FAST RETAILING CO., LTD.
迅銷有限公司First Quarterly Report 2017/18
2017.9.1–2017.11.30
Stock Code: 6288

Contents
Corporate Profile

2

Financial Highlights

3Management Discussion and Analysis

5

Information about the Reporting Entity

9

Financial Section

15

Interim Condensed Consolidated Statement of
Financial Position

16

Interim Condensed Consolidated Statement ofProfit or Loss and Interim Condensed Consolidated
Statement of Other Comprehensive Income

17Interim Condensed Consolidated Statement of
Changes in Equity

18

Interim Condensed Consolidated Statement of Cash Flows20

Notes to the Interim Condensed Consolidated
Financial Statements

22

Others28

Independent Accountant’s Review Report29Corporate Profile
Board of Directors
Executive Director

Principal Place of Business in Japan
Midtown Tower 9-7-1
Akasaka Minato-ku
Tokyo 107-6231
Japan

Mr. Tadashi Yanai (Chairman of the Board, President andChief Executive Officer)

Non-Executive Director
Principal Place of Business in Hong Kong

Mr. Toru Murayama (External)

702–706, 7th Floor, Mira Place Tower A,
No. 132 Nathan Road
Tsim Sha Tsui
KowloonHong Kong

Independent Non-Executive Directors
Mr. Toru Hambayashi (External)
Mr. Nobumichi Hattori (External)
Mr. Masaaki Shintaku (External)
Mr. Takashi Nawa (External)

HDR Registrar and HDR Transfer Office
Audit & Supervisory Board Members
Mr. Akira Tanaka
Mr. Masaaki Shinjo
Mr. Takaharu Yasumoto (External)
Mr. Akira Watanabe (External)
Ms. Keiko Kaneko (External)

Computershare Hong Kong Investor Services Limited
Shops 1712–1716, 17th Floor
Hopewell Centre
183 Queen’s Road East
WanchaiHong Kong

Joint Company Secretaries

Stock CodeJapan: Mr. Mitsuru Ohki
Hong Kong: Ms. Choy Yee Man

Hong Kong: 6288
Japan: 9983

External Independent Accountants

Website Address

Deloitte Touche Tohmatsu LLC

http://www.fastretailing.com

Principal Banks
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.
The Hong Kong and Shanghai Banking Corporation Limited

Registered Office and Headquarters
717-1 Sayama
Yamaguchi City
Yamaguchi 754-0894
Japan

—2—

Financial Highlights
Financial Summary

TermFirst Quarterof
56th YearFirst Quarterof
57th Year

56th Year

Accounting period

Three months
ended
30 November
2016

Three months
ended
30 November
2017

Year ended
31 August
2017

Revenue (Millions of yen)

528,847

617,026

1,861,917

Operating profit (Millions of yen)

88,591

113,901

176,414

Profit before income taxes (Millions of yen)

104,204

117,832

193,398

Profit attributable to owners of the Parent (Millions of yen)

69,69578,540119,280

Comprehensive income/(loss) attributable to ownersof the Parent (Millions of yen)

151,581

88,565

190,566

Equity attributable to owners of the Parent (Millions of yen)

710,441806,281

731,770

1,410,933

1,633,058

1,388,486

Basic earnings per share for the period (Yen)

683.51770.11

1,169.70

Diluted earnings per share for the period (Yen)682.60768.991,168.00

50.4

49.4

52.7

Net cash generated by operating activities (Millions of yen)

99,886

120,056

212,168

Net cash used in investing activities (Millions of yen)

(15,049)(5,390)122,790

Net cash used in financing activities (Millions of yen)

(19,627)(16,600)(50,836)

Cash and cash equivalents at end of the period (year)(Millions of yen)

465,691

788,898

683,802

Total assets (Millions of yen)

Ratio of equity attributable to owners of
the Parent to total assets (%)(Notes)1. FAST RETAILING CO., LTD. (the “Company” or “Parent”) prepared interim condensed consolidated financial
statements, and therefore has not included information regarding changes in key management indices for thesubmitting company.
2. Revenue does not include consumption taxes, etc.
3. The financial figures are quoted from interim condensed consolidated financial statements or consolidated
financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”).

—3—

Business Description
There were no significant changes in the nature of the business engaged in by the Group (the Company and its subsidiaries)
during the three months ended 30 November 2017.
Important changes concerning subsidiaries are as follows:
Not applicable.

—4—Management Discussion and Analysis
Business Review
1. Business and Operational Risks
No new business-related risks have arisen during the three months ended 30 November 2017.
There have been no important changes concerning business-related risks as stated in the annual report for the preceding
consolidated fiscal year.

2.

Significant Contract in Business Operation
None.

3.

Financial Analysis(1)

Results of Operations
The Fast Retailing Group generated rises in both revenue and profit in the first quarter of fiscal 2018, or the three months
from 1 September 2017 to 30 November 2017. Consolidated revenue totaled ¥617.0 billion (+16.7% year-on-year) andoperating profit reached ¥113.9 billion (+28.6% year-on-year). The consolidated gross profit margin improved by 0.2 point
year-on-year and the selling, general and administrative expense ratio improved by 1.7 points. Under finance income, a
net gain of ¥3.9 billion was recorded after the spot foreign exchange rate at the end of November closed below the spot
rate at the start of the business term, increasing the carrying amount of our long-term foreign-currency denominatedassets in yen terms. As a result, profit before income taxes rose to ¥117.8 billion (+13.1% year-on-year) and profit
attributable to owners of the parent increased to ¥78.5 billion (+12.7% year-on-year). In terms of individual businesssegments, UNIQLO Japan, UNIQLO International, GU and Global Brands operations all reported rising revenue and profit
in the first quarter of fiscal 2018.
The Group’s medium-term vision is to become the world’s number one apparel retailer. In pursuit of this aim, we arefocusing our efforts on expanding UNIQLO International and our GU casual fashion brand. We continue to increase
UNIQLO store numbers in each country where we operate, and open global flagship stores and large-format storesin major cities around the world to help consolidate UNIQLO’s position as a key global brand. Within the UNIQLOInternational segment, Southeast Asia in particular is entering a new stage of growth and is set to become the segment’s
second pillar region after Greater China (Mainland China, Hong Kong and Taiwan) and South Korea. In terms of the GU
operation, in addition to opening more GU stores in Japan, we are also planning to expand GU’s international presence by
opening more stores in Greater China.
Due to its growing impact on overall consolidated performance, the low-priced GU casual fashion brand, formerly apart of the Global Brands business segment, has been separated into an independent business segment from the 2018
reporting period, Data for the 2017 reporting period have been adjusted to suit the new reporting segment structure tofacilitate year-on-year comparisons.
UNIQLO Japan
UNIQLO Japan reported a rise in revenue and profit in the first quarter of fiscal 2018, with revenue totaling ¥257.0
billion (+7.6% year-on-year) and operating profit totaling ¥54.1 billion (+18.6% year-on-year). In the three months to 30
November 2017, same-store sales, including online sales, expanded by 8.4% year-on-year.
Buoyant demand and ample inventory of flagship UNIQLO Fall Winter ranges such as HEATTECH, down coats, sweat
wear and merino sweaters resulted in strong sales. The November UNIQLO Anniversary Sale also generated considerably
higher-than-expected sales, resulting in the highest monthly sales figure for November on record. Online sales expanded
25.6% year-on-year in the first quarter to constitute 7.0% of overall sales. The cost of sales continued to rise on persistent
weakening in internal yen exchange rates. However, the decline in the gross profit margin was contained at 0.2 point
year-on-year thanks to lower discounting. Meanwhile, the selling, general and administrative expense ratio improvedby 1.7 points year-on-year on the back of significant reductions in advertising and promotion expenses, and distribution
costs.

