Annual Securities Report(The 74th Fiscal Year)
From April 1, 2021 to March 31, 2022

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

E00590

The 74th Fiscal Year (from April 1, 2021 to March 31, 2022)

Annual Securities Report1.

2.

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

WACOAL HOLDINGS CORP.

Certain References and Information

This report is prepared for overseas investors and compiled based on the contents of the Annual Securities Report(“Yukashoken Hokokusho”) of WACOAL HOLDINGS CORP. filed with the Director of the Kanto Local Finance
Bureau of Japan on June 29, 2022.
As used in this report , unless the context otherwise requires, “the Company” and “Wacoal Holdings” refer to
Wacoal Holdings Corp., and “Wacoal,” “we,” “us,” “our” and similar terms refer to Wacoal Holdings Corp. and its
consolidated subsidiaries. References to “U.S. dollars” or “$” are to the currency of the United States andreferences to “yen” or “¥” are to the currency of Japan.
All financial statements and information contained in this report have been prepared in accordance with accounting
principles generally accepted in the United States, or U.S. GAAP except where otherwise noted.
A Cautionary Note on Forward-Looking Statements
This report contains forward-looking statements that are based on our current expectations, assumptions, estimatesand projections about our companies and our industry. You can identify these statements by the fact that they do
not relate strictly to historic or current facts. The forward-looking statements discuss future expectations, identify
strategies, contain projections of results of operation or of financial position, or state other “forward-looking”
information. Forward-looking statements are contained in the sections entitled “II. Business Overview, 1.
【Management Policy, Business Environment and Management Issues】and 2. 【Risk Factors】” and elsewherein this report.
The forward-looking statements are subject to various risks and uncertainties. Information contained in thesections listed above and elsewhere in this annual report identifies factors that could cause our actual results,
performance or achievements to differ materially from those expressed or implied in any forward-looking
statement.
We undertake no obligation to update any forward-looking statements contained in this annual report, whether as aresult of new information, future events or otherwise.

Contents
Page
Annual Securities Report for the 74th Fiscal Year
【Cover】
1
2
Part I 【Information on Wacoal Holdings Corp. and its consolidated subsidiaries.】………………………
I.
【Overview of Wacoal Holdings Corp. and its consolidated subsidiaries.】…………………………
2
1.【Key Financial Data】 ……………………………………………………………………………
2
2.【History】 …………………………………………………………………………………………
5
3.【Description of Business】 ………………………………………………………………………
6
4.【Information on Subsidiaries and Affiliated Companies】 ……………………………………… 10
5.【Employees】 …………………………………………………………………………………… 12
II. 【Business Overview】 ……………………………………………………………………………… 13
1.【Management Policy, Business Environment and Management Issues】 ……………………… 13
2.【Business Risk and Other】 ……………………………………………………………………… 23
3.【Analyses of Financial Position, Results of operation, and Cash Flows by Management】……… 37
4.【Material Agreements, etc.】 …………………………………………………………………… 47
5.【Research and Development】 …………………………………………………………………… 48
III. 【Property, Plants, and Equipment】 ………………………………………………………………… 49
1.【Summary of Capital Investment, etc.】 ………………………………………………………… 49
2.【Major Property, Plants, and Equipment】 ……………………………………………………… 49
3.【Plans for Capital Investment, Disposals of Property, Plants, and Equipment, etc.】…………… 51
IV. 【Information on the Company】 …………………………………………………………………… 52
1.【Information on the Company’s Stock, etc.】 …………………………………………………… 52
2.【Information on Acquisition etc. of Treasury Stock】…………………………………………… 89
3.【Dividend Policy】 ……………………………………………………………………………… 91
4.【Corporate Governance, etc.】 …………………………………………………………………… 92
V. 【Financial Information】 …………………………………………………………………………… 123
1.【Consolidated Financial Statements】 …………………………………………………………… 123
VI. 【Stock-Related Administration for the Company】 ………………………………………………… 168
VII. 【Reference Information on the Company】 ………………………………………………………… 169
1.【Information on the Parent Company】 ………………………………………………………… 169
2.【Other Reference Information】………………………………………………………………… 169
Part II 【Information on Guarantors etc. for the Company】……………………………………………… 170
Auditors’ Report and Internal Control Report

End of this document

【Cover】【Document Filed】

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

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

Director, Kanto Local Finance Bureau【Filing Date】

June 29, 2022

【Fiscal Year】

The 74th Fiscal Year (from April 1, 2021 to March 31, 2022)【Company Name】

KABUSHIKI KAISHA WACOAL HOLDINGS【Company Name in English】

WACOAL HOLDINGS CORP.

【Position and Name ofRepresentative】

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

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

Kyoto (075) 682-1007【Contact Person】

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

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

Kyoto (075) 682-1007【Contact Person】

Ichiro Hirokawa, General Manager of Accounting Department【Place Where Available for Public
Inspection】

Tokyo Stock Exchange, Inc.
(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)

1

Part I【Information on Wacoal Holdings Corp. and its consolidated subsidiaries.】
I. 【Overview of Wacoal Holdings Corp. and its consolidated subsidiaries.】
1. 【Key Financial Data】(1)

Consolidated Financial Data, etc.
(Millions of yen, unless otherwise stated)
Fiscal Year

70th

71st

72nd

73rd

74th

Year-EndMarch 2018

March 2019

March 2020

March 2021

March 2022

Sales

195,725

194,201

186,760

152,204

172,860

Operating income (loss)

11,494

4,879

6,632

(1,115)

5,013

Net income attributable to
Wacoal Holdings Corp.

9,745

341

3,472

7,025

4,608

Comprehensive income (loss)

16,448(5,046)

1,521

13,043

11,929Wacoal Holdings Corp.
shareholders' equity

232,712

216,494

205,371

215,612223,005

Total assets

298,534

281,767

277,688322,761

303,245(yen)

3,454.40

3,321.57

3,291.06

3,454.18

3,628.56(yen)

143.46

5.16

54.26

112.57

74.04

(yen)

142.98

5.14

54.05

112.0973.73

Shareholders’ equity ratio

(%)

78.0

76.8

74.0

66.8

73.5

Return on equity

(%)

4.2

0.2

1.6

3.3

2.1

Price earnings ratio(times)21.47

533.33

43.25

21.81

24.88

15,493

13,62013,325

4,260

13,008(7,362)(2,474)2,569(2,562)(3,096)(12,303)(10,872)(17,471)

33,605(36,349)

29,48730,13327,90563,55737,982

20,904[771]

20,662[739]

20,984[675]

19,824[492]

19,717[730]

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

Net cash provided by operating
activities
Net cash (used in) provided byinvesting activities
Net cash (used in) provided byfinancing activities
Cash and cash equivalents, endof yearNumber of employees[Average number of part-time
employees, etc.](Notes)

1.

2.

3.

(person)The foregoing consolidated financial data has been prepared in conformity with accounting principles
generally accepted in the United States of America (U.S. GAAP). In the above table, operating income isstated instead of ordinary income.
We have conducted a share consolidation of common stock of the Company pursuant to which two (2)shares were consolidated into one (1) share effective as of October 1, 2017. Accordingly, “Shareholders’equity per share,” “Net income per share attributable to Wacoal Holdings Corp.” and “Diluted net income
attributable to Wacoal Holdings Corp. per share” have been calculated assuming that such shareconsolidation had been conducted at the beginning of the 70th fiscal year.
New accounting guidance, Improving the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost (ASU No. 2017-07), has been applied since the beginning of the 71st fiscal
year. Accordingly, key financial data for the 70th is the amounts after the retroactive application of suchaccounting guidance.

2

(2)

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

70th

71st

72nd

73rd

74th

Year-EndMarch 2018

March 2019

March 2020

March 2021

March 2022

Operating revenue

12,644

15,715

13,346

16,4296,196

Ordinary income

6,308

11,255

9,111

12,048

1,682

Net income

6,461

5,968

8,762

11,544

2,749

13,26013,26013,26013,26013,26071,68970,68968,58965,58965,589Net assets

140,510

134,813130,996

140,106

138,332

Total assets

160,086

154,554

156,000

191,737

165,180

2,078.38

2,060.13

2,090.11

2,235.07

2,241.50

54.00

72.00

60.00

40.00

50.00

(18.00)(36.00)(40.00)(20.00)(20.00)Common stock
Total number of issued andoutstanding shares(thousandshares)Net assets per share(yen)

Dividends per share(Interim dividends per
share)(yen)

Net income per share

(yen)

95.12

90.24

136.93184.9844.18

Diluted net income per
share

(yen)

94.47

89.91

136.39184.16

43.99

Shareholders’ equity ratio

(%)

87.5

86.9

83.6

72.8

83.4

Return on equity

(%)

4.5

4.3

6.6

8.6

2.0

Price earnings ratio(times)

32.38

30.50

17.14

13.27

41.69

Dividend payout ratio

(%)

75.7

79.8

43.8

21.6

113.2

95

90

94

85

90

[－]

[－]

[－]

[－]

[－]

Number of employees[Average number of parttime employees, etc.](person)Total shareholders’ return

(%)

114.7

105.4

92.8

98.2

77.7

(Benchmark: TOPIX incl.
dividends)(%)(115.9)(110.0)(99.6)(141.5)(144.3)Highest share price

(yen)

3,640

3,485

3,115

2,537

2,612

2,595

2,110

1,630

1,687

(1,648)Lowest share price

(yen)

3,015
(1,309)(Note)

1.

2.

3.

We have conducted a share consolidation of common stock of the Company pursuant to which two (2)shares were consolidated into one (1) share effective as of October 1, 2017. Accordingly, “Net assets per
share,” “Net income per share” and “Diluted net income per share” have been calculated assuming thatsuch share consolidation had been conducted at the beginning of the 70th fiscal year.
Dividends per share of 54.00 yen for the 70th fiscal year are a total of the interim dividend (18.00 yen)and the year-end dividend (36.00 yen). As we have conducted a share consolidation of common stock of
the Company pursuant to which two (2) shares were consolidated into one (1) share effective as of
October 1, 2017, such interim dividend and year-end dividend are the amounts before such shareconsolidation and after such share consolidation, respectively. Dividends per share for the 70th fiscal
year will be 72.00 yen if calculated based on the per share information after such share consolidation.
We have adopted ASBJ Statement No. 28 Partial Amendments to the Accounting Standard for Tax EffectAccounting (February 16, 2018) starting from the beginning of the 71st fiscal year. Accordingly, key
financial data for the 70th is the amounts after the retroactive application of such accounting guidance.
3

4.
5.

6.

The highest and lowest share prices are market prices on the first section of the Tokyo Stock Exchange.
We have conducted a share consolidation of common stock of the Company pursuant to which two (2)shares were consolidated into one (1) share effective as of October 1, 2017. The share prices for the 70th
fiscal year indicate the highest and lowest prices after such share consolidation, and the share prices inbrackets indicate the highest and lowest prices before such share consolidation.
The amount of dividends per share for the 72nd fiscal year includes the 70tth anniversary dividend of 8.00
yen.

4

2. 【History】
June 1946

Wako Shoji founded by late Koichi Tsukamoto

November 1949

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

June 1951

Head office relocated to Anekoji-agaru, Muromachi-dori, Nakagyo-ku, Kyoto; plant opened; selfmanufacturing begins
Company name changed to Wacoal Inc.

November 1957
November 1959
June 1964
September 1964
August 1970
October 1970

Tokai Wacoal Sewing Corp. established as a domestic manufacturing company, and seven sewing
subsidiaries established in Japan
Company name changed to Wacoal Corp.
Wacoal listed on the Second Section of the Tokyo and Osaka Stock Exchanges and the Kyoto Stock
Exchange
A joint venture company, Korea Wacoal Corp. established in Korea

October 1970

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

January 1971

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

April 1978

Singapore office (current Wacoal Singapore Private Ltd.) opened

August 1979

Acquired shares from Torica Inc., a subsidiary of the Company, by way of capital increase throughthird-party allocation
Wacoal America, Inc. (current Wacoal International Corp.) established as an overseas subsidiary

June 1981
March 1982
February 1983

Acquired shares from Nanasai Co., Ltd., a subsidiary of the Company, by way of capital increase
through third-party allocation
Wacoal Hong Kong Co., Ltd., established as an overseas subsidiary

December 1983

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

January 1986

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

April 1989

Philippine Wacoal Corp. established as joint venture company

January 1990

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

January 1991

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

April 1993
January 1995

Joint venture agreement for Korea Wacoal Corp. canceled; investment made into Shinyoung Inc.
(current Shinyoung Wacoal Inc.) in Republic of Korea
Guangdong Wacoal Inc. established as an overseas subsidiary

June 1997

Vietnam Wacoal Corp. established as an overseas subsidiary

December 2000
May 2003

Joint venture agreement for Beijing Wacoal Co., Ltd. (current Wacoal China Co., Ltd.), canceled andreestablished as Beijing Wacoal Co., Ltd., a wholly owned subsidiary
Wacoal Malaysia Sdn Bhd established as a joint venture company

August 2003

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

October 2005

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

January 2008

Peach John Co., Ltd. (“Peach John”), became a wholly owned Wacoal subsidiary through shareexchange
Lecien Corp. became a wholly owned Wacoal subsidiary through stock exchange

August 2009
April 2012
January 2016
July 2019

Eveden Group Limited (currently Wacoal Europe Ltd.) became a wholly owned Wacoal subsidiarythrough the acquisition of all of the issued and outstanding shares of Eveden Group Limited
A Tech Textile Co., Ltd. and one other company established as joint venture companies
Intimates Online, Inc . became a wholly owned Wacoal subsidiary through the acquisition of all of
the issued and outstanding shares.
5

3. 【Description of Business】
Our corporate group consists of one holding company (Wacoal Holdings Corp.), 56 subsidiaries, and seven
affiliates, and is principally engaged in the manufacturing and wholesale distribution of innerwear (primarily women’sfoundation wear, lingerie, nightwear, and children’s underwear), outerwear, sportswear, and other textile goods andrelated products, as well as the direct sale of certain products to consumers. Our corporate group also conducts
business in the restaurant, culture, service, and interior design businesses.
The Company falls under the definition of “Specified Listed Companies” as prescribed under Paragraph 2,
Article 49 of the Cabinet Office Ordinance on Restrictions on Securities Transactions, etc. For this reason, whether
an incident is minor (and not a material fact) under the insider trading restrictions will be determined on the basis of
consolidated figures.
Segment information and a summary of the various companies that make up our corporate group are as
follows:(1)

Wacoal Business (Domestic)

This segment is composed of Wacoal Holdings Corp. and 10 subsidiaries in Japan.
Wacoal Corp. engages in the planning and designing of the above-mentioned products, procurement ofmaterials for the above-mentioned products, commercialization of semifinished products purchased from sewing
companies in Japan and overseas and other business associates after inspection, and distribution to end consumers
through department stores, general merchandisers, and other general retailers in Japan, as well as directly managed
retail stores, E-commerce(EC) websites and distributors in Japan and overseas. Each of our 4 apparel
manufacturing companies, including Kyushu Wacoal Manufacturing Corp., receives a supply of raw materials from
Wacoal Corp., conducts sewing and processing of innerwear and sportswear, and delivers the semifinished products
to Wacoal Corp. We have 2 sales companies, including Une Nana Cool Corp., which conduct retail sales of
innerwear, outerwear products.
(2)

Wacoal Business (Overseas)

This segment is composed of 38 companies, including our overseas subsidiaries and affiliates.
Among our 32 overseas subsidiaries, nine companies are located in North and Central America; sevencompanies are located in Europe; and 16 companies are located in Asia/Oceania. Six overseas affiliates are locatedin Asia.
Among our nine overseas subsidiaries in North and Central America, Wacoal Dominicana Corp., an apparel
manufacturing company of innerwear products, ships its products to Wacoal America, Inc., a manufacturing andsales company, which supplies these products to end consumers through local department stores, specialty retailstores and EC websites. In addition, Eveden Inc., a sales company, distributes innerwear products, which are mainly
supplied from Wacoal Timex LTD. and Wacoal Emea Ltd.
Among our seven overseas subsidiaries in Europe, Wacoal Emea Ltd. sells products such as innerwear, which
are supplied by Wacoal Timex Ltd., to end consumers through department stores and specialty retail stores mainlyin the United Kingdom.
Our two subsidiaries and four affiliates in Asia/Oceania are manufacturing and sales companies, which
distribute products to end-consumers through their local department stores and specialty retail stores, and also
distribute a part of their products to Wacoal Corp. and sales companies in Asia. Our sales companies include six
subsidiaries, including Wacoal Singapore Private Ltd., Eveden Israel Ltd., and one affiliate. These sales companies
distribute innerwear products, which are mainly supplied from the group companies, to their local department
stores, specialty retail stores and directly managed retail stores. Our eight remaining subsidiaries include four
apparel manufacturing companies producing innerwear, two raw materials manufacturing companies, one company
that procures materials for subsidiaries and affiliates in Asia, and one investment company which make investmentsin the local subsidiaries and local affiliates that manufacture and sell innerwear.
(3)

Peach John BusinessThis segment is composed of four companies, including our domestic and overseas subsidiaries. The one
domestic subsidiary and three overseas subsidiaries are sales companies, and Peach John mainly engages in theretail sales of products that are independently supplied mainly from nongroup companies.
6

(4)

Other

This segment is composed of a total of 11 companies, including five domestic subsidiaries, five overseas
subsidiaries and one domestic affiliate.
Among the five domestic subsidiaries, Nanasai Co., Ltd. (“Nanasai”) engages in manufacturing, sales andrental of mannequins and fixtures, and interior design work and Lecien Corporation engages in the manufacture andwholesale distribution of women’s innerwear and lace and fabrics for handicrafts. Our three other subsidiaries
which engage in sales, other textile-related business, real estate leasing business, and/or other businesses.
Five overseas subsidiaries are located in Asia.
Four of our subsidiaries in Asia are apparel manufacturing companies. The other one subsidiary engage inother textile-related business.
The business distribution diagram of these subsidiaries and affiliates follows on the next page:7

Consumer/Client(Apparel Manufacturing: 4 companies)
Kyushu Wacoal Manufacturing Corp.
Torica Inc.
2 other companies(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: 2 companies)(Other: 1 company)
Wacoal I Next Corp.

Une Nana Cool Corp.
1 other companies

Wacoal Business (Domestic)

Peach John Business

Wacoal Business (Overseas)

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

Wacoal International Corp.

(U.S.)

Wacoal America, Inc.
Wacoal Dominicana Corp.

(U.S.)(Dominican Republic)
Eveden Inc(U.S.)(Lecien: 6 companies)
Lecien Corporation
Lecien （Vietnam）Co., Ltd.
(Vietnam)
4 other companies

5 other companies(Europe: 7 companies)
Wacoal Europe Ltd.

(U.K.)

Wacoal Emea Ltd.
Wacoal Europe SAS.

(U.K.)(France)4 other companies(Asia/Oceania: 22 companies)
Wacoal Investment Co., Ltd.
(Taiwan)Wacoal International Hong Kong Co., Ltd.
(Hong Kong)
Wacoal China Co., Ltd.
(China)Wacoal Singapore Private Ltd.
(Singapore)
Wacoal Hong Kong Co., Ltd.
(Hong Kong)
Guangdong Wacoal Inc.
(China)Wacoal Timex Limited(Sri Lanka)
A Tech Textile Co., Ltd(Thailand)*Shinyoung Wacoal Inc.
(South Korea)*Taiwan Wacoal Co., Ltd.
(Taiwan)*Thai Wacoal Public Co., Ltd(Thailand)
11 other companies,
including 3 equity method affiliates

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

8(Other: 5 companies)
Nanasai Co., Ltd.
Ai Co., Ltd
Wacoal Service Co., Ltd.
Wacoal Career Service Corp.
*House of Rose Co., Ltd.

(Note) As of April 1, 2022, Kyushu Wacoal Manufacturing Corp. has changed its trade name to Wacoal Manufacturing Japan Corp.

94. 【Information on Subsidiaries and Affiliated Companies】
Company Name

Location

Capital(Millions of yen)

Principal Business

Percentage of
Voting Rights
Owned or Held(%)

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

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

Minami-ku, Kyoto

5,000

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

100

3Rent of officebuilding

Peach John Co., Ltd.

Minato-ku, Tokyo

90

Peach John Business (Productplanning and sale of innerwear
products)

100

2

－

Lecien Corp.

Minami-ku, Kyoto

90

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

1002Rent of office･
storage building

Kyushu Wacoal Manufacturing Corp.

Unzen-shi,
Nagasaki70

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

100－

Rent of officebuilding

Torica Inc.

Ibaraki-shi, Osaka

92

Same as above

－

－

90

Other
(Leasing of mannequins, interior
design and construction work of
stores)2

Rent ofoffice building

2

－

1

－

－

－

100

2

－

－

－

－

－

－

－

1

－

－

－

1

－

－

－

1

－

－

－

2

－

2

－

1

－

2

－

1

－

(100）

57
(57）

99

Nanasai Co., Ltd.

Minami-ku, Kyoto*1
Wacoal International Corp.

New York, USA

20,000 thousand
USD

Wacoal Business (Overseas)(a US holding company)

100

Wacoal America, Inc.

New York, USA

2,062 thousand
USD

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

100

Wacoal Dominicana Corp.

Santo Domingo,
Dominican
Republic

20 thousand
USD

Wacoal Business (Overseas)(MTO of innerwear products)

100

Wacoal Europe Ltd.

Northamptonshire,UK

175 thousand
GBP

Wacoal Business (Overseas)(a holding company)

Wacoal Emea Ltd.

Northamptonshire,UK

250 thousand
GBP

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

100

Wacoal Europe SAS.

Saint-Denis, France

8 thousand
EUR

Wacoal Business (Overseas)(Sale of innerwear products)

100

Wacoal Hong Kong Co., Ltd.

Hong Kong

3,000 thousandHK$*1
Wacoal International Hong Kong Co., Ltd.

Hong Kong

373,690
thousandHK$

Vietnam Wacoal Corp.

Bien Hoa, Vietnam

Wacoal Investment Co., Ltd.

Same as above

(100）

(100）

(100）

(100）

(100）

80
(80）

Wacoal Business (Overseas)(Procurement of innerwear products
and raw materials)

100

54,604 million
VND

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

100

Taipei, Taiwan

59,000 thousand
NT$

Wacoal Business (Overseas)(a Taiwan holding company)

100

Guandong Wacoal Inc.

Guangzhou, China

17,730 thousand
RMB

Wacoal Business (Overseas)(MTO of innerwear products)

100*1
Wacoal China Co., Ltd.

Beijing, China

189,364
thousand
RMB

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

100*1
A Tech Textile Co., Ltd.

Bangkok, Thailand

1,000
million
THB

Wacoal Business (Overseas)(Manufacturing of raw materials)

Thai Wacoal Public Co., Ltd.

Bangkok, Thailand

120 million
THB

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

PT.Indonesia Wacoal

Bogor, Indonesia

2,500 million
IDR

Same as above

Shinyoung Wacoal Inc.

Seoul, South Korea

4,500 million
WON

Same as above

Taiwan Wacoal Co., Ltd.

Taoyuan, Taiwan

800 million NT$

Same as above

(100）

(100）

(100）
(100）

(100）

54
(54）

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

Minato-ku, Tokyo

934

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

2 other companies

10

34
(34）

42
(42）

25
50
(50）

21

(Note) *1. Wacoal Corp., Wacoal International Corp., Wacoal International Hong Kong Co., Ltd, Wacoal China Co.,
Ltd. and A Tech Textile Co., Ltd. are categorized as a specified subsidiary under the Financial Instruments
and Exchange Act.
2. The number in brackets under the “Percentage of Voting Rights Owned or Held” column means thepercentage of indirect holding.
3. The name of operating segments is shown under the “Principal Business” column.
*4. House of Rose Co., Ltd. is a company that is obliged to file an annual securities report.
*5. Wacoal Corp.’s sales (excluding the internal sales recorded among consolidated subsidiaries) account for
more than 10% in our consolidated sales.
Key Income Summary (i) Sales

82,778 million yen(ii) Ordinary income

1,901 million yen(iii) Net income

1,778 million yen(iv) Net assets

95,080 million yen(v) Total assets

122,204 million yen

6. As of April 1, 2022, Kyushu Wacoal Manufacturing Corp. has changed its trade name to Wacoal
Manufacturing Japan Corp.

11

5. 【Employees】(1)

Employees within group
As of March 31, 2022
Name of Operating Segment

Number of Employees

Wacoal Business (Domestic)

6,885

[287]

Wacoal Business (Overseas)

10,655

[332]

450

[30]

1,727

[81]

19,717[730]

Peach John Business
Other
Total

(Note)(2)

1. The number of employees is the number of individuals working within our group (excludes individuals
seconded from our group to third parties, but includes individuals seconded from third parties to ourgroup). The average number of temporary employees is indicated in brackets for the current consolidated
fiscal year.
2. Temporary employees include temporary staff and part-time workers whose working period is about 3
months.
Employees of the Company
As of March 31, 2022

Number of Employees
90(Note)

Average Age

Average Years of Service
46.0

Average Annual Salary (Yen)

19.8

5,543,536

1. The number of employees is the number of individuals working within the Company.
2. The average annual salary includes bonus and extra wages.
3. All employees of the Company belong to the Wacoal Business (Domestic) segment.

(3)

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

12

II. Business Overview
1.【Management Policy, Business Environment and Management Issues】
Any forward-looking statement contained below is based on our judgements as of the end of the current fiscal year.
These future expectations and projections are subject to various factors and uncertainties forecasts, and may differ
from actual outcome or results.
(1) Group Philosophy (Mission, Spirit of Foundation)
Our group, with the Company as its pure holding company, has been operating innerwear business and otherbusinesses primarily in Japan, the United States, Europe, China and Southeast Asia with the goal of “contributing tosociety by helping people express their beauty”. In 2022, we have introduced our “Mission”, the social mission
statement we aim to fulfill in today’s society, defined as “committing to the enrichment of the lives of people aroundthe world”, “helping people realize their individuality, and their inner beauty, rather than uniform external beauty”,
and “striving to solve various social issues such as the environment and human rights”. Based on this “Mission”
and our “Spirit of Foundation” that we have inherited over our 70-year history, we will strive to enhance ourcorporate value by promoting sustainability management that aims to both solve social issues and achievesustainable growth through our business activities, at the same time each of our operating companies utilizing its
efforts to address complicated and diversified social issues as future growth opportunities.
In addition, our business activities are built upon accumulation of “mutual trust”, the trust built between
people, based on our listening to the voice of each and every one of our customers, and continuously transforming
our business with a sense of humility. We aim to become an indispensable presence in society by building
relationships of mutual trust with every stakeholder, including shareholders, customers, employees, business
partners and local communities, through our continuous endeavors to enhance transparency in corporate
management and to ensure fairness and independence.
MissionWACOAL empowers people with the confidence that comes from looking and feeling their best.
As a global leader, we welcome everyone into our caring community built on mutual respect, diversity, andinclusion.
At WACOAL, we value each person as an individual and believe in nurturing the body and mind so everyone canbe their best.
When people with different backgrounds are empowered to come together and share ideas freely, we as asociety will achieve true harmony.
By continuing to evolve, WACOAL leads the way to a world where kindness, inclusivity, and mutual respect are
the standards, and the future is full of promise for everyone.
“Global Corporate Message”
Comfortable inside. Confident outside.
*“Global Corporate Message” above is our common corporate message shared within our group.
For details, please see “About Wacoal Group” on our company website (https://www.wacoalholdings.jp/en/group/).
Founding Principles

Our Culture
We, the employees and management of WACOAL, will maintain a refined corporate culture based on mutual
trust and will continually strive to make the Company a global leader in the industry.
Our Promise
We will contribute to society by helping women express their beauty.
Our Values
1. Create products loved by customers
132. Develop new products that meet the needs of the times.
3. Conduct business in a fair manner with a forward focus.
4. Build a better WACOAL through better human resources.
5. Fear not failure and boast not of success.
(2) Our Medium- and Long-term Business Strategy and Measures for Business Targets(ⅰ) Medium- and Long-term Business Strategy frame “VISION 2030”
In order to put our management philosophy into practice, our group formulated a new corporate vision of thegroup looking ahead to the year 2030 called “VISION 2030”, by back-casting from long-term goals, while keeping
an eye on the business challenges that we face, customer values, and changes in the society and environment.
Under “VISION 2030”, our medium to long-term vision is “to evolve and grow as “Wacoal Group of the World” byproviding both physical and emotional beauty and richness to individuals through high sensitivity and premium
quality” and we will achieve sustainable growth and enhance corporate value through the following initiatives.
Corporate vision : evolve and grow as “Wacoal Group of the World” by providing both physical and emotional
beauty and richness to individuals through delicate sensibility and premium quality
Basic policy: achieve sustainable growth through creation of new value from innovative perspectives

Business domain : widen and deepen the fields of “beauty”, “comfort” and “health” with new products andservices supported by our “delicate sensibility and premium quality”
Priority strategies:
Targets of materiality (key issues)

Priority strategies

Improve profitability andexpand business domain indomestic market

Promotesustainability
management

Expand business andtransform into highly
profitable business structure
in overseas market

Strengthen groupmanagement

Transition to capitalefficient management

Steadily growing in Japan and developing new businesses in the healthcare
field・recovery of share in the domestic market through the promotion of customer
experience (CX) strategies
・expansion of business domain in the fields of “beauty”, “comfort” and“health”
Maintaining current pace of expansion in the existing markets and growing
presence in the European and Indian markets
・acquisition of new customers by strengthening digital marketing
・conversion of existing customers to loyal customers by strengthening
customer relationship management (CRM)
・enhancement of brand investments in the new markets
Strengthening group governance, and developing and utilizing diverse humanresources
Developing domestic and overseas technology, production and R&D bases
・redefining of quality standards, conversion of sewing factories to smart
factories, and pursuit of production and transportation efficiency
Achieving continued generation of return on equity (ROE) in excess of costof capital
Optimizing value distribution to stakeholders
・ROE of 10%, measures to optimize capital structure

14

Materiality (Key issue):TargetMateriality (Key issue)

PurposeEnhancement of customer experience value by pursuing
personalization
Customers

Maximize the value provided tocustomers

Endeavoring to expand business areas
Deepening of product quality and building of service
quality
Growth into human resources who can expand theirpotential and have confidence, pride, and success
Building of an organization that can demonstrate great
results through co-creation and collaboration
Continuous improvement of employees' health andhealth awareness

Employees

Achieve growth of each of ouremployees and establish a highly
rewarding organization

Environment

Preserve the environment globallyfor future generations

Promotion of business activities that reduce
environmental impact

Society

Realize a society in which everyone
plays an active role in their own way

Promotion of co-creation innovation to solve social
issues

Implementation of highly-transparent management
Governance

Enhance governance towardrealization of sustainable growth

Strengthening of the risk management system
Continuous improvement of profitability and capitalefficiency

Guidelines for key indicators (fiscal year ending March 2031):
Sales

270,000 million yen（Percentage of sales from overseas
operations is 40%）

(Reference) Group sales including unconsolidated joint
ventures340,000 million yen

Business income ( Ratio)

27,000 million yen（10％）

ROE

10％

15

Guidelines for the Actions of Officers and Employees:"Think about the happiness of others"
Do you consider the happiness of people around you, including the customers, suppliers, and employees coworker you work with?
"Embrace curiosity and use all five senses"
Have you noticed or discovered anything new lately?
"Consider the reason and purpose"
Do you understand the true meaning and root cause; why and what for?
"Respect diverse opinions"
Do you listen to people's opinions with humility and have constructive discussions without making assumptions?
"Make decisions for the future"
Do you act not only for immediate results, but also for a successful future?
"Give it a try first"
Do you give up out of fear of risks? Do you support people who take on challenges?
"Work together"
Do you strive for great success through teamwork and collaboration?
"Act with honesty and responsibility"
Do you communicate appreciation for others? Do you have blameless problem-solving approach?

Following the formulation of the “VISION 2030”, we have updated the definition of “Wacoal Group of the World”
as follows:- earning a high level of trust from all stakeholders with respect to our group’s products, services and initiatives
related to social issues- developing businesses with competitive advantages on a global scale by making optimizing our group’s humanresources, assets, know-hows and network- continuing to create new customer experience with innovative and high-quality products and services to enrichand beautify the lives of our customers around the world- enabling our employees around the world to understand our group’s goals and mission, and to challengethemselves to realize our group’s goals and mission without being bound by common sense or the past(ⅱ) Medium-Term Management Plan
The upcoming three-year period (from fiscal year ending March 2023 to fiscal year ending March 2025) is an
important period for us to lay the foundation for realizing our goal, “evolve and grow as ‘Wacoal Group of theWorld’ by providing both physical and emotional beauty and richness to individuals through delicate sensibility andpremium quality”. As a manufacturing company that develops various brands globally, we will focus on thefollowing initiatives under our medium-term management plan to contribute to enrich the lives of people and totransform ourselves into a highly profitable company capable of sustainable growth.

16Core Strategies:(Domestic Business)transform ourselves into a resilient
corporate structure(Overseas Business)accelerate global growth(Sustainability)
promote initiatives for materiality(Finance)
generate ROE in excess of cost of capital【Wacoal Corp.】
CX strategies and marketing innovation (realization of regrowth)- promotion of CX strategies – strengthening of brand and product development
capabilities –development of human resources and organization
Continue cost structure reforms (improve profitability)- improve profitability by reforming working styles, manufacturing structure, andpursuing cost-effectiveness【Consolidated subsidiaries】
Dealing with underperforming businesses (improve profitability)- build a system that continues to generate sound profits (constant profit surplus)- determine and implement withdrawal and separate business through periodic
inspections (semiannually)
Digital transformation (DX) acceleration on a global basis (promotion of CX
strategies)- improve value of our customer experience with the merger between offline andonline activities- acquire new customers by strengthening digital marketing- convert existing customers to loyal customers by utilizing data and strengthening
CRM- strengthen human capital and organizational capacity to practice management
philosophy and enhance competitiveness- strengthen responses to growing concerns for environmental and human rights
issues- promotion of co-creation innovation to create social value- improve profitability and capital efficiency- further improve transparency of corporate governance- eliminate serious compliance violations

Efforts to improve the effectiveness of the Board of Directors:
Under the medium-term management plan, we will continue to focus on promotion of group management andstrengthening of group capabilities as key management issues and aim to build a solid management base that will
support sustainable growth in the medium to long-term. To improve the effectiveness of the Board of Directors, wewill continue to review the executive compensation system and will strive to optimize the composition of membersof the Board of Directors, ensuring expertise, independence and diversity.
Specific initiatives during the medium-term management plan
- review of management system and clarification of responsible business managers- continuous improvement on the executive compensation system- ensuring diversity of the Board of Directors
Financial strategies:
In terms of our financial strategies, we will leverage operating cash flow to implement IT and digital
investments for growth and explore opportunities for new business investments. In addition, we will work to
improve ROE by placing highest priority on improving profitability, while at the same time, actively returning
profits to shareholders to improve capital efficiency.
Basic policies on our medium-term management plan- work to improve profitability as our highest priority, while simultaneously improving ROE by improving asset
efficiency and capital efficiency

17

Cross-Shareholdings

Shareholder Return

Growth Investment

Guidelines for Medium-term Management Plan Period(from fiscal year ending March 2023 to fiscal year ending March 2025)- continue to actively reduce cross-shareholdings- medium- to long-term cross-shareholdings index is 15% or less of net assets- stable dividends with a target payout ratio of 50% or more
- conduct flexible share buybacks to improve capital efficiency- conduct additional returns to further improve capital efficiency in the absence of appropriate growthinvestments- conduct IT and digital investments for growth and consider opportunities to invest in new businesses(ⅲ) Policy for Fiscal Year ending March 2023
Economic activities during the fiscal year ending March 2023 are expected to remain uncertain due to concerns
on stagnation of economic activities in certain regions caused by the further spread of COVID-19, global inflation,
geopolitical risks, and further increases in raw material and transportation costs associated with these risks. Under
these circumstances, we will endeavor to address complicated and diversified social issues as an “opportunity ofgrowth” for the future, and to enhance our corporate value by promoting “sustainable management”, a management
approach that balances resolving social issues on one hand and sustainable growth on the other hand through ourbusiness activities. In our domestic business, we will continue promoting our unique CX strategy including themerger between online and offline activities and utilization of our customer database to improve value of ourcustomer experience, and strengthening our efforts to improve profitability, aiming to transform ourselves into a
resilient corporate structure. In our overseas business, we will seek further expansion by expanding our e-commercebusiness and entering into the emerging markets, in addition to expanding solid sales growth in the existing areas
where we conduct our business.
Based on the above-described initiatives, we expect net sales of 205.0 billion yen, business income of 7.0
billion yen, operating income of 6.5 billion yen, income before income taxes and equity in net income of affiliatedcompanies of 8.0 billion yen, and net income attributable to owners of parent of 5.5 billion yen for the consolidated
business results for the fiscal year ending March 2023. We formulated our plan for the fiscal year ending March2023 using the key exchange rates of 120.00 yen to the U.S. dollar; 155.00 yen to the Sterling pound; and 19.00 yen
to the Chinese yuan.
(ⅳ) Business Targets＜Guidelines for key indicators＞
Fiscal year ending March 2023
(first year of the medium-term
management plan)

Fiscal year ending March 2025
(last year of the medium-term
management plan)

205,000 million yen

230,000 million yen

Business income

7,000 million yen (3.4%)

16,000 million yen (7.3%)

Operating income

6,500 million yen (3.2%)

16,500 million yen (7.5%)

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

8,000 million yen (3.9%)

18,000 million yen (8.2%)

Net income attributable to owners of parent

5,500 million yen (2.7%)

12,500 million yen (5.7%)

EPS

97.42 yen

200 yen or more

ROE

-

6%

Net sales18

＜Guidelines for financial indicators＞
Cumulative three years (from fiscal year ending
March 2023 to fiscal year March 2025)
Reduction of cross-shareholdings

10,000 million yen or more
100% or more

The dividend payout ratio
Shareholders’ equity

210,000 million yen (as of March 2025)(3) Issues to be addressed
The spread of COVID-19 not only changed the values and attitudes of people toward health and other issues,
but also had a significant impact on consumer behavior and lifestyles, including the promotion of remote work andthe shift of various services to online. Additionally, the business environment surrounding the Company isundergoing significant changes including a shrinking domestic market due to a decline in birthrate and aging
population, changes in distribution such as the expansion of e-commerce, diversifying consumer needs, growing
cost-conscious consumers, and further increase in raw material and transportation costs associated with geopoliticalrisks. In addition, the elevated concern for the environment such as climate change and human rights issues are
drawing increasing attention from society.
“VISION 2030” is an important medium to long-term strategy framework not only to address these issues, butalso to solve social issues and to achieve sustainable growth through our business. Through our initiatives on thetargets of materiality (key issues) which are to “maximize the value provided to customers”, “achieve growth ofeach of our employees and establish a highly rewarding organization”, “preserve the environment globally for future
generations”, “realize a society in which everyone plays an active role in their own way”, and “enhance governancetoward realization of sustainable growth”, we aim to achieve our goal to “evolve and grow as ‘Wacoal Group of theWorld’ by providing both physical and emotional beauty and richness to individuals through delicate sensibility andpremium quality” and to enhance our corporate value.
The following is a summary of issues and initiatives related to our core businesses:
Issues and initiatives related to domestic business:
The biggest challenge in our domestics business is a rigid, high-cost structure that does not generate revenue
when sales decline. We will achieve renewed growth by providing new customer experience value and creating new
businesses, while at the same time reviewing our rigid cost structure to improve business efficiency. As for ourdomestic consolidated subsidiaries, stabilization of management is an urgent challenge. We will assess future
potential and determine whether to continue or review the business. Regarding the creation of new business, wewill consider initiatives which will realize discontinuous growth, including M&A.
Issues and initiatives related to overseas business:
We need to further improve our business results, especially in our e-commerce business, in our major markets.
In addition, in order to realize growth in the emerging areas with large potential markets, such as India andGermany, we will work to expand brand recognition by making investments to ensure competitive advantage.
Issues and initiatives related to Production and Supply System:
In addition to further increase in raw material and transportation costs associated with the spread of COVID-19
and geopolitical risks, and depending on the status of spread of COVID-19, we may be forced to operate under
unstable conditions. Our challenge is to reorganize the supply system on a global basis to further improve
productivity.
Issues and initiatives related to sustainability:
The increasing concern for environmental issues such as climate change and human rights issues are drawing
increasing attention from society. In addition to responding to the demands from the society, it is necessary to
promote co-creation innovation to view efforts to address complicated and diversified social issues as an“opportunity of growth” for the future. At the same time, it is also important to increase the number of employees
who can act with a clear vision of the company’s mission and what the company should be in order to strengthen
our group’s capabilities to respond to changes. By increasing the number of employees practicing our management
19philosophy, we will achieve personal growth for each and every employee, as well as corporate growth.
(Reference)
1. Sustainability Promotion System
Our group promotes “sustainability management” and has established the Sustainability Committee in April
2022 to achieve “to solve social issues” and “corporate growth” through our business. The Sustainability
Committee formulates an overall plan regarding sustainability activities, monitors progress, evaluates achievements,
and periodically reports and makes recommendations to the Board of Directors. Representative Director, President
and Corporate Officer is responsible for the Board of Directors and the Group Management Meeting, the highest
decision-making body at the business operation level, and also acts as the administrative manager of the
Sustainability Committee (Director, Vice President and Corporate Officer acting as the Chair).
"Subcommittee for Carbon Neutral"
In order to reduce the environmental impact and environmental risk of Wacoal Group's business activities andto promote voluntary and active environmental preservation activities, it will deliberate on activity policies andinitiatives related to environmental issues, such as climate change measures and reducing the environmental load ofback offices, and strategic investment projects related to environmental preservation, and monitor progress.
"Subcommittee for Resource Circulation"
In order to promote sustainable use of resources and materials in the supply chain, resource conservation
measures, and waste reduction and recycling, and thereby achieve a resource circulation society, it will deliberate on
procurement policies and quality standards for environmentally-friendly materials, and monitor the progress ofwaste reduction in production and procurement activities.
"Subcommittee for CSR Procurement"
Being responsible for formulating and checking the progress of Wacoal Group's CSR procurement plans, it will
accurately grasp the status of compliance with the Wacoal Group CSR Procurement Guidelines and lead theinitiatives to make corrections and improvements continuously, by operating a cycle from monitoring manufacturingcontractors and raw material suppliers through self-evaluation, etc., analysis and evaluation feedback, correction
and improvement plans, to follow-ups.
"Subcommittee for Human Rights, D&I"
In order to ensure that the obligations of respecting human rights under the Human Rights Policy is fulfilled
and the duties are properly carried out, it will provide educational activities related to the protection of human rights
and advice and recommendations on implementing human rights due diligence. In addition, it will implement
various measures, including holding internal seminars, in order to create a workplace environment that canaccommodate diverse employees and maximize their individual abilities.
2. Specific Initiatives related to Sustainability
Responding to climate change
We believe that climate change, which has a significant impact on the Earth and corporate activities, poses botha risk to our group’s management, and a new business opportunity. In September 2021, our group expressed our
support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and is
working toward disclosure in line with the TCFD, based on the recognition that addressing and improving
environmental issues will lead to sound corporate development and a sustainable society.
Environmental Goals for 2030
Our group has set its own environmental activity goals for 2030 to promote efforts to tackle increasingly
serious climate change issues and realize a carbon-free society. For overseas business, we plan to start fromunderstanding the in-house emission of greenhouse gas (Scope 1 & 2) and disclose our goals by the fiscal year
ending March 2025.
(i) in-house emissions (Scope 1 & 2) “Zero” [Target: offices in Japan]
Aiming to reduce our own emissions of greenhouse gas to virtually zero, we are gradually switching to
renewable energy sources.
20

