FAST RETAILING CO., LTD.
迅銷有限公司Third Quarterly Report 2016/17
2017.3.1–2017.5.31
Stock Code: 6288

Contents
Corporate Profile

2

Financial Highlights

3Management Discussion and Analysis

5

Information about the Reporting Entity

9

Financial Section

11

Interim Condensed Consolidated Statement of
Financial Position

12

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

13Interim Condensed Consolidated Statement of
Changes in Equity

17

Interim Condensed Consolidated Statement of Cash Flows

19

Notes to the Interim Condensed Consolidated
Financial Statements

21

Others30

Report on Review of Interim Condensed Consolidated
Financial Statements

31

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 Directors
Principal Place of Business in Hong Kong

Mr. Toru Murayama (External Director)
Mr. Takashi Nawa (External Director)

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 Director)
Mr. Nobumichi Hattori (External Director)
Mr. Masaaki Shintaku (External Director)

HDR Registrar and HDR Transfer Office
Statutory Auditors

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

Mr. Akira Tanaka (Kansayaku) (Standing Statutory Auditor)
Mr. Masaaki Shinjo (Kansayaku) (Standing Statutory Auditor)
Mr. Takaharu Yasumoto (Shagai Kansayaku)(External Statutory Auditor)
Mr. Akira Watanabe (Shagai Kansayaku)(External Statutory Auditor)
Ms. Keiko Kaneko (Shagai Kansayaku)(External Statutory Auditor)

Stock CodeHong Kong: 6288
Japan: 9983

Joint Company Secretaries
Website Address

Japan: Mr. Mitsuru Ohki
Hong Kong: Ms. Choy Yee Man

http://www.fastretailing.com

Auditors
Ernst & Young ShinNihon LLC

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

Term

Third Quarterof
55th Year

Third Quarterof
56th Year

55th Year

Accounting period

Nine months
ended
31 May2016

Nine months
ended
31 May2017

Year ended
31 August2016

1,434,616

1,477,958

1,786,473

Operating profit (Millions of yen)

Revenue (Millions of yen)

145,829

180,618

127,292

Profit before income taxes (Millions of yen)

122,095

195,477

90,237

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

71,010120,11348,052Comprehensive income/(loss) attributable to ownersof the parent (Millions of yen)

(46,897)

190,419(141,345)

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

668,850

731,618

574,501

1,272,753

1,401,900

1,238,119

Basic earnings per share for the period (year) (Yen)

696.501,177.89

471.31

Diluted earnings per share for the period (year) (Yen)695.54

1,176.18

470.69

52.6

52.2

46.4

Total assets (Millions of yen)

Ratio of equity attributable to owners of
the parent to total assets (%)
Net cash from operating activities (Millions of yen)

132,463

241,196

98,755

Net cash used in investing activities (Millions of yen)

(218,979)(25,623)(245,939)

Net cash from/(used in) financing activities (Millions of yen)

203,256(46,433)

201,428

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

453,927

567,446

385,431

Three months
ended
31 May2016

Three months
ended
31 May2017422,962

460,449

Accounting period

Revenue (Millions of yen)
Profit/(loss) attributable to owners of the parent (Millions of yen)

23,96722,879Basic earnings/(loss) per share for the period (Yen)

235.07224.35(Notes)1. The Company has prepared interim condensed consolidated financial statements, and therefore has not included
information regarding changes in key management indices for the submitting 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 business engaged in by the Group (the Company and its subsidiaries) during
the nine months ended 31 May 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 nine months ended 31 May 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 nine months of fiscal 2017 from 1
September 2016 to 31 May 2017, with consolidated revenue totaling ¥1,477.9 billion (+3.0% year-on-year), and operating
profit reaching ¥180.6 billion (+23.9% year-on-year). The consolidated gross profit margin improved 0.7 point yearon-year, and the selling, general and administrative expense ratio improved by 0.7 point as we scaled up cost-cutting
efforts from the previous year. Under finance income, we recorded a foreign exchange gain of ¥13.3 billion after the
spot foreign exchange rate at the end of May closed below the spot rate at the start of the business term, increasing thecarrying amount of our long-term foreign-currency denominated assets in yen terms. This resulted in significant gains inconsolidated profit, with profit before income taxes rising to ¥195.4 billion (+60.1% year-on-year), and profit attributableto owners of the parent expanding to ¥120.1 billion (+69.1% year-on-year). Breaking these results down by businesssegment: UNIQLO International generated increases in both revenue and profit, while both UNIQLO Japan and Global
Brands reported higher revenue but lower profits.
The Group also reported an increase in revenue and profit in the three-month period from 1 March 2017 to 31 May
2017, with a strong performance from UNIQLO International contributing significantly to the 8.9% year-on-year rise inthird-quarter revenue and the 7.5% year-on-year gain in operating profit. Provisioned an additional ¥6.5 billion in thethird quarter for tax expenses on potential future dividends after changing our dividend policy on dividend receipts frominternational subsidiary companies. As a result, profit attributable to owners of the parent declined by 4.5% year-on-year
over the same period.
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 low-priced GU casual fashion brand. We continue toincrease UNIQLO store numbers in each country where we operate, and open global flagship stores and large-format
stores in major cities around the world to help consolidate UNIQLO’s position as a key global brand. In addition, we are
expanding our GU operation, which has grown into a second pillar brand for the Group alongside UNIQLO, by accelerating
GU store openings in Japan and aggressively promoting new store development in international markets. GU alreadyhas stores in Shanghai and Taiwan, and the first GU stores opened in Hong Kong in March 2017 proved a great success.
In February 2017, we launched the UNIQLO CITY TOKYO Ariake Office as part of our strategy to revolutionize all supply
chain processes from planning and design through raw materials procurement, manufacturing, logistics and retail, and totransform ourselves into a new digital consumer retailing company. We have also focused on making our online shopping
experience more convenient for customers by marking the March 2017 launch of our new mobile shopping site with abroader of online sizes, exclusive online items and semi-order-made products, and the option to pick up online purchases
at a local convenience store or UNIQLO store in japan.
UNIQLO Japan
UNIQLO Japan reported a rise in revenue but a contraction in profit in the nine months to May 2017. Revenue rose 1.2%
year-on-year to ¥653.4 billion while operating profit dipped 0.6% year-on-year to ¥92.6 billion. In the three months
from March to May, same-store sales, including online sales, increased 2.7% year-on-year, thanks to strong sales ofnewsworthy items such as wireless bras, easy ankle pants and Dry Stretch Kando Pants, and successful sales strategies
over Golden Week, Mother’s Day and the UNIQLO anniversary celebration. Meanwhile, e-commerce sales increased
17.3% in the third quarter to constitute 6.2% of total sales. Operating profit declined in the third quarter, but this wasdue to factors such as the inflammatory impact of weaker internal yen exchange rates on cost of sales, as well as higher
distribution, personnel and other business expenses.

