Summary of Consolidated Financial Results for the Fiscal Year Ended February 28, 2014
[Japanese GAAP]
April 4, 2014

Company name: Adastria Holdings Co., Ltd.

Listing: TSE 1st section
URL: http://www.adastria.co.jp

Stock code:
2685
Representative: Yoichi Endo, Representative Director, President
Contact:
Ryo Araya, General Manager, Corporate Strategy Department
Tel: +81-3-6895-6000
Scheduled date of Annual General Meeting of Shareholders:
May 22, 2014
Scheduled date of payment of dividend:
May 8, 2014
Scheduled date of filing of Annual Securities Report:
May 23, 2014
Preparation of supplementary materials for financial results:
Yes
Holding of financial results meeting:Yes (for investors)

Note: The original disclosure in Japanese was released on April 4, 2014 at 16:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended February 28, 2014 (March 1, 2013 – February 28, 2014)(1) Consolidated results of operations
Net sales
Million yen

Fiscal year ended Feb. 28, 2014
Fiscal year ended Feb. 28, 2013
Note: Comprehensive income(Percentages shown for net sales and incomes represent year-on-year changes)
Operating income
Ordinary income
Net income%

Million yen%

Million yen%

Million yen%

153,27326.0
5,762 (40.7)
6,027 (39.4)(4,731)
121,6705.7
9,717 (21.4)
9,951 (20.5)
5,508 (18.9)
Fiscal year ended Feb. 28, 2014:(3,455) million yen (-%)
Fiscal year ended Feb. 28, 2013:
6,416 million yen (down 5.1%)
Net income per
Diluted net
Ratio of ordinary
Ratio of operating
ROE
share
income per shareincome to total assets income to net sales
Yen

Yen

%

%

%

Fiscal year ended Feb. 28, 2014
Fiscal year ended Feb. 28, 2013
Reference: Equity in earnings of affiliates
EBITDA(206.42)(11.3)
8.5
241.4513.8
15.8
Fiscal year ended Feb. 28, 2014:
Fiscal year ended Feb. 28, 2013:
Fiscal year ended Feb. 28, 2014:
13,861 million yen (down 4.3%)
Fiscal year ended Feb. 28, 2013:
14,477 million yen
EPS before goodwill amortization
Fiscal year ended Feb. 28, 2014:156.84 yen (down 35.8%)
Fiscal year ended Feb. 28, 2013:244.27 yen(*) For more details regarding definition, computational method and other matters of these indices, please refer to thesection “Analysis of Results of Operations” on page 3.

3.8
8.0
-

(2) Consolidated financial position

As of Feb. 28, 2014
As of Feb. 28, 2013
Reference: Shareholders’ equity

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen78,84144,78656.8
1,844.17
63,41038,59860.9
1,775.28
As of Feb. 28, 2014: 44,780 million yen
As of Feb. 28, 2013: 38,598 million yen(3) Consolidated cash flow position
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of the period

Million yen

Million yen

Million yen

Million yen

Fiscal year ended Feb. 28, 2014
Fiscal year ended Feb. 28, 2013

4,606
11,565(6,831)(10,184)(9,503)(8,430)8,529
18,338

2. Dividends
Dividend per share
Total

Total
dividends

Yen

Yen

Million yen

70.00
25.00
45.00

120.00
75.00
75.00

2,679
1,697

1Q-end 2Q-end 3Q-end Year-end
Yen

Fiscal year ended Feb. 28, 2013
Fiscal year ended Feb. 28, 2014
Fiscal year ending Feb. 28, 2015 (forecast)

Yen

-

50.00
50.00
30.00

Yen

-

Dividend
Dividend on
payout ratio
equity(consolidated) (consolidated)
%

%

49.7
113.8

6.9
4.1

3. Consolidated Forecast for the Fiscal Year Ending February 28, 2015 (March 1, 2014 – February 28, 2015)
Net salesFirst half
Full year

Operating income

Ordinary income
Million yen

Million yen%

Million yen

86,900185,900

36.3
21.3

2,300
6,000

%

(39.0)
4.1

2,300
6,000

%

(42.2)(0.5)(Percentages represent year-on-year changes)
Net income
Net income per share
Million yen

500
1,600

%

(76.1)
-

Yen

20.59
65.89

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): Yes
Newly added:
Excluded:

4
1(POINT INC., TRINITY ARTS inc., NATURAL NINE CO., LTD., and N9&PG Co., Ltd.)(NATURAL NINE CO., LTD.)

Note: Please refer to the section “Corporate Group” on page 8 for further information.

(2) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: Yes
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: Yes
4) Restatements: None

(3) Number of outstanding shares (common stock)1) Number of shares outstanding at end of period (including treasury shares)
As of Feb. 28, 2014:

24,400,000 shares

As of Feb. 28, 2013:

24,400,000 shares

As of Feb. 28, 2013:

2,657,885 sharesFiscal year ended Feb. 28, 2013:

22,812,391 shares

2) Number of treasury shares at end of period
As of Feb. 28, 2014:

117,588 shares

3) Average number of shares outstanding during the period
Fiscal year ended Feb. 28, 2014:

22,922,788 shares

Reference: Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended February 28, 2014
(March 1, 2013 – February 28, 2014)(1) Non-consolidated results of operations
Net sales
Million yen

Fiscal year ended Feb. 28, 2014
Fiscal year ended Feb. 28, 2013%

57,727
115,089(49.8)
3.2

Operating income(Percentages represent year-on-year changes)
Ordinary income
Net income

Million yen

Million yen

%

5,246
9,252

(43.3)(21.0)Net income per share

Diluted net income per share

Yen

Yen

Fiscal year ended Feb. 28, 2014
Fiscal year ended Feb. 28, 2013

%

5,473
9,634

(148.77)
238.43

Million yen(43.2)(19.8)(3,410)5,439%(17.0)-(2) Non-consolidated financial position

As of Feb. 28, 2014
As of Feb. 28, 2013
Reference: Shareholders’ equity

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

48,59644,511
59,31837,370
As of Feb. 28, 2014: 44,506 million yen

91.6
63.0
As of Feb. 28, 2013:

1,832.86
1,718.79
37,370 million yen

Note: The Company shifted to a holding company structure through a company split on September 1, 2013.
Please refer to the section “Corporate Group” on page 8 for further information.

2. Non-consolidated Forecast for the Fiscal Year Ending February 28, 2015 (March 1, 2014 – February 28, 2015)
Net sales
Million yen

First half
Full year

1,900
3,900

Operating income%(96.6)(93.2)

Million yen

100
200

%

(97.9)(96.2)

Ordinary income
Million yen

300
500

(Percentages represent year-on-year changes)
Net income
Net income per share%(94.0)(90.9)

Million yen

100
200

%

(96.7)
-

Yen

4.12
8.24

Note 1: Indication of audit procedure implementation status
The current financial report is exempted from audit procedures based on the Financial Instruments and Exchange Act. At the timeof disclosure, the audit procedures for the financial statements have not been completed.
Note 2: Cautionary statement with respect to forward-looking statements
Forward-looking statements in this report are based on currently available information and certain assumptions judged to bereasonable. These statements are not promises by the Company regarding future performance. Actual results may differ significantly
from these forecasts for a number of factors. Please refer to the section “Analysis of Results of Operations” on page 2 regarding
preconditions or other related matters for the forecast shown above.

