Annual Securities Report(The 68th Fiscal Year)
From April 1, 2015 to March 31, 2016

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

E00590

The 68th Fiscal Year (from April 1, 2015 to March 31, 2016)

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, 2016.
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 and references 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, estimates andprojections about our company 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 operations or of financial condition, or state other “forward-looking” information. In
particular, the forward-looking statements may include statements relating to the impact of weak consumer spending inJapan and our other markets on our sales and profitability; the impact on our business of anticipated continued
weakness of department stores and other general retailers in Japan; our ability to successfully develop, manufacture
and market products in Japan and our other markets that meet the changing tastes and needs of consumers and todeliver high quality products; the highly competitive nature of our business and the strength of our competitors; ourability to successfully expand our network of our directly managed retail stores and achieve profitable operations atthese stores; our ability to further develop our catalogue and Internet sales capabilities; our ability to effectively
manage our inventory levels; our ability to reduce costs; our ability to recruit and maintain qualified personnel; effectsof irregular weather events on our business and performance; risks related to conducting our business internationally;risks from acquisitions and other strategic transactions with third parties; risks relating to return of investment for thedevelopment of new markets; risks relating to intellectual property; risks relating to the protection of personal
information and our confidential information; risks relating to internal controls over financial reporting; the impact of
weakness in the Japanese equity markets on our holdings of Japanese equity securities; the impact of any natural
disaster or epidemic on our business; risks in relation to liability for termination and retirement benefit; and risks
related to realizability of deferred tax assets and transfer pricing. Forward-looking statements are contained in thesections entitled “II. 【Business Overview】, 4. 【Risk Factors】” and elsewhere in this report.
The forward-looking statements are subject to various risks and uncertainties. Information contained in the sections
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 68th Fiscal Year1

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

2

I.

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

2

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

2

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

4

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

5

4.【Information on Consolidated Affiliates】…………………………………………………………………….

7

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

9【Business Overview】……………………………………………………………………………………………

10

1.【Summary of Business Results】……………………………………………………………………………...

10

2.【Production, Orders Received, and Sales】…………………………………………………………………...

14

3.【Management Issues】………………………………………………………………………………………...

15

4.【Risk Factors】 ………………………………………………………………………………………………..

19

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

23

6.【Research and Development】………………………………………………………………………………...

24

II.

III.

IV.

V.

7.【Analyses of Financial Position, Operating Results, and Cash Flows】………………………………………

25【Property, Plants, and Equipment】……………………………………………………………………………...

31

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

31

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

31

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

33【Information on the Company】…………………………………………………………………………………

34

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

34

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

80

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

81

4.【Changes in Share Prices】……………………………………………………………………………………

81

5.【Directors and Audit & Supervisory Board Members】……………………………………………………

82

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

85【Financial Information】………………………………………………………………………………………… 102
1.【Consolidated Financial Statements】………………………………………………………………………... 102

VI.

【Stock-Related Administration for the Company】……………………………………………………………... 148

VII. 【Reference Information on the Company】……………………………………………………………………... 149
1.【Information on the Parent Company】………………………………………………………………………. 149
2.【Other Reference Information】……………………………………………………………………………… 149
Part II【Information on Guarantors, etc., for the Company】…………………………………………………………... 150

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, 2016

【Fiscal Year】

The 68th Fiscal Year (from April 1, 2015 to March 31, 2016)【Company Name】

KABUSHIKI KAISHA WACOAL HOLDINGS【Company Name in English】

WACOAL HOLDINGS CORP.

【Position and Name of Representative】

Yoshikata Tsukamoto, President and Representative Director【Address of Head Office】

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

Kyoto (075) 682-1007【Contact Person】

Kenya Yamamoto, General Manager of Accounting Department【Contact Address】

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

Kyoto (075) 682-1007【Contact Person】

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

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

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

64th

65th

66th

67th

68th

Year-EndMarch 2012

March 2013

March 2014

March 2015

March 2016

Sales

171,897

180,230

193,781

191,765

202,917

Operating income

10,377

8,499

13,860

7,082

13,865

Net income attributable to
Wacoal Holdings Corp.

6,913

7,880

10,1068,444

11,159Comprehensive income

6,862

19,34922,74928,813(49)

Total shareholders’ equity

171,496

186,646

205,106

228,857

224,374

Total assets

221,098

254,536

271,988

300,272

292,854(yen)

1,217.57

1,325.19

1,456.32

1,624.93

1,592.90

(yen)

49.08

55.95

71.75

59.95

79.23

(yen)

49.02

55.86

71.61

59.80

79.00

Shareholders’ equity ratio

(%)

77.6

73.3

75.4

76.2

76.6

Return on equity

(%)

4.1

4.4

5.2

3.9

4.9

Price earnings ratio(times)

19.99

18.72

14.68

22.55

16.95

Net cash provided by operating
activities

10,06012,3098,949

14,337

12,635

Net cash provided by (used in)investment activities(3,467)(23,520)

1,658

164

(11,407)

Net cash provided by (used in)financing activities(2,824)

5,379(5,554)(8,391)(4,547)

Cash and cash equivalents at endof year29,98524,51430,65838,41034,05916,524

18,65018,912

18,986

20,655[1,319][1,259][1,391][1,210][1,237]

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

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

The foregoing consolidated financial data has been prepared in conformity with accounting principles generally acceptedin the United States of America (U.S. GAAP). In the above table, operating income is stated instead of ordinary income.

2.
3.

Sales do not include consumption taxes, etc.
For the 64th and 66th fiscal years, certain subsidiaries changed their fiscal year ends from their former fiscal year ends toMarch 31 to more closely conform with the fiscal year end of the parent company. Accordingly, in order to reflect thechange, the consolidated financial statements of the fiscal years prior to the 65th fiscal year have been adjusted
retrospectively.

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

64th

65th

66th

67th

68th

Year-EndMarch 2012

March 2013

March 2014

March 2015

March 2016

Operating revenue

7,874

8,705

8,967

10,898

10,934

Ordinary income

3,981

4,571

5,301

7,350

7,044

Net income (loss)

3,756

4,837

4,955

(541)

6,739

Common stock

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

143,378

143,378

143,378

143,378

Net assets

143,380

144,513

145,605

140,578

143,135

Total assets

146,341

174,280

177,411

168,762

163,972

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

1,016.54

1,024.27

1,031.57

995.481,013.19

Dividends per share(interim dividends per
share)

(yen)

28.00
(－)

28.00
(－)

33.00
(－)

30.00
(－)

33.00
(－)

Net income (loss) per share

(yen)

26.67

34.34

35.18

(3.84)

47.85

Diluted net earnings per
share

(yen)

26.63

34.28

35.10

－

47.69

Shareholders’ equity ratio

(%)

97.8

82.7

81.8

83.0

87.0

Return on equity

(%)

2.6

3.3

3.4

－

4.7

Price earnings ratio(times)

36.78

29.49

29.93

－

28.06

Dividend payout ratio

(%)

104.9

81.5

93.7

－

68.9

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

69
[－]

71
[－]

80
[－]

80
[－]

81
[－]

(Note)

1.
2.
3.
4.

Operating revenue does not include consumption taxes, etc.
Dividends per share for the 66th fiscal year include a commemorative dividend of 3.00 yen in commemoration of the 50th
anniversary of our listing.
Diluted net earnings per share data for the 67th fiscal year is not presented since a net loss was recorded.
Return on equity, price earnings ratio and dividend payout ratio for the 67th fiscal year are not presented since a net loss wasrecorded.

-3-

2. 【History】
June 1946
November 1949
June 1951
November 1957
November 1959
June 1964
September 1964

Wako Shoji founded by late Koichi Tsukamoto
Wako Shoji Corp. established with 1 million yen in capital (Nakagyo-ku, Kyoto)
Head office relocated to Anekoji-agaru, Muromachi-dori, Nakagyo-ku, Kyoto; plant opened; self-manufacturing
beginsCompany name changed to Wacoal Inc.
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

August 1970

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

October 1970
October 1970

A joint venture company, THAI WACOAL CO., LTD. (current THAI WACOAL PUBLIC CO., LTD.)established in 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
June 1981
March 1982

Acquired shares from Torica Inc., a subsidiary of the Company, by way of capital increase through third-party
allocation
WACOAL AMERICA, INC. (current WACOAL INTERNATIONAL CORP.) established as an overseas
subsidiary

February 1983

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

December 1983

THAI WACOAL CO., LTD., listed on The Stock Exchange of Thailand

January 1986
April 1989

Beijing Wacoal Co., Ltd. (current Wacoal China Co., Ltd.), established as joint venture company
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 venturecompany
Joint venture agreement for Korea Wacoal Corp. canceled; investment made into Shinyoung Inc. (current
Shinyoung Wacoal Inc.) in Republic of Korea

April 1993
January 1995
June 1997
December 2000

Guangdong Wacoal Inc. established as an overseas subsidiary
VIETNAM WACOAL CORP. established as an overseas subsidiary
Joint venture agreement for Beijing Wacoal Co., Ltd. (current Wacoal China Co., Ltd.), canceled andreestablished as Beijing Wacoal Co., Ltd., a wholly owned subsidiary

January 2002

WACOAL (UK) LTD. established as an overseas subsidiary

August 2002

WACOAL SPORTS SCIENCE CORP. established as an overseas subsidiary

May 2003

WACOAL MALAYSIA SDN BHD established as a joint venture company

August 2003

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

October 2005

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

January 2008

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

August 2009

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

April 2012
January 2016

Eveden Group Limited (currently Wacoal Europe Ltd.) became a wholly owned Wacoal subsidiary through theacquisition 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-4-3. 【Description of Business】
Our corporate group consists of one holding company (Wacoal Holdings Corp.), 58 subsidiaries, and nine affiliates, and isprincipally engaged in the manufacturing and wholesale distribution of innerwear (primarily women’s foundation wear, lingerie,nightwear, and children’s underwear), outerwear, sportswear, and other textile goods and related products, as well as the direct sale ofcertain products to consumers. Our corporate group also conducts business in the restaurant, culture, service, and interior designbusinesses.
The Company falls under the definition of “Specified Listed Companies” as prescribed under Paragraph 2, Article 49 of the
Cabinet Office Ordinance on Restrictions on Securities Transactions, etc. For this reason, whether an incident is minor (and not amaterial fact) under the insider trading restrictions will be determined on the basis of consolidated figures.
Segment information and a summary of the various companies that make up our corporate group are as follows:(1) Wacoal Business (Domestic)
This segment is composed of 11 subsidiaries in Japan.
Among 11 subsidiaries, Wacoal Corp. engages in the planning and designing of the above-mentioned products, procurementof materials for the above-mentioned products, commercialization of semifinished products purchased from sewing companies inJapan 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 and distributors in Japan andoverseas. 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 semifinishedproducts to Wacoal Corp. We have 4 sales companies, including Une Nana Cool Corp., which conduct retail sales of innerwear,
outerwear and swimsuit products.
(2) Wacoal Business (Overseas)
This segment is composed of 40 companies, including our overseas subsidiaries and affiliates.
Among our 33 overseas subsidiaries, nine companies are located in North and Central America; seven companies are locatedin Europe; and 17 companies are located in Asia/Oceania. Seven overseas affiliates are located in Asia.
Among our nine overseas subsidiaries in North and Central America, Wacoal Dominicana Corp., an apparel manufacturing
company of innerwear products, ships its products to WACOAL AMERICA, INC., a manufacturing and sales company, which
supplies these products to end consumers through local department stores and specialty retail stores. In addition, Eveden Inc., asales company, distributes innerwear products, which are mainly supplied from Wacoal Timex LTD., WACOAL EMEA LTD.,
and Eveden Huit SAS.
Among our seven overseas subsidiaries in Europe, Eveden Huit SAS. designs and markets innerwear products. WACOALEMEA LTD., distributes products to end consumers through department stores and specialty retail stores mainly in the United
Kingdom.
Our two subsidiaries and four affiliates in Asia/Oceania are manufacturing and sales companies, which distribute products to
end-consumers through their local department stores and specialty retail stores, and also distribute a part of their products to
Wacoal Corp. and sales companies in Asia. Our sales companies include six subsidiaries, including Wacoal Singapore PrivateLtd., Eveden Israel Ltd., and one affiliate. These sales companies distribute innerwear products, which are mainly supplied fromthe group companies, to their local department stores, specialty retail stores and directly managed retail stores. Our nine 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 two investment companies which make investments inthe local manufacturing subsidiary and local affiliate that manufactures and sells innerwear.
(3) Peach John BusinessThis segment is composed of three companies, including our domestic and overseas subsidiaries. The one domestic subsidiaryand two overseas subsidiaries are sales companies, and Peach John mainly engages in the retail sales of products that are
independently supplied mainly from nongroup companies.
(4) Other
This segment is composed of a total of 13 companies, including five domestic subsidiaries, six overseas subsidiaries, one
domestic affiliate, and one overseas affiliate.
Among the five domestic subsidiaries, Nanasai Co., Ltd. (“Nanasai”) engages in the manufacture and sale of mannequins andfixtures, and interior design work and Lecien Corporation engages in the manufacture and wholesale distribution of women’s
innerwear and clothing, lace, thread, and fabrics for handicrafts. Our three remaining subsidiaries include an apparel
manufacturing company and two other subsidiaries which engage in other textile-related business, real estate leasing business, andother business.
Overseas, six subsidiaries are located in Asia.
Four of our subsidiaries in Asia are apparel manufacturing companies. The other two subsidiaries engage in the manufactureand sale of mannequins and fixtures, interior design work, and other textile-related business.
The business distribution diagram of these subsidiaries and affiliates follows on the next page:-5-

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

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

(Manufacturing and Sales: 1 company)
Wacoal Corp.

(Cultural Business Service: 1 company)
Wacoal Art Center Co., Ltd.
(Sales: 4 companies)
Une Nana Cool Corp.
3 other companies

Wacoal Business (Domestic)

Peach John Business

Wacoal Business (Overseas)

Other(North/Central America: 9 companies)
WACOAL INTERNATIONAL CORP. (U.S.)(Sales: 3 companies)
Peach John Co., Ltd.
2 other companies

WACOAL AMERICA, INC.
WACOAL DOMINICANA CORP.

(U.S.)(Dominican Republic)
EVEDEN INC(U.S.)
5 other companies(Lecien: 8 companies)
Lecien Corporation
LECIEN (VIETNAM) CO., LTD.
(Vietnam)
Out of 6 other companies,
1 equity method affiliate(Europe: 7 companies)
WACOAL EUROPE LTD.

(U.K.)WACOAL EMEA LTD.
WACOAL EUROPE SAS.

(U.K.)(France)4 other companies(Asia/Oceania: 24 companies)
Wacoal Investment Co., Ltd.
(Taiwan)
WACOAL INTERNATIONAL HONG
KONG CO., LTD.
(Hong Kong)
Wacoal China Co., Ltd.
(China)WACOAL SINGAPORE PRIVATE LTD.
(Singapore)
WACOAL HONG KONG CO., LTD.
(Hong Kong)
Guangdong Wacoal Inc.
(China)Wacoal Timex Limited(Sri Lanka)
A TECH TEXTILE CO., LTD(Thailand)*Shinyoung Wacoal Inc.
(South Korea)*Taiwan Wacoal Co., Ltd.
(Taiwan)*THAI WACOAL PUBLIC CO., LTD(Thailand)
Out of 13 other companies,
4 equity method affiliates

Wacoal Holdings Corp. (holding company)
Without mark: a consolidated subsidiary*: an equity method affiliate-6-(Other: 5 companies)
Nanasai Co., Ltd.
Wacoal Service Co., Ltd.
Wacoal Career Service Corp.
*House of Rose Co., Ltd.
1 other company

4. 【Information on Consolidated Subsidiaries and Consolidated Affiliates】
Company Name

Location

Capital(Millions of yen)

Principal Business

Percentage of
Voting Rights
Owned or Held(%)

Relationship
Number ofCompany Officer(s)holding a Position Lease/Rent of Facilities
as Officer in such
Affiliate(Consolidated Subsidiary)*1, *6

Minami-ku, Kyoto

5,000

Peach John Co., Ltd.

Shibuya-ku, Tokyo

90

Lecien Corp.

Minato-ku, Kyoto

90

Wacoal Corp.

Wacoal Business (Domestic)(Manufacture and sale of garments)
Peach John Business(Sale of garments)
Other(Manufacture and sale of garments

100

4

100

2

100

2

and other textile-related products)
Kyushu Wacoal Manufacturing Corp.
Niigata Wacoal Sewing Corp.

Unzen-shi,
NagasakiNishikan-ku,
Niigata

70
50

Torica Inc.

Ibaraki-shi, Osaka

92

Nanasai Co., Ltd.

Minami-ku, Kyoto

90*1
WACOAL INTERNATIONAL CORP.
WACOAL AMERICA, INC.

New York, USA

USD
New York, USA
Santo Domingo,

WACOAL DOMINICANA CORP.

WACOAL EUROPE LTD.
WACOAL EMEA LTD.

Dominican
Republic
Northamptonshire,UK
Northamptonshire,UK

WACOAL EUROPE SAS.

Saint-Denis, France

WACOAL HONG KONG CO., LTD.

Hong Kong*1
WACOAL INTERNATIONAL HONG
KONGCO., LTD.
VIETNAM WACOAL CORP.

20,000thousand
2,062 thousand
USD
7 thousand
USD
175 thousand
GBP
250 thousandGBP
8 thousand
EUR
3,000 thousand
HK$373,690

Hong Kong

Bien Hoa, Vietnam

thousandHK$
54,604 million
VND
59,000Wacoal Investment Co., Ltd.

Taipei, Taiwan

Guandong Wacoal Inc.

Guangzhou, China

thousandNT$
17,730thousand
RMB*1
Wacoal China Co., Ltd.

Beijing, China

189,364
thousand
RMB

Wacoal Business (Domestic)

100(Manufacture and sale of garments)(100）

Same as above
Same as above
Other(Manufacture and sale of mannequinsand display fixtures; interior designand construction work of stores)
Wacoal Business (Overseas)(Investment and funding in U.S.
affiliates)

(100）

57
(57）

99

100
(100）

Wacoal Business (Overseas)

100(Manufacture and sale of garments)(100）

Wacoal Business (Overseas)(Sewing and sale of various textile
products)
Wacoal Business (Overseas)(Investment in affiliates)

100
(100）

100

Wacoal Business (Overseas)

100(Manufacture and sale of garments)(100）

Wacoal Business (Overseas)

100(Sale of garments)(100）

Same as above

80
(80）

Wacoal Business (Overseas)

100(Import and export of raw materials)(100）

Wacoal Business (Overseas)(Sewing and sale of various textile

100

products)(100）

Wacoal Business (Overseas)

100(Investment in Taiwan affiliates)(100）

Wacoal Business (Overseas)(Sewing and sale of various textile

100

products)(100）

Wacoal Business (Overseas)

100(Manufacture and sale of garments)(100）

Wacoal Business (Overseas)

Bangkok, Thailand

1,000
million
THB

Bangkok, Thailand

120 million
THB

PT.INDONESIA WACOAL

Bogor, Indonesia

2,400 million
IDR

Same as above

Shinyoung Wacoal Inc.

Seoul, South Korea

4,500 million
WON

Same as above

Taiwan Wacoal Co., Ltd.

Taoyuan, Taiwan*1
A TECH TEXTILE CO., LTD.

100

(Manufacture and sale of raw
materials)

54
(54）

－

Rent of officebuilding－
Rent of storage
building
Rent of officebuilding－

Same as above－

Same as above

2

Same as above

2

－

2

－

－

－

2

－

－

－

－

－

1

－

2

－

－

－

3

－

－

－

1

－

－

－

2

－

2

－

1

－

3

－

－

－

38 other companies(Equity Method Affiliate)
THAI WACOAL PUBLIC CO., LTD.

*4, *5
House of Rose Co., Ltd.

800 million
NT$

Wacoal Business (Overseas)(Manufacture and sale of garments)

Same as above

34
(34）

42
(42）

25
50
(50）

Other
Minato-ku, Tokyo

934(Manufacture and sale of cosmetics
products)

4 other companies

-7-

24

(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 the percentage of indirect
holding.
3 The name of operating segments is shown under the “Principal Business” column.
*4 The Company executed a business alliance agreement between House of Rose Co., Ltd.
*5 House of Rose Co., Ltd., is a company that is obliged to file an annual securities report.
*6 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

110,123 million yen(ii) Ordinary income

10,056 million yen(iii) Net income

8,231 million yen(iv) Net assets

105,798 million yen(v) Total assets

138,550 million yen-8-5. 【Employees】(1) Employees within group
As of March 31, 2016
Name of Operating Segment

Number of Employees

Wacoal Business (Domestic)

7,827[1,087]

Wacoal Business (Overseas)

10,457

[48]

410

[41]

1,961

[61]

20,655[1,237]Peach John Business
Other
Total
(Note)

1

2
3

The number of employees is the number of individuals working within our group (excludes individuals seconded from ourgroup to third parties, but includes individuals seconded from third parties to our group). The average number of temporary
employees is indicated in brackets for the current consolidated fiscal year.
Temporary employees include temporary staff and part-time workers whose working period is about 3 months.
The number of employees increased by 1,669 persons as compared to the end of prior fiscal year due to the acquisition ofbusiness by our two subsidiaries in February 2016.

(2) Employees of the Company
As of March 31, 2016
Number of Employees
81(Note)

1
2
3

Average Age

Average Years of Service
45.5

Average Annual Salary (Yen)

20.8

6,164,292

The number of employees is the number of individuals working within the Company.
The average annual salary includes bonus and extra wages.
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 member of The JapaneseFederation of Textile, Chemical, Food, Commercial, Service, and General Workers’ Unions.
Certain domestic subsidiaries have their own labor unions.
Our relationship with Labor Unions is very stable and we have nothing to report on this matter.

-9-II. Business Overview
1. 【Summary of Business Results】(1) Summary of Operations
Our group entered the last year of our three-year mid-term plan (from fiscal year 2014 to fiscal year 2016), and we (primarily
Wacoal Corp., our core operating entity) continued to make efforts to expand our share of sales by responding to the diversifying
domestic women’s innerwear market, establish a system for our business other than the women’s innerwear business and strengthen
our growth and profitability by actively developing our overseas business.
As a result of the above, with respect to our consolidated business results for fiscal year ended March 31, 2016, sales from ourdomestic business exceeded the results for the previous fiscal year as a result of the inclusion of sales of Ai Co., Ltd. and the increasein shops of our retail business. Overall sales exceeded the results for the previous fiscal year due to such superior performance of ourdomestic business and our overseas business, which were inflated by the depreciation of the Japanese yen. In terms of profit, overall
operating income largely exceeded the results for the previous fiscal year as a result of the impairment charges which we recognized
in relation to our Peach John business during the previous fiscal year.

Net Sales:

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

Operating income:

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

Income before income taxes andequity in net income of affiliatedcompanies:

14,957 million yen

Net income attributable to Wacoal
Holdings Corp.:

11,159 million yen(an increase of 31.9% as compared to the previous fiscal year)(an increase of 32.2% as compared to the previous fiscal year)
The following is a summary of operations by operating segment.
(i)

Wacoal Business (Domestic)In our domestic business, we focused on establishing a system which can respond to changes in the external
environment, and made efforts to expand customer contact, by taking measures to respond to growing inbound consumption andcarrying out cross-channel initiatives in rural and unexploited areas. We also made efforts to develop and expand our products
targeting a generation that only recently started wearing brassieres, and middle-aged and senior consumers.
With respect to our Wacoal brand business, our core brassieres products and products for seniors showed favorable
performance. Despite the strong continued inbound demand at department stores in urban areas and our successful promotion of
red underwear products, in connection with an old saying that wearing red underwear brings good luck, in the last six months ofthe current fiscal year, overall sales remained unchanged from the previous fiscal year.
With respect to our Wing brand business, overall sales remained unchanged from the previous fiscal year due to the
expansion of shops handling our products for teens as well as the strong performance of our core brassieres products, mainly ourregular items.
In our retail business, sales from our directly managed retail store, AMPHI, showed steady performance as a result of
our successful initiatives of exclusive offers for members and various monthly sales promotions, and a significant increase ofsales through e-commerce websites of other companies. Sales were also largely driven by inbound demand with respect to our
Wacoal Factory Store in outlet malls, particularly in areas around airports, and as a result, overall sales largely exceeded theresults for the previous fiscal year.
In our wellness business, with respect to our sports conditioning wear “CW-X” brand products, while sales throughexisting channels, including sports specialty stores, showed weak performance since we were not successful in attracting newcustomers, overall sales remained unchanged from the previous fiscal year as a result of offering and expanding new products
for daily use.
In our catalog sales business, sales from our catalog products were below the results from the previous fiscal year due
to the impact of reducing the number of products in our catalogues and decreasing the number of issues of our main catalogues
to improve profitability. Although our internet sales from our website performed strongly as a result of an increase in thenumber of visitors of our website because we were no longer affected by the shutdown of our website that occurred in theprevious year and as a result of our strengthening of our efforts to attract visitors using smartphones, overall sales fell below theresults for the previous fiscal year.
- 10 -

With respect to Ai Co., Ltd., our domestic subsidiary which handles the swimwear business and directly managed
underwear business, which we acquired from San-Ai group during the current fiscal year, sales from the swimwear businesswere below the sales we anticipated in our plan due to unstable summer weather. In addition, sales from the underwear businessalso performed poorly, and were below the sales we anticipated in our plan.
In summary, overall sales attributable to our “Wacoal Business (Domestic)” segment exceeded the results for theprevious fiscal year due to increased sales from Wacoal Corp., our core operating entity, and the inclusion of sales from Ai Co.,
Ltd. With respect to profitability, our operating income also exceeded the results for the previous fiscal year as a result of theincreased sales from Wacoal Corp.
Net Sales:

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

Operating income:

8,810 million yen(an increase of 4.3% as compared to the previous fiscal year)(ii) Wacoal Business (Overseas)
In the United States, Wacoal America, Inc. made efforts to improve profits by expanding its share in the high-end
market and through enhancing sales of our “b.tempt’d” brand products. Despite inventory control at department stores in the
United States, overall sales exceeded the results for the previous fiscal year as a result of strong performance of our core Wacoal
brand products and favorable results of our sales from e-commerce websites and of our exports to surrounding countries(Canada). In terms of profit, operating income on a local currency basis fell below the results for the previous fiscal year due toan increase in selling, general and administrative expenses which resulted from increased labor costs, while we controlled PR
related costs. However, operating income on a yen converted basis exceeded the results for the previous fiscal year due to thedepreciated yen.
With respect to Wacoal Europe, we made efforts to promote our Wacoal brands’ recognition and to expand sales of the
Wacoal brand across Europe and Australia. With regard to sales, sales in the United States and Australia were strong, whilesales in the United Kingdom remained unchanged from the previous fiscal year. However, consumer spending in the Eurozone
area did not show recovery due to an unstable political and economic atmosphere. Therefore, sales in the Eurozone area fellsignificantly below the results for the previous fiscal year, due to the impact of the weak performance of our Huit brand products,
in addition to the poor performance overall, particularly in France. As a result, total sales on a local currency basis fell below theresults for the previous fiscal year, but sales on a yen converted basis remained unchanged from the previous fiscal year. With
regard to profit, operating income largely fell below the results for the previous fiscal year as a result of decreased sales and anincrease in purchase costs due to the appreciation of the dollar.
With respect to our business in China, we made efforts to expand our brands targeting the middle-class market and toestablish a profit system. Sales during the first six months of the current fiscal year from January to June showed favorable
performance. Although sales growth slowed down during the second half of the current fiscal year from July to December
during which there was increasing concern that the economic slowdown was going to intensify as a result of decreasing thenumber of shop openings of LA ROSABELLO, our brand targeting the middle-class market, and failing to achieve our sales
target for our campaign on e-commerce websites operated by other companies in November 2015, overall sales exceeded theresults for the previous fiscal year. In terms of profit, operating income largely exceeded the results for the previous fiscal year
due to increased sales.
As a result of the above, with respect to the overall sales and operating income attributable to our “Wacoal Business(Overseas)” segment, overall sales exceeded the results for the previous fiscal year, while operating income fell below the results
for the previous fiscal year.
Net Sales:

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

Operating income:

4,433 million yen(a decrease of 7.2% as compared to the previous fiscal year)(iii) Peach John BusinessWith respect to Peach John Co., Ltd., we made efforts to maintain existing customer contacts in our three-brandframework and to expand contact with new customers through shop openings. Sales from our core mail-order catalogues largely
fell below the results for the previous fiscal year due to the decreased number of users visiting e-commerce websites. On theother hand, inbound demand contributed to sales from our domestic directly managed retail stores which largely exceeded theresults for the previous fiscal year as a result of keeping a fresh merchandising approach by changing the products offered in our
shops on a weekly basis. With respect to our overseas business, sales largely exceeded the results for the previous fiscal year
due to a significant expansion of sales through e-commerce websites of other companies in China despite the weak performance- 11 -

of shop sales in Hong Kong, which offset a decrease in sales resulting from our initiatives to discontinue our underperforming
shops for our business.
As a result of the above, overall sales from our Peach John business fell below the results for the previous fiscal year.
In terms of profit, our operating income significantly improved from the previous fiscal year, during which we recorded an
operating loss, as a result of our efforts to improve sales profit by reviewing our pricing method and by holding fewer discountsalesas as well as the impairment charges which we recognized during the previous fiscal year, in addition to a decrease inoperating loss incurred from our business in China.
Net Sales:

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

Operating income:

258 million yen(6,296 million yen of operating loss recorded for the previous fiscal year)(iv) OtherWith respect to our business under the “Other” segment, we made efforts in establishing a stable profit structure and instrengthening management bases.
With respect to the business of Lecien Corporation (“Lecien”), we made efforts to cultivate new sales channels and tobuild up our production base. Overall sales from Lecien fell below the results for the previous fiscal year due to the weak sales
from our apparel business division, although sales of our products to our major clients performed strongly in our core innerwear
business division. In terms of profit, we recorded an operating loss, although there was a little sign of recovery compared to theprevious fiscal year as a result of the reduced cost of raw materials and reviewing purchasing prices.
As for Nanasai Co., Ltd. (“Nanasai”), we made efforts to maintain and expand our rental business, as well as increase
sales by acquiring new construction businesses. Sales from the rental business fell below the results for the previous fiscal year.
As for our construction business, although we received orders for the construction of new commercial facilities and orders fromapparel brands, sales also fell below the results for the previous fiscal year as we did not receive as large-scale orders as we didduring the previous fiscal year. Sales from our sales business showed an increase in the delivery of fixtures in connection withthe construction orders received and largely exceeded the results for the previous fiscal year. As a result, overall sales exceeded
the results for the previous fiscal year. In terms of profit, operating income largely exceeded the results for the previous fiscal
year due to increased sales.
As a result of the above, with respect to the overall sales and operating income attributable to our “Other” segment,
overall sales fell below the results for the previous fiscal year, while operating income largely exceeded the results for theprevious fiscal year.
Net Sales:

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

Operating income:

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

The following is a summary of operations by region:
(i)

Japan

With respect to Wacoal Corp., while consumers continue to be budget-conscious after the consumption tax increase,sales exceeded the results for the previous fiscal year as a result of the strong continued inbound demand, especially at
department stores in some urban areas and outlet malls in areas around airports, and of the increase in shops that are part of ourretail business. In terms of profit, operating income also exceeded the results for the previous fiscal year due to our efforts tohold down an increase in costs and increased sales.
Sales from Ai Co., Ltd., our domestic subsidiary which handles the swimwear business and directly managed
underwear business, which we acquired from San-Ai group during the current fiscal year were below the sales we anticipated in
our plan due to unstable summer weather.
With respect to Peach John, while inbound demand contributed to favorable sales from our domestic directly managed
retail stores, overall sales fell below the results for the previous fiscal year due to decreased sales affected by the performance ofour core mail-order catalogues, which was impacted by a decrease in the number of users visiting e-commerce websites. In
terms of profit, our operating income significantly improved from the previous fiscal year, during which we recorded an
operating loss, as a result of our efforts to improve sales profit by reviewing our pricing methods and by holding fewer discountsales, as well as due to the impairment charges which we recognized during the previous fiscal year.

- 12 -

With respect to the business of Lecien Corporation (“Lecien”), overall sales fell below the results for the previous
fiscal year due to the weak sales from our apparel business division, although sales from our core innerwear business divisionperformed strongly. In terms of profit, we recorded an operating loss due to an increase in purchase costs impacted by thedepreciation of the yen which could not be absorbed by our efforts to reduce the cost of raw materials.
As for Nanasai Co., Ltd. (“Nanasai”), our sales business showed a significant expansion as a result of new transactions,and accordingly, overall sales exceeded the results for the previous fiscal year. In terms of profit, operating income exceeded theresults for the previous fiscal year due to increased sales.
As a result of the above, sales from our business in Japan amounted to 150,673 million yen, an increase of 5.2%
compared to the previous fiscal year.
(ii) Asia/Oceania
With respect to Wacoal China, sales during the first six months of the current fiscal year from January to June showedfavorable performance. Although sales growth slowed down during the second half of the current fiscal year from July to
December during which there was increasing concern that the economic slowdown was going to intensify as a result of adecreasing number of shop openings of LA ROSABELLE, our brand targeting the middle-class market, and of our failing toachieve our sales target for our campaign on external e-commerce websites, overall sales exceeded the results for the previous
fiscal year. In terms of profit, operating income largely exceeded the results for the previous fiscal year due to increased sales
and the closure of underperforming shops.
With respect to the directly-managed overseas stores of Peach John, sales exceeded the results for the previous fiscal
year as a result of our initiatives to discontinue our underperforming shops for our business and to focus our sales on external ecommerce websites in China, despite the weak performance of shop sales in Hong Kong.
As a result of the above, sales from our business in Asia/Oceania amounted to 17,906 million yen, an increase of
10.1% as compared to the previous fiscal year.
(iii) Europe/North America
With respect to Wacoal America Inc., overall sales exceeded the results for the previous fiscal year as a result of strong
performance of our core Wacoal brand products and favorable results of our sales from e-commerce websites and a surrounding
country (Canada). In terms of profit, operating income on a local basis fell below the results for the previous fiscal year due toan increase in selling, general and administrative expenses, which resulted from increased labor costs. However, operating
income on a yen converted basis exceeded the results for the previous fiscal year due to the depreciated yen.
With respect to Wacoal Europe, sales in the United Kingdom remained unchanged from the previous fiscal year, whilesales in the United States and Australia were strong. However, sales in the Eurozone area showed poor performance,
particularly in France. Our Huit brand products also showed weak performance, and as a result, overall sales on a local currency
basis fell below the results for the previous fiscal year, but sales on a yen converted basis remained unchanged from the previous
fiscal year. With regard to profit, operating income largely fell below the results for the previous fiscal year as a result of
decreased sales and an increase in purchase costs due to the appreciation of the dollar.
As a result of the above, sales from our business in Europe/North America amounted to 34,338 million yen, an
increase of 6.5% as compared to the previous fiscal year.
(2) Cash Flow Status
The balance of cash and cash equivalents at the end of fiscal year 2016 was 34,059 million yen, a decrease of 4,351 million yen
as compared to the end of the previous fiscal year.
(Cash flow provided by operating activities)
Cash flow provided by operating activities during the fiscal year 2016 was 12,635 million yen, a decrease of 1,702 million yen
as compared to the previous fiscal year. It is the result after the net income of 11,472 million yen was adjusted for depreciation
expenses, deferred taxes and changes in assets and liabilities.
(Cash flow used in investing activities)
Cash flow used in investing activities during the fiscal year 2016 was 11,407 million yen, as compared to 164 million yen of
cash inflow for the previous fiscal year, due to capital expenditures and business acquisitions.
(Cash flow used in financing activities)
Cash flow used in financing activities during the fiscal year 2016 was 4,547 million yen, a decrease of 3,844 million yen ascompared to the previous fiscal year, due to the cash dividend payments.