—5—

UNIQLO International
UNIQLO International generated rises in both revenue and profit in the nine months to May 2017, with revenue
expanding by 5.4% year-on-year to ¥561.5 billion and operating profit rising by a significant 61.3% year-on-year to ¥68.1
billion. In the third quarter from March to May, UNIQLO Southeast Asia and Oceania and UNIQLO South Korea performed
extremely well to report a doubling in operating profit. In Southeast Asia and Oceania, UT T-shirts, sports goods suchas DRY-EX polo shirts, new women’s blouses and dresses, Dry Stretch Kando Pants, and clothes designed to suit theSoutheast Asian climate and culture sold especially well. Our efforts to overhaul business management in South Korea
also paid off, generating a rebound in same-store sales, an improvement in the gross profit margin, and a reduction inbusiness expenses. Profits continued to expand at UNIQLO Greater China thanks to successful sales campaigns timed to
draw in customers over May Day and other public holidays, and strong sales of UT T-shirts, polo shirts and other core
Summer ranges. UNIQLO USA reported a lower operating loss in the third quarter after same-store sales recovered
and business cost ratios improved under the new operational structure. In Europe, leading investment in 10 new store
openings over three months inflated costs and knocked operating profit slightly lower. Overall, the UNIQLO International
network increased by 143 to 1,071 stores at the end of May 2017.
Global Brands
In the nine months to May 2017, revenue from the Global Brands segment rose 2.6% year-on-year to ¥260.9 billion, while
operating profit contracted by 17.0% year-on-year to ¥19.1 billion.
GU revenue rose but profit and same-store sales declined over the three months from March to May 2017. While thepalazzo pants and fashion-conscious design blouses featured in our advertising campaigns sold well, they didn’t proveas much of a hit as initially anticipated. Furthermore, we didn’t produce sufficient volumes of latest fashion trend items,
resulting in shortages in some products and lost sales opportunities. The gross profit margin was also hit by discounting ofexcess inventory, and rising cost of sales in the wake of recent yen weakness.
Looking at other labels in the Global Brands segment, our Theory fashion brand reported significant rises in both revenue
and profit in the third quarter. Theory’s PLST label reported an especially strong rise in customer visits following thebrand’s decision to expand its product range into casual office clothing, and expand its client base through extensive
digital marketing.
While same-store sales at our France-based Comptoir des Cotonniers brand continued to decline, determined cost-cutting
helped reduce operating losses. Finally, our France-based Princesse tam.tam and US-based J Brand premium denim label
reported further losses in line with previous year levels.
Sustainability
As the Fast Retailing Group’s business expands worldwide, we are committed to conducting our business activities
in consideration of the environment and society. Our sustainability initiatives consist of four priority areas: supply
chain, products, stores and the community, and our employees. Across these areas, we seek to ensure transparency,
accountability, and disclose information in a timely and appropriate manner. Through our business, we are making efforts
to contribute to sustainable development.
We believe that awareness of sustainability among our employees is vital. Therefore, we have been conducting e-learning
programs for all of our more than 100,000 employees since April.
As refugee issues around the world grows increasingly serious, the Fast Retailing Group, as a global partner of the United
Nations High Commissioner for Refugees (UNHCR), has been working to support refugees through the distribution ofclothing, various self-reliance programs, and the employment of refugees. We have expanded our refugee employment
program, which began in Japan in 2011 and has also expanded to Germany and the United Kingdom. We now employ 45
refugees, and our target is 100. In cooperation with various refugee support organizations, we are also concentrating ourefforts on increasing the number of refugee employees and support programs for them.
Since 2016 the Fast Retailing Group has been providing support for UNHCR refugee self-reliance programs, committing a
total of $5.5 million over a three-year period. This program provides education and employment opportunities to enablerefugees to find work and lead autonomous lives. At present, this program is operating in four countries.

