Summary of Consolidated Financial Results
for the Third Quarter of Fiscal Year Ended February 28, 2023
[Japanese GAAP] (Consolidated)
January 13, 2023
Company name:

TSI HOLDINGS CO., LTD.

Stock listing: Tokyo Stock Exchange

Code number:

3608

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

Representative:

Representative Director and President, Tsuyoshi Shimoji
Director, General Manager of Corporate Dept. Mitsuru Naito
TEL: +81-3-5785-6400

Contact:

Scheduled date of financial report:
Scheduled date to begin dividend payment:

January 16, 2023―

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 Third quarter of the Fiscal Year Ended February 28, 2023(March 1, 2022 to November 30,
2022)(1) Consolidated results of operations(% change from the previous fiscal year)

Net sales

Third quarter of FY ended
February 28,2023
Third quarter of FY ended
February 28,2022

Operating income

Million yen%

115,406
103,915

Million yen

Profit attributable toowners of parent

Ordinary income%

Million yen

%

11.1

3,726 (28.1)

5,061(18.9)

6.9

5,180

6,239

―

―

Million yen%

4,621 (15.4)
5,465

―

(Notes) Comprehensive income: Third quarter of Fiscal year ended February 28, 2023 ¥6,518 million 26.5%
Third quarter of Fiscal year ended February 29, 2022 ¥5,153 million―%
Net income
per share
Third quarter of FY ended
February 28,2023
Third quarter of FY ended
February 28,2022

Diluted net
income per share
Yen

Yen

52.69

―

60.54

―

(Note) The "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan (ASBJ)
Statement No. 29 issued on March 31, 2020) and other accounting standards have been applied from the
beginning of the first quarter of the current consolidated fiscal year. The figures for the Third quarter of the
fiscal year ending February 28, 2023 are obtained after the application of the above accounting standards.
(2) Consolidated financial position

Million yen

Million yen

Shareholders’ equity
ratio%

145,961

101,72469.4

140,440

97,736

69.2

Total assets
Third quarter of FY ended
February 28,2023
FY ended February 28,2022

Net assets(Reference) Shareholders’ equity: Third quarter of FY ended February 28,2023 ¥101,278 million
FY ended February 2022
¥97,212 million(Note) The "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan (ASBJ)
Statement No. 29 issued on March 31, 2020) and other accounting standards have been applied from the
beginning of the first quarter of the current consolidated fiscal year. The figures for the Third quarter of the
fiscal year ending February 28, 2023 are obtained after the application of the above accounting standards.

2. Dividends
Annual dividend
End of
1Q
Yen

End of
2Q
Yen

End of
3Q
Yen

Yen

Yen

FY ended February 2022

―

0.00

―

5.00

5.00

FY ended February 2023

―

0.00
―

7.00

7.00

FY ended February 2023
(forecast)Year-end

Total(Note) Revisions during this quarter of dividends forecast for fiscal year: None

3. Forecast of Consolidated Business Results for the Fiscal Year Ending February 28, 2023 (March 1, 2022 to February 28, 2023)(% change from the corresponding period of the previous fiscal year)
Net sales

Full fiscal year

Million yen
154,000

Operating income%
9.7

Million yen
1,800%(59.5)

Ordinary income
Million yen
3,300%(43.4)

Profit attributable toowners of parent
Million yen
2,400

Net income
per share

%
134.7

Yen
27.63

(Note) Revisions during this quarter of previously disclosed consolidated business results projection for FY 2023: None

＊Notes:(1) Changes in significant subsidiaries during the period: None
Changes in specified subsidiaries resulting in a change in the scope of consolidation(2) Application of particular accounts procedures to the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates, and restatements
a. Changes in accounting policies due to revisions of accounting standards: Yes
b. Changes in accounting policies other than above (a): Nonec. Changes of accounting estimates: None
d. Restatements: None
(Note) For details, please refer to "2. Quarterly Consolidated Financial Statements and Major Notes, and (4) Notes to Quarterly
Consolidated Financial Statements (changes in accounting policies)” on page 8 of attached materials.
(4) Number of shares issued (common stock)a. Number of shares issued
Q3 of FY ended February
at the end of period(treasury stock included) 2023
b. Number of treasury
Q3 of FY ended February
stock at the end of period 2023
c. Average number ofshares over the period

Q3 of FY ended February
2023

95,783,293 shares

FY ended February 2022

95,783,293 shares

10,409,948 shares

FY ended February 2022

5,390,033 shares

87,716,937 shares

Q3 of FY ended February
2022

90,287,389 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. Please refer to "(3)Explanation of Consolidated Business Forecast and Other Forward-looking Statements " on page 3 for the assumptions underlying
the forecasts and cautionary statements regarding the use of the forecasts.