- 13 -

2. 【Production, Orders Received, and Sales】(1) Production Results
Our consolidated production results by operating segment for fiscal year ended March 2016 are as follows. No data is available
for the Peach John Business since all of its entities are sales companies. The production results for other segment are not shownsince it is hard to define such term in this segment.
Changes as Compared toName of Operating Segment
Amount (Millions of yen)Previous Fiscal Year (%)
Wacoal Business (Domestic)

48,542

100.6

Wacoal Business (Overseas)

13,743107.3

62,285

102.0

Total
(Note)

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

(2) Orders Received
Among the Other segment, the department of Nanasai, which handles interior design and construction of general housings andstores at commercial facilities, adopts the build-to-order production system.
The status of orders received for other segment for fiscal year ended March 2016 is as follows:
Amount of Orders Changes as Compared Balance of Amount of Changes as Compared
Name of Operating Segment
Received
to Previous Fiscal
Orders Received
to Previous Fiscal(Millions of yen)
Year (%)(Millions of yen)
Year (%)
Other(Note)

5,855

96.4

220

338.5

The amounts in the above table do not include consumption tax, etc.

(3) Sales Results
Our consolidated sales results by operating segment for fiscal year ended March 2016 are as follows:
Changes as Compared
Name of Operating Segment
Amount (Millions of yen)to Previous Fiscal Year
Wacoal Business (Domestic)

120,570

107.5

Wacoal Business (Overseas)

51,869107.8

Peach John Business

11,190

96.3

Other

19,28897.3

202,917

105.8

Total
(Note)

1

None of the purchasers’ sales accounts for 10% or more of the total sales results.

2

The amounts in the above table do not include consumption tax, etc.

- 14 -

3. 【Management Issues】(1) Business and Financial Issues to Address
Maintaining and/or expanding sales and profits from our domestic business are essential factors for our group’s
sustainable growth. The low growth in real disposal income causes customers to be more budget-minded and consumer
spending trends remain unpredictable. Also, as the closing of commercial facilities continues, the environment for domestic
women’s innerwear becomes very difficult. On the other hand, growth in inbound consumption due to an increase in the numberof tourists visiting Japan, a change in the way we interact with our customers due to the expansion of e-commerce websites,
women’s participation and success in society, and the 2020 Tokyo Olympics are good opportunities for us to create new markets.
In this external environment, we will revitalize the entire market as a leader in the industry, and actively makeinvestments to enhance customer contact and to review our business platform. With respect to our sales channel strategy, we
will expand sales in the growing sales channels by reforming our sales entities in the existing channels and improve theirproductivity, by leveraging our strengths of having both e-commerce websites and a shops sales channel, and by building asystem that will provide mutual supplement effects.
In terms of product strategy, we will develop high value-added products with new concept of beauty and comfort byusing our own data and know-how which we gained from our longtime research and development. We will also strengthen our
approach to the first-bra age group and senior customers. Besides our domestic women’s innerwear market, we will promote a
growth strategy for new markets so that they can potentially become our new business lines.
Our overseas business is and will always be our group’s biggest growth engine. An accurate understanding of thesocial environment and consumers’ needs in each country and region and the establishment of community-based product andmarketing strategies will be essential for us. In addition to expanding sales in emerging markets, we will work to enhance ourbrand recognition in the United States, to enhance our management system for our business in Europe, and to further improve
profitability for our business in China, and work to build a stable management structure in these three largest markets in theworld.
We are also facing challenges in an increasingly difficult external environment for manufacturing due to increasingsalaries in Asian countries and risks from the procurement of raw materials. We will strengthen the collaboration among groupcompanies to extend our global supply chain and to enable the improvement of product competitiveness and a stable supply.
(2) Basic Policies on the Nature of Personnel who should Control the Determination of Financial and Business Policies of Wacoal
Holdings Corp.
Basic policies on the nature of personnel who should control the determination of financial and business policies of
Wacoal Holdings Corp. have been prescribed as follows as of the filing date of this report (June 29, 2016).
(i) Details of Basic Policy
Since our establishment in 1949, we have strived to develop a domestic market for female innerwear (undergarments),
penetrate the global market, and establish our business with the aim of creating a global company through a 50-year long-term
management plan based on our business objectives of making and helping women in becoming beautiful and facilitating therealization of women’s desire to be beautiful. Moreover, as a leading female innerwear company, we have developed the
Wacoal brand, which has become widely accepted by both domestic and international consumers.
Our corporate value is mainly generated from (i) our strong market position and brand value in the intimate apparelmarket, which has been cultivated over a long period of time; (ii) our ability to develop highly functional, high value-added,
attractive products based on the results of human scientific research from a medium- to long-term perspective; (iii) our superb
product quality and supporting technical staff, as well as our highly productive global manufacturing and supply systems that use
excellent sewing technology; (iv) our close personal relationships with distributors in various sales channels, which link us with
consumers; (v) the trust of consumers that has been gained through direct communication and sales by our beauty advisers, whohave a sound knowledge of our products and a wealth of sales experience; and (vi) our good social standing established throughthe promotion of various social action programs, such as the “Remmama” project and “Pink Ribbon” activities, and our
corporate value and the common interests of our shareholders will suffer unless these “Wacoal strengths” are secured over the
medium to long term. We, therefore, believe that personnel who control the determination of financial and business policies
must fully understand these considerations and must be capable of securing and enhancing the corporate value and the common
interests of our shareholders over the medium to long term.
We will not uniformly reject an acquisition of a substantial shareholding of the Company, if it contributes to thecorporate value and the common interests of our shareholders. However, there are many acquisitions of substantial
shareholdings of companies that do not contribute to the corporate value of the target company or the common interests of ourshareholders. For example, this is the case where it is clear from the purpose of the acquisition that it will cause damage to thecorporate value of the target company or the common interests of our shareholders -- where it is likely that the shareholders arein effect being forced to sell their shares, where insufficient time or information is given for the Board of Directors and theshareholders of the target company to consider the conditions of the acquisition or for the Board of Directors of the target
company to make an alternative proposal, or where it is necessary for the target company to negotiate with the prospective
purchaser to obtain conditions that are more favorable than those proposed by the prospective purchaser.

- 15 -

In light of these circumstances, we believe that it is essential that we be ready at all times to implement a system thatwill prevent any acquisition that is contrary to the corporate value or the common interests of our shareholders by enabling ourshareholders to determine whether or not to accept such an acquisition and enabling our Board of Directors to secure anynecessary information and time to make an alternative proposal or to negotiate with the prospective purchaser on behalf of ourshareholders at the time of an acquisition of our shares.
(ii) Specific Details of Efforts- Special efforts toward ensuring effective use of company assets, appropriate formation of group companies, andimplementation of other basic policies(Efforts to improve corporate value)
We were restructured as a holding company in 2005 in order to realize our medium- and long-term strategies to further
enhance our corporate value, and further, we are promoting expansion of domestic and overseas business (including throughMergers and Acquisitions deals), making efforts to improve profitability, and working to secure and enhance the corporate value
and common interests of our shareholders under the medium-term and fiscal year management policies.
We will continue to conduct our business operations in order to build “Wacoal” as an enduring corporate brand while
improving Wacoal’s strengths that form the basis of our corporate value as described in Section (i) above, and being mindful of
our objectives in making and helping women in becoming beautiful and facilitating the realization of women’s desire to be
beautiful.
We will make efforts to enhance our corporate value by (i) improving the profitability of our domestic business, (ii)achieving further growth of our overseas business, (iii) achieving group synergies through collaboration and by strengthening
our competitiveness, (iv) improving the infrastructure for our group management base, and (v) taking on new business, which
are also the mid-term policies in our mid-term plan which will start during fiscal year 2017.
(Measures to Enhance Corporate Governance)
The purpose and basic policy of our group’s corporate governance is to continuously enhance our corporate value by
increasing transparency and securing the fairness and independence of our corporate management from the perspective of all
stakeholders, including our shareholders and customers.
The following bodies and systems have been established within the Company with the aim of enhancing our corporate
governance, and the entire Company is also working toward this goal.
As of March 31, 2016, our Board of Directors is composed of eight Directors. The board makes decisions on mattersconcerning important business, such as management policy and management strategy and matters stipulated by laws orordinances or our Articles of Incorporation. Three of these eight Directors are independent Outside Directors who give our
Board of Directors advice and guidance from an objective perspective based on their wealth of experience and knowledge ofadministration, management, culture and art. The term of office of each Director is one year, and we are further clarifying the
responsibilities of our management to our shareholders. Further, with respect to the nomination, promotion, and remuneration of
Directors, an “Executive Compensation Advisory Committee,” whose members include Outside Directors has been established,
and operates with a high degree of transparency and fairness.
We use an “Audit & Supervisory Board Member system,” and our Audit & Supervisory Board consists of five Audit& Supervisory Board Members, of which three are Outside Audit & Supervisory Board Members, as of March 31, 2016. The
function of our Audit & Supervisory Board is to monitor and supervise our management.
Further, all of the three Outside Directors and three Outside Audit & Supervisory Board Members have been
designated as our independent officers, and have been notified to the Tokyo Stock Exchange.
Wacoal Corp., our core business company, has adopted an executive officer system in order to separate management
supervision and management execution. “Group Management Rules” and “Group Accounting Rules” have been established for
Wacoal Corp. and all other group companies, and each group company conducts our business operations in accordance with bothsets of rules.
Further, the “Group Management Meeting” of our group that is composed of our Directors and Audit & Supervisory
Board Members has been established in the Company. This meeting considers matters concerning the management strategy ofour group and other important management issues, and conducts preliminary reviews of matters for review by our Board of
Directors together with the “Wacoal Senior Management Meeting,” which involves Directors, Audit & Supervisory Board
Members, and senior executive officers of Wacoal Corp.
Further, the “Quarterly Business Results Review Committee” has been established under the “Group Management
Meeting.” Every quarter, our Directors and Audit & Supervisory Board Members and the Directors, Audit & Supervisory Board
Members, and executive officers of Wacoal Corp. attend meetings of the Quarterly Business Results Review Committee andreview the business results of each company and business department. Also, under the “Group Management Meeting,’ we haveestablished the “Group Strategy Committee,” where the managers of our group’s major companies in Japan and overseas, inaddition to the attendees of the “Group Management Meeting,” attend meetings of the Group Strategy Committee and share
management issues and review important matters.
- 16 -

In addition, the “Corporate Ethics Committee” and “Risk Management Committee” have each been established ascommittees of the entire Company. Under these committees, the “Compliance Committee,” “Quality Assurance Division,”“Accident and Disaster Measures Division,” and “Environmental Division” have each been established, and each of thesedivisions is ready to enhance corporate value and respond to risks of loss in each field. These divisions report to our Board of
Directors from time to time on the status of their activities.

- Measures to prevent inappropriate persons from controlling the determination of financial and business policies inlight of the basic policy

For the purpose of securing and enhancing corporate value and the common interests of the shareholders of theCompany, the Company determined the basic policy for preventive measures to be taken against the acquisition of a substantial
shareholding of the Company (i.e., defensive measures against takeovers) at an ordinary general meeting of shareholders held on
June 26, 2015. The Board of Directors determined and updated specific measures at the meeting held on the same day (whichwere introduced on June 29, 2006).
The Plan enables the Company’s shareholders, in the event of purchase or any similar act or a proposal to purchase theCompany’s share certificates (hereinafter called “Purchase”), to determine whether or not to accept such offer for the Company’s
shares, and enables its Board of Directors to secure any necessary information and sufficient time to propose alternatives or tonegotiate and consult with a person who purchases (hereinafter called “Purchaser”) on behalf of its shareholders, in order toprevent a Purchase of the Company’s shares that is detrimental to its corporate value or its shareholders’ common interests, andto secure and enhance its corporate value and the common interests of its shareholders.
The Plan covers a Purchase that falls under ① or ② below:①②

purchase of share certificates issued by the Company that results in 20% or greater ownership by ashareholder of such share certificates; orpublic tender offer for share certificates issued by the Company that results in combined ownership by theofferor and/or any of its affiliates of 20% or more of such share certificates.

If a Purchaser intends to launch a Purchase of the shares of the Company, such Purchaser will be requested to submit
to the Company a document describing the information required to consider details of the Purchase, as well as an oath by such
Purchaser that such Purchaser will follow the procedures prescribed by the Plan. Accordingly, the information provided by the
Purchaser; the opinion of the Board of Directors; or any supporting materials, alternative proposals (if any), or other information
and/or materials will be submitted to the Independent Committee, which consists of three members who are independent fromthe management operating the Company, and the Independent Committee will evaluate and/or examine such information and/or
materials. If need be, the Independent Committee will also separately obtain advice from independent experts and evaluate
and/or examine the terms and conditions of the Purchase, consider the alternatives presented by the Board of Directors, andnegotiate with the Purchaser or disclose information to the shareholders.
If (A) the Purchaser fails to follow the procedures as prescribed by the Plan or if (B) the Purchase is deemed to fallunder any of the requirements as prescribed by the Plan as a result of the examination of the terms and conditions of thePurchase or discussions and/or negotiations with the Purchaser, and if implementation of a free allocation of stock acquisitionrights is considered appropriate, the Independent Committee will advise the Board of Directors to implement a free allocation ofstock acquisition rights. The Board of Directors will pay the utmost respect to the advice provided by the Independent
Committee, and will resolve to implement the free allocation of the stock acquisition rights. The Company will implement a freeallocation of the share acquisition rights to those shareholders, other than the Company, who are registered or recorded in the
Company’s final register of shareholders as of the allocation date that is determined separately, at such rate, as separately
determined, up to a maximum of two stock acquisition rights for every one common stock of the Company held. Also, evenwhen the Purchase by the Purchaser is considered to fall under either (A) or (B) above, if the Independent Committee considers
it necessary to obtain the approval at an ordinary general meeting of shareholders for implementation of a free allocation of stockacquisition rights, the Independent Committee may advise the Board of Directors to do so. In this case, the Board of Directors,
in principle, shall promptly convene an ordinary general meeting of shareholders so that a meeting can be held within the
shortest time practically possible and submit a resolution for the implementation of a free allocation of stock acquisition rights.
The holder of stock acquisition rights for the subscription of new shares (with terms that prohibit the Purchaser andcertain people (hereinafter called “Nonqualified person”) from exercising such rights) is entitled to receive one share of theCompany by paying the amount determined by the Board of Directors or the ordinary general meeting of shareholders in the
resolution on the free allocation of stock acquisition rights, which shall be at least one yen (¥1) but not exceeding one-half (1/2)
of the fair value of one share of the Company. Also, the Company may acquire stock acquisition rights held by shareholders
other than the Nonqualified Person, and in exchange, deliver one share of the Company for every stock acquisition right.
Promptly after passing a resolution by the Board of Directors or by an ordinary general meeting of shareholders
with regard to implementation or non implementation of the above-mentioned free allocation of stock acquisition rights, theBoard of Directors will disclose the outline of such resolution and other information deemed appropriate by the Board of
Directors.
As with the effective period of the Basic Policy on Defensive Measures against Takeovers, the effective period of
the Plan will expire upon conclusion of the ordinary general meeting of shareholders to be held during the last fiscal year ending
within three years after the Ordinary General Meeting of Shareholders held on June 26, 2015. However, the Plan may bechanged or terminated to reflect the change made to the Basic Policy on Defensive Measures against Takeovers by and pursuant
to the resolution of the ordinary general meeting of shareholders, if the change or termination of the Basic Policy on Defensive- 17 -

Measures against Takeovers is resolved by an ordinary general meeting of shareholders. Further, the Plan will be terminated if
so resolved by the Board of Directors.
There will be no direct, concrete impact on the shareholders caused by the Plan’s introduction, provided the freeallocation of stock acquisition rights is not implemented. On the other hand, if the free allocation of stock acquisition rights is
implemented according to the Plan, the overall value of the shares held by the shareholders may be diluted if the procedures forexercising stock acquisition rights are not followed. However, no dilution of the overall value of the shares held will take place
if the shares are provided in consideration of stock acquisition rights acquired by the Company.

(iii) Judgment of Board of Directors as to Efforts under Section (ii) above and Reasons Thereof
As stated in Section (ii) above, the Plan was introduced in line with the Basic Policy mentioned in Section (i) above forthe purposes of securing or enhancing corporate value and the common interests of shareholders. In particular, highly rational
fairness and/or objectivity is ensured under the Plan because (i) the Plan focuses on shareholders’ intentions such that theeffective period is prescribed as three years, and the Plan may be terminated at any time by a resolution of the Board of Directors
or a resolution of an ordinary general meeting of the shareholders to terminate the Basic Policy on Defensive Measures against
Takeovers; (ii) the Plan establishes reasonably objective requirements, and a free allocation of stock acquisition rights is not
implemented unless these requirements are met; (iii) the Independent Committee shall consist of independent persons; (iv) a freeallocation of stock acquisition rights under the Plan may not be initiated unless a judgment is made by the Independent
Committee; and (v) the Independent Committee may obtain advice from independent experts at the expense of the Company.
The Plan is formulated to maintain corporate value, which is aligned with the common interests of the shareholders. It is notintended to maintain the status of the corporate officers of the Company.

- 18 -

4. 【Risk Factors】
Our business, performance, and financial condition are subject to risks and uncertainties, including those described in the risk
factors below. These risks and uncertainties could result in a material adverse effect on our results of operations and financial
condition, and a material decline in the trading price of our common stock.
Forward-looking statements in this report are made based on information available as of the end of fiscal year 2016.
(1) We may be adversely affected by the domestic and global economy
During fiscal year 2016, the Japanese market accounted for approximately 74.3% of our net sales, and the overseas
markets accounted for approximately 25.7%. In the major markets in which we operate, any weakness or deterioration in theeconomy including factors such as a decline in consumer spending as a result of the consumption tax increase in the domestic
market may have a material adverse effect on our sales, results of operations and financial condition.
(2) Continued difficulties faced or changes in business policies made by department stores, general merchandisers, and othergeneral retailers in Japan would hurt our businessIn fiscal year 2016, a substantial majority of our net sales were generated in department stores, general merchandisers,
and other general retailers in Japan. Due to the ongoing structural change in the retail market, however, we expect that the shareof sales from department stores, general merchandisers and other general retailers in the overall retail market will remain weak
and may continue to decline.
If the business of one or more of our important general retail customers fails as a result of continued weakness in thedepartment stores, general merchandise and other general retail sector, such a business failure may result not only in decreased
sales, but we may also be unable to collect some or all of our outstanding accounts receivable from such customers.
Likewise, increased consolidation of Japanese department stores and general merchandisers in preparation for ashrinking market due to the future anticipated decrease in the population of Japan may allow our customers to increase theirbargaining power in negotiating pricing and other terms of trade. Any change in business policy by Japan’s leading retailers
would have an adverse impact on our performance, such as net sales or return on sales.
(3) Our sales may decline if we are unable to effectively anticipate and respond to consumer tastes and preferences and deliver
high-quality products
Customer tastes and fashion trends change continuously and are difficult to predict. If we are unable to successfully
anticipate or respond to changing styles or trends, and if we lose the support of our customers, we may be unable to achieve oursales targets and our financial results would suffer as a result.
In addition, our brand image may suffer if we misjudge the market or sell defective merchandise causing customers tobelieve that we are not able to offer attractive fashions and top-quality products. If any event were to occur that harms our
reputation for producing high-quality products, our sales, operations and financial condition could be materially adversely
affected.
(4) The apparel market is highly competitive, and our share of sales or profitability may decline if we are unable to maintain ourcompetitivenessIn the domestic innerwear market, in addition to competition from wholesalers and direct retailers in the mid- to highend undergarment market in Japan, we must also compete against catalog and Internet sales and new entrants to the intimate
apparel market, including mass-market and specialty apparel companies, as well as non-store retailing.
Additionally, we continue to be challenged by the emergence of new and competitive retail concepts in the Japanese
intimate apparel industry, which target consumers through catalogue marketing, e-commerce, and other means. Increased
competition could result in price reductions, increased marketing expenditures, and loss of sales volume and market share, all ofwhich could have a material adverse effect on our sales, financial condition, and operating results.
(5) Expansion of our specialty retail store may not lead to improved sales and profits
Further investment is necessary in order to expand our specialty retail store business, including expenses for thedevelopment of new stores and the closure of underperforming stores, and improvement expenses for the specialty retail store
brand. While we continue to make efforts in improving profitability, if new shops fail to secure the expected sales levels, if
expenses such as shop rent or personnel costs increase due to changes in the market environment, or if the specialty retail store
brand fails to be popular with customers, we may not be able to make sufficient gains to recover the investment.
(6) We may experience difficulties in successfully increasing our catalogue and Internet sales
We believe that our Internet sales will be increasingly important, and we are seeking to strengthen our capabilities inthese channels. We also believe that we need to make further investments in systems for Internet sales in order to expand theInternet sales of our entire group. However, as the system environment surrounding our catalogue and Internet sales evolves
rapidly, we cannot predict whether our accumulated investments would contribute to the benefit of the entire group. We may not
be successful in increasing Internet sales and profits sufficiently to compensate for continued flat or declining sales through ourcore general retailer channel.
- 19 -

(7) Our business may be adversely affected by missing chances to sell products and an increase in inventory resulting fromunsuccessful sales or an unsuccessful production plan
Fluctuations in the demand for our products may affect the inventory we own because we usually manufacture our
products well in advance of the applicable season and sometimes before fashion trends are identified or evidenced by consumerpurchases. If we are unable to successfully anticipate or respond to changing styles or trends and misjudge the market for our
products or any new product lines, our sales will suffer and we may be faced with significant amounts of unsold inventory. In
response, we may be forced to reduce our product prices, increase our marketing promotions, or revalue our inventory, which
could have a material adverse effect on our sales, results of operations, and financial condition.
(8) We may not be successful with cost reduction
Sales from the domestic market accounted for approximately 74.3% of our group sales. Reducing our cost of
conducting business is a key element of our strategy to improve our profitability and business performance, particularly in the
coming years during which growth in sales will remain difficult to achieve as consumer spending remains stagnant in Japan.
In recent years, we have taken certain steps intended to reduce our costs. However, with the possibility of an increasein product material prices, exchange rate swings, a rise in labor costs in Asia, or costs being incurred in response to changes inthe business environment, we may not be successful in materially reducing our costs, and any cost reductions that we achieve
may not be large enough to compensate for difficulties that we may face in increasing our sales.
(9) It may be difficult for us to attract and retain highly qualified personnel
The growth of our business depends significantly on our ability to attract, train, and retain qualified personnel in areas
such as product planning, manufacturing technology, and sales and marketing. Our ability to attract qualified personnel depends
in large part on our ability to establish and maintain a positive image in the labor market. We may not be successful in attracting
and retaining qualified personnel, which may have a material adverse effect on our financial condition and results of operations.
(10) Our business may be adversely affected by irregular weather
Our business performance and results may be affected by the weather and irregularity of seasons. We typically launch
new intimate apparel product campaigns for the spring/summer and fall/winter seasons of each year for our Wacoal and Wing
brands and our business success largely depends on the success of these seasonal product campaigns. We also produce andacquire merchandise in advance of the peak selling periods of the seasons during which we intend to sell such merchandise andsometimes before new fashion trends are confirmed by consumer purchases. If a season is unusually warm, cold, short, long, orin any other way irregular, consumers may change their buying habits, and we may not be able to sell our inventory in the way
we anticipated at the time of purchase. Changes in seasonal weather patterns and extreme weather events have adversely
affected our sales in the past and may affect us in the future.
(11) We may face increasing risks relating to conducting business internationally
We have gradually increased both the amount of goods we produce and the amount of raw materials we procure for the
products sold in Japan in lower-cost countries in Asia – a trend we expect to continue. In addition, we are making efforts to
expand our product sales in overseas markets, including in the United States, Europe, and China. These initiatives and trends
may increasingly expose us to various risks relating to the conduct of our business abroad, including:(i) the risk that our business may be adversely affected as a result of our failing to suit consumer tastes and preferences inoverseas markets;(ii) the risk that political, social, and economic instability in countries where we source, manufacture, or sell our products
may adversely affect our group;(iii) the risk that unexpected tax, legal, or regulatory changes or actions may adversely affect our group;(iv) the risk of our being unable to adjust to cultural differences which may lead to staffing or management failure that may
adversely affect our group business;(v) the risk that the procurement costs of our group products or our consolidated business results may fluctuate due tochanges in exchange rates;(vi) the risk of our not being able to protect our intellectual property as a result of different intellectual property protection
systems or our infringing on the intellectual property of other companies may adversely affect our group business; and(vii) the risk that public health or similar problems in our important overseas markets or sourcing/production centers may
adversely affect our group.
(12) We may not be successful with acquisitions and other strategic transactions with third parties
We intend to evaluate and pursue opportunities for acquisitions, investments, and other strategic transactions that we
believe will help us achieve our business objectives, including extending our product offerings in Japan and in overseas markets
and strengthening our capabilities in Internet, catalogue, and other marketing channels.
Any acquisitions or other strategic transactions, or any licensing business that we have pursued or may pursue in the
future may have an adverse effect on our group’s business results as a result of poor performance of the target company orbusiness partner due to deterioration in the economy, unsuccessful management integration or business collaboration, or failure
to achieve satisfying results or synergy effects from the relevant business model. Also, there is the risk of possible impairment
charges on goodwill and other intangible assets which we obtained through business acquisitions recorded on our consolidatedbalance sheet as a result of a decline in anticipated future cash flows.
- 20 -

(13) We may not be able to recover the cost of investments we make in pursuing growth opportunities and developing new markets
Our pursuit of growth opportunities and new markets through international expansion, acquisitions, strategic alliances,or otherwise will require significant resources, time, and costs. There is no guarantee that we will generate results that are
sufficient to cover the cost of making any such investment, even if we conduct an extensive due diligence investigation and otheranalyses prior to making the investment to maximize the probability of success and minimize the risks. Failure to recover thecost of investments could have a material adverse effect on our financial condition and results of operations.
(14) We may face infringement of our intellectual property rights or claims that we infringe the intellectual property rights ofothersWe believe that our intellectual property rights, our brands and related trademarks in particular, are important to ourability to create and sustain demand for our products and to the value of our business. We may encounter trademark and related
disputes in the future, and imitation of our products or the infringement of our trademarks and proprietary rights by other could
materially harm our operations and financial condition. Additionally, other parties have asserted in the past, and may assert in
the future, that we have infringed their intellectual property rights. We cannot predict whether any such assertions or related
claims will substantially harm our financial conditions or results of operations.
(15) We may be exposed to risks in the occurrence of information system intrusion
Our computer system may be subject to an attack from external sources resulting in website defacement, leaking ofmaterial data, or erasing of material data due to a computer virus. If any of these events occur, our sales may decline as a resultof deterioration in our corporate image, which could have a material impact on our operating results and financial condition.
(16) If we fail to protect our customers’ privacy and data and maintain the confidentiality of our trade secrets we may faceproceedings against us, lose customer confidence, or lose our market position
Any failure by us to comply with laws and regulations regarding privacy and the protection of customer information
could result in proceedings against us by governmental entities or others, which could potentially have an adverse effect on ourbusiness, operating results and financial condition. Complying with varying privacy requirements could cause us not only toincur substantial costs and force us to change our business practices, but also could cause customers to lose confidence in ourbusiness and products, which could result in a material adverse effect on our sales and profitability.
Additionally, in order for us to secure and maintain an advantageous position in the market, we need to protect ourtrade secrets, such as manufacturing technology and product information. If these trade secrets are divulged by any party related
to us or infringed by another company, our business or financial condition could be materially affected.
(17) If we fail to maintain adequate internal controls over financial reporting we may not be able to produce reliable financial
reports in a timely manner or prevent financial fraud
Beginning with our annual report for fiscal year 2007, we are required to document and test our internal control
procedures.
Effective internal controls are necessary for us to produce reliable financial reports and important in helping prevent
financial fraud. If we cannot provide reliable financial reports on a timely basis or prevent financial fraud, our business andoperating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of
our stock could drop significantly.
(18) Our holdings of equity securities expose us to market risks
We hold equity and other securities in publicly traded Japanese companies. A significant drop in the value of thesesecurities or in the Japanese equity markets in general, could have an adverse impact on our financial results in the relevant
reporting period.
(19) Natural disasters, epidemics, dispute, terrorism and riot could affect our manufacturing abilities, results of operations, or
financial condition
Japan is one of the most seismically active countries in the world and regularly experiences typhoons and other natural
disasters. In the event of a large earthquake, other natural disaster, or outbreak of an epidemic that affects our employees or ourability to continue using any of our sales or manufacturing facilities, our sales and marketing efforts would be adversely affected
and we would face the possibility of work delays or stoppages, any of which could have a negative effect on our business. Anysuch natural disaster, epidemic, dispute, terrorism and riot could also cause disruptions in the transportation networks that ourbusiness relies upon and could interfere with our normal course of production and distribution. Furthermore, any such natural
disaster, epidemic, dispute, terrorism or riot would also have a large impact on consumer activity, which would have asignificant impact on the sales of our products.
(20) We may be exposed to risks in relation to liability for termination and retirement benefit
Costs and liability 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 future liabilities for termination and retirement benefits. Such costs
and liability for termination and retirement benefits may increase if the actual results differ from the assumptions or if there isany change to the assumptions, due to fluctuations in the market for securities as well as the interest rate environment. Further,- 21 -

additional obligations may arise if the retirement benefit scheme is amended. As a result, our group business or financial
condition could be adversely affected.
(21) We may be exposed to risks related to realizability of deferred tax assets and transfer pricing
According to our current accounting standards, deferred tax assets are recorded based on reasonable assumptions about
our future taxable income. However, deferred tax assets may decrease due to changes in the estimated amount of future taxable
income or changes in tax rates following tax reforms, which could have an adverse impact on our operating results and financial
condition.
As the international tax avoidance by certain multinational enterprises turned into a political issue, OECD preparedand released a report on BEPS (base erosion and profit shifting) at the request of the G20 in October 2015 in efforts to improve
tax rules. Following the release of this report, each country will reform and review its domestic tax laws and tax treaties.
We believe that formulation of the international taxation rules will not have a material impact on our group; however,
the opinion of the tax authorities in each country may differ from our opinion regarding the newly prescribed transfer pricing
documentation.

- 22 -

5. 【Material Agreements, etc.】
In January 2016, Wacoal Corp., our consolidated subsidiary, established two subsidiaries in the Kingdom of Thailand pursuant to
the joint venture agreements executed on November 13, 2015. These two subsidiaries executed business transfer agreements with
Textile Prestige Public Company Limited and Erawan Textile Company Limited on January 27, 2016, respectively, and the transfer
of material business was completed on February 1, 2016. For details, please see “V. Financial Information – 1. Consolidated
Financial Statements – Notes to Consolidated Financial Statements” and “7. Aquisitions – Notes to Consolidated Financial
Statements”.

- 23 -

6. 【Research and Development】
Our research and development activities are mainly conducted by our Human Science Research Center to achieve harmony
between the human body and clothing and to support better product making.
Since 1964, we have been conducting research into the female body in order to accurately understand the Japanese woman’s
physique. In particular, we have developed a silhouette analysis system and introduced a three-dimensional measuring system. We
are also working on an even more advanced measurement of sensory comfort. Our research and development activities focus onaddressing the proportional, physiological, and mental aspects of garment design. One of our most important research results was theenrichment of our research on sensory comfort through our participation in a project led by the Ministry of Trade and Industry(presently the Ministry of Economy, Trade and Industry) from 1995 to 1998. Based on this research, we have been focusing on
developing new products that are not only comfortable for the wearer, but also have a positive physiological effect based on the basic
study from three factors, which are pressure, heat, and touch. In 2005, we developed and created a new market for our breakthroughStyle Science series products, which support the creation of a healthy and beautiful body by changing the idea of everyday walking towalking for exercise. In 2010, we conducted an analysis and announced principles on the physiological changes associated with theaging period from a person’s 20s to their 50s. We also strengthened the development of new products coping with aging and havebeen working on developing new functional products based on the lifestyle habits of people as they undergo small physical changes
associated with aging.
Our Human Science Research Center is promoting research and development, which is based on a survey analysis of the body
shapes and needs of young customers including customers of an age of which the products for the first time introduced, and a senior
generation.
In terms of product development, during the fiscal year that ended in March 2016, we enhanced the development of new products
which focus on “comfort” aspects and of new products which can attract young adults, an age group that do not wear girdles.
As a result of the above, we recorded 839 million yen for our research and development during the fiscal year ended March 2016.
Our research and development activities cover a wide range of research from basic research to product development, mainly of
women’s innerwear. Therefore, it is difficult to relate each of such activities to a specific segment, and thus, we do not provide
information regarding such research and developments by segment.
In order to promote “the realization of an industry supporting women with unbounded living beauty,” we will make efforts toenrich research and development activities that contribute to the improvement of customer satisfaction and corporate value 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.

- 24 -

7. 【Analyses of Financial Position, Operating Results, and Cash Flows】
Forward-looking statements in this report are made on information available as of the filing date of this report (June 29, 2016).
(1) Overview
We are a leading designer, manufacturer, and marketer in Japan of women’s intimate apparel, with the largest share of
the Japanese market for foundation garments and lingerie. Foundation garments (primarily brassieres and girdles) and lingerie(primarily slips, bra-slips, and women’s briefs) accounted for 74.5% of our consolidated net sales for fiscal year 2016. We also
design, manufacture, and sell nightwear, children’s underwear, outerwear, sportswear, hosiery and other apparel and textile
products, and several other services.
Net Sales
We principally generate revenues from sales of innerwear (consisting of foundation garments and lingerie, nightwear,
and children’s underwear), outerwear and sportswear, hosiery, textile products, and other products.
The following table sets forth information with respect to our net sales by category of products for fiscal year 2016.

