Consolidated Financial Statements for the Fiscal Year Ended March 31, 2016 (U.S. Accounting Standards)[Translation]
May 9, 2016
Listed Company: Wacoal Holdings Corp.
Stock Exchanges: Tokyo (1st section)
Code Number: 3591 URL: http://www.wacoalholdings.jp/
Representative: (Position) Representative Director(Name) Yoshikata Tsukamoto
For Inquiries:(Position) General Manager of Corporate Planning(Name) Akira Miyagi
Tel: +81 (075) 682-1010
Scheduled date of Ordinary Shareholders’ Meeting: June 29, 2016 Scheduled Commencement Date of Dividend Payment: June 6, 2016
Scheduled date of Annual Securities Report Filing: June 29, 2016
Supplementary materials regarding Annual Business Results: Yes
Explanatory meeting regarding Annual Business Results: Yes(Amounts less than 1 million yen have been rounded.)1.

Consolidated Results for the Fiscal Year Ended March 31, 2016 (April 1, 2015 – March 31, 2016)(1) Consolidated Business Results(% indicates changes from previous fiscal year)
Net Sales

Fiscal Year Ended March 31, 2016
Fiscal Year Ended March 31, 2015
(Note) Comprehensive income:Operating Income

Income Before Income
Taxes and Equity in Net
Income of AffiliatedCompanies

Net Income
Attributable to Wacoal
Holdings Corp.

Millions of Yen %Millions of Yen %Millions of Yen %202,917 5.8
13,86595.8
14,95731.9
191,765 (1.0)
7,082(48.9)
11,342(24.6)
Fiscal Year ended March 31, 2016: (49) million yen (- %)Fiscal Year ended March 31, 2015: 28,813 million yen (26.7%)

Net Income
Attributable to
Wacoal Holdings
Corp. Per Share
Yen
Fiscal Year Ended March 31, 2016
79.23
Fiscal Year Ended March 31, 2015
59.95
(Reference) Equity in net income of affiliated companies:

Diluted Net
Earnings
Attributable to
Wacoal Holdings
Corp. Per Share

Millions of Yen %11,15932.2
8,444(16.4)

Ratio of Net Income
Attributable toRatio of Pre-tax
Wacoal Holdings
Net Income toCorp. toTotal Assets
Shareholders’ Equity

Ratio of
Operating
Income to Net
Sales

Yen
%
%
79.00
4.9
5.0
59.80
3.9
4.0
Fiscal Year ended March 31, 2016: 1,245 million yen
Fiscal Year ended March 31, 2015: 705 million yen

%
6.8
3.7

(2) Consolidated Financial Condition

Total Assets

Fiscal Year Ended March 31, 2016
Fiscal Year Ended March 31, 2015

Total Equity(Net Assets)

Millions of Yen Millions of Yen
292,854229,401
300,272
231,568

Total Shareholders’ Total Shareholders’EquityEquity Ratio
Millions of Yen
224,375
228,857

%
76.6
76.2

Shareholders’EquityPer ShareYen
1,592.91
1,624.93(3) Consolidated Cash Flow Status

Fiscal Year Ended March 31, 2016
Fiscal Year Ended March 31, 2015

Cash Flow provided Cash Flow provided by Cash Flow provided by Balance of Cash and Cashby Operating(used in) Investing(used in) Financing
Equivalents at End of Fiscal
Activities
Activities
Activities
Year
Millions of Yen
Millions of Yen
Millions of Yen
Millions of Yen
12,634(11,407)(4,547)
34,05914,337164(8,391)
38,410-1-

2.

Status of Dividends

Annual Dividend

Fiscal Year Ended March 31, 2015
Fiscal Year Ended March 31, 2016
Fiscal Year Ending March 31,2017 (Estimates)3.

End ofFirst
Quarter

End ofSecondQuarter

End ofThird
QuarterYear-end

Annual

Yen

Yen

Yen

Yen

Yen

-

-

-

30.00
33.00
33.00

30.00
33.00
33.00

Total
Amount ofDividends(annual)Payout Ratio(consolidated)

Ratio of
Dividend to
Shareholders’Equity(consolidated)

%

%

50.0
41.7
46.5

1.9
2.1

Millions of
Yen
4,225
4,648

Forecast of Consolidated Results for the Fiscal Year Ending March 31, 2017 (April 1, 2016 – March 31, 2017)(% indicates changes from the previous fiscal year with respect to “Annual” and from the six-month period ended September 30, 2015 withrespect to “Six-month Period Ending September 30, 2016”)
Net Income
Net Income
Attributable toAttributable to
Net Sales
Operating Income Pre-tax Net Income
Wacoal Holdings
Wacoal Holdings
Corp.
Corp. Per Share
Millions of Yen %Millions of Yen %Millions of Yen %Millions of Yen %YenSix-month Period Ending
104,000 (1.6)
6,000 (38.0)
10,000 (6.1)
6,800 (9.1)
48.28
September 30, 2016
Annual203,000 0.0
10,000 (27.9)
14,500 (3.1)
10,000 (10.4)
71.00*Notes(1) Changes in significant subsidiaries during the fiscal year ended March 31, 2016 (change in scope of consolidation): Yes
New: Yes (One Company: A Tech Textile Co., Ltd.)
Excluded: None
(Note) For details, please see “(7) Basic Significant Matters in Preparation of Consolidated Financial Statements” in Section 5“Consolidated Financial Statements” on page 20.
(2) Changes in Accounting Principles:(i) Changes due to modifications in accounting standards, etc.: None(ii) Changes other than (i) above: None
(Note) For details, please see “(7) Basic Significant Matters in Preparation of Consolidated Financial Statements” in Section 5“Consolidated Financial Statements” on page 20.
(3) Number of Issued Shares (Common Stock)

(i)
(ii)
(iii)

Number of issued shares (including treasury stock) as of period-end:
Number of shares held as treasury stock as of period-end:
Average number of shares during the period:

Fiscal Year Ended
March 31, 2016
143,378,085 shares
2,519,350 shares
140,842,184 sharesFiscal Year Ended
March 31, 2015
143,378,085 shares
2,537,276 shares
140,839,059 shares(Reference) Summary of Non-consolidated Results1.

Non-consolidated Results for the Fiscal Year Ended March 31, 2016 (April 1, 2015 – March 31, 2016)(1) Non-consolidated Business Results

Fiscal Year Ended March 31, 2016
Fiscal Year Ended March 31, 2015

Net Sales
Millions of Yen %10,934
0.3
10,898
21.5

Fiscal Year Ended March 31, 2016
Fiscal Year Ended March 31, 2015

Net Income
Per ShareYen
47.85(3.84)

Operating Income
Millions of Yen %
7,016
(1.2)
7,102
37.8
Diluted Net Earnings
Per Share
Yen
47.69
-

-2-

(% indicates changes from previous fiscal year)
Ordinary Income
Net Income
Millions of Yen %Millions of Yen %
7,044
(4.1)
6,739
7,350
38.6
(541)
-

(2) Non-consolidated Financial Condition(% indicates changes from previous fiscal year)
Total Assets
Net Assets
Capital-to-asset Ratio
Net Asset per Share
Millions of Yen
Millions of Yen%
Yen
Fiscal Year Ended March 31, 2016
163,972
143,13587.0
1,013.19
Fiscal Year Ended March 31, 2015
168,762
140,57883.0
995.48(Reference) Equity Capital: As of the end of the fiscal year ended March 31, 2016: 142,717 million yen
As of the end of the fiscal year ended March 31, 2015: 140,205 million yen*Notes on Implementation of Audit Procedures
These financial statements are not subject to the audit procedures based on the Financial Instruments and Exchange Law. The audit
procedures for annual financial statements based on the Financial Instruments and Exchange Law had not been completed as of the time of
disclosure of these financial statements.
*Cautionary Statement regarding Forward Looking Statements
The foregoing estimates are made based on information available as of the date this data was released, and actual results may differ fromestimates due to various factors arising in the future.
Statements made in this report regarding Wacoal’s or management’s intentions, beliefs, expectations, or predictions for the future areforward-looking statements that are based on Wacoal’s and managements’ current expectations, assumptions, estimates and projections about
its business and the industry. These forward-looking statements, such as statements regarding fiscal year 2017 revenues and operating and net
profitability, are subject to various risks, uncertainties and other factors that could cause Wacoal’s actual results to differ materially from thosecontained in any forward-looking statement.