Contents of Attached Materials
1. Qualitative Information on results for this quarter of FY ended February 2023 ····································· 2(1) Overview of Business Results ······························································································· 2(2) Overview of Financial Position ···························································································· 3(3) Explanation of Consolidated Business Forecast and Other Forward-looking Statements ··············· 3
2. Quarterly Consolidated Financial Statements and Major Notes ······················································ 4(1) Quarterly Consolidated Balance Sheets ·················································································· 4(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income ··············· 6(3)Notes to Quarterly Consolidated Financial Statements ······························································· 8
Going Concern Assumption ··································································································· 8Notes on Significant Changes in Shareholders’ Equity ······························································ 8
Change in an Accounting policy ····························································································· 8
Additional Information ········································································································· 9
Segments of the Company and Related Information ·································································1211.

Qualitative Information on results for this quarter of FY ended February 2023

(1) Overview of Business Results
During Q3 of the consolidated cumulative period (March 1, 2022–November 30, 2022), in the apparel industry,
consumer spending was expected to grow as demand for going out gradually recovered due to the easing of behavioral
restrictions in the COVID-19 pandemic. However, the outlook remains uncertain due to the effects of the sharp rise inglobal resource prices and the rapid depreciation of the yen, caused by the situation in Russia and Ukraine, as well asa renewed increase in the number of the COVID-19 infections.
Under such a business environment, based on the new medium-term management plan "TSI Innovation Program
2025 (TIP25)" announced in April 2022, our group has been striving to promote fundamental reforms to respond tochanges in the social environment and customer lifestyles associated with the progress of digital transformation (DX)and to create our own original value offerings. To create a form of fashion entertainment, we focus on investment ingrowth business areas, primarily e-commerce (EC) expansion, and shift from the phase that involves withdrawal from
unprofitable stores to the phase that involves opening new large-scale stores and reopening stores in prime locations
to improve our profit structure by developing attractive stores.
Furthermore, we implemented an absorption-type merger (with the subsidiary TSI Inc. as the surviving company
and the subsidiary Ueno Shokai Co., Ltd. as the absorbed company) in March 2022 in the Second step of our efforts tointegrate the group companies into one company. Through the absorption-type merger, we have reduced the overlap offunctions of the two companies and streamlined the organizational structure to lower the break-even point, strengthen
the governance of the Group as a whole, and to steadily strengthen profitability while leveraging the individuality ofthe brands we have built to date.
In addition, through the relocation of the head office on September 20, 2022 and the associated consolidation of
offices for each business, we aim to improve the efficiency of the entire business, including group companies.
Our group is working to secure the in-store sales of our group companies and strengthen sales through EC, and isalso making thorough efforts to curb excess inventory and control costs by strictly monitoring product purchases andholding them to appropriate standards. Despite that, the situation remains harsh, partly due to the reaction to theemergency SG&A cost containment measures implemented in the same quarter of the previous year in response to the
spread of the COVID-19 infection.
Consequently, the net sales were 115,406 million yen (up 11.1% in the same quarter last year), the operating income
was 3,726 million yen (down 28.1% in the same quarter last year), and the ordinary income reached 5,061 million yen(down 18.9% in the same quarter last year).
Furthermore, the quarterly profit attributable to owners of the Group’s parent was 4,621 million yen (down 15.4% in
the same quarter last).
Net sales by reportable segment were as follows.

Apparel-Related Businesses
With regard to each of the subsidiaries that comprise our apparel-related business, we focus on strengthening
profitability by investing in growth business areas, reforming real stores, and shifting to EC sales channels based on
the TIP25.
The Group worked diligently to strengthen its profitability by rolling out products that take full advantage of special
features in its existing businesses including street brand “HUF,” women's brand “LE PHIL,” “AVIREX” with a focus
on military fashion, and “and wander” with a focus on outdoor fashion. Consequently, the net sales in apparel-related
businesses increased by 11.3% in the same quarter last to 111,560 million yen.

