019 is as follows:

Net sales:Japan
Asia and Oceania
Americas and Europe
Consolidated
Long-lived assets:Japan
Asia and Oceania
Americas and Europe
Consolidated

2021

Millions of Yen
2020

2019

¥ 109,464
16,301
26,439¥ 135,273
20,59630,891¥ 140,189
22,50931,503¥ 152,204¥ 186,760¥ 194,201¥ 41,198
3,536
4,304

¥ 44,014
4,034
4,035

¥ 45,257
4,810
3,203

¥ 49,758¥ 52,083¥ 53,270

Countries or areas are classified according to their geographical proximity.
Asia and Oceania includes East Asia, Southeast Asia, West Asia and Australia.
Net sales are attributed to countries or areas based on the location where sold.
Long-lived assets represent property, plant and equipment.
24.

SUBSEQUENT EVENTS(Dividend Declaration)
On May 14, 2021, the Board of Directors resolved to pay a cash dividend of ¥100 per 5 shares of common stock toholders of record as of March 31, 2021 (aggregate amount of ¥1,248 million).

145

VI. 【Stock-Related Administration for the Company】
Fiscal year

From April 1 to March 31

Ordinary General Meeting of
Shareholders

To be held in June

Record date

March 31

Record date for distribution of
surplusNumber of shares constituting
one unit
Purchase and sale of shares lessthan one unit

September 30
March 31

Office for handling business

100 shares(Special Account)
Osaka Securities Transfer Section
Mitsubishi UFJ Trust and Banking Corporation
6-3, Fushimi 3-chome, Chuo-ku, Osaka

Transfer agent(Special Account)
Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Forwarding office―――Handling charge for purchase
and SaleFree of charge

Method of public noticeSpecial benefit forshareholders(Notes)Public notice of the Company shall be in electronic form; provided that, public noticecannot be provided electronically due to an accident or unavoidable event, it shall be
published in Nihon Keizai Shimbun.
(i) Wacoal Essence Check (coupon for goods) shall be presented to the shareholders as
follows (with the date of determination of the shareholders entitled thereto being the endof March and September):- To shareholders holding 500 shares or more, but less than 1,500 shares:
Wacoal Essence Check worth JPY3,000 shall be presented twice a year.
- To shareholders holding 1,500 shares or more:
Wacoal Essence Check worth JPY5,000 shall be presented twice a year.
- To shareholders holding shares for three years or more:
Wacoal Essence Check worth JPY 1,000 shall be added to above.
(ii) Shareholder special discount shall be made for Wacoal products by means of catalogue
sales and internet sales as follows:- To shareholders holding 100 shares or more:
20% discount shall be made for the purchase of our products listed in catalogues
issued by Wacoal or internet sales; provided, however, that the total purchaseprice applicable for the discount shall be 1,000,000 yen (before discount) per year.

Our Articles of Incorporation prescribe that the shareholders holding shares constituting less than one unit of theCompany may not exercise any rights, except for the rights as prescribed under each item in Paragraph 2, Article 189of the Companies Act, the claim rights pursuant to the provisions of Paragraph 1, Article 166 of the same law, the rightto receive an allocation of share offerings and stock acquisition rights in proportion to the number of shares held, andthe right to request the sale of additional shares not constituting one unit.

146

VII. 【Reference Information on the Company】
1. 【Information on the Parent Company】
The Company does not have the parent company set out in Paragraph 1, Article 24-7 of the Financial Instruments and Exchange Act.

2. 【Other Reference Information】
The Company filed the following documents during the period from the commencing date of the current fiscal year, to the filing date of the Annual
Securities Report.
(1） Annual Securities Report andFiscal Year
From April 1, 2019
Filed with the Director of thethe attachments thereto, and(72st Fiscal Year)
to March 31, 2020
Kanto Local Finance Bureau on
Confirmation Letter
June 26, 2020(2） Internal Control Report and theattachments thereto(3） Quarterly Report andConfirmation Letter

Filed with the Director of the
Kanto Local Finance Bureau on
June 26, 2020
(First quarter of 73th
Fiscal Year)

From April 1, 2020
to June 30, 2020

(Second quarter of 73th From July 1, 2020
Fiscal Year)to September 30, 2020
(Third quarter of 73th
Fiscal Year)(4） Extraordinary Report

From October 1, 2020
to December 31, 2020

Filed with the Director of the
Kanto Local Finance Bureau on
August 12, 2020
Filed with the Director of the
Kanto Local Finance Bureau on
November 12, 2020
Filed with the Director of the
Kanto Local Finance Bureau on
February 12, 2021

Extraordinary Report on the Results of the Exercise of
Filed with the Director of the
Voting Rights at General Meeting of Shareholders pursuant Kanto Local Finance Bureau on
to Item 9-2, Paragraph 2, Article 19 of the Cabinet Office
June 29, 2020
Ordinance Concerning Disclosure of Corporate Affairs, etc.
Extraordinary Report on an Event which may have serious Filed with the Director of theeffects on the financial position, results of operation and
Kanto Local Finance Bureau on
cash flow status of a consolidated entity pursuant to Item 19, June 22, 2021
Paragraph 2, Article 19 of the Cabinet Office OrdinanceConcerning Disclosure of Corporate Affairs, etc..