-3-

Table of Contents for Attached Materials
1.

Business Results -------------------------------------------------------------------------------------------------------------------------------------- 5(1)

Analysis of Business Results ------------------------------------------------------------------------------------------------------------------------ 5(2)

Analysis of Financial Condition -------------------------------------------------------------------------------------------------------------------- 8(3)

Basic Policy Regarding Distribution of Profits and Dividends for Fiscal Year 2016 and Fiscal Year 2017 ------------------------------ 92.

Status of Corporate Group ------------------------------------------------------------------------------------------------------------------------- 10

3.

Management Policies ------------------------------------------------------------------------------------------------------------------------------- 12(1)

Basic Business Policy ------------------------------------------------------------------------------------------------------------------------------ 12(2)

Measures for Business Targets -------------------------------------------------------------------------------------------------------------------- 12(3)

Our Medium- and Long-Term Business Strategy ----------------------------------------------------------------------------------------------- 12(4)

Issues to Address ------------------------------------------------------------------------------------------------------------------------------------ 12

4.

Basic Policies regarding Selection of Accounting Standards----------------------------------------------------------------------------------- 13

5.

Consolidated Financial Statements --------------------------------------------------------------------------------------------------------------- 14(1)

Consolidated Balance Sheets ---------------------------------------------------------------------------------------------------------------------- 14(2)

Consolidated Statements of Income--------------------------------------------------------------------------------------------------------------- 16(3)

Consolidated Statements of Comprehensive Income ------------------------------------------------------------------------------------------- 17(4)

Consolidated Statements of Equity ---------------------------------------------------------------------------------------------------------------- 17(5)

Consolidated Statements of Cash Flows ---------------------------------------------------------------------------------------------------------- 19(6)

Notes on Going Concern --------------------------------------------------------------------------------------------------------------------------- 20(7)

Basic Significant Matters in Preparation of Consolidated Financial Statements ------------------------------------------------------------ 20(8)

Notes to the Consolidated Financial Statements ------------------------------------------------------------------------------------------------ 21

6.

Other -------------------------------------------------------------------------------------------------------------------------------------------------- 25-4-

Qualitative Information and Financial Statements
1.

Business Results(1) Analysis of Business Results
Results for the Fiscal Year Ended March 31, 2016
Our group entered the last year of our three-year mid-term plan (from fiscal year 2014 to fiscal year 2016), and we (primarily Wacoal
Corp., our core operating entity) continued to make efforts to expand our share of sales by responding to the diversifying domestic women’s
innerwear market, establish a system for our business other than the women’s innerwear business and strengthen our growth and profitability byactively developing our overseas business.
As a result of the above, with respect to our consolidated business results for fiscal year ended March 31, 2016, sales from our domestic
business exceeded the results for the previous fiscal year as a result of the inclusion of sales of Ai Co., Ltd. and the increase in shops of our retailbusiness. Overall sales exceeded the results for the previous fiscal year due to such superior performance of our domestic business and ouroverseas business, which were inflated by the depreciation of the Japanese yen. In terms of profit, overall operating income largely exceeded
the results for the previous fiscal year as a result of the impairment charges which we recognized in relation to our Peach John business during
the previous fiscal year.
Net Sales:

202,917 million yen(an increase of 5.8% as compared to the previous fiscal year)

Operating income:

13,865 million yen(an increase of 95.8% as compared to the previous fiscal year)

Income before income
taxes and equity in net
income of affiliatedcompanies:

14,957 million yen(an increase of 31.9% as compared to the previous fiscal year)

Net income
attributable to Wacoal
Holdings Corp.:

11,159 million yen(an increase of 32.2% as compared to the previous fiscal year)

Business Overview of Our Operating Segmentsa.

Wacoal Business (Domestic)In our domestic business, we focused on establishing a system which can respond to changes in the external environment, and made efforts
to expand customer contact, by taking measures to respond to growing inbound consumption and carrying out cross-channel initiatives in ruraland unexploited areas. We also made efforts to develop and expand our products targeting a generation that only recently started wearing
brassieres and middle-aged and senior consumers.
With respect to our Wacoal brand business, our core brassieres products and products for seniors showed favorable performance. Despite
the strong continued inbound demand at department stores in urban areas and our successful promotion of red underwear products, inconnection with an old saying that wearing red underwear brings good luck, in the last six months of the current fiscal year, overall sales
remained unchanged from the previous fiscal year.
With respect to our Wing brand business, overall sales remained unchanged from the previous fiscal year due to the expansion of shops
handling our products for teens as well as the strong performance of our core brassieres products, mainly our regular items.
In our retail business, sales from our directly managed retail store, AMPHI, showed steady performance as a result of our successful
initiatives of exclusive offers for members and various monthly sales promotions, and a significant increase of sales through e-commerce
websites of other companies. Sales were also largely driven by inbound demand with respect to our Wacoal Factory Store in outlet malls,
particularly in areas around airports, and as a result, overall sales largely exceeded the results for the previous fiscal year.
In our wellness business, with respect to our sports conditioning wear “CW-X” brand products, while sales through existing channels,
including sports specialty stores, showed weak performance since we were not successful in attracting new customers, overall sales remained
unchanged from the previous fiscal year as a result of offering and expanding new products for daily use.
In our catalog sales business, sales from our catalog products were below the results from the previous fiscal year due to the impact of
reducing the number of products in our catalogues and decreasing the number of issues of our main catalogues to improve profitability.
Although our internet sales from our website performed strongly as a result of an increase in the number of visitors of our website because we-5-were no longer affected by the shutdown of our website that occurred in the previous year and as a result of our strengthening of our efforts to
attract visitors using smartphones, overall sales fell below the results for the previous fiscal year.
With respect to Ai Co., Ltd., our domestic subsidiary which handles the swimwear business and directly managed underwear business,
which we acquired from San-Ai group during the current fiscal year, sales from the swimwear business were below the sales we anticipated in
our plan due to unstable summer weather. In addition, sales from the underwear business also performed poorly, and were below the sales weanticipated in our plan.
In summary, overall sales attributable to our “Wacoal Business (Domestic)” segment exceeded the results for the previous fiscal year due
to increased sales from Wacoal Corp., our core operating entity, and the inclusion of sales from Ai Co., Ltd. With respect to profitability, ouroperating income also exceeded the results for the previous fiscal year as a result of the increased sales from Wacoal Corp.

b.