—6—

The Fast Retailing Group intends to integrate sustainability in its management strategy and will formulate a medium-termplan by August this year.
(2)(i)

Financial Positions and Cash Flows Information
Financial Positions
Total assets as at 31 May 2017 were ¥1,401.9 billion, which was an increase of ¥163.7 billion relative to the end of thepreceding consolidated fiscal year. The principal factors were an increase of ¥182.0 billion in cash and cash equivalents,
an increase of ¥33.0 billion in trade and other receivables, a decrease of ¥40.8 billion in inventories and a decrease of¥23.5 billion in deferred tax assets.
Total liabilities as at 31 May 2017 were ¥640.5 billion, which was an increase of ¥0.08 billion relative to the end of thepreceding consolidated fiscal year. The principal factors were an increase of ¥21.2 billion in trade and other payables,
a decrease of ¥68.5 billion in derivative financial liabilities, an increase of ¥31.8 billion in income taxes payable and anincrease of ¥10.3 billion in other current liabilities.
Total net assets as at 31 May 2017 were ¥761.3 billion, which was an increase of ¥163.6 billion relative to the end of
the preceding consolidated fiscal year. The principal factor was an increase of ¥85.4 billion in retained earnings and anincrease of ¥70.3 billion in other components of equity.

(ii)

Cash Flows Information
Cash and cash equivalents as at 31 May 2017 had increased by ¥113.5 billion from the nine months ended 31 May 2016,
to ¥567.4 billion.
Net cash from operating activities for the nine months ended 31 May 2017 was ¥241.1 billion, which was an increase of¥108.7 billion (+82.1 % year-on-year) from the nine months ended 31 May 2016. The principal factors were ¥195.4 billion
in profit before income taxes (an increase of ¥73.3 billion from the nine months ended 31 May 2016), ¥13.3 billion inforeign exchange gains (an increase of ¥36.7 billion from the nine months ended 31 May 2016), ¥50.4 billion decrease ininventories (an increase of ¥19.6 billion from the nine months ended 31 May 2016) and ¥30.9 billion in Income taxes paid(a decrease of ¥37.3 billion from the nine months ended 31 May 2016).
Net cash used in investing activities for the nine months ended 31 May 2017 was ¥25.6 billion, which was a decrease of¥193.3 billion (-88.3 % year-on-year) from the nine months ended 31 May 2016. The principal factor was a decrease of¥7.3 billion in bank deposits with maturity over 3 months (a decrease of ¥189.6 billion from the nine months ended 31
May 2016).
Net cash used in financing activities for the nine months ended 31 May 2017 was ¥46.4 billion, which was an increase of¥249.6 billion from the nine months ended 31 May 2016. The principal factor was the proceeds of ¥249.3 billion arisingfrom issuance of corporate bonds during the nine months ended 31 May 2016.

—7—

(4)

Operational and Financial Assignment
There have been no important changes during the nine months ended 31 May 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 nine months ended 31 May 2017.
<Subsidiaries in Japan>
Not applicable.
<Overseas Subsidiaries>
Company name

Type of facility

Name of business

Location

Completion date

UNIQLO CANADA INC.

UNIQLOInternational Stores

UNIQLO Toronto
Eaton Centre

Toronto, Ontario,
CanadaSeptember 2016

UNIQLO CANADA INC.

UNIQLOInternational Stores

UNIQLO Yorkdale
Shopping Centre

Toronto, Ontario,
CanadaOctober 2016

UNIQLO SINGAPORE PTE. LTD

UNIQLOInternational Stores

Orchard Central

Singapore

September 2016—8—

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

Total number of shares
Type

Total number of authorised 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 31 May 2017

Number of shares issued
as of submission date
(Shares)(As at 14 July 2017)

Name of financial
instrument exchangeof listing, or authorised
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
Not applicable.

(3)

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 March 2017 to
31 May 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 31 May 2017.

(6)

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

—9—

(7)

Voting Rights
Concerning “Voting Rights” as at the end of the third quarterly accounting period ended 31 May 2017, it has not beenpossible to confirm and state the details entered in the register of shareholders. Therefore, the stated details are basedon the register of shareholders as of the immediately preceding record date (28 February 2017).

(i)

Shares issued
As at 31 May 2017
Number of shares(Shares)Number of voting
rights (Number)

Remarks

Non-voting shares

—

—

—

Shares subject to restrictions on voting rights(treasury stock)

—

—

—

—

—

—

Shares with full voting rights(treasury stock, etc.)(Shares held astreasury stock)
Common stock
4,095,800——

Shares with full voting rights (others)

Common stock
101,920,200

Class

Shares subject to restrictions on voting rights(others)

Common stock

Shares less than one unit

57,656

Total number of shares issued

106,073,656

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

1,019,202(Note) 1—(Notes) 1,2——
1,019,202—

1. The columns for the number of shares of “Shares with full voting rights (others)” and “Shares less than one unit”
respectively include 2,700 shares and 84 shares held in the name of Japan Securities Depository Center, Inc.
2. Common stock in the “Shares less than one unit” row includes 35 shares of treasury stock held by the Company.

