www.wacoalholdings.jp/en

WACOAL HOLDINGS
Integrated Report 2015

Integrated Report
発行日150831-DN-AT3
Printed in Japan2015

WACOAL HOLDINGSWe will contribute tosociety by helping women to
express their beauty.
The Calligraphy of
Wacoal Group Founder

Koichi Tsukamoto

Management Philosophy

OUR MISSION
We will contribute to society byhelping women to express their beauty.

Editorial Policy for This Report
In accordance with international norms for integrated
reporting, the Wacoal Group has been issuing
integrated reports since fiscal 2011 as part of its communication with shareholders and other investors.
This integrated report explains the Wacoal Group’s
value creation activities not only through financial
information but also through nonfinancial information
about unique, significant assets and other facets of
the Group’s business.
Further, the web site of Wacoal Holdings Corp.
includes a wide range of information about theGroup. We hope that referring to this integrated
report in conjunction with the web site will further
understanding of the Group. Going forward, we willcontinue pursuing an editorial policy that responds
to changes in reader expectations.

OUR VISION
We, the employees and management of Wacoal, will
maintain a refined corporate culture based on mutual
trust and will continually strive to makeWacoal Holdings web site:www.wacoalholdings.jp/en

the Company a global leader in the industry.

OUR VALUES
1 Create products loved by customers
Previous integrated reports (in IR Library):

2 Develop new products that meet the needs of the times

www.wacoalholdings.jp/en/ir/library/

3 Conduct business in a fair manner with a forward focus
4 Build a better Wacoal through better human resources
5 Fear not failure and boast not of success
The Wacoal Group’s Four Assets
This report defines the four assets that comprise the Wacoal Group’s unique enterprisevalue (For details, please see “Value Creation
System” on page 4.). The icons below show
which of these four assets each of the report’s
sections is focused on. Our goal is to further
readers’ understanding of how we grow assets
and sustain growth.

02

Financial assets

Physical assets

Trust-related
assetsOrganizational
assetsCONTENTS

P16
Special Feature 1:
Underpinning Wacoal’s Quality:
Mutual Trust Transcending Borders

P18
Special Feature 1:
Creating the Best: Every Stitch,
Millimeter, and Second Counts

P20
Special Feature 2:
Diversity Strategies that Boost
Enterprise Value

P38
Message from Top Management

04

Overview of the Wacoal Group30

CSR Activities

04

Value Creation System—Unseen Value that Intangible Assets Create —30

CSR Management

32

Pink Ribbon Activities Worldwide

06

The Wacoal Group’s Progress

34

Tsubomi School and Other Educational Activities

08

The Wacoal Group’s Products

34

Brassiere Recycling

10

Financial Highlights

35	Kyoto Costume Institute12

Looking at Wacoal by the Numbers

36

Environmental Conservation Activities

37

Overcoming the Earthquake Disaster

38

Message from Top Management

40

Management Foundation40

Directors and Audit & Supervisory Board Members

42

Corporate Governance

46

Financial Section

46

Management’s Discussion and Analysis

52

Consolidated Balance Sheets

54

Consolidated Statements of Income

14	‌Special Feature:
The Wacoal Group’s On-Site Capabilities
Special Feature 1:
On-Site Capabilities Supporting Quality
16

18

Underpinning Wacoal’s Quality:
Mutual Trust Transcending Borders—Vietnam Wacoal Realizes High Quality with Pride—
Creating the Best:
Every Stitch, Millimeter, and Second Counts— Manufacturing Only Hokuriku Wacoal Sewing Can Realize—

Special Feature 2:
Diversity Initiatives Heightening On-Site Capabilities
20

23

Diversity Strategies that Boost Enterprise Value— Toward a Wacoal Group in Which Everyone Works with Vitality —54	Consolidated Statements of Comprehensive Income
55

Consolidated Statements of Equity

Realizing Highly Productive Processes
by Advancing Diversity— Initiatives of Niigata Wacoal Sewing —56

Consolidated Statements of Cash Flows

24

Management Strategy

24

Eleven-Year Financial Summary

26

The Fiscal 2014–2016 Medium-Term Management Plan

28

Strategies and Initiatives in the Final Year of the 		Medium-Term Management Plan

57	Notes to Consolidated Financial Statements
81

Independent Auditors’ Report82	Management’s Annual Report on Internal Control
Over Financial Reporting (Translation)
84

Independent Auditors’ Report

86

Corporate Data

87

Investor Information

03

Value Creation System—Unseen Value that Intangible Assets Create—
The real value of the Wacoal Group’s mainstay products is not
visible from the outside. Four assets are the main components of our enterprise value—financial assets, physicalassets, trust-related assets*, and organizational assets. Theseassets enable us to create innerwear products that are loved
by customers because they fit their physiques, appeal tothem emotionally, and enhance their beauty, comfort, andhealth. Among these assets, particularly important roles areplayed by the two intangible assets—trust-related assets andorganizational assets, which are not the type of assets typically included in the financial statements. Trust-related assets
are based on relationships of mutual trust with customers,
employees, business partners, and society. Meanwhile, organizational assets systematize strengths and reflect our unchanging management philosophy. In particular trust-related assets,
which the Wacoal Group has accumulated over the many years
since its foundation, are an invaluable strength.
Based on disciplined business management and appropriate strategies, we draw on these four classes of assets as we

Financial assets

lly
ns
io
eg

Product
planning

Sales

ut
y

Manufacturing

Co

04

lly, Act Lo
a
b
o
l
ca
kG
R&D

Deploying management
resources appropriately

Organizational assets

Corporate governance

Trust-related assets

Management strategy

Physical assets* For us, organizational assets are assets that have become established within theorganization and which are not reliant upon employment or transactional
relationships. Trust-related assets are assets such as human assets and customerrelationship assets, which increase or decrease depending on relationships of trustwith various stakeholders.

arketing rooted in
ng m
cou
i
g
ntr
an
r
ies
de
i
an
w
d
g
n
r
ci

n
i
h

Ad
va
n

T

advance business models and create added value. By cultivating intangible assets, our value creation process increases
physical assets and financial assets in a balanced manner.
A feature of our business model is marketing that caters todifferent aesthetic tastes among women in diverse countries
and regions. Further, individual business processes provide
feedback to each other as part of an integrated process thatcreates products loved by customers.
Remaining mindful of a corporate mission that calls on us
to “contribute to society by helping women to express theirbeauty” and our goal of realizing a stronger global presence
for the Wacoal Group, we conduct business in a fair manner
to create value continuously.

nt
rib

ut
et
os
oc i
ety

by helping women

ss
pre
x
e
to

eir
th

a
be

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

Financial assets• Abundant capital• Strong financial foundations• Overwhelming market sharein Japan and Asia
Developing sales areas in Asia
(Taiwan)Physical assets• Group plants in Japanand overseas• Appealing sales areas• Rich product lineup
Kyushu Wacoal Manufacturing
Corp. (Nagasaki)

Providing brands that cater tocustomer needs

Offering threeforms of value

Trust-related assets

Creating results

BeautyProducts loved
by customers

New products
meeting
current needs

Comfort• Autonomous, innovative
personnel• Extensive and diverse
groups of specialists• Operation of wide rangeof stores• Establishment of relationshipsof trust through customer
service• Social contribution throughbusinesses• Favorable business
partnerships

Development of new products
by designers and based onmerchandising

A directly managed store, AMPHI

HealthConduct ofbusiness in afair manner

Organizational assets• Unique designing for comfort,
manufacturing technology,
and quality control system• Abundant physique data andknowledge of Human Science
Research Center• Beauty advisor training system• Integrated manufacturingsystem responsive to market
feedback• Business management basedon mutual trust• Commitment to stronger
global presence for the
Wacoal Group

50 years of physique researchTraining through role playing

05

The Wacoal Group’s

Progress

The Wacoal Group traces its origins to the company Wako Shoji, which Koichi Tsukamoto
founded in 1946. The subsequent marketing of brassiere pads set Wako Shoji on theroad to becoming a manufacturer of Western innerwear for women.
As we have done throughout our history, we will continue to contribute to society
widely by pursuing the goal of “helping women to express their beauty” while providing
products and services that cater to the changing needs in each era.

1950s
Birth of Wacoal
In Japan, women’s dress sense wastransforming from Japanese to Western
apparel. At its factory, Wako Shoji
designed and mass produced Western
innerwear for women, which had been
until then unfamiliar to Japanese women.
The company undertook unique promotional activities, such as innerwear fashionshows, which established innerwear as a
fashion item. From 1956 to 1957, the first
innerwear boom grew sales beyond ¥500
million and expanded the workforce to500, laying the foundations of today’s
businesses.

1960s

1970s

Domination of theDomestic Market

Overseas Strategy
and Diversification

In the 1960s, Japan’s period of rapid economic
growth was changing women’s lifestyles andheightening their interest in fashion. In 1961,
we completed a three-dimensional drawing
method for brassieres. And, in 1965 we obtained
an international patent for Tummy Girdle, which
we developed by applying an innovative flexible
fabric. The Wacoal Group established theProduct Research Department and began investigative research on the physique of Japanesewomen in 1964. In the same year, the Group listedon the stock market, and we have continued to adhere
to a passage of the address Koichi Tsukamotodelivered at this time. In fact, his words havebecome our mission (Please see page 2.).

This era saw consumer tastes shift fromvolume to quality and from the material to thespiritual. In 1970, we established joint ventures
in South Korea, Thailand, and Taiwan, laying
the foundations of a stronger global presence
for the Wacoal Group. This was also the era inwhich we sought to go beyond the innerwear
industry’s traditional boundaries and become
part of the fashion industry by diversifying into
peripheral industries. In 1979, to mark the 30th
anniversary of our foundation, we renewed
our corporate logo to create the current“fashion flower” logo.

Net Sales(September 1978–August 1979)

74.3

¥

The Martin physique measurement method,which involves 158 measurements
Koichi Tsukamoto around thetime of Wako Shoji’s founding
Brassiere pads,
which inspired us tobecome a full-fledged
manufacturer ofWestern innerwear
for women

Wacoal’s pavilion at the Japan World
Exposition

The Bell Flower Bra
Japan’s first
innerwear
fashion show

The Tummy Girdle,
which introduced
revolutionary
stomach-flattening
functionality

Net Sales(September 1968–August 1969)

Net Sales(September 1950–August 1951)

06

¥

35

million¥

9.7

billion

Joint ventures
in South Korea,
Thailand, andTaiwanbillionOverview of the
Wacoal GroupSpecial FeatureManagement Strategy

Message from Top
Management

CSR Activities

Management
Foundation

Financial Section

Net Sales(April 1998–March 1999)

169.9

Shape Pants, whichbecame a major hit
product¥

Net Sales(April 2008–March 2009)171.0

billion¥billionAn exhibition titled Romantic
Garments hosted by Kyoto
Costume Institute (KCI)
A Peach John store
Good Up Bra,
another runaway
success

The establishment of a
local subsidiary in the
United States, Wacoal
International Corp.
The contactless
three-dimensional
measuringequipment of
Wacoal Human
Science ResearchCenterNet Sales(April 1988–March 1989)

¥

107.9

billionA brassiere collection
bag used in our
Brassiere Recycling
Campaign

1980s Evolution into1990sa

The original Pink
Ribbon logo

2000s

Expansion Strategy

Global Corporate GroupA New Century

To expand our presence in overseas
markets, we established local subsidiaries
in the United States in 1981 and in Hong
Kong in 1983. In 1985, we became the firstJapanese company to establish a joint
venture in China. Further, we overturned
conventional wisdom in the innerwear
industry by launching Shape Pants with 17
choices of color in 1981. The productbecame a huge hit, shipping 2.8 million units.
Around this period, we began such social
contribution activities as corporate philanthropy in the areas of culture and sports. It
was the era in which we began sowing theseeds of long-term value creation.

As well as expanding manufacturing and sales
networks in Asia, we entered Europe’s market
as part of efforts to realize a stronger global
presence for the Wacoal Group. In Japan,
amid a growing consumer preference forauthenticity, we advanced investigation andresearch of women’s physiques under thethemes of beauty, comfort, and health.
One of the products resulting from these
efforts was the Good Up Bra, launched in 1992.
We made this product an unprecedented
success through advertising that emphasized
its “gather and lift” functionality. Over five
years, we sold 10 million of these brassieres,
which became the leading product in the
innerwear industry.

In 2000, Wacoal China Co., Ltd. became an
independent company and began rolling out
products in earnest and heightening brandname recognition. In 2005, we transferred to aholding company system to increase the accuracy and speed of operational decision
making. Further, the Wacoal Group pursued
further enterprise value by welcoming companies into the Group: Peach John Co., Ltd., in2006 and Lecien Corporation in 2009. Also, we
have actively developed various social contributions, which we view as part of our role insociety. For example, from 2002 we began Pink
Ribbon activities, which raise awareness ofbreast cancer, while 2008 saw the launch of our
Brassiere Recycling Campaign.

2010s

Toward a Stronger Global Presence
for the Wacoal Group
2014
2013
2012

2010

2011

163.5 165.5

171.9

Consolidated Net Sales

11.8% 12.4%

193.8 191.8

180.2
22.7%
18.9%

(¥ billion)

2015

25.3%

The report “Aging of the Physique and the Principles of Beauty,”
which we published based on half a century of research, is a majorachievement that has provided new value to customers and shown
the importance of wearing innerwear appropriate to the individual’s
physique. In 2012, we made Eveden Group Limited a wholly owned
subsidiary with a view to expanding our businesses in Europe. On a
day-to-day basis, we are continuing efforts to establish a corporategroup that is able to achieve further value creation and grow withcustomers by exploiting global networks and marketing rooted incountries or regions.

13.0%

Consolidated Overseas Sales
as a Percentage of Net Sales

Wacoal’s European
brand FANTASIEA promotional event for the fashion
swimwear of Ai CO., LTD.

07

WACOA L’ S
P R O D U C T S
The Wacoal Group’s Products

W O M E N ’S

Under a broad spectrum of brands, the Wacoal Group offers
products catering to the needs and preferences of customers acrossa wide range of age groups. Based on a basic management strategy
of creating products loved by customers, we take advantage ofmanufacturing strengths to deliver beauty, comfort, and health towomen the world over.

INNERWEAR

Japan

Directly
managedOverseas(U.S.)

08(China)(Europe)Overview of the
Wacoal GroupSpecial Feature

P E RS ON AL

Management Strategy

W E ARC O ND I TI ON I N G

BA BY

/

W EAR

M ATE R N I T Y

CSR Activities

Message from Top
Management

MEN’S

Management
Foundation

Financial Section

INNERWEARSWIMWEARKIDS/JUNIORO T H E R S

09Financial Highlights
For the Year Ended March 31, 2015

Net Sales¥Down 1.0%

191,765 million

Operating IncomeDown 48.9%

¥

3.9%

ROE



Down 1.3 percentage points

Full-Year Cash Dividends
Per Share of Common Stock

7,082 million

¥




30.00

Segment Information

Wacoal Business (Domestic)

Other Businesses

Mainly wholesale operations of Wacoal Corp. for department stores,
general merchandising stores, and specialty stores

Peach John
Business

10.3%

6.1%

Wacoal Business (Overseas)‌
Mainlyoperations of Wacoal International (U.S.), Wacoal China Co., Ltd.,and Wacoal Europe Ltd. (U.K.)

Wacoal Business(Overseas)

Peach John Business
Operations of Peach John Co., Ltd.

Share of Sales
by Business
Segment*
Wacoal Business(Domestic)

25.1%

58.5%

Other Businesses
Mainly operations of Nanasai Co., Ltd. and Lecien Corporation* ‌Percentage figures are calculated based on external customer sales

Net Sales to External Customers / Operating Income (Loss) 
Net Sales

Operating Income (Loss)

Wacoal Business (Domestic)

Wellness Business
Dept.

112,203

2015

8,444

7.5%

4.8%

115,657

Wacoal Brand
Business Dept.

2015

2014

2013

10

x,xxx
11,626–6,296
12,482
83
11,972–2,701Other Businesses

Lecien Corporation¥ million¥ million

2015

2015

2014

2013

43,636

19,829158
19,578456
19,256
754

2015

2014

2013

4,037
33,345

2013

51.9%

23.1%

¥ million

4,776

2014

Wing Brand
Business Dept.

8,423

Peach John Business

48,107

2015

12.7%

9,284

2013

¥ million

Catalog Sales Business Dept.

Retail Business
Dept.

118,0852014

Wacoal Business (Overseas)

Share of Sales by Business (Wacoal Corp.)¥ million

2,023

Nanasai Co., Ltd.
¥ million

2015

11,768–209
12,098–76
11,758
323

2015

2014

2013

10,087
255
9,736
300
9,684
257

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

Message from Top
Management

CSR Activities

Management
Foundation

Financial Section

Information by Region
Americas andEurope13.8%
Consolidated Overseas Sales¥

48.6 billion

Share of Salesby Geographic

Asia and
Oceania

Overseas Affiliates Sales¥

Segment*

25.0%

42.2 billion

Japan

61.2%

* Calculated based on net sales
including net sales of overseas affiliates

United Kingdom

CanadaNetherlands

France
China

South
Korea

United States

Japan
Hong Kong
VietnamTaiwanMyanmarPhilippines
ThailandSri Lanka
Cambodia
Malaysia
Singapore Indonesia

IsraelDominican
Republic

Number of Countries where the
Wacoal Group has Operating Bases

22

Australia

Sales Manufacturing Manufacturing / Sales 

92
11Net Sales by Region (Consolidated) Japan

Asia and Oceania

Americas and Europe¥ million¥ million¥ million

2015

143,250

2015

2014

149,715

2014

2013

146,2242013

16,261
14,871

32,2542015

29,195

2014

22,2292013

11,777

Sales / Operating Income of
Wacoal International (U.S.)

Sales / Operating Income (Loss) of
Wacoal China Co., Ltd.

Sales / Operating Income of
Wacoal Europe Ltd.

¥ million¥ million¥ million

18,097

2015

2014

2013

Sales

2,399
15,648
1,706
11,631
1,434
Operating Income

9,490

2015

2014

2013

Sales

409
8,588
123
6,625
– 346

Operating Income (Loss)

16,0542015

1,741
14,862

2014

2013

Sales

2,120
10,431
743
Operating Income

11People we have measured
continuously for more than
30 years*

People aged between 4 and 69 whose physiques aremeasured every year*

Approx.

1,000

100

More
than

Patents, utility models,and industrial designs
registered, or for whichapplications filed, in Japan*

People we have accumulated
data on during nearly 50 years*

Approx.

More
than

550

40,000

R&D

Looking atby the 

NUM

Product Planning and
Production Technology

Brassieres soldannually worldwide

Approx.

44.6

23

Plants worldwide

million

Products manufactured
in-house*
Parts included in a brassiere

More than

More
than

12

80

%

BY
DE L
MA COAA
W

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

Message from Top
Management

CSR Activities

Management
Foundation

Financial Section

Directly managed
stores in Japan**

305

Share of women’s
innerwear market
in Japan**

38.5

%

Source: ‌Nikkei Sangyo Shimbun(shipment value basis)

Beauty advisors in Japan*

Beauty advisors
worldwide(including Japan)

Approx.

Approx.

3,500

Customer inquiries Customer Service
Center receives annually*

Approx.

8,000

After response to complaint,
percentage of customers
intending to repurchase*

48,000Approx.

91.0%

WacoalSales and Customer Service

BERS

Personnel, Organization,
and Business Management

Percentage of female
employees*

Approx.

88%

Outside directors / Total directors

3 8

Female managers as apercentage of total managers*

15.6

%

* Wacoal Corp. ** Wacoal Corp. and domestic subsidiaries

13Special Feature

The Wacoal Group’s
On-Site Capabilities“Contribute to society by helping women to express their beauty”
To realize this mission, the processes of the Wacoal Group, including R&D,
product planning, manufacturing, sales, and customer
service, function cohesively to achieve unique manufacturing.
This section introduces some of the personnel working at our
manufacturing sites and focuses on how diverse personnel andtrust-related assets support frontline operations.

Sales
Delivering products
through customers’
preferred sales channels

14Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

R&D
Researching physique,sensation, physiology,
and psychology
Discovering, creating,and providing value
customers wantIntegrated
manufacturing

Product planning
Identifying customer needs
accurately, reflecting them tocreate customer value

Manufacturing
Realizing safe, reliable,
high-quality products throughstrict quality control

15

Special Feature

1

On-Site Capabilities
Supporting Quality

Underpinning Wacoal’s Quality:
Mutual Trust Transcending Borders—Vietnam Wacoal Realizes High Quality with Pride—
Established in 1997, Vietnam Wacoal Corp. is the Wacoal
Group’s largest individual plant. It is located about one hour’sdrive from Ho Chi Minh, a rapidly growing commercial city insouthern Vietnam. The plant has approximately 2,000 personnel with an average age of 28. They carry out most processes
manually—from fabric stretching and cutting to sewing,inspecting, and packaging—and they meet the same quality
standards as plants in Japan.

16

Having expanded during the 18 years since its establishment, the plant now produces roughly 3.8 million brassieres
per year, tirelessly supplying Japan with products loved bycustomers. Based on a spirit of mutual trust that transcends
borders, Vietnam Wacoal passes on skills, develops personnel, and coexists with local communities. Playing an indispensable role in establishing a stronger global presence for
the Wacoal Group, the company is continuing to evolve.

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

Aiming to Establish a New Sewing Style byCombining High Quality and Cost Competitiveness
At Vietnam Wacoal, we view our main mission as employing talented local people to enhance cost competitiveness while maintaining high quality. By incorporating Japan’s sewing technology and quality management methods, we have realized the “made by Wacoal” ideal of ensuring uniform quality regardless of thecountry in which products are manufactured. Going forward, while preserving processes that can only bedone by hand, we will automate other processes to enhance efficiency even further.
Moreover, we are enhancing the skills of managers. As part of these efforts, we have introduced an outside training curriculum that is developing each manager’s ability to suggest solutions. Also, we will steadilydelegate responsibility while building an organization that encourages autonomous behavior. More thananything, as local personnel work we want them to take pride in the fact they are running the company.
Through these efforts, we aim to be the world’s No.1 plant.

ki

ng

at

na

by th

Percentage offemale personnel

1,200
Only

2

Japanese
personnel

President and Director
Vietnam Wacoal Corp.

e Numbers

Sewing personnel
Approx.

Lo

o

et
Vi

al
ac o
mW

Takayoshi Sako96%

Personnel

Percentage of
local personnel fromĐồng Nai Province

2,048

95%

(as of March 31, 2015)

Motivating Employees to Achieve
Further GrowthPhùng Quốc ĐạiI CEVOOn-sitecomments

Realizing High Quality by Creating
Workplaces Where Employees Can
Work with Peace of MindTrần Thị Ngọc HạnhPlant General Manager
Vietnam Wacoal Corp.

Manager, Business Management Department
Vietnam Wacoal Corp.


I was the second local employee to join thecompany. Beginning my career as a sewing
machine mechanic, I became plant general manager three years ago. Once or twice a year, I travel
to Japan to visit other plants or meet members ofteams specializing in skills and technology at head
office. I take the skills and knowledge I acquire
back to the plant and use them to enhance theskills of personnel or raise their awareness.
To heighten the competitiveness of the planteven further, increasing the motivation of employees and encouraging all of them to make a concerted effort to advance manufacturing is
indispensable. Therefore, I emphasize having regular frank discussions with section heads and othersubordinates and identifying and solving problems
together. In future, I would like to independently
plan, procure, design, and locally market products
suited to Vietnamese people.



Left: Phùng Quốc Đại
Right: Trần Thị Ngọc Hạnh(Both have worked for the company
since its establishment.)

After graduating from university, I was the first
employee the company hired. Since then, I haveworked in the personnel, general affairs, andaccounting departments. Currently, I am working
to create workplaces in which employees can workwith peace of mind.
Women account for 96% of the company’s
employees. Our workplaces have a friendly atmosphere: as if you are working with your family, andyour coworkers are you brothers and sisters. The
company’s in-depth training program and a generous benefits package gives personnel peace ofmind because they allow them to acquire skills or
focus on manufacturing, even when bringing up
children. Creating high-quality products with theirhands is a source of confidence and pride for each
employee. We have a real sense of having grownpersonally as the company has progressed
during its history.

17

Special Feature

1

On-Site Capabilities
Supporting Quality

Creating the Best: Every Stitch,
Millimeter, and Second Counts—Manufacturing Only Hokuriku Wacoal Sewing Can Realize—
In the 1970s, the Wacoal Group established plants in various
regions of Japan with a view to expanding its production baseas the Group developed. One of these plants was Hokuriku
Wacoal Sewing Corp., which began operations in 1970. Since
then, it has mainly manufactured brassieres. The company
moved to its current location in Fukui Prefecture in 2010. As wellas manufacturing high-value-added products under such luxury
brands as Wacoal Dia and Tréfle, Hokuriku Wacoal Sewing
develops technology, supports designing, and fosters the next
generation by passing on skills. In addition to advanced technical capabilities, the company has the passion and pride needed
to consistently create products loved by customers.

Brassiere Manufacturing Processes that Facilitate Production Flow
Stretching

Cutting

SewingInspecting

Packaging

The fabric is preparedby stretching it mechanically and manually.

An automatic cutter andpress cutter are used to
cut the fabric. Fine laceis cut by hand.

Parts are sown one at atime by each team’s
members, who use
sewing machines andwork in a relay format.

All items are inspected.
Also, two personnel
responsible for inspection and assessment
conduct random inspections in compliance with
ISO standards.

All items are inspectedagain using a needle
detector. Labels andtags are attached toitems, which arewrapped, packaged,
and shipped.

E On-site com
IC

m
en

ts

VO

Raw material fabricTsugio Tomita
General Manager,
Production Dept.
Hokuriku Wacoal Sewing Corp.

18

Efficiency Is Indispensable in Frontline Operations
Approximately 150 sewing personnel operate 10 production lines for brassieres, innerwear, and otherproducts. Normally, we form different teams for each product. Therefore, we take experience and skill into
consideration when deploying personnel. A person’s number of years of experience is not the only factor.
Each person has different aptitudes. This means choosing the best person for each job is indispensable for
operational efficiency. Furthermore, producing high-value-added products efficiently not only calls foradvanced skills but also requires flexible production line adjustment. Consequently, we achieve smooth workflows by dividing operations into mass production lines and production lines that manufacture many types of
products in small lots. Another part of our work is to keep accumulated skills in the organization by passing
them on to the next generation. For example, we use comparative video software to analyze differences inthe sewing techniques of highly experienced personnel and those of personnel with less experience.

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

Message from Top
Management

CSR Activities

Management
Foundation

Financial Section

Dedication to—Craftsmanship and Commitment—
One Stitch, One Millimeter, One Second

This slogan encapsulates the dedication of the sewing personnel at Hokuriku Wacoal Sewing.
One Stitch= The commitment sewing personnel put into every stitch
One Millimeter= Sewing with a degree of precision that does not permit the slightest deviation
One Second=A dvancing items to the next process even one second faster, always racing against time
When these three attributes unite, the plant realizes ideal manufacturing operations.

We Want to Realize Designers’
Concepts Perfectly

E
IC

Kazumi Sakaguchi

We do not want to make defective products.
Even if it means remaking a product many times,
we want to focus on quality uncompromisingly andcreate something that conforms exactly to thedesigner’s request without one millimeter of difference. This dedication creates products said to beamong the best of their kind in the world. Similarly,
our skills are said to be unrivalled worldwide. We
take pride in this reputation.

VO

VO

Wacoal Dia products require a high degree of expression.
Consequently, overcoming technical challenges has been a constantfeature of the brand’s history. Sometimes, even experienced sewing
personnel find it extremely difficult to meet product specifications,which can require fine thread or fine lace fabric not used before. To
meet such specifications, sewing personnel have to understand thedesigner’s concept. By very precisely sewing together each part togive the designer’s concept concrete form, we create products of aquality and beauty that almost makes them works of art. A further
benefit is that the sewing techniques that enable us to overcome thechallenges of each product’s specifications accumulate as valuableassets within the organization.

E
IC

Sayuri Saito

Accurately completing a product with anadvanced design requires various skills,
such as handling and tiny stitches. However,I get a great feeling of accomplishment
when a product is finished. I enjoy sewing
the Wacoal Dia brand’s wonderful products
by myself from start to finish.

Indispensable Manual Work of Highly Dedicated PersonnelNaturally, the role expected of a plant in the Group is to minimize losses and manufacture the required
volume of products in a timely, efficient manner. However, in the Wacoal Group’s manufacturing operations we cannot create products with machines alone, personnel are critical. The manual work of highly
dedicated personnel is fundamental to the realization of each product. Without this dedication, we
could not make products loved by customers.
Wacoal Dia products have world-class finishing and quality. I am proud to play a part in creatingsuch products. I want us to aim to be the world’s No.1 plant by continuing manufacturing that only
Hokuriku Wacoal Sewing can realize.

Kazuhiro Inoue
President and Representative Director
Hokuriku Wacoal Sewing Corp.

19

Special Feature

2

Diversity Initiatives Heightening
On-Site Capabilities

Junko Kasai

Hiroko Kojima

Yuriko Sakaguchi

Corporate Officer
Chief of Diversity and Career Support Section
Human Resources and General Affairs Dept.
Wacoal Corp.

General Manager, First Sales Section, Eastern Japan
Office, Regional Sales Headquarters
Wacoal Brand Business Dept.
Wacoal Corp.

Eastern Japan Office,Regional Sales Headquarters
Wacoal Brand Business Dept.
Wacoal Corp.

Diversity Strategies
that Boost Enterprise Value—Toward a Wacoal Group in Which Everyone Works with Vitality—
The Wacoal Group’s workforce encompasses female and malepersonnel with many different attributes, including personnel
in a range of different age groups and those with disabilities.
A particular feature of the Group is that roughly 85% of its
personnel are women. We believe employees with diverse
personalities recognizing each other’s values and working
together to achieve the organization’s goals is the source ofour competitiveness.
In April 2014, Junko Kasai became the first female corporate
officer of Wacoal Corp. At the same time, we established theDiversity and Career Support Section with Ms. Kasai as its inaugural chief. This section is tackling a range of measures basedon two pillars of diversity advancement: support for meeting
life and work commitments and promotion of personnel.
Providing support for meeting life and work commitments
entails designing and managing systems that help employees

return to work readily after absence due to childrearing or
nursing-care commitments. Promotion of personnel involves
advancing the careers of female employees and fostering nextgeneration leaders. In May 2015, the Diversity and Career
Support Section launched the We! Labo Project, through whichyoung female and male personnel are preparing plans for new
businesses. Further, the section is steadily advancing preparations for the establishment of Wacoal College, which will
provide instruction on advanced business skills.
We invited the leader of the Diversity and Career Support
Section, Ms. Kasai; Hiroko Kojima, general manager of theFirst Sales Section of the Eastern Japan Office of the Regional
Sales Headquarters; and Yuriko Sakaguchi to discuss the current roles of the Wacoal Group’s female personnel and how
these should evolve going forward.

