Summary of Consolidated Financial Results for the Fiscal Year Ended February 28, 2021
[Japanese GAAP] (Consolidated)
April 12, 2021
Company name:

TSI HOLDINGS CO., LTD.

Stock listing: Tokyo Stock Exchange

Code number:

3608

URL: https://www.tsi-holdings.com/en/

Representative:
Contact:

Representative Director and President, Tsuyoshi Shimoji
Director, Masaaki Oishi
TEL: +81-3-6748-0001

Scheduled date of Annual General Meeting of shareholders: May 28, 2021
Scheduled date of filing of annual securities report:
May 28, 2021
Scheduled date to begin dividend payment:―
Preparation of supplementary financial document:
Briefing session to explain the financial statements:

Yes
Yes (For institutional investors and analysts)(Rounded down to the nearest million yen)

1. Consolidated Business Results for the Fiscal Year Ended February 28, 2021 (March 1, 2020 to February 28, 2021)(1) Consolidated results of operations(% change from the previous fiscal year)

Net sales

FY ended February 2021
FY ended February 2020

Operating income

Million yen
134,078
170,068%(21.2)
3.1

Million yen(11,843)70%―(96.9)(Notes) Comprehensive income: Fiscal year ended February 28, 2021
Fiscal year ended February 29, 2020
Net income
per share

Million yen(10,359)
1,851%―(52.6)¥4,636 million¥(1,679) million

Diluted net
income per share

Yen
42.64
23.42

FY ended February 2021
FY ended February 2020

Ordinary income

Return on
equityYen――

Million yen
3,861
2,181

%
77.0
―

―%
―%

Ratio of ordinary
income to total
assetsRatio of operating
income to net sales

%
(6.6)
1.1

%
(8.8)
0.0

%
4.0
2.2

(Reference) Equity in earnings of affiliates: Fiscal year ended February 28, 2021
Fiscal year ended February 29, 2020

Profit attributable toowners of parent¥61 million¥(190) million(2) Consolidated financial position
Total assets
Million yen
154,951
160,328

As of February 28, 2021
As of February 29, 2020

Shareholders’ equity
ratio
%
62.6
59.2

Net assets
Million yen
97,43095,451(Reference) Shareholders’ equity: As of February 28, 2021
As of February 29, 2020

Net assets per shareYen
1,074 81
1,021 90

¥96,977 million¥94,952 million(3) Consolidated results of cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Million yen(5,300)4,702

FY ended February 2021
FY ended February 2020

Cash flows fromfinancing activities

Million yen
36,010
11,150Million yen(11,170)(16,760)

Cash and cash
equivalents at theend of period
Million yen
49,761
30,232

2. Dividends

Yen

Yen

Yen

Yen

Yen

Million yen%

Rate of total
dividend to
net assets(Consolidated)%

FY ended February 2021

―

0.00

―

17.50

17.50

1,635

74.7

1.7

FY ended February 2020

―

0.00

―

0.00

0.00

―

―

―

FY ended February 2022
(forecast)

―

0.00

―

5.00

5.00

Annual dividend
End of
1Q

End of2Q

End of3Q

Year-end

Total

Dividend
Total dividend payout ratio(Consolidated)

27.2

3. Forecast of Consolidated Business Results for the Fiscal Year Ending February 28, 2022 (March 1, 2021 to February 28, 2022)(% change from the corresponding period of the previous fiscal year)
Net sales

Second quarter(Cumulative)
Full fiscal year

Operating income

Ordinary income

Profit attributable toowners of parent

Million yen%

Million yen%

Million yen%

Million yen

71,300152,400

26.7
13.7

(500)
1,100

―
―

(300)
1,600

―
―

170
1,660

Net income
per share

%

Yen

―
(57.0)

1.88
18.40＊Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in a change in the scope of
consolidation): None
(2) Changes in accounting policies, accounting estimates, and restatements
a. Changes in accounting policies due to revisions of accounting standards: Noneb. Changes in accounting policies other than above (a): Nonec. Changes of accounting estimates: None
d. Restatements: None
(3) Number of shares issued (common stock)a. Number of shares issued
at the end of period(treasury stock included) FY ended February 2021
b. Number of treasury
stock at the end of period FY ended February 2021
c. Average number of
FY ended February 2021
shares over the period

95,783,293 shares

FY ended February 2020

105,783,293 shares

5,556,309 shares

FY ended February 2020

12,865,187 shares

90,560,235 shares

FY ended February 2020

93,149,318 shares*This business results report is not subject to auditing by certified public accountants or audit firms.
*Explanation regarding the appropriate use of business forecasts and other special instructions
The forward-looking statements, including business forecasts, contained in this document are based on information currently
available to the Company and on certain assumptions deemed reasonable by the Company, and are not intended as a promise by
the Company that they will be achieved. Actual results may differ materially due to a variety of factors.

Contents of Attached Materials
1. Overview of Business Results ···································································································· 2(1) Overview of Business Results for the Fiscal Year Ended February 28, 2021 ································· 2(2) Overview of Financial Position ···························································································· 3(3) Overview of Cash Flows ······································································································· 4(4) Outlook ····························································································································· 5
2. Basic Stance on the Selection of Accounting Standards ·································································· 5
3. Consolidated Financial Statements and Major Notes ···································································· 6(1) Consolidated Balance Sheets ································································································ 6(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ········· 8(3) Consolidated Statements of Changes in Net Assets ·································································10(4) Consolidated Statements of Cash Flows ················································································12(5) Notes to Consolidated Financial Statements ··········································································14
Going Concern Assumption ··································································································14
Major Notes to Consolidated Financial Statements ··································································14Additional Information ········································································································19
Segments of the Company and Related Information ·································································20
Per Share Information ·········································································································23
Important Subsequent Events ······························································································ 24

1

1.