(ⅱ) production disposal “Zero” [Target: Wacoal Corp.]
Aiming to reduce production disposal to zero, we are promoting our initiatives to reduce disposal of leftovermaterials at factories.
(ⅲ) environmentally friendly materials “50%” [Target: Wacoal Corp.]
Increase the percentage of use of environmentally friendly materials to 50% by shifting to recycled fiber andyarn.
(ⅳ) supply-chain emissions (Scope 3) “20% reduction” [Target: Wacoal Business (domestic)]
Aiming to reduce the supply-chain emissions of greenhouse gas by 20%, we are promoting the initiatives with
our partner companies.
Reduce greenhouse gas emissions:
In July 2021, our group compiled data for and calculated, for the first time, the greenhouse emissions (Scope 3)
for the entire supply chain related to Wacoal Business (Domestic) in accordance with the “Basic Guidelines for
Calculating Greenhouse Gas Emissions through the Supply Chain” in order to further ensure the reduction ofgreenhouse emissions in the supply chain as we move toward the realization of carbon-free society. After that in
October 2021, we have disclosed our goals for reduction of greenhouse gas emissions (Scope 1&2) at our domestic
business.
Support for recommendations of the Task Force on Climate-related Financial Disclosures (TCFD):
In September 2021, our group expressed our support for the recommendations of the TCFD. Information onfour subjects, “governance”, “strategy”, “risk management” and “target and goals” will be disclosed at the end ofJune 2022. For details, please see the Company’s website on “Sustainability>Environmental”.
(https://www.wacoalholdings.jp/en/sustainability/environment/)
Promote consumer- and earth-friendly business activities:
With growing interests in the environment and sustainability, consumers are increasingly making demands suchas “I want to use good products for a long time” and “I want to use environmentally friendly products”. Our groupstrives to manufacture products that consumers will love for a long time, and at the same time, we promote businessactivities that take environmental preservation into consideration, based on the recognition that protection the global
environment is a corporate responsibility.
Reducing product waste loss through long-lasting manufacturing and a unique total production, total inventory andtotal sales system:
Our group’s basic policy of “manufacturing products that are loved by customers” is supported by its
commitment to quality and safety and a system that does not leave inventories. Our quality control system is basedon ISO9001, and we have established strict standards and are working to improve quality at all stages from material
procurement to product planning, product design, and production. In addition, based on our concept of total
production, total inventory and total sales, our group has established a system to minimize waste while generating
profits and the product disposal rate (number of products disposed as to number of products manufactured) at
Wacoal Corp. is approximately 1%.
Development of “environmentally-friendly products” to realize sustainable global environment:
We are developing environmentally friendly products and materials at Wacoal Corp. in order to realize asustainable global environment and to meet consumer demand to use environmentally friendly products. The
product group “Nature Couture” which was launched from our Wacoal brand in September 2021 is our innerwear
product that is gentle to both people and nature, using Japanese paper made mainly from cellulose fibers fromorganic cotton and Manila hemp grown in the United States. The use of dye-free colors and dyes extracted fromplants such as olive leaves and rose flowers, as well as the use of creative designs and patterns, result in less wastematerials than usual. In future, we aim to establish a “waste material recycling system” in which waste materials
arising when cutting fabrics are collected at domestic factories, recycled into yarn, and reused as product materials
for the next season and beyond. Our new environmentally friendly line of women’s innerwear “L∞ping”, which isscheduled to launch in spring/summer 2022 season primarily at our directly-operated stores, will use recycled yarn
as raw materials, with a view to recycling the products after collection in the future.
21

Bra recycling campaign:
Born out of our customers’ feedback that it is difficult to dispose of old and used bras, our bra recycling
campaign is conducted by Wacoal Corp. The campaign is implemented in collaboration with “BRING”, a recycled
clothing and goods brand by JEPLAN, Inc., where collected used bras are transformed into parts for household
goods and other items. In the fiscal year ended March 31, 2022, the campaign ran from October 1, 2021 throughMarch 31, 2022, collecting 25.7 tons of used bras in total from.
Promoting social responsibility in the supply chain
Our group is committed to responsible procurement with our business partners around the world to fulfill oursocial responsibility throughout the entire supply chain. We believe that responding to the expectations of society
and promoting CSR procurement together with our contract manufacturers based on the concept of mutual trust andcooperation will maximize the common interests of the contract manufacturer and the Company and contribute to
the sustainable growth of both parties, and we are actively working on these initiatives.
Promotion of CSR procurement based on mutual trust and cooperation:
The supply chain of the textile and apparel industry begins with product planning and design in the country or
region where the product will be sold, but the production and procurement of raw materials and production of
products at factories use international network with most of the production taking place in China and emerging
ASEAN countries where the products are transported. Our group committed ourselves under the “Wacoal Group
CSR-based Procurement Guidelines” established in October 2017 that “to fulfill our social responsibility, we mustbuild close partnerships with all outsourcees involved in the production of our products and comply and respect not
only “quality”, “price”, and “delivery time”, but also social requirements such as “human rights”, “labor practices”,“environment” and “ethics”, together with our outsourcees. In February 2018, we began operating a cycle to lead tocontinuous corrective action and improvement by accurately understanding the status of compliance with thecontent set forth in the guidelines. Since May 2018, we also disclose basic information of outsourcees who haveagreed to be disclosed.
Basic information on partner factory list (as of August 2021):
Number ofPercentage of purchases accounted forName of Company
Factory
by manufacturing at subject factory
percentage to purchases of innerwear, pajamas,
Wacoal150
96.5% loungewear, babywear, maternity wear, hosiery,
sportswear

Number of
Renewal4

Lecien12

99.5%

percentage to purchases of innerwear

4

Peach John

31

90.0%

percentage to purchases of innerwear, loungewear,
fashionwear

4

Ai

12

78.0%

percentage of purchases of swimwear, innerwear

3

Une Nana Cool

4

98.9%

percentage of purchases of innerwear, pajamas,
loungewear

1

Material overseas
32
100% percentage of purchases of innerwear
subsidiaries **Wacoal America, Wacoal China, Wacoal Europe

1

Details of CSR procurement activities for fiscal year ended March 2022:- establishment of a local audit method (remote audit) in the midst of COVID-19- expanding scope of CSR procurement activities (schedule to add outsourcees which manufacture productcategories other than apparel products)- confirm status of compliance of details set forth in the Wacoal CSR Procurement Guidelines through selfassessment- conducted the second self-assessment at supplier factory of Wacoal Corp. (innerwear other than Wacoal andWing brand products, and third brand group (such as AMPHI brand products))22

2. 【Business Risk and Other】
In our Risk Management Basic Rules, “risk” is defined as “all factors that may hinder the achievement of thebusiness objectives of our group”. We identify such risks, assess the likelihood of their occurrence, evaluate impact
of such risks, set priorities among such risks and decide on how to address such risks. In order to address andmitigate such risks, we implement various countermeasures designed to reduce our exposure to such risks as muchas feasible, while simultaneously monitoring such countermeasures with an aim to continuously improve upon theirsubstance and effectiveness. In addition, we engaged in “Risk Management” measures that are designed tominimize the impact of such on stakeholders including communities and society by responding promptly to any
problems and/or incidents that may occur if such risks materialize.
(1)

Risk Management System
As shown in the diagram below, our group’s Risk Management System is headed by our Representative
Director, President and Corporate Officer who acts as the risk management administrative manager, and under directcontrol of our Director and Managing Corporate Officer who acts as the Chair of the Corporate Ethics and Risk
Management Committee, which consists of members appointed by the Chair. The Risk Control Department andRisk Response Committee established and appointed by the Corporate Ethics and Risk Management Committee, asubgroup which formulates policies on activities and monitors important issues across the entire group, and the Risk
Management Organization, which manages risks by identifying, assessing, responding and monitoring risks asdetermined by the Corporate Ethics and Risk Management Committee and the risk control managers of the Risk
Management Organization bodies.
The Corporate Ethics and Risk Management Committee evaluates risks identified by each Risk Management
Organization bodies from the perspective of their likelihood of occurrence and impact of such risks, and annuallysubmits what we refer to as “Group’s Material Risks”, the risk items that are determined as having a significant
potential impact on the management of our group to the Board of Directors. The Risk Control Department or the
Risk Response Committee then proceeds to work on countermeasures aligned for each item of the Group’s Material
Risks to minimize these risks, and a meeting of Corporate Ethics and Risk Management Committee is held
quarterly, and whenever necessary from time to time, to monitor whether our Risk Management System is working
effectively.

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(2)

Business Risk Factors
Major risk factors related to business and financial conditions described in this report as identified by the
management that may significantly impact the financial position, results of operation and cash flows within group,and their countermeasures are as follows.
Forward-looking statements in this report are made based on information available as of the end of fiscal year
2022.
The Board of Directors discusses and determines Group’s Material Risks after the Corporate Ethics and Risk
Management Committee assesses and selects the risk items that may significantly impact our group’s management.
Items with ★ marks below indicate risks related to “business environment and strategies”, and items with ■ below
indicate “management” risks.

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(2)-1 Risks related to business environment and strategies
 Risks related to changes in market structure Probability of occurrence: High Degree of potential impact: Large
 Risk details
A decline in the number of large-scale retailers and commercial facilities, including department stores and massmerchandisers, as well as an expansion of new business platforms could affect our group’s businessperformance, which has a large share of sales from department stores and mass merchandisers. In addition, thechange in the market structure may result in restructuring of existing business platforms, or changes in sales
policies, which may affect our group’s business performance.
 Countermeasures
The retail market is undergoing structural change (a decrease in number of physical stores), and the sales share ofwholesale outlets such as department stores, mass merchandisers, and specialty stores is expected to gradually
decline. In Japan, our group has addressed these risks by shifting to an area-based sales and marketing systemthat cuts across brands and business categories and strengthening directly managed stores and e-commerce sales
while promoting our customer experience (CX) strategies that enhances customer convenience, including thecentralized management of customer data.
In overseas market, we aim to improve the customer experience by developing unique services that involve
merger of offline and online customer experience. In July 2019, we acquired a U.S. company, Intimates Online,
Inc. to appeal to attract millennials as customers in our group’s global development, to create growth
opportunities in the e-commerce market, and to strengthen our competitiveness. We are accelerating digitaltransformation (DX) in each country and region to increase the lifetime value of our customers aiming to lead theratio of e-commerce sales to total sales to more than 50% within the next 10 years.
On the other hand, in order to address the accounts receivable collection risk following store closures andbankruptcies, we manage our credit exposure at all times and keep adequate inventory at stores domestically andin overseas.
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Risks related to reform of structure of businesses
Probability of occurrence: High Degree of potential impact: Large
Risk details
The labor cost ratio will remain high as the wholesale-centered business reform is in the process, and an increase
in inventories due to an increase in stock keeping units (SKUs) and failure of total inventory and total sales
production management may induce an increase in distribution costs and revaluation of discounts, which may
adversely affect earnings performance.
Countermeasures
While market structure rapidly changes and executing medium- to long-term management strategies, we arepromoting personal planning and organizational reforms to achieve an appropriate workforce structure. We arealso working to create an organizational culture in which personnel and time generated through personnel
planning are invested in new businesses and business areas that need to be strengthened, and each employee canvisualize his/her contribution to the company and realize that they are creating the future of the company.
On the other hand, our previous brand strategy was developed in response to the characteristics of the
distribution channel structure, and as a result of our detailed response, we have developed approximately 60
brands (including sub-brands). Today, customers’ purchasing behavior has shifted to a seamless online andoffline shopping experience, and in addition, competition is intensifying with the global specialty retailer ofprivate label apparel (SPA) type brands. We have overhauled our brand organization and decided to consolidate
it into 9 core brands and 27 constituent brands, and are promoting a new brand strategy to enhance investment
efficiency starting from the 2021 fall/winter season.

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Risks related to changes in competition/competitive environment
Probability of occurrence: Medium Degree of potential impact: Large
Risk details
In domestic and overseas markets, competitors, low-priced products and new entrants from other industries may
intensify the competition in the market, which may result in a loss of sales share and a decline in businessperformance.
Countermeasures
Increase in a competition will lead to lower prices, increased advertising costs, and reduced sales and market
share, which will significantly impact the business, performance and financial position of our group.
Under our mid-term business plan, which ends in the current consolidated fiscal year, with the goal of re-growthand improving profitability at Wacoal Corp., we have been promoting the customer experience (CX) strategy, adifferentiation strategy to provide personalized information to customers, to further deepen the connection witheach customer, and to reflect a more customer-driven approach. This is a further innovation of the customer
service sales strengths that Wacoal has cultivated over the years, using digital technology to offer the bestproducts and their delivery methods, while linking physical stores and e-commerce to enhance the convenienceof our customers’ ability to ship around freely.
Further, in addition to utilizing electronic records and promoting the introduction of personalized apps as
measures to attract new customers, we have also expanded free bra-measuring services, and increased a numberof stores introducing our next-generation tool, “Wacoal 3D smart & try”, in an effort to build a deeper, broader
and longer-term relationship with customers. We have installed Wacoal 3D smart & try at 20 stores, mainly at
department stores, by the end of the current fiscal year, and plan to further expand the number of stores installedin the future.
Furthermore, our three major corporate entities in the United States, Europe and China continue to invest in
growth in their businesses to differentiate themselves from competitors by enhancing the group’s unique anddistinctive brand development and product strategy. At the same time, we are accelerating shop openings andactively investing in advertisement to expand our business in India in order to gain pioneering advantages in theemerging countries.
Risks related to changes in consumer values
Probability of occurrence: Medium Degree of potential impact: Large
Risk details
Our brand strategy, products, or services may not match to the changes in consumer values and we may fail toattract customers or may lose customers, resulting in a decline in business. In addition, failure in brandmanagement and marketing mix may result in unsuccessful attraction of younger generation of customers, while
defection of existing customers may damage our brand value.
Countermeasures
In terms of product policy, our group is working to continuously respond to customer needs and create andprovide new value by promoting merchandising plans by consumer target, improving the functional superiority
and differentiating designs of “Match Me Bra” and other comfort-related products, and developing
environmentally conscious, high-quality and high-value added products such as “Looping (bras and briefs)”.
In terms of brand management and marketing strategy, we are organizing and consolidating our nine core brands,
and by concentrating and selecting brand communication and marketing costs linked with such approach, we
expand both the quality and quantity of our messages to consumer targets. At the same time, we arestrengthening our efforts in sustainability activities to enhance and establish our reputation with society and otherstakeholders.
In terms of customer experience (CX) strategy, we use a mix of free bra-measuring services, electronic records,
personalized apps, and 3D body scanning to strengthen our relationship with customers by attending to theirindividual needs.

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Risks related to development of new markets and customers
Probability of occurrence: Medium Degree of potential impact: Large
Risk details
In response to the shrinking domestic market due to a decline in population and fewer children with an aging
society in Japan, our group is working to develop new markets by developing overseas markets and entering into
new business categories and fields. On the other hand, our failure to meet the diversifying values of consumers
and to generate planned outcome may affect our group’s business performance.
Countermeasures
In domestic market, in addition to our core target group of working-age population, our group is strengthening
marketing to the teenagers, and mature and senior population, and is working to create a lifelong and loyal
customers.
In July 2021, we launched a new brand strategy at Wacoal Corp. to address changes in distribution channel
structure and customer purchase behavior, and to evolve a sales structure irrespective of online or offline access.
We aim to maximize the value provided by each brand by focusing management resources on our 9 core brands.
In addition, we are redefining our brands’ presence and also renewing our brands, including its product mix, andare trying to establish a brand structure that can flexibly respond to changes in customer behavior, which isseamless across channels, including physical stores and e-commerce.
With respect to Peach John, we are expanding our target group by growing three brands (PJ, SL, GLRS) withdifferent age groups, while regularly providing trending topics and improving customer service.
On the other hand, in the United States, we are aiming to grow our e-commerce business entity by aggressively
investing in digital marketing. As a part of our initiatives to strengthen our e-commerce business, we introduceda digital fitting app, “my fit bra”, in May 2021. We are working with an aim to increase the ratio of e-commerce
sales from the current 40% to 70% in the long term by taking various measures including marketing penetrationof this app, which proposes products suited to customers’ needs by measuring their body shape with asmartphone. We are strengthening, not only marketing, but also the logistics infrastructure and other systems
that will support our future e-commerce growth. In China, although we have an approximately 20% share ofsales at department stores, our brand awareness is still weak as our share in the entire underwear market accounts
for less than 1%. In the e-commerce market, where middle class is the main purchasing group, we are working
to acquire new customers and to convert existing customers to loyal customers, while working to strengthen
offline and online collaboration and CRM strategies. We are aiming to revitalize our growth in the e-commercemarket by developing a new product strategy, and at the same time, we are strengthening the opening of directlymanaged stores at shopping malls and other locations that expand our contacts with the middle class consumers.
In Germany, India and other markets where the scale of our group’s operation is still small despite the large
number of middle-income consumers, we are making strategic investments because we see these markets as
having a significant room for future expansion.

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Risks related to increase in procurement prices
Probability of occurrence: Medium Degree of potential impact: Large
Risk details
The structural changes in the supply chain may cause an increase in purchase prices due to an increase in raw
material prices, a higher labor costs in production regions and higher transportation costs, and may affect ourgroup’s business performance.
Countermeasures
In the procurement of materials and production of products, we are increasing our emphasis on procurement andproduction in Asian countries and regions, rather than focusing on domestic procurement, while appropriately
matching both quality and cost aspects. In recent years, in response to changes in the social and working
environment, the axis of overseas production is shifting from China to ASEAN countries including Vietnam. In
addition, we are working to minimize the number of material varieties to the extent possible in the planning anddesigning stages of products, to seek overseas suppliers for materials, and to minimize the number of products
and materials that end up in landfills.
On the other hand, we decided to consolidate our three sewing domestic companies into one company in April
2022. By building a flexible production management system that responds to changes in the external
environment while inheriting the high level of sewing technology in Japan, we aim to both strengthen ourcompetitive superiority and improve business efficiency. In addition, we are working to strengthen our business
effectiveness by integrating the collaboration between the divisions responsible for product research anddevelopment and the sewing unit under the integrated sewing company, thereby enhancing the production systemthat is capable of quick delivery, and challenging and small-lot production.
Risks related to securing and/or developing human resources
Probability of occurrence: High Degree of potential impact: Medium
Risk details
If we fail to secure and/or foster personnel especially for manufacturing, sales representative, personnel
specialized in the area of management of foreign companies, we may not achieve future growth or gain
advantages against competitors, which may adversely affect our group’s business performance. In addition,
failure to efficiently allocate sales representative and post-retirement rehires may result in inefficient labor costs
and reduced motivation, which may cause a downturn in our group’s business performance.
Countermeasures
Our group hires and retains necessary personnel by implementing new recruiting methods such as job-focused
employment and develops human resources through group lectures and online professional expertise training,and strengthens onsite training through our on-the-job training, overseas training programs and cross-industry
learning conducted jointly by other companies. In addition to expanding our focus on career hires, we are also
focusing on referral hires in an effort to revitalize our group by securing a diverse workforce.
On the other than, in response to changes in the market structure, the evaluation of sales representative is being
reassessed to outcomes such as the number of customers served and satisfaction level from the customer’s
perspective (lifetime customer value). In addition, for those rehired after retirement, we are increasing thenumber of positions with higher responsibilities and roles, and promoting relocation of right personnel in theright position when they are rehired, and at the same time, we are working to improve motivation through the
adoption of performance-based salary based on goal management evaluations.

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(2)-2 Management Risks
 Risks related to impact of COVID-19
 Probability of occurrence: High Degree of potential impact: Large
 Risk details
The spread of new epidemic or further or prolonged spread of COVID-19, resulting in stay-at-home measuresand temporary closings of physical stores implemented by government or local authorities, may cause a decline
in sales and significantly affect our group’s business performance. In addition, the spread of number of positive
cases within a business site may disrupt business operations by suspending employee from coming in to thebusiness site or closing the business site.
 Countermeasures
In order to limit the impact of such risks on our group’s business performance and financial position, we will
anticipate changes in individual consumer behavior as consumers cohabit with COVID-19, strengthen services
that meet the customers’ needs such as e-commerce, launch new products, continue to make efforts to reduce
costs and reassess new investments in order to ensure sound management.
Our group has established the COVID-19 Infection Control Committee with our Director and Managing
Corporate Officer acting as the General Manager, as a subcommittee of the Corporate Ethics and Risk
Management Committee which implements appropriate measures while keeping an eye on the worldwide
conditions pertaining to COVID-19 in order to prioritize the safety of our customers, partner companies andemployees to prevent the spread of infection. Specifically, we determine the work framework for physical stores,
including the work and service methods of in-store sales representative, depending on the conditions pertaining
to COVID-19, as well as allow our back office staff to have flexible work options (by encouraging work fromhome and web meetings, and restricting business trips and in-person conferences) by areas and depending on
their status.
As a company handling daily necessities, we will fulfill our responsibility to protect hygienic and comfortable
lifestyles and continue to provide our customers with peace of mind.

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Risks related to fluctuations in interest rates
Probability of occurrence: High Degree of potential impact: Large
Risk details
The market value of listed equity securities and bonds held by the Company may decline, resulting in recording
impairment charges. On the other hand, a decline in valuation and underfunding of plan assets may require
additional contribution or provisions, which may affect our group’s business performance.
Countermeasures
Since we have been using U.S. accounting standards, we are required to recognize gains and losses from changes
in the prices of securities held by the Company in our consolidated statements of income. For the current
consolidated fiscal year, we recorded a loss of 641 million yen as “valuation gain (loss) on marketable securities
and investments – net” due to a decline in value of securities. The Company plans to adopt the International
Financial Reporting Standards starting from the next consolidated fiscal year ending March 2023 to improve theinternational comparability of financial information and to promote full disclosure.
Under the current medium-term management plan, which ends in the current consolidated fiscal year, we havedecided to reduce our overall cross-shareholdings by 30% (over 20.0 billion yen at market value as of March2019) by the end of March 2022. The Board of Directors examined whether income realized from each stock
holding exceeds the Company’s capital cost, and whether such cross-shareholding contributes to theenhancement of our corporate value. Based on results of such examination, we disposed of and reduced a totalof 35 stocks that had diluted value amounting to 19.7 billion yen during the term of this medium-term
management plan (from April 2020 to March 2022).
On the other hand, costs and obligations for termination and retirement benefits are based on the actuarial
assumptions that are used for the calculation of the expected rate of return on plan assets or projected benefit
obligations for termination and retirement benefits. Such costs and obligations for termination and retirement
benefits may increase if the actual results differ from the assumptions or if there is any change to the assumptions,due to fluctuations in the market for securities as well as the interest rate environment. Our approach to establishingthe discount rate is based upon domestic corporate bond indices. For discount rates, please see “3. 【Analyses ofFinancial Position, Results of operation, and Cash Flows by Management】(6) Significant Accounting Policies

and Estimates”.
In order to fulfill the expected functions as an asset owner of a corporate pension plan, we have established thePension Committee, composed of the heads of Finance, Human Resources and Accounting Divisions, to review
asset management policy, policy asset composition, and other matters on a quarterly basis, while using an outside
management consulting firm to supplement our expertise and knowledge.

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Risks related to perception of corporate ethics and compliance
Probability of occurrence: High Degree of potential impact: Large
Risk details
We may be pointed out and publicized by a third party on human rights, labor or environmental issues in our
supply chain, which may affect our business activities or damage our corporate value. In addition, an increase inviolations of corporate ethics and compliance, or problems with advertising expressions and statements,
including those on social media or blogs, and other websites, could lead to a loss of public trust and may
adversely affect our group’s performance.
Countermeasures
In the event of any violation of laws and regulations in Japan and overseas applicable to our group, or any act incontrary to any social order, we may suffer an economic and/or social impact as a result of punishment or loss oftrust from society. Under the current medium-term management plan, which ends in the current consolidated
fiscal year, we address corporate ethics and compliance as one of our material issues as part of our “ESG
initiatives”. Through the activities of Compliance Committee, a subcommittee of Corporate Ethics and Risk
Management Committee, we are making efforts to prevent violation of law by implementing measures, such ascompliance awareness training for employees, an internal alert system, and compliance review by external
experts, and at the same time, by distributing to employees the “Corporate Ethics: Wacoal Standards of Conduct”
which we have enacted.
In particular, we focus on labor and human rights issues in our supply chain for our group’s businesses. We
began working on these issues in response to concerns raised by a non-profit human rights organization in thepast about working conditions and human rights issues at an overseas sewing factory with which ourconsolidated subsidiary had a contract. In April 2018, we established the “CSR Procurement Committee” andproactively making efforts such as self-assessment, on-site audit, formulation and monitoring of correction
and/or improvement plan, and disclosure of our supplier list.
Risks related to natural disasters and accidents
Probability of occurrence: Medium Degree of potential impact: Large
Risk details
Natural disasters such as earthquakes, or fires, explosions may cause damage to business and production sites,
and our employees may suffer damages. In addition, closed traffic, energy outage or blocked communication
may trigger confusion in our operation.
Countermeasures
In preparation for large-scale accident emergencies such as “earthquake directly beneath the Tokyo metropolitanarea”, the Incident and Disaster Control Committee is working on business continuity management from theperspectives of prevention/mitigation, emergency/first response, and recovery/restoration, including thesequential development of BCP plan in the event of damage to our major business sites.
Specifically, in addition to the environmental improvements such as earthquake-resistant buildings, cloudcomputing for data-related servers, safety confirmation system, and mobile work, we are also working to reducerisks by establishing operational backup systems at sales offices and decentralizing production sites in times of
emergency, in line with our social responsibility.

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Risks related to information system availability failures
Probability of occurrence: Medium Degree of potential impact: Large
Risk details
In the event business continuity becomes difficult due to errors or delays in system development, or failure of
critical systems, we may lose the trust of all stakeholders, including our business partners and customers. If thecore system or e-commerce website become inaccessible due to malicious attacks from outside or natural disasterdamage, or if confidential information is leaked from file servers or employee’s PCs, our business may be
adversely affected.
Countermeasures
The Company prescribes “Basic Policies on Information Security” and “Regulations on Information Security
Related Organizations and Responsibilities” to promote understanding of the necessity and responsibility of
information protection among all employees. Compliance Committee operates the Subcommittee forInformation Security under the control of the Corporate Ethics and Risk Management Committee, and works, incollaboration with the IT Governance Department, to understand and improve the current management system,and provide guidance and advice on improving overall information security, including identifying vulnerabilities
in the website.
At the same time, we collect information on data destruction caused by unauthorized IT network intrusion tocustomer information and important technical information, cyber-attacks aimed at disrupting business operation
itself to virus infection, investigate and analyze current status, formulate our group’s activity policies andspecific countermeasures, establish, revise or abolish related regulations, and discuss strategic investment
projects, in an effort to reduce information security risks. In particular, to prepare for unexpected system failures
and malfunctions, we prepare data redundancy and degenerative operations for critical systems, and monitor ecommerce sales as appropriate to ensure that appropriate hardware and network configurations are selected tomatch the load balance. In addition, while conducting irregular targeted email drills, we are promoting the
introduction of the latest security platforms to mitigate risks from both sides by raising employee awareness andestablishing a framework.

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Risks related to inadequate information management
Probability of occurrence: Medium Degree of potential impact: Large
Risk details
In the event of leakage or loss of confidential information or personal information due to inadequate information
management, we may be affected adversely in our business activities and suffer significant loss such as loss ofsocial credibility and suspension of business operations.
Countermeasures
The Company has established the “Regulations on Information Classification”, “Rules on Handling ofConfidential Information”, and “Rules on Protection of Personal Information” to appropriately classify all
information treated in terms of confidentiality, consistency and availability, as well as to protect and prevent
leaks. In addition, to ensure thorough protection and management of material information, we have prepared alist of material information of our group and are working on countermeasures, citing specific examples of insider
information in the categories of management, business and sales strategies, product development, in-houseknow-how, personal information, information system and other categories.
We possess personal information of our various customers for business purposes. Looking to the future, Wacoal
Corp. addresses customer experience (CX) strategies as the pillar of our growth and promotes business modelusing digital data including collected personal information. Overseas, we are also moving forward with plans tostrengthen our e-commerce business, which directly obtains the personal information of customers, and to makeit a pillar of our growth. The protection of personal information is becoming increasingly important in ourgroup’s business activities, not only in response to the implementation of the Amended Act on the Protection of
Personal Information in Japan. To protect personal information from external threats, including strengthening
the protection and management of personal information, complying with related laws and regulations, andeducating employees, IT Governance Department, which was launched in April 2020, investigates the
management status and provides guidance and advice on countermeasures.
Risks related to quality assurance in design and manufacturing
Probability of occurrence: Medium Degree of potential impact: Large
Risk details
If we sell defective products or if our products harm our customers’ health, we may suffer costs for productrecalls and our reputation as a producer of high-quality products may be damaged and we may lose trust fromsociety, which may adversely affect our business performance.
Countermeasures
Our ability to provide high-quality products on a global basis is one of our strengths. We established the Quality
Assurance Council as a subcommittee of the Corporate Ethics and Risk Management Committee, and while we
maintain our safety guidelines, we are also working to ensure compliance with safety clearance rules upon
product planning, design and development, thorough inspections during manufacturing, pursuing the causes ofproblems and formulating measures to prevent their recurrence. By horizontally deploying and sharing about
these activities and information across our group’s domestic and overseas affiliates, we are raising quality
awareness and raising the level of the management system across our group as a whole. Under the direction of
the Quality Assurance Council, we operate the Quality Control Committee, which is composed of members
elected by each department responsible for commercialization plans, and which operates to follow up on
individual issues and conducts internal training on quality control in general.
In addition to thorough quality control and inspection as stipulated, the production sites are working to eliminate
products that do not meet standards under the operation of product acceptance lock system (acceptance of only
products that meet material standards), standardize the skills of inspection personnel, and increase employee
motivation through a quality excellence award system.

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Risks related to labeling of quality and care instructions
Probability of occurrence: High Degree of potential impact: Medium
Risk details
Violations of laws and regulations related to quality labeling and inappropriate expressions in functional labelingmay damage public trust. We may suffer loss due to costs incurred to recall or change the labeling of products,
or due to the discontinuation of sales.
Countermeasures
We recognize that quality labeling, which helps the consumers to select and use products appropriately, covers awide range of areas, including statutory labeling attached to the products themselves, in-store and media
advertising and promotion, promotional expressions, and intellectual property protection labeling, and that this isa case in which risks are likely to become apparent. Through the activities of the Quality Assurance Council and
the Quality Control Committee as described in the preceding section (Quality assurance in design andmanufacturing), we have established and are operating a rule-based system that includes a labeling confirmation
system based on a double-checking at the department that determines the content of labeling, systemization of
the labeling determination process to the extent possible, prompt response to labeling errors when they occur,and thorough investigation of the cause and implementation of countermeasures to prevent recurrence after aproblem occurs. We also regularly conduct internal awareness raising activities and training for those in chargeof quality labeling, as well as internal audits of the actual operation of rules in each department.
On the other hand, the Company is working to mitigate risks by distributing and revising the “Techniques to
Avoid Mislabeling and Misrepresentation” in connection with the Antimonopoly Act, Act against Unjustifiable
Premiums and Misleading Representations, and the Pharmaceutical Affairs Law, and by providing training for
employees through e-learning. In addition, with respect to functionality and efficacy expression, we arereorganizing the notation rules along with the collaboration among the commercialization planning department,
the research department and the quality assurance department, and we are establishing a system to supervise
evidence data with an outside institution.
Risks related to social changes in emerging countries
Probability of occurrence: Medium Degree of potential impact: Medium
Risk details
Our group, which has production bases in emerging countries, may experience delays in materials procurement
and production due to political instability, legal or institutional changes, the occurrence of strikes, or difficulties
in securing human resources, which may affect our business performance.
Countermeasures
At all times, we pay close attention to trends in laws and regulations in each country and region, and make efforts
to collect and analyze local information. We are working to develop and implement measures to understand theactual situation in the community in cooperation with the local “risk control manager”, and if necessary, with thesupport from an outside counsel, consultant and other specialized organizations. In addition to trends in laws andregulations, we pay close attention to the responses to human rights issues in Myanmar, which continues to beunder the control of the military regime. We are working to mitigate geopolitical risks, including national
policies related to COVID-19, by appropriately diversifying our production bases.

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Risk related to infringement or violation of intellectual property rights
Probability of occurrence: Medium Degree of potential impact: Medium
Risk details
Infringement or violation of the intellectual property rights may result in litigation or economic loss. Failure to
strategically protect or utilize intellectual property rights may affect our business.
Countermeasures
The intellectual property rights held by our group, especially the rights to our brands and related trademarks, andproprietary technologies, are very important not only for stimulating and maintaining demands, but also for thesignificance of our business, and we carefully list and manage our intellectual property rights in each country andregion on a case-by-case basis to prevent infringement by a third party.
Disputes related to trademarks, similar products, unauthorized use of trademarks by a third party, and otherinfringements of intellectual property rights in Japan and overseas may affect our business performance. On theother hand, cases have arisen in which the Company is alleged to have infringed the intellectual property rights
of other companies, as well as cases of brand value abandonment (e.g., sales that fraudulently impersonate theCompany) in line with the borderless nature of the e-commerce business. In order to address these risks, theIntellectual Property Committee has been established, and we also provide e-learning to enhance the awarenessof employees, improve the research capability of responsible personnel, use external researchers, and cooperatewith outside experts.
We are also developing intellectual property rights for our knowledge of digital transformation (DX) andcustomer experience (CX) strategies for our group’s services.
Risks related to management of tax matters
Probability of occurrence: Medium Degree of potential impact: Medium
Risk details
An unexpectedly large amount of taxation may affect our group’s financial position and business performance, in
addition to reputational damage.
Countermeasures
According to our current accounting standards, deferred tax assets are recorded based on reasonable assumptions
about our future taxable income. However, deferred tax assets may decrease due to changes in the estimatedamount of future taxable income or changes in tax rates following tax reforms, which could have an adverse
impact on our group’s business performance and financial position. Based on this, the Company reviews, as
appropriate, its estimates of future taxable income in light of changes in the business environment and otherfactors to make a reasonable judgment of collectability.
In January 2021, we formulated and disclosed our “Tax Code of Conduct” with the aim of complying with thelaws and regulations of countries and regions in which we operate, as well as international tax laws, managing
taxes in a highly transparent manner, and gaining the trust of our stakeholders. The Tax Code of Conduct
provides guidelines for domestic and foreign consolidated subsidiaries to establish a group tax system, including
obtaining the latest information on taxation and awareness activities through training, dealing with uncertain tax
positions, application of preferential tax treatment, transactions among group companies, prohibition of tax
avoidance, and disclosure on tax matters.

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

Results of operation

Net sales

Previous Fiscal
Year (ended
March 2021)

Current Fiscal
Year (ended
March 2022)

AmountAmount(Millions of Yen)
Increased/(Decreased) fromprevious fiscal year
Amount%152,204

172,860+20,656+13.6

Cost of sales

67,79876,607+8,809+13.0

Sales profit

84,406

96,253+11,847+14.0

Selling, general and administrative expenses

82,836

91,240+8,404+10.1

A: Impairment charges on goodwill and otherintangible assets
Operating income (loss)

2,685

-

(2,685)-(1,115)

5,013+6,128

-

1,517

2,874

+1,357+89.5

B: Valuation (loss) gain on marketable securities
and investments – net
Income before income taxes and equity in net
income of affiliated companies
Net income attributable to Wacoal Holdings Corp.

10,390(641)(11,031)-

10,792

7,246(3,546)(32.9)

7,025

4,608

(2,417)(34.4)

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

1,570

5,013

+3,443+219.3

3,087

7,887

+4,800+155.5

Other income *Other than B

While the business environment surrounding our group during the current fiscal year (from April 1, 2021 toMarch 31, 2022) in the United States and Europe improved due to relaxations of restrictions on economic activities
related to the coronavirus pandemic (“COVID-19”) which supported a recovery in sales, the business environment
in Japan has remained difficult due to the prolonged restrictions on economic activities as a result of a number ofdeclarations of the state of emergency and implementation of focused preventative measures.
Under such circumstances, our group has moved forward with our initiatives to create a management structurethat leads to high profitability, while prioritizing the well-being and safety of our customers, employees and partnercompanies to conduct our business. We also worked to build a deeper, broader and longer-term relationship witheach customer by continuing to develop and provide products and services that consumers expect in their new
lifestyles, which have significantly changed as a result of the spread of COVID-19, and by promoting our unique
CX strategies, which involve merger of online and offline activities and utilization of a customer database, in efforts
to improve customer experience values.
For the current fiscal year, which is the last year of our mid-term business plan, consolidated sales were 172.86
billion yen (an increase of 13.6% as compared to such sales for the previous fiscal year) and consolidated operating
income was 5.01 billion yen (as compared to an operating loss of 1.12 billion yen for the previous fiscal year).
Consolidated income before income taxes and equity in net income of affiliated companies were 7.25 billion yen (adecrease of 32.9% as compared to such income for the previous fiscal year) due to a valuation loss on marketablesecurities and investments of 0.64 billion yen (as compared to a valuation gain of 10.39 billion yen for the previous
37fiscal year). (We have been using U.S. accounting standards, under which equity securities held by Wacoal Holdings
Corp. and consolidated subsidiaries are measured at fair value, and any change from the beginning of the period arerecognized as “valuation gain (loss) on marketable securities and investments – net” under “Other income(expenses)”.)As a result of the above, net income attributable to Wacoal Holdings Corp. was 4.61 billion yen (a decrease of
34.4% as compared to previous fiscal year). The exchange rates used for the current fiscal year (the previous fiscal
year) were: 112.38 yen (106.06 yen) to the U.S. dollar; 153.56 yen (138.68 yen) to the Sterling pound; and 17.03
yen (15.48 yen) to the Chinese yuan.
The following is a summary of results of operations by operating segments.

Total Net Sales
Wacoal Business(Domestic)
Wacoal Business(Overseas)
Peach John
Business
Other

Previous Fiscal Year(ended March 31, 2021)
Distribution
AmountRatio (%)
152,204100.0(Millions of Yen)
Increased/(Decreased)from previous fiscal year

Current Fiscal Year(ended March 31, 2022)
Distribution
AmountRatio (%)
172,860
100.0+20,656+13.6

Amount%86,13356.6

88,12851.0+1,995+2.3

41,35527.2

59,67834.5+18,323+44.3

12,2008.0

12,528

7.3

+328

+2.7

12,516

8.2

12,526

7.2

+10

+0.1
(Millions of Yen)

Operating
Income/(Loss)
Wacoal Business(Domestic)
Wacoal Business(Overseas)
Peach John
Business
Other

Previous Fiscal Year(ended March 31, 2021)

Current Fiscal Year(ended March 31, 2022)

Increased/(Decreased)from previous fiscal year

Amount% to Sales

Amount% to Sales

Amount%(1,115)

-

5,013

2.9

+6,128

-

627

0.7

2,319

2.6

+1,692+269.9(2,603)

-

2,351

3.9

+4,954

-

1,591

13.0

1,651

13.2

+60

+3.8

(730)

-

(1,308)

-

(578)

-

(Reference) Net Sales and Operating Income/ (Loss) of Major Subsidiaries

Net Sales
Wacoal Corp.

Previous Fiscal Year(ended March 31, 2021)
Distribution
AmountRatio (%)
79,877
52.5

Current Fiscal Year(ended March 31, 2022)
Distribution
AmountRatio (%)
81,184
47.0(Millions of Yen)
Increased/(Decreased)from previous fiscal year
Amount%+1,307+1.6

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

17,64911.6

25,282

14.6+7,633

+43.2

9,896

6.5

16,305

9.4+6,409+64.8

Wacoal China Co., Ltd.

8,755

5.8

12,1577.0+3,402+38.9

Peach John Co., Ltd.

12,2008.0

12,528

7.3

+328

+2.7

Lecien Corporation

4,614

3.0

3,484

2.0

(1,130)(24.5)

Nanasai Co., Ltd.

5,312

3.5

6,042

3.5

+730

+13.7

38

*Sales to external customers only
(Millions of Yen)
Operating Income/(Loss)
Wacoal Corp.

Previous Fiscal Year(ended March 31, 2021)

Current Fiscal Year(ended March 31, 2022)

Increased/(Decreased)from previous fiscal year

AmountAmount% to Sales

Amount%% to Sales(2,022)

-

(729)

-

+1,293

-

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

(914)

-

433

1.7

+1,347

-

666

6.7

1,804

11.1

+1,138+170.9Wacoal China Co., Ltd.

625

7.1

260

2.1

(365)

(58.4)

Peach John Co., Ltd.

1,591

13.0

1,651

13.2

+60

+3.8

Lecien Corporation

221

4.8

(642)

-

(863)

-

Nanasai Co., Ltd.