First Sales Section, Eastern Japan Office, Regional Sales Headquarters
Traditionally, male personnel have mainly been responsible forsales. However, we have established an all-women sales section.
Despite challenging conditions following an increase in the consumption tax rate, the section grew sales and became a focus ofattention within the Group. After working for 17 years as a beauty
advisor, Ms. Kojima became part of the sales team. In 2014, she
was promoted and became the general manager of the First Sales
Section of the Eastern Japan Office of the Regional Sales Head­quarters. Ms. Sakaguchi joined the sales team three years ago,
after working for 20 years as a beauty advisor.

20

Women’s Contribution to Sales Operations
2009

Personnel expenses as apercentage of net sales

Product returns
percentage

1.7%

5.3%

2014
(Comparison of Eastern Japan Specialty Stores Section, Regional Sales Headquarters)

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Fostering the Next Generation of Leaders

What led to the establishment of the Diversity Career
Support Group?
Kasai: It began from the “women’s empowerment project,” which
the Group initiated to address issues that the management teamand employees had identified. I was nominated as the project’s
chairperson. However, I only accepted the position after meeting
directly with president Tsukamoto and the senior managing director, Hironobu Yasuhara, to make completely sure of their intentions in relation to the project.
Their message was very clear. Women account for 85% of the
Wacoal Group’s employees, and they work in good conditions.
However, how many women are there who are true leaders?
Although it is important that each person works hard in their position, in the end, a company’s strength is determined by how many
outstanding leaders it has. In this respect, the Wacoal Group still
has issues.
Leaders do not necessarily have to be managers or officers.
Under the project, however, we set as a target raising the percentage of women in managerial positions from April 2015’s level of
15.6% to 20% by 2018. Not pursuing numbers recklessly, webegan a leadership program with the aim of training around 80
employees a year. The program is tasked with steadily fostering a
new generation of female leaders. And, employees put themselves
forward for training. If you want to be a leader, I think you need tobe ready and willing to raise your hand. That said, I hope seeing
women assume senior positions will encourage employees who
have not been inclined to become leaders to follow their example.
Kojima: I agree that our focus should not be on numbers but onpeople. Given that this is a merit-based company and being aleader is tough, individual effort is always a precondition.

Kasai: Promoting women does not mean being lenient with them.
It means removing the stereotype of sales or management being
men’s jobs and deploying personnel strictly based on individual
aptitude rather than gender. Put another way, the program makes
stringent demands on women. Ms. Kojima you are right in the
middle of this, so I think you will appreciate what I mean.
Kojima: On the other hand, many business clients have said that if
companies selling women’s innerwear advance this type of initiative, it will create organizations that more closely reflect the needsof customers and personnel working in sales areas. I find thisencouraging, and I really feel that people have great hopes for us.

Message from Top
Management

Management
Foundation

Financial Section

Sakaguchi: In frontline operations, the number of female managers has risen. In this respect, I have a real sense of change in many
areas. I think these changes will heighten our motivation.
Kojima: Attitudes have changed quite considerably. At themonthly sales area meetings, managers always mention theimportance of empowering female personnel to contribute more.

Focusing on Aptitude Rather than Genderin Sales Teams

Do you feel that female personnel have certain advantages?
Sakaguchi: We sell women’s innerwear, so the perspective of
female personnel is important. But I think the ideal situation is
one in which the different strengths of women and men complement each other.
Kasai: Previously, some business clients asked us to stop using
female personnel in sales because men were considered better
suited to physically demanding work behind the scenes andnegotiations. Now, we do not receive such requests. In fact,
female sales personnel are involving business clients in thisinitiative and moving business discussions forward energeticallyand effectively.
Kojima: When we notice something in sales areas, we do not hesitate to make suggestions. And, if clients have a request, weaddress it quickly when we return to the office. I feel this approachis heightening trust and expectations.
Kasai: Having a feel for frontline operations is important. Rather
than conceiving of major changes abstractly, we respond rapidly
to small changes one at a time. If this produces favorable results,
we immediately apply the improvement more broadly. This speed
is one of the strengths of female sales personnel I think.
Kojima: I do not think the difference in aptitude for sales is
between men and women but between individuals. However,someone who has actually worked in a sales area is very familiar
with customers and business clients and has experience andknowledge that are extremely significant assets.
For example, due to budgetary constraints there was a store
where we only had a small DVD monitor installed, and customers
would pass by without stopping. Until now, the situation would
have been left as it was. However, we borrowed a large monitor
from the office, which we shared with other stores. In all of thestores, customers’ response changed completely. This type of smallchange can make a big difference. Rather than thinking “we cannot
afford to buy an expensive monitor,” focusing on what could bedone led to the idea of borrowing monitors.

This is a good example of using various viewpoints toachieve improvement.
Kasai: Not just noticing the problem but refusing to give up andtrying something different to rectify it produced a favorable outcome I think.

Moving from Beauty Advisor to Sales Team
Member and onto Manager

Kasai: As general manager of the First Sales Section, Ms. Kojima
scouted Ms. Sakaguchi as a candidate for the sales team, I believe.
Sakaguchi: I had worked for 20 years as a beauty advisor andaccumulated broad experience. I enjoyed working in sales areas.
But I wanted to take on a new challenge at a higher level, so
I accepted the offer. Because I have long experience of working in
21

Special Feature

2

Diversity Initiatives Heightening
On-Site Capabilities

frontline operations, I can understand beauty advisors without
having everything explained to me. Also, having spent such a longtime with business clients gives us mutual peace of mind I think.
Kasai: It must have been very tough for you at first.
Sakaguchi: I had some difficulties because I was not familiar withsuch organizational rules as inputting budgets and progress management. In particular, I have not received sales-specific training.
Therefore, for those aspiring to become members of the sales
team, I think it would be good if we had common materials that
include work flows, manuals, and frequently asked questions,for example.
Kasai: In fact, in response to this type of feedback, we have begun
training in frontline operations.

Ms. Kojima, how did you find the transition from beauty
advisor to sales team member?
Kojima: For 17 years, I worked as a beauty advisor. Ultimately,
I become a beauty advisor leader and engaged in work that was
no different to that of sales personnel: holding business discussions with business clients and so on. However, in the end thiswork involved waiting for replies from sales personnel, and various interlinked factors were preventing things from progressing
quickly. So I decided to join the sales team. At the time, I reliedon the goodwill of those around me because I did not know thethings that sales personnel should know as a matter of course.
Nevertheless, because I had chosen to do this job, I was determined to persevere no matter how tough things were. Normally
beauty advisor leaders report to sales personnel. However, I held
both positions concurrently. As a result, I had to deal with manydifferent types of problem by myself, and at times I struggled.
Kasai: According to beauty advisors, beauty advisor leaders playa role similar to that of a “mother” and sales personnel act as the“father.” With this in mind, it must be hard for one person to
perform both roles.

things are challenging, but I am more confident now that I canmake a major contribution. Further, growing myself and moving
up to the next step will enable us to foster more personnel likeme I think.

Becoming an Even Greater Corporate Group
Kasai: I think a feature of the Wacoal Group is that it does not flatly
reject the aspirations of motivated personnel. It allows them to takeon challenges. Whether or not an individual has the desire is important. For those with desire, the Group responds appropriately.
An in-house questionnaire revealed that about 10% of female
personnel would like to become managers. However, this is alarge denominator. If 10% of female employees really aimed to
become managers, this would be a huge number of personnel.
Rather than one special method for women to apply themselves
and advance their careers, I think many methods of careeradvancement will become accepted.
In fact, there are many talented personnel in the Wacoal Group.
If they are given opportunities, significant changes are sure tofollow. I think if women exercise more leadership, the Wacoal
Group can become an even greater corporate group.

Establishing related systems and appropriate conditions
must be a challenge.

Subsequently, you became a general manager.
How has this changed your perspective?
Kojima: Initially, I thought being a general manager was sure to
be tough. My strength is in frontline operations. I was very anxious
about whether I would be able to conduct effective presentations
for senior management. However, when I talked about frontline
operations at meetings, I found they were a receptive audience.
There were aspects of frontline operations that the senior
management team wanted to know more about. Sometimes

22

Kasai: It probably appears daunting, but really it is not. It is justsomething that we have not done before. If we try, it will soon
become a matter of course. Thinking “it will be really difficult” isonly an unfounded assumption. Changing the way we look atthings and systems just a little will enable us to do many things.
Not doing so would be a wasted opportunity, I think. The Wacoal
Group’s culture has a type of optimism that means it is willing to
try anything, and if it does not go well, try again in a different way.
Rather than having personnel work under pressure, we have an
attitude that permits failure to some extent.

You are referring to an environment that is conducive totaking on challenges, I think.
Kasai: It may be an issue that this permissiveness spoils us.
However, it is precisely this attitude that gives us the room to grow.
Personally, I feel that there are still many things we can achieve
going forward.

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

Realizing Highly Productive
Processes by Advancing Diversity—Initiatives of Niigata Wacoal Sewing—
A subsidiary of Wacoal Corp., Niigata Wacoal Sewing Corp., received acommendation from the Minister of Economy, Trade and Industry as a company
qualifying for inclusion in the Fiscal 2014 “Diversity Management Selection 100,”
which chooses about 100 companies with outstanding records of promoting
diversity in their businesses.
A certificate of commendation from the
Minister of Economy, Trade and Industry

At Niigata Wacoal Sewing, we began employing disabled
people in 1981 because we wanted to grow with the local
community and help disabled people achieve personal fulfillment. Since then, we have developed suitable workplaces byintroducing or modifying technology and equipment.
In 2011, we responded to requests from disabled employees who wanted to participate in sewing, the company’s main
activity, by introducing large electronically controlled automatic
sewing machines. Our goal was to encourage disabled
employees to work for us long term. By pre-programmingthese sewing machines, operators can use them to sew
automatically. There was no precedent for introducing suchmachines into operations for apparel products, which haveshort lifecycles and involve numerous patterns. Consequently,
creating the machines was a process of trial and error that
required help from a sewing machine manufacturer.
Ultimately, we decided to incorporate clamp sewing guides.
These devices allow disabled employees to operate sewing
machines safely and simply and create apparel with precision.
Moreover, the devices stabilize quality, and they are low-costbecause we can manufacture them cheaply in-house.
Currently, nine employees maximize their capabilities by using
these sewing machines.
Not only disabled employees but also less-skilled employees
can use these sewing machines. This advantage is enabling us
to shorten lead times for developing personnel and increase
productivity. As a result of this initiative, the utilization rate ofsewing machines is nearing 100%, and productivity has doubled. Furthermore, we can apply this know-how to existingsmall sewing machines. This means that capabilities once
reliant upon expert operators’ feel and skill have become capabilities that anyone can master and which belong to the plant.
Niigata Wacoal Sewing is continuing to promote diversity
with a view to creating further innovations and enhancing
productivity and business results.
For details, please see the “Winners of the Diversity Management Selection100” page of the Ministry of Economy, Trade and Industry’s web site.
www.meti.go.jp/policy/economy/jinzai/diversity/kigyo100sen/

A large electronically controlled
automatic sewing machineand clamp

Sewing operations usinga large electronically controlled
automatic sewing machine

A small sewing machineand clamp

A clamp for a small
sewing machine

Sewing operations usinga small sewing machine
Benefits of using a clamp: Using a clamp, rather than the operator’s hand, to hold items makes sewing items in agiven direction easier, stabilizes quality, and reduces worker-hours.

23

Eleven-Year Financial Summary
Wacoal Holdings Corp. and Subsidiaries

2015

2014

2013

¥191,765¥193,781¥180,230

Cost of sales

90,72291,00884,548

		 % of net sales

47.3%

47.0%

46.9%

87,94088,91384,331

45.8%

45.8%

46.8%

7,082

13,8608,499

Other income and expenses, net

229

313

(152)

Net interest income (expense)

44

(8)

(79)

11,342

15,033

10,940

Income taxes

3,303

5,641

3,772

Net income attributable to Wacoal Holdings Corp.

8,444

10,106

7,880

Return on assets (ROA)

4.0%

5.7%

4.6%

Return on equity (ROE)

3.9%

5.2%

4.4%

14,337

8,949

12,309Net cash (used in) provided by investing activities

164

1,658

(23,520)

Net cash (used in) provided by financing activities(8,391)(5,554)

5,379

Depreciation and amortization

5,074

5,036

4,888

Capital expenditures

3,093

2,265

2,475

Net income attributable to Wacoal Holdings Corp. (Basic)¥59.95¥71.75¥55.95

Cash dividends

30.00

33.00

28.00

Shareholders’ equity

1,625

1,456

1,325

Total current assets¥120,264¥109,488¥103,587

Total current liabilities

42,302

46,60850,504

Cash and cash equivalents

38,41030,65824,514

Net property, plant and equipment

49,18848,97849,665

Total assets

300,272

271,988

254,536

Short-term bank loans and long-term debt, including current portion

14,817

18,147

18,765

Total shareholders’ equity

228,857

205,106

186,646

Years ended March 31

For the year
Net sales

Selling, general and administrative expenses
		 % of net sales
	Government subsidy
Special retirement related expenses
Operating income

Income before income taxes, equity in net income of affiliated companies,		 and net (income) loss attributable to noncontrolling interests

Net cash provided by operating activities

Per share of common stock (in yen)

At year-end

For the fiscal year ended March 31, 2012, to reflect earnings and losses during the fiscal year in the consolidated financial statements more appropriately, certain consolidated subsidiaries
have changed their settlement dates to March 31 to coincide with the settlement date of the Company. Consolidated financial statements for the fiscal year ended March 31, 2011, andprior fiscal years have been retroactively revised accordingly.

24

Overview of the
Wacoal GroupSpecial Feature

2012

2011

2010

2009

2008

2007

2006

2005

¥171,897¥165,548¥163,548¥170,960¥165,201¥166,410¥164,122¥160,968

81,891

81,65980,101

83,87982,94384,65884,322

84,041

47.6%

49.3%

49.0%

49.1%

50.2%

50.9%

51.4%

52.2%

79,62977,71678,524

77,24868,921

68,85670,946

72,261

46.3%

46.9%

48.0%

45.2%

41.7%

41.4%

43.2%

44.9%

Management Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

Millions of yen, except per share amounts(7,100)7,521
10,377

4,401

3,829

9,833

13,337

12,896

1,333

11,766

(189)

(523)

(717)

(2,699)

592

861

1,976

206

19

49

43

195

224

163

157

107

10,207

3,927

3,155

7,329

14,153

13,9203,466

12,079

4,199

2,010

1,655

3,083

5,774

6,502

1,459

5,800

6,913

2,785

2,475

5,062

4,845

9,029

2,821

6,790

4.7%

1.8%

1.4%

3.4%

5.8%

5.7%

1.5%

5.4%

4.1%

1.6%

1.5%

2.9%

2.6%

4.8%

1.6%

3.9%

10,06010,441

9,463

8,202

14,249

9,339

719

2,045

(3,467)(703)(3,573)(4,759)3,709(1,185)(2,069)(5,528)(2,824)(4,965)(5,363)(7,448)(9,400)(8,404)(3,428)

296

4,660

4,685

4,765

4,544

3,892

3,735

3,433

3,312

2,708

2,652

3,981

2,370

1,110

2,536

6,456

5,418

¥49.08¥19.73¥17.51¥35.57¥34.29¥63.18¥19.60¥47.17

28.00

20.00

20.00

25.00

25.00

22.00

20.00

20.00

1,218

1,189

1,217

1,187

1,285

1,375

1,296

1,221

¥ 97,295¥ 90,410¥ 89,455¥ 90,778¥ 97,671¥ 92,915¥110,773¥120,300

35,60733,88034,94531,76235,802

34,86835,52534,97029,98526,31622,32821,95427,06919,816

19,89324,19549,07849,73451,804

49,16551,18552,78253,501

51,826

221,098

215,276

222,889

213,827240,053

250,266

242,296

226,196

6,482

6,436

8,162

5,302

5,701

5,984

6,458

6,911

171,496

167,480

171,860

166,767

184,128

193,278

186,475

175,746

25

The Fiscal 2014–2016
Medium-Term Management Plan
Launched in April 2013, our current three-year medium-term management plan calls on us to continue
advancing a range of measures to establish a stronger global presence for the Wacoal Group. For the three-year
period, the plan sets out a basic strategy by which the Wacoal Group will strengthen its comprehensive capabilities while
ensuring its management philosophy and conduct and ethics code are shared throughout the Group. Furthermore,
to enable responses to unexpected volatility, we are bolstering profitability and building even stronger relationships oftrust with society.
Adhering to the basic strategy, we intend to grow in Japan, the Americas, Europe, China, and Asia as we evolve into a
global corporate group.

Medium-Term Strategy
Reconfirm and implement management philosophy
Develop into a global company‌StrengthenGroup’s comprehensive capabilities through collaboration among companies inJapan and overseas
Strengthen business management system to enable response to changing conditions
Build mutual trust with society

Tasks
Cater to Japan’s
diversifying women’s innerwear
market, achieve sales andearnings targets

Secure and develop points of contact with customers
Hone products’ strengths‌Have Wacoal, Peach John, and Lecien grow sales in theirtarget markets‌Strengthen organization in Europe centered on Wacoal Europe, build
robust ­earnings foundations

Increase sales and earnings
overseas‌Recover market share in Americas’ high-end segment, maintain highearnings by development of new sales channels‌Shift emphasis in China from increasing sales to earnings, penetrate
middle-class customer group‌Redeploy Group’s manufacturing resources in Japan and overseas

Rebuild Group’s manufacturingsystem26

S‌ hift manufacturing capabilities from China to ASEAN‌Develop raw material supply sources and localize purchasing centeredon ASEAN

Develop presence in growthareas outside Japan’s women’s
innerwear business‌Develop positions for Wellness Business and men’s innerwear businesswith view to medium-to-long-term growth

Develop the Wacoal Group’s
overall business
management foundations
and infrastructure

Enhance each person’s productivity

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

Message from Top
Management

CSR Activities

Management
Foundation

Financial Section

Numerical Targets and Progress
Net Sales:

Fiscal 2016 targets

Operating Income:At least ¥200.0 billion

At least ¥Operating Income Margin:

14.0 billion

At least

7%

Net Sales

Operating Income / Operating Income Margin¥ billion¥ billion / %
205.0

2016
(Target)
2015

191.8

2015

2014

193.8

2014

180.2

2013

7.2

6.0
2.7

2011

13.9

8.5

4.7

2012

165.5

2011

7.1

3.7

2013

171.9

2012

14.0

6.8

2016
(Target)

10.4

4.4

‌Operating‌
IncomeOperating Income Margin

Other Important Benchmarks
Net Income Attributable to Wacoal Holdings Corp. /SG&A Expenses / % of Net Sales

Per Share of Net Income Attributable to Wacoal Holdings Corp.

¥ billion / %¥ billion / %

45.8

2015
2014

45.8

2013

46.8

2012

46.3

79.6

2011

46.9

77.7

‌SG&A Expenses

87.9

2015

88.9

2014

84.3

60.0

19.7

Total Shareholders’ Equity / Equity Ratio%¥ billion / %

4.0

2015

3.9
4.4

2013

4.1

2012

5.7

4.6
4.7

1.6
1.8
‌ROE

2014

75.4

2013

73.3

171.5

2011

77.8

167.5

Total Assets¥ billion¥ billion

14.3

38.4

8.9

30.7
12.3

2013
2012

10.1

2011

10.4

‌Net Cash Provided by Operating Activities

186.6

77.6

Net Cash Provided by Operating Activities /Cash and Cash Equivalents

2014

228.9
205.1

2012

Total Shareholders’ Equity

2015

76.2

2015

5.2

2014

‌ROA

6.9

2.8

Net Income Attributable to Wacoal Holdings Corp.
‌Per Share of Net Income Attributable to Wacoal Holdings Corp.

ROA / ROE

2011

7.9

49.1

2012

% of Net Sales

10.1

71.8
56.0

2013

2011

8.4

Equity Ratio

300.3

2015

272.0

2014

254.5

2013

24.5
30.0
26.3

2012
2011

221.1
215.3

Cash and Cash Equivalents

27

Strategies and Initiatives in the Final Year of theMedium-Term Management Plan
In the medium-term management plan’s final year, ending March 2016, our basic strategy is to increase theoperating margin. To this end, we intend to rationalize and increase the efficiency of business management toreflect changing business conditions and strengthen profitability. Furthermore, we will continue expanding
businesses in markets in Japan and overseas. Our initiatives in fiscal year 2016 are as shown below.

Wacoal Business (Domestic)
Priority measures

Progress and measures

Second-year progress

Claim market share in
Japan’s regions

Giving priority to areas in which competitors are comparatively strong, we conducted lateralsales initiatives that transcended sales channels and brands.
Also, in regions that have become unexploited due to the withdrawal of retail stores we
opened our first directly managed store with low-cost operations, Brara, in AEON MALL Kyoto
Katsuragawa. We have opened five of these stores as of the end of March 2015.
Final-year measures•	Expand new sales system for regions in innerwear wholesale division•	Accelerate openings of directly managed store Brara at shopping centers with wide catchment areas through formats that curb store-opening costs•	Implement measures to support specialty stores with focus on unexploited regions
Second-year progress

Strengthen entry-level andsenior customer groups

As measures targeting entry-level customer group, we launched a new brand for general merchandising stores, Pulili, and began the full-fledged rollout of a brand for department stores,
Fairy Tiara.
Final-year measures•	Expand entry-level customer group further•	Increase sales channels among general merchandising stores for product lineups under
Rakuraku Partner brand for seniors
Second-year progress

Expand lineups forhigh-volume market andmaintain high-value-added
marketWe continued rolling out fufu and Tuyaka, brands jointly developed with a major general merchandising store, and expanded and implemented the product lineup in the higher-end
market for directly managed stores.
Final-year measures•	Establish presence and increase sales of prestigious brands for department stores•	Increase appeal to customers visiting Japan and strengthen services by deploying
non-Japanese beauty advisors and providing duty-free services
Second-year progress

Restructure manufacturingarea

We are continuing to reduce costs by increasing production overseas, particularly in the
ASEAN region, and advancing local purchasing of raw materials. In fiscal year 2015, thepercentage of products manufactured overseas increased 1 percentage point, to 55%.
Moreover, the ASEAN region accounted for 61% of the overseas production of the main
innerwear operating divisions.
Final-year measures•	Accelerate transfer of manufacturing of mass-produced items to ASEAN region•	Focus efforts on developing new manufacturing and procurement infrastructure in ASEAN region

28

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

Wacoal Business (Overseas)

Message from Top
Management

CSR Activities¥ million

Final-year measures2016•	Heighten brand profile through sales promotions andevents marking 30th anniversary of Wacoal brand’s entry
into U.S. market

2015•	Increase market share in high-end segments through useof Europe collection and other measures

2014

Europe Business
Final-year measures•	Heighten awareness and sales of Wacoal brand in Europe
and Australia•	Review and reorganize positioning of each brand, deploy
management resources effectively

China Business
Final-year measures•	Focus on department stores and increase number ofstores carrying brand for middle-class customer group,
LA ROSABELLE•	Raise profit margin further by increasing products available at Internet stores and outlet stores‌Net Sales

Final-year measures•	Revise target age group and, based on three-brandsystem, keep existing customers and encourage newcustomers to visit Internet store by increasing points ofcontact with them through further store openings•	Secure appropriate gross profit by revising sales prices
and reducing purchasing and inspection costs

107,924

5,903

Operating Income

Net Sales / Operating Income (Wacoal International Corp.)¥ million
2016

18,097
2,399

2015

2014

‌Net Sales•	Increase production lines at plant in Cambodia to lower
future manufacturing costs

Operating Income

Net Sales / Operating Income (Wacoal Europe Ltd.)¥ million
2016

2015

Final-year measures•	Maintain and expand rental business by offering new sales
areas and fixtures•	Acquire new projects to grow revenues of sales and interior construction businesses

16,054

1,741

2014

‌Net Sales

16,800

1,740

2,113

13,604

Operating Income

Net Sales / Operating Income (Wacoal China Co., Ltd.)¥ million

2015

2014

‌Net Sales

11,000

430

409

9,490
8,588

123
Operating Income

Net Sales / Operating Income (Loss) (Peach John*)¥ million
2016

Nanasai

15,648

1,706

Lecien•	Acquire sales areas by offering existing clients newconcept products and develop new sales channels basedon products created through collaboration with companies
in other industries

20,0002,260(Plan)(Plan)

Final-year measures

114,878

6,980

2016

Other Businesses

111,600

6,600(Plan)(Plan)

Peach John Business

Financial Section

Net Sales / Operating Income(Wacoal Corp. and Wacoal Holdings Corp.)

U.S. Business•	Strengthen sales and improve profitability of b.tempt’d by
Wacoal business

Management
Foundation

2015

2014

‌Net Sales

13,000180(Plan)

12,276- 127
229

12,937

Operating Income (Loss)* Consolidated

29

CSR Management

Advancing CSR Management as a Group

The Wacoal Group’s CSR Management

Building mutual trust with society is the goal of the Wacoal
Group’s corporate social responsibility (CSR) initiatives.

The Wacoal Group advances CSR initiatives based on ISO
26000 standards, which the International Organization forStandardization published in November 2010 (Japan
Standards Association, 2010).
The medium-term management plan launched in April 2013sets out establishing a stronger global presence for the Wacoal
Group as a target corporate proﬁle. By developing businesses
globally, the Group will increase its international inﬂuence.
Based on an international consensus, the ISO 26000 standards deﬁne sustainable development as unceasing efforts bysociety at large aimed at realizing a high quality of life, health,and prosperity.
To identify and clearly prioritize each Group company’stasks and advance CSR initiatives in areas where it can exploit
unique strengths, the Group has prepared the Wacoal
Group’s Basic Policies on CSR in accordance with the sevencore subjects of the ISO 26000 standards. And, we are rigorously informing employees about these policies.
Having identiﬁed the strategic signiﬁcance of the uniquefeatures of its business, the Group will tackle social problems
and continue social business programs through its mainstay
business. As a result of these efforts, we will further enhance
our brand power and competitive advantages while passing
on the management philosophy we have inherited.

Wacoal Group’s CSRManagement
Philosophy
Code of Ethics
Code of Conduct

CSR Goals

Basic Policies on CSR

Under the Wacoal Group’s management philosophy, building
mutual trust with society is its corporate goal and raison d’être.
Comprising our mission, vision, and values, this management
philosophy serves as a compass for our CSR initiatives.
Reﬂecting this close link between the management philosophyof the Wacoal Group and its CSR initiatives, the medium-term
management plan calls on the Group to advance CSR initiatives
as a key management strategy. Incorporating CSR initiatives in
its business activities as a key management strategy enables
the Wacoal Group to communicate its unique business
management stance to more stakeholders. The Group willbuild further relationships of trust with society by advancing
CSR initiatives in all business processes, taking CSR into consideration in business management, and ensuring each executive
and employee meets society’s demands and expectations.
The Wacoal Group markets products in 50 countries, includes
66 companies with operating bases in 22 countries, and has 23
manufacturing bases in 11 countries. Approximately 8,000
beauty advisors sell the resulting ﬁnished innerwear at sales
areas worldwide. In Japan and overseas, we sell about 44.6
million brassieres annually. Given that numerous women support our manufacturing and purchase our products, we feel anatural obligation to be a company empathetic to women.
However, the scope of the Wacoal Group’s responsibility is
not limited to women. Our stakeholders include shareholders,investors, business partners, employees and their families, local
communities, NPOs (nonproﬁt organizations) and NGOs
(nongovernmental organizations), and government bodies.
Therefore, we want to establish bonds of mutual trust with all ofthese stakeholders and earn a higher level of social trust.

30

Social Business Programs through Wacoal’s Main BusinessBusiness
activities

CSR

Uniquepersonalityof Wacoal

Wacoal’s
CSR

Pink Ribbon Activities

Remamma Project

Bra Recycling Campaign

Breast Cancer
Examination
Support Project

Tsubomi School

Wacoal Human Science
Research Center

The Wacoal Group’s System for Advancing CSR Initiatives
In 2004, the Wacoal Group established the CSR Promotion
Office, which is dedicated to establishing CSR policies,
coordinating with related divisions, gathering information, andconducting in-house educational initiatives. Aiming to further
this office’s ability to disseminate information internally andexternally and communicate with society, we transferred it to
the Investor Relations & Public Relations Office in 2011.
In adherence with the Group’s advancement of CSR initiatives
as a management strategy, since 2013 we have been preparing
guidelines for policies, goals, and targets; discussing problems;monitoring the progress of initiatives; and sharing information
among divisions. Divisions responsible for managing CSR leadefforts to advance CSR initiatives that transcend divisionalboundaries.

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

Wacoal* Group’s Basic Policies on CSR
The Wacoal Group’s basic policies for CSR initiatives accord with the seven core topics of the ISO 26000 standards.
We established these policies in June 2013 to clarify the direction of our CSR initiatives.
The Wacoal Group’s basic policies for CSR initiatives summarize the direction in which the Group should advance CSR
initiatives. In addition to complying with laws and regulations, the policies reflect respect for international codes of conduct,
including the Organization for Economic Cooperation and Development’s Guidelines for Multinational Enterprises, Ten
Principles of the United Nations Global Compact, and the International Labor Organization’s Core Labor Standards.

1Organizational
Governance2

Human Rights

3

Labor Practices

4

The Environment

567Wacoal shall strengthen corporate governance with the aim of earning the trust of all stakeholders
by being a valuable company. Wacoal shall ensure the transparency and equitability of its business
management based on respect for international standards of conduct and in accordance with soundsocietal norms. Further, Wacoal shall implement corporate activities that earn stakeholders’ trustand enhance enterprise value by strengthening compliance and corporate governance systems andremaining accountable to stakeholders.


Based on its management philosophy, Wacoal has put mutual trust and respect for people at thecenter of business management since its establishment. Believing respect for people to be a corporate responsibility, Wacoal shall further its basic understanding of human rights with respect to theright to live freely and with dignity and reflect this understanding in its business activities. Accordingly,
Wacoal shall respect individuals’ diverse values, personalities, and privacy. Furthermore Wacoal shallprevent acts that disregard human rights, including discriminatory language or behavior with respect
to race, religion, gender, nationality, physical or mental disabilities, or age; violent behavior; sexual
harassment or authority-based harassment; and child labor or forced labor.


