FAST RE TAILING CO., LTD.
迅銷有限公司

Year-end Report 2014/15
2014.9.1–2015.8.31
Stock Code: 6288

Contents
Corporate Information

2

Financial Highlights

3

Corporate Profile

6

Management Discussion and Analysis

12

Capital Expenditure

24

Stock Information and Dividend Policy

28

Board of Directors

61

Corporate Governance Report

67

Financial Information

76

Consolidated statement of financial position

77

Consolidated statement of profit or loss

78

Consolidated statement of comprehensive income

79

Consolidated statement of changes in equity

80

Consolidated statement of cash flows

82

Notes to the consolidated financial statements

84

Balance sheet

135

Statement of income

137

Statement of changes in net assets

138

Notes to the financial statements

140

Associated details

144

Main details of assets and liabilities

145

Independent Auditors’ Report (Group)146

Independent Auditors’ Report (Company)

147

Internal Control Report

148

Confirmation Note

149

Corporate Information
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)

704-705, 7th Floor, Miramar Tower,
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(1) Consolidated Financial Summary
TermInternational Financial Reporting Standards (“IFRS”)
Transition Date

52nd Year

53rd Year54th Year

1 September 2012

Year ended
31 August 2013

Year ended
31 August 2014

Year ended
31 August 2015

Revenue (Millions of yen)—

1,142,971

1,382,935

1,681,781

Operating profit (Millions of yen)—

134,101

130,402

164,463

Accounting Period

Profit before income taxes (Millions of yen)—

155,732

135,470

180,676

Profit attributable to ownersof the parent (Millions of yen)—

104,595

74,546

110,027

Comprehensive income attributable to ownersof the parent (Millions of yen)—

205,660

75,517

163,871

Equity attributable to ownersof the parent (Millions of yen)

391,456

570,428

618,381750,937

Total assets (Millions of yen)604,397

901,208

992,307

1,163,706

Equity per share attributable to ownersof the parent (Yen)3,843.30

5,598.12

6,067.40

7,366.07

Basic earnings per share for the year (Yen)—

1,026.68

731.51

1,079.42

Diluted earnings per share for the year (Yen)—

1,025.75

730.81

1,078.08

64.8

63.3

62.3

64.5

Ratio of profit to equity attributable to ownersof the parent (%)

—

21.7

12.5

16.1

Price earnings ratio (times)

—

31.1

44.5

45.6

Net cash from operating activities(Millions of yen)—

99,474

110,595

134,931

Net cash used in investing activities(Millions of yen)—

(62,584)(56,323)(73,145)

Net cash used in financing activities(Millions of yen)—

(24,226)(44,060)(41,784)

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

266,023

296,708

314,049355,212

Number of employees:(Separate, average number of
temporary employees) (persons)

18,854(19,485)

23,982(23,535)

30,448(25,705)

41,646(27,219)

Ratio of equity attributable to ownersof the parent to total assets (%)(Notes)

1. Revenue does not include consumption taxes, etc.
2. The Group started to prepare the consolidated financial statements for the year ended 31 August 2014 inaccordance with IFRS.

—3—

Term

Generally Accepted Accounting Principles in Japan (“JGAAP”)
50th Year

51st Year

52nd Year

53rd Year

Year ended
31 August 2011

Year ended
31 August 2012

Year ended
31 August 2013

Year ended
31 August 2014

Net sales (Millions of yen)

820,349928,669

1,143,003

1,382,907

Ordinary income (Millions of yen)

107,090

125,212

148,979

156,828

Net income (Millions of yen)

54,35471,65490,377

78,118

Accounting period

Comprehensive income (Millions of yen)

52,246

96,501

205,329

82,066

Total net assets (Millions of yen)

319,911394,892

579,591

626,581

Total assets (Millions of yen)

533,777595,102885,800

977,609

Equity per share (Yen)

3,091.17

3,797.04

5,489.86

5,958.54

Basic net income per share (Yen)

533.93703.62887.12766.55

Diluted net income per share (Yen)

533.66703.06886.31765.82Equity ratio (%)

59.0

65.0

63.2

62.1

Earnings on equity (%)

18.1

20.4

19.1

13.4

Price earnings ratio (times)

27.1

26.0

36.0

42.5

Net cash from operating activities(Millions of yen)

57,158

127,643

99,439111,399

Net cash used in investing activities(Millions of yen)

(26,643)(35,313)(63,901)(63,574)

Net cash used in financing activities(Millions of yen)

(26,156)(29,056)(23,945)(38,014)

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

202,104

266,020295,622

313,746

Number of employees:(Separate, average number of
temporary employees) (Persons)

14,612(18,711)18,854(19,485)

23,982(23,535)

30,448(25,705)(Notes)1. Net sales do not include consumption taxes, etc.
2. The financial figures for the 53rd year prepared in accordance with JGAAP are not audited pursuant to Article
193-2-1 of the Financial Instruments and Exchange Act.

—4—

(2) Non-Consolidated Financial Summary
Term
Accounting period

50th Year

51st Year

52nd Year

53rd Year54th Year

Year ended
Year ended
Year ended
Year ended
Year ended
31 August 2011 31 August 2012 31 August 2013 31 August 2014 31 August 2015

Operating revenue (Millions of yen)

72,68778,454

91,57077,438

119,071

Ordinary income (Millions of yen)

49,88954,982

76,56946,921

89,245

Net income (Millions of yen)

47,783

55,956

68,77623,33670,227

Capital stock (Millions of yen)

10,273

10,273

10,273

10,273

10,273106,073,656

106,073,656

106,073,656

106,073,656

106,073,656

Total net assets (Millions of yen)

249,441

284,314335,754332,255

376,007

Total assets (Millions of yen)

267,290322,589

370,110385,113410,009

Equity per share (Yen)

Total number of shares issued (shares)

2,449.92

2,783.97

3,286.26

3,243.97

3,662.28

Dividends per share(Figures in parentheses
indicate interim dividends) (Yen)

180.00(95.00)260.00(130.00)

290.00(140.00)

300.00(150.00)

350.0(175.00)

Basic net income per share (Yen)469.38549.48675.09228.99688.96

Diluted net income per share (Yen)469.15549.04674.48228.77688.11Equity ratio (%)

93.1

87.9

90.5

85.9

91.1

Earnings on equity (%)

19.2

21.0

22.2

7.0

20.0

Price earnings ratio (times)

30.8

33.2

47.3

142.1

71.5

Dividend ratio (%)

38.4

47.3

43.0

131.0

50.8

Number of employees:(Separate, average number of
temporary employees) (Persons)

710
(145)

781
(84)

924
(103)

1,088
(114)

1,234
(119)

(Note)

Opearting revenue does not include consumption taxes, etc.

—5—Corporate Profile
1.

History
In March 1949, Hitoshi Yanai, the father of our current Chairman, President and CEO Tadashi Yanai, founded Men’s
Shop Ogori Shoji in Ube City, Yamaguchi Prefecture. To solidify the management foundation, the business later became
incorporated in May 1963 under the name Ogori Shoji Co., Ltd.
In June 1984, the Fukuromachi Store, a store specializing in casual clothing, opened its doors in Hiroshima City, Hiroshima
Prefecture as the first UNIQLO.
The Company’s history:
Date

Summary

May 1963

Tadashi Yanai takes over the family business and transforms it into Ogori Shoji Co., Ltd., capitalized
at 6 million yen, with headquarters at 63-147 Ogushi Village, Ube City, Yamaguchi Prefecture (now2-12-12 Chuo-cho, Ube City, Yamaguchi Prefecture).

June 1984

UNIQLO’s first location, the Fukuromachi Store, opens in Hiroshima (closed in 1991), marking themove into casual wear retailing with stores named UNIQLO.

September 1991

Ogori Shoji Co., Ltd. changes its name to FAST RETAILING CO., LTD., to embody the guideline of conduct.

April 1992

The main OS store, selling men’s wear, is converted to the UNIQLO Onda store (closed in 2001). All thestores are completely renovated as a casual wear store matching the UNIQLO brand.

April 1994

The number of UNIQLO stores in Japan rises above 100 (109 directly operated stores, 7 franchises).

July 1994

FAST RETAILING CO., LTD. lists its shares on the Hiroshima Stock Exchange.

April 1997

FAST RETAILING CO., LTD. lists its shares on the second section of the Tokyo Stock Exchange.

February 1998

Construction of the head office is finished (717-1 Sayama, Yamaguchi City, Yamaguchi Prefecture) to
expand the company’s headquarters capacity.

November 1998

The first urban UNIQLO store opens in Shibuya-ku, Tokyo (UNIQLO Harajuku store, closed in 2007).

February 1999

FAST RETAILING CO., LTD. lists its shares on the first section of the Tokyo Stock Exchange.

April 1999

UNIQLO Shanghai office opens to further enhance production management.

April 2000

Tokyo headquarter opens in Shibuya-ku, Tokyo

June 2000

Ties up with East Japan Railway Company (JR East) and JR East Japan Kiosk to offer UNIQLO products
through shops in JR East stations in Tokyo area, to raise consumer exposure to our products and makeshopping more convenient for our customers.

October 2000

Online store opens for business to open a new sales channel and make shopping easier for our customers.

September 2001

FAST RETAILING (U.K) LTD. opens first four overseas UNIQLO stores in London.

September 2002

Fast Retailing (Jiangsu) Apparel Co., Ltd. opens first two UNIQLO China stores in Shanghai.

August 2003

UNIQLO (U.K.) LIMITED (now UNIQLO EUROPE LIMITED) establishes as successor to FAST RETAILING(U.K) LTD.

January 2004

FAST RETAILING CO., LTD. invests in LINK HOLDINGS CO., LTD. (now LINK THEORY JAPAN CO., LTD.),the developer of Theory brand career apparel.

August 2004

Capital reserves of ¥7 billion integrated into capital, increasing total capital to ¥10.273 billion.

November 2004

Establishment of UNIQLO USA, Inc.

December 2004

Establishment of FRL Korea Co., Ltd., a business venture with South Korea’s Lotte Shopping Co., Ltd.

March 2005

Establishment of UNIQLO HONG KONG, LIMITED.

April 2005

Establishment of FR FRANCE S.A.S. (now FAST RETAILING FRANCE S.A.S.) and GLOBAL RETAILINGFRANCE S.A.S. (now UNIQLO EUROPE LIMITED).

May 2005

Acquires management control of Nelson Finance S.A.S. (now CRÉATIONS NELSON S.A.S.), thedeveloper of the Comptoir des Cotonniers brand, and makes it a subsidiary.

November 2005

Adopts a holding company structure to reinforce the UNIQLO brand and develop new business
opportunities.

February 2006

Makes equity investment in, and makes a subsidiary of, PETIT VEHICULE S.A.S., developer of
PRINCESSE TAM.TAM, a well-known brand of lingerie in France.

March 2006

Establishes G.U. CO., LTD. to manage a new brand of less-expensive casual clothing to follow UNIQLO.
—6—

Date

Summary

November 2006UNIQLO Soho New York Store opens as the brand’s first global flagship store, with over 3,300 square
meters of floor space.

March 2007

UNIQLO opens the Kobe Harborland Store (closed in 2012), the first large-format store with over 3,300
square meters of floor space in Japan.

November 2007

UNIQLO 311 Oxford Street Store opens in London as the brand’s first global flagship store in Europe.

December 2007

First UNIQLO France store opens in the Paris suburbs La Defense.

August 2008

UNIQLO establishes a business venture with Wing Tai Retail Pte. Ltd. to expand in Singapore.

March 2009LINK THEORY HOLDINGS CO., LTD. (now LINK THEORY JAPAN CO., LTD.) becomes a subsidiary througha takeover bid.

March 2009UNIQLO signs a design consulting contract for its products with world-renowned fashion designer Jil Sander.

April 2009First UNIQLO Singapore store opens in the Tampines 1 Mall.

October 2009UNIQLO Paris Opera Store opens in France as a global flagship store.

March 2010

UNIQLO establishes a wholly owned subsidiary in Taiwan.

April 2010

First UNIQLO Russia store, UNIQLO Atrium, opens in Moscow.

May 2010

UNIQLO Shanghai West Nanjing Road Store opens in China as a global flagship store.

October 2010

UNIQLO Shinsaibashi Store in Osaka opens as the first UNIQLO global flagship store in Japan.

October 2010

First GU flagship store opens in Shinsaibashi, Osaka.

October 2010

First UNIQLO Taiwan store opens in Taipei.

November 2010

First UNIQLO Malaysia store opens in Kuala Lumpur.

February 2011

FAST RETAILING CO., LTD. launches a global partnership agreement with the United Nations HighCommissioner for Refugees (UNHCR) to further reinforce ongoing company initiatives such as the
All-Product Recycling Initiative.

March 2011

Donates UNIQLO and GU clothing to sufferers of the Great East Japan Earthquake.

September 2011

First UNIQLO Thailand store opens in Bangkok.

September 2011UNIQLO Mingyao Department Store opens in Taipei, Taiwan as a global flagship store.

October 2011UNIQLO Fifth Avenue Store opens in New York as a global flagship store.

November 2011UNIQLO Myeongdong Central Store opens in Seoul, Korea as a global flagship store.

March 2012UNIQLO Ginza Store opens in Tokyo as a global flagship store.

June 2012

First UNIQLO Philippines store opens in Manila.

September 2012

BICQLO Shinjuku East Exit Store opens in Tokyo as a global hotspot store.

October 2012

First UNIQLO store on the West Coast of the United States opens in San Francisco, Union Square.

December 2012

FAST RETAILING CO., LTD. acquires majority control of J Brand Holdings, LLC, a leading contemporary
fashion brand based in Los Angeles, California.

April 2013

UNIQLO Lee Theatre opens in Hong Kong as a global flagship store.

June 2013

UNIQLO Lotte Shopping Avenue Store opens as the first UNIQLO Store in the Republic of Indonesia.

September 2013

UNIQLO global flagship store opens in Shanghai.

September 2013

First GU overseas store opens in Shanghai.

March 2014

HDRs (Hong Kong Depository Receipts) listed on the Main Board of The Stock Exchange of Hong Kong Limited.

March 2014

UNIQLO global hotspot store opens in Ikebukuro, Sunshine 60.

April 2014

First UNIQLO Australia store opens in Melbourne.

April 2014

First UNIQLO Germany store opens in Berlin, Tauenzienstrasse as a global flagship store.

April 2014

UNIQLO global hotspot store opens in Tokyo, Okachimachi district.

October 2014

UNIQLO global hotspot store opens in Tokyo, Kichijoji.

October 2014

UNIQLO global flagship store, UNIQLO OSAKA, opens.

April 2015

Establishes ON HAND CO., LTD. together with Daiwa HouseIndustry Co., Ltd. to promote thenext-generation logistics business.

—7—

2.

Our Business
The Group consists of FAST RETAILING CO., LTD. (the “Company”) and 119 consolidated subsidiaries.
Details of the Group’s businesses as well as the positioning of the Company and its main affiliates relative to thebusinesses are as follows.
The segment categories in this section of the report are the same as the segment categories in the section headed“FINANCIAL INFORMATION 4. Consolidated Financial Statements: Notes to the Consolidated Financial Statements”.

Category

Company name

Reportable Segment

Holding company

FAST RETAILING CO., LTD.

OthersUNIQLO CO., LTD. (consolidated subsidiary)

UNIQLO Japan

UNIQLO EUROPE LIMITED (consolidated subsidiary)

UNIQLO International

FAST RETAILING (CHINA) TRADING CO., LTD.*(consolidated subsidiary)

UNIQLO International

FRL Korea Co., Ltd. (consolidated subsidiary)

UNIQLO International

LLC UNIQLO (RUS) (consolidated subsidiary)

UNIQLO International

UNIQLO TRADING CO., LTD.* (consolidated subsidiary)

UNIQLO International

FAST RETAILING (SINGAPORE) PTE. LTD.
(consolidated subsidiary)

UNIQLO International

UNIQLO (THAILAND) COMPANY LIMITED(consolidated subsidiary)

UNIQLO International

PT. FAST RETAILING INDONESIA (consolidated subsidiary)

UNIQLO International

UNIQLO AUSTRALIA PTY LTD (consolidated subsidiary)

UNIQLO International

FAST RETAILING (SHANGHAI) TRADING CO., LTD.*(consolidated subsidiary)

UNIQLO International

FAST RETAILING FRANCE S.A.S. (consolidated subsidiary)

Global Brands

Fast Retailing USA, Inc. (consolidated subsidiary)

UNIQLO International/
Global Brands

J Brand, Inc. (consolidated subsidiary)

Global Brands

J BRAND Japan Co., LTD. (consolidated subsidiary)

Global Brands

G.U. CO., LTD. (consolidated subsidiary)

Global Brands

LINK THEORY JAPAN CO., LTD. (consolidated subsidiary)

Global Brands

COMPTOIR DES COTONNIERS JAPAN CO., LTD.
(consolidated subsidiary)

Global Brands

Other consolidated subsidiaries (101 companies)

UNIQLO International/
Global Brands/Others

Main consolidated subsidiaries*

The English names of all subsidiaries established in the People’s Republic of China (“PRC”) are translated for identification
only.

(Notes)

1.
2.
3.
4.

“UNIQLO” business means the retail business of UNIQLO brand casual apparel in Japan and overseas.
“Global Brands” business means the planning, retail and manufacturing of apparel in Japan and overseas.
“Others” includes real estate leasing businesses.
The Company corresponds to a specified listed company, etc. as stipulated in Article 49-2 of the Cabinet Office
Ordinance on Restrictions on Securities Transactions. As a result, assessment of the minimal standard for material
facts under the insider trading regulations is based on the consolidated numerical data.

—8—

Organizational structure is as follows:Business Structure
UNIQLO Business

Shareholdings

FAST
RETAILING
CO., LTD.
(holding
company)(Consolidated subsidiaries)
UNIQLO CO., LTD.
UNIQLO EUROPE LIMITEDFAST RETAILING (CHINA) TRADING CO., LTD.*FRL Korea Co., Ltd.
LLC UNIQLO (RUS)
UNIQLO TRADING CO., LTD. *FAST RETAILING (SINGAPORE) PTE. LTD.
UNIQLO (THAILAND) COMPANY LIMITED
PT. FAST RETAILING INDONESIAUNIQLO AUSTRALIA PTY LTD
FAST RETAILING (SHANGHAI) TRADING CO., LTD. *Product sales

Customers

Other consolidated subsidiaries (19 companies)
Global Brands business/Others

Shareholdings(Consolidated subsidiaries)
FAST RETAILING FRANCE S.A.S.
Fast Retailing USA, Inc.
J Brand, Inc.
J BRAND Japan Co., LTD.
G.U. CO., LTD.
LINK THEORY JAPAN CO., LTD.
COMPTOIR DES COTONNIERS JAPAN CO., LTD.

Product sales

Other consolidated subsidiaries (82 companies)* The English names of all subsidiaries established in PRC are translated for identification only.

—9—

3.

Subsidiaries and Associates

Name

Location

Relationship

Nominal value of issued
ordinary/registeredshare capital(Thousands)

Details of main
businesses

Ownership Ratioof Voting Rights

Common directors(Number of
persons)

UNIQLO Japan

100.0%

3—

Capital/operational ties

(Consolidated subsidiaries)
UNIQLO CO., LTD.

Yamaguchi City,
Yamaguchi Prefecture

UNIQLO EUROPE LIMITED

London,United Kingdom

GBP40,000

UNIQLO International

100.0%

1

Bond guarantees

FAST RETAILING (CHINA)TRADING CO., LTD*

Shanghai, PRC

USD20,000

UNIQLO International

100.0%

2—

FRL Korea Co., Ltd.

Seoul Special City,
South Korea

KRW24,000,000

UNIQLO International

51.0%

1

—

LLC UNIQLO (RUS)

Moscow,
Russian Federation

RUB1,310,010

UNIQLO International

100.0%—UNIQLO TRADING CO., LTD.*

Shanghai, PRC

USD30,000

UNIQLO International

100.0%

2

FAST RETAILING (SINGAPORE)
PTE. LTD.

Republic of Singapore

SGD86,000

UNIQLO International

100.0%

1

UNIQLO (THAILAND) COMPANY
LIMITED

Bangkok,
Kingdom of Thailand

THB700,000

UNIQLO International

75.0%(75.0%)——

PT. FAST RETAILING INDONESIA

Jakarta,Republic of Indonesia

IDR115,236,000

UNIQLO International

75.0%(75.0%)

1—

UNIQLO AUSTRALIA PTY LTD

Melbourne, Australia

AUD21,000

UNIQLO International

100.0%(100.0%)—FAST RETAILING (SHANGHAI)
TRADING CO., LTD.*

Shanghai, PRC

USD35,000

UNIQLO International

100.0%

2—

FAST RETAILING FRANCE S.A.S.

Paris, France

EUR168,525

Global Brands

100.0%

1

Bond guarantees
Loans

Fast Retailing USA, Inc.

New York,
United States ofAmerica

USD30,000

UNIQLO International/
Global Brands

100.0%—

Bond guarantees
Loans

J Brand, Inc.

California,
United States ofAmerica

USD394,248

Global brands

100.0%(100.0%)1—

J Brand Japan Co., LTD.

Yamaguchi City,
Yamaguchi Prefecture

JPY10,000

Global brands

100.0%—

G.U. CO., LTD.

Yamaguchi City,
Yamaguchi Prefecture

JPY10,000

Global brands

100.0%

1—

LINK THEORY JAPAN CO., LTD.

Yamaguchi City,
Yamaguchi Prefecture

JPY10,000

Global brands

100.0%

2—

COMPTOIR DES COTONNIERS
JAPAN CO., LTD.

Yamaguchi City,
Yamaguchi Prefecture

JPY33,775

Global brands

100.0%(100.0%)——

Other consolidated subsidiaries(101 companies)

—

—

—

—

—

*

JPY1,000,000

—

Loans
—
Loans

Loans

Loans

The English names of all subsidiaries established in the PRC are translated for identification only.

(Notes)1. The information given in the “Details of main businesses” column is the name of the business segment.
2. UNIQLO CO., LTD., UNIQLO EUROPE LIMITED, FAST RETAILING (China) TRADING CO., LTD., FRL Korea Co., Ltd.,LLC UNIQLO (RUS), UNIQLO TRADING CO., LTD., FAST RETAILING (SINGAPORE) PTE. LTD., UNIQLO (THAILAND)COMPANY LIMITED, PT. FAST RETAILING INDONESIA, UNIQLO AUSTRALIA PTY LTD, FAST RETAILING (SHANGHAI)
TRADING CO. LTD., FAST RETAILING FRANCE S.A.S., Fast Retailing USA, Inc., and J Brand, Inc. are specified
subsidiaries.
3. Figures in parentheses in the “Ownership Ratio of Voting Rights” column indicate the ratio of voting rights held by
the Group’s subsidiary.

— 10 —

4. Net sales (excluding internal sales between other member companies of consolidated group) of UNIQLO CO., LTD.
and FAST RETAILING (CHINA) TRADING CO., LTD. are greater than 10% of consolidated revenue. Key elements ofprofit/loss for the year ended 31 August 2015 are as below.
UNIQLO CO., LTD.
(1) Revenue(2) Profit before income taxes(3) Profit for the year(4) Total equity(5) Total assets

780,139 million yen
125,588 million yen
81,390 million yen
257,152 million yen
471,142 million yen

FAST RETAILING (CHINA) TRADING CO., LTD.
(1) Revenue
182,573 million yen(2) Profit before income taxes
22,987 million yen(3) Profit for the year
17,336 million yen(4) Total equity
47,023 million yen(5) Total assets
99,646 million yen

4.
(1)

Employees
The Group
As at 31 August 2015
Name of segment

Number of employees (Persons)

UNIQLO Japan

11,424 (16,224)

UNIQLO International

22,843 (6,208)

Global brands

5,038 (4,599)

Total for reportable segments

39,305 (27,031)

Others1,107 (69)

All companies (shared)

1,234 (119)Total(Notes)(2)

41,646 (27,219)

1. The number of employees does not include entrusted operating officers, junior employees, part-time workers or
temporary staff seconded from other companies.
2. The number of junior employees and part-time workers is stated as a separate number in parentheses as the average
number of people per year was calculated based on an eight-hour workday per person.
3. The number of employees given as “All companies (shared)” represents administrative employees who could not be
categorized in a specific business segment.
4. Hiring of employees for new stores was the main reason for the increase in the number of employees during the year
ended 31 August 2015.

The Company
As at 31 August 2015

Number of employees (persons)
1,234 (119)(Notes)(3)

Average age (years, months)
36 years and 11 months

Average number of years
with the Company
5 years and 1 month

Average annual wages(thousands of yen)
7,696

1. The number of employees does not include entrusted operating officers, junior employees, part-time workers or
temporary staff seconded from other companies.
2. The number of junior employees and part-time workers stated in parentheses represented the number of persons
calculated based on an eight-hour workday per person.
3. Figures for average annual wages include bonuses and other non-standard payments.
4. Transferring of employees from subsidiaries was the main reason for the increase in the number of employees during
the year ended 31 August 2015.
5. All of the Company’s employees are categorized as “All companies (shared)”.

Status of labor unions
There are no labor unions at the Company, but unions have been formed at some subsidiary companies. Managementlabor relations have been smooth, and there are no items of note to report.
— 11 —

Management Discussion and Analysis
1.

Business Results(1)

Analysis of Business Results for the year ended 31 August 2015
The Group reported a record high performance in fiscal year 2015, the full financial year spanning 1 September 2014
to 31 August 2015. Consolidated revenue totaled ¥1.6817 trillion (+21.6% year-on-year), consolidated operating profit
reached ¥164.4 billion (+26.1% year-on-year), consolidated profit before income taxes for the year stood at ¥117.3 billion(+48.0% year-on-year), and profit attributable to owners of the parent totaled ¥110.0 billion (+47.6% year-on-year). Under
operating profit, we reported ¥16.1 billion impairment losses relating to the J Brand premium denim label, software, andproperty, plant and equipment of UNIQLO USA LLC stores, and a ¥1.8 billion loss on the retirement of property, plantand equipment relating to the refurbishment of global flagship stores in London and Shanghai. The depreciation of theJapanese yen boosted the carrying amount of foreign-currency denominated assets, generating a considerable increase in
net finance income, from ¥5.0 billion in fiscal year 2014 to ¥16.2 billion in fiscal year 2015.
UNIQLO International proved the strongest among our three business segments, and the key driver of Group growth infiscal year 2015. Operating profit generated by UNIQLO operations outside of Japan expanded 31.6% year-on-year to¥43.3 billion. Meanwhile, UNIQLO Japan reported a steady rise in profit, with operating profit expanding 10.3% yearon-year to ¥117.2 billion. The Global Brands segment reported an operating profit of ¥14.4 billion. Our low-priced GU
fashion casualwear brand, one of the labels of our Global Brands segment, performed extremely well in fiscal year 2015,
generating an impressive 174.9% increase in operating profit year-on-year to ¥16.4 billion.
The Group’s medium-term vision is to become the world’s number one apparel manufacturer and retailer. To achieve
this target, we have focused our efforts on expanding UNIQLO International operations by continuing to open new storesin each country where we operate. We are also opening global flagship stores in major cities around the world, to boost
awareness and visibility of the UNIQLO brand and strengthen our global operational base. We also actively promote
our GU brand by accelerating stores opening in Japan and launch the label in the Chinese market. We believe the GU
operation has reached a key turning point in its growth and development into a second main stream brand for the Group.
UNIQLO Japan
UNIQLO Japan reported record high performance in fiscal year 2015, with revenue expanding to ¥780.1 billion (+9.0%
year-on-year), and operating profit increasing to ¥117.2 billion (+10.3% year-on-year) on the back of a strong 6.2% yearon-year rise in same-store sales. However, the gross profit to revenue margin contracted by 0.2 point year-on-year infiscal year 2015, and the selling, general and administrative expenses to revenue ratio rose 0.1 point on the back ofhigher personnel costs. During the Fall Winter season, sales of core winter ranges such as HEATTECH, Ultra Light Down
and wool sweaters outstripped expectations. Our HEATTECH Extra Warm range, which was fully launched in fall 2014, isdesigned to offer 1.5 times the warmth of original HEATTECH fabrics, proved to be extremely popular among customers
and generated strong sales. The launch of our spring ranges went well, but sales of summer items were dampened slightly
by the unusually cold rainy season in June and early July. Our UNIQLO OSAKA global flagship store and UNIQLO Kichijoji
global hotspot store have impressed customers with their community-based management style, and both stores havebuilt a strong customer base since their opening in October 2014.
UNIQLO International
UNIQLO International also reported a record performance in fiscal year 2015, with revenue increasing to ¥603.6 billion(+45.9% year-on-year), and operating profit expanding to ¥43.3 billion (+31.6% year-on-year). Within the UNIQLOInternational framework, Greater China (Mainland China, Hong Kong and Taiwan) and South Korea proved to be thekey drivers of growth by reporting significant increases in revenue and profit. Meanwhile, operating profit held steadyat UNIQLO Southeast Asia. Operating profit at UNIQLO Europe contracted in fiscal year 2015 following the reporting oflosses on the retirement of property, plant and equipment related to the renovation of our 311 Oxford Street global
flagship store in London. Sales fell short of target and operating losses expanded at UNIQLO USA. This was partly due tothe rapid expansion of the store network, with 17 new stores opening in fiscal year 2015, and due to the fact that the
UNIQLO brand is still comparatively new to the US market and not yet widely recognized.
To give a few more details about those strong increases in revenue and profit at the standout UNIQLO Greater China
operation: revenue increased 46.3% year-on-year to ¥304.4 billion and operating profit expanded by 66.1% year-on-yearto ¥38.6 billion. The number of UNIQLO Greater China stores stood at 467 as of 31 August 2015. The total number of
UNIQLO International stores expanded by 165 to 798 stores as of 31 August 2015.

— 12 —

Global Brands
Global Brands reported increases in revenue and profit in fiscal year 2015. Revenue increased to ¥295.3 billion (+17.6%
year-on-year) and operating results shifted from an operating loss of ¥4.1 billion in fiscal year 2014 to an operating profitof ¥14.4 billion in fiscal year 2015. The segment reported a ¥5.1 billion impairment loss relating to recurring operating
losses at J Brand.
Within the Global Brands segment, our low-priced GU fashion casualwear label performed especially well, generating
significant increases in both revenue and profit. GU revenue reached ¥141.5 billion (+31.6% year-on-year) and operating
profit totaled ¥16.4 billion (+174.9% year-on-year). This strong performance was underpinned by GU’s ability to attract
increasing numbers of customers of all ages by developing products that firmly capture the latest fashion trends, suchas gaucho pants, and also the brand’s capacity to flexibly increase production when required. The GU label boasted 314
stores in Japan and five stores outside of Japan as of 31 August 2015.
Meanwhile, our Theory fashion brand was adversely affected by the lackluster US market for luxury fashion, and reported
a contraction in operating profit as a result. Our French fashion brand Comptoir des Cotonniers also reported a fall in
operating profit. J Brand business has continued to post operating loss after being hit hard by the downturn in the US
premium denim market.
Corporate Social Responsibility (“CSR”) Activities
The basic policy underlying the Group’s CSR activities consists of fulfilling our social responsibility, contributing tocommunities and addressing social issues and creating new value, both globally and locally.
In our All-Product Recycling Initiative, we have donated a total of 16,320,000 items (as at 31 August 2015) of clothingcollected in UNIQLO and GU stores to refugees and displaced persons, in partnership with the United Nations HighCommissioner for Refugees (UNHCR). In fiscal year 2015, a total of 280,000 items have been delivered to refugees in
Jordan, and 80,000 items mainly comprising children’s clothing to refugees in Myanmar.
To improve the work environment throughout the entire supply chain, our Work Environment Monitoring program
already in place for garment factories will be extended to monitor working conditions and environmental impacts at fabricmanufacturers, which account for 70 percent of UNIQLO’s production volume. In July 2015, we joined the Fair Labor
Association, an international NPO promoting adherence to international and national labor laws. We are also committed
to safeguarding the human rights of workers at our production partner sites.
We began selling a women’s collection inspired by traditional Bangladeshi clothing in UNIQLO stores worldwide with thelaunch of the Factory Worker Empowerment Project in April 2015. Part of the proceeds from sales of items produced
under this project will be used to fund education and awareness programs for approximately 20,000 women employed inpartner garment factories working with UNIQLO and GU. In collaboration with NPOs, we promote health and nutritional
knowledge, and offer support in areas such as pregnancy and childbirth care, and the management of personal health andfinances.

