May 14, 2024

Consolidated Financial Statements – Summary(Year ended March 31, 2024)
This document is an English translation of the Japanese-language original. All financial information has been
prepared in accordance with accounting principles generally accepted in Japan.
Company Name:GUNZE LIMITED

Securities Code:3002

Stock Market Listings:

Tokyo

URL:

https://www.gunze.co.jp/

Representative:

Toshiyasu Saguchi, President and Representative Director

Contact:

Junko

Nakashima,

Corporate

Officer,

GeneralManager,

Corporate

Communications
Tel:+81 (6) 6348-1314

Ordinary General Meeting of Shareholders (Scheduled):

June 25, 2024

Start of Distribution of Dividend (Scheduled):

June 26, 2024

Filing of Securities Report (Yuka shoken hokokusho) (Scheduled):

June 26, 2024

Preparation of Supplementary Materials for the Financial Results:

Yes

Holding of Presentation of Financial Results:

Yes (for institutional investors/analysts)

1. Consolidated Operating Results for FY2023 (April 1, 2023 to March 31, 2024)(1) Consolidated operating results(Amounts less than one million yen are omitted)(Percentages represent year-over-year changes)

Net sales¥ millions

FY2023
132,885
FY2022
136,030
Note: Comprehensive income
FY2023: ¥7,404 million [17.2%]
EPS

%

(2.3)
9.4

Operating profit

Ordinary profit¥ millions¥ millions

6,777
5,812

%

16.6
19.1

6,774
6,021

%

Profit attributable toowners of parent

12.5
11.5

¥ millions

%

5,109
4,501

13.5
53.1

FY2022: ¥6,319 million [89.6%]
Diluted EPS¥¥
301.11300.42
FY2023
FY2022261.38260.75
Reference: Equity in income of affiliated companies:

Return on
equity%4.4
3.9
FY2023: –Ordinary profit
to total assets
%

4.1
3.7
FY2022: –Operatingprofit to net
sales
%

5.1
4.3

(2) Consolidated financial position

FY2023

Total assets

Net assets

Equity ratio

Net assets per share¥ millions¥ millions%¥

161,971

120,467

73.2

7,112.73

117,691

69.8

6,789.78

FY2022
165,927
Reference: Total equity
As of March 31, 2024: ¥118,642 million

As of March 31, 2023: ¥115,757 million(3) Consolidated cash flows

FY2023
FY2022

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities¥ millions¥ millions¥ millions

10,4091,794(190)(5,920)Cash and cash
equivalents
at end of period¥ millions(11,347)
1,007

10,818
11,547

2. Dividends
Annual dividends per share (¥)
1st quarter-end

2nd quarter-end

3rd quarter-end

Year-end

Total

FY2022−−−147.00147.00

FY2023−−−153.00153.00

FY2024 (projected)

−

−

−

157.00157.00Total cash
dividends paid

Payout ratio(consolidated)

Dividends to net
assets (consolidated)¥ millions%%

FY2022

2,505

56.2

2.2

FY2023

2,552

50.8

2.2

FY2024 (projected)

34.9

3. Projected Results for FY2024 (April 1, 2024 to March 31, 2025)
Net sales
FY2024 full year

FY2024 full year

Operating profit

Ordinary profit¥ millions%¥ millions%¥ millions%

140,000

5.4

9,000

32.8

9,000

32.9

Profit attributable toowners of parent

EPS¥ millions

%

¥

7,500

46.8

449.63

Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries during theperiod accompanied by changes in the scope of consolidation): No(2) Changes in accounting policies, changes in accounting estimates, and restatement after error
corrections(a) Changes in accounting policies due to revisions to accounting standards and other regulations:No(b) Changes in accounting policies other than (a) above: No(c) Changes in accounting estimates: No(d) Restatement after error corrections: No(3) Number of shares issued and outstanding (common stock)(a) Number of shares at the end of period (including treasury stock):
FY2023: 17,293,516 shares
FY2022: 17,293,516 shares(b) Treasury stock at the end of period:
FY2023: 613,226 shares
FY2022: 244,692 shares(c) Average number of shares during the period:
FY2023: 16,969,221 shares
FY2022: 17,220,646 shares(Reference) Summary of Non-consolidated Results
Non-consolidated Operating Results for FY2023 (Apr. 1, 2023 to Mar. 31, 2024)(Percentages represent year-over-year changes.)(1) Non-consolidated Operating Results
Net sales

FY2023
FY2022¥ millions

93,60698,192

%

(4.7)
8.9

EPS
FY2023
FY2022

Operating profit¥ millions

%

1,748
(8.0)
1,899 1,920.2

Ordinary profit¥ millions

6,239
7,508

%

(16.9)
152.5

Profit¥ millions

5,529
5,725

Diluted EPS¥¥

325.84332.45325.09331.66(2) Non-consolidated Financial Position
Total assets

Net assets¥ millions¥ millions

FY2023
139,456
FY2022
140,192
Reference: Total equity
FY2023: ¥110,852 million

110,977
109,620

Equity ratio
%

79.5
78.1

FY2022: ¥109,495 million

Net assets per
share¥

6,645.73
6,422.46

%

(3.4)
237.0

* This summary of consolidated results is exempt from the audit procedures by certified public accountants oran audit corporation.

* Notes regarding the proper use of projections of the results and other matters

Projections of results and future developments are based on information available to the Company at the current time, as
well as certain assumptions judged by the Company to be reasonable. Various factors could cause actual results to differ
materially from these projections. For the assumptions that form the basis of the projected results and notes regarding theuse of projections, see (4) “Outlook for FY2024” of “1. Results of Operations” on page 5 of attached materials.

(Attachment)
Table of Contents
1. Results of Operations .......................................................................................................................... 2(1) Analysis of Full-Year Results .......................................................................................................... 2(2) Analysis of Financial Position ........................................................................................................... 3(3) Summary of Cash Flows for FY2023 .............................................................................................. 4(4) Outlook for FY2024 ........................................................................................................................ 5(5) Basic Policy on Distribution of Profits and Dividends for FY2023 and FY2024 ........................... 9
2. Basic Policy for Selection of Accounting Standards ........................................................................... 9
3. Consolidated Financial Statements and Primary Notes ..................................................................... 10(1) Consolidated Balance Sheets ......................................................................................................... 10(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ... 12
Consolidated Statements of Income ......................................................................................... 12
Consolidated Statements of Comprehensive Income ............................................................... 13(3) Consolidated Statements of Changes in Shareholders' Equity, etc. ............................................... 14(4) Consolidated Statements of Cash Flows ....................................................................................... 18(5) Notes to Consolidated Financial Statements ................................................................................. 20(Notes Regarding Assumptions of Continuing Operations) ..................................................... 20(Notes to consolidated statements of income) .......................................................................... 20(Segment Information, etc.) ...................................................................................................... 21(Per Share Information) ............................................................................................................ 26(Significant Subsequent Events) ............................................................................................... 26
4. Supplementary Information ............................................................................................................... 27