Part II 【Information on Guarantors etc. for the Company】
Not applicable.

147

INDEPENDENT AUDITOR'S REPORTTo the Board of Directors of Wacoal Holdings Corp.:
OpinionWe have audited the consolidated financial statements of Wacoal Holdings Corp. and its consolidated subsidiaries(the "Group"), which comprise the consolidated balance sheet as of March 31, 2021, and the consolidated statementof income, consolidated statement of comprehensive income, consolidated statement of equity and consolidated
statement of cash flows for the year then ended, and notes to the consolidated financial statements, including asummary of significant accounting policies, all expressed in Japanese yen.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position of the Group as of March 31, 2021, and its consolidated financial performance and its
consolidated cash flows for the year then ended in accordance with accounting principles generally accepted in the
United States of America pursuant to the provisions of Article 95 of the Ordinance on Terminology, Forms andPreparation Methods of Consolidated Financial Statements.
Convenience Translation
Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion,such translation has been made in accordance with the basis stated in Note 2 to the consolidated financial statements.
Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the provisions of theCode of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter
A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of theconsolidated financial statements of the current period. The matter was addressed in the context of our audit of theconsolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on the matter.
Valuation of goodwill arising from the acquisition of WACOAL EUROPE LTD.
How the Key Audit Matter Was
Key Audit Matter Description
Addressed in the Audit
As of March 31, 2021, the goodwill in the amount of¥21,169 million recorded on the consolidated balance
sheet includes goodwill of ¥9,398 million, or 2.9% of
total assets, arising from the acquisition of WACOALEUROPE LTD. Also, as described in Notes 8 and 21,
the Group recognized ¥2,673 million of impairment
charges on goodwill related to WACOAL EUROPE
LTD. in the current fiscal year.

We performed the following audit procedures on key
assumptions used by management included in thebusiness plan:

Based on Accounting Standard Codification 350,
"Intangibles—Goodwill and Other," goodwill of areporting unit shall be tested for impairment on anannual basis and between annual tests in certain
circumstances. The Group used an expected present
value method to calculate fair value and performed an
impairment test. Future cash flows used to calculate fair value were based on a five-year business plan with theterminal value reflecting the average long-term growthrate in the relevant market, including an assumption on
recovery from the recession in business activities caused
by COVID-19. The plan was approved by management
and includes significant assumptions such as thepossibility of achievement of expected sales volumes
and market growth rate in the regions where WACOALEUROPE LTD. operates. These significant assumptions 
involve high uncertainty, and the business plan based onthese assumptions involve significant judgment bymanagement.
Based on the above, we identified the valuation of
goodwill arising from the acquisition of WACOALEUROPE LTD. as a key audit matter.

We read a report related to impairment tests ofgoodwill prepared by management. We examinedthe consistency of assumptions with the businessplan approved by management, and discussed thebusiness plan with management.
We read the economic reports published by externalorganizations regarding the estimation of the timingof recovery from COVID-19, and evaluatedmanagement's assumptions about the timing ofrecovery and market trends.
We obtained an understanding on various measures
to expand the sales volume through discussions withmanagement, compared business plans prepared in
the prior periods with actual results in thecorresponding periods, and evaluated the accuracyof management's estimation ability regarding thepossibility of achievement of expected sales
volumes.
We compared the market growth rate in the regions
where WACOAL EUROPE LTD. operates with theforecasts based on data from the retail industry
published by external organizations, as well as
involved our specialist on valuation of corporate
value.

Responsibilities of Management and Audit & Supervisory Board Members and the Audit & Supervisory
Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in United States of America, and for such internal control
as management determines is necessary to enable the preparation of consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern in accordance withaccounting principles generally accepted in United States of America and using the going concern basis ofaccounting unless management either intends to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.

Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the
Directors' execution of duties relating to the design and operating effectiveness of the controls over the Group's
financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with auditing standards generally accepted in Japan will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:•

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks. The procedures selected depend on
the auditor's judgment. In addition, we obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.

