Fast Retailing Co., Ltd.

Consolidated Financial Statements

for the year ended 31 August 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FAST RETAILING CO., LTD. and consolidated subsidiaries
31 August 2020 and 2021

Thousands of
Millions of yen U.S. dollars*

2020 2021 2021

ASSETS Notes
Current assets:
Cash and cash equivalents 8, 30 ¥1,093,531 ¥1,177,736 $10,716,433
Trade and other receivables 9, 30 67,069 50,546 459,934
Other financial assets 11, 30 49,890 56,157 510,983
Inventories 10 417,529 394,868 3,592,975
Derivative financial assets 30 14,413 27,103 246,621
Income taxes receivable 2,126 2,992 27,227
Other assets 12 10,629 15,270 138,948
Total current assets 1,655,191 1,724,674 15,693,124

Non-current assets:
Property, plant and equipment 13, 15 136,123 168,177 1,530,274
Right-of-use assets 15, 17 399,944 390,537 3,553,570
Goodwill 14 8,092 8,092 73,637
Intangible assets 14, 15 66,833 66,939 609,091
Financial assets 11, 30 67,770 67,122 610,759
Investments in associates accounted 16 14,221 18,236 165,933
for using the equity method
Deferred tax assets 18 45,447 37,125 337,809
Derivative financial assets 30 10,983 22,552 205,205
Other assets 12, 15 7,383 6,520 59,328
Total non-current assets 756,799 785,302 7,145,610
Total assets ¥2,411,990 ¥2,509,976 $22,838,734

LIABILITIES AND EQUITY

LIABILITIES
Current liabilities:
Trade and other payables 19, 30 ¥ 210,747 ¥ 220,057 $ 2,002,345
Other financial liabilities 11, 28, 30 213,301 104,969 955,134
Derivative financial liabilities 30 2,763 2,493 22,693
Lease liabilities 17, 28, 30 114,652 117,083 1,065,365
Current tax liabilities 22,602 38,606 351,283
Provisions 20 752 2,149 19,560
Other liabilities 12 82,636 95,652 870,359
Total current liabilities 647,455 581,012 5,286,741

Non-current liabilities
Financial liabilities 11, 28, 30 370,780 370,799 3,373,971
Lease liabilities 17, 28, 30 351,526 343,574 3,126,246
Provisions 20 32,658 39,046 355,288
Deferred tax liabilities 18 7,760 9,860 89,718
Derivative financial liabilities 30 3,205 1,042 9,490
Other liabilities 12 2,524 2,342 21,312
Total non-current liabilities 768,455 766,665 6,976,029
Total liabilities 1,415,910 1,347,678 12,262,770

EQUITY
Capital stock 21 10,273 10,273 93,484
Capital surplus 21 23,365 25,360 230,764
Retained earnings 21 933,303 1,054,791 9,597,736
Treasury stock, at cost 21 (15,129) (14,973) (136,244)
Other components of equity 21 4,749 41,031 373,354
Equity attributable to owners of the Parent 956,562 1,116,484 10,159,095
Non-controlling interests 39,516 45,813 416,868
Total equity 996,079 1,162,298 10,575,964
Total liabilities and equity ¥2,411,990 ¥2,509,976 $22,838,734
See accompanying notes to consolidated financial statements.
*Calculations are based on an exchange rate of ¥109.9 to US $1.

3
 CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FAST RETAILING CO., LTD. and consolidated subsidiaries
For the years ended August 31, 2020 and 2021

Thousands of
Millions of yen U.S. dollars*

2020 2021 2021

Notes
Revenue 22 ¥ 2,008,846 ¥ 2,132,992 $19,408,484
Cost of sales (1,033,000) (1,059,036) (9,636,367)
Gross profit 975,845 1,073,955 9,772,117

Selling, general and administrative expenses 23 (805,821) (818,427) (7,447,023)

Other income 24 7,954 18,238 165,954
Other expenses 15, 24 (28,952) (25,315) (230,353)
Share of profit and loss of associates accounted 16 321 561 5,108
for using the equity method
Operating profit 149,347 249,011 2,265,802
Finance income 25 11,228 23,859 217,098
Finance costs 25 (7,707) (6,998) (63,678)
Profit before income taxes 152,868 265,872 2,419,222
Income tax expense 18 (62,470) (90,188) (820,641)
Profit for the year 90,398 175,684 1,598,581
Profit for the year attributable to:
Owners of the Parent 90,357 169,847 1,545,471
Non-controlling interests 40 5,836 53,109
Total ¥ 90,398 ¥ 175,684 $ 1,598,581

Earnings per share

Basic (yen, dollar) 27 885.15 1,663.12 15.13
Diluted (yen, dollar) 27 ¥ 883.62 ¥ 1,660.44 $ 15.11
See accompanying notes to consolidated financial statements.
*Calculations are based on an exchange rate of ¥109.9 to US $1.

4
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FAST RETAILING CO., LTD. and consolidated subsidiaries
For the years ended August 31, 2020 and 2021
Thousands of
Millions of yen U.S. dollars*

2020 2021 2021

Notes
Profit for the year ¥ 90,398 ¥175,684 $1,598,581
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 26 (630) 541 4,930
other comprehensive income/(loss)
Total items that will not be reclassified
(630) 541 4,930
subsequently to profit or loss
Items that may be reclassified subsequently to
profit or loss
Exchange differences on 26 5,227 20,266 184,410
translating foreign operations
Cash flow hedges 26 14,130 26,333 239,617
Share of other comprehensive income/(loss) of 26 (39) 65 592
associates
Total items that may be reclassified subsequently to
¥ 19,318 ¥ 46,665 $ 424,619
profit or loss
Other comprehensive income/(loss), net of
¥ 18,687 ¥ 47,207 $ 429,550
income tax
Total comprehensive income for the year ¥109,085 ¥222,891 $2,028,131

Attributable to:
Owners of the Parent 110,134 215,309 1,959,138
Non-controlling interests (1,049) 7,582 68,993
Total comprehensive income for the year ¥109,085 ¥222,891 $2,028,131
See accompanying notes to consolidated financial statements.
*Calculations are based on an exchange rate of ¥109.9 to US $1.

5
 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FAST RETAILING CO., LTD. and consolidated subsidiaries
For the years ended August 31, 2020 and 2021

Millions of yen
Other components of equity
Financial
assets
measured at
fair value Foreign Share of other Equity
through other currency comprehensive attributable
Capital Capital Retained Treasury stock, comprehensive translation Cash-flow income of to owners Non-controlling Total
Notes stock surplus earnings at cost income/(loss) reserve hedge reserve associates Total of the Parent interests equity

As at 1 September 2019 ¥10,273 ¥20,603 ¥928,748 ¥(15,271) ¥ (697) ¥(13,929) ¥ 8,906 ¥(11) ¥ (5,732) ¥938,621 ¥44,913 ¥983,534
Effect of change in
— — (35,094) — — — — — — (35,094) (1,331) (36,426)
accounting policy
Balance after adjustment 10,273 20,603 893,653 (15,271) (697) (13,929) 8,906 (11) (5,732) 903,526 43,581 947,108
Net changes during the year
Comprehensive income
Profit for the year — — 90,357 — — — — — — 90,357 40 90,398
Other comprehensive
26 — — — — (630) 5,440 15,007 (39) 19,776 19,776 (1,089) 18,687
income/(loss)
Total comprehensive
— — 90,357 — (630) 5,440 15,007 (39) 19,776 110,134 (1,049) 109,085
income/(loss)
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
Transfer to
— — — — — — (11,008) — (11,008) (11,008) (976) (11,985)
non-financial assets
Transfer to retained earnings — — (1,713) — 1,713 — — — 1,713 — — —
Total transactions with the
— 2,761 (50,708) 142 1,713 — (11,008) — (9,294) (57,098) (3,015) (60,113)
owners of the Parent
Total net changes during the year — 2,761 39,649 142 1,082 5,440 3,998 (39) 10,482 53,036 (4,064) 48,971
As at 31 August 2020 ¥10,273 ¥23,365 ¥933,303 ¥(15,129) ¥ 385 ¥ (8,489) ¥ 12,905 ¥(51) ¥ 4,749 ¥956,562 ¥39,516 ¥996,079

Millions of yen
Other components of equity
Financial
assets
measured at
fair value Foreign Share of other Equity
through other currency comprehensive attributable to
Capital Capital Retained Treasury stock, comprehensive translation Cash-flow income of owners of the Non-controlling Total
Notes stock surplus earnings at cost income/(loss) reserve hedge reserve associates Total Parent interests equity

As at 1 September 2020 ¥10,273 ¥23,365 ¥ 933,303 ¥(15,129) ¥ 385 ¥ (8,489) ¥12,905 ¥(51) ¥ 4,749 ¥ 956,562 ¥39,516 ¥ 996,079
Net changes during the year
Comprehensive income
Profit for the year — — 169,847 — — — — — — 169,847 5,836 175,684
Other comprehensive
26 — — — — 541 18,345 26,509 65 45,461 45,461 1,745 47,207
income/(loss)
Total comprehensive
— — 169,847 — 541 18,345 26,509 65 45,461 215,309 7,582 222,891
income/(loss)
Transactions with the
owners of the Parent
Acquisition of treasury stock 21 — — — (12) — — — — — (12) — (12)
Disposal of treasury stock 21 — 1,836 — 168 — — — — — 2,005 — 2,005
Dividends 21 — — (49,015) — — — — — — (49,015) (1,867) (50,882)
Share-based payments 21 — 159 — — — — — — — 159 — 159
Transfer to
— — — — — — (8,523) — (8,523) (8,523) 67 (8,456)
non-financial assets
Transfer to retained earnings — — 655 — (655) — — — (655) — — —
Others — — — — — — — — — — 514 514
Total transactions with the
— 1,995 (48,359) 155 (655) — (8,523) — (9,179) (55,387) (1,285) (56,673)
owners of the Parent
Total net changes during the year — 1,995 121,487 155 (113) 18,345 17,985 65 36,282 159,921 6,296 166,218
As at 31 August 2021 ¥10,273 ¥25,360 ¥1,054,791 ¥(14,973) ¥ 271 ¥ 9,855 ¥30,890 ¥ 13 ¥41,031 ¥1,116,484 ¥45,813 ¥1,162,298

See accompanying notes to consolidated financial statements.

6
 Thousands of U.S. dollars*
Other components of equity
Financial
assets
measured at
fair value Foreign Share of other Equity
through other currency comprehensive attributable to
Capital Capital Retained Treasury stock, comprehensive translation Cash-flow income of owners of the Non-controlling Total
Notes stock surplus earnings at cost income/(loss) reserve hedge reserve associates Total Parent interests equity

As at 1 September 2020 $93,484 $212,606 $8,492,296 $(137,662) $ 3,505 $(77,249) $117,426 $(466) $ 43,215 $ 8,703,939 $359,571 $ 9,063,511
Net changes during the year
Comprehensive income
Profit for the year — — 1,545,471 — — — — — — 1,545,471 53,109 1,598,581
Other comprehensive
26 — — — — 4,930 166,928 241,214 592 413,666 413,666 15,883 429,550
income/(loss)
Total comprehensive
— — 1,545,471 — 4,930 166,928 241,214 592 413,666 1,959,138 68,993 2,028,131
income/(loss)
Transactions with the
owners of the Parent
Acquisition of treasury stock 21 — — — (116) — — — — — (116) — (116)
Disposal of treasury stock 21 — 16,709 — 1,534 — — — — — 18,244 — 18,244
Dividends 21 — — (445,998) — — — — — — (445,998) (16,990) (462,989)
Share-based payments 21 — 1,448 — — — — — — — 1,448 — 1,448
Transfer to
— — — — — — (77,560) — (77,560) (77,560) 613 (76,946)
non-financial assets
Transfer to retained earnings — — 5,967 — (5,967) — — — (5,967) — — —
Others — — — — — — — — — — 4,680 4,680
Total transactions with the
— 18,158 (440,031) 1,418 (5,967) — (77,560) — (83,528) (503,982) (11,696) (515,679)
owners of the Parent
Total net changes during the year — 18,158 1,105,440 1,418 (1,036) 166,928 163,654 592 330,138 1,455,155 57,296 1,512,452
As at 31 August 2021 $93,484 $230,764 $9,597,736 $(136,244) $ 2,468 $89,679 $281,080 $ 125 $373,354 $10,159,095 $416,868 $10,575,964

See accompanying notes to consolidated financial statements.

*Calculations are based on an exchange rate of ¥109.9 to US $1.

7
 CONSOLIDATED STATEMENT OF CASH FLOWS
FAST RETAILING CO., LTD. and consolidated subsidiaries
For the years ended August 31, 2021 and 2020

Thousands of
Millions of yen U.S. dollars*

Notes 2020 2021 2021

Cash flows from operating activities:
Profit before income taxes ¥ 152,868 ¥ 265,872 $ 2,419,222
Depreciation and amortization 177,848 177,910 1,618,843
Impairment losses 15 23,074 16,908 153,856
Interest and dividend income (9,724) (4,628) (42,118)
Interest expenses 7,706 6,990 63,606
Foreign exchange losses/(gains) (1,503) (19,222) (174,908)
Share of profit and loss of associates accounted
(321) (561) (5,108)
for using the equity method
Losses on disposal of property, plant and equipment 1,125 985 8,967
(Increase)/decrease in trade and other receivables (4,164) 15,334 139,533
(Increase)/decrease in inventories (2,665) 36,749 334,390
Increase/(decrease) in trade and other payables 18,600 384 3,495
(Increase)/decrease in other assets 10,686 3,494 31,796
Increase/(decrease) in other liabilities (44,567) 9,300 84,625
Others, net 8,776 153 1,398
Cash generated from operations 337,738 509,672 4,637,601
Interest and dividend income received 8,546 4,134 37,616
Interest paid (6,783) (6,101) (55,514)
Income taxes paid (75,460) (80,555) (732,987)
Income taxes refunded 827 1,818 16,549
Net cash generated by operating activities 264,868 428,968 3,903,265

Cash flows from investing activities:

Amounts deposited into bank deposits with
(88,714) (102,307) (930,912)
original maturities of three months or longer
Amounts withdrawn from bank deposits with
83,502 99,943 909,403
original maturities of three months or longer
Payments for property, plant and equipment (46,500) (56,500) (514,110)
Payments for intangible assets (21,008) (19,624) (178,563)
Payments for acquisition of right-of-use assets (1,808) (846) (7,706)
Payments for lease and guarantee deposits (7,171) (3,979) (36,212)
Proceeds from collection of lease and
6,394 4,542 41,329
guarantee deposits
Payments for acquisition of investments
— (4,232) (38,512)
in associates
Others, net (673) 407 3,711
Net cash generated by/(used in) investing activities (75,981) (82,597) (751,573)

Cash flows from financing activities:

Proceeds from short-term loans payable 28 35,019 64,247 584,603
Repayment of short-term loans payable 28 (21,546) (67,804) (616,964)
Repayment of long-term loans payable 28 (4,343) — —
Repayment of redemption of bonds 28 — (100,000) (909,918)
Dividends paid to owners of the Parent 21 (48,995) (48,993) (445,798)
Dividends paid to non-controlling interests (2,328) (2,342) (21,314)
Repayments of lease liabilities 28 (141,216) (148,248) (1,348,943)
Others, net 142 155 1,418
Net cash generated by/(used in) financing activities (183,268) (302,985) (2,756,916)
Effect of exchange rate changes on the balance
1,393 40,818 371,417
of cash held in foreign currencies
Net increase in cash and cash equivalents 7,011 84,204 766,192
Cash and cash equivalents at the beginning of year 8 1,086,519 1,093,531 9,950,241
Cash and cash equivalents at the end of year 8 ¥1,093,531 ¥1,177,736 $10,716,433
See accompanying notes to consolidated financial statements.
*Calculations are based on an exchange rate of ¥109.9 to US $1.