Based on a management philosophy that emphasizes mutual trust, Wacoal shall deepen mutual trustwith employees and create workplace conditions that enable all employees to work actively and with asense of fulfillment. Wacoal shall enhance measures aimed at creating a dynamic corporate culture bymanaging employees’ health and safety in the workplace, training personnel, being receptive todiverse personnel and values, balancing work and private life, and building sound relationships
between labor and management.
In addition, Wacoal shall respect laws and regulations relating to labor, respect societal norms andinternational standards of conduct, establish employment regulations and other personnel regulations, and create workplaces that are comfortable to work in.


Wacoal shall promote environment-friendly business activities reflecting the view that protecting theenvironment is a corporate responsibility. Wacoal shall provide products that place little burden on theenvironment and prevent pollution by pursuing environment-friendly initiatives in a variety of processes related to products, from design and materials development through to manufacturing,
distribution, and sales. Also, Wacoal shall adhere to environmental laws and regulations and its
independent management standards, heighten employees’ environmental awareness through education, and cooperate with and contribute to environmental preservation activities. Moreover, Wacoal
shall disclose to the general public the progress of initiatives based on its environmental policies andother environmental preservation initiatives and advance initiatives that are integrated with society.



Fair Operating
Practices

The cooperation of business partners and various suppliers, contractors, and plants supports Wacoal’s
manufacturing and sales activities and enables it to provide products customers love.
Wacoal shall respect international standards of conduct and adhere to laws and regulations andsound corporate ethics to ensure that it engages in fair business transactions and conducts businessin a fair and open manner. Specifically, Wacoal shall comply with the Antimonopoly Act, the Act
against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors, the Act against
Unjustifiable Premiums and Misleading Representations, the Pharmaceutical Affairs Act, and the
Unfair Competition Prevention Act; and protect and use its intellectual property rights and rigorously
respect the intellectual property rights of others. In conjunction with these activities, Wacoal shalleducate employees about these issues.

‌Consumer Issues(responding to customers)

Wacoal believes valuing each customer and responding to customer feedback sincerely is a duty andthe key to earning trust. Accordingly, Wacoal shall learn from customer feedback and reflect it inproducts and services to provide products and services customers love. Wacoal shall ensure the quality of all operations involved in product lifecycles rigorously, including research and development,
product planning, manufacturing, sales, distribution, and customer support. In these efforts, Wacoal
shall protect customers’ rights, comply with laws and regulations related to consumer protection, andprovide safety and peace of mind. Furthermore, through its web site and other media, Wacoal shalldisclose a wide range of information to customers and promote fair activities.

‌Community

Involvement andDevelopment

Wacoal regards contributing to the development of local communities as an important social
responsibility. With a view to developing local communities, Wacoal shall capitalize on the uniqueexpertise and culture it has cultivated to benefit society at large, implement social initiatives that it isuniquely capable of realizing, respect relationships with stakeholders, and deepen communication
with them. Also, in each of the regions where it has businesses Wacoal shall respond to society’s
requests and expectations and contribute to society in areas where Wacoal can bring strengths
to bear.

* “Wacoal” refers to Wacoal Holdings Corp. and its three wholly owned subsidiaries in Japan and Wacoal Corp. and its seven wholly owned subsidiaries in Japan.

31

Pink Ribbon Activities Worldwide

We conduct breastcare activities in 12 countries around the world. Our goal is to ensure as many people aspossible understand breast cancer correctly and as many women as possible undergo screening. Furthermore,
we want to support those who have suffered from breast cancer.
The Wacoal Group will continue these activities worldwide until people no longer suffer from breast cancer.
For details, please see our web site (Japanese only).
www.wacoalbreastcare.com/

CLOSE UP

Initiatives of Wacoal America

Ahead of bases in Japan, Wacoal America, Inc. inaugurated Pink Ribbon
activities in July 1999.
In April 2001, the company launched its Fi(gh)t for the Cure® campaign,
the title of which expresses a commitment to eliminating breast cancer. At
department stores and specialty stores throughout the United States, thecompany raises funds used to help eliminate breast cancer. All year round,
it publicizes brassiere fitting events.



Fit for the Cure® Campaign Firmly Established in the
United States

E On-site com
IC

32

ts

Vice President andMarketing Manager
Wacoal America, Inc.

en

Susan MalinowskimVOEvery year, during Fit for the Cure® campaign periods, for every brassierethat store visitors try on, the company donates US$2 to Susan G. Komen, abreast cancer foundation. Furthermore, for every brassiere or Shapewear
product they purchase, the company donates a further US$2 to thefoundation.
At department stores around the United States and in Canada, thecompany holds more than 1,200 Fit for the Cure® events annually, at whichmore than 55,000 women try on brassieres. To date, the company hasraised in excess of US$4 million for Susan G. Komen, which uses the funds
for educational initiatives to increase awareness of breast cancer and forbreast cancer treatment and research.

Fit for the Cure® is a very important campaign for Wacoal America. For many customers, thecampaign introduces them to Wacoal products for the first time by encouraging them toexperience in changing rooms how well-fitting and comfortable our products are. About
three-quarters of a million women have received brassiere fittings as a result of the campaign.
Although the quality of our products contribute significantly to the loyalty of customers who
try on brassieres, the campaign’s connection with Susan G. Komen also plays a major role.
In 2015, to coincide with the 30th anniversary of Wacoal America’s commencement of sales
operations, we will step up campaign activities nationwide to raise the awareness of breast
cancer in as many women as possible.

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

Wacoal China Co., Ltd.

Spreading Pink Ribbon Activities

Began in October 2003
We jointly conduct a variety of activities with governmental organization the All-China Women’sFederation. These mainly comprise events toincrease awareness of breast cancer and the distribution of 30,000 pamphlets to the general public toraise awareness of the need for breast cancer screening. Every May and October, we also distribute free
Pink Ribbon badges at stores.

Wacoal Hong Kong Co., Ltd.

PT. Indonesia Wacoal

Began in October 2004
Since 2011, we have been a “silver” sponsor of the
Pink Walk Against Breast Cancer, which a Hong Kongbased breast cancer foundation organizes every
October in the city. The foundation holds this eventto raise the public’s awareness of breast cancer, andWacoal personnel participate.

Began in April 2008
As well as contributing to a breast cancer eradication
fund, Yayasan Kesehatan Payudara Jakarta, we cooperate with the fund’s awareness-raising activities. In fiscal
2014, we donated 50 million rupiah (approx. ¥500,000).

Shinyoung Wacoal Inc.

Wacoal Malaysia Sdn. Bhd.

Began in October 2003
Every October, we raise awareness by distributing
free Pink Ribbon badges to all employees and the
managers of specialty stores that carry our products.
Also, we distribute a pamphlet including information
on how to check yourself for signs of breast cancer to
100 department stores and 150 specialty stores. At
the same time, we post information about the campaign on our web site. In addition, we hold meetingsfor cancer patients and prevention seminars at major
hospitals in South Korea.

Began in October 2003
Every October, we hold events to raise awareness ofbreast cancer. At major shopping malls, we hold
events in which we hand out leaflets, small packs oftissues, T-shirts, and balloons to communicate thePink Ribbon message to the media and customers.
Further, we hold seminars on breast cancer and brassiere fitting campaigns.

Philippine Wacoal Corp.

Taiwan Wacoal Co., Ltd.

Began in January 2005
In the Philippines, we conduct the Keep a Breast
campaign all year round. In cooperation with Gift 2
Life, led by obstetrician-gynecologist Dr. Cristina L.
Santos. We hold 30 seminars a year at girls’ schools
and at the offices of local governments, airlines,banks, and other organizations.

Began in September 2004
For 14 days, from September 7 to 14, 2014, Taiwan
Wacoal provided a mobile breast cancer screening
unit to various regional health and welfare agencies.
At the same time, we provided screening services forbowel cancer and cervical cancer. At seven locationsin front of city halls, hospitals, and specialty stores,
234 people received screening.

Vietnam Wacoal Corp.

Thai Wacoal Public Company Limited

Began in October 2009
At stores, we raise awareness of breast cancer screening, explain Wacoal’s Pink Ribbon activities andrelated funds, and sell Pink Ribbon badges. Also, we
distribute leaflets about these activities.

Began in 2000
In fiscal 2014, we raised awareness by holding eventsand talk shows about breast cancer titled Power of
Women and Giving and Sharing. From August to
December, we conducted a Pink Ribbon campaign
calling on women to undergo screening.

Wacoal Singapore Pte. Ltd.

Wacoal Corp. (Japan)

Began in 2002
Wacoal Singapore donates S$10,000 (approx.
¥800,000) to the Breast Cancer Foundation each year.
In addition, we place donation boxes in our stores
every October and organize charity events in which
we raise money for breast cancer related causes by
distributing Pink Ribbon badges.

Began in September 2002
Each year, more women try on brassieres during the
Pink Ribbon Fitting Campaign, which we began in
2007. In fiscal 2014, 190,000 customers tried on approximately a total of half a million brassieres, for each ofwhich we donated ¥10 to a breast cancer charity.
We jointly hold the Stamp Rally Walk with Pink
Ribbon Kyoto, which we have supported since its
establishment in 2005.

33

Tsubomi School and Other Educational Activities
Tsubomi School refers to innerwear classes the Wacoal
Group conducts for girls, from the fourth year ofelementary school through the second year of junior highschool, and their guardians. The classes aim to enable
participants to learn about the physical and emotionalchanges accompanying adolescence and give them basic
knowledge about innerwear. We provide instruction atregional children’s associations and girl scouts groups,
with an increasing number of classes held at elementary
schools and junior high schools in recent years. As of
March 2015, more than 82,839 people have participated in
the classes since they began in October 2001.
In addition, we provide textbooks and lend innerwear
samples to schools that our instructors are unable to visit.
In April 2014, we produced an educational DVD and anaccompanying textbook, both of which were distributed at
no cost to the school nurses of elementary schools andjunior high schools and other professionals responsible forhealth guidance. Following on from this initiative, webegan free distribution of PowerPoint educational

Educational DVD

materials titled “Let’s Innovate Ways of Wearing—How
Innerwear Works” from January 2015. These materials areused in elementary schools’ domestic science classes
about comfortable clothing and homes and offer
instruction on being comfortable by wearing innerwear
appropriately.
Tsubomi School helps girls to be healthy duringadolescence, which is an important time of their lives, andto develop into beautiful, healthy women.
Also, in response to recent years’ growing demand forseminars for adults, we have been holding Aging Seminars
that explain how the physique ages, Seminars for Those in
the Third Year of Junior High School through to University
Students, and Maternity Seminars. In fiscal 2015, we
hosted 115 seminars in which 3,336 people participated.
Going forward, the Wacoal Group is committed tocontinuing to provide women in all generations and girls
with education about their physique and innerwear.

Seminar web site

Brassiere Recycling
As one of its environmental initiatives, Wacoal has been
conducting the Brassiere Recycling Campaign since 2008.
Customers put brassieres that they no longer need in
specially designed collection bags and bring them tostores. The collected brassieres and the unopened bags
containing them are processed into RPF (Refuse Paper &Plastic Fuel) that paper manufacturers and other companies use as a heat source.
We have been developing the campaign for sevenyears, and the number of brassieres collected has
increased every year. In fiscal 2015, the number of brassiere collection bags collected rose 18% year on year, to80,305. These were processed into approximately 31 tonsof RPF, up 19% from the previous fiscal year.
In fiscal 2016, to date we have been stepping up efforts
to distribute information to age groups we have as yet not
had a great deal of contact with. For example, to publicize

34

A bag used inbrassiere recycling

the campaign more widely, we have begun distributing
videos through three YouTube broadcasters, including
Japanese YouTube celebrity Asahi Sasaki, and holding
events. As a result, awareness of the campaign has risen
sharply. The videos have so far received more than 240,000
views, and visitors to the Wacoal Bra Recycle web site
have increased by more than 200%.
Further, the scope of this environmental initiative is
extending steadily overseas. Participating stores outside
Japan include 430 stores in Taiwan and 41 stores inHong Kong.

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

Kyoto Costume Institute

Akiko Fukai
Trustee
Honorary Curator
Kyoto Costume Institute

Creating Beauty and Culture through Fashion
In 1978, the Wacoal Group’s founder Koichi Tsukamoto
established the Kyoto Costume Institute (KCI) because he feltthat for fashion created in Japan to become truly worldleading, a thorough understanding of fashion’s history was
important. I became involved in KCI after chancing upon a
newspaper article about its establishment. In the milieu ofthat time, fashion was not viewed as art, much less displayedin art galleries. However, I was confident that fashion and art
would intersect in the near future. Therefore, I was really interested in KCI. I met with Mr. Tsukamoto and was able to participate in KCI. In addition, I was strongly attracted by the Wacoal
Group’s mission of “helping women to express their beauty,”
which Mr. Tsukamoto had stated. A further appeal of the institute for me was the use of Kyoto in its name and as its base.
I loved the idea of Kyoto being the ideal place from which totake on the world through fashion in the future because Kyoto
is a name recognized worldwide as the center of Japan’s
traditional culture, and it is an ancient city that has a wonderfultradition of wearing kimonos and other extravagant garments
as a cultural backdrop.
Rather than being an art gallery with limited financial
resources, KCI has given priority to and focused its efforts ongathering collections with value. Identifying fashion trends
and future value is extremely difficult. However, our historicalinnerwear and numerous other valuable collections and theinclusion of more Japanese fashion collections since the 1980s
have earned us a favorable reputation. Furthermore, we haveworked hard to prepare collection exhibition plans withunique appeal and hold exhibitions that have in-depth content worthy of researching. As a result, the institute has
attracted attention in Japan and overseas. The Future Beauty
Exhibition, which began in October 2010 in London andtoured seven cities around the world, expressed Japanesefashion’s powerful influence on the world stage. I am sure thisexhibition heightened the status of Japanese culture
worldwide.
In this way, KCI’s activities are contributing significantly tothe mission of “helping women to express their beauty.”
Having many people see beautiful fashion that transcends
eras fosters the belief that people, not just women, can bebeautiful. In a sense, KCI provides spiritual support for women
worldwide by displaying beautiful fashion.

Kyoto Costume Institute

The Future Beauty Japanese Fashion exhibition
at The National Museum of Modern Art, Kyoto© Photograph, Osamu Watanabe, Kyoto Costume InstituteSince its establishment in 1978, Kyoto Costume Institute (KCI) has
not had a large-scale exhibition facility. Instead, it is a research
center that focus on gathering, storing, researching, and displaying
items related to fashion. The institute’s extremely valuable collectionof 12,000 garments and 16,000 documents of cultural interest has
been carefully selected and assembled to provide a view of the
future that links with the past. KCI draws on its expertise andfarsightedness to hold high-quality exhibitions. From Kyoto,
it displays to the world the power of Japanese fashion.

35

Environmental Conservation Activities
In its global business activities, the Wacoal Group views the conservation of the environment as a corporate responsibility.
In accordance with a spirit of mutual trust that aims to coexist with society, we will conserve the global environment with “making
a commitment to the future, spreading smiles, and creating a beautiful Earth” as our motto. Seven domestic Group companies
and two overseas Group companies have obtained certification under the ISO 14001 standard. Furthermore, four of our plants inJapan are certified under the Kyoto Environmental Management System Standard (KES).

Results of Activities 
Office paper use

Electricity use
Fiscal 2007
Down

33.8%

11.2%

Fiscal 2015

32.7%

Waste emissions

Fiscal 2007

Fiscal 2007
Down

16,738,000kwh

29.4 million sheets
Fiscal 2015

Down

28.9%

Fiscal 2007
Down

946,000m

3

25.8%

Fiscal 2015

1,587tFiscal 2015

1,108,600kwh

26.1 million sheets

673,000m

1,178tCO2 emissions(electricity, gas)*

Waste incineration

Water use

Recyclepercentage

Fiscal 2007
Down

Gas use3

Fiscal 2007

Fiscal 2007
Down

8,802t75.3%

Fiscal 2015

5,927t

Down

324t

18.6%

Fiscal 2015

80.1t

Fiscal 2007
Down

140,000m3

16.3%

Fiscal 2015

114,000m

80%
Fiscal 201593%3

* Only CO2 emissions resulting from electricity and gas equivalent values based on fiscal 2011

The Wacoal Group’s Original Self-Evaluation Indicators (for Wacoal Holdings Corp. and Wacoal Corp.) 
Value-added carbon footprint* ratio
We measure effect by calculating how much value we have added per unit of CO2 emissions. This indicator is shown as the product of value-added labor productivity (value added ÷ total hours worked) and CO2 emissions per work hour. We aim to affect theactions of each individual by adopting a different approach that focuses on two areas: heightening the capabilities of each
employee so that they work efficiently and reducing environmental burden during operational hours.
* Carbon footprint (CFP) includes CO2 emissions resulting from electricity, gas, water, and waste. For CO2 emissions resulting from energy, equivalent values for each region are used.

Value-added carbon
footprint ratio

Value
added

Value
added

CFP

Total hours
workedFiscal 2011

Down 1.25 million / t

8.75 million / t

Total hours
workedCFP

Fiscal 2015

7.50 million / t¥29.13 billion

9,197 hours¥30.27 billion

9,286 hours

9,197 hours

3,328 t9,286 hours

4,038t‌
Labor
productivity has increased slightly. However, the value of the indicator has declined due to an increase in the carbon footprint resulting from higher dependence on thermal power generation. Further, compared with the equivalent value for fiscal
2011, the indicator for fiscal 2015 has improved significantly to ¥10.7 million / t.
For details, please see the corporate social responsibility section of our web site.
www.wacoalholdings.jp/en/csr/pr_environment.html
36

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

Overcoming the Earthquake Disaster

The Tunic Store, Miyako Town, Iwate Prefecture “Commitment to Local Residents”—Partnership based on trust paving the way to the future—
The Great East Japan Earthquake, which occurred on March
11, 2011, damaged many business clients who have worked in
the women’s innerwear business for many years as our partners. Although some businesses have been forced to close
stores, many business owners are making a fresh start and aredetermined to reopen stores that are indispensable for local
communities. In response, we have been helping such businesses in whatever small way we can to bring smiles back to
the faces of customers and pave the way to the future.
Four years after the earthquake, Miyako in Iwate Prefectureis still far from being fully restored. Nevertheless, Mr. Murakami,
the owner of Tunic, a women’s innerwear store in the town,
rebuilt the store only three-and-a-half months after the disaster. We asked him about the challenges of that time and his
commitment to local residents.
“The store I built seven years ago—the culmination of many
years of effort—was swept away in an instant. At the time, theshock was so great that I didn’t have the strength to restart
the business. However, I received many e-mails from customers saying they wanted me to reopen the store. I was really
happy. I thought to myself, ‘I can’t continue in this frame ofmind,’ and became more positive from then on. I quickly

found another store and was able to reopen at the end ofJune. For one week after the “resurrection festival”, manycustomers visited, to the point where it felt as if I was constantly operating the cash register. In three days, I sold out
200 non-wire brassieres that I priced at ¥500. Some customers
had been using the same innerwear for two weeks. It broughthome to me the real shortage of products. Seeing the mutual
happiness of customers meeting friends and finding out they
were unharmed made me really glad that I hadn’t given up
and had reopened the store. I am grateful to Wacoal, whichreally helped me by providing fixtures, mannequins, andhangers when the store opened. This is by no means an easybusiness, but I will do my best to create a store rooted in thelocal community that brings a smile to customers’ faces.”
Since its foundation, innerwear specialty stores have progressed with and supported the growth of the Wacoal Group.
Suburban shopping centers and Internet sales have led to adecrease in the number of stores. However, in some regions
there are still many indispensable stores that link people. We
hope that these stores continue to pave the way to the futurewith us as our long-standing partners.

Tunic in Miyako

The store owner’s wife, Fumiko Murakami (left), and daughter

37

Message from Top Management

Yoshikata Tsukamoto
President and Representative Director
Wacoal Holdings Corp.

Based on a spirit of mutual trust with all stakeholders, the Wacoal Group
continues efforts to “contribute to society by helping women to express
their beauty,” which is its corporate mission.
Also, as a company empathetic to women, we will create unique valuethat earns the endorsement of women worldwide to establish a stronger global
presence for the Wacoal Group.

Leveraging the Group’s Collective Strength in theMedium-Term Management Plan’s Final YearIn fiscal 2015, ended March 31, 2015, net sales decreased 1.0%
year on year, to ¥191.765 billion. In other words, we achieved
95.9% of the plan’s ¥200 billion or higher target for fiscal 2016.
Although significant yen depreciation inflated the sales ofoverseas businesses, domestic businesses faced lackluster
demand, which resulted from conservative consumer spending
after a consumption tax rate increase, and higher prices due toyen depreciation. Meanwhile, operating income decreased
48.9% year on year, to ¥7.082 billion, considerably below theplan’s target of ¥14.0 billion or above. As well as the decline in
net sales, this was attributable to the significant effect of

38

recognizing impairment losses of ¥6.021 billion for Peach John
Co., Ltd.
In the current fiscal year, I am confident that we can reach themedium-term management plan’s targets because impairment
losses will not affect results, domestic businesses are on track
to recovery, and overseas businesses are performing robustly.
Our basic policy is to return profit to shareholders stably, inlight of consolidated business results. We intend to benefit
shareholders by continuing to increase dividends steadily. For
the fiscal year under review, in accordance with plans at the
beginning of the fiscal year, we paid cash dividends of ¥30.00
per share. As a result, the payout ratio was 50.0%, up from
46.0% in the previous fiscal year.

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Capitalizing on the Wacoal Group’s Accumulated
Trust-Related Assets
One of the Wacoal Group’s basic business management
strategies is to create products loved by customers. However,products truly loved by customers cannot be realized
overnight. Our products are packed with value resulting froma range of assets that we have built. As this report explains,trust-related assets are an invaluable strength. We have cultivated these assets over many years, although they are difficult
for an outsider to see. Underpinning trust-related assets is themutual trust between individuals in our relationships withcustomers, business partners, employees, and society.
The phrase “mutual trust” is included in our vision. The
phrase’s importance for the Wacoal Group originates fromlabor–management negotiations held about 15 years after its
foundation. The Group’s founder, Koichi Tsukamoto, sought tochange the relationship with the labor union from one of confrontation to one of cooperation. Accordingly, he declaredthat the Group would accept the union’s demands without
reservation. Over time, this spirit of mutual trust has become
ingrained into all of our business activities and helped us
build trust-related assets with diverse stakeholders.
Since our foundation, we have spent a great deal of timeheightening the quality and functionality of products to create
innerwear that contributes to women’s beauty. Thanks to theefforts of our predecessors, we have established a reputation asa trusted brand among customers and business partners aroundthe world. We aim to grow trust-related assets by continuing tocreate products loved by customers and developing new products catering to current needs in a manner that does not betraythe trust in and expectations of the Wacoal brand.

Fostering Autonomous, Innovative Personnel andInculcating Common Values
Within our trust-related assets, autonomous, innovative
personnel play an important role. Therefore, fostering such
personnel is indispensable if we are to heighten our enterprisevalue. We have operating bases in regions worldwide, and ourworkforce is diversifying as it includes employees who work incountries and regions with different customs and cultures.
This makes sharing the Wacoal Group’s values importantwhen fostering personnel. Therefore, we are spreading themutual trust approach in-house by ensuring each employee
properly understands such facets of it as our management
philosophy and founding spirit.
While we will make changes to adapt to current needs, wemust adhere to and pass on our management philosophy no

Message from Top
Management

Management
Foundation

Financial Section

matter how business conditions change. Moreover, the sharing of this philosophy is most meaningful if all Group employees, regardless of age, share it. Some mid-career employees,
who will support us over the coming generation, have volunteered to be the standard-bearers of efforts to spread theGroup’s values. In this way, awareness is spreading throughthe Group gradually but steadily.
That said, we must always be careful that mutual trust does
not become mutual dependence. Mutual trust does not mean
asking for a partner’s trust, it means earning the partner’s
trust. I intend to continue emphasizing this point.

Achieving a Stronger Global Presence
for the Wacoal GroupI think that my role going forward should be to discover andfoster autonomous, innovative personnel with the talent tolead us in the coming generation and give them theopportunity to exercise their abilities. In addition, I think weneed to establish systems that enable women to advancewithin our organization and contribute even more. Although
the Wacoal Group has many female personnel due to thenature of its business, female managers are scarce. To address
this issue, we have established the Diversity Career Support
Group, which is creating systems to help female employees
who have ambition and ability but are hesitant about advancing their careers and becoming leaders. Of course, irrespective of gender, we will give priority to promoting highly
motivated personnel with real ability. I think women’s particular viewpoint and approach will benefit our women’s innerwear business enormously.
The Wacoal Group is expected to continue facing increasingly challenging business conditions. However, I am very
confident that the product appeal and brand power we havebuilt are second to none. We will sustain growth going forward
by continuing to pass on the spirit of mutual trust to the next
generation while providing customers with value only we areable to create. Through these initiatives, we will consolidate
the foundations of an even stronger global presence for the
Wacoal Group.
As we advance, I would like to ask our shareholders andother investors for their continued support and understanding.
August 201539

Directors and Audit & Supervisory Board Members
Wacoal Holdings Corp. and Subsidiaries
As of June 26, 2015

Kiyotaka Hiroshima
Standing Audit &Supervisory Board
MemberTomoki Nakamura

Masaya Wakabayashi

Hironobu Yasuhara

Standing Audit &Supervisory
Board Member

Managing Director

Senior Managing
Director

Yoko Takemura

Madoka Mayuzumi

Outside Audit &Supervisory Board Member

Outside Director

LawyerOutside Statutory Auditor,
ADEKA Corporation

40

Visiting Professor, Department ofJapanese Language and Literature,
Department of Literature, Kyoto
Tachibana University
Councilor, Governing Council of East
Japan Railway Culture Foundation
Councilor, The National
Art Center, Tokyo

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Yuzo IdeManaging Director

Management
Foundation

Masashi Yamaguchi
Mamoru Ozaki

Director

Outside Director

Yoshikata Tsukamoto

Atsushi Horiba

President andRepresentative Director

Outside Director

Financial Section

Advisor, Yazaki Sogyo Corporation
Outside Director, Fujikyuko Co., Ltd.
Outside Director, Kikkoman Corporation

Representative Director andChairman and President, HORIBA, Ltd.
Representative Director and President,
HORIBA STEC, Co., Ltd.
Outside Director, Rock Field Co., Ltd.

Hiroshi Shirai
Outside Audit &Supervisory Board Member
President, Shirai Certified Public
Accountant OfficeMember, Appropriate
Performance of Duties Committee
Outside Auditor,
ALTECO Co., Ltd.

Akira Katayanagi
Outside Audit & Supervisory
Board Member
Special Advisor, Mitsubishi UFJ
NICOS Co., Ltd.
Outside Audit & Supervisory Board
Member, TOTO Ltd.

41

Corporate Governance

The overriding goal of the Wacoal Group’s corporate governance is to continuously grow enterprise value by ensuring thatmanagement is highly transparent, equitable, and objective with respect to all stakeholders, including shareholders, other­investors, and customers.

Management Philosophy and Corporate
Governance
The Wacoal Group’s management philosophy is based on
mutual trust. This is a value that the Wacoal Group aims tocarefully preserve in its relationships with shareholders, otherinvestors, and all other stakeholders with a vested interest in
the Group. To that end, the Group will steadily build andstrengthen governance systems pursuant to laws and statutory regulations while working to ensure that every individualin the Group, from the management team through to employees, is aware of the social signiﬁcance of the Wacoal Groupand adheres to good ethical conduct. We believe that properly functioning corporate governance based on mutual trust
is indispensable in order to achieve sustained growth and further increase enterprise value.

Corporate Governance System
Employment format

Company with board ofcompany auditors

Reason for employment
Under this corporate governance system, meetings of the Board of
Directors reach decisions reﬂecting the view points of directors conversant
with respective businesses and objective, neutral advice from outside
directors with extensive business experience and specialized knowledge.
In addition, the Audit & Supervisory Board includes outside audit &supervisory board members. The Wacoal Group believes this system
ensures the corporate governance of Group companies and effectively
improves and maintains the quality of business management for all
stakeholders, including shareholders and customers.
Number of directors:

8 (including 1 woman)Number of outside directors:

3

Directors’ term of office:1 yearNumber of corporate auditors:

5 (including 1 woman)Number of outside corporate auditors:

3

Independent auditor:

Deloitte Touche Tohmatsu LLC

Corporate Auditors and the Internal Audit DivisionCorporate auditors and the internal audit division (Office ofCorporate Auditors) hold report verification meetings monthly.
These meetings primarily verify reports on the main points ofmeetings that corporate auditors attend and report on theactivities of the Office of Corporate Auditors. The Group has asystem for sharing documents and other information required
for audits. To facilitate efficient, effective audits both parties
coordinate through such measures as mutual exchanges andverification of audit working papers.

42

As of June 26, 2015, the internal audit division (Office ofCorporate Auditors) had 12 personnel.
Further, corporate auditors and the independent auditor
meet six times a year. At these meetings they report and verify
audit plans and audit progress and exchange opinions aboutbusiness management. Also, they meet as required.

Outside Directors and Outside Audit & Supervisory
Board Members
The Wacoal Group appoints outside directors with outstanding
experience in corporate management garnered from duties inﬁnancial administration and overseas business development
and an outside director who has made wide-ranging contributions to the fields of art and culture in Japan and overseas. By
providing objective, neutral advice based on their extensive
business experience and specialized knowledge in a range ofﬁelds, outside directors enhance the appropriateness of directors’ decision making. Further, the Group appoints as outside
audit & supervisory board members individuals who haveexperience of corporate management in the ﬁnancial industry
and certiﬁed public accountants who are independent fromthe Group and have a high level of expertise with regard toﬁnance and accounting. While retaining a high degree of independence, these outside audit & supervisory board members
draw on their expertise to undertake strict auditing of the legality of directors’ decision making and operational execution.
In addition, to support the outside directors the Corporate
Planning Office distributes agendas of meetings of the Boardof Directors and provides explanations to outside directors inadvance. Similarly, the Group appoints dedicated assistants foraudit & supervisory board members, including outside audit &supervisory board members. In-house audit & supervisoryboard members or their assistants explain the agenda of theBoard of Directors to outside audit & supervisory board members in advance.
Furthermore, to encourage the appointment of capable outside directors and outside audit & supervisory board members, the Group’s articles of incorporation enable theconclusion of contracts between the Group and outside
directors and outside audit & supervisory board members that
limit liability for damages to the Group within a certain extent.

