A N N U A L R E P O R T 2022
Year Ended February 28, 2022

The next potential is in process

Onward Holdings Co., Ltd.

CONTENTS

Corporate Information

Sustainable Management

Segment Information

Corporate Governance

Key Financial DataPRINT

The Onward Group’s Raison D’etre(Mission Statement)

Enriching and Adding Color to People’s
Lives while Caring for the Planet
The world of today is plagued with various global environmental and social issues,
and we are therefore pressed to take actions specifically for contributing to the realization of a sustainable society.
The Onward Group realizes that sustainable management is an important theme that forms the foundation for its corporate activities.
Accordingly, we will continue to practice management that pursues coexistence with the environment basedon our mission statement of “enriching and adding color to people’s lives while caring for the planet.”

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Corporate Information

CONTENTS

Sustainable Management

Segment Information

Corporate Governance

Key Financial Data
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CONTENTS

03

12

24

37

44

Corporate
Information

Sustainable
Management

Segment
Information

Corporate
Governance

Key Financial
Data

04 Message from the President
08 Our History
10 Value Creation Story of the
Onward Group
11 Onward at a Glance

13 Sustainability Vision andPromotion System

25 Business Segment
Introductions (Summaries)

14 Materiality of the OnwardGroup

26 Apparel Business
Domestic Apparel Business
Overseas Apparel Business

20 Diversity Management
Initiatives
22 Improvement of Traceability /Respecting Human Rights andDeveloping the Working
Environment

30 Lifestyle Business
Wellness Business
Pet & Home Life Business
Beauty & Cosmetics Business
Gourmet Foods Business
Gifts Business38 Corporate Governance45 11 Years of Key Financial Data

42 Message from Outside
Director

46 Analysis of Financial Position,
Operating Results and Cash
Flows

43 Management Team48 Consolidated Financial
Statements
52 Our Network
53 Company Information
54 Stock Information

35 Onward Group Key Brands

ForwardLooking
Statements

The information in this report is not a solicitation to purchase or sell Onward Holdings stock.
Opinions and forecasts stated herein represent the judgments of the Company at the time this report was published. Onward Holdings makes no guarantee regarding the accuracy of theinformation in this report and may make revisions without prior notice.
Onward Holdings and the providers of this information assume no responsibility whatsoever for any losses incurred in association with this information.

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Corporate Information

Sustainable Management

Segment Information

Corporate Governance

Key Financial DataPRINT

Co r p o rate In f o r m atio n

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Sustainable Management

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Message from the President

We will complete our global business reforms andmake an aggressive comeback aimed at new growth.
Salutations
I would like to express my sincere gratitude for your continued support. We would also like to express our deepest sympathy to everyone who has been affected by the COVID-19 pandemic, and we sincerely hope that thesituation will improve as soon as possible.
In April 2021, the Group prepared ONWARD VISION 2030, our medium- to long-term management vision
with its final year ending February 28, 2031, and set its new mission statement (raison d’etre) of “enriching andadding color to people’s lives while caring for the planet.” At present, there is no end in sight for the COVID-19
pandemic, the Japanese yen is rapidly depreciating in foreign exchange markets, and resource prices are skyrocketing due to the situation in Russia and Ukraine. For these reasons, the economic outlook is likely to remain uncertain. However, we will accelerate various initiatives with the aim of realizing ONWARD VISION 2030.
Overview of ONWARD VISION 2030
Desired ImageThe Onward Group’s Raison D’etre (Mission Statement)

Enriching and Adding Color to People’s
bu

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Achieve direct and

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5.	Promote Sustainable Management That Pursues
Coexistence with the EnvironmentHn/President and CEO

St

Michinobu Yasumoto

4.	Evolve into a Company Where Diverse and Unique
Personnel Can Exhibit Their Strengths

On

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OM

io

3. Strengthen Business-to-Business Operations

t ri

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at2. Accelerate Growth in the Lifestyle Business Segmentro ductio n, / DisM

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Five Strategies Leading up to FY02/31
1.	Transform the Apparel Business Segment’s
Business Model, /PO rg aEvolving into a Customer-Centric Company,
Making the Best Use of Employees’ Diverse
StrengthsngA

Desired Image of the Onward Group

la

i
nn

n

P

Lives while Caring for the Planet

ar
f/P

tn

customers

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Message from the President
Could you give us your assessment, reflecting on the fiscal year ended

You said that the fiscal year ending February 28, 2023 will be the year

Q1. February 28, 2022?

Q2. in which we make an aggressive comeback aimed at realizing ONWARD

In the fiscal year ended February 28, 2022, which is the first year of ONWARD VISION
2030, we continued to withdraw from unprofitable businesses and close unprofitable
stores, as part of the global business reforms that have been conducted since autumn
2019. At the same time, we made steady progress in our plan to merge our physicalstores with our e-commerce platform (the OMO strategy). Specifically, we introduced the“Click & Try” service at more OMO stores, started the full-scale operation of a centralized
inventory management system in order to reduce losses of sales opportunities due toshortages, and realized sales growth at both our physical stores and online platform andimproved our gross profit margin. Thus, we were able to advance measures aimed at
growth in the past year.
In terms of business performance, despite the impact of the COVID-19 pandemic, wewere able to achieve both recurring profit and net profit, and also improved operating
profitability significantly from the previous fiscal year.
In the Apparel Business, we were able to greatly improve operating profitability bothin Japan and abroad. As mentioned above, in our domestic apparel business, our core operating company, Onward Kashiyama achieved growth in sales and improved its grossprofit margin by introducing the “Click & Try” service at a significantly larger number ofstores. In our overseas apparel business, we improved profitability by withdrawing from
unprofitable businesses through business reforms.
On the other hand, in the Lifestyle Business, we improved performance steadily evenduring the COVID-19 pandemic, and posted both increased sales and profits.
In March 2022, we sold Onward Beach Resort Guam, Inc., which had become unprofitable due to the COVID-19 pandemic, and business reforms are progressing smoothly.
As described above, in the term under review, we were able to prepare for the fiscal year
ending February 28, 2023, which is the year in which we make an aggressive comeback.

In the Apparel Business, Onward Kashiyama started its “Click & Try” service in April 2021,
and has now introduced this service to roughly 290 stores (as of July 2022). We have plansto further expand the service this year. This service has been especially appreciated bycustomers who are looking for irregular sizes, and customers in rural areas with insufficient
access to brands and products. Moving forward, we aim to boost business performanceeven further by working to raise awareness, which has been an issue for us.
We have also introduced product life cycle management (PLM). By sharing information regarding the sales situations at stores with our business partners, we will contributeto solving environmental problems by reducing wasteful manufacturing, and promote improvement of operational efficiency and strengthening of production systems.
In the Lifestyle Business, we will further strengthen our management structure in order
to raise the speed of growth to a higher level, and will actively make necessary investments, going forward.
By taking the measures described above, we forecast consolidated net sales of¥168,700 million (up 0.1%, year-on-year), and plan to return to profitability with consolidated operating profit of ¥2,100 million (an operating loss of ¥1,079 million in the previous
fiscal year) in the fiscal year ending February 28, 2023.

VISION 2030. What specific strategies and measures do we have?

Growth Roadmap
Transforming the business model (amid COVID-19)
Apparel BusinessNet sales

40.8

50.0

149.7

150.0
FY02/24

100.0

200.0
FY02/3125.0 (Billions of yen)Lifestyle Business

15.0

Operatingprofit2.2
1.0*OMO: Acronym for ‘Online Merges with Offline’ (the online store merges with physical stores)

300.0 (Billions of yen)
200.0

FY02/22

ROE(post-COVID-19)

Lifestyle Business

190.5

Apparel BusinessMoving forward with the full-blown growth strategy

7.0

3.2

4.5
2.5
FY02/24

FY02/22

Approx. 8%*Figures for FY02/22 are those at the time ONWARD VISION 2030 was prepared.

10.0
FY02/31

10% or more

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Message from the President
Can you explain the future growth opportunities and risks, as well as

Q3. business strategies for Onward Holdings?

Q4. Tell us about the status of sustainability initiatives.

Behind the creation of ONWARD VISION 2030 is the perspective of promoting new
growth strategies that meet the needs of the times, after transforming our conventional
business structure into a new structure, and being reborn with a leaner constitution
through global business reforms. The Japanese domestic market has entered an era of fullscale population decline, and some predict that the population of Japan will decrease byhalf within half a century. This is a risk faced by companies that mainly do business in thedomestic market. In order to respond to this era of population decline, with a view toward
diversification and globalization, we will promote three business strategies: transform theApparel Business segment’s business model, accelerate growth in the Lifestyle Businesssegment, and strengthen business-to-business operations.
With regard to transforming the Apparel Business segment’s business model, we will
accelerate the opening of OMO stores, and develop and introduce new brands. At thesame time, we will further strengthen e-commerce by improving convenience.
In terms of accelerating growth in the Lifestyle Business segment, we will focus mainly
on Chacott, KOKOBUY, Creative Yoko, and Yamato, whose business areas are in growthdomains such as beauty, health, healing, comfort, and gifts. We will accurately assess market needs in each area, and provide products and services that are better received by ourcustomers than ever before.
With respect to strengthening business-to-business operations, Onward Trading now
primarily manufactures and sells products such as uniforms and promotional items forcompanies, schools and others. In the future, we will advance into new business areasthat meet the diverse needs of corporate customers, such as office and logo design, as
well as consulting for sustainable activities.
In addition, we are considering the possibility of providing services as a business for
production and logistics, such as
through the provision of manufacturingservices to brands outside the Group,
using the Group’s production factories.
Furthermore, in the medium term,
we hope to once again take on thechallenge of developing overseas markets. When doing so, we aim to shift
our business model from opening conventional physical stores, which requires a huge initial investment, toglobal business that is centered on
our online stores, which enables more
efficient business development.

The business environment of the Group is undergoing major structural changes. One critical theme supporting the business foundation of the Group is sustainability initiatives that
achieve both the solution of global environmental and social issues, and the realization ofsustainable corporate growth. We established new dedicated organizations in order tofurther advance the activities we have conducted thus far, and also established the Sustainability Committee in September 2021, with its activities being promoted by myself, as
the chairman of the committee.
In the Sustainability Committee meetings, we have held repeated discussions, identified five material issues (materiality), and developed sustainability promotion activities.
Among these, for Materiality 1, “business activities that enable coexistence with the global environment and illuminate a path to the future,” we are recycling products collected
through the Onward Green Campaign into work gloves and blankets. In cooperation with
the Japanese Red Cross Society, we have been using these items for more than 10 years
to support disaster-stricken areas and developing countries around the world. In order toeliminate wasteful production, we are also actively working to expand the scope of the
made-to-order business.

The Onward Group Sustainability Committee Organizational Structure
Board of Directors

Sustainability Committee
Chairman: President and CEO
Committee Members: Presidents and personnel responsible for sustainability of Onward
Group companies
Communicate policies and share them

ReportGeneral Meeting of Sustainability Committee
 embers of the Sustainability Committee and executives responsibleM
for core divisions participate and discuss the medium- to long-termsustainability plan and its promotion system
Monitor the progress of the annual plan for ESG issues aligned withmateriality and revise as necessaryGroup companies, operating divisions, administrative divisions
Set targets for the issues, implement measures, and manage progress

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Message from the President

Q5. What is our policy for shareholder returns?
In 2027, the Onward Group will celebrate the 100th Anniversary of its founding. We believe that it has been important for building relationships of trust with our shareholders
that, throughout our long history, we have been able to pay stable shareholder dividends
from a medium- to long-term perspective, without being influenced by short-term fluctuations in business performance.
Based on this policy, we paid dividends even in the fiscal years ended February 28, 2021
and February 28, 2022, which produced the toughest financial results since our founding.
We plan to transition to a phase in which our business performance recovers and net
profit increases, and we will continue to pay stable performance-based dividends.
Status of shareholder returns

FY02/20

FY02/21

Cash dividends per share

¥24

¥12

¥12

Payout ratio

—

—

19.0%

FY02/22

Do you have a message for our shareholders, investors, and otherQ6. stakeholders?

Over the past few years, we have produced very unfortunate financial results due to theimpact of COVID-19, in addition to enduring the pain of bold global business reforms.
However, I am confident that the results of various growth strategies will start to appear inearnest from this fiscal year onwards, which we have positioned as the fiscal year in which
we make an aggressive comeback.
In the future, our policy is to further accelerate the speed of growth of the Group, andwith the aim of efficient management of capital, conduct management that emphasizes
return on equity (ROE).
I will continue to do my best to meet the expectations of our shareholders, investors,
and other stakeholders, and I ask for your continued support in doing so.

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Our History

95

The Onward Group is celebrating its
95th anniversary since its founding in 1927.

th Anniversary

We continue to move forward, with our sights set on the future,
as we aim to become a 100-year old company.

1927 – 1940s

1950s – 1960s

1970s – 1980s

Founding

Development as a Menswear Manufacaturer

Onward Kashiyama Co., Ltd. isestablished in 1927 by its
founder Junzo Kashiyama andbegins operations as Kashiyama Trading in Osaka.

In the 1950s, Onward begins the production and sale of readymade menswear. Taking its cue from apparel manufacturing in
the United States, the Company adopts an assembly-line production system and introduces such advanced equipment as
Hoffman steam press machines. These efforts result in substantial improvements in productivity and the quality of ready-madeclothing.
Along with this success, the Company develops a businessformat for consignment transactions* between apparel companies and department stores that is now widely used in the business operations of department stores. In the 1 9 6 0s, driven by
Japan’s high economic growth, Onward grows rapidly to become a leading menswear manufacturer in Japan.

Acceleration ofOverseas Expansion

Company founder Junzo Kashiyama

In keeping a step ahead of other Japanese apparel manufacturers, during the 1970s Onward establishes subsidiaries in threeof the world’s major fashion cities: New York, Paris, and Milan,
and by the end of the 1980s, Onward had built a foundation foroverseas business at the three cities. By establishing the local
subsidiaries in a short period of time, Onward succeeded in laying the foundation of the overseas business, drawing on themost up-to-date information on the global fashion business.
In the late 1970s, Onward appointed up-and-coming designer Jean-Paul Gaultier to be an exclusive designer for its Bus
Stop line of boutiques in Paris. His first fashion show is held inParis in 1978 with the support of the Company.

*Consignment transactions
Consignment transactions are a type oftransaction in which the ownership of a
product is not transferred, nor is a salerecorded, when a product is delivered to a
department store or other retailer. Rather,
the ownership of a product is transferred
and a sale is recorded when a customer
purchases a product on display at a retailer.

Showa financial crisis–World War II

Post-war reconstruction– High economic growth

Stable economic growth–Bubble economy

Major Events

Major Events

Major Events

Westernization of women’s clothing trends (after the Great Kanto

Start of mass-production boom (1950s–)

Earthquake in 1923–)

Ready-made clothing revolution for men’s and women’s clothing (1960s–)

First oil crisis (1973)
Plaza Accord (1985)

Great Depression originating in the United States (1929–late 1930s)

Economic boom created by the Tokyo Olympic Games (1962–1964)

Enactment of Equal Employment Opportunity Act for Men and Women (1986)

World War II (1941-1945)

Japan ranked No. 2 in the world for gross national product (1968)

Emergence of prominent Japanese designers
Spread of luxury fashion

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Our History
1990s

2000 – 20102010s – Today

Launch of Core Brands

Evolution into a Global Apparel Group

Road to Sustainable Growth

The womenswear business dramatically expands in the 1990s
with the launch of core brands, beginning with Kumikyoku in
1992 and followed by Nijyusanku, ICB, and Gotairiku.
The luxury brand boom driven by Japan’s bubble economy
comes to an end in the 1990s, and consumers start to attribute
greater value to more refined and practical clothing, and they areable to find this style in Japanese brands.
Department stores begin expanding womenswear floor
spaces and emphasizing new brands from Japanese makers.
Thanks to this trend, Onward Kashiyama’s store numbers growrapidly after the launch of the new brands, and this impressive
growth forms the foundations for future advancement.

At the beginning of the century, Onward accelerated its global
strategies while maintaining its focus on the department store
channel in the domestic market. The strategies included fullscale entry into the Chinese market, establishment of a manufacturing platform in Italy, and acquisition of a prominent
European brand JOSEPH.
The transition to a holding company system is made in2007. In the years that follow, the Company continues to draw
uniquely powerful brands under its umbrella in Japan, acquiring
pet fashion pioneer Creative Yoko Co., Ltd. and Island Co., Ltd.,the maker of the trusted Grace Continental brand for discerning
women. It was at this time that Onward truly makes a new start
as a global apparel group that undertakes various types of fashion businesses all over the world.

After the global financial crisis of 2008, the landscape of the fashion business and, subsequently, the structure of the apparel supply chain undergo a drastic transformation. The emergence of
so-called fast fashion, the increase in production costs in Asia, thereorganization of domestic department stores, and the rise of
e-commerce can all be seen as indicators of this transformation.
Signaling its participation in the e-commerce field, theOnward Group cuts the ribbon for Onward Crosset, its directly
managed e-commerce website, in December 2009.
The Onward Members’ loyalty point card system, applicable to all Onward Group brands, launches in 2014.
Through this and other initiatives, the Onward Group proceeds to strengthen its customer base while accelerating its
Omni-channel retailing strategy, which merges the advantagesof online stores and physical stores.
In 2017, the Onward Group launches the KASHIYAMA
brand, a new made-to-order suit business that employs a proprietary factory innovation scheme to realize low prices andquick deliveries.
It would not be an exaggeration to say that in the fiscal
year ended February 2021, the COVID-19 pandemic dealt thehardest blow to the Onward Group’s domestic and overseas
operations since its founding. At the same time, the Group
continued to push ahead with the global business reforms to
its operations it undertook in October 2019, making steadyprogress regarding the withdrawal from unprofitable operations in Italy, the discontinuation of underperforming brands,
and the closure of domestic and overseas stores that were notturning profits. In April 2021, we formulated ONWARD VISION
2030, our medium- to long-term management vision for theperiod up to the fiscal year ending February 2031.

