Aderans Co., Ltd.pdf.irpocket.com/C8170/YWWN/CFqs/wqcV.pdf · 2014-04-14 · (iii) Bosley Business (Hair transplantation) The Bosley business, which handles the hair-transplantation

(Unaudited) 1

April 14, 2014 Aderans Co., Ltd.

Financial Statements (Unaudited) For the Fiscal Year ended February 28, 2014

(Translated from the Japanese original) Corporate Information Code: 8170 Listing: First Section of the Tokyo Stock Exchange (URL http://www.aderans.com/english/) Representative: Nobuo Nemoto Representative Director, Chairman and President Contact: Michiyoshi Takahashi General Manager, Corporate Communications Office Telephone: +81-3-3350-3268 Anticipated date of annual general meeting of shareholders: May 22, 2014 Expected date of payment for dividends: May 23, 2014 Anticipated date for filing Yuka Shoken Hokokusho (a Japanese-language business report): May 22, 2014 Preparation of supplementary explanation material for financial results: Yes Holding of presentation meeting financial results: Yes (for institutional investors and analysts)

Millions of yen (Amounts rounded down)

1. Consolidated Performance for Fiscal 2014 (March 1, 2013 through February 28, 2014) (1) Consolidated Operating Results (Percentages represent changes from corresponding period of previous year) Net sales Operating income (loss) Ordinary income (loss) Net income (loss) Fiscal 2014 Fiscal 2013

Millions of yen 67,755 51,089

% 32.6 7.7

Millions of yen 3,616

3,559

%1.6 40.6


3,849

% 16.4 51.1

Millions of yen4,281 3,301

%29.7

190.9 (Note) Comprehensive income : 5,781 million yen (43.9%) (February 28, 2014) 4,017 million yen (459.0%) (February 28, 2013)

Net income (loss) per share

Fully diluted net income per share

Return (net loss) on equity

Return (ordinary income

(loss)) on assets

Return (operating income

(loss)) on sales

Fiscal 2014 Fiscal 2013

Yen 116.32 89.69

Yen 116.15 ―

% 13.0 11.7

% 8.6

10.0

% 5.3 7.0

(Note) Equity in earnings or losses of affiliates: 33 million yen (February 28, 2014) ― million yen (February 28, 2013) (2) Consolidated Financial Position Total assets Net assets Equity ratio Net assets

per share Fiscal 2014 Fiscal 2013



%55.7 73.6

Yen 966.12 817.40

(Note) Equity capital : 35,560 million yen (February 28, 2014) 30,086 million yen (February 28, 2013) (3) Consolidated Cash Flows Cash flows from

operating activities Cash flows from

investing activities Cash flows from

financing activities Cash and cash equivalents

at the end of period Fiscal 2014 Fiscal 2013


Millions of yen (18,036)

(2,238)


(180)


(Unaudited) 2

2. Payment of Dividends Dividends per share

Total dividends(For the year)

Dividend payout ratio

(Consolidated)

Dividends on net assets

(Consolidated)

First quarter-

end

At end of first

half

Third quarter-

end Year-end For the

year


Yen

― ―

Yen 0.00 0.00

Yen ― ―

Yen 10.00 10.00

Yen 10.00 10.00

Millions of yen 368 368

%

11.1 8.6

%

1.3 1.1

Fiscal 2015 (Estimated)

― 0.00 ― 15.00 15.00

12.5

3. Anticipated Consolidated Results for Fiscal 2015 (March 1, 2014 through February 28, 2015)

(Percentages represent changes from corresponding period of previous year) Net sales Operating income Ordinary profit First half Full year

Millions of yen

33,000 74,000

%

6.9 9.2

Millions of yen

1,200 4,100

%

(31.5) 13.4

Millions of yen

1,100 4,000

%

(44.0) (10.7)

Net income Net income per share First half Full year

Millions of yen

1,200 4,400

%

(55.6) 2.8

Yen

32.60 119.54

4. Others (1) Major changes in scope of consolidation and application of equity method during the term: Yes

Newly included : 1 (HC (USA) Inc.) Excluded companies: None

(2) Changes in accounting policy, changes in accounting estimate and retrospective restatement 1. Changes associated with revision of accounting standards, etc: Yes 2. Changes other than 1: None 3. Changes in accounting estimates: Yes 4. Restatements: None (3) Number of outstanding shares (common stock) ①Number of outstanding shares, including treasury stock, at end of term:

40,213,388 shares (February 28, 2014) 40,213,388 shares (February 28, 2013)

②Number of shares of treasury stock at end of term:


③Average outstanding number of shares (during the fiscal year):


(Unaudited) 3

(Reference) Non-Consolidated Financial Results for Fiscal 2014 (March 1, 2013 through February 28, 2014) 1. Non-Consolidated Performance for Fiscal 2014 (March 1, 2013 through February 28, 2014) (1) Non-Consolidated Operating Results (Percentages represent changes from corresponding period of previous year)