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Criteria for the Election of Officers
To elect directors and corporate auditors, the Executive
Compensation Advisory Committee of Wacoal Holdings
Corp. (the Company) nominates candidates meeting the election criteria below and submits nominations as agenda items
for approval by the general shareholders’ meeting.
1	Outstanding integrity and expertise and sound physical and mental
health
2. Strong commitment to legal compliance
3.	Extensive experience in fields of business operations, corporate
management, law, government, accounting, education, or culture
and arts
4.	Regarding outside directors and outside corporate auditors (outside
officers), non-infringement of “Criteria for Independence of Outside
Officers,” which is stipulated separately
5.	Regarding outside officers, not currently serving as officer of morethan four listed companies
6.	Through election of said candidate, achievement of balance ofknowledge, experience, and specialist capabilities and securing ofdiversity in the Board of Directors and the Audit & Supervisory Board

Criteria for Independence of Outside Officers
Outside officers of the Company should have sufficient independence to ensure that no conflict of interest arises withgeneral shareholders. Accordingly, the Company shall selectas candidates for the position of outside officer persons towhom none of the items below apply.
1.	A person who has belonged to the Company or its subsidiaries (theGroup) as an executing person, even if only on one occasion
2.	A major shareholder who owns personally, or owns in the name ofanother person, 5% or more of the Company’s shares on a votingrights basis; if the said major shareholder is a corporation,organization, or other body (corporation, etc.), an executing person
who belongs to the said corporation, etc.
3.	(1) A‌ person who is a major business client of the Group or a major		 supplier of the Group; if the said person is a corporation, etc.,
		 an executing person who belongs to the said corporation, etc.
(2) A major lender to the Group; if the said lender is a corporation,
		 etc., an executing person who belongs to the said corporation, etc.
(3) An executing person who belongs to a lead managing 				 securities company associated with the Company(4) A n executing person who belongs to a corporation, etc., in which
the Group owns 5% or more of the shares on a voting-rights basis
4.	A certified public accountant who belongs to an audit corporationthat is the independent auditor of the Group
5.	A specialist, such as a lawyer, accountant, tax accountant, patent
attorney, or consultant, who receives a significant amount ofmonetary or other financial assets from the Group; if the said person
is a corporation, etc., a specialist who belongs to the said
corporation, etc.
6.	A person who receives significant donations from the Group; if thesaid person is a corporation, etc., an executing person who belongs
to the said corporation, etc.
7.	An executing person whose appointment would result in a
relationship of reciprocal positions between an outside officer of theGroup and an outside officer of the company to which the said
executing person belongs

Message from Top
Management

Management
Foundation

Financial Section

8.	A spouse or person within the second degree of kinship of any ofthe persons (restricted to important persons) mentioned above in 1.
through 7.
9.	A person to whom any of the classifications in 1. through 8. above
has been applicable in the past three years
10.	A person in relation to whom special reasons have been recognized
as a result of which a conflict of interest with the generalshareholders of the Company could arise
Further, even though one of the classifications in 2. through 9. above
is applicable to a person, in exceptional circumstances and after stating
the reasons for its decision, the Company can select the said person asa candidate for the position of outside officer if the said person meetsthe requirements of an outside officer pursuant to the Companies Act
and if the Company judges the person suitable for the position of outside officer.

Reasons for Appointment of the Said
Outside Directors
Mamoru Ozaki
It is anticipated that he will help enhance the transparency and objectivity of
the Company’s business management given his specialist knowledge andwide-ranging professional experience in such fields as financial administration.
Atsushi Horiba
It is anticipated that he will help strengthen the overseas development of
the Company’s businesses given his abundant experience and insight as acorporate manager in relation to business development in Japan andoverseas as well as his strong leadership and extensive knowledge.
Madoka Mayuzumi
As a haiku poet, Madoka Mayuzumi has made wide-ranging contributions
to the fields of art and culture in Japan and overseas. Madoka Mayuzumi’s
expertise and experience is expected to contribute to our efforts to realize
business management that emphasizes diversity, making her an appropriate outside director for the Group.

Reasons for Appointment of the Said Outside Audit& Supervisory Board Members
Akira Katayanagi
Long experience in the ﬁnancial industry and a wide range of experienceand expertise in other industries make Akira Katayanagi an appropriate
outside audit & supervisory board member for the Group.
Yoko Takemura­
Legal knowledge as an attorney and experience accumulated throughspecialization in commercial matters make Yoko Takemura an appropriate
outside audit & supervisory board member for the Group.
Hiroshi Shirai­
Specialized knowledge of accounting and finance as a certified public
accountant, including U.S. GAAP, make Hiroshi Shirai an appropriate outside audit & supervisory board member for the Group.

43Corporate Governance Structure
As of June 26, 2015
In-house

Outside (male)Outside (female)

General Shareholders’ MeetingGroup Management Meeting

5 Directors

2 ‌Audit & Supervisory
Board Members

Quarterly BusinessResults Review
Committee

Group Strategy
Meeting

8 Directors

5 Directors

Board of Directors

8 Directors

Audit &
Supervisory Board

5 Audit &Supervisory
Board Members

Independent
Accountants

5 Audit & Supervisory
Board Members

Audit & Supervisory Board Secretariat

5 Audit & Supervisory
Board Members

2 ‌Audit & Supervisory
Board Members

Representative
Director

Representative of EachCompany and Department

Representative of EachCompany and Department

Office of Corporate Auditors

Risk Management Committee (20 members)

Operating Subsidiary

Compliance Committee (15 members)

Operating Subsidiary

Corporate Ethics Committee (11 members)

Operating Subsidiary

Operating Subsidiary

Corporate Ethics Hotline

Attendance of Outside Directors at Meetings of theBoard of Directors
April 2014–March 2015

44

Executive Compensation Advisory
Committee (4 members)

Mamoru Ozaki

Attended 14 from a total of 14

Atsushi Horiba

Attended 10 from a total of 14

Attendance of Outside Audit & Supervisory Board Members
at Meetings of the Board of Directors and the Audit &Supervisory Board
April 2014–March 2015
Board of Directors

Audit & Supervisory Board

Akira Katayanagi

Attended 10from a total of 14

Attended 11
from a total of 15

Tomoharu Kuda

Attended 14
from a total of 14

Attended 15
from a total of 15

Yoko Takemura

Attended 13
from a total of 14

Attended 14
from a total of 15

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

System for Compensation of Executives
The Executive Compensation Advisory Committee, which
includes outside directors, has designed a highly objective andtransparent system for compensation of executives.

Determination of Dividends from Retained Earnings
In order to return proﬁts to shareholders ﬂexibly, the Group’s
articles of incorporation stipulate that resolutions of the Boardof Directors determine cash dividends from retained earnings,
unless otherwise stipulated by related laws and statutory
regulations.

Group Management Systems‌The Group has established regulations and a basic policy forthe management of Group companies. The Group also stipulates items that the Board of Directors of the Company must
decide upon and items that must be reported to theCompany.
‌Transactions between Group companies must be equitableand pursuant to laws and regulations, accounting principles,
and tax systems.
‌The Office of Corporate Auditors conducts internal audits ofGroup companies, which include audits of the status of theconstruction and operation of compliance systems and risk
management systems. The Office of Corporate Auditors
reports the results of these audits to the Board of Directors
and the divisions with jurisdiction over respective Group
companies. At the same time, the Office of Corporate
Auditors ensures Group companies conduct operations
appropriately by providing them with directions and advice
on the construction of such systems.
‌Based on a corporate officer system, we will delegate authority and clarify responsibility and build an appropriate andefficient system.

Message from Top
Management

Management
Foundation

Financial Section

Defensive Measures against Takeovers through theAcquisition of a Substantial Share Holding of
the Company
After the Group’s June 2009 ordinary general shareholders’meeting passed a resolution authorizing the adoption of abasic policy on measures against the acquisition of a substantial shareholding of the Group, the Board of Directors decided
upon speciﬁc countermeasures reﬂecting that basic policy.
Further, the June 2015 ordinary general shareholders’ meeting
renewed this policy.
In principle, the Group does not oppose the acquisition oflarge shareholdings that contribute to the enhancement of theenterprise value and shareholders’ common interests. The
Group’s defensive measures against takeovers, or peace-time
takeover defensive measures, include providing advance warning that there are procedures prospective purchasers of theGroup’s shares must follow and that a gratis allocation of
acquisition rights for the subscription of new shares withdiscriminatory treatment for the exercise of such rights may be
implemented. In addition, the Group has established theIndependent Committee to ensure that initiations of defensive
measures against takeovers are based on substantive, objective decisions and not based on arbitrary decisions by the
Board of Directors.

For details, please see the corporate governance section of
our web site.
www.wacoalholdings.jp/en/csr/pr_cg.html

Details of Remunerations Paid to Officers
Aggregate Amount of Remunerations, etc., by Type Thereof (Millions of yen)

Aggregate Amount of
Remunerations, etc.
(Millions of yen)

Basic Remuneration

Stock Option

Bonus

Retirement
Allowance

Number of Relevant
Officers

Directors (Excluding Outside Directors)

290

210

44

35

−

6

Audit & Supervisory Board Members (Excluding
Outside Audit & Supervisory Board Members)

33

33

−

−

−

2

Outside officers

39

39

−

−

−

5

Category of Officers

Aggregate Amount, etc., of the Consolidated Remunerations, etc., of any Person Who Receives¥100 Million or More as Remunerations, etc., on a Consolidated BasisAmount of Consolidated Remunerations, etc., by Type Thereof (Millions of yen)
Name

Category of Officer

Yoshikata
TsukamotoDirector
Director

Retirement
Allowance

Basic Remuneration

Stock Option

Bonus

Wacoal Holdings Corp.

109

21

16

−

Wacoal Corp.

24

−

−

−

Relevant Company

Aggregate Amount ofConsolidated
Remunerations, etc.
(Millions of yen)

170

45

Managment’s Discussion and Analysis
Wacoal Holdings Corp. and Subsidiaries

Financial information contained in this section is based on the

Share of Net Sales

consolidated financial statements included in this integrated report,

2015

which have been prepared in accordance with generally accepted

Hosiery

1.3%

Outerwear andsportswear

accounting principles in the United States (U.S. GAAP). The Wacoal

8.4%

Group consists of 1 holding company (the Company), 56 consolidated

Textile products

4.0%Children’s
underwear

subsidiaries, and 10 equity-method affiliates.

Other

0.7%

The Wacoal Group is engaged in the manufacturing, wholesaling,
and—for certain products—retailing of women’s foundation garments

6.2%
Foundation garments
and lingerieNightwear

and lingerie, nightwear, children’s underwear, outerwear and sports-

5.0%

74.4%

wear, hosiery, and other textile products. Other operations include
restaurant businesses, cultural and service-related operations, and theconstruction of interiors for commercial premises.

Over the past five fiscal years, fluctuations in our sales have typi-

OVERVIEW 
We are a leading designer, manufacturer, and marketer in Japan of
women’s intimate apparel, with the largest share of the Japanesemarket for foundation garments and lingerie. Foundation garments(primarily brassieres and girdles) and lingerie (primarily slips, bra-slips,
and women’s briefs) accounted for 74.4% of our consolidated net sales
for fiscal year 2015. We also design, manufacture, and sell nightwear,
children’s underwear, outerwear, sportswear, hosiery and other appareland textile products, and several other services.

cally reflected changes in unit volume, as average unit prices havegenerally remained stable during this period.
• COST OF SALES
Our cost of sales arises principally from material and manufacturingcosts related to the production of our apparel products.
• SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Our selling, general and administrative expenses principally consistof employee compensation and benefit expenses and promotional• NET SALES
We principally generate revenues from sales of innerwear (consisting offoundation garments and lingerie, nightwear, and children’s underwear),outerwear and sportswear, hosiery, textile products, and other products.
For fiscal year 2015, approximately 80% of the net sales of Wacoal
Corp. (the net sales of which account for approximately 59% of ourconsolidated net sales) were apparel sales made on a wholesale basis
to department stores, general merchandisers, and other generalretailers and approximately 18% were apparel sales made through ourown specialty retail stores, catalogue sales, and the Internet. Sales
from our other businesses (which include cultural products and otherservices) constituted the remaining, approximately 2%, of Wacoal
Corp.’s net sales for fiscal year 2015.

expenses, such as advertising costs and renovation costs. Other
selling, general and administrative expenses include shipping andhandling costs, payment fees (including outsourcing payments), andrental payments for our specialty retail stores.
• KEY INDUSTRY TRENDS
We believe that the following have been key trends in our industry
during the last two fiscal years:(i) ‌In the domestic innerwear market, sales began to decrease due to a
decline in customer confidence as a result of growing consumer awareness of the need to hold off from spending after the consumption tax
increase, in addition to the influence of rising prices associated with theweakening yen and other increasing burden, while the female population is declining. Although the overall purchase price range has

Net Sales to External Customers (and Percentage) by Product Category
Millions of yen

2014

2015

2013

Innerwear¥142,681

74.4%¥144,783

74.7%¥132,525

Nightwear

Foundation Garments and Lingerie

9,514

5.0%

9,301

4.8%

9,221

5.1%

Children’s Underwear

1,373

0.7%

1,475

0.8%

1,465

0.8%
79.4%

Total Innerwear

46

73.5%

153,56880.1%

155,55980.3%

143,211Outerwear and Sportswear

16,227

8.4%

16,9548.8%

17,287

9.6%

Hosiery

2,437

1.3%

1,791

0.9%

1,559

0.9%

Textile Products

7,616

4.0%

8,577

4.4%

7,580

4.2%

Other

11,917

6.2%

10,9005.6%

10,593

5.9%

Total

¥191,765

100%¥193,781

100%¥180,230

100%

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

decreased, the high-price market was revitalized by wealthy

below the results for the previous fiscal year due to a weak demand

segments of the population encouraged by high stock prices.

affected by pullbacks in consumer spending after the consumption(iii) ‌Purchases are increasing in sales channel at locations other thantax increase and the influence of rising prices associated with thetraditional selling spaces such as department stores, general

weakening yen, mainly with regard to our core operating entity,

merchandisers and specialty stores for underwear. Consumer

Wacoal Corp., despite the fact that sales from our overseas businesspurchasing behavior has changed and diversified as seen in growing

were inflated by the sharp depreciation of the yen. In terms of profit,

sales from Internet sales, and directly-managed stores and casual

operating income fell largely below the results for the corre-apparel shops resulting from shop openings at retail shopping malls.

sponding period of the previous fiscal year due to a decrease in(iiii) ‌The apparel market is becoming competitive due to major outer-sales and due to the impact of impairment charges of 6,021 million

wear manufacturers entering the market, in addition to specialty

yen as a result of the reassessment of the fair value of our Peachapparel companies and non-store retailing. Retailers andJohn business.

specialty store retailers of private label apparel are making
efforts to improve the frequency of use by increasing customer
contacts through direct retail sales, website sales, and other
Internet sales. Companies are also strengthening the development of “private brand” merchandise at general merchandisers.
Manufacturing companies are making efforts to strengthen
direct sales and OEM and to develop new sales channels.
(ivi) ‌These manufacturers and other competitors are producing
lower priced women’s innerwear garments by sourcing fabricand producing garments in lower cost countries in Asia, but due
to the weakening yen and a rise in labor costs, tend to develop

Net sales:		191,765 million yen (a decrease of 1.0% ascompared to the previous fiscal year)
Operating income:	7,082 million yen (a decrease of 48.9% ascompared to the previous fiscal year)
Pre-tax net income:	11,342 million yen (a decrease of 24.6% ascompared to the previous fiscal year)
Net income attributable to Wacoal Holdings Corp.:			8,444 million yen (a decrease of 16.4% ascompared to the previous fiscal year)

products at a higher price with value-added features.
(vi) ‌Companies are conducting new marketing strategies to achieve more

Cost of Sales

diversified sales channels and exposure to new consumer groups.

Our cost of sales decreased 0.3% from 91,008 million yen for fiscal

We have taken steps for two fiscal years to address these key

year 2014 to 90,722 million yen for fiscal year 2015. Cost of sales as aindustry trends to build on the core strengths of our market

percentage of net sales increased 0.3% from 47.0% for fiscal year

position and brand awareness among Japanese consumers. We

2014 to 47.3% for fiscal year 2015 due to an increase in the ratio ofhave taken steps to reduce our cost structure, such as producing

sales achieved by our domestic subsidiaries with a high cost rate.

more products in lower-cost countries in Asia, consolidating andstreamlining our product distribution centers and reviewing indi-

Selling, General and Administrative Expenses

rect expenses. We are also seeking to expand sales in overseas

Our selling, general and administrative expenses decreased 1.1%

markets—in particular China, the United States, and Europe, asfrom 88,913 million yen for fiscal year 2014 to 87,940 million yen forwell as in the ASEAN region, where we have been trying tofiscal year 2015. This decrease was mainly due to a decrease inincrease sales through our directly managed stores and website.

pension costs at Wacoal Corp., in addition to our efforts in cost

Additionally, we intend to extend our innerwear product offerings

reduction, such as advertising costs.

into the midprice range in our product mix to help us reach abroader consumer base. We will continue to implement these

Goodwill and Other Intangible Assets

steps and evaluate other strategies to address challenges andAt the end of fiscal year 2015, we examined potential impairment

opportunities in the industry going forward.

charges on the trademarks and goodwill, all of which are recorded
as other intangible fixed assets of Peach John, pursuant to its busi-

SUMMARY OF BUSINESS RESULTS 

ness plan, and accordingly, recorded 1,176 million yen and 4,845• SUMMARY OF OPERATIONS

million yen of impairment charges, respectively. There were no

Our Group entered the second year of our three-year mid-term plan

impairment charges for fiscal year 2014.

(from fiscal year 2014 to fiscal year 2016), and we (primarily Wacoal
Corp., our core operating entity) made efforts to expand our share

Operating Marginof sales while responding to the diversifying domestic women’s

Our operating margin decreased 3.5% from 7.2% for fiscal year 2014

innerwear market, establish a system for our business other than theto 3.7% for fiscal year 2015. This decrease was mainly due to thewomen’s innerwear business and strengthen growth by actively

impairment charges recorded for the Peach John business in addi-

developing our overseas business.

tion to decreased sales from existing businesses, despite our cost

As a result of the above, with respect to our consolidated busi-

reduction efforts by the entire Group.

ness results for fiscal year ended March 31, 2015, overall sales fell47

Other Income/Expenses

performance as a result of improved customer traffic which we

We recorded 4,260 million yen as other income, an increase of 3,087

achieved by trying new strategies, including holding various monthly

million yen, as compared to 1,173 million yen of other income

events and making collaboration products with models and stylists.

recorded for fiscal year 2014. This increase was mainly due to the gain

We were also successful in handling inbound customer service byon sale and exchange of marketable securities and investments

increasing duty-free stores with respect to our Wacoal Factory Store inincrease of 1,501 million yen from fiscal year 2014 and the gain ofoutlet malls, and as a result, overall sales exceeded the results for the

1,405 million yen from the sale of paintings.

previous fiscal year.

Net Income Attributable to Wacoal Holdings Corp.

“CW-X” brand were weak as our renovations of store displays and

Net income attributable to Wacoal Holdings Corp. for fiscal year 2015

investments in contracts with top athletes did not have an immediate

was 8,444 million yen, a decrease of 1,662 million yen as compared toeffect. In addition, although shop sales of certain products jointly

fiscal year 2014 as a result of a deterioration in our operating margin,

developed with a major pharmaceutical company performed favorably,

despite an increase in other income and a decrease in tax expense

this favorable performance did not boost our overall sales. As a result,associated with subsidiary restructuring.

overall sales largely fell below the results for the previous fiscal year.

• SUMMARY OF OPERATIONS BY OPERATING SEGMENT

weak for the entire season. With respect to our Internet sales, our

Wacoal Business (Domestic)

initiatives to strengthen web advertisement to recover momentum

In our domestic business, we sought to focus on five categories

which had been influenced by the shutdown of our website in April,(region, age-group, pricing, restructuring of manufacturing domain

did not have much effect, and as a result, overall sales fell largely

and inventory control) and established a system to enhance customer

below the results for the previous fiscal year.

In our wellness business, sales of our sports conditioning wear

In our catalog sales business, sales from our catalog products were

contact and respond to changes in the external environment.

In summary, overall sales attributable to our “Wacoal Business

However, our overall business faced difficult operating conditions(Domestic)” segment fell below the results for the previous fiscal year

due to the influence of a delay in recovery of personal consumption

due to poor sales from Wacoal Corp., our core operating entity, which

after the consumption tax increase after the beginning of the fiscal

fell below the results from the previous fiscal year. With respect toyear ended March 31, 2015, despite a recovery in demand for certain

profitability, our operating income also fell largely below the results forhigh-priced products.

the previous fiscal year largely due to decreased sales, despite our

Overall sales from our Wacoal brand business fell below the results

efforts at Wacoal Corp. to reduce selling, general and administrative

for the previous fiscal year due to the poor performance of our coreexpenses and to hold down an increase in processing charges andbrassiere products and bottom products, despite steady performancepurchasing costs, which were impacted by the weak yen.

of newly-launched exclusive brand products intended for a single channel
exclusively, pre-stage brand products and brand products for seniors.
In our Wing brand business, although sales were strong for our
new bottom products sold in the autumn and winter and undergarments with highly seasonal functionality meeting the needs of ourconsumers, overall sales fell largely below the results for the previous

Net sales:		112,203 million yen (a decrease of 5.0% ascompared to the previous fiscal year)
Operating income:	8,444 million yen (a decrease of 9.0% ascompared to the previous fiscal year)

fiscal year due to the weak performance of our core brassieres products because we were unable to achieve brand recognition as a result

Wacoal Business (Overseas)of discontinuing our TV commercials and because we were unable toIn the United States, Wacoal America Inc. made efforts to achieve

achieve product differentiation from other competing products.

strong profits by expanding its share in the high-end market andIn our retail business, sales from our directly managed retail store,

through streamlining development production structure. While sales at

AMPHI, which is mainly located in shopping malls, showed favorable

department stores continue to be weak, overall sales on a local
currency basis exceeded the results for the previous fiscal year as aresult of strong performance of our core brassieres products, thelaunch of our new Europe Collection in January, and expanding sales
from Internet sales and sales from our business in surrounding countries. In terms of profit, operating income exceeded the results for theprevious fiscal year due to an increase in net sales.

SG&A Expenses / % of Net Sales

48

With respect to our business in China (from January 1 to December31), we made efforts in improving profitability by enhancing gross¥ billion / %
2015

45.9

87.9

2014

45.9

88.9

2013

46.8

2012

46.3

79.6

2011

46.9

77.7

84.3

margin rate, as well as nurturing of brands targeting the middle-classmarket. Although sales of our high-priced brand products at department stores performed poorly due to the effects of laws regulating
expenditures, sales on a local currency basis remained unchanged from

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

Message from Top
Management

CSR Activities

Management
Foundation

Financial Section

the results for the previous fiscal year as a result of an increase in thesales fell below the results for the previous fiscal year as a result of

number of shops which handle LA ROSABELLE, our brand targeting

poor performance of our directly-managed stores in China.

the middle-class market, and strong Internet sales. In terms of profit,

As a result of the above, overall sales from our Peach John busi-

gross margin rate significantly improved as a result of achieving aness fell largely below the results for the previous fiscal year. In terms

higher local procurement rate and the expansion of bargain productsof profit, we recorded a significant operating loss due to decreased

in Internet sales and outlet malls. In addition, operating income largely

sales, higher cost rate which was impacted by the weak yen, andexceeded the results for the previous fiscal year as a result of theimpairment charges on goodwill and other intangible assets.

discontinuation of underperforming shops and strategic arrangementof employees.
With respect to Wacoal Europe, we made efforts in expanding our
Wacoal brand business and in developing management infrastructureso that Wacoal Europe can play a central role in our business in Europe
by promoting collaboration with Wacoal America, Inc. Sales in the
United Kingdom showed strong performance as a result of the

Net sales:		11,626 million yen (a decrease of 6.9% ascompared to the previous fiscal year)
Operating deficit:	6,296 million yen (as compared to 83 million yenof operating income incurred for the previous
fiscal year)

recovery of sales at department stores and the expansion of our
Wacoal brand products, despite a decrease in the number of tourists

Other

visiting from Russia and the Middle East. On the other hand, sales inWith respect to our business under the “Other” segment, we madethe Euro area, particularly in France, showed weak performance due toefforts in establishing a stable profit structure and in strengthening

slow consumer spending affected by economic instability in Europe. In

management bases.

addition, sales from department stores in the United States showedWith respect to the business of Lecien Corporation (“Lecien”),

poor performance partially due to changes of MD policy by certain

although sales from our material business showed favorable perfor-

clients. As a result, sales on a local currency basis fell below the resultsmance as a result of new transactions, overall sales from Lecien fell

for the previous fiscal year, but sales on a yen converted basis

largely below the results for the previous fiscal year due to the weakexceeded the results for the previous fiscal year due to the sharp

performance of our core innerwear business division, as well as ourdepreciation of the yen. In terms of profit, operating income largely fell

apparel business division. In terms of profit, although profitability is

below the results for the previous fiscal year as a result of both

improving as a result of the full operation of a factory at our overseas

decreased sales and costs incurred in connection with changes in thesubsidiaries, we recorded an operating loss as a result of a lower grossstructure of our business in Europe.

margin rate due to higher processing charges and purchasing costs,

As a result of the above, overall sales and operating income underthe “Wacoal Business (Overseas)” segment largely exceeded theresults for the previous fiscal year.

which were impacted by the weak yen, in addition to the influence of
decreased sales.
As for Nanasai Co., Ltd. (“Nanasai”), which engages in manufacturing, sales and rentals of mannequins and interior design andNet sales:		48,107 million yen (an increase of 10.2% ascompared to the previous fiscal year)
Operating income:	4,776 million yen (an increase of 18.3% ascompared to the previous fiscal year)

construction of stores at commercial facilities, while the sales businessperformed poorly, sales from the rental business exceeded the results
for the previous fiscal year as a result of new transactions. Sales fromthe construction business also showed strong performance as a resultof an increase in the number of orders received from clients, and as aresult, overall sales exceeded the results for the previous fiscal year.

Peach John BusinessWith respect to our Peach John business, we made efforts to expand
sales by increasing the number of customers. Our efforts in making
our website more user-friendly did not significantly contribute to the
expansion of sales and sales of our outerwear products and generalmerchandise showed weak performance. As a result, sales from ourcore mail-order catalogues fell largely below the results for the

In terms of profit, operating income fell below the results for theprevious fiscal year due to the influence of the higher cost rate in theconstruction business.
As a result of the above, with respect to the overall sales and operating income attributable to our “Other” segment, overall sales
exceeded the results for the previous fiscal year, while operating
income fell largely below the results for the previous fiscal year.

previous fiscal year, despite stable sales of innerwear which remained
unchanged from the previous fiscal year. Net sales attributable to ourdomestic direct retail stores exceeded the results for the previous
fiscal year as a result of the increasing number of shop openings,
including the introduction of our new business-style shops targeting

Net sales:		19,829 million yen (an increase of 1.3% ascompared to the previous fiscal year)
Operating income:	158 million yen (a decrease of 65.4% ascompared to the previous fiscal year)

young adults and career professionals. With respect to our overseas
business, despite our favorable performance in Hong Kong resulting
from shop openings and an increase in the number of customers,

49

strategic arrangement of employees.

• SUMMARY OF OPERATIONS BY REGION

With respect to the directly-managed overseas stores of Peach

Japan
With respect to Wacoal Corp., overall sales fell below the results for

John, while sales in Hong Kong showed favorable performance as a

the previous fiscal year due to weak demand affected by pullbacks inresult of shop openings and an increase in the number of customers,

consumer spending after the consumption tax increase and the influ-

sales in China showed poor performance.

ence of rising prices associated with the weakening yen. In terms of

As a result of the above, sales from our business in Asia/Oceania

profit, operating income also fell below the results for the previous

amounted to 16,261 million yen, an increase of 9.3% as compared tofiscal year largely due to decreased sales, despite our efforts to reduce

the previous fiscal year.

selling, general and administrative expenses and to hold down an
increase in costs.

Europe/North America

With respect to Peach John, while sales attributable to our domestic

With respect to Wacoal America Inc., sales on a local currency basis

direct retail stores increased as a result of the increasing number ofexceeded the results for the previous fiscal year as a result of the strong

shop openings, overall sales fell below the results for the previous

performance of our core brassieres products, and expanding sales fromfiscal year due to the weak performance of our core mail-order cata-Internet sales and sales from our business in surrounding countries.

logues. In terms of profit, we recorded an operating loss due to

In terms of profit, operating income also exceeded the results for thedecreased sales and a higher cost rate which was impacted by theprevious fiscal year due to an increase in net sales.

weak yen.

With respect to Wacoal Europe, sales in the United Kingdom

With respect to the business of Lecien Corporation (“Lecien”),

showed strong performance as a result of the expansion of our Wacoal

although sales from our material business showed favorable perfor-

brand products, while sales in the Euro area, particularly in France,

mance as a result of new transactions, overall sales fell below theshowed weak performance due to the influence of economic instability

results for the previous fiscal year due to the weak performance of ourin Europe. Sales from department stores in North America showed poor

core women’s innerwear and outerwear products. In terms of profit,

performance partially due to changes of MD policy by certain clients.

we recorded an operating loss as a result of a higher cost rate which

As a result, sales on a local currency basis fell below the results for

was impacted by the weak yen, in addition to the influence ofthe previous fiscal year. In terms of profit, operating income largely fell

decreased sales.

below the results for the previous fiscal year as a result of decreased

As for Nanasai Co., Ltd. (“Nanasai”), while the sales businessperformed poorly, overall sales exceeded the results for the previous

sales and costs incurred in connection with changes in the structure ofour business in Europe.

fiscal year as a result of new transactions in the rental business and an

As a result of the above, sales from our business in Europe/North

increase in the number of orders received from clients in the construc-

America amounted to 32,254 million yen, an increase of 10.5% astion business. In terms of profit, operating income fell below thecompared to the previous fiscal year.

results for the previous fiscal year due to the influence of the higher
cost rate in the construction business.