Net Sales:

120,570 million yen(an increase of 7.5% as compared to the previous fiscal year)

Operating income:

8,810 million yen(an increase of 4.3% as compared to the previous fiscal year)

Wacoal Business (Overseas)

In the United States, Wacoal America, Inc. made efforts to improve profits by expanding its share in the high-end market and throughenhancing sales of our “b.tempt’d” brand products. Despite inventory control at department stores in the United States, overall sales exceeded
the results for the previous fiscal year as a result of strong performance of our core Wacoal brand products and favorable results of our sales
from e-commerce websites and of our exports to surrounding countries (Canada). In terms of profit, operating income on a local currency basis
fell below the results for the previous fiscal year due to an increase in selling, general and administrative expenses which resulted fromincreased labor costs, while we controlled PR related costs. However, operating income on a yen converted basis exceeded the results for theprevious fiscal year due to the depreciated yen.
With respect to Wacoal Europe, we made efforts to promote our Wacoal portfolio brands’ recognition and to expand sales of the Wacoal
brand across Europe and Australia. With regard to sales, sales in the United States and Australia were strong, while sales in the United
Kingdom remained unchanged from the previous fiscal year. However, consumer spending in the Eurozone area did not show recovery due toan unstable political and economic atmosphere. Therefore, sales in the Eurozone area fell significantly below the results for the previous fiscal
year, due to the impact of the weak performance of our Huit brand products, in addition to the poor performance overall, particularly in France.
As a result, total sales on a local currency basis fell below the results for the previous fiscal year, but sales on a yen converted basis remained
unchanged from the previous fiscal year. With regard to profit, operating income largely fell below the results for the previous fiscal year as aresult of decreased sales and an increase in purchase costs due to the appreciation of the dollar.
With respect to our business in China, we made efforts to expand our brands targeting the middle-class market and to establish a profit
system. Sales during the first six months of the current fiscal year from January to June showed favorable performance. Despite sales growthslowed down during the second half of the current fiscal year from July to December during which there was increasing concern that theeconomic slowdown was going to intensify as a result of decreasing the number of shop openings of LA ROSABELLO, our brand targeting the
middle-class market, and failing to achieve our sales target for our campaign on an external e-commerce websites in November 2015, overallsales exceeded the results for the previous fiscal year. In terms of profit, operating income largely exceeded the results for the previous fiscal
year due to increased sales.
As a result of the above, with respect to the overall sales and operating income attributable to our “Wacoal Business (Overseas)” segment,
overall sales exceeded the results for the previous fiscal year, while operating income fell below the results for the previous fiscal year.

c.

Net Sales:

51,869 million yen(an increase of 7.8% as compared to the previous fiscal year)

Operating income:

4,433 million yen(a decrease of 7.2% as compared to the previous fiscal year)

Peach John BusinessWith respect to Peach John Co., Ltd., we made efforts to maintain existing customer contacts in our three-brand framework and to expand
contact with new customers through shop openings. Sales from our core mail-order catalogues largely fell below the results for the previous
fiscal year due to the decreased number of users visiting e-commerce websites. On the other hand, inbound demand contributed to sales fromour domestic direct retail stores which largely exceeded the results for the previous fiscal year as a result of keeping a fresh merchandising
approach by changing the products offered in our shops on a weekly basis. With respect to our overseas business, sales largely exceeded theresults for the previous fiscal year due to a significant expansion of sales through e-commerce websites of other companies in China despite theweak performance of shop sales in Hong Kong, which offset a decrease in sales resulting from our initiatives to discontinue ourunderperforming shops for our business. As a result of the above, overall sales from our Peach John business fell below the results for theprevious fiscal year. In terms of profit, our operating income significantly improved from the previous fiscal year, during which we recorded an-6-operating loss, as a result of our efforts to improve sales by reviewing our pricing method and by holding fewer sales campaigns as well as of
the impairment charges which we recognized during the previous fiscal year, in addition to a decrease in operating loss incurred from ourbusiness in China.

d.

Net Sales:

11,190 million yen(a decrease of 3.8% as compared to the previous fiscal year)

Operating income:

258 million yen(6,296 million yen of operating loss recorded for the previous fiscal year)

Other

With respect to the business of Lecien Corporation (“Lecien”), we made efforts to cultivate new sales channels and to build up our
production base. Overall sales from Lecien fell below the results for the previous fiscal year due to the weak sales from our apparel businessdivision, although sales of our products to our major clients performed strongly in our core innerwear business division. In terms of profit, werecorded an operating loss, although there was a little sign of recovery as compared to the previous fiscal year as a result of the reduced cost of
raw materials and reviewing purchasing prices.
As for Nanasai Co., Ltd. (“Nanasai”), we made efforts to maintain and expand our rental business, as well as increase sales by acquiring
new construction businesses. Sales from the rental business fell below the results for the previous fiscal year. As for our construction business,
although we received orders for the construction of new commercial facilities and orders from apparel brands, sales also fell below the results
for the previous fiscal year as we did not receive large-scale orders as we did during the previous fiscal year. Sales from our sales businessshowed an increase in the delivery of fixtures in connection with the construction orders received and largely exceeded the results for theprevious fiscal year. As a result, overall sales exceeded the results for the previous fiscal year. In terms of profit, operating income largely
exceeded the results for the previous fiscal year due to increased sales.
As a result of the above, with respect to the overall sales and operating income attributable to our “Other” segment, overall sales fell below
the results for the previous fiscal year, while operating income largely exceeded the results for the previous fiscal year.
Net Sales:

19,288 million yen(a decrease of 2.7% as compared to the previous fiscal year)

Operating income:

364 million yen(an increase of 130.4% as compared to the previous fiscal year)

Forecast for Next Fiscal Year
In Japan, consumer spending trends are unpredictable as consumers continue to be budget-conscious due to rising prices, while income
level is growing at a sluggish pace. In addition, the uncertainty of the state of the global economy, such as in Europe and China, are causes forconcern. Therefore we anticipate that the management environment surrounding our group will continue to remain very difficult. In such anenvironment, we plan to undertake structural transformation initiatives, as well as further enhance profitability and corporate value. We alsoplan to work on our new mid-term plan, which will start during fiscal year 2017, with the aim of creating a global company.
In our domestic business, while we cope with the downsizing of existing distribution channels and promote streamlining of organization,
human recourses and inventory, we will initiate infrastructure development to place our directly managed stores and e-commerce websites atthe core of future customer contact. In addition, we will review our business infrastructure allocated separately for each business division andmake efforts to achieve efficient resources allocation. In our overseas business, we will work to stabilize profits in the United States, Europe
and China, the three largest markets in the world, and thereby establish a stable management structure. We will make efforts to enhancecompetitiveness by promoting collaboration among group companies. In addition to our aim to stabilize our production base in the ASEAN
region in the early phase, for which we have already taken initiatives, we will enhance the production capability of Lecien.
Our forecast for the next fiscal year is as follows. With regard to the primary exchange rates, the exchange rate for the U.S. dollar isassumed to be 110 yen to the dollar, the exchange for the Sterling pound is assumed to be 160 yen to the pound, and the exchange rate for the
Chinese yuan is assumed to be 17 yen to the yuan.
Net Sales:

203,000 million yen(remained at the same level as the previous fiscal year)

Operating income:

10,000 million yen(a decrease of 27.9% as compared to the previous fiscal year)

Income before income
taxes and equity in net
income of affiliated

14,500 million yen(a decrease of 3.1% as compared to the previous fiscal year)-7-companies:
Net income
attributable to Wacoal
Holdings Corp.:

10,000 million yen(a decrease of 10.4% as compared to the previous fiscal year)(2) Analysis of Financial Condition
Status of Assets, Liabilities and Shareholders’ Equity
Our total assets as of March 31, 2016 were 292,854 million yen, a decrease of 7,418 million yen from the end of the previous fiscal
year, due to decreases in cash and cash equivalents and investments.
With regard to liabilities, our current liabilities were 63,453 million yen, a decrease of 5,251 million yen from the end of the previous
fiscal year, due to decreases in long-term debt and deferred income taxes.
Shareholders’ equity was 224,375 million yen, a decrease of 4,482 million yen from the end of the previous fiscal year, due todecreases in foreign currency translation adjustments and pension liability adjustments.
As a result of the above, our total shareholders’ equity ratio as of March 31, 2016 was 76.6%, an increase of 0.4% from the end of theprevious fiscal year.
Cash Flows Status
Cash flow provided by operating activities:
Cash flow provided by operating activities was 12,634 million yen, a decrease of 1,703 million yen as compared to the previous fiscal
year, which reflects the result of adjusting the net income of 11,472 million yen for depreciation expenses and deferred taxes, as well as changes
in assets and liabilities.
Cash flow used in investing activities:
Cash flow used in investing activities was 11,407 million yen, an increase of 11,571 million yen as compared to the previous fiscal
year, due to capital expenditures.
Cash flow used in financing activities:
Cash flow used in financing activities was 4,547 million yen, a decrease of 3,844 million yen as compared to the previous fiscal year,
due to cash dividend payments and repayment of long-term debt.
As a result, the balance of cash and cash equivalents at the end of fiscal year 2016, calculated by adding the exchange difference on
cash and cash equivalents to the above total, was 34,059 million yen, a decrease of 4,351 million yen as compared to the end of the previous
fiscal year.
Free cash flow, which was calculated by subtracting the amount of capital investment from the cash flow provided by operating
activities, amounted to 3,656 million yen.