1

1. Results of Operations(1) Analysis of Full-Year Results(Overview of FY2023)
In the fiscal year that ended March 31, 2024, the Japanese economy was on a moderate recovery path, as socialand economic activities progressed toward normal. The economic outlook, however, remains unclear due to factors
including the rise in prices associated with soaring raw material prices against a backdrop of the geopolitical tensions
and rapid exchange rate fluctuations, as well as concerns of a slowdown in the global economy. Amid this operating
environment, the GUNZE Group continued to pursue the four basic strategies of “Creation of new value,” “Capitalcost-focused management,” “Evolution of corporate constitution,” and “Environmentally responsible management”
in the second year of its new medium-term management plan, “VISION 2030 stage 1.”
The GUNZE Group’s operating results for the fiscal year under review are as follows:
Net sales:
Operating profit:
Ordinary profit:
Profit attributable toowners of parent:¥132,885 million¥6,777 million¥6,774 million(down by 2.3% compared to the previous fiscal year)(up by 16.6% compared to the previous fiscal year)(up by 12.5% compared to the previous fiscal year)¥5,109 million(up by 13.5% compared to the previous fiscal year)

Net sales declined attributable to such factors as the previous fiscal year’s transfer of the film business in theelectronic components field and real estate development project. Operating profit and ordinary profit increased
primarily owing to the improved profitability in the apparel business. Profit attributable to owners of parent also
increased mainly due to the recording of ¥2,575 million in income taxes - deferred (gain) for deductible temporary
difference related to investments in subsidiaries, among others, and the recording of ¥2,009 million in gain on saleof investment securities associated with the sale of cross-shareholdings, despite the recording of ¥2,801 million inbusiness restructuring expenses as a result of the restructuring in the electronic components business, the sports clubbusiness, and the apparel business.

(Results by Business Segment)
Categories of the reportable segments have been changed starting from the fiscal year under review. The following
year-on-year comparison has been made using the figures for the previous fiscal year that were reclassified based on
the revised reportable segments.
[Functional Solutions]
The functional solutions business recorded net sales of ¥48,975 million (down by 1.2% compared to the previous
fiscal year) and an operating profit of ¥6,028 million (down by 11.8% compared to the previous fiscal year).
< Major factors in the changes>• In plastic films, sales of packaging films in the US remained strong, although the business was impacted bystagnant demand in Japan and Asia.
• In engineering plastics, although sales to the office equipment market stagnated, products for semiconductors andgeneral industries performed strongly.
• Electronic components bore the brunt of a slowdown in the Chinese economy and stagnant PC market.
[Medical]
The medical business recorded net sales of ¥11,697 million (up by 6.8% compared to the previous fiscal year).
Operating profit was ¥1,991 million (down by 4.4% compared to the previous fiscal year) due to increases primarily
in cost associated with investment in human resources aimed at future growth.
< Major factors in the changes>• Market penetration of new products including adhesion prevention agent progressed with the recovery of themainstay domestic medical application market.
2• Sales of bioabsorbable medical materials grew in China as we strengthened our sales effort in cooperation withnew distributors.
• Orders for medical lasers decreased primarily due to the decreased number of openings of aesthetic and medical
institutions after the COVID-19 pandemic.
[Apparel]
The apparel business recorded net sales of ¥60,114 million (down by 1.4% compared to the previous fiscal year)
and an operating profit of ¥1,465 million (compared to an operating loss of ¥222 million for the previous fiscal year).
< Major factors in the changes>• In the apparel business, although sales of seasonal items struggled due to the late-summer heat and mild winter,products sold throughout the year appealing for differentiation from others performed strongly. Price revisions,
including adding higher value to products, and business restructuring resulted in increased profitability.
• The e-commerce and the channel for company-owned stores, which are being strengthened, have continued togrow, and the Company will continue to pursue growth strategies through a shift to the Direct to Consumer
channel.
• In innerwear, high value-added products that aligned with customer needs performed strongly.
• In legwear, stockings and tights performed strongly due to the positive effect of the renewal of SABRINA, themainstay of this category.
[Lifestyle Creations]
The lifestyle creation business recorded net sales of ¥12,826 million (down by 16.3% compared to the previous
fiscal year) and an operating profit of ¥833 million (up by 18.1% compared to the previous fiscal year).
< Major factors in the changes>• The real estate category recorded a decline in revenue due to the impact of sales of idle land redevelopment in
the previous fiscal year.
• Both the shopping center and the sports club businesses are back on the recovery track following the lifting of
pandemic restrictions.

(2) Analysis of Financial Position(Assets, Liabilities and Net Assets)
As of March 31, 2024, total assets were ¥161,971 million, a decrease of ¥3,956 million compared to the end of
the previous fiscal year. The main components of an increase included a ¥3,203 million increase in machinery,equipment and vehicles, net, owing to the commencement of the operations of a circular (resource recycling) factoryin the plastic films field, a ¥2,130 million increase in deferred tax assets, and a ¥1,088 million increase in retirement
benefit asset, while the main components of the decrease were a ¥4,864 million decrease in investment securities
associated with the sale of cross-shareholdings, etc., a ¥2,291 million decrease in construction in progress, a ¥1,646
million decrease in other current assets (accounts receivable-other, etc.), and a ¥1,027 million decrease in raw
materials and supplies.
Total liabilities were ¥41,503 million, a decrease of ¥6,732 million compared to the end of the previous fiscal
year. The main components of an increase included a ¥1,783 million increase in provision for business restructuring
and a ¥1,093 million increase in income taxes payable, while the main components of the decrease included a ¥6,209
million decrease in long- and short-term borrowings and a ¥1,724 million decrease in notes and accounts payable trade.
Net assets were ¥120,467 million, an increase of ¥2,776 million compared to the end of the previous fiscal year.
The main components of the increase included the recording of profit attributable to owners of parent amounting to¥5,109 million, and a ¥1,177 million increase in foreign currency translation adjustment, while the main components
of a decrease were dividends paid of ¥2,505 million and ¥2,006 million spent for the purchase of treasury shares.

