Information Omitted from Materials for the 75th
Ordinary General Meeting of Shareholders

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NON-CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSNOTES TO THE NON-CONSOLIDATED FINANCIAL STATEMENTS(For the period from April 1, 2022 to March 31, 2023)

Wacoal Holdings Corp.

Among the information that are provided to shareholders in electronic format, the items described above are not includedin the materials (Delivered Documents) to be delivered to shareholders who have requested delivery of the materials,
pursuant to the provisions of the applicable laws and regulations and the second paragraph of Article 15 of Wacoal
Holdings Corp.’s Articles of Incorporation. The items described above have been audited as part of consolidated
financial statements and non-consolidated financial statements in the preparation of the independent auditor’s report andthe audit report by the Audit & Supervisory Board of Wacoal Holdings Corp.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended March 31, 2023
(Millions of Yen)
Equity attributable to owners of parent
Item

Balance as of April 1, 2022

Share capital

Capitalsurplus13,26029,077

Profit (loss)

Retainedearnings
158,940

Treasury
stock

Total

27,571(10,858)

217,990

2,878

220,868(1,776)42(1,734)

5,810

57

5,867

－

4,034

99

4,133

(8,035)(8,035)(8,035)

2,863

－

－

136

88

88

(1,776)

Other comprehensive income
Total comprehensive income

5,810
－

－

(1,776)

5,810

Repurchase of treasury stock
Cancellation of treasury stock(2,863)

Share-based payment transactions(48)

Dividends(4,243)Equity transactions with
noncontrolling interests
Transfer from other components ofequity to retained earnings

Noncontrolling
Total equity
interests

Other
componentsof equity

1,360(1,360)(4,243)(95)(4,338)

－

403

403

－

－

Total transactions with owners

－

(48)

(5,746)(1,360)(5,036)(12,190)308(11,882)

Balance as of March 31, 2023

13,26029,029151,418

32,021(15,894)

209,834

3,285

213,119(Note)

Amounts less than ¥1 million are rounded to the nearest million.

-1-

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(NOTES TO BASIS OF SIGNIFICANT MATTERS IN PREPARING CONSOLIDATED FINANCIAL
STATEMENTS)
1.

Standard of Preparation of Consolidated Financial Statements
Pursuant to the provisions of the first paragraph of Article 120 of the Ordinance on Company Accounting,the consolidated financial statements of Wacoal Holdings Corp. (the “Company”) and its subsidiaries(collectively, the “Group”) have been prepared in accordance with the Designated International Financial
Reporting Standards (“IFRS”). In accordance with the provisions in the second sentence of the firstparagraph of Article 120 of the Ordinance on Company Accounting, certain disclosure items required
under IFRS have been omitted from the consolidated financial statements.
The Group has implemented IFRS starting from the beginning of the current consolidated fiscal year, andthe date of transition to IFRS is April 1, 2021.

2.

Matters Regarding the Scope of Consolidation(1) Number of consolidated subsidiaries: 53(2) Principal consolidated
subsidiaries:

3.

Wacoal Corp.; Peach John Co., Ltd.; Lecien Corporation; Wacoal
Manufacturing Japan Corp.; Nanasai Co., Ltd.; Torica Inc.;
Wacoal International Corp.; Wacoal America Inc.; Wacoal
Europe Ltd.; Wacoal EMEA Ltd.; Wacoal Europe SAS; Wacoal
International Hong Kong Co., Ltd.; Wacoal Hong Kong Co.,
Ltd.; Wacoal Investment Co., Ltd.; Wacoal China Co., Ltd.; andA Tech Textile Co., Ltd.

Matters Regarding the Application of the Equity Method(1) Number of affiliated companies: 8(2) Principal affiliated companies:

4.

Shinyoung Wacoal Inc.; Taiwan Wacoal Co., Ltd.; and Thai
Wacoal Public Company Limited

Matters Regarding the Standard of Accounting Principles(1)

Financial assets(i) Initial recognition and measurement
The Group classifies its financial assets into two categories: financial assets measured at fairvalue through profit or loss or other comprehensive income, and financial assets measured atamortized cost. This classification is determined at the time of initial recognition.
The Group recognizes the financial instruments on the date of transaction in which the Group
becomes a party to the contract related to the financial asset.
All financial assets are measured at fair value plus transaction costs except for those classified as
at fair value through profit or loss.
Financial assets are classified as financial assets measured at amortized cost if both of thefollowing requirements are met.
•

An asset is held in accordance with a business model where the objective is to hold theasset for collecting contractual cash flows•

Contractual terms of a financial asset result in cash flows that are solely payments ofprincipal and interest on the principal balance that occurs on a specific date.

