Annual Securities Report(The 66th Fiscal Year)
From April 1, 2013 to March 31, 2014

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

E00590

The 66th Fiscal Year (from April 1, 2013 to March 31, 2014)

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 27, 2014.
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 own specialty retail stores and achieve profitable operations at thesestores; our ability to further develop our catalogue and Internet sales capabilities; our ability to effectively manage ourinventory levels; our ability to reduce costs; our ability to recruit and maintain qualified personnel; effects of irregularweather events on our business and performance; risks related to conducting our business internationally; risks fromacquisitions 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; and the impact of any natural
disaster or epidemic on our business. Forward-looking statements are contained in the sections 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 66th Fiscal Year
【Cover】

1

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】…………………………………………………………………………………….

6

II.

III.

IV.

V.
VI.

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

8

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

10【Business Overview】……………………………………………………………………………………………

11

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

11

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

15

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

16

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

20

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

23

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

24

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】………………………………………………………

71

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

72

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

72

5.【Directors and Audit & Supervisory Board

Members】……………………………………………………

73

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

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

91

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

91【Stock-Related Administration for the Company】……………………………………………………………... 133

VII. 【Reference Information on the Company】……………………………………………………………………... 134
1.【Information on the Parent Company】………………………………………………………………………. 134
2.【Other Reference Information】……………………………………………………………………………… 134
Part II【Information on Guarantors, etc., for the Company】…………………………………………………………... 135

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 27, 2014

【Fiscal Year】

The 66th Fiscal Year (from April 1, 2013 to March 31, 2014)【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】

Nobuhiro Matsuda, General Manager of Accounting Department【Contact Address】

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

Kyoto (075) 682-1007【Contact Person】

Nobuhiro Matsuda, 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

62nd

63rd

64th

65th

66th

Year-EndMarch 2010

March 2011

March 2012

March 2013

March 2014

163,548

165,548

171,897

180,230

193,781

Operating income

3,829

4,401

10,377

8,499

13,860Net income attributable to
Wacoal Holdings Corp.

2,475

2,785

6,913

7,880

10,106Comprehensive income

7,538

6,862

19,34922,749Total shareholders’ equity

171,860△1,186

167,480

171,496

186,646

205,106

Total assets

222,889

215,276

221,098

254,536

271,988

Sales

Shareholders’ equity per share(yen)

1,217.15

1,189.08

1,217.57

1,325.19

1,456.32

Net income per share attributable
to Holdings Corp.

(yen)

17.51

19.73

49.08

55.95

71.75

Diluted net income attributable to
Wacoal Holdings Corp. per share

(yen)

17.50

19.72

49.02

55.86

71.61

Shareholders’ equity ratio

(%)

77.1

77.8

77.6

73.3

75.4

Return on equity

(%)

1.5

1.6

4.1

4.4

5.2

Price earnings ratio(times)

65.40

56.56

19.99

18.72

14.68

9,463

10,441

10,06012,3098,949△3,573△703△3,467△23,520

1,658

Net cash provided by operating
activities
Net cash provided by (used in)investment activities
Net cash provided by (used in)financing activities
Cash and cash equivalents at endof yearNumber of employees[Average number of part-time
employees, etc.](Notes)(person)△5,363△4,96522,32826,316

15,686[1,560]△2,824

5,379△5,55429,98524,51430,65816,013

16,524

18,65018,912[1,411][1,319][1,259][1,391]

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

62nd

63rd

64th

65th

66th

Year-EndMarch 2010

March 2011

March 2012

March 2013

March 2014

Operating revenue

6,968

7,662

7,874

8,705

8,967

Ordinary income

3,106

4,000

3,981

4,571

5,301

Net income

2,887

3,432

3,756

4,837

4,955

Common stock

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

143,378

143,378

143,378

143,378

Net assets

142,459

142,451

143,380

144,513

145,605

Total assets

146,898

146,121

146,341

174,280

177,411

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

1,006.55

1,010.29

1,016.54

1,024.27

1,031.57

Dividends per share(interim dividends per
share)

(yen)

20.00
(－)

20.00
(－)

28.00
(－)

28.00
(－)

33.00
(－)

Net income per share

(yen)

20.39

24.30

26.67

34.34

35.18

Diluted net income per
share

(yen)

20.38

24.28

26.63

34.28

35.10

Shareholders’ equity ratio

(%)

96.9

97.3

97.8

82.7

81.8

Return on equity

(%)

2.0

2.4

2.6

3.3

3.4

Price earnings ratio(times)

57.28

43.12

36.78

29.49

29.93

Dividend payout ratio

(%)

98.0

82.2

104.9

81.5

93.7

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

69

63

69

71

80

[－]

[－]

[－]

[－]

[－]

1.

Operating revenue does not include consumption taxes, etc.

2.

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.

-3-

2. 【History】
June 1946
November 1949

Wako Shoji founded by late Koichi Tsukamoto
Wako Shoji Corp. established with 1 million yen in capital (Nakagyo-ku, Kyoto)

June 1951

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

Head office relocated to 103 Shichijo Goshono-uchi, Minami-machi, Shimogyo-ku, Kyoto

November 1957

Company name changed to Wacoal Inc.

November 1959

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

June 1964

Company name changed to Wacoal Corp.

September 1964

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

November 1967

Head office relocated to 29 Nakajima-cho, Kisshoin, Minami-ku, Kyoto

August 1970

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

October 1970

A joint venture company, THAI WACOAL CO., LTD. (current THAI WACOAL PUBLIC CO., LTD.)established in Thailand

October 1970

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

January 1971

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

April 1978

Singapore office (current WACOAL SINGAPORE PRIVATE LTD.) opened

August 1979
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
Acquired shares from Nanasai Co., Ltd., a subsidiary of the Company, by way of capital increase through third-

February 1983

party allocation
WACOAL HONG KONG CO., LTD., established as an overseas subsidiary

December 1983

Acquired all shares in Teenform Inc., an American corporation (current WACOAL AMERICA, INC.)

December 1983

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

October 1985

Construcution of Spiral Building completed (Minato-ku, Tokyo)

January 1986

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

April 1989

PHILIPPINE WACOAL CORP. established as joint venture company

January 1990

WACOAL FRANCE S.A. established as an overseas subsidiary (current WACOAL EUROPE SAS)

January 1991

INDONESIA WACOAL CO., LTD. (current PT.INDONESIA WACOAL), established as a joint venturecompany

April 1993

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

January 1995
June 1997
August 1999
December 2000

Guangdong Wacoal Inc. established as an overseas subsidiary
VIETNAM WACOAL CORP. established as an overseas subsidiary
New head office building completed (29, Nakajima-cho, Kisshoin, Minami-ku, Kyoto)
Joint venture agreement for Beijing Wacoal Co., Ltd. (current Wacoal China Co., Ltd.), canceled andJanuary 2002

reestablished as Beijing Wacoal Co., Ltd., a wholly owned subsidiary
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-4-April 2012

Eveden Group Limited (“Eveden”) became a wholly owned Wacoal subsidiary through the acquisition of all of
the issued and outstanding shares of Eveden-5-

3. 【Description of Business】
Our corporate group consists of 1 holding company (Wacoal Holdings Corp.), 56 subsidiaries, and 10 affiliates, and is principally
engaged in the manufacturing and wholesale distribution of innerwear (primarily women’s foundation wear, lingerie, nightwear, andchildren’s underwear), outerwear, sportswear, and other textile goods and related products, as well as the direct sale of certain
products to consumers. Our corporate group also conducts business in the restaurant, culture, service, and interior design businesses.
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 12 companies, including our subsidiaries and affiliates in Japan.
Among 11 subsidiaries and 1 affiliate, Wacoal Corp. engages in the planning/designing for the above-mentioned products,
procurement of materials for the above-mentioned products, commercialization of the semifinished products purchased from thesewing companies in Japan and overseas and other business associates after inspection, and distribution to the end consumers
through department stores, general merchandisers, and other general retailers in Japan, as well as direct retail stores and distributors
in Japan and overseas. Each of our 4 apparel manufacturing companies, including Kyushu Wacoal Manufacturing Corp., receives
supply of raw materials from Wacoal Corp., conducts sewing and processing of innerwear and sportswear, and delivers thesemifinished products to Wacoal Corp. We have 3 sales companies, including Une Nana Cool Corp., which conduct retail sales of
innerwear and outerwear products, which are mainly supplied from our group companies.
(2) Wacoal Business (Overseas)
This segment is composed of 37 companies, including our overseas subsidiaries and affiliates.
Among our 30 overseas subsidiaries, 10 companies are located in North and Central America; 7 companies are located inEurope; and 13 companies are located in Asia/Oceania. 7 overseas affiliates are located in Asia.
Among our 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 the end consumers through local department stores and specialty retail stores. In addition, Eveden Inc, a sales
company, distributes innerwear products, which are mainly supplied from Eveden Timex, Eveden Limited, and Eveden Huit.
Among our 7 overseas subsidiaries in Europe, Eveden Huit SAS designs and markets innerwear products. Eveden Limited
distributes products to end consumers through department stores and specialty retail stores mainly in the United Kingdom.
Our 5 subsidiaries and 4 affiliates in Asia/Oceania are manufacturing and sales companies, which distribute products to endconsumers through their local department stores and specialty retail stores, and also distribute a part of their products to Wacoal
Corp. and the sales companies in Asia. Our sales companies in Asia/Oceania include 5 subsidiaries, including Wacoal Singapore
Private Ltd., Eveden Israel Ltd., and 1 affiliate. These sales companies distribute innerwear products, which are mainly supplied
from the group companies, to their local department stores, specialty retail stores and direct retail stores. Our 3 remaining
subsidiaries include a company that procures materials for subsidiaries and/or affiliates in Asia, and 2 investment companies whichmake investments in the local affiliates that manufacture and sell innerwear.
(3) Peach John BusinessThis segment is composed of 4 companies, including our domestic and overseas subsidiaries. The 2 domestic subsidiaries and2 overseas subsidiaries are sales companies, and Peach John and one of its subsidiaries mainly engage in the retail sales of productsthat are independently supplied mainly from nongroup companies.
(4) Other
This segment is composed of a total of 13 companies, including 5 domestic subsidiaries, 6 overseas subsidiaries, 1 domestic
affiliate, and 1 overseas affiliate.
Among 5 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 3 remaining subsidiaries include an apparel manufacturing
company and 2 other subsidiaries which engage in other textile-related business, real estate leasing business, and other business.
Overseas, 6 subsidiaries are located in Asia.
Three of our subsidiaries in Asia are apparel manufacturing companies. The other 3 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:-6-

Consumer/Client(Other Textile Related: 3 companies)(Apparel Manufacturing: 4 companies)
Kyushu Wacoal Manufacturing Corp.
Hokuriku Wacoal Sewing Corp.
Niigata Wacoal Sewing Corp.
Torica Inc.

Wacoal Distribution Corp.
Out of 2 other companies,
1 equity method affiliate(Manufacturing and Sales: 1 company)
Wacoal Corp.

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

Wacoal Business (Domestic)

Peach John Business

Wacoal Business (Overseas)

Other(North/Central America: 10 companies)
WACOAL INTERNATIONAL CORP. (U.S.)(Sales: 4 companies)
Peach John Co., Ltd.

WACOAL AMERICA, INC.
WACOAL DOMINICANA CORP.
3 other companies(U.S.)(Dominican Republic)
EVEDEN INC(U.S.)(Lecien: 8 companies)
Lecien Corporation
LECIEN (VIETNAM) CO., LTD.
(Vietnam)
Out of 6 other companies,
1 equity method affiliate

6 other companies(Europe: 7 companies)
WACOAL EVEDEN LIMITEDEVEDEN LIMITEDWACOAL EUROPE SAS.

(U.K.)(U.K.)(France)4 other companies(Asia/Oceania: 20 companies)
Wacoal Investment Co., Ltd.
(Taiwan)Wacoal China Co., Ltd.
(China)WACOAL SINGAPORE PRIVATE LTD.
(Singapore)
WACOAL HONG KONG CO., LTD.
(Hong Kong)
Guangdong Wacoal Inc.
(China)WACOAL INTERNATIONAL HONG
KONG CO., LTD.
(Hong Kong)
EVEDEN TIMEX LIMITED(Sri Lanka)*Shinyoung Wacoal Inc.
(South Korea)*Taiwan Wacoal Co., Ltd.
(Taiwan)*THAI WACOAL PUBLIC CO., LTD．
(Thailand)
Out of 10 other companies,
4 equity method affiliates

Wacoal Holdings Corp. (holding company)
Without mark: a consolidated subsidiary*: an equity method affiliate-7-(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 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
Wacoal Corp.

Minami-ku, Kyoto

5,000

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

100

5Rent of officebuilding

Peach John Co., Ltd.

Shibuya-ku, Tokyo

90

Peach John Business(Sale of garments)

100

3

－

100

3

Rent of storage
building

1

Rent of officebuilding－

Same as above－

Same as above

3

Same as above

2

－

3

－

－

－

100

3

－

－

－

－

－

2

－

3

－

1

－

4

－

1

－

3

－

3

－

2

－

1

－

4

－

1

－

Lecien Corp.

Minato-ku, Kyoto

90

Other
(Manufacture and sale of garments
and other textile-related products)

Kyushu Wacoal Manufacturing Corp.

Unzen-shi,
Nagasaki70

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

Niigata Wacoal Sewing Corp.

Nishikan-ku,
Niigata

50

Same as above

Torica Inc.

Ibaraki-shi, Osaka

92

Same as above

498

Other
(Manufacture and sale of mannequinsand display fixtures; interior designand construction work of stores)

100
(100）

100
(100）

57
(57）

99

Nanasai Co., Ltd.

Minami-ku, Kyoto*1
WACOAL INTERNATIONAL CORP.

New York, USA

20,000thousandUSD

WACOAL AMERICA, INC.

New York, USA

2,062 thousand
USD

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

WACOAL DOMINICANA CORP.

Santo Domingo,
Dominican
Republic

7 thousand
USD

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

WACOAL EVEDEN LIMITED

Northamptonshire,UK

175 thousand
GBP

Wacoal Business (Overseas)(Investment in affiliates)

EVEDEN LIMITED

Northamptonshire,UK

250 thousand
GBP

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

100

Saint-Denis, France

8 thousand
EUR

Wacoal Business (Overseas)(Sale of garments)

100

WACOAL EUROPE SAS

Wacoal Business (Overseas)(Investment and funding in U.S.
affiliates)

100
(100）

100
(100）

100
(100）

(100）
(100）

80

WACOAL HONG KONG CO., LTD.

Hong Kong

3,000 thousand
HK$*1
WACOAL INTERNATIONAL HONG
KONGCO., LTD.

Hong Kong

373,690
thousandHK$

VIETNAM WACOAL CORP.

Bien Hoa, Vietnam

Wacoal Investment Co., Ltd.

Taipei, Taiwan

59,000thousandNT$

Wacoal Business (Overseas)(Investment in Taiwan affiliates)

Guandong Wacoal Inc.

Guangzhou, China

17,730thousand
RMB

Wacoal Business (Overseas)(Sewing and sale of various textile
products)*1
Wacoal China Co., Ltd.

Beijing, China

189,364
thousand
RMB

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

100

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

34

54,604 million
VND

Same as above

Wacoal Business (Overseas)(Import and export of raw materials)
Wacoal Business (Overseas)(Sewing and sale of various textile
products)

(80）

100
(100）

100
(100）

100
(100）

100
(100）

(100）

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

Bangkok, Thailand

120 million
THB

PT.INDONESIA WACOAL

Bogor, Indonesia

2,400 million
IDR

Same as above

Seoul, South Korea

4,500 million
WON

Same as above

Taiwan Wacoal Co., Ltd.

Taoyuan, Taiwan

800 millionNT$*4, *5
House of Rose Co., Ltd.

Minato-ku, Tokyo

934

Shinyoung Wacoal Inc.

Same as above
Other(Manufacture and sale of cosmetics
products)

(34）

42
(42）

25
50
(50）

24

5 other companies(Note)*1

Wacoal Corp., WACOAL INTERNATIONAL CORP., WACOAL INTERNATIONAL HONG KONG CO., LTD., andWacoal China Co., Ltd. are categorized as a specified subsidiary under the Financial Instruments and Exchange Act.

-8-

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*5

The Company executed a business alliance agreement between House of Rose Co., Ltd.
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

114,877 million yen(ii) Ordinary income

9,835 million yen(iii) Net income

6,548 million yen(iv) Net assets

97,105 million yen(v) Total assets

126,737 million yen-9-5. 【Employees】(1) Employees within group
As of March 31, 2014
Name of Operating Segment

Number of Employees

Wacoal Business (Domestic)

7,671[1,024]

Wacoal Business (Overseas)

9,206

[61]

376

[91]

1,659

[215]

18,912[1,391]Peach John Business
Other
Total
(Note)

1

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.

2
3

Temporary employees include temporary staff and part-time workers whose working period is about 3 months.
From the current consolidated fiscal year, in conformity with the change to the structure of our internal reporting segments
based on our organizational structure, the amount related to Wacoal Eveden is recorded in “Wacoal Business (Overseas)”,whereas it was originally recorded in our “Other” segment.

(2) Employees of the Company
As of March 31, 2014
Number of Employees
80(Note)

Average Age

Average Years of Service
45.4

Average Annual Salary (Yen)

20.8

1

The number of employees is the number of individuals working within the Company.

2
3

The average annual salary includes bonus and extra wages.
All employees of the Company belong to the Wacoal Business (Domestic) segment.

6,719,684(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 The Wacoal Labor Union is very stable and we have nothing to report on this matter.

-10-II. Business Overview
1. 【Summary of Business Results】(1) Summary of Operations
Our group entered the first year of our three-year mid-term plan (from fiscal 2014 to fiscal 2016), and we (primarily Wacoal Corp.,
our core operating entity) made efforts to expand our share of sales while responding to the diversifying domestic women’s innerwear
market, establish an organizational structure for our business other than the women’s innerwear business and strengthen growth byactively developing our overseas business.
As a result of the above, with respect to our consolidated business results for the fiscal year ended March 31, 2014, overall sales
exceeded the results for the previous fiscal year as a result of increased sales from Wacoal Corp., our core operating entity, due to thelast-minute demand before the sales tax hike, the expansion of sales attributable to our overseas business, as well as the influence ofthe exchange rate. Operating income exceeded the results for the previous fiscal year mainly due to the increased profits from ouroverseas subsidiaries and the elimination of the impact of the impairment loss on intangible fixed assets which we recorded in theprevious fiscal year.
As of the end of the fiscal year ended March 31, 2014, we have changed the fiscal year end of Wacoal Eveden Limited and its
subsidiaries (collectively, “Wacoal Eveden”), which became our subsidiary in April 2012, from its former fiscal year end to March 31
in order to more closely conform the fiscal year end of Wacoal Eveden with that of its parent company. Accordingly, the results forthe previous fiscal year of Wacoal Eveden which had previously been stated for a period of 9 months have been restated for a periodof 12 months, and our group’s consolidated results for the previous fiscal year have been restated accordingly.
Net Sales:

193,781 million yen(an increase of 7.5% as compared to the previous fiscal year)

Operating income:

13,860 million yen(an increase of 63.1% as compared to the previous fiscal year)

Pre-tax net income:

15,033 million yen(an increase of 37.4% as compared to the previous fiscal year)

Net income attributable to Wacoal
Holdings Corp.:

10,106 million yen(an increase of 28.2% as compared to the previous fiscal year)

The following is a summary of operations by operating segment.
(i)

Wacoal Business (Domestic)In our Wacoal brand business, sales of core brassieres showed favorable performance, due to the sales of certain
campaign products and brands in certain sales channels which gained support from consumers. Despite poor sales performanceof our bottom products and undergarments which were impacted by climate instability, overall sales of our Wacoal brandbusiness exceeded the results for the previous fiscal year as a result of our successful efforts in strengthening our product lineup
mainly for our regular items in response to last-minute demand.
In our Wing brand business, although sales of our products based on “body aging” and high-end products performed
poorly, sales of our core brassieres exceeded the results for the previous fiscal year due to an increase in the number of shops
promoting collaboration products with our major clients, as well as the impact of last-minute demand. Overall sales of our Wing
brand business remained unchanged from the results for the previous fiscal year due to the poor performance of our seasonal
men’s innerwear products, despite the favorable sales performance of men’s innerwear products for seniors.
In our retail business, although sales from existing stores of our directly managed retail store, AMPHI, performed
poorly, overall sales exceeded the results for the previous fiscal year due to an expansion in sales as a result of opening newstores, such as our newly-launched innerwear coordinating shop, AMPHI FUL FRU, and the steady sales performance of our
Wacoal Factory Stores at outlet malls.
In our wellness business, although sales of running tights were impacted by the products sold by our competitors, salesof our sports conditioning wear “CW-X” brand expanded as a result of an increase in the opening of new sports specialty stores.
Overall sales exceeded the results for the previous fiscal year due to the steady performance of women’s business shoes withhigh functionality.
In our catalog sales business, overall sales remained unchanged from the results for the previous fiscal year due to thefavorable performance of our internet sales, despite the poor performance of our summer and winter catalog products.