3

(3) Summary of Cash Flows for FY2023
1) Cash Flows
As of March 31, 2024, consolidated cash and cash equivalents were ¥10,818 million, a decrease of ¥728 million
compared to the end of the previous fiscal year. Below is an overview of cash flows and reasons for changes during
the fiscal year under review.
Net cash provided by operating activities for the fiscal year under review totaled ¥10,409 million, an increaseof ¥8,614 million compared to the previous fiscal year. The major components of cash inflows included profit before
income taxes of ¥4,504 million and depreciation of ¥6,149 million.
Net cash used in investing activities was ¥190 million, an increase of ¥5,729 million compared to the previous
fiscal year. The main components of cash inflows included proceeds from sale of investment securities amounting
to ¥7,094 million. The main components of cash outflows included purchase of non-current assets amounting to¥7,166 million.
Net cash used in financing activities totaled ¥11,347 million, a decrease of ¥12,355 million compared to theprevious fiscal year. The main components of cash outflows were a ¥6,697 million decrease in long- and short-termborrowings, ¥2,497 million spent for dividends paid, and purchase of treasury shares amounting to ¥2,006 million.
2) Cash Flow Indicator Trends
March 31, 2020 March 31, 2021 March 31, 2022 March 31, 2023 March 31, 2024
Equity ratio (%)
64.6
71.1
71.4
69.8
73.2
Equity ratio on
market
value
38.7
46.0
40.9
46.1
56.8
basis (%)
Debt coverage
1.8
2.0
1.2
8.6
0.9
ratio (years)
Interest
coverage ratio
59.0
77.6
61.3
7.8
42.6
(times)
Notes:The equity ratio is equal to shareholders' equity divided by total assets.
The equity ratio on a market value basis is equal to market capitalization divided by total assets.
The debt coverage ratio is equal to interest-bearing liabilities divided by operating cash flow.
The interest coverage ratio is equal to operating cash flow divided by interest payments.
- All of the above indicators are calculated based on consolidated financial figures.
- Market capitalization is calculated by multiplying the closing share price at the end of the period by the total numberof shares issued and outstanding at the end of the period (excluding treasury stock).
- Operating cash flow equals the total net cash flows from operating activities as stated in the Consolidated
Statements of Cash Flows. Interest-bearing liabilities include all liabilities on which interest is paid, as stated in theConsolidated Balance Sheets. Interest payments are equal to the interest paid as stated in the Consolidated Statementsof Cash Flows.

4(4) Outlook for FY2024(Challenges the GUNZE Group should address)
While the Japanese economy was on a moderate recovery path, as social and economic activities progressed
toward normal primarily owing to the easing of restrictions on activities resulting from the downgrade of
COVID-19 to the Category V, the economic outlook remains unclear due to factors including the rise in prices
associated with soaring raw material prices against a backdrop of the geopolitical problems, and the impact of
the yen’s depreciation due to the differences in monetary policies in Japan and overseas, as well as concerns ofa slowdown in the overseas economy. The GUNZE Group intends to engage in initiatives to increase productivity,
such as the promotion of autonomation and digital transformation at each of its businesses, strengthen costcompetitiveness through an optimal global production system, and expand its network for the procurement of raw
materials, while at the same time moving forward with activities to create new value that captures various market
changes.
Furthermore, starting from fiscal 2023, to clarify its position as a growth driver in the ongoing medium-term
management plan, “VISION 2030 stage 1,” the medical business, which had been included in the “Functional
solutions” segment, has become a separate “Medical” segment.
(Segment-specific strategic challenges)
As for the functional solutions business, in plastic films, we will work toward the commencement of full-scale
operations of the Circular Factory (resource-circulating factory) and promote the establishment of recycling centers,
the basis for our transformation into the Circular Manufacturer, along with the proactive market launch ofenvironmentally responsible products. While striving to move forward with production innovation through theautomation of facilities and the utilization of renewable energy, our efforts will also be concentrated on expanding
sales in overseas markets, particularly in the United States, China, and the ASEAN region, etc. In engineering plastics,
in addition to increasing the share of our products in the mainstay office equipment market, we will expand the
Konan Factory, our main factory, with a target completion date of March 2025, to meet the increase in demand in
the medical and semiconductor fields. Furthermore, in order to promote strategic allocation of management resources,in the electronic components field, we will transfer shares of our consolidated subsidiary (85.1%) and commercial
rights of the touch panel business in Japan and the United States on October 1, 2024 (tentative). We are also
negotiating a business transfer in the mechatronics field.
In the medical business, in order to accelerate the growth of the business, we will build a new factory (the third
factory) at the site of the Ayabe Plant in Kyoto Prefecture with a target completion date of February 2025. We will
also reinforce research and development facilities to strengthen the development capabilities of the medical business.
At the new factory, we will establish a system to boost the production of TENALEAF, an adhesion prevention agent,
whose demand is growing. In addition, we will accelerate business expansion by strengthening sales in the UnitedStates and China and the ongoing development of new products.
In the apparel business, through cross-sectoral restructuring to improve competitiveness, the GUNZE Group will
strive to expand sales even further on the e-commerce channel, which has been enjoying accelerated growth in linewith changing consumer behavior, as well as the Direct to Consumer channel for company-owned stores andproactively promote collaboration with other companies. Furthermore, we will expand into the lifestyle domain andincrease sales of women’s innerwear products through products that differentiate our products from others. We haveconsolidated production bases and made other restructuring efforts. We will continue to strengthen our costcompetitiveness by promoting automation and the establishment of an optimal global production system. In addition,
to address the so-called “2024 issues in logistics,” we will work to increase efficiency by such measures as
consolidation of lots and standardization of transport volumes to minimize the impact on our business.
In the lifestyle creation business, the GUNZE Group will work to boost the profitability of its commercial
facilities and promote property-specific management that emphasizes investment efficiency. In the landscaping andgreening business, we will proactively work on capturing the demand for greenery including those involving theWorld Expo in Osaka, and increasing the amounts of CO2 fixed by plants to reduce CO2 emissions. In the sports
clubs business, we will implement rigorous measures to address issues with our stores, including closing those thatare unprofitable. We will also strive to expand the school business, provide unique services tailored to specificregional/store characteristics, and develop new types of businesses.

5Based on the above, we forecast consolidated net sales of ¥140,000 million yen, operating profit of ¥9,000 million,
ordinary profit of ¥9,000 million, and profit attributable to owners of parent of ¥7,500 million for the next fiscal year
(April 1, 2024 to March 31, 2025).
(Million yen)
FunctionalLifestyle
Consolidated
MedicalApparelElimination
solutionscreation
total
Net sales

49,70013,00065,20012,900(800)