Financial assets other than financial assets measured at amortized cost are classified as financial
assets measured at fair value.
-2-With respect to equity instruments measured at fair value, the Group designates for each equity
instrument whether it is to be measured at fair value through profit or loss, or at fair value throughother comprehensive income, except for equity instruments that are held for trading purpose
which are measured at fair value through profit or loss, and applies such designation on an
ongoing basis.
(ii) Subsequent measurement
Financial assets are measured after initial recognition as follows, depending on theirclassification:a) Financial assets measured at amortized cost
Financial assets measured at amortized cost are measured at amortized cost using theeffective interest method.
b) Financial assets measured at fair value
Changes in fair value of financial assets measured at fair value are recognized as profit orloss.
However, with respect to equity instruments designated as measured at fair value throughother comprehensive income, changes in fair value are recognized as other comprehensive
income. Dividends from such financial assets are recognized as profit or loss for the current
fiscal year as a part of finance income.
c) Derecognition of financial assets
The Group derecognizes a financial asset when the contractual rights to the cash flows fromthe financial asset expire, or when the Group transfers substantially all of the risks andrewards of ownership of the financial asset. If the Group continues to have control over suchtransferred financial asset, the asset and the related liability are recognized to the extent of its
continuing involvement.
d) Impairment of financial assets
For financial assets measured at amortized cost, the Group recognizes allowance for doubtfulreceivables for expected credit losses.
At each balance sheet date, the Group assesses whether the credit risk related to eachfinancial asset has increased significantly from the date of the initial recognition. If thecredit risk has not increased significantly from the date of the initial recognition, the Group
recognizes 12-months expected credit loss as allowance for doubtful receivables. In contrast,
if the credit risk has increased significantly from the date of the initial recognition, an amountequal to the expected credit loss for the entire period is recognized as allowance for doubtfulreceivables.
In principle, the Group considers that the credit risk has significantly increased if contractual
payments are past due for more than 30 days. In assessing whether the credit risk has
increased significantly, the Group considers information that is reasonably available andsupportable (internal and external ratings, etc.) in addition to past-due status information.
If the credit risk associated with a financial asset is considered to be low as of the balance
sheet date, the credit risk of the financial asset is not considered to have increased
significantly since the date of the initial recognition. A financial asset is considered to be in
default if it is determined that all or part of the financial asset is uncollectible or extremely
difficult to collect.
However, for trade receivables and contract assets that do not contain significant financial
elements, an allowance for doubtful receivables is recognized in an amount equal to the
expected credit loss for the entire period, regardless of whether there has been a significant
increase in the credit risk from the date of the initial recognition.
-3-

Expected credit losses are recognized at the present value of the difference between allcontractual cash flows to be paid to the entity under the contract and all cash flows the entity
expects to receive.
The Group estimates the expected credit loss on financial asset in a manner that reflects thefollowing:•

Unbiased and probability-weighted amount that is determined by evaluating a range ofpossible outcomes•

Reasonable and supportable information regarding past events, current conditions andforecasted future economic conditions that is available as of the reporting date without
undue cost or effort

In the event of significant economic fluctuations, etc., necessary adjustments are made to the
expected credit losses measured above.
If the Group does not have a reasonable expectation of collecting all or part of a given
financial asset, the Group directly writes down the carrying amount of the financial asset inits gross amount.
The provision of allowance for doubtful receivables on financial assets is recognized as profit
or loss. When an event occurs that reduces the allowance for doubtful receivables, a reversalof the allowance for doubtful receivables is recognized as profit or loss.
(2)

Inventories
Inventories are valued at the lower of acquisition cost or net realizable value. Raw materials arevalued at the lower of cost, being determined by the first-in, first-out method. Finished goods,
merchandise and work in process are valued at the lower of cost, being determined by the average
cost method. Net realizable value is calculated as estimated selling price in the ordinary course ofbusiness, less estimated cost to complete and estimated cost to sell.

(3)

Property, plant and equipment
Property, plant and equipment are measured using the cost model and are valued at acquisition
cost less accumulated depreciation and accumulated impairment charges.
Acquisition cost includes cost directly related to the acquisition of the asset, demolition, removal
and restoration costs, as well as borrowing costs that qualify for capitalization.
Depreciation of each asset other than land and construction in progress is recognized on astraight-line method over the estimated useful lives of the respective assets. The estimated useful
lives of major asset items are as follows:•

Buildings and structures

2 to 50 years (principally 38 years)•

Machinery and equipment

2 to 20 years (principally 5 years)

The estimated useful lives, residual values and depreciation methods are reviewed at the end ofeach fiscal year. If any changes are made, the changes are applied prospectively as changes inaccounting estimates.
(4)

Goodwill and intangible assetsa) Goodwill
The Group initially measures goodwill as the fair value of the consideration transferred,
including the recognized amount of any noncontrolling interest in the acquiree measured asof the acquisition date, less the net recognized amount of identifiable assets acquired andliabilities assumed (generally fair value) as of the acquisition date.
Goodwill is not amortized, and is tested for impairment each fiscal year and whenever there’s
an indication of potential impairment.
-4-

Impairment charges on goodwill are recognized in the consolidated statement of profit or loss
and are not subsequently reversed.
Goodwill is valued at acquisition cost less accumulated impairment charges in the
consolidated statement of financial position.
b) Intangible assets
Intangible assets acquired individually are measured at cost upon initial recognition.
Intangible assets acquired in a business combination are measured at fair value as of theacquisition date.
Measurement after initial recognition is made using the cost model and is valued atacquisition cost less accumulated amortization and accumulated impairment charges.
All expenses for internally generated intangible assets are charged to expense in the period inwhich they are incurred, except for development costs that qualify for capitalization.
Intangible assets with finite useful lives are amortized on a straight-line method over theestimated useful lives of the respective assets. The estimated useful lives of major intangible
asset items are as follows.
•

Brand

20 and 25 years (principally 25 years)•

Software5 years

The estimated useful lives, residual values and depreciation methods are reviewed at the endof each fiscal year. If any changes are made, the changes are applied prospectively aschanges in accounting estimates.
Intangible assets with indefinite useful lives include trademarks and paintings. The Groupassumes that these intangible assets have indefinite useful lives because they can be used
continuously as long as the business continues.
Intangible assets with indefinite useful lives are measured at cost, less accumulated
impairment charges.
Intangible assets with indefinite useful lives are not amortized and are tested for impairment,
either individually or in cash-generating units, each fiscal year and whenever there’s anindication of potential impairment.
(5)

Investment properties
Investment properties are real estate held for the purpose of generating rental income or capitalgains, or both. The cost model is used for the post-recognition measurement of an investment
property, which is valued at cost less accumulated depreciation and accumulated impairment
charges. Depreciation of each asset other than land is calculated on a straight-line method over
the respective estimated useful lives.