Treasury StockAs at 31 May 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 (%)

4,095,800—

4,095,800

3.86

4,095,800—

4,095,800

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 nine months ended 31 May 2017.

— 10 —

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 Certification
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 and nine months ended 31 May 2017, respectively, arereviewed by Ernst & Young ShinNihon LLC.

— 11 —

(Amounts 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 current financial assets
Inventories
Derivative financial assets
Income taxes receivable

As at 31 August 2016

13
6
13

OthersTotal current assets
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Non-current financial assets
Investments in associates
Deferred tax assets

7

13

Others

As at 31 May 2017

385,43145,178184,239
270,004569
21,626
17,534567,446
78,196
194,787
229,140
8,671
1,305
15,609924,583

1,095,157

121,853
17,90834,20577,553
13,132
44,428
4,453

131,324
18,06039,70078,09813,36020,925
5,272

313,535

306,742

1,238,119

1,401,900

189,501
72,388
12,581
9,602
22,284
31,689210,717
3,797
13,28341,491
14,68842,037

338,046

326,016

Others274,090
10,645
3,809
13,865

274,754
11,912
11,537
16,325

Total non-current liabilities

302,411314,530

640,458

640,546

10,273
13,070613,974(15,633)(47,183)

10,273
14,380699,417(15,575)
23,122

Non-controlling interests

574,501
23,159731,618
29,734

Total equity

597,661

761,353

1,238,119

1,401,900

Total non-current assets
Total assets
Liabilities and equity
LIABILITIESCurrent liabilities
Trade and other payables
Derivative financial liabilities
Other current financial liabilities
Income taxes payable
Provisions

13
13

OthersTotal current liabilities
Non-current liabilities
Non-current 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— 12 —

(2)Interim Condensed Consolidated Statement of Profit or Loss and Interim Condensed Consolidated Statement ofComprehensive Income
Interim Condensed Consolidated Statement of Profit or Loss
Nine months ended 31 May 2017
(Millions of yen)
Notes

Nine months ended
31 May 2016

Revenue

Nine months ended
31 May 2017

1,434,616(740,240)

1,477,958(752,538)

694,375(540,479)
1,877(9,943)

725,419(546,162)
4,787(3,426)

145,829
1,389(25,124)

180,618
17,094(2,235)

Income taxes

122,095(45,400)

195,477(66,904)

Profit for the period

76,694

128,573

Non-controlling interests

71,0105,684

120,113
8,460

Profit for the period

76,694

128,573696.50695.54

1,177.89
1,176.18

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

910

Other expenses

10

Operating profit
Finance income

11

Finance costs

11

Profit before income taxes

Attributable to:
Owners of the parent

Earnings per share
Basic (Yen)
Diluted (Yen)1212— 13 —

Three months ended 31 May 2017
(Millions of yen)
Notes

Three months ended
31 May 2016

RevenueThree months ended
31 May 2017

422,962(205,523)

460,449(229,240)

217,439(169,749)
955(2,157)231,209(180,675)
1,181(1,754)46,488416(6,850)49,960645(2,739)

Income taxes

40,054(14,794)

47,866(22,707)

Profit for the period

25,25925,159Non-controlling interests

23,967
1,292

22,8792,279

Profit for the period

25,25925,159235.07234.74224.35224.02

Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating profit
Finance income
Finance costs
Profit before income taxes

Attributable to:
Owners of the parent

Earnings per share
Basic (Yen)
Diluted (Yen)1212— 14 —

Interim Condensed Consolidated Statement of Comprehensive Income
Nine months ended 31 May 2017
(Millions of yen)
Nine months ended
31 May 2016
Profit for the period
Other comprehensive income
Other comprehensive income that will not bereclassified to profit or loss
Other comprehensive income to be reclassified to
profit or loss in subsequent periods
Net profit/(loss) on revaluation ofavailable-for-sale investments
Exchange differences on translation offoreign operations

Nine months ended
31 May 2017

76,694

128,573

―

―

33

(44)

(22,170)(98,322)

22,087
49,840

Other comprehensive income/(loss), net of taxes(120,459)

71,883

Total comprehensive income/(loss) for the period(43,765)

200,457

Non-controlling interests(46,897)
3,131

190,419
10,038

Total comprehensive income/(loss) for the period(43,765)

200,457

Cash flow hedges

Attributable to:
Owners of the parent— 15 —

Three months ended 31 May 2017
(Millions of yen)Three months ended
31 May 2016
Profit for the period
Other comprehensive income
Other comprehensive income that will not bereclassified to profit or loss
Other comprehensive income to be reclassified to
profit or loss in subsequent periods
Net profit/(loss) on revaluation ofavailable-for-sale investments
Exchange differences on translation offoreign operations

Three months ended
31 May 201725,25925,159

―

―

72

(23)

(3,828)(18,018)(2,733)(8,165)