Net sales Operating income (loss) Ordinary profit (loss) Net income (loss) Fiscal 2014 Fiscal 2013

Millions of yen

40,404 37,483

%

7.8 9.1

Millions of yen

4,266 3,443

%

23.9 88.9

Millions of yen

6,205 3,850

%

61.2 98.3

Millions of yen

5,565 3,568

%

56.0 ―

Net income (loss)

per share Fully diluted net

income (loss) per share


Yen 151.21 96.96

Yen 150.98 ―

(2) Non-Consolidated Financial Position Total assets Net assets Shareholders’ equity ratio Net assets per share Fiscal 2014 Fiscal 2013

Yen in millions 54,658 38,744

Yen in millions 36,060 30,752

%

65.7 79.3

Yen

976.14 834.66

(Note) Shareholders’ equity : 35,928 million yen (February 28, 2014) 30,722 million yen (February 28, 2013)

* Update on the Implementation of Auditing Procedures As of the date on which this financial report was released, a review of the financial statements, based on the Financial Instruments and Exchange Law, had not been completed. * Disclaimer regarding performance outlook The estimates above are based on information available to management as of the date on which these performance-related figures were disclosed, and various factors may cause actual results to differ from these estimates. For issues to keep in mind when using performance forecasts and criteria conditioned upon performance forecasts, please refer to Analysis of Operating Results on page5.

(Unaudited) 4

[Index] 1. Operating results --- 5 (1) Analysis of operating results --- 5 (2) Consolidated financial position --- 6 (3) Basic policy for the appropriation of profits and dividends for the fiscal period under review and the current

fiscal period --- 7

2. Business direction --- 7 (1) Basic management policy --- 7 (2) Performance targets --- 7 (3) Medium- to long-term management strategies --- 7 (4) Corporate matters to address --- 7 3. Consolidated financial statements --- 9 (1) Consolidated balance sheets --- 9 (2) Consolidated statements of income and consolidated statements of comprehensive income --- 11(3) Consolidated statements of changes in shareholders’equity --- 13(4) Consolidated statements of cash flows --- 15(5) Notes regarding consolidated financial statements --- 17

[Notes on assumption of going concern] --- 17[Basis for preparation of consolidated financial statements] --- 17[Changes in accounting policy] --- 19[Change in method of presentation] --- 19[Segment information] --- 20[Per share data] --- 22[Significant subsequent events] --- 22

4. Non-consolidated financial statements --- 23(1) Non-consolidated balance sheets --- 23(2) Non-consolidated statements of income --- 25(3) Non-consolidated statements of changes in shareholders’equity --- 26

(Unaudited) 5

1. Operating Results (1) Analysis of Operating Results Stronger signs of recovery characterized the economic environment in Japan in fiscal 2014, ended February 28, 2014. The yen dropped against other currencies while stock prices rose, on expectations of growth fueled by economic and financial policies introduced by the national government. In hair-related markets, the situation was mixed. In Japan, expanding demand in the women’s market underpinned good results overall, but overseas, particularly in Europe and North America, no noteworthy trends appeared. Against this backdrop, Aderans emphasized measures to boost the corporate value of itself and the Aderans Group. The Company emphasized efforts to maintain a well-earned reputation as a trustworthy corporate group guided by a stakeholder-oriented business philosophy, which set the stage for further business expansion. In Japan, companies under the Group umbrella endeavored to attract and keep new customers while securing the purchasing interest of existing customers and also pursued new product development. Overseas, the focus was on increasing market share and achieving revenue stability. The April 2013 acquisition of HC (USA) Inc., helped to reinforce the foundation for growth into the future. Through these approaches, Aderans achieved higher sales and income on a consolidated basis. Net sales jumped 32.6% year-on-year, to ¥67,755 million, operating income edged up 1.6%, to ¥3,616 million, ordinary profit rose 16.4%, to ¥4,481 million, and net income climbed 29.7%, to ¥4,281 million.

A summary of business results by each reporting segment is provided below. Note that the Company’s reporting segments have been reclassified, effective from fiscal 2014. This change is detailed

under Segment Information in Notes to Consolidated Financial Statements. This change is detailed under Segment Information in Notes to Consolidated Financial Statements. (i) Aderans Business (Custom-made wigs) Sales increased on the men’s side of the Aderans Business, thanks to aggressive advertising and promotional campaigns and the introduction of new products, which generated favorable demand for custom-made wigs as well as hair-growth services and hair-volumizing products offering a quick and easy way to boost volume in specific areas. Sales also increased on the women’s side of the Aderans Business, as routinely timed product introductions fueled demand and an active push to hold wig fairs and try-on events at major department stores across the country sparked market interest.