(358)

-

(249)

-

+109

-

*Net sales and operating income/(loss) for the major subsidiaries above are based on the accounting standards of therespective countries.
(ⅰ)

Wacoal Business (Domestic)
Net sales attributable to our “Wacoal Business (Domestic)” segment were 88.13 billion yen (an increase of
2.3% as compared to such sales for the previous fiscal year) and operating income was 2.32 billion yen (an increaseof 269.9% as compared to such income for the previous fiscal year). Although we were affected by the absence ofthe employment adjustment subsidy, which we received during the previous fiscal year, we recorded an increase inoperating income during the current fiscal year, attributable to our increased sales and a gain from sale of real estate.
Wacoal Corp.:
Net sales from Wacoal Corp., our core operating entity in Wacoal Business (Domestic) segment, increased by
1.6% as compared to such sales for the previous fiscal year. Our e-commerce website “Wacoal Web Store”, which
achieved significant growth during the previous fiscal year, recorded its highest sales figure ever during the current
fiscal year as a result of strong sales from our existing customers even though we struggled to attract newcustomers. Sales from third-party e-commerce websites also exceeded such sales for the previous fiscal year. On
the other hand, sales from physical stores, including our key sales channels such as department stores, generalmerchandise stores and directly operated stores, remained suppressed as they were impacted by more customers
staying home in response to another wave of the spread of COVID-19 and rapid spread of its Omicron variant.
Although Wacoal Corp.’s operating income improved from the previous fiscal year as a result of our continued
efforts to reduce fixed costs such as sales promotion expenses and personnel costs as part of a revenue structuralreform, we recorded an operating loss of 0.73 billion yen (as compared to an operating loss of 2.02 billion yen forthe previous fiscal year) due to the weak sales resulting from the long-term effects of COVID-19. The employment
adjustment subsidy and a gain from sale of real estate are not included or reflected in Wacoal Corp.’s operating
income because they are recognized as non-operating income and extraordinary income, respectively (which havebeen reclassified as operating income under the consolidated business results based on the U.S. accounting
standards).
(ⅱ)

Wacoal Business (Overseas)
Net sales and operating income attributable to our “Wacoal Business (Overseas)” segment on a Japanese yenbasis were 59.68 billion yen (an increase of 44.3% as compared to such sales for the previous fiscal year) and 2.35
billion yen (as compared to an operating loss of 2.60 billion yen for the previous fiscal year), respectively, achieving
significant increases due to expanded sales in the United States and Europe. Starting in the current fiscal year, wehave changed the presentation of net sales from Wacoal China Co., Ltd. related to department stores to be based on
storefront prices, but we have not made retroactive revisions. In addition, there is no impact of this change inpresentation on operating income because this change resulted in increases in both net sales and selling, general andadministrative expenses of the same amount (2.04 billion yen).
39

Wacoal International Corp. (U.S.):Net sales from Wacoal International Corp. (U.S.) on a local currency basis increased by 35.2% (an increase of
43.2% on a Japanese yen basis) as compared to such sales for the previous fiscal year, achieving its highest sales
figure ever during the current fiscal year.
Net sales from Wacoal America, Inc., which distributes “Wacoal” and “b.tempt’d” brand products, increased by
39.1% as compared to such sales for the previous fiscal year due to strong sales from our e-commerce website andphysical stores maintained throughout the year supported by a strong recovery in consumer spending despite theimpact of more customers staying home in response to the spread of the Omicron variant and missed opportunities
to sell our products due to delay of production in the second half of the current fiscal year. Net sales from Intimates
Online, Inc., which distributes “LIVELY” brand, increased by 14.9% as a result of expanded sales from wholesaleand directly-operated stores even though sales from its e-commerce website struggled to grow as a result of
reducing advertising investment due to the impact of rising costs of social media advertising.
On a local currency basis, we recorded an operating income of 3.9 million dollars (0.43 billion yen on a
Japanese yen basis) (as compared to an operating loss of 8.6 million dollars (0.91 billion yen on a Japanese yenbasis) for the previous fiscal year) from Wacoal International Corp. (U.S.). Operating income from Wacoal
America, Inc. grew significantly as a result of increased sales while operating loss from Intimates Online, Inc.
increased due to changes in distribution ratio of sales channels, as well as our strengthened efforts for inventory
optimization.
Wacoal Europe Ltd.:Net sales from Wacoal Europe Ltd. on a local currency basis increased by 48.8% (an increase of 64.8% on a
Japanese yen basis) as compared to such sales for the previous fiscal year, achieving its highest sales ever as a resultof sales in the United Kingdom, Europe and the United States which exceeded the pre-pandemic level across allareas, supported by a strong recovery in consumer spending.
With respect to sales by channel, our core specialty stores and third-party e-commerce websites maintained
strong sales, and our own e-commerce website in the United Kingdom achieved an increase in net sales of 35.5% ascompared to the previous fiscal year. While sales from our department stores fell short of reaching the pre-pandemic
level due to the impact of the closings of certain department stores, net sales significantly increased as compared tosuch net sales for the previous fiscal year by developing business with new client.
Operating income on a local currency basis increased significantly by 144.9% (an increase of 170.9% on a
Japanese yen basis) as compared to such income for the previous fiscal year due to the effect of increased sales.
Wacoal China Co., Ltd.:Net sales from Wacoal China Co., Ltd. on a local currency basis increased by 26.2% (an increase of 38.9% on a
Japanese yen basis) as compared to such sales for the previous fiscal year.
While sales from physical stores, such as department stores, remained suppressed during the second half of theyear (from July to December) due to the impact of regulations restricting activities in response to the spread of
COVID-19, Wacoal China recorded an increase in net sales for the current fiscal year as a result of an improvementin sales for the first half of the year (from January to June) as physical stores that temporarily closed during theprevious year began to reopen and the number of new openings of directly-operated stores at shopping malls
increased. On the other hand, e-commerce sales were below such sales for the previous fiscal year due to increased
competition with Chinese domestic brands, which limited the effects of our promotional efforts, including
influencer marketing using popular Key Opinion Leaders.
Although net sales from Wacoal China Co., Ltd. increased, operating income on a local currency basis
decreased by 62.0% (a decrease of 58.4% on a Japanese yen basis) as compared to such income for the previous
fiscal year due to the absence of government assistance, which were available during the previous fiscal year, and anincrease in costs incurred for resuming business activities.
(ⅲ)

Peach John BusinessNet sales attributable to our “Peach John Business” segment were 12.53 billion yen (an increase of 2.7% ascompared to such sales for the previous fiscal year).
Net sales from our directly-operated stores increased by 13.4% as an increased number of customers returned
to our physical stores as a reaction to the temporary closings of our physical stores due to the spread of COVID-1940

during the previous fiscal year and as a result of our trendy marketing efforts including the launch of our products
through collaboration with celebrities. On the other hand, despite the positive impact of products released incollaboration with celebrities, e-commerce sales did not reach the level of sales achieved in the previous fiscal year,
when sales significantly expanded, and decreased by 11.0% as compared to such sales in the previous fiscal year.
We recorded an operating income from our Peach John Business segment of 1.65 billion yen (an increase of
3.8% as compared to such income for the previous fiscal year). Despite the absence of favorable factors for theprevious fiscal year such as rent relief, we maintained a high level of profit due to increased sales.
(ⅳ)

Other

Overall net sales attributable to our “Other” business segment were 12.53 billion yen (an increase of 0.1% ascompared to such sales for the previous fiscal year), while we recorded an operating loss of 1.31 billion yen (ascompared to an operating loss of 0.73 billion yen for the previous fiscal year).

Lecien Corporation:
Net sales from Lecien Corporation decreased by 24.5% as compared to such sales for the previous fiscal year
due to delivery delays caused by our factory in Vietnam which suspended its operation, and weak sales of ourprivate products sold by general merchandise stores and major apparel supply chain companies. We recorded an
operating loss of 0.64 billion yen (as compared to an operating income of 0.22 billion yen for the previous fiscal
year) due to one-time expenses incurred for the liquidation of unprofitable subsidiaries, in addition to the impact of
decreased revenue, during the current fiscal year.

Nanasai Co., Ltd.:
Although net sales from Nanasai Co., Ltd. were weak for the first half of the current fiscal year due tocancellation of new shop openings and various events following the spread of COVID-19, net sales increased by
13.7% as compared to such sales for the previous fiscal year due to a recovery seen in the renovation orders after
October.
Despite our efforts to reduce costs by reassessing our operations, we recorded an operating loss from Nanasai
Co., Ltd. of 0.25 billion yen (as compared to an operating loss of 0.36 billion yen for the previous fiscal year) due tothe significant impact of suppressed sales during the first half of the current fiscal year.
(2)

Financial Position
Our total assets as of March 31, 2022 were 303.25 billion yen, a decrease of 19.52 billion yen from the end of
the previous fiscal year, mainly due to a decrease in cash and cash equivalents for repayment of bank loans.
Our liabilities were 77.19 billion yen, a decrease of 26.95 billion yen from the end of the previous fiscal year,
mainly due to a decrease in short-term bank loans for reasons similar to those discussed with respect to assets.
Shareholders’ equity was 223.01 billion yen, an increase of 7.39 billion yen from the end of the previous fiscal
year, due to recognition of net income and changes in foreign currency translation adjustments.
As a result of the above, our total shareholders’ equity ratio as of March 31, 2022 was 73.5%, an increase of
6.7% from the end of the previous fiscal year.
(3)

Cash Flow Status

The balance of cash and cash equivalents at the end of fiscal year 2022 was 37.98 billion yen, a decrease of
25.58 billion yen as compared to the end of the previous fiscal year.
(Cash flow provided by operating activities)
Cash flow provided by operating activities was 13.01 billion yen, an increase of 8.75 billion yen as comparedto the previous fiscal year, after adjustments for changes in assets and liabilities to our net income of 4.54 billion
yen plus adjustments for depreciation expenses and deferred taxes.
(Cash flow used in investing activities)
Cash flow used in investing activities was 3.10 billion yen, an increase of 0.53 billion yen as compared toprevious fiscal year, due to payments made to acquire tangible and intangible assets.
(Net cash provided by financing activities)
Cash flow used in financing activities was 36.35 billion yen, as compared to cash flow provided by financing
41

activities in the amount of 33.61 billion yen for the previous fiscal year, due to repayment of short-term bank loans,payments made for dividends as well as repurchase of treasury stock.

42

(4) Production, Orders Received, and Sales(ⅰ) Production Results
Our consolidated production results by operating segment for fiscal year ended March 2022 are as follows. No
data is available for the Peach John Business since all of its entities are sales companies. The production results forother segment are not shown since it is hard to define such term in this segment.
Amount (Millions of yen)

Changes as Compared toPrevious Fiscal Year (%)

Wacoal Business (Domestic)

34,478100.0

Wacoal Business (Overseas)

14,566113.9

49,044

103.8

Name of Operating Segment

Total(Note)

1. Inter-segment transactions are offset and eliminated from calculation.
2.The amount of results of operation is based on the manufacturing costs.

(ⅱ) Orders Received
Among Other, the department of Nanasai, which handles interior design and construction of stores at commercial
facilities, adopts the build-to-order production system.
The status of orders received for other segment for fiscal year ended March 2022 is as follows:
Name of Operating Segment
Other(Note)

Amount of Orders
Received(Millions of yen)

Changes as Compared Balance of Amount of Changes as Comparedto Previous Fiscal
Orders Received
to Previous Fiscal
Year (%)(Millions of yen)
Year (%)

3,887

129.1

124

60.8

Inter-segment transactions are offset and eliminated from calculation.

(ⅲ) Sales Results
Our consolidated sales results by operating segment for fiscal year ended March 2022 are as follows:
Amount (Millions of yen)

Changes as Comparedto Previous Fiscal Year (%)

Wacoal Business (Domestic)

88,128102.3

Wacoal Business (Overseas)

59,678144.3

Peach John Business

12,528

102.7

Other

12,526100.1

172,860

113.6

Name of Operating Segment

Total(Note)

1. Inter-segment transactions are offset and eliminated from calculation.
2. None of the customers ’ sales accounts for 10% or more of the total sales results.

(5)

Capital Resources and Liquidity
Our current policy is to fund our cash needs from cash flows from operating activities, which allows us tosecure most of working capital, make capital investments, and pay dividends without relying on substantial
borrowings or other financing from outside of our group companies. As of March 31, 2022, we had credit facilities
at financial institutions totaling 58,494 million yen, and the balance of loan which established line of credit
amounted to 11,853 million yen. Of these loans, 10,000 million yen is available to the Company, 1,346 million yen
is available to Wacoal International Corp. and 227 million yen is available to Wacoal Europe Ltd.
In general, most of our credit facilities have automatically renewed terms, and we are not aware of any issues
with respect to any of our lenders that could cause these facilities to become unavailable. Even if any of our
subsidiaries loses access to funds from our credit facilities, we believe that it is possible for other companies in ourgroup to provide any necessary funds. Our borrowing requirements are not affected by seasonality.
We are not aware of any restrictions on the transfers of funds from a subsidiary to a parent company in theform of a cash dividend.
43

We have set up new borrowing facilities with financial institutions after April 2020 and borrowed up to 40.0
billion yen in order to secure liquidity on hand given the uncertainties surrounding the degree and duration of the
impact of COVID-19. By the end of the current fiscal year, we have repaid 30.0 billion yen of such new
borrowings. We plan to continue securing liquidity of our funds based on strict assessment of purpose andprofitability.
(i)

Capital Investments
Please see “III. Property, Plants and Equipment – 1. Summary of Capital Investment, etc.”(ii) Cash Flows
Please see “(3) Cash Flow Status.”(6)

Significant Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of theconsolidated financial statements requires our management to make estimates and assumptions. We believe that thefollowings are some of the more critical judgment areas in applying our accounting policies in the preparation of
our consolidated financial statements.
The assumptions on future business results are subject to uncertainties such as the impact of the COVID-19
and other factors that may arise in the future, and are based on information currently available. Please see “Use of
Estimates” under “V. Financial Information – 1. Consolidated Financial Statements (1) Consolidated Financial
Statements – Notes to Consolidated Financial Statements – 1. Summary of Significant Accounting Policies” for the
impact of the COVID-19 outbreak on estimates.
(ⅰ)

Revenue Recognition
We recognize revenue when control of promised products are transferred to customers and performanceobligations are satisfied. Our Group’s revenue is recognized for transactions, net of any trade discounts or rebates
given. In addition, provision for expected returns is deducted from revenue based on actual return amounts fromprevious fiscal year. Potential increases in trade discounts, rebates or returns resulting from changes in market
conditions or consumer demand may adversely affect our revenue.
(ⅱ)

Allowance for Doubtful Receivable
We are required to assess the collectability of notes and accounts receivable. A considerable amount of
judgment is required in assessing the ultimate realization of these notes and receivables, including the current
creditworthiness of each applicable customer, to take account business conditions, turnover of receivables, andfinancial positions for significant customers. In the event that a customer’s financial condition worsens, theallowance for doubtful receivables may increase and may adversely affect our financial condition andperformance.
(ⅲ) Valuation Loss on Inventories
Inventories are stated at the lower of cost or market, cost being determined on a first-in, first-out basis for
raw materials and on an average cost basis for work in process and finished products. Market value, or net
realizable value, is the estimated selling price in the ordinary course of business less the estimated costs ofcompletion and the estimated costs necessary to make a sale. A periodic review of inventory is performed inorder to determine if inventory is properly stated at the lower of cost or market. Inventories are written down tothe estimated net realizable values, if appropriate. Factors, such as expected average selling price, expected
average cost to make a sale, disposal rate, and class or type of inventories, based on judgments regarding
historical results future consumer demand, and other factors, are analyzed to determine estimated net realizablevalue. We also consider potential disposal of inventories. We believe that the amount written down is appropriate.
However, if market conditions and demand are less favorable than our projections, the amount we write down
may increase and may adversely affect our business performance etc.
(iv) Deferred Tax Assets

44

We currently have significant deferred tax assets, which are subject to periodic recoverability assessments.
Realization of our deferred tax assets is principally dependent upon the realization of projected future taxable
income. In estimating our future taxable income, we consider past results of operation, the feasibility of ongoingtax planning strategies, and other factors. Our judgments regarding future profitability may change due to future
market conditions and other factors. These changes, if any, may require recognition of a significant valuation
allowance for these deferred tax asset balances. In the event we determine that certain deferred tax assets may not
be recoverable, such amounts will be reserved for and may adversely affect net income. We believe our deferred
tax assets after adjustments for valuation allowance are recoverable. If we record lower-than-expected earnings
and our deferred tax assets become unrecoverable, however, a valuation allowance must be recorded against theamount that is not likely to be recovered, and this may have a negative impact on our profit and loss.
(v)

Valuation Loss on Marketable securities and Investments
Valuation loss on debt securities are charged to earnings when a decline in fair value below the cost is otherthan temporary. We periodically determine whether a decline in the fair value of debts securities and investments
is deemed to be other-than-temporary decline, based on criteria that include the duration and severity of market
decline, the extent to which cost exceeds market value, our financial position and business outlook, and our intent
and ability to retain the impaired marketable securities and investments for sufficient period of time for
anticipated recovery in fair value.
Equity securities are measured at fair value and unrealized holding gain or loss is recorded in net profit orloss.
We believe that the criteria for evaluating impairment are reasonable. However, changes in the market or
circumstances of each individual investment due to unforeseen changes in economic and business assumptions
could affect the valuations of marketable securities and investments.
As of March 31, 2022, we did not hold any debt securities.
(ⅵ) Impairment of Long-Lived Assets
The carrying values of long-lived assets, held and used by the Companies, are evaluated for impairment
whenever there is an event or change in circumstances that indicates that such assets have been impaired or thatthe carrying amounts of such assets might not be recoverable. When we determined impairment, we evaluate thecarrying amount of the assets based on their fair value.
In fiscal year 2022, the carrying values of buildings and structures, machinery and equipment, vehicles andtools, furniture and fixtures in Wacoal Corp. and its subsidiaries, whose fair values fell below the book values,
were reduced as a result of an impairment test on fixed assets. The impairment charges of 211 million yen wererecognized as operating costs and expenses in amounts of “Wacoal Business (Domestic)” segments.
(ⅶ)

Impairment of Goodwill and Other Intangible Assets
We are required to perform an annual impairment test of our intangible assets with indefinite useful lives andgoodwill at least once a year. We also assess the impairment of such goodwill and intangible assets whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. Some of the factors
we consider important that could trigger an impairment review include the following: significant negative industry
or economic trends; significant underperformance relative to projected future operation results; significant
changes in the manner of the strategy for our overall business; and significant changes in risk-adjusted discountrates.
When we determine that the carrying amount of goodwill and intangible assets may not be recoverable based
upon the existence of one or more of the above indicators of impairment, we evaluate the carrying amount of theassets based on their fair value. If the fair value is less than the carrying amount of the assets, we record an
impairment charge based on the difference between the carrying amount and the fair value of the assets.
If we make an initial determination that the carrying amount of goodwill and intangible assets may not berecoverable, we engage an independent appraiser to assist us in our determination of the fair values of ourreporting units. In our determination of the fair value of goodwill, the appraiser utilizes the net present value
method with incorporate relevant unobservable inputs. In our determination of the fair value of trademark, theappraiser utilizes the relief-from-royalty method with incorporate relevant unobservable inputs.
As a result of the evaluation performed for fiscal year 2022, we judged impairment charge on goodwill is45

unnecessary.
(ⅷ)

Employee Retirement Benefits
We provide a number of retirement benefit plans to a substantial portion of our employees. Our wholly
owned subsidiary, Wacoal Corp., has a contributory retirement plan. The amount of the projected retirement
benefit obligation and pension costs are dependent on management’s assumptions used by actuaries in calculatingsuch amount. The key assumptions include discount rates, the expected long-term rate of return on plan assets,
retirement rates, mortality expectations, and other factors. Our management believes that these actuarial
assumptions and methods are appropriate in light of our circumstances. However, due to a change in an actuarial
assumption, the amount of the projected retirement benefit plan obligations and costs may be adversely affected.
Our approach to establishing the discount rate is based upon domestic bond rates. The discount rate
assumption is based upon the effective yields as of March 31, 2022 on Japanese government bonds whosematurity dates approximate the timing of the expected future benefit payments. On March 31, 2022, the discountrate was 0.7.
We determine the expected long-term rate of return on plan asset assumptions by evaluating both historicalreturns, as well as estimates of future returns. The expected return on assets was based on expected equity anddebt securities returns weighted by the percentage of each of the major asset classes. The estimate of the longterm rate of return on assets for the contributory retirement plan is 2.5% for fiscal years 2021 and 2022. The
estimated long-term rate of return is based on an asset allocation of equity securities of 26.0%, debt securities of
54.0%, life insurance company general accounts of 18.0%, and short-term financing of 2.0%.
These assumptions have a significant effect on the amount of the obligation and periodic benefit cost
reported. A change of 0.5% in the discount rate and the expected long-term rate of return on plan assets would
have the following effects:
Effect on net periodic benefit
costs(Millions of yen)

Effect on benefit obligation(Millions of yen)

Discount rate: 0.5% decrease

an increase of 194

an increase of 1,416

Discount rate: 0.5% increasea decrease of 204

a decrease of 1,507

Expected long-term rate of return onplan assets: 0.5% decrease

an increase of 148-

Expected long-term rate of return onplan assets: 0.5% increasea decrease of 152-(ⅸ) Recent Accounting Pronouncements:
Please see “V. Financial Information – Notes to Consolidated Financial Statements – 1. Summary of
Significant Accounting Policies – Recent Accounting Pronouncements”.

46

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

47

5. 【Research and Development】
Our research and development activities are mainly conducted by our Human Science Research Center to achieve
harmony between the human body and clothing and to support better product making.
Since 1964, we have been conducting research into the female body in order to accurately understand theJapanese woman’s physique. In particular, we have developed a silhouette analysis system and introduced a threedimensional measuring system. We are also working on an even more advanced measurement of sensory comfort.
Our research and development activities focus on addressing the proportional, physiological, and mental aspects ofgarment design. One of our most important research results was the enrichment of our research on sensory comfort
through our participation in a project led by the Ministry of Trade and Industry (presently the Ministry of Economy,
Trade and Industry) from 1995 to 1998. Based on this research, we have been focusing on developing new productsthat are not only comfortable for the wearer, but also have a positive physiological effect based on the basic study
from three factors, which are pressure, heat, and touch. In 2005, we developed and created a new market for ourbreakthrough Style Science series products, which support the creation of a healthy and beautiful body by changing
the idea of everyday walking to walking for exercise. In 2010, we analyzed body shape changes of the same subject
from his/her 20s to 50s and published the principles of aging-related body changes, and strengthened thedevelopment of new products that respond to aging-related body changes. We also developed new functional
products inspired by the lifestyle habits of people with smaller body shape changes due to aging, and in 2020, basedon the research report “Research on Bust Movement and Skin due to Gravity”, we held a research presentation
conference on to the importance of protecting bust from the effect of gravity and developed new functional products
such as “gravity-proof bras” and “gravity-proof bottoms” based on such research. In 2021, we launched “Body
Culture Research Project”, a co-creation project with universities and other companies, and began activities tocreate a body culture market. In March 2022, we held “Body Culture Symposium” at the Tokyo Aoyama SpiralHall for the participants and related parties of the project.
In April 2022, we changed the division name from Human Science Research Center to Wacoal Human Science
Research & Development Center and reinforced personnel to strengthen our product and technology development
capabilities.
As a result of the above, we recorded 446 million yen for our research and development during the fiscal year
ended March 2022.
Our research and development activities cover a wide range of research from basic research to productdevelopment, mainly of women’s innerwear. Therefore, it is difficult to relate each of such activities to a specificsegment, and thus, we do not provide information regarding such research and developments by segment.
In order to promote “the realization of an industry supporting women with unbounded living beauty,” we will
make efforts to enrich research and development activities that contribute to the improvement of customer
satisfaction and corporate value based on the key concepts of beauty, comfort, and health. We will also work
toward strengthening product appeal and developing new products or services that can gain support from and satisfy
our customers.

48

III. 【Property, Plants, and Equipment】
1. 【Summary of Capital Investment, etc. 】
The amount of capital investment for the fiscal year ended March 31, 2022, was 9,745 million yen, mainly
including expenditures for expansion of our Moriyama Distribution Center, information system investments
incurred by our subsidiaries, and expenditures for the maintenance and repair of real estate.
The amounts of capital investment made in Wacoal Business (Domestic), Wacoal Business (Overseas), PeachJohn Business, and Other were 7,409 million yen, 2,006 million yen, 255 million yen, and 75 million yen,respectively.

2. 【Major Property, Plants, and Equipment】
The table below shows our major property, plants, and equipment within our group (Company andconsolidated subsidiaries).
(1) Wacoal Holdings Corp.
As of March 31, 2022
Facility(Location)
Head Office(Minami-ku, Kyoto) and
other

(2)

OperatingSegment

Type of
Equipment andFacilities

WacoalBusiness(Domestic)

Facilities foradministrationaffairs, etc.

Book Value (Millions of yen)
Buildings
andstructures

MachineryandEquipment

Land (m2)

Total

20,6191,215

17,397(271,127)

39,231

Number of
Employee(s)

90
［ －］

Domestic Subsidiaries
As of March 31, 2022
Book Value (Millions of yen)

Name of Company(Location)

Wacoal Corp. Head Office(Minami-ku, Kyoto)
Two other business office inKyoto district
Wacoal Corp. Tokyo Office(Chiyoda-ku, Tokyo)
One other business office inTokyo
Wacoal Corp. SpiralBusiness Department(Minato-ku, Tokyo)
Wacoal Distribution Corp.
Moriyama Distribution
Center(Moriyama, Shiga)
Kyushu Wacoal
Manufacturing Corp.,
Nagasaki Plant(Unzen, Nagasaki)
Torica Inc.
(Saihakugun Nanbucho,
Tottori)Three other plants
Nanasai Co., Ltd.
Osaka Commodity Center(Yodogawa-ku, Osaka)

OperatingSegment

Type of
Equipment andFacilities

WacoalBusiness(Domestic)

Buildings
andstructures

Machinery,
Vehicle,Equipment,
andFixtures

Land (m2)

Facilities foradministrationaffairs

43

120

－

164

1,939
［ 62］

WacoalBusiness(Domestic)

Facilities foradministrationaffairs

19

33

－

53

1,491
［ 34］

WacoalBusiness(Domestic)

Sales facilities

46

24

－

70

－
［ －］

WacoalBusiness(Domestic)

Facilities formerchandise
management

18

234

－

252

320
［ －］

WacoalBusiness(Domestic)

Manufacturing
facilities

－

60

－

60

299
［ －］

WacoalBusiness(Domestic)

Manufacturing
facilities

358

52

180
(40,840)

590

136
［ 52］

Other

Manufacturing
facilities

174

7

150
(2,790)

333

20
［ －］

49

Total

Number of
Employee(s)(3)Overseas Subsidiaries
As of March 31, 2022
Book Value (Millions of yen)

Name of Company(Location)

Wacoal America, Inc.
(New Jersey, USA)

OperatingSegment

Type of
Equipment andFacilities

WacoalBusiness(Overseas)

Wacoal Dominicana Corp.
(Santo Domingo, Dominican
Republic)
Wacoal Singapore Private
Ltd.
(Singapore)

WacoalBusiness(Overseas)
WacoalBusiness(Overseas)
Wacoal
Wacoal Hong Kong Co., Ltd.
Business(Hong Kong)(Overseas)

Buildings
andstructures

Machinery,
Vehicle,Equipment,
andFixtures

Land (m2)

Facilities foradministrationaffairs/
merchandise
management

915

345

295
(32,300)

1,556

199
［ －］

Manufacturing
facilities

1,244

313

206
(34,356)

1,764

2,521
［ －］

10

18

224
(235）

252

43
［ 8］

280

－

－

280

133
［ 21］

308

18

－
（－）
［11,871］

265

566
［ －］

Facilities foradministrationaffairs
Facilities foradministrationaffairs
Facilities for administration affairs/manufac
turingFacilities

Total

Number of
Employees

Wacoal China Co., Ltd.
(Beijing, China)

WacoalBusiness(Overseas)

Guandong Wacoal Inc.
(Guandong, China)

WacoalBusiness(Overseas)

Manufacturing
facilities

90

104

－
（－）
［11,224］

195

417
［ －］

Vietnam Wacoal Corp.
(Bien Hoa City, Vietnam)

WacoalBusiness(Overseas)

Facilities for administration affairs/manufac
turingFacilities

51

113

－
（－）
［25,195］

164

1,677
［ 189］

Manufacturing
facilities

173

227

－
（－）
［27,543］

401

543
［ 9］

Manufacturing
facilities

59

175

221
（48,889）

455

232
［ －］

Dalian Wacoal Co., Ltd.
(Dalian, China)
A Tech Textile Co., Ltd.
(Kabin Buri, Thailand）(Note)

WacoalBusiness(Overseas)
WacoalBusiness(Overseas)

1. Area of land under lease by the Company is shown in brackets.
2. None of our major facilities is currently out of service.

50

3.

Buildings and land regarding certain domestic subsidiaries under (2) above are under lease by theCompany. The book value of the buildings and land are as follows:

Name of Business Office(Location)
Wacoal Corp. Head Office(Minami-ku, Kyoto)
Two other business office in Kyoto district
Wacoal Corp. Tokyo Office(Chiyoda-ku, Tokyo)
One other business office in Tokyo
Wacoal Corp. Spiral Business Department(Minato-ku, Tokyo)
Wacoal Distribution Corp.
Moriyama Distribution Center(Moriyama,
Shiga)
Kyushu Wacoal Manufacturing Corp.,
Nagasaki Plant(Unzen, Nagasaki)

Operating Segment

Type of Equipment
and Facilities

Book Value (Millions of yen)
Buildings andstructures

Facilities foradministrationaffairs
Facilities foradministrationaffairs

Wacoal Business(Domestic)
Wacoal Business(Domestic)

Land (m2)

9,985

1,885
(11,208)

1,048

1,945
(1,471)

Wacoal Business(Domestic)

Sales facilities

856

3,972
(1,739)Wacoal Business(Domestic)

Facilities formerchandise
management

5,601

1,419
(38,923)

Wacoal Business(Domestic)

Manufacturing
facilities

224

52(19,369)

4.
5.

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

OperatingSegment

Peach John Co., Ltd. Head Office(Shibuya-ku, Tokyo)

Peach John
Business

Type of
Equipment andFacilities
Facilities foradministrationaffairs

Buildings (m2)Land (m2)－1,554Annual Lease
Amount(Millions of yen)
95(2) Overseas Subsidiaries
Name of Company(Location)
Wacoal America, Inc.
(New York, USA)

OperatingSegment
WacoalBusiness(Overseas)

Type of
Equipment andFacilities
Facilities foradministrationaffairs

Buildings (m2)Land (m2)4,772

3. 【Plans for Capital Investment, Disposals of Property, Plants, and Equipment, etc.】(1) Additions of Important Facilities
Not applicable.
(2) Disposals of Important Facilities
Not applicable.

51－

Annual Lease
Amount(Millions of yen)351

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

Total Number of Shares Authorized to be Issued

Common stock

250,000,000 shares

Total

250,000,000 shares(ii) Number of Shares Issued
Class

Names of Stock Exchanges on
Number of Shares Issued
Number of Shares Issued which the Company is listed
as of the end of Fiscal
as of the Filing Dateor Names of AuthorizedYear (March 31, 2022)(June 29, 2022) (shares) Financial Instruments Firms(shares)
Association

Description

First Section of Tokyo

Common stock

65,589,042

64,500,000

Stock Exchange (as of theend of current fiscal year);

Shareholders haveunlimited standard rights.

Prime Market of Tokyo
Stock Exchange (as of the

The number of sharesconstituting a unit is 100.

filing date)Total

65,589,042－

64,500,000－(Note) Our Board of Directors adopted a resolution at a meeting held on May 13, 2022 regarding cancellation of treasury
stock and 1,089,042 shares of treasury stock have been cancelled as of May 23, 2022. As a result, the number ofshares issued as of the date of this report is 64,500,000 shares.
(2) Status of Stock Acquisition Rights(i) 【Stock Option Plans】（1st Stock Acquisition Rights / 2nd Stock Acquisition Rights）
Date of resolution

July 30, 2008

Category and number of eligible grantees

Director of the Company

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

5

Director of subsidiary

19 (Note 1)

4 (Note 1)

Common stock
9,500 shares (Note 2)

Common stock
2,000 shares (Note 2)

5

One yen per share
From September 2, 2008

Exercise period

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

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

stock: 1,138 yen

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

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

accompanying reorganization acts

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1. The number of shares represented by one (1) stock acquisition right is 500 shares.
52

2.

In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in theevent that the Company conducts a stock split that is conditioned on approval at a general meeting ofshareholders of the Company of an increase in stockholders’ equity or additional paid-in capital bydecreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
3. (1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding thecase where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:

4.

(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2027
From September 2, 2027 until September 1, 2028.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
In the event that the Company conducts Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-typedemerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
53

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined inaccordance with (3) above. The amount paid after restructuring shall be one yen per share of theSurviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 40-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer;(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above:54

（3rd Stock Acquisition Rights / 4th Stock Acquisition Rights）
Date of resolution

July 30, 2009

Category and number of eligible grantees

Director of the Company

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

4

Director of subsidiary

20 (Note 1)

4 (Note 1)

Common stock

Common stock

10,000 shares (Note 2)

2,000 shares (Note 2)

4

One yen per share
From September 2, 2009
until September 1, 2029

Exercise period

Issue price:2,169 yen

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

Amount capitalized as common
stock: 1,085 yen

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

Subject to the approval of the Board of Directors

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

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1. The number of shares represented by one stock acquisition right is 500 shares.
2. In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in theevent that the Company conducts a stock split that is conditioned on approval at a general meeting ofshareholders of the Company of an increase in stockholders’ equity or additional paid-in capital bydecreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
3. (1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the “Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding the55case where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2028
From September 2, 2028 until September 1, 2029.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
4. In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-typedemerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
(2) Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
(3) Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
(4) Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined inaccordance with (3) above. The amount paid after restructuring shall be one yen per share of theSurviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
(5) Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
(6) Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 17-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
(7) Limitation on Acquisition of Stock Acquisition Rights by Transfer.
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
56

(8)

(9)

Provisions for the Acquisition of Stock Acquisition Rights.
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer;(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights.
To be determined pursuant to Note 3 above.

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

July 30, 2010

Category and number of eligible grantees

Director of the Company

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

4

Director of subsidiary

21 (Note 1)

4 (Note 1)

Common stock
10,500 shares (Note 2)

Common stock
2,000 shares (Note 2)

3

One yen per share
From September 2, 2010

Exercise period

until September 1, 2030
Issue price: 2,163 yen
Amount capitalized as common

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

stock: 1,082 yen

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

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

accompanying reorganization acts

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1.
2.

The number of shares represented by one stock acquisition right is 500 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in theevent that the Company conducts a stock split that is conditioned on approval at a general meeting of
57

3.

4.

shareholders of the Company of an increase in stockholders’ equity or additional paid-in capital bydecreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding thecase where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2029
From September 2, 2029 until September 1, 2030.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-typedemerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
(2) Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
(3) Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
(4) Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined in
58

(5)

(6)

(7)

(8)

(9)

accordance with (3) above. The amount paid after restructuring shall be one yen per share of theSurviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 17-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer;(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

59

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

July 29, 2011

Category and number of eligible grantees

Director of the Company

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

5

Director of subsidiary

31 (Note 1)

4 (Note 1)

Common stock

Common stock

15,500 shares (Note 2)

2,000 shares (Note 2)

5

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

Exercise period

Issue price: 1,757 yen

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

Amount capitalized as common
stock: 879 yen

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

Subject to the approval of the Board of Directors

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

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1. The number of shares represented by one stock acquisition right is 500 shares.
2. In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in theevent that the Company conducts a stock split that is conditioned on approval at a general meeting ofshareholders of the Company of an increase in stockholders’ equity or additional paid-in capital bydecreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
3. (1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding the

60

4.

case where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2030
From September 2, 2030 until September 1, 2031.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-typedemerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
(2) Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
(3) Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
(4) Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined inaccordance with (3) above. The amount paid after restructuring shall be one yen per share of theSurviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
(5) Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
(6) Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 17-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
(7) Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
61

(8)

(9)

Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

（9th Stock Acquisition Rights / 10th Stock Acquisition Rights）
Date of resolution

July 31, 2012

Category and number of eligible grantees

Director of the Company

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

5

Director of subsidiary

35 (Note 1)

3 (Note 1)

Common stock
17,500 shares (Note 2)

Common stock
1,500 shares (Note 2)

4

One yen per share
From September 4, 2012

Exercise period

until September 3, 2032
Issue price: 1,599 yen
Amount capitalized as common

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

stock: 800 yen

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

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

accompanying reorganization acts

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1. The number of shares represented by one stock acquisition right is 500 shares.
2. In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in theevent that the Company conducts a stock split that is conditioned on approval at a general meeting ofshareholders of the Company of an increase in stockholders’ equity or additional paid-in capital by
62

3.

4.

decreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding thecase where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2031
From September 2, 2031 until September 3, 2032.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-typedemerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
(2) Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
(3) Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
(4) Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined inaccordance with (3) above. The amount paid after restructuring shall be one yen per share of the
63

(5)

(6)

(7)

(8)

(9)

Surviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 17-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

64

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

July 31, 2013

Category and number of eligible grantees

Director of the Company

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

5

Director of subsidiary

34 (Note 1)

8 (Note 1)

Common stock

Common stock

17,000 shares (Note 2)

4,000 shares (Note 2)

6

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

Exercise period

Issue price: 1,837 yen

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

Amount capitalized as common
stock: 919 yen

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

Subject to the approval of the Board of Directors

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

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1. The number of shares represented by one stock acquisition right is 500 shares.
2. In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in theevent that the Company conducts a stock split that is conditioned on approval at a general meeting ofshareholders of the Company of an increase in stockholders’ equity or additional paid-in capital bydecreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
3. (1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding the

65

4.

case where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2032
From September 2, 2032 until September 2, 2033.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-typedemerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
(2) Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
(3) Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
(4) Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined inaccordance with (3) above. The amount paid after restructuring shall be one yen per share of theSurviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
(5) Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
(6) Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 17-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
(7) Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
66

(8)

(9)

Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

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

July 31, 2014

Category and number of eligible grantees

Director of the Company

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

5

Director of subsidiary

30 (Note 1)

9 (Note 1)

Common stock
15,000 shares (Note 2)

Common stock
4,500 shares (Note 2)

5

One yen per share
From September 2, 2014

Exercise period

until September 1, 2034
Issue price: 1,875 yen
Amount capitalized as common

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

stock: 938 yen

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

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

accompanying reorganization acts

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1. The number of shares represented by one stock acquisition right is 500 shares.
2. In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in theevent that the Company conducts a stock split that is conditioned on approval at a general meeting ofshareholders of the Company of an increase in stockholders’ equity or additional paid-in capital by
67

3.

4.

decreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding thecase where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2033
From September 2, 2033 until September 1, 2034.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-typedemerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
(2) Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
(3) Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
(4) Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined inaccordance with (3) above. The amount paid after restructuring shall be one yen per share of the
68

(5)

(6)

(7)

(8)

(9)

Surviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 17-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

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

July 31, 2015

Category and number of eligible grantees

Director of the Company

5

Director of subsidiary

28 (Note 1)

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

6 (Note 1)

Common stock

Common stock

14,000 shares (Note 2)

3,000 shares (Note 2)

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

Exercise period

Issue price: 2,839 yen
Amount capitalized as common

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

stock: 1,420 yen

Terms and conditions for exercising the stock acquisition rights

69(Note 3)4

Matters related to transfer of the stock acquisition rights

Subject to the approval of the Board of Directors

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

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1. The number of shares represented by one stock acquisition right is 500 shares.
2. In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in theevent that the Company conducts a stock split that is conditioned on approval at a general meeting ofshareholders of the Company of an increase in stockholders’ equity or additional paid-in capital bydecreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
3. (1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding thecase where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2034
From September 2, 2034 until September 1, 2035.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
4. In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-type70

demerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
(2) Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
(3) Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
(4) Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined inaccordance with (3) above. The amount paid after restructuring shall be one yen per share of theSurviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
(5) Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
(6) Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 17-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
(7) Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
(8) Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
(9) Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.
71

72

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

July 29, 2016

Category and number of eligible grantees

Director of the Company

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

4

Director of subsidiary

43 (Note 1)

15 (Note 1)

Common stock

Common stock

21,500 shares (Note 2)

7,500 shares (Note 2)

6

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

Exercise period

Issue price: 2,089 yen

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

Amount capitalized as common
stock: 1,045 yen

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

Subject to the approval of the Board of Directors

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

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1. The number of shares represented by one stock acquisition right is 500 shares.
2. In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in theevent that the Company conducts a stock split that is conditioned on approval at a general meeting ofshareholders of the Company of an increase in stockholders’ equity or additional paid-in capital bydecreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
3. (1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding the

73

4.

case where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2035
From September 2, 2035 until September 1, 2036.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-typedemerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
(2) Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
(3) Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
(4) Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined inaccordance with (3) above. The amount paid after restructuring shall be one yen per share of theSurviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
(5) Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
(6) Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 17-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
(7) Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
74

(8)

(9)

Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

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

July 31, 2017

Category and number of eligible grantees

Director of the Company

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

4

Director of subsidiary

28 (Note 1)

9 (Note 1)

Common stock
14,000 shares (Note 2)

Common stock
4,500 shares (Note 2)

7

One yen per share
From September 2, 2017

Exercise period

until September 1, 2037
Issue price: 2,919 yen
Amount capitalized as common

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

stock: 1,460 yen

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

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

accompanying reorganization acts

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1. The number of shares represented by one stock acquisition right is 500 shares.
2. In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in theevent that the Company conducts a stock split that is conditioned on approval at a general meeting ofshareholders of the Company of an increase in stockholders’ equity or additional paid-in capital by
75

3.