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

Contents of Attachments
1. Analysis of Results of Operations and Financial Condition

2(1) Analysis of Results of Operations

2(2) Analysis of Financial Condition

6(3) Basic Policy on Profit Distribution, and Dividend Plans for the Current and Next Fiscal Years7

2. Corporate Group8

3. Management Policies(1) Basic Management Policy

11(2) Performance Targets

11(3) Medium- to Long-term Business Strategy

12(4) Challenges

13

4. Consolidated Financial Statements

14(1) Consolidated Balance Sheet

14(2) Consolidated Statements of Income and Comprehensive Income16(3) Consolidated Statement of Changes in Equity

19(4) Consolidated Statement of Cash Flows

21(5) Notes to Consolidated Financial Statements

22

Going Concern Assumption

22

Changes in Accounting Policies

22

Segment and Other Information

22

Per Share Information

24

Subsequent Events

25

- 1 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

1. Analysis of Results of Operations and Financial Condition(1) Analysis of Results of Operations
1) Results of operations for the current fiscal year
In the current fiscal year (March 1, 2013 to February 28, 2014), the Japanese economy continued to recover at amoderate pace. Corporate earnings are improving and the number of jobs is growing due to the benefits of theJapanese government’s economic measures and monetary easing as well as for other reasons.
In the casual wear market where core brands of Adastria Holdings Co., Ltd. (hereafter “the Company”) and theCompany’s Group (hereafter “the Group”) belong to, the operating environment is favorable overall due to themoderate economic recovery. However, this market was unstable in the fiscal year’s second half because ofunfavorable weather that included record-setting autumn heat and heavy winter snowfall.
In this circumstances, the Company made NATURAL NINE HOLDINGS CO., LTD. and its subsidiary NATURALNINE CO., LTD. a consolidated subsidiary in June 2013. And in August 2013, NATURAL NINE CO., LTD., whichis the surviving company, absorbed NATURAL NINE HOLDINGS CO., LTD, which was dissolved.
In September 2013, the Company made TRINITY ARTS inc. a consolidated subsidiary and an absorption-typecompany split was conducted with the Company as the splitting company and its wholly owned subsidiary POINT
INC. (the new POINT) as the successor company. In addition, the POINT INC. (the new POINT) received rights andobligations for all business activities other than management administration. By taking these actions, the Group
shifted to a holding company structure. Furthermore, the company name was changed to Adastria Holdings Co., Ltd.
from POINT INC.
In February 2014, there was a merger of wholly owned subsidiaries Posic Co., Ltd., which handles the Group’s
logistics operations, and NATURAL NINE CO., LTD., which is involved in product planning and the supervision of
production. The newly formed company is called N9&PG Co., Ltd.
Due to these actions, we have two major retail companies and N9&PG Co., Ltd. One is POINT INC. (the new
POINT), which is involved mainly in sales of natural fashion style brands. The other is TRINITY ARTS inc., aretailer of lifestyle-proposing brands for apparel, accessories and other consumer products. N9&PG Co., Ltd. hasoutstanding capabilities in textile and product designs along with operations in many Asian countries. The result is a
corporate group with a broad customer base and the ability to develop highly distinctive merchandise.
Due to the consolidation of TRINITY ARTS inc., the number of stores now includes the 245 stores (including 3
overseas stores) of this company and its subsidiaries. We opened 144 new stores (including 25 overseas), and closed
75 (including 23 overseas), resulting in a total network of 1,213 stores (including 81 overseas) at the end of thecurrent fiscal year.
Consolidated sales increased sharply by 26.0% year-on-year, benefiting from the consolidation of TRINITY ARTS
inc. Sales of the GLOBAL WORK, LEPSIM LOWRYS FARM, and niko and… brands all posted solid sales.
There was a large decline of 4.2 percentage points in the operating margin from the previous fiscal year to 3.8%.
One reason was a decline in the gross profit margin that was partly the result of a higher cost of sales ratio caused by
the weaker yen and of higher sales of reduced-price merchandise. Amortization of goodwill resulting from TRINITYARTS inc. and NATURAL NINE CO., LTD. (currently N9&PG Co., Ltd.) becoming consolidated subsidiaries isanother reason for the lower operating margin.
There is an extraordinary loss of 6,196 million yen for the one-time amortization of goodwill in association withasset impairment charges at N9&PG Co., Ltd. and other group companies because of weak performance and otherreasons.
As a result, consolidated net sales in the current fiscal year increased 26.0% year-on-year to 153,273 million yen,operating income decreased 40.7% to 5,762 million yen, ordinary income decreased 39.4% to 6,027 million yen, andnet loss was 4,731 million yen.
Earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 4.3% to 13,861 million yen and- 2 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Yearearnings per share, before goodwill amortization, fell 35.8% to 156.84 yen. (*)(*) Amortization of goodwill that resulted from making TRINITY ARTS inc. and NATURAL NINE CO., LTD.
(currently N9&PG Co., Ltd.) consolidated subsidiaries causes large declines in operating income and all
subsequent categories of profits from the current fiscal year. Since goodwill amortization is not a cash expense,
this amortization created a large gap between changes in cash flows and changes at all levels of profits startingwith operating income. Furthermore, comparisons with foreign companies are difficult because of differences inaccounting standards of individual countries for recording goodwill amortization. As a result, we are newly
announcing EBITDA and EPS before goodwill amortization as reference financial indicators.
EBITDA
Operating income + Depreciation + Amortization of goodwill (selling, general and administrative expenses)
EPS before goodwill amortization(Net income + Amortization of goodwill (selling, general and administrative expenses, and extraordinary loss))/
Average number of shares outstanding during the period(Number of stores opened/closed, etc.)
Number of stores for formats and regions in the current fiscal year are as follows.
Number of stores
FY2/14

As ofFeb. 28,
2013

Increased(Note 5)Opened,etc.

Rebranded

GLOBAL WORK

172

-

9

LOWRYS FARM

149-

LEPSIM LOWRYS FARM

111

JEANASIS81

RAGEBLUEStore format / region

ClosedIncrease/decrease

As ofFeb. 28,
2014

-

(8)

1

173

18

-

(8)

10

159

-

3

-

(4)

(1)

110

-

4

-

(3)

1

82

4

-

(4)

-

62

62

-

HEATHER

75

-

6

-

(5)

1

76

Others

135

-

27

-

(17)

10

145

Total (POINT INC.)