In the end, segment sales grew 10.1% over fiscal 2013, to ¥28,234 million, and operating income improved 13.4%, to ¥7,703 million. (ii) Fontaine Business (Ready-made wigs) Sales through department stores and directly operating salons increased over fiscal 2013, buoyed by favorable demand for top-quality, high-end product lines, such as VALAN PREMIUM and Ready-made Fluffy. The positive demand situation underpinned a 5.3% improvement in segment sales, to ¥8,987 million. Unfortunately, operating income tumbled 35.3%, to ¥2,051 million. (iii) Bosley Business (Hair transplantation) The Bosley business, which handles the hair-transplantation business in North America, failed to effectively capture market attention through advertising efforts, causing a reduction in inquiries compared with the previous fiscal year and the number of surgical procedures declined. As a result, segment sales on a local currency basis were $95 million, down 9.3%, and operating income hit $4 million, down 51.1%. However sales on a yen-basis increased 10.9% year-on-year, to ¥9,320 million and operating income decreased 40.2%, to ¥457 million from the derpreciation of the yen. The above sales benefited from the inclusion of nine months’ worth of sales from the hair-transplantation business of HC (USA) Inc., which came under the scope of this segment in April 2013. (iv) Overseas Wig Business The Overseas Wig Business covers operations in the West—Europe and North America—as well as China and Southeast Asia. In fiscal 2014, the segment marked tremendous progress in sales, which soared 245.1%, to ¥17,992 million, thanks to contributions from HC (USA) Inc., a major retailer of customer-made wigs in the U.S. market, and Le Nouvel Espace Beauté SA (LNEB), a provider of medical-use wigs in Europe. HC (USA) Inc. fell under the scope of consolidation in April 2013 and Le Nouvel Espace Beauté (LNEB) became an Aderans subsidiary in September 2012. The operating loss deepened, settling at ¥1,234 million, due to the burden of amortization, mainly goodwill and intangible fixed assets. This compares with an operating loss of ¥293 million a year ago.

(Unaudited) 6

(v) Other Operations The main activities under Other Operations are the beauty supply route and e-commerce. Sales edged down 2.2% in fiscal 2014, to ¥3,219 million. The operating loss deepened, to ¥476 million, compared with ¥259 million a year earlier.

Forward-looking issues are described on page 8 of the attached materials. With regard to the performance outlook for fiscal 2015, ending February 28, 2015, Aderans expects net sales of

¥74.0billion, up 9.2% year-on-year, operating income of ¥4.1billion, up 13.4%, ordinary profit of ¥4.0 billion, down 10.7% and net income of ¥4.4 billion, up 2.8% on a consolidated basis. (2) Consolidated Financial Position (i) Status of assets, liabilities and net assets As of February 28, 2014, total assets stood at ¥63,892 million, up ¥22,988 million from a year earlier. Total current assets reached ¥27,111 million, up ¥2,266 million from a year earlier. The change reflects increases of ¥1,287 million in current portion of long-term loans receivable, ¥982 increase in commercial goods and finished goods and ¥2,009 million in deferred tax assets, which offset a ¥3,245 million drop in cash and deposits. Total fixed assets came to ¥36,780 million, up ¥20,721 million from the previous fiscal year-end, mainly due to increases of ¥6,028 million in goodwill, ¥7,502 million in customer-related intangible assets, and ¥3,689 million in other intangible fixed assets. Total liabilities stood at ¥28,069 million, up ¥17,383 million, as of February 28, 2014 due to the consolidation of HC (USA) Inc. . The change is mainly due to increases of ¥8,661 million in long-term loans payable and ¥4,683 million in deferred tax liabilities. Total net assets reached ¥35,823 million, up ¥5,604 million from the end of February 2013. (ii) Cash Flow Analysis

Cash and cash equivalents as of February 28, 2014, stood at ¥10,528 million, down ¥3,076 million from the end of February 2013.

Cash provided by operating activities reached ¥6,325 million, up from ¥4,378 million a year ago. Major components of this change were ¥3,741 million in income before income taxes and minority interests and ¥2,795 million in depreciation and amortization.

Cash used in investing activities came to ¥18,036 million, up from ¥2,238 million a year ago. The primary application of funds was ¥16,454 million to purchase shares in subsidiaries resulting in a change in the scope of consolidation.

Cash provided by financing activities amounted to ¥9,036 million, a turnaround from ¥180 million used in fiscal 2013. Key components were inflow of ¥10.5 billion from long-term loans and outflow of ¥797 million to repay long-term loans payable.

(Reference) Ratios for cash flow analysis are as follows: Fiscal 2010 Fiscal 2011 Fiscal 2012 Fiscal 2013 Fiscal 2014 Equity ratio (%) 77.8 64.4 73.2 73.6 55.7 Equity ratio (%) (market value basis) 61.4 80.7 101.1 120.3 64.2

Interest-bearing debt/cash flow ratio (%) －－－ 18.0 176.1

Interest coverage ratio (times) －－－ 133 34.1 (Note) 1. The ratios above are calculated based on the following consolidated figures.

