FAST RETAILING CO., LTD.
迅銷有限公司

Year-end Report 2019/20
2019.9.1–2020.8.31
Stock Code: 6288

Contents
1. Corporate Information

1

2. Financial Highlights

2

3. Corporate Profile

4

4. Management Discussion and Analysis

12

5. Capital Expenditures

29

6. Stock Information and Dividend Policy

32

7. Corporate Governance Report52

8. Board of Directors

61

9. Financial Information

80

Consolidated Financial Statements

81(1) Consolidated statement of financial position

81(2) Consolidated statement of profit or loss

83(3) Consolidated statement of comprehensive income

84(4) Consolidated statement of changes in equity

85(5) Consolidated statement of cash flows

87(6) Notes to the consolidated financial statements

89

Non-Consolidated Financial Statements

161(1) Balance sheet

161(2) Statement of income

163(3) Statement of changes in net assets

164(4) Notes

166(5) Supplementary schedule

170(6) Main details of assets and liabilities

171(7) Others

171

Independent Auditor’s Report (Group)

172

Independent Auditor’s Report (Company)

177

Internal Control Report

179

Confirmation Note180

1. Corporate Information
Board of Directors
Representative Director

Principal Place of Business in Japan
Midtown Tower 9-7-1,

Tadashi Yanai (Chairman, President and CEO)Akasaka, Minato-ku,
Tokyo 107-6231
Japan

Directors
Takeshi Okazaki
Kazumi Yanai

Principal Place of Business in Hong Kong
702–706, 7th Floor, Mira Place Tower A

Koji Yanai

No. 132 Nathan Road
Tsim Sha Tsui

External Directors
Toru Hambayashi

KowloonHong Kong

Nobumichi Hattori
Masaaki Shintaku

HDR Registrar and HDR Transfer Office

Takashi Nawa
Naotake Ohno

Computershare Hong Kong Investor Services Limited
Shops 1712–1716, 17th Floor

Board of Statutory Auditors

Hopewell Centre
183 Queen’s Road East

Akira Tanaka
Masaaki Shinjo

WanchaiHong Kong

Masumi Mizusawa
Keiko Kaneko (External)

Stock Code

Takao Kashitani (External)
Masakatsu Mori (External)

Hong Kong: 6288
Japan: 9983

Company Secretary

Website Address

Shea Yee Man

http://www.fastretailing.com

Independent Accountants
Deloitte Touche Tohmatsu LLC
Principal Banks
Sumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
The Hong Kong and Shanghai Banking Corporation Limited
Registered Office and Headquarters
10717-1 Sayama, Yamaguchi City,
Yamaguchi 754-0894
Japan

- 1 -

2. Financial Highlights
A. Consolidated Financial Summary
Term

Accounting Period
Revenue (Millions of yen)International Financial Reporting Standards (“IFRS”)
55th Year

56th Year

57th Year

58th Year

59th Year

Year ended
Year ended
Year ended
Year ended
Year ended
31 August 2016 31 August 2017 31 August 2018 31 August 2019 31 August 2020
1,786,473

1,861,917

2,130,060

2,290,548

2,008,846

Operating profit (Millions of yen)

127,292

176,414236,212257,636

149,347

Profit before income taxes (Millions of yen)

90,237

193,398

242,678

252,447

152,868

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

48,052

119,280

154,811

162,578

90,357

Comprehensive income attributable toowners of the Parent (Millions of yen)(141,345)

190,566

165,378

140,900

110,134

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

574,501

731,770

862,936

938,621956,562

Total assets (Millions of yen)

1,238,119

1,388,486

1,953,466

2,010,558

2,411,990

Equity per share attributable to owners of the
Parent (Yen)

5,634.35

7,175.35

8,458.52

9,196.61

9,368.83

Basic earnings per share for the year (Yen)

471.31

1,169.70

1,517.71

1,593.20

885.15

Diluted earnings per share for the year (Yen)

470.691,168.00

1,515.23

1,590.55

883.62

Ratio of equity attributable to owners of the
Parent to total assets (%)

46.4

52.7

44.2

46.7

39.7

Ratio of profit to equity attributable toowners of the Parent (%)

7.3

18.3

19.4

18.0

9.5

Price earnings ratio (times)

77.1

26.9

34.1

39.1

71.5

Net cash generated by operating activities(Millions of yen)

98,755

212,168

176,403

300,505

264,868

Net cash (used in) / generated by investing
activities (Millions of yen)

(245,939)

122,790(57,180)(78,756)(75,981)

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

201,428(50,836)

198,217(102,429)(183,268)

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

385,431

683,802

999,697

1,086,519

1,093,531

Number of employees:

43,63944,424

52,83956,52357,727(26,282)(31,719)(71,840)(80,758)(70,765)(Separate, average number of temporary
employees)(Notes) 1. Revenue does not include consumption taxes, etc.
2. The Group started to prepare the consolidated financial statements in accordance with IFRS for the year ended 31 August
2014.
3. The number of junior employees and part-time workers is stated as a separate number in parentheses as the average numberof people per year was calculated based on an eight-hour workday per person until the 56th year, but from the 57th year, theaverage number of registered personnel for the year is stated.

- 2 -B. Non-Consolidated Financial Summary
Term
Accounting period

55th Year

56th Year

57th Year

58th Year

59th Year

Year ended
Year ended
Year ended
Year ended
Year ended
31 August 2016 31 August 2017 31 August 2018 31 August 2019 31 August 2020

Operating revenue (Millions of yen)

99,289139,871

193,044

184,910

156,356

Ordinary profit (Millions of yen)

9,270

115,488

139,660

106,000

78,211

Net profit (Millions of yen)

6,084

64,264

122,158

106,11362,422

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)345,773

377,103463,229

521,706

538,954

Total assets (Millions of yen)

631,086

670,111

993,413

1,054,758

1,063,356

Equity per share (Yen)

3,355.83

3,654.97

4,489.50

5,053.07

5,207.74

Dividends per share

350.00350.00440.00480.00480.00(185.00)(175.00)(200.00)(240.00)(240.00)

Basic net profit per share (Yen)

59.68

630.201,197.59

1,039.87

611.50

Diluted net profit per share (Yen)

59.60

629.28

1,195.63

1,038.14

610.44Equity ratio (%)

54.2

55.6

46.1

48.9

50.0

Earnings on equity (%)

1.7

18.0

29.4

21.8

11.9

Price earnings ratio (Times)

608.9

49.9

43.3

59.5

103.5

Dividend ratio (%)

586.5

55.5

36.7

46.2

78.5

Number of employees:

1,131

1,166

1,345

1,389

1,589

(126)

(140)

(267)

(11)

(8)

74.5

65.3

107.5

129.6

132.7

(88.3)(109.8)(120.3)(107.4)(117.9)Highest share price (Yen)

50,70044,37054,51070,23070,180

Lowest share price (Yen)

25,30530,46030,00047,04039,910Total number of shares issued (shares)(Figures in parentheses indicate interim
dividends) (Yen)(Separate, average number of temporary
employees) (Persons)Total shareholder return (%)(Compared with TOPIX Total Return
Index)(Notes) 1. Operating revenue does not include consumption taxes, etc.
2. The number of junior employees and part-time workers is stated as a separate number in parentheses as the average numberof people per year calculated based on an eight-hour workday per person until the 56th year, but from the 57th year, theaverage number of registered personnel for the year is stated.
3. Up until the 57th year, contract employees and fixed-term employees were included in the average number of temporary
employees, but from the 58th year, they are included in the number of employees.
4. The highest and lowest share prices are from the first section of the Tokyo Stock Exchange.

- 3 -3. Corporate Profile
A. 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 (now 2-1212 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 its approach tobusiness.

April 1992

The main Ogori Shoji store, selling menswear, is converted to the UNIQLO Onda store (closed in 2001).
All the stores are completely renovated as casual clothing stores matching the UNIQLO brand.

April 1994
July 1994

The number of UNIQLO stores in Japan rises above 100 (109 directly operated stores, 7 franchises).
FAST RETAILING CO., LTD. lists its shares on the Hiroshima Stock Exchange.

April 1997
February 1998

FAST RETAILING CO., LTD. lists its shares on the second section of the Tokyo Stock Exchange.
Construction of the head office is finished (717-1 Sayama, Yamaguchi City, Yamaguchi Prefecture) toNovember 1998

expand the Company’s headquarters capacity.
The first urban UNIQLO store opens in Shibuya-ku, Tokyo (UNIQLO Harajuku store, closed in 2007).

February 1999
April 1999

FAST RETAILING CO., LTD. lists its shares on the first section of the Tokyo Stock Exchange.
UNIQLO Shanghai office opens to further enhance production management.

April 2000
October 2000

Tokyo headquarters opens in Shibuya-ku, Tokyo.
Online store launches to open a new sales channel and make shopping easier for customers.

September 2001
September 2002

FAST RETAILING (U.K) LTD. opens first four UNIQLO stores in London.
Fast Retailing (Jiangsu) Apparel Co., Ltd. opens first two UNIQLO China stores in Shanghai.

January 2004

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

August 2004
November 2004

Capital reserves of ¥7 billion integrated into capital, increasing total capital to ¥10.273 billion.
Establishment of UNIQLO USA, Inc.

March 2005
April 2005

Establishment of UNIQLO HONG KONG, LIMITED.
Establishment of FR FRANCE S.A.S. (now FAST RETAILING FRANCE S.A.S.) and GLOBALMay 2005

RETAILING FRANCE S.A.S. (now UNIQLO EUROPE LIMITED).
Acquires management control of Nelson Finance S.A.S. (now CRÉATIONS NELSON S.A.S.), theNovember 2005

developer of the COMPTOIR DES COTONNIERS brand, and makes it a subsidiary.
Adopts a holding company structure to reinforce the UNIQLO brand and develop new businessFebruary 2006

opportunities.
Makes equity investment in, and makes a subsidiary of, PETIT VEHICULE S.A.S. (now PRINCESSE

March 2006

TAM. TAM S.A.S.), developer of PRINCESSE TAM.TAM, a well-known brand of lingerie in France.
Establishes G.U. CO., LTD. to manage a new brand of less expensive casual clothing to follow
UNIQLO.

- 4 -

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.

November 2007
December 2007

UNIQLO 311 Oxford Street Store opens in London as the brand’s first global flagship store in Europe.
First UNIQLO France store opens in the Paris suburbs La Defense.

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

April 2009
October 2009First UNIQLO Singapore store opens in the Tampines 1 Mall.
UNIQLO Paris Opera Store opens in France as a global flagship store.

March 2010
April 2010

UNIQLO establishes a wholly owned subsidiary in Taiwan.
First UNIQLO Russia store, UNIQLO Atrium, opens in Moscow.

May 2010
October 2010

UNIQLO Shanghai West Nanjing Road Store opens in China as a global flagship store.
UNIQLO Shinsaibashi Store in Osaka opens as the first UNIQLO global flagship store in Japan.

October 2010
October 2010

First GU flagship store opens in Shinsaibashi, Osaka.
First UNIQLO Taiwan store opens in Taipei.

November 2010
February 2011

First UNIQLO Malaysia store opens in Kuala Lumpur.
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 AllProduct Recycling Initiative.

September 2011
September 2011

First UNIQLO Thailand store opens in Bangkok.
UNIQLO Mingyao Department Store opens in Taipei, Taiwan as a global flagship store.

October 2011
November 2011UNIQLO Fifth Avenue Store opens in New York as a global flagship store.
UNIQLO Myeongdong Central Store opens in Seoul, Korea as a global flagship store.

March 2012
June 2012
September 2012
December 2012
April 2013

UNIQLO Ginza Store opens in Tokyo as a global flagship store.
First UNIQLO Philippines store opens in Manila.
BICQLO Shinjuku East Exit Store opens in Tokyo as a global hotspot store.
FAST RETAILING acquires a majority interest in U.S. J Brand Holdings, LLC based in Los Angeles,
California.
UNIQLO Lee Theatre opens in Hong Kong as a global flagship store.

June 2013
September 2013

UNIQLO Lotte Shopping Avenue Store opens as the first UNIQLO Store in the Republic of Indonesia.
UNIQLO global flagship store opens in Shanghai.

September 2013
March 2014

First GU overseas store opens in Shanghai.
HDRs (Hong Kong Depository Receipts) listed on the Main Board of The Stock Exchange of Hong

March 2014

Kong Limited.
UNIQLO global hotspot store opens in Ikebukuro, Sunshine 60.

April 2014
April 2014

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

April 2014
October 2014

UNIQLO global hotspot store opens in Tokyo, Okachimachi district.
UNIQLO global hotspot store opens in Tokyo, Kichijoji.

October 2014
October 2015

UNIQLO global flagship store, UNIQLO OSAKA, opens.
First UNIQLO Belgium store opens in Antwerp.

October 2015
December 2015

UNIQLO USA opens its first Midwest store, the UNIQLO Michigan Avenue Store in Chicago.
Fast Retailing issues ¥250 billion in unsecured straight bonds.

March 2016

The newly refurbished 311 Oxford Street global flagship store opens in London.

- 5 -

Date

Summary

April 2016
September 2016

Construction completed on state-of-the-art distribution center in Ariake, Tokyo.
UNIQLO Orchard Road Store opens as the first UNIQLO global flagship store in Southeast Asia.

September 2016
February 2017

First UNIQLO Canada store opens in Toronto.
UNIQLO CITY TOKYO Ariake Office opens. UNIQLO product and commercial functions moved from

September 2017

Roppongi Office to Ariake Office.
First UNIQLO Spain store opens in Barcelona.

June 2018
August 2018

Issues ¥250 billion worth of unsecured straight bonds.
Sweden’s first UNIQLO store opens in Stockholm.

September 2018
October 2018

The Netherlands’ first UNIQLO store opens in Amsterdam.
UNIQLO Manila Store, UNIQLO’s global flagship store, opens in the Philippines.

October 2018
April 2019

Fast Retailing entered into a logistics-related strategic global partnership with Daifuku Co., Ltd.
Denmark’s first UNIQLO store opens in Copenhagen.

September 2019
September 2019

Italy’s first UNIQLO store opens in Milan.
Office functions of GU and PLST move to Ariake Office.

October 2019
November 2019

India’s first UNIQLO store opens in New Delhi.
Fast Retailing entered into a logistics-related strategic global partnership with MUJIN, Inc. and Exotec

December 2019

Solutions SAS.
First UNIQLO Vietnam store opens in Ho Chi Minh City.

April 2020
June 2020

Opening of UNIQLO PARK Yokohama Bayside Store, a large-scale store for families.
Opening of UNIQLO Harajuku Store, a state-of-the-art store combining the real and virtual.

June 2020

Opening of UNIQLO TOKYO, Japan's largest global flagship store, in Ginza.

- 6 -B. Our Business
The Group consists of FAST RETAILING CO., LTD. (the “Company”), 134 consolidated subsidiaries, and 4 associates accounted
for using the equity method.
Details of the Group’s businesses as well as the positioning of the Company and its main associates relative to the businesses are as
follows.
The segment categories in this section of the report are the same as the segment categories in the section headed “9. Financial
Information (6) Notes to the consolidated financial statements.”
Category
Holding company

Main consolidated subsidiaries

Company name

Reportable Segment

FAST RETAILING CO., LTD.

OthersUNIQLO CO., LTD.

UNIQLO Japan

FAST RETAILING (CHINA) TRADING CO., LTD.*UNIQLO International

UNIQLO TRADING CO., LTD.*UNIQLO International

FAST RETAILING (SHANGHAI) TRADING CO., LTD.*UNIQLO International

FRL Korea Co., Ltd.

UNIQLO International

FAST RETAILING (SINGAPORE) PTE. LTD.

OthersUNIQLO (THAILAND) COMPANY LIMITEDUNIQLO International

PT. FAST RETAILING INDONESIAUNIQLO International

UNIQLO AUSTRALIA PTY LTD

UNIQLO International

Fast Retailing USA, Inc.

OthersUNIQLO EUROPE LIMITEDUNIQLO International

UNIQLO VIETNAM Co., Ltd

UNIQLO International

UNIQLO INDIA PRIVATE LIMITEDUNIQLO International

G.U. CO., LTD.

GUGU (Shanghai) Trading Co., Ltd.*GUFAST RETAILING FRANCE S.A.S.

Others

Theory LLC

Global Brands

PLST CO., LTD.

Global Brands

COMPTOIR DES COTONNIERS S.A.S.

Global Brands

PRINCESSE TAM.TAM S.A.S.

Global Brands

J Brand, Inc.

Global Brands

Other consolidated subsidiaries (113 companies)

UNIQLO International /GU / Global Brands /Others

Associates accounted for using theequity method

Associates accounted for using the equity-method(4 companies)

Others* The English names of all subsidiaries established in the People’s Republic of China (“PRC”) are translated for identification only.
(Notes) 1. “UNIQLO” business means the retail business of UNIQLO brand casual apparel in Japan and overseas.
2. “GU” business means the retail business of GU brand casual apparel in Japan and overseas.
3. “Global Brands” business means the planning, retail, and manufacturing of apparel in Japan and overseas.
4. “Others” includes real estate leasing businesses.
5. The Company corresponds to a specified listed company, etc. as stipulated in Article 49-2 of the Cabinet Office Ordinanceon Restrictions on Securities Transactions. As a result, assessment of the minimal standard for material facts under theinsider trading regulations is based on the consolidated numerical data.
- 7 -The organizational structure is as follows:Business Structure* The English names of all subsidiaries established in PRC are translated for identification only.

- 8 -C. Subsidiaries and Associates
Name

Location(Consolidated subsidiaries)

Yamaguchi City,UNIQLO CO., LTD.

Yamaguchi Prefecture

FAST RETAILING (CHINA)TRADING CO., LTD.*UNIQLO TRADING CO., LTD.*
FAST RETAILING (SHANGHAI)
TRADING CO., LTD.*FRL Korea Co., Ltd.
FAST RETAILING (SINGAPORE)
PTE. LTD.

UNIQLO VIETNAM Co., Ltd
UNIQLO INDIA PRIVATE LIMITED
G.U. CO., LTD.

UNIQLO Japan

100.0%-

100.0%-

Shanghai, PRC

USD30,000

UNIQLO International

100.0%-

Shanghai, PRC

USD35,000

UNIQLO International

100.0%-KRW24,000,000

UNIQLO International

51.0%

-

Others100.0%-

Seoul, South Korea
Republic of Singapore

Kingdom of Thailand

UNIQLO EUROPE LIMITED

Jakarta,Republic of Indonesia
Melbourne, Australia
New York, UnitedStates of America
London, United
Kingdom
Ho Chi Minh, Vietnam
New Delhi
Republic of India
Yamaguchi City,
Yamaguchi Prefecture

SGD86,000
THB1,200,000

UNIQLO International

IDR115,236,000

UNIQLO International

AUD21,000

UNIQLO International

USD1,441,621

75.0%
75.0%
100.0%(100.0%)

Others100.0%

GBP40,000

UNIQLO International

100.0%USD15,800

UNIQLO International

INR2,000,000

UNIQLO International

100.0%

JPY10,000

GU

100.0%
100.0%FAST RETAILING FRANCE S.A.S.

Paris, France

EUR101,715

Others100.0%PLST CO., LTD.
COMPTOIR DES COTONNIERS
S.A.S.
PRINCESSE TAM.TAM S.A.S.
J Brand, Inc.
Other consolidated subsidiaries (113
companies)
Associates accounted for using theequity method (4 companies)

Global Brands

JPY10,000

Global Brands

Paris, France

EUR24,593

Global Brands

Paris, France

EUR20,464

Global Brands

USD396,340

Global Brands

Yamaguchi City,
Yamaguchi Prefecture

California, UnitedStates of America

Loans
Loan guarantees
Loans
Loan guarantees

75.0%

GU

USD116,275

Loans

-

(75.0%)USD20,000

States of America-(75.0%)

Shanghai, PRC

New York, United-(75.0%)GU (Shanghai) Trading Co.,Ltd.*

Theory LLC

Relationship

UNIQLO International

Bangkok,Fast Retailing USA, Inc.

Ownership ratioof voting rights

USD20,000

LIMITEDUNIQLO AUSTRALIA PTY LTD

JPY1,000,000

Details of main
businesses

Shanghai, PRC

UNIQLO (THAILAND) COMPANY

PT. FAST RETAILING INDONESIA

Nominal value of
issued ordinary /registered share capital(Thousands)

Loans
Loans
Loans
Loan guarantees

100.0%-(100.0%)100.0%
100.0%(100.0%)100.0%(100.0%)100.0%(100.0%)

Loans
-

-

-

-

-

-

-

-

-

-

-

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

- 9 -(Notes) 1. The information given in the “Details of main businesses” column is the name of the business segment.
2. UNIQLO CO., LTD., FAST RETAILING (CHINA) TRADING CO., LTD., UNIQLO TRADING CO., LTD., FASTRETAILING (SHANGHAI) TRADING CO., LTD., FRL Korea Co., Ltd., FAST RETAILING (SINGAPORE) PTE. LTD.,UNIQLO (THAILAND) COMPANY LIMITED, PT. FAST RETAILING INDONESIA, UNIQLO AUSTRALIA PTY
LTD, Fast Retailing USA, Inc., UNIQLO EUROPE LIMITED, UNIQLO VIETNAM Co., Ltd., UNIQLO INDIA
PRIVATE LIMITED, GU (Shanghai) Trading Co.,Ltd. , FAST RETAILING FRANCE S.A.S., COMPTOIR DES
COTONNIERS S.A.S., PRINCESSE TAM. TAM S.A.S. 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 a Groupsubsidiary.
4. Net sales (excluding internal sales between other member companies of the consolidated Group) of UNIQLO CO., LTD.,
FAST RETAILING (CHINA) TRADING CO., LTD., and G.U. CO., LTD., are greater than 10% of consolidated revenue.
Key elements of profit / loss and financial position for the year ended 31 August 2020 are as below.
UNIQLO CO., LTD.
(1) Revenue(2) Profit before income taxes

806,887 million yen
104,648 million yen(3) Profit for the year(4) Total equity

73,051 million yen
204,318 million yen(5) Total assets

622,236 million yen

FAST RETAILING (CHINA) TRADING CO., LTD(1) Revenue
340,533 million yen(2) Profit before income taxes(3) Profit for the year

51,861 million yen
38,871 million yen(4) Total equity(5) Total assets

137,445 million yen
220,946 million yen

G.U. CO., LTD.,(1) Revenue(2) Profit before income taxes

231,419 million yen
24,379 million yen(3) Profit for the year(4) Total equity

16,067 million yen
23,115 million yen(5) Total assets

126,229 million yen- 10 -

D. Employees(a) The GroupAs at 31 August 2020
Name of segment

Number of employees

UNIQLO Japan

13,259(29,562)

UNIQLO International

32,630(26,264)

GU

5,263

(13,697)

Global Brands

3,763(1,031)

54,915(70,554)

Others

1,223

(203)

All companies (shared)

1,589

(8)

57,727(70,765)

Total for reportable segments

Total(Notes) 1. The number of employees does not include operating officers, junior employees, part-time workers, or temporary staff
seconded from other companies.
2. The average number of registered personnel for junior employees and part-time workers for the year are shown in brackets( ).
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 2020.
(b) The Company
As at 31 August 2020
Number of employees
1,589

(8)

Average age

Average number of years
with the Company

37 years and 10 months

4 years and 3 months

Average annual wages(thousands of yen)
9,013

(Notes) 1. The number of employees does not include operating officers, junior employees, part-time workers or temporary staff
seconded from other companies.
2. The average number of registered personnel for junior employees and part-time workers for the year are shown in brackets( ).
3. Figures for average annual wages include bonuses and other non-standard payments.
4. All of the Company’s employees are categorized as “All companies (shared).”(c) Status of labor unions
There are no labor unions at the Company, but unions have been formed at some subsidiary companies. Management- labor
relations have been smooth, and there are no special items to report.

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4. Management Discussion and Analysis
A. Business Plan
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 2020).
The COVID-19 coronavirus wielded its fury throughout the world in FY2020. The impact of the pandemic on the world economy
has been even worse than the 2008 global financial crisis and represents the biggest crisis in post-war history. We have made it ourpriority to protect the health and daily lives of customers, employees, business partners, and local communities, and attentively
address demands from broader society. We are directing clothing support to help people in need and facing the crisis worldwide by
donating medical masks, isolation gowns, and AIRism and HEATTECH products.
Having said that, it is precisely at times like these that we want to press ahead with making clothes that prize our LifeWear concept
for ultimate quality everyday wear and deliver a great sense of satisfaction to customers. The ultimate LifeWear we seek to create
is simple, quality clothing born of a desire to satisfy everyday needs and enrich all people’s lives everywhere. We are developing
LifeWear that fulfills different customers’ daily needs not only at UNIQLO, but at GU and other Group brands as well. The way
consumers select clothes is changing as COVID-19 changes the way we lead our lives. We are witnessing a growing need for
clothing that fits comfortably and let people relax rather than dress up. The changes currently taking place worldwide are sparking
deeper empathy for our LifeWear values among a greater number of people. We believe we can further expand our business byadvancing LifeWear to suit customers’ changing everyday needs.
While we will likely witness more uncertainty in the global economy going forward, Greater China and the whole area stretchingfrom Southeast Asia through to India harbors have great potential as the center of future global economic growth. Our LifeWear
clothing concept is already well established and supported by customers in Greater China and Southeast Asia. We have also
enjoyed a strong reception in India, with many customers flocking to our first stores as soon as they opened in October 2019. We
expect to see dramatic growth in middle-income populations in these regions as economies continue to develop. We have alreadybuilt solid management platforms in Asian markets, which puts us in an advantageous position in terms of future growth potential.
Fast Retailing’s medium-term vision is to become the world’s number one apparel retailer. In pursuit of this aim, we focus ourefforts on expanding UNIQLO International, as well as our GU brand and our global e-commerce operation. We continue toincrease UNIQLO store numbers in all markets and areas in which we operate, and open global flagship stores and large-format
stores in major cities around the world to instill deeper and more widespread empathy for UNIQLO’s LifeWear concept. Greater
China and Southeast Asian operations, which are both in their growth stages, serve as the key pillars of our UNIQLO International
operation. GU is establishing a position as a brand offering fun fashion at low prices and currently expanding its operation
primarily in Japan. The sale of e-commerce operation has been doubled over the past three years on the back of stronger efforts tolink physical and online stores and an expansion in online services.
We intend to accelerate initiatives in the following areas to help us become the world’s number one digital consumer retailingcompany for apparel.
(a) Initiatives to Combat COVID-19
We conduct operational activities in such a way as to prioritize and protect the health and daily living of customers, employees,
business partners, and local communities. We have taken several measures to prevent the spread of COVID-19 in our stores andhead office by introducing the wearing of masks, the measurement of body temperature, entry restrictions during congested
periods, and working from home initiatives. We are helping partner factories provide working environments where factory
employees can feel safe and comfortable. We are also donating medical masks, isolation gowns, AIRism and HEATTECH
products to support people in need or facing crisis around the world, and we intend to continue doing whatever we can to help
through our clothing business.
(b) Promote Global One Management Principles
We have been actively promoting Global One and Zen-in Keiei management principles to unify UNIQLO, GU, Theory andother Group brands worldwide, encouraging employees to use the best available global methods and pursue a self-motivated,united global approach to any challenge. Our deep-rooted management principles focus on introducing Groupwide, global
business processes, while respecting local culture, values and history. Our FR Management Innovation Center (FR-MIC) is also
working hard to nurture future managers and corporate leaders.

- 12 -

(c) Advancing our LifeWear Ultimate Everyday Clothing
We intend to continue creating world-class LifeWear to meet the everyday needs of customers of all ages worldwide. We not
only incorporate fashion-related information collected worldwide into our R&D, but also seek to improve products and develop
new products based on customer opinions voiced in our stores and via our e-commerce operations. We intend to exploit ourability to instantly develop the products that customers desire not only at UNIQLO, but at GU and other Group brands as well.
(d) Progressing our Transformative Ariake Project
In order to continue creating truly amazing LifeWear, we are pursuing a bold Groupwide transformation through our Ariake
Project, which aims to understand exactly what customers want right now and instantly turn those desires into products for
speedy delivery. We intend to achieve faster product development spurred by customer opinion, more accurate demand
forecasting and inventory control, quicker lead times on additional production orders, sweeping distribution reform through theintroduction of automated warehouses, initiatives that successfully merge our physical and e-commerce store networks, andmore expansive services.
(e) Further Expansion of UNIQLO International
UNIQLO International is the key driver of Group growth. We intend to further expand operations by continuing to open large
numbers of new stores particularly in the Greater China and Southeast Asia & Oceania regions. We aim to move our UNIQLO
operation in the United States into the black at the earliest possible opportunity, open more large-format stores in major
European cities in order to strengthen our brand power, and improve profitability by expanding e-commerce operations. We will
work on brand-building measures to nurture a deeper empathy for UNIQLO’s LifeWear concept among customers worldwide.
(f) Further Growth for UNIQLO Japan
UNIQLO Japan has established a position for LifeWear and is approaching a new stage of growth. We aim to achieve further
growth by developing products to match people’s changing everyday lifestyles, and creating new points of communication withcustomers by better melding our physical store and e-commerce operations. In addition to expanding e-commerce services, wewill also be looking to deploy our scrap and build policy of replacing less profitable stores with larger ones so we can build aJapan store network that is better suited to today’s new ways of living. We also intend to deepen local store management withsteadfast community roots so we can better develop product ranges and services that fully satisfy local demand.
(g) Growing GU
GU has a strong reputation in low-priced fun fashion, but, by proactively pursuing Ariake Project elements, GU can aim topolish its ability to develop products that perfectly capture mass fashion trends, improve the accuracy of product planning, andestablish a production system that boasts shorter lead times. We are working to further strengthen GU ‘s development of evenmore competitive low-priced products by reforming the operation’s materials procurement and production processes. We plan
to continue opening more GU stores in Japan and press ahead with store openings in Greater China and other international
markets.
(h) Pursue initiatives to solve sustainability issues
Befitting our position as a leading global apparel brand, Fast Retailing strives to help solve environmental, social and corporate
governance (ESG) issues in order to realize a sustainable society. We pursue multiple initiatives to help monitor and regulate
the manufacture of clothing, including improving factory working environments, upholding human rights, protecting theenvironment, promoting diversity, and strengthening governance. We also work proactively to achieve concrete targets andcommitments defined under our six specific materialities.

- 13 -

B. Risk(1) Policy
The Group has established a Risk Management Committee directly under the Board of Directors to serve as an organization toregularly identify potential risks in business activities, pinpoint critical risks, and establish and strengthen its risk management
structure. Chaired by the Group CFO, the Committee centrally manages risk for the entire company. The Committee analyzes
and evaluates how much and how often a risk impacts business, and discusses countermeasures starting with the mostsignificant risks. It aims to establish a system to keep risks in check before they occur, and achieve a rapid resolution to risks
that have occurred. It also reports critical risks to the Board of Directors and provides concrete support to each department
regarding risk countermeasures.

- 14 -

(2) Individual risks
Of the risks pertaining to the status of businesses and accounting as described in the year-end report, the following are the mainrisks that if recognized would have a particularly large impact on the Group's operating results and financial situation. Futurerisks discussed in the descriptions below are based on the Group's assessment as of the date of publication of this document. In
addition, the following list of risks is not exhaustive and may be affected in the future by risks that are unforeseeable or not
perceived to be critical as at the date of publication of this document. Furthermore, risks that are not indicated to have "alreadymaterialized" in the "Risk Description and Effects on the Group" column have not yet resulted in material risks, and both thelikelihood and timing of their materialization remains uncertain.
Risk Item

Risk Description and Effects on the Group

Main Group Initiatives

Risk of the large-scale, global
spread of infectious diseases

The large-scale, global spread of infectious
diseases such as COVID-19 may cause

Led by the Company-wide Emergency
Response Headquarters established by the(including COVID-19)

difficulties in the production and supply of
products to stores due to infection among

Risk Management Committee, the Groupdevelops medical evidence-based infection

employees of the Group and its partners, as wellas due to measures enacted to prevent the spread

prevention measures aided by advice
received from experts, and implements suchof the disease.
In particular, the global spread of COVID-19 has

measures at all Group offices and stores
while ensuring all Group employees fully

already materialized risks that have had negative
effects on the entire Group, including theunderstand them. In addition to providing
supplier factories with guidelines for

shutdown of production plants, logistical delays,
restricted store hours, and more.

improving their hygiene management toprevent infection at factories and for
employee remuneration if factories are forced
to shut down, we also have measures in place
to support the financial stability of our
production partners.
In order to ensure that all customers can shopwith peace of mind, in our stores we take all
possible measures to prevent infection, andfurther request that all customers entering
stores comply with the Group’s infection
countermeasures.

Management personnel risk

Members of the Group's management team, led

In each of the Group's businesses, we haveby Chairman, President and CEO Tadashi Yanai,
play a major role in their respective areas ofestablished a team-based executive
management structure to ensure that decision

responsibility. If any officer becomes unable tofulfill his or her duties and the Group is unable-making and execution of duties are notdependent on specific management

to find any personnel who can take on thoseimportant responsibilities, this could have an

personnel. In addition, in each business, themanagers themselves personally train theadverse impact on business performance.

management personnel who will be theirsuccessors in those positions.
We also actively recruit globally active
management talent on an ongoing basis, andwe have established dedicated educational
institutions to educate and train our hired
talent into managers.

- 15 -

Risk Item

Risk Description and Effects on the Group

Main Group Initiatives

Country risks and risks
pertaining to international

The majority of products sold through the Group's To prepare for such risks, the Group isbusinesses are produced in China and other Asian moving forward with establishing a supply

affairs

countries. In addition, we are actively expanding chain that can respond flexibly to changes inGroup businesses overseas, and overseas business international conditions. This includes
groups account for a growing ratio of our net
sales.
As a result, the Group's product production,
supply, and sale infrastructure may be adversely
impacted by events in countries and regions inwhich we manufacture products and conductbusiness, due to factors including changes inpolitical or economic conditions, social disorder
or deterioration of public safety due to terrorism
or conflicts, changes in legal or tax systems, orthe occurrence of large-scale natural disasters
such as earthquakes, strong winds, or water
disasters. For example, the boycotting ofJapanese products in South Korea and thepolitical instability in Hong Kong have had asignificant impact on our performance in thesecountries and regions.

dispersing production sites across multiple
countries and regions, as well establishingproduction management offices at our main
production hubs to enable the timely
monitoring of and quick response to local
circumstances.
We also have accounting, tax, and legal
specialists stationed at Group companies'
offices to ensure that we can respond quickly
and appropriately in the event that a riskmaterializes.
With respect to cross-border tensions anddeteriorating racial relations in specificcountries and regions, the Group as a global
company aims to contribute to the resolutionof social issues in countries and regions inwhich we operate, and to achieve a lasting
peaceful co-existence and co-prosperity inthe communities within each region andcountry.

Environmental risks

As regulations on greenhouse gas emissions andthe transition to renewable energy sources are

Led by the Sustainability Committee, we
persist in continually implementing concrete

being implemented on a global scale in order tofight climate change, we may lose the public's

and highly effective initiatives under ourEnvironmental Policy, with which we musttrust in the Group if we are slow to respond.
There is also the risk that the increase in extreme

ensure medium to long-term compliance as aGroup, in five priority areas: Addressing

weather due to climate change may adversely
affect our product supply systems and our

climate change, improving energy efficiency,
managing water resources, improving waste

business as a whole.
Failure to properly reduce waste emissions,management and resource efficiency, andmanaging chemical substances.

pursue recycling initiatives, and manage
chemical substances may result in the public
losing trust in the Group brand.

- 16 -

Risk Item
Large-scale disaster risks

Risk Description and Effects on the Group

Main Group Initiatives

Large-scale disasters such as earthquakes,
typhoons, volcanic eruptions, fires, storms andLed by the Risk Management Committee, weare committed to establishing an

floods, explosions, and collapsed buildings canadversely affect our product production, productinfrastructure by which, in the event of an
actual or potential major earthquake or othersupply systems, product sales systems, and also
our management infrastructure in areas where

major disaster, we have an emergency
command system prepared, run by thethere are head offices, retail stores, andproduction plants for products sold by the

Emergency Response Headquarters to:ensure the safety of customers, employees,

Group.

and related personnel; mitigate damage tobusiness resources; prevent secondary
disasters; develop infrastructure for quickly
restoring business; prepare crisis
management manuals and promote the global
implementation of those manuals.