Burst of bubble economy– Post-bubble recession

Era of economic maturity

Fourth industrial revolution (Industry 4.0)

Major Events

Major Events

Major Events

Release of Windows 95 (1995)

Lehman Brothers bankruptcy and global financial crisis (2008)

Great East Japan Earthquake (March 2011)

Rapid spread of the Internet among the general public

Mass consolidation and reorganization of Japanese department stores

Annual inbound visitors to Japan exceed 30 million (2018)

Diversification of retail channels and emergence of specialty retailers

Growth of fast fashion

Global COVID-19 pandemic (ongoing from January 2020)

selling of private label apparel09

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Value Creation Story of the Onward GroupMan age me n t P h i los ophy
Having defined its business domain as “a world of fashion that gives refreshment and beauty to people’s lives,”
the Onward Group is committed to contributing to the society as a living culture company.
The Onward Group’s Raison D’etre

Enriching and Adding Color to People’s Lives while Caring for the PlanetSu s tai n abi li ty Man age me nt

Medium- to long-term
environmental
awareness

Management Capital

Material Issues(As of the end of February 2022)(Materiality)

Financial Capital
Exacerbation of
the climate change
problems

Total assets
Net assets
Shareholders’ equity ratio¥157.7 billion¥77.2 billion
42.4%

Materiality 1
Business activities that enablecoexistence with the global environment
and illuminate a path to the future

Rising resource
consumption level

58 companies
33 companies
24 companies

Transform the Apparel Business Segment Business Model

Values Provided
Achieve direct and two-way
communication between customers
and employees to co-create value
provided to customers

Accelerate Growth of the Lifestyle Business Segment
Strengthen Business-to-Business Operations

Business CapitalN umber of group companies(including the Company)
Apparel Business
Lifestyle Business

O N WAR D VIS IO N 2 0 3 0
Five Strategies

Materiality 2
Growing together with partners

Evolve into a Company Where Diverse and Unique
Personnel Can Exhibit Their Strengths
Promote Sustainable Management That Pursues
Coexistence with the Environment

Desired Image
Evolving into a Customer-CentricCompany, Making the Best Use of
Employees’ Diverse Strengths

Intellectual Capital

Fair management with integrity

Sales
Onward Crosset and OMO stores

MarketingOnward Members

Corporate GovernanceManagement/Administration/
FinanceOrganization and HRne m b e rslMateriality 5

Product planning, production,and distribution

io

are

M

re

ut

pp

O

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ri b

A

ts

R

/D

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an ce

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at i

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B2Be
Mana gign

e rs /

mi

ni

OM

H

me

Pat t e r n m a ke rs

n t/

/St

Ad

aff

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s

Group Platforms (Systems)yChanges in values
and consumer
behavior towardfashionInitiatives to reduce CO2 emissions at
production sites
Initiatives to recover and reuse products
Recovered approximately 6.05 million itemsof clothing (cumulative total from FY02/10
to FY02/22)
Eliminate wasteful production

Workplace where diverse
individuals are engaged

ro ductio n/ Dist

Customers

St

Natural Capital

LifestyleBusiness
Segmentg/Pn/human rights
problems

Materiality 4

ApparelBusiness
Segment

io

Exacerbation of

Improvement of traceability
Initiatives to address human rights issues at
production sites

nin

at

Social Capital

an

niz

Number of group employees
6,377
Promoting the activities of diverse personnel
Diversification of workstyles
Ratio of female employees
81.0%Ratio of female managers(section manager and above)
27.2%

Pl

O rg aAdvances intechnology

Human Capital

Materiality 3
Workstyles that enhance and add
color to employees’ lifestyle as wellleand aging society

Business Model
We will grow the Lifestyle Business segment as
another core business of the Group, alongside theApparel Business segment

st ypopulation,
declining birthrate,

Trademark rights
Patents
Development of OMO stores
Digitalization of the supply chain

Li fe

Shrinking

ar
/P

tn

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Onward at a Glance
The Onward Group is the apparel manufacturer and retailer established in 1927 that pioneered the manufacture and sale of readymade clothing in Japan and laid the foundation of the industry. Today, we continue to be recognized as a leading company in the industry specializing in high-value-added products with outstanding quality, and we are more than able to compete in apparel markets
around the world. Our business model encompasses all stages of the apparel value chain, including planning, design, production, andsales. The Onward Group also prides itself on its lineup of products and services that interconnect with various areas of people’s lives.
This fashion-oriented lineup includes men’s, women’s, and children’s clothing as well as uniforms in the apparel business, dance wear,
pet-fashion items, gift catalogs, and others in the lifestyle business.

Net Sales

168.5

¥

Operating Profit

billionKey Financial Data

–1.0

¥

Cash Dividends per ShareLifestyleBusiness

Sales Breakdown
by Japan/Overseas*1
Overseas

77.7%

Founding

89.0%
Japan

P08

31.3%

38.7%

SCs andOther
Channels*3

P24

Number of Group Companies

years

Department
Stores30.0%

ApparelBusiness
Segment Information

Sales Breakdown
by Domestic Sales Channel*2
E-Commerce

11.0%

22.3%

Our History

12¥

billion

P44

Sales Breakdown
by Business Segment*1

95

Apparel Business58

companies

Our Network

Note: Figures are results for the fiscal year ended February 28, 2022 or as of the end of the fiscal year
*1 This ratio is calculated by simply adding up figures before inter-company eliminations.
*2 This targets e-commerce business companies.
*3 SC stands for shopping center.

P52

Number of Group Employees

6,377

Lifestyle Business

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Su stain ab le Man age m e n t

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Sustainability Vision and Promotion System
Sustainability Vision

Sustainability Promotion System
Sustainability Committee

Enriching and adding color to people’s lives
while caring for the planet, the Onward
Group reaches out to future generations
through the universal language of fashion.

The Onward Group’s Sustainability Committee, headed by the
President and CEO of Onward Holdings, includes the presidents
and personnel responsible for sustainability of Onward Group
companies. The Sustainability Committee discusses sustainability risks and opportunities.

The Onward Group Sustainability Committee
Organizational Structure
Board of Directors

Sustainability Committee
Chairman: President and CEO
Committee Members: Presidents and personnel responsible for sustainabilityof Onward Group companies

The Onward Group established the Sustainability Committee in September 2021 to promote concrete sustainability initiatives.
The Sustainability Committee will take the lead in formulating the action plan and KPIs (key performance indicators). Enriching
and adding color to people’s lives while caring for the planet, the Onward Group reaches out to future generations through the univer-

Communicate policies and share them

Reportsal language of fashion by promoting sustainable management.

Promote Sustainable Management That Pursues
Coexistence with the Environment

Evolve into a Company Where Diverse and Unique
Personnel Can Exhibit Their Strengths

The Onward Group has been promoting recovery, recycling, and

The Onward Group realizes that in order to respond to diversify-

reuse of its products through the Onward Green Campaign foring customer needs and values and contribute to society, theover 10 years. We are also working actively to expand the scope

Onward Group must be an enterprise where diverse and uniqueof the made-to-order business that eliminates wasteful produc-

personnel are encouraged to exhibit their strengths. By promot-

tion. From the viewpoint of improving traceability, the Japan Ap-

ing our workstyle reform project and enriching various person-parel Quality Center, a general incorporated association in thenel systems, we are endeavoring to cultivate a workplace

Onward Group, conducts factory audits in Japan and overseas.

environment where diverse employees can flourish and achieve

By embracing new challenges while stepping up these initiatives, we are promoting sustainable management that pursues coexistence with the global environment.

work-life synergy.

General Meeting of Sustainability CommitteeM embers of the Sustainability Committee and executives
responsible for core divisions participate and discuss themedium- to long-term sustainability plan and its promotion
systemM onitor the progress of the annual plan for ESG issuesaligned with materiality and revise as necessaryGroup companies, operating divisions, administrative divisions

Set targets for the issues, implement measures, and manage progress

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Materiality of the Onward Group
Materiality 1

Business activities thatenable coexistence withthe global environment andilluminate a path to the
futureFive Material Issues
The Onward Group identified five material issues (materiality) in accordance with the mission statement, “Enriching and adding color to people’s lives while caring for the planet.”
The Group is promoting sustainable management that pursues coexistence with the global environment by identifying “1. Business activities that enable coexistence with the global environment andilluminate a path to the future ” and “2. Growing together with partners” as material issues relatedMateriality 5

Fair
managementwith integrity

Materiality 2

Enriching and addingcolor to people’s lives
while caring for the planet,

Growing
together withpartners

the Onward Group reaches

to the Group’s business activities, including manufacturing.

out to future generations“3. Workstyles that enhance and add color to employees’ lifestyle as well” and “4. Workplacethrough the universal

where diverse individuals are engaged” are identified as material issues concerning our earnest de-language of fashion.

sire to be an enterprise where diverse and unique personnel can exhibit their strengths. We are
pursuing workstyle reform initiatives and cultivating a working environment where diverse employees can flourish.
From the viewpoint of corporate governance, we identified “5. Fair management with integrity” as amaterial issue and are striving to cultivate a corporate culture supporting the Onward Group’s concerted efforts to be an indispensable enterprise earning the trust of society.

Materiality 4

Workplace where
diverse individuals
are engaged

Materiality 3

Workstyles thatenhance and add
color to employees’
lifestyle as well

Materiality Identification Process

Identification and organizing of(environmental, social, and economic)
issuesLonglisting1

Prioritization of issues andcheck of validity

2

Identification of material issues
constituting the core of corporate
activities at executive meetings

3

Formulation of action plans andsetting of quantitative targets
Proactive engagement

4

Referring to the GRI (Global Reporting Initiative)

We identified and organized the customers’ and otherThrough discussion at the Sustainability

We are formulating action plans in accordanceStandards, the SASB (Sustainability Accounting

stakeholders’ expectations toward the Onward Groupand priority issues to be addressed, as well as theCommittee chaired by the President and CEO ofwith the Group’s material issues and setting

Onward Holdings and with external experts, fivemedium- to long-term quantitative targets.

material issues were identified.

Through proactive engagement in a collaborative

Standards Board) Standards, SDGs, and evaluation itemsof ESG rating agencies, we identified 63 items
concerning those environmental, social, and economic
issues that are considered to have major impacts.

impacts on them. Reflecting the opinions of external
experts, and those responsible for various divisions of
the Onward Group, we selected 17 items concerning
the issues and checked their validity.

endeavor with stakeholders, we intend to achievethese targets.

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Materiality of the Onward Group
Materiality 1

Business activities that enable coexistence with the global environment and illuminate a path to the future

We aim to contribute to the realization of a low-carbon, recycling-based society in order topass on a rich and vivid planet to future generations.

Priority SDGs

We are emphasizing environmentally friendly manufacturing, through expansion of made-to-order production and sustainableprocurement. To realize a recycling-based society (circular economy), we promote recovery, recycling, and reuse of our products while
also stepping up the reduction and recycling of plastic waste. Each of us at Onward is taking measures to mitigate climate change by
promoting business activities emphasizing coexistence with the global environment.

Promoting a Circular Economy
In addition to the Onward Green Campaign (collection of used Onward Group apparel items for recycling and reuse) launched in 2009 with the aim of establishing an apparel circulation system, theOnward Group is also vigorously addressing plastic waste reduction and recycling. Promoting business activities that pursue coexistence with the global environment, we aim to realize a recycling-based society.

Onward Green Campaign Designed to Create an Apparel Circulation System
Onward Kashiyama launched the Onward Green Campaign in 2009 with the objective of encouraging
the circulation of apparel to promote the efficient utilization of limited resources and to ensure our
precious environment still exists for future generations to enjoy. Through this campaign, we promote
an apparel circulation system in which we collect used Onward Group apparel items from customers
so that they can be reused or recycled to the greatest degree possible.
Collected clothing items are recycled as RPF or thread is harvested from them to produce blankets and work gloves. The blankets are provided to disaster-affected areas in Japan and abroad and todeveloping countries in cooperation with the Japanese Red Cross Society. Work gloves are distributedfor various purposes, such as for disaster relief, forest preservation, and awareness-raising activities. In
addition, collected clothing items that are in good condition will be cleaned and sold at Onward Reuse Park in Kichijoji, Tokyo, which is our concept store to communicate the Group’s environmental initiatives, and online at charity prices with the proceeds used to fund sustainable initiatives.
Since starting in 2009, a total of 1,149,508 customers have donated 6,057,819 items of clothing,of which we recycled 82% and reused 18%.

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Materiality of the Onward Group
Materiality 1

Business activities that enable coexistence with the global environment and illuminate a path to the future

Environmentally Friendly Manufacturing
The Onward Group is promoting manufacturing and the online merges with offline-style services, or
OMO services that achieve both environmental friendliness and enhanced customer satisfaction
and convenience. Our initiatives include expansion of made-to-order production, efficient merchandising by eliminating barriers between physical stores and e-commerce through the integration of
inventory data, and development of sustainable products.

High-Efficiency Distribution System• In our made-to-order businesses, we take wasteful warehouses out of the equation and deliverproducts directly from factories to customers.
• We use PACK-RUNNER compressed and sealed packages to help substantially save space inlogistics vehicles.
• We have also changed our delivery packages for suits from cardboard boxes to paper packages. This approach makes our packages even more environmentally friendly and compact.

PACK-RUNNER

Smart Factory Kashiyama Dalian (KASHIYAMA, a made-to-order suits brand)
Drastic Reforms to All Manufacturing Processes to Eliminate Wasteful Production• Smart factories link data from orders with computer-aided manufacturing processes and use
automatic cutting machines to cut cloth more precisely and thereby reduce the portions ofcloth that cannot be used. In addition, these factories utilize automatic ordering systems for incidental items (buttons, lining, etc.) to ensure appropriate inventory levels.
• We manage products with radio frequency identification (RFID)* tags and hanger systems while
using tablets for process management to swiftly produce items customized based on custom-

Paper delivery package

Environmentally friendly, compact package

Other Environmental and Workstyle Initiatives• The Onward Group is advancing paperless process initiatives to reduce the use of paper. For
example, we have abolished paper order slips, instead choosing to process orders via tabletsand send order information in data form. Similarly, we transitioned from paper to digital customer records.
• We have also replaced certain lighting fixtures with LED lighting to conserve energy.
• These efforts have helped to receive CSR (Corporate Social Responsibility) and QC (Quality
Control) certification from the Japan Apparel Quality Center.

ers’ requests.
*RFID is an automatic recognition technology that uses radio waves to read and write information on IC tags without contact.

Fabric automation management

Management by RFID and hanger system Sewing of customized orders quickly andcarefully

LED lighting on the sewing line

Cafeteria, a place for employees to relax

Cafeteria

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Materiality of the Onward Group
Materiality 2

Growing together with partners

We cultivate long-term relationships rooted in trust with suppliers, local communities and other

Priority SDGs

partners, emphasizing coexistence with them and the pursuit of mutually beneficial growth.
Each one of us will comply with the Onward Group Guidelines for Action and conduct ethical business activities. We emphasize ensuring human rights and occupational health and safety throughout the supply chain in Japan and overseas, sharing values with ourbusiness partners. Moreover, through co-creation of value with communities and social contribution activities, we aim to be an enterprise that grows together with them.

Co-prosperity with Suppliers
At the Onward Group, we share values with our partners in the supply chain. We aim to establish
long-term relationships rooted in trust with our partners and aspire to be an enterprise that cangrow together with them.

CSR audits should not be a means of terminating transactions with factories that do not satisfy
the standards. Rather, we think brands have a social responsibility to point out problems that could develop to human rights issues and help factory management understand the significance of the issues
and raise their performance to a higher level. JAQC staff are always present together with local auditors
when factory audits are conducted. We explain the purpose of the audit and the reasons for the requirements to the management of the factory being audited. Moreover, in light of the factory's unique
circumstances, we provide guidance for improvement action plans, as we conduct “guidance type audits.” If the prescribed standards have been met, we issue a certificate of compliance to the factory.
Japan Apparel Quality Center

P23

Co-prosperity with Communities
The Onward Group aims to be an enterprise that can grow together with various communities
through co-creation with local communities, social contribution activities, and cultural, artistic andeducational initiatives.
Co-creation with local communities
CRAHUG, a New Direct-to-Consumer Business, LaunchedRespect for Human Rights and Development of Working Environments of Sewing Factories
The Onward Group operates the Japan Apparel Quality Center (JAQC) to enable other companies
and organizations in the apparel fashion industry to utilize the expertise and insights on quality
control that the Onward Group has cultivated over the years. Since its establishment in 2017, JAQC
has been offering services, such as factory audits, QMD*, testing & analysis, and repair, tocompanies inside and outside the Onward Group.
*QMD is an acronym for “Quality Merchandising.” It means from the product planning stage, we provide total support for quality, including
material color fastness and physical performance checks, to appearance checks through product testing of sample products, tocommercialization.

Factory audits launched in 2007
Since 2007, we have been obligated to conduct a “CSR audit” of our production factories, to satisfy
the requirements of international brands with which we had license agreements.

Onward Digital Lab Co., Ltd., which is responsible for the Group’s digital strategies, has launched
CRAHUG, a new business for the development and direct sales of “factory brand” (original brands
established by factories) products and original products from producers and factories from across thecountry, with the aim of supporting production in Japan.
The word “CRAHUG” is a combination of “craftsman,” “life,” and “hug.” Under the CRAHUG scheme,
we offer sales support to producers and factories
nationwide that aspire to build sustainable business models
through direct sales and by becoming independent basedon a collaboration plan selected from two options. The aim
is to enable factories to have a stable business foundation
through sales of original products directly to consumers. In
the future, cross-border sales are envisaged to communicate
the expertise of Japanese manufacturing and theattractiveness of Japanese products.

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Materiality of the Onward Group
Materiality 3

Workstyles that enhance and add color to employees’ lifestyle as well

We aim to achieve work-life synergy by cultivating a working environment where every
employee can work cheerfully, freely, and vigorously.

Priority SDGs

We are implementing the Work Style Design Project for workstyle reform and enriching personnel systems so that all employees canbring their skills, capabilities, and new ideas into full play, thus enhancing and adding color to their lives. We will strive to achieve
work-life synergy by enabling employees to enhance both work and private life while meeting customers’ expectations andcontributing to society.