・Equity ratio: Equity capital/Total assets ・Equity ratio (market value basis): Aggregate market price of stocks/Total assets ・Interest-bearing debt/cash flow ratio: Interest-bearing debt/net cash provided by operating activities ・Interest coverage ratio: Operating cash flows/Interest paid

2. Aggregate market price of stocks is calculated using closing stock price at fiscal year-end × number of outstanding shares at fiscal year-end (after deduction of treasury stocks)

3. Interest-bearing debt: Amount of consolidated balance-sheet liabilities with interest paid. 4. Interest paid: As presented on the Consolidated Statements of Cash Flows.

(Unaudited) 7

(3) Basic policy for the appropriation of profits and dividends for the fiscal period under review and the current fiscal period Management intends to distribute a year-end dividend of ¥10 per share, with due consideration given to a stable return of profits to shareholders and, given fiscal 2014 performance, a certain level of retained earnings needed to facilitate investment opportunities that will enable the Company to achieve sustained growth.

For fiscal 2015, management expects the dividend to reach ¥15 per share, conditioned upon consolidated results and the operating environment that prevails. 2. Business Direction (1) Basic Management Policy We—the Aderans Group—strive to improve corporate value as a business group that views the world as a single market where the Group represents a single company and steadily achieves growth through business development that transcends national borders. We are guided in this effort by a business philosophy that hinges on a corporate mission to utilize our hair-related businesses to help as many people as possible acquire the physical and emotional qualities that underpin the realization of dreams and promote a good impression, and in so doing, bring smiles to faces and support happy lives. (2) Performance Targets On August 25, 2011, management announced a medium-term management plan for the Aderans Group. Although the consolidation of HC (USA) Inc., into the Group in April 2013 caused amortization of intangible assets and goodwill to pile up, Aderans marked the third straight year that consolidatednet sales and operating income reached stated targets. In fiscal 2015, Aderans will strive even harder to implement key strategies based on management strategies and move steadily toward achievement of management targets. (3) Medium- to Long-term Management Strategies In the medium-term management plan, the Aderans Group is taking steps to transition out of a loss structure and into a structure for sustainable growth. In 2014, Aderans will maintain the Group’s evolution into a corporate group boasting a rich array of total hair solutions that are geared to market interest and ultimately attract active demand from around the world. Toward this end, the Group will focus on priority approaches based on six strategies—1) sustainable growth for operations in Japan; 2) expansion and growth of operations overseas; 3) R&D on products that the market seeks; 4) globalization of the supply chain; 5) enhanced group governance and corporate social responsibility; and 6) training and development of global personnel. (4) Corporate Matters to Address Generally speaking fiscal 2014, ended February 28, 2014, was essentially a year characterized by a weaker yen and rising stock prices. These trends were supported by continuing restoration projects in the area devastated by the monster March 2011 earthquake and tsunami as well as increased spending on public works under the economic policies of Abenomics. Fiscal policies, such as quantitative and qualitative monetary easing, also played a part. Against this economic backdrop, domestic operations directed concerted effort into attracting new customers and keeping the interest of existing customers. Toward this end, each company took a comprehensive approach to maintaining product excellence, technological excellence and heartfelt omotenashi, a level of customer-oriented politeness and genuine warmth that makes customers feel welcome, valued and respected, in line with the Group’s stated business philosophy. In the hair-related market to which Aderans belongs, competition is likely to become increasingly fierce. Given this scenario, the Company will strive to reinforce its connection to customers by securing a suitable number of essential personnel to interact directly with customers in the men’s and women’s segments and to ensure that the techniques and customer service capabilities of all salon staff are at a uniformly high level throughout the network. Meanwhile, overseas operations marked a full-scale presence in the hair solutions business in the United States with the April 2013 consolidation of major U.S. men’s wig company HC (USA) Inc. under the Group umbrella. In fiscal 2015, Aderans will encourage stronger ties between HC (USA) Inc. and Bosley Inc., the core company in the Group’s hair-transplantation segment, to fully demonstrate synergies in the United States. In China, customer-attracting wig fairs and try-on events, like those held in Japan, proved successful and prompted the opening of four new salons inside department stores, primarily in Shanghai, in fiscal 2014. Efforts in China will continue in fiscal 2015 to boost brand recognition higher and to attract more customers through wig fairs and try-on events at department stores and through access to additional salons. The objectives are to increase the base of new customers by expanding the reach of advertising and to acquire a larger slice of the local market. In Europe, the Group’s presence was strengthened in fiscal 2014 with the inclusion of a retail shop for medical-use wigs in the Netherlands and a sales agent for medical-use wigs in Scotland. In fiscal 2015, local operations will continue to promote fashion wigs and medical-use wigs but also run a test-marketing program to gauge interest in custom-made wigs.