4.

decreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding thecase where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2036
From September 2, 2036 until September 1, 2037.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-typedemerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:
(1)

(2)

(3)

(4)

Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined in
76

(5)

(6)

(7)

(8)

(9)

accordance with (3) above. The amount paid after restructuring shall be one yen per share of theSurviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 17-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

77

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

July 20, 2018

Category and number of eligible grantees

Director of the Company

5

Director of subsidiary

Number of stock acquisition rights

147 (Note 1)

55 (Note 1)

Class, description and number of shares represented by stock

Common stock

Common stock

14,700 shares (Note 2)

5,500 shares (Note 2)

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

One yen per share

Exercise period

From August 18, 2018
until August 17, 2038

5

Issue price: 3,006 yen

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

Amount capitalized as common
stock: 1,503 yen

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

Subject to the approval of the Board of Directors

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

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1. The number of shares represented by one stock acquisition right is 100 shares.
2. In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in theevent that the Company conducts a stock split that is conditioned on approval at a general meeting ofshareholders of the Company of an increase in stockholders’ equity or additional paid-in capital bydecreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
3. (1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding the

78

4.

case where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by August 17, 2037
From August 18, 2037 until August 17, 2038.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-typedemerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:
(1)

(2)

(3)

(4)

(5)

(6)

(7)

Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined inaccordance with (3) above. The amount paid after restructuring shall be one yen per share of theSurviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 17-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
79

(8)

(9)

The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

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

June 27, 2019

Category and number of eligible grantees

Director of the Company

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

4

Director of subsidiary6

172 (Note 1)

113 (Note 1)

Common stock
17,200 shares (Note 2)

Common stock
11,300 shares (Note 2)

One yen per share
From July 23, 2019

Exercise period

until July 22, 2039
Issue price: 2,517 yen
Amount capitalized as common

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

stock: 1,259 yen

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

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

accompanying reorganization acts

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1. The number of shares represented by one stock acquisition right is 100 shares.
2. In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in the
80

3.

4.

event that the Company conducts a stock split that is conditioned on approval at a general meeting ofshareholders of the Company of an increase in stockholders’ equity or additional paid-in capital bydecreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
(1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding thecase where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by July 22, 2038
From July 23, 2038 until July 22, 2039.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-typedemerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:
(1)

(2)

(3)

(4)

Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
81

(5)

(6)

(7)

(8)

(9)

The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined inaccordance with (3) above. The amount paid after restructuring shall be one yen per share of theSurviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 17-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

82

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

June 26, 2020

Category and number of eligible grantees

Director of the Company

5

Director of subsidiary

6

Number of stock acquisition rights

245 (Note 1)

112 (Note 1)

Class, description and number of shares represented by stock

Common stock

Common stock

24,500 shares (Note 2)

11,200 shares (Note 2)

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

One yen per share

Exercise period

From July 18, 2020
until July 17, 2040
Issue price: 1,769 yen

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

Amount capitalized as common
stock: 885 yen

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

Subject to the approval of the Board of Directors

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

(Note 4)

Above is based on information available as of the end of the current fiscal year (March 31, 2022). No change has been
made as of the end of the month preceding the filing date (May 31, 2022).
(Note) 1. The number of shares represented by one stock acquisition right is 100 shares.
2. In the event that the Company conducts a stock split (including the free allocation of shares of common
stock of the Company; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio
will be adjusted in accordance with the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from theday on which the reverse stock split becomes effective in the case of a reverse stock split. However, in theevent that the Company conducts a stock split that is conditioned on approval at a general meeting ofshareholders of the Company of an increase in stockholders’ equity or additional paid-in capital bydecreasing the amount of surplus, and provided that the record date for such stock split is set prior to theconclusion of such general meeting of shareholders, from the day following the conclusion of such general
meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required inunavoidable circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest wholeshare.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary
notification or announcement to Option holders no later than the day immediately preceding the day on
which the adjusted Conversion Ratio becomes effective. However, if the Company is unable to provide
such notification or announcement by such date, the Company shall provide prompt notification or
announcement thereafter.
3. (1) Option holders may exercise their stock acquisition rights on the Date of Loss of Status; provided,
however, that in such case, such Option holder may only exercise his or her stock acquisition rights
until the earlier of (i) the expiration date of the exercise period as stipulated in the table above and (ii)the five-year anniversary of the Exercise Start Date.
(2) Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option
holders may exercise their stock acquisition rights in the following cases (for item (ii), excluding the

83

4.

case where the stock acquisition rights of the Surviving Company are granted to the Option holders
pursuant to Note 4 below) only during the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by July 17, 2039
From July 18, 2039 until July 17, 2040.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant towhich the Company is to be dissolved or a stock swap agreement or share transfer plan thatmakes the Company a wholly owned subsidiary (or, in the event a resolution of the general
meeting of shareholders is not required, if a resolution of the board or determination by the chief
executive officer of the Company is passed):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise thesaid stock acquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of theSurviving Company shall be granted to each holder of the Residual Stock Acquisition Rights in accordancewith the following terms and conditions. In such case, the remaining stock acquisition rights shall becanceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that thisshall be limited to the case where the grant of stock acquisition rights of the Surviving Company pursuant
to the following conditions is stipulated in the absorption-type demerger agreement, incorporation-typedemerger agreement, merger and spin-off agreement, new spin-off plan, stock swap agreement, or sharetransfer plan:
(1)

(2)

(3)

(4)

(5)

(6)

(7)

Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock
Acquisition Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition
Rights:To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of
the Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be theamount paid after restructuring as prescribed below multiplied by the number of shares of theSurviving Company to be issued upon the exercise of the stock acquisition rights as determined inaccordance with (3) above. The amount paid after restructuring shall be one yen per share of theSurviving Company, which may be granted upon exercise of each stock acquisition right to be
granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in
the table above and (ii) the effective date of Organizational Restructuring, and lasting until the
expiration date for the exercise of stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance ofShares due to the Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’equity shall be increased by half the limit for increases in common stock that are calculated inaccordance with Article 17-1 of the Japanese Company Accounting Regulations. Any amountless than one yen shall be rounded up to the nearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paidin capital shall be increased by the amount remaining after deducting the increase in the limit forincrease in common stock stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
84

(8)

(9)

The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of theboard.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or,when shareholder approval is not necessary, in the event that the board or the representative executive
officer approves of any of the following), the Company may acquire stock acquisition rights withoutcompensation on a date separately specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that theCompany, with respect to all of its issued shares, shall be required to obtain the approval of theshareholders of the Company for the acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision thatprescribes that the Company shall be required to obtain the approval of the shareholders of theCompany for the acquisition of the shares to be issued upon the exercise of stock acquisitionrights by transfer or that the Company shall obtain all of the shares of said class by a resolution of
the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

(ⅱ) 【Right Plans】
Not applicable.
(ⅲ) 【Other Stock Acquisition Rights】
Not applicable.
(3)

Status of Exercise of Bonds with Stock Acquisition Rights containing a Clause for Exercise Price Adjustment
Not applicable.

(4)

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

Date

October 1, 2017 (Note 1)
May 25, 2018 (Note 2)
May 24, 2019 (Note 2)
May 25, 2020 (Note 2)(Note)

1.
2.
3.

Changes in the
Total Number of
Shares Issued(Thousands ofshares)Balance of Total
Number of
Shares Issued(Thousands ofshares)Changes in
Common Stock(Millions of yen)

Balance ofCommon Stock(Millions of yen)

Changes in
Additional Paidin Capital(Millions of yen)

Balance of
Additional Paidin
Capital(Millionsof yen)△71,689

71,689－13,260－29,294△1,00070,689－13,260－29,294△2,10068,589－13,260－29,294△3,10065,589－13,260－29,294

Reflect the share consolidation pursuant to which two (2) shares were consolidated into one (1) share.
The decrease was due to the cancellation of treasury stock.
Our Board of Directors adopted a resolution at a meeting held on May 13, 2022 regarding cancellation oftreasury stock and 1,089,042 shares of treasury stock have been cancelled as of May 23, 2022.

85

(5)

Status of Shareholders
As of March 31, 2022
Status of Shares (1 unit = 100 shares)

Category

Nationaland Local Financial Securities
Governme Institutions Compani
esnts

Foreign Shareholders
Other
Individuals
Foreign
Corporatio
and Othershareholders
nsother than Individuals
individuals

Total

SharesLess Than
One Unit(share)Number ofshareholders
Number ofshares held
(units)

－

46

30

188

191

16

16,976

17,447－－302,1848,401

101,294

80,881

58

161,797654,615

127,542

Ratio (%)

－

46.16

1.28

15.47

12.36

0.01

24.72

100

－

(Note)

1.
2.

(6)

Out of the treasury stock of 4,130,773 shares, 41,307 units are included under “Individuals and Other,” and73 shares of less than one unit are included under “Shares less than One Unit.”
Shares under “Other Corporations” and “Shares less than One Unit” include 2 units and 27 shares,
respectively, held under the name of the Japan Securities Depository Center.

Status of Major Shareholders
As of March 31, 2022
Name of Shareholder

The Master Trust Bank of Japan, Ltd.

Address

Number of Shares
held by Shareholder(Thousands of shares)

Shareholding
Ratio (%)

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

8,062

13.12

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

4,943

8.04

The Bank of Mitsubishi UFJ,Ltd.

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

3,095

5.04

Meiji Yasuda Life Insurance Company

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

3,050

4.96

The Bank of Kyoto, Ltd.

700, Yakushimae-cho, Karasuma-dori,

2,352

3.83

(Trust Account)
Custody Bank of Japan, Ltd. (Trust
Account)

Matsubara-agaru, Shimogyo-ku, Kyoto
The Shiga Bank, Ltd.

1-38, Hamamachi, Otsu-shi, Shiga

1,751

2.85

Nippon Life Insurance Company

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

1,569

2.55

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

1,525

2.48

1,241

2.02

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

1,205

1.96

──────

28,79546.85

Mitsubishi UFJ Trust and Banking
Corporation
Asahi Kasei Corporation
Custody Bank of Japan, Ltd. (Re-trust of
Sumitomo Mitsui Trust Bank, Limited;
Trust Account for the retirement
allowance for Toray Industries, Inc.)
Total(Note)

1.
2.

3.

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

The Company is holding 4,130 thousand shares of treasury stock, which are not listed in the above list ofmajor shareholders.
The numbers of shares held by The Master Trust Bank of Japan, Ltd. (Trust Account), Custody Bank ofJapan, Ltd. (Trust Account) and Custody Bank of Japan, Ltd. (Re-trust of Sumitomo Mitsui Trust Bank,
Limited; Trust Account for the retirement allowance for Toray Industries, Inc.) are related to theirrespective trust services.
The substantial shareholding report (the amended report) dated April 13, 2018, filed by Mitsubishi UFJ
Financial Group, Inc., and its joint holders, which is publicly available, indicates that the shareholders in86

the below table are holding the respective number of the Company’s shares as of April 9, 2018. However,as we were unable to confirm the actual status of the shareholdings of these shareholders, except for MUFG
Bank, Ltd., as of the end of fiscal year 2022, those shareholdings have not been reflected in the above list.
In addition, the content of such substantial shareholding report (the amended report) is as follows:

Name of Shareholder

The Bank of Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking
Corporation
Mitsubishi UFJ International AssetManagement Co., Ltd.

Number of Shares
held by Shareholder Shareholding Ratio(Thousands of(%)
shares)Address

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

3,295

4.60

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

3,167

4.42

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

187

0.26

6,649

9.28

Total

4.

The substantial shareholding report dated July 6, 2021, filed by Nomura Securities Co., Ltd. and its joint
holder, which is publicly available, indicates that the shareholders in the below table are holding respective
number of the Company’s shares as of June 30, 2021. However, as we were unable to confirm the actual
status of the shareholdings of these shareholders as of the end of March 31, 2022, those shareholdings havenot been reflected in the above list.In addition, the content of such substantial shareholding report is asfollows:

Name of Shareholder

Number of Shares
held by Shareholder Shareholding Ratio(Thousands of(%)
shares)Address

Nomura International PLC

1 Angel Lane, London EC4R 3AB, United
Kingdom

Nomura asset Management Co.,Ltd.

2-1-1, Toyosu, Kotou-ku, Tokyo
Total

(7)
(i)

110

0.17

3,330

5.08

3,441

5.25

Status of Voting Rights
Shares Issued
As of March 31, 2022
Number of Shares(Shares)Number of Voting Rights(Units)Description

Shares without voting rights

－

－

－

Shares with restricted voting rights –treasury stock, etc.

－

－

－

－

－

－

Category

Shares with restricted voting rights –otherShareholders have
Shares with full voting rights –treasury stock, etc.

Shares with full voting rights – other
Shares less than one unit
Total number of shares issued(Treasury stock)
Common stock

unlimited standard
rights. The number of－

4,130,700

shares constituting a unit
is 100.

Common stock

613,308

61,330,800
Common stock
127,542
65,589,042

87

Same as above.

－

Same as above.

－－

Total voting rights held by all
shareholders(Note)－

613,308－

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

Treasury Stock, etc.
As of March 31, 2022

Name of
Shareholder

Address

Number of
Shares held under
Own Name

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

Shareholding Ratio(%)(Treasury stock)

29 Nakajima-cho,

Wacoal Holdings
Corp.

Kisshoin, Minamiku, Kyoto

4,130,700－

4,130,700

6.30

Total

－

4,130,700－

4,130,700

6.30

88

2. 【Information on Acquisition etc. of Treasury Stock】<Class of shares>
Acquisition of shares of common stock under the condition set forth in Article 155, Item 3 of the Companies Act
and acquisition of shares of common stock under the condition set forth in Article 155, Item 7 of the Companies Act(1) Acquisition of Treasury Stock based on a Resolution of General Meeting of Shareholders
Not applicable.
(2) Acquisition of Treasury Stock based on a Resolution of Board of Directors
Acquisition pursuant to Article 155, Item 3 of the Companies Act
Number of Shares(Shares)Category

Total Amount (Yen)

Status of Resolution of Board of Directors (November 26,
1,000,000

2,500,000,000

Treasury stock acquired prior to the current fiscal year－－

Treasury stock acquired during the current fiscal year

1,000,000

2,088,056,600

Total number of outstanding shares resolved and total amount－

411,943,400

Unexercised percentage as of the end of the current fiscal
year (%)－

16.5

Treasury stock acquired during the current period－－

Unexercised percentage as of the filing date of this report (%)

－

16.5

2021) (Period for acquisition: From December 1, 2021 toMarch 24, 2022)

Number of Shares

Category

Total Amount (Yen)(Shares)

Status of Resolution of Board of Directors (May 13,2022) (Period for acquisition: From June 4, 2022 toMarch 24, 2023)

5,500,000

10,000,000,000

Treasury stock acquired prior to the current fiscal year－－

Treasury stock acquired during the current fiscal year

－

－

－

－

－

－

－

－

Total number of outstanding shares resolved and total
amountUnexercised percentage as of the end of the current
fiscal year (%)
Treasury stock acquired during the current period

Unexercised percentage as of the filing date of this－－report (%)(Note) The number of shares of treasury stock acquired during the period indicated above does not include thenumber of shares of treasury stock acquired during the period from June 1, 2022 until the filing date of thisreport.
(3) Acquisition of Treasury Stock not based on a Resolution of Ordinary General Meeting of Shareholders or
Board of Directors
Acquisition pursuant to Article 155, Item 7 of the Companies Act
Number of Shares(Shares)Category

Total Amount (Yen)Treasury stock acquired during the current fiscal year548

1,214,190

Treasury stock acquired during the current period－－(Note)The number of shares of treasury stock acquired during the current period does not include the number of shares
89

less than one unit purchased during the period from June 1, 2022 until the filing date of this report.

(4)

Status of Disposition and Holding of Acquired Treasury Stock
Current Fiscal Year

Current Period

Category
Number of Total Disposition
Number of Total Disposition
Shares (Shares) Amount (Yen)
Shares (Shares) Amount (Yen)
Acquired treasury stock that was offered to subscribers
for subscription

－

－

－

－

Acquired treasury stock that was canceled－－

1,089,042

2,862,702,160

－

－

－

－

128

259,218－－

Other (exercise of stock acquisition rights)

11,20031,147,200－－

Other ( Restricted Stock)

26,80075,066,800－－

4,130,773－

3,041,731－

Acquired treasury stock that was transferred due tomerger, stock swap, stock delivery, or company split
Other (transfer of shares less than one unit perpurchase request)

Number of shares of treasury stock held

(Note)The number of shares of treasury stock held during the current period does not include shares less than one unit
purchased or sold during the period from June 1, 2022 until the filing date of this report.

90

3. 【Dividend Policy】
Our basic policy on profit distributions to shareholders is to make stable distributions based on consideration of
our consolidated performance, while seeking to increase our enterprise value through active investments aimed at
higher profitability and to increase net income per share.
Our basic policy is to distribute earnings twice a year in the form of interim and year-end dividends subject tothe resolutions of the Board of Directors as prescribed in our Articles of Incorporation pursuant to the provisions ofParagraph 1, Article 459 of the Companies Act.
Based on such policy, we plan to distribute a year-end dividend of 30.00 yen per share as a distribution of
earnings for the current fiscal year. As a result, the annual cash dividend per share, including an interim dividend of
20.00 yen per share, is 50.00 yen for the current fiscal year.
As for retained earnings, with the aim of improving our corporate value, we have actively invested in expanding
new points of contact with consumers for our domestic business and our overseas businesses. We also plan to use
our retained earnings in our strategic investments for maintaining competitiveness and reinforcing growth. With
these efforts, we seek to benefit our shareholders by improving future profitability.
(Note) The distribution of earnings for which record date belongs to the current fiscal year is as follows:
Total Dividend Amount(Millions of yen)

Date of Resolution

Dividend Amount per Share(Yen)

October 29, 2021
Resolution of Board of Directors’ meeting

1,249

20.00

May 13, 2022
Resolution of Board of Directors’ meeting

1,843

30.00

91

4【Corporate Governance, etc.】(1) 【Status of Corporate Governance】(ⅰ)

Fundamental Policies for Corporate Governance:
The purpose and basic policy of our group’s corporate governance is to continuously enhance ourcorporate value by increasing transparency and securing the fairness and independence of our corporate
management to establish mutual confidence relationship with all stakeholders, including our shareholders,customers, employee, client and community.
(ⅱ) Outline of System of Corporate Governance and Reason for Adoption of such Systema. Outline of System of Corporate Governance
We, as a holding company, have adopted the company with Audit & Supervisory Board system inaccordance with the Companies Act for the purpose of ensuring the corporate governance of group companies,
and have both the Board of Directors and the Audit & Supervisory Board monitor and supervise themanagement and operation of the Company.
Our Board of Directors is composed of seven Directors (including three Outside Directors) and one ofthem is female. Their roles are to supervise and make business judgments from an objective perspective. We
have been working to enhance the supervisory function and to improve the decision-making process. Further,
the term of office of each Director is one year for the purpose of clarifying the responsibilities of ourmanagement, and establishing a management system that may respond promptly to changes in the businessenvironment.
In addition to the supervisory function of the Board of Directors, the Audit & Supervisory Board iscomposed of five Audit & Supervisory Board Members (including three Outside Audit & Supervisory Board
Members). Their function is to monitor and supervise our management.
We have designated the above-stated three Outside Directors and three Outside Audit & Supervisory
Board Members (i.e., six persons in total) as our independent officers.
We, as a holding company, seek to govern our group companies with the management, audit, andsupervisory systems as set out below:
The Board of Directors shall hold a regular Board of Directors’ meeting every month and also hold aspecial Board of Directors’ meeting from time to time, as necessary, in accordance with the rules of theBoard of Directors, to make decisions on matters concerning important business, such as management
policy and management strategy and matters stipulated by laws or ordinances or our Articles ofIncorporation. Further, we have established the “Group Management Meeting” comprising our Directors
and major management members, which considers matters concerning the management strategy of ourgroup and other important management issues and conducts preliminary reviews of matters for review by
our Board of Directors.
The Audit & Supervisory Board shall hold regular monthly meetings, in principle, prior to the Board of
Directors’ meetings and also hold special meetings from time to time, as necessary, in accordance withthe rules of the Audit & Supervisory Board, to make decisions on matters concerning the preparation ofaudit reports and audit policies, method of asset status investigation and execution of duties by the Audit& Supervisory Board Members.
We have established the “Executive Nomination Advisory Committee” and “Executive Compensation
Advisory Committee”, which are each chaired by an Independent Outside Director. These Committees
discuss and provide recommendations on evaluation, election, dismissal, and promotion of Directors, aswell as performance evaluation and matters related to compensation. In principle, the Executive
Nomination Advisory Committee shall hold meetings in July, November and January when the Board of
Directors’ meetings are held, and the Executive Compensation Advisory Committee shall hold meetingsin April, July and February when the Board of Directors’ meetings are held. A majority of the membersof both Committees consists of Outside Directors to enhance their independence and objectivity. In
addition, both Committees resolve matters with the unanimous approval of all members to ensure a highdegree of transparency and fairness.
The Independent Outside Officers Meeting, which is joined mainly by the Independent Officers,
performs an evaluation on the Board of Directors after exchange of views among the members of such
Meeting. The details of discussions are reported to the Board of Directors, which are also disclosed in
92

-

-

our Corporate Governance Report.
In order to improve our system of compliance, we have established a Corporate Ethics and Risk
Management Committee, for which our Representative Director, President and Corporate Officer acts ashead in charge of the committee and the Director of Supervisor of Group Business Management acts aschairman, which will consider any compliance issues which may have a material impact on the Wacoal
Group, enhance awareness and enlightenment on corporate ethics and effectively promote control of any
management risks on the Wacoal Group.
In April 2022, we have established the “Sustainability Committee”, for which our Representative
Director, President and Corporate Officer acts as head in charge of the committee and our Representative
Director, Vice President and Corporate Officer acts as chairman, to promote sustainable management, amanagement approach that balances “solving social issues” on one hand and “corporate growth” on theother hand through our business activities. The Sustainability Committee formulates an overall plan
regarding sustainability activities, monitors progress, evaluates achievements, and periodically reports
and makes recommendations to the Board of Directors.

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

Name

Board ofAudit &

Directors’

Supervisory

Meeting

Board Meeting

Executive

Executive

Independent

Nomination

Compensation

OutsideAdvisory

Advisory

Officers

Committee

Committee

Meeting

Group
Management
Meeting

Representative
Director, President
and Corporate
Officer of theCompany

Hironobu
Yasuhara●

Director and Vice
President Corporate
Officer

Tomoyasu
Ito○

Director and Vice
President Corporate
Officer

Akira
Miyagi○

Director
Managing
Corporate Officer

MasaakiYajima○Outside Director

MadokaMayuzumi

○

○

○

○

Outside Director

Shigeru
Saito

○

○

○

○

Outside Director

Tsunehiko
Iwai

○

●

●

○

Standing Audit &Supervisory Board
MemberShinichi
Kitagawa

○

●

○

○

Standing Audit &Supervisory Board
MemberKatsuhiro
Okamoto

○

○

○

○

Audit &
Supervisory Board
MemberHiroshiShirai○○○

Audit &
Supervisory Board
MemberMitsuhiro
Hamamoto○○○

Audit &
Supervisory Board
MemberMinoruShimada

○

○

○

○

○

○

○

Other

93

●

○

Corporate Ethics
and Risk

Sustainability

Management

Committee

Committee

○

*

*

○

○

●

●

●

○

○

○

○

○

○

○

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

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

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

Audit

Submitrecommendation
Requestrecommendation

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

Appointment and removal of Audit &Supervisory Member

Appointment and removal of Director

Requestrecommendation

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

Submitrecommendation

Appointment
and removal

Cooperate

Secretarial Office for Audit & Supervisory Board

Evaluate/
examineIndependent Outside Officers Meeting

Audit

Selection and dismissal

Executive Structure

Representative Director, President and Corporate Officer

Accounting
audit

ReportSubcommittee
for Human Rights,
D&I

Subcommittee
for CSR
Procurement

Give instructions

ReportSubcommittee
for Resource
Circulation

Subcommittee
for Carbon Neutral

Subcommittee
for Information
Security

Subcommittee
for BCP and Disaster
Control Measures

Quality Assurance
Council

Subcommittee
for Compliance

Quarterly Business Results
Review Committee

Give instructions

Sustainability Committee

Corporate Ethics Hotline

Group Management Meeting

Management Issues
Review Committee

Audit Office

Accounting Auditor

Cooperate

Corporate Ethics and Risk
Management Committee

Key Management Committees

Internal audit

Business Execution Divisions/Group Companiesb.

Reason for Adoption of Corporate Governance System
The Company has adopted a governance system by a “Board of Directors” composed of Directors who areexperts in each business area and Outside Directors with diverse careers, and an “Audit & Supervisory Board”
including Outside Audit & Supervisory Board Members. We, as a holding company, believe that thisgovernance system is effective in supervising and auditing the execution of duties at our group companies andto realize and maintain high-quality management. For the foregoing reason, we have adopted our current
governance system.

(ⅲ) Other Matters regarding Corporate Governance System
a. Status of Improvement of Internal Control System
Our fundamental philosophy toward the internal control system and the status of improvement thereof,
details of which have been determined at the Board of Directors’ meetings, are as follows:＜System to Ensure Appropriate Business Conduct＞(System to ensure that execution of duties by Directors and/or employees is in compliance with laws andregulations and the Articles of Incorporation)- To ensure that all Directors and employees of the business group comprised of the Company and its
subsidiaries (“the Wacoal Group”) comply with laws and regulations and the Articles of Incorporationand conduct business based on sound social norms, we have enacted the “Wacoal Code of Ethics” andthe “Corporate Ethics: Wacoal Standards of Conduct”.
- In order to improve our system of compliance, we have established a Corporate Ethics and Risk
Management Committee, for which our Representative Director and President acts as administrative
manager and the Director of Supervisor of Group Business Management acts as chairman, which willconsider any compliance issues which may have a material impact on the Wacoal Group, enhanceawareness and enlightenment on corporate ethics and effectively promote control of any management
risks on the Wacoal Group. The Management Planning Department shall act as organizer, and shall be
responsible for the corporate ethics and risk management related to the Wacoal Group.
- We have established a system under which our legal/compliance department could be promptly notified
if the fact that a Director and/or employee of the Wacoal Group may have violated the “Wacoal Code of
Ethics” or the “Corporate Ethics: Wacoal’s Code of Conduct”, or any other compliance issues is found.
We have also established an internal alerting system (corporate ethics hotline to the legal/compliance94

department and a law firm). After being notified and/or alerted, the legal/compliance department
conducts an investigation and formulates preventive measures after discussions with the related
department. If the issue is critical, the legal/compliance department will refer the matter to the Corporate
Ethics and Risk Management Committee and will report the results of its deliberation to the Board of
Directors and/or Audit & Supervisory Board.
- “The Corporate Ethics: Wacoal Standards of Conduct” prescribes that Directors, and employees shall
firmly refuse to comply with demands of antisocial forces. In order to handle unjust demands ofantisocial forces, we cooperate with outside specialized institutions, collect and/or control information
related to antisocial forces and are building an internal system.
(System concerning the Storage and Management of Information related to Execution of Duties by Directors)- With the approval of the Board of Directors, we have enacted the “Document Management Rules”
pursuant to which we store the following documents (including electromagnetic records; hereafter thesame) along with any related materials:
Minutes of the General Meeting of Shareholders, minutes of the Board of Directors’ meetings,
minutes of the Group Management meetings, documents for which a Director is the final decision
maker, and any other documents prescribed in the “Document Management Rules”.
- The retention period and the place for storage of the documents prescribed in the preceding paragraphshall be subject to the “Document Management Rules”, but such retention period shall be at least ten
years. The Directors and Audit & Supervisory Board Members shall have access to these documents at
all times.
(Rules and Other Systems Concerning Risk Management of Losses)- In order to understand the management risk within the Wacoal Group in general and to improve and/or
strengthen our risk management system, we have established the Corporate Ethics and Risk Management
Committee, for which our Representative Director and President acts as administrative manager and the
Director of Supervisor of Group Business Management as Chairman. The Management Planning
Department shall act as the organizer.
- The Corporate Ethics and Risk Management Committee prescribes “the Risk management basic rules”,
subject to the approval of the Board of Directors, which form the basis for our risk management system.
The Corporate Ethics and Risk Management Committee clarifies the responsibilities by risk category
pursuant to these rules, and formulates a risk management system that thoroughly and/or
comprehensively controls potential risk within the Wacoal Group.
- The Corporate Ethics and Risk Management Committee regularly reports on the operations of the
Wacoal Group’s risk management system to the Board of Directors.
(System to Ensure Effective Execution of Duties by Directors)- In order to enhance appropriate decision-making by our Directors, we will at least one-third of all
Directors will be independent Outside Directors.
- We will formulate a medium-term management plan to be shared by the Directors and/or employees
within the Wacoal Group and will direct and confirm courses of action and business targets in the mid toshort term that are consistent with such plan.
- We will follow the business results of each Wacoal Group company on a monthly basis and report backto the Board of Directors. In addition, by holding “Quarterly Business Results Review Committee”, wewill confirm the business results and the implementation of measures and policies, consider measures inthe event targets are not achieved, and review such targets, as may be necessary.
- We adopt a corporate officer system, under which we seek to build an appropriate and efficientmanagement system which clearly defines the delegation of authority and responsibilities with respect tomajor Group companies(System to Ensure Appropriate Business Conduct within Group Companies)- We have enacted “the Group Management Rules”, which prescribe basic policies regarding themanagement of Group companies and matters to be decided by our Board of Directors, as well as mattersto be reported to the Company and manage our Group companies in accordance with the rules.
- We conduct any intercompany transaction fairly in compliance with laws and regulations, accounting
principles and the tax system.
- Our audit office will conduct internal audits, including an audit of the establishment and/or operation of95

our compliance system and risk management system, within the group companies and will report theresults of its audits to the Board of Directors and appropriate departments and give guidance and/or
advice related to the above group companies to ensure the appropriate conduct of business.
- Our foreign subsidiaries will comply with the laws and regulations of their respective home countries andwill adopt a system that is in line with our policies to the extent reasonable.
(Matters Concerning Assistants to Audit & Supervisory Board Members)- Audit & Supervisory Board Members may appoint employees of the Company as their assistants who areto assist the duties of the Audit & Supervisory Board Members.
- Such assistants shall be full-time employees. In order to ensure the effectiveness and independence ofsuch assistants, decisions on personal affairs, including appointment, evaluation, relocation and disciplineof such assistants will be subject to the consent of the Audit & Supervisory Board Members.
(Reporting System of Directors and Employees to the Audit & Supervisory Board Members and Other
Reporting System to Audit & Supervisory Board Members)- Directors of the Wacoal Group will promptly report to the Audit & Supervisory Board Members if they
become aware of a material fact that violates the applicable laws and regulations and/or our Articles ofIncorporation, misconduct or a fact that may cause significant damage to any company of the Wacoal
Group.
- Employees of the Wacoal Group may directly report to the Audit & Supervisory Board Members if they
become aware of a material fact that violates the applicable laws and regulations and/or our Articles ofIncorporation, misconduct or a fact that may cause significant damage to any company of the Wacoal
Group. Any employee who makes such report will not be at a disadvantage for the reason of making
such report.
- Through the reporting of the following matters in addition to statutory matters to the Audit &Supervisory Board Members by Directors and employees of the Wacoal Group, we strive to have the
Audit & Supervisory Board Members audit conducted effectively.
Matters referred to the Group Management Meeting
Monthly and quarterly group management conditions
Results of audits of operations
The condition of our internal reporting to our internal alert system
Other significant matters(Other Systems to Ensure Effective Audit by the Audit & Supervisory Board Members)- The majority of the Audit & Supervisory Board Members will be independent Outside Audit &Supervisory Board Members to enhance the transparency and neutrality of audit.
- The Audit & Supervisory Board Members may order employees who belong to the audit office toperform any tasks that are required to provide audit services. In addition, the Audit & Supervisory Board
Members may request the Company for reimbursement of expenses incurred for performing their duties.
- Audit & Supervisory Board Members will attend meetings of the Board of Directors and may also attend
other primary meetings of the Wacoal Group.
- The Audit & Supervisory Board Members will regularly meet with the audit office and the Accounting
Auditor to receive reports and to exchange opinions.
- The Audit & Supervisory Board may consult legal counsel, certified public accountants, consultants, orother outside advisers as it deems necessary.
< Outline of Operation of our “System to Ensure Appropriate Business Conduct>(System to ensure that execution of duties by Directors and/or employees is in compliance with laws andregulations and the Articles of Incorporation)- We have a Compliance Committee which specifically establishes and operates our compliance system.
The Compliance Committee held a meeting each quarter and discussed and reviewed awareness ofcompliance and matters reported to us through the internal alert system.
- Our legal/compliance department continued to provide level-specific group education and e-learning
programs as part of our educational activities for our employees. We are also making step-by-step efforts
to strengthen the internal alert system for our overseas Group companies by providing complianceawareness training and carrying out compliance review by a third-party as well as by expanding our
external corporate ethics hotline.
96

(System concerning the Storage and Management of Information related to Execution of Duties by Directors)- Documents prescribed in the “Document Management Rules” have been properly stored in accordancewith the “Document Management Rules” and the Directors and Audit & Supervisory Board Members
have access to these documents on a timely basis.
(Rules and Other Systems Concerning Risk Management of Losses)- The Corporate Ethics and Risk Management Committee assessed risks, monitored the implementation of
measures taken, and reported to the Board of Directors on a quarterly basis.
- In April 2018, we established the CSR Procurement Committee as a subcommittee of the Corporate
Ethics and Risk Management Committee. As part of our group purchase policy, we worked on an
initiative that links the following functions, which we continue to expand, in order to check theoutsources’ compliance with the “Wacoal Group CSR-based Procurement Guidelines”, which includes
promotion of business transactions with business enterprises that emphasize attention to social needs withrespect to human rights, labor practices, environment and ethics; monitoring of self-evaluation by
outsources; analysis/assessment feedback; correction/improvement plans; and follow-up.
- We have established the Coronavirus Pandemic Countermeasure Team, as a subcommittee of the
Corporate Ethics and Risk Management Committee. The Coronavirus Pandemic Countermeasure Teamgathered and delivered pandemic-related information within our group, formulated guidelines andpolicies based on the guidance issued by the government and local authorities, and made efforts to spreadawareness of such policies and guidance within our group companies.
(System to Ensure Effective Execution of Duties by Directors)- We engage in highly transparent decision-making by appointing three independent Outside Directors
among our seven Directors.
- We discussed and drafted the new medium and long-term management plan of our group which starts
from the fiscal year ending March 2023.
- We held meetings of the “Quarterly Business Results Review Committee” on a quarterly basis andconfirmed and reviewed the business results and implementation of measures.
(System to Ensure Appropriate Business Conduct within Group Companies)- Matters to be decided and reported by our subsidiaries are appropriately managed in accordance with the“Group Management Rules”.
- Our audit office develops an audit plan for each fiscal year and conducts audits on the operation andinternal controls of the Company and our domestic and overseas subsidiaries.
(Matters Concerning Assistants to Audit & Supervisory Board Members)- Our audit office is currently assisting the duties of the Audit & Supervisory Board Members upon theirrequest from time to time. Audit & Supervisory Board Members have not requested or appointed any
assistant for their duties.
(Reporting System of Directors and Employees to the Audit & Supervisory Board Members and Other
Reporting System to Audit & Supervisory Board Members)- The Audit & Supervisory Board Members attended primary meetings and received reports on mattersthat were discussed and on the management condition, and also received reports, from time to time, on
the results of internal audits and matters reported through the internal alert system.
(Other Systems to Ensure Effective Audits by Audit & Supervisory Board Members)- We enhance the effectiveness of audit by appointing three independent Outside Audit & Supervisory
Board Members among the five Audit & Supervisory Board Members.
- The Company reimburses any and all expenses incurred by the Audit & Supervisory Board Members for
performing their duties.
- The Audit & Supervisory Board Members attend meetings of the Board of Directors and other important
meetings, conduct hearings with the Directors and also visit our subsidiaries to conduct audits. In
addition, the Audit & Supervisory Board Members presided at “Audit & Supervisory Board Group
Meetings” and received periodic reports from the audit & supervisory board members of the domestic
subsidiaries.
- The Audit & Supervisory Board Members have, regularly and whenever necessary, exchanged
information and opinions with the Accounting Auditor and the audit office.
b.

Matters Concerning Limitation of Liability Agreements with Outside Directors and Outside Audit &Supervisory Board Members
97Pursuant to the provisions of Paragraph 1, Article 427 of the Companies Act and our Articles ofIncorporation, the Company has executed an agreement with its Directors (excluding executive directors, etc.)
and Audit & Supervisory Board Members to limit their liability for damages as stipulated in Paragraph 1,
Article 423 of the Companies Act.
The maximum amount of liability under such agreement is the minimum amount as provided by laws andregulations.
Outline of Directors’ and Officers’ Liabilities Insurance
The Company maintains directors’ and officers’ liabilities insurance as stipulated in the provisions ofParagraph 1, Article 430-3 of the Companies Act with an insurance company. The scope of the insured under
this insurance policy is all of the officers (i.e., Directors and Audit & Supervisory Board Members) of theCompany, all of the officers of our domestic consolidated subsidiaries, including Wacoal Corp., as well as theofficers who are Japanese nationals and on secondment to our overseas subsidiaries and affiliated companies.
The insured does not bear the premiums. This insurance policy will cover the insured’s losses incurred from
corporate lawsuits, shareholder derivative actions, and proceedings brought by third parties. Provided, however,that in order to ensure that the appropriate conduct of the insured when performing their duties is maintained,
this insurance policy will not cover the insured’s losses related to the following:- Illegal personal gain of officers;- Criminal activities;- Deliberately illegal activities;- Claim for damages for bodily injury, property damage and invasion of personal rights;- Claim for damages attributable to act of God (earthquake, eruption, flooding, tsunami, etc.), war or
insurrection;- Claim for damages attributable to environmental contamination or harmful attribute of asbestos; and- Claims for damages based on allegations that the Company or the insured has violated any of thefollowing U.S. laws ((i) the Employee Retirement Income Security Act, (ii) the Racketeer Influenced andCorrupt Organizations Act and (iii) the Securities Exchange Act of 1934).
c.

d.

Number of Directors
Our Articles of Incorporation prescribe that the number of Directors of the Company shall be not morethan eight.
e. Requirement for Appointment of Directors
Our Articles of Incorporation prescribe that resolutions to appoint Directors shall be made by a majority
vote of the voting rights of shareholders present at a General Meeting of Shareholders, where such shareholders
present shall hold shares representing one-third or more of the voting rights of all shareholders who are entitled
to exercise such voting rights and that resolutions to appoint Directors shall not be adopted by cumulative
voting.
f. Requirement for Special Resolutions at General Meeting of Shareholders
Our Articles of Incorporation prescribe that a resolution as stipulated in Paragraph 2, Article 309 of theCompanies Act shall be adopted by a two-thirds majority of the voting rights held by the shareholders present at
the General Meeting of Shareholders, who shall represent one-third or more of the total number of voting rightsof the shareholders who are entitled to exercise such voting rights. The purpose of this provision is to more
surely secure the quorum for a special resolution at any General Meeting of Shareholders.
g. Decision-Making Body for Distribution of Earnings, etc.
Our Articles of Incorporation prescribe that matters set out in each Item of Paragraph 1, Article 459 of theCompanies Act (including the matters concerning distribution of earnings) shall be determined by a resolutionof the Board of Directors, unless otherwise provided for in any laws or regulations, for the purpose of
performing an expeditious profit return to our shareholders.

98

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

Name

Date of BirthBusiness Experience and Position(s) and Office(s)Mar. 1975

Joined the Company

Apr. 1997

President of Wacoal China Co., Ltd.

Apr. 2005

Jun. 2011

Corporate Officer/General Manager of Wing Brand Business
Department of the Company
Director and Managing Corporate Officer, General Manager
of Wing Brand Business Department, of Wacoal Corp.
Director and Senior Managing Corporate Officer, and General
Manager of Wacoal Brand Business Department, of Wacoal
Corp.
Representative Director, President and Corporate Officer of
Wacoal Corp.
Director of the Company

Jun. 2013

Senior Managing Director of the Company

Jun. 2016

Vice President and Director of the Company

Apr. 2018

Representative Director and Chairman of Wacoal Corp.

Jun. 2018

Representative Director of the Company and President

Apr. 2020

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

Joined the Company

Apr. 2006

General Manager of Sales Planning Division, Wacoal-Brand
Operations of Wacoal Corp.
Representative Director and President of Studio Five Corp.

Jun. 2006
Apr. 2010
Representative
Director,
President andCorporate
Officer of theCompany

Hironobu
Yasuhara

Dec. 28, 1951

Apr. 2011

Apr. 2007
Apr. 2011
Director andVice President
Corporate
Officer

Apr. 2020

General Manager of Innerwear Merchandising Division,Wacoal-Brand Operations of Wacoal Corp.
Director, Corporate Officer, Head of Wacoal-Brand
Operations of Wacoal Corp.
Director, Managing Corporate Officer, Head of Wacoal-Brand
Operations of Wacoal Corp.
Director, Senior Managing Corporate Officer, Head of
Wacoal-Brand Operations of Wacoal Corp
Appointed Representative Director, President and Corporate
Officer of Wacoal Corp (acting).
Vice President Corporate Officer

Jun.2020

Director and Vice President Corporate Office (acting)Apr. 2014
Tomoyasu

ItoJan. 18,1960

Apr. 2015
Apr. 2016
Apr. 201899

OfficeTerm

Number of
Shares Owned(Hundreds ofshares)

Note 1180Note 179

TitleName

Date of BirthBusiness Experience and Position(s) and Office(s)Mar. 1984

Joined the Company

Oct. 2007

Apr. 2014

General Manager of Business Management andAdministration of Wacoal Brand Operation Division of
Wacoal Corp.
Director and Deputy General Manager of Wacoal China Co.,
Ltd.
General Manager of Corporate Planning of the Company

Apr. 2017

Corporate Officer of Wacoal Corp.

Jun. 2018

Director and General Manager of Corporate Planning of theCompany
Managing director and General Manager of Corporate
Planning of the Company
Director and Managing Corporate Officer in charge of Group
Finance of the Company
Director and Managing Corporate Officer in charge of Group
Business Management
Director and Vice President Corporate Officer in charge ofGroup Business Management (acting)Apr. 2011

Director andVice President
Corporate
Officer

Akira
MiyagiOct. 18,1960

Jun.2019
Apr. 2020
Jun. 2021
Jun. 2022
Mar. 1984

Joined the Company

Jun. 2004

Apr. 2009

Director and President, Wacoal International Hong Kong Co.,Ltd.
Leader of Sales Group, International Headquarters, Wacoal
Corp.
Director and Deputy General Manager, Wacoal China Co.,Ltd.
Director and General Manager, Wacoal China Co., Ltd.