Designing Workstyles
The Onward Group is executing the Work Style Design Project to enhance operational efficiency andproductivity by achieving work-life balance. This workstyle reform project encourages employees totake the initiative in changing the way they work.
Work-life synergy through enhancement of both work and private life is having a positive impact
on business.

Work Style Design Project for Workstyle Reform
Online Discussion Event: Management Explains Onward’s Challenges and Achievements
Following about two years of initiatives for Work Style Design, we have achieved a 65% reduction
in overtime work, a 3-fold increase in the rate of men taking childcare leave, and an increase of 5days off taken (increase of 18 days off taken for managers). Following the advice of Outside Director Yoshie Komuro, the President himself participated in Kaeru Kaigi meetings, where he realizedthat the sense of distance with the employees on site had changed. Because employees can enjoy
their lives, they can create synergies with work that makes the most of their individual characteristics and achieve better results in their work. We are encouraging Work Style Design that shifts fromwork-life balance to work-life synergy.

Our initiatives
Kaeru Kaigi meetings
Each team that usually works together holds a weekly meeting to consider what team members
should do to improve their workstyles. Kaeru Kaigi meetings go beyond simply facilitating reports
on work progress to promote self-driven processes of trial and error by all members for the purpose of transforming workstyles and achieving their goals for work. Most important, these meetings aim to be enjoyable for all attendees. For this reason, we are promoting Kaeru Kaigi meetings
on a Companywide basis while ensuring that these meetings have an atmosphere conducive to
voicing frank opinions regardless of rank or career history.

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Materiality of the Onward Group
Materiality 4

Workplace where diverse individuals are engaged

We welcome diversity and aim to be an enterprise where diverse and unique personnel canPriority SDGs

exhibit their strengths.
The Onward Group realizes that in order to respond to diversifying customer needs and values and contribute to society, the Onward
Group must be an enterprise where diverse and unique personnel are encouraged to exhibit their strengths. Welcoming each person’s
unique qualities and capabilities, we are cultivating an environment that can facilitate innovation.

Promotion to Support the Balance between Work and Childcare
Aspiring to be an enterprise where diverse and unique personnel can exhibit their strengths, theOnward Group supports employees’ efforts to achieve a good balance between work and childcare.
As a result, almost all female employees take childcare leave. Among eligible female employees, theproportion taking childcare leave averaged 99.0% over the last three years. Going forward, we aim
to increase this proportion to 100% while also achieving 100% for eligible male employees.

Initiatives to Facilitate Taking of Childcare Leave by Male Employees
In the fiscal year ended February 2022, we conducted management training to encourage male
employees to take childcare leave. We also held “Pre-Dad/Mom Seminars” for male employees
whose spouse or partner is expecting a child and female employees who are expecting a child, on
the desirability of childcare leave for men and childcare for couples. We also prepared the Guidebook for Supporting Balance Between Work and Childcare among other measures. As a result, theratio of men taking childcare leave at Onward Kashiyama was 27.3%, which greatly exceeded thenational average of 12.65% in the fiscal year ended February 2021, and the average number ofleave days taken was 141 days.
Proportion taking childcare leave
FY02/19 Result

FY02/20 Result

FY02/21 Result

Male

7.7%

10.5%

20.0%

FY02/22 Result
27.3%

Female100.0%

100.0%

97.0%

100.0%

Total

59.3%

65.3%

79.1%

75.0%

*Calculated based on the personnel within the scope of Work Style Design (office workers of Onward Kashiyama Co., Ltd.)

Diversity Management Initiatives

Materiality 5

P20

Fair management with integrity

We are cultivating a corporate culture whose hallmarks are integrity and fairness, convincedthat these attributes are essential for an enterprise in order to continue to be indispensableand earn the trust of society.
To put in practice fair management with integrity, we are making a concerted effort to enhance the effectiveness of corporate
governance and establish a sound management foundation.

Priority SDGs

Corporate Governance

P37

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Diversity Management Initiatives

Evolution into a Company Where Diverse andUnique Personnel Can
Promote the
Exhibit Their Strengths
activities of diverse
personnel

To evolve into a customer-centric company
and make the best use of its employees’
diverse strengths, Onward is endeavoring totrain in-house personnel who will spearhead change while ramping up the recruitment of personnel externally in order topromote organizational and human resource
platform reform. We thereby aim to become a company where diverse and uniquepersonnel can exhibit their strengths.

Achieve a flatorganization

Diversify
workstyles

Organizationaland HR platform
reformTransfer authority
to the front lines

Provide fair,
multifaceted
evaluations andperformance-

Materiality 3

Offer multiple
career paths andfocus on personnel
development

The Onward Group is executing the Work Style Design Project to enhance operational efficiency andto improve productivity by achieving work-life balance. This workstyle reform project encourages employees to take the initiative in changing the way they work.
Until undertaking the Work Style Design, employees were busy with meetings and document
preparation, and in some departments, long overtime hours had become a chronic issue. While we hadtaken measures such as setting building closing times as physical restrictions, this did not lead to a fundamental improvement in business operations, and some members sometimes took their work homewith them. In addition, there were departments where leaders spoke often at meetings, but the atmosphere made it difficult for members to speak up.
We started this initiative not with the purpose of merely reducing overtime work, increasing leavedays taken, or improving work efficiency. Rather, we would like to use the time saved by making thesechanges in order to create opportunities to give shape to new ideas and make innovations.
Work Style Design Project Goal
Work styles conscious of productivity
Enable members to work more efficiently by proactively promoting work stylereforms through Kaeru Kaigi, zand establishing systems.

Realizing work-life balance
Enriching privacy in one’s free time saved by the project

based
compensation

Workstyles that enhance and add color to
P18
employees’ lifestyle as well

Empowerment of Female Employees
The apparel business requires fresh ideas and innovative value propositions. We believe that suchideas and propositions are best created when all employees respect and accept the differences
between individuals and are able to exercise their skills to the fullest.
We have established the Diversity Promotion Section within our human resource division in order to foster a workplace environment in which all employees can feel motivated and deliver theirbest performance. This section is responsible for revising prior work processes and implementing
ongoing workstyle reforms for the purpose of improving productivity.

Ratio of Female Employees

Start of the Work Style Design Project

Ratio of Female AssistantManagers

81.0% asRatio of Female Managers(Section Manager and Above)

54.0% asof the end of
FY02/22

27.2% asof the end of
FY02/22

79.9% as of

54.2% as ofthe end of
FY02/21the end of
FY02/21of the end of
FY02/22

24.2% as ofthe end of
FY02/21

Creating work-life synergy
A fulfilling private life and work influence each other, and create synergy

Work Style Design Project Goal
Organizations with high psychological safety
Creating an environment where everyone can easily express their opinions at Kaeru Kaigi meetings

Creating innovation
Proactively generate new ideas, leading to the buds of new businesses
Changes as a Result of the Work Style Design Project
FY02/19 Result

FY02/20 Result

FY02/21 Result

Overtime hours*1

17.7 hours

18.2 hours

6.3 hours

FY02/22 Result
6.8 hours

Days of leave taken*1

119.0 days

125.1 days

124.0 days

124.9 days

Rate of taking My Golden Week*2

—

—

39.4%

39.0%

*1 Calculated based on the personnel within the scope of Work Style Design (office workers of Onward Kashiyama Co., Ltd.)(All figures are for Onward Kashiyama)*2 System to encourage employees to take 10 consecutive days off

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Diversity Management Initiatives
Work Style Design Initiatives: Holding Kaeru Kaigi Meetings
We hold these meetings to consider what team members should do to improve their workstyles,
and members meet with the teams whom they usually work with. Each team holds meetings oncea week, or once every other week.
At Kaeru Kaigi meetings, each member raises matters that they consider to be issues, no matter how small they may be, on the meeting agenda. By searching for the root cause, no matter
what the issue, members discovered that there were unexpected things which they could changeon their own. Therefore, we started by saying “Let us begin with what we can change ourselves.”
Building up these small efforts leads members to design their own work styles.
Psychological safety* is critical to holding Kaeru Kaigi meetings. When psychological safety islow, people who tend to speak a lot will speak the most, inhibiting the free and open exchange of
opinions. Specifically, psychological safety is about simply “sharing your opinion no matter what itis, not rejecting opinions that are shared, but giving a reaction.” Through Kaeru Kaigi meetings, wehave fostered a climate of free and open discussion, and there is palpable growth into teams inwhich diverse personnel can exhibit their strengths.

We became morecooperative in orderto make each other’smore efficient andtake leave days.
This created a strong

felt myself growing because I

desire to produce results

served as a facilitator for thein a limited amount of

first time in Kaeru Kaigitime.

*A state in which there is no personal risk within teams, but rather sharing a safe space among members.

Examples of Discussion at Kaeru Kaigi Meetings

Case Study 1

Holding monthly meetings where employees can talk about anything

By sharing our work
problems, we were able

in individual chats, but there was a lack of sharing about what was happening as a whole.

to take an attitude ofResult: 	By spending more time on ice breaking, we increased the number of reports, notifications, andconsultations, thereby decreasing wasteful actions and improving work efficiency.

Case Study 2

Things thatchanged throughKaeru Kaigi
meetings.
Opinions frommembers on site.

cooperation andcompromise, rather thancriticizing each other.

meetings.

Members began toactively express theirtechniques, stances, andIssue: 	Employees were doing a lot of work from home, and there was a high volume of communication
Action: 	We held monthly meetings where employees can talk about anything.

While I do not usually serve
as a facilitator at meetings, I

opinions. Lively
discussions were held.
Little by little, wecreated an attitude
that enabled us to act
proactively.

Task inventory

Issue: 	Tasks conducted by individual employees cannot be seen, so they get stuck with their work,and cannot respond to sudden changes.
Action: 	Take inventory of tasks, always asking “Is this task really necessary?” and “What is the purposeof this task?”
Result: 	By uncovering unnecessary tasks, we were able to create time for actions aimed at achieving
the team’s ideal form.

Case Study 3
Issue:

Passing on technology

Knowledge and skills related to making apparel become personal efforts.

Action: 	Skilled technicians replace paper patterns with data for sheeting on computers, then holdlectures on how to create patterns while inputting information about seams to be sewn and put
them on virtual bodies.
Result: This led to improved brand quality.

Diversity Promotion Section, Human Resource Division

Chiemi Otake
Since starting Work Style Design, we have promoted this initiative on the two wheels of “cultivating corporate culture” and “reforming systems.” As a result of conducting various training and
Kaeru Kaigi meetings, we are making progress toward changing
awareness of workstyles (cultivating corporate culture). As forovertime hours and days off taken, numerical results show that
there will be no going back to before the COVID-19 pandemic,
and I felt that we have been realizing work-life balance for employees. In this fiscal year, we will introduce new systems and revise old systems, with the aim of becoming a company where
diverse human resources can exhibit their strengths.

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Improvement of Traceability / Respecting Human Rights and Developing the Working Environment
Onward-Approved Factory System
Society’s expectations for companies to exercise social responsibility are rising, expanding the scope of risks that could present problems
in business operations. These risks include environmental pollution in countries and regions from which products are procured as well as
human rights violations at factories.
The Onward Group seeks to combat these risks through the Onward-Approved Factory System launched in the fiscal year ended February
2016. Ongoing factory audits are conducted through this system. Should a need for improvement be found, the applicable factory will be
provided with a list of issues to be remedied along with guidance for implementing improvements. By implementing this system, we willpractice CSR procurement to contribute to the sustainable growth of society.

Goal of the Onward-Approved Factory System

Audit Targets

The Onward-Approved Factory System was instituted with the goal of developing a manufacturing
platform that can continuously supply impeccable-quality products.
The Onward Group is well aware of how important safe and appropriate work environments
at production sites are to improving employee retention rates and is thereby securing manufacturing techniques and ensuring stable product quality. Through the Onward-Approved Factory System,
we encourage partner factories to reinforce their management systems with regard to corporatesocial responsibility (CSR) and to quality control (QC). We therefore support factories exhibiting excellence in achieving sustainable growth.

In the fiscal year ended February 2016, the Onward Group introduced the Onward-Approved Factory
System, which is used when performing audits of sewing factories.
To receive certification under the Onward-Approved Factory System, factories must pass CSR
and quality control audits conducted by JAQC.

Audit Methods
Audits related to CSR are conducted in accordance with Onward Holdings’ proprietary Suppliers’
Code of Conduct, which is based on international standards. Actual audits are entrusted to local audit firms, but representatives from the Japan Apparel Quality Center (JAQC) are always present when
audits are conducted. We thereby endeavor to help ensure appropriate auditing based on the current
business environment and to develop the understanding necessary for us to exercise our responsibility as the order placer to support factories in carrying out any improvements that need to be made.
Audits related to QC are conducted directly by representatives from JAQC. The results of audits
and any compliance findings are compiled into audit reports, and the results of both CSR and QC audits are provided to the factory. If no serious compliance findings are discovered through the audit, acertificate of compliance is issued that is valid for two years. If improvements are deemed necessary,
feedback is supplied with regard to the areas requiring improvements and guidance for action plans
is provided by JAQC. The factory is then re-audited after a period of one year.

JAQC audit results (total number of audits including Japan and overseas)
Audits started in the fiscal year ended February 2016, and the pass rate has increased year by year.
Our goal is to conduct guidance type audits, in which we do not terminate transactions withfactories that do not satisfy the standards, but instead point out problems and help factory
management understand the significance of the issues. We then take into consideration thefactory’s unique circumstances, and present specific methods such as guidance for improvement
action plans.
(*The table below shows the number of audits by year, not the total number of factories.)

Number of
Factories Audited

Pass

Conditional
Pass*2Fail

FY02/17

20

9

45%

7

35%

4

20%

FY02/18

49

17

35%

27

55%

5

10%

FY02/19

118

52

44%

52

44%

14

12%

FY02/20

173

81

47%

80

46%

12

7%

FY02/21*1

37

10

27%

24

65%

3

8%

FY02/22*1

56

9

16%

39

70%

8

14%

Total

453

178 39% 229 51%

46

10%

*1 F
 or overseas factories in FY02/21 and FY02/22, CSR audits wereconducted only by local auditors.
*2 A
 conditional pass is a pass granted on the premise of prompt correction
when nonconformities are found in relatively important elements, including
working hours, wages, and occupational safety. In the case of a conditionalpass, a correctional audit will be conducted to confirm the status ofcorrections after 1 year.

Certificate of Compliance

AuditsPass

Conditional pass

Fail

(Cases)

173
12
80

118
14
52
81

49
20

27
4
7

17

56
5

52

37
24

3

8
39

10
9
9
FY02/17 FY02/18 FY02/19 FY02/20 FY02/21 FY02/22

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Improvement of Traceability / Respecting Human Rights and Developing the Working Environment
Japan Apparel Quality Center“Japanese quality,” cultivated to satisfy the most eagle-eyed customers, is renowned worldwide for
its attention to detail and we believe it is a unique aspect of Japanese culture with global appeal.
The Japan Apparel Quality Center (JAQC) was established in March 2017 as a spin-off from its predecessor, the quality control department of Onward Kashiyama, with the purpose of contributing
to the development of the entire apparel industry by enabling other companies and organizationsin the apparel fashion industry to utilize the expertise and insights on quality control that the Onward Group has cultivated over many years.
Our social mission is to help offer safe and reliable “Japan quality” products to a wide range ofcustomers.

Business Activities of Japan Apparel Quality Center
JAQC provides its audit requirements and decision standards to the Japan Apparel-Fashion Industry Council, a domestic apparel industry organization, so that its accumulated factory audit expertise over many years can be utilized throughout the industry. JAQC also offers advisory and audit
proxy services for apparel and textile trading companies.
Furthermore, JAQC provides QMD (quality merchandising), a comprehensive support for quality from the product planning phase, checking the color fastness and physical performance of materials, and checking the appearance by sample product testing, through to commercialization.
JAQC also offers advice on proper care labeling in compliance with laws and regulations.
Follow-ups after the sale of products is also an important corporate responsibility. Customer
feedback leads to quality improvement in the future. JAQC investigates and verifies the items thatare requested to test and analyze from various perspectives to find the causes of any detectedphenomena of interest.
In addition to sewing machines, press machines, and other sewing equipment, JAQC has various repair facilities at its premises, and the dedicated staff respond to repair needs meticulously
and promptly. In June 2022, JAQC opened Shibaura Repair Workshop as a business for corporations, where the company mend and repair apparel, remove stains, do pressing, and recycle products. By developing the renovation business, we will contribute to sustainability and environmental
conservation in the apparel and fashion industry.

Initiatives to Respect Human Rights and Working Environments of Sewing Factories
In 2007, the company’s predecessor Onward Kashiyama became obligated to conduct CSR audits of
its production factories, at the behest of international brands with which it had licensing agreements.
When we started conducting CSR audits to satisfy the requirements of international brands, there
were many international brands that had concerns about child labor, and we faced issues such as
employees not being paid the minimum wage stipulated by law, or not being paid adequately forovertime work. Wages were improved as a result of guidance provided after audits. However, in termsof the working environment, some factories lacked fire extinguishing equipment, and were found lacking in terms of sanitation, in the facilities such as cafeterias, toilets, and employee dormitories.

CSR audits should not be a means of terminating transactions with factories that do not satisfy
the standards. Rather, we think brands have a social responsibility to point out problems that could
develop to human rights issues and help factory management understand the significance of the issues and raise their performance to a higher level. We are always present together with local auditors when factory audits are conducted. We explain the purpose of the audit and the reasons forthe requirements to the management of the factory being audited. Moreover, in light of the factory’s
unique circumstances, we provide guidance for improvement action plans, as we conduct audits. If
the prescribed standards have been met, we issue a certificate of compliance to the factory. We
also conduct quality control (QC) audits at the same time.
Suppliers’ Code of Conduct Items

A

B

Legal complianceand management
Juvenile
workforces

C

Forced labor

D

Wages,
allowances, andbenefits

Business Partners of Onward shall comply with all relevant local laws and regulations.
Furthermore, Business Partners shall comply with all relevant legal requirements and respect thelegal and moral rights of their employees. At the same time, in order to comply with legal requirements, management systems for maintaining respective documents have to be established.
Business Partners of Onward shall not employ minors younger than the local legal minimum
working age, or age 15. This code is applicable to all facilities of Business Partners.
Business Partners of Onward, in any part of their business, shall not associate with business
partners who utilize captivity or forced labor. Additionally, Business Partners of Onward shallnot associate with business partners who violate the above.
Business Partners of Onward shall comply with all laws and regulations on local wages, hours
of work, and allowances. Fundamental policy on wages and allowances shall comply with local laws, regulations and standards, while equally satisfying international requirements.
Onward will not associate with any Business Partner who violates local laws and regulations orindustry common practices.