(Unaudited) 8

Also of note, Aderans welcomed the start of production at its factory in Laos in 2012 and opened its second factory in the Philippines in September 2013 to shorten the wait time for custom-made wigs in the domestic market and to disperse production facility risk. Efforts to improve the quality of ready-made wigs include better structures at facilities producing Group products outside Japan. In 2015, efforts to speed delivery times and enhance quality will be even more of a priority, with greater attention to higher productivity, as well. In addition, by putting into practice a global policy formulated in fiscal 2014, Aderans will ensure stronger Group governance and a better compliance structure in fiscal 2015. Finally, to achieve the growth plans laid out for the Group, Aderans will pursue a deeper capitalization strategy, mainly to facilitate aggressive M&As, while strengthening the management foundation and securing stable earnings.

(Unaudited) 9

3. Consolidated Financial Statements (1) Consolidated Balance Sheets Fiscal 2013

as of February 28, 2013

Fiscal 2014 as of

February 28, 2014 Millions of yen Millions of yen

Assets Current assets Cash and deposits 14,001 10,755 Notes and accounts receivable - trade 4,961 6,248 Commercial goods and finished goods 2,882 3,865 Work in process 235 415 Raw materials and supplies 858 1,007 Deferred tax assets 851 2,861 Others 1,266 2,226 Allowance for doubtful accounts (213) (269)Total current assets

Fixed assets 24,845 27,111

Tangible fixed assets Buildings and structures 14,509 16,403 Accumulated depreciation (11,515) (11,991) Buildings and structures (net) 2,993 4,412 Land 4,081 3,921 Lease assets 908 1,207 Accumulated depreciation (102) (150) Lease assets (net) 805 1,056 Others 6,304 7,851 Accumulated depreciation (5,136) (5,518) Others (net) 1,167 2,333Total tangible fixed assets 9,047 11,723 Intangible fixed assets Goodwill 522 6,550 Customer-related intangible assets ― 7,502 Others 2,549 6,239Total intangible fixed assets 3,072 20,292 Investments and other fixed assets Investment securities 207 1,153 Long-term loans receivable 402 403 Deferred tax assets 259 155 Guarantee deposits 3,222 3,202 Others 422 389 Allowance for doubtful accounts (576) (540)Total investments and other fixed assets Total fixed assets

3,93916,059 4,764

36,780Total assets 40,904 63,892

(Unaudited) 10

Fiscal 2013 as of

February 28, 2013

Fiscal 2014 as of

February 28, 2014 Millions of yen Millions of yen

Liabilities Current liabilities Notes and accounts payable – trade 483 1,174 Current portion of long-term loans

receivable 8 1,051

Lease obligations 566 109 Accounts payable 2,129 1,978 Accrued corporate and other taxes 242 586 Deferred tax liabilities 2 4 Advances received 1,105 1,990 Allowance for employees’ bonuses 1,020 1,029 Allowance for product guarantee 78 100 Allowance for returned goods 132 136 Allowance for loss on store closure 21 53 Asset retirement obligations 27 65 Others 2,033 2,756Total current liabilities 7,852 11,036 Fixed liabilities Long-term loans payable 1 8,662 Lease obligations 335 951 Deferred tax liabilities 56 4,739 Allowance for employees’ severance

and retirement benefits 1,064 1,380

Asset retirement obligations 1,019 985 Others 356 313Total fixed liabilities 2,833 17,032

Total liabilities 10,685 28,069Net Assets Shareholders’ equity Common stock Capital surplus Retained Earnings Treasury stock Total shareholders’ equity Accumulated other comprehensive income

12,94413,15714,268(7,020)

12,94413,15718,268(7,022)

33,349 37,348

Unrealized gains (losses) on investment securities 11 22

Foreign currency translation adjustments

(3,274) (1,810)

Total accumulated other comprehensive income (3,262) (1,788)

Stock acquisition rights 48 154Minority interests 83 109

Total net assets 30,219 35,823Total liabilities and net assets 40,904 63,892

(Unaudited) 11

(2) Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income

Fiscal 2013 (March 1, 2012 through

February 28, 2013)


February 28, 2014) Millions of yen Millions of yen

Net sales 51,089 67,755 Cost of sales 9,385 13,817

Gross profit 41,704 53,938 Selling, general and administrative expenses 38,145 50,321 Operating income (loss) 3,559 3,616 Non-operating income 505 1,475 Interest received 28 17 Dividends received 1 1 Rent on real estate 59 58 Foreign exchange profits 302 1,213 Others 114 184 Non-operating expenses 215 610 Interest paid 31 209 Rent on real estate 17 18 Commission paid 112 322 Transfer to allowance for doubtful

accounts 35 19

Others 18 39 Ordinary profit (loss) 3,849 4,481

Extraordinary income 1 3 Gain on sale of fixed assets 1 3 Extraordinary expenses 783 743 Loss on sale of fixed assets 0 4 Loss on disposal of fixed assets 1 19 Impairment loss 475 375 Loss on store closures 46 112 Losses on business restructuring ― 225 Loss on business of subsidiaries and affiliates 208 ― Others 50 5 Income (loss) before income taxes 3,068 3,741 Corporate, inhabitant and business taxes 286 613