785

-

71

-

(49)

22

807

niko and...

-

94

7

-

(1)

100

100

STUDIO CLIP

-

104

25

-

-

129

129

Others

-

44

10

-

-

54

54

Total (TRINITY ARTS inc.)

-

242

42

-

(1)

283

283

BABYLONE INC.

38

-

6

-

(2)

4

42

Total (Japan)

823

242

119

-

(52)

309

1,132

Hong Kong

24

3

7

-

(4)

6

30

China

17

-

9

-

(5)

4

21

Taiwan

31

-

4

-

(14)

(10)

21

Singapore

4

-

5

-

-

5

9

Total (Overseas)

76

3

25

-

(23)

5

81

Total (Group)

899

245

144

-

(75)

314

1,213

Notes: 1. The number of stores includes e-commerce websites of other companies and e-commerce websites of the Company.
2. Stores that sell merchandise of two or more brands are categorized as the brand that operates each store.
3. POINT INC. includes figures for Adastria Holdings Co., Ltd. before shifting to a holding company structure.
4. TRINITY ARTS inc. includes figures for its subsidiaries.
5. This table shows the increase in the number of stores resulting from the consolidation of TRINITY ARTS inc.

- 3 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

(Sales for brands and regions)
Sales and composition for brands and regions in the current fiscal year are as follows.
Brand / region

FY2/14
Sales (million yen)

YoY change (%)

Composition (%)

GLOBAL WORK

27,65518.0

7.4

LOWRYS FARM

24,604

16.0

0.2

LEPSIM LOWRYS FARM

13,3968.7

10.6

JEANASIS

10,380

6.8(9.5)

RAGEBLUE

10,0506.6

0.6

HEATHER

8,314

5.4

(9.3)

Others23,616

15.4

7.2

Total (POINT INC.)

118,019

76.9

2.5

niko and...

9,573

6.2

-

STUDIO CLIP

7,757

5.1

-

Others

-

3,146

2.1

Total (TRINITY ARTS inc.)

20,476

13.4-

BABYLONE INC.

5,090

3.3

220.6

Others

1,445

1.0

-

Total (Japan)

145,032

94.6

24.3

Hong Kong

5,000

3.2

75.7

China

1,004

0.7

70.7

Taiwan

1,465

1.0

7.8

Singapore

770

0.5

288.1

Total (Overseas)

8,241

5.4

65.0

Total (Group)

153,273

100.0

26.0

Notes: 1. POINT INC. includes figures for Adastria Holdings Co., Ltd. before shifting to a holding company structure.
2. TRINITY ARTS inc. includes figures for its subsidiaries.
3. BABYLONE INC. became a consolidated subsidiary in the fourth quarter of the previous fiscal year.

(Sales for merchandise categories)
Sales and composition for merchandise categories in the current fiscal year are as follows.
Merchandise category

FY2/14
Sales (million yen)

Composition (%)

YoY change (%)

Men’s apparel (bottoms, tops)

25,593

16.7

7.3

Lady’s apparel (bottoms, tops)

95,705

62.4

26.6

31,97420.9

43.9

153,273

100.0

26.0

OthersTotal

Note: The others category includes the provision for point card certificates and other items.

2) Outlook for the fiscal year ending on February 28, 2015
Although corporate earnings in Japan are recovering, there are still numerous factors that pose challenges. Examples
include Japan’s declining population as the birthrate falls and the number of older people climbs, the diversificationof consumer lifestyles, and the rapid advance of globalization. In addition, Japan raised the consumption tax in April
2014. As a result, we expect the operating environment to remain difficult.
To deal with these issues, we have conducted a management integration with TRINITY ARTS inc. and NATURALNINE CO., LTD. (currently N9&PG Co., Ltd.) and shifted to a holding company structure in September 2013. One aimof these actions is to build a sound foundation to support the growth of all Adastria Group companies. These actions arealso expected to enable maximizing synergies involving supply chains, IT systems, administrative operations and other- 4 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

aspects of operations while respecting and preserving the corporate culture of each company. We further believe thatthese actions will make it possible to use measures that include M&A to strengthen the brand portfolio and grow outside
Japan.
In the fiscal year ending on February 28, 2015, by combining the functions of companies that were recently
integrated, we will continue to strengthen internal planning and production operations in order to create more
distinctive merchandise. We will also redefine brand positioning and pursue strategies that match the characteristics
of each brand. Overseas, we are positioning Adastria Asia Co., Ltd., which is located in Hong Kong, as a company
that oversees all operations outside Japan. Activities in other countries will be focused primarily on the LOWRYS
FARM, GLOBAL WORK and niko and… brands.
For the fiscal year ending on February 28, 2015, we forecast a 21.3% increase in consolidated net sales to 185.9
billion yen, a 23.5% increase in gross profit to 104.8 billion yen, a 4.1% increase in operating income to 6.0 billion
yen, a 0.5% decrease in ordinary income to 6.0 billion yen and net income of 1.6 billion yen.
This forecast assumes: existing-store sales of POINT INC. will decrease 1.4% and 83 stores will be opened and 27
stores will be closed; and existing-store sales of TRINITY ARTS inc. will decrease 0.8%. and 85 stores will be
opened and one store will be closed.
The planned number of stores for major brands and regions are as follows.
Brand / region

Number of stores
FY2/14

FY2/15 (Plan)

GLOBAL WORK

173

181

LOWRYS FARM

159

158

LEPSIM LOWRYS FARM

110

121

JEANASIS

82

84

RAGEBLUE

62

66

HEATHER

76

77

Others145

176

Total (POINT INC.)

807

863

niko and...

100

115

STUDIO CLIP

129

159

Others54

135

Total (TRINITY ARTS inc.) (Note 3)

283

409

BABYLONE INC. (Note 3)

42-

Total (Japan)

1,132

1,272

Hong Kong

30

33

China

21

39

Taiwan21

27

Singapore

9

9

-

6

South Korea (Note 4)
Total (Overseas)

81

114

Total (Group)

1,213

1,386

Notes: 1. The number of stores includes e-commerce websites of other companies and e-commerce websites of the Company.
2. Stores that sell merchandise of two or more brands are categorized as the brand that operates each store.
3. TRINITY ARTS inc., which is the surviving company, absorbed BABYLONE INC. in April 2014. Please refer to thesection “4. Consolidated Financial Statements, (5) Notes to Consolidated Financial Statements, Subsequent Event” forfurther information.
4. Adastria Korea Co., Ltd. was established in January 2014. Since its fiscal year ends on December 31, this company
will be included in the scope of consolidation starting from the fiscal year ending on February 28, 2015.