Other comprehensive income/(loss), net of taxes(21,774)(10,922)

Total comprehensive income/(loss) for the period

3,484

14,236

Non-controlling interests

1,873
1,611

12,616
1,619

Total comprehensive income/(loss) for the period

3,484

14,236

Cash flow hedges

Attributable to:
Owners of the parent— 16 —

(3)Interim Condensed Consolidated Statement of Changes in Equity
For nine months ended 31 May 2016
(Millions of yen)
Other components of equity

Note
As at 1 September 2015
Net changes during
the period
Comprehensive income
Profit for the period
Other comprehensive
incomeTotal comprehensive
incomeTransactions with theownersAcquisition oftreasury stock
Disposal oftreasury stock
Dividends
Share-based payments
OthersTotal transactions withthe owners
Total net changes
during the period
As at 31 May 2016

8

Treasury Availablestock,for-saleat costreserve(15,699)
143

Foreigncurrencytranslation
reserve
37,851

Cash-flow
hedge
reserve
104,219

Equityattributableto owners
Nonof the controlling
Totalparentinterests Total equity
142,214750,937
23,867
774,804

Capitalstock
10,273

Capitalsurplus11,524Retainedearnings
602,623——

71,010

—

—

—

—

—

71,0105,684

76,694

—

—

—

—

33

(20,000)(97,939)(117,907)(117,907)(2,552)(120,459)——

71,010—33(20,000)(97,939)(117,907)(46,897)3,131(43,765)

—

—

—

(4)

—

—

—

—

(4)

—

(4)

—
—
—
—

442
—
963
53

—
(36,702)
—
—

57
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

500
(36,702)963
53—(2,857)—587

500(39,560)
963
641

—

1,460

(36,702)

52

—

—

—

—

(35,189)(2,269)(37,459)—
10,273

1,460
12,98434,307
636,93152(15,646)

33
176(20,000)
17,850(97,939)
6,279(117,907)
24,306(82,086)
668,850862
24,729(81,224)
693,580— 17 —

For nine months ended 31 May 2017
(Millions of yen)
Other components of equity

Note
As at 1 September 2016
Net changes during
the period
Comprehensive income
Profit for the period
Other comprehensive
incomeTotal comprehensive
incomeTransactions with theownersAcquisition oftreasury stock
Disposal oftreasury stock
Dividends
Share-based payments
Total transactions withthe owners
Total net changes
during the period
As at 31 May 2017

8

Treasury Availablestock,for-saleat costreserve(15,633)
248

Foreigncurrency Cash-flowtranslation
hedge
reserve
reserve(2,811)(44,619)

Equityattributableto owners
Nonof the controlling
Totalparentinterests Total equity(47,183)
574,501
23,159597,661

Capitalstock
10,273

Capitalsurplus13,070Retainedearnings
613,974——

120,113

—

—

—

—

—

120,1138,460

128,573

—

—

—

—

(44)

20,62649,72470,30570,305

1,577

71,883——

120,113—(44)

20,62649,72470,305

190,419

10,038200,457

—

—

—

(6)

—

—

—

—

(6)

—

(6)

—
—
—

542
—
768

—
(34,670)
—

63
—
—

—
—
—

—
—
—

—
—
—

—
—
—

605
(34,670)768—(3,462)—

605(38,132)
768

—

1,310

(34,670)

57

—

—

—

—

(33,302)(3,462)(36,764)—
10,273

1,310
14,38085,442
699,41757(15,575)(44)
203

20,626
17,81449,724
5,104

70,30523,122

157,116
731,618

6,575
29,734

163,692
761,353— 18 —

(4)Interim Condensed Consolidated Statement of Cash Flows(Millions of yen)
Nine months ended
31 May 2016

Profit before income taxes
Depreciation and amortization
Increase/(decrease) in allowance for doubtful accounts
Increase/(decrease) in other provisions
Interest and dividend income
Interest expenses
Foreign exchange losses/(gains)Share of losses/(profits) of associates
Losses on retirement 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

Nine months ended
31 May 2017

122,095
27,78029(8,656)(1,389)1,677
23,446—783(31,474)
30,782
12,096(2,899)10,274(2,008)

195,477
27,539(38)(8,652)(3,518)2,235(13,331)
(512)
1,328
(31,379)
50,47018,515(4,873)
15,715783

182,537
1,389(1,134)(68,292)
17,963249,760
3,518(1,935)(30,987)
20,840132,463

241,196

Others, net(182,374)(26,982)
1,003(6,818)(6,716)
3,718—(1,186)
1,467(1,089)7,323(24,291)
39(9,193)(2,631)
1,619
(196)
(922)
1,292
1,335

Net cash used in investing activities(218,979)(25,623)

Others, net
SubtotalInterest and dividend income received
Interest paid
Income taxes paid
Income taxes refund
Net cash from operating activities
Decrease/(increase) in bank deposits
with maturity over 3 months
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible assets
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Investments in associates
Increase in construction assistance fund receivables
Decrease in construction assistance fund receivables— 19 —

(Millions of yen)Note
Net increase/(decrease) in short-termloans payable
Repayment of long-term loans payable
Proceeds from issuance of corporate bonds
Cash dividends paid
Cash dividends paid to non-controlling interests
Repayments of lease obligations