-8-Trends in certain cash-flow indicators

Shareholders’ equity ratio (%)
Shareholders’ equity ratio basedon market value (%)
Debt redemption years (years)
Interest coverage ratio (times)

Fiscal Year
Ended
March 31, 2014

Fiscal Year
Ended
March 31, 2015

Fiscal Year
Ended
March 31, 2016

75.4

76.2

76.6

54.5

63.4

64.6

2.0

1.0

1.0

91.3

143.4

188.6

Shareholders’ equity ratio = shareholders’ equity/total assets
Shareholders’ equity ratio based on the market value = aggregate market value of shareholders’ equity/total assets
Debt redemption years = interest-bearing debt/cash flow provided by operating activities
Interest coverage ratio = cash flow provided by operating activities/interest payment
Interest payment = “cash paid for interest” as described in the additional cash flow information following the consolidated statementsof cash flows(3) Basic Policy Regarding Distribution of Profits and Dividends for Fiscal Year 2016 and Fiscal Year 2017
Our basic policy on profit distributions to shareholders is to make stable distributions based on our consolidated performance, while
seeking to increase our enterprise value through active investments aimed at higher profitability and to increase net income per share. As forretained earnings, with the aim of improving our corporate value, we have actively invested and will continue to actively invest in expanding
our customer bases for our domestic business and our overseas businesses. We also plan to use our retained earnings for strategic investments
for maintaining competitiveness and reinforcing growth. With these efforts, we seek to benefit our shareholders by improving future
profitability. We also intend to acquire treasury stock in a flexible manner, and will try to improve capital efficiency and return profits to ourshareholders.
Based on this policy, we plan to distribute 33.00 yen per share, as initially announced. For the fiscal year ending March 31, 2017, cash
dividend per share will remain unchanged.

-9-

2.

Status of Corporate Group

Our corporate group consists of Wacoal Holdings Corp. (the “Company”), 58 subsidiaries and 9 affiliates, and is principally 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 sale of certain products to consumers. Our corporategroup also conducts business in the restaurant, culture, services, and interior design businesses.
Segment information and a summary of the various companies that make up our corporate group are as follows.
Business Segment

Operating Segment

Major Affiliated Companies

Wacoal Business(Domestic)

Manufacturing and
Sales
Sales

Wacoal Corp.

ApparelManufacturing

Kyushu Wacoal Manufacturing Corp., Hokuriku Wacoal Sewing Corp.,
Niigata Wacoal Sewing Corp., Torica Inc.

Other Textile
Related
Cultural Business
Service
Other Business

Wacoal Distribution Corp.

(Total: 1 company)
Une Nana Cool Corp.
Three other companies(Total: 4 companies)(Total: 4 companies)

Wacoal Business(Overseas)

Manufacturing and
Sales

Sales

ApparelManufacturing

Other Textile
Related
Other Business

Peach John Business Sales

Other

Manufacturing andSales
ApparelManufacturing
Other Textile
Related
Other Business(Total: 1 company)
Wacoal Art Center, Ltd.
(Total: 1 company)
Wacoal Holdings Corp.
(Total: 1 company)
Wacoal America, Inc., Wacoal EMEA Ltd. (U.K.), Wacoal China Co., Ltd.,
Shinyoung Wacoal Inc. (South Korea), Taiwan Wacoal Co., Ltd.
Thai Wacoal Public Co., Ltd.
Three other companies(Total: 9 companies)
Wacoal Singapore Private Ltd., Wacoal Hong Kong Co., Ltd.,
Wacoal Europe SAS (France), EVEDEN INC. (U.S.)
Twelve other companies(Total: 16 companies)
Wacoal Dominicana Corp. (Dominican Republic),
Guandong Wacoal Inc., Wacoal Timex Limited (Sri Lanka)
Four other companies(Total: 7 companies)
Wacoal International Hong Kong Co., Ltd., A Tech Textile Co., Ltd. (Thailand)
One other company(Total: 3 companies)
Wacoal International Corp. (U.S.), Wacoal Europe Ltd. (U.K.),
Wacoal Investment Co., Ltd. (Taiwan)
Two other companies(Total: 5 companies)
Peach John Co., Ltd.
Two other companies(Total: 3 companies)
Lecien Corporation
One other company(Total: 2 companies)
Lecien (Vietnam) Co., Ltd.
Four other companies(Total: 5 companies)
Shanghai Lecien Co., Ltd.
(Total: 1 company)
Nanasai Co., Ltd., Wacoal Service Co., Ltd., Wacoal Career Service Corp.,
House of Rose Co., Ltd.
One other company(Total: 5 companies)- 10 -

The business distribution diagram is as follows:
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: 4 companies)
Une Nana Cool Corp.
3 other companies

Wacoal Business (Domestic)

Peach John Business

Wacoal Business (Overseas)

Other(North/Central America: 9 companies)
WACOAL INTERNATIONAL CORP. (U.S.)
WACOAL AMERICA, INC.
WACOAL DOMINICANA CORP.

(Sales: 3 companies)
Peach John Co., Ltd.
2 other companies(U.S.)(Dominican Republic)
EVEDEN INC(U.S.)
5 other companies(Europe: 7 companies)
WACOAL EUROPE LIMITED(U.K.)WACOAL EMEA LIMITED(U.K.)WACOAL EUROPE SAS(France)4 other companies(Asia/Oceania: 24 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)
Out of 13 other companies,
4 equity method affiliates

Wacoal Holdings Corp. (holding company)
Without mark: a consolidated subsidiary*: an equity method affiliate- 11 -(Lecian: 8 companies)
Lecian Corporation
LECIEN(VIETNAM)CO.,LTD.
(Vietnam)
Out of 6 other companies,
1 equity method affiliate(Other: 5 companies)
Nanasai Co., Ltd.
Wacoal Service Co., Ltd.
Wacoal Career Service Corp.
*House of Rose Co., Ltd.
1 other company

3.