Adjustments to corporate and other taxes (595) (1,177) Total income taxes (309) (563) Income before minority interests 3,377 4,305 Minority interests 76 23

Net income(loss) 3,301 4,281

(Unaudited) 12

Consolidated statements of comprehensive income Fiscal 2013

(March 1, 2012 through February 28, 2013)


February 28, 2014) Income before minority interests 3,377 4,305Other comprehensive income Unrealized gain (loss) on available-for-sale securities

15 10

Foreign currency translation adjustments 624 1,400Share of other comprehensive income of

entities accounted for using equity method ― 64

Total other comprehensive income 639 1,476Comprehensive income 4,017 5,781 Comprehensive income attributable to shareholders of Aderans Co., Ltd. 3,941 5,755 minority interests 76 25

(Unaudited) 13

(3) Consolidated statements of changes in shareholders’ equity Fiscal 2013 (March 1, 2012 through February 28, 2013)

Millions of yen Shareholders’ Equity

Common Stock Capital Surplus Retained Earnings Treasury Stock Total of Shareholders’

Equity Balance at beginning of fiscal year

12,944 13,157 10,934 (6,987) 30,048

Changes Net income (loss) 3,301 3,301Purchases of

treasury stock (0) (0)

Disposal of treasury stock

32 (32) 0

Net changes in items other than

shareholders’ equity during fiscal year

Total changes ― ― 3,334 (33) 3,301Balance at end of fiscal year

12,944 13,157 14,268 (7,020) 33,349

Accumulated other comprehensive income

Stock acquisition rights

Minority Interests

Total Net Assets

Unrealized gain (loss) on other

securities

Foreign currency translation adjustment

Total accumulated other comprehensive

income Balance at beginning of fiscal year

(3) (3,898) (3,902) 15 ― 26,161

Changes Net income (loss) 3,301Purchases of

treasury stock (0)


0

Net changes in items other than shareholders’ equity during fiscal year

15 624 639 32 83 756

Total changes 15 624 639 32 83 4,057Balance at end of fiscal year

11 (3,274) (3,262) 48 83 30,219

(Unaudited) 14

Fiscal 2014 (March 1, 2013 through February 28, 2014) Millions of yen Shareholders’ Equity

Common Stock Capital Surplus Retained Earnings Treasury Stock Total of

Shareholders’ Equity

Balance at beginning of fiscal year

12,944 13,157 14,268 (7,020) 33,349

Changes Dividends from surplus

(368) (368)

Net income (loss) 4,281 4,281Purchases of

treasury stock (1) (1)

Change in scope of consolidation

86 86



Total changes ― ― 4,000 (1) 3,998Balance at end of fiscal year

12,944 13,157 18,268 (7,022) 37,348

Accumulated other comprehensive income

Stock acquisition

rights

Minority Interests

Total Net Assets

Unrealized gain (loss) on

other securities

Foreign currency

translation adjustment

Total accumulated

other comprehensive


11 (3,274) (3,262) 48 83 30,219

Changes Dividends from surplus

(368)

Net income (loss) 4,281Purchases of

treasury stock (1)

Change in scope of consolidation

86



10 1,463 1,474 105 25 1,605

Total changes 10 1,463 1,474 105 25 5,604Balance at end of fiscal year

22 (1,810) (1,788) 154 109 35,823

(Unaudited) 15

(4) Consolidated statements of cash flows Fiscal 2013




Cash flows from operating activities Income (loss) before income taxes 3,068 3,741 Depreciation and amortization 990 2,795 Impairment loss 475 375 Amortization of goodwill 84 339 Loss on disposal of fixed assets 1 19 Loss on valuation of investment securities 46 ―

Change in allowance for employees’ bonuses 180 (114) Increase in employees’ severance and retirement

benefits 131 268

Increase in allowance for loss on store closing (2) 86 Interest and dividends received (29) (18) Interest paid 31 209 Change in notes and accounts receivable (505) (403) Change in inventories (859) (124) Change in notes and accounts payable 171 119 Change in guarantee deposits 17 161 Others 259 (701) Subtotal 4,060 6,754 Proceeds from interest and dividend income 28 89 Payment of interest (32) (179) Insurance income 653 ―