140,000

Year-overyear changes

Up 1.5%

Up 11.1%

Up 8.5%

Up 0.6%−

Up 5.4%6

(Strategic challenges in finance)
As of the end of the fiscal year under review, the Price Book-value Ratio (PBR) of the GUNZE Group stood at
0.8, indicating continued impairment of corporate value. We think that the primary factor in the low PBR is Returnon Equity (ROE) and believe that keeping an equity spread (ROE – cost of shareholder’s equity) constantly in apositive range will allow us to achieve a PBR exceeding 1.0.
The cost of shareholder’s equity of the GUNZE Group is set at 6.32% in the medium-term management plan,“VISION 2030 stage 1.” Based on our latest estimates, which take into account discussions with investors andchanges in the Bank of Japan’s monetary policy, we recognize that achieving a positive equity spread will require
even higher levels of ROE.
We also believe that if the Gunze Value Added (GVA = NOPAT + dividends - period-end invested capital x
WACC), whose deficit has been narrowing year after year, constantly stays positive, it will contribute to an increasein the PBR. However, as a result of prioritizing the restructuring and the reduction of cross-shareholdings* as we
pursued cost of capital-based management, the debt-to-equity ratio (DE ratio = interest-bearing liabilities / equity)
at the end of the fiscal year under review hit the historical lows. With the DE ratio being so low, the WACC will behigher than 5.15%, a figure set in the medium-term management plan, “VISION 2030 stage 1,” and it will take the
GVA even longer to turn positive. While the size of the GUNZE Group’s equity supports its financial soundness, italso presents a big hurdle for achieving a positive equity spread and GVA. We thus believe that it is necessary to take
into account profit levels, financial soundness, and capital efficiency to establish an optimal capital structure.
We will take into consideration the growth of profit and invested capital of the GUNZE Group in the future andestablish an ideal DE ratio that will constantly allow for a positive equity spread and GVA. Under our cost of capitalbased management, we will strive to grow profit in existing businesses by making proactive and efficient investment
in growth, such as investing in factory expansion aimed at increased production in the medical business andengineering plastics field and establishing a recycling center in the plastic films field, and increase our financial
leverage. In addition, depending on the situation, we will consider M&A and other inorganic investments as well as
additional shareholder returns, in an effort to achieve an optimal capital structure.
* Promotion of the reduction of cross-shareholdings
While pursuing cost of capital-based management, the GUNZE Group has proactively promoted the reduction ofcross-shareholdings. At the end of the fiscal year under review, we held 32 stocks, including unlisted stocks, withmarket values totaling of ¥5,226 million. This represents a reduction of 37 stocks and ¥16,998 million compared tothe end of FY2017, a benchmark for various metrics for our cost of capital-based management. In the next fiscal
year, we will reduce cross-shareholdings further to the following levels: number of cross-shareholdings: 27 or less;total market value: less than ¥3,000 million; and the ratio to net assets at the end of the fiscal year: less than 3%.
End of
FY2017

End of
FY2018End of
FY2019End of
FY2020End of
FY2021

End of
FY2022

69

67

62

49

41

36

Total market value atthe end of period(¥ millions)

22,224

18,496

15,053

15,113

11,470

10,2495,226

Less than
3,000

Ratio to net assets

19.82%

16.65%

13.79%

13.12%

9.99%

8.71%

4.34%

Less than3%

Number of crossshareholdings

7

End of
FY2023End of
FY202432 27 or less(Handling of the under-reporting of water amount at a hot spring facility)
On January 24, 2024, the Company announced a Notice concerning the Under-reporting of Water Amount at a
Hot Spring Facility (hereinafter referred to as “this matter”). At the end of January 2024, Gunze Development Co
Ltd., a consolidated subsidiary of the Company and the operator of the hot spring facility, paid ¥552 million in unpaid
sewage fees, etc. for the period from 2004 to 2023 to Itami City and Amagasaki City.
Once again, we sincerely apologize for the inconvenience and concerns this matter has caused to all people
involved.
Following the announcement of this matter, we established an investigation team to conduct a thoroughinvestigation and inquiry into causes. We collected related documents from 2004, in which we started the hot springbusiness, and conducted interviews with involved people (employees of the Company and related contractors).
<Results of the investigation and causes>
This matter came to light when bypass pipelines were found buried underground during the excavation of the sitewhich was performed to check the pipe conditions for the purpose of maintenance and inspection of the facility.
Partly because it had been 20 years since the construction, no clear testimony or evidence was obtained that could
identify specific instructions from Gunze Development Co Ltd. and the contractor that installed the bypass pipelines.
However, given the fact that the bypass pipelines were installed, we must assume that employees of the Company
and contractors at the time may have been involved in this matter in some way.
In any case, as we entered the business without expertise, we completely entrusted the construction to contractors
and lacked the ability to check and make decisions about the construction as the principal. Furthermore, despite
subsequent media coverage on bypass piping issues at hot spring facilities nationwide, both Gunze Development Co
Ltd. and contractors had an insufficient awareness of compliance as responsible parties and failed to perform proper
checks and take appropriate action. We think it resulted in the issue being neglected over a long period of time.
In addition, we must reflect on the fact that the management team overseeing the GUNZE Group’s operations did
not exercise sufficient oversight and that the GUNZE Group’s governance structure was inadequate.
<Measures to prevent recurrence>
The Company will implement the following measures to prevent recurrence both by reinforcing its governancestructure and raising awareness among its members:(i)

The Technology & Development Department of the Head Office to rigorously check construction related
contracts and plans(ii) Educate department heads and train members(iii) Self-check annually for risks in each department, and functional departments to monitor it(iv) Continue to perform compliance audits(v) Send messages from the top to all employees<Managerial responsibility>
To take managerial and social responsibilities for failing to discover the under-reporting for a long period of timeand incurring significant losses, the Company has decided to reduce the monthly remuneration (May and June 2024)of two representative directors (the Chairman and the President) by 20%.

8

(5) Basic Policy on Distribution of Profits and Dividends for FY2023 and FY2024
Returning earnings to shareholders is one of the most important management policies at the GUNZE Group,
and we will continue to set the total return ratio of 100% until the return on equity (ROE) on a consolidated basis
exceeds the cost of shareholder’s equity. In order to return earnings in a stable and continuous manner, we will
provide a dividend with a target dividend on equity ratio (DOE) at 2.2% or over. Under this policy, the GUNZEGroup plans to pay a dividend of ¥153 per share for fiscal 2023.
For fiscal 2024, the GUNZE Group plans to pay a dividend of ¥157 per share.

2. Basic Policy for Selection of Accounting Standards

As a basic policy for the time being, GUNZE will continue preparing its consolidated financial statements inaccordance with Japanese accounting standards. As for the application of the International Financial ReportingStandards (IFRS), GUNZE will strive to collect related information and handle the matter appropriately.

93. Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheets(Million yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract
assetsMerchandise and finished goods
Work in process
Raw materials and supplies
Short-term loans receivable
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

10

As of March 31, 2024

11,547

10,81827,12927,58824,114
7,128
7,054
781
5,841
(16)
83,58024,706
7,425
6,026
50
4,195
(13)
80,796109,267(72,610)36,65789,446(79,048)
10,398
8,649(6,183)
2,466
10,446
1,313(1,205)
107
3,041
63,117

110,545(74,354)
36,191
93,847(80,245)
13,601
9,093(6,631)
2,461
10,4791,349(1,235)113
749
63,597

757
689
1,446

1,271
657
1,928

11,698
0
1,327
1,138
3,684
(67)
17,782
82,346
165,927

6,833
−
2,416
3,269
3,199
(69)
15,64881,174
161,971

(Million yen)
As of March 31, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Notes payable - facilities
Provision for business restructuring
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Provision for loss on guarantees
Retirement benefit liability
Long-term leasehold and guarantee deposits
received
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

11

As of March 31, 2024

10,010
6,077
438
263
1,353
936
−
10,97130,052

8,286
252
462
1,357
1,405
263
1,783
11,07924,890

8,638
220
4,494

8,230
−
3,937

4,220

3,986

610
18,183
48,235458
16,61341,50326,071
6,566
78,972(1,044)
110,566

26,071
6,565
81,576(2,974)111,239

2,464
(144)
(13)
2,941
(56)
5,191
124
1,808
117,691
165,927

2,438
156
(13)
4,118
702
7,403
124
1,700
120,467
161,971(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rental income from non-current assets
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Rental expenses on non-current assets
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Gain on sales of investments in capital of subsidiaries
and associates
Other
Total extraordinary income
Extraordinary losses
Loss on sale and retirement of non-current assets
Loss on sale of investment securities
Loss on valuation of shares of subsidiaries andassociates
Loss on valuation of investments in capital
Loss on sales of investments in capital
Expenses of soil pollution measures
Business restructuring expenses
Settlement money for under-reporting water amount
Loss on COVID
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

For the fiscal year ended
March 31, 2023
136,030
95,54540,484
34,671
5,812

For the fiscal year ended
March 31, 2024
132,885
91,164
41,72034,943
6,777

53
440
363
36
260
1,153

70
307
367
−
154
900

244
356
−
343
944
6,021

208
355
6
332
902
6,774

1,013
598

86
2,009

339

27

7
1,959

265
2,387

746
7

572
−

−

521

−
40
228
325
−
116
126
1,590
6,389
919
941
1,860
4,529
28
4,501

84
−
−
2,801
534
−
144
4,658
4,504
1,924
(2,575)
(650)
5,154
45
5,109

12

Consolidated Statements of Comprehensive Income(Million yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

For the fiscal year ended
March 31, 2023
4,529

For the fiscal year ended
March 31, 2024
5,154

1,070
(109)
1,069
(240)
1,789
6,319

(26)
300
1,216
759
2,250
7,404

6,198

7,321

120

83

13

(3) Consolidated Statements of Changes in Shareholders’ Equity, etc.
Fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)(Million yen)
Shareholders’ equity
Share
capitalBalance at beginning of period
Changes during period
Dividends of surplus
Profit attributable to owners ofparentReversal of revaluation reserve
for landPurchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Net changes in items other thanshareholders' equity
Total changes during period
Balance at end of period

26,071–
26,071

Capitalsurplus
6,566

–
6,566

Retainedearnings
81,184

TreasurysharesTotalshareholders’equity(4,399)109,423(2,418)(2,418)

4,501

4,501

(13)

(13)

(12)
(4,268)(1,004)90
4,268(1,004)78–(2,211)
78,972

3,354(1,044)

1,143
110,566

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities

Balance at beginning of period
Changes during period
Dividends of surplus
Profit attributable to owners ofparentReversal of revaluation reserve for
land
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

Deferred
gains orlosses onhedges

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurements ofdefined benefit
plans

Total
accumulated
othercomprehensive
income

1,393

(35)

(26)

1,964

183

3,480

1,070

(109)

13

976

(240)

1,711

1,070
2,464

(109)
(144)

13
(13)

976
2,941

(240)
(56)

1,711
5,191

14

Fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)(Million yen)

Balance at beginning of period
Changes during period
Dividends of surplus
Profit attributable to owners ofparentReversal of revaluation reserve
for landPurchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

Shareacquisitionrights

Noncontrollinginterests

131

1,755

Total net
assets114,790(2,418)4,501(13)(1,004)
78
–

(6)

53

1,757

(6)
124

53
1,808

2,900
117,69115

Fiscal year ended March 31, 2024 (from April 1, 2023 to March 31, 2024)(Million yen)
Shareholders’ equity
Share
capitalBalance at beginning of period
Changes during period
Dividends of surplus
Profit attributable to owners ofparentChange in ownership interest ofparent due to transactions with
non-controlling interests
Purchase of treasury shares
Disposal of treasury shares
Net changes in items other thanshareholders' equity
Total changes during period
Balance at end of period

26,071

CapitalsurplusRetainedearnings

6,566

Treasuryshares78,972

Total
shareholders’equity(1,044)

110,566(2,505)(2,505)

5,109

5,109

(2)

(2)

1

–
26,071

(0)
6,565

2,603
81,576(2,006)76(2,006)78(1,930)(2,974)672
111,239

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities

Balance at beginning of period
Changes during period
Dividends of surplus
Profit attributable to owners ofparentChange in ownership interest ofparent due to transactions with
non-controlling interests
Purchase of treasury shares
Disposal of treasury shares
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

Deferred
gains orlosses onhedges

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurements ofdefined benefit
plans

Total
accumulated
othercomprehensive
income

2,464

(144)

(13)

2,941

(56)

5,191

(26)

300

–

1,177

759

2,211

(26)
2,438

300
156

–
(13)

1,177
4,118

759
702

2,211
7,403

16

Fiscal year ended March 31, 2024 (from April 1, 2023 to March 31, 2024)(Million yen)

Balance at beginning of period
Changes during period
Dividends of surplus
Profit attributable to owners ofparentChange in ownership interest ofparent due to transactions with
non-controlling interests
Purchase of treasury shares
Disposal of treasury shares
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

Shareacquisitionrights

Noncontrollinginterests

124

1,808

Total net
assets117,691(2,505)5,109(2)(2,006)
78

–

(108)

2,103

–
124

(108)
1,700

2,776
120,46717

(4) Consolidated Statements of Cash Flows(Million yen)
For the fiscal year ended
March 31, 2023
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for bonuses
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sale and retirement of non-current assets
Loss (gain) on sale and valuation of investment securities
Business restructuring expenses
Loss on COVID
Loss on valuation of shares of subsidiaries and associates
Expenses of soil pollution measures
Settlement money for under-reporting water amount
Other extraordinary loss (income)
Other loss (gain)
Decrease (increase) in accounts receivable - trade, andcontract assets
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase (decrease) in trade payables
Increase (decrease) in leasehold and guarantee deposits
received
Increase (decrease) in other current liabilities
Increase (decrease) in other non-current liabilities
SubtotalInterest and dividends received
Interest paid
Payments for business restructuring expenses
Payments for loss on COVID
Payments for soil pollution measures
Payments for Settlement money for under-reporting wateramountIncome taxes refund (paid)
Net cash provided by (used in) operating activities