(6)

LeasesWhen the Group becomes a lessee under a lease contract, the Group recognizes a right-of use
asset and a lease liability at the commencement date of the lease. Lease liability is measured at
the present value of the total outstanding lease payments accrued, and right-of use asset ismeasured at acquisition cost, which is the amount of the initial measurement of the lease liability
adjusted for lease payments made prior to the commencement date, less any lease incentives
received, original direct costs, and restoration costs other than those incurred to produce theinventories.
After initial recognition, a right-of use asset is depreciated on a straight-line method basis overthe shorter of the useful life or the lease term.

-5-

Lease payments consist of fixed and variable lease payments for the right to use the underlying
asset during the lease term that have not been paid at the commencement date.
However, no right-of use asset or lease liability is recognized for short-term leases with a leaseterm of 12 months or less and leases with small underlying assets, but the total lease payments arerecognized over the lease term either on a straight-line method or on another regular basis.
(7)

Impairment of nonfinancial assets

The carrying amounts of the Group’s nonfinancial assets, excluding inventories and deferredincome taxes, are reviewed for impairment at each balance sheet date. If there is an indication ofpotential impairment, the recoverable amount of the asset is estimated.
The recoverable amount of an asset or a cash-generating unit is the higher of its value in use or its
fair value less costs to dispose. When calculating value in use, estimated future cash flows are
discounted to present value using pre-tax discount rate that reflects the time value of money andrisks inherent in the asset. Assets that are not tested individually for impairment are consolidated
into the smallest cash-generating unit which generates cash inflows that are generally independentof the cash inflows of other assets or asset groups through continuous use. When testing goodwill
for impairment, the cash-generating unit to which goodwill is allocated is consolidated, so that
impairment is tested to reflect the smallest unit to which the goodwill relates. Goodwill acquired
in a business combination is allocated to a cash-generating unit that is expected to benefit fromthe synergies of the combination.
The Group’s corporate assets do not generate independent cash inflows. If there is an indicationof potential impairment on a corporate asset, the recoverable amount of the cash-generating unit
to which the corporate asset belongs is determined.
An impairment charge is recognized in profit or loss when the carrying amount of an asset or acash-generating unit exceeds its estimated recoverable amount. Impairment charge recognized inconnection with a cash-generating unit is allocated first to reduce the carrying amount of goodwill
allocated to such unit, and then the carrying amount of other assets within the cash-generating
unit is reduced proportionately.
No impairment charges related to goodwill are reversed. For other assets, previously recognizedimpairment charges are evaluated at each balance sheet date for indications that the losses may be
reduced or eliminated. Impairment charges are reversed if there is any change in the estimatesused to determine the recoverable amount. Impairment charges are reversed up to the carrying
amount after deducting the necessary depreciation and amortization from the carrying amountthat would have been recorded if no impairment charges had been recognized.
(8)

Provisions
Provisions are recognized when, as a result of past events, the Group has a present legal orconstructive obligation, it is probably that an outflow of economic resources will be required tosettle such obligation, and a reliable estimate can be made of the amount of the obligation. Whenthe time value of money is significant, the estimated future cash flows are discounted to present
value using pre-tax discount rate that reflects the time value of money and risks inherent in theliability. Any rebate of the discounted amount over time is recognized as finance expense.

(9)

Employee benefits
The Group operates both defined benefit and defined contribution plans as post-employment
benefit plans.
The Group calculates the present value of defined benefit plan obligations and related current
service cost as well as past service cost using the projected unit credit method.
The liability or asset related to the defined benefit plan is calculated as the present value of thedefined benefit plan obligations less the fair value of the plan assets.

-6-

The remeasurement amount of the defined benefit plan is collectively recognized in othercomprehensive income in the period in which it is incurred, and is transferred immediately fromother components of equity to retained earnings.
Past service cost is recognized as profit or loss in the period in which it is incurred.
The cost of post-employment benefits for defined contribution pension plans is recognized as an
expense when the related service is rendered by an employee.
(10)

Revenue from contracts with customers
Except for interest and dividend income in accordance with IFRS 9 Financial Instruments and
IFRS 16 Leases, the Group recognizes revenue from contracts with customers based on thefollowing five steps:
Step 1:
Step 2:
Step 3:
Step 4:
Step 5:

Identify the contract(s) with the customer
Identify the performance obligations in the contract
Measure the transaction price
Allocate the transaction price to the performance obligations in the contract
Recognize revenue when (or as) the entity satisfies the performance obligations