Management Policies(1) Basic Business Policy

Our business activities are built upon “relationships of mutual trust” based on listening to the voice of each and every one of our customers
and by operating our business with humility. This spirit of “mutual trust” is our starting point and has been our management philosophy since
our establishment. We will continuously enhance our corporate value by increasing transparency and ensuring the fairness and independenceof our corporate management in order to build “mutual trust” in relationships with every stakeholder, including shareholders, customers,
employees, business partners and the local community.
(2) Measures for Business Targets
For the near future, our target is to achieve a consolidated operating income margin of 7% or higher.
(3) Our Medium- and Long-term Business Strategy
Our group aims for “Wacoal of the World as a Group” with the implementation of the three-year mid-term plan which will start during
fiscal 2017. In order to achieve our aim, we will take full advantage of our management resources and network channel within our group,
continue to offer pioneering products, cultivate new market opportunities for the undergarments industry and gain a reputation for reliability
from the customers around the world. In addition, we will challenge ourselves to participate in the areas where we are most competitive andexpand to new business domains in order to improve corporate value.
Under the three-year mid-term plan, we aim to achieve consolidated sales of 215,000 million yen and a consolidated operating income of
15,000 million yen.
Basic Policy of Mid- and Long-term Strategy(i)Improved Profitability of Domestic BusinessWe will aim to expand our customer base and to become more efficient by reviewing the sales channels of our core businesses, rebuilding
our business platform in future undertakings and by offering high value-added products.
(ii) Further Growth of Overseas BusinessIn addition to increasing sales in emerging markets, as for the United States, Europe and China, the three largest markets in the world, we
will promptly implement measures to solve any issues that we have in these markets and will build a stable management structure in order tomaintain a stable high-profit margin in these markets.
(iii) Achieving Group Synergy through Collaboration and Strengthening CompetitivenessWe will establish production bases and strengthen collaboration in the ASEAN region, and enhance competitiveness by making the mostof our OEM and ODM facilities within our group.
(iv) Infrastructure Improvement for Group Management BaseWe will aim to become a global company by improving readiness and the quality of our consolidated management control andstreamlining back-office divisions through our management policies, and by further developing our corporate governance and compliancemanagement.
(v) Take on New BusinessWe will actively make efforts to create new innerwear markets and expand into new businesses other than innerwear to achieve further
growth.
(4) Issues to Address
Maintaining and/or expanding sales and profits from our domestic business are an essential factor for our group’s sustainable growth. The
low growth in real disposal income causes customers to be more budget-minded and consumer spending trends remain unpredictable. Also, as
the closing of commercial facilities continues, the environment for domestic women’s innerwear becomes very difficult. On the other hand,
growth in inbound consumption due to an increase in the number of tourists visiting Japan, a change in the way we interact with our customers
due to the expansion of e-commerce websites, women’s participation and success in society, and the 2020 Tokyo Olympics are good
opportunities for us to create new markets.
In this external environment, we will revitalize the entire market as a leader in the industry, and actively make investments to enhancecustomer contact and to review our business platform. With respect to our sales channel strategy, we will expand sales in the growing sales- 12 -

channels by reforming our sales entities in the existing channels and improve their productivity, by leveraging our strengths of having both
e-commerce websites and a shops sales channel, and by building a system that will provide mutual supplement effects.
In terms of product strategy, we will develop high value-added products with new concept of beauty and comfort by using our own data
and know-how which we gained from our longtime research and development. We will also strengthen our approach to the first-bra age groupand senior customers. Besides our domestic women’s innerwear market, we will promote a growth strategy for new markets so that they canpotentially become our new business lines.
Our overseas business is and will always be our group’s biggest growth engine. An accurate understanding of the social environment andconsumers’ needs in each country and region and the establishment of community-based product and marketing strategies will be essential forus. In addition to expanding sales in emerging markets, we will work to enhance our brand recognition in the United States, to enhance ourmanagement system for our business in Europe, and to further improve profitability for our business in China, and work to build a stable
management structure in these three largest markets in the world.
We are also facing challenges in an increasingly difficult external environment for manufacturing due to increasing salaries in Asian
countries and risks from the procurement of raw materials. We will strengthen the collaboration among group companies to extend our global
supply chain and to enable the improvement of product competitiveness and a stable supply.
4.

Basic Policies regarding Selection of Accounting Standards

Our group has been preparing our consolidated financial statements based on U.S. accounting standards prior to the introduction of theaccounting standards for consolidated financial statements in Japan and, for this reason, we have been adopting U.S. accounting standards.
In view of adopting International Financial Reporting Standards in the future, our group is making efforts to prepare internal manuals andguidelines.

- 13 -

5.

Consolidated Financial Statements (Unaudited)(1) Consolidated Balance Sheets

Accounts

As of March 31, 2015

As of March 31, 2016

(Assets)

Millions of Yen

Millions of Yen

AmountIncreased/(Decreased)
Millions of Yen

I. Current assets
Cash and cash equivalents

38,41034,059(4,351)Time deposits

2,687

2,131

(556)

Marketable securities

2,387

1,880

(507)

Notes and accounts receivable
Allowance for returns anddoubtful receivables
Inventories

26,54426,936392(2,409)42,893(2,229)44,445180
1,552

Deferred income taxes

5,488

3,832

(1,656)

Other current assets

4,264

5,797

1,533

120,264

116,851(3,413)Land

22,00921,677(332)

Buildings and building improvements

64,03865,056

1,018

Machinery and equipment

16,76017,552792

Construction in progress

923

5,419

4,496

103,730

109,704

5,974(54,542)(55,766)(1,224)49,18853,9384,750

Investments in affiliated companies

22,052

20,713(1,339)Investments

59,96356,021(3,942)

Goodwill

18,75017,911(839)

Other intangible assets

12,73912,112(627)

Prepaid pension expense

10,5778,145(2,432)

Total current assets
II. Property, Plant and Equipment

Accumulated depreciation
Net property, plant and equipment
III. Other assets

Deferred income taxes
Other
Total other assets
Total Assets

982

1,036

54

5,757

6,127

370

130,820122,065(8,755)300,272

292,854(7,418)- 14 -

Accounts

As of March 31, 2015

As of March 31, 2016

(Liabilities)

Millions of Yen

Millions of Yen

AmountIncreased/(Decreased)
Millions of Yen

10,03811,7591,721

Trade notes

1,031

1,431

400

Trade accounts

11,346

12,017

671

Other payables

6,686

6,106

(580)

19,063

19,554491

Accrued payroll and bonuses

6,936

7,152

216

Income taxes payable

2,064

711

(1,353)

534

293

(241)

I. Current Liabilities
Short-term bank loans
Notes and accounts payables

Current portion of long-term debt
Other current liabilities
Total current liabilities

3,667

4,874

1,207

42,302

44,343

2,041

4,245

95

(4,150)II. Long-term liabilities
Long-term debt
Liabilities for termination and retirement
benefit
Deferred income taxes

1,680

1,703

23

18,796

15,588(3,208)Other long-term liabilities

1,681

1,724

43

Total long-term liabilities

26,402

19,110(7,292)

Total liabilities

68,70463,453(5,251)

13,26013,260-(Equity)
I. Common stock
II. Additional paid-in capital

29,642

29,68644

III. Retained earnings
IV. Accumulated other comprehensive income(loss)
Foreign currency translation adjustments

155,264

162,196

6,932

10,831

5,178(5,653)

Unrealized gain on securities

20,821

17,966(2,855)Pension liability adjustments

1,934(1,035)(2,969)V. Treasury stock, at cost
Total Wacoal Holdings Corp.
shareholders’ equity
VI. Noncontrolling interests
Total equity(2,895)(2,876)19

228,857

224,375(4,482)

2,711
231,568

5,026
229,401

2,315(2,167)300,272

292,854(7,418)

Total liabilities and equity- 15 -

(2) Consolidated Statements of Income

Accounts

Fiscal Year Ended
March 31, 2015

Fiscal Year Ended
March 31, 2016％

Millions of Yen
I.

