May 10, 2018

Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2018
[Japanese GAAP]
Company name: AOKI Holdings Inc.
Listings: TSE First Section
Stock code:
8214
URL: http://www.aoki-hd.co.jp/
Representative:
Akihiro Aoki, President
Contact:
Haruo Tamura, Executive Vice President
Tel: +81-45-941-1388
Scheduled date of Annual General Meeting of Shareholders:June 27, 2018
Scheduled date of filing of Annual Securities Report:
June 28, 2018
Scheduled date of payment of dividend:
June 6, 2018
Preparation of supplementary materials for financial results:
Yes
Holding of financial results meeting:Yes (for institutional investors and analysts)
Note: The original disclosure in Japanese was released on May 10, 2018 at 14:15 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2018 (April 1, 2017 – March 31, 2018)(1) Consolidated results of operations
Sales

Operating profit

Million yen%
Million yen%
FY3/18
198,4172.3
14,8642.9
FY3/17
194,046
2.9
14,447(18.8)
Note: Comprehensive income (million yen) FY3/18: 7,504 (up 1.4%)(Percentages represent year-on-year changes)
Profit attributable toOrdinary profit
owners of parent
Million yen%
Million yen%
14,003
0.8
7,377
0.3
13,895(21.2)
7,355(24.3)
FY3/17: 7,400 (down 17.0%)

Net income per
Diluted net income
Return on equity
share
per share
Yen
Yen%
FY3/1884.87
5.1
FY3/1783.38
5.1
Reference: Equity in income of affiliates (million yen)
FY3/18: -Ordinary profit on
total assets
%
5.9
6.0
FY3/17: -Operating profit to
sales
%
7.5
7.4

(2) Consolidated financial position
Total assets
Million yen
As of Mar. 31, 2018
239,068
As of Mar. 31, 2017234,681
Reference: Shareholders’ equity (million yen)

Net assets
Equity ratio
Net assets per share
Million yen%
Yen
146,52861.3
1,691.70
143,906
61.3
1,648.44
As of Mar. 31, 2018:
146,440
As of Mar. 31, 2017: 143,818(3) Consolidated cash flow position
Cash flows fromoperating activities
Million yen
21,703
18,628

FY3/18
FY3/17

Cash flows frominvesting activities
Million yen(8,855)(10,582)

Cash flows fromfinancing activities
Million yen(9,280)(6,998)Cash and cash equivalents
at end of period
Million yen
32,17528,608

2. Dividends
Dividend per share

Dividend payout Dividend on
ratio
equity1Q-end2Q-end3Q-endYear-end
Total(consolidated) (consolidated)
Yen
Yen
Yen
Yen
Yen
Million yen%%
FY3/17
21.00
22.00
43.00
3,768
51.6
2.7
FY3/18
22.00
22.00
44.00
3,815
51.8
2.6
FY3/19 (forecasts)
29.00
31.00
60.00
70.2
Note: Breakdown of 2Q-end dividends for FY3/19 (forecasts): Ordinary dividends: 22.00 yen; Commemorative dividends: 7.00 yen
Breakdown of Year-end dividends for FY3/19 (forecasts): Ordinary dividends: 23.00 yen; Commemorative dividends: 8.00 yen
For details, please see “Notice of Commemorative Dividend to Celebrate 60th Founding Anniversary” released the same day.
Total
dividends

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2019 (April 1, 2018 – March 31, 2019)
Sales
Full year

Million yen
199,100

Operating profit%
0.3

Million yen
15,000Ordinary profit%
Million yen
0.9
13,750%(1.8)(Percentages represent year-on-year changes)
Profit attributable to
Net income per shareowners of parent
Million yen
%
Yen
7,400
0.3
85.49

* Notes(1) Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None
(2) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others:None2) Changes in accounting policies other than 1) above:None3) Changes in accounting-based estimates:

Yes

4) Restatements:

None

Note: Please refer to “3. Consolidated Financial Statements and Notes, (5) Notes to Consolidated Financial Statements” onpage 13 for further information.

(3) Number of shares outstanding (common shares)
1) Number of shares outstanding (including treasury stock) at the end of the period
As of Mar. 31, 2018:

90,649,504 shares

As of Mar. 31, 2017:

90,649,504 shares

As of Mar. 31, 2017:

3,404,290 sharesFiscal year ended Mar. 31, 2017:88,210,968 shares

2) Number of shares of treasury stock at the end of the period
As of Mar. 31, 2018:

4,085,322 shares

3) Average number of shares outstanding during the period
Fiscal year ended Mar. 31, 2018:

86,920,380 shares

Note 1: This financial report is not subject to audit by certified public accountants or auditing firms.
Note 2: Cautionary statement with respect to forecasts and other matters
Cautionary statement with respect to forward-looking statements
Forecasts and forward-looking statements in these materials are based on assumptions judged to be valid and information
available to the Company at the time the materials were created. These materials are not promises by the Company regarding
future performance. Actual performance may differ significantly from these forecasts for a number of reasons. Please refer to “1.
Overview of Results of Operations, etc., (4) Outlook” on page 4 of the attachments regarding preconditions or other related
matters for the forecast shown above.
Disclosure of the information meeting materials
The Company plans to hold a financial results meeting for institutional investors and analysts on Friday, May 25, 2018.
Materials to be distributed at this event will be available on the Company’s website immediately thereafter.

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

Contents of Attachments
1. Overview of Results of Operations, etc.