—5—

UNIQLO International
UNIQLO International revenue and profit rose significantly in the first quarter of fiscal 2018, with revenue totaling ¥258.2
billion (+31.4% year-on-year) and operating profit rising to an impressive ¥46.6 billion (+54.7% year-on-year). Thanks tothe continued steady expansion of global UNIQLO operations, UNIQLO International revenue exceeded that of UNIQLO
Japan for the first time in this September to November quarter. Greater China, South Korea, and Southeast Asia &Oceania continued to drive segment growth by generating significant increases in revenue and profit. Thermal clothing
sold especially well in Greater China and South Korea after the Fall Winter season proved colder than the previous year.
Southeast Asia & Oceania contributed to the rise in UNIQLO International revenue thanks to strong sales of summer items
designed for year-round hot weather and buoyant demand for winter items from overseas travelers. In addition, after
suffering persistent losses, UNIQLO USA reported a profit in the first quarter of fiscal 2018. UNIQLO Europe reported astrong increase in profit on the back of solid performances from France and Russia. The first UNIQLO store opened inBarcelona, Spain in September 2017 went from strength to strength.
GU
The new GU business segment reported increases in both revenue and profit in the first quarter of fiscal 2018, withrevenue totaling ¥60.8 billion (+5.6% year-on-year) and operating profit reaching ¥9.0 billion (+31.8% year-on-year).
While the September launch of trendy items proved favorable, a lack of sought-after thermal items dampened sales from
October onwards, resulting in an overall decline in first-quarter same-store sales. Meanwhile, operating profit increasedon restricted discounts and active cost-cutting efforts.
Global Brands
The Global Brands segment generated increases in both revenue and profit in the first quarter of fiscal 2018, with revenue
rising to ¥40.0 billion (+13.8% year-on-year) and operating income expanding to ¥3.0 billion (+10.4% year-on-year). The
Theory fashion label generated rising revenue and profit. France-based Comptoir des Cotonniers reported a decline
in profits, while France-based Princesse tam.tam and US-based J Brand reported losses of a similar magnitude to theprevious year.
Sustainability
As the Fast Retailing Group expands its business globally, we remain committed to integrating sustainability into ouroperations from a long-term perspective. Our initiatives consist of activities across four priority areas: supply chain,products, stores and communities, and employees. In each area, we work to ensure transparency, accountability, andprovide timely and appropriate disclosure. We are also committed to contributing to the sustainable development ofsociety through our business.
We now employ 1,585 persons with disabilities across the Fast Retailing Group in 16 countries and regions as of the endof August 2017.
Through our All-Product Recycling Initiative, we have donated a total of 25.58 million products collected mainly from ourcustomers at UNIQLO and GU stores to 65 countries and regions as of the end of August 2017.
In November 2017, the UN High Commissioner for Refugees (UNHCR) Filippo Grandi met with Fast Retailing President
Tadashi Yanai to discuss various issues including increased clothing support for refugees, Myanmar’s Rohingya refugee
crisis, and difficulties faced by refugees in securing employment. At that time, President Yanai confirmed the Fast
Retailing Group’s intention to work closely with the UNHCR and to respond appropriately to various issues.
Regarding environmental impacts across our business activities, the fabric production processes accounts for a significant
proportion. We have embarked on an environmental impact reduction program with our main fabric supplier factories
responsible for 70% of UNIQLO production. We conducted assessments at these factories on a range of environmental
considerations such as greenhouse gas emissions, waste water, energy use, and use of chemical substances. Based onthese assessments, we held sessions in November 2017 with our main fabric supplier factories in China and Vietnam toreach agreements and targets on reducing their environmental impact.

—6—

(2)

Financial Positions
Total assets as at 30 November 2017 were ¥1,633.0 billion, which was an increase of ¥244.5 billion relative to theend of the preceding consolidated fiscal year. The principal factors were an increase of ¥105.0 billion in cash and cash
equivalents, an increase of ¥81.4 billion in trade and other receivables, an increase of ¥11.4 billion in inventories, anincrease of ¥8.3 billion in derivative financial assets and an increase of ¥36.9 billion in other current assets.
Total liabilities as at 30 November 2017 were ¥790.0 billion, which was an increase of ¥163.6 billion relative to the end of
the preceding consolidated fiscal year. The principal factors were a decrease of ¥39.5 billion in trade and other payables,
an increase of ¥12.4 billion in current tax liabilities and an increase of ¥198.0 billion in other current liabilities.
Total net assets as at 30 November 2017 were ¥842.9 billion, which was an increase of ¥80.9 billion relative to the endof the preceding consolidated fiscal year. The principal factors were an increase of ¥60.6 billion in retained earnings, anincrease of ¥10.0 billion in other components of equity and an increase of ¥6.4 billion in non-controlling interests.

(3)

Cash Flows Information
Cash and cash equivalents as at 30 November 2017 had increased by ¥323.2 billion from the three months ended 30
November 2016, to ¥788.8 billion.
Net cash generated by operating activities for the three months ended 30 November 2017 was ¥120.0 billion, which was
an increase of ¥20.1 billion (+20.2% year-on-year) from the three months ended 30 November 2016. The principal factors
were an increase of ¥80.8 billion in trade and other receivables (an increase of ¥18.8 billion from the three months ended
30 November 2016), a decrease of ¥43.6 billion in trade and other payables (a decrease of ¥107.1 billion from the threemonths ended 30 November 2016), an increase of ¥40.6 billion in other assets (an increase of ¥31.4 billion from the threemonths ended 30 November 2016) and an increase of ¥199.0 billion in other liabilities (an increase of ¥177.0 billion fromthe three months ended 30 November 2016).
Net cash used in investing activities for the three months ended 30 November 2017 was ¥5.3 billion, which was adecrease of ¥9.6 billion (-64.2 % year-on-year) from the three months ended 30 November 2016. The principal factor was¥2.3 billion deposited into bank deposits with maturity over 3 months (a decrease of ¥7.9 billion from the three months
ended 30 November 2016).
Net cash used in financing activities for the three months ended 30 November 2017 was ¥16.6 billion, which was adecrease of ¥3.0 billion (-15.4 % year-on-year) from the three months ended 30 November 2016. The principal factor was¥3.6 billion for capital contributions from non-controlling interests (an increase of ¥3.6 billion from the three months
ended 30 November 2016).