Nine months ended
31 May 2016

Nine months ended
31 May 2017

Others, net(1,287)(2,940)249,369(36,673)(2,857)(3,482)
1,128(2,740)(1,222)—(34,637)(3,629)(4,069)(133)

Net cash from/(used in) financing activities

203,256(46,433)(18,025)

12,876

Cash and cash equivalents at beginning of period

98,715355,212

182,015
385,431

CASH AND CASH EQUIVALENTS AT END OF PERIOD

453,927

567,4468

Effect of exchange rate changes on cash andcash equivalents
Net increase in cash andcash equivalents— 20 —

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 UNIQLO business (casual
wear retail business operating under the “UNIQLO” brand in Japan and overseas) and GU business, Theory business (appareldesigning 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
International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”). The Group meets all criteria of a “specified
company” defined under Article 1-2 of the Rules Governing Term, Form, and Preparation of Consolidated Quarterly Financial
Statements, and accordingly applies Article 93 of the Rules Governing Term, Form, and Preparation of Consolidated
Quarterly Financial Statements. Since the interim condensed consolidated financial statements do not include all theinformation and disclosures required for consolidated financial statements, they should be read in conjunction with theGroup’s annual consolidated financial statements for the year ended 31 August 2016.
The interim condensed consolidated financial statements were approved on 14 July 2017 by Tadashi Yanai, Chairman,
President and CEO, and Takeshi Okazaki, Group Executive Vice President and CFO.

— 21 —

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 2016 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 nine months ended 31 May 2017.
IFRS

Title

Summary of new standards and amendments

IAS 1 (Amendments)

Amendments to IAS 1
Presentation of Financial
Statements

Clarification of methods of presentation of financial
statements and disclosures

IAS16 (Amendments)

Amendments to IAS 16 Property,
Plant and Equipment

Clarification of acceptable methods of depreciation andamortization

IAS 28 (Amendments)

Amendments to IAS 28
Investments in Associates andJoint Ventures

Clarification of items requested regarding accounting
treatment of investment entities

IAS 34 (Amendments)

Amendments to IAS 34
Interim Financial Reporting

Clarifying the handling of information required by IAS 34,
when given in the “Other” section of the financial reports
for the term

IAS 38 (Amendments)

Amendments to IAS 38
Intangible Assets

Clarification of acceptable methods of depreciation andamortization

IFRS 5 (Amendments)

Amendments to IFRS 5
Non-current Assets Held for Saleand Discontinued Operations

Clarification of accounting treatment of non-current assets,
when the categorization requirements regarding “holding
for purpose of allocation to owner” are no longer met, or
when the category is changed from “holding for purpose ofsale” to “holding for purpose of allocation to owner”

IFRS 7 (Amendments)

Amendments to IFRS 7
Financial Instruments: Disclosures

Clarification of standards for determination of continuing
involvement in financial assets to be transferred
Clarification of scope of applicable range for offsetting
financial assets and financial liabilities in financial reports

IFRS 10 (Amendments)

Amendments to IFRS 10
Consolidated Financial Statements

Clarification of items requested regarding accounting
treatment of investment entities

IFRS 12 (Amendments)

Amendments to IFRS 12— Disclosures of interests inother entities

Sets out the disclosure requirements for investment entities

There is no significant impact on the interim condensed consolidated financial statements upon adoption of the above
standards.
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.
The Group’s main retail clothing business is divided into three reportable operating segments: UNIQLO Japan, UNIQLOInternational 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
Global Brands: GU, Theory, COMPTOIR DES COTONNIERS, PRINCESSE TAM.TAM and J Brand clothing operations(ii)

Method of calculating segment revenue and results
The methods of accounting for the reportable segments are the same as those stated in the “Significant Accounting
Policies” of the Group’s annual consolidated financial statements for the year ended 31 August 2016.
The Group does not allocate assets and liabilities to individual reportable segments.

(iii)

Segment information

For the nine months ended 31 May 2016
(Millions of yen)
Reportable segments
UNIQLOJapan

UNIQLOInternational

GlobalBrands

Total

Others(Note 1)

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

Revenue

645,432

532,813254,350

1,432,595

2,020

—

1,434,616

Operating profit

93,21642,23523,056

158,50951(12,731)

145,829

Segment income(profit before
income taxes)

92,65142,07322,905

157,63051(35,586)

122,095(Note 1) “Others” include real estate leasing business, etc.
(Note 2) “Adjustments” mainly include revenue and corporate expenses which are not allocated to individual reportablesegments.
For the nine months ended 31 May 2017
(Millions of yen)
Reportable segments
UNIQLOJapan

UNIQLOInternational

GlobalBrands

Total

Others(Note 1)

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

Revenue

653,484

561,567

260,9121,475,964

1,993

—

1,477,958

Operating profit

92,64968,11619,148

179,913184

520

180,618

Segment income(profit before
income taxes)

94,441

68,683

19,033

182,159184

13,133

195,477(Note 1) “Others” include real estate leasing business, etc.
(Note 2) “Adjustments” mainly include revenue and corporate expenses which are not allocated to individual reportablesegments.