Apr. 2011

Corporate Officer, Wacoal Corp.

Apr. 2015

Apr. 2022

Corporate Officer and General Manager of Technology &Production Division, Wacoal Corp.
Director, Corporate Officer and General Manager ofTechnology & Production Division, Wacoal Corp.
Director, Managing Corporate Officer and General Manager ofWholesale Division, Wacoal Corp.
Director, Managing Corporate Officer and General Manager of
Global Division, Wacoal Corp.
Director and Managing Corporate Officer, Wacoal Corp.

Apr. 2022

General Manager of Global Division of the Company

Jun. 2022

Director and Managing Corporate Officer, and General
Manager of Global Division of the Company (acting)Apr. 2007
Sep. 2008

Director

YajimaMasaakiSep. 30,1960
Apr. 2016
Apr. 2018
Apr. 2021

100

Number of
Office Shares Owned
Term (Hundreds ofshares)

Note 160Note 148

TitleName

Date of BirthBusiness Experience and Position(s) and Office(s)Aug. 1996

Apr. 2014

Launched and organized monthly haiku magazine Gekkan
Hepburn
Member of “National Language Subdivision” of Council for
Cultural Affairs, Ministry of Education, Culture, Sports,
Science and Technology
Member of “Council for the Promotion of Cultural
Diplomacy”, Cabinet Secretariat“Japan Cultural Envoy” appointed by the Agency for
Cultural Affairs
Member of “Forum to Realize Culture and Arts-Oriented
Nation” held by Minister of Education, Culture, Sports,
Science and Technology
Member of “Cultural Policy Subdivision” of Council for
Cultural Affairs, Ministry of Education, Culture, Sports,
Science and Technology
Advisor of the Company

Jun. 2015

Director of the Company (acting)Nov. 1979
Oct. 1985

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

Feb. 1987

Representative Director and President of TOSE CO., LTD.

Sep. 2004

Jun. 2017

Representative Director and President, and CEO of TOSE
CO., LTD.
Representative Director and Chairman, and CEO of TOSE
CO., LTD. (acting)Director of the Company (acting)Apr. 1979

Joined Shiseido Co., Ltd.

Apr. 2002

Mar. 2018

General Manager of Product Commercialization, Planning
Department, Shiseido Co., Ltd.
Corporate Officer, General Manager of Technical Department,
Shiseido Co., Ltd.
Director, Corporate Executive Officer in charge of Research &Development, Production and Technical Affairs, Shiseido Co.,
Ltd.
Representative Director, Executive Vice President Chief
Technology & Innovation Officer, Shiseido Co., Ltd.
Senior Advisor, Shiseido Co., Ltd.

Jun. 2018

Director of the Company (acting)Mar. 1985

Joined the Company

Apr. 2008

Apr. 2013

Director and General Manager of Accounting and
Administration Division of Studio Five Corp.
Director and General Manager of Business Control Division ofStudio Five Corp.
IR/Public Relations Officer of the Company.

Apr. 2018

General Manager of Accounting Department of the Company

Jun. 2020

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

Audit & Supervisory Board Member of Wacoal Corp. (acting)Jan. 2001

Dec. 2004
Apr. 2010
Director

MadokaMayuzumi

Jul. 31, 1962

May. 2013

Apr. 2014

Director

Shigeru
Saito

Jan 26, 1957

Dec. 2015

Apr. 2008

Director

Tsunehiko
IwaiJun. 2014
May 28, 1953
Jan. 2016

Apr. 2009
Standing Audit& Supervisory
Board Member

Shinichi
Kitagawa

Dec. 29, 1962

101

Number of
Office Shares Owned
Term (Hundreds ofshares)

Note 1－

Note 1

17Note 1－

Note 413

TitleNameBusiness Experience and Position(s) and Office(s)Date of BirthMar. 1986

Joined the Company

Apr. 2010Materials Control Manager of Technology/Production
Division of Wacoal Corp.
Representative Director and President of Hokuriku Wacoal
Sewing Corp.
Representative Director and President of Kyushu Wacoal
Manufacturing Corp.
Note 5General Manager of Innerwear Merchandising Supervisory
Division, Wacoal-Brand Operations of Wacoal Corp.
Corporate Officer, General Manager of Wacoal-Brand
Innerwear Products Supervisory Division, Wholesale Divisionof Wacoal Corp.
Audit & Supervisory Board Member of Wacoal Corp. (acting)May. 2012
Apr. 2014
Standing Audit& Supervisory
Board Member

Katsuhiro
OkamotoOct. 20, 1963

Number of
Office Shares Owned
Term (Hundreds ofshares)Apr. 2016
Apr. 2018

Jun. 2021

2

Audit & Supervisory Board Member of the Company (acting)

Audit &
Supervisory Board
MemberAudit &
Supervisory
Board Member

HiroshiShirai

Mitsuhiro
Hamamoto

Oct. 21, 1953

Apr. 18, 1970

Nov. 1977

Joined Pricewaterhouse

Aug. 1982

Registered as Certified Public Accountant

Jul. 1992

Joined Aoyama Audit Corporation

Aug. 2007

Joined Deloitte Touche Tohmatsu

Jun. 2010

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

Sep. 2011

Left Deloitte Touche Tohmatsu

Oct. 2011

Established Shirai public accounting firm, Managing Partner(acting)

Jun. 2015

Audit & Supervisory Board Member (acting)Oct. 2000

Admitted to the Bar

Oct. 2000

Joined the Law Office of Tadashi Yamada

Oct. 2004

Joined the Kikkawa Law Office

Apr. 2008

Partner at the Kikkawa Law OfficeJun. 2017

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

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

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

Jun. 2004

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

May. 2005
Apr. 2008

Audit &
Supervisory
Board Member

MinoruShimadaFeb. 22,1955

Jun. 2010
Jun. 2011
Jun. 2012

Jun. 2018

Managing Corporate Officer, General Manager of Corporate
Banking Group, Nagoya Branch, The Bank of TokyoMitsubishi UFJ, Ltd. (current “MUFG Bank, Ltd.”)
Representative Director and Vice President, SOTSU
CORPORATION
Representative Director and President, NAIGAICONSTRUCTION CO., LTD.
Representative Director and President, SOTSU
CORPORATION
Representative Director and President, SOTSU AMENITYSERVICE CORPORATION
Director and Chairman, SOTSU CORPORATION

Note 349

Note 534

Note 6

21

Audit & Supervisory Board Member of the Company (acting)
Total

503

102

(Note)

1.
2.
3.
4.
5.
6.
7.
8.

The term of office of a Director is one year from the conclusion of the Ordinary General Meeting of
Shareholders held on June 29, 2022.
Directors Ms. Madoka Mayuzumi, Mr. Shigeru Saito and Mr. Tsunehiko Iwai are Outside Directors.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of theOrdinary General Meeting of Shareholders to be held on June 27, 2019.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of theOrdinary General Meeting of Shareholders to be held on June 26, 2020.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of theOrdinary General Meeting of Shareholders to be held on June 29, 2021.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of theOrdinary General Meeting of Shareholders to be held on June 29, 2022.
Audit & Supervisory Board Members Mr. Hiroshi Shirai, Mr. Mitsuhiro Hamamoto and Mr. Minoru
Shimada are Outside Audit & Supervisory Board Members.
We have adopted the corporate officer system in order to clarify executive responsibility andaccelerate the speed of execution of duties.

The Corporate Officers who do not concurrently serve as Directors are as follows:
Title

Name

Corporate
Officer

Katsuya
General Manager of Corporate Planning

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

Takahiko

Officer

Administration Division of Wacoal Corp.

Hasegawa

Corporatein charge of Group Quality Assurance and Sustainability Promotion, Director and Managing

Officer

Corporate Officer and Supervisor of Group Management of Wacoal Corp.

Kamoshita

Corporatein charge of Group Technology and Production and Intellectual Property, Director and Corporate

Kazuhiro

Yasuo

Officer

Officer, General Manager of Technology/Production Division of Wacoal Corp.

Shibahara

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

Hiroshi

Officer

Research and Development Center of Wacoal Corp.

Imai

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

Shuji

Officer

Wacoal Corp.

Morimoto

Corporatein charge of Group Digital Transformation (DX) Marketing, Corporate Officer and Innovation

AtsukoOfficer

Strategy Officer of Wacoal Corp.

Shinozuka(ii) Status of Outside Officers
We have three Outside Directors and three Outside Audit & Supervisory Board Members.
We have elected those persons playing an active role widely in the field of arts and culture in Japan andoverseas and persons having extensive knowledge and experience as executives to our Outside Directors, and eachof such persons takes a role in improving the appropriateness of the decision made by the Board of Directors bygiving objective and independent advice based on their long careers in each business area and extensive
professional knowledge. Also, we have elected those persons who have experiences as business administrators infinancial services, independent attorneys at law or independent certified public accountants having a considerable
degree of finance and accounting knowledge, to our Outside Audit & Supervisory Board Members. Each Outside
Audit & Supervisory Board Member conducts a strict audit on the legality of Directors’ decision making andperformance of their businesses from a technical perspective by maintaining high levels of independence.
The Company prescribes “Criteria for Appointment or Removal of Officers” and “Criteria for Appointment of
Outside Officers (that ensures independence)” for appointing an Outside Director and an Outside Audit &Supervisory Board Member.
Upon the appointment or removal of an Outside Director Board Member, the “Executive Nomination
Advisory Committee” will submit a list of candidates based on the following criteria to the Board of directors, and acandidate for Audit & Supervisory Board Member is appointed at a Board of Directors’ meeting with the approvalof the Audit & Supervisory Board. The list of candidates for Audit & Supervisory Board Member is then submitted
to a general meeting of shareholders as an agenda item.
＜Criteria for Appointment＞
103

- A candidate with superior character and knowledge and is mentally and physically healthy;- A candidate pursues a law-abiding spirit;- A candidate has comprehensive experience in business operation, company management, legal
community, administration, accounting, education or culture and art and upon re-appointment, his/hermanagement performance and contribution to the group management during the term of office shall beconsidered;- A candidate is not in violation of the “Criteria for Appointment of Outside Officers (that ensures
independence)” separately prescribed by the Company;- A candidate is not currently holding a position as an officer of 4 or more listed companies;- By appointing such candidate, Board of Directors and the Audit & Supervisory Board will each have abalanced knowledge, experience and expertise that ensures diversity in light of gender, internationalism,
career history and age;
＜Criteria for Removal＞- If an officer acts against public policy; or- If an officer is neglecting its duties and deemed to be failing to fulfill its duties.
We also believe that an Outside Director and an Outside Audit & Supervisory Board Member shall maintain an
independent position so that each will not cause any conflict of interest with general shareholders. From this aspect,
the Company shall appoint a candidate for an Outside Officer who does not fall under any of the following items:
1. Has held a position to execute duties at any of our group companies;
2. A major shareholder holding the shares of the Company under its name or other name, is equal to or
higher than 5% as percentage of voting rights; in case such major shareholders is a legal entity or an
association such as general partnership (“Entities”), a candidate who is holding a position to execute
duties at such Entities;
3. A candidate who:
- is the major client of our group or considers our group as the candidate’s major client; in case suchcandidate is an Entity, a candidate who is holding a position to execute duties at such Entity;- is the major lender of our group; in case such lender is an Entity, a candidate who is holding a
position to execute duties at such Entity;- is holding a position to execute duties at lead manager securities company; or- is holding a position to execute duties at any Entity in which our group hold shares, whose percentage
of voting rights is equal to or greater than 5%.
4. A certified public accountant who works at an audit firm, which is the Accounting Auditor of our group;
5. Any legal counsel, accountant, tax accountant, patent attorney, consultant or other expert who receives
large amount of monies or other assets from our group; in case such candidate is an Entity, an expert who
works at such Entity;
6. Anyone who receives large amount of donation from our group; in case such candidate is an Entity, acandidate who is holding a position to execute duties at such Entity;
7. A candidate who is holding a position to execute duties at other companies having a relationshipinvolving mutual appointment of outside officers;
8. A spouse or second-degree relative of a person (limited to those significant) who falls under any of theitems under 1 through 7 above;
9. A candidate who used to fall under any of the items under 2 through 8 above during the past three years;
10. A candidate who is deemed to have a special circumstance where a possible conflict of interest withgeneral shareholders of the Company may arise.
It should be noted, however, that a candidate who falls under any of the items under 2 through 9 above, but
who fulfills the requirements of an outside officer under the Companies Act, and if the Company deems it
appropriate for such candidate to be appointed as an outside officer, may exceptionally become a candidate for an
outside officer by describing the reasons of the Company for making such judgment.
For our Outside Directors, the Management Planning Department hands out documents setting out the
proposals presented to the Board of Directors’ meetings in advance and gives prior explanations on importantmatters to them. For Outside Audit & Supervisory Board Member, Standing Audit & Supervisory Board Member
104does it.
One of our Outside Director and three of our Outside Audit & Supervisory Board Members hold 1,700 and
10,400 shares of common stock of the Company, respectively. Other than the foregoing, there are no special
interests between our Outside Directors or Outside Audit & Supervisory Board Members and the Company.
The reasons for the election of our Outside Directors and Outside Audit & Supervisory Board Members are as
follows:
Outside Directors
Name
MadokaMayuzumi

Status of significant concurrent
positions
Visiting Professor at Kitazato
University ;Visiting Professor at Showa
Women’s University, Faculty of
Humanities and Culture,
Department of Japanese Language
and Literature;
Visiting Professor at Kyoto
Tachibana University, Faculty of
Humanities, Department ofJapanese Language and Literature;
Trustee of East Japan Railway
Culture Foundation

Shigeru
Saito
Representative Director andChairman, CEO of TOSE Co., Ltd.;
Outside Director of SCREEN
Holdings Co., Ltd.

Tsunehiko
Iwai

Outside Director of Cross Plus Inc.

Reasons for Election
Ms. Mayuzumi plays an active role as a haiku poet in the field of artsand culture in Japan and overseas. While serving as Advisor of theCompany from April 2014, she has provided advice that addresses social
challenges and educational training for employees of the Company andWacoal Corp. We expect that, with her knowledge and experience, shewill contribute to the Company’s management which respects diversity.
Although Ms. Mayuzumi has never been involved in the Company’s
management other than by way of serving as an Outside Director or
Outside Audit & Supervisory Board Member in the past, we believe that
she will be able to perform her duties appropriately for the above-statedreasons.
Also, because she meets the eligibility requirements which the Company
prescribes under “Criteria for Appointment of Outside Officers (toensure independence)” and because there are no concerns that any
conflict of interest with general shareholders may arise, we havedesignated her as an independent officer.
Mr. Saito currently serves as the Representative Director and Chairman
at another company, and has many years of experience and knowledge asa business manager. We believe that he is qualified to be an Outside
Director to further strengthen the supervisory function of the Company
management.
Also, because he meets the eligibility requirements which the Company
prescribes under “Criteria for Appointment of Outside Officers (toensure independence)” and because there are no concerns that any
conflict of interest with general shareholders may arise, we havedesignated him as an independent officer.
We believe that Mr. Iwai is qualified to be an Outside Director to further
strengthen the supervisory function of the Company management, as hehas extensive knowledge and experience as management, as well as
specialized knowledge in the fields of research & development,
production and technology.
Also, because he meets the eligibility requirements which the Company
prescribes under “Criteria for Appointment of Outside Officers (toensure independence)” and because there are no concerns that any
conflict of interest with general shareholders may arise, we havedesignated him as an independent officer.

105

Outside Audit & Supervisory Board Members
Name

Status of significant

Hiroshi Shirai
Certified Public Accountant,Managing Partner of Shirai
Public Accounting Firm;
Outside Audit &Supervisory Board Memberof ALTECO Inc.; Auditor of
University Public
Corporation Osaka

Mitsuhiro
Hamamoto

Reasons for Election

concurrent positions

Managing Partner ofHamamoto Law Office;Outside Director of TVECo., Ltd.;
Outside Auditor of OsakaHyogo Ready-Mixed
Concrete Industrial
Association

Minoru Shimada

Full-time Advisor, SOTSU
CORPORATION

We believe that Mr. Shirai is qualified to be our Outside Audit &Supervisory Board Member, as he has knowledge and experience inaccounting and finance (including U.S. accounting standards) as acertified public accountant.
Also, because he meets the eligibility requirements which the Company
prescribes under “Criteria for Appointment of Outside Officers (toensure independence)” and because there are no concerns that any
conflict of interest with general shareholders may arise, we havedesignated him as an independent officer.
Mr. Shirai worked at Deloitte Touche Tohmatsu LLC, our accounting
auditor, from August 2007 to September 2011, but he was neverinvolved in the audit services engaged for the Company during such
period. It has been eight years and eight months since Mr. Shirai left
Deloitte Touche Tohmatsu LLC.
We believe that Mr. Hamamoto is qualified to be our Outside Audit &Supervisory Board Member, as he has legal knowledge and great store ofexperience of business and commercial issues as an attorney at law.
Also, because he meets the eligibility requirements which the Company
prescribes under “Criteria for Appointment of Outside Officers (toensure independence)” and because there are no concerns that any
conflict of interest with general shareholders may arise, we havedesignated him as an independent officer.
We believe that Mr. Shimada is qualified to be our Outside Audit &Supervisory Board Member, as he has extensive experience at global
financial institutions, including overseas posting, and insight as acompany manager. Also, because he meets the eligibility requirements
which the Company prescribes under “Criteria for Appointment of
Outside Officers (to ensure independence)” and because there are noconcerns that any conflict of interest with general shareholders may
arise, we have designated him as an independent officer.
Until June 2010, Mr. Shimada held a position to execute business at The
Bank of Tokyo-Mitsubishi UFJ, Ltd. (current “MUFG Bank, Ltd.”), a
major shareholder and lender of the Company. It has been 12 years
since he has retired from said Bank as an executor and accordingly, there
is no concern with respect to his independence.

(ⅲ) Supervision or Audit and Internal Audit by Outside Directors or Outside Audit & Supervisory Board
Members, Audit by Audit & Supervisory Board Members and Mutual Collaboration with Accounting Auditor, as
well as Relationship with Internal Control Division
Outside Directors fulfill the supervisory function of management by providing recommendations at the Boardof Directors meetings based on their extensive knowledge and experience after they receive necessary documents
and are explained about agenda items which they receive prior to the Board of Directors meetings, as well as byserving as the chair or a member of the “Executive Compensation Advisory Committee” and/or “Executive
Nomination Advisory Committee”. Outside Directors also contribute to the implementation and/or maintenance of
the internal control system by receiving various reports from the Audit office.
Outside Audit & Supervisory Board Members perform the audit of the internal control system, including fairpresentation of financial statements, by attending meetings of the Audit & Supervisory Board, and by establishingsufficient communication channels and coordinating with the Standing Audit & Supervisory Board Members, whoin turn report to the Outside Audit & Supervisory Board Members the status of audit on operations, details ofimportant meetings and other matters as necessary, as well as by receiving various reports from the Accounting
Auditor and Audit office. In addition, based on matters discussed at the meetings of the Audit & Supervisory
Board, Outside Audit & Supervisory Board Members attend the Board of Directors meetings and other important
meetings and enhance the effectiveness of audit by visiting and conducting hearings at our subsidiaries.
106

In addition to the above, Outside Directors and Outside Audit & Supervisory Board Members exchange
opinions on issues raised in connection with the operation of the Board of Directors’ meeting.
(3)【Status of Audit】(ⅰ) Status of Audit by Audit & Supervisory Board Members
a. Organization and Members
Our Audit & Supervisor Board are composed of five members, who are two Standing Audit & Supervisory
Board Members and three Outside Audit & Supervisory Board Members. Standing Audit & Supervisory Board
Member Mr. Shinichi Kitagawa serves as the head of the Audit & Supervisor Board. Standing Audit & Supervisory
Board Member Mr. Shinichi Kitagawa and outside Audit & Supervisory Board Member Mr. Hiroshi Shirai,
qualified as a certified accountant, has a considerable degree of finance and accounting knowledge. Standing Audit& Supervisory Board Member Mr. Katsuhiro Okamoto provides audit and advices based on his extensive
knowledge and experience at Wacoal Corp., our core operating entity, as well as our overseas subsidiaries. Outside
Audit & Supervisory Board Member Mr. Mitsuhiro Hamamoto provides audit and advices based on his legal
knowledge as a lawyer and experience in business law, which is his area of specialization. Outside Audit &Supervisory Board Member Mr. Minoru Shimada provides audit and advices based on extensive experience infinancial industry and extensive knowledge as a corporate executive experience. These increase the effectiveness ofaudit by the Audit & Supervisory Board Members. The foregoing members have enhanced the effectiveness ofaudit. In addition, we have a full-time assistant for the Secretarial Office for the Audit & Supervisory Board toassist the duties of the Audit & Supervisory Board Members and our Audit Office assists the duties of the Audit &Supervisory Board Members upon their request from time to time.
b. Activities of Audit & Supervisory Board
The Audit & Supervisory Board generally meets once a month before the Board of Directors meeting and also
from time to time as necessary. We held 15 meetings during the current fiscal year. The attendance record of each
Audit & Supervisory Board Member is as follows.
Title
Standing Audit &Supervisory Board
MemberStanding Audit &Supervisory Board
MemberOutside Audit &Supervisory Board
MemberName
Shinichi
Kitagawa
Katsuhiro
Okamoto
HiroshiShirai

Meeting attendance (Attendance rate)
15/15 (100%)

10/10 (100%)

15/15 (100%)

Outside Audit &Supervisory Board

Mitsuhiro Hamamoto

15/15 (100%)

MemberOutside Audit &Supervisory Board
MemberMinoruShimada15/15 (100%)

The Audit & Supervisory Board prepares an audit report, determines appointment and removal of Standing
Audit & Supervisory Board Members, audit policies, procedures of investigation on the conduct of the business, theassets, properties and matters regarding the execution of duties of Audit & Supervisory Board Members inaccordance with the Companies Act. The Audit & Supervisory Board also examines matters to be resolved by the
Audit & Supervisory Board such as matters regarding appointment and removal or non-reappointment of theaccounting auditor, consent on the amount of compensation, etc. paid for the accounting auditor, consent on
appointment of Audit & Supervisory Board Members, examines the agenda of the Board of Directors in advance,
exchanges information and opinions in relation to audit, exchanges opinions with the Representative Director andChairman and the Representative Director and President, and conducts hearings on the execution of duties with our
executive Directors and the Directors of Wacoal Corp., our major subsidiary. The Audit & Supervisory Board
monitors and inspects the status of the audit by the accounting auditor through results of quarterly review and thestatus of its accounting audit at the end of the fiscal year, as well as hearings on the system to ensure the appropriate
107execution of duties of the accounting auditor and the results of audits on the internal controls as appropriate. In
addition, we discussed with the Accounting Auditor and requested explanations, as necessary, regarding the content
of the Key Audit Matters required to be included in the auditor’s report for companies subject to audits under the
Financial Instruments and Exchange Act.
c. Activities of Audit & Supervisory Board Members
The Audit & Supervisory Board Members attend meetings of the Board of Directors and other important
meetings such as Group Management Meeting, express their opinions as necessary and hear explanation on
important operational matters from the Directors etc. in accordance with the audit standards prescribed by the Audit& Supervisory Board. The Audit & Supervisory Board Members also monitors and inspects the system to ensure
appropriate business conduct to perform audits on legality and validity of the execution of duties of the Directors.
In addition, Outside Audit & Supervisory Board Member Mr. Minoru Shimada attends the Executive Nomination
Advisory Committee and the Executive Compensation Advisory Committee as an observer and expresses his
opinions as necessary and Standing Audit & Supervisory Board Members attend the Corporate Ethics and Risk
Management Committee, the Compliance Committee and the CSR Procurement Committee as an observer andexpress their opinions as necessary in order to strengthen the monitoring function on operations.
Standing Audit & Supervisory Board Members make efforts to communicate with the Directors andemployees, maintain an environment for information gathering and auditing, conduct audits on the status ofprincipal offices and the assets and properties, receive monthly reports from Audit Office and share the information
with Outside Audit & Supervisory Board Members in accordance with the audit standards and the assignment ofwork responsibilities prescribed by the Audit & Supervisory Board. Standing Audit & Supervisory Board Members
also hold Audit & Supervisory Board group meetings annually, receive annual reports from the Audit &Supervisory Board Members of the domestic subsidiaries and visit the domestic subsidiaries to conduct audits with
Outside Audit & Supervisory Board Members as much as possible in order to understand the management condition
through hearings from the management. Standing Audit & Supervisory Board Members receive reports regarding
the management conditions of the major overseas subsidiaries from Global division on a regular basis.
During the current fiscal year, we focused on audits on how we ensure objectivity of the decision-making
process at the Board of Directors meetings, the implementation of the evaluation of the effectiveness of the Board of
Directors to ensure that it fully performs necessary functions and the process for forming issues, the status of theCompany’s efforts to address the risks of occurrence of fraud, and the audit of corporate policies for the evolution ofsustainability management.
(ⅱ)

Status of Internal Audit
Pursuant to the “Internal Audit Regulations”, our Audit Office, the internal audit division, which is directly
under the control of the Representative Director and President, audits the legality and appropriateness of theexecution of operations at the Company and our domestic and overseas subsidiaries, and evaluates the effectivenessof the internal controls. The results of such audit and evaluation are regularly reported to the Representative
Director and President.
The number of staff of our internal audit department (Audit Office) was eight.
Our Audit & Supervisory Board Members and internal audit department (Audit Office) have a regular meetingfor reporting and confirmation once a month. The main purpose of such meeting is to report the discussions atmajor meetings at which our Audit & Supervisory Board Members attended, activities conducted by our Audit
Office, and other matters. We have implemented an audit system allowing the sharing of documents andinformation necessary for audit so that audit working papers are mutually exchanged and confirmed by our Audit &Supervisory Board Members and Audit Office, and the audit can be performed more efficiently and effectively
through alliance between our Audit & Supervisory Board Members and Audit Office.
Further, our Audit & Supervisory Board Members and Accounting Auditor have regular meetings for discussion
six times a year. The purpose of such discussion is mainly to report and confirm the plan and status of the audit andto exchange opinions on the management. In addition, they have meetings from time to time as necessary.

108

(ⅲ) Status of Accounting Audit
a. Name of Audit Firm
An accounting audit agreement has been executed between the Company and Deloitte Touche Tohmatsu LLC(“Tohmatsu”) pursuant to the Companies Act and the Financial Instruments and Exchange Act.
b. Consecutive Number of Years during which Audit Was Performed
54 yearsc. Names of the certified public accountants who were engaged in the audit:
Designated Limited Liability Partners and Managing Members:
Koichiro Tsukuda, Tomomi Tsuji
d. Composition of the assistants for the audit services:
10 certified public accountants, 4 persons who passed the certified public accountant examination and 9 otherpersonse. Policies and Reason for Appointing Audit Firm
The Audit & Supervisor Board selects the certified public accountants, etc. on the condition that such certified
public accountant does not fall under any of the item under Paragraph 1, Article 340 of the Companies Act and that
there are no event that may impair the eligibility and independence of such certified public accountant.
We have selected Tohmatsu based on the fact that it has the required independence, expertise, andappropriateness and adequacy in auditing activities, and on our judgment that it has the system to ensure that theaccounting audit of the Company will be conducted appropriately and sufficiently.
f. Evaluation of Audit Firm by Audit & Supervisory Board Members and Audit & Supervisory Board
Upon the discussion and resolution on the appointment and non-reappointment of Tohmatsu at a meeting heldon April 28, 2021, the Audit & Supervisory Board performed an evaluation from the following perspectives: (1)how the compliance system has been established and operated; (2) ensuring and/or monitoring of independence; (3)system to ensure audit quality; (4) high level of audit and/or accounting expertise; (5) communication with the
Audit & Supervisory Board Members; and (6) sufficiency of time taken for audit procedures and adequacy of
remuneration for audit.
(ⅳ)

a.

Audit Fees

Fees to Certified Public Accountants
Fiscal Year Ended March 31, 2021

Category
Fees for Audit Services(Millions of yen)

Fiscal Year Ended March 31, 2022

Fees for Nonaudit
Services(Millions of yen)

Fees for Audit Services(Millions of yen)

Fees for Nonaudit
Services(Millions of yen)

The Company

139

71

220

35

Consolidated
subsidiaries

14

－

13

－

Total

153

71

233

35

In the fiscal year ended March 31, 2021, the Company paid fees for nonaudit services to the certified public
accountants as compensation for the advice and guidance regarding on accounting standards and information
disclosure, which are services other than those stipulated in Paragraph 1, Article 2 of the Certified Public
Accountants Act. In the fiscal year ended March 31, 2022, the Company paid fees for nonaudit services to thecertified public accounts as compensation for advisory services regarding the implementation of International
Financial Reporting Standards (IFRS), which are services other than those stipulated in Paragraph 1, Article 2 of theCertified Public Accountants Act.
b. Fees to the same network as the CPA (Deloitte) (excluding a.)
Fiscal Year Ended March 31, 2021
Category

Fees for Audit
Services(Millions of yen)

Fiscal Year Ended March 31, 2022

Fees for Nonaudit
Services(Millions of yen)

Fees for Audit
Services(Millions of yen)

Fees for Nonaudit
Services(Millions of yen)

The Company

－

20

－

15

Consolidated
subsidiaries

105

37

107

47

105

57

107

62

Total

109

For both fiscal years ended March 31, 2021 and 2022, the Company paid fees for nonaudit services to theaccounting auditor or certified public accountants as compensation for the advice and guidance regarding tax.
In the fiscal year ended March 31, 2021, the consolidated subsidiaries paid fees for nonaudit services to theaccounting auditor or certified public accountants as compensation for the advice and guidance regarding tax. In thefiscal year ended March 31, 2022, the consolidated subsidiaries paid fees for nonaudit services to the accounting
auditor or certified public accountants for advisory services regarding the implementation of International Financial
Reporting Standards (IFRS) and the advice and guidance regarding tax.
c.

Other material audit fees
Not applicable.

d.

Policy on determination of audit fees
The Company determines the amount of audit fees to be paid to the accounting auditor and certified public
accountants, after taking into account the number of days and system required for the audit, the operational
characteristics of the Company and other factors, and after negotiation with such accounting auditor or certified
public accountants and with the approval of the Audit & Supervisory Board.
e. Reason by Audit & Supervisory Board Members for giving consent on the amount of fees payable to theaccounting auditor
The Audit & Supervisory Board has obtained necessary documents and received explanations regarding thecomparison of the estimated time under the audit plan from the previous fiscal year and the actual time used foraudit performance and the trend in the amount of fees paid for the audit performance during the past fiscal years
from the relevant departments and the accounting auditor, has reviewed the details of audit planning, basis forcalculating fees and level of fees presented by the accounting auditor for the current fiscal year, and after
deliberating whether the amount of fees for the audit performance is appropriate to maintain the independence of theaccounting auditor and to carry out its accounting audit under appropriate audit system and audit plan for theassessment of risks related to the audit environment and internal control system of the business group (including theCompany and its consolidated subsidiaries), the Audit & Supervisory Board has deemed the amount of fees for thecurrent fiscal year is appropriate. Based on the above, the Audit & Supervisory Board has given its consent,
pursuant to the provisions of Paragraph 1, Article 399 of the Companies Act, on the amount of fees payable to theaccounting auditor.

110

(4)【Remunerations Paid to Officers】(ⅰ) Details and Policies of Calculation methods for Amount of Remunerations, etc., Paid to Officers or Method of
Calculating such AmountThe Company has established a policy on determining the details of compensation payable to each Director(this “Policy”). The remunerations paid to Directors under our compensation system for officers consists of “Basic
Compensation,” the amount of which is fixed, and “Bonus,” which is linked to the business results of each fiscal
year, as well as “Restricted Stock,” which is linked to medium- and long-term business results. In the case of
Outside Directors and Audit & Supervisory Board Members who shall be in the position independent from the
management, only “Basic Compensation” is paid because any remuneration linked to business results are notappropriate in such case.
<Basic Compensation>
Basic compensation, the amount of which is fixed, is designed to be determined for each position, but may be
increased, within a certain range, based on the contribution made to the management of the Company in the past
years. The Company annually verifies the adequacy of the level of remuneration, which has been set according to
the business results and scale of the Company and is based on comparison with other companies within the same
industry or of the same scale through the investigation results on remuneration prepared by an external agency.
Specific details of basic compensation amount for Directors are determined by the Board of Directors basedon the reports prepared by the Executive Compensation Advisory Committee, which is composed by members,
majority of which are Independent Outside Directors. The basic compensation amount for Audit & Supervisory
Board Members is determined after discussion within the Audit & Supervisory Board.
<Performance-based Bonus (performance-based compensation)>
The total amount of the performance-based bonus is based on achievement as a percentage of the consolidated
operating income recorded for each fiscal year, plus other performance factors (consolidated net sales, consolidated
income before income taxes), to increase the degree of linkage between bonuses and consolidated businessperformance. Performance-based bonus is paid once a year after approval at the general meeting of shareholders forthe relevant fiscal year.
The amount of performance-based bonus to Directors is resolved at a Board of Directors meeting and the total
amount is approved at the general meeting of shareholders based on reports prepared by the Executive
Compensation Advisory Committee, which is composed of members, half of which are Independent Directors.
< Restricted Stock (non-monetary compensation)>
The restricted stock are determined in consideration of the monthly amount of basic compensation and the fairvalue of stock, which in turn are determined pursuant to the recommendations of the Executive Compensation
Advisory Committee, which is composed of members, majority of which are Independent Outside Directors andwill be allotted in the number determined and resolved at a Board of Directors meeting once a year. Allotted shares
will be subject to transfer restriction during the period from the date allotted shares are granted until the date such
Director, Audit & Supervisory Board Member or Corporate Officer designated by the Company retires from theirposition. The transfer restrictions on all allotted shares will be removed upon the expiration of the transfer
restriction period if such eligible grantee has continuously held the position of Director, Audit & Supervisory Board
Member or Corporate Officer until the date of the first Ordinary General Meeting. The Company may repurchaseall of the allotted shares bearing transfer restrictions as a result of a breach of restricted stock allotment agreement
without consideration
The Executive Compensation Advisory Committee held discussions and deliberations, including with respect
to the consistency of the draft with this Policy, upon determination of the compensation and other matters withrespect to each Director for the current fiscal year, and therefore, the Board of Directors respects the Committee’s
recommendations and believes that the determination is generally consistent with this Policy.
The maximum annual amounts of the basic remuneration paid to Directors and Audit & Supervisory Board
Members were determined to be 350 million yen (excluding the amount paid as salaries for employees to the
Directors who concurrently serve as employees) and 75 million yen, respectively, by the resolution adopted at the111

57th Ordinary General Meeting of Shareholders held on June 29, 2005. The numbers of Directors and Audit &Supervisory Board Members upon the close of the 57th Ordinary General Meeting of Shareholders were seven (7)and five (5), respectively.
The amount of Performance-Linked bonuses was determined to be such amount as is determined according to
the business results of each fiscal year, which is resolved at each Ordinary General Meeting of Shareholders held
for the relevant year. Further, the maximum annual amount of restricted stock was determined to be 70 million yen
by the resolution adopted at the 73rd Ordinary General Meeting of Shareholders held on June 29, 2021. Totaling
seven (7) directors jointed to the resolution upon the close of the 73rd Ordinary General Meeting of Shareholders.
The basic compensation, performance-based bonus and share-based stock options as percentages of totalcompensation are as follows, when the performance-based bonus is calculated as the reference value.
basic compensation 71%; performance-based bonuses 18%; and restricted stock 11%.
(assuming the performance-linked bonuses meet the base amount)
The retirement allowance system for officers was abolished by the resolution adopted at the 57th Ordinary
General Meeting of Shareholders held on June 29, 2005.
<Roles and Activities of Executive Compensation Advisory Committee>
As an advisory body to Board of Directors, the Executive Compensation Advisory Committee discusses andresolves matters related to officers’ compensation and system from an independent and objective perspective. A
majority of the members of the Executive Compensation Advisory Committee, chaired by Independent Outside
Director Mr. Tsunehiko Iwai, are Independent Outside Directors. The Executive Compensation Advisory
Committee is also attended by the Outside Audit & Supervisory Board Member(s) as an observer to ensuretransparency.
We have resolved upon discussion the matters below related to the remuneration of officers for the current
fiscal year:
December 21, 2021
: Partial review of executive compensation system (review of the compositionof basic compensation, performance-based bonus, and restricted stock)
January 25, 2022
: Partial review of executive compensation system Part II
February 28, 2022
: Partial review of executive compensation system Part III
Verification of the level of remuneration for officers and basic remuneration
amountMarch 28, 2022
: Basic remuneration amount in 2022
April 27, 2022
: Performance-linked bonus for officers<Roles and Agenda at the Board of Directors’ Meeting>Board of Directors discusses and resolves matters related to officers’ remuneration based on recommendations
received from the Executive Compensation Advisory Committee.
The Board of Directors has resolved after discussion on the matters related to the remuneration paid to officers
for the current fiscal year as follows:
June 29, 2021
: Basic remuneration amount in 2021
June 29, 2021
: Issuance of restricted stock
May 13, 2022
: Performance-linked bonus for officers
May 31, 2022
: Compensation determined for basic compensation, and compensation to each
Director for fiscal year 2022
The Executive Compensation Advisory Committee continues to work on restructuring the wholecompensation system for executives including the following:- Composition of basic compensation, performance-linked bonuses and mid- and long-term incentives(reassessment of the amount and relative proportions)- Calculation method for performance-linked bonuses (to strengthen their link to business targets inaccordance with the medium- and long-term management plan)*In July 2022, we will partially review the composition of basic compensation, performance-based bonus andrestricted stock. The ratio of basic compensation to restricted stock will be reviewed and changed tostructure in which the higher the rank, the higher the ratio of restricted-stock.
112

(ⅱ) Aggregate amount of remunerations, etc., paid to each category of officers, aggregate amount of remunerations,etc., by type thereof, as well as the number of relevant officers:
Aggregate
Aggregate Amount of Remunerations, etc., by Type Thereof
Amount of(Millions of yen)
Remunerations,
Basic
Performance- Restricted Non-monetary
etc. (Millions ofRemuneration
based Bonusstock
compensationyen)

Category of Officers

Directors(Excluding Outside
Directors)
Audit & Supervisory Board
Members(Excluding Outside Audit &Supervisory Board
Members)
Outside Officers(Note) 1.

2.

Number of
Relevant
Officers

277

232

－

44

44

5

39

39

－

－

－

3

50

50

－

－

－

6

The number of Directors, Audit & Supervisory Board Members and Outside Officers was four (4),two (2) and six (6), respectively. The number of Directors and Audit & Supervisory Board Membersin the table above includes one (1) Director and one (1) Audit & Supervisory Board Member who
resigned upon the close of the 73rd Ordinary General Meeting of Shareholders held on June 29, 2021.
Non-monetary compensation to Directors (excluding Outside Directors) comprises stock options in
the amount of 44 million yen.

(ⅲ) Aggregate amount, etc., of the consolidated remunerations, etc., of the person who receives 100 million yen or
more as remunerations, etc., on a consolidated basis:
Name

Yoshikata
Tsukamoto(Note) 1.
2.

Aggregate Amountof Consolidated
Remunerations, etc.
(Millions of yen)
150

Category of
Officers

Relevant
Company

Director

WacoalHoldings
Corp.

Amount of Consolidated Remunerations, etc., by Type
Thereof (Millions of yen)
Basic
PerformanceRemuneration based Bonus
129－

Restricted
stock
20

Non-monetarycompensation20

Non-monetary compensation comprises stock options in the amount of 20 million yen.
Mr. Yoshikata Tsukamoto has resigned as the Director of the Company upon the close of the 74th
Ordinary General Meeting of Shareholders held on June 29, 2022.

(5)【Information on Shareholdings】(ⅰ) Standard and Concept for Categories of Investment Stocks
With respect to the category of the investment stocks that are held for the purpose of pure investment and thatare held for the purposes other than pure investment, the Company does not hold any shares for the purpose of pureinvestment as part of asset management, but holds shares of other companies for purposes other than pureinvestment that are strategically important for our group, to maintain and enhance business transactions, to build,
maintain and enhance cooperative and transactional relationships for business expansion, and to maintain steadyfinancial transactions.
(ⅱ) Equity securities held by Wacoal Corp.
Shares held by Wacoal Corp., which is among the Company and our consolidated subsidiaries and holds thelargest amount of equity securities on the balance sheet (i.e., the balance sheet amount of investment stocks) are as
follows:
A ．Equity securities held for purposes other than pure investment
a. Policies and method to verify the rationality of shareholding, as well as the verification process at meetingof Board of Directors regarding appropriateness of holding certain stock of shares
The Company examines whether it is appropriate to hold shares from a medium-to long-term perspective,
whether risks associated with such holding are worth the cost of capital, and profits in connection with thetransaction and dividend income indices are reported to the Board of Directors on a regular basis. The Board of113

Directors then examines whether the holding will be enhance corporate value of the Company from a medium-to
long-term perspective based on such verification results, and determines whether to continue to hold or dispose suchshares.
b. Number of Stock and Amount Recorded in the Balance Sheet
Number of Total Amount Recorded in the
StocksBalance Sheet (Millions of yen)
Unlisted Stock of Shares
Shares Other than Unlisted
Stock of Shares

27

1,648

36

44,348(Name of stock of shares which increased during the current fiscal year)
Number of
StocksTotal Acquisition Amount for
Increased Shares (Millions ofyen)

Unlisted Stock of Shares

－

－

－

Shares Other than Unlisted
Stock of Shares

1

1

Increased through purchases made by shareownership plan for shares in clients

Reason for Increase in the Number of Shares(Name of stock of shares which decreased during the current fiscal year)
Number of
StocksTotal Disposal Amount for
Decreased Shares (Millions of
yen)

1

0

12

3,184

Unlisted Stock of Shares
Shares Other than Unlisted
Stock of Sharesc.