—7—

(4)

Operational and Financial Assignment
There have been no important changes during the three months ended 30 November 2017 concerning issues that must be
addressed by the Group.

(5)

Research and Development
Not applicable.

(6)

Important Facilities
The following are the important facilities that were newly completed during the three months ended 30 November 2017.
<Subsidiaries in Japan>
Not applicable.
<Overseas Subsidiaries>
Company name

Type of facility

Name of business

UNIQLO EUROPE LIMITEDUNIQLOInternational Stores

Paseo de Gracia 18

Barcelona
Spain

September 2017

UNIQLO CANADA INC.

UNIQLOInternational Stores

UNIQLO Metrotown

Vancouver
CanadaOctober 2017—8—

Location

Completion date

Information about the Reporting Entity
1. Stock Information(1) Number of Shares(i)

Total number of shares
Type

Total number of authorized shares (shares)

Common stock

300,000,000
Total(Note)(ii)

300,000,000

There are no provisions for preemptive rights under the Companies Act of Japan, which would oblige the Company tooffer new shares on a pro rata basis to existing shareholders.

Shares Issued

Type

As at 30 November 2017

Number of shares issued
as of submission date
(Shares)(As at 12 January 2018)

Name of financial
instrument exchangeof listing, or authorized
financial instruments
firms association

Details

100 sharesas one unit—

Common stock

106,073,656

106,073,656

First section of the Tokyo
Stock Exchange andthe Main board of
The Stock Exchange ofHong Kong Limited (Note)

Total

106,073,656

106,073,656—(Note) Hong Kong Depositary Receipts are listed on the Main Board of The Stock Exchange of Hong Kong Limited.

(2)

Share Subscription Rights
The Company has instituted a stock option program that grants rights to acquire new shares pursuant to the Companies
Act of Japan. Share subscription rights issued in the three months ended 30 November 2017 are as follows:(i)

8th Share subscription rights A type

Resolution date

12 October 2017

Number of stock options (Shares)

5,454

Number of share subscription rights for treasury stock(Shares)—

Type of shares to be issued upon exercise of sharesubscription rights

Common Stock

Number of shares to be issued upon exercise ofshare subscription rights (Shares)

5,454

Amount to be paid upon exercise of share subscription rights
(Yen)

1

Exercise period of share subscription rights

From 10 November 2020
To 9 November 2027

Fair value on the grant date and amount of paid-in capitalper share upon exercise of share subscription rights (Yen)

Issue price:
Paid-in capital:

Exercise conditions of share subscription rights

If a holder of share subscription rights waives the right toacquire shares, the share subscription rights shall be
forfeited and may not be exercised.

Matters pertaining to transfer of share subscription rights

Any acquisition of share subscription rights by transfer shallrequire an authorizing resolution from the Boardof Directors.

Matters pertaining to substitute payments

37,64818,824—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization(Notes)—9—

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of a merger (limited
to cases where the Company becomes extinct thereby), absorption-type company split or incorporation-type company
split (in each event, limited to cases where the Company is the surviving entity resulting from the company split), or
exchange or transfer of shares (in each event, limited to cases where the Company becomes a wholly-owned subsidiary),
parties holding share subscription rights in existence immediately preceding the effective date of such Reorganization(hereinafter referred to as “Outstanding Share Subscription Rights”) shall, in each applicable case, be issued sharesubscription rights for shares of the resulting company as prescribed in subparagraphs (a)-(e) of Article 236(1)viii of
the Companies Act of Japan (hereinafter referred to as the “Company Resulting From Reorganization”). In such event,
any Outstanding Share Subscription Rights shall lapse and the Company Resulting From Reorganization shall issue
new share subscription rights; provided, however, that terms and conditions stipulating that the Company Resulting
From Reorganization shall issue share subscription rights that prescribe the matters stated below are included in any
absorption merger agreement, new merger agreement, absorption-type company split agreement, incorporation-typecompany split plan, share exchange agreement or transfer of shares plan.
1.
Number of share subscription rights to be issued by the Company Resulting From Reorganization:
Each holder of Outstanding Share Subscription Rights shall be issued the same number thereof.
2.
Type of shares of the Company Resulting From Reorganization underlying the share subscription rights:
Common stock of the Company Resulting From Reorganization.
3.
Number of shares of the Company Resulting From Reorganization underlying the share subscription rights:
A proposal stating the conditions for Reorganization shall include a finalized statement of the type and number ofshares underlying the above-mentioned share subscription rights.
4.
Value of property to be incorporated upon exercise of the share subscription rights:
The value of property to be incorporated upon exercise of share subscription rights that are issued shall be theamount obtained by multiplying the exercise price after reorganization prescribed below by the number of sharesof the Company Resulting From Reorganization underlying the share subscription rights that have been finalized asstated in No. 3. above.
The exercise price after Reorganization shall be 1 yen per share of the Company Resulting From Reorganizationthat can be issued upon exercise of each share subscription right that is issued.
5.
Period during which share subscription rights can be exercised:
The period from the later of either the first day of the period during which the share subscription rights can be
exercised as prescribed above or the day on which a Reorganization takes effect through the final day of theperiod during which the share subscription rights can be exercised as prescribed above.
6.
Matters pertaining to the increase of capital and capital reserve resulting from the issuance of shares upon
exercise of the share subscription rights:
To be determined in order to align with the conditions applicable to the share subscription rights.
7.
Restrictions on acquisition of share subscription rights by transfer:Any acquisition of share subscription rights by transfer shall require an authorizing resolution from the Board of
Directors of the Company Resulting From Reorganization.
8.
Terms and conditions for acquisition of share subscription rights:
To be determined in order to align with the conditions applicable to the share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the share subscription rights.

— 10 —

(ii)

8th Share subscription rights B type

Resolution date

12 October 2017

Number of stock options (Shares)

48,178

Number of share subscription rights for treasury stock(Shares)—

Type of shares to be issued upon exercise of sharesubscription rights

Common Stock

Number of shares to be issued upon exercise ofshare subscription rights (Shares)

48,178Amount to be paid upon exercise of share subscription rights
(Yen)

1

Exercise period of share subscription rights

From 10 December 2017
To 9 November 2027

Fair value on the grant date and amount of paid-in capitalper share upon exercise of share subscription rights (Yen)

Issue price:
Paid-in capital:

Exercise conditions of share subscription rights

If a holder of share subscription rights waives the right toacquire shares, the share subscription rights shall be
forfeited and may not be exercised.

Matters pertaining to transfer of share subscription rights

Any acquisition of share subscription rights by transfer shallrequire an authorizing resolution from the Boardof Directors.