— 13 —

(2)Cash Flows Information

Cash and cash equivalents (hereinafter referred to as “funds”) as at 31 August 2015 were ¥355.2 billion, which was anincrease of ¥41.1 billion from the end of the preceding consolidated fiscal year.
(Operating Cash Flows)
Net cash from operating activities for the year ended 31 August 2015 was ¥134.9 billion, which was an increase of ¥24.3
billion (+22.0% year-on-year) from the preceding consolidated fiscal year. The principal factors were ¥180.6 billion in profit
before income taxes, ¥37.7 billion in depreciation and amortization, and ¥84.7 billion in income taxes paid.
(Investing Cash Flows)
Net cash used in investing activities for the year ended 31 August 2015 was ¥73.1 billion, which was an increase of ¥16.8
billion (+29.9% year-on-year) from the preceding consolidated fiscal year. The principal factors were ¥44.6 billion for acquisitionof property, plant and equipment, ¥16.1 billion for increase in bank deposits with maturity over 3 months and ¥8.8 billion for
payments for lease and guarantee deposits.
(Financing Cash Flows)
Net cash used in financing activities for the year ended 31 August 2015 was ¥41.7 billion, which was a decrease of ¥2.2
billion (-5.2% year-on-year) from the preceding consolidated fiscal year. The principal factor was ¥33.1 billion for cash dividends
paid.

(3)

Parallel Disclosure

Items concerning differences between the main items in consolidated financial statements prepared under IFRS andconsolidated financial statements prepared under JGAAP.
Reclassification
Items stated under non-operating income, non-operating expenses, extraordinary gains, and extraordinary losses under
JGAAP have been reclassified under IFRS; presented as finance income, finance costs, other expenses, other income, or selling,
general and administrative expenses.
Adjustment to amortization of goodwill
Under JGAAP, goodwill was amortized over an estimated amortization period. Under IFRS, this amortization ceased on thetransition date.
As a result, under IFRS, amortization of goodwill (selling, general and administrative expenses) decreased by 3,680 million
yen in the year ended 31 August 2015 and 5,960 million yen in the year ended 31 August 2014, and impairment losses (otherexpenses) increased by 1,420 million yen in the year ended 31 August 2015 and 2,711 million yen in the year ended 31 August
2014, compared with those under JGAAP.
Adjustment to exchange differences on monetary financial instruments denominated in foreign currencies
Under JGAAP, foreign exchange translation differences on monetary financial instruments denominated in foreign
currencies are recorded as unrealized gains or losses on available-for-sale securities under net assets. Under IFRS, theseexchange differences are treated as foreign exchange gains or losses.
As a result, under IFRS, foreign exchange translation differences (other income) increased by 5,595 million yen in the year
ended 31 August 2015 and 2,398 million yen in the year ended 31 August 2014, compared with those under JGAAP.
Adjustment to impairment losses of non-current assets
Under JGAAP, when there are indications that asset impairment is required, an assessment is made of the extent of theasset impairment (by comparing book value with the value of future cash flows, before discounting). After that, a measurement
is made of asset-impairment losses (by comparing book value with recoverable value). Under IFRS, when there are indications
that asset impairment is required, the recoverable value of the fixed asset(s) is estimated, and if the estimated recoverable
value is less than the book value, then a measurement is made of the asset impairment loss, either of the asset or the cashgenerating unit group.
As a result, under IFRS, impairment losses increased by 2,232 million yen in the year ended 31 August 2015 and 3,793
million yen in the year ended 31 August 2014, compared with those under JGAAP.
— 14 —

2.
(1)

Summary of Revenue and Purchasing
Revenue, by division
Year ended 31 August 2014
(From 1 September 2013 to
31 August 2014)

Division

Revenue(Millions of yen)

Year ended 31 August 2015
(From 1 September 2014 to
31 August 2015)

Percentage of total(%)

Revenue(Millions of yen)

Percentage of total(%)

Men’s clothing

292,574

21.2

314,587

18.7

Women’s clothing

354,72125.6

371,127

22.1

Children’s & Baby’s clothing

40,052

2.9

56,526

3.4

Goods and other items

16,7001.2

19,4291.1

704,04950.9

761,671

45.3

11,5940.8

18,467

1.1

Total UNIQLO Japan Operations

715,64351.7

780,139

46.4

UNIQLO International Operations

413,655

29.9

603,684

35.9

Total UNIQLO Operations

1,129,299

81.6

1,383,824

82.3

251,225

18.2

295,316

17.6

2,410

0.2

2,641

0.1

1,382,935

100.0

1,681,781

100.0

Total sales of UNIQLO Japan
Franchise related income &alteration charges

Global Brands Operations
Other Operations
Total(Notes)1. “Franchise related income” refers to the proceeds from garment sales to franchise stores and royalty income.
“Alteration charges” refers to income generated from embroidery prints and alterations to pants length.
2. “UNIQLO operations” covers the selling of UNIQLO brand casual clothing.
3. “Global Brands Operations” consists of GU operation (selling of GU brand casual clothing), Theory operation(selling of Theory, Helmut Lang and PLST brand clothing), Comptoir des Cotonniers operation (selling of Comptoir
des Cotonniers brand clothing), Princesse tam.tam operation (selling of Princesse tam.tam brand clothing) and J
Brand operation (selling of J BRAND brand clothing).
4. “Other Operations” includes real-estate leasing business, etc.
5. The above amounts do not include consumption taxes, etc.

— 15 —

(2)Revenue by region
Year ended 31 August 2015
(From 1 September 2014 to 31 August 2015)
RegionUNIQLO Japan
store sales of products

Year-on-yearchange (%)

Hokkaido

25,457

109.3

1.5

29

Aomori

5,595

103.2

0.3

9

Iwate

5,093

105.3

0.3

8

Miyagi12,306

108.3

0.7

14

Akita

3,889

101.5

0.2

7

Yamagata

4,891

106.0

0.3

8

Fukushima

8,800

108.9

0.5

10

Ibaraki

14,828

104.6

0.9

17

Tochigi

10,283

105.1

0.6

14

Gunma

12,365

105.2

0.7

19

Saitama

39,805

106.2

2.4

45

Chiba

33,541

105.4

2.0

41

Tokyo

123,064

110.1

7.3

100

Kanagawa

58,912

107.0

3.5

60

Niigata

11,246

107.1

0.7

12

Toyama

5,449

107.1

0.3

7

Ishikawa

5,817

108.2

0.4

7

Fukui

3,982

107.9

0.2

5

Yamanashi

4,720

108.6

0.3

5

Nagano10,451

108.2

0.6

11

Gifu

9,927

112.1

0.6

11

Shizuoka

21,031

107.8

1.3

24

Aichi

41,703

107.6

2.5

44

Mie

9,236

107.1

0.6

10

Shiga

7,167

115.4

0.4

10

Kyoto

17,374

105.1

1.0

20

Osaka

63,187

111.9

3.8

71

Hyogo

33,632

103.6

2.0

36

Nara

7,313

105.7

0.4

9

Wakayama

2,224

102.2

0.1

3

Tottori

3,041

99.2

0.2

3

Shimane

496

109.1

0.0

1

Okayama

9,334

110.7

0.6

10

Hiroshima

14,172

99.0

0.8

17

Yamaguchi

3,696

107.0

0.2

5

Tokushima

3,903

105.6

0.2

5

Kagawa

4,940

107.1

0.3

6

Ehime

5,114

96.4

0.3

7

Kochi

3,707

102.5

0.2

4

Fukuoka

28,068

109.6

1.7

32

Saga

3,511

100.4

0.2

4

Nagasaki

5,720

104.9

0.3

8

Kumamoto

7,900

105.5

0.5

10

— 16 —

Percentage
of total (%)

Number of storesat the end of year
(Stores)

Revenue(Millions of yen)Year ended 31 August 2015
(From 1 September 2014 to 31 August 2015)
RegionYear-on-yearchange (%)

Oita

6,056

106.2

0.4

8

Miyazaki

4,100

97.9

0.2

7

Kagoshima

7,197

105.4

0.4

11

Okinawa

5,107

112.3

0.3

7

729,371

107.5

43.4

811

Internet and mail-order sales

32,299

127.9

1.9

—

Products supplied to franchise stores/
management and administrative fees

17,774

165.0

1.1

30

692

84.1

0.0

—

UNIQLO Japan Operations

780,139

109.0

46.4

841

UNIQLO International Operations

603,684

145.9

35.9

798

Total UNIQLO Operations

1,383,824

122.5

82.3

1,639

295,316

117.6

17.6

1,339

2,641

109.6

0.1

—

1,681,781

121.6

100.0

2,978

Total UNIQLO Japan stores

Alteration charges

Global Brands Operations
Other Operations
Total(Notes)(3)

Percentage
of total (%)

Number of storesat the end of year
(Stores)

Revenue(Millions of yen)

1. “Products supplied to franchise stores” refers to sales of products to franchise stores. “Management andadministrative fees” means royalty income from franchise stores. “Alteration charges” refers to income generated
from embroidery prints and alteration to length of pants.
2. “UNIQLO operations” refers to the selling of UNIQLO brand casual clothing.
3. “Global Brands Operations” consists of Comptoir des Cotonniers operation (selling of Comptoir des Cotonniers
brand clothing), Princesse tam.tam operation (selling of Princesse tam.tam brand clothing), GU operation (sellingof GU brand casual clothing), Theory operation (selling of Theory, Helmut Lang and PLST brand clothing) and J
Brand operation (selling of J BRAND brand clothing).
4. “Other Operations” includes real-estate leasing business, etc.
5. The above amounts do not include consumption taxes, etc.

Sales per unit

Summary

Revenue
Sales per m2
Sales per employee(Notes)Sales floor area (average)
Sales per m (yearly)
2

Number of employees (average)
Sales per employee (yearly)

Year ended
31 August 2015
(From 1 September 2014 to
31 August 2015)

Year-on-year change (%)

1,333,056 million yen

122.0%

1,455,432 m

2110.8%

916 thousand yen

110.1%

51,676 persons

113.1%

25,796 thousand yen

107.9%

1. These figures are solely for UNIQLO Japan Operations and UNIQLO International Operations.
2. Sales figures indicate store sales, and do not include internet sales, products supplied to franchise stores,
management and administrative fees or alteration charges in UNIQLO Japan Operations.
3. “Sales floor area (average)” is calculated based on the number of months each store is in operation.
4. “Number of employees (average)” includes junior employees, part-time workers, contract workers, or temporary
staff seconded from other companies, but does not include entrusted operating officers. Figures for junioremployees and part-time workers are based on a weighted average (eight-hour workday) during the term.
5. The above figures do not include consumption tax, etc.

— 17 —

(4)Purchases
Year ended 31 August 2015
(From 1 September 2014 to 31 August 2015)

By product category

Purchases(Millions of yen)

Year-on-year change(%)

Percentage of total(%)

Men’s clothing

162,801

103.0

19.6

Women’s clothing

191,693

100.6

23.0

Children’s & Baby’s clothing

29,967

126.1

3.6

Goods and other items

9,592

117.3

1.1

394,054

103.5

47.3

307,829

132.3

37.0

701,884

114.4

84.3

130,836

114.5

15.7

832,720

114.4

100.0

Total UNIQLO Japan Operations
UNIQLO International Operations
Total UNIQLO Operations
Global Brands Operations
Total(Notes)1. “UNIQLO operations” covers the selling of UNIQLO brand casual clothing.
2. “Global Brands Operations” consists of Comptoir des Cotonniers operation (selling of Comptoir des Cotonniers
brand clothing), Princesse tam.tam operation (selling of Princesse tam.tam brand clothing), GU operation (sellingof GU brand casual clothing), Theory operation (selling of Theory, Helmut Lang and PLST brand clothing) and J
Brand operation (selling of J BRAND brand clothing).
3. There is business other than the above, mainly real estate leasing, but it does not involve purchasing due to thenature of the activity.
4. The above figures do not include consumption tax, etc.

— 18 —

3. Business Plani)

Promote Global One Management Principles
We are strengthening management functions and cooperation among our regional headquarters in Tokyo, New York,Paris, Shanghai and Singapore to help promote Global One management principles, and unify Group management across
UNIQLO, GU, Theory and other operations. Global One encourages the use of best available global methods, and a selfmotivated, united global approach to any challenge. Our FR Management Innovation Center (FR-MIC) is also working hardto nurture future global corporate leaders and managers.

ii)

Accelerate UNIQLO’s Global Development
We are promoting UNIQLO’s global development by expanding store networks in Greater China, South Korea and otherparts of Asia and Oceania, as well as Europe and the United States. We are boosting awareness of the UNIQLO brand by
opening global flagship stores and regional flagship stores in major cities worldwide, and polishing our global marketing.
Boosting visibility is a top priority in the United States to help turn a profit as soon as possible.

iii)

Strengthen Development of Superior World-class Products
We are establishing dedicated R&D centers in Tokyo, New York, Shanghai, Paris, London and Los Angeles to pick up
emerging global fashion trends early, and incorporate them swiftly into product development across our Group brands.
UNIQLO’s reputation is built upon its ability to offer the very best in basic casualwear, and we intend to continue
providing perfectly finished world-class products that delight our customers and satisfy their casualwear needs.

iv)

Build the Optimum Global Production Network
We are strengthening partnerships with materials manufacturers so we can make even better casualwear items withUNIQLO’s unique highly functional materials. We are building an effective procurement system to help guarantee a stable,mass supply of highquality natural materials. We are also creating an optimum global network of production bases to help
strengthen our manufacturing capabilities, and reduce the lead time on supplementary production orders.

v)

Promote Stable Growth at UNIQLO Japan
We continue to boost the efficiency of our 841-strong UNIQLO Japan store network as at 31 August 2015 through our“scrap and build” policy of replacing smaller stores with larger ones. Over the medium term, we will encourage 50% of
store staff to become local store employees and take an active role in determining community-focused product mixes,
services and marketing. Building a community-based store network is the best way to ensure stable, sustainable growth.

vi)

Transform Industry through Digital Innovation
The spread of internet and mobile phones is fueling drastic changes in distribution. Our state-of-the-art Ariake
distribution center will come on line in spring 2016. The center will serve as a base for our new “digital flagship store,”
which is designed to transform the way we shop and distribute products by seamlessly linking physical and virtual stores.
We seek to revolutionize traditional planning, manufacturing, distribution, sales and services through digital innovation.

vii)

Grow our Global Brands
Our GU fashion casualwear brand has helped carve a new business model for low-priced fashion. We are looking to
expand GU in Japan and Asia, and target sales of ¥300 billion and operating profit of ¥40 billion in the medium term.
We are expanding the Theory fashion label and other Global Brands by maximizing potential Group synergies, and willconsider M&A of apparel brands that can boost Group growth.

viii)

Pursue CSR to Make the World a Better Place
Our corporate social responsibility focuses on projects that enrich people’s lives and society at large, such as the
distribution of secondhand UNIQLO and GU clothing to refugee camps through our All-Product Recycling Initiative, social
business in Bangladesh, monitoring working conditions and environmental impact at our partner factories and fabricmanufacturers, promoting diversity in the workplace and a healthy work-life balance for employees, and the active
employment of people with disabilities.

— 19 —

4.

Risk
Risk factors that investors may regard as potentially having a significant impact on the businesses of the Company and theGroup are stated below. The Company, aware of the possibility that these risks may occur, has planned preventive actions
and thoroughgoing administrative procedures and strives to take appropriate measures when they occur.
The statements with regard to the future are based on management decision and projections made by the Company
based on information available at the time of the publication of this report (27 November 2015).

(1)

Risks specific to management strategy
Risks specific to the management strategy of the Group are as follows:i)Management personnel risk
Our Representative Director, Chairman and CEO Tadashi Yanai and the other members of the Group management
team all play vital roles in the operational areas for which they are responsible. If any of our executives should
become unable to perform his or her duties, or if they should become unable to play these vital roles, this could
have a negative impact on the Group’s earnings.

ii)

Competitive risks
In all the Group’s businesses, our customers are ordinary consumers, who are keenly selective when it comesto products, services and prices, and we are engaged in intense competition with rivals both domesticallyand internationally. If our customers should choose to do business with our competitors, and if our businesscompetitiveness wanes in relative terms, this may have a negative effect on earnings.

iii)

Risk of dependency on production in specified geographic locations
Most products sold through Group companies are manufactured in China, other Asian countries and Turkey. For
this reason, if there is a dramatic political, economic, security, or legal change in countries where we produce, or a
strike by factory personnel or dock workers, or an earthquake, flood or other major natural disaster, this could havean impact on supply of our products. Also, if there is a sharp rise in prices for cotton, cashmere, down or other raw
materials, this could have a negative impact on our earnings.

iv)

Risks of corporate acquisitions
One element of the Group’s management strategy is to expand the business through M&A. Our aim is to maximize
the enterprise value of the Group by pursuing synergies with target companies and businesses, and striving for
optimization of our business portfolio, but there is a possibility of negative impact on results if we are unable toachieve anticipated revenues and effects.

v)

Overseas business risks
As the Group expands its business through M&A, we are steadily expanding our presence overseas. As we open
more stores in more countries, it is expected that our overseas business will make up a higher portion of theGroup’s total revenues. If the goods we sell do not match the market needs and product trends in each country, or
if there are economic fluctuations, social and political turmoil, changes in law, or major currency market volatility,
or other factors that affect our ability to hire and train well-qualified management personnel and local staff who
can smoothly manage our business in each country, this could have a negative impact on earnings.

vi)

Currency risks
Most products sold through the UNIQLO business, which is the Group’s core business, are denominated in US
dollars. For products to be imported to Japan, we hedge our currency risks for about three years ahead, using
forward currency agreements to equalize our exchange rate exposure for imported products and stabilize ourpurchasing costs. If the yen continues to weaken further against the dollar going forward, this could have a negative
impact on earnings at UNIQLO Japan, which is the Group’s core business.

— 20 —

(2)General business risks
In management of the Group and operation of businesses, we are cognizant of risks in several categories:i)

Manufactured product liability risk
If gross quality defects are found in products sold by the Group, such as contamination by hazardous materials or
toxins, this may require global product recalls, or compensation for harm to the health of customers, which may
have a negative impact on earnings, as well as causing damage to customers’ trust.

ii)

Risk of leaks of business secrets, or customer personal information
In the course of doing business, the Group gathers information (including personal information) about customers,
and it also handles trade secrets and other confidential information. Leaks or losses of customer information orconfidential information may require that the information be recovered, necessitating apologies to customers, andpossible payment of compensation for damages, which may have a negative impact on earnings, as well as causing
damage to customers’ trust.

iii)

Risk due to weather
Global warming may cause a trend toward warmer winter weather, which may reduce sales of products sold by thegroup, which could have a negative impact on earnings.

iv)

Risk due to natural disaster
Fires, floods, explosions, building collapse, or other disasters affecting factories that produce or stores that sell theGroup’s products, or in their immediate vicinity, may have a negative impact on the Company’s ability to supply or
to sell its products.

v)

Risks of disputes and litigation
In the event of disputes or litigation between the group and tenants of its stores or others with whom it transacts,
or customers, resolution of such disputes may cost large sums of money, which could have a negative impact onearnings.

vi)

Risk of change in the business climate and consumer trends
Changes in the business climate or consumer trends in countries where the Group carries out business may havethe effect of reducing product sales or increasing inventories, which could have a negative impact on earnings.

5.

Major Contracts
Not applicable.

6.

Research and Development
Not applicable.

— 21 —

7.

Financial Review(1) Significant accounting policies and estimations
The Group’s consolidated financial statements were prepared in accordance with IFRS. In preparing theconsolidated financial statements, estimates were made on a reasonable basis as necessary.
Please see “FINANCIAL INFORMATION 4. Consolidated Financial Statements: Notes to the Consolidated Financial
Statements” for details.
(2)

Analysis of management performance for the year ended 31 August 2015
i)
Revenue and gross profit
Revenue grew to 1.6817 trillion yen, up 298.8 billion yen from the preceding consolidated fiscal year. For adetailed breakdown of revenue, see “Business Results (1) Analysis of Business Results for the year ended 31
August 2015” and “2. Summary of Revenue and Purchasing.”
The main reason behind the growth in revenue was growth in all major segments: a 190.0 billion yen increase
for UNIQLO International, a 64.4 billion yen increase for UNIQLO Japan, and a 44.0 billion yen increase for
Global Brands. In particular, in UNIQLO International business, active addition of new stores in Asia added torevenue, and in our global brand business, expansion of G.U. also added to revenue.
Gross profit grew to 848.5 billion yen, up 148.7 billion yen from the preceding consolidated fiscal year. As
a percentage of revenue, gross profit was 50.5%, down 0.1 percentage point from 50.6% the year before.
The main reasons for this decline were: at UNIQLO Japan, unfavorable weather began in June hurt sales ofsummer apparel, compelling us to offer products at discounted prices and aggressive dispose of inventories.
This caused a decline in gross profit in 4Q.
ii)

Selling, general and administrative expenses, other income, other expenses and operating income
Selling, general and administrative expenses grew to 671.8 billion yen, up 122.6 billion yen from thepreceding consolidated fiscal year. As a percentage of revenue, selling, general and administrative expenses
was 39.9%, up 0.2% from the preceding consolidated fiscal year. The main reasons were an increase inpersonnel costs due to a rise in the number of regional regular employees at UNIQLO Japan, and increases inlogistics costs, outsourcing costs and other miscellaneous costs. Operating income was 164.4 billion yen, up
34.0 billion yen from the preceding consolidated fiscal year.

iii)

Finance income, finance costs and profit before income taxes
Finance income was 17.3 billion yen, up 11.3 billion yen from the preceding consolidated fiscal year. The main
reason for this gain was that, whereas in the previous fiscal year there was a slower decline in the value of theyen, resulting in a 5.1 billion yen foreign exchange gain, in the year ended 31 August 2015, the yen dropped
more precipitously, resulting in a foreign exchange gain of 15 billion yen, an increase of 9.9 billion yen.
As a result, profit before income taxes was 180.6 billion yen, up 45.2 billion yen from the preceding
consolidated fiscal year. As a percentage of revenue, profit before income taxes was 10.7%, up 0.9% from
9.8% the year before.

iv)

Profit attributable to owners of the parent
Income taxes were 63.2 billion yen, or 7.1 billion yen higher than the preceding consolidated fiscal year. As
a result, profit attributable to owners of the parent was 110.0 billion yen, which was 35.4 billion yen higher
than the year before. Basic earnings per share for the year was 1,079.42 yen, up 347.91 yen.

— 22 —

(3)Sources of funding, and analysis of funds liquidity
i)
Total assets
Total assets as at 31 August 2015 were 1,163.7 billion yen, which was an increase of 171.3 billion yen relative
to the end of the preceding consolidated fiscal year. The principal factors were an increase of 58.3 billion yen
in derivative financial assets, an increase of 41.1 billion yen in cash and cash equivalents, and an increase of
36.7 billion yen in inventories.
ii)

Total liabilities
Total liabilities as at 31 August 2015 were 388.9 billion yen, which was an increase of 32.6 billion yen relative
to the end of the preceding consolidated fiscal year. The principal factors were an increase of 9.8 billion yen indeferred tax liabilities, an increase of 8.9 billion yen in provisions, and an increase of 4.0 billion yen in income
taxes payable.

iii)

Total net assets
Equity as at 31 August 2015 was 774.8 billion yen, which was an increase of 138.7 billion yen relative to theend of the preceding consolidated fiscal year. The principal factors were an increase of 76.9 billion yen inretained earnings and an increase of 53.8 billion yen in other components of equity.

iv)

Status of funds
For a discussion of the status of the Group’s funds, see “Management Discussion and Analysis 1. BusinessResults (2) Cash Flow Information”.

— 23 —CAPITAL EXPENDITURE
1. Capital expenditure
UNIQLO Japan opened 36 new stores. UNIQLO International opened 91 stores in the PRC, 4 in Hong Kong, 9 in Taiwan,
26 in South Korea, 5 in Singapore, 4 in Malaysia, 4 in Thailand, 7 in the Philippines, 4 in Indonesia, 5 in Australia,
17 in USA, 2 in France, and 4 in Russia. In addition, Global Brands opened 132 new stores.
As a result, the Group’s capital expenditure amounted to 62.4 billion yen during the year ended 31 August 2015. Key
components of this were 44.6 billion yen for buildings, 8.8 billion yen for lease deposits for stores, 2.4 billion yen for
construction assistance funds and 6.5 billion yen for intangible assets.
The above figures do not include consumption tax, etc.

2.

Important Facilities
As at 31 August 2015, the Group’s important facilities were shown as below:(1)

Information about the Reporting Entity
Area (m2)Company name

FAST RETAILING
CO., LTD.

Type of facility

Location

Head office

Yamaguchi City,
Yamaguchi Prefecture

Commercial
establishments

Fukuoka City,
Chuo-ku, etc.

Others(2)

Capital expenditure (Millions of yen)

Number of
Number ofcommercial
employees
establishments(Persons)(Stores)

Buildings

Deposits/
guarantees

Construction
assistance
funds

1,047

659

—

—

90

1,798

25

—

—

—

296

1,358

—

0

1,655

—

4

29,308.87

111

492

4,627

—

131

5,362

1,209

—

Land

Land

95,255.83

Others

Total

Subsidiaries in Japan
Area (m2)Company nameUNIQLO CO., LTD.

Type of facility

UNIQLO Japan Store

Location

Land

Capital expenditure (Millions of yen)Land

Buildings

Deposits/
guarantees

Construction
assistance
funds

Others

Total

Number of
Number ofcommercial
employees
establishments(Persons)(Stores)

Hokkaido

—

—

458

535

553

230

1,778

333

29

Aomori

—

—

53

138

143

14

350

113

9

Iwate

—

—

77

108

81

44

311

103

8

Miyagi

—

—

162

355

443

150

1,111

249

14

Akita

—

—

36

98

174

35

343

67

7

Yamagata

—

—

189

144

75

93

501

101

8

Fukushima

—

—

69

154

493

63

781

162

10

Ibaraki

—

—

330

518

331

110

1,291

220

17

Tochigi

—

—

211

205

395

74

886

180

14

Gunma

—

—

233

312

302

85

934

168

19

Saitama

—

—

1,026

1,325

603

486

3,442

644

45

Chiba

—

—

647

980

571

315

2,515

489

41

Tokyo

—

—

4,025

11,173

163

817

16,1791,416

100

Kanagawa

—

—

1,357

2,249

464

796

4,867

830

60

Niigata

—

—

149

362

534

142

1,189

204

12

Toyama

—

—

29

95

241

24

390

76

7

Ishikawa

—

—

96

112

307

31

547

154

7

Fukui

—

—

35

65

77

16

193

73

5

Yamanashi

—

—

66

97

208

31

403

63

5

Nagano

—

—

81

139

539

129

890

152

11

Gifu

—

—

238

244

338

133

954

113

11

Shizuoka

—

—

524

460

505

165

1,655

312

24

Aichi

—

—

794

1,169

700

394

3,059

520

44

Mie

—

—

111

168

326

33

640

100

10

— 24 —

Area (m2)Company name

Type of facility

Land

Buildings

Deposits/
guarantees

OthersNumber of
Number ofcommercial
employees
establishments(Persons)(Stores)

Total

—

—

304

271

188

190

954

112

10

Kyoto

—

—

342

469

121

83

1,016

244

20

Osaka

—

—

2,025

3,161

437

555

6,179

863

71

Hyogo

—

—

637

945

326

198

2,106

478

36

Nara

—

—

37

187

168

44

438

99

9

Wakayama

—

—

10

40

41

4

97

35

3

Tottori

—

—

6

70

47

4

127

55

3

Shimane

—

—

1

10

14

1

27

8

1

Okayama

—

—

194

202

184

88

669

164

10

Hiroshima

—

—

398

403

148

87

1,037

235

17

Yamaguchi

2,591.06

450

123

52

60

31

718

48

5

Tokushima

—

—

101

86

26

30

243

60

5

Kagawa

—

—

70

222

18

12

324

87

6

Ehime

—

—

122

165

167

79

535

103

7

Kochi

—

—

75

85

32

44

236

58

4

Fukuoka

—

—

718

809

541

256

2,325

485

32

Saga

—

—

74

70

111

61

318

66

4

Nagasaki

—

—

57

126

252

53

490

104

8

Kumamoto

—

—

154

304

39

70

569

127

10

Oita

—

—

262

227

110

170

770

96

8

Miyazaki

—

—

25

92

58

20

196

78

7

Kagoshima

—

—

114

185

113

60

473

132

11

Okinawa

—

—

168

95

—

89

353

90

7

UNIQLO Japan Stores

2,591.06

450

17,03429,498

11,7886,662

65,434

10,669811

UNIQLO Japan, other

19,960.76

353

49

2,055

1,002

282

3,743

755

—

Total for UNIQLO Japan

22,551.82

803

17,08431,554

12,7906,944

69,177

11,424

811

—

—

—

—

—

3

3

11

3

2,962.14

22

7,110

5,836

3,644

3,719

20,334997

314

27,138.25

658

854

1,277

—

1,514

4,304

1,597

320

—

—

18

308

—

64

390

196

42

UNIQLO CO., LTD.

Co., LTD.

Land

Construction
assistance
funds

Shiga

UNIQLO Japan StoreJ BRAND Japan

Location

Capital expenditure (Millions of yen)

Yamaguchi City,Stores in Japan, etc.

Yamaguchi
Prefecture, etc.
Yamaguchi City,

G.U. CO., LTD.

Stores in Japan, etc.

Yamaguchi
Prefecture, etc.

LINK THEORY JAPANCO., LTD.
Comptoir desCotonniers Japan

Yamaguchi City,Stores in Japan, etc.

Yamaguchi
Prefecture, etc.
Yamaguchi City,Stores in Japan, etc.

Yamaguchi
Prefecture, etc.

— 25 —

(3)Overseas subsidiaries
Area (m2)Capital expenditure (Millions of yen)

Number of
Number ofcommercial
employees
establishments(Persons)(Stores)

Buildings

Deposits/
guarantees

Construction
assistance
funds

—

5,607

496

—

2,715

8,819

435

18

—

—

15,843

3,308

—

4,036

23,187

9,605

359

Seoul Special City,
South Korea

—

—

7,060

4,634

—

2,122

13,816

3,043

155

UNIQLOInternational Store

Moscow,
Russian Federation

—

—

492

151

—

306

950

108

8

UNIQLO TRADING
CO., LTD.

UNIQLOInternational Store

Shanghai, PRC

—

—

1,454

375

—

547

2,376

685

27

FAST RETAILING(SINGAPORE) PTE. Ltd.

UNIQLOInternational Store

Republic of Singapore

—

—

6

34

—

2

44

37

—

UNIQLO (THAILAND)COMPANY LIMITEDUNIQLOInternational Store

Bangkok,
Kingdom of Thailand

—

—

1,989

600

—

594

3,184

753

23

PT. Fast RetailingIndonesia

UNIQLOInternational Store

Jakarta, Indonesia

—

—

618

109

—

601

1,329

833

8

UNIQLO Australia
Pty Ltd.

UNIQLOInternational Store

Melbourne, Australia

—

—

1,391

5

—

600

1,997

373

6

FAST RETAILING(Shanghai) TRADING
CO., LTDUNIQLOInternational Store

Shanghai, China

—

—

2,010

246

—

311

2,568

182

1

Fast RetailingFrance S.A.S.

InternationalStores, etc.

Paris, France

—

—

131

186

—

336

653

455

—

Fast Retailing USA, Inc.

InternationalStores, etc.

New York, U.S.A.

——

14,020

629

—

6,696

21,347

1,854

99

J Brand, Inc.

InternationalStores, etc.

California, U.S.A.

—

—

—

3

15

66

85

224

—

Company name

Type of facility

Location

UNIQLO EUROPE LIMITEDUNIQLOInternational Store

London,United Kingdom—

FAST RETAILING (CHINA)TRADING CO., LTD

UNIQLOInternational Store

Shanghai, PRC

FRL Korea Co., Ltd.

UNIQLOInternational StoreLLC UNIQLO (RUS)(Notes)

Land

Land

OthersTotal

1. Most items in the “Others” category for the Reporting Entity are located at the Tokyo headquarter (Minato-ku) orat the old head office (Ube City, Yamaguchi Prefecture).
2. Monetary amounts are given at book value, not including consumption tax, etc.
3. The number of employees does not include entrusted operating officers, junior employees, part-time workers or
temporary staff seconded from other companies.
4. Assets are not expressed as allocated among business segments.

— 26 —

3.

Plans for new facility construction, old facility removal, etc.
The following are the planned important new facility construction and/or facility removal as at 31 August 2015.