2(1) Results of Operations

2(2) Financial Position

3(3) Cash Flows3(4) Outlook

4

2. Basic Approach for the Selection of Accounting Standards

5

3. Consolidated Financial Statements and Notes

6(1) Consolidated Balance Sheet

6(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

8

Consolidated Statement of Income

8

Consolidated Statement of Comprehensive Income

9(3) Consolidated Statement of Changes in Shareholders’ Equity

10(4) Consolidated Statement of Cash Flows

12(5) Notes to Consolidated Financial Statements

13

Going Concern Assumption

13

Changes in Accounting-based Estimates

13

Notes to Consolidated Balance Sheet

13

Notes to Consolidated Statement of Income

14

Notes to Consolidated Statement of Comprehensive Income

15

Notes to Consolidated Statement of Changes in Shareholders’ Equity

15

Notes to Consolidated Statement of Cash Flows17

Segment and Other Information

17

Per Share Information

21

Subsequent Events

21

1

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

1. Overview of Results of Operations, etc.
(1) Results of Operations
In the fiscal year that ended on March 31, 2018, the Japanese economy was in a moderate recovery phase ascorporate earnings and employment conditions continued improving. Consumer spending was firm and recovered
gradually, but consumers still want to hold down spending mainly because of concerns about growth in theirexpenses in the future. This environment, along with uncertainty about overseas events, makes the outlook for theJapanese economy unclear. In this environment, the AOKI Group implemented various measures in each businesssegment as discussed below. As a result, business performance in the fiscal year under review is as follows:
Sales
Operating profit
Ordinary profit
Profit attributable to owners of parent

198,417 million yen
14,864 million yen
14,003 million yen
7,377 million yen(up 2.3% year-on-year)(up 2.9% year-on-year)(up 0.8% year-on-year)(up 0.3% year-on-year)

Operating results by segment are as follows.
Fashion Business
There were various marketing activities at AOKI that targeted young people (“freshers”) who need apparel forcollege entrance or graduation ceremonies or for a new job following graduation. Advertising featured Sexy Zone, agroup of singers belonging to the same age segment, and three young actresses. There were advertisements
explaining the ease of movement and stretching of Rakudo Suits and advertisements featuring 360-degree Good
Looking Suits, which feature tasteful designs. For the CAFÉ SOHO line of mix-and-match jackets and pants, AOKI
increased the number of “set-up jacket and pants” variations. For working women in their 40s and 50s, AOKI has
developed and launched “set-up suits” (set of jacket, pants and skirts) with ease of movement and an attractive
silhouette. During the fiscal year, fourteen stores were opened and 13 stores were closed or relocated to improve theefficiency of AOKI’s operations. As a result, there were 574 stores at the end of the fiscal year, compared with 573
one year earlier.
ORIHICA conducted a number of promotional activities during the fiscal year. One was a Freshers Fair that used
upgraded video marketing such as videos available only on the Internet. There was also a Pre-School Ceremony Fair
to give parents ideas for coordinated apparel to wear at ceremonies to mark the beginning or completion of a child’snursery school or kindergarten term. Six new stores were opened, and 14 were closed to improve the efficiency ofoperations. As a result, there were 137 stores at the end of the fiscal year compared with 145 one year earlier.
Sales in this segment increased 0.2% to 118,455 million yen and operating profit increased 4.4% to 8,526 million
yen due to strong sales during the “freshers” selling season and decrease in the cost of major remodeling projects in
FY3/17.
Anniversaire and Bridal Business
ANNIVERSAIRE INC. operates guesthouse-style wedding and reception facilities. To attract more customers, thiscompany conducted marketing activities that emphasized the strengths of its guesthouses and clearly communicatedthe distinctive concepts of these facilities. There were also marketing initiatives using social networking services. In
addition, marketing for the Proposal Plan, a new channel for attracting customers, was upgraded in order to makemore people aware of ANNIVERSAIRE. Enhancing the public’s image of the ANNIVERSAIRE brand was anothergoal. A number of locations were remodeled during the fiscal year including two wedding and reception facilities in
MINATO MIRAI YOKOHAMA.
Due to an increase in the number of couples married at ANNIVERSAIRE wedding facilities, sales increased 1.2% to27,173 million yen and operating profit increased 1.7% to 2,809 million yen.
Karaoke Facility Operations Business
The karaoke business of VALIC Co., Ltd. purchased karaoke systems using the most advanced technology to
reinvigorate existing karaoke locations. Measures to offer customers greater convenience included reliable Wi-Fi
2

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

connections and a digital system for placing orders for food. There were many activities to make existing locations
more appealing, notably the remodeling of 25 locations to meet the increasingly diverse needs of customers. Six
karaoke facilities were opened during the fiscal year, while 19 were closed or relocated to improve operating
efficiency or to convert a karaoke facility into a café complex. As a result, there were 172 karaoke facilities at theend of the fiscal year compared with 185 one year earlier.
Sales increased 0.1% to 18,691 million yen. Due to an increase in the cost of sales caused by higher personnel andother expenses, operating profit decreased 13.8% to 765 million yen.
Café Complex Operations Business
The café complex business of VALIC Co., Ltd. took numerous actions to provide services that make cafés more
appealing. Examples include limited-time-only menu items, such as a Snack Fair, and providing virtual reality tocustomers at all cafés. To reinvigorate existing cafés, 40 cafés were remodeled mainly by adding more sections
exclusively for women and improving the configuration of booths. VALIC opened 22 locations and closed nine toimprove operating efficiency. As a result, there were 359 café complexes at the end of the fiscal year compared with
346 at the end of the previous fiscal year.
Sales increased 12.8% to 34,129 million yen due to contributions from new cafés, and operating profit increased
9.4% to 2,071 million yen.
(2) Financial Position
Balance sheet position
Total assets at the end of the fiscal year under review increased 4,387 million yen from the end of the previous fiscal
year to 239,068 million yen.
Current assets increased 5,362 million yen from the end of the previous fiscal year. There were increases of 3,567
million yen in cash in hand and in banks, and 1,151 million yen in accounts receivable-trade because the end of the
fiscal year was a bank holiday. Fixed assets decreased 975 million yen from the end of the previous fiscal year as
intangible fixed assets decreased 504 million yen due to amortization and other factors and leasehold deposit
decreased 455 million yen due to return of deposits and other factors.
Current liabilities increased 1,552 million yen from the end of the previous fiscal year. There were increases of 989
million yen in accrued income taxes, 652 million yen in accounts payable-trade resulting from an increase inprocurement, and 625 million yen in accounts payable-other, while there was a decrease of 1,500 million yen incurrent portion of long-term debt. Long-term liabilities increased 212 million yen. It was mainly due to increases of
519 million yen in asset retirement obligations mainly caused by changes in accounting-based estimates and 177
million yen in lease obligations, while there was a decrease of 650 million yen in long-term debt due to repayments
and other factors.
Net assets increased 2,622 million yen from the end of the previous fiscal year. There was an increase of 3,546
million yen in retained earnings due to a profit attributable to owners of parent and dividend from surplus, and anincrease of 1,051 million yen in treasury stock due to the purchase.
(3) Cash Flows
Cash flow position(Millions of yen)
FY3/18