Overview of Business Results(1) Overview of Business Results for the Fiscal Year Ended February 28, 2021
In fiscal 2020, the twelve-month period from March 1, 2020 to February 28, 2021, sales in the apparel industry declined
substantially owing to the novel coronavirus (COVID-19) pandemic which restricted economic activity. While the initialstate of emergency was lifted on May 25, 2020, the decision by the government to declare a second state of emergency
covering the Tokyo Metropolitan Area and three surrounding prefectures on January 7, 2021 was extended to include
seven additional prefectures including Osaka and Aichi on January 13, 2021. While commercial facilities and stores
took measures to prevent the spread of infection and continued to operate, these efforts failed to trigger a recovery to
attract customers and consumer sentiment. Coupled with the persistent slump in inbound demand, overall operating
conditions remained difficult.
Under these circumstances, the TSI Holdings Group worked diligently to accelerate the pace of its decision-making
process, by adopting a company system in its apparel business companies and newly establishing the Platform
Department to integrate various headquarter functions. These efforts form a part of the Group structure review, which
is a key measure in TSI Holdings’ medium-term management strategy. In addition to streamlining its organizational
structure by eliminating overlapping functions, the Group also pushed forward the absorption merger of subsidiary
SANEI bd CO., LTD. with eight other apparel subsidiary companies as a first step toward the integration of Group
companies into a single entity. Through these means, TSI Holdings is strengthening its profitability by improving
operating efficiency and accelerating decision making across the Group as a whole. Withdrawing from unprofitable
stores while conducting a review of Group-wide selling, general and administrative expenses, and working to reducea series of costs including the drastic cutback of personnel expenses, the Group has continued to promote measures
aimed at optimizing its profit structure.
Moreover, in a bid to enter businesses that utilize digital marketing methods in the direct-to-consumer (D2C) market,
TSI Holdings acquired HYBES Co., Ltd., which oversees and handles the ETRÉ TOKYO apparel brand on August 1,
2020.
Turning to the Group’s overseas activities, TSI Holdings acquired an equity stake in Efuego Corp., which operates anonline business at www.tactics.com specializing in action sports specifically on skateboards and snowboards on March
31, 2020, with the aim of expanding its U.S. business.
Over-the-counter sales at each Group company declined and we have to reevaluate inventories. This largely reflected
the decision by consumers to refrain from going out as a result of the ongoing spread of pandemic, which in turn led toa decrease in the number of customers visiting stores.
Accounting for each of these factors, net sales came to ¥134,078 million in fiscal 2020, down 21.2% compared with theprevious fiscal year. From a profit perspective, TSI Holdings incurred an operating loss of ¥11,843 million and an
ordinary loss of ¥10,359 million. This was a negative turnaround from the operating income of ¥70 million andordinary income of ¥1,851 million posted in fiscal 2019.
The Company’s net income attributable to owners of parent totaled ¥3,861 million, up 77.0% compared with theprevious fiscal year.

2Net sales by reportable segment were as follows.

Apparel-Related Businesses
Based on the medium-term management strategy, TSI Group subsidiaries continued to improve profits by reforming
existing brands and streamlining operations. Amid the need to manage high market value brands that are unique andare price competitive, the Group worked diligently to strengthen its profitability by rolling out products that take fulladvantage of special features in its existing businesses including Jack Bunny!!, a golf apparel brand, UNDEFEATED,
which revolves mainly around sneakers, and Sunspel, a brand licensed from a longstanding U.K. clothing
manufacturer. Despite these endeavors, over-the-counter sales declined. While department stores, shopping centers,
and other retail outlets implemented measures aimed at preventing further spread of the pandemic, this downturn insales reflected the harsh operating environment that impacted operations following the government’s decision to again
declare a state of emergency covering the Tokyo Metropolitan Area and 10 other prefectures in January 2021.
In the e-commerce business, we initiated various measures including the consolidation of in-store inventory to ecommerce stock and continued to upgrade online customer service. Despite efforts to ramp up measures aimed atstrengthening in-store and online coordination and increasing e-commerce activities, sales in apparel-related
businesses declined 21.2% year on year, to ¥130,120 million owing to the substantial impact of COVID-19.

Other Businesses
Companies within TSI Holdings’ other businesses include S-Groove Co., Ltd., which in addition to fulfilling a sales
function for Group operating companies engages in paid employment placement and worker dispatching activities,
Toska-Bano’k Co., Ltd., active in the manufacture and sale of synthetic resin related products, Plax Co., Ltd., which
engages in store design and supervision as well as restaurant operations, Laline JAPAN Co., Ltd., which procures andsells a variety of products including cosmetics, perfumes, and soaps, and Urth Caffe JAPAN Co., Ltd., which operates
in Japan a popular organic café in the U.S., California. Net sales in this segment declined 15.1% compared with theprevious fiscal year, to ¥8,567 million owing mainly to the continued impact of COVID-19.
(2) Overview of Financial Position(Million yen)
At the end of FY2019(As of February 29, 2020)

At the end of FY2020(As of February 28, 2021)

Increase/decrease

Total assets

160,328

154,951(5,377)

Liabilities

64,87757,521(7,355)

Net assets

95,451

97,4301,978

Shareholders’ equity ratio

59.2%

62.6%

3.4%

¥1,021.90¥1,074.81¥52.91

Net assets per share

Total assets decreased by ¥5,377 million from the end of the previous fiscal year, despite an increase in cash anddeposits (up ¥18,928 million) and an increase in investment securities (up ¥2,751 million). This was mainly due to adecrease in notes and accounts receivable–trade (down ¥1,265 million); a decrease in inventories (down ¥3,279
million); a decrease in “other” current assets (down ¥1,666 million); a decrease in property, plant and equipment (down¥4,958 million); a decrease in intangible assets (down ¥1,757 million); a decrease in investment property (down¥11,662 million); and a decrease in “other” in investments and other assets (down ¥1,354 million).
Liabilities decreased by ¥7,355 million from the end of the previous fiscal year, despite an increase in income taxes
payable (up ¥1,797 million) and an increase in other current liabilities (up ¥1,306 million). This was mainly due to adecrease in notes and accounts payable–trade (down ¥2,658 million); and a decrease in long-term borrowings(including current portion of long-term borrowings) (down ¥8,459 million).

3

Net assets increased by ¥1,978 million from the end of the previous fiscal year, despite a decrease in capital surplus(down ¥7,208 million). This was mainly due to an increase in retained earnings (up ¥2,226 million); a decrease intreasury stock which is a deduction item for net assets (down ¥6,108 million); and an increase in valuation difference
on available-for-sale securities (up ¥1,182 million).
As a result, net asset per share increased by ¥52.91.
(3) Overview of Cash Flows(Million yen)
At the end of FY2019
At the end of FY2020
Increase/decrease(As of February 29, 2020) (As of February 28, 2021)
Cash flows from operating activities

4,702(5,300)(10,002)

Cash flows from investing activities

11,15036,01024,860Cash flows from financing activities(16,760)(11,170)

5,589

Cash and cash equivalents at end of period

30,232

49,761

19,528Cash flows from operating activities:
Net cash used in operating activities for the fiscal year under review was ¥5,300 million (compared to net cash provided
by operating activities of ¥4,702 million in the previous fiscal year). This was mainly due to the factors of income before
income taxes of ¥5,855 million; depreciation of ¥4,080 million, which is non-cash expenses; amortization of goodwill of¥762 million, impairment loss of ¥3,068 million; loss on liquidation of subsidiaries and affiliates of ¥1,192 million; adecrease in notes and accounts receivable–trade of ¥1,287 million; a decrease in inventories of ¥3,723 million; but
gains on sales of fixed assets of ¥24,015 million, which is an adjustment item for investing activities; and a decreasein notes and accounts payable–trade of ¥2,749 million.