Matters pertaining to substitute payments

38,13319,066—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization(Notes)(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of a merger (limited
to cases where the Company becomes extinct thereby), absorption-type company split or incorporation-type company
split (in each event, limited to cases where the Company is the surviving entity resulting from the company split), or
exchange or transfer of shares (in each event, limited to cases where the Company becomes a wholly-owned subsidiary),
parties holding share subscription rights in existence immediately preceding the effective date of such Reorganization(hereinafter referred to as “Outstanding Share Subscription Rights”) shall, in each applicable case, be issued sharesubscription rights for shares of the resulting company as prescribed in subparagraphs (a)-(e) of Article 236(1)viii of
the Companies Act of Japan (hereinafter referred to as the “Company Resulting From Reorganization”). In such event,
any Outstanding Share Subscription Rights shall lapse and the Company Resulting From Reorganization shall issue
new share subscription rights; provided, however, that terms and conditions stipulating that the Company Resulting
From Reorganization shall issue share subscription rights that prescribe the matters stated below are included in any
absorption merger agreement, new merger agreement, absorption-type company split agreement, incorporation-typecompany split plan, share exchange agreement or transfer of shares plan.
1.
Number of share subscription rights to be issued by the Company Resulting From Reorganization:
Each holder of Outstanding Share Subscription Rights shall be issued the same number thereof.
2.
Type of shares of the Company Resulting From Reorganization underlying the share subscription rights:
Common stock of the Company Resulting From Reorganization.
3.
Number of shares of the Company Resulting From Reorganization underlying the share subscription rights:
A proposal stating the conditions for Reorganization shall include a finalized statement of the type and number ofshares underlying the above-mentioned share subscription rights.
4.
Value of property to be incorporated upon exercise of the share subscription rights:
The value of property to be incorporated upon exercise of share subscription rights that are issued shall be theamount obtained by multiplying the exercise price after reorganization prescribed below by the number of sharesof the Company Resulting From Reorganization underlying the share subscription rights that have been finalized asstated in No. 3. above. The exercise price after Reorganization shall be 1 yen per share of the Company Resulting
From Reorganization that can be issued upon exercise of each share subscription right that is issued.
5.
Period during which share subscription rights can be exercised:
The period from the later of either the first day of the period during which the share subscription rights can be
exercised as prescribed above or the day on which a Reorganization takes effect through the final day of theperiod during which the share subscription rights can be exercised as prescribed above.

— 11 —

6.

7.

8.
9.

(iii)

Matters pertaining to the increase of capital and capital reserve resulting from the issuance of shares upon
exercise of the share subscription rights:
To be determined in order to align with the conditions applicable to the share subscription rights.
Restrictions on acquisition of share subscription rights by transfer:Any acquisition of share subscription rights by transfer shall require an authorizing resolution from the Board of
Directors of the Company Resulting From Reorganization.
Terms and conditions for acquisition of share subscription rights:
To be determined in order to align with the conditions applicable to the share subscription rights.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the share subscription rights.

8th Share subscription rights C type

Resolution date

12 October 2017

Number of stock options (Shares)

5,929

Number of share subscription rights for treasury stock(Shares)—

Type of shares to be issued upon exercise of sharesubscription rights

Common Stock

Number of shares to be issued upon exercise ofshare subscription rights (Shares)

5,929

Amount to be paid upon exercise of share subscription rights
(Yen)

1

Exercise period of share subscription rights

10 November 2020

Fair value on the grant date and amount of paid-in capitalper share upon exercise of share subscription rights (Yen)

Issue price: 38,823
Paid-in capital: 19,411

Exercise conditions of share subscription rights

If a holder of share subscription rights waives the right toacquire shares, the share subscription rights shall be
forfeited and may not be exercised.

Matters pertaining to transfer of share subscription rights

Any acquisition of share subscription rights by transfer shallrequire an authorizing resolution from the Boardof Directors.

Matters pertaining to substitute payments—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization(Notes)(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of a merger (limited
to cases where the Company becomes extinct thereby), absorption-type company split or incorporation-type company
split (in each event, limited to cases where the Company is the surviving entity resulting from the company split), or
exchange or transfer of shares (in each event, limited to cases where the Company becomes a wholly-owned subsidiary),
parties holding share subscription rights in existence immediately preceding the effective date of such Reorganization(hereinafter referred to as “Outstanding Share Subscription Rights”) shall, in each applicable case, be issued sharesubscription rights for shares of the resulting company as prescribed in subparagraphs (a)-(e) of Article 236(1)viii of
the Companies Act of Japan (hereinafter referred to as the “Company Resulting From Reorganization”). In such event,
any Outstanding Share Subscription Rights shall lapse and the Company Resulting From Reorganization shall issue
new share subscription rights; provided, however, that terms and conditions stipulating that the Company Resulting
From Reorganization shall issue share subscription rights that prescribe the matters stated below are included in any
absorption merger agreement, new merger agreement, absorption-type company split agreement, incorporation-typecompany split plan, share exchange agreement or transfer of shares plan.
1.
Number of share subscription rights to be issued by the Company Resulting From Reorganization:
Each holder of Outstanding Share Subscription Rights shall be issued the same number thereof.
2.
Type of shares of the Company Resulting From Reorganization underlying the share subscription rights:
Common stock of the Company Resulting From Reorganization.
3.
Number of shares of the Company Resulting From Reorganization underlying the share subscription rights:
A proposal stating the conditions for Reorganization shall include a finalized statement of the type and number ofshares underlying the above-mentioned share subscription rights.

— 12 —

4.

5.

6.

7.

8.
9.

(3)

Value of property to be incorporated upon exercise of the share subscription rights:
The value of property to be incorporated upon exercise of share subscription rights that are issued shall be theamount obtained by multiplying the exercise price after reorganization prescribed below by the number of sharesof the Company Resulting From Reorganization underlying the share subscription rights that have been finalized asstated in No. 3. above. The exercise price after Reorganization shall be 1 yen per share of the Company Resulting
From Reorganization that can be issued upon exercise of each share subscription right that is issued.
Period during which the share subscription rights can be exercised:
The period from the later of either the day on which share subscription rights can be exercised as prescribedabove or the day on which a Reorganization takes effect.
Matters pertaining to the increase of capital and capital reserve resulting from the issuance of shares upon
exercise of the share subscription rights:
To be determined in order to align with the conditions applicable to the share subscription rights.
Restrictions on acquisition of share subscription rights by transfer:Any acquisition of share subscription rights by transfer shall require an authorizing resolution from the Board of
Directors of the Company Resulting From Reorganization.
Terms and conditions for acquisition of share subscription rights:
To be determined in order to align with the conditions applicable to the share subscription rights.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the share subscription rights.

Exercise of convertible bonds with conditional permission for adjustment of exercise priceNot applicable.

(4)

Content of Rights Plan
Not applicable.