Net Sales to External Customers (and Percentage) by Product Category

Type of productFoundation and lingerieNightwear
Children’s underwear
Total innerwear
Outerwear and sportswear
Hosiery
Other textile products and related
products
Other
TOTAL

Millions ofyenDistribution
ratio

151,166
10,098
1,386
162,650
19,074
2,178
7,161

74.5%
5.0
0.7
80.2
9.4
1.1
3.5

11,854
202,9175.8
100.0%For fiscal year 2016, approximately 79% of the net sales of Wacoal Corp. (the net sales of which account for
approximately 59% of our consolidated net sales) were apparel sales made on a wholesale basis to department stores, generalmerchandisers, and other general retailers and approximately 19% were apparel sales made through directly managed retailstores, catalogue sales, and the Internet. Sales from our other businesses (which include cultural products and other services)
constituted the remaining, approximately 2%, of Wacoal Corp.’s net sales for fiscal year 2016.
Over the past five fiscal years, fluctuations in our sales have typically reflected changes in unit volume, as average unit
prices have generally remained stable during this period.
Cost of Sales
Our cost of sales arises principally from material and manufacturing costs related to the production of our apparelproducts.
Selling, General and Administrative Expenses
Our selling, general and administrative expenses principally consist of employee compensation and benefit expenses
and promotional expenses, such as advertising costs and renovation costs. Other selling, general and administrative expenses
include shipping and handling costs, payment fees (including outsourcing payments), and rental payments for directly managed
retail stores.
Key Industry Trends
We believe that the following have been key trends in our industry during the last two fiscal years:(i) In the domestic innerwear market, sales began to decrease and the outlook remains uncertain due to a decline incustomer confidence as a result of growing consumer awareness of the need to reduce spending after the consumption tax
increase, in addition to the influence of rising prices associated with the weakening yen and other increasing burdens, while thefemale population is declining. On the other hand, inbound consumption is expanding due to an increase in the number oftourists visiting Japan.
- 25 -

(ii) As for sales channels, purchases are increasing at locations other than our traditional selling spaces such as
department stores, general merchandisers and specialty stores for underwear. Our sales channels have changed and diversified as
seen in growing sales on the Internet and at directly managed retail stores and casual apparel shops as a result of shop openings
at retail shopping malls.
(iii) The apparel market is becoming competitive due to major outerwear manufacturers entering the market, in
addition to specialty apparel companies and non-store retailing. Retailers and specialty store retailers of private label apparel are
making efforts to improve the frequency of use by increasing customer contacts through direct retail sales, website sales, andother Internet sales. General marchandize store is also strengthening the development of “private brand” merchandise at generalmerchandisers. Manufacturing companies are making efforts to strengthen direct sales and OEM and to develop new sales
channels.
(iv) These manufacturers and other competitors are producing lower priced women’s innerwear garments by sourcing
fabric and producing garments in lower cost countries in Asia, but due to the weakening yen and a rise in labor costs, tend todevelop products at a higher price with value-added features.
(v) We are conducting new marketing strategies to achieve more diversified sales channels and exposure to new
consumer groups.
During the last two fiscal years, which are the reporting periods of the audited consolidated financial statements
included in this report, we made efforts to cultivate new customers by responding to the diversifying domestic women’s
innerwear market, to rebuild our group’s production base, and to expand sales and profits in the overseas market in order to react
to the above trends. With regard to the domestic market, we implemented initiatives to respond to diversification, which include
strengthening our approach to the first-bra age group and senior customers, expanding high volume products mainly in our retailbusiness, exploiting areas in which our market share remains relatively low, diversifying the directly managed retail store model,
and acquiring the swimwear business. As for production base, we have newly established a factory in Myanmar and two raw
materials manufacturing companies in Thailand. We aim to build a global production base by aligning these newly establishedcompanies and our existing manufacturing companies in the ASEAN region. With regard to the overseas market, in the UnitedStates, WACOAL AMERICA INC. is expanding sales from e-commerce websites and its exports to surrounding countries. In
Europe, we are making steady progress in restructuring. With respect to our business in China, we made efforts to improve
profitability and to enhance our brand recognition to the middle-class market. In addition, we have developed our business andhave already initiated sales in India. As a result of these management initiatives and sales efforts, our consolidated businessresults for the current fiscal year were as follows: 202,917 million yen of sales, an increase of 5.8% as compared to the previous
fiscal year, 13,865 million yen of operating income, an increase of 95.8% as compared to the previous fiscal year, and 14,957
million yen of income before income taxes and equity in net income of affiliated companies, an increase of 31.9% as comparedto the previous fiscal year.
(2) Critical 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 the followings
are some of the more critical judgment areas in applying our accounting policies in the preparation of our consolidated financial
statements.
(i) Revenue Recognition
We recognize revenue on sales to retailers, mail-order catalogue sales, and Internet sales when persuasive evidence ofan arrangement exists, delivery has occurred resulting in transfer of title and risk of loss, the sales price is fixed or determinable,
and collectibility is reasonably assured. As for consignment sales, we recognize revenue when the products are sold to theultimate customer. We recognize revenue on direct retail sales at directly managed retail stores at the point of sale to thecustomer.
(ii) Allowance for Doubtful Receivables and Returns
We are required to assess the collectibility of notes and accounts receivable. A considerable amount of judgment isrequired in assessing the ultimate realization of these notes and receivables, including the current creditworthiness of eachapplicable customer, taking into account business conditions, turnover of receivables, and financial positions for significant
customers. In the event that a customer’s financial condition worsens, the allowance for doubtful receivables may increase andmay adversely affect our financial condition and performance.
We allow our customers to return their unsold products when the customers meet certain criteria established by us asoutlined in our applicable trade terms. We establish the allowance for estimated returns for each operating department based on
historical experience with product returns, sales movements, and the size of inventory on the retail level and on the situation of
the retail industry overall. We review and revise the allowance every quarter, in consideration of actual returns, planned productdiscontinuances, and promotional sales. We record the allowance for estimated returns as a reduction to sales.
(iii) 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- 26 -

estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary
to make a sale. A periodic review of inventory is performed in order to determine if inventory is properly stated at the lower ofcost or market. Inventories are written down to the estimated net realizable values, if appropriate. Factors, such as expected
average selling price, expected average cost to make a sale, markdown rate, and class or type of inventories, are analyzed todetermine estimated net realizable value. We also consider potential disposal of inventories. Criteria utilized to quantify thefactors we consider include historical results, judgments regarding future consumer demand, and other factors. We believe thatthe amount written down is appropriate. However, if market conditions and demand are less favorable than our projections, theamount we write down may increase and may adversely affect our financial condition or operating results.
(iv) Deferred Tax Assets
We currently have significant deferred tax assets, which are subject to periodic recoverability assessments. Realizationof our deferred tax assets is principally dependent upon the realization of projected future taxable income. In estimating our
future taxable income, we consider past operating results, the feasibility of ongoing tax planning strategies, and other factors.
Our judgments regarding future profitability may change due to future market conditions and other factors. These changes, ifany, may require recognition of a significant valuation allowance for these deferred tax asset balances. In the event wedetermine 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-thanexpected earnings and our deferred tax assets become unrecoverable, however, a valuation allowance must be recorded against
the amount that is not likely to be recovered, and this may have a negative impact on our profit and loss.
(v) Impairment Charges on Investments
Impairment charges on investments are charged to earnings when a decline in fair value below the cost is other than
temporary. We periodically determine whether a decline in the fair value of marketable securities and investments is deemed tobe other-than-temporary decline, based on criteria that include the duration and severity of market decline, the extent to whichcost 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.
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 thevaluations of the investments.
As of March 31, 2016, we held securities with respect to which we recognized impairment charges, as well as
securities with respect to which we did not recognize any impairment charges even though those securities had been in an
unrealized loss position. Based on our assessment of the period of the decline in the fair values and our assessment of therelevant companies’ earnings outlook, we concluded that the decline in fair value for the securities not subject to impairment
charges was only temporary and thus impairment charges did not need to be recognized for these particular securities.
As of March 31, 2016, we did not hold any security that had an unrealized material holding loss.
(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 that the carrying amounts ofsuch assets might not be recoverable. When we determined impairment, we evaluate the carrying amount of the assets based on
their fair value.
In fiscal year 2016, we performed an impairment test for estate group for which we entered into a leasing contract witha third party. As a result, because the fair value of such real estate was below the carrying value, the carrying value of the land,
which was 366 million yen, was reduced to its fair value of 133 million yen, and the carrying value of the building andimprovements, which was eight million yen, was reduced to its fair value of zero million yen. The impairment charge of 241
million yen was recognized as impairment loss under operating costs and expenses of the “Wacoal Business (Domestic)”
segment for the fiscal year ended March 2016.
(vii) Valuation of Indefinite-Lived Intangible Assets and Goodwill
We are required to perform an annual impairment test of our intangible assets with indefinite useful lives and goodwill.
We also assess the impairment of such intangible assets and goodwill whenever events or changes in circumstances indicate thatthe carrying amount may not be recoverable. Some of the factors we consider important that could trigger an impairment review
include the following:
significant underperformance relative to projected future operating results;
significant changes in the manner of our use of the acquired assets or the strategy for our overall business;significant negative industry or economic trends; andsignificant changes in risk-adjusted discount rates.

- 27 -

When we determine that the carrying amount of indefinite-lived intangible assets and goodwill may not be recoverable
based upon the existence of one or more of the above indicators of impairment, we evaluate the carrying amount of the assets
based on their fair value. If the fair value is less than the carrying amount of the assets, we record an impairment loss 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 indefinite-lived intangible assets and goodwill may not
be recoverable, we engage an independent appraiser to assist us in our determination of the fair values of our reporting units. In
our determination of the fair value of goodwill, we utilize the net present value method and incorporate relevant unobservable
inputs.
Significant assumptions used in this analysis include future cash flows and the risk-adjusted discount rate. Future cash
flows are based on the management’s cash flow projections for the future five years, after which future cash flows are estimatedusing the perpetuity growth rate of zero. The management’s cash flow projections are developed using estimates for expected
future revenue growth rates, profit margins, and working capital levels of the reporting units. The risk-adjusted discount rate isdetermined by the Capital Asset Pricing Model (“CAPM”) and we mainly utilize a weighted-average cost of capital (“WACC”)
of 4.1%.
As a result of the evaluation performed for fiscal year 2016, we judged impairment charge on goodwill is unnecessary.
In our determination of the fair value of trademark, we utilize the relief-from-royalty method and incorporate relevant
unobservable inputs. Significant assumptions used in this analysis include future cash flows, the risk-adjusted discount rate, andthe rate of royalty. Future cash flows are based on the management’s cash flow projections for the future five years, after which
future cash flows are estimated using the perpetuity growth rate of zero. The management’s cash flow projections are developed
using estimates for expected future revenue growth rates, profit margins, and working capital levels of the reporting units. We
mainly used a risk-adjusted discount rate of 7.1% based on a WACC of 4.1% and an inherent risk spread of trademark of 3%.
The rate of royalty used for valuation was 3%, which was based on the royalty ratio used in the actual transaction with a third
party.
As a result of the evaluation performed for fiscal year 2016, we judged impairment in the carrying value of the
trademark is 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 andpension costs are dependent on management’s assumptions used by actuaries in calculating such amount. The key assumptions
include discount rates, the expected long-term rate of return on plan assets, retirement rates, mortality expectations, and otherfactors. Our management believes that these actuarial assumptions and methods are appropriate in light of our circumstances.
However, due to a change in an actuarial assumption, the amount of the projected retirement benefit plan liabilities and costs
may be adversely affected.
Our approach to establishing the discount rate is based upon long-term Japanese government bond rates and corporatebond indices. The discount rate assumption is based upon the effective yields as of March 31, 2016 on Japanese government
bonds whose maturity dates approximate the timing of the expected future benefit payments. On March 31, 2016, the discountrate used for the contributory retirement plan was 0.5%.
We determine the expected long-term rate of return on plan asset assumptions by evaluating both historical returns, aswell as estimates of future returns. The expected return on assets was based on expected equity and debt securities returns
weighted by the percentage of each of the major asset classes. The estimate of the long-term rate of return on assets for thecontributory retirement plan is 2.5% for fiscal years 2015 and 2016. 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 shortterm financing of 2.0%.
These assumptions have a significant effect on the amount of the obligation and periodic benefit cost reported. Achange 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 periodic benefit costs

Effect on benefit obligation

Discount rate: 0.5% decrease

an increase of 308 million yen

an increase of 2,023 million yen

Discount rate: 0.5% increasea decrease of 216 million yen

a decrease of 1,792 million yen

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

an increase of 154 million yen-

Expected long-term rate of return onplan assets: 0.5% increasea decrease of 153 million yen-

The other retirement plans provide for either lump-sum termination benefits or periodic payments under certain
conditions. Benefits are usually paid as a lump sum at the earlier of the employee’s termination or the mandatory retirement age.
- 28 -

(3) New Accounting Pronouncements
Revenue Recognition – In May 2014, the Financial Accounting Standard Board (the "FASB") issued a new accounting standard
related to revenue recognition. This guidance is based on the principle that revenue is recognized to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange forthose goods or services. This standard provides comprehensive guidance, and requires the disclosure of information to enable usersof financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts
with customers. In August 2015, FASB issued additional guidance and deferred the effective date of the guidance for a year. In
May 2016, FASB also issued additional guidance to improve above guidance by reducing the potential for diversity in practice atinitial application and the cost and complexity of applying Topic 606 both at transition and on an ongoing basis. This guidance iseffective for fiscal years beginning after December 15, 2017 and interim periods within that annual period. The Company iscurrently evaluating the impact of adoption on the Company's consolidated financial position, result of operations, or cash flows.
Extraordinary and Unusual Items – In January 2015, the FASB issued a new accounting standard related to extraordinary andunusual items. This guidance eliminates from U.S. GAAP the concept of extraordinary items and the requirements to 1) segregate
an extraordinary item from the results of ordinary operations, 2) present the item separately on the income statement, net of tax,
after income from continuing operations and 3) disclose income taxes and earnings-per-share data applicable to the extraordinary
item. This guidance is effective for fiscal years and interim periods within that annual period, beginning after December 15, 2015.
It is not expected to have an impact on the Companies' consolidated financial position, results of operations, or cash flows, since it
relates only to disclosure requirements.
Fair Value Measurements– In May 2015, the FASB issued a new standard which amends fair value measurement. This guidance
removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net
asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all
investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those
disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. This
guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The
adoption of this guidance is not expected to have an impact on the Companies' consolidated financial position, results of operations,or cash flows, since it relates only to disclosure requirements.
Measurement of Inventory – In July 2015, the FASB issued a new standard related to simplifying the measurement of inventory.
Currently an entity is required to measure inventory at the lower of cost or market. Market could be replacement cost, net
realizable value, or net realizable value less an approximately normal profit margin. This guidance requires an entity to measure
inventory at the lower of cost or realizable value. This guidance is effective for fiscal years beginning after December 15, 2016,
and interim periods within those fiscal years. The Company is currently evaluating the impact of adoption on the Company's
consolidated financial position, result of operations, or cash flows.
Balance Sheet Classification of Deferred Taxes – In November 2015, FASB issued a new accounting standard related to balance
sheet classification of deferred taxes. This guidance requires an entity to classify deferred tax liabilities and assets as noncurrent on
the consolidated financial position. This guidance is effective for fiscal years beginning after December 15, 2016. The Company
is currently evaluating the impact of the adoption on the Company's consolidated financial position, result of operations, or cash
flows.
Recognition and Measurement of Financial Instruments – In January 2016, FASB issued a new accounting standard related torecognition and measurement of financial assets and financial liabilities. This guidance requires an entity to measure equity
investments (except those accounted for under to the equity method of accounting or those that result in consolidation of theinvestee) at fair value with changes in fair value recognized in net income and change of related disclosures. This guidance iseffective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company iscurrently evaluating the impact of adoption on the Company's consolidated financial position, result of operations, or cash flows.
Leases – In February 2016, FASB issued a new accounting standard related to leases. This guidance requires an entity to recognize
lease assets and lease liabilities on the balance sheet for, with a few exceptions, those leases classified as operating leases undercurrent U.S. GAAP. This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within thatannual period. The Company is currently evaluating the impact of adoption on the Company's consolidated financial position,
result of operations, or cash flows.
Equity Method – In March 2016, FASB issued a new accounting standard related to simplifying the transition to the equity methodof accounting. This guidance eliminates the requirement that when an investment qualifies for use of the equity method as a resultof an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations,and retained earnings retroactively on a step by step basis as if the equity method had been in effect during all previous periods thatthe investment had been held. This guidance also requires that an entity that has an available-for sale equity security that becomes
qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated othercomprehensive income at the date the investment becomes qualified for use of the equity method. This guidance is effective forfiscal years beginning after December 15, 2016, and interim periods within that annual period. Earlier application is permitted.
The Company adopted this guidance for the year ended March 31, 2016. The adoption of this guidance does not have a material
impact on the Companies' consolidated financial position, results of operations, or cash flows.

- 29 -

(4) Report on Business Results(i) Sales
Please see “II. Business Overview – 1. Summary of Business Results – (1) Summary of Operations.”(ii) Cost of Sales
Out cost of sales increased 5.7% from 90,722 million yen for fiscal year 2015 to 95,901 million yen for fiscal year 2016. This
increase was mainly due to the inclusion of sales from Ai Co., Ltd. and the cost of sales from our foreign consolidated
subsidiaries which were inflated by the depreciation of the Japanese yen. Cost of sales as a percentage of net sales for fiscal year
2015 and fiscal year 2016 was 47.3%, respectively.
(iii) Selling, General and Administrative Expenses
Our selling, general and administrative expenses increased 5.9% from 87,940 million yen for fiscal year 2015 to 93,151
million yen for fiscal year 2016. This increase was mainly due to the inclusion of sales from Ai Co., Ltd. and selling, generaland administrative expenses at our foreign consolidated subsidiaries which were inflated by the depreciation of the Japanese yen.
(iv) Goodwill and Other Intangible Assets
At the end of fiscal year 2015, we examined potential impairment charges on trademarks and goodwill, all of which arerecorded as other intangible fixed assets of Peach John, pursuant to its business plan, and accordingly, recorded 1,176 million
yen and 4,845 million yen of impairment charges, respectively. There were no impairment charges for fiscal year 2016.
(v) Operating Margin
Our operating margin increased 3.1% from 3.7% for fiscal year 2015 to 6.8% for fiscal year 2016. This increase was mainly
due to the impairment charges recorded for the Peach John business for the fiscal year 2015.
(vi) Other Income/Expenses
We recorded 1,092 million yen as other income, a decrease of 3,168 million yen, as compared to 4,260 million yen of otherincome recorded for fiscal year 2015. This decrease was mainly due to the gain on sale and exchange of marketable securities
and investments which decreased 1,495 million yen from fiscal year 2015 and there was the profit of 1,405 million yen from thesale of paintings for fiscal year 2015.
(vii) Net Income Attributable to Wacoal Holdings Corp.
Net income attributable to Wacoal Holdings Corp. for fiscal year 2016 was 11,159 million yen, an increase of 2,715 million
yen as compared to fiscal year 2015 as a result of an improvement in our operating margin, despite a decrease in other income
and an increase in tax expense.
(5) Liquidity and Capital Resources
Our current policy is to fund our cash needs from cash flows from operations, which allows us to secure working capital, makecapital investments, and pay dividends without relying on substantial borrowings or other financing from outside of our groupcompanies. As of March 31, 2016, we had credit facilities at financial institutions totaling 36,940 million yen, and the unused linesof credit for short-term financing amounted to 11,948 million yen. Of this credit, 5,500 million yen is available to Wacoal
Holdings Corp., 3,111 million yen is available to Wacoal Europe Ltd., 3,050 million yen is available to Wacoal Service Co., Ltd.,and 288 million yen is available to Nanasai.
In general, most of our credit facilities have automatically renewed terms, and we are not aware of any issues with respect to anyof our lenders that could cause these facilities to become unavailable. Even if any of our subsidiaries loses access to funds fromour credit facilities, we believe that it is possible for other companies in our group to provide any necessary funds. Our borrowing
requirements are not affected by seasonality.
We are not aware of any restrictions on the transfers of funds from a subsidiary to a parent company in the form of a cash
dividend. We believe our working capital is adequate for our present requirements and for our business operations in the short tolong term.
(i) Capital Investments
Please see “III. Property, Plants, and Equipment – 1. Summary of Capital Investment, etc.”(ii) Cash Flows
Please see “II. Business Overview - 1. Summary of Business Results - (2) Cash Flow Status.”- 30 -

III. 【Property, Plants, and Equipment】
1. 【Summary of Capital Investment, etc. 】
The amount of capital investment for the fiscal year ended March 31, 2016, was 8,978 million yen. A majority of our capital
investment was used in our new construction project of a business-use building, the information system investment for our domestic
subsidiaries and maintenance and repair work implemented for the real properties held by the Company.
The amounts of capital investment made in Wacoal Business (Domestic), Wacoal Business (Overseas), Peach John Business, andOther were 6,977 million yen, 1,694 million yen, 245 million yen, and 62 million yen, respectively.

2. 【Major Property, Plants, and Equipment】
The table below shows our major property, plants, and equipment within our group (Company and consolidated subsidiaries).
(1) Wacoal Holdings Corp.
As of March 31, 2016
Number of
Employee(s)Book Value (Millions of yen)
Facility(Location)

Head Office(Minami-ku, Kyoto) and other

OperatingSegment

Type of Equipment
and Facilities

WacoalFacilities for

Business

administration(Domestic)

affairs, etc.

Buildings

Equipment
and Fixtures

14,6671,204

2Land (m )18,770(284,455)

Total

34,64181［－］(2) Domestic Subsidiaries
As of March 31, 2016
Number of
Employee(s)Book Value (Millions of yen)
Name of Company(Location)

Wacoal Corp. Head Office

OperatingSegment

Type of Equipment
and Facilities

WacoalFacilities for

Business

administration(Domestic)

affairs

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

Business

administration

One other business office in Tokyo(Domestic)

affairs

WacoalFacilities for

Business

administration(Domestic)

affairs(Minami-ku, Kyoto)
One other business office in Kyoto
district

Wacoal Corp. Osaka Office(Yodogawa-ku, Osaka)
Wacoal Corp. Spiral Business

WacoalDepartment

Business(Minato-ku, Tokyo)(Domestic)

Wacoal Distribution Corp.

WacoalFacilities forMoriyama Distribution Center

Businessmerchandise(Moriyama, Shiga)(Domestic)

management

Kyushu Wacoal Manufacturing

WacoalCorp., Nagasaki Plant

Business(Unzen, Nagasaki)(Domestic)

Torica Inc.

Wacoal(Saihakugun Nanbucho, Tottori)

BusinessThree other plants(Domestic)

Nanasai Co., Ltd.
Osaka Commodity Center(Yodogawa-ku, Osaka)

Other

Buildings

Machinery,
Vehicle,Equipment,
and Fixtures

Land (m )

18

176

－

195

43

45

－

88

7

3

－

10

98

119

－

217

21

81

－

102

1

97

－

98

485

59

280

9

Sales facilities

Manufacturing
facilities
Manufacturing
facilities
Manufacturing
facilities- 31 -

2

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

Total

724

439

1,242
［ 207］

1,709［ 108］
928
［ 67］
－
［ －］
385
［ －］
400
［－ ］
153
［ 38］
22
［

3］

(3) Overseas Subsidiaries
As of March 31, 2016
Number of
Employees

Book Value (Millions of yen)
Name of Company(Location)

OperatingSegment

Type of Equipment
and Facilities

Buildings

Machinery,
Vehicle,Equipment,
and Fixtures

555

76

552

176

18

4

457

－

－

457

257

38

－

295

130

199

－

329

90

95

－

185

343

177

－

520

256

598

2

Land (m )Total

Facilities for
WACOAL AMERICA, INC.
(New York, USA)

Wacoaladministration

Businessaffairs/(Overseas)

merchandise

271

172

903

(32,300)［ －］management
WACOAL DOMINICANA
CORP.
(Santo Domingo, Dominican
Republic)

WacoalBusiness(Overseas)

Manufacturing
facilities

WACOAL SINGAPORE

WacoalFacilities for

PRIVATE LTD.

Business

administration(Singapore)(Overseas)affairs

WACOAL HONG KONG CO.,WacoalFacilities forLTD.

Business

administration(Hong Kong)(Overseas)

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

Business(Overseas)

Guandong Wacoal Inc.
(Guandong, China)

WacoalBusiness(Overseas)

VIETNAM WACOAL CORP.
(Bien Hoa City, Vietnam)

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

WacoalBusiness(Overseas)
WacoalBusiness(Overseas)

A TECH TEXTILE CO.,LTD.
(Kabin Buri, Thailand）(Note)

Wacoal

WacoalBusiness(Overseas)

91

1,500

820

(24,459)

205

［ －］

59

228

(235）

［ 19］
124
［ 22］

affairs
Facilities for adm
inistration affairs/
manufacturing

609
［ －］

facilities
Manufacturing
facilities

400
［ －］

Facilities for adm
inistration affairs/
manufacturing

1,964
［ 2］

facilities
Manufacturing
facilities
Manufacturing
facilities

233

524
［ －］

731

1,089

( 65,136）［ －］1

The amount of book value above does not include consumption taxes, etc.

23None of our major facilities is currently out of service.
Buildings and land regarding certain domestic subsidiaries under (2) above are under lease by the Company. The bookvalue of the buildings and land are as follows:
Name of Business Office(Location)

Operating Segment

Type of Equipment andFacilities

Book Value (Millions of yen)
2

Buildings

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

Wacoal Business

Facilities for

One other business office in(Domestic)

administration affairs(Chiyoda-ku, Tokyo)

Wacoal Business

Facilities for

One other business office in(Domestic)

administration affairs

Wacoal Corp. Osaka OfficeWacoal Business

Facilities for(Yodogawa-ku, Osaka)(Domestic)

administration affairs

6,097

591
(8,316)

Kyoto district
Wacoal Corp. Tokyo Office
1,454

1,945
(1,471)

Tokyo

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

Wacoal Business(Domestic)
Wacoal Business(Domestic)

Sales facilities

376

1,401

Facilities formerchandise
management- 32 -

2,028

960(1,833)
3,972(1,739)1,419(38,923)

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

45

Wacoal Business

Manufacturing(Domestic)facilities

52

252

(19,369)

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

Operating Segment

Peach John Co., Ltd. Head Office

Peach John

(Shibuya-ku, Tokyo)

Business

Lecien Corp. Osaka Office(Nishi-ku, Osaka)

Type of Equipment
and Facilities

2

2

Annual Lease
Amount(Millions of yen)

Buildings (m )Land (m )

1,708

－

130

1,747

－

57

Facilities foradministrationaffairs
Facilities for

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

WACOAL AMERICA, INC.
(New York, USA)
PHILIPPINE WACOAL CORP.
(Manila, Philippines)

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

Operating Segment

Type of Equipment
and Facilities

WacoalFacilities for

Business

administration(Overseas)affairs

WacoalFacilities for

Business

administration(Overseas)affairs

WacoalBusiness(Overseas)

Guandong Wacoal Inc.
(Guandong, China)

WacoalBusiness(Overseas)

VIETNAM WACOAL CORP.
(Bien Hoa City, Vietnam)

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

WacoalBusiness(Overseas)
WacoalBusiness(Overseas)

22

Annual Lease
Amount(Millions of yen)

Buildings (m )Land (m )

7,903

－

237

926

－

12

－

11,871

5－

11,224

3－

25,195

3－

27,543

1

Facilities for admi
nistration affairs/m
anufacturing
facilities
Manufacturing
facilities
Facilities for admi
nistration affairs/m
anufacturing
Facilities
Manufacturing
facilities

3. 【Plans for Capital Investment, Disposals of Property, Plants, and Equipment, etc.】(1) Additions of Important Facilities
Planned Capital Expenditures

Name ofCompany/
Business Office

Location

Wacoal Holdings
Corp., Businessoffice in Kyoto
district

Minami-ku,
Kyoto

OperatingSegment

WacoalBusiness(Domestic)

Type of Equipment
and Facilities

Facilities foradministrationaffairs

Aggregate
Amount Paid
(Millions of yen) (Millions of yen)

6,395(2) Disposals of Important Facilities
Not applicable.

- 33 -

4,391

Scheduled Date of Construction
Funding Method
LaunchOwn capital andNovember 2014
borrowings

Completion

July 2016

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

500,000,000 shares

Total

500,000,000 shares(ii) Number of Shares Issued
Names of Stock Exchanges on
Number of Shares Issued
Number of Shares Issued which the Company is listed
as of the end of Fiscal
as of the Filing Dateor Names of AuthorizedYear (March 31, 2016)(June 29, 2016) (shares) Financial Instruments Firms(shares)
Association

Class

Common stock

143,378,085

First section of Tokyo
Stock Exchange

143,378,085

Description

Shareholders haveunlimited standard rights.
The number of sharesconstituting a unit is
1,000.

Total

143,378,085

143,378,085－－(2) Status of Stock Acquisition Rights
The stock acquisition rights are issued by the Company in accordance with the Companies Act.
(i) First Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 30, 2008)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

30 (Note 1)

30 (Note 1)

Number of stock acquisition rights held by the Company－
Common stock

Common stock

Class of shares represented by stock acquisition rights

1,000 shares per one stockacquisition right

1,000 shares per one stockacquisition right

30,000 shares (Note 2)

30,000 shares (Note 2)

Number of shares represented by stock acquisition rights－

Amount to be paid upon exercise of stock acquisition rights

One (1) yen per share

One (1) yen per share

Exercise period

From September 2, 2008
until September 1, 2028

From September 2, 2008
until September 1, 2028

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

Issue price: 1,138 yen
Issue price: 1,138 yen
Amount capitalized as common Amount capitalized as common
stock: 569 yenstock: 569 yen(Note 3)(Note 3)

Subject to the approval of the

Subject to the approval of theBoard of Directors

Board of Directors－－(Note 4)(Note 4)

Terms and conditions for exercising the stock acquisition rights
Matters related to transfer of the stock acquisition rights
Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one (1) stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the number of shares represented by stockacquisition rights (the “Conversion Ratio”) will be adjusted in accordance with the following formula:- 34 -

Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to each of the holders of stock acquisition rights who are registered as holders of stock acquisition rights(“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)

(2)

Option holders may exercise their stock acquisition rights in the event that they lose their status as Director (including
officers of a company that has adopted the committee system), Audit & Supervisory Board Member, or executive
officer of the Company and Wacoal Corp. (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 theexercise period as stipulated in the table above and (ii) the five-year anniversary of the day after the Date of Loss of
Status (the “Exercise Start Date”).
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2027
From September 2, 2027 until September 1, 2028.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly
owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required, if aresolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.
If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts a merger (limited to a merger that would result in the dissolution of the Company),(3)

4absorption-type demerger, incorporation-type demerger, stock swap or share transfer (collectively, “Organizational
Restructuring”), stock acquisition rights of the joint stock companies (kabushiki kaisha) listed in Article 236, Paragraph 1,
Item 8, (a) through (e) of the Companies Act (the “Surviving Company”) shall be granted to each holder of stockacquisition rights remaining immediately prior to the Organizational Restructuring takes effect (the “Residual Stock
Acquisition Rights”) (i.e., for an absorption-type demerger, the date on which the demerger takes effect; for an
incorporation-type demerger, the date on which the new company is incorporated; for a stock swap, the date on which thestock swap takes effect; and for share transfer, the date on which the wholly owning parent company is incorporated byshare transfer) in accordance with the following terms and conditions. In such case, the remaining stock acquisition rights
shall be canceled, and the Surviving Company shall issue new stock acquisition rights; provided, however, that this shall belimited 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-type demerger agreement, merger andspin-off agreement, new spin-off plan, stock swap agreement, or share transfer plan:
(1)

(2)

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:(3)

Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:- 35 -

(4)To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid after
restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued upon theexercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid after
restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise of eachstock 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 aboveand (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the exercise ofstock acquisition rights as stipulated in the table above.

(6)

Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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 in accordance with Article 40-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock

(7)
(8)

stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer;(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of the(9)shares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

- 36 -

(ii) Second Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 30, 2008)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

8 (Note 1)

8 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

Common stock
1,000 shares per one stock

Common stock
1,000 shares per one stockacquisition rightacquisition right

8,000 shares (Note 2)

8,000 shares (Note 2)

Number of shares represented by stock acquisition rights
Amount to be paid upon exercise of stock acquisition rights
Exercise period
Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

One yen per share

One yen per share

From September 2, 2008
until September 1, 2028

From September 2, 2008
until September 1, 2028

Issue price: 1,138 yen
Issue price: 1,138 yen
Amount capitalized as common Amount capitalized as common
stock: 569 yenstock: 569 yen

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

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－(Note 4)(Note 4)

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one (1) stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion

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

3

Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by 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 insuch case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the(2)

expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the Exercise
Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:- 37 -

(i)if the Exercise Start Date of the Option holder has not occurred by September 1, 2027
From September 2, 2027 until September 1, 2028.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly(3)
4

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

(2)
(3)

(4)

(5)

(6)

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

(7)
(8)

In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shall be
increased by half the limit for increases in common stock that are calculated in accordance with Article 40-1 of
the Japanese Company Accounting Regulations. Any amount less than one (1) yen shall be rounded up to thenearest yen.

(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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;- 38 -

(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer;(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that the(9)Company shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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:(iii) Third Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 30, 2009)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

25 (Note 1)

25 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

Common stock
1,000 shares per one stockacquisition rightCommon stock
1,000 shares per one stockacquisition right

Number of shares represented by stock acquisition rights

25,000 shares (Note 2)

25,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

From September 2, 2009 until
September 1, 2029

From September 2, 2009 until
September 1, 2029

Issue price: 1,085 yen

Issue price: 1,085 yen

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

Amount capitalized as common Amount capitalized as common
stock: 543 yenstock: 543 yen

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

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－(Note 4)(Note 4)

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one (1) stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,
the Company shall provide prompt notification or announcement thereafter.
- 39 -

3(1)

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

(2)

Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:(i)if the Exercise Start Date of the Option holder has not occurred by September 1, 2028
From September 2, 2028 until September 1, 2029.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly(3)
4

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

(2)
(3)

(4)

(5)

(6)

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

(7)

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, which are calculated in accordance with Article 17-1of the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.

(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.

- 40 -

(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, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

(iv) Fourth Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 30, 2009)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

8 (Note 1)

8 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

Common stock
1,000 shares per one stockacquisition rightCommon stock
1,000 shares per one stockacquisition right

8,000 shares (Note 2)

8,000 shares (Note 2)

Number of shares represented by stock acquisition rights
Amount to be paid upon exercise of stock acquisition rights
Exercise period
Issue price for shares issued through the exercise of the stockacquisition rights and the amount capitalized as common stock

One yen per share

One yen per share

From September 2, 2009 until

From September 2, 2009 until

September 1, 2029

September 1, 2029

Issue price: 1,085 yen
Issue price: 1,085 yen
Amount capitalized as common Amount capitalized as common
stock: 543 yenstock: 543 yen

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

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－(Note 4)(Note 4)

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Ratio

=

Conversion Ratio prior toadjustment

X

Ratio of stock split
or reverse stock split

This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date for- 41 -

such stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,3

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 insuch case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the(2)“Exercise Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2028
From September 2, 2028 until September 1, 2029.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly
owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required, if aresolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.