E

Harassment andabuse

Business Partners of Onward shall not utilize any form of physical or psychological coercion or
retribution to workers. Furthermore, Business Partners of Onward shall not associate with business partners who violate the above.

F

Work hours

Business Partners of Onward shall comply with all legal requirements regarding work hour issues and abide by all local laws.

G

Nondiscrimination

Business Partners of Onward shall not discriminate in employment or recruitment on the basisof age, nationality, race, color, gender, religion, or any other factor. Business Partners of Onward
shall not associate with business partners who partake in any form of discrimination.

H

Health and safety

Business Partners of Onward shall provide a safe and healthy work environment for workers.
Additionally, they shall ensure not to expose workers to an unsanitary and hazardous workplace environment.

I

Free association

Business Partners of Onward shall guarantee the freedom of unions and workers who wish tojoin unions in accordance with local requirements.

J

K

Sub-contractors
and homeworkers
Environmental
practices

Business Partners of Onward shall require all entities to which they outsource some or all of
the duties with which they have been entrusted to comply with the Suppliers’ Code of Conduct and shall inform Onward of such outsourcing.
Business Partners of Onward shall have basic awareness of environmental protection. Business shall be conducted in accordance with local and internationally recognized environmental practices.

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Segment Information

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Key Financial DataPRINT

S e g m e n t In f o r m atio n

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Business Segment Introductions (Summaries) Fiscal Year Ended February 28, 2022
Sales Breakdown
by Business Segment*1
LifestyleBusiness

Sales Breakdown
by Japan/Overseas*1

E-Commerce

Overseas

11.0%

22.3%
77.7%

Japan

Sales by Japan/Overseas*4

A ppa re l B u s i n e s s

Department
Stores

30.0%

89.0%
ApparelBusiness

Sales by Business Segment*4

Sales Breakdown
by Domestic Sales Channel*2, *3

31.3%

38.7%

Shopping
Centers
and Other
Channels

Sales by Domestic Sales Channel*4

Apparel Business¥138,354 million(Total of 33 companies)
Onward Kashiyama+
Onward Holdings
Onward Trading¥91,395 million

Department Stores
Domestic Sales¥158,421 million¥14,760 million

Shopping Centers¥5,753 million

Islandand Other Channels¥52,632 million

Lifestyle Business

39,655¥
million(Total of 24 companies)
Chacott¥8,311 million

Creative Yoko

¥5,194 million

Yamato¥42,630 million

Overseas Sales¥19,588 million¥20,326 million*1 Ratios are calculated by simply adding up figures before inter-company eliminations.
*2 This targets e-commerce business companies.
*3 SC stands for shopping center.
*4 Figures are simple total figures before inter-company eliminations.

E-Commerce¥40,897 million

L i fe s t y l e B u s i n e s s

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Apparel Business

Overview and Financial Results in FY02/22
The Apparel Business segment, which operates the principal business of the Onward Group, comprises 33 operating companies and generates 77.7% of the Company’s consolidated net sales. This
segment primarily performs the planning, production, and sale of textile products. The operations of
this segment are divided into the domestic apparel business, which includes core operating company Onward Kashiyama, Co., Ltd., and the overseas apparel business, a global business developed inregions such as Europe, Asia, and North America.
In the domestic apparel business, Onward Kashiyama Co., Ltd. achieved increased net sales
and significantly reduced operating loss by continuing to abolish unprofitable businesses and close
unprofitable stores, while steadily implementing sales strategies such as increasing the number of
OMO stores. Despite a decrease in sales at Onward Trading Co., Ltd., which conducts a B2B business, profit increased owing to robust sales in the highly profitable uniform business. Sales also grewat Tiaclasse Co., Ltd., whose main sales channel is e-commerce, and at Onward Personal Style Co.,
Ltd., which is developing the KASHIYAMA made-to-order suit brand that has garnered high praise for
its interview suits.
In the overseas apparel business, due mainly to withdrawal from unprofitable businesses under
the global business reforms, profitability improved, and operating profit and loss improved significantly.
As a result, the loss was significantly reduced despite a decrease in sales for the Apparel Business as a whole.
Net Sales (Domestic Apparel Business)

Operating Profit (Domestic Apparel Business)(Millions of yen)

(Millions of yen)

158,955
120,900

FY02/20

FY02/21

Domestic Apparel BusinessOnward Kashiyama Co., Ltd.

Onward Trading Co., Ltd.

2,515

120,516

FY02/22

FY02/20(13,257)(1,254)

FY02/21

FY02/22Net Sales (Overseas Apparel Business)

Operating Profit (Overseas Apparel Business)(Millions of yen)

(Millions of yen)Overseas Apparel Business (Europe)

Overseas Apparel Business (Asia)

Joseph Ltd.

Onward Fashion Trading (China) Co., Ltd.

46,31037,473
17,838(5,940)(6,198)(679)

FY02/20

FY02/21

FY02/22

Overseas Apparel Business (U.S.)
FY02/20

FY02/21

FY02/22

Domestic Apparel Business(for corporate clients)

2019/2月期

J. Press, Inc.

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Apparel Business

Domestic Apparel Business
Principal Company

Onward Kashiyama Co., Ltd.

Business Activities

Comprehensive apparel manufacturer of men’s, women’s, and children’s clothing

Topic“Order online, then try on and purchase at the store”
Renewal of the OMO service Click & Try
Expanded to 278 stores* in 44 prefectures, making for more convenientand familiar services

Onward Kashiyama offers women’s and men’score brands and mainstay brands, such as Nijyusanku, ICB, Jiyuku, J. PRESS, and Gotairiku, primarily at department stores and brands suchas any SiS and any FAM at shopping centers.
The company also operates directly managed
stores for such brands as JOSEPH, Paul Smith,and TOCCA at commercial complexes etc. tocommunicate the brands’ vision and message
to consumers.
Onward Kashiyama’s brands whose main sales channel is e-commerce are uncrave, #Newans,
ANEVER, and UNFILO. With the aim of developing these brands as a mainstay business from now on,
Onward Kashiyama is offering an innovative customer experience based on a new business model.
The company is working to establish a new style of store operation by creating venues where
customers can enjoy the maximum benefits of both online and offline experiences through OMO(Online Merges with Offline) stores, a new business format offering the services of physical storescombined with those of online stores.

In spring of 2022, Onward Kashiyama renewed its Click & Try OMO service where almost allof ONWARD brand items can be delivered to a store to be tried on and purchased.
Click & Try service is an order service that allows users to try on and purchase products at physical stores, which they ordered from Onward Group’s official fashion online
shopping site Onward Crosset. At our stores nationwide where we have introduced this service, users can try on the items they ordered online, and enjoy shopping with confidence intheir purchase.
The service has become increasingly easy and convenient to use via mobile phones
and PCs, and is offered in 278 stores in 44 prefectures. It is enjoyed by many customers whowish to try the exact same clothing coordination they saw on the website, try items in one
place since visiting multiple stores is worrying under COVID-19, and finish shopping in thesame place with their partners.
We will continue to offer even better environments where the service can be used conveniently in more stores nearby, and expand nationwide new purchasing experience opportunities with online and offline merits combined.
*As of April 2022

23 stores
Ne t Sales

O p e rat i n g P ro f i t(Millions of yen)

(Millions of yen)

59 stores
Chugoku &Shikoku

128,097

21 stores
89,31091,395

Hokkaido

42 stores
Kinki

29 stores
TohokuKyushu3,111

55 stores
49 stores(1,857)
FY02/20

FY02/21

FY02/22

FY02/20(12,761)
FY02/21

FY02/22

Chubu

Kanto

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Apparel Business

TopicsDomestic Apparel Business (for corporate clients)
Principal Company

Onward Trading Co., Ltd.

Business Activities

Operates the uniform business (company uniforms, school uniforms, medical
wear, etc.) and the sales promotion business for general corporate clients

Based on its apparel business, Onward Trading proposes solutions to the branding and promotion
issues faced by general corporate clients in their respective fields. Directly soliciting client requests, various internal departments at Onward Trading team up to address customer issues andrespond to potential needs. Moreover, this company develops designs, patterns, and materials inhouse to ensure that all proposals are completely original. Onward Trading also offers robust
post-delivery support for tasks including inventory management, operating, cleaning, and re-ordering. Leveraging the strengths of the Onward Group, Onward Trading provides high-level responses
to the various needs of corporate clients.

Ne t Sales

O p e rat i n g P ro f i t(Millions of yen)

(Millions of yen)

Digital Transformation (DX) initiatives in uniform production
We introduced “CLO,” an apparel 3D fitting simulation system, in March
2021, realizing efficient sample production.
On CLO, it is now possible to change colors and patterns, and modify specifications immediately,
thereby reducing the number of samples produced. We succeeded in reducing the number ofsamples produced by 40% as a result of using CLO at the internal sample review meeting for the
first quarter of the fiscal year ending February 2023 of Raffiria, our catalog targeted at medical
professionals. With only 2D pattern data, applications as design samples are limited, while actual
samples are subject to limited storage space and time, so they must be discarded. By introducing
CLO, the 3D pattern data remains, and even without actual samples, it is possible to effectively
archive pattern data to use as reference materials for designs.
In addition, samples can be put on avatars to check movement, design, and how it looks inspaces such as stores. In virtual reality, it can display situations with people of various ages,
genders, and body types wearing uniforms in the same space. This contributes to realizing
presentations that make it easier to imagine people actually wearing the uniforms.

Introduced “UOS,” which makes it possible to complete measurement
remotely, from size recommendation to order aggregation. The appropriate
size recommendation function reduces losses due to mistaken sizes, etc.
Conventionally, size measurement work for corporate and school uniforms has involved bringing
together many people who will wear the uniforms and having them actually try on samples, thenaggregating the data in analog format, which takes a great deal of time and effort. Furthermore,
it was unavoidable that there would be incidents of human error arising from manual aggregation.
Therefore, in October 2020, we introduced the uniform order system UOS in order to promote
digitalization of uniform measurement and order aggregation work.
A machine learning algorithm (AI) is used to measure the dimensions of the body, such as
arm length and shoulder width, from front and side full-body photos taken with a smartphone.
We have realized remote measurement without going to a venue and doing measurement faceto-face as is done conventionally.
It has also greatly reduced the time, labor, and costs that were previously required, such as
making arrangements for measurement venues, making time adjustments, labor costs formeasurement staff, and compilation of aggregated data.
Conventional management of measurement information brings the risk of human error, butusing UOS, aggregation is done automatically when an order is received. Furthermore, byimproving the accuracy of production size details, we have reduced the number of returns andexchanges after orders are placed, decreasing the number of products discarded.

17,252
15,591

14,760
1,645

1,788

1,444

Converting 2D data to 3D with CLO
FY02/20

FY02/21

FY02/22

FY02/20

FY02/21

FY02/22

Image ofphotography
screen with UOS

Image ofrecommendation
screen with UOS

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Apparel Business

Overseas Apparel Business<Europe>Principal Company

Joseph Ltd.

Business Activities

Operates JOSEPH, the global brand based in London, the UK.

Joseph is engaged in planning and sales of JOSEPH, a British brand established by Joseph Ettedgui
in 1972. JOSEPH offers the world a contemporary yet timeless wardrobe of luxury essentials. By reinforcing the brand’s positioning in the market while strengthening the online business through Joseph’s own e-commerce operation, the company will continue its efforts to expand the businessglobally, including in Asia.

Topic
Expanding the business area of the made-to-order items brand KASHIYAMA
in China
In August 2022, we opened the KASHIYAMA Nanjing
Jinling store in a famous state-owned hotel located afive minute walk from a subway station in downtown
Nanjing. Nearby, there are office buildings andcommercial facilities such as Deji Plaza, which boasts
the second largest sales in all of China. At this store,
we offer made-to-order suits (men’s and women’s),
made-to-order shirts (men’s), and made-to-order coats(men’s and women’s) to many people who come to
do business or go shopping.

<U.S.>
Principal Company

J. Press, Inc.

Business Activities

Operates J. PRESS, a brand of authentic American traditional clothing

J. Press directly operates stand-alone stores of the J. PRESS brand in New Haven, Washington, D.C.,
and New York City. Founded in 1902, J. PRESS remains a pillar of the Ivy League style. J. PRESS wasa favorite brand of Gerald Ford, the former U.S. president. J. Press is working to further strengthen
the presence of the J. PRESS brand in North America and elsewhere in the world.

<Asia>
Principal Company

Onward Fashion Trading (China) Co., Ltd.

Business Activities

Offers brands, such as Nijyusanku and ICB

Onward Fashion Trading (China) is collaborating with local partners in China to expand e-commerce and cultivate new sales channels, as well as on product development, including local planning. The company operates stores for made-to-order items of the KASHIYAMA brand in the
Shanghai area. By expanding touchpoints through strengthened digital marketing, the company isproposing a new style of made to order to customers. Plans call for opening stores elsewhere in
China step by step.

Topic
Commemorating the J. PRESS brand’s 120th anniversary,
the flagship store J. PRESS NEW HAVEN opened
in New Haven, U.S., the birthplace of the brand
J. Press Inc. relocated and reopened its flagship store“J. PRESS NEW HAVEN” in New Haven, Connecticut, thebirthplace of the brand, on Friday, June 3, 2022, tocommemorate the 120th anniversary of ”J. PRESS” as a“global heritage” brand that has tailored Ivy League-style
clothing for many years.

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Lifestyle Business

Overview and Financial Results in FY02/22
The Lifestyle Business segment comprises 24 operating companies and generates 22.3% of theCompany’s consolidated net sales.
In this segment, we use the product development and sales capabilities of Onward Group to
make fashionable proposals in various fields in order to create new value and lifestyles. This
segment consists of the wellness business, which includes cosmetics, ballet/dance goods, andresorts, the pet and home life business, the beauty and cosmetics business, the gifts business, aswell as the gourmet foods business and the real estate leasing business.
Sales increased significantly, and profitability was restored at Chacott Co., Ltd., which
operates a wellness business, due to the recovery of orders received for its mainstay balletproducts, which faced severe circumstances due to the impact of COVID-19 pandemic in the

Wellness Business

Beauty & Cosmetics Business

Chacott Co., Ltd.

KOKOBUY Co., Ltd.

Pet & Home Life Business

Gourmet Foods Business

Creative Yoko Co., Ltd.

Onward Digital Lab Co., Ltd.

previous fiscal year. Sales and profit increased at Yamato Co., Ltd., which conducts a gift business,at Creative Yoko Co., Ltd., which is engaged in a pet and home life business, and at KOKOBUY Co.,
Ltd., which conducts a beauty and cosmetics business.
Sales continued to decrease at Onward Beach Resort Guam, Inc., which operates a hotelbusiness in Guam, and another company, due to a sharp decline in visitors to Guam.
As a result, both sales and profit increased for the Lifestyle Business as a whole.
In March 2022, we sold Onward Beach Resort Guam Inc.

Ne t Sales

O p e rat i n g P ro f i t(Millions of yen)

(Millions of yen)

1,784

42,96836,97939,655

1,553

378

Gifts Business
FY02/20

FY02/21

FY02/22 2019/2月期

FY02/20

FY02/21

FY02/22

Yamato Co., Ltd.

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Lifestyle Business

TopicsWellness Business

Collaboration between the National Ballet of Japan and Chacott
Development of a new ballet makeup suitable for the faces of Japanese people

Principal Company

Chacott Co., Ltd.

Business Activities

Comprehensive business development including the sale of ballet/dance goods
and cosmetics, and the operation of ballet schools

With its “Make life beautiful from the inside out”
brand philosophy, Chacott is promoting comprehensive business development, including the sale of ballet, dance and fitness goods and cosmetics and theoperation of ballet schools, based on the “FromClosed to Open” strategy. While continuing to develop the core ballet business it has fostered since its
founding, Chacott has taken a step toward the nextstage by ramping up the proposal brands for thewellness area, namely, Chacott BALANCE and Chacott COSMETICS.

In spring of 2021, we developed new ballet makeup
with the National Ballet of Japan in the Chacott COSMETICS line, which was renewed to make it more convenient for general users. It debuted in the 2021/2022
season opening performance of the ballet Swan Lake.
Japanese ballet makeup tended to erase individuality, making it difficult to convey to the audience thefacial expressions of the performers. Miyako Yoshida,
the recently appointed Artistic Director of Ballet &Dance of the National Ballet of Japan, recognized theneed for a support system for ballet makeup, which until now has been left up to individuals. This recognition
follows the direction of the ballet toward opening to
the general public, and is consistent with the “FromClosed to Open” strategy promoted by Chacott. Therefore, in order to meet the demands of the National Ballet of J apan, we started a new ballet makeup
development project. This is a new type of ballet makeup that is more suitable for the faces of Japanese people, and looks beautiful both from a distance and up
close.

Grand opening ofa next-generation global flagship store

Ne t Sales

O p e rat i n g P ro f i t(Millions of yen)

(Millions of yen)

10,847
579
8,311
332

7,175

FY02/20

FY02/21

FY02/22

FY02/20(848)

FY02/21

FY02/22

Giving shape to our brand philosophy “Make life beautiful from the inside out,” we held the grand opening of
the Chacott Daikanyama Tokyo Main Store in March
2022.
This is a next-generation global flagship store, withthe store itself and a ballet lesson studio relocated from
Shibuya to the former KASHIYAMA DAIKANYAMA.
While firmly maintaining ballet, which has been ourcore business since the foundation, we have strengthened development of our proposal brands for the wellness area, Chacott BALANCE and Chacott COSMETICS.
Chacott also operates cafes and restaurants, spreading
its brand philosophy totally to all manner of lifestylescenes.
As the world continues to face uncertain circumstances, the Chacott Daikanyama Tokyo Main Storeaims to be a bridge for international cultural exchange,
connecting the world through ballet culture.