(5)

Change in Total Number of Shares Issued, Capital Stock, Etc.

Date

Increase/
Balance of total
decrease of
number of
total number ofshares issued
shares issued(Shares)(Shares)

1 September 2017 to
30 November 2017—

Increase/decrease ofcapital stock(Millionsof yen)Balance ofcapital stock(Millionsof yen)—10,273106,073,656

Increase/
Balance of
decrease ofcapital reserve
capital reserve(Millions(Millionsof yen)of yen)—4,578(Note) There was no increase or decrease in the total number of shares issued, capital stock or capital reserve during the threemonths ended 30 November 2017.

(6)

Principal Shareholders
There are no items to state, as the accounting period under review is the first-quarter accounting period.

(7)

Voting Rights
Concerning “Voting Rights” as at the end of the first quarterly accounting period ended 30 November 2017, it has notbeen possible to confirm and state the details entered in the register of shareholders. Therefore, the stated details are
based on the register of shareholders as of the immediately preceding record date (31 August 2017).

— 13 —

(i)Shares issued
As at 30 November 2017
Number of shares(Shares)Number of voting
rights (Number)

Remarks

Non-voting shares

—

—

—

Shares subject to restrictions on voting rights(treasury stock)

—

—

—

Shares subject to restrictions on voting rights(others)———

Shares with full voting rights(treasury stock, etc.)(Shares held astreasury stock)
Common stock
4,089,600——

Shares with full voting rights (others)

Common stock
101,922,400

Class

Common stock

Shares less than one unit

61,656

Total number of shares issued

106,073,656

Total number of voting rights of allshareholders—(Notes)(ii)

1,019,224(Note) 1—(Notes) 1,2——
1,019,224—

1. The columns for the number of shares of “Shares with full voting rights (others)” and “Shares less than one unit”
include 2,700 shares and 84 shares held, respectively, in the name of Japan Securities Depository Center, Inc.
2. Common stock in the “Shares less than one unit” row includes 64 shares of treasury stock held by the Company.

Treasury StockAs at 30 November 2017

Name or trade name ofholderFAST RETAILING CO.,
LTD.
Total

2.

Holder’s address

717-1 Sayama,
Yamaguchi City,
Yamaguchi—

Number ofshares heldin own name(Shares)Number ofshares held inother’s name(Shares)

Total numberof shares held
(Shares)

Percentage of
total number ofshares issued (%)

4,089,600—

4,089,600

3.86

4,089,600—

4,089,600

3.86

Board of Directors
Since the submission of the year-end report for the preceding consolidated fiscal year, there has been no change ofdirectors during the three months ended 30 November 2017.

— 14 —

Financial Section
1. Preparation of Interim Condensed Consolidated Financial Statements
The interim condensed consolidated financial statements of the Group were prepared in compliance with International
Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”), pursuant to Article 93 of the “Rules Governing Term, Form andPreparation of Consolidated Quarterly Financial Statements” (2007 Cabinet Office Ordinance No. 64, hereinafter referred to as“Consolidated Quarterly Financial Statements Rules”).
2. Review Report
Pursuant to the first clause of Article 193-2 of the Financial Instruments and Exchange Act, the quarterly and interim condensed
consolidated financial statements of the Group for the three months ended 30 November 2017, respectively, have beenreviewed by Deloitte Touche Tohmatsu LLC.
Note that there has been a change in the auditor of the Group, and the financial statements of the Group have been audited orreviewed as follows.
—
Consolidated financial statements of the Group for the fiscal year ended 31 August 2017: Ernst & Young ShinNihon LLC(i.e., the predecessor auditor)—
Interim condensed consolidated financial statements of the Group for the first quarter ended 30 November 2017 and its
fiscal year ending: Deloitte Touche Tohmatsu LLC (i.e., the successor auditor)— 15 —

(Amounts are stated in millions of Japanese Yen and are rounded down to the nearest million unless otherwise stated)

1. Interim Condensed Consolidated Financial Statements(1)

Interim Condensed Consolidated Statement of Financial Position(Millions of yen)
Notes

ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Derivative financial assets
Income taxes receivable

As at 31 August 2017

13
6
13

Other assets
Total current assets
Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Financial assets
Investments in associates
Deferred tax assets

7

13

Other assets

As at 30 November 2017

683,80248,59830,426289,675
6,269
1,518
17,307

788,898
130,061
23,717301,150
14,6091,489
54,2481,077,598

1,314,176

136,979
15,88536,89577,60813,47325,303
4,742

139,690
15,88539,246
79,97813,341
25,376
5,364

310,888318,881

1,388,486

1,633,058

204,008
11,844
6,083
25,86427,88935,731

164,418
10,1606,878
38,275
18,640233,784

311,421472,158

Other liabilities

273,467
15,40910,00016,144

274,062
15,875
11,308
16,663

Total non-current liabilities

315,022

317,909626,443790,068

10,273
14,373
698,584(15,563)
24,102

10,27318,155759,276(15,552)
34,127

Non-controlling interests

731,770
30,272806,281
36,708

Total equity

762,043

842,990

1,388,486

1,633,058

Total non-current assets
Total assets
Liabilities and equity
LIABILITIESCurrent liabilities
Trade and other payables
Other financial liabilities
Derivative financial liabilities
Current tax liabilities
Provisions

13
13

Other liabilities
Total current liabilities
Non-current liabilities
Financial liabilities
Provisions
Deferred tax liabilities

13

Total liabilities
EQUITY
Capital stock
Capital surplus
Retained earnings
Treasury stock, at cost
Other components of equity
Equity attributable to owners of the Parent

Total liabilities and equity— 16 —

(2)Interim Condensed Consolidated Statement of Profit or Loss and Interim Condensed Consolidated Statement of Other
Comprehensive Income
Interim Condensed Consolidated Statement of Profit or Loss
Three months ended 30 November 2017
(Millions of yen)
Notes

Three months ended
30 November 2016

RevenueThree months ended
30 November 2017

528,847(258,160)

617,026(299,961)

9
10
10270,686(184,193)
2,577
(667)
188

317,065(204,226)
1,111
(221)
173

Operating profit
Finance income

11

Finance costs

11

88,591
16,390(776)

113,901
4,566
(635)

Income tax expense

104,204(30,506)

117,832(33,186)

Profit for the period

73,69884,646

69,695
4,002

78,5406,106

73,69884,646683.51682.60770.11
768.99

Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Share of profit and loss of associates

Profit before income taxes

Profit for the period attributable to:
Owners of the Parent
Non-controlling interests
Earnings per share
Basic (yen per share)
Diluted (yen per share)12
12— 17 —

Interim Condensed Consolidated Statement of Other Comprehensive Income
Three months ended 30 November 2017
(Millions of yen)Three months ended
30 November 2016
Profit for the period
Other comprehensive income, net of income
Items that will not be reclassified
subsequently to profit or loss
Items that may be reclassified
subsequently to profit or loss
Net fair value gain/(loss) on available-for-sales
financial assets during the period
Exchange differences on translating
foreign operations
Cash flow hedges