•

Obtain, when performing risk assessment procedures, an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group's internal control.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.

•

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause
the Group to cease to continue as a going concern.

•

Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with accounting principles generally accepted in United States of America, as well as the overall
presentation, structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We are responsible forthe direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.

We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding, among
other matters, the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statement that wehave complied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.

From the matters communicated with Audit & Supervisory Board members and the Audit & Supervisory Board, we
determine those matters that were of most significance in the audit of the consolidated financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine thata matter should not be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

DELOITTE TOUCHE TOHMATSU LLC
Kyoto Japan

June 29, 2021

NOTE TO READERS:
Following is an English translation of the Independent Auditors' Report filed under the Financial Instruments andExchange Act of Japan. This report is presented merely as supplemental information.
There are differences between an audit of internal control over financial reporting ("ICFR") under the Financial
Instruments and Exchange Act ("ICFR under FIEA") and one conducted under attestation standards established by
the American Institute of Certified Public Accountants ("AICPA").
In an audit of ICFR under FIEA, the auditors express an opinion on management's report on ICFR, and do not
express an opinion on the Company's ICFR directly. In an audit of ICFR under attestation standards established by
the AICPA, the auditors express an opinion on the Company's ICFR directly. Also, in an audit of ICFR under FIEA,
there is detailed guidance on the scope of an audit of ICFR, such as quantitative guidance on business units selection
and/or account selection. In an audit of ICFR under attestation standards established by the AICPA, there is no suchdetailed guidance. Accordingly, based on the quantitative guidance which provides an approximate measure for thescope of assessment of internal control over business process, we used a measure of approximately two-thirds oftotal consolidated revenues for the selection of significant business units.
(TRANSLATION)
INDEPENDENT AUDITOR'S REPORT
June 29, 2021
To the Board of Directors of
Wacoal Holdings Corp.:
Deloitte Touche Tohmatsu LLC
Kyoto office
Designated Engagement Partner,
Certified Public Accountant:
Koichiro Tsukuda
Designated Engagement Partner,
Certified Public Accountant:Hiroaki Sakai
Designated Engagement Partner,
Certified Public Accountant:
Tomomi Tsuji
Audit of Financial Statements
OpinionPursuant to the first paragraph of Article 193-2 of the Financial Instruments and Exchange Act, we have audited theconsolidated financial statements of Wacoal Holdings Corp. and its consolidated subsidiaries (the "Group") includedin the Financial Section, namely, the consolidated balance sheet as of March 31, 2021, and the consolidated
statement of income, consolidated statement of comprehensive income, consolidated statement of equity andconsolidated statement of cash flows for the fiscal year from April 1, 2020 to March 31, 2021, and a summary ofsignificant accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position of the Group as of March 31, 2021, and its consolidated results of its operations andits consolidated cash flows for the year then ended in accordance with accounting principles generally accepted in
the United States of America pursuant to the provisions of Article 95 of the Ordinance on Terminology, Forms andPreparation Methods of Consolidated Financial Statements.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the provisions of theCode of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matter
A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of theconsolidated financial statements of the current period. The matter was addressed in the context of our audit of theconsolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on the matter.
Valuation of goodwill arising from the acquisition of WACOAL EUROPE LTD.
How the Key Audit Matter Was
Key Audit Matter Description
Addressed in the Audit
As of March 31, 2021, the goodwill in the amount of¥21,169 million recorded on the consolidated balance
sheet includes goodwill of ¥9,398 million or 2.9% of
total assets, arising from the acquisition of WACOALEUROPE LTD. Also, as described in Notes 8 and 21,
the Group recognized ¥2,673 million of impairment
charges on goodwill related to WACOAL EUROPE
LTD. in the current fiscal year.
Based on Accounting Standard Codification 350,
"Intangibles—Goodwill and Other," goodwill of areporting unit shall be tested for impairment on anannual basis and between annual tests in certain
circumstances. The Group used an expected present
value method to calculate fair value and performed an
impairment test. Future cash flows used to calculate fairvalue were based on a five-year business plan with theterminal value reflecting the average long-term growthrate in the relevant market, including an assumption on
recovery from the recession in business activities
caused by COVID-19. The plan was approved bymanagement and includes significant assumptions suchas the possibility of achievement of expected sales
volumes and market growth rate in the regions where
WACOAL EUROPE LTD. operates. These significant
assumptions involve high uncertainty, and the businessplan based on these assumptions involve significant
judgment by management.
Based on the above, we identified the valuation of
goodwill arising from the acquisition of WACOALEUROPE LTD. as a key audit matter.