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In summary, overall sales attributable to Wacoal Business (Domestic) exceeded the results for the previous fiscal year.
With respect to profitability, our operating income exceeded the results for the previous fiscal year due to an increase in sales
and our successful efforts in cost reduction.
Net Sales:

118,085 million yen(an increase of 2.1% as compared to the previous fiscal year)

Operating income:

9,284 million yen(an increase of 10.2% as compared to the previous fiscal year)(ii) Wacoal Business (Overseas)
In the United States, we made aggressive efforts in expanding our U.S. market share, sales areas and channels mainly
at department stores, which are our major clients. Sales exceeded the results for the previous fiscal year as a result of strong
performance of our core brassiere products in general, and as a result of our expanded internet sales and Canadian business. In
terms of profit, operating income exceeded the results for the previous fiscal year due to the increased sales as well as the impactof the exchange rate.
With respect to our business in China (from January 1 to December 31), we made efforts in improving profitability andenhancing our presence in the middle-class market. Sales exceeded the results for the previous fiscal year as a result ofrenovations conducted at core shops, the effect of the promotional initiatives we took with respect to our clients and the
expanded internet sales. Sales of LA ROSABELLE, our brand targeting the middle-class market, at department stores also
showed strong performance. In terms of profit, we recorded an operating profit (as compared to an operating loss for theprevious fiscal year) as a result of increased sales, closing of less-profitable stores, discontinuation of underperforming brands,
and the effect of reducing costs.
With respect to Wacoal Eveden (from April 1, 2013 to March 31, 2014), we continued with success to expand ourmarket share and improve profitability by exploiting our strengths in fuller bust bras in the United Kingdom, certain European
markets, North America and Australia whilst strengthening our group synergies. Although sales were affected by slow
consumer spending in the United Kingdom and Europe as well as unstable weather in major markets such as the United States,
Fantasie brand sales, especially swimwear, saw strong growth in all markets. In addition, lingerie and swimwear sales of ourbrand products for the fuller figure, Elomi and Goddess, showed favorable performance as a result of our successful efforts instrengthening product development. Sales of our Wacoal branded products, which we launched in Australia and New Zealand,and of our Huit products in Asia, showed strong performance and, as a result, overall sales of Wacoal Eveden exceeded theresults for the previous fiscal year. In terms of profit, operating income exceeded the results for the previous fiscal year both as aresult of our efforts to reduce our cost of sales by reassessing our system of production in order to improve margins byimproving business efficiency, and also by reducing other types of costs. The increased proportion of our sales owing to North
America, which is a highly-profitable region, also contributed to the strong results.
Significant increases in net sales and operating income under the “Wacoal Business (Overseas)” segment are due to the
influence of exchange rates. In addition, Wacoal Eveden has been added to this segment from our “Other” segment starting withthe current fiscal year and accordingly, the results for the previous fiscal year have been restated.
Net Sales:

43,636 million yen(an increase of 30.9% as compared to the previous fiscal year)

Operating income:

4,037 million yen(an increase of 99.6% as compared to the previous fiscal year)(iii) Peach John BusinessWith respect to Peach John Co., Ltd. (“Peach John”), sales from our print catalogs showed weak performance, while
our internet sales showed strong performance as a result of the favorable performance of our new brassiere products, which
gained support from consumers, as well as our successful promotional initiatives using TV commercials and the internet. Sales
from our core mail-order catalogs, however, exceeded the results for the previous fiscal year due to year-end and new year sales
and the impact of last-minute demand.
Similarly to our mail-order catalogs, net sales attributable to our domestic direct retail stores exceeded the results forthe previous fiscal year as a result of the strong performance of our flagship shops and as a result of our opening of new stores,
such as our new business-style shop, YUMMY MART, in addition to the favorable performance of our new products and theeffect of our promotional initiatives. With respect to our directly-managed overseas stores, sales from Hong Kong showedsteady performance as a result of the enhanced merchandise policy and our establishing a solid base of customers, while sales
from China showed poor performance.

-12-

As a result of the above, overall sales from our Peach John business exceeded the results for the previous fiscal year.
In terms of profit, we recorded operating income due to the elimination of the impact of the impairment loss on intangible fixed
assets which we recorded in the previous fiscal year, despite the increased cost rate which was impacted by the exchange rate.
Net Sales:

12,482 million yen(an increase of 4.3% as compared to the previous fiscal year)

Operating income:83 million yen(as compared to 2,701 million yen of operating loss incurred for the previous
fiscal year)(iv) OtherWith respect to the business of Lecien Corporation (“Lecien”), overall sales exceeded the results for the previous fiscal
year, due to the expanded business volume of our core women’s innerwear and outerwear products with our major clients. In
terms of profit, we recorded an operating loss due to an increased cost rate which was impacted by the exchange rate.
As for Nanasai Co., Ltd. (“Nanasai”), which engages in the manufacturing, sales and rental business of mannequins
and interior design and construction of stores at commercial facilities, although the sales and rental businesses performed poorly
due to the impact of reduced investment in reconstruction projects by our clients, overall sales exceeded the results for theprevious fiscal year as a result of the steady results achieved by our construction business due to the increased number of orders
received. Operating income exceeded the results for the previous fiscal year due to our efforts in cost reduction.
As a result of the above, with respect to the overall sales and operating income attributable to our “Other” 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:

19,578 million yen(an increase of 1.7% as compared to the previous fiscal year)

Operating income:

456 million yen(a decrease of 39.5% as compared to the previous fiscal year)

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

Japan

With respect to Wacoal Corp., overall sales exceeded the results for the previous fiscal year due to the impact of lastminute demand in our core Wacoal and Wing brand products. With respect to profitability, our operating income exceeded theresults for the previous fiscal year due to an increase in sales and our successful efforts in cost reduction.
With respect to Peach John, sales from our print catalogs showed weak performance, while our internet sales showedstrong performance as a result of the favorable performance of our new brassiere products, which gained support fromconsumers, as well as our successful promotional initiatives using TV commercials and the internet. Similarly to our mail-ordercatalogs, net sales attributable to our domestic direct retail stores exceeded the results for the previous fiscal year as a result of
the strong performance of our flagship shops and as a result of our opening of new stores, such as our new business-style shop in
addition to the favorable performance of our new products and the effect of our promotional initiatives. With respect toprofitability, operating income fell below the results for the previous fiscal year due to the increased cost rate which was
impacted by the exchange rate.
With respect to the business of Lecien Corporation (“Lecien”), overall sales exceeded the results for the previous fiscal
year, due to the expanded business volume of our core women’s innerwear and outerwear products with our major clients. With
respect to profitability, operating income fell far below the results for the previous fiscal year due to the increased cost rate
which was impacted by the exchange rate.
As for Nanasai Co., Ltd. (“Nanasai”), which engages in the manufacturing, sales and rental business of mannequins
and interior design and construction of stores at commercial facilities, although the sales and rental businesses performed poorly
due to the impact of reduced investment in reconstruction projects by our clients, overall sales exceeded the results for theprevious fiscal year as a result of the steady results achieved by our construction business due to the increased number of orders
received. Operating income exceeded the results for the previous fiscal year due to our efforts in cost reduction.
As a result of the above, sales from our business in Japan amounted to 149,715 million yen, an increase of 2.4%
compared to the previous fiscal year.

-13-

(ii) Asia/Oceania
With respect to our business in China, we made efforts in improving profitability and enhancing our presence in the
middle-class market. Sales exceeded the results for the previous fiscal year as a result of renovations conducted at core shops,
the effect of the promotional initiatives we took with respect to our clients and the expanded internet sales. Sales of LA
ROSABELLE, our brand targeting the middle-class market, at department stores also showed strong performance. In terms of
profit, we recorded an operating profit (as compared to an operating loss for the previous fiscal year) as a result of increased
sales, closing of less-profitable stores, discontinuation of underperforming brands, and the effect of reducing costs.
With respect to our directly-managed overseas stores of Peach John, sales from Hong Kong showed steady
performance as a result of the enhanced merchandise policy and our establishing a solid base of customers, while sales from
China showed poor performance.
As a result of the above, sales from our business in Asia/Oceania amounted to 14,871 million yen, an increase of
26.3% as compared to the previous fiscal year.
(iii) Europe/North America
With respect to our business in the United States, we made aggressive efforts in expanding our U.S. market share, sales
areas and channels mainly at department stores, which are our major clients. Sales exceeded the results for the previous fiscal
year as a result of strong performance of our core brassiere products in general, and as a result of our expanded internet sales andCanadian business. In terms of profit, operating income exceeded the results for the previous fiscal year due to the increased
sales as well as the impact of the exchange rate.
With respect to Wacoal Eveden in the United Kingdom, we made efforts to expand our market share and improve
profitability by exploiting our strengths in fuller bust bras in the United Kingdom, certain European markets, North America andAustralia whilst strengthening our group synergies. Our core brand products as well as our brand products for the fuller figure
showed favorable performance and, as a result, overall sales of Wacoal Eveden exceeded the results for the previous fiscal year.
In terms of profit, operating income exceeded the results for the previous fiscal year both as a result of our efforts to reduce ourcost of sales by reassessing our system of production in order to improve margins by improving business efficiency, and also by
reducing other types of costs. The increased proportion of our sales owing to North America, which is a highly-profitable region,
also contributed to the strong results.
As a result of the above, sales from our business in Europe/North America amounted to 29,195 million yen, an
increase of 31.3% as compared to the previous fiscal year.
(2) Cash Flow Status
The balance of cash and cash equivalents at the end of fiscal year 2014 was 30,658 million yen, an increase of 6,144 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 2014 was 8,949 million yen, a decrease of 3,360 million yen
as compared to the previous fiscal year, which reflects the result after adjusting the net income of 10,377 million yen for
depreciation expenses and deferred taxes, as well as changes in assets and liabilities.
(Cash flow provided by investing activities)
Cash flow provided by investing activities during the fiscal year 2014 was 1,658 million yen, an increase of 25,178 million yen
as compared to the previous fiscal year, due to proceeds from the sale and redemption of marketable securities and proceeds fromthe sale and redemption of other investments.
(Cash flow used in financing activities)
Cash flow used in financing activities during the fiscal year 2014 was 5,554 million yen, an increase of 10,933 million yen ascompared to the previous fiscal year, due to the cash dividend payments.

-14-

2. 【Production, Orders Received, and Sales】(1) Production Results
Our consolidated production results by operating segment for fiscal year ended March 2014 are as follows. The production
results for other segment are not shown since it is hard to define such term in this segment.
Amount (Millions of yen)

Changes as Compared toPrevious Fiscal Year (%)

Wacoal Business (Domestic)

49,681

99.7

Wacoal Business (Overseas)

12,057129.3

61,738

104.4

Name of Operating Segment

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 2014 is as follows:
Amount of Orders Changes as Compared Balance of Amount of Changes as Compared
Received
to Previous Fiscal
Orders Received
to Previous Fiscal
Name of Operating Segment(Millions of yen)
Year (%)(Millions of yen)
Year (%)
Other(Note)

5,501

101.6

279

82.5

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 2013 are as follows:
Changes as Compared
Name of Operating Segment
Amount (Millions of yen)to Previous Fiscal Year
Wacoal Business (Domestic)

118,085

102.1

Wacoal Business (Overseas)

43,636130.9

Peach John Business

12,482

104.3

Other

19,578101.7

193,781

107.5

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.

-15-

3. 【Management Issues】(1) Business and Financial Issues to Address
Maintaining and/or expanding sales and profits from our domestic business is an essential factor for our group’s
sustainable growth. While the domestic women’s innerwear market has diversified, our sales channel and regional strategies
based on consumer behavior have become a major issue for us. We will need to build a system which can accurately respond tochanges in consumer needs (as seen in the price reduction in high volume products) by drawing on our group’s collective
strength. In addition, it is essential for us to develop new business lines besides our domestic women’s innerwear business.
We consider our overseas business as our group’s biggest growth engine and the expansion of our business in overseas
regions will be essential for us to achieve our aim to become a “Wacoal of the World”. In addition, we believe it is essential for
us to build manufacturing capability which will enable us to develop and supply products with stability and competitiveness byadapting to the respective markets in Asian countries, and addressing such issues as increased products cost due to increasing
wages and/or cost of living and production capacity in these countries.
By promoting such management base and infrastructure development of the entire group, we will strengthen ourmanagement practices so that we can achieve further results by responding to any changes in the environment and accelerating
initiatives to address issues that we face.
(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 27, 2014).
(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.
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)-16-

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 with the aim of enhancing our corporate value by (i)strengthening Wacoal’s overall capabilities through alliances within the group, (ii) expanding our domestic and overseas
business and maintaining and improving profitability, (iii) strengthening our group’s management system, and (iv) carrying out
Corporate Social Responsibility activities (such as compliance training and education, investor relation activities, and social
action programs). Such operations will be conducted in order to build “Wacoal” as an enduring corporate brand while we
improve 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.
(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, 2014, our Board of Directors is composed of seven 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. Two of these seven 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 ofmanagement and business. The term of office of each Director is one year, and we are further clarifying the responsibilities ofour 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, 2014. The
function of our Audit & Supervisory Board is to monitor and supervise our management.
Further, all of the two Outside Directors and three Outside Audit & Supervisory Board Members have been designatedas 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.
In addition, the “Corporate Ethics Committee” and “Risk Management Committee” have each been established ascommittees of the entire Company. Under these committees, the “Compliance Division,” “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, 2009. The Board of Directors determined and updated specific measures at the meeting held on the same day (whichwere introduced on June 29, 2006). Because these measures were terminated upon expiration of a three-year term, the Company,-17-

at an ordinary general meeting of shareholders held on June 28, 2012, obtained approval for a resolution to determine details of
the basic policy (hereinafter called “Basic Policy on Defensive Measures against Takeovers”) of revised preventive measures tobe taken against the acquisition of a substantial shareholding of the Company (i.e., defensive measures against takeovers), andthe Board of Directors determined and updated the specific measures based on the Basic Policy on Defensive Measures against
Takeovers (hereinafter called “the Plan”) at a meeting held on the same day.
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 28, 2012. 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
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.

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(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.

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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 2014.
(1) We may be adversely affected by the domestic and global economy
During fiscal year 2014, the Japanese market accounted for approximately 77.3% of our net sales, and the UnitedStates and European markets accounted for approximately 15.0%. In the major markets in which we operate, any weakness ordeterioration in the economy 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 2014, 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 specialty retail stores 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 specialty 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.
An important factor affecting the competitive environment in our industry in recent years has been the increased
penetration of lower-priced garments in the market. Our strategy of focusing on the higher end of the intimate apparel market
may help us avoid potential negative effects of such trends on our business and performance, including possible loss of market
share and reduced profitability. However, we are affected by these competitive trends and our strategy may not be successful.
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 network 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.

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(6) We may experience difficulties in successfully increasing our catalogue and Internet sales
We believe that our catalogue and Internet sales will be increasingly important in achieving sales growth, and we are
seeking to strengthen our capabilities in these channels. We also believe that we need to make further investments in systems forInternet sales in order to expand the Internet sales of our entire group. However, as the system environment surrounding ourcatalogue and Internet sales evolves rapidly, we cannot predict whether our accumulated investments would contribute to thebenefit of the entire group. We may not be successful in increasing our catalog and Internet sales sufficiently to compensate forcontinued flat or declining sales through our core general retailer channel.
(7) We are subject to excess of inventory risks that could negatively affect our operating results
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
Reducing our cost of conducting business is a key element of our strategy to improve our profitability and businessperformance, 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 subject us to various risks relating to the conduct of our business abroad, including:








differing consumer tastes and preferences in overseas markets;political, social, and economic instability in countries where we source, manufacture, or sell our products;
unexpected tax, legal, or regulatory changes or actions that may adversely affect our group;difficulty in staffing and managing widespread operations;changes in exchange rates;
differing protection of intellectual property; andpublic health or similar problems in our important overseas markets or sourcing/production centers.

(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 that we have pursued or may pursue in the future may involve material
risks to our company and the value of our shares. Such material risks would include possible impairment charges on ourinvestments in an investee company, in addition to unsuccessful integration of or a lack of cooperation between our businesses
with those of our counterparties. If any of these material risks occur, it could have an adverse effect on the results, financial
condition and cash flow of our existing operations as well as a business we acquire.
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(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.
In addition, if there is a decrease in our pension assets due to adverse conditions in stock or bond markets or otherfactors, additional funding and accruals may be required, and such funding and accruals may adversely affect our performanceand financial condition.
(19) Natural disasters and epidemics 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 or epidemic could also cause disruptions in the transportation networks that our business relies upon andcould interfere with our normal course of production and distribution. Furthermore, any such natural disaster or epidemic would
also have a large impact on consumer activity, which would have a significant impact on the sales of our products.

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5. 【Material Agreements, etc.】
During the fiscal year that ended in March 2014, we have not made any management decisions on or been a party to any material
agreements, etc.

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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 a healthy and beautiful body-making by changing the concept from daily walking to
exercise walking. In 2010, we conducted an analysis and announced principles on the physiological changes associated with aging
period from 20s to 50s. We also strengthened development of new products coping with aging and we have been working on
developing new functional products based on the lifestyle habit of people with small physical changes associated with aging.
Our Human Science Research Center is promoting research and development, which is based on a survey analysis of body shapes
and needs of customers of the generation for which the products are introduced and senior generation.
In terms of product development, during the fiscal year that ended in March 2014, we proposed our new aging products andlifestyle modification support products. In addition, we have worked on information development to raise awareness of the “night
bust care” and engaged in marketing support for the sales of sleep brassieres.
As a result of the above, we recorded 808 million yen for our research and development during the fiscal year ended March 2014.
In order to promote “the realization of supporting industry for women with unbounded living beauty,” we will make efforts toenrich our research and development activities that can contribute to the improvements of customer satisfaction and corporate value
based on the key concept 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.

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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 27, 2014)(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 approximately 74.7% of our consolidated net sales for fiscal year
2014. We also design, manufacture, and sell nightwear, children’s underwear, outerwear, sportswear, hosiery and other appareland textile products, and other several 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 2014.

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

144,783
9,301
1,475
155,559
16,954
1,791
8,577

74.7%
4.8
0.8
80.3
8.8
0.9
4.4

10,900193,7815.6
100.0%For fiscal year 2014, approximately 81% of the net sales of Wacoal Corp. (the net sales of which account for
approximately 61% of our consolidated net sales) were apparel sales made on a wholesale basis to department stores, generalmerchandisers, and other general retailers and approximately 17% were apparel sales made through our own specialty retailstores, catalogue sales, and the Internet. Sales from our other businesses (which include cultural products and other services)
constituted the remaining 2% of Wacoal Corp.’s net sales for fiscal year 2014.
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 our specialty retailstores.
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 shifted from a shrinking trend to flat sales due to changes in the
consumption environment and distribution industry, and other factors including a decline in the female population. The purchaseprice range and the average purchase unit price per innerwear product continue to decline. In addition, the number of purchased
items and the number of items in possession per customer are declining.

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(ii) Specialty apparel and other manufacturers entered the innerwear market. These manufacturers offer their products
by focusing on new elements, such as fashionability, lifestyle, and price, rather than function and quality. Because the economic
downturn has led consumers to become more price conscious, these new manufacturers and others have achieved a greater
market share.
(iii) These manufacturers and other competitors strengthened their cost reduction efforts by, for example, sourcing
fabric and producing garments in lower-cost countries in Asia. Sales in Japan of lower-priced women’s innerwear garments
manufactured in these countries increased, leading to an intensification of price competition in our industry. The recent
development and tendency of general merchandisers producing their own low-priced “private brand” merchandise accelerated
these trends.
(iv) Although catalogue marketing has made little progress, new sales strategies, such as e-commerce and televisionmarketing, have led to more diversified sales channels and exposure to new consumer groups.
We have taken steps for two fiscal years to address these key industry trends to build on the core strengths of ourmarket position and brand awareness among Japanese consumers. We continue to seek to sell higher-end products to consumers
seeking high-quality innerwear garments and to mitigate the adverse impact on sales and margins from lower-priced garments.
We have taken steps to reduce our cost structure, such as producing more products in lower-cost countries in Asia, consolidating
and streamlining our product distribution centers and reviewing indirect expenses. We are also seeking to expand sales inoverseas markets—in particular China, the United States, and Europe, as well as in the ASEAN region, where we have been
trying to increase sales through our directly managed stores and website. Additionally, we intend to extend our innerwear
product offerings into the midprice range in our product mix to help us reach a broader consumer base. We will continue to
implement these steps and evaluate other strategies to address challenges and opportunities in the industry going forward.
(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 our 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 theestimated 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.