Cash flows from investing activities:
Net cash provided by investing activities for the fiscal year under review was ¥36,010 million (up 223.0% compared tothe previous year), mainly due to sales of property, plant and equipment of ¥4,300 million, sales of investment
securities of ¥7,672 million, sales of investment property of ¥34,031 million, and collection of leasehold and guarantee
deposits of ¥1,440 million, despite the purchase of property, plant and equipment (interior assets of stores, etc.) of¥2,927 million; and purchase of investment securities of ¥8,397 million.

Cash flows from financing activities:
Net cash used in financing activities for the fiscal year under review was ¥11,170 million (compared to net cash used
in by financing activities of ¥16,760 million in the previous fiscal year), mainly due to repayment of long-term loans
payable of ¥8,934 million, purchase of treasury stock of ¥1,180 million, and dividend payments of ¥1,635 million.
As a result, cash and cash equivalents at the end of the consolidated fiscal year under review increased by ¥19,528
million from the end of the previous consolidated fiscal year to ¥49,761 million.

4

(For Reference) Trends in Cash-Flow Indicators
FY2018FY2019FY2020(As of February 28, 2019) (As of February 29, 2020) (As of February 28, 2021)
Shareholders' equity ratio (%)

55.0

59.2

62.6

Shareholders’ equity ratio based on
current market price (%)

35.8

24.2

15.3

Years of debt redemption (Years)

6.9

7.1

―

Interest coverage ratio (Times)

36.2

21.7

―

Notes:
1. Shareholders’ equity ratio based on current market price (%) = total market value of common stock ÷ total assets
2. Years of debt redemption = interest-bearing debt ÷ cash flows from operating activities
3. Interest coverage ratio = cash flows from operating activities ÷ interest payments
4. Interest-bearing debt includes all balance-sheet debt for which interest payments are being made.
5. Interest payment are based on the amount of interest paid on the consolidated statement of cash flows.
6. All indicators are calculated based on consolidated financial figures.
7. As the cash frows from operating activities for the fiscal year ended February 28, 2021 was negative, the years ofdebt redemption and interest coverage ratio are not calculated.
(4) Outlook
Entering the fiscal year ending February 28, 2022, personal consumption continues to reel under the effects of COVID19, causing people to refrain from going outside their houses, a downturn in consumer sentiment, and the virtual
disappearance of inbound demand. While vaccinations are expected to help bring the infection under control, thetiming remains unpredictable. On a positive note, customers are shifting from brick-and-mortar stores to e-commerce
at an increasingly fast pace due to the aforementioned voluntary restraint. From the Company’s perspective, steps arebeing taken to concentrate management resources on e-commerce opportunities in a bid to capture this changing
customer demand. Drawing on these endeavors, net sales are expected to recover to a certain level in the fiscal year
ending February 28, 2022. Moreover, the Company will continue to reduce selling, general and administrative expenses
and to improve the break-even point ratio in the fiscal year under review. Through these means, net income
attributable to owners of parent is projected to remain in the black at ¥1,660 million in fiscal 2021.
2.

Basic Stance on the Selection of Accounting Standards

The TSI Holdings Group has adopted the Japanese Generally Accepted Accounting Principles (Japanese GAAP) to
facilitate comparisons of consolidated financial statements of different fiscal terms and companies.
Meanwhile, the Group’s policy is to properly address the application of International Financial Reporting Standards(IFRS) after taking into consideration various circumstances in Japan and overseas.

5

3. Consolidated Financial Statements and Major Notes(1) Consolidated Balance Sheets(Million yen)
FY2019(As of February 29, 2020)

FY2020(As of February 28, 2021)

AssetsCurrent assets
Cash and deposits

30,942

49,871

Notes and accounts receivable–trade
Securities

12,153519

10,888Merchandise and finished goods
Work in process

20,578562

17,034544

Raw materials and supplies
Other

538
5,261

821
3,594

(76)

(39)

70,48082,714

Property, plant and equipment
Buildings and structures

21,10917,730

Accumulated depreciation

Allowance for doubtful accounts
Total current assets―

Non-current assets(12,976)(12,122)

Buildings and structures, net

8,133

5,607

Machinery, equipment and vehicles

1,081

1,146

Accumulated depreciation

(886)

(950)

Machinery, equipment and vehicles, net

194
2,826
604

195
903
558

(574)

(531)

29

27

Land
Leased assets
Accumulated depreciation
Leased assets, net
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill

8,420

7,565

(6,496)(6,149)

1,924

1,415

13,108

8,149

5,956

5,266

Trademark right
Other

4,276
4,194

3,646
3,757

Total intangible assets

14,42812,670Investments and other assets
Investment securities

26,121

28,872Long-term loans receivable
Leasehold and guarantee deposits

59
11,82576
11,222

Deferred tax assets
Investment property, net

1,067
16,642

1,021
4,980

Other
Allowance for doubtful accounts

6,704
(109)

5,350
(106)

Total investments and other assets
Total non-current assets
Total assets

6

62,311

51,416

89,847

72,237160,328

154,951

(Million yen)
FY2019(As of February 29, 2020)

FY2020(As of February 28, 2021)

14,266

11,607

Short-term borrowings
Current portion of long-term borrowings

92
8,894

152
8,915

Lease obligations
Accounts payable–other

11
3,939

13
4,645

Income taxes payable
Provision for bonuses

399
1,308

2,196
1,336

Provision for point card certificates
Provision for shareholder benefit program

466
71

426
126

Provision for sales returns
Asset retirement obligations

161
78

289
12

Other

4,940

6,246

Total current liabilities

34,62835,96924,562
15

16,082
36

844

1,029

Retirement benefit liability
Asset retirement obligations

97
1,052
2,406

42
1,040
2,344

Other

1,269

975

Total non-current liabilities

30,24821,551

Total liabilities

64,87757,521

Share capital
Capital surplus

15,00036,46315,00029,255Retained earnings
Treasury stock

49,987(9,856)52,213(3,747)

Total shareholders’ equity

91,59492,720

3,630
(192)
(78)

4,812
(469)
(86)

Non-controlling interests

3,358
498

4,256
452

Total net assets

95,451

97,430160,328

154,951

Liabilities
Current liabilities
Notes and accounts payable–tradeNon-current liabilities
Long-term borrowings
Lease obligations
Deferred tax liabilities
Provision for retirement benefits for directors

Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income

Total liabilities and net assets

7

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated statements of income(Million yen)
FY2019(March 1, 2019 toFebruary 29, 2020)
170,068

FY2020(March 1, 2020 toFebruary 28, 2021)
134,078

Cost of sales

80,68570,232Gross profit

89,382

63,846

Selling, general and administrative expenses

89,31275,68970(11,843)

119
817

34
1,065

1,377
50

1,297
―

Net sales

Operating income (loss)
Non-operating income
Interest income
Dividend income
Real estate income
Gain on valuation of investment securities
Other