— 23 —

For the three months ended 31 May 2016
(Millions of yen)
Reportable segments
UNIQLOJapan

UNIQLOInternational

GlobalBrands

Total

Others(Note 1)

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

Revenue

191,738

143,557

87,033422,330

632—

422,962

Operating profit

29,103

12,832

8,746

50,68343(4,238)46,488Segment income(profit before
income taxes)

28,856

13,406

9,254

51,517

43(11,506)

40,054(Note1) “Others” include real estate leasing business, etc.
(Note2) “Adjustments” mainly include revenue and corporate expenses which are not allocated to individual reportablesegments.
For the three months ended 31 May 2017
(Millions of yen)
Reportable segments
UNIQLOUNIQLO

GlobalJapan

International

Brands

Total

Others(Note 1)

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

Revenue

198,362

168,705

92,713459,780668—

460,449

Operating profit

23,86019,342

9,081

52,28470(2,394)49,960

Segment income(profit before
income taxes)

23,19919,4609,045

51,70570(3,909)47,866(Note1) “Others” include real estate leasing business, etc.
(Note2) “Adjustments” mainly include 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)

Write-down of inventories to net realizable value— 24 —

Nine months ended
31 May 2016

Nine months ended
31 May 2017

3,430

3,506

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 2016
Buildings and structures
Furniture, equipment and vehicles
Land
Construction in progress
Lease assets
Total

As at
31 May 201781,75913,733
1,962
11,02913,36894,147
14,351
1,962
3,056
17,806

121,853

131,324

8. Dividends
The total amount of dividends paid was as follows:
Dividends paid during the nine months ended 31 May 2016
Total dividends(Millions of yen)

Resolution

Dividends per share(Yen)

Meeting of the Board of Directors on 4 November 2015

17,840175

Meeting of the Board of Directors on 7 April 2016

18,861

185

Dividends for which the declared date is 31 August 2015 are paid on or after 11 November 2015 as the effective date.
Dividends for which the declared date is 29 February 2016 are paid on or after 11 May 2016 as the effective date.
Dividends paid during the nine months ended 31 May 2017
Total dividends(Millions of yen)

Resolution

Dividends per share(Yen)

Meeting of the Board of Directors on 4 November 2016

16,824165

Meeting of the Board of Directors on 13 April 2017

17,846

175

Dividends for which the declared date is 31 August 2016 are paid on or after 11 November 2016 as the effective date.
Dividends for which the declared date is 28 February 2017 are paid on or after 12 May 2017 as the effective date.
9. Selling, general and administrative expenses
The breakdown of selling, general and administrative expenses for each reporting period is as follows:(Millions of yen)
Nine months ended
31 May 2016

Nine months ended
31 May 2017

Selling, general and administrative expenses
Advertising and promotion
Rental expenses
Depreciation and amortization
Outsourcing
Salaries
Others58,513
132,673
27,78024,961
181,018
115,531

57,686
133,062
27,53924,108
185,419
118,345

Total

540,479

546,162— 25 —

10. Other income and other expenses
The breakdown of other income and other expenses for each reporting period is as follows:(Millions of yen)
Nine months ended
31 May 2016

Nine months ended
31 May 2017

—
34
—
1,842

2,030
13
512
2,230

1,877

4,787

Nine months ended
31 May 2016

Nine months ended
31 May 2017

6,776
783
2,384

—
1,328
2,097

9,943

3,426

Other income
Foreign exchange gains*
Gains on sales of property, plant and equipment
Share of profits and losses of associates
Others
Total(Millions of yen)

Other expenses
Foreign exchange losses*
Loss on retirement of property, plant and equipment
OthersTotal* Currency adjustments incurred in the course of operating transactions are included in “other income” or “other expenses”.
11. Finance income and finance costs
The breakdown of finance income and finance costs for each reporting period is as follows:(Millions of yen)
Nine months ended
31 May 2016

Nine months ended
31 May 2017—13,331

Interest income

1,384

3,513

Dividend income

55Finance income
Foreign exchange gains*

Others
Total

—

244

1,389

17,094(Millions of yen)

Nine months ended
31 May 2016

Nine months ended
31 May 201723,446

—

1,677

2,235

25,124

2,235

Finance costs
Foreign exchange losses*
Interest expenses
Total* Currency adjustments incurred in the course of non-operating transactions are included in “finance income” or “finance costs”.