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(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.
For fiscal year 2014, 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 the relevant 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. At the end of fiscal year
2014, 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, which have estimable useful lives of fixed numbers of years, are evaluated for
impairment whenever there is an event or change in circumstances that indicates that such assets have been impaired or that thecarrying amounts of such 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 2014, we concluded that there was no material impairment with respect to the carrying value of our longlived assets.
(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 historical or 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.
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 is-27-

determined by the Capital Asset Pricing Model (“CAPM”) and we mainly utilize a weighted-average cost of capital (“WACC”)
of 4.5%.
As a result of the evaluation performed for fiscal year 2014, we concluded that there was no impairment in the carrying
value of goodwill.
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 7.5% based on a WACC of 4.5% 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 2014, we concluded that there was no impairment in the carrying
value of the trademark.
The carrying values of other intangible assets that have estimable useful lives are evaluated for impairment based on
future cash flows, whenever there is an event or change in circumstances that indicates that the carrying amounts of such assets
might not be recoverable. When determining the impairment of other intangible assets, we evaluate the carrying amount of theassets based on their fair value. In our determination of the fair value of customer relationships, we utilize the excess earnings
method and incorporate relevant unobservable inputs. Significant assumptions used in this analysis include future cash flows,
the risk-adjusted discount rate, and the existing customer percentage, which is the number of the orders received from customers
upon acquisition of a company with existing customers as a percentage of the total number of all orders. Future cash flows are
based on the management’s cash flow projections for the future five years. The management’s cash flow projections aredeveloped using estimates for expected future earnings growth rates, rate of return, and working capital ratio by reporting units.
The risk-adjusted discount rate is determined by the CAPM and we mainly utilize a WACC of 4.5%. The existing customer
percentage is calculated by the percentage of orders from existing customers at the point of merger. Our management believes
that the future cash flows and the evaluations of fair value are reasonable. However, due to a change in future cash flows andfair value, the calculation of impairment may be adversely affected.
As a result of the evaluation performed for fiscal year 2014, we concluded that there was no impairment in the carrying
value of customer relationships.
(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, expected long-term rate of return on plan assets, retirement rates, mortality expectations, and other factors.
Our management believes that these actuarial assumptions and methods are appropriate in light of our circumstances. However,
due to a change in an actuarial assumption, the amount of the projected retirement benefit plan 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, 2014 on the Japanese government
bonds whose maturity dates approximate the timing of the expected future benefit payments. On March 31, 2014, the discountrate used for the contributory retirement plan was 1.3%.
We determine the expected long-term rate of return on plan asset assumptions by evaluating both historical returns, aswell as estimates of future returns. Its expected return on assets was based on expected equity and debt securities returns
weighted by the percentage of each of the major asset classes. Its estimate of the long-term rate of return on assets for thecontributory retirement plan is 2.5% for fiscal years 2013, and 2014. 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 327 million yen

an increase of 1,904 million yen

Discount rate: 0.5% increasea decrease of 184 million yen

a decrease of 1,661 million yen

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

an increase of 147 million yen

-

-28-

Expected long-term rate of return onplan assets: 0.5% increasea decrease of 147 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.

(3) New Accounting Pronouncements
Presentation of Comprehensive Income - In February 2013, the Financial Accounting Standards Board "FASB" issued new
guidance requiring additional disclosure for the amounts reclassified out of accumulated other comprehensive income. The
guidance required disclosure of changes in accumulated other comprehensive income by component. It also requires an entity topresent information about significant items reclassified out of accumulated other comprehensive income by component either on theface of the statement where net income is presented or as a separate disclosure in the notes to the financial statements. The
guidance is effective for fiscal years and interim periods within those years, beginning after December 15, 2012. The Company
adopted this guidance from the first quarter beginning from April 1, 2013. The adoption of this guidance does not have an effect on
the Companies' consolidated financial position, result of operations, or cash flows since it relates only to disclosure requirements ofaccumulated other comprehensive income.
Revenue Recognition – In May 2014, the FASB issued a new accounting guidance related to revenue recognition. This guidance isbased on the principle that revenue is recognized to depict the transfer of promised goods or services to customers in an amount thatreflects the consideration 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 from contracts with customers. This guidance is effective forfiscal years beginning after December 15, 2016 and interim periods within annual periods. The company is currently evaluating theimpact of adoption on the Company's consolidated financial position, result 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
Our cost of sales increased 7.6% from 84,548 million yen for fiscal year 2013 to 91,008 million yen for fiscal year 2014. Costof sales as a percentage of net sales increased 0.1% from 46.9% for fiscal year 2013 to 47.0% for fiscal year 2014 due to anincrease in the ratio of sales achieved by our domestic subsidiaries with a high cost rate, in addition to an increase of returned
products at Wacoal Corp.
(iii) Selling, General and Administrative Expenses
Our selling, general and administrative expenses increased 5.4% from 84,331 million yen for fiscal year 2013 to 88,913
million yen for fiscal year 2014. On the other hand, the selling, general and administrative expenses as a percentage of net sales
decreased 1.0% from 46.8% for fiscal year 2013 to 45.8% for fiscal year 2014. This decrease was due to the suppression of
marginal cost, while growth in sales was mainly from our existing business.
(iv) Goodwill and Other Intangible Assets
At the end of fiscal year 2013, we examined potential impairment charges on the trademarks, customer relationships, andgoodwill, all of which are recorded as other intangible fixed assets of Peach John, pursuant to its business plan, and accordingly,
we recorded an impairment charge of 2,852 million yen in total. There were no impairment charges for fiscal year 2014.
(v) Operating Margin
Our operating margin increased 2.5% from 4.7% for fiscal year 2013 to 7.2% for fiscal year 2014. This increase was mainly
due to an increase in sales, as well as our successful efforts in improving the percentage of the selling, general andadministrative expenses and the elimination of the impairment charges recorded in connection with Peach John.
(vi) Other Income/Expenses
We recorded 1,173 million yen as other income, a decrease of 1,268 million yen, as compared to 2,441 million yen of otherincome recorded for fiscal year 2013. This decrease was mainly due to the gain on sale and exchange of marketable securities
and investments decrease of 2,124 million yen from fiscal year 2013.
(vii) Net Income Attributable to Wacoal Holdings Corp.
Net income attributable to Wacoal Holdings Corp. for fiscal year 2014 was 10,106 million yen, an increase of 2,226 million
yen as compared to fiscal year 2013 as a result of improved operating margin, despite a decrease in other income.
(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, 2014, we had credit facilities at financial institutions totaling 37,938 million yen, and the unused linesof credit for short-term financing amounted to 12,449 million yen. Of this credit, 7,316 million yen is available to Wacoal
Holdings Corp., 3,545 million yen is available to Wacoal Service Co., Ltd., and 1,588 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, loan, or cash advance. We believe our working capital is adequate for our present requirements and for our business
operations in the short to long 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 Flows.”-30-

III. 【Property, Plants, and Equipment】
1. 【Summary of Capital Investment, etc. 】
The amount of capital investment for the fiscal year ended March 31, 2014, was 3,464 million yen. A majority of our capital
investment was used in 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 2,210 million yen, 621 million yen, 296 million yen, and 337 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, 2014
Number of
Employee(s)Book Value (Millions of yen)
Facility(Location)

Head Office(Minami-ku, Kyoto) and other

OperatingSegment

WacoalBusiness(Domestic)

Type of Equipment
and Facilities

Facilities foradministrationaffairs, etc.

Buildings

Equipment
and Fixtures

15,747

1,598

Land (m2)

18,488(277,311)

Total

35,83480［－］(2) Domestic Subsidiaries
As of March 31, 2014
Number of
Employee(s)Book Value (Millions of yen)
Name of Company(Location)

OperatingSegment

Type of Equipment
and Facilities

Buildings

Machinery,
Vehicle,Equipment,
and Fixtures

Land (m2)

Total

Wacoal Corp. Head Office(Minami-ku, Kyoto)
One other business office in Kyoto
district

WacoalBusiness(Domestic)

Facilities foradministrationaffairs

24

181

－

205

1,311
［ 248］

Wacoal Corp. Tokyo Office(Chiyoda-ku, Tokyo)
One other business office in Tokyo

WacoalBusiness(Domestic)

Facilities foradministrationaffairs

26

6

－

32

1,096
［ 39］

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

WacoalBusiness(Domestic)

Facilities foradministrationaffairs

10

6

－

16

895
［59］

WacoalBusiness(Domestic)

Facilities foradministrationaffairs

60

4

－

64

652
［73］

Wacoal Art Center Co., Ltd.
(Minato-ku, Tokyo)

WacoalBusiness(Domestic)

Sales facilities

41

11

－

52

－
［ －］

Wacoal Distribution Corp.
West Japan Distribution Center(Moriyama, Shiga)

WacoalBusiness(Domestic)

Facilities formerchandise
management

20

114

－

134

405
［ －］

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

WacoalBusiness(Domestic)

Manufacturing
facilities

1

90

－

91

372
［ 39］

Torica Inc.
(Saihakugun Nanbucho, Tottori)
Three other plants

WacoalBusiness(Domestic)

Manufacturing
facilities

568

58

180
(40,840)

806

179
［ 36］

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

Other

Manufacturing
facilities

340

12

150
(2,790)502

Wacoal Corp.Shibaura Office(Minato-ku, Tokyo)

-31-

［

22
3］

(3) Overseas Subsidiaries
As of March 31, 2014
Number of
Employees

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

OperatingSegment

Type of Equipment
and Facilities

Buildings

Machinery,
Vehicle,Equipment,
and Fixtures

Land (m2)

Total

WACOAL AMERICA, INC.
(New York, USA)

WacoalBusiness(Overseas)

Facilities foradministrationaffairs andmerchandise
management

549

66

245
(32,300)

862

172
［ －］

WACOAL DOMINICANA
CORP.
(Santo Domingo, Dominican
Republic)

WacoalBusiness(Overseas)

Manufacturing
facilities

499

111

82
(24,459)

693

1,448
［ －］

WACOAL SINGAPOREPRIVATE LTD.
(Singapore)

WacoalBusiness(Overseas)

Facilities foradministrationaffairs

25

28

200
(235）

254

67
［ 19］

WACOAL HONG KONG CO.,LTD.
(Hong Kong)

WacoalBusiness(Overseas)

Facilities foradministrationaffairs

435

－

－

435

135
［ 29］

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

WacoalBusiness(Overseas)

Facilities for adm
inistration affairs/
manufacturing
facilities

229

36

－

266

798
［ －］

Guandong Wacoal Inc.
(Guandong, China)

WacoalBusiness(Overseas)

Manufacturing
facilities

162

224

－

386

545
［ －］

VIETNAM WACOAL CORP.
(Bien Hoa City, Vietnam)

WacoalBusiness(Overseas)

Facilities for adm
inistration affairs/
manufacturing
facilities

113

166

－

280

1,925
［ 5］

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

WacoalBusiness(Overseas)

Manufacturing
facilities

374

233

－

607

661
［ －］

(Note)

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)
Land (m2)

Buildings
Wacoal Corp. Head Office(Minami-ku, Kyoto)
One other business office inKyoto district

Wacoal Business(Domestic)

Facilities foradministration affairs

6,719

591
(8,316)

Wacoal Corp. Tokyo Office(Chiyoda-ku, Tokyo)
One other business office inTokyo

Wacoal Business(Domestic)

Facilities foradministration affairs

1,065

1,945
(1,471)

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

Wacoal Business(Domestic)

Facilities foradministration affairs

442

960
(1,833)

Wacoal Art Center Co., Ltd.
(Minato-ku, Tokyo)

Wacoal Business(Domestic)

Sales facilities

1,629

3,972
(1,739)Wacoal Distribution Corp.
West Japan Distribution
Center(Moriyama, Shiga)

Wacoal Business(Domestic)

Facilities formerchandise
management

2,298

1,419
(38,923)

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

Wacoal Business(Domestic)

Manufacturing
facilities274

52(19,416)

-32-

4
5.

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

Operating Segment

Type of Equipment
and Facilities(Minato-ku, Tokyo)

WacoalBusiness(Domestic)

Peach John Co., Ltd. Head Office(Shibuya-ku, Tokyo)
Lecien Corp. Osaka Office(Nishi-ku, Osaka)

Annual Lease
Amount(Millions of yen)

Buildings (m2)Land (m2)

Facilities foradministrationaffairs

2,137

－

34

Peach John
Business

Facilities foradministrationaffairs

1,708

－

121

Other

Facilities foradministrationaffairs

1,747

－

57

Operating Segment

Type of Equipment
and Facilities

Buildings (m2)Land (m2)

WACOAL AMERICA, INC.
(New York, USA)

WacoalBusiness(Overseas)

Facilities foradministrationaffairs

7,903

－

176

PHILIPPINE WACOAL CORP.
(Manila, Philippines)

WacoalBusiness(Overseas)

Facilities foradministrationaffairs926－

8

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

WacoalBusiness(Overseas)

Facilities for admi
nistration affairs/m
anufacturing
facilities－

11,871

4

Guandong Wacoal Inc.
(Guandong, China)

WacoalBusiness(Overseas)

Manufacturing
facilities－

11,224

2

VIETNAM WACOAL CORP.
(Bien Hoa City, Vietnam)

WacoalBusiness(Overseas)

Facilities for admi
nistration affairs/m
anufacturing
Facilities－

25,195

3

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

WacoalBusiness(Overseas)

Manufacturing
facilities－

27,5431

Wacoal Corp.Shibaura Office(2) Overseas Subsidiaries
Name of Company(Location)

Annual Lease
Amount(Millions of yen)

3. 【Plans for Capital Investment, Disposals of Property, Plants, and Equipment, etc.】(1) Additions of Important Facilities
At the end of the current fiscal year, we are planning a new construction project of a business-use building on land located southof JR Kyoto Station (Minami-ku, Kyoto), which is scheduled to be completed in January 2016. We plan to invest approximately
7,000 million yen in this new construction project.
(2) Disposals of Important Facilities
Not applicable.

-33-

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, 2014)(June 27, 2014) (shares) Financial Instruments Firms(shares)
Association

Class

Description

Shareholders
Common stock

143,378,085

First section of Tokyo
Stock Exchange

143,378,085

have

unlimited 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, 2014)(May 31, 2014)
Number of stock acquisition rights

30 (Note 1)

30 (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

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: 1,138 yen

Issue price: 1,138 yen

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: 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

The number of shares represented by one (1) 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 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
3

shall provide prompt notification or announcement thereafter.
(1) 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(2)

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.

(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 a merger (limited to a merger that would result in the dissolution of the Company),
absorption-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) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
(2)Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.

(3)

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

To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of the(4)

Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be 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)

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 of(6)

stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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
stipulated in (i) above.

(7)

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

(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;(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.

-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, 2014)(May 31, 2014)
Number of stock acquisition rights

14 (Note 1)

14 (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

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 2, 2008

From September 2, 2008

until September 1, 2028

until September 1, 2028

Exercise period
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

The number of shares represented by one (1) 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
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
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:

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

(3)

Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of the(4)

Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be 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)

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 of(6)

stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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 (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.

(7)

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

(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;-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 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:(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, 2014)(May 31, 2014)
Number of stock acquisition rights

29 (Note 1)

29 (Note 1)－－

Common stock

Common stock

1,000 shares per one stockacquisition right

1,000 shares per one stockacquisition right

Number of shares represented by stock acquisition rights

29,000 shares (Note 2)

29,000 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

From September 2, 2009 until

September 1, 2029

September 1, 2029

Number of stock acquisition rights held by the Company

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

Issue price: 1,085 yen
Issue price: 1,085 yen
Amount capitalized as common Amount capitalized as common
stock: 543 yenstock: 543 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 (1) 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
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,
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(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, 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)Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.

(3)

Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of the(4)

Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be 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)

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 of(6)

stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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, 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.

(7)

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

(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, 2014)(May 31, 2014)
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 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 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 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,
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, 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):(3)
4

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:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition(2)

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:
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 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.

-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
stipulated in (i) above.

(7)

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

(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;(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.

(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, 2014)(May 31, 2014)
Number of stock acquisition rights

35 (Note 1)

35 (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

35,000 shares (Note 2)

35,000 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

Issue price: 1,082 yen

Issue price: 1,082 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: 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

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

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, 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 aresolution of the board or determination by the chief executive officer of the Company is passed):(3)
4

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:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition(2)

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:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.

-44-

(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)

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 of(6)

stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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)

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.

(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 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.

-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, 2014)(May 31, 2014)
Number of stock acquisition rights

11 (Note 1)

11 (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

11,000 shares (Note 2)

11,000 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

From September 2, 2010 until

September 1, 2030

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.

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
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
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:

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

(3)

Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of the(4)

Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be 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)

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 of(6)

stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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)

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.

(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;-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 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.

(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, 2014)(May 31, 2014)
Number of stock acquisition rights

48 (Note 1)

48 (Note 1)－－

Common stock

Common stock

1,000 shares per one stockacquisition right

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

From September 2, 2011 until

September 1, 2031

September 1, 2031

Number of stock acquisition rights held by the Company

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

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

(3)

Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of the(4)

Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be 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)

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 of(6)

stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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)

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 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.

(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, 2014)(May 31, 2014)
Number of stock acquisition rights

21 (Note 1)

21 (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

21,000 shares (Note 2)

21,000 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

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.
-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 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, 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 aresolution of the board or determination by the chief executive officer of the Company is passed):(3)
4

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:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition(2)

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:
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 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.
-51-

(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)

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.

(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 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.

(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, 2014)(May 31, 2014)
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 stock

Common stock
1,000 shares per one stockacquisition rightacquisition 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
September 3, 2032

From September 4, 2012 until
September 3, 2032

Issue price: 800 yen

Issue price: 800 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: 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,
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, 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):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)Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.

(3)

Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of the(4)

Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be 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.

-53-

(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 of(6)

stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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)

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.

(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 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.

-54-

(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, 2014)(May 31, 2014)
Number of stock acquisition rights

14 (Note 1)

14 (Note 1)－－

Common stock

Common stock

1,000 shares per one stockacquisition right

1,000 shares per one stockacquisition 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

From September 4, 2012 until

September 3, 2032

September 3, 2032

Number of stock acquisition rights held by the Company

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

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 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
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
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:
-55-

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

(3)

Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of the(4)

Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be 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)

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 of(6)

stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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)

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:
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;-56-

(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.

(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, 2014)(May 31, 2014)
Number of stock acquisition rights

52 (Note 1)

52 (Note 1)－－

Common stock

Common stock

1,000 shares per one stockacquisition right

1,000 shares per one stockacquisition 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

From September 3, 2013 until

September 2, 2033

September 2, 2033

Number of stock acquisition rights held by the Company

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

Issue price: 918 yen
Issue price: 918 yen
Amount capitalized as common Amount capitalized as common
stock: 459 yenstock: 459 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
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,
the Company shall provide prompt notification or announcement thereafter.
-57-

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(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, 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.

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

(3)

Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of the(4)

Organizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be 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)

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 of(6)

stock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due 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.

-58-

(7) Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
(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 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.

(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, 2014)(May 31, 2014)
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 stock

Common stock
1,000 shares per one stockacquisition rightacquisition 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
September 2, 2033

From September 3, 2013 until
September 2, 2033

Issue price: 918 yen

Issue price: 918 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: 459 yenstock: 459 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-59-

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):(3)
4

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:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition(2)

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:
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 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.

-60-

(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
stipulated in (i) above.
(7)

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

(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 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.

(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
(Note)(Note)(3,900)－143,378

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

-61-

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, 2014

4
Status of Shares (1 unit = 1,000 shares)

Shares under
One Unit(share)Foreign Shareholders
Category

National and
Local
Governments

Financial
Institutions

Securities
Companies

Other
Corporations

Foreignshareholders
other than
individuals

Individuals

Number ofshareholders

－

66

26

202

205

3

11,284

11,786

Number ofshares held
(units)－57,2432,569

30,397

24,1396

28,140142,494

Ratio (%)

－

40.18

1.80

21.33

16.94

0.00

19.75

100

(Note)

Individuals
and Other

Total

884,085

Out of the treasury stock of 2,539,371shares, 2,539 units are included under “Individuals and other,” and 371 shares of less than
one share unit are included under “Shares under one unit.”(7) Status of Major Shareholders
As of March 31, 2014
Name of Shareholder

Address

Number of Shares
held by Shareholder(Thousands of shares)

Shareholding
Ratio (%)

The Bank of Tokyo-Mitsubishi UFJ,Ltd.

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

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

5,150

3.59

4,705

3.28

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

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

Nippon Life Insurance Company

3-5-12, Imabashi, Chuo-ku, Osaka

4,458

3.10

Japan Trustee Services Bank, Ltd. (Trust
Account)

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

4,444

3.09

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 Bank of New York Mellon

C/O THE BANK OF NEW YORK

Corporation as depositary bank fordepositary receipt holders

MELLON
101 BARCLAY STREET, 22ND FLOOR,

2,926

2.04

(Standing Proxy) The Bank of TokyoMitsubishi UFJ, Ltd.

NEW YORK, NY 10286 USA(2-7-1, Marunouchi, Chiyoda-ku, Tokyo)

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

2,732

1.90

44,203

30.82

Total
(Note)

1──────

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 2014. The content of such substantial shareholding report (the amended report) is as follows:-62-

Name of Shareholder
The Bank of Tokyo-Mitsubishi UFJ,

Address

Number of Shares
held by Shareholder Shareholding Ratio(Thousands of(%)
shares)2-7-1, Marunouchi, Chiyoda-ku, Tokyo

6,990

4.87

Mitsubishi UFJ Trust and Banking
Corporation

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

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

842

0.58

14,365

10.01

Ltd.

Mitsubishi UFJ Morgan Stanley
Securities Co., Ltd.

Total

-63-

(8) Status of Voting Rights(i) Shares Issued
As of March 31, 2014
Category
Shares without voting rights
Shares with restricted voting rights –treasury stock, etc.
Shares with restricted voting rights –other

Number of Shares(Shares)Number of Voting Rights(Units)Description

－

－

－

－

－

－

－

－

－
Shareholders haveunlimited standard(Treasury stock)

Shares with full voting rights –－Common stock

treasury stock, etc.

rights. The number ofshares constituting a unit

2,539,000

is 1,000.
Shares with full voting rights – otherCommon stock

139,955

139,955,000
Common stock

Shares less than one unit

884,085

Total number of shares issued

143,378,085

Total voting rights held by all－

Same as above.