18

For the fiscal year ended
March 31, 2024

6,389
5,760
133
3
(836)
(15)
(493)
244
(11)
(323)
(591)
325
116
–
228
–
105
(20)

4,504
6,149
59
(4)
(564)
47
(378)
208
27
489
(2,009)
2,801
–
521
117
534
(208)
(6)

124

(135)

(4,228)(1,779)
572

494
637
(2,162)

(171)

(234)

(43)
(76)
5,412
490
(230)
(863)
(99)
(38)

(542)
(16)
10,330
378
(244)
(181)
–
–

–

(534)

(2,877)
1,794

661
10,409(Million yen)
For the fiscal year ended
March 31, 2023
Cash flows from investing activities
Purchase of non-current assets
Proceeds from sale of non-current assets
Payments for retirement of non-current assets
Purchase of investment securities
Proceeds from sale of investment securities
Proceeds from sale of businesses
Decrease (increase) in loans receivable
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase (decrease) in short-term borrowings andcommercial papers
Proceeds from long-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Proceeds from sale of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

19

For the fiscal year ended
March 31, 2024

(10,226)
1,370
(589)
(2,060)
4,422
1,207
(41)
(2)
(5,920)(7,166)
108
(454)
(737)
7,094
−
780
183
(190)

288

(6,232)6,600(2,455)(1,004)78(2,409)
(67)
(22)
1,007
196
(2,922)
14,46911,547−(465)(2,006)78(2,497)(124)(99)(11,347)400(728)
11,547
10,818(5) Notes to Consolidated Financial Statements(Notes Regarding Assumptions of Continuing Operations)None applicable(Notes to consolidated statements of income)*1 Business restructuring expenses
FY2022 (April 1, 2022 – March 31, 2023)
The GUNZE Group recognized as business restructuring expenses the wind-down cost associated withtermination of production at its stocking production subsidiaries in China in the legwear, Shandong Gunze ApparelLtd. and Jinan Gunze Apparel Co., Ltd.
FY2023 (April 1, 2023 – March 31, 2024)
The GUNZE Group recognized as business restructuring expenses ¥1,810 million in loss associated withbusiness restructuring including the transfer of shares of a consolidated subsidiary of the electronic components
business, ¥584 million in loss associated with store closures in the sports club business, and ¥407 million in loss
associated with termination of production at overseas subsidiaries and store closures at domestic subsidiaries in theapparel business.
The business restructuring expenses include the following impairment losses.
Application

Location

Asset Group

Amount (¥ millions)

Assets for the apparelbusinessIndonesia

Machinery, equipment
and vehicles, and others

47

Assets for the electronic
components business

Kameoka, Kyoto
Prefecture

Software and others

10Sports club facilities

Nagoya, Aich Prefecture
and one other location

Leased assets

1

The GUNZE Group divides assets into groups based on the classification employed for the internalmanagement.
As for assets for the apparel business, assets for the electronic components business, and sports club facilities,
when it made the decisions of termination of production at and liquidation of PT. GUNZE SOCKS INDONESIA,a consolidated subsidiary of the Company, transfer of commercial rights of the touch panel business in Japan andthe United States, and closure of some stores, the GUNZE Group wrote down the book values of the respective
assets to their recoverable amounts, and the write-downs were recognized as business restructuring expenses under
extraordinary losses. The recoverable amounts of these assets were calculated based on their net realizable value
and assessed as zero.

20

*2 Settlement money for under-reporting water amountFY2023 (April 1, 2023 – March 31, 2024)
Payment of unpaid sewage fees, etc. due to the discovery of under-reporting of water amount at a hot spring
facility of a consolidated subsidiary(Segment Information, etc.)[Segment Information]
1. Summary of Reportable Segments
GUNZE’s reportable segments refer to the components of GUNZE that provide separate financial data to theboard of directors for decisions on allocation of management resources and evaluation of business results on aregular basis.
GUNZE’s corporate structure consists of business organizations (internal companies/business divisions, etc.)classified according to the type of products or services, and each business organization formulates strategies for the
products/services it handles and promotes business activities. Therefore, GUNZE consists of segments based on
business organizations classified by the type of products/services, and discloses financial information about four
reportable segments, namely Functional Solutions, Medical, Apparel and Lifestyle Creations.
The Functional Solutions segment produces and sells functional materials made by processing plastics andmachinery. The Medical segment produces and sells medical materials. The Apparel segment is engaged in the
production and sales of apparel as well as threads and accessories. The Lifestyle Creations segment is engaged inoperation and management of commercial facilities and sports clubs, sales of trees and plants, as well as the solar
power generation business.
2. Net Sales, Profit/Loss, Asset/Liabilities and Others of Each Reportable Segment and Calculation Method
Accounting treatment for business segment reporting is the same as “Significant accounting policies for the
preparation of consolidated financial statements.”21

3. Information on Net Sales, Profit/Loss, Assets/Liabilities and Others of Each Reportable Segment
FY2022 (April 1, 2022 – March 31, 2023)(Millions of yen)
Reportable segments

Adjustment(Note 1)

Consolidated(Note 2)Functional
solutions

MedicalApparelLifestylecreations

Total

Sales to customers

49,006

10,95360,804

15,265136,030-

136,030

Intersegment sales
and transfers

549

3

182

62

797

(797)

-

49,555

10,95760,98615,327

136,827(797)

136,030

Segment profit (loss)

6,835

2,082

(222)

705

9,401

(3,588)

5,812

Segment assets

55,258

10,47150,90526,657143,293

22,633

165,927

Depreciation

2,335

371

1,205

1,370

5,281

478

5,760

Amortization of
goodwill

88

-

45

-

133

-

133

4,816

553

1,493

2,053

8,916

680

9,597

Net sales

Total

Other items

Increase in property,
plant and equipment,
and intangible assets

Notes:
1. Adjustment comprises the following:(1) The ¥(3,588) million segment profit adjustment consists of overall costs not allocated to reportablesegments. Overall costs refer to SG&A expenses not allocated to reportable segments.
(2) The ¥22,633 million segment asset adjustment consists of overall costs not allocated to reportablesegments.
2. Segment profit total was adjusted to be consistent with the operating profit recorded on the Consolidated
Statements of Income.