The Group recognizes revenue when control of a product is transferred to a customer and when
performance obligations are satisfied. Revenue is calculated based on the transaction price lessdiscounts and rebates. Also, returns that are expected in the future are estimated and deductedfrom revenue taking into account the actual returns in prior periods.
(NOTES TO SIGNIFICANT ACCOUNTING ESTIMATE)
The following is a list of items of which amount has been prepared using accounting estimate and recordedin the consolidated financial statements for the current fiscal year that may have a material effect on the
consolidated financial statements for the next fiscal year.
Goodwill allocated to Wacoal Europe Ltd. Group: ¥10,221 million
Goodwill allocated to Wacoal International Corp. Group: ¥6,035 million
To test for goodwill impairment, the carrying amount of each cash-generating unit is compared with its
recoverable amount. If the recoverable amount is below its carrying amount, an impairment charge isrecognized in an amount equal to that deficiency. The recoverable amount is the higher of the fair valueless costs to dispose of the cash-generating unit or value in use.
In calculating the recoverable amount, certain assumptions are made regarding the remaining useful life ofan asset, future cash flows, discount rates, growth rates and other factors. There assumptions are
determined based on management’s best estimates and judgment. However, the assumptions may beaffected by changes in business plans and economic conditions in the future, and if they need to bereviewed, this may have a significant impact on the amounts recognized in the consolidated financial
statements from the next fiscal year and onwards.
Based on the aforementioned impairment assessment, the Group recorded an impairment charge of 8,281
million yen on goodwill for Wacoal International Corp. Group in the fiscal year ended March 31, 2023.
The Group did not record any impairment charges on goodwill for Wacoal Europe Ltd. Group.

-7-

(NOTES TO CONSOLIDATED STATEMENT OF FINANCIAL POSITION)
1.

Allowance for Doubtful Receivables Deducted Directly from Assets
Trade and other receivables
Other financial assets

2.

¥207 million¥225 million

Accumulated Depreciation and Accumulated Impairment Charges related to Assets
Net property, plant and equipment
Right-of-use assets
Investment property¥67,964 million¥9,905 million¥2,960 million(NOTES TO CONSOLIDATED STATEMENT OF PROFIT OR LOSS)
1.

Gain on Sale of Property, Plant and Equipment
During the current consolidated fiscal year, the Group recorded a gain on sale of property, plant andequipment in the amount of 3,117 million yen in “Other income”. The gain is mainly due to the transfer ofa portion of fixed assets held by the Company for the effective utilization of management resources.

2.

Impairment Charges
The Group has recorded an impairment charge of 10,033 million yen in “Other expenses” on the right-of
use asset, goodwill and intangible assets related to Wacoal International Corp. Group, a consolidated
subsidiary. The impairment charge is mainly due to continued sluggish sales.

3.

Additional Retirement Allowance
The Group has recorded an additional retirement allowance of 688 million yen in “Other expenses” inconnection with the implementation of the Flexible Retirement Program at Wacoal Corp., a consolidated
subsidiary.

(NOTES TO CONSOLIDATED STATEMENT OF CHANGES IN EQUITY)
1.

Class and total number of issued shares as of March 31, 2023
Common stock: 64,500,000 shares

2.

Matters regarding dividends(1)

Resolution
At the Board of
Directors’Meeting held on
May 13, 2022
At the Board of
Directors’Meeting held on
November 11,
2022

Dividend payments

Class of Shares

Total Amountof Dividends(Millions ofyen)

Dividends per
Share
(Yen)

Record Date

Effective Date

Common Stock

1,844

30.00

March 31, 2022

June 6, 2022

Common Stock

2,399

40.00

September 30, 2022

December 9, 2022

-8-

(2)

Dividend with a record date in the current consolidated fiscal year but has an effective date in thefollowing fiscal year

Resolution

Class of
Shares

Source ofDividend

Total Amountof Dividends(Millions ofyen)

Dividends per
Share
(Yen)

Record Date

Effective Date

At the Board of
Directors’Meeting held on
May 12, 2023

CommonStockRetained
Earnings

2,321

40.00

March 31, 2023

June 5, 2023

3.

Class of shares and number of shares represented by the stock acquisition rights (excluding those forwhich the first day of the exercise term has not yet arrived) as of the end of the current consolidated fiscal
year
Common stock: 241,300 shares(NOTES TO THE FINANCIAL INSTRUMENTS)
1.

Matters Regarding the Status of Financial Instruments(1)

Capital management

The Group manages capital in aim to maximize corporate value through sustainable growth.
The main indicator used by the Group in capital management is the return on equity attributable to ownersof parent, which is reported to and monitored by management on a regular basis. There are no significant
capital regulations which are applied to the Group.
(2)

Management of financial risks

The Group is exposed to financial risks (credit risk, liquidity risk, foreign exchange risk, interest rate risk,
and market price fluctuation risk) in the course of its management activities, and manages such risks basedon certain policies to mitigate such financial risks. The Group uses derivatives transactions to hedge
foreign exchange fluctuation risks and does not engage in speculative transactions.
(3)Management of credit risk

Credit risk is defined as the risk that parties with whom the Group has contracted failed to perform theircontractual obligations under the financial assets held by the Group, resulting in financial loss to theGroup.
In accordance with the credit management regulations, the Group manages due dates and outstandingbalances for each counterparty, and periodically monitors the credit status of our major counterparties.
The Group enters into derivative transactions only with creditworthy financial institutions and impact ofsuch transactions on credit risk is limited.
The Group does not have excessively concentrated credit risk with respect to specific counterparties orgroups to which such counterparties belong.
(4)

Management of liquidity risk

Liquidity risk is defined as the risk that the Group may not be able to make payments when due to fulfill
obligations to repay financial liabilities upon maturity.
The Group manages liquidity risk by preparing adequate funds for repayments, securing credit lines
available from financial institutions as needed, and continuously monitoring cash flow plans and results.