Payment of income taxes (330) (339) Net cash (used in) provided by operating activities 4,378 6,325Cash flows from investing activities Purchase of time deposits (227) 231 Purchase of property, plant and equipment (1,097) (1,326) Proceeds from sales of property, plant and

equipment 6 5

Purchase of intangible fixed assets (361) (423) Purchase of investment securities (2) (103) Purchase of shares in subsidiaries resulting in

change in scope of consolidation (470) (16,454)

Others (85) 34 Net cash provided by (used in) investing activities (2,238) (18,036)

(Unaudited) 16

Fiscal 2013




Cash flows from financing activities Proceeds from long-term loans ― 10,500 Repayment of long-term loans (7) (797) Repayment of lease obligations (101) (71) Payment to acquire treasury stock (0) (1) Cash dividends paid ― (366) Cash dividends paid to minority shareholders (71) (16) Others ― (210) Net cash used in financing activities (180) 9,036

Effects of exchange rate on cash and cash equivalents

279 (522)

Net increase (decrease) in cash and cash equivalents 2,239 (3,197)Cash and cash equivalents at beginning of fiscal year

11,365 13,604

Increase in cash and cash equivalents from newly consolidated subsidiary

― 120

Cash and cash equivalents at fiscal year-end 13,604 10,528

(Unaudited) 17

(5) Notes regarding Consolidated Financial Statements [Notes on assumption of going concern] Not applicable [Basis for preparation of consolidated financial statements] 1. Scope of consolidation (i) Aderans has 53 consolidated subsidiaries. Major consolidated subsidiaries under the Aderans Group umbrella are listed below. Aderans America Holdings, Inc.(overseas subsidiary) Aderans Europe B.V. (overseas subsidiary) Aderans Thai., Ltd. (overseas subsidiary) HC (USA) Inc. (overseas subsidiary) As of fiscal 2014, the scope of consolidation includes HC ((USA) Inc. and its 10 subsidiaries and one other company through the purchase of shares and also includes Aderans Singapore Pte., Ltd., because the significance of this subsidiary has increased. In addition, Hair Trust Holdings Co., Ltd. and one other company have been excluded from the scope of consolidation due to the completion of liquidation procedures. (ii) Names of significant unconsolidated subsidiaries Pal Messe Co. Ltd. Reasons for exclusion from scope of consolidation

Two unconsolidated subsidiaries, including Pal Messe Co., Ltd., are excluded from the scope of consolidation because they are all small in scale, and combined total assets, net sales, net income (loss) (corresponding to equity stakes) and other amounts have no material impact on consolidated financial statements. 2. Application of equity method (i) There are no companies accounted for by the equity method. (ii) Number of affiliates accounted for under the equity method and names of major companies There are two affiliates accounted for under the equity method. Names of major companies Hair Club for Men of Milwaukee, Ltd. Hair Club for Men, Ltd. (an Illinois corporation) Because HC (USA) Inc. was turned into a subsidiary, the company’s two affiliated companies were included in the scope of equity-method application from the fiscal year ended February 28, 2014. (iii) Names of significant unconsolidated subsidiaries not accounted for by the equity method Pal Messe Co., Ltd. Reasons for non-application of the equity method

The unconsolidated company for which the equity method is not applied has minimal impact on consolidated financial statements, specifically such financial components as net income (loss) (corresponding to equity stakes) and retained earnings (corresponding to equity stakes), were it to be excluded from the scope of equity method application, and carries no overall significance, either, so it is in fact excluded from the scope of equity method application. (iv) Noteworthy issues regarding procedures for application of equity method For companies that have a settlement date different from the consolidated settlement date, the Company uses the financial statements associated with the business years of those companies. 3. Issues concerning settlement dates of consolidated subsidiaries Of the Company’s consolidated subsidiaries, consolidated subsidiaries have fiscal periods ending December 31. Because the gap between the end of these subsidiaries’ fiscal periods and the date of consolidated settlement is less than three months, consolidated financial statements for the fiscal period are based on the financial statements prepared by these subsidiaries for their respective fiscal periods. If material transactions occurred between December 31 and February 28, the consolidated financial statements are adjusted accordingly.

(Unaudited) 18

4. Accounting principles and methods I. Principles and methods of valuation of important assets i) Securities

Stocks of subsidiaries: Cost recorded using the moving-average method

Other securities: Securities quoted on exchanges: Market value method based on market value at fiscal year end.