(3)
4

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

(4)

(5)

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

- 42 -

(6)Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares 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 in accordance with Article 17-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock

(7)
(8)

stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer.
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights.
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer;(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of the(9)shares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

(v) Fifth Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 30, 2010)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

31 (Note 1)

31 (Note 1)

Number of stock acquisition rights held by the Company－
Common stock

Common stock

Class of shares represented by stock acquisition rights

1,000 shares per one stockacquisition right

1,000 shares per one stockacquisition right

Number of shares represented by stock acquisition rights

31,000 shares (Note 2)

31,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

From September 2, 2010 until
September 1, 2030

From September 2, 2010 until
September 1, 2030

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

Issue price: 1,082 yen
Issue price: 1,082 yen
Amount capitalized as common Amount capitalized as common
stock: 541 yenstock: 541 yen(Note 3)(Note 3)

Subject to the approval of the

Subject to the approval of theBoard of Directors

Board of Directors－－(Note 4)(Note 4)

Terms and conditions for exercising the stock acquisition rights
Matters related to transfer of the stock acquisition rights
Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1－

The number of shares represented by one stock acquisition right is 1,000 shares.
- 43 -

2

In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or3

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(2)such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the Exercise
Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2029
From September 2, 2029 until September 1, 2030.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly
owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required, if a(3)
4

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

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

(2)
(3)

(4)

The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid after
restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued upon theexercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid after- 44 -

(5)(6)

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

(7)
(8)

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

(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

- 45 -

(vi) Sixth Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 30, 2010)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

7 (Note 1)

7 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

Common stock
1,000 shares per one stock

Common stock
1,000 shares per one stockacquisition rightacquisition right

7,000 shares (Note 2)

7,000 shares (Note 2)

Number of shares represented by stock acquisition rights
Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

Exercise period

From September 2, 2010 until
September 1, 2030

From September 2, 2010 until
September 1, 2030

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

Issue price: 1,082 yen
Issue price: 1,082 yen
Amount capitalized as common Amount capitalized as common
stock: 541 yenstock: 541 yen

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

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－(Note 4)(Note 4)

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion

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

3

Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by 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 insuch case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the(2)

expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the Exercise
Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:- 46 -

(i)if the Exercise Start Date of the Option holder has not occurred by September 1, 2029
From September 2, 2029 until September 1, 2030.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly(3)
4

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

(2)
(3)

(4)

(5)

(6)

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

(7)
(8)

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

(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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;- 47 -

(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer;(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that the(9)Company shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

(vii) Seventh Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 29, 2011)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

48 (Note 1)

48 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

Common stock
1,000 shares per one stockacquisition rightCommon stock
1,000 shares per one stockacquisition right

Number of shares represented by stock acquisition rights

48,000 shares (Note 2)

48,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

From September 2, 2011 until
September 1, 2031

From September 2, 2011 until
September 1, 2031

Issue price: 879 yen

Issue price: 879 yen

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

Amount capitalized as common Amount capitalized as common
stock: 440 yen
stock: 440 yen

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

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－(Note 4)(Note 4)

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,
the Company shall provide prompt notification or announcement thereafter.
- 48 -

3(1)

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

(2)

Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:(i)if the Exercise Start Date of the Option holder has not occurred by September 1, 2030
From September 2, 2030 until September 1, 2031.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly(3)
4

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

(2)
(3)

(4)

(5)

(6)

Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid after
restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued upon theexercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid after
restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise of eachstock 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 aboveand (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the exercise ofstock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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 in accordance with Article 17-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.

(7)(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:(8)

The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:- 49 -

In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of the(9)shares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

(viii) Eighth Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 29, 2011)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

18 (Note 1)

18 (Note 1)

Number of stock acquisition rights held by the Company－
Common stock

Common stock

Class of shares represented by stock acquisition rights

1,000 shares per one stockacquisition right

1,000 shares per one stockacquisition right

Number of shares represented by stock acquisition rights

18,000 shares (Note 2)

18,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

From September 2, 2011 until
September 1, 2031

From September 2, 2011 until
September 1, 2031

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

Issue price: 879 yen
Issue price: 879 yen
Amount capitalized as common Amount capitalized as common
stock: 440 yen

stock: 440 yen(Note 3)(Note 3)

Subject to the approval of the

Subject to the approval of theBoard of Directors

Board of Directors－－(Note 4)(Note 4)

Terms and conditions for exercising the stock acquisition rights
Matters related to transfer of the stock acquisition rights
Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)－

1

The number of shares represented by one stock acquisition right is 1,000 shares.

2

In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
- 50 -

In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or3

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(2)such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the Exercise
Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2030
From September 2, 2030 until September 1, 2031.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly
owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required, if a(3)
4

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

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

(2)
(3)

(4)

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

(5)

(6)

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 aboveand (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the exercise ofstock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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 in accordance with Article 17-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.
- 51 -

(7)(8)(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

(ix) Ninth Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 31, 2012)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

53 (Note 1)

53 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

Common stock
1,000 shares per one stockacquisition rightCommon stock
1,000 shares per one stockacquisition right

Number of shares represented by stock acquisition rights

53,000 shares (Note 2)

53,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

From September 4, 2012 until

From September 4, 2012 until

September 3, 2032

September 3, 2032

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

Issue price: 800 yen
Issue price: 800 yen
Amount capitalized as common Amount capitalized as common
stock: 400 yen
stock: 400 yen

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

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－(Note 4)(Note 4)

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Ratio

=

Conversion Ratio prior toadjustment- 52 -

X

Ratio of stock split
or reverse stock split

This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,3

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 insuch 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(2)

Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:(i)if the Exercise Start Date of the Option holder has not occurred by September 1, 2031
From September 2, 2031 until September 3, 2032.

(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly
owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required, if aresolution of the board or determination by the chief executive officer of the Company is passed):4

For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving Company
shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following terms andconditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving Company shall issue
new stock acquisition rights; provided, however, that this shall be limited to the case where the grant of stock acquisitionrights of the Surviving Company pursuant to the following conditions is stipulated in the absorption-type demerger
agreement, incorporation-type demerger agreement, merger and spin-off agreement, new spin-off plan, stock swap
agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
(2)
(3)

(4)

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

(5)

Exercise Period for Stock Acquisition Rights:- 53 -

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

(7)
(8)

Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain all(9)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.

(x) Tenth Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 31, 2012)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

14 (Note 1)

14 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

Common stock
1,000 shares per one stock

Common stock
1,000 shares per one stockacquisition rightacquisition right

Number of shares represented by stock acquisition rights

14,000 shares (Note 2)

14,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

From September 4, 2012 until
September 3, 2032

From September 4, 2012 until
September 3, 2032

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

Issue price: 800 yen
Issue price: 800 yen
Amount capitalized as common Amount capitalized as common
stock: 400 yen

stock: 400 yen(Note 3)(Note 3)

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－

Terms and conditions for exercising the stock acquisition rights
Matters related to transfer of the stock acquisition rights
Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment- 54 -

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

1

The number of shares represented by one stock acquisition right is 1,000 shares.

2

In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or3

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(2)such case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the Exercise
Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2031
From September 2, 2031 until September 3, 2032.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly
owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required, if a(3)
4

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

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

(2)
(3)

(4)

The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:- 55 -

The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid after
restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued upon theexercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid after
restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise of each
(5)

(6)

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 aboveand (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the exercise ofstock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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 in accordance with Article 17-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shall

(7)
(8)

be increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that the(9)Company shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

(xi) Eleventh Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 31, 2013)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

52 (Note 1)

52 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

Common stock
1,000 shares per one stock

Common stock
1,000 shares per one stockacquisition rightacquisition right

Number of shares represented by stock acquisition rights

52,000 shares (Note 2)

52,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

From September 3, 2013 until
September 2, 2033

From September 3, 2013 until
September 2, 2033

Exercise period- 56 -

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

Issue price: 919 yen
Issue price: 919 yen
Amount capitalized as common Amount capitalized as common
stock: 460 yen
stock: 460 yen

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

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－(Note 4)(Note 4)

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion=

Conversion Ratio prior to

X

Ratio of stock split

Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by 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 insuch case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the Exercise
Start Date.

(2)

Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:(i)if the Exercise Start Date of the Option holder has not occurred by September 1, 2032
From September 2, 2032 until September 2, 2033.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly(3)
4

owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required, if aresolution of the board or determination by the chief executive officer of the Company is passed):For 15 days from the day after the date of said approval.
If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving Company
shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following terms andconditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving Company shall issue
new stock acquisition rights; provided, however, that this shall be limited to the case where the grant of stock acquisitionrights of the Surviving Company pursuant to the following conditions is stipulated in the absorption-type demerger- 57 -

agreement, incorporation-type demerger agreement, merger and spin-off agreement, new spin-off plan, stock swap
agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
(2)
(3)

(4)

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

(6)

Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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 in accordance with Article 17-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock

(7)
(8)

stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of the(9)shares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

(xii) Twelfth Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 31, 2013)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

25 (Note 1)

Number of stock acquisition rights held by the Company－- 58 -

25 (Note 1)－

Common stock
1,000 shares per one stockacquisition rightCommon stock
1,000 shares per one stockacquisition right

Number of shares represented by stock acquisition rights

25,000 shares (Note 2)

25,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

From September 3, 2013 until

From September 3, 2013 until

September 2, 2033

September 2, 2033

Issue price: 919 yen

Issue price: 919 yen

Class of shares represented by stock acquisition rights

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

Amount capitalized as common Amount capitalized as common
stock: 460 yen
stock: 460 yen

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

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－(Note 4)(Note 4)

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by 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 insuch case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the
expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the Exercise
Start Date.

(2)

Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:(i)if the Exercise Start Date of the Option holder has not occurred by September 1, 2032
From September 2, 2032 until September 2, 2033.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly
owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required, if aresolution 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.

- 59 -

(3)4

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

(4)

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

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

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

(7)
(8)

Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain all(9)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.
- 60 -

(xiii) Thirteenth Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 31, 2014)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

46 (Note 1)

46 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

Common stock
1,000 shares per one stock

Common stock
1,000 shares per one stockacquisition rightacquisition right

Number of shares represented by stock acquisition rights

46,000 shares (Note 2)

46,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

Exercise period

From September 2, 2014 until
September 1, 2034

From September 2, 2014 until
September 1, 2034

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

Issue price: 938 yen
Issue price: 938 yen
Amount capitalized as common Amount capitalized as common
stock: 469 yenstock: 469 yen

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

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－(Note 4)(Note 4)

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion

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

3

Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by 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 insuch case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the(2)

expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the Exercise
Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2033
From September 2, 2033 until September 1, 2034.
- 61 -

(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly
owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required, if aresolution of the board or determination by the chief executive officer of the Company is passed):4

For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving Company
shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following terms andconditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving Company shall issue
new stock acquisition rights; provided, however, that this shall be limited to the case where the grant of stock acquisitionrights of the Surviving Company pursuant to the following conditions is stipulated in the absorption-type demerger
agreement, incorporation-type demerger agreement, merger and spin-off agreement, new spin-off plan, stock swap
agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition(2)(3)

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

(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 the amount paid after
restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued upon theexercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid after
restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise of each

(5)

(6)

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 aboveand (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the exercise ofstock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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 in accordance with Article 17-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shall

(7)
(8)

be increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or- 62 -

(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

(xiv) Fourteenth Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 31, 2014)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

17 (Note 1)

17 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

Common stock
1,000 shares per one stockacquisition rightCommon stock
1,000 shares per one stockacquisition right

Number of shares represented by stock acquisition rights

17,000 shares (Note 2)

17,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

From September 2, 2014 until

From September 2, 2014 until

September 1, 2034

September 1, 2034

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

Issue price: 938 yen
Issue price: 938 yen
Amount capitalized as common Amount capitalized as common
stock: 469 yenstock: 469 yen

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

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－(Note 4)(Note 4)

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Ratio

=

Conversion Ratio prior toadjustment

X

Ratio of stock split
or reverse stock split

This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,3

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 insuch case, such Option holder may only exercise his or her stock acquisition rights until the earlier of (i) the- 63 -

(2)expiration date of the exercise period as stipulated in the table above and (ii) the five-year anniversary of the Exercise
Start Date.
Notwithstanding the foregoing, during the exercise period set forth in the table above, the Option holders may
exercise their stock acquisition rights in the following cases (for item (ii), excluding the case where the stockacquisition rights of the Surviving Company are granted to the Option holders pursuant to Note 4 below) only during
the respective periods designated below:(i) if the Exercise Start Date of the Option holder has not occurred by September 1, 2033
From September 2, 2033 until September 1, 2034.
(ii) if the general meeting of shareholders of the Company approves a merger agreement pursuant to which theCompany is to be dissolved or a stock swap agreement or share transfer plan that makes the Company a wholly
owned subsidiary (or, in the event a resolution of the general meeting of shareholders is not required, if aresolution of the board or determination by the chief executive officer of the Company is passed):4

For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving Company
shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following terms andconditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving Company shall issue
new stock acquisition rights; provided, however, that this shall be limited to the case where the grant of stock acquisitionrights of the Surviving Company pursuant to the following conditions is stipulated in the absorption-type demerger
agreement, incorporation-type demerger agreement, merger and spin-off agreement, new spin-off plan, stock swap
agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
(2)
(3)

(4)

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

(6)

Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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 in accordance with Article 17-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock

(7)
(8)

stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves of- 64 -

any of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

(xv) Fifteenth Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 31, 2015)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

37 (Note 1)

37 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

Common stock
1,000 shares per one stockacquisition rightCommon stock
1,000 shares per one stockacquisition right

Number of shares represented by stock acquisition rights

37,000 shares (Note 2)

37,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

From September 2, 2015 until

From September 2, 2015 until

September 1, 2035

September 1, 2035

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

Issue price: 1,420 yen
Issue price: 1,420 yen
Amount capitalized as common Amount capitalized as common
stock: 710 yen
stock: 710 yen

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

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－(Note 4)(Note 4)

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Ratio

=

Conversion Ratio prior toadjustment

X

Ratio of stock split
or reverse stock split

This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
- 65 -

Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,3

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 insuch 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(2)

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

(3)
4

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

(4)

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

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

From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table aboveand (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the exercise ofstock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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 in accordance with Article 17-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.

- 66 -

(7)(8)(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

(xvi) Sixteenth Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 31, 2015)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date
(March 31, 2016)(May 31, 2016)
Number of stock acquisition rights

12 (Note 1)

12 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

Common stock
1,000 shares per one stockacquisition rightCommon stock
1,000 shares per one stockacquisition right

Number of shares represented by stock acquisition rights

12,000 shares (Note 2)

12,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

From September 2, 2015 until

From September 2, 2015 until

September 1, 2035

September 1, 2035

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

Issue price: 1,420 yen
Issue price: 1,420 yen
Amount capitalized as common Amount capitalized as common
stock: 710 yen
stock: 710 yen

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

Subject to the approval of theBoard of Directors

Subject to the approval of theBoard of Directors－－(Note 4)(Note 4)

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
(Note)

1
2

The number of shares represented by one stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the free allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Ratio

=

Conversion Ratio prior toadjustment- 67 -

X

Ratio of stock split
or reverse stock split

This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,3

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 insuch 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(2)

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

(3)
4

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

(4)

(5)

Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid after
restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued upon theexercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid after
restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise of eachstock 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 aboveand (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the exercise ofstock acquisition rights as stipulated in the table above.
- 68 -

(6)Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares 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 in accordance with Article 17-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock

(7)
(8)

stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation 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 the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of the(9)shares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof 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.

(3) Status of Exercise of Bonds with Stock Acquisition Rights containing a Clause for Exercise Price Adjustment
Not applicable.
(4) Right Plans
Not applicable.
(5) Trends in the Total Number of Shares Issued, Common Stock, etc.
Changes in the
Balance of
Changes in
Total Number
Total Number
Commonof Sharesof Shares
Date
Stock
IssuedIssued(Millions of(Thousands of(Thousands ofyen)shares)shares)March 28, 2008
(3,900)143,378－(Note)(Note)

This decrease is due to the cancellation of shares held as treasury stock.

- 69 -

Balance ofCommonStock(Millions ofyen)

Changes in
Additional
Paid-in Capital(Millions ofyen)

Balance of
Additional
Paid-in Capital(Millions ofyen)

13,260－29,294

(6) Status of Shareholders
As of March 31, 2016
Status of Shares (1 unit = 1,000 shares)
Foreign Shareholders
Category

Shares under
One Unit(share)National and
Local
Governments

Financial
Institutions

Securities
Companies

Other
Corporations

Foreignshareholders
other than
individuals

Individuals

－

67

26

187

227

5

10,015

10,527－－58,0002,361

28,376

28,848925,011

142,605

773,085

－

40.67

1.66

19.90

20.23

0.01

17.53

100

－

Number ofshareholders

Individuals
and Other

Total

Number ofshares held
(units)Ratio (%)

(Note)Out of the treasury stock of 2,519,350 shares, 2,519 units are included under “Individuals and other,” and 350 shares of less than
one share unit are included under “Shares under One Unit (share).”(7) Status of Major Shareholders
As of March 31, 2016
Name of Shareholder
The Bank of Tokyo-Mitsubishi UFJ,

Address

Number of Shares
held by Shareholder(Thousands of shares)

Shareholding
Ratio (%)

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

6,990

4.87

Meiji Yasuda Life Insurance Company

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

6,100

4.25

Japan Trustee Services Bank, Ltd. (Trust
Account)

1-8-11, Harumi, Chuo-ku, Tokyo

5,243

3.65

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

4,705

3.28

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

4,510

3.14

3,672

2.56

Ltd.

The Bank of Kyoto, Ltd.
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Nippon Life Insurance Company

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

The Shiga Bank, Ltd.

1-38, Hamamachi, Otsu-shi, Shiga

3,646

2.54

Mitsubishi UFJ Trust and Banking
Corporation

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

3,050

2.12

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

2,732

1.90

Asahi Kasei Fibers Corporation

3-3-23, Nakanoshima, Kita-ku, Osaka

2,482

1.73

43,131

30.08

Total
(Note)

12

──────

The Company is holding 2,519 thousand shares of treasury stock, which are not listed in the above list of major
shareholders.
The numbers of shares held by Japan Trustee Services Bank, Ltd. (Trust Account) and The Master Trust Bank of Japan,
Ltd. (Trust Account) are related to their respective trust services.

3

The Company has received a copy of the substantial shareholding report, dated June 22, 2012, filed by Mitsubishi UFJ
Financial Group, Inc., which indicates that the shareholders in the below table are holding the respective number of theCompany’s shares as of June 15, 2012. While the number of shares held by The Bank of Tokyo-Mitsubishi UFJ, Ltd.
(6,990 thousand shares), is indicated in the above table of the major shareholders, the other joint shareholders are not listed
in the above table because we were unable to confirm the actual shareholdings’ status of the other joint shareholders as ofthe end of fiscal year 2016. The content of such substantial shareholding report (the amended report) is as follows:- 70 -Name of Shareholder

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

The Bank of Tokyo-Mitsubishi UFJ,Ltd.

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

6,990

4.87

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

6,198

4.32

Mitsubishi UFJ Asset Management
Co., Ltd.

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

335

0.23

Mitsubishi UFJ Morgan Stanley
Securities Co., Ltd.

2-5-2, Marunouchi, Chiyoda-ku, Tokyo

842

0.58

14,365

10.01

Mitsubishi UFJ Trust and Banking
Corporation

Total(8) Status of Voting Rights(i) Shares Issued
As of March 31, 2016
Number of Shares(Shares)Number of Voting Rights(Units)Description

Shares without voting rights

－

－

－

Shares with restricted voting rights –treasury stock, etc.

－

－

－

－

－

－

－

Shareholders haveunlimited standard
rights. The number ofCategory

Shares with restricted voting rights –other(Treasury stock)
Common stock

Shares with full voting rights –treasury stock, etc.

2,519,000

Shares with full voting rights – othershares constituting a unit
is 1,000.

Common stock
140,086,000

140,086

Common stock

Shares less than one unit

773,085

Total number of shares issued

143,378,085

Total voting rights held by all－

Same as above.

－－
140,086－

shareholders

Same as above.

－(ii) Treasury Stock, etc.
As of March 31, 2016
Name of
Shareholder

Address(Treasury stock)
Wacoal Holdings

29 Nakajima-cho,
Kisshoin, Minami-Corp.

ku, Kyoto
Total－

Number of
Shares held under
Own Name

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

2,519,000－

2,519,000

1.75

2,519,000－

2,519,000

1.75- 71 -

Shareholding Ratio(%)

(9) Stock Option Plans
The Company issues stock acquisition rights under the stock option plans.
(i) First Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 30, 2008, in accordance with the provisions of theCompanies Act.
Date of resolution

July 30, 2008

Category and number of eligible recipients

Five Directors of the Company

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

40,000

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stockacquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exercise－of the stock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts

Please see (2) Status of Stock Acquisition Rights above.

(ii) Second Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 30, 2008, in accordance with the provisions of theCompanies Act.
Date of resolution

July 30, 2008

Category and number of eligible recipients

Five Directors of subsidiaries

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

17,000

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stockacquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exerciseof the stock acquisition rights in lieu of cash payment－

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

Please see (2) Status of Stock Acquisition Rights above.

- 72 -

(iii) Third Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 30, 2009, in accordance with the provisions of theCompanies Act.
Date of resolution

July 30, 2009

Category and number of eligible recipients

Four Directors of the Company

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

35,000

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stockacquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exerciseof the stock acquisition rights in lieu of cash payment－

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

Please see (2) Status of Stock Acquisition Rights above.

(iv) Fourth Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 30, 2009, in accordance with the provisions of theCompanies Act.
Date of resolution

July 30, 2009

Category and number of eligible recipients

Four Directors of subsidiaries

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

14,000

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stockacquisition rights
Matters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.
Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exercise－of the stock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts

Please see (2) Status of Stock Acquisition Rights above.

- 73 -

(v) Fifth Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 30, 2010, in accordance with the provisions of theCompanies Act.
Date of resolution

July 30, 2010

Category and number of eligible recipients

Four Directors of the Company

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

35,000

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stockacquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exerciseof the stock acquisition rights in lieu of cash payment－

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

Please see (2) Status of Stock Acquisition Rights above.

(vi) Sixth Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 30, 2010, in accordance with the provisions of theCompanies Act.
Date of resolution

July 30, 2010

Category and number of eligible recipients

Three Directors of subsidiaries

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

11,000

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stock acquisitionrightsMatters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.
Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exercise－of the stock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts

Please see (2) Status of Stock Acquisition Rights above.

- 74 -

(vii) Seventh Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 29, 2011, in accordance with the provisions of theCompanies Act.
Date of resolution

July 29, 2011

Category and number of eligible recipients

Five Directors of the Company

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

Please see (2) Status of Stock Acquisition Rights above.

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stockacquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exerciseof the stock acquisition rights in lieu of cash payment－

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

Please see (2) Status of Stock Acquisition Rights above.

(viii) Eighth Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 29, 2011, in accordance with the provisions of theCompanies Act.
Date of resolution

July 29, 2011

Category and number of eligible recipients

Five Directors of subsidiaries

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

21,000

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stock acquisitionrightsMatters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.
Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exercise－of the stock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts

Please see (2) Status of Stock Acquisition Rights above.

- 75 -

(ix) Ninth Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 31, 2012, in accordance with the provisions of theCompanies Act.
Date of resolution

July 31, 2012

Category and number of eligible recipients

Five Directors of the Company

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

Please see (2) Status of Stock Acquisition Rights above.

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stockacquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exerciseof the stock acquisition rights in lieu of cash payment－

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

Please see (2) Status of Stock Acquisition Rights above.

(x) Tenth Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 31, 2012, in accordance with the provisions of theCompanies Act.
Date of resolution

July 31, 2012

Category and number of eligible recipients

Four Directors of subsidiaries

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

Please see (2) Status of Stock Acquisition Rights above.

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stock acquisitionrightsMatters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.
Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exercise－of the stock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts

Please see (2) Status of Stock Acquisition Rights above.

- 76 -

(xi) Eleventh Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 31, 2013, in accordance with the provisions of theCompanies Act.
Date of resolution

July 31, 2013

Category and number of eligible recipients

Five Directors of the Company

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

Please see (2) Status of Stock Acquisition Rights above.

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Matters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exerciseof the stock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts－
Please see (2) Status of Stock Acquisition Rights above.

(xii) Twelfth Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 31, 2013, in accordance with the provisions of theCompanies Act.
Date of resolution

July 31, 2013

Category and number of eligible recipientsSix Directors of subsidiaries

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

Please see (2) Status of Stock Acquisition Rights above.

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stock acquisitionrightsMatters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.
Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exercise－of the stock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts

Please see (2) Status of Stock Acquisition Rights above.

(xiii) Thirteenth Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 31, 2014, in accordance with the provisions of theCompanies Act.
Date of resolution

July 31, 2014

Category and number of eligible recipients

Five Directors of the Company

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

Please see (2) Status of Stock Acquisition Rights above.

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

- 77 -

Exercise period
Terms and conditions for exercising the stock acquisitionrightsMatters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.
Please see (2) Status of Stock Acquisition Rights above.
Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exercise－of the stock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts

Please see (2) Status of Stock Acquisition Rights above.

(xiv) Fourteenth Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 31, 2014, in accordance with the provisions of theCompanies Act.
Date of resolution

July 31, 2014

Category and number of eligible recipients

Five Directors of subsidiaries

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

Please see (2) Status of Stock Acquisition Rights above.

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Matters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exerciseof the stock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts－
Please see (2) Status of Stock Acquisition Rights above.

(xv) Fifteenth Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 31, 2015, in accordance with the provisions of theCompanies Act.
Date of resolution

July 31, 2015

Category and number of eligible recipients

Five Directors of the Company

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

Please see (2) Status of Stock Acquisition Rights above.

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Matters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exerciseof the stock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts－
Please see (2) Status of Stock Acquisition Rights above.

- 78 -

(xvi) Sixteenth Stock Acquisition Rights
This has been resolved at the Board of Directors’ meeting held on July 31, 2015, in accordance with the provisions of theCompanies Act.
Date of resolution

July 31, 2015

Category and number of eligible recipients

Four Directors of subsidiaries

Class of shares represented by stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Number of shares

Please see (2) Status of Stock Acquisition Rights above.

Amount to be paid upon exercise of stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

Please see (2) Status of Stock Acquisition Rights above.

Terms and conditions for exercising the stock acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Matters related to transfer of the stock acquisition rights

Please see (2) Status of Stock Acquisition Rights above.

Matters related to contributions of bonds upon exerciseof the stock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts－
Please see (2) Status of Stock Acquisition Rights above.

- 79 -

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 ofshares 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
Category(Shares)
Status of Resolution of Board of Directors (May 27, 2016)(Period for acquisition: From June 2, 2016 to September 30,
2,300,000
2016)

Total Amount (Yen)
3,000,000,000

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

－

－

Treasury stock acquired during the current period

－

－

100.0

100.0

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

Treasury stock acquired during the current period does not include shares constituting less than one full unit purchased during
the period from June 1, 2016, to the filing date of this report.

(3) Acquisition of Treasury Stock not based on a Resolution of Ordinary General Meeting of Shareholders or Board of Directors
Acquisition pursuant to Article 155, Item 7 of the Companies Act
Number of Shares
Category
Total Amount (Yen)(Shares)
Treasury stock acquired during the current fiscal year
Treasury stock acquired during the current period(Note)

4,974

6,993,175－－

Treasury stock acquired during the current period does not include shares constituting less than one full unit purchased during
the period from June 1, 2016, to the filing date of this report.

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

Current Fiscal Year

Current Period

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

900

1,178,100－－

Acquired treasury stock that was canceled

－

－

－

－

Acquired treasury stock that was transferred due tomerger, stock swap, or company split

－

－

－

－

22,00025,118,100－－

Other (Note 2)
Number of shares of treasury stock held
(Note)

1
2

2,519,350－

2,519,350－

Number of shares of treasury stock held during the current period does not include shares constituting less than one full unit
purchased or sold during the period from June 1, 2016, to the filing date of this report.
Number of shares and total disposition amount for the current fiscal year under “Other” category were related to theexercise of stock acquisition rights.

- 80 -

3. 【Dividend Policy】
Our basic policy on profit distribution to shareholders is to make stable distributions based on consideration of our consolidated
performance, while seeking to increase our enterprise value through active investment aimed at higher profitability and to increase net
income per share. Based on our basic policy, we provide a fiscal year-end dividend once a year.
We also prescribe that the Company may distribute earnings subject to the resolution of the Board of Directors’ meeting pursuant
to the provisions of Article 459 of the Companies Act.
Based on such policy, we plan to distribute the year-end dividend of 33.00 yen per share as a distribution of earnings for the current
fiscal year.
As for retained earnings, with the aim of improving our corporate value, we have actively invested in expanding new points ofcontact with consumers for our domestic business and investing in our overseas businesses. We also plan to use our retained earnings
in our strategic investments for maintaining competitiveness and reinforcing growth. With these efforts, we seek to benefit ourshareholders by improving future profitability. We also intend to flexibly acquire treasury stock, and we will try to improve capitalefficiency and return profits to our shareholders.
(Note)The distribution of earnings for which record date belongs to the current fiscal year is as follows:
Total Dividend Amount
Dividend Amount per Share
Date of Resolution(Millions of yen)
(Yen)

May 9,2016
Resolution of Board of Directors’ meeting

4,648

33.00

4. 【Changes in Share Prices】(1) Highest and Lowest Share Prices in each of the Recent Five Fiscal Years
Fiscal Year

64th

65th

66th

67th

68th

Year EndMarch 2012

March 2013

March 2014

March 2015

March 2016

Highest (yen)

1,066

1,056

1,128

1,471

1,768

Lowest (yen)

903

842

938

992

1,220

(Note)The share prices are market prices on the first section of the Tokyo Stock Exchange.

(2) Highest and Lowest Share Prices in each of the Recent Six Months
Month

October 2015

November 2015

December 2015

January 2016

February 2016

March 2016

Highest (yen)

1,558

1,564

1,520

1,449

1,490

1,418

Lowest (yen)

1,398

1,450

1,400

1,303

1,220

1,295

(Note)The share prices are market prices on the first section of the Tokyo Stock Exchange.

- 81 -

5. 【Directors and Audit & Supervisory Board Members】
Male:

10 persons

Female: 2 persons (which accounted for 16.7% of the total number of directors and audit & supervisory board members)
Number of
Title

Name

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

Yoshikata
TsukamotoJan. 29, 1948

Apr. 1972

Joined the Company

Nov. 1977

Director

Nov. 1981
Sep. 1984

Managing Director
Executive Vice President

Sep. 1984

Representative Director (acting)Jun. 1987

President and Director (acting)Jun. 2002

Corporate Officer

Oct. 2005

Representative Director and President, and Corporate

Note 1

1,278

Note 1

13Note 1

18

Officer of Wacoal Corp.
Apr. 2011

Representative Director and Chairman of Wacoal Corp.
(acting)

Dec. 2012

Representative Director, Chairman, and President ofJan. 2014

Peach John C o., Ltd.
Representative Director and Chairman of Peach John
Co., Ltd.

Jun. 2015

Chairman of Peach John Co., Ltd. (acting)Mar. 1975

Joined the Company

Sep. 1996
Apr. 1997

Deputy General Manager of Guandong Wacoal Inc.
General Manager of Wacoal China Co., Ltd.

Apr. 2004

Chief of Planning & Product Group of Wing Brand
Business Department

Apr. 2005

Corporate Officer/General Manager of Wing Brand
Business Department

Apr. 2006
Director and Vice

Hironobu

President

Yasuhara

Dec. 28, 1951

Executive Corporate Officer and General Manager ofWing Brand Business Department of Wacoal Corp.

Jun. 2006

Director and Executive Corporate Officer, and General
Manager of Wing Brand Business Department , ofApr. 2008

Wacoal Corp.
Director and Senior Corporate Officer, and General
Manager of Wing Brand Business Department , of
Wacoal Corp.

Apr. 2010

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

Apr. 2011

Representative Director and President, Corporate
Officer of Wacoal Corp. (acting)Jun. 2011

Director

Jun 2013

Senior Managing Director

Jun 2016

Director and Vice President (acting)Apr. 1979

Joined the Company

Apr. 2004

Group Chief of Business Administration of Direct
Retail Operation Division of Wacoal Corp

Director and Vice
President

MasayaWakabayashi

Apr. 2008

General Manager of Corporate Planning

Apr. 2010

Corporate Officer, Chief of Corporate Planning of
Wacoal Corp.

Jan. 6, 1956

Apr. 2011

Director, Corporate Officer, Chief of Corporate
Planning of Wacoal Corp.

Apr. 2013

Director, Managing Corporate Officer, Chief ofCorporate Planning of Wacoal Corp.

Apr. 2014

Director, Managing Corporate Officer, Supervisor of
Administration of Wacoal C orp.

Jun. 2014

Managing Director and Supervisor of Group Business
Management

Jun 2016

Director and Vice President and Supervisor of Group
Business Management (acting)- 82 -

Apr. 1981

Joined the Company

Apr. 2006

Business Administration Manager of Wing Brand
Operation Division of Wacoal Corp.

Apr. 2011

Corporate Officer and Manager of Personnel Divisionof Wacoal Corp.

Apr. 2013
Director

Masashi
Yamaguchi

Nov 26, 1957

Director and Corporate Officer, and General Manager
of Personnel and Administration Division of Wacoal
Corp.

Apr. 2014

Note 1

3Note 1－

Note 1

3Note 1－

Note 677

Note 5

5

Director and Managing Corporate Officer, and General
Manager of Personnel and Administration Division of
Wacoal Corp.

Apr. 2015

Director and Senior Managing Corporate Officer incharge of Administration, and General Manager of
Personnel and Administration Division of Wacoal Corp.
(acting)

Director

Mamoru Ozaki

May 20, 1935

Jun. 2015

Director in charge of Personnel and Administration(acting)

Jun. 1991

Commissioner of the National Tax Agency

Jun. 1992

Administrative Vice Minister of FinanceMay 1994

President of People’s Finance Corporation

Oct. 1999
Feb. 2003

President of National Life Finance Corporation
Advisor to Yazaki Corporation (acting)Jul. 2003

Advisor

Jun. 2005

Director (acting)Sep. 1972

Joined HORIBA, Ltd.

Jun. 1982

Director and General Manager of Overseas Business of
HORIBA, Ltd.

Director

Atsushi Horiba

Feb. 5, 1948

Jun. 1988

Senior Managing Director and General Manager ofSales Division of HORIBA, Ltd.

Jan. 1992

Representative Director and President of HORIBA, Ltd.