-9-

(5)

Management of market riska) Management of foreign exchange risk
The Group’s assets and liabilities denominated in foreign currencies related to its overseas
business activities are exposed to the risk of market fluctuations in foreign exchange rates.
The Group uses derivative instruments to manage such risk. Derivative instruments are usedbased on the internal policy and management regulations, and are not held for speculative
purposes. The Group believes the credit risk of derivatives held by the Group is considered
to be negligible because the counterparties to these derivatives are all international financial
institutions with high credit ratings.
b) Management of interest rate risk
The Group pays interest on the funds which procure for working capital and capital
investment in conducting its business activities. Interest rate sensitivity analysis is not
performed because the impact of interest rate payments on the Group is minimal, and thecurrent interest rate risk is not considered material to the Group.
c) Management of market price fluctuation risk
The Group holds marketable equity securities and is exposed to the risk of market pricefluctuations. The Group reviews its holdings of these marketable equity securities on an
ongoing basis by regularly monitoring their fair value and the financial condition of theissuers. All of equity securities are designated as financial assets measured at fair value
through other comprehensive income, and there is no effect on profit or loss from changes inthe share price.

- 10 -

2.

Fair Values of Financial Instruments(1)

Calculation method of fair value

The calculation method of fair value of financial instruments is as follows.
(Cash and cash equivalents; trade and other receivables; trade and other payables; short-term bank loans)
These accounts have short maturities and the carrying values approximate fair value.
(Equity securities)
Listed equity securities are measured using quoted market prices. Unlisted equity securities are valued bycomparable multiple valuation method using financial indicators or other appropriate valuation methods.
(Derivatives)
Derivatives are valued at fair value as quoted by correspondent financial institutions.
(Long-term borrowings)
The fair value of the Group’s long-term borrowings is calculated by discounting estimated future cash
flows using the interest rate that would apply to a new loan with the same remaining maturity and similarterms and conditions. There fair values are measured based on Level 2.
(2)

Financial instruments measured at amortized cost

The carrying amounts and fair values of financial instruments at amortized cost are as follows. Financial
instruments whose carrying amount approximates their fair value in the Consolidated Statement of
Financial Position are excluded from the table below.
Carrying amountFinancial assets measured at amortized cost
Corporate bonds
Financial liabilities measured at amortized cost
Long-term borrowings (including current portion)(3)(Millions of yen)
Fair value

96

95

3,084

2,986

Financial Instruments measured at fair value

The fair value of financial instruments is categorized into the following three levels depending on theobservability and significance of inputs used in making fair value measurements:
Level 1:

Fair value measured at quoted prices in active markets for identical assets or liabilities.

Level 2:

Fair value determined, either directly or indirectly, by using observables inputs other thanLevel 1.

Level 3:

Fair value determined using valuation techniques based on unobservable inputs.

Transfers between levels of fair value hierarchy are recognized on the date the event or change incircumstances which triggered the transfer. There were no material transfers between fair value at Level 1
and Level 2 during the current consolidated fiscal year.

- 11 -

The fair value hierarchy of the financial instruments at fair value are as follows.

Financial assets:
Financial assets measured at fair value
through profit or loss
Derivatives
Equity securities
Mutual funds
Financial assets measured at fair value
through other comprehensive income
Equity securities
Others
Total
Financial liabilities:
Financial liabilities measured at fairvalue through profit or loss
Derivatives
Total

Level 1

Level 2

Level 3

(Millions of yen)
Total

175

7
-

1,616
-

7
1,616
175

43,22343,398

7

817
31
2,464

44,04031
45,869

-

18
18

-

18
18

Adjustments of financial instruments categorized at Level 3
The adjustments made for financial instruments categorized at Level 3 from balance at April 1, 2022 tobalance at March 31, 2023 are as follows.

Balance as of April 1, 2022
Total gains and losses
Profit (loss) (Note)
Other comprehensive income
Purchases
Sales and settlements
OthersBalance as of March 31, 2023
Unrealized gain (loss) on assets and liabilities held at
the end of period included in net income or loss

Equitysecurities
2,793

Other
182

(Millions of yen)
Conditional
consideration
1,493

(416)
56
0
2,433

4
(155)
31

(938)
(715)
160
-

(416)

-

-

(Note) Gains and losses recognized in profit or loss are included under “Selling, general and administrative
expenses”, “Finance income” and “Finance costs” in the Consolidated Statement of Profit or Loss.
(NOTES TO INVESTMENT PROPERTY)
1.

Matters Regarding the Status of Investment Properties
The Company and some of its subsidiaries hold land and other assets for lease in Fukuoka prefecture andother regions.

2.

Matters Regarding Fair Value of Investment Properties(Millions of yen)Amount recorded in consolidated statement of financial position
2,957

Fair value
7,779(Note) 1. The amount recorded in the consolidated statement of financial position is the acquisition cost lessaccumulated depreciation and accumulated impairment charges.
2. The fair value of an investment property is based on real estate appraisals value by an outside realestate appraiser and the valuation is based on market evidence which reflects the transaction prices- 12 -

of similar assets in accordance with the valuation standards of the country in which the property is
located.
(NOTES TO REVENUE RECOGNITION)
1.

Disaggregation of Revenue
The disaggregation of revenue from our main products are as follows.
(Millions of yen)
Total
Innerwear
Foundation and lingerieNightwear
Children’s underwear
Subtotal
Outerwear/Sportswear
Hosiery
Other textile goods and related products
OthersTotal

2.