(1)

Important New Facilities
The capital investment plans (new facility construction, expansion) for each segment in the year ended 31 August 2016
(1 September 2015 – 31 August 2016) are as follows.
Capital investment(Millions of yen)Segment

Details of investment

UNIQLO Japan

4,200

New store openings, etc. (approx. 40 stores)

UNIQLO International

36,700New store openings, etc. (approx. 175 stores)

Global brand business

11,800New store openings, etc. (approx. 80 stores)

Others

11,300IT system investments

Total

64,000(Notes)1. It is expected that the Group will be able to meet its funding needs from equity capital, corporate bonds,
borrowings, etc.
2. The above figures do not include consumption tax, etc.

Also, the main new facilities plans included in the plans described above are as follows.
Amount of planned investment
Total(Millions of yen)Amount alreadydisbursed(Millions of yen)

Construction
startConstruction
completion

Planned sales
floor area (m2)

Chicago City
Illinois, U.S.A.

2,190

858

May 2015

October 2015

4,106

—

Antwerp City
Belgium.

747

378

April 2015

October 2015

1,570

—

Company name

Type of facility

Name of business

Location

UNIQLO
Illionois LLC

InternationalStores, etc.

ChicagoN. Michigan AVE

UNIQLO EUROPE
LIMITEDUNIQLOInternationalStore

Meir 67/69,
Antwerp(Notes)(2)

1. It is expected that the Group will be able to meet its funding needs from equity capital.
2. The above figures do not include consumption tax, etc.
3. Assets are not allocated among business segments.

Planned Removals of Important Facilities
There were no planned removals of important facilities as at 31 August 2015.

— 27 —

ReferenceStock Information and Dividend Policy
1.
(1)

Stock Information
Number of Shares(i)

Total number of shares
Type

(ii)

Total number of authorized shares (shares)

Common stock

300,000,000

Total

300,000,000

Shares issued

Type

As at 31 August 2015

Numbers of sharesissued as of submission
date (Shares)(27 November 2015)

Common stock

106,073,656

106,073,656

Total

106,073,656

106,073,656

Name of financial
instrument exchangeof listing, or authorized
financial instruments
firms association
First section of the Tokyo
Stock Exchange andthe Main board of
The Stock Exchange ofHong Kong Limited (Note)―

Details

100 sharesas one unit―

(Note) Hong Kong Depositary Receipts (“HDRs”) 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.

(i)

1st Share subscription rights A type
Decided by resolution of the board of directors on 8 October 2010.

As at 31 August 2015
Number of stock options (Shares)

1,292

As at last day ofmonth before
submission date
(31 October 2015)
Same as left

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

Type of shares to be issued upon exerciseof share subscription rights

Common stock

Same as left

Number of shares to be issued upon exerciseof share subscription rights (Shares)

1,292

Same as left

Amount to be paid upon exerciseof share subscription rights (Yen)

Number of shares allocated times ¥1 exercise
price per share for all shares to be obtained
through exercise of the share subscription rights.

Same as left

Exercise period of share subscription rights

From 8 November 2013 to 7 November 2020

Same as left

Fair value on the grant date andamount of paid-in capital per share upon
exercise of share subscription rights (Yen)

Issue price: 10,624
Paid-in capital: 5,312

Same as left

Exercise conditions of share subscription rights

If a holder of share subscription rights waives theright to acquire shares, the share subscription
rights shall be forfeited and may not be exercised.

Same as left

Matters pertaining to transfer ofshare subscription rights

Any acquisition of share subscription rights bytransfer shall require an authorizing resolution
from the Board of Directors.

Same as left——

(Note)

Same as left

Matters pertaining to substitute payments
Matters pertaining to issuing of share subscription
rights in conjunction with reorganization— 28 —

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 Article 236(1)viii of the Companies Act ofJapan (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 shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights 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 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 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 subject 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 subject share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 29 —

(ii)

1st Share subscription rights B type
Decided by resolution of the board of directors on 8 October 2010.

As at 31 August 2015

Number of stock options (Shares)

14,248

Number of share subscription rights
for treasury stock (Shares)

As at last day ofmonth before
submission date
(31 October 2015)
14,176——

Type of shares to be issued upon exerciseof share subscription rights

Common stock

Number of shares to be issued upon exerciseof share subscription rights (Shares)

14,248Amount to be paid upon exercise ofshare subscription rights (Yen)

Number of shares allocated times ¥1 exercise
price per share for all shares to be obtained
through exercise of the share subscription rights.

Same as left

Exercise period of share subscription rights

From 8 December 2010 to 7 November 2020

Same as left

Fair value on the grant date andamount of paid-in capital per share upon
exercise of share subscription rights (Yen)

Issue price: 10,925
Paid-in capital: 5,463

Same as left

Exercise conditions of share subscription rights

If a holder of share subscription rights waives theright to acquire shares, the share subscription
rights shall be forfeited and may not be exercised.

Same as left

Matters pertaining to transfer ofshare subscription rights

Any acquisition of share subscription rights bytransfer shall require an authorizing resolution
from the Board of Directors.

Same as left——

(Note)

Same as left

Matters pertaining to substitute payments
Matters pertaining to issuing of sharesubscription rights in conjunction
with reorganization— 30 —

Same as left
14,176

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 Article 236(1)viii of the Companies Act ofJapan (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 shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights 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 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 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 subject 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 subject share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 31 —

(iii)

2nd Share subscription rights A type
Decided by resolution of the board of directors on 12 October 2011.

As at 31 August 2015

Number of stock options (Shares)

8,110

As at last day ofmonth before
submission date
(31 October 2015)
6,612

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

Type of shares to be issued upon exerciseof share subscription rights

Common stock

Number of shares to be issued upon exerciseof share subscription rights (Shares)

8,110

Amount to be paid upon exercise ofshare subscription rights (Yen)

Number of shares allocated times ¥1 exercise
price per share for all shares to be obtained
through exercise of the share subscription rights.

Same as left

Exercise period of share subscription rights

From 15 November 2014 to 14 November 2021

Same as left

Fair value on the grant date andamount of paid-in capital per share upon
exercise of share subscription rights (Yen)

Issue price: 12,499
Paid-in capital: 6,250

Same as left

Exercise conditions of share subscription rights

If a holder of share subscription rights waives theright to acquire shares, the share subscription
rights shall be forfeited and may not be exercised.

Same as left

Matters pertaining to transfer ofshare subscription rights

Any acquisition of share subscription rights bytransfer shall require an authorizing resolution
from the Board of Directors.

Same as left——

(Note)

Same as left

Same as left
6,612

Matters pertaining to substitute payments
Matters pertaining to issuing of share subscription
rights in conjunction with reorganization— 32 —

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 Article 236(1)viii of the Companies Act ofJapan (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 shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights 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 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 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 subject 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 subject share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 33 —

(iv)

2nd Share subscription rights B type
Decided by resolution of the board of directors on 12 October 2011.

As at 31 August 2015

Number of stock options (Shares)

11,377

Number of share subscription rights
for treasury stock (Shares)

As at last day ofmonth before
submission date
(31 October 2015)
11,252——Type of shares to be issued upon exerciseof share subscription rights

Common stock

Number of shares to be issued upon exerciseof share subscription rights (Shares)

11,377

Amount to be paid upon exercise ofshare subscription rights (Yen)

Number of shares allocated times ¥1 exercise
price per share for all shares to be obtained
through exercise of the share subscription rights.

Same as left

Exercise period of share subscription rights

From 15 December 2011 to 14 November 2021

Same as left

Fair value on the grant date andamount of paid-in capital per share upon
exercise of share subscription rights (Yen)

Issue price: 12,742
Paid-in capital: 6,371

Same as left

Exercise conditions of share subscription rights

If a holder of share subscription rights waives theright to acquire shares, the share subscription
rights shall be forfeited and may not be exercised.

Same as left

Matters pertaining to transfer ofshare subscription rights

Any acquisition of share subscription rights bytransfer shall require an authorizing resolution
from the Board of Directors.

Same as left——

(Note)

Same as left

Matters pertaining to substitute payments
Matters pertaining to issuing of share subscription
rights in conjunction with reorganization— 34 —

Same as left
11,252

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 Article 236(1)viii of the Companies Act ofJapan (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 shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights 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 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 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 subject 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 subject share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 35 —

(v)3rd Share subscription rights A type
Decided by resolution of the board of directors on 11 October 2012.

As at 31 August 2015

Number of stock options (Shares)

9,700

As at last day ofmonth before
submission date
(31 October 2015)
Same as left

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

Type of shares to be issued upon exerciseof share subscription rights

Common stock

Same as left

Number of shares to be issued upon exerciseof share subscription rights (Shares)

9,700

Same as left

Amount to be paid upon exercise ofshare subscription rights (Yen)

Number of shares allocated times ¥1 exercise
price per share for all shares to be obtained
through exercise of the share subscription rights.

Same as left

Exercise period of share subscription rights

From 13 November 2015 to 12 November 2022

Same as left

Fair value on the grant date andamount of paid-in capital per share upon
exercise of share subscription rights (Yen)

Issue price: 15,222
Paid-in capital: 7,611

Same as left

Exercise conditions of share subscription rights

If a holder of share subscription rights waives theright to acquire shares, the share subscription
rights shall be forfeited and may not be exercised.

Same as left

Matters pertaining to transfer ofshare subscription rights

Any acquisition of share subscription rights bytransfer shall require an authorizing resolution
from the Board of Directors.

Same as left——

(Note)

Same as left

Matters pertaining to substitute payments
Matters pertaining to issuing of share subscription
rights in conjunction with reorganization— 36 —

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 Article 236(1)viii of the Companies Act ofJapan (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 shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights 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 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 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 subject 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 subject share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 37 —

(vi)

3rd Share subscription rights B type
Decided by resolution of the board of directors on 11 October 2012.

As at 31 August 2015

Number of stock options (Shares)

11,914

Number of share subscription rights
for treasury stock (Shares)

As at last day ofmonth before
submission date
(31 October 2015)
11,688——Type of shares to be issued upon exerciseof share subscription rights

Common stock

Number of shares to be issued upon exerciseof share subscription rights (Shares)

11,914

Amount to be paid upon exercise ofshare subscription rights (Yen)

Number of shares allocated times ¥1 exercise
price per share for all shares to be obtained
through exercise of the share subscription rights.

Same as left

Exercise period of share subscription rights

From 13 December 2012 to 12 November 2022

Same as left

Fair value on the grant date andamount of paid-in capital per share upon
exercise of share subscription rights (Yen)

Issue price: 15,569
Paid-in capital: 7,785

Same as left

Exercise conditions of share subscription rights

If a holder of share subscription rights waives theright to acquire shares, the share subscription
rights shall be forfeited and may not be exercised.

Same as left

Matters pertaining to transfer ofshare subscription rights

Any acquisition of share subscription rights bytransfer shall require an authorizing resolution
from the Board of Directors.

Same as left——

(Note)

Same as left

Matters pertaining to substitute payments
Matters pertaining to issuing of share subscription
rights in conjunction with reorganization— 38 —

Same as left
11,688

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 Article 236(1)viii of the Companies Act ofJapan (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 shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights 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 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 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 subject 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 subject share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 39 —

(vii) 4th Share subscription rights A type
Decided by resolution of the board of directors on 10 October 2013.

As at 31 August 2015

Number of stock options (Shares)

6,864

As at last day ofmonth before
submission date
(31 October 2015)
Same as left

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

Type of shares to be issued upon exerciseof share subscription rights

Common stock

Same as left

Number of shares to be issued upon exerciseof share subscription rights (Shares)

6,864

Same as left

Amount to be paid upon exercise ofshare subscription rights (Yen)

Number of shares allocated times ¥1 exercise
price per share for all shares to be obtained
through exercise of the share subscription rights.

Same as left

Exercise period of share subscription rights

From 3 December 2016 to 2 December 2023

Same as left

Fair value on the grant date andamount of paid-in capital per share upon
exercise of share subscription rights (Yen)

Issue price: 37,110
Paid-in capital: 18,555

Same as left

Exercise conditions of share subscription rights

If a holder of share subscription rights waives theright to acquire shares, the share subscription
rights shall be forfeited and may not be exercised.

Same as left

Matters pertaining to transfer ofshare subscription rights

Any acquisition of share subscription rights bytransfer shall require an authorizing resolution
from the Board of Directors.

Same as left——

(Note)

Same as left

Matters pertaining to substitute payments
Matters pertaining to issuing of share subscription
rights in conjunction with reorganization— 40 —

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 Article 236(1)viii of the Companies Act ofJapan (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 shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights 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 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 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 subject 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 subject share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 41 —

(viii) 4th Share subscription rights B type
Decided by resolution of the board of directors on 10 October 2013.

As at 31 August 2015

Number of stock options (Shares)

14,155As at last day ofmonth before
submission date
(31 October 2015)
13,698

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

Type of shares to be issued upon exerciseof share subscription rights

Common stock

Number of shares to be issued upon exerciseof share subscription rights (Shares)

14,155

Amount to be paid upon exercise ofshare subscription rights (Yen)

Number of shares allocated times ¥1 exercise
price per share for all shares to be obtained
through exercise of the share subscription rights.

Same as left

Exercise period of share subscription rights

From 3 January 2014 to 2 December 2023

Same as left

Fair value on the grant date andamount of paid-in capital per share upon
exercise of share subscription rights (Yen)

Issue price: 37,515
Paid-in capital: 18,757

Same as left

Exercise conditions of share subscription rights

If a holder of share subscription rights waives theright to acquire shares, the share subscription
rights shall be forfeited and may not be exercised.

Same as left

Matters pertaining to transfer ofshare subscription rights

Any acquisition of share subscription rights bytransfer shall require an authorizing resolution
from the Board of Directors.

Same as left——

(Note)

Same as left

Matters pertaining to substitute payments
Matters pertaining to issuing of share subscription
rights in conjunction with reorganization— 42 —

Same as left
13,698

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 Article 236(1)viii of the Companies Act ofJapan (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 shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights 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 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 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 subject 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 subject share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 43 —

(ix)

5th Share subscription rights A type
Decided by resolution of the board of directors on 9 October 2014.

As at 31 August 2015

Number of stock options (Shares)

17,608As at last day ofmonth before
submission date
(31 October 2015)
Same as left

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

Type of shares to be issued upon exerciseof share subscription rights

Common stock

Same as left

Number of shares to be issued upon exerciseof share subscription rights (Shares)

17,608Same as left

Amount to be paid upon exercise ofshare subscription rights (Yen)

Number of shares allocated times ¥1 exercise
price per share for all shares to be obtained
through exercise of the share subscription rights.

Same as left

Exercise period of share subscription rights

From 14 November 2017 to 13 November 2024

Same as left

Fair value on the grant date andamount of paid-in capital per share upon
exercise of share subscription rights (Yen)

Issue price: 42,377
Paid-in capital: 21,188

Same as left

Exercise conditions of share subscription rights

If a holder of share subscription rights waives theright to acquire shares, the share subscription
rights shall be forfeited and may not be exercised.

Same as left

Matters pertaining to transfer ofshare subscription rights

Any acquisition of share subscription rights bytransfer shall require an authorizing resolution
from the Board of Directors.

Same as left——

(Note)

Same as left

Matters pertaining to substitute payments
Matters pertaining to issuing of share subscription
rights in conjunction with reorganization— 44 —

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 Article 236(1)viii of the Companies Act ofJapan (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 shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights 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 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 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 subject 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 subject share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 45 —

(x)5th Share subscription rights B type
Decided by resolution of the board of directors on 9 October 2014.

As at 31 August 2015

Number of stock options (Shares)

22,051As at last day ofmonth before
submission date
(31 October 2015)
21,341

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

Type of shares to be issued upon exerciseof share subscription rights

Common stock

Number of shares to be issued upon exerciseof share subscription rights (Shares)

22,051

Amount to be paid upon exercise ofshare subscription rights (Yen)

Number of shares allocated times ¥1 exercise
price per share for all shares to be obtained
through exercise of the share subscription rights.

Same as left

Exercise period of share subscription rights

From 14 December 2014 to 13 November 2024

Same as left

Fair value on the grant date andamount of paid-in capital per share upon
exercise of share subscription rights (Yen)

Issue price: 42,799
Paid-in capital: 21,399

Same as left

Exercise conditions of share subscription rights

If a holder of share subscription rights waives theright to acquire shares, the share subscription
rights shall be forfeited and may not be exercised.

Same as left

Matters pertaining to transfer ofshare subscription rights

Any acquisition of share subscription rights bytransfer shall require an authorizing resolution
from the Board of Directors.

Same as left——

(Note)

Same as left

Matters pertaining to substitute payments
Matters pertaining to issuing of share subscription
rights in conjunction with reorganization— 46 —

Same as left
21,341

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 Article 236(1)viii of the Companies Act ofJapan (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 shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights 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 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 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 subject 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 subject share subscription rights.
9.
for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

(3)

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

(4)

Content of Rights Plan
Not applicable.

— 47 —

(5)Change in Total Number of Shares Issued, Capital Stock, Etc.
Date
31 August 2004

(Note)(6)

Increase/
Balance of total
Increase/
Increase/
Balance ofBalance of
decrease in total
number of
decreasedecrease incapital stock
capital reserve
number of shares shares issued
in capital stock
capital reserve(Millions of yen)
(Millions of yen)issued (Shares)(Shares)(Millions of yen)
(Millions of yen)—
106,073,656
7,000
10,273(7,000)4,578This represents an addition to capital stock from capital reserve approved by resolution of a special meeting of theBoard of Directors on 30 August 2004.

Status, by Type of Holder
As at 31 August 2015
Shares (One unit = 100 shares)
Government,
Financial
municipal
institutions
entities

Class

Foreign corporations, etc.
Traders of
Other
Individuals &financialExcl.
corporations
otherIndividuals
products
individuals

Total

Sharesless than
one unit(shares)Number ofshareholders(persons)

—

71

49

108

645

9

4,908

5,790

—

Number ofshares held
(Trading units)—

267,350

49,60086,922

252,677

14

403,707

1,060,270

46,656Percentage ofshares held (%)

—

25.22

4.68

8.20

23.83

0.00

38.08

100.00—(Notes) 1.
2.

(7)

The 4,128,255 shares of treasury stock include 41,282 units of shares held by individuals and others and 55 shares
held by individuals and others of less than one unit.
Figures shown in the columns “Other corporations” and “Shares less than one unit” include 27 units of shares and84 shares, respectively, in the name of Japan Securities Depository Center, Inc.

Major Shareholders
As at 31 August 2015
Name or trade nameLocation

Number ofshares held(Thousand shares)

Percentage of
total number ofshares issued (%)

Tadashi Yanai

Shibuya-ku, Tokyo

22,987

21.67

The Master Trust Bank of Japan, Ltd.

2-11-3 Hamamatsu-cho, Minato-ku, Tokyo

12,963

12.22

Japan Trustee Services Bank, Ltd.

1-8-11 Harumi, Chuo-ku, Tokyo

9,122

8.60

TTY Management B.V.

Hoogoorddreef 15, 1101BA Amsterdam,
The Netherlands

5,310

5.01

Kazumi Yanai

New York, U.S.A.

4,781

4.51

Koji Yanai

Shibuya-ku, Tokyo

4,780

4.51

Fight & Step Co., Ltd.

1-4-3 Mita, Meguro-ku, Tokyo

4,750

4.48

Trust & Custody Services Bank, Ltd.

1-8-12 Harumi, Chuo-ku, Tokyo

3,640

3.43

MASTERMIND, LLC

1-4-3 Mita, Meguro-ku, Tokyo

3,610

3.40

BNP Paribas Securities (Japan) Limited

1-9-1 Marunouchi, Chiyoda-ku, Tokyo

3,459

3.26

75,404

71.09

Total

―

— 48 —

(Notes) 1.
2.
3.

“Number of shares held” is rounded down to the nearest unit of thousand shares.
The shares held by The Master Trust Bank of Japan, Ltd., Japan Trustee Services Bank, Ltd. and Trust & Custody
Services Bank, Ltd. are all held in conjunction with trust business.
According to the report of large shareholdings (report of change of composition) submitted on 21 January 2015 byNomura Securities Co., Ltd. and the two parties of NOMURA INTERNATIONAL PLC and Nomura Asset Management
Co., Ltd. as joint holders, each party was holding the shares stated below as at 15 January 2015. However, since
the Company has not been able to confirm the number of shares actually held as of the end of the term, theseshareholdings have not been included in the above statement of principal shareholders.
Name or trade nameLocation

Number ofshares held(Thousand shares)

Percentage of
total number ofshares issued (%)

Nomura Securities Co., Ltd.

1-9-1 Nihonbashi, Chuo-ku, Tokyo

147

0.14

NOMURA INTERNATIONAL PLC

1 Angel Lane, London EC4R 3AB,
United Kingdom

322

0.30

Nomura Asset Management Co., Ltd.

1-12-1 Nihonbashi, Chuo-ku, Tokyo

6,898

6.50

4

In addition to the above, 4,128,255 shares of treasury stock are held by the Company (3.89% of the total numberof authorized shares).

(8)

Voting Rights(i)

Shares issued
As at 31 August 2015
Number of shares (shares)

Number of voting rights(number)

Details

Non-voting shares

―

―

―

Shares subject to restrictions on voting
rights (treasury stock)

―

―

―

Shares subject to restrictions on voting
rights (others)

―

―

―

―

―

Class

Shares with full voting rights(treasury stock, etc.)(Shares held astreasury stock)
Common stock

4,128,200

Shares with full voting rights (others)

Common stock

101,898,800

Shares less than one unit

Common stock

46,656―(Notes) 1, 2

106,073,656――

Total number of shares issued
Total number of voting rights of allshareholders(Notes) 1.
2.

―

1,018,988

1,018,988(Note) 1―

The columns for the number of shares of “Shares with full voting rights (others)” and “Shares less than one unit”
include, respectively, 2,700 shares and 84 shares held in the name of Japan Securities Depository Center, Inc.
Common stock in the “Shares less than one unit” column includes 55 shares of treasury stock held by theCompany.

— 49 —

(ii)Treasury StockAs at 31 August 2015

Name or trade name ofholder(Shares held astreasury stock)
FAST RETAILING
CO., LTD.

Holder’s address

717-1 Sayama,
Yamaguchi-City,
Yamaguchi

Total

(9)

Number of shares Number of shares
held in own name held in other’s(Shares)name (Shares)―

Total numberof shares held
(Shares)

Percentage of
total number ofshares issued (%)

4,128,200—

4,128,200

3.89

4,128,200—

4,128,200

3.89

Stock Options Program

The Company has instituted a stock options program that grants rights to acquire new shares pursuant to the Companies Act ofJapan.
1st Share subscription rights A type
Resolution date

8 October 2010

Class and number of recipients (persons)

Employees of the Company
Employees of the Group subsidiaries

Type of shares to be issued upon exercise ofshare subscription rights

As noted in (2) Share Subscription Rights.

Number of shares (shares)

Same as above

Amount to be paid upon exercise ofshare subscription rights (Yen)Same as above

Exercise period of share subscription rights

Same as above

Exercise conditions of share subscription rights

Same as above

Matters pertaining to transfer of share subscription rights

Same as above

Matters pertaining to substitute payments

73—Matters pertaining to issuing of share subscription rights
in conjunction with reorganization

Same as above

1st Share subscription rights B type
Resolution date

8 October 2010

Class and number of recipients (persons)

Employees of the Company
Employees of the Group subsidiaries

Type of shares to be issued upon exercise ofshare subscription rights

As noted in (2) Share Subscription Rights.

Number of shares (shares)

Same as above

Amount to be paid upon exercise ofshare subscription rights (Yen)Same as above

Exercise period of share subscription rights

Same as above

Exercise conditions of share subscription rights

Same as above

Matters pertaining to transfer of share subscription rights

Same as above

Matters pertaining to substitute payments—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization

Same as above— 50 —

266
413

2nd Share subscription rights A type
Resolution date

12 October 2011

Class and number of recipients (persons)

Employees of the Company
Employees of the Group subsidiaries

Type of shares to be issued upon exercise ofshare subscription rights

As noted in (2) Share Subscription Rights.

Number of shares (shares)

Same as above

Amount to be paid upon exercise ofshare subscription rights (Yen)Same as above

Exercise period of share subscription rights

Same as above

Exercise conditions of share subscription rights

Same as above

Matters pertaining to transfer of share subscription rights

Same as above

Matters pertaining to substitute payments

14
4

—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization

Same as above

2nd Share subscription rights B type
Resolution date

12 October 2011

Class and number of recipients (persons)

Employees of the Company
Employees of the Group subsidiaries

Type of shares to be issued upon exercise ofshare subscription rights

As noted in (2) Share Subscription Rights.

Number of shares (shares)

Same as above

Amount to be paid upon exercise ofshare subscription rights (Yen)Same as above

Exercise period of share subscription rights

Same as above

Exercise conditions of share subscription rights

Same as above

Matters pertaining to transfer of share subscription rights

Same as above

Matters pertaining to substitute payments

139
584

—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization

Same as above

3rd Share subscription rights A type
Resolution date

11 October 2012

Class and number of recipients (persons)

Employees of the Company
Employees of the Group subsidiaries

Type of shares to be issued upon exercise ofshare subscription rights

As noted in (2) Share Subscription Rights.

Number of shares (shares)

Same as above

Amount to be paid upon exercise ofshare subscription rights (Yen)Same as above

Exercise period of share subscription rights

Same as above

Exercise conditions of share subscription rights

Same as above

Matters pertaining to transfer of share subscription rights

Same as above

Matters pertaining to substitute payments—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization

Same as above— 51 —

18
8

3rd Share subscription rights B type
Resolution date

11 October 2012

Class and number of recipients (persons)

Employees of the Company
Employees of the Group subsidiaries

Type of shares to be issued upon exercise ofshare subscription rights

As noted in (2) Share Subscription Rights.

Number of shares (shares)

Same as above

Amount to be paid upon exercise ofshare subscription rights (Yen)Same as above

Exercise period of share subscription rights

Same as above

Exercise conditions of share subscription rights

Same as above

Matters pertaining to transfer of share subscription rights

Same as above

Matters pertaining to substitute payments

136
615

—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization

Same as above

4th Share subscription rights A type
Resolution date

10 October 2013

Class and number of recipients (persons)

Employees of the Company
Employees of the Group subsidiaries

Type of shares to be issued upon exercise ofshare subscription rights

As noted in (2) Share Subscription Rights.

Number of shares (shares)

Same as above

Amount to be paid upon exercise ofshare subscription rights (Yen)Same as above

Exercise period of share subscription rights

Same as above

Exercise conditions of share subscription rights

Same as above

Matters pertaining to transfer of share subscription rights

Same as above

Matters pertaining to substitute payments

19
11

—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization

Same as above

4th Share subscription rights B type
Resolution date

10 October 2013

Class and number of recipients (persons)

Employees of the Company
Employees of the Group subsidiaries

Type of shares to be issued upon exercise ofshare subscription rights

As noted in (2) Share Subscription Rights.

Number of shares (shares)

Same as above

Amount to be paid upon exercise ofshare subscription rights (Yen)Same as above

Exercise period of share subscription rights

Same as above

Exercise conditions of share subscription rights

Same as above

Matters pertaining to transfer of share subscription rights

Same as above

Matters pertaining to substitute payments—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization

Same as above— 52 —

180706

5th Share subscription rights A type
Resolution date

9 October 2014

Class and number of recipients (persons)

Employees of the Company
Employees of the Group subsidiaries

Type of shares to be issued upon exercise ofshare subscription rights

As noted in (2) Share Subscription Rights.

Number of shares (shares)

Same as above

Amount to be paid upon exercise ofshare subscription rights (Yen)Same as above

Exercise period of share subscription rights

Same as above

Exercise conditions of share subscription rights

Same as above

Matters pertaining to transfer of share subscription rights

Same as above

Matters pertaining to substitute payments

36
16

—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization

Same as above

5th Share subscription rights B type
Resolution date

9 October 2014

Class and number of recipients (persons)

Employees of the Company
Employees of the Group subsidiaries

Type of shares to be issued upon exercise ofshare subscription rights

As noted in (2) Share Subscription Rights.

Number of shares (shares)

Same as above

Amount to be paid upon exercise ofshare subscription rights (Yen)Same as above

Exercise period of share subscription rights

Same as above

Exercise conditions of share subscription rights

Same as above

Matters pertaining to transfer of share subscription rights

Same as above

Matters pertaining to substitute payments

223
785

—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization

Same as above

6th Share subscription rights A type
Resolution date

8 October 2015

Class and number of recipients (persons)

Employees of the Company
Employees of the Group subsidiaries

Type of shares to be issued upon exercise ofshare subscription rights

Common stock

Number of shares (shares)

2,847 shares

Amount to be paid upon exercise ofshare subscription rights (Yen)

Number of shares allocated times ¥1 exercise price per sharefor all shares to be obtained through exercise of the sharesubscription rights.

Exercise period of share subscription rights

From 13 November 2018
To 12 November 2025

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 Board of Directors.

Matters pertaining to substitute payments—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization(Note)— 53 —

15
19

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 Article 236(1)viii of the Companies Act ofJapan (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 shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights 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 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 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 subject 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 subject share subscription rights.
9.
for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 54 —

6th Share subscription rights B type
Resolution date

8 October 2015

Class and number of recipients (persons)

Employees of the Company
Employees of the Group subsidiaries

Type of shares to be issued upon exercise ofshare subscription rights

Common stock

Number of shares (shares)

25,389 shares

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

Number of shares allocated times ¥1 exercise price per sharefor all shares to be obtained through exercise of the sharesubscription rights.

Exercise period of share subscription rights

From 13 December 2015
To 12 November 2025

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 Board of Directors.

Matters pertaining to substitute payments—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization(Note)— 55 —

247
921

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 Article 236(1)viii of the Companies Act ofJapan (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 shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights 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 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 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 subject 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 subject share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 56 —

6th Share subscription rights C type
Resolution date

8 October 2015

Class and number of recipients (persons)

Employees of the Company

Type of shares to be issued upon exercise ofshare subscription rights

Common stock

Number of shares (shares)

6,072 shares

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

Number of shares allocated times ¥1 exercise price per sharefor all shares to be obtained through exercise of the sharesubscription rights.

Exercise period of share subscription rights

13 November 2018

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 Board of Directors.

Matters pertaining to substitute payments

26—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization(Note)— 57 —

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases 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 entity resulting from the company split), or exchangeor 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 newshare 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 shall be 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 and the like shall include a finalized statement of the type andnumber of shares 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 rights that is issued.
5.
Period during which share subscription rights can be exercised:
The period from the earlier of either the day on which share subscription rights can be exercised as prescribedabove or the day on which a Reorganization takes effect.
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 subject 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 subject share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 58 —

2.

Treasury Stock Information
Types of Shares(1)

Buybacks of common stock under Companies Act of Japan, Article 155-7

Purchases approved by General Meeting of Shareholders
Not applicable.

(2)

Purchases approved by Board of Directors
Not applicable.

(3)

Details of items not based on General Meeting of Shareholders or Board of Directors resolutions
Purchases of shares less than one unit pursuant to Companies Act of Japan, Article 192-1.
Number of shares(shares)Class

Total paid
(thousand yen)

Treasury stock purchased in the fiscal year ended 31 August 2015

228

11,845Purchases of Treasury stock in current year——

(Note)(4)

Treasury stock purchased in the current year does not include shares of less than one unit purchased between 1
November 2015 and the submission date of this report.

Status of treasury stock purchased
Fiscal year ended 31 August 2015
Class

Number of shares(shares)

Total disposal value(thousands of yen)

Current year
Number of shares(shares)

Total disposal value(thousands of yen)

Treasury stock purchases forwhich subscribers were solicited

—

—

—

—

Treasury stock canceled
after purchase

—

—

—

—

Treasury stock transferred due
to mergers, share exchange orcompany split

—

—

—

—

27,018102,696

2,929

11,135

4,128,255—

4,125,326—

Other
Number of Treasury shares held
(Note)

3.

The breakdown of figures for the year ended 31 August 2015 reflects the exercise of 27,018 share subscription rights,
a share disposal value of 102,696 thousand yen. The breakdown of figures for the current year reflects the exercise ofshare subscription rights, and does not include shares of less than one unit purchased between 1 November 2015 andthe submission date of this report.

Dividend Policy

The Company regards the distribution of profits to shareholders as one of its most important considerations. Our basic policy is
to constantly increase earnings and to provide ongoing, appropriate profit distribution based on performance. Our policy is topay dividends that reflect business performance after taking into consideration funds needed to expand business and improve
revenues, and ensure the financial health of the Group.
The basic policy of the Group regarding the payment of dividends from surplus is to pay two dividends annually, an interim
dividend and a year-end dividend. These dividends are decided by the Board of Directors, unless otherwise stipulated by laws
and regulations.