Chacott COSMETICS

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Lifestyle Business

TopicsPet & Home Life Business

Debut of PET PARADISE CAT with the theme of“adding something extra to life with cats”

Principal Company

Creative Yoko Co., Ltd.

Business Activities

Development of comfort goods and pet-related products

Creative Yoko plans and sells pet-related products and comfort goods. Shops operated by Creative
Yoko include PET PARADISE, Mother garden, and Sirotan Friends Museum. Sirotan, Creative Yoko’s
proprietary character inspired by a harp seal, embodies the company’s philosophy of offering quality
merchandise and services that make people feel at ease, peaceful and positive. Mainstay productsof Sirotan are soft cuddly toys of various sizes. Creative Yoko also operates a licensing business for
Sirotan, which is used for not only commercialization but also for campaigns and promotions, andthere are plans to work with 30 companies in the fiscal year ending February 2023.
The company is also actively working to achieve the SDGs, and in 2020 it was certified as an
SDGs promoting company by Nagano Prefecture. In 2022, Creative Yoko received certification from
Nagano Prefecture in the Work-Life Balance Course, as a company where employees can choose
work styles that fit various lifestyles and needs.

Creative Yoko Co., Ltd. has started developing PET PARADISE
CAT, its first dedicated brand of cat supplies, and has started
selling this brand at the directly operated stores of PET PARADISE nationwide, as well as on its online shop.
The COVID-19 pandemic has caused people to spend
more time at home because they are telecommuting or voluntarily refraining from going out, so the number of people whohave pets has increased and they get to spend more time with
their pets. Pets are important members of the family, and there
is a growing awareness of the importance of pets for their ability to sooth people and bring the joy of life.
We have mainly developed products for dogs, but in response to changes in the circumstances of keeping pets, weformed a project team to develop products for cats. We havelaunched and started selling PET PARADISE CAT, a dedicatedbrand of cat supplies made with the theme of “adding something extra to life with cats.”
In the fall/winter season of 2022, we will expand our lineup
by adding more than 30 items, including cat collars, food, and careproducts, and will work to increase recognition of cat products in
PET PARADISE, to pioneer the market and spread the brand.

Launch of the increasingly popular MOLANG goods
for the first time in Japan at Mother garden

Ne t Sales

O p e rat i n g P ro f i t(Millions of yen)

(Millions of yen)

5,876
5,074

5,194

319
270
221

FY02/20

FY02/21

FY02/22

FY02/20

FY02/21

FY02/22

Creative Yoko Co., Ltd. has acquired merchandising rights in Japan, Taiwan, Hong Kong, Macau, and Thailand for the popularcharacter MOLANG, which is rapidly growing in popularity
thanks to its appearance on Amazon Prime Video, Netflix, andDisney Channel. We are now the first company in Japan to start
selling MOLANG goods, both at the directly operated stores ofMother garden nationwide, as well as on our online shop.
MOLANG is a gentle and affectionate character, expressing
empathy, softness, kindness, and happiness, and it has no nationality, is ageless and gender-neutral. MOLANG has a uniquebond with its best friend Piu Piu, which enables them to turn
any obstacle into a moment of happiness with their humor andkindness.
The company’s philosophy is to provide products that offer
ease, peaceful and positive feeling. At Mother garden, we aredeveloping “comfort goods” such as wooden play house sets,dress-up educational toys, and stationery. The borderless, gender-neutral, and ageless world of MOLANG embodies our philosophy. We aim to spread awareness of MOLANG among Japanesecustomers, and acquire new customers for Mother garden.

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Lifestyle Business

Beauty & Cosmetics Business

Gourmet Foods Business

Principal Company

KOKOBUY Co., Ltd.

Principal Company

Onward Digital Lab Co., Ltd.

Business Activities

Development of “product”, a natural organic cosmetics brandBusiness Activities

Operation of Onward Marche, an e-commerce site for high-quality gourmet foods
for refined tastes

KOKOBUY offers the “product” brand, a line of natural organic products launched in California, USA
in 2007. The “product” haircare items have earned the utmost confidence of hair stylists and otherprofessional users. Today, they are recognized and favored by a wide range of customers regardlessof gender or generation. By offering products of high quality and value at affordable prices, KOKOBUY aims to make natural organic products part of everyday life. KOKOBUY will continue to offer
sustainable products that are functional and friendly not only to people’s hair and skin but also to
the environment.
In terms of procurement and product development, we select and use appropriate raw materials from around the world, with a focus on those that have acquired USDA (United States Department of Agriculture) organic certification.
We use only natural ingredients in all of our products, and our brand philosophy is to develop
products that are friendly to both humans and the environment.
In April 2022, at the Sustainable Cosmetic Award 2021, which was held to give recognition tocosmetics that are friendly to both people and the planet, we won the “Corporate Division: International Award,” which is given to companies that are actively engaged in SDGs initiatives.

TopicsDisney designs appear on popular items from “product,”with a limited release!
The organic and wild crafted “product” launched products packaged
with special labels featuring Mickey Mouse and Minnie Mouse,
popular characters among a wide age range, in September 2021 in alimited quantity.

For the first time in the history of “product,” its popularhair wax has been released as makeup balm! New
makeup items produced entirely from natural ingredients
The highlighter “natural face balm” (2 colors) blends into the skin witha radiant luster, and the multi-color balm “natural glow color” (5colors) can be used for eyeshadow and blush, blending into the skinwith its natural colors derived from minerals. The “product” items are
made with naturally derived ingredients, and they prevent rough skinby gently protecting it from damage. The multi-color balm allows
users to freely enjoy colors with comfortable elasticity. It keeps theskin beautiful, radiant, and moisturized.

Onward Marche is a high-quality gourmet food e-commerce website aimed at individuals with refined tastes who want to be particular about food just as they enjoy fashion.
This website is a gateway to the new world of gourmet
foods offered by Onward, a constant provider of new value andlifestyles in the world of fashion.
Onward’s buyers travel across Japan to talk to producers insearch of exquisite culinary masterpieces, choosing only the best
based on sight and taste. Like an artist painting a canvas, the richassortment of gourmet foods available at the Onward Marche
market enriches and adds color to people’s lives.

Topic
Start of “e-Gift” service on Onward Marche,
our gourmet e-commerce site that collects delicacies from across Japan
Currently, about half of all customers using Onward Marche are using it to give gifts. Taking
advantage of this feature, we started an “e-Gift” service from spring of 2022, so that inaddition to the users aged 40 and older who are the main customer group for gifts, young
customers in their 20s and 30s can easily enjoy and send gifts.
“e-Gift” is a next-generation gift service that responds to changes in people-to-people
connections and lifestyles. Users can send gifts by LINE, email, and other means even if
they do not know the recipient’s address, and this service is also known as social gifts,
digital gifts, online gifts, and so on.
In preparation for the introduction of “e-Gift” , Onward Marche has renewed its
website to improve usability for both gift givers and recipients, based on the concept of“making gift-giving easier.” We have also expanded the lineup of products suitable for“e-Gift”, from high quality gourmet food gathered from across Japan, to also include otherstylish goods.

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Lifestyle Business

TopicsGifts Business

Launch of “d zo - Have fun with gifts.”, thesocial gift service that lets you send gifts onsocial media

Principal Company

Yamato Co., Ltd.

Business Activities

Gift solutions featuring gift catalogs

In 2019, Yamato Co., Ltd., a major catalog gift company specialized in gifts joined the Onward Group.
Founded in Nagano Prefecture in 1940, Yamato started as a wholesaler of glassware, and has
expanded into gift solution businesses, including catalog gifts. Fully utilizing two strengths, namely,
the planning and proposal capabilities cultivated in the gift market and the management and logistics function of the support center at the head office, Yamato has a system in place capable of responding to diversifying needs for gifts.
Currently, Yamato is doing business as a dedicated planner and producer of gifts and catalog

From April 2022, Yamato Co., Ltd. has launched d zo, a
new type of service that allows users to easily send gifts
on social media without having to hand over gifts in person or ship them. Applying know-how cultivated with catalog gifts business, this service
seamlessly completes every step from taking orders to shipping products in-house.
With d zo, Yamato has set more than 80 gift themes, and has 51 popular illustrators
drawing unique illustration designs for each theme. Gifts are carefully selected by buyersof the user’s generation, with Millennials and Generation Z as the target demographics.
There are two ways to give gifts with d zo: “give on social media” or “give by hand.” Recipients can choose 1 out of 5 gifts from the dedicated site for receiving gifts. In the future,
we will gradually expand gift themes and propose new ways to give gifts which both thegiver and receiver can enjoy.
Give a gift onsocial media

gifts, with the goal of contributing to development of richer communities through continuous trans-(social gifts)

lated to shareholder rewards, hometown tax programs, and other such schemes.
Yamato is strengthening e-commerce and has entered the social gifting space. By developing
new products and services, Yamato will offer new value to customers. It has all the functions neces-

Giving Gifts

formation of the gift market. It also supports corporate gift needs and provides agency services re-

1. Select “give on social
media” in the shopping cart

Gifts can be given immediately
Gifts can be given without meeting in person
2. Entera message

3. Share the gift URL
with the recipient

Give a gift byhand
1. Select “give byhand” in the
shopping cart

Paper gift ticket
Comes with illustration sticker
2. Send the gift
ticket to theirmailbox

3. Give the gift by hand(can also write amessage)sary for gift solutions, including planning, buying, output, and logistics.
Yamato has established a logistics center at its head office in Azumino, Nagano Prefecture, tooffer a place valued by its customers, where they can find everything they need and have their requests fulfilled.

The first physical d zo store opened for a limited time, from Friday, July 1 to Friday, September 30, 2022, at CHOOSEBASE SHIBUYA, a media-type OMO store operated by Sogo & Seibu Co., Ltd.
From more than 80 gift themes held by d zo, we selected 12 popular themes forsales, such as “#PleaseTakeCareOfYourself !” to give to the person you care about who is
working hard, and “#BeerIsBetterThanAnythingElse!” for beer lovers.

[Total site area: 26,000m² / Total floor area: 19,000m²]
Ne t Sales

O p e rat i n g P ro f i t(Millions of yen)

(Millions of yen)

1,280

20,326
16,62318,309797

FY02/21

FY02/22

FY02/20

FY02/21Developing a limited-time pop-up store at Ginza LOFT
(5F stationery and miscellaneous goods section)d zo opened a physical pop-up store for a limited time,from Monday, August 1 to Friday, September 2, 2022, at
the Ginza LOFT, 5th Floor, stationery and miscellaneous
goods section, which is operated by THE LOFT CO., LTD.
While the pop-up store was open, from more than 80 gift
themes held by d zo, 70 popular gift themes were exhibited on large displays and sold, including the gifts for meat
enthusiast, “#MeatIsTheBest” and “#SummerGreetings”,
which are ideal for summer gifts. At this pop-up store, only
gift tickets for giving by hand were sold.

636

FY02/20

The first physical store appearing for a limited period
at the media-type OMO store CHOOSEBASE SHIBUYA

FY02/2234

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Sustainable Management

Segment Information

Corporate Governance

Key Financial Data
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Onward Group Key Brands
A p p a re l B u s i n e s s
Brand
Logo

Development
Genre

Women’s
Golf

Women’sChildren’s

Concept/Outline[Business Operating Company]
Japanese Women’s Standard
What does ‘Japanese Women’ mean to Nijyusanku?
Women who wish to enjoy the dignified, elegant beauty that emanates fromwithin. Sometimes uninhibited, sometimes reserved. Sometimes strong, sometimes
gentle. Women who keep their own style.
What does ‘Standard’ mean to Nijyusanku?
Simple, high quality, comfortable clothing, endlessly chic and beautiful designs
that transcend generations and time, and are widely and long-loved.
[Onward Kashiyama Co., Ltd.]

Women’s

This is an era in which the individuality of each person who lives his or her life
comes into focus. Be yourself, not dressed up. Wear something that looks good on
you instead of something that’s trendy. We offer effortless styles that can be worn
both on and off the job, with a focus on jackets for working women. Clothes that
fulfill each and every one of our customers’ desires to be like this. Clothes thatallow each and every one of our customers to become the person they want to be.
[Onward Kashiyama Co., Ltd.]

Women’s

Be Happy For the smile of contemporary woman.
—For the smiles of all women—
Classy, quality, daily
Jiyuku proposes a natural and radiant wardrobe for the mature generation of
women.
[Onward Kashiyama Co., Ltd.]

Women’s

The name is derived from ‘undyed essence’. The word represents truly mature
women who can freely express themselves without excessive adornment, and thecomma (,) represents the women who, through their encounter with this brand,
will continue to evolve toward the future with even greater abundance and beauty.
The brand proposes dignified elegance, unfussy glamour, and refined quality.
[Onward Kashiyama Co., Ltd.]

Men’s

English tradition, French flair, Italian chic, American rationality...
Standard clothes that incorporate the best of each country and are tailored withJapanese sophistication.
“Japanese Gents Style” for today’s leaders.
[Onward Kashiyama Co., Ltd.]

Women’s
Men’s

Logo

Development
Genre

Men’s
Golf

Founded in New Haven in the Eastern United States, on the doorstep of Yale
University, in 1902. The brand has long been loved by the elite of American
history and represents the authentic American traditional.
[Onward Kashiyama Co., Ltd.] [J. Press, Inc.]
A British brand that offers the world a contemporary and timeless wardrobe withthe essence of luxury.
[Onward Kashiyama Co., Ltd.] [Joseph Ltd.]

Concept/Outline[Business Operating Company]
Brand of the British company DAKS that features the British traditional style. A
total coordination brand for adults who love authenticity, incorporating modernity
into the British tradition.
[Onward Kashiyama Co., Ltd.]

Women’s

Sir Paul Smith is a leading British designer renowned for his creative spirit thatcombines tradition and modernity. Widely known for its clothing and accessory
collections, Paul Smith creatively combines traditional craftsmanship with cuttingedge design to create beautiful, modern items.
[Onward Kashiyama Co., Ltd.]

Men’s

Adult casual wear with finesse proposed by Joseph Abboud. An international
American brand that takes inspiration from nature, manufactures from a variety ofperspectives, and proposes lifestyles for the wearer as well as the design ofclothing, with the eternal theme of “coexistence with nature,” such as emphasison natural, organic, and natural materials.
[Onward Kashiyama Co., Ltd.]

Women’sChildren’s

The Italian word “TOCCA” means “touch” in English. The brand’s icon is the classic
and beautiful embroidery that one cannot help but want to touch. It expresses atimeless worldview of romantic, elegant and high quality style with a focus on the“TOUCH (texture)” that “TOUCHes (feelings)” the customer.
[Onward Kashiyama Co., Ltd.]We offer girly and casual styles for working women for whom both work andprivate life are important. Based on the concept of “evolving staples” that
constantly add new essences to traditional materials and items, we offer items thatcombine quality, cuteness, and zeitgeist.
[Onward Kashiyama Co., Ltd.]

Women’s
Men’s
Children’s

Brand

Women’s“Lady to Wear, Ready for Feminine”
any SiS proposes the NEXT FEMININE BASIC for Japanese working women.
[Onward Kashiyama Co., Ltd.]

Women’sChildren’s

Women’s

Clothes for a happy tomorrow. Busy, commonplace days pass by. Just byimagining, “I’m going to wear this outfit tomorrow,” you can make an ordinary day
seem a little more special. any time, any wear, any fam.
any FAM will continue to create “opportunities for happiness” for people whowear our clothes.
[Onward Kashiyama Co., Ltd.]
Clothes that are trendy and playful, yet classy.
A ladylike mode style for women who are sensitive to the times.
[Onward Kashiyama Co., Ltd.]omen’s
Men’s

Women’s

A real standard that can only be worn by adults who have established their own
style. It is a strange combination of form and comfort: comfortable yet shiny, crisp
yet lightweight.
ATON takes pride in its uncompromising craftsmanship, backed by experienceand ingenuity in making the most of the original characteristics of materials.
[Onward Kashiyama Co., Ltd.]A new balance of basics with a focus on authentic tailoring and materials. We
propose a new set-up by combining various items with “just the right amount oftrend.”[Onward Kashiyama Co., Ltd.]35

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Sustainable Management

Segment Information

Corporate Governance

Key Financial Data
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Onward Group Key Brands
A p p a re l B u s i n e s s

L i f e s ty l e B u s i n e s s

Brand
Logo

Concept/Outline[Business Operating Company]

Development
Genre

Women’s

Based on four policies, we propose a new era of workwear that is tailored to theneeds of working women. “Co-Creation”: Creating what people really want
together with those who wear it. “Universal”: Finding clothes that suit any
occasion and any person. “Sustainability”: Making only what is necessary, notdisposing of waste, and having good products at reasonable prices. “Easy care”:
Can be worn beautifully as it is after washing and drying.
[Onward Kashiyama Co., Ltd.]

Goods
Women’s
Men’s

ANEVER is a brand that captures the best moment of flowers forever. The brandname coexists within the opposites of “a moment = A NEVER” and “eternity = AN
EVER.” The logo is in the shape of a flower made up of a combination of 0 and 9.
As if time has stopped inside the resin, the moment of the beautiful blooming of
the flowers remains. We want people to wear “true floral patterns” with the same
feeling as decorating a room with flowers and carrying a piece of nature withthem. Like flowers in the field, no two are alike.
[Onward Kashiyama Co., Ltd.]

Women’s
Men’s

There are clothes that you pick up when you wake up in the morning, take a deep
breath, and think about your plans for the day. For example, when you go to thepark with your dog, the thing you want next to lightness would be an idea that
lifts your spirits. Add a little bit of yourself and your current mood to your outfit
even for a walk. 365 days of ordinary, varied, but lovely days. Take the season andthe weather on your side, and choose clothes that are kind to you, from UNFILO.
[Onward Kashiyama Co., Ltd.]

Women’s
Men’s

Aiming to democratize “made-to-order,” the brand started selling made-to-order suits in
October 2017, as a new business based on an evolved omni-channel approach. It takes
measurements not only at its nationwide stores and Guide Shops, but also at homes
or offices, and from the second piece, orders can be placed through its online store.
[Onward Personal Style Co., Ltd.]