FY3/17
Cash flows from operating activities

18,628Cash flows from investing activities(10,582)(8,855)

Cash flows from financing activities(6,998)(9,280)

Increase (decrease) in cash and cash equivalents

1,047

3,567

21,703

Cash and cash equivalents at beginning of period

27,56028,608Cash and cash equivalents at end of period

28,60832,175

3

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

Cash and cash equivalents at the end of the fiscal year under review increased 3,567 million yen from the end of theprevious fiscal year to 32,175 million yen mainly due to decreases in acquisition of tangible fixed assets and income
taxes paid.
Net cash provided by operating activities increased 3,074 million yen to 21,703 million yen on a year-on-year basis.
The principal factors were profit before income taxes of 11,906 million yen, depreciation and amortization of 8,459
million yen, and impairment loss of 2,078 million yen, while there was income taxes paid of 3,774 million yen (thenet of income tax payments and refunds).
Net cash used in investing activities decreased 1,726 million yen to 8,855 million yen on a year-on-year basis. Thiswas mainly due to the payments of 6,942 million yen for the acquisition of tangible fixed assets for capital
investment, 626 million yen in acquisition of intangible fixed assets, and leasehold and guarantee deposits of 488
million yen.
Net cash used in financing activities increased 2,282 million yen to 9,280 million yen on a year-on-year basis. Thiswas mainly due to scheduled repayment of long-term debt of 4,150 million yen, repayments of lease obligations of
2,245 million yen, payments for purchase of treasury stock of 1,051 million yen, and cash dividends paid of 3,833
million yen, while there were proceeds from long-term debt of 2,000 million yen for capital expenditure.
(4) Outlook
In the fiscal year ending on March 31, 2019, we expect the Japanese economy to continue to recover slowly. But theoutlook remains uncertain primarily because of overseas events, and economic events and exchange rate movements.
The AOKI Group will use a variety of actions to respond to diversifying consumer needs as well as to operate witheven greater efficiency. There will also be many initiatives to revitalize existing locations and build a more powerfulinfrastructure.
In the Fashion Business, AOKI will continue remodeling stores, developing new products and expanding the line-up
of woman’s apparel to invigorate existing stores. Another goal is strengthening operations of Size MAX stores thatspecialize in plus-size apparel and increasing e-commerce sales. ORIHICA will continue to strengthen its lineup of
merchandise and further enhance profitability by boosting operating efficiencies. We plan to open approximately
five stores in the Fashion Business during the fiscal year ending on March 31, 2019.
In the ANNIVERSAIRE and Bridal Business, our goals are to make the ANNIVERSAIRE brand more powerful andoffer more wedding services by using activities that emphasize the strengths of our wedding and reception facilities
and clearly communicate the central concept for ANNIVERSAIRE. Another goal is more progress with improving
operating efficiency.
In the Karaoke Facility Operations Business and Café Complex Operations Business, operating facilities that reflect
the wishes of customers is one of our priorities. We will also remodel or convert some facilities to upgrade
operations in order to make them even more attractive and profitable. In total, we plan to open six new karaoke
facilities and café complexes.
By implementing all of these measures, we expect our performance to improve in the coming fiscal year.
Business segment forecasts are based on the following assumptions for changes in existing-store sales.
1Q
Fashion

2Q
0.5

1H
1.6

3Q
0.9

Anniversaire and Bridal (Note)

4Q
1.0

(%)
Full year

2H
1.9

(2.4)

1.5

1.3

0.2

(1.1)

Karaoke Facility Operations

(0.3)

0.2

0.0

0.1

3.2

1.6

0.8

Café Complex Operations

0.0

0.4

0.2

0.2

2.8

1.5

0.8

Note: The percentages for the ANNIVERSAIRE and Bridal business are expected changes in the number of couples married.

4

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

Our business segment forecasts are as follows.
Business segment forecasts for the fiscal year ending March 31, 2019
Anniversaireand Bridal

Karaoke Facility
Operations

Café Complex
Operations

Consolidated

119,150

27,20017,76035,040199,100

YoY change (%)

100.6

100.1

95.0

102.7

100.3

Segment profit (Millions of yen)

8,950

2,600

770

2,080

15,000YoY change (%)

105.0

92.6

100.6

100.4

100.9

Fashion
Sales (Millions of yen)

Note: Segment profit is operating profit. The total segment profits differ from consolidated operating profit because of
consolidation adjustments.

2. Basic Approach for the Selection of Accounting Standards
The AOKI Group’s operations are located in Japan and the Group has little or no need of raising funds in overseas
markets. Moreover, the percentage of shares held by foreign shareholders is relatively small. In view of the above
factors the Company currently uses Japanese accounting standards for its financial statements.
The Company will consider using International Financial Reporting Standards (IFRS) if considered necessary by the
future direction of the Group’s business development, the use of IFRS by other companies in Japan and otherfactors.