151,715
6,833
931
159,479
12,815
1,366
6,530
8,402
188,592

Contract liabilities
Contract liabilities from contracts with customers during the current consolidated fiscal year are as
follows:(Millions of yen)
Fiscal year ended March 31, 2023
1,380

Contract liabilities

Revenue recognized for the fiscal year ended March 31, 2023, which had been included in the contract
liabilities balance at the beginning of the fiscal year was 1,069 million yen.
Contract liabilities consist mainly of customer loyalty points.
Some of subsidiaries have customer loyalty programs as part of the promotion and provide loyalty points
to customers when they purchase the products. The points provided to customers are identified as
performance obligations, which are satisfied when the points are redeemed for the products. The points
are expected to be used or expire over the next two years. The unredeemed points as of the end of year arerecorded as contract liabilities, which are estimated based on actual redemption amounts from previous
fiscal year. Contract liabilities are included in “Other current liabilities”.
3.

Transaction price allocated to residual performance obligations
Since there is no significant transaction whose individual expected contract period exceeds 1 year, theGroup has applied the practical expedient method and omitted the information regarding residual
performance obligations.

(NOTES TO PER SHARE INFORMATION)
Equity attributable to owners of parent per share
Basic loss per share
Diluted loss per share¥3,617.03¥(29.66)¥(29.66)(NOTES TO SIGNIFICANT SUBSEQUENT EVENTS)
Capital Reserve Reduction
The Board of Directors adopted a resolution at a meeting held on May 12, 2023 to propose reduction of the amountof capital reserve and transfer of capital reserve to additional paid-in capital at the 75th Ordinary General Meetingof Shareholders to be held on June 28, 2023.
- 13 -

1.

Purpose of Capital Reserve Reduction
In order to prepare for flexible capital policies in the future and to ensure flexibility and elasticity in financial
strategies, the Company will reduce the amount of capital reserve and transfer the same amount to additional
paid-in capital pursuant to the provisions of Paragraph 1, Article 448 of the Companies Act.

2.

Details of Capital Reserve Reduction
The capital reserve of 29,294,142,292 yen will be reduced, and the same amount will be transferred toadditional paid-in capital.

3.

Schedule of Capital Reserve Reduction(i) Date of Board of Directors’ resolution:

May 12, 2023(ii) Date of Ordinary General Meeting of Shareholders’ resolution:

June 28, 2023 (planned)(iii) Date of public notice for making objections by creditors:

July 10, 2023 (planned)(iv) Final date for making objections by creditors:

August 10, 2023 (planned)(v) Effective dateAugust 31, 2023 (planned)

Purchase of Treasury Stock
The Board of Directors adopted a resolution at a meeting held on May 12, 2023 regarding matters related topurchase of treasury stock pursuant to the provisions of Paragraph 1, Article 459 of the Companies Act.
1.

Reason for Purchase of Treasury StockTo return profits to the shareholders, improve capital efficiency and implement our capital policy withincreased flexibility tailored to the business environment.

2.

Details of Purchase(i) Type of shares to be purchased:

Common stock of the Company(ii) Total number of shares to be purchased:

3,800,000 shares (at maximum)(iii) Aggregate purchase amount:¥10,000 million (at maximum)(iv) Purchase period:

From May 22, 2023 through March 22, 2024

Cancellation of Treasury Stock
The Board of Directors adopted a resolution at a meeting held on May 12, 2023 regarding matters related tocancellation of treasury stock pursuant to the provisions of Article 178 of the Companies Act.
(i) Type of shares to be cancelled:

Common stock of the Company(ii) Number of shares to be cancelled:

3,500,000 shares(iii) Date of cancellation:

May 26, 2023

- 14 -

NON-CONSOLIDATED STATEMENT OFCHANGES IN NET ASSETS
Year ended March 31, 2023
(Millions of yen)
Shareholders’ Equity
Additional paid-in
capitalRetained earnings
Other retained earnings

Items

Balance as of April
1, 2022
Changes during
current fiscal year
Provision ofreserve fordeferred gain on
sales of property
Reversal ofreserve fordeferred gain onsale of property
Cash dividends
Net income
Repurchase oftreasury stock
Cancellation oftreasury stock
Restricted stockcompensation
Exercise of stockacquisition rights
Net change initems other thanshareholders’equityTotal changes during
current fiscal year
Balance as of March
31, 2023

Commonstock

13,260Capitalreserve

Other
additional
paid-in
capitalLegalreserve

Reserve fordeferred gainon sale ofproperty

Generalreserve

Retainedearnings
carriedforward29,294

-

3,315

4,934

90,0007,813

Treasurystock, at cost

Total
shareholders’equity(10,858)

137,758

-

(198)

198

-

(4,242)
4,458(4,242)
4,458(8,034)(8,034)

2,862

-

4

84

89

(3)

51

47

(2,862)

-

-

0

-

(198)

-

(2,448)(5,036)(7,683)

13,26029,294

0

3,315

4,735

90,0005,365(15,894)130,075- 15 -

(Millions of yen)
Items

Balance as of April 1,
2022
Changes during current
fiscal year
Provision of reserve fordeferred gain on sales ofproperty
Reversal of reserve fordeferred gain on sale ofproperty
Cash dividends
Net income
Repurchase of treasury
stock
Cancellation of treasury
stock
Restricted stockcompensation
Exercise of stockacquisition rights
Net change in items
other than shareholders’equityTotal changes during
current fiscal year
Balance as of March 31,
2023(Note)

Stock Acquisition Rights

Total net assets

573

138,332-(4,242)
4,458(8,034)
89
(47)

0

(47)

(7,730)526

130,602

Amounts less than ¥1 million are rounded down to the nearest million.