Appraisal differences are dealt with by means of the direct capital influx method, with cost of securities sold calculated with the moving average method. ii) Inventories Goods and products:

For custom-made wigs, the Company applies the actual cost method to unit cost (a method that estimates the net sale value for assets with noticeably diminished profitability and drops the book value by this amount). For ready-made wigs, the Company mainly applies the moving-average cost method to unit cost (a method that estimates the net sale value for assets with noticeably diminished profitability and drops the book value by this amount). Overseas consolidated subsidiaries use either the first-in first-out cost method or the moving-average cost method. Raw materials and work in process: Overseas consolidated subsidiaries use either the first-in first-out cost method or the moving-average cost method. Supplies:

The moving-average cost method to unit cost (a method that estimates the net sale value for assets with noticeably diminished profitability and drops the book value by this amount). However, overseas consolidated subsidiaries use the first-in first-out cost method. II. Depreciation of important non-current assets i) Tangible fixed assets, excluding lease assets:

These assets are accounted for with the declining-balance method, although buildings (excluding annexes) acquired since April 1, 1998, are accounted for with the straight-line depreciation method. The tangible non-current assets of overseas consolidated subsidiaries are primarily accounted for with the straight-line method. Estimated useful life of principal items is as follows: Buildings and structures: 3-47 years ii) Intangible fixed assets, excluding lease assets:

The straight-line method is applied. Software for in-house use is accounted for with the straight-line method over the estimated useful life (five years). Customer-related assets are accounted for by the straight-line method over the effective life of said assets (8 years). iii) Lease assets:

Lease assets related to finance lease transactions other than those deemed to transfer ownership The lease period shall be the period of asset depreciation and will be determined under a method with zero residual value over the lease period. iv) Long-term prepaid expenses:

Equal depreciation III. Standards for important allowances i) Allowance for doubtful accounts:

To prepare against credit losses, Aderans makes additions to this allowance on the basis of loan loss ratios for standard loans, and on an individual basis for loans considered unlikely to be repaid in full. For overseas consolidated subsidiaries, the estimated uncollectable amount for individual accounts is added.

ii) Allowance for bonuses to employees: To prepare for bonus payments to employees, the reporting company makes additions to the allowance in accordance with the estimated amounts payable.

iii) Allowance for product warranties: To prepare for expenses arising from free warranties on goods and products sold, the reporting company adds an appropriate

iv) Allowance for returned goods: The reporting company makes provisions in order to account for losses due to returns of sold products. Amounts of the

(Unaudited) 19

allowance for returned goods are calculated by multiplying the average returned goods ratios of the current period and previous fiscal year by the gross profit margin of the current period, and adding this total to the balance of accounts receivable.

v) Allowance for loss on store closing To prepare against loss by closing store, the reporting company make additions to the allowance in accordance with the estimated amounts payable. vi) Retirement benefits allowance — employees

The reporting company and some of its overseas subsidiaries have recorded retirement benefits based on projected benefit obligations and plan assets at the balance sheet date as a reserve for retirement benefits for employees. Past service debt is expensed in the consolidated accounting period in which it occurs by the straight-line method within a fixed period (five years) for the estimated average remaining life of service by employees. Actuarial difference is expensed in the consolidated accounting period following that in which it occurs by the straight-line method within a fixed period (five years) for the estimated average remaining life of service by employees.

IV. Translation of assets and liabilities denominated in foreign currencies into yen Assets and liabilities denominated in foreign currencies are converted into yen at the rates of exchange in effect at the end of the consolidated period, with translation differences treated as gains or losses. The assets and liabilities of overseas consolidated subsidiaries are also converted into yen at the rates of exchange in effect at the end of the current fiscal year. Income, losses, and expenses are converted into yen using average exchange rates over the period in question, and translation differences are recorded in the shareholders’ equity section of the balance sheets under foreign currency translation adjustments. V. Amortization method for goodwill and amortization period Goodwill is amortized equally over a reasonable number of years within 20 years. However, goodwill generated on or before March 31, 2010, is amortized equally over 10 years. VI. Scope of funds in the consolidated statements of cash flows Funds (cash and cash equivalents) in the consolidated statements of cash flows comprise cash in hand, demand deposits that can be withdrawn at any time, and short-term investments that are highly liquid, easily convertible into cash, have little risk of fluctuation in value, and that mature within three months or less of the date of acquisition. VII. Others Consumption and other taxes Aderans applies the tax-exclusion accounting method to national and local consumption taxes. [Changes in accounting policy]

[Changes in accounting policies which are difficult to distinguish from changes in accounting estimates] As a result of revision to the Corporation Tax Law, regarding tangible fixed assets acquired on or after March 1, 2013, the Company has adopted the depreciation method based on the Corporation Tax Law after revision, effective from the first quarter of fiscal 2014. The effect of this change on operating income, ordinary income, and income before income taxes in the current fiscal year is minor. [Change in method of presentation] (Consolidated balance sheets) 1. Accrued legal welfare expenses on allowance for employees’ bonuses were previously included in the line item “Allowance for employees’ bonuses” on the consolidated balance sheets. But to facilitate comparability of data in the consolidated financial statements, the Company includes this amount in “Other” under current liabilities, effective from fiscal 2014, ended February 28, 2014. In the previous fiscal year, “Current portion of long-term loans receivable” was included in the line “Others” under current liabilities. Because this amount exceeded 5% of the combined total for liabilities and net assets in