Summary of Consolidated Financial Results
for the First Quarter of Fiscal Year Ended February 28, 2023
[Japanese GAAP] (Consolidated)
July 13, 2022
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, Corporate Dept. Mitsuru Naito
TEL: +81-3-6748-0001

Contact:

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

July 15, 2022―

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 first quarter of the Fiscal Year Ended February 28, 2023(March 1, 2022 to May 31, 2022)(1) Consolidated results of operations(% change from the previous fiscal year)

Net salesFirst quarter of FY ended
February 28,2023
First quarter of FY ended
February 28,2022

Operating income

Million yen%

38,122

11.4

34,215

57.8

Million yen

Profit attributable toowners of parent

Ordinary income%

Million yen%

Million yen

%

1,603

(29.5)

2,212(14.2)

2,063(15.1)

2,273

―

2,578

―

2,431

―

(Notes) Comprehensive income: First quarter of Fiscal year ended February 28, 2023 ¥2,605 million(9.8%)
First quarter of Fiscal year ended February 29, 2022 ¥2,887 million―%
Net income
per shareFirst quarter of FY ended
February 28,2023
First quarter of FY ended
February 28,2022

Diluted net
income per share
Yen

Yen

23.04

―

26.94

―

(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 first 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%

140,483

99,22570.3

140,440

97,736

69.2

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

Net assets(Reference) Shareholders’ equity: First quarter of FY ended February 28,2023 ¥98,692 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 first 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

Second quarter(Cumulative)
Full fiscal year

Operating income

Million yen%

Million yen

76,470

18.1

(985)

157,350

12.1

1,500

Profit attributable toowners of parent

Ordinary income%

Million yen―(66.2)

%

(520)
2,400

Million yen―(58.9)Net income
per share

%

Yen

(240)

―

(2.66)

1,500

46.7

16.59

(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: Yes
d. Restatements: None

(Note) For details, please refer to "2. Quarterly Consolidated Financial Statements and Major Notes, and (3) Notes to Quarterly
Consolidated Financial Statements (changes in accounting policies)” on page 8 and “changes of accounting estimates" on page 9of attached materials.
(4) Number of shares issued (common stock)a. Number of shares issued
Q1 of FY ended February
at the end of period(treasury stock included) 2023
b. Number of treasury
Q1 of FY ended February
stock at the end of period 2023
c. Average number of
Q1 of FY ended February
shares over the period
2023

95,783,293 shares

FY ended February 2022

95,783,293 shares

7,500,233 shares

FY ended February 2022

5,390,033 shares

89,574,530 shares

Q1 of FY ended February
2022

90,242,807 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
Change in an accounting estimate ·························································································· 9Additional Information ········································································································· 9
Segments of the Company and Related Information ·································································1111.

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

(1) Overview of Business Results
During Q1 of the consolidated cumulative period (March 1, 2022 to May 31, 2022), while personal consumption in
the apparel industry was expected to grow as a result of the progress of vaccination against COVID-19 and a gradual
recovery in demand for going out, consumer confidence has not fully recovered, and the situation remains harsh.
In such a business environment, based on the new medium-term management plan called the "TSI Innovation Program
2025 (TIP25)" announced in April 2022, the Group will continue to respond to changes in the social environment andcustomer lifestyles associated with the progress of digital transformation (DX) and facilitate fundamental reforms tocreate original value to be offered. To create a form of fashion entertainment, we focus on investment in growthbusiness 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, the company has resolved and scheduled to relocate its head office in September 2022 to improve theefficiency of the entire business, including group companies.
The Group has continued to make thorough group-wide efforts to secure the in-store sales and strengthen sales throughEC, as well as to control excess inventory and the cost of goods sold by strictly evaluating product purchases andreducing them to appropriate levels. However, sales remain harsh.
Consequently, the net sales were 38.122 billion yen (up 11.4% in the same quarter last year), the operating income
was 1.603 billion yen (down 29.5% in the same quarter last year), and the ordinary income reached 2.212 billion yen(down 14.2% in the same quarter last year).
Furthermore, the quarterly profit attributable to owners of the Group’s parent was 2.063 billion yen (down 15.1% 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.
As for the existing businesses, the golf brands "PEARLY GATES" and "new balance golf," the street brand "HUF,"
and the women’s brands "NATURAL BEAUTY BASIC" and "human woman" have aimed to increase profitability by
developing products that make the most of their special characteristics.
As for the EC business, by shifting to a strategy and operational structure that places the top priority on EC anddigital, the Group promoted measures to strengthen the in-store and online coordination, and worked to increase theEC sales. Consequently, the net sales in apparel-related businesses increased by 10.9% in the same quarter last to
36,780 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 andsells a variety of products including cosmetics, perfumes, and soaps, and Urth Caffe JAPAN Co., Ltd., which operates2

in Japan a popular organic café in the U.S., California. Net sales in this segment declined 21.5% compared with theprevious fiscal year, to 1,498million yen owing mainly to the continued impact of COVID-19.
(2) Overview of Financial Position(Million yen)
At the end of FY ended
February 2022
(As of February 28, 2022)