5

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet
FY3/17(As of Mar. 31, 2017)(Millions of yen)
FY3/18(As of Mar. 31, 2018)

AssetsCurrent assets
Cash in hand and in banks

28,60832,175

Accounts receivable-trade

10,508

11,659Inventories*1

26,905*1

26,007

Deferred income tax assets

1,792

2,087

Other current assets

7,181

8,431

Allowance for doubtful accounts
Total current assets

(32)

(35)

74,96380,325

Fixed assets
Tangible fixed assets
Buildings and structures

130,359

132,709

Accumulated depreciation(68,790)(72,124)

Buildings and structures, net

61,56860,585

Machinery, vehicles, tools, furniture and fixtures

16,094

16,477

Accumulated depreciation(8,121)(8,765)

Machinery, vehicles, tools, furniture and fixtures, net

7,973

7,712

Land

*2

Lease assets

36,953*2

36,952

13,464

14,135

Accumulated depreciation(8,600)(8,982)

Lease assets, net

4,864

5,153

Construction in progress

327

1,265

Total tangible fixed assets

111,686

111,669

6,301

5,796

Intangible fixed assets
Investments and other assets
Investment securities

*3

3,978

*3

4,361

Guarantee deposits

8,259

7,973

Leasehold deposit

21,066

20,610

Deferred income tax assets

6,564

6,490

Other investments and other assets

1,902

1,890

Allowance for doubtful accounts

(40)

(50)

Total investments and other assets
Total fixed assets
Total assets

6

41,73041,276

159,718

158,742

234,681

239,068

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

(Millions of yen)
FY3/17(As of Mar. 31, 2017)

FY3/18(As of Mar. 31, 2018)

Liabilities
Current liabilities
Accounts payable-trade

19,15919,812Current portion of long-term debt

4,150

2,650

Lease obligations

1,852

1,864

Accounts payable-other

5,259

5,885

Accrued income taxes

1,603

2,593

Accrued bonuses for employees

1,647

1,978

89

123

Other current liabilities

5,434

5,841

Total current liabilities

39,19740,750Long-term debt

37,12536,475

Lease obligations
Accrued retirement benefits for directors and statutory
auditors
Accrued costs for customer point program

3,702

3,880

1,949

2,018

1,069

1,059

Net defined benefit liability

976

1,054

Asset retirement obligations

5,513

6,032

Other long-term liabilities

1,241

1,269

Total long-term liabilities

51,57751,78990,77492,539Common stock

23,282

23,282

Capital surplus

27,833

27,833Retained earnings

96,753

100,299

Treasury stock(4,325)(5,376)

Total shareholders’ equity

143,544

146,039

Unrealized gain on securities

576

588

Remeasurements of defined benefit plans

(302)

(187)

Total accumulated other comprehensive income

274

401

87

87

Accrued bonuses for directors and statutory auditors

Long-term liabilities

Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income

Stock acquisition rights
Total net assets
Total liabilities and net assets

7

143,906

146,528

234,681

239,068

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)(Millions of yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)

Sales

194,046

198,417

Cost of sales

107,730

111,552

Gross profit

86,31586,864

Selling, general and administrative expenses*1

Operating profit

71,868*1

14,44772,00014,864Non-operating profit
Interest income

97

96

Dividend income

105

72

Rental income on real estate

605

571

Other

261

168

1,070

908

315

328

Total non-operating profit
Non-operating expenses
Interest expenses
Expenses on sub-leased real estate

528

496

Loss on disposal of fixed assets

328

263

Loss on cancellation of lease agreements

176

211

Other

273

470

Total non-operating expenses
Ordinary profit

1,621

1,769

13,89514,003Extraordinary gains
Gain on sale of fixed assets-

20

Gain on sales of investment securities

545-

Total extraordinary gains

545

20

-

38

Extraordinary losses
Loss on sales of fixed assets
Impairment loss

*2

Loss on disaster

2,834
102

Total extraordinary losses

*2

2,078
-

2,937

2,117

Profit before income taxes

11,504

11,906

Current income taxes

4,746

4,822

Deferred income taxes

(597)

(293)

Total income taxes

4,149

4,528

Profit

7,355

7,377

Profit attributable to owners of parent

7,355

7,377

8

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

Consolidated Statement of Comprehensive Income
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)(Millions of yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)

7,355

7,377

(36)

11

ProfitOther comprehensive income
Unrealized gain on securities
Remeasurements of defined benefit plans, net of tax

81

Total other comprehensive income*1

Comprehensive income

44

115
*1

126

7,400

7,504

7,400

7,504

-

-

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

9

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

(3) Consolidated Statement of Changes in Shareholders’ Equity
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)(Millions of yen)
Shareholders’ equity

Balance at the beginning ofcurrent period
Cumulative effects of changes inaccounting policies
Restated balanceCommon stock

Capital surplus

23,282

27,833Retained earnings Treasury stock
92,929(1,436)110
23,282

27,83393,039Total
shareholders’equity142,609110(1,436)

142,719

Changes of items during period
Dividend from surplus(3,641)(3,641)

Profit attributable to owners ofparent

7,355

7,355

Purchase of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at the end of current
period(2,888)(2,888)

-

-

3,713

(2,888)824

23,282

27,83396,753(4,325)

143,544

Accumulated other comprehensive income
Remeasurements
Unrealized gainof defined benefit
on securities
plans
Balance at the beginning ofcurrent period
Cumulative effects of changes inaccounting policies
Restated balance

612

(383)

Total accumulated
othercomprehensive
income229

StockacquisitionrightsTotal net assets

87

142,926
110

612

(383)