Net Sales

Millions of Yen

AmountIncreased/(Decreased)％

Millions of Yen

191,765

100.0

202,917100.0

11,152

Cost of sales
Selling, general and administrative
expenses
Impairment charges on goodwill andother intangible assets

90,722

47.3

95,901

47.3

5,179

87,94045.9

93,151

45.9

5,211

6,021

3.2

-

Total operating costs and expenses

184,68396.4

189,052

93.2

4,369

7,082

3.6

13,865

6.8

6,783

II. Operating costs and expenses

Operating income(6,021)

III. Other income (expenses)
Interest income

142

161

19

Interest expense

(98)

(65)

33

1,011

1,057

46

1,585

90

(1,495)

(14)

(20)

(6)

1,405

-

(1,405)

229

(131)

(360)

Dividend income
Gain or loss on sale or exchange ofmarketable securities and investments net
Valuation loss on marketable securities
and investments
Gain on sale of paintings
Other - net
Total other income (expenses)

4,260

2.2

1,092

0.6

(3,168)

11,342

5.9

14,957

7.4

3,615

Current

5,223

2.7

3,442

1.7

(1,781)

Deferred(1,920)

(1.0)

1,288

0.7

3,208

Total income taxes

3,303

1.7

4,730

2.4

1,427

8,039

4.2

10,227

5.0

2,188

Income before income taxes and equity in
net income of affiliated companies
Income taxes

Income before equity in net income ofaffiliated companies
Equity in net income of affiliatedcompanies
Net income
Net income attributable tonon-controlling interests
Net income attributable to Wacoal
Holdings Corp.

705

0.4

1,245

0.7

540

8,744

4.6

11,472

5.7

2,728

(300)

(0.2)

(313)

(0.2)

(13)

8,444

4.4

11,1595.5

2,715- 16 -

(3) Consolidated Statements of Comprehensive Income

Accounts

Fiscal Year Ended
March 31, 2015

Fiscal Year Ended
March 31, 2016

AmountIncreased/(Decreased)

Millions of Yen

Millions of Yen

Millions of Yen

I. Net income
II. Other comprehensive income (loss)– net of tax
Foreign currency translation adjustments

8,744

11,472

2,728

8,671

(5,665)(14,336)

Net unrealized gain on securities

9,242(2,880)(12,122)Pension liability adjustments

2,156(2,976)(5,132)Other comprehensive income (loss)

20,069(11,521)(31,590)

Comprehensive income (loss)
Comprehensive income attributable tononcontrolling interests
Comprehensive income (loss) attributable to
Wacoal Holdings Corp.

28,813(49)(28,862)

(472)

(269)

203

28,341(318)(28,659)(4) Consolidated Statements of Equity
Fiscal Year Ended March 31, 2015
EquityShares of
Outstanding Common
Item

Common

Stock

Stock
Thousandshares

As of April 1, 2014
Cash dividends paid to
Wacoal Holdings Corp.
shareholders(33.00 yen per share)
Cash dividends paid tononcontrolling interests
Repurchase of treasury
stock
Sale of treasury stock
Equity transactions with
noncontrolling interest
shareholders
Other
Net income
Other comprehensive
income (loss)
As of March 31, 2015

140,839

Additional
Paid-in

Retained

Accumulated other

Earnings

Capitalcomprehensive
incomeTreasury
stock

Total
Shareholders’EquityNoncontrolling
Interests

Millionsof YenMillions ofYenMillions ofYenMillions ofYenMillions ofYenMillions ofYenMillions ofYenMillionsof Yen13,26029,587

151,468

13,689(2,898)205,106

2,430

207,536(4,648)(4,648)

(3)

(3)

(3)

(4,648)

(190)

0
5

55

6
8,444

140,841

Total Equity

13,26029,642

155,264- 17 -

19,89733,586(2,895)

(190)
(3)
-

0

(1)

(1)

61
8,444

300

61
8,744

19,897
228,857

172
2,711

20,069231,568

Fiscal Year Ended March 31, 2016
EquityShares of
Outstanding Common
Item

Common

Stock

Stock
Thousandshares

As of April 1, 2015
Cash dividends paid to
Wacoal Holdings Corp.
shareholders(30.00 yen per share)
Cash dividends paid tononcontrolling interests
Repurchase of treasury
stock
Sale of treasury stock
Equity transactions with
noncontrolling interest
shareholders
Other
Net income
Other comprehensive
income (loss)
As of March 31, 2016

140,841

Additional
Paid-in
CapitalRetained

Accumulated other

Earnings

comprehensive
incomeTreasurystock

EquityNoncontrolling
Interests

Total Equity

Millionsof YenMillions ofYenMillions ofYenMillions ofYenMillions ofYenMillions ofYenMillions ofYenMillionsof Yen13,26029,642

155,264

33,586(2,895)

228,857

2,711

231,568(4,225)(4,225)

(5)

(7)

1

1

22

140,859

Total
Shareholders’44

13,26029,686(2)
11,159162,196- 18 -

25(11,477)
22,109(2,876)(7)(4,225)

(206)

(206)
(7)

1
-

2,252

1
2,252

67
11,159313

67
11,472(11,477)
224,375

(44)
5,026

(11,521)
229,401(5)Consolidated Statements of Cash Flows

Accounts

I. Operating activities
1. Net income
2. Adjustments to reconcile net income to net cash provided
by operating activities(1) Depreciation and amortization(2) Provision for returns and doubtful receivables – net(3) Deferred income taxes(4) Gain or loss on sales or disposal of property, plant andequipment –net
(5) Impairment charges on goodwill and other intangible
assets(6) Impairment charges on property, plant and equipment(7) Gain or loss on sales or exchange of marketable securities
and investments - net(8) Valuation loss on marketable securities and investments –net(9) Gain on sale of paintings(10) Equity in net income of affiliated companies,
less dividends(11) Changes in assets and liabilities(Increase) decrease in notes and receivable
Increase in inventories
Increase in other current assets(Decrease) increase in notes and accounts payable
Decrease in liabilities for termination and retirement
benefits(Decrease) increase in other liabilities(12) Other
Net cash provided by operating activities
II.
1.
2.
3.

Investing activities
Increase in time deposits
Decrease in time deposits
Proceeds from sale and redemption of marketablesecurities
4. Payments to acquire marketable securities
5. Proceeds from sale of paintings
6. Proceeds from sale of property, plant and equipment
7. Capital expenditures
8. Payments to acquire intangible assets
9. Proceeds from sales of investments
10. Payments to acquire investments
11. Payments to acquire additional shares of a subsidiary
12 Proceeds from sale of shares of an affiliated company
13. Other
Net cash used in investing activities
III. Financing activities
1. Net decrease in short-term bank loans
2. Proceeds from issuance of long-term debt
3. Repayment of long-term debt
4. Repurchase of treasury stock
5. Sale of treasury stock
6. Dividends paid on common stock
7. Dividends paid to noncontrolling interests
8. OtherNet cash used in financing activities
IV. Effect of exchange rate changes on cash and cash
equivalents
V. Net (decrease) increase in cash and cash equivalents
VI. Cash and cash equivalents, beginning of year
VII. Cash and cash equivalents, end of year

Fiscal Year Ended
March 31, 2015

Fiscal Year Ended
March 31, 2016

AmountIncreased/(Decreased)

Millions of Yen

Millions of Yen

Millions of Yen

8,744

11,472

2,728

5,074
(45)
(1,920)

4,815
(117)
1,288

(259)
(72)
3,208

38

59

21

6,021
-

256

(6,021)256(1,585)

(90)

1,495

14
(1,405)

20
-

6
1,405

(27)

(482)

(455)

534
(1,038)
(442)
1,302

(195)
(1,008)(1,111)
(45)

(729)
30
(669)
(1,347)(1,601)505
168
14,337(2,101)(261)
134
12,634

(500)
(766)
(34)
(1,703)(3,548)3,383(2,459)
2,889

1,089
(494)

3,210
(1,310)1,785
174(3,093)(1,385)
1,527
(611)
(1)
6
27
164

1,118
(533)
775
(7,546)(1,432)235(516)
6(3,944)(11,407)(2,092)777(1,785)
601(4,453)(47)(1,292)95
1
0(3,971)(11,571)(6,784)
4,460(1,226)(3)(4,648)(190)(8,391)

2,101(4,463)(7)
1(4,225)(206)
2,252(4,547)

8,885(4,460)(3,237)
(4)
1
423
(16)
2,252
3,844

1,642
7,752
30,65838,410(1,031)(4,351)
38,41034,059(2,673)(12,103)
7,752(4,351)- 19 -

Additional Cash Flow Information

Accounts

Fiscal Year Ended
March 31, 2015

Fiscal Year Ended
March 31, 2016

AmountIncreased/(Decreased)

100
4,497

67
5,756

(33)
1,259

419

736

317

Cash paid forInterest
Income taxes
Noncash investing activities
Acquisition of fixed assets by assuming payment
obligation(6) Notes on Going Concern
Not applicable.