LIQUIDITY AND CAPITAL RESOURCES 

As a result of the above, sales from our business in Japan

Our current policy is to fund our cash needs from cash flows fromamounted to 143,250 million yen, a decrease of 4.3% compared to theoperations, which allows us to secure working capital, make capital

previous fiscal year.

investments, and pay dividends without relying on substantial borrowings or other financing from outside of our Group companies. As of

Asia/Oceania

March 31, 2015, we had credit facilities at financial institutions totaling

With respect to Wacoal China, although sales of our high-priced

39,569 million yen, and the used credit lines for financing amounted tobrand products at department stores performed poorly, sales on a

14,079 million yen. Of this credit, 6,500 million yen is used by Wacoal

local currency basis remained unchanged from the results for theHoldings Corp., 3,957 million yen is used by Wacoal Europe Ltd., 3,284

previous fiscal year as a result of an increase in the number of shops

million yen is used by Wacoal Service Co., Ltd., and 338 million yen iswhich handle LA ROSABELLE, our brand targeting the middle-classused by Nanasai.
In general, most of our credit facilities have automatically renewedmarket, and strong Internet sales. In terms of profit, operating income
largely exceeded the results for the previous fiscal year due to theterms, and we are not aware of any issues that could cause these facili-

improved profitability that resulted from achieving a higher local

ties to become unavailable. Even if any of our subsidiaries loses accessprocurement rate, discontinuation of underperforming shops andto funds from our credit facilities, we believe that it is possible for

Net Cash Provided by Operating Activities

Capital Investment¥ billion¥ billion

14.3

2015
2014

2014

8.9
12.3

2013

50

4.5

2015

3.5
3.2

2013

2012

10.1

2012

2.7

2011

10.4

2011

2.7

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

other companies in our Group to provide any necessary funds. Ourborrowing requirements are not affected by seasonality.
We are not aware of any restrictions on the transfers of funds from a

Message from Top
Management

Management
Foundation

Financial Section

As for retained earnings, with the aim of improving our corporate
value, we have actively invested in expanding new points of contact with
consumers for our domestic business and investing in our overseas

subsidiary to a parent company in the form of a cash dividend, loan, or cash

businesses. We also plan to use our retained earnings in our strategic

advance. We believe our working capital is adequate for our present

investments for maintaining competitiveness and reinforcing growth.

requirements and for our business operations in the short to long term.

With these efforts, we seek to benefit our shareholders by improving future
profitability. We also intend to flexibly acquire treasury stock, and we will try

CASH FLOW STATUS 

to improve capital efficiency and return profits to our shareholders.

The balance of cash and cash equivalents at the end of fiscal year 2015
was 38,410 million yen, an increase of 7,752 million yen as compared

RESEARCH AND DEVELOPMENTto the end of the previous fiscal year.

Our research and development activities are mainly conducted by our
Human Science Research Center to achieve harmony between the• CASH FLOW PROVIDED BY OPERATING ACTIVITIESCash flow provided by operating activities during the fiscal year 2015

human body and clothing and to support better product making.
Since 1964, we have been conducting research into the female

was 14,337 million yen, an increase of 5,388 million yen as comparedbody in order to accurately understand the Japanese woman’s

to the previous fiscal year, which reflects the result after adjusting thephysique. In particular, we have developed a silhouette analysis

net income of 8,744 million yen for depreciation expenses andsystem and introduced a three-dimensional measuring system. We aredeferred taxes, as well as changes in assets and liabilities.

also working on an even more advanced measurement of sensory
comfort. Our research and development activities focus on addressing• CASH FLOW PROVIDED BY INVESTING ACTIVITIES

the proportional, physiological, and mental aspects of garment

Cash flow provided by investing activities during the fiscal year 2015

design. One of our most important research results was the enrich-

was 164 million yen, a decrease of 1,494 million yen as compared toment of our research on sensory comfort through our participation

the previous fiscal year, despite the acquisition of certain fixed assets,

in a project led by the Ministry of Trade and Industry (presently thedue to proceeds from the sale and redemption of marketable securi-

Ministry of Economy, Trade and Industry) from 1995 to 1998. Based onties and proceeds from the sale of painting.

this research, we have been focusing on developing new productsthat are not only comfortable for the wearer, but also have a positive• CASH FLOW USED IN FINANCING ACTIVITIES

physiological effect based on the basic study from three factors, which

Cash flow used in financing activities during the fiscal year 2015 was

are pressure, heat, and touch. In 2005, we developed and created

8,391 million yen, an increase of 2,837 million yen as compared to thea new market for our breakthrough Style Science series products,

previous fiscal year, due to the cash dividend payments and repay-

which support a healthy and beautiful body-making by changing thement of short-term bank loans (less than three months).

concept from daily walking to exercise walking. In 2010, we conducted
an analysis and announced principles on the physiological changes

SUMMARY OF CAPITAL INVESTMENT, ETC. associated with aging period from 20s to 50s. We also strengthened

The amount of capital investment for the fiscal year ended March 31,

development of new products coping with aging and we have been

2015, was 4,478 million yen. A majority of our capital investment wasworking on developing new functional products based on the lifestyleused in our new construction project of a business-use building, thehabit of people with small physical changes associated with aging.

information system investment for our domestic subsidiaries andOur Human Science Research Center is promoting research andmaintenance and repair work implemented for the real properties

development, which is based on a survey analysis of body shapes andheld by the Company.

needs of customers of the generation for which the products are intro-

The amounts of capital investment made in Wacoal Businessduced and senior generation.

(Domestic), Wacoal Business (Overseas), Peach John Business, andIn terms of product development, during the fiscal year that ended

Other were 3,338 million yen, 742 million yen, 300 million yen, andin March 2015, we enhanced the development of new products which

98 million yen, respectively.

focus on “comfort” aspect and of new products which can attract
young adults, an age group that do not wear girdles.

DIVIDEND POLICY 
Our basic policy on profit distribution to shareholders is to makestable distributions based on consideration of our consolidated

As a result of the above, we recorded 869 million yen for our
research and development during the fiscal year ended March 2015.
In order to promote “the realization of supporting industry for

performance, while seeking to increase our enterprise value throughwomen with unbounded living beauty,” we will make efforts to enrichactive investment aimed at higher profitability and to increase net

our research and development activities that can contribute to theincome per share. Based on our basic policy, we provide a fiscal year-

improvements of customer satisfaction and corporate value based on

end dividend once a year.

the key concept of beauty, comfort, and health. We will also work

We also prescribe that the Company may distribute earnings
subject to the resolution of the Board of Directors’ meeting pursuant

toward strengthening product appeal and developing new products
or services that can gain support from and satisfy our customers.

to the provisions of Article 459 of the Companies Act.
Based on such policy, we plan to distribute the year-end dividend of
30.00 yen per share as a distribution of earnings for the current fiscal year.

51

Consolidated Balance Sheets
Wacoal Holdings Corp. and Subsidiaries

Thousands of U.S.
dollars (Note 2)

2015

2014

2015

ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Time deposits
Marketable securities (Notes 3, 20 and 21)
Notes and accounts receivable (Note 18)
Allowance for returns and doubtful receivables (Note 4)Inventories (Note 5)
Deferred income taxes (Note 17)
Other current assets (Notes 18, 20 and 21)
Total current assets¥ 38,410
2,687
2,387
26,544(2,409)42,893
5,488
4,264
120,264¥ 30,658
2,168
3,523
26,269(2,321)
40,211
4,848
4,132
109,488$   320,190
22,39919,898221,274(20,082)
357,561
45,74935,545
1,002,534

PROPERTY, PLANT AND EQUIPMENT:Land (Note 9)
Buildings and building improvements (Notes 9 and 11)
Machinery and equipment (Note 9)
Construction in progress
Total
Accumulated depreciation
Net property, plant and equipment

22,00964,038
16,760923
103,730(54,542)
49,18821,99463,024
15,446
147
100,611(51,633)
48,978183,470
533,828
139,713
7,694
864,705(454,668)
410,037

OTHER ASSETS:
Investments in affiliated companies (Note 6)
Investments (Notes 3, 20 and 21)
Goodwill (Notes 7, 8 and 21)
Other intangible assets (Notes 7, 8 and 21)
Prepaid pension expense (Note 12)
Deferred income taxes (Note 17)
Other
Total other assets

22,052
59,96318,75012,73910,577982
5,757
130,820

18,89445,951
22,723
13,688
5,666
1,008
5,592
113,522

183,828
499,858
156,302106,194
88,171
8,186
47,991
1,090,530

TOTAL¥300,272¥271,988$2,503,101

March 31, 2015 and 2014

See notes to consolidated financial statements.

52

Millions of yen

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

LIABILITIES AND EQUITYCURRENT LIABILITIES:
Short-term bank loans (Note 9)
Notes and accounts payable:
Trade notes
Trade accounts (Note 18)
Other payables
Accrued payroll and bonuses
Income taxes payable (Note 17)
Current portion of long-term debt (Notes 9 and 20)
Other current liabilities (Notes 20 and 21)
Total current liabilities
LONG-TERM LIABILITIES:Long-term debt (Notes 9 and 20)
Liability for termination and retirement benefits (Note 12)
Deferred income taxes (Note 17)
Other long-term liabilities (Notes 11, 12 and 17)
Total long-term liabilities

Management
Foundation

Financial Section

Millions of yen

Thousands of U.S.
dollars (Note 2)

2015

2014

2015

¥ 10,038¥ 16,630$   83,678

1,031
11,346
6,686
6,936
2,064
534
3,667
42,302

1,064
10,657
5,764
7,085
1,224
695
3,489
46,608

8,595
94,582
55,73557,81917,206
4,451
30,568352,634

4,245
1,680
18,796
1,681
26,402822
1,795
13,611
1,616
17,84435,387
14,005
156,685
14,013220,090

13,26029,642
155,264

13,26029,587
151,468

110,537
247,099
1,294,298

10,831
20,821
1,934
33,586(2,895)
228,857
2,711
231,568

2,310
11,606(227)
13,689(2,898)205,106
2,430
207,536

90,289173,566
16,122279,977(24,133)
1,907,778
22,5991,930,377¥300,272¥271,988$2,503,101

COMMITMENTS AND CONTINGENCIES (Notes 9, 10 and 13)
EQUITY:WACOAL HOLDINGS CORP. SHAREHOLDERS’ EQUITY (Notes 14 and 23):
Common stock, no par value authorized, 500,000,000 shares in 2015 and 2014;
issued 143,378,085 shares in 2015 and 2014
Additional paid-in capital (Note 14)
Retained earnings
Accumulated other comprehensive income (loss) (Note 16):
Foreign currency translation adjustments
Unrealized gain on securities
Pension liability adjustments (Note 12)
Total accumulated other comprehensive income
Treasury stock, at cost - 2,537,276 shares and 2,539,371 shares in 2015 and 2014, respectively
Total Wacoal Holdings Corp. shareholders’ equity
NONCONTROLLING INTERESTS
Total equity
TOTAL

53

Consolidated Statements of Income
Wacoal Holdings Corp. and Subsidiaries

Years Ended March 31, 2015, 2014 and 2013

NET SALES (Note 18)
OPERATING COSTS AND EXPENSES:
Cost of sales (Notes 5, 12 and 18)
Selling, general and administrative expenses (Notes 1, 7, 10, 11, 12 and 15)
Impairment charges on goodwill (Notes 8 and 21)
Impairment charges on other intangible assets (Notes 8 and 21)
Total operating costs and expenses
OPERATING INCOME
OTHER INCOME (EXPENSES):Interest income
Interest expense
Dividend income
Gain or loss on sales or exchange of marketable securities and investments - net (Note 3)
Valuation gain or loss on marketable securities and investments - net (Notes 3 and 21)
Gain on sales of paintings
Other - net (Notes 1, 3 and 21)
Total other income (expenses) - net
INCOME BEFORE INCOME TAXES AND EQUITY IN NET INCOME OF AFFILIATEDCOMPANIES (Note 17)
INCOME TAXES (Note 17):
Current
Deferred
Total income taxes
INCOME BEFORE EQUITY IN NET INCOME OF AFFILIATED COMPANIESEQUITY IN NET INCOME OF AFFILIATED COMPANIES (Note 6)
NET INCOME
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTSNET INCOME ATTRIBUTABLE TO WACOAL HOLDINGS CORP.

Years Ended March 31, 2015, 2014 and 2013

NET INCOME ATTRIBUTABLE TO WACOAL HOLDINGS CORP. PER SHARE (Note 19):
Basic
DilutedNET INCOME ATTRIBUTABLE TO WACOAL HOLDINGS CORP. PER AMERICANDEPOSITARY RECEIPT (5 shares of common stock) (Note 19):
Basic
DilutedMillions of yen

Thousands of U.S.
dollars (Note 2)

2015¥191,765

2014¥193,781

2013¥180,2302015$1,598,574

90,722
87,9404,845
1,176
184,683
7,082

91,00888,913179,921
13,86084,54884,331
1,197
1,655
171,7318,499

756,269
733,078
40,3889,803
1,539,538
59,036

142
(98)
1,011
1,585
(14)
1,405
229
4,260

97
(105)
831
84
(47)

85
(164)
789
2,208
(325)

313
1,173

(152)
2,441

1,184
(817)
8,428
13,213(117)
11,712
1,909
35,512

11,342

15,033

10,94094,5485,223(1,920)
3,303
8,039
705
8,744
(300)
¥  8,444

5,256
385
5,641
9,392
985
10,377(271)¥ 10,106

6,638(2,866)
3,772
7,168
939
8,107
(227)
¥  7,880

43,539(16,005)
27,53467,014
5,877
72,891(2,501)$   70,390

Yen

U.S. dollars(Note 2)

2015

2014

2013

2015

¥ 59.95¥ 59.80¥ 71.75¥ 71.61¥ 55.95¥ 55.86

$0.50
$0.50

¥299.77¥299.00¥358.77¥358.03¥279.74¥279.29

$2.50
$2.49

Millions of yen

Thousands of U.S.
dollars (Note 2)

See notes to consolidated financial statements.

Consolidated Statements of Comprehensive Income
Wacoal Holdings Corp. and Subsidiaries

Years Ended March 31, 2015, 2014 and 2013

NET INCOME
OTHER COMPREHENSIVE INCOME, NET OF TAX (Note 16):
Foreign currency translation adjustments:
Amounts arising during the year
Reclassification adjustments
Total foreign currency translation adjustments
Unrealized gain on securities:
Amounts arising during the year
Reclassification adjustments
Total unrealized gain on securities
Pension liability adjustments:
Amounts arising during the year
Reclassification adjustments
Total pension liability adjustments
OTHER COMPREHENSIVE INCOME
COMPREHENSIVE INCOME
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTSCOMPREHENSIVE INCOME ATTRIBUTABLE TO WACOAL HOLDINGS CORP.

54

See notes to consolidated financial statements.

2015¥ 8,7442014¥10,3772013¥ 8,1072015$ 72,891

8,671

5,072

72,282

8,671

8,342
27
8,369

5,072

72,282

10,216
(974)
9,242

2,313
(11)
2,302

6,474
(1,352)
5,122

85,161(8,119)77,042

2,332
(176)
2,156
20,06928,813(472)¥28,341

1,468
233
1,701
12,372
22,749(412)¥22,337

625
423
1,048
11,242
19,349(316)¥19,033

19,440(1,467)
17,973
167,297
240,188(3,934)$236,254

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

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Management

CSR Activities

Management
Foundation

Financial Section

Consolidated Statements of Equity
Wacoal Holdings Corp. and Subsidiaries

Millions of yen

Years Ended March 31, 2015, 2014 and 2013

Shares of
Outstanding
CommonStock(Thousands)

CommonStock

Additional
Paid-in
CapitalBALANCE, APRIL 1, 2012

140,851¥13,260¥29,447

Net income

Retained
Earnings

Accumulated
Other
Comprehensive Income(Loss)

TreasuryStock¥141,370¥ (9,695)¥(2,886)7,880

Foreign currency translation adjustments

4,992

Total Wacoal
Holdings Corp.
Shareholders’ Noncontrolling
EquityInterests¥171,496¥1,932

7,880

227

8,107

4,992

80

5,072

9

5,122

Unrealized gains on securities

5,113

5,113

Pension liability adjustments

1,048

1,048

Cash dividends paid to Wacoal Holdings Corp.
shareholders, ¥140 per 5 shares of common stock(3,944)

Sale of treasury stock

(11)

(10)

(10)

1

1

1

Equity transactions with noncontrolling interests(Note 14)BALANCE, MARCH 31, 2013

(3,944)(96)

Acquisition of subsidiaries

Share-based compensation granted andexercised (Note 15)

1,048(3,944)

Cash dividends paid to noncontrolling interests
Repurchase of treasury stock17
3
140,84417

50
13,26029,514

Net income

145,306

1,458

3

53

(2,892)

186,646

10,106

Total Equity¥173,428

(96)
(10)
1

208

208

(181)

(164)

2,179

188,825
10,377

53

10,106271

Foreign currency translation adjustments

8,234

8,234

135

8,369

Unrealized gains on securities

2,296

2,296

6

2,302

Pension liability adjustments

1,701

1,701

Cash dividends paid to Wacoal Holdings Corp.
shareholders, ¥140 per 5 shares of common stock(3,944)

1,701(3,944)

Cash dividends paid to noncontrolling interests(3,944)
(148)

(148)

Repurchase of treasury stock

(6)

(6)

(6)

(6)

Sale of treasury stock

1

0

0

0

Equity transactions with noncontrolling interests(Note 14)

4

4

Share-based compensation granted (Note 15)

69

69

BALANCE, MARCH 31, 2014

140,839

13,26029,587

Net income

151,468

13,689(2,898)

8,444

(13)

(9)
69

205,106

2,430

207,536

8,444

300

8,744

Foreign currency translation adjustments

8,521

8,521

150

8,671

Unrealized gains on securities

9,215

9,215

27

9,242

Pension liability adjustments

2,161

2,161

(5)

2,156

Cash dividends paid to Wacoal Holdings Corp.
shareholders, ¥165 per 5 shares of common stock(4,648)(4,648)Cash dividends paid to noncontrolling interests
Repurchase of treasury stock

(3)

(3)

Equity transactions with noncontrolling interests(Note 14)
Share-based compensation granted andexercised (Note 15)
BALANCE, MARCH 31, 2015

(4,648)(190)

05140,8410

55¥13,260¥29,642

(3)

6

61

¥(2,895)¥228,857

TreasuryStock

Total Wacoal
Holdings
Corp. Shareholders’Equity

(190)
(3)

(1)

(1)

¥2,711¥231,568

61¥155,264¥33,586

Retained
Earnings

Accumulated
Other
Comprehensive Income(Loss)$246,641 $1,262,654$114,113$(24,158) $1,709,787
70,3902,501

72,891

Foreign currency translation adjustments

71,032

71,032

1,250

72,282

Unrealized gains on securities

76,81776,817

225

77,042

Pension liability adjustments

18,01518,015(42)

17,973Thousands of U.S. dollars (Note 2)

Years Ended March 31, 2015

BALANCE, MARCH 31, 2014

CommonStock$110,537

Additional
Paid-in
Capital

Net income

70,390Cash dividends paid to Wacoal Holdings Corp.
shareholders, $1 per 5 shares of common stock(38,746)(38,746)(1,584)

Repurchase of treasury stock(25)

Equity transactions with noncontrolling interests(Note 14)0

Share-based compensation granted andexercised (Note 15)458$110,537$247,099 $1,294,298

(25)
0

50
$279,977

Total Equity$20,257 $1,730,044(38,746)

Cash dividends paid to noncontrolling interests

BALANCE, MARCH 31, 2015

Noncontrolling
Interests(1,584)
(25)

(8)

(8)

508

508

$(24,133) $1,907,778$22,599 $1,930,377

See notes to consolidated financial statements.

55

Consolidated Statements of Cash Flows
Wacoal Holdings Corp. and Subsidiaries

Years Ended March 31, 2015, 2014 and 2013

OPERATING ACTIVITIES:Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Share-based compensation (Note 15)
Provision for returns and doubtful receivables - net
Deferred income taxes
Gain or loss on sales or disposal of property, plant and equipment - net
Impairment charges on goodwill (Notes 8 and 21)
Impairment charges on other intangible assets (Notes 8 and 21)
Gain or loss on sales or exchange of marketable securities and investments - net (Note 3)
Valuation gain or loss on marketable securities and investments - net (Notes 3 and 21)
Gain on sales of paintings
Equity in net income of affiliated companies, less dividends
Changes in assets and liabilities:
Decrease (increase) in notes and accounts receivable
Increase in inventories(Increase) decrease in other current assets
Increase (decrease) in notes and accounts payable
Decrease in liability for termination and retirement benefits
Increase (decrease) in accrued expenses, income taxes payable and other current
liabilities
Other
Net cash provided by operating activities
INVESTING ACTIVITIES:
Increase in time deposits
Decrease in time deposits
Proceeds from sales and redemption of available-for-sale securities (Note 3)
Payments to acquire available-for-sale securities
Proceeds from redemption of held-to-maturity debt securities
Payments to acquire held-to-maturity debt securities
Proceeds from sales of paintings
Proceeds from sales of property, plant and equipment
Capital expenditures
Payments to acquire intangible assets (Note 8)
Proceeds from sales of other investments
Payments to acquire other investments
Acquisitions of subsidiaries, net of cash acquired and payments to acquire additional
shares of a subsidiaries (Note 7)
Payments to acquire additional shares of affiliated companies
Proceeds from sales of shares of affiliated companies
Other
Net cash provided by (used in) investing activities
FINANCING ACTIVITIES:(Decrease) increase in short-term bank loans with three months or less maturity - net
Proceeds from issuance of short-term bank loans with more than three months maturity
Repayments of short-term bank loans with more than three months maturity
Proceeds from issuance of long-term debt
Repayments of long-term debt
Repurchase of treasury stock
Sale of treasury stock
Dividends paid on common stock
Dividends paid to noncontrolling interests
Net cash (used in) provided by financing activities
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR

Millions of yen

Thousands of U.S.
dollars (Note 2)

2015

2014

2013

2015

¥ 8,744¥10,377¥8,107$ 72,891

5,074
60
(45)
(1,920)
38
4,845
1,176
(1,585)14(1,405)
(27)

5,036
69
365
385
94

(84)
47

4,888
53
269
(2,866)
103
1,197
1,655
(2,208)
325

(272)

(359)

42,297500(375)(16,005)317
40,388
9,803(13,213)
117(11,712)(225)

534(1,038)(442)
1,302(1,601)(1,368)(339)
636(1,541)
(827)

1,438
(680)
(215)
(1,905)
(853)

4,451
(8,653)(3,684)
10,854(13,346)505
108
14,337(3,649)
20
8,949

3,215
145
12,3094,210
900
119,515(3,548)3,383
4,499(1,353)
114
(568)
1,785
174
(3,093)(1,385)124(2,347)
2,291
4,685
(57)
113
(322)

(1,846)836
1,578(3,828)
334
(340)

24
(2,265)(1,199)762

64(2,475)
(855)
767
(461)

(29,576)
28,20137,504(11,279)
950(4,735)
14,8801,450(25,784)(11,545)
1,034

(1)

(8)
(16)

(17,070)
(253)

6
27
164

(3)
1,658

29
(23,520)(6,784)(455)(4,648)(190)(8,391)
1,642
7,752
30,658¥38,410

(901)
(6)
0
(3,944)(148)(5,554)
1,091
6,144
24,514¥30,658

10,524
353
(578)
2,039
(2,910)(10)
1(3,944)
(96)
5,379
361
(5,471)
29,985¥24,514(38,746)(1,584)(69,948)
13,68864,622
255,568$320,190¥   100
4,497¥   988,305¥   1614,275$    834
37,487¥   419¥  582¥ 1,450¥   429¥ 3,775$  3,493

(100)
4,460
(1,226)
(3)

(8)
50
225
1,367
(56,552)

37,179(10,220)(25)

ADDITIONAL CASH FLOW INFORMATION:
Cash paid for:
Interest
Income taxes
NONCASH INVESTING ACTIVITIES:Fair value of certain marketable securities received in exchange for other marketablesecurities (Note 3)
Acquisition of property, plant and equipment by assuming payment obligation
Sales of investments (Note 3)
See notes to consolidated financial statements.

56

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

Notes to Consolidated Financial Statements
Wacoal Holdings Corp. and Subsidiaries

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF FINANCIAL STATEMENTS— Wacoal Holdings Corp. (thein earnings. Held-to-maturity securities are measured at amortized“Company”) and subsidiaries are predominantly engaged in one

cost. The Companies classify debt securities as held to maturity only if

industry, the manufacture and sale of apparel, including foundation

the Companies have the positive intent and ability to hold those secu-

garments, lingerie, nightwear and outerwear in Japan, the United

rities to maturity. Available-for-sale securities are carried at fair value

States of America, Europe and certain Asian countries.

with a corresponding recognition of unrealized holding gains or losses

The accompanying consolidated financial statements, stated in(net of tax) in accumulated other comprehensive income or loss, aJapanese yen, have been prepared on the basis of accounting princi-

separate component of equity, until realized. Equity securities that doples generally accepted in the United States of America (U.S. GAAP).

not have readily determinable fair values are recorded at cost. GainsCONSOLIDATION—The consolidated financial statements include

and losses on sales of investments are computed based on cost deter-

the accounts of the Company and its majority-owned subsidiaries

mined using the average cost method.

(collectively, the “Companies”). All intercompany transactions andbalances are eliminated.

If a decline in the fair value of marketable securities and investments
is determined to be other than temporary, an impairment charge isSome foreign subsidiaries of the Company have a fiscal year

recorded in the consolidated statements of income. The Companies

ending December 31. The accounts of those subsidiaries are included

periodically determine whether a decline in the fair value of market-

in the Company’s consolidated financial statements based on theable securities and investments is deemed to be other than temporary

subsidiaries’ fiscal year. There were no material intervening events thatbased on criteria that include the duration of the market decline, theoccurred with respect to these subsidiaries.

extent to which cost exceeds fair value, the financial position and busi-

Investments in affiliated companies where the Companies’ ownership is 20% to 50% are accounted for using the equity method.
Significant influence is generally deemed to exist if the Companies

ness outlook of the issuer and the intent and ability of the Companies
to retain the impaired marketable securities and investments for a
sufficient period of time for anticipated recovery in fair value.

have an ownership interest in the voting stock of the investee between

ALLOWANCE FOR SALES RETURNS—Allowance for sales returns is

20% and 50%, although other factors are considered in determining

estimated based on historical products returns experience, sales

whether the equity method of accounting is appropriate.

movements, and the overall retail industry situation.

USE OF ESTIMATES —The preparation of consolidated financial state-

ALLOWANCE FOR DOUBTFUL RECEIVABLES—Allowance forments in conformity with U.S. GAAP requires management to makedoubtful notes and receivables is estimated based on historical collec-

estimates and assumptions that affect the reported amounts of assets

tion experience and additional information including current economic

and liabilities and disclosure of contingent assets and liabilities at theconditions and creditworthiness of each applicable customer.

date of the consolidated financial statements and the reported

INVENTORIES—Inventories are stated at the lower of cost or market,

amounts of revenues and expenses during the reporting period.

cost being determined by the first-in, first-out method for raw materials

Actual results could differ from those estimates.

and the average cost method for work in process and finished products.

CASH AND CASH EQUIVALENTS—Cash and cash equivalents

Cost includes net prices paid for materials purchased, production

include all time deposits (all of which are interest bearing) with originallabor cost, factory overhead and charges for customs duties.

maturities of three months or less.

PROPERTY, PLANT AND EQUIPMENT—Property, plant and equip-

FOREIGN CURRENCY TRANSLATION—Assets and liabilities ofment is stated at cost less accumulated depreciation and impairment

foreign subsidiaries have been translated to Japanese yen at period-

losses. Depreciation of property, plant and equipment is computed by

end exchange rates and income and expenses have been translated

the declining-balance method, except for buildings acquired on or

using average exchange rates for the period. Translation adjustments

after April 1, 1998, which are depreciated using the straight-line

resulting from the process of translating consolidated financial statements,

method, based upon the estimated useful lives of the assets.

net of tax, are included in accumulated other comprehensive income,The estimated useful lives are as follows:a separate component of equity. Exchange gains and losses resulting

Buildings and building improvements: 2 - 50 years (mainly 38 years)

from foreign currency transactions and the conversion of monetary

Machinery and equipment:

assets and liabilities denominated in foreign currencies are included in

Depreciation expenses for the years ended March 31, 2015, 2014

other income (expenses) in the consolidated statements of income.
Foreign currency translation gains (losses) for the years ended

2 - 20 years (mainly 5 years)

and 2013 are ¥3,356 million, ¥3,212 million and ¥3,037 million,
respectively.

March 31, 2015, 2014 and 2013 were ¥300 million, ¥161 million and

IMPAIRMENT OF LONG-LIVED ASSETS—The carrying values of long-¥(146) million, respectively. They have been included in other - net of

lived assets, held and used by the Companies, are evaluated forother income (expenses).

impairment whenever there is an event or change in circumstances

MARKETABLE SECURITIES AND INVESTMENTS—The Companies

that indicates that such assets have been impaired or that the carrying

classify their marketable securities and investments into one of threeamounts of such assets might not be recoverable. The carrying

categories: trading, held to maturity or available for sale. Trading

amount of a long-lived asset is not recoverable if it exceeds the sum

securities are bought and held principally for the purpose of sellingof the undiscounted cash flows expected to result from the use andthem in the near term. Trading securities are recorded at fair value andeventual disposition of the asset. That assessment shall be based on

unrealized holding gains and losses on trading securities are included

the carrying amount of the asset at the date it is tested for57

recoverability, whether in use or under development. The impairment

the pension obligation when the cost of all settlements in a year is lesslong-lived asset exceeds its fair value. The Companies recorded nothan or equal to the sum of the service cost and interest cost compo-

impairment charges on long-lived assets for the years ended Marchnents of net periodic pension cost for the plan for the year.

31, 2015, 2014 and 2013.

LEASES—Certain noncancelable leases are classified as capital leases

GOODWILL AND OTHER INTANGIBLE ASSETS— Goodwill repre-

and the leased assets are included as part of property, plant and equip-

sents the excess of the purchase price of an acquired entity over thement. Other leases are classified as operating leases and are not capitalized.

fair value of assets acquired and liabilities assumed.

The payments on such leases are recorded as expense. The rental

Goodwill and other intangible assets with indefinite useful lives are

expense under operating leases is recognized on a straight-line basis.

tested for impairment annually, or more frequently if conditions indi-

TREASURY STOCK—The Companies account for treasury stock undercate an earlier review is necessary. The goodwill is allocated to thethe cost method and include treasury stock as a component of equity.

reporting unit in which the business that created the goodwill resides.

ACQUISITIONS —The Companies account for acquisitions using the

To test for goodwill impairment, the carrying value of each reporting

acquisition method in accordance with the guidance for business

unit is compared with its fair value. If the carrying amount of a

combinations. The Companies allocate the purchase price to thereporting unit exceeds its fair value, the second step of the goodwill

assets acquired and liabilities assumed based on the estimated fair

impairment test is performed by comparing the carrying amount ofvalues at the date of acquisition, including intangible assets that canreporting unit goodwill with its implied fair value. If the carrying

be identified and named. The purchase price in excess of the fairamount of reporting unit goodwill exceeds its implied fair value,

value of the net assets is recorded as goodwill.

an impairment loss is recognized in an amount equal to that excess.