229

87

143,036

Changes of items during period
Dividend from surplus(3,641)

Profit attributable to owners ofparent

7,355

Purchase of treasury stock(2,888)Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at the end of current
period

(36)

81

44

-

44

(36)

81

44

-

869

576

(302)

274

87

143,906

10

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)(Millions of yen)
Shareholders’ equity

Balance at the beginning ofcurrent period
Cumulative effects of changes inaccounting policies
Restated balanceCommon stock

Capital surplus

23,282

27,833Retained earnings Treasury stock
96,753(4,325)

Total
shareholders’equity143,544-

23,282

27,83396,753(4,325)

143,544

Changes of items during period
Dividend from surplus(3,830)(3,830)

Profit attributable to owners ofparent

7,377

7,377

Purchase of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at the end of current
period

(1,051)(1,051)

0

0

0

-

0

3,546

(1,051)

2,495

23,282

27,833

100,299(5,376)

146,039

Accumulated other comprehensive income
Remeasurements
Unrealized gainof defined benefit
on securities
plans
Balance at the beginning ofcurrent period
Cumulative effects of changes inaccounting policies
Restated balance

576

(302)

Total accumulated
othercomprehensive
income274

StockacquisitionrightsTotal net assets

87

143,906
-

576

(302)

274

87

143,906

Changes of items during period
Dividend from surplus(3,830)

Profit attributable to owners ofparent

7,377

Purchase of treasury stock(1,051)

Disposal of treasury stock0

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

11

115

126

-

126

11

115

126

-

2,622

588

(187)

401

87

146,528

11

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

(4) Consolidated Statement of Cash Flows
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)(Millions of yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)

Cash flows from operating activities
Profit before income taxes

11,504

11,906

Depreciation and amortization

8,032

8,459

Impairment loss
Increase (decrease) in accrued retirement benefits for
employees
Increase (decrease) in accrued retirement benefits for
directors and statutory auditors
Increase (decrease) in accrued costs for customer point
programInterest and dividend income

2,834

2,078

245

255

103

68

55

(10)

(202)

(168)

Interest expenses

315

328

Loss (gain) on sales of investment securities

(545)

-

(1,070)(1,151)930

897

Decrease (increase) in accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in accounts payable-trade

1,137

652

Increase (decrease) in accrued consumption taxes

(284)

1,103

Other

1,414

1,254

Subtotal

24,46925,674159

130Interest and dividend income received
Interests paid

(314)

(326)

Income taxes paid

(6,922)(4,670)

Income taxes refund

1,236

895

Net cash provided by (used in) operating activities

18,62821,703

Payments for acquisition of tangible fixed assets(10,487)(6,942)

Payments for acquisition of intangible fixed assets

(550)

(626)

Payments for leasehold and guarantee deposits
Proceeds from collection of leasehold and guarantee
deposits
Proceeds from sales of investment securities(1,545)

(488)

490

536

2,079

-

Net decrease (increase) in short-term loans receivable

(47)

(440)

Net decrease (increase) in trust beneficiary rights

(297)

(204)

Other

(222)

(688)

(10,582)(8,855)

Cash flows from investing activities

Net cash used in investing activities
Cash flows from financing activities
Proceeds from long-term debt

5,000

2,000

Repayments of long-term debt

(4,050)(4,150)

Repayments of lease obligations(1,904)(2,245)

Payments for purchase of treasury stock(2,888)(1,051)Dividends paid

(3,645)(3,833)Other
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents

490

0(6,998)(9,280)0(0)Increase (decrease) in cash and cash equivalents

1,047

3,567

Cash and cash equivalents at beginning of period

27,56028,608Cash and cash equivalents at end of period

28,60832,175

12

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018(5) Notes to Consolidated Financial Statements
Going Concern Assumption
No reportable information.
Changes in Accounting-based Estimates
Changes in Accounting-based Estimates for Asset Retirement Obligations
The Company has recorded asset retirement obligations for returning leased space to its original condition inassociation with real estate leasing contracts for stores and other properties. According to the store closure and otherinformation, the Company changed its accounting-based estimates for restoration expenses which will be required
for store closures. As a result of this change, an increase of 525 million yen are added to asset retirement obligations
before the change. The effect of this change in profit/loss is insignificant.
Notes to Consolidated Balance Sheet*1. Breakdown of inventories(Millions of yen)
FY3/17(As of Mar. 31, 2017)

Merchandise

26,11025,270794

736

26,90526,007

Raw materials and supplies
Total

FY3/18(As of Mar. 31, 2018)*2. Collateralized assets(Millions of yen)
FY3/18(As of Mar. 31, 2018)

FY3/17(As of Mar. 31, 2017)
Land

284

*3. The following items are applicable to non-consolidated subsidiaries and affiliates(Millions of yen)
FY3/18(As of Mar. 31, 2018)

FY3/17(As of Mar. 31, 2017)
Investment securities (stocks)514

4. Guarantee liabilities(1) The Company guarantees following bank loans for a company that is not consolidated.
FY3/17(As of Mar. 31, 2017)
AOKI HOLDINGS N.Y. INC.

284

323

514

(Millions of yen)
FY3/18(As of Mar. 31, 2018)276(2) The Company guarantees the following rent payments for the remaining terms of rental contracts of a company
that is not consolidated.
(Millions of yen)
FY3/18(As of Mar. 31, 2018)

FY3/17(As of Mar. 31, 2017)
Sukit Labo Inc.