At the end of 1Q FY ended
February 2023
(As of May 31, 2022)

Increase/decrease

Total assets

140,440

140,483

43

Liabilities

42,704

41,257(1,446)

Net assets

97,73699,225

1,489

69.2%
¥1,075.44

70.3%¥1,117.91

1.1%¥42.47

Shareholders’ equity ratio
Net assets per share

The total assets increased by 43 million yen due to increases in notes and accounts receivable–trade (up 2,618 million
yen from the end of the previous fiscal year) and inventories (up 1,259 million yen from the end of the previous fiscal
year), despite decreases in cash and deposits (down 1,599 million yen from the end of the previous fiscal year) and"other" under current assets (down 2,070 million yen from the end of the previous fiscal year).
Liabilities decreased by 1,446 million yen, mainly due to a decrease in the long-term borrowings (including current
portion of long-term borrowings) (down 1,693 million yen from the end of the previous fiscal year).
The net assets increased by 1,489 million yen due to an increase in retained earnings (up 1,543 million yen from theend of the previous fiscal year) and valuation difference on available-for-sale securities (up 352 million yen from theend of the previous fiscal year), despite an increase in the treasury stock (up 600 million yen from the end of theprevious fiscal year), a deduction item in net assets.
As a result, net asset per share increased by ¥42.47.

(3) Explanation of Consolidated Business Forecast and Other Forward-looking Statements
No adjustments were made concerning the business results projection for the year ending 28 February,2023 as reported
in the“Forecast of Consolidated Business Results for the Fiscal Year Ending February 28, 2023” released on 13 April
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)
1st Quarter consolidated
accounting period ofcurrent fiscal year
(As of May 31, 2022)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable–trade39,258
10,37837,65812,997

Securities
Merchandise and finished goods

969
17,5971,158
19,008

494
634

332
645

Other
Allowance for doubtful accounts

6,263
△48

4,192
△58

Total current assets

75,54775,935

6,544

6,476

Goodwill
Other

2,044
7,220

2,073
7,305

Total intangible assets

9,265

9,378

Investments and other assets
Investment securities

28,39727,994

Allowance for doubtful accounts

4,735
16,053(102)

4,728
16,073(102)

Total investments and other assets

49,083

48,69364,89364,548140,440

140,483

Work in process
Raw materials and supplies

Non-current assets
Property, plant and equipment
Intangible asset

Investment property
Other

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

10,595

10,785

Short-term borrowings
Current portion of long-term borrowings

114
6,212

108
5,537

Income taxes payable
Provision for bonuses

251
1,327

537
1,743

Provision for point card certificates
Provision for shareholder benefit program

453
139

91

Provision for sales returns
Provision for relocation

310
87

87

Asset retirement obligations
Other

650
8,230

526
8,379

Total current liabilities

28,375

27,798Non-current liabilities
Long-term borrowings

9,803

8,784

Retirement benefit liability

37
979

37
989

Asset retirement obligations
Other

2,010
1,498

2,219
1,428

Total non-current liabilities

14,32913,45942,704

41,257

Provision for retirement benefits for directors

Total liabilities

4Previous consolidated
fiscal year
(As of February 28, 2022)(Million yen)
1st Quarter consolidated
accounting period ofcurrent fiscal year
(As of May 31, 2022)

Net assets
Shareholders’ equity
Share capital
Capital surplus

15,00029,25515,00029,255Retained earnings
Treasury stock

53,236(3,668)54,780(4,269)Total shareholders’ equity

93,822

94,765

3,058

3,410

457
(126)

604
(88)

3,389

3,926

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

533

97,73699,225

140,440

140,483(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly consolidated statements of income
Consolidated cumulative first quarter

Cost of sales

Consolidated cumulative
first quarter ofprevious fiscal year
(March 1,2021 to May 31,
2021)
34,215
15,069(Million yen)
Consolidated cumulative
first quarter ofcurrent fiscal year
(March 1,2022 to May 31,
2022)
38,122
15,774Gross profit