— 59 —

Based on the policy outlined above and the earnings of the consolidated fiscal year ended 31 August 2015, we decided to
pay a year-end dividend of ¥175 per share. Together with the ¥175 interim dividend per share, this will bring the total annual
dividend for the current fiscal year to ¥350 per share. It is our intention to effectively utilize retained earnings and free cash
flow for M&A investment, financial investment and loans to strengthen the operational base of the Group companies.
The payment of an interim dividend under Article 454-5 of the Companies Act of Japan is stipulated by the Company’s Articles
of Incorporation.
Dividends for the Company’s 54th fiscal year are as follows:
Total dividends(Millions of yen)

Resolution date

Dividends per share(Yen)

Board of Directors resolution of 9 April 2015

17,838175

Board of Directors resolution of 4 November 2015

17,840

175

4.
(1)

Share Price Trends
Share price high/low in past 5 fiscal years
Term

50th Year

51st Year

52nd Year

53rd Year54th Year

Accounting period

Year ended
31 August 2011

Year ended
31 August 2012

Year ended
31 August 2013

Year ended
31 August 2014

Year ended
31 August 2015

High (Yen)

15,08019,15044,40045,35061,970Low (Yen)

8,800

11,95015,81030,35032,460(Note)(2)

High/low share price data are from the first section of the Tokyo Stock Exchange.

Share price high/low (monthly) in past 6 months
Month

March 2015

April

May

June

July

AugustHigh (Yen)

47,88050,65051,64057,00061,97061,830Low (Yen)

44,10546,41047,01550,52053,65046,210(Note)

5.

High/low share price data are from the first section of the Tokyo Stock Exchange.

Waiver from compliance with Rule 19B.21

The Hong Kong Stock Exchange has granted us, subject to certain conditions, a waiver from Rule 19B.21 of the Hong Kong Listing
Rules regarding certain requirements for cancellation of HDRs upon a share repurchase. The Company has complied with therelevant conditions in the year ended 31 August 2015.

— 60 —

Board of Directors
Male: 10 persons Female: 1 person (9.1% of officers are female)
Position

Responsibilities

Name

Date of birth

September 1984
June 2001

CEO

Tadashi Yanai

Born 7 February
1949

November 2002
September 2005
November 2005
September 2008
June 2009
November 2011
April 1959
October 2000
April 2003

Director

Toru Hambayashi

Born 7 January
1937

Number ofshares held
(thousand shares)

Joined FAST RETAILING CO., LTD.
Director, FAST RETAILING CO., LTD.
Senior Managing Director, FAST RETAILING
CO., LTD.
President & CEO, FAST RETAILING CO., LTD.
External Director, Softbank Corp. (currently
SOFTBANK GROUP CORP.) (current)
Chairman and CEO, FAST RETAILING CO., LTD.
Chairman, President and CEO, FAST RETAILING
Note 3
CO., LTD. (current)
Chairman, President and CEO, UNIQLO CO.,LTD. (current)
Director and Chairman, GOV RETAILING CO.,LTD. (currently G.U. CO., LTD.) (current)
External Director, Nippon Venture Capital Co.,
Ltd. (current)
Director, LINK THEORY JAPAN CO., LTD.
(current)

22,987

Brief biography
August 1972
September 1972
August 1973

Representative
director, chairman
and president

Term ofofficeJune 2004
November 2005
June 2007
April 2009
June 2011
June 2015— 61 —

Joined Nichimen Company Limited(currently Sojitz Corporation)
President, Nichimen Corporation(currently Sojitz Corporation)
Chairman and Representative Director, Sojitz
Holdings Corporation(currently Sojitz Corporation)
External Auditor, UNITIKA LTD.
External Director, FAST RETAILING CO., LTD.
(current)
External Director, MAEDA CORPORATION(current)
Adviser, The Association for the Promotion ofInternational Trade, Japan (current)
External Director, DAIKYO INCORPORATED(current)
External Director, UNITIKA LTD. (current)

Note 3―

Position

Responsibilities

Name

Date of birth

November 1998

October 2003

June 2005
Director

November 2005
October 2006

April 2009
March 2015
June 2015
April 1980
April 2003
September 2007
November 2007
Director

Toru Murayama

Born 11 June
1954

Number ofshares held
(thousand shares)

Joined NISSAN MOTOR CO.,LTD.
Joined Goldman Sachs and Company,
Headquarters (New York)Managing Director of Goldman Sachs andCompany, Headquarters (New York), and M&A
Advisory of Goldman Sachs Japan Co., Ltd.
Visiting Associate Professor, Graduate
School of International Corporate Strategy,
Hitotsubashi University
External Director, Miraca Holdings Inc.
(current)
Note 3External Director, FAST RETAILING CO., LTD.
(current)
Visiting Professor, Graduate School ofInternational Corporate Strategy,
Hitotsubashi University (current)
Visiting Professor, Waseda Graduate School ofFinance, Accounting and Law (current)
External Auditor, Frontier Management Inc.
(current)
External Director, Hakuhodo DY Holdings Inc.
(current)―

Joined Arthur Andersen & Co.
(currently Accenture Japan Ltd.)
Representative Director and President,
Accenture Japan Ltd.
Director and Chairman, Accenture Japan Ltd.
External Director, FAST RETAILING CO., LTD.
(current)
Visiting Professor, Comprehensive Research
Note 3
Organization, Waseda University
Corporate Advisor, Accenture Japan Ltd.
Professor, Faculty of Science and Engineering,
Waseda University
Advisor, Microsoft Japan Co., Ltd. (current)
President, Office Murayama (current)
Visiting Professor, Faculty of Science andEngineering, Waseda University (current)0

Brief biography
April 1981
June 1989

Born 25 December
Nobumichi Hattori
1957

Term ofofficeApril 2008
September 2009
April 2010
October 2011
January 2013
April 2015

— 62 —

Position

Responsibilities

Name

Date of birth

Masaaki Shintaku

Born 10 September
1954

June 2008
May 2009
November 2009
July 2011
April 1980
April 1991
June 2010

June 2010
September 2010
Director

Takashi Nawa

Born 8 June
1957

Number ofshares held
(thousand shares)

Note 3―Joined Mitsubishi Corporation
Joined McKinsey & Company
Professor, The Graduate School ofInternational Corporate Strategy), Hitotsubashi
University (current)
President, Genesys Partners (current)
Senior Advisor, Boston Consulting Group(current)
Note 3External Director, NEC Capital Solutions(current)
President, Next Smart Lean Co., Ltd. (current)
External Director, FAST RETAILING CO., LTD.
(current)
External Director, DENSO CORPORATION(current)
External Director, Ajinomoto Co., Inc. (current)―

Brief biography
April 1978
December 1991
August 2000
January 2001
April 2008

Director

Term ofofficeJune 2011
September 2012
November 2012
June 2014
June 2015— 63 —

Joined IBM Japan, Ltd.
Joined Oracle Corporation Japan
President & CEO, Oracle Corporation Japan
Executive Vice President, Oracle Corporation
Vice Chairman, Special Olympics Nippon(currently Special Olympics Nippon
Foundation) (current)
Chairman, Oracle Corporation Japan
Advisory Board Member, NTT DOCOMO, INC.
(current)
External Director, FAST RETAILING CO., LTD.
(current)
External Director, COOKPAD Inc. (current)Position

Responsibilities

Name

Date of birth

September 1972
March 1993

April 1997
Akira Tanaka

Born 26 June
1942
August 2003
November 2003
November 2005
March 2006
November 2006
April 2011
April 1983
February 1994
September 1998
September 2005
January 2008

Standing Statutory
AuditorMasaaki Shinjo

Born 28 January
1956

Number ofshares held
(thousand shares)

Joined The Taisei Fire and Marine Insurance
Company Limited (currently Sompo Japan
Nipponkoa Insurance Inc.)
Joined McDonald’s Co. (Japan), Ltd. (currently
McDonald’s Holdings Company (Japan), Ltd.)
Director, McDonald’s Co. (Japan), Ltd.
(currently McDonald’s Holdings Company(Japan), Ltd.)
Deputy President and Director, McDonald’s Co.
(Japan), Ltd. (currently McDonald’s Holdings
Note 4Company (Japan), Ltd.)
Advisor, FAST RETAILING CO., LTD.
Managing Director, FAST RETAILING CO., LTD.
Senior Vice President, UNIQLO CO., LTD.
Senior Vice President, FAST RETAILING
CO., LTD.
Standing Statutory Auditor, FAST RETAILING
CO., LTD. (current)
Representative Director of FR Health Insurance
Organization (current)

3

Joined ASAHIPEN CORPORATION
Joined FAST RETAILING CO., LTD.
Entrusted operating officer, manager ofadministration, FAST RETAILING CO., LTD.
General Manager, Group Auditing, FASTRETAILING CO., LTD.
Director, Onezone Corp
(currently G.U. CO., LTD.)
General Manager, Corporate Administration,
FAST RETAILING CO., LTD.
Statutory Auditor, GOV Retailing Co., Ltd.
(currently G.U. CO., LTD.)
General Manager, Corporate Planning &Management, FAST RETAILING CO., LTD.
Auditor, FAST RETAILING (CHINA) TRADING
CO., LTD. (current)Standing Statutory Auditor, FAST RETAILING
CO., LTD. (current)―

Brief biography
April 1966

Standing Statutory
AuditorTerm ofofficeMarch 2009
September 2009
March 2011
April 2011
November 2012

— 64 —

Note 5

Position

Responsibilities

Name

Date of birth

April 1992
November 1993

Takaharu Yasumoto

Born 10 March
1954

August 2001
June 2003
November 2005
April 2007
June 2010
May 1991
April 1998
June 2006
November 2006
June 2007

AuditorAkira Watanabe

Born 16 February
1947

Number ofshares held
(thousand shares)

Joined Asahi & Co. (currently KPMG AZSA LLC)
Registered as a member of Japanese Instituteof Certified Public Accountants
President, Yasumoto CPA Office (current)
External Statutory Auditor, FAST RETAILING
CO., LTD. (current)
External Statutory Auditor, ASKUL Corporation(current)
Note 5
Statutory Auditor, LINK INTERNATIONAL CO.,LTD. (currently LINK THEORY JAPAN CO., LTD.)
External Statutory Auditor, UNIQLO CO., LTD.
(current)
Guest Professor, Chuo Graduate School ofInternational Accounting
External Statutory Auditor, UBIC, Inc. (current)

4

Chairman, Legislative Council of the Ministryof Justice
Chairman, Yamaichi Securities Co., Ltd. Legal
Responsibility Judging Panel
Non-Executive Director, JAPAN PILECORPORATION
External Statutory Auditor, FAST RETAILING
CO., LTD. (current)
External Director, MAEDA CORPORATION(current)
External Director, MS&AD Insurance Group
Holdings, Inc. (current)
Auditor of Olympus Corp., Chairman of
Liability Investigation Committee
External Director, DUNLOP SPORTS CO. LTD.
(current)
External Statutory Auditor, KADOKAWADWANGO CORPORATION (currently
KADOKAWA CORPORATION) (current)
Non-Executive Director, ASIA PILE HOLDINGSCORPORATION (current)―

Brief biography
November 1978
August 1982

AuditorTerm ofofficeApril 2010
December 2011
March 2013
October 2014

October 2015

— 65 —

Note 4

Position

Responsibilities

Name

Date of birth

April 1999

Keiko Kaneko

Born 11 November
1967

January 2007
April 2007
November 2012
November 2012
June 2013

Total(Notes) 1.
2.
3.
4.
5.

Number ofshares held
(thousand shares)

Joined Mitsubishi Corporation
Registered as a member of Japan Federationof Bar Associations
Joined Anderson, Mori & Tomotsune (AM&T)
law firm
Partner, AM&T (current)
Guest associate professor, Tokyo University
Note 5
Graduate School of Law
External Statutory Auditor, FAST RETAILING
CO., LTD. (current)
External Statutory Auditor, UNIQLO CO., LTD.
(current)
External Statutory Auditor, The Asahi Shimbun
Company (current)―

Brief biography
April 1991
April 1999

AuditorTerm ofoffice22,994

Directors Toru Hambayashi, Nobumichi Hattori, Toru Murayama, Masaaki Shintaku, and Takashi Nawa are External
Directors as provided for in Article 2, Paragraph 15 of the Companies Act.
Takaharu Yasumoto, Akira Watanabe, and Keiko Kaneko are External Statutory Auditors as provided for in Article
2, Paragraph 16 of the Companies Act.
For a one-year term beginning at the conclusion of the Ordinary General Meeting of Shareholders on 26
November 2015.
For a four-year term beginning at the conclusion of the Ordinary General Meeting of Shareholders on 20
November 2014.
For a four-year term beginning at the conclusion of the Ordinary General Meeting of Shareholders on 22
November 2012.

— 66 —

Corporate Governance Report
1.
(1)

Corporate Governance Practice
Basic Thinking on Corporate Governance
To become the world’s no. 1 continuously growing apparel retailer, in harmony with society and the times, and basedon our awareness of the need to bear our responsibility to society, and to deliver to our customers products that will
make them happy (LifeWear and our other clothing products that are made based on new ideas and inspired by what thepeople who will wear them want), the Company strives to raise the level of its corporate governance to strengthen the
independence and the degree of monitoring of the Board of Directors while achieving management that is efficient andtransparent.

(2)

Details of company organization and internal control systems(i)

Details of company organization
The Company has built a corporate governance system consisting of a Board of Directors, a Board of Corporate Auditors,
and various committees. As a key element to strengthen our corporate governance systems, the Company has instituteda system to entrust operating officers (transferring some management authority away from the Board of Directors), to
separate management decision-making from operations performance functions. In addition, the management committee(Monday meeting) meets weekly, to examine tasks assigned to it by the Board of Directors, for the speedy revision ofmanagement strategy and planning.
Also, to enhance the independence of the Board of Directors and strengthen the monitoring function, five of the six
Directors are External Directors, with the CEO acting as chairman of the Board of Directors. The external directors have anabundance of knowledge and experience in corporate management. As the Company’s main decision-making body for the
performance of management and operations, the Board of Directors meets at least once a month to discuss and decideupon important management issues. The external directors all participate actively in Board of Directors discussions, andoffer their opinions without reservations.
Three of the five members of the Board of Corporate Auditors are external statutory auditors. The Standing Statutory
Auditor presides. The external auditors are fully independent, and they have ample knowledge and experience as
attorneys and certified public accountants. Through their participation in the Board of Directors, the external auditors andother auditors are fully aware of the decision-making process of the Board of Directors, and able to fulfill their supervisoryobligations. They also supervise the Directors’ performance of their executive duties through regular conversations with
the Directors, other executive officers, other employees, and auditors of subsidiary corporations. The board of auditors
meets at least once a month to make decisions about audit policies and planning. It meets quarterly to receive briefings
and reports from the accounting auditors.
The various committees complement the work of the Board of Directors. The external directors and external auditors also
serve as members of these committees. The roles and activities of the committees are shown below.
Human Resources Committee
The Human Resources Committee is responsible for the discussion of important organizational changes and adjustments
to the human resources system of the Fast Retailing Group, offering its views and suggestions to the Board of Directors.
CSR Committee
The CSR Committee discusses and determines the direction of the Company’s CSR policies covering matters such asenvironmental protection, social contribution, compliance, and diversity, and creates and publishes CSR reports. The
CSR Committee is chaired by the head of the CSR department, and the members include outside experts and external
statutory auditors as well as executives. The committee held 2 meetings during the year ended 31 August 2015.
Disclosure Committee
The Disclosure Committee, headed by the official in charge of disclosing information to the Tokyo Stock Exchange (TSE),
is responsible for increasing the transparency of the Company’s management, through its aim: “disclosure of informationthat is timely, accurate, fair and easy to understand.” The Committee is responsible for making decisions about the timing
and content of voluntary disclosures to the TSE regarding matters it determines to have potential material impact on theinvestment decisions of shareholders and investors. The committee held 16 meetings during the year ended 31 August
2015.

— 67 —

IT Investment Committee
The IT Investment Committee’s role is to deliberate and decide IT investment policy at the executive level, for the purposeof optimizing the allocation of resources in information systems and advancing the Company’s business. In addition, thiscommittee formulates IT investment budgets and examines the suitability and investment return of specific undertakings
together with external specialized organizations. The committee held 8 meetings during the year ended 31 August 2015.
Code of Conduct Committee
The Code of Conduct Committee is responsible for deliberating and responding to violations of the Fast Retailing Codeof Conduct (“FR Code of Conduct”), as well as advising on the operation of hotlines, and ensuring that the Company’s
executives and employees are fully aware of the requirements of the FR Code of Conduct. The Committee is chaired by
the head of the general administration/employee satisfaction promotion department, and includes auditors, advisors andattorneys.
Business Ethics Committee
The purpose of this committee is to ensure that the Group does not use its advantageous position to exert undue
pressure on vendor companies (production factories, suppliers, etc.). The committee provides advice and counsel todepartments involved, based on surveys of business conditions and suppliers conducted by external organizations. The
Committee is chaired by the head of the CSR department, and includes auditors, advisors and attorneys. The committee
held 12 meetings during the year ended 31 August 2015.
Below is a diagram of our corporate governance system

General Meeting of Shareholders
Elect/dismiss

Board of Auditors

Elect/dismiss(Oversee)

Human Resource Committee

Board of Directors(Three out of ﬁve are external)

CSR Committee(ﬁve out of six are external)

Accounting Auditors(Elect/dismiss)(Elect/dismiss)(Audit)Internal Audit Department(Consult/report)(Report)

Disclosure Committee
IT Investment Committee

Entrusted Group Oﬃcers

Code of Conduct Committee

Chief Executive Oﬃcer

Business Ethics Committee(ii)

Establishing Internal Control Systems
The Company seeks to ensure its business operations are legitimate, fair and efficient by establishing a system of internal
controls that cover the entire Fast Retailing Group (FR Group) and which adheres strictly to the Group’s policies andrules, including the Group’s management principles, the Fast Retailing Way (FR Way) and the Fast Retailing Group Codeof Conduct (FR Code of Conduct). At its meeting on 18 June 2015, the Board decided to revise its basic stance on internal
controls as listed below, to reflect revisions to the Companies Act and other applicable laws and regulations.

A.

Ensuring FR Group Directors’ Duties Comply with Laws, Regulations and Articles of Incorporation
1.
Directors and Group officers (collectively, Directors) of all FR Group companies comply faithfully with the Group’s
management principles, the FR Way, the FR Code of Conduct, and other internal company rules and regulations,and promote strict adherence to corporate ethics and compliance across the Group as a whole. The Directors also
ensure the effectiveness of the Company’s rules and principles by reviewing them regularly and revising themwhen necessary to reflect changes in society and company business activities, and the operation of the FR Code of
Conduct.
2.

The Company appoints either the Group officer overseeing the Legal Department or the head of the Legal
Department as compliance officer, tasked with establishing Company and Group-wide compliance frameworks andresolving compliance-related issues.

— 68 —

3.

B.

C.

D.

The Company promotes fairness and transparency in senior management decision-making by appointing two or
more External Directors to the Board of Directors. Statutory Auditors for the Company or Group subsidiaries may
attend the Board meetings of companies they audit and express timely opinions. Company or Group subsidiary
Directors may engage external lawyers, certified public accountants, etc. to avoid potential violation of laws andimplement preventive measures. If Company or Group subsidiary Directors discover another Director has acted
illegally, they must report immediately to the Statutory Auditors, the President, and the compliance officer.

Ensuring FR Group Employees’ Duties Comply with Laws, Regulations and Articles of Incorporation
1.
Company and Group subsidiary Directors are responsible for establishing a framework to ensure that all Group
employees comply with the management principles, the FR Way, the FR Code of Conduct and other internal
company rules. They are also responsible for training employees in compliance awareness.
2.

The Company has an Internal Audit Department that supervises the FR Group’s internal control systems, and a Legal
Department that oversees compliance.

3.

If Directors of the Company or Group subsidiaries discover a legal or compliance violation, they should report thematter immediately to other Directors. Any serious legal violation should be reported immediately to the Statutory
Auditors, the President and the compliance officer.

4.

The Company has set up an internal reporting system (hotline) for Directors and employees of the Company orGroup subsidiaries to report illegal actions or compliance violations.

5.

The Code of Conduct Committee, which includes external specialists such as lawyers and certified public
accountants, conducts regular reviews of compliance maintenance and the hotline operation, and makes necessary
improvements. If Directors of the Company or Group subsidiaries detect a problem with the hotline operation, theyshould apply to the Code of Conduct Committee and request improvements.

Data Storage and Management Relating to Execution of FR Group Directors’ Duties
The documents listed below relating to Company and Group subsidiary Directors’ duties are retained as proof of decisionmaking and business-execution processes, as stipulated by law, Articles of Incorporation, and Board of Directors andCompany regulations and guidelines on document management and confidential information. These documents are
stored and managed appropriately and can be easily retrieved for reference or inspection during the legally required
storage period.
•

Shareholders meeting minutes and relevant documentation•

Board meeting minutes and relevant documentation•

Minutes of important meetings held by Directors and relevant documentation•

Minutes of meetings held by other important employees and relevant documentation

Managing Risk of Losses to FR Group1.
The Company regularly analyzes risks relating to the Company and Group subsidiaries to identify risks that could,
directly or indirectly, cause financial loss, interrupt or stop business, damage brand images or the credibility of theCompany or FR Group, and manages any risks accordingly.
2.

If unforeseen circumstances should arise, a task force headed by the President or a Director appointed by the
President shall be established to prevent increased losses and minimize damage. For a faster response, the task
force may organize an external advisory team including lawyers and certified public accountants.

— 69 —

E.

Ensuring Efficient Execution of Director Duties
1.
To ensure that the duties of Company and Group subsidiary Directors are performed efficiently, the Company
holds regular monthly meetings of the Board of Directors, which includes a number of External Directors, and holds
ad hoc meetings when necessary. Group subsidiaries which have their own Board of Directors also hold Board
meetings as stipulated by law.
2.

Important matters concerning Company and Group management policy and management strategy shall be
discussed beforehand at the weekly management meeting (Monday Meeting) chaired by the President, anddecisions taken after due deliberation.

3.

The execution of decisions made by the Board of Directors shall be conducted efficiently and appropriately by theoperating offers designated by the Board.

F.

Ensuring Reliable FR Group Financial Reports
Systems have been established to ensure reliable financial reporting of Company and FR Group subsidiary activities, andthe appropriate acquisition, holding and disposal of assets. These activities are closely monitored. The Company has alsoestablished a Disclosure Committee to ensure the Company and Group subsidiaries disclose information in a timely andappropriate fashion.

G.

Ensuring Proper Execution of Corporate Groups Formed by Company and FR Group Subsidiaries
1.
To ensure appropriate operations of FR Group companies, all Group companies are required to uphold the
management principles, the FR Way and the FR Code of Conduct. These principles also underpin the rules andregulations used when establishing entrusted individual Group companies. While respecting their autonomy,
the Company oversees affiliated companies by determining their rules of business and requiring them to refer
important items to the Company for consultation or final determination. The Company monitors affiliates ifnecessary. If Directors of Group subsidiaries discover any legal violations or serious compliance breaches, theyshould report them to the Statutory Auditors, the President and compliance officer.
2.

H.

If Directors of Group subsidiaries consider the Company’s management principles or guidelines violate the law,undermine corporate ethics in a specific country, or create a compliance problem, they shall report to the Internal
Audit Department or the Legal Department. Those departments shall report swiftly to the Board of Statutory
Auditors, the President and the compliance officer, and request appropriate improvements.

Employee Assistants Requested by Statutory Auditors, and ensuring Their Independence and Effectiveness of Statutory
Auditors’ Instruction Towards Employee Assistants
1.
Upon receiving a request from the Board of Statutory Auditors, the Company shall establish rules to determine
which employees assist the Statutory Auditors with their duties, and assign appropriate internal personnel to the
Statutory Auditors or employ external lawyers or certified public accountants. To ensure assistants are independentof the Directors, their performance will be evaluated by Statutory Auditors, and the Board of Statutory Auditors willapprove decisions made by the Board of Directors on their assignment, dismissal, transfer and wages, etc.
2.

Assistants shall report directly to the Statutory Auditors and may not hold concurrent positions that involve theexecution of Company business.

— 70 —

I.

Director and Employee Reporting to Statutory Auditors, and Other Reports
1.
Directors and employees of the Company and Group subsidiaries shall report any important matters that might
impact the Company’s operations or corporate performance to the Statutory Auditors. Irrespective of these rules,
the Statutory Auditors may request reports from Directors or employees of the Company, or Directors, employees
and Statutory Auditors of Group subsidiaries if necessary.
2.

The Company and Group subsidiaries shall uphold the Group’s management principles, the FR Way and the FR
Code of Conduct, amd maintain frameworks for reporting legal violations or breaches of compliance rules to the
Statutory Auditors. If the Statutory Auditors judge there is a problem with this framework, they can inform the
Directors and the Board of Directors and request improvements.

3.

The Company has made it widely known to Directors and employees across the entire FR Group that using reports
submitted to Statutory Auditors to penalize the submitter is forbidden. Submitted reports are protected by strict
information management systems.

4.

Statutory Auditors communicate closely with the accounting auditor, the Internal Audit Department, and Statutory
Auditors at Group companies through regular meetings and information exchange.

J.

Policy on Prepayment or Reimbursement of Expenses for Statutory Auditors
If Statutory Auditors submit requests for prepayment or reimbursement of expenses incurred during the course of theirduties, the Company shall pay invoices or settle debts swiftly, unless it proves the requested expenses or debt were notnecessary to the performance of the Statutory Auditor’s duties.

K.

Other Matters Ensuring Efficient Audits by Statutory Auditors
1.
Statutory Auditors attend Board of Directors meetings and other important meetings to observe the reporting anddiscussion of significant issues. They may voice opinions if necessary.
2.

L.

(iii)

The President meets regularly with Statutory Auditors to consult on pressing issues, ensure appropriate auditing
environments, and exchange views on significant issues highlighted in the auditing process.

Eliminating Anti-social Forces
The Company works to extinguish anti-social forces by incorporating the following content in the FR Code of Conduct, andinforming all executives and employees of its uncompromising stance:
1.

The Company adopts a firm stand against and refuses to engage with anti-social forces. The Company forbids theuse of financial payments to resolve unreasonable claims from anti-social forces.

2.

The Company forbids the use of anti-social forces for Company or individual gain.

Internal audits and audits by auditors
The Company has an Internal Audit Department that is completely independent from business operations departments.
7 specialists are employed as of 31 August 2015. A regular review of this internal administrative system is conducted toensure it remains suitable and effective and the audit of operations performance is also conducted.
In addition, Statutory Auditors are members of the Board of Directors, and they also audit the status of management
performance. The Board of Statutory Auditors described above consists of 2 Full-time Corporate Auditor and 3 external
Statutory Auditors. Its purpose is to receive reports on important matters regarding the Company’s internal audit
department as well as audits by the accounting auditors, discuss these reports, and to cooperate as needed.
Moreover, Auditor Takaharu Yasumoto is a certified public accountant with substantial expertise in the areas of financeand accounting.

— 71 —

(iv)Accounting audits
Name of audit firm

Ernst & Young ShinNihon LLC

Name of CPA, etc.

Number of years ofcontinuing auditing

Designated limited liability
partner and engagement
partner

Shigeyuki Amimoto—(Note)

Designated limited liability
partner and engagement
partner

Shuji Kaneko—(Note)

Designated limited liability
partner and engagement
partner

Yoshihisa Shibayama—(Note)

Based on the audit plan formulated by Ernst & Young ShinNihon LLC, the group of assistants to the auditors consists of 15
CPAs and 15 others.
(Note) Omitted because the number of years of continuing auditing is less than 7 years.
(v)

Functions, roles and selection of external directors and external statutory auditors
The Company has 5 external directors and 3 external statutory auditors.
It is the Company’s expectation that the external directors will keep an eye on the management monitoring function.
From a business perspective, the advice of these individuals, with their abundance of experience and expertise, makes amajor contribution to enhance the value of our enterprise.
It is also expected that external statutory auditors will monitor the performance of the Board of Directors. The Company
receives valuable advice based on their rich experience in a wide variety of fields.
External director Toru Murayama is the president of Office Murayama. The Company currently has a consulting
subcontract with Office Murayama relating to the training of management personnel.
Aside from the above, there are no distinctive interests between the Company and other external directors or external
statutory auditors.
The external directors and external statutory auditors receive reports at the Board of Directors meeting regarding internal
audits, the operation of internal controls, audits by statutory auditors and the results of accounting audits. In addition,
the external statutory auditors have mutual alliances with Internal Audit Department and Accounting Auditors as detailedin (v) Internal audits and audits by auditors.
With regard to the selection of external directors and external statutory auditors, the Company has no specific standards
on independence from the Company, but it is the Company’s responsibility to reflect their advice and counsel in its
decision-making processes in an objective and independent fashion. For many years now, the Company has chosen many
external directors with rich experience as corporate managers in industry, with broad-ranging expertise and discerningviews. In addition, to incorporate wide range of stakeholders’ view in the audits of our business activities, we value boththe independence and the diversity of our external statutory auditors in various fields.

— 72 —

(vi)Items regarding independent directors
The Board of Directors serves by making important decisions, and by overseeing the representative director and otherexecutives in the performance of their duties. The Board of Directors has 6 members, of whom 5 are external directors,
capable of offering objective and highly specialized advice from a wide variety of fields. Among the Company’s external
directors, Toru Hambayashi, Nobumichi Hattori, and Masaaki Shintaku are registered as independent directors with the
TSE.
The role of the statutory auditor is to oversee the directors in the performance of their duties. In addition, statutory
auditors participate as members and as observers in the activities of the Company’s various committees, verifying thesuitability, legality and fairness of the agendas, and providing advice and counsel. The Board of Statutory Auditors iscomprised of 5 members, of whom 3 are external statutory auditors. External statutory auditors Takaharu Yasumoto,
Akira Watanabe and Keiko Kaneko are registered as independent directors with the TSE.

(vii) Outline of External Directors’ limited liability agreement
The Company has concluded agreements with the external directors, external statutory auditors and Ernst & Young
ShinNihon LLC, limiting their liabilities based on provisions in Article 427, Paragraph 1 of the Companies Act, which limits
the liabilities for damages as provided for in Article 423, Paragraph 1 of the Companies Act.
These agreements state that liabilities for damages shall be limited to the higher amount of either 5 million yen or theamount stipulated by law. For Ernst & Young ShinNihon LLC, the limit of liabilities in damages shall be limited to thehighest of the following amounts multiplied by two: the total economic benefits received or to be received from theCompany as remuneration and payment received for performance of duties in each business year during its service as the
Accounting Auditor.
(viii) Limitation of liabilities for directors and statutory auditors
Under the stipulations of the Company’s articles of incorporation and Article 426-1 of the Companies Act, the Company
may exempt, by decision of the Board of Directors, directors (including former directors), and statutory auditors (including
former statutory auditors) from liabilities for actions described in Article 423-1 of the Companies Act, to the extent
allowed by law. The purpose of this is to create an environment where directors and statutory auditors can perform theirduties and pursue their expected roles to the full extent of their abilities.

(3)

Details of executive remuneration
Details of remuneration of the Company’s executives are as follows:

Executive category
Directors (excluding external directors)
Statutory Auditors (excluding external
statutory auditors)
External Directors and External
Statutory Auditors
(i)
(ii)
(iii)

Total amount of
remuneration(million yen)240

Total amount of remuneration,by type (million yen)
Basiccompensation
Bonuses240―

Number of
executives(# of persons)
1

35

35

―

2

80

80

―

8

Directors’ remuneration 290 million yen (of which, external directors
50 million yen)
Statutory Auditors’ remuneration 65 million yen (of which, external statutory auditors
30 million yen)
Total consolidated executive remuneration, by executive, but only for those whose total consolidated executive
remuneration is at least 100 million yen
Representative director Tadashi Yanai
240 million yen

Policies for determining executive compensation
Directors’ compensation is calculated based on various factors including areas of responsibility, liability, earnings
performance. Directors’ compensation has to be approved by the Board of Directors, in accordance with the guidelines
for executive compensation set by the General Meeting of Shareholders. Regarding compensation for statutory auditors,
this is fixed in consultation with the statutory auditors, following the guidelines for statutory auditor compensation set by
the General Meeting of Shareholders.
— 73 —

(4)Other stipulation in the Company’s articles of incorporation(i)

Number of directors
The Company’s articles of incorporation stipulate that the number of directors shall be at least 3 but not more than 10.