－

－

－

shareholders

Same as above.

139,955－(ii) Treasury Stock, etc.
As of March 31, 2014
Name of
Shareholder

Address

Number of
Shares held under
Own Name

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

Shareholding Ratio(%)(Treasury stock)

29 Nakajima-cho,

Wacoal Holdings
Corp.

Kisshoin, Minamiku, Kyoto

2,539,000－

2,539,000

1.77

Total

－

2,539,000－

2,539,000

1.77

-64-

(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 stock

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

acquisition rights
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.

(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.

-65-

(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 acquisitionrightsExercise period
Terms and conditions for exercising the stockacquisition 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 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

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.

-66-

(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

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

Amount to be paid upon exercise of stock acquisitionrightsExercise period
Terms and conditions for exercising the stockacquisition 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 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

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.

-67-

(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 acquisitionrightsExercise period
Terms and conditions for exercising the stockacquisition 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 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

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.

-68-

(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 acquisitionrightsExercise period
Terms and conditions for exercising the stockacquisition 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 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 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.

-69-

(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 acquisitionrightsExercise 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.
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 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.

-70-

2. 【Information on Acquisition, etc., of Treasury Stock】<Class of shares>
Acquisition of shares of common stock by purchase demand for shares less than one unit, which falls under Article 155-7 of theCompanies Act.
(1) Acquisition of Treasury Stock based on a Resolution of Ordinary General Meeting of Shareholders
Not applicable.
(2) Acquisition of Treasury Stock based on a Resolution of Board of Directors
Not applicable.
(3) Acquisition of Treasury Stock not based on a Resolution of Ordinary General Meeting of Shareholders or Board of Directors
Acquisition pursuant to Article 155-7 of the Companies Act
Number of Shares
Total Amount (Yen)
Category(Shares)
Treasury stock acquired during the current fiscal year
Treasury stock acquired during the current period(Note)

5,993

6,190,765

100

101,400

Treasury stock acquired during the current period does not include shares constituting less than one full unit purchased during
the period from June 1, 2014, 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
Acquired treasury stock that was canceled
Acquired treasury stock that was transferred due tomerger, stock swap, or company split
Other (Note 2)
Number of shares of treasury stock held
(Note)

－

－

－

－

－

－

－

－

－

－

－

－

350

386,400－－

2,539,371－

2,539,471－

1

Number of shares of treasury stock held during the current period does not include shares constituting less than one full unit

2purchased or sold during the period from June 1, 2014, to the filing date of this report.
As for the current fiscal year, the number of shares in this row is the number of shares of treasury stock disposed of bypurchase demand for shares less than one full unit.

-71-

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 (an ordinary dividend of 30.00 yen and acommemorative dividend of 3.00 yen) as a distribution of earnings for the current fiscal year. We have decided to pay acommemorative dividend in commemoration of the 50th anniversary of our listing in September 2014, in order to return profits to ourshareholders for their support.
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 13,2014

4,647

Resolution of Board of Directors’ meeting

33.00

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

62nd

63rd

64th

65th

66th

Year EndMarch 2010

March 2011

March 2012

March 2013

March 2014

Highest (yen)

1,340

1,240

1,066

1,056

1,128

Lowest (yen)

928

890

903

842

938

(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 2013

November 2013

December 2013

January 2014

February 2014

March 2014

Highest (yen)

1,058

1,128

1,122

1,123

1,108

1,096

Lowest (yen)

988

1,040

1,036

1,057

995

1,000

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

-72-

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

President andRepresentative
Director

Name

Yoshikata
Tsukamoto

Date of Birth

Jan. 29, 1948

Business Experience and Position(s) and Office(s)Apr. 1972
Nov. 1977
Nov. 1981
Sep. 1984
Sep. 1984
Jun. 1987
Jun. 2002
Oct. 2005
Apr. 2011
Dec. 2012
Jan. 2014
Apr. 1965
Jun. 1992
Jul. 1993
Jun. 2001

Director and Vice
President

Hideo
KawanakaJun. 2004
Jun. 25, 1942
Jun. 2007
Jun. 2007
Nov. 2007
Apr. 2008
Jun. 2009
Mar. 2011
Apr. 2011
Jun. 2011
Mar. 1975
Sep. 1996
Apr. 1997
Apr. 2004
Apr. 2005
Apr. 2006
Jun. 2006

Senior Managing
Director

Hironobu
Yasuhara

Dec. 28, 1951
Apr. 2008

Aug. 2009

Apr. 2010

Apr. 2011
Jun. 2011
Jun 2013

Joined Wacoal Corp.
Director
Managing Director
Executive Vice President
Representative Director (acting)President and Director (acting)Corporate Officer
Representative Director and President, and Corporate
Officer of Wacoal Corp.
Representative Director and Chairman of Wacoal Corp.
(acting)
Representative Director, Chairman, and President of
Peach John Co., Ltd.
Representative Director and Chairman of Peach John
Co., Ltd. (acting)
Joined Isetan Co., Ltd.
Director of Isetan Co., Ltd.
Matsudo Branch Manager
Representative Director and President of West Japan
Railway Isetan Ltd.
Corporate Officer and Managing Director, General
Manager of Management and General Affairs of
OMRON Corporation
Representative Director and Senior Manager, and SalesManager of Matsuzakaya Co., Ltd.
Adviser
Senior Managing Director
Director and Senior Corporate Officer of Wacoal Corp.
Director and Vice President, and Corporate Officer of
Wacoal Corp.
Director and Vice President and Supervisor of BusinessRestructuring (acting)
Representative Director and Chairman of Peach John
Co., Ltd.
Director and Vice Chairman of Wacoal Corp.
Representative Director, Chairman and President of
Peach John Co., Ltd.
Joined Wacoal Corp.
Deputy General Manager of Guandong Wacoal Inc.
General Manager of Wacoal China Co., Ltd.
Chief of Planning & Product Group of Wing Brand
Business Department
Corporate Officer/General Manager of Wing Brand
Business Department
Executive Corporate Officer/General Manager of Wing
Brand Business Department of Wacoal Corp.
Director and Executive Corporate Officer of Wacoal
Corp./General Manager of Wing Brand Business
Department
Director and Senior Corporate Officer of Wacoal
Corp./General Manager of Wing Brand Business
Department
Director and Senior Corporate Officer of Wacoal
Corp./General Manager of Wing Brand Business
Department/Representative Director and Chairman of
Lecien Corporation (part-time)
Director and Senior Corporate Officer of Wacoal
Corp./General Manager of Wacoal Brand Business
Department
Representative Director and President, and Corporate
Officer of Wacoal Corp. (acting)Director
Senior Managing Director (acting)-73-

Number of
Office Shares Owned
Term (Thousands ofshares)

Note 1

1,356

Note 1

15

Note 19

Apr. 1977
Apr. 2001
Apr. 2006
Apr. 2008

Apr. 2010
Managing
Director

Yuzo Ide

Sep. 24, 1954
Apr. 2012

Jun. 2012
Apr. 2014

Jun. 2014
Apr. 1979
Apr. 2004
Apr. 2005

Apr. 2006
Managing
Director

MasayaWakabayashi

Jan. 6, 1956

Apr. 2008
Apr. 2010

Jun. 2014
Jun. 1991
Jun. 1992
May 1994
Oct. 1999
Feb. 2003
Jul. 2003
Jun. 2005

Commissioner of the National Tax Agency
Administrative Vice Minister of FinancePresident of People’s Finance Corporation
President of National Life Finance Corporation
Advisor to Yazaki Corporation (acting)
AdvisorDirector (acting)Sep. 1972
Jun. 1982

Joined HORIBA, Ltd.
Director and General Manager of Overseas Business of
HORIBA, Ltd.
Senior Managing Director and General Manager ofSales Division of HORIBA, Ltd.
Representative Director and President of HORIBA, Ltd.
Representative Director, Chairman and President of
HORIBA, Ltd. (acting)Director (acting)Apr. 2013
Apr. 2014

Director

Mamoru Ozaki

Atsushi Horiba

May 20, 1935

Feb. 5, 1948

Jun. 1988
Jan. 1992
Jun. 2005
Jun. 2008

Standing Audit &Supervisory
Board Member

MitsuoYamamoto

Jan. 8, 1955

Apr. 1977
Apr. 2005
Apr. 2008
Apr. 2011
Jun. 2011

Standing Audit &Supervisory
Board Member

TomokiNakamuraJan. 22, 1958

Joined Wacoal Corp.
Group Chief of Business Administration of Direct
Retail Operation Division of Wacoal Corp
Group Chief of Business Administration of DirectlyManaged Retail Store Operation Division of Wacoal
Corp.
Group Chief of Business Administration of Direct
Marketing Operation Department of Wacoal Corp.
General Manager of Corporate Planning
Corporate Officer, Chief of Corporate Planning of
Wacoal Corp.
Director, Corporate Officer, Chief of Corporate
Planning of Wacoal Corp.
Director, Managing Corporate Officer, Chief ofCorporate Planning of Wacoal Corp.
Director, Managing Corporate Officer, Supervisor of
Administration of Wacoal Corp. (acting)Managing Director (acting)Apr. 2011

Director

Joined Wacoal Corp.
Director and Vice Chairman of Wacoal America Inc.
Corporate Officer of Wacoal Corp.
Director and Senior Corporate Officer of Wacoal
Corp./General Manager of Wacoal Brand Business
Department
Director and Senior Corporate Officer of Wacoal
Corp./General Manager of Wing Brand Business
Department
Director and Senior Managing Corporate
Officer/General Manager of International Operations of
Wacoal Corp.
Director and Supervisor of International Operations
Director, Vice President and Corporate Officer,
Supervisor of International Operations/General
Manager of International Operations of Wacoal Corp.
(acting)
Managing Director (acting)Apr. 1980
Oct. 2007
Apr. 2008
Apr. 2012
Jun. 2012

Joined Wacoal Corp.
General Manager of Human Affairs Department
Corporate Officer of Wacoal Corp.
General Manager of Personnel and Administration
Planning Department
Audit & Supervisory Board Member (acting)
Joined Wacoal Corp.
Accounting Manager of Wacoal Corp.
Accounting Manager
Audit & Supervisory Board Member/Secretariat ofBoard of Audit & Supervisory Board Members
Audit & Supervisory Board Member (acting)-74-

Note 15Note 1

16

Note 1－

Note 1

3Note 3

7Note 475

Apr. 1968
Jun. 1995
Apr. 1996
Feb. 2000
Audit &
Supervisory
Board Member

Akira
Katayanagi

May 2001
Feb. 4, 1946
Jun. 2003
Apr. 2007
Jun. 2008
Jun. 2010
Jun. 2011

Audit &
Supervisory
Board Member

Tomoharu Kuda

Dec. 7, 1946

Audit &
Supervisory
Board Member

Yoko Takemura

Apr. 7, 1952

Joined Mitsubishi Bank Ltd.
Director and Manager of Loan Department 1
Director of The Bank of Tokyo-Mitsubishi, Ltd.
Managing Director and Deputy Branch Manager of
Nihonbashi BranchManaging Director and Deputy Branch Office Manager
of Osaka Branch Office
Representative Director and President of DC Card Co.,
Ltd.
Representative Director and Vice President of
Mitsubishi UFJ NICOS Co., Ltd.
Representative Director and Chairman of Mitsubishi
UFJ NICOS Co., Ltd.
Audit & Supervisory Board Member (acting)Special Adviser of Mitsubishi UFJ NICOS Co., Ltd.
(acting)

Sep. 1972
Oct. 1979
Sep. 1987
Feb. 1990
Jun. 1997
Jul. 2007

Joined Deloitte Haskins & Sells
Registered as Certified Public Accountant
Transferred to London OfficePartner of Deloitte Touche Tohmatsu
Representative Partner of Deloitte Touche Tohmatsu
Audit & Supervisory Board Member (acting)Apr. 1990

Registered as Lawyer (Tokyo), joins Miyake Imai Ikeda
Law Firm
Partner at Miyake Imai Ikeda Law Firm (acting)
Audit & Supervisory Board Member (acting)Jan. 1997
Jun. 2005

Note 6

5Note 3－Note 515

1,506(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 27, 2014.
Directors Messrs. Mamoru Ozaki and Atsushi Horiba 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 29, 2011.
The term of office of an Audit & Supervisory Board Member is four years from the conclusion of the Ordinary General
Meeting of Shareholders held on June 28, 2012.
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 to be held on June 27, 2014.
Audit & Supervisory Board Members Mr. Akira Katayanagi, Mr. Tomoharu Kuda, and Ms. Yoko Takemura are Outside
Audit & Supervisory Board Members.

-75-

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 from the perspective of all
stakeholders, including our shareholders and customers.
(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 two Outside Directors). Their roles are to supervise
and make business judgments from an objective perspective. We have been working to enhance the supervisory function and to
improve the decision-making process. Further, the term of office of each Director is one year for the purpose of clarifying the
responsibilities of our management, and establishing a management system that may respond promptly to changes in thebusiness 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). Their function is tomonitor and supervise our management.
We have designated the above-stated two Outside Directors and three Outside Audit & Supervisory Board Members(i.e., five 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 and-conducts preliminary reviews of matters for review by our Board of Directors.
Furthermore, with respect to the nomination, promotion, and remuneration of Directors, an “Executive
Compensation Advisory Committee,” whose members include Outside Directors, has been established andoperates with a high degree of transparency and fairness.

The following diagram illustrates the outline of our corporate governance system:-76-

As of June 27, 2014
<General Meeting of Shareholders><Board of Directors>
Directors: 5
Outside Directors: 2
Audit & Supervisory
Board Members: 5<Group Management
Meeting>
Directors: 5
Audit & Supervisory
Board Members: 2<Audit &Supervisory Board>
Audit & Supervisory
Board Members: 2
Outside Audit &Supervisory Board
Members: 3

President
Office for
Audit & Supervisory
Board

Business Companies

Business Companies

Business Companies

Business Companies

Risk Management
Committee

Corporate Ethics Committee

Corporate ethics hotline

Compliance Division-77-

Audit Office

Accounting Auditors

Executive Compensation
Advisory Committee<Group Strategy
Committee>
Directors: 5
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 an “Audit & Supervisory Board Member
system,” which consists of five Audit & Supervisory Board Members including Outside Audit & Supervisory Board Members.
For the foregoing 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 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 Company and the Wacoal Group comply with laws and regulations andthe Articles of Incorporation and conduct business based on sound social norms, we have enacted the “Wacoal Code of
Ethics” and the “Corporate Ethics: Wacoal’s Code of Conduct.”-

Directors will take the initiative to ensure compliance and awareness of corporate ethics within the Wacoal Group.
In order to improve our system of compliance and consider any compliance issues that may have a material impact on the
Company and the Wacoal Group, we have established the Corporate Ethics Committee, which seeks to increaseawareness of and educate employees about corporate ethics. Our representative Director and president acts as the-chairperson, and our legal/compliance department is in charge of the committee.
We have established a system under which our legal/compliance department is promptly notified if the Company
becomes aware that a Director and/or employee of the Company and the Wacoal Group may have violated the “Wacoal
Code of Ethics” or the “Corporate Ethics: Wacoal’s Code of Conduct”, or of any other compliance issues. We have alsoestablished an internal alert system (a corporate ethics hotline). After being notified and/or alerted, the legal/compliancedepartment conducts an investigation and formulates preventive measures after discussions with the related department.
If the issue is critical, the legal/compliance department will refer the matter to the Corporate Ethics Committee and willreport the results of its deliberation to the Board of Directors and/or Audit & Supervisory Board.

-

Wacoal’s Code of Conduct prescribes that Directors, officers, and employees shall firmly refuse to comply with demandsof antisocial forces and as a rule of conduct for risk management practices, our Risk Management Manual prescribes thatnone of Directors, officers, and employees shall have any relationship with antisocial forces. In order to handle unjust
demands of antisocial forces, we cooperate with Outside specialized institutions, collect and/or control information
related to antisocial forces, and are building an internal system.

(System concerning the Storage and Management of Information related to Execution of Duties by Directors)-

With the approval of the Board of Directors, we have enacted the Document Management Rules pursuant to which 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 for storage of the documents prescribed in the preceding paragraph shall be 10 years. The storage ofthese documents shall be subject to the Document Management Rules, and the Directors and Audit & Supervisory Board
Members shall have access to these documents at all times.

(Rules and Other Systems Concerning Loss and Risk Management)
In order to understand the management risk within the group in general and to improve and/or strengthen our risk
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 group.

-78-

-

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 making 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 group and-will direct and confirm courses of action and business targets in the mid to short term that are consistent with such plan.
We will follow the business results of each group company on a monthly basis and report back to the Board of Directors.
In addition, by holding quarterly business meetings, we will 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 benecessary.

(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 our Board of Directors, as-well as matters to be reported to the Company.
We conduct any inter-company transaction fairly in compliance with laws and regulations, accounting principles, and the-tax system.
Our audit office will conduct internal audits, including an audit of the establishment and/or operation of our compliancesystem and risk management system, within the group companies. 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 to groupcompanies to ensure the appropriate conduct of business.

(Matters Concerning Assistants to Audit & Supervisory Board Members and Matters Concerning Independence of such
Assistants from Directors)
To assist the Audit & Supervisory Board Members, we have established an office for our Audit & Supervisory Board and-appointed assistants to assist them.
The Audit & Supervisory Board Members will be consulted regarding the appointment, evaluation, relocation, anddiscipline of such assistants, and their opinions will be respected.

(Reporting System of Directors and Employees to the Audit & Supervisory Board Members, Other Reporting System to Audit &Supervisory Board Members, and other Systems to Ensure Effective Audit by Audit & Supervisory Board Members)
Through the reporting of the following matters in addition to statutory matters to the Audit & Supervisory Board
Members by Directors and employees, we strive to have the Audit & Supervisory Board Members’ audits conductedeffectively:
matters referred to the Group Management Meeting;matters that may have a material impact on the group;
monthly and quarterly management conditions;
results of internal audits;material violation of laws or regulations and/or our Articles of Incorporation;
status of our internal reporting/alerting system; and-other significant matters.
The majority of the Audit & Supervisory Board Members will be independent Outside Audit & Supervisory Board-

Members to enhance the transparency and neutrality of management.
The Audit & Supervisory Board Members may order employees who belong to the audit office to perform any matters-that are required to provide audit services.
The Audit & Supervisory Board may consult legal counsel, certified public accountants, consultants, or other outsideadvisers as it deems necessary.

D.

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:-79-Names of the certified public accountants who were engaged in the audit:
Designated LLC Partners and Engagement Partners: Fumihiko Kimura, Koichiro Tsukuda, Akiyo Shimoida
Composition of the assistants for the audit services:
Six certified public accountants and other 21 persons
E.

Matters Concerning Limitation of Liability Agreements with Outside Directors and Outside Audit & Supervisory Board
Members
In order to have excellent persons as Outside Directors and Outside Audit & Supervisory Board Members, our Articles
of Incorporation prescribe that we may execute a limitation of liability agreement with Outside Directors and Outside Audit &Supervisory Board Members to limit their liability for damages in certain instances, and Outside Directors and Outside Audit &Supervisory Board Members have executed such agreement with the Company.
A summary of the above-mentioned limitation of liability agreement is as follows:- The maximum amount of liability for damages incurred due to negligence of duties by the Outside Director or theOutside Audit & Supervisory Board Member shall be the minimum liability amount as provided by Paragraph 1,
Article 427 of the Companies Act.
-The foregoing limitation of liability shall be accepted only if the Outside Director or the Outside Audit &Supervisory Board Member is in good faith and is not grossly negligent in performing his or her business duties.

F.

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

G.

Decision-Making Body for Distribution of Earnings, etc.
Our Articles of Incorporation prescribe that matters set out in each Item of Paragraph 1, Article 459 of 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 that
resolutions to appoint Directors shall not be adopted by cumulative voting.
I.

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
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 27, 2014, was 13.
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. Tomoharu Kuda is qualified as a certified public accountant with a considerable degree of finance and accounting
knowledge as well.