Risks related to resource
management and theDisasters, climate change, and other factors may
cause escalating prices or difficulty in procuring

We have entered into procurementagreements with multiple suppliers so that we

procurement of raw materials

the raw materials (such as cotton, cashmere,
down, etc.) used in the products sold by theare able to source reasonably priced raw
materials, without having to rely on a specificGroup's businesses. If these risks materialize, theGroup's product supply systems andsupplier for a specific raw material.

performance may be adversely affected.
Information security risks

In the course of our e-commerce and otherbusinesses, the Group handles customer

In order to ensure that confidential
information held by the Group is properly

information (including personal information),trade secrets, and other confidential information.

managed, we have established an Information
Security Office under the direction of a Chief

If such sensitive information were to be leakedor lost, we would need to respond by recovering

Security Officer (CSO) who oversees theentire Group. Working in cooperation with

the information and paying damages tocustomers. This may adversely affect our

the IT and legal departments of each country
and region in which we operate, thebusiness performance and lead to loss of trust
among our customers. In addition, if aInformation Security Office builds andimproves the infrastructure needed togovernment were to determine that we are inviolation of legal regulations that restrict theproperly manage sensitive information(especially customers' personal information)transfer of personal information between
countries and regions, such as the EU's Generalin anticipation of external attacks, internal
fraud and various other incidents. This is

Data Protection Regulation (GDPR), we may
lose customers' trust and be subject to significant

done by putting in place infrastructure,evaluating our administrative processes andfines that would negatively impact our businessperformance.

ours contractors, establishing andstandardizing internal rules, and conducting
regular educational and awareness activities
in each business division.

- 17 -

Risk ItemIntellectual property risks

Risk Description and Effects on the Group

Main Group Initiatives

Intellectual property rights apply in relation to
the Group's products and the latest technologies

In order to address these intellectual property
risks, the Group has a dedicated department

used in all kinds of areas, including productmanagement, store operations, and e-commercein place dealing with intellectual property.
This department investigates infringements

websites. These rights not being licensed to us
by their owners would present difficulties in ourduring product development and during theimplementation of technologies, and in an

use of these technologies or in supplying
products. In addition, if these technologies or

effort to prevent infringements of intellectual
property rights also runs educational andproducts were to infringe on the intellectual
property rights of others, we may be liable toawareness activities for Group employees. In
addition, we actively take steps to acquire thepay substantial damages or license fees that may
adversely affect our business performance.

rights to new technologies that we develop.
Furthermore, we monitor markets in theOn the other hand, the Group is committed toinvesting significant resources in productcountries and regions in which we operate orplan to expand, and cooperate with local

development in order to meet the potential needsof our customers. If the Group's products were tolegal departments, local law firms, andgovernment agencies to gather information

be copied by third parties and sold at low prices,
this may negatively impact our business

about counterfeit products and otherintellectual property infringements. In theperformance.

event that infringement can be confirmed orif we fear such an infringement may haveoccurred, we work with local legal
departments and local law firms to quickly
consider our course of action, including alegal response.

Human rights risks

All of the Group's businesses operate an SPA
business model which integrates all stages of the

Our supply chain policy is based on our viewthat our most important responsibility is tobusiness process, from products being designed
by each business, to them being directly

respect the basic human rights of all people
working in the supply chain of Groupprocured from factories and then delivered tocustomers. The supply chain involved in thisbusinesses, whether they are employees of
the Group or of our business partners, and to

SPA business model includes many of ourbusiness partners' employees, as well as those of

ensure those employees' physical and mental
health, safety, and peace of mind. We have

the Group.
Within the business system, deterioration inalso developed human rights guidelines,
provide code of conduct (COC) training,

working environment or in health and safety,
human rights violations such as harassment oroperate an employee hotline, and conduct
regular reviews in order prevent human rights

discriminatory behavior, or other such acts thatsignificantly infringe on the human rights ofviolations from occurring.
In addition, led by our Sustainability

those affected may result in the Group losing thetrust of our customers and suppliers, andDepartment, we are committed tomaintaining and improving suitable working

consequently may negatively impact the supply
and sale of our products.

environments through monitoring work
environments at supplier factories, andoperating hotlines for the employees of thosefactories.
In the event that a human rights violation
does occur, in addition to the Human Rights
Committee investigating and deliberating on
the matter, we also have in place aframework for providing mental healthcare
for the victim.

- 18 -

Risk Item

Risk Description and Effects on the Group

Main Group Initiatives

Risks originating from business

The Group conducts business with many

In order to avoid entering into business

partners

suppliers and business partners, which presents avariety of risks associated with business partners

relationships with inappropriate partners, allGroup companies carry out credit checks as

involved in product planning, production,transportation, and sales.

necessary when entering into a transaction
with a new business partner. In addition, in

These risks include the possibility that ourpartners may not share the values and principles

order to build appropriate business
relationships with all of our partners, theof the Group, which may lead to a drop in
business efficiency, or the possibility that aGroup has established Business Partner
Conduct Guidelines and conducts business

partners financial status may make it difficult for
us to adequately collect on receivables. These

only with those partners who agree to andcomply with those guidelines.

possibilities can have an adverse effect on ourbusiness performance, and furthermore may

For example, in response to the risks
associated with dealing with delivery

result in our unintentionally engaging inbusiness with anti-social organizations (e.g.

operators and warehouse operators, each of
our businesses has logistics personnel incriminal groups and individuals) or violations oflaws on the part of our partners. If these risks

place who are in constant communication
with our delivery and warehouse-operatingwere to materialize, they may lead to a loss oftrust in the Group among our customers andbusiness partners. These personnel are onhand to promptly report any problems thatsociety.
In addition, for example during thearise in product shipping or storage to local
management and the Global Logistics

transportation of products by delivery operatorsor while products are being stored at a

Headquarters, a system which enables themto promptly consider and action a response.

warehouse, products may be destroyed,
damaged, or stolen as a result of a natural
disaster or human behavior, or it may not be
possible to complete a transaction due to a
problem arising with our partner or with local
laws and regulations.
Impairment risks

As a general rule, the Group considers each store
as a small unit that generates an independent

We apply impairment accounting to quickly
identify signs of impairment, quickly identify

cash flow. We apply impairment accounting onthat basis to determine the likelihood of a return

unprofitable stores, and to ensure properaccounting. Furthermore, we strive toon investment in a timely manner.
If profitability decreases due to changes in theunderstand the underlying cause of a store's
drop in profitability, and develop

business environment, impairment losses may berecorded under property, plant, and equipment

fundamental profitability improvement plans
for them.

and right-of-use assets, among others. Due to theapplication of IFRS 16 from August 2020
onward, impairment losses when profitability
decreases are now larger than before, due toincreases in right-of-use assets on the balance
sheet.

- 19 -

Risk Item

Risk Description and Effects on the Group

Main Group Initiatives

Foreign currency risks

Many of the products handled by each of theGroup's businesses are imported from overseas

In order to mitigate foreign exchange
volatility in our international businesses, we

production plants. Fluctuations in the currencies
of settlement may have an adverse effect on our

have forward exchange contracts that extend
several years into the future based on our

performance of each business. The Group as awhole has financial assets in a variety ofprocurement forecasts. In this process, theGroup Board of Directors discusses andcurrencies in line with where we operate ourbusinesses. Fluctuations in exchange rates

approves specific hedging policies such ashedge ratios, time periods, and other aspects,

against yen, which is the Group's functional
currency, can have a major impact on financial

taking into account their contribution to ourfinancial security. In addition, the Board ofgains and losses.

Directors discusses the viability of thecurrencies in which our financial assets are
held.

Risks arising from changes in

In each country and region in which the Group's

We collect timely information on thethe business environment

businesses operates, changes in the businessenvironment, such as inclement weather andproducts required by customers in the
countries and regions in which the Group'schanges in consumption trends, may result indrops in product sales and the accumulation ofbusinesses operate. We have theinfrastructure in place to immediately

excess inventory, negatively impacting ourbusiness performance.

commercialize those products as well as toproduce and sell the quantity required,responding to changes in the businessenvironment as flexibly as possible.

- 20 -

C. Management’s Discussion and Analysis of Consolidated Financial Condition, Results of Operations and Cash Flows(1) Summary of Business Results(a) Business Results
The Fast Retailing Group’s revenue and profit declined in fiscal 2020, or the twelve months from 1 September 2019 to 31
August 2020. Consolidated revenue totaled 2.0088 trillion yen (-12.3% year-on-year) and operating profit totaled 149.3 billion
yen (-42.0% year-on-year). This weak performance was caused primarily by large falls in both revenue and profit in the second
half from 1 March to 31 August 2020 due to COVID-19, which prompted us to temporarily close stores in markets worldwide
over a period of a few months and knocked customer visits lower as people refrained from going out. This worsening in businessperformance also prompted the recording of impairment losses on stores and other assets of 23.0 billion yen for the full businessyear. The consolidated gross profit margin declined by 0.3 point year-on-year in fiscal 2020 and the selling, general andadministrative expense ratio rose by 2.8 points year-on-year. We recorded a net 3.5 billion yen from foreign-exchange gains,
finance income, and other items under finance income net of costs. As a result, profit before income taxes declined to 152.8
billion yen (-39.4% year-on-year) and profit attributable to owners of the Parent declined to 90.3 billion yen (-44.4% year-onyear) in the twelve months to 31 August 2020.
Capital expenditure declined by 2.4 billion yen year-on-year in fiscal 2020 to 82.7 billion yen. That figure can be broken down
into 17.8 billion yen for UNIQLO Japan, 23.5 billion for UNIQLO International, 8.5 billion yen for GU, 2.4 billion yen for
Global Brands, and 30.4 billion yen for systems, etc. While we increased our investment in IT systems and warehousing as partof our Groupwide transformative Ariake Project and invested more heavily in global flagship stores and large-format stores at
UNIQLO Japan, the overall capital expenditure figure declined slightly year-on-year due to a reduction in new stores openings
primarily at UNIQLO International.
UNIQLO Japan
UNIQLO Japan reported a decline in revenue but a rise in profit in fiscal 2020, with revenue declining to 806.8 billion yen (7.6% year-on-year) and operating profit expanding to 104.6 billion yen (+2.2% year-on-year). Meanwhile, fiscal 2020 samestore sales (including e-commerce) declined 6.8% year-on-year. In the first half from 1 September 2019 through 29 February
2020, same-store sales declined 4.6% year-on-year after sales of warm clothing struggled during the warm winter weather. In thesecond half from 1 March through 31 August 2020, same-store sales declined by 9.6% year-on-year as the spread of COVID-19
prompted us to temporarily close a maximum of 311 stores during the period from late March through to early May 2020, andcustomer visits declined as people were encouraged to stay at home. However, same-store sales rebounded by an impressive
20.2% year-on-year in the fourth quarter from 1 June through 31 August 2020 after we reopened our stores thanks to strong salesof core Summer ranges, products designed to satisfy stay-at-home demand, and AIRism face masks.
Meanwhile, UNIQLO Japan e-commerce sales increased 29.3% year-on-year in fiscal 2020 to 107.6 billion yen, raising the
proportion of online sales to total revenue from 9.5% to 13.3%. Of particular note in the second half, we successfully
strengthened our ability to convey e-commerce information through digital advertising and TV commercials and significantly
increased the number of new online customers by launching limited-period special prices for our registered app users. Theseelements helped generate an impressive 54.7% year-on-year increase in second-half e-commerce sales. The UNIQLO Japangross profit margin rose 2.4 points year-on-year in fiscal 2020 as yen-based exchange rates on product purchasing continued toappreciate and we decided to restrict any excessive discounting of products to attract customers. UNIQLO Japan’s selling,
general and administrative expense ratio increased by 1.0 point year-on-year in fiscal 2020, but those expenses declined year-onyear in monetary terms. As a result of the above, UNIQLO Japan was able to record a slight increase in operating profit for thefull business year.

- 21 -UNIQLO International
UNIQLO International recorded significant declines in both revenue and profit in fiscal 2020, with revenue falling to 843.9
billion yen (-17.7% year-on-year) and operating profit contracting to 50.2 billion yen (-63.8% year-on-year). This weak
performance was primarily due to large declines in revenue and profit in the second half on the back of COVID-19 and therecording of full-year impairment losses for the segment of 15.8 billion yen mainly on operations in South Korea and the UnitedStates. However, e-commerce sales increased by roughly 20% year-on-year as our online operations continue to expand
favorably in all markets.
Breaking down the UNIQLO International performance into individual regions and markets, UNIQLO Greater China (Mainland
China, Hong Kong, and Taiwan) reported a decline in revenue and a significant contraction in operating profit, with revenue forthe year totaling 455.9 billion yen (-9.3% year-on-year) and operating profit totaling 65.6 billion yen (-26.3% year-on-year).
However, Greater China performance improved at a faster pace than predicted from March onwards as local support for our
LifeWear concept grew and customers increasingly recognized LifeWear products as essential items for daily living. Greater
China e-commerce sales continued strong, expanding by approximately 20% year-on-year in fiscal 2020. Sales at UNIQLOSouth, Southeast Asia & Oceania (Southeast Asian nations, Australia, and India) declined by approximately 13% year-on-year
to 150.0 billion yen and operating profit shrank by approximately 40% year-on-year in fiscal 2020. Having performed extremely
well in the first half to generate double-digit growth in both revenue and profit, the region was heavily impacted by COVID-19
in the second half. While it will take some time for sales to recover in the Philippines and Indonesia, which were hit especiallyhard by COVID-19, sales in other parts of the region began recovering favorably from June onwards. In South Korea, samestore sales declined significantly and the operation posted an operating loss on the back of ongoing Japan-South Korea tensions
and the impact of COVID-19. In North America (USA and Canada), nearly all our stores were closed from the middle of Marchthrough to the end of June. Changes in the social climate from June onwards and a resurgence in COVID-19 infections resulted
in a large decline in revenue and a wider operating loss for the full year through 31 August 2020. UNIQLO Europe was also hit
hard by COVID-19 with many stores being closed temporarily and a huge decline in tourist numbers knocking revenue lower
and resulting in a slight operating loss for the full year.
Fast Retailing continued to aggressively enter new markets over the period with the first UNIQLO store opening in Milan, Italyin September 2019, the first store opening in New Delhi, India in October 2019, and the first store opening in Ho Chi Minh City,
Vietnam in December 2019. While all those markets were impacted by COVID-19, UNIQLO Italy managed to post a full-year
profit, and the Vietnam operation, which was only launched in December 2019, turned a profit in the second half.
GU
Our GU segment recorded an increase in revenue but a decline in profit in fiscal 2020, with revenue reaching 246.0 billion yen(+3.1% year-on-year) and operating profit totaling 21.8 billion yen (-22.5% year-on-year).
GU Japan same-store sales (excluding e-commerce sales) increased in the first half on the back of strong sales of knitwear that
perfectly captured the mass fashion trend as well as lightweight outerwear. However, the impact of COVID-19 in the second
half resulted in a 5.2% year-on-year decline in GU Japan same-store sales for the full year. That said, same-store sales did start
to recover favorably in the fourth quarter, recording a 2.2% year-on-year increase for that quarter on the back of standout salesof products that captured mass fashion trends and products that fulfilled stay-at-home demand. Full-year e-commerce sales
performed strongly, expanding by approximately 60% year-on-year on the back of fewer shortages of popular products and more
powerful transmission of attractive product-related information. The GU gross profit margin declined 0.7 point year-on-year infiscal 2020 compared to the extremely strong performance in the previous year and also due to our continued rundown of excess
Spring Summer inventories. The GU selling, general and administrative expense ratio rose 1.8 points year-on-year in fiscal 2020
following a large decline in revenue in the second half.
Global Brands
The Global Brands segment reported large declines in both revenue and profit in fiscal 2020, with revenue totaling 109.6 billion
yen (-26.9% year-on-year) and the segment reporting an operating loss of 12.7 billion yen compared to a 3.6 billion yen
operating profit in the previous year. This weak performance was due primarily to the large impact of COVID-19 in the UnitedStates and Europe, which resulted in continued losses for our France-based COMPTOIR DES COTONNIERS and PRINCESSE
TAM.TAM brands and our US-based J Brand label and also forced our Theory operation into the red. That new operating loss
for Theory was generated by a significant decline in revenue resulting from temporary store closures and stay-at-home practices
as well as strong discounting of stock. Our PLST brand also saw revenue decline due to COVID-19, resulting in a slight fullyear operating loss. COMPTOIR DES COTONNIERS stores were temporarily closed for nearly two whole months resulting ina large decline in revenue and continued operating losses for the full business year.

- 22 -

Sustainability
We continue to promote sustainability activities globally through our clothing business under the motto "From the power ofclothing to the power of society," focusing on six main areas (materialities). Our main activities for the current period areoutlined
below.
■ Consideration for the environment: During 2020, we plan to reduce the use of plastic in shopping bags and product packaging
by 85% (about 7,800 tons) across the entire Fast Retailing Group by decreasing the amount of plastic we use and switching toenvironmentally friendly materials such as recycled paper. In addition to our existing re-use initiatives for UNIQLO products,
UNIQLO in Japan has been reclaiming old down and reusing the feathers in new down products since November 2019, as partof our goal to utilize raw materials more efficiently. UNIQLO also launched the high-performance, fast-drying "DRY-EX" lineof polo shirts, developed in cooperation with Toray Industries, Inc. using recycled polyester from PET bottles, in the 2020
spring/summer season.
■ Respect for human rights and working conditions in the supply chain: To help keep our manufacturing partners and factory
employees safe and secure from COVID-19 infection, we provide thorough guidance on preventing the spread of infection whileworking in factories. We have also established a help desk for wage compensation and other employment-related issues arisingfrom the closure of our factories, to help support and compensate our employees fairly.
■ Community co-existence and mutual support: We have donated around 15 million masks to medical facilities around theworld that are battling the virus, and about 1.2 million isolation gowns (a piece of protective equipment for use in medical
settings) to healthcare organizations in Japan. We have also donated around 520,000 items of UNIQLO clothing (as at the end of
July 2020), including AIRism and HEATTECH products and down jackets, to organizations supporting vulnerable members ofsociety and medical institutions. In Japan, we provide support for those affected by various natural disasters. We have donatedrelief supplies, including disposable masks, UNIQLO products and sneakers, to around 20,000 people affected by the Kyushu
floods in July 2020.
■ Employee satisfaction: In our stores, we are prioritizing the health of customers and employees by instituting policies such as
health checks for staff members, mask-wearing and hand-sanitizing, to help prevent the spread of COVID-19. In order to makeour locations a safe and secure place for our employees to work, we are providing masks and disinfectant, and increasing
ventilation. We are also promoting working from home for relevant roles.
■ New value creation through products and sales: Masks have become an essential part of people's lives to help prevent the
spread of COVID-19, so in June 2020 we launched the AIRism Mask in UNIQLO stores around the world. We are continuing tolisten to customer feedback, and utilizing it to develop better masks.
■ Good management (governance): The Risk Management Committee is continually discussing and planning our response toissues such as COVID-19, the risk of major disasters such as an earthquake occurring in Tokyo, and information security risks.
The Human Rights Committee is also in discussion over anti-harassment measures and the development of training programs.

- 23 -

(b) Cash Flow Information
Cash and cash equivalents as at 31 August 2020 increased by 7.0 billion yen from the end of the preceding fiscal year, to 1.0935
trillion yen.
(Operating Cash Flows)
Net cash generated by operating activities for the year ended 31 August 2020 was 264.8 billion yen, which was a decrease of
35.6 billion yen (-11.9 % year-on-year) from the year ended 31 August 2019. The principal factors were 177.8 billion yen in
depreciation and amortization (an increase of 129.3 billion yen from the year ended 31 August 2019), 152.8 billion yen in profit
before income taxes (a decrease of 99.5 billion yen from the year ended 31 August 2019), a decrease of 44.5 billion yen in otherliabilities (a decrease of 81.4 billion yen from the year ended 31 August 2019), an increase of 2.6 billion yen in inventories (adecrease of 40.8 billion yen from the year ended 31 August 2019) and an increase of 18.6 billion yen in trade and otherpayables (an increase of 35.0 billion yen from the year ended 31 August 2019).
(Investing Cash Flows)
Net cash used in investing activities for the year ended 31 August 2020 was 75.9 billion yen, which was a decrease of 2.7
billion yen (-3.5 % year-on-year) from the year ended 31 August 2019. The principal factors were a net increase of 5.2 billion
yen in bank deposits with original maturity over three months (a decrease of 6.1 billion yen from the year ended 31 August2019), 46.5 billion yen in payments for property, plant and equipment (an increase of 4.9 billion yen from the year ended 31
August 2019), and 21.0 billion yen in payments for intangible assets (a decrease of 3.1 billion yen from the year ended 31
August 2019).
(Financing Cash Flows)
Net cash used in financing activities for the year ended 31 August 2020 was 183.2 billion yen, which was an increase of 80.8
billion yen (+78.9 % year-on-year) from the year ended 31 August 2019. The principal factors were 141.2 billion yen in
repayments of lease liabilities (an increase of 141.2 billion yen from the year ended 31 August 2019), 30.0 billion yen in
repayment of redemption of bonds in last fiscal year (a decrease of 30.0 billion yen from the year ended 31 August 2019), and35.0 billion yen in proceeds from short-term loans payable (a decrease of 17.8 billion yen from the year ended 31 August 2019).

- 24 -

(2) Summary of Revenue and Purchasing(a) Revenue by division
Year ended 31 August 2019
(From 1 September 2018 to
31 August 2019)

Division

Year ended 31 August 2020
(From 1 September 2019 to
31 August 2020)

Revenue(Millions of yen)

Percentage of total(%)

Revenue(Millions of yen)

Percentage of total(%)

Men’s clothing

343,243

15.0

319,985

15.9

Women’s clothing

409,105

17.9

359,753

17.9

Children’s & babies’ clothing

66,3032.9

60,804

3.0

Goods and other items

22,9471.0

35,391

1.8

841,600

36.7

775,93438.6

31,357

1.4

30,952

1.5

872,957

38.1

806,88740.2

1,026,032

44.8

843,93742.0

1,898,990

82.9

1,650,825

82.2

GU operations

238,74110.4

246,091

12.3

Global Brands operations

149,939

6.5

109,633

5.5

2,877

0.1

2,295

0.1

2,290,548

100.0

2,008,846

100.0

Total sales of UNIQLO Japan
Franchise-related income &alteration charges
Total UNIQLO Japan operations
UNIQLO International operations
Total UNIQLO 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 the length of pants.
2. “UNIQLO operations” covers the selling of UNIQLO brand casual clothing.
3. “GU operations” covers the selling of GU brand casual clothing.
4. “Global Brands operations” consists of Theory operations (selling of the Theory and other brands clothing), PLST
operations (selling of the PLST and other brands clothing), COMPTOIR DES COTONNIERS operations (selling of the
COMPTOIR DES COTONNIERS and other brands clothing), PRINCESSE TAM. TAM operations (selling of the
PRINCESSE TAM. TAM and other brands clothing), and J Brand operations (selling of the J Brand and other brands
clothing).
5. “Other operations” includes the real estate leasing business, etc.
6. E-commerce revenue from UNIQLO Japan
Fiscal year ended 31 August 2019: 83,228 million yen;
Fiscal year ended 31 August 2020: 107,616 million yen.
7. The above amounts do not include consumption taxes, etc.

- 25 -

(b) Sales per unit
Year ended
31 August 2020
(From 1 September 2019 to
31 August 2020)

Year-on-year change (%)

1,512,255 million yen

84.7

2,446,706 m2

105.4

Sales per m2 (yearly)

618 thousand yen

80.4

Number of employees (average)

106,276 persons

98.2

14,229 thousand yen

86.3

Summary

Revenue
Sales floor area (average)
Sales per m2

Sales per employee

Sales per employee (yearly)(Notes) 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 andadministrative fees, or alteration charges.
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 operating officers. The number of junior employees and part-timeworkers is stated at the average number of registered personnel.
5. The above figures do not include consumption tax, etc.
(c) Purchases
Year ended 31 August 2020
(From 1 September 2019 to 31 August 2020)
By product category

Purchases(Millions of yen)

Year-on-year change(%)

Percentage of total(%)

Men’s clothing

181,687

95.8

17.5

Women’s clothing

196,950

88.2

18.9

Children’s & babies’ clothing

32,39295.0

3.1

Goods and other items

21,892178.6

2.1

432,922

94.3

41.6

433,892

90.1

41.7

866,814

92.1

83.3

GU operations

127,536

107.1

12.3

Global Brands operations

45,65280.7

4.4

1,040,003

93.1

100.0

Total UNIQLO Japan operations
UNIQLO International operations
Total UNIQLO operations

Total(Notes) 1. “UNIQLO operations” covers the selling of UNIQLO brand casual clothing.
2. “GU operations” covers the selling of GU brand casual clothing.
3. “Global Brands operations” consists of Theory operations (selling of the Theory and other brands clothing), PLST
operations (selling of the PLST and other brands clothing), COMPTOIR DES COTONNIERS operations (selling of the
COMPTOIR DES COTONNIERS and other brands clothing), PRINCESSE TAM. TAM operations (selling of the
PRINCESSE TAM. TAM and other brands clothing), and J Brand operations (selling of the J Brand and other bands
clothing).
4. There are businesses other than the above, mainly real estate leasing, but they do not involve purchasing due to the natureof the activity.
5. The above figures do not include consumption tax.

- 26 -

(3) Consideration of Performance Conditions on Management’s Perspective(a) Significant accounting policies and estimations
The Group’s consolidated financial statements were prepared in accordance with IFRS. Accounting estimates are necessary forthe preparation of consolidated financial statements, so when judging the recoverability of impaired non-financial assets ordeferred tax assets, etc., estimates are either made based on past performance, or based on assumptions that are judged to bereasonable under the circumstances.
Please see “9. Financial Information (6) Notes to the consolidated financial statements” for details.
(b) Analysis of management performance for the year ended 31 August 2020
Please see "C. Management’s Discussion and Analysis of Consolidated Financial Condition, Results of Operations and Cash
Flows (1) Summary of Business Results" for analysis of management performance.
(c) Sources of funding and analysis of fund liquidity(i) Basic Approach to Financial Strategy
For the Group, the guiding principle behind the financial strategy is to maximize free cash flow through the Group's businessactivities while maintaining a strong financial standing, and also to ensure investment capital for growth, and on-hand liquidity,
while preserving a certain level of shareholder returns for each fiscal year.
In order to maintain a strong financial standing, we will ensure adequate on-hand liquidity to enable us to withstand theunexpected, such as inclement weather and COVID-19, while continuing to adhere to the principle of funding investment capitalthrough our operating cash flows. In addition, we will also ensure stable external funding.
(ii) Cash Flow and Liquidity Information
As a feature of apparel retailing industry, the Group is committed to ensuring on-hand liquidity of three to five months' worthof sales in order to prepare for unexpected circumstances on working capital or inclement weather. Cash and cash equivalents
amount to 1.0935 trillion yen at the end of the consolidated fiscal year under review, against revenue of 2.0088 trillion yen forthe consolidated fiscal year under review. However, we believe the current on-hand liquidity of 4 months' worth of sales at 1
trillion yen is adequate against our plan to exceed 3 trillion yen in revenue throughout all of the Group's businesses in the near
future.
(iii) Key Details of Funding Needs
In terms of capital expenditure used in operating activities, the Group's funding needs include stock, logistics, advertising andpromotion, rental expenses (rent for stores, etc.), and labor costs.
In addition, capital expenditure for investment activities includes investing in logistics warehouses and IT investments (selfcheckouts in-store, investments in e-commerce and supply-chain-related systems) to promote the Ariake Project, in addition to
store-related investments (opening new stores and renovating existing stores). For the fiscal year ending August 2021, acrossthe whole Group we plan to invest 30 billion yen in launching new stores, and 60.2 billion yen of capital investment in otherinvestments such as warehousing and IT (detailed in "(1) Important new facilities," in "C. Plans for new facility construction,
old facility removal" under "5. Capital Expenditures").
(iv) Funding
In order to stably and swiftly secure the funds required to maintain and expand the Group's businesses, we are striving tomaximize free cash flow through our business activities while also making effective use of internal and external funds.
To maintain a strong financial standing, we are funding investment capital through our operating cash flow in principle.
However, we also plan to diversify our funding and improve capital efficiency, and also make use of some corporate bonds toraise capital. In June 2018, we raised 250 billion yen using corporate bonds, which is being invested in expanding our overseas
business and promoting the Ariake Project, as well as being allocated for corporate bond redemptions.
Recognizing that sustaining and improving stable external funding is an important management issue, the Group has obtained
S&P (Standard & Poor's) and JCR (Japan Credit Rating Agency) ratings. At the time of publishing, our S&P rating is"A" (stable) and our JCR rating is "AA" (stable). We also maintain good business relationships with key financial institutions.
Although sales and profits have decreased this consolidated fiscal year due to the impact of the COVID-19 pandemic, we havebeen able to ensure sufficient liquidity without the need for additional external funding, thanks to the tremendous support fromour business partners, the continuation of our sales activities after improving infection-prevention measures, and reduction of
our costs and use of inventories.

- 27 -

Going forward, we will continue to maintain a strong financial standing and endeavor to sustain and improve stable externalfunding, while remaining vigilant to changes in the business environment that may arise due to COVID-19.
D. Major Contracts
Not applicable.

E. Research and Development
Not applicable.

- 28 -

5. Capital Expenditures
A. Capital Expenditures
UNIQLO Japan opened 32 new stores. UNIQLO International opened 76 stores in the Greater China, 6 in South Korea, 3 in
Malaysia, 2 in Thailand, 3 in the Philippines, 9 in Indonesia, 3 in Australia, 4 in Vietnam, 3 in India, 2 in the USA, 1 in Canada, 2
in England, 1 in France, 6 in Russia, 2 in Spain, 1 in Sweden and 1 in Italy. GU opened 35 new stores. In addition, Global Brands
opened 34 new stores.
As a result, the Group’s capital expenditure declined by 2.4 billion yen year-on-year in fiscal 2020 to 82.7 billion yen. That figure
can be broken down into 17.8 billion yen for UNIQLO Japan, 23.5 billion for UNIQLO International, 8.5 billion yen for GU, 2.4
billion yen for Global Brands, and 30.4 billion yen for systems, etc. While we increased our investment in IT system andwarehousing as part of our Groupwide transformative Ariake Project and invested more heavily in global flagship stores and largeformat stores at UNIQLO Japan, the overall capital expenditure figure declined slightly year-on-year due to a reduction in new
stores openings primarily at UNIQLO International.
The above figures do not include consumption tax, etc.
B. Important Facilities
As at 31 August 2020, the Group’s important facilities were shown as below:(1) Information about the Reporting Entity
Area (m2)Company name

Type of facility

Capital expenditure (Millions of yen)

LocationLand
Yamaguchi City,

Head office
FAST RETAILING
CO., LTD.

Yamaguchi Prefecture

Commercial

Chuo-ku, Fukuoka City,

establishments

etc.

OthersLand

Buildings

Right-of-use
assets

Deposits /Guarantees

Others

Total

Number of
employees

95,255.83

1,047

741

-

-

157

1,947

61

-

-

36

2,242

1,309

3,070

6,659

-

29,308.87

76

12,150105,254

4,991

5,649

128,1211,528(2) Subsidiaries in Japan
Area (m2)Company name

Type of facility

Capital expenditure (Millions of yen)

Location
Land

Land

Buildings

Right-of-use
assets

Deposits /Guarantees

16,03880,08028,630968

Others

Total

Number of
employees

Yamaguchi City,Stores in Japan, etc.

Yamaguchi Prefecture

2,591.06

450

126,169

9,861

UNIQLO Japan, other

19,960.76

353

1,053

17,346

1,745

3,037

23,537

3,398

Total for UNIQLO Japan

22,551.82

803

17,092

97,42730,376

4,006

149,706

13,259--11,60023,2798,096

459

43,435

4,774

-

-

229

591

302

7

1,131

925

-

-

762

2,048

1,016

73

3,901

807

etc.

UNIQLO CO., LTD.

Yamaguchi City,
G.U. CO., LTD.

Stores in Japan, etc.

Yamaguchi Prefecture,etc.

LINK THEORY JAPANCO., LTD.

Yamaguchi City,Stores in Japan, etc.

Yamaguchi Prefecture,etc.
Yamaguchi City,

PLST CO., LTD.

Stores in Japan, etc.

Yamaguchi Prefecture,etc.

- 29 -

(3) Overseas subsidiaries
Area (m2)Company name

Type of facility

Capital expenditure (Millions of yen)

Location
Land

FAST RETAILINGUNIQLO International

Land

Buildings

Right-of-use
assets

Deposits /Guarantees

OthersNumber of
employees

Total

Shanghai, PRC--

17,789

6,385

3,612

5,684

33,471

13,533

Shanghai, PRC

-

-

993

3,210

314

239

4,758

873

Shanghai, PRC

-

-

1,213

2,893

214

272

4,594

374

Seoul, South Korea

-

-

2,618

2,724

4,147

1,345

10,836

1,806

OfficeRepublic of Singapore

-

-

0

20

14

1

37

12

UNIQLO (THAILAND)UNIQLO International

Bangkok,

COMPANY LIMITED

store

Kingdom of Thailand

-

-

1,188

1,611

974

860

4,635

1,385

PT. Fast Retailing

UNIQLO International

Indonesia

store

Jakarta, Indonesia

-

-

1,559

1,084

229

840

3,714

1,507

UNIQLO Australia Pty

UNIQLO International

Ltd.

store

Melbourne, Australia

-

-

2,130

12,222

7987

15,347570

Fast Retailing USA, Inc.

OfficeNew York, U.S.A.

-

-

4,407

62,997394

1,917

69,717

2,321

UNIQLO EUROPE

UNIQLO International

London, United

LIMITED

store

Kingdom--

12,27228,356492

3,234

44,356

2,216

UNIQLO VIETNAM

UNIQLO International

CO., LTD

store

Ho Chi Minh, Vietnam

-

-

1,142

960

64

664

2,831

595

UNIQLO International

New Delhi,

store

Republic of India

-

-

1,005

686

114

275

2,081

435

International store, etc.

Shanghai, PRC

-

-

407

449

110

155

1,122

144

OfficeParis, France

-

-

-

-

28

38

67

306

International store, etc.

Paris, France

-

-

293

1,846

422

226

2,788

490

International store, etc.

Paris, France

-

-

239

797

181

137

1,355

251

International Stores, etc.

California, U.S.A.

-

-

88

822

1

252

1,164

70

(CHINA) TRADING
CO., LTD

store

UNIQLO TRADINGUNIQLO International

CO., LTD.

store

FAST RETAILING(Shanghai)
TRADING CO., LTD
FRL Korea Co., Ltd.

UNIQLO International
store
UNIQLO International
store

FAST RETAILING(SINGAPORE) PTE.
Ltd.

UNIQLO INDIA
PRIVATE
LIMITED
GU (Shanghai) Trading
Co., Ltd.
Fast Retailing France
S.A.S.
COMPTOIR DES
COTONNIERS S.A.S.
PRINCESSE
TAM.TAM S.A.S.
J Brand, Inc.

(Notes) 1. When facilities are subleased within The Group, the accompanying documentation is included in the documentation
disclosed to the sublessor.
2. Most items in the “Others” category for the reporting entity are Ariake head office (Koto-ku, Tokyo), Roppongi head office(Minato-ku, Tokyo), the old head office (Ube City, Yamaguchi), lands and buildings for store use subleased to UNIQLO
CO., LTD. and G.U. CO., LTD. by the sublessor company (Chuo-ku, Tokyo and Yokohama City, Kanagawa) and logistics
warehouses (Ibaraki City, Osaka).
3. Monetary amounts are given at book value. Also, the figures do not include consumption tax, etc.
4. The number of employees does not include operating officers, junior employees, part-time workers, or temporary staff
seconded from other companies.
5. Assets are not expressed as allocated among business segments.

- 30 -

C. Plans for new facility construction, old facility removal
The following are the important new facility construction and / or facility removal projects planned as at 31 August 2020.
(1) Important new facilities
The capital investment plans (new facility construction, expansion) for each segment in the year ending 31 August 2021 (1September 2020 – 31 August 2021) are as follows.
Capital investment(Millions of yen)Segment

Details of investment

UNIQLO Japan

13,439New store openings, warehouses, etc. (approx. 30
stores)UNIQLO International

38,902

New store openings, warehouses, etc. (approx. 154
stores)

GU

3,315

New store openings, etc. (approx. 18 stores)

Global Brand Business

2,024

New store openings, etc. (approx. 29 stores)

Others32,528IT-related investments, warehouses, etc.

Total

90,210(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 facility plans included in the plans described above are as follows.
Amount of planned
investment
Company nameUNIQLO EUROPE
LIMITEDUNIQLO CANADA
INC.

Type offacility

Name ofbusiness

UNIQLOUNIQLOInternational

Hamburg

store

Alter Wall

UNIQLOUNIQLOInternational

Montreal

store

Eaton Centre

Location

Germany
Hamburg
CanadaMontreal

Total(Millionsof yen)Amountalready
disbursed(Millionsof yen)Constructioncommence

Construction
completion

Plannedsales floorarea (m2)Reference

853

697

January 2020

October 2020

1,751

Lease Hold

609

474

May 2020

October 2020

3,805

Lease Hold

(Notes) 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.
(2) Planned removals of important facilities
There were no planned removals of important facilities as at 31 August 2020.