- 5 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

(2) Analysis of Financial Condition
1) Balance sheet position
AssetsCurrent assets decreased 1,665 million yen from as of February 28, 2013 to 31,525 million yen as of February 28,
2014. This was mainly due to a decrease in cash and deposits of 3,309 million yen for a reduction on loans of thegroup companies after the management integration, a decrease in securities (commercial papers and Treasury
Discount Bills) of 6,499 million yen, in spite of an increase in inventories of 6,164 million yen resulting from the
management integration.
Non-current assets increased 17,095 million yen to 47,315 million yen. This was mainly due to increases ingoodwill of 8,809 million yen and lease and guarantee deposits of 3,425 million yen following the management
integration.
Liabilities
Current liabilities increased 8,242 million yen to 32,474 million yen. This was mainly due to increases in short-termloans payable of 4,225 million yen and accounts payable-other of 2,475 million yen following the management
integration.
Non-current liabilities increased 999 million yen to 1,580 million yen. This was mainly due to an increase indeferred tax liabilities of 925 million yen.
Net assets
Net assets increased 6,187 million yen to 44,786 million yen. This was mainly due to an increase in capital surplusof 4,468 million yen from the share exchange, and a decrease in treasury shares of 7,781 million yen.
2) Cash flow position
Cash and cash equivalents (hereinafter “net cash”) as of February 28, 2014 amounted to 8,529 million yen, or 9,809
million yen less than as of February 28, 2013.
A summary of cash flows from each activity during the current fiscal year is as follows:
Cash flows from operating activities
Net cash provided by operating activities totaled 4,606 million yen (a decrease of 6,958 million yen, compared withthe previous fiscal year). The main factors include amortization of goodwill of 8,326 million yen, depreciation andamortization of 6,212 million yen and income taxes paid of 4,974 million yen.
Cash flows from investing activities
Net cash used in investing activities totaled 6,831 million yen (a decrease of 3,352 million yen). This was mainly
due to the payments of 5,360 million yen for the purchase of property, plant and equipment.
Cash flows from financing activities
Net cash used in financing activities totaled 9,503 million yen (an increase of 1,073 million yen). This was mainly
due to a decrease in short-term loans payable of 2,091 million yen, cash dividends paid of 2,612 million yen and thepurchase of treasury shares of 4,014 million yen.

- 6 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

Reference: Cash flow indicators
FY2/12

FY2/13

FY2/14

Shareholders’ equity ratio (%)

65.3

60.9

56.8

Shareholders’ equity ratio based on market prices (%)

115.6

117.2

72.4

0.0

0.1

1.2

41,048.9

1,663.2

50.1

Interest-bearing debt to cash flow ratio (%)
Interest coverage ratio (times)

Notes: 1. Shareholders’ equity ratio: Shareholders’ equity / Total assets
2. Shareholders’ equity ratio based on market prices: Market capitalization / Total assets
3. Interest-bearing debt to cash flow ratio: Interest-bearing debt / Operating cash flows
4. Interest coverage ratio: Operating cash flows / Interest payments* Market capitalization is calculated by multiplying the closing share price at the end of the period by the number ofshares outstanding at the end of the period, excluding treasury shares.
* Operating cash flows are calculated using the figures for operating cash flows in the consolidated statement of cash
flows. Interest-bearing debt includes all liabilities on the consolidated balance sheet that incur interest. Interest
payments are calculated using the figures for interests paid in the consolidated statement of cash flows.

(3) Basic Policy on Profit Distribution, and Dividend Plans for the Current and Next Fiscal Years
With regard to the distribution of profits, we will make investments in the necessary businesses to develop highly
appealing brands and supply merchandise that can further increase corporate value (shareholder value), which willlead to the satisfaction of both customers and shareholders. For profit distributions to shareholders, we use aconsolidated payout ratio before goodwill amortization of 30% as the standard for dividends. In addition, we
position the repurchase of treasury shares as one way to return earnings to shareholders. Repurchases will be
determined in an appropriate and timely manner while taking into account changes in our stock price, our financial
position and other factors.
The year-end dividend for the current fiscal year that ended on February 28, 2014 will be 25 yen per share. This isless than initially planned because second half performance was below the forecast that was announced with the firsthalf earnings announcement. Combined with the 50 yen interim dividend, the annual dividend for the current fiscal
year is 75 yen per share, which results in a consolidated payout ratio before goodwill amortization of 47.8%.
For the next fiscal year ending on February 28, 2015, we plan to pay 75 yen for an annual dividend, the same as thedividend for the current fiscal year.

- 7 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

2. Corporate GroupThe Group (the Company and its subsidiary companies) consists of Adastria Holdings Co., Ltd. and 13 consolidated
subsidiaries: POINT INC., TRINITY ARTS inc., BABYLONE INC., N9&PG Co., Ltd., Adastria Asia Co., Ltd.
(Hong Kong), POINT (Shanghai) Co., Ltd. (China), POINT TW INC. (Taiwan), Singapore Point Pte. LTD.
(Singapore), and five other companies. The sale of merchandise is the primary business activity of the Group.
In Japan, the sale of merchandise is conducted by POINT INC., TRINITY ARTS inc., and BABYLONE INC.
POINT INC. operates casual clothing brands nationwide with using SPA format. These brands include GLOBAL
WORK, LOWRYS FARM, LEPSIM LOWRYS FARM, JEANASIS, RAGEBLUE, HEATHER. TRINITY ARTS inc. sells
products nationwide using lifestyle-proposing brands, primarily the niko and… and STUDIO CLIP brands.
BABYLONE INC. sells products mainly by using the BABYLONE brand for high-end women’s products that target
women in their 20’s and 30’s.
The overseas merchandise sales business is conducted by Adastria Asia Co., Ltd., POINT (Shanghai) Co., Ltd.,POINT TW INC., and Singapore Point Pte. LTD. These companies use GLOBAL WORK, LOWRYS FARM,JEANASIS, niko and…, and other brands.
At the end of the current fiscal year, the Group had 1,132 stores in Japan and 81 stores in other countries, a total of
1,213 stores.
N9&PG Co., Ltd. performs a comprehensive range of operations starting with the development of original materials
and including patterns, product plans, production supervision, distribution and quality assurance. This company has
business partners that have manufacturing operations in many locations in Asia.
Changes in significant group companies during the current fiscal year are as follows.
In the first quarter, POINT INC. (the new POINT) was established to prepare for the company split that took place
on April 4, 2013. TRINITY INC. changed its name to BABYLONE INC. on April 15, 2013.
In the second quarter, the Company acquired 100% of the voting rights of NATURAL NINE HOLDINGS CO., LTD.
on June 4, 2013 to make it a wholly owned subsidiary through a share exchange, with the Company as the solo
parent. This company and its four subsidiaries (NATURAL NINE CO., LTD., CROSS BORDER CO., LTD. and twoother companies) were included in the scope of consolidation. On August 31, 2013, NATURAL NINE CO., LTD.,
which is the surviving company, absorbed NATURAL NINE HOLDINGS CO., LTD. and CROSS BORDER CO.,LTD., which were dissolved.
In the third quarter, BABYLONE INC., which is the surviving company, absorbed its subsidiary universite CO.,LTD., which was dissolved, on August 1, 2013.
In addition, the Company acquired 100% of the voting rights of TRINITY ARTS inc. on September 1, 2013 to makeit a wholly owned subsidiary through a share exchange, with the Company as the solo parent. This company and its
four subsidiaries were included in the scope of consolidation.
At the same time, an absorption-type company split was conducted with the Company as the splitting company andits wholly owned subsidiary POINT INC. (the new POINT) as the successor company. In addition, the POINT INC.
(the new POINT) received rights and obligations for all business activities other than management administration.
By taking these actions, the Group shifted to a holding company structure.
Furthermore, the company name was changed to Adastria Holdings Co., Ltd. from POINT INC. on the same day.
Hong Kong subsidiary POINT HOLDING CO., LTD also changed its name to Adastria Asia Co., Ltd.
In the fourth quarter, the Company’s wholly owned subsidiary Posic Co., Ltd., which is the surviving company,
absorbed NATURAL NINE CO., LTD., which was dissolved, on February 28, 2014. The surviving company PosicCo., Ltd. has changed its name to N9&PG Co., Ltd.