REVENUE RECOGNITION—The Companies recognize revenue on

To test for impairment of other intangible assets with indefinite

sales to retailers, mail order catalog sales and internet sales when (1)useful lives, the carrying value of an intangible asset is compared withpersuasive evidence of an arrangement exists, (2) delivery has

its fair value. If the carrying amount of an intangible asset with indefi-

occurred resulting in transfer of title and risk of loss, (3) the sales pricenite useful life exceeds its fair value, an impairment loss is recognizedis fixed or determinable, and (4) collectability is reasonably assured. As

in an amount equal to that excess.

for consignment sales, the Companies recognize revenue when the

Other intangible assets with estimable useful lives consist primarily

products are sold to the ultimate customer. The Companies recognizeof brands, customer relationships and software and are amortizedrevenue on direct retailing sales at the Companies’ directly managed

over their estimated useful lives using the straight-line method. The

retail stores at the point of sale to the customer.

estimated useful lives are as follows:

SHIPPING AND HANDLING COSTS—Shipping and handling fees

Brands:58

The Companies do not recognize a gain or loss on settlement ofloss is measured as the amount by which the carrying amount of a

20 - 25 years (mainly 25 years)

billed to customers are classified in net sales. Shipping and handling

Customer relationships: 7 years

costs are expensed as incurred. Shipping and handling costs for the

Software:years ended March 31, 2015, 2014 and 2013 were ¥5,487 million,

5 years

ASSET RETIREMENT OBLIGATIONS—The Companies have obligations¥5,708 million and ¥5,479 million, respectively, and have beenarising from contractual commitments to remove leasehold improve-

included in selling, general and administrative expenses.

ments from leased facilities and return the property to a specified

ADVERTISING EXPENSES—Advertising costs are expensed ascondition when the lease terminates. The Companies recognize asset

incurred. Advertising expenses for the years ended March 31, 2015,

retirement obligations at the inception of a lease. The asset retirement

2014 and 2013 were ¥13,103 million, ¥14,295 million and ¥13,146

obligations are measured with an expected present value techniquemillion, respectively, and have been included in selling, general andbased on historical experience and recorded in other long-term liabili-

administrative expenses.

ties in the consolidated balance sheets and are subsequently adjusted

RESEARCH AND DEVELOPMENT COSTS—Research and develop-

for changes in estimated disposal costs. The difference between thement costs are expensed as incurred. Research and development

gross expected future cash flow and its present value is accreted overcosts for the years ended March 31, 2015, 2014 and 2013 were ¥869

the life of the related lease, which is determined using best estimate

million, ¥808 million and ¥788 million, respectively, and have been

because the Companies’ lease contracts generally have automatic

included in selling, general and administrative expenses.

renewal articles. The associated estimated asset retirement costs are

CONSUMPTION TAXES—Consumption taxes have been excluded

capitalized as part of the carrying amount of the long-lived asset andfrom sales.

depreciated over its useful life.

INCOME TAXES —The provision for income taxes is determined under

TERMINATION AND RETIREMENT PLANS—Termination and retire-

the asset and liability method in accordance with the guidance forment benefits are accounted for in accordance with the guidance forincome taxes. Under this method, deferred tax assets and liabilities

retirement benefits. The Companies amortize net actuarial gains andare determined for temporary differences between the financial state-losses and prior service cost over the average employees’ remaining

ment and tax bases of assets and liabilities and tax loss carryforwards

service period by the declining-balance method and by the straight-

at presently enacted tax rates. A valuation allowance is recorded whenline method, respectively. Provisions for termination and retirement

it is more likely than not that some portion or all of the deferred tax

benefits include those for directors of the Companies.

assets will not be realized in the future.

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

The Companies assess their income tax positions and record tax

Message from Top
Management

Management
Foundation

Financial Section

requires the disclosure of information to enable users of financial

benefits for all years subject to examination based upon their evalua-statements to understand the nature, amount, timing, and uncertainty

tion of the facts, circumstances and information available as of the endof revenue and cash flows arising from contracts with customers. Thisof the fiscal year. For those tax positions only where there is greater

guidance is effective for fiscal years beginning after December 15,

than 50% likelihood that the tax position will be sustained, the2016 and interim periods within that annual period. The Company isCompanies record the largest amount of tax benefit that may poten-

currently evaluating the impact of adoption on the Company’s consoli-

tially be realized upon ultimate settlement with a taxing authority that

dated financial position, result of operations, or cash flows.

has full knowledge of all relevant information.

EXTRAORDINARY AND UNUSUAL ITEMS —In January 2015, theSHARE-BASED COMPENSATION—Share-based compensation is

FASB issued a new accounting standard related to extraordinary andaccounted for in accordance with the guidance for stock compensa-

unusual items. This guidance eliminates from U.S. GAAP the concept

tion. The Company measures share-based compensation cost at theof extraordinary items and the requirements to 1) segregate an

grant date, based on the fair value of the award and recognizes theextraordinary item from the results of ordinary operations, 2) present

cost over the requisite service period, which is the vesting period.

the item separately on the income statement, net of tax, after income

The fair value of the award is estimated using the Black-Scholes

from continuing operations and 3) disclose income taxes and earnings-

option-pricing model.

per-share data applicable to the extraordinary item. This guidance is

DERIVATIVES—Derivative instruments, including certain derivative

effective for fiscal years and interim periods within that annual period,

instruments embedded in other contracts, are accounted for in

beginning after December 15, 2015. It is not expected to have an impact

accordance with the guidance for derivatives and hedging. Because

on the Companies’ consolidated financial position, results of opera-such derivative instruments are not designated as hedges, changes

tions, or cash flows, since it relates only to disclosure requirements.

in the fair value are recorded in earnings.

FAIR VALUE MEASUREMENT— In May 2015, the FASB issued a new

SUBSEQUENT EVENTS—In accordance with the guidance for subse-

standard which amends fair value measurement. This standard

quent events, the Company has evaluated subsequent events throughremoves the requirement to categorize within the fair value hierarchy

June 26, 2015.

all investments for which fair value is measured using the net asset

RECLASSIFICATIONS—Certain reclassifications have been made tovalue per share practical expedient. The amendments also remove thethe prior years’ consolidated financial statements to conform to therequirement to make certain disclosures for all investments that are

current year’s presentation.

eligible to be measured at fair value using the net asset value per

RECENT ACCOUNTING PRONOUNCEMENTS:

share practical expedient. Rather, those disclosures are limited to

REVENUE RECOGNITION—In May 2014, the Financial Accounting

investments for which the entity has elected to measure the fair valueStandard Board (the “FASB”) issued a new accounting standard

using that practical expedient. This guidance is effective for fiscal

related to revenue recognition. This guidance is based on the principle

years beginning after December 15, 2015, and interim periods withinthat revenue is recognized to depict the transfer of promised goods or

those fiscal years. The adoption of this guidance is not expected toservices to customers in an amount that reflects the consideration tohave an impact on the Companies’ consolidated financial position,

which the entity expects to be entitled in exchange for those goods or

results of operations, or cash flows, since it relates only toservices. This standard provides comprehensive guidance, anddisclosure requirements.

2. TRANSLATION INTO U.S. DOLLAR STATEMENTS 
The consolidated financial statements are stated in Japanese yen, thebuying rate for yen in New York City as of March 31, 2015. Such trans-

currency of the country in which the Company is incorporated andlations should not be construed as representations that the Japanese

operates. The translations of Japanese yen amounts into U.S. dollar

yen amounts could be converted into U.S. dollars at the above or any

amounts are included solely for convenience of readers outside ofother rate.

Japan and have been made at the rate of ¥119.96 to $1, the noon59

3. MARKETABLE SECURITIES AND INVESTMENTS HELD-TO-MATURITY AND AVAILABLE-FOR-SALE SECURITIES—The fair value of debt and marketable equity securities classified as held tomaturity and available for sale is based on quoted market prices as of March 31, 2015 and 2014. The cost, gross unrealized gain and loss and thefair value of held-to-maturity and available-for-sale securities by major security type were as follows:
Millions of yen
2015

Available-for-sale securities:
Current:
		 National debt securities and municipal bonds
		 Corporate debt securities
		Mutual fund			Total
Noncurrent:		Equity securities
Held-to-maturity debt securities:
Current:
		 Corporate debt securities
Noncurrent:
		 Corporate debt securities

Cost

Gross
Unrealized Gain

Gross
Unrealized Loss

Fair Value¥    10500
1,104¥ 1,614¥     1291¥   292¥5¥5¥    10501
1,390¥ 1,901¥23,587¥34,461¥0¥58,048¥   486¥     0¥1¥   485¥   620¥     0¥3¥   617

Cost

Gross
Unrealized Gain

Gross
Unrealized Loss¥    10500
2,483¥ 2,993¥     2428¥   4305¥5¥    10502
2,906¥ 3,418¥23,844¥20,333¥7¥44,170¥3¥   102

Millions of yen
2014

Available-for-sale securities:
Current:
		 National debt securities and municipal bonds
		 Corporate debt securities
		Mutual fund			Total
Noncurrent:		Equity securities
Held-to-maturity debt securities:
Current:
		 Corporate debt securities
Noncurrent:
		 Corporate debt securities¥0¥   105¥   419

Fair Value¥     3¥   422

There were no available-for-sale and held-to-maturity securities that have been in a continuous unrealized loss position for more than
12 months as of March 31, 2015 and 2014. Gross unrealized holding losses and fair values of available-for-sale and held-to-maturity securities,
all of which have been in a continuous unrealized loss position for less than 12 months as of March 31, 2015 and 2014, were as follows:
Millions of yen

2014

2015

Available-for-sale securities:
Current:
		 National debt securities and municipal bonds
		Mutual fund			Total
Noncurrent:		Equity securities
Held-to-maturity debt securities:
Current:
		 Corporate debt securities
Noncurrent:
		 Corporate debt securities
As of March 31, 2015, the available-for-sale securities in a continuous

60

Fair Value

Gross
Unrealized Loss

Fair Value

Gross
Unrealized Loss

¥295
¥295

¥5
¥5

¥ 10
467
¥477

¥0
5
¥5

¥  1

¥0

¥144

¥7

¥242

¥1

¥102

¥3

¥375

¥3

Companies to retain the impaired available-for-sale and held-to-maturity

unrealized loss position are composed of one equity security and one

securities for sufficient period of time for anticipated recovery in fairmutual fund. The severity of decline was less than 13.1%. The Companies

value as described in Note 1. No available-for-sale and held-to-maturity

periodically determine whether a decline in the fair value of available-

securities were identified that meet the Companies’ criteria for recogni-

for-sale and held-to-maturity securities is deemed to be other thantion of an impairment loss on available-for-sale and held-to-maturity

temporary based on criteria that includes the duration of market

securities in unrealized loss position presented above. Therefore, thedecline, the extent to which cost exceeds fair value, the financial posi-Companies do not believe the unrealized losses represent an other-tion and business outlook of the issuer and the intent and ability of thethan-temporary impairment as of March 31, 2015 and 2014.

Overview of the
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CSR Activities

Future maturities of debt securities and mutual funds classified asavailable for sale excluding mutual funds without fixed maturities as ofMessage from Top
Management

Management
Foundation

Financial Section

Future maturities of debt securities classified as held to maturity asof March 31, 2015 were as follows:
Millions of yen

March 31, 2015, were as follows:
Millions of yen

Due within one year
Due after one year through five years
Due within ten years
More than ten years
Total

Cost

Fair Value¥  97210¥  98010300¥1,282295¥1,285

Due within one year
Due after one year through five years
Total

Cost

Fair Value¥  486620¥1,106¥  485617¥1,102

Proceeds from sales of available-for-sale securities and the gross realized gain or loss on the sales of available-for-sale securities during theyears ended March 31, 2015, 2014 and 2013, were as follows:
Proceeds from sales of available-for-sale securities during the year ended March 31, 2013, include accounts receivable of ¥3,775 million, whichis included in other current assets on the consolidated balance sheets.
Millions of yen

Proceeds from sales of available-for-sale securities
Gross realized gains on sales of available-for-sale securities
Gross realized losses on sales of available-for-sale securities
During the years ended March 31, 2015 and 2013, the Companies

2015

2014

2013

¥3,499
1,516

¥190
64

¥5,0492,164
9funds, which were recorded as marketable securities and investments

exchanged certain equity securities for other marketable securities.

at the fair value of ¥683 million as of March 31, 2013. The Companies

The Companies recorded the newly received securities at fair value

recorded a loss of ¥9 million for the year ended March 31, 2013, thatand recognized a gain of ¥1 million in the year ended March 31, 2015.

related to trading securities still held as of March 31, 2013.

There was no gain or loss recognized for the exchange transaction

COST-METHOD SECURITIES —Investments in nonmarketable equity

during the year ended March 31, 2013, as there was no difference

securities for which there are no readily determinable fair values were

between the carrying amount of the security transferred and the fairaccounted for using the cost method and aggregated ¥1,295 million

value of the security received. There was no exchange of marketableand ¥1,362 million as of March 31, 2015 and 2014, respectively.

securities for the year ended March 31, 2014.

Investments in nonmarketable equity securities are reviewed annually

The amount of impairment charges the Companies recognized on

or upon the occurrence of an event for other-than-temporary impair-available-for-sale securities in which declines in fair value were otherment. The Companies recognized impairment charges on investments

than temporary was ¥4 million, ¥47 million and ¥55 million in the years

in nonmarketable equity securities of ¥10 million and ¥261 million in

ended March 31, 2015, 2014 and 2013, respectively.

the years ended March 31, 2015 and 2013, respectively. There were no

TRADING SECURITIES—There were no trading securities consisting

impairment charges on investments in nonmarketable equity securi-of mutual funds as of March 31, 2015 and 2014. A subsidiary in theties for the year ended March 31, 2014.

United States of America had trading securities consisting of mutual

4. VALUATION AND QUALIFYING ACCOUNTS 
Information related to the Companies’ allowance for doubtful receivables was as follows:
Millions of yen

Balance at the beginning of the year
Increase due to change in scope of consolidation
Charged to costs and expenses
Balances written-off/reversed
Balance at the end of the year

2015

2014

2013

¥201

¥180

45
(48)
¥198

32
(11)
¥201

¥ 70
84
49
(23)
¥180

2015

2014

2013

¥ 2,120
2,211(2,120)¥ 2,211¥ 1,7022,120(1,702)¥ 2,120¥ 1,390
1,702(1,390)¥ 1,702

Information related to the Companies’ allowance for returns was as follows:
Millions of yen

Balance at the beginning of the year
Charged to costs and expenses
Balances utilized
Balance at the end of the year61

5. INVENTORIES 
The components of inventories as of March 31, 2015 and 2014, were as follows:
Millions of yen

Finished products
Work in process
Raw materials
Total

2015

2014

¥36,935
3,625
2,333¥42,893¥34,504
3,496
2,211¥40,211

During the year ended March 31, 2013, a subsidiary in the United States of America settled an insurance claim and received cash proceedsof ¥383 million related primarily to merchandise damaged by the impact of Hurricane Sandy, which made landfall in the Northeast of the UnitedStates of America on October 29, 2012. The subsidiary recorded the proceeds from the insurance settlement in cost of sales in the consolidated
statements of income for the year ended March 31, 2013.

6. INVESTMENTS IN AFFILIATED COMPANIES 
Investments are accounted for using the equity method of accounting

accounting is appropriate. The Companies record investments in

if the investment provides the Companies the ability to exercise

equity method investees meeting these characteristics assignificant influence over an investee. Significant influence is generally“Investments in affiliated companies.” Under the equity method,

deemed to exist if the Companies have an ownership interest in the

the Companies record their proportionate share of an affiliatedvoting stock of the investee between 20% and 50%, although othercompanies’ income or loss based on the most recently available

factors are considered in determining whether the equity method offinancial statements.

The primary affiliated companies and percentage of ownership as of March 31, 2015 and 2014, were as follows:
Percentage of ownership (%)
Name of Investee

Thai Wacoal Public Co., Ltd
Shinyoung Wacoal Inc.
PT. Indonesia Wacoal
Taiwan Wacoal Co., Ltd.
House of Rose Co., Ltd.

2015

2014

34
25
42
50
24

34
25
42
50
24

Aggregate carrying amounts and fair values of investments in affiliated companies which have a quoted market price as of March 31, 2015 and2014, were as follows:
Millions of yen

Carrying amount
Aggregate value of quoted market price

2015

2014

¥14,155
12,107¥11,969
10,461

The following tables represent the affiliated companies’ summarized information from the balance sheets as of March 31, 2015 and 2014, andstatements of income for the years ended March 31, 2015, 2014 and 2013.
Millions of yen

Current assets
Noncurrent assets
Total
Current liabilities
Long-term liabilities
Equity
Total

62

2015

2014

¥45,218
45,317¥90,535¥10,262
9,678
70,595¥90,535¥42,464
38,787¥81,251¥ 8,578
8,984
63,689¥81,251

Overview of the
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Management
Foundation

Financial Section

Millions of yen

Net sales
Gross profit
Income before income taxes
Net income

2015

2014

2013

¥62,459
31,5192,848
2,196¥60,257
31,011
3,664
2,503¥53,229
27,8193,921
2,955

Dividends received from the affiliated companies were ¥678 million, ¥713 million and ¥580 million during the years ended March 31, 2015, 2014
and 2013, respectively.
Retained earnings include net undistributed earnings of affiliated companies in the amount of ¥14,948 million and ¥15,458 million as of March
31, 2015 and 2014, respectively.

7. ACQUISITIONS 
EVEDEN—On April 10, 2012, the Company acquired all of the shares

Acquisition-related costs were ¥456 million, of which ¥45 million

of Eveden Group Limited (currently Wacoal Europe Limited,and ¥411 million had been included in the results of operations for the“Eveden”), which manufactures and sells innerwear and swimsuits foryears ended March 31, 2013, and 2012, respectively, in selling, general

women in Europe and the United States of America, in the amount ofand administrative expenses.

¥19,961 million, inclusive of ¥2,581 million of funds to repay Eveden’s

As a result of the purchase price allocation, the Company has

preexisting debts and of ¥3,597 million to acquire the preferred shares

recognized ¥10,662 million of goodwill and ¥5,499 million of brandand made it the Company’s wholly owned subsidiary. The acquisition

and these are classified as goodwill and other intangible assets,

aims to expand the Company’s overseas operations. This will enable

respectively, on the consolidated balance sheets. Goodwill is not

the group to accelerate the Company’s globalization strategy and to

deductible for tax purposes. The amount of brand will be amortized

expand the target customer segment by effectively utilizing sales

based on the estimated useful lives of 20 to 25 years.

channels, technology, management know-how and brand strength ofboth companies.

During the year ended March 31, 2013, the Company adjusted thefair values of assets acquired and liabilities assumed as of the acquisition

The Company has been consolidating Eveden since April 1, 2012,

date based on the information the Company obtained subsequent tobecause the impact of the result of operations and the changes in thethe acquisition date. These adjustments are reflected retroactively tofinancial position of Eveden from April 1, 2012 to April 10, 2012, wasthe fair values of assets acquired and liabilities assumed as of theinsignificant.

acquisition date.

Fair value of assets acquired, liabilities assumed and noncontrolling interests on the acquisition date were as follows:
Millions of yen
April 1, 2012

BeforeAdjustments

After
Adjustments

Notes and accounts receivable
Inventories
Other current assets
Property, plant and equipment
Intangible assets
Goodwill
Other fixed assets
Total¥ 2,106
3,244
936
710
5,524
10,748184
23,452¥ 2,106
3,244
1,037
710
5,524
10,662
184
23,467

Current liabilities
Long-term debt
Other long-term liabilities
Total
Noncontrolling interests
Net assets acquired

1,758
2,581
1,525
5,864
208
¥17,380

1,773
2,581
1,525
5,879
208
¥17,380

The above long-term debt was repaid during the year ended March 31, 2013.

63

8. GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL—The changes in the carrying amount of goodwill for the years ended March 31, 2015, 2014 and 2013 were as follows:
Millions of yen

2015

Balance at the beginning of the year:
Goodwill
Accumulated impairment losses
		TotalForeign currency translation adjustments
Impairment losses
Balance at the end of the year:
Goodwill
Accumulated impairment losses
		Total

Wacoal Business(Overseas)

Peach John
Segment¥13,553¥11,203(2,033)
9,170

13,553872
14,425¥14,425

Total(4,845)¥24,756(2,033)22,723872(4,845)

11,203(6,878)¥ 4,325

25,628(6,878)¥18,750
Millions of yen

2014

Balance at the beginning of the year:
Goodwill
Accumulated impairment losses
		TotalForeign currency translation adjustments
Balance at the end of the year:
Goodwill
Accumulated impairment losses
		Total

Wacoal Business(Overseas)

Peach John
Segment¥11,272¥11,203(2,033)
9,170¥22,475(2,033)
20,442
2,281

11,203(2,033)¥ 9,170

24,756(2,033)¥22,723

11,2722,281
13,553¥13,553

Total

Millions of yen

2013
Wacoal Business(Overseas)

Balance at the beginning of the year:
Goodwill
Accumulated impairment losses
		TotalGoodwill acquired during the year
Foreign currency translation adjustments
Impairment losses
Balance at the end of the year:
Goodwill
Accumulated impairment losses
		TotalPeach John
Segment¥11,203(836)
10,367(1,197)¥11,203(836)
10,367
10,662610(1,197)

11,203(2,033)¥ 9,170

22,475(2,033)¥20,442¥10,662610
11,272¥11,272

Total

During the years ended March 31, 2015 and 2013, the Companies recorded impairment charges on goodwill of ¥4,845 million and ¥1,197 million,
respectively, in the Peach John Segment. See Note 21 for further information.
OTHER INTANGIBLE ASSETS—The components of acquired intangible assets excluding goodwill as of March 31, 2015 and 2014 were as follows:
Millions of yen

Years Ended March 31

Amortized intangible assets:
BrandsCustomer relationships
Software
Others		TotalUnamortized intangible assets:
Trademarks
Other		Total
64

2015

2014

Gross Carrying
AmountAccumulated
Amortization
and Impairment
Loss

Gross Carrying
AmountAccumulated
Amortization
and Impairment
Loss¥ 7,440¥  9998,271
1,570¥17,281

5,035
605¥6,639¥ 6,991
3,361
8,480
1,461
¥20,293¥  627
3,214
5,494
543
¥9,878¥ 5,316103¥ 5,419¥3,322¥ 5,316103¥ 5,419¥2,146¥3,322¥2,146

Overview of the
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Management

CSR Activities

Other intangible assets acquired during the year ended March 31,
2015 totaled ¥1,385 million which primarily consist of software with anestimated useful life of five years.

Management
Foundation

Financial Section

relationships and trademarks of ¥68 million and ¥1,587 million, respectively,in the Peach John Segment. See Note 21 for further information.
Aggregate amortization expenses for the years ended March 31,

The gross carrying amounts of brands include foreign currencytranslation adjustments.

2015, 2014 and 2013 related to other intangible assets were ¥1,536
million, ¥1,824 million and ¥1,851 million, respectively. Future esti-

Customer relationships were fully amortized during the year ended
March 31, 2015.

mated amortization expenses as of March 31, 2015, were as follows:Year Ending March 31

During the year ended March 31, 2015, the Companies recorded an
impairment charge on other intangible assets for the trademarks of ¥1,176
million in the Peach John Segment. During the year ended March 31,
2014, the Companies recorded no impairment charge on other intangible
assets. During the year ended March 31, 2013, the Companies recorded
an impairment charge on other intangible assets for the customer

Millions of yen

Estimated amortization expense
2016
2017
2018
2019
2020
Total

¥1,244
1,181
1,079
848
587
¥4,939

9. SHORT-TERM BANK LOANS AND LONG-TERM DEBT 
Short-term bank loans as of March 31, 2015 and 2014, consisted of thefollowing:
Millions of yen

Unsecured bank loans

2015

2014

¥10,038¥16,630

The weighted-average annual interest rates on short-term bankloans as of March 31, 2015 and 2014 were 0.4% and 0.6%, respectively.
Unused lines of credit for short-term financing as of March 31, 2015
and 2014, aggregated ¥25,189 million and ¥25,377 million, respectively.

The annual maturities of long-term debt as of March 31, 2015, wereas follows:Year Ending March 31

Millions of yen

2016
2017
2018
2019
2020
ThereafterTotal¥   534
4,007
50
50
50
88
¥4,779The Companies compensate banks for these facilities in the form ofcommitment fees, which were not material during the years ended

A subsidiary has pledged assets as security for loans. As of March 31,
2015 and 2014, assets pledged as collateral for bank loans were as

March 31, 2015 and 2014.
Long-term debt as of March 31, 2015 and 2014, are summarized below.

follows:
Millions of yen

The interest rates and maturities are for loans as of March 31, 2015.
Millions of yen

2015Collateralized bank loans, withfloating interest at 4.5%, maturing
through 2015
Collateralized bank loans, with fixedinterest at 1.5%—1.8%, maturing
through 2022Unsecured bank loans, with floatinginterest at 1.0%, maturing
through 2017
Unsecured bank loans, with fixedinterest at 0.4%—1.5%, maturing
through 2022
Total
Less current portionLong-term debt, less current portion2014¥   12311¥   271

Land
Buildings
Machinery and equipment
Total

2015

2014

¥150
258

¥  888595
21¥1,504¥408

As is customary in Japan, both short-term and long-term loans are
made under general agreements which provide that security andguarantees for future and present indebtedness will be given upon

3,957

request of the bank. The bank has the right to offset cash deposits
against obligations that have become due or, in the event of default,

551
4,779
(534)
¥4,245

1,194
1,517
(695)
¥   822

against all obligations due to the bank.

10. LEASES 
The Companies lease most of their store premises, some of theirdistribution centers, and certain equipment. Most leases have automatic renewal provisions and allow the Companies to extend the leaseterm beyond the initial base period, subject to the terms agreed atlease inception. Future minimum rental commitments on operatingleases having a remaining noncancelable lease term in excess of one
year as of March 31, 2015 are presented below:

Year Ending March 31

2016
2017
2018
2019
2020
Thereafter
Total

Millions of yen¥   666
539
397
284
65
130
¥2,081

Rental expenses were ¥6,476 million, ¥5,975 million and ¥5,780
million for the years ended March 31, 2015, 2014 and 2013, respectively,
and have been included in selling, general and administrative expenses.

6511. ASSET RETIREMENT OBLIGATIONS 
The Companies recorded the fair value of asset retirement obligations in order to recognize legal obligations associated with the removal ofleasehold improvements from leased facilities and return of the property to a specified condition when the lease terminates.
A reconciliation of the beginning and ending aggregate carrying amount of the asset retirement obligation was as follows:
Millions of yen

Balance at the beginning of the year
Accretion expense
Liabilities incurred
Liabilities settled
Change due to translation of foreign currencies
Balance at the end of the year

2015

2014

2013

¥728
8
66
(32)
7
¥777

¥648
6
112
(43)
5
¥728

¥661
5
92
(113)
3
¥648

12. TERMINATION AND RETIREMENT PLANS EMPLOYEE RETIREMENT PLANS—The Company and certain subsid-

administered by the Company and certain subsidiaries. Benefits underiaries sponsor termination and retirement benefit plans that cover

the contributory defined retirement benefit plan are usually paid in a

substantially all employees. Benefits are based on the employee’s

lump sum at the earlier of termination or retirement, although periodic

years of service, position and performance. If the termination is invol-

payments are available under certain conditions. Benefits under theuntary or caused by death, the employee is usually entitled to greater

other termination and retirement benefit plan are paid either as lump-

payments than in the case of voluntary termination.

sum payments or periodic payments under certain conditions. The

The Company and certain subsidiaries have a contributory defined
retirement benefit plan and several unfunded termination plans

benefits are usually paid as a lump-sum payment, if the employee
resigns before the mandatory retirement age.