Jun. 2005

Representative Director, Chairman and P resident of
HORIBA, Ltd. (acting)Jun. 2008

Director (acting)

Aug. 1996

Launched and organized monthly haiku magazine
Gekkan HepburnJan. 2001

Member of “National Language Subdivision” ofCouncil for Cultural Affairs, Ministry of Education,
Culture, Sports, Science and Technology

Dec. 2004
Director

MadokaMayuzumi

Jul. 31, 1962

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

May. 2013

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

Apr. 2014

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

Standing Audit &Supervisory
Board Member

TomokiNakamura

Jan 22, 1958

Apr. 2014

Advisor

Jun. 2015

Director (acting)Apr. 1980

Joined the Company

Oct. 2007

Accounting Manager of Wacoal Corp.

Apr. 2008

Accounting Manager

Apr. 2012

Audit & Supervisory Board Member/Secretariat ofBoard of Audit & Supervisory Board Members

Jun. 2012

Audit & Supervisory Board Member (acting)Apr. 1981

Joined the Company

Apr. 2008

Materials Control Manager of Technology/Production
Division of Wacoal Corp.

Standing Audit &Supervisory
Board Member

Kiyotaka
Hiroshima

Jan 4, 1958

Apr. 2009

Production Control Manager of Technology/Production
Division of Wacoal Corp.

Apr. 2010

Corporate Officer and General Manager ofTechnology/Production Division of Wacoal Corp.

Apr. 2011

Director and Corporate Officer and General Manager ofTechnology/Production Division of Wacoal Corp.

Apr. 2015

Director and Corporate Officer, in charge ofTechnology/Production Division of Wacoal Corp.
(acting)

Jun. 2015

Audit & Supervisory Board Member (acting)- 83 -

Audit &Supervisory
Board Member

Apr. 1968

Joined Mitsubishi Bank Ltd.

Jun. 1995

Director and Manager of Loan Department 1

Apr. 1996

Director of The Bank of Tokyo -Mitsubishi, Ltd.

Feb. 2000

Managing Director and Deputy Branch Manager of
Nihonbashi Branch

Akira
Katayanagi

Feb. 4, 1946

May 2001

Managing Director and Deputy Branch Office Manager

Jun. 2003

of Osaka Branch Office
Representative Director and President of DC Card Co.,

Note 4

11

Note 318

Note 5－Ltd.
Apr. 2007

Representative Director and Vice President of
Mitsubishi UFJ NICOS Co., Ltd.

Jun. 2008

Representative Director and Chairman of Mitsubishi
UFJ NICOS Co., Ltd.

Audit &
Supervisory

Yoko Takemura

Jun. 2010

Audit & Supervisory Board Member (acting)Apr. 1990

Registered as Lawyer (Tokyo), joins Miyake Imai Ikeda
Law Firm

Apr. 7, 1952

Board Member

Jan. 1997

Partner at Miyake Imai Ikeda Law Firm (acting)Jun. 2005

Audit & Supervisory Board Member (acting)Nov. 1977

Joined Pricewaterhouse

Aug. 1982

Registered as Certified Public Accountant

Jul. 1992

Joined Aoyama Audit Corporation

Aug. 2007

Joined Deloitte Touche Tohmatsu

Jun. 2010

Vice Chairman of The Japanese Institute of Certified

Audit &
Supervisory
Board Member

Public Accountants Kinki Chapter
Hiroshi ShiraiOct. 21, 1953

Sep. 2011

Left Deloitte Touche Tohmatsu

Oct. 2011

Established Shirai public accounting firm, Managing
Partner (acting)Jun. 2013

Resigned from position as Vice Chairman of The
Japanese Institute of Certified Public Accountants Kinki
ChapterJun. 2015

Audit & Supervisory Board Member (acting)
1,426

Total

(Note)

1
2
3
4
5
6
7

The term of office of a Director is one year from the conclusion of the Ordinary General Meeting of Shareholders held on
June 29, 2016.
Directors Messrs. Mamoru Ozaki and Atsushi Horiba, and Ms. Madoka Mayuzumi are Outside Directors.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of the Ordinary General
Meeting of Shareholders held on June 27, 2013.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of the Ordinary General
Meeting of Shareholders held on June 27, 2014.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of the Ordinary General
Meeting of Shareholders to be held on June 26, 2015.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of the Ordinary General
Meeting of Shareholders to be held on June 29, 2016.
Audit & Supervisory Board Members Mr. Akira Katayanagi, Ms. Yoko Takemura, and Mr. Hiroshi Shirai are Outside
Audit & Supervisory Board Members.

- 84 -

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

System of Corporate GovernanceA.

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

With respect to the nomination, promotion, and remuneration of Directors, an “Executive Compensation Advisory
Committee” which is chaired by Managing Director and Supervisor of Group Business Management and which consistsof five members (including an Outside Director) and one secretariat, has been established. The Executive Compensation
Advisory Committee discusses about the nomination, promotion and remuneration of Directors, and reports the resolved
matters to the President and Representative Director. This Committee operates with a high degree of transparency andfairness by holding a meeting four times a year and by resolving matters by the unanimous approval of all members.
The following diagram illustrates the outline of our corporate governance system:- 85 -

As of June 29, 2016
<General Meeting of Shareholders><Audit &Supervisory Board>
Audit & Supervisory
Board Members: 2
Outside Audit &Supervisory Board
Members: 3<Board of Directors>
Directors: 4
Outside Directors: 3
Audit & Supervisory
Board Members: 5<Group Management
Meeting>
Directors: 4
Audit & Supervisory
Board Members: 2

President

Secretariat Office for
Audit & Supervisory
Board

Audit OfficeBusiness Companies

Business Companies

Business Companies

Business Companies

Risk Management
Committee

Corporate Ethics Committee

Corporate ethics hotline

Compliance Committee- 86 -

Executive Compensation
Advisory Committee

Accounting Auditors<Meeting of Independent
Outside Officers>
Outside Directors: 3
Outside Audit & Supervisory Board
Members: 3<Group Strategy
Committee>
Directors: 4
Audit & Supervisory Board
Members: 2
Representatives of major
business companies andbusiness departments<Quarterly Business Results
Review Committee>
Directors: 7
Audit & Supervisory Board
Members: 5
Representatives of eachbusiness company and eachbusiness department

B.

Reason for Adoption of Corporate Governance System
We, as a holding company, believe that our governance system using a “Board of Directors system” to make decisions
is the most effective in ensuring the corporate governance within our group companies, and auditing and supervising theoperations of each of our group companies for the purpose of actualizing and maintaining a high-quality management for the
benefit of all stakeholders, including our shareholders and customers. The “Board of Directors system” consists of Directors
who are experts in each business area and who receive advice from Outside Directors in terms of an objective and independent
perspective based on their long career and extensive professional knowledge and the “Audit & Supervisory Board Member
system,” consists of five Audit & Supervisory Board Members including Outside Audit & Supervisory Board Members. For theforegoing reason, we have adopted our current governance system.

C.

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

the Wacoal Group, we have established a Corporate Ethics Committee, which seeks to increase enlightenment of andeducate employees about corporate ethics. Our Representative Director and President acts as the chairperson, and ourlegal/compliance department is in charge of the committee.
We have established a system under which our legal/compliance department is 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 alert system(a corporate ethics hotline). After being notified and/or alerted, the legal/compliance department conducts aninvestigation 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 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, officers and employees shall firmly refuse
to comply with demands of antisocial forces. In order to handle unjust demands of antisocial forces, we cooperate withoutside specialized institutions, collect and/or control information related to antisocial forces and are building 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 westore the following documents (including electromagnetic records; hereafter the same) along with any related materials:
Minutes of the General Meeting of Shareholders, minutes of the Board of Directors’ meetings, minutes of the GroupManagement 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 paragraph shall be subject tothe Document Management Rules, but such retention period shall be at least ten years. The Directors and Audit &Supervisory Board Members shall have access to these documents at all times.

(Rules and Other Systems Concerning Risk Management of Losses)--

In order to understand the management risk within the Wacoal Group in general and to improve and/or strengthen ourrisk management system, we have established a Risk Management Committee, for which the Director in charge of risk
management acts as chairperson. The Management Planning Department shall act as the organizer.
The Risk Management Committee prescribes risk management rules, subject to the approval of the Board of Directors,
which form the basis for our risk management system. The Risk Management Committee clarifies the responsibilities byrisk category pursuant to these rules, and formulates a risk management system that thoroughly and/or comprehensively
controls potential risk within the Wacoal Group.

- 87 -

-

The Risk Management Committee regularly reports on the operations of the Wacoal Group’s risk management system tothe Board of Directors.

(System to Ensure Effective Execution of Duties by Directors)
In order to enhance appropriate decision made by our Directors, we will appoint several independent Outside Directors.
--

We will formulate a medium-term management plan to be shared by the Directors and/or employees within the Wacoal
Group and will direct and confirm courses of action and business targets in the mid to short term that are consistent withsuch plan.
We will follow the business results of each Wacoal Group company on a monthly basis and report back to the Board of
Directors. In addition, by holding “quarterly business results review committee” and “group strategy committee”, wewill confirm the business results and the implementation of measures and policies, consider measures in the event targets
are not achieved, and review such targets, as may be necessary.

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

We have enacted and managed our group companies in accordance with our Group Management Rules, which prescribe
basic policies regarding the management of group companies and matters to be decided by the Board of Directors, aswell as matters to be reported to the Company.
We conduct any inter-company transaction fairly in compliance with laws and regulations, accounting principles, and thetax system.
Our audit office will conduct internal audits, including an audit of the establishment and/or operation of our compliancesystem and risk management system, within the group companies and the audit office will report the results of its audits
to the Board of Directors and appropriate departments, and will give guidance and/or advice on system formulation togroup companies to ensure the appropriate conduct of business.

-

We adopt a corporate officer system under which we seek to build an appropriate and efficient management system
which clearly defines the delegation of authority and responsibilities in major subsidiaries.

-

Our foreign subsidiaries will comply with the laws and regulations of their respective home countries and will adopt asystem that is in line with our policies to the extent reasonable.

(Matters Concerning Assistants to Audit & Supervisory Board Members)
Audit & Supervisory Board Members may appoint employees of the Company as their assistants who are to assist theduties of the Audit & Supervisory Board Members.
Such assistants shall be full-time employees and the Audit & Supervisory Board Members will be consulted regarding
the appointment, evaluation, relocation and discipline of such assistants as well as other related matters, and theiropinions will be respected to ensure the effectiveness and independence of such assistants.
(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 ofa material fact that violates the applicable laws and regulations and/or our Articles of Incorporation, misconduct or a factthat 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 of Incorporation, misconduct or afact 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 internal audits
The condition of our internal reporting/alerting 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 management.

- 88 -

--The Audit & Supervisory Board Members may order employees who belong to the audit office to perform any mattersthat are required to provide audit services. In addition, the Audit & Supervisory Board Members may request that theCompany reimburse expenses incurred in 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, or other outsideadvisers as it deems necessary.

< Outline of Operation of our “System to Ensure Appropriate Business Conduct>(System to ensure that execution of duties by Directors and/or employees is in compliance with laws and regulations 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 of compliance 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 ofour educational activities for our employees.
(System concerning the Storage and Management of Information related to Execution of Duties by Directors)
Documents prescribed in the Document Management Rules have been properly stored in accordance with the Document
Management Rules and the Directors and Audit & Supervisory Board Members have access to these documents on atimely basis.
(Rules and Other Systems Concerning Risk Management of Losses)
The Risk Management Committee assessed risks, monitored the implementation of measures taken, and reported to theBoard of Directors on a quarterly basis.
-

We compiled activities that would minimize the impact of emergency situations on management and prescribed suchactivities as the Code of Conduct in Emergency Situations.

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

We engage in highly transparent decision-making by appointing three independent Outside Directors among our seven
Directors.
We discussed and drafted Wacoal Group’s mid-term plan which will start during fiscal year 2017.
We held meetings of the “Quarterly Business Results Review Committee” and “Group Strategy Committee’ on aquarterly basis and confirmed and reviewed the business results and implementation of measures.

(System to Ensure Appropriate Business in the Business Group Comprised of the Company and Its Subsidiaries)-

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 and internal controls of
the Company and our domestic and overseas subsidiaries.

(Matters Concerning Assistants to Audit & Supervisory Board Members and Matters Concerning Independence of such
Assistants from Directors)-

Our audit office is currently assisting the duties of the Audit & Supervisory Board Members upon their request 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 Systems related to thereport to Audit & Supervisory Board Members)-

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

- 89 -

(Other Systems to Ensure Effective Audits by 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 theirduties.
The Audit & Supervisory Board Members conducted hearings with the Directors and visited our domestic and overseas-

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-

D.

We enhance the effectiveness of audit by appointing three independent Outside Audit & Supervisory Board Memberswith the Accounting Auditor and the audit office.
Status of Accounting Audit

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. There are no special
relationships between the Company and the said accounting firm and any of their partners who have been engaged in the audit of
the Company. Also, the said accounting firm takes precautionary measures not to have any of its engagement partners
participate in the audit of the Company for any longer period than the prescribed maximum period. The names of the certified
public accountants who were engaged in the audit of the Company and the composition of the assistants for the audit services forthis fiscal period are as follows:

Names of the certified public accountants who were engaged in the audit:
Designated Limited Liability Partners and Managing Members: Fumihiko Kimura, Koichiro Tsukuda,
Seiichiro NakashimaComposition of the assistants for the audit services:
Twelve certified public accountants and 18 other persons
E.

Matters Concerning Limitation of Liability Agreements with Outside Directors and Outside Audit & Supervisory Board
Members
Pursuant to the provisions of Paragraph 1, Article 427 of the Companies Act and our Articles of Incorporation, theCompany has executed an agreement with its Outside Directors and Outside Audit & Supervisory Board Members to limit their
liability for damages as stipulated in Paragraph 1, Article 423 of the Companies Act.

F.
G.

The maximum amount of liability under such agreement is the minimum amount as provided by laws and regulations.
Number of Directors
Our Articles of Incorporation prescribe that the number of Directors of the Company shall be not more than eight.
Decision-Making Body for Distribution of Earnings, etc.

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

Requirement for Appointment of Directors
Our Articles of Incorporation prescribe that resolutions to appoint Directors shall be made by a majority vote of thevoting rights of shareholders present at a General Meeting of Shareholders, where such shareholders present shall hold shares
representing one-third or more of the voting rights of all shareholders who are entitled to exercise such voting rights and thatI.

resolutions to appoint Directors shall not be adopted by cumulative voting.
Requirement for Special Resolutions at General Meeting of Shareholders
Our Articles of Incorporation prescribe that a resolution as stipulated in Paragraph 2, Article 309 of the Companies Act
shall be adopted by a two-thirds majority of the voting rights held by the shareholders present at the General Meeting of
Shareholders, who shall represent one-third or more of the total number of voting rights of the shareholders who are entitled toexercise 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.

(ii)

Status of Audit & Supervisory Board Members and Internal Audit Department
Our Audit & Supervisory Board Members and internal audit department (audit office) have a regular meeting forreporting and confirmation once a month. The main purpose of such meeting is to report the discussions at major meetings at- 90 -

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 and information 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.
The number of staff of our internal audit department (audit office) as of June 29, 2016, was 9.
Further, our Audit & Supervisory Board Members and Accounting Auditor have regular meetings for discussion six
times a year. The purpose of such discussion is mainly to report and confirm the plan and status of the audit and to exchange
opinions on the management. In addition, they have a meeting from time to time as necessary.
Standing Audit & Supervisory Board Member Mr. Tomoki Nakamura has many years of accounting experience at our
Accounting Department with a respectable degree of finance and accounting knowledge. Also, Audit & Supervisory Board
Member Mr. Hiroshi Shirai is qualified as a certified public accountant with a considerable degree of finance and accounting
knowledge as well.
(iii)

Outside Directors and Outside Audit & Supervisory Board Members
We have three Outside Directors and three Outside Audit & Supervisory Board Members.
We have elected those persons having experiences in corporate management who excel in fiscal and monetary matters
and/or overseas business development and persons playing an active role in the field of arts and culture in Japan and overseas to
our Outside Directors, and each of such persons takes a role in improving the appropriateness of the decision made by the Boardof Directors by giving 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 in financial
services, independent attorneys at law or independent certified public accountants having a considerable degree of finance andaccounting knowledge independently from us, to our Outside Audit & Supervisory Board Members. Each Outside Audit &Supervisory Board Member conducts a strict audit on the legality of Directors’ decision making and performance of theirbusinesses from a technical perspective by maintaining high levels of independence.
The Company prescribes “Criteria for Appointment of Officers” and “Criteria for Appointment of Outside Officers(that ensures independence)” for appointing an Outside Director and an Outside Audit & Supervisory Board Member.
Upon the appointment of an Outside Director or an Outside Audit & Supervisory Board Member, Executive
Compensation Advisory Committee nominates a candidate based on the following criteria for submission to a meeting ofshareholders as an agenda item.
- A candidate with superior character and knowledge and is mentally and physically healthy;- A candidate pursues a law-abiding spirit;- A candidate has comprehensive experience in business operation, company management, legal community,
administration, accounting, education or culture and art;
- A candidate is not in violation of the “Criteria for Appointment of Outside Officers (that ensures independence)”
separately prescribed by the Company;- A candidate is not currently holding a position as an officer of 4 or more listed companies;- By appointing such candidate, Board of Directors and the Audit & Supervisory Board will each have a balanced
knowledge, experience and expertise that ensures diversity;
We also believe that an Outside Director and an Outside Audit & Supervisory Board Member shall maintain an
independent position so that each will not cause any conflict of interest with general shareholders. From this aspect, theCompany shall appoint a candidate for an Outside Officer who does not fall under any of the following items:
1. Has held a position to execute duties at any of our group companies;
2. A major shareholder holding the shares of the Company under its name or other name, is equal to or higher than 5%
as percentage of voting rights; in case such major shareholders is a legal entity or an association such as generalpartnership (“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 such candidate isan 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 of our group; 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;- 91 -

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, a candidate
who is holding a position to execute duties at such Entity;
7. A candidate who is holding a position to execute duties at other companies having a relationship involving mutual
appointment of outside officers;
8. A spouse or second-degree relative of a person (limited to those significant) who falls under any of the items under
1 through 7 above;
9. A candidate who used to fall under any of the items under 1 through 8 above during the past three years;
10. A candidate who is deemed to have a special circumstance where a possible conflict of interest with generalshareholders of the Company may arise.
It should be noted, however, that a candidate who falls under any of the items under 2 through 9 above, but who fulfills
the requirements of an outside officer under the Companies Act, and if the Company deems it appropriate for such candidate tobe appointed as an outside officer, may exceptionally become a candidate for an outside officer by describing the reasons of theCompany for making such judgment.
For our Outside Directors, the Management Planning Department hands out documents setting out the proposals
presented to the Board of Directors’ meetings in advance and gives prior explanations on important matters to them. For Outside
Audit & Supervisory Board Member, Standing Audit & Supervisory Board Member does it.
Each one of our Outside Directors and two of our Outside Audit & Supervisory Board Members hold 3,000 and 29,000
shares of common stock of the Company, respectively. Other than the foregoing, there are no special interests between our
Outside Directors or Outside Audit & Supervisory Board Members and the Company.
The reasons for the election of our Outside Directors and Outside Audit & Supervisory Board Members are as follows:
Title

Name

Outside Director

Mamoru Ozaki

Reasons for Election
He is an influential individual who has held public positions, such as
the Administrative Vice Minister of Finance and the President of
National Life Finance Corporation. Since July 2003, he has provided
advice mainly regarding financial matters and Chinese business to theCompany as our adviser. We believe that he is qualified to be an
Outside Director of the Company that is aiming to further enhancesocial responsibility of corporations in the future, as he has broadsocial insight.
Also, because he meets the eligibility requirements which theCompany prescribes under “Criteria for Appointment of Outside
Officers (to ensure independence)” and because there are no concernsthat any conflict of interest with general shareholders may arise, wehave designated him as an independent officer.

Outside Director

Atsushi Horiba

He has wide experience and knowledge with domestic and overseas
business deployment. We believe that he is qualified to be an Outside
Director of the Company that is aiming to further strengthen theoverseas business deployment.
Also, because he meets the eligibility requirements which theCompany prescribes under “Criteria for Appointment of Outside
Officers (to ensure independence)” and because there are no concernsthat any conflict of interest with general shareholders may arise, wehave designated him as an independent officer.

Outside Director

Madoka Mayuzumi

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 theCompany and Wacoal Corp. We expect that, with her knowledge andexperience, she will contribute to the Company’s management which
respects diversity.
Although Ms. Mayuzumi has never been involved in the Company’s- 92 -

management other than by way of serving as an Outside Director or
Outside Audit & Supervisory Board Member in the past, we believethat she will be able to perform her duties appropriately for the abovestated reasons.
Also, because she meets the eligibility requirements which theCompany prescribes under “Criteria for Appointment of Outside
Officers (to ensure independence)” and because there are no concernsthat any conflict of interest with general shareholders may arise, wehave designated her as an independent officer.
Outside Audit &Supervisory Board Member

Akira Katayanagi

We believe that he is qualified to be our Outside Audit & Supervisory
Board Member, as he is experienced in the finance industry and has
extensive experience and knowledge cultivated outside our industry.
Also, because he meets the eligibility requirements which theCompany prescribes under “Criteria for Appointment of Outside
Officers (to ensure independence)” and because there are no concernsthat any conflict of interest with general shareholders may arise, wehave designated him as an independent officer.

Outside Audit &Supervisory Board Member

Yoko Takemura

We believe that she is qualified to be our Outside Audit & Supervisory
Board Member, as she has legal knowledge and great store ofexperience of commercial issues as an attorney at law.
Also, because she meets the eligibility requirements which theCompany prescribes under “Criteria for Appointment of Outside
Officers (to ensure independence)” and because there are no concernsthat any conflict of interest with general shareholders may arise, wehave designated her as an independent officer.

Outside Audit &Hiroshi Shirai

Supervisory Board Member

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.
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 four years and eight months since Mr. Shirai left
Deloitte Touche Tohmatsu LLC.
Also, because he meets the eligibility requirements which theCompany prescribes under “Criteria for Appointment of Outside
Officers (to ensure independence)” and because there are no concernsthat any conflict of interest with general shareholders may arise, wehave designated him as an independent officer.

(iv) Details of Remunerations Paid to Officers
A. Aggregate amount of remunerations, etc., paid to each category of officers, aggregate amount of remunerations, etc., by typethereof, as well as the number of relevant officers:
Aggregate
Aggregate Amount of Remunerations, etc., by Type Thereof
Amount of(Millions of yen)
Category of Officers
Remunerations,etc. (Millions of
Basic
Retirement
Stock Option
Bonus
yen)
Remuneration
Allowance
Directors(Excluding Outside
318
198
50
70
－
Directors)
Audit & Supervisory Board
Members(Excluding Outside Audit &
33
33
－
－
－
Supervisory Board
Members)
Outside officers

45

45- 93 -－－－

Number of
Relevant
Officers

637

(Note)As of March 31, 2016, the numbers of Directors, Audit & Supervisory Board Members, and Outside Officers were five,
two, and six, respectively. These numbers were inconsistent with the numbers described above because the numbers
described above include one Director who resigned as Director, one Audit & Supervisory Board Member who resigned
as Audit & Supervisory Board Member and one Outside Officer who resigned as Outside Officer upon the close of the67th Ordinary General Meeting of Shareholders held on June 26, 2015.

B.

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

Director

WacoalHoldings
Corp.

109

24

35

－

Director

Wacoal Corp.

24

－

－

－

192

Details and Method of Determination of Policies for Determination of Amount of Remunerations, etc., Paid to Officers or
Method of Calculating such Amount
Our compensation system for officers is designed by the “Executive Compensation Advisory Committee,” whose
members include an Outside Director, and therefore, such system is highly objective and transparent.
The remunerations paid to Directors under said system consists of “Basic Remuneration,” the amount of which isfixed, and “Bonus,” which is linked to the business results of each fiscal year, as well as “Stock Option,” which is linked tomedium- and long-term business results. In the case of Outside Directors and Audit & Supervisory Board Members who shallbe in the position independent from the management, only “Basic Remuneration” is paid because any remuneration linked tobusiness results are not appropriate in such case.
The level of remuneration has been set according to the business results and scale of the Company, compared withother companies within the same industry or of the same scale.
The maximum annual amounts of the basic remuneration paid to Directors and Audit & Supervisory Board Members
were determined to be 350 million yen (excluding the amount paid as salaries for employees to the Directors who concurrently
serve as employees) and 75 million yen, respectively, by the resolution adopted at the 57th Ordinary General Meeting of
Shareholders held on June 29, 2005. The amount of bonuses was determined to be such amount as is determined according to
the business results of each fiscal year, which was resolved at each Ordinary General Meeting of Shareholders held for the
relevant year. Further, the maximum annual amount of stock options was determined to be 70 million yen by the resolution
adopted at the 60th Ordinary General Meeting of Shareholders held on June 27, 2008.
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.

(v)

A.

Information on Shareholdings
The status of the shareholding by the Company is as follows:
Equity securities held for purposes other than pure investment (including unlisted shares):
Number of stock names:
Three stock names
Total amount recorded on the balance sheet:

5 million yen- 94 -

B.

Segments, stock names, number of shares, amount recorded in the balance sheet, and purpose of holding of listed equity
securities held for purposes other than pure investment are as follows:
Fiscal Year 2015
Specified investment stocks:
Amount Recorded in
Number of Shares
Stock Name
the Balance Sheet
Purpose of Holding(shares)(Millions of yen)

The Dai-ichi Life Insurance Company,
Limited

2,100

3

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

2,100

2

Maintaining and enhancing business
transactions

Fiscal Year 2016
Specified investment stocks:
Stock NameThe Dai-ichi Life Insurance Company,
Limited(Note)

Purpose of Holding
Maintaining and enhancing business
transactions

The foregoing table shows the information of one of the specified investment stocks held by the Company, although theamount recorded in the balance sheet as to such investment stocks is not more than one-hundredth of the stated capital of theCompany.

C.

Total amount recorded in the balance sheet for the fiscal year 2015 and the fiscal year 2016, as well as the amount ofdividends received, the gain/loss on sale, and the valuation gain/loss for fiscal year 2016 of equity securities held for pureinvestment are as follows:
N/A.

D.

Stock names, number of shares, and the amount recorded in the balance sheet of equity securities, the purpose of holding of
which has been changed from pure investment to any other purpose other than pure investment:
N/A.
Stock names, number of shares, and the amount recorded in the balance sheet of equity securities, the purpose of holding ofE.

which has been changed from any other purpose other than pure investment to pure investment:
N/A.

- 95 -

We are a holding company. The status of the shareholding by Wacoal Corp., the amount recorded in the balance sheet of equity
securities (i.e., the balance sheet amount of investment stocks) for which is the largest among the Company and our consolidated
subsidiaries, is as follows:A.

Equity securities held for purposes other than pure investment (including unlisted shares):
Number of stock names:
111 stock names
Total amount recorded in the balance sheet:
54,633 million yen

B.

Segments, stock names, number of shares, amount recorded in the balance sheet, and purpose of holding of those listed
equity securities held for purposes other than pure investment of which the amount recorded in the balance sheet is more than
one-hundredth of the stated capital of the Company are as follows:
Fiscal Year 2015
Specified investment stocks:
Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)KDDI Corporation

3,520,500

9,577

Maintaining and enhancing transactions

Bank of Kyoto, Ltd.

2,849,985

3,588

Maintaining and enhancing transactions

Nissin Foods Holdings Co., Ltd.

575,100

3,398

Maintaining and enhancing cooperative andtransactional relationship in businessdeployment

Kyocera Corporation

445,900

2,939

Maintaining and enhancing transactions

Isetan Mitsukoshi Holdings Ltd.

1,315,769

2,615

Maintaining and enhancing transactions

Mitsubishi UFJ Financial Group, Inc.

2,885,850

2,146

Maintaining and enhancing transactions

Aeon Financial Service Co., Ltd.

687,300

2,085

Maintaining and enhancing cooperative andtransactional relationship in businessdeployment

Aeon Co., Ltd.

1,527,100

2,014

Maintaining and enhancing transactions

Kokuyo Co., Ltd.

1,509,400

1,695

Maintaining and enhancing transactions

Heiwado Co., Ltd.

514,531

1,415

Maintaining and enhancing transactions

Shiga Bank, Ltd.

2,312,040

1,387

Maintaining and enhancing transactions

Tokio Marine Holdings, Inc.

274,000

1,243

Maintaining and enhancing transactions

Taisho Pharmaceutical Holdings Cp.,
Ltd.

132,000

1,180

Maintaining and enhancing cooperative andtransactional relationship in businessdeployment

Shimadzu Corporation

825,000

1,106

Maintaining and enhancing transactions

Horiba, Ltd.

230,000

1,056

Maintaining and enhancing cooperative andtransactional relationship in businessdeployment

J. Front Retailing Co., Ltd.

541,388

1,022

Maintaining and enhancing transactions

Chori Co., Ltd.

548,890

1,015

Maintaining and enhancing transactions

SCREEN Holdings Co., Ltd

1,085,898

988

Takara Holdings Inc.

1,000,000

870

Shiseido Co., Ltd.

383,000

816

Maintaining and enhancing transactions

Toppan Printing Co., Ltd.

852,000

788

Maintaining and enhancing transactions

1,320,000

785

Maintaining and enhancing transactions

Stock Name

Mitsubishi UFJ Lease & Finance
Company Limited- 96 -

Purpose of Holding

Maintaining and enhancing cooperative andtransactional relationship in businessdeployment
Maintaining and enhancing cooperative andtransactional relationship in businessdeployment

Seven & i Holdings Co., Ltd.

154,939782

Ezaki Glico Co., Ltd.

159,500

775

Nippon Shinyaku Co., Ltd.

175,000765

H2O Retailing Corporation

310,759

703

Maintaining and enhancing transactions

Asahi Kasei Corporation

598,195

687

Maintaining and enhancing transactions

1,022,000

654

Maintaining and enhancing transactions

Aoyama Trading Co., Ltd.

141,500

553

Maintaining and enhancing cooperative andtransactional relationship in businessdeployment

Odakyu Electric Railway Co., Ltd.

395,000

483

Maintaining and enhancing transactions

Tokyo Broadcasting System Holdings,
Inc.

310,700

471

Maintaining and enhancing transactions

Saha Pathana Inter-Holding PCL

4,940,000

466

Maintaining and enhancing transactions

Hankyu Hanshin Holdings, Inc.

601,000

446

Maintaining and enhancing transactions

Hisamitsu Pharmaceutical Co., Inc.

90,000443

Maintaining and enhancing cooperative andtransactional relationship in businessdeployment

NTT DoCoMo, Inc.

209,200

436

Maintaining and enhancing transactions

2,677,300

386

Maintaining and enhancing transactions

Matsuya Co., Ltd.

205,000

374

Maintaining and enhancing transactions

Seino Holdings Co., Ltd.

283,000

368

Maintaining and enhancing transactions

Onward Holdings Co., Ltd.

435,000

364

Maintaining and enhancing transactions

Chuo Warehouse Co., Ltd.

381,300

362

Maintaining and enhancing transactions

Autobacs Seven Co., Ltd.

188,400

357

Ono Pharmaceutical Co., Ltd.

26,000353

Yomeishu Seizo Co., Ltd.

341,000

340

1,000,000

333

Maintaining and enhancing transactions

Nichikon Corporation

296,500

332

Maintaining and enhancing cooperative andtransactional relationship in businessdeployment

Nissha Printing Co., Ltd.

147,000

322

Maintaining and enhancing transactions

1,000,000

309

Maintaining and enhancing transactions

Marui Group Co., Ltd.

151,487

206

Maintaining and enhancing transactionsIZUMI Co., Ltd.

43,748

192

Maintaining and enhancing transactions

TSI Holdings Co., Ltd.

216,645

175

Maintaining and enhancing transactions

Takashimaya Co., Ltd.

120,000

141

Maintaining and enhancing transactions

Fukuyama Transporting Co., Ltd.

I.C.C INTERNATIONAL PCL

Kintetsu Department Store Co., Ltd.

Sanyo Shokai Ltd.

- 97 -

Maintaining and enhancing transactions
Maintaining and enhancing cooperative andtransactional relationship in businessdeployment
Maintaining and enhancing cooperative andtransactional relationship in businessdeployment

Maintaining and enhancing cooperative andtransactional relationship in businessdeployment
Maintaining and enhancing cooperative andtransactional relationship in businessdeployment
Maintaining and enhancing cooperative andtransactional relationship in businessdeployment

Dai Nippon Printing Co., Ltd.

116,000

135

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

2,544,000

6,920

Mitsubishi UFJ Financial Group, Inc.

3,365,000

2,502

Maintaining and enhancing transactions

Stocks deemed to be held:
Stock Name

(Note)

Details of Rights
Authorization to give directions on theexercise of voting rights as toretirement benefit trust agreement
Authorization to give directions on theexercise of voting rights as toretirement benefit trust agreement

In specifying the major stock names in light of the amount recorded in the balance sheet, specified investment stocks andstocks deemed to be held have not been combined.
Fiscal Year 2016
Specified investment stocks:
Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

3,520,500

10,582575,100

3,042

1,531,017

2,489

Maintaining and enhancing business
transactions

Kyocera Corporation

445,900

2,210

Maintaining and enhancing transactions

Bank of Kyoto, Ltd.

2,849,985

2,091

Maintaining steady financial transactions

Kokuyo Co., Ltd.

1,509,400

1,987

Maintaining and enhancing transactions

Aeon Financial Service Co., Ltd.

687,300

1,825

Maintaining and enhancing business
transactions

Isetan Mitsukoshi Holdings Ltd.

1,315,769

1,730

Maintaining and enhancing business
transactions

Mitsubishi UFJ Financial Group, Inc.

2,885,850

1,504

Maintaining steady financial transactions

Shimadzu Corporation

825,000

1,456

Maintaining and enhancing transactions

Heiwado Co., Ltd.

517,531

1,208

Maintaining and enhancing business
transactions

Taisho Pharmaceutical Holdings Cp.,
Ltd.

132,000

1,177

Building, maintaining and enhancing
cooperative and transactional relationship inbusiness deployment

2,312,040

1,095

Maintaining steady financial transactions

Tokio Marine Holdings, Inc.

274,000

1,041

Maintaining steady financial transactions

SCREEN Holdings Co., Ltd

1,085,898

966

Horiba, Ltd.

230,000

966

Shiseido Co., Ltd.

383,000

962

Maintaining and enhancing transactions

Takara Holdings Inc.

1,000,000

927

Maintaining and enhancing transactions

Stock NameKDDI Corporation

Purpose of Holding
Maintaining and enhancing transactions
Building, maintaining and enhancing

Nissin Foods Holdings Co., Ltd.

Aeon Co., Ltd.

Shiga Bank, Ltd.