73,69884,646

—

—

47

(50)

21,182
63,120

7,143
3,775

84,35010,868158,048

95,515

Non-controlling interests

151,581
6,467

88,565
6,950

Total comprehensive income/(loss) for the year

158,048

95,515

Other comprehensive income/(loss), net of income tax
Total comprehensive income/(loss) for the period
Attributable to:
Owners of the Parent(3)

Three months ended
30 November 2017

Interim Condensed Consolidated Statement of Changes in Equity
For the three months ended 30 November 2016
(Millions of yen)
Other components of equity

EquityForeign

Note
As at 1 September 2016attributable

Treasury

Available-

currency

Cash-flow

to owners

Non-

CapitalCapitalRetainedstock,

for-saletranslation

hedge

of thecontrolling

Total

stock

surplusearnings

at costreserve

reserve

reserve

Total

Parentinterests

equity10,273

13,070613,974(15,633)

248(2,811)(44,619)(47,183)

574,501

23,159597,661——

69,695

—

—

—

—

—

69,695

4,002

73,698

—

—

—

—

47

19,982

61,85581,88581,8852,464

84,350——69,695—47

19,982

61,85581,885

151,581

6,467

158,048

—

—

—

—

—

—

—

—

—

—

—

Net changes during
the period
Comprehensive income
Profit for the period
Other comprehensive
incomeTotal comprehensive
incomeTransactions with theowners of the Parent
Acquisition oftreasury stock
Disposal oftreasury stock
Dividends
Share-based payments

8

—

117

—

15

—

—

—

—

133

—

133

—

—

(16,824)

—

—

—

—

—

(16,824)(1,231)(18,055)

—

1,049

—

—

—

—

—

—

1,049

—

1,049

—

1,167

(16,824)

15

—

—

—

—

(15,641)(1,231)(16,873)

Total transactions withthe owners of the
ParentTotal net changes during
the period
As at 30 November 2016

—

1,167

52,87115

47

19,982

61,85581,885

135,9395,236

141,175

10,273

14,237

666,845(15,617)296

17,17017,23534,702

710,441

28,395

738,836— 18 —

For the three months ended 30 November 2017
(Millions of yen)
Other components of equity

EquityForeign

Note
As at 1 September 2017attributable

Treasury

Available-

currency

Cash-flow

to owners

Non-

CapitalCapitalRetainedstock,

for-saletranslation

hedge

of thecontrolling

Total

stock

surplusearnings

at costreserve

reserve

reserve

Total

Parentinterests

equity10,273

14,373

698,584(15,563)2

21,806

2,293

24,102

731,770

30,272762,043——

78,540

—

—

—

—

—

78,5406,106

84,646

—

—

—

—

(50)

5,500

4,574

10,025

10,025843

10,868——78,540

—

(50)

5,500

4,574

10,02588,565

6,950

95,515

—

—

—

—

—

—

—

—

—

—

—

Net changes during theperiodComprehensive income
Profit for the period
Other comprehensive
incomeTotal comprehensive
incomeTransactions with theowners of the Parent
Acquisition oftreasury stock
Disposal oftreasury stock
Dividends
Share-based payments

8

—

92

—

11

—

—

—

—

103

—

103

—

—

(17,847)

—

—

—

—

—

(17,847)(2,269)(20,116)

—

1,814

—

—

—

—

—

—

1,814

—

1,814

—

1,874

—

—

—

—

—

—

1,874

1,754

3,629

—

3,782

(17,847)

11

—

—

—

—

(14,053)(514)(14,567)

Capital contributions
from non-controllinginterests
Total transactions withthe owners of the
ParentTotal net changes during
the period
As at 30 November 2017

—

3,782

60,692

11

(50)

5,500

4,574

10,02574,511

6,435

80,947

10,27318,155759,276(15,552)(47)

27,307

6,868

34,127806,281

36,708842,990— 19 —

(4)Interim Condensed Consolidated Statement of Cash Flows(Millions of yen)Three months ended
30 November 2016

Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Increase/(decrease) in provisions
Interest and dividend income
Interest expenses
Foreign exchange losses/(gains)Share of profit and loss of associates
Losses on disposal of property, plant and equipment
Decrease/(increase) in trade and other receivables
Decrease/(increase) in inventories
Increase/(decrease) in trade and other payables
Decrease/(increase) in other assets
Increase/(decrease) in other liabilities

Three months ended
30 November 2017

104,204
8,552(8,658)(542)
776(15,672)(188)
213(62,011)
4,656
63,515(9,154)22,025(835)

117,832
9,927(9,721)(1,741)635(2,824)(173)
100(80,878)(8,229)(43,619)(40,649)
199,029
258

Income taxes paid

106,882542(431)(7,107)

139,943
1,715(303)(21,299)

Net cash generated by operating activities

99,886

120,056(10,304)(2,348)

8,257(8,703)(3,216)(1,079)

11,206(7,940)(3,110)(1,490)

237
(196)
(420)
440
(65)

635
—
(265)
403
(2,480)(15,049)(5,390)

Others, net
Cash generated from operations
Interest and dividends income received
Interest paid

Cash flows used in investing activities
Amounts deposited into bank deposits
with original maturities of 3 months or longer
Amounts withdrawn from bank deposits
with original maturities of 3 months or longer
Payments for property, plant and equipment
Payments for intangible assets
Payments for lease and guarantee deposits
Proceeds from collection of lease andguarantee deposits
Investment in associates
Returns of construction assistance fundReceipts of construction assistance fund
Others, net
Net cash used in investing activities— 20 —

(Millions of yen)
NoteCash flows used in financing activities
Proceeds from short-term loans payable
Repayment of short-term loans payable
Dividends paid to owners of the Parent
Capital contributions from non-controllinginterests
Repayments of lease obligations

Three months ended
30 November 2016

Three months ended
30 November 2017

6,432
(7,664)(16,791)

1,123
(767)
(17,800)

Others, net—(1,338)
(266)

3,629
(2,384)(400)

Net cash used in financing activities(19,627)(16,600)

15,051

7,030

80,260105,096

385,431

683,802465,691

788,8988

Effect of exchange rate changes on the balanceof cash held in foreign currencies
Net increase/(decrease) in cash andcash equivalents
Cash and cash equivalents at the beginningof period
CASH AND CASH EQUIVALENTS AT THE END
OF PERIOD— 21 —