(7) Basic Significant Matters in Preparation of Consolidated Financial Statements(i)

Matters Regarding the Scope of Consolidation and Application of the Equity Method

Major consolidated subsidiaries:
Wacoal Corporation, Peach John Co., Ltd., Lecien Corporation, Kyushu Wacoal Manufacturing Corp., Torica Co., Ltd., Nanasai Co.,
Ltd., Wacoal International Corp., Wacoal America, Inc., Wacoal Europe Ltd., Wacoal EMEA Ltd., Wacoal Europe SAS, Wacoal
Hong Kong Co., Ltd., Wacoal Investment Co. (Taiwan), Ltd., Wacoal China Co., Ltd. and Wacoal International Hong Kong Co., Ltd.
Major Affiliated Companies:
Shinyoung Wacoal Inc., Taiwan Wacoal Co., Ltd. and Thai Wacoal Public Co., Ltd.
(ii) Changes Regarding Subsidiaries and Affiliates
Consolidated (new):
Myanmar Wacoal Co., Ltd., Wacoal India Private Ltd., A Tech Textile Co., Ltd., G Tech Material Co., Ltd.
Consolidated (excluded):
Wacoal Kyoto South Distribution Corp., Eveden Dominicana Corp.
Equity Method (excluded):
New Arbon Corporation(iii) Standard of Preparation of Consolidated Financial Statements
The consolidated financial statements have been prepared based on terms, format and preparation methods in compliance withaccounting standards generally accepted in the United States as required in connection with the issuance of American Depositary
Receipts. For this reason, the consolidated financial statements may be different from those that have been prepared based on theConsolidated Financial Statement Regulations and the Standard of Preparation of Consolidated Financial Statements in Japan.
(iv) Significant Accounting Policiesa.

Valuation Standard of Inventories
The average cost method was mainly used for goods, products and supplies, and the first-in first-out method was used for
raw materials, with both valued at the lower of cost or market.

b.

Valuation Standard of Property, Plant and Equipment and Method of Depreciation
Property, plant and equipment are valued at the acquisition cost. Depreciation expenses are calculated mainly using the
fixed-rate method based on the estimated useful lives of the assets (the lease term is used for capitalized leased assets).

c.

Valuation Standard of Marketable Securities and Investments
Based on the provisions of U.S. Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC)320, marketable securities and investments have been classified as “available for sale securities” and “held-to-maturity
securities”. “Available for sale securities” are valued at fair value and “held-to-maturity securities” are valued at amortizedcost. Gain or loss on sale of marketable securities is calculated based on acquisition cost using the moving-average method.
Nonmarketable securities are valued at cost using the moving-average method.

d.

Liabilities for Termination and Retirement Benefits
This is accounted for based on FASB ASC 715.

e.

Consumption Taxes- 20 -

Consumption taxes have been excluded from sales.
f.

Consolidated Statements of Cash Flows
In preparing the consolidated cash flow statements, time deposits with original maturities of three (3) months or less havebeen included in cash and cash equivalents.

(8) Notes to the Consolidated Financial Statements(i)Marketable Securities and Investments(Millions of Yen)
As of March 31, 2015
Cost

As of March 31, 2016

Gross
Gross Unrealized
Unrealized Gain
Loss

Fair
Value

Cost

Gross
Gross Unrealized
Unrealized Gain
Loss

Fair
Value

Marketable Securities
National debt
securities
10
10
10
0
10
Corporate debt
securities
500
1
501
395
0
395
Mutual Fund
1,104
291
5
1,390
1,083
279
1
1,361
Total
1,614
292
5
1,901
1,488
279
1
1,766
Investments
Equity securities
23,587
34,461
0
58,04823,59230,336
3
53,925
Total
23,587
34,461
0
58,04823,59230,336
3
53,925(Note) Securities which are classified as available for sale securities are shown in the above table and investments in nonmarketable equity
securities for which there are no readily determinable fair values are not shown.
(ii) Contract Amount, Market Value and Valuation Profit/Loss of Derivative Transactions
Our subsidiaries have been utilizing foreign exchange forward contracts to prepare for exposure to market risks from changes in foreignexchange rates. The disclosure of gains and losses of such contracts has been omitted as the amounts involved are non-material.
(iii) Per Share Information

Net income attributable to Wacoal Holdings Corp.
Number of average shares issued during the year
(excluding treasury stock)
Net income attributable to Wacoal Holdings Corp.
per share
Diluted net income attributable to Wacoal
Holdings Corp. per share

Fiscal Year Ended
March 31, 2015
8,444 million yen

Fiscal Year Ended
March 31, 2016
11,159 million yen

140,839,059 shares

140,842,184 shares

59.95 yen79.23 yen

59.80 yen

79.00 yen- 21 -

(iv) Segment Informationa.

Operating Segment Information

Fiscal Year Ended March 31, 2015 (April 1, 2014 - March 31, 2015)(Millions of Yen)
Wacoalbusiness(Domestic)

Wacoalbusiness(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales(1) External customers

112,203

48,107

11,626

19,829191,765-

191,765(2) Intersegment

1,906

8,592

650

5,046

16,194(16,194)-

Total

114,10956,69912,27624,875207,959(16,194)

191,765

Operating costs and expenses
Impairment charges on goodwill
and other intangible assets
Total operating costs andexpenses

105,665

51,923

12,551

24,717

194,856(16,194)

178,662

-

-

6,021

-

6,021

-

6,021

105,665

51,923

18,572

24,717200,877(16,194)

184,683

Operating income (loss)

8,444

4,776

(6,296)

158

7,082

-

7,082

Fiscal Year Ended March 31, 2016 (April 1, 2015 - March 31, 2016)(Millions of Yen)
Wacoalbusiness(Domestic)

Wacoalbusiness(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales(1) External customers

120,570

51,869

11,19019,288202,917-

202,917(2) Intersegment

1,427

8,595

775

6,102

16,899(16,899)-

Total

121,997

60,464

11,96525,390219,816(16,899)

202,917

Operating costs and expenses

113,187

56,031

11,70725,026205,951(16,899)

189,052

Operating income

8,810

4,433

258

364

13,865-

13,865(Note) 1.

Core products of respective businesses:
Wacoal business (Domestic): innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, sportswear,
hosiery, etc.
Wacoal business (Overseas): innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, sportswear,
hosiery, etc.
Peach John business:
innerwear (foundation, lingerie and nightwear), outerwear, and other textile-related products,
etc.
Other:
innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, othertextile-related products, mannequins, shop design and implementation, etc.

- 22 -

b.

Information by Region

Fiscal Year Ended March 31, 2015 (April 1, 2014 to March 31, 2015)(Millions of Yen)
Elimination or
corporateJapan

Asia/Oceania

Europe/N.A.

Total

External customers

143,250

16,261

32,254

191,765-

191,765

II.

Operating income

2,351

1,226

3,505

7,082

-

7,082

III.

Long-lived assets

43,200

2,998

2,990

49,188-49,188I.

Consolidated

Net sales

Fiscal Year Ended March 31, 2016 (April 1, 2015 to March 31, 2016)(Millions of Yen)

I.

Japan

Asia/Oceania

Europe/N.A.