-

22

5. The Company has current account overdraft agreements with major financial institutions in order to raise funds
efficiently. The balance of unused credit lines under these agreements as of the end of the fiscal year is as follows.
(Millions of yen)
FY3/17(As of Mar. 31, 2017)
Current account overdraft

FY3/18(As of Mar. 31, 2018)

25,000Credit used
Credit available

13

26,000--25,00026,000AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

Notes to Consolidated Statement of Income*1. Major items of selling, general and administrative expenses(Millions of yen)

FY3/17
FY3/18(Apr. 1, 2016 – Mar. 31, 2017) (Apr. 1, 2017 – Mar. 31, 2018)
Advertising expenses

12,997

13,079

Salaries and bonuses

18,766

18,976

Provision of accrued bonuses for employees

1,372

1,670

Provision of accrued bonuses for directors and statutory auditors

89

122

Retirement benefit expenses
Provision of accrued retirement benefits for directors andstatutory auditors
Welfare expense

746

818

134

112

3,768

3,850

Rents

15,403

15,251

Depreciation and amortization

3,307

3,480

*2. Impairment loss
The Group recognized an impairment loss on the following groups of assets.
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)
Use

Item

Location

Operating stores

Buildings and structures, others

Ueda City, Nagano, etc.

Subleasing stores

Buildings and structures, others

Nabari City, Mie, etc.

The Group uses individual stores and idle asset items to group its assets.
Book value was impaired to recoverable value, and the resulting impairment loss (2,834 million yen) was recognized
as an extraordinary loss, for operating stores and subleasing stores set to be closed, rebuilt or expected to remain in
the red due to changes in conditions at the store location and other factors.
Breakdown of impairment losses: operating stores 2,833 million yen (including buildings and structures 2,344
million yen and others 488 million yen), and subleasing stores 0 million yen (buildings and structures 0 million yen
and others 0 million yen).
The recoverable value of this category of assets is measured by net sales value or utility value. The net sales value isbased on the appraisal of a real estate appraiser. The utility value is calculated by the discounted cash flow method.
A discount rate of between 4.9% and 5.5% is used for calculating the utility value.
FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
Use

Item

Location

Operating stores

Buildings and structures, others

Toyama City, Toyama, etc.

Idle assets

Land

Joetsu City, Niigata

The Group uses individual stores and idle asset items to group its assets.
Book value was impaired to recoverable value, and the resulting impairment loss (2,078 million yen) was recognized
as an extraordinary loss, for idle assets whose recoverable value had fallen below book value, and operating stores
set to be closed, rebuilt or expected to remain in the red due to changes in conditions at the store location and otherfactors.
Breakdown of impairment losses: operating stores 2,078 million yen (including buildings and structures 1,673
million yen and others 405 million yen) and idle assets 0 million yen (land 0 million yen).
The recoverable value of this category of assets is measured by net sales value or utility value. The net sales value isbased on roadside land prices. The utility value is calculated by the discounted cash flow method. A discount rate of
between 5.3% and 5.7% is used for calculating the utility value.

14

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

Notes to Consolidated Statement of Comprehensive Income*1. Re-classification adjustments and tax effect with respect to other comprehensive income(Millions of yen)

FY3/17
FY3/18(Apr. 1, 2016 – Mar. 31, 2017) (Apr. 1, 2017 – Mar. 31, 2018)
Unrealized gain on securities
Amount incurred during the year
Re-classification adjustments

(46)
(33)

22
-

Before tax effect adjustments
Tax effect

(79)
43

22
(11)

Unrealized gain on securities

(36)

11

(52)
175

18
158

Before tax effect adjustments
Tax effect

123
(41)

176
(61)

Remeasurements of defined benefit plans, net of tax

81

115

44

126

Remeasurements of defined benefit plans, net of tax
Amount incurred during the year
Re-classification adjustments

Total other comprehensive income

Notes to Consolidated Statement of Changes in Shareholders’ Equity
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)
1. Type of share and number of outstanding shares
Type of share
Common shares (Thousand shares)

Number of shares
as of Apr. 1, 2016
90,649

Increase-

Number of shares
as of Mar. 31, 2017
90,649-Number of shares
as of Mar. 31, 2017
3,404

Decrease-

2. Type and number of shares of treasury stock
Type of share
Common shares (Thousand shares)

Number of shares
as of Apr. 1, 2016
984

Increase

Decrease

2,419

Note: Increase in the number of outstanding shares (Thousand shares)
Purchase of treasury stock pursuant to the Board of Directors’ resolution on February 15, 2016: 2,182
Purchase of treasury stock pursuant to the Board of Directors’ resolution on February 9, 2017: 236
Purchase of odd-lot shares: 0

3. Items related to acquisition rights for new sharesCompany

Stock acquisition rights(itemized)

Number of shares under stock acquisition rights
Balance as ofType of shares(Thousand shares)
Mar. 31, 2017
under stockacquisition rights As of Apr. 1, Increase Decrease As of Mar. 31, (Millions of yen)
2017
2016

Reporting Stock acquisition rights by
Common905
905
87
company
way of stock options (2015)
sharesNote: Number of shares under stock acquisition rights: the number of shares assuming that all stock options have been exercised.