634

603

2,998

3,000

Interest expenses
Foreign exchange losses

217
142

216
26

Rental expenses on real estate
Provision of allowance for doubtful accounts

587
2

876
―

Loss on valuation of investment securities
Other

―
268

32
364

Total non-operating income
Non-operating expenses

Total non-operating expenses

1,217

1,516

1,851

(10,359)

Gain on sales of non-current assets
Gain on sale of investment securities

2,243
2,949

24,024364

Gain on sales of shares of subsidiaries and associates
Subsidies for employment adjustment

1,096
―

―
438

―

31

6,289

24,859Ordinary income (loss)
Extraordinary income

Other
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets

329

80

Impairment loss
Loss on sales of investment securities

3,596
―

3,068
559

―
―

1,192
2,414

―
355

1,160
169

Total extraordinary losses

4,281

8,644

Income before income taxes

3,859

5,855

Income taxes―current

720

2,337

Income taxes―deferred

1,073

(233)

Total income taxes

1,794

2,103

Net income

2,064

3,751

Net loss attributable to non-controlling interest

(117)
2,181

(109)
3,861

Loss on liquidation of subsidiaries and associates
Loss due to temporary closing
Voluntary retirement-related expenses
Other

Net income attributable to owners of parent

8

Consolidated statements of comprehensive income(Million yen)

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of affiliates
accounted for using equity method
Total other comprehensive income
Comprehensive income

FY2019(March 1, 2019 toFebruary 29, 2020)
2,064

FY2020(March 1, 2020 toFebruary 28, 2021)
3,751(3,414)
0
(400)

1,182
―
(269)

13

(8)

57
(3,744)(20)
884(1,679)4,636(1,550)
(129)

4,759
(123)

Total comprehensive income attributable to:
Owners of parent
Non-controlling interests9(3) Consolidated Statements of Changes in Net Assets
FY2019 (March 1, 2019 to February 29, 2020)(Million yen)
Shareholders’ equity

Balance at the beginningof period

Share capital

Capital surplus

15,00037,513Retainedearnings

Treasury stock

Total
shareholders'equity(8,737)

93,25149,475

Changes during period
Dividends of surplus
Net income
attributable to ownersof parent
Purchase of treasury
shares
Disposal of treasury
sharesCancellation oftreasury shares
Change in ownershipinterest of parent due
to transactions with
non-controllinginterests
Net changes in items
other thanshareholders' equity
Total changes during
periodBalance at the end of
period(1,670)(1,670)

2,181

2,181
(1,334)(1,334)

215

215

―

(1,049)(1,049)―(1,049)511(1,119)(1,657)

15,00036,46349,987(9,856)

91,594

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at the beginningof period

7,042

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

(0)

139

Total
Remeasureaccumulated
ments ofother compredefined
hensivebenefit plansincome(92)

7,090

Noncontrollinginterests

Total net
assets3,595

103,937

Changes during period
Dividends of surplus
Net income (loss)
attributable to ownersof parent
Purchase of treasury
shares
Disposal of treasury
sharesCancellation oftreasury shares
Change in ownershipinterest of parent due
to transactions with
non-controllinginterests
Net changes in items
other thanshareholders' equity
Total changes during
periodBalance at the end of
period(1,670)2,181(1,334)215―(1,049)(3,412)

0

(332)

13

(3,732)(3,096)(6,829)(3,412)

0

(332)

13

(3,732)(3,096)(8,486)

3,630

―

(192)

(78)

3,358

498

95,45110

FY2020 (March 1, 2020 to February 28, 2021)(Million yen)
Shareholders’ equity

Balance at the beginningof period

Share capital

Capital surplus

15,00036,463Retainedearnings

Treasury stock

Total
shareholders'equity(9,856)

91,59449,987

Changes during period
Dividends of surplus
Net income
attributable to ownersof parent
Purchase of treasury
shares
Disposal of treasury
sharesCancellation oftreasury shares
Change in ownershipinterest of parent due
to transactions with
non-controllinginterests
Net changes in items
other thanshareholders' equity
Total changes during
periodBalance at the end of
period(1,635)(1,635)

3,861

3,861

(7,208)(1,177)(1,177)

77

77

7,208

―

―

―

(7,208)

2,226

6,108

1,126

15,00029,25552,213(3,747)92,720

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at the beginningof period

3,630

Total
Foreign
Remeasureaccumulated
currency
ments ofother compretranslation
definedhensiveadjustment benefit plansincomeDeferred
gains orlosses onhedges
-

(192)

(78)

3,358

Noncontrollinginterests

498

Total net
assets95,451

Changes during period
Dividends of surplus
Net income
attributable to ownersof parent
Purchase of treasury
shares
Disposal of treasury
sharesCancellation oftreasury shares
Change in ownershipinterest of parent due
to transactions with
non-controllinginterests
Net changes in items
other thanshareholders' equity
Total changes during
periodBalance at the end of
period(1,635)
3,861(1,177)
77

―

―

1,182

―

(276)

(7)

897

(45)

852

1,182

―

(276)

(7)

897

(45)

1,978

4,812

―

(469)

(86)

4,256

452

97,43011

(4) Consolidated Statement of Cash Flows(Million yen)
FY2019(March 1, 2019 toFebruary 29, 2020)

FY2020(March 1, 2020 toFebruary 28, 2021)

Cash flows from operating activities
Income before income taxes
Depreciation

3,859
4,759

5,855
4,080

Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts

1,024

762

16
81

(38)
(3)

0
(126)
(58)

(55)
28
120

41

(46)

32
(936)

55
(1,099)Interest expenses
Loss (gain) on sales of non-current assets

217(2,243)

216(24,015)

Loss on retirement of non-current assets
Impairment loss

329
3,596

80
3,068

–
–

2,414
1,160

Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on sales of shares of subsidiaries andassociates
Loss on liquidation of subsidiaries and associates(2,949)
304

195
32

(1,096)

–

–

1,192

Subsidies for employment adjustment
Decrease (increase) in accounts receivables–trade

–
(755)

(438)
1,287

Decrease (increase) in inventories
Increase (decrease) in accounts payables–trade409(1,833)

3,723(2,749)

186
163

859
(145)

(14)
276

(31)
(710)

Subtotal

5,287(4,198)Interest and dividends received
Interest paid

931
(217)

1,099
(216)
(549)
749

Payment for loss due to temporary closing(3,058)1,758－(2,185)

Net cash provided by (used in) operating activities

4,702(5,300)

Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for retirement
benefits for directors
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for sales returns
Increase (decrease) in provision for point cardcertificates
Increase (decrease) in provision for shareholder
benefit program
Interest and dividend income

Loss due to temporary closing
Voluntary retirement-related expenses

Increase (decrease) in accrued consumption taxes
Increase (decrease) in accounts payable–other
Increase (decrease) in long-term accounts payable–
other
Other

Income taxes paid
Income taxes refund12

(Million yen)
FY2019(March 1, 2019 toFebruary 29, 2020)

FY2020(March 1, 2020 toFebruary 28, 2021)