Total

Elimination or
corporate

Consolidated

Net sales
External customers

150,673

17,90634,338202,917-

202,917

II.

Operating income

9,308

1,381

3,176

13,865-

13,865

III.

Long-lived assets

46,136

4,490

3,312

53,938-53,938(Note) 1.
2.

3.
4.

Countries or areas are classified according to geographical proximity.
Main countries and areas belonging to classifications other than Japan
Asia/Oceania: various countries of East Asia, Southeast Asia and West Asia, and Australia
Europe/N.A.: North America and European countries
Sales in respect of consolidated companies are categorized by location.
Long-lived assets include property, plant and equipment.
c.

Overseas Sales

Fiscal Year Ended March 31, 2015 (April 1, 2014 - March 31, 2015)(Millions of Yen)I.

Overseas net sales

II.

Consolidated net sales

Asia/Oceania

Europe/N.A.

16,261

32,254

48,515--

191,765

8.5%

16.8%

25.3%

Asia/Oceania

Europe/N.A.

Total

17,90634,33852,244--

202,917

8.8%

16.9%

25.7%

III. Ratio of overseas net sales to total consolidated net
sales

Total

Fiscal Year Ended March 31, 2016 (April 1, 2015 - March 31, 2016)(Millions of Yen)I.

Overseas net sales

II.

Consolidated net sales

III. Ratio of overseas net sales to total consolidated net
sales(Note) 1.
2.

Countries or areas are classified according to geographical proximity.
Main countries and areas belonging to classifications other than Japan
Asia/Oceania: various countries of East Asia, Southeast Asia and West Asia, and Australia
Europe/N.A.: North America and European countries- 23 -

(v) Status of Sales
Fiscal Year Ended March 31, 2015

Type of productAmountMillions of Yen

Fiscal Year Ended March 31, 2016

Distribution ratio%

AmountMillions of Yen

Distribution ratio%

Innerwear
Foundation and lingerieNightwear

142,6819,514Children’s underwear
Subtotal
Outerwear/Sportswear
Hosiery
Other textile goods andrelated products
Other
Total

74.4
5.0

151,166
10,098

74.5
5.0

1,373

0.7

1,386

0.7

153,568

80.1

162,650

80.2

16,227
2,437
7,616

8.4
1.3
4.0

19,074
2,178
7,161

9.4
1.1
3.5

11,917
191,765

6.2
100.0

11,854
202,9175.8
100.0(vi) Significant Subsequent Events(Transfer of Fixed Assets)
Our board of directors resolved at a meeting held on January 29, 2016 to transfer the fixed assets (land) as described below, andaccordingly, the delivery of land was completed on April 27, 2016.
a.

Reason for Transfer
We have decided to transfer the subject land, the old site of our Nagoya branch, for effective use of our managerial resources
because it is unlikely that we would use this site for our business in the future.

b.

Details of Subject Transferred Asset
Details of Subject Asset:
Land (1,370 m2)
Location:

15 Sakae 5-chome, Naka-ku, Nagoya-shi, Aichi

Current Status:

Leased for parking
spaces295 million yen

Book Value of Subject
Asset: Value:
Transfer

4,149 million yenc.

Outline of Transferee
Kabushiki Kaisha Nihon Ceremonyd.

Schedule of Transfer
Resolution of the Board
Meeting:
Execution of Agreement:

January 29, 2016

Delivery of Land:

April 27, 2016e.

February 12, 2016

Impact on Business Results
In connection with the transfer of the subject fixed assets, we will record approximately 3.8 billion yen of gain on sale of fixed
assets during the consolidated first quarter of the fiscal year ending March 2017.

Omission of Disclosure:
We have omitted notes regarding the lease transactions, related-party transactions, stock options and income taxes etc. because we believe it is
not sufficiently necessary to disclose information on these matters in these financial statements.

- 24 -

6.

Other
Changes to Corporate Officers

The scheduled changes to the composition of the board of directors after the conclusion of the 68th Ordinary General Meeting of
Shareholders to be held on June 29, 2016 will be as follows.
1.

Resignation of Director (as of June 29, 2016 (scheduled))
Yuzo Ide is scheduled to resign as Managing Director.

2.

Promotion of Director (as of June 29, 2016 (scheduled))
Current Senior Managing Director Hironobu Yasuhara is scheduled to be promoted to and appointed as Director andVice President.
Current Managing Director Masaya Wakabayashi is scheduled to be promoted to and appointed as Director and Vice
President.

The management and administrative organization after the conclusion of the 68th Ordinary General Meeting of Shareholders to beheld on June 29, 2016 will be as follows:
Management and Administrative Organization for the 69th Fiscal Year
Director/Audit & Supervisory Board Member
Representative Director and President
Director and Vice President
Director and Vice President
Director
Director (outside director)
Director (outside director)
Director (outside director)

Name
Yoshikata Tsukamoto
Hironobu Yasuhara
Masaya Wakabayashi
Masashi Yamaguchi
Mamoru Ozaki
Atsushi Horiba
Madoka Mayuzumi

Audit & Supervisory Board Member
Audit & Supervisory Board Member
Audit & Supervisory Board Member(outside auditor)
Audit & Supervisory Board Member(outside auditor)
Audit & Supervisory Board Member(outside auditor)

Tomoki Nakamura
Kiyotaka Hiroshima
Akira Katayanagi
Yoko Takemura
Hiroshi Shirai- 25 -

(Reference)
The management and administrative organization for the 12th term of Wacoal Corporation will be as follows:
Management and Administrative Organization for the 12th Term
Director/ Audit &Supervisory Board Member
Representative Director
and Chairman
Representative Director

Corporate Officer

Name

Responsibility

Yoshikata Tsukamoto
President andCorporate Officer

Hironobu Yasuhara
Yuzo Ide

Chairman of Wacoal Europe Limited

Masashi Yamaguchi

Director

Vice President andCorporate Officer
Senior Managing
Corporate Officer
Senior Managing
Corporate Officer
Corporate Officer

Director
Director
Director

Corporate Officer
Corporate Officer
Corporate Officer

Hidehiko Imaizumi
Yasuo Kamoshita
Masaaki Yajima

In charge of Administration and General Manager
of Personnel Division
General Manager of Wacoal Brand Operation
Division
General Manager of Wing Brand Operation
Division
General Manager of Retail Operation Division
Chief of Corporate Planning
General Manager of Technology/Production
Division

Director
Director
Director

Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberTomoyasu Ito
Kuniharu Suzuki

Kiyotaka Hiroshima
Hisashi Mazuyama

Managing Corporate
OfficerManaging Corporate
Officer
Corporate Officer

Hideo Senoue

Corporate Officer
Corporate Officer
Corporate Officer

Hiroshi Imai
Shuji Morimoto
Kazuhiro Shibahara

Corporate Officer

Toshiaki Sato

Corporate Officer

Atsushi Kotani

Corporate Officer

Katsuya Kodama

Corporate Officer
Corporate Officer
Corporate Officer

Hiroyuki Sekiguchi
Takuya Miura
Masami Ono

Masatoshi Okuyama
Junko Kasai

General Manager of Department Store Sales
Control of Wacoal Brand Operation Division
General Manager of East Japan Sales Control of
Wacoal Brand Operation Division
Chief of Diversity Career Support Group of
Personnel and Administration Division
Director of Human Science Research Center
General Manager of Information System Division
General Manager of Product Control, Wacoal
Brand Operation Division
General Manager of West Japan Sales Control of
Wacoal Brand Operation Division
General Manager of Chain Stores Sales Control,
Wacoal Brand Operation Division
General Manager of Sales Control and Tokyo Sales
Officer, Wing Brand Operation Division
General Manager of Direct Marketing Operations
General Manager of International Division
Director, General Manager of Wacoal China Co.,Ltd.

- End -

- 26 -