(ii)Election criteria for directors
The Company’s articles of incorporation stipulates that the election of directors shall not be based on cumulative voting.
Also, the articles of incorporation stipulates that elections shall be based on a majority vote by shareholders, with at least
one-third of eligible shareholders participating.

(iii)

Procedure for deciding dividends from surplus
Regarding the payment of dividends from surplus pursuant to the Companies Act, Article 459-1, the Company’s articles ofincorporation stipulates that dividends are decided by a resolution of the Board of Directors, and not by a resolution of
the General Meeting of Shareholders, unless otherwise stipulated by law. The authority to decide payments of dividends
from surplus is granted to the Board of Directors to give flexibility in the return of cash to shareholders.

(iv)

Interim dividend
As part of the Company’s efforts to be flexible in the return of cash to shareholders, and pursuant to the stipulations ofCompanies Act Article 454-5, and under the Company’s articles of incorporation, an interim dividend may be paid at theend of February every year by a resolution of the Board of Directors.

(v)

Special resolutions of the General Meeting of Shareholders
Regarding extraordinary resolutions of the General Meeting of Shareholders based on the Companies Act, Article 309—
2, the Company’s articles of incorporation stipulates that these resolutions shall be passed by two-thirds vote of theshareholders, in which at least one-third of the eligible shareholders participate. This easing of the quorum rules for
extraordinary resolutions by the General Meeting of Shareholders is meant to ensure the smooth functioning of theGeneral Meeting of Shareholders.

(5)

Status of shareholding(i)

Investment shares held for purposes other than long-term holding: issues, number of issues and balance sheet total
Number of issues

Balance sheet total

4 issues(ii)

553 million yen

Investment shares held for purposes other than long-term holding: class, issues, number of shares, balance sheet total
and purpose of investment
Year ended 31 August 2014
Special investment shares
Issue(s)Sojitz Corporation

Number of shares

Balance sheet total

1,342,540

Purpose of investment

230 million yen To maintain business relationshipYear ended 31 August 2015
Special investment shares
Issue(s)Sojitz Corporation(iii)

Number of shares

Balance sheet total

1,342,540

Purpose of investment

345 million yen To maintain business relationship

Investment shares held for purpose of long-term holding
Not applicable.

— 74 —

2.

Details of accounting auditors’ remuneration(i)

Details of remuneration for CPAs, etc.
Year ended 31 August 2014

Class

Remuneration
for audit andcertification
duties(Millions of yen)

Year ended 31 August 2015

Remuneration
for duties otherthan audit(Millions of yen)

Remuneration
for audit andcertification duties(Millions of yen)

Remuneration
for duties otherthan audit(Millions of yen)

Reporting Entity

150

47

144

6

Consolidated subsidiaries

17

—

17

—

Total

167

47

161

6

(ii)

Other important details regarding remuneration
Year ended 31 August 2014 (1 September 2013 — 31 August 2014)
The Company’s consolidated subsidiaries paid 163 million yen as remuneration for audit and certification duties, andother duties, to member firms of the Ernst & Young global network.
Year ended 31 August 2015 (1 September 2014 — 31 August 2015)
The Company’s consolidated subsidiaries paid 245 million yen as remuneration for audit and certification duties, andother duties, to member firms of the Ernst & Young global network.

(iii)

Non-auditing services provided by the CPA firm to the reporting entity
Year ended 31 August 2014 (1 September 2013 — 31 August 2014)
The Company pays the Accounting Auditors consideration for the provision of advisory and other services concerning
accounting matters.
Year ended 31 August 2015 (1 September 2014 — 31 August 2015)
The Company pays the Accounting Auditors consideration for the provision of advisory and other services concerning
accounting matters.

(iv)

Policies for determination of accounting audit remuneration
The Company’s articles of incorporation stipulates that remuneration to accounting auditors for audit services isdetermined by the representative director, with the consent of the Board of Statutory Auditors.

— 75 —

FINANCIAL INFORMATION
1. Preparation of consolidated financial statements(1)

Since the Group meets all criteria of a “specific company” defined under Article 1-2 of the Ordinance on Terminology,
Forms and Preparation Methods of Consolidated Financial Statements (Ordinance of Ministry of Finance No.28 of 1976)(hereinafter referred to as the “Rules on Consolidated Financial Statements”), the consolidated financial statements of
the Group were prepared in accordance with International Financial Reporting Standards (“IFRS”) pursuant to Article 93of the Rules on Consolidated Financial Statements.

(2)

The financial statements of the Company were prepared in accordance with the Ordinance on Terminology, Forms
and Preparation Methods of Non-consolidated Financial Statements (Ordinance of Ministry of Finance No.59, 1963)(hereinafter referred to as the “Rules on Non-consolidated Financial Statements”).
The non-consolidated financial statements are prepared in accordance with the provisions set out in Article 127 of theRules on Non-Consolidated Financial Statements, etc., as the Company is categorized as a company that may be allowed
to prepare its financial statements according to special provisions.

(3)

In this report, amounts are rounded down to the nearest million Japanese yen.

2. Audits
The Company’s consolidated financial statements and non-consolidated financial statements for the fiscal year from 1
September 2014 to 31 August 2015 have been audited by Ernst & Young ShinNihon LLC in accordance with Article 193-2-1 of the
Financial Instruments and Exchange Act.

3. Special measures for ensuring the accuracy of our consolidated financial statements and a framework forensuring consolidated financial statements are appropriately prepared in accordance with IFRSThe Company has taken special measures to ensure the appropriateness of our consolidated financial statements and has
established a framework to ensure our consolidated financial statements are appropriately prepared in accordance with IFRS.
Details of these are given below.
(1)

To establish a framework capable of adapting appropriately to changes in accounting standards, the Company has
put efforts to build up our specialist knowledge by appointing employees who are well versed in IFRS, joining the
Accounting Standards Board of Japan and similar organizations, and participating in training programs.

(2)

To ensure that we appropriately prepared consolidated financial statements in accordance with IFRS, we drafted groupguidelines for accounting practices based on IFRS, and have been conducting accounting procedures based on theseguidelines. We regularly obtain standards and press releases published by the International Accounting Standards
Board, study the latest standards and their potential impact on our Company, and update our group guidelines foraccounting practices accordingly.

— 76 —

1. Consolidated Financial Statements(1) Consolidated Financial Statements(i) 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
OthersTotal current assets
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Non-current financial assets
Deferred tax assets
Others

As at 31 August 2014

8,29
9,29
11,29
10
29
12

13
14
14
11,29
18
12

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
OthersTotal current liabilities
Non-current liabilities
Non-current financial liabilities
Provisions
Deferred tax liabilities
Others19,29
29
11,16,29
20
12

11,16,29
20
18
12

As at 31 August 2015

314,049
47,4289,119
223,223
99,125
11,951
12,139355,21244,77722,593260,006
157,490
18,564
15,748717,037

874,394

114,398
26,71546,96871,293
11,257
4,636

129,340
27,16540,99175,940
11,107
4,766

275,270289,311

992,307

1,163,706

185,119
1,012
12,69632,75016,15425,462

181,577100
15,471
36,763
22,61535,714273,196292,242

27,604
7,694
37,387
10,38325,513
10,20347,272
13,66883,06996,658356,265

388,901

10,273

10,273

9,803
525,722(15,790)
88,371

11,524
602,623(15,699)
142,214618,381
17,660750,937
23,867

Total equity

636,041

774,804

Total liabilities and equity

992,307

1,163,706

Total non-current liabilities
Total liabilities
EQUITY
Capital stock
Capital surplus
Retained earnings
Treasury stock, at cost
Other components of equity
Equity attributable to ownersof the parent

21
21
21
21
21

Non-controlling interests— 77 —

(ii) CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Consolidated statement of profit or loss
(Millions of yen)
Year ended
31 August 2014

Notes
Revenue

22

Cost of sales
Gross profit
Selling, general andadministrative expenses
Other income

23
24

Other expenses

15,24Year ended
31 August 2015

1,382,935(683,161)

1,681,781(833,243)

699,773

848,538(549,195)
7,025(27,200)(671,863)
8,782(20,992)
164,463
17,354(1,141)

Operating profit
Finance income

25

Finance costs

25

130,402
6,001
(933)

18

135,470(56,133)

180,676(63,287)

Profit for the year

79,337

117,388

Attributable to:
Owners of the parent

74,546

110,027

Profit before income taxes
Income taxes

Non-controlling interests

4,790

7,360

Profit for the year

79,337

117,388731.51730.81

1,079.42
1,078.08

Earnings per share
Basic (Yen)
Diluted (Yen)27
27— 78 —

Consolidated statement of comprehensive income(Millions of yen)
Year ended
31 August 2014

Notes
Profit for the year
Other comprehensive income
Other comprehensive income not to bereclassified to profit or loss insubsequent periods

Year ended
31 August 2015
79,337

117,388

―

―

26

66

(655)

26

8,402
(5,773)

14,04040,3502,695

53,73582,033

171,124

Non-controlling interests

75,517
6,515

163,871
7,253

Total comprehensive income for the year

82,033

171,124

Other comprehensive income to bereclassified to profit or loss insubsequent periods
Net gain/(loss) on revaluation ofavailable-for-sale investments
Exchange differences on translationof foreign operations
Cash flow hedges
Other comprehensive income,net of taxes

26

Total comprehensive income for the year
Attributable to:
Owners of the parent— 79 —

(iii) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 August 2014
(Millions of yen)
Other components of equity

Equityattributableto owners
Nonof the controlling
Totalparent interests
87,399570,428
19,298

Capitalstock
10,273

Capitalsurplus
6,859

Retainedearnings
481,746

Treasurystock, atcost(15,851)——

74,546

—

—

—

—

—

74,546

4,790

79,337

—

—

—

—

66

6,583

(5,679)

971

971

1,724

2,695

—

—

74,546

—

66

6,583

(5,679)971

75,517

6,515

82,033

21

—

—

—

(25)

—

—

—

—

(25)

—

(25)

21
21
21

—
—
—

471
—
746

—
(30,571)
—

86
—
—

—
—
—

—
—
—

—
—
—

—
—
—

558
(30,571)
746

—
(633)
—

558
(31,204)
746

7,21

—
—

1,726
—

—
—

—
—

—
—

—
—

—
—

—
—

1,726
—

(7,813)
293(6,086)
293

—

2,944

(30,571)

60

—

—

—

—

(27,565)(8,152)(35,718)—
10,273

2,944
9,803

43,975525,72260(15,790)

66
798

6,583
23,035(5,679)64,536971
88,371

47,952
618,381(1,637)
17,66046,314
636,041

Notes
As at 1 September 2013
Net changes during theyear
Comprehensive income
Profit for the year
Other comprehensive
incomeTotal comprehensive
incomeTransactions with theownersAcquisition oftreasury stock
Disposal of treasury
stock
Dividends
Share-based payments
Acquisition of
non-controllinginterests
OthersTotal transactions withthe owners
Total net changes
during the year
As at 31 August 2014

Foreign
Available- currency Cash-flow
for-sale translation
hedge
reserve
reserve
reserve731
16,452
70,21526— 80 —

Total
equity589,726

For the year ended 31 August 2015
(Millions of yen)
Other components of equity

Equityattributableto owners
Nonof the controlling
Totalparent interests
88,371
618,381
17,660Capitalstock
10,273

Capitalsurplus9,803

Retainedearnings
525,722——

110,027

—

—

—

—

—

110,027

7,360

117,388

—

—

—

—

(655)

14,81539,68353,84353,843(107)

53,735——110,027—(655)

14,81539,68353,843

163,871

7,253

171,124

21

—

—

—

(11)

—

—

—

—

(11)

—

(11)

21
21
21

—
—
—
—

700
—
1,019
—

—
(33,126)
—
—

102
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

803
(33,126)
1,019——(1,226)—180803(34,352)
1,019
180

—

1,720

(33,126)

90

—

—

—

—

(31,315)(1,046)(32,361)—
10,273

1,720
11,52476,901
602,62390(15,699)

(655)
143

14,81537,851

39,683
104,219

53,843
142,214132,556
750,937

6,207
23,867

138,763774,804

Notes
As at 1 September 2014
Net changes during theyear
Comprehensive income
Profit for the year
Other comprehensive
incomeTotal comprehensive
incomeTransactions with theownersAcquisition oftreasury stock
Disposal of treasury
stock
Dividends
Share-based payments
OthersTotal transactions withthe owners
Total net changes
during the year
As at 31 August 2015

Foreign
Treasury Available- currency Cash-flow
stock, at for-sale translation
hedge
cost reserve
reserve
reserve(15,790)798
23,03564,53626— 81 —

Total
equity636,041

(4) CONSOLIDATED STATEMENT OF CASH FLOWS(Millions of yen)
Year ended
31 August 2014
Profit before income taxes
Depreciation and amortization
Impairment losses
Increase/(decrease) in allowance for
doubtful accounts
Increase/(decrease) in other provisions
Interest and dividend income
Interest expenses
Foreign exchange losses/(gains)
Losses on retirement of property, plant andequipment
Decrease/(increase) in trade andother receivables
Decrease/(increase) in inventories
Increase/(decrease) in trade andother payables
Decrease/(increase) in other assets
Increase/(decrease) in other liabilities
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 withmaturity over 3 months
Purchases of property, plant andequipment
Proceeds from sales of property, plant andequipment
Purchases of intangible assets
Payments for lease and guarantee deposits
Proceeds from collection of lease andguarantee deposits
Increase in construction assistance fundreceivables
Decrease in construction assistance fundreceivables
Others, net
Net cash used in investing activities— 82 —

Year ended
31 August 2015

135,470
30,80823,960180,676
37,75816,146

(24)
2,703
(897)
933
(5,104)372
5,096(1,477)1,137(15,084)

391

2,479

(7,489)(45,627)

3,977(29,295)

10,420(6,552)
25,9581,265(18,611)(1,900)22,8391,339

166,216896(938)(65,534)
9,954

205,456
1,477(1,155)(84,728)
13,881

110,595

134,931(2,156)(16,173)(41,414)(44,663)

1,399(7,525)(6,982)261(6,503)(8,849)

841

3,442

(2,892)(2,445)

1,895
511

1,895
(109)

(56,323)(73,145)(Millions of yen)
Year ended 31
August 2014

Notes
Net increase/(decrease) in short-termloans payable
Repayment of long-term loans payable
Cash dividends paid
Cash dividends paid to non-controllinginterests
Repayments of lease obligations
Acquisition of non-controlling interests862(3,826)(30,574)

1,814(5,090)(33,127)(633)(3,656)(6,026)(205)(1,226)(4,587)―431(44,060)(41,784)

7,129

21,162

17,34041,162

8

296,708

314,0498

314,049355,212

21

Others, net
Net cash used in financing activities
Effect of exchange rate changes on cash
and cash equivalents
Net increase/(decrease) in cash andcash equivalents
Cash and cash equivalents
at beginning of year
CASH AND CASH EQUIVALENTS
AT END OF YEAR

Year ended 31
August 2015

— 83 —

Notes to the Consolidated Financial Statements
1. Reporting Entity
FAST RETAILING CO., LTD. (the “Company”) is a company incorporated in Japan. The locations of the registered headquarters
and principal offices of the Company are disclosed at 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), GU business and Theory business (appareldesigning and retail business in Japan and overseas), etc.
2. Basis of Preparation(1) Compliance with IFRSThe consolidated financial statements of the Group have been prepared in compliance with International Financial
Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”).
The Group meets all criteria of a “specified company” defined under Article 1-2 of the Ordinance on Terminology, Forms,
and Preparation Methods of Consolidated Financial Statements, and accordingly applies Article 93 of the Ordinance on
Terminology, Forms, and Preparation Methods of Consolidated Financial Statements.
(2) Approval of the Consolidated Financial Statements
The consolidated financial statements were approved on 27 November 2015 by Tadashi Yanai, Chairman, President andCEO, and Takeshi Okazaki, Group Senior Vice President and CFO.
(3) Basis of Measurement
The consolidated financial statements have been prepared on an historical cost basis, except for certain assets, liabilities,
and financial instruments which are measured at fair value as indicated in “3. Significant Accounting Policies”.
(4) Functional Currency and Presentation Currency
The presentation currency for the Group’s consolidated financial statements is the Japanese yen (in units of millions ofyen), which is also the Company’s functional currency. All values are rounded down to the nearest million yen, except whenotherwise indicated.

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(5) Use of Estimates and Judgments
The preparation of the consolidated financial statements in accordance with IFRS requires management to makejudgments, estimates and assumptions that affect the application of accounting policies and the reported 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.
Information about important estimation and judgments that have significant effects on the amounts recognized in the
consolidated financial statements is as follows:
•
•
•
•
•
•
•
•
•

Useful lives of property, plant and equipment, and intangible assets (Notes 13, 14)
Recoverable amounts from cash-generating units for impairment test (Note 15)
Recoverability of deferred tax assets (Note 18)
Valuation of inventories (Note 10)
Recoverability of trade and other receivables (Notes 9, 29)
Accounting treatment and valuation of provisions (Note 20)
Fair value measurement of financial instruments (Note 29)
Fair value unit price for share-based payments (Note 28)
Probability of outflow of future economic benefits from contingent liabilities (Note 33)

3. Significant Accounting Policies(1) Basis of Consolidation“Subsidiaries” refers to enterprises that are controlled by the Company (including businesses established by theCompany). The Group controls enterprises where it is exposed to variable returns arising from its involvement in thoseenterprises or when the Group has rights to variable returns in those enterprises and is able to have an impact on the saidvariable returns through its power over those enterprises. A subsidiary’s financial statements are incorporated into theGroup’s consolidated financial statements from the date on which control begins until the date control ends.
The subsidiaries adopted consistent accounting policies as the Company in the preparation of their financial statements.
All intra-group balances, transactions within the Group as well as unrealized profit and loss resulting from transactions
within the Group are eliminated at the time of preparation of the consolidated financial statements.
The reporting date for FAST RETAILING (CHINA) TRADING CO., LTD., Theory Shanghai International Trading Co.,
Ltd., UNIQLO TRADING CO., LTD., Fast Retailing (Shanghai) Business Management Consulting Co., Ltd., FAST RETAILING(SHANGHAI) TRADING CO., LTD., GU (Shanghai) Trading Co., Ltd., Comptoir des Cotonniers (Shanghai) Trading Co., Ltd.,PRINCESSE TAM.TAM (SHANGHAI) TRADING CO., LTD. and LLC UNIQLO (RUS) is 31 December. The management accountsof these subsidiaries are used for the Group’s consolidation purpose. The financial statements of other subsidiaries areprepared using the same reporting period as the parent company.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
Any difference between the adjustment to the non-controlling interest and the fair value of the consideration received isrecognized directly in equity as interests attributable to owners of the parent.
Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to thenon-controlling interests, even if this results in the non-controlling interests having a deficit balance.
The number of consolidated subsidiaries as at 31 August 2015 is 119.

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(2) Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as theaggregation of the fair value at the acquisition date of the assets transferred, liabilities assumed and equity instruments
issued by the Company in exchange for control of the acquired company.
If the cost of an acquisition exceeds the fair value of the identifiable assets and liabilities, it is recorded as goodwill on
the consolidated statement of financial position. If it is below the fair value, this is immediately recorded as income on the
consolidated statement of profit or loss.
Acquisition-related costs are expensed as incurred. Additional acquisitions of non-controlling interests are accounted foras equity transactions, and no goodwill is recognized.
Contingent liabilities of acquired companies are recognized in a business combination only if they are present obligations,were incurred as a result of a past event, and their fair value can be reliably measured.
For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fairvalue or at the proportionate share of the acquiree’s identifiable net assets.
If the initial accounting for a business combination is incomplete by the reporting date of the fiscal year in which thebusiness combination occurs, the items for which the acquisition accounting is incomplete are reported using provisionalamounts. Those amounts provisionally recognized on the acquisition date are retrospectively adjusted to reflect new
information if the acquisitions took place during a period (measurement period) when it is believed that, had facts andcircumstances that existed at the acquisition date been known at that time, they would have affected the amounts
recognized on that date. Additional assets and liabilities are recognized if new information results in the recognition of
additional assets or liabilities. The measurement period should be within one year.
(3) Foreign Currencies(i) Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot
rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates at
each reporting date. Differences arising on settlement or translation of monetary items are recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translatedusing the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non—monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of theitem (i.e., translation differences on items whose fair value gain or loss is recognized in other comprehensive income or
profit or loss are also recognized in other comprehensive income or profit or loss, respectively).
(ii) Foreign Operations
On consolidation, the assets and liabilities of foreign operations are translated into Japanese yen at the rate of exchange
prevailing at each reporting date and their income statements are translated at average exchange rates during the period.
The exchange differences arising on translation for consolidation are recognized in other comprehensive income. On disposalof a foreign operation, the component of other comprehensive income relating to that particular foreign operation isrecognized in profit or loss.

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(4) Financial Instruments
Derivative financial instruments and hedge accounting
The Group uses derivative financial instruments, such as forward currency contracts, to hedge its foreign currency risks.
Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract isentered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value ispositive and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for theeffective portion of cash flow hedges, which is recognized in other comprehensive income and later reclassified to profit orloss when the hedge item affects profit or loss.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which
the Group wishes to apply hedge accounting and the risk management objectives and strategy for undertaking the hedge.
The documentation includes identification of the specific hedging instrument, the hedged item or transaction, the natureof the risk being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure tochanges in the hedged item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly
effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine thatthey actually have been highly effective throughout the financial reporting periods for which they were designated.
The Group has designated forward currency contracts as cash flow hedges and are accounted for as described below:
Cash flow hedges
When derivatives are designated as a hedging instrument to hedge the exposure to variability in cash flows that are
attributable to a particular risk associated with recognized assets or liabilities or highly probable forecast transactions
which could affect profit or loss, the effective portion of changes in the fair value of the derivatives is recognized in othercomprehensive income and included in “Cash flow hedges” in other components of equity. The balances of cash flow hedges
are subtracted from “other comprehensive income” on the consolidated statement of comprehensive income for the same
period when the hedged cash flows would affect profit or loss, and reclassified as profit or loss in the same line items as
the hedging instruments. The gain or loss relating to the ineffective portion of changes in the fair value of the derivatives isrecognized immediately in profit or loss. When a hedged item gives rise to the recognition of a non-financial asset or nonfinancial liability, the amount recognized as other comprehensive income is treated as an adjustment to the initial carrying
amount of the non-financial asset or liability.
If the forecast transaction or firm commitment is no longer expected to occur, cumulative profit or loss amounts
previously recognized in equity through other comprehensive income are reclassified as profits or losses. If the hedging
instrument expires or is sold, is terminated or exercised without replacement or rollover, or if its designation as a hedge isrevoked, the amounts previously recognized in equity through other comprehensive income are recorded as equity until theforecast transaction occurs or firm commitment is met.
Non-derivative financial instruments(i) Initial recognition and measurement
All purchases and sales of financial assets that take place through ordinary methods (purchase or sale of a financial asset
requiring delivery within the time frame established by market regulation or convention) are recognized or derecognized,
and measured at the initial fair value plus transaction costs, on the trade date.
Financial assets are classified, at initial recognition, into the following three categories:• Financial assets at fair value through profit or loss
• Loans and receivables• Available-for-sale financial assets
The classification depends on the nature and purpose of the financial assets and is determined at the time of initialrecognition.

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(ii) Financial assets at fair value through profit or loss
Financial assets are classified as “financial assets at fair value through profit or loss” if they are held for trading or if they
are designated as financial assets at fair value through profit or loss.
Financial assets other than financial assets held for trading may be designated as “financial assets at fair value throughprofit or loss” at initial recognition if any of the following applies:(a) If such designation eliminates or significantly reduces a measurement or recognition inconsistency (“accounting
mismatch”) is likely to arise;(b) If the financial assets are part of a “group of financial assets or financial liabilities (or both)”, which are managed andhave their performance evaluated on a fair value basis, in accordance with the Group’s documented risk management orinvestment strategy, and information about the grouping is provided internally on a fair value basis; or(c) If the contract contains at least one embedded derivative (IAS 39 allows the entire hybrid (combined) contract (assets
or liabilities) to be designated as a “financial assets at fair value through profit or loss”), unless they are designated as aneffective hedging instrument.
Financial assets at fair value through profit or loss are carried in the consolidated statement of financial position atfair value with net changes in fair value presented as finance costs (negative net changes in fair value) or finance income(positive net changes in fair value) in the consolidated statement of profit or loss. Recognized profits or losses, including theabove, are recognized in the consolidated statement of profit or loss as dividend income, interest income or gain or loss onchanges in fair value. Fair value is determined using the method described in “29. Financial Instruments”.
(iii) Loans and receivables
Trade receivables, loans, and other receivables that are not quoted in an active market are classified as “loans andreceivables”. After initial measurement, such financial assets are subsequently measured at amortized cost using theeffective interest rate (“EIR”) method, less impairment. The EIR amortization is included in finance income in the statementof profit or loss.
(iv) Available-for-sale financial assets
Any non-derivative financial assets classified as “available-for-sale financial assets” are those that are neither classified as“financial assets at fair value through profit or loss”, nor “loans and receivables”, or those that are designated as “availablefor-sale financial assets”.
Available-for-sale listed equity securities that are traded on a market are measured using quoted market prices. Unlisted
equity securities are measured at fair value using reasonable methods. Fair value is determined using the method describedin “29. Financial Instruments”. Profits or losses arising from changes in fair value are recognized as other comprehensive
income. Impairment losses or foreign currency gains or losses associated with monetary assets are treated as exceptions andrecognized in profit or loss.
When available-for-sale financial assets are derecognized, or when an impairment loss is recognized, the cumulative
profits or losses that have been recognized as other comprehensive income up to that time are reclassified to the profit orloss for the period.
Dividends associated with available-for-sale financial assets are recognized in profit or loss when the Group’s right toreceive dividends is established. The fair value of available-for-sale financial assets denominated in foreign currencies isdetermined in that foreign currency and translated at the exchange rate prevailing at each reporting date. The effects ofchanges in exchange rates on foreign currencies denominated monetary assets is recognized in foreign exchange gains orlosses, while the effect of changes in exchange rates on other foreign currencies denominated available-for-sale financial
assets is recognized in other comprehensive income.

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(v) Impairment of financial assets
Those financial assets other than “Financial assets at fair value through profit or loss”, pursuant to IAS 39, are evaluatedat each reporting date to determine whether there is objective evidence of impairment. If there is objective evidence that
one or more events having a negative impact on the estimated future cash flows has occurred subsequent to the initialrecognition of the financial asset, an impairment loss is recognized.
For listed and unlisted equity securities classified as “available-for-sale financial assets”, a significant or prolonged decline
in the fair value of the investment below its historical cost is considered to be objective evidence of impairment. For all otherfinancial assets, including redeemable securities and finance lease receivables classified as available-for-sale financial assets,
objective evidence of impairment may include the following:(a) Significant deterioration in the financial condition of the issuer or counterparty;(b) Default or delinquency in interest or principal payments; or(c) Probability that the issuer will enter bankruptcy or financial reorganization.
Certain categories of financial assets, such as trade receivables, are assessed for impairment on a collective basis even if
they are not impaired individually. Objective evidence of impairment for a portfolio of receivables could include changes innational or local economic conditions that correlate with default on receivables or an increase in the number of delinquent
payments in the portfolio past the average credit period.
For financial assets carried at amortized cost, the amount of the impairment loss is the difference between the asset’s
carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original EIR.
An asset’s carrying amount is reduced directly by the impairment loss amount, with the exception of trade receivables
where the impairment loss is posted by using the allowance for doubtful accounts. An allowance for doubtful accounts isestablished when it is determined that receivables are uncollectable, including receivables for which the due date has beenchanged, and the allowance for doubtful accounts is reduced if the receivables are subsequently abandoned or collected.
Changes in the allowance for doubtful accounts are recognized in profit or loss except for decreases due to use. Except
for available-for-sale financial assets, if, in a subsequent period, the amount of the impairment loss decreases and thedecrease can be related objectively to an event occurring after the impairment was recognized, the previously recognizedimpairment loss is reversed through profit or loss to the extent that the carrying amount of the investment after reversing
the impairment loss does not exceed what the amortized cost would have been had the impairment not been recognized.
For available-for-sale financial assets, impairment losses previously recognized in profit or loss cannot be reversed
through profit or loss. Any change in fair values after an impairment loss is recognized through other comprehensive income
as long as this does not give rise to an additional impairment loss.
(vi) Derecognition of financial assets
The Group derecognizes a financial asset only if the contractual rights to the cash flows from the financial asset expire
or if the Group has transferred almost all risks and rewards of ownership. If the Group maintains control of the transferredfinancial asset, it recognizes the asset and associated liabilities to the extent of its continuing involvement.
Non-derivative equity instruments and financial liabilities(i) Equity instruments (stocks)
An equity instrument is a contract that evidences ownership of a residual interest in the assets of a company after
deducting all of its liabilities.
(ii) Financial liabilities
Financial liabilities are classified as either “financial liabilities at fair value through profit or loss” or “other financial
liabilities”.

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(iii) Financial liabilities at fair value through profit or loss
Financial liabilities are classified as “financial liabilities at fair value through profit or loss” if they are held for trading or ifthey are designated as financial liabilities at fair value through profit or loss.
A financial liability is classified as being held for trading purposes if any of the following applies:(a) It is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;(b) On initial recognition, it is part of a portfolio of identified financial instruments that are managed together and forwhich there is evidence of a recent actual pattern of short-term profit-taking; or(c) It is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging
instrument).
Financial liabilities other than financial liabilities held for trading may be designated as “financial liabilities at fair value
through profit or loss” at initial recognition if any of the following applies:(a) If such designation eliminates or significantly reduces a measurement or recognition inconsistency (“accounting
mismatch”) is likely to arise;(b) If the financial liabilities are part of a “group of financial assets or financial liabilities (or both)” which are managed
and have their performance evaluated on a fair value basis, in accordance with the Group’s documented risk management orinvestment strategy, and information about the grouping is provided internally on a fair value basis; or(c) If the contract contains at least one embedded derivative (IAS 39 allows the entire hybrid (combined) contract (assets
and liabilities) to be designated as “financial liabilities at fair value through profit or loss”).
Financial liabilities designated as “financial liabilities at fair value through profit or loss” are measured at fair value,with any changes recognized in profit or loss. Recognized profits and losses, including the above, are recognized in the
consolidated statement of profit or loss as interest expenses or gain or loss on change in fair value. Fair value is determinedusing the method described in “29. Financial Instruments”.
(iv) Other financial liabilities
Other financial liabilities, including loans payable, are initially measured at fair value, net of directly attributabletransaction costs. Subsequent to initial recognition, other financial liabilities are measured at amortized cost using the EIR
method, and interest expenses are recognized using the EIR method.
(v) Derecognition of financial liabilities
The Group derecognizes a financial liability when it is extinguished, that is, when the obligation specified in the contract iseither discharged, cancelled or expires.
(vi) Fair value of financial instruments
The fair value of financial instruments that are traded on an active financial market at each reporting date are based onquoted market prices and dealer prices.
The fair value of financial instruments for which there is no active market are calculated using appropriate valuation
techniques.
(vii) Offsetting financial Instruments
Financial assets and financial liabilities are only offset when there is an enforceable legal right to offset the recognizedamounts and when there is an intention to either settle on a net basis, or realize the asset and settle the liability
simultaneously; and the net amount is reported on the consolidated statement of financial position.