Cash flows from investing activities
Net decrease (increase) in time deposits
Purchase of property, plant and equipment(257)(4,090)600(2,927)

Proceeds from sales of property, plant and equipment
Purchase of investment securities

11(6,251)

4,300(8,397)

Proceeds from sales of investment securities
Purchase of intangible assets

16,934
(648)

7,672
(710)

(857)

(933)

710
(13)
2,900

1,440
(13)
34,031

(56)
353

(27)
407

(162)

(656)

Payments of leasehold and guarantee deposits
Proceeds from collection of leasehold and guarantee
deposits
Purchase of investment property
Proceeds from sales of investment property
Short-term loan advances
Collection of short-term loans receivable
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Payments for sales of shares of subsidiaries resulting
in change in scope of consolidation
Proceeds from sales of shares of subsidiaries andassociates
Payments for asset retirement obligations
Other

(18)

(6)

2,000
(409)
1,004

–
(578)
1,807

Net cash provided by (used in) investing activities

11,15036,010Cash flows from financing activities
Net increase (decrease) in short-term borrowings(20,960)

55

Proceeds from long-term borrowings
Repayments of long-term borrowings

19,000(7,955)478(8,934)

Repayments of lease obligations
Purchase of treasury shares(66)(1,340)(31)(1,180)215(1,670)77(1,635)(3,983)(16,760)–(11,170)

Proceeds from sales of treasury shares
Dividends paid
Purchase of shares of subsidiaries that do not resultin change in scope of consolidation
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents

(50)

(11)

Cash and cash equivalents at beginning of period(958)
31,19019,52830,232

Cash and cash equivalents at end of period

30,232

49,76113

(5) Notes to the Consolidated Financial Statements(Going Concern Assumption)
Not applicable(Major Notes to Consolidated Financial Statements)
1. Scope of consolidation(1) Number of consolidated group companies: 38
Major subsidiaries:
TOKYO STYLE CO., LTD.
SANEI-INTERNATIONAL CO., LTD.
SANEI bd CO., LTD.
TSI GROOVE AND SPORTS CO., LTD.
nano universe CO., LTD.
HUF Holdings, LLC
Ueno Shokai Co., Ltd.
Consolidated subsidiaries other than the above: 31(Change in the scope of consolidation)
Efuego Corp. was included in the Company’s scope of consolidation during the fiscal year under review after TSI
Holdings acquired an equity stake.
HYBES Co., Ltd. was included in the Company’s scope of consolidation after TSI Holdings acquired all of its
shares.
D.A.B. PASTRY CO., LTD. was excluded from the Company’s scope of consolidation after TSI Holdings
transferred all of its shares.
(2) Major non-consolidated subsidiaries
Major non-consolidated subsidiaries:
Tokyo Fashion (Qidong) Co., Ltd.
(Reason for exclusion from the scope of consolidation)
Non-consolidated subsidiaries are excluded from the scope of consolidation because they are small companies
and their combined total assets, net sales, net income or loss (amount corresponding to the Company's equity
interest), retained earnings (amount corresponding to the Company's equity interest), etc., do not have a material
impact on the consolidated financial statements.
2. Equity method(1) Number of subsidiaries and affiliates accounted for by the equity method: 2
Main company name:
RICHARD HENDRIX LLC(2) Non-consolidated subsidiaries not accounted for by the equity method
Company name:Tokyo Fashion (Qidong) Co., Ltd.

14

(Reason for exclusion from the scope of equity method)
Non-equity method companies excluded from the scope of application of the equity method because their impact
on the Company's net income/loss (amount corresponding to the Company's equity interest) and retained
earnings (amount corresponding to the Company's equity interest) is not material and their overall importanceis not significant.
3. Accounting period of consolidated subsidiaries
Among the Company’s consolidated subsidiaries, Tokyo Style Hong Kong Co., Ltd., Shanghai Dongnoue Tokiso
Trading Co., Ltd., TSI ASIA LIMITED, Laline Hawaii Corporation, TSI US Holdings Co., Ltd., AVIREX SHANGHAITRADING CO., LTD., and Efuego Corp. close their accounts on December 31.
The financial statements of each company as of December 31 are used in the preparation of consolidated financial
statements. Significant transactions that occurred between December 31 and the consolidated closing date areadjusted as necessary for consolidation purposes.
Among consolidated subsidiaries, HUF Holdings, LLC and HUF Worldwide, LLC, closed their accounts on December
31. With the annual business term set at 52 weeks, the closing date has been revised to the Saturday closest to
December 31.
The financial statements of each company as of January 2, 2021 are used in the preparation of consolidated financial
statements. Significant transactions that occurred between January 2, 2021 and the consolidated closing date areadjusted as necessary for consolidation purposes.
Among consolidated subsidiaries, SANEI INTERNATIONAL USA LLC closes its accounts on June 30.
The quarterly financial statement of the company as of December 31 are used in the preparation of consolidated
financial statements. Significant transactions that occurred between December 31 and the consolidated closing dateare adjusted as necessary for consolidation purposes.
4. Accounting policies(1) Valuation criteria and methods for significant assets
i. Securities
Other securities⚫ Marketable securities:
Marketable securities are carried at fair value based on quoted market prices as of the end of the fiscal year.
(Any changes in unrealized gain or loss are directly included in net assets and the costs of securities sold are
generally calculated by the moving average method.)⚫ Non-marketable securities:
Non-marketable securities are carried at cost determined by the moving average method.
ii. Derivative financial instruments
Derivative financial instruments are stated at fair value.
iii. Inventories
a. Merchandise and finished goods, work in process and raw materials
They are primarily stated at cost method determined by the weighted average method (values on the balance
sheet are subject to the book value reduction method based on decreased profitability.)b. Supplies
They are primarily stated at the last purchase cost method (values on the balance sheet are subject to the bookvalue reduction method based on decreased profitability.)15

(2) Depreciation method for significant depreciable assets
i. Property, plant and equipment (excluding leased assets) and investment property
The declining-balance method is mainly used. However, the straight-line method is used for buildings (excluding
attached facilities) acquired on or after April 1, 1998, and for building fixtures and structures acquired on or after
April 1, 2016.
The main useful lives are as follows.
Buildings and structures

3 to 50 years

Others2 to 20 years

ii. Intangible assets (excluding leased assets)
The straight-line method is adopted.
The main useful lives are as follows.
Software5 to 10 years