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 and2sells a variety of products including cosmetics, perfumes, and soaps, and Urth Caffe JAPAN Co., Ltd., which operates
in Japan a popular organic café in California, the U.S. Net sales were 4,380 million yen (up 14.3% in the same quarterlast year).
(2) Overview of Financial Position(Million yen)
At the end of FY ended
February 2022
(As of February 28, 2022)

At the end of Q3 FY ended
February 2023
(As of November 30, 2022)

Increase/decrease

Total assets

140,440

145,961

5,520

Liabilities

42,704

44,236

1,532

Net assets

97,736

101,724

3,988

Shareholders’ equity ratio

69.2%

69.4%

0.2%

¥1,075.44¥1,186.30¥110.86

Net assets per share

Assets increased by ¥5,520 million due to increases in notes and accounts receivable (up ¥5,558 million from theend of the previous period) and inventories (up ¥9,555 million from the end of the previous period), despite decreases
in cash and deposits (down ¥7,119 million from the end of the previous period) and in "Other" current assets (down¥1,761 million from the end of the previous period).
Liabilities increased by ¥1,532 million due to an increase in notes and accounts payable (up ¥4,767 million from theend of the previous period) and an increase in "Other" long-term liabilities (up ¥781 million from the end of theprevious period), despite a decrease in long-term loans payable (including current portion of long-term loans payable)(down ¥4,549 million from the end of the previous period).
Net assets increased by ¥3,988 million due to increases in retained earnings (up ¥4,374 million from the end of theprevious fiscal year) and foreign currency translation adjustments (up ¥925 million from the end of the previous fiscal
year), despite an increase in treasury stock (up ¥1,719 million from the end of the previous fiscal year), which is adeduction item in net assets.
As a result, net asset per share increased by ¥110.86.

(3) Explanation of Consolidated Business Forecast and Other Forward-looking Statements
There is no change in the business results projection for the fiscal year ending February 28, 2023 from the "Noticeof Difference between Business Results Projections and Actual Results for the Second Quarter (Cumulative) andRevision (Upward Revision) of Consolidated Earnings Forecast for the Full Year" released on October 12, 2022.

3

2. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly Consolidated Balance Sheets
Previous consolidated
fiscal year
(As of February 28, 2022)(Million yen)
Quarter consolidated
accounting period ofcurrent fiscal year
(As of November 30, 2022)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable–trade39,258
10,37832,13915,936

Securities
Merchandise and finished goods

969
17,597

27,162

494
634

515
603

Other
Allowance for doubtful accounts

6,263
(48)

4,501
(53)

Total current assets

75,54780,805

6,544

7,123

Goodwill
Other

2,044
7,220

2,205
7,462

Total intangible assets

9,265

9,668

Investments and other assets
Investment securities

28,39728,122

Investment property
Other

4,735
16,053

4,713
15,630Allowance for doubtful accounts

(102)

(102)

Total investments and other assets

49,08348,36464,89365,155

140,440

145,961

Work in process
Raw materials and supplies

Non-current assets
Property, plant and equipment
Intangible asset

Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable–trade

10,595

15,362

Short-term borrowings
Current portion of long-term borrowings

114
6,212

17
4,987

Income taxes payable
Provision for bonuses

251
1,327

823
1,719

Provision for point card certificates
Provision for shareholder benefit program

453
139

83

Provision for sales returns
Provision for relocation

310
87

-

Asset retirement obligations
Other

650
8,230

356
8,709

Total current liabilities

28,37532,059Non-current liabilities
Long-term borrowings

9,803

6,478

Retirement benefit liability

37
979

37
1,004

Asset retirement obligations
Other

2,010
1,498

2,376
2,279

Total non-current liabilities

14,32912,17742,704

44,236

Provision for retirement benefits for directors

Total liabilities

4Previous consolidated
fiscal year
(As of February 28, 2022)(Million yen)
Quarter consolidated
accounting period ofcurrent fiscal year
(As of November 30, 2022)

Net assets
Shareholders’ equity
Share capital
Capital surplus

15,00029,25515,00028,824Retained earnings
Treasury stock

53,236(3,668)57,610(5,388)

Total shareholders’ equity

93,822

96,046

3,058

3,929

457
(126)

1,383
(80)

3,389

5,231

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

Non-controlling interests
Total net assets
Total liabilities and net assets

5

523

445

97,736

101,724

140,440

145,961(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly consolidated statements of income
Consolidated cumulative Third quarter