- 8 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal YearThe following table lists the major brands of the Group.
Company

Brand

Concept

POINT INC.
GLOBAL WORKGLOBAL WORK offers casual wear by presenting
natural and easygoing merchandise which applies
seasonal sense to fit every individual.

LOWRYS FARM

Themeing on quality and relaxation, LOWRYSFARM proposes refreshing styling consisting oftimeless basic items and seasonal trendy items
for women in ordinary lifestyle.

LEPSIM LOWRYS
FARM

Styled on simplicity yet with a sense of
freshness, LEPSIM LOWRYS FARM proposes acasual and unassuming style that blends naturally
into daily life.

JEANASIS

With commitments on materials and details,
JEANASIS expresses current trends with uniqueperspectives and sense and that is how JEANASIS
style is defined.

RAGEBLUE

Blending American casual taste and European
traditional taste, RAGEBLUE focuses onmaterials and details, and proposes a daily
standard style incorporating elements of popular
trends.

HEATHER

Designed for positive girls who have an everlasting
playful mind, HEATHER proposes perfect stylingwith girlish and edgy items in trend.

niko and…

By nature, something is missing. The niko and…
brand brightens people’s lives by creating
originality through an infusion of its own style.

STUDIO CLIP

Let’s make this day unforgettable. Even though it’s
not a special day. I’d like to catch important things
properly. I’d like to be able to come face with evensmall things. STUDIO CLIP proposes life styles
that match individuals and is based on the concept
of “my house.”

TRINITYARTS inc.

- 9 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal YearAn organizational chart of the Group is as follows.

(The Company) Adastria Holdings Co., Ltd. [Holding company]
Shareholding[Consolidated subsidiary]
N9&PG Co., Ltd.
(Product planning / production
management / logistics)[Consolidated subsidiaries]
Order

Deliveryoperations

Delivery / acceptance / storage

Suppliers(Trading companies, etc.)

Order(Outside Japan)[Hong Kong]
Adastria Asia Co., Ltd.
[China]POINT (Shanghai) Co., Ltd.
[Taiwan]
POINT TW INC.
[Singapore]
Singapore Point Pte. LTD.

Customers

logistics

Merchandise saleOutsourced(Japan)POINT INC.
TRINITY ARTS inc.
BABYLONE INC.

Delivery

Note: The consolidated subsidiaries in Japan perform some procurement operations for the merchandise procurement
activities of consolidated subsidiaries outside Japan.

- 10 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

3. Management Policies(1) Basic Management Policy
The Group announced a new Belief and Vision in the current fiscal year.
 Our Belief
Fashion Can Transform the World.
Fashion is not a word that describes only trend and clothing.
Fashion stands for living the way you want to.
We strongly believe that fashion has unlimited potential to transform the world.
 Our Vision
Hello “ ” World
To fulfill the potential of transforming the world of fashion into an actual transformation
We will use a variety of activities to open the door to a new world that brings together people and life styles thatmatch each individual.
Hello World:
Also known as the world’s most famous computer program, “Hello World” is simple source code that is used in thelearning of computer programming languages. Here, the blank “ ” in the middle of the phrase expresses infinite
possibility, suggesting “opening the door to a new world” and “discovering a whole new you.”
The business activities of the Group are distinguished by the following characteristics.
Our business model:
Our business model helps us to deliver, at just the right time, excellent, affordable fashion that matches the needs ofevery customer.
1) Multi Brands
From all the options available, customers choose those items that best reflect their unique individuality. The Group
maintains a portfolio of diverse brands to suit each customer’s preferences and lifestyle.
2) Multi Categories
In addition to apparel, we offer a broad range of fashion categories and items – from bags, shoes and kitchen goods
to furniture and much more.
3) Value Chain
The value chain is used to differentiate the Group from its competitors by quickly collecting information aboutmarket trends and store data and incorporating this information in new products.
We will be a source of new fashions to people all around the world by using an integrated infrastructure that extends
from product planning to production, distribution and sales.
(2) Performance Targets
The Company places priority on performance indicators associated with earnings and efficiency. The goal is toincrease operating income, EBITDA, which is an indicator of the ability to generate cash, and other indicators. To
accomplish this, the Group will differentiate its products by strengthening internal planning and production
operations and operate stores in a manner that reflects the characteristics of each brand. For ROE, the goal is to- 11 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