Trademark rights

10 yearsiii. Leased assets
Leased assets related to finance lease transactions other than those where the ownership of the lease assets isdeemed to be transferred to the lessee
Amortized by the straight-line method, assuming the lease period as the useful life and no residual value.
iv. Long-term prepaid expenses
Equal amortization is applied.
(3) Basis for accounting for significant provisions
i. Allowance for doubtful accounts
To prepare for losses due to the credit loss of monetary claims, the domestic consolidated subsidiaries consider
the actual loan loss rate for general claims and the collectability of specific claims such as doubtful debts
individually and record the estimated uncollectible amount. Overseas consolidated subsidiaries have provided
an allowance for doubtful accounts at the estimated uncollectible amount mainly for specific receivables.
ii. Provision for bonuses
To provide for the payment of bonuses to employees, the Company and its certain subsidiaries record theestimated amount of bonus payments corresponding to the consolidated fiscal year under review.
iii. Provision for point card certificates
Based on a system that confers points to customers in line with their purchase history, certain consolidated
subsidiaries posted amounts that can be expected to be used in the future in line with past trends as of the endof the fiscal year under review to provide for expenses arising from the use of points.
iv. Provision for shareholder benefits
Based on its shareholder benefit program, the Company posted an amount that it expects to be used in the future
in line with past trends as of the end of the fiscal year under review to provide for expenses arising from the useof shareholder benefit coupons.
v. Provision for sales returns
Certain consolidated subsidiaries posted amounts for estimated losses attributable to sales returns in line withsuch factors as historical rates of return to provide for losses from sales returns projected as of the end of the
fiscal year under review.

16vi. Provision for retirement benefits for directors
Certain consolidated subsidiaries posted amounts stipulated under internal regulation as of the end of the fiscal
year under review to provide for the payment of retirement benefits to directors.
(4) Accounting method for retirement benefits
i. Method of attributing the estimated amount of retirement benefits to the period
In calculating the retirement benefit obligations, the estimated amount of retirement benefits attributed to theend of the fiscal year under review is based on the benefit calculation formula.
ii. Amortization of actuarial differences and past service costs
Past service costs are amortized on a straight-line method over a fixed number of years (5 years) within the
average remaining service period of employees at the time they are incurred.
Actuarial differences are amortized on a straight-line method over a fixed number of years (5 years) within the
average remaining service period of employees at the time they are incurred. The Company amortizes them inthe following year of occurrence.
iii. Adoption of the simplified method for small-scale companies
Certain consolidated subsidiaries have adopted the simplified method of calculating retirement benefit liabilities
as well as retirement benefit expenses by using the amount required to be paid at the end of the fiscal year forvoluntary retirement benefits as the retirement benefit obligation.
(5) Basis for translating significant foreign currency-denominated assets and liabilities into Japanese currency
Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the
spot rates of exchange on the consolidated closing date and the translation differences are treated as profit or loss.
Assets and liabilities as well as revenues and expenses of foreign consolidated subsidiaries are translated into
Japanese yen at the spot rate of exchange on the consolidated closing date, with translation differences included
in foreign currency translation adjustments and non-controlling interests in net assets.
(6) Significant hedge accounting methods
i. Hedge accounting method
Deferred hedge accounting is adopted.
However, the allocation method is applied to currency swaps that meet the requirements for the allocation
method and the exceptional method is applied to interest rate swaps where the requirements for the exceptional
method are met.
ii. Hedging instruments and hedged items
a. Hedging instruments Foreign exchange forward contracts
Hedged items

Foreign currency denominated trade payables and forecasted foreign currencytransactions

b. Hedging instruments Interest rate swaps
Hedged items

Interest on borrowingsc. Hedging instruments Currency swap
Hedged items

Foreign currency denominated borrowingsiii. Hedging policy
The Company hedges the foreign exchange fluctuation risk and interest rate fluctuations in accordance with the“Derivatives Management Regulations,” which are internal regulations.

17

iv. Assessment of hedge effectiveness
When entering into foreign exchange forward contracts, the Company allocates forward exchange contracts ofthe same amount and date denominated in the same currency in accordance with a risk management policy.
Because the correlation with subsequent fluctuations in foreign exchange markets is completely maintained,
any evaluation of effectiveness at the time of account settlement is not conducted.
In addition, any evaluation of effectiveness at the time of account settlement is not conducted for currency swaps
using the allocation method and interest rate swaps that meet the requirements for special treatment.
(7) Method and period of amortization of goodwill
Goodwill is amortized in equal amounts over a reasonable period of up to 20 years, based on individual estimatesof the period over which the investment effect will be realized.
(8) Scope of cash and cash equivalents in the consolidated statements of cash flows
Cash and cash equivalents consist of cash on hand, deposits that can be withdrawn from time to time, and shortterm investments that are easily converted to cash and that mature within three months of the date of acquisition
and are subject to insignificant risk of change in value.
(9) Other important matters for the preparation of consolidated financial statements
i. Accounting method for consumption tax, etc.
Consumption tax, etc. are accounted for by the tax exclusion method.
ii. Application of the consolidated taxation system
The Company and certain domestic subsidiaries apply consolidated tax payment system.
iii. Application of tax effect accounting for the transition from the consolidated taxation system to the group tax
sharing system
For the transition to the group tax sharing system established under the “Act for Partial Amendment of the
Income Tax Act, etc. (Law No. 8, 2020) and for items that were reviewed in the non-consolidated taxation system
in conjunction with the transition to the group tax sharing system, subject to the treatment of paragraph 3 of
the “Application of tax effect accounting for the transition from the consolidated taxation system to group tax
sharing system” (Practical Issues Task Force No. 39, March 31, 2020), the Company and certain domestic
consolidated subsidiaries do not apply the provisions of paragraph 44 of the “Guidance on Accounting Standards
for Tax Effect Accounting” (ASBJ Guidance No. 28, February 16, 2018) and calculate the amount of deferred tax
assets and deferred tax liabilities in accordance with the provisions of pre-revision tax laws.

18

(Additional Information)(Trust-Type Employee Stock Ownership Plan (ESOP))
TSI Holdings resolved at a Board of Directors’ meeting held on April 13, 2020 to reintroduce a trust-type employee
stock ownership plan (ESOP) as an incentive plan and part of its efforts to provide benefits for its employees.
i. Overview of the Plan
The Company has established a trust (the Shareholding Association Trust). The beneficiaries of the
Shareholding Association Trust are members of the TSI Employee Shareholding Association (the Shareholding
Association) who have met certain requirements.
The Shareholding Association Trust acquired in advance a number of TSI Holdings shares projected to beacquired by the Shareholding Association over a five-year period from April 2020 utilizing funds procured
through debt finance. Thereafter, acquisition of the Company’s shares by the Shareholding Association will be
undertaken by the Shareholding Association Trust. Meanwhile, TSI Holdings will guarantee the debt financeundertaken by the Shareholding Association Trust.
ii. Shares of the Company Remaining in the Trust
The shares of the Company remaining in the Trust are posted as shares of treasury stock in the net assets
section at their carrying amount in the Trust. The carrying amount and number of shares of treasury stock asof the end of the fiscal year under review were ¥325 million for 696,000 shares.
iii. Carrying Value of Debt Finance Posted Using the Gross Price Method
As of February 28, 2021: ¥359 million(Board Benefit Trust (BBT))In accordance with a proposal put forward at the Company’s 5th General Meeting of Shareholders held on May
25, 2016, TSI Holdings introduced a performance-linked stock compensation (Board Benefit Trust (BBT)) plan for
its directors and delegated executive officers as well as Group company directors (eligible officers).
i. Outline of the Transaction
Under the plan, the Company’s shares are acquired through a trust using money contributed by the Company
as funds. Eligible officers receive the Company’s shares equivalent to the points granted in accordance with thelevel of performance achievement, etc., and money equivalent to the amount of the Company’s shares converted
at market value as of the date of retirement (the Company’s shares, etc.), pursuant to the officer stock delivery
regulations. Meanwhile, the timing of receipt of the benefits of the Company’s shares, etc. by eligible officers
shall, in principle, be upon their retirement from office.
ii. Shares of the Company Remaining in the Trust
The shares of the Company remaining in the Trust are posted as shares of treasury stock in the net assets
section at their carrying amount in the Trust. The carrying amount and number of shares of treasury stock were¥291 million for 518,000 shares as of the end of the previous fiscal year and ¥288 million for 512,000 shares asof the end of the fiscal year under review.