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(5) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, bank deposits available for withdrawal on demand, and short-term,
highly liquid investments due with a maturity of three months of the acquisition date or less that are readily convertible tocash and which are subject to an insignificant risk of changes in value.
(6) Inventories
Inventories are valued at the lower of cost and net realizable value; the weighted average method is principally used
to determine cost. Net realizable value is based on the estimated selling price in the ordinary course of business less any
estimated costs to be incurred to sell the goods.
(7) Property, plant and equipment (other than leased assets)(i) Recognition and measurement
Property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment
losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costsof bringing the asset to its working condition and location for its intended use, the initial estimate of the costs of dismantling
and removing the item and restoring the site on which it is located.
(ii) Depreciation
Assets other than land and construction in progress, are depreciated using the straight-line method over the estimateduseful lives shown below:
Buildings and structures
Furniture, equipment and vehicles

3–50 years
5 years

The useful lives, residual values, and depreciation methods are reviewed at each reporting date, with the effect of any
changes in estimates being accounted for on a prospective basis.
(8) Goodwill and intangible assets (other than leased assets)(i) Goodwill
Goodwill is stated at the carrying amount, which is the acquisition cost after deducting accumulated impairment losses.
Goodwill represents the excess amount of the historical cost of an interest acquired by the Group over the net amount of thefair value of the identifiable assets acquired and liabilities assumed.
Goodwill is not amortized but is allocated to identifiable cash-generating units based on the geographical region wherebusiness takes place and the type of business conducted, and then tested for impairment each year or when there is anindication that it may be impaired. Impairment losses on goodwill are recognized in the consolidated statement of profit orloss and cannot be subsequently reversed in future period.
(ii) Intangible assets
Intangible assets are measured at cost, with any accumulated amortization and accumulated impairment losses deductedfrom the historical cost to arrive at the stated carrying amount.
Intangible assets acquired separately are measured at cost at initial recognition, and the cost of intangible assets acquired
in a business combination is measured as fair value at the acquisition date.
For internally generated intangible assets, the entire amount of the expenditure is recorded as an expense in the period inwhich it arises, except for development expenses that meet the requirements for capitalization.
Intangible assets with finite useful lives are amortized over their respective estimated useful lives using the straight-line
method, and they are tested for impairment when there is an indication that they may be impaired. The estimated useful life
and amortization method for an intangible asset with a finite useful life is reviewed at the end of each reporting period, andany changes are applied prospectively as a change in accounting estimate.
The estimated useful lives of the main intangible assets with finite useful lives are as follows:• Software for internal use

Length of time it is usable internally (3–5 years)

Intangible assets with indefinite useful lives and intangible assets that are not yet available for use are not amortized.
They are tested for impairment annually or when there is an indication that they may be impaired, either individually or at
the cash-generating unit level.

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(9) Leases
The determination of whether an arrangement is, or contains, a lease is made based on the substance of the arrangementon the inception date of the lease, or in other words, whether the fulfillment of the arrangement depends on the use of a
specific asset or group of assets and whether the arrangement conveys the right to such asset (whether explicitly stated in
the contract or not).
If the lease agreement substantially conveys the risks and rewards of the ownership of the asset to the lessee, the lease isclassified as a finance lease. Leases other than finance leases are classified as operating leases.
Finance leases are capitalized at the commencement of the lease at the fair value of the leased property or, if lower, atthe present value of the minimum lease payments. Lease payments are apportioned between finance charges and reductionof the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges arerecognized in finance costs in the statement of profit or loss.
A leased asset is depreciated over the shorter of the estimated useful life of the asset and the lease term on a straight-line
basis.
Operating lease payments as lessee are recognized as an operating expense in the statement of profit or loss on astraight-line basis over the lease term.
Operating lease income as lessor are recognized as an operating revenue in the statement of profit or loss on a straightline basis over the lease term.
(10) Impairment
The carrying amounts of the Group’s non-financial assets, excluding inventories and deferred tax assets, are reviewed todetermine whether there is any indication of impairment at each reporting date. If there is any indication of impairment,
the recoverable amount for the asset is estimated. For goodwill, intangible assets with indefinite useful lives, and intangible
assets that are not yet available for use, the recoverable amount is estimated each year at the same time.
The recoverable amount for an asset or cash-generating unit (“CGU”) is the higher of value-in-use and fair value lesscosts of disposal. The fair value less costs of disposal calculation is based on available data from binding sales transactions,conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. In
assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects the time value of money and the risks specific to the asset.
A CGU is the smallest group of assets which generates cash inflows from continuing use, which are largely independent of
the cash inflows from other assets or groups of assets.

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The CGU (or group of CGUs) for goodwill is determined based on the unit by which the goodwill is monitored for internalmanagement purposes and must not be larger than an operating segment before aggregation.
Because the corporate assets do not generate independent cash inflows, if there is an indication that corporate assets
may be impaired, the recoverable amount is determined for the CGU to which the corporate assets belong.
If the carrying amount of an asset or a CGU exceeds the recoverable amount, an impairment loss is recognized in profit
or loss for the period. Impairment losses recognized in relation to a CGU are first allocated to reduce the carrying amount ofany goodwill allocated to the CGU and then allocated to the other assets of the CGU pro rata on the basis of their carrying
amounts.
An impairment loss related to goodwill cannot be reversed in future periods. Previously recognized impairment losses onother assets are reviewed at each reporting date to determine whether there is any indication that a loss has decreased or
no longer exists. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used
to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so thatthe carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would havebeen determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.
(11) Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of a past event, it isprobable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. Provisions are recognized as the best estimate of the expenditure
required to settle the present obligation (future cash flows), taking into account the risks and uncertainties surrounding theobligation at each reporting date.
If the time value of money is material, provisions are measured as the estimated future cash flows discounted to thepresent value using a pre-tax rate that reflects, when appropriate, the time value of money and the risks specific to theliability. When discounting is used, the increase due to the passage of time is recognized as a finance cost.
Each provision is described below:(i) Allowance for bonuses
The amount expected to be borne as bonuses in the current reporting period is recorded as a provision for the paymentof bonuses to employees of the Group.
(ii) Asset retirement obligations
The obligations to restore property to its original state under real estate leasing agreements for offices, such as corporate
headquarters and stores, are estimated and recorded as a provision. The expected length of use is estimated as the timefrom acquisition to the end of the useful life and 0.37–0.99% is generally used as the discount rate in calculations.
(12) Share-based payments
The Group grants share-based payments in the form of share subscription rights (stock options) to employees of theCompany and its subsidiaries. In doing so, the Group aims to heighten morale and motivate employees to improve theGroup’s business performance, thereby increasing shareholder value by reinforcing business development that is focused on
the interests of the shareholders. These share-based payments do this by rewarding contributions to the Group’s profit andby connecting the benefits received by these individuals to the Company’s stock price.
Stock options are measured at fair value based on the price of the Company’s shares on the grant date. Fair value of stock
options is further disclosed in “28. Share-based Payments”.
The fair value of the stock options determined at the grant date is expensed, together with a corresponding increase incapital surplus in equity, over the vesting period on a straight-line basis, taking into consideration the Group’s best estimatesof number of stock options that will ultimately vest.

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(13) Revenue recognition
Revenue is measured at the fair value of consideration received or receivable by the Group, less returns, trade discounts
and rebates. If a single transaction has multiple identifiable elements, the transaction is apportioned among the elements
and revenue is recognized for each element. When two or more transactions make commercial sense only when considered
together as a single entity, revenue is recognized for the transactions together. The recognition standards and method ofpresentation for revenue are described below.
(i) Revenue recognition standards
Revenue from the sale of goods is recognized when all the following conditions have been satisfied:• The Group has transferred to the buyer the significant risks and rewards of ownership of the goods;• The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor
effective control over the goods sold;• The amount of revenue can be measured reliably;• It is probable that the economic benefits associated with the transaction will flow to the Group; and• The costs incurred or to be incurred in respect of the transaction can be measured reliably.
(ii) Method of presentation for revenue
If the Group is acting as a principal in a transaction, revenue is measured at the fair value of consideration received or
receivable from the customer.
(14) Income taxes
Income taxes comprise current and deferred taxes. These are recognized in profit or loss, except for the taxes arising fromitems that are recognized as other comprehensive income.
Current taxes are measured at the amount expected to be paid to (or recovered from) taxation authorities on taxable
income or loss for the current year, using the rates that have been enacted or substantively enacted by each reporting datein the countries where the Group operates and generate taxable income, with adjustments to tax payments in past periods.
Through the use of an asset and liability approach, deferred tax assets and liabilities are recorded for the temporary
differences between the carrying amounts of assets and liabilities for accounting purposes and the amounts of assets andliabilities for tax purposes. Deferred tax assets and liabilities are not recognized for temporary differences under any of thefollowing circumstances:• Temporary differences arising from goodwill;• Temporary differences arising from the initial recognition of an asset/liability which, at the time of the transaction,
does not affect either the accounting profit or the taxable income (other than in a business combination); or• Temporary differences associated with investments in subsidiaries, but only to the extent that it is possible to control
the timing of the reversal of the differences and it is probable that the reversal will not occur in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when temporary
difference is realized or settled, based on tax laws that have been enacted or substantively enacted by each reporting date.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when income taxes are levied by the same taxation authority on either the same taxable entity or on different taxable
entities which intend either to settle current tax assets and liabilities on a net basis, or to realize the assets and settle theliabilities simultaneously.

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Deferred tax assets are recognized for unused tax losses, tax credits and deductible temporary differences to the extent
that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets arereviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefits will be
realized.
(15) Earnings per share
Basic earnings per share is calculated by dividing profit or loss attributable to common shareholders of the parent by theweighted average number of common stocks outstanding during the period, adjusted for treasury stock. Diluted earnings per
share is calculated by adjusting for all dilutive potential ordinary shares having a dilutive effect.
4. Application of new and amended standards and interpretations
The Group adopted the following standards and amendments from beginning of this fiscal year.
IFRS

Title

Summary

IAS 32 (Amendments)

Amendments to IAS 32
Financial Instruments:
Presentation

Offsetting financial assets and financial liabilities.

IAS 36 (Amendments)

Amendments to IAS 36
Impairment of Assets

Recoverable amount disclosures for non-financial assets.

IAS 39 (Amendments)

Amendments to IAS 39
Financial Instruments:
Recognition andMeasurement

Novation of derivatives and continuation of hedge accounting.

IFRIC 21

LeviesClarifies the timing of recognition of liability for a levy when the activity that triggers payment, as
identified by the relevant legislation, occurs.

IFRS 10 (Amendments)

Amendments to IFRS 10 —Consolidated Financial
Statements

Defines investment entity and provide an exception to the consolidation requirement for entities
that meet the definition of investment entity.

IFRS 12 (Amendments)

Amendments to IFRS 12 —Disclosures of interests
in other entities

Sets out the disclosure requirements for investment entities.

There is no significant impact on the accompanying consolidated financial statements resulting from the adoption of theabove new and amended standards and interpretations.

— 95 —

5. Issued but not yet effective IFRSAt the date of authorization of these consolidated financial statements, certain new standards, amendments andinterpretations to existing standards were issued but not yet effective and have not been early adopted by the Group.
The Company is in the process of assessing the impact of the adoption of these standards and interpretations, but is
not yet in a position to state whether these new and revised IFRS would have a significant impact on the Group’s results ofoperation and financial position.
Mandatory
adoption date(year beginning on)

The Group’s
adoption date

Summary

IAS 1 (Amendments)

Amendments to IAS 1
Presentation of
Financial Statements

1 January 2016

Year ending
31 August 2017

Clarification of methods of presentation of financial
statements and disclosures.

IAS16 (Amendments)

Amendments to IAS 16
Property, Plant andEquipment

1 January 2016

Year ending
31 August 2017

Clarification of acceptable methods of depreciation andamortisation.

IAS 28 (Amendments)

Amendments to IAS 28
Investments in Associates
and Joint Ventures

IFRS

Title

1 January 2016

Year ending
31 August 2017

Accounting treatment for sales or other transfers offunds relating to assets involving investors and relatedcompanies and/or joint-control enterprises.
Clarification of items requested regarding accounting
treatment of investment entities.

IAS 34 (Amendments)

Amendments to IAS 34
1 January 2016
Interim Financial ReportingYear ending
31 August 2017

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

Year ending
31 August 2017

Clarification of acceptable methods of depreciation andamortisation.

IFRS 5 (Amendments)

Amendments to IFRS 5
Non-current Assets Heldfor Sale and Discontinued
Operations

Year ending
31 August 2017

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 of sale” to “holding for purpose of allocation toowner.”

Year ending
31 August 2017

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
for the term.

IFRS 7 (Amendments)

Amendments to IFRS 7
Financial Instruments:
Disclosures

1 January 2016

1 January 2016

1 January 2016

IFRS 10 (Amendments)

Amendments to IFRS 10
Consolidated Financial
Statements

1 January 2016

Year ending
31 August 2017

Accounting treatment for sales or other transfers offunds relating to assets involving investors and relatedcompanies and/or joint-control enterprises.
Clarification of items requested regarding accounting
treatment of investment entities.

IFRS 12 (Amendments)

Amendments to IFRS 12 —Disclosures of interests
in other entities

1 January 2016

Year ending
31 August 2017

Sets out the disclosure requirements for investment
entities.

IFRS 15

Revenue from Contracts
with Customers

1 January 2018Year ending
31 August 2019

Provides a single revenue recognition model based on thetransfer of control of a good or service to a customer.

Year ending
31 August 2019

Replaces IAS39 Financial Instruments: Recognition andMeasurement, and addresses the classification andmeasurement of financial assets and financial liabilities,
and hedge accounting requirements.

IFRS 9 (2014)

Financial Instruments

1 January 2018

— 96 —

6. Segment Information(1) 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(2) Method of calculating segment revenue and results
The methods of accounting for the reportable segments are the same as those stated in “3. Significant Accounting
Policies”.
The Group does not allocate assets and liabilities to individual reportable segments.
(3) Segment information
Year ended 31 August 2014
(Millions of yen)
Reportable segments
UNIQLOUNIQLO
GlobalJapan
International
Brands

Revenue
Operating profit/(losses)
Segment income/(losses)(profit before income taxes)
Other disclosure:
Depreciation and amortization
Impairment losses

Total

Others(Note 1)

Consolidated
Adjustments
Statement of(Note 2)
Profit or Loss

2,410
83

— 1,382,935(4,745)130,402715,643
106,304

413,655
32,956251,225 1,380,524(4,195)135,064

106,650

32,552(3,661)

135,54182(152)

135,470

8,712
3,258

11,712849

5,519
19,85225,94523,960

174
—

4,688
—

30,80823,960(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.
Year ended 31 August 2015
(Millions of yen)
Reportable segments
UNIQLO
GlobalUNIQLOJapan
International
Brands

Revenue
Operating profit/(losses)
Segment income(profit before income taxes)
Other disclosure:
Depreciation and amortization
Impairment losses

Total

Others(Note 1)

Consolidated
Adjustments
Statement of(Note 2)
Profit or Loss

— 1,681,781(10,695)
164,463

780,139
117,249

603,684
43,376295,316
14,418

1,679,140
175,045

2,641
114

119,651

42,914

14,362

176,928

114

3,633

180,6767,475
106

16,865
3,426

6,682
6,083

31,024
9,616

181
—

6,552
6,530

37,75816,146(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. Please refer to “15. Impairment losses” for details related to IT system investment.

— 97 —

(4) Geographic Information
Year ended 31 August 2014
1. External Revenue(Millions of yen)
Japan

PRC
868,657

Overseas (Others)
136,585

Total

377,693

1,382,935

2. Non-current assets (excluding financial assets and deferred tax assets)(Millions of yen)
Japan

PRC
62,219Overseas (Others)
20,603

Total

109,895

192,719

Year ended 31 August 2015
1. External Revenue(Millions of yen)
Japan

PRC
967,178

Overseas (Others)
204,916

Total

509,687

1,681,781

2. Non-current assets (excluding financial assets and deferred tax assets)(Millions of yen)
Japan

PRC
56,670Overseas (Others)
25,143

120,548

Total
202,362

7. Business Combination and acquisition of non-controlling interests
Year ended 31 August 2014
With regard to the additional share acquisition of J Brand Holdings, LLC, the carrying amount of non-controlling interests
decreased by 7,813 million yen. Capital surplus increased by 1,726 million yen as a result of this acquisition, which is equal tothe difference between the price of acquisition and the carrying amount.
Year ended 31 August 2015
Not applicable.

— 98 —

8. Cash and cash equivalents
The breakdown of cash and cash equivalents as at each year end is as follows:(Millions of yen)
As at
31 August 2014
Cash and bank balances
Money market funds (MMF), cash funds,
negotiable certificates of deposits

As at
31 August 2015

172,364

Total

305,204

141,684

50,007314,049355,212

9. Trade and other receivables
The breakdown of trade and other receivables as at each year end is as follows:(Millions of yen)
As at
31 August 2014

As at
31 August 2015

Accounts receivable — trade
Notes receivable
Other accounts receivable
Allowance for doubtful accounts

42,960
69
4,909
(511)

40,931
66
4,459
(679)

Total

47,42844,777

See note “29. Financial Instruments” for credit risk management and the fair value of trade and other receivables.
10. Inventories
The breakdown of inventories as at each year end is as follows:(Millions of yen)
As at
31 August 2014
Products
Supplies
Total

As at
31 August 2015

219,492
3,730

255,736
4,270

223,223

260,006

No inventories were pledged as collateral to secure debt.
Write-down of inventories to net realizable value is as follows:(Millions of yen)
Year ended
31 August 2014
Write-down of inventories to net realizable value

Year ended
31 August 2015
1,976

— 99 —

3,427

11. Other financial assets and other financial liabilities
The breakdown of other financial assets and other financial liabilities as at each year end is as follows:(Millions of yen)
As at
31 August 2014
Other financial assets:
Available-for-sale financial assets
Loans and receivables
Loans and receivables
Allowance for doubtful accounts

As at
31 August 2015
450

574

80,039(76)

98,225(265)

Total loans and receivables

79,962

97,960Total

80,413

98,534

9,119
71,293

22,59375,940

Other current financial assets total
Other non-current financial assets total(Millions of yen)
As at
31 August 2014
Other financial liabilities:
Financial liabilities measured at amortized cost
Interest-bearing bank and other borrowings
Deposits
Deposits/guarantees received
Total
Other current financial liabilities total
Other non-current financial liabilities total

As at
31 August 2015

37,5611,135
1,603

38,0351,394
1,555

40,30040,985

12,696
27,604

15,471
25,513

12. Other assets and other liabilities
The breakdown of other assets and other liabilities as at each year end is as follows:(Millions of yen)
As at
31 August 2014
Other assets:
Prepayments
Long-term prepayments
Others
Total
Current
Non-current— 100 —As at
31 August 2015
9,192
4,743
2,839

11,818
4,755
3,941

16,775

20,514

12,1394,636

15,7484,766

(Millions of yen)
As at
31 August 2014
Other liabilities:
Accruals
Employee benefits accruals
Others
Total
Current
Non-current

As at
31 August 2015
19,606
3,534
12,70424,248
3,793
21,34135,84549,382

25,462
10,38335,714
13,668

13. Property, plant and equipment
Increase/(decrease) in acquisition costs, accumulated depreciation and impairment of property, plant and equipment are as
follows:(Millions of yen)
Acquisition costs

Furniture,
Buildings andequipment andstructures
vehiclesConstruction in
Leased assets
progress

Land

Total

At 1 September 2013

129,341

21,963

4,194

4,260

17,120176,881

Additions
Disposals
Transfers
Exchange differences

20,445(4,819)13,036
5,203

9,087(1,301)
—
1,193

—
(504)
—
—

13,273—(13,036)
1,523

5,394
(2,238)——48,201(8,864)—7,920

At 31 August 2014

163,207

30,943

3,689

6,021

20,276

224,139

Additions
Disposals
Transfers
Exchange differences

19,917(8,906)
10,004
11,5409,326(1,368)833(1,372)

—
(343)
—
—

11,339—(10,837)760

4,818(3,726)——45,401(14,344)—
10,929At 31 August 2015

195,764

38,362

3,345

7,284

21,369266,126(Millions of yen)

Furniture,
Accumulated depreciation Buildings andequipment andand impairment
structures
vehiclesConstruction in
Leased assets
progress

Land

Total

At 1 September 2013

(66,192)(10,908)(315)—(8,080)(85,495)

Depreciation provided
during the year
Impairment
Disposals
Exchange differences(16,383)(3,550)
2,959
(740)

(4,618)
(546)
1,112
(549)

—
—
—
—

—
—
—
—

(3,607)
(539)
2,219
—

(24,609)(4,636)
6,291(1,290)At 31 August 2014

(83,907)(15,510)(315)—(10,007)(109,741)

Depreciation provided
during the year
Impairment
Disposals
Exchange differences(18,289)(3,334)
5,918(4,516)(7,170)
(772)
1,361
554

—
(387)
—
—

—
—
—
—

(4,060)
(365)
4,016
—

(29,520)
4,858
11,296(3,961)

At 31 August 2015

(104,129)(21,537)(702)—(10,416)(136,785)— 101 —

(Millions of yen)
Net carrying amount

Furniture,
Buildings andequipment andstructures
vehiclesConstruction inprogress

Land

Lease assets

Total

At 31 August 2014

79,29915,432

3,374

6,021

10,269114,398

At 31 August 2015

91,635

16,825

2,643

7,284

10,952

129,340

Net carrying amounts of finance-leased assets are as follows:(Millions of yen)
Buildings andstructures

Furniture, equipment
and vehicles

OthersTotal

At 31 August 2014

831

9,437

—

10,269At 31 August 2015

988

9,964

—

10,952

There are no restrictions on ownership rights and no pledges on the Group’s property, plant and equipment.

— 102 —

14. Goodwill and intangible assets
The increase/(decrease) in acquisition costs, accumulated amortization and impairment of goodwill and intangible assets are
as follows:(Millions of yen)
Intangible assets other than goodwill
Acquisition costs

Goodwill

SoftwareTrademarks

Otherintangible
assetsIntangible
assets total

Total

At 1 September 2013

37,016

27,466

19,23921,80568,511

105,527

External purchases
Disposals
Exchange differences

—
—
1,393

6,690
(498)
30

—
—
918

164
(231)
1,023

6,854
(730)
1,972

6,854
(730)
3,366

At 31 August 2014

38,41033,68820,15822,76276,608115,018

External purchases
Disposals
Exchange differences

—
—
3,688

6,759
(2,223)
3

—
—
3,292

368
(673)
2,661

7,128
(2,896)
5,956

7,128
(2,896)
9,645

At 31 August 2015

42,09838,22723,45025,11986,797

128,896(Millions of yen)
Intangible assets other than goodwill
Accumulated amortizationand impairment
At 1 September 2013

Goodwill

SoftwareTrademarks

Otherintangible
assetsIntangible
assets total

Total

—

(11,865)(908)(2,898)(15,673)(15,673)

Amortization provided during the year
Impairment
Disposals
Exchange differences—(11,154)—(540)(4,498)
—
455
(33)

—
(4,376)—(30)(1,872)(3,793)173
9(6,371)(8,170)628(54)(6,371)(19,324)
628(594)

At 31 August 2014

(11,694)(15,941)(5,315)(8,382)(29,640)(41,334)

Amortization provided during the year
Impairment
Disposals
Exchange differences—(1,420)—(1,818)(6,146)(6,135)2,196
23—(1,469)—(785)(1,761)(2,232)190(43)(7,907)(9,837)
2,385
(805)

(7,907)(11,258)
2,385(2,623)

At 31 August 2015

(14,933)(26,005)(7,571)(12,229)(45,806)(60,739)(Note)

Amortization of intangible assets is included in “selling, general and administrative expenses” on the consolidated
statement of profit or loss.
(Millions of yen)
Intangible assets other than goodwill
Net carrying amount

Goodwill

SoftwareTrademarks

Otherintangible
assets

Total

Intangible
assets total

At 31 August 2014

26,715

17,746

14,842

14,37946,96873,684

At 31 August 2015

27,165

12,222

15,87912,88940,991

68,156— 103 —

(2) Significant goodwill and intangible assets
Goodwill and intangible assets recorded in the consolidated statement of financial position are mainly for goodwill andtrademarks related to J Brand.
Some of the trademarks will continue to be used as long as the business remains viable; therefore, management considers
the useful lives of these as indefinite.
The carrying amount of the goodwill and intangible assets with indefinite useful lives by cash-generating unit (“CGU”) is asfollows:(Millions of yen)
Intangible assets with indefinite
useful lives

Goodwill
Net carrying amount

UNIQLOJapan

UNIQLOInternational

At 31 August 2014——

At 31 August 2015——

GlobalBrandsUNIQLOJapan

UNIQLOInternational

GlobalBrands

26,715——

21,695

27,165——23,244

15. Impairment losses
During the year ended 31 August 2015, the Group recognized impairment losses of some store assets, goodwill and intangible
assets owned by J Brand business and software assets, etc related to IT system investment, mainly due to a decline in their
expected recoverability.
The breakdown of impairment losses by asset type is as follows:(Millions of yen)
Year ended 31 August 2014
Buildings and structures
Furniture and equipment
Land
Leased assets
Subtotal impairment losses on property,
plant and equipment
Software
Goodwill
Trademark
Other intangible assets
Subtotal impairment losses on intangible assets
Other non-current assets (Long-term prepayments)
Total impairment losses(Note)

Year ended 31 August 2015

3,550
546
—
539

3,334
772
387
365

4,636

4,858

—
11,154
4,376
3,793

6,135
1,420
1,469
2,232

19,324

11,258—29

23,96016,146

Leased assets include furniture and equipment.

The Group’s impairment losses during the year ended 31 August 2015 amounted to 16,146 million yen, compared with
23,960 million yen during the year ended 31 August 2014, and are included in “other expenses” on the consolidated statementof profit or loss.
Year ended 31 August 2014
(1) Property, plant and equipment
The grouping is based on the smallest cash-generating unit that independently generates cash inflow. In principle, each store
is considered a cash-generating unit and recoverable amounts of cash-generating units are calculated based on value in use.
Impairment losses represented provision against the carrying amount of the store assets to the recoverable amount, mainly
due to a reduction in profitability of certain stores.
The value in use is calculated based on estimates and growth rates compiled by management. Since the future cash flow isestimated to be negative, the value in use is deemed to be zero.
— 104 —

The main cash-generating units of which impairment losses were recorded are as follows:
Operating segment

Cash-generating unit

Type

UNIQLO Japan

UNIQLO CO., LTD. stores

Buildings and structures

UNIQLO International

Fast Retailing (China) Trading
Co. Ltd. stores

Buildings and structures

UNIQLO International

UNIQLO TRADING CO., LTD. stores

Buildings and structures

UNIQLO International

UNIQLO TAIWAN LTD. stores

Buildings and structures

Global brands

G.U. CO., LTD. stores

Buildings and structures(2) Goodwill and intangible assets, etc.
23,960 million yen in impairment losses mainly comprised of impairment losses for goodwill, trademarks and customer
relationships owned by the J Brand business. The carrying amounts of cash-generating units related to J Brand business after
recognition of impairment losses are 10,604 million yen of goodwill, 7,009 million yen of trademarks and 6,154 million yen ofcustomer relationships.
The recoverable amounts of goodwill, trademarks and customer relationships related to the J Brand business are calculated
based on fair value less costs of disposal.
Fair value less costs of disposal is determined by taking into account the following two approaches:① The terminal value of the business added to the 10-year discounted cash flow based on plans projected and approved bymanagement. The discount rate (pre-tax) is calculated at 26.8% (post-tax discount rate is 18.8%) based on the weighted average
cost of capital of the cash-generating units (Income approach).
② Calculation based on the market value of similar assets (Market approach).
This measurement of fair value is classified as level 3 in the fair value hierarchy based on significant inputs in used valuation
techniques. Adverse change in key assumptions — lower estimated future cash flow or higher discount rate, would cause
further impairment loss to be recognized.
Year ended 31 August 2015
(1) Property, plant and equipment
The grouping is based on the smallest cash-generating unit that independently generates cash inflow. In principle, each store
is considered a cash-generating unit and recoverable amounts of cash-generating units are calculated based on value in use.
Impairment losses represented provision against the carrying amount of the store assets to the recoverable amount, mainly
due to a reduction in profitability of certain stores.
The value in use is calculated based on estimates and growth rates compiled by management. Since the future cash flow isestimated to be negative, the value in use is deemed to be zero.
The main cash-generating units for which impairment losses were recorded is as follows:
Operating segment

Cash-generating unit

Type

UNIQLO International

UNIQLO USA LLC stores

Buildings and structures(2) Goodwill and intangible assets, etc.
(i) Impairment losses related to J Brand businessOf the total impairment losses amounting to 16,146 million yen, 5,123 million yen represented impairment losses forgoodwill, trademarks and customer relationships owned by the J Brand business. The carrying amounts of cash-generating
units related to J Brand business after recognition of impairment losses are 11,401 million yen of goodwill, 7,005 million yen of
trademarks and 4,249 million yen of customer relationships.

— 105 —

The recoverable amounts from goodwill, trademarks and customer relationships related to the J Brand business arecalculated based on fair value less costs of disposal.
Fair value less costs of disposal is determined by taking into account the following two approaches:① The terminal value of the business added to the 10-year discounted cash flow based on plans projected and approved bymanagement. The discount rate (pre-tax) is calculated at 27.5% (post-tax discount rate is 19.5%) based on the weighted average
cost of capital of the cash-generating units (Income approach).
② Calculation based on the market value of similar assets (Market approach).
This measurement of fair value is classified as level 3 in the fair value hierarchy based on significant inputs in used valuation
techniques. Adverse change in key assumptions — lower estimated future cash flow or higher discount rate, would cause
further impairment loss to be recognized.
(ii) Impairment losses related to IT system investment
Of the total impairment losses amounting to 16,146 million yen, 6,530 million yen relates to an IT system. 6,530 million yen
comprised of impairment losses for software assets which amount to 6,135 million yen and impairment losses amounted to 395
million yen for IT system assets, which are included in property, plant and equipment and other non-current assets.
Impairment losses represented write down of the carrying amount of assets to the recoverable amount, mainly due to a
reduction in profitability. IT system and related assets are recognized as one cash-generating unit and the recoverable amount
was deemed as zero because the assets are going to be disposed.
16. Finance lease obligations
The breakdown of finance lease obligations is as follows:(Millions of yen)
Future minimum
lease payments

Finance lease obligations
Due within one year
Due after one year through five years
Due after five years
Total

Present value of
future minimum lease payments

As at
31 August 2014

As at
31 August 2015

As at
31 August 2014

As at
31 August 2015

3,997
7,811
—

4,302
8,185
—

3,894
7,705
—

4,188
8,073
—

11,80912,488

11,59912,262

Deductions – future finance costs

(209)

(226)

—

—

Total net finance lease payables

11,59912,262

11,59912,262Current portion

—

—

3,894

4,188

Non-current portion

—

—

7,705

8,073

The Group has no sublease contracts, accrued variable lease fees or escalation clauses (clauses enabling upward revisionof rental charges), and no limitations imposed by lease contracts (limitations regarding dividends, additional borrowing, oradditional leases, etc.).

— 106 —

17. Operating lease commitments(1) As Lessee
The Group’s total future minimum lease payments on non-cancellable operating leases as at each year end are as follows:(Millions of yen)
As at
31 August 2014
Due within one year
Due after one year through five years
Due after five years
Total

As at
31 August 2015
28,662
79,871
69,29634,01896,06485,187

177,830

215,270

The total minimum lease payments and contingent rents for operating lease contracts recognized as expenses during the year
are as follows:(Millions of yen)
Year ended
31 August 2014

Year ended
31 August 2015

Total minimum lease payments
Contingent rents

91,38347,269103,298
63,139

Total

138,652

166,437

Contingent rents, renewal options, and escalation clauses (clauses enabling upward revision of rental charges) are included in
the operating lease agreements.
There are no limitations imposed by lease contracts (limitations regarding dividends, additional borrowing, or additional
leases, etc.).
(2) As lessor
The Company sub-leases some of the properties it leased through operating leases, and so while it pays rent to the property
owner, it also receives rent from the sub-tenant.
A breakdown of the future minimum rental receivables under non-cancellable leases is as follows:(Millions of yen)
As at
31 August 2014
Due within one year
Due after one year through five years
Due after five years
Total

As at
31 August 2015
58
8
—

8
—
—

67

8

The total of contingent rents recorded as revenue during each reporting period is as follows:(Millions of yen)
Year ended
31 August 2014
Contingent rents

Year ended
31 August 2015
1,139

— 107 —

1,162

18. Deferred taxes and income taxes(1) Deferred taxes
The main factors in the increase/(decrease) of deferred tax assets and deferred tax liabilities are as follows:(Millions of yen)Temporary differences
Accrued business tax
Allowance for bonuses
Provision of allowancefor doubtful accounts
Impairment losses on
non-current assets
Unrealized gains/(losses) on
available-for-sale securities
Depreciation
Net gain/(loss) on revaluation of
cash flow hedges
Temporary differences onshares of subsidiaries
Accelerated depreciation
Intangible assets
OthersSubtotal
Tax losses carried forward
Net deferred tax assets/(liabilities)(Note)

As at
1 September 2013

Recognizedin profit or loss
(Note)

Recognizedin othercomprehensive
income

1,784
2,338

289
359

—
—

2,073
2,697

182

(59)

—

122

1,143

(144)

—

998

—

—

(1)

(1)

5,008

515

—

5,524

(42,467)—

6,606(35,861)(2,203)——(2,203)(2,807)(8,344)
5,946(39,418)
5,133

(698)
3,596
(1,353)
2,505
(956)

—
—
—
6,604
—

(3,505)(4,747)
4,593(30,308)
4,177(34,284)

1,549

6,604

(26,130)As at
31 August 2014

The difference between the total amount recognized in profit or loss and the amount of deferred tax is due toexchange realignment.