Information on specified investment stocks and stocks deemed to be held, including number of shares bystock, and the amount recorded in the balance sheet

Specified investment stocks:

Issuer Name

Fiscal Year 2022

Fiscal Year 2021

Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

Purpose of Holding, Quantitative Effects Whether Issuerof Shareholding (Note 2) and Reason for Holds Company
Increase in Number of Shares
SharesWe engage in a transaction involving
1,520,500

1,520,500

KDDI Corporation

communications equipment andinfrastructure with the issuer andcontinue to hold the issuer’s shares tomaintain and strengthen our good

6,089

1,545,427

5,162

1,544,932

Aeon Co., Ltd.

relationship from the perspective ofenhancing corporate value.
We engage in a transaction involving
women’s garments and continue to holdthe issuer’s shares to maintain andstrengthen our good relationship fromthe perspective of enhancing corporate
value.

4,032

5,096

The number of shares has increased due
to participation in the stock ownershipassociation.

114

No

Yes

Issuer Name

Fiscal Year 2022
Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

Fiscal Year 2021
Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

445,900

445,900

Purpose of Holding, Quantitative Effects Whether Issuerof Shareholding (Note 2) and Reason for Holds Company
Increase in Number of Shares
SharesWe have close connections with the
KyoceraCorporation
3,068

3,132

issuer, as a local firm, throughinformation sharing, and continue tohold the issuer’s shares to maintain andstrengthen our good relationship fromYes

the perspective of business strategy.
569,997569,997

Bank of Kyoto,Ltd.

We engage in a financial transaction
with the issuer, as a major local financial
firm, and continue to hold the issuer’s
shares to maintain and strengthen our

3,049

217,179

3,881

217,179

SCREEN
Holdings Co., Ltd.

good relationship from the perspectiveof enhancing corporate value.
We have close connection with theissuer, as a local firm, throughinformation sharing and continue to holdthe issuer’s shares to maintain and

2,684

2,115

Yes

Yes

strengthen our good relationship fromthe perspective of business strategy.
We have close connection with the

1,509,400

1,509,400

Kokuyo Co., Ltd.
2,437

2,587

520,200

743,000

Shimadzu
Corporation

issuer as a major supplier of officefurniture and stationery and continue tohold the issuer’s shares to maintain andstrengthen our good relationship fromthe perspective of enhancing corporate
value.
We have close connection with theissuer, as a local firm, throughinformation sharing and continue to holdthe issuer’s shares to maintain and

2,203

2,975

Yes

Yes

strengthen our good relationship fromthe perspective of business strategy.
We engage in overall financial

2,885,850
Mitsubishi UFJ

2,885,850 transactions with the issuer as a major
financial institution and continue to hold

Financial Group,Inc.

the issuer’s shares to maintain and
2,194

1,707

strengthen our good relationship from

Yes
(Note 3)the perspective of enhancing corporate
value.

274,000

274,000

Tokio Marine
Holdings, Inc.
1,953

1,442

115

We have various general insurances tominimize business risks and continue tohold the issuer’s shares to maintain andstrengthen our good relationship fromthe perspective of enhancing corporate
value.

Yes(Note 3)Issuer Name

Fiscal Year 2022

Fiscal Year 2021

Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

Purpose of Holding, Quantitative Effects Whether Issuerof Shareholding (Note 2) and Reason for Holds Company
Increase in Number of Shares
SharesWe have close cooperative relationship
7,606,666

7,606,666

Saha Pathanain business deployment in the Kingdomof Thailand and continue to hold theissuer’s shares to maintain andstrengthen our good relationship fromInter-Holding PCL
1,791

230,000

1,615

the perspective of enhancing corporate
value in the Kingdom of Thailand.

We have close connection with the
230,000 issuer, as a local firm, throughinformation sharing and continue to holdthe issuer’s shares to maintain andHoriba, Ltd.
1,541

No

Yes

1,605 strengthen our good relationship fromthe perspective of business strategy.
We have close connection with the

175,000
Nippon Shinyaku
Co., Ltd.
1,457

1,000,000
Takara Holdings
Inc.
1,101

175,000 issuer, as a local firm, throughinformation sharing and continue to holdthe issuer’s shares to maintain and
1,440 strengthen our good relationship fromthe perspective of business strategy.
We have close connection with the
1,000,000 issuer, as a local firm, throughinformation sharing and continue to holdthe issuer’s shares to maintain and
1,507 strengthen our good relationship from

Yes

Yes

the perspective of business strategy.
517,531517,531

We engage in a transaction of women’s
garments and continue to hold theissuer’s shares to maintain andstrengthen our good relationship from

Heiwado Co., Ltd.
981

1,161

548,890548,890

the perspective of enhancing corporate
value.
As the issuer is one of major suppliers of
textile-related products, we continue tohold the issuer’s shares to enhance
corporate value and to maintain andChori Co., Ltd.
965

924

426,000

426,000

Yes

Yes

strengthen our good relationship througha stable supply.
We have close connection with the

Toppan Printing
Co., Ltd.
922

796

116

issuer in printing advertisements, mainly
catalogues, and continue to hold theissuer’s shares to maintain andstrengthen our good relationship fromthe perspective of enhancing corporate
value.

Yes

Issuer Name

Fiscal Year 2022

Fiscal Year 2021

Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

154,969

154,969

Purpose of Holding, Quantitative Effects Whether Issuerof Shareholding (Note 2) and Reason for Holds Company
Increase in Number of Shares
SharesWe engage in a transaction of women’s
Seven & i
Holdings Co., Ltd.
900

691

398,000

398,000

garments and continue to hold theissuer’s shares to maintain andstrengthen our good relationship fromthe perspective of enhancing corporateNovalue.
We engage in a financial transaction

Shiga Bank, Ltd.
879

953

with the issuer, as a major local financial
firm, and continue to hold the issuer’s
shares to maintain and strengthen our
good relationship from the perspectiveYesof enhancing corporate value.
Issuer is a group company of Aeon Co.,
687,300

687,300

Aeon Financial
Service Co., Ltd.

Ltd. with whom we engage in atransaction of women’s garments andcontinue to hold the issuer’s shares tomaintain and strengthen our good

836

1,020

No

relationship with Aeon group from theperspective of business strategy.
We continue to hold the issuer’s shares

TaishoPharmaceutical
Holdings Co., Ltd.

132,000

132,000

749

942

to maintain and strengthen our good
relationship from the perspective ofenhancing corporate value in a close andcooperative connection in businessYes

deployment.
We have close connection in logistics
Fukuyama
Transporting Co.,Ltd.

187,500

204,400684

932

transaction and continue to hold theissuer’s shares to maintain andstrengthen our good relationship fromthe perspective of enhancing corporate

Yesvalue.
As the issuer is one of major suppliers of

598,195

598,195 textile-related products, we continue toAsahi Kasei
Corporation

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

635

Yes

762 strengthen our good relationship througha stable supply.

197,500

197,500

Odakyu Electric
Railway Co., Ltd.

402

597

117

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

NoIssuer Name

Fiscal Year 2022

Fiscal Year 2021

Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

Purpose of Holding, Quantitative Effects Whether Issuerof Shareholding (Note 2) and Reason for Holds Company
Increase in Number of Shares
SharesWe have close connection in logistics

381,300

381,300 transaction and continue to hold the

Chuo Warehouse
Co., Ltd.

issuer’s shares to maintain andstrengthen our good relationship from

377

Yes

431 the perspective of enhancing corporate
value.
We engage in a transaction of various

151,487

151,487 products, mainly the women’s garments

Marui Group Co.,Ltd.

and continue to hold issuer’s shares tomaintain and strengthen good

340

Yes

314 relationship from the perspective ofenhancing corporate value.
We continue to hold the issuer’s shares

Hisamitsu
PharmaceuticalCo., Inc.

90,000329

170,500

90,000 to maintain and strengthen our good
648

170,500

relationship as we have close connection
in building cooperative and transactional
relationship in business deployment.
We continue to hold the issuer’s sharesto maintain and strengthen our good
relationship from the perspective of
business strategy, as we have close

Yomeishu Seizo
Co., Ltd.

299

Yes

Yes

connection in building cooperative and324 transactional relationship in businessdeployment.

We have close cooperative relationship
I.C.C

2,677,300

2,677,300

INTERNATIONA
L PLC

in business deployment in the Kingdomof Thailand, and continue to hold theissuer’s shares to maintain andstrengthen our good relationship from

293

Yes

310 the perspective of enhancing corporate
value in the Kingdom of Thailand.
We engage in a transaction of various

Kintetsu
Department Store
Co., Ltd.

100,000

100,000

255

325

products, mainly the women’s garments
and continue to hold the issuer’s sharesto maintain and strengthen our good
relationship from the perspective ofYesenhancing corporate value.
We have close connection in logistics
214,000

283,000

Seino Holdings
Co., Ltd.
238

436

transaction and continue to hold theissuer’s shares to maintain andstrengthen our good relationship fromthe perspective of enhancing corporate
value.

118

Yes

Issuer Name

Fiscal Year 2022

Fiscal Year 2021

Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

205,000

205,000

Purpose of Holding, Quantitative Effects Whether Issuerof Shareholding (Note 2) and Reason for Holds Company
Increase in Number of Shares
SharesWe engage in a transaction of various

Matsuya Co., Ltd.
157

188

products, mainly the women’s garments
and continue to hold the issuer’s sharesto maintain and strengthen our good
relationship from the perspective ofYesenhancing corporate value.
45,64845,648We engage in a transaction of women’s
garments and continue to hold theissuer’s shares to maintain andstrengthen our good relationship fromIZUMI Co., Ltd.
146

197

No

the perspective of enhancing corporate
value.
We engage in a transaction of women’s

62,60062,600Fuji Company,
Limited144

134

garments and continue to hold theissuer’s shares to maintain andstrengthen our good relationship fromthe perspective of enhancing corporate

Yesvalue.
We have close connection with the
168,000

168,000

King Co., Ltd.
90

98

issuer through information sharing asapparel manufacturers and continue tohold the issuer’s shares to maintain andstrengthen our good relationship fromYes

the perspective of business strategy.
100,000

100,000

Toray Industries,
Inc.

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

63

94,38071

94,380Sankyo Seiko Co.,Ltd.

strengthen our good relationship througha stable supply.
We have close connection with theissuer through information sharing asapparel manufacturers and continue tohold the issuer’s shares to maintain and

49

51

－

1,315,769

Yes

Yes

strengthen our good relationship fromthe perspective of business strategy.
We engage in a transaction of various

Isetan Mitsukoshi
Holdings Ltd.
－

1,023

products, mainly the women’s garments
and continue to hold the issuer’s sharesto maintain and strengthen our good
relationship from the perspective ofNoenhancing corporate value.
We have close connection with the
Nichicon－296,500

Corporation
－

332

119

issuer, as a local firm, throughinformation sharing and continue to holdthe issuer’s shares to maintain andstrengthen our good relationship fromNo

the perspective of business strategy.

Issuer Name

Fiscal Year 2022

Fiscal Year 2021

Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

Purpose of Holding, Quantitative Effects Whether Issuerof Shareholding (Note 2) and Reason for Holds Company
Increase in Number of Shares
SharesWe have close connection with the－

58,000Dai Nippon

issuer in printing advertisements, mainly
catalogues, and continue to hold theissuer’s shares to maintain andstrengthen our good relationship fromPrinting Co., Ltd.
－

－

134

141,500

Aoyama Trading
Co., Ltd.
－

117

No

the perspective of enhancing corporate
value.
We have close connection with theissuer through information sharing asapparel manufacturers and exploring
potential cooperation in businessstrategy and continue to hold the issuer’s
shares to maintain and strengthen ourYesgood relationship from the perspectiveof business strategy.
As the issuer is one of major suppliers of－

71,100YAGI & CO.,
LTD.
－

102

textile-related products, we continue tohold the issuer’s shares to enhance
corporate value and to maintain andstrengthen our good relationship throughYes

a stable supply.
As the issuer is one of major suppliers of－

20,000Fujibo Holdings,
Inc.
－

80

textile-related products, we continue tohold the issuer’s shares to enhance
corporate value and to maintain andstrengthen our good relationship throughYes

a stable supply.
－

60,000Takashimaya Co.,Ltd.

We engage in a transaction of various
products, mainly the women’s garments
and continue to hold the issuer’s sharesto maintain and strengthen our good

－

70

－

20,043

Kurabo Industries
Ltd.

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

－

38

Yes

Yes

strengthen our good relationship througha stable supply.
We engage in a transaction of women’s－

11,000Tenmaya Store
Co., Ltd.
－13

garments and continue to hold theissuer’s shares to maintain andstrengthen our good relationship fromthe perspective of enhancing corporate
value.

(Note) 1.

“－” indicates that we do not hold any shares of such stock.
120

No

2.
3.

The quantitative effects of shareholding are difficult to describe as it relates to an individual transaction.
The company in which we hold the stocks does not hold any shares of the Company, while its subsidiaryholds shares of the Company.

Stocks deemed to be held:
Fiscal Year 2022
Issuer Name

Fiscal Year 2021

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

2,544,000

2,544,000

KDDI
Corporation

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

10,1898,636

No

corporate value. We currently haveretirement benefit trust agreement underwhich we withhold our right to give
directions on the exercise of voting rights.

3,365,000

3,365,000

Mitsubishi UFJ

We engage in overall financialtransactions with the issuer as a major
financial institution and continue to holdissuer’s shares to maintain and strengthen
good relationship with the issuer from theperspective of enhancing corporate value.

Financial Group,
Inc.
2,558

1,991

Yes
(Note 3)

We currently have retirement benefit trust
agreement under which we withhold ourright to give directions on the exercise of
voting rights.

(Note) 1.
2.
3.

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

d. Equity securities held for pure investment
Not Applicable.
e. Equity securities reclassified from held for pure investment to held for purposes other than pure investment
during the current fiscal year:
Not Applicable.
f.
Equity securities reclassified from held for purposes other than pure investment to held for pure investment
during the current fiscal year:
Not Applicable.
(ⅲ) Equity securities held by Wacoal holdings Corp.
A．Equity securities held for purposes other than pure investment
a. Policies and method to verify the rationality of shareholding, as well as the verification process at meeting ofBoard of Directors regarding appropriateness of holding certain stock of shares
The Company examines whether it is appropriate to hold shares from a medium-to long-term perspective,
whether risks associated with such holding are worth the cost of capital, and profits in connection with thetransaction and dividend income indices are reported to the Board of Directors on a regular basis. The Board of
Directors then examines whether the holding will be enhance corporate value of the Company from a medium-to
121

long-term perspective based on such verification results, and determines whether to continue to hold or dispose suchshares.
The information on quantitative effects of shareholding is omitted since it relates to an individualtransaction.
b. Number of Stock and Amount Recorded in the Balance Sheet
Number of
Stock(shares)

Total Amount Recorded in the
Balance Sheet(Millions of yen)

1

1

－

－

Unlisted Stock of Shares
Shares Other than Unlisted
Stock of Shares(Name of stock of shares which increased during the current fiscal year)
Total Acquisition Amount for
Number of
Stock
Increased Shares (Millions of Reason for Increase in the Number of Shares(shares)yen)
Unlisted Stock of Shares
Shares Other than Unlisted
Stock of Shares

－

－

－

－

－

－

(Name of stock of shares which decreased during the current fiscal year)
Number of
Stock(shares)c.

Total Disposal Amount for
Decreased Shares (Millions ofyen)

Unlisted Stock of Shares

10

Shares Other than Unlisted
Stock of Shares－－

Information on specified investment stocks and stocks deemed to be held, including number of shares by stock, and theamount recorded in the balance sheet
Not Applicable.
d. Equity securities held for pure investment:
Not Applicable.
e. Equity securities reclassified from held for pure investment to be held for purposes other than pure investment during thecurrent fiscal year:
Not Applicable.
f. Equity securities reclassified from held for purposes other than pure investment to be held for pure investment during thecurrent fiscal year:
Not Applicable122

Wacoal Holdings Corp. and Subsidiaries
Consolidated Balance Sheets
March 31, 2022 and 2021

Millions of Yen
2022
2021

ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Time deposits
Marketable securities (Notes 3, 19 and 20)
Notes and accounts receivable (Note 6)
Allowance for doubtful receivables (Note 4)Inventories (Note 5)
Return assets
Other current assets (Notes 6, 20 and 21)
Total current assets
PROPERTY, PLANT AND EQUIPMENT:Land (Notes 8, 9, and 20)
Buildings and structures (Notes 8, 9, 10 and 20)
Machinery and equipment (Note 20)
Construction in progress
Total
Accumulated depreciation (Note 9)
Net property, plant and equipment
OTHER ASSETS:
Operating leases right-of-use assets (Note 9)
Investments in affiliated companies (Note 6)
Investments (Notes 3, 19 and 20)
Goodwill (Note 20)
Other intangible assets (Note 20)
Prepaid pension expense (Note 11)
Deferred income taxes (Note 16)
Other (Note 6)
Total other assets

TOTAL

¥

37,9821,387
019,414(282 )
45,268
655
4,004

¥

63,557
1,443
253
17,571(346 )
43,250600
7,794

Thousands of
U.S. Dollars(Note 2)2022$

159,865(2,322 )372,760
5,394
32,971

134,122892,853

20,35877,641
20,8291,289
120,117(67,156 )

20,56972,97819,356
1,264
114,167(64,409 )167,638
639,336
171,517
10,614
989,105(552,997 )

52,96149,758436,108

12,356
22,83547,926
22,945
15,40813,411
1,554
5,421

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

101,746
188,035
394,648
188,941
126,878
110,433
12,79644,639141,856

138,881

1,168,116¥ 322,761

CURRENT LIABILITIES:
Short-term bank loans (Note 8)
Notes and accounts payable:
Trade notes payable
Trade accounts payable (Note 6)
Other payables (Note 20)
Total accounts payable
Accrued payroll and bonuses
Income taxes payable (Note 16)
Refund liabilities
Short-term operating lease liabilities (Note 9)
Other current liabilities (Notes 8, 11, 17, 19, 20 and 21)
Total current liabilities

312,764
11,421

108,428¥ 303,245

LIABILITIES AND EQUITYLONG-TERM LIABILITIES:Long-term debt (Notes 8 and 19)
Liability for termination and retirement benefits (Note 11)
Deferred income taxes (Note 16)
Long-term operating lease liabilities (Note 9)
Contingent consideration (Note 20)
Other long-term liabilities (Notes 10, 11 and 16)
Total long-term liabilities¥

Millions of Yen
2022
2021

Thousands of
U.S. Dollars(Note 2)2022

10,227$¥40,672

84,214558
10,067
7,006
17,631
6,319
1,408
1,991
4,549
5,178
47,303

712
8,734
6,610
16,056
6,822
1,025
2,266
4,411
4,819
76,071

4,595
82,897
57,691
145,183
52,034
11,594
16,39537,45942,638389,517

1,626
3,345
14,095
8,150
820
1,854
29,8901,498
1,942
12,292
8,520
1,639
2,183
28,074

13,39027,544116,066
67,111
6,752
15,267
246,130

13,26029,077
183,456

13,26029,120181,346

109,190
239,435
1,510,672

7,714
356
8,070

1,770
(1,008 )762

63,521
2,931
66,452(10,858 )(8,876 )(89,410 )223,005
3,047
226,052

215,612
3,004
218,616

1,836,339
25,091
1,861,430¥ 303,245¥ 322,761$ 2,497,077

COMMITMENTS AND CONTINGENCIES (Notes 8, 9 and 12)
EQUITY:WACOAL HOLDINGS CORP. SHAREHOLDERS' EQUITY:
Common stock, no par value –authorized, 250,000,000 shares in 2022 and 2021;
issued 65,589,042 shares and 65,589,042 shares in 2022 and
2021, respectively
Additional paid-in capital (Note 13)
Retained earnings
Accumulated other comprehensive (loss) income(Notes 11 and 15):
Foreign currency translation adjustments
Pension liability adjustments
Total accumulated other comprehensive loss
Treasury stock, at cost – 4,130,773 shares andshares in 2022 and 2021, respectively
Total Wacoal Holdings Corp. shareholders' equity(Note 14)
Noncontrolling interests
Total equity$ 2,497,077

TOTAL

See notes to consolidated financial statements.
123

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Income
Years Ended March 31, 2022, 2021 and 2020

2022

Millions of Yen
2021

2020

Thousands of
U.S. Dollars(Note 2)2022

¥ 172,860¥ 152,204¥ 186,760$ 1,423,419

76,607

67,79884,959630,82293,01082,06593,824

765,893(1,981 )

(365)

103

(16,313 )

211

1,136
2,673

769
217

1,737

12

256

167,847

153,319

180,128

1,382,139

5,013(1,115 )6,632

41,280

53
(62 )
1,312

61
(78 )
1,126

177
(19 )
1,506

436
(511 )
10,804(641 )
1,571

10,390408(3,760 )(177 )(5,278 )
12,936

Total other income (expenses) – net

2,233

11,907(2,273 )18,387

INCOME BEFORE INCOME TAXES AND EQUITYIN NET INCOME OF AFFILIATED COMPANIES

7,246

10,792

4,359

59,667

INCOME TAXES (Note 16):
Current
Deferred

2,300
1,197

1,803
2,278

7,126
(5,673 )18,939
9,857

3,497

4,081

1,453

28,796

3,749

6,711

2,906

30,871

792

93

62

6,522

4,541

6,804

2,968

37,393

67

221

504

552

3,472

$
37,945(Continued)

NET SALES (Notes 6, 9 and 17)
OPERATING COSTS AND EXPENSES:
Cost of sales (Notes 6 and 11)
Selling, general and administrative expenses (Notes 9,10, 11 and 13)(Gain) loss on sales or disposal of property, plant andequipment – net
Impairment charges on property, plant and equipment(Note 20)
Impairment charges on goodwill (Notes 7 and 20)
Impairment charges on other intangible assets (Notes 7
and 20)Total operating costs and expenses
OPERATING INCOME (LOSS)OTHER INCOME (EXPENSES):Interest income (Note 6)
Interest expense
Dividend income (Note 6)(Loss) gain on sale, exchange and valuation ofmarketable securities and investments – net (Notes
3 and 20)
Other – net (Notes 9, 11, 15 and 21)

Total income taxes
INCOME BEFORE EQUITY IN NET INCOME OF
AFFILIATED COMPANIESEQUITY IN NET INCOME OF AFFILIATEDCOMPANIES (Note 6)
NET INCOME
NET LOSS ATTRIBUTABLE TONONCONTROLLING INTERESTSNET INCOME ATTRIBUTABLE TO WACOALHOLDINGS CORP.

¥
124

4,608

¥

7,025

¥

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Income
Years Ended March 31, 2022, 2021 and 2020

2022

Yen
2021

2020

U.S. Dollars(Note 2)2022

NET INCOME ATTRIBUTABLE TO WACOALHOLDINGS CORP. PER SHARE (Note 18):
Basic
Diluted¥ 74.04¥ 73.73¥ 112.57¥ 112.09¥ 54.26¥ 54.05$ 0.61$ 0.61NET INCOME ATTRIBUTABLE TO WACOALHOLDINGS CORP. PER AMERICAN DEPOSITARYRECEIPT (5 shares of common stock) (Note 18):
Basic
Diluted¥ 370.21¥ 368.65¥ 562.84¥ 560.47¥ 271.29¥ 270.25$ 3.05$ 3.04

See notes to consolidated financial statements.

(Concluded)
125

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Comprehensive Income
Years Ended March 31, 2022, 2021 and 2020

2020

Thousands of
U.S. Dollars(Note 2)
2022

6,804

¥ 2,968$ 37,393

6,032
(8 )

2,648

(2,532 )49,671
(66 )

6,024

2,648

(2,532 )49,605

1,190
174
1,364

2,838
753
3,591

125
960
1,085

9,799
1,433
11,232OTHER COMPREHENSIVE INCOME (LOSS)

7,388

6,239

(1,447 )

60,837COMPREHENSIVE INCOME

11,92913,043

1,521

98,230

(13 )

371

452

(107 )¥ 11,916¥ 13,414¥ 1,973$ 98,123

2022
NET INCOME¥

OTHER COMPREHENSIVE INCOME (LOSS), NET
OF TAX (Note 15):
Foreign currency translation adjustments:
Amounts arising during the year
Reclassification adjustments
Total foreign currency translation
adjustments
Pension liability adjustments:
Amounts arising during the year
Reclassification adjustments
Total pension liability adjustments

COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLETO NONCONTROLLING INTERESTSCOMPREHENSIVE INCOME ATTRIBUTABLE TOWACOAL HOLDINGS CORP.

See notes to consolidated financial statements.

126

Millions of Yen
2021

4,541

¥

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Equity
Years Ended March 31, 2022, 2021 and 2020

BALANCE, APRIL 1, 2019
Cumulative effects (net of tax) of adoption of new accounting standards(Note 1)
Net income
Foreign currency translation adjustments
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, ¥300 per 5 shares ofcommon stock
Cash dividends paid to noncontrolling interests
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stock
Share-based compensation granted (exercised) (Note 13)
Equity transactions with noncontrolling interests
BALANCE, MARCH 31, 2020
Net income
Foreign currency translation adjustments
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, ¥200 per 5 shares ofcommon stock
Cash dividends paid to noncontrolling interests
Purchase of treasury stock
Cancellation of treasury stock
Share-based compensation granted (exercised) (Note 13)
Equity transactions with noncontrolling interests
BALANCE, MARCH 31, 2021
Net income
Foreign currency translation adjustments
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, ¥200 per 5 shares ofcommon stock
Cash dividends paid to noncontrolling interests
Purchase of treasury stock
Disposal of treasury stock
Restricted stock compensation
Share-based compensation granted (exercised) (Note 13)
Equity transactions with noncontrolling interests
BALANCE, MARCH 31, 2022

Shares of
Outstanding
Common Stock(Thousands)
65,178

CommonStock

Additional
Paid-in
CapitalRetained
Earnings¥ 13,260¥ 29,807¥ 193,139

Millions of Yen
Accumulated
Other
TreasuryComprehensive
Stock,
Income (Loss)at Cost¥ (4,128 )¥ (15,584 )(515 )
3,472(2,584 )
1,085(4,907 )Total Wacoal
Holdings Corp.
Shareholders'EquityNoncontrolling
Interests

Total Equity¥ 216,494¥ 4,650¥ 221,144(515 )
3,472(2,584 )
1,085(504 )
52(515 )
2,968(2,532 )
1,085(4,907 )(237 )(2,798 )0
23

62,40329

13,26029,836(7,745 )
0
5,935
63

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

7,025
2,803
3,586
(2,496 )62,42124(740 )
13,26029,120

(1 )
8,404
52

(8,404 )(12 )181,346

71
116

71
116

205,371

4,077

209,448

7,025
2,803
3,586

(221 )(155 )
5

6,804
2,648
3,591

(81 )

(2,496 )
(81 )
(1 )

(2,496 )(0 )18(7,745 )0762(8,876 )

4,608
5,944
1,364
(2,498 )(1 )64(740 )(621 )

64(1,361 )215,612

3,004

218,616

4,608
5,944
1,364

(67 )
80

4,541
6,024
1,364

(2,498 )112(2,498 )(82 )(2,089 )
1
52
11
112

¥ 3,047¥ 226,052(82 )(1,001 )027
1161,458(2,089 )1
75
31(0[A1] )
(23 )
(20 )

¥ 13,260¥ 29,077¥ 183,456¥ 8,070¥ (10,858 )(4,907 )(237 )(7,745 )0(2,089 )152
11¥ 223,005(Continued)
127

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Equity
Years Ended March 31, 2022, 2021 and 2020

BALANCE, MARCH 31, 2021

CommonStock

Additional
Paid-in
CapitalRetained
Earnings$ 109,190$ 239,789$ 1,493,297

Net income
Foreign currency translation adjustments
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, $1.6 per 5 shares ofcommon stock
Cash dividends paid to noncontrolling interests
Purchase of treasury stock
Disposal of treasury stock
Restricted stock compensation
Share-based compensation granted (exercised) (Note 13)
Equity transactions with noncontrolling interests
BALANCE, MARCH 31, 2022

Thousands of U.S. Dollars (Note 2)
Accumulated
Total Wacoal
Other
Treasury
Holdings Corp.
Comprehensive
Stock,
Shareholders'
Income (Loss)at CostEquity$6,275$ (73,090 )37,94548,946
11,231(20,570 )Noncontrolling
Interests

Total Equity$ 1,775,461$ 24,736$ 1,800,197

37,94548,946
11,231(552 )
659

37,39349,605
11,231(20,570 )923(20,570 )(675 )(17,202 )
8
429
91
923

$ 25,091$ 1,861,430(675 )(17,202 )
8
618
256

(189 )(165 )$ 109,190$ 239,435$ 1,510,672$ 66,452$ (89,410 )(17,202 )8429
91$ 1,836,339

See notes to consolidated financial statements.

(Concluded)
128

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2022, 2021 and 2020

2022
OPERATING ACTIVITIES:Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Share-based compensation (Note 13)
Allowance for returns and doubtful receivables – net
Deferred income taxes(Gain) loss on sales or disposal of property, plant and equipment – net
Impairment charges on property, plant and equipment (Note 20)
Impairment charges on goodwill (Notes 7 and 20)
Impairment charges on other intangible assets (Notes 7 and 20)
Loss (gain) on sale, exchange and valuation of marketable securities and investments – net (Note 3)
Equity in net (income) loss of affiliated companies, less dividends received
Changes in assets and liabilities:(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories(Increase) decrease in return assets
Decrease (increase) in other current assets
Increase (decrease) in notes and accounts payable
Decrease in refund liabilities(Decrease) increase in liability for termination and retirement benefits(Decrease) increase in accrued expenses, income taxes payable and other current liabilities
Other
Net cash provided by operating activities

¥

4,541

Millions of Yen
2021

¥

6,185
63
(148 )
1,197(1,981 )211

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

6,804

2020

¥

2,968

Thousands of
U.S. Dollars(Note 2)2022$

37,393

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

50,931519(1,219 )9,857(16,313 )
1,737

641
(404 )

6,128
63(199 )
2,278(365 )
1,136
2,673
12
(10,390 )469(1,276 )(182 )
(55 )
3,853
2,015
(275 )(701 )(1,484 )
808
8,467

2,767
972
268
(2,632 )(859 )(379 )
226(4,485 )(227 )(2,544 )4,685(1,350 )312(29 )(373 )(837 )
776
665
197
10,357(10,507 )(1,499 )(453 )
31,728
16,593(2,264 )(5,772 )(12,220 )6,653
69,722(360 )
461
3,185
(4 )
225
2,760
(6,580 )(3,165 )(941 )
291
2,340
(7 )
742
889
(2,764 )(2,840 )(438 )
3,576
15,252(339 )
544
104(3,442 )(3,539 )(9,181 )(2,964 )3,796
26,227(33 )
1,853
22,727(54,183 )(26,062 )5,278(3,327 )(315 )
321
61(3,096 )FORWARD

¥

9,912

¥

43
(2,562 )

32
2,569

1,698

¥ 15,894

2,643
502(25,494 )$

81,621(Continued)
129

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2022, 2021 and 2020

2022
FORWARD
FINANCING ACTIVITIES:
Increase (decrease) in short-term bank loans withoriginal maturities of three months or less – net
Procurement of short-term loan (over 3 months)
Repayment of short-term loan (over 3 months)
Procurement of long-term debt
Repayments of long-term debt
Purchase of treasury stock
Proceeds from disposal of treasury stock
Disposal of treasury stock
Dividends paid on common stock
Dividends paid to noncontrolling interests
Proceeds from share issuance of noncontrollinginterests
Payments to acquire interests in subsidiaries fromnoncontrolling interests
Payments of contingent consideration (Note 7)
Net cash (used in) provided byfinancing activities

¥

9,912

¥ (10,460 )(20,000 )(35 )(2,089 )1(2,498 )(82 )Millions of Yen
2021
¥

1,698

¥ 17,208
20,424(424 )
1,447
(50 )
(1 )

(2,496 )
(81 )

112

2020

Thousands of
U.S. Dollars(Note 2)2022

¥ 15,894$

81,621¥$(86,134 )(4,645 )(164,690 )(53 )(7,745 )(288 )(17,202 )8

0(4,907 )(237 )(20,570 )(675 )

116

923(1,298 )(1,361 )(1,061 )(36,349 )

33,605(17,471 )(299,316 )EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS

862

349

(651 )

7,098

NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS(25,575 )

35,652(2,228 )(210,597 )CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR63,557

27,90530,133523,361¥ 37,982¥ 63,557¥ 27,905$ 312,764

¥ 72
8,643

¥ 20
4,758

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

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

62(2,331 )(10,688 )$511(19,195 )¥4,172
¥707

¥704

751

$5,822

See notes to consolidated financial statements.

(Concluded)130

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of Financial Statements – Wacoal Holdings Corp. (the "Company") and subsidiaries are predominantly
engaged in one industry, the manufacturing and sale of apparel, including foundation garments, lingerie,nightwear, and swimwear in Japan, the United States of America, Europe, and certain other countries in Asia.
The accompanying consolidated financial statements, stated in Japanese yen, have been prepared on the basisof accounting principles generally accepted in the United States of America ("U.S. GAAP").
Consolidation – The consolidated financial statements include the accounts of the Company and its majorityowned subsidiaries (collectively, the "Companies"). All intercompany transactions and balances have been
eliminated.
Some foreign subsidiaries of the Company have a fiscal year ending December 31. The accounts of thosesubsidiaries are included in the Company's consolidated financial statements based on the subsidiaries' fiscal
year end. Necessary adjustments have been made for significant events related to subsidiaries that occurred
during the period between their fiscal year ends and March 31.
Investments in affiliated companies where the Companies' ownership is 20% to 50% are accounted for using
the equity method.
Significant influence is generally deemed to exist if the Companies have an ownership interest in the voting
stock of the investee from 20% to 50%, although other factors are considered in determining whether theequity method of accounting is appropriate.
Use of Estimates – The preparation of consolidated financial statements in conformity with U.S. GAAP
requires management to make estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates.
The Companies reflected the impact of the COVID-19 outbreak in such estimates. The official views of when
the outbreak will be contained have not been announced by public institutions. The Companies are anticipatingthat COVID-19 will continue to have an impact on our business results until the year ending March 31, 2023,
and that our results for the year ending March 31, 2024 will recover to the level before the outbreak. The
Companies developed future business plans and used them for the estimates of impairment charges onproperty, plant and equipment, goodwill and other intangible assets based on this assumption.
The following is an item of which amount has been prepared using accounting estimates and recorded in the
consolidated financial statements for the current fiscal year that may have a material effect on the consolidated
financial statements for the next fiscal year.
Significant account estimate is valuation of goodwill arising from the acquisition of Wacoal Europe Ltd.
Millions of Yen
2022
2021
Goodwill¥9,932¥9,398To test for goodwill impairment, the carrying amount of each reporting unit is compared with its fair value. If
the carrying amount of a reporting unit exceeds its fair value, an impairment charge is recognized in an amountequal to that excess.

131Such assumptions include fluctuations in business activities, tax rates and risk-adjusted discount rates. There isa possibility that impairment charges would be recognized if the forecast of business results deteriorates or thetax rates or risk-adjusted discount rates increase.
See Note 20 for further information about measurement of fair value.
Cash and Cash Equivalents – Cash and cash equivalents include all highly liquid investments with original
maturities of three months or less.
Foreign Currency Translation – Assets and liabilities of foreign subsidiaries have been translated to Japanese
yen at period-end exchange rates and income and expenses have been translated using average exchange rates
for the period. Translation adjustments resulting from the process of translating consolidated financial
statements, net of tax, are included in accumulated other comprehensive income (loss), which is a separate
component of equity. Exchange gains and losses resulting from foreign currency transactions and theconversion of monetary assets and liabilities denominated in foreign currencies are included in other income(expenses) in the consolidated statements of income.
Foreign currency translation gains for the years ended March 31, 2022, 2021 and 2020 were ¥507 million,¥168 million and ¥36 million, respectively. They have been included in other – net of other income (expenses).
Marketable Securities and Investments – The Companies classify their marketable securities and investments
in debt securities into one of two categories: available-for-sale or held-to-maturity. Available-for-salesecurities are recorded at fair value with a corresponding recognition of unrealized holding gain or loss (net oftax) in accumulated other comprehensive (loss) income, which is a separate component of equity, until
realized. Held-to-maturity securities are measured at amortized cost. The Companies classify debt securities as
held-to-maturity only if the Companies have the positive intent and ability to hold those securities to maturity.
Gains and losses on sales of debt securities are computed based on cost determined using the average cost
method. The Company periodically determines whether any decline in the value of debt securities is
temporary, based on the period and extent of the decline, the issuer's financial position and prospects, and theintention to hold it for a sufficient period of expected recovery of fair value. If it is determined that the decline
is not temporary, the difference between the carrying amount and its fair value is recognized as a valuation
loss.
Equity securities are measured at fair value and unrealized holding gain or loss is recorded in net profit or loss.
Allowance for Doubtful Receivables – An allowance for doubtful notes and receivables is estimated based on
historical collection experience and additional information including current economic conditions and thecreditworthiness of each applicable customer.
Inventories – Inventories are stated at the lower of cost or net realizable value, cost being determined by the
first-in, first-out method for raw materials and the average cost method for work in process and finishedproducts. Cost includes net prices paid for materials purchased, production labor cost, factory overhead andcharges for customs duties.
Property, Plant and Equipment – Property, plant and equipment is stated at cost less impairment charges.
Property, plant and equipment are amortized over their estimated useful lives mainly using the straight-line
method. The estimated useful lives are as follows:
Buildings and structures

2 to 50 years (mainly 38 years)

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

2 to 20 years (mainly 5 years)

Depreciation expenses for the years ended March 31, 2022, 2021 and 2020 were ¥3,033 million, ¥3,139
million and ¥3,545 million, respectively.

132

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

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

133

As for lessee accounting, the Companies have leases for assets such as retail stores, warehouses, offices,
corporate housing, vehicles, machinery, and equipment, which are classified as an operating lease. The
Companies determine whether a contract is, or contains a lease at the inception of the contract. Options toextend or terminate the lease contracts are included in some of the contracts. The Companies take such options
into account in order to determine the lease term when it is probable that these options will be exercised. Someof the contracts contain variable lease payments. Most of the variable lease payments are for our retail stores,
which depend on their sales. Material residual value guarantees, and restriction or covenants imposed by leases
do not exist in the contracts.
Some of the contracts contain lease and non-lease components. Considerations in the contracts for which
underlying assets are land and buildings and structures are allocated based upon the estimated standalone
selling prices of the lease and non-lease components, which are accounted for separately. On the other hand,
the Companies elect the practical expedient and did not separate lease components from non-lease components
for leases for which underlying assets are machinery and equipment. The Companies use the incremental
borrowing rate based on the information available at commencement date to determine the present values oflease payments, unless the implicit rate is readily determinable. The Companies also elect the practical
expedient which allows entities to expense leases with a term of 12 months or less at the commencement dateas incurred. Operating lease cost is recognized on a straight-line basis over the lease term.
The Financial Accounting Standards Board ("FASB") guidance issued in April 2020 allows a lessee of a leasesubject to a rent concession occurring as a direct consequence of the COVID-19 pandemic to elect to apply asimplified accounting treatment. Under this guidance, the lessee may elect to apply the practical expedient andnot assess whether a COVID-19-related rent concession that meets certain prescribed conditions is a "leasemodification," as stipulated in Accounting Standard Codification 842, "Leases" ("ASC 842"). The Companies
have elected to apply this practical expedient for rent concessions that meet those certain prescribed conditions
referred to above and the rent concessions are accounted for as variable lease payments rather than being
treated as lease modifications.
Treasury Stock – The Companies account for treasury stock under the cost method and include treasury stock
as a component of equity.
Acquisitions – The Companies account for acquisitions using the acquisition method in accordance with theguidance for business combinations. The Companies allocate the purchase price to the assets acquired andliabilities assumed based on the estimated fair values at the date of acquisition, including intangible assets thatcan be identified and named. The purchase price in excess of the fair value of the net assets is recorded as
goodwill. In the case where the purchase price is below the fair value of the net assets, the Companies
recognize the excess of fair value of the net assets over the purchase price in earnings as a gain on bargain
purchase in the consolidated statements of income. The Companies measure contingent consideration
classified as liabilities at the fair value as of the date of acquisition and remeasure them to fair values at eachreporting date until the contingencies are resolved. Fluctuations of the fair values due to the remeasurement arerecognized in income or expenses as incurred.
Revenue Recognition – The Companies recognize revenue when control of promised products is transferred tocustomers and performance obligations are satisfied. The Companies' revenue is recognized for transactions,net of any trade discounts or rebates given. In addition, provision for expected returns is deducted fromrevenue based on historical return.
Shipping and Handling Costs – Shipping and handling costs are expensed as incurred.
Advertising Expenses – Advertising costs are expensed as incurred. Advertising expenses for the years ended
March 31, 2022, 2021 and 2020 were ¥15,389 million, ¥11,239 million and ¥13,169 million, respectively, andhave been included in selling, general and administrative expenses.
Research and Development Costs – Research and development costs are expensed as incurred. Research anddevelopment costs for the years ended March 31, 2022, 2021 and 2020 were ¥446 million, ¥463 million and¥508 million, respectively, and have been included in selling, general and administrative expenses.

134

Income Taxes – The provision for income taxes is determined under the asset and liability method in
accordance with the guidance for income taxes. Under this method, deferred tax assets and liabilities are
determined for temporary differences between the carrying amounts of assets and liabilities in the financial
statements and tax bases of assets and liabilities and tax loss carryforwards at presently enacted tax rates. A
valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax
assets will not be realized in the future.
The Companies assess their income tax positions and record tax benefits for all years subject to examination
based upon their evaluation of the facts, circumstances and information available as of the end of the fiscal
year. For those tax positions only where there is greater than a 50% likelihood that the tax position will besustained, the Companies record the largest amount of tax benefit that may potentially be realized uponultimate settlement with a taxing authority that has full knowledge of all relevant information. Interest andpenalties related to income taxes are included in the consolidated statements of income.
Share-Based Compensation – Share-based compensation is accounted for in accordance with ASC 718,
"Compensation – Stock Compensation." The Company measures share-based compensation cost at the grantdate, based on the fair value of the award and recognizes the cost over the requisite service period, which is thevesting period.
Derivatives – Derivative instruments, including certain derivative instruments embedded in other contracts, areaccounted for in accordance with the guidance for derivatives and hedging. Because such derivative
instruments are not designated as hedges, changes in the fair value of the derivatives are recorded in earnings
or losses.
Government Grant – Government grants are recognized when there is reasonable assurance that theCompanies will comply with the conditions attached to the grant and that the grant will be received.
Government grants are recognized as reductions from operating costs and expenses. The amounts of reductions
from cost of sales and selling, general and administrative expenses for the years ended March 31, 2022 and2021 were as follows.
Millions of Yen
2022
2021
Cost of sales
Selling, general and administrative expenses

¥ 31
404

¥ 1,049
2,922

Subsequent Events – In accordance with the guidance for subsequent events, the Company has evaluatedsubsequent events through June 29, 2022.
Reclassifications – Certain reclassifications have been made to the prior years' consolidated financial
statements to conform to the current year's presentation.
Recent Accounting Pronouncements:
Recent Accounting Guidance Not Yet Adopted
Measurement of Credit Losses on Financial Instruments – In June 2016, the FASB issued new accounting
guidance related to measurement of credit losses on financial instruments. This guidance introduces a new
impairment model based on expected losses rather than incurred losses. Using this model will result in more
timely recognition of losses than under the current incurred approach. In November 2019, the FASB issued
additional guidance related to the change in the effective date of the above guidance. As a result, the guidanceis effective for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years.
The Company is currently evaluating the impact of adoption on the Company's consolidated financial position,
results of operations or cash flows.