- 98 -

cooperative and transactional relationship inbusiness deployment

Maintaining and enhancing regional
economy relationship
Maintaining and enhancing regional
economy relationshipEzaki Glico Co., Ltd.

159,500

920

Building, maintaining and enhancing
cooperative and transactional relationship inbusiness deployment

J. Front Retailing Co., Ltd.

541,388

808

Maintaining and enhancing business
transactions

Toppan Printing Co., Ltd.

852,000

804

Maintaining and enhancing transactions

Chori Co., Ltd.

548,890799

Maintaining and enhancing transactions

Nippon Shinyaku Co., Ltd.

175,000

770

Maintaining and enhancing regional
economy relationship

Seven & i Holdings Co., Ltd.

154,939

742

Maintaining and enhancing business
transactions

1,320,000

652

Maintaining and enhancing transactions

619

Building, maintaining and enhancing
cooperative and transactional relationship inbusiness deployment
Building, maintaining and enhancing
cooperative and transactional relationship inbusiness deployment

Mitsubishi UFJ Lease & Finance
Company Limited
Ono Pharmaceutical Co., Ltd.

130,000

Aoyama Trading Co., Ltd.

141,500

611

H2O Retailing Corporation

310,759603

1,022,000

561

Maintaining and enhancing transactions

310,700

541

Maintaining and enhancing transactions

NTT DoCoMo, Inc.

209,200

533

Maintaining and enhancing transactions

Odakyu Electric Railway Co., Ltd.

395,000

483

Asahi Kasei Corporation

598,195

455

Maintaining and enhancing transactions

Hisamitsu Pharmaceutical Co., Inc.

90,000452

Maintaining and enhancing transactions

Hankyu Hanshin Holdings, Inc.

601,000

431

Maintaining and enhancing business
transactions

Saha Pathana Inter-Holding PCL

4,940,000

382

Maintaining and enhancing transactions

Autobacs Seven Co., Ltd.

188,400

357

Building, maintaining and enhancing
cooperative and transactional relationship inbusiness deployment

Chuo Warehouse Co., Ltd.

381,300

356

Maintaining and enhancing transactions

Seino Holdings Co., Ltd.

283,000

343

Maintaining and enhancing transactions
Building, maintaining and enhancing
cooperative and transactional relationship inbusiness deployment

Fukuyama Transporting Co., Ltd.
Tokyo Broadcasting System Holdings,
Inc.

Maintaining and enhancing business
transactions

Maintaining and enhancing business
transactions

Yomeishu Seizo Co., Ltd.

170,500

337

Onward Holdings Co., Ltd.

435,000

334

I.C.C INTERNATIONAL PCL

2,677,300

328

Kintetsu Department Store Co., Ltd.

1,000,000

302

Sanyo Shokai Ltd.

1,000,000

256

Sharing information from the strategicalpoint of view

151,487244

Maintaining and enhancing business
transactions

Marui Group Co., Ltd.

- 99 -

Sharing information from the strategicalpoint of view
Maintaining and enhancing transactions
Maintaining and enhancing business
transactions

Nissha Printing Co., Ltd.

147,000

242

Maintaining and enhancing transactions

Nichikon Corporation

296,500

232

Maintaining and enhancing regional
economy relationshipIZUMI Co., Ltd.

45,648221

Maintaining and enhancing business
transactions

Matsuya Co., Ltd.

205,000212

TSI Holdings Co., Ltd.

216,645

162

Sharing information from the strategicalpoint of view

Fuji Company, Limited

62,600145

Maintaining and enhancing business
transactions

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

2,544,000

7,647

Mitsubishi UFJ Financial Group, Inc.

3,365,000

1,754

Maintaining and enhancing business
transactions

Stocks deemed to be held:
Stock Name

Details of Rights
Authorization to give directions on theexercise of voting rights as toretirement benefit trust agreement
Authorization to give directions on theexercise of voting rights as toretirement benefit trust agreement(Note)In specifying the major stock names in light of the amount recorded in the balance sheet, specified investment stocks andstocks deemed to be held have not been combined.

C.

Total amount recorded in the balance sheet for the fiscal year 2015 and the fiscal year 2016, as well as the amount ofdividends received, the gain/loss on sale, and the valuation gain/loss for fiscal year 2016 of equity securities held for pure

D.

E.

(2)

investment are as follows:
N/A.
Stock names, number of shares, and the amount recorded in the balance sheet of equity securities, the purpose of holding of
which has been changed from pure investment to any other purpose other than pure investment:
N/A.
Stock names, number of shares, and the amount recorded in the balance sheet of equity securities, the purpose of holding of
which has been changed from any other purpose other than pure investment to pure investment:
N/A.
【Audit Fees】(i)【Fees to Certified Public Accountants】
Fiscal Year Ended March 31, 2015
Category
Fees for Audit Services(Millions of yen)

Fiscal Year Ended March 31, 2016

Fees for Nonaudit
Services(Millions of yen)

Fees for Audit Services(Millions of yen)

Fees for Nonaudit
Services(Millions of yen)

The Company

130

－

133

2

Consolidated
subsidiaries

14

－

15

－

Total

144

－

149

2

(ii)【Other fees】(Fiscal year ended March 31, 2015)
Wacoal International Corp., one of the Company’s consolidated subsidiaries, and its consolidated subsidiaries paid 56
million yen as fees for audit services to Deloitte & Touche LLP, which belongs to the same network as the Company’s certified
public accountants, etc.
(Fiscal year ended March 31, 2016)- 100 -

Wacoal International Corp., one of the Company’s consolidated subsidiaries, and its consolidated subsidiaries paid 62
million yen as fees for audit services to Deloitte & Touche LLP, which belongs to the same network as the Company’s certified
public accountants, etc.
(iii)【Description of nonaudit services provided to the Company】(Fiscal year ended March 31, 2015)
N/A(Fiscal year ended March 31, 2016)
The Company pays fees to the accounting auditor or certified public accountants as compensation for the advice andguidance regarding the investigation of the impact of the application of IFRS, which is out of the scope of the services that are
set forth in Paragraph 1, Article 2 of the Certified Public Accountants Act.
(iv)【Policy on determination of audit fees】
The Company determines the amount of audit fees to be paid to the certified public accountants, etc., taking into accountthe number of days required for the audit, the characteristics of services, and other factors.

- 101 -

V. 【Financial Information】
1. 【Consolidated Financial Statements】
Consolidated Balance Sheets
March 31, 2016 and 2015

Millions of Yen
2016
2015

ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Time deposits
Marketable securities (Notes 3, 20 and 21)
Notes and accounts receivable (Note 18)
Allowance for returns and doubtful receivables (Note 4)Inventories (Note 5)
Deferred income taxes (Note 17)
Other current assets (Notes 18, 20 and 21)
Total current assets
PROPERTY, PLANT AND EQUIPMENT:Land (Note 9)
Buildings and building improvements (Notes 9 and 11)
Machinery and equipment (Note 9)
Construction in progress
Total
Accumulated depreciation¥

34,0592,131
1,880
26,936(2,229)44,4453,832
5,797
116,851¥

38,4102,687
2,387
26,544(2,409)42,893
5,488
4,264
120,264

Thousands of
U.S. Dollars(Note 2)
2016$

LIABILITIES AND EQUITYCURRENT LIABILITIES:
Short-term bank loans (Note 9)
Notes and accounts payable:
Trade notes
Trade accounts (Note 18)
Other payables
Accrued payroll and bonuses
Income taxes payable (Note 17)
Current portion of long-term debt (Notes 9 and 20)
Other current liabilities (Notes 20 and 21)

302,962
18,956
16,723
239,601(19,827)
395,348
34,086
51,566
1,039,415

21,67765,056
17,552
5,419
109,704(55,766)

22,00964,038
16,760923
103,730(54,542)

192,822578,687
156,129
48,203975,841(496,051)

53,93849,188479,790

11,759$¥10,038104,599

1,431
12,017
6,106
7,152
711
293
4,874

1,031
11,346
6,686
6,936
2,064
534
3,667

12,729106,894
54,314
63,6196,324
2,606
43,355

Total current liabilities

44,34342,302

394,440

LONG-TERM LIABILITIES:Long-term debt (Notes 9 and 20)
Liability for termination and retirement benefits (Note 12)
Deferred income taxes (Note 17)
Other long-term liabilities (Notes 11, 12 and 17)

95
1,703
15,588
1,724

4,245
1,680
18,796
1,681

845
15,149138,659
15,335

19,11026,402

169,988

13,26029,686
162,196

13,26029,642
155,264

117,951
264,063
1,442,769

5,177
17,966(1,035)
22,108

10,831
20,821
1,934
33,58646,051
159,811(9,207)
196,655(2,876)
224,374(2,895)
228,857(25,583)
1,995,855

5,027
229,401

2,711
231,568

44,7172,040,572¥ 292,854¥ 300,272$ 2,605,000

Total long-term liabilities
Net property, plant and equipment¥

Millions of Yen
2016
2015

Thousands of
U.S. Dollars(Note 2)
2016

COMMITMENTS AND CONTINGENCIES (Notes 9, 10 and 13)
OTHER ASSETS:
Investments in affiliated companies (Note 6)
Investments (Notes 3, 20 and 21)
Goodwill (Notes 7, 8 and 21)
Other intangible assets (Notes 7, 8 and 21)
Prepaid pension expense (Note 12)
Deferred income taxes (Note 17)
Other
Total other assets

20,71356,021
17,911
12,112
8,145
1,036
6,127

22,052
59,96318,75012,73910,577982
5,757

184,247
498,319
159,322
107,739
72,452
9,215
54,501122,065

130,820

1,085,795

EQUITY:WACOAL HOLDINGS CORP. SHAREHOLDERS' EQUITY(Notes 14 and 23):
Common stock, no par value authorized, 500,000,000 shares in 2016 and 2015; issued
143,378,085 shares in 2016 and 2015
Additional paid-in capital (Note 14)
Retained earnings
Accumulated other comprehensive income (loss) (Note 16):
Foreign currency translation adjustments
Unrealized gain on securities
Pension liability adjustments (Note 12)
Total accumulated other comprehensive income
Treasury stock, at cost - 2,519,350 shares and 2,537,276 shares in2016 and 2015, respectively
Total Wacoal Holdings Corp. shareholders' equity
NONCONTROLLING INTERESTS
Total equity
TOTAL

TOTAL

¥ 292,854¥ 300,272$ 2,605,000

See notes to consolidated financial statements.
- 102 -

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Income
Years Ended March 31, 2016, 2015 and 2014

2016

Millions of Yen
2015

2014

Thousands of
U.S. Dollars(Note 2)2016

¥ 202,917¥ 191,765¥ 193,781$ 1,804,990

95,901
93,15190,722
87,9404,845
1,176

91,00888,913853,060
828,598

189,052

184,683

179,921

1,681,658

13,865

7,082

13,860123,332

161
(65 )
1,057
90
(20 )
173

142
(98 )
1,011
1,585
(14 )

97
(105)
831
84
(47 )

1,432
(578)
9,402
801
(178)
1,539

(304)

1,405
229

313

(2,705)

1,092

4,260

1,173

9,713

INCOME BEFORE INCOME TAXES AND EQUITY IN NET INCOME OF AFFILIATED COMPANIES (Note 17)

14,957

11,342

15,033133,045

INCOME TAXES (Note 17):
Current
Deferred

3,442
1,288

5,223
(1,920 )

5,256
385

30,617
11,457

4,730

3,303

5,641

42,074

INCOME BEFORE EQUITY IN NET INCOME OF AFFILIATED COMPANIES

10,227

8,039

9,392

90,971EQUITY IN NET INCOME OF AFFILIATED COMPANIES (Note 6)

1,245

705

985

11,075NET INCOME

11,472

8,744

10,377102,046(313)(300 )(271)(2,784)NET SALES (Note 18)
OPERATING COSTS AND EXPENSES:
Cost of sales (Notes 12 and 18)
Selling, general and administrative expenses (Notes 1, 10, 11, 12, 15 and 21)
Impairment charges on goodwill (Notes 8 and 21)
Impairment charges on other intangible assets (Notes 8 and 21)
Total operating costs and expenses
OPERATING INCOME
OTHER INCOME (EXPENSES):Interest income
Interest expense
Dividend income
Gain or loss on sales or exchange of marketable securities and investments – net (Notes 3 and 16)
Valuation loss on marketable securities and investments (Notes 3 and 16)
Gain on bargain purchase (Note 7)
Gain on sales of paintings
Other – net (Notes 1, 16 and 21)
Total other income (expenses) – net

Total income taxes

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTSNET INCOME ATTRIBUTABLE TO WACOAL HOLDINGS CORP.

¥

11,159

¥

8,444

¥

10,106$99,262(Continued)- 103 -

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Income
Years Ended March 31, 2016, 2015 and 2014

2016

Yen
2015

2014

U.S. Dollars(Note 2)2016

¥ 79.23¥ 79.00¥ 59.95¥ 59.80¥ 71.75¥ 71.61$ 0.70$ 0.70NET INCOME ATTRIBUTABLE TO WACOALHOLDINGS CORP. PER AMERICANDEPOSITARY RECEIPT (5 shares of common
stock) (Note 19):
Basic
¥ 396.15
Diluted¥ 394.99¥ 299.77¥ 299.00¥ 358.77¥ 358.03$ 3.52$ 3.51NET INCOME ATTRIBUTABLE TOWACOAL HOLDINGS CORP. PERSHARE (Note 19):
Basic
DilutedSee notes to consolidated financial statements.

(Concluded)- 104 -

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Comprehensive Income
Years Ended March 31, 2016, 2015 and 2014

2014

Thousands of
U.S. Dollars(Note 2)
2016

8,744

¥ 10,377$ 102,046(5,670)

8,671

8,342
27

(50,436)(5,670)

8,671

8,369

(50,436)

Unrealized (loss) gain on securities:
Amounts arising during the year
Reclassification adjustments
Total unrealized (loss) gain on securities(2,833)(47 )(2,880)10,216(974 )
9,242

2,313
(11 )
2,302

(25,200)(418)(25,618)

Pension liability adjustments:
Amounts arising during the year
Reclassification adjustments
Total pension liability adjustments(2,327)(644)(2,971)

2,332(176 )
2,156

1,468
233
1,701

(20,699)(5,729)(26,428)(11,521)

20,06912,372(102,482)

COMPREHENSIVE INCOME(49 )28,81322,749(436)

COMPREHENSIVE INCOME ATTRIBUTABLE TONONCONTROLLING INTERESTS(270)(472 )(412 )(2,402)(319)¥ 28,341¥ 22,337

2016
NET INCOME

Millions of Yen
2015¥ 11,472

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

OTHER COMPREHENSIVE INCOME

COMPREHENSIVE INCOME ATTRIBUTABLE TOWACOAL HOLDINGS CORP.

See notes to consolidated financial statements.

- 105 -¥¥$

(2,838)

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Equity
Years Ended March 31, 2016, 2015 and 2014

BALANCE, APRIL 1, 2013
Net income
Foreign currency translation adjustments
Unrealized gain on securities
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, ¥140 per 5 shares ofcommon stock
Cash dividends paid to noncontrolling interests
Repurchase of treasury stock
Sale of treasury stock
Share-based compensation granted (Note 15)
Equity transactions with noncontrolling interests (Note 14)
BALANCE, MARCH 31, 2014
Net income
Foreign currency translation adjustments
Unrealized gain on securities
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, ¥165 per 5 shares ofcommon stock
Cash dividends paid to noncontrolling interests
Repurchase of treasury stock
Share-based compensation granted and exercised (Note 15)
Equity transactions with noncontrolling interests (Note 14)
BALANCE, MARCH 31, 2015
Net income
Foreign currency translation adjustments
Unrealized loss on securities
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, ¥150 per 5 shares ofcommon stock
Cash dividends paid to noncontrolling interests
Repurchase of treasury stock
Sale of treasury stock
Share-based compensation granted and exercised (Note 15)
Increase due to establishment of subsidiaries (Note 7)
BALANCE, MARCH 31, 2016

Shares of
Outstanding
Common Stock(Thousands)
140,844

CommonStock

Additional
Paid-in
CapitalRetained
Earnings¥ 13,260¥ 29,514¥ 145,306

Millions of Yen
Accumulated
Other
Comprehensive
Treasury
Income (Loss)
Stock
¥

1,458

¥ (2,892)

10,106
8,234
2,296
1,701
(3,944)

Total Wacoal
Holdings Corp.
Shareholders'EquityNoncontrolling
Interests

Total Equity¥ 186,646¥ 2,179¥ 188,825

10,106
8,234
2,296
1,701

271
135
6

10,377
8,369
2,302
1,701

(3,944)
(6 )
0
69
4

(13 )

(3,944)
(148)
(6 )
0
69
(9 )

205,106

2,430

207,536

8,444
8,521
9,215
2,161

300
150
27
(5 )

8,744
8,671
9,242
2,156

(148 )
(6 )
1

(6)
0
69
4

140,839

13,26029,587

151,468

13,689(2,898)

8,444
8,521
9,215
2,161
(4,648)(4,648)
(3 )
61
0

(1 )

(4,648)
(190)
(3 )
61
(1 )

228,857

2,711

231,568

11,159(5,654)(2,855)(2,969)

313
(16 )
(25 )
(2 )

11,472(5,670)(2,880)(2,971)(190 )(3 )
5
140,841

(3)
6

55
0
13,26029,642

155,264

33,586(2,895)

11,159(5,654)(2,855)(2,969)(4,225)(4,225)

2,252(4,225)
(206)
(7 )
1
67
2,252

¥ 5,027¥ 229,401(206 )(5 )1
22
140,85944¥ 13,260¥ 29,686

(7)
1
25

(2 )
¥ 162,196¥ 22,108¥ (2,876)

(7 )
1
67
¥ 224,374(Continued)- 106 -

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Equity
Years Ended March 31, 2016, 2015 and 2014

BALANCE, MARCH 31, 2015

CommonStock

Additional
Paid-in
CapitalRetained
Earnings$ 117,951$ 263,672$ 1,381,107

Net income
Foreign currency translation adjustments
Unrealized loss on securities
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, $1 per 5 shares ofcommon stock
Cash dividends paid to noncontrolling interests
Repurchase of treasury stock
Sale of treasury stock
Share-based compensation granted and exercised (Note 15)
Increase due to establishment of subsidiaries (Note 7)
BALANCE, MARCH 31, 2016

Thousands of U.S. Dollars (Note 2)
Accumulated
Total Wacoal
Other
Holdings Corp.
Comprehensive
Treasury
Shareholders'
IncomeStock
Equity$ 298,755$ (25,752)

99,262(50,294)(25,396)(26,410)(37,582)

Noncontrolling
Interests

Total Equity$ 2,035,733$ 24,115$ 2,059,848

99,262(50,294)(25,396)(26,410)

2,784
(142)
(222)
(18 )

102,046(50,436)(25,618)(26,428)(37,582)

20,032(37,582)(1,832)(62 )
9595
20,032$ 44,717$ 2,040,572(1,832)391$ 117,951$ 264,063

(62 )
9
222

(18)
$ 1,442,769$ 196,655$ (25,583)

(62 )
9
595
$ 1,995,855

See notes to consolidated financial statements.

(Concluded)- 107 -

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2016, 2015 and 2014

2014

Thousands of
U.S. Dollars(Note 2)
2016

8,744

¥ 10,377$ 102,046

5,074
60
(45 )
(1,920)
38

5,036
69
365
385
94

42,830596(1,041)
11,457
525
2,277

4,845
1,176
(1,585)
14

(84 )
47

(801)
178
(1,539)(482)(1,405)
(27 )

(272)

(4,287)(195)(1,008)(1,111)(45 )(2,101)(261)
241
12,635534(1,038)(442)
1,302(1,601)505
108
14,337(1,368)(339)
636(1,541)(827)(3,649)20
8,949(1,735)(8,966)(9,883)(400)(18,689)(2,322)
2,144
112,390(2,459)
2,889
602
(420)
739
(629)

(3,548)3,383
4,499(1,353)
114
(568)
1,785
174
(3,093)(1,385)124
6(1)(2,347)
2,291
4,685
(57 )
113
(322)

(21,873)
25,6985,355(3,736)
6,574(5,595)24(2,265)(1,199)762

6,894(67,123)(12,738)
107
53

27
164

(3 )
1,658

2016
OPERATING ACTIVITIES:Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Share-based compensation (Note 15)
Provision for returns and doubtful receivables – net
Deferred income taxes
Gain or loss on sales or disposal of property, plant and equipment – net
Impairment charges on long-lived assets
Impairment charges on goodwill (Notes 8 and 21)
Impairment charges on other intangible assets (Notes 8 and 21)
Gain on sales or exchange of marketable securities and investments (Notes 3 and 16)
Valuation loss on marketable securities and investments (Notes 3 and 16)
Gain on bargain purchase (Note 7)
Gain on sales of paintings
Equity in net income of affiliated companies, less dividends
Changes in assets and liabilities:(Increase) decrease in notes and accounts receivable
Increase in inventories(Increase) decrease in other current assets(Decrease) increase in notes and accounts payable
Decrease in liability for termination and retirement benefits(Decrease) increase in accrued expenses, income taxes payable and other current liabilities
Other
Net cash provided by operating activities¥ 11,472

¥

4,815
67
(117)
1,288
59
256
(90 )
20
(173)

INVESTING ACTIVITIES:
Increase in time deposits
Decrease in time deposits
Proceeds from sales and redemption of available-for-sale securities (Note 3)
Payments to acquire available-for-sale securities
Proceeds from redemption of held-to-maturity debt securities
Payments to acquire held-to-maturity debt securities
Proceeds from sales of paintings
Proceeds from sales of property, plant and equipment
Capital expenditures
Payments to acquire intangible assets (Note 8)
Proceeds from sales of other investments
Proceeds from sales of shares of affiliated companies
Acquisitions of subsidiaries, net of cash acquired and payments to acquire additional shares of a subsidiaries
Payments to acquire additional shares of affiliated companies
Payments associated with the acquisition of the business (net of cash and cash equivalents acquired) (Note7)
Other
Net cash (used in) provided by investing activities
FORWARD

Millions of Yen
2015

775
(7,546)(1,432)12
6(3,822)(122)(11,407)
¥

¥

(8 )
(16 )

¥

(33,998)(1,085)(101,467)$(Continued)- 108 -

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2016, 2015 and 2014

2016
FORWARD¥

FINANCING ACTIVITIES:
Increase (decrease) in short-term bank loans withthree months or less maturity - net
Repayments of short-term bank loans with more than
three months maturity
Proceeds from issuance of long-term debt
Repayments of long-term debt
Repurchase of treasury stock
Proceeds from sales of treasury stock
Dividends paid on common stock
Dividends paid to noncontrolling interests
Proceeds from payments from noncontrollinginterests
Net cash used in financing activities

Millions of Yen
2015
¥

2,101

2014
¥

Thousands of
U.S. Dollars(Note 2)
2016$

(6,784)(455)

18,689(100)(4,648 )(190 )

(901)
(6 )
0
(3,944)(148)(39,699)(62 )
9(37,582)(1,832)

2,252(4,547)(8,391)(5,554)

20,032(40,445)

EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS(1,032)

1,642

1,091

(9,180)NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS(4,351)

7,752

6,144

(38,702)

CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR38,41030,65824,514

341,664¥ 34,059¥ 38,410¥ 30,658$ 302,962

¥

67
5,756

¥ 100
4,497

¥

¥736

¥419

CASH AND CASH EQUIVALENTS, END OFYEARADDITIONAL CASH FLOW INFORMATION:
Cash paid for:
Interest
Income taxes
NONCASH INVESTING ACTIVITIES:Acquisition of property, plant and equipment byassuming payment obligation(4,463)(7)
1(4,225)
(206)

4,460
(1,226)
(3 )

98
8,305

$ 596
51,201¥582$6,547

See notes to consolidated financial statements.

(Concluded)- 109 -

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 manufacture and sale of apparel, including foundation garments, lingerie,nightwear and outerwear in Japan, the United States of America, Europe and certain Asian countries.
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 are
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. Necessary adjustments have been made for significant events 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 between 20% and 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.
Cash and Cash Equivalents - Cash and cash equivalents include all time deposits (all of which are interest
bearing) 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, a separate component ofequity. Exchange gains and losses resulting from foreign currency transactions and the conversion ofmonetary assets and liabilities denominated in foreign currencies are included in other income (expenses) inthe consolidated statements of income.
Foreign currency translation gains (losses) for the years ended March 31, 2016, 2015 and 2014 were ¥(519)
million, ¥300 million and ¥161 million, respectively. They have been included in other - net of other income(expenses).

- 110 -

Marketable Securities and Investments - The Companies classify their marketable securities and investments
into one of two categories: held to maturity or available for sale. Held-to-maturity securities are measured atamortized cost. The Companies classify debt securities as held to maturity only if the Companies have thepositive intent and ability to hold those securities to maturity. Available-for-sale securities are carried at fairvalue with a corresponding recognition of unrealized holding gain or loss (net of tax) in accumulated othercomprehensive income or loss, a separate component of equity, until realized. Equity securities that do nothave readily determinable fair values are recorded at cost. Gains and losses on sales of investments arecomputed based on cost determined using the average cost method.
If a decline in the fair value of marketable securities and investments is determined to be other than temporary,
an impairment charge is recorded in the consolidated statements of income. The Companies periodicallydetermine whether a decline in the fair value of marketable securities and investments is deemed to be otherthan 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 marketable securities and investments for a sufficient period of time for
anticipated recovery in fair value.
Allowance for Sales Returns - Allowance for sales returns is estimated based on historical products returns
experience, sales movements, and the overall retail industry situation.
Allowance for Doubtful Receivables - Allowance for doubtful notes and receivables is estimated based on
historical collection experience and additional information including current economic conditions andcreditworthiness of each applicable customer.
Inventories - Inventories are stated at the lower of cost or market, cost being determined by the first-in, firstout method for raw materials and the average cost method for work in process and finished products. Cost
includes net prices paid for materials purchased, production labor cost, factory overhead and charges forcustoms duties.
Property, Plant and Equipment - Property, plant and equipment is stated at cost less accumulated depreciationand impairment charges. Depreciation of property, plant and equipment is computed by the declining-balancemethod, except for buildings acquired on or after April 1, 1998, which are depreciated using the straight-line
method, based upon the estimated useful lives of the assets. The estimated useful lives are as follows:
Buildings and building improvements:

2 - 50 years (mainly 38 years)

Machinery and equipment(except for the part of the painting):

2 - 20 years (mainly 5 years)

Depreciation expenses for the years ended March 31, 2016, 2015 and 2014 are ¥3,278 million, ¥3,356 millionand ¥3,212 million, respectively. The Companies recorded ¥295 million of land held for sale in other current
assets in the consolidated balance sheet as of March 31, 2016, which represents the old site of the old Nagoya
branch. The land is included in the asset group for Wacoal Business (Domestic) in the segment information.
Please see information at Note 23 Subsequent events for information on the transfer of this land.

- 111 -

Impairment of Long-Lived Assets - The carrying values of long-lived assets, held and used by the Companies,
are evaluated for impairment whenever there is an event or change in circumstances that indicates that such
assets have been impaired or that the carrying amounts of such assets might not be recoverable. The carrying
amount of a long-lived asset 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 amountof 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 of a long-lived asset exceeds its fair value.
Impairment charges on long-lived assets for the year ended March 31, 2016 were ¥256 million in selling,
general and administrative expenses. The Companies recorded no impairment charges on long-lived assets forthe years ended March 31, 2015 and 2014.
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 created the goodwill resides. To test for goodwill impairment, the carrying value ofeach reporting unit is compared with its fair value. If the carrying amount of a reporting unit exceeds its fairvalue, the second step of the goodwill impairment test is performed by comparing the carrying amount ofreporting unit goodwill with its implied fair value. If the carrying amount of reporting unit goodwill exceeds
its implied fair value, an impairment charge is recognized in an amount equal to that excess.
To test for impairment of other intangible assets with indefinite useful lives, the carrying value of an intangible
asset is compared with its fair value. 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 estimable useful lives consist primarily of brands, customer relationships andsoftware and are amortized over their estimated useful lives using the straight-line method. The estimateduseful lives are as follows:
Brands:20 - 25 years (mainly 25 years)

Customer relationships:

7 years

Software: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 estimate
because the Companies' lease contracts generally have automatic renewal articles. The estimated asset
retirement costs are capitalized as part of the carrying amount of the associated long-lived asset anddepreciated over its useful life.
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.
The Companies do not recognize a gain or loss on settlement of the pension liability when the cost of all
settlements in a year is less than or equal to the sum of the service cost and interest cost components of net
periodic pension cost for the plan for the year.

- 112 -

Leases - Certain noncancelable leases are classified as capital leases and the leased assets are included as partof property, plant and equipment. Other leases are classified as operating leases and are not capitalized. The
payments on such leases are recorded as expense. The rental expense under operating leases is recognized ona straight-line basis.
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 fain value of the net assets in excess of the purchase price in earnings as a gain on bargain
purchase in the consolidated statements of income.
Revenue Recognition - The Companies recognize revenue on sales to retailers, mail order catalog sales andinternet sales when (1) persuasive evidence of an arrangement exists, (2) delivery has occurred resulting intransfer of title and risk of loss, (3) the sales price is fixed or determinable, and (4) collectability is reasonably
assured. As for consignment sales, the Companies recognize revenue when the products are sold to theultimate customer. The Companies recognize revenue on direct retailing sales at the Companies' directly
managed retail stores at the point of sale to the customer.
Shipping and Handling Costs - Shipping and handling fees billed to customers are classified in net sales.
Shipping and handling costs are expensed as incurred. Shipping and handling costs for the years ended March
31, 2016, 2015 and 2014 were ¥5,560 million, ¥5,487 million and ¥5,708 million, respectively, and have been
included in selling, general and administrative expenses.
Advertising Expenses - Advertising costs are expensed as incurred. Advertising expenses for the years ended
March 31, 2016, 2015 and 2014 were ¥13,167 million, ¥13,103 million and ¥14,295 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, 2016, 2015 and 2014 were ¥839 million, ¥869 million and¥808 million, respectively, and have been included in selling, general and administrative expenses.
Consumption Taxes - Consumption taxes are excluded from sales, costs, and expenses in the consolidated
statements of income.
Income Taxes - The provision for income taxes is determined under the asset and liability method in
accordance with the guidance for income taxes. Under this method, deferred tax assets and liabilities are
determined for temporary differences between the 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.

- 113 -

Share-Based Compensation - Share-based compensation is accounted for in accordance with the guidance forstock compensation. The Company measures share-based compensation cost at the grant date, based on thefair value of the award and recognizes the cost over the requisite service period, which is the vesting period.
The fair value of the award is estimated using the Black-Scholes option-pricing model.
Derivatives - Derivative instruments, including certain derivative instruments embedded in other contracts, areaccounted for in accordance with the guidance for derivatives and hedging. Because such derivative
instruments are not designated as hedges, changes in the fair value are recorded in earnings or losses.
Subsequent Events - In accordance with the guidance for subsequent events, the Company has evaluatedsubsequent events through June 29, 2016.
Reclassifications - Certain reclassifications have been made to the prior years' consolidated financial
statements to conform to the current year's presentation.
Recent Accounting Pronouncements:
Revenue Recognition - In May 2014, the Financial Accounting Standard Board (the "FASB") issued a new
accounting standard related to revenue recognition. This guidance is based on the principle that revenue isrecognized to depict the transfer of promised goods or services to customers in an amount that reflects theconsideration to which the entity expects to be entitled in exchange for those goods or services. This standard
provides comprehensive guidance, and requires the disclosure of information to enable users of financial
statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising fromcontracts with customers. In August 2015, FASB issued additional guidance and deferred the effective date of
the guidance for a year. In May 2016, FASB also issued additional guidance to improve above guidance byreducing the potential for diversity in practice at initial application and the cost and complexity of applying
Topic 606 both at transition and on an ongoing basis. This guidance is effective for fiscal years beginning
after December 15, 2017 and interim periods within that annual period. The Company is currently evaluating
the impact of adoption on the Company's consolidated financial position, result of operations, or cash flows.
Extraordinary and Unusual Items - In January 2015, the FASB issued a new accounting standard related to
extraordinary and unusual items. This guidance eliminates from U.S. GAAP the concept of extraordinary
items and the requirements to 1) segregate an extraordinary item from the results of ordinary operations, 2)
present the item separately on the income statement, net of tax, after income from continuing operations and 3)
disclose income taxes and earnings-per-share data applicable to the extraordinary item. This guidance iseffective for fiscal years and interim periods within that annual period, beginning after December 15, 2015. It
is not expected to have an impact on the Companies' consolidated financial position, results of operations, orcash flows, since it relates only to disclosure requirements.
Fair Value Measurement - In May 2015, the FASB issued a new standard which amends fair value
measurement. This guidance removes the requirement to categorize within the fair value hierarchy all
investments for which fair value is measured using the net asset value per share practical expedient. The
amendments also remove the requirement to make certain disclosures for all investments that are eligible to bemeasured at fair value using the net asset value per share practical expedient. Rather, those disclosures arelimited to investments for which the entity has elected to measure the fair value using that practical expedient.
This guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within thosefiscal years. The adoption of this guidance is not expected to have an impact on the Companies' consolidated
financial position, results of operations, or cash flows, since it relates only to disclosure requirements.

- 114 -

Measurement of Inventory - In July 2015, the FASB issued a new standard related to simplifying themeasurement of inventory. Currently an entity is required to measure inventory at the lower of cost or market.
Market could be replacement cost, net realizable value, or net realizable value less an approximately normal
profit margin. This guidance requires an entity to measure inventory at the lower of cost or realizable value.
This guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within thosefiscal years. The Company is currently evaluating the impact of adoption on the Company's consolidated
financial position, result of operations, or cash flows.
Balance Sheet Classification of Deferred Taxes - In November 2015, FASB issued a new accounting
standard related to balance sheet classification of deferred taxes. This guidance requires an entity to classify
deferred tax liabilities and assets as noncurrent on the consolidated financial position. This guidance iseffective for fiscal years beginning after December 15, 2016. The Company is currently evaluating the impactof the adoption on the Company's consolidated financial position, result of operations, or cash flows.
Recognition and Measurement of Financial Instruments - In January 2016, FASB issued a new accounting
standard related to recognition and measurement of financial assets and financial liabilities. This guidance
requires an entity to measure equity investments (except those accounted for under to the equity method of
accounting or those that result in consolidation of the investee) at fair value with changes in fair value
recognized in net income and change of related disclosures. This guidance is effective for fiscal years
beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently
evaluating the impact of adoption on the Company's consolidated financial position, result of operations, orcash flows.
Lease - In February 2016, FASB issued a new accounting standard related to leases. This guidance requires anentity to recognize lease assets and lease liabilities on the balance sheet for, with a few exceptions, those leases
classified as operating leases under current U.S. GAAP. This guidance is effective for fiscal years beginning
after December 15, 2018, and interim periods within that annual period. The Company is currently evaluating
the impact of adoption on the Company's consolidated financial position, result of operations, or cash flows.
Equity Method - In March 2016, FASB issued a new accounting standard related to simplifying the transition
to the equity method of accounting. This guidance eliminates the requirement that when an investment
qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of
influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a
step by step basis as if the equity method had been in effect during all previous periods that the investment had
been held. This guidance also requires that an entity that has an available-for sale equity security that becomes
qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss inaccumulated other comprehensive income at the date the investment becomes qualified for use of the equity
method. This guidance is effective for fiscal years beginning after December 15, 2016, and interim periods
within that annual period. Earlier application is permitted. The Company adopted this guidance for the year
ended March 31, 2016. The adoption of this guidance does not have a material impact on the Companies'
consolidated financial position, results of operations, or cash flows.
2.