- 31 -

6. Stock Information and Dividend Policy
A. Stock Information(1) Number of Shares(a) Total number of shares
Type

Total number of authorized shares (shares)

Common stock

300,000,000

Total

300,000,000(b) Shares issued

Type

Shares issued
as at 31 August 2020

Number of sharesissued as at submission
date(27 November 2020)

Name of financial
instrument exchangeof listing or authorized
financial instruments
firms association
First section of the Tokyo
Stock Exchange andCommon stock

106,073,656

106,073,656

the Main board of
the Stock Exchange of

Details

100 sharesas one unit

Hong Kong Limited (Note)
Total

106,073,656

106,073,656--(Note) Hong Kong Depositary Receipts (“HDRs”) are listed on the Main Board of the Stock Exchange of Hong Kong Limited.

- 32 -

(2) Share Subscription Rights(a) Details of the Stock Option Program
The Company has instituted a stock option program that grants rights to acquire new shares pursuant to the Companies Act ofJapan. Matters stated below are details of the program current as at the final day of the current fiscal year (31 August 2020).
Details of changes made during the period from the final day of the current fiscal year until the end of the previous month (31October 2020) on the submission date are shown in brackets [ ]. Details of the 11th share subscription rights on the submission
date are stated.
(i) Share subscription rights A type
2nd
Resolution date

3rd

12 October 2011

11 October 2012

Employees of the Company:
Class and number of recipients

14

Employees of the Group

Type of shares to be issued upon
exercise of share subscription rights

Employees of the Company:

10 October 201318

Employees of the Group4

subsidiaries:
Number of stock options (Shares)

4th

subsidiaries:

Employees of the Company:
Employees of the Group8

subsidiaries:

2,389 [2,389]

3,157 [3,157]

2,446 [2,446]

Common stock

Same as left

Same as left

2,389 [2,389]

3,157 [3,157]

2,446 [2,446]

Same as left

Same as left

Number of shares to be issued upon
exercise of share subscription rights(Shares)Number of shares allocated times ¥1
Amount to be paid upon exercise of

exercise price per share for all sharesshare subscription rights (Yen)

to be obtained through exercise of
the share subscription rights.

Exercise period of share subscription

From 15 November 2014

From 13 November 2015

From 3 December 2016

rightsto 14 November 2021

to 12 November 2022

to 2 December 2023

amount of paid-in capital per share

Issue price: 12,499

Issue price: 15,222

Issue price: 37,110

upon exercise of share subscription

Paid-in capital: 6,250

Paid-in capital: 7,611

Paid-in capital: 18,555

Same as left

Same as left.

Same as left

Same as left

Same as left

Same as left

Fair value on the grant date andrights (Yen)
If a holder of share subscription
Exercise conditions of sharesubscription rights

rights waives the right to acquire
shares, the share subscription rights
shall be forfeited and may not be
exercised.
Any acquisition of share subscription

Matters pertaining to transfer of sharerights by transfer shall require an

subscription rights

authorizing resolution from theBoard of Directors.

Matters pertaining to issuing of sharesubscription rights in conjunction with(Note)

reorganization- 33 -

19
11

5th
Resolution date

6th

9 October 20148 October 2015

Employees of the Company:
Class and number of recipients

36

Employees of the Group

Type of shares to be issued upon
exercise of share subscription rights

Employees of the Company:

13 October 201615

Employees of the Group16

subsidiaries:
Number of stock options (Shares)

7th

subsidiaries:

Employees of the Company:

19

subsidiaries:

8,807 [8,657]

1,094 [1,011]

1,719 [1,444]

Common stock

Same as left

Common stock

8,807 [8,657]

1,094 [1,011]

1,719 [1,444]

Same as left

Same as left

Number of shares to be issued upon
exercise of share subscription rights(Shares)Number of shares allocated times ¥1
Amount to be paid upon exercise of

exercise price per share for all sharesshare subscription rights (Yen)

to be obtained through exercise of
the share subscription rights.

Exercise period of share subscription

From 14 November 2017

From 13 November 2018

From 11 November 2019

rightsto 13 November 2024

to 12 November 2025

to 10 November 2026

amount of paid-in capital per share

Issue price: 42,377

Issue price: 45,658

Issue price: 34,684

upon exercise of share subscription

Paid-in capital: 21,188

Paid-in capital: 22,829

Paid-in capital: 17,342

Same as left

Same as left

Same as left

Same as left

Same as left

Same as left

Fair value on the grant date andrights (Yen)
If a holder of share subscription
Exercise conditions of sharesubscription rights

rights waives the right to acquire
shares, the share subscription rights
shall be forfeited and may not be
exercised.
Any acquisition of share subscription

Matters pertaining to transfer of sharerights by transfer shall require an

subscription rights

authorizing resolution from theBoard of Directors

Matters pertaining to issuing of sharesubscription rights in conjunction with(Note)

reorganization- 34 -

16

Employees of the Group23

8th
Resolution date

9th

12 October 201711 October 2018

Employees of the Company:
Class and number of recipients

19

Employees of the Group

Type of shares to be issued upon
exercise of share subscription rights

Employees of the Company:

10 October 201917

Employees of the Group27

subsidiaries:
Number of stock options (Shares)

10th

subsidiaries:

Employees of the Company:

32

subsidiaries:

4,720 [4,720]

3,853 [3,853]

3,406 [3,406]

Common stock

Same as left

Same as left

4,720 [4,720]

3,853 [3,853]

3,406 [3,406]

Same as left

Same as left.

Number of shares to be issued upon
exercise of share subscription rights(Shares)Number of shares allocated times ¥1
Amount to be paid upon exercise of

exercise price per share for all sharesshare subscription rights (Yen)

to be obtained through exercise of
the share subscription rights.

Exercise period of share subscription

From 10 November 2020

From 9 November 2021

From 8 November 2022

rightsto 9 November 2027

to 8 November 2028

to 7 November 2029

amount of paid-in capital per share

Issue price: 37,648

Issue price: 58,276

Issue price: 66,059

upon exercise of share subscription

Paid-in capital: 18,824

Paid-in capital: 29,138

Paid-in capital: 33,030

Same as left

Same as left

Same as left

Same as left

Same as left

Same as left

Fair value on the grant date andrights (Yen)
If a holder of share subscription
Exercise conditions of sharesubscription rights

rights waives the right to acquire
shares, the share subscription rights
shall be forfeited and may not be
exercised.
Any acquisition of share subscription

Matters pertaining to transfer of sharerights by transfer shall require an

subscription rights

authorizing resolution from theBoard of Directors.

Matters pertaining to issuing of sharesubscription rights in conjunction with(Note)

reorganization- 35 -

11

Employees of the Group
46

11th
Resolution date

15 October 2020
Employees of the Company:

Class and number of recipients

18

Employees of the Group47

subsidiaries:
Number of stock options (Shares)
Type of shares to be issued upon
exercise of share subscription rights

2,175
Common stock

Number of shares to be issued upon
exercise of share subscription rights

2,175(Shares)Number of shares allocated times ¥1
Amount to be paid upon exercise of

exercise price per share for all sharesshare subscription rights (Yen)

to be obtained through exercise of
the share subscription rights.

Exercise period of share subscription

From 13 November 2020

rightsto 12 November 2030

Fair value on the grant date andamount of paid-in capital per share

Issue price: 77,560

upon exercise of share subscription

Paid-in capital: 38,780

rights (Yen)
If a holder of share subscription
Exercise conditions of sharesubscription rights

rights waives the right to acquire
shares, the share subscription rights
shall be forfeited and may not be
exercised.
Any acquisition of share subscription

Matters pertaining to transfer of sharerights by transfer shall require an

subscription rights

authorizing resolution from theBoard of Directors.

Matters pertaining to issuing of sharesubscription rights in conjunction with(Note)

reorganization- 36 -

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited to cases
where the Company becomes extinct thereby), absorption-type company split or incorporation-type company split (in each
event, limited to cases where the Company is the entity resulting from the company split), or exchange or transfer of shares (ineach 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 share subscription rights for shares of the resulting
company as prescribed in Article 236 (1) viii of the Companies Act of Japan (hereinafter referred to as the “Company
Resulting From Reorganization”). In such event, any Outstanding Share Subscription Rights shall lapse and the Company
Resulting From Reorganization shall issue new share subscription rights; provided, however, that terms and conditions
stipulating that the Company Resulting From Reorganization shall issue share subscription rights that prescribe the mattersstated below shall be included in any absorption merger agreement, new merger agreement, absorption-type company split
agreement, incorporation-type company 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 and numberof 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 the amountobtained by multiplying the exercise price after reorganization prescribed below by the number of shares of the Company
Resulting From Reorganization underlying the share subscription rights that have been finalized as stated in No. 3. above.
The exercise price after Reorganization shall be 1 yen per share of the Company Resulting From Reorganization that can beissued upon exercise of each share subscription right that is issued.
5. Period during which share subscription rights can be exercised:
The period from the later of either the first day of the period during which share subscription rights can be exercised asprescribed above or the day on which a Reorganization takes effect through the final day of the period during which sharesubscription 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 theshare 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 Directorsof 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 -

(ii) Share subscription rights B type
1st
Resolution date

2nd

8 October 201012 October 2011

Employees of the Company:
Class and number of recipients

266

Employees of the Group

Type of shares to be issued upon
exercise of share subscription rights

Employees of the Company:

11 October 2012139

Employees of the Group413

subsidiaries:
Number of stock options (Shares)

3rd

subsidiaries:

Employees of the Company:
Employees of the Group584

subsidiaries:

3,624 [182]5,896 [5,557]

6,562 [6,355]

Common stock

Same as left

Same as left

3,624 [182]5,896 [5,557]

6,562 [6,355]

Same as left

Same as left

Number of shares to be issued upon
exercise of share subscription rights(Shares)Number of shares allocated times ¥1
Amount to be paid upon exercise of

exercise price per share for all sharesshare subscription rights (Yen)

to be obtained through exercise of
the share subscription rights.

Exercise period of share subscription

From 8 December 2010

From 15 December 2011

From 13 December 2012

rightsto 7 November 2020

to 14 November 2021

to 12 November 2022

amount of paid-in capital per share

Issue price: 10,925

Issue price: 12,742

Issue price: 15,569

upon exercise of share subscription

Paid-in capital: 5,463

Paid-in capital: 6,371

Paid-in capital: 7,785

Same as left

Same as left

Same as left

Same as left

Same as left

Same as left

Fair value on the grant date andrights (Yen)
If a holder of share subscription
Exercise conditions of sharesubscription rights

rights waives the right to acquire
shares, the share subscription rights
shall be forfeited and may not be
exercised.
Any acquisition of share subscription

Matters pertaining to transfer of sharerights by transfer shall require an

subscription rights

authorizing resolution from theBoard of Directors.

Matters pertaining to issuing of sharesubscription rights in conjunction with(Note)

reorganization- 38 -

136
615

4th
Resolution date

5th

10 October 20139 October 2014

Employees of the Company:
Class and number of recipients

180

Employees of the Group

Type of shares to be issued upon
exercise of share subscription rights

Employees of the Company:

8 October 2015
223

Employees of the Group706

subsidiaries:
Number of stock options (Shares)

6th

subsidiaries:

Employees of the Company:

785

subsidiaries:

6,561 [6,321]

9,889 [9,582]

9,810 [9,564]

Common stock

Same as left

Same as left

6,561 [6,321]

9,889 [9,582]

9,810 [9,564]

Same as left

Same as left

Number of shares to be issued upon
exercise of share subscription rights(Shares)Number of shares allocated times ¥1
Amount to be paid upon exercise of

exercise price per share for all sharesshare subscription rights (Yen)

to be obtained through exercise of
the share subscription rights.

Exercise period of share subscription

From 3 January 2014

From 14 December 2014

From 13 December 2015

rightsto 2 December 2023

to 13 November 2024

to 12 November 2025

amount of paid-in capital per share

Issue price: 37,515

Issue price: 42,799

Issue price: 46,148

upon exercise of share subscription

Paid-in capital: 18,757

Paid-in capital: 21,399

Paid-in capital: 23,074

Same as left

Same as left

Same as left

Same as left

Same as left

Same as left

Fair value on the grant date andrights (Yen)
If a holder of share subscription
Exercise conditions of sharesubscription rights

rights waives the right to acquire
shares, the share subscription rights
shall be forfeited and may not be
exercised.
Any acquisition of share subscription

Matters pertaining to transfer of sharerights by transfer shall require an

subscription rights

authorizing resolution from theBoard of Directors.

Matters pertaining to issuing of sharesubscription rights in conjunction with(Note)

reorganization- 39 -

274

Employees of the Group
921

7th
Resolution date

8th

13 October 201612 October 2017

Employees of the Company:
Class and number of recipients

Number of stock options (Shares)
Type of shares to be issued upon
exercise of share subscription rights

339

Employees of the Groupsubsidiaries:

9th

Employees of the Company:

11 October 2018
395

Employees of the Group
1,096

subsidiaries:

Employees of the Company:

1,152

subsidiaries:

13,597 [13,143]

23,752 [23,312]

21,459 [21,226]

Common stock

Same as left

Same as left

13,597 [13,143]

23,752 [23,312]

21,459 [21,226]

Same as left

Same as left

Number of shares to be issued upon
exercise of share subscription rights(Shares)Number of shares allocated times ¥1
Amount to be paid upon exercise of

exercise price per share for all sharesshare subscription rights (Yen)

to be obtained through exercise of
the share subscription rights.

Exercise period of share subscription

From 11 December 2016

From 10 December 2017

From 9 December 2018

rightsto 10 November 2026

to 9 November 2027

to 8 November 2028

amount of paid-in capital per share

Issue price: 35,168

Issue price: 38,133

Issue price: 58,892

upon exercise of share subscription

Paid-in capital: 17,584

Paid-in capital: 19,066

Paid-in capital: 29,446

Same as left

Same as left

Same as left

Same as left

Same as left

Same as left

Fair value on the grant date andrights (Yen)
If a holder of share subscription
Exercise conditions of sharesubscription rights

rights waives the right to acquire
shares, the share subscription rights
shall be forfeited and may not be
exercised.
Any acquisition of share subscription

Matters pertaining to transfer of sharerights by transfer shall require an

subscription rights

authorizing resolution from theBoard of Directors.

Matters pertaining to issuing of sharesubscription rights in conjunction with(Note)

reorganization- 40 -

419

Employees of the Group
1,267

10th
Resolution date

11th

10 October 201915 October 2020

Employees of the Company:
Class and number of recipients

Employees of the Groupsubsidiaries:

Number of stock options (Shares)
Type of shares to be issued upon
exercise of share subscription rights

528
1,389

Employees of the Company:
Employees of the Groupsubsidiaries:

27,688 [26,799]

22,306

Common stock

Same as left

27,688 [26,799]

22,306

Number of shares to be issued upon
exercise of share subscription rights(Shares)Number of shares allocated times ¥1
Amount to be paid upon exercise of

exercise price per share for all sharesshare subscription rights (Yen)

to be obtained through exercise ofSame as left

the share subscription rights.
Exercise period of share subscription

From 8 December 2019

From 13 December 2020

rightsto 7 November 2029

to 12 November 2030

amount of paid-in capital per share

Issue price: 66,733

Issue price: 78,237

upon exercise of share subscription

Paid-in capital: 33,367

Paid-in capital: 39,119

Fair value on the grant date andrights (Yen)
If a holder of share subscription
Exercise conditions of sharesubscription rights

rights waives the right to acquire
shares, the share subscription rights

Same as left

shall be forfeited and may not be
exercised.
Any acquisition of share subscription

Matters pertaining to transfer of sharerights by transfer shall require an

subscription rights

authorizing resolution from theSame as left

Board of Directors.
Matters pertaining to issuing of sharesubscription rights in conjunction with(Note)

Same as left

reorganization- 41 -

694
1,435

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited to cases
where the Company becomes extinct thereby), absorption-type company split or incorporation-type company split (in each
event, limited to cases where the Company is the entity resulting from the company split), or exchange or transfer of shares (ineach 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 share subscription rights for shares of the resulting
company as prescribed in Article 236 (1) viii of the Companies Act of Japan (hereinafter referred to as the “Company
Resulting From Reorganization”). In such event, any Outstanding Share Subscription Rights shall lapse and the Company
Resulting From Reorganization shall issue new share subscription rights; provided, however, that terms and conditions
stipulating that the Company Resulting From Reorganization shall issue share subscription rights that prescribe the mattersstated below shall be included in any absorption merger agreement, new merger agreement, absorption-type company split
agreement, incorporation-type company 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 and numberof 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 the amountobtained by multiplying the exercise price after reorganization prescribed below by the number of shares of the Company
Resulting From Reorganization underlying the share subscription rights that have been finalized as stated in No. 3. above.
The exercise price after Reorganization shall be 1 yen per share of the Company Resulting From Reorganization that can beissued upon exercise of each share subscription right that is issued.
5. Period during which share subscription rights can be exercised:
The period from the later of either the first day of the period during which share subscription rights can be exercised asprescribed above or the day on which a Reorganization takes effect through the final day of the period during which sharesubscription 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 theshare 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 Directorsof 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.

- 42 -

(iii) Share subscription rights C type
8th

9th

10th

Resolution date

12 October 2017Class and number of recipients

Employees of the Company:

Number of stock options (Shares)

4,963 [4,963]

4,151 [4,151]

3,468 [3,468]

Common stock

Same as left

Same as left

4,963 [4,963]

4,151 [4,151]

3,468 [3,468]

Same as left

Same as left

10 November 2020

9 November 2021

8 November 2022

amount of paid-in capital per share

Issue price: 38,823

Issue price: 59,764

Issue price: 67,685

upon exercise of share subscription

Paid-in capital: 19,411

Paid-in capital: 29,882

Paid-in capital: 33,843

Same as left

Same as left

Same as left

Same as left

Same as left

Same as left

Type of shares to be issued upon
exercise of share subscription rights

11 October 201829

Employees of the Company:

10 October 201940

Employees of the Company:

Number of shares to be issued upon
exercise of share subscription rights(Shares)Number of shares allocated times ¥1
Amount to be paid upon exercise of

exercise price per share for all sharesshare subscription rights (Yen)

to be obtained through exercise of
the share subscription rights.

Exercise period of share subscription
rightsFair value on the grant date andrights (Yen)
If a holder of share subscription
Exercise conditions of sharesubscription rights

rights waives the right to acquire
shares, the share subscription rights
shall be forfeited and may not be
exercised.
Any acquisition of share subscription

Matters pertaining to transfer of sharerights by transfer shall require an

subscription rights

authorizing resolution from theBoard of Directors.

Matters pertaining to issuing of sharesubscription rights in conjunction with(Note)

reorganization- 43 -

40

11th
Resolution date

15 October 2020

Class and number of recipients

Employees of the Company:

Number of stock options (Shares)

3,777

Type of shares to be issued upon
exercise of share subscription rights

41

Common stock

Number of shares to be issued upon
exercise of share subscription rights

3,777(Shares)Number of shares allocated times ¥1
Amount to be paid upon exercise of

exercise price per share for all sharesshare subscription rights (Yen)

to be obtained through exercise of
the share subscription rights.

Exercise period of share subscription
rights

13 November 2023

Fair value on the grant date andamount of paid-in capital per share

Issue price: 79,193

upon exercise of share subscription

Paid-in capital: 39,597

rights (Yen)
If a holder of share subscription
Exercise conditions of sharesubscription rights

rights waives the right to acquire
shares, the share subscription rights
shall be forfeited and may not be
exercised.
Any acquisition of share subscription

Matters pertaining to transfer of sharerights by transfer shall require an

subscription rights

authorizing resolution from theBoard of Directors.

Matters pertaining to issuing of sharesubscription rights in conjunction with(Note)

reorganization- 44 -

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited to cases
where the Company becomes extinct thereby), absorption-type company split or incorporation-type company split (in each
event, limited to cases where the Company is the entity resulting from the company split), or exchange or transfer of shares (ineach 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 share subscription rights for shares of the resulting
company as prescribed in Article 236 (1) viii of the Companies Act of Japan (hereinafter referred to as the “Company
Resulting From Reorganization”). In such event, any Outstanding Share Subscription Rights shall lapse and the Company
Resulting From Reorganization shall issue new share subscription rights; provided, however, that terms and conditions
stipulating that the Company Resulting From Reorganization shall issue share subscription rights that prescribe the mattersstated below shall be included in any absorption merger agreement, new merger agreement, absorption-type company split
agreement, incorporation-type company 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 and numberof 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 the amountobtained by multiplying the exercise price after reorganization prescribed below by the number of shares of the Company
Resulting From Reorganization underlying the share subscription rights that have been finalized as stated in No. 3. above.
The exercise price after Reorganization shall be 1 yen per share of the Company Resulting From Reorganization that can beissued upon exercise of each share subscription right that is issued.
5. Period during which share subscription rights can be exercised:
The period from the later of either the day on which share subscription rights can be exercised as prescribed above 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 theshare 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 Directorsof 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.
(b) Content of Rights Plan
Not applicable.
(c) Other Share Subscription Rights
Not applicable.

- 45 -

(3) Exercise of convertible bonds with conditional permission for adjustment of exercise priceNot applicable.
(4) Change in Total Number of Shares Issued, Capital Stock
Date

Increase /Balance of total
Increase /Increase /Balance ofBalance of
decrease in total
number of
decreasedecrease
capital stock
capital reserve
number of shares shares issued
in capital stockin capital reserve(Millions of yen)
(Millions of yen)issued (Shares)(Shares)(Millions of yen)
(Millions of yen)

31 August 2004-

106,073,656

7,000

10,273(7,000)4,578(Note) This represents an addition to capital stock from capital reserve approved by resolution at a special meeting of the Board of
Directors on 30 August 2004.
(5) Status by Type of Holder
As at 31 August 2020
Shares (One unit = 100 shares)
Class

Number of shareholders(persons)
Number of shares held
(Trading units)
Percentage of shares
held(%)

Government,
municipal
entities

Foreign corporations, etc.

Financial
institutions

Traders offinancial
products

Other
corporations

-

67

36

-

359,654-

33.93

Individuals &
other

Total

Sharesless than
one unit(shares)

Excl.
individuals

Individuals

129

788

10

5,413

6,443

-

30,706

84,832

192,240

11

392,570

1,060,013

72,356

2.90

8.00

18.14

0.00

37.03

100.00-(Notes) 1. The 3,973,113 shares of treasury stock include 39,731 units of shares held by individuals and others and 13 shares held byindividuals and others of less than one unit.
2. Figures shown in the columns “Other corporations” and “Shares less than one unit” include 27 units of shares and 84
shares, respectively, in the name of Japan Securities Depository Center, Inc.

- 46 -

(6) Major Shareholders
As at 31 August 2020
Name or trade name

Address

Number ofPercentage ofshares held
total number of(Thousand shares) shares issued (%)

Tadashi Yanai

Shibuya-ku, Tokyo

22,037

21.58

The Master Trust Bank of Japan, Ltd.

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

20,785

20.36

Custody Bank of Japan, Ltd.

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

14,202

13.91

5,310

5.20

TTY Management B.V.

De Entree 99, 1101HE Amsterdam,
The Netherlands

Kazumi Yanai

New York, U.S.A.

4,781

4.68

Koji Yanai

Shibuya-ku, Tokyo

4,780

4.68

Fight & Step Co., Ltd.

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

4,750

4.65

MASTERMIND, LLC

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

3,610

3.54

Teruyo Yanai

Shibuya-ku, Tokyo

2,327

2.28

2,142

2.10

84,728

82.99

JP Morgan Chase Bank
(Standing proxy Mizuho Bank, Ltd.)
Total

5JP E14, 25 Bank Street, Canary Wharf,
London, England(2-15-1, Konan, Minato-ku, Tokyo)-(Notes) 1. “Number of shares held” is rounded down to the nearest unit of thousand shares.
2. The shares held by The Master Trust Bank of Japan, Ltd. and Custody Bank of Japan, Ltd. are all held in conjunction withtrust business.
3. According to the report of large shareholdings (report of change of composition) submitted on 20 April 2020 by Mitsubishi
UFJ Financial Group, Inc. and Mitsubishi UFJ Trust and Banking Corporation, MUFG Securities EMEA plc, Mitsubishi
UFJ Kokusai Asset Management Co., Ltd., Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., and MUFG Securities(Canada), Ltd., which are all as joint holders, each party was holding the shares stated below as at 13 April 2020. However,since the Company has not been able to confirm the number of shares actually held as at 31 August 2020, of the end of theterm, these shareholdings have not been included in the statement of principal shareholders above.
Name or trade name

Address

Number ofPercentage ofshares held
total number of(Thousand shares) shares issued (%)

Mitsubishi UFJ Trust and Banking
Corporation

1-4-5 Marunouchi, Chiyoda-ku, Tokyo

750

0.71

MUFG Securities EMEA plc

Ropemaker Place,25 RopemakerStreet,London EC2Y 9AJ, United Kingdom

43

0.04

1-12-1 Yurakucho, Chiyoda-ku, Tokyo

3,063

2.89

2-5-2 Marunouchi, Chiyoda-ku, Tokyo

424

0.40

266

0.25

Mitsubishi UFJ Kokusai Asset Management
Co., Ltd.
Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd.

Royal Bank Plaza, South Tower, Suite 2940,
MUFG Securities (Canada), Ltd.

200 Bay Street, Toronto, Ontario M5J 2J1,
Canada4. According to the report of large shareholdings (report of change of composition) submitted on 11 May 2020 by Daiwa
Asset Management Co. Ltd., each party was holding the shares stated below as at 30 April 2020. However, since theCompany has not been able to confirm the number of shares actually held as at 31 August 2020, of the end of the term,
these shareholdings have not been included in the statement of principal shareholders above.
Name or trade nameDaiwa Asset Management Co. Ltd.

Address
1-9-1 Marunouchi, Chiyoda-ku, Tokyo- 47 -

Number ofPercentage ofshares held
total number of(Thousand shares) shares issued (%)
5,315

5.01

5. According to the report of large shareholdings (report of change of composition) submitted on 14 August 2020 by Nomura
Securities Co.,Ltd. and NOMURA INTERNATIONAL PLC, and Nomura Asset Management Co., Ltd., which are all as
joint holders, each party was holding the shares stated below as at 7 August 2020. However, since the Company has notbeen able to confirm the number of shares actually held as at 31 August 2020, of the end of the term, these shareholdings
have not been included in the above statement of principal shareholders.
Name or trade name
Nomura Securities Co.,Ltd.
NOMURA INTERNATIONAL PLC
Nomura Asset Management Co., Ltd.

Address
1-9-1 Nihonbashi, Chuo-ku, Tokyo
1 Angel Lane, London EC4R 3AB, United
Kingdom
2-2-1 Toyosu, Koto-ku, Tokyo

Number ofPercentage ofshares held
total number of(Thousand shares) shares issued (%)
95

0.09

82

0.08

11,867

11.19

6. According to the report of large shareholdings (report of change of composition) submitted on 4 September 2020 by
Sumitomo Mitsui Trust Asset Management Co., Ltd. and Nikko Asset Management Co., Ltd., which are all as joint holders,each party was holding the shares stated below as at 31 August 2020. However, since the Company has not been able toconfirm the number of shares actually held as at 31 August 2020, of the end of the term, these shareholdings have not been
included in the above statement of principal shareholders.
Name or trade name
Sumitomo Mitsui Trust Asset Management
Co., Ltd.
Nikko Asset management Co., Ltd.

Address

1-1-1 Shibakoen, Minato-ku, Tokyo
Midtown Tower 9-7-1 Akasaka, Minato-ku.
Tokyo

Number ofPercentage ofshares held
total number of(Thousand shares) shares issued (%)
1,155

1.09

5,802

5.47

7. In addition to the above, 3,973,113 shares of treasury stock are held by the Company (3.75% of the total number ofauthorized shares).

- 48 -

(7) Voting Rights(a) Shares issued
As at 31 August 2020
Class
Non-voting shares
Shares subject to restrictions on voting rights(treasury stock)
Shares subject to restrictions on voting rights(others)

Number of shares(Shares)Number of voting rights(Number)

Details

-

-

-

-

-

-

-

-

-

-

-

(Shares held as treasury
stock)

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

Common stock
3,973,100
Common stock
102,028,200

Shares with full voting rights (others)

1,020,282

Common stock

Shares less than one unit-

72,356

Total number of shares issued

106,073,656

Total number of voting rights of allshareholders-(Note 1)
(Notes 1, 2)-

1,020,282-(Notes) 1. The columns for the number of shares of “Shares with full voting rights (others)” and “Shares less than one unit” include,
2,700 shares and 84 shares, respectively, held in the name of Japan Securities Depository Center, Inc.
2. Common stock in the “Shares less than one unit” column includes 13 shares of treasury stock held by the Company.
(b) Treasury StockAs at 31 August 2020
Name or trade name ofholderFAST RETAILING
CO., LTD.
Total

Holder’s address

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

Total number ofshares held
(Shares)

Percentage of
total number ofshares issued (%)

717-1 Sayama,
Yamaguchi-City,
Yamaguchi-

3,973,100-

3,973,100

3.75

3,973,100-

3,973,100

3.75(Note) Effective on 20 September 2020, the Company has changed its head office location to Sayama 10717-1, Yamaguchi,
Yamaguchi Prefecture.

- 49 -

B. Treasury Stock Information
Type of Shares: Buybacks of common stock under Companies Act of Japan, Article 155-7(1) 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 2020

83

5,402

Purchases of Treasury stock from 1 September 2020 to the submission date

36

2,639

(Note) Treasury stock purchased in the current year does not include shares of less than one unit purchased between 1 November 2020
and the submission date of this report.
(4) Status of treasury stock purchased
From 1 September 2020 to the submission
date

Fiscal year ended 31 August 2020
Class
Treasury stock purchases for which
subscribers were solicited
Treasury stock cancelled after purchase
Treasury stock transferred due to mergers,
share exchange, or company split
Other (Note)
Number of Treasury shares held

Number of shares(Shares)

Total disposal value(Thousands of yen)

Number of shares(Shares)

Total disposal value(Thousands of yen)

-

-

-

-

-

-

-

-

-

-

-

-

38,891

148,090

7,222

27,503

3,973,113-

3,965,927-(Note) The breakdown of figures for the year ended 31 August 2020 reflects the exercise of 38,891 share subscription rights, a sharedisposal value of 148,090 thousand yen. The breakdown of figures for the current year reflects the exercise of sharesubscription rights, and does not include shares of less than one unit purchased between 1 November 2020 and the submission
date of this report.

- 50 -

C. Dividend Policy
The Company regards the distribution of profits to all shareholders as one of its most important management issues, and our basic
policy is to constantly improve performance and to continually distribute profits in an appropriate manner based on performance.
Our policy is to pay high dividends based on performance after taking into consideration (i) demand for funds needed to expand
business and improve revenues of the Group and (ii) the financial health of the Group. Our basic policy for 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.
The year-end dividend was 240 yen per share and the interim dividend was 240 yen per share, so the annual dividend was 480 yen
per share, the same amount as for the previous fiscal year. We intend to effectively utilize internal reserves and free cash flow for
financial investment and loans to strengthen the operational base of the Group companies, and we will endeavor to achieve
continual and stable growth.
The payment of an interim dividend under Article 454-5 of the Companies Act of Japan is stipulated by the Company’s Articles ofIncorporation.
Dividends for the current fiscal year are as follows:
Total dividends(Millions of yen)

Dividends per share(Yen)

Board of Directors resolution made at the meeting held on 9 April 2020

24,499240

Board of Directors resolution made at the meeting held on 4 November 2020

24,504240

Resolution date

D. 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 withthe relevant conditions in the year ended 31 August 2020.

- 51 -

7. Corporate Governance Report
A. Basic Thinking on Corporate Governance
True to its corporate statement: Changing clothes. Changing conventional wisdom. Change the world. Fast Retailing seeks toexpand its operations to become the world’s number one digital consumer retailing company. The Group also seeks to help create abetter society by pursuing sustainability activities in tandem with our clothing business.
B. Details of Company organization and internal control systems(1) Details of company organization
The Company has built a corporate governance system consisting of a Board of Directors, a Board of Statutory Auditors, andvarious committees. As a key element to strengthen our corporate governance systems, the Company has instituted a system toentrust 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) meetsweekly, to examine tasks assigned to it by the Board of Directors, for the speedy revision of management strategy and planning.
Five of the nine members of the Board of Directors are External Directors, with the CEO acting as chairman of the Board of
Directors. The External Directors have an abundance 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 amonth to discuss and decide upon important management issues. The External Directors all participate actively in Board of
Directors discussions, and offer their opinions without reservations.
As at November 27, 2020, the Board of Statutory Auditors consists of six auditors, including three external auditors, with a fulltime corporate auditor acting as chairman. The Standing Statutory Auditor presides. The External Statutory 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 Statutory Auditors are fully aware of the decision-making process of the Board of
Directors, and able to fulfill their supervisory obligations. They also supervise the Directors’ performance of their executive
duties through regular conversations with the Directors, other executive officers, other employees, and auditors of subsidiarycorporations. The Board of Statutory 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 independent auditors.
The various committees complement the work of the Board of Directors. The External Directors and External Statutory Auditors
also serve as members of these committees. The name, purpose, authority, details of activities, and status of activities of each of
the committees are shown below.
Human Resources Committee
The Human Resources Committee, chaired by external director, discusses important organizational changes and adjustments tohuman resource systems across the Group, and offers views and suggestions to the Board of Directors. The committee met fivetimes during FY2020.
Sustainability Committee
The Sustainability Committee discusses and determines Fast Retailing’s overall sustainability strategy, environmental protection,social responsibility, response to human rights issues, diversity, and other considerations. The head of the Sustainability
Department chairs the committee and committee members are made up of outside experts, statutory auditors, and executive
officers. The committee met three times during FY2020.
Disclosure Committee
The Disclosure Committee, chaired by the Company official in charge of disclosing information to the Tokyo Stock Exchange(TSE), is tasked with boosting management transparency by “disclosing information that is timely, accurate, fair, and easy tounderstand. ” The Committee is responsible for both timely and voluntary disclosures to the TSE and the Stock Exchange ofHong Kong regarding matters that may materially impact investor and shareholder investment decisions. The committee met 12
times during FY2020.

- 52 -

IT Investment Committee
The IT Investment Committee debates and advises on the IT investments that will best achieve our targets for sweeping changes
to our information systems and business operations. That means deliberating the efficacy of each individual investment, andreviewing whether IT investment budgets submitted by external specialist organizations are reasonable and appropriate. The IT
Investment Committee is chaired by the President, and the members and observers include outside experts, external directors, andexecutives. The committee met five times during FY2020.
Code of Conduct Committee
The Code of Conduct Committee considers how best to resolve any violations of the Fast Retailing Group Code of Conduct, andwhen to make improvements to it. It offers guidance on educating executives and employees about the requirements of the CoC,
and on operating the confidential hotline. The committee is chaired by the head of the Legal Department, and committee
members include Statutory Auditors (including External Statutory Auditors) and executive officers. The committee met 13 times
during FY2020.
Business Ethics Committee
This committee ensures the Group does not use an advantageous position to exert undue pressure on business counterparts suchas partner factories and suppliers. The committee provides advice and counsel to departments based on external field inspections
and partner company surveys. The committee is chaired by the head of the Sustainability Department, and includes Statutory
Auditors (including External Statutory Auditors) and executive officers. The committee met 11 times during FY2020.
Risk Management Committee
In order to identify latent risks in business activities on a regular basis and to strengthen systems for detecting and managing
material risks, this committee analyzes and assesses the impact and frequency of risks on business, and discusses
countermeasures for high-risk business areas to prevent any risk before it occurs or ensure a swift response if a risk does
materialize. The committee is chaired by the Group CFO and committee members include outside directors and executive
officers. The committee met nine times during FY2020.
Nomination and Remuneration Advisory Committee
With the aim of strengthening Fast Retailing governance, the committee discusses and advises the Board of Directors on
important items relating to Fast Retailing corporate governance, such as the requirements and nomination policy regarding
candidates for director and auditor positions, the policy for determining director remuneration, requirements relating to thecompany’s chief executive officer, and smooth management succession planning. The committee is chaired by a director
nominated by the Board of Directors, and the majority of committee members are independent external executives (both external
directors and external statutory auditors). The committee met twice during FY2020.
Human Rights Committee
Chaired by an outside expert, this committee deliberates and advises on the execution of human rights due diligence. The
committee also provides counselling and conducts education and awareness-raising activities for departments involved in theexecution of business to ensure that we fulfil our obligations to respect human rights under the Fast Retailing Group Human
Rights Policy established in 2018, and conduct business operations appropriately. In addition, the committee is responsible forproviding recommendations and supervision as well as conducting investigations and taking remedial measures when a humanrights violation occurs. The committee met six times during FY2020.

- 53 -

Below is a diagram of our corporate governance system.