19

(Segments of the Company and Related Information)
Segment information
1. Overview of reportable segments(1) Method of determining segments
The reportable segments of the TSI Holdings Group are components for which separate financial information isavailable and whose operating results are regularly reviewed by the Board of Directors to make decision about
resource allocation and to assess their performance.
As a holding company, TSI Holdings is responsible for the management of each operating company focusing mainlyon the apparel business as well as the strategic functions of the Group as a whole. Each operating company inturn formulates comprehensive strategies for the apparel brands handled while engaging in business activities.
On this basis, the TSI Holdings Group is comprised of Apparel-Related businesses, a reportable segment, andOther Businesses.
(2) Products and services belonging to each reportable segment
In its Apparel-Related Businesses, the Group mainly engages in the planning, manufacture, and sale of apparelas well as brand licensing, production, and logistics operations. In its Other Businesses, the Group engages insuch activities as the provision of sales agency, temporary staffing, synthetic resin-related, store design andmanagement, restaurant services.
2. Calculation method of net sales, income or losses, assets and other items by reportable segments
The accounting method for the reportable segments is generally the same as the items stated in the “Major notes toconsolidated financial statements.”
The segment income or loss is based on operating income or loss.
The intersegment sales and amount of transfer are based on the prevailing market price.

20

3. Net sales, income or losses, assets and other items by reportable segments
FY2019 (March 1, 2019 to February 29, 2020)
Reportablesegment
Other

Apparel-related
businesses

Adjustments
Note 1,2,4,5

Total(Million yen)
Consolidated
financialstatements
amount(Note 3)

Net sales
Sales to third parties

164,755

5,214

169,97097

170,068

298

4,872

5,170

(5,170)―165,054

10,086

175,140(5,072)

170,068

(97)

31

(66)

136

70

Segment assets

89,887

6,711

96,59963,729160,328

Other items
Depreciation and amortization
expenseIncrease in property, plant andequipment and intangible assets

3,373

150

3,523

1,236

4,759

3,895

268

4,163

799

4,963

Inter-segment sales or transfers
Total
Segment income (loss)

Notes:
1. The segment income adjustment of ¥136 million is transaction offsets among consolidated companies.
2. The segment assets adjustment of ¥63,729 million includes the Company-wide assets that are not belong torespective reportable segments of ¥68,514 million and elimination of internal transactions between consolidated
companies of ¥(4,784) million.
3. Segment income is adjusted to operating income listed in the consolidated financial statements.
4. The adjustment of depreciation and amortization of ¥1,236 million is mainly due to the amortization cost of theCompany-wide assets.
5. Adjustment of ¥799 million in increase in property, plant and equipment and intangible assets is mostly related to
the Company-wide assets.

21

FY2020 (March 1, 2020 to February 28, 2021)
Reportablesegment
Other

Apparel-related
businesses

Total(Millions of yen)
Consolidated
financial
Adjustments
statements
Note 1, 2, 4, 5amount(Note 3)

Net sales
Sales to third parties

129,862

4,138

134,00177

134,078

257

4,429

4,686

(4,686)―130,120

8,567

138,687(4,609)134,078

Segment loss

(11,800)(192)(11,993)150(11,843)

Segment assets

76,7007,067

83,767

71,183

154,951

Other items
Depreciation and amortization
expenseIncrease in property, plant andequipment and intangible assets

2,715

186

2,902

1,178

4,080

2,699

452

3,151

523

3,675

Inter-segment sales or transfers
Total

Notes:
1. The segment loss adjustment of ¥150 million is transaction offsets among consolidated companies.
2. The segment assets adjustment of ¥71,183 million includes the Company-wide assets that are not belong torespective reportable segments of ¥76,471 million and elimination of internal transactions between consolidated
companies of ¥(5,287) million.
3. Segment loss is adjusted to operating loss listed in the consolidated financial statements.
4. The adjustment of depreciation and amortization of ¥1,178 million is mainly due to the amortization cost of theCompany-wide assets.
5. Adjustment of ¥523 million in increase in property, plant and equipment and intangible assets is mostly related to
the Company-wide assets.

22

(Per Share Information)(Yen)
FY2019(March 1, 2019 to February 29, 2020)

FY2020(March 1, 2020 to February 28, 2020)

Net assets per share

1,021.90

1,074.81

Net income per share

23.42

42.64

Notes:
1. Data on diluted earnings per share is not presented since there were no potential shares with a dilutive effect.
2. With the Company’s shares held by the trust-type employee stock ownership plan (ESOP) treated as treasury stock,
the number of such shares is deducted from the number of shares issued as of the end of the fiscal year in thecalculation of net assets per share. Meanwhile, the number of treasury stock held by the Trust as of the end of the
fiscal year under review was 696,000 shares.
3. With the Company’s shares held by the trust-type employee stock ownership plan (ESOP) treated as treasury stock,
the number of such shares is deducted from the average number of shares for the period in the calculation of net
income per share. Meanwhile, the average number of shares held by the Trust during the previous fiscal year was
241,000 shares and 581,000 shares during the fiscal year under review.
4. With the Company’s shares held by the Board Benefit Trust (BBT) treated as treasury stock, the number of suchshares is deducted from the number of shares issued as of the end of the fiscal year in the calculation of net assets
per share. Meanwhile, the number of treasury stock held by the Trust as of the end of the previous fiscal year was
518,000 shares and 512,000 shares as of the end of the fiscal year under review.
5. With the Company’s shares held by the Board Benefit Trust (BBT) treated as treasury stock, the number of suchshares is deducted from the average number of shares for the period in the calculation of net income per share.
Meanwhile, the average number of shares held by the Trust during the previous fiscal year was 518,000 sharesand 514,000 shares during the fiscal year under review.
6. The basis for calculating net income per share is as follows.
FY2019(March 1, 2019 toFebruary 29, 2020)
Net income attributable to owners of parent(Million yen)