-80-

(iii)

Outside Directors and Outside Audit & Supervisory Board Members
We have two Outside Directors and three Outside Audit & Supervisory Board Members.
We have elected those persons having experiences in corporate management who excel in financial administration
and/or overseas business development to our Outside Directors, and each of such persons takes a role in improving theappropriateness of the decision making by the Board of Directors by giving objective and independent advice based on their longcareers in each business area and extensive professional knowledge. Also, we have elected those persons who have experiences
as business administrators in financial services, independent certified public accountants having a considerable degree of financeand accounting knowledge independently from us, or attorneys at law to our Outside Audit & Supervisory Board Members.
Each Outside Audit & Supervisory Board Member conducts a strict audit on the legality of Directors’ decision making andperformance of their businesses from a technical perspective by maintaining high levels of independence.
Although we have not yet established standards or policies on the independence of our Outside Directors and Outside
Audit & Supervisory Board Member, we have elected our Outside Directors and Outside Audit & Supervisory Board Members
after confirming that the independence is ensured, by reference to the requirements for the independent officers prescribed in therules, etc., of the Tokyo Stock Exchange. Thus, we have notified our two Outside Directors and three Outside Audit &Supervisory Board Members to the Tokyo Stock Exchange.
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. To our
Audit & Supervisory Board Members, we have appointed full-time assistants to assist them and adopted such system so as toenable us to support them, including the Outside Audit & Supervisory Board Members. The prior explanations on the proposals
presented to the Board of Directors’ meetings are made by our Audit & Supervisory Board Members and their assistants.
Each one of our Outside Directors and two of our Outside Audit & Supervisory Board Members hold 3,000 and 20,000
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, in relation to our general shareholders, he shall not have any
vested interest that might cause a conflict of interest and would be able
to fulfill his duties as independent officer by keeping “independence.”
For these reasons, we have 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, in relation to our general shareholders, he shall not have any
vested interest that might cause conflict of interest and would be able
to fulfill his duties as independent officer by keeping “independence.”
For these reasons, we have designated him 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, in relation to our general shareholders, he shall not have any
vested interest that might cause conflict of interest and would be able
to fulfill his duties as independent officer by keeping “independence.”
For these reasons, we have designated him as an independent officer.

-81-

Outside Audit &Supervisory Board Member

Tomoharu Kuda

We believe that he is qualified to be our Outside Audit & Supervisory
Board Member, as he is able to serve as a supervisor and adviser of ourmanagement with his expertise in accounting and finance cultivated asa certified public accountant.
Further, he had served as arepresentative partner of Tohmatsu, our accounting auditor, until June30, 2007, and left Tohmatsu on June 30, 2007. We determined that hemeets the requirements for being an independent officer and designatedhim as an independent officer, taking into account the following: that
he had not been directly involved with the audit of the Company
during his career with Tohmatsu, that he keeps independence andneutrality in relation to our general shareholders who are involved in
our management, and that he has fulfilled his duties as a supervisor andadviser for our management since assuming his position as our Audit& Supervisory Board Member with his accounting and financial
professional knowledge cultivated as a certified public accountant. For
these reasons, we have 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, in relation to our general shareholders, she shall not have any
vested interest that might cause conflict of interest and would be able
to fulfill her duties as independent officer by keeping “independence.”
For these reasons, we have designated her 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:

Category of Officers

Directors(Excluding Outside
Directors)
Audit & Supervisory Board
Members(Excluding Outside Audit &Supervisory Board
Members)
Outside officers(Note)

Aggregate
Aggregate Amount of Remunerations, etc., by Type Thereof
Amount of(Millions of yen)
Remunerations,etc. (Millions ofRetirement
Basic
Stock Option
Bonus
yen)
Allowance
Remuneration

Number of
Relevant
Officers

340

212

46

82

－

5

30

30

－

－

－

2

41

41

－

－

－

6

As of March 31, 2014, the numbers of Directors, Audit & Supervisory Board Members, and Outside Officers were five,
two, and five, respectively. These numbers do not match the numbers described above because the numbers describedabove include one Outside Audit & Supervisory Board Member who had passed away as of May 20, 2013.

-82-

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:

Name

Category of
Officers

Relevant
Company

Amount of Consolidated Remunerations, etc., by Type
Thereof (Millions of yen)

Basic
Stock Option
Remuneration
Yoshikata
TsukamotoDirector
Director

C.

WacoalHoldings
Corp.

108

Wacoal Corp.

24

Retirement
Allowance

Bonus

22

Aggregate
Amount ofConsolidated
Remunerations, etc.
(Millions of
yen)

－

40

195
－

－

－

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 Outside Directors, 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)

Information on Shareholdings
The status of the shareholding by the Company is as follows:A.

Equity securities held for purposes other than pure investment (including unlisted shares):
Number of stock names:
Three stock names
Total amount recorded in the balance sheet:B.

5 million yen

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 2013
Specified investment stocks:
Stock NameThe Dai-ichi Life Insurance Company,
LimitedNumber of Shares(shares)Amount Recorded in
the Balance Sheet(Millions of yen)

21

3

-83-

Purpose of Holding
Maintaining and enhancing business
transactions

Fiscal Year 2014
Specified investment stocks:
Stock NameThe Dai-ichi Life Insurance Company,
Limited(Note)

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

2,100

3

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 2013 and the fiscal year 2014, as well as the amount ofdividends received, the gain/loss on sale, and the valuation gain/loss for fiscal year 2014 of equity securities held for pureinvestment are as follows:
N/A.

D.

E.

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.

-84-

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.

B.

Equity securities held for purposes other than pure investment (including unlisted shares):
Number of stock names:
114 stock names
Total amount recorded in the balance sheet:
44,880 million yen
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 2013
Specified investment stocks:
Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)KDDI Corporation

1,347,000

5,213Bank of Kyoto, Ltd.

2,849,985

2,616

Nissin Foods Holdings Co., Ltd.

575,100

2,522

Kyocera Corporation

222,950

1,964

1,516,765

1,843

Aeon Credit Service Co., Ltd.

687,300

1,838

Isetan Mitsukoshi Holdings Ltd.

1,315,769

1,787

Mitsubishi UFJ Financial Group, Inc.

2,885,850

1,610

Shiga Bank, Ltd.

2,312,040

1,484

Kokuyo Co., Ltd.

1,509,400

1,090

132,000

900

Takara Holdings Inc.

1,000,000

790

J. Front Retailing Co., Ltd.

1,082,776

789

Heiwado Co., Ltd.

514,531746

Tokio Marine Holdings, Inc.

274,000

726

Horiba, Ltd.

230,000

662

Mitsubishi UFJ Lease & Finance
Company Limited

132,000

656

H2O Retailing Corporation

618,691

629

Chori Co., Ltd.

548,890585

Toppan Printing Co., Ltd.

852,000

576

Shimadzu Corporation

825,000

554

Stock Name

Aeon Co., Ltd.

Taisho Pharmaceutical Holdings Cp.,
Ltd.

-85-

Purpose of Holding
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperative andbusiness relationship in business deployment
Maintaining and establishing cooperative andbusiness relationship in business deployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperative andbusiness relationship in business deployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions

Fukuyama Transporting Co., Ltd.

1,022,000

548

Shiseido Co., Ltd.

383,000

508

Seven & i Holdings Co., Ltd.

154,939

483

Dainippon Screen Mfg. Co., Ltd.

1,085,898

471

Hisamitsu Pharmaceutical Co., Inc.

90,000463

Odakyu Electric Railway Co., Ltd.

395,000

463

Saha Pathana Inter-Holding PCL

4,940,000

439

Tokyo Broadcasting System Holdings,
Inc.

310,700

438

Asahi Kasei Corporation

598,195376

2,677,300

368

Onward Holdings Co., Ltd.

435,000

367

Hankyu Hanshin Holdings, Inc.

601,000

342

Aoyama Trading Co., Ltd.

141,500

335

Chuo Warehouse Co., Ltd.

381,300

322

Matsuya Co., Ltd.

205,000

314

Ezaki Glico Co., Ltd.

319,000

311

NTT DoCoMo, Inc.

2,092

297

Sanyo Shokai Ltd.

1,000,000

293

Autobacs Seven Co., Ltd.

188,400

283

Yomeishu Seizo Co., Ltd.

341,000

282

1,000,000

273

Nissha Printing Co., Ltd.

147,000

244

Nichikon Corporation

296,500

238

Nippon Shinyaku Co., Ltd.

175,000

234

Seino Holdings Co., Ltd.

283,000

230

Ono Pharmaceutical Co., Ltd.

26,000149

Marui Group Co., Ltd.

151,487

148

I.C.C INTERNATIONAL PCL

Kintetsu Department Store Co., Ltd.

-86-

Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperative andbusiness relationship in business deployment
Maintaining and establishing cooperative andbusiness relationship in business deployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperative andbusiness relationship in business deployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperative andbusiness relationship in business deployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions

Stocks deemed to be held:
Stock NameKDDI Corporation

Mitsubishi UFJ Financial Group, Inc.

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

848,000

3,282

3,365,000

1,878

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 and stocks
deemed to be held have not been combined.
Fiscal Year 2014
Specified investment stocks:
Number of Shares(Shares)Amount Recorded in
the Balance Sheet(Millions of yen)

1,347,000

8,049

575,100

2,677

Bank of Kyoto, Ltd.

2,849,985

2,428

Kyocera Corporation

445,900

2,074

Aeon Co., Ltd.

1,521,630

1,769

Isetan Mitsukoshi Holdings Ltd.

1,315,769

1,676

Mitsubishi UFJ Financial Group, Inc.

2,885,850

1,636

687,300

1,599

Shiga Bank, Ltd.

2,312,040

1,294

Kokuyo Co., Ltd.

1,509,400

1,139

Taisho Pharmaceutical Holdings Cp.,
Ltd.

132,000

1,096

Horiba, Ltd.

230,000

894

Tokio Marine Holdings, Inc.

274,000

848

Takara Holdings Inc.

1,000,000

787

J. Front Retailing Co., Ltd.

1,082,776

768

Shimadzu Corporation

825,000

756

Heiwado Co., Ltd.

514,531746

Shiseido Co., Ltd.

383,000

695

1,320,000

667

Stock NameKDDI Corporation
Nissin Foods Holdings Co., Ltd.

Aeon Financial Service Co., Ltd.

Mitsubishi UFJ Lease & Finance
Company Limited-87-

Purpose of Holding
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions

Fukuyama Transporting Co., Ltd.

1,022,000

633

Toppan Printing Co., Ltd.

852,000

629

Chori Co., Ltd.

548,890

616

Seven & i Holdings Co., Ltd.

154,939611

1,085,898

517

H2O Retailing Corporation

618,691509

Ezaki Glico Co., Ltd.

319,000

436

Asahi Kasei Corporation

598,195

419

Hisamitsu Pharmaceutical Co., Inc.

90,000419

Aoyama Trading Co., Ltd.

141,500

383

Kintetsu Department Store Co., Ltd.

1,000,000

373

Tokyo Broadcasting System Holdings,
Inc.

310,700

370

Saha Pathana Inter-Holding PCL

4,940,000

353

Odakyu Electric Railway Co., Ltd.

395,000

351

Chuo Warehouse Co., Ltd.

381,300

348

Nippon Shinyaku Co., Ltd.

175,000

342

NTT DoCoMo, Inc.

209,200

340

I.C.C INTERNATIONAL PCL

2,677,300

339

Hankyu Hanshin Holdings, Inc.

601,000

337

Yomeishu Seizo Co., Ltd.

341,000

335

Onward Holdings Co., Ltd.

435,000

311

1,000,000

301

Autobacs Seven Co., Ltd.

188,400

299

Seino Holdings Co., Ltd.

283,000

278

Nichikon Corporation

296,500

242

Ono Pharmaceutical Co., Ltd.

26,000232

Dainippon Screen Mfg. Co., Ltd.

Sanyo Shokai Ltd.

-88-

Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and enhancing business
transactions
Maintaining and establishing cooperativeand business relationship in businessdeployment
Maintaining and establishing cooperativeand business relationship in businessdeployment

Nissha Printing Co., Ltd.

147,000

199

Matsuya Co., Ltd.

205,000

175

TSI Holdings Co., Ltd.

216,645

147

Marui Group Co., Ltd.

151,487134

IZUMI Co., Ltd.

43,748133

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

848,000

5,067

3,365,000

1,907

Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions

Stocks deemed to be held:
Stock NameKDDI Corporation

Mitsubishi UFJ Financial Group, Inc.
(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.

C.

Total amount recorded in the balance sheet for the fiscal year 2013 and the fiscal year 2014, as well as the amount ofdividends received, the gain/loss on sale, and the valuation gain/loss for fiscal year 2014 of equity securities held for pureinvestment are as follows:

D.

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.

E.

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.

(2)

【Audit Fees】(i)【Fees to Certified Public Accountants】
Fiscal Year Ended March 31, 2013
Category
Fees for Audit Services(Millions of yen)

Fiscal Year Ended March 31, 2014

Fees for Nonaudit
Services(Millions of yen)

Fees for Audit Services(Millions of yen)

Fees for Nonaudit
Services(Millions of yen)

The Company

140

13

131

6

Consolidated
subsidiaries

14

－

14

－

Total

154

13

145

6

(ii)【Other fees】(Fiscal year ended March 31, 2013)
Wacoal International Corp., one of the Company’s consolidated subsidiaries, and its consolidated subsidiaries paid 48
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, 2014)
Wacoal International Corp., one of the Company’s consolidated subsidiaries, and its consolidated subsidiaries paid 49
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.
-89-

(iii)【Description of nonaudit services provided to the Company】(Fiscal year ended March 31, 2013)
Nonaudit services provided to the Company by the certified public accountants, etc., for which the Company paid fees
were consulting services related to the internal control of the Company’s subsidiaries and other services, which are out of thoseservices that are set forth in Paragraph 1, Article 2 of the Certified Public Accountants Act.
(Fiscal year ended March 31, 2014)
Nonaudit services provided to the Company by the certified public accountants, etc., for which the Company paid fees
were consulting services related to the internal control of the Company’s subsidiaries and other services, which are out of thoseservices 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.

-90-

V. 【Financial Information】
1. 【Consolidated Financial Statements】
Consolidated Balance Sheets
March 31, 2014 and 2013

Millions of Yen
2014
2013

ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Time deposits
Marketable securities (Notes 3, 19 and 20)
Notes and accounts receivable (Note 17)
Allowance for returns and doubtful receivables (Note 4)Inventories (Note 5)
Deferred income taxes (Note 16)
Other current assets (Notes 17, 19 and 20)
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¥

30,6582,168
3,523
26,269(2,321 )40,211
4,848
4,132
109,488¥

24,514
1,914
4,601
23,935(1,882 )37,903
4,817
7,785
103,587

Thousands of
U.S. Dollars(Note 2)2014$

LIABILITIES AND EQUITYCURRENT LIABILITIES:
Short-term bank loans (Note 9)
Notes and accounts payable:
Trade notes
Trade accounts (Note 17)
Other payables
Accrued payroll and bonuses
Income taxes payable (Note 16)
Current portion of long-term debt (Notes 9 and 19)
Other current liabilities (Notes 19 and 20)

297,708
21,05334,211
255,088(22,538 )
390,474
47,077
40,124

16,630$¥16,351

161,488

1,064
10,657
5,764
7,085
1,224
695
3,489

1,442
10,961
6,008
6,927
4,559
898
3,358

10,332
103,486
55,97268,80011,886
6,749
33,880Total current liabilities

46,60850,504

452,593

LONG-TERM LIABILITIES:Long-term debt (Notes 9 and 19)
Liability for termination and retirement benefits (Note 12)
Deferred income taxes (Note 16)
Other long-term liabilities (Notes 11, 12 and 16)

822
1,795
13,611
1,616

1,516
1,802
10,201
1,688

7,982
17,431132,171
15,692

17,844

15,207173,276

13,26029,587
151,468

13,26029,514145,306

128,763
287,308
1,470,849

2,310
11,606(227 )
13,689(5,924 )
9,310(1,928 )1,458

22,432
112,701(2,204 )132,929(2,898 )205,106
2,430
207,536(2,892 )186,646
2,179
188,825(28,142 )
1,991,707
23,5972,015,304¥ 271,988¥ 254,536$ 2,641,173

1,063,197

21,99463,024
15,446
147
100,611(51,633 )

21,94861,498
15,104151
98,701(49,036 )

213,576
612,002
149,990
1,428
976,996(501,389 )

48,97849,665475,607

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

Millions of Yen
2014
2013

Thousands of
U.S. Dollars(Note 2)
2014

COMMITMENTS AND CONTINGENCIES (Notes 9 and 10)
OTHER ASSETS:
Investments in affiliated companies (Note 6)
Investments (Notes 3, 19 and 20)
Goodwill (Notes 7, 8 and 20)
Other intangible assets (Notes 7, 8 and 20)
Prepaid pension expense (Note 12)
Deferred income taxes (Note 16)
Other
Total other assets

18,89445,951
22,723
13,688
5,666
1,008
5,592

17,59942,36820,442
12,899
1,400
1,064
5,512

183,473446,213220,654
132,91955,0209,788
54,302

113,522

101,284

1,102,369

EQUITY:WACOAL HOLDINGS CORP. SHAREHOLDERS' EQUITY(Notes 13 and 22):
Common stock, no par value authorized, 500,000,000 shares in 2014 and 2013; issued
143,378,085 shares in 2014 and 2013
Additional paid-in capital (Note 14)
Retained earnings
Accumulated other comprehensive income (Note 15):
Foreign currency translation adjustments
Unrealized gain on securities
Pension liability adjustments (Note 12)
Total accumulated other comprehensive income
Less treasury stock at cost - 2,539,371 shares and 2,533,728 sharesin 2014 and 2013, respectively
Total Wacoal Holdings Corp. shareholders' equity
NONCONTROLLING INTERESTS
Total equity
TOTAL

TOTAL

¥ 271,988¥ 254,536$ 2,641,173

See notes to consolidated financial statements.
-91-

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Income
Years Ended March 31, 2014, 2013 and 20122014

Millions of Yen
2013

2012

Thousands of
U.S. Dollars(Note 2)2014

¥ 193,781¥ 180,230¥ 171,897$ 1,881,734

91,00888,91384,54884,331
1,197
1,655

81,891
79,629883,744863,401

179,921

171,731

161,520

1,747,145

13,8608,499

10,377

134,589

97(105 )
831
84
(47 )
313

85
(164 )
789
2,208(325 )(152 )

112
(93 )
724
25
(831 )(107 )

942(1,020 )8,070
816(456 )
3,039

1,173

2,441

(170 )

11,391

INCOME BEFORE INCOME TAXES AND EQUITY IN NET INCOME OF AFFILIATED COMPANIES(Note 16)

15,033

10,940

10,207

145,980

INCOME TAXES (Note 16):
Current
Deferred

5,256
385

6,638
(2,866 )

3,523
676

51,039
3,739

5,641

3,772

4,199

54,778

9,392

7,168

6,008

91,202

985

939

1,008

9,565

10,377

8,107

7,016

100,767(271 )(227 )(103 )(2,631 )NET SALES (Note 17)
OPERATING COSTS AND EXPENSES:
Cost of sales (Notes 5, 12 and 17)
Selling, general and administrative expenses (Notes 1, 7, 10, 12 and 14)
Impairment charges on goodwill (Notes 8 and 20)
Impairment charges on other intangible assets (Notes 8 and 20)
Total operating costs and expenses
OPERATING INCOME
OTHER INCOME (EXPENSES):Interest income
Interest expense
Dividend income
Gain or loss on sale or exchange of marketable securities and investments - net (Note 3)
Valuation gain or loss on marketable securities and investments - net (Notes 3 and 20)
Other - net (Notes 1, 3 and 20)
Total other income (expenses) - net

Total income taxes
INCOME BEFORE EQUITY IN NET INCOME OF AFFILIATED COMPANIESEQUITY IN NET INCOME OF AFFILIATED COMPANIES (Note 6)
NET INCOME
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTSNET INCOME ATTRIBUTABLE TO WACOAL HOLDINGS CORP.

¥

10,106

¥

7,880

¥

6,913

$

98,136(Continued)-92-

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Income
Years Ended March 31, 2014, 2013 and 2012

2014

Yen
2013

2012

U.S. Dollars(Note 2)2014

NET INCOME ATTRIBUTABLE TO WACOALHOLDINGS CORP. PER SHARE (Note 18):
Basic
Diluted¥ 71.75¥ 71.61¥ 55.95¥ 55.86¥ 49.08¥ 49.02$ 0.70$ 0.70NET INCOME ATTRIBUTABLE TO WACOALHOLDINGS CORP. PER AMERICANDEPOSITARY RECEIPT(5 shares of common stock) (Note 18):
Basic
Diluted¥ 358.77¥ 358.03¥ 279.74¥ 279.29¥ 245.41¥ 245.12$ 3.48$ 3.48

See notes to consolidated financial statements.

(Concluded)-93-

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Comprehensive Income
Years Ended March 31, 2014, 2013 and 20122014
NET INCOME¥ 10,377

2012

Thousands of
U.S. Dollars(Note 2)
2014

8,107

¥ 7,016$ 100,767

Millions of Yen
2013¥

OTHER COMPREHENSIVE INCOME (LOSS),NET OF TAX (Note 15):
Foreign currency translation adjustments
Unrealized gains on securities
Pension liability adjustments

8,369
2,302
1,701

5,072
5,122
1,048

(782 )
1,602(974 )

81,26822,354
16,518OTHER COMPREHENSIVE INCOME (LOSS)

12,372

11,242(154 )

120,140COMPREHENSIVE INCOME

22,74919,3496,862

220,907(412 )(316 )(79 )(4,001 )¥ 22,337¥ 19,033¥ 6,783$ 216,906

COMPREHENSIVE INCOME ATTRIBUTABLETO NONCONTROLLING INTERESTSCOMPREHENSIVE INCOME ATTRIBUTABLE TOWACOAL HOLDINGS CORP.

See notes to consolidated financial statements.