increase this return by increasing earnings.
(3) Medium- to Long-term Business Strategy
In recent years, the ASEAN region has becoming increasingly important as a location for manufacturing products,
along with factories in China. Furthermore, the Asian market is growing as a region for selling products, too. As aresult, the globalization of the Group’s operating environment is advancing rapidly. In Japan, the population is
falling as the number of older people climbs and the number of children falls. In addition, the consumption tax has
been raised. These events are making the outlook for consumer spending increasingly uncertain. At the same time,
consumers’ life styles and needs are becoming even more diverse and advanced.
In response to these developments, we started the TOP15 medium-term management plan in the fiscal year that
ended on February 28, 2013. The plan aims to utilize brands with the goal of achieving sustainable growth and tostrengthen the business model in order to maximize added value provided to customers. Another goal is to build amore powerful organizational structure for the Group and place priority on enabling employees to upgrade theirskills. We want to create a highly energetic organization even as the Group continues to grow.
Specific goals and actions are as follows.
 Management policy
1. Establishing a foundation for sustainable growth after implementation of TOP 15 in order to realize our Vision, byfostering multiple numbers of world-class brands and promoting the expansion of our overseas operations anddevelopment of new brands
2. Presenting high value for customers and enhancing our brand value by bolstering our product planning andprocurement capabilities and making our shops even more attractive
3. Respecting diversity, actively developing and optimizing human resources, and invigorating our organizations
with the key words of "challenge," "communication," and "creativity" Growth strategy
1. Expanding our business scale by actively investing our management resources into our core brands
2. Boosting our capability to develop business in overseas markets
3. Striving to evolve our multi-brand strategy by developing new markets
4. Increasing points of contact with our customers by augmenting the function of our Web stores and securing closer
coordination among our stores, social networking system, and customer relationship management
5. Improving our overall capabilities as a team by promoting various efforts including mergers & acquisitions.
 Strengthening our business model
1. Bolstering our product planning and procurement capabilities
2. Enhancing our advertising and publicity function
3. Augmenting our logistics function
4. Expanding our outlet and inventory clearance capability
5. Strengthening our IT infrastructure
To increase the speed of these initiatives, the Company shifted to a holding company structure in 2013. There are
two major retail companies. One is POINT INC., which is involved mainly in sales of natural fashion style brands.
The other is TRINITY ARTS inc., a retailer of lifestyle-proposing brands for apparel, accessories and otherconsumer products. The Group also includes N9&PG Co., Ltd., which has outstanding capabilities in textile and- 12 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Yearproduct designs along with operations in many Asian countries. Having assembled this corporate group, the next
goal is to unify the activities of the companies that were combined in order to generate synergies quickly. As acorporate group with a broad customer base and the ability to develop highly distinctive merchandise, the Groupaims to transform itself into a “multi-brand” and “multi-category” organization with a focus on fashion. The Groupalso plans to build a “value chain” infrastructure that brings together planning, production and sales. All of theseactions will be used for business operations in Japan and other regions of Asia.
(4) Challenges
Significant changes are taking place in Japan’s apparel retailing industry. Major sources of change are the country’s
aging population and falling number of children, the increasing diversity of lifestyles, and competition from foreign
retailers that are entering Japan. Furthermore, strengthening value chains in order to support growth in Japan as wellas in overseas markets has become an important management issue because of globalization.
To be a winner in this environment, we believe that actions are needed to deal with the following issues.
1) In 2013, the Group integrated the management of TRINITY ARTS inc. and NATURAL NINE CO., LTD.
(currently N9&PG Co., Ltd.) and shifted to a holding company structure. We believe that the new Adastria Group
that was created by these actions must quickly build a foundation for future growth. We need to establish an
infrastructure that is capable of targeting an even broader spectrum of markets in Japan and other countries.
2) The workforce and organization of the Group have been growing along with the management integration and theincreasing scale of operations at group companies. Moreover, we expect that our network of offices andsubsidiaries will increase along with the expansion of our overseas operations. As we grow, we will need toensure that the entire group aims for the same goals and adheres to the same code of conduct. At the same time,
we must accumulate and share information, know-how and knowledge. All of these actions will be needed to
conduct business activities that can satisfy our customers. In addition, aiming for growth as a company isequivalent to aiming for the growth of the employees who perform the company’s activities. This is why we must
work on ways to continue providing employees an environment that enables them to upgrade their skills.
3) Japan is undergoing an unprecedented social change as its population ages and the number of children falls. We
must respond appropriately to the resulting changes in markets and lifestyles. Redefining the positioning ofexisting brands and creating a growth strategy that reflects brand characteristics will be two important actions.
Our success will also require becoming a source of new forms of added value for our customers, such as bydeveloping new brands and utilizing the Internet and social networking services.
4) For operations in Japan and growth overseas, the Group will have to create and manufacture merchandise with
substantial added value and then maintain a reliable supply of those products at all business locations.
Maximizing the added value that we offer our customers by performing the centralized oversight of every step,from product planning to manufacturing, distribution and sales, and then using this infrastructure to build aunique “value chain” will be vital to achieving sustained growth.

- 13 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

4. Consolidated Financial Statements(1) Consolidated Balance Sheet(Million yen)
FY2/14(As of Feb. 28, 2014)

FY2/13(As of Feb. 28, 2013)
AssetsCurrent assets
Cash and deposits

11,8498,540

Notes and accounts receivable-trade

4,829

6,016

Securities

6,499

-

Inventories

7,749

13,914

Deferred tax assets

959

1,392

Other

1,336

1,695

Allowance for doubtful accounts

(34)

(33)

33,19031,525

2,911

3,438

(899)

(1,217)

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Store interior equipment
Accumulated depreciation
Store interior equipment, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment

2,011

2,221

13,54021,774(7,606)(13,082)

5,933

8,692

2,321

2,321

342

168

1,009

1,594

(623)

(902)

386

691

10,994

14,095

1,797

10,606

812

1,182

2,609

11,789Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities

4,135

4,842

Lease and guarantee deposits

11,306

14,732

Deferred tax assets

1,013

1,840

Other

364

225

Allowance for doubtful accounts

(204)

(210)

Total investments and other assets

16,616

21,43030,22047,31563,41078,841

Total non-current assets
Total assets- 14 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

(Million yen)
FY2/14(As of Feb. 28, 2014)

FY2/13(As of Feb. 28, 2013)
Liabilities
Current liabilities
Notes and accounts payable-trade

13,90914,626

Short-term loans payable

508

4,734

Current portion of long-term loans payable

235-

Accounts payable-other

5,581

8,056

Income taxes payable

2,378

2,458

Deferred tax liabilities-

28

Provision for bonuses

1,212

1,594

Provision for directors' bonuses

51-

Other provision

163

290

Other

191

685

24,231

32,474

Bonds payable31-

Long-term loans payable

261-

Deferred tax liabilities-

925

Provision for directors' retirement benefits

101

101

Other

187

554

Total non-current liabilities

581

1,580

24,812

34,054

Capital stock

2,660

2,660

Capital surplus

2,517

6,986

Retained earnings

40,82633,482

Treasury shares(8,188)(407)

Total shareholders' equity

37,81642,722792

1,720

Total current liabilities
Non-current liabilities

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

728

Foreign currency translation adjustment

(17)

308

Total accumulated other comprehensive income

781

2,058

-

5

38,59844,786

63,41078,841

Subscription rights to shares
Total net assets
Total liabilities and net assets- 15 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Million yen)
FY2/14(Mar. 1, 2013 – Feb. 28, 2014)

FY2/13(Mar. 1, 2012 – Feb. 28, 2013)
Net sales

121,670

153,273

Cost of sales

50,516

68,404Gross profit

71,15484,869Advertising expenses

3,295

4,770

Provision of allowance for doubtful accounts

(73)

(15)