TRANSLATION INTO U.S. DOLLAR STATEMENTS
The consolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts areincluded solely for convenience of readers outside of Japan and have been made at the rate of ¥112.42 to $1,
the noon buying rate for yen in New York City as of March 31, 2016. Such translations 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.

- 115 -

3.

MARKETABLE SECURITIES AND INVESTMENTS
Held-to-Maturity and Available-for-Sale Securities - The fair value of debt and marketable equity securities
classified as held to maturity and available for sale is based on quoted market prices as of March 31, 2016 and2015. The cost, gross unrealized gain and loss and the fair value of held-to-maturity and available-for-salesecurities by major security type were as follows:

2016

Cost

Available-for-sale securities:
Current:
National debt securities andmunicipal bonds
Corporate debt securities
Mutual funds
Total
Noncurrent:
Equity securities

¥

2015

279

10
395
1,361

¥ 1,488¥ 279¥1¥ 1,766¥ 23,592¥ 30,336¥3¥ 53,925

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

¥

0

¥

¥ 114

¥

¥1

¥ 113

¥ 808

¥0

¥3

¥ 805

Cost

Available-for-sale securities:
Current:
National debt securities andmunicipal bonds
Corporate debt securities
Mutual funds¥

Fair Value¥0
1

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

10
395
1,083

Millions of Yen
Gross
Gross
Unrealized
Unrealized
Gain
Loss

10
500
1,104

Millions of Yen
Gross
Gross
Unrealized
Unrealized
Gain
Loss

Fair Value

1
291

¥5

10
501
1,390

¥ 1,614¥ 292¥5¥ 1,901¥ 23,587¥ 34,461¥0¥ 58,048

¥ 486

¥0

¥1

¥ 485

¥ 620

¥0

¥3

¥ 617

- 116 -¥¥

Gross unrealized holding losses and fair values of held-to-maturity securities, all of which have been in acontinuous unrealized loss position for more than 12 months as of March 31, 2016 and 2015, were as follows:
Millions of Yen
2016

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

2015

Fair Value

Gross
Unrealized
Loss

Gross
Unrealized
Loss

¥114

¥1

¥

¥

¥345

¥3

¥

¥

Fair Value

Gross unrealized holding losses and fair values of available-for-sale and held-to-maturity securities, all ofwhich have been in a continuous unrealized loss position for less than 12 months as of March 31, 2016 and2015, were as follows:
Millions of Yen
2016

2015

Fair Value

Gross
Unrealized
Loss

Fair Value

Gross
Unrealized
Loss

Available-for-sale securities:
Current:
Corporate debt securities
Mutual funds
Noncurrent:
Equity securities

¥395
480

¥0
1

¥295

¥5

¥102

¥3

¥1

¥0

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

¥

¥

¥242

¥1

¥232

¥0

¥375

¥3

As of March 31, 2016, the available-for-sale securities in a continuous unrealized loss position are composedof three equity securities, two corporate debt securities, and one mutual fund. The severity of decline was lessthan 25.0%. The Companies periodically determine whether a decline in the fair value of available-for-saleand held-to-maturity securities is deemed to be other than temporary based on criteria that includes theduration of market decline, the extent to which cost exceeds fair value, the financial position and businessoutlook of the issuer and the intent and ability of the Companies to retain the impaired available-for-sale andheld-to-maturity securities for sufficient period of time for anticipated recovery in fair value as described in
Note 1. No available-for-sale and held-to-maturity securities were identified that meet the Companies' criteria
for recognition of an impairment charge on available-for-sale and held-to-maturity securities in unrealized loss
position presented above. Therefore, the Companies do not believe the unrealized losses represent an otherthan-temporary impairment as of March 31, 2016 and 2015.

- 117 -

Future maturities of debt securities and mutual funds classified as available for sale excluding debt securities
and mutual funds without fixed maturities as of March 31, 2016, were as follows:
Millions of Yen
Fair
Cost
Value
Due within one year
Due after one year through five years
Due within ten years
More than ten years

¥

395
482

¥

394
481

279

289

Total

¥ 1,156¥ 1,164

Future maturities of debt securities classified as held to maturity as of March 31, 2016 were as follows:
Millions of Yen
Fair
Cost
Value
Due within one year
Due after one year through five years

¥ 114
808

¥ 113
805

Total

¥ 922

¥ 918

Proceeds from sales of available-for-sale securities and the gross realized gain or loss on the sales of availablefor-sale securities during the years ended March 31, 2016, 2015 and 2014, were as follows:

Proceeds from sales of available-for-sale securities
Gross realized gain on sales of available-for-sale securities

2016

Millions of Yen
2015

2014

¥ 102
90

¥ 3,499
1,516

¥ 190
64

During the year ended March 31, 2015, the Companies exchanged certain equity securities for othermarketable securities. The Companies recorded the newly received securities at fair value and recognized again of ¥1 million in the year ended March 31, 2015. There was no exchange of marketable securities for theyears ended March 31, 2014 and 2016.
The amount of impairment charges the Companies recognized on available-for-sale securities in which
declines in fair value were other than temporary were ¥20 million, ¥4 million and ¥47 million in the years
ended March 31, 2016, 2015 and 2014, respectively.
Cost-Method Securities - Investments in nonmarketable equity securities for which there are no readily
determinable fair values were accounted for using the cost method and aggregated ¥1,288 million, ¥1,295
million and ¥1,362 million as of March 31, 2016, 2015 and 2014, respectively. Investments in nonmarketable
equity securities are reviewed annually or upon the occurrence of an event for other-than-temporary
impairment. The Companies recognized impairment charges on investments in nonmarketable equity
securities of ¥0 million and ¥10 million in the years ended March 31, 2016 and 2015, respectively. There were
no impairment charges on investments in nonmarketable equity securities for the year ended March 31, 2014.

- 118 -4.

VALUATION AND QUALIFYING ACCOUNTS
Information related to the Companies' allowance for doubtful receivables was as follows:
2016

Millions of Yen
2015

2014

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

¥ 198
110
(112)

¥ 201
45
(48 )

¥ 180
32
(11 )

Balance at the end of the year

¥ 196

¥ 198

¥ 201

2016

Millions of Yen
2015

2014

Balance at the beginning of the year
Charged to costs and expenses
Balances utilized¥ 2,211
2,033(2,211)¥ 2,120
2,211(2,120)¥ 1,7022,120(1,702)

Balance at the end of the year

¥ 2,033¥ 2,211¥ 2,120

Information related to the Companies' allowance for sales returns was as follows:

5.

INVENTORIESThe components of inventories as of March 31, 2016 and 2015, were as follows:
Millions of Yen
2016
2015

6.

Finished products
Work in process
Raw materials¥ 37,689
4,056
2,700

¥ 36,935
3,625
2,333

Total

¥ 44,445¥ 42,893

INVESTMENTS IN AFFILIATED COMPANIESInvestments are accounted for using the equity method of accounting if the investment provides theCompanies the ability to exercise significant influence over an investee. Significant influence is generally
deemed to exist if the Companies have an 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 isappropriate. 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 companies' income or loss based on the most recently available financial statements.

- 119 -

The primary affiliated companies and percentage of ownership as of March 31, 2016 and 2015, were as
follows:
Percentage of Ownership (%)
2016
2015

Name of Investee
THAI WACOAL PUBLIC CO., LTD.
Shinyoung Wacoal Inc.
PT. Indonesia Wacoal
Taiwan Wacoal Co., Ltd.
House of Rose Co., Ltd.

34
25
42
50
24

34
25
42
50
24

Aggregate carrying amounts and fair values of investments in affiliated companies which have a quoted
market price as of March 31, 2016 and 2015, were as follows:
Millions of Yen
2016
2015
Carrying amount
Aggregate value of quoted market price¥ 13,522
11,561¥14,155
12,107

The following tables represent the affiliated companies' summarized information from the balance sheets as ofMarch 31, 2015, and statements of income for the years ended March 31, 2015 and 2014. Summarized
information of the balance sheets and statements of income of the affiliated companies for the year ended
March 31, 2016, is not disclosed as it is immaterial.
Millions ofYen
2015
Current assets
Noncurrent assets¥ 45,218
45,317

Total¥ 90,535

Current liabilities
Long-term liabilities
Equity¥ 10,262
9,678
70,595

Total¥ 90,535
Millions of Yen
2015
2014

Net sales
Gross profit
Income before income taxes
Net income¥62,459
31,5192,848
2,196¥60,257
31,011
3,664
2,503

Dividends received from the affiliated companies were ¥763 million, ¥678 million and ¥713 million during theyears ended March 31, 2016, 2015 and 2014, respectively.
Retained earnings include net undistributed earnings of affiliated companies in the amount of ¥15,226 millionand ¥14,948 million as of March 31, 2016 and 2015, respectively.

- 120 -

7.

ACQUISITIONSOn April 1, 2015, Ai Co., Ltd., a wholly-owned domestic subsidiary of the Company, acquired the swimwear
business and underwear business from San-Ai Co., Ltd. and San-Ai Style Co., Ltd., and the difference between
the acquisition cost and the estimated fair values of the identifiable assets acquired and liabilities assumed, thedetails of which were investigated and analyzed, was recorded on the consolidated statements of income as again on bargain purchase in the amount of ¥173 million.
The fair values of the assets and liabilities as of the date of the acquisition have been revised based on updated
information obtained after the date of acquisition, and are adjusted retroactively to the date of the acquisition.
In January 2016, Wacoal Corp., a wholly-owned subsidiary of the Company, established A Tech Textile Co.,
Ltd. ("A Tech") and G Tech Material Co., Ltd. ("G Tech") in the Kingdom of Thailand pursuant to joint
venture agreements executed on November 13, 2015. A Tech and G Tech executed business transfer
agreements with Textile Prestige Public Company Limited ("TPC") and Erawan Textile Company Limited("ETC"), respectively, and transfers of the material business assets and liabilities were completed on February
1, 2016.
In connection with these business transfers, A Tech and G Tech estimates the purchase price for the assets
acquired and liabilities assumed, in the amount of ¥2,350 million (THB 704 million) and ¥693 million (THB
208 million), respectively.
By establishing these two subsidiaries, the Group will build a worldwide system to supply materials andproducts in the ASEAN region, which has the potential to further develop and grow, improve the
manufacturing quality and cost competitiveness of our entire group and aims to stably supply high value-added
materials and products to the global network of the Wacoal group and customers in the future.
The fiscal year end of these two subsidiaries is December 31. The impacts of the establishment of these two
subsidiaries and the business transfers have been reflected during the current consolidated fiscal year inconsideration of the material impact of intervening events that occurred during the period after December 31,
2015 to March 31, 2016.
As a result of purchase price allocations for A Tech and G Tech, goodwill was recognized and recorded in theamount of ¥246 million and ¥223 million, respectively, on the consolidated balance sheets. Goodwill is notdeductible for tax purposes.

- 121 -

The provisional fair value of the assets and liabilities of the businesses, which A Tech and G Tech acquired,were as follows:
Millions of Yen
February 1, 2016
A TechG TechCash and cash equivalents
Notes and accounts receivable
Inventories
Other current assets
Property, plant and equipment
Goodwill
Other fixed assets
Total

¥

210
557
608
18
1,243
246
2,882

¥ 150
101
4
342
223
1
821

Current liabilities
Other long-term liabilities
Total

281
251
532

82
46
128

Total shareholder's equity¥ 2,350¥ 693

Subsequent to March 31, 2016, on May 31, 2016, A Tech and TPC reached an agreement on the purchaseprice for assets acquired and liabilities assumed. The final purchase price is ¥2,334 million (THB 699
million), and ¥230 million of goodwill is recognized. The ¥16 million adjustment to goodwill will be reflectedin the first quarter of the year ending March 31, 2017, as an adjustment during the measurement period.
8.

GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill - The changes in the carrying amount of goodwill for the years ended March 31, 2016, 2015 and2014 were as follows:
Millions of Yen
2016
WacoalBusiness(Overseas)
Balance at the beginning of the year:
Goodwill
Accumulated impairment charges
Total
Acquisition during the year
Foreign currency translation adjustments
Balance at the end of the year:
Goodwill
Accumulated impairment charges¥ 14,425
14,425469(1,308)Peach John
Segment¥ 11,203(6,878)4,325¥ 25,628(6,878)18,750469(1,308)

11,203(6,878)24,789(6,878)4,325¥ 17,911

13,586

Total¥ 13,586- 122 -

Total¥

Millions of Yen
2015
WacoalBusiness(Overseas)
Balance at the beginning of the year:
Goodwill
Accumulated impairment charges
Total
Foreign currency translation adjustments
Impairment charges
Balance at the end of the year:
Goodwill
Accumulated impairment charges

Peach John
Segment¥ 13,553¥ 11,203(2,033)
9,170

13,553872
14,425

Total

Total

¥ 14,425¥(4,845)¥ 24,756(2,033)22,723872(4,845)

11,203(6,878)25,628(6,878)4,325¥ 18,750

Millions of Yen
2014
WacoalBusiness(Overseas)
Balance at the beginning of the year:
Goodwill
Accumulated impairment charges
Total
Foreign currency translation adjustments
Balance at the end of the year:
Goodwill
Accumulated impairment charges

Peach John
Segment¥ 11,272
11,272
2,281¥ 11,203(2,033)9,170¥ 22,475(2,033)
20,442
2,281

11,203(2,033)24,756(2,033)9,170¥ 22,723

13,553

Total¥ 13,553

Total¥

During the year ended March 31, 2015, the Companies recorded impairment charges on goodwill of ¥4,845
million in the Peach John Segment. See Note 21 for further information.
Other Intangible Assets - The components of acquired intangible assets excluding goodwill as of March 31,
2016 and 2015 were as follows:Year Ended March 31
Amortized intangible assets:
BrandsSoftware
OthersTotal
Unamortized intangible assets:
Trademarks
Other
Total

Gross
Carrying
Amount¥Millions of Yen
2016
Accumulated
Amortization
Grossand Impairment
Carrying
ChargeAmount

6,766
8,034
1,646

¥ 1,212
4,597
633

¥

¥ 16,446¥ 6,442¥ 17,281¥ 6,639¥ 5,316114¥ 3,322¥ 5,316103¥ 3,322¥ 5,430¥ 3,322¥ 5,419¥ 3,322- 123 -

7,440
8,271
1,570

2015
Accumulated
Amortization
and Impairment
Charge
¥

999
5,035
605

Other intangible assets acquired during the year ended March 31, 2016 totaled ¥1,432 million which primarily
consist of software with an estimated useful life of five years.
The gross carrying amounts of brands include foreign currency translation adjustments.
During the year ended March 31, 2015, the Companies recorded an impairment charge on other intangible
assets for the trademarks of ¥1,176 million in the Peach John Segment. During the years ended March 31,
2016 and 2014, the Companies recorded no impairment charge on other intangible assets. See Note 21 forfurther information.
Aggregate amortization expenses for the years ended March 31, 2016, 2015 and 2014 related to otherintangible assets were ¥1,537 million, ¥1,536 million and ¥1,824 million, respectively. Future estimatedamortization expenses as of March 31, 2016, were as follows:Year Ending March 31

Millions ofYen

Estimated amortization expense
2017
2018
2019
2020
2021

¥ 1,355
1,273
1,042
783
499

Total
9.

¥ 4,952SHORT-TERM BANK LOANS AND LONG-TERM DEBT
Short-term bank loans as of March 31, 2016 and 2015, consisted of the following:
Millions of Yen
2016
2015
Unsecured bank loans¥11,759¥10,038

The weighted-average annual interest rate on short-term bank loans as of March 31, 2016 and 2015 was 0.4%.
Unused lines of credit for short-term financing as of March 31, 2016 and 2015, aggregated ¥24,779 millionand ¥25,189 million, respectively. The Companies compensate banks for these facilities in the form ofcommitment fees, which were not material during the years ended March 31, 2016 and 2015.
Long-term debt as of March 31, 2016 and 2015, is summarized below. The interest rates and maturities are forloans as of March 31, 2016.
Millions of Yen
2016
2015
Collateralized bank loans, with fixed interest at 1.5% - 1.8%,
maturing through 2022
Unsecured bank loans, with floating interest at 1.0%, maturing
through 2016
Unsecured bank loans, with fixed interest at 0.2% - 1.5%,
maturing through 2022
Total
Less current portionLong-term debt, less current portion

¥ 231

271
3,957

¥

- 124 -

¥

157
388
(293)

551
4,779
(534)

95

¥ 4,245

The annual maturities of long-term debt as of March 31, 2016, were as follows:
Millions of
Yen

Year Ending March 31
2017
2018
2019
2020
2021
Thereafter

¥ 293
20
20
20
20
15

Total

¥ 388

A subsidiary has pledged assets as security for loans. As of March 31, 2016 and 2015, assets pledged ascollateral for bank loans were as follows:
Millions of Yen
2016
2015
Land
Buildings

¥ 150
236

¥ 150
258

Total

¥ 386

¥ 408

As is customary in Japan, both short-term and long-term loans are made under general agreements which
provide that security and guarantees for future and present indebtedness will be given upon request of thebank. The bank has the right to offset cash deposits against obligations that have become due or, in the eventof default, against all obligations due to the bank.
10.

LEASES
The Companies lease most of their store premises and certain equipment. Most leases have automatic renewal
provisions and allow the Companies to extend the lease term beyond the initial base period, subject to theterms agreed at lease inception. Future minimum rental commitments on operating leases having a remaining
noncancelable lease term in excess of one year as of March 31, 2016 are presented below:
Millions of
Yen

Year Ending March 31
2017
2018
2019
2020
2021
Thereafter

¥

716
566
344
102
81
89

Total

¥ 1,898

Rental expenses were ¥7,902 million, ¥6,476 million and ¥5,975 million for the years ended March 31, 2016,2015 and 2014, respectively, and have been included in selling, general and administrative expenses.

- 125 -

11.

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

12.

2016

Millions of Yen
2015

2014

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

¥ 777
20
157
(74 )
(2 )

¥ 728
8
66
(32 )
7

¥ 648
6
112
(43 )
5

Balance at the end of the year

¥ 878

¥ 777

¥ 728

TERMINATION AND RETIREMENT PLANS
Employee Retirement Plans - The Company and certain subsidiaries 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 usuallyentitled to greater payments than in the case of voluntary termination.
The Company and certain subsidiaries have a contributory defined retirement benefit plan and several
unfunded termination plans administered by the Company and certain subsidiaries. Benefits under thecontributory defined retirement benefit plan are usually paid in a lump sum at the earlier of termination orretirement, although periodic payments are available under certain conditions. Benefits under the othertermination and retirement benefit plan are paid either as lump-sum payments or periodic payments undercertain conditions. The benefits are usually paid as a lump-sum payment, if the employee resigns before themandatory retirement age.

- 126 -

Contributory Defined Retirement Benefit Plan - The following provides a reconciliation of benefit
obligations, plan assets and funded status of the plans:
2016

Millions of Yen
2015

2014

Change in benefit obligations:Benefit obligations at the beginning of the year
Service cost
Interest cost
Participants' contributions
Actuarial loss
Benefits paid from plan assets
Settlement paid from plan assets
Settlement paid by the Company and certain subsidiaries
Changes in foreign currency exchange rate
Change in the scope of consolidation
Benefit obligations at the end of the year

¥ 34,085
1,074
321
66
1,893
(950)
(850)
(100)
(6 )
244
35,777¥ 33,712
1,021
417
66
1,001
(908)
(1,075)(149)¥ 34,449
1,025
398
66
(258)
(879)
(995)
(94 )

34,08533,712

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 rate
Fair value of plan assets at the end of the year

¥ 43,137
(516)
1,275
66
(950)
(850)
(6 )
42,156¥ 37,738
5,565
1,751
66
(908)
(1,075)¥ 34,178
3,659
1,709
66
(879)
(995)

43,13737,738Funded status at the end of the year

¥

¥

6,379

9,052

¥

4,026

Amounts recognized in the consolidated balance sheets as of March 31, 2016 and 2015, consist of:Millions of Yen
2016
2015
Prepaid pension expense
Accrued expenses
Liability for termination and retirement benefits¥ 8,145(63 )(1,703)¥ 10,577(63 )(1,462)¥ 6,379¥

9,052

Amounts recognized in accumulated other comprehensive income (loss), pre-tax, as of March 31, 2016 and2015, were as follows:
Millions of Yen
2016
2015
Actuarial loss
Prior service benefit- 127 -¥ (1,264 )607¥ 2,573
1,098¥¥ 3,671(657 )

The accumulated benefit obligation for all defined retirement benefit plans as of March 31, 2016 and 2015,
was as follows:
Millions of Yen
2016
2015
Accumulated benefit obligation¥35,777¥34,085

The projected benefit obligations and the fair value of the plan assets for the Company and certain subsidiaries'
pension plans with projected benefit obligations in excess of plan assets, and the accumulated benefit
obligations and the fair value of the plan assets for the Company and certain subsidiaries' pension plans withaccumulated benefit obligations in excess of plan assets were as follows:
Millions of Yen
2016
2015
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 plan
assets:Accumulated benefit obligations
Fair value of plan assets¥2,659893¥2,342
817

2,659
893

2,342
817

Net periodic benefit costs for the Company and certain subsidiaries' plans consisted of the following for theyears ended March 31, 2016, 2015 and 2014:

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service benefit

2016

Millions of Yen
2015

2014

¥ 1,074321(967 )(461 )(491 )¥ 1,021417(865 )
220(492 )¥ 1,025398(803 )
936(574 )¥ (524 )

¥

¥

301

982

The unrecognized net actuarial loss and prior service benefit are being amortized over 12 years (the averageremaining service life of active participants) using the declining-balance method and the straight-line method,respectively.
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) for theyears ended March 31, 2016, 2015 and 2014 were as follows:

Current year actuarial gain
Amortization of actuarial loss
Amortization of prior service benefit- 128 -

2016

Millions of Yen
2015

2014

¥ (3,376)
(461)
(491)

¥ 3,699220(492 )¥ 3,114936(574 )¥ (4,328)¥ 3,427¥ 3,476

The estimated amounts that will be amortized from accumulated other comprehensive income into net periodic
benefit cost over the next year are summarized as follows:
Millions of
Yen
Actuarial gain
Prior service benefit

¥ 216
(486)

The Company and certain subsidiaries use a measurement date of March 31 for their plans. The weightedaverage assumptions used as of March 31, 2016 and 2015 in computing the benefit obligations shown above
were as follows:

Discount rate

2016

2015

0.5%

1.0%

The weighted-average assumptions used as of March 31, 2016, 2015 and 2014, in computing the net periodic
benefit cost shown above were as follows:

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

2016

2015

2014

1.0%
5.3%
2.5%

1.3%
7.6%
2.5%

1.2%
7.6%
2.5%

The Company's approach to establishing the discount rate is based upon corporate bond indices. The discountrate assumption is based upon the effective yields as of March 31, 2016 on the corporate bond indices whosematurity dates approximate the timing of the expected future benefit payments.
The retirement benefit plan of the Company and a certain subsidiary is the point-based benefits system,
therefore, the rate of compensation increase has not been consolidated 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 short-term financing of 2.0%.
The Company and certain subsidiaries' investment strategy is to maintain actual asset weightings within apreset range of target allocations. The Company and certain subsidiaries’ investments are broadly diversified,consisting primarily of equity and debt securities. The Company and certain subsidiaries believe these ranges
represent an appropriate risk profile for the planned benefit payments of the plans based on the timing of theestimated benefit payment.
The asset allocation as of March 31, 2016 and 2015, was as follows:

Equity securities
Debt securities
Life insurance company general accounts
Real estate
Short-term financing- 129 -

2016

2015

46.4%
30.6%
12.2%
3.9%
6.9%

49.4%
29.8%
12.0%
1.4%
7.4%

The target allocation percentages are reviewed and approved by the Pension Committee. The actual
allocations for 2016 and 2015 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 basedon an agreement between Wacoal Corp. and its employees and is not governed by the Pension Committee. As
such, the actual allocation percentage of equity securities to the total plan assets is higher than the target
allocation, and similarly, the actual allocation for some other types of assets is lower than the target allocation.
The following tables present the Company and certain subsidiaries' plan assets using the fair value hierarchy asof March 31, 2016 and 2015. The fair value hierarchy has three levels based on the reliability of the inputs
used to determine fair value. For the reference to each level, see Note 21.
2016

Level 1Equity securities:
Japanese companies
Pooled funds (a)Debt securities:
Foreign government bonds
Pooled funds (b)Life insurance company general accounts
Other types of investments:
Hedge funds (c)Pooled funds (d)Short-term financing

Millions of Yen
Level 2
Level 3

¥ 9,508

Total

9,397

¥

9,508
9,397

9,139
5,135

25
9,139
5,135

1,273
6,288
1,391

1,273
6,288
1,391

¥ 9,533¥ 32,623¥ 42,156

Level 1Millions of Yen
Level 2
Level 3

¥
25

Total

2015
Equity securities:
Japanese companies
Pooled funds (a)Debt securities:
Foreign government bonds
Pooled funds (b)Life insurance company general accounts
Other types of investments:
Hedge funds (c)Pooled funds (d)Short-term financing¥ 9,424¥ 11,552¥

9,424
11,552

9,717
5,164

17
9,717
5,164

1,194
3,301
2,768

1,194
3,301
2,768

¥ 33,696¥ 43,137

17

Total

¥ 9,441

Total(a) This class includes common stock of approximately 32% Japanese companies and 68% foreigncompanies as of March 31, 2016 and those percentages were 25% and 75%, respectively, as of March
31, 2015.
(b) This class includes approximately 27% of Japanese government bonds, 4% of Japanese municipal
bonds, 36% of foreign government bonds and 33% of corporate bonds as of March 31, 2016, andthose percentages were 28%, 3%, 33% and 36%, respectively, as of March 31, 2015.
(c) This class is hedge funds that invest both long and short in debt securities as of March 31, 2016 and2015.

- 130 -

(d) This class includes approximately 39% of corporate bonds, 2% of common stock of Japanesecompanies, 8% of common stock of foreign companies, 27% of real estate and 24% of short-term
financing as of March 31, 2016. This class includes approximately 58% of corporate bonds, 2% ofcommon stock of Japanese companies, 10% of common stock of foreign companies, 18% of realestate and 12% of short-term financing as of March 31, 2015.
Equity securities and debt securities presented in Level 1 are primarily valued using a market approach basedon the quoted market prices of identical instruments. Pooled funds in equity securities or debt securities andhedge funds which are categorized in Level 2 are valued by the sponsor of the funds primarily based on quoted
prices in both active and inactive market for identical instruments which comprise funds. Life insurancecompany general accounts include contracts with the insurance companies with guaranteed rates of return andcapital, and those values are based on the sum of original value and return.
The Company and certain subsidiaries' funding policy for the funded plans is to contribute amounts computedin accordance with actuarial methods accepted by Japanese tax law. The Company and certain subsidiaries
expect to contribute ¥640 million to their plans in the year ending March 31, 2017.
The following benefit payments, which reflect expected future services, as appropriate, are expected to bepaid:
Millions of
Yen

Year Ending March 31
2017
2018
2019
2020
2021
Thereafter¥ 1,928
1,951
2,032
1,951
1,896
9,342

Defined Contribution Plan - Certain subsidiaries have defined contribution plans. The amounts of cost
recognized for their contributions to the plan were ¥219 million, ¥203 million and ¥196 million for the years
ended March 31, 2016, 2015 and 2014, respectively.
Employee Early Retirement Program - The Company and certain subsidiaries provide additional benefits toemployees that elect to participate in the Company and certain subsidiaries' early retirement program.
Retirement benefits of ¥125 million, ¥114 million and ¥228 million were paid in addition to normal benefits
and charged to selling, general and administrative expenses for the years ended March 31, 2016, 2015 and2014, respectively.
Termination Plan for Directors - The Company previously had, and certain subsidiaries currently have,termination plans for directors. Payment of termination benefits to directors is made in a lump sum upon
termination and requires the approval of the shareholders before payment. In June 2005, the Company
rescinded its termination plan for directors upon the approval of its shareholders. The amount of benefit foreach individual was fixed as of June 29, 2005 and will remain frozen until the retirement of each respective
director. The outstanding liabilities were ¥340 million and ¥399 million as of March 31, 2016 and 2015,
respectively, and were recorded in other long-term liabilities. Subsidiaries maintained plans for their 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 in accordance with the guidance for determination of vested benefit
obligation for a defined benefit pension plan. However, the subsidiaries rescinded its termination plan for
directors in the year ended March 31, 2016. There was no outstanding balance of the liabilities for termination
benefits for directors as of March 31, 2016. The liabilities for termination benefits for directors as of March
31, 2015 was ¥218 million, and was included in liability for termination and retirement benefits.

- 131 -

13.

COMMITMENTS AND CONTINGENT LIABILITIESThe Company entered into a construction supervision contract and construction contract of ¥6,395 million, in
connection with the office that was established in Minami-ku, Kyoto on October 20, 2014. The Company had
contractual obligations of ¥5,763 million as of March 31, 2015. The amount of contractual obligations as ofMarch 31, 2016, is not disclosed as the remaining terms of those contracts are less than one year.

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. For companies that meet certain
criteria, the Board of Directors may declare dividends (except for dividends in kind) at any time during
the fiscal year if the companies have prescribed so in its articles of incorporation. The Company meets all
the above criteria.
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.
(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 capitalsurplus) depending on the equity account charged upon the payment of such dividends until the total of
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 be reversed
without limitation. The Companies Act also provides that common stock, legal reserve, additional paidin capital, other capital surplus and retained earnings can be transferred among the accounts under certain
conditions upon resolution of the shareholders.
(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 theamount available for distribution to the shareholders which is determined by a specific formula.

- 132 -

During the years ended March 31, 2016 and 2015, changes in Wacoal Holdings Corp.'s additional paid-in
capital due to equity transactions with noncontrolling interest shareholders were as follows:
Millions of Yen
2016
2015
Net income attributable to Wacoal Holdings Corp.
Increase in Wacoal Holdings Corp.'s additional paid-in capital
due to transfers of Wacoal Holdings Corp.'s ownershipinterests in its subsidiaries from noncontrolling interests
Change in net income attributable to Wacoal Holdings Corp. andtransfers from noncontrolling interests
15.

¥ 11,159¥ 8,4440¥ 11,159¥ 8,444SHARE-BASED COMPENSATIONThe Company adopted an annual stock option plan in the year ended March 31, 2009. Under the stock option
plan, the Company granted shares of its common stock to directors of the Company excluding outside
directors and directors of the Company's wholly owned subsidiary, Wacoal Corp., in the years ended March
31, 2016, 2015 and 2014. The Company believes that such awards better align the interests of its directors
with those of its shareholders, by sharing both risk and return from fluctuations in stock prices and giving
motivation to enhance its corporate value. Each stock option is exercisable to acquire 1,000 shares of theCompany's common stock at ¥1 per share. The compensation cost is measured at fair value on the grant date.
Options vest over one year in proportion to the services 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 dateof retirement, whichever is earlier.
The fair value of the options is estimated by using the Black-Scholes option-pricing model with the following
assumptions.
Expected dividend yield is based on the actual payout of dividends in the last fiscal year and the closing priceof the Company's common stock on the grant date. Expected volatility is based on the historical volatility of
the Company's share price over the most recent period commensurate with the expected term of the Company's
stock options. The risk-free interest rate is based on the Japanese government bond yield curve in effect at thetime of grant for a period commensurate with the expected term of the Company's share options. The expected
term of options granted is based on the average remaining service period of directors, assuming that those whoare granted options will render service until the stated retirement date and they will exercise options
immediately after their retirement.

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

2016

2015

2014

2.0%
20.9%
0.0%
2.6 years

3.2%
18.7%
0.1%
3.1 years

2.8%
20.6%
0.1%
2.8 years- 133 -

A summary of stock option activities under the plan for the year ended March 31, 2016, was as follows:
Yen

Outstanding as of April 1, 2015
GrantedExercised
Outstanding as of March 31, 2016
Exercisable as of March 31, 2016

Millionsof YenShares

WeightedAverage
Exercise
Price

Years
WeightedAverage
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

404,000
49,00022,000431,000
84,000¥1
1
1
1
1

13.99 years
3.77 years

¥578
113

The total intrinsic value of options exercised was ¥31 million and ¥6 million for the years ended March 31, 2016 and 2015, respectively. There were no options exercised during the year ended March 31, 2014.
The total compensation costs recognized for the years ended March 31, 2016, 2015 and 2014 were ¥67 million, ¥60 million and ¥69 million, respectively. The total recognized tax benefits related thereto for the years ended March 31, 2016, 2015 and 2014
were ¥21 million, ¥21 million and ¥25 million, respectively.
The weighted-average grant date fair values of options granted for the years ended March 31, 2016, 2015 and 2014 were ¥1,419, ¥937 and ¥918, respectively.
As of March 31, 2016, there was ¥13 million in total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plan. That cost is expected to be recognized over three months.
16.

OTHER COMPREHENSIVE INCOME (LOSS)
The changes in the components of accumulated other comprehensive income, including amounts attributable to noncontrolling interests were as follows:
Millions of Yen
2015

2016

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 attributable to noncontrolling interests(after-tax)
Balance at the end of the year (after-tax)

Foreign
Currency
Translation
Adjustments

Unrealized
Loss onSecurities

PensionLiability
Adjustments¥ 10,831¥ 20,821¥ 1,934(5,890)220(5,670)(4,169)1,336(2,833)(3,418)1,091(2,327)

(70 )
23
(47 )

(952)
308
(644)

16

25

2

5,177

17,966(1,035)

Foreign
Currency
Translation
Adjustments

Unrealized
Gain onSecurities

¥

2,310

¥ 11,606

9,019(348 )
8,671

2014
PensionLiability
Adjustments¥

Foreign
Currency
Translation
Adjustments(227)¥ (5,924)

15,809(5,593)
10,216

3,651(1,319)2,332(1,513)539(974)(150 )
10,831

Unrealized
Gain onSecurities¥

PensionLiability
Adjustments

9,310¥ (1,928)

8,582
(240)
8,342

3,709
(1,396)
2,313

2,578
(1,110)
1,468

(272)
96
(176)

27
27

(17 )
6
(11 )

362
(129)
233

(27 )

5

(135)

(6 )

20,821

1,934

2,310

11,606(227)

Reclassification adjustments (pre-tax) of foreign currency translation adjustments are included in "Other - net."
Reclassification adjustments (pre-tax) of unrealized gain or loss on securities are included in "Gain or loss on sales or exchange of marketable securities and Investments - net" and " Valuation loss on marketable securities and investments."
Reclassification adjustments (pre-tax) of pension liability adjustments are included in "Cost of sales" and "Selling, general and administrative expenses" as the net periodic benefit costs.