Cost of sales

Consolidated cumulative
Third quarter ofprevious fiscal year
(March 1,2021 to November
30, 2021)
103,91545,924(Million yen)
Consolidated cumulative
Third quarter ofcurrent fiscal year
(March 1,2022 to November
30, 2022)
115,406
50,040Gross profit

57,991

65,366

Selling, general and administrative expenses

52,81061,639Operating income

5,180

3,726

Interest income
Dividend income

24
553

19
460

Real estate income
Foreign exchange income

216
233

267
493

Net sales

Non-operating income

Other
Total non-operating income
Non-operating expenses
Interest expenses

452

283

1,481

1,524

86

55

Loss on valuation of investment securities
Rental expenses on real estate

14
114

41

Other

206

93

Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets

421

189

6,239

5,061

391

4

Gain on sale of investment securities
Subsidies for employment adjustment

809
33

839
-

Other

329

129

1,563

972

81
223

25
330

1,193

159
-

36

166

Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Gain on sale of investment securities
Loss due to temporary closing
Other
Total extraordinary losses

1,535

682

6,268

5,352

Income taxes―current
Income taxes―deferred

646
181

1,201
(415)

Total income taxes

827

785

5,441

4,567

(24)

(54)

5,465

4,621

Income before income taxes

Net income
Net loss attributable to non-controlling interest
Net income attributable to owners of parent

6

Quarterly Consolidated statements of comprehensive income
Consolidated cumulative Third quarter

Net income
Other comprehensive income

Consolidated cumulative
Third quarter ofprevious fiscal year
(March 1,2021 to November
30, 2021)
5,441(Million yen)
Consolidated cumulative
Third quarter ofcurrent fiscal year
(March 1,2022 to November
30, 2022)
4,567

(790)
473

870
1,052

21

46

7

(18)

Valuation difference on available-for-sale securities

Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income ofaffiliates accounted for using equity method
Total other comprehensive income

(287)

1,951

Comprehensive income

5,153

6,518

Total comprehensive income attributable to:
Owners of parent

5,139

6,463

13

54

Non-controlling interests7(3) Notes to Quarterly Consolidated Financial Statements

Going Concern Assumption
Not applicable

Notes on Significant Changes in Shareholders’ Equity
Not applicable

Change in an Accounting policy
Application of the Accounting Standard for Revenue Recognition
The Company and its subsidiaries have adopted the "Accounting Standard for Revenue Recognition" (ASBJ
Statement No. 29 issued on March 31, 2020, hereinafter referred to as the "Accounting Standard for Revenue
Recognition") from the beginning of the first quarter of the current consolidated fiscal year, and recognized revenue atthe amount expected to be received in exchange for the promised goods or services when the control of the goods orservices is transferred to the customer.
The principal changes resulting from the application of the Accounting Standard for Revenue Recognition are as
follows.

Revenue recognition related to own points
Under the point system operated by certain consolidated subsidiaries, the company previously recorded the amountof expenses expected to arise from the future use of points as a provision for point card certificates and recorded theamount of the provision as selling, general, and administrative expenses. However, it has changed this method to
identify the points granted as a performance obligation and deduct the amount of the provision from net sales. As aresult, the provision for point card certificates, which was presented as a current liability in the consolidated balance
sheet of the previous fiscal year, is now included in "other" under current liabilities as a contract liability from the firstquarter of the current consolidated fiscal year.

Revenue recognition related to principal transactions
In the past, the company recognized revenue in the net amount of consideration received from customers less theamount equivalent to commissions paid to department stores, among others in buying sales transactions withdepartment stores and other business partners. However, it has now changed the method to recognize revenue in the
gross amount.

Revenue recognition related to sales with right of return
In sales with the right of return related to certain consolidated subsidiaries, the company previously recognized the
expected loss from future sales returns as a provision for sales returns and recorded the provision for such loss as thecost of sales. This method was, however, changed to not recognize revenue and cost of sales at the time of sale inaccordance with the provisions regarding variable consideration for goods and products expected to be returned. As aresult, the provision for sales returns, which was presented as a current liability in the consolidated balance sheets ofthe previous fiscal year, is now included in "other" under “current liabilities” as a refund liability for the consideration
for goods and products from the first quarter of the current consolidated fiscal year, and assets recognized as the rightto collect goods and products from customers upon settlement of refund liabilities are included in "other" under“current assets” as returned assets.
In accordance with the transitional treatment stipulated in the proviso of Paragraph 84 of the Accounting Standard
for Revenue Recognition, the cumulative effect of the retrospective application of the new accounting policy prior to
the beginning of the first quarter of the current consolidated fiscal year is added to or deducted from retained earnings
at the beginning of the first quarter of the current consolidated fiscal year, and the new accounting policy is applied
from the balance at the beginning of period. However, the new accounting policy was not applied retrospectively tocontracts for which almost all revenue amounts were recognized based on the previous treatment prior to the beginning8