4. Dividends(1) Dividend payment
Resolution

Type of share

Board of Directors’ meetingon May 12, 2016
Board of Directors’ meetingon November 10, 2016

CommonsharesCommonsharesTotal amount of dividend(Millions of yen)

Dividend pershare (Yen)Record date

Effective date

1,793

20

Mar. 31, 2016

Jun. 8, 2016

1,848

21

Sep. 30, 2016

Dec. 5, 201615

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

(2) Dividends with a record date in the current fiscal year but an effective date in the following fiscal year
Resolution
Board of Directors’ meetingon May 11, 2017

Type ofshare
Commonshares

Source offunds
Retainedearnings

Total amount of dividend(Millions of yen)

Dividend pershare (Yen)

1,919

Recorddate

Effectivedate

22 Mar. 31, 2017 Jun. 7, 2017

FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
1. Type of share and number of outstanding shares
Type of share
Common shares (Thousand shares)

Number of shares
as of Apr. 1, 2017
90,649

Increase-

Number of shares
as of Mar. 31, 2018
90,6490

Number of shares
as of Mar. 31, 2018
4,085

Decrease-

2. Type and number of shares of treasury stock
Type of share
Common shares (Thousand shares)

Number of shares
as of Apr. 1, 2017
3,404

Increase

Decrease
681

Notes: 1. Increase in the number of outstanding shares (Thousand shares)
Purchase of treasury stock pursuant to the Board of Directors’ resolution on February 9, 2017: 363
Purchase of treasury stock pursuant to the Board of Directors’ resolution on January 31, 2018: 316
Purchase of odd-lot shares: 1
2. Decrease in the number of shares of treasury stock (Thousand shares)
Sales of odd-lot shares: 0

3. Items related to acquisition rights for new sharesCompany

Stock acquisition rights(itemized)

Type of shares Number of shares under stock acquisition rights
Balance as of(Thousand shares)
under stock
Mar. 31, 2018acquisition
As of Mar. 31, (Millions of yen)
As of Apr. 1,
Increase Decreaserights2018
2017

Reporting Stock acquisition rights by
Common905
905
87
company
way of stock options (2015)
sharesNote: Number of shares under stock acquisition rights: the number of shares assuming that all stock options have been exercised.

4. Dividends(1) Dividend payment
Resolution

Type of share

Board of Directors’ meetingon May 11, 2017
Board of Directors’ meetingon November 9, 2017

CommonsharesCommonsharesTotal amount of dividend(Millions of yen)

Dividend pershare (Yen)Record date

Effective date

1,919

22

Mar. 31, 2017

Jun. 7, 2017

1,911

22

Sep. 30, 2017

Dec. 5, 2017

(2) Dividends with a record date in the current fiscal year but an effective date in the following fiscal year
Resolution
Board of Directors’ meetingon May 10, 2018

Type ofshare
Commonshares

Source offunds
Retainedearnings

Total amount of dividend(Millions of yen)
1,904

16

Dividend pershare (Yen)Recorddate

Effectivedate

22 Mar. 31, 2018 Jun. 6, 2018

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

Notes to Consolidated Statement of Cash Flows*1. Reconciliation of cash and cash equivalents of the statement of cash flows and account balances of balance sheet
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)(Millions of yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)

Cash in hand and in banks

28,60832,175

Cash and cash equivalents

28,60832,175

FY3/17(Apr. 1, 2016 – Mar. 31, 2017)(Millions of yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)

2,781

2,435

2. Significant non-cash transactions
Assets and obligations applicable to the finance lease transaction

Assets and obligations applicable to the finance leasetransaction

Segment and Other Information
Segment information
1. Overview of reportable segment
The Group defines reportable segments as businesses for which financial details can be compiled; the Board of
Directors will review this information on a periodic basis in order to assist with decisions about allocating resourcesand evaluating the performance.
AOKI Holdings, as a pure holding company, supports the businesses of the various companies that comprise theGroup, while each business company proposes and executes comprehensive strategies for the respective products
and services they offer in the domestic market.
The products and services of each business company comprise different segments. The four reportable segments are
the Fashion Business, the ANNIVERSAIRE and Bridal Business, the Karaoke Facility Operations Business, and the
Café Complex Operations Business. AOKI and ORIHICA are both included in one business segment, the Fashion
Business, because they fit all the conditions for grouping including similarities in economic characteristics andproduct content.
The Fashion Business plans and sells men’s and women’s wear; the ANNIVERSAIRE and Bridal Business operates
wedding halls; the Karaoke Facility Operations Business operates karaoke facilities; and the Café Complex
Operations Business provides relaxation space with magazines, comics, massage chairs, Internet access, etc.
2. Calculation methods for sales, profits/losses, assets, and other items for each reportable segment
The accounting treatment methods for reportable segments are generally the same as accounting principles andprocedures used for the preparation of the consolidated financial statements.
Profits for reportable segments are generally operating profit figures. Profits on and transfer amounts ofinter-segment transactions within the Group are based on current market prices.

17

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

3. Information related to sales, profits/losses, assets, and other items for each reportable segment
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)(Millions of yen)
Reportable segment

Amounts shown on
Adjustment
consolidated(Note 1)
financial statements(Note 2)

Anniversaireand Bridal

Karaoke
Facility
Operations

CaféComplexOperations

118,262

26,847

18,67130,264

194,046-

194,046

1

13

4

-

20

(20)

-

Fashion

Total

Sales
External sales
Inter-segment sales
and transfers
Total

118,264

26,86018,67630,264

194,066(20)

194,046

Segment profit

8,167

2,760

887

1,893

13,709737

14,447

Segment assets

111,083

41,604

14,112

26,565

193,365

41,315

234,681

2,599

1,779

1,225

1,876

7,481

436

7,917

5

-

21

5

32

-

32

5,970

549

1,834

5,849

14,204362

14,567

Other items
Depreciation andamortization
Amortization of goodwill
Increase in tangible
fixed assets andintangible fixed assets

Notes: 1. The above adjustments to segment profits are as follows.
(1) The 737 million yen adjustment to segment profit includes 4,459 million yen in elimination for inter-segment
transactions, and -3,721 million yen in company-wide costs that cannot be allocated to any specific reportablesegments. Company-wide costs mainly include administration expenses of the Company that cannot be attributed
to reportable segments.
(2) The 41,315 million yen adjustment to segment assets includes -32,723 million yen in elimination of the offsetting
receivables from subsidiaries, and company-wide assets of 74,038 million yen that cannot be allocated to any
specific reportable segments. Company-wide assets consist mainly of the Company’s land, building and structuresof the head office that cannot be attributed to reportable segments.
(3) The 362 million yen adjustment to an increase in tangible and intangible fixed assets mainly includes investment inbuilding and structures to be used by the Group.
2. Segment profit is adjusted to be consistent with operating profit on the consolidated statement of income.