135

2.

TRANSLATION INTO U.S. DOLLAR STATEMENTS
The consolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and operates. The translation of Japanese yen amounts into U.S. dollar amounts is
included solely for the convenience of readers outside of Japan and has been made at the rate of ¥121.44 to $1,
the noon buying rate for yen in New York City as of March 31, 2022. Such translation should not be construed
as representations that the Japanese yen amounts could be converted into U.S. dollars at the above or any other
rate.

3.

MARKETABLE SECURITIES AND INVESTMENTS
Debt Securities – There were no debt securities as of March 31, 2022. The fair value of debt securities is basedon quoted market prices as of March 31, 2021. The cost, gross unrealized gain and loss and the fair value bymajor security type were as follows:

2021

Cost

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

Millions of Yen
Gross
Gross
Unrealized
Unrealized
Gain
Loss

¥2

Fair Value¥224

There were no debt securities that have been in a continuous unrealized loss position as of March 31, 2021.
The Companies periodically determine whether a decline in the fair value of debt securities is deemed to beother than temporary based on criteria that include the duration of the market decline, the extent to which costexceeds fair value, the financial position and business outlook of the issuer, and the intent and ability of theCompanies to retain the impaired held-to-maturity securities for a sufficient period of time for anticipated
recovery in fair value.
Equity Securities – Realized and unrealized gains and losses on equity securities during the years ended
March 31, 2022, 2021 and 2020, were as follows:

2022
Realized gains recognized during the period on equity securities
sold during the period
Unrealized (losses) gains recognized during the period on equity
securities still held at March 31
Net (losses) gains recognized during the period on equity
securities

136

¥ 196

Millions of Yen
2021

¥

2020

91

¥ 1,620(837 )

10,299(5,380 )¥ (641 )¥ 10,390¥ (3,760 )4.

ALLOWANCES FOR DOUBTFUL RECEIVABLES
Information related to the Companies' allowance for doubtful receivables as of March 31, 2022, 2021 and 2020
was as follows:

5.

2022

Millions of Yen
2021

2020

Balance at the beginning of the year
Charged to expenses
Balances written-off/reversed

¥ 346
40
(104 )¥ 489
33(176 )

¥ 229
270
(10 )

Balance at the end of the year

¥ 282

¥ 346

¥ 489

INVENTORIESThe components of inventories as of March 31, 2022 and 2021 were as follows:
Millions of Yen
2022
2021

6.

Finished products
Work in process
Raw materials¥ 37,634
4,077
3,557

¥ 37,217
3,748
2,285

Total

¥ 45,268¥ 43,250

INVESTMENTS IN AFFILIATED COMPANIES
Certain investments are accounted for using the equity method if the Companies have the ability to exercise
significant influence over an investee. Significant influence is generally deemed to exist if the Companies havean ownership interest in the voting stock of the investee between 20% and 50%, although other factors are
considered in determining whether the equity method of accounting is appropriate. The Companies record
investments in equity method investees meeting these characteristics as "Investments in affiliated companies."
Under the equity method, the Companies record their proportionate share of an affiliated company's income orloss based on the most recently available financial statements.
The primary affiliated companies and percentage of ownership as of March 31, 2022 and 2021 were as
follows:
Percentage of Ownership (%)
2022
2021

Name of Investee
Shinyoung Wacoal Inc.
Taiwan Wacoal Co., Ltd.
Thai Wacoal Public Co., Ltd.
PT. Indonesia Wacoal
House of Rose Co., Ltd.

25
50
34
42
21

25
50
34
42
21

Aggregate carrying amounts and fair values of investments in affiliated companies which have a quoted
market price as of March 31, 2022 and 2021 were as follows:
Millions of Yen
2022
2021
Carrying amount
Aggregate value of quoted market price¥14,304
10,189137¥13,652
10,034

The affiliated companies' balance sheets and statements of income as of and for the years ended March 31,
2022 and 2021 were not disclosed as they were immaterial.
The balance of receivables and payables to affiliated companies as of March 31, 2022 and 2021 were as
follows:
Millions of Yen
2022
2021
Accounts receivable
Accounts payable
Other receivable
Long-term loan

¥429
634
200

¥372
501
173
315

The amounts of transaction with affiliated companies for the years ended March 31, 2022, 2021 and 2020 were
follows:

Sales
Cost of sales corresponding to sales of material and products
Purchases
Royalties
Interest income

2022

Millions of Yen
2021¥ 1,478
1,480
4,353
236
3

¥ 1,636
1,751
3,681
203
3

2020
¥ 2,838
2,826
5,302
330

Dividends received from affiliated companies were ¥390 million, ¥602 million and ¥542 million for the years
ended March 31, 2022, 2021 and 2020, respectively.
7.

GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill – Changes in the carrying amount of goodwill by operating segments for the years ended March 31,
2022, 2021 and 2020 were as follows:
Millions of Yen
Wacoal Business (Overseas)
2022
2021
2020
Balance at the beginning of the year:
Acquisition cost
Accumulated impairment charges
Carrying amount
Acquisition during the year
Impairment charges
Foreign currency translation adjustments
Balance at the end of the year:
Acquisition cost
Accumulated impairment charges¥ 24,103(2,934 )21,169Carrying amount¥ 22,371¥ 11,954

22,371

1,776(2,673 )1,471

11,954
11,551(217 )(917 )

26,046(3,101 )24,103(2,934 )22,594(223 )¥ 22,945¥ 21,169¥ 22,371

The Company did not record any impairment charges on goodwill in the year ended March 31, 2022. The
Company recorded impairment charges on goodwill of ¥2,673 million for the Wacoal Europe Ltd. in the year
ended March 31, 2021, which was included in operating costs and expenses of Wacoal Business (Overseas).
The Company recorded impairment charges on goodwill of ¥217 million for the G Tech Material Co., LTD.
("G Tech") in the year ended March 31, 2020, which was included in operating costs and expenses of Wacoal
Business (Overseas). See Note 20 for further information about measurement of fair value.

138

Other Intangible Assets – The components of intangible assets excluding goodwill as of March 31, 2022 and2021 were as follows:Year Ended March 31
Amortized intangible assets:
BrandsSoftware
OthersTotal
Unamortized intangible assets:
Trademarks
Other
Total

Gross
Carrying
Amount¥7,958
19,793
2,751

Millions of Yen
2022
Accumulated
Amortization
Grossand Impairment
Carrying
ChargesAmount¥3,339
10,732
1,560

¥

7,479
17,9102,544

2021
Accumulated
Amortization
and Impairment
Charges

¥

2,748
9,273
1,256

¥ 30,502¥ 15,631¥ 27,933¥ 13,277¥ 5,31648¥ 4,827¥ 5,31675¥ 4,827¥ 5,364¥ 4,827¥ 5,391¥ 4,827

Other intangible assets acquired during the years ended March 31, 2022 and 2021 totaled ¥3,081 and ¥3,073
million, which primarily consist of software. Estimated useful life for software is five years.
During the year ended March 31, 2022, the Companies did not record any impairment charges on otherintangible assets. During the year ended March 31, 2021, the Companies recorded impairment charges onsoftware of Taiwan Peach John of ¥12 million, which was included in operating costs and expenses of thePeach John Business. During the year ended March 31, 2020, the Companies recorded impairment charges on
the trademark of Peach John of ¥191 million, which was included in operating costs and expenses of the PeachJohn Business. During the year ended March 31, 2020, the Companies also recorded ¥65 million of
impairment charges on software of the A Tech Textile Co., LTD. ("A Tech"), which was included in operating
expenses of the Wacoal Business (Overseas). See Note 20 for further information about measurement of fairvalue.
Aggregate amortization expenses for the years ended March 31, 2022, 2021 and 2020 related to otherintangible assets were ¥3,152 million, ¥2,989 million and ¥2,484 million, respectively. Future estimatedamortization expenses as of March 31, 2022 were as follows:
Millions of
Yen

Year Ending March 31
Estimated amortization expense
2023
2024
2025
2026
2027

¥

Total

3,114
2,983
2,373
1,626
1,252

¥ 11,348

139

8.

SHORT-TERM BANK LOANS AND LONG-TERM DEBT
Short-term bank loans as of March 31, 2022 and 2021 consisted of the following:
Millions of Yen
2022
2021
Unsecured bank loans¥10,227¥40,672

The weighted-average annual interest rates on short-term bank loans as of March 31, 2022 and 2021 were
0.2%.
Unused lines of credit for short-term financing as of March 31, 2022 and 2021 aggregated to ¥46,640 millionand ¥37,614 million, respectively.
Long-term debt as of March 31, 2022 and 2021 was summarized below. The interest rates and maturities were
for loans as of March 31, 2022.
Millions of Yen
2022
2021
Collateralized bank loans
Unsecured bank loans, with fixed interest at 0.0 ~ 1.8%,
maturing through 2026
Total
Less current portion of long-term portionLong-term debt, less current portion¥

15¥ 1,626
1,626

1,518
1,533
(35 )

¥ 1,626¥ 1,498

The annual maturities of long-term debt as of March 31, 2022 were as follows:
Millions of
Yen

Year Ending March 31
2023
2024
2025
2026

¥ 1,626

Total¥1,626A subsidiary has pledged assets as security for loans. As of March 31, 2022 and 2021, assets pledged ascollateral for bank loans were as follows:
Millions of Yen
2022
2021
Land
Buildings

¥

¥ 150
124

Total

¥

¥ 274

As is customary in Japan, both short-term and long-term loans are made under general agreements which
provide for security and guarantees for future and present indebtedness to be given upon request of the bank.
The bank has the right to offset cash deposits against obligations that have come due or, in the event of default,
against all obligations due to the bank.

140

9.

LEASES
Lessor Accounting
Operating lease income for the years ended March 31, 2022 and 2021 was as follows. Lease income wasincluded in net sales and other net income.

Operating lease income

2022

Millions of Yen
2021

2020

¥1,865¥1,741¥2,392

The acquisition costs of equipment leased to customers under operating leases were ¥2,697 million and ¥2,756
million of land and ¥689 million and ¥513 million of building and building improvements as of March 31,
2022 and 2021. Accumulated depreciation on building and building improvements were ¥547 million and¥416 million as of March 31, 2022 and 2021. These are included in net property, plant and equipment.
Future minimum lease income classified as operating leases as of March 31, 2022 were as follows. Note thatlease payments related to mannequins and display furniture which were mainly part of the Companies' lease
income were not included in the below table because the contracts terms were not material.
Millions of
Yen

Year Ending March 31
2023
2024
2025
2026
2027
Thereafter

¥

236
188
128
86
76
1,076

Total

¥ 1,790

Lessee Accounting
Operating lease costs for the years ended March 31, 2022 and 2021 were as follows. Lease expenses were
included in cost of sales and selling, general and administrative expenses.
Gain recognized as a result of not being treated as lease modifications were ¥113 million and ¥550 million forthe years ended March 31, 2022 and 2021. These are reduced from variable lease cost.

2022

Millions of Yen
2021

2020

Operating lease costs
Short-term lease costs
Variable lease costs¥ 5,067603
888¥ 5,121535
424¥ 4,945
635
1,295

Total

¥ 6,558¥ 6,080¥ 6,875141

Supplemental cash flow information related to operating leases for the years ended March 31, 2022 and 2021
was as follows.

Cash paid for amounts included in the measurement of leaseliabilities
Noncash activities concerning right-of-use assets obtained in
exchange for new operating lease liabilities

2022

Millions of Yen
2021

2020

¥ 4,937¥ 4,542¥ 4,798

4,378

4,523

5,483

Weighted-average remaining lease term and discount rate for operating leases were as follows:

Weighted-average remaining lease term
Weighted-average discount rate

2022

2021

54.1 months
1.6%

60.1 months
1.7%

Future minimum lease payments classified as operating leases as of March 31, 2022 were as follows:
Millions of
Yen

Year Ending March 31
2023
2024
2025
2026
2027
Thereafter¥

Total minimum lease payments
Less interest cost

4,725
2,936
1,785
1,101
862
1,915
13,324(625 )

Total lease liabilities¥ 12,699

Any material leases commenced after April 1, 2022 were not recognized as of March 31, 2022.
10.

ASSET RETIREMENT OBLIGATIONSThe Companies recorded the fair value of asset retirement obligations in order to recognize legal obligations
associated with the removal of leasehold improvements from leased facilities and return of the property to a
specified condition when the lease terminates.
A reconciliation of the beginning and ending aggregate carrying amount of the asset retirement obligation is asfollows:

2022

Millions of Yen
2021

2020

Balance at the beginning of the year
Accretion expense
Liabilities incurred
Liabilities settled
Change due to foreign currency translation

¥ 826
0
53
(54 )
7

¥ 827
3
38
(41 )
(1 )

¥ 813
3
63
(52 )
0

Balance at the end of the year

¥ 832

¥ 826

¥ 827

142

11.

TERMINATION AND RETIREMENT PLANS
Employee Retirement Plans – Certain subsidiaries of the Company sponsor termination and retirement benefit
plans that cover substantially all employees. Benefits are based on the employee's years of service, position,and performance. If the termination is involuntary or caused by death, the employee is usually entitled togreater payments than in the case of voluntary termination.
Certain subsidiaries of the Company have contributory defined retirement benefit plans and several unfunded
termination plans administered by certain subsidiaries of the Company. Benefits under the contributory
defined retirement benefit plan are usually paid in a lump sum at the earlier of termination or retirement,
although periodic payments are available under certain conditions. Benefits under the other termination andretirement benefit plan are paid either as lump sum payments or periodic payments under certain conditions.
The benefits are usually paid as a lump sum payment, if the employee resigns before the mandatory retirement
age.
Contributory Defined Retirement Benefit Plan – The following provides a reconciliation of benefit
obligations, plan assets and funded status of the plans:2022

Millions of Yen
2021

2020

Change in benefit obligations:Benefit obligations at the beginning of the year
Service cost
Interest cost
Participants' contributions
Actuarial (gain) loss
Loss based on prior service benefits
Benefits paid from plan assets
Settlement paid from plan assets
Settlement paid by the Company and certain subsidiaries
Changes in foreign currency exchange rates
Benefit obligations at the end of the year

¥ 35,767
1,064
193
58
(955 )
1,432(937 )(1,142 )(409 )
26
35,097¥ 37,674
1,109
180
59
(902 )(950 )(1,097 )(301 )(5 )35,767¥ 38,681
1,243
176
60
(217 )
253(961 )(1,275 )(289 )
3
37,674

Change in plan assets:
Fair value of plan assets at the beginning of the year
Actual return on plan assets
Employer contributions
Participants' contributions
Benefit payments
Settlement payments
Changes in foreign currency exchange rates
Fair value of plan assets at the end of the year

¥ 43,215
3,270
597
58
(937 )(1,142 )(1 )45,060¥ 40,464
4,121
594
59
(950 )(1,097 )24
43,215¥ 40,680
1,375
579
60
(961 )(1,275 )640,464

Funded status at the end of the year

¥

¥

¥

9,963

7,448

Amounts recognized in the consolidated balance sheets as of March 31, 2022 and 2021 consist of:Millions of Yen
2022
2021
Prepaid pension expense
Other current liabilities
Liability for termination and retirement benefits¥ 13,411(103 )(3,345 )¥ 9,533(143 )(1,942 )Total¥¥ 7,448

143

9,963

2,790

Amounts recognized in accumulated other comprehensive income, as of March 31, 2022 and 2021 were as
follows:
Millions of Yen
2022
2021
Actuarial loss
Prior service cost

¥ 3,002(1,611 )¥ (164 )(232 )

Total¥ 1,391¥ (396 )The accumulated benefit obligation for all defined retirement benefit plans as of March 31, 2022 and 2021 was
as follows:
Millions of Yen
2022
2021
Accumulated benefit obligations¥34,995¥35,658

The projected benefit obligations and the fair value of the plan assets for certain subsidiaries of the Company
with projected benefit obligations in excess of the fair value of plan assets, and the accumulated benefit
obligations and the fair value of the plan assets for certain subsidiaries' pension plans with accumulated benefit
obligations in excess of the fair value of plan assets as of March 31, 2022 and 2021 were as follows:
Millions of Yen
2022
2021
Plans with projected benefit obligations in excess of plan
assets:
Projected benefit obligations
Fair value of plan assets
Plans with accumulated benefit obligations in excess of the fairvalue of plan assets:
Accumulated benefit obligations
Fair value of plan assets¥ 3,978627¥ 2,971
735

3,978
627

2,971
735

Net periodic benefit costs for plans of certain subsidiaries of the Company consisted of the following for theyears ended March 31, 2022, 2021 and 2020:

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss (gain)
Amortization of prior service benefits

2022

Millions of Yen
2021¥ 1,064193(1,096 )37
53¥ 1,109180(1,015 )876
21¥ 1,243
176(1,006 )1,186¥¥ 1,171¥ 1,599

251

2020

The unrecognized net actuarial gain or loss and prior service benefits are amortized within 11 years (theaverage remaining service life of active participants) using the declining-balance method and the straight-line
method, respectively.

144

Other changes in plan assets and benefit obligations recognized in other comprehensive income for the years
ended March 31, 2022, 2021 and 2020 were as follows:

2022
Actuarial gain (loss)
Amortization of actuarial loss (gain)
Prior service benefits
Amortization of prior service benefits

Millions of Yen
2021¥ 3,12937(1,432 )53¥ 4,008876¥ 1,787¥ 4,905

2020
¥

586
1,186
(253 )

21¥ 1,519

Certain subsidiaries of the Company use a measurement date of March 31 for their plans. The weightedaverage assumptions used as of March 31, 2022 and 2021 in computing the benefit obligations shown above
were as follows:

Discount rate
Expected revaluation rate for cash balance plan

2022

2021

0.7 %
0.9 %

0.6 %
0.9 %

The weighted-average assumptions used as of March 31, 2022, 2021 and 2020 in computing the net periodic
benefit costs shown above were as follows:

Discount rate
Rate of increase in future compensation
Expected long-term rate of return on plan assets
Expected revaluation rate for cash balance plan

2022

2021

2020

0.6 %
5.3 %
2.5 %
0.9 %

0.5 %
5.3 %
2.5 %
0.9 %

0.5 %
5.3 %
2.5 %
0.9 %

Certain subsidiaries of the Company approach to establishing the discount rate is based upon corporate bondindices. The discount rate assumption is based upon effective yields as of March 31, 2022 on the corporatebond indices for which maturity dates approximate the timing of the expected future benefit payments.
The retirement benefit plan of certain subsidiaries of the Company is a point-based benefits system, and,
therefore, the rate of compensation increase has not been included in computing the benefit obligations.
The expected long-term rate of return on plan assets is derived proportionally from return assumptions
determined for each of the major asset classes. The return expectations for each of the asset classes are basedlargely on assumptions about economic growth and inflation, which are supported by long-term historical data.
The estimated long-term rate of return is based on an asset allocation of equity securities of 26.0%, debt
securities of 54.0%, life insurance company general accounts of 18.0% and other short-term investments of
2.0%.
The plan investment strategy of certain subsidiaries of the Company is to maintain actual asset weightings
within a preset range of target allocations. The plan investment strategy of certain subsidiaries of the Company
is broadly diversified, consisting primarily of equity and debt securities. Certain subsidiaries of the Company
believe these ranges represent an appropriate risk profile for the planned benefit payments of the plans basedon the timing of the estimated benefit payments.

145

The asset allocation as of March 31, 2022 and 2021 was as follows:

Equity securities
Debt securities
Life insurance company general accounts
Real estate
Other short-term investments

2022

2021

49.4 %
28.0 %
4.9 %7.0 %10.7 %

48.8 %
28.6 %
7.5 %
6.5 %
8.6 %

The target allocation percentages are reviewed and approved by the Pension Committee. The actual allocationsfor 2022 and 2021 are different from the target allocation percentages primarily because Wacoal Corp.
maintained additional equity securities within a separate plan asset which is assigned to the plan based on anagreement between Wacoal Corp. and its employees and is not governed by the Pension Committee. As such,the actual allocation percentage of equity securities to the total plan assets is higher than the target allocation
and, similarly, the actual allocation for some other types of assets is lower than the target allocation.
A change of 0.5% in the discount rate and the expected long-term rate of return on plan assets as of and for theyears ended March 31, 2022 and 2021 would have the following effects:

2022
Discount rate: 0.5% decrease
Discount rate: 0.5% increase
Expected long-term rate of return on plan
assets: 0.5% decrease
Expected long-term rate of return on plan
assets: 0.5% increase

2021
Discount rate: 0.5% decrease
Discount rate: 0.5% increase
Expected long-term rate of return on plan
assets: 0.5% decrease
Expected long-term rate of return on plan
assets: 0.5% increase

Millions of yen
Effect on Net Periodic
Effect on
Benefit Costs
Benefit Obligation
an increase of 194
a decrease of 204

an increase of 1,416
a decrease of 1,507

an increase of 148-

a decrease of 152-

Millions of yen
Effect on Net Periodic
Effect on
Benefit Costs
Benefit Obligation
an increase of 236
a decrease of 191

an increase of 1,803
a decrease of 1,652

an increase of 233-

a decrease of 67-

146

The following tables present the plan assets of certain subsidiaries of the Company using the fair value
hierarchy as of March 31, 2022 and 2021. The fair value hierarchy has three levels based on the reliability of
the inputs used to determine the fair value. For references to each level, see Note 20.

2022

Level 1

Assets evaluated by other than net asset value
per share
Equity securities:
Japanese companies
Debt securities:
Corporate bonds
Foreign government bonds
Life insurance company general accounts
Other types of investments:
Other short-term investments
Assets evaluated by net asset value per share (a)Equity securities:
Pooled funds (b)Debt securities:
Pooled funds (c)Other types of investments:
Hedge funds (d)Pooled funds (e)
Total

2021
Assets evaluated by other than net asset value
per share
Equity securities:
Japanese companies
Debt securities:
Corporate bonds
Foreign government bonds
Life insurance company general accounts
Other types of investments:
Other short-term investments
Assets evaluated by net asset value per share (a)Equity securities:
Pooled funds (b)Debt securities:
Pooled funds (c)Other types of investments:
Hedge funds (d)Pooled funds (e)TotalMillions of Yen
Level 2
Level 3

¥ 13,122

Total¥ 13,122
¥

45
2,200

45
172
2,200

1,909

1,909

172

5,031
7,496
3,512
11,573¥ 13,294¥ 4,154

Level 1Millions of Yen
Level 2
Level 3

¥ 10,934¥ 45,060

Total¥ 10,934
¥

81
3,255

81
112
3,255

1,828

1,828

112

7,084
7,526
3,671
8,724
¥ 11,046¥ 5,164¥ 43,215(a) Certain assets evaluated by net asset value per share (or its equivalent) are not categorized in the fairvalue hierarchy. Total amounts in the above table are presented to reconcile the amounts in the fairvalue hierarchy to the amounts stated on the consolidated balance sheets.

147

(b) This class includes common stock of approximately 34% Japanese companies and 66% foreigncompanies as of March 31, 2022 and 51% and 49%, respectively, as of March 31, 2021.
(c) This class includes approximately 82% of foreign government bonds and 13% of corporate bonds
investments and 5% other short-term investments as of March 31, 2022. This class includes
approximately 89% of foreign government bonds and 11% of corporate bonds investments as ofMarch 31, 2021.
(d) This class consists of hedge funds that invest in both securities and equity securities as of March 31,
2022 and 2021.
(e) This class includes approximately 17% corporate bonds, 1% common stock of Japanese companies,
30% common stock of foreign companies, 27% real estate and 25% other short-term investments as ofMarch 31, 2022. This class includes approximately 22% corporate bonds, 1% common stock ofJapanese companies, 24% common stock of foreign companies, 32% real estate and 21% other shortterm investments as of March 31, 2021.
Equity securities and debt securities presented in Level 1 are primarily valued using a market approach basedon the quoted market prices of identical instruments. Life insurance company general accounts categorized in
Level 2 include contracts with insurance companies with guaranteed rates of return and capital, and thosevalues are based on the sum of principal amount and return. Pooled funds are valued using the net asset value
per share provided by the administrator of the fund.
The funding policy for the funded plans of certain subsidiaries of the Company is to contribute amounts
computed in accordance with actuarial methods accepted by Japanese tax law. Certain subsidiaries of theCompany expect to contribute ¥582 million to their plans in the year ending March 31, 2023.
The following benefit payments, which reflect expected future services, are expected to be paid:
Millions of
Yen

Year Ending March 31
2023
2024
2025
2026
2027
Thereafter

¥

2,478
2,159
2,248
2,265
2,234
10,978

Defined Contribution Plan – Certain subsidiaries of the Company have defined contribution plans. The
amounts of cost recognized for their contributions to the plan were ¥435 million, ¥327 million and ¥407
million for the years ended March 31, 2022, 2021 and 2020, respectively.
Termination Plan for Directors – The Company previously had, and certain subsidiaries of the Company
currently have, termination plans for directors. Payment of termination benefits to directors is made in a lumpsum upon termination and requires the approval of the shareholders before payment. In June 2005, theCompany rescinded its termination plan for directors upon the approval of its shareholders. The amount ofbenefits for each individual was fixed as of June 29, 2005 and will remain frozen until the retirement of each
respective director. Outstanding liabilities of ¥337 million and ¥346 million as of March 31, 2022 and 2021,
respectively, were recorded in other payables as of March 31, 2022 and in other long-term liabilities as ofMarch 2021. A certain subsidiary has plans for its directors and recorded a liability for termination benefits for
directors at the amount that would be needed if all directors were to resign at each balance sheet date inaccordance with the guidance for determination of vested benefit obligations for a defined benefit pension
plan.

148

12.

COMMITMENT AND CONTINGENT LIABILITIESThe Company entered into a construction supervision and construction contract in the amount of ¥4,290
million on March 16, 2020, in connection with a new logistics center that will be built next to the Moriyama
Distribution Center in Moriyama, Shiga.
The Company had contractual obligations of ¥3,390 million as of March 31, 2021. The Company omitted thebalance of the contractual obligations as of March 31, 2022 because the outstanding of the contractual
obligations related to the new logistics center in Moriyama will be paid within one year.

13.

SHARE-BASED COMPENSATION
Annual stock option plan
The Company had been adopted an annual stock option until the 73rd ordinary general meeting ofshareholders held on June 29, 2021. Under the stock option plan, the Company granted shares of its common
stock to directors of the Company, excluding outside directors and directors of the Company's wholly-owned
subsidiary, Wacoal Corp., in the years ended March 31, 2021 and 2020. The Company believes that suchawards better align the interests of its directors with those of its shareholders by sharing both risk and returnfrom fluctuations in stock prices and giving motivation to enhance corporate value. Each stock option is
exercisable to acquire 100 shares of the Company's common stock at ¥1 per share (for stock option granted
prior to September 1, 2017, it is exercisable to acquire 500 shares of the Company's common stock). The
compensation cost is measured at fair value on the grant date. Options vest over one year in proportion to theservices rendered by the directors, and are exercisable from the day after the date of retirement up to (i) 20
years from the grant date or (ii) 5 years from the day after the date of retirement, whichever is earlier.
The fair value of the options granted in the year ended March 31, 2021 was estimated by using the BlackScholes option-pricing model with the following assumptions.
Expected dividend yield is based on the actual payout of dividends in the last fiscal year and the closing priceof the Company's common stock on the grant date. Expected volatility is based on the historical volatility of
the Company's share price over the most recent period commensurate with the expected term of the Company's
stock options. The risk-free interest rate is based on the Japanese government bond yield curve in effect at thetime of grant for a period commensurate with the expected term of the Company's share options. The expected
term of options granted is based on the average remaining service period of directors, assuming that those whoare granted options will render service until the stated retirement and they will exercise options immediately
after their retirement.

Expected dividend yield
Expected volatility
Risk-free interest rate
Expected term

2021

2020

3.0%
23.6%
(0.2)%
3.6 years

2.6%
25.0%
(0.2)%
4.0 years

149A summary of stock option activities under the plan for the years ended March 31, 2022 and 2021 was asfollows:

Yen

Outstanding as of April 1, 2021
GrantedExercised
Outstanding as of March 31, 2022
Exercisable as of March 31, 2022

Shares

WeightedAverage
ExercisePrice273,100¥1

11,200261,900
30,8001
1
1

Yen

Outstanding as of April 1, 2020
GrantedExercised
Outstanding as of March 31, 2021
Exercisable as of March 31, 2021

Millionsof YenYears
WeightedAverage
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

12.21 years
3.84 years¥482
57
Millionsof YenShares

WeightedAverage
Exercise
Price

Years
WeightedAverage
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

255,900
35,70018,500273,100
18,300¥1
1
1
1
113.61 years
2.84 years

¥670
45

The total intrinsic value of options exercised was ¥27 million, ¥41 million and ¥62 million as of the years
ended March 31, 2022, 2021 and 2020, respectively.
The total compensation costs recognized for the years ended March 31, 2022, 2021 and 2020 were ¥11
million, ¥63 million and ¥71 million, respectively. The total recognized tax benefits related thereto for theyears ended March 31, 2022, 2021 and 2020 were ¥3 million, ¥19 million and ¥22 million, respectively.
The weighted-average grant date fair values of options granted for the years ended March 31, 2021 and 2020
were, ¥1,768 and ¥2,516, respectively.
Restricted stock compensation plan
The Company has newly introduced the restricted stock compensation plan, which the Company granted
shares of its common stock to Directors (excluding Outside Directors) of the Company, and Directors of theCompany's wholly-owned subsidiary, Wacoal Corp.(hereinafter referred to as "Eligible Directors"). The
Company believes that such awards better align the interests of the Eligible Directors with those of its
shareholders by sharing of price fluctuation risk with our shareholders and increasing incentives to contributeto the improvement of share price and corporate value.

150

This plan has adopted instead of the previous plan, annual stock option plan, and the Company annually grants
shares of its common stock to the Eligible Directors. The amount of compensation claims is determined withthe comprehensive consideration of various factors including each Eligible Director's degree of contribution to
the Company. With regard to the allotted restricted stocks (hereinafter referred to as "Allotted Shares"), theCompany entered into the restricted stock allotment agreement with the Eligible Directors and the agreement
says that each Eligible Directors is prohibited to transfer Allotted Shares to a third party, pledge them,mortgage them, or use any arrangement to dispose them, and that the Company can acquire Allotted Shares
without any compensation on certain conditions and so on during the period from the date the Allotted Sharesare granted until the date such Eligible Director retires from the position of Director, Auditor or executive
officer of the Company or any of its subsidiaries as designated by the Board of Directors of the Company.
A summary of restricted stock under the plan for the year ended March 31, 2022 was as follows:

Number of Shares

The Weighted-Average
Grant Date Fair Values

26,8002,572

26,8002,572

Outstanding as of April 1, 2021
GrantedRemovedPurchased
Outstanding as of March 31, 2022
(Note)

Fair value is measured based on the closing price of the Company's common stock on theTokyo Stock Exchange as of the previous business day of the resolution date of the Board of
Directors.

The total compensation costs and deferred tax recognized as selling, general and administrative expenses forthe year ended March 31, 2022 was ¥52 million and ¥16 million, respectively.
14.

EQUITYJapanese companies are subject to the Companies Act of Japan (the "Companies Act"). The significant
provisions in the Companies Act that affect financial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to
the year-end dividend upon resolution at the shareholders' meeting. Additionally, for companies that meetcertain criteria including (1) having a Board of Directors, (2) having independent auditors, (3) having an
Audit and Supervisory Board, and (4) the term of service of the directors being prescribed as one year
rather than the normal two-year term by its articles of incorporation, the Board of Directors may declare
dividends (except for dividends-in-kind) at any time during the fiscal year if the company has prescribedso in its articles of incorporation. The Company meets all the above criteria and, accordingly, the Boardof Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal year.
The Companies Act permits companies to distribute dividends-in-kind (noncash assets) to shareholders
subject to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if
the articles of incorporation of the companies so stipulate. The Companies Act provides certain
limitations on the amounts available for dividends or the purchase of treasury stock. The limitation isdefined as the amount available for distribution to the shareholders, but the amount of net assets after
dividends must be maintained at no less than ¥3 million.

151

(b) Increases/Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus), depending on the equity account charged
upon the payment of such dividends, until the total of the aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserve may bereversed without limitation. The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings can be transferred among the accounts under certain conditions upon resolution of theshareholders.
(c) Treasury Stock
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to theshareholders which is determined by a specific formula.
15.

OTHER COMPREHENSIVE (LOSS) INCOME
Changes in the components of accumulated other comprehensive income, including amounts attributable to noncontrolling interests were as follows:

2022

Millions of Yen
2021
Foreign
Currency
PensionTranslation
Liability
Adjustments
Adjustments

Foreign
Currency
Translation
Adjustments

PensionLiability
Adjustments

2020

Foreign
Currency
Translation
Adjustments

PensionLiability
Adjustments

Balance at the beginning of the year (after-tax)
Amount arising during the year:
Pre-tax amountTax credit
Net amount
Reclassification adjustments:
Pre-tax amountTax credit
Net amount
Other comprehensive (income) loss attributable to noncontrollinginterests (after-tax)¥ 1,770¥ (1,008 )¥ (1,033 )¥ (4,594 )¥ 1,551¥ (5,679 )

6,204(172 )
6,032

1,717(527 )
1,190

2,685
(37 )
2,648

4,067
(1,229 )2,838(2,529 )(3 )(2,532 )265(140 )
125

(8 )

225
(51 )
174

Balance at the end of the year (after-tax)¥ 7,714(8 )(1,056 )(303 )
753

(80 )
¥

356

1,357
(397 )
960

155

(5 )

(52 )

¥ 1,770¥ (1,008 )¥ (1,033 )¥ (4,594 )Reclassification adjustments (pre-tax) of foreign currency translation adjustments are included in "Other – net" in the consolidated statements of income as the net periodic benefit costs.
Reclassification adjustments (pre-tax) of pension liability adjustments are included in "Other – net" in the consolidated statements of income as the net periodic benefit costs.
16.

INCOME TAXESThe Companies are subject to a number of different taxes based on income. The effective income tax rates differed from the normal effective statutory tax rates for the following reasons for the years ended March 31, 2022, 2021 and 2020:
2022

2021

2020

Normal Japanese effective statutory tax rates
Increase (decrease) in taxes resulting from:
Permanently nondeductible expenses
Change in valuation allowance
Undistributed earnings of associated companies
Differences in foreign subsidiaries' tax rate
Tax exemption
Unrecognized tax benefits
Impairment losses on goodwill
Changes in income tax rates
Other – net

30.6 %

30.6 %

30.6 %

3.2
10.2
0.4
(3.9 )(0.4 )
0.1
2.8
5.3

2.4
(1.8 )(0.2 )
0.1(0.7 )(0.6 )
7.4(0.2 )
0.8

7.3
10.3
2.3
(7.2 )(2.0 )(1.0 )
1.3(0.1 )(8.2 )

Effective tax rates

48.3 %

37.8 %

33.3 %

152

The approximate effect of temporary differences and tax loss carryforwards that gave rise to deferred tax
balances as of March 31, 2022 and 2021 were as follows:
Millions of Yen
2022
2021
DeferredDeferredDeferredDeferred
Tax
Tax
Tax
Tax
AssetsLiabilities
AssetsLiabilities
Refund liabilities
Allowance for doubtful receivables
Accruals not currently deductible
Inventory valuation
Accrued bonuses
Advanced depreciation on property, plant andequipment
Undistributed earnings of associated companies
Net unrealized gain on marketable securities andinvestments
Net realized gain on exchange of investments
Capitalized supplies
Enterprise taxes
Accrued vacation
Operating leases right-of-use assets
Operating lease liabilities
Asset retirement obligation
Prepaid pension expense
Liability for termination and retirement benefit
Return assets
Property, plant and equipment
Tax loss carryforwards
Intangible assets
Other temporary differences
Total
Valuation allowance

¥

537
47
383
1,402
668

Total

¥ 10,672

¥

¥

598
26
167
1,176
790

2,418
2,699

¥

1,842
2,496

9,039
416
95
177
663

8,841
416
94
62
774

3,327
3,413
226

4,069
4,159
257

3,371
908

2,140
646

199
1,665
3,169
911
14,264(3,592 )

184
1,517
3,025

1,377
367
23,213¥ 23,213677
13,968(2,947 )¥ 11,021

1,213
463
21,664¥ 21,664

The valuation allowance increased by ¥645 million and ¥89 million for the years ended March 31, 2022 and
2021, respectively.
The Companies also utilized ¥628 million and ¥413 million of tax loss carryforwards, and recognized tax
benefits of ¥24 million and ¥77 million for the years ended March 31, 2022 and 2021, respectively.

153

As of March 31, 2022, certain subsidiaries had tax loss carryforwards which are available to offset futuretaxable income of such subsidiaries and expire as follows:
Millions of
Yen

Year Ending March 31
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
Thereafter

¥

569
374
1,006
1,522
1,826
132
1,212
425
1,033
1,388
3,238

Total

¥ 12,725

There was no portion of undistributed earnings of foreign subsidiaries and foreign corporate joint ventures
which was deemed to be permanently reinvested as of March 31, 2022 and 2021.
A reconciliation of beginning and ending amounts of unrecognized tax benefits is as follows:

2022
Balance at the beginning of the year
Additions based on tax positions related to the current year
Addition based on tax position related to the previous years
Reductions for tax positions of prior years

¥ 3
1
6

Balance at the end of the year

¥ 10

Millions of Yen
2021

2020

¥2
1

¥ 101
1
(100 )¥3¥

2

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is ¥10
million, ¥3 million and ¥2 million as of March 31, 2022, 2021 and 2020, respectively.
The Companies recognize interest and penalties accrued related to unrecognized tax benefits in income taxes
in the consolidated statements of income. Total amounts of interest and penalties recognized in the
consolidated statements of income for the years ended March 31, 2022, 2021 and 2020 were not material.
The Companies file income tax returns in Japan and various foreign tax jurisdictions. In Japan, the Companies
are no longer subject to regular income tax examinations by the tax authorities for years before 2017, with few
exceptions. For other countries, the Companies are no longer subject to regular income tax examinations by
the tax authorities for years before 2010, with few exceptions. For certain subsidiaries in Japan, the UnitedStates, and Asia, the transfer pricing examinations for the fiscal years ended March 31, 2007, 2010 and 2016
were completed respectively.

154

17.

REVENUEThe Companies focuses on sales of innerwear (women's foundation garments and lingerie, nightwear andchildren's underwear), sportswear, and other textile products and related products ("Products"), and ourcustomers include retail and wholesale distributors and consumers in Japan and overseas. See Note 22 forrevenue information for each segment, by each product and service, and by geographic area.
Revenue from sales of our products is recognized when performance obligations are satisfied, which is upondelivery of the products. We invoice when we satisfy the performance obligation and receive cash payment
shortly thereafter. The amount of consideration does not include a significant financing component.
The Companies' revenue is recognized for transactions, net of any trade discounts or rebates given. We
generally provide a right of return to our customers. In order to estimate the transaction price, provision for
expected returns is deducted from revenue based on historical returns.
Contract liabilities from contracts with customers consists mainly of customer loyalty points. Some ofsubsidiaries have customer loyalty programs as part of the promotion and provide loyalty points to customers
when they purchase the products. The points provided to customers are identified as performance obligations,which are satisfied when the points are redeemed for the products. The points are expected to be used or expire
over the next two years. The unredeemed points as of the end of years are recorded as contract liabilities,
which are estimated based on actual redemption amounts from previous fiscal year. Contract liability is
included in other current liabilities, and the amount of contract liabilities as of March 31, 2022 and 2021 are as
follows:
Millions of Yen
2022
2021
Contract liabilities¥1,321¥1,275Contract liabilities mainly occurred from innerwear products in Wacoal Business (Domestic) segment.
Revenue recognized for the years ended March 31, 2022 and 2021, which had been included in the contract
liabilities balance at beginning of year were ¥998 million and ¥661 million.
The Companies omitted the disclosure about remaining performance obligations because the Companies haveno significant transactions with individual expected contractual terms exceeding one year except for the above.
18.

EARNINGS PER SHAREThe Company has introduced the restricted stock compensation plan, which the Company granted shares of its
common stock to directors of the Company, excluding outside directors and directors of the Company's
wholly-owned subsidiary, Wacoal Corp. (hereinafter referred to as "Eligible Directors"), Among the shares
under the restricted stock compensation plan, those transfer restrictions which have not been cancelled are
distinguished as participating securities from common shares. A holder of participating securities has the samerights as a holder of common shares to net income attribute to Wacoal Holdings Corp.
A reconciliation of the basic earnings per share computation was as follows:

2022
Net income attribute to Wacoal Holdings Corp.
Net income available to participating securities
Net income available to common shareholders155¥ 4,608
1
4,607

Millions of Yen
2021

2020

¥ 7,025¥ 3,472

7,025

3,472

2022
Weighted-average number of common shares
outstanding
Weighted-average number of participating securities
Weighted-average number of common shares

Number of shares
2021

2020

62,406,826

63,989,561

62,406,826

63,989,561

62,234,734
19,01762,215,717

Dividing net income attributable to Wacoal Holdings Corp. per share assumes the dilution that would occur ifshare-based options to issue common stock were exercised.