— 108 —

(Millions of yen)Temporary differences
Accrued business tax
Allowance for bonuses
Provision of allowancefor doubtful accounts
Impairment losses on
non current assets
Unrealized gains/(losses) on
available-for-sale securities
Depreciation
Net gain/(loss) on revaluation of
cash flow hedges
Temporary differences onshares of subsidiaries
Accelerated depreciation
Intangible assets
OthersSubtotal
Tax losses carried forward
Net deferred tax assets/(liabilities)(Note)

As at
1 September 2014

Recognizedin profit or loss
(Note)

Recognizedin othercomprehensive
income

2,073
2,697

305
595

—
—

2,378
3,293

122

76

—

199

998

2,244

—

3,243

(1)

—

(69)

(70)

5,524

361

—

5,886

(35,861)—(16,180)(52,042)(2,203)208—(1,994)(3,505)(4,747)
4,593(1,751)
806
921

—
—
—

(5,256)(3,940)5,515(30,308)3,770(16,250)(42,788)

4,177

2,445

—

6,623

(26,130)

6,215(16,250)(36,165)

As at
31 August 2015

The difference between the total amount recognized in profit or loss and the amount of deferred tax is due toexchange realignment.

Tax effects of unrecognized tax losses carried forward and deductible temporary differences for which deferred tax assets are
not recognized are as follows:(Millions of yen)
As at
31 August 2014
Unrecognized tax losses carried forward
Deductible temporary differences
Total

As at
31 August 2015
5,653
12,568

9,590
12,577

18,222

22,167

Tax effects of unrecognized tax losses carried forward of which no deferred tax asset is recognized in the consolidated
statement of financial position, if unutilized, will expire as follows:(Millions of yen)
As at
31 August 2014
First year
Second year
Third year
Fourth year
Fifth year and thereafter
Total— 109 —As at
31 August 2015
—
—
—
—
5,653

—
—
—
—
9,590

5,653

9,590

Temporary differences on shares of subsidiaries for which deferred tax liabilities were not recognized
The aggregate amounts of temporary differences associated with undistributed retained earnings of subsidiaries for which
deferred tax liabilities have not been recognized as at 31 August 2014 and 31 August 2015 were 332,519 million yen and
414,218 million yen, respectively.
No liability has been recognized with respect to these differences because the Group is in a position to control the timing of
the reversal of the temporary differences and it is probable that such differences will not be reversed in the foreseeable future.
(2) Income taxes(Millions of yen)
Year ended
31 August 2014
Current tax
Deferred tax
Total

Year ended
31 August 2015
58,207(2,074)

68,110(4,822)56,13363,287

Reconciliations between the statutory income tax rates and the effective tax rates are as follows. The effective tax rate shownis the corporate income tax rate applied to the Group’s profit before income taxes.
In addition, following promulgation of the “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 9 of 2015) and“Act for Partial Amendment of the Local Tax Act, etc.” (Act No. 2 of 2015) on 31 March 2015, a reduction in the corporation tax
rate was applied to the Company and its domestic subsidiaries from the fiscal year commencing 1 April 2015.
As a result, the effective statutory tax rate used in the calculation of deferred tax assets and liabilities has been revised from
35.6% to 33.0% with regard to temporary differences expected to be eliminated in the fiscal year commencing 1 September
2015, and to 32.2% with regard to temporary differences expected to be eliminated from the fiscal year commencing 1
September 2016.
The impact of this tax rate amendment on the financial statements is slight.
(Millions of yen)
Year ended
31 August 2014

Year ended
31 August 2015

Statutory income tax rate
Unrecognized deferred tax assets
Difference in statutory income tax rates of subsidiaries
Impairment loss of goodwill
Inhabitant tax on per capita basis
Others

38.0%
2.8%(4.4%)
3.2%
0.6%
1.2%

35.6%
2.0%
(4.2%)
0.3%
0.4%
0.8%

Effective tax rate

41.4%

35.0%

19. Trade and other payables
The breakdown of trade and other payables as at each year end is as follows:(Millions of yen)
As at
31 August 2014
Trade payables
Other payables
Total— 110 —As at
31 August 2015

137,069
48,049122,620
58,957

185,119

181,57720. Provisions
The breakdown of provisions as at each year end is as follows:(Millions of yen)
As at
31 August 2014
Allowance for bonuses
Asset retirement obligations
Total
Current liabilities
Non-current liabilities

As at
31 August 2015
12,192
11,656

17,73515,083

23,84932,81916,154
7,694

22,615
10,203The main factors for the increase/(decrease) in provisions are as follows:(Millions of yen)
Allowance forbonuses
Balances as at 1 September 2013

Asset retirement
obligations

Total

9,056

8,182

17,238Additional provisions
Amounts utilized
Increase in discounted amounts arising frompassage of time
Others15,966(13,051)

3,606
(398)

19,573(13,449)

—

91

91

221

173

394

Balances as at 31 August 201412,192

11,656

23,849Additional provisions
Amounts utilized
Increase in discounted amounts arising frompassage of time
Others

20,902(15,806)

3,641
(468)

24,543(16,274)

—

153

153

446

100

546

Balances as at 31 August 2015

17,73515,08332,819Please refer to “3. Significant Accounting Policies (11) Provisions” for explanation of respective provisions.
21. Equity and other equity Items(1) Share Capital
Number of
Number of
Number ofoutstanding
authorized sharesissued sharessharesCapital stock(Common stock(Common stock(Common stock(Millions of yen)with no par-value) with no par-value)with no par-value)(shares)(shares)(shares)
Balances as at 1 September 2013
Increase/(decrease) (Note)
Balances as at 31 August 2014
Increase/(decrease) (Note)
Balances as at 31 August 2015
(Note)

300,000,000

106,073,656

101,896,492

10,273

Capital surplus(Millions of yen)

6,859

—

—

22,119—2,944

300,000,000

106,073,656

101,918,611

10,273

9,803

—

—

26,790—1,720

300,000,000

106,073,656

101,945,401

10,273

11,524The main factor for the increase/(decrease) in the number of shares in circulation was the increase/(decrease) in thenumber of treasury stock as indicated below.

— 111 —

(2) Treasury Stock and Capital Surplus➀

Treasury Stock
Number of shares (shares)

Balances as at 1 September 2013

4,177,164

15,851

699(22,818)25(86)

4,155,045

15,790228(27,018)11(102)

4,128,255

15,699Acquisition of treasury stock less than one unit
Exercise of stock options
Balances as at 31 August 2014
Acquisition of treasury stock less than one unit
Exercise of stock options
Balances as at 31 August 2015➁

Amount (Millions of yen)

Capital surplus(Millions of yen)

Balances as at
1 September 2013
Disposal of treasury stock
Share-based payments
Acquisition of non-controllinginterests
Balances as at
31 August 2014
Disposal of treasury stock
Share-based payments
Balances as at
31 August 2015

Capital reserve

Gain/(loss) on
disposalof treasury stock

Stock options

4,578

1,384

896

—

6,859

—
—

471
—

—
746

—
—

471
746

—

—

—

1,726

1,726

4,578

1,856

1,642

1,726

9,803

—
—

700
—

—
1,019

—
—

700
1,019

4,578

2,556

2,662

1,726

11,524

Others

Total

Please refer to “28. Share-based payments” for details of share-based payments (stock options).
(3) Other components of equity
The breakdown of other comprehensive income included in non-controlling interests is as follows:(Millions of yen)
Year ended
31 August 2014

Year ended
31 August 2015

Exchange differences on translation of foreign operations
Cash flow hedges

1,818
(94)

(774)
667

Other comprehensive income

1,724

(107)

— 112 —

(4) Dividends
The Company’s basic policy is to pay dividends twice a year, an interim dividend and a year-end dividend. These dividends are
decided by resolution of the Board, unless otherwise stipulated by laws and regulations.
The total amount of dividends paid was as follows:Year ended 31 August 2014
Resolutions

Amount of dividends(Millions of yen)

Dividends per share(Yen)

Board of Directors’ meeting held on 4 November 201315,284

150

Board of Directors’ meeting held on 10 April 201415,286

150

Year ended 31 August 2015
Resolutions

Amount of dividends(Millions of yen)

Dividends per share(Yen)

Board of Directors’ meeting held on 3 November 201415,287

150

Board of Directors’ meeting held on 9 April 2015

17,838175

Proposed dividends on common stock are as follows:Year ended 31 August 2014
Total amount of dividends (million yen)
Dividends per share (yen)Year ended 31 August 2015

15,287

17,840150

175Regarding the proposed dividends per common stock, the Board has approved the proposal subsequent to the year-end date,
and this sum is not recognized as a liability at year end.
22. Revenue
The breakdown of revenue for each reporting period is as follows:(Millions of yen)
Year ended
31 August 2014
Revenue
Sales of goods
Service revenue
Total

Year ended
31 August 2015

1,379,077
3,857

1,677,016
4,765

1,382,935

1,681,781

23. Selling, general and administrative Expenses
The breakdown of selling, general and administrative expenses for the year is as follows:(Millions of yen)
Year ended
31 August 2014
Selling, general and administrative expenses
Advertising and promotion
Rental expenses
Depreciation and amortisation
Outsourcing
Salaries
OthersTotal— 113 —

Year ended
31 August 2015

60,941
138,652
30,80822,953
184,864
110,975

68,474
166,437
37,75829,324
230,815
139,053

549,195

671,86324. Other income and other expenses
The breakdown of other income and other expenses for the year is as follows:(Millions of yen)
Year ended
31 August 2014
Other income
Foreign exchange gains*
Gains on sales of property, plant and equipment
Others
Total

Year ended
31 August 2015
3,926
991
2,107

5,809
43
2,929

7,025

8,782

* Currency adjustments incurred in the course of operating transactions are included in “other income”.
(Millions of yen)
Year ended
31 August 2014

Year ended
31 August 2015

Other expenses
Loss on retirement of property, plant and equipment
Impairment losses
Others391
23,9602,847

2,479
16,146
2,366

Total

27,20020,992

25. Finance income and finance costs
The breakdown of finance income and finance costs for each reporting period is as follows:(Millions of yen)
Year ended
31 August 2014
Finance income
Foreign exchange gains*
Interest income
Dividend income
Others
Total

Year ended
31 August 2015
5,104
879
17
—

15,084
1,434
42
792

6,001

17,354* Currency adjustments incurred in the course of non-operating transactions are included in “finance income”.
(Millions of yen)
Year ended
31 August 2014
Finance costs
Interest expenses
OthersTotal— 114 —

Year ended
31 August 2015
933
—

1,137
3

933

1,141

26. Other comprehensive income
The breakdown of amounts recorded during the year, reclassification adjustments and income tax effect generated byindividual comprehensive income items included in “other comprehensive income” for the year are as follows:Year ended 31 August 2014
(Millions of yen)Amountrecorded during
the year

Reclassification
adjustment

Amount before
income tax

Income tax effectAmount after
income tax

66

—

66

—

66

Net gain/(loss) on revaluation ofavailable-for-sale investments
Exchange differences ontranslation offoreign operations
Cash flow hedges

8,793

(391)

8,402

—

8,402

42,639(55,022)(12,382)

6,608(5,773)

Total

51,500(55,413)(3,913)

6,608

2,695

Year ended 31 August 2015
(Millions of yen)Amountrecorded during
the year

Reclassification
adjustment

Amount before
income tax

Income tax effect

(585)

—

(585)

(69)

(655)

Amount after
income tax

Net gain/(loss) on revaluation ofavailable-for-sale investments
Exchange differences ontranslation offoreign operations
Cash flow hedges

14,040—14,040—14,040142,536(86,004)

56,531(16,180)

40,350Total

155,991(86,004)

69,986(16,250)

53,735— 115 —

27. Earnings per share
Year ended 31 August 2014
Equity per share attributable to ownersof the parent (Yen)
Basic earnings per share for the year (Yen)
Diluted earnings per share for the year (Yen)Note:Year ended 31 August 2015
6,067.40
731.51730.81Equity per share attributable to ownersof the parent (Yen)
Basic earnings per share for the year (Yen)
Diluted earnings per share for the year (Yen)7,366.07
1,079.42
1,078.08

The basis for calculation of basic earnings per share and diluted earnings per share for the year is as follows:Year ended
31 August 2014

Basic earnings per share for the year
Profit for the year attributable to ownersof 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 during the year
(Shares)
Diluted earnings per share for the year
Adjustment to profit (Millions of yen)
Increase in number of common stock (Shares)(share subscription rights)

Year ended
31 August 2015

74,546

110,027——

74,546

110,027

101,908,470

101,932,225—
97,917(97,917)—
126,749(126,749)

28. Share-based Payments
The Group has a program for issuing share subscription rights as share-based compensation stock options for employeesof the Company and its subsidiaries as a means of recognizing their contribution to Group’s profit. By linking the Company’s
stock price to the benefits received by personnel, this program aims to boost staff morale and motivation, improve Group
performance and enhance shareholder value by strengthening business development with a focus on shareholder return.
1. Details, scale and changes in stock options(1) Description of stock options
1st Share subscription rights
A type

1st Share subscription rights
B typeCategory and number of grantee

Employees of the Company: 7
Employees of the Groupsubsidiaries: 3

Employees of the Company: 266
Employees of the Groupsubsidiaries: 413

Number of stock options by type of shares (Note)

Common stock:maximum 3,370 shares

Common stock:maximum 77,542 shares

Grant date

8 November 2010

8 November 2010

Vesting conditions

To serve continuously until thevesting date (7 November2013) after the grant date
(8 November 2010)

To serve continuously until thevesting date (7 December2010) after the grant date
(8 November 2010)

Eligible service period

From 8 November 2010 to
7 November 2013

From 8 November 2010 to
7 December 2010

Exercise period

From 8 November 2013 to
7 November 2020

From 8 December 2010 to
7 November 2020

Settlement

Equity settlement

Equity settlement— 116 —

2nd share subscription rights
A type

2nd share subscription rights
B typeCategory and number of grantee

Employees of the Company: 14
Employees of the Groupsubsidiaries: 4

Employees of the Company: 139
Employees of the Groupsubsidiaries: 584

Number of stock options by type of shares (Note)

Common stock:maximum 13,894 shares

Common stock:maximum 51,422 shares

Grant date

15 November 201115 November 2011

Vesting conditions

To serve continuously until thevesting date (14 November 2014)
after the grant date
(15 November 2011)

To serve continuously until thevesting date (14 December 2011)
after the grant date
(15 November 2011)

Eligible service period

From 15 November 2011 to
14 November 2014

From 15 November 2011 to
14 December 2011

Exercise period

From 15 November 2014 to
14 November 2021

From 15 December 2011 to
14 November 2021

Settlement

Equity settlement

Equity settlement

3rd share subscription rights
A type

3rd share subscription rights
B typeCategory and number of grantee

Employees of the Company: 18
Employees of the Groupsubsidiaries: 8

Employees of the Company: 136
Employees of the Groupsubsidiaries: 615

Number of stock options by type of shares (Note)

Common stock:maximum 10,793 shares

Common stock:maximum 39,673 shares

Grant date

13 November 2012

13 November 2012

Vesting conditions

To serve continuously until thevesting date (12 November 2015)
after the grant date
(13 November 2012)

To serve continuously until thevesting date (12 December 2012)
after the grant date
(13 November 2012)

Eligible service period

From 13 November 2012 to
12 November 2015

From 13 November 2012 to
12 December 2012

Exercise period

From 13 November 2015 to
12 November 2022

From 13 December 2012 to
12 November 2022

Settlement

Equity settlement

Equity settlement

4th share subscription rights
A type

4th share subscription rights
B typeCategory and number of grantee

Employees of the Company: 19
Employees of the Groupsubsidiaries: 11

Employees of the Company: 180
Employees of the Groupsubsidiaries: 706

Number of stock options by type of shares (Note)

Common stock:maximum 7,564 shares

Common stock:maximum 29,803 shares

Grant date

3 December 2013

3 December 2013

Vesting conditions

To serve continuously until thevesting date (2 December 2016)
after the grant date
(3 December 2013)

To serve continuously until thevesting date (2 January 2014)
after the grant date
(3 December 2013)

Eligible service period

From 3 December 2013 to
2 December 2016

From 3 December 2013 to
2 January 2014

Exercise period

From 3 December 2016 to
2 December 2023

From 3 January 2014 to
2 December 2023

Settlement

Equity settlement

Equity settlement— 117 —

5th share subscription rights
A type5th share subscription rights
B typeCategory and number of grantee

Employees of the Company: 36
Employees of the Groupsubsidiaries: 16

Employees of the Company: 223
Employees of the Groupsubsidiaries: 785

Number of stock options by type of shares (Note)

Common stock:maximum 21,732 shares

Common stock:maximum 33,062 shares

Grant date

14 November 2014

14 November 2014

Vesting conditions

To serve continuously until thevesting date (13 November 2017)
after the grant date
(14 November 2014)

To serve continuously until thevesting date (13 December 2014)
after the grant date
(14 November 2014)

Eligible service period

From 14 November 2014 to
13 November 2017

From 14 November 2014 to
13 December 2014

Exercise period

From 14 November 2017 to
13 November 2024

From 14 December 2014 to
13 November 2024

Settlement

Equity settlement

Equity settlement

Note:
The number of stock options is equivalent to the number of shares.
Expenses recognized for share-based payments are as follows:(Millions of yen)
Year ended
31 August 2014
Expenses recognized
Share-based payments

Year ended
31 August 2015
1,269

— 118 —

1,849

(2) Scale of stock options program and changes
For purposes of counting the number of stock options in existence in the consolidated fiscal year under review (ended August2015), each stock option is recorded as converted to shares.
➀ The number and weighted average exercise prices of stock options
Stock options
Year ended
31 August 2014

Year ended
31 August 2015

Number of shares(shares)Number of shares(shares)Non-vested
Non-vested at beginning of the year
GrantedForfeited
Vested25,69637,367(525)(32,163)

30,37554,794(4,790)(46,207)

Non-vested at end of the year

30,37534,172

Year ended
31 August 2014

Year ended
31 August 2015

Number of shares(shares)Number of shares(shares)

VestedOutstanding at beginning of the year
VestedExercised
Forfeited

55,80932,163(22,818)(380)

64,774
46,207(27,018)(816)

Outstanding at end of the year

64,774

83,147All stock options are granted with an exercise price of 1 yen per share.
➁

Stock price on exercise date
Stock options exercised during the year ended 31 August 2015 are as follows:Type

Number of shares(shares)

Stock options➂

Weighted average stock priceon exercise date (Yen)

27,018

Expected life of stock options
The weighted average expected life of outstanding stock options as at 31 August 2015 was 7.63 years.
In addition, the weighted average expected life of outstanding stock options as at 31 August 2014 was 7.83 years.

— 119 —

45,719

2. Methods of estimating fair value of stock options, etc.
The methods of estimating fair value of 5th share subscription rights A type and B type, granted during the year ended 31
August 2015, were as follows:➀➁

Valuation model: Black-Scholes model
The following table lists the inputs to the model used:
5th share subscription rights
A type5th share subscription rights
B type36%

34%

Stock price volatility (Note 1)
Expected life of options (Note 2)
Expected dividends (Note 3)
Risk-free interest rate (Note 4)
Notes:

1.
2.
3.
4.

6.5 years

5.04 years

300 yen/share

300 yen/share

0.254%

0.168%

Stock price volatility is computed based on the actual results of 6.5 years for A type (from May 2008 to
November 2014) and 5.04 years for B type (from November 2009 to November 2014).
Expected life of options is estimated to be the reasonable period from the grant date until the exercise date.
Expected dividends are the actual dividends for the year ended 31 August 2014.
Risk-free interest rate refers to the yield of Japanese government bonds corresponding to the expected life of
options.

Also, the method of estimating fair value for the 4th share subscription rights A type and B type granted during the year
ended 31 August 2014 are as follows:➀➁

Valuation model: Black-Scholes model
The following table lists the inputs to the model used:
4th share subscription rights
A type

4th share subscription rights
B type37%

37%

Stock price volatility (Note 1)
Expected life of options (Note 2)
Expected dividends (Note 3)
Risk-free interest rate (Note 4)
Notes: 1.
2.
3.
4.

6.5 years

5.04 years

290 yen/share

290 yen/share

0.308%

0.189%

Stock price volatility is computed based on the actual results of 6.5 years for A type (from May 2007 to
December 2013) and 5.04 years for B type (from December 2008 to December 2013).
Expected life of options is estimated to be the reasonable period from the grant date until the exercise date.
Expected dividends are the actual dividends for the year ended 31 August 2013.
Risk-free interest rate refers to the yield of Japanese government bonds corresponding to the expected life of
options.

3. Estimation method of the number of share subscription rights which have already been vested
Because it is difficult to reasonably estimate the number of options that will expire in the future, the method reflecting actual
numbers of forfeiture is adopted.

— 120 —

29. Financial Instruments(1) Capital risk management
The Group engages in capital management to achieve continuous growth and maximize corporate value.
The ratio of the Group’s net interest-bearing borrowings to equity is as follows:(Millions of yen)
As at
31 August 2014

As at
31 August 2015

Interest-bearing borrowings
Cash and cash equivalents
Net interest-bearing borrowings

37,561
314,049(276,487)

38,035355,212(317,176)

Equity636,041

774,804

To maximize corporate value, the Group engages in cash flow-oriented management. As at 31 August 2014 and 2015, theGroup maintained a position where the value of cash and cash equivalents exceeded interest-bearing borrowings.
As at 31 August 2015, the Group is not subject to any externally imposed capital requirement.
(2) Significant accounting policies
See Note “3. Significant Accounting Policies” for significant accounting policies regarding standards for recognizing financial
assets, financial liabilities, equity financial instruments, as well as the fundamentals of measurement and recognition of profit orloss.
(3) Categories of financial instruments(Millions of yen)
As at
31 August 2014
Financial assets
Loans and receivables
Trade and other receivables
Other current financial assets
Other non-current financial assets
Available-for-sale investments
Derivatives
Financial assets at fair value through profit or loss(“FVTPL”)
Foreign currency forward contracts designated as
hedging instruments
Financial liabilities
Financial liabilities at amortized cost
Trade and other payables
Other current financial liabilities
Other non-current financial liabilities
Derivatives
Financial liabilities at FVTPL
Foreign currency forward contracts designated as
hedging instruments

As at
31 August 2015

47,428
9,119
70,842450

44,77722,59375,366
574

21

595

99,103

156,895

185,119
12,696
27,604

181,577
15,471
25,513

140

38

871

61

No items in the above categories are included in discontinued operations or disposal group held-for-sale. Also, there are no
financial assets or liabilities valued using the fair value option to measure fair value.
On the consolidated statement of financial position, available-for-sale investments are included under “non-current financial
assets”.
— 121 —

(4) Financial risk management
In relation to the cash management, the Group seeks to ensure effective utilization of group funds through the Group’s CashManagement Service (“CMS”). The Group obtained credit facilities from financial institutions. Any temporary surplus funds areinvested mainly in fixed interest rate-bearing instruments with minimal credit risk.
The Group entered into foreign currency forward contracts to hedge risk arising from fluctuations in foreign currency
exchange rates and did not conduct any speculative trading in derivatives.
(5) Market risk management
The Group conducts its business on a global scale, and is therefore exposed to the price fluctuation risk of currencies andequity financial instruments.
➀ Foreign currency risk
1) Foreign currency risk management
The Group conducts its business on a global scale, and is exposed to foreign currency risk in relation to purchases and sales
transactions and financing denominated in currencies other than the local currencies of those countries in which the Group
operates its business.
In regard to operating obligations denominated in foreign currencies, the Group in principle hedges risk by using foreign
currency forward contracts and other instruments for foreign currency risk assessed on a semi-annual basis.
For imports, the Group endeavors to stabilize purchasing costs by concluding foreign currency forward contracts andstandardizing import exchange rates. If the yen should weaken significantly against the US dollar in the future and this situation
continued for an extended period, it could have a negative impact on the Group’s performance.
The Group identifies concentration of risk in regard to foreign currency forward contracts.
The Group’s notional amount of foreign currency forward contracts was 1,038,956 million yen as at 31 August 2015.
2) Foreign currency sensitivity analysis
Below is an analysis of the impact an 1% increase in the yen against the Euro (“EUR”) and the United States dollar (“$”) would
have on the Group’s profit for the year and other comprehensive income on the respective reporting periods.
These calculations assume no changes in the value of other foreign currencies not included herein.
Year ended
31 August 2014
Average exchange rate (Yen)$EUR
Impact on profit for the year (Millions of yen)$
EUR
Impact on other comprehensive income (Millions of yen)$
EUR

— 122 —

Year ended
31 August 2015
101.54138.20117.36137.14(613)(42)(1,281)(70)(8,933)(5)(10,865)(8)3) Currency derivatives and hedges
The Group uses foreign currency forward contract transactions to hedge against the risk of future fluctuations in exchange
rates in regard to foreign currency transactions and applies hedge accounting to transactions that meet hedge requirements,
and did not conduct any speculative trading in derivatives.
Cash flow hedges
A cash flow hedge is a hedge for avoiding risk of volatility in future cash flows. The Company uses foreign currency forward
contracts to hedge cash flow fluctuations relating to forecast transactions.
Fluctuations in the fair value of derivative transactions designated as cash flow hedges are recognized as othercomprehensive income, and included in other components of equity, and are reclassified to profit or loss at the time net profit
is recognized on the hedged item.
The gain/(loss) on derivative transactions (after tax effects) projected to be reclassified to profit or loss within one year was
94,285 million yen (gain) as at 31 August 2015, and 54,154 million yen (gain) as at 31 August 2014.
1. Derivative transactions of which hedge accounting is not applied
Foreign currencies(Millions of
Average exchange rates
respective currency)
31 August
31 August
31 August
31 August
2014
2015
2014
2015
Foreign currency forward contracts
Over 1 year—
0.90
Buy USD (sell EUR)
—
8
(€/$)
(€/$)
Within 1 year
0.71
0.89
Buy USD (sell EUR)
5
13
(€/$)
(€/$)
—
1.33
—
22
Buy USD (sell SGD)
(SG$/$)(SG$/$)
1,056.10
1,131.13
Buy USD (sell KRW)
32
(KRW/$)(KRW/$)
30.05
31.58
Buy USD (sell TWD)
34
39
(TWD/$)(TWD/$)
32.99
33.47
Buy USD (sell THB)45
28
(THB/$)(THB/$)
1.08—
Buy USD (sell AUD)
8—
(AUD/$)(AUD/$)
12,230.00—
Buy USD (sell IDR)
6—
(IDR/$)(IDR/$)— 123 —

Contract principal(Millions of yen)
31 August
31 August
2014
2015

Fair value (Millions of yen)
31 August
31 August
2014
2015

—

1,117

—

(0)

535

1,507

20

(38)

—

2,585

—

162

364

282

(6)

11

3,634

4,680

(10)

181

4,672

3,167

(116)

239

879

—

1

—

682

—

(6)

—

2. Derivative transactions of which hedge accounting is applied
Foreign currencies(Millions of
Average exchange rates
respective currency)
31 August
31 August
31 August
31 August
2014
2015
2014
2015
Foreign currency forward contracts
Over 1 year
93.59
106.01
Buy USD (sell JPY)
5,229
5,659
(¥/$)
(¥/$)
—
0.88
Buy USD (sell EUR)
—
2
(€/$)
(€/$)
Within 1 year
88.08
95.11
Buy USD (sell JPY)
3,538
3,618
(¥/$)
(¥/$)
0.73
0.85
Buy USD (sell EUR)
104
123
(€/$)
(€/$)
1.26
—
Buy USD (sell SGD)
49—
(SG$/$)(SG$/$)—
32.20
Buy USD (sell TWD)—
117
(TWD/$)(TWD/$)—
3.70
Buy USD (sell MYR)—
10
(MYR/$)(MYR/$)—
14,052.00
Buy USD (sell IDR)—
5
(IDR/$)(IDR/$)—
1.30
Buy USD (sell AUD)—
23
(AUD/$)(AUD/$)
1,087.34
1,120.14
Buy USD (sell KRW)
247
413
(KRW/$)(KRW/$)
136.55139.05
Buy EUR (sell JPY)
4
6
(¥/€)
(¥/€)
—
0.001
Buy KRW (sell USD)—
2($/KRW)($/KRW)

Contract principal(Millions of yen)
31 August
31 August
2014
2015

Fair value (Millions of yen)
31 August
31 August
2014
2015

489,422599,999

44,07762,547

—

299

—

1

311,645

344,154

54,647

90,583

10,402

14,210

378

564

5,129

—

(32)

—

—

14,127

—

221

—

1,091

—

152

—

663

—

25

—

2,617

—

222

27,152

47,342

(827)

2,577

587

851

(12)

(49)

—

255

—

(12)

➁ Interest rate risk management
The Group’s interest-bearing borrowings are mainly loans with variable interest rates, but the Group maintains positions incash and cash equivalents that exceed the outstanding balance of its interest-bearing borrowings.
At present, the impact of interest payments on the Group is quite small. Consequently, the Group’s current level of interestrate risk is minor, and the Group has not performed any interest rate sensitivity analysis.
➂ Price risk management in equity instruments
The Group is exposed to the risk of price volatility in equity financial instruments. The Group holds no equity financial
instruments for short-term trading purposes.
The Group makes regular periodic checks of the market value of the equity financial instruments it holds, as well as thefinancial health of the issuers.
(6) Credit risk management
When the Group initiates ongoing transactions where receivables will be generated on an ongoing basis, the financedepartment manages the Group’s risk exposure by setting credit limits and credit periods, as needed.
Trade receivables encompass many customers spanning a wide range of industries and geographic regions. The Group
conducts regular credit checks of the companies it does business with, and when necessary takes appropriate protective
measures, such as requiring collateral.
The Group does not have excessively concentrated credit risk exposure to any single company or corporate group.
As for deposits and guarantees, the Group mitigates risk by conducting regular monitoring of the companies with which itdoes business for early detection of any worsening of their financial health.
— 124 —

➀ Financial assets and other credit risk exposure
Except for the items listed below, the carrying amounts after adjustment for impairment shown in the consolidated financial
statements represent the Group’s maximum exposure to credit risk before consideration of collateral assets.
(Millions of yen)
Maximum credit risk
As at
31 August 2014
Guaranteed liabilities

As at
31 August 2015
7—

The Company holds no properties or other credit enhancement as collateral for exposure to the credit risk described above.

— 125 —

➁ Past-due or impaired financial assets
Below is an aged analysis of financial assets whose due date had not passed as at each reporting date, and financial assetsthat are overdue whereof no asset impairment was recognized.
(Millions of yen)
Total

Within due date

Overdue amounts
Within 90 days

91 days to 1 year

Over 1 year

Balances as at 31 August 2014
Trade and other receivables(total)Allowance for doubtful accounts

47,94045,688

1,617

230

403

(511)

(255)

(7)

(17)

(231)

Trade and other receivables (net)47,42845,432

1,610

213

172

Other financial assets (total)
Allowance for doubtful accounts

80,490(76)

80,410
(76)

13
—

31
—

34
—

Other financial assets (net)80,41380,3331331

3445,45742,864

2,152

165

275

Balances as at 31 August 2015
Trade and other receivables(total)Allowance for doubtful accounts

(679)

(452)

(2)

(43)

(180)

Trade and other receivables (net)44,77742,411

2,150

121

95

Other financial assets (total)
Allowance for doubtful accounts

98,800(265)

98,681
(265)

10
—

77
—

30
—

Other financial assets (net)98,534

98,41510

77

30

The Group does not hold any collateral or other credit enhancements on the above financial assets.
When the Group recognizes impairment of a financial asset, it does not subtract the value of the impairment directly fromthe carrying amount. Rather, this is recorded as an allowance for doubtful accounts.
The main factors increasing/decreasing the Group’s allowances for doubtful accounts were as follows:(Millions of yen)
Allowance for
doubtful accounts(current)

Allowance for
doubtful accounts(non-current)

Balances as at 1 September 2013

488

78

567

Provision for the year
Decrease (intended purposes)
Others

216
(55)
(137)

76
—
(78)

292
(55)
(215)

Balances as at 31 August 2014

511

76

588

Provision for the year
Decrease (intended purposes)
Others

436
(26)
(241)

276
(24)
(63)

712
(51)
(304)

Balances as at 31 August 2015

679

265

945

— 126 —

Total

Where recoverability is uncertain, the Group conducts ongoing monitoring of the credit status of companies with which itdoes business, including receivables whose maturity date has been changed.
Based on the credit facts uncovered by this monitoring, the Group assess the recoverability of trade receivables, etc., andmakes provisions accordingly, in the form of allowances for doubtful accounts.
In addition, because the Group does business on a world-wide scale and its credit risk is distributed, it is not overly reliant on
any specific counterparty and faces minimal exposure to the impact of chain-reaction credit risk due to the worsening of thecredit conditions of any given counterparty.
Consequently, there is no need to record additional allowances for doubtful accounts based on credit risk concentration.