Women’s

We go to great lengths to travel the world to find and create the materials we areparticular about. The designers visit each country in person until they are satisfied,
and then carefully bring back the materials and inspirations they have found. They
do this because they know the beauty of the products so carefully finished. Withthe theme of “clothes for the truly fashion-conscious,” the brand targets women
who are uncompromising in their quest for elegance.
[Island Co., Ltd.]

Women’sWith age comes grace. We would like to propose such elegant styling. We want todeliver elegant clothes for adults in their 30s and older that radiate beauty. We wantto support women who work hard every day. And we hold such thoughts in mind.
[Tiaclasse Co., Ltd.]

Goods
Women’s

We bring out new charm by adding an edgy twist to an authentic style that is not
influenced by times or trends. Tradition and rebellion collide, breaking the rules tocreate something new. This is Mulberry’s approach.
[Mulberry Japan Co., Ltd.]

Inner

What makes each day wonderful...that’s an unspoken secret. Chut! INTIMATES
will share such secret with you. It is a brand of intimate wear (lingerie) createdwith the hope that lingerie can be enjoyed like fashion.
[Intimates Co., Ltd.]

Brand
Logo

Concept/Outline[Business Operating Company]

Development
Genre

BalletFitness
Cosmetics

HaircareCosmetics

With its “Make life beautiful from the inside out” brand philosophy, the company
operates the Wellness Business based on the “From Closed to Open” strategy. It
has five brands: Chacott BALLET for ballet goods, Chacott BALANCE for fitness
goods, Chacott ARTSPORT for rhythmic gymnastics goods, etc., Chacott
COSMETICS for cosmetics, and Chacott STUDIO, which operates culture studios.
[Chacott Co., Ltd.]The natural organic brand “product” aims to make natural organic products part ofeveryday life by offering products of high quality and value at affordable prices. It
offers sustainable products that are functional and friendly not only to people’s
hair and skin but also to the environment.
[KOKOBUY Co., Ltd.]Pet products

Delivering a comfortable life for your precious family members. We propose
comfortable daily life and exciting lifestyles with pets.
The brand offers pet sundries, pet wear, dog food, and care products, etc.
[Creative Yoko Co., Ltd.]

Comfort goods

Sirotan, the company’s proprietary character inspired by a harp seal, embodies its
philosophy of offering quality merchandise and services that make people feel atease, peaceful and positive. Since its birth in 1999, the Sirotan’s mainstay products
have been soft cuddly toys of various sizes.
[Creative Yoko Co., Ltd.]

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CONTENTS

Corporate Information

Sustainable Management

Segment Information

Corporate Governance

Key Financial DataPRINT

Co r p o rate Gove r n an c e

37

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Corporate Information

Sustainable Management

Corporate Governance

Segment Information

Key Financial Data
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Corporate Governance
Our Basic Approach to Corporate GovernanceDirectors and the Board of Directors

The Onward Group believes that responding promptly to changes in its business environment andensuring a level of corporate governance that enhances the health, fairness, transparency, and compliance of its management and operations are among its most important responsibilities and central
to increasing corporate and shareholder value.
In its basic management policy, the Onward Group has defined its business domain as “a worldof fashion that gives refreshment and beauty to people’s lives.” By offering fashion as an integral partof consumer culture, the Group creates new lifestyles and values that contribute to the enrichmentof life for all people. Moreover, the Company believes that, in order to exercise this policy and accomplish its objectives, it is vital for it to build and maintain strong networks and relationships withcustomers and all other stakeholders it connects with in its corporate activities.

In order to further clarify the management responsibilities of directors, to increase opportunities togain the confidence of shareholders, and to put in place an optimal and flexible management
framework that is capable of responding to changes in the business environment in a timely manner, the Company has set the term of directors at one year. In addition, two of the six members of
the Board of Directors (five men and one woman) are appointed from outside the Company andselected on the basis of their high level of independence. This initiative is aimed at reinforcing thesupervisory function of the Board.
In the fiscal year ended February 2022, the Board of Directors met 11 times, and four separate
meetings were held in the form of document correspondence.

Corporate Governance Structure

Reasons for the Appointment of Outside Directors
Name

Reasons for Appointment as an Outside Director and Status of Attendance in FY02/22

Akira
Kawamoto

We have elected Mr. Kawamoto as an Outside Director because we are expecting him to use his
extensive experience gained while working for the government for many years and diverse
knowledge and insight from his academic experience to enhance the Company’s management. He
attended 11 out of 11 (100%) Board of Directors’ meetings.

YoshieKomuroWe have elected Ms. Komuro as an Outside Director because we are expecting her to use her
expertise as a corporate manager and experience and insight developed through serving as anexpert sitting in various government-affiliated councils to enhance the Company’s management. She
attended 11 out of 11 (100%) Board of Directors’ meetings.

General Meeting of Shareholders

Consultation

ReportBoard ofDirectors

Nomination
andCompensation
Committee

ReportAudit &
Supervisory Board

Audit

Standing Audit &Supervisory Board
Members
Outside Audit &Supervisory Board
Members

Onward Group
Compliance
Committee
Supervision

ReportCoordination

SupervisionInternal
Control Office

AuditGroup Companies

Name

Michinobu Yasumoto
Kenji Chishiki

ReportOnward Group
Strategy Meeting

Skill Matrix of the Board of Directors

Accounting Audit

Accounting Auditor

Osamu Sato
Daisuke Ikeda
Akira Kawamoto
Yoshie Komuro

OutsideDirectors
and Outside
Audit &
Supervisory
Board
Members

Expertise and Experience Expected by the Company
Company
International
Legal Affairs
Finance
Management Experience
Compliance
Accounting
Business
Overseas
Risk
M&A
Operation
Business
Management

IT/Digital

Personnel
Diversity
Environment
CSR

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Segment Information

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Key Financial Data
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Corporate Governance
Audit & Supervisory Board Members and the Audit & Supervisory Board

Business Execution Structure

The Company has adopted an Audit & Supervisory Board structure, under which the Company has
appointed four Audit & Supervisory Board members (three men and one woman), two of whom areoutside Audit & Supervisory Board members. Staff has also been assigned to assist Audit & Supervisory Board members in carrying out their duties and to strengthen their supervisory function.
Each member audits and monitors the performance of directors. Responsibilities include reviewing
the documentation of important decisions and attending important meetings, such as Board of Directors’ meetings, Group financial account settlement meetings, and budget committee meetings,
in accordance with audit policies and the roles established by the Audit & Supervisory Board. In
addition, the Internal Control Office and business departments conduct periodic monitoring in aneffort to establish an effective and lawful corporate structure.
The Audit & Supervisory Board meets with the representative directors and the accounting auditor on a regular basis to share and exchange information and opinions. This initiative is also designed to ensure a structure is in place that is capable of conducting audits in an effective andlawful manner. Moreover, the Audit & Supervisory Board receives reports from each member in accordance with audit policies and the roles. Deliberations are undertaken and resolutions are madebased on this information as required.
In the fiscal year ended February 2022, the Audit & Supervisory Board met 16 times.

The Onward Group has adopted a holding company structure that allows the Company’s Board of Directors to engage in strategic decision-making and supervise operating companies. At the same time,
the Group has separated the supervisory and execution functions in order to clarify the responsibilities and authority of each operating company and to facilitate accelerated strategic decision-making.
When matters that require urgent attention arise, the Board of Directors convenes as necessary. In this manner, the Onward Group has a system in place that ensures a swift and appropriate
response to rapid changes in the business environment.
Moreover, the Group has introduced an executive officer system (five male executive officers
but no female representation at this time) with the aim of clarifying management decision-making
and business execution functions. In order to facilitate flexible decision-making on a Groupwide basis, the Onward Group Strategy Meeting, which primarily comprises directors and operating officers
from Group companies, is in place to review the management strategies and important management matters of operating companies and confirm the status of operations.
The Onward Group also has advisory contracts with a number of attorneys to receive legal
advice.

Reasons for the Appointment of Outside Audit & Supervisory Board Members

The Company’s directors conduct annual self-evaluations to assess the effectiveness and appropriateness of the Board of Directors’ management oversight function as well as the degree of accomplishment of their own duties. The results of these evaluations are reported to the Board of
Directors. Based on these self-evaluations, the Board of Directors analyzes and evaluates its overall
effectiveness, disclosing an overview of the results.

Name

Reasons for Appointment as an Outside Audit & Supervisory Board Member and Status of Attendance in FY02/22

Ryu
Umezu

We have elected Mr. Umezu as an Outside Audit & Supervisory Board Member because we are
expecting him to use his wealth of knowledge, insight, and specialties from his experience as an
attorney, particularly his robust insight and experience pertaining to capital market transactions andfinancial transactions, in audits of the Company. He attended 11 out of 11 (100%) Board of
Directors’ meetings and 16 out of 16 (100%) Audit & Supervisory Board meetings.

Mitsuyo
KusanoWe have elected Ms. Kusano as an Outside Audit & Supervisory Board Member because we are
expecting her to use her wide-ranging experience and robust insight from her years of experience inthe media industry and her time on expert panels of government committees in audits of theCompany. She attended 11 out of 11 (100%) Board of Directors’ meetings and 16 out of 16 (100%)
Audit & Supervisory Board meetings.

For the Independence Standards for Outside Directors and Outside Audit & Supervisory Board Members, please
WEB refer to the Corporate Governance Policy on the Company’s website.
https://www.onward-hd.co.jp/en/company/policy_en.pdf

Nomination and Compensation Committee
The Nomination and Compensation Committee functions as both a nominating committee and acompensation committee. The Nomination and Compensation Committee responds to consultations from the Board of Directors by discussing matters pertaining to the nomination and compensation of directors. The results of these discussions are reported to the Board of Directors.
The Nomination and Compensation Committee is to comprise three or more members selected by the Board of Directors, a majority of whom should be outside directors designated as independent directors.

Evaluation of the Effectiveness of the Board of Directors

1. Scope of evaluations
All directors and Audit & Supervisory Board members
2. Procedures for evaluations
Self-evaluation via questionnaire
Support for evaluations provided by external advisor
3. O verview of results of analysis and evaluation of Board of Directors’ effectiveness in
FY02/22
Board of Directors effectively exercising functions for establishing management strategies
and targets, resolving management issues, and overseeing business execution in accordancewith Onward’s Corporate Governance Basic PolicyC urrent composition, discussion quality, and operation methods of Board of Directors
generally appropriate
O ngoing examination of diversity of the Board of Directors, monitoring of operational
execution, and number of agenda items and materials for the Board of Directors’ meetings
as well as more efficient operation required in the fiscal year ending February 2023 for
improvements to the effectiveness of the Board of Directors

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Corporate Information

Sustainable Management

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Corporate Governance

Key Financial Data
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Corporate GovernanceDirectors’ and Audit & Supervisory Board Members’ Compensation
Policies for Deciding Amounts of and Calculation Methods for Directors’ and Audit & Supervisory Board Members’ Compensation
 olicies for Deciding Amounts of Directors’ and Audit & Supervisory Board Members’ Compensation
P
Compensation paid to directors and Audit & Supervisory Board members of the Company comprises
basic compensation and compensation for the purpose of acquiring Company stock, which are fixedcompensation, and bonuses, which are performance-linked compensation.
Outside Directors and Audit & Supervisory Board members only receive basic compensation fromthe standpoint of maintaining independence.
Additionally, the Nomination and Compensation Committee, the majority of the members of which
are outside directors, was established as a voluntary advisory body to the Board of Directors. The
amount allocated to individual directors is determined by the Board of Directors, upon discussion of thematters relating to the nomination and compensation of directors by the Nomination and Compensation
Committee and reports to the Board of Directors.
i. Basic Compensation
Basic compensation is paid to directors and Audit & Supervisory Board members based on predefined
standards that take into account factors such as full-time or part-time status, role, rank, years of service,
and performance evaluations. Specific amounts of compensation paid to directors are determined by the
Board of Directors while amounts of compensation paid to Audit & Supervisory Board members are
determined through discussions among Audit & Supervisory Board members.
ii. Compensation for the Purpose of Acquiring Company Stock
In June 2015, the Company replaced the prior stock options with compensation for the purpose of
acquiring Company stock, with the aim of improving the motivation of directors to pursue stock priceincreases and business performance improvements. Compensation for the purpose of acquiring
Company stock is paid to directors (excluding outside directors).
iii. Bonuses
Bonuses are paid to directors (excluding outside directors) based on the Company’s consolidated
performance, etc. for the given fiscal year.
The authority to determine the amount of compensation, etc. for directors of the Company and thepolicy for determining the calculation method is held by the Board of Directors. The amount ofcompensation, etc. is determined within the total amount approved by the general meeting ofshareholders by comprehensively taking into account factors such as the director’s duties, the businessperformance of each fiscal year, and the degree of the director’s contribution.
The compensation, etc. for Audit & Supervisory Board members is determined through discussions
among Audit & Supervisory Board members within the compensation amount approved by the general
meeting of shareholders upon taking into account factors such as full-time or part time status and thedivision of duties.
 esolutions by the General Meeting of Shareholders with Regard to Directors’ and Audit & Supervisory
R
Board Members’ Compensation
The upper limit for the compensation paid to directors was resolved at ¥500 million a year (including¥30 million a year for outside directors) at the 60th Annual General Meeting of Shareholders held on
May 24, 2007. The number of directors at the time of the resolution was seven.

Additionally, at the 74th Annual General Meeting of Shareholders held on May 27, 2021, it was
resolved to maintain the upper limit for total compensation paid to directors (at ¥500 million a year) but
to revise the upper limit paid to outside directors from ¥30 million a year to ¥50 million a year. The
number of directors at the time of the resolution was seven.
The upper limit for the compensation paid to Audit & Supervisory Board members was resolved at¥60 million a year at the 48th Annual General Meeting of Shareholders held on May 25, 1995. The
number of Audit & Supervisory Board members at the time of resolution was four.
Performance Indicators and Method for Determining the amount of Performance-Linked Compensation
Bonuses are paid as performance-linked compensation. The purpose of this compensation is to reflect
single-year business performance in compensation, heighten motivation for improving businessperformance, increase focus on accomplishing management targets, and clearly evaluate successes.
Bonuses are based on Companywide performance in accordance with the same standards used to
calculate the bonuses of employee ranks and adjusted based on performance evaluations thatcomprehensively account for factors such as the degree of accomplishment of target indicators for
management accounting that include sales and profit and loss in the areas of responsibility assigned toeach director at the beginning of each fiscal year.
Performance evaluations are determined at the Onward Group Strategy Meeting attended bydirectors, Audit & Supervisory Board members, and executive officers.

Total Amount of Compensation Paid by Classification of Directors and Audit & Supervisory
Board Members, Total Amount of Compensation Paid by Type of Compensation, and Number
of Eligible Directors and Audit & Supervisory Board Members
Total Amount of Compensation Paid by Type ofCompensation (Millions of yen)Classification

Directors(of which, Outside Directors)

Audit & Supervisory
Board Members(of which, Outside Audit &Supervisory Board Members)

Total

Total Amount ofCompensation
Paid(Millions of yen)Fixed Compensation

Performance-Linked
Compensation

Number of
Eligible Directors
and Audit &Supervisory
Board Members

BasicCompensation

Compensation
for the Purposeof Acquiring
Company Stock

Bonuses236 (33)

162 (33)49 (−)23 (−)7 (3)

52 (16)52 (16)

− (−)

− (−)

4 (2)

288 (49)215 (49)

49 (−)23 (−)

11 (5)

Note: As of February 28, 2022, the Company had seven directors and four Audit & Supervisory Board members.

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Corporate Information

Sustainable Management

Corporate Governance

Segment Information

Key Financial Data
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Corporate GovernanceTraining of Directors, Audit & Supervisory Board Members, and Executive Officers

Initiatives for Compliance

The Company offers opportunities for directors, Audit & Supervisory Board members, and executive
officers to acquire the knowledge necessary for performing their duties along with opportunities
for ongoing self-study to ensure that they are able to fulfill their roles and responsibilities. In addition, discussions are held with new directors, Audit & Supervisory Board members, and executive
officers upon their appointment regarding the Company’s management, business, and financial
strategies; important relevant matters; and identification of issues faced by the Onward Group andtheir solutions. Outside directors and outside Audit & Supervisory Board members, meanwhile, areprovided with explanations of the Company’s business and organizational structures when they areappointed, and necessary information pertaining to issues faced in business activities and othermatters is supplied regularly.

As for initiatives for compliance, the Group created the Compliance Manual to clearly outline thedirection of compliance activities and define standards for adhering to ethical concerns and social
norms. The Onward Group Compliance Committee takes the lead in conducting continuous educational activities, including in-house training, as a part of efforts to ensure widespread awarenessand understanding. Moreover, the Group strives to maintain and improve product quality and subsequently raise customer satisfaction by utilizing its expertise in quality control through the Japan
Apparel Quality Center. In addition, the Company will continue to improve the working environments at our partner factories through the Onward-Approved Factory System as a facet of its supply chain management.
Also, in terms of the Act on the Protection of Personal Information, the Company has established Guidelines on the Protection of Personal Information and continuously carries out training byconducting seminars for all officers and employees.

Policies for Cross-Shareholdings and Exercise of Related Voting Rights
In addition to stocks held purely for investment purposes, the Company may hold shares of listedcompanies with the aim of maintaining and strengthening business relationships and thereby improving medium-to-long-term corporate value. With regard to cross-shareholdings, the Board of Directors will conduct annual assessments of the meaningfulness and economic rationality of theseholdings, taking into account growth potential, profitability, strengthening of business relationships,
etc., from the perspective of controlling shareholding risk and capital efficiency. Our basic policy is
to sell those holdings that are deemed to no longer be appropriate after gaining the understandingof the business partner in question. In addition, holdings that have been deemed appropriate may
also be sold in light of the market environment, management and financial strategies.
Furthermore, with respect to the exercise of voting rights related to cross-shareholdings, in order to ensure appropriate responses, the Company deliberates on each agenda item in accordancewith the following criteria from the perspective of the medium-to long-term improvement of thecorporate value of the business partner in question and medium-to long-term increases to the economic benefits for the Company and Group companies, and make a comprehensive decision on
approval or disapproval at the Board of Directors meeting each year.
(1) Whether the counterparty has been suffering from a significant and ongoing deterioration inbusiness performance?
(2) Whether the counterparty has engaged in any antisocial activities or otherwise lost the trust ofsociety?
(3) Whether there are any proposals submitted that may harm the interests of shareholders?