- 16 -NOTES TO THE NON-CONSOLIDATED FINANCIAL STATEMENTS(NOTES TO MATTERS RELATED TO SIGNIFICANT ACCOUNTING POLICIES)
1.

Valuation Standards and Method of Valuing Assets
Valuation standards and method of valuing securities
Investments in subsidiaries and affiliated companies are stated at cost based on the moving-average cost
method. Marketable and investment securities are stated at market value determined based on market
prices, on the balance sheet date. Nonmarketable investment securities are stated at cost based on themoving-average method. Net unrealized gain (loss) on available-for-sale securities is reported directly in
net assets. Cost of investment securities sold is determined based on the moving-average method.

2.

Depreciation Method of Fixed Assets(1)

Depreciation method of property, plant and equipment
Depreciation of property, plant and equipment is calculated based on the straight-line method.
Useful lives of major items are as follows:
Buildings and structures
Machinery
Equipment (excluding certain paintings)(2)

2 to 50 years
17 years
3 to 20 years

Amortization method for intangible assets
Amortization of intangible assets is computed by the straight-line method. Internal use ofsoftware is amortized based on an estimated useful life of five years.

3.

Basis of Accounting for Allowances(1)

Allowance for doubtful receivables
In order to reserve for losses on bad debts, an allowance for doubtful receivables is stated in an
amount considered to be appropriate based on the Company’s past credit loss experience and anevaluation of potential losses in the receivables outstanding.

(2)

Accrued bonuses
In order to reserve bonuses to employees, accrued bonuses are calculated based on the anticipatedamount to be paid.

(3)

Accrued officers’ bonuses
In order to reserve bonuses to officers, accrued officers’ bonuses are calculated based on the
anticipated amount to be paid.

4.

Basis for Recording Revenues and Expenses
Except for interest income and dividend income in accordance with ASBJ Statement No. 10, AccountingStandard for Financial Instruments, and revenue in accordance with ASBJ Statement No. 13, AccountingStandard for Lease Transactions, the Company recognizes revenue based on the following five steps:
Step 1:
Step 2:
Step 3:
Step 4:
Step 5:

Identify the contract(s) with customer
Identify the performance obligations of contract
Measure the transaction price
Allocate the transaction price to the performance obligations in the contract
Recognized revenue when (or as) the entity satisfies a performance obligations

The Company primarily provides management guidance services to Wacoal Corp., which are recorded inoperating revenue (other). The performance obligations are satisfied over time and the Company
recognizes revenue evenly throughout the contract period measured based on the amount of consideration
promised in the contract with the customer. Revenue from sales of the services is recognized when
- 17 -

performance obligations are satisfied, which is upon delivery of services. The Company invoices when it
satisfies the performance obligation and receive cash payment shortly thereafter.

(NOTES TO SIGNIFICANT ACCOUNTING ESTIMATE)
The following is a list of item of which amount has been prepared using accounting estimate and recordedin the consolidated financial statements for the current fiscal year that may have a material effect on the
consolidated financial statements for the next fiscal year.
Valuation of investment security in Wacoal Europe Ltd. ¥17,405 million
Investments in securities whose market value is extremely difficult to measure are recorded at cost. If thevalue in substance decreases dramatically, the carrying amount shall be reduced to the value in substanceand the loss shall be accounted for through profit or loss. To measure the value in substance, the Group
used the expected present value of future cash flows and incorporated relevant unobservable inputs, suchas management's internal assumptions about future cash flows and appropriately risk-adjusted discountrates.
Such assumptions include fluctuations in business activities, tax rates and risk-adjusted discount rates.
There is a possibility that impairment charges would be recognized if the forecast of business results
deteriorate or the tax rates or risk-adjusted discount rates increase.
Based on the aforementioned impairment assessment, the Group recorded no impairment charges oninvestment security in Wacoal Europe Ltd. in the fiscal year ended March 31, 2023.
(NOTES TO THE NON-CONSOLIDATED BALANCE SHEETS)
1.

Accumulated depreciation of property, plant and equipment:

2.

Receivables from subsidiaries and affiliated companies and payables tosubsidiaries and affiliated companies
Short-term receivable:
Short-term payable:

3.

¥35,126 million¥8,290 million¥16,411 million

Liabilities for guarantees
The Company provides guarantees for payables of electronically recordedmonetary claims of a certain subsidiary.
Lecien Corporation:¥32 million(NOTES TO THE NON-CONSOLIDATED STATEMENTS OF INCOME)
Transactions with subsidiaries and affiliated companies
Operating revenue:¥6,735 million

Other operating transactions:¥61 million

Non-operating transactions:¥40 million(NOTES TO THE NON-CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS)
Number of treasury stocks as of March 31, 2023
Common stock: 6,487,185 shares- 18 -

(NOTES TO TAX EFFECT ACCOUNTING)
Breakdown of deferred tax assets and deferred tax liabilities
Deferred tax assets:
Valuation loss on investments in subsidiaries and affiliated companies
Accrued bonuses
Depreciation, amortization and impairment loss
Allowance for doubtful accounts
OthersSubtotal of deferred tax assets
Valuation allowance
Total deferred tax assets:
Deferred tax liabilities:
Reserve for deferred gain on sale of property
OthersTotal deferred tax liabilities:
Net deferred tax liabilities:- 19 -(Millions of yen)
2,839
25
833
1,396
333
5,428
(4,508)
919
2,089
1
2,091
1,171