22

FY2023 (April 1, 2023 – March 31, 2024)(Millions of yen)
Reportable segments

Adjustment(Note 1)

Consolidated(Note 2)Functional
solutions

MedicalApparelLifestylecreations

Total

Sales to customers

48,471

11,69359,94912,771

132,885-

132,885

Intersegment sales
and transfers

504

4

164

54

728

(728)

-

48,975

11,697

60,114

12,826

133,614(728)

132,885

Segment profit (loss)

6,028

1,991

1,465

833

10,318(3,541)

6,777

Segment assets

55,443

10,85651,81525,977144,092

17,878161,971

Depreciation

2,464

453

1,301

1,440

5,660

488

6,149

Amortization of
goodwill

14

-

45

-

59

-

59

Impairment losses(note 3)

10

-

47

1

59

-

59

Increase in property,
plant and equipment,
and intangible assets

4,672

403

1,888

1,597

8,562

584

9,147

Net sales

Total

Other items

Notes:
1. Adjustment comprises the following:(1) The ¥(3,541) million segment profit adjustment consists of overall costs not allocated to reportablesegments. Overall costs refer to SG&A expenses not allocated to reportable segments.
(2) The ¥17,878 million segment asset adjustment consists of overall costs not allocated to reportablesegments.
2. Segment profit total was adjusted to be consistent with the operating profit recorded on the Consolidated
Statements of Income.
3. Impairment losses are included in business restructuring expenses on the Consolidated Statements of Income.
4. Matters on Changes in Reportable Segments, etc.
To clarify its position as a growth driver in the ongoing medium-term management plan, “VISION 2030 stage
1,” the medical business, which was previously included in the “Functional solutions” segment, has become aseparate the “Medical” segment starting from the fiscal year under review. As a result, the reportable segments of
the GUNZE Group comprise “Functional solutions,” “Medical,” “Apparel,” and “Lifestyle creations.”
Segment information for the previous fiscal year has been prepared based on the revised reportable segments.

23

[Related Information]
FY2022 (April 1, 2022 to March 31, 2023)
1. Information by Product/Service
This information is not presented because similar information is available in “Segment Information.”
2. Geographic Information(1) Net sales(Millions of yen)Japan

Others109,181

Total
26,848136,030

Note: Net sales are classified by the location of customers.
(2) Property, plant and equipment(Millions of yen)Japan

Others54,157

Total
8,959

63,1173. Major Customer Information
This information is not presented because no single customer represents 10% or more of the company’s total net
sales reported on the Consolidated Statements of Income.
FY2023 (April 1, 2023 to March 31, 2024)
1. Information by Product/Service
This information is not presented because similar information is available in “Segment Information.”
2. Geographic Information(1) Net sales(Millions of yen)Japan

OthersTotal
25,417

107,468

132,885

Note: Net sales are classified by the location of customers.
(2) Property, plant and equipment(Millions of yen)Japan

Others54,879

Total
8,718

63,59724

3. Major Customer Information
This information is not presented because no single customer represents 10% or more of the company’s total net
sales reported on the Consolidated Statements of Income.
[Information on Impairment Loss of Non-current Assets of Each Reportable Segment]
FY2022 (April 1, 2022 to March 31, 2023)
None applicable
FY2023 (April 1, 2023 to March 31, 2024)
This information is not presented because similar information is available in “Segment Information.”[Information on Goodwill Amortization and Unamortized Balance of Each Reportable Segment]
FY2022 (April 1, 2022 to March 31, 2023)(Millions of yen)
Reportable segments

Amortization
during theperiodBalance at theend of theperiodFunctional
solutions

MedicalLifestylecreationsApparelCorporate/
Elimination

Total

Consolidated

88

-

45

-

133

-

133

14

-

157

-

172

-

172

FY2023 (April 1, 2023 to March 31, 2024)(Millions of yen)
Reportable segments

Amortization
during theperiodBalance at theend of theperiodFunctional
solutions

MedicalLifestylecreationsApparelCorporate/
Elimination

Total

Consolidated

14

-

45

-

59

-

59

-

-

112

-

112

-

112

[Information on Gain on Negative Goodwill of Each Reportable Segment]
FY2022 (April 1, 2022 to March 31, 2023)
None applicable
FY2023 (April 1, 2023 to March 31, 2024)
None applicable25

(Per Share Information)
FY2022(April 1, 2022 toMarch 31, 2023)

FY2023(April 1, 2023 toMarch 31, 2024)

Net assets per share (¥)

6,789.78

7,112.73

Earnings per share (¥)

261.38301.11

Diluted earnings per share (¥)

260.75300.42Note:
1. Earnings per share and diluted earnings per share were calculated on the following basis:
FY2022(April 1, 2022 toMarch 31, 2023)

FY2023(April 1, 2023 toMarch 31, 2024)

Earnings per share
Profit attributable to owners of parent (¥ millions)

4,501

5,109

-

-

4,501

5,109

17,22016,969Adjustment to profit attributable to owners of parent(¥ millions)--

Increase in common stock (thousand shares)

41

39[Stock acquisition rights] (thousand shares)

[41]

[39]

Amounts not allocated to common shareholders (¥ millions)
Profit attributable to owners of parent allocated to common
stock (¥ millions)Average number of shares of common stock outstanding
during each term(thousand shares)
Diluted earnings per share

2. Net assets per share were calculated on the following basis:
FY2022(March 31, 2023)
Total net asset value (¥ millions)

FY2023(March 31, 2024)

117,691

120,467

Deduction from net assets (¥ millions)

1,933

1,825

[Non-controlling interests] (¥ millions)[1,808][1,700][Stock acquisition rights] (¥ millions)

[124]

[124]

Term-end net asset value allocated to common stock (¥ millions)

115,757

118,642

Term-end number of shares of common stock used for calculationof net assets per share (thousand shares)

17,048

16,680(Significant Subsequent Events)
None applicable26

4. Supplementary Information
Overview of Consolidated Results<Overview of Results>• Net sales
Net sales declined attributable to such factors as the previous fiscal year’s transfer of the film business in the electronic components
field and the real estate development project.
• Operating profit and ordinary profit
Operating profit and ordinary profit increased primarily due to increased profitability in the apparel business, resulting from pricerevisions, including adding higher value to products, and business restructuring.
• Profit attributable to owners of parent
Profit attributable to owners of parent increased mainly due to the recording of ¥2.5 billion in income taxes - deferred (gain) for
deductible temporary difference related to investments in subsidiaries, among others, and the recording of ¥2.0 billion in gain onsale of investment securities associated with the sale of cross-shareholdings, despite the recording of business restructuring
expenses of ¥2.8 billion as a result of the business restructuring in the electronic components business, the sports club business, andthe apparel business.
<Dividends>• Scheduled dividend payment for the fiscal year ended March 31, 2024 is ¥153 per share.
<Forecasts for the Fiscal Year Ending March 31, 2025>• Due to the expansion of sales of new products and on new sales channels, initiatives to increase productivity, positive effects ofbusiness restructuring, etc., both sales and profits are expected to increase.
• Scheduled dividend payment for the fiscal year ending March 31, 2025 is ¥157 per share.