Directors' compensations

330

553

Salaries and bonuses

15,855

20,456

Provision for bonuses

1,201

1,521

Selling, general and administrative expenses

Provision for directors' bonuses

51-

Welfare expenses

2,702

3,525

Rents

21,846

26,341

Lease payments

1,032

656

Depreciation

4,695

5,968

Amortization of goodwill

64

2,130

Other

10,434

13,198

Total selling, general and administrative expenses

61,436

79,106

9,717

5,762

Operating income
Non-operating income
Interest income

136

Dividend income

59

69

House rent income

585

Insurance premiums refunded cancellation-

73

Revenue from electric power sales-

37

System lease income

3624

Temporary transfer charges income

28

-

Other

123

201

Total non-operating income

266

499

Interest expenses

6

91Commitment fee

108Foreign exchange losses-

16

Commission for purchase of treasury shares

7

20

Payments for employment of disabilities

-

51

Other

7

46

Total non-operating expenses

31

234

9,951

6,027

Non-operating expenses

Ordinary income- 16 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

(Million yen)
FY2/14(Mar. 1, 2013 – Feb. 28, 2014)

FY2/13(Mar. 1, 2012 – Feb. 28, 2013)
Extraordinary income
Gain on sales of non-current assets

18-

Gain on step acquisitions-

202

Total extraordinary income

18

202

217

452

Amortization of goodwill

-

6,196

Other

0

1

Extraordinary losses
Impairment loss

217

6,650

Income (loss) before income taxes and minority
interests

Total extraordinary losses

9,752

(420)

Income taxes-current

4,630

4,523

Income taxes-deferred

(379)

(212)

Total income taxes

4,251

4,311

Income (loss) before minority interests

5,501(4,731)

(6)

-

5,508

(4,731)

Minority interests in income (loss)
Net income (loss)- 17 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

Consolidated Statement of Comprehensive Income(Million yen)
FY2/14(Mar. 1, 2013 – Feb. 28, 2014)

FY2/13(Mar. 1, 2012 – Feb. 28, 2013)
Income (loss) before minority interests

5,501(4,731)

692

928

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to minority
interests- 18 -

4

21

218

326

915

1,276

6,416

(3,455)

6,396(3,455)20-

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

(3) Consolidated Statement of Changes in Equity
FY2/13 (Mar. 1, 2012 – Feb. 28, 2013)(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus Retained earnings Treasury shares

2,660

2,517

38,139Total shareholders’equity(2,241)

41,076

Changes of items during period
Dividends of surplus(2,820)(2,820)Net income (loss)

5,508

5,508

Purchase of treasury shares
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period(5,947)(5,947)

-

-

2,687

(5,947)(3,259)

2,660

2,517

40,826(8,188)37,816(Million yen)

Accumulated other comprehensive income
Valuation
Total
Subscription
Foreign
Minority Total net
difference on
Deferredaccumulated
rights tocurrencyinterests assets
available-for- gains or losses
othersharestranslation
sale
on hedges
comprehensive
adjustment
securities
incomeBalance at beginning of current
period

99

2

(209)

(106)

-

221

41,191

Changes of items during period
Dividends of surplus(2,820)Net income (loss)

5,508

Purchase of treasury shares(5,947)

Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period

692

4

191

888

-

(221)

666

692

4

191

888

-

(221)

(2,593)

792

7

(17)

781

-

-

38,598- 19 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

FY2/14 (Mar. 1, 2013 – Feb. 28, 2014)(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus Retained earnings Treasury shares

2,660

2,517

40,826

Total shareholders’equity(8,188)37,816

Changes of items during period
Dividends of surplus(2,612)

Net income (loss)(4,731)(2,612)(4,731)

Purchase of treasury shares(4,014)(4,014)

Disposal of treasury shares

11,75911,759

Increase by share exchanges

4,460

Issuance of new shares-exerciseof subscription rights to shares
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period

4,460

8

36

45

-

4,468

(7,344)

7,781

4,906

2,660

6,986

33,482(407)

42,722(Million yen)

Accumulated other comprehensive income
Valuation
Total
Subscription
Foreign
Minority Total net
difference on
Deferredaccumulated
rights tocurrencyinterests assets
available-for- gains or losses
othersharestranslation
sale
on hedges
comprehensive
adjustment
securities
incomeBalance at beginning of current
period

792

7

(17)

781

-

-

38,598Changes of items during period
Dividends of surplus(2,612)

Net income (loss)(4,731)

Purchase of treasury shares(4,014)

Disposal of treasury shares

11,759

Increase by share exchanges

4,460

Issuance of new shares-exerciseof subscription rights to shares
Net changes of items other thanshareholders’ equity
Total changes of items during
period

928

21

326

1,276

5

-

1,281

928

21

326

1,276

5

-

6,187

Balance at end of current period

1,720

28

308

2,058

5

-

44,78645- 20 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

(4) Consolidated Statement of Cash Flows(Million yen)
FY2/13
FY2/14(Mar. 1, 2012 – Feb. 28, 2013) (Mar. 1, 2013 – Feb. 28, 2014)
Cash flows from operating activities
Income (loss) before income taxes and minority interests

9,752

(420)

Depreciation

4,843

6,212

Impairment loss

217

452

Amortization of goodwill

64

8,326

Interest and dividend income

(72)

(75)

Interest expenses

6

91

Loss (gain) on step acquisitions

-

(202)

Increase (decrease) in provision for bonuses

72

(138)

Increase (decrease) in provision for directors' bonuses

51-

Increase (decrease) in provision for directors' retirement benefits(0)-

Increase (decrease) in allowance for doubtful accounts

(73)

(17)

Decrease (increase) in notes and accounts receivable - trade

212

2,648

Decrease (increase) in inventories(167)(2,595)

Increase (decrease) in notes and accounts payable - trade(365)(4,658)

Increase (decrease) in accounts payable - other

969

212

Increase (decrease) in accrued consumption taxes

(16)

424

Other, net

86

(662)

Subtotal

15,5799,597Interest and dividend income received

72

75

Interest expenses paid

(6)

(91)

Income taxes paid

(4,080)(4,974)

Net cash provided by (used in) operating activities

11,565

4,606

Cash flows from investing activities
Purchase of property, plant and equipment(5,337)(5,360)Purchase of intangible assets

(371)

(636)

Purchase of investment securities
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Repayments to minority shareholders

(878)

(1)

(1,817)

-

(817)

-

Payments for lease and guarantee deposits(1,510)(1,950)

Proceeds from collection of lease and guarantee deposits

538

1,018

Other, net

1098(10,184)(6,831)

Increase (decrease) in short-term loans payable212(2,091)

Proceeds from long-term loans payable

150

257

Net cash provided by (used in) investing activities
Cash flows from financing activities

Repayments of long-term loans payable

(61)

(886)

Cash dividends paid

(2,821)(2,612)

Purchase of treasury shares(5,947)(4,014)37(155)(8,430)(9,503)

Other, net
Net cash provided by (used in) financing activities

80

161

Net increase (decrease) in cash and cash equivalents

Effect of exchange rate change on cash and cash equivalents(6,969)(11,567)