- 54 -

The members and chairs of the Board of Directors, Board of Statutory Auditors and other committees are as follows:
Title

Tadashi Yanai

Chairman

○

○

○

Chair

○

△

○

Chair

○

OkazakiKazumi Yanai○○

Koji Yanai

○

○

Toru
Hambayashi
Nobumichi
External
Directors

Hattori
MasaakiShintaku

Statutory
Auditors○

Business
EthicsCommittee

Chair

Chair

○
○

△

○
○

Akira Tanaka

△

Chair

Masaaki Shinjo

△

○

△

○

△

○

△

○

○

△

○

△

Keiko Kaneko
External

Takao

Statutory

Kashitani

Auditors

Masakatsu
MoriJohn C Jay
Noriaki
KoyamaExecutive

Shuichi

Directors

Nakajima
Takahiro
Wakabayashi

△

○

○

○

○

○

○
△

○

△

△

○

○

△

○

○

○

○

○

△

○

○

○

○

○
○

○

○

○

Asada
Makoto○Hoketsu
Chair

○

○

○

○

○
○

Shimpei Otani

Directors○○△

Hidetsugu

Executive○○

Maki Akaida

Yukihiro Nitta○○

Takashi Nawa

MasumiNomination
Risk
and
Human
Management Remuneration
RightsCommittee
Advisory
Committee
Committee
Chair

Naotake Ohno

Mizusawa

SeniorHuman
Code of
Sustainability Disclosure IT Investment
Resources
Conduct
Committee
Committee
Committee
Committee
Committee

Name

Takeshi
Directors

Board of
Statutory
Auditors

Board ofDirectors

Chair

○

○

Takahiro○

TambaraDai Tanaka○

Yasuyuki○

Terashi
Xiaozhou○Wang
Miyuki Isozaki○

Hiroyuki○

Uchida- 55 -○

TitleName

Board ofDirectors

Board of
Statutory
Auditors

Human
Code of
Sustainability Disclosure IT Investment
Resources
Conduct
Committee
Committee
Committee
Committee
Committee

Toshiharu
Subsidiary
Auditors

Kiyomi○

IwamuraDaisukeManager

WatanabeNomination
Risk
and
Human
Management Remuneration
RightsCommittee
Advisory
Committee
Committee○

Ura

Legal Dept.

Business
EthicsCommittee

○

Chair

○

○

○

GeneralManagerof Public○

Relations
Division
GeneralManager of
Production△

Division
Chairpersonsof InternalCommittee(Uniqlo)
GeneralManager of△

Production
Division(GU)
GeneralManager of△

President’s
OfficeIR Leader○

Legal Manager
Kenji
Shiratsuchi
External

Toru

Experts

Murayama△△△

Yoshinori

Chair

Tomita(Note) ○: Member △: Non-member attendee (including observers)(2) Outline of External Director’s limited liability agreements
The Company has entered into agreements with the External Directors, External Statutory Auditors, and Independent Auditor,
limiting their liabilities based on provisions in Article 427, Paragraph 1 of the Companies Act, which limits the liabilities fordamages 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 the amountstipulated by law. For Deloitte Touche Tohmatsu LLC, the limit of liabilities for damages shall be limited to the highest of thefollowing amounts multiplied by two: the total economic benefits received or to be received from the Company as remunerationand payment received for performance of duties in each business year during its service as the Independent Auditor.

- 56 -

(3) 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 covers the entire Fast Retailing Group (FR Group) and which adheres strictly to the Group’s policies and rules,
including the Group’s management principles, the Fast Retailing Way (FR Way), and the Fast Retailing Group Code of Conduct(FR Code of Conduct).
(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, andpromote strict adherence to corporate ethics and compliance across the Group as a whole. The Directors also ensure theeffectiveness of the Company’s rules and principles by reviewing them regularly and revising them when necessary toreflect 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
the compliance officer, tasked with establishing Company and Group-wide compliance frameworks and resolving
compliance-related issues.
3. 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 theBoard of Directors 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 and implement
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.
(b) 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 arealso 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 the matter
immediately to other Directors. Any serious legal violation should be reported immediately to the Statutory Auditors, thePresident, and the compliance officer.
4. The Company has set up an internal reporting system (hotline) for Directors and employees of the Company or Groupsubsidiaries 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 hotline operation, and makes necessary improvements. If
Directors of the Company or Group subsidiaries detect a problem with the hotline operation, they should apply to the Codeof Conduct Committee and request improvements.

- 57 -

(c) 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 decision
making 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 andmanaged 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(d) Managing Risk of Losses to FR Group
1. 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 the Company 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 shallbe 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.
(e) Ensuring Efficient Execution of Director Duties
1. To ensure that the duties of the 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, and decisions made after due
deliberation.
3. The execution of decisions made by the Board of Directors shall be conducted efficiently and appropriately by theoperating officers 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, and theappropriate 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.

- 58 -

(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 and regulations used whenestablishing entrusted individual Group companies. While respecting their autonomy, the Company oversees affiliatedcompanies 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 if necessary. If Directors of Group subsidiaries
discover any legal violations or serious compliance breaches, they should report them to the Statutory Auditors, thePresident, and compliance officer.
2. 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 thecompliance officer, and request appropriate improvements.
(h) Employee Assistants Requested by Statutory Auditors and Ensuring the Independence and Effectiveness of Statutory
Auditors’ Instructions to 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 independent of the Directors,
their performance will be evaluated by Statutory Auditors, and the Board of Statutory Auditors will approve decisions madeby 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 the execution ofCompany business.
(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 theCompany’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, and 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 Independent 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 their duties,
the Company shall pay invoices or settle debts swiftly, unless it proves the requested expenses or debt were not necessary to
the performance of the Statutory Auditor’s duties.

- 59 -

(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 and discussionof significant issues. They may voice opinions if necessary.
2. 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.
(l) 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 stance against and refuses to engage with anti-social forces. The Company forbids the use offinancial payments to resolve unreasonable claims from anti-social forces.
2. The Company forbids the use of anti-social forces for Company or individual gain.
(4) Other stipulations in the Company’s articles of incorporation(a) Number of directors
The Company’s articles of incorporation stipulate that the number of directors shall be at least three but not more than ten.
(b) Election criteria for directors
The Company’s articles of incorporation stipulate that the election of directors shall not be based on cumulative voting. Also,
the articles of incorporation stipulate that elections shall be based on a majority vote by shareholders, with at least one-third ofeligible shareholders participating.
(c) 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 stipulate that dividends are decided by a resolution of the Board of Directors, and not by a resolution of theGeneral Meeting of Shareholders, unless otherwise stipulated by law. The authority to decide payments of dividends fromsurplus is granted to the Board of Directors to give flexibility in the return of cash to shareholders.
(d) 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 the endof February every year by a resolution of the Board of Directors.
(e) Limitation of liabilities for Directors and Statutory Auditors
Under the stipulations of the Company’s articles of incorporation (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 their duties andpursue their expected roles to the full extent of their abilities.
(f) 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, theCompany’s articles of incorporation stipulate that these resolutions shall be passed by two-thirds vote of the shareholders, inwhich 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 the General Meeting of Shareholders.

- 60 -

8. Board of Directors
A. Board of Directors
Male: 13 persons Female: 2 persons (13.3% of officers are female)
Position

Responsibilities

Name

Date of birth

Brief biography
August 1972

Term ofofficeNumber ofshares held(Thousand shares)

Note 422,037Note 4-

Joined FAST RETAILING
CO., LTD.

September 1972

Director, FAST RETAILING
CO., LTD.

August 1973

Senior Managing Director,
FAST RETAILING CO.,LTD.

September 1984

President & CEO, FASTRETAILING CO., LTD.

June 2001

External Director, Softbank
Corp. (currently SOFTBANKGROUP CORP.)

November 2002

Representative
director,
chairman,

Chairman and CEO, FASTRETAILING CO., LTD.

CEO

Tadashi Yanai

7 February 1949

September 2005

Chairman, President, andCEO, FAST RETAILING

and president

CO., LTD. (current)
November 2005

Chairman, President, andCEO, UNIQLO CO., LTD.
(current)

September 2008

Director and Chairman, GOVRETAILING CO., LTD.
(currently G.U. CO., LTD.)(current)

June 2009

External Director, Nippon
Venture Capital Co., Ltd.
(current)

November 2011

Director, LINK THEORYJAPAN CO., LTD. (current)

April 1959

Joined Nichimen Company
Limited (currently Sojitz
Corporation)

October 2000

President, Nichimen
Corporation (currently Sojitz
Corporation)

April 2003

Chairman and Representative
Director, Sojitz Holdings
Corporation (currently Sojitz
Corporation)

June 2004

External Auditor, UNITIKA
LTD.

Director

Toru Hambayashi

7 January 1937

November 2005

External Director, FASTRETAILING CO., LTD.
(current)

June 2007

External Director, MAEDAORPORATION

April 2009

Advisor, The Association for
the Promotion of International
Trade, Japan (current)

June 2011

External Director, DAIKYOINCORPORATED

June 2015

External Director, UNITIKA
LTD.

June 2017- 61 -

Advisor, Maeda Corporation

Position

Responsibilities

Name

Date of birth

Brief biography
April 1981

Term ofofficeNumber ofshares held(Thousand shares)

Note 4-

Joined NISSAN MOTOR
CO.,LTD.

June 1989

Joined Goldman Sachs andCompany, Headquarters (NewYork)

November 1998

Managing Director ofGoldman Sachs and Company,
Headquarters (New York), and
M&A Advisory of Goldman
Sachs Japan Co., Ltd.

October 2003

Visiting Associate Professor,
Graduate School ofInternational Corporate
Strategy, Hitotsubashi
University

June 2005

External Director, Miraca
Holdings Inc. (currently H.U.

Director

Nobumichi Hattori

25 December 1957

Group Holdings, Inc.)
November 2005

External Director, FASTRETAILING CO., LTD.
(current)

October 2006

Visiting Professor, Graduate
School of International
Corporate Strategy,
Hitotsubashi University

April 2009

Visiting Professor, Waseda
Graduate School of Finance,
Accounting and Law (current)

March 2015

External Auditor, FrontierManagement Inc. (current)

June 2015

External Director, Hakuhodo
DY Holdings Inc. (current)

July 2016

Visiting Professor, Graduate
School of Business
Administration, Keio
University (current)- 62 -

Position

Responsibilities

Name

Date of birth

Brief biography
April 1978

Joined IBM Japan, Ltd.

December 1991

Joined Oracle Corporation

Term ofofficeNumber ofshares held(Thousand shares)

Note 4-Note 4-

Japan
August 2000

President & CEO, Oracle
Corporation Japan

January 2001

Executive Vice President,
Oracle Corporation

April 2008

Vice Chairman, Special
Olympics Nippon (currently
Special Olympics Nippon
Foundation)

June 2008
Director

Masaaki Shintaku

10 September 1954

Chairman, Oracle CorporationJapan

May 2009

Advisory Board Member,
NTT DOCOMO, INC.

November 2009

External Director, FASTRETAILING CO., LTD.
(current)

July 2011

External Director, COOKPAD
Inc.

December 2015

External Director, Works
Applications CO., LTD.

March 2019

Counselor, Special Olympics
Nippon Foundation (current)

June 2020

External Director, NTT
DOCOMO, INC. (current)

April 1980

Joined Mitsubishi Corporation

April 1991

Joined McKinsey & Company

June 2010

Professor, The Graduate
School of International
Corporate Strategy,
Hitotsubashi University(current)

June 2010

President, Genesys Partners(current)

September 2010
Director

Takashi Nawa

8 June 1957

Senior Advisor, Boston
Consulting Group

June 2011

External Director, NEC
Capital Solutions (current)

November 2012

External Director, FASTRETAILING CO., LTD.
(current)

June 2014

External Director, DENSOCORPORATION

June 2015

External Director, AjinomotoCo., Inc. (current)

June 2020

External Director, Sompo
Holdings, Inc. (current)- 63 -

Position

Responsibilities

Name

Date of birth

Brief biography
April 1971

Term ofofficeNumber ofshares held(Thousand shares)

Note 4-Note 40Note 4

4,781

Joined Daiwa House Industry
Co., Ltd.

June 2000

Director, Daiwa House
Industry Co., Ltd .

April 2004

Senior Managing Director,
Deputy Director, Sales
Division, Daiwa House
Industry Co., Ltd.

April 2007

Representative Director andVice President, Director, Sales

Director

Naotake Ohno

28 October 1948

Division, Daiwa House
Industry Co., Ltd.
April 2011

Representative Director andPresident, Daiwa House
Industry Co., Ltd.

November 2017

Special Consultant, Daiwa
House Industry Co., Ltd.
(current)

November 2018

External Director, FASTRETAILING CO., LTD.
(current)

April 1988

Joined Long Term Credit
Bank of Japan, Limited

July 1998
January 2005

Joined McKinsey & Company
Partner, McKinsey &Company

August 2011
Director

CFO

Takeshi Okazaki

9 July 1965

Joined FAST RETAILING
Co., Ltd.

August 2011

Group Executive Officer &CFO, Group Senior

September 2012

Executive Officer & CFO,
FAST RETAILING Co., Ltd.
(current)

November 2018

Director, FAST RETAILING
CO., LTD. (current)

September 1997

Joined Goldman Sachs andCompany

July 2004

Joined Link Theory Holdings(US) Inc. (currently Theory
LLC), Headquarters (NewYork)

September 2009

Joined FAST RETAILING
Co., Ltd.

January 2012

Chairman, Theory LLC(current)

November 2012
Director

Kazumi Yanai

23 April 1974

Group Executive Director,
FAST RETAILING Co., Ltd.

November 2013
November 2015

UNIQLO USA LLC COO
Chairman, UNIQLO USA
LLC (current)

July 2017

CEO, Chairman and President,
J BRAND HOLDINGS, LLC(current)

November 2018

Director, FAST RETAILING
CO., LTD (current)

June 2020

Executive Officer, FASTRETAILING CO., LTD(current)- 64 -

Position

Responsibilities

Name

Date of birth

Brief biography
April 2001

Joined Mitsubishi Corporation

April 2009

Seconded to Princes Limited

Term ofofficeNumber ofshares held(Thousand shares)

Note 44,780

Note 5

3(food business subsidiary inGreat Britain)
September 2012

Joined FAST RETAILING
Co., Ltd., responsible for
UNIQLO Sports Marketing

Director

Koji Yanai

19 May 1977

May 2013

Director, UNIQLO Global
Marketing

September 2013

Group Executive Officer,
FAST RETAILING Co., Ltd.

November 2018

Director, FAST RETAILING
CO., LTD (current)

June 2020

Executive Officer, FASTRETAILING CO., LTD(current)

April 1966

Joined The Taisei Fire andMarine Insurance Company
Limited (currently Sompo
Holdings, Inc.)

September 1972

Joined McDonald’s Co.
(Japan), Ltd. (currently
McDonald’s Holdings
Company (Japan), Ltd.)March 1993

Director, McDonald’s Co.
(Japan), Ltd. (currently
McDonald’s Holdings
Company (Japan), Ltd.)

April 1997

Deputy President and Director,
McDonald’s Co. (Japan), Ltd.

Standing
Statutory(currently McDonald’s
Akira Tanaka

26 June 1942

Holdings Company (Japan),

AuditorLtd.)
August 2003

Advisor, FAST RETAILING
CO., LTD.

November 2003

Managing Director, FASTRETAILING CO., LTD.

March 2006

Senior Vice President, FASTRETAILING CO., LTD.

November 2006

Statutory Auditor, FASTRETAILING CO., LTD.
(current)

October 2011

Council member, Special
Olympics Japan (current)

May 2013

Representative Director of FR
Health Insurance Organization(current)- 65 -

Position

Responsibilities

Name

Date of birth

Brief biography
April 1983

Term ofofficeNumber ofshares held(Thousand shares)

Note 6-Note 70

Joined ASAHIPENCORPORATION

February 1994

Joined FAST RETAILING
CO., LTD.

September 1998

Entrusted operating officer,
manager of administration,
FAST RETAILING CO.,LTD.

September 2005

General Manager, Group
Auditing, FAST RETAILING
CO., LTD.

January 2008

Standing
Statutory

Masaaki Shinjo

28 January 1956

AuditorDirector, Onezone Corp
(currently G.U. CO., LTD.)

March 2009

General Manager, Corporate
Administration, FASTRETAILING CO., LTD.

September 2009

Statutory Auditor, GOV
Retailing Co., Ltd. (currently
G.U. CO., LTD.)

March 2011

General Manager, Corporate
Planning & Management,
FAST RETAILING CO.,LTD.

November 2012

Statutory Auditor, FASTRETAILING CO., LTD.
(current)

November 1981

Joined the International
Department of Yamaichi
Securities Co., Ltd.

March 1988

Joined the Research
Department of Kleinwort
Benson Securities (the Tokyo
branch of Dresdner Kleinwort
Wasserstein (Japan) Ltd.)Standing
Statutory

October 2001
Masumi Mizusawa

22 July 1959

Joined the Investor Relations
Department of FAST

AuditorRETAILING CO., LTD.
February 2004

General Manager, Global
Corporate Management andControl Investor Relations
Division, FAST RETAILING
CO., LTD.

November 2019

Statutory Auditor, FASTRETAILING CO., LTD.
(current)- 66 -

Position

Responsibilities

Name

Date of birth

Brief biography
April 1991

Joined Mitsubishi Corporation

April 1999

Registered as a member ofTerm ofofficeNumber ofshares held(Thousand shares)

Note 6-

Japan Federation of Bar
Associations
April 1999

Joined Anderson, Mori &Tomotsune (AM&T) law firm

January 2007

Partner, AM&T (current)

April 2007

Guest associate professor,
Tokyo University Graduate

Statutory
AuditorKeiko Kaneko

11 November 1967

School of Law
November 2012

External Statutory Auditor,
FAST RETAILING CO.,LTD. (current)

November 2012

External Statutory Auditor,
UNIQLO CO., LTD. (current)

June 2013

External Statutory Auditor,
The Asahi Shimbun Company(current)

June 2019

External Director, Daifuku
Co., Ltd. (current)- 67 -

Position

Responsibilities

Name

Date of birth

Brief biography
February 1975

Term ofofficeNumber ofshares held(Thousand shares)

Note 5-Note 6-

Kashitani Public Accountant
Office (current)

January 1986

Representative, CENTURY
Audit Corporation (currently
Ernst & Young ShinNihon
LLC)

April 1986

Representative Director &CEO, Brain Core Co., Ltd.
(current)

March 1989

Representative Director &CEO, F P Brain Co., Ltd.
(current)

April 2002
Statutory
AuditorTakao Kashitani

Specially appointed professor,
Chuo University Graduate

7 November 1948

School of International
Accounting Department ofResearch (professional
graduate school)
June 2012

External Director, Tokyo
Electric Power Company(currently Tokyo ElectricPower Company Holdings)

June 2012

External Director, Japan
Freight Railway Company(current)

November 2018

External Statutory Auditor,
FAST RETAILING CO.,LTD. (current)

May 1972

Acquired qualification as acertified public accountant

Feb. 1989

Japan Country Manager,
Anderson Consulting(currently Accenture)

Dec 1995

President, Anderson
Consulting (currently
Accenture)

Apr. 2003

Chairman, Accenture

Sep. 2007

Senior Advisor, Accenture

Oct. 2009
Statutory
Auditor

Masakatsu Mori

22 January 1947

President, International
University of Japan (IUJ)

Jun. 2010

External Director, Stanley
Electric Co., Ltd. (current)

Jun. 2013

External Director, YAMATOHOLDINGS CO., LTD.
(current)

Nov. 2013

Deputy Vice President, IUJ

Apr. 2018

Special Advisor, IUJ (current)

Mar. 2019

External Director, Kirin
Holdings Company, Limited(current)

Nov. 2020

External Statutory Auditor,
FAST RETAILING CO.,LTD. (current)

Total

31,603(Notes) 1. Directors Toru Hambayashi, Nobumichi Hattori, Masaaki Shintaku, Takashi Nawa and Naotake Ohno are External
Directors as provided for in Article 2, Paragraph 15 of the Companies Act.
2. Directors Kazumi Yanai and Koji Yanai are relatives in the second degree of Tadashi Yanai, Representative Director,
Chairman and President.
- 68 -

3. Auditors Keiko Kaneko, Takao Kashitani and Masakatsu Mori are External Statutory Auditors as provided for in Article 2,
Paragraph 16 of the Companies Act.
4. For a one-year term beginning at the conclusion of the Ordinary General Meeting of Shareholders on 26 November 2020.
5. For a four-year term beginning at the conclusion of the Ordinary General Meeting of Shareholders on 29 November 2018.
6. For a four-year term beginning at the conclusion of the Ordinary General Meeting of Shareholders on 26 November 2020.
7. For a four-year term beginning at the conclusion of the Ordinary General Meeting of Shareholders on 28 November 2019.

- 69 -

B. External Statutory Auditors(1) Functions, roles and selection of External Directors and External Statutory Auditors
The Company has five External Directors and three External Statutory Auditors.
It is the Company’s expectation that the External Directors will keep an eye on the management monitoring function. From abusiness perspective, the advice of these individuals, with their abundance of experience and expertise, makes a major
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.
Director Naotake Ohno serves as a special consultant to Daiwa House Industry Co., Ltd., and we are currently engaged inbusiness negotiations concerning an office lease agreement with that company.
Statutory Auditor Keiko Kaneko serves as an external director of Daifuku Co., Ltd., a company with which Fast Retailing and its
group subsidiaries engage in business in regard to warehouse automation equipment.
Statutory Auditor Masakatsu Mori also serves as an outside director for YAMATO HOLDINGS CO., LTD., a company withwhich Fast Retailing Co., Ltd. and Group subsidiaries conduct business relating to the delivery of e-commerce products.
Shares of the Company held by External Statutory Auditors are stated in the “Number of shares held” column under the section“Board of Directors.”
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, theExternal Statutory Auditors have mutual alliances with the Internal Audit Department and Independent Auditors, as detailed in(iii) Internal audits and audits by Statutory 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 withrich experience as corporate managers in industry, with broad-ranging expertise and discerning views. In addition, to incorporate
wide range of stakeholders’ views in the audits of our business activities, we value both the independence and the diversity of ourExternal Statutory Auditors in various fields.

- 70 -

(2) Independent Directors
Five of the nine members of the Fast Retailing Board are external directors, and all of those five are recognized as Independent
Directors in accordance with the rules of the Tokyo Stock Exchange. The majority of the directors on the Board are external inorder to heighten the Board’s independence and strengthen its supervisory function.
In addition to the independence criteria set by the Tokyo Stock Exchange, Fast Retailing has set the following independence
standards and qualifications for external officers, including External Directors: A person shall not qualify as an Independent
Director of Fast Retailing, if:(a) he/she is, or has been within the past three years, a Business Partner*1 or an Executive Officer*2 of a Business Partner*2 of
the Fast Retailing Group, whose annual business dealings with Fast Retailing Group during the most recent business year
constituted 2% or more of the Fast Retailing Group’s consolidated revenue;(b) he/she is, or has been within the past three years, a Business Partner*1 of the Fast Retailing Group or an Executive Officer ofa Business Partner*2 of Fast Retailing, whose annual business dealings with the Fast Retailing Group during the most recent
business year constituted 2% or more of the Business Partner’s consolidated revenue;(c) he/she is a consultant, an accountant, or an attorney who receives, or has received over the past three years, any monies orproperty equivalent to 10 million yen or more from the Fast Retailing Group, except for remuneration for a director or an
auditor; or(d) he/she is, or has been over the past three years, a partner, an associate, or an employee of an accounting auditor of Fast
Retailing or its subsidiaries.
*1 “Business Partner” includes law firms, auditing firms, tax accounting firms, consultants, and any other organizations.
*2 “Executive Officer” means (i) for corporations, Executive Directors (as defined in the Companies Act of Japan), Executive
Officers (shikko-yaku, as defined in the Companies Act of Japan), corporate officers, and employees, and (ii) for noncorporate entities (including general incorporated associations (shadan-hojin), general incorporated foundations (zaidanhojin), and partnerships), directors with executive functions, officers, partners, associates, staff, and other employees.
(3) Supervision or auditing by External Directors or External Statutory Auditors; mutual cooperation between internal auditing,Statutory Auditor auditing, and accounting audits; and relationship with the Internal Control Department
At meetings of the Board of Directors, the Board of Statutory Auditors, and various committees, etc., external directors andExternal Statutory Auditor receive reports about the operating status of internal auditing and internal control systems, the resultsof Statutory Auditors audit and accounting audits, and other important matters, and they offer remarks and suggestions based on
their respective areas of expertise, experience, and knowledge.
At meetings of the Board of Directors, the Board of Statutory Auditors, various committees, etc., Statutory Auditors cooperatewith external directors and External Statutory Auditors in a timely manner and exchange opinions as well as share informationnecessary for the supervision and auditing of management.
For details regarding mutual cooperation between the External Statutory Auditors, the Internal Audit Department, and theaccounting auditors and the relationship with the Internal Control Department, please refer to (1) Status of Auditor’s Audit under
C. Status of Auditing.

- 71 -

C. Status of Auditing(1) Status of Statutory Auditor’s Audit
Statutory Auditors always attend Board of Directors meetings and audit the status of the execution of management. The Board of
Statutory Auditors consists of three internal full-time Statutory Auditors and three external Statutory Auditors, and after receiving
reports about important matters related to auditing on a regular and on-demand basis from the Internal Audit Department andaccounting auditors, the Board of Statutory Auditors discusses those important matters and always maintains a state ofcooperation. Both Statutory Auditor Takao Kashitani and Statutory Auditor Masakatsu Mori hold the qualification of certified
public accountant and have substantial knowledge related to finance and accounting.
During the fiscal year ended August 2020, we held 12 meetings of the Board of Auditors. The attendance record for each Auditor
is as follows.
Name

Number of meetings held

Attendance

Akira Tanaka

1212Masaaki Shinjo

1212Masumi Mizusawa

10

10

Takaharu Yasumoto

1212

Keiko Kaneko

12

12

Takao Kashitani

12

12

Masakatsu Mori--

Key matters discussed by the Board of Auditors include the global accounting system, the present situation and issues facing the
global e-commerce business, and the present situation and issues facing the UNIQLO Japan business.
In addition, the role of full-time Auditors includes the timely on-site auditing of key companies' new and existing stores,
attending domestic and international store audit briefing sessions, and attending regular and extraordinary Board of Directors
meetings and other employee meetings.
(2) Status of internal auditing
The Company has an Internal Audit Department that is independent from the executive departments, and, as at 31 August 2020,
seven dedicated staff members regularly verify the appropriateness and effectiveness of internal control systems and audit thestatus of the execution of business.
(3) Accounting audits(a) Name of audit firm
Deloitte Touche Tohmatsu LLC(b) Continuous auditing period
3 years(c) Name of Certified Public Accountants
Koichi Okubo, Hirofumi Otani, Yohei Masuda(d) Group of assistants to the independent auditors
Based on the audit plan formulated by Deloitte Touche Tohmatsu LLC, the group of assistants to the independent auditors
consists of 13 CPAs, 4 successful Certified Public Accountant applicants and 27 others.
(e) Policy and reasons for selecting audit corporation
Based on the “Practical Guidelines for Auditors, etc. Concerning the Formulation of Evaluation and Selection Standards for
Accounting Auditors” (Japan Audit & Supervisory Board Members Association; 13 October, 2017), the Board of Statutory
Auditors selected Deloitte Touche Tohmatsu LLC to be the accounting auditor after comprehensively examining their quality
control systems, audit team independence, communication systems, group audit systems, handling of fraud risks, and the like inaccordance with the prescribed selection standards and evaluation standards for accounting auditors. Regarding the policy for
determining the dismissal or non-reappointment of an accounting auditor, in the event that it is acknowledged that an itemprescribed in an item under Article 340-1 of the Companies Act is applicable, the Board of Statutory Auditors will pass a- 72 -

resolution to the effect that the Board of Statutory Auditors will dismiss the accounting auditor based on the consent of all
Statutory Auditors, and in the event that it is acknowledged that it is difficult for the accounting auditor to perform anappropriate audit due to an event arising that otherwise impairs the accounting auditor’s competence or independence, the Boardof Statutory Auditors will pass a resolution to the effect that the Board of Statutory Auditors will make a proposal to the General
Meeting of Shareholders to dismiss or not reappoint the accounting auditor.
(f) Evaluation of the accounting auditor by Statutory Auditors and the Board of Statutory Auditors
In addition to auditing and examining the independence, quality-control status, suitability of the system for performing duties,
and status of implementing accounting audits in the current fiscal year of the accounting auditor, the Board of Statutory Auditors
conducts evaluations by receiving reports from the accounting auditor on the status of performing its duties and requesting
explanations when necessary.
D. Details of Independent Auditors’ remuneration(1) Details of remuneration for Independent Auditor
Year ended 31 August 2019Year ended 31 August 2020

Remuneration
for audit andcertification duties(Millions of yen)

Remuneration
for duties otherthan auditing duties(Millions of yen)

Remuneration
for audit andcertification duties(Millions of yen)

Reporting Entity

248

7

239

-

Consolidated subsidiaries

56

-

40

-

Total

305

7

279

-

Class

Remuneration
for duties otherthan audit(Millions of yen)

The non-assurance services provided by the Independent Auditor are advisory concerning the application of IFRS, and others.
(2) Details of remuneration for member firms of the Deloitte global network (except(1))
Year ended 31 August 2019Year ended 31 August 2020

Remuneration
for audit andcertification duties(Millions of yen)

Remuneration
for duties otherthan auditing duties(Millions of yen)

Remuneration
for audit andcertification duties(Millions of yen)

Remuneration
for duties otherthan audit(Millions of yen)

-

378

-

463

Consolidated subsidiaries

277

72

266

100

Total

277

450

266

563

Class

Reporting Entity

Year ended 31 August 2019 (1 September 2018 - 31 August 2019)
The non-audit services paid for by the Company and the Company's subsidiaries to organizations belonging to the same
network as audit-certified public accountants, etc., comprise advisory services related to the e-commerce platform.
Year ended 31 August 2020 (1 September 2019 - 31 August 2020)
The non-audit services paid for by The Company and The Company's subsidiaries to organizations belonging to the same
network as audit-certified public accountants, etc., comprise advisory services related to the e-commerce platform.
(3) Other important details regarding remuneration for audit and certification duties
Not applicable.
(4) Policies for determination of accounting audit remuneration
The Company’s articles of incorporation stipulate that remuneration to independent auditors for audit services is determined by
the representative director, with the consent of the Board of Statutory Auditors.

- 73 -

(5) Board of Statutory Auditors Agree Independent Auditors Remuneration
The Board of Statutory Auditors agreed to the remuneration of the independent auditors as stipulated in Article 399, Item 1 of
the Companies Act, after checking auditing estimates versus actual performance in previous business years, including itemized
auditing hours and remuneration, and investigating whether the estimates for the year ended 31 August 2020 were reasonable,
based on the practical guidelines relating to independent auditors published by the Japan Audit & Supervisory Board Members
Association.

- 74 -

E. Directors’ Remuneration(1) Policies and process for determination of directors’ remuneration
With respect to directors’ remuneration and the like, at the 58th Ordinary General Meeting of Shareholders, which was held on 28
November 2019 resolution was passed to set the upper limit for directors at 2 billion yen per year (the maximum number of
directors stipulated in the Company’s Articles of Incorporation is 10); and, at the 42nd Ordinary General Meeting of
Shareholders, which was held on 26 November, 2003, a resolution was passed to set the upper limit for Statutory Auditors at 100
million yen per annum (the maximum number of Statutory Auditors stipulated in the Company’s Articles of Incorporation was
7).
Remuneration for internal directors (this refers to a director who is not an external director; the same applies below) consists ofbasic remuneration and performance-linked remuneration, as stated below.
Basic remuneration is calculated based on each person’s stipulated grade in accordance with various factors, including eachinternal director’s duties, responsibilities, track record and degree of contribution to the Company, in line with the prescribed
Remuneration Table. Internal directors’ grades are determined by the Board of Directors based on discussions held by the
Nomination and Remuneration Advisory Committee, whose members predominantly consist of external directors and External
Statutory Auditors.
Performance-linked remuneration is calculated within the total remuneration limit approved at the general meeting ofshareholders, based on an evaluation of each internal director’s performance. Based on discussions held by the Nomination andRemuneration Advisory Committee, the evaluations are determined by Representative Director Tadashi Yanai, who is entrustedwith determining individual remuneration amounts for directors by the Board of Directors.
During the business year, the Nomination and Remuneration Advisory Committee held two meetings, and discussed issues suchas the format of the grades and remuneration of internal directors.
The remuneration for External Directors is fixed at 10 million yen per year. This fixed amount is determined by Representative
Director Tadashi Yanai, who is entrusted with determining individual remuneration amounts for directors by the Board of
Directors.
The remuneration for Statutory Auditors is determined through discussions by the Board of Statutory Auditors.
The compensation of the Company's internal directors, who are mainly officers in the Company's consolidated subsidiaries, ispaid by the relevant consolidated subsidiaries.

- 75 -

(2) Details of remuneration of the Company’s executives are as follows:

Executive category

Entity category

Totalamount of
remuneration(Millions ofyen)

Total amount of remuneration, by type(Millions of yen)
Basic
Compensation

Short-term
performancelinked
remuneration

Long-term
performancelinked
remuneration

Number of
executives(Persons)

Directors (excluding
external directors)

the Company

584

360

218

5

the subsidiaries

165

131

25

8

External directors

the Company

50

50

-

-

5

Statutory Auditors(excluding External

the Company

47

47

-

-

3

the Company

27

27

-

-

the subsidiaries

11

11

-

-

4

Statutory Auditors)
External Statutory Auditors

3(a) Performance-linked remuneration is recorded as amounts expensed for reserves before taking into account performance
evaluations for the fiscal period ended August 2020. The actual amount paid is determined by calculations based on theperformance evaluation, etc., of the individual director.
(b) Total amount of consolidated remuneration, etc., for each officer: note that this is to be more than 100 million yen

Name

Total amount of remuneration, by type (Millions of yen)

Total amount of
remuneration(Millions of yen)

Basic Compensation

Short-term
performance-linked
remuneration

Long-term
performance-linked
remuneration

Executive Director
Tadashi Yanai

400

240

160

-

DirectorTakeshi Okazaki

185

120

60

5

(Note) As stated below, short-term performance-linked compensation will be calculated based on performance evaluations from theprevious fiscal year.
(3) Salaries for key personnel serving concurrently as an employee and an officer
Not applicable.
(4) Details of policies related to determining the amount of an officer’s remuneration, etc.
(a) The amount of remuneration, etc., for corporate auditors is calculated within the limit approved at the General Meeting of
Shareholders as mentioned above, and it is determined through discussions by the Board of Statutory Auditors.
(b) The amount of remuneration, etc., for external directors is calculated within the limit approved at the General Meeting of
Shareholders as mentioned above, and it is calculated as a fixed value for a one-year period.
(c) Remuneration for internal directors is composed of three elements (basic remuneration; short-term performance-linked
remuneration; and long-term performance-linked remuneration), and the details and calculation method for each are as statedbelow. Each element is determined within the limit for director remuneration, etc., approved at the General Meeting of
Shareholders as mentioned above.

- 76 -

<Basic remuneration>
This is calculated based on the grade of each internal director, in line with the prescribed Remuneration Table.
<Short-term performance-linked remuneration>
The target amount for short-term performance-linked remuneration is stipulated in accordance with the table showing short-term
performance-linked remuneration for each grade. A target-management system sets performance targets, group targets, andindividual targets at the start of the fiscal year. Based on this system, performance for the year is assessed using five grades, and theactual amount paid is calculated based on the Payment Criteria Table shown below.
Grade

Definition

Percentage of Target Achieved

A

Targets greatly surpassed and many superb courses of action are evident

200%

AB

Targets achieved and superb courses of action are evident

150%

B

Targets achieved, or superb courses of action adequate for achieving target areevident

100%

BC

Targets not achieved, but it is acknowledged that efforts have been made that may
lead to future developments

75%

C

Targets not achieved and the anticipated course of action was lacking

50%<Long-term performance-linked remuneration>
The target amount for long-term performance-linked remuneration is stipulated in accordance with the table showing long-term
performance-linked remuneration for each grade.
A) A portion equivalent to 1/3 of the long-term performance-linked remuneration amount is granted as phantom stock in order toprovide a link with the corporate value of the Fast Retailing Group. The phantom stock is cash-settled remuneration that is
linked to the Company’s share value, and it is exercised automatically three years after the date on which it was granted, when acorresponding cash amount based on the Company’s share value on the exercise date is paid. Incidentally, neither dividends nor
an amount equivalent to dividends is paid.
B) A portion equivalent to 2/3 of the long-term performance-linked remuneration amount is paid in cash in order to improve thestrategy and performances of the business unit(s) managed by the officer in question. This portion is paid based on a
performance evaluation of the business operations managed by the officer in the three-year period after the target is set.
B-1) 50% of the cash-allowance portion is determined based on quantitative targets. An evaluation is carried out based on therate at which operating income budget targets are met and on operating margins for the brands and countries managed by
the officer over the three year (cumulative) period, and the amount paid is calculated based on the prescribed Criteria
Table.
B-2) The remaining 50% of the cash-allowance portion is determined based on qualitative targets. An evaluation is carried outof the degree to which medium-term (three year) budget targets have been met; targets that are set in the year in which thelong-term performance-linked remuneration is assigned. The amount paid is then calculated based on the Payment Criteria
Table shown below.
Grade

Definition

Percentage of Target Achieved

A

Targets greatly surpassed and many superb courses of action are evident

200%

AB

Targets achieved and superb courses of action are evident

150%

B

Targets achieved, or superb courses of action adequate for achieving target areevident

100%

BC

Targets not achieved, but it is acknowledged that efforts have been made that may
lead to future developments

75%

C

Targets not achieved and the anticipated course of action was lacking

50%- 77 -

F. Status of share holdings(1) Criteria and approach to “investment share” categories
The Company categorizes share holdings that are deemed to contribute to improving medium-to-long-term corporate value as“investment shares with a purpose other than net investment” and other shares as “investment shares for the purpose of net
investment.”(2) Investment shares for which the investment purpose is a purpose other than net investment(a) In principle, the Group has a policy of not having any cross-holdings; however, on occasion these holdings may occur - but onlyin the minimum number of shares required. Each year, the Board of Directors verifies the economic rationality, etc., for any
cross-holdings; this is done for each individual stock and includes any medium-to-long term trading relationships. The Board
then makes a comprehensive judgment on the significance of the holdings. The specific contents of the verifications are notdisclosed due to the trading relationships with the corporation(s) in which shares are held.
(b) Number of stocks and amounts included in the balance sheet
Amounts included in
the balance sheet(Millions of yen)

Number of stocks
Unlisted shares

3

212

Shares other than unlisted shares

2

1,158

(Stock for which the number of shares increased in the current business year)
No applicable matters(Stocks for which the number of shares decreased in the current business year)
No applicable matters- 78 -

(c) Information on the number of shares and balance sheet difficulties for “specified investment shares” and “deemed shares” - byindividual stockSpecified Investment Shares:

Stock

Current
business year

Previousbusiness year

Number ofsharesNumber ofsharesBalance sheet
amount(Millions of yen)

Balance sheet
amount(Millions of yen)

Holding purpose, quantitative holding
effect, and reason for increase in numberof shares

Holding theCompany’s
shares

These shares are held to try to strengthen ties

286,500

286,500

in the medium-term, as a strategic partner.
Moreover, each year the Board of Directors
verifies the economic rationality, etc., foreach individual stock, which includes any
medium-to-long term trading relationships;
the Board then makes a comprehensive

Matsuoka Corporation

566

587

No

judgment on the significance of the holding.
The specific contents of the verification are
not disclosed due to the trading relationships
with the corporation in which shares are
held.
These shares are held to try to strengthen ties
in the medium-term, as a strategic partner.