18

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)(Millions of yen)
Reportable segment

Amounts shown on
Adjustment
consolidated(Note 1)
financial statements(Note 2)

Anniversaireand Bridal

Karaoke
Facility
Operations

CaféComplexOperations

118,442

27,157

18,687

34,129198,417-

198,417

13

15

4

-

32

(32)

-

118,455

27,173

18,691

34,129198,450(32)

198,417

Fashion

Total

Sales
External sales
Inter-segment sales
and transfers
Total
Segment profit

8,526

2,809

765

2,071

14,172691

14,864

Segment assets

112,819

41,161

13,287

28,837

196,105

42,962

239,068

2,768

1,653

1,232

2,260

7,915

433

8,348

0

-

15

1

16

-

16

2,831

390

1,738

3,825

8,786

1,267

10,053

Other items
Depreciation andamortization
Amortization of goodwill
Increase in tangible
fixed assets andintangible fixed assets

Notes: 1. The above adjustments to segment profits are as follows.
(1) The 691 million yen adjustment to segment profit includes 4,286 million yen in elimination for inter-segment
transactions, and -3,594 million yen in company-wide costs that cannot be allocated to any specific reportablesegments. Company-wide costs mainly include administration expenses of the Company that cannot be attributed
to reportable segments.
(2) The 42,962 million yen adjustment to segment assets includes -29,673 million yen in elimination of the offsetting
receivables from subsidiaries, and company-wide assets of 72,636 million yen that cannot be allocated to any
specific reportable segments. Company-wide assets consist mainly of the Company’s land, building and structuresof the head office that cannot be attributed to reportable segments.
(3) The 1,267 million yen adjustment to an increase in tangible and intangible fixed assets mainly includes investment
in building and structures related to extension and reconstruction of the head office.
2. Segment profit is adjusted to be consistent with operating profit on the consolidated statement of income.

Related information
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)
1. Information by product or service
This information is omitted because the same information is presented in segment information.
2. Information by region(1) Sales
No reportable information because there are no external sales outside Japan.
(2) Tangible fixed assets
No reportable information since the Company has no tangible fixed assets other than Japan.
3. Information by major client
This information is omitted because no external client accounts for more than 10% of sales on the consolidated
statement of income.
FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
1. Information by product or service
This information is omitted because the same information is presented in segment information.
2. Information by region
19

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

(1) Sales
No reportable information because there are no external sales outside Japan.
(2) Tangible fixed assets
No reportable information since the Company has no tangible fixed assets other than Japan.
3. Information by major client
This information is omitted because no external client accounts for more than 10% of sales on the consolidated
statement of income.
Information related to impairment losses on fixed assets for each reportable segment(Millions of yen)

FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)
Reportable segment
Anniversaire Karaoke Facility Café Complex
and Bridal
Operations
Operations

FashionImpairment losses

1,333

289

824

386

Eliminationor
corporate
Sub-total
2,833

Reportable segment

Impairment losses

Anniversaire Karaoke Facility Café Complex
and Bridal
Operations
Operations

866

2,834

(Millions of yen)

FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)

Fashion

0

Total

262

791

157

Eliminationor
corporate
Sub-total
2,078

0

Total
2,078

Information related to goodwill amortization and the unamortized balance for each reportable segment(Millions of yen)
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)
Reportable segment
Anniversaireand Bridal

FashionBalance at end of period0Karaoke Facility Café Complex
Operations
Operations

-

67

1

Elimination
Sub-total or corporate
68

-

Total
68

Note: Goodwill amortization is omitted because the same information is presented in segment information.
(Millions of yen)

FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
Reportable segment
Anniversaireand Bridal

FashionBalance at end of period-

Karaoke Facility Café Complex
Operations
Operations

-

38

-

Elimination
Sub-total or corporate
38

Note: Goodwill amortization is omitted because the same information is presented in segment information.

Information related to negative goodwill profits for each reportable segment
No reportable information.

20

-

Total
38

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2018

Per Share Information(Yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)

FY3/17(Apr. 1, 2016 – Mar. 31, 2017)
Net assets per share

1,648.44

1,691.70

Net income per share

83.38

84.87

Notes: 1. Diluted net income per share is not presented since the Company has no potential stock with dilutive effects.
2. The following is a reconciliation of net income per share

Item

FY3/17(Apr. 1, 2016 – Mar. 31, 2017)(Millions of yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)

7,355

7,377

-

-

7,355

7,377

88,21086,920Net income per share
Profit attributable to owners of parent
Net income not available to common stock
shareholders
Profit attributable to owners of parent applicable tocommon stock
Average number of common shares outstanding
during the period (Thousand shares)

Summary of potential stock not included in thecalculation of diluted net income per share since there
was no dilutive effect

Stock acquisition rights issued
pursuant to the Board of
Directors’ resolution on
November 18, 2015
Stock Acquisition Rights No. 5
Number of stock acquisitionrights: 9,050

Stock acquisition rights issued
pursuant to the Board of
Directors’ resolution on
November 18, 2015
Stock Acquisition Rights No. 5
Number of stock acquisitionrights: 9,050

3. The following is a reconciliation of net assets per share

Item(Millions of yen)
FY3/18(As of Mar. 31, 2018)

FY3/17(As of Mar. 31, 2017)

Total net assets

143,906

Deduction on total net assets

146,528

87

87

[87]

[87]

Net assets applicable to common shares

143,818

146,440

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

87,24586,564[of which stock acquisition rights]

Subsequent Events
Not applicable.

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

21