FY2020(March 1, 2020 toFebruary 28, 2020)

2,181

3,861

Amount not attributable to shareholders on common
stock (Million yen)――

Net income attributable to owners of parent on common
stock (Million yen)

2,181

3,861

Average number of shares of common stock during theperiod (Shares)

93,14990,56023

(Important Subsequent Events)
Group reorganization (absorption-type merger organized by the Company and 14 consolidated subsidiaries)
At a meeting of its Board of Directors held on December 16, 2020, TSI Holdings resolved to undertake a reorganization
with the aim of integrating each of its apparel operating companies into a single company over the following threestages, with a scheduled completion date of March 1, 2023.
1. Stage 1: Absorption-type merger between consolidated subsidiaries on March 1, 2021
TSI Holdings’ Board of Directors resolved to undertake an absorption-type merger of certain consolidated
subsidiaries with SANEI bd CO., LTD., as the surviving company, and SANEI-INTERNATIONAL CO., LTD., TSIGROOVE AND SPORTS CO,. LTD., nano universe CO., LTD., anglobal Ltd., Rose Bud Co., Ltd., Isolar Co., Ltd.,TSI PRODUCTION NETWORK CO., LTD., and TSI EC STRATEGY CO., LTD., as the companies to be merged
effective March 1, 2021. SANEI bd CO., LTD. then changed its corporate name to TSI Co., Ltd. in accordance withthe absorption-type merger.
(1) Overview of the Transaction
i. Names and Businesses of the Combining Companies
Name of the Combining Company:

SANEI bd CO., LTD.

Business:

Apparel business

Names of the Combined Companies:

SANEI-INTERNATIONAL CO., LTD.
TSI GROOVE AND SPORTS CO,. LTD.
nano universe CO., LTD.
anglobal Ltd.
Rose Bud Co., Ltd.
Isolar Co., Ltd.
TSI PRODUCTION NETWORK CO., LTD.
TSI EC STRATEGY CO., LTD.

Business:

Apparel businessii. Date of Business Combination
March 1, 2021
iii. Legal Form of Business Combination
Absorption-type merger with SANEI bd CO., LTD., as the surviving company, and SANEI-INTERNATIONAL
CO., LTD., TSI GROOVE AND SPORTS CO,. LTD., nano universe CO., LTD., anglobal Ltd., Rose Bud Co., Ltd.,
Isolar Co., Ltd., TSI PRODUCTION NETWORK CO., LTD., and TSI EC STRATEGY CO., LTD., as thecompanies to be merged.
iv. Name of the Company after Business Combination
SANEI bd CO., LTD. (new corporate name: TSI Co., Ltd.)v. Other Matters Related to the Transaction
Nine consolidated subsidiaries underpinned by the same internal information systems, human resources, andother systems were the subject of the absorption-type merger.
(2) Overview of the Accounting Treatment Applied
Pursuant to the “Accounting Standard for Business Combinations” (Accounting Standards Board of Japan (ASBJ)
Statement No. 21 issued on January 16, 2019 and the “Guidance on Accounting Standard for Business
Combination and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10 issued on January 16,2019), the absorption-type merger was treated as an under common control transaction.

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2. Stage 2: Absorption-type merger between consolidated subsidiaries on March 1, 2022
TSI Holdings’ Board of Directors resolved to undertake an absorption-type merger with TSI Co., Ltd., as thesurviving company, and consolidated subsidiaries Ueno Shokai Co., Ltd., Jack Clothing Co., Ltd., Alpage Co., Ltd.,Star Joinus Co., Ltd., and And Wonder Co., Ltd., as the companies to be merged on the scheduled date of March 1,
2022.
(1) Overview of the Transaction
i. Names and Businesses of the Combining Companies
Name of the Combining Company :TSI Co., Ltd.

Business:

Apparel business

Names of the Combined Companies:

Ueno Shokai Co., Ltd.
Jack Clothing Co., Ltd.
Alpage Co., Ltd.
Star Joinus Co., Ltd.
And Wonder Co., Ltd.

Business:

Apparel businessii. Date of Business Combination
March 1, 2022 (scheduled)iii. Legal Form of Business Combination
Absorption-type merger with TSI Co., Ltd., as the surviving company, and consolidated subsidiaries Ueno
Shokai Co., Ltd., Jack Clothing Co., Ltd., Alpage Co., Ltd., Star Joinus Co., Ltd., and And Wonder Co., Ltd., as
the companies to be merged.
iv. Name of the Company after Business Combination
TSI Co., Ltd.
v. Other Matters Related to the Transaction
After promoting the sharing of the same internal information systems, human resources, and other systems,
the aforementioned five combining companies will be subject to an absorption-type merger.
(2) Overview of the Accounting Treatment Applied
Pursuant to the “Accounting Standard for Business Combinations” (Accounting Standards Board of Japan (ASBJ)
Statement No. 21 issued on January 16, 2019 and the “Guidance on Accounting Standard for Business
Combination and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10 issued on January 16,2019), plans are in place to treat the absorption-type merger as an under common control transaction.
3. Final stage: Absorption-type merger between TSI Holdings and a consolidated subsidiary on March 1, 2023
TSI Holdings’ Board of Directors resolved to undertake an absorption-type merger with TSI Holdings Co., Ltd., as
the surviving company, and TSI Co., Ltd., as the company to be merged on the scheduled date of March 1, 2023. TSI
Holdings Co., Ltd. will then change its corporate name to TSI Co., Ltd. (provisional name) in accordance with theabsorption-type merger.
(1) Overview of the Transaction
i. Names and Businesses of the Combining Companies
Name of the Combining Company:

TSI Holdings Co., Ltd.

Business:

Apparel business

Name of the Combined Company:

TSI Co., Ltd.

Business

Apparel business25

ii. Date of Business Combination
March 1, 2023 (scheduled)iii. Legal Form of Business Combination
Absorption-type merger with TSI Holdings Co., Ltd., as the surviving company, and TSI Co., Ltd., as thecompany to be merged.
iv. Name of the Company after Business Combination
TSI Holdings Co., Ltd. (new corporate name: TSI Co., Ltd. (provisional name))v. Other Matters Related to the Transaction
By implementing these mergers in stages, plans are in place to lower the break-even point by streamlining theorganizational structure by reducing the overlapping functions of each Group company, increase the speed ofbusiness through an organizational structure suitable for the digital age, and reform the mindset and culture
by integrating the structure, functions, and rules through corporate integration.
(2) Overview of the Accounting Treatment Applied
Pursuant to the “Accounting Standard for Business Combinations” (Accounting Standards Board of Japan (ASBJ)
Statement No. 21 issued on January 16, 2019) and the “Guidance on Accounting Standard for Business
Combination and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10 issued on January 16,2019), plans are in place to treat the absorption-type merger as an under common control transaction.

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