-94-

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Equity
Years Ended March 31, 2014, 2013 and 2012

BALANCE, APRIL 1, 2011
Net income
Foreign currency translation adjustments
Unrealized gains on securities
Pension liability adjustments
Cash dividends paid to Wacoal Holdings Corp. shareholders, ¥100 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 14)
BALANCE, MARCH 31, 2012
Net income
Foreign currency translation adjustments
Unrealized gains 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
Acquisition of subsidiaries
Equity transactions with noncontrolling interests (Note 13)
Share-based compensation granted and exercised (Note 14)
BALANCE, MARCH 31, 2013
Net income
Foreign currency translation adjustments
Unrealized gains 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
Equity transactions with noncontrolling interests (Note 13)
Share-based compensation granted (Note 14)
BALANCE, MARCH 31, 2014

Shares of
Outstanding
Common Stock(Thousands)
140,848

CommonStock

Additional
Paid-in
CapitalRetained
Earnings¥ 13,260¥ 29,401¥ 137,274

Millions of Yen
Accumulated
Other
TreasuryComprehensive
Income (Loss)Stock¥ (9,565 )¥ (2,890 )

6,913(757 )
1,601(974 )(2,817 )Total Wacoal
Holdings Corp.
Shareholders'EquityNoncontrolling
Interests

Total Equity¥ 167,480¥ 1,900¥ 169,380

6,913(757 )
1,601(974 )

103
(25 )
1

7,016
(782 )
1,602(974 )(2,817 )
(47 )

(15 )
6
12
140,851

46
13,26029,447

141,370(9,695 )

(15 )
5
14

(15 )
5
60

(2,886 )

171,496

1,932

173,428

7,880
4,992
5,113
1,048

227
80
9

8,107
5,072
5,122
1,048

7,880
4,992
5,113
1,048
(3,944 )(3,944 )
(96 )

(11 )
1
17
50

3
140,844

13,26029,514145,306

1,458

(10 )
1

3

17
53

(2,892 )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

8,234
2,296
1,701
(3,944 )208(181 )(3,944 )(148 )(6 )
0

4
69
140,839¥ 13,260¥ 29,587-95-¥ 151,468¥ 13,689(3,944 )
(96 )
(10 )
1
208
(164 )53(10 )1

10,106(6 )
1(2,817 )
(47 )
(15 )
5
60

¥ (2,898 )

(6 )
0
4
69
¥ 205,106(13 )¥ 2,430(3,944 )(148 )
(6 )
0
(9 )
69
¥ 207,536

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Equity
Years Ended March 31, 2014, 2013 and 2012

BALANCE, MARCH 31, 2013

CommonStock

Additional
Paid-in
CapitalRetained
Earnings$ 128,763$ 286,599$ 1,411,012

Net income
Foreign currency translation adjustments
Unrealized gains 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
Equity transactions with noncontrolling interests (Note 13)
Share-based compensation granted and exercised (Note 14)
BALANCE, MARCH 31, 2014

Thousands of U.S. Dollars (Note 2)
Accumulated
Total Wacoal
Other
Holdings Corp.
TreasuryComprehensive
Shareholders'
IncomeStock
Equity$14,158$ (28,083 )

98,136
79,95722,296
16,518(38,299 )Noncontrolling
Interests

Total Equity$ 1,812,449$ 21,159$ 1,833,608

98,136
79,95722,296
16,518

2,631
1,311
58

100,767
81,26822,354
16,518(38,299 )(1,437 )
(59 )
0

39
670
$ 128,763

See notes to consolidated financial statements.

-96-$ 287,308$ 1,470,849$ 132,929$ (28,142 )

(59 )
0
39
670
$1,991,707(125 )$ 23,597(38,299 )(1,437 )
(59 )
0
(86 )
670
$ 2,015,304

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2014, 2013 and 20122014
OPERATING ACTIVITIES:Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Share-based compensation (Note 14)
Provision for returns and doubtful receivables - net
Deferred income taxes
Gain (loss) on sale or disposal of property, plant and equipment - net
Impairment charges on property, plant and equipment (Note 20)
Impairment charges on goodwill (Notes 8 and 20)
Impairment charges on other intangible assets (Notes 8 and 20)
Gain on sale or exchange of marketable securities and investments - net (Note 3)
Valuation gain or loss on marketable securities and investments - net (Notes 3 and 20)
Equity in net income of affiliated companies, less dividends
Changes in assets and liabilities:(Increase) decrease in notes and accounts receivable
Increase in inventories
Decrease (increase) 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¥ 10,377

INVESTING ACTIVITIES:
Increase in time deposits
Decrease in time deposits
Proceeds from sales and redemption of available-for-sale securities
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 property, plant and equipment
Capital expenditures
Payments to acquire intangible assets (Note 8)
Proceeds from sales of other investments
Payments to acquire other investments
Acquisitions of subsidiaries, net of cash acquired and payments to acquire additional shares of a subsidiary (Note 7)
Payments to acquire additional shares of an affiliated company
Other
Net cash provided by (used in) investing activities

¥

¥

7,016

$ 100,767

4,660
60(155 )
676
(35 )
37

48,903
670
3,544
3,739
913

4,888
53
269
(2,866 )
103

(84 )
47
(272 )

1,197
1,655(2,208 )325(359 )(25 )
831(451 )(816 )
456(2,641 )(1,368 )(339 )
636(1,541 )(827 )(3,649 )
20
8,949

1,438
(680 )(215 )(1,905 )(853 )
3,215
145
12,309(1,589 )(1,801 )(377 )
1,973(685 )(513 )
438
10,060(13,284 )(3,292 )6,176(14,964 )(8,031 )(35,434 )195
86,901(2,347 )
2,291
4,685
(57 )
113
(322 )
24(2,265 )(1,199 )762(1,846 )836
1,578(3,828 )334(340 )
64(2,475 )(855 )
767(461 )(17,070 )(253 )
29(23,520 )(515 )
488
8,477(8,707 )
79
(79 )
451
(2,708 )(846 )
90(221 )(22,791 )
22,24745,494(553 )
1,097(3,127 )233(21,995 )(11,643 )
7,400

10,524353(578 )
2,039(2,910 )(10 )1(3,944 )
(96 )
5,379

(690 )
393
(71 )
500
(82 )
(15 )
5
(2,817 )(47 )(2,824 )(455 )(100 )(901 )(6 )0(3,944 )(148 )(5,554 )
¥

8,107

2012

5,036
69
365
385
94

(8 )
(16 )
(3 )
1,658

FINANCING ACTIVITIES:(Decrease) increase in short-term bank loans with three months or less maturity - net
Proceeds from issuance of short-term bank loans with more than three months maturity
Repayments of short-term bank loans with more than there months maturity
Proceeds from issuance of long-term debt
Repayments of long-term debt
Repurchase of treasury stock
Sale of treasury stock
Dividends paid on common stock
Dividends paid to noncontrolling interests
Net cash (used in) provided by financing activities
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS - (Forward)

Millions of Yen
2013

Thousands of
U.S. Dollars(Note 2)
2014

1,091

¥

361

(78 )
(155 )(29 )16,10024(3,467 )¥(100 )(4,418 )(971 )(8,749 )(59 )0(38,299 )(1,437 )(53,933 )$10,594(Continued)-97-

Wacoal Holdings Corp. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended March 31, 2014, 2013 and 20122014

Millions of Yen
2013

2012

Thousands of
U.S. Dollars(Note 2)2014

EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS - (Forward)
¥

1,091

NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS

6,144(5,471 )3,669

59,662

CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR24,51429,98526,316238,046

CASH AND CASH EQUIVALENTS, END OF YEAR

¥ 30,658¥ 24,514¥ 29,985$ 297,708

¥ 98
8,305

¥ 161
4,275

¥ 90
3,702

¥1,450¥126¥429¥3,775¥352

ADDITIONAL CASH FLOW INFORMATION:
Cash paid for:
Interest
Income taxes
NONCASH INVESTING ACTIVITIES:Fair value of certain marketable securities received in
exchange for other marketable securities (Note 3)
Acquisition of fixed assets by assuming payment
obligation
Sales of investments (Note 3)

¥582

¥

361

¥

(100 )$

10,594$952
80,647$5,652

See notes to consolidated financial statements.

(Concluded)-98-

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. There were no material intervening events that occurred with respect to these subsidiaries.
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, 2014, 2013 and 2012 were ¥161
million, ¥(146) million, and ¥(94) million, respectively. They have been included in other - net of otherincome (expenses).

-99-

Marketable Securities and Investments - The Companies classify their marketable securities and investments
into one of three categories: trading, held to maturity or available for sale. Trading securities are bought andheld principally for the purpose of selling them in the near term. Trading securities are recorded at fair value
and unrealized holding gains and losses on trading securities are included in earnings. Held-to-maturity
securities are measured at amortized cost. The Companies classify debt securities as held to maturity only if
the Companies have the positive intent and ability to hold those securities to maturity. Available-for-salesecurities are carried at fair value with a corresponding recognition of unrealized holding gains or losses (netof tax) in accumulated other comprehensive income or loss, a separate component of equity, until realized.
Equity securities that do not have readily determinable fair values are recorded at cost. Gains and losses onsales of investments are computed 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 losses. 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:

2 - 20 years (mainly 5 years)

Depreciation expenses for the years ended March 31, 2014, 2013 and 2012 are ¥3,212 million, ¥3,037 millionand ¥2,913 million, respectively.
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 shall be based on the carrying
amount of the asset at the date it is tested for recoverability, whether in use or under development. The
impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fairvalue. The Companies recorded no impairment charges on long-lived assets for the years ended March 31,
2014 and 2013. The Companies recorded ¥37 million impairment charges on long-lived assets for the year
ended March 31, 2012 which has been included in selling, general and administrative expenses.

-100-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 loss 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 loss 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 are 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 associated estimatedasset retirement costs are capitalized as part of the carrying amount of the long-lived asset and depreciatedover 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. Provisions for termination and retirement benefits include those fordirectors of the Companies.
The Companies do not recognize a gain or loss on settlement of the pension obligation 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.
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.

-101-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.
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, 2014, 2013 and 2012 were ¥5,708 million, ¥5,479 million and ¥5,773 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, 2014, 2013 and 2012 were ¥14,295 million, ¥13,146 million and ¥12,665 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, 2014, 2013 and 2012 were ¥808 million, ¥788 million and¥801 million, respectively, and have been included in selling, general and administrative expenses.
Consumption Taxes - Consumption taxes have been excluded from sales.
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 statement and tax bases of assets and liabilities andtax 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 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.
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.
Subsequent Events - In accordance with the guidance for subsequent events, the Company has evaluatedsubsequent events through June 27, 2014.

-102-

Change of Subsidiaries' Fiscal Year Ends - For the year ended March 31, 2014, certain subsidiaries changed
their fiscal year ends from December 31 to March 31 to more closely conform with the Parent's fiscal year end.
Accordingly, the Companies have retrospectively adjusted the prior periods' consolidated financial statements
to reflect the change. The effect of the retrospective application for the year ended March 31, 2013 was asfollows. There was no cumulative effect of the change on retained earnings as of April 1, 2012.
Millions of Yen
2013
As Originally
Reported
As Adjusted
Consolidated balance sheet:
Total assets
Total liabilities
Total equity
Consolidated statement of income:Net income
Net income attributable to Wacoal Holdings Corp.
Consolidated statement of cash flows:
Operating activities
Investing activities
Financing activities
Cash and cash equivalents, end of the year

¥ 253,803
65,799188,004¥ 254,536
65,711
188,825

7,834
7,623

8,107
7,880

12,741(23,436 )
5,303
24,86012,309(23,520 )5,379
24,514
Yen

Earnings per share:
Net income attributable to Wacoal Holdings Corp.:
Basic
Diluted¥54.1254.04¥55.95
55.86

Reclassifications - Certain reclassifications have been made to the prior years' consolidated financial
statements to conform to the current year's presentation.
Recent Accounting Pronouncements:
Presentation of Comprehensive Income - In February 2013, the Financial Accounting Standards Board"FASB" issued new guidance requiring additional disclosure for the amounts reclassified out of accumulated
other comprehensive income. The guidance required disclosure of changes in accumulated othercomprehensive income by component. It also requires an entity to present information about significant items
reclassified out of accumulated other comprehensive income by component either on the face of the statement
where net income is presented or as a separate disclosure in the notes to the financial statements. The
guidance is effective for fiscal years and interim periods within those years, beginning after December 15,
2012. The Company adopted this guidance from the first quarter beginning from April 1, 2013. The adoptionof this guidance does not have an effect on the Companies' consolidated financial position, result of operations,or cash flows since it relates only to disclosure requirements of accumulated other comprehensive income.
Revenue Recognition - In May 2014, the FASB issued a new accounting guidance related to revenue
recognition. This guidance is based on the principle that revenue is recognized to depict the transfer ofpromised goods or services to customers in an amount that reflects the consideration 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 from contracts with customers. This
guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within annual
periods. The company is currently evaluating the impact of adoption on the Company's consolidated financial
position, result of operations, or cash flows.

-103-

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 ¥102.98 to $1,
the noon buying rate for yen in New York City as of March 31, 2014. 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.

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, 2014 and2013. 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:

2014

Cost

Available-for-sale securities:
Current:
National debt securities andmunicipal bonds
Corporate debt securities
Mutual fund

¥

10
500
2,483

Millions of Yen
Gross
Gross
Unrealized
Unrealized
Gain
Loss

¥ 0
¥

Fair Value

2
428

¥

5

10
502
2,906

Total

¥ 2,993

¥ 430

¥ 5

¥ 3,418

Noncurrent:
Equity securities¥ 23,844¥ 20,333¥ 7¥ 44,170

¥ 3

¥ 102

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

2013

¥ 105
¥ 419

Cost

Available-for-sale securities:
Current:
National debt securities andmunicipal bonds
Corporate debt securities
Mutual fund

¥

10
1,200
2,532

¥ 3

¥ 422

Millions of Yen
Gross
Gross
Unrealized
Unrealized
Gain
Loss

¥

Fair Value

0
0
373

¥ 9
2

¥

10
1,191
2,903

Total

¥ 3,742

¥ 373

¥ 11

¥ 4,104

Noncurrent:
Equity securities¥ 23,927¥ 16,603¥ 4¥ 40,526

¥ 291

¥ 3

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

-104-

¥ 294

There were no available-for-sale and held-to-maturity securities that have been in a continuous unrealized loss
position for more than 12 months as of March 31, 2014 and 2013. Gross unrealized holding losses and fairvalues of available-for-sale and held-to-maturity securities, all of which have been in a continuous unrealized
loss position for less than 12 months as of March 31, 2014 and 2013, were as follows:
Millions of Yen
2014

2013

Fair Value

Gross
Unrealized
Loss

¥ 10

¥ 0

467

5

991
296

¥ 9
2

Total

¥ 477

¥ 5

¥ 1,287¥ 11

Noncurrent:
Equity securities

¥ 144

¥ 7

¥ 157

¥ 4

¥ 102

¥ 3

Available-for-sale securities:
Current:
National debt securities andmunicipal bonds
Corporate debt securities
Mutual fundHeld-to-maturity debt securities:
Current:
Corporate debt securities

Fair Value

¥

Gross
Unrealized
Loss

As of March 31, 2014, the available-for-sale securities in a continuous unrealized loss position are composedof three equity securities and two other securities. The severity of decline was less than 8.1%. The Companies
periodically determine whether a decline in the fair value of available-for-sale and held-to-maturity securities
is deemed to be other than temporary based on criteria that includes the duration of market decline, the extent
to which cost exceeds fair value, the financial position and business outlook of the issuer and the intent andability of the Companies to retain the impaired available-for-sale and held-to-maturity securities for sufficientperiod of time for anticipated recovery in fair value as described in Note 1. No available-for-sale and held-tomaturity securities were identified that meet the Companies' criteria for recognition of an impairment loss onavailable-for-sale and held-to-maturity securities in unrealized loss position presented above. Therefore, theCompanies do not believe the unrealized losses represent an other-than-temporary impairment as of March 31,
2014 and 2013.
Future maturities of debt securities and mutual funds classified as available for sale excluding mutual funds
without fixed maturities as of March 31, 2014, were as follows:
Millions of Yen
Fair
Cost
Value
Due within one year
Due after one year through five years

¥

Total

¥ 1,881

-105-

210
1,671

¥

215
1,778

¥ 1,993

Future maturities of debt securities classified as held to maturity as of March 31, 2014 were as follows:
Millions of Yen
Fair
Cost
Value
Due within one year
Due after one year through five years

¥ 105
419

¥ 102
422

Total

¥ 524

¥ 524

Proceeds from sales of available-for-sale securities and the gross realized gains or losses on the sales ofavailable-for-sale securities during the years ended March 31, 2014, 2013 and 2012, were as follows:
Proceeds from sales of available-for-sale securities during the year ended March 31, 2013, include accounts
receivable of ¥3,775 million, which is included in other current assets on the consolidated balance sheets.

2014
Proceeds from sales of available-for-sale securities
Gross realized gains on sales of available-for-sale securities
Gross realized losses on sales of available-for-sale securities

¥190
64

Millions of Yen
2013
2012
¥5,049
2,164
9

¥180
2

During the years ended March 31, 2013 and 2012, the Companies exchanged certain equity securities for othermarketable securities. The Companies recorded the newly received securities at fair value and recognized again of ¥40 million in the year ended March 31, 2012. There was no gain or loss recognized for the exchangetransaction during the year ended March 31, 2013 as there was no difference between the carrying amount of
the security transferred and the fair value of the security received. There was no exchange of marketablesecurities for the year ended March 31, 2014.
The amount of impairment charges the Companies recognized on available-for-sale securities in which
declines in fair value were other than temporary were ¥47 million, ¥55 million and ¥823 million in the years
ended March 31, 2014, 2013 and 2012, respectively.
Trading Securities - A subsidiary in the United States of America has trading securities consisting of mutual
funds, which are recorded as marketable securities and investments at the fair value of ¥683 million and ¥518
million as of March 31, 2013 and 2012, respectively. There were no trading securities consisting of mutual
funds as of March 31, 2014. The Companies recorded a loss of ¥9 million, and a gain of ¥19 million for theyears ended March 31, 2013 and 2012, respectively, that relate to trading securities still held as of March 31,
2013 and 2012, 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 ¥1,362 million and ¥1,365
million as of March 31, 2014 and 2013, respectively. Investments in nonmarketable equity securities arereviewed 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 ¥261 million and ¥8
million in the years ended March 31, 2013 and 2012, respectively. There was no impairment charges oninvestments in nonmarketable equity securities for the year ended March 31, 2014.

-106-

4.

VALUATION AND QUALIFYING ACCOUNTS
Information related to the Companies' allowance for doubtful receivables was as follows:

2014
Balance at the beginning of the year
Increase due to change in scope of consolidation
Charged to costs and expenses
Balances written-off/reversed¥ 180

Balance at the end of the year

Millions of Yen
2013

2012
¥ 100

32
(11 )

¥ 70
84
49
(23 )

¥ 201

¥ 180

¥ 70

2014

Millions of Yen
2013

2012

Balance at the beginning of the year
Charged to costs and expenses
Balances utilized¥ 1,7022,120(1,702 )¥ 1,390
1,702(1,390 )¥ 1,517
1,390(1,517 )Balance at the end of the year

¥ 2,120¥ 1,702¥ 1,390

9(39 )Information related to the Companies' allowance for returns was as follows:

5.

INVENTORIESThe components of inventories as of March 31, 2014 and 2013, were as follows:
Millions of Yen
2014
2013
Finished products
Work in process
Raw materials¥ 34,504
3,496
2,211

¥ 32,398
3,635
1,870

Total

¥ 40,211¥ 37,903

During the year ended March 31, 2013, a subsidiary in the United States of America settled an insurance claim
and received cash proceeds of ¥383 million related primarily to merchandise damaged by the impact ofHurricane Sandy, which made landfall in the Northeast of the United States of America on October 29, 2012.
The subsidiary recorded the proceeds from the insurance settlement in cost of sales in the consolidated
statements of income for the year ended March 31, 2013.
6.

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.

-107-

The primary affiliated companies and percentage of ownership as of March 31, 2014 and 2013, were as
follows:
Percentage of Ownership (%)
2014
2013

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, 2014 and 2013, were as follows:
Millions of Yen
2014
2013
Carrying amount
Aggregate value of quoted market price¥11,969
10,461¥10,787
8,650

The following tables represent the affiliated companies' summarized information from the balance sheets as ofMarch 31, 2014 and 2013, and statements of income for the years ended March 31, 2014, 2013 and 2012.
Millions of Yen
2014
2013
Current assets
Noncurrent assets¥ 42,464
38,787¥ 37,653
32,341

Total¥ 81,251¥ 69,994

Current liabilities
Long-term liabilities
Equity

¥

¥

Total

¥ 81,251¥ 69,994

2014

Millions of Yen
2013

2012

¥60,257
31,011
3,664
2,503¥53,229
27,8193,921
2,955¥51,690
27,765
4,753
3,302

Net sales
Gross profit
Income before income taxes
Net income

8,578
8,984
63,6897,763
7,098
55,133

Dividends received from the affiliated companies were ¥713 million, ¥580 million and ¥557 million during theyears ended March 31, 2014, 2013 and 2012, respectively.
Retained earnings include net undistributed earnings of affiliated companies in the amount of ¥15,458 millionand ¥15,193 million as of March 31, 2014 and 2013, respectively.