We performed the following audit procedures on key
assumptions used by management included in thebusiness plan:We read a report related to impairment tests ofgoodwill prepared by management. We examinedthe consistency of assumptions with the businessplan approved by management, and discussed thebusiness plan with management.



We read the economic reports published by externalorganizations regarding the estimation of the timingof recovery from COVID-19, and evaluatedmanagement's assumptions about the timing ofrecovery and market trends.



We obtained an understanding on various measures
to expand the sales volume through discussions withmanagement, compared business plans prepared in
the prior periods with actual results in thecorresponding periods, and evaluated the accuracyof management's estimation ability regarding thepossibility of achievement of expected sales
volumes.



We compared the market growth rate in the regions
where WACOAL EUROPE LTD. operates with theforecasts based on data from the retail industry
published by external organizations, as well as
involved our specialist on valuation of corporate
value.

Responsibilities of Management and Audit & Supervisory Board Members and the Audit & Supervisory Board for
the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in the United States of America, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern in accordance withaccounting principles generally accepted in the United States of America.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the
Directors' execution of duties relating to the design and operating effectiveness of the controls over the Group's
financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes ouropinion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:•

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks. The procedures selected depend on
the auditor's judgment. In addition, we obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion.

•

Obtain, when performing risk assessment procedures, an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group's internal control.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.

•

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause
the Group to cease to continue as a going concern.

•

Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with accounting principles generally accepted in the United States of America, as well as the overall
presentation, structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We are responsible forthe direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.

We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding, among
other matters, the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statement that wehave complied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with Audit & Supervisory Board members and the Audit & Supervisory Board, we
determine those matters that were of most significance in the audit of the consolidated financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine thata matter should not be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Audit of Internal Control
OpinionPursuant to the second paragraph of Article 193-2 of the Financial Instruments and Exchange Act, we have audited
management's report on internal control over financial reporting of Wacoal Holdings Corp. as of March 31, 2021.
In our opinion, management's report on internal control over financial reporting referred to above, which represents
that the internal control over financial reporting of Wacoal Holdings Corp. as of March 31, 2021, is effectively
maintained, presents fairly, in all material respects, the results of the assessment of internal control over financial
reporting in accordance with assessment standards for internal control over financial reporting generally accepted inJapan.
Basis for Opinion
We conducted our internal control audit in accordance with auditing standards for internal control over financial
reporting generally accepted in Japan. Our responsibilities under those standards are further described in the
Auditor's Responsibilities for the Internal Control Audit section of our report. We are independent of the Group inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our other ethicalresponsibilities as auditors. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Responsibility of Management and Audit & Supervisory Board for Report on Internal Control
Management is responsible for designing and operating effective internal control over financial reporting and for the
preparation and fair presentation of its report on internal control in accordance with assessment standards for internal
control over financial reporting generally accepted in Japan. Audit & Supervisory Board members and the Audit &Supervisory Board are responsible for overseeing and verifying the design and operating effectiveness of internal
control over financial reporting. There is a possibility that misstatements may not be completely prevented or
detected by internal control over financial reporting.
Auditor's Responsibilities for the Internal Control Audit
Our objectives are to obtain reasonable assurance about whether management's report on internal control overfinancial reporting is free from material misstatement and to issue an auditor's report that includes our opinion.

As part of an audit in accordance with auditing standards for internal control over financial reporting generally
accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the audit. We
also:•

Perform audit procedures to obtain audit evidence regarding the results of the assessment of internal control overfinancial reporting in management's report on internal control. The procedures selected depend on the auditor's
judgment, including the significance of effects on reliability of financial reporting.

•Examine representations on the scope, procedures and results of the assessment of internal control over financial
reporting made by management, as well as evaluating the overall presentation of management's report on internal
control.

•Obtain sufficient appropriate audit evidence regarding the results of the assessment of internal control overfinancial reporting. We are responsible for the direction, supervision and performance of the internal control
audit. We remain solely responsible for our audit opinion.

We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding, among
other matters, the planned scope and timing of the internal control audit, result of the internal control audit, including
any identified material weakness which should be disclosed and the result of remediation.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statement that wehave complied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor's Report
This is an English translation of the independent auditor's report as required by the Financial Instruments andExchange Act of Japan for the convenience of the reader.

【Cover】【Document Filed】

Internal Control Report (“Naibutosei Hokokusho”)【Applicable Law】

Paragraph 1, Article 24-4-4 of the Financial Instruments and Exchange Act【Filed to】

Director, Kanto Local Finance Bureau【Filing Date】

June 29, 2021

【Company Name】

KABUSHIKI KAISHA WACOAL HOLDINGS【Company Name in English】

WACOAL HOLDINGS CORP.