CONTRIBUTORY DEFINED RETIREMENT BENEFIT PLAN—The following provides a reconciliation of benefit obligations, plan assets and funded
status of the plans:Millions of yen

Change in benefit obligations:Benefit obligations at the beginning of the year
Service cost
Interest cost
Participants’ contributions
Actuarial loss
Benefits paid from plan assets
Settlement paid from plan assets
Settlement paid by the Company and certain subsidiaries
Benefit obligations at the end of the year
Change in plan assets:
Fair value of plan assets at the beginning of the year
Actual return on plan assets
Employer contributions
Participants’ contributions
Benefit payments
Settlement payments
Fair value of plan assets at the end of the year
Funded status at the end of the year

2015

2014

2013

¥33,712
1,021
417
66
1,001
(908)
(1,075)(149)
34,085¥34,449
1,025
398
66
(258)
(879)
(995)
(94)
33,712¥34,135
849
602
68
1,005
(825)
(1,201)(184)
34,449¥37,738
5,565
1,751
66
(908)
(1,075)
43,137¥ 9,052¥34,178
3,659
1,709
66
(879)
(995)
37,738¥ 4,026¥31,607
2,748
1,781
68
(825)
(1,201)
34,178¥   (271)

Amounts recognized in the consolidated balance sheets as of March 31, 2015 and 2014, consist of:Millions of yen

Prepaid pension expense
Accrued expenses
Liability for termination and retirement benefits

66

2015

2014

¥10,577(63)(1,462)¥ 9,052¥ 5,666(63)(1,577)¥ 4,026

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Amounts recognized in accumulated other comprehensive income (loss), pre-tax, as of March 31, 2015 and 2014, were as follows:
Millions of yen

Actuarial loss
Prior service benefit

2015

2014

¥2,573
1,098¥3,671¥(1,346)1,590¥    244

The accumulated benefit obligation for all defined retirement benefit plans as of March 31, 2015 and 2014, was as follows:
Millions of yen

Accumulated benefit obligation

2015

2014

¥34,085¥33,712The projected benefit obligations and the fair value of the plan assets for the Company and certain subsidiaries’ pension plans with projected
benefit obligations in excess of plan assets, and the accumulated benefit obligations and the fair value of the plan assets for the Company andcertain subsidiaries’ pension plans with accumulated benefit obligations in excess of plan assets were as follows:
Millions of yen

Plans with projected benefit obligations in excess of plan assets:
Projected benefit obligations
Fair value of plan assets
Plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligations
Fair value of plan assets

2015

2014

¥2,342817¥2,369
729

2,342
817

2,369
729

Net periodic benefit costs for the Company and certain subsidiaries’ plans consisted of the following for the years ended March 31, 2015, 2014
and 2013:
Millions of yen

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service benefit

2015

2014

2013

¥1,021
417
(865)
220
(492)
¥   301¥1,025
398
(803)
936
(574)
¥   982¥   849
602
(772)
1,298
(641)
¥1,336The unrecognized net actuarial loss and prior service benefit are being amortized over 12 years (the average remaining service life of active
participants) using the declining-balance method and the straight-line method, respectively.
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) for the years ended March 31, 2015,2014 and 2013 were as follows:
Millions of yen

Current year actuarial gain
Amortization of actuarial loss
Amortization of prior service benefit

2015

2014

2013

¥3,699220(492)¥3,427¥3,114936(574)¥3,476¥   971
1,298(641)¥1,628The estimated amounts that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next year
are summarized as follows:
Millions of yen

Actuarial gain
Prior service benefit¥(454)(491)

67

The Company and certain subsidiaries use a measurement date of March 31 for their plans. The weighted-average assumptions used as ofMarch 31 in computing the benefit obligations shown above were as follows:

Discount rate
Rate of increase in future compensation

2015

2014

1.0%
0.0%

1.3%
0.0%

The weighted-average assumptions used as of March 31 in computing the net periodic benefit cost shown above were as follows:

Discount rate
Rate of increase in future compensation
Expected long-term rate of return on plan assets
The Company’s approach to establishing the discount rate is

2015

2014

2013

1.3%
0.0%
2.5%

1.2%
0.0%
2.5%

1.9%
0.0%
2.5%

The asset allocation as of March 31, 2015 and 2014, was as follows:

based upon corporate bond indices. The discount rate assumption isbased upon the effective yields as of March 31, 2015 on the corporatebond indices whose maturity dates approximate the timing of the
expected future benefit payments.
The expected long-term rate of return on plan assets is derived
proportionally from return assumptions determined for each of the
major asset classes. The return expectations for each of the asset
classes are based largely on assumptions about economic growth andinflation, which are supported by long-term historical data. The estimated long-term rate of return is based on an asset allocation ofequity securities of 26.0%, debt securities of 54.0%, life insurancecompany general accounts of 18.0% and short-term financing of 2.0%.
The Company and certain subsidiaries’ investment strategy is tomaintain actual asset weightings within a preset range of target allocations. The Company and certain subsidiaries investments are broadly
diversified, consisting primarily of equity and debt securities. The
Company and certain subsidiaries believe these ranges represent an

Equity securities
Debt securities
Life insurance company general accounts
Real estate
Short-term financing

2015

2014

49.4%
29.8%
12.0%
1.4%
7.4%

43.1%
36.6%
13.6%
6.7%

The target allocation percentages are reviewed and approved by
the Pension Committee. The actual allocations for 2015 and 2014 aredifferent from the target allocation percentages primarily because
Wacoal Corp. maintained additional equity securities within a separate
plan asset which is assigned to the plan based on an agreement
between Wacoal Corp. and its employees and is not governed by thePension Committee. As such, the actual allocation percentage ofequity securities to the total plan assets is higher than the target
allocation, and similarly, the actual allocation for some other typesof assets is lower than the target allocation.

appropriate risk profile for the planned benefit payments of the plans
based on the timing of the estimated benefit payment.
The following tables present the Company and certain subsidiaries’ plan assets using the fair value hierarchy as of March 31, 2015 and 2014.
The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. For the reference to each level, seeNote 21.
Millions of yen
2015

Equity securities:
Japanese companies
Pooled funds (a)Debt securities:
Foreign government bonds
Pooled funds (b)Life insurance company general accounts
Other types of investments:
Hedge funds (c)Pooled funds (d)Short-term financing
		Total68

Level 1

Level 2

¥9,424

Total¥11,552¥ 9,424
11,552

9,717
5,164

17
9,717
5,164

1,194
3,301
2,768
¥33,696

1,194
3,301
2,768
¥43,137

17¥9,441

Level 3

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Millions of yen

Level 12014

Equity securities:
Japanese companies
Pooled funds (a)Debt securities:
Pooled funds (b)Life insurance company general accounts
Other types of investments:
Hedge funds (c)Pooled funds (d)Short-term financing
		TotalLevel 2

Level 3

¥6,976¥6,976Total¥ 9,280¥ 6,976
9,280

12,443
5,146

12,443
5,146

634
973
2,286
¥30,762

634
973
2,286
¥37,738(a)	This class includes common stock of approximately 25% Japanese companies and 75% foreign companies as of March 31, 2015, and those percentages were 24% and 76%,
respectively, as of March 31, 2014.
(b)	This class includes approximately 28% of Japanese government bonds, 3% of Japanese municipal bonds, 33% of foreign government bonds and 36% of corporate bonds asof March 31, 2015, and those percentages were 41%, 5%, 25% and 29%, respectively, as of Mar ch 31, 2014.
(c)	This class is hedge funds that invest both long and short in debt securities as of March 31, 2015 and 2014.
(d)	This class includes approximately 58% of corporate bonds, 2% of common stock of Japanese companies, 10% of common stock of foreign companies, 18% of real estateand 12% of short-term financing as of March 31, 2015. This class includes approximately 38% of corporate bonds, 36% of insurance swaps and 26% of short-term financing asof March 31, 2014.

Equity securities and debt securities presented in Level 1 are

DEFINED CONTRIBUTION PLAN— Certain subsidiaries have defined

primarily valued using a market approach based on the quoted

contribution plans. The amounts of cost recognized for their contribu-

market prices of identical instruments. Pooled funds in equity securi-tions to the plan were ¥203 million, ¥196 million and ¥193 million forties or debt securities and hedge funds which are categorized in Levelthe years ended March 31, 2015, 2014 and 2013, respectively.

2 are valued by the sponsor of the funds primarily based on quoted

EMPLOYEE EARLY RETIREMENT PROGRAM—The Company andprices in both active and inactive market for identical instruments

certain subsidiaries provide additional benefits to employees thatwhich comprise funds. Life insurance company general accounts

elect to participate in the Company and certain subsidiaries’ early

include contracts with the insurance companies with guaranteed rate

retirement program. Retirement benefits of ¥114 million, ¥228 millionof return and capital, and those values are based on the sum ofand ¥280 million were paid in addition to normal benefits and charged

original value and return.

to selling, general and administrative expenses for the years ended

The Company and certain subsidiaries’ funding policy for the

March 31, 2015, 2014 and 2013, respectively.

funded plans is to contribute amounts computed in accordance withTERMINATION PLAN FOR DIRECTORS—The Company had andactuarial methods accepted by Japanese tax law. The Company andcertain subsidiaries have termination plans for directors. Payment ofcertain subsidiaries expect to contribute ¥1,260 million to their plans

termination benefits to directors is made in a lump sum upon termina-

in the year ending March 31, 2016.

tion and requires the approval of the shareholders before payment. In

The following benefit payments, which reflect expected futureservices, as appropriate, are expected to be paid:
Year Ending March 31

2016
2017
2018
2019
2020
ThereafterJune 2005, the Company rescinded its termination plan for directors
upon the approval of its shareholders. The amount of benefit for each

Millions of yen¥1,923
1,966
1,989
2,070
1,989
9,590

individual was fixed as of June 29, 2005 and will remain frozen until theretirement of each respective director. The outstanding liabilities were¥399 million as of March 31, 2015 and 2014, and were recorded inother long-term liabilities. Subsidiaries still maintain plans for theirdirectors. In accordance with the guidance for determination of vested
benefit obligation for a defined benefit pension plan, the subsidiaries
recorded a liability for termination benefits for directors at the amountthat would be needed if all directors were to resign at each balance
sheet date. The liabilities for termination benefits for directors as ofMarch 31, 2015 and 2014 were ¥218 million, and were included inliability for termination and retirement benefits.

69

13. COMMITMENTS AND CONTINGENT LIABILITIES 
The Company entered into a construction supervision contract and construction contract of ¥6,395 million, in connection with the office that wasestablished in Minami-ku, Kyoto on October 20, 2014. The Company had contractual obligations of ¥5,763 million as of March 31, 2015.

14. EQUITY 
Japanese companies are subject to the Companies Act of Japan (the“Companies Act”). The significant provisions in the Companies Act(b) Increases/decreases and transfer of common stock, reserveand surplus

that affect financial and accounting matters are summarized below:

The Companies Act requires that an amount equal to 10% of(a) Dividends

dividends must be appropriated as a legal reserve (a component

Under the Companies Act, companies can pay dividends at any timeof retained earnings) or as additional paid-in capital (a component ofduring the fiscal year in addition to the year-end dividend upon reso-

capital surplus) depending on the equity account charged upon the

lution at the shareholders meeting. For companies that meet certain

payment of such dividends until the total of aggregate amount of

criteria, the Board of Directors may declare dividends (except for divi-

legal reserve and additional paid-in capital equals 25% of the common

dends in kind) at any time during the fiscal year if the companies havestock. Under the Companies Act, the total amount of additionalprescribed so in its articles of incorporation. The Company meets all

paid-in capital and legal reserve may be reversed without limitation.

the above criteria.

The Companies Act also provides that common stock, legal reserve,

The Companies Act permits companies to distribute dividends inadditional paid-in capital, other capital surplus and retained earnings

kind (noncash assets) to shareholders subject to a certain limitation

can be transferred among the accounts under certain conditions upon

and additional requirements.

resolution of the shareholders.

Semiannual interim dividends may also be paid once a year upon(c) Treasury stock

resolution by the Board of Directors if the articles of incorporation of

The Companies Act also provides for companies to purchase treasury

the companies so stipulate. The Companies Act provides certain limi-

stock and dispose of such treasury stock by resolution of the Board oftations on the amounts available for dividends or the purchase of trea-

Directors. The amount of treasury stock purchased cannot exceed thesury stock. The limitation is defined as the amount available foramount available for distribution to the shareholders which is deter-

distribution to the shareholders, but the amount of net assets aftermined by a specific formula.

dividends must be maintained at no less than ¥3 million.
During the years ended March 31, 2015 and 2014, changes in Wacoal Holdings Corp.’s additional paid-in capital due to equity transactions
with noncontrolling interest shareholders were as follows:
Millions of yen

Net income attributable to Wacoal Holdings Corp.
Increase in Wacoal Holdings Corp.’s additional paid-in capital due to transfers of Wacoal Holdings Corp.’sownership interests in its subsidiaries from noncontrolling interests
Change in net income attributable to Wacoal Holdings Corp. and transfers from noncontrolling interests

2015

2014

¥8,444¥10,106

0¥8,444

4¥10,110

15. SHARE-BASED COMPENSATION The Company adopted an annual stock option plan in the year ended

Expected dividend yield is based on the actual payout of dividends

March 31, 2009. Under the stock option plan, the Company grantedin the last fiscal year and the closing price of the Company’s commonshares of its common stock to directors of the Company excluding

stock on the grant date. Expected volatility is based on the historicaloutside directors and directors of the Company’s wholly owned

volatility of the Company’s share price over the most recent period

subsidiary, Wacoal Corp., in the years ended March 31, 2015, 2014 andcommensurate with the expected term of the Company’s stock

2013. The Company believes that such awards better align the inter-

options. Risk-free interest rate is based on the Japanese government

ests of its directors with those of its shareholders, by sharing both risk

bonds yield curve in effect at the time of grant for a period commen-

and return from fluctuations in stock prices and giving motivation tosurate with the expected term of the Company’s share options.

enhance its corporate value. Each stock option is exercisable to

Expected term of options granted is based on the average remaining

acquire 1,000 shares of the Company’s common stock at ¥1 per share.

service period of directors, assuming that those who are granted

The compensation cost is measured at fair value on the grant date.

options will render service until the stated retirement date and they

Options vest over one year in proportion to the services rendered bywill exercise options immediately after their retirement.

the directors, and are exercisable from the day after the date of retirement up to (i) 20 years from the grant date or (ii) 5 years from the day
after the date of retirement, whichever is earlier.
The fair value of the options is estimated by using the BlackScholes option-pricing model with the following assumptions.

70Expected
dividends yield
Expected volatility
Risk-free interest rate
Expected term

2015

2014

2013

3.2%
18.7%
0.1%
3.1 years

2.8%
20.6%
0.1%
2.8 years

3.2%
22.5%
0.1%
3.1 years

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Foundation

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A summary of stock option activities under the plan for the year ended March 31, 2015, was as follows:

Outstanding as of April 1, 2014
GrantedExercised
Outstanding as of March 31, 2015
Exercisable as of March 31, 2015
The total intrinsic value of options exercised was ¥6 million and

Yen

Years

Millions of yen

Shares

WeightedAverage
Exercise Price

WeightedAverage
Remaining Contractual Term

Aggregate
Intrinsic Value

346,000
63,0005,000
404,000
60,000¥1
1
1
1
1

15.0 years
4.2 years¥564
81

The weighted-average grant date fair values of options granted for¥3 million for the years ended March 31, 2015 and 2013, respectively.

the years ended March 31, 2015, 2014 and 2013 were ¥937, ¥918 andThere were no options exercised during the year ended¥799, respectively.

March 31, 2014.

As of March 31, 2015, there was ¥11 million in total unrecognized

Total compensation costs recognized for the years ended March

compensation cost related to nonvested share-based compensation

31, 2015, 2014 and 2013 were ¥60 million, ¥69 million and ¥53 million,

arrangements granted under the plan. That cost is expected to berespectively. The total recognized tax benefits related thereto for therecognized over three months.

years ended March 31, 2015, 2014 and 2013 were ¥21 million,¥25 million and ¥19 million, respectively.

16. OTHER COMPREHENSIVE INCOME (LOSS) 
The changes in the components of accumulated other comprehensive income, including amounts attributable to noncontrolling interests were as
follows:
Millions of yen

2014

2015

Balance at the beginning of the year (after-tax)
Amount arising during the year:
Pre-tax amountTax credit
Net amount
Reclassification adjustments:
Pre-tax amountTax credit
Net amount
Other comprehensive income attributable tononcontrolling interests (after-tax)
Balance at the end of the year (after-tax)

Foreign
Currency
Translation
Adjustments

Unrealized Gainon Securities¥ 2,310
9,019
(348)
8,671

(150)
10,831

Pension Liability
Adjustments

Foreign
Currency
Translation
Adjustments

Unrealized Gainon Securities

Pension Liability
Adjustments¥11,606¥   (227)¥(5,924)¥ 9,310¥(1,928)

15,809(5,593)
10,216

3,651(1,319)
2,332

8,582
(240)
8,342

3,709
(1,396)
2,313

2,578
(1,110)1,468(1,513)
539
(974)

(272)
96
(176)

27
27

(17)
6
(11)

362
(129)
233

(27)
20,821

5
1,934

(135)
2,310

(6)
11,606(227)

Reclassification adjustments (pre-tax) of foreign currency translation adjustments are included in “Other - net.”
Reclassification adjustments (pre-tax) of unrealized gain on securities are included in “Gain or loss on sales or exchange of marketable securities and Investments - net” and “Valuation gain or loss on marketable securities and investments - net.”
Reclassification adjustments (pre-tax) of pension liability adjustments are included in the net periodic benefit costs.
Millions of yen

2013

Foreign currency translation adjustments:
Amount arising during the year
Unrealized gain on securities:
Amount arising during the year
Reclassification adjustments
		 Net unrealized gain
Pension liability adjustments:
Amount arising during the year
Reclassification adjustment
		 Net unrealized gain
Other comprehensive income

Pre-tax AmountTax (Expense)
CreditNet Amount¥ 5,332¥ (260)¥ 5,0729,909(2,101)
7,808(3,435)749(2,686)6,474(1,352)
5,122

971
657
1,628
¥14,768

(346)
(234)
(580)
¥(3,526)

625
423
1,048
¥11,24271

17. INCOME TAXES 
Domestic and foreign components of income before income taxes, equity in net income of affiliated companies were summarized as follows:
Millions of yen

JapanForeign
Total

2015

2014

2013

¥19,902(8,560)¥11,342¥22,877(7,844)¥15,033¥18,609(7,669)¥10,940

2015

2014

2013

¥ 3,852
1,371¥ 5,223¥3,7101,546¥5,256¥ 5,578
1,060¥ 6,638¥(1,983)63¥(1,920)¥ 3,303¥  549(164)¥  385¥5,641¥(2,754)(112)¥(2,866)¥ 3,772

Domestic and foreign components of income tax expense consist of:Millions of yen

Current:
Japan
Foreign
Deferred:Japan
Foreign
Total income taxes

Income taxes in Japan applicable to the Companies, imposed by the national, prefectural and municipal governments, in the aggregate
resulted in a normal effective statutory tax rate of approximately 35.6% for the year ended March 31, 2015 and approximately 38.0% for the years
ended March 31, 2014 and 2013. Foreign subsidiaries are subject to income taxes of the countries in which they operate.
The Companies are subject to a number of different taxes based on income. The effective income tax rates differed from the normal statutory
tax rates for the following reasons for the years ended March 31, 2015, 2014 and 2013:

Normal Japanese statutory tax rates
Increase (decrease) in taxes resulting from:
Permanently nondeductible expenses
Change in valuation allowance
Undistributed earnings of associated companies
Differences in foreign subsidiaries' tax rate
Tax exemption
Unrecognized tax benefits
Impairment losses on goodwill
Changes in Japanese income tax rates
Other - net
Effective tax rates
Amendments to the Japanese tax regulations were issued on

2014

2013

38.0%

38.0%

3.6
(9.4)
(0.5)
(3.3)
(0.1)
0.0
15.2
(10.7)
(1.4)
29.0%

3.3
(2.9)
0.1
(2.6)
(0.2)
0.2

4.2
1.0
0.0
(1.0)
(0.3)
0.2
(4.1)

1.6
0.0
37.5%

(3.5)
34.5%

will be lowered starting from the consolidated fiscal year beginning on

March 31, 2014. As a result of these amendments, the statutory

and after April 1, 2015. Accordingly, from the end of the current fiscal

income tax rate was reduced from 38.0% to 35.6% effective from theyear, with respect to the Company and our major domestic subsid-

year beginning April 1, 2014. Consequently, the statutory income tax

iaries, the effective statutory tax rate used for the calculation ofrate utilized for deferred tax assets and liabilities expected to bedeferred tax assets and deferred tax liabilities has been changed fromsettled or realized in the period from April 1, 2014 is 35.6%. The

the current 35.6% to 33.1% for the temporary differences which areadjustment of deferred tax assets and liabilities for this change in the

expected to reverse during the consolidated fiscal year beginning

tax rate resulted in an increase of income taxes by ¥255 million and

April 1, 2015 and to 32.3% for the temporary differences which are

has been reflected in income taxes in the consolidated statements of

expected to reverse in and after the consolidated fiscal year begin-income for the year ended March 31, 2014.

ning April 1, 2016.

Following the amendments described above, new amendments,

Due to this tax rate change, the deferred income taxes recognized

the Act on the Partial Revision of the Income Tax Act, etc. (Act No. 9 ofin the fiscal year ended March 31, 2015 decreased by ¥1,209 million as2015) and the Act on the Partial Revision of Local Tax Act, etc. (Act No.

a result of a reversal of the deferred tax assets and deferred tax liabilities.

2 of 2015) were issued on March 31, 2015, and the corporate tax rate

72

2015

35.6%

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The approximate effect of temporary differences and tax loss carryforwards that gave rise to deferred tax balances as of March 31, 2015 and2014 were as follows:
Millions of yen

2014

2015
DeferredTax Assets

Allowance for returns
Allowance for doubtful receivables
Accruals not currently deductible
Inventory valuation
Accrued bonuses
Impairment charges on marketable securities and investments
Advanced depreciation on property, plant and equipment
Undistributed earnings of associated companies
Net unrealized gain on marketable securities and investments
Net realized gain on exchange of investments
Capitalized supplies
Enterprise taxes
Accrued vacation
Asset retirement obligation
Prepaid pension cost
Pension expense
Tangible fixed assets
Tax loss carryforwards
Intangible assets
Other temporary differences
Total
Valuation allowance
Total

Deferred
Tax Liabilities

DeferredTax Assets

Deferred
Tax Liabilities¥   771
51
187
1,149
1,258
1,471

¥   737
43
136
1,058
1,067
1,273

¥ 1,354
2,405
7,407
1,059

¥ 1,200
2,731
11,411
961
290
114
799
259

215
204
771
253

1,420

2,825
501
1,312
3,668

430
1,214
3,300
974
11,675(2,535)¥ 9,1402,276
6221,466¥21,466

1,076
12,906(4,016)¥ 8,890

2,802
198
16,645¥16,645

The valuation allowance decreased by ¥1,481 million and ¥193 million for the years ended March 31, 2015 and 2014, respectively.
On November 28, 2014, the Company resolved a restructuring plan for its group organization. Based on the resolution, most of assets andliabilities of Lecien Corp., a wholly-owned subsidiary of the Company, were transferred to a newly established subsidiary, and Wacoal Corp.,
another wholly-owned subsidiary of the Company, merged Lecien Corp. with the remainder of their assets and liabilities on April 1, 2015.
In conjunction with the merger, deferred tax assets for temporary differences concerning the merged assets and liabilities and tax loss
carryforwards were transferred from Lecien Corp. to Wacoal Corp., Such deferred tax assets which had been fully covered by a valuation allowance
due to the poor operating results of Lecien Corp. However, as a result of considering the change in the realizability of deferred tax assets triggeredby the resolution, the Company reversed ¥1,398 million of valuation allowance and recognized the same amount of income tax benefit for the year
ended March 31, 2015.
The Companies reversed a part of its valuation allowance and utilized ¥811 million and ¥847 million of tax loss carryforwards, and recognizedtax benefits of ¥246 million and ¥226 million for the years ended March 31, 2015 and 2014, respectively.
As of March 31, 2015, certain subsidiaries had tax loss carryforwards, which are available to offset future taxable income of such subsidiaries,
expiring as follows:Year Ending March 31

2016
2017
2018
2019
2020
2021
2022
2023
2024
Thereafter
Total

Millions of yen¥   170
370
438
1,905
2,693
1,056
44
24
3,670
¥10,370

73

There was no portion of undistributed earnings of foreign subsidiaries and foreign corporate joint ventures which was deemed to be permanently invested as of March 31, 2015 and 2014.
A reconciliation of beginning and ending amounts of unrecognized tax benefits was as follows:
Millions of yen

Balance at the beginning of the year
Additions based on tax positions related to the current year
Reductions for tax positions of prior years
Balance at the end of the year
The total amount of unrecognized tax benefits that, if recognized,

2015

2014

2013

¥296
16

¥ 313
133
(150)
¥ 296

¥267
46

¥312

¥313

The Companies file income tax returns in Japan and various

would affect the effective tax rate is ¥312 million, ¥296 million andforeign tax jurisdictions. In Japan, the Companies are no longer¥313 million as of March 31, 2015, 2014 and 2013, respectively.

subject to regular income tax examinations by the tax authorities for

The Companies recognize interest and penalties accrued related

years before 2012 with few exceptions. For other countries, theto unrecognized tax benefits in income taxes in the consolidated

Companies are no longer subject to regular income tax examinations

statements of income. Total amounts of interest and penalties recog-by the tax authorities for years before 2006 with few exceptions. In thenized in the consolidated statements of income for the years ended

year ended March 31, 2009, the transfer pricing examinations ofMarch 31, 2015, 2014 and 2013 were not material.

certain domestic subsidiaries’ 2002 to 2007 fiscal years and certain U.S.
subsidiaries’ 2004 and 2003 fiscal years were completed.

18. RELATED-PARTY TRANSACTIONS 
The Companies purchase merchandise from numerous suppliers

ended March 31, 2015, 2014 and 2013, respectively. The accounts

throughout the world, including certain affiliated companies of thereceivable from affiliated companies were ¥70 million and ¥58 million

Companies. The Companies purchased merchandise from affiliatedas of March 31, 2015 and 2014, respectively.

companies in the amount of ¥2,581 million, ¥2,375 million and ¥2,353

The Companies earn royalties from the use of the Wacoal Brand by

million in the fiscal years ended March 31, 2015, 2014 and 2013,certain affiliated companies. The amount of royalty revenue earned

respectively. The accounts payable to affiliated companies were ¥142

was ¥288 million, ¥248 million and ¥247 million in the fiscal years

million and ¥220 million as of March 31, 2015 and 2014, respectively.

ended March 31, 2015, 2014 and 2013, respectively. Other accounts

The Companies also sell supplies, materials and products toreceivable from affiliated companies, which are included in othercertain affiliated companies. Aggregate sales to affiliated companies

current assets in the consolidated balance sheets, were ¥219 million

were ¥386 million, ¥342 million and ¥381 million in the fiscal years

and ¥188 million as of March 31, 2015 and 2014, respectively.

19. EARNINGS PER SHARE 
Basic net income attributable to Wacoal Holdings Corp. per share has

Holdings Corp. per share was 140,839,059 shares, 140,841,722 shares

been computed by dividing net income attributable to Wacoal

and 140,846,298 shares for the years ended March 31, 2015, 2014 andHoldings Corp. by the weighted-average number of common shares2013, respectively. The weighted-average number of diluted common

outstanding during each year. Diluted net income attributable toshares outstanding used in the computations of diluted net income

Wacoal Holdings Corp. per share assumes the dilution that could

attributable to Wacoal Holdings Corp. per share was 141,203,998

occur if share-based option to issue common stock were exercised.

shares, 141,135,395 shares and 141,070,568 shares for the years ended

The weighted-average number of common shares outstandingused in the computations of basic net income attributable to Wacoal

74

March 31, 2015, 2014 and 2013, respectively.

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

20. FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts and fair values of financial instruments as of March 31, 2015 and 2014 were as follows:
Millions of yen

2014

2015

Assets:Marketable securities (Notes 3 and 21)
Investments (Notes 3 and 21)
Foreign exchange contracts (Note 21)
		Total assets
Liabilities:
Foreign exchange contracts (Note 21)
Long-term debt including current portion
		Total liabilities
There are investments in nonmarketable equity securities and debt

Carrying
AmountFair Value

Carrying
AmountFair Value¥ 2,387
58,668209¥61,264¥ 2,386
58,665
209¥61,260¥ 3,523
44,58918¥48,130¥ 3,520
44,592
18¥48,130¥(4,779)¥(4,779)¥ (4,780)¥ (4,780)¥    (1)(1,517)¥ (1,518)¥    (1)(1,518)¥ (1,519)

similar types of borrowings with similar terms and remaining maturi-

securities for which there are no readily determinable fair values. Seeties. The estimated fair value is based on Level 2 input.

Note 3 for further information. The carrying amounts of all other finan-

LIMITATIONS—Fair value estimates are made at a specific point incial instruments approximate their estimated fair values because oftime, based on relevant market information and information about thethe short maturity of those instruments.

financial instruments. These estimates are subjective in nature and

FOREIGN EXCHANGE CONTRACTS—The Companies are exposed

involve uncertainties and matters of significant judgment and there-

to foreign currency exchange risks on the transactions denominated infore cannot be determined with precision. Changes in assumptions

foreign currencies relating to its ongoing business operations. Suchcould significantly affect the estimates.

risks are primarily managed by using foreign currency exchange

CONCENTRATION OF CREDIT RISK—The Companies’ business

contracts. The Companies measure forward currency exchange

consists primarily of sales of women’s intimate apparel to a large

contracts at the fair value since they are not designated as hedge.

number of diverse customers in the Japanese retail industry, which

MARKETABLE SECURITIES AND INVESTMENTS—Held-to-maturity

include well-established department stores, general merchandise

debt securities are classified as marketable securities and investments

stores and other general retailers and specialty stores. No single

as of March 31, 2015 and as investments as of March 31, 2014, respec-

customer constitutes 10.0% or more of the total sales, although thetively. The fair value of these held-to-maturity debt securities are clas-

general retail customers that are consolidated companies within thesified as Level 1. For all other investments included in marketable

Aeon Group collectively accounted for approximately 8.9%, 10.0% andsecurities and investments, see Notes 3 and 21.

9.1% of the total sales in fiscal years ended March 31, 2015, 2014 and

LONG-TERM DEBT—The fair values for long-term debt are estimated2013, respectively.

by discounted cash flow analysis, using rates currently available for75

21. FAIR VALUE MEASUREMENTS 
The guidance for fair value measurements defines fair value as theLevel 1— Inputs are quoted prices in active markets for identical assets

price that would be received to sell an asset or paid to transfer aliability (an exit price) in the principal or most advantageous market foror liabilities.
Level 2—Inputs are quoted prices for similar assets or liabilities in

the asset or liability in an orderly transaction between market partici-

active markets, quoted prices for identical or similar assets or

pants at the measurement date. The guidance establishes a three-levelliabilities in markets that are not active, inputs other thanfair value hierarchy that prioritizes the inputs used to measure fairquoted prices that are observable, and inputs that arevalue as follows:derived principally from or corroborated by observable
market data by correlation or other means.
Level 3—Inputs are unobservable.

ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
Assets and liabilities measured at fair value on a recurring basis as of March 31, 2015 and 2014 were as follows:
Millions of yen
2015

Assets:Marketable securities:
		Municipal bonds
		Corporate bonds
		Mutual funds
			Total marketable securities
Investments:
		Equity securities
Derivative instruments:
		 Foreign exchange contracts
			Total assets

Level 1

Level 2

Level 3¥   10
501
1,390
1,901

Total

¥    10
501
1,390
1,901

¥58,048

58,048¥58,048209¥2,110Level 1

Level 2

209
¥60,158
Millions of yen

2014

Assets:Marketable securities:
		Municipal bonds
		Corporate bonds
		Mutual funds
			Total marketable securities
Investments:
		Equity securities
Derivative instruments:
		 Foreign exchange contracts
			Total assets
Liabilities:
Derivative instruments:
		 Foreign exchange contracts76¥   10
502
2,906
3,418
¥44,170¥44,170

Level 3Total¥    10
502
2,906
3,418
44,17018¥3,43618¥47,606¥   (1)¥    (1)Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

Message from Top
Management

CSR Activities

Marketable securities and investments presented in Level 1 are

Management
Foundation

Financial Section

Derivative instruments are composed of foreign currency exchange

valued using an unadjusted quoted market price in active markets with

contracts. Financial instruments presented in Level 2 are valued using

sufficient volume and frequency of transactions. Bonds presented inquotes obtained from third parties.