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7.

ACQUISITIONS
Eveden - On April 10, 2012, the Company acquired all of the shares of Eveden Group Limited (currently
Wacoal Eveden Limited, "Eveden"), which manufactures and sells innerwear and swimsuits for women in
Europe and the United States of America in the amount of ¥19,961 million, inclusive of ¥2,581 million offunds to repay Eveden's preexisting debts and of ¥3,597 million to acquire the preferred shares and made it theCompany's wholly owned subsidiary. The acquisition aims to expand the Company's overseas operations.
This will enable the group to accelerate the Company's globalization strategy and to expand the target
customer segment by effectively utilizing sales channels, technology, management know-how and brandstrength of both companies.
The Company has been consolidating Eveden since April 1, 2012, because the impact of the result of
operations and the changes in the financial position of Eveden from April 1, 2012 to April 10, 2012, wasinsignificant.
Acquisition-related costs were ¥456 million, of which ¥45 million and ¥411 million had been included in the
results of operations for the years ended March 31, 2013, and 2012, respectively, in selling, general andadministrative expenses.
As a result of the purchase price allocation, the Company has recognized ¥10,662 million of goodwill and¥5,499 million of brand and these are classified as goodwill and other intangible assets, respectively, on the
consolidated balance sheets. Goodwill is not deductible for tax purposes. The amount of brand will beamortized based on the estimated useful lives of 20 to 25 years.
During the year ended March 31, 2013, the Company adjusted the fair values of assets acquired and liabilities
assumed as of the acquisition date based on the information the Company obtained subsequent to theacquisition date. These adjustments are reflected retroactively to the fair values of assets acquired andliabilities assumed as of the acquisition date.
Fair value of assets acquired, liabilities assumed and noncontrolling interests on the acquisition date were as
follows:
Millions of Yen
April 1, 2012
BeforeAfter
Adjustments
Adjustments
Notes and accounts receivable
Inventories
Other current assets
Property, plant and equipment
Intangible assets
Goodwill
Other fixed assets
Total

¥

Current liabilities
Long-term debt
Other long-term liabilities
Total
Noncontrolling interests
Net assets acquired
The above long-term debt was repaid during the year ended March 31, 2013.

-109-

2,106
3,244
936
710
5,524
10,748184
23,452

¥

2,106
3,244
1,037
710
5,524
10,662
184
23,467

1,758
2,581
1,525
5,864
208

1,773
2,581
1,525
5,879
208

¥ 17,380¥ 17,380

8.

GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill - The changes in the carrying amount of goodwill for the years ended March 31, 2014 and 2013 wereas follows:
During the current first quarter, the division of operating segments were changed. See Note 21 further
information.
Millions of Yen
2014
WacoalBusiness(Overseas)
Balance at the beginning of the year:
Goodwill
Accumulated impairment losses
Total
Foreign currency translation adjustments
Balance at the end of the year:
Goodwill
Accumulated impairment losses¥ 11,272
11,2722,281

Peach John
Segment¥ 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¥

Millions of Yen
2013
WacoalBusiness(Overseas)
Balance at the beginning of the year:
Goodwill
Accumulated impairment losses
Total
Goodwill acquired during the year
Foreign currency translation adjustments
Impairment losses
Balance at the end of the year:
Goodwill
Accumulated impairment losses¥ 10,662
610

Total

¥ 11,272

Peach John
Segment¥ 11,203(836 )
10,367

11,272¥

Total(1,197 )¥ 11,203(836 )
10,367
10,662610(1,197 )11,203(2,033 )22,475(2,033 )9,170¥ 20,442

There was no change in the carrying amount of goodwill for the year ended March 31, 2012.
During the year ended March 31, 2013, the Companies recorded impairment charges on goodwill of ¥1,197
million in the Peach John Segment. See Note 20 for further information.

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Other Intangible Assets - The components of acquired intangible assets excluding goodwill as of March 31,
2014 and 2013 were as follows:Year Ended March 31
Amortized intangible assets:
BrandsCustomer relationships
Software
OthersTotal
Unamortized intangible assets:
Trademarks
Other
Total

Gross
Carrying
Amount

¥

6,991
3,361
8,480
1,461

Millions of Yen
2014
Accumulated
Amortization
Grossand Impairment
Carrying
Loss
Amount

¥

627
3,214
5,494
543

¥

2013
Accumulated
Amortization
and Impairment
Loss

5,815
3,361
8,270
1,316

¥

260
3,068
5,329
479

¥ 20,293¥ 9,878¥ 18,762¥ 9,136¥ 5,316103¥ 2,146¥ 5,316103¥ 2,146¥ 5,419¥ 2,146¥ 5,419¥ 2,146

Other intangible assets acquired during the year ended March 31, 2014 totaled ¥1,199 million which primarily
consist of software of ¥1,195 million with an estimated useful life of five years.
The gross carrying amounts of brands include foreign currency translation adjustments.
During the years ended March 31, 2014 and 2012, the Companies recorded no impairment charge on otherintangible assets. During the year ended March 31, 2013, the Companies recorded an impairment charge onother intangible assets for the customer relationships and trademarks of ¥68 million and ¥1,587 million,
respectively, in the Peach John Segment. See Note 20 for further information.
Aggregate amortization expenses for the years ended March 31, 2014, 2013 and 2012 related to otherintangible assets were ¥1,824 million, ¥1,851 million and ¥1,747 million, respectively. Future estimatedamortization expenses as of March 31, 2014, were as follows:
Millions of
Yen

Year Ending March 31
Estimated amortization expense
2015
2016
2017
2018
2019

¥ 1,382
1,001
924
819
593

Total
9.

¥ 4,719

SHORT-TERM BANK LOANS AND LONG-TERM DEBT
Short-term bank loans as of March 31, 2014 and 2013, consisted of the following:
Millions of Yen
2014
2013
Unsecured bank loans¥16,630-111-¥16,351

The weighted-average annual interest rates on short-term bank loans as of March 31, 2014 and 2013 were0.6% and 0.7%, respectively.
Unused lines of credit for short-term financing as of March 31, 2014 and 2013, aggregated ¥25,377 millionand ¥24,637 million, respectively. The Companies compensate banks for these facilities in the form ofcommitment fees, which were not material during the years ended March 31, 2014 and 2013.
Long-term debt as of March 31, 2014 and 2013, are summarized below. The interest rates and maturities arefor loans as of March 31, 2014.
Millions of Yen
2014
2013
Collateralized bank loans, with floating interest at 4.5%, maturing
through 2015
Collateralized bank loans, with fixed interest at 1.0% - 1.7%,
maturing through 2022
Unsecured bank loans, with fixed interest at 0.4% - 1.5%,
maturing through 2022
Total
Less current portionLong-term debt, less current portion

¥

12

¥

¥

26

311

351

1,194
1,517
(695 )

2,037
2,414(898 )

822¥ 1,516

The annual maturities of long-term debt as of March 31, 2014, were as follows:
Millions of
Yen

Year Ending March 31
2015
2016
2017
2018
2019
Thereafter

¥

695
534
50
50
50
138

Total

¥ 1,517

A subsidiary has pledged assets as security for loans. As of March 31, 2014 and 2013, assets pledged ascollateral for bank loans were as follows:
Millions of Yen
2014
2013
Land
Buildings
Machinery and equipment

¥

888
595
21

Total

¥ 1,504

¥

888
638
30

¥ 1,556

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 the bank.
The bank has the right to offset cash deposits against obligations that have become due or, in the event ofdefault, against all obligations due to the bank.

-112-

10.

LEASES
The Companies lease most of their store premises, some of their distribution centers, and certain equipment.
Most leases have automatic renewal provisions and allow the Companies to extend the lease term beyond theinitial base period, subject to the terms 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, 2014 arepresented below:
Millions of
Yen

Year Ending March 31
2015
2016
2017
2018
2019
Thereafter

¥

389
342
304
238
237
152

Total

¥ 1,662

Rental expenses were ¥5,975 million, ¥5,780 million and ¥5,317 million for the years ended March 31, 2014,2013 and 2012, respectively, and have been included in selling, general and administrative expenses.
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:
Millions of Yen
2014
2013

12.

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

¥ 648
6
112
(43 )
5

¥ 661
5
92
(113 )
3

Balance at the end of the year

¥ 728

¥ 648

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.

-113-

Contributory Defined Retirement Benefit Plan - The following provides a reconciliation of benefit
obligations, plan assets and funded status of the plans:Millions of Yen
2014
2013
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
Benefit obligations at the end of the year

¥ 34,449
1,025
398
66
(258 )(879 )(995 )(94 )
33,712¥ 34,135
849
602
68
1,005
(825 )(1,201 )(184 )
34,449Change 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
Fair value of plan assets at the end of the year

¥ 34,178
3,659
1,709
66
(879 )(995 )
37,738¥ 31,607
2,748
1,781
68
(825 )(1,201 )34,178Funded status at the end of the year

¥

¥

4,026

(271 )

Amounts recognized in the consolidated balance sheets as of March 31, 2014 and 2013, consist of:Millions of Yen
2014
2013
Prepaid pension expense
Accrued expenses
Liability for termination and retirement benefits¥ 5,666(63 )(1,577 )¥ 1,400(87 )(1,584 )¥ 4,026¥(271 )

Amounts recognized in accumulated other comprehensive income (loss), pre-tax, as of March 31, 2014 and2013, were as follows:
Millions of Yen
2014
2013
Actuarial loss
Prior service benefit¥ (1,346 )
1,590¥ (5,396 )
2,164

¥

¥ (3,232 )244

The accumulated benefit obligation for all defined retirement benefit plans as of March 31, 2014 and 2013,
were as follows:
Millions of Yen
2014
2013
Accumulated benefit obligation¥33,712-114-¥34,449

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
2014
2013
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¥2,369729¥2,333
662

2,369
729

2,333
662

Net periodic benefit costs for the Company and certain subsidiaries' plans consisted of the following for theyears ended March 31, 2014, 2013 and 2012:2014
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service benefit

Millions of Yen
2013¥ 1,025398(803 )
936(574 )¥¥¥ 1,336

982

849
602
(772 )
1,298(641 )

2012
¥

833
725
(756 )
1,208(692 )¥ 1,318

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, 2014, 2013 and 2012 were as follows:

2014
Current year actuarial gain (loss)
Amortization of actuarial loss
Amortization of prior service benefit

Millions of Yen
2013

2012

¥ 3,114936(574 )

¥

971
1,298
(641 )¥ (1,999 )1,208(692 )¥ 3,476¥ 1,628¥ (1,483 )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 loss
Prior service benefit¥ 235(492 )-115-

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

Discount rate
Rate of increase in future compensation

2014

2013

1.3 %
0.0 %

1.2 %
0.0 %

The weighted-average assumptions used as of March 31 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

2014

2013

2012

1.2 %
0.0 %
2.5 %

1.9 %
0.0 %
2.5 %

2.4 %
0.0 %
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, 2014 on the corporate bond indices whosematurity dates approximate the timing of the expected future benefit payments.
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, 2014 and 2013, was as follows:

Equity securities
Debt securities
Life insurance company general accounts
Short-term financing

2014

2013

43.1 %
36.6 %
13.6 %
6.7 %

35.8 %
37.8 %
14.9 %
11.5 %The target allocation percentages are reviewed and approved by the Pension Committee. The actual
allocations for 2014 and 2013 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.

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The following tables present the Company and certain subsidiaries' plan assets using the fair value hierarchy asof March 31, 2014 and 2013. 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 20.

2014

Level 1Equity securities:
Japanese companies
Pooled funds (a)Debt securities:
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

¥ 6,976
9,280

¥

6,976
9,280

12,443
5,146

12,443
5,146

634
973
2,286

634
973
2,286

¥ 6,976¥ 30,762¥ 37,738

Level 1Millions of Yen
Level 2
Level 3

¥

Total

2013
Equity securities:
Japanese companies
Pooled funds (a)Debt securities:
Japanese government bonds
Pooled funds (b)Life insurance company general accounts
Other types of investments:
Hedge funds (c)Short-term financing¥ 5,159

¥

5,159
7,066

8,883
5,094

2,476
8,883
5,094

1,577
3,923

1,577
3,923

¥ 26,543¥ 34,178

2,476¥ 7,635

Total

7,066

¥

Total

Total

(a) This class includes common stock of approximately 24% Japanese companies and 76% foreigncompanies as of March 31, 2014 and those percentages were 27% and 73%, respectively, as of March
31, 2013.
(b) This class includes approximately 41% of Japanese government bonds, 5% of Japanese municipal
bonds, 25% of foreign government bonds, and 29% of corporate bonds as of March 31, 2014, andthose percentages were 37%, 4%, 33%, and 26%, respectively, as of March 31, 2013.
(c) This class is hedge funds that invest both long and short in debt securities as of March 31, 2014. This
class includes hedge funds that invest both long and short at a ratio of in approximately 84% in debt
securities, 8% in currencies and 8% in other investments as of March 31, 2013.
(d) This class includes approximately 38% of corporate bonds, 36% of insurance swaps, 26% of Shortterm funds as of March 31, 2014.

-117-

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 rate 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 ¥1,656 million to their plans in the year ending March 31, 2015.
The following benefit payments, which reflect expected future services, as appropriate, are expected to bepaid:
Millions of
Yen

Year Ending March 31
2015
2016
2017
2018
2019
Thereafter¥1,983
2,070
2,151
2,108
2,067
9,737

Multiemployer Plan - A subsidiary participated in a multiemployer plan, Kyoto Orimono Oroshisho Employee
Pension Plan, but withdrew from the plan by paying a special contribution as a condition of withdrawal in theamount of ¥1,580 million during the year ended March 31, 2012. The subsidiary recorded the estimatedwithdrawal liability of ¥774 million as of March 31, 2011 as it was probable that the subsidiary would
withdraw from the fund. Accordingly, the subsidiary recorded an additional expense in the amount of ¥806
million for the year ended March 31, 2012, and it has been included in selling, general and administrative
expenses.
Defined Contribution Plan - Certain subsidiaries have a defined contribution plan. The amounts of cost
recognized for their contributions to the plan were ¥196 million, ¥193 million and ¥27 million for the years
ended March 31, 2014, 2013 and 2012, 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 ¥228 million, ¥280 million and ¥260 million were paid in addition to normal benefits
and charged to selling, general and administrative expenses for the years ended March 31, 2014, 2013 and2012, respectively.
Termination Plan for Directors - The Company had and certain subsidiaries 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 planfor directors upon the approval of its shareholders. The amount of benefit for each individual was fixed as ofJune 29, 2005 and will remain frozen until the retirement of each respective director. The outstanding
liabilities were ¥399 million and ¥391 million as of March 31, 2014 and 2013, respectively, and were recordedin other long-term liabilities. Subsidiaries still maintain plans for their directors. In accordance with theguidance for determination of vested benefit obligation for a defined benefit pension plan, the subsidiaries
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. The liabilities for termination benefits for directors as of March 31,
2014 and 2013 were ¥218 million, and were included in liability for termination and retirement benefits.

-118-

13.

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 specific formula.
During the years ended March 31, 2014 and 2013, changes in Wacoal Holdings Corp.'s additional paid-in
capital due to equity transactions with noncontrolling interest shareholders were as follows:
Millions of Yen
2014
2013
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-119-¥ 10,106¥ 7,880

4

17¥ 10,110¥ 7,897

There were no changes in Wacoal Holdings Corp.'s additional paid-in capital due to equity transactions with
noncontrolling interest shareholders for the year ended March 31, 2012.
14.

SHARE-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,
2014, 2013 and 2012. The Company believes that such awards better align the interests of its directors withthose of its shareholders, by sharing both risk and return from fluctuations in stock prices and giving
motivation to enhance 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. Risk-free interest rate is based on the Japanese government bonds yield curve in effect at thetime of grant for a period commensurate with the expected term of the Company's share options. 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 dividends
Expected volatility
Risk-free interest rate
Expected term

2014

2013

2012

2.8%
20.6%
0.1%
2.8 years

3.2%
22.5%
0.1%
3.1 years

2.1%
31.6%
0.3%
3.8 years

A summary of stock option activities under the plan for the year ended March 31, 2014, was as follows:

Yen

Outstanding as of April 1, 2013
GrantedExercised
Forfeited or expired
Outstanding as of March 31, 2014
Exercisable as of March 31, 2014

Shares

WeightedAverage
ExercisePrice269,000
77,000¥1
1346,000

1

Millionsof YenYears
WeightedAverage
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

17.3 years¥364

The total intrinsic value of options exercised was ¥3 million and ¥12 million for the years ended March 31,
2013 and 2012, respectively. There were no options exercised during the year ended March 31, 2014, and no
exercisable options as of March 31, 2014.

-120-

Total compensation costs recognized for the years ended March 31, 2014, 2013 and 2012 were ¥69 million, ¥53 million and ¥60 million, respectively. The total recognized tax
benefits related thereto for the years ended March 31, 2014, 2013 and 2012 were ¥25 million, ¥19 million and ¥21 million, respectively.
The weighted-average grant date fair values of options granted for the years ended March 31, 2014, 2013 and 2012 were ¥918, ¥799 and ¥878, respectively.
As of March 31, 2014, there was ¥12 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.
15.

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
2014
Foreign
Currency
Translation
Adjustments
Balance at the beginning of the year (after-tax)
Amount arising during the year:
Pre-tax amountTax credit
Net amount
Reclassification adjustments:
Pre-tax amountTax credit
Net amount
Other comprehensive income attributable tononcontrolling interests (after-tax)

Unrealized
Gain onSecurities¥ (5,924 )Balance at the end of the year (after-tax)¥

PensionLiability
Adjustments

9,310¥ (1,928 )

8,582(240 )
8,342

3,709(1,396 )
2,313

2,578
(1,110 )
1,468

27
27

(17 )
6
(11 )

362
(129 )
233(135 )

(6 )

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 on securities are included in "Gain on sale or exchange of marketable securities and Investments - net" and "valuation gain orloss on marketable securities and investments - net."
Reclassification adjustments (pre-tax) of pension liability adjustments are included in the net periodic benefit costs.
Millions of Yen

Foreign currency translation adjustments:
Amount arising during the year
Unrealized gain on securities:
Amount arising during the year
Reclassification adjustments
Net unrealized gain
Pension liability adjustments:
Amount arising during the year
Reclassification adjustment
Net unrealized gain (loss)
Other comprehensive income (loss)

Pre-tax
Amount2013
Tax(Expense)
CreditNet
AmountPre-tax
AmountTax
ExpenseNet
Amount

¥

¥

¥

¥

¥

¥

5,332

(260 )

2012

5,072

(836 )

54(782 )

9,909(2,101 )
7,808(3,435 )749(2,686 )6,474(1,352 )
5,122

1,608
783
2,391

(470 )(319 )(789 )

1,138
464
1,602

971
657
1,628

(346 )(234 )(580 )

625
423
1,048

(1,999 )516(1,483 )712(203 )
509(1,287 )313(974 )¥ 14,768¥ (3,526 )¥ 11,242

72¥ (226 )

¥

-121-

¥

(154 )

16.

INCOME TAXES
Domestic and foreign components of income before income taxes, equity in net income of affiliated companies
were summarized as follows:

2014

Millions of Yen
2013

2012

Japan
Foreign¥ 22,877(7,844 )¥ 18,609(7,669 )¥ 18,045(7,838 )Total¥ 15,033¥ 10,940¥ 10,207

2014

Millions of Yen
2013

2012

¥ 3,710
1,546¥ 5,578
1,060¥ 2,942581¥ 5,256¥ 6,638¥ 3,523¥ 549(164 )¥ (2,754 )(112 )

¥ 675
1

¥ 385

¥ (2,866 )¥ 676¥ 5,641¥ 3,772¥ 4,199

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 38.0% for theyear ended March 31, 2014 and 2013, and approximately 40.7% for the year ended March 31, 2012. Foreignsubsidiaries 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, 2014,2013 and 2012:
2014

2013

2012

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
Changes in Japanese income tax rates
Tax exemption
Unrecognized tax benefits
Impairment losses on goodwill
Other - net

38.0 %

38.0 %

40.7 %

3.3(2.9 )
0.1(2.6 )

4.2
1.0
0.0(1.0 )(0.2 )
0.2
1.6(0.3 )
0.2(4.1 )(3.5 )

4.6
3.2(0.1 )(1.5 )(6.0 )(0.3 )
0.2

Effective tax rates

37.5 %

34.5 %-122-

0.3
41.1 %

Amendments to the Japanese tax regulations were issued on December 2, 2011. As a result of theseamendments, the statutory income tax rate was reduced from 40.7% to 38.0% effective from the year
beginning April 1, 2012 and will be reduced to 35.6% effective from the year beginning April 1, 2015, andthereafter. Consequently, the statutory income tax rate utilized for deferred tax assets and liabilities expected
to be settled or realized in the period from April 1, 2012 to March 31, 2015 is 38.0% and for periods
subsequent to March 31, 2015 the rate is 35.6%. The adjustment of deferred tax assets and liabilities for thischange in the tax rate resulted in a decrease of income taxes by ¥616 million and have been reflected inincome taxes in the consolidated statements of income for the year ended March 31, 2012.
Following after the amendment described above, new amendments to the Japanese tax regulations were issued
on March 31, 2014. As a result of these amendments, the statutory income tax rate was reduced from 38.0% to35.6% effective from the year beginning April 1, 2014. Consequently, the statutory income tax rate utilized
for deferred tax assets and liabilities expected to be settled or realized in the period from April 1, 2014 is
35.6%. The adjustment of deferred 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.
The approximate effect of temporary differences and tax loss carryforwards that gave rise to deferred tax
balances as of March 31, 2014 and 2013 were as follows:
Millions of Yen
2014
2013
DeferredDeferredDeferredDeferred
Tax
Tax
Tax
Tax
AssetsLiabilities
AssetsLiabilities
Sales 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

¥

771
51
187
1,149
1,258

¥

1,471

608
100
181
1,194
1,274
1,467

¥

1,354
2,405

¥

7,407
1,059

6,045
1,059

290
114
799
259

285
335
834
231
1,420

501
1,312
3,668
1,076
12,906(4,016 )
8,890

575
1,269
4,037
2,802
198
16,645¥ 16,645

2,651
223
13,493992
13,382(4,209 )¥9,173¥ 13,493

The valuation allowance decreased by ¥193 million for the year ended March 31, 2014. The valuation
allowance increased by ¥121 million for the year ended March 31, 2013.