2022
Net income attribute to Wacoal Holdings Corp.
Net income available to participating securities
Net income available to common shareholders

2020¥ 7,025¥ 3,472

7,025

3,472

¥ 4,608
1
4,607

2022
Weighted-average number of common shares
outstanding
Dilution of exercising share-based options
Weighted-average number of participating securities
Weighted-average number of common shares
19.

Millions of Yen
2021

62,234,734
264,02119,01762,479,738

Number of shares
2021

2020

62,406,826
263,933

63,989,561
252,683

62,670,759

64,242,244

FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK
Fair Value of Financial Instruments
The carrying amounts and fair values of financial instruments as of March 31, 2022 and 2021 were as follows:
Millions of Yen
2022
2021
Carrying
Fair
Carrying
Fair
AmountValue
AmountValue
Assets:Marketable securities
Investments¥ 47,926¥ 47,926¥

253
51,603¥ 47,926¥ 47,926¥ 51,856¥ 51,858

Liabilities:
Long-term debt including current portion

¥

1,626

¥

1,570

¥

1,533

¥

1,532

Total liabilities

¥

1,626

¥

1,570

¥

1,533

¥

1,532

Total assets¥

255
51,603The carrying amounts of all other financial instruments approximate their estimated fair values because of theshort maturity of those instruments. For information about fair values of foreign exchange contracts andcurrency swaps, see Note 20.
Marketable Securities and Investments – The fair value of these held-to-maturity debt securities are based on
Level 1 inputs. For all other investments included in marketable securities and investments, see Notes 3 and
20.

156

Long-Term Debt – The fair values for long-term debt are estimated by discounted cash flow analysis, using
rates currently available for similar types of borrowings with similar terms and remaining maturities. The
estimated fair value is based on Level 2 inputs.
Limitations – Fair value estimates are made at a specific point in time based on relevant market informationand information about the financial instruments. These estimates are subjective in nature and involve
uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes
in assumptions could significantly affect the estimates.
Concentration of Credit Risk – The Companies' business consists primarily of sales of women's intimate
apparel to a large number of diverse customers in the Japanese retail industry, which include well-establisheddepartment stores, general merchandise stores and other general retailers and specialty stores.
20.

FAIR VALUE MEASUREMENTS
The guidance for fair value measurements defines fair value as the price that would be received to sell an asset
or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or
liability in an orderly transaction between market participants at the measurement date. The guidance
establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value as follows:
Level 1

Inputs are quoted prices in active markets for identical assets or liabilities.

Level 2

Inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for
identical or similar assets or liabilities in markets that are not active, inputs other than quoted
prices that are observable, and inputs that are derived principally from or corroborated byobservable market data by correlation or other means.

Level 3

Inputs are unobservable.

Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and 2021 were as
follows:

2022

Level 1

Assets:Investments:
Equity securities
Mutual funds
Others
Total
Derivative instruments:
Foreign exchange contracts

Millions of Yen
Level 2
Level 3

¥ 44,814137¥ 2,793
182
2,975

44,951

Total¥ 47,607
137
182
47,926¥ 96

Total assets¥ 44,951

Liabilities:
Contingent consideration
Total liabilities

157

¥ 96

96
¥ 2,975¥ 48,022¥ 1,493¥

1,493¥ 1,493

¥

1,493

2021

Level 1

Assets:Marketable securities
Mutual funds
Investments:
Equity securities
Mutual funds
Total
Derivative instruments:
Foreign exchange contracts¥

Millions of Yen
Level 2
Level 3

31

Total

¥

48,92091
49,011¥ 2,592

51,51291
51,603

2,592¥ 53

Total assets¥ 49,042

Liabilities:
Derivative instruments:
Foreign exchange contracts
Currency swap
Total
Contingent consideration

¥ 53

53
¥ 2,592¥ 23

Total liabilities

¥ 23

31

¥ 51,687¥

23¥ 2,901¥

2,901¥ 2,901¥

2,924

Investments presented in Level 1 are valued using unadjusted quoted market prices in active markets with
sufficient volume and frequency of transactions. As discussed in Note 3, the Companies record impairment
charges on debt securities if a decline in fair value of debt securities is determined to be other than temporary.
Foreign exchange contracts and currency swaps presented in Level 2 are valued by financial institutions basedon market data in both active and inactive markets. As discussed in Note 21, foreign exchange contracts andcurrency swaps are not designated as a hedge and the changes in fair value of such derivative instruments arerecorded in earnings immediately.
Equity securities in Level 3 are non-marketable equity securities and are valued by the comparable multiple
valuation method using financial indicators as inputs or other appropriate valuation methods. If unobservable
inputs were changed to reflect reasonably possible alternative assumptions, fair values would not change
significantly. Contingent consideration is valued by the Monte Carlo simulation using unobservable inputs. If
discount rates or volatility fall, the debt will increase. Out of the contingent consideration, ¥673 million,¥1,262 million and ¥1,088 million in consideration that has been fixed is included in the other payables on the
consolidated balance sheet as of March 31, 2022, 2021 and 2020, respectively.

158

The tables below show the change in assets presented in Level 3 that are continuously assessed at fair value asof March 31, 2022 and 2021:
Millions of Yen
2022
Contingent
Investment
Consideration
Balance at the beginning of the year
Sell/payment
Total gains or losses for the period:(Loss) gain on sale, exchange and valuation of marketablesecurities and investments – net
Selling, general and administrative expenses
Total comprehensive income or loss for the period
Foreign currency translation adjustments
Others¥ 2,592(1 )¥ 2,901(1,298 )Balance at the end of the year

¥ 2,975¥ 1,493

Unrealized (loss) gain included in earnings for assets andliabilities still held as of March 31, 2022

¥

¥

281
(276 )
166
103

281

(276 )

Millions of Yen
2021
Contingent
Investment
Consideration
Balance at the beginning of the year
Sell/payment
Total gains or losses for the period:(Loss) gain on sale, exchange and valuation of marketablesecurities and investments – net
Selling, general and administrative expenses
Total comprehensive income or loss for the period
Foreign currency translation adjustments¥ 2,561(18 )Balance at the end of the year

¥ 2,592¥ 2,901

Unrealized (loss) gain included in earnings for assets andliabilities still held as of March 31, 2021

¥

¥

159

¥ 3,874(1,061 )

49
64
24

49

64

Information about valuation techniques and significant unobservable inputs used for Level 3 assets
continuously measured at fair value for the years ended March 31, 2022 and 2021 is as follows:

March 31, 2022

Millionsof YenFair
Value

Contingent consideration¥1,493

March 31, 2021

Millionsof YenFair
Value

Contingent consideration¥2,901

Valuation
TechniquePrincipal Unobservable
Input

Range

Monte Carlosimulation

Discount rate

2.7%

Volatility

10.0%

Valuation
TechniquePrincipal Unobservable
Input

Range

Monte Carlosimulation

Discount rate

4.5%

Volatility

20.0%

160

Assets Measured at Fair Value on a Nonrecurring Basis
Assets measured at fair value on a nonrecurring basis as of March 31, 2022 and 2021 were as follows:
Millions of Yen
2022

Level 1

Level 2

Level 3

Total

¥3

¥3

Buildings and structures
Machinery and equipment

Impairment
Losses¥ (196 )(15 )¥ (211 )Millions of Yen
2021

Level 1Land
Buildings and structures
Machinery and equipment
Goodwill
SoftwareLevel 2

Level 3
¥

172
38
9,398

Total
¥

172
38
9,398

Impairment
Losses¥(526 )(559 )(51 )(2,673 )(12 )¥ (3,821 )As of the end of March 31, 2021, the carrying amount of the Company's land, buildings and structures under
the Wacoal Business (Domestic) were written down to their fair values, resulting in the recognition of an
impairment charge of ¥526 million and ¥99 million, respectively. This is due to the fact that, as a result of
determining the necessity of impairment of fixed assets due to a change in the purpose of ownership of someasset groups owned, it was determined that the fair value was lower than the carrying amount. To measure thefair values of the Company's reporting units, the Company used appraisals prepared by independent third party
appraisers based on recent transactions involving sales of similar assets.
As of the end of March 31, 2021, the carrying amount of Wacoal Corp.'s buildings and structures, machineryand equipment, subsidiaries' buildings and structures, machinery and equipment under the Wacoal Business(Domestic) were fully written off, resulting in an impairment charge of ¥394 million, ¥29 million, ¥41 millionand ¥21 million, respectively. The impairment is due to the decline in their fair value, which was caused by adownturn in sales. To measure the fair values of Wacoal Corp. and subsidiaries' reporting units, the Companies
used discounted cash flows method and incorporated relevant unobservable inputs, such as management's
internal assumptions about future cash flows and appropriately risk-adjusted discount rates, which reflected
management's estimate of assumptions that market participants would use in pricing the asset in an arm's
length transaction as of the measurement date.
As of the end of March 31, 2021, the carrying amount of Wacoal Europe Ltd.'s goodwill under the Wacoal
Business (Overseas) was written off, in light of the impact of COVID-19 and the customs clearance expenses
incurred in connection with Brexit in the United Kingdom, we reassessed the fair value of goodwill based on
our outlook of our business, and recorded the impairment charges of ¥2,673 million. To measure the fairvalues of Wacoal Europe Ltd.'s reporting units, the Companies used discounted cash flows method andincorporated relevant unobservable inputs, such as management's internal assumptions about future cash flows
and appropriately risk-adjusted discount rates, which reflected management's estimate of assumptions thatmarket participants would use in pricing the asset in an arm's length transaction as of the measurement date.
Future cash flows were based on the management's cash flow projections for the future five years, and after
five years, future cash flows were estimated using the perpetuity growth rate of 2.0%.

161

As of the end of March 31, 2022, the carrying amount of the Company's buildings and structures under the
Wacoal Business (Domestic) were written down to their fair values, resulting in the recognition of an
impairment charge of ¥24 million. This is due to the fact that, as a result of determining the necessity of
impairment of fixed assets due to a change in the purpose of ownership of some asset groups owned, it wasdetermined that the fair value was lower than the carrying amount. To measure the fair values of theCompany's reporting units, the Company used appraisals prepared by independent third party appraisers basedon recent transactions involving sales of similar assets.
As of the end of March 31, 2022, the carrying amount of Wacoal Corp.'s buildings and structures, machineryand equipment, subsidiaries' buildings and structures, machinery and equipment under the Wacoal Business(Domestic) were fully written off, resulting in an impairment charge of ¥169 million, ¥13 million, ¥3 millionand ¥2 million, respectively. The impairment is due to the decline in their fair value, which was caused by adownturn in sales. To measure the fair values of Wacoal Corp. and subsidiaries' reporting units, the Companies
used discounted cash flows method and incorporated relevant unobservable inputs, such as management's
internal assumptions about future cash flows and appropriately risk-adjusted discount rates, which reflected
management's estimate of assumptions that market participants would use in pricing the asset in an arm's
length transaction as of the measurement date.
Valuation process:
The valuation process involved in Level 3 measurements for applicable assets and liabilities is governed by thevaluation policies and procedures, including evaluation method for fair value measurements, pre-approved by
the Companies. Based on the policies and procedures, either personnel from the accounting division or
personnel in charge of valuation determine the valuation model to be utilized to measure each asset andliability at fair value. We engage independent external valuation experts to assist us in the valuation process
for certain assets over a specific amount, and the results of their valuations are reviewed by the responsible
personnel. All the valuations, including those performed by the external experts, are reviewed and approved bymanagement of the Company before being recorded in the general ledger.
21.

DERIVATIVE INSTRUMENTS
Risk Management Policy – The Companies are exposed to the risk of changes in foreign currency exchange
rates. Derivative instruments are used to manage such risk. Derivative instruments are used based on the
Companies' policy and administrative provisions. There were no derivative instruments used for the purpose of
speculative trading. The Companies consider the related credit risk to be low since these derivative instruments
are provided by financial institutions with international credibility.
Foreign Exchange Risk – Assets and liabilities denominated in foreign currencies, which are primarily related
to international business, are exposed to the risk of changes in foreign currency exchange rates. Foreignexchange contracts and currency swaps are used to mitigate such risk.
Derivative Instruments Not Designated as a Hedge – Foreign exchange contracts and currency swaps areclassified as derivative instruments, which are not designated as a hedge since these derivative instruments do
not qualify for hedge accounting. These derivative instruments are used to mitigate the risk of changes inforeign currency exchange rates, and the changes in fair value of such derivative instruments are recorded inearnings immediately.
Notional contract amounts of derivative instruments that are not designated as hedges as of March 31, 2022
and 2021 were as follows:
Millions of Yen
2022
2021
Foreign currency exchange
Currency swaps¥ 1,632

162

¥713
332

The amounts of derivative instruments at fair value in the consolidated balance sheets in consolidated balance
sheets as of March 31, 2022 and 2021 were as follows:

Assets:Foreign currency exchange
Liabilities:
Currency swaps

Balance Sheets Location

Millions of Yen
2022
2021

Other current assets¥96

Other current liabilities

¥53
¥23

The effect of derivative instruments in consolidated statements of income for the years ended March 31, 2022,
2021 and 2020 were as follows:

Foreign currency exchange
Currency swaps
22.

Statements of Income Location

2022

Millions of Yen
2021

2020

Other – net
Other – net

¥ 103
23

¥ 61
20

¥ 57
(36 )

SEGMENT INFORMATION
Operating Segment Information
The Companies have three reportable segments: "Wacoal Business (Domestic)," "Wacoal Business(Overseas)," and "Peach John Business," which are based on their locations and brands. These segments
represent components of the Companies for which separate financial information is available and for which
operating income (loss) is reviewed regularly by the chief operating decision-maker in deciding how toallocate the Companies' resources and in assessing their performance. The accounting policies used for thesereportable segments are the same as those described in the summary of significant accounting policies in Note
1.
The "Wacoal Business (Domestic)" segment primarily produces and sells innerwear (consisting of foundation,
lingerie, nightwear and children's innerwear), outerwear, sportswear and hosiery. The "Wacoal Business(Overseas)" segment produces and sells innerwear (consisting of foundation, lingerie, nightwear and children's
innerwear), outerwear, sportswear, and other textile-related products. The "Peach John Business" segment
produces and sells innerwear (consisting of foundation, lingerie, nightwear), outerwear, and other textilerelated products, which are sold under the "Peach John" brand. The "Other" produces and sells innerwear(consisting of foundation, lingerie, nightwear and children's innerwear), outerwear, other textile-related
products, and mannequins and also engages in construction of stores and interior design.

163

Information about operating results and assets for each segment as of and for the years ended March 31, 2022, 2021 and 2020 is as follows:
Millions of Yen

2022
Net sales:
External customers
Intersegment
Total
Operating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Impairment charges on property, plant and equipment
Total
Operating (loss) income

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John
Business

Other

Elimination¥

88,128844
88,972¥ 59,678
8,206
67,884¥ 12,528
363
12,891¥ 12,526
3,685
16,211¥(13,098 )(13,098 )

82,7033,739
211
86,653
2,319

63,507
2,026

10,986254

17,353
166(13,098 )

65,533
2,351

11,2401,651

17,519(1,308 )(13,098 )259,276
7,409

96,0482,006

11,378255

14,643
75(78,100 )303,245
9,745

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John
Business

Other

Elimination

Consolidated¥

86,133754
86,887¥ 41,355
8,769
50,124¥ 12,200219
12,419¥ 12,516
3,827
16,343¥ (13,569 )(13,569 )

81,461
3,711
1,088

48,086
1,943
25
2,673

10,491
325

16,901
149
23(13,569 )17,073(730 )(13,569 )

15,724
182(76,730 )Total assets and capital expenditures:
Total assets
Capital expenditures

Consolidated¥ 172,860
172,860
161,451
6,185
211
167,847
5,013

Millions of Yen

2021
Net sales:
External customers
Intersegment
Total
Operating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Impairment charges on property, plant and equipment
Impairment charges on goodwill
Impairment charges on other intangible assets
Total
Operating (loss) income
Total assets and capital expenditures:
Total assets
Capital expenditures

86,260627

52,727(2,603 )12
10,8281,591

285,421
4,203

87,252
1,097

11,094122

164¥ 152,204
152,204
143,370
6,128
1,136
2,673
12
153,319(1,115 )322,7615,604

Millions of Yen

2020
Net sales:
External customers
Intersegment
Total
Operating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Impairment charges on property, plant and equipment
Impairment charges on goodwill
Impairment charges on other intangible assets
Total
Operating income (loss)
Total assets and capital expenditures:
Total assets
Capital expenditures

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John
Business

Other

Elimination¥ 106,112
1,107
107,219¥ 49,808
10,57060,378¥ 11,224
214
11,438¥ 19,616
5,110
24,726¥ (17,001 )(17,001 )97,561
3,575

11,215383

25,170149(17,001 )101,136
6,083

55,912
1,922
769
217
65
58,885
1,493

191
11,789(351 )

25,319(593 )(17,001 )237,394
4,594

86,292
2,106

9,751
129

18,435
152(74,184 )Consolidated¥ 186,760
186,760
172,857
6,029
769
217
256
180,1286,632

277,688
6,981

Net sales to external customers consist of revenue from contracts with customers and the other revenue which is mainly composed of operating lease income as lessor described in thesummary of leases in Note 9.
The sum of the operating (loss) income of the reportable segments agrees to the operating income on the consolidated statements of income. For a reconciliation from operating (loss)
income to income before income taxes and equity in net income of affiliated companies, see other income (expenses) on the consolidated statements of income.
The Companies account for intersegment sales and transfers at cost plus a markup. Operating (loss) income is calculated by deducting operating costs and expenses from net sales.
Products and Services Information
Net sales information by product and service for the years ended March 31, 2022, 2021 and 2020 is as follows:
Millions of Yen

2022

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Innerwear:
Foundation and lingerieNightwear
Children's underwear
Subtotal¥ 71,260
5,744
712
77,716¥ 54,019
468
65
54,552¥ 11,007
466

6,187
946
2,138
1,141

3,578

87

1,509
39

968

¥ 88,128¥ 59,678¥ 12,528

Outerwear/sportswear and others
Hosiery
Other textile goods and related products
Others
Total

165

Peach John
Business

11,473

Other

¥

Total

3,947
45
12
4,004

¥ 140,233
6,723
789
147,745

937
28
727
6,830

10,789
974
5,342
8,010

¥ 12,526¥ 172,860

Millions of Yen

2021

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Innerwear:
Foundation and lingerieNightwear
Children's underwear
Subtotal¥ 69,619
5,702
694
76,015¥ 37,404
306
48
37,758¥ 10,757
494

5,904
900
2,268
1,046

2,090

129

1,475
32

820

¥ 86,133¥ 41,355¥ 12,200

Outerwear/sportswear and others
Hosiery
Other textile goods and related products
Others
Total

Peach John
Business

11,251Millions ofYen
2020
Innerwear:
Foundation and lingerieNightwear
Children's underwear
Subtotal
Outerwear/sportswear and others
Hosiery
Other textile goods and related products
OthersTotal¥ 144,933
7,459
1,014
153,406¥

12,746
1,563
7,545
11,500¥ 186,760

Geographic Information
Information by major geographic area as of and for the years ended March 31, 2022, 2021 and 2020 is as follows:

Net sales:Japan
Asia and Oceania
Americas and Europe
Consolidated
Long-lived assets:Japan
Asia and Oceania
Americas and Europe
Consolidated

2022

Millions of Yen
2021

2020

¥ 111,610
21,06840,182¥ 109,464
16,301
26,439¥ 135,273
20,59630,891¥ 172,860¥ 152,204¥ 186,760¥ 42,646
4,787
5,528

¥ 41,918
3,536
4,304

¥ 44,014
4,034
4,035

¥ 52,961¥ 49,758¥ 52,083

Countries or areas are classified according to their geographical proximity.
Asia and Oceania includes East Asia, Southeast Asia, West Asia and Australia.
Net sales are attributed to countries or areas based on the location where sold.
Long-lived assets represent property, plant and equipment.
166

Other

¥

Total

4,996
20
7
5,023

¥ 122,776
6,522
749
130,047

713
18
791
5,971

8,836
918
5,354
7,049

¥ 12,516¥ 152,204

23.

SUBSEQUENT EVENTS(Purchase of Treasury Stock)
The Board of Directors adopted a resolution at a meeting held on May 13, 2022 regarding matters related topurchase of treasury stock pursuant to the provisions of Paragraph 1, Article 459 of the Companies Act.
1.

Reason for Purchase of Treasury StockTo return profits to the shareholders, improve capital efficiency and implement our capital policy withincreased flexibility tailored to the business environment.

2.

Details of Purchase(i)Type of shares to be purchased:

Common stock of the Company(ii) Total number of shares to be purchased:

5,500,000 shares (at maximum)(iii) Aggregate purchase amount:¥10,000 million (at maximum)(iv) Purchase period:

From June 4, 2022 through March 24, 2023

(Cancellation of Treasury Stock)
The Board of Directors adopted a resolution at a meeting held on May 13, 2022 regarding matters related tocancellation of treasury stock pursuant to the provisions of Article 178 of the Companies Act.
(i) Type of shares to be cancelled:

Common stock of the Company(ii) Number of shares to be cancelled:

1,089,042 shares(iii) Date of cancellation:

May 23, 2022

(Dividend Declaration)
On May 13, 2022, the Board of Directors resolved to pay a cash dividend of ¥150 per 5 shares of common
stock to holders of record as of March 31, 2022 (aggregate amount of ¥1,844 million).

******

167

VI. 【Stock-Related Administration for the Company】
Fiscal year

From April 1 to March 31

Ordinary General Meeting of
Shareholders

To be held in June

Record date

March 31

Record date for distribution of
surplusNumber of shares constituting
one unit
Purchase and sale of shares lessthan one unit

September 30
March 31

Office for handling business

100 shares(Special Account)
Osaka Securities Transfer Section
Mitsubishi UFJ Trust and Banking Corporation
6-3, Fushimi 3-chome, Chuo-ku, Osaka

Transfer agent(Special Account)
Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Forwarding office―――Handling charge for purchase
and SaleFree of charge

Method of public noticeSpecial benefit forshareholders(Notes)Public notice of the Company shall be in electronic form; provided that, public noticecannot be provided electronically due to an accident or unavoidable event, it shall be
published in Nihon Keizai Shimbun.
(i) Wacoal Essence Check (coupon for goods) shall be presented to the shareholders as
follows (with the date of determination of the shareholders entitled thereto being the endof March and September):- To shareholders holding 500 shares or more, but less than 1,500 shares:
Wacoal Essence Check worth JPY3,000 shall be presented twice a year.
- To shareholders holding 1,500 shares or more:
Wacoal Essence Check worth JPY5,000 shall be presented twice a year.
- To shareholders holding shares for three years or more:
Wacoal Essence Check worth JPY 1,000 shall be added to above.
(ii) Shareholder special discount shall be made for Wacoal products by means of catalogue
sales and internet sales as follows:- To shareholders holding 100 shares or more:
20% discount shall be made for the purchase of our products listed in catalogues
issued by Wacoal or internet sales; provided, however, that the total purchaseprice applicable for the discount shall be 1,000,000 yen (before discount) per year.

Our Articles of Incorporation prescribe that the shareholders holding shares constituting less than one unit of theCompany may not exercise any rights, except for the rights as prescribed under each item in Paragraph 2, Article 189of the Companies Act, the claim rights pursuant to the provisions of Paragraph 1, Article 166 of the same law, the rightto receive an allocation of share offerings and stock acquisition rights in proportion to the number of shares held, andthe right to request the sale of additional shares not constituting one unit.

168

VII. 【Reference Information on the Company】
1. 【Information on the Parent Company】
The Company does not have the parent company set out in Paragraph 1, Article 24-7 of the Financial Instruments and Exchange Act.

2. 【Other Reference Information】
The Company filed the following documents during the period from the commencing date of the current fiscal year, to the filing date of the Annual
Securities Report.
(1） Annual Securities Report andFiscal Year
From April 1, 2020
Filed with the Director of thethe attachments thereto, and(73rd Fiscal Year)
to March 31, 2021
Kanto Local Finance Bureau on
Confirmation Letter
June 29, 2021
(2） Internal Control Report andthe attachments thereto(3） Quarterly Report andConfirmation Letter

Filed with the Director of the
Kanto Local Finance Bureau on
June 29, 2021
(First quarter of 74th
Fiscal Year)

From April 1, 2021
to June 30, 2021

(Second quarter of 74th From July 1, 2021
Fiscal Year)to September 30, 2021
(Third quarter of 74th
Fiscal Year)(4） Extraordinary Report(5） Share Repurchase Report

From October 1, 2021
to December 31, 2021

Extraordinary Report on the Results of the Exercise of
Voting Rights at General Meeting of Shareholders
pursuant to Item 9-2, Paragraph 2, Article 19 of the
Cabinet Office Ordinance Concerning Disclosure of
Corporate Affairs, etc.
Reporting Period

From December 1, 2021
to December 31, 2021

Reporting Period

From January 1, 2022
to January 31, 2022

Reporting Period

From February 1, 2022
to February 28, 2022

Reporting Period

From March 1, 2022
to March 28, 2022

Reporting Period

From April 1, 2022
to April 30, 2022

169

Filed with the Director of the
Kanto Local Finance Bureau on
August 12, 2021
Filed with the Director of the
Kanto Local Finance Bureau on
November 12, 2021
Filed with the Director of the
Kanto Local Finance Bureau on
February 10, 2022
Filed with the Director of the
Kanto Local Finance Bureau on
June 30, 2021

Filed with the Director of the
Kanto Local Finance Bureau on
January 7, 2022
Filed with the Director of the
Kanto Local Finance Bureau on
February 7, 2022
Filed with the Director of the
Kanto Local Finance Bureau on
March 4, 2022
Filed with the Director of the
Kanto Local Finance Bureau on
April 7, 2022
Filed with the Director of the
Kanto Local Finance Bureau on
June 6, 2022

Part II 【Information on Guarantors etc. for the Company】
Not applicable.

170

INDEPENDENT AUDITOR'S REPORTTo the Board of Directors of Wacoal Holdings Corp.:
OpinionWe have audited the consolidated financial statements of Wacoal Holdings Corp. and its consolidated subsidiaries(the "Group"), which comprise the consolidated balance sheet as of March 31, 2022, and the consolidated statementof income, consolidated statement of comprehensive income, consolidated statement of equity and consolidated
statement of cash flows for the year then ended, and notes to the consolidated financial statements, including asummary of significant accounting policies, all expressed in Japanese yen.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position of the Group as of March 31, 2022, and its consolidated financial performance and its
consolidated cash flows for the year then ended in accordance with accounting principles generally accepted in the
United States of America pursuant to the provisions of Article 95 of the Ordinance on Terminology, Forms andPreparation Methods of Consolidated Financial Statements.
Convenience Translation
Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion,such translation has been made in accordance with the basis stated in Note 2 to the consolidated financial statements.
Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the provisions of theCode of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter
A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of theconsolidated financial statements of the current period. The matter was addressed in the context of our audit of theconsolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on the matter.
Valuation of goodwill allocated to Wacoal Europe Ltd.
How the Key Audit Matter Was Addressedin the Audit

Key Audit Matter Description
As of March 31, 2022, the goodwill in the amount of¥22,945 million recorded on the consolidated balance
sheet includes goodwill of ¥9,932 million, or 3.3% of
total assets, allocated to Wacoal Europe Ltd. Based on
Accounting Standard Codification 350, "Intangibles—
Goodwill and Other," goodwill of a reporting unit shallbe tested for impairment on an annual basis andbetween annual tests in certain circumstances. The
Group used an expected present value method to
calculate fair value and performed an impairment test.
Future cash flows used to calculate fair value werebased on a five-year business plan with the terminal
value reflecting the average long-term growth rate in
the relevant market. The plan was approved bymanagement and includes significant assumptions suchas the possibility of achievement of expected sales
volumes and market growth rate in the regions where
Wacoal Europe Ltd. operates. These significant
assumptions involve high uncertainty, and the businessplan based on these assumptions involves significant
judgment by management.
Based on the above, we identified the valuation of
goodwill allocated to Wacoal Europe Ltd. as a key
audit matter.

Our audit procedures related to key assumptions used bymanagement in the business plan included the following,among others:

We read the report related to impairment tests ofgoodwill prepared by management. We examined theconsistency of assumptions with the business plan
approved by management. In addition, we inquired ofmanagement regarding the business plan, obtained anunderstanding on the significant assumptions,performed the following procedures and evaluated therationality of the business plan.



We obtained an understanding on various measures toexpand the sales volume through inquiries ofmanagement, compared business plans prepared in theprior years with actual results in the corresponding
years, and evaluated management's ability toaccurately estimate the possibility of achievement of
expected sales volumes.



We evaluated management's expected growth rates in
the regions where Wacoal Europe Ltd. operates bycomparing them with our own growth forecasts
derived from the retail industry data published byexternal organizations with the assistance of ourvaluation specialists.

Other Information
Management is responsible for the other information. Audit & Supervisory Board members and the Audit &Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the design andoperating effectiveness of the controls over the other information. The other information comprises the information
included in the Annual Securities Report, but does not include the consolidated financial statements and our auditor'sreport thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Audit & Supervisory Board Members and the Audit & Supervisory
Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in United States of America, and for such internal control
as management determines is necessary to enable the preparation of consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern in accordance withaccounting principles generally accepted in United States of America and using the going concern basis ofaccounting unless management either intends to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the
Directors' execution of duties relating to the design and operating effectiveness of the controls over the Group’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with auditing standards generally accepted in Japan will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks. The procedures selected depend on
the auditor's judgment. In addition, we obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause theGroup to cease to continue as a going concern.
• Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with accounting principles generally accepted in United States of America, as well as the overall
presentation, structure and content of the consolidated financial statements, including the disclosures, and whether
the consolidated financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We are responsible forthe direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding, among
other matters, the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statement that wehave complied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with Audit & Supervisory Board members and the Audit & Supervisory Board, we
determine those matters that were of most significance in the audit of the consolidated financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine thata matter should not be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

DELOITTE TOUCHE TOHMATSU LLC
Kyoto Japan

June 29, 2022

NOTE TO READERS:
Following is an English translation of the Independent Auditors' Report filed under the Financial Instruments andExchange Act of Japan. This report is presented merely as supplemental information.
There are differences between an audit of internal control over financial reporting ("ICFR") under the Financial
Instruments and Exchange Act ("ICFR under FIEA") and one conducted under attestation standards established by
the American Institute of Certified Public Accountants ("AICPA").
In an audit of ICFR under FIEA, the auditors express an opinion on management's report on ICFR, and do not
express an opinion on the Company's ICFR directly. In an audit of ICFR under attestation standards established by
the AICPA, the auditors express an opinion on the Company's ICFR directly. Also, in an audit of ICFR under FIEA,
there is detailed guidance on the scope of an audit of ICFR, such as quantitative guidance on business units selection
and/or account selection. In an audit of ICFR under attestation standards established by the AICPA, there is no suchdetailed guidance. Accordingly, based on the quantitative guidance which provides an approximate measure for thescope of assessment of internal control over business process, we used a measure of approximately two-thirds oftotal consolidated revenues for the selection of significant business units.
(TRANSLATION)
INDEPENDENT AUDITOR'S REPORT
June 29, 2022
To the Board of Directors of
Wacoal Holdings Corp.:
Deloitte Touche Tohmatsu LLC
Kyoto office
Designated Engagement Partner,
Certified Public Accountant:
Koichiro Tsukuda
Designated Engagement Partner,
Certified Public Accountant:
Tomomi Tsuji
Audit of Financial Statements
OpinionPursuant to the first paragraph of Article 193-2 of the Financial Instruments and Exchange Act, we have audited theconsolidated financial statements of Wacoal Holdings Corp. and its consolidated subsidiaries (the "Group") includedin the Financial Section, namely, the consolidated balance sheet as of March 31, 2022, and the consolidated
statement of income, consolidated statement of comprehensive income, consolidated statement of equity andconsolidated statement of cash flows for the fiscal year from April 1, 2021 to March 31, 2022, and a summary ofsignificant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position of the Group as of March 31, 2022, and its consolidated results of its operations andits consolidated cash flows for the year then ended in accordance with accounting principles generally accepted in
the United States of America pursuant to the provisions of Article 95 of the Ordinance on Terminology, Forms andPreparation Methods of Consolidated Financial Statements.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the provisions of theCode of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matter
A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of theconsolidated financial statements of the current period. The matter was addressed in the context of our audit of theconsolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on the matter.
Valuation of goodwill allocated to Wacoal Europe Ltd.
How the Key Audit Matter Was
Addressed in the Audit

Key Audit Matter Description
As of March 31, 2022, the goodwill in the amount of¥22,945 million recorded on the consolidated balance
sheet includes goodwill of ¥9,932 million, or 3.3% of
total assets, allocated to Wacoal Europe Ltd. Based on
Accounting Standard Codification 350, "Intangibles—
Goodwill and Other," goodwill of a reporting unit shallbe tested for impairment on an annual basis andbetween annual tests in certain circumstances. The
Group used an expected present value method to
calculate fair value and performed an impairment test.
Future cash flows used to calculate fair value werebased on a five-year business plan with the terminal
value reflecting the average long-term growth rate in
the relevant market. The plan was approved bymanagement and includes significant assumptions suchas the possibility of achievement of expected sales
volumes and market growth rate in the regions where
Wacoal Europe Ltd. operates. These significant
assumptions involve high uncertainty, and the businessplan based on these assumptions involves significant
judgment by management.
Based on the above, we identified the valuation of
goodwill allocated to Wacoal Europe Ltd. as a key
audit matter.

Our audit procedures related to key assumptions used bymanagement in the business plan included the following,among others:

We read the report related to impairment tests ofgoodwill prepared by management. We examined theconsistency of assumptions with the business plan
approved by management. In addition, we inquired ofmanagement regarding the business plan, obtained anunderstanding on the significant assumptions,performed the following procedures and evaluated therationality of the business plan.



We obtained an understanding on various measures toexpand the sales volume through inquiries ofmanagement, compared business plans prepared in theprior years with actual results in the corresponding
years, and evaluated management's ability toaccurately estimate the possibility of achievement of
expected sales volumes.



We evaluated management's expected growth rates in
the regions where Wacoal Europe Ltd. operates bycomparing them with our own growth forecasts
derived from the retail industry data published byexternal organizations with the assistance of ourvaluation specialists.

Other Information
Management is responsible for the other information. Audit & Supervisory Board members and the Audit &Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the design andoperating effectiveness of the controls over the other information. The other information comprises the information
included in the Annual Securities Report, but does not include the consolidated financial statements and our auditor'sreport thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Audit & Supervisory Board Members and the Audit & Supervisory Board for
the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in the United States of America, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern in accordance withaccounting principles generally accepted in the United States of America.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the
Directors' execution of duties relating to the design and operating effectiveness of the controls over the Group's
financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes ouropinion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:•

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks. The procedures selected depend on
the auditor's judgment. In addition, we obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion.

•

Obtain, when performing risk assessment procedures, an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group's internal control.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.

•

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause
the Group to cease to continue as a going concern.

•

Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with accounting principles generally accepted in the United States of America, as well as the overall
presentation, structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We are responsible forthe direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.

We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding, among
other matters, the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statement that wehave complied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with Audit & Supervisory Board members and the Audit & Supervisory Board, we
determine those matters that were of most significance in the audit of the consolidated financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine thata matter should not be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Audit of Internal Control
OpinionPursuant to the second paragraph of Article 193-2 of the Financial Instruments and Exchange Act, we have audited
management's report on internal control over financial reporting of Wacoal Holdings Corp. as of March 31, 2022.
In our opinion, management's report on internal control over financial reporting referred to above, which represents
that the internal control over financial reporting of Wacoal Holdings Corp. as of March 31, 2022, is effectively
maintained, presents fairly, in all material respects, the results of the assessment of internal control over financial
reporting in accordance with assessment standards for internal control over financial reporting generally accepted inJapan.
Basis for Opinion
We conducted our internal control audit in accordance with auditing standards for internal control over financial
reporting generally accepted in Japan. Our responsibilities under those standards are further described in the
Auditor's Responsibilities for the Internal Control Audit section of our report. We are independent of the Group inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our other ethicalresponsibilities as auditors. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Responsibility of Management and Audit & Supervisory Board for Report on Internal Control
Management is responsible for designing and operating effective internal control over financial reporting and for the
preparation and fair presentation of its report on internal control in accordance with assessment standards for internal
control over financial reporting generally accepted in Japan. Audit & Supervisory Board members and the Audit &Supervisory Board are responsible for overseeing and verifying the design and operating effectiveness of internal
control over financial reporting. There is a possibility that misstatements may not be completely prevented or
detected by internal control over financial reporting.

Auditor's Responsibilities for the Internal Control Audit
Our objectives are to obtain reasonable assurance about whether management's report on internal control over financial reporting is free from material
misstatement and to issue an auditor's report that includes our opinion.
As part of an audit in accordance with auditing standards for internal control over financial reporting generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:•

Perform audit procedures to obtain audit evidence regarding the results of the assessment of internal control over financial reporting inmanagement's report on internal control. The procedures selected depend on the auditor's judgment, including the significance of effects on
reliability of financial reporting.

•Examine representations on the scope, procedures and results of the assessment of internal control over financial reporting made by management,
as well as evaluating the overall presentation of management's report on internal control.

•

Obtain sufficient appropriate audit evidence regarding the results of the assessment of internal control over financial reporting. We are responsible
for the direction, supervision and performance of the internal control audit. We remain solely responsible for our audit opinion.

We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding, among other matters, the planned scope
and timing of the internal control audit, result of the internal control audit, including any identified material weakness which should be disclosed andthe result of remediation.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bearon our independence, and where applicable, related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant to the provisions of
the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor's Report
This is an English translation of the independent auditor's report as required by the Financial Instruments and Exchange Act of Japan for theconveniences of the reader.

【Cover】【Document Filed】

Internal Control Report (“Naibutosei Hokokusho”)【Applicable Law】

Paragraph 1, Article 24-4-4 of the Financial Instruments and Exchange Act【Filed to】

Director, Kanto Local Finance Bureau【Filing Date】

June 29, 2022

【Company Name】

KABUSHIKI KAISHA WACOAL HOLDINGS【Company Name in English】

WACOAL HOLDINGS CORP.

【Position and Name of Representative】【Position and Name of Chief Financial
Officer】

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

29, Nakajima-cho, Kisshoin, Minami-ku, Kyoto【Place Where Available for PublicTokyo Stock Exchange, Inc.

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

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING(TRANSLATION)NOTE TO READERS
The following is an English translation of management's report on internal control over financial ("ICFR") filed
under the Financial Instruments and Exchange Act of Japan. This report is presented merely as supplemental
information.
There are differences between the management assessment of ICFR under the Financial Instruments and Exchange
Act ("ICFR under FIEA") and one conducted under the attestation standards established by the American Institute ofCertified Public Accountants ("AICPA").
In the management assessment of ICFR under FIEA, there is detailed guidance on the scope of management’s
assessment of ICFR, such as quantitative guidance on business units selection and/or account selection. In the
management assessment of ICFR under the attestation standards established by the AICPA, there is no such detailed
guidance. Accordingly, based on the quantitative guidance which provides an approximate measure for the scope ofassessment of internal control over business processes, we designated the business units that accounted forapproximately two-thirds of the aggregated sales for the previous fiscal year on a consolidated basis as "significant
business units" which should be subject to the process-level controls.
1.【Matters Relating to the Basic Framework for Internal Control over Financial Reporting】
Hironobu Yasuhara, Representative Director, President and Corporate Officer, and Akira Miyagi, Director and Vice
President Corporate Officer, are responsible for the designing and operating effective internal control over financial
reporting of Wacoal Holdings Corp. (the "Company"), and have designed and operated internal control over financial
reporting in accordance with the basic framework for internal control set forth in "The Standards and PracticeStandards for Management Assessment and Audit of Internal Control Over Financial Reporting" published by theBusiness Accounting Council.
The internal control is designed to achieve certain objectives to the extent reasonable through the effective function
and combination of its basic elements. Therefore, there is a possibility that misstatements may not be completely
prevented or detected by internal control over financial reporting.
2.【Matters Relating to Scope of Assessment, the Assessment Date, and Assessment Procedures】
The assessment of internal control over financial reporting was performed as of March 31, 2022. The assessment
was performed in accordance with assessment standards for internal control over financial reporting generally
accepted in Japan.
In conducting this assessment, we evaluated internal controls which may have a material effect on the entire financial
reporting in a consolidation ("company-level controls") and, based on the result of this assessment, we appropriately
selected business processes to be evaluated, analyzed these selected business processes, identified key controls that
may have a material impact on the reliability of our financial reporting, and assessed the design and operation ofthese key controls. These procedures have allowed us to evaluate the effectiveness of its internal controls.
We determined the required scope of the assessment of internal control over financial reporting for the Company, as
well as its consolidated subsidiaries and equity method affiliated companies, from the perspective of the materialitythat may affect the reliability of our financial reporting. The materiality that may affect the reliability of our
financial reporting is determined taking into account the materiality of quantitative and qualitative impacts. We
confirmed that we had reasonably determined the scope of assessment of internal controls over business processes inlight of the results of assessment of company-level controls conducted for the Company, its consolidated subsidiaries
and equity method affiliated companies. We did not include those consolidated subsidiaries and equity method
affiliated companies which do not have any quantitatively or quantitatively material impact on the consolidated
financial statements in the scope of the assessment of company-level controls.

Regarding the scope of assessment of internal control over business processes, we designated the business locations
that accounted for approximately two-thirds of the aggregated sales for the previous fiscal year on a consolidated
basis as "significant business locations" which should be subject to process-level controls.
At the selected significant business units, we included, in the scope of our assessment, those business processes
leading to sales or accounts receivable and inventories, as significant accounts that may have a material impact on
our business objectives. Further, not only at selected significant business units, but also at other business units, we
added to the scope assessment, as business processes having greater materiality considering their impact on financial
reporting, (1) those business processes relating to greater likelihood of material misstatements and significant
accounts involving estimates and management's judgment, and (2) those business processes relating to businesses oroperations dealing high risk transactions.
3.【Matters Relating to the Results of Assessment】
As a result of the assessment above, we concluded that our internal control over financial reporting was effective asof March 31, 2022.
4.【Supplementary Matters】
Not applicable.
5.【Special Information】
Not applicable.