Notes to the Interim Condensed Consolidated Financial Statements
1. Reporting Entity
FAST RETAILING CO., LTD. (the “Company”) is a company incorporated in Japan. The locations of the registeredheadquarters and principal offices of the Company are disclosed on the Group’s website (http://www.fastretailing.com/eng/).
The principal activities of the Company and its consolidated subsidiaries (the “Group”) are the operations of the UNIQLO
business (casual wear retail business operating under the “UNIQLO” brand in Japan and overseas), GU business, and Theory
business (apparel design and retail business in Japan and overseas), etc.
2. Basis of Preparation
The interim condensed consolidated financial statements of the Group have been prepared in compliance with IAS
34. The Group meets all of the criteria of a “specified company” defined under Article 1-2 of the Consolidated Quarterly
Financial Statements Rules, and accordingly applies Article 93 of the Consolidated Quarterly Financial Statements Rules.
Since the interim condensed consolidated financial statements do not include all the information and disclosures requiredfor consolidated financial statements, they should be read in conjunction with the Group’s annual consolidated financial
statements for the year ended 31 August 2017.
The interim condensed consolidated financial statements were approved on 12 January 2018 by Tadashi Yanai, Chairman,
President and CEO, and Takeshi Okazaki, Group Executive Vice President and CFO.
3. Significant Accounting Policies
Except for the following standards that have been newly applied, the accounting policies presented in the consolidated
financial statements for the year ended 31 August 2017 are applied consistently in the preparation of these interim
condensed consolidated financial statements.
The Group adopted the following new and revised standards and interpretations beginning with the preparation of theinterim condensed consolidated financial statements for the three months ended 30 November 2017.
IFRS

Title

Summary of new standards and amendments

IAS 7 (Amendments)

Statement of Cash Flows

Request for disclosure of changes in liabilities related tofinancing activities

IAS12 (Amendments)

Income Taxes

Recognition of deferred tax assets for unrealized losses

The adoption of the above amendments has no material impact on the interim condensed consolidated financial
statements for the period ended 30 November 2017.
4. Use of Estimates and Judgments
The preparation of the interim condensed consolidated financial statements in accordance with IAS 34 requires
management to make judgments, estimates and assumptions that affect the application of accounting policies and thereported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The effects of the review of accounting
estimates are recognized in the accounting period in which the estimates were reviewed and in future accounting periods.
In principle, important estimates and judgments that have significant effects on the amounts recognized in the interim
condensed consolidated financial statements are the same as the preceding consolidated fiscal year.

— 22 —

5. Segment information(i) Description of reportable segments
The Group’s reportable segments are components for which discrete financial information is available and is reviewed
regularly by the Board to make decisions about the allocation of resources and to assess performance.
From the first quarter of the current consolidated fiscal year, the operations of GU, which were previously included as apart of the Global Brand segment, have been included in the GU segment (newly created segment). The Group now discloses
the GU reportable segment as a result of the Board’s increased focus as its scale of operation expands.
The Group’s main retail clothing business is divided into four reportable operating segments: UNIQLO Japan, UNIQLOInternational, GU and Global Brands, each of which is used to frame and form the Group’s strategy.
The main businesses covered by each reportable segment are as follows:
UNIQLO Japan: UNIQLO clothing business within Japan
UNIQLO International: UNIQLO clothing business outside of Japan
GU: GU brand clothing business in Japan and overseas
Global Brands: Theory, COMPTOIR DES COTONNIERS, PRINCESSE TAM.TAM and J Brand clothing operations(ii) Segment revenue and results
For the three months ended 30 November 2016
(Millions of yen)
Reportable segments
UNIQLOJapan

UNIQLOInternational

GU

GlobalBrands

Total

Others(Note 1)

Interim
Condensed
Adjustments
Consolidated(Note 2)
Statement ofProfit or Loss

Revenue

238,850

196,554

57,59035,209528,204642—

528,847

Operating profit

45,61330,167

6,837

2,744

85,36346

3,181

88,591

Segment income(profit before
income taxes)

48,15030,472

6,814

2,716

88,15346

16,005104,204(Note 1) “Others” includes the real estate leasing business, etc.
(Note 2) “Adjustments” mainly includes revenue and corporate expenses which are not allocated to individual reportablesegments.

— 23 —

For the three months ended 30 November 2017
(Millions of yen)
Reportable segments
Others(Note 1)

Total

UNIQLOJapan

UNIQLOInternational

Revenue

257,068

258,283

60,81540,052616,218808—

617,026

Operating profit

54,113

46,671

9,011

3,030

112,82633

1,041

113,901

Segment income(profit before
income taxes)

54,09946,817

8,995

3,041

112,953

33

4,845

117,832GU

GlobalBrandsInterim
Condensed
Adjustments
Consolidated(Note 2)
Statement ofProfit or Loss

(Note 1) “Others” includes the real estate leasing business, etc.
(Note 2) “Adjustments” mainly includes revenue and corporate expenses which are not allocated to individual reportablesegments.
6. Inventories
Write-down of inventories to net realizable value and recognized as expenses is as follows:(Millions of yen)Three months ended Three months ended
30 November 2016 30 November 2017
Write-down of inventories to net realizable value

3,138

2,596

7. Property, plant and equipment
The breakdown of property, plant and equipment at each reporting date is as follows:(Millions of yen)
As at
31 August 2017
Buildings and structures
Furniture, equipment and vehicles
Land
Construction in progress
Lease assets
Total

As at
30 November 2017

96,77813,757
1,927
6,824
17,690100,997
14,804
1,927
3,044
18,915

136,979

139,690

8. Dividends
The total amount of dividends paid was as follows:
Dividends paid during the three months ended 30 November 2016
Total dividends(Millions of yen)

Resolution
Meeting of the Board of Directors on 4 November 2016

16,824

Dividends per share
(Yen)
165

Dividends for which the declared date is 31 August 2016 are paid on or after 11 November 2016 as the effective date.
Dividends paid during the three months ended 30 November 2017
Total dividends(Millions of yen)

Resolution
Meeting of the Board of Directors on 2 November 2017

17,847

Dividends per share
(Yen)
175

Dividends for which the declared date is 31 August 2017 are paid on or after 10 November 2017 as the effective date.

— 24 —

9. Selling, general and administrative expenses
The breakdown of selling, general and administrative expenses for each reporting period is as follows:(Millions of yen)Three months ended Three months ended
30 November 2016 30 November 2017
Selling, general and administrative expenses
Advertising and promotion
Rental expenses
Depreciation and amortization
Outsourcing
Salaries
Others

22,00844,854
8,552
7,339
60,162
41,27521,36451,053
9,927
9,198
69,91342,768

Total

184,193204,226

10. Other income and other expenses
The breakdown of other income and other expenses for each reporting period is as follows:(Millions of yen)Three months ended Three months ended
30 November 2016 30 November 2017
Other income
Foreign exchange gains*
Others
Total

2,156
420

845
265

2,577

1,111

* Currency adjustments incurred in the course of operating transactions are included in “other income”.
(Millions of yen)Three months ended Three months ended
30 November 2016 30 November 2017
Other expenses
Loss on retirement of property, plant and equipment
Others
Total

213
453

100
121

667

221

11. Finance income and finance costs
The breakdown of finance income and finance costs for each reporting period is as follows:(Millions of yen)Three months ended Three months ended
30 November 2016 30 November 2017
Finance income
Foreign exchange gains*
Interest income

15,672542

Others
Total

175

0

16,390

4,566* Currency adjustments incurred in the course of non-operating transactions are included in “finance income”.