(NOTES TO RELATED-PARTY TRANSACTIONS)
Subsidiaries

Type

Name ofCompany

Company’s
Interest

Account

Balance asof the Fiscal
Year End(Millions ofyen)

Short-termborrowings
fromsubsidiaries
and affiliatedcompanies

11,765

8

–

–

1,800

–

–

3,152

–

–

402

–

–

Repayment of funds(Note 1)

830

Short-termborrowings
fromsubsidiaries
and affiliatedcompanies

2,279

Payment of interest(Note 1)

1––

Lease of movables
and real estate(Note 2)

823

–

–

Loan (Note 4)

157

Short-term
loans
receivable
fromsubsidiaries
and affiliatedcompanies

1,882

Receipt of interest(Note 4)

5––

Repayment of funds(Note 4)459

Short-term
loans
receivable
fromsubsidiaries
and affiliatedcompanies

3,013

Receipt of interest(Note 4)

10––

Loan (Note 4)0

Short-term
loans
receivable
fromsubsidiaries
and affiliatedcompanies

2,824

Receipt of interest(Note 4)

10––

Relationship withRelated Party

Nature ofTransaction

Borrowing of funds(Note 1)

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

WacoalCorp.

Peach John
Co., Ltd.

WacoalDistribution
Corp.

WacoalServiceCo., Ltd.

Unenana
Cool Corp.

Ai Co., Ltd.

100%
direct100%
direct100%
direct100%
direct100%
indirect100%
indirect

Holding of shares;
dual appointments;
managerial guidance;lease of movables andreal estate

Holdings of shares;
and dual appointments

Holdings of shares;
dual appointments; andlease of movables andreal estate

Payment of interest(Note 1)
Receipt ofdividends
Lease of movables
and real estate(Note 2)
Fee formanagement
guidance (Note 3)

Holdings of shares;
dual appointments; and
loan

Loan

Dual appointments
and loanTransaction
Amount(Millions of
yen)

3,374

Details and Policy on Determination of Transaction Terms(Note 1)
The terms and conditions of borrowings and interest rates are determined upon consideration ofmarket interest rates.
(Note 2)The price and other terms of transactions are determined through negotiation in view of the market
conditions.
(Note 3)The managerial guidance fees are determined each fiscal year based on negotiation.
(Note 4)
The terms and conditions of loans and interest rates are determined upon consideration of market
interest rates.
- 20 -

(Note 5)(Note 6)

The transaction amount does not include consumption taxes, while the balance as of the yearend
includes consumption taxes.
A total amount of ¥4,559 million in allowance for doubtful accounts is provided for doubtful accounts
for the subsidiaries. Also, we recorded a total of ¥88 million for provision of allowance with respect
to doubtful accounts for subsidiaries and affiliated companies for the current fiscal year.

(NOTES TO REVENUE RECOGNITION)
Basic Information to Understand Revenues from Contracts with Customers
As described in “4. Basis for Recording Revenues and Expenses” of “(NOTES TO MATTERS RELATED TOSIGNIFICANT ACCOUNTING POLICIES)”.
(NOTES TO PER SHARE INFORMATION)
Net assets per share:
Net income per share:
Diluted net income per share:¥2,242.19¥74.46¥74.15(NOTES TO SIGNIFICANT SUBSEQUENT EVENTS)
Capital Reserve Reduction
The Board of Directors adopted a resolution at a meeting held on May 12, 2023 to propose reduction of the amountof capital reserve and transfer to additional paid-in capital at the 75th Ordinary General Meeting of Shareholders tobe held on June 28, 2023.
1.

Purpose of Capital Reserve Reduction
In order to prepare for flexible capital policies in the future and to ensure flexibility and elasticity in financial
strategies, the Company will reduce the amount of capital reserve and transfer the same amount to additional
paid-in capital pursuant to the provisions of Paragraph 1, Article 448 of the Companies Act.

2.

Details of Capital Reserve Reduction
The capital reserve of 29,294,142,292 yen will be reduced, and the same amount will be transferred toadditional paid-in capital.

3.

Schedule of Capital Reserve Reduction(i) Date of Board of Directors’ resolution:

May 12, 2023(ii) Date of Ordinary General Meeting of Shareholders’ resolution:

June 28, 2023 (planned)(iii) Date of public notice for making objections by creditors:

July 10, 2023 (planned)(iv) Final date for making objections by creditors:

August 10, 2023 (planned)(v) Effective dateAugust 31, 2023 (planned)

Purchase of Treasury Stock
The Board of Directors adopted a resolution at a meeting held on May 12, 2023 regarding matters related topurchase of treasury stock pursuant to the provisions of Paragraph 1, Article 459 of the Companies Act.
1.

Reason for Purchase of Treasury StockTo return profits to the shareholders, improve capital efficiency and implement our capital policy withincreased flexibility tailored to the business environment.

2.

Details of Purchase(i) Type of shares to be purchased:

Common stock of the Company- 21 -

(ii) Total number of shares to be purchased:

3,800,000 shares (at maximum)(iii) Aggregate purchase amount:¥10,000 million (at maximum)(iv) Purchase period:

From May 22, 2023 through March 22, 2024

Cancellation of Treasury Stock
The Board of Directors adopted a resolution at a meeting held on May 12, 2023 regarding matters related tocancellation of treasury stock pursuant to the provisions of Article 178 of the Companies Act.
(i) Type of shares to be cancelled:

Common stock of the Company(ii) Number of shares to be cancelled:

3,500,000 shares(iii) Date of cancellation:

May 26, 2023

- 22 -