— 127 —

(7) Liquidity risk management
The Group manages liquidity risk by formulating and revising its funding plans on a timely basis and maintains an appropriate
level of liquidity on hand.
The ultimate responsibility for management of liquidity risk lies with the CFO appointed by the Board of Directors. The
finance department, under the direction of the CFO, performs the day-to-day aspects of liquidity risk management by
maintaining appropriate levels of surplus funds and bank loans, and by monitoring budgets and cash flows.

As at 31 August 2014
Non-derivative financial
liabilities
Trade and other payables
Long-term borrowings(excluding current portion)
Current portion of long-termborrowings
Short-term borrowings
Long-term finance leaseobligations
Short-term finance leaseobligations
Derivative financial liabilities
Foreign currency forward
contracts
Total
As at 31 August 2015
Non-derivative financial
liabilities
Trade and other payables
Long-term borrowings(excluding current portion)
Current portion of long-termborrowings
Short-term borrowings
Long-term finance leaseobligations
Short-term finance leaseobligations
Derivative financial liabilities
Foreign currency forward
contracts
Total

1 to 2years

More than
2 years
but within
3 years

More than
3 years
but within
4 years(Millions of yen)More than
4 yearsOver
but within
5 years
5 years

Carrying
amountContractual
cash flows

Less than
1 year185,119

185,119

185,119

—

—

—

—

—

18,295

18,295

—

4,809

2,074

3,112

4,149

4,149

4,809

4,809

4,809

—

—

—

—

—

2,857

2,857

2,857

—

—

—

—

—

7,705

7,705

—

3,140

2,429

1,634

500

—

3,894

3,894

3,894

—

—

—

—

—

1,012

—

223,693

222,680

196,680

7,950

4,504

4,746

4,649

4,149

181,577

181,577

181,577

—

—

—

—

—

15,884

15,884

—

2,536

3,654

4,847

4,847

—

5,236

5,236

5,236

—

—

—

—

—

4,652

4,652

4,652

—

—

—

—

—

8,073

8,073

—

3,495

2,720

1,488

368

—

4,188

4,188

4,188

—

—

—

—

—

100

—

219,713219,613

195,654

6,031

6,375

6,335

5,215

—

(Note)	Guaranteed obligations are not included in the above, as the probability of having to act on those guarantees isremote.

— 128 —

(8) Fair value of financial instruments(Millions of yen)
As at 31 August2014
Carrying amounts

As at 31 August 2015

Fair value

Carrying amounts

Fair value

Short-term borrowings
Long-term borrowings
Lease obligations

2,857
23,104
11,5992,857
22,065
11,3794,652
21,121
12,262

4,652
21,27012,197

Total

37,56136,302

38,035

38,120(Note)

Long-term borrowings and Lease obligations include 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, which are measured by amortized cost, approximate their carrying amounts.
The fair value of long-term borrowings and lease obligations are classified by term, and are calculated on the basis of
the current value applying a discount rate that takes into account time remaining to maturity and credit risk.

(9) Fair value hierarchy of financial instruments
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within thefair value hierarchy described as follows, based on the lowest level input that is significant to the fair value measurement as awhole:
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 isobservable, either directly or indirectly
Level 3 – based on valuation techniques for which the lowest level input that is significant to the fair value measurement isunobservable— 129 —

The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments:(Millions of yen)
As at 31 August 2014

Level 1

Level 2

Level 3

Total

Available-for-sale financial assets
Financial assets/(liabilities)
at FVTPL
Foreign currency forward
contracts designated as
hedging instruments

243

—

207

450

—

(118)

—

(118)

—

98,231—

98,231

Net amount243

98,112

207

98,563As at 31 August 2015

Level 1

Level 2

Level 3

Total

Available-for-sale financial assets
Financial assets/(liabilities)
at FVTPL
Foreign currency forward
contracts designated as
hedging instruments

363

—

210

574

—

556

—

556

—

156,834—

156,834

Net amount363

157,390210

157,964

For the valuation of level 2 derivative financial instruments for which a market value is available, we use a valuation modelthat uses observable data on the measurement date as indicators such as interest rates, yield curves, currency rates andvolatility in comparable instruments.
Non-listed shares 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.

— 130 —

30. Related Party Disclosures
Remuneration of key management personnel
Remuneration of the Group’s key management personnel is as below:(Millions of yen)
Year ended
31 August 2014

Year ended
31 August 2015

Short-term employee benefits

364

364

Total

364

364

Transactions with officers and major shareholders (individuals only), etc. of the reporting entity submitting these consolidated
financial statements
Year ended 31 August 2014 (from 1 September 2013 to 31 August 2014)

Name ofCategory Company or
Individual

Officer

Notes:

1.
2.
		

Toru
Murayama

Location—

CapitalStock orinvestment—

Businessdetails or
profession

Nonexecutive
Director

Percentage
Relationshipof shares
with relatedwith voting
partiesrights (%)

Direct0.00

Details oftransaction

Consulting
and advisory
agreements
Outsourcing
about trainingof management
personnel

Amount oftransaction(millions ofyen)Account

Balance at
31 August2014(millions of
yen)

18

Other
current
liabilities

1

Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.
Terms of transactions and policy for the terms
Transaction amounts were determined based on the negotiation with the related party considering market
prices.

— 131 —

Year ended 31 August 2015 (from 1 September 2014 to 31 August 2015)

Name ofCategory Company or
Individual

Officer

Notes:

1.
2.
		

Toru
Murayama

Location

CapitalStock orinvestment——

Businessdetails or
profession

Nonexecutive
Director

Percentage
Relationshipof shares
with relatedwith voting
partiesrights (%)

Direct0.00

Details oftransaction

Consulting
and advisory
agreements
Outsourcing
about trainingof management
personnel

Amount oftransaction(millions ofyen)Account

Balance at
31 August2015(millions of
yen)

18

Other
current
liabilities

1

Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.
Terms of transactions and policy for the terms
Transaction amounts were determined based on the negotiation with the related party considering market
prices.

31. Major subsidiaries
The Group’s major subsidiaries are as listed in “Corporate Profile 3. Subsidiaries and Associates”.
32. Commitments
The Group had the following commitments at each reporting date:(Millions of yen)
As at 31 August 2014
Commitment for the acquisition of property,
plant and equipment
Commitment for acquisition of intangible assets
Total

As at 31 August 2015

5,487

8,825

373

85

5,861

8,910

33. Contingent liabilities
Amount of guaranteed obligations
As at each reporting date, the Group has provided the following guarantees to financial institutions on loans payable ofemployees’ benefit society.
(Millions of yen)
As at 31 August 2014

As at 31 August 2015

Employees’ Benefit Society:
Fast Retailing Mutual Aid Society

7

—

Total

7

—

— 132 —

34. Subsequent Events
Year ended 31 August 2014
(1) The Issue of Share-based Compensation Stock Options (Share Subscription Rights)
Based on Articles 236, 238 and 240 of the Companies Act and on the decision taken by the Board of Directors at its
meeting held on 9 October 2014, the Company decided to issue share subscription rights as share-based compensation stock
options for the purpose of rewarding employees of the Company and its subsidiaries for their contribution to the Group’s
profit. By linking the Company’s stock price more closely to the benefits received by highly productive personnel, the sharesubscription rights program is designed both to boost staff morale and their motivation to improve group performance andto boost shareholder value by strengthening business development with a focus on shareholder return.
Please see “Stock Information and Dividend Policy 1. Stock Information (9) Stock Options Program” for details.
Year ended 31 August 2015
(1) The Issue of Share-based Compensation Stock Options (Share Subscription Rights)
Based on Articles 236, 238 and 240 of the Companies Act and on the decision taken by the Board of Directors at its
meeting held on 8 October 2015, the Company decided to issue share subscription rights as share-based compensation stock
options for the purpose of rewarding employees of the Company and its subsidiaries for their contribution to the Group’s
profit. By linking the Company’s stock price more closely to the benefits received by highly productive personnel, the sharesubscription rights program is designed both to boost staff morale and their motivation to improve group performance andto boost shareholder value by strengthening business development with a focus on shareholder return.
Please see “Stock Information and Dividend Policy 1. Stock Information (9) Stock Options Program” for details.
(2) Issuance of non-collateralized corporate bonds
At the Board of Directors meeting on 25 November 2015, a comprehensive decision was made to issue non-collateralized
corporate bonds, as detailed below.
(1) Amount to be issued

Up to 250 billion yen (may be issued in multiple tranches, up to a total of this amount)(2) Time frame

26 November 2015 to 5 November 2017(3) Amount of payment

100 yen per 100 yen face value(4) Interest rate

No more than 0.6 percentage point above the market yield of JGBs of comparable maturity(5) Term

Three years or more, up to 10 years(6) Redemption

Lump sum payment at maturity(7) Use of funds

Capital investment, operating funds, investments and/or repayment of other borrowings(8) Determination of termsof issuance

Decisions regarding amount to be issued, maturity, interest rate, payment date and other termsof issuance shall be made solely by the chairman, president and representative director, withinparameters determined by the Board of Directors.

— 133 —

(2) Others
Quarterly information for the year ended 31 August 2015
(Cumulative)

First quarter

Second quarter

Third quarter

Fiscal year

Revenue (Millions of yen)

479,543

949,684

1,348,114

1,681,781

Quarterly income before
income taxes andnon-controlling interests(Millions of yen)

106,745

163,666

210,282

180,676

Quarterly net income(Millions of yen)

68,826

104,753

132,364

110,027

Earnings per share (Yen)

675.301,027.75

1,298.60

1,079.42(Accounting period)
Quarterly earnings/(losses)
per share (Yen)First quarter

Second quarter

675.30352.47— 134 —

Third quarter
270.86

Fourth quarter(219.11)

2. Financial statements(1) Financial statements(i) Balance Sheet(Millions of yen)
As at 31 August 2014ASSETS
Current assets
Cash and deposits
Trade accounts receivable
Short-term investment securities
Short-term loans receivable fromsubsidiaries and affiliates
Income taxes receivable
Accounts receivable from subsidiaries and affiliates
Deferred tax assets
Others

As at 31 August 2015

46,673*1 12,679
131,622

145,192*1 11,818
39,943

Allowance for doubtful accounts

34,275
11,481
8,962
—
1,877
(1)

49,226
17,979
3,036
867
1,821
(0)

Total current assets

247,570

269,886

5,736

5,860

Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation*3(3,990)*3(4,412)

1,745

Buildings, net
Structures

1,448

298

Accumulated depreciation

Accumulated depreciation*3

Accumulated depreciation

(212)

91

86
1,475

(1,290)*3(1,355)

116

119

1,158
20

1,158
135

Tools, furniture and equipment, net
Land
Leased assets

*3

1,406

Structures, net
Tools, furniture and equipment

298

(207)

*3

*3

(15)

*3

(133)

4

2

3,116

2,815

Others

11,8495,403
80

10,1791,124
73

Total intangible assets

17,333

11,377439
74,922
11,069553
75,81012,629Allowance for doubtful accounts

24,034
5,314
1,310
(0)

29,898
5,986
1,051
(0)

Total investments and other assets

117,092

125,930

137,542

140,122385,113410,009

Leased assets, net
Total property, plant and equipment
Intangible assets
Software
Software in progress

Investments and other assets
Investment securities
Investments in subsidiaries and affiliates
Investments in capital of subsidiaries and affiliates
Long-term loans receivable fromsubsidiaries and affiliates
Leases and guarantee deposits
OthersTotal non-current assets
Total assets— 135 —

(Millions of yen)
As at 31 August 2014
LIABILITIESCurrent liabilities
Accounts payable
Accruals
Deposits received
Allowance for bonuses

As at 31 August 2015

3,178
1,173
*1 42,435
1,283
160

4,251
715
*1 23,939
1,614
521

48,231

31,043

Others

1,127
3,012
486

1,126
1,072
759

Total non-current liabilities

4,625

2,959

52,85734,002

10,273

10,273

OthersTotal current liabilities
Non-current liabilities
Guarantee deposits received
Deferred tax liabilities

Total liabilities
NET ASSETS
Shareholders’ equity
Capital stock
Capital surplus
Capital reserve

4,578

4,578

Other capital surplus

1,856

2,550

Total capital surplus

6,435

7,129

818

818

185,100
148,299

185,100
185,400

334,217371,318

Retained earnings
Legal reserve
Other retained earnings
Special reserve fundRetained earnings carried forward
Total retained earnings
Treasury stock(15,790)(15,699)

Total shareholders’ equity

335,136

373,023(4,515)329

Valuation and translation adjustments
Unrealized gains/(losses)
on available-for-sale securities
Total valuation and translation adjustments
Share subscription rights
Total net assets
Total liabilities and net assets— 136 —

(4,515)

329

1,634

2,654

332,255

376,007385,113410,009

(ii) Statement of Income(Millions of yen)
Year ended
31 August 2014
Operating revenue
Management income from operating companies*1

Dividends income from subsidiaries and affiliates*1Year ended
31 August 2015
26,481
50,957*1*130,26588,80577,438

119,071

Others

3,240
533
862
3,881
4,908
10,620
9,914

4,280
396
1,106
4,419
6,438
13,923
10,662

Total operating expenses

33,961

41,22743,477

77,84462

292

Others

86
3,508
96

39
11,218132

Total non-operating income

3,753

11,683

Others

14
294

42
239

Total non-operating expenses

308

282

46,921

89,245

Others

—
427
—

1,773
—
1

Total extraordinary income

427

1,775

—

*2

—

1,081

Impairment losses

23,499—15,591
6,530

Total extraordinary losses

23,49923,212

Income before income taxes

23,84967,808

Income taxes – deferred

(91)
605

586
(3,005)

Total income taxes

513(2,418)23,336(70,227)

Total operating revenue
Operating expenses
Selling, general and administrative expenses
Salaries
Bonuses
Allowance for bonuses
Rental expenses
Depreciation
Outsourcing expenses

Operating income
Non-operating income
Interest income
Interest income from investment securities
Foreign exchange gains

Non-operating expenses
Interest expenses

Ordinary income
Extraordinary income
Gain on sales of investments in short-term
investment securities
Gain from discharge of indebtedness

Extraordinary losses
Losses on retirement of non-current assets*2

Loss on sales of investments in short-term
investment securities
Impairment losses of investments
in investment securities

Income taxes – current

Net income— 137 —

9

(iii) Statement of Changes in Net Assets
Year ended 31 August 2014
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capitalstock

Capitalreserve

Other
capitalsurplusTotal
capitalsurplusLegalreserve

Specialreserve
fund

Retainedearnings
carriedforwardTotal
retainedearnings

4,578

1,384

5,963

818

185,100

155,534

341,452471

471

Dividends(30,571)(30,571)

Net income

23,33623,336

Balance at the beginning of year

10,273

Changes during the year
Exercise of share subscription
rightsAcquisition of treasury stock
Disposal of treasury stock
Net changes of items otherthan those in shareholders’equityNet changes during the year
Balance at the end of year

—

—

471

471

—

—

(7,234)(7,234)

10,273

4,578

1,856

6,435

818

185,100

148,299334,217

Valuation and translation
adjustments

Shareholders’ equity

Total
shareholders’equityTreasurystock

Balance at the beginning of year

(15,851)

341,838

Unrealized
gains/(losses) Total valuation
on available- and translation
for-saleadjustments
securities(6,980)(6,980)Share
subscription
rightsTotal
net assets

896

335,754

Changes during the year
Exercise of share subscription rights
Dividends
Net income

471

471

(30,571)(30,571)

23,33623,336

Acquisition of treasury stock

(25)

(25)

(25)

Disposal of treasury stock

86

86

86
2,464

2,464

738

3,203

60

(6,701)

2,464

2,464

738

(3,498)(15,790)

335,136(4,515)(4,515)

1,634

332,255

Net changes of items other thanthose in shareholders’ equity
Net changes during the year
Balance at the end of year

— 138 —

Year ended 31 August 2015
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capital
stock

Total
retainedearnings

Capitalreserve

Other
capitalsurplusTotal
capitalsurplusLegalreserve

Specialreserve
fund

Retainedearnings
carriedforward

4,578

1,856

6,435

818

185,100

148,299334,217694

694

Net income(33,126)(33,126)

Acquisition of treasury stock

70,22770,227

Balance at the beginning of year

10,273

Changes during the year
Exercise of share subscription
rightsDividends

Disposal of treasury stock
Net changes of items otherthan those in shareholders’equityNet changes during the year
Balance at the end of year

—

—

694

694

—

—

37,101

37,101

10,273

4,578

2,550

7,129

818

185,100

185,400

371,318

Valuation and translation
adjustments

Shareholders’ equity

Treasurystock

Balance at the beginning of year

(15,790)

Total
shareholders’equity335,136

Unrealized
gains/(losses) Total valuation
on available- and translation
for-saleadjustments
securities(4,515)(4,515)

Share
subscription
rightsTotal
net assets

1,634

332,255

Changes during the year
Exercise of share subscription rights

694

694

Dividends(33,126)(33,126)

Net income

70,22770,227

Acquisition of treasury stock

(11)

(11)

(11)

Disposal of treasury stock

102

102

102

Net changes of items other thanthose in shareholders’ equity
Net changes during the year
Balance at the end of year

4,845

4,845

1,019

5,865

90

37,886

4,845

4,845

1,019

43,751(15,699)

373,023

329

329

2,654

376,007— 139 —

Notes(Significant accounting policies)
1. Valuation methods for securities(a) Investments in subsidiaries and affiliates:
The Company’s investments in subsidiaries and affiliates are stated at cost. The cost of securities sold is determined byaverage method.
(b) Available-for-sale securities:(i) Listed securities:
Listed securities are stated at fair value, with fair value gains and losses, net of applicable taxes, reported as“unrealized gains/(losses) on available-for-sale securities”, a separate component of net assets. The cost of
securities sold is determined based on moving average cost method.
(ii) Unlisted securities:
Unlisted securities are stated at cost, which is determined by average method.
2. Depreciation method for non-current assets(a) Property, plant and equipment (other than leased assets)
Depreciation of property, plant and equipment is calculated using the straight-line method. The principal ranges of
estimated useful lives are as follows:
Buildings and structures
5–10 years
Tools, furniture and equipment
5 years(b) Intangible assets (other than leased assets)
Amortization of intangible assets is calculated using the straight-line method. The principal range of estimated usefullife is as follows:
Software for internal use
5 years(c) Leased assets
Assets held under capitalized finance leases are depreciated using the straight-line method over the lease terms atzero residual value.
3. Provision basis for allowances(a) Allowance for doubtful accounts
Provision for potential bad debts, loan loss ratios are recorded for general accounts receivable. Specified doubtful
accounts receivable are reviewed individually to determine their recoverability, and an estimate for the nonrecoverable portion is recorded.
(b) Allowance for bonuses
Bonuses to employees are accrued on the balance sheet date.
4. Other significant matter for the preparation of non-consolidated financial statements
Accounting for consumption tax
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.
(Changes in method of presentation)
The Notes prepared in accordance with the Ordinance on Terminology, Forms and Preparation Methods of Non-consolidated
Financial Statements, Article 127-2, have been changed to Notes prepared in accordance with the Ordinance on Company
Accounting.
The following items have been omitted.
•
Notes on lease transactions stipulated by the Rules Governing Term, Form and Presentation of Financial Statements,
Article 8-6, have been omitted, in accordance with Item 4 of the same Article.
•
Notes on asset retirement obligations stipulated by the Rules Governing Term, Form and Presentation of Financial
Statements, Article 8-28, have been omitted, in accordance with Item 2 of the same Article.
•
Notes on accumulated impairment stipulated by the Rules Governing Term, Form and Presentation of Financial
Statements, Article 26-2, have been omitted, in accordance with Item 5 of the same Article.
•
Notes on net assets per share stipulated by the Rules Governing Term, Form and Presentation of Financial Statements,
Article 68-4, have been omitted, in accordance with Item 3 of the same Article.
•
Notes on net income per share stipulated by the Rules Governing Term, Form and Presentation of Financial Statements,
Article 95-5-2, have been omitted, in accordance with Item 3 of the same Article.
•
Notes on diluted net income per share stipulated by the Rules Governing Term, Form and Presentation of Financial
Statements, Article 95-5-3, have been omitted, in accordance with Item 4 of the same Article.
•
Notes on treasury stock stipulated by the Rules Governing Term, Form and Presentation of Financial Statements, Article
107, have been omitted, in accordance with Item 2 of the same Article.
•
Notes on the detailed table of marketable securities, stipulated by the Rules Governing Term, Form and Presentation of
Financial Statements, Article 121-1-1, have been omitted, in accordance with Item 3 of the same Article.
— 140 —

(Notes to balance sheet)
1. Breakdown of assets and liabilities related to subsidiaries and affiliates which were not separately presented are as follows:(Millions of yen)
As at 31 August 2014
Trade accounts receivable
Deposits received

As at 31 August 2015

12,60042,167

11,73023,704

2. Contingent liabilities(Millions of yen)
As at 31 August 2014
Guarantees for office and retail store leases
Guarantees on loans payable to financial institutions

As at 31 August 2015

65,70023,132

94,814
20,916

3. Accumulated depreciation includes accumulated impairment losses.

(Notes to statement of income)1. Transactions related to the subsidiaries and affiliates are as follows:(Millions of yen)
Year ended
31 August 2014
Ordinary revenue:
Management income from operating companies
Dividends income from subsidiaries and affiliates

Year ended
31 August 2015

24,18950,957

27,78288,805

2. Breakdown of losses on retirement of non-current assets are as follows:(Millions of yen)
Year ended
31 August 2014
SoftwareYear ended
31 August 2015—9(Marketable securities)
As at 31 August 2014
Fair value of the shares of subsidiaries (74,922 million yen on balance sheet) is not described as they do not have market
price and the fair value is extremely difficult to determine.
As at 31 August 2015
Fair value of the shares of subsidiaries (75,810 million yen on balance sheet) is not described as they do not have market
price and the fair value is extremely difficult to determine.

— 141 —

(Deferred taxes)
1. Breakdown of the causes of deferred tax assets and deferred tax liabilities are as follows:(Millions of yen)
As at
31 August 2014
Deferred tax assets:
Allowance for bonuses
Depreciation
Write-down of shares in subsidiaries and affiliates
Impairment losses
Provision of allowance for doubtful accounts
Unrealised gains/(losses) on available-for-sale securities
Unused tax losses carried forward

As at
31 August 2015

508
338
25,898
—
0
1,641
1,173
2,827

596
402
28,471
2,158
0
—
641
2,518

32,387(32,387)

34,788(31,694)

—

3,093

(24)
(2,203)(784)—(1,944)(1,304)

Total deferred tax liabilities(3,012)(3,298)Net deferred tax liabilities(3,012)(204)

OthersSubtotal
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Asset retirement obligations
Temporary differences on shares of subsidiaries
Others

2. The differences between the effective tax rate after applying tax effect and the statutory income tax rate is as follows:(Millions of yen)
As at
31 August 2014
Statutory income tax rate
(adjustments)
Non-taxable dividend income
Increase/(decrease) in valuation allowance
Foreign withholding tax
Others
Effective tax rates after applying tax effect accounting

As at
31 August 2015

38.0%

35.6%

(80.7)
39.4
2.4
3.0

(46.4)
6.0
0.8
0.4

2.2

(3.5)

3. Revision of amount of deferred tax assets and liabilities following amendment of the rate of corporation tax, etc.
Based on the “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 9 of 2015) and “Act for Partial Amendment of
the Local Tax Act, etc.” (Act No. 2 of 2015), which were promulgated on 31 March 2015, a reduction in the corporation tax rate
was applied from the fiscal year commencing 1 April 2015. As a result, the effective statutory tax rate used in the calculation ofdeferred tax assets and liabilities has been revised from 35.6% to 33.0% with regard to temporary differences expected to beeliminated in the fiscal year commencing 1 September 2015, and to 32.2% with regard to temporary differences expected to beeliminated from the fiscal year commencing 1 September 2016.
The impact of this tax rate amendment on the financial statements is slight.

— 142 —

(Business Combination)
Not applicable.
(Notes on Significant Subsequent Events)
Year ended 31 August 2015 (1 September 2014–31 August 2015)(1) The Issue of Stock-based Compensation Stock Options (Share Subscription Rights)
Based on Articles 236, 238 and 240 of the Companies Act and on the decision taken by the Board of Directors at its
meeting held on 8 October 2015, the Company decided to issue share subscription rights as stock-based compensation stock
options for the purpose of rewarding employees of the Company and its subsidiaries for their contribution to the Group’s
profit. By linking the Company’s stock price more closely to the benefits received by highly productive personnel, the sharesubscription rights program is designed both to boost staff morale and their motivation to improve group performance andto boost shareholder value by strengthening business development with a focus on shareholder return.
Please see “Stock Information and Dividend Policy 1. Stock Information (9) Stock Options Program” for details.
(2) Issuance of non-collateralized corporate bonds
At the Board of Directors meeting on 25 November 2015, a comprehensive decision was made to issue non-collateralized
corporate bonds, as detailed below.
(1) Amount to be issued

Up to 250 billion yen (may be issued in multiple tranches, up to a total of this amount)(2) Time frame

26 November 2015 to 5 November 2017(3) Amount of payment

100 yen per 100 yen face value(4) Interest rate

No more than 0.6 percentage point above the market yield of JGBs of comparable maturity(5) Term

Three years or more, up to 10 years(6) Redemption

Lump sum payment at maturity(7) Use of funds

Capital investment, operating funds, investments and/or repayment of other borrowings(8) Determination of termsof issuance

Decisions regarding amount to be issued, maturity, interest rate, payment date and other termsof issuance shall be made solely by the chairman, president and representative director, withinparameters determined by the Board of Directors.

— 143 —

(iv) Associated details
Details of fixed assets

Types of assets

Balances as at
1 September
2014(Millions of yen)

Increase(Millionsof yen)Decrease(Millionsof yen)Accumulated
Depreciation,
depreciation
Balances as atamortizationor amortization
31 Augustduring the yearas at2015 (Millions(Millions
31 Augustof yen)of yen)2015 (Millionsof yen)Property, plant and equipment
Buildings
Structures
Tools, furniture and equipment
Land
Leased assets

1,745
91
116
1,158
4

124
—
68
—
486

—
—
—
—
365
(365)

421
4
65
—
124

1,448
86
119
1,158
2

4,412
212
1,355
—
133

Total property, plant andequipment

3,116

679

365
(365)

617

2,815

6,114

11,84910,204

5,874

10,179

—

5,403

797

—

1,124

—

20
59

3
—

5,999
(5,991)
5,077
(143)
190
—

10
0

13
58

—
—

17,333

11,055

11,076(6,135)

5,885

11,377—

Intangible assets
Software
Software in progress
Leased assets
OthersTotal intangible assets, total(Notes) 1. The main factors listed as increase during the year are as follows:
Types of assets
SoftwareAmount (Millions of yen)Contents

10,204 Construction cost for new system

2. The main factors listed as decrease during the year are as follows:
Types of assets

Amount (Millions of yen)Contents

Software5,991 Impairment losses

Software in progress

4,933

Construction cost for of new systems (transferred tosoftware as the new system was launched)

3. In the “Decrease” column, the figures in parentheses are included, and are the recorded impairment loss amounts.

— 144 —

Details of provisions(Millions of yen)
Categories
Allowance for doubtful accounts
Allowance for bonuses

Balance as at
1 September
2014

Decrease(Intendedpurposes)

Increase

Decrease(Otherpurposes)

Balance as at
31 August
2015

1

0

—

1

0

1,283

1,614

1,283

—

1,614

(Notes) Decrease (Other purposes) in “Allowance for doubtful accounts” is due to reversal of the allowances provided inprevious years.
(v) Main details of assets and liabilities
Omitted because the consolidated financial statements are prepared.
(3) Others
Not applicable.

— 145 —

Independent Auditors’ Report (Group)
Independent auditors’ report
To the Board of Directors of FAST RETAILING CO., LTD.
We have audited the accompanying consolidated financial statements of FAST RETAILING CO., LTD. (the “Company”) and its
subsidiaries (together, the “Group”), which comprise the consolidated statement of financial position as at 31 August 2015,
and the consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement ofchanges in equity and consolidated statement of cash flows for the year then ended, and a summary of significant accounting
policies and other explanatory information.

Management’s responsibility for the consolidated financial statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordancewith International Financial Reporting Standards, and for such internal control as management determines is necessary toenable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.

Auditors’ responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. Our report is madesolely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any otherperson for the contents of this report.
We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks
of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of theconsolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Groupas at 31 August 2015, and its financial performance and cash flows for the year then ended in accordance with International
Financial Reporting Standards.
Ernst & Young ShinNihon LLC
27 November 2015

— 146 —

Independent Auditors’ Report (Company)
Independent auditors’ report
To the Board of Directors of FAST RETAILING CO., LTD.
We have audited the accompanying financial statements of FAST RETAILING CO., LTD. (the “Company”), which comprise thebalance sheet as at 31 August 2015, and the statement of income and statement of changes in net assets for the year thenended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with generally
accepted accounting principles in Japan, and for such internal control as management determines is necessary to enable thepreparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. 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 for thecontents of this report.
We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors
consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order todesign audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of thefinancial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at
31 August 2015, and its financial performance for the year then ended in accordance with generally accepted accounting
principles in Japan.
Ernst & Young ShinNihon LLC
27 November 2015

— 147 —

Internal Control Report
1. Basic framework of internal control in connection with financial reporting
Chairman, President and CEO Tadashi Yanai and Chief Financial Officer Takeshi Okazaki hold responsibility for the preparationand management of internal controls in connection with financial reporting for the Company and its consolidated subsidiaries(hereinafter, the “Group”). The preparation and management of internal controls in connection with financial reporting areconducted in accordance with the basic framework of internal controls described in the “On the Setting of the Standards andPractice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting — Council
Opinions”, published by the Business Accounting Council.
The basic elements of our internal controls are organically interconnected, and function as a single whole. Our aim is to achieve
their purposes within a reasonable range. For this reason, these internal controls on financial reporting may not completely
prevent or discover all misstatements in the financial reports.

2. Scope of evaluation, book-close dates, and evaluation procedures
The internal control evaluation of our financial reports was made on 31 August 2015, which was the last day of the fiscal year
under review. This evaluation was made using generally accepted internal control evaluation standards for financial reports.
This evaluation was started with an evaluation of internal controls that have a significant influence on our consolidated financial
reports as a whole (company-wide internal controls). The operational processes to be evaluated were selected on the basis of
this evaluation. In the evaluation of these operational processes, the selected operational processes were analyzed, and the
key points of internal controls that might have a significant influence on the credibility of financial reports were categorized.
Then, the status of preparation and operation was evaluated in terms of these key points of internal controls to determine theeffectiveness of the internal controls.
The scope of the evaluation of the internal controls on financial reporting is of great importance, both fiscally and qualitatively,
for the credibility of the Group’s financial reports. The methods and procedures employed are:Based on the principle that the operational procedures for the entire Company’s internal controls, accounts, and financial
reports should best be evaluated from a company-wide perspective, these evaluations are performed for the Group as a whole.
However, because some consolidated subsidiaries are very small, both fiscally and qualitatively, they are not included within thescope of the evaluation.
Regarding operational procedures, based on the results of the company-wide evaluation of internal controls, and as an indicatorof sales (adjusted to exclude intra-group sales) for each of our businesses in the fiscal year under review, those businesses thatmake up roughly two-thirds of consolidated sales in the fiscal year under review are designated “important businesses.” Theselected important businesses are evaluated in terms of broad indicators such as sales, accounts receivable, inventories andother operational procedures. Next, the impact on the Group’s financial reports is calculated. Those operational proceduresthat are of particular importance are added to the evaluation process.

3. Results of evaluation
Based on the evaluation results discussed above, it was determined that the Group’s internal controls on financial reports wereeffective as of the end of the fiscal year under review.

4. Additional items
None

5. Special items
None— 148 —

Confirmation Note
1. The Company’s Chairman, President and CEO Tadashi Yanai and Chief Financial Officer Takeshi Okazaki have reviewed thecontents of the financial reports for the Company’s 54th fiscal year (September 1, 2014 — August 31, 2015), and confirm they
are true, based on the Financial Instruments and Exchange Law.
2. Special items
None— 149 —