— 26 —

12. Earnings per share
Nine months ended 31 May 2016
Equity per share attributable to ownersof the parent (Yen)

Nine months ended 31 May 2017
6,559.91

Equity per share attributable to ownersof the parent (Yen)7,174.08

Basic earnings per share for the period (Yen)

696.50

Basic earnings per share for the period (Yen)

1,177.89

Diluted earnings per share for the period (Yen)695.54

Diluted earnings per share for the period (Yen)

1,176.18(Note) The basis for calculation of basic earnings per share and diluted earnings per share for the period is as follows:
Nine months ended
31 May 2016

Nine months ended
31 May 2017

71,010120,113

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)

71,010120,113

Average number of common stock during the period (Shares)

101,952,746

101,973,153

Diluted earnings per share for the period
Adjustment to profit (Millions of yen)——

Increase in number of common stock (Shares)

140,984

148,148(share subscription rights)(140,984)(148,148)

Three months ended 31 May 2016

Three months ended 31 May 2017

Basic earnings per share for the period (Yen)

235.07

Basic earnings per share for the period (Yen)

224.35

Diluted earnings per share for the period (Yen)234.74

Diluted earnings per share for the period (Yen)

224.02(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
31 May 2016
31 May 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)

23,96722,879——Profit attributable to common shareholders (Millions of yen)

23,96722,879Average number of common stock during the period (Shares)

101,958,301

101,979,476

Diluted earnings per share for the period
Adjustment to profit (Millions of yen)——

Increase in number of common stock (Shares)

144,318

151,776(share subscription rights)(144,318)(151,776)— 27 —

13. Fair value of financial instruments
The information about carrying amount and fair value of financial instruments is as follows:(Millions of yen)
As at 31 August 2016
Carrying amounts
Short-term borrowings

3,788

As at 31 May 2017

Fair value
3,788

Carrying amounts
1,231

Fair value
1,231Long-term borrowings (Note)

14,12014,29813,903

14,034

Corporate bonds

249,486

253,850

249,559

253,286

Lease obligations (Note)
Total

16,06916,001

18,78818,984283,465

287,939

283,482

287,537(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, long-term financial assets and long-term
financial liabilities are measured by amortized 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 time remaining to maturity and credit risk.

— 28 —

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 described as follows:
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 2016
Available-for-sale financial assets

Level 1

Level 2

Level 3

Total

1,424

—

212

1,636

Financial instruments at fair value throughprofit or loss (“FVTPL”)

—

(8)

—

(8)

Foreign currency forward contracts designatedas hedging instruments—(71,810)—(71,810)

1,424(71,818)

212(70,182)

Total(Millions of yen)
As at 31 May 2017

Level 1

Level 2

Level 3

Total

Available-for-sale financial assets

375

—

212

587

Financial instruments at FVTPL

—

(2)

—

(2)

Foreign currency forward contracts designatedas hedging instruments

—

4,876

—

4,876

375

4,874

212

5,461

Total

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.
Unlisted securities are included in level 3. There is no significant increase or decrease in level 3 items through purchase,
disposal or settlement. Also, there is no transfer from level 3 to level 2.
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.

— 29 —

14. Commitments
The Group had the following commitments at each reporting dates:(Millions of yen)
As at
31 August 2016
Commitment for acquisition of property, plant and equipment
Commitment for acquisition of intangible assets
Total

As at
31 May 2017

9,889
399

7,984
3,028

10,28811,012

15. Subsequent Events
Not applicable.

2. Others
Dividends
The Company resolved to pay a dividend from retained earnings at the meeting of the Board of Directors convened on 13
April 2017.
The total amount of dividend 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”.

— 30 —

Report on review of interim condensed consolidated financial statements
Board of Directors
FAST RETAILING CO., LTD.
Ernst & Young ShinNihon LLC
Masayuki Miyairi
Certified Public Accountant
Designated and Engagement Partner
Tomo Ito
Certified Public Accountant
Designated and Engagement Partner
Pursuant to first clause of Article 193-2 of the Financial Instruments and Exchange Act, we have reviewed the interim condensed
consolidated financial information included in the financial section, which comprises the interim condensed consolidated
statement of financial position of FAST RETAILING CO., LTD. (the “Company”) and its subsidiaries (collectively, the “Group”) as at
31 May 2017, and the related interim condensed consolidated statement of profit or loss and interim condensed consolidated
statement of comprehensive income income for the three-month and the nine-month period then ended, interim condensed
consolidated statement of changes in equity and interim condensed consolidated statement of cash flows for the nine-month
period then ended, and other explanatory notes (the “Interim Financial Information”).
Management’s responsibility for the interim condensed consolidated financial statements
Management is responsible for the preparation and fair presentation of the Interim Financial Information in accordance with
International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”), pursuant to Article 93 of the “Rules GoverningTerm, Form and Preparation of Consolidated Quarterly Financial Statements”, and for such internal control as management
determines is necessary to enable the preparation of interim condensed consolidated financial statements that are free frommaterial misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express a conclusion on the Interim Financial Information based on our review. Our report is made solely
to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person forthe contents of this report.
We conducted our review in accordance with quarterly review standards generally accepted in Japan. A review of Interim
Financial Information consists of making inquiries, primarily of persons responsible for financial and accounting matters, andapplying analytical and other quarterly review procedures. A review is substantially less in scope than an audit conducted inaccordance with auditing standards generally accepted in Japan and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed
consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public Accountants Act.

Ernst & Young ShinNihon LLC
Tokyo, Japan
14 July 2017
(Note)
This is an English translation of the Japanese language Independent Auditors’ Report issued by Ernst & Young ShinNihon LLC
in connection with the review of the interim condensed consolidated financial statements of the Group prepared in Japanese
for the period ended 31 May 2017. Ernst & Young ShinNihon LLC has not reviewed the English language version of the interim
condensed consolidated financial statements for the above mentioned period.

— 31 —