20,815,000

20,815,000

Moreover, each year the Board of Directors
verifies the economic rationality, etc., foreach individual stock, which includes any
medium-to-long term trading relationships;

Crystal International
Group Ltd.

the Board then makes a comprehensive
judgment on the significance of the holding.
591

884

The specific contents of the verification are
not disclosed due to the trading relationships
with the corporation in which shares are
held.

Deemed Shares: Not applicable.
(3) Investment shares held for the investment purpose
Not applicable.

- 79 -

No

9. Financial Information
A. Preparation of consolidated financial statements(1) Since the Company meets all criteria of a “specific company” defined in Articles 1-2 of the Rules Governing Term, Form andPreparation of Consolidated Financial Statements (Financial Ministerial Order 28, 1976) (hereinafter referred to as the “Rules on
Consolidated Financial Statements”), the consolidated financial statements of the Group were prepared in accordance with IFRS
pursuant to Article 93 of the Rules on Consolidated Financial Statements.
(2) The financial statements of the Company were prepared in accordance with the Rules Governing Term, Form and Presentation of
Non-consolidated Financial Statements (Financial Ministerial Order 59, 1963) (hereinafter referred to as the “Rules on Nonconsolidated Financial Statements”).
The non-consolidated financial statements are prepared in accordance with the provisions set out in Article 127 of the Rules 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 yen.
B. Audit and certification
The Company’s consolidated and non-consolidated financial statements for the fiscal year from 1 September 2019 - 31 August2020 have been audited by Deloitte Touche Tohmatsu LLC in accordance with auditing standards generally accepted in Japanpursuant to Article 193-2-1 of the Financial Instruments and Exchange Act. Deloitte Touche Tohmatsu LLC also conducted theaudit of consolidated financial statements of the Company in accordance with International Standards on Auditing (ISA).
C. Special measures for ensuring the accuracy of our consolidated financial statements and a framework for ensuring consolidated
financial statements are appropriately prepared in accordance with IFRS.
The Company has taken special measures to ensure the appropriateness of our consolidated financial statements and has establisheda framework to ensure our consolidated financial statements are appropriately prepared in accordance with IFRS. Details of theseare given below.
(1) To establish a framework capable of adapting appropriately to changes in accounting standards, the Company has made efforts
to build specialist knowledge by appointing employees who are well versed in IFRS, joining the Accounting Standards Boardof 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 Group
guidelines for accounting practices based on IFRS, and have been conducting accounting procedures based on these guidelines.
We regularly obtain standards and press releases published by the International Accounting Standards Board (“IASB”), study
the latest standards and their potential impact on our Company, and update our Group guidelines for accounting practices
accordingly.

- 80 -

D. Consolidated Financial Statements(1) Consolidated statement of financial position(Millions of yen)

ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Derivative financial assets
Income taxes receivable
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Financial assets
Investments in associates accounted
for using the equity method
Deferred tax assets
Derivative financial assets
Other assets
Total non-current assets

Notes

As at 31 August 2019

As at 31 August 2020

8,30
9,30
11,30
10
30

1,086,519
60,39844,473
410,526
14,787
1,492
19,975
1,638,174

1,093,531
67,06949,890417,529
14,413
2,126
10,6291,655,191

13,15
15,17
14
14,15
11,30

162,092
8,092
60,11777,026

136,123
399,944
8,092
66,83367,77016

14,587

14,2211830
1233,1639,442
7,861
372,384
2,010,558

45,447
10,983
7,383
756,799
2,411,990

19,30
11,17,28,30
30
17,30

191,769
159,006
2,985
27,451
13,34082,103476,658

210,747
213,301
2,763
114,652
22,602752
82,636
647,455

499,948
20,474
8,822
3,838
17,281
550,365
1,027,024

370,780
351,526
32,658
7,760
3,205
2,524
768,455
1,415,910(continued)

12

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

20
12

11,17,28,30
17,30
20
18
30
12

- 81 -

(Millions of yen)

EQUITY
Capital stock
Capital surplus
Retained earnings
Treasury stock, at cost
Other components of equity
Equity attributable to ownersof the Parent
Non-controlling interests
Total equity

Notes

As at 31 August 2019

As at 31 August 2020

21
21
21
21
21

10,273
20,603928,748(15,271)(5,732)

10,27323,365
933,303(15,129)
4,749

938,621956,562

44,913
983,534
2,010,558

39,516
996,079
2,411,990

Total liabilities and equity- 82 -

(2) Consolidated statement of profit or loss
(Millions of yen)
Notes
Revenue
Cost of sales
Gross profit
Selling, general andadministrative expenses
Other income
Other expenses
Share of profit and loss of associates
accounted for using the equity method
Operating profit
Finance income
Finance costs
Profit before income taxes
Income taxes
Profit for the year

Year ended
31 August 2020

22

2,290,548(1,170,987)
1,119,561

2,008,846(1,033,000)
975,84523(854,394)(805,821)

24
15,24

4,533
(12,626)

7,954(28,952)

16

562

321

257,636
12,293(17,481)
252,447(74,400)
178,046

149,347
11,228(7,707)
152,868(62,470)
90,398

162,578
15,467
178,046

90,35740
90,3981,593.20
1,590.55

885.15883.6225
25
18

Profit for the year attributable to:
Owners of the Parent
Non-controlling interests
Total
Earnings per share
Basic (Yen)
Diluted (Yen)Year ended
31 August 201927
27

- 83 -

(3) Consolidated statement of comprehensive income(Millions of yen)
Notes
Profit for the year
Other comprehensive income / (loss),
net of income taxes
Items that will not be reclassified
subsequently to profit or loss
Financial assets measured at fair value
through other comprehensive
income / (loss)
Total items that will not be reclassified
subsequently to profit or loss
Items that may be reclassified
subsequently to profit or loss
Exchange differences on translating
foreign operations
Cash flow hedges
Share of other comprehensive
income of associates
Total items that may be reclassified
subsequently to profit or loss
Other comprehensive income / (loss),
net of Income tax
Total comprehensive income
for the year
Attributable to:
Owners of the Parent
Non-controlling interests
Total comprehensive income
for the year

Year ended
31 August 2019Year ended
31 August 2020

178,046

90,398

(734)

(630)

(734)

(630)

26

(33,649)

5,227

26

11,39814,130

26

(11)

(39)

(22,262)

19,318(22,997)

18,687

155,049

109,085

140,900
14,148110,134(1,049)155,049

109,085

26- 84 -

(4) Consolidated statement of changes in equity
For the year ended 31 August 2019
(Millions of yen)
Other components of equity

Notes

As at 1 September 2018

Capitalstock

CapitalsurplusRetainedearnings

FinancialassetsForeign
Share of other
Treasurymeasured
Cash-flow
currency
comprehensive
stock,
at fair value
hedgetranslation
income ofat costthrough otherreserve
reserveassociatescomprehensive
income / (loss)

10,273

18,275815,146(15,429)--

162,578

-

-

-

-

-

-

162,578

15,467

178,046

-

-

-

-

(734)

(29,359)

8,427

(11)

(21,678)(21,678)(1,318)(22,997)--

162,578-(734)(29,359)

8,427

(11)

(21,678)

140,900

14,148155,049

37

15,42919,202-Equityattributable
Nonto owners controllingof theinterests
ParentTotal
equityTotal

34,669862,936

39,841

902,777

Net changes during the year
Comprehensive income
Profit for the year
Other comprehensive
income / (loss)

26

Total comprehensive income
Transactions with the owners of
the Parent
Acquisition of treasury stock

21

-

-

-

(2)

-

-

-

-

-

(2)

-

(2)

Disposal of treasury stock

21

-

1,558

-

159

-

-

-

-

-

1,718

-

1,718

Dividends

21

-

-

(48,976)

-

-

-

-

-

-

(48,976)(9,218)(58,195)

Share-based payments

21

-

769

-

-

-

-

-

-

-

769

-

769

-

-

-

-

-

-

-

-

-

-

239

239

-

-

-

-

-

-

-

-

-

-

353

353

-

-

-

-

-

-

(18,723)-(18,723)(18,723)(451)(19,175)-

2,328(48,976)

157

-

-

(18,723)-(18,723)(65,215)(9,076)(74,292)-

2,328

113,602

157

(734)

(29,359)(10,296)(11)(40,402)75,6855,071

80,757

10,273

20,603928,748(15,271)(697)(13,929)

8,906

(11)

(5,732)

938,62144,913

983,534

Incorporation of a new
subsidiary
Changes in ownershipinterests in subsidiaries
without losing control
Transfer to non-financial
assetsTotal transactions with theowners of the Parent
Total net changes during the year
As at 31 August 2019- 85 -

For the year ended 31 August 2020
(Millions of yen)
Other components of equity

Notes

As at 1 September 2019
Effect of change in accounting
policy4Balance after adjustment

Capitalstock

CapitalsurplusRetainedearnings

FinancialassetsForeign
Share of other
Treasurymeasured
Cash-flow
currency
comprehensive
stock,
at fair value
hedgetranslation
income ofat costthrough otherreserve
reserveassociatescomprehensive
income / (loss)

Total

Equityattributable
Nonto owners controllingof theinterests
ParentTotal
equity10,273

20,603928,748(15,271)(697)(13,929)

8,906

(11)

(5,732)

938,62144,913

983,534--(35,094)

-

-

-

-

-

-

(35,094)(1,331)(36,426)

10,273

20,603

893,653(15,271)(697)(13,929)

8,906

(11)

(5,732)

903,526

43,581

947,108--

90,357

-

-

-

-

-

-

90,35740

90,398

-

-

-

-

(630)

5,440

15,007(39)

19,776

19,776(1,089)18,687--90,357

-

(630)

5,440

15,007(39)

19,776110,134(1,049)109,085

Net changes during the year
Comprehensive income
Profit for the year
Other comprehensive
income / (loss)

26

Total comprehensive income
Transactions with the owners of
the Parent
Acquisition of treasury stock

21

-

-

-

(5)

-

-

-

-

-

(5)

-

(5)

Disposal of treasury stock

21

-

1,496

-

148

-

-

-

-

-

1,644

-

1,644

Dividends

21

-

-

(48,994)

-

-

-

-

-

-

(48,994)(2,038)(51,032)

Share-based payments

21

-

1,265

-

-

-

-

-

-

-

1,265

-

1,265

-

-

-

-

-

-

(11,008)-(11,008)(11,008)(976)(11,985)--(1,713)

-

1,713

-

-

-

1,713

-

-

-

-

2,761

(50,708)

142

1,713

-

(11,008)-(9,294)(57,098)(3,015)(60,113)

Transfer to non-financial
assetsTransfer to retained earnings
Total transactions with theowners of the Parent
Total net changes during the year
As at 31 August 2020

-

2,761

39,649

142

1,082

5,440

3,998

(39)

10,48253,036(4,064)

48,971

10,27323,365

933,303(15,129)385(8,489)12,905

(51)

4,749

956,562

39,516

996,079- 86 -

(5) Consolidated statement of cash flows(Millions of yen)
Notes
Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Impairment losses
Interest and dividend income
Interest expenses
Foreign exchange losses / (gains)Share of profit and loss of associates accounted for using
the equity method
Losses on disposal of property, plant and equipment(Increase) / Decrease in trade and other receivables(Increase) / Decrease in inventories
Increase / (Decrease) in trade and other payables(Increase) / Decrease in other assets
Increase / (Decrease) in other liabilities
Others, net
Cash generated from operations
Interest and dividend income received
Interest paid
Income taxes paid
Income taxes refunded
Net cash generated by operating activities

15

Cash flows from investing activities
Amounts deposited into bank deposits with original
maturities of three months or longer
Amounts withdrawn from bank deposits with original
maturities of three months or longer
Payments for property, plant and equipment
Payments for intangible assets
Payments for acquisition of right-of-use assets
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Others, net
Net cash generated by / (used in) investing activities

Year ended
31 August 2019Year ended
31 August 2020

252,447
48,4763,444(12,293)
4,369
13,107

152,868
177,848
23,074(9,724)
7,706(1,503)

(562)

(321)

650
(6,302)
38,145(16,426)
2,932
36,881
1,719
366,589
10,533(3,848)(74,263)1,493
300,505

1,125(4,164)(2,665)
18,60010,686(44,567)
8,776
337,7388,546(6,783)(75,460)
827
264,868(103,619)(88,714)

92,252

83,502(41,567)(24,177)(7,490)4,304
1,541(78,756)(46,500)(21,008)(1,808)(7,171)
6,394(673)(75,981)(continued)- 87 -

(Millions of yen)
Notes
Cash flows from financing activities
Proceeds from short-term loans payable
Repayment of short-term loans payable
Repayment of long-term loans payable
Repayment of redemption of bonds
Dividends paid to owners of the Parent
Capital contributions from non-controlling interests
Dividends paid to non-controlling interests
Repayments of finance lease obligations
Repayments of lease liabilities
Others, net
Net cash generated by / (used in) financing activities
Effect of exchange rate changes on the balance of cash held
in foreign currencies
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of year
Cash and cash equivalents at the end of year

28
28
28
28
21

28
28

8
8

- 88 -

Year ended
31 August 2019Year ended
31 August 2020

17,145(16,789)(4,433)(30,000)(48,975)
592(8,773)(11,377)
182(102,429)

35,019(21,546)(4,343)(48,995)(2,328)(141,216)
142(183,268)(32,496)

1,393

86,822
999,697
1,086,519

7,011
1,086,519
1,093,531

(6) Notes to the consolidated financial statements
1. Reporting Entity
FAST RETAILING CO., LTD. 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 (casual wear retail business operating
under the “GU” brand in Japan and overseas) and Theory business (apparel designing and retail business in Japan and overseas),etc.
2. Basis of Preparation
A. Compliance with IFRSThe consolidated financial statements of the Group have been prepared in compliance with IFRS issued by the IASB.
The Group meets all criteria of a “specified company” defined under Article 1-2 of the Rules Governing Term, Form, andPreparation of Consolidated Financial Statements accordingly, applies Article 93 of the Rules Governing Term, Form, andPreparation of Consolidated Financial Statements.
B. Approval of the Consolidated Financial Statements
The consolidated financial statements were approved on 26 November 2020 by Tadashi Yanai, Chairman, President, and CEO,and Takeshi Okazaki, Group Senior Vice President and CFO.
C. Basis of Measurement
The consolidated financial statements have been prepared on a historical cost basis, except for certain assets, liabilities, andfinancial instruments which are measured at fair value as indicated in “3. Significant Accounting Policies.”
D. Functional Currency and Presentation Currency
The presentation currency for the Group’s consolidated financial statements is yen (in units of millions of yen), which is also
the Company’s functional currency. All values are rounded down to the nearest million yen, except when otherwise indicated.
E. Use of Estimates and Judgments
The preparation of the consolidated financial statements in accordance with IFRS requires management to make judgments,
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 estimates and judgments that have significant effects on the amounts recognized in the
consolidated financial statements is as follows:• Valuation of inventories (3. Significant Accounting Policies (6) and Note 10)• Recoverable amounts from cash-generating units ("CGU") for impairment tests (3. Significant Accounting Policies (10) andNote 15)• Useful lives of property, plant and equipment, and intangible assets (3. Significant Accounting Policies (7), (8) and Notes 13,
14)• Recoverability of deferred tax assets (3. Significant Accounting Policies (14) and Note 18)• Recoverability of trade and other receivables (3. Significant Accounting Policies (4) and Note 9, 30)• Accounting treatment and valuation of provisions (3. Significant Accounting Policies (11) and Note 20)• Fair value measurement of financial instruments (3. Significant Accounting Policies (4) and Note 30)• Fair value measurement for unit price for share-based payments (3. Significant Accounting Policies (12) and Note 29)• Lease term (3. Significant Accounting Policies (9) and Note 17)
With the global spread of COVID-19, the Group's performance has been adversely affected due to temporarily closing stores,
etc. Regarding impairment of non-financial assets, although we assume that business activities will gradually recover from- 89 -

September 2020 onward, we estimate that the impact of the COVID-19 pandemic will continue to be felt through to the end of
August 2021, and we are working on the assumption that we will see recovery from that point onward. The estimates are madeby taking into consideration the level of impact that differ from region to region and case-by-case basis.

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3. Significant Accounting Policies
A. Basis of Consolidation(1) Subsidiaries
A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. The Group controls
enterprises when it is exposed, or has rights, to variable returns arising from its involvement in those enterprises or when theGroup has rights to variable returns in those enterprises and is able to have an impact on said variable returns through its
power over those enterprises. A subsidiary’s financial statements are incorporated into the Group’s consolidated financial
statements from the date on which the Group, obtains control until the date that control ceases.
The subsidiaries adopted the 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 statutory fiscal year end dates for FAST RETAILING (CHINA) TRADING CO., LTD., UNIQLO TRADING CO.,LTD., FAST RETAILING (SHANGHAI) TRADING CO., LTD., GU (Shanghai) Co., Ltd. and ten other companies vary
between 31 December, 31 March and 30 June.
The management accounts the financial statements of these subsidiaries as at the Group’s year-end that were prepared solely
for the Group’s consolidation purpose.
The financial statements of other subsidiaries are prepared 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 the noncontrolling interests, even if this results in the non-controlling interests having a deficit balance.
The number of consolidated subsidiaries as at 31 August 2020 is 134.
(2) Investments in associates
An associate is an entity in which the Group has significant influence over the financial and operating policies.
If the Group holds 20% or more of the voting rights of another enterprise, it is presumed that the Group has a significant
influence over the other enterprise. Investments in associates are accounted by applying the equity method, and measured athistorical cost at the time of acquisition.
Thereafter the carrying amount of the investment is adjusted to recognize changes in the Group’s share of net assets of theassociate since acquisition date. The consolidated statement of profit or loss of profit or loss reflects the Group’s share of theresults of operations of the associate. Any change in other comprehensive income of those investees is presented as part of theGroup’s other comprehensive income.
Unrealized gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of
the interest in the associate.
The number of associates as at 31 August 2020 is four.

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B. Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured at theaggregation of the acquisition date fair values of assets transferred, liabilities assumed, and equity interests issued by theCompany 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 gains on the
consolidated statement of profit or loss.
Acquisition-related costs are expensed as incurred. Additional acquisitions of non-controlling interests are accounted for as
equity transactions, and no goodwill is recognized.
Contingent liabilities of acquired companies are recognized in a business combination only if they are present obligations, wereincurred 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 fair value orat 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 the businesscombination occurs, the items for which the acquisition accounting is incomplete are reported using provisional amounts. Thoseamounts provisionally recognized on the acquisition date are retrospectively adjusted to reflect new information as if theacquisitions took place during the measurement period, had facts and circumstances 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 arerecognized if new information results in the recognition of additional assets or liabilities. The measurement period should bewithin one year.
C. Foreign Currencies(1) 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 of
exchange at the reporting date. Differences arising from settlement or translation of monetary items are recognized in profit orloss.
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 translated using
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 the item (i.e., translationdifferences 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).
(2) Foreign Operations
Upon consolidation, the assets and liabilities of foreign operations are translated into yen at the rate of exchange prevailing at
each reporting date and their statements of profit or loss are translated at average exchange rates during the period. The
exchange differences arising on translation for consolidation are recognized in other comprehensive income. On disposal of aforeign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in
profit or loss.

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D. Financial Instruments(1) Financial assets(a) Initial recognition and measurement
The Group classifies financial assets as “financial assets measured at fair value through net profit or loss”; “financial assets
measured at fair value through other comprehensive income” or “financial assets measured at amortized cost”; and thatclassification is determined at the time of initial recognition.
The Group carries out initial recognition on the date of the transaction, when it becomes party to the contract related to thefinancial asset(s).
All financial assets are measured by adding directly linked transaction costs to fair value, except those in the categoryclassified as measured at fair value through net profit or loss.
Financial assets are classified as financial assets measured at amortized cost, if the following requirements are satisfied:• Assets are held based on a business model that requires them to be held to collect contractual cash flow
• Cash flow, made up solely of payment of the principal and interest on the balance of principal, is generated on a specified
day under the contractual terms of the financial asset.
Financial assets other than financial assets measured at amortized cost are classified as financial assets measured at fairvalue. Apart from equity instruments held for trading purposes, which must be measured at fair value through Profit or Loss,other equity instruments measured at fair value are designated as either being measured at fair value through Profit or Lossor alternatively measured at fair value through Other Comprehensive Income; this is done for each individual equity
instrument and the designation is continuously applied to the instrument thereafter.
(b) Subsequent measurement
Measurement after the initial recognition of financial assets is carried out as follows in accordance with the classification.
(i) Financial assets measured at amortized cost
Financial assets measured at amortized cost are measured at amortized cost using the effective interest method.
(ii) Financial assets measured at fair value
The fluctuation in the fair value of financial assets measured at fair value is recognized as net profit or loss. However, any
fluctuation in the fair value of equity financial instruments designated as instruments to be measured at fair value throughother comprehensive income, is recognized as other comprehensive income; and if recognition is suspended or if the fairvalue significantly drops, then it is transferred to Retained earnings. Note that dividends from the financial assets arerecognized as net profit or loss as part of finance income.

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(c) Impairment of financial assets
For financial assets measured at amortized cost, expected credit losses pertaining to the financial assets are recognized asallowances for doubtful accounts.
On each reporting date, the credit risk pertaining to each financial asset is evaluated to see if it has increased significantly
since initial recognition and, if it has, then the expected credit losses for the entire period are recognized as an allowance for
doubtful accounts; whereas if it has not, then the expected credit losses for a 12-month period are recognized as anallowance for doubtful accounts.
At the time of an evaluation, if the contractual payment due date has passed then, in principle, it will be assumed that thecredit risk has significantly increased; however, when the evaluation takes place, other information that can be reasonably
used and used as support is taken into account.
However, trade receivables, etc., that do not include any major financial elements are always recognized as being an amountequivalent to expected credit loss for the entire period. If the issuer or debtor is in serious financial difficulties or is subject
to a legal or formal business failure, then it is judged that there has been a default on obligations. And if it is judged that
there has been a default on obligations, then the assets are treated as credit-impaired financial assets.
Irrespective of the above, if it is reasonably judged that all or part of financial assets cannot be collected due to our legal
rights of claim being terminated or similar, then the book value of the financial assets is directly amortized.
(d) 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.
(2) Non-derivative financial liabilities(a) Initial recognition and measurement
Corporate bonds and loans, etc., are initially recognized by the Group on their effective date; and other financial liabilities
are initially recognized on their transaction date. Financial liabilities are either classified as financial liabilities measured atfair value through profit or loss or financial liabilities measured at amortized cost, and this classification is determined at thetime of initial recognition. All financial liabilities are initially measured at fair value, but financial liabilities measured atamortized cost are measured using the amount obtained after deducting directly attributable transaction costs.
(b) Subsequent measurements
For measurements made after the initial recognition of a financial liability, any financial liabilities measured at fair value
through profit or loss include financial liabilities held for trading purposes and financial liabilities specified at the time ofinitial recognition as measured at fair value through profit or loss; and when these liabilities are measured at fair value after
initial recognition, any changes are recognized as profit or loss for the current period. Any financial liabilities measured atamortized cost are measured after initial recognition at amortized cost using the effective interest method. Any gains orlosses made in the event of amortization using the effective interest method and the de-recognition of a liability arerecognized as profit or loss for the current period as part of finance costs.
(c) 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 expired.
(3) Presentation of financial assets and financial liabilities
The balance of financial assets and financial liabilities is offset on the consolidated statement of financial position and the net
amount is presented only in cases in which the Group has the right to legally enforce offsetting the balances and also intends
to settle the net amount, or realize assets and settle liabilities, at the same time.

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(4) Derivative financial instruments and hedge accounting
The Group uses derivative financial instruments, such as forward currency contracts, to hedge its foreign currency risks. Suchderivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into
and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive andas 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 theGroup 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 nature of the risk
being hedged, and how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in
the hedged item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective inachieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they 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
For gains and losses on hedges, effective portions are recognized as other comprehensive income, and non-effective portions
are immediately recognized as net profit or loss on the Consolidated Statement of Profit or Loss.
Amounts pertaining to hedges that are included as other comprehensive income are transferred to profit or loss at the point intime when the hedged trades have an impact on profit or loss. If a transaction is planned that will generate recognition ofhedged assets or liabilities of a non-financial nature, then the amount that is recognized as other comprehensive income isprocessed as a correction of the initial book value for 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 is revoked, theamounts previously recognized in equity through other comprehensive income are recorded as equity until the forecast
transaction occurs or firm commitment is met.
E. 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 to cash andwhich are subject to an insignificant risk of changes in value.
F. Inventories
Inventories are valued at the lower of cost and net realizable value; the weighted average method is principally used todetermine cost. Net realizable value is based on the estimated selling price in the ordinary course of business less any estimatedcosts to sell.

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G. Property, plant and equipment(1) 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 costs ofbringing the asset to its working condition and location for its intended use, the initial estimate of the costs of dismantling andremoving the item and restoring the site on which it is located.
(2) Depreciation
Assets other than land and construction in progress are depreciated using the straight-line method over the estimated useful
lives shown below:
Buildings and structures

3-30 years

Furniture, equipment, and vehicles

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.
H. Goodwill and intangible assets(1) 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 CGU based on the geographical region where business takes place
and the type of business conducted, and then tested for impairment each year or when there is an indication that it may be
impaired. Impairment losses on goodwill are recognized in the consolidated statement of profit or loss and cannot be
subsequently reversed in future periods.
(2) Intangible assets
Intangible assets are measured at cost, with any accumulated amortization and accumulated impairment losses deducted fromthe 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 abusiness 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 to 5 years)

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

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I. Leases
Year ended 31 August 2019
The determination of whether an arrangement is, or contains, a lease is made based on the substance of the arrangement on 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, at thepresent value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of thelease 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 consolidated 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 consolidated statement of profit or loss on astraight-line basis over the lease term.
Operating lease income as lessor is recognized as an operating revenue in the consolidated statement of profit or loss on astraight-line basis over the lease term.
Year ended 31 August 2020(i) As Lessee
Right-of-use assets are initially measured at cost at the commencement date of their lease. The cost includes the amount of theinitial measurement of the lease liability, any lease payments made at or before the commencement date, less any lease
incentives received, and any initial direct costs incurred.
After the initial measurement, right-of-use assets are depreciated over the lease term using the straight-line method. The leaseterm is determined as the non-cancellable period together with periods covered by an option to terminate the lease if the lessee
is reasonably certain not to exercise that option. The right-of-use assets are measured at cost less accumulated depreciation andany accumulated impairment losses.
Lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date.
The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that ratecannot be readily determined, the incremental borrowing rate is used.
The lease payments included in the measurement of the lease liability comprise the fixed payments and payments of penalties
for terminating the lease, if the lease term reflects the exercising an option to terminate the lease.
Subsequent to initial recognition, lease liabilities are measured at amortized cost using the effective interest method. Leaseliabilities are remeasured if there is a change in future lease payments resulting from a change in an index or a rate, or a change
in the assessment of possibility of exercising a termination option.
If a lease liability is remeasured, the amount of the remeasurement of the lease liability is recognized as an adjustment to theright-of-use asset.
(ii) As Lessor
For leases where the Group is the lender, each lease is classified as either a finance lease or an operating lease at the time thatthe lease is agreed.
In classifying each lease, the Group comprehensively evaluates whether or not the risks and economic value associated withownership of the underlying assets all transfer substantively. If they do transfer, the lease is classified as a finance lease;otherwise, it is classified as an operating lease.
Leases in which the Group acts as lender all correspond to subleases in which the Group acts as an intermediate lender. Headleases and subleases are accounted separately. In its consolidated financial statement, the Group includes lender finance leases
pertaining to relevant subleases in "other current financial assets and "non-current financial assets."- 97 -

J. 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, therecoverable amount for the asset is estimated. For goodwill, intangible assets with indefinite useful lives, and intangible assetsthat are not yet available for use, the recoverable amount is estimated each year at the same time.
The recoverable amount for an asset or CGU is the higher of value-in-use and fair value less costs of disposal. The fair valueless costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, forsimilar assets or observable market prices less incremental costs for disposing of the asset. In assessing value-in-use, theestimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the time value ofmoney 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.
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 of any
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 on assets
other than goodwill 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 that thecarrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.
K. Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of a past event, it is probablethat an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate canbe made of the amount of the obligation. Provisions are recognized as the best estimate of the expenditure required to settle thepresent obligation (future cash flows), taking into account the risks and uncertainties surrounding the obligation at eachreporting date.
If the time value of money is material, provisions are measured as the estimated future cash flows discounted to the present
value using a pre-tax rate that reflects, when appropriate, the time value of money and the risks specific to the liability. Whendiscounting is used, the increase due to the passage of time is recognized as a finance cost.
Provision is described below:
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 time fromacquisition to the end of the useful life, and discount rates ranging between 0.00-1.00% are generally used in calculations.

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L. Employee benefits(1) Defined contribution system
We have adopted a defined contribution pension plan for employees of the Company and certain subsidiaries.
The defined contribution pension plan is a post-retirement benefit plan in which the employer contributes a certain amount ofcontributions to other independent companies and is not subject to legal or presumptive obligation on payment beyond thosecontributions.
Contributions to the defined contribution pension plan are charged to expense during the period in which employees provide
services.
(2) Short-term employee benefits
For short-term employee benefits, no discount calculation is made and expenses are recorded when employees provide related
services.
For bonuses and paid leave expenses, we have legal or presumptive obligations to pay them and recognize as liabilities theamount estimated to be paid based on those plans if reliable estimates are possible.
(3) Share-based payments
The Group grants share-based payments in the form of share subscription rights (stock options) to employees of the Company
and its subsidiaries. In doing so, the Group aims to heighten morale and motivate employees to improve the Group’s businessperformance, thereby increasing shareholder value by reinforcing business development that is focused on the interests of theshareholders. These share-based payments do this by rewarding contributions to the Group’s profit and by connecting thebenefits 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 “29. Share-based Payments.”
The fair value of the stock options determined at the grant date is expensed, together with a corresponding increase in capitalsurplus in equity, over the vesting period on a straight-line basis, taking into consideration the Group’s best estimates of thenumber of stock options that will ultimately vest.

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M. Revenue recognition
The Group recognizes revenue in accordance with IFRS 15 Revenue from Contracts with Customers by applying the following
five-step approach:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
The Group, as a global clothing retailer, recognizes revenue when it satisfies its performance obligation by transferring thepromised goods to the customer. An asset is transferred when the customer obtains control of that asset. In addition, the Group
recognizes revenue at the amount of the promised consideration that the customer would pay in accordance with a contract, lessthe sum of discounts, rebates and refunds or credits.
N. Income taxes
Income taxes comprise current and deferred taxes and these are recognized in profit or loss, except taxes arising from items thatare 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 orloss for the current year, using the rates that have been enacted or substantively enacted by each reporting date in the countries
where the Group operates and generates 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 and liabilities for tax
purposes. Deferred tax assets and liabilities are not recognized for temporary differences under any of the following
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 notaffect 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 thetiming of the reversal of the differences and it is probable that the reversal will not occur in the foreseeable future.
The consolidated taxation system is applied for the Company and 100% owned subsidiaries in Japan.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the 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.
Deferred tax assets are recognized for unused tax losses, tax credits, and deductible temporary differences to the extent that it isprobable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at eachreporting date and reduced to the extent that it is no longer probable that the related tax benefits will be realized.

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O. 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. Newly applied standards and interpretation guidelines
The Group shall apply the written standards below, with effect from the current consolidated accounting year.
IFRS

Title

Summary

IFRS 16

LeasesAmendments to accounting treatment for lease arrangement

IFRIC 23

Uncertainty over Income Tax Treatments

Clarifies the accounting for uncertainties in income tax(1) Application of IFRS 16: Leases
The Group began applying IFRS 16 Leases (announced in January 2016; hereinafter “IFRS 16”), from the beginning of thecurrent fiscal year. In applying IFRS 16, the Group has adopted the cumulative catch-up approach that recognizes the
cumulative effect of initial application of the standard as at the date of initial application (1 September 2019) as a transition
method, without restating comparative information.
1) Definition of lease
The application of IFRS 16 requires that judgment made at the inception of a contract as to whether a contract is, or
contains, a lease. If a contract conveys the right to control the use of an identified asset for a period of time in exchange forconsideration, the contract is, or contains, a lease.
To determine whether or not a contract conveys the right to control the use of an identified asset, the Group examines
whether the contract includes the use of the specified asset, whether the Group has the right to obtain substantially all of theeconomic benefits from use of identified asset throughout the period of use, and whether the Group has the right to direct theuse of the identified asset.
2) Accounting treatment on transition
In applying IFRS 16, the Group applies the practical expedient in place of the judgments previously used to determine
whether or not a contract is a lease. Consequently, the requirements in IFRS 16 is applied only to contracts entered into orchanged on or after 1 September 2019.
2.1) Leases in which the Group is the lessee(Leases previously classified as operating leases under International Accounting Standards (“IAS”) 17 Leases (“IAS17”))
Lease liabilities on transition are measured at the present value of the remaining lease payments discounted using thelessee’s incremental borrowing rate as at 1 September 2019. In addition, right-of-use assets on transition are measured
using one of the following methods.
• Its carrying amount calculated on the assumption that IFRS 16 was applied from the commencement of the lease. Notethat the discount rate used is the lessee’s incremental borrowing rate on the date of initial application of IFRS 16.
• The amount measured for the lease liability, adjusted by the amount of any prepaid or accrued lease payments.
Note that the followings apply when IFRS 16 is applied to leases that were previously classified as operating leases
under IAS 17.
• A single discount rate is applied to a portfolio of leases with reasonably similar characteristics.
• Leases for which the lease term ends within 12 months of the date of initial application of IFRS 16 except for store
leases are accounted for in the same way as short-term leases.
• Initial direct costs are excluded from the measurement of right-of-use assets at the date of initial application of IFRS
16.
• The Group uses hindsight, such as in determining the lease term if the contract contains options to extend or terminate
the lease.
(Leases previously classified as finance leases under IAS 17)
The Group accounts for the carrying amount of the right-of-use asset and the lease liability at the date of initial
application at the amount of the lease asset and lease liability under IAS 17 immediately prior to the date of initial
application of IFRS 16.