— 25 —

2,824
1,741

(Millions of yen)Three months ended Three months ended
30 November 2016 30 November 2017
Finance costs
Interest expenses
Total

776

635

776

635

12. Earnings per share
Three months ended 30 November 2016
Equity per share attributable to ownersof the Parent (Yen)
Basic earnings per share for the period (Yen)
Diluted earnings per share for the period (Yen)Three months ended 30 November 2017
6,967.28
683.51682.60Equity per share attributable to ownersof the Parent (Yen)
Basic earnings per share for the period (Yen)
Diluted earnings per share for the period (Yen)

7,905.74
770.11
768.99(Note) The basis for calculation of basic earnings per share and diluted earnings per share for the period is as follows:
Three months ended Three months ended
30 November 2016 30 November 2017
Basic earnings per share for the period
Profit for the period attributable to owners of the Parent (Millions of yen)
Profit not attributable to common shareholders (Millions of yen)
Profit attributable to common shareholders (Millions of yen)
Average number of common stock outstanding during the period (Shares)
Diluted earnings per share for the period
Adjustment to profit (Millions of yen)
Increase in number of common stock (Shares)(share subscription rights)

69,695—69,695
101,966,443

78,540—78,540101,985,476—
136,413(136,413)—
148,315(148,315)

13. Fair value of financial instruments
The information about the carrying amount and fair value of financial instruments is as follows:(Millions of yen)
As at 31 August 2017
Carrying amounts

Fair value

As at 30 November 2017
Carrying amounts

Fair value

Long-term borrowings (Note)
Corporate bonds
Lease obligations (Note)

12,146
249,583
19,023

12,253
253,504
19,131

12,327
249,608
19,72912,433
253,353
19,504

Total

280,753284,889

281,665

285,291(Note) The above includes the outstanding balance of borrowings due within 1 year.
The fair value of short-term financial assets, short-term financial liabilities and long-term financial assets are measured byamortized cost and approximate their carrying amounts.
The fair value of corporate bonds is measured with reference to market price.
The fair value of long-term borrowings and lease obligations are classified by term, and are calculated on the basis of thecurrent value applying a discount rate that takes into account the time remaining to maturity and credit risk.
Available-for-sale financial assets whose fair value cannot be measured reliably are carried at cost.

— 26 —

The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments. All assets
and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value
hierarchy based on the following characteristics:
Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement
is observable, either directly or indirectly
Level 3 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable① The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments:(Millions of yen)
As at 31 August 2017

Level 1

Level 2

Level 3

Total

Available-for-sale financial assets
Financial instruments at fair value throughprofit or loss (“FVTPL”)
Foreign currency forward contracts designatedas hedging instruments

16

—

—

16

—

(86)

—

(86)

—

273

—

273

Total

16

186

—

201
(Millions of yen)

As at 30 November 2017

Level 1

Level 2

Level 3

Total

Available-for-sale financial assets
Financial instruments at FVTPL
Foreign currency forward contracts designatedas hedging instruments

2,118
—

—
(11)

—
—

2,118
(11)

—

7,742

—

7,742

Total

2,118

7,730

—

9,849

For the valuation of Level 2 derivative financial instruments for which a market value is available, we use a valuation
model that uses observable data on the measurement date as indicators such as interest rates, yield curves, currency rates
and volatility in comparable instruments.
The Company did not have any transfers between levels of fair value measurements during the year ended 30 August
2017 and first quarter ended 30 November 2017, respectively.
② The financial instruments measured at amortized cost
The fair value measurements for corporate bonds, long-term borrowings and lease obligations are classified as Level 2.
14. Commitments
The Group had the following commitments at each reporting date:(Millions of yen)
As at
31 August 2017
Commitment for acquisition of property, plant and equipment
Commitment for acquisition of intangible assets
Total
15. Subsequent Events
Not applicable.

— 27 —

As at
30 November 201717,347
11,11015,885
5,393

28,457

21,278

2. Others
Dividends
The Company resolved to pay dividends from retained earnings at the meeting of the Board of Directors convened on 2
November 2017.
The total amount of dividends paid and amount per share are stated under “Financial section 1. Interim Condensed
Consolidated Financial Statements, Notes to the Interim Condensed Consolidated Financial Statements 8. Dividends”.

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(TRANSLATION)
INDEPENDENT ACCOUNTANT’S REVIEW REPORT
January 12, 2018
To the Board of Directors of FAST RETAILING CO., LTD.
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant
Koichi Okubo
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant
Hirofumi Otani
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant
Emiko Minowa
Pursuant to the first paragraph of Article 193-2 of the Financial Instruments and Exchange Act, we have reviewed the interim
condensed consolidated financial statements included in the Financial Section, namely, the interim condensed consolidated
statement of financial position of FAST RETAILING CO., LTD. (the “Company”) and its consolidated subsidiaries (collectively,
the “Group”) as of 30 November 2017 and the related interim condensed consolidated statements of profit or loss, othercomprehensive income, changes in equity and cash flows for the three-month period then ended, and the related notes to theinterim condensed consolidated financial statements.
Management’s Responsibility for the Interim Condensed Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these interim condensed consolidated financial
statements in conformity with International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”), pursuant to
Article 93 of the “Rules Governing Term, Form and Preparation of Consolidated Quarterly Financial Statements”, and for suchinternal control as management determines is necessary to enable the preparation of interim condensed consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
Accountant’s responsibility
Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on ourreview. We conducted our review in accordance with quarterly review standards generally accepted in Japan. A review consists
principally of making inquiries, primarily of management and persons responsible for financial and accounting matters, andapplying analytical procedures and other quarterly review procedures. A review is substantially less in scope than an audit
conducted in accordance with auditing standards generally accepted in Japan. We believe that we have obtained the evidence
to provide a basis for our conclusion.
Accountant’s Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim condensed consolidated
financial statements referred to above do not present fairly, in all material respects, the condensed consolidated financial
position of the Company and its consolidated subsidiaries as of 30 November 2017, and the condensed consolidated results of
their operations and their cash flows for the three-month period then ended in conformity with IAS 34.
Other information
Consolidated financial statements of the Group for the fiscal year ended 31 August 2017 and interim condensed consolidated
financial statements for the three-month period ended 30 November 2016 were audited and reviewed respectively, by thepredecessor auditor. The predecessor auditor had issued an unqualified conclusion on the independent accountant’s review
report dated 13 January 2017 and an unqualified opinion on the independent auditor’s report dated 30 November 2017,
respectively.
Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure is required under theprovisions of the Certified Public Accountants Act.

The above represents a translation, for convenience only, of the original report issued in the Japanese language.
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