【Position and Name of Representative】【Position and Name of Chief Financial
Officer】

Hironobu Yasuhara, Representative Director, President and Corporate Officer of
the Company
Akira Miyagi, Director and Managing Corporate Officer【Address of Head Office】

29, Nakajima-cho, Kisshoin, Minami-ku, Kyoto【Place Where Available for PublicTokyo Stock Exchange, Inc.

Inspection】(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING(TRANSLATION)NOTE TO READERS
The following is an English translation of management's report on internal control over financial ("ICFR") filed
under the Financial Instruments and Exchange Act of Japan. This report is presented merely as supplemental
information.
There are differences between the management assessment of ICFR under the Financial Instruments and Exchange
Act ("ICFR under FIEA") and one conducted under the attestation standards established by the American Institute ofCertified Public Accountants ("AICPA").
In the management assessment of ICFR under FIEA, there is detailed guidance on the scope of management’s
assessment of ICFR, such as quantitative guidance on business units selection and/or account selection. In the
management assessment of ICFR under the attestation standards established by the AICPA, there is no such detailed
guidance. Accordingly, based on the quantitative guidance which provides an approximate measure for the scope ofassessment of internal control over business processes, we designated the business units that accounted forapproximately two-thirds of the aggregated sales for the previous fiscal year on a consolidated basis as "significant
business units" which should be subject to the process-level controls.
1.【Matters Relating to the Basic Framework for Internal Control over Financial Reporting】
Hironobu Yasuhara, Representative Director, President and Corporate Officer of the Company, and Akira Miyagi,
Director and Managing Corporate Officer, are responsible for the designing and operating effective internal control
over financial reporting of Wacoal Holdings Corp. (the "Company"), and have designed and operated internal control
over financial reporting in accordance with the basic framework for internal control set forth in "The Standards andPractice Standards for Management Assessment and Audit of Internal Control Over Financial Reporting" publishedby the Business Accounting Council.
The internal control is designed to achieve certain objectives to the extent reasonable through the effective function
and combination of its basic elements. Therefore, there is a possibility that misstatements may not be completely
prevented or detected by internal control over financial reporting.
2.【Matters Relating to Scope of Assessment, the Assessment Date, and Assessment Procedures】
The assessment of internal control over financial reporting was performed as of March 31, 2021. The assessment
was performed in accordance with assessment standards for internal control over financial reporting generally
accepted in Japan.
In conducting this assessment, we evaluated internal controls which may have a material effect on the entire financial
reporting in a consolidation ("company-level controls") and, based on the result of this assessment, we appropriately
selected business processes to be evaluated, analyzed these selected business processes, identified key controls that
may have a material impact on the reliability of our financial reporting, and assessed the design and operation ofthese key controls. These procedures have allowed us to evaluate the effectiveness of its internal controls.
We determined the required scope of the assessment of internal control over financial reporting for the Company, as
well as its consolidated subsidiaries and equity method affiliated companies, from the perspective of the materialitythat may affect the reliability of our financial reporting. The materiality that may affect the reliability of our
financial reporting is determined taking into account the materiality of quantitative and qualitative impacts. We
confirmed that we had reasonably determined the scope of assessment of internal controls over business processes inlight of the results of assessment of company-level controls conducted for the Company, its consolidated subsidiaries
and equity method affiliated companies. We did not include those consolidated subsidiaries and equity method
affiliated companies which do not have any quantitatively or quantitatively material impact on the consolidated
financial statements in the scope of the assessment of company-level controls.

Regarding the scope of assessment of internal control over business processes, we designated the business locations
that accounted for approximately two-thirds of the aggregated sales for the previous fiscal year on a consolidated
basis as "significant business locations" which should be subject to process-level controls.
At the selected significant business units, we included, in the scope of our assessment, those business processes
leading to sales or accounts receivable and inventories, as significant accounts that may have a material impact on
our business objectives. Further, not only at selected significant business units, but also at other business units, we
added to the scope assessment, as business processes having greater materiality considering their impact on financial
reporting, (1) those business processes relating to greater likelihood of material misstatements and significant
accounts involving estimates and management's judgment, and (2) those business processes relating to businesses oroperations dealing high risk transactions.
3.【Matters Relating to the Results of Assessment】
As a result of the assessment above, we concluded that our internal control over financial reporting was effective asof March 31, 2021.
4.【Supplementary Matters】
Not applicable.
5.【Special Information】
Not applicable.