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2.2) Leases in which the Group is the lessor
Leases in which the Group acts as lessor require no adjustment on transition to IFRS 16, except for subleases. Subleases
are accounted for in accordance with the transition provisions under IFRS 16 as stated below.
• In applying IFRS 16, the Group classifies sublease transactions as at the date of initial application as either operatingleases or finance leases. This classification is determined based on the remaining contractual terms and conditions of thehead lease and sublease at that date.
• Any subleases classified as operating leases under IAS 17 but finance leases under IFRS 16 are accounted for as new
finance leases entered into at the date of initial application.
3) Impact on consolidated financial statements
With the application of IFRS 16, the Group recognized right-of-use assets of 375,541 million yen, lease liabilities of 428,631
million yen and retained earnings as at the date of initial application are decreased by 35,094 million.
The weighted average of the lessee’s incremental borrowing rate applied to lease liabilities recognized in consolidated
statement of financial position as at the date of initial application of IFRS 16 is 0.9%.
The major factors for the difference between the commitment amount related to operating leases under IAS 17 disclosed inconsolidated statement of financial position as at 31 August 2019 and the lease liabilities recognized in consolidated
statement of financial position as at the date of initial application of IFRS 16 are as follows.
(Millions of yen)
Minimum future lease payments for non-cancelable operating lease contracts (31 August 2019)344,888

Present value of non-cancelable operating lease contracts (31 August 2019)

337,009

Finance lease obligations (31 August 2019)

38,726

Cancellable operating lease commitments, etc.

52,894

Lease liabilities recognized in consolidated statement of financial position as at the date of initial
application of IFRS 16

428,6314) COVID-19-Related Rent Concessions
In accordance with the amendment to IFRS 16 issued in May 2020, a rent concession arising as a direct result of the COVID-19
pandemic and which also meets all of the following conditions is not considered as a lease modification and accounted forvariable lease payments.
・The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, theconsideration for the lease immediately preceding the change・Any reduction in lease payments affects only payments originally due on or before 30 June 2021.
・There is no substantive change to other terms and conditions of the lease.
Any recognized gains from rent concessions, that are not accounted for as lease modification, did not have a significant
impact on the Group's consolidated financial statements.
(2) Application of IFRIC 23: Uncertainty over income tax treatments
IFRIC 23 Uncertainty over Income Tax Treatments (“IFRIC 23”) interpretations are additional to the requirement of IAS 12
Income Taxes and establish accounting procedures for uncertain tax positions, such as items with no clear tax treatment or
items related to matters that are not yet resolved with the tax authorities. If it is determined that the tax treatment used by theGroup is not likely to be approved by the tax authorities, the Group’s calculation of taxable income recognizes additional
taxable income in an amount equivalent to the impact of that uncertainty, using either the most likely amount or expectedvalue.
The application of IFRIC 23 does not have a significant impact on the Group’s consolidated financial statements.
5. Issued but not yet effective IFRS, not-yet-applied new standards and interpretation guidelines
New written standards and new interpretation to existing standards and guidelines that were either newly established or revisedby the date the consolidated financial statements were approved would not have a significant impact on the Group’s consolidated
financial statements.

- 102 -

6. Segment Information
A. Description of reportable segments
The Group’s reportable segments are components for which discrete financial information is available and 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 four reportable operating segments: UNIQLO Japan, UNIQLOInternational, GU and Global Brands, each of which is used to frame and form the Group’s strategy.
The main businesses covered by each reportable segment are as follows:
UNIQLO Japan:
UNIQLO International:

UNIQLO clothing business within Japan
UNIQLO clothing business outside of JapanGU:
Global Brands:

GU brand clothing business in Japan and overseas
Theory, PLST, COMPTOIR DES COTONNIERS, PRINCESSE TAM.TAM, and J Brand clothing
operations

B. Method of accounting for 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.
C. Segment information
Year ended 31 August 2019
(Millions of yen)
Reportable segments
Total

Consolidated
Adjustments
Statement of(Note2)
Profit or Loss

Others(Note1)UNIQLOJapan

UNIQLOInternational

GU

GlobalBrands

Revenue

872,957

1,026,032

238,741

149,9392,287,671

2,877

-

2,290,548

Operating profit/(loss)

102,474

138,904

28,164

3,685

273,228122(15,715)

257,636

101,393

139,624

27,9683,570

272,557

123(20,233)

252,447

Depreciation and amortization

10,357

19,861

5,432

2,525

38,177

11

10,287

48,476

Impairment losses (Note 3)

574

1,979

364

302

3,220

-

223

3,444

Segment income/(loss)(i.e., profit/(loss) before income
taxes)
Other disclosure:(Note 1) “Others” includes the real estate leasing business, etc.
(Note 2) “Adjustments” primarily includes revenue and corporate expenses which are not allocated to individual reportable segments.
(Note 3) Details on the Impairment losses are stated in note “15. Impairment losses”.

- 103 -

Year ended 31 August 2020
(Millions of yen)
Reportable segments
Others(Note1)

Total

Consolidated
Adjustments
Statement of(Note2)
Profit or Loss

UNIQLOJapan

UNIQLOInternational

GU

GlobalBrands

Revenue

806,887

843,937

246,091

109,633

2,006,550

2,295

-

2,008,846

Operating profit/(loss)

104,686

50,234

21,835(12,743)

164,013(81)(14,585)

149,347

104,648

50,417

21,581(13,226)

163,421(79)(10,473)

152,868

52,99770,524

21,574

10,473

155,569

11

22,267

177,848

2,413

15,847

1,305

3,523

23,09013(28)

23,074

Segment income/(loss)(i.e., profit/(loss) before income
taxes)
Other disclosure:
Depreciation and amortization (Note3)
Impairment losses (Note 4)(Note 1) “Others” includes the real estate leasing business, etc.
(Note 2) “Adjustments” primarily includes revenue and corporate expenses which are not allocated to individual reportable segments.
(Note 3) Depreciation and amortization recognized due to the application of IFRS 16 mentioned in " 4. Newly applied standards andinterpretation guidelines" are included in "Depreciation and amortization".
(Note 4) Details on the Impairment losses are stated in note “15. Impairment losses”.
D. Geographic Information
Year ended 31 August 2019(1) External revenue(Millions of yen)
Japan

PRC
1,152,661

Overseas (Others)
411,542

Total

726,3442,290,548(2) Non-current assets (excluding financial assets, investments in associates accounted for using the equity method and deferred
tax assets)(Millions of yen)Japan

United Statesof America

PRC
124,482

26,588Overseas (Others)

25,639Total

61,454

238,164

Year ended 31 August 2020
(1) External revenue(Millions of yen)
Japan

PRC
1,082,243

Overseas (Others)
380,998

Total

545,604

2,008,846(2) Non-current assets (excluding financial assets, investments in associates accounted for using the equity method and deferred
tax assets)(Millions of yen)Japan

United Statesof America

PRC
343,489

42,47382,468Overseas (Others)
149,945

Total
618,376(Note) The increase of non-current assets is mainly due to the application of IFRS 16 as mentioned in “4. Newly applied standards andinterpretation guidelines”.

- 104 -

7. Business Combination
Not applicable.
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 2019

As at
31 August 2020

Cash and bank balances

940,519

947,566

Money market funds (MMF), negotiable certificates of deposits

146,000

145,965

1,086,519

1,093,531

Total
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 2019

As at
31 August 2020

51,06455,195

4

-

9,863

10,919

-

1,499

(533)

(544)

60,39867,069Accounts receivable - trade
Notes receivable
Other accounts receivable
Lease receivable
Allowance for doubtful accounts
Total

See note “30. Financial Instruments” for credit risk management and the fair value of trade and other receivables.
The above classifications of financial assets are all financial assets measured at amortized cost.
The above Accounts receivable — trade and Notes receivable are mainly recognized as revenue at the time of delivery of theclothing because the customer is deemed to have gained control of the clothing and the performance of obligations to have been
fulfilled upon delivery. The Group receives payment within a short period of time after fulfilling the performance of obligations
based on separately specified payment conditions. Because the period from fulfillment of the performance obligations to receipt
of consideration is normally within one year, the receivables are not adjusted as material financial elements using the convention
method.

- 105 -

10. Inventories
The breakdown of inventories as at each year end is as follows:(Millions of yen)

Products
Materials and supplies
Total

As at
31 August 2019

As at
31 August 2020

404,621411,563

5,905

5,965

410,526

417,529(Note) As at 31 August 2020, the Group had inventories attributable to UNIQLO Japan, UNIQLO International and GU businesssegments amounting to 390,569 million yen, in aggregate.
No inventories were pledged as collateral to secure debt.
Write-down of inventories to net realizable value is as follows:(Millions of yen)

Write-down of inventories to net realizable value

Year ended
31 August 2019Year ended
31 August 2020

7,215

10,020(Note) As at 31 August 2020, the Group had write-down of inventories to net realizable value from UNIQLO Japan, UNIQLOInternational and GU business segments amounting to 7,389 million yen, in aggregate.

- 106 -

11. Other Financial Assets and Other Financial Liabilities
The breakdowns of other financial assets and other financial liabilities as at each year end are as follows:(Millions of yen)
As at
31 August 2019

As at
31 August 2020

Security deposits / guarantees

62,39863,639Bank deposits

41,08645,916

Others

16,706

7,584

(337)

(850)

1,645

1,370

121,499

117,660

Other current financial assets total

44,47349,890

Other non-current financial assets total

77,026

67,770

Other financial assets:
Financial assets measured at amortized cost

Allowance for doubtful accounts
Financial assets measured at fair value throughother comprehensive income
Stocks
Total(Millions of yen)
As at
31 August 2019

As at
31 August 2020

Interest-bearing bank and other borrowings (Note)

513,405

484,496

Deposits

144,099

98,156

1,450

1,428

658,955

584,082

Other current financial liabilities total

159,006

213,301

Other non-current financial liabilities total

499,948

370,780

Other financial liabilities:
Financial liabilities measured at amortized cost

Deposits / guarantees received
Total(Note) Interest-bearing bank and other borrowings include corporate bonds and loans payable. In addition, the amount of finance leaseobligations is included in interest-bearing bank and other borrowings for the previous fiscal year. For the current fiscal year, due to theapplication of IFRS 16 as mentioned in "4. Newly applied standards and interpretation guidelines", finance lease obligations whichwere included in Other financial liabilities are reclassified to Lease liabilities on the Consolidated statement of financial position.

- 107 -

The issues and fair values of financial assets measured at fair value through other comprehensive income are as follows:(Millions of yen)
As at
31 August 2019

As at
31 August 2020

Crystal International Group Ltd.

884

591

Matsuoka Corporation

587

566

Issue(s)Stocks are principally held to strengthen medium-term relationships with strategic partners, and are therefore designated as
financial assets at fair value through other comprehensive income.
The Group sells off (derecognizes) equity instruments measured at fair value through other comprehensive income based on theefficient utilization of assets and reviews of business relationships. In the current consolidated fiscal year, the Group did not sell
off any equity instruments measured at fair value through other comprehensive income.
Dividend income recognized in financial assets measured at fair value through other comprehensive income is as follows.
(Millions of yen)
As at
31 August 2019

As at
31 August 2020

Derecognized financial assets--

Financial assets held at the end of the fiscal year

2350

12. Other Assets and Other Liabilities
The breakdowns of other assets and other liabilities as at each year end are as follows:(Millions of yen)
As at
31 August 2019

As at
31 August 2020

Prepayments

16,036

8,246

Long-term prepayments

7,149

2,662

Others

4,650

7,104

27,83618,013Current

19,975

10,629Non-current

7,861

7,383

Other assets:

Total(Millions of yen)
As at
31 August 2019

As at
31 August 2020

Accruals

61,48657,338

Employee benefits accruals

7,170

8,146

Others30,72819,676

99,38585,160Current

82,103

82,636

Non-current

17,281

2,524

Other liabilities:

Total- 108 -

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

Buildings
and structures

Furniture,equipment,
and vehicles

At 1 September 2018

252,606

51,765Additions

5,935

Disposals

Construction inprogress

Leased assets(Note 1)

1,962

9,550

49,973365,858

1,364-

40,134

12,50259,937(7,319)(1,679)-(425)(7,226)(16,650)

Transfers

25,645

9,833-(37,090)

1,611-

Effect of change inexchange rate

(10,962)(3,782)-(1,764)548(15,960)

At 31 August 2019265,905

57,501

1,962

10,40457,409393,184

-

-

-

-

(57,409)(57,409)265,905

57,501

1,962

10,404-

335,774

Additions

1,886

314

-

43,784-45,986

Disposals(10,896)(2,994)

-

(160)

-

(14,051)

Transfers

33,5397,554-(41,094)--

Effect of change inexchange rate

2,927

465

-

286

-

3,678

At 31 August 2020

293,362

62,842

1,962

13.220-371,388

Effect of change inaccounting policy
At 1 September 2019
(After adjustment)Land- 109 -Total

(Millions of yen)
Buildings andstructures

Furniture,equipment, andvehiclesAt 1 September 2018

(157,933)(37,622)

Depreciation provided
during the year

(23,919)

Impairment losses

Accumulated depreciationand impairment

Construction inprogress

Leased assets(Note 1)

(34)-

(15,191)(210,781)(6,444)--(8,416)(38,781)(2,375)

(271)

-

-

(501)

(3,148)

Disposals

6,207

1,551

-

-

5,760

13,519Effect of change inexchange rate

6,774

2,361

-

-

(1,036)

8,099

At 31 August 2019

(171,246)(40,425)(34)-(19,385)(231,092)

Effect of change inaccounting policy

-

-

-

-

19,385

19,385(171,246)(40,425)

(34)

-

-

(211,706)

Depreciation provided
during the year

(22,972)(7,392)---(30,365)

Impairment losses(3,715)

(655)

-

-

-

(4,370)

Disposals

9,938

2,735

-

-

-

12,674

Effect of change inexchange rate

(1,165)

(331)

-

-

-

(1,496)

At 31 August 2020

(189,161)(46,069)

(34)

-

-

(235,265)

At 1 September 2019
(After adjustment)Land- 110 -Total

(Millions of yen)
Buildings andstructures

Furniture,equipment, andvehicles

At 31 August 201994,65917,076

At 31 August 2020

104,201

16,773

Net carrying amount

Construction inprogress

Leased assets(Note 1)

1,927

10,40438,024

162,092

1,927

13,220-136,123

Land

Total

(Note 1) Leased assets are transferred to right-of-use assets due to the application of IFRS 16 as mentioned in "4. Newly applied
standards and interpretation guidelines". Please refer to “17. Leases” for details of right-of-use assets.
(Note 2) The Group had store assets attributable to UNIQLO Japan, UNIQLO International and GU business segments.
Net carrying amounts of finance-leased assets are as follows:(Millions of yen)
Net carrying amountAt 31 August 2019

Buildings andstructures

Furniture, equipment,
and vehicles

6,705

30,916

Others

Total
403

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

- 111 -

38,024

14. Goodwill and Intangible Assets
A. 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

GoodwillandIntangible
assets total

SoftwareTrademarks

Otherintangible
assets(Note)

39,74070,741

21,54922,174

114,465

154,206

External purchases-

24,4010

1,301

25,70325,703

Disposals

-

(148)

-

(151)

(299)

(299)

(985)

(416)

(862)

(1,373)(2,652)(3,638)At 31 August 2019

38,754

94,57820,686

21,950137,215

175,970

External purchases-

21,34933

1,693

23,076

23,076

Disposals

-

(626)

-

(118)

(744)

(744)

Effect of change in exchange rate

(231)

123

(202)

(412)

(491)

(723)

At 31 August 2020

38,522

115,426

20,517

23,112

159,056

197,578

Acquisition costs

At 1 September 2018

Effect of change in exchange rate

Goodwill

Total(Millions of yen)
Intangible assets other than goodwill
Accumulated amortizationand impairment

GoodwillandIntangible
assets total

SoftwareTrademarks

Otherintangible
assets(Note)(31,647)(39,052)(13,653)(15,757)(68,463)(100,111)

Amortization provided during the year-

(9,483)-(212)(9,695)(9,695)

Impairment losses

-

(239)

-

(55)

(295)

(295)

Disposals

-

15

-

117

132

132

985

109

540

572

1,222

2,208

(30,661)(48,649)(13,113)(15,335)(77,097)(107,759)

Amortization provided during the year-

(13,976)-(49)(14,025)(14,025)

Impairment losses-(0)(1,312)(333)(1,646)(1,646)

Disposals

-

306

-

49

355

355

231

70

110

10

191

423

(30,429)(62,249)(14,315)(15,658)(92,222)(122,652)

At 1 September 2018

Effect of change in exchange rate
At 31 August 2019

Effect of change in exchange rate
At 31 August 2020

Goodwill

Total(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

GoodwillandIntangible
assets total

At 31 August 2019

8,092

45,928

7,573

6,615

60,117

68,210At 31 August 2020

8,092

53,176

6,202

7,454

66,83374,925- 112 -

B. Goodwill and intangible assets with indefinite useful lives
Goodwill and intangible assets recorded in the consolidated statement of financial position are primarily for goodwill andtrademarks related to the Theory business.
Trademarks and certain other intangible assets will continue to be used as long as the business remains viable; therefore,
management estimated the useful lives as indefinite.
The carrying amount of the goodwill and intangible assets with indefinite useful lives by CGU is as follows:(Millions of yen)
Intangible assets with indefinite
useful lives

Goodwill
Net carrying amount

UNIQLOJapan

UNIQLOInternational

GlobalBrandsAt 31 August 2019

-

-

-

At 31 August 2020

-

-

-

GU

- 113 -UNIQLOJapan

UNIQLOInternational

GlobalBrands

8,092

-

-

-

12,854

8,092

-

-

-

11,985GU

15. Impairment Losses
During the year ended 31 August 2020, the Group recognized impairment losses on certain store assets etc., due to reductions in
profitability of the respective CGU.
The breakdown of impairment losses by asset type is as follows:(Millions of yen)
Year ended
31 August 2019Year ended
31 August 2020

Buildings and structures

2,375

3,715

Furniture and equipment

271

655

Leased assets (Note 1,2)

501

-

3,148

4,370

239

0

Trademark (Note 3)

-

1,312

Other intangible assets

55

333

295

1,646

Right-of-use assets-

17,041Other non-current assets (long-term prepayments)

0

15

3,444

23,074

Subtotal impairment losses on property, plant and equipment
SoftwareSubtotal impairment losses on intangible assets

Total impairment losses(Note 1) Leased assets include furniture and equipment.

(Note 2) Leased assets are transferred to right-of-use assets due to the application of IFRS 16 as mentioned in "4. Newly applied
standards and interpretation guidelines".
(Note 3) Impairment losses on trademark of Helmut Lang brand that is included in Theory business and J Brand are recognized by 612
million yen and 700 million yen, respectively.
The Group’s impairment losses during the year ended 31 August 2020 amounted to 23,074 million yen, compared with 3,444
million yen during the year ended 31 August 2019, and are included in “other expenses” on the consolidated statement of profit
or loss.
Year ended 31 August 2019
Property, plant and equipment
Out of total impairment losses amounting to 3,444 million yen, 3,148 million yen represented write downs of the carrying
amounts of store assets to the recoverable amounts, primarily due to a reduction in profitability of certain stores, including
flagship stores.
The grouping of assets is based on the smallest CGU that independently generates cash inflow. In principle, each store,
including flagship stores, is considered as an individual CGU and recoverable amounts thereon are calculated based on value
in use.
The value in use is calculated based on the cash flow projections with estimates and growth rates compiled by management at
a discount rate of 15.9%. Theoretically, the projected cash flows cover a five-year period, and do not use a growth rate thatexceeds the long-term average market growth rate. The pre-tax discount rate calculation is based on the weighted-average costof capital.

- 114 -

The main CGUs for which impairment losses were recorded are as follows:
Operating segment

CGU

Type

UNIQLO Japan

UNIQLO CO., LTD. stores

Buildings and structures

UNIQLO International

UNIQLO EUROPE LTD., etc., stores

Buildings and structures

GU

G.U. CO., LTD., etc., stores

Buildings and structures

Global Brands

COMPTOIR DES COTONNIERS S.A.S., etc., stores

Buildings and structures

Year ended 31 August 2020
Property, plant and equipment and Right-of-use assets
Impairment losses amounting to 23,074 million yen, 21,411 million yen represented write downs of the carrying amounts ofstore assets to the recoverable amounts, primarily due to a reduction in profitability of certain stores, including flagship stores.
With the global spread of COVID-19, the Group's performance has been adversely affected due to temporarily closing stores,
etc. We measured impairment losses on the assumption that the impact of COVID-19 pandemic will continue to be felt
through to the end of August 2021.
The grouping of assets is based on the smallest CGU that independently generates cash inflow. In principle, each store,
including flagship stores, is considered as an individual CGU and recoverable amounts thereon are calculated based on value
in use.
The value in use is calculated based on the cash flow projections with estimates and growth rates compiled by management at
a discount rate of 7.1%. Theoretically, the projected cash flows cover a five-year period, and do not use a growth rate thatexceeds the long-term average market growth rate. The pre-tax discount rate calculation is based on the weighted-average costof capital.
The main CGUs for which impairment losses were recorded are as follows:
Operating segment

CGU

Type

UNIQLO Japan

UNIQLO CO., LTD. stores

Buildings, structures and right-of-use assets

UNIQLO International

UNIQLO USA, FRL Korea Co., Ltd. etc.,
storesBuildings, structures and right-of-use assets

GU

G.U. CO., LTD., FRL Korea Co., Ltd. etc.,
storesBuildings, structures and right-of-use assets

Global Brands

Theory LLC.,COMPTOIR DES
COTONNIERS S.A.S., etc., stores

Buildings, structures and right-of-use assets(Note) The total of tangible assets and right-of-use assets associated with domestic UNIQLO stores, overseas UNIQLO stores, and GU
stores for the fiscal year ended August 2020 are 120,354 million yen, 196,793 million yen, and 39,752 million yen, respectively.

- 115 -

16. Investments in Associates Accounted for Using the Equity Method
A. Information on associates accounted for using the equity method
Information on associates accounted for using the equity method is as follows:(Millions of yen)
Year ended
31 August 2019Year ended
31 August 2020

Share of profit and loss of associates accounted for using the equity method

562

321

Share of other comprehensive income of investments in associates accounted forusing the equity method

(11)

(39)

Share of comprehensive income of investments in associates accounted for using theequity method

551

281

14,587

14,221

Carrying amount of investments in associates

B. Determination regarding significant influence and financial information on important associates
In June 2016, the Company invested in a domestic real estate investment trust aiming to own a distribution facility. The
Company has significant influence over the financial and operating policy.
The Company’s maximum exposure to losses due to its investments in the associates is limited to the amount of the investments
by the Company and is included in the consolidated statement of financial position as “Investments in associates,” whichamounted to 13,138 million yen. The Group’s share of profit and comprehensive income of the associates was 486 million yen
and was included in the consolidated statement of profit or loss and consolidated statement of comprehensive income,respectively.
Total assets of the associates amounted to 69,872 million yen, which mainly comprised non-current assets such as warehouse,
etc. The Company invested in the associates at the time of incorporation and no goodwill is recognized.
The Company received dividends amounting to 619 million yen from the associates during the year ended 31 August 2020.
The Group has entered into lease contracts with one of the associates relating to warehouse rental, etc.

- 116 -

17. Leases
Year ended 31 August 2019
(1) Finance Lease Obligations
The breakdown of finance lease obligations is as follows:(Millions of yen)
Year ended 31 August 2019
Future minimum
lease payments

Present value of
future minimum lease payments

Finance lease obligations
Due within one year

9,824

9,411

Due after one year through five years

25,394

24,698Due after five years

4,847

4,615

40,06638,726

Deductions - future finance costs(1,340)-Total net finance lease payables

38,72638,726

Current portion

-

9,411

Non-current portion-

29,314Total

The Group has no sublease contracts, accrued variable lease payments or escalation clauses (clauses enabling upward revision ofrental charges), and no limitations imposed by lease contracts (limitations regarding dividends, additional borrowing, oradditional leases, etc.).
(2) Operating Lease Commitments
A. 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 2019
Due within one year

83,877

Due after one year through five years

155,022

Due after five years

105,988
Total

344,888

The total minimum lease payments and variable lease payments for operating lease contracts recognized as expenses during theyear are as follows:(Millions of yen)
Year ended
31 August 2019
Total minimum lease payments

119,059

Variable lease payments

78,780
Total

197,840

Variable lease payments, renewal options, and escalation clauses (clauses enabling upward revision of rental charges) are
included in the operating lease agreements.

- 117 -

There are no limitations imposed by lease contracts (limitations regarding dividends, additional borrowing, or additional leases,etc.).
B. 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 2019
Due within one year162

Due after one year through five years739

Due after five years

395
Total

1,298

The total of variable lease payments recorded as revenue during each reporting period is as follows:(Millions of yen)
Year ended
31 August 2019
Variable lease payments

1,042Year ended 31 August 2020
(1) Lessee
As a lessee, the Group mainly leases real estate for store use (land, buildings and structures).
A. Lease liabilities(Millions of yen)
Year ended 31 August 2020
Present value of remaining lease

Remaining lease payments

payments

Lease liabilities
Due within one year

115,222

114,652

Due after one year through two years

85,37083,993Due after two years through three years

60,865

59,130Due after three years through four years

49,84647,954Due after four years through five years

38,52336,724Due after five years

130,932

123,722480,761

466,179

Total
Interest expenses on lease liabilities(Millions of yen)
Year ended 31 August 2020
Interest expenses on lease liabilities

4,763- 118 -Cash outflow for leases
Cash outflow for leases in the current fiscal year is as follows:(Millions of yen)
Year ended 31 August 2020
Total Cash outflow for leases

200,483- 119 -

B. Right-of-use assets
A breakdown of right-of-use assets as at 31 August 2020 is as follows:(Millions of yen)
Furniture, equipment, andReal estates
At 1 September 2019

vehiclesTotal

330,860

44,681

375,541

contracts, reassessment oflease liabilities, etc.

164,901

13,049177,950

Depreciation(120,862)(12,594)(133,457)

Impairment losses(16,766)(274)(17,041)

Expiration, cancellation, etc.

(2,034)(1,084)(3,118)

442

(372)

69

356,539

43,404399,944

Additions due to new lease

OthersAt 31 August 2020

(Note) The total amount of right-of-use assets of the Company, UNIQLO Japan and GU Japan is 226,257 million yen in terms ofreal estate as at 31 August 2020. The corresponding lease liabilities are 244,290 million yen.
C. Expenses relating to Leases
A breakdown of expenses relating to Leases for the fiscal year ended 31 August 2020 is as follows:(Millions of yen)
Year ended 31 August 2020
Expenses relating to variable lease payments not included in themeasurement of lease liability

49,418

Expenses relating to short-term leases (excluding expenses
relating to leases with lease term of no more than one month)

3,261

Expenses relating to leases of low value assets (excluding
expenses relating to short-term leases)

33(Note) Variable lease payments that mainly relating to store opening contracts depend on sales amounts.
D. Others
The future cash outflows to which the lessee is potentially exposed that are not yet commenced to which the lessee is committed is
11,071 million yen.
The Group's leased properties are granted a termination option for the purposes of flexible decision-making regarding store
closures. This is mainly in relation to store lease agreements, most of which have the option of early termination provided thatwritten notice is given to the other party six months in advance. In light of the possibility for the termination option to be exercised,
the lease term is determined by setting a non-cancellable lease term as a minimum and taking a target period for return on
investment for each segment into consideration. We continually review this assessment, should any event arise that would impact
this assessment, as well as any occurrence or situation that would cause significant changes.
(2) Lessor
The Group subleases some real estate as part of promoting its store-opening strategy. The Group receives security deposits fromlessee to collateralize risks such as non-restitution of defaults on lease payments liabilities and non-implementation of asset
retirement obligation.
A. Finance leases
The Group acts as a lessor under a finance lease, primarily for the subletting of road-side stores.
(i)Analysis of changes of lease receivables
An analysis of changes in lease receivables in relation to finance leases is as follows;- 120 -

(Millions of yen)
Year ended 31 August 2020
At 31 August 2019

4,824

Increases due to finance lease contracts

1,943

Decreases due to repayments(2,294)

Others15

At 31 August 2020

4,474(ii) Maturity analysis of the lease payments receivables to be reconciled to the net investment in the lease
A maturity analysis of lease payments in relation to finance leases is as follows;(Millions of yen)
Year ended 31 August 2020
Undiscounted lease payments to be received
Due within one year

1,499

Due after one year through two years

1,034

Due after two years through three years792

Due after three years through four years502

Due after four years through five years

370

Due after five years

345
Total

4,545

Unearned finance income71

Net investment in the lease

4,474(iii) Amount pertaining to lease receivables recognized in the Consolidated statement of profit or loss
(Millions of yen)
Year ended 31 August 2020
Finance income from net investment in the lease37

B. Operating leases
The Group subleases property to its tenants under operating leases for each commercial establishment it operates.
(i) Lease income
A breakdown of income on operating leases is as follows;(Millions of yen)
Year ended 31 August 2020
Income on variable lease payments

120

Income on fixed lease payments

1,030- 121 -

(ii) Maturity analysis of lease payments to be received
A maturity analysis of lease payments to be received in relation to operating leases is as follows;(Millions of yen)
Year ended 31 August 2020
Undiscounted lease payments to be received
Due within one year

1,009

Due after one year through two years

1,008

Due after two years through three years533

Due after three years through four years

205

Due after four years through five years

205

Due after five years

530
Total

3,492

- 122 -

18. Deferred Taxes and Income Taxes
A. Deferred taxes
The main factors in the increase / (decrease) of deferred tax assets and deferred tax liabilities are as follows:(Millions of yen)
Recognized
Recognizedin otherin profit or loss
comprehensive(Note)
incomeAs at
1 September
2018

Recognizeddirectly inequityAs at
31 August 2019

Temporary differences
Accrued business tax

1,942

(122)

-

-

1,819

Accrued for bonuses

4,247

395

-

-

4,642

130

41

-

-

172

4,165

(301)

-

-

3,864

(91)

-

277

-

186

Depreciation

8,120

(717)

-

Net gains / (losses)
on revaluation of cash flow hedges(7,849)-(1,877)

7,837(1,889)Temporary differences on shares ofsubsidiaries(1,893)---(1,893)

Accelerated depreciation(4,206)125--(4,081)Others

5,143

4,918

-

-

10,061

Subtotal

9,708

4,338

(1,600)

7,837

20,283Tax losses carried forward

3,666

390

-

Net deferred tax assets / (liabilities)

13,374

4,728(1,600)Allowance for doubtful accounts
Impairment losses on non-current assets
Unrealized gains / (losses)
on available-for-sale securities

7,402

4,056
7,837

24,340(Note) The difference between the total amount recognized in profit or loss and the amount of deferred tax is due to effect of change inexchange rate.

- 123 -

As at31 August
2019(Millions of yen)
Recognized
Recognized
Effect of
As at
in other
Recognized
As at
in profit or
adoption of 1 September
comprehensi directly in 31 August
loss
IFRS 162019ve
equity2020(Note)
incomeTemporary differences
Accrued business tax

1,819

Accrued for bonuses

4,642

Allowance for doubtful
accounts

172

Impairment losses on noncurrent assets

3,864

Unrealized gains / (losses)
on available-for-sale

186

-

1,819

(334)

-

-

1,484

-

4,642

(659)

-

-

3,982

-

172

(166)

-

-

5

3,864

(1,944)

-

-

1,919

186

-

(355)

-

(169)

7,402

238

-

-

7,640

-

-

securities
Depreciation

7,402

-

Net gains / (losses)
on revaluation of cash flow

(1,889)-(1,889)-(6,899)3,383(5,405)

shares of
subsidiaries(1,893)-(1,893)---(1,893)

Accelerated depreciation(4,081)-(4,081)

4,081

-

-

-

-

13,98813,988(3,117)--

10,870

Others

10,061-

10,061

4,140

-

-

14,202

Subtotal

20,283

13,98834,272

2,236(7,255)

3,383

32,636

Tax losses carried forward

4,056

-

4,056

993

-

-

5,049

24,34013,98838,3293,229(7,255)

3,383

37,686

hedgesTemporary differences on

Right-of-use assets / Leaseliabilities

Net deferred tax assets /(liabilities)

Tax effects of unrecognized tax losses carried forward and deductible temporary differences for which deferred tax assets were
not recognized is as follows:(Millions of yen)
As at
31 August 2019

As at
31 August 2020

Unrecognized tax losses carried forward

17,48632,071

Deductible temporary differences

12,236

11,57429,72343,646

Total- 124 -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 2019

As at
31 August 2020

First year

149

340

Second year

251

239

Third year

139

608

Fourth year

333

333

16,61230,54917,48632,071Fifth year and thereafter
Total

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 2019 and 31 August 2020 were 392,264 million yen and
427,747 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 thereversal of the temporary differences and it is probable that such differences will not be reversed in the foreseeable future.
B. Income taxes(Millions of yen)
Year ended
31 August 2019Year ended
31 August 2020

Current tax

80,666

68,263

Deferred tax(6,265)(5,793)74,40062,470Total

Reconciliations between the statutory income tax rates and the effective tax rates are as follows. The effective tax rate shown isthe corporate income tax rate applied to the Group’s profit before income taxes.
(Millions of yen)
Year ended
31 August 2019Year ended
31 August 2020

Statutory income tax rate

30.6%

30.6%

Unrecognized deferred tax assets

1.2%

9.1%

Difference in statutory income tax rates of subsidiaries(4.5)%(2.5)%

Undistributed earnings of foreign subsidiaries(0.2)%

0.9%

Foreign withholding tax

1.9%

3.8%

Inhabitant tax on per capita basis

0.1%

0.2%

Others0.4%(1.2)%

Effective tax rate

29.5%

40.9%

- 125 -

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 2019

As at
31 August 2020

Trade payables

127,194

150,749

Notes payables

18

12

Other payables

64,55659,984

191,769

210,747

Total
20. Provisions
The breakdown of provisions as at each year end is as follows:(Millions of yen)
As at
31 August 2019

As at
31 August 2020

33,81433,41033,81433,410Current liabilities

13,340752

Non-current liabilities

20,47432,658Asset retirement obligations
Total

The primarily factors for the increase / (decrease) in provision are as follows:(Millions of yen)
Asset retirement obligations
Balances as at 31 August 201933,814

Additional provisions

2,721

Amounts utilized(1,982)

Increase in discounted amounts arising from passage of time

153

Others(1,296)

Balances as at 31 August 2020

33,410Please refer to “3. Significant Accounting Policies (11) Provisions” for an explanation of respective provisions.

- 126 -

21. Equity and Other Equity Items
A. Share Capital
Number of
Number of
Number of
authorized sharesissued shares
outstanding shares
Capital 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)

Capital surplus(Millions of yen)

Balances as at 1 September
2018

300,000,000

106,073,656

102,019,784

10,273

18,275

Increase / (decrease) (Note)--

41,951-

2,328

300,000,000

106,073,656

102,061,735

10,273

20,603--38,808-2,761

300,000,000

106,073,656

102,100,543

10,27323,365

Balances as at 31 August 2019
Increase / (decrease) (Note)
Balances as at 31 August 2020

(Note) The primarily factor for the increase / (decrease) in the number of shares in circulation was the increase / (decrease) in thenumber of treasury stock as indicated below.
B. Treasury Stock and Capital Surplus(1) Treasury Stock
Number of shares(Shares)Amount(Millions of yen)

4,053,872

15,42940

2(41,991)(159)

4,011,921

15,27183

5(38,891)(148)

3,973,113

15,129Balances as at 1 September 2018
Acquisition of treasury stock less than one unit
Exercise of stock options
Balances as at 31 August 2019
Acquisition of treasury stock less than one unit
Exercise of stock options
Balances as at 31 August 2020
(2) Capital surplus(Millions of yen)
Capital reserve

Gain / (loss) on
disposalof treasury stock

Stock options

4,578

4,924

5,211

3,559

18,275

Disposal of treasury stock

-

1,558

-

-

1,558

Share-based payments

-

-

769

-

769

4,578

6,483

5,981

3,559

20,603

Disposal of treasury stock

-

1,496

-

-

1,496

Share-based payments

-

-

1,265

-

1,265

4,578

7,980

7,246

3,559

23,365

Balances as at 1 September
2018

Balances as at 31 August 2019

Balances as at 31 August 2020

OthersPlease refer to “29. Share-based Payments” for details of share-based payments (stock options).

- 127 -Total

C. 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 2019Year ended
31 August 2020

Exchange differences on translation of foreign operations(4,289)(212)

Cash flow hedges

2,970

(877)

Other comprehensive income(1,318)(1,089)

D. 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 2019
Amount of dividends(Millions of yen)

Dividends per share(Yen)

Board of Directors’ meeting held on 2 November 2018

24,484

240

Board of Directors’ meeting held on 11 April 201924,492240

Amount of dividends(Millions of yen)

Dividends per share(Yen)

Board of Directors’ meeting held on 5 November 201924,494

240

Board of Directors’ meeting held on 9 April 2020

24,499240

Amount of dividends(Millions of yen)

Dividends per share(Yen)

24,504240

Resolutions

Year ended 31 August 2020
Resolutions

Dividend which effective date is after fiscal 2020 is as follow:
Resolutions
Board of Directors’ meeting held on 4 November 2020

Regarding the proposed dividends per common stock, the Board has approved the proposal subsequent to the year-end date, andthis sum is not recognized as a liability at year end.

- 128 -

22. Revenue
A. The breakdown of revenue for each year is as follows:
The Group performs global retail clothing operations through both physical stores and e-commerce channels. The following is abreakdown of total revenue by major regional market operation.
Year ended 31 August 2019
Revenue(Millions of yen)

Percent of Total
(%)

Japan

872,957

38.1

Greater China

502,565

21.9

Other parts of Asia & Oceania

306,510

13.4

North America & Europe

216,956

9.5

1,898,990

82.9

GU (Note 2)

238,741

10.4

Global Brands (Note 3)

149,939

6.5

2,877

0.1

2,290,548

100.0

UNIQLO (Note 1)

Others (Note 4)
Total(Note 1) Revenue is classified by nation or region based on customer location.
The designated countries and regions are classified as follows:
Greater China:
Mainland China, Hong Kong, Taiwan
Other parts of Asia & Oceania:

South Korea, Singapore, Malaysia, Thailand, the Philippines, Indonesia,
Australia

North America & Europe:

United States of America, Canada, United Kingdom, France, Russia,
Germany, Belgium, Spain, Sweden, the Netherlands, Denmark(Note 2) Main national and regional market: Japan(Note 3) Main national and regional markets: North America, Europe, Japan(Note 4) The “Others” category includes real estate leasing operations.
Year ended 31 August 2020
Revenue(Millions of yen)

Percent of Total
(%)

Japan

806,887

40.2

Greater China

455,986

22.7

Other parts of Asia & Oceania

204,537

10.2

North America & Europe

183,4129.1

1,650,825

82.2

GU (Note 2)

246,091

12.3

Global Brands (Note 3)

109,633

5.5

2,295

0.1

2,008,846

100.0

UNIQLO (Note 1)

Others (Note 4)
Total(Note 1) Revenue is classified by nation or region based on customer location.
The designated countries and regions are classified as follows:
Greater China:
Other parts of Asia & Oceania:

Mainland China, Hong Kong, Taiwan
South Korea, Singapore, Malaysia, Thailand, the Philippines, Indonesia,

North America & Europe:

Australia, Vietnam, India
United States of America, Canada, United Kingdom, France, Russia,- 129 -

Germany, Belgium, Spain, Sweden, the Netherlands, Denmark, Italy(Note 2) Main national and regional market: Japan(Note 3) Main national and regional markets: North America, Europe, Japan(Note 4) The “Others” category includes real estate leasing operations.
B. Liabilities arising from contracts with customers are as stated below.
(Millions of yen)
End of current
consolidated
fiscal year
(31 August 2019)

End of current
consolidated
fiscal year
(31 August 2020)

598

1,391

1,026

1,445

Contractual liabilities
Advances received from customers
Refund liabilities

Consideration for anticipated refunds to customers is reasonably estimated and recognized as a refund liability.
In the consolidated statement of financial position, liabilities pertaining to advances received and refunds from customers areincluded in “Other current liabilities.”
C. Transaction prices allocated to existing performance obligations
In the Group, there are no significant transactions for which the individual forecast contract period exceeds one year.
Therefore, the practical short-cut method is used, and information related to remaining performance obligations is omitted.
Furthermore, in the consideration arising from contracts with customers, there are no significant monetary amounts that are notincluded in the transaction price.
D. Assets recognized from costs for acquiring or performing contracts with customers
In the Group, there are no assets recognized from costs for acquiring or performing contracts with customers.

- 130 -

23. Selling, General and Administrative Expenses
The breakdown of selling, general and administrative expenses for each year is as follows:(Millions of yen)
Year ended
31 August 2019Year ended
31 August 2020

Advertising and promotion

74,43668,307

Lease expenses

197,840

53,617

Depreciation and amortization

48,476

177,848

Outsourcing

46,197

49,686

Salaries

301,456

277,556

Distribution

93,702

94,018Others

92,28484,787854,394805,821

Selling, general and administrative expenses

Total(Note)The decrease of Lease expenses and the increase of Depreciation and amortization are mainly due to the application of IFRS 16
as mentioned in “4. Newly applied standards and interpretation guidelines”.
24. Other Income and Other Expenses
The breakdowns of other income and other expenses for each year are as follows:(Millions of yen)
Year ended
31 August 2019Year ended
31 August 2020

Other income
Foreign exchange gains (note)
Others
Total

-

1,576

4,533

6,378

4,533

7,954
(Millions of yen)

Year ended
31 August 2019Year ended
31 August 2020

Other expenses
Foreign exchange losses (note)

6,020

-

650

1,125

Impairment losses

3,444

23,074

Others

2,510

4,752

12,62628,952Losses on retirement of property, plant and equipment

Total(Note) Currency adjustments incurred in the course of operating transactions are included in “other income” or “other expenses”.

- 131 -

25. Finance Income and Finance Costs
The breakdowns of finance income and finance costs for each year are as follows:(Millions of yen)
Year ended
31 August 2019Year ended
31 August 2020

Finance income
Foreign exchange gains (note)
Interest income
Others
Total

-

1,576

12,202

9,673

90

50

12,293

11,228(Millions of yen)

Year ended
31 August 2019Year ended
31 August 2020

Finance costs
Foreign exchange losses (note)

13,107-

Interest expenses

4,369

7,706

4

1

17,481

7,707

Others
Total(Note) Currency adjustments incurred in the course of non-operating transactions are included in “finance costs.”- 132 -

26. Other Comprehensive Income
The breakdown of amounts recorded during the year, reclassification adjustments, and income tax effect generated by individualcomprehensive income items included in “other comprehensive income” for each year are as follows:Year ended 31 August 2019
(Millions of yen)Amount recorded
during the year

Reclassification
adjustment

Amount before
income taxes

Income taxes

Amount after
income taxes(1,012)-(1,012)

277

(734)

(1,012)-(1,012)

277

(734)

(33,649)-(33,649)-(33,649)

15,146-15,146(3,748)

11,398

(11)

-

(11)

-

(11)

(18,513)-(18,513)(3,748)(22,262)(19,525)-(19,525)(3,471)(22,997)

Items that will not bereclassified subsequently to
profit or loss
Financial assets measured
at fair value throughother comprehensive
income / (loss)
Total
Net gain / (loss) on revaluationof available-for-saleinvestments
Exchange differences ontranslation of foreign
operations
Cash flow hedges
Share of other comprehensive
income of associates
Total
Total comprehensive income
for the year
Year ended 31 August 2020
(Millions of yen)Amount recorded
during the year

Reclassification
adjustment

Amount before
income taxes

Income taxes

Amount after
income taxes

(275)

-

(275)

(355)

(630)

(275)

-

(275)

(355)

(630)

5,227

-

5,227

-

5,227

26,185(5,155)21,029(6,899)14,130Share of other comprehensive
income of associates

(39)

-

(39)

-

(39)

Total

31,373(5,155)

26,217(6,899)19,318Items that will not bereclassified subsequently to
profit or loss
Financial assets measured
at fair value throughother comprehensive
income / (loss)
Total
Net gain / (loss) on revaluationof available-for-saleinvestments
Exchange differences ontranslation of foreign
operations
Cash flow hedges- 133 -

Total comprehensive income
for the year

Amount recorded
during the year

Reclassification
adjustment

Amount before
income taxes

Income taxes

Amount after
income taxes

31,098(5,155)25,942(7,255)

18,687(Note) The cash flow hedge reclassification adjustment of (5,155) million yen is the amount transferred to net gains and losses after
hedge accounting was suspended, as a forecast transaction eligible for hedge accounting was no longer expected to occur.
There is no transfer amount for the previous consolidated fiscal year.

- 134 -

27. Earnings per ShareYear ended 31 August 2019Year ended 31 August 2020

Equity per share attributable to ownersof the Parent (Yen)

9,196.61

Equity per share attributable to ownersof the Parent (Yen)

Basic earnings per share for the year (Yen)

1,593.20

Basic earnings per share for the year (Yen)885.15

Diluted earnings per share for the year (Yen)

1,590.55

Diluted earnings per share for the year (Yen)883.62

9,368.83(Note) The basis for calculation of basic earnings per share and diluted earnings per share for the year is as follows:Year ended
31 August 2019Year ended
31 August 2020

162,578

90,357--

Profit attributable to common shareholders (Millions of yen)

162,578

90,357

Average number of common stock during the year (Shares)

102,045,645

102,081,609--

Increase in number of common stock (Shares)

169,956

177,082(share subscription rights)(169,956)(177,082)

Basic earnings per share for the year
Profit for the year attributable to owners of the Parent (Millions of yen)
Profit not attributable to common shareholders (Millions of yen)

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

- 135 -

28. Cash Flow Information
A. Liabilities of financing activities
Liabilities of financing activities are as follows:Year ended 31 August 2019
(Millions of yen)
Variation without cash flow
Balances as at
1 September 2018

Variation withcash flow

Short-term borrowings

954

355

(73)

-

1,236

Long-term borrowings

8,884(4,433)

(192)

-

4,258

Corporate bonds

499,020(30,000)-

163

469,183

Finance lease obligations

35,643(11,377)(192)

14,65338,726544,502(45,455)(458)

14,816

513,405

Total

Foreign currencytranslation
reserve

Balances as at
31 August 2019

Others(Note) 30,000 million yen in 1st non-collateralized corporate bonds (interest rate: 0.110%; date of maturity: 18 December 2018) havebeen redeemed.
Year ended 31 August 2020
(Millions of yen)
Balances as
Balances as
Adjustment
Variation
at
at
for adoption
with
31 August
1 Septemberof IFRS16
cash flow
2019
2019

Variation without cash flow
Foreigncurrencytranslation
reserve

New lease
contracts

Balances as
at
31 August2020

OthersShort-termborrowings

1,236

-

1,236

13,472445--

15,154Long-term borrowings

4,258

-

4,258

(4,343)

84

-

-

-

Corporate bonds

469,183-

469,183

-

-

-

158

469,342

Finance leaseobligations (Note)

38,726(38,726)

-

-

-

-

-

-

-

428,631428,631(141,216)

2,806

177,451(1,493)

466,179

513,405

389,904

903,309(132,087)

3,336

177,451(1,334)

950,675

Lease liabilities(Note)
Total(Note) Finance lease obligations have been reclassified to Lease liabilities due to the application of IFRS 16 as mentioned in “4.
Newly applied standards and interpretation guideline.”
B. Important non-cash transactions
Year ended 31 August 2019
There are no important non-cash transactions.
Year ended 31 August 2020
Due to the application of IFRS 16, the amount of increase in right-of-use assets is listed in "17. Leases."- 136 -

C. Information on corporate bonds as at 31 August 2019 and 2020 is as follows:(Millions of yen)Company name

FAST RETAILING CO., LTD.

Name of bonds

Date ofissuance

2nd non-collateralized 18 December
corporate bonds

2015

As at
31 August
2019

As at
31 August2020

Interest
rate (%)

99,94999,9890.291

Date ofmaturity
18 December
2020

FAST RETAILING CO., LTD.

3rd non-collateralized 18 December
corporate bonds
2015

49,93949,9570.491

16 December
2022

FAST RETAILING CO., LTD.

4th non-collateralized
corporate bonds

18 December
2015

69,87569,8950.749

18 December
2025

FAST RETAILING CO., LTD.

5th non-collateralized
corporate bonds

6 June 201879,877

79,9100.110

6 June 2023

6 June 201829,931

29,9430.220

6 June 2025

6 June 2018

99,75899,7860.405

6 June 2028
4 June 2038

FAST RETAILING CO., LTD.
FAST RETAILING CO., LTD.

6th non-collateralized
corporate bonds
7th non-collateralized
corporate bonds

FAST RETAILING CO., LTD.

8th non-collateralized
corporate bonds

6 June 201839,851

39,859

0.880

Total

-

-

469,183

469,342-- 137 --

29. Share-based Payments
The Group has a program for issuing share subscription rights as share-based compensation stock options for employees of theCompany and its subsidiaries as a means of recognizing their contribution to the 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.
A. Details, scale, and changes in stock options(1) Description of stock options
1st Share subscription rights
A typeCategory and number of grantees

Number of stock options by type of shares (Note)
Grant date
Vesting conditions

Eligible service period
Exercise period
Settlement

1st Share subscription rights
B typeEmployees of the Company:
Employees of Group

7

Employees of the Company:
Employees of Group266

subsidiaries:3

subsidiaries:

413

Common stock:

Common stock:maximum 3,370 sharesmaximum 77,542 shares

8 November 2010

8 November 2010

To serve continuously until the

To serve continuously until thevesting date (7 November 2013) after
the grant date (8 November 2010)

vesting date (7 December 2010) after
the grant date (8 November 2010)

From 8 November 2010 to
7 November 2013

From 8 November 2010 to
7 December 2010

From 8 November 2013 to

From 8 December 2010 to

7 November 2020

7 November 2020

Equity settlement

Equity settlement

2nd share subscription rights
A typeCategory and number of grantees

2nd share subscription rights
B typeEmployees of the Company:
Employees of Group

14

Employees of the Company:
Employees of Group

139

subsidiaries:

4

subsidiaries:

584

Common stock:

Common stock:maximum 13,894 sharesmaximum 51,422 shares

15 November 201115 November 2011

To serve continuously until the

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

vesting date (14 December 2011)
after the grant date (15 November

2011)

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

Number of stock options by type of shares (Note)
Grant date

Vesting conditions- 138 -

3rd share subscription rights
A typeEmployees of the Company:
Category and number of grantees

Employees of Groupsubsidiaries:

3rd share subscription rights
B type18

Employees of the Company:

136

8

Employees of 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

To serve continuously until thevesting date (12 November 2015)

To serve continuously until thevesting date (12 December 2012)

after the grant date (13 November
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

Vesting conditions

4th share subscription rights
A typeCategory and number of grantees

Number of stock options by type of shares (Note)
Grant date
Vesting conditions

Eligible service period
Exercise period
Settlement

4th share subscription rights
B typeEmployees of the Company:
Employees of Group

19

Employees of the Company:
Employees of Group180

subsidiaries:

11

subsidiaries:

706

Common stock:

Common stock:maximum 7,564 sharesmaximum 29,803 shares

3 December 2013

3 December 2013

To serve continuously until the

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

vesting date (2 January 2014) after
the grant date (3 December 2013)

From 3 December 2013 to
2 December 2016

From 3 December 2013 to
2 January 2014

From 3 December 2016 to

From 3 January 2014 to

2 December 2023

2 December 2023

Equity settlement

Equity settlement- 139 -

5th share subscription rights
A typeEmployees of the Company:
Category and number of grantees

Employees of Groupsubsidiaries:

5th share subscription rights
B type36

Employees of the Company:

223

16

Employees of 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

To serve continuously until thevesting date (13 November 2017)

To serve continuously until thevesting date (13 December 2014)

after the grant date (14 November
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

Vesting conditions

6th share subscription rights
A typeCategory and number of grantees

6th share subscription rights
B typeEmployees of the Company:
Employees of Group

15

Employees of the Company:
Employees of Group274

subsidiaries:

19

subsidiaries:

921

Common stock:

Common stock:maximum 2,847 sharesmaximum 25,389 shares

13 November 2015

13 November 2015

To serve continuously until the

To serve continuously until thevesting date (12 November 2018)
after the grant date (13 November

vesting date (12 December 2015)
after the grant date (13 November

2015)

2015)

From 13 November 2015 to

From 13 November 2015 to

12 November 201812 December 2015

Exercise period

From 13 November 2018 to
12 November 2025

From 13 December 2015 to
12 November 2025

Settlement

Equity settlement

Equity settlement

Number of stock options by type of shares (Note)
Grant date

Vesting conditions

Eligible service period- 140 -

6th share subscription rights
C typeCategory and number of grantees

7th share subscription rights
A typeEmployees of the Company:

26

Employees of the Company:

16

Employees of Groupsubsidiaries:

23

Number of stock options by type of shares (Note)

Common stock:maximum 6,072 shares

Common stock:maximum 2,821 shares

Grant date

13 November 2015

11 November 2016

To serve continuously until thevesting date (12 November 2018)

To serve continuously until thevesting date (10 November 2019)

after the grant date (13 November
2015)

after the grant date (11 November
2016)

Eligible service period

From 13 November 2015 to
12 November 2018

From 11 November 2016 to
10 November 2019

Exercise period

13 November 2018

From 11 November 2019 to
10 November 2026

Settlement

Equity settlement

Equity settlement

Vesting conditions

7th share subscription rights
B typeCategory and number of grantees

Employees of the Company:
Employees of the Groupsubsidiaries:

7th share subscription rights
C type339
Employees of the Company:

1,096

Common stock:

Common stock:maximum 31,726 sharesmaximum 5,205 shares

11 November 2016

11 November 2016

To serve continuously until the

To serve continuously until thevesting date (10 December 2016)
after the grant date (11 November

vesting date (10 November 2019)
after the grant date (11 November

2016)

2016)

From 11 November 2016 to

From 11 November 2016 to

10 December 2016

10 November 2019

Exercise period

From 11 December 2016 to
10 November 2026

11 November 2019

Settlement

Equity settlement

Equity settlement

Number of stock options by type of shares (Note)
Grant date

Vesting conditions

Eligible service period- 141 -

30

8th share subscription rights
A typeEmployees of the Company:
Category and number of grantees

Employees of Groupsubsidiaries:

8th share subscription rights
B type19

Employees of the Company:

27

Employees of Groupsubsidiaries:

395
1,152

Number of stock options by type of shares (Note)

Common stock:maximum 5,454 shares

Common stock:maximum 48,178 shares

Grant date

10 November 2017

10 November 2017

Vesting conditions

To serve continuously until thevesting date (9 November 2020) after

To serve continuously until thevesting date (9 December 2017) after

the grant date (10 November 2017)

the grant date (10 November 2017)

From 10 November 2017 to

From 10 November 2017 to

9 November 2020

9 December 2017

From 10 November 2020 to

From 10 December 2017 to

9 November 2027

9 November 2027

Equity settlement

Equity settlement

Eligible service period
Exercise period
Settlement

8th share subscription rights
C type9th share subscription rights
A type17

Employees of Groupsubsidiaries:

32

Employees of the Company:

Number of stock options by type of shares (Note)

Common stock:maximum 5,929 shares

Common stock:maximum 4,057 shares

Grant date

10 November 2017

9 November 2018

Vesting conditions

To serve continuously until thevesting date (9 November 2020) after

To serve continuously until thevesting date (9 November 2018) after

the grant date (10 November 2017)

the grant date (8 November 2021)

From 10 November 2017 to

From 9 November 2018 to

9 November 2020

8 November 2021

Exercise period

10 November 2020

From 9 November 2021 to
8 November 2028

Settlement

Equity settlement

Equity settlement

Eligible service period- 142 -

29

Employees of the Company:
Category and number of grantees

9th share subscription rights
B typeEmployees of the Company:
Category and number of grantees

Employees of Groupsubsidiaries:

9th share subscription rights
C type419
Employees of the Company:

40

1,267

Number of stock options by type of shares (Note)

Common stock:maximum 36,275 shares

Common stock:maximum 4,733 shares

Grant date

9 November 2018

9 November 2018

Vesting conditions

To serve continuously until thevesting date (8 December 2018) after

To serve continuously until thevesting date (8 November 2021) after

the grant date (9 November 2018)

the grant date (9 November 2018)

From 9 November 2018 to

From 9 November 2018 to

8 December 2018

8 November 2021

Eligible service period
Exercise period
Settlement

From 9 December 2018 to

9 November 2021

8 November 2028
Equity settlement

Equity settlement

10th share subscription rights
A typeEmployees of the Company:
Category and number of grantees

Employees of Groupsubsidiaries:

10th share subscription rights
B type11

Employees of the Company:

46

Employees of Groupsubsidiaries:

528
1,389

Number of stock options by type of shares (Note)

Common stock:maximum 3,548 shares

Common stock:maximum 37,424 shares

Grant date

8 November 20198 November 2019

Vesting conditions

To serve continuously until thevesting date (7 November 2022) after

To serve continuously until thevesting date (7 December 2019) after

the grant date (8 November 2019)

the grant date (8 November 2019)

From 8 November 2019 to

From 8 November 2019 to

7 November 2022

7 December 2019

Exercise period

From 8 November 2022 to
7 November 2029

From 8 December 2019 to
7 November 2029

Settlement

Equity settlement

Equity settlement

Eligible service period

10th share subscription rights
C typeCategory and number of grantees

Employees of the Company:

Number of stock options by type of shares (Note)

Common stock:maximum 3,666 shares

Grant date

8 November 2019

Vesting conditions

To serve continuously until thevesting date (7 November 2022) after
the grant date (8 November 2019)

Eligible service period

From 8 November 2019 to
7 November 2022

Exercise period

8 November 2022

Settlement

Equity settlement(Note) The number of stock options is equivalent to the number of shares.

- 143 -

40

Expenses recognized as share-based payments are as follows:(Millions of yen)
Year ended
31 August 2019Year ended
31 August 2020

2,504

2,915

Expenses recognized
Share-based payments(2) Scale of stock options program and changes
Outstanding balance of stock options as at 31 August 2020 are converted into equivalent number of shares.
(a) Number and weighted average exercise prices of stock options
Stock options
Year ended
31 August 2019Year ended
31 August 2020

Number of shares(Shares)Number of shares(Shares)Non-vested
Non-vested at beginning of the year

26,45525,518Granted

45,06544,638Forfeited(2,031)(1,196)

Vested(43,971)(44,399)

25,51824,561

Non-vested at end of the year

Year ended
31 August 2019Year ended
31 August 2020

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

VestedOutstanding at beginning of the year

142,483

143,233

Vested43,971

44,399Exercised(41,991)(38,891)

Forfeited(1,230)(291)

143,233

148,450

Outstanding at end of the year
All stock options are granted with an exercise price of 1 yen per share.
(b) Stock price on exercise date

Stock options exercised during the year ended 31 August 2020 are as follows:
Number of shares(Shares)

Type
Stock options

Weighted-average stock priceon exercise date (Yen)38,891

59,244(c) Expected life of stock options
The weighted-average expected life of outstanding stock options as at 31 August 2020 was 5.80 years.
In addition, the weighted-average expected life of outstanding stock options as at 31 August 2019 was 5.83 years.

- 144 -

B. Methods of estimating fair value of stock options, etc.
The methods of estimating fair value of 10th share subscription rights A type, B type, and C type granted during the year
ended 31 August 2020, were as follows:(1) Valuation model: Black-Scholes model(2) The following table lists the inputs to the model used:
10th share subscription rights
A type10th share subscription rights
B typeFair value

66,058 yen

66,732 yen

Share price69,110 yen

69,110 yen

Exercise price

1 yen

1 yen

Stock price volatility (Note 1)

33%

34%

6.5 years

5.04 years

480 yen / share

480 yen / share(0.2105%)(0.21692%)

Expected life of options (Note 2)
Expected dividends (Note 3)
Risk-free interest rate (Note 4)

10th share subscription rights
C typeFair value

67,684 yen

Share price69,110 yen

Exercise price

1 yen

Stock price volatility (Note 1)

27%

Expected life of options (Note 2)

3 years

Expected dividends (Note 3)

480 yen / share yen / share

Risk-free interest rate (Note 4)(0.203%)

Notes: 1. Stock price volatility is computed based on the actual results of 6.5 years for A type (from June 2013 to November 2019),
5.04 years for B type (from December 2014 to November 2019), and 3.0 years for C type (from December 2016 toNovember 2019).
2. Expected life of options is estimated to be the reasonable period from the grant date until the exercise date.
3. Expected dividends are projected with reference to the historical actual dividends declared in prior years.
4. Risk-free interest rate refers to the yield of Japanese government bonds corresponding to the expected life of options.
5. The variables and assumptions used in computing the fair value of the share options are based on the Group’s best estimate.
The value of an option varies with different variables of certain subjective assumptions.

- 145 -

Also, the method of estimating fair value for the ‘9th share subscription rights A type, B type, and C type granted during theyear ended 31 August 2019 is as follows:(1) Valuation model: Black-Scholes model(2) The following table lists the inputs to the model used:
9th share subscription rights
A type9th share subscription rights
B typeFair value

58,275 yen

58,891 yen

Share price

61,070 yen

61,070 yen

Exercise price

1 yen

1 yen

Stock price volatility (Note 1)

34%

34%

6.5 years

5.04 years

440 yen / share

440 yen / share(0.04%)(0.075%)

Expected life of options (Note 2)
Expected dividends (Note 3)
Risk-free interest rate (Note 4)

9th share subscription rights
C typeFair value

59,763 yen

Share price

61,070 yen

Exercise price

1 yen

Stock price volatility (Note 1)

36%

Expected life of options (Note 2)

3 years

Expected dividends (Note 3)

440 yen / share yen / share

Risk-free interest rate (Note 4)(0.11%)

Notes: 1. Stock price volatility is computed based on the actual results of 6.5 years for A type (from June 2012 to November 2018),
5.04 years for B type (from December 2013 to November 2018), and 3.0 years for C type (from December 2015 toNovember 2018).
2. Expected life of options is estimated to be the reasonable period from the grant date until the exercise date.
3. Expected dividends are projected with reference to the historical actual dividends declared in prior years.
4. Risk-free interest rate refers to the yield of Japanese government bonds corresponding to the expected life of options.
5. The variables and assumptions used in computing the fair value of the share options are based on the Group’s best estimate.
The value of an option varies with different variables of certain subjective assumptions.

C. 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.

- 146 -

30. Financial Instruments
A. 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 2019

As at
31 August 2020

513,405

484,496-

466,179

Cash and cash equivalents

1,086,519

1,093,531

Net interest-bearing borrowings(573,114)(142,856)

Equity983,534

996,079

Interest-bearing borrowings
Lease liabilities

Interest-bearing borrowings includes corporate bonds and borrowings. The amount of finance lease obligations was included ininterest-bearing borrowings for the previous fiscal year. For the current fiscal year, finance lease obligations are included in andshown as lease liabilities due to the application of IFRS 16. As at 31 August 2019 and 2020, the Group maintained a position
where the carrying amount of cash and cash equivalents exceeded the total amounts of interest-bearing borrowings and leaseliabilities.
As at 31 August 2020, the Group is not subject to any externally imposed capital requirement.
B. 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.

- 147 -

C. Categories of financial instruments(Millions of yen)
As at
31 August 2019

As at
31 August 2020

Trade and other receivables

60,39867,069Other current financial assets

44,47349,890

Other non-current financial assets

75,38066,399

-

-

1,645

1,370

-

1,619

24,23023,778Trade and other payables

191,769

210,747

Other current financial liabilities

159,006

213,301-

114,652

499,948

370,780-

351,526

-

69

6,824

5,899

Financial assets
Loans and receivables

Financial assets measured at fair value through profit or loss
Financial assets measured at fair value through othercomprehensive income / (loss)
Derivatives
Financial assets measured at fair value through profit or loss
Financial assets designated as hedging instruments
Financial liabilities
Financial liabilities at amortized cost

Current lease liabilities
Non-current financial liabilities
Non-current lease liabilities
Derivatives
Financial liabilities measured at fair value throughprofit or loss
Financial liabilities designated as hedging instruments

At the end of the previous fiscal year, finance lease obligations are included in other current financial liabilities and non-current
financial liabilities. For the current fiscal year, finance lease obligations are included in and shown as lease liabilities in theStatement of Financial Position
No items in the above categories are included in discontinued operations or disposal groups 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.”D. Financial risk management
In relation to cash management, the Group seeks to ensure effective utilization of Group funds through the Group’s CashManagement Service. The Group obtained credit facilities from financial institutions and issuance of bonds. Any temporary
surplus funds are invested 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.

- 148 -

E. Market risk management
The Group conducts its business on a global scale, and is therefore exposed to the price fluctuation risk of currencies and equity
financial instruments.
(1) Foreign currency risk(a) 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, for foreign currency exchange fluctuation risk by
currency and on a monthly basis, the Group in principle hedges risk by using foreign currency forward contracts.
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 thissituation continued for an extended period, it could have a negative impact on the Group’s performance.
The Group enters into derivative transactions only with financial institutions evaluated as highly creditworthy by rating
agencies to mitigate the counterparty risk.
The Group’s notional amount of foreign currency forward contracts was 1,202,039 million yen as at 31 August 2020.
(b) Foreign currency sensitivity analysis
With respect to companies that use yen as the functional currency in each reporting period, below is an analysis of the
impact an 1% increase in the yen against the Euro (“EUR”) and the United States dollar (“USD”) would have on theGroup’s profit before income taxes and other comprehensive income (before tax effects).
However, this analysis assumes that over variable factors are constant. Furthermore, this does not include the effect ofconversion of financial instruments denominated the functional currencies, and revenue, expenses, assets, and liabilities ofoverseas sales entities into presentation currency.
Year ended
31 August 2019Year ended
31 August 2020

USD

110.83108.04EUR

126.09120.06USD(3,189)(3,853)

EUR

(224)

(239)

USD

(10,862)(10,316)

EUR

(96)

(127)

Average exchange rate (Yen)

Impact on profit before income taxes (Millions of yen)

Impact on other comprehensive income (Millions of yen)

- 149 -

(c) 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.
The monetary value of ineffective hedges is immaterial.
The details of foreign currency forward contract are as follows:(i) Derivative transactions to which hedge accounting is not applied
Average exchange
31 August2019

31 August2020

Foreign currencies(Millions ofrespective currency)

Contract principal(Millions of yen)

Fair value(Millions of yen)

31 August2019

31 August2020

31 August2019

31 August2020

31 August2019

31 August
2020

-

20

-

2,071

-

83

-

24,663

-

2,151

-

44

-

8

-

855

-

(19)

-

15

-

1,447

-

(38)

Foreign currency forward contracts
Over 1 year-

1,137.61(KRW / $)(KRW / $)-0.00($ / KRW)($ / KRW)-

0.85(EUR / $)(EUR / $)-0.77(£ / $)(£ / $)

Buy USD (sell KRW)

(KRW / $)1,124.35(KRW / $)

-

154

-

15,463-830

Buy USD (sell TWD)

(TWD / $)29.41(TWD / $)

-

21

-

2,249

-

7

-

7.84

(HKD / $)(HKD / $)

-

7

-

789

-

(9)

-

7

-

843

-

45

Buy USD (sell KRW)
Buy KRW (sell USD)
Within 1 year
Buy USD (sell EUR)
Buy USD (sell GBP)

Buy USD (sell HKD)

-

1.14

($ / EUR)($ / EUR)

Buy GBP (sell USD)($ / £)

1.26($ / £)

-

11

-

1,475

-

83

Buy KRW (sell USD)($ / KRW)

0.00($ / KRW)-

188,516-

16,249

-

519

-

57

-

779

-

1

Buy EUR (sell USD)

Buy HKD (sell USD)

-

0.13

($ / HKD)($ / HKD)- 150 -

(ii) Derivative transactions to which hedge accounting is applied
Average exchange rates
31 August2019

Foreign currencies(Millions ofrespective currency)

Contract principal(Millions of yen)

Fair value(Millions of yen)

31 August2020

31 August2019

31 August2020

31 August2019

31 August2020

31 August2019

31 August2020

Foreign currency forward contracts
Over 1 year
Buy USD (sell JPY)

101.88(¥ / $)

103.02(¥ / $)

6,425

6,192

654,561

637,960

1,862

7,945

Buy USD (sell EUR)

0.83
(EUR / $)0.85(EUR / $)

233

103

22,86010,958

1,088

(219)

70

49

6,200

5,208

501

1

285

107

27,788

11,077

2,063

223

18

4

1,960

425

30

(3)

Buy USD (sell GBP)
Buy USD (sell KRW)

0.75

0.75

(£ / $)(£ / $)

1,106.57

1,158.56(KRW / $)(KRW / $)

1.36

1.37

(SGD / $)(SGD / $)Buy USD (sell THB)

31.39
(THB / $)30.00(THB / $)

9

11

980

1,134

(29)

43

Buy USD (sell MYR)

(MYR / $)4.43(MYR / $)

-

2

-

224

-

(10)

1.39

1.44

(AUD / $)(AUD / $)

13

34

1,325

3,853

78

(207)

1.31

1.38

(CAD / $)(CAD / $)

12

0

1,260

89

16

(4)

Buy USD (sell PHP)

53.31
(PHP / $)53.30(PHP / $)

14

15

1,522

1,742

(8)

(116)

Buy USD (sell HKD)

7.80
(HKD / $)(HKD / $)

1

-

105

-

0

-

Buy USD (sell SGD)

Buy USD (sell AUD)
Buy USD (sell CAD)

- 151 -

Average exchange rates

Foreign currencies(Millions ofrespective currency)

Contract principal(Millions of yen)

Fair value(Millions of yen)

31 August2019

31 August2020

31 August2019

31 August2020

31 August2019

31 August2020

31 August2019

31 August2020

103.16(¥ / $)

102.26(¥ / $)

3,097

3,443

319,510352,183

4,967

10,1150.84

0.84(EUR / $)(EUR / $)

259

209

25,58422,099

1,943

(132)

0.75

0.77

(£ / $)(£ / $)

97

86

8,547

9,422

702

(254)

Buy USD (sell KRW)

1,081.73(KRW / $)1,099.02(KRW / $)

424

151

40,407

14,852

4,657

1,158

Buy USD (sell TWD)

30.47
(TWD / $)(TWD / $)

45

-

4,701

-

138

-

1.35

1.39

(SGD / $)(SGD / $)

77

84

8,017

9,126

184

(152)

31.72

30.17

(THB / $)(THB / $)

90

88

9,993

9,030

(372)

278

71

37

7,603

4,103

86

(96)

Within 1 year
Buy USD (sell JPY)
Buy USD (sell EUR)
Buy USD (sell GBP)

Buy USD (sell SGD)
Buy USD (sell THB)

4.19

4.29

(MYR / $)(MYR / $)Buy USD (sell AUD)

1.39
(AUD / $)1.45(AUD / $)

61

70

6,062

7,974

414

(486)

Buy USD (sell RUB)

68.12
(RUB / $)67.59(RUB / $)

63

57

6,938

5,551

(53)

616

56

36

5,926

3,885

98

(34)

62

41

6,944

4,401

(223)

8

Buy USD (sell MYR)

1.31

1.32

(CAD / $)(CAD / $)14,933.81

14,660.80(IDR / $)(IDR / $)Buy USD (sell PHP)

54.31
(PHP / $)52.03(PHP / $)96

69

10,714

7,883

(354)

(463)

Buy USD (sell INR)

72($ / INR)

75.71($ / INR)

2

2

319

230

4

(5)

84

70

8,937

7,504

34

(58)

-

187

-

20,079

-

(248)

44

20

6,269

2,529

(414)

30

Buy USD (sell CAD)
Buy USD (sell IDR)

Buy USD (sell HKD)

7.81

7.82

(HKD / $)(HKD / $)-6.99(CNY / $)(CNY / $)

1.20

1.18

($ / EUR)($ / EUR)

Buy GBP (sell USD)

1.25($ / GBP)

1.27($ / GBP)

5

8

799

1,074

(10)

49

Buy IDR (sell USD)($ / IDR)

0.00($ / IDR)-

444,011

-

3,056

-

(94)

Buy USD (sell CNY)
Buy EUR (sell USD)

(2) Interest rate risk management
The Group’s interest-bearing borrowings are mainly bonds with fixed interest rates, and 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 interest
rate risk is minor, and the Group has not performed any interest rate sensitivity analysis.

- 152 -

(3) 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.
F. Credit risk management
When the Group initiates ongoing transactions where receivables are generated on an ongoing basis, the finance department
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 it does
business for early detection of any worsening of their financial health.
Financial assets and other credit risk exposure
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.
(1) Credit risk exposure
Time-frame analysis for trade receivables and other financial assets is as stated below.
Year ended 31 August 2019
(Millions of yen)
Items measured in an amount equivalent to the
expected credit losses for the entire period

Number of days elapsed
after due date

Before due date has elapsed

Items recorded
in an amountequivalent to
12 months of
expected credit
lossesFinancial assets
for which theallowance
Financial assets
for doubtful
for which theaccounts iscredit risk has
Credit-impaired
always measured
significantly
financial assets
as an amountincreased sinceequivalent toinitial recognition
expected losses
for the whole
periodTotal

129,596

49,977

77-

179,651

Within 90 days

23

603

-

-

627

Over 90 days but within
one year

11

212

-

-

224

Over one year

13

275

43

286

619

129,645

51,069121

286

181,123

Term-end balance- 153 -

Year ended 31 August 2020
(Millions of yen)
Items measured in an amount equivalent to the
expected credit losses for the entire period

Number of days elapsed
after due date

Items recorded
in an amountequivalent to
12 months of
expected credit
losses

Before due date has elapsed

Financial assets
for which theallowance
Financial assets
for doubtful
for which theaccounts iscredit risk has
Credit-impaired
always measured
significantly
financial assets
as an amountincreased sinceequivalent toinitial recognition
expected losses
for the whole
periodTotal

124,30259,01947-

183,368

Within 90 days

481

474

-

-

956

Over 90 days but within
one year

156

25

2

-

184

Over one year

23

150

69

-

244

124,965

59,669119-

184,754

Term-end balance(2) Allowances for Doubtful Accounts

Changes in allowances for doubtful accounts for trade receivables and other financial assets are as stated below.
Year ended 31 August 2019
(Millions of yen)
Items measured in an amount equivalent to the
expected credit losses for the entire period

Changes in allowances for
doubtful accounts

Items recorded
in an amountequivalent to
12 months of
expected credit
lossesFinancial assets
for which theallowance
Financial assets
for doubtful
for which theaccounts iscredit risk has
Credit-impaired
always measured
significantly
financial assets
as an amountincreased sinceequivalent toinitial recognition
expected losses
for the whole
periodTotal

Starting balance

64

551

-

273

889

Increase during period

92

148

40

-

281

Decrease during period(intended use)

-

(155)

-

-

(155)

Decrease during period(reversals)

(33)

(25)

-

-

(59)

Other changes

(4)

(47)

-

(32)

(84)

Term-end balance

117

471

40

241

871

- 154 -

Year ended 31 August 2020
(Millions of yen)
Items measured in an amount equivalent to the
expected credit losses for the entire period

Changes in allowances for
doubtful accounts

Starting balance

Items recorded
in an amountequivalent to
12 months of
expected credit
lossesFinancial assets
for which theallowance
Financial assets
for doubtful
for which theaccounts iscredit risk has
Credit-impaired
always measured
significantly
financial assets
as an amountincreased sinceequivalent toinitial recognition
expected losses
for the whole
period

Total

117

471

40

241

871

-

938

-

-

938

Balance after adjustment

117

1,409

40

241

1,809

Increase during period

35

224

5

-

265

Decrease during period(intended use)

(15)

(322)

-

(247)

(585)

Decrease during period(reversals)

(61)

(36)

-

-

(98)

Other changes

(11)

9

-

6

4

Term-end balance

64

1,284

46

-

1,395

Effect of adoption of IFRS 16

The Group continually monitors the credit standing of trading partners if there is a concern about recoverability,
including receivables for which the due date has changed.
Based on the monitoring of the credit standing, the recoverability of accounts receivable, etc., is examined and theallowance for doubtful accounts is set.
In relation to the Group’s global business expansion, there is little reliance on any specific trading partners and exposure
is dispersed, so the impact of any sequential credit risk due to the poor credit standing of any specific trading partner isminimal.
As a result, we have no exposure to excessively-focused credit risk.

- 155 -

G. 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 financedepartment, 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.
(Millions of yen)More than More than More than
2 years but 3 years but 4 years but
withinwithinwithin3 years
4 years
5 years

Carrying
amountContractual Less thancash flows
1 year1 to 2years

Over
5 years

Trade and other payables

191,769

191,769

191,769

-

-

-

-

-

Current portion of
long-term borrowings

4,258

4,258

4,258

-

-

-

-

-

Short-term borrowings

1,236

1,236

1,236

-

-

-

-

-

Corporate bonds

469,183

470,000-

100,000-

130,000-

240,000

Long-term finance leaseobligations

29,31429,314

-

8,596

7,703

5,571

2,827

4,615

Short-term finance leaseobligations

9,411

9,411

9,411

-

-

-

-

-

144,099

144,099

144,099

-

-

-

-

-

Foreign currency forward
contracts

6,824

6,824

2,985

2,127

1,711

-

-

-

Total

856,098

856,915353,762

110,723

9,414

135,571

2,827

244,615

Trade and other payables

210,747

210,747

210,747

-

-

-

-

-

Current portion of
long-term borrowings

-

-

-

-

-

-

-

-

Short-term borrowings

15,15415,15415,154

-

-

-

-

-

Corporate bonds

469,342470,000

100,000-

130,000-

30,000210,000

Long-term finance leaseliabilities

351,526

365,539-

85,37060,86549,84638,523130,932

Short-term finance leaseliabilities

114,652

115,222

115,222

-

-

-

-

-

Deposits

98,15698,15698,156

-

-

-

-

-

5,968

5,968

2,763

1,348

1,757

99

-

-

1,265,548

1,280,788

542,044

86,718

192,62249,946

68,523340,932

As at 31 August 2019Non-derivative financial
liabilities

Deposits
Derivative financial liabilities

As at 31 August 2020
Non-derivative financial
liabilities

Derivative financial liabilities
Foreign currency forward
contracts
Total(Note) Guaranteed obligations are not included in the above, as the probability of having to act on those guarantees is remote.

- 156 -

H. Fair value of financial instruments(Millions of yen)
As at 31 August 2019
Carrying amounts

As at 31 August 2020

Fair value

Carrying amounts

Fair value

Financial assets
Security deposits / guarantees (Note)

62,39863,982

63,63964,341

Total

62,39863,982

63,63964,341Long-term borrowings (Note)

4,258

4,258

-

-

469,183

478,638

469,342

470,938

473,442482,896469,342

470,938

Financial liabilities

Corporate bonds (Note)
Total(Note) The above includes the outstanding balance of borrowings and corporate bonds due within one year.
Notes concerning financial assets and financial liabilities for which fair value approximates book value have been omitted.
The fair value of security deposits / guarantees is calculated on the basis of the current value, applying the current market
interest rate.
The fair value of corporate bonds is calculated with reference to publicly available market prices.
The fair value of long-term borrowings is classified by term, and are calculated on the basis of the current value, applying a
discount rate that takes into the account time remaining to maturity, and credit risk.
The book value and the fair value of finance lease obligations as at 31 August, 2019 were 38,726 million yen and 38,595
million yen, respectively. The fair value is measured by the present value of future cash flows of each debt categorizedaccording to a certain range of term, and discounted by the interest rate that reflects the remaining period to the maturity andcredit risk. For the current fiscal year, as we have adopted the IFRS 16 as described in "4. Newly applied standards andinterpretation guidelines," the fair value for finance lease obligations for the current fiscal year is not disclosed.
The fair value measurements of Security deposits / guarantees, corporate bonds and long-term borrowings are classified as level2.

- 157 -

I. 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 the fairvalue 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
When multiple inputs are used to measure fair value, the fair value level is determined based on the input with the lowest levelclassification in the overall fair value assessment.
The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments:(Millions of yen)
As at 31 August 2019
Financial assets measured at fair value through othercomprehensive income
Financial assets measured at fair value throughLevel 1

Financial assets measured at fair value through othercomprehensive income
Financial assets measured at fair value throughprofit or loss
Financial assets and financial liabilities designatedas hedging instruments — Fair value
Net amount

Total

-

173

1,645

-

-

-

-

-

17,406-

17,406

1,471

17,406173

19,051as hedging instruments — Fair value

As at 31 August 2020

Level 3

1,471

profit or loss
Financial assets and financial liabilities designated
Net amount

Level 2

Level 1

Level 2

Level 3

Total

1,158

-

212

1,370

-

1,550

-

1,550

-

17,878-17,878

1,158

19,428212

20,799For 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 using inputs such as interest rates, yield curves, currency rates, and volatility
in comparable instruments.
Financial instruments classified as Level 3 consist mainly of unlisted shares. The fair values of unlisted shares are measured by
the division responsible in the Group according to the Group’s accounting policy, etc. , using the immediately preceding figuresavailable for each quarter.
There were no significant changes due to the purchase, sale, issuance and settlement of Level 3 financial instruments, and notransfers between Levels 1, 2 and 3.

- 158 -

31. 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 2019Year ended
31 August 2020

719

786

-

13

719

799

Short-term employee benefits
Share-based payments
Total

Transactions with officers and major shareholders (individuals only), etc. of the reporting entity submitting these consolidated
financial statements.
Year ended 31 August 2019 (from 1 September 2018 to 31 August 2019)

Type

Name ofCompany,
etc., orpersonal
nameLocation

CapitalStock or
Money
Invested(Millions ofyen)

Business
Content or
Occupation

Percentage
of voting Relation withright, etc.
Associatedheld (being
Party
held)

Company

Rent of store

in whichproperties

officers
and close

TTY

relatives

Management

hold aB.V.

AssetsAmsterdam,
Netherlands

71,826holdings,
managing,etc.

majority

Transaction
Details

Transaction
Amount(millions of
yen)

Item

Store renting

337

current

Term-end
Balance(millions ofyen)

by our
5.2% are

Other

subsidiarydirectly
held

56

assetsServesconcurrentlyof votingas an officer

rights(Notes) 1. Of the above-mentioned amounts, any trade amounts do not include consumption taxes and the like.
2. Trading conditions and policy for determining trading conditions, etc.
Related party transactions were made on terms equivalent to those that prevail in arm’s length transactions.
3. Chairman of the Board of Directors and President Tadashi Yanai holds a majority of the voting rights.
Current consolidated accounting year (From 1 September 2019, through 31 August 2020)

Type

Name ofCompany,
etc., orpersonal
nameLocation

CapitalStock or
Money
Invested(Millions ofyen)

Business
Content or
Occupation

Percentage
of voting Relation withright, etc.
Associatedheld (being
Party
held)

Company

Rent of store

in whichproperties

officers
and close

TTY

relatives

Management

hold aB.V.

majority

AssetsAmsterdam,
Netherlands

71,826holdings,
managing,
etc.

Transaction
Details

Transaction
Amount(millions ofyen)Store renting

647

Item

Term-end
Balance(millions ofyen)

by our
5.2% aresubsidiarydirectly
held

Lease
liabilities

Servesconcurrentlyof votingas an officer

rights(Notes) 1. Of the above-mentioned amounts, any trade amounts do not include consumption taxes and the like.
2. Trading conditions and policy for determining trading conditions, etc.
Related party transactions were made on terms equivalent to those that prevail in arm’s length transactions.
3. Chairman of the Board of Directors and President Tadashi Yanai holds a majority of the voting rights.

- 159 -

6,797

32. Major Subsidiaries
The Group’s major subsidiaries are as listed in “3. Corporate Profile 3. Subsidiaries and Associates.”
33. Commitments
The Group had the following commitments at each reporting date:(Millions of yen)
As at
31 August 2019

As at
31 August 2020

Commitment for the acquisition of property,
plant and equipment

7,382

24,942

Commitment for acquisition of intangible assets

4,340

2,139

11,72327,081Total
34. Contingent Liabilities
Year ended 31 August 2019
Not applicableYear ended 31 August 2020
Not applicable
35. Subsequent Events
Not applicable
E. Others
Quarterly information for the year ended 31 August 2020
(Cumulative)

First quarter

Second quarter

Third quarter

623,484

1,208,512

1,544,924

2,008,846

102,015150,859

142,420

152,868

Quarterly net income(Millions of yen)

70,907

100,459

90,64090,357

Earnings per share(Yen)

694.73984.21887.96885.15First quarter

Second quarter

Third quarter

Fourth quarter

694.73289.51(96.18)(2.77)

Revenue (Millions of yen)
Quarterly income before
income taxes and noncontrolling

Fiscal year

interests (Millions of yen)

(Accounting period)
Quarterly earnings / (losses)
per share (Yen)- 160 -

10. Financial statements(1) Balance Sheet(Millions of yen)
As at 31 August 2019

As at 31 August 2020

ASSETS
Current assets
Cash and deposits

551,376

569,322※1 48,268※1 30,174

Securities
Short-term loans receivable from subsidiaries and associates

146,000
103,198

145,965
58,624

Accounts receivable from subsidiaries and associates
Others17,271
4,670

18,863
5,677

(0)

(1)

870,786

828,625

14,745※3 (7,431)

21,590※3 (8,661)

7,313

12,928367※3 (249)369※3 (261)

118

108

Operating accounts receivable

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Tools, furniture and fixtures

1,804

2,646

Accumulated depreciation※3 (1,532)※3 (1,698)

272

948

1,123
1,284

1,123
1,801

※3 (632)※3 (922)652

878

Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress

4,432

3,116

13,914

19,104

Software29,03945,959Software in progress
Others13,814
60

3,153
14

Total intangible assets

42,914

49,126

Investment securities

1,633

1,318

Shares of subsidiaries and associates
Investments in capital of subsidiaries and associates

87,002
10,406

131,4829,251

Long-term loans receivable from subsidiaries and associates
Leases and guarantee deposits

17,261
7,714

18,414
6,300

Deferred tax assets
Others

3,384
792

3,460
407

Allowance for doubtful accounts(1,051)(4,134)

Total investments and other assets

127,142

166,500

183,971234,7311,054,758

1,063,356

Total property, plant and equipment
Intangible assets

Investments and other assets

Total non-current assets
Total assets- 161 -

(Millions of yen)
As at 31 August 2019

As at 31 August 202011,032100,000
10,2901,813※1 33,581

2,005※1 22,919

Provision for bonuses

2,676

2,621

Income taxes payable
Others

5,836
1,973

8,597
1,217

Total current liabilities

56,914

147,652

470,000
2,247

370,000
3,385

204
422

394
466

3,262

2,502

476,137

376,749

533,051

524,402

10,273

10,273

4,578

4,578

LIABILITIESCurrent liabilities
Current portion of corporate bonds
Accounts payable
Accrued expenses
Deposits received

Non-current liabilities
Corporate bonds payable
Guarantee deposits received
Provision for loss on guarantees
Provision for loss on business of subsidiaries and associates
OthersTotal non-current liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus

6,335

7,786

Total capital surplus

10,914

12,364818

818

185,100
325,423

185,100
338,851

Retained earnings
Legal retained earnings
Other retained earnings
General reserve
Retained earnings brought forward

511,341

524,769

Treasury stock

Total retained earnings(15,271)(15,129)

Total shareholders’ equity

517,258

532,279

Valuation differences on available-for-sale securities(1,533)(566)

Total valuation and translation adjustments(1,533)

(566)

5,981

7,241

Valuation and translation adjustments

Share subscription rights
Total net assets
Total liabilities and net assets- 162 -

521,706

538,954

1,054,758

1,063,356

(2) Statement of Income(Millions of yen)
Year ended
31 August 2019Year ended
31 August 2020

Operating revenue
Management income from operating companies※1 55,011※1 64,815

Dividends income from subsidiaries and affiliates※1 129,899※1 91,540

184,910

156,356

7,128

10,798Bonuses
Allowance for bonuses

1,417
1,834

1,658
1,988

Rental expenses
Depreciation

8,231
10,165

8,379
14,920Outsourcing expenses

23,703
13,32826,837
16,455※1 65,808※1 81,039

119,101

75,316

Total operating revenue
Operating expenses
Selling, general and administrative expenses
Salaries

OthersTotal operating expenses
Operating profit / (loss)
Non-operating income
Interest income

5,233

4,592

Interest on securities
Foreign exchange gains

201
-

92
93

Others

562

196

5,997

4,975

1,968
17,103

2,022
-

26

57

※1 19,098※1 2,079

106,000

78,211-43
43

Losses on retirement of non-current assets※2 44※2 316

Loss on valuation of shares of subsidiaries and associates
Provision of allowance for doubtful accounts for subsidiaries andassociates

1,341

6,688

583

3,083

-

1,713

Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
OthersTotal non-operating expenses
Ordinary profit / (loss)
Extraordinary income
Reversal of provision for loss on business of subsidiaries and affiliates
Total extraordinary income
Extraordinary losses

Loss on valuation of investment securities
Impairment losses
Transfer pricing adjustment
OthersTotal extraordinary losses

243

13

-

※1 1,065

296

278

2,507

13,159103,492

65,096

Income taxes － current(1,608)

3,066

Income taxes － deferred(1,013)(392)

Income/(loss) before income taxes

Total income taxes(2,621)

2,674

Profit / (loss)

106,11362,422- 163 -

(3) Statement of changes in net asset
Year ended 31 August 2019
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capital
stock

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

10,273

4,578

4,816

9,395

Dividends---

Net income--

Acquisition of treasury stock-

Disposal of treasury stock
Net changes of items other thanthose in shareholders’ equity

Balance at the beginning of year

Total
retainedearnings

Generalreserve

Retainedearnings
brought
forward818

185,100

268,286454,204---(48,976)(48,976)

-

-

-

-

106,113106,113

-

-

-

-

-

-

-

-

-

1,519

1,519

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1,519

1,519

-

-

57,136

57,136

10,273

4,578

6,335

10,914818

185,100

325,423

511,341

Changes during the year

Net changes during the year
Balance at the end of year

Valuation and translation
adjustments

Shareholders’ equity

Share
subscription
rightsTotal net assets

Treasury stock

Total
shareholders’equityValuationdifferences onavailable-for salesecurities(15,429)

458,445

(427)

(427)

5,211

463,229

Dividends-(48,976)---(48,976)

Net income-

106,113---106,113

Acquisition of treasury stock

(2)

(2)

-

-

-

(2)

Disposal of treasury stock

159

1,679

-

-

-

1,679

-

-

(1,106)(1,106)

769

(336)

Net changes during the year157

58,813(1,106)(1,106)769

58,476

Balance at the end of year

(15,271)517,258(1,533)(1,533)

5,981

521,706

Balance at the beginning of year

Total valuationand translation
adjustments

Changes during the year

Net changes of items other thanthose in shareholders’ equity- 164 -

Year ended 31 August 2020
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capital
stock

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

10,273

4,578

6,335

10,914

Dividends---

Net income--

Acquisition of treasury stock-

Disposal of treasury stock
Net changes of items other thanthose in shareholders’ equity

Balance at the beginning of year

Total
retainedearnings

Generalreserve

Retainedearnings
brought
forward818

185,100

325,423

511,341---(48,994)(48,994)

-

-

-

-

62,42262,422

-

-

-

-

-

-

-

-

-

1,450

1,450

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1,450

1,450

-

-

13,427

13,427

10,273

4,578

7,786

12,364818

185,100

338,851524,769

Changes during the year

Net changes during the year
Balance at the end of year

Valuation and translation
adjustments

Shareholders’ equity

Share
subscription
rightsTotal net assets(1,533)

5,981

521,706---(48,994)

62,422---62,422

(5)

(5)

-

-

-

(5)

148

1,598

-

-

-

1,598

-

-

967

967

1,260

2,228

Net changes during the year142

15,020

967

967

1,260

17,248

Balance at the end of year

(15,129)532,279

(566)

(566)

7,241

538,954

Treasury stock

Total
shareholders’equityValuationdifferences onavailable-for salesecurities

Total valuationand translation
adjustments(15,271)517,258(1,533)

Dividends-(48,994)

Net income-

Acquisition of treasury stock
Disposal of treasury stock

Balance at the beginning of year
Changes during the year

Net changes of items other thanthose in shareholders’ equity- 165 -

(4) 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 by theaverage 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 determinedbased on the moving-average cost method.
(ii) Unlisted securities:
Unlisted securities are stated at cost, which is determined by the 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 estimateduseful lives are as follows:
Buildings and structures
Tools, furniture, and fixtures

5-10 years
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 useful life is asfollows:
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 at zero residual
value.
3. Accounting for deferred assets
Issuance expenses of corporate bonds
Issuance expenses of corporate bonds are expensed as incurred.
4. 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 non-recoverable portion isrecorded.
(b) Provisions for bonuses
Bonuses to employees are accrued on the balance sheet date.
(c) Provisions for loss on guarantees
To prepare for losses related to loan guarantees for associated companies, the Company considers the financial position of theguarantee, and records an anticipated loss figure.
(d) Allowances for Affiliated Company Operating Losses
In order to prepare for losses pertaining to affiliated company operations, we take the financial position of our affiliatedcompanies into consideration and list the estimate losses that may be incurred.
5. Other significant matters for the preparation basis of non-consolidated financial statements(1) Accounting for consumption tax
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.
(2) Application of consolidated taxation system
The consolidated taxation system is applied for the Company.

- 166 -

(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 2019

As at 31 August 2020

Trade accounts receivable

48,20130,131

Deposits received

33,18822,525

2. Contingent liabilities(Millions of yen)
As at 31 August 2019

As at 31 August 2020

Guarantees for office and retail store leases

50,45240,651

Guarantees on loans payable to financial institutions

10,472

6,558

3. Accumulated depreciation includes accumulated impairment losses.

- 167 -

(Notes to statement of income)1. Transactions related to the subsidiaries and affiliates are as follows:(Millions of yen)
Year ended
31 August 2019Year ended
31 August 2020

Ordinary revenue:
Management income from operating companies

52,881

62,970

Dividends income from subsidiaries and affiliates
Ordinary expense

129,899
1,462

91,5402,712

Non-operating expenses (including Extraordinary losses)
44
1,081(Note) Non-operating expenses (including Extraordinary losses) for the current fiscal year include 1,065 million yen of transfer
pricing adjustments relating to the past periods between the Company and its U.S. subsidiaries based on Advance Pricing Agreement
in relation to transfer pricing taxation.
2. The breakdown of losses on retirement of non-current assets is as follows:(Millions of yen)
Year ended
31 August 2019Year ended
31 August 2020

Buildings

469

Other property, plant and equipment
Software

2
36

0
200

Other intangible assets-

45(Marketable securities)
As at 31 August 2019
The fair values of the shares of subsidiaries and affiliates (subsidiaries 72,707 million yen and affiliates 14,295 million yen on
the balance sheet) are not described as they do not have a market price and the fair value is extremely difficult to determine.
As at 31 August 2020
The fair values of the shares of subsidiaries and affiliates (subsidiaries 117,215 million yen and affiliates 14,266 million yen on
the balance sheet) are not described as they do not have a market price and the fair value is extremely difficult to determine.

- 168 -

(Deferred taxes)
1. The breakdown of causes of deferred tax assets and deferred tax liabilities is as follows:(Millions of yen)
As at
31 August 2019
Deferred tax assets:
Provisions for bonuses

As at
31 August 2020
812

799

586
50,736890
52,766

482
321

282
1,266

Valuation differences on available-for-sale securities
Unused tax losses carried forward

765
3,638

365
4,337

Software

2,022
4,905

2,872
4,087

64,271(3,638)67,666(4,337)

Valuation allowance pertaining to total of future deductible
temporary difference(54,524)(57,544)

Valuation allowance subtotal(58,163)(61,881)

6,107

5,785

(1,893)(830)(1,893)(431)

Total deferred tax liabilities(2,723)(2,325)Net deferred tax liabilities

3,384

3,460

Depreciation
Loss on shares of subsidiaries and associates
Impairment losses
Allowance for doubtful accounts

OthersSubtotal
Valuation allowance pertaining to tax loss carried forward

Total deferred tax assets
Deferred tax liabilities:
Temporary differences on shares of subsidiaries
Others(Note) Deferred tax assets and deferred tax liabilities are recorded based on the provisions of the tax law before revision as allowed in
the provisions of the “Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to theGroup Tax Sharing System” (ASBJ PITF No. 39, 31 March, 2020).
2. The differences between the effective tax rate after applying tax effect and the statutory income tax rate are as follows:(Percentage)
As at
31 August 2019

As at
31 August 2020

Statutory income tax rate

30.6%

30.6%

(adjustments)
Non-taxable dividend income(36.3)(41.2)

Increase/(decrease) in valuation allowance
Foreign withholding tax

1.6
1.9

5.8
8.8

Others

(0.3)

0.1

(2.5)

4.1

Effective tax rates after applying tax effect accounting(Business Combination)
Not applicable.
(Notes on Significant Subsequent Events)
Not applicable.

- 169 -

(5) Supplementary schedule
Details of fixed asset(Millions of yen)
Accumulated
Depreciation, Balances as at depreciation oramortization
31 Augustamortization
during the year2020
as at 31 August
2020

Balances as at
1 September
2019

Increase

Decrease

Buildings

7,313

8,306

1,039

1,652

12,9288,661

Structures

118

1

-

11

108

261

Tools, furniture, andequipment

272

929

1

252

948

1,698

1,123

-

-

-

1,123

34

652

565

44

294

878

922

4,432

7,894

9,211

-

3,116

-

13,914

17,697

10,296

2,210

19,104

11,577

Software29,03929,821

192

12,70945,959-Software in progress

13,814

19,16029,821

-

3,153

-

60

-

45

0

14

-

42,914

48,98230,05912,70949,126-

Types of assets

Property, plant and equipment

Land
Leased assets
Construction in progress
Total property, plant andequipment
Intangible assets

OthersTotal intangible assets(Notes) 1. The main factors listed as increase during the year are as follows:
Types of assets

Amount (Millions of yen)Contents

Software29,821

Construction cost for new system

Software in progress

19,160Construction cost for new system

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

Amount (Millions of yen)
29,821- 170 -

Contents
Construction cost for new systems (transferred tosoftware as the new system was launched)Details of provisions(Millions of yen)
Categories
Allowance for doubtful accounts (current)

Balance as at
1 September
2019

Increase

Balance as at
31 August2020

Decrease

0

1

0

1

Allowance for doubtful accounts(non-current)

1,051

3,083

-

4,134

Provision for bonuses

2,676

2,621

2,676

2,621

Provision for loss on guarantees

204

190

-

394

Allowances for Affiliated Company Operating
Losses

422

278

233

466

(Note) The increase in the Allowance for doubtful accounts for the current fiscal year is mainly for affiliated companies.
(6) Main details of assets and liabilities
Omitted because the consolidated financial statements are prepared.
(7) Others
Not applicable.

- 171 -

INDEPENDENT AUDITOR’S REPORTTo the Board of Directors of FAST RETAILING CO., LTD.:

OpinionWe have audited the consolidated financial statements of FAST RETAILING CO., LTD. (the “Company”) and its subsidiaries (the“Group”), which comprise the consolidated statement of financial position as at 31 August 2020, and the consolidated statement of
profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of
the Group as at 31 August 2020, and of its consolidated financial performance and its consolidated cash flows for the year then endedin accordance with International Financial Reporting Standards (“IFRSs”).

Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We
are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics forProfessional Accountants (“IESBA Code”) together with the ethical requirements that are relevant to our audit of the consolidated
financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the
IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

- 172 -

Valuation of inventories at the lower of cost or net realizable value
Key audit matter

Audit procedures performed

As disclosed in Note 10 to the consolidated financial statements,

In response to this key audit matter, our audit included, amongst

the Group’s total inventories as at 31 August 2020 are comprised others, the following procedures:of JPY390,569 million related to the UNIQLO Japan segment,
the UNIQLO International segment and the GU segment, in theaggregate, representing 16.2% of the Group’s total assets. In• Evaluation of the cost measurement techniques and inventory
valuation approaches established by management, including

addition, the amount of write-down of inventories to net
realizable value was JPY7,389 million for these segments.

compliance with IFRSs.

The sales pattern for inventories starts with establishing an initial• Assessment of the design, implementation and operating
effectiveness of relevant controls in place to address theprice, and then subsequently adjusting the price based on theseason, weather and customer tastes and demand. Inventories areaccuracy and completeness of inputs for selling price and costof inventories.

valued at the lower of cost or net realizable value. Selling price,a component of net realizable value, is frequently adjusted in• Involvement of our professionals with expertise in information

response to fast-changing market conditions, economic
conditions and fashion trends. The adjusted selling price istechnology (“IT experts”) to evaluate the accuracy andcompleteness of inventory valuation reports by testing thereflected and maintained in an IT system.

system interface controls, the report logic and input
parameters, as well as general IT controls over the IT system,

Given the nature of the Group’s businesses, changes toinventory, such as adjustments to selling prices, are frequently

including testing of user access controls, change management
controls and IT operations controls.

made to large volumes of inventory at a Stock Keeping Units(“SKUs”) level. Inventory management is thus highly dependent• Evaluation of the determination of net realizable value and theon the IT system. In addition, the accuracy of the inventory
valuation reports is also dependent upon the IT system. As such,amount of write-down of inventories to net realizable value
calculated within the inventory valuation report on adue to the potential impact it may have on the accounting for thewrite-down of inventories to net realizable value, there arerepresentative sample basis.

increased risks around the appropriateness of the system
configurations (e.g., calculation formula, report logic,
parameters, etc.), in addition to the overall maintenance of the IT
system.
We identified the valuation of inventories at the lower of cost or
net realizable value as a key audit matter given that the value of
inventories is material and the valuation of inventories is highly
IT system dependent.

- 173 -

Assessment of impairment indicators on store assets and assumptions used in business plan under COVID-19 pandemic
Key audit matter

Audit procedures performed

As disclosed in Note 15 to the consolidated financial statements,

In response to this key audit matter, our audit included, amongst

the Group has store assets attributable to UNIQLO Japan,
UNIQLO International and the GU segment amounting toothers, the following procedures:

JPY120,354 million, JPY196,793 million and JPY39,752
million, respectively, in the aggregate representing 14.8% of the• Evaluation of management’s assessment of Impairment
Indicators, identification of CGUs and allocation method ofGroup’s total assets as at 31 August 2020. In addition, as
disclosed in Note 6 and 15 to the consolidated financial

relevant headquarter costs to each CGU used by management,
including compliance with IFRSs.

statements, the Group’s impairment losses attributable to store
assets were JPY21,411 million for the year ended 31 August• Involvement of our IT experts to evaluate the accuracy and2020.

completeness of the impairment indicators identification
reports by testing source data of store performance results

Each segment operated 767, 1,439 and 436 stores as at 31
August 2020, respectively, and the performance results of eachalong with the report logic to allocate headquarter costs, report
logic used to identify impairment indicators, and input

store are maintained in an IT system. In principle, each store isconsidered as an individual cash-generating unit (“CGU”).

parameters, as well as the general IT controls over the IT
system, including testing of user access controls, changeManagement uses the performance results of stores (IT systemgenerated reports) as a key input when assessing whether there ismanagement controls and IT operations controls.

any indication that store assets may be impaired (“Impairment
Indicators”). As such, due to the potential impact it may have on• Examination of the Impairment Indicators identification reportfor the completeness of stores for proper inclusion.

the assessment of the Impairment Indicators, there are increased
risks around the appropriateness of the system configurations• Assessment of the design, implementation and operating(e.g., report logic, parameters, etc.), in addition to the overall
maintenance of the IT system.

effectiveness of the relevant controls in place to develop
business plans of each store.

In particular, stores were temporarily closed and the number of• Evaluation of the reasonableness of assumptions used, incustomer visits declined as people refrained from going out in
response to the COVID-19 pandemic, which worsened

particular those relating to business plans of stores byperforming inquiries with management, evaluating theperformance results of each store. As a result, there are potential
risks around the existence of material impairment losses. In

historical accuracy of the management’s estimates andcomparing those assumptions with market forecasts andaddition, there are risks that the assessments of the Impairment
Indicator and the measurement of impairment losses may beobservable external information.

material due to increased uncertainties on the recovery fromCOVID-19 pandemic in particular, with regards to business• Involvement of our valuation experts to assess the discount rateused in management’s impairment assessment.

plans of each store used in management’s assessment.
• Evaluation of the adequacy of disclosures relating to the
We identified this matter as a key audit matter given that thevalue of store assets is material, the creation of information used

uncertainties of COVID-19 impact under Note 2 to theconsolidated financial statements.

in assessment of the impairment indicators is highly IT systemdependent, there is the increased possibility that the impairment
losses may be material due to COVID-19 and there is theincreased inherent uncertainty in business plans of stores used inmanagement’s estimates and judgements.

- 174 -

Measurement of right-of-use assets and lease liabilities upon first-time adoption of IFRS 16 “Leases”
Key audit matter

Audit procedures performed

As disclosed in Note 17 to the consolidated financial statements,

In response to this key audit matter, our audit included, amongst

the Group has right-of-use assets and lease liabilities attributable
to the Company and its subsidiaries, Uniqlo Co., Ltd.

others, the following procedures:(“UNIQLO Japan”) and GU Co. Ltd., (“GU Japan”), operatingin Japan, in the aggregate, amounting to JPY226,257 million and• Evaluation of the lease identification, determination of lease
period and measurement of right-of-use assets and lease

JPY244,290 million, respectively, as at 31 August 2020.

liabilities performed by management, including compliancewith the applicable international financial reporting standard.

UNIQLO Japan and GU Japan enter into lease contracts withvarious landlords, in which the contract terms are widely• Assessment of the design, implementation and operating

differentiated and total lease payments over the lease period are
significant. Meanwhile, the Company enters into lease contracts

effectiveness of the relevant controls in place to address theaccuracy of the parameters input in the IT system, in particular,

with significant lease payments over the lease period.

lease payments, lease period, penalty for termination and lease
incentives.

As disclosed in Note 4 to the consolidated financial statements,
the Company adopted IFRS 16 “Leases” (hereinafter, “IFRS• Involvement of our IT experts to evaluate the IT automated16”) for the first time in the year ended 31 August 2020. Upon
adoption of IFRS 16, most of the existing lease contracts

controls used for the measurement of right-of-use assets andlease liabilities, interface with accounting system, as well as

effective during the year were identified, measured andrecognized in the consolidated statement of financial position.

the general IT controls over the IT system, including testing ofuser access control and change management controls.

In accordance with the lease contracts, lease utilization policy• Examination of the accuracy of parameters input used inand substantial utilization, the parameters, in particular, lease
payment, lease period, penalty for lease termination, leasemeasuring right-of-use assets and lease liabilities on arepresentative sample basis.

incentives, are fundamental lease information with direct impact
on the measurement of right-of-use assets and lease liabilities.
The parameters are inputted in the IT system manually. Due to alarge volume of lease contracts and widely differentiated leaseterms, there are increased risks around the accuracy of parameter
inputted into the IT system.
In addition, the amounts of right-of-use assets and leaseliabilities are measured automatically by the IT system based on
the parameters inputted, and interface with the accounting
system. There are increased risks in accuracy of measurement ofright-of-use assets and lease liabilities because calculated
amounts are highly dependent on IT automated controls andgeneral IT controls over the IT system.
We identified measurement of right-of-use assets and leaseliabilities upon first-time adoption of IFRS 16 as a key audit
matter given that the amounts of right-of-use assets and leaseliabilities are material, numerous parameters are used in thecalculations and inputted manually, and that the calculations arehighly IT system dependent.

Other Information
Management is responsible for the other information. The other information comprises the information included in the annual report,
but does not include the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form ofassurance conclusion thereon.

- 175 -

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doingso, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Statutory Auditors and the Board of Statutory Auditors for the Consolidated
Financial Statements
Management is responsible for the preparation of the consolidated financial statements that gives a true and fair view in accordancewith IFRSs, and for such internal control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Statutory Auditors and the Board of Statutory Auditors are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout theaudit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fairpresentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Groupto express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance ofthe group audit. We remain solely responsible for our audit opinion.

- 176 -

We communicate with Statutory Auditors and the Board of Statutory Auditors regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide Statutory Auditors and the Board of Statutory Auditors with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with Statutory Auditors and the Board of Statutory Auditors, we determine those matters that were ofmost significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequencesof doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partners on the audit resulting in this independent auditor’s report are Koichi Okubo, Hirofumi Otani and Yohei
Masuda.
Deloitte Touche Tohmatsu LLC
Tokyo, Japan
27 November 2020

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(TRANSLATION)
INDEPENDENT AUDITOR’s REPORT
27 November 2020
To the Board of Directors of
FAST RETAILING CO., LTD. :Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Koichi Okubo
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Hirofumi Otani
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Yohei Masuda
Pursuant to the first paragraph of Article 193-2 of the Financial Instruments and Exchange Act, we have audited the accompanying
nonconsolidated financial statements, namely, the nonconsolidated balance sheet, and the related nonconsolidated statements ofincome and changes in net assets of FAST RETAILING CO., LTD. (the “Company”) for the 58th fiscal year from 1 September 2019
to 31 August 2020, and a summary of significant accounting policies and other explanatory information, and supplementary schedules.
Management’s Responsibility for the Nonconsolidated Financial Statements
Management is responsible for the preparation and fair presentation of these nonconsolidated financial statements in accordance withaccounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable thepreparation of nonconsolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these nonconsolidated financial statements based on our audit. We conducted our audit
in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the nonconsolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the nonconsolidated financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatementof the nonconsolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the nonconsolidated financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theentity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of the nonconsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Audit Opinion
In our opinion, the nonconsolidated financial statements referred to above present fairly, in all material respects, the financial positionof FAST RETAILING CO., LTD. , as at 31 August 2020, and the results of its operations for the year then ended in accordance withaccounting principles generally accepted in Japan.
Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure is required under the provisionsof the Certified Public Accountants Act.
The above represents a translation, for convenience only, of the original report issued in the Japanese language.

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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, its consolidated subsidiaries andassociates (hereinafter, the “Group”). The preparation and management of internal controls in connection with financial reportingare conducted 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 preventor 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 2020, 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 thisevaluation. In the evaluation of these operational processes, the selected operational processes were analyzed, and the key points ofinternal 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 the effectiveness of theinternal controls.
The scope of the evaluation of the internal controls on financial reporting is of great importance, both fiscally and qualitatively, forthe 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 the scope of theevaluation.
Regarding operational procedures, based on the results of the company-wide evaluation of internal controls, and as an indicator ofsales (adjusted to exclude intra-group sales) for each of our businesses in the fiscal year under review, those businesses that makeup roughly two-thirds of consolidated sales in the fiscal year under review are designated “important businesses. ” The selected
important businesses are evaluated in terms of broad indicators such as sales, accounts receivable, inventories and other operational
procedures. Next, the impact on the Group’s financial reports is calculated. Those operational procedures that are of particularimportance 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 at the end of the fiscal year under review.

4. Additional items
None

5. Special items
None- 180 -

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 59th fiscal year (1 September 2019 – 31 August 2020), and confirm they aretrue, based on the Financial Instruments and Exchange Law.
2. Special items
None- 181 -