- 134 -

17.

INCOME TAXES
Domestic and foreign components of income before income taxes, equity in net income of affiliated companies
were summarized as follows:
2016

Millions of Yen
2015

2014

Japan
Foreign¥ 24,002(9,045)¥ 19,902(8,560)¥ 22,877(7,844)

Total¥ 14,957¥ 11,342¥ 15,033

2016

Millions of Yen
2015

2014

¥ 1,666
1,776¥ 3,852
1,371¥ 3,710
1,546¥ 3,442¥ 5,223¥ 5,256¥ 1,483(195 )¥ (1,983)
63

¥ 549
(164)

¥ 1,288¥ (1,920)¥ 385¥ 4,730¥ 3,303¥ 5,641

Domestic and foreign components of income tax expense consist of:Current:
Japan
Foreign

Deferred:Japan
Foreign

Total income taxes

Income taxes in Japan applicable to the Companies, imposed by the national, prefectural and municipal
governments, in the aggregate resulted in a normal effective statutory tax rate of approximately 33.1%, 35.6%
and 38.0% for the years ended March 31, 2016, 2015 and 2014, respectively. Foreign subsidiaries are subject
to income taxes of the countries in which they operate.
The Companies are subject to a number of different taxes based on income. The effective income tax rates
differed from the normal statutory tax rates for the following reasons for the years ended March 31, 2016,2015 and 2014:
2016

2015

2014

Normal Japanese 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 charges on goodwill
Changes in Japanese income tax rates
Other - net

33.1%

35.6%

38.0%

2.8
1.1
0.1
(1.2)
(0.2)
(0.1)

3.3
(2.9)
0.1
(2.6)
(0.2)
0.2

(3.0)
(1.0)

3.6
(9.4)
(0.5)
(3.3)
(0.1)
0.0
15.2
(10.7)(1.4)

Effective tax rates

31.6%

29.0%

37.5%

- 135 -

1.6
0.0

Amendments to the Japanese tax regulations were issued on March 31, 2014. As a result of theseamendments, the statutory income tax rate was reduced from 38.0% to 35.6% effective from the year
beginning April 1, 2014. Consequently, the statutory income tax rate utilized for deferred tax assets andliabilities expected to be settled or realized in the period from April 1, 2014 is 35.6%. The adjustment ofdeferred tax assets and liabilities for this change in the tax rate resulted in an increase of income taxes by ¥255
million and has been reflected in income taxes in the consolidated statements of income for the year ended
March 31, 2014.
Following the amendments described above, new amendments, the Act on the Partial Revision of the Income
Tax Act, etc. (Act No. 9 of 2015) and the Act on the Partial Revision of Local Tax Act, etc. (Act No. 2 of2015), were issued on March 31, 2015, and the corporate tax rate has been lowered starting from theconsolidated fiscal year beginning on and after April 1, 2015. Accordingly, from the end of the fiscal year
ended March 31, 2015, with respect to the Company and our major domestic subsidiaries, the effective
statutory tax rate used for the calculation of deferred tax assets and deferred tax liabilities has been changed
from the current 35.6% to 33.1% for the temporary differences which were expected to reverse during theconsolidated fiscal year beginning April 1, 2015 and to 32.3% for the temporary differences which are
expected to reverse in and after the consolidated fiscal year beginning April 1, 2016.
Due to this tax rate change, the deferred income taxes recognized in the fiscal year ended March 31, 2015
decreased by ¥1,209 million as a result of a reversal of the deferred tax assets and deferred tax liabilities.
Following the amendments described above, new amendments, the Act on the Partial Revision of the Income
Tax Act, etc. (Act No. 15 of 2016) and the Act on the Partial Revision of Local Tax Act, etc. and Related
Matters (Act No. 13 of 2016), were enacted in the Diet session on March 29, 2016, and the corporate tax rate islowered starting from the consolidated fiscal year beginning on or after April 1, 2016. Accordingly, withrespect to the Company and our major domestic subsidiaries, the effective statutory tax rate used for the
calculation of deferred tax assets and deferred tax liabilities has been changed from 32.3% to 30.9% for the
temporary differences which are expected to reverse during the consolidated fiscal year beginning April 1,2016 and the consolidated fiscal year beginning April 1, 2017, and to 30.6% for the temporary differences
which are expected to reverse in and after the consolidated fiscal year beginning April 1, 2018.
Due to this tax rate change, the deferred income taxes recognized in the fiscal year ended March 31, 2016
decreased by ¥454 million as a result of a reversal of the deferred tax assets and deferred tax liabilities.

- 136 -

The approximate effect of temporary differences and tax loss carryforwards that gave rise to deferred tax
balances as of March 31, 2016 and 2015 were as follows:
Millions of Yen
2016
DeferredDeferredTax
TaxAssetsLiabilities

2015
DeferredDeferredTax
TaxAssetsLiabilities

Allowance for returns
Allowance for doubtful receivables
Accruals not currently deductible
Inventory valuation
Accrued bonuses
Impairment charges on marketable securities andinvestments
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
Asset retirement obligation
Prepaid pension cost
Pension expense
Tangible fixed assets
Tax loss carryforwards
Intangible assets
Other temporary differences
Total
Valuation allowance

¥

¥

Total

¥ 7,275

638
17
139
964
1,038
1,118

737
43
136
1,058
1,067
1,273

¥

1,126
2,564

¥

9,395
818

11,411
961

167
86
743
277

215
204
771
253
1,872

2,825

415
1,439
2,017
577
9,635
(2,360)

1,200
2,731

430
1,214
3,300
2,017
203
17,995¥ 17,995

974
11,675(2,535)
¥

9,140

2,276
62
21,466¥ 21,466

The valuation allowance decreased by ¥175 million and ¥1,481 million for the years ended March 31, 2016
and 2015, respectively.
On November 28, 2014, the Company resolved a restructuring plan for its group organization. Based on the
resolution, most of the assets and liabilities of Lecien Corp., a wholly-owned subsidiary of the Company, weretransferred to a newly established subsidiary, and Wacoal Corp., another wholly-owned subsidiary of theCompany, merged Lecien Corp. with the remainder of their assets and liabilities on April 1, 2015.
In conjunction with the merger, deferred tax assets for temporary differences concerning the merged assets andliabilities and tax loss carryforwards were transferred from Lecien Corp. to Wacoal Corp., such deferred tax
assets which had been fully covered by a valuation allowance due to the poor operating results of Lecien Corp.
However, as a result of considering the change in the realizability of deferred tax assets triggered by the
resolution, the Company reversed ¥1,398 million of valuation allowance and recognized the same amount ofincome tax benefit for the year ended March 31, 2015.
The Companies reversed a part of its valuation allowance and utilized ¥189 million and ¥811 million of tax
loss carryforwards, and recognized tax benefits of ¥56 million and ¥246 million for the years ended March 31,
2016 and 2015, respectively.

- 137 -

As of March 31, 2016, certain subsidiaries had tax loss carryforwards, which are available to offset futuretaxable income of such subsidiaries, expiring as follows:
Millions of
Yen

Year ending March 31
2017
2018
2019
2020
2021
2022
2023
2024
2025
Thereafter

¥

351
321
543
786
95
4

Total

¥ 6,631

42
330
4,159

There was no portion of undistributed earnings of foreign subsidiaries and foreign corporate joint ventures
which was deemed to be permanently invested as of March 31, 2016 and 2015.
A reconciliation of beginning and ending amounts of unrecognized tax benefits was as follows:
2016

Millions of Yen
2015

2014

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

¥ 312
1
(13 )

¥ 296
16

¥ 313
133
(150)

Balance at the end of the year

¥ 300

¥ 312

¥ 296

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is ¥300
million, ¥312 million and ¥296 million as of March 31, 2016, 2015 and 2014, 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, 2016, 2015 and 2014 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 2014 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. The transfer pricing examinations of certain
domestic and U.S. subsidiaries' 2007 and 2010 fiscal years were completed.
18.

RELATED-PARTY TRANSACTIONSThe Companies purchase merchandise from numerous suppliers throughout the world, including certain
affiliated companies of the Companies. The Companies purchased merchandise from affiliated companies in
the amount of ¥2,468 million, ¥2,581 million and ¥2,375 million in the fiscal years ended March 31, 2016,2015 and 2014, respectively. The accounts payable to affiliated companies were ¥188 million and ¥142
million as of March 31, 2016 and 2015, respectively.

- 138 -

The Companies also sell supplies, materials and products to certain affiliated companies. Aggregate sales toaffiliated companies were ¥335 million, ¥386 million and ¥342 million in the fiscal years ended March 31,
2016, 2015 and 2014, respectively. The accounts receivable from affiliated companies were ¥97 million and¥70 million as of March 31, 2016 and 2015, respectively.
The Companies earn royalties from the use of the Wacoal Brand by certain affiliated companies. The amountof royalty revenue earned was ¥266 million, ¥288 million and ¥248 million in the fiscal years ended March 31,
2016, 2015 and 2014, respectively. Other accounts receivable from affiliated companies, which are included
in other current assets in the consolidated balance sheets, were ¥225 million and ¥219 million as of March 31,
2016 and 2015, respectively.
19.

EARNINGS PER SHARE
Basic net income attributable to Wacoal Holdings Corp. per share has been computed by dividing net income
attributable to Wacoal Holdings Corp. by the weighted-average number of common shares outstanding during
each year. Diluted net income attributable to Wacoal Holdings Corp. per share assumes the dilution that could
occur if share-based option to issue common stock were exercised.
The weighted-average number of common shares outstanding used in the computations of basic net income
attributable to Wacoal Holdings Corp. per share was 140,842,184 shares, 140,839,059 shares and 140,841,722
shares for the years ended March 31, 2016, 2015 and 2014, respectively. The weighted-average number ofdiluted common shares outstanding used in the computations of diluted net income attributable to Wacoal
Holdings Corp. per share was 141,255,241 shares, 141,203,998 shares and 141,135,395 shares for the years
ended March 31, 2016, 2015 and 2014, respectively.

20.

FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK
Fair Value of Financial Instruments
The carrying amounts and fair values of financial instruments as of March 31, 2016 and 2015 were as follows:
Millions of Yen
2016
2015
Carrying
Fair
Carrying
Fair
AmountValue
AmountValue
Assets:Marketable securities (Notes 3 and 21)
Investments (Notes 3 and 21)
Foreign exchange contracts (Note 21)
Total assets

¥

1,880
54,733¥

1,879
54,730¥2,387
58,668
209

¥

2,386
58,665209¥ 56,613¥ 56,609¥ 61,264¥ 61,260

Liabilities:
Foreign exchange contracts (Note 21)
Long-term debt including current portion¥ (297)(388)¥ (297)(389)¥ (4,779)¥ (4,780)

Total liabilities¥ (685)¥ (686)¥ (4,779)¥ (4,780)

There are investments in nonmarketable equity securities and debt securities for which there are no readily
determinable fair values. See Note 3 for further information. The carrying amounts of all other financial
instruments approximate their estimated fair values because of the short maturity of those instruments.

- 139 -

Foreign Exchange Contracts - The Companies are exposed to foreign currency exchange risks on thetransactions denominated in foreign currencies relating to its ongoing business operations. Such risks areprimarily managed by using foreign currency exchange contracts. The Companies measure forward currency
exchange contracts at the fair value since they are not designated as hedge.
Marketable Securities and Investments - Held-to-maturity debt securities are classified as marketablesecurities and investments as of March 31, 2016 and as investments as of March 31, 2015, respectively. The
fair value of these held-to-maturity debt securities are classified as Level 1. For all other investments included
in marketable securities and investments, see Notes 3 and 21.
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 input.
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. No single
customer constitutes 10.0% or more of the total sales, although the general retail customers that areconsolidated companies within the Aeon Group collectively accounted for approximately 8.8%, 8.9% and10.0% of the total sales in fiscal years ended March 31, 2016, 2015 and 2014, respectively.
21.

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

Level 2 -Inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for
identical or similar assets or liabilities in markets that are not active, inputs other than quoted
prices that are observable, and inputs that are derived principally from or corroborated byobservable market data by correlation or other means.

Level 3 -Inputs are unobservable.

- 140 -

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, 2016 and 2015 were as
follows:
2016

Level 1

Assets:Marketable securities:
Municipal bonds
Corporate bonds
Mutual funds
Total marketable securities
Investments:
Equity securities¥ 53,925

Total assets¥ 53,925¥

Liabilities:
Derivative instruments:
Foreign exchange contracts
Total liabilities

2015

Level 1

Assets:Marketable securities:
Municipal bonds
Corporate bonds
Mutual funds
Total marketable securities
Investments:
Equity securities
Derivative instruments:
Foreign exchange contracts
Total assets

Millions of Yen
Level 2
Level 3

10
395
1,361
1,766

¥

10
395
1,361
1,766
53,925¥ 1,766¥ 55,691¥ (297)¥(297 )¥ (297)¥(297 )

Millions of Yen
Level 2
Level 3

¥

10
501
1,390
1,901

¥ 58,048¥ 58,048

Total

Total

¥

10
501
1,390
1,901
58,048209

209¥ 2,110¥ 60,158

Marketable securities and investments presented in Level 1 are valued using an unadjusted quoted market pricein active markets with sufficient volume and frequency of transactions. Bonds presented in Level 2 are valuedby the financial institution using quoted market price for identical instruments in markets that are not active
and mutual funds presented in Level 2 are valued by the financial institution based on quoted prices in bothactive and inactive market for identical instruments which comprise funds.
As presented in Note 3, the Companies recorded impairment charges on marketable securities and investments
if a decline in fair value of marketable securities and investments is determined to be other than temporary.
Derivative instruments are composed of foreign currency exchange contracts. Financial instruments presented
in Level 2 are valued using quotes obtained from third parties.
The changes in the fair value of the foreign currency exchange contracts are recorded in earnings, since theforeign currency exchange contracts are not designated as a hedge. The Companies recognized a gain of¥(506) million, ¥192 million and ¥5 million in other - net of other income (expenses) in the years ended March
31, 2016, 2015 and 2014, respectively.

- 141 -

The Companies recorded the derivative instruments at fair value in the consolidated balance sheets as othercurrent liabilities of ¥297 million and as other current assets of ¥209 million as of March 31, 2016 and 2015,
respectively.
Assets Measured at Fair Value on a Nonrecurring Basis
Assets measured at fair value on a nonrecurring basis as of March 31, 2016 and 2015 were as follows:
Millions of Yen
2016

Level 1

Level 2Land
Buildings and building
improvements
Machinery and equipment

Level 3

Total

Total
Losses¥133¥133¥ (233)

¥0
¥0

¥0
¥0

(8)
(15)
¥ (256)

Millions of Yen
2015

Level 1

Goodwill (Note 8)
Trademarks (Note 8)

Level 2

Level 3

Total

Total
Losses¥4,325
1,994¥4,325
1,994¥ (4,845)(1,176)¥ (6,021)

During the fiscal year ended March 31, 2016, the Company categorized a certain asset group as real estate forrent. The Company performed an impairment analysis as of March 31, 2016 and determined that the fair valueof the real estate was below its carrying amount. Accordingly, the Company reduced the carrying amountfrom ¥366 million to ¥133 million for land and from ¥8 million to ¥0 million for buildings and structures,
respectively. The fair value is measured mainly based on the real estate appraisal value. The impairment
charge on the long-lived assets of ¥241 million was included in an operating expense of Wacoal Business(Domestic) in the segment information.
As of March 31, 2015, goodwill with a carrying amount of ¥9,170 million was written down to its implied fairvalue of ¥4,325 million, resulting in an impairment charge of ¥4,845 million, which is included in earnings forthe year ended March 31, 2015. The impairment arose due to the decline in its fair value, which was mainly
caused by a downturn in consumption due to general market conditions. To measure the fair values of thereporting units, the Companies used the expected present value of future cash flows and incorporated relevant
unobservable inputs, such as management's internal assumptions about future cash flows and appropriately
risk-adjusted discount rates, which reflected the 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.

- 142 -

Trademarks with a carrying amount of ¥3,170 million as of March 31, 2015, were written down to their fairvalues of ¥1,994 million, resulting in recognition of an impairment charge of ¥1,176 million for the year ended
March 31, 2015. The impairment arose due to the decline in their fair value, which was mainly caused by adownturn in consumption due to general market conditions. To measure the fair value of the trademarks, theCompanies used the relief-from royalty method and incorporated relevant unobservable inputs, such as
management's internal assumptions about future cash flows, the rate of royalty, and appropriately risk-adjusted
discount rate, which reflected the management's estimate of assumptions that market participants would use inpricing 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 0%. The management's cash flow projections were developed
using estimates for expected future revenue growth rates, profit margins and working capital levels of thereporting units. The rate of royalty used for the valuation was based on the actual royalty ratio used intransactions. The risk-adjusted discount rate represents a weighted-average cost of capital (WACC) adjusted
for inherent risk spread.
There were no significant assets or liabilities that were measured at fair value on a nonrecurring basis as ofMarch 31, 2014.
Valuation process:
The valuation process involved in Level 3 measurements for applicable asset and liability 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 experts of valuation to assist us in the valuation process
for certain assets over a specific amount, and their results of valuations are reviewed by the responsible
personnel. All the valuations including those performed by the external experts are reviewed and approved by
the management of the Company before being recorded in the general ledger.
Quantitative information regarding Level 3 fair value measurements:
Information about valuation techniques and significant unobservable inputs used for Level 3 assets measured
at fair value for the year ended March 31, 2015 is as follows:

March 31, 2015

Millionsof YenFair
Value

Trademarks¥1,994

Valuation
Technique
Relief-fromroyalty method- 143 -

Principal Unobservable
Input

Range

Discount rate

7.3% - 11.3%

Royalty rate
Short-term revenue growth
rates(within five years)
Perpetuity growth rate (overfive years)

3.0% - 4.0%
2.3% - 5.3%
0%

22.

SEGMENT INFORMATION
Operating Segment Information
The Companies have three reportable segments: "Wacoal business (domestic)," "Wacoal business (overseas)," and "Peach John," 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 to allocate the Companies' resources and in assessing their performance. The accounting policies used for these reportable segments are thesame as those described in the summary of significant accounting policies in Note 1.
"Wacoal business (domestic)" segment primarily produces and sells innerwear (consisting of foundation, lingerie, nightwear and children's innerwear), outerwear, sportswear andhosiery. "Wacoal business (overseas)" segment produces and sells innerwear (consisting of foundation, lingerie, nightwear and children's innerwear), outerwear, sportswear andhosiery. "Peach John" segment produces and sells innerwear (consisting of foundation, lingerie, nightwear), outerwear, and other textile-related products, which are sold under the"Peach John" brand. "Other" segment produces and sells innerwear (consisting of foundation, lingerie, nightwear and children's innerwear), outerwear, sportswear, other textilerelated products, mannequins and construction of stores and interior design.
Information about operating results and assets for each segment as of and for the years ended March 31, 2016, 2015 and 2014 is as follows:
Millions of Yen
2016
Net sales:
External customers
Intersegment
Total
Operating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Total
Operating income
Total assets and capital expenditures:
Total assets
Capital expenditures

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John

Other

Elimination¥ 120,570
1,427
121,997¥ 51,869
8,595
60,464¥ 11,190
775
11,965¥ 19,288
6,102
25,390¥ (16,899)(16,899)

110,144
3,043
113,187
8,810

54,711
1,320
56,031
4,433

11,442
265
11,707258

24,839187
25,026364(16,899)

254,269
6,977

80,580
1,694

11,959245

18,866
62(72,820)

292,854
8,978

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John

Other

Elimination

Consolidated¥ 112,203
1,906
114,109¥ 48,107
8,592
56,699¥ 11,626
650
12,276¥ 19,829
5,046
24,875¥ (16,194)(16,194)

102,789
2,876

50,444
1,479

24,469248(16,194)

105,665
8,444

51,923
4,776

12,080
471
4,845
1,176
18,572(6,296)

24,717
158(16,194)

261,467
3,338

78,143742

11,748300

20,78998(71,875)

Consolidated¥ 202,917(16,899)

202,917
184,237
4,815
189,052
13,865

Millions of Yen
2015
Net sales:
External customers
Intersegment
Total
Operating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Impairment charges on goodwill (Note 8)
Impairment charges on other intangible assets (Note 8)
Total
Operating income (loss)
Total assets and capital expenditures:
Total assets
Capital expenditures- 144 -¥ 191,765
191,765
173,588
5,074
4,845
1,176
184,683
7,082
300,2724,478

Millions of Yen
2014
Net sales:
External customers
Intersegment
Total
Operating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Total
Operating income

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John

Other

Elimination¥ 118,085
2,149
120,234¥ 43,636
8,049
51,685¥ 12,482
455
12,937¥ 19,578
5,406
24,984¥ (16,059)(16,059)

108,015
2,935
110,950
9,284

46,4101,238
47,648
4,037

12,270584
12,85483

24,249279
24,528456(16,059)244,502
2,210

69,352621

18,026296

20,070337(79,962)

Total assets and capital expenditures:
Total assets
Capital expenditures

Consolidated¥ 193,781(16,059)

193,781
174,885
5,036
179,921
13,860271,988
3,464

The sum of the operating income of the reportable segments is consistent with the operating income on the consolidated statements of income. For a reconciliation from operating
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 income (loss) represents net sales less operating costs and expenses.
Products and Service Information
Net sales information by product and service for the years ended March 31, 2016, 2015 and 2014 is as follows:

Innerwear:
Foundation and lingerieNightwear
Children's underwear
Subtotal
Outerwear/Sportswear
Hosiery
Other textile goods and related products
Others
Total

2016

Millions of Yen
2015

2014

¥ 151,166
10,098
1,386
162,650¥ 142,681
9,514
1,373
153,568¥ 144,322
9,301
1,475
155,098¥¥¥

19,074
2,178
7,161
11,854¥ 202,917

16,2272,437
7,616
11,917¥ 191,765

16,954
2,252
8,577
10,900¥ 193,781

Geographic Information
Information by major geographic area as of and for the years ended March 31, 2016, 2015 and 2014 is as follows:

Net sales:Japan
Asia and Oceania
Americas and Europe
Consolidated
Long-lived assets:Japan
Asia and Oceania
Americas and Europe
Consolidated

2016

Millions of Yen
2015

2014

¥ 150,673
17,90634,338¥ 143,250
16,261
32,254¥ 149,715
14,871
29,195¥ 202,917¥ 191,765¥ 193,781¥ 46,136
4,490
3,312

¥ 43,200
2,998
2,990

¥ 43,446
2,894
2,638

¥ 53,938¥ 49,188¥ 48,978- 145 -

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 of sellers.
Long-lived assets represent property, plant and equipment.
23.

SUBSEQUENT EVENTS(Transfer of property plant and equipment)
The Board of Directors resolved at the meeting held on January 29, 2016 to transfer property, plant andequipment (land) as described below, and accordingly, the delivery of land was completed on April 27, 2016.
a.

Reason for Transfer
The Companies have decided to transfer the land, the site of the Nagoya branch, to make effective use ofmanagerial resources because it is unlikely that the Companies will use this site for our business in the
future.

b.

c.

Details of Subject Transferred Asset
Details of Subject Asset:

Land (1,370 m2)

Location:

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

Current Status:

Leased for parking spaces

Carrying Amount:¥295 million

Transfer Price:¥4,149 million

Outline of Transferee
Kabushiki Kaisha Nihon Ceremonyd.

e.

Schedule of Transfer
Resolution of the Board Meeting:January 29, 2016

Execution of Agreement:

February 12, 2016

Transfer of Land:

April 27, 2016

Impact on Business Results
In connection with the transfer of the subject property, plant and equipment the Company will record
approximately ¥3.8 billion of gain on sale of property, plant and equipment during the consolidated firstquarter of the fiscal year ending March 2017.

- 146 -

(Purchase of Treasury Stock)
On May 27, 2016, the Board of Directors resolved to purchase treasury stock with the specific purchasing
method as described below pursuant to the provisions of Paragraph 1, Article 156 of the Companies Act,
which are applied by replacing the provisions of Paragraph 3, Article 165 of the Companies Act, and carriedout as follows.
a.

Reason for Purchase:

To improve capital efficiency and to implement ourcapital policy with increased flexibility tailored to thebusiness environmentb.

Type of Shares to Be Purchased:

Common stock of the Companyc.

Total Number of Shares to Be Purchased:

2,300,000 shares (at maximum)d.

Purchase Period:

From June 2, 2016 through September 30, 2016e.

Total Amount to Be Purchased:¥3,000 million (at maximum)f.

Method of Purchase:

Market purchase through trust method(Dividend Declaration)
On May 9, 2016, the Board of Directors resolved to pay a cash dividend of ¥165 per 5 shares of common stock
to holders of record as of March 31, 2016 (aggregate amount of ¥4,648 million).

******- 147 -

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

Office for handling businessTransfer agent

March 311,000 shares(Special Account)
Osaka Securities Transfer Section
Mitsubishi UFJ Trust and Banking Corporation
6-3, Fushimi 3-chome, Chuo-ku, Osaka
Securities Transfer Section
Sumitomo Mitsui Trust Bank, Limited
1-10, Nikkocho, Fuchu-shi, Tokyo (Note 2)(Special Account)
Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Forwarding office―――Handling charge forpurchase and Sale

Free of charge

Method of public noticeSpecial benefit forshareholders(Notes)1.

2.

Public notice of the Company shall be in electronic form; provided that, where public
notice cannot be provided electronically due to an accident or unavoidable event, it shallbe 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 1,000 shares or more, but less than 3,000 shares:
Wacoal Essence Check worth JPY3,000 shall be presented twice a year.
- To shareholders holding 3,000 shares or more:
Wacoal Essence Check worth JPY5,000 shall be presented twice a year.
(ii) Shareholder special discount shall be made for Wacoal products by means of catalogue
sales as follows:- Wacoal catalogue shall be sent to those shareholders who want them and 20%
discount shall be made for the products ordered for purchase by such shareholders.

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
189 of the Companies Act, the put rights pursuant to the provisions of Paragraph 1, Article 166 of the same law,
the right to receive an allocation of share offerings and stock acquisition rights in proportion to the number ofshares held, and the right to request the sale of additional shares not constituting one unit.
For those shareholders of the Company who held shares of Lecien Corporation at the special account as ofAugust 16, 2009 (i.e., the day preceding the effective date of the share exchange between the Company andLecien Corporation), Sumitomo Mitsui Trust Bank, Limited shall act as an account management institution of
the special account.

- 148 -

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 fiscal year ended
March 31, 2016, to the filing date of the Annual Securities Report.
(1） Annual Securities Report andthe attachments thereto, andFiscal Year
(67th Fiscal Year)

From April 1, 2014
to March 31, 2015

Confirmation Letter

Filed with the Director of the
Kanto Local Finance Bureau on
June 26, 2015(2） Internal Control Report and theattachments thereto

Filed with the Director of the
Kanto Local Finance Bureau on
June 26, 2015(3） Quarterly Report andConfirmation Letter(First quarter of 68h
Fiscal Year)

From April 1, 2015
to June 30, 2015

(Second quarter of 68th From July 1, 2015
Fiscal Year)to September 30, 2015
(Third quarter of 68th
Fiscal Year)(4） Extraordinary Report

From October 1, 2015
to December 31, 2015

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

Filed with the Director of the
Kanto Local Finance Bureau on
August 13, 2015
Filed with the Director of the
Kanto Local Finance Bureau on
November 12, 2015
Filed with the Director of the
Kanto Local Finance Bureau on
February 12, 2016
Filed with the Director of the
Kanto Local Finance Bureau on
June 29, 2015

Corporate Affairs, etc.
Extraordinary Report on the Change in Specified
Subsidiary pursuant to Item 3, Paragraph 2, Article 19

Filed with the Director of the
Kanto Local Finance Bureau onof the Cabinet Office Ordinance Concerning

February 4, 2016

Disclosure of Corporate Affairs, etc.
(5） Amendment to Extraordinary
ReportAmendment to the Extraordinary Report filed on June29, 2015 on the Results of the Exercise of Voting

Filed with the Director of the
Kanto Local Finance Bureau on

Rights at General Meeting of Shareholders

June 30, 2015

- 149 -

Part II 【Information on Guarantors, etc., for the Company】
Not applicable.

- 150 -

INDEPENDENT AUDITORS' REPORTTo the Board of Directors and Stockholders of Wacoal Holdings Corp.
Kyoto, Japan
We have audited the accompanying consolidated financial statements of Wacoal Holdings Corp. and its subsidiaries,(the "Company") which comprise the consolidated balance sheets as of March 31, 2016 and 2015, and the related
consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the
period ended March 31, 2016 (all expressed in Japanese yen), and the related notes to the consolidated financial
statements.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements inaccordance with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States of America.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditors' judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparationand fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.

- 151 -

Audit Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position of Wacoal Holdings Corp. and its subsidiaries as of March 31, 2016 and 2015, and the results of its
operations and its cash flows for each of the three years in the period ended March 31, 2016, in accordance withaccounting principles generally accepted in the United States of America.
Convenience Translation
Our audits also comprehended the translation of the Japanese yen amounts into U.S. dollar amounts and, in our
opinion, such translation has been made in conformity with the basis stated in Note 2. The translation of thefinancial statement amounts into U.S. dollars has been made solely for convenience of readers outside of Japan.
Report on Management's Report on Internal Control over Financial Reporting
Notwithstanding the second paragraph of the "Auditors' Responsibility" section, we have performed an audit ofmanagement's report on internal control over financial reporting ("ICFR") under the Financial Instruments andExchange Act of Japan. A translated copy of management's report on ICFR along with a translated copy of ourreport is included within this Annual Securities Report as information for readers.

DELOITTE TOUCHE TOHMATSU LLC
June 29, 2016

- 152 -NOTE TO READERS:
The 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 the attestation standards establishedby 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 the attestation standards establishedby 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 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 of assessment of internal control over business process, we used a measure of approximately
70% of total assets on a consolidated basis and income before income taxes on a consolidated basis for the selectionof significant business units.
(TRANSLATION)
INDEPENDENT AUDITORS' REPORT
June 29, 2016
To the Board of Directors of Wacoal Holdings Corp.
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Fumihiko Kimura
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Koichiro Tsukuda
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:Seiichiro Nakashima
Audit of Financial Statements
Pursuant to the first paragraph of Article 193-2 of the Financial Instruments and Exchange Act, we have audited theconsolidated financial statements included in the Financial Section, namely, the consolidated balance sheet as ofMarch 31, 2016 of Wacoal Holdings Corp. and its consolidated subsidiaries (the "Company"), and the consolidated
statement of income, comprehensive income, equity and cash flows for the fiscal year from April 1, 2015 to March
31, 2016, and a summary of significant accounting policies and other explanatory information.

- 153 -

Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements inaccordance with accounting principles generally accepted in the United States of America pursuant to the thirdparagraph of the Supplementary Provisions of the Cabinet Office Ordinance for Partial Amendment of theRegulations for Terminology, Forms and Preparation Methods of Consolidated Financial Statements (No. 11 of the
Cabinet Office Ordinance in 2002), 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.
Auditors' Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements arefree from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditors' judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation andfair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Audit Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position of Wacoal Holdings Corp. and its consolidated subsidiaries as of March 31, 2016, and the resultsof their operations and their cash flows for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Audit of Internal Control
Pursuant 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 the Company as of March 31, 2016.
Management's Responsibility for the 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. There is a possibility that misstatements may not becompletely prevented or detected by internal control over financial reporting.
Auditors' Responsibility
Our responsibility is to express an opinion on management's report on internal control based on our internal control
audit. We conducted our internal control audit in accordance with auditing standards for internal control overfinancial reporting generally accepted in Japan. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether management's report on internal control is free from material misstatement.

- 154 -

An internal control audit involves performing procedures to obtain audit evidence about the results of theassessment of internal control over financial reporting in management's report on internal control. The
procedures selected depend on the auditors' judgment, including the significance of effects on reliability offinancial reporting. An internal control audit includes examining representations on the scope, procedures andresults 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Audit Opinion
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. and its consolidated
subsidiaries as of March 31, 2016 is effectively maintained, presents fairly, in all material respects, the resultsof the assessment of internal control over financial reporting in accordance with assessment standards forinternal control over financial reporting generally accepted in Japan.
Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure is required
under the provisions of the Certified Public Accountants Act.

The above represents a translation, for convenience only, of the original report issued in the Japanese language.

- 155 -

【Cover】【Document Filed】

Internal Control Report【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, 2016

【Company Name】

KABUSHIKI KAISHA WACOAL HOLDINGS【Company Name in English】

WACOAL HOLDINGS CORP.

【Position and Name of Representative】

Yoshikata Tsukamoto, President and Representative Director【Position and Name of Chief Financial
Officer】

Masaya Wakabayashi, Director and Vice President【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)- 156 -

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
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 approximately measure for the scopeof assessment 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】
Yoshikata Tsukamoto, President and Representative Director and Masaya Wakabayashi, Director and Vice President,
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 withthe basic framework for internal control set forth in "The Standards and Practice Standards for Management
Assessment and Audit of Internal Control Over Financial Reporting" published by the Business Accounting Council.
The internal control is designed to achieve its objectives to the extent reasonable through the effective function andcombination 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, 2016. 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 assessment of internal control over financial reporting for the Company, as wellas its consolidated subsidiaries and equity-method affiliated companies, from the perspective of the materiality that
may affect the reliability of our financial reporting. The materiality that may affect the reliability of the financial
reporting is determined taking into account the materiality of quantitative and qualitative impacts. We confirmedthat we had reasonably determined the scope of assessment of internal controls over business processes in light of theresults of assessment of company-level controls conducted for the Company, its consolidated subsidiaries andequity-method affiliated companies. We did not include those consolidated subsidiaries and equity-method affiliatedcompanies which do not have any quantitatively or quantitatively material impact on the consolidated financial
statements in the scope of assessment of company-level controls.

- 157 -

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 the process-level controls.
At the selected significant business units, we included, in the scope of assessment, those business processes leading tosales or accounts receivable and inventories, as significant accounts that may have a material impact on the businessobjectives of us. Further, not only at selected significant business units, but also at other business units, we added to thescope assessment, as business processes having greater materiality considering their impact on the financial reporting,(1) those business processes relating to greater likelihood of material misstatements and significant account involving
estimates and the management's judgment, and (2) those business processes relating to businesses or operations dealing
with 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 as ofMarch 31, 2016.
4.【Supplementary Matters】
Not applicable.
5.【Special Information】
Not applicable.

- 158 -