Cash and cash equivalents at beginning of period

25,30818,338-

1,758

18,338

8,529

Increasing of cash and cash equivalents for stock exchange
Cash and cash equivalents at end of period- 21 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Changes in Accounting Policies
Following tax law revisions, from the current fiscal year, the Company and its certain domestic consolidated
subsidiaries have changed the method of depreciation of property, plant and equipment (excluding store interior
equipment) acquired on or after March 1, 2013 in line with methods prescribed in the revised Corporation Tax Act.
The effect of this change on operating income, ordinary income, and loss before income taxes and minority interestsin the current fiscal year is insignificant.
Segment and Other Information
Segment information
FY2/13 (Mar. 1, 2012 – Feb. 28, 2013)
Omitted since the Group has only a single business segment, which is the planning and sales of clothing and related
merchandise.
FY2/14 (Mar. 1, 2013 – Feb. 28, 2014)
Omitted since the Group has only a single business segment, which is the planning and sales of clothing and related
merchandise.
Related information
FY2/13 (Mar. 1, 2012 – Feb. 28, 2013)
1. Information by product or service
Omitted since sales to external customers in the category of a single product or service exceeded 90% of net sales
on the consolidated statement of income.
2. Information by region(1) Net sales
Omitted since sales to external customers in Japan exceeded 90% of net sales on the consolidated statement ofincome.
(2) Property, plant and equipment
Omitted since property, plant and equipment in Japan exceeded 90% of property, plant and equipment on the
consolidated balance sheet.
(3) Information by major client
Omitted since there is no sales to external customers whom accounted for 10% or more of net sales on the
consolidated statement of income.

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Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

FY2/14 (Mar. 1, 2013 – Feb. 28, 2014)
1. Information by product or service
Omitted since sales to external customers in the category of a single product or service exceeded 90% of net sales
on the consolidated statement of income.
2. Information by region(1) Net sales
Omitted since sales to external customers in Japan exceeded 90% of net sales on the consolidated statement ofincome.
(2) Property, plant and equipment
Omitted since property, plant and equipment in Japan exceeded 90% of property, plant and equipment on the
consolidated balance sheet.
(3) Information by major client
Omitted since there is no sales to external customers whom accounted for 10% or more of net sales on the
consolidated statement of income.
Information related to impairment losses on non-current assets for each reportable segment
FY2/13 (Mar. 1, 2012 – Feb. 28, 2013)
Omitted since the Group has only a single business segment, which is the planning and sales of clothing and related
merchandise.
FY2/14 (Mar. 1, 2013 – Feb. 28, 2014)
Omitted since the Group has only a single business segment, which is the planning and sales of clothing and related
merchandise.
Information related to goodwill amortization and the unamortized balance for each reportable segment
FY2/13 (Mar. 1, 2012 – Feb. 28, 2013)
Omitted since the Group has only a single business segment, which is the planning and sales of clothing and related
merchandise.
FY2/14 (Mar. 1, 2013 – Feb. 28, 2014)
Omitted since the Group has only a single business segment, which is the planning and sales of clothing and related
merchandise.
Information related to gain on bargain purchase for each reportable segment
FY2/13 (Mar. 1, 2012 – Feb. 28, 2013)
Not applicable.
FY2/14 (Mar. 1, 2013 – Feb. 28, 2014)
Not applicable.

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Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal YearPer Share Information
FY2/13(Mar. 1, 2012 – Feb. 28, 2013)(Yen)
FY2/14(Mar. 1, 2013 – Feb. 28, 2014)

1,775.28

1,844.17

241.45(206.42)

Net assets per share
Net income (loss) per share

Notes: 1. Diluted net income per share in FY2/14 is not presented since the Company has outstanding dilutive securities, thoughposted a net loss. Diluted net income per share in FY2/13 is not presented since the Company has no outstanding
dilutive securities.
2. The basis of calculating the net assets per share is as follows(Million yen)
FY2/14(As of Feb. 28, 2014)

FY2/13(As of Feb. 28, 2013)
Total net assets

38,59844,786-

5

Deduction on total net assets(of which subscription rights to shares)(

Net assets applicable to common stock

38,598-)44,780(5)

Number of shares of common stock used in
calculation of net assets per share (Thousand shares)

21,742

24,282

FY2/13(Mar. 1, 2012 – Feb. 28, 2013)(Million yen)
FY2/14(Mar. 1, 2013 – Feb. 28, 2014)

5,508(4,731)

3. The basis of calculating the net income (loss) per share is as follows

Net income (loss) per share
Amount not available to common stockholders--

Net income (loss) applicable to common stock

5,508(4,731)

Average number of shares of common stock
outstanding during the period (Thousand shares)

22,812

22,922- 24 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2014 Fiscal Year

Subsequent Events
Merger of consolidated subsidiaries
The Board of Directors of Adastria Holdings approved a resolution on February 18, 2014 to merge consolidated
subsidiary TRINITY ARTS inc., which is the surviving company, with BABYLONE INC. and this absorption-typemerger was conducted on April 1, 2014.
(1) Summary of merger
1) Name and business activities of companies involving merger
Name of company to merge:

TRINITY ARTS inc.

Business activities:

Planning, producing, and selling men and women clothes, and sundry goods

Name of company to be merged: BABYLONE INC.
Business activities:

Planning, producing, and retailing women clothes

2) Date of the merger
April 1, 2014
3) Method of the merger
The merger was an absorption-type merger: TRINITY ARTS inc., the surviving company, took over all businessesof BABYLONE INC., which was dissolved.
4) Names of the company after merger
TRINITY ARTS inc.
5) Item concerning summary of other transactions
Significant changes are taking place in the Group’s operating environment because of Japan’s aging population andfalling number of children, diversifying lifestyles, the entry of foreign companies in Japan, and other events. As aresult, one important strategic goal is to strengthen the Group’s brand portfolio by differentiating each brand andincreasing the growth potential of these brands.
Two wholly owned subsidiaries of the Company merged on April 1, 2014. One is TRINITY ARTS inc., a retailer oflifestyle-proposing brands for apparel, accessories and other consumer products. The other is BABYLONE INC.,
which uses high-end brands to sell apparel mainly at station buildings and fashion-business malls. We believe that
this merger was needed because of the importance of making brands more competitive by using advertising
activities, opening stores, and effectively using employees and other corporate resources.
(2) Summary of accounting method
As a transaction of units under the same control, the transaction will be processed in accordance with the“Accounting Standard for Business Combinations” (Accounting Standards Board of Japan (ASBJ) Statement No. 21,
December 26, 2008) and the “Guidance on Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures” (ASBJ Guidance No. 10, December 26, 2008).

This financial report is solely a translation of the Company’s Kessan Tanshin (including attachments) in Japanese, which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who
prefer an English translation.

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