19,14522,348Selling, general and administrative expenses

16,872

20,744

Operating income

2,273

1,603

Interest income
Dividend income

0
128

4
120

Real estate income
Foreign exchange income

47
151

91
270

Net sales

Non-operating income

Gain on sale of investment securities

-

17

Other

130

173

Total non-operating income

457

678

31

19

4
63

21

Other

51

28

Total non-operating expenses

151

69

2,578

2,212

Non-operating expenses
Interest expenses
Loss on valuation of investment securities
Rental expenses on real estate

Ordinary income
Extraordinary income
Gain on sales of non-current assets

43Gain on sale of investment securities
Other

338
171

101
65

Total extraordinary income

514

170

6
-

0
135

Impairment loss
Loss due to temporary closing

2
574

20
-

Other

14

7

Extraordinary losses
Loss on retirement of non-current assets
Gain on sale of investment securities

597

164

Income before income taxes

Total extraordinary losses

2,495

2,219

Income taxes―current
Income taxes―deferred

273
(203)

603
(420)

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

6

69

183

2,426

2,035

(4)

(28)

2,431

2,063

Quarterly Consolidated statements of comprehensive income
Consolidated cumulative first quarter

Net income
Other comprehensive income

Consolidated cumulative
first quarter ofprevious fiscal year
(March 1,2021 to May 31,
2021)
2,426

(Million yen)
Consolidated cumulative
first quarter ofcurrent fiscal year
(March 1,2022 to May 31,
2022)
2,035

(22)
451

352
206

21

37

10

(27)

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

460

569

Comprehensive income

2,887

2,605

Total comprehensive income attributable to:
Owners of parent

2,860

2,600

26

4

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 1,917 million yen; cost of sales decreased by 110 million yen; selling, general,and administrative expenses increased by 2,066 million yen; and operating income, ordinary income, and income before
income taxes each decreased by 37 million yen during the first 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 first 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 first quarter is immaterial.

Change of accounting estimate
Valuation Criteria for Inventories
The Company has adopted a valuation criteria for inventories based on a certain devaluation rate determined inaccordance with the period since production or purchase. The Company’s balance sheet amount is based on thedevalued book value. While we were affected by the expansion of covid-19, we've changed the sales policy and holded
down purchase and sales cost and along with that, we tried to improve the portion of the proper sales. Consequently,
the existing write-down rate deviates from that which would have been applied if the latest sales results had beenreflected. We therefore decided to reflect the latest sales results in the write-down rate that evaluates the book value
effective from second quarter of previous fiscal year. The change in the estimation method was made to reflect decline
in inventory-related profitability more appropriately in the Company’s financial position and operating results. As aresult of this change, the cost of sales decreased by ¥414 million in this fiscal year. Consequently, operating income,ordinary income, and income before income taxes increased by the same amount, respectively.

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

9

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 ¥235 million for 503,000 shares.
iii. Carrying Value of Debt Finance Posted Using the Gross Price Method
As of February 28, 2022: ¥311 million and as of May 31, 2022: ¥311 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 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 Clothing 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 first quarter of previous fiscal year (March 1,2021 to May 31, 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

33,1291,072

34,201

13

34,215

26

161

187

(187)

―

33,155

1,233

34,389(174)

34,215

2,523

(22)

2,500

(227)

2,273

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

1. Other, which doesn’t belong to respective reportable segments, includes synthetic resin-related, store design andmanagement and so on.
2. Segment income (loss) adjustment of (227) million yen is transaction offsets among consolidated companies.
3. Segment income (loss) 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
None

A significant change in the amount of goodwill
None

A significant gain from negative goodwill
None

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1. Consolidated cumulative first quarter of current fiscal year (March 1,2022 to May 31, 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

36,754

1,356

38,11011

38,122

26

142

168

(168)

―

36,7801,498

38,278(156)

38,122

1,915

60

1,976

(372)

1,603

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

1. Other, which doesn’t belong to respective reportable segments, includes synthetic resin-related, store design andmanagement and so on.
2. Segment income (loss) adjustment of (372) million yen is transaction offsets among consolidated companies.
3. Segment income (loss) 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 1,917 million yen and decreased by 37 million yen, respectively, in the first quarterof the current consolidated fiscal year. The impact on "other" is insignificant.
(3) Goodwill or impairment loss in non-current assets by reportable segments

Important impairment loss in non-current assets
None

A significant change in the amount of goodwill
None

A significant gain from negative goodwill
None13