Level 2 are valued by the financial institution using quoted market price

The changes in the fair value of the foreign currency exchange

for identical instruments in markets that are not active and mutual

contracts are recorded in earnings, since the foreign currency

funds presented in Level 2 are valued by the financial institution based

exchange contracts are not designated as a hedge. The Companieson quoted prices in both active and inactive market for identical instru-

recognized a gain of ¥192 million, ¥5 million and ¥40 million in other-ments which comprise funds.

net of other income (expenses) in the years ended March 31, 2015,

As presented in Note 3, the Companies recorded impairment

2014 and 2013, respectively.

charges on marketable securities and investments if a decline in fair

The Companies recorded the derivative instruments as othervalue of marketable securities and investments is determined to be

current assets in the consolidated balance sheets at fair value of ¥209

other than temporary.

million as of March 31, 2015. The derivative instruments are presented
as other current assets and other current liabilities in the consolidatedbalance sheets at fair value of ¥18 million and ¥1 million as of March 31,
2014, respectively.

ASSETS MEASURED AT FAIR VALUE ON A NONRECURRING BASIS
Assets measured at fair value on a nonrecurring basis as of March 31, 2015 were as follows:
Millions of yen
2015

Goodwill (Note 8)
Trademarks (Note 8)

Level 1

Level 2

Level 3

Total

Total Losses¥4,325
1,994¥4,325
1,994¥(4,845)(1,176)¥(6,021)

As of the end of March 31, 2015, goodwill with a carrying amountprofit margins and working capital levels of the reporting units. The rateof ¥9,170 million was written down to its implied fair value of ¥4,325

of royalty used for the valuation was based on the actual royalty ratio usedmillion, resulting in an impairment charge of ¥4,845 million, which isin transactions. The risk-adjusted discount rate represents a weighted-

included in earnings for the year ended March 31, 2015. The impair-

average cost of capital (WACC) adjusted for inherent risk spread.

ment arose due to the decline in its fair value, which was mainly
caused by a downturn in consumption due to general market conditions.
To measure the fair values of the reporting units, the Companies used

There were no significant assets or liabilities that were measured
at fair value on a nonrecurring basis as of March 31, 2014.
As of the end of March 31, 2013, goodwill with a carrying amountthe expected present value of future cash flows and incorporatedof ¥10,367 million was written down to its implied fair value of ¥9,170

relevant unobservable inputs, such as management’s internal assump-

million, resulting in an impairment charge of ¥1,197 million, which istions about future cash flows and appropriately risk-adjusted discountincluded in earnings for the year ended March 31, 2013. The impair-rates, which reflected the management’s estimate of assumptions thatment arose due to the decline in its fair value, which was mainly

market participants would use in pricing the asset in an arm’s length

caused by a downturn in consumption due to general market condi-

transaction as of the measurement date.

tions. To measure the fair values of the reporting units, the Companies

Trademarks with a carrying amount of ¥3,170 million as of Marchused the expected present value of future cash flows and incorpo-

31, 2015, were written down to their fair values of ¥1,994 million,

rated relevant unobservable inputs, such as management’s internal

resulting in recognition of an impairment charge of ¥1,176 million forassumptions about future cash flows and appropriately risk-adjusted

the year ended March 31, 2015. The impairment arose due to thediscount rates, which reflected the management’s estimate of assump-decline in their fair value, which was mainly caused by a downturn intions that market participants would use in pricing the asset in an

consumption due to general market conditions. To measure the fairarm’s length transaction as of the measurement date.

value of the trademarks, the Companies used the relief-from royalty

Trademarks with a carrying amount of ¥4,757 million as of Marchmethod and incorporated relevant unobservable inputs, such as31, 2013, were written down to their fair values of ¥3,170 million,

management’s internal assumptions about future cash flows, the rate

resulting in recognition of an impairment charge of ¥1,587 million forof royalty, and appropriately risk-adjusted discount rate, which

the year ended March 31, 2013. The impairment arose due to thereflected the management’s estimate of assumptions that market

decline in their fair value, which was mainly caused by a downturn inparticipants would use in pricing the asset in an arm’s length transac-

consumption due to general market conditions. To measure the fairtion as of the measurement date. Future cash flows were based on thevalue of the trademarks, the Companies used the relief-from royalty

management’s cash flow projections for the future five years, and after

method and incorporated relevant unobservable inputs, such as

five years, future cash flows were estimated using the perpetuity

management’s internal assumptions about future cash flows, the rate

growth rate of 0%. The management’s cash flow projections wereof royalty, and appropriately risk-adjusted discount rate, whichdeveloped using estimates for expected future revenue growth rates,reflected the management’s estimate of assumptions that market

77

participants would use in pricing the asset in an arm’s length transac-

would use in pricing the asset in a current transaction as of thetion as of the measurement date. Future cash flows were based on themeasurement date. The future cash flows were projected in the same

management’s cash flow projections for the future five years, and after

way as described in the trademarks. The percentage of orders that thefive years, future cash flows were estimated using the perpetuity growth

Companies expect to receive from the customers existing at the point

rate of 0%. The management’s cash flow projections were developedof acquisition was estimated based on the historical trend of theusing estimates for expected future revenue growth rates, profit

percentage of sales to the preacquisition customers. A risk-adjusted

margins and working capital levels of the reporting units. The rate ofdiscount rate representing a WACC was determined using the capitalroyalty used for the valuation was based on the actual royalty ratio used

asset pricing model.

in transactions. The risk-adjusted discount rate represents a weightedaverage cost of capital (WACC) adjusted for inherent risk spread.
Customer relationships with a carrying amount of ¥361 million as ofValuation process:
The valuation process involved in Level 3 measurements for applicable

March 31, 2013 were written down to their fair value of ¥293 million,

asset and liability is governed by the valuation policies and procedures,

resulting in recognition of impairment charges of ¥68 million for the

including evaluation method for fair value measurements, pre-approved

year ended March 31, 2013. The impairments recorded for this yearby the Companies. Based on the policies and procedures, either

arose due to the decline in their fair value, which were mainly caused

personnel from the accounting division or personnel in charge of valu-

by a downturn in consumption because of general market conditions.

ation determine the valuation model to be utilized to measure each

To measure the fair values of the customer relationships, theasset and liability at fair value. We engage independent external

Companies used the excess earnings method and incorporated rele-

experts of valuation to assist us in the valuation process for certain

vant unobservable inputs, such as management’s internal assumptions

assets over a specific amount, and their results of valuations areabout future cash flows, the percentage of orders that the Companies

reviewed by the responsible personnel. All the valuations including

expect to receive from the customers existing at the point of acquisi-

those performed by the external experts are reviewed and approvedtion and appropriately risk-adjusted discount rate, which reflected theby the management of the Company before being recorded in the

management’s estimate of assumptions that market participants

general ledger.

Quantitative information regarding Level 3 fair value measurements:
Information about valuation techniques and significant unobservable inputs used for Level 3 assets measured at fair value for the year ended
March 31, 2015 is as follows:
Millions of yen
March 31, 2015

Fair Value

Valuation TechniquePrincipal Unobservable Input

Trademarks¥1,994

Relief-from royalty method

Discount rate
Royalty rate
Short-term revenue growth rates(within five years)
Perpetuity growth rate(over five years)

Range

7.3% - 11.3%
3.0% - 4.0%
2.3% - 5.3%
0%

22. SEGMENT INFORMATION OPERATING SEGMENT INFORMATION

by the chief operating decision maker in deciding how to allocate the

The Companies have three reportable segments: “Wacoal businessCompanies’ resources and in assessing their performance. The(domestic),” “Wacoal business (overseas),” and “Peach John,” which

accounting policies used for these reportable segments are the same

are based on their locations and brands. These segments represent

as those described in the summary of significant accounting policies

components of the Companies for which separate financial informationin Note 1.

is available and for which operating profit (loss) is reviewed regularly

78

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

Message from Top
Management

CSR Activities

Management
Foundation

Financial Section“Wacoal business (domestic)” segment primarily produces and sells innerwear (consisting of foundation, lingerie, nightwear and children’s
innerwear), outerwear, sportswear and hosiery. “Wacoal business (overseas)” segment produces and sells innerwear (consisting of foundation,
lingerie, nightwear and children’s innerwear), outerwear, sportswear and hosiery. “Peach John” segment produces and sells innerwear (consistingof foundation, lingerie, nightwear and children’s innerwear), outerwear, and other textile-related products, which are sold under the “Peach John”
brand. “Other” segment produces and sells innerwear (consisting of foundation, lingerie, nightwear and children’s innerwear), outerwear,
sportswear, other textile-related products, mannequins and construction of stores and interior design.
Information about operating results and assets for each segment as of and for the years ended March 31, 2015, 2014 and 2013 is as follows:
Millions of yen
2015

Net sales:
External customers
Intersegment
		TotalOperating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Impairment charges on goodwill (Note 8)
Impairment charges on other intangible assets (Note 8)
		TotalOperating profit (loss)
Total assets and capital expenditures:
Total assets
Capital expenditures

Wacoal Business(Domestic)

Wacoal Business(Overseas)

Peach John

Other

¥112,203
1,906
114,109¥48,107
8,592
56,699¥11,626650
12,276¥19,829
5,046
24,875

102,789
2,876

50,444
1,479

24,469248(16,194)

105,665
8,444

51,923
4,776

12,080
471
4,845
1,176
18,572(6,296)

24,717
158(16,194)

261,467
3,338

78,143742

11,748300

20,78998(71,875)

Wacoal Business(Domestic)

Wacoal Business(Overseas)

Peach John

Other

Elimination¥118,085
2,149
120,234¥43,636
8,049
51,685¥12,482455
12,937¥19,578
5,406
24,984¥(16,059)(16,059)

108,015
2,935
110,950
9,284

46,4101,238
47,648
4,037

12,270584
12,85483

24,249279
24,528456(16,059)244,502
2,210

69,352621

18,026296

20,070337(79,962)

Wacoal Business(Domestic)

Wacoal Business(Overseas)

Peach John

Other

Elimination¥115,657
2,193
117,850¥33,345
7,575
40,920¥11,972
232
12,204¥19,256
5,415
24,671¥(15,415)(15,415)

106,482
2,945

37,868
1,029

23,699218(15,415)

109,427
8,423

38,8972,023

11,357
696
1,197
1,655
14,905(2,701)

23,917754(15,415)

236,006
2,283

59,237688

18,135
202

19,721
157(78,563)

Elimination

Consolidated¥191,765¥(16,194)(16,194)

191,765
173,588
5,074
4,845
1,176
184,683
7,082
300,272
4,478
Millions of yen

2014

Net sales:
External customers
Intersegment
		TotalOperating costs and expenses:
Operating costs and expenses
Depreciation and amortization
		TotalOperating profit
Total assets and capital expenditures:
Total assets
Capital expenditures

Consolidated¥193,781(16,059)

193,781
174,885
5,036
179,921
13,860271,988
3,464
Millions of yen

2013

Net sales:
External customers
Intersegment
		TotalOperating costs and expenses:
Operating costs and expenses
Depreciation and amortization
Impairment charges on goodwill (Note 8)
Impairment charges on other intangible assets (Note 8)
		TotalOperating profit (loss)
Total assets and capital expenditures:
Total assets
Capital expenditures

Consolidated¥180,230
180,230
163,991
4,888
1,197
1,655
171,7318,499
254,5363,330

79

The Companies account for intersegment sales and transfers at cost plus a markup. Operating profit (loss) represents net sales less operating
costs and expenses.
PRODUCTS AND SERVICE INFORMATIONNet sales information by product and service for the years ended March 31, 2015, 2014 and 2013 is as follows:
Millions of yen

Innerwear:
Foundation and lingerieNightwear
Children’s underwear
		Subtotal
Outerwear/Sportswear
Hosiery
Other textile goods and related products
Others		Total

2015

2014

2013

¥142,681
9,514
1,373
153,568¥ 16,227
2,437
7,616
11,917¥191,765¥144,783
9,301
1,475
155,559¥ 16,954
2,252
8,577
10,900¥193,781¥132,525
9,221
1,465
143,211¥ 17,287
1,559
7,580
10,593¥180,230

GEOGRAPHIC INFORMATION
Information by major geographic area as of and for the years ended March 31, 2015, 2014 and 2013 is as follows:
Millions of yen

Net sales:Japan
Asia and Oceania
Americas and Europe
		Consolidated
Long-lived assets:Japan
Asia and Oceania
Americas and Europe
		Consolidated

2015

2014

2013

¥143,250
16,261
32,254¥191,765¥149,715
14,871
29,195¥193,781¥146,224
11,77722,229¥180,230¥ 43,200
2,998
2,990
¥ 49,188¥ 43,446
2,894
2,638
¥ 48,978¥ 44,670
2,692
2,303
¥ 49,665

Net sales are attributed to countries or areas based on the location of sellers.
Asia and Oceania includes East Asia, Southeast Asia, West Asia and Australia.
Countries or areas are classified according to their geographical proximity. Long-lived assets represent property, plant and equipment.

23. SUBSEQUENT EVENTS 
On May 11, 2015, the Board of Directors resolved to pay a cash dividend of ¥150 per 5 shares of common stock to holders of record as ofMarch 31, 2015 (aggregate amount of ¥4,225 million).

80

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

Independent Auditors’ Report

Deloitte Touche Tohmatsu LLC
Shijokarasuma FT Square
20, Naginataboko-cho
Karasuma-higashiiru, Shijo-doriShimogyo-ku, Kyoto 600-8008
Japan
Tel: +81 (75) 222 0181
Fax: +81 (75) 231 2703
www.deloitte.com/jp
To the Board of Directors and Stockholders of Wacoal Holdings Corp.
Kyoto, Japan
We have audited the accompanying consolidated financial statements of Wacoal Holdings Corp. and its subsidiaries (the “Company”), which
comprise the consolidated balance sheets as of March 31, 2015 and 2014, and the related consolidated statements of income, comprehensive
income, equity, and cash flows for each of the three years in the period ended March 31, 2015 (all expressed in Japanese yen), and the related
notes to the consolidated financial statements.

Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due tofraud or error.

Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits inaccordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theCompany’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we
express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company
as of March 31, 2015 and 2014, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2015,
in accordance with accounting principles generally accepted in the United States of America.

Convenience Translation
Our audits also comprehended the translation of the Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation has
been made in conformity with the basis stated in Note 2. The translation of the financial statement amounts into U.S. dollars has been made solely
for convenience of readers outside of Japan.

Report on Management’s Report on Internal Control over Financial Reporting
Notwithstanding the second paragraph of the “Auditors’ Responsibility” section, we have performed an audit of management’s report on internal
control over financial reporting (“ICFR”) under the Financial Instruments and Exchange Act of Japan. A translated copy of management’s reporton ICFR along with a translated copy of our report is included within this Annual Securities Report as information for readers.

June 26, 201581

Management’s Annual Report on Internal Control
Over Financial Reporting (Translation)
NOTE TO READERS
Following is an English translation of management’s report on internal control over financial (‘’ICFR’’) filed under the Financial Instruments
and Exchange Act of Japan. This report is presented merely as supplemental information.
There are differences between the management assessment of ICFR under the Financial Instruments and Exchange Act (‘’ICFR under
FIEA’’) and one conducted under the attestation standards established by the American Institute of Certified Public Accountants (‘’AICPA’’).
In the management assessment of ICFR under FIEA, there is detailed guidance on the scope of management assessment of ICFR suchas quantitative guidance on business units selection and/or account selection. In the management assessment of ICFR under the attestation standards established by the AICPA, there is no such detailed guidance. Accordingly based on the quantitative guidance which
provides an approximately measure for the scope of assessment of internal control over business processes, we designated the business
units that accounted for approximately two-thirds of the aggregated sales for the previous fiscal year on a consolidated basis as “significant business units” which should be subject to the process-level controls.

1. Matters Relating to the Basic Framework for Internal Control over Financial Reporting
Yoshikata Tsukamoto, President and Representative Director, Masaya Wakabayashi, Managing Director, are responsible for the designingand operating effective internal control over financial reporting of Wacoal Holdings Corp. (the “Company”), and have designed andoperated internal control over financial reporting in accordance with the basic framework for internal control set forth in “The Standards
and Practice Standards for Management Assessment and Audit of Internal Control Over Financial Reporting’’ published by the BusinessAccounting Council.
The internal control is designed to achieve its objectives to the extent reasonable through the effective function and combination of its
basic elements. Therefore, there is a possibility that misstatements may not be completely prevented or detected by internal control overfinancial reporting.

2. Matters Relating to Scope of Assessment, the Assessment Date, and Assessment Procedures
The assessment of internal control over financial reporting was performed as of March 31, 2015. The assessment was performed inaccordance with assessment standards for internal control over financial reporting generally accepted in Japan.
In conducting this assessment, we evaluated internal controls which may have a material effect on the entire financial reporting in aconsolidation (“company-level controls’’) and based on the result of this assessment, we appropriately selected business processes to beevaluated, analyzed these selected business processes, identified key controls that may have a material impact on the reliability of our
financial reporting, and assessed the design and operation of these key controls. These procedures have allowed us to evaluate theeffectiveness of its internal controls.
We determined the required scope of assessment of internal control over financial reporting for the Company, as well as its consolidated subsidiaries and equity-method affiliated companies, from the perspective of the materiality that may affect the reliability of our
financial reporting. The materiality that may affect the reliability of the financial reporting is determined taking into account the materiality of quantitative and qualitative impacts. We confirmed that we had reasonably determined the scope of assessment of internal controls over business processes in light of the results of assessment of company-level controls conducted for the Company, its consolidated
subsidiaries and equity-method affiliated companies. We did not include those consolidated subsidiaries and equity-method affiliatedcompanies which do not have any quantitatively or quantitatively material impact on the consolidated financial statements in the scopeof assessment of company-level controls
Regarding the scope of assessment of internal control over business processes, we designated the business locations that accounted
for approximately two-thirds of the aggregated sales for the previous fiscal year on a consolidated basis as “significant business locations” which should be subject to the process-level controls.
At the selected significant business units, we included, in the scope of assessment, those business processes leading to sales or
accounts receivable and inventories, as significant accounts that may have a material impact on the business objectives of us. Further, notonly at selected significant business units, but also at other business units, we added to the scope assessment, as business processes
having greater materiality considering their impact on the financial reporting, (1) those business processes relating to greater likelihoodof material misstatements and significant account involving estimates and the management’s judgment, and (2) those business processes
relating to businesses or operations dealing with high-risk transactions.

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Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

3. Matters Relating to the Results of Assessment
As a result of the assessment above, we concluded that our internal control over financial reporting was effective as of March 31, 2015.

4. Supplementary Matters
Not applicable.

5. Special Information
Not applicable.

Yoshikata Tukamoto
President and Representative Director
WACOAL HOLDINGS CORP.
Masaya Wakabayashi
Managing Director
WACOAL HOLDINGS CORP.

83

Independent Auditors’ Report

NOTE TO READERS:
Following is an English translation of the Independent Auditors’ Report filed under the Financial Instruments and Exchange Act of Japan.
This report is presented merely as supplemental information.
There are differences between an audit of internal control over financial reporting (“ICFR”) under the Financial Instruments and Exchange Act(“ICFR under FIEA”) and one conducted under the attestation standards established by the American Institute of Certified Public Accountants(“AICPA”).
In an audit of ICFR under FIEA, the auditors express an opinion on management’s report on ICFR, and do not express an opinion on the
Company’s ICFR directly. In an audit of ICFR under the attestation standards established by the AICPA, the auditors express an opinion on the
Company’s ICFR directly. Also in an audit of ICFR under FIEA, there is detailed guidance on the scope of an audit of ICFR, such as quantitative
guidance on business units selection and/or account selection. In an audit of ICFR under the attestation standards established by the AICPA, there
is no such detailed guidance. Accordingly, based on the quantitative guidance which provides an approximate measure for the scope of assessment of internal control over business process, we used a measure of approximately 70% of total assets on a consolidated basis and income
before income taxes on a consolidated basis for the selection of significant business units.

(TRANSLATION)
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability
Partner,Engagement Partner,
Certified Public Accountant:		Fumihiko Kimura

Designated Unlimited Liability
PartnerEngagement Partner,
Certified Public Accountant:		Koichiro Tsukuda

Designated Unlimited Liability
PartnerEngagement Partner,
Certified Public Accountant:		Seiichiro Nakashima

To the Board of Directors of Wacoal Holdings Corp.

Audit of Financial Statements
Pursuant to the first paragraph of Article 193 2 of the Financial Instruments and Exchange Act, we have audited the consolidated financial
statements included in the Financial Section, namely, the consolidated balance sheet as of March 31, 2015 of Wacoal Holdings Corp. and its
consolidated subsidiaries (the “Company”), and the consolidated statement of income, comprehensive income, equity and cash flows for the
fiscal year from April 1, 2014 to March 31, 2015, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America pursuant to the third paragraph of the Supplementary Provisions of the Cabinet
Office Ordinance for Partial Amendment of the Regulations for Terminology, Forms and Preparation Methods of Consolidated Financial
Statements (No.11 of the Cabinet Office Ordinance in 2002), and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

84

Overview of the
Wacoal GroupSpecial FeatureManagement Strategy

CSR Activities

Message from Top
Management

Management
Foundation

Financial Section

Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordancewith auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Audit Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of theCompany as of March 31, 2015, and the results of their operations and their cash flows for the year then ended in accordance with accounting
principles generally accepted in the United States of America.

Audit of Internal Control
Pursuant to the second paragraph of Article 193 2 of the Financial Instruments and Exchange Act, we have audited management’s report oninternal control over financial reporting of the Company as of March 31, 2015.

Management’s Responsibility for the Report on Internal Control
Management is responsible for designing and operating effective internal control over financial reporting and for the preparation and fairpresentation of its report on internal control in accordance with assessment standards for internal control over financial reporting generally accepted inJapan. There is a possibility that misstatements may not be completely prevented or detected by internal control over financial reporting.

Auditors’ Responsibility
Our responsibility is to express an opinion on management’s report on internal control based on our internal control audit. We conducted ourinternal control audit in accordance with auditing standards for internal control over financial reporting generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether management’s report on internal control isfree from material misstatement.
An internal control audit involves performing procedures to obtain audit evidence about the results of the assessment of internal control overfinancial reporting in management’s report on internal control. The procedures selected depend on the auditors’ judgment, including thesignificance of effects on reliability of financial reporting. An internal control audit includes examining representations on the scope, procedures
and results of the assessment of internal control over financial reporting made by management, as well as evaluating the overall presentation ofmanagement’s report on internal control.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, management’s report on internal control over financial reporting referred to above, which represents that the internal control
over financial reporting of the Company as of March 31, 2015 is effectively maintained, presents fairly, in all material respects, the results of theassessment of internal control over financial reporting in accordance with assessment standards for internal control over financial reporting
generally accepted in Japan.

Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure is required under the provisions of theCertified Public Accountants Act.

June 26, 201585

Corporate Data
As of March 31, 2015

HEAD OFFICEINTERNATIONAL NETWORKWeb Sitewww.wacoalholdings.jp/en

Wacoal International Corp. (U.S.)
One Wacoal Plaza, Lyndhurst,
N.J. 07071, U.S.A.
Tel 1-201-933-8400

29, Nakajima-cho, Kisshoin,
Minami-ku, Kyoto 601-8530, Japan
Tel 075-694-3111 Fax 075-694-3109

Wacoal America, Inc.
136 Madison Avenue,
New York, N.Y. 10016, U.S.A.
Tel 1-212-532-6100

Date of Foundation
June 15, 1946
Date of Establishment
November 1, 1949
Shareholders’ Equity¥228,857 million

WACOAL CANADA INC.
155 Rene-Levesque Blvd, W.40th Floor
Montreal, Q.C., Canada H3B 3V2
Tel 1-514-448-2173

Number of Employees(Consolidated)
20,196

DOMESTIC PRINCIPAL SUBSIDIARIES
Wacoal Holdings Equity Owned

Wacoal Corp.
Lecien Corporation
Peach John Co., Ltd.
Nanasai Co., Ltd.
Une nana cool Corp.
Ai CO., LTD.
Kyushu Wacoal Manufacturing Corp.
Niigata Wacoal Sewing Corp.
Hokuriku Wacoal Sewing Corp.
Torica Inc.
Wacoal Career Service Corp.
Wacoal Service Co., Ltd.
Wacoal Distribution Corp.

%

100
100
100
99
100
100
100
100
100
57
100
100
100

OVERSEAS PRINCIPAL SUBSIDIARIES
Wacoal Holdings Equity Owned

Wacoal International Corp. (U.S.A.)
Wacoal America, Inc.
Wacoal (UK) Limited
WACOAL CANADA INC.
Wacoal Direct Corp.
Wacoal Singapore Pte. Ltd.
Wacoal Hong Kong Co., Ltd.
Wacoal International
Hong Kong Co., Ltd.
Wacoal China Co., Ltd.
Guangdong Wacoal Inc.
Dalian Wacoal Co., Ltd.
Vietnam Wacoal Corp.
Wacoal Dominicana Corp.
Philippine Wacoal Corp.
Wacoal Sports Science Corp.
Wacoal Europe Ltd.

%

100
100
100
100
100
100
80
100
100
100
100
100
100
67
100
100

DOMESTIC PRINCIPAL JOINT VENTURES
Wacoal Holdings Equity Owned

%House of Rose Co., Ltd.

24

OVERSEAS JOINT VENTURES

86

Wacoal Holdings Equity Owned

%Shinyoung Wacoal Inc. (South Korea)
Thai Wacoal Public Company Limited
Taiwan Wacoal Co., Ltd.
PT. Indonesia Wacoal
Wacoal Malaysia Sdn. Bhd.
Shanghai Yadie Fashion Co., Ltd.

25
34
50
42
50
20

Wacoal Dominicana Corp.
Las Americas Industrial Free Zone,
KM.22, aut. Las Americas,
Santo Domingo, Dominican Republic
Tel 1-809-549-1090
Wacoal Europe Ltd.
Rothwell Road, Desborough, Kettering,Northamptonshire NN14 2PG,
United Kingdom
Tel 44-1536-760-282
Wacoal China Co., Ltd.
Jia 16 Tongji North Road,
Beijing Economic and Technological
Development Area, Beijing 100176, P.R.C.
Tel 86-10-6787-2185
Guangdong Wacoal Inc.
Huahai Industrial District,
Xinhua Town, Huadu Qu,
Guangzhou City, Guangdong, P.R.C.
Tel 86-20-8686-1170
Dalian Wacoal Co., Ltd.
No.6 Fu An Street, Economic andTechnical Development Zone, Dalian,
116600, P. R. C.
Tel 86-411-8733-7722
Wacoal Hong Kong Co., Ltd.
8th Floor, EGL Tower,
No. 83 Hung To Road, Kwun Tong,
Kowloon, Hong KongTel 852-2811-3202
Wacoal International Hong Kong Co., Ltd.
8th Floor, EGL Tower,
No. 83 Hung To Road, Kwun Tong,
Kowloon, Hong KongTel 852-2561-9191

Wacoal Singapore Pte. Ltd.
215 Henderson Road,#01-08 Henderson Industrial Park,
Singapore 159554
Tel 65-6270-2887
Vietnam Wacoal Corp.
110 Amata Road,
Amata Modern Industrial Park,
Long Binh Ward, Bien Hoa City,
Dong Nai Province,
Socialist Republic of Vietnam
Tel 84-61-3936770
Philippine Wacoal Corp.
3rd Floor, 6788 Ayala Avenue,
Oledan Square, Makati City 1226,
Philippines
Tel 63-2-893-7432
Thai Wacoal Public Company Limited
930/1 Soi Pradoo 1,
Sathupradith, Bangkholaem,
Bangkok, Thailand
Tel 66-2-289-3100
Taiwan Wacoal Co., Ltd.
15 Jingkwo Road, Taoyuan,
Taiwan, R.O.C.
Tel 886-3-326-9369
Shinyoung Wacoal Inc. (South Korea)
345-54 Gasan-Dong, Geumcheon Gu,
Seoul 153-023, Korea
Tel 82-2-818-5120
PT. Indonesia Wacoal
Jl. Tarikolot Rt.01/Rk.001 No. 59,
Citeureup-Bogor 16810, Indonesia
Tel 62-21-560-0715
Wacoal Malaysia Sdn. Bhd.
5th Floor, Plaza Hamodal,
Lot 15, Jalan 13/2 (Section 13),46200 Petaling Jaya,
Selangor, Malaysia
Tel 60-3-7960-8308

Investor Information
As of March 31, 2015

Ownership and Distribution of Shares

STOCK LISTINGTokyo

Securities firms

FISCAL YEAR-END
March 31

1.86%
Individuals and others

SECURITIES CODE
3591

18.47%COMMON STOCK
Issued: 143,378,085 shares
Outstanding: 140,840,809 shares

Financial
institutions

TRADING UNIT
1,000 shares

39.93%

Other Japanesecompanies

21.24%SHAREHOLDER REGISTER AGENT FOR
COMMON STOCK
Mitsubishi UFJ Trust andBanking Corporation,
1-4-5, Marunouchi, Chiyoda-ku,
Tokyo 100-8212, Japan

Foreign institutions
and individuals

18.50%AMERICAN DEPOSITARY RECEIPTS
Cusip No.: 930004205
Ratio (ADR:ORD): 1:5Market: OTCQX
Symbol: WACLY

Major Shareholders

DEPOSITARY
The Bank of New York Mellon,
101 Barclay Street,
New York, NY 10286, U.S.A.
Tel 1-212-815-8161
U.S. toll free 888-269-2377(888-BNY-ADRS)
www.adrbny.com%

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

4.87

The Master Trust Bank of Japan, Ltd. (Trust Account)

4.34

Meiji Yasuda Life Insurance Company

4.25

The Bank of Kyoto, Ltd.

3.28

Japan Trustee Services Bank, Ltd. (Trust Account)

3.00

Nippon Life Insurance Company

2.56

The Shiga Bank, Ltd.

2.54

Mitsubishi UFJ Trust and Banking Corporation

2.12

The Dai-ichi Life Insurance Company, Ltd.

1.90

Asahi Kasei Fibers Corporation

1.73

NUMBER OF SHAREHOLDERS
14,660Stock Price / Trading Volume¥ / Thousand shares
Stock Price
2,000

1,500

We will contribute tosociety by helping women to
express their beauty.
The Calligraphy of
Wacoal Group Founder

1,000

500

Trading Volume
20,000Koichi Tsukamoto
15,00010,000
5,000
0
06/1

07/1

08/1

09/1

10/1

11/1

12/1

13/1

14/1

15/1

Forward-Looking Statements: Statements contained in this integrated report that are not historical facts are forward-looking statements, which reflect theCompany’s plans and expectations at the time of writing.
These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the Company’s actual results,
performance, or achievements to differ materially from those anticipated in these statements.

87www.wacoalholdings.jp/en

WACOAL HOLDINGS
Integrated Report 2015

Integrated Report
発行日150831-DN-AT3
Printed in Japan2015

WACOAL HOLDINGS