Compliance System
Recognizing that society as a whole increasingly expects it to improve its compliance systems, theOnward Group has positioned compliance as an important issue for management. Furthermore, byenhancing its corporate governance systems, the Company aims to earn high levels of trust amongits customers and shareholders and from society as a whole.
The Company has established the Onward Group Compliance Committee as an organizationfor overseeing the Company’s compliance structure.

Risk Management System
The Onward Risk Management Regulations were established with the purpose of guiding the development of the Company’s risk management system. The Compliance Division is responsible forthe development of the risk management system, the identification of issues, and the formulationof risk-management-related plans. The division reports to the Board of Directors. An effective system is in place to address natural disaster risk, information system risk, and other risks that may
severely impact the continuation of business. Additionally, the Board of Directors works in cooperation with external professionals as the situation requires in order to respond appropriately to suchrisks.

Dialogues with Shareholders
The Company conducts various investor relations (IR) activities, and the IR Division has been established as a dedicated body for ensuring the functionality of these activities. This division maintains
close coordination with Corporate Planning, Accounting, Legal Affairs, and other relevant divisions.
It also reports the opinions and requests obtained through IR activities to the Onward Group Strategy Meeting and the Board of Directors for use in discussions regarding measures for improving
corporate value.

Periodic briefings for analysts and institutional investors
The officer responsible for IR information disclosure plays a central role in holding periodic
briefings for analysts and institutional investors at which we explain our financial results andbusiness strategies.
Provision of IR materials on corporate website
An extensive amount of information is disclosed through Onward Holdings’ corporatewebsite. Please refer to this website for information on various topics.
WEB

https://www.onward-hd.co.jp/en/ir/library/

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Corporate Governance

Key Financial Data
PRINT

Message from Outside Director

At this turning point in management, I will use the knowledge I have accumulated,
together with a sense of urgency to contribute to the discussions of the Board of Directors.
As an outside director, how do you make use of

Q1. your background and experience?

Akira Kawamoto

Outside Director (Independent Director)
Career summary
Apr. 1981	Joined Ministry of International Trade and Industry(currently Ministry of Economy, Trade and Industry)
Aug. 1995	Organization for Economic Co-operation and Development (OECD) (Paris)
Jan. 2001	Manager of Electricity Market Division, Electricity
and Gas Industry Department, Agency for Natural
Resources and Energy
July 2009	Deputy Director-General of Economic and Industrial
Policy Bureau, Ministry of Economy, Trade and Industry
Oct. 2012	Senior Partner of Aspirant Group Inc. (current position)
Apr. 2013	Professor of Faculty of Economics of Keio University(current position)
Mar. 2014	Outside Director (Audit and Supervisory Committee
Member) of Future Corporation (current position)
May 2018	Outside Director of the Company (current position)

During my time as a bureaucrat working in the Ministry of Economy, Trade and Industry (METI) and the Organization for Economic Co-operation and Development (OECD), I have worked invarious policy fields such as industrial policy, macroeconomics,
environmental issues, and regulatory reforms. Since leaving mypost as a bureaucrat, I have been engaged in fund management
and taught at universities. I was appointed as an outside directorof the Company in May 2018, and have worked to reflect theknowledge I have gained through my experiences in the discussions of the Board of Directors of the Company.
Specifically, I have engaged in risk management based on diverse perspectives. I have also been conscious of proposing
countermeasures at meetings of the Board of Directors, by verbalizing bad scenarios, such as human rights issues becoming
geopolitically important issues and affecting supply chains, andthe COVID-19 pandemic becoming more serious and causing demand to drop sharply, and visualizing various probable risks.
Another contribution I have made is based on my experience at a private equity fund company. Examples of this include
alerts for meticulous management monitoring, as well as advice
for M&A with regard to building a business portfolio.

How do you assess the operational status of theQ2. Board of Directors?

The Group is approaching a turning point in many respects, as
we have been experiencing difficult times, and have continued
the business reforms that started in the fall of 2019, as well as
our response to the COVID-19 pandemic. I believe that theBoard of Directors of the Company has a structure that enables
the active exchange of opinions from diverse perspectives, aswell as bold decision-making. Since I was appointed as an outside director, the discussion that left the greatest impression onme was the decision to implement unprecedented major

reforms, in the form of global business reforms. In the course of
these discussions, I emphasized the importance of speedy discussion and execution.
With regard to governance, the Nomination and Compensation Committee, which we established in February of last year is
helping to improve transparency. While there is no perfect formof governance, it is important to continue considering optimal
systems for the Group, in response to changes in our environment and needs.

What sort of expectations and challenges are

Q3. there for the Group to achieve sustainable growth?
The Group has connections with many stakeholders, including
consumers. I also feel that each and every employee is highly
aware of sustainability, such as getting involved in the recycling
business from an early stage. Following the Onward Group’s Raison D’etre of “enriching and adding color to people’s lives while
caring for the planet,”
which was announced in
April 2021, we haveplaced a great deal ofemphasis on environmental initiatives. Moving forward, it will be importantto take these efforts to a
deeper level.
In terms of diversity,
we are actively working
to promote diversity witha focus on the empowerment of female employees. We will continue to
steadily develop internal
human resources, and theBoard of Directors will
also monitor progress ona regular basis.

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Key Financial Data
PRINTManagement Team

Daisuke
Ikeda

Osamu
Sato

YoshieKomuroAkira
Kawamoto

Michinobu
Yasumoto

Kenji
Chishiki

Ryu
Umezu

Mitsuyo
KusanoNobuyoshi
Onogi

Director

Director

OutsideDirector

OutsideDirector

President andCEO

Director andVice President

Outside Audit& Supervisory
Board Member

Outside Audit Standing Audit& Supervisory & Supervisory
Board Member Board Member

Hikosaburo
Seike
Standing Audit& Supervisory
Board Member

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Key Financial DataPRINT

Key Fin an c ial Data

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Corporate Information

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Key Financial Data
PRINT

11 Years of Key Financial Data
(Millions of yen)

FY02/12

FY02/13

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19

FY02/20

FY02/21

FY02/22Net sales

242,402258,369

280,007281,501

263,516

244,900

243,075

240,652

248,233

175,899

168,453

Cost of sales

127,288

133,878

149,270

152,438

144,063

131,638

129,498

129,019

135,550

105,196

80,841

Selling, general and administrative expenses

104,159

113,298

120,537

123,332

115,674

109,059

108,409107,171

115,744

90,876

88,691

Operating profit

10,953

11,192

10,200

5,731

3,778

4,203

5,167

4,461

(3,061)(20,173)(1,079)Recurring profit

13,32913,405

12,211

7,162

5,504

5,577

5,928

5,161

(3,835)(20,174)

507

Income taxes - current

7,528

7,398

3,111

5,033

8,679

1,533

3,305

1,244

1,653

814

2,695

Profit attributable to owners of parent

3,529

4,503

4,658

4,204

4,278

4,744

5,366

4,948

(52,135)(23,181)

8,566

Cash flows from operating activities

13,180

10,137

13,361

16,490

3,632

6,844

13,228

4,635

8,003

(19,614)

7,814

Cash flows from investing activities(1,961)(10,682)(14,300)(15,656)

1,782

25,270(7,299)(10,305)(10,758)

6,091

21,685

Cash flows from financing activities(7,449)(7,848)

2,121

757

(6,357)(32,856)(6,593)

11,542(1,595)5,860(36,173)

Free cash flow

11,219

(545)

(939)

834

5,414

32,114

5,929(5,670)(2,755)(13,523)

29,499

Capital expenditures

6,230

8,948

16,75026,884

15,955

10,59912,05813,472

9,533

6,501

5,657

Depreciation and amortization

5,478

5,721

6,800

7,218

7,799

6,662

6,334

6,510

6,392

5,659

4,605

Cash and deposits

33,192

24,677

27,37531,122

29,40726,09626,33431,284

28,79521,301

15,209Current assets

98,895

100,321110,349

117,051

121,468

103,572

105,977

114,324

106,782

80,46060,508Property, plant and equipment

82,987

86,861

102,878

109,658

106,695

92,26893,71496,717

83,231

71,82558,042

Total assets

276,939

286,779

313,430

340,854

313,454273,226

278,133

287,554234,316

196,052

157,727

Current liabilities

84,091

100,740

101,009109,619

106,10985,68486,384105,405

108,743

99,54955,761

Shareholders’ equity

176,320

177,141

178,077

179,879

176,263

169,027

168,341

167,429

105,023

68,92675,030Net assets

157,302165,372

175,028

185,315

172,337

165,670

168,152

162,210

94,03659,50977,257

Basic earnings per share (EPS) (Yen)

22.52

28.71

29.69

26.78

28.27

31.47

36.97

35.24

(383.97)(171.18)

63.17

Net assets per share (Yen)995.11

1,043.64

1,102.99

1,166.89

1,101.21

1,116.47

1,155.04

1,148.30

665.17418.32493.14

Cash dividends (Yen)

24.00

24.00

24.00

24.00

24.00

24.00

24.00

24.00

24.00

12.00

12.00

Payout ratio (%)

106.6

83.6

80.8

89.6

86.5

74.0

63.7

66.9

—

—

19.0

ROE (%)

2.3

2.8

2.8

2.4

2.4

2.8

3.3

3.1

(42.0)(31.6)

13.9

ROA (%)

4.8

4.8

4.1

2.2

1.7

1.9

2.2

1.8

(1.5)

(9.4)

0.3

Operating profit margin (%)

4.5

4.3

3.6

2.0

1.4

1.7

2.1

1.9

(1.2)

(11.5)(0.6)

Gross profit margin (%)

47.5

48.2

46.7

45.8

45.3

46.2

46.7

46.4

45.4

40.2

52.0

SG&A expenses / Net sales (%)

43.0

43.9

43.0

43.8

43.9

44.5

44.6

44.5

46.6

51.7

52.7

Shareholders’ equity ratio (%)

56.3

57.1

55.2

53.8

54.2

59.8

59.2

55.1

38.3

28.9

42.4

Number of full-time employees (Consolidated)

3,993

5,208

5,224

4,973

5,119

4,456

4,530

4,643

5,153

7,498

6,377

Notes: 1. T he Company has applied “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30, March 26, 2021) early, from the beginning of the fiscal year ended
February 28, 2022.
2. The presentation method has been changed from the fiscal year ended February 28, 2022, and therefore, with regard to net sales and operating profit for the previous fiscal year, the Company states figures after reclassification that reflect this change in the presentation method.
3. The increase in the number of employees (consolidated) in and after the fiscal year ended February 28, 2021, is mainly due to the changes in the employment categories of the Company and Onward Kashiyama Co., Ltd.

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46

Analysis of Financial Position, Operating Results and Cash Flows
Overview of Operating Results, etc.
During the fiscal year under review, the Japanese economy remained in a difficult situation due to theprolonged impact of COVID-19, such as stay-at-home due to the application of the priority measures
such as for prevention of the spread of disease taken on account of the rapid spread of the Omicron
variant and rising prices of raw materials, even though the spread of infection was temporarily suppressed by improved vaccination rates and other factors.
In these circumstances, the Group has steadily promoted the integration of physical stores ande-commerce as a priority measure in the Apparel Business and expanded the number of OMO (Online Merges with Offline)-type stores which introduced the “Click & Try” service, as well as reduced
loss of sales opportunities caused by out of stock items through full-scale operation of an integrated
inventory management system, thus realizing net sales growth and higher gross profit margins in both
existing physical stores and e-commerce.
Due to the global business reforms that have been conducted since the fiscal year ended February 29, 2020, such as abolitions and closures of unprofitable businesses and unprofitable stores,
operating profitability significantly improved. In addition, thanks to efforts at restoring financial healthmainly by securitizing non-current assets and streamlining fund management, the shareholders’ equity
ratio at the end of the fiscal year under review increased by 13.5pt from the end of the previous fiscal
year to 42.4%.
As a result of the above, consolidated net sales amounted to ¥168,453 million (a 4.2% decreaseyear-on-year), a consolidated operating loss was recorded at ¥1,079 million (an operating loss of¥20,173 million for the previous fiscal year), a consolidated recurring profit was recorded at ¥507 million (a recurring loss of ¥20,174 million for the previous fiscal year), and profit attributable to ownersof parent amounted to ¥8,566 million (a loss attributable to owners of parent of ¥23,181 million forthe previous fiscal year).

Status by Business Segment[Apparel Business]
In the domestic business, Onward Kashiyama Co., Ltd., which is a core operating company, abolished and closed unprofitable businesses and unprofitable stores and steadily executed sales strategies such as expanding OMO stores. As a result, it increased net sales and significantly reduced
losses. Despite a decrease in sales at Onward Trading Co., Ltd., which conducts a B2B business,
profit increased owing to robust net sales in the highly profitable uniform business. Sales also grewat Tiaclasse Co., Ltd., whose main sales channel is e-commerce, and at Onward Personal Style Co.,
Ltd., which is developing the KASHIYAMA made-to-order suit brand that has garnered high praisefor its interview suits.
In the overseas business, due mainly to withdrawal from unprofitable businesses under the
global business reforms, profitability improved, and the profit and loss improved significantly.
As a result, the loss was significantly reduced despite a decrease in sales for the Apparel Business as a whole.
[Lifestyle Business]
Sales increased significantly, and profitability was restored at Chacott Co., Ltd., which operates awellness business, due to the recovery of orders received for its mainstay ballet products, which

faced severe circumstances due to the impact of COVID-19 pandemic in the previous fiscal year.
Sales and profit increased at Yamato Co., Ltd., which conducts a gift business, at Creative Yoko Co.,
Ltd., which is engaged in a pet and home life business, and at KOKOBUY Co., Ltd., which conductsa beauty and cosmetics business.
Meanwhile, sales continued to decrease at Onward Beach Resort Guam, Inc., which operates
a hotel business in Guam, due to a sharp decline in visitors to Guam.
As a result, both sales and profit increased for the Lifestyle Business as a whole.

Cash Flows
Cash flows provided by operating activities amounted to ¥7,814 million (an outflow of ¥19,614 million
for the previous fiscal year) mainly due to a profit
before income taxes, an impairment loss, a decreasein trade receivables, and a decrease in trade payables.
Cash flows provided by investing activities
amounted to ¥21,685 million (an inflow of ¥6,091
yen for the previous fiscal year) mainly due to proceeds from sales of property, plant and equipment
and sales of shares of subsidiaries resulting inchange in scope of consolidation.
Cash flows used in financing activities amounted to ¥36,173 million (an inflow of ¥5,860 million
for the previous fiscal year), which primarily included a net increase (decrease) in borrowings and repayment of long-term borrowings.
As a result, cash and cash equivalents at theend of the fiscal year under review decreased by¥6,070 million compared with the end of the previous fiscal year to ¥15,199 million.

C as h Fl ow s
(Billions of yen)

Cash and cash
equivalents at
beginningof period
21.2

Cash flows frominvesting activities
21.6

Cash flows fromoperating activities
7.8

Cash and cash
equivalents at
end of period
15.1
Effect ofexchange ratechange on cash
and cashequivalents
0.6(36.1)Cash flows fromfinancing activities
As of Feb. 28, 2021

As of Feb. 28, 2022

Production, Orders and Sales
a. Production
The results of production by segment during the fiscal year under review are as follows.
Given the difficulty of defining production in the Lifestyle Business, the figures for “Production”
are not given.
Segment

Amount (Millions of yen)

YoY Change (%)

Apparel Business

17,57245.3

Notes: 1. Figures represent manufacturing costs.
2. The above amounts do not include consumption taxes, etc.

Corporate Information

CONTENTS

Sustainable Management

Segment Information

Corporate Governance

Key Financial Data
PRINT

Analysis of Financial Position, Operating Results and Cash Flowsb. Orders
The Group engages in mostly Make-to-Stock production rather than Make-to-Order production.
Furthermore, items produced by Make-to-Order are also produced by Make-to-Stock, and it isreforms. Profit (loss) before income taxes improved by ¥39,473 million from the previous fiscal year to¥13,912 million and profit (loss) attributable to owners of parent improved by ¥31,748 million to¥8,566 million.

difficult to calculate them separately. Therefore, descriptions are omitted.

Net salesc. Sales(Billions of yen)

175.8

The results of sales by segment during the fiscal year under review are as follows.
Segment

Amount (Millions of yen)

99.7

Overseas

17,838

47.6

Total

138,354

87.4

Lifestyle Business

39,655

107.2

Consolidated Total

168,453

95.8

Apparel Business

Recurring profit (loss)

Profit (loss) attributableto owners of parent

168.4

YoY Change (%)

120,516

Domestic

Operating loss

8.5
(20.1)

FY02/21 FY02/22(1.0)

FY02/21 FY02/22(20.1)

0.5(23.1)

FY02/21 FY02/22

FY02/21 FY02/22

Notes: 1. The figures under each segment represent the sum of the individual companies and the consolidated total includes eliminations.
2. The above amounts do not include consumption taxes, etc.