(1) FY2023 Operating Results (Apr. 1, 2023 to Mar. 31, 2024)(Millions of yen)

FY2023
Net sales

FY2022

132,885

136,030

Operating profit

6,777

5,812

Ordinary profit

6,774

6,021

Profit attributable to owners of parent

5,109

4,501

Total assets

161,971

165,927

Inventories

38,15738,297

Non-current assets

81,174

82,346

Net assets
Financing income/expenses
Interest/Dividends received
Interest expenses
Capital expenditures
Depreciation

120,467
170
378
(208)
9,147
6,208

117,691
248
493
(244)
9,597
5,894

Change<Upper figures inbrackets %><(2.3)>(3,144)<16.6>
965<12.5>
753<13.5>
608<(2.4)>(3,956)<(0.4)>(139)<(1.4)>(1,171)
<2.4>
2,776
(78)
(114)
36
(450)
314

Acquisition of treasury shares, etc.
(Thousands of shares)(Amount)
Treasury shares acquired¥2,006 million
386
Treasury shares disposed¥76 million
17
Treasury shares held at the end of the previous fiscal year244
¥1,044 million
Treasury shares held at the end of the period613¥2,974 million* Treasury shares acquired includes 385 thousand shares purchased at ¥1,999 million as resolved at the Board of
Directors meeting.

27

(2) Results by Business Segment

Operating profit

Net sales

Segment
Functional Solutions
MedicalApparelLifestyle Creations
Subtotal
Elimination
Consolidated
Functional Solutions
MedicalApparelLifestyle Creations
Subtotal
Elimination
Consolidated(Millions of yen)

FY2023
AmountWeight48,975
36.7
11,6978.8
60,11445.0
12,826
9.5
133,614100.0(728)
132,885
6,028
58.4
1,991
19.3
1,465
14.2
833
8.1
10,318100.0(3,541)
6,777

FY2022
AmountWeight49,55536.2
10,9578.0
60,98644.6
15,32711.2
136,827100.0(797)
136,030
6,835
72.7
2,082
22.1
(222)
(2.4)
705
7.6
9,401
100.0
(3,588)5,812

ChangeAmountChange (%)
(580)
(1.2)
740
6.8
(872)
(1.4)
(2,501)(16.3)(3,213)(2.3)
68(3,144)(2.3)(807)(11.8)
(90)
(4.4)
1,688
127
18.1
917
9.8
47
965
16.6

(3) Significant Financial Indicators
Item
Operating profit to total assets ratio
Ordinary profit to total assets ratio
Operating profit to net sales ratio
Ordinary profit to net sales ratio
Turnover of total assets
Equity ratio
ROE
Earnings per share
Diluted earnings per share
Net assets per share

%
%
%
%
times
%
%
¥
¥
¥

(4) Cash Flows

4.1
4.1
5.1
5.1
0.81
73.2
4.4
301.11300.42
7,112.73

FY2022

3.6
3.7
4.3
4.4
0.84
69.8
3.9
261.38260.75
6,789.78

Change

0.5
0.4
0.8
0.7
(0.03)
3.4
0.5
39.73
39.67
322.95(Millions of yen)
FY2023

FY2022

Operating activities

10,4091,794

Investing activities(190)(5,920)Financing activities(11,347)
Effect of exchange rate change on cash
and cash equivalents
400
Net increase (decrease) in cash andcash equivalents(728)
Cash and cash equivalents at end of
period10,818

1,007

Cash Flow Activity

FY2023

ChangeBreakdown of Major Components

8,614 Profit before income taxes: 4,504; Depreciation: 6,149
Proceeds from sale of investment securities: 7,094;
5,729 Purchase of non-current assets: (7,166)
Decrease in long- and short-term borrowings:(6,697);
Dividends paid: (2,497); Purchase of treasury shares:(12,355) (2,006)

196

204

(2,922)

2,193

11,547(728)

28

(5) Capital Expenditures and Depreciation and Amortization by Segment(Millions of yen)

FY2023
FY2022Y-over-Y
FY2024 Plan
Y-over-Y
Amount Weight Amount Weight Change Amount Weight Change
Functional Solutions
4,672
51.1
4,816
45.6
(144)
2,200
22.0 (2,472)
Capital expenditures Medical
403
4.4
553
10.3
(150)
4,100
41.0
3,697
Apparel
1,888
20.6
1,493
15.6
395
2,100
21.0
212
* Incl. intangible
LifestyleCreations
1,597
17.5
2,053
21.4
(456)
1,100
11.0
(497)
assetsCorporate
584
6.4
680
7.1
(96)
500
5.0
(84)
Total
9,147 100.0
9,597 100.0(450)
10,000 100.0853
Functional Solutions
2,478
39.9
2,423
41.2
55
2,800
41.2
322
Depreciation
Medical
453
7.3
371
6.3
82
500
7.4
47
Apparel
1,346
21.7
1,250
21.2
96
1,500
22.1
154
* Incl. amortization ofLifestyle Creations
1,440
23.2
1,370
23.2
70
1,500
22.1
60
goodwill
Corporate
488
7.9
478
8.1
10
500
7.4
12
Total
6,208 100.0
5,894 100.0314
6,800 100.0
592
Item

Main Investment Plans for FY2024• Measures to increase production of and building a new factory for medical products: ¥3,200 million• Apparel smart factory production equipment and system improvement:¥500 million• Plastic film resource-circulating equipment:¥200 million• Renovation of the commercial facilities:¥200 million(6) FY2024 Forecast
Item
Net sales
Operating profit
Ordinary profit
Profit attributable to owners ofparent(Millions of yen)

FY2024 Forecast

FY2023 Results

140,000
9,000
9,000

132,885
6,777
6,774

7,500

5,109

(7) Forecast of Results by Segment

Operating profit

Net sales

Item
Functional Solutions
MedicalApparelLifestyle Creations
Subtotal
Elimination
Consolidated
Functional Solutions
MedicalApparelLifestyle Creations
Subtotal
Elimination
Consolidated

ChangeAmountChange (%)
7,115
5.4
2,223
32.8
2,226
32.9
2,391

46.8

(Millions of yen)

FY2024 Forecast
AmountWeight
49,70035.3
13,0009.2
65,20046.3
12,9009.2
140,800
100.0(800)
140,000
7,200
56.7
2,500
19.7
1,900
15.0
1,100
8.6
12,700100.0(3,700)9,000

29

FY2023 Results
AmountWeight48,975
36.7
11,6978.8
60,11445.0
12,826
9.5
133,614100.0(728)
132,885
6,028
58.4
1,991
19.3
1,465
14.2
833
8.1
10,318100.0(3,541)
6,777

ChangeAmountChange (%)
725
1.5
1,303
11.1
5,086
8.5
74
0.6
7,186
5.4
(72)
7,115
5.4
1,172
19.4
509
25.6
435
29.7
267
32.1
2,382
23.1
(159)
2,223
32.8