of the first quarter of the current consolidated fiscal year, in accordance with the method prescribed in Paragraph 86of the Accounting Standard for Revenue Recognition.
As a consequence, net sales increased by 6,011 million yen; cost of sales increased by 377 million yen; selling, general,and administrative expenses increased by 5,868 million yen; and operating income, ordinary income, and income before
income taxes each decreased by 234 million yen during the Third quarter of the current consolidated fiscal year. Thebalance of the retained earnings at the beginning of the period decreased by 288 million yen.
In accordance with the transitional treatment prescribed in Paragraph 89-2 of the Accounting Standard for Revenue
Recognition, no reclassification was made for the previous consolidated fiscal year using the new presentation method.
Furthermore, in accordance with the transitional treatment stipulated in Paragraph 28-15 of the "AccountingStandard for Quarterly Financial Reporting" (ASBJ Statement No. 12, March 31, 2020), information on disaggregating
revenue from contracts with customers for the Third quarter of the previous consolidated fiscal year is not presented.

Application of Accounting Standard for Fair Value Measurement
The Company has decided to apply the "Accounting Standard for Fair Value Measurement" (ASBJ Statement No.
30, July 4, 2019) ("Accounting Standard for Fair Value Measurement") and other accounting standards from the
beginning of the first quarter of the current consolidated fiscal year. The new accounting policy stipulated by the
Accounting Standard for Fair Value Measurement is to be applied prospectively in accordance with the transitional
treatment stipulated in Paragraph 19 of the Accounting Standard for Fair Value Measurement and Paragraph 44-2 ofthe Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019). For bonds and otherdebentures, which were previously regarded as financial instruments whose fair value was extremely difficult todetermine, the acquisition cost was used as the fair value in quarterly consolidated balance sheet amount. As a resultof applying the standard, even if observable inputs were not available, the fair value calculated using unobservable
inputs based on the best available information was used in the quarterly consolidated balance sheet amount.
The effect of this change on consolidated financial statements for the Third quarter is immaterial.

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 be acquiredby 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 finance undertaken 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 as of the end of
the previous fiscal year under review were ¥255 million for 545,000 shares. And that as of the end of this fiscal year
under review were ¥200 million for 428,000 shares.
iii. Carrying Value of Debt Finance Posted Using the Gross Price Method
As of February 28, 2022: ¥311 million and as of November 30, 2022: ¥282 million,

9

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 asfunds. Eligible officers receive the Company’s shares equivalent to the points granted in accordance with the levelof 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 ¥279
million for 496,000 shares as of the end of the previous fiscal year and ¥279 million for 496,000 shares as of the endof this fiscal year under review.

10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 inconjunction 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 EffectAccounting” (ASBJ Guidance No. 28, February 16, 2018) and calculate the amount of deferred tax assets anddeferred tax liabilities in accordance with the provisions of pre-revision tax laws.)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 theCompany's equity interest) is not material and their overall importance is not significant.

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 areorganization with the aim of integrating each of its apparel operating companies into a single company over thefollowing three stages, with a scheduled completion date of March 1, 2023.
The Board of Directors, at its meeting held on January 14, 2022, partially changed the companies to be merged in
an absorption-type merger with an expected completion date of March 1, 2022.
Absorption-type merger between consolidated subsidiaries on March 1, 2022
Transactions under common control, etc.
Group reorganization (absorption-type merger of consolidated subsidiaries as of March 1, 2022).
(1) Overview of Transactions
i. Names and Businesses of the Combining Companies
Name of the Combining Company

TSI Inc.

Business

Apparel business

Name of the Combined Company

Ueno Shokai Co., Ltd.