Analysis of Operating Resultsa. Net Sales and Gross Profit
Net sales decreased by ¥7,445 million to ¥168,453 million due to the effects of business withdrawals, etc., as part of the global business reforms.
Gross profit increased by ¥16,909 million from the previous fiscal year to ¥87,612 million and thegross profit margin improved by 11.8pt due to the effects of the global business reforms as well as
fewer loss of sales opportunities, thanks to the implementation of the centralized inventory control
system.
b. Operating Loss and Recurring Profit
Selling, general and administrative expenses decreased by ¥2,184 million from the previous fiscal yearto ¥88,691 million. This was due to the increase of ¥9,752 million as a result of the application of the
new revenue recognition standard and the decrease of ¥11,936 million as a result of cutting fixed
costs and the effects of the global business reforms.
As a result, operating loss improved by ¥19,094 million from the previous fiscal year to ¥1,079
million and recurring profit (loss) improved by ¥20,681 million from the previous fiscal year to a recurring profit of ¥507 million.
c. Profit Before Income Taxes and Profit Attributable to Owners of Parent
Extraordinary income amounted to ¥21,327 million as a result of gain on sales of non-current assets
and gain on sales of shares of subsidiaries and associates. Extraordinary losses amounted to ¥7,921
million as a result of reporting “extraordinary loss due to closing and other” under extraordinary losses for the fixed costs incurred during the period of closures under the declaration of the state of
emergency, in addition to the reporting of loss on sales of shares of subsidiaries and associates, loss
on liquidation of subsidiaries and associates, and impairment loss as part of the global business

Analysis of Financial Positiona. Assets
Total assets decreased by ¥38,324 million compared withthe end of the previous fiscal year to ¥157,727 million. Current assets decreased by ¥19,952 million due to decreases
in cash and deposits, notes and accounts receivable—trade,and contract assets, etc. Non-current assets decreased by¥18,372 million due to the sale of property, plant and equipment, etc.
b. Liabilities
Total liabilities decreased by ¥56,073 million compared withthe end of the previous fiscal year to ¥80,470 million. Current liabilities decreased by ¥43,788 million due to decreases in short-term borrowings, notes and accounts payable—
trade, etc., and non-current liabilities decreased by ¥12,284
million due to decreases in long-term lease obligations,long-term borrowings, etc.
c. Net assets
Total net assets increased by ¥17,748 million comparedwith the end of the previous fiscal year to ¥77,257 million.
Shareholders’ equity increased by ¥6,104 million due to profit attributable to owners of parent, dividends of surplus, theincrease in retained earnings at the beginning of the period
due to changes in the accounting policies, and others. Accumulated other comprehensive income increased by ¥4,058
million due to an increase in foreign currency translation adjustment and others.

F i n a n c i a l Pos i t i on
(Billions of yen)

Total assets
157.7

Current
assets60.5

Non-current
assets97.2

Liabilities andnet assets
157.7

Liabilities
80.4

Net assets
77.2

As of Feb. 28, 2022

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Consolidated Financial Statements
Consolidated Balance Sheets(Millions of yen)

As of February 28,
2021
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable—trade
Notes and accounts receivable—trade, and contract assets
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Long-term prepaid expenses
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets(Millions of yen)

As of February 28,
2022

21,301
18,251—
28,909
1,010
4,435
6,829
(277)
80,46015,209—14,20423,908
449
2,478
4,509
(252)
60,50861,909(37,592)
24,31635,2599,969(5,618)4,351
26,766(18,868)
7,898
71,82558,027(35,019)
23,00823,371
9,998(6,239)3,759
25,158(17,254)
7,903
58,042

5,251
5,416
10,667

4,631
4,717
9,349

14,312
1,662
440
2,814
7,486
6,674
(292)
33,099115,592
196,052

14,117
1,683
524
3,248
4,338
6,078
(163)
29,827
97,219157,727

As of February 28,
2021
Liabilities
Current liabilities
Notes and accounts payable—trade
Electronically recorded obligations—operating
Short-term borrowings
Current portion of long-term borrowings
Lease obligations
Income taxes payable
Provision for bonuses
Provision for bonuses for directors
Provision for sales returns
Provision for point card certificates
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Lease obligations
Deferred tax liabilities for land revaluation
Retirement benefit liability
Provision for retirement benefits for directors and corporate auditors
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

As of February 28,
2022

13,4728,484
56,566
5,052
2,040
669
589
25
125
636
11,887
99,5496,361
11,86018,705
4,053
854
2,022
626
50
—
—
11,22555,761

16,43011,615
761
3,482
232
1,661
2,809
36,993
136,543

12,377
3,676
241
2,858
247
2,503
2,804
24,70980,47030,07950,3909,321(20,865)
68,92630,07950,39015,391(20,831)75,030(1,939)15(7,864)(1,669)(744)(12,202)138
2,646
59,509196,052(1,646)
1(5,698)(328)(472)(8,144)122
10,24877,257
157,727

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Consolidated Financial Statements
Consolidated Statements of Income(Millions of yen)

For the fiscal year
ended February 28,
2021
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating loss
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Subsidy income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on disposal of salesfloor fixtures, etc.
Foreign exchange losses
Share of loss of entities accounted for using equity method
Non-deductible consumption taxes
Other
Total non-operating expenses
Recurring profit (loss)
Extraordinary income
Gain on sales of investment securities
Gain on sales of non-current assets
Gain on sales of shares of subsidiaries and associates
Subsidies for employment adjustment, etc.
Other
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Loss on sales of shares of subsidiaries and associates
Impairment loss
Loss on liquidation of subsidiaries and associates
Loss on liquidation of business
Extraordinary loss due to closing and other
Other
Total extraordinary losses
Profit (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent

Consolidated Statements of Comprehensive Income

For the fiscal year
ended February 28,
2022

175,899
105,196
70,70290,876(20,173)

168,453
80,841
87,612
88,691(1,079)

55
193
—
884
820
1,954

52
1,340
99
1,013
917
3,423

595
213
443
70
166
466
1,955
(20,174)

391
96
—
73
252
1,022
1,836
507

8
8,416
154
1,696
237
10,513105
17,921
2,944
289
67
21,327

1,685
5,171
3,299
—
953
3,893
896
15,899(25,560)
814(3,706)(2,892)(22,668)513(23,181)

—
1,829
1,741
1,968
—
1,620
761
7,921
13,912
2,695
2,523
5,218
8,693
127
8,566

(Millions of yen)

For the fiscal year
ended February 28,
2021
Profit (loss)

For the fiscal year
ended February 28,
2022(22,668)

8,693

2,642

292

Other comprehensive income
Valuation difference on available-for-sale securities

(7)

(13)

Revaluation reserve for land

1,064

1,042

Foreign currency translation adjustment(1,081)

1,370

Deferred gains or losses on hedges

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

17

272

2,635

2,963

(20,032)

11,657(20,529)

11,501

497

155

Comprehensive income attributable to:
Owners of parent
Non-controlling interests

Notes: 1. T he Company has applied “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30, March 26, 2021) early, from the
beginning of the fiscal year ended February 28, 2022.
2. T he presentation method has been changed from the fiscal year ended February 28, 2022, and therefore, with regard to net sales andoperating profit for the previous fiscal year, the Company states figures after reclassification that reflect this change in the presentation
method.

49

CONTENTS

Corporate Information

Sustainable Management

Segment Information

Corporate Governance50

Key Financial Data
PRINT

Consolidated Financial Statements
Fiscal year ended February 28, 2021 (from March 1, 2020 to February 28, 2021)(Millions of yen)

Shareholders’ equity
Share
capitalBalance as at March 1, 2020

Capitalsurplus30,079Retainedearnings

50,043Cumulative effects of changes in accounting policies
Restated balance

Accumulated other comprehensive income

Treasuryshares46,338Valuation
Total
difference onshareholders’available-forequity
sale securities(21,437)

105,023(10,011)30,07950,043(4,581)

Deferred
gains orlosses onhedges

Revaluation
reserve for
land

22

(9,285)

Share
Foreign
Total accumulated
Remeasurements
acquisition
currency
otherof definedrightstranslation
comprehensive
benefit plansadjustment
income
(604)

(762)

(15,211)484

Noncontrollinginterests

Total net
assets

3,740

94,036(10,011)36,326(21,437)

95,012(10,011)(4,581)22(9,285)

(604)

(762)

(15,211)

484

3,740

84,025

Changes during period
Dividends of surplus(3,240)(3,240)(3,240)Loss attributable to owners of parent(23,181)(23,181)(23,181)

Purchase of treasury shares
Disposal of treasury shares(225)

Reversal of revaluation reserve for land
Change in ownership interest of parent due totransactions with non-controlling interests

(0)

(0)

(0)

571

345

345

(356)

(356)

347

347

(356)
347

Net changes in items other than shareholders’ equity

2,642

(7)

1,421

(1,065)

17

3,008

(345)

(1,093)

1,569

—

347

(27,005)571(26,085)

2,642

(7)

1,421

(1,065)

17

3,008

(345)

(1,093)(24,516)

30,07950,3909,321(20,865)

68,926(1,939)15(7,864)(1,669)(744)(12,202)

138

2,646

59,509Total changes in items during period
Balance as at February 28, 2021

Fiscal year ended February 28, 2022 (from March 1, 2021 to February 28, 2022)(Millions of yen)

Shareholders’ equity
Share
capitalBalance as at March 1, 2021

Capitalsurplus30,079Retainedearnings

50,390

Cumulative effects of changes in accounting policies
Restated balance

9,321

Accumulated other comprehensive income

Treasuryshares(20,865)272
30,07950,3909,594

Valuation
Total
difference onshareholders’available-forequity
sale securities
68,926

Share
Foreign
Total accumulated
Remeasurements
acquisition
currency
otherof defined benefit
rightstranslation
comprehensiveplans
adjustment
incomeDeferred
gains orlosses onhedges

Revaluation
reserve forland(1,939)15(7,864)(1,669)(744)(12,202)(1,939)15(7,864)(1,669)(744)(12,202)

Noncontrollinginterests

Total net
assets138

2,646

59,509138

2,646

59,781

272(20,865)

69,198272

Changes during period
Dividends of surplus(1,627)(1,627)(1,627)

Loss attributable to owners of parent

8,566

8,566

8,566

Purchase of treasury shares
Disposal of treasury shares(18)

Reversal of revaluation reserve for land

(0)

(0)

(0)

34

16

16

(1,124)(1,124)

Net changes in items other than shareholders’ equity
Total changes in items during period
Balance as at February 28, 2022

(1,124)
292

(13)

2,166

1,341

272

4,058

(16)

7,601

11,644

—

—

5,797

34

5,831

292

(13)

2,166

1,341

272

4,058

(16)

7,601

17,47530,07950,39015,391(20,831)75,030(1,646)

1(5,698)

(328)

(472)

(8,144)122

10,24877,257

CONTENTS

Corporate Information

Sustainable Management

Segment Information

Corporate Governance

Key Financial Data
PRINT

Consolidated Financial Statements
Consolidated Statements of Cash Flows(Millions of yen)

For the fiscal year
ended February 28,
2021
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using equity method
Loss (gain) on disposal of non-current assets
Loss on disposal of salesfloor fixtures, etc.
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on sales of shares of subsidiaries and associates
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Income taxes refund
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of long-term prepaid expenses
Payments of guarantee deposits
Proceeds from refund of guarantee deposits
Payments for sales of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from sales of shares of subsidiaries resulting inchange in scope of consolidation
Other, net
Net cash provided by (used in) investing activities(Millions of yen)

For the fiscal year
ended February 28,
2022(25,560)
5,659
3,299
786
(56)
(109)
23
(249)
595
70
(8,135)
213
(4)
1,685
5,017
8,418
6,578
(10,112)(8,691)(20,572)
252
(421)
(743)
1,871
(19,614)

13,912
4,605
1,741
766
(123)
(434)
(217)
(1,392)391
73(17,778)
96(104)—(1,114)
1,004
3,405(1,013)
3,703
7,523
245
(425)
(2,064)
2,536
7,814

(91)
75
(4,249)17,755
(88)
520
(48)
(276)
687

(32)
55
(2,929)32,270
(10)
687
(27)
(662)
1,099

(5,612)(8,286)—

1,620(2,581)
6,091(2,098)21,685For the fiscal year
ended February 28,
2021
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting
from change in scope of consolidation
Cash and cash equivalents at end of period

12,122
10,390(10,292)(0)(3,240)(739)(2,379)5,860
52(7,609)28,780For the fiscal year
ended February 28,
2022(38,471)—(5,052)(0)(1,627)(2)
8,980(36,173)602(6,070)21,270100—* 21,270* 15,199* Reconciliation of ending balance of cash and cash equivalents with account balances per Consolidated Balance Sheets is as follows.

(Millions of yen)

For the fiscal year
ended February 28,
2021
Cash and deposits
Time deposits with original maturities of more than 3 months
Cash and cash equivalents

21,301(31)
21,270For the fiscal year
ended February 28,
2022
15,209(10)
15,19951

Corporate Information

CONTENTS

Sustainable Management

Segment Information

Corporate Governance

Key Financial Data
PRINT

Our Network

As of February 28, 2022

EuropeUnited States

Asia
Japan

U.K .

C h ina

Ja pa nU. S. A.

L ond o n

S h a n gh a i

To kyoN ew Yor k

Joseph Ltd.

Onward Fashion Trading (China) Co., Ltd.

Onward Holdings Co., Ltd.

J. Press, Inc.

Freed of London Ltd.

Shanghai Onward Fashion Co., Ltd.

Onward Kashiyama Co., Ltd.

Onward U.S.A. L.L.C.

Onward Trading (Shanghai) Co., Ltd.

Onward Trading Co., Ltd.

Fran cePa ri sHorloge Saint Benoit S.A.S.

Da l i a n
Kashiyama (Dalian) Co., Ltd.
H o n g Ko n g
Onward Kashiyama Hong Kong Ltd.

Island Co., Ltd.
Onward Personal Style Co., Ltd.

Onward Beach Resort Guam, Inc.

Intimates Co., Ltd.

Onward Golf Resort Guam, Inc.

Onward Digital Lab Co., Ltd.
Chacott Co., Ltd.
KOKOBUY Co., Ltd.
Kashiyama Daikanyama Co., Ltd.
Onward Creative Center Co., Ltd.

V i etna m
H o C h i Mi n h C i t y
Onward Kashiyama Vietnam Ltd.

Onward Resort & Golf Co., Ltd.
O & K Co., Ltd.
Osaka
Tiaclasse Co., Ltd.
Na ga n oCreative Yoko Co., Ltd.

Pure Holding Company
Apparel Business
Lifestyle Business

Guam

Yamato Co., Ltd.
Sa ga
Kashiyama Saga Co., Ltd.

52

Corporate Information

CONTENTS

Sustainable Management

Segment Information

Corporate Governance

Key Financial Data
PRINT

Company Information
Company Overview As of February 28, 2022

Board of Directors, Audit & Supervisory Board Members, and Executive Officers As of May 26, 2022

Name

Onward Holdings Co., Ltd.

Directors

Head Office10-5, Nihonbashi 3-chome, Chuo-ku,
Tokyo 103-8239, Japan

Director and Vice President Kenji ChishikiTel(+81) 3-4512-1051 (IR Div.)

Director

Osamu SatoManaging Executive Officer Yoshihiro Higuchi

Established

September 1947

Director

Daisuke Ikeda

Executive Officer

Akira Murakami

Capital¥30,079 million

Outside Director

Akira Kawamoto

Executive Officer

Jun Odagiri

Number of
Employees

6,377 (Consolidated)

Outside Director

Yoshie Komuro

Audit &
Supervisory
Board
Members

President and CEO

Michinobu YasumotoStanding Audit &Hikosaburo Seike
Supervisory Board Member
Standing Audit &Nobuyoshi Onogi
Supervisory Board Member
Ryu Umezu
Outside Audit &Supervisory Board Member
Outside Audit &Mitsuyo Kusano
Supervisory Board Member

Notes: The name of Ms. Yoshie Komuro in the family register is Yoshie Ishikawa.

Company Organization As of March 1, 2022
General Meeting of Shareholders
Audit & Supervisory Board
Board of Directors
President and CEO
Internal Control Office

European Operations

President’s Office

North American Operations

Corporate Strategy & Development

Asian Operations

Corporate Planning, Human Resources, General Affairs

Marketing & Product

Finance, Accounting, Investor Relations

Supply Chain Management
Corporate Business

Executive
Officers

Managing Executive Officer Kenji Takeuchi
Managing Executive Officer Takeshi Egashira53

CONTENTS

Corporate Information

Sustainable Management

Segment Information

Corporate Governance

Key Financial Data
PRINT

Stock Information
Status of Shares As of February 28, 2022
Common Stock

Distribution of Ownership among Shareholders

M a j o r S h a re h o l d e rs

Authorized— 400,000,000 shares
Issued— 157,921,669 shares(Including 22,287,771 shares of treasury
stock)

Number of
Shareholders

41,991

Stock Exchange
Listing

Tokyo Stock Exchange Prime Market(since April 4, 2022)

Transfer Agent

Mitsubishi UFJ Trust & Banking Corporation
1-1, Nikkocho, Fuchu, Tokyo
183-0044, Japan(On a number of shares basis)
Number of
Shares Held(thousand shares)

Name

Percentage
of Total
SharesIssuedThe Master Trust Bank of Japan, Ltd.
(Trust account)

12,231

9.0%

Kashiyama Scholarship Foundation

8,710

6.4%

Onward Holdings Customers’
Shareholdings Association

4,907

3.6%

Nippon Life Insurance Company

4,671

3.4%

The Dai-ichi Life Insurance Company, Ltd.

4,200

3.0%

STATE STREET BANK AND TRUSTCOMPANY 505001

3,197

2.3%

Sumitomo Mitsui Banking Corporation

2,931

2.1%

Isetan Mitsukoshi Ltd.

2,301

1.6%

Custody Bank of Japan, Ltd.
(Trust account)

2,159

1.5%

DAIDOH LIMITED

2,149

1.5%

Notes: 1. The number of shares held is rounded down to the nearest thousand shares.
2. The Company holds 22,287 thousand shares of treasury stock.
3. T he percentage of total shares issued is calculated after deducting 22,287
thousand shares of treasury stock.
4. T he percentage of total shares issued is rounded down to the nearest indicateddigit.

St o c k P r i c e R a n ge a n d Tra d in g Vo l u m e ( M o n t h l y )Trading Volume (Thousand shares)

Stock Price (¥)
600

400

70,000200

35,000003/2020

03/2021

03/2022

Total Number of Issued Shares 157,921 thousand shares
Individuals andothers76,434 thousand
shares

21.5%
3.0%

48.4%

16.9%

Financial
institutions
33,930thousandsharesSecurities
companies
4,783
thousandshares10.2%

Foreign institutions
and others
16,136thousand shares

Other
corporations
26,637thousandshares

Notes: 1. The number of shares is rounded down to the nearest thousand shares.
2. Data regarding individuals and others includes treasury stock.

54