-123-

1,403
2,112

The Companies reversed certain valuation allowance and utilized ¥847 million and ¥705 million of tax loss
carryforwards, and recognized tax benefits of ¥226 million and ¥228 million for the year ended March 31,
2014 and 2013, respectively.
As of March 31, 2014, 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
2015
2016
2017
2018
2019
2020
2021
2022
2023
Thereafter

¥

13
229
478
618
2,188
2,349
1,056
733

Total

¥ 10,886

3,222

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, 2014 and 2013.
A reconciliation of beginning and ending amounts of unrecognized tax benefits was as follows:

2014

Millions of Yen
2013

2012

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

¥ 313
133
(150 )

¥ 267
46

¥ 188
79

Balance at the end of the year

¥ 296

¥ 313

¥ 267

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is ¥296
million, ¥313 million and ¥267 million as of March 31, 2014, 2013 and 2012, 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, 2014, 2013 and 2012 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 2012 with few
exceptions. For other countries, the Companies are no longer subject to regular income tax examinations by
the tax authorities for years before 2006 with few exceptions. In the year ended March 31, 2009, the transfer
pricing examinations of certain domestic subsidiaries' 2002 to 2007 fiscal years and certain U.S. subsidiaries'
2004 and 2003 fiscal years were completed.

-124-

17.

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 ¥2,375 million, ¥2,353 million and ¥2,093 million in the fiscal years ended March 31, 2014,2013 and 2012, respectively. The accounts payable to affiliated companies were ¥220 million and ¥166
million as of March 31, 2014 and 2013, respectively.
The Companies also sell supplies, materials and products to certain affiliated companies. Aggregate sales toaffiliated companies were ¥342 million, ¥381 million and ¥477 million in fiscal years ended March 31, 2014,2013 and 2012. The accounts receivable from affiliated companies were ¥58 million and ¥81 million as ofMarch 31, 2014 and 2013.
The Companies earn royalties from the use of the Wacoal Brand by certain affiliated companies. The amountof royalty revenue earned was ¥248 million, ¥247 million and ¥216 million in the fiscal years ended March 31,
2014, 2013 and 2012, respectively. Other accounts receivables from affiliated companies, which are included
in other current assets in the consolidated balance sheets, were ¥188 million and ¥190 million as of March 31,
2014 and 2013, respectively.

18.

EARNINGS PER SHARE AND AMERICAN DEPOSITARY RECEIPT
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 stock 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 computation of earnings per American Depositary Receipt (ADR), each ADR representing 5 shares ofcommon stock, is based on the weighted-average number of common stock outstanding.
The weighted-average number of common stock outstanding used in the computations of basic net income
attributable to Wacoal Holdings Corp. per share was 140,841,722 shares, 140,846,298 shares and 140,848,576
shares for 2014, 2013 and 2012, respectively. The weighted-average number of diluted common stock
outstanding used in the computations of diluted net income attributable to Wacoal Holdings Corp. per share
was 141,135,395 shares, 141,070,568 shares and 141,013,083 shares for 2014, 2013 and 2012, respectively.

-125-

19.

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, 2014 and 2013 were as follows:
Millions of Yen
2014
2013
Carrying
Carrying
Fair
AmountFair Value
AmountValue
Assets:Marketable securities (Notes 3 and 20)
Investments (Notes 3 and 20)
Foreign exchange contracts (Note 20)¥

Total assets
Liabilities:
Foreign exchange contracts (Note 20)
Long-term debt including current portion
Total liabilities

3,523
44,58918¥

3,520
44,59218¥

4,601
41,00329¥

4,601
41,00629¥ 48,130¥ 48,130¥ 45,633¥ 45,636

¥

¥

¥

¥

(1 )
(1,517 )¥ (1,518 )(1 )(1,518 )¥ (1,519 )(7 )(2,414 )¥ (2,421 )(7 )(2,414 )¥ (2,421 )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.
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 a hedge.
Marketable Securities and Investment - Held-to-maturity debt securities are classified as marketablesecurities and investments as of March 31, 2014 and as investments as of March 31, 2013, 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 20.
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 instrument. 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 10.0%, 9.1% and9.8% of the total sales in fiscal years ended March 31, 2014, 2013 and 2012, respectively.

-126-

20.

FAIR VALUE MEASUREMENTS
The guidance for fair value measurements defines fair value as the price that would be received to sell an asset
or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or
liability in an orderly transaction between market participants at the measurement date. The guidance
establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value as follows:
Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for
identical or similar assets or liabilities in markets that are not active, inputs other than quoted
prices that are observable, and inputs that are derived principally from or corroborated byobservable market data by correlation or other means.
Level 3 - Inputs are unobservable.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets and liabilities measured at fair value on a recurring basis as of March 31, 2014 and 2013 were as
follows:

2014

Level 1

Assets:Marketable securities:
Municipal bonds
Corporate bonds
Mutual funds
Total marketable securities
Investments:
Equity securities
Derivative instruments:
Foreign exchange contracts
Total assets

¥

-127-

10
502
2,906
3,418

¥ 44,170¥ 44,170

Liabilities:
Derivative instruments:
Foreign exchange contracts

Millions of Yen
Level 2
Level 3

Total

¥

10
502
2,906
3,418
44,17018

18¥ 3,436¥ 47,606¥ (1 )¥ (1 )

2013

Level 1

Assets:Marketable securities:
Municipal bonds
Corporate bonds
Mutual funds
Total marketable securities
Investments:
Equity securities
Mutual funds
Total investments
Derivative instruments:
Foreign exchange contracts
Total assets

¥
¥

497
497

10
1,191
2,903
4,104

40,526
186
40,712¥ 41,209

Liabilities:
Derivative instruments:
Foreign exchange contracts

Millions of Yen
Level 2
Level 3

Total

¥

10
1,191
3,400
4,601
40,526
186
40,71229

29¥ 4,133¥ 45,342¥ (7 )¥ (7 )

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 ¥5
million, ¥40 million and ¥89 million in other - net of other income (expenses) in the years ended March 31,
2014, 2013 and 2012, respectively.
The Companies recorded the derivative instruments as other current assets and other current liabilities in the
consolidated balance sheets at fair value of ¥18 million and ¥1 million, respectively as of March 31, 2014.
The derivative instruments are presented as other current assets and other current liabilities in the consolidatedbalance sheets at fair value of ¥29 million and ¥7 million as of March 31, 2013.

-128-

Assets Measured at Fair Value on a Nonrecurring Basis
Assets measured at fair value on a nonrecurring basis as of March 31, 2013 were as follows:
Millions of Yen
2013

Level 1

Goodwill (Note 8)
Trademarks (Note 8)
Customer relationships (Note 8)

Level 2

Level 3

Total

Total
Losses¥ 9,170
3,170
293¥ 9,170
3,170293¥ (1,197 )(1,587 )(68 )¥ (2,852 )As of the end of March 31, 2013, goodwill with a carrying amount of ¥10,367 million was written down to its
implied fair value of ¥9,170 million, resulting in an impairment charge of ¥1,197 million, which is included inearnings for the year ended March 31, 2013. 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 fairvalues of the reporting units, the Companies used the expected present value of future cash flows andincorporated 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 thatmarket participants would use in pricing the asset in an arm's length transaction as of the measurement date.
Trademarks with a carrying amount of ¥4,757 million as of March 31, 2013, were written down to their fairvalues of ¥3,170 million, resulting in recognition of an impairment charge of ¥1,587 million for the year ended
March 31, 2013. 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.
Customer relationships with a carrying amount of ¥361 million as of March 31, 2013 were written down totheir fair value of ¥293 million, resulting in recognition of impairment charges of ¥68 million for the year
ended March 31, 2013. The impairments recorded for this year arose due to the decline in their fair value,
which were mainly caused by a downturn in consumption because of general market conditions. To measure
the fair values of the customer relationships, the Companies used the excess earnings method and incorporated
relevant unobservable inputs, such as management's internal assumptions about future cash flows, thepercentage of orders that the Companies expect to receive from the customers existing at the point ofacquisition and appropriately risk-adjusted discount rate, which reflected the management's estimate ofassumptions that market participants would use in pricing the asset in a current transaction as of themeasurement date. The future cash flows were projected in the same way as described in the trademarks. The
percentage of orders that the Companies expect to receive from the customers existing at the point ofacquisition was estimated based on the historical trend of the percentage of sales to the preacquisition
customers. A risk-adjusted discount rate representing a WACC was determined using the capital asset pricing
model.
There were no significant assets or liabilities that were measured at fair value on a nonrecurring basis as ofMarch 31, 2014 and 2012.

-129-

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, 2013 is as follows:

March 31, 2013

Millionsof YenFair
Value

Valuation
Technique¥3,170

Relief-fromroyalty method

Trademarks

Customer relationships¥293

Excess earning
methodPrincipal Unobservable
Input

Discount rate
Royalty rate
Short-term revenue growth
rates(within five years)
Perpetuity growth rate (overfive years)
Discount rate
Remaining useful life

21.

Range

7.5% - 11.5%
3.0% - 4.0%

3.3% - 5.5%0%
4.5%
2 years

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 theCompanies for which separate financial information is available and for which operating profit (loss) isreviewed 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 the sameas 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 and hosiery. "Wacoal business(overseas)" segment produces and sells innerwear (consisting of foundation, lingerie, nightwear and children's
innerwear), outerwear, sportswear and hosiery. "Peach John" segment produces and sells innerwear(consisting of foundation, lingerie, nightwear and children's innerwear), 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.

-130-During the current consolidated first quarter, certain segment information has been changed in conformity with the internal reporting segment that is based on our organizational
structure. Accordingly, the amount related to Wacoal Eveden is recorded in "Wacoal business (overseas)," whereas it was originally recorded in our "Other" segment. The segment
information for the years ended March 31, 2013 and 2012 has been restated based on the segments.
Information about operating results and assets for each segment as of and for the years ended March 31, 2014, 2013 and 2012 is as follows:
Millions of Yen

2014
Net sales:
External customers
Intersegment
Total
Operating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Total
Operating profit
Total assets and capital expenditures:
Total assets
Capital expenditures

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 )271,988
3,464

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John

Other

Elimination

Consolidated¥ 115,657
2,193
117,850¥ 33,345
7,575
40,920¥ 11,972
232
12,204¥ 19,256
5,415
24,671¥ (15,415 )(15,415 )

106,482
2,945

37,868
1,029

23,699218(15,415 )109,427
8,423

38,8972,023

11,357
696
1,197
1,655
14,905(2,701 )23,917754(15,415 )236,006
2,283

59,237688

18,135
202

19,721
157(78,563 )

254,536
3,330

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John

Other

Elimination

Consolidated¥ 115,870
2,719
118,589¥ 21,396
6,541
27,937¥ 13,836
193
14,029¥ 20,795
5,744
26,539¥ (15,197 )(15,197 )107,332
3,085
110,417
8,172

25,946551
26,497
1,440

12,766734
13,500529

26,013290
26,303236(15,197 )208,373
1,991

29,367549

21,237348

20,566666(58,445 )Consolidated¥ 193,781(16,059 )

193,781
174,885
5,036
179,921
13,860Millions of Yen

2013
Net sales:
External customers
Intersegment
Total
Operating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Impairment charges on goodwill (Note 20)
Impairment charges on other intangible assets (Note 20)
Total
Operating profit (loss)
Total assets and capital expenditures:
Total assets
Capital expenditures¥ 180,230
180,230
163,991
4,888
1,197
1,655
171,731
8,499

Millions of Yen

2012
Net sales:
External customers
Intersegment
Total
Operating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Total
Operating profit
Total assets and capital expenditures:
Total assets
Capital expenditures-131-¥ 171,897(15,197 )

171,897
156,860
4,660
161,520
10,377221,098
3,544

The Companies account for intersegment sales and transfers at cost plus a markup. Operating profit (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, 2014, 2013 and 2012 is as follows:

Innerwear:
Foundation and lingerieNightwear
Children's underwear
Subtotal
Outerwear/Sportswear
Hosiery
Other textile goods and related products
OthersTotal

2014

Millions of Yen
2013

2012

¥ 144,783
9,301
1,475
155,559¥ 132,525
9,221
1,465
143,211¥ 124,303
9,390
1,530
135,223¥¥¥

16,954
1,791
8,577
10,900¥ 193,781

17,2871,559
7,580
10,593¥ 180,230

16,371
1,646
8,226
10,431¥ 171,897

Geographic Information
Information by major geographic area as of and for the years ended March 31, 2014, 2013 and 2012 is asfollows:

Net sales:Japan
Asia and Oceania
Americas and Europe
Consolidated
Long-lived assets:Japan
Asia and Oceania
Americas and Europe
Consolidated

2014

Millions of Yen
2013

2012

¥ 149,715
14,871
29,195¥ 146,224
11,77722,229¥ 149,587
10,527
11,783¥ 193,781¥ 180,230¥ 171,897¥ 43,446
2,894
2,638

¥ 44,670
2,692
2,303

¥ 45,240
2,334
1,504

¥ 48,978¥ 49,665¥ 49,078

Net sales are attributed to countries or areas based on the location of sellers.
Asia and Oceania includes East Asia, Southeast Asia, West Asia and Australia.
Countries or areas are classified according to their geographical proximity. Long-lived assets represent
property, plant and equipment.
22.

SUBSEQUENT EVENTSOn May 8, 2014, an agreement to sell a part of our paintings held as fixed assets of the Company was executed.
Accordingly, we expect to record approximately 1.2 billion yen of gain on sale of fixed assets during the fiscal
year ending March 31, 2015.
On May 13, 2014, 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, 2014 (aggregate amount of ¥4,648 million).

******-132-

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

March 311,000 shares(Special Account)
Osaka Securities Transfer Section
Mitsubishi UFJ Trust and Banking Corporation
6-3, Fushimi 3-chome, Chuo-ku, Osaka
Office for handling businessTransfer agent

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.

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 toreceive an allocation of share offerings and stock acquisition rights in proportion to the number of shares held, and theright to request the sale of additional shares not constituting one unit.

2.

For those shareholders of the Company who held shares of Lecien Corporation at the special account as of August 16,
2009 (i.e., the day preceding the effective date of the share exchange between the Company and Lecien Corporation),
Sumitomo Mitsui Trust Bank, Limited shall act as an account management institution of the special account.

-133-

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 andExchange 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, 2014, to the filing date of the Annual Securities Report.
(1） Annual Securities Report andthe attachments thereto, andConfirmation Letter

Fiscal Year

From April 1, 2012

Filed with the Director of the(65th Fiscal Year)

to March 31, 2013

Kanto Local Finance Bureau on
June 27, 2013(2） Internal Control Report and theFiled with the Director of theattachments thereto(3） Quarterly Report andConfirmation Letter(4） Extraordinary Report

Kanto Local Finance Bureau on
June 27, 2013
(First quarter of 66th

From April 1, 2013

Filed with the Director of the

Fiscal Year)to June 30, 2013

Kanto Local Finance Bureau on
August 14, 2013

(Second quarter of 66th From July 1, 2013
to September 30, 2013
Fiscal Year)

Filed with the Director of the
Kanto Local Finance Bureau on(Third quarter of 66th

From October 1, 2013

November 14, 2013
Filed with the Director of the

Fiscal Year)to December 31, 2013

Kanto Local Finance Bureau on
February 14, 2014

(Pursuant to Paragraph 4, Article 24-5 of the Financial

Filed with the Director of theInstruments and Exchange Act and Item 9-2,
Paragraph 2, Article 19 of the Cabinet Office

Kanto Local Finance Bureau on
June 28, 2013

Ordinance Concerning Disclosure of Corporate
Affairs, etc.)-134-Part II 【Information on Guarantors, etc., for the Company】
Not applicable.

-135-

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, 2014 and 2013, 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, 2014 (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.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position of the Company as of March 31, 2014 and 2013, and the results of its operations and its cash flows
for each of the three years in the period ended March 31, 2014, in accordance with accounting 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.

June 27, 2014

NOTE TO READERS:
Following is an English translation of the Independent Auditors' Report filed under the Financial Instruments andExchange Act of Japan. This report is presented merely as supplemental information.
There are differences between an audit of internal control over financial reporting ("ICFR") under the Financial
Instruments and Exchange Act ("ICFR under FIEA") and one conducted under 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 27, 2014
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:
Akiyo Shimoida
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, 2014 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, 2013 to March
31, 2014, and a summary of significant accounting policies and other explanatory information.

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 the Company as of March 31, 2014, and the results of their operations and their cash flows forthe 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, 2014.
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.

An internal control audit involves performing procedures to obtain audit evidence about the results of the assessmentof 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 of financial reporting. Aninternal control audit includes examining representations on the scope, procedures and results of the assessment ofinternal control over financial reporting made by management, as well as evaluating the overall presentation ofmanagement'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.
OpinionIn our opinion, management's report on internal control over financial reporting referred to above, which represents
that the internal control over financial reporting of the Company as of March 31, 2014 is effectively maintained andpresents fairly, in all material respects, the results of the assessment of internal control over financial reporting inaccordance with assessment standards for internal 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.

【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 27, 2014

【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, Managing Director【Address of Head Office】

29, Nakajima-cho, Kisshoin, Minami-ku, Kyoto【Place Where Available for PublicTokyo Stock Exchange, Inc.

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

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING (TRANSLATION)NOTE TO REASDERS
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 of Certified 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 scope of assessment of internal control over business processes, we designated the business units that
accounted for approximately 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, Masaya Wakabayashi, Managing Director, are responsible for thedesigning and operating effective internal control over financial reporting of Wacoal Holdings Corp. (the "Company"), and have designed
and operated internal control over financial reporting in accordance with the basic framework for internal control set forth in "TheStandards and Practice Standards for Management Assessment and Audit of Internal Control Over Financial Reporting'' published by theBusiness Accounting Council.
The internal control is designed to achieve its objectives to the extent reasonable through the effective function and combination of its
basic elements. Therefore, there is a possibility that misstatements may not be completely prevented or detected by internal control overfinancial 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, 2014. The assessment was performed inaccordance 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 aconsolidation ("company-level controls'') and based on the result of this assessment, we appropriately selected business processes to beevaluated, 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 of these key controls. These procedures have allowed us to evaluate theeffectiveness of its internal controls.
We determined the required scope of assessment of internal control over financial reporting for the Company, as well as its consolidated
subsidiaries and equity-method affiliated companies, from the perspective of the 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 ofquantitative and qualitative impacts. We confirmed that we had reasonably determined the scope of assessment of internal controls overbusiness processes in light of the results of assessment of company-level controls conducted for the Company, its consolidated subsidiaries
and equity-method affiliated companies. We did not include those consolidated subsidiaries and equity-method affiliated companies
which do not have any quantitatively or quantitatively material impact on the consolidated financial statements in the scope of assessmentof company-level controls .

Regarding the scope of assessment of internal control over business processes, we designated the business locations that accounted forapproximately 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 to sales or accounts
receivable and inventories, as significant accounts that may have a material impact on the business objectives of us. Further, not only at
selected significant business units, but also at other business units, we added to the scope assessment, as business processes having greater
materiality considering their impact on 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 tobusinesses 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 of March 31, 2014.

4.【Supplementary Matters】
Not applicable.

5.【Special Information】
We were a registrant of the Securities and Exchange Commission ("SEC") and our American Depositary Receipts ("ADR") was listedon NASDAQ until the previous fiscal year. Accordingly, pursuant to the provisions of Section 404 of the Sarbanes-Oxley Act of 2002, theCompany conducted assessments of the internal control over financial reporting in accordance with the "Final Rule: Management's Reporton Internal Control Over Financial Reporting" and "Management Guidance" on internal control issued by SEC, and regularly filed its
annual report in Form 20-F with an internal control report of management. On April 15, 2013, we filed an application with NASDAQ for
delisting our ADRs and the delisting was completed on April 25, 2013. Our registration with SEC and applicable disclosures under Article
15 of the U.S. Securities Exchange Act of 1934 (submission of Form 20-F) were terminated on July 24, 2013, and from the current fiscal
year, we have been performing an assessment of the internal control over financial reporting in accordance with assessment standards forinternal control over financial reporting generally accepted in Japan.