Business

Apparel businessii. Date of Business Combination
March 1, 2022
iii. Legal Form of Business Combination
Absorption-type merger with TSI Inc. as the surviving company, and Ueno Shokai Co., Ltd. as the company
to be merged
iv. Name of the Company after Business Combination
TSI Inc.
v. Other Matters Related to the Transaction
After promoting the sharing of the same internal information systems, human resources, and others, thecompany to be merged was subject to an absorption-type merger.
(2) Overview of the Accounting Treatment Applied
Pursuant to the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21 issued on January
16, 2019) and the “Implementation Guidance on Accounting Standard for Business Combination andAccounting Standard for Business Divestitures” (ASBJ Guidance No. 10 issued on January 16, 2019), theabsorption-type merger was treated as a transaction under common control.
The company has partially changed the companies to be merged because Jack Co., Ltd., Arpege Co.,

11

Ltd., Star Joinus Co., Ltd., and And Wander Co., Ltd., which were scheduled to be merged with TSI Inc. on
March 1, 2022, were not merged because of the delay in infrastructure development and commonization.

Segments of the Company and Related Information
1. Consolidated cumulative Third quarter of previous fiscal year (March 1,2021 to November 30, 2021)(1) Net sales, income or losses, assets and other items by reportable segments
Reportablesegment
Other
Total
(Note
1)
Apparel-related
businesses(Unit: Million yen)

Adjustments(Note 2)

Consolidated
financialstatements
amount(Note 3)

Net sales
Sales to third parties

100,164

3,677

103,84173

103,915

78

156

235

(235)

―

100,243

3,833

104,076(161)

103,915

4,949

59

5,009

171

5,180

Inter-segment sales or transfers
Total
Segment income
Notes:

1. Other, which doesn’t belong to respective reportable segments, includes synthetic resin-related, store design andmanagement and so on.
2. Segment income adjustment of ¥171 million is transaction offsets among consolidated companies.
3. Segment income is adjusted to operating income listed in the consolidated financial statements.
(2) Goodwill or impairment loss in non-current assets by reportable segments

Important impairment loss in non-current assets
In segment apparel-related businesses, book value of the stores which are decided to close, and whose operating
income are continuously in red, and whose brands are decided to close, are supposed to be reduced to recoverable
amount. And the decrease is posted as impairment loss in the extraordinary losses section.
As a side note, recorded amount of impairment loss in non-current assets were ¥223 million as of the end of thisfiscal year under review.

A significant change in the amount of goodwill
None

A significant gain from negative goodwill
None

12

1. Consolidated cumulative Third quarter of current fiscal year (March 1,2022 to November 30, 2022)(1)Net sales, income or losses, assets and other items by reportable segments
Reportablesegment
Other
Total
(Note
1)
Apparel-related
businesses(Unit: Million yen)

Adjustments(Note 2)

Consolidated
financialstatements
amount(Note 3)

Net sales
Sales to third parties

111,468

3,883

115,351

55

115,406

92

497

590

(590)

―

111,560

4,380

115,941(535)

115,406

5,065

55

5,120

(1,394)

3,726Inter-segment sales or transfers
Total
Segment income
Notes:

1. Other, which doesn’t belong to respective reportable segments, includes synthetic resin-related, store design andmanagement and so on.
2. Segment income adjustment of (1,394) million yen is due to company-wide expenses of 2,974 million yen not
attributable to any business segment and elimination of internal transactions among consolidated companies of
1,846 million yen.
3. Segment income is adjusted to operating income listed in the consolidated financial statements.
(2) Matters concerning changes in reportable segments, etc.
As described in "changes in accounting policies," the Company has applied the Accounting Standard for Revenue
Recognition and other accounting standards from the beginning of the first quarter of the current consolidated fiscal
year, and has changed its accounting method for revenue recognition, and therefore, the method of calculation of profit
or loss by business segment in the same manner.
As a result of this change, compared with the previous method, the net sales and segment wise income in the "apparelrelated businesses" increased by 6,011 million yen and decreased by 234 million yen, respectively, in the Third quarterof the current consolidated fiscal year. The impact on "other" is insignificant.
(3) Goodwill or impairment loss in non-current assets by reportable segments

Significant impairment losses on non-current assets
In the "apparel-related business" segment, the book values of stores that have decided to close, stores with
continuously negative operating income or loss, and stores related to brands that have decided to close were reduced
to their recoverable amounts, and the amount of reduction was recorded as impairment loss under extraordinary losses.
The amount of such impairment loss was 266 million yen for the nine-month period from March 1, 2022 to November
30, 2022.

A significant change in the amount of goodwill
None

A significant gain from negative goodwill
None13