8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FAST RETAILING CO., LTD. and consolidated subsidiaries

1 Reporting Entity The estimates and underlying assumptions are reviewed

on an ongoing basis. The effects of the review of accounting
FAST RETAILING CO., LTD. is a company incorporated in estimates are recognized in the accounting period in which
Japan. The locations of the registered headquarters and the estimates were reviewed and in future accounting
principal offices of the Company are disclosed at the Group’s periods.
website (http://www.fastretailing.com/eng/). Information about important estimates and judgments
The principal activities of the Group are the UNIQLO that have significant effects on the amounts recognized in
business (casual wear retail business operating under the the consolidated financial statements is as follows:
“UNIQLO” brand in Japan and overseas), GU business • Valuation of inventories (3. Significant Accounting Policies F.
(casual wear retail business operating under the “GU” brand and Note 10)
in Japan and overseas) and Theory business (apparel •V  aluation of property, plant and equipment, and right-of-use
designing and retail business in Japan and overseas), etc. assets (3. Significant Accounting Policies J. and Note 15)
•R  ecoverability of deferred tax assets (3. Significant
Accounting Policies N. and Note 18)
2 Basis of Preparation •A  ccounting treatment and valuation of provisions (3.
Significant Accounting Policies K. and Note 20)
(1) Compliance with IFRS •F  air value measurement of financial instruments (3.
The consolidated financial statements of the Group have Significant Accounting Policies D. and Note 30)
been prepared in compliance with IFRS issued by the IASB. With the global spread of COVID-19, the Group’s perfor-
The Group meets all criteria of a “specified company” mance has been adversely affected due to temporarily clos-
defined under Article 1-2 of the Rules Governing Term, Form, ing stores, etc. Regarding impairment to our non-financial
and Preparation of Consolidated Financial Statements assets, in the previous consolidated fiscal year, we had
accordingly, applies Article 93 of the Rules Governing Term, assumed that the impact of the COVID-19 pandemic would
Form, and Preparation of Consolidated Financial Statements. continue to be felt through to the end of August 2021, on the
basis of the assumption that business activities would gradu-
(2) Approval of the Consolidated Financial Statements ally return to normal. However, in the current consolidated
The consolidated financial statements were approved on 26 fiscal year, there continues to be uncertainty around the
November 2021 by Tadashi Yanai, Chairman, President, and future economic outlook owing to concerns such as the
CEO, and Takeshi Okazaki, Group Senior Vice President and spread of the virus, and the timing for the situation subsiding
CFO. differs from region to region and on a case-by-case basis. As
such, we made accounting estimates involving the assump-
(3) Basis of Measurement tion that the impact will last until the end of August 2022 for
The consolidated financial statements have been prepared most countries and regions including Japan, with the situa-
on a historical cost basis, except for certain assets, liabilities, tion taking longer to get under control for stores in certain
and financial instruments which are measured at fair value as other countries and regions.
indicated in “3. Significant Accounting Policies.”
(6) Basis of Financial Statement Translation
(4) Functional Currency and Presentation Currency The accompanying consolidated financial statements are
The presentation currency for the Group’s consolidated expressed in yen, and solely for the convenience of the
financial statements is yen (in units of millions of yen), which reader, have been translated into United States (U.S.) dollars
is also the Company’s functional currency. All values are at the rate of ¥109.90=$1, the approximate exchange rate
rounded down to the nearest million yen, except when other- prevailing on the Tokyo Foreign Exchange Market at 31
wise indicated. August 2021. This translation should not be construed as a
representation that any amounts shown could be converted
(5) Use of Estimates and Judgments into U.S. dollars at that or any other rate.
The preparation of the consolidated financial statements in
accordance with IFRS requires management to make judg-
ments, estimates, and assumptions that affect the applica-
tion of accounting policies and the reported amounts of
assets and liabilities, income and expenses. Actual results
may differ from these estimates.

9
 3 Significant Accounting Policies associates are accounted for applying the equity method,
and measured at historical cost at the time of acquisition.
A. Basis of Consolidation Thereafter the carrying amount of the investment is
(1) Subsidiaries adjusted to recognize changes in the Group’s share of net
A subsidiary is an entity (including a structured entity), directly assets of the associate since acquisition date. The consoli-
or indirectly, controlled by the Company. The Group controls dated statement of profit or loss reflects the Group’s share of
enterprises when it is exposed, or has rights, to variable the results of operations of the associate. Any change in
returns arising from its involvement in those enterprises or other comprehensive income of those investees is presented
when the Group has rights to variable returns in those enter- as part of the Group’s other comprehensive income.
prises and is able to have an impact on said variable returns Unrealized gains and losses resulting from transactions
through its power over those enterprises. A subsidiary’s between the Group and the associate are eliminated to the
financial statements are incorporated into the Group’s con- extent of the interest in the associate.
solidated financial statements from the date on which the The number of associates as at 31 August 2021 is three.
Group, obtains control until the date that control ceases.
The subsidiaries adopted the consistent accounting poli- B. Business combinations
cies as the Company in the preparation of their financial Business combinations are accounted for using the acquisi-
statements. All intra-group balances, transactions within the tion method. The cost of an acquisition is measured at the
Group as well as unrealized profit and loss resulting from aggregation of the acquisition date fair values of assets trans-
transactions within the Group are eliminated at the time of ferred, liabilities assumed, and equity interests issued by the
preparation of the consolidated financial statements. Company in exchange for control of the acquired company.
The statutory fiscal year end dates for FAST RETAILING If the cost of an acquisition exceeds the fair value of the
(CHINA) TRADING CO., LTD., UNIQLO TRADING CO., LTD., identifiable assets and liabilities, the excess is recorded as
FAST RETAILING (SHANGHAI) TRADING CO., LTD., GU goodwill on the consolidated statement of financial position.
(Shanghai) Co., Ltd. and 11 other companies vary between If it is below the fair value, the difference is immediately
31 December, 31 March and 30 June. recorded as gains on the consolidated statement of profit or
Management prepares the financial statements of these loss.
subsidiaries as at the Group’s year-end solely for the Group’s Acquisition-related costs are expensed as incurred.
consolidation purpose. Additional acquisitions of non-controlling interests are
The financial statements of other subsidiaries are pre- accounted for as equity transactions, and no goodwill is
pared using the same reporting period as the Parent recognized.
company. Contingent liabilities of acquired companies are recog-
A change in the ownership interest of a subsidiary, with- nized in a business combination only if they are present obli-
out a loss of control, is accounted for as an equity gations, were incurred as a result of a past event, and their
transaction. fair value can be reliably measured.
Any difference between the adjustment to the non- For each business combination, the Group elects
controlling interest and the fair value of the consideration whether to measure the non-controlling interests in the
received is recognized directly in equity as interests attribut- acquiree at fair value or at the proportionate share of the
able to owners of the Parent. acquiree’s identifiable net assets.
Profit or loss and each component of other comprehen- If the initial accounting for a business combination is
sive income are attributed to the owners of the Parent and to incomplete by the reporting date of the fiscal year in which
the non-controlling interests, even if this results in the non- the business combination occurs, the items for which the
controlling interests having a deficit balance. acquisition accounting is incomplete are reported using pro-
The number of consolidated subsidiaries as at 31 August visional amounts. Those amounts provisionally recognized
2021 is 130. on the acquisition date are retrospectively adjusted to reflect
new information as if the acquisitions took place during the
(2) Investments in associates measurement period, had facts and circumstances that
An associate is an entity in which the Group has significant existed at the acquisition date been known at that time, they
influence over the financial and operating policies. would have affected the amounts recognized on that date.
If the Group holds 20% or more of the voting rights of Additional assets and liabilities are recognized if new infor-
another enterprise, it is presumed that the Group has a sig- mation results in the recognition of additional assets or liabili-
nificant influence over the other enterprise. Investments in ties. The measurement period should be within one year.

10
C. Foreign Currencies satisfied:
(1) Transactions and balances •A ssets are held based on a business model that requires
Transactions in foreign currencies are initially recorded by the them to be held to collect contractual cash flow
Group’s entities at their respective functional currency spot •C ash flow, made up solely of payment of the principal and
rates at the date the transaction first qualifies for recognition. interest on the balance of principal, is generated on a
Monetary assets and liabilities denominated in foreign specified day under the contractual terms of the financial
currencies are translated at the functional currency spot asset.
rates of exchange at the reporting date. Differences arising Financial assets other than financial assets measured at
from settlement or translation of monetary items are recog- amortized cost are classified as financial assets measured at
nized in profit or loss. fair value. Apart from equity instruments held for trading pur-
Non-monetary items that are measured in terms of his- poses, which must be measured at fair value through Profit
torical cost in a foreign currency are translated using the or Loss, other equity instruments measured at fair value are
exchange rates at the dates of the initial transactions. Non- designated as either being measured at fair value through
monetary items measured at fair value in a foreign currency Profit or Loss or alternatively measured at fair value through
are translated using the exchange rates at the date when the Other Comprehensive Income; this is done for each individ-
fair value is determined. The gain or loss arising on transla- ual equity instrument and the designation is continuously
tion of non-monetary items measured at fair value is treated applied to the instrument thereafter.
in line with the recognition of gain or loss on change in fair
value of the item (i.e., translation differences on items whose (b) Subsequent measurement
fair value gain or loss is recognized in other comprehensive Measurement after the initial recognition of financial assets is
income or profit or loss are also recognized in other compre- carried out as follows in accordance with the classification.
hensive income or profit or loss, respectively). ( i ) Financial assets measured at amortized cost
Financial assets measured at amortized cost are mea-
(2) Foreign Operations sured at amortized cost using the effective interest
Upon consolidation, the assets and liabilities of foreign oper- method.
ations are translated into yen at the rate of exchange prevail- (ii) Financial assets measured at fair value
ing at each reporting date and their statements of profit or The fluctuation in the fair value of financial assets mea-
loss are translated at average exchange rates during the sured at fair value is recognized as profit or loss.
period. The exchange differences arising on translation for However, any fluctuation in the fair value of equity finan-
consolidation are recognized in other comprehensive cial instruments designated as instruments to be mea-
income. On disposal of a foreign operation, the component sured at fair value through other comprehensive income,
of other comprehensive income relating to that particular for- is recognized as other comprehensive income; and if rec-
eign operation is recognized in profit or loss. ognition is suspended or if the fair value significantly
drops, then it is transferred to Retained earnings. Note
D. Financial Instruments that dividends from the financial assets are recognized as
(1) Non-derivative financial assets profit or loss as part of finance income.
(a) Initial recognition and measurement
The Group classifies financial assets as “financial assets (c) Impairment of financial assets
measured at fair value through profit or loss”; “financial For financial assets measured at amortized cost, expected
assets measured at fair value through other comprehensive credit losses pertaining to the financial assets are recognized
income” or “financial assets measured at amortized cost”; as allowances for doubtful accounts.
and that classification is determined at the time of initial On each reporting date, the credit risk pertaining to each
recognition. financial asset is evaluated to see if it has increased signifi-
The Group carries out initial recognition on the date of cantly since initial recognition and, if it has, then the expected
the transaction, when it becomes party to the contract credit losses for the entire period are recognized as an allow-
related to the financial asset(s). ance for doubtful accounts; whereas if it has not, then the
All financial assets are measured by adding directly linked expected credit losses for a 12-month period are recognized
transaction costs to fair value, except those in the category as an allowance for doubtful accounts.
classified as measured at fair value through profit or loss. At the time of an evaluation, if the contractual payment
Financial assets are classified as financial assets mea- due date has passed then, in principle, it will be assumed
sured at amortized cost, if the following requirements are that the credit risk has significantly increased; however, when

11
 the evaluation takes place, other information that can be rea- (c) Derecognition of financial liabilities
sonably used and used as support is taken into account. The Group derecognizes a financial liability when it is extin-
However, trade receivables, etc., that do not include any guished, that is, when the obligation specified in the contract
major financial elements are always recognized as being an is either discharged, cancelled, or expired.
amount equivalent to expected credit loss for the entire
period. If the issuer or debtor is in serious financial difficulties (3) Presentation of financial assets and financial liabilities
or is subject to a legal or formal business failure, then it is The balance of financial assets and financial liabilities is offset
judged that there has been a default on obligations. And if it on the consolidated statement of financial position and the
is judged that there has been a default on obligations, then net amount is presented only in cases in which the Group
the assets are treated as credit-impaired financial assets. has the right to legally enforce offsetting the balances and
Irrespective of the above, if it is reasonably judged that all also intends to settle the net amount, or realize assets and
or part of financial assets cannot be collected due to our settle liabilities, at the same time.
legal rights of claim being terminated or similar, then the
book value of the financial assets is directly amortized. (4) Derivative financial instruments and hedge accounting
The Group uses derivative financial instruments, such as for-
(d) Derecognition of financial assets ward currency contracts, to hedge its foreign currency risks.
The Group derecognizes a financial asset only if the contrac- Such derivative financial instruments are initially recognized
tual rights to the cash flows from the financial asset expire or at fair value on the date on which a derivative contract is
if the Group has transferred almost all risks and rewards of entered into and are subsequently re-measured at fair value.
ownership. If the Group maintains control of the transferred Derivatives are carried as financial assets when the fair value
financial asset, it recognizes the asset and associated liabili- is positive and as financial liabilities when the fair value is
ties to the extent of its continuing involvement. negative.
Any gains or losses arising from changes in the fair value
(2) Non-derivative financial liabilities of derivatives are taken directly to profit or loss, except for
(a) Initial recognition and measurement the effective portion of cash flow hedges, which is recog-
Corporate bonds and loans, etc., are initially recognized by nized in other comprehensive income and later reclassified to
the Group on their effective date; and other financial liabilities profit or loss when the hedge item affects profit or loss.
are initially recognized on their transaction date. Financial lia- At the inception of a hedge relationship, the Group for-
bilities are either classified as financial liabilities measured at mally designates and documents the hedge relationship to
fair value through profit or loss or financial liabilities measured which the Group wishes to apply hedge accounting and the
at amortized cost, and this classification is determined at the risk management objectives and strategy for undertaking the
time of initial recognition. All financial liabilities are initially hedge. The documentation includes identification of the spe-
measured at fair value, but financial liabilities measured at cific hedging instrument, the hedged item or transaction, the
amortized cost are measured using the amount obtained nature of the risk being hedged, and how the entity will
after deducting directly attributable transaction costs. assess the hedging instrument’s effectiveness in offsetting
the exposure to changes in the hedged item’s fair value or
(b) Subsequent measurements cash flows attributable to the hedged risk. Such hedges are
For measurements made after the initial recognition of a expected to be highly effective in achieving offsetting
financial liability, any financial liabilities measured at fair value changes in fair value or cash flows and are assessed on an
through profit or loss include financial liabilities held for trad- ongoing basis to determine that they actually have been
ing purposes and financial liabilities specified at the time of highly effective throughout the financial reporting periods for
initial recognition as measured at fair value through profit or which they were designated.
loss; and when these liabilities are measured at fair value The Group has designated forward currency contracts as
after initial recognition, any changes are recognized as profit cash flow hedges and are accounted for as described below:
or loss for the current period. Any financial liabilities mea-
sured at amortized cost are measured after initial recognition Cash flow hedges
at amortized cost using the effective interest method. Any For gains and losses on hedges, effective portions are rec-
gains or losses made in the event of amortization using the ognized as other comprehensive income, and non-effective
effective interest method and the derecognition of a liability portions are immediately recognized as profit or loss on the
are recognized as profit or loss for the current period as part Consolidated Statement of Profit or Loss.
of finance costs. Amounts pertaining to hedges that are included as other

12
comprehensive income are transferred to profit or loss at the The useful lives, residual values, and depreciation meth-
point in time when the hedged trades have an impact on ods are reviewed at each reporting date, with the effect of
profit or loss. If a transaction is planned that will generate any changes in estimates being accounted for on a prospec-
recognition of hedged assets or liabilities of a non-financial tive basis.
nature, then the amount that is recognized as other compre-
hensive income is processed as a correction of the initial H. Goodwill and intangible assets
book value for the non-financial asset or liability. (1) Goodwill
If the forecast transaction or firm commitment is no longer Goodwill is stated at the carrying amount, which is the acqui-
expected to occur, cumulative profit or loss amounts previ- sition cost after deducting accumulated impairment losses.
ously recognized in equity through other comprehensive Goodwill represents the excess amount of the historical cost
income are reclassified as profits or losses. If the hedging of an interest acquired by the Group over the net amount of
instrument expires or is sold, is terminated or exercised with- the fair value of the identifiable assets acquired and liabilities
out replacement or rollover, or if its designation as a hedge is assumed.
revoked, the amounts previously recognized in equity through Goodwill is not amortized but is allocated to identifiable
other comprehensive income are recorded as equity until the CGU based on the geographical region where business
forecast transaction occurs or firm commitment is met. takes place and the type of business conducted, and then
tested for impairment each year or when there is an indica-
E. Cash and cash equivalents tion that it may be impaired. Impairment losses on goodwill
Cash and cash equivalents comprise cash on hand, bank are recognized in the consolidated statement of profit or loss
deposits available for withdrawal on demand, and short- and cannot be subsequently reversed in future periods.
term, highly liquid investments due with a maturity of three
months of the acquisition date or less that are readily con- (2) Intangible assets
vertible to cash and which are subject to an insignificant risk Intangible assets are measured at cost, with any accumu-
of changes in value. lated amortization and accumulated impairment losses
deducted from the historical cost to arrive at the stated car-
F. Inventories rying amount.
Inventories are valued at the lower of cost and net realizable Intangible assets acquired separately are measured at
value; the weighted average method is principally used to cost at initial recognition, and the cost of intangible assets
determine cost. Net realizable value is based on the esti- acquired in a business combination is measured as fair value
mated selling price in the ordinary course of business less at the acquisition date.
any estimated costs to sell. For internally generated intangible assets, the entire
amount of the expenditure is recorded as an expense in the
G. Property, plant and equipment period in which it arises, except for development expenses
(1) Recognition and measurement that meet the requirements for capitalization.
Property, plant and equipment are measured at cost less Intangible assets with finite useful lives are amortized over
accumulated depreciation and any accumulated impairment their respective estimated useful lives using the straight-line
losses. The cost of an item of property, plant and equipment method, and they are tested for impairment when there is an
comprises its purchase price and any directly attributable indication that they may be impaired. The estimated useful
costs of bringing the asset to its working condition and loca- life and amortization method for an intangible asset with a
tion for its intended use, the initial estimate of the costs of finite useful life is reviewed at the end of each reporting
dismantling and removing the item and restoring the site on period, and any changes are applied prospectively as a
which it is located. change in accounting estimate.
The estimated useful lives of the main intangible assets
(2) Depreciation with finite useful lives are as follows:
Assets other than land and construction in progress are • Software for internal use Length of time it is usable
depreciated using the straight-line method over the esti- internally (3 to 5 years)
mated useful lives shown below: Intangible assets with indefinite useful lives and intangible
Buildings and structures 3-30 years assets that are not yet available for use are not amortized.
Machinery and equipment 10 years They are tested for impairment annually or when there is an
Furniture, fixtures and vehicles 5 years indication that they may be impaired, either individually or at
the CGU level.

13
 I. Leases J. Impairment
(1) As Lessee The carrying amounts of the Group’s non-financial assets,
Right-of-use assets are initially measured at cost at the com- excluding inventories and deferred tax assets, are reviewed
mencement date of their lease. The cost includes the to determine whether there is any indication of impairment at
amount of the initial measurement of the lease liability, any each reporting date. If there is any indication of impairment,
lease payments made at or before the commencement date, the recoverable amount for the asset is estimated. For good-
less any lease incentives received, and any initial direct costs will, intangible assets with indefinite useful lives, and intangi-
incurred. ble assets that are not yet available for use, the recoverable
After the initial measurement, right-of-use assets are amount is estimated each year at the same time.
depreciated over the lease term using the straight-line The recoverable amount for an asset or CGU is the
method. The lease term is determined as the non-cancella- higher of value-in-use and fair value less costs of disposal.
ble period together with periods covered by an option to ter- The fair value less costs of disposal calculation is based on
minate the lease if the lessee is reasonably certain not to current market transactions. However, if the observable
exercise that option. The right-of-use assets are measured at market transactions are not available, appropriate valuation
cost less accumulated depreciation and any accumulated model is used. In assessing value-in-use, the estimated
impairment losses. future cash flows are discounted to their present value using
Lease liabilities are initially measured at the present value a pre-tax discount rate that reflects the time value of money
of the lease payments that are not paid at the commence- and the risks specific to the asset.
ment date. The lease payments are discounted using the A CGU is the smallest identifiable group of assets which
interest rate implicit in the lease, if that rate can be readily generates cash inflows from continuing use which are largely
determined. If that rate cannot be readily determined, the independent of the cash inflows from other assets or groups
incremental borrowing rate is used. of assets.
The lease payments included in the measurement of the The CGU (or group of CGUs) for goodwill is determined
lease liability comprise the fixed payments and payments of based on the unit by which the goodwill is monitored for
penalties for terminating the lease, if the lease term reflects internal management purposes and must not be larger than
the exercising an option to terminate the lease. an operating segment before aggregation.
Subsequent to initial recognition, lease liabilities are mea- Because the corporate assets do not generate indepen-
sured at amortized cost using the effective interest method. dent cash inflows, if there is an indication that corporate
Lease liabilities are remeasured if there is a change in future assets may be impaired, the recoverable amount is deter-
lease payments resulting from a change in an index or a rate, mined for the CGU to which the corporate assets belong.
or a change in the assessment of possibility of exercising a If the carrying amount of an asset or a CGU exceeds the
termination option. recoverable amount, an impairment loss is recognized in
If a lease liability is remeasured, the amount of the remea- profit or loss for the period. Impairment losses recognized in
surement of the lease liability is recognized as an adjustment relation to a CGU are first allocated to reduce the carrying
to the right-of-use asset. amount of any goodwill allocated to the CGU and then allo-
cated to the other assets of the CGU pro rata on the basis of
(2) As Lessor their carrying amounts.
For leases where the Group is the lender, each lease is clas- An impairment loss related to goodwill cannot be
sified as either a finance lease or an operating lease at the reversed in future periods. Previously recognized impairment
time that the lease is agreed. losses on assets other than goodwill are reviewed at each
In classifying each lease, the Group comprehensively reporting date to determine whether there is any indication
evaluates whether or not the risks and economic value asso- that a loss has decreased or no longer exists. A previously
ciated with ownership of the underlying assets all transfer recognized impairment loss is reversed only if there has been
substantively. If they do transfer, the lease is classified as a a change in the assumptions used to determine the asset’s
finance lease; otherwise, it is classified as an operating lease. recoverable amount since the last impairment loss was rec-
Leases in which the Group acts as lender all correspond to ognized. The reversal is limited so that the carrying amount
subleases in which the Group acts as an intermediate lender. of the asset does not exceed its recoverable amount, nor
Head leases and subleases are accounted separately. In its exceed the carrying amount that would have been deter-
consolidated financial statement, the Group includes lender mined, net of depreciation, had no impairment loss been
finance leases pertaining to relevant subleases in “other cur- recognized for the asset in prior years.
rent financial assets and “non-current financial assets.”

14
K. Provisions share subscription rights (stock options) to employees of the
Provisions are recognized when the Group has a present Company and its subsidiaries. In doing so, the Group aims
legal or constructive obligation as a result of a past event, it to heighten morale and motivate employees to improve the
is probable that an outflow of resources embodying eco- Group’s business performance, thereby increasing share-
nomic benefits will be required to settle the obligation, and a holder value by reinforcing business development that is
reliable estimate can be made of the amount of the obliga- focused on the interests of the shareholders. These share-
tion. Provisions are recognized as the best estimate of the based payments do this by rewarding contributions to the
expenditure required to settle the present obligation (future Group’s profit and by connecting the benefits received by
cash flows), taking into account the risks and uncertainties these individuals to the Company’s stock price.
surrounding the obligation at each reporting date. Stock options are measured at fair value based on the
If the time value of money is material, provisions are mea- price of the Company’s shares on the grant date. Fair value
sured as the estimated future cash flows discounted to the of stock options is further disclosed in “29. Share-based
present value using a pre-tax rate that reflects, when appro- Payments.”
priate, the time value of money and the risks specific to the The fair value of the stock options determined at the
liability. When discounting is used, the increase due to the grant date is expensed, together with a corresponding
passage of time is recognized as a finance cost. increase in capital surplus in equity, over the vesting period
Provision is described below: on a straight-line basis, taking into consideration the Group’s
best estimates of the number of stock options that will ulti-
Asset retirement obligations mately vest.
The obligations to restore property to its original state under
real estate leasing agreements for offices, such as corporate M. Revenue recognition
headquarters and stores, are estimated and recorded as a The Group recognizes revenue in accordance with IFRS 15
provision. The expected length of use is estimated as the Revenue from Contracts with Customers by applying the fol-
time from acquisition to the end of the useful life, and dis- lowing five-step approach:
count rates ranging between (0.32)-1.00% are generally Step 1: Identify the contract(s) with a customer
used in calculations. Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
L. Employee benefits Step 4: A llocate the transaction price to the performance
(1) Defined contribution system obligations in the contract
We have adopted a defined contribution pension plan for Step 5: R ecognize revenue when (or as) the entity satisfies a
employees of the Company and certain subsidiaries. performance obligation
The defined contribution pension plan is a post-
retirement benefit plan in which the employer contributes a The Group, as a global clothing retailer, recognizes revenue
certain amount of contributions to other independent com- when it satisfies its performance obligation by transferring
panies and is not subject to legal or presumptive obligation the promised goods to the customer. An asset is transferred
on payment beyond those contributions. when the customer obtains control of that asset. In addition,
Contributions to the defined contribution pension plan the Group recognizes revenue at the amount of the promised
are charged to expense during the period in which employ- consideration that the customer would pay in accordance
ees provide services. with a contract, less the sum of discounts, rebates and
refunds or credits.
(2) Short-term employee benefits
For short-term employee benefits, no discount calculation is N. Income taxes
made and expenses are recorded when employees provide Income taxes comprise current and deferred taxes and these
related services. are recognized in profit or loss, except taxes arising from
For bonuses and paid leave expenses, we have legal or items that are recognized as other comprehensive income.
presumptive obligations to pay them and recognize as liabili- Current taxes are measured at the amount expected to
ties the amount estimated to be paid based on those plans if be paid to (or recovered from) taxation authorities on taxable
reliable estimates are possible. income or loss for the current year, using the rates that have
been enacted or substantively enacted by each reporting
(3) Share-based payments date in the countries where the Group operates and gener-
The Group grants share-based payments in the form of ates taxable income, with adjustments to tax payments in

15
 past periods. reporting date. Deferred tax assets and liabilities are offset
Through the use of an asset and liability approach, when there is a legally enforceable right to offset current tax
deferred tax assets and liabilities are recorded for the tempo- assets and liabilities and when income taxes are levied by
rary differences between the carrying amounts of assets and the same taxation authority on either the same taxable entity
liabilities for accounting purposes and the amounts of assets or on different taxable entities which intend either to settle
and liabilities for tax purposes. Deferred tax assets and liabili- current tax assets and liabilities on a net basis, or to realize
ties are not recognized for temporary differences under any the assets and settle the liabilities simultaneously.
of the following circumstances: Deferred tax assets are recognized for unused tax losses,
• Temporary differences arising from goodwill; tax credits, and deductible temporary differences to the
• Temporary differences arising from the initial recognition of extent that it is probable that future taxable profits will be
an asset / liability which, at the time of the transaction, available against which they can be utilized. Deferred tax
does not affect either the accounting profit or the taxable assets are reviewed at each reporting date and reduced to
income (other than in a business combination); or the extent that it is no longer probable that the related tax
• Temporary differences associated with investments in sub- benefits will be realized.
sidiaries, but only to the extent that it is possible to control
the timing of the reversal of the differences and it is proba- O. Earnings per share
ble that the reversal will not occur in the foreseeable future. Basic earnings per share is calculated by dividing profit or
The consolidated taxation system is applied for the loss attributable to common shareholders of the Parent by
Company and 100% owned subsidiaries in Japan. the weighted-average number of common stocks outstand-
Deferred tax assets and liabilities are measured at the tax ing during the period, adjusted for treasury stock. Diluted
rates that are expected to apply in the year when the tempo- earnings per share is calculated by adjusting for all dilutive
rary difference is realized or settled, based on tax laws that potential ordinary shares having a dilutive effect.
have been enacted or substantively enacted by each

4 Newly Applied Standatds and Interpretation Guidelines

The Group shall apply the written standards below, with effect from the current consolidated accounting year.
IFRS Title Summary
IFRS 16 Leases Amendments to accounting treatment for COVID-19-related rent concessions

Application of amendments to IFRS 16 Leases

In accordance with the amendment to IFRS 16 Leases (“IFRS 16”) issued in May 2020, rent concessions arising as a direct
result of the COVID-19 pandemic were not being considered as lease modifications, and were accounted for as variable lease
payments.
In conjunction with the amendment to paragraph 46B(b) of IFRS 16 issued in March 2021, similar rent concessions are
continued to be accounted in a same way if all of the following conditions are met

• The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than,
the consideration for the lease immediately preceding the change
• Any reduction in lease payments affects only payments originally due on or before 30 June 2022.
• There is no substantive change to other terms and conditions of the lease.

Any recognized gains or losses from rent concessions, that are not accounted for as lease modification, did not have a signifi-
cant impact on the Group’s consolidated financial statements.

16
 5 Issued But Not Yet Effective IFRS, Not-yet-applied New Standards and Interpretation Guidelines

New written standards and new interpretation to existing standards guidelines that were either newly established or revised by
the date the consolidated financial statements were approved, the main standards that the Company has not applied, as of 31
August 2021, are stated below.
Mandatory adoption date The Group’s
IFRS Title Summary
(year beginning on) adoption date
International Accounting Fiscal year ending Deferred tax related to assets and liabilities
Income Taxes 1 January 2023
Standards (“IAS”) 12 31 August 2024 arising from a single transaction

The Company is in the process of assessing the impact of the adoption of the above standards on the Group’s consolidated
financial statements.

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, UNIQLO
International, GU and Global Brands, each of which is used to frame and form the Group’s strategy.
The main businesses covered by each reportable segment are as follows:
UNIQLO Japan: UNIQLO clothing business within Japan
UNIQLO International: UNIQLO clothing business outside of Japan
GU: GU brand clothing business in Japan and overseas
Global Brands: Theory, PLST, COMPTOIR DES COTONNIERS, PRINCESSE TAM.TAM, and J Brand clothing operations

J Brand Inc. has been excluded from the Fast Retailing Group consolidated scope following the completion of corporate liqui-
dation proceedings on 5 August 2021.

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 2020
(Millions of yen)
Reportable segments Consolidated
Others Adjustments
UNIQLO UNIQLO Global Total Statement of
GU (Note 1) (Note 2)
Japan International Brands Profit or Loss
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
Segment income/(loss)
(i.e., profit/(loss) before income 104,648 50,417 21,581 (13,226) 163,421 (79) (10,473) 152,868
taxes)
Other disclosure:
Depreciation and amortization 52,997 70,524 21,574 10,473 155,569 11 22,267 177,848
Impairment losses (Note 3) 2,413 15,847 1,305 3,523 23,090 13 (28) 23,074
Notes: 1. “Others” includes the real estate leasing business, etc.
2. “Adjustments” primarily includes revenue and corporate expenses which are not allocated to individual reportable segments.
3. Details on the Impairment losses are stated in note “15 Impairment losses”.

17
 Year ended 31 August 2021
(Millions of yen)
Reportable segments Consolidated
Others Adjustments
UNIQLO UNIQLO Global Total Statement of
GU (Note 1) (Note 2)
Japan International Brands Profit or Loss
Revenue ¥842,628 ¥930,151 ¥249,438 ¥108,204 ¥2,130,423 ¥2,569 ¥ — ¥2,132,992
Operating profit/(loss) 123,243 111,203 20,175 (1,637) 252,985 91 (4,065) 249,011
Segment income/(loss)
(i.e., profit/(loss) before income 125,888 109,475 20,075 (2,093) 253,345 93 12,432 265,872
taxes)
Other disclosure:
Depreciation and amortization 52,717 69,326 19,915 9,107 151,067 9 26,833 177,910
Impairment losses (Note 3) 4,697 7,755 1,500 3,139 17,092 — (183) 16,908
Notes: 1. “Others” includes the real estate leasing business, etc.
2. “Adjustments” primarily includes revenue and corporate expenses which are not allocated to individual reportable segments.
3. Details on the Impairment losses are stated in note “15. Impairment losses”.

D. Geographic Information 8 Cash and Cash Equivalents

Year ended 31 August 2020
(1) External Revenue The breakdown of cash and cash equivalents as at each
(Millions of yen)
year end is as follows:
Japan PRC Overseas (Others) Total (Millions of yen)
¥1,082,243 ¥380,998 ¥545,604 ¥2,008,846
As at As at
31 August 2020 31 August 2021

(2) Non-current assets (excluding financial assets, invest- Cash and bank balances ¥ 947,566 ¥1,031,286
Money market funds (MMF),
ments in associates accounted for using the equity 145,965 146,449
negotiable certificates of deposits
method and deferred tax assets) Total ¥1,093,531 ¥1,177,736
(Millions of yen)
United States
Japan Overseas (Others) Total
of America
¥343,489 ¥82,468 ¥192,418 ¥618,376 9 Trade and Other Receivables

Year ended 31 August 2021 The breakdown of trade and other receivables as at each
(1) External revenue year end is as follows:
(Millions of yen) (Millions of yen)
Japan PRC Overseas (Others) Total As at As at
¥1,119,207 ¥457,571 ¥556,213 ¥2,132,992 31 August 2020 31 August 2021
Accounts receivable – trade ¥55,195 ¥41,072
Other accounts receivable 10,919 8,405
(2) Non-current assets (excluding financial assets, invest-
Lease receivable 1,499 1,514
ments in associates accounted for using the equity Allowance for doubtful accounts (544) (445)
method and deferred tax assets) Total ¥67,069 ¥50,546
(Millions of yen)
United States
Japan Overseas (Others) Total See note “30. Financial Instruments” for credit risk manage-
of America
¥351,808 ¥69,547 ¥218,910 ¥640,266 ment and the fair value of trade and other receivables.
The above classifications of financial assets are all finan-
cial assets measured at amortized cost.
7 Business Combination The above Accounts receivable — trade are mainly rec-
ognized as revenue at the time of delivery of the clothing
In the Group, there are no significant transactions both indi- because the customer is deemed to have gained control of
vidually and in the aggregate, and the information is omitted. 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 obliga-
tions based on separately specified payment conditions.
Because the period from fulfillment of the performance

18
obligations to receipt of consideration is normally within one (Millions of yen)

year, the receivables are not adjusted as material financial As at As at

31 August 2020 31 August 2021
elements using the convention method.
Other financial liabilities:
Financial liabilities measured at
amortized cost
10 Inventories Interest-bearing bank and
¥484,496 ¥382,634
other borrowings (Note)
The breakdown of inventories as at each year end is as Deposits 98,156 91,805
Deposits/guarantees received 1,428 1,328
follows:
(Millions of yen) Total 584,082 475,768
Other current financial liabilities total 213,301 104,969
As at As at
31 August 2020 31 August 2021 Other non-current
370,780 370,799
Products ¥411,563 ¥389,104 financial liabilities total
Materials and supplies 5,965 5,763 Note: Interest-bearing bank and other borrowings include corporate bonds and
Total ¥417,529 ¥394,868 loans payable.

Note: A
 s at 31 August 2020 and 31 August 2021, the Group had inventories
attributable to UNIQLO Japan, UNIQLO International and GU business The issues and fair values of financial assets measured at fair
segments aggregated to 390,569 million yen and 374,595 million yen,
respectively. value through other comprehensive income are as follows:
(Millions of yen)

No inventories were pledged as collateral to secure debt. Issue(s)

As at As at
31 August 2020 31 August 2021
Crystal International Group Ltd. ¥591 ¥808
Write-down of inventories to net realizable value is as follows: Matsuoka Corporation 566 —
(Millions of yen)
Year ended Year ended
31 August 2020 31 August 2021 Stocks are principally held to strengthen medium-term rela-
Write-down of inventories tionships with strategic partners, and are therefore desig-
¥10,020 ¥15,120
to net realizable value nated as financial assets at fair value through other
Note: A
 s at 31 August 2020 and 31 August 2021, the Group had write-down of comprehensive income.
inventories to net realizable value from UNIQLO Japan, UNIQLO
International and GU business segments aggregated to 7,389 million yen
and 13,038 million yen, respectively.
The fair value and cumulative gains or losses (before tax
effects) as at the date of derecognition of financial assets
measured at fair value through other comprehensive income
11 Other Financial Assets and
that were derecognized during the period are as follows.
Other Financial Liabilities (Millions of yen)
As at As at
Issue(s)
The breakdowns of other financial assets and other financial 31 August 2020 31 August 2021

liabilities as at each year end are as follows: Fair value ¥— ¥883

(Millions of yen) Cumulative gains/(losses) — 739
As at As at Notes: 1. The Group sells off (derecognizes) equity instruments measured at fair
31 August 2020 31 August 2021 value through other comprehensive income based on the efficient utili-
zation of assets and reviews of business relationships.
Other financial assets:
2. If equity instruments measured at fair value through other comprehen-
Financial assets measured at sive income are derecognized, cumulative gains or losses (after tax
amortized cost effects) recognized in other comprehensive income are transferred to
retained earnings.
Security deposits/guarantees ¥ 63,639 ¥ 64,502
Bank deposits 45,916 50,516
Others 7,584 7,470 Dividend income recognized in financial assets measured at
Allowance for doubtful accounts (850) (219) fair value through other comprehensive income is as follows.
Financial assets measured at (Millions of yen)
fair value through other As at As at
Issue(s)
comprehensive income 31 August 2020 31 August 2021
Stocks 1,370 1,008 Derecognized financial assets ¥— ¥—
Total 117,660 123,279 Financial assets held at the
50 39
Other current financial assets total 49,890 56,157 end of the fiscal year
Other non-current
67,770 67,122
financial assets total

19
 12 Other Assets and Other Liabilities (Millions of yen)
As at As at
31 August 2020 31 August 2021
The breakdowns of other assets and other liabilities as at
Other liabilities:
each year end are as follows: Accruals ¥57,338 ¥68,797
(Millions of yen)
Employee benefits accruals 8,146 8,520
As at As at
Suspense receipt/
31 August 2020 31 August 2021 1,396 9,861
accrued consumption tax
Other assets:
Others 18,280 10,814
Prepayments ¥ 8,246 ¥ 8,683
Total 85,160 97,994
Long-term prepayments 2,662 2,534
Current 82,636 95,652
Others 7,104 10,572
Non-current 2,524 2,342
Total 18,013 21,790
Current 10,629 15,270
Non-current 7,383 6,520

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)
Furniture,
Buildings and Machinery and Construction Leased
Acquisition costs fixtures and Land Total
structures equipment in progress assets
vehicles
At 1 September 2019 ¥265,885 ¥ 20 ¥57,501 ¥1,962 ¥ 10,404 ¥ 57,409 ¥393,184
Effect of change in accounting policy — — — — — (57,409) (57,409)
At 1 September 2019 (After adjustment) 265,885 20 57,501 1,962 10,404 — 335,774
Additions 1,886 271 42 — 43,784 — 45,986
Disposals (10,896) — (2,994) — (160) — (14,051)
Transfers 33,457 101 7,535 — (41,094) — —
Effect of change in exchange rate 2,927 12 453 — 286 — 3,678
At 31 August 2020 293,259 405 62,539 1,962 13,220 — 371,388
Additions 6,946 341 106 — 57,305 — 64,700
Disposals (14,373) (5) (5,206) — (1,086) — (20,672)
Transfers 29,803 10,717 11,681 — (52,201) — —
Effect of change in exchange rate 8,941 173 3,593 — 1,120 — 13,829
At 31 August 2021 324,577 11,633 72,713 1,962 18,358 — 429,245

(Millions of yen)
Furniture,
Buildings and Machinery and Construction Leased
Accumulated depreciation and impairment fixtures and Land Total
structures equipment in progress assets
vehicles
At 1 September 2019 ¥(171,242) ¥ (3) ¥(40,425) ¥(34) ¥— ¥(19,385) ¥(231,092)
Effect of change in accounting policy — — — — — 19,385 19,385
At 1 September 2019 (After adjustment) (171,242) (3) (40,425) (34) — — (211,706)
Depreciation provided during the year (22,966) (13) (7,385) — — — (30,365)
Impairment losses (3,715) — (655) — — — (4,370)
Disposals 9,938 — 2,735 — — — 12,674
Effect of change in exchange rate (1,165) — (330) — — — (1,496)
At 31 August 2020 (189,150) (17) (46,061) (34) — — (235,265)
Depreciation provided during the year (24,217) (393) (7,699) — — — (32,310)
Impairment losses (1,895) — (417) — — — (2,313)
Disposals 13,243 2 4,865 — — — 18,112
Effect of change in exchange rate (6,436) (8) (2,847) — — — (9,292)
At 31 August 2021 (208,457) (416) (52,159) (34) — — (261,068)

20
 (Millions of yen)
Furniture,
Buildings and Machinery and Construction
Net carrying amount fixtures and Land Total
structures equipment in progress
vehicles
At 31 August 2020 ¥104,108 ¥ 388 ¥16,477 ¥1,927 ¥13,220 ¥136,123
At 31 August 2021 116,120 11,216 20,553 1,927 18,358 168,177
Notes: 1. The Group had store assets attributable to UNIQLO Japan, UNIQLO International and GU business segments.
2. There are no restrictions on ownership rights and no pledges on the Group’s property, plant and equipment.
3. “ Machinery and equipment” that was included in “Buildings and structures” and “Furniture, fixtures and vehicles” is separately presented from the current fiscal
year due to its increased materiality. As a result, “Furniture, fixtures and vehicles” for the previous fiscal year was reclassified to “Machinery and equipment”.

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
Goodwill and
Other
Acquisition costs Goodwill Intangible
Software Trademarks intangible Total
assets total
assets
At 1 September 2019 ¥ 38,754 ¥ 94,578 ¥ 20,686 ¥ 21,950 ¥137,215 ¥175,970
External purchases — 21,349 33 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
External purchases — 19,291 164 551 20,008 20,008
Disposals (23,782) (520) (12,310) (13,565) (26,396) (50,178)
Effect of change in exchange rate 1,144 81 808 (678) 211 1,356
At 31 August 2021 15,885 134,279 9,179 9,419 152,879 168,764

(Millions of yen)
Intangible assets other than goodwill
Goodwill and
Other
Accumulated amortization and impairment Goodwill Intangible
Software Trademarks intangible Total
assets total
assets
At 1 September 2019 ¥(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
Effect of change in exchange rate 231 70 110 10 191 423
At 31 August 2020 (30,429) (62,249) (14,315) (15,658) (92,222) (122,652)
Amortization provided during the year — (17,422) — (23) (17,445) (17,445)
Impairment losses — (108) (383) (686) (1,178) (1,178)
Disposals 23,348 413 12,145 13,447 26,007 49,355
Effect of change in exchange rate (710) (17) (580) (501) (1,099) (1,810)
At 31 August 2021 (7,792) (79,384) (3,133) (3,422) (85,939) (93,732)
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
Goodwill and
Other
Net carrying amount Goodwill Intangible
Software Trademarks intangible Total
assets total
assets
At 31 August 2020 ¥8,092 ¥53,176 ¥6,202 ¥7,454 ¥66,833 ¥74,925
At 31 August 2021 8,092 54,894 6,046 5,997 66,939 75,031

21
 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 and trade-
marks 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)
Goodwill Intangible assets with indefinite useful lives
Net carrying amount UNIQLO UNIQLO Global UNIQLO UNIQLO Global
GU GU
Japan International Brands Japan International Brands
At 31 August 2020 ¥— ¥— ¥— ¥8,092 ¥— ¥— ¥— ¥11,985
At 31 August 2021 — — — 8,092 — — — 11,348

15 Impairment Losses

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 Year ended
31 August 2020 31 August 2021
Buildings and structures ¥ 3,715 ¥ 1,895
Furniture, fixtures and vehicles 655 417
Subtotal impairment losses on property, plant and equipment 4,370 2,313
Software 0 108
Trademark (Note) 1,312 383
Other intangible assets 333 686
Subtotal impairment losses on intangible assets 1,646 1,178
Right-of-use assets 17,041 13,410
Other non-current assets (long-term prepayments) 15 6
Total impairment losses 23,074 16,908
Note: For the year ended 31 August 2020, 612 million yen represented impairment losses on trademark of the Helmut Lang brand and 700 million yen represented
impairment losses on trademark of the J Brand. For the year ended 31 August 2021, 383 million yen represented impairment losses on trademark of the J Brand.

The Group’s impairment losses during the year ended 31 assumption that the impact of COVID-19 pandemic will con-
August 2021 amounted to 16,908 million yen, compared tinue to be felt through to the end of August 2021.
with 23,074 million yen during the year ended 31 August The grouping of assets is based on the smallest identifi-
2020, and are included in “Other expenses” on the consoli- able CGU that independently generates cash inflow. In prin-
dated statement of profit or loss. ciple, each store, including flagship stores, is considered as
an individual CGU and recoverable amounts thereon are cal-
Year ended 31 August 2020 culated based on value in use.
Property, plant and equipment and Right-of-use assets The value in use is calculated based on the cash flow
Impairment losses amounting to 23,074 million yen, 21,411 projections with estimates and growth rates compiled by
million yen represented write downs of the carrying amounts management at a discount rate of mainly 7.1%. Theoretically,
of store assets to the recoverable amounts, primarily due to the projected cash flows cover a five-year period, and do not
a reduction in profitability of certain stores, including flagship use a growth rate that exceeds the long-term average
stores. With the global spread of COVID-19, the Group’s market growth rate. The pre-tax discount rate calculation is
performance has been adversely affected due to temporarily based on the weighted-average cost of capital.
closing stores, etc. We measured impairment losses on the

22
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., stores Buildings, structures and Right-of-use assets
GU G.U. CO., LTD., FRL Korea Co., Ltd. etc., stores Buildings, 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: T
 he 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.

Year ended 31 August 2021 longer for the situation to get under control.
Property, plant and equipment and Right-of-use assets The grouping of assets is based on the smallest identifi-
Impairment losses amounting to 16,908 million yen, 15,723 able CGU that independently generates cash inflow. In prin-
million yen represented write downs of the carrying amounts ciple, each store, including flagship stores, is considered as
of store assets to the recoverable amounts, primarily due to an individual CGU and recoverable amounts thereon are cal-
a reduction in profitability of certain stores, including flagship culated based on value in use.
stores. With the global spread of COVID-19, the Group’s The value in use is calculated based on the cash flow
performance has been adversely affected due to temporarily projections with estimates and growth rates approved by
closing of the stores, etc. Although the timing for the situa- management, applying a discount rate of mainly 8.9 %.
tion subsiding differs from region to region and on a case-by- Theoretically, the projected cash flows cover a five-year
case basis, we made accounting estimates involving the period, and do not use a growth rate that exceeds the long-
assumption that the impact will last until the end of August term average market growth rate. The pre-tax discount rate
2022 for most countries and regions including Japan. For calculation is based on the weighted-average cost of capital.
stores in other certain countries and regions, it may take

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, UNIQLO EUROPE LTD. etc., stores Buildings, structures and Right-of-use assets
GU G.U. CO., LTD. etc., stores Buildings, structures and Right-of-use assets
Global Brands COMPTOIR DES COTONNIERS S.A.S., etc., stores Buildings, structures and Right-of-use assets
Note: T
 he 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 2021 are 129,814 million yen, 205,036 million yen, and 31,599 million yen, respectively.

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 Year ended
31 August 2020 31 August 2021
Share of profit and loss of associates accounted for using the equity method ¥ 321 ¥ 561
Share of other comprehensive income/(loss) of investments in associates accounted
(39) 65
for using the equity method
Share of comprehensive income/(loss) of investments in associates accounted
281 626
for using the equity method
Carrying amount of investments in associates 14,221 18,236

23
 B. Determination regarding significant influence and ended 31 August 2021, which was included in the consoli-
financial information on important associates dated statement of profit or loss and consolidated statement
In June 2016, the Company invested in a domestic real of comprehensive income, respectively.
estate investment trust aiming to own a distribution facility. Total assets of the associates amounted to 69,872 mil-
The Company has significant influence over the financial and lion yen as at 31 August 2020 and 90,622 million yen as at
operating policy. 31 August 2021 respectively, which mainly comprised non-
The Company’s maximum exposure to losses due to its current assets such as warehouse, etc. The Company
investments in the associates is limited to the amount of the invested in the associates at the time of incorporation and no
investments by the Company and is included in the consoli- goodwill is recognized.
dated statement of financial position as “Investments in The Company received dividends from the associates
associates,” which amounted to 13,138 million yen as at 31 amounting to 619 million yen during the year ended 31
August 2020 and 17,250 million yen as at 31 August 2021, August 2020 and 664 million yen during the year ended 31
respectively. The Group’s share of profit and comprehensive August 2021, respectively.
income of the associates was 486 million yen during the year The Group has entered into lease contracts with one of
ended 31 August 2020 and 631 million yen during the year the associates relating to warehouse rental, etc.

17 Leases

(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 Year ended 31 August 2021
Present value of Present value of
Remaining lease Remaining lease
remaining lease remaining lease
payments payments
payments payments
Lease liabilities
Due within one year ¥115,222 ¥114,652 ¥120,492 ¥117,083
Due after one year through two years 85,370 83,993 86,417 81,570
Due after two years through three years 60,865 59,130 61,489 59,061
Due after three years through four years 49,846 47,954 46,862 44,786
Due after four years through five years 38,523 36,724 28,000 26,660
Due after five years 130,932 123,722 137,705 131,495
Total 480,761 466,179 480,966 460,658

Interest expenses on lease liabilities

(Millions of yen)
Year ended Year ended
31 August 2020 31 August 2021
Interest expenses on lease liabilities ¥4,763 ¥4,847

Cash outflow for leases

Cash outflow for leases is as follows:
(Millions of yen)
Year ended Year ended
31 August 2020 31 August 2021
Total Cash outflow for leases ¥200,483 ¥219,331

24
(b) Right-of-use assets
A breakdown of right-of-use assets is as follows:
(Millions of yen)
Machinery and Furniture, fixtures
Real estates Total
equipment and vehicles
At 1 September 2019 ¥ 330,860 ¥15,941 ¥28,739 ¥ 375,541
Additions due to new lease contracts, reassessment
164,901 3,449 9,599 177,950
of lease liabilities, etc.
Depreciation (120,862) (3,135) (9,459) (133,457)
Impairment losses (16,766) — (274) (17,041)
Expiration, cancellation, etc. (2,034) — (1,084) (3,118)
Others 442 — (372) 69
At 31 August 2020 356,539 16,255 27,148 399,944
Additions due to new lease contracts, reassessment
116,494 18,079 2,955 137,528
of lease liabilities, etc.
Depreciation (116,943) (4,411) (9,020) (130,376)
Impairment losses (13,260) — (149) (13,410)
Expiration, cancellation, etc. (10,931) (148) (1,229) (12,310)
Others 6,656 — 2,504 9,161
At 31 August 2021 338,553 29,774 22,209 390,537
Note: “ Machinery and equipment” that was included in “Furniture, fixtures and vehicles” is separately presented from the current fiscal year due to its increased materi-
ality. As a result, “Furniture, fixtures and vehicles” for the previous fiscal year was reclassified to “Machinery and equipment”.

(c) Expenses relating to Leases taking a target period for return on investment for each seg-
A breakdown of expenses relating to Leases is as follows: ment into consideration. We continually review this assess-
(Millions of yen) ment, should any event arise that would impact this
Year ended Year ended assessment, as well as any occurrence or situation that
31 August 2020 31 August 2021
would cause significant changes.
Expenses relating to variable lease
payments not included in the ¥49,418 ¥55,429
(2) Lessor
measurement of lease liability
The Group subleases some real estate as part of promoting
Expenses relating to short-term
leases (excluding expenses its store-opening strategy. The Group receives security
3,261 6,617
relating to leases with lease term deposits from lessee to collateralize risks such as non-
of no more than one month) restitution of defaults on lease payments liabilities and non-
Expenses relating to leases of low implementation of asset retirement obligation.
value assets (excluding expenses 33 149
relating to short-term leases)
(a) Finance leases
Note: V
 ariable lease payments are linked to sales performance which mainly
relate to store opening contracts. The Group acts as a lessor under a finance lease, primarily
for the subletting of road-side stores.
(d) Others
The future cash outflows to which the lessee is potentially ( i ) Analysis of changes of lease receivables
exposed that are not yet commenced to which the lessee is An analysis of changes in lease receivables in relation to
committed during the year ended 31 August 2021 amounted finance leases is as follows:
(Millions of yen)
to 40,109 million yen, compared with 11,071 million yen
As at As at
during the year ended 31 August 2020. 31 August 2020 31 August 2021
The Group’s leased properties are granted a termination Carrying amounts at the
¥ 4,824 ¥ 4,474
option for the purposes of flexible decision-making regarding beginning of period
store closures. This is mainly in relation to store lease agree- Increases due to
1,943 3,088
finance lease contracts
ments, most of which have the option of early termination
Decreases due to repayments (2,294) (2,020)
provided that written notice is given to the other party six
Others 0 (1,644)
months in advance. In light of the possibility for the termina- Carrying amounts at the
tion option to be exercised, the lease term is determined by 4,474 3,897
end of period
setting a non-cancellable lease term as a minimum and

25
 (ii) Maturity analysis of the lease payments receivables to be (b) Operating leases
reconciled to the net investment in the lease The Group subleases property to its tenants under operating
A maturity analysis of lease payments in relation to finance leases for each commercial establishment it operates.
leases is as follows:
(Millions of yen)
( i ) Lease income
Year ended Year ended
A breakdown of income on operating leases is as follows:
31 August 2020 31 August 2021
(Millions of yen)
Undiscounted lease payments
Year ended Year ended
to be received 31 August 2020 31 August 2021
Due within one year ¥1,499 ¥1,514 Income on variable lease payments ¥ 120 ¥ 88
Due after one year through Income on fixed lease payments 1,030 1,324
1,034 1,305
two years
Due after two years through
792 443 ( ii) M
 aturity analysis of lease payments to be received
three years
Due after three years through A maturity analysis of lease payments to be received in rela-
502 305
four years tion to operating leases is as follows:
Due after four years through (Millions of yen)
370 171
five years Year ended Year ended
Due after five years 345 207 31 August 2020 31 August 2021
Total 4,545 3,948 Undiscounted lease payments
Unearned finance income 71 51 to be received
Net investment in the lease 4,474 3,897 Due within one year ¥1,009 ¥1,212
Due after one year through
1,008 572
two years
(iii) Amount pertaining to lease receivables recognized in the
Due after two years through
Consolidated statement of profit or loss 533 236
three years
(Millions of yen)
Due after three years through
Year ended Year ended 205 236
four years
31 August 2020 31 August 2021
Due after four years through
Finance income from 205 236
¥37 ¥18 five years
net investment in the lease
Due after five years 530 236
Total 3,492 2,733

26
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
As at Effect of As at Recognized in Recognized As at
in other
31 August adoption of 1 September profit or loss directly in 31 August
comprehensive
2019 IFRS 16 2019 (Note) equity 2020
income
Temporary differences
Accrued business tax ¥ 1,819 ¥ — ¥ 1,819 ¥ (334) ¥ — ¥ — ¥ 1,484
Accrued for bonuses 4,642 — 4,642 (659) — — 3,982
Allowance for doubtful accounts 172 — 172 (166) — — 5
Impairment losses on
3,864 — 3,864 (1,944) — — 1,919
non-current assets
Unrealized gains/(losses) on
186 — 186 — (355) — (169)
available-for-sale securities
Depreciation 7,402 — 7,402 238 — — 7,640
Net gains/(losses) on revaluation of
(1,889) — (1,889) — (6,899) 3,383 (5,405)
cash flow hedges
Temporary differences on
(1,893) — (1,893) — — — (1,893)
shares of subsidiaries
Accelerated depreciation (4,081) — (4,081) 4,081 — — —
Right-of-use assets/Lease liabilities — 13,988 13,988 (3,117) — — 10,870
Others 10,061 — 10,061 4,140 — — 14,202
Subtotal 20,283 13,988 34,272 2,236 (7,255) 3,383 32,636
Tax losses carried forward 4,056 — 4,056 993 — — 5,049
Net deferred tax assets/(liabilities) 24,340 13,988 38,329 3,229 (7,255) 3,383 37,686
Note: The difference between the total amount recognized in profit or loss and the amount of deferred tax is due to effect of change in exchange rate.

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)
Recognized
As at Recognized Recognized As at
in other
1 September in profit or loss directly in 31 August
comprehensive
2020 (Note) equity 2021
income
Temporary differences
Accrued business tax ¥ 1,484 ¥ 780 ¥ — ¥ — ¥ 2,265
Accrued for bonuses 3,982 645 — — 4,627
Allowance for doubtful accounts 5 5 — — 11
Impairment losses on non-current assets 1,919 4,651 — — 6,570
Unrealized gains/(losses) on available-for-sale securities (169) — 104 — (64)
Depreciation 7,640 1,512 — — 9,152
Net gains/(losses) on revaluation of cash flow hedges (5,405) — (12,513) 4,221 (13,697)
Temporary differences on shares of subsidiaries (1,893) — — — (1,893)
Accelerated depreciation — — — — —
Right-of-use assets/Lease liabilities 10,870 1,455 — — 12,326
Others 14,202 (9,351) — — 4,851
Subtotal 32,636 (299) (12,408) 4,221 24,149
Tax losses carried forward 5,049 (1,934) — — 3,115
Net deferred tax assets/(liabilities) 37,686 (2,234) (12,408) 4,221 27,265
Note: T
 he difference between the total amount recognized in profit or loss and the amount of deferred tax is due to effect of change in exchange rate.

27
 Tax effects of unrecognized tax losses carried forward and (Millions of yen)

deductible temporary differences for which deferred tax Year ended Year ended
31 August 2020 31 August 2021
assets were not recognized is as follows:
Statutory income tax rate 30.6 % 30.6 %
(Millions of yen)
Unrecognized deferred tax assets 9.1 % 4.0 %
As at As at
31 August 2020 31 August 2021 Difference in statutory income
(2.5)% (3.0)%
tax rates of subsidiaries
Unrecognized tax losses
¥32,071 ¥41,382 Undistributed earnings of
carried forward 0.9 % 1.5 %
foreign subsidiaries
Deductible temporary differences 11,574 12,766
Total 43,646 54,148 Foreign withholding tax 3.8 % 1.4 %
Others (1.0)% (0.6)%
Effective tax rate 40.9 % 33.9 %
Tax effects of unrecognized tax losses carried forward of which
no deferred tax asset is recognized in the consolidated state-
ment of financial position, if unutilized, will expire as follows:
19 Trade and Other Payables
(Millions of yen)
As at As at
31 August 2020 31 August 2021 The breakdown of trade and other payables as at each year
First year ¥ 340 ¥ 167 end is as follows:
Second year 239 289 (Millions of yen)
Third year 608 266 As at As at
31 August 2020 31 August 2021
Fourth year 333 3,183
Fifth year and thereafter 30,549 37,475 Trade payables ¥150,749 ¥179,988
Total 32,071 41,382 Notes payables 12 13
Other payables 59,984 40,055
Total ¥210,747 ¥220,057
Temporary differences on shares of subsidiaries for which
deferred tax liabilities were not recognized
The aggregate amounts of temporary differences associ-
20 Provisions
ated with undistributed retained earnings of subsidiaries for
which deferred tax liabilities have not been recognized as at
The breakdown of provisions as at each year end is as
31 August 2020 and 31 August 2021 were 427,747 million
follows:
yen and 430,902 million yen, respectively. (Millions of yen)
Deferred tax liabilities are not recognized as the Group is As at As at
able to control the timing of the reversal of the temporary dif- 31 August 2020 31 August 2021

ference and it is probable that they will not reverse it in the Asset retirement obligations ¥33,410 ¥41,195
Total 33,410 41,195
foreseeable future.
Current liabilities 752 2,149
Non-current liabilities 32,658 39,046
B. Income taxes
(Millions of yen)
Year ended Year ended The primarily factors for the increase / (decrease) in provision
31 August 2020 31 August 2021 are as follows:
Current tax ¥68,263 ¥87,800 (Millions of yen)
Deferred tax (5,793) 2,388 Asset retirement
Total ¥62,470 ¥90,188 obligations
Balances as at 31 August 2020 ¥33,410
Additional provisions 8,487
Reconciliations between the statutory income tax rates and
Amounts utilized (1,377)
the effective tax rates are as follows. The effective tax rate Increase in discounted amounts arising
shown is the corporate income tax rate applied to the 272
from passage of time
Group’s profit before income taxes. Others 402
Balances as at 31 August 2021 41,195

Please refer to “3. Significant Accounting Policies K.

Provisions” for an explanation of respective provisions.

28
21 Equity and Other Equity Items

A. Share Capital
(Shares) (Millions of yen)
Number of Number of Number of
authorized shares issued shares outstanding shares
Capital stock Capital surplus
(Common stock (Common stock (Common stock
with no par-value) with no par-value) with no par-value)
Balances as at 1 September 2019 300,000,000 106,073,656 102,061,735 ¥10,273 ¥20,603
Increase/(decrease) (Note) — — 38,808 — 2,761
Balances as at 31 August 2020 300,000,000 106,073,656 102,100,543 10,273 23,365
Increase/(decrease) (Note) — — 44,128 — 1,995
Balances as at 31 August 2021 300,000,000 106,073,656 102,144,671 10,273 25,360
Note: The primarily factor for the increase/(decrease) in the number of shares in circulation was the increase/(decrease) in the number of treasury stock as indicated below.

B. Treasury Stock and Capital Surplus

(1) Treasury Stock
(Shares) (Millions of yen)
Number of shares Amount
Balances as at 1 September 2019 4,011,921 ¥15,271
Acquisition of treasury stock less than one unit 83 5
Exercise of stock options (38,891) (148)
Balances as at 31 August 2020 3,973,113 15,129
Acquisition of treasury stock less than one unit 160 12
Exercise of stock options (44,288) (168)
Balances as at 31 August 2021 3,928,985 14,973

(2) Capital surplus

(Millions of yen)
Gain/(loss) on
Capital reserve disposal Stock options Others Total
of treasury stock
Balances as at 1 September 2019 ¥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
Balances as at 31 August 2020 4,578 7,980 7,246 3,559 23,365
Disposal of treasury stock — 1,836 — — 1,836
Share-based payments — — 159 — 159
Balances as at 31 August 2021 4,578 9,816 7,405 3,559 25,360

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

29
 C. Other components of equity 22 Revenue
The breakdown of other comprehensive income included in
non-controlling interests is as follows: A. The breakdown of revenue for each year is as follows:
(Millions of yen)
The Group performs global retail clothing operations through
Year ended Year ended
both physical stores and e-commerce channels. The follow-
31 August 2020 31 August 2021
Exchange differences on
ing is a breakdown of total revenue by major regional market
¥ (212) ¥1,921 operation.
translation of foreign operations
Cash flow hedges (877) (175)
Other comprehensive income (1,089) 1,745 Year ended 31 August 2020
(Millions of yen)
Revenue Percent of Total
D. Dividends (Millions of yen) (%)
The Company’s basic policy is to pay dividends twice a year, Japan ¥ 806,887 40.2
an interim dividend and a year-end dividend. These dividends Greater China 455,986 22.7
are decided by resolution of the Board, unless otherwise Other parts of Asia & Oceania 204,537 10.2
stipulated by laws and regulations. North America & Europe 183,412 9.1
UNIQLO (Note 1) 1,650,825 82.2
GU (Note 2) 246,091 12.3
The total amount of dividends paid was as follows:
Global Brands (Note 3) 109,633 5.5
Year ended 31 August 2020 Others (Note 4) 2,295 0.1
(Millions of yen) (Yen)
Total ¥2,008,846 100.0
Amount of Dividends
Resolutions Notes: 1. Revenue is classified by nation or region based on customer location.
dividends per share
The designated countries and regions are classified as follows:
Board of Directors’ meeting Greater China: Mainland China, Hong Kong, Taiwan
¥24,494 ¥240
held on 5 November 2019 Other parts of Asia & Oceania: South Korea, Singapore, Malaysia,
Thailand, the Philippines, Indonesia,
Board of Directors’ meeting Australia, Vietnam, India
24,499 240
held on 9 April 2020 North America & Europe: United States of America, Canada,
United Kingdom, France, Russia,
Germany, Belgium, Spain, Sweden,
the Netherlands, Denmark, Italy
Year ended 31 August 2021 2. Main national and regional market: Japan
(Millions of yen) (Yen) 3. Main national and regional markets: North America, Europe, Japan
Amount of Dividends 4. The “Others” category includes real estate leasing operations.
Resolutions
dividends per share
Board of Directors’ meeting Year ended 31 August 2021
¥24,504 ¥240
held on 4 November 2020 (Millions of yen)
Board of Directors’ meeting Revenue Percent of Total
24,511 240
held on 8 April 2021 (Millions of yen) (%)
Japan ¥ 842,628 39.5
Greater China 532,249 25.0
Dividend which effective date is after fiscal 2021 is as follows:
Other parts of Asia & Oceania 202,472 9.5
(Millions of yen) (Yen)
North America & Europe 195,429 9.2
Amount of Dividends UNIQLO (Note 1) 1,772,780 83.1
Resolutions
dividends per share
GU (Note 2) 249,438 11.7
Board of Directors’ meeting
¥24,514 ¥240 Global Brands (Note 3) 108,204 5.1
held on 2 November 2021
Others (Note 4) 2,569 0.1
Total ¥2,132,992 100.0
Regarding the proposed dividends per common stock, the Notes: 1. Revenue is classified by nation or region based on customer location.
Board has approved the proposal subsequent to the year-end The designated countries and regions are classified as follows:
Greater China: Mainland China, Hong Kong, Taiwan
date, and it is not recognized as a liability at year end. Other parts of Asia & Oceania: South Korea, Singapore, Malaysia,
Thailand, the Philippines, Indonesia,
Australia, Vietnam, India
North America & Europe: United States of America, Canada,
United Kingdom, France, Russia,
Germany, Belgium, Spain, Sweden,
the Netherlands, Denmark, Italy
2. Main national and regional market: Japan
3. Main national and regional markets: North America, Europe, Japan
4. The “Others” category includes real estate leasing operations.

30
B. Liabilities arising from contracts with customers are 24 Other Income and Other Expenses
as stated below.
(Millions of yen)
The breakdowns of other income and other expenses for
End of current End of current each year are as follows:
consolidated consolidated (Millions of yen)
fiscal year fiscal year
(31 August 2020) (31 August 2021) Year ended Year ended
31 August 2020 31 August 2021
Contractual liabilities
Other income
Advances received from customers ¥1,391 ¥1,572
Foreign exchange gains (Note 1) ¥1,576 ¥ 2,912
Refund liabilities 1,445 1,558
Gain on reclassification of
foreign exchange differences
— 8,708
Consideration for anticipated refunds to customers is rea- on translation of foreign
sonably estimated and recognized as a refund liability. operations (Note 2)

In the consolidated statement of financial position, liabili- Others 6,378 6,617

Total ¥7,954 ¥18,238
ties pertaining to advances received and refunds from cus-
tomers are included in “Other current liabilities.”
(Millions of yen)
Year ended Year ended
C. Transaction prices allocated to existing performance 31 August 2020 31 August 2021
obligations Other expenses
In the Group, there are no significant transactions for which Losses on retirement of
¥ 1,125 ¥ 985
the individual forecast contract period exceeds one year. property, plant and equipment
Therefore, the practical short-cut method is used, and Impairment losses 23,074 16,908
Others 4,752 7,421
information related to remaining performance obligations is
Total ¥28,952 ¥25,315
omitted.
Notes 1. Currency adjustments incurred in the course of operating transactions
Furthermore, in the consideration arising from contracts are included in “Other income”.
with customers, there are no significant monetary amounts 2. The amount represents gain reclassified to profit and loss due to the
liquidation of J Brand, Inc. during the year ended 31 August 2021.
that are not included in the transaction price.

D. Assets recognized from costs for acquiring or 25 Finance Income and Finance Costs
performing contracts with customers
In the Group, there are no assets recognized from costs for
The breakdowns of finance income and finance costs for
acquiring or performing contracts with customers.
each year are as follows:
(Millions of yen)
Year ended Year ended
23 Selling, General and Administrative Expenses 31 August 2020 31 August 2021
Finance income
Foreign exchange gains (Note) ¥ 1,503 ¥19,222
The breakdown of selling, general and administrative expenses
Interest income 9,673 4,589
for each year is as follows: Others 50 47
(Millions of yen)
Total ¥11,228 ¥23,859
Year ended Year ended
31 August 2020 31 August 2021
Selling, general and (Millions of yen)
administrative expenses Year ended Year ended
Advertising and promotion ¥ 68,307 ¥ 66,576 31 August 2020 31 August 2021

Lease expenses 53,617 62,494 Finance costs

Depreciation and amortization 177,848 177,910 Interest expenses ¥7,706 ¥6,990
Outsourcing 49,686 50,320 Others 1 7
Salaries 277,556 285,361 Total ¥7,707 ¥6,998
Distribution 94,018 91,375 Note: Currency adjustments incurred in the course of non-operating transactions
are included in “Finance income”.
Others 84,787 84,389
Total ¥805,821 ¥818,427

31
 26 Other Comprehensive Income

The breakdown of amounts recorded during the year, reclassification adjustments, and income tax effect generated by individ-
ual comprehensive income items included in “Other comprehensive income” for each year are as follows:

Year ended 31 August 2020

(Millions of yen)
Amount
Reclassification Amount before Amount after
recorded during Income tax effect
adjustment income tax income tax
the year
Items that will not be reclassified
subsequently to profit or loss
Financial assets measured
at fair value through other ¥ (275) ¥ — ¥ (275) ¥ (355) ¥ (630)
comprehensive income/(loss)
Total (275) — (275) (355) (630)
Items that may be reclassified
subsequently to profit or loss
Exchange differences on
5,227 — 5,227 — 5,227
translation of foreign operations
Cash flow hedges 26,185 (5,155) 21,029 (6,899) 14,130
Share of other comprehensive
(39) — (39) — (39)
income of associates
Total 31,373 (5,155) 26,217 (6,899) 19,318
Total comprehensive income for the year 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 profit or loss after hedge accounting was suspended, as a fore-
cast transaction eligible for hedge accounting was no longer expected to occur.

Year ended 31 August 2021

(Millions of yen)
Amount
Reclassification Amount before Amount after
recorded during Income tax effect
adjustment income tax income tax
the year
Items that will not be reclassified
subsequently to profit or loss
Financial assets measured
at fair value through other ¥ 436 ¥ — ¥ 436 ¥ 104 ¥ 541
comprehensive income/(loss)
Total 436 — 436 104 541
Items that may be reclassified
subsequently to profit or loss
Exchange differences on
28,975 (8,708) 20,266 — 20,266
translation of foreign operations
Cash flow hedges 38,644 203 38,847 (12,513) 26,333
Share of other comprehensive
65 — 65 — 65
income of associates
Total 67,684 (8,505) 59,179 (12,513) 46,665
Total comprehensive income for the year 68,121 (8,505) 59,616 (12,408) 47,207
Note: The exchange differences on translation of foreign operations reclassification adjustment of (8,708) million yen is the amount transferred to profit or loss due to the
liquidation of J Brand, Inc. during the year ended 31 August 2021.
In addition, the cash flow hedge reclassification adjustment of 203 million yen is the amount transferred to profit or loss 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.

32
27 Earnings per Share

(Yen)
Year ended 31 August 2020 Year ended 31 August 2021
Equity per share attributable to Equity per share attributable to
¥9,368.83 ¥10,930.42
owners of the Parent (Yen) owners of the Parent (Yen)
Basic earnings per share for the year (Yen) 885.15 Basic earnings per share for the year (Yen) 1,663.12
Diluted earnings per share for the year (Yen) 883.62 Diluted earnings per share for the year (Yen) 1,660.44
Note: The basis for calculation of basic earnings per share and diluted earnings per share for the year is as follows:

Year ended Year ended

31 August 2020 31 August 2021
Basic earnings per share for the year
Profit for the year attributable to owners of the Parent (Millions of yen) ¥ 90,357 ¥ 169,847
Profit not attributable to common shareholders (Millions of yen) — —
Profit attributable to common shareholders (Millions of yen) 90,357 169,847
Average number of common stock during the year (Shares) 102,081,609 102,125,851
Diluted earnings per share for the year
Adjustment to profit (Millions of yen) — —
Increase in number of common stock (Shares) 177,082 164,744
(share subscription rights) (177,082) (164,744)

28 Cash Flow Information

A. Liabilities of financing activities

Liabilities of financing activities are as follows:

Year ended 31 August 2020

(Millions of yen)
Variation without cash flow
Balances Balances Balances
Adjustment Variation Foreign
as at as at as at
for adoption with currency New lease
31 August 1 September Others 31 August
of IFRS 16 cash flow translation contracts
2019 2019 2020
reserve
Short-term borrowings ¥ 1,236 ¥ — ¥ 1,236 ¥ 13,472 ¥ 445 ¥ — ¥ — ¥ 15,154
Long-term borrowings 4,258 — 4,258 (4,343) 84 — — —
Corporate bonds 469,183 — 469,183 — — — 158 469,342
Finance lease obligations (Note) 38,726 (38,726) — — — — — —
Lease liabilities (Note) — 428,631 428,631 (141,216) 2,806 177,451 (1,493) 466,179
Total 513,405 389,904 903,309 (132,087) 3,336 177,451 (1,334) 950,675

Year ended 31 August 2021

(Millions of yen)
Variation without cash flow
Balances as at Balances as at
Variation with Foreign currency
1 September New lease 31 August
cash flow translation Others
2020 contracts 2021
reserve
Short-term borrowings ¥ 15,154 ¥ (3,556) ¥ 1,565 ¥ — ¥ — ¥ 13,163
Corporate bonds 469,342 (100,000) — — 128 369,471
Lease liabilities 466,179 (148,248) 10,082 142,346 (9,700) 460,658
Total 950,675 (251,805) 11,648 142,346 (9,571) 843,292
Note: 1
 00,000 million yen in 2nd non-collateralized corporate bonds (interest rate: 0.291%; date of maturity: 18 December 2020) have been redeemed.

33
 B. Important non-cash transactions
Year ended 31 August 2020
The amount of increase or decrease in right-of-use assets is listed in “17. Leases.”

Year ended 31 August 2021

The amount of increase or decrease in right-of-use assets is listed in “17. Leases.”

C. Information on corporate bonds as at 31 August 2020 and 2021 is as follows:

(Millions of yen)
As at As at Interest
Company name Name of bonds Date of issuance Date of maturity
31 August 2020 31 August 2021 rate (%)
2nd non-collateralized
FAST RETAILING CO., LTD. 18 December 2015 99,989 — 0.291 18 December 2020
corporate bonds
3rd non-collateralized
FAST RETAILING CO., LTD. 18 December 2015 49,957 49,976 0.491 16 December 2022
corporate bonds
4th non-collateralized
FAST RETAILING CO., LTD. 18 December 2015 69,895 69,915 0.749 18 December 2025
corporate bonds
5th non-collateralized
FAST RETAILING CO., LTD. 6 June 2018 79,910 79,943 0.110 6 June 2023
corporate bonds
6th non-collateralized
FAST RETAILING CO., LTD. 6 June 2018 29,943 29,955 0.220 6 June 2025
corporate bonds
7th non-collateralized
FAST RETAILING CO., LTD. 6 June 2018 99,786 99,813 0.405 6 June 2028
corporate bonds
8th non-collateralized
FAST RETAILING CO., LTD. 6 June 2018 39,859 39,867 0.880 4 June 2038
corporate bonds
Total — — 469,342 369,471 — —

29 Share-based Payments

The Group has a program for issuing share subscription rights as share-based compensation stock options for employees of
the Company 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 per-
formance, 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 type 1st share subscription rights B type
Category and Employees of the Company: 7 Employees of the Company: 266
number of grantees Employees of Group subsidiaries: 3 Employees of Group subsidiaries: 413
Number of stock options
Common stock: maximum 3,370 shares Common stock: maximum 77,542 shares
by type of shares (Note)
Grant date 8 November 2010 8 November 2010
To serve continuously until the vesting date (7 November To serve continuously until the vesting date (7 December
Vesting conditions
2013) after the grant date (8 November 2010) 2010) after the grant date (8 November 2010)
Eligible service period From 8 November 2010 to 7 November 2013 From 8 November 2010 to 7 December 2010
Exercise period From 8 November 2013 to 7 November 2020 From 8 December 2010 to 7 November 2020
Settlement Equity settlement Equity settlement

34
 2nd share subscription rights A type 2nd share subscription rights B type
Category and Employees of the Company: 14 Employees of the Company: 139
number of grantees Employees of Group subsidiaries: 4 Employees of Group subsidiaries: 584
Number of stock options
Common stock: maximum 13,894 shares Common stock: maximum 51,422 shares
by type of shares (Note)
Grant date 15 November 2011 15 November 2011
To serve continuously until the vesting date (14 November To serve continuously until the vesting date (14 December
Vesting conditions
2014) after the grant date (15 November 2011) 2011) after the grant date (15 November 2011)
Eligible service period From 15 November 2011 to 14 November 2014 From 15 November 2011 to 14 December 2011
Exercise period From 15 November 2014 to 14 November 2021 From 15 December 2011 to 14 November 2021
Settlement Equity settlement Equity settlement

3rd share subscription rights A type 3rd share subscription rights B type
Category and Employees of the Company: 18 Employees of the Company: 136
number of grantees Employees of Group subsidiaries: 8 Employees of Group subsidiaries: 615
Number of stock options
Common stock: maximum 10,793 shares Common stock: maximum 39,673 shares
by type of shares (Note)
Grant date 13 November 2012 13 November 2012
To serve continuously until the vesting date (12 November To serve continuously until the vesting date (12 December
Vesting conditions
2015) after the grant date (13 November 2012) 2012) after the grant date (13 November 2012)
Eligible service period From 13 November 2012 to 12 November 2015 From 13 November 2012 to 12 December 2012
Exercise period From 13 November 2015 to 12 November 2022 From 13 December 2012 to 12 November 2022
Settlement Equity settlement Equity settlement

4th share subscription rights A type 4th share subscription rights B type
Category and Employees of the Company: 19 Employees of the Company: 180
number of grantees Employees of Group subsidiaries: 11 Employees of Group subsidiaries: 706
Number of stock options
Common stock: maximum 7,564 shares Common stock: maximum 29,803 shares
by type of shares (Note)
Grant date 3 December 2013 3 December 2013
To serve continuously until the vesting date (2 December To serve continuously until the vesting date (2 January
Vesting conditions
2016) after the grant date (3 December 2013) 2014) after the grant date (3 December 2013)
Eligible service period From 3 December 2013 to 2 December 2016 From 3 December 2013 to 2 January 2014
Exercise period From 3 December 2016 to 2 December 2023 From 3 January 2014 to 2 December 2023
Settlement Equity settlement Equity settlement

5th share subscription rights A type 5th share subscription rights B type
Category and Employees of the Company: 36 Employees of the Company: 223
number of grantees Employees of Group subsidiaries: 16 Employees of Group subsidiaries: 785
Number of stock options
Common stock: maximum 21,732 shares Common stock: maximum 33,062 shares
by type of shares (Note)
Grant date 14 November 2014 14 November 2014
To serve continuously until the vesting date (13 November To serve continuously until the vesting date (13 December
Vesting conditions
2017) after the grant date (14 November 2014) 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

35
 6th share subscription rights A type 6th share subscription rights B type
Category and Employees of the Company: 15 Employees of the Company: 274
number of grantees Employees of Group subsidiaries: 19 Employees of Group subsidiaries: 921
Number of stock options
Common stock: maximum 2,847 shares Common stock: maximum 25,389 shares
by type of shares (Note)
Grant date 13 November 2015 13 November 2015
To serve continuously until the vesting date (12 November To serve continuously until the vesting date (12 December
Vesting conditions
2018) after the grant date (13 November 2015) 2015) after the grant date (13 November 2015)
Eligible service period From 13 November 2015 to 12 November 2018 From 13 November 2015 to 12 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

7th share subscription rights A type 7th share subscription rights B type
Category and Employees of the Company: 16 Employees of the Company: 339
number of grantees Employees of Group subsidiaries: 23 Employees of Group subsidiaries: 1,096
Number of stock options
Common stock: maximum 2,821 shares Common stock: maximum 31,726 shares
by type of shares (Note)
Grant date 11 November 2016 11 November 2016
To serve continuously until the vesting date (10 November To serve continuously until the vesting date (10 December
Vesting conditions
2019) after the grant date (11 November 2016) 2016) after the grant date (11 November 2016)
Eligible service period From 11 November 2016 to 10 November 2019 From 11 November 2016 to 10 December 2016
Exercise period From 11 November 2019 to 10 November 2026 From 11 December 2016 to 10 November 2026
Settlement Equity settlement Equity settlement

8th share subscription rights A type 8th share subscription rights B type
Category and Employees of the Company: 19 Employees of the Company: 395
number of grantees Employees of Group subsidiaries: 27 Employees of Group subsidiaries: 1,152
Number of stock options
Common stock: maximum 5,454 shares Common stock: maximum 48,178 shares
by type of shares (Note)
Grant date 10 November 2017 10 November 2017
To serve continuously until the vesting date (9 November To serve continuously until the vesting date (9 December
Vesting conditions
2020) after the grant date (10 November 2017) 2017) after the grant date (10 November 2017)
Eligible service period From 10 November 2017 to 9 November 2020 From 10 November 2017 to 9 December 2017
Exercise period From 10 November 2020 to 9 November 2027 From 10 December 2017 to 9 November 2027
Settlement Equity settlement Equity settlement

8th share subscription rights C type 9th share subscription rights A type
Category and Employees of the Company: 17
Employees of the Company: 29
number of grantees Employees of Group subsidiaries: 32
Number of stock options
Common stock: maximum 5,929 shares Common stock: maximum 4,057 shares
by type of shares (Note)
Grant date 10 November 2017 9 November 2018
To serve continuously until the vesting date (9 November To serve continuously until the vesting date (8 November
Vesting conditions
2020) after the grant date (10 November 2017) 2021) after the grant date (9 November 2018)
Eligible service period From 10 November 2017 to 9 November 2020 From 9 November 2018 to 8 November 2021
Exercise period 10 November 2020 From 9 November 2021 to 8 November 2028
Settlement Equity settlement Equity settlement

36
 9th share subscription rights B type 9th share subscription rights C type
Category and Employees of the Company: 419
Employees of the Company: 40
number of grantees Employees of Group subsidiaries: 1,267
Number of stock options
Common stock: maximum 36,275 shares Common stock: maximum 4,733 shares
by type of shares (Note)
Grant date 9 November 2018 9 November 2018
To serve continuously until the vesting date (9 November To serve continuously until the vesting date (9 November
Vesting conditions
2018) after the grant date (8 December 2018) 2018) after the grant date (8 November 2021)
Eligible service period From 9 November 2018 to 8 December 2018 From 9 November 2018 to 8 November 2021
Exercise period From 9 December 2018 to 9 November 2028 9 November 2021
Settlement Equity settlement Equity settlement

10th share subscription rights A type 10th share subscription rights B type
Category and Employees of the Company: 11 Employees of the Company: 528
number of grantees Employees of Group subsidiaries: 46 Employees of Group subsidiaries: 1,389
Number of stock options
Common stock: maximum 3,548 shares Common stock: maximum 37,424 shares
by type of shares (Note)
Grant date 8 November 2019 8 November 2019
To serve continuously until the vesting date (7 November To serve continuously until the vesting date (7 December
Vesting conditions
2022) after the grant date (8 November 2019) 2019) after the grant date (8 November 2019)
Eligible service period From 8 November 2019 to 7 November 2022 From 8 November 2019 to 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

10th share subscription rights C type 11th share subscription rights A type
Category and Employees of the Company: 18
Employees of the Company: 40
number of grantees Employees of Group subsidiaries: 47
Number of stock options
Common stock: maximum 3,666 shares Common stock: maximum 2,175 shares
by type of shares (Note)
Grant date 8 November 2019 13 November 2020
To serve continuously until the vesting date (7 November To serve continuously until the vesting date (12 November
Vesting conditions
2022) after the grant date (8 November 2019) 2023 after the grant date (13 November 2020)
Eligible service period From 8 November 2019 to 7 November 2022 From 13 November 2020 to 12 November 2023
Exercise period 8 November 2022 From 13 November 2023 to 12 November 2030
Settlement Equity settlement Equity settlement

11th share subscription rights B type 11th share subscription rights C type
Category and Employees of the Company: 694
Employees of the Company: 41
number of grantees Employees of Group subsidiaries: 1,435
Number of stock options
Common stock: maximum 22,306 shares Common stock: maximum 3,777 shares
by type of shares (Note)
Grant date 13 November 2020 13 November 2020
To serve continuously until the vesting date (12 December To serve continuously until the vesting date (12 November
Vesting conditions
2020) after the grant date (13 November 2020) 2023) after the grant date (13 November 2020)
Eligible service period From 13 November 2020 to 12 December 2020 From 13 November 2020 to 12 November 2023
Exercise period From 13 December 2020 to 12 November 2030 13 November 2023
Settlement Equity settlement Equity settlement
Note: The number of stock options is equivalent to the number of shares.

37
 Expenses recognized as share-based payments are as (Shares)

follows: Number of shares

(Millions of yen) Year ended Year ended
31 August 2020 31 August 2021
Year ended Year ended
31 August 2020 31 August 2021 Vested
Expenses recognized Outstanding at beginning of the year 143,233 148,450
Share-based payments ¥2,915 ¥2,179 Vested 44,399 31,979
Exercised (38,891) (44,288)
Forfeited (291) (789)
(2) Scale of stock options program and changes Outstanding at end of the year 148,450 135,352
Outstanding balance of stock options are converted into
equivalent number of shares. All stock options are granted with an exercise price of 1 yen
per share.
(a) Number and weighted average exercise prices of stock
options (b) Stock price on exercise date
Stock options Stock options exercised during the year ended 31 August
(Shares)
Number of shares
2021 are as follows:
(Shares) (Yen)
Year ended Year ended
31 August 2020 31 August 2021 Weighted-average
Type Number of shares stock price on
Non-vested
exercise date
Non-vested at beginning of the year 25,518 24,561
Stock options 44,288 ¥82,971
Granted 44,638 28,248
Forfeited (1,196) (815)
Vested (44,399) (31,979) (c) Expected life of stock options
Non-vested at end of the year 24,561 20,015 The weighted-average expected life of outstanding stock
options as at 31 August 2021 was 5.52 years.
In addition, the weighted-average expected life of out-
standing stock options as at 31 August 2020 was 5.80 years.

B. Methods of estimating fair value of stock options, etc.

The methods of estimating fair value of 11th share subscription rights A type, B type, and C type granted during the year
ended 31 August 2021, were as follows:

(1) Valuation model: Black-Scholes model

(2) The following table lists the inputs to the model used:
11th share subscription 11th share subscription 11th share subscription
rights A type rights B type rights C type
Fair value 77,559 yen 78,236 yen 79,192 yen
Share price 80,620 yen 80,620 yen 80,620 yen
Exercise price 1 yen 1 yen 1 yen
Stock price volatility (Note 1) 34% 35% 31%
Expected life of options (Note 2) 6.5 years 5.04 years 3 years
Expected dividends (Note 3) 480 yen/share 480 yen/share 480 yen/share
Risk-free interest rate (Note 4) (0.0835%) (0.09188%) (0.13%)
Notes: 1. Stock price volatility is computed based on the actual results of 6.5 years for A type (from June 2014 to November 2020), 5.04 years for B type (from
December 2015 to November 2020), and 3.0 years for C type (from December 2017 to November 2020).
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.

38
Also, the method of estimating fair value for the ‘10th share subscription rights A type, B type, and C type granted during the
year ended 31 August 2020 is as follows:

(1) Valuation model: Black-Scholes model

(2) The following table lists the inputs to the model used:
10th share subscription 10th share subscription 10th share subscription
rights A type rights B type rights C type
Fair value 66,058 yen 66,732 yen 67,684 yen
Share price 69,110 yen 69,110 yen 69,110 yen
Exercise price 1 yen 1 yen 1 yen
Stock price volatility (Note 1) 33% 34% 27%
Expected life of options (Note 2) 6.5 years 5.04 years 3 years
Expected dividends (Note 3) 480 yen/share 480 yen/share 480 yen/share
Risk-free interest rate (Note 4) (0.2105%) (0.21692%) (0.203%)
Notes: 1. S
 tock 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 to November 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. T
 he 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.

30 Financial Instruments Interest-bearing borrowings includes corporate bonds and

borrowings. As at 31 August 2020 and 2021, the Group
A. Capital risk management maintained a position where the carrying amount of cash
The Group engages in capital management to achieve con- and cash equivalents exceeded the total amounts of interest-
tinuous growth and maximize corporate value. bearing borrowings and lease liabilities.
As at 31 August 2021, the Group is not subject to any
The ratio of the Group’s net interest-bearing borrowings to externally imposed capital requirement.
equity is as follows:
(Millions of yen) B. Significant accounting policies
As at As at See Note “3. Significant Accounting Policies” for significant
31 August 2020 31 August 2021
accounting policies regarding standards for recognizing finan-
Interest-bearing borrowings ¥ 484,496 ¥ 382,634
Lease liabilities 466,179 460,658
cial assets, financial liabilities, equity financial instruments, as
Cash and cash equivalents 1,093,531 1,177,736 well as the fundamentals of measurement and recognition of
Net interest-bearing borrowings (142,856) (334,443) profit or loss.
Equity 996,079 1,162,298

39
 C. Categories of financial instruments
(Millions of yen)
As at As at
31 August 2020 31 August 2021
Financial assets
Loans and receivables
Trade and other receivables ¥ 67,069 ¥ 50,546
Other current financial assets 49,890 56,157
Other non-current financial assets 66,399 66,113
Financial assets measured at fair value through other comprehensive income/(loss) 1,370 1,008
Derivatives
Financial assets measured at fair value through profit or loss 1,619 209
Financial assets designated as hedging instruments 23,778 49,446
Financial liabilities
Financial liabilities at amortized cost
Trade and other payables 210,747 220,057
Other current financial liabilities 213,301 104,969
Current lease liabilities 114,652 117,083
Non-current financial liabilities 370,780 370,799
Non-current lease liabilities 351,526 343,574
Derivatives
Financial liabilities measured at fair value through profit or loss 69 280
Financial liabilities designated as hedging instruments 5,899 3,256

No items in the above categories are included in discontin- other than the local currencies of those countries in which
ued operations or disposal groups held-for-sale. Also, there the Group operates its business.
are no financial assets or liabilities valued using the fair value In regard to forecast transactions denominated in foreign
option to measure fair value. currencies, for foreign currency exchange fluctuation risk by
On the consolidated statement of financial position, avail- currency and on a monthly basis, the Group in principle
able-for-sale investments are included under “non-current hedges risk by using foreign currency forward contracts.
financial Assets.” For imports, the Group endeavors to stabilize purchasing
costs by concluding foreign currency forward contracts and
D. Financial risk management standardizing import exchange rates. If the yen should
In relation to cash management, the Group seeks to ensure weaken significantly against the US dollar in the future and
effective utilization of Group funds through the Group’s Cash this situation continued for an extended period, it could have
Management Service. The Group obtained credit facilities a negative impact on the Group’s performance.
from financial institutions and issuance of bonds. Any tempo- The Group enters into derivative transactions only with
rary surplus funds are invested mainly in fixed interest rate- financial institutions evaluated as highly creditworthy by
bearing instruments with minimal credit risk. rating agencies to mitigate the counterparty risk.
The Group entered into foreign currency forward con- The Group’s notional amount of foreign currency forward
tracts to hedge risk arising from fluctuations in foreign cur- contracts was 1,284,423 million yen as at 31 August 2021.
rency exchange rates and did not conduct any speculative
trading in derivatives. (b) Foreign currency sensitivity analysis
With respect to companies that use yen as the functional
E. Market risk management currency in each reporting period, below is an analysis of the
The Group conducts its business on a global scale, and is impact an 1% increase in the yen against the Euro (“EUR”)
therefore exposed to the price fluctuation risk of currencies and the United States dollar (“USD”) would have on the
and equity financial instruments. Group’s profit before income taxes and other comprehensive
income (before tax effects).
(1) Foreign currency risk However, this analysis assumes that over variable factors
(a) Foreign currency risk management are constant. Furthermore, this does not include the effect of
The Group conducts its business on a global scale, and is conversion of financial instruments denominated the func-
exposed to foreign currency risk in relation to purchases and tional currencies, and revenue, expenses, assets, and liabili-
sales transactions and financing denominated in currencies ties of overseas sales entities into presentation currency.

40
 Year ended Year ended (c) Currency derivatives and hedges
31 August 2020 31 August 2021
The Group uses foreign currency forward contract transac-
Average exchange rate (Yen)
tions to hedge against the risk of future fluctuations in
USD 108.04 106.96
exchange rates in regard to foreign currency transactions
EUR 120.06 128.01
Impact on profit before and applies hedge accounting to transactions that meet
income taxes (Millions of yen) hedge requirements, and did not conduct any speculative
USD (3,853) (4,318) trading in derivatives.
EUR (239) (209)
Impact on other comprehensive Cash flow hedges
income (Millions of yen)
A cash flow hedge is a hedge for avoiding risk of volatility in
USD (10,316) (10,693)
EUR (127) (187)
future cash flows. The Company uses foreign currency for-
ward 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

Foreign currencies
Contract principal Fair value
Average exchange rates (Millions of
(Millions of yen) (Millions of yen)
respective currency)
31 August 31 August 31 August 31 August 31 August 31 August 31 August 31 August
2020 2021 2020 2021 2020 2021 2020 2021
Foreign currency forward contracts
Over 1 year
1,137.61 —
Buy USD (sell KRW) 20 — 2,071 — 83 —
(KRW/$) (KRW/$)
0.00 —
Buy KRW (sell USD) 24,663 — 2,151 — 44 —
($/KRW) ($/KRW)
Within 1 year
0.85 0.84
Buy USD (sell EUR) 8 27 855 2,932 (19) 24
(EUR/$) (EUR/$)
0.77 0.76
Buy USD (sell GBP) 15 5 1,447 628 (38) (25)
(£/$) (£/$)
1,124.35 1,147.18
Buy USD (sell KRW) 154 43 15,463 4,725 830 69
(KRW/$) (KRW/$)
29.41 27.86
Buy USD (sell TWD) 21 18 2,249 2,033 7 (6)
(TWD/$) (TWD/$)
— 1.35
Buy USD (sell SGD) — 2 — 221 — (1)
(SGD/$) (SGD/$)
— 31.12
Buy USD (sell THB) — 1 — 166 — 6
(THB/$) (THB/$)
7.84 —
Buy USD (sell HKD) 7 — 789 — (9) —
(HKD/$) (HKD/$)
— 23,142.72
Buy USD (sell VND) — 8 — 927 — (11)
(VND/$) (VND/$)
1.14 1.22
Buy EUR (sell USD) 7 22 843 2,967 45 (88)
($/EUR) ($/EUR)
1.26 1.42
Buy GBP (sell USD) 11 4 1,475 659 83 (17)
($/£) ($/£)
0.00 0.00
Buy KRW (sell USD) 188,516 50,620 16,249 4,800 519 (21)
($/KRW) ($/KRW)
0.13 —
Buy HKD (sell USD) 57 — 779 — 1 —
($/HKD) ($/HKD)

41
 (ii) Derivative transactions to which hedge accounting is applied
Foreign currencies
Contract principal Fair value
Average exchange rates (Millions of
(Millions of yen) (Millions of yen)
respective currency)
31 August 31 August 31 August 31 August 31 August 31 August 31 August 31 August
2020 2021 2020 2021 2020 2021 2020 2021
Foreign currency forward contracts
Over 1 year
103.02 105.09
Buy USD (sell JPY) 6,192 6,034 637,960 634,094 7,945 21,481
(¥/$) (¥/$)
0.85 0.82
Buy USD (sell EUR) 103 324 10,958 34,579 (219) (327)
(EUR/$) (EUR/$)
0.75 0.73
Buy USD (sell GBP) 49 110 5,208 12,215 1 (306)
(£/$) (£/$)
1,158.56 1,116.47
Buy USD (sell KRW) 107 108 11,077 11,423 223 502
(KRW/$) (KRW/$)
1.37 1.36
Buy USD (sell SGD) 4 0 425 22 (3) 0
(SG$/$) (SG$/$)
30.00 32.46
Buy USD (sell THB) 11 5 1,134 551 43 0
(THB/$) (THB/$)
4.43 4.25
Buy USD (sell MYR) 2 6 224 674 (10) (2)
(MYR/$) (MYR/$)
1.44 1.32
Buy USD (sell AUD) 34 24 3,853 2,617 (207) 103
(AUD/$) (AUD/$)
1.38 1.25
Buy USD (sell CAD) 0 6 89 652 (4) 7
(CAD/$) (CAD/$)
53.30 49.34
Buy USD (sell PHP) 15 5 1,742 632 (116) 15
(PHP/$) (PHP/$)
— 8.35
Buy EUR (sell USD) — 13 — 12,107 — 36
(EUR/$) (EUR/$)
Within 1 year
102.26 102.79
Buy USD (sell JPY) 3,443 3,756 352,183 386,147 10,115 25,643
(¥/$) (¥/$)
0.84 0.84
Buy USD (sell EUR) 209 224 22,099 24,390 (132) (17)
(EUR/$) (EUR/$)
0.77 0.74
Buy USD (sell GBP) 86 96 9,422 10,815 (254) (287)
(£/$) (£/$)
1,099.02 1,146.97
Buy USD (sell KRW) 151 117 14,852 12,690 1,158 208
(KRW/$) (KRW/$)
1.39 1.34
Buy USD (sell SGD) 84 56 9,126 6,150 (152) 7
(SGD/$) (SGD/$)
30.17 30.93
Buy USD (sell THB) 88 49 9,030 5,142 278 244
(THB/$) (THB/$)
4.29 4.17
Buy USD (sell MYR) 37 48 4,103 5,324 (96) 44
(MYR/$) (MYR/$)
1.45 1.37
Buy USD (sell AUD) 70 89 7,974 9,843 (486) 0
(AUD/$) (AUD/$)
67.59 78.40
Buy USD (sell RUB) 57 88 5,551 10,363 616 (387)
(RUB/$) (RUB/$)
1.32 1.29
Buy USD (sell CAD) 36 52 3,885 5,926 (34) (120)
(CAD/$) (CAD/$)
14,660.80 14,721.74
Buy USD (sell IDR) 41 65 4,401 7,377 8 (131)
(IDR/$) (IDR/$)
52.03 50.23
Buy USD (sell PHP) 69 57 7,883 6,375 (463) (16)
(PHP/$) (PHP/$)
75.71 —
Buy USD (sell INR) 2 — 230 — (5) —
($/INR) ($/INR)
7.82 7.76
Buy USD (sell HKD) 70 95 7,504 10,427 (58) 21
(HKD/$) (HKD/$)
6.99 6.75
Buy USD (sell CNY) 187 138 20,079 15,833 (248) (544)
(CNY/$) (CNY/$)
1.18 2.30
Buy EUR (sell USD) 20 24 2,529 6,070 30 16
($/EUR) ($/EUR)
1.27 1.38
Buy GBP (sell USD) 8 14 1,074 2,252 49 (7)
($/GBP) ($/GBP)
0.00 0.00
Buy IDR (sell USD) 444,011 72,826 3,056 549 (94) 9
($/IDR) ($/IDR)
— 0.13
Buy HKD (sell USD) — 23 — 329 — 0
($/HKD) ($/HKD)

42
(2) Interest rate risk management
The Group’s interest-bearing borrowings are mainly bonds with fixed interest rates, and the Group maintains positions in cash
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.

(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 instru-
ments 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 the
financial 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 2020
(Millions of yen)
Items measured in an amount equivalent to the
expected credit losses for the entire period

Items recorded in Financial assets

an amount for which the
Financial assets
Number of days elapsed equivalent to allowance for
for which the Total
after due date 12 months of doubtful accounts
credit risk has Credit-impaired
expected credit is always measured
significantly financial assets
losses as an amount
increased since
equivalent to
initial recognition
expected losses
for the whole period
Before due date has elapsed ¥124,302 ¥59,019 ¥47 ¥— ¥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
Term-end balance 124,965 59,669 119 — 184,754

43
 Year ended 31 August 2021
(Millions of yen)
Items measured in an amount equivalent to the
expected credit losses for the entire period

Items recorded in Financial assets

an amount for which the
Financial assets
Number of days elapsed equivalent to allowance for
for which the Total
after due date 12 months of doubtful accounts
credit risk has Credit-impaired
expected credit is always measured
significantly financial assets
losses as an amount
increased since
equivalent to
initial recognition
expected losses
for the whole period
Before due date has elapsed ¥127,637 ¥44,543 ¥40 ¥— ¥172,221
Within 90 days 51 180 0 — 232
Over 90 days but within one year 317 7 2 — 327
Over one year 386 237 46 28 697
Term-end balance 128,392 44,969 89 28 173,479

(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 2020
(Millions of yen)

Items measured in an amount equivalent to the

expected credit losses for the entire period

Items recorded in Financial assets

an amount for which the
Financial assets
Changes in allowances for equivalent to allowance for
for which the Total
doubtful accounts 12 months of doubtful accounts
credit risk has Credit-impaired
expected credit is always measured
significantly financial assets
losses as an amount
increased since
equivalent to
initial recognition
expected losses
for the whole period
Starting balance ¥117 ¥ 471 ¥40 ¥ 241 ¥ 871
Effect of adoption of IFRS 16 — 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

Year ended 31 August 2021

(Millions of yen)

Items measured in an amount equivalent to the

expected credit losses for the entire period

Items recorded in Financial assets

an amount for which the
Financial assets
Changes in allowances for equivalent to allowance for
for which the Total
doubtful accounts 12 months of doubtful accounts
credit risk has Credit-impaired
expected credit is always measured
significantly financial assets
losses as an amount
increased since
equivalent to
initial recognition
expected losses
for the whole period
Starting balance ¥ 64 ¥1,284 ¥ 46 ¥— ¥1,395
Increase during period 8 55 19 28 111
Decrease during period (intended use) (0) (699) — — (699)
Decrease during period (reversals) (28) (106) (46) — (181)
Other changes 15 22 — — 37
Term-end balance 59 557 19 28 664

44
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 the allow-
ance 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 is minimal.
As a result, we have no exposure to excessively concentrated credit risk.

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
finance department, under the direction of the CFO, performs the day-to-day aspects of liquidity risk management by main-
taining appropriate levels of surplus funds and bank loans, and by monitoring budgets and cash flows.
(Millions of yen)
More than More than More than
Carrying Contractual Less than 1 to 2 years 3 years 4 years Over
amount cash flows 1 year 2 years but within but within but within 5 years
3 years 4 years 5 years
As at 31 August 2020
Non-derivative financial liabilities
Trade and other payables ¥ 210,747 ¥ 210,747 ¥210,747 ¥ — ¥ — ¥ — ¥ — ¥ —
Short-term borrowings 15,154 15,154 15,154 — — — — —
Corporate bonds 469,342 470,000 100,000 — 130,000 — 30,000 210,000
Long-term finance lease liabilities 351,526 365,539 — 85,370 60,865 49,846 38,523 130,932
Short-term finance lease liabilities 114,652 115,222 115,222 — — — — —
Deposits 98,156 98,156 98,156 — — — — —
Derivative financial liabilities
Foreign currency forward contracts 5,968 5,968 2,763 1,348 1,757 99 — —
Total 1,265,548 1,280,788 542,044 86,718 192,622 49,946 68,523 340,932
As at 31 August 2021
Non-derivative financial liabilities
Trade and other payables 220,057 220,057 220,057 — — — — —
Short-term borrowings 13,163 13,163 13,163 — — — — —
Corporate bonds 369,471 370,000 — 130,000 — 30,000 70,000 140,000
Long-term finance lease liabilities 343,574 360,474 — 86,417 61,489 46,862 28,000 137,705
Short-term finance lease liabilities 117,083 120,492 120,492 — — — — —
Deposits 91,805 91,805 91,805 — — — — —
Derivative financial liabilities
Foreign currency forward contracts 3,536 3,536 2,493 553 489 — — —
Total 1,158,693 1,179,530 448,013 216,971 61,978 76,862 98,000 277,705
Note: Guaranteed obligations are not included in the above, as the probability of having to act on those guarantees is remote.

H. Fair value of financial instruments

(Millions of yen)
As at 31 August 2020 As at 31 August 2021
Carrying amounts Fair value Carrying amounts Fair value
Financial assets
Security deposits/guarantees ¥ 63,639 ¥ 64,341 ¥ 64,502 ¥ 65,358
Total 63,639 64,341 64,502 65,358
Financial liabilities
Corporate bonds 469,342 470,938 369,471 375,144
Total 469,342 470,938 369,471 375,144
Note: The above includes the outstanding balance of corporate bonds due within one year.

45
 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 measurements of Security deposits / guarantees and Corporate bonds are classified as level 2.

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 fair
value hierarchy described as follows, based on the lowest level input that is significant to the fair value measurement as a
whole:
Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement is
observable, either directly or indirectly
Level 3 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
When multiple inputs are used to measure fair value, the fair value level is determined based on the input with the lowest
level classification 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 2020 Level 1 Level 2 Level 3 Total
Financial assets measured at
¥1,158 ¥ — ¥212 ¥ 1,370
fair value through other comprehensive income
Financial assets measured at fair value through profit or loss — 1,550 — 1,550
Financial assets and financial liabilities designated as
— 17,878 — 17,878
hedging instruments — Fair value
Net amount 1,158 19,428 212 20,799

As at 31 August 2021 Level 1 Level 2 Level 3 Total

Financial assets measured at
¥808 ¥ — ¥199 ¥ 1,008
fair value through other comprehensive income
Financial assets measured at fair value through profit or loss — (71) — (71)
Financial assets and financial liabilities designated as
— 46,190 — 46,190
hedging instruments — Fair value
Net amount 808 46,118 199 47,127

For the valuation of Level 2 derivative financial instruments for which a market value is available, we use a valuation model that
uses observable data on the measurement date 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 fig-
ures available for each quarter.
There were no significant changes due to the purchase, sale, issuance and settlement of Level 3 financial instruments, and
no transfers between Levels 1, 2 and 3.

46
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 Year ended
31 August 2020 31 August 2021
Short-term employee benefits ¥786 ¥837
Share-based payments 13 31
Total 799 869

Transactions with officers and major shareholders (individuals only), etc. of the reporting entity submitting these consolidated
financial statements.

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

Capital
Percentage
Name of Stock Transaction Term-end
Business of voting
Company, etc., or Money Relation with Transaction Amount Balance
Type Location Content or right, etc. Item
or personal Invested Associated Party Details (Millions of (Millions of
Occupation held
name (Millions of yen) yen)
(being held)
yen)

Company in Rent of store

which officers Assets properties by
TTY 5.2% are our subsidiary
and close Amsterdam, holdings, Store Lease
Management 71,826 directly 647 6,797
relatives hold Netherlands managing, Serves renting liabilities
B.V. held
a majority of etc. concurrently
voting rights as an officer
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 2020, through 31 August 2021)
Capital
Percentage
Name of Stock Transaction Term-end
Business of voting
Company, etc., or Money Relation with Transaction Amount Balance
Type Location Content or right, etc. Item
or personal Invested Associated Party Details (Millions of (Millions of
Occupation held
name (Millions of yen) yen)
(being held)
yen)

Company in Rent of store

which officers Assets properties by
TTY 5.2% are our subsidiary
and close Amsterdam, holdings, Store Lease
Management 71,826 directly 428 6,744
relatives hold Netherlands managing, Serves renting liabilities
B.V. held
a majority of etc. concurrently
voting rights as an officer

Company in Rent of store

which officers Assets properties by
546 our subsidiary
and close holdings, Store Lease
Broadway, New York — — 109 3,971
relatives hold managing, Serves renting liabilities
LLC
a majority of etc. concurrently
voting rights as an officer
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 of both companies.

47
 32 Major Subsidiaries 34 Contingent Liabilities

The Group’s major subsidiaries are as listed in “3. Significant Year ended 31 August 2020
Accounting Policies A. Basis of Consolidations (1) Not applicable
Subsidiaries.” The liquidation of J Brand Inc., which was a
major subsidiary at the end of the previous consolidated fiscal Year ended 31 August 2021
year, was completed in this current consolidated fiscal year. Not applicable

33 Commitments

The Group had the following commitments at each reporting

date:
(Millions of yen)
As at As at
31 August 2020 31 August 2021
Commitment for the acquisition of
¥24,942 ¥21,492
property, plant and equipment
Commitment for acquisition of
2,139 1,487
intangible assets
Total 27,081 22,979

35 Subsequent Events

Not applicable

Other
Quarterly information for the year ended 31 August 2021
(Cumulative period) First quarter Second quarter Third quarter Fiscal year
Revenue (Millions of yen) ¥619,797 ¥1,202,864 ¥1,698,082 ¥2,132,992
Quarterly income before income taxes and
107,164 171,482 245,654 265,872
non-controlling interests (Millions of yen)
Quarterly net income (Millions of yen) 70,381 105,868 151,351 169,847
Earnings per share (Yen) 689.29 1,036.76 1,482.08 1,663.12

(Accounting period) First quarter Second quarter Third quarter Fourth quarter
Quarterly earnings/(losses) per share (Yen) 689.29 347.49 445.33 181.08

48
INDEPENDENT AUDITOR’S REPORT

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