Annual Securities Report(The 65th Fiscal Year)
From April 1, 2012 to March 31, 2013

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

E00590

The 65th Fiscal Year (from April 1, 2012 to March 31, 2013)

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 contents of the Annual Securities Report(“Yukashoken Hokokusho”) of WACOAL HOLDINGS CORP. filed with the Director of Kanto Local Finance Bureau
of Japan on June 27 , 2013.
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. Also references to “U.S. dollars” or “$” are to the currency of the United States andreferences to “yen” or “¥” are to the currency of Japan.
All financial statements and information contained in this report have been prepared in accordance with accounting
principles generally accepted in the United States , or U.S. GAAP except where otherwise noted.
A Cautionary Note on Forward-Looking Statements
This report contains forward‑looking statements that are based on our current expectations, assumptions, 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 development of
new market; risks relating to intellectual property; risks relating to protection of personal information and ourconfidential information; risks relating to internal controls over financial reporting; the impact of weakness in theJapanese 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 65th Fiscal Year1

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

2

I.

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

2

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

2

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

4

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

6

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

9

5.【Employees】 ………………………………………………………………………………………………… 11
II.

【Business Overview】…………………………………………………………………………………………… 12
1.【Summary of Business Results】……………………………………………………………………………... 12
2.【Production, Orders Received, and Sales】…………………………………………………………………... 16
3.【Management Issues】………………………………………………………………………………………... 17
4.【Risk Factors】 ……………………………………………………………………………………………….. 21
5.【Material Agreements, etc.】…………………………………………………………………………………. 26
6.【Research and Development】………………………………………………………………………………... 27
7.【Analyses of Financial Position, Operating Results, and Cash Flows】……………………………………… 28

III.

【Property, Plants, and Equipment】……………………………………………………………………………... 34
1.【Summary of Capital Investment, etc.】……………………………………………………………………… 34
2.【Major Property, Plants, and Equipment】…………………………………………………………………… 34
3.【Plans for Capital Investment, Disposals of Property, Plants, and Equipment, etc.】………………………... 36

IV.

【Information on the Company】………………………………………………………………………………… 37
1.【Information on the Company’s Stock, etc.】………………………………………………………………… 37
2.【Information on Acquisition, etc., of Treasury Stock】……………………………………………………… 69
3.【Dividend Policy】…………………………………………………………………………………………… 70
4.【Changes in Share Prices】…………………………………………………………………………………… 70
5.【Directors and Senior Management】………………………………………………………………………… 71
6.【Corporate Governance, etc.】………………………………………………………………………………... 74

V.

【Financial Information】………………………………………………………………………………………… 89
1.【Consolidated Financial Statements】………………………………………………………………………... 89

VI.

【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, 2013

【Fiscal Year】

The 65th Fiscal Year (from April 1, 2012 to March 31, 2013)【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)
Osaka Securities Exchange Co., Ltd.
(8-16, Kitahama 1-chome, Chuo-ku, Osaka)- 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

61st

62nd

63rd

64th

65th

Year-EndMarch 2009

March 2010

March 2011

March 2012

March 2013

170,960

163,548

165,548

171,897

177,154

Operating income

9,833

3,829

4,401

10,377

8,099

Net income attributable to
Wacoal Holdings Corp.

5,062

2,475

2,785

6,913

7,623

Comprehensive income△10,560

7,538△1,186

6,862

18,527

Total shareholders’ equity

166,767

171,860

167,480

171,496

185,840

Total assets

213,827

222,889

215,276

221,098

253,803

Sales

Shareholders’ equity per share(yen)

1,187.37

1,217.15

1,189.08

1,217.57

1,319.47

Net income per share attributable
to Holdings Corp.

(yen)

35.57

17.51

19.73

49.08

54.12

Diluted net income attributable to
Wacoal Holdings Corp. per share

(yen)

35.56

17.50

19.72

49.02

54.04

Shareholders’ equity ratio

(%)

78.0

77.1

77.8

77.6

73.2

Return on equity

(%)

2.9

1.5

1.6

4.1

4.3

Price earnings ratio(times)

31.02

65.40

56.56

19.99

18.72

Net cash provided by operating
activities

8,202

9,463

10,441

10,06012,741

Net cash used in investment
activities△4,759△3,573△703△3,467△23,436

Net cash provided by (used in)financing activities△7,448△5,363△4,965△2,824

5,303

Cash and cash equivalents at endof year21,954

22,32826,31629,98524,86014,382[1,456]

15,686[1,560]16,013[1,411]

16,524[1,319]18,622[1,259]Number of employees[Average number of part-time
employees, etc.](Notes)

1.
2.
3.

4.

(person)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.
Sales do not include consumption taxes, etc.
Effective from the consolidated cumulative first quarter of the 62nd fiscal year, the Company has adopted the provisionsof the Accounting Standards Codification 810, “Consolidation,” of the U.S. Financial Accounting Standards Board(FASB). As a result, the consolidated financial statements for the 61st fiscal year have been replaced with the new item.
During the 64th fiscal year, some of the Company’s consolidated subsidiaries changed their respective accounting date toMarch 31 to conform to the Company, so that the periodic profit or loss shall be reflected in the consolidated financial
statements more appropriately. As a result, the consolidated statements before the 63rd fiscal year have been adjusted
retroactively.
- 2 -(2）Financial data, etc., of the Company(Millions of yen, unless otherwise stated)
Fiscal Year

61st

62nd

63rd

64th

65th

Year-EndMarch 2009

March 2010

March 2011

March 2012

March 2013

Operating revenue

6,171

6,968

7,662

7,874

8,705

Ordinary income

2,093

3,106

4,000

3,981

4,571

Net income

1,262

2,887

3,432

3,756

4,837

Common stock

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

143,378

143,378

143,378

143,378

Net assets

141,537

142,459

142,451

143,380

144,513

Total assets

146,127

146,898

146,121

146,341

174,280

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

1,007.35

1,006.55

1,010.29

1,016.54

1,024.27

Dividends per share(interim dividends per
share)

(yen)

25.00
(－)

20.00
(－)

20.00
(－)

28.00
(－)

28.00
(－)

Net income per share

(yen)

8.87

20.39

24.30

26.67

34.34

Diluted net income per
share

(yen)

8.87

20.38

24.28

26.63

34.28

Shareholders’ equity ratio

(%)

96.8

96.9

97.3

97.8

82.7

Return on equity

(%)

0.8

2.0

2.4

2.6

3.3

Price earnings ratio(times)128.52

57.28

43.12

36.78

29.49

Dividend payout ratio

(%)

281.7

98.0

82.2

104.9

81.5

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

77
[－]

69
[－]

63
[－]

69
[－]

71
[－]

(Note)

Operating revenue does not include consumption taxes, etc.

- 3 -

2. 【History】
June 1946
November 1949
June 1951
July 1957

Wako Shoji founded by late Koichi Tsukamoto
Wako Shoji Corp. established with 1 million yen in capital (Nakagyo-ku, Kyoto)
Head office relocated to Anekoji-agaru, Muromachi-dori, Nakagyo-ku, Kyoto; plant opened; self-manufacturing
beginsHead office relocated to 103 Shichijo Goshono-uchi, Minami-machi, Shimogyo-ku, Kyoto

November 1957

Company name changed to Wacoal Inc.

November 1959
June 1964

Tokai Wacoal Sewing Corp. established as a domestic manufacturing company, and seven sewing subsidiaries
established in Japan
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
October 1970

A joint venture company, THAI WACOAL CO., LTD. (current THAI WACOAL PUBLIC CO., LTD.)established in Thailand
Taiwan Wacoal Co., Ltd. established as joint venture company

January 1971

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

April 1978

Singapore office (current WACOAL SINGAPORE PRIVATE LTD.) opened

August 1979

Acquired shares from Torica Inc., a subsidiary of the Company, by way of capital increase through third-party
allocation

June 1981

February 1983

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

December 1983

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

December 1983

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

March 1982

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

January 1991

INDONESIA WACOAL CO., LTD. (current PT.INDONESIA WACOAL), established as a joint venturecompany
Joint venture agreement for Korea Wacoal Corp. canceled; investment made into Shinyoung Inc. (current
Shinyoung Wacoal Inc.) in Republic of Korea
Guangdong Wacoal Inc. established as an overseas subsidiary

April 1993
January 1995
June 1997
August 1999
December 2000

VIETNAM WACOAL CORP. established as an overseas subsidiary
New head office building completed (29, Nakajima-cho, Kisshoin, Minami-ku, Kyoto)

January 2002

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

August 2002

WACOAL SPORTS SCIENCE CORP. established as an overseas subsidiary

November 2002
May 2003

Wacoal (Shanghai) Human Science R&D Co., Ltd., established as an overseas subsidiary
WACOAL MALAYSIA SDN BHD established as a joint venture company

August 2003

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

October 2005

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

January 2008

Peach John Co., Ltd. (“Peach John”), became a wholly owned Wacoal subsidiary through share exchange- 4 -August 2009
April 2012

Lecien Corp. became a wholly owned Wacoal subsidiary through stock exchange
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 one holding company (Wacoal Holdings Corp.), 59 subsidiaries, and nine 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 one 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 four 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 three sales companies, including Une Nana Cool Corp., which conduct retail salesof innerwear and outerwear products, which are mainly supplied from our group companies.
(2) Wacoal Business (Overseas)
This segment is composed of 24 companies, including our overseas subsidiaries and affiliates.
Among our 18 overseas subsidiaries, six companies are located in North and Central America; two companies are located inEurope; and 10 companies are located in Asia. Six 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.
Among our two overseas subsidiaries in Europe, Wacoal France Société Anonyme designs and markets innerwear products.
Wacoal (UK) Ltd. distributes products to end consumers through department stores and specialty retail stores in the United
Kingdom.
Our four subsidiaries and four affiliates in Asia are manufacturing and sales companies, which distribute products to the 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 include three subsidiaries, including Wacoal Singapore
Private Ltd., and one affiliate. These sales companies distribute innerwear products, which are mainly supplied within the groupcompanies, to their local department stores and specialty retail stores. Three remaining subsidiaries include a company thatprocures materials for subsidiaries and/or affiliates in Asia, and an investment company which makes investments in the local
affiliates that manufacture and sell innerwear, and Wacoal (Shanghai) Human Science R&D Co., Ltd., which engages inmarketing and research and development in the Chinese market.
(3) Peach John BusinessThis segment is composed of four companies, including our domestic and overseas subsidiaries. The two domestic
subsidiaries and two overseas subsidiaries are sales companies, and Peach John and one of its subsidiaries mainly engage in theretail sales of products that are independently supplied mainly from nongroup companies.
(4) Other
This segment is composed of a total of 28 companies, including six domestic subsidiaries, 20 overseas subsidiaries, one
domestic affiliate, and one overseas affiliate.
Among six domestic subsidiaries, Nanasai Co., Ltd. (“Nanasai”), engages in the manufacture and sale of mannequins andfixtures, and interior design work. Lecien Corporation, Lecien Nagasaki Corp., and Lecien Ryuo Lace Co., Ltd. engage in the
manufacture and wholesale distribution of women’s innerwear and clothing, lace, thread, and fabrics for handicrafts. The
remaining two subsidiaries engage in the other textile-related and real estate leasing and other business.
With respect to the overseas subsidiaries, eight subsidiaries are located in Asia/Oceania; seven subsidiaries are located inEurope; and five subsidiaries are located in North and Central America.
Four of our subsidiaries in Asia/Oceania are apparel manufacturing companies. The other four subsidiaries engage in retailsale and wholesale distribution of innerwear products, manufacture and sale of mannequins and fixtures, interior design work, andother textile-related business.
In Europe, Eveden Limited and Eveden Huit SAS engage in the manufacturing and sales of innerwear and/or swimwear.
There are two sales companies. Among the other three companies is Wacoal Eveden, an operating company.

- 6 -In the North and Central America, there are three sales companies, including Eveden Inc., which sell innerwear products thatare mainly supplied from Eveden Timex, Eveden Limited, and Eveden Huit. Two other subsidiaries include one apparel
manufacturing company and another textile-related company.
The business distribution diagram of these subsidiaries and affiliates follows on the next page:- 7 -Consumer/Client(Other(Apparel
Manufacturing:fourcompanies)
Kyushu Wacoal Manufacturing Corp.
Hokuriku Wacoal Sewing Corp.
Niigata Wacoal Sewing Corp.
Torica Inc.

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

(Cultural Business Service: onecompany)
Wacoal Art Center Co., Ltd.

(Sales: three companies)
Une Nana Cool Corp.
two other companies

Wacoal Business (Domestic)

Peach John Business

Wacoal Business (Overseas)

Other(North/Central America: six companies)
WACOAL INTERNATIONAL CORP. (U.S.)(Sales: four companies)
Peach John Co., Ltd.
three other companies

WACOAL AMERICA, INC.
WACOAL DOMINICANA CORP.

(U.S.)(Dominican Republic)
three other companies(Europe: two companies)
WACOAL FRANCE Société Anonyme
WACOAL (UK) LTD.

(France)(UK)(Asia: 16 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)*Shinyoung Wacoal Inc.
(Korea)*Taiwan Wacoal Co., Ltd.
(Taiwan)*THAI WACOAL PUBLIC CO., LTD．
(Thailand)
Out of seven other companies,
three equity method affiliates

Wacoal Holdings Corp. (holding company)
Without mark: a consolidated subsidiary*: an equity method affiliate- 8 -(Lecien: nine companies)
Lecien Corporation
LECIEN (VIETNAM) CO., LTD.
(Vietnam)
Out of seven other companies,
one equity method affiliate(Eveden: 14 companies)
WACOAL EVEDEN LIMITED (UK)EVEDEN LIMITED(UK)
EVEDEN INC.
(U.S.)
EVEDEN TIMEX LIMITED(Sri Lanka)
10 other companies(Other: five companies)
Nanasai Co., Ltd.
Wacoal Service Co., Ltd.
Wacoal Career Service Corp.
*House of Rose Co., Ltd.
one other company

4. 【Information on 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

4Rent of officebuilding

Peach John Co., Ltd.

Shibuya-ku, Tokyo

90

Peach John Business(Sale of garments)

100

2

－

100

3

Rent of storage
building

1

Rent of officebuilding－

Same as above－

Same as above

3

Same as above

2

－

3

－

－

－

3

－

－

－

2

－

2

－

3

－

1

－

4

－

1

－

2

－

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

Other
(Investment in affiliates)

EVEDEN LIMITED

Northamptonshire,UK

250 thousand
GBP

Other
(Manufacture and sale of garments)

100

Saint-Denis, France

5,000 thousand
EUR

Wacoal Business (Overseas)(Sale of garments)

100

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

WACOAL FRANCE Société Anonyme

54,604 million
VND

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

Same as above

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

100
(100）

100
(100）

100
(100）

100
(100）
(100）

80
(80）

100
(100）

100
(100）

100
(100）

100
(100）

(100）

40 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

4 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 of Financial Instruments and Exchange Act.
- 9 -

*2
*3
*4
*5
*6

The number in brackets under the “Percentage of Voting Rights Owned or Held” column means the percentage of indirect
holding.
The name of operating segments is shown under the “Principal Business” column.
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.
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

112,224 million yen(ii) Ordinary income

9,001 million yen(iii) Net income

8,197 million yen(iv) Net assets

92,369 million yen(v) Total assets

123,640 million yen- 10 -

5. 【Employees】(1) Employees within group
As of March 31, 2013
Name of Operating Segment

Number of Employees

Wacoal Business (Domestic)

7,486

[949]

Wacoal Business (Overseas)

7,746

[58]

338

[30]

3,052

[222]

18,622[1,259]Peach John Business
Other
Total
(Note)

1

2
3

The number of employees is the number of individuals working within our group (excludes individuals seconded from ourgroup to third parties, but includes individuals seconded from third parties to our group). The average number of temporary
employees is indicated in brackets for the current consolidated fiscal year.
Temporary employees include temporary staff and part-time workers whose working period is about 3 months.
An increase of 2,098 from the end of prior fiscal year in the number of employees for the other segment was due to theaddition of Eveden as well as its subsidiaries, which became our consolidated subsidiaries as of April 10, 2012.

(2) Employees of the Company
As of March 31, 2013
Number of Employees
71(Note)

1
2
3

Average Age

Average Years of Service
47.1

21.0

Average Annual Salary (Yen)
6,906,332

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

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

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II. Business Overview
1. 【Summary of Business Results】(1) Summary of Operations
Our group (primarily Wacoal Corp., our core operating entity) entered the final year of our three-year midterm plan(from fiscal year 2011 to fiscal year 2013) and sought to improve profitability through market share expansion and structuralreform of our domestic innerwear business and made efforts to strengthen growth by actively developing our overseas business.
As a result of the above, according to our consolidated business results for the fiscal year that ended in March 2013,
overall sales increased from the previous fiscal year mainly due to the expansion of sales attributable to our businesses in the
United States, and also due to the inclusion of the business results of Eveden. Operating income decreased from the previous
fiscal year due to the impact of the impairment loss of 2,852 million yen as a result of the reassessment of the fair value of PeachJohn, despite our efforts to promote efficiency through cost reduction and cutting expenses. Net income attributable to Wacoal
Holdings Corp. exceeded the results for the previous fiscal year as a result of favorable factors, including the sale of marketablesecurities and a decrease in tax expenses.
Sales:

177,154 million yen(an increase of 3.1% as compared to the previous fiscal year)

Operating income:

8,099 million yen(a decrease of 22.0% as compared to the previous fiscal year)

Pretax net income:

10,544 million yen(an increase of 3.3% as compared to the previous fiscal year)

Net income attributable to Wacoal
Holdings Corp.:

7,623 million yen(an increase of 10.3% 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 strong performance, due to the increased sales of certain
campaign products and high-price products that are sold through channels, despite poor performance of bottom products. Salesof undergarments were below the results for the previous year due to competition and unsteady weather conditions. On the other
hand, sales of underpants that were featured in TV commercials showed strong performance as a result of enhanced in-store
promotions. As a result of the above, overall sales of our Wacoal brand business remained unchanged from the results for theprevious fiscal year.
In our Wing brand business, sales of our core brassieres showed steady performance due to the favorable performanceof our products based on “body aging” and an increase in the number of shops promoting our collaboration products with our
major clients. Our bottom products, however, performed poorly due to weak sales of Style Science series products withfunctionality. Sales of men’s innerwear fell below the results for the previous fiscal year due to the poor performance of ourseasonal products. As a result of the above, overall sales of our Wing brand business remained unchanged from the results forthe previous fiscal year.
In our retail business, sales at our direct retail store AMPHI and our Wacoal Factory Stores, which are located in outlet
shopping malls, showed growth as a result of an increase in the opening of new stores and due to favorable performance atexisting stores. As a result, overall sales of our retail business exceeded the results for the previous fiscal year.
In our wellness business, sales of our sports conditioning wear “CW-X” brand were impacted by the products sold byour competitors, but our new products with increased functionality and products jointly developed with a major pharmaceuticalcompany showed favorable performance. As a result, overall sales of our wellness business remained unchanged from theresults for the previous fiscal year.
In our catalogue sales business, overall sales exceeded the results for the previous fiscal year due to the favorable
performance of catalogue and Internet sales.
In summary, overall sales attributable to Wacoal business (Domestic) remained unchanged from the results for theprevious fiscal year, due to steady performance of our core operating business within Wacoal Corp. With respect to profitability,
our operating income exceeded the results for the previous fiscal year due to improved profit margins from Wacoal Corp.

- 12 -

Sales:

115,657 million yen(a decrease of 0.2% as compared to the previous fiscal year)

Operating income:

8,423 million yen(an increase of 3.1% as compared to the previous fiscal year)(ii) Wacoal Business (Overseas)
We made aggressive efforts in expanding our U.S. market share and enhancing our product lineup, mainly at
department stores, which are our major clients, as well as in expanding our sales areas and channels. Sales exceeded the results
for the previous fiscal year as a result of favorable performance shown by our core brassiere products and the growth achieved in
our Internet sales and business in Canada. With respect to profitability, operating income exceeded the results for the previous
fiscal year following an increase in sales. The exchange rate in the current fiscal year was 82 yen per dollar (compared to 78 yen
per dollar for the previous fiscal year).
With respect to our business in China, we made efforts in strengthening our product lineup and improving the retention
rates of in-store sales representatives. Although sales showed slower growth due to the economic slowdown and the anti-Japanrallies that took place in China, overall sales from our business in China exceeded the results for the previous fiscal year due tothe improved sales force and opening of additional stores. In addition, sales of our new fashionable and price-competitive brand“La Rosabelle,” targeting the middle-class market, showed strong performance after the opening of two stores in Beijing. With
respect to profitability, we recorded an operating loss as a result of an increase in labor costs and the impact of the anti-Japanrallies, despite our efforts in reducing costs. The exchange rate in the current fiscal year was 12 yen per Chinese yuan.
(compared to 12 yen per Chinese yuan for the previous fiscal year).
Sales:

23,081 million yen(an increase of 7.9% as compared to the previous fiscal year)

Operating income:

1,430 million yen(a decrease of 0.7% as compared to the previous fiscal year)(iii) Peach John Business
Sales from our core mail-order catalogues fell below the results for the previous fiscal year due to the expansion ofsales of innerwear achieved through TV commercials in the previous year and the poor performance of outerwear and generalmerchandise, despite our efforts in increasing occasions to receive orders by realigning based on consumer age-group and bysending supplementary volume of catalogues. Net sales attributable to our directly managed stores in Japan showed weak
performance due to insufficient inventory of our popular items. With respect to our directly managed overseas stores, sales from
Hong Kong exceeded the results for the previous fiscal year due to the opening of new stores, while our directly managed storesin China showed weak performance. As a result of the above, overall sales from our Peach John Business fell below the results
for the previous fiscal year. With respect to profitability, despite our efforts to promote efficiency through cost reduction andcutting expenses, we recorded an operating loss due to reduced sales and recognition of impairment loss.
Sales:

11,972 million yen(a decrease of 13.5% as compared to the previous fiscal year)

Operating loss:

2,701 million yen(as compared to 529 million yen of operating income incurred for the previous
fiscal year)(iv) OtherWith respect to the business of Lecien, overall sales fell below the results for the previous fiscal year, due to thedecreased number of products offered to our major clients in our innerwear business, which mainly offers innerwear products,
and as a result of the termination of the unprofitable products at our apparel business, which offers outerwear products. In terms
of profit, operating income exceeded the result for the previous fiscal year that from the previous fiscal year due to our
successful efforts in cost reduction, in addition to the improvement of profitability from our apparel business and nonincurrenceof expenses incurred in connection with the withdrawal from our employee’s pension fund during the previous fiscal year.
As for Nanasai, which engages in the manufacturing, sales, and rental business of mannequins, interior design, andconstruction of stores at commercial facilities, net sales exceeded the results for the previous fiscal year due to the favorable
performance of our interior construction business. On the other hand, our sales and rental businesses were impacted by restrained
investments by our business partners and the closing of department stores. With respect to profitability, operating income
exceeded the results for the previous fiscal year as a result of our successful efforts in cutting expenses.
While operating income from Eveden was less than initially expected due to the impact of the economic slowdown
seen in European countries and currency fluctuations, sales exceeded our initial plan on a local currency basis as a result offavorable expansion generally in the United Kingdom and North America.
- 13 -

Sales:26,444 million yen(an increase of 27.2% as compared to the previous fiscal year)

Operating income:

947 million yen(an increase of 301.3% as compared to the previous fiscal year)

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

Japan

With respect to Wacoal Corp., sales of our core Wacoal and Wing brand products showed strong performance. Overallsales of Wacoal Corp. remained unchanged from the results for the previous fiscal year. Operating income exceeded the results
for the previous fiscal year as a result of improved profitability.
With respect to Peach John, sales from our core mail-order catalogues fell below the results for the previous fiscal year
due to the expansion of sales of innerwear achieved through TV commercials in the previous year and the poor performance ofouterwear and general merchandise, despite our efforts in increasing occasions to receive orders by realigning by consumer agegroup and by sending supplementary volume of catalogues. Net sales attributable to our direct retail stores showed weak
performance due to insufficient inventory of our popular items. As a result of the above, overall sales from our Peach John
Business fell below the results for the previous fiscal year. With respect to profitability, operating income exceeded the results
for the previous fiscal year due to our efforts to promote efficiency through cost reduction and cutting expenses.
With respect to the business of Lecien, overall sales from Lecien fell below the results for the previous fiscal year due
to the decreased number of products offered to our major clients in our innerwear business, and the termination of theunprofitable products at our apparel business, which offers outerwear products. In terms of profit, operating income exceeded
the results for the previous fiscal year due to our successful efforts in cost reduction, in addition to the improvement of
profitability in our apparel business and non incurrence of expenses in connection with the withdrawal from our employee’s
pension fund during the previous fiscal year.
As for Nanasai, which engages in the manufacturing, sales, and rental business of mannequins and interior design andconstruction of stores at commercial facilities, net sales exceeded the results for the previous fiscal year due to the favorable
performance of our interior construction business, despite the poor performance of our sales and rental businesses, which were
impacted by restrained investments by our business partners and the closing of department stores. With respect to profitability,
operating income exceeded the results for the previous fiscal year as a result of our successful efforts in cutting expenses.
As a result of the above, sales from our business in Japan amounted to 146,224 million yen, a decrease of 2.2%
compared to the previous fiscal year.
(ii) Asia/Oceania
With respect to our business of Wacoal Corp. in China, we made efforts in strengthening our product lineup andimproving the retention rates of in-store sales representatives. Although sales showed slower growth due to the economic
slowdown and the anti-Japan rallies that took place in China, overall sales from our business in China exceeded the results forthe previous fiscal year due to the improved sales force and the opening of additional stores. In addition, sales of our new
fashionable and price-competitive brand La Rosabelle, targeting the middle-class market, showed strong performance after
opening two stores in Beijing. With respect to profitability, we recorded an operating loss as a result of an increase in labor costs
and the impact of the anti-Japan rallies, despite our efforts in reducing costs.
With respect to our directly managed overseas stores of Peach John, sales from Hong Kong exceeded the results forthe previous fiscal year due to the opening of new stores, while our directly managed stores in China showed weak performance.
As a result of the above, sales from our business in Asia/Oceania amounted to 12,685 million yen, an increase of
20.5% 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 andenhancing our product lineup mainly at department stores, which are our major clients, as well as in expanding our sales areasand channels. Sales exceeded the results for the previous fiscal year as a result of favorable performance shown by our corebrassiere products and the growth achieved in our Internet sales and business in Canada. With respect to profitability, operating
income exceeded the results for the previous fiscal year following an increase in sales.
With respect to Eveden, while operating income was less than initially expected due to the impact of the economic
slowdown seen in European countries and currency fluctuations, sales exceeded our initial plan on a local currency basis as aresult of favorable expansion generally in the United Kingdom and North America.
As a result of the above, sales from our business in Europe/North America amounted to 18,245 million yen, an
increase of 54.8% as compared to the previous fiscal year.

- 14 -

(2) Cash Flow Status
The balance of cash and cash equivalents at the end of fiscal year 2013 was 24,860 million yen, a decrease of 5,125 million yen
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 2013 was 12,741 million yen, an increase of 2,681 million yen
compared to the previous fiscal year, which reflects the result after adjusting the net income of 7,834 million yen for depreciation
expenses and deferred taxes, as well as changes in assets and liabilities.
(Cash flow used in investing activities)
Cash flow used in investing activities during the fiscal year 2013 was 23,436 million yen, an increase of 19,969 million yen
compared to the previous fiscal year, due to the acquisition of a new subsidiary (net of cash acquired) and other factors, despite
proceeds from the sale and redemption of marketable securities.
(Cash flow provided by financing activities)
Cash flow provided by financing activities during the fiscal year 2013 was 5,303 million yen, an increase of 8,127 million yen
compared to the previous fiscal year, due to an increase in short-term bank loans and other factors, despite the cash dividend
payments.

- 15 -

2. 【Production, Orders Received, and Sales】(1) Production Results
Our consolidated production results by operating segment for fiscal year ended March 2013 are as follows. The production
results for other segment are not shown since it is hard to define such term in this segment.
Changes as Compared toName of Operating Segment
Amount (Millions of yen)Previous Fiscal Year (%)
Wacoal Business (Domestic)

49,821

100.1

Wacoal Business (Overseas)

9,519

111.3

59,340

101.7

Total
(Note)

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

(2) Orders Received
Among other segment, the department of Nanasai, which handles interior design and construction of general housings and storesat commercial facilities, adopts the build-to-order production system.
The status of orders received for other segment for fiscal year ended March 2013 is as follows:
Amount of Orders Changes as Compared Balance of Amount of Changes as Compared
Name of Operating Segment
Received
to Previous Fiscal
Orders Received
to Previous Fiscal(Millions of yen)
Year (%)(Millions of yen)
Year (%)
Other(Note)

5,417

110.4

338

89.7

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)

115,657

99.8

Wacoal Business (Overseas)

23,081

107.9

Peach John Business

11,972

86.5

Other

26,444

127.2

177,154

103.1

Total
(Note)

1
2

None of the purchasers’ sales accounts for 10% or more of the total sales results.
The amounts in the above table do not include consumption tax, etc.

- 16 -

3. 【Management Issues】(1) Business and Financial Issues to Address
Maintaining and expanding sales from our domestic business is essential to our group’s sustainable growth. While thedomestic women’s innerwear market has diversified, our sales channel and regional strategies based on consumer behavior havebecome an important issue for us. We will need to create an organizational structure through which we 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 see our overseas business as our group’s biggest growth engine. The expansion of our business in each of ouroverseas regions will be a very important element in our pursuit of the “Wacoal of the World” strategy. In addition, we believe it
is essential for us to build manufacturing capability, which will enable us to develop and supply products with stability andcompetitiveness by adapting to the respective markets in the 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.
(2) Basic Policy Concerning Persons who Control the Asset and Business Policy Decisions of Wacoal Holdings Corp.
Basic policy concerning persons who control the asset and business policy decisions of Wacoal Holdings Corp. has
been prescribed as follows as of the filing date of this report (June 27, 2013).
(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 withour consumers; (v) the trust of our consumers that has been gained through direct communication and sales by our beauty
advisers, who have a sound knowledge of our products and a wealth of sales experience; and (vi) our good social standing
established through the 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” aresecured over the medium to long term. We, therefore, believe that any person who controls our assets and business decisions
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)
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.

- 17 -

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, 2013, our Board of Directors is composed of eight directors. The board makes decisions on mattersconcerning important business, such as management policy and management strategy and matters stipulated by laws orordinances or our Articles of Incorporation. Three of these eight directors are independent outside directors who give our Boardof 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 a “corporate auditor system,” and our Board of Corporate Auditors consists of five corporate auditors, ofwhich three are outside corporate auditors, as of March 31, 2013. The function of our Board of Corporate Auditors is to monitor
and supervise our management.
Further, all of the three outside directors and three outside corporate auditors have been designated as our independent
officers, and have been notified to the Tokyo Stock Exchange and Osaka Securities 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 corporate auditors has
been established in the Company. This meeting considers matters concerning the management strategy of our group and otherimportant management issues, and conducts preliminary reviews of matters for review by our Board of Directors together withthe “Wacoal Senior Management Meeting,” which involves directors, corporate auditors, 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 corporate auditors and the directors, corporate auditors, and executive officers of
Wacoal Corp. attend meetings of the Quarterly Business Results Review Committee and review the business results of eachcompany and business department. Also, under the “Group Management Meeting,’ we have established the “Group Strategy
Committee,” where the managers of our group’s major companies in Japan and overseas, in addition 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,” “Disclosure Committee,” and “Risk Management Committee” haveeach been established as committees 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 these divisions is ready to enhance corporate value and respond to risks of loss in each field. These divisions reportto our Board of Directors from time to time on the status of their activities.

- Measures to prevent inappropriate persons from controlling our decisions of financial and business policies in lightof 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,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), and- 18 -

the 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 (i) or (ii) below:
(i)
(ii)

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 than 20% 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, provided, however, that 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.

- 20 -

4. 【Risk Factors】
Our business, performance, and financial conditions 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 on information available as of the end of fiscal year 2013.
(1) We may be adversely affected by the domestic and global economy
While the global economy has recently begun to show a sign of recovery in China and Asian countries, the weakeconomic growth seen throughout Europe and the United States has heightened the risk of turmoil in the global economy.
As for the domestic economy, economic recovery is expected including attempts to combat deflation by the aggressive
credit relaxation policy after the change of government; and development is expected from the adoption of the reconstruction
budget in response to the earthquake. On the other hand, the outlook of the Japanese economy remains uncertain due to theeconomic effect of the economic policy, the two-time increase in consumption tax, and the long-term effects of the power andenergy supply-related issues.
During fiscal year 2013, the Japanese market accounted for approximately 82.5% of our net sales, and the UnitedStates and European markets accounted for approximately 10.3%. In the major markets in which we operate, the continued
weakness or deterioration in the economy may have a material adverse effect on our sales, results of operations, and financial
conditions. Our businesses may be particularly sensitive to declines in consumer spending. In addition, another financial crisis
may result in lower returns or losses on our financial investments.
(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 2013, a substantial majority of our net sales were generated in department stores, general merchandisers,
and other general retailers in Japan. While we are making efforts to increase sales of directly-managed stores and our Internet
sales, we expect that the majority of our net sales will continue to be made through department stores, general merchandisers,
and other general retailers in Japan for the foreseeable future.
In recent years, many department stores, general merchandisers, and other general retailers in Japan have experienced
business difficulties for a variety of reasons, including weak consumer spending, competition from convenience stores, catalogue
and Internet retailers, and other sources. Due to these circumstances, the retail market has been undergoing a structural change,
which has led to, among other things, the emergence of specialty apparel manufacturers. As a result of this trend, which we
expect to continue for the foreseeable future, the share of sales from department stores, general merchandisers, and specialty
retail stores in the overall retail market is expected to remain weak and may continue to decline.
Continued weakness in the department store, general merchandise, and specialty retail sector would make it difficult toincrease sales to our customers in this sector, and the failure of one or more of our important general retail customers could
materially harm our business. This would mean an immediate loss of sales to such failed retailer and the potential inability tocollect some or all of our outstanding accounts receivable from it. Likewise, increased consolidation of Japanese department
stores and general merchandisers in preparation for a shrinking market due to the future anticipated decrease in the population ofJapan may allow our customers to increase their bargaining power in negotiating pricing and other terms of trade, which could
have a material impact on our profitability. 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.
As a result of any of the above factors or otherwise, any change in the business environment surrounding department
stores, general merchandisers, or other general retailers in Japan would have a material impact on our business, profitability, andfinancial conditions.
(3) Our sales may decline if we are unable to effectively anticipate and respond to consumer tastes and preferences and deliver
high-quality products
Our success depends in part on our ability to effectively anticipate and respond to changing consumer tastes,
preferences, and demands and to translate market trends into products that consumers want to buy at the prices that will allow us
to be profitable. Consumer tastes and fashion trends change rapidly and are difficult to predict. If we are unable to successfully
anticipate or respond to changing styles or trends, or if we lose the support of our customers, we would be unable to achieve oursales targets and our financial results would suffer as a result.
In addition, we believe that we have established broad brand recognition in our core Japanese market for our highquality and fashionable women’s innerwear garments, and that this brand recognition is very important for our ability to target
the high end of the women’s innerwear market. As a result, our brand image may suffer if we misjudge the market or sell
defective merchandise causing consumers to believe 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.

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(4) The apparel market is highly competitive, and our share of sales or profitability may decline if we are unable to maintain ourcompetitivenessThe sale of intimate and other apparel is highly competitive, and we must compete for sales with a wide range of otherapparel companies. In addition to competition from wholesalers and direct retailers in the mid- to high-end undergarment
market in Japan, we must also compete against catalogue and Internet sales and new entrants to the intimate apparel market,
including mass-market and specialty apparel companies, as well as outerwear fashion manufacturers.
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. Factors driving this trend include increased product sourcing and production
in lower-cost Asian countries, the introduction of new manufacturing technologies, consolidation in the retail industry, and aprolonged period of sluggish consumer spending, particularly in Japan. Our strategy of focusing on the higher end of theintimate 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
As of March 31, 2013, we had a total of 172 stores in our network in Japan, including 20 factory outlet stores. We
hope to increase our contact with younger women and other consumers who may have less awareness of our brand and products
and who may be less likely to shop for intimate apparel in the general retail stores that carry our products, particularly throughour efforts in promoting our network of specialty retail stores carrying brands.
In pursuing this strategy, we believe increasing sales to younger career-oriented women, as well as younger women ingeneral, is essential for increasing future sales and improving profitability. In June 2006, we entered into a business and capitalalliance with Peach John by acquiring 49% of its shares. Subsequently, in January 2008, we made Peach John a wholly owned
subsidiary, which, in combination with our specialty retail business, enabled us to strength our business targeting younger
consumers.
However, there are a number of risks that we must address in order for our specialty retail stores to succeed, and we
may not be successful in resolving these risks, especially in light of our limited experience in operating our own stores. For
example:zzzz

our specialty retail store strategy depends in large part on our ability to find attractive store locations that will provide
sufficient consumer traffic to drive sales;
we must compete for good store locations with other retailers pursuing similar strategies;
we may not be able to open new stores with capital investment, leasing, and other costs that will allow us to earn areasonable return; andwe must effectively recruit personnel, control inventory, market our stores and new product lines, and otherwise operate ourstores successfully.

We are developing and marketing distinct lines of intimate apparel for our specialty retail stores under brands that do
not feature the Wacoal name in order to reach the targeted consumers for our stores and avoid competition with our general retailcustomers who carry our Wacoal brand apparel. This strategy carries risks, including the risk that our new apparel lines may notmeet the fashion, function, and other needs of our targeted consumers.
Further investment is necessary in order to expand our specialty retail store business, including costs for thedevelopment of new stores and the closure of underperforming stores and improvement costs for the specialty retail store brand.
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 consumers, we may not be able to makesufficient gains to recover the investment.
(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. However, we face challenges in our catalogue and Internet sales
strategies. Our sales through these channels currently represent a small share of our overall sales. We face intense competitionin our catalogue and Internet business, and many of our competitors have more experience and have devoted more resources tothese channels than we have. Although our acquisition of Peach John—which has a large share of catalogue sales to young
people in Japan—has contributed to our efforts in this area, we believe that we need to make further system investments in order
to expand our catalogue and Internet sales for our group as a whole. However, we may not be successful in increasing ourcatalogue and Internet sales sufficiently to compensate for continued flat or declining sales through our core general retailer
channel, which could have a material adverse effect on our financial condition and operating results and may lead to impairment
charges against goodwill and intangible assets recorded in connection with our acquisition of Peach John.

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(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. In addition, the cyclical nature of the retail business requires us to carry additional inventory, especially prior to peakselling seasons when we generally build up inventory levels.
We generally enter into contracts for the purchase and manufacture of merchandise with our suppliers well in advanceof the applicable selling season. As a result, we are vulnerable to demand and pricing shifts and to suboptimal selection andtiming of merchandise purchases. Therefore, 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, ortake other steps, which could have a material adverse effect on our sales, results of operations, and financial condition.
In addition, we review our inventories on a regular basis for their salability and for indications of obsolescence todetermine if a write-down due to changes in market demand and other factors is necessary. Any write-downs of inventory
resulting from such reviews may have an adverse impact on our earnings and profitability, depending on the extent of themarkdowns and the amount of inventory affected.
(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. For example, in order to improve theefficiency of our product distribution system, we have reduced the number of our distribution centers over the years from the 18
centers we maintained in 1998 to our present three distribution centers. We have also taken steps over the years to reduce ourlabor costs in Japan, such as closing production facilities, implementing an early retirement program, and undertaking a reformof our pension plan. We are also seeking to produce or otherwise source more of our apparel in lower-cost Asian countries.
Additionally, we are reorganizing production functions and taking other steps to reduce manufacturing costs.
However, with the possibility of an increase in product material prices, a rise in labor costs in Asia, or costs being
incurred in response to changes in the 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. The competition for qualified personnel in Japanis intensifying due to a gradual reduction of the working population due to demographic trends in Japan and an increased
demand for labor. Furthermore, it is also necessary to retain overseas operations staff for the purpose of our group’s sales
expansion in overseas market. Our ability to attract qualified personnel depends in large part on our ability to establish andmaintain 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 can 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.
We cannot predict future weather patterns or judge the effect that weather patterns may have on our sales andprofitability.
(11) We may face increasing risks relating to conducting business internationallyIn fiscal year 2013, approximately 82.5% of our net sales were made in Japan. However, we have gradually increased
both the amount of goods we produce and the amount of raw materials we procure in lower-cost countries—a trend we expect tocontinue. 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 ourbusiness abroad, including:zzzz

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;- 23 -

zzzchanges 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. Three of our key transactions are as
follows:zzz

Peach John. In June 2006, we entered into a business and capital alliance with Peach John, which markets innerwear,
outerwear, and other products of its own original design to younger women in Japan through catalogue and company-owned
retail store sales, by acquiring a 49% interest. In January 2008, we acquired the remaining 51% interest and made PeachJohn a wholly owned subsidiary.
Lecien. In August 2009, Lecien, which manufactures and sells women’s innerwear and clothing for the Japanese market,
became our wholly owned subsidiary through a share exchange. Lecien’s strength is in the so-called “volume zone,” whichis the market for products in the mid-price range generating the largest volume of sales.
Eveden. In April 2012, we acquired all of the shares of Eveden, a corporation engaged in the manufacture and sale ofwomen’s undergarments and swimming wear, mainly in the United Kingdom and other European countries, North America,
Australia, Asia, and other areas. Eveden was dissolved and its function was transferred to Wacoal Eveden in March 2013.

Any acquisitions or other strategic transactions that we have pursued or may pursue in the future may involve
significant risks to our company and the value of our shares. For example, our equity may be significantly diluted if we issue
shares as consideration in any significant strategic transaction. Also, our balance of available cash will be reduced to the extent
that we pay cash as consideration in one or more strategic transactions.
Other potential risks that may arise from our strategic transactions include the following:
z
z
z
z
z
z

z

difficulty and expense of assimilating the operations, technology, and personnel of an acquired business;
our inability to retain the management, key personnel, and other employees of an acquired business;
our inability to maintain an acquired company’s relationships with customers, suppliers, and other key third parties;
exposure to legal claims for activities of the acquired business prior to the acquisition;
the diversion of our management’s attention from our core business;
impairment charges we would have to take if we were to conclude that there had been a non-temporary decline in the fairvalue of our investment in an investee company, below its carrying value if, for example, the investee business was not
generating increasing cash flows as quickly as we had expected at the time of our initial investment, or possible impairment
charges to goodwill or intangible assets; andfailure to achieve any intended cost reductions due to unsuccessful integration of or a lack of cooperation between ourbusinesses with those of our counterparties.

If any of these or any other material risks occur, it could have an adverse effect on a business we acquire, as well as theresults, financial condition, and cash flow of our existing operations. For example, in fiscal year 2013, we recognized a further
impairment loss of ¥2,852 million composed of an impairment loss of approximately ¥1,587 million against trademarks, ¥68
million against customer relationships, and ¥1,197 million against goodwill after reassessing the fair value of Peach John.
(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 are subject to certain risks in our business relating to intellectual property rights. In particular, we believe that ourbrands and related trademarks are important to our ability to create and sustain demand for our products and to the value of ourbusiness. We may encounter trademark and related disputes in the future, and our actions to establish and protect our trademarks
and other proprietary rights may not be adequate to prevent imitation of our products or the infringement of our trademarks andproprietary rights by others, which 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) 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
We must comply with laws and regulations regarding privacy and the protection of customer information in thejurisdictions where we conduct our business and operations. These laws and regulations change over time and are not consistentacross jurisdictions. Violations of these requirements could arise in a number of ways, including problems with our information
systems and inadvertent or intentional disclosures of information by our employees. Any failure by us to comply with these laws
- 24 -

and regulations could result in proceedings against us by governmental entities or others, which could potentially have an
adverse effect on our sales and profitability. Complying with varying privacy requirements could cause us to incur substantial
costs and force us to change our business practices.
Any failure by us or third parties to whom we entrust any of our operations to properly protect our customers’ privacy
and data could cause customers to lose confidence in our business and products, which could result in a material adverse effecton 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.
(16) 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 in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual
management assessments of the effectiveness of our internal controls over financial reporting and a report by our independent
registered public accounting firm addressing these assessments.
The yearly evaluation conducted by management and independent external auditors did not discover any material
deficiencies during fiscal year 2013. However, we recognize that there are certain improvements that we should make withparticular aspects of our internal controls.
In addition, although we have a policy of actively responding to identified deficiencies at the group level, there is apossibility that we may not be able to successfully implement revised controls and procedures, and our revised controls andprocedures may not be effective in remedying any deficiencies that have been identified.
Furthermore, there is a chance that new deficiencies will arise owing to changes and amendments to the standards forestablishing and maintaining effective internal controls or changes that affect the business environment generally, and we may
not be able to conclude for the purpose of our annual reports that we have effective internal controls over financial reporting inaccordance with Section 404 of the Sarbanes-Oxley Act of 2002.
Moreover, 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 businessand operating results could be harmed, investors could lose confidence in our reported financial information, and the trading
price of our stock could drop significantly.
(17) Our holdings of equity securities expose us to market risks
We hold equity and other securities in a number of publicly traded Japanese companies. A significant drop in thevalue of these securities, or in the Japanese equity markets in general, could have an adverse impact on our financial results in
the relevant reporting period. For example, although our balance sheet as of March 31, 2013, showed an unrealized gain on
securities of ¥9,310 million, we were required to recognize a valuation loss on our equity securities holdings of ¥316 million forfiscal year 2013. This loss recognition was primarily the result of a determination that a decrease in the fair value of certain
equity securities was other than temporary.
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.
(18) 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; it also regularly experiences typhoons and othernatural disasters. In the event of a large earthquake, other natural disaster, or outbreak of an epidemic that affects our employees
or our ability 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 ourbusiness. Any such natural disaster or epidemic could also cause disruptions in the transportation networks that our business
relies upon and could 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 2013, 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.
The promotion of our research and development is supported by Development Group I, Development Group II, Research Group,and Development Assistance Group of our Human Science Research Center, with a theme of “research and development with full use
of aging research.”
During the fiscal year that ended in March 2013, in February 2012, we made public our findings related to breast development
among juniors during such periods of physiological change. We have presented our findings to the public not only on our website or
through interviews, but also through seminars called "Tsubomi School" to such juniors and their mothers in a closed and secureenvironment. In terms of product development, we proposed our new aging products, lifestyle modification support products, as well
as exercise habit support products. In addition, in order to compile our physiological database that is required for our future
development of aging products, we took measurements from about 1,500 individual subjects, and made efforts in enriching oursoftware and hardware, such as creation of a three-dimensional mannequin.
As a result of the above, we recorded 788 million yen for our research and development during the fiscal year ended March 2013.
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, 2013).
(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 73.5% of our consolidated net sales for fiscal year
2013. 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 2013:

Net Sales to External Customers (and Percentage) by Product Category
2013
Innerwear
Foundation and lingerie¥Nightwear
Children’s underwear
Total innerwear
Outerwear and sportswear
Hosiery
Textile products
Other
Total ¥

130,284
9,232
1,467
140,983
16,4391,559
7,580
10,593
177,154

73.5%
5.2
0.8
79.5
9.3
0.9
4.3
6.0
100.0%For fiscal year 2013, approximately 82% of the net sales of Wacoal Corp. (the net sales of which account for
approximately 65% of our consolidated net sales) were apparel sales made on a wholesale basis to department stores, generalmerchandisers, and other general retailers and approximately 16% 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 2013.
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 shipment costs, payment fees (including outsourcing payments), and rental payments for our specialty retail stores.
Key Industry Trends
We believe that the following have been key trends in our industry during the last two fiscal years:(i) In Japan, although there was a sense of expectation for recovery in economy as seen in the reconstruction of
economy in northern Japan from the earthquake and tsunami and breaking out of deflation as a result of implementing a largescale monetary easing measures after the change in political administrations, the outlook of the Japanese economy for a fullscale economic growth remains to be seen. While we experience a population decline, low birth rate, and aging population, it isdifficult to improve consumer confidence due to an uncertain outlook. This is due to factors, such as a tax increase to financeearthquake reconstruction, energy supply-related issues, and concern about market reduction from a macroeconomic perspective.
As for overseas, global economy is in a state of chaos caused by the protracted uncertain outlook in the leading countries in
Europe and the United States, which edged down the growth in China and/or emerging countries in Asia while gradualexpansion was seen in these countries.
- 28 -

(ii) The number of department stores, one of our key distribution channels, and retail sales through department stores
declined due to the deterioration in consumption caused by the worsening economy. General merchandising stores faced not
only decreases in the numbers of new branch openings due to stagnant consumption levels, but also decrease in the number ofstores, as well as reductions in retail sales. At the same time, however, sales at direct sales outlets and on our website havesteadily risen.
(iii) Due to adverse changes in consumer behavior and retail industry coupled with factors such as a decline in thefemale population, the market for women’s innerwear garments in Japan shrank, and the prices of innerwear declined in terms ofboth overall prices and average price per item. The numbers of innerwear items purchased and owned per person also decreased.
(iv) 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.
(v) 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.
(vi) 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) Inventoies
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- 29 -

average selling price, expected average cost to make a sale, markdown rate, and class or type of inventories, are analyzed todetermine estimated net realizable value. We also consider potential disposal of inventories. Criteria utilized to quantify thefactors we consider include historical results, judgments regarding future consumer demand, and other factors. We believe thatthe amount written down is appropriate. However, if market conditions and demand are less favorable than our projections, theamount we write down may increase and may adversely affect our financial condition or operating results.
(iv) Deferred Tax Assets
We currently have significant deferred tax assets, which are subject to periodic recoverability assessments. Realizationof our deferred tax assets is principally dependent upon the realization of projected future taxable income. In estimating our
future taxable income, we consider past operating results, the feasibility of ongoing tax planning strategies, and other factors.
Our judgments regarding future profitability may change due to future market conditions and other factors. These changes, ifany, may require recognition of a significant valuation allowance for these deferred tax asset balances. In the event wedetermine that certain deferred tax assets may not be recoverable, such amounts will be reserved for and may adversely affect net
income. We believe our deferred tax assets after adjustments for valuation allowance are recoverable. If we record lower-thanexpected earnings and our deferred tax assets become unrecoverable, however, a valuation allowance must be recorded against
the amount that is not likely to be recovered, and this may have a negative impact on our profit and loss.
(v) Impairment Charges on Investments
Impairment charges on investments are charged to earnings when a decline in fair value below the cost is other than
temporary. We periodically determine whether a decline in the fair value of marketable securities and investments is deemed tobe other-than-temporary decline, based on criteria that include the duration and severity of market decline, the extent to whichcost exceeds market value, our financial position and business outlook, and our intent and ability to retain the impaired
marketable securities and investments for sufficient period of time for anticipated recovery in fair value.
We believe that the criteria for evaluating impairment are reasonable. However, changes in the market or
circumstances of each individual investment due to unforeseen changes in economic and business assumptions could affect thevaluations of the investments.
For fiscal year 2013, 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
2013, 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 2013, 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.
- 30 -

Significant assumptions used in this analysis include future cash flows and the risk-adjusted discount rate. Future cash
flows are based on the management’s cash flow projections for the future five years, after which future cash flows are estimatedusing the perpetuity growth rate of zero. The management’s cash flow projections are developed using estimates for expected
future revenue growth rates, profit margins, and working capital levels of the reporting units. The risk-adjusted discount rate isdetermined by the Capital Asset Pricing Model (“CAPM”) and we mainly utilize a weighted-average cost of capital (“WACC”)
of 4.5%.
As a result of the evaluation performed for fiscal year 2013, we recognized an impairment loss of ¥1,197 million in the
carrying value of goodwill for any of our reporting units.
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.
On March 31, 2013, we evaluated the recoverability of trademark and concluded that there was no impairment in the
carrying value of trademark. 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 theactual transaction with a third party.
As a result of the evaluation performed for fiscal year 2013, we recognized an impairment loss of ¥1,587 million 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 2013, we recognized an impairment loss of ¥68 million 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, 2013 on the Japanese government
bonds whose maturity dates approximate the timing of the expected future benefit payments. On March 31, 2013, the discountrate used for the contributory retirement plan was 1.2%. For other plans, similar indices and methods are used.
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 2011, 2012, and 2013. The estimated long-term rate of return is based on anasset allocation of equity securities of 26.0%, debt securities of 54.0%, life insurance company general accounts of 18.0%, andshort-term financing of 2.0%.

- 31 -

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:
Millions of yen
0.5% decrease
0.5% increase
Discount rate
Effect on periodic benefit costs
Effect on benefit obligation
Expected long-term rate of return on plan assets
Effect on periodic benefit costs
Effect on benefit obligation

¥165
1,928

¥(202)(1,745)

140

(140)
-

-

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
Testing Goodwill for Impairment - In September 2011, the FASB issued new guidance that amends goodwill impairment testing.
Under the revised guidance, entities testing goodwill for impairment have the option of performing a qualitative assessment before
calculating the fair value of the reporting unit. The guidance does not change how goodwill is calculated or assigned to reporting
units, nor does it revise the requirement to test goodwill annually for impairment. This guidance is effective for annual and interim
goodwill impairment test performed for fiscal years beginning after December 15, 2011. Our group has adopted this guidance since
the first interim period, which started on April 1, 2012. Since this guidance does not change how goodwill is calculated, it is notexpected to have an impact on the Company's consolidated financial position, result of operations, or cash flows.
Testing Unamortized Intangible Assets for Impairment - In July 2012, the FASB issued new guidance that amends unamortizedintangible assets impairment testing. Under the revised guidance, entities testing unamortized intangible assets for impairment havethe option of performing a qualitative assessment before calculating the fair value of the assets. The guidance does not change how
unamortized intangible assets is calculated or assigned to reporting units , nor does it revise the requirement to test unamortizedintangible assets annually for impairment. This guidance is effective for annual and interim unamortized intangible assets
impairment test performed for fiscal years beginning after September 15, 2012. Our group has adopted this guidance since the firstinterim period that started on April 1, 2012. Since this guidance does not change how unamortized intangible assets is calculated, it
is not expected to have an impact on the Company's consolidated financial position, result of operations, or cash flows.
Presentation of Comprehensive Income - In February 2013, the FASB issued new guidance requiring additional disclosure for theamounts reclassified out of accumulated other comprehensive income. The guidance required disclosure of change in accumulated
other comprehensive income by component. It also requires an entity to present information about significant items reclassified outof accumulated other comprehensive income by component either on the face of the statement where net income is presented or as aseparate disclosure in the notes to the consolidated financial statements. The guidance is effective for fiscal years and interim
periods within those years, beginning after December 15, 2012. The adoption of this guidance is not expected to 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.

- 32 -

(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 1.8% from 81,891 million yen for fiscal year 2012 to 83,334 million yen for fiscal year 2013. Costof sales as a percentage of net sales decreased 0.6% from 47.6% for fiscal year 2012 to 47.0% for fiscal year 2013. Thisdecrease was mainly due to an increase in the overseas production ratio of the products sold in Japan, streamlining of production
division, close control of inventory, and effective research and development.
(iii) Selling, General, and Administrative Expenses
Our selling, general, and administrative expenses increased 4.1% from 79,629 million yen for fiscal year 2012 to 82,869
million yen for fiscal year 2013. The selling, general, and administrative expenses as a percentage of net sales increased 0.5%
from 46.3% for fiscal year 2012 to 46.8% for fiscal year 2013. This was due to a high increase rate of expenses as compared tothe previous fiscal year during which the aftermath of the earthquake and tsunami forced us to take temporary cost-cutting
measures.
(iv) Goodwill and Other Intangible Assets
At the end of fiscal year 2013, we examined potential impairment losses on the trademarks, customer relationshipa , 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 loss of 2,852 million yen in total. There were no impairment losses for fiscal year 2012.
(v) Operating Margin
Our operating margin decreased 1.4% from 6.0% for fiscal year 2012 to 4.6% for fiscal year 2013. This decrease was mainly
due to the impairment loss recorded in connection with Peach John, despite our success in keeping cost and expense reductions.
(vi) Other Income/Expenses
We recorded 2,445 million yen as other income, an increase of 2,615 million yen, as compared to 170 million yen of otherexpenses recorded for fiscal year 2012. This increase was mainly due to the sale and exchange of marketable and/or investment
securities increase 2,183 million yen from fiscal year 2012.
(vii) Net Income Attributable to Wacoal Holdings Corp.
Net income attributable to Wacoal Holdings Corp. for fiscal year 2013 was 7,623 million yen, an increase of 710 million yen
as compared to fiscal year 2012 as a result of factors including the sale of investment securities and a decrease in tax expenses.
(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, 2013, we had credit facilities at financial institutions totaling 37,746 million yen, and the unused linesof credit for short-term financing amounted to 13,047 million yen. Of this credit, 7,198 million yen is available to Wacoal
Holdings Corp., 3,329 million yen is available to Wacoal Service Co., Ltd., and 1,838 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.”- 33 -

III. 【Property, Plants, and Equipment】
1. 【Summary of Capital Investment, etc. 】
The amount of capital investment for the fiscal year ended March 31, 2013, was 3,246 million yen. 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 2,283 million yen, 471 million yen, 202 million yen, and 290 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, 2013
Number of
Employee(s)Book Value (Millions of yen)
Facility(Location)

Head Office(Minami-ku, Kyoto) and other

OperatingSegment

Type of Equipment
and Facilities

WacoalFacilities for

Business(Domestic)

administrationaffairs, etc.

Buildings

Equipment
and Fixtures

16,501

1,580

Land (m2)

18,488(277,311)

Total

36,57071［－］(2) Domestic Subsidiaries
As of March 31, 2013
Number of
Employee(s)Book Value (Millions of yen)
Name of Company(Location)

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

OperatingSegment

Type of Equipment
and Facilities

Buildings

Machinery,
Vehicle,Equipment,
and Fixtures

Land (m2)

27

176

－

204

6

4

－

11

12

2

－

14

945
［55］

69

5

－

75

269
［ 54］

Total

WacoalBusiness

Facilities foradministration(Domestic)

affairs

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

Business(Domestic)

administrationaffairs

WacoalBusiness

Facilities foradministration(Domestic)

affairs

WacoalBusiness

Facilities foradministration(Domestic)

affairs

WacoalBusiness

Sales facilities

33

9

－

43

－
［ －］

18

120

－

138

374
［ －］

1

84

－

85

589

59

180
(40,840)

828

368

16

One other business office in Kyoto
district

Wacoal Corp. Osaka Office(Yodogawa-ku, Osaka)
Wacoal Corp.
Wing Brand Operation Division,
Tokyo Office(Minato-ku, Tokyo)
Wacoal Art Center Co., Ltd.
(Minato-ku, Tokyo)(Domestic)

Wacoal Distribution Corp.
West Japan Distribution Center

WacoalBusiness

Facilities formerchandise(Moriyama, Shiga)(Domestic)

management

Kyushu Wacoal Manufacturing

WacoalCorp., Nagasaki Plant(Unzen, Nagasaki)

Business(Domestic)

Torica Inc.
(Saihakugun Nanbucho, Tottori)

WacoalBusinessThree other plants(Domestic)

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

Other

Manufacturing
facilities
Manufacturing
facilities
Manufacturing
facilities- 34 -

150(2,790)534

1,280［ 230］

1,474
［ 56］

385
［ 33］
181
［ 33］
21
［

1］

(3) Overseas Subsidiaries
As of March 31, 2013
Number of
Employees

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

OperatingSegment

Type of Equipment
and Facilities

Buildings

Machinery,
Vehicle,Equipment,
and Fixtures

523

70

457

78

27

25

185
(235）

237

377

－

－

377

194

33

－

228

146

183

－

329

539
［ －］

119

219

－

339

2,014
［ 25］

320

232

－

553

Land (m2)

Total

Facilities for
WACOAL AMERICA, INC.
(New York, USA)WACOAL DOMINICANA
CORP.
(Santo Domingo, Dominican
Republic)

WacoalBusiness(Overseas)

WacoalBusiness(Overseas)administrationaffairs andmerchandise
management
Manufacturing
facilities

WACOAL SINGAPORE

WacoalFacilities for

PRIVATE LTD.
(Singapore)

Business(Overseas)administrationaffairs

WACOAL HONG KONG CO.,WacoalFacilities for

LTD.
(Hong Kong)

Business(Overseas)administrationaffairs

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

Guandong Wacoal Inc.
(Guandong, China)

VIETNAM WACOAL CORP.
(Bien Hoa City, Vietnam)

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

1
2
3

WacoalBusiness(Overseas)
WacoalBusiness(Overseas)
WacoalBusiness(Overseas)
WacoalBusiness(Overseas)

224(32,300)

182
［ －］

818

75

1,271

611

(24,459)

［ －］

79
［ －］
149
［ 27］

Facilities for adm
inistration affairs/
manufacturing

835
［ －］

facilities
Manufacturing
facilities
Facilities for adm
inistration affairs/
manufacturing
facilities
Manufacturing
facilities

817
［ －］

The amount of book value above does not include consumption taxes , etc..
None 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 OfficeWacoal Business

Facilities for(Domestic)

administration affairs

Wacoal Business(Domestic)

Facilities foradministration affairs

1,121

1,945
(1,471)

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

Wacoal Business(Domestic)

Facilities foradministration affairs

417

960
(1,833)

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

Wacoal Business(Domestic)

Sales facilities

1,817

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

Wacoal Business

Facilities formerchandise

2,450(Minami-ku, Kyoto)
One other business office in

7,008

591
(8,316)

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

Center(Moriyama, Shiga)
Kyushu Wacoal Manufacturing
Corp., Nagasaki Plan
(Unzen, Nagasaki)(Domestic)

management

Wacoal Business

Manufacturing(Domestic)facilities- 35 -

294

1,419(38,923)52(19,416)

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)
Wacoal Corp.
Wing Brand Operating Division,
Tokyo Office(Minato-ku, Tokyo)

Operating Segment

Type of Equipment
and Facilities

WacoalBusiness

Facilities foradministration(Domestic)

affairs

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

Peach John
Business

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

Other

Facilities foradministration

Annual Lease
Amount(Millions of yen)

Buildings (m2)Land (m2)

1,830

－

34

1,708

－

117

1,747

－

34

Buildings (m2)Land (m2)

7,903

－

146

1,618

－

30

1,043

－

8

－

11,871

3－

11,2242－

25,195

2－

27,5430affairs
Facilities foradministrationaffairs(2) Overseas Subsidiaries
Name of Company(Location)

Operating Segment

Type of Equipment
and Facilities

WacoalFacilities for(New York, USA)

Business(Overseas)administrationaffairs

WACOAL FRANCE

WacoalFacilities for

Société Anonyme(Saint-Denis, France)

Business(Overseas)administrationaffairs

WacoalBusiness

Facilities foradministration(Overseas)affairs

WACOAL AMERICA, INC.

PHILIPPINE WACOAL CORP.
(Manila, Philippines)

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

Guandong Wacoal Inc.
(Guandong, China)

VIETNAM WACOAL CORP.
(Bien Hoa City, Vietnam)

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

WacoalBusiness(Overseas)
WacoalBusiness(Overseas)
WacoalBusiness(Overseas)
WacoalBusiness(Overseas)

Facilities for admi
nistration affairs/m
anufacturing
facilities
Manufacturing
facilities

Annual Lease
Amount(Millions of yen)

Facilities for admi
nistration affairs/m
anufacturing
Facilities
Manufacturing
facilities

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

- 36 -

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, 2013)(June 27, 2013) (shares) Financial Instruments Firms(shares)
Association

Class

Common stock

143,378,085

143,378,085

Total

143,378,085

143,378,085

First section of Tokyo
Stock ExchangeFirst Section of Osaka
Securities Exchange(Note)－

Description

Shareholders
have
unlimited standard rights.
The number of sharesconstituting a unit is
1,000.
－(2) Status of Stock Acquisition Rights
The stock acquisition rights are issued by the Company in accordance with the Corporate Law.
(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 (May
(March 31, 2013)31, 2013)
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 stockacquisition rightCommon stock
1,000 shares per one stockacquisition right

30,000 shares (Note 2)

30,000 shares (Note 2)

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

One (1) yen per share

One (1) yen per share

Exercise period

From September 2, 2008
until September 1, 2028

From September 2, 2008
until September 1, 2028

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

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

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

Subject to the approval of theBoard of Directors

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

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

1
2

The number of shares represented by one (1) stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the gratis 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:- 37 -

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

4

(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), corporate auditor, 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 the exercise period as
stipulated in the table above and (ii) the five-year anniversary of the day after the Date of Loss of Status (the“Exercise Start Date”).
(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, 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) 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 Company Law (the “Surviving Company”) shall be granted to each holder of stock acquisitionrights 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-typedemerger, the date on which the new company is incorporated; for a stock swap, the date on which the stock swap takes
effect; and for share transfer, the date on which the wholly owning parent company is incorporated by share transfer) inaccordance 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 be limited to the casewhere 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 and spin-off agreement, newspin-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.
- 38 -

(3)

(4)

(5)

(6)

(7)
(8)

(9)

Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid after
restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued upon theexercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid after
restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise of eachstock acquisition right to be granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table aboveand (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the exercise ofstock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due to the
Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shall be
increased by half the limit for increases in common stock that are calculated in accordance with Article 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.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation on a date separately
specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer;(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

- 39 -

(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 (May
(March 31, 2013)31, 2013)
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 stockacquisition rightCommon stock
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
until September 1, 2028

From September 2, 2008
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

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

3

The number of shares represented by one (1) stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the gratis allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,
the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights in 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:- 40 -

(i)4if 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) 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:

(2)
(3)

(4)

(5)

(6)

(7)
(8)

The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid after
restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued upon theexercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid after
restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise of eachstock acquisition right to be granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table aboveand (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the exercise ofstock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due to the
Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shall be
increased by half the limit for increases in common stock that are calculated in accordance with Article 40-1 of
the Japanese Company Accounting Regulations. Any amount less than one (1) yen shall be rounded up to thenearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation on a date separately
specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;- 41 -

(9)(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.
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 (May
(March 31, 2013)31, 2013)
Number of stock acquisition rights

29 (Note 1)

29 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

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

Number of shares represented by stock acquisition rights

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

Exercise period

From September 2, 2009 until
September 1, 2029

From September 2, 2009 until
September 1, 2029

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

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

Subject to the approval of theBoard of Directors

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

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

1
2

The number of shares represented by one (1) stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the gratis allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion- 42 -

3

Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,
the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights in 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):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 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, 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.

- 43 -

(7)
(8)

(9)

Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation on a date separately
specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof the shares of said class by a resolution of the general meeting of shareholders.
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 (May
(March 31, 2013)31, 2013)
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 stockacquisition rightCommon stock
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

Exercise period

From September 2, 2009 until
September 1, 2029

From September 2, 2009 until
September 1, 2029

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

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 gratis 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- 44 -

3

4

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

- 45 -

(6)

(7)
(8)

(9)

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.
Limitation on Acquisition of Stock Acquisition Rights by Transfer.
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights.
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation on a date separately
specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer;(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights.
To be determined pursuant to Note 3 above.

(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 (May
(March 31, 2013)31, 2013)
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 stockacquisition rightCommon stock
1,000 shares per one stockacquisition 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

Exercise period

From September 2, 2010 until
September 1, 2030

From September 2, 2010 until
September 1, 2030

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

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

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

Subject to the approval of theBoard of Directors

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

Matters related to contributions of bonds upon exercise of thestock acquisition rights in lieu of cash payment
Matters related to the grant of stock acquisition rights
accompanying reorganization acts
- 46 -

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

3

4announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,
the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights in 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):For 15 days from the day after the date of said approval.
(3) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving Company
shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following terms andconditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving Company shall issue
new stock acquisition rights; provided, however, that this shall be limited to the case where the grant of stock acquisitionrights of the Surviving Company pursuant to the following conditions is stipulated in the absorption-type demerger
agreement, incorporation-type demerger agreement, merger and spin-off agreement, new spin-off plan, stock swap
agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:
The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
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 theOrganizational Restructuring.

- 47 -

(4)

(5)

(6)

(7)
(8)

(9)

Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid after
restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued upon theexercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid after
restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise of eachstock acquisition right to be granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table aboveand (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the exercise ofstock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due to the
Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shall be
increased by half the limit for increases in common stock that are calculated in accordance with Article 17-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation on a date separately
specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

- 48 -

(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 (May
(March 31, 2013)31, 2013)
Number of stock acquisition rights

11 (Note 1)

11 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

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

Number of shares represented by stock acquisition rights

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

Exercise period

From September 2, 2010 until
September 1, 2030

From September 2, 2010 until
September 1, 2030

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

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

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

Subject to the approval of theBoard of Directors

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

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

1
2

3

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 gratis allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,
the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights in 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:- 49 -

(i)4if 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) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving Company
shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following terms andconditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving Company shall issue
new stock acquisition rights; provided, however, that this shall be limited to the case where the grant of stock acquisitionrights of the Surviving Company pursuant to the following conditions is stipulated in the absorption-type demerger
agreement, incorporation-type demerger agreement, merger and spin-off agreement, new spin-off plan, stock swap
agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:

(2)
(3)

(4)

(5)

(6)

(7)
(8)

The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid after
restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued upon theexercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid after
restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise of eachstock acquisition right to be granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table aboveand (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the exercise ofstock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due to the
Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shall be
increased by half the limit for increases in common stock that are calculated in accordance with Article 17-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation on a date separately
specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;- 50 -

(9)(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.
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 (May
(March 31, 2013)31, 2013)
Number of stock acquisition rights

48 (Note 1)

48 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

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

Number of shares represented by stock acquisition rights

48,000 shares (Note 2)

48,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

Exercise period

From September 2, 2011 until
September 1, 2031

From September 2, 2011 until
September 1, 2031

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

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 gratis allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion- 51 -

3

Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,
the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights in 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):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 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.
(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.

- 52 -

(7)
(8)

(9)

Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation on a date separately
specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof the shares of said class by a resolution of the general meeting of shareholders.
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 (May
(March 31, 2013)31, 2013)
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 stockacquisition rightCommon stock
1,000 shares per one stockacquisition 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

Exercise period

From September 2, 2011 until
September 1, 2031

From September 2, 2011 until
September 1, 2031

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

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 gratis 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- 53 -

3

4

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

- 54 -

(6)

(7)
(8)

(9)

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.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation on a date separately
specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof the shares of said class by a resolution of the general meeting of shareholders.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

- 55 -

(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 (May
(March 31, 2013)31, 2013)
Number of stock acquisition rights

53 (Note 1)

53 (Note 1)

Number of stock acquisition rights held by the Company－－

Class of shares represented by stock acquisition rights

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

Number of shares represented by stock acquisition rights

53,000 shares (Note 2)

53,000 shares (Note 2)

Amount to be paid upon exercise of stock acquisition rights

One yen per share

One yen per share

Exercise period

From September 4, 2012 until
September 3, 2032

From September 4, 2012 until
September 3, 2032

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

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

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

Subject to the approval of theBoard of Directors

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

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

1
2

3

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 gratis allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion
Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,
the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights in 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:- 56 -

(i)4if 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) If an Option holder waives his or her stock acquisition rights, such Option holder may not exercise the said stockacquisition rights.
In the event that the Company conducts an Organizational Restructuring, stock acquisition rights of the Surviving Company
shall be granted to each holder of the Residual Stock Acquisition Rights in accordance with the following terms andconditions. In such case, the remaining stock acquisition rights shall be canceled, and the Surviving Company shall issue
new stock acquisition rights; provided, however, that this shall be limited to the case where the grant of stock acquisitionrights of the Surviving Company pursuant to the following conditions is stipulated in the absorption-type demerger
agreement, incorporation-type demerger agreement, merger and spin-off agreement, new spin-off plan, stock swap
agreement, or share transfer plan:(1) Number of Stock Acquisition Rights of the Surviving Company to be Granted:

(2)
(3)

(4)

(5)

(6)

(7)
(8)

The number of stock acquisition rights to be granted shall be equal to the number of Residual Stock Acquisition
Rights.
Class of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
Common stock of the Surviving Company.
Number of Shares of the Surviving Company to be Issued upon Exercise of the Stock Acquisition Rights:
To be determined pursuant to Note 2 above after taking into consideration the terms and conditions of theOrganizational Restructuring.
Amount Capitalized upon Exercise of Stock Acquisition Rights:
The amount capitalized upon the exercise of each stock acquisition right to be granted shall be the amount paid after
restructuring as prescribed below multiplied by the number of shares of the Surviving Company to be issued upon theexercise of the stock acquisition rights as determined in accordance with (3) above. The amount paid after
restructuring shall be one yen per share of the Surviving Company, which may be granted upon exercise of eachstock acquisition right to be granted.
Exercise Period for Stock Acquisition Rights:
From the later of (i) the starting date of the exercise period for stock acquisition rights as stipulated in the table aboveand (ii) the effective date of Organizational Restructuring, and lasting until the expiration date for the exercise ofstock acquisition rights as stipulated in the table above.
Matters concerning Increases in Capital Stock and Additional Paid-in Capital in case of Issuance of Shares due to the
Exercise of Stock Acquisition Rights:(i) In the event that shares are issued due to the exercise of stock acquisition rights, shareholders’ equity shall be
increased by half the limit for increases in common stock that are calculated in accordance with Article 17-1 of
the Japanese Company Accounting Regulations. Any amount less than one yen shall be rounded up to thenearest yen.
(ii) In the event that shares are issued due to the exercise of stock acquisition rights, additional paid-in capital shallbe increased by the amount remaining after deducting the increase in the limit for increase in common stock
stipulated in (i) above.
Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation on a date separately
specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;- 57 -

(9)(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.
Other Conditions relating to the Exercise of Stock Acquisition Rights:
To be determined pursuant to Note 3 above.

(x) Tenth Stock Acquisition Rights (resolved at the Board of Directors’ meeting held on July 31, 2012)
As of the end of Month
As of the end of Fiscal Year
Preceding the Filing Date (May
(March 31, 2013)31, 2013)
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 stockacquisition rightCommon stock
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

Exercise period

From September 4, 2012 until
September 3, 2032

From September 4, 2012 until
September 3, 2032

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

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

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

Subject to the approval of theBoard of Directors

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

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

1
2

The number of shares represented by one stock acquisition right is 1,000 shares.
In the event that the Company conducts a stock split (including the gratis allocation of shares of common stock of theCompany; hereinafter the same) or a reverse split of its common stock, the Conversion Ratio will be adjusted in accordancewith the following formula:
Adjusted Conversion
Conversion Ratio prior to
Ratio of stock split
=
X
Ratio
adjustment
or reverse stock split
This adjustment will apply from the day following the record date in the case of a stock split and from the day on which thereverse stock split becomes effective in the case of a reverse stock split. However, in the event that the Company conducts
a stock split that is conditioned on approval at a general meeting of shareholders of the Company of an increase instockholders’ equity or additional paid-in capital by decreasing the amount of surplus, and provided that the record date forsuch stock split is set prior to the conclusion of such general meeting of shareholders, from the day following the conclusionof such general meeting of shareholders, the adjustment will apply retroactively from the day following the record date.
In addition to the above, the Conversion Ratio shall be reasonably adjusted as may be required in unavoidable
circumstances.
Any fractional shares that result from the above adjustment will be rounded down to the nearest whole share.
Furthermore, in case of any adjustment of the Conversion Ratio, the Company shall make any necessary notification or
announcement to Option holders no later than the day immediately preceding the day on which the adjusted Conversion- 58 -

3

Ratio becomes effective. However, if the Company is unable to provide such notification or announcement by such date,
the Company shall provide prompt notification or announcement thereafter.
(1) Option holders may exercise their stock acquisition rights in 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 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.
(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.

- 59 -

(7)
(8)

(9)

Limitation on Acquisition of Stock Acquisition Rights by Transfer:
The acquisition of stock acquisition rights by transfer shall be subject to approval by resolution of the board.
Provisions for the Acquisition of Stock Acquisition Rights:
In the event that a general meeting of shareholders of the Company approves any of the following (or, whenshareholder approval is not necessary, in the event that the board or the representative executive officer approves ofany of the following), the Company may acquire stock acquisition rights without compensation on a date separately
specified by the board:(i) a proposed merger agreement under which the Company is to be dissolved;(ii) a proposed corporate division agreement or plan under which the Company would be split;(iii) a proposed share transfer agreement or plan that makes the Company a wholly owned subsidiary;(iv) a proposed amendment of the Articles of Incorporation to add a provision that prescribes that the Company, withrespect to all of its issued shares, shall be required to obtain the approval of the shareholders of the Company forthe acquisition of such shares by transfer; or(v) a proposed approval for an amendment of the Articles of Incorporation to add a provision that prescribes that theCompany shall be required to obtain the approval of the shareholders of the Company for the acquisition of theshares to be issued upon the exercise of stock acquisition rights by transfer or that the Company shall obtain allof the shares of said class by a resolution of the general meeting of shareholders.
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
Stock
Date
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.

- 60 -

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
Category

As of March 31, 2013
Shares under
One Unit(share)Status of Shares (1 unit = 1,000 shares)
National and
Local
Governments

Number ofshareholders

Financial
Institutions

Securities
Companies

Other
Corporations

Individuals and
Other

Foreign Shareholders
Foreignshareholders
other than
individuals

Individuals

Total

－

65

35

215

170

2

11,591

12,078shares held
(units)－61,922

2,261

30,42018,045

3

29,768142,419

Ratio (%)

－

43.48

1.59

21.36

12.67

0.00

20.90

100

Number of(Note)

959,085

Out of the treasury stock of 2,533,728 shares, 2,533 units are included under “Individuals and other,” and 728 shares of less than
one share unit are included under “Shares under one unit.”(7) Status of Major Shareholders
As of March 31, 2013
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

6,796

4.73

Nippon Life Insurance Company

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

5,245

3.65

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

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

5,202

3.62

Japan Trustee Services Bank, Ltd. (Trust
Account)

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

4,998

3.48

The Bank of Kyoto, Ltd.

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

4,705

3.28

The Bank of New York Mellon
Corporation as depositary bank fordepositary receipt holders(Standing Proxy) The Bank of TokyoMitsubishi UFJ, Ltd.

C/O THE BANK OF NEW YORKMELLON
101 BARCLAY STREET, 22ND FLOOR,NEW YORK, NY 10286 USA(2-7-1, Marunouchi, Chiyoda-ku, Tokyo)

4,387

3.06

Japan Trustee Services Bank, Ltd. (Trust
Account 9)1-8-11, Harumi, Chuo-ku, Tokyo

3,958

2.76

The Shiga Bank, Ltd.

1-38, Hamamachi, Otsu-shi, Shiga

3,646

2.54

Mika Okada

Miuragun, Hayamamachi, Kanagawa

3,382

2.35

49,311

34.39

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 2013. The content of such substantial shareholding report (the amended report) is as follows:- 61 -Name of Shareholder

Address

Number of Shares
held by Shareholder Shareholding Ratio(%)(Thousands ofshares)The Bank of Tokyo-Mitsubishi UFJ,Ltd.

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

6,990

4.87

Mitsubishi UFJ Trust 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

Mitsubishi UFJ Morgan Stanley
Securities Co., Ltd.

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

842

0.58

14,365

10.01

Total
2

The Company has received a copy of the substantial shareholding report, dated October 4, 2012, filed by Tradewinds
Global Investors, LLC (“Tradewinds”), which indicates that Tradewinds is holding the following number of the Company’s
shares as of September 28, 2012. Because we were unable to confirm the actual shareholdings’ status as of the end of fiscal
year 2013, the status of major shareholders is based on the shareholders’ register of the Company. The content of such
substantial shareholding report (the amended report) is as follows. In addition, out of the 6,745 thousand shares held byTradewinds, 4,883 thousand shares (3.40% of shareholding ratio) were held through American Depositary Receipts(“ADRs”), and the nominal holder of such ADRs registered in our shareholders’ register is The Bank of New York Mellon
as Depositary Bank for Depositary Receipt Holders, which is the depositary bank for the ADRs of the Company.

Name of Shareholder

Address

Tradewinds Global Investors, LLC

2049 CENTURY PARK EAST 20TH FLOOR,LOS ANGELES, CA 90067, USA- 62 -

Number of Shares
held by Shareholder Shareholding Ratio(%)(Thousands ofshares)
6,745

4.70

(8) Status of Voting Rights(i) Shares Issued
As of March 31, 2013
Number of Shares(Shares)Number of Voting Rights(Units)Description

Shares without voting rights

－

－

－

Shares with restricted voting rights –treasury stock, etc.

－

－

－

Shares with restricted voting rights –
other

－

－

－

－

Shareholders haveunlimited standard
rights. The number ofshares constituting a unit
is 1,000.

Category

Shares with full voting rights –treasury stock, etc.

(Treasury stock)
Common stock
2,533,000

Shares with full voting rights – otherCommon stock
139,886,000

139,886

Common stock

Shares less than one unit

959,085

Total number of shares issued

143,378,085

Total voting rights held by all
shareholders－

Same as above.

－

Same as above.

－－
139,886－(ii) Treasury Stock, etc.
As of March 31, 2013
Number of
Shares held under
Own Name

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

Name of
Shareholder

Address(Treasury stock)
Wacoal Holdings
Corp.

29 Nakajima-cho,
Kisshoin, Minamiku, Kyoto

2,533,000－

2,533,000

1.76

Total

－

2,533,000－

2,533,000

1.76- 63 -

Shareholding Ratio(%)

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

July 30, 2008

Category and number of eligible recipients

Five directors of the Company

Class of shares represented by stock acquisition rights

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

Number of shares

40,000

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

Exercise period

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

Terms and conditions for exercising the stockacquisition rights

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

Matters related to transfer of the stock acquisition rights

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

Matters related to contributions of bonds upon 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 the
Corporate Law.
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.

- 64 -

(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 the
Corporate Law.
Date of resolution

July 30, 2009

Category and number of eligible recipients

Four directors of the Company

Class of shares represented by stock acquisition rights

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

Number of shares

35,000

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

Exercise period

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

Terms and conditions for exercising the stockacquisition rights

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

Matters related to transfer of the stock acquisition rights

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

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

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

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

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

- 65 -

(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 the
Corporate Law.
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 acquisitionrightsPlease see (2) Status of Stock Acquisition Rights above.

Exercise period

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

Terms and conditions for exercising the stockacquisition rights

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

Matters related to transfer of the stock acquisition rights

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

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

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

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

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

- 66 -

(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 the
Corporate Law.
Date of resolution

July 29, 2011

Category and number of eligible recipients

Five directors of the Company

Class of shares represented by stock acquisition rights

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

Number of shares

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

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

Exercise period

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

Terms and conditions for exercising the stockacquisition rights

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

Matters related to transfer of the stock acquisition rights

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

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

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

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

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

- 67 -

(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 the
Corporate Law.
Date of resolution

July 31, 2012

Category and number of eligible recipients

Five directors of the Company

Class of shares represented by stock acquisition rights

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

Number of shares

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

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

Exercise period

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

Terms and conditions for exercising the stockacquisition rights

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

Matters related to transfer of the stock acquisition rights

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

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

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

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

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

- 68 -

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 the
Corporate Law.
(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 Corporate Law
Number of Shares
Category
Total Amount (Yen)(Shares)
Treasury stock acquired during the current fiscal year
Treasury stock acquired during the current period(Note)

10,4789,651,015

306

326,654

Treasury stock acquired during the current period does not include shares constituting less than one full unit purchased during
the period from June 1, 2013, 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

－

－

－

－

3,765

4,118,240－－

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

1
2

2,533,728－

2,534,034－

Number of shares of treasury stock held during the current period does not include shares constituting less than one full unit
purchased or sold during the period from June 1, 2013, to the filing date of this report.
The breakdown for the number of shares of treasury stock held during the current fiscal year is as follows: 3,000 shares by
the exercise of stock acquisition rights (total disposition amount: 3,423,000 yen) and 765 shares by purchase demand forshares less than one full unit (total disposition amount: 695,240 yen).

- 69 -

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 Corporate Law.
Based on such policy, we plan to distribute 28.00 yen per share as distribution of earnings for the current fiscal year.
As for retained earnings, with the aim of improving our corporate value, we have actively invested in expanding new points ofcontact with consumers for our domestic business and investing in our overseas businesses. We also plan to use our retained earnings
in our strategic investments for maintaining competitiveness and reinforcing growth. With these efforts, we seek to benefit ourshareholders by improving future profitability. We also intend to flexibly acquire treasury stock, and we will try to improve capitalefficiency and return profits to our shareholders.
(Note) The distribution of earnings for which record date belongs to the current fiscal year is as follows:
Total Dividend Amount
Dividend Amount per Share
Date of Resolution(Millions of yen)
(Yen)
May 14, 2013
Resolution of Board of Directors’ meeting

3,943

28.00

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

61st

62nd

63rd

64th

65th

Year EndMarch 2009

March 2010

March 2011

March 2012

March 2013

Highest (yen)

1,573

1,340

1,240

1,066

1,056

Lowest (yen)

844

928

890

903

842

(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 2012

November 2012

December 2012

January 2013

February 2013

March 2013

Highest (yen)

938

908

905

958

983

1,056

Lowest (yen)

885

851

881

905

924

964

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

- 70 -

5. 【Directors and Corporate Auditors】
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
Apr. 1965
Jun. 1992
Jul. 1993
Jun. 2001

Director andExective 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 (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. (acting)
Joined Isetan Co., Ltd.
Director of Isetan Co., Ltd. and Manager of Matsudo
BranchRepresentative Director and President of West Japan
Railway Isetan Ltd.
Corporate Officer and Managing Director, and 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 Executive Vice President in charge ofManagement Reform (acting)
Representative Director and Chairman of Peach John
Co., Ltd.
Director and Vice Chairman of Wacoal Corp. (acting)
Representative Director and Chairman, and President of
Peach John Co., Ltd.
Joined Wacoal Corp.
Deputy General Manager of Guandong Wacoal Inc.
General Manager of Beijing Wacoal Inc.
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/Chairman and representative Director 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)- 71 -

Number of
Office Shares Owned
Term (Thousands ofshares)

Note 1

1,354

Note 1

13Note 1

7

Mar. 1976
Jun. 2004
Jun. 2006
Apr. 2008
Senior Managing
Director

Ikuo Otani

Nov. 20, 1953

Apr. 2010
Jun. 2010
Jun. 2011
Jun. 2012

Apr. 2013
Apr. 1977
Apr. 2001

Jun. 2012

Joined Wacoal Corp.
Director and Vice Chairman of WACOAL AMERINC,
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 Corporate Officer/General Manager
of International Operations of Wacoal Corp. (acting)Director in charge of International Operations (acting)Jun. 1991
Jun. 1992
May 1994
Oct. 1999
Feb. 2003
Jul. 2003
Jun. 2005

Commissioner of National Tax Agency
Administrative Vice Minister of FinancePresident of People’s Finance Corporation
President of National Life Finance Corporation
Adviser of Yazaki Sogyo Corporation (acting)
Adviser
Director (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. 2006
Apr. 2008
Director

Yuzo Ide

Sep. 24, 1954
Apr. 2010

Apr. 2012

Director

Director

Mamoru Ozaki

Atsushi Horiba

May 20, 1935

Feb. 5, 1948

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

Standing
Corporate
Auditor

MitsuoYamamoto

Jan. 8, 1955

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

Standing
Corporate
AuditorTomokiNakamuraJan. 22, 1958

Joined Wacoal Corp.
Corporate Officer and General Manager of Business
Management
Director and Corporate Officer, and Supervisor of
Business Management, of Wacoal Corp.
Director and Corporate Officer, and General Manager
of Corporate Planning Division, of Wacoal Corp.
Director and Corporate Officer, and Supervisor of
Accounting, of Wacoal Corp.
General manager of corporate planning Department
Managing Director in charge of Group Management
and General Manager of Corporate Planning
Senior Managing Director in charge of GroupManagement and General Manager of Corporate
Planning
Senior Managing Director in charge of GroupManagement (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
Corporate Auditor (acting)
Joined Wacoal Corp.
Accounting Manager of Wacoal Corp.
Accounting Manager
Corporate Auditor/Secretariat of Board of Corporate
Auditors
Corporate Auditor (acting)- 72 -

Note 19Note 1

4Note 1－

Note 1

3Note 46Note 575

Apr. 1968
Jun. 1995
Apr. 1996
Feb. 2000
May 2001
Corporate
Auditor

Akira
Katayanagi

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

Corporate
AuditorTomoharu Kuda

Dec. 7, 1946

Corporate
AuditorYoko 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
Associate Senior Corporate Executive Officer Manager
of Osaka Branch Office
Associate Senior Corporate Executive Officer
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.
Corporate Auditor (acting)Director of Mitsubishi UFJ NICOS Co., Ltd.
Special Adviser of Mitsubishi UFJ NICOS Co., Ltd.
(acting)

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

Joined Deloitte Haskings & Sells
Registered as Certified Public Accountant
Transferred to London OfficePartner of Deloitte Touche Tohmatsu
Representative Partner of Deloitte Touche Tohmatsu
Corporate Auditor (acting)Apr. 1990

Registered as Lawyer (Tokyo), joins Miyake Imai Ikeda
Law Firm
Partner at Miyake Imai Ikeda Law Firm (acting)Corporate Auditor (acting)Jan. 1997
Jun. 2005

Note 32

Note 4－Note 613

1,486(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, 2013.
Directors Messrs. Mamoru Ozaki and Atsushi Horiba are outside directors.
The term of office of a corporate auditor is four years from the conclusion of the Ordinary General Meeting of Shareholders
held on June 29, 2010.
The term of office of a corporate auditor is four years from the conclusion of the Ordinary General Meeting of Shareholders
held on June 29, 2011.
The term of office of a corporate auditor is four years from the conclusion of the Ordinary General Meeting of Shareholders
held on June 28, 2012.
The term of office of a corporate auditor is four years from the conclusion of the Ordinary General Meeting of Shareholders
to be held on June 27, 2013.
Corporate auditors Mr. Akira Katayanagi, Mr. Tomoharu Kuda, and Ms. Yoko Takemura are outside corporate auditors.

- 73 -

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 a “corporate auditor system” for the purpose of ensuring the corporate governance ofgroup companies, and have both the Board of Directors and the Board of Corporate Auditors monitor and supervise themanagement 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 Board of Corporate Auditors is composed of fivecorporate auditors (including three outside corporate auditors). Their function is to monitor and supervise our management.
We have designated the above-stated two outside directors and three outside corporate auditors (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 corporate auditors, which considers mattersconcerning 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 and operates
with a high degree of transparency and fairness.
The following diagram illustrates the outline of our corporate governance system:- 74 -

As of June 27, 2013
<General Meeting of Shareholders><Board of Corporate
Auditors>
Corporate auditors: 2
Outside corporate
auditors: 3<Board of Directors>
Directors: 5
Outside directors: 2
Corporate auditors: 5<Group Management
Meeting>
Directors: 5
Corporate auditors: 2

Office for Board of
Corporate Auditors

President<Group Strategy
Committee>
Directors: 5
Corporate auditors: 2
Representatives of major
business companies andbusiness departments<Quarterly Business Results
Review Committee>
Directors: 7
Corporate auditors: 5
Representatives of eachbusiness company and eachbusiness department

Business Companies

Business Companies

Business Companies

Business Companies

Disclosure Committee

Risk Management
Committee

Corporate Ethics Committee

Corporate ethics hotline

Compliance Division- 75 -

Audit Office

Accounting Auditors

Executive Compensation
Advisory Committee

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 whoare 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 a “corporate auditor system,” which consists offive corporate auditors including outside corporate auditors. For the foregoing reason, we have adopted our current governancesystem.

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 “Code of Ethics for
Corporate Officers and Employees” 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 thechairperson, 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 our Code of
Ethics for Corporate Officers and Employees or our Corporate Ethics: Wacoal’s Code of Conduct, or of any othercompliance issues. We have also established an internal alert system (a corporate ethics hotline). After being notified
and/or alerted, the legal/compliance department conducts an investigation and formulates preventive measures after
discussions with the related department. If the issue is critical, the legal/compliance department will refer the matter tothe Corporate Ethics Committee and will report the results of its deliberation to the Board of Directors and/or Board of
Corporate Auditors.
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 Corporate Auditors shallhave 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.
- 76 -

-

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 andwill 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, aswell as matters to be reported to the Company.
We conduct any inter-company transaction fairly in compliance with laws and regulations, accounting principles, and thetax system.
Our audit office will conduct internal audits, including an audit of the establishment and/or operation of our compliancesystem and risk management system, within the group companies. 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 Corporate Auditors and Matters Concerning Independence of such Assistants from Directors)
To assist the corporate auditors, we have established an office for our Board of Corporate Auditors and appointed
assistants to assist them.
The corporate auditors will be consulted regarding the appointment, evaluation, relocation, and discipline of suchassistants, and their opinions will be respected.
(Reporting System of Directors and Employees to the Corporate Auditors, Reporting System to other Corporate Auditors, andother Systems to Ensure Effective Audit by Corporate Auditors)
Through the reporting of the following matters in addition to statutory matters to the corporate auditors by directors andemployees, we strive to have the corporate auditors’ audits conducted effectively:
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; andother significant matters.
The majority of the corporate auditors will be independent outside corporate auditors to enhance the transparency andneutrality of management.
The corporate auditors may order employees who belong to the audit office to perform any matters that are required toprovide audit services.
The Board of Corporate Auditors 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 Corporate Law 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:- 77 -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:
Seven certified public accountants and other 17 persons
E.

Matters Concerning Limitation of Liability Agreements with Outside Directors and Outside Corporate Auditors
In order to have excellent persons as outside directors and outside corporate auditors, our Articles of Incorporationprescribe that we may execute a limitation of liability agreement with outside directors and outside corporate auditors to limit
their liability for damages in certain instances, and outside directors and outside corporate auditors have executed suchagreement 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 corporate auditor shall be the minimum liability amount as provided by Paragraph 1, Article 427 of the
Corporate Law.
- The foregoing limitation of liability shall be accepted only if the outside director or the outside corporate auditor isin 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 Corporate
Law (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 Corporate Law
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 Corporate Auditors and Internal Audit Department
Our corporate auditors and internal audit department (audit office) have a regular meeting for reporting andconfirmation once a month. The main purpose of such meeting is to report the discussions at major meetings at which our
corporate auditors attended, activities conducted by our audit office, and other matters. We have implemented an audit systemallowing the sharing of documents and information necessary for audit so that audit working papers are mutually exchanged andconfirmed by our corporate auditors and audit office, and the audit can be performed more efficiently and effectively throughalliance between our corporate auditors and audit office.
The number of staff of our internal audit department (audit office) as of June 27, 2013, was 14.
Further, our corporate auditors 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 Corporate Auditor Mr. Tomoki Nakamura has many years of accounting experience at our Accounting
Department with a respectable degree of finance and accounting knowledge. Also, Corporate Auditor Mr. Tomoharu Kuda isqualified as a certified public accountant with a considerable degree of finance and accounting knowledge as well.

(iii)

Outside Directors and Outside Corporate Auditors
We have two outside directors and three outside corporate auditors.
We have elected those persons having experiences in corporate management who excel in financial administration
and/or overseas business development to our outside corporate 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- 78 -

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 corporate auditors. Each outside corporate
auditor conducts a strict audit on the legality of directors’ decision making and performance of their businesses from a technicalperspective by maintaining high levels of independence.
Although we have not yet established standards or policies on the independence of our outside directors and outside
corporate auditor, we have elected our outside directors and outside corporate auditors after confirming that the independence isensured, by reference to the requirements for the independent officers prescribed in the rules, etc., of the Tokyo Stock Exchange
and the Osaka Securities Exchange. Thus, we have notified our two outside directors and three outside corporate auditors to theforegoing two exchanges.
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
corporate auditors, we have appointed full-time assistants to assist them and adopted such system so as to enable us to support
them, including the outside corporate auditors. The prior explanations on the proposals presented to the Board of Directors’
meetings are made by our corporate auditors and their assistants.
Each one of our outside directors and two of our outside corporate auditors hold 3,000 and 15,000 shares of common
stock of the Company, respectively. Other than the foregoing, there are no special interests between our outside directors or
outside corporate auditors and the Company.
The reasons for the election of our outside directors and outside corporate auditors are as follows:

Title

Name

Outside Director

Mamoru Ozaki

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.

Reasons for Election

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
corporate director of the Company that is aiming to further strengthen
the overseas 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 Corporate Auditor

Akira Katayanagi

We believe that he is qualified to be our outside corporate auditor, as
he is experienced in the finance industry and has extensive experienceand 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.

- 79 -

Outside Corporate Auditor

Tomoharu Kuda

We believe that he is qualified to be our outside corporate auditor, as
he is able to serve as a supervisor and adviser of our management withhis expertise in accounting and finance cultivated as a certified public
accountant. Further, he had served as a representative partner ofTohmatsu, our accounting auditor, until June 30, 2007, and left
Tohmatsu on June 30, 2007. We determined that he meets therequirements for being an independent officer and designated him 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 and neutrality inrelation to our general shareholders who are involved in ourmanagement, and that he has fulfilled his duties as a supervisor andadviser for our management since assuming his position as our
corporate auditor with his accounting and financial professional
knowledge cultivated as a certified public accountant. For thesereasons, we have designated him as an independent officer.

Outside Corporate Auditor

Yoko Takemura

We believe that she is qualified to be our outside corporate auditor, as
she has legal knowledge and great store of experience 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:
Number of
Aggregate
Aggregate Amount of Remunerations, etc., by Type Thereof
Relevant
Amount of(Millions of yen)
Officers
Category of Officers
Remunerations,etc. (Millions of
Basic
Retirement
Stock Option
Bonus
yen)
Remuneration
Allowance
Directors(Excluding outside directors)
Corporate auditors(Excluding outside corporate
auditors)
Outside officers(Note)

300

194

42

63

－

6

30

30

－

－

－

3

48

48

－

－

－

6

As of March 31, 2013, the numbers of directors, corporate auditors, and outside officers were five, two, and six,
respectively. Such number as to each of the directors and the corporate auditors was inconsistent with the abovedescribed number because the above-described number includes one director and one corporate auditor who retired at theconclusion of the 64th Ordinary General Meeting of Shareholders held on June 28, 2012.

- 80 -

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:
Aggregate
Amount ofAmount of Consolidated Remunerations, etc., by Type
Consolidated
Thereof(Millionsofyen)
Remunerations
Category of
Relevant
Name, etc. (Millions
Officers
Companyof yen)Basic
Stock Option
Remuneration

Yoshikata
TsukamotoC.

Retirement
Allowance

Director

WacoalHoldings
Corp.

108

20

31

－

Director

Wacoal Corp.

24

－

－

－

183

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 is fixed,and “Bonus,” which is linked to the business results of each fiscal year, as well as “Stock Option,” which is linked to mediumand long-term business results. In the case of outside directors and corporate auditors who shall be in the position independent
from the management, only “Basic Remuneration” is paid because any remuneration linked to business results are notappropriate 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 corporate auditors 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 June29, 2005. The amount of bonuses was determined to be such amount as is determined according to the business results of eachfiscal year, which was resolved at each Ordinary General Meeting of Shareholders held for the relevant year. Further, themaximum annual amount of stock options was determined to be 70 million yen by the resolution adopted at the 60th Ordinary
General Meeting of Shareholders held on June 27, 2008.
The retirement allowance system for officers was abolished by the resolution adopted at the 57th Ordinary General
Meeting of Shareholders held on June 29, 2005.

(v)

A.

B.

Bonus

Information on Shareholdings
The status of the shareholding by the Company is as follows:
Equity securities held for purposes other than pure investment (including unlisted shares):
Number of stock names:
Three stock names
Total amount recorded in the balance sheet:
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 2012
Specified investment stocks:
Amount Recorded in
Number of Shares
Stock Name
Purpose of Holding
the Balance Sheet(shares)(Millions of yen)

The Dai-ichi Life Insurance Company,
Limited21- 81 -

2

Maintaining and enhancing business
transactions

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

Purpose of Holding
Maintaining and enhancing business
transactions(Note)

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 2012 and the fiscal year 2013, as well as the amount ofdividends received, the gain/loss on sale, and the valuation gain/loss for fiscal year 2013 of equity securities held for pureinvestment are as follows:
N/A.
Stock names, number of shares, and the amount recorded in the balance sheet of equity securities, the purpose of holding of
which has been changed from pure investment to any other purpose other than pure investment:
N/A.
Stock names, number of shares, and the amount recorded in the balance sheet of equity securities, the purpose of holding of
which has been changed from any other purpose other than pure investment to pure investment:
N/A.

D.

E.

- 82 -

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

Equity securities held for purposes other than pure investment (including unlisted shares):
Number of stock names:
116 stock names
Total amount recorded in the balance sheet:
41,065 million yen
B. Segments, stock names, number of shares, amount recorded in the balance sheet, and purpose of holding of those listed
equity securities held for purposes other than pure investment of which the amount recorded in the balance sheet is more than
one-hundredth of the stated capital of the Company are as follows:
Fiscal Year 2012
Specified investment stocks:
Amount Recorded in
Number of Shares
the Balance Sheet
Purpose of Holding
Stock Name
(Shares)(Millions of yen)
Maintaining and enhancing businessKDDI Corporation
11,735
6,290
transactions
Maintaining and enhancing businessBank of Kyoto, Ltd.
2,849,985
2,140transactions
Maintaining and establishing cooperative
Nissin Foods Holdings Co., Ltd.
575,100
1,780 and business relationship in businessdeployment
Maintaining and enhancing business
Isetan Mitsukoshi Holdings Ltd.
1,315,769
1,279transactions
Maintaining and enhancing business
Mitsubishi UFJ Financial Group, Inc.
2,885,850
1,189transactions
Maintaining and enhancing business
Shiga Bank, Ltd.
2,312,040
1,144
transactions
Maintaining and enhancing business
Kyocera Corporation
142,950
1,084transactions
Maintaining and enhancing business
Nagatanien Co., Ltd.
1,115,000
1,018
transactions
Maintaining and establishing cooperative
Taisho Pharmaceutical Holdings Cp.,
132,000
886 and business relationship in businessLtd.
deployment
Maintaining and establishing cooperative
Dainippon Screen Mfg. Co., Ltd.
1,085,898
809 and business relationship in businessdeployment
Maintaining and establishing cooperative
Horiba, Ltd.
230,000
652 and business relationship in businessdeployment
Maintaining and enhancing business
Tokio Marine Holdings, Inc.
274,000
622
transactions
Maintaining and enhancing businessHeiwado Co., Ltd.
514,531574
transactions
Maintaining and establishing cooperative
Takara Holdings Inc.
1,000,000
563 and business relationship in businessdeployment
Maintaining and enhancing business
Chori Co., Ltd.
5,488,904
560
transactions
Maintaining and enhancing business
Toppan Printing Co., Ltd.
852,000550transactions
Maintaining and enhancing business
Shiseido Co., Ltd.
383,000
547
transactions
Maintaining and enhancing business
Aeon Co., Ltd.
485,916529
transactions
Maintaining and enhancing business
J. Front Retailing Co., Ltd.
1,082,776
500
transactions- 83 -

Mitsubishi UFJ Lease & Finance 132,000
Company Limited
Fukuyama Transporting Co., Ltd.

480
1,022,000

460

Kokuyo Co., Ltd.

699,700

432

Tokyo Broadcasting System Holdings,
Inc.

310,700

383

Seven & i Holdings Co., Ltd.

154,939381

Hisamitsu Pharmaceutical Co., Inc.

90,000353

I.C.C INTERNATIONAL PCL

2,677,300

318

Odakyu Electric Railway Co., Ltd.

395,000

309

Asahi Kasei Corporation

598,195306

4,940,000

303

Nichikon Corporation

296,500

296

Onward Holdings Co., Ltd.

435,000

294

2,092

287

Yomeishu Seizo Co., Ltd.

341,000

271

Autobacs Seven Co., Ltd.

62,800251

Aoyama Trading Co., Ltd.

141,500

248

Chuo Warehouse Co., Ltd.

381,300

239

Sanyo Shokai Ltd.

1,000,000

224

Kintetsu Department Store Co., Ltd.

1,000,000

194

Seino Holdings Co., Ltd.

283,000

169

Nissha Printing Co., Ltd.

147,000

159

Matsuya Co., Ltd.

205,000

152

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

4,240

2,273

3,365,000

1,386

Saha Pathana Inter-Holding PCL

NTT DoCoMo, Inc.

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 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 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 enhancing business
transactions

Stocks deemed to be held:
Stock NameKDDI Corporation

Mitsubishi UFJ Financial Group, Inc.

- 84 -

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

(Note)In specifying the major stock names in light of the amount recorded in the balance sheet, specified investment stocks andstocks deemed to be held have not been combined.
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

825,000554

1,022,000

548

Shiseido Co., Ltd.

383,000

508

Seven & i Holdings Co., Ltd.

154,939483

1,085,898

471

Stock Name

Aeon Co., Ltd.

Taisho Pharmaceutical Holdings Cp.,Ltd.

Fukuyama Transporting Co., Ltd.

Dainippon Screen Mfg. Co., 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
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and enhancing business
transactions
Maintaining and establishing cooperative andbusiness relationship in business deployment

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 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 Name

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

848,000

3,282

3,365,000

1,878KDDI Corporation

Mitsubishi UFJ Financial Group, Inc.

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

C.

Total amount recorded in the balance sheet for the fiscal year 2012 and the fiscal year 2013, as well as the amount ofdividends received, the gain/loss on sale, and the valuation gain/loss for fiscal year 2013 of equity securities held for pureinvestment are as follows:
N/A.
Stock names, number of shares, and the amount recorded in the balance sheet of equity securities, the purpose of holding of
which has been changed from pure investment to any other purpose other than pure investment:
N/A.
Stock names, number of shares, and the amount recorded in the balance sheet of equity securities, the purpose of holding of
which has been changed from any other purpose other than pure investment to pure investment:
N/A.

D.

E.

(2)

【Audit Fees】(i)【Fees to Certified Public Accountants】
Fiscal Year Ended March 31, 2012
Category
Fees for Audit Services(Millions of yen)

Fiscal Year Ended March 31, 2013

Fees for Nonaudit
Services(Millions of yen)

Fees for Audit Services(Millions of yen)

Fees for Nonaudit
Services(Millions of yen)

The Company

137

13

140

13

Consolidated
subsidiaries

13

－

14

－

Total

150

13

154

13

(ii)【Other fees】(Fiscal year ended March 31, 2012)
Wacoal International Corp., one of the Company’s consolidated subsidiaries, and its consolidated subsidiaries paid 44
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, 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.
(iii)【Description of nonaudit services provided to the Company】(Fiscal year ended March 31, 2012)
Nonaudit services provided to the Company by the certified public accountants, etc., for which the Company paid fees
were support services for the changes of the fiscal year 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, 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.

- 87 -

(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.

- 88 -

V. 【Financial Information】
1. 【Consolidated Financial Statements】
Consolidated Balance Sheets
March 31, 2013 and 2012

Millions of Yen
2013
2012

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, 11 and 20)
Machinery and equipment (Note 9)
Construction in progress
Total
Accumulated depreciation¥

24,8601,914
4,601
23,443(1,872 )37,8074,821
7,644
103,218¥

29,985733
5,179
22,725(1,460 )32,847
4,234
3,052
97,295

Thousands of
U.S. Dollars(Note 2)2013$

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 12, 19 and 20)

264,019
20,327
48,864
248,969(19,881 )401,519
51,20081,181

16,259

$

¥

5,780

172,674

1,442
10,859
6,069
6,897
4,479
898
3,707

1,429
10,737
6,948
6,411
1,747
64
2,491

15,314
115,325
64,45473,24847,5689,537
39,369Total current liabilities

50,61035,607537,489

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)

1,518
1,802
10,181
1,688

638
2,817
7,085
1,523

16,121
19,138108,125
17,927

15,18912,063

161,311

13,26029,514145,049

13,26029,447
141,370

140,824
313,445
1,540,452(6,473 )9,310(1,928 )909(10,916 )4,197(2,976 )(9,695 )(68,744 )
98,874(20,476 )
9,654(2,892 )
185,840
2,164
188,004(2,886 )
171,496
1,932
173,428(30,713 )1,973,662
22,982
1,996,644¥ 253,803¥ 221,098$ 2,695,444

1,096,198

21,94561,455
15,076
136
98,612(48,952 )

21,78360,077
14,03922
95,921(46,843 )

233,061
652,666
160,1101,444
1,047,281(519,881 )

49,66049,078527,400

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

Millions of Yen
2013
2012

Thousands of
U.S. Dollars(Note 2)
2013

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

17,59942,36820,14812,817
1,400
1,085
5,508

14,59934,064
10,367
9,541
597
5,557

186,905449,959
213,976
136,119
14,868
11,52358,496

100,925

74,725

1,071,846

EQUITY:WACOAL HOLDINGS CORP. SHAREHOLDERS' EQUITY(Notes 13 and 22):
Common stock, no par value authorized, 500,000,000 shares in 2013 and 2012; issued
143,378,085 shares in 2013 and 2012
Additional paid-in capital (Note 14)
Retained earnings
Accumulated other comprehensive income (loss) (Note 15):
Foreign currency translation adjustments
Unrealized gain on securities
Pension liability adjustments (Note 12)
Total accumulated other comprehensive income (loss)
Less treasury stock at cost - 2,533,728 shares and 2,527,015 sharesin 2013 and 2012, respectively
Total Wacoal Holdings Corp. shareholders' equity
NONCONTROLLING INTERESTS
Total equity
TOTAL

TOTAL

¥ 253,803¥ 221,098$ 2,695,444

See notes to consolidated financial statements.
- 89 -

Consolidated Statements of Income
Years Ended March 31, 2013, 2012 and 20112013

Millions of Yen
2012

2011

Thousands of
U.S. Dollars(Note 2)2013

¥ 177,154¥ 171,897¥ 165,548$ 1,881,414

83,334
82,8691,197
1,655

81,891
79,62981,65977,716836
936

885,026
880,087
12,712
17,576

169,055

161,520

161,147

1,795,401

OPERATING INCOME

8,099

10,3774,401

86,013OTHER INCOME (EXPENSES):Interest income
Interest expense
Dividend income
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)
Other - net (Notes 1, 3 and 20)

82(159 )
789
2,208(325 )(150 )

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

137
(88 )
643
372
(1,585 )47

871(1,689 )8,379
23,450(3,452 )(1,593 )2,445(170 )(474 )

25,966

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

10,544

10,207

3,927

111,979

INCOME TAXES (Note 16):
Current
Deferred

6,521(2,872 )

3,523
676

3,480
(1,470 )69,254(30,501 )

3,649

4,199

2,010

38,753

6,895

6,008

1,917

73,226

939

1,008

990

9,973

NET INCOME

7,834

7,016

2,907

83,199NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS(211 )(103 )(122 )(2,241 )NET SALES (Note 17)
OPERATING COSTS AND EXPENSES:
Cost of sales (Notes 5, 12 and 17)
Selling, general and administrative (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

Total other expenses - net

Total income taxes
INCOME BEFORE EQUITY IN NET INCOME OF AFFILIATED COMPANIESEQUITY IN NET INCOME OF AFFILIATED COMPANIES (Note 6)

NET INCOME ATTRIBUTABLE TO WACOAL HOLDINGS CORP.

¥

7,623

¥

6,913

¥

2,785

$

80,958(Continued)- 90 -

Consolidated Statements of Income
Years Ended March 31, 2013, 2012 and 2011

2013

Yen
2012

2011

U.S. Dollars(Note 2)2013

NET INCOME ATTRIBUTABLE TO WACOALHOLDINGS CORP. PER SHARE (Note 18):
Basic
Diluted¥ 54.12¥ 54.04¥ 49.08¥ 49.02¥ 19.73¥ 19.72$ 0.58$ 0.57NET INCOME ATTRIBUTABLE TO WACOALHOLDINGS CORP. PER AMERICANDEPOSITARY RECEIPT(5 shares of common stock) (Note 18):
Basic
Diluted¥ 270.61¥ 270.18¥ 245.41¥ 245.12¥ 98.66¥ 98.58$ 2.87$ 2.87

See notes to consolidated financial statements.

(Concluded)- 91 -

Consolidated Statements of Comprehensive Income (Loss)
Years Ended March 31, 2013, 2012 and 2011
Thousands of
U.S. Dollars(Note 2)
2013

Millions of Yen
2012

2011

7,834

¥ 7,016¥ 2,907

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

4,523
5,122
1,048

(782 )
1,602(974 )(2,802 )(1,072 )(219 )

48,03554,397
11,130OTHER COMPREHENSIVE INCOME (LOSS)

10,693(154 )(4,093 )113,562COMPREHENSIVE INCOME (LOSS)

18,527

6,862(1,186 )196,761COMPREHENSIVE INCOME ATTRIBUTABLETO NONCONTROLLING INTERESTS(300 )

(79 )

(47 )

(3,186 )COMPREHENSIVE INCOME (LOSS)ATTRIBUTABLE TO WACOAL HOLDINGS
CORP.

¥ 18,227¥ 6,783¥ (1,233 )$ 193,575

2013
NET INCOME¥

See notes to consolidated financial statements.

- 92 -$

83,199

Consolidated Statements of Equity
Years Ended March 31, 2013, 2012 and 2011

BALANCE, APRIL 1, 2010
Net income
Foreign currency translation adjustments
Unrealized losses on securities
Pension liability adjustment
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 (Note 14)
BALANCE, MARCH 31, 2011
Net income
Foreign currency translation adjustments
Unrealized gains on securities
Pension liability adjustment
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 adjustment
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

Shares of
Outstanding
Common Stock(Thousands)
141,198

CommonStock

Additional
Paid-in
CapitalRetained
Earnings¥ 13,260¥ 29,366¥ 137,313

Millions of Yen
Accumulated
Other
Comprehensive
Treasury
Income (Loss)Stock¥ (5,547 )¥ (2,532 )

2,785(2,726 )(1,073 )(219 )(2,824 )Total Wacoal
Holdings Corp.
Shareholders'EquityNoncontrolling
Interests

Total Equity¥ 171,860¥ 1,923¥ 173,783

2,785(2,726 )(1,073 )(219 )

122
(76 )
1

2,907
(2,802 )(1,072 )(219 )(2,824 )(70 )(586 )
236

140,848(15 )
50
13,26029,401

137,274(9,565 )(655 )
297(655 )
282
50(2,890 )

167,480

1,900

169,380

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

103
(25 )
1

7,016
(782 )
1,602(974 )

6,913(757 )
1,601(974 )(2,817 )(2,817 )
(47 )

(15 )
6
12
140,851

46
13,26029,447

141,370(9,695 )

(15 )
5
60

(2,886 )

171,496

1,932

173,428

7,623
4,443
5,113
1,048

211
80
9

7,834
4,523
5,122
1,048

4,443
5,113
1,048
(3,944 )(3,944 )
(95 )

17
50

3
140,844¥ 13,260¥ 29,514¥ 145,049¥

909(2,817 )
(47 )
(15 )
5
60

(15 )
5
14

7,623

(11 )
1

(2,824 )(70 )(655 )
282
50

(10 )
1

(10 )
1

3

17
53

¥ (2,892 )¥ 185,840

208(181 )¥ 2,164(3,944 )
(95 )
(10 )
1
208
(164 )
53¥ 188,004- 93 -(Continued)

Consolidated Statements of Equity
Years Ended March 31, 2013, 2012 and 2011

BALANCE, MARCH 31, 2012

CommonStock

Additional
Paid-in
CapitalRetained
Earnings$ 140,824$ 312,734$ 1,501,381

Net income
Foreign currency translation adjustments
Unrealized gains on securities
Pension liability adjustment
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
Acquisition of subsidiaries
Equity transactions with noncontrolling interests (Note 13)
Share-based compensation granted and exercised (Note 14)
BALANCE, MARCH 31, 2013

Thousands of U.S. Dollars (Note 2)
Accumulated
Total Wacoal
Other
Holdings Corp.
Comprehensive
Treasury
Shareholders'
Income (Loss)
Stock
Equity$ (102,963 )$ (30,650 )

80,95847,18654,301
11,130(41,887 )Noncontrolling
Interests

Total Equity$ 1,821,326$ 20,518$ 1,841,844

80,95847,18654,301
11,130

2,241
849
96

83,19948,03554,397
11,130(41,887 )(1,009 )181
530$ 140,824$ 313,445$ 1,540,452

$

9,654

(107 )
11(107 )
11

32

181
562

$ (30,714 )$ 1,973,661

2,209(1,922 )$ 22,982(41,887 )(1,009 )(107 )
11
2,209(1,741 )562$ 1,996,643

See notes to consolidated financial statements.

- 94 -(Concluded)

Consolidated Statements of Cash Flows
Years Ended March 31, 2013, 2012 and 20112013
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:
Decrease (increase) in notes and accounts receivable(Increase) decrease in inventories(Increase) decrease in other current assets(Decrease) increase in notes and accounts payable
Decrease in liability for termination and retirement benefits
Increase (decrease) in accrued expenses, income taxes payable and other current liabilities
Other
Net cash provided by operating activities

¥

7,834

Millions of Yen
2012
¥

¥

$

83,1991,197
1,655(2,208 )325(359 )(25 )
831(451 )

1,818(673 )(100 )(1,922 )(851 )
3,452
290
12,741(1,589 )(1,801 )(377 )
1,973(685 )(513 )
438
10,060

493
400
194
1,251
(331 )(267 )
245
10,441

19,308(7,147 )(1,062 )(20,412 )(9,038 )36,661
3,079
135,312INVESTING 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 used in investing activities(1,846 )836
1,578(3,828 )334(340 )
64(2,391 )(855 )
767(461 )(17,070 )(253 )
29(23,436 )(515 )
488
8,477(8,707 )
79
(79 )
451
(2,708 )(846 )
90(221 )(1,809 )
1,991
3,817
(1,036 )24(3,467 )(10 )(703 )(19,605 )
8,879
16,759(40,654 )3,547(3,611 )680(25,393 )(9,080 )8,146(4,896 )(181,287 )(2,687 )307(248,895 )FINANCING ACTIVITIES:
Increase (decrease) 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 three 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 on common stock to noncontrolling interest
Net cash provided by (used in) financing activities

10,446353(578 )
2,037(2,907 )(10 )1(3,944 )
(95 )
5,303

(690 )
393
(71 )
500
(82 )
(15 )
5
(2,817 )(47 )(2,824 )(1,794 )

¥

267

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

2,907
4,685
50
(364 )(1,470 )
122
107
836
936
(372 )
1,585(566 )EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS - (Forward)

4,737
53
262
(2,872 )
103

7,016

2011

Thousands of
U.S. Dollars(Note 2)2013¥(100 )

50,308563
2,782(30,501 )1,094(347 )
538(2,652 )(687 )
413(921 )

110,939
3,749(6,138 )21,633(30,873 )(106 )
11(41,887 )(1,009 )56,319200(104 )(655 )
282(2,824 )(70 )(4,965 )¥(785 )

12,712
17,576(23,449 )
3,452(3,813 )$2,836(Continued)- 95 -

Consolidated Statements of Cash Flows
Years Ended March 31, 2013, 2012 and 20112013
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS - (Forward)¥

267

Millions of Yen
2012¥(100 )

2011¥(785 )

Thousands of
U.S. Dollars(Note 2)
2013

$

2,836

NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS(5,125 )

3,669

3,988

(54,428 )CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR29,98526,31622,328318,447

CASH AND CASH EQUIVALENTS, END OF YEAR

¥ 24,860¥ 29,985¥ 26,316$ 264,019

¥ 156
4,238

¥

¥

$ 1,657
45,008ADDITIONAL 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 marketable securities by assuming
payment obligation
Acquisition of fixed assets by assuming payment
obligation
Sales of investments (Note 3)¥1,450

90
3,702

91
3,645

¥126

$15,399¥200¥429¥3,775¥352$4,566$40,091

See notes to consolidated financial statements.

(Concluded)- 96 -

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 inJapan, the United States of America, Europe and certain Asian countries.
The accompanying consolidated financial statements, stated in Japanese yen, have been prepared on the basis ofaccounting 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 majority-owned
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 those subsidiaries areincluded in the Company's consolidated financial statements based on the subsidiaries' fiscal year. There were no materialintervening 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 theinvestee between 20% and 50%, although other factors are considered in determining whether the equity 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 and liabilities and disclosure ofcontingent 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) withoriginal maturities of three months or less.
Foreign Currency Translation - Assets and liabilities of foreign subsidiaries have been translated to Japanese yen atperiod-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 includedin accumulated other comprehensive income (loss), a separate component of equity. Exchange gains and losses resulting
from foreign currency transactions and the conversion of monetary assets and liabilities denominated in foreign currencies
are included in other income (expenses) in the consolidated statements of income.
Foreign currency translation losses for the years ended March 31, 2013, 2012 and 2011 were ¥162 million, ¥94 million,and ¥137 million, respectively. They have been included in other - net of other income (expenses).

- 97 -

Marketable Securities and Investments - The Companies classify their marketable securities and investments into one ofthree categories: trading, held to maturity or available for sale. Trading securities are bought and held principally for the
purpose of selling them in the near term. Trading securities are recorded at fair value and unrealized holding gains andlosses 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 holdthose securities to maturity. Available-for-sale securities are carried at fair value with a corresponding recognition of
unrealized holding gains or losses (net of tax) in accumulated other comprehensive income or loss, a separate componentof equity, until realized. Equity securities that do not have readily determinable fair values are recorded at cost. Gains andlosses on sales 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 periodically determine whether adecline in the fair value of marketable securities and investments is deemed to be other than temporary based on criteriathat include the duration of the market decline, the extent to which cost exceeds fair value, the financial position andbusiness outlook of the issuer and the intent and ability of the Companies to retain the impaired marketable securities andinvestments 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 historicalcollection experience and additional information including current economic conditions and creditworthiness of eachapplicable customer.
Inventories - Inventories are stated at the lower of cost or market, cost being determined on the first-in, first-out method
for raw materials and the average cost method for work in process and finished products. Cost includes net prices paid formaterials purchased, production labor cost, factory overhead and charges for customs duties.
Property, Plant and Equipment - Property, plant and equipment is stated at cost less accumulated depreciation andimpairment losses. Depreciation of property, plant and equipment is computed by the declining-balance method, except
for buildings acquired on or after April 1, 1998, which are depreciated using the straight-line method, based upon theestimated 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, 2013, 2012 and 2011 are ¥2,959 million, ¥2,913 million and ¥2,827
million, respectively.
Impairment of Long-Lived Assets - The carrying values of long-lived assets, held and used by the Companies, areevaluated 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 forrecoverability, whether in use or under development. The impairment loss is measured as the amount by which thecarrying amount of a long-lived asset exceeds its fair value. The Companies recorded no impairment charges on long-lived
assets for the year ended March 31, 2013. The Companies recorded ¥37 million and ¥107 million in impairment charges
on long-lived assets for the years ended March 31, 2012 and 2011, respectively, and have been included in selling, generaland administrative expenses.

- 98 -

Goodwill and Other Intangible Assets - Goodwill represents the excess of the purchase price of an acquired entity over the
net amounts assigned to 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 thatcreated the goodwill resides. To test for goodwill impairment, the carrying value of each reporting unit is compared with
its fair value. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment
test is performed by comparing the carrying amount of reporting 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 tothat excess.
To test for impairment of other intangible assets with indefinite useful lives, the carrying value of an intangible asset iscompared 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 and software and areamortized over their estimated useful lives using the straight-line method. The estimated useful 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 to removeleasehold 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 aremeasured with an expected present value technique based on historical experience 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 estimated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset anddepreciated over its useful life.
Termination and Retirement Plans - Termination and retirement benefits are accounted for in accordance with theguidance for retirement benefits. The Companies amortize net actuarial gains and losses and prior service cost over the
average employees' remaining service period by a declining-balance method and by a straight-line method, respectively.
Provisions for termination and retirement benefits include those for directors and corporate auditors 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 ayear is less than or equal to the sum of the service cost and interest cost components of net periodic pension cost for theplan for the year.
Leases - Certain noncancelable leases are classified as capital leases and the leased assets are included as part of 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 on a straight-line basis.
Treasury Stock - The Companies account for treasury stock under the cost method and include treasury stock as acomponent of equity.

- 99 -

Acquisitions - The Companies account for acquisitions using the acquisition method in accordance with the guidance forbusiness combinations. The Companies allocate the purchase price to the assets acquired and liabilities assumed based on
the estimated fair values at the date of acquisition, including intangible assets that can 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 and internet sales
when (1) persuasive evidence of an arrangement exists, (2) delivery has occurred resulting in transfer of title and risk ofloss, (3) the sales price is fixed or determinable, and (4) collectability is reasonably assured. As for consignment sales, theCompanies recognize revenue when the products are sold to the ultimate 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 andhandling costs are expensed as incurred. Shipping and handling costs for the years ended March 31, 2013, 2012 and 2011were ¥5,425 million, ¥5,773 million and ¥5,691 million, respectively, and have been included in selling, general andadministrative expenses.
Advertising Expenses - Advertising costs are expensed as incurred. Advertising expenses for the years ended March 31,
2013, 2012 and 2011 were ¥12,937million, ¥12,665 million and ¥11,946 million, respectively, and have been included inselling, general and administrative expenses.
Research and Development Costs - Research and development costs are expensed as incurred. Research and development
costs for the years ended March 31, 2013, 2012 and 2011 were ¥788 million, ¥801 million and ¥815 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 theguidance 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 and tax loss carryforwards at presently enacted tax
rates. A valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax assets
will not be realized in the future.
The Companies assess their income tax positions and record tax benefits for all years subject to examination based upon
their evaluation of the facts, circumstances and information available as of the end of the fiscal year. For those tax
positions only where there is greater than 50% likelihood that the tax position will be sustained, the Companies record thelargest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has fullknowledge of all relevant information.
Share-Based Compensation - Share-based compensation is accounted for in accordance with the guidance for stockcompensation. The Company measures share-based compensation cost at the grant date, based on the fair value of theaward and recognizes the cost over the requisite service period, which is the vesting period. The fair value of the award isestimated using the Black-Scholes option-pricing model.
Derivatives - Derivative instruments, including certain derivative instruments embedded in other contracts, are accounted
for in accordance with the guidance for derivatives and hedging. Because such derivative instruments are not designated asa hedge, changes in the fair value are recorded in earnings.
Reclassifications - Certain reclassifications have been made to the prior years' consolidated financial statements toconform to the current year's presentation.

- 100 -

Recent Accounting Pronouncements:
Testing Goodwill for Impairment - In September 2011, the Financial Accounting Standards Board (FASB) issued new
guidance that amends goodwill impairment testing. Under the revised guidance, entities testing goodwill for impairment
have the option of performing a qualitative assessment before calculating the fair value of the reporting unit. The guidance
does not change how goodwill is calculated or assigned to reporting units, nor does it revise the requirement to test
goodwill annually for impairment. This guidance is effective for annual and interim goodwill impairment test performed
for fiscal years beginning after December 15, 2011, during interim and annual periods beginning after December 15, 2011.
Since this guidance does not change how goodwill is calculated, it is not expected to have an impact on the Companies'
consolidated financial position, results of operations, or cash flows.
Testing Unamortized Intangible Assets for Impairment - In July 2012, the FASB issued new guidance that amends
unamortized intangible assets impairment testing. Under the revised guidance, entities testing unamortized intangible
assets for impairment have the option of performing a qualitative assessment before calculating the fair value of the assets.
The guidance does not revise the requirement to test unamortized intangible assets for impairment at least annually or more
frequently if conditions indicate an impairment has occurred. This guidance is effective for annual and interim unamortizedintangible assets impairment tests performed for fiscal years beginning after September 15, 2012. Since this guidance does
not change how unamortized intangible assets' impairment is calculated, it is not expected to have an impact on the
Companies' consolidated financial position, results of operations, or cash flows.
Presentation of Comprehensive Income - In February 2013, the FASB issued new guidance requiring additional
disclosure for the amounts reclassified out of accumulated other comprehensive income. The guidance required disclosureof changes in accumulated other comprehensive 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 thestatement where net income is presented or as a separate disclosure in the notes to the financial statements. The guidanceis effective for fiscal years and interim periods within those years, beginning after December 15, 2012. The adoption ofthis guidance is not expected to have an effect on the Companies' consolidated financial position, result of operations, orcash flows since it relates only to disclosure requirements of accumulated other comprehensive income.

2.

TRANSLATION INTO U.S. DOLLAR STATEMENTS
The consolidated financial statements are stated in Japanese yen, the currency of the country in which the Company isincorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely forconvenience of readers outside of Japan and have been made at the rate of ¥94.16 to $1, the noon buying rate for yen in
New York City as of March 31, 2013. Such translations should not be construed as representations that the Japanese yenamounts could be converted into U.S. dollars at the above or any other rate.

- 101 -

3.

MARKETABLE SECURITIES AND INVESTMENTS
Held-to-Maturity and Available-for-Sale Securities - The fair value of debt and marketable equity securities classified asheld to maturity and available for sale is based on quoted market prices as of March 31, 2013 and 2012. The cost, grossunrealized gain and loss and the fair value of held-to-maturity and available-for-sale securities by major security type wereas follows:

2013

Cost

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

¥

10
1,200
2,532

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

2012

Cost

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

¥

10
1,500
2,581

¥ 294

Millions of Yen
Gross
Gross
Unrealized
Unrealized
Gain
Loss

¥

Fair Value

0
1
156

¥ 61
4

¥

10
1,440
2,733

Total

¥ 4,091

¥ 157

¥ 65

¥ 4,183

Noncurrent:
Equity securities¥ 21,803¥ 9,341¥ 14¥ 31,130

¥ 332

¥1

¥3

¥ 330

Held-to-maturity debt securities:
Current:
Corporate debt securities- 102 -

There were no available-for-sale and held-to-maturity securities, which have been in a continuous unrealized loss position
for more than 12 months as of March 31, 2013 and 2012. Gross unrealized holding losses and fair values of available-forsale 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, 2013 and 2012, were as follows:

Millions of Yen
2013

2012
Gross
Unrealized
Loss

Fair Value

Gross
Unrealized
Loss

991
296

¥ 9
2

¥ 1,139
315

¥ 61
4

Total

¥ 1,287¥ 11¥ 1,454¥ 65

Noncurrent:
Equity securities

¥ 157

¥4

¥ 120

¥ 14

¥ 247

¥3

Fair Value
Available-for-sale securities:
Current:
Corporate debt securities
Mutual fund¥Held-to-maturity debt securities:
Current:
Corporate debt securities

As of March 31, 2013, the available-for-sale securities in a continuous unrealized loss position are composed of threeequity securities and three other securities. The severity of decline was less than 3.9%. The Companies periodicallydetermine whether a decline in the fair value of available-for-sale and held-to-maturity securities is deemed to be otherthan 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 and ability of the Companies to retain the impaired
available-for-sale and held-to-maturity securities for sufficient period of time for anticipated recovery in fair value as
described in Note 1. No available-for-sale and held-to-maturity securities were identified that meet the Companies' criteria
for recognition of an impairment loss on available-for-sale and held-to-maturity securities in unrealized loss position
presented above. Therefore, the Companies do not believe the unrealized losses represent an other-than-temporary
impairment as of March 31, 2013 and 2012.
Future maturities of debt securities and mutual funds classified as available for sale excluding mutual funds without fixedmaturities as of March 31, 2013, were as follows:

Millions of Yen
Fair
Cost
Value
Due within one year
Due after one year through five years

¥

Total

¥ 2,615- 103 -

463
2,152

¥

466
2,216

¥ 2,682

Future maturities of debt securities classified as held to maturity as of March 31, 2013 were as follows:

Millions of Yen
Fair
Cost
Value
Due after one year through five years

¥ 291

¥ 294

Proceeds from sales of available-for-sale securities and the gross realized gains or losses on the sales of available-for-salesecurities during the years ended March 31, 2013, 2012 and 2011, 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.

2013
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

Millions of Yen
2012
2011

¥ 5,049
2,164
9

¥ 180
2

¥ 1,602354
37

During the years ended March 31, 2013 and 2012, the Companies exchanged certain equity securities for other marketablesecurities. The Companies recorded the newly received securities at fair value and recognized a gain of ¥40 million in theyear ended March 31, 2012. There was no gain or loss recognized for the exchange transaction 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 such exchange of marketable securities for the year ended March 31, 2011.
The amount of impairment charges the Companies recognized on available-for-sale securities in which declines in fairvalue were other than temporary were ¥55 million, ¥823 million and ¥1,366 million in the years ended March 31, 2013,2012 and 2011, 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. The Companies recorded a loss of ¥9 million, a gain of ¥19 million and ¥68 million for theyears ended March 31, 2013, 2012 and 2011, respectively, that relate to trading securities still held as of March 31, 2013,2012 and 2011, respectively.
Cost-Method Securities - Investments in nonmarketable equity securities for which there are no readily determinable fairvalues were accounted for using the cost method and aggregated ¥1,365 million and ¥3,080 million as of March 31, 2013
and 2012, respectively. Investments in nonmarketable equity securities are reviewed annually or upon the occurrence of anevent for other-than-temporary impairment. The Companies recognized impairment charges on investments innonmarketable equity securities of ¥261 million, ¥8 million and ¥219 million in the years ended March 31, 2013, 2012 and2011, respectively.

- 104 -4.

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

2013

Millions of Yen
2012

2011

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

¥ 70
84
41
(25)

¥ 100

¥ 114

9
(39 )

13
(27)

Balance at the end of the year

¥ 170

¥ 70

¥ 100

2013

Millions of Yen
2012

2011

Balance at the beginning of the year
Charged to costs and expenses
Balances utilized¥ 1,390
1,702(1,390 )¥ 1,517
1,390(1,517 )¥ 1,915
1,517(1,915 )Balance at the end of the year

¥ 1,702¥ 1,390¥ 1,517

Information related to the Companies' allowance for returns was as follows:

5.

INVENTORIESThe components of inventories as of March 31, 2013 and 2012, were as follows:

Millions of Yen
2013
2012
Finished products
Work in process
Raw materials¥ 32,285
3,598
1,924

¥ 28,555
3,209
1,083

Total

¥ 37,807¥ 32,847

During the year ended March 31, 2013, a subsidiary in the United States of America settled an insurance claim andreceived cash proceeds of ¥383 million related primarily to merchandise damaged by the impact of Hurricane Sandy,
which made landfall in the Northeast of the United States of America on October 29, 2012. The subsidiary recorded theproceeds 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 the Companies the ability
to exercise significant influence over an investee. Significant influence is generally deemed to exist if the Companies havean ownership interest in the voting stock of the investee between 20% and 50%, although other factors are considered indetermining whether the equity method of accounting is appropriate. The Companies record investments in equity method
investees meeting these characteristics as "Investments in affiliated companies." Under the equity method, the Companies
record their proportionate share of an affiliated companies' income or loss based on the most recently available financial
statements.

- 105 -

The Companies' investments in affiliated companies and percentage of ownership as of March 31, 2013 and 2012 include,
among others, the following companies:

Percentage of Ownership (%)
2013
2012

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

34
25
42
50
24

34
25
42
50
20

Aggregate carrying amounts and fair values of investments in affiliated companies which have a quoted market price as ofMarch 31, 2013 and 2012, were as follows:

Millions of Yen
2012
2013
Carrying amount
Aggregate value of quoted market price¥ 10,787
8,650¥ 8,552
8,497

The following tables represent the affiliated companies' summarized information from the balance sheets as of March 31,
2013 and 2012, and statements of operations for the years ended March 31, 2013, 2012 and 2011.

Millions of Yen
2013
2012
Current assets
Noncurrent assets¥ 37,653
32,341¥ 32,041
26,372

Total¥ 69,994¥ 58,413

Current liabilities
Long-term liabilities
Equity

¥

¥

Total

¥ 69,994¥ 58,413

2013

Millions of Yen
2012

2011

¥ 53,229
27,8193,921
2,955¥ 51,690
27,765
4,753
3,302¥ 50,833
27,196
3,947
3,039

Net sales
Gross profit
Income before income taxes
Net income

7,763
7,098
55,133

7,609
6,116
44,688Dividends received from the affiliated companies were ¥580 million, ¥557 million and ¥424 million during the years ended
March 31, 2013, 2012 and 2011, respectively.
Retained earnings include net undistributed earnings of affiliated companies in the amount of ¥15,193 million and ¥14,735
million as of March 31, 2013 and 2012, respectively.

- 106 -

7.

ACQUISITIONS
Eveden - On April 10, 2012, the Company acquired all of the shares of Eveden Group 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 of funds to repay Eveden's preexisting debts and of ¥3,597 million to acquire
the preferred shares and made it the Company'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 brand strength of bothcompanies.
The Company consolidated 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, was insignificant. Since the fiscal year end of
Eveden is December 31, the results of operations of Eveden from April 1, 2012 to December 31, 2012 have been includedin the Company's consolidated statements of income for the year ended March 31, 2013.
Acquisition-related costs were ¥456 million, of which ¥411 million had already been included in the result of operations
for the year ended March 31, 2012, and ¥45 million were included in selling, general and administrative expenses for theyear ended March 31, 2013.
As a result of the purchase price allocation, the Company has recognized ¥10,662 million of goodwill and ¥5,499 millionof brand and these are classified as goodwill and other intangible assets, respectively, on the consolidated balance sheet.
Goodwill is not deductible for tax purpose. The amount of brand will be amortized based on the estimated useful lives of
20 to 25 years.
The Company adjusted the fair values of assets acquired and liabilities assumed as of the acquisition date based on theinformation the Company obtained subsequent to the acquisition date. These adjustments are reflected retroactively to thefair values of assets acquired and liabilities 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.

- 107 -

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

Unaudited Pro Forma Results
Unaudited pro forma financial information is presented below as if the acquisition of Eveden occurred at the beginning of2012 fiscal year.

Millions of Yen
2013
2012
Pro forma sales
Pro forma operating income
Pro forma net income attributable to Wacoal Holdings Corp.

¥ 180,120
8,446
7,753

¥ 182,240
11,607
7,376
Yen

Pro forma net income attributable to Wacoal Holdings Corp. pershare:
Basic
Diluted
8.

2013

2012

¥ 55.05
54.96¥ 52.37
52.31

GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill - The changes in the carrying amount of goodwill for the year ended March 31, 2013 were as follows:

Millions of Yen
2013
Peach John
Segment
Balance at the beginning of the year:
Goodwill
Accumulated impairment losses
Total
Goodwill acquired during year
Foreign currency translation adjustments
Impairment losses
Balance at the end of the year:
Goodwill
Accumulated impairment losses

Other¥ 11,203(836 )
10,367¥ 10,662
316(1,197 )Total¥¥ 11,203(836 )
10,367
10,662316(1,197 )11,203(2,033 )10,97822,181(2,033 )9,170¥ 10,978¥ 20,148

There was no change in the carrying amount of goodwill for the year ended March 31, 2012.

- 108 -

Total

The changes in the carrying amount of goodwill for the year ended March 31, 2011, were as follows:

Peach John
Segment
Millions of Yen
2011
Balance at the beginning of the year:
Goodwill
Accumulated impairment losses
Total
Impairment losses
Balance at the end of the year:
Goodwill
Accumulated impairment losses¥ 11,203
11,203(836 )
11,203(836 )

Total¥ 10,367

During the years ended March 31, 2013 and 2011, the Companies recorded impairment charges on goodwill of ¥1,197
million and ¥836 million, respectively, in the Peach John Segment. See Note 20 for further information.
Other Intangible Assets - The components of acquired intangible assets excluding goodwill as of March 31, 2013 and2012 were as follows:Year Ended March 31
Amortized intangible assets:
BrandsCustomer relationships
Software
OthersTotal
Unamortized intangible assets:
Trademarks
Other
Total

Gross
Carrying
Amount

¥

5,662
3,361
8,270
1,317

Millions of Yen
2013
Accumulated
Gross
Amortization
and Impairment
Carrying
Amount
Loss

¥

190
3,068
5,329
479

¥

2012
Accumulated
Amortization
and Impairment
Loss

3,361
8,228
1,202

¥ 2,818
4,866
426¥ 18,610¥ 9,066¥ 12,791¥ 8,110¥ 5,316103¥ 2,146¥ 5,316103¥ 559¥ 5,419¥ 2,146¥ 5,419¥ 559

During the year ended March 31, 2013, the Companies recorded an increase of brands of ¥5,499 million with an estimateduseful life of 20 to 25 years, as a result of the acquisition of Eveden. The Companies recorded foreign currency translation
adjustments of ¥163 million for brands.
Other intangible assets acquired during the year ended March 31, 2013 totaled ¥855 million which primarily consist of
software of ¥824 million with an estimated useful life of five years.
During the year ended March 31, 2013, the Companies recorded an impairment charge on other intangible assets for thecustomer relationships and trademarks of ¥68 million and ¥1,587 million, respectively, in the Peach John Segment.

- 109 -

During the year ended March 31, 2012, the Companies recorded no impairment charge on other intangible assets. During
the year ended March 31, 2011, the Companies recorded an impairment charge on other intangible assets of ¥377 millionand ¥559 million, for the customer relationships and trademarks, respectively, in the Peach John Segment. See Note 20 for
further information.
Aggregate amortization expenses for the years ended March 31, 2013, 2012 and 2011 related to other intangible assets
were ¥1,778 million, ¥1,747 million and ¥1,858 million, respectively. Future estimated amortization expenses as of March
31, 2013, were as follows:

Millions of
Yen
Year Ending March 31
Estimated amortization expense
2014
2015
2016
2017
2018

¥ 1,474
1,120
707
636
536

Total
9.

¥ 4,473SHORT-TERM BANK LOANS AND LONG TERM DEBT
Short-term bank loans as of March 31, 2013 and 2012, consisted of the following:

Millions of Yen
2013
2012
Unsecured bank loans¥ 16,259¥ 5,780

The weighted-average annual interest rates on short-term bank loans as of March 31, 2013 and 2012 were 0.7% and 1.3%,
respectively.
Unused lines of credit for short-term financing as of March 31, 2013 and 2012, aggregated ¥24,637 million and ¥40,184
million, respectively. The Companies compensate banks for these facilities in the form of commitment fees, which were
not material during the years ended March 31, 2013 and 2012.
Long-term debt as of March 31, 2013 and 2012, are summarized below. The interest rates and maturities are for loans asof March 31, 2013.

Millions of Yen
2012
2013
Collateralized bank loans, with floating interest at 4.3%, 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%~1.8%,
maturing through 2022
Capital lease obligation
Total
Less current portionLong-term debt, less current portion- 110 -

¥

28

¥ 307

351

98

2,037
2,416
(898 )

297
0
702
(64 )

¥ 1,518¥ 638

The annual maturities of long-term debt as of March 31, 2013, were as follows:

Millions of
Yen

Year Ending March 31
2014
2015
2016
2017
2018
Thereafter

¥

898
696
534
193
20
75

Total

¥ 2,416

A subsidiary has pledged assets as security for loans. As of March 31, 2013 and 2012, assets pledged as collateral for bankloans were as follows:

Millions of Yen
2012
2013
Land
Buildings
Machinery and equipment

¥

888
638
30

Total

¥ 1,556

¥

952
758

¥ 1,710

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 rightto offset cash deposits against obligations that have become due or, in the event of default, against all obligations due to the
bank.

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 the initial 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, 2013 are presented below:

Millions of
Yen

Year Ending March 31
2014
2015
2016
2017
2018
Thereafter

¥

491
378
262
230
232
237

Total

¥ 1,830

Rental expenses were ¥5,675 million, ¥5,317 million and ¥5,130 million for the years ended March 31, 2013, 2012 and2011, respectively, and have been included in selling, general and administrative expenses.

- 111 -

11.

ASSET RETIREMENT OBLIGATIONSThe Companies recorded the fair value of asset retirement obligations in order to recognize legal obligations associatedwith 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
2013
2012

12.

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

¥ 661
5
92
(113 )
3

¥ 663
6
78
(86 )

Balance at the end of the year

¥ 648

¥ 661

TERMINATION AND RETIREMENT PLANS
Employee Retirement Plans - The Companies sponsor termination and retirement benefit plans that cover substantially all
employees. Benefits are based on the employee's years of service, position and performance. If the termination is
involuntary or caused by death, the employee is usually entitled to greater payments than in the case of voluntarytermination.
The Companies have a contributory defined retirement benefit plan and several unfunded termination plans administeredby the Companies. Benefits under the contributory defined retirement benefit plan are usually paid in a lump sum at theearlier of termination or retirement, although periodic payments are available under certain conditions. Benefits under theother termination and retirement benefit plan are paid either as lump-sum payments or periodic payments under certain
conditions. The benefits are usually paid as a lump-sum payment, if the employee resigns before the mandatory retirement
age.
Contributory Defined Retirement Benefit Plan - The following provides a reconciliation of benefit obligations, plan assets
and funded status of the plans:Millions of Yen
2013
2012
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 Companies
Benefit obligations at the end of the year

¥ 34,135
849
602
68
1,005
(825 )(1,201 )(184 )
34,449¥ 32,708
833
725
71
1,793
(752 )(1,090 )(153 )
34,135

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

¥ 31,607
2,748
1,781
68
(825 )(1,201 )34,178¥ 30,978
550
1,850
71
(752 )(1,090 )31,607

Funded status at the end of the year¥

¥ (2,528 )- 112 -

(271 )

Amounts recognized in the consolidated balance sheets as of March 31, 2013 and 2012, consist of:Millions of Yen
2012
2013
Prepaid pension expense
Accrued expenses
Liability for termination and retirement benefits¥ 1,400(87 )(1,584 )¥¥¥ (2,528 )(271 )(93 )(2,435 )Amounts recognized in accumulated other comprehensive loss, pre-tax, as of March 31, 2013 and 2012, were as follows:

Millions of Yen
2013
2012
Actuarial loss
Prior service benefit¥ (5,396 )
2,164¥ (7,665 )
2,805¥ (3,232 )¥ (4,860 )The accumulated benefit obligation for all defined benefit plans as of March 31, 2013 and 2012, were as follows:

Millions of Yen
2013
2012
Accumulated benefit obligation¥ 34,449¥ 33,723

The projected benefit obligations and the fair value of the plan assets for the Companies' 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 Companies' pension plans with accumulated benefit obligations in excess of plan assets were as follows:

Millions of Yen
2012
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- 113 -

¥ 2,333662¥ 34,135
31,6072,333
662

33,72331,607

Net periodic benefit costs for the Companies' plans consisted of the following for the years ended March 31, 2013, 2012
and 2011:

2013
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service benefit¥

Millions of Yen
2012

849
602
(772 )
1,298(641 )¥¥ 1,336833
725(756 )
1,208(692 )¥ 1,318

2011
¥

835
712
(758 )
1,255(691 )¥ 1,353

The unrecognized net actuarial loss and prior service benefit are being amortized over 12 years (the average remaining
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 the years ended
March 31, 2013, 2012 and 2011 were as follows:

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

2013

Millions of Yen
2012

2011

971
1,298
(641 )¥ (1,999 )1,208(692 )¥ (933 )1,255(691 )¥ 1,628¥ (1,483 )¥ (369 )¥The estimated amounts that will be amortized from accumulated other comprehensive income (loss) into net periodic
benefit cost over the next year are summarized as follows:

Millions of
Yen
Actuarial loss
Prior service benefit¥ 944(574 )The Companies use a measurement date of March 31 for their plans. The weighted-average assumptions used as of March
31 in computing the benefit obligations shown above were as follows:

Discount rate
Rate of increase in future compensation

2013

2012

1.2 %
0.0 %

1.9 %
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- 114 -

2013

2012

2011

1.9 %
0.0 %
2.5 %

2.4 %
0.0 %
2.5 %

2.3 %
0.0 %
2.5 %

The Company's approach to establishing the discount rate is based upon long-term Japanese government bond rates andcorporate bond indices. The discount rate assumption is based upon the effective yields as of March 31, 2013 on theJapanese government bonds whose maturity 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 eachof the major asset classes. The return expectations for each of the asset classes are based largely on assumptions about
economic growth and inflation, which are supported by long-term historical data. The estimated long-term rate of return isbased on an asset allocation of equity securities of 26.0%, debt securities of 54.0%, life insurance company generalaccounts of 18.0% and short-term financing of 2.0%.
The Companies' investment strategy is to maintain actual asset weightings within a preset range of target allocations. The
Companies' investments are broadly diversified, typically consisting primarily of equity and debt securities. The
Companies believe these ranges represent an appropriate risk profile for the planned benefit payments of the plans basedon the timing of the estimated benefit payment.
The asset allocation as of March 31, 2013 and 2012, was as follows:

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

2013

2012

35.8 %
37.8 %
14.9 %
11.5 %

40.4 %
40.8 %
16.1 %
2.7 %The target allocation percentages are reviewed and approved by the Pension Committee. The actual allocations for 2013
and 2012 are different from the target allocation percentages primarily because Wacoal Corp. maintained additional equity
securities within a separate plan asset which is assigned to the plan based on 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 tothe total plan assets is higher than the target allocation, and similarly, the actual allocation for some other types of assets islower than the target allocation.
The following tables presents the Companies' plan assets using the fair value hierarchy as of March 31, 2013 and 2012,
respectively. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.
Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fairvalues estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant
unobservable inputs.

2013

Level 1Equity 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

Millions of Yen
Level 2
Level 3

¥ 5,159
7,066

¥

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

Total

¥ 7,635- 115 -

Total

2012

Level 1Equity securities:
Japanese companies
Foreign companies
Pooled funds (a)Debt securities:
Japanese government bonds
Japanese municipal bonds
Japanese corporate bonds
Foreign government bonds
Pooled funds (b)Life insurance company general accounts
Other types of investments:
Hedge funds (c)Short-term financing

Millions of Yen
Level 2
Level 3

¥ 6,105
866

¥
¥

4,357

1,927

9,654
5,093
2,017
845

2,017
845

¥ 22,041¥ 31,607

668¥ 9,566

6,105
866
4,357
1,927
5
70
668
9,654
5,093

5
70

Total

Total

(a)

This class includes common stock of approximately 27% Japanese companies and 73% foreign companies as ofMarch 31, 2013, and those percentages were 63% and 37%, respectively, as of March 31, 2012.

(b)This class includes approximately 37% of Japanese government bonds, 4% of Japanese municipal bonds, 33% offoreign government bonds, and 26% of corporate bonds as of March 31, 2013, and those percentages were 49%,3%, 42%, and 6%, respectively, as of March 31, 2012.

(c)This class includes hedge funds that invest both long and short in approximately 84% of debt securities, 8% of
currencies and 8% of other investments as of March 31, 2013. This class included hedge funds that invested both
long and short in approximately 36% of Japanese common stocks, 35% of foreign common stocks and 29% ofdebt securities as of March 31, 2012.

Equity securities and debt securities presented in Level 1 are primarily valued using a market approach based on thequoted market prices of identical instruments. Municipal bonds and corporate bonds presented in Level 2 are primarily
valued using quoted prices for identical instruments in markets that are not active. Pooled funds in equity securities ordebt securities and hedge 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
insurance company 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 Companies' funding policy for the funded plans is to contribute amounts computed in accordance with actuarial
methods accepted by Japanese tax law. The Companies expect to contribute ¥1,725 million to their plans in the year
ending March 31, 2014.
The following benefit payments, which reflect expected future services, as appropriate, are expected to be paid:

Millions of
Yen

Year Ending March 31
2014
2015
2016
2017
2018
Thereafter¥- 116 -

2,148
2,266
2,357
2,442
2,395
11,299

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 the amount of ¥1,580
million during the year ended March 31, 2012. The subsidiary recorded the estimated withdrawal liability of ¥774 million
as of March 31, 2011 as it was probable that the subsidiary would withdraw from the fund. Accordingly, the subsidiaryrecorded 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.
The aggregate amount of contributions to the plan were ¥56 million and ¥42 million for the years ended March 31, 2012
and 2011, respectively. The subsidiary's contribution to the plan for the year ended March 31, 2011 exceeded 5% of total
contributions.
Defined Contribution Plan - Certain subsidiaries have a defined contribution plan. The amounts of cost recognized fortheir contributions to the plan were ¥186 million, ¥27 million and ¥28 million for the years ended March 31, 2013, 2012
and 2011, respectively.
Employee Early Retirement Program - The Companies provide additional benefits to employees that elect to participate in
the Companies' early retirement program. Retirement benefits of ¥280 million, ¥260 million and ¥348 million were paid in
addition to normal benefits and charged to selling, general and administrative expenses for the years ended March 31, 2013,2012 and 2011, respectively.
Termination Plan for Directors and Corporate Auditors - The Company had and certain subsidiaries have terminationplans for directors and corporate auditors. Payment of termination benefits to directors and corporate auditors is made in alump sum upon termination and requires the approval of the shareholders before payment. In June 2005, the Company
rescinded its termination plan for directors and corporate auditors upon the approval of its shareholders. The amount ofbenefit for each individual was fixed as of June 29, 2005 and will remain frozen until the retirement of each respective
director and corporate auditor. The outstanding liabilities were ¥391 million and ¥317 million as of March 31, 2013 and2012, respectively, and were recorded in other long-term liabilities. Subsidiaries still maintain plans for their directors andcorporate auditors. In accordance with the guidance for determination of vested benefit obligation for a defined benefit
pension plan, the subsidiaries recorded a liability for termination benefits for directors and corporate auditors at the amountthat would be needed if all directors and corporate auditors were to resign at each balance sheet date. The liabilities fortermination benefits for directors and corporate auditors as of March 31, 2013 and 2012 were ¥218 million and ¥382
million, respectively, and were included in liability for termination and retirement benefits.

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 Board of Directorsof companies with board committees (an appointment committee, compensation committee and audit committee) can
also do so because such companies with board committees already, by nature, meet the criteria under the Companies
Act, even though such companies have an audit committee instead of the Board of Corporate Auditors.

- 117 -

The Companies Act permits companies to distribute dividends in kind (noncash assets) to shareholders subject to acertain 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 is defined 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 (acomponent of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on theequity account charged upon the payment of such dividends until the total of aggregate amount of legal reserve andadditional 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 paid-in 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 byresolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for
distribution to the shareholders which is determined by specific formula.

During the year ended March 31, 2013, changes in Wacoal Holdings Corp.'s additional paid-in capital due to equity
transactions with noncontrolling interest shareholders were as follows:

Millions ofYen
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¥ 7,623

17¥ 7,640

There were no changes in Wacoal Holdings Corp.'s additional paid-in capital due to equity transactions with
noncontrolling interest shareholders for the years ended March 31 2012 and 2011.

14.

SHARE-BASED COMPENSATIONThe Company adopted an annual stock option plan in the year ended March 31, 2009. Under the stock option plan, theCompany granted shares of its common stock to directors of the Company excluding outside directors and directors of theCompany's wholly owned subsidiary, Wacoal Corp., in the years ended March 31, 2013, 2012 and 2011. The Company
believes that such awards better align the interests of its directors with those of its shareholders, by sharing both risk andreturn from fluctuations in stock prices and giving motivation to enhance its corporate value. Each stock option is
exercisable to acquire 1,000 shares of the Company’s common stock at ¥1 per share. The compensation cost is measured atfair 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 date of retirement, whichever is earlier.

- 118 -

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 price of theCompany'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-freeinterest rate is based on the Japanese government bonds yield curve in effect at the time of grant for a period commensuratewith the expected term of the Company's share options. Expected term of options granted is based on the averageremaining service period of directors, assuming that those who are granted options will render service until the statedretirement date and they will exercise options immediately after their retirement.

Expected dividends
Expected volatility
Risk-free interest rate
Expected term

2013

2012

2011

3.2%
22.5%
0.1%
3.1 years

2.1%
31.6%
0.3%
3.8 years

1.7%
31.5%
0.2%
3.6 years

A summary of stock option activities under the Plan for the year ended March 31, 2013, was as follows:

Yen

Outstanding as of April 1, 2012
GrantedExercised
Forfeited or expired
Outstanding as of March 31, 2013
Exercisable as of March 31, 2013

Shares

WeightedAverage
ExercisePrice

205,000
67,000
3,000

¥1
1
1

269,000

1

Millionsof YenYears
WeightedAverage
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

17.7 years¥272

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, 2011.
Total compensation costs recognized for the years ended March 31, 2013, 2012 and 2011 were ¥53 million, ¥60 millionand ¥50 million, respectively. The total recognized tax benefits related thereto for the years ended March 31, 2013, 2012
and 2011 were ¥19 million, ¥21 million and ¥20 million, respectively.
The weighted-average grant date fair values of options granted for the years ended March 31, 2013, 2012 and 2011 were¥799, ¥878 and ¥1,081, respectively.
As of March 31, 2013, there were ¥11 million of 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.

- 119 -

15.

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

Foreign currency translation adjustments
Unrealized gain (loss) on securities:
Amount arising during the year
Reclassification adjustments
Net unrealized gain (loss)
Pension liability adjustment:
Amount arising during the year
Reclassification adjustment
Net unrealized gain (loss)
Other comprehensive income (loss)
16.

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

¥

¥

¥

¥

4,783

(260 )

4,523(836 )

Millions of Yen
2012
Tax(Expense)
Credit
¥

54

2011
Net
AmountPre-tax
AmountTax
ExpenseNet
Amount¥(782 )¥ (2,890 )¥88¥ (2,802 )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

(2,843 )1,014(1,829 )1,170(413 )
757(1,673 )601(1,072 )

971
657
1,628

(346 )(234 )(580 )

625
423
1,048

(1,999 )516(1,483 )

712
(203)
509

(1,287 )313(974 )(933 )
564(369 )

380(230 )
150(553 )
334(219 )¥ 14,219¥ (3,526 )¥ 10,693

72¥ (226)(154 )¥ (5,088 )

995¥ (4,093 )

¥

¥

¥

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

2013

Millions of Yen
2012

2011

Japan
Foreign¥ 18,609(8,065 )¥ 18,045(7,838 )¥ 9,212(5,285 )Total¥ 10,544¥ 10,207¥ 3,927

2013

Millions of Yen
2012

2011

¥ 5,578943¥ 2,942581¥ 2,882598¥ 6,521¥ 3,523¥ 3,480¥ (2,754 )(118 )¥ 675
1¥ (1,398 )(72 )¥ (2,872 )¥ 676¥ (1,470 )¥ 3,649¥ 4,199¥ 2,010

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 normal effective statutory tax rates of approximately
38.0% for the year ended March 31, 2013 and 40.7% for the years ended March 31, 2012 and 2011. Foreign subsidiaries are subject to income taxes of the countries in which they operate.

- 120 -

The Companies are subject to a number of different taxes based on income. The effective income tax rates differed fromthe normal statutory rates for the following reasons for the years ended March 31, 2013, 2012 and 2011:

2013

2012

2011

Normal Japanese statutory 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%

40.7 %

40.7%

4.3
0.8
0.0
(0.5)

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

9.9
17.6
2.9
(4.4)

Effective tax rates

34.6%

(0.3)
0.2
(4.2)
(3.7)

0.3

(0.7)
2.9
(12.3)(5.4)

41.1 %

51.2%

Amendments to the Japanese tax regulations were issued on December 2, 2011. As a result of these amendments, thestatutory 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, thereafter. Consequently, the statutory income tax rateutilized 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 andliabilities for this change 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.

- 121 -

The approximate effect of temporary differences and tax loss carryforwards that gave rise to deferred tax balances as ofMarch 31, 2013 and 2012 were as follows:

Millions of Yen
2013
2012
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
Pension expense
Tangible fixed assets
Tax loss carryforwards
Intangible assets
Investment in subsidiaries
Other temporary differences
Total
Valuation allowance

¥

Total

¥

608
100
181
1,194
1,274

¥

1,467

489
55
210
990
1,302
1,431

¥

1,403
2,112

¥

6,045
1,059

1,452
1,819
3,292
1,696

285
335
834
231
575
1,291
4,037

303
165
731
236
1,356
1,303
3,626
2,631

995
13,407(4,209 )223
13,473

9,198¥ 13,473

906
13,103(4,088 )
¥

9,015

1,905
912
193
11,269¥ 11,269

The valuation allowance increased by ¥121 million for the year ended March 31, 2013. The valuation allowance increasedby ¥850 million for the year ended March 31, 2012.
The Companies reversed certain valuation allowance and utilized ¥705 million of tax loss carryforwards, and recognizedtax benefits of ¥228 million for the year ended March 31, 2013.
As of March 31, 2013, certain subsidiaries had tax loss carryforwards, which are available to offset future taxable incomeof such subsidiaries, expiring as follows:

Millions of
Yen

Year ending March 31
2014
2015
2016
2017
2018
2019
2020
2021
2022
Thereafter

¥

Total

¥ 11,836- 122 -

714
155
408
441
634
2,141
2,349
1,782
913
2,299

There was no portion of undistributed earnings of foreign subsidiaries and foreign corporate joint ventures which wasdeemed to be permanently invested as of March 31, 2013 and 2012.
A reconciliation of beginning and ending amounts of unrecognized tax benefits was as follows:

2013

Millions of Yen
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

¥ 267
46

¥ 188
79

¥ 321
58
(191)

Balance at the end of the year

¥ 313

¥ 267

¥ 188

2011

Total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is ¥313 million and ¥267
million as of March 31, 2013 and 2012, respectively.
As a result of reevaluations of the Companies' tax positions and the expiration of the statute of limitations in several
jurisdictions, it is expected that the amount of unrecognized tax benefits will change in the next 12 months. Accordingly,
the Companies believe it is reasonably possible that existing unrecognized tax benefits may be reduced by an amount up to¥133 million within the next 12 months.
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 ofincome for the years ended March 31, 2013, 2012 and 2011 were not material.
The Companies file income tax returns in Japan and various foreign tax jurisdictions. In Japan, the Companies are nolonger subject to regular income tax examinations by the tax authorities for years before 2009 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 examination of certain domestic
subsidiaries' 2002 to 2007 fiscal years and certain U.S. subsidiaries' 2004 and 2003 fiscal years was completed.

17.

RELATED-PARTY TRANSACTIONSThe Companies purchase merchandise from numerous suppliers throughout the world, including certain affiliatedcompanies of the Companies. The Companies purchased merchandise from affiliated companies in the amount of ¥2,353
million, ¥2,093 million and ¥1,131 million in the fiscal years ended March 31, 2013, 2012 and 2011, respectively. The
accounts payable to affiliated companies were ¥166 million and ¥26 million as of March 31, 2013 and 2012, respectively.
The Companies also sell supplies, materials and products to certain affiliated companies. Aggregate sales to affiliatedcompanies were ¥381 million, ¥477 million and ¥537 million in fiscal years ended March 31, 2013, 2012 and 2011. The
accounts receivable from affiliated companies were ¥81 million as of March 31, 2013 and 2012.
The Companies earn royalties from the use of the Wacoal Brand by certain affiliated companies. The amount of royalty
revenue earned was ¥247 million, ¥216 million and ¥201 million in the fiscal years ended March 31, 2013, 2012 and 2011,
respectively. Other accounts receivables from affiliated companies, which are included in other current assets in the
consolidated balance sheets, were ¥190 million and ¥171 million as of March 31, 2013 and 2012, respectively.

- 123 -

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 issuecommon stock were exercised.
The computation of earnings per American Depositary Receipt (ADR), each ADR representing 5 shares of common 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 140,846,298 shares for 2013, 140,848,576 shares for 2012 and 141,145,190 sharesfor 2011. 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 141,070,568 shares, 141,013,083 shares and 141,260,186
shares for 2013, 2012 and 2011, respectively.

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, 2013 and 2012 were as follows:

Millions of Yen
2013
2012
Carrying
Carrying
Fair
Fair Value
AmountAmountValue
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

¥

4,601
41,00329¥

4,601
41,00629¥ 45,633¥ 45,636

¥

¥

(7 )
(2,416 )¥ (2,423 )

¥

4,936
31,22774¥

4,934
31,22774¥ 36,237¥ 36,235(7 )(2,416 )¥ (12 )
(702 )¥ (12 )
(702 )¥ (2,423 )¥ (714 )¥ (714 )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 theirestimated fair values.
Foreign Exchange Contracts - The Companies are exposed to foreign currency exchange risks on the transactions
denominated in foreign currencies relating to its ongoing business operations. Such risks are primarily 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 investments and marketablesecurities as of March 31, 2013 and 2012, respectively. The fair value of these held-to-maturity debt securities areclassified as Level 1. For all other investments included in marketable securities and investments, see Notes 3 and 20.

- 124 -

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 information andinformation about the financial instrument. These estimates are subjective in nature and involve uncertainties and mattersof 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-established department stores, generalmerchandise stores and other general retailers and specialty stores. No single customer constitutes 10.0% or more of thetotal sales, although the general retail customers that are consolidated companies within the Aeon Group collectively
accounted for approximately 9.1%, 9.8% and 10.0% of the total sales in fiscal years ended March 31, 2013, 2012 and 2011,
respectively.

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 totransfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderlytransaction 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 orsimilar 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 by observable market data bycorrelation or other means.

Level 3 -Inputs are unobservable.

- 125 -

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, 2013 and 2012 were as follows:

2013

Level 1

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

Millions of Yen
Level 2
Level 3

¥
¥

497
497

Level 129

29

¥ 4,133¥ 45,342¥ (7 )¥ (7 )

Total assets

421
421

10
1,440
2,733
4,183

31,13097
31,227¥ 31,648

Liabilities:
Derivative instruments:
Foreign exchange contracts

Millions of Yen
Level 2
Level 3

¥
¥

10
1,191
3,400
4,601
40,526
186
40,712

Liabilities:
Derivative instruments:
Foreign exchange contracts

Assets:Marketable securities:
Municipal bonds
Corporate bonds
Mutual funds
Total marketable securities
Investments:
Listed shares
Mutual funds
Total investments
Derivative instruments:
Foreign exchange contracts¥

40,526
186
40,712¥ 41,209

2012

10
1,191
2,903
4,104

Total

Total

¥

10
1,440
3,154
4,604
31,13097
31,22774

74¥ 4,257¥ 35,905¥ (12)¥ (12 )

Marketable securities and investments presented in Level 1 are valued using an unadjusted quoted market price in active
markets with sufficient volume and frequency of transactions. Bonds presented in Level 2 are valued by 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 both active 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.

- 126 -

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 the foreign
currency exchange contracts are not designated as a hedge. The Companies recognized a gain of ¥40 million, a gain of ¥89
million and a loss of ¥8 million in other - net of other income (expenses) in the years ended March 31, 2013, 2012 and2011, respectively.
The Companies recorded the derivative instruments as other current assets and other current liabilities in the consolidatedbalance sheets at fair value of ¥29 million and ¥7 million, respectively as of March 31, 2013. The derivative instruments
are presented as other current assets and other current liabilities in the consolidated balance sheets at fair value of ¥74
million and ¥12 million as of March 31, 2012.
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 fairvalue of ¥9,170 million, resulting in an impairment charge of ¥1,197 million, which is included in earnings for the year
ended March 31, 2013. The impairment arose due to the decline in its fair value, which was mainly caused by a downturnin consumption due to general market conditions. To measure the fair values of the reporting units, the Companies usedthe expected present value of future cash flows and incorporated relevant unobservable inputs, such as management's
internal assumptions about future cash flows and appropriately risk-adjusted discount rates, which reflected the
management's estimate of assumptions that market participants would use in pricing the asset in an arm's length transaction
as of the measurement date.
Trademarks with a carrying amount of ¥4,757 million as of March 31, 2013, were written down to their fair values 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 a downturn in consumption due togeneral market conditions. To measure the fair value of the trademarks, the Companies 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 in pricing the asset in an arm's length transaction as of the measurement date. Future
cash flows were based on the management's cash flow projections for the future five years, and after five years, future cash
flows were estimated using the perpetuity growth rate of 0%. The management's cash flow projections were developed
using estimates for expected future revenue growth rates, profit margins and working capital levels of the reporting units.
The rate of royalty used for the valuation was based on the actual royalty ratio used in transactions. The risk-adjusted
discount rate represents a weighted-average cost of capital (WACC) adjusted for inherent risk spread.

- 127 -Customer relationships with a carrying amount of ¥361 million as of March 31, 2013 were written down to their fair valueof ¥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 inconsumption because of general market conditions. To measure the fair values of the customer relationships, theCompanies used the excess earnings method and incorporated relevant unobservable inputs, such as management's internal
assumptions about future cash flows, the percentage of orders that the Companies expect to receive from the customers
existed at the point of acquisition and appropriately risk-adjusted discount rate, which reflected the management's estimate
of assumptions that market participants would use in pricing the asset in a current transaction as of the measurement date.
The future cash flows were projected in the same way as described in the trademarks. The percentage of orders that theCompanies expect to receive from the customers existed at the point of acquisition was estimated based on the historical
trend of the percentage of sales to the preacquisition customers. Risk-adjusted discount rate representing a WACC wasdetermined using the capital asset pricing model.
There were no significant assets or liabilities that were measured at fair value on a nonrecurring basis as of March 31, 2012.
Buildings and building improvements held and used, with a carrying amount of ¥107 million were written down to theirfair value of 0, because the Companies decided to abandon an office building. An impairment charge of ¥107 million was
included in earnings for the year ended March 31, 2011, in Wacoal Business (Domestic) Segment.
As of the end of March 31, 2011, goodwill with a carrying amount of ¥11,203 million is written down to its implied fairvalue of ¥10,367 million, resulting in an impairment charge of ¥836 million, which is included in earnings for the year
ended March 31, 2011. To measure the fair values of the reporting units, the Companies used the expected present valueof future cash flows and incorporated relevant unobservable inputs, such as management's internal assumptions about
future cash flows and appropriately risk-adjusted discount rates, which reflected the management's estimate of assumptions
that market participants would use in pricing the asset in an arm's length transaction as of the measurement date.
Trademarks with a carrying amount of ¥5,316 million as of March 31, 2011, were written down to their fair value of¥4,757 million, resulting in recognition of an impairment charge of ¥559 million for the year ended March 31, 2011. The
impairments arose due to the decline in their fair value, which were mainly caused by a downturn in consumption due togeneral market conditions. To measure the fair value of the trademarks, the Companies 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 in pricing the asset in an arm's length transaction as of the measurement date. Future
cash flows were based on the management's cash flow projections for the future five years, and after five years, future cash
flows were estimated using the perpetuity growth rate of 0%. The management's cash flow projections were developed
using estimates for expected future revenue growth rates, profit margins and working capital levels of the reporting units.
The rate of royalty used for the valuation was based on the actual royalty ratio used in transactions. The risk-adjusted
discount rate represents a WACC adjusted for inherent risk spread.

- 128 -Customer relationships with a carrying amount of ¥1,102 million as of March 31, 2011 were written down to their fairvalues of ¥725 million, resulting in recognition of impairment charges of ¥377 million for the year ended March 31, 2011.
The impairments recorded for this years arose due to the decline in their fair values, which were mainly caused by adownturn in consumption because of general market conditions. To measure the fair value 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, the percentage of orders that the Companies expect to receive from thecustomers existed at the point of acquisition and appropriately risk-adjusted discount rate, which reflected the
management's estimate of assumptions that market participants would use in pricing the asset in a current transaction as ofthe measurement 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 existed at the point of acquisition was
estimated based on the historical trend of the percentage of sales to the preacquisition customers. Risk-adjusted discountrate representing a WACC was determined using the capital asset pricing model.
Valuation process
The valuation process involved in Level 3 measurements for applicable asset and liability is governed by the valuation
policies and procedures, including evaluation method for fair value measurements, pre-approved by the Companies. Basedon 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 and liability at fair value. We engage independent external experts
of valuation to assist in the valuation process for certain assets over a specific amount, and their results of valuations arereviewed 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 ledgers.
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

Trademarks

Customer relationships

Millionsof YenFair
Value

Valuation
Technique¥3,170

Relief-fromroyalty method¥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

- 129 -

Range

7.5%~11.5%
3.0%~4.0%

3.3%~5.5%0%
4.5%
2 years

21.

SEGMENT INFORMATION
Operating Segment Information
The Companies have three reportable segments: "Wacoal business (domestic)," "Wacoal business (overseas)," and "Peach John," which are based on their locations and brands. These segments represent
components of the Companies for which separate financial information is available and for which operating profit (loss) is reviewed regularly by the chief operating decision maker in deciding how toallocate the Companies' resources and in assessing their performance. The accounting policies used for these reportable segments are the same as those described in the summary of significant accounting
policies in Note 1.
"Wacoal business (domestic)" segment primarily produces and sells innerwear (consisting of foundation, lingerie, nightwear and children's innerwear), outerwear, sportswear 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 textile-related products, mannequins and costruction of stores andinterior design.
Information about operating results and assets for each segment as of and for the years ended March 31, 2013, 2012 and 2011 was as follows:

Millions 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

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John

Other

Elimination¥ 115,657
2,193
117,850¥ 23,081
7,582
30,663¥ 11,972
232
12,204¥ 26,444
5,430
31,874¥ (15,437 )(15,437 )

106,482
2,945

28,635598

30,429498(15,437 )109,427
8,423

29,233
1,430

11,357
696
1,197
1,655
14,905(2,701 )30,927947(15,437 )236,006
2,283

34,396471

18,135
202

43,836
290(78,570 )

253,803
3,246

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

208,373
1,991

29,367549

21,237348

20,566666

Consolidated¥ 177,154
177,154
161,466
4,737
1,197
1,655
169,055
8,099

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- 130 -¥ 171,897(15,197 )(15,197 )(58,445 )

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

Millions of Yen

2011
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)

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John

Other

Elimination¥ 110,856
2,134
112,990¥ 20,010
6,118
26,128¥ 11,575
73
11,648¥ 23,107
4,588
27,695¥ (12,913 )(12,913 )104,384
2,986

24,297509

26,992365(12,913 )107,370
5,620

24,806
1,322

11,930825
836
936
14,527(2,879 )27,357338(12,913 )202,054
2,488

27,109523

21,013
196

20,910132(55,810 )Total assets and capital expenditures
Total assets
Capital expenditures

Consolidated¥ 165,548
165,548
154,690
4,685
836
936
161,147
4,401

215,276
3,339

The Companies account for intersegment sales and transfers at cost plus a markup. Operating profit (loss) represents net sales less operating costs and expenses. Amortization and impairment charges onother intangible assets represent only amortization and impairment charges on customer relationships or trademarks related to the acquisition of Peach John, and do not include any other intangibles suchas software.
Products and Service Information
Net sales information by products and services for the years ended March 31, 2013, 2012 and 2011 was as follows:

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

2013

Millions of Yen
2012

2011

¥ 130,284
9,232
1,467
140,983¥ 124,303
9,390
1,530
135,223¥ 116,127
8,713
1,476
126,316¥¥¥

16,4391,559
7,580
10,593¥ 177,154

16,371
1,646
8,226
10,431¥ 171,897

17,3971,666
7,493
12,676¥ 165,548

Geographic Information
Information by major geographic area as of and for the years ended March 31, 2013, 2012 and 2011 was as follows:

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

2013

Millions of Yen
2012

2011

¥ 146,224
12,685
18,245¥ 149,587
10,527
11,783¥ 144,999
9,167
11,382¥ 177,154¥ 171,897¥ 165,548¥ 44,670
2,685
2,305

¥ 45,240
2,334
1,504

¥ 45,792
2,349
1,593

¥ 49,660¥ 49,078¥ 49,734- 131 -

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

22.

SUBSEQUENT EVENTSOn May 14, 2013, the Board of Directors resolved to pay a cash dividend of ¥140 per 5 shares of common stock to holdersof record as of March 31, 2013 (aggregate amount of ¥3,944 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

Office for handling businessTransfer agent

March 311,000 shares(Special Account)
Osaka Securities Transfer Section
Mitsubishi UFJ Trust and Banking Corporation
6-3, Fushimi 3-chome, Chuo-ku, Osaka
Securities Transfer Section
Sumitomo Mitsui Trust Bank, Limited
1-10, Nikkocho, Fuchu-shi, Tokyo (Note 2)(Special Account)
Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Forwarding office―――Handling charge forpurchase and Sale

Free of charge

Method of public noticeSpecial benefit forshareholders(Notes)1.

2.

Public notice of the Company shall be in electronic form; provided that, where public
notice cannot be provided electronically due to an accident or unavoidable event, it shallbe published in Nihon Keizai Shimbun.
(i) Wacoal Essence Check (coupon for goods) shall be presented to the shareholders as
follows (with the date of determination of the shareholders entitled thereto being the endof March and September):- To shareholders holding 1,000 shares or more, but less than 3,000 shares:
Wacoal Essence Check worth JPY3,000 shall be presented twice a year.
- To shareholders holding 3,000 shares or more:
Wacoal Essence Check worth JPY5,000 shall be presented twice a year.
(ii) Shareholder special discount shall be made for Wacoal products by means of catalogue
sales as follows:- Wacoal catalogue shall be sent to those shareholders who want them and 20%
discount shall be made for the products ordered for purchase by such shareholders.

Our Articles of Incorporation prescribe that the shareholders holding shares constituting less than one unit of theCompany may not exercise any rights, except for the rights as prescribed under each item in Paragraph 2, Article 189 of
the Corporate Law, 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.
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, 2013, to the filing date of the Annual Securities Report.
(1） Annual Securities Report andthe attachments thereto, andConfirmation Letter

Fiscal Year
(64th Fiscal Year)

From April 1, 2011
to March 31, 2012(2） Internal Control Report and theattachments thereto(3） Quarterly Report andConfirmation Letter

Filed with the Director of the
Kanto Local Finance Bureau on
June 28, 2012
Filed with the Director of the
Kanto Local Finance Bureau on
June 28, 2012

(First quarter of 65th
Fiscal Year)

From April 1, 2012
to June 30, 2012

(Second quarter of 65th From July 1, 2012
Fiscal Year)to September 30, 2012
(Third quarter of 65th
Fiscal Year)

From October 1, 2012
to December 31, 2012

Filed with the Director of the
Kanto Local Finance Bureau on
August 14, 2012
Filed with the Director of the
Kanto Local Finance Bureau on
November 14, 2012
Filed with the Director of the
Kanto Local Finance Bureau on
February 14, 2013

(4） Extraordinary Report(Pursuant to Paragraph 4, Article 24-5 of the Financial
Instruments and Exchange Act and Item 9-2,
Paragraph 2, Article 19 of the Cabinet Office
Ordinance Concerning Disclosure of Corporate
Affairs, etc.)

Filed with the Director of the
Kanto Local Finance Bureau on
June 29, 2012

(5） Amendment to Extraordinary
ReportAmendment to the Extraordinary Report filed on June29, 2012

Filed with the Director of the
Kanto Local Finance Bureau on
July 3, 2012

- 134 -

Part II 【Information on Guarantors, etc., for the Company】
Not applicable.

- 135 -REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Wacoal Holdings Corp.
Kyoto, Japan
We have audited the accompanying consolidated balance sheets of Wacoal Holdings Corp. and subsidiaries (the"Companies") as of March 31, 2013 and 2012, and the related consolidated statements of income, comprehensive
income (loss), equity, and cash flows for each of the three years in the period ended March 31, 2013, which are all
expressed in Japanese yen. These financial statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of
Wacoal Holdings Corp. and subsidiaries as of March 31, 2013 and 2012, and the results of their operations and their
cash flows for each of the three years in the period ended March 31, 2013, in conformity with accounting principles
generally accepted in the United States of America.
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.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (UnitedStates), the Companies' internal control over financial reporting as of March 31, 2013, based on the criteria
established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of theTreadway Commission and our report dated June 27, 2013 expressed an unqualified opinion on the Companies'
internal control over financial reporting.

/s/ Deloitte Touche Tohmatsu LLC

June 27, 2013

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Wacoal Holdings Corp.
Kyoto, Japan
We have audited the internal control over financial reporting of Wacoal Holdings Corp. and subsidiaries (the"Companies") as of March 31, 2013, based on criteria established in Internal Control - Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission. As described in Management's
Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control
over financial reporting at Eveden Group Limited and its subsidiaries, which were acquired on April 10, 2012 andwhose financial statements constitute 9.5% of total assets and 4.1% of net sales of the consolidated financial
statement amounts as of and for the year ended March 31, 2013. Accordingly, our audit did not include the internal
control over financial reporting at Eveden Group Limited and its subsidiaries. The Companies' management is
responsible for maintaining effective internal control over financial reporting and for their assessment of theeffectiveness of internal control over financial reporting, included in the accompanying Management's Report on
Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Companies' internal
control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on theassessed risk, and performing such other procedures as we considered necessary in the circumstances. We believethat our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed by, or under the supervision of, thecompany's principal executive and principal financial officers, or persons performing similar functions, and effectedby the company's board of directors, management, and other personnel to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal control over financial reporting includes thosepolicies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that
could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility ofcollusion or improper management override of controls, material misstatements due to error or fraud may
not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectivenessof the internal control over financial reporting to future periods are subject to the risk that the controls
may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.
In our opinion, the Companies maintained, in all material respects, effective internal control overfinancial reporting as of March 31, 2013, based on the criteria established in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States), the consolidated financial statements as of and for the year ended March 31, 2013of the Companies and our report dated June 27, 2013 expressed an unqualified opinion on those financial
statements.

/s/ Deloitte Touche Tohmatsu LLC

June 27, 2013

【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, 2013

【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】

Ikuo Otani, Senior 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)
Osaka Securities Exchange Co., Ltd.
(8-16, Kitahama 1-chome, Chuo-ku, Osaka)

1. 【Matters Related to Basic Framework of Internal Control over Financial Reporting】
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in therules under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is a process designed by,or under the supervision of, our principal executive and principal financial officers and effected by our board of directors,
management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that:zzzpertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of the Company;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements inaccordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance withauthorizations of management and directors of the Company; andprovide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of theCompany’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because ofchanges in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

2. 【Matters Related to Scope of Assessment, Record Date, and Assessment Procedure】
Our management assessed the effectiveness of internal control over financial reporting as of March 31, 2013. In making thisassessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission inInternal Control Integrated Framework.
We have excluded the assessment of internal control over financial reporting of Eveden, which became our wholly owned
subsidiary as of April 10, 2012, and its subsidiaries (collectively, the “Eveden Group”) from the scope of assessment for theeffectiveness of internal control over financial reporting of the Company as of the record date (March 31, 2013).
The percentages of the total assets and net sales of Eveden Group in the consolidated financial statements as of and for the fiscal
year ended March 31, 2013, were 9.5% and 4.1%, respectively.

3. 【Matters Related to Results of Assessment】
Based on the assessment described above, our management concluded that, as of March 31, 2013, our internal control overfinancial reporting was effective based on those criteria.
Our independent registered public accounting firm, Deloitte Touche Tohmatsu LLC, has issued an attestation report on theeffectiveness of our internal control over financial reporting as of March 31, 2013, as stated in its report of this Annual Securities
Report.

4. 【Supplementary Matters】
We prepared this Internal Control Report in accordance with the terms, form, and procedures required in the United States since weare a registrant of the Securities and Exchange Commission (“SEC”) through the submission of consolidated financial statements.
We have filed the delisting of our ADRs from NASDAQ Stock Market and an application with SEC for termination of ourregistration on April 15, 2013. The Delisting completed on April 25, 2013, and we anticipate our registration and applicabledisclosures under Article 15 of the U.S. Securities Exchange Act of 1934 will be terminated on July 24, 2013.
The scope of our management’s assessment on the internal control over financial reporting of the Company and our consolidated
subsidiaries only includes the internal control relating to the preparation of the consolidated financial statements shown in Section “V.
Financial Information.” Internal control over financial reporting of the equity method affiliates of the Company is not included insuch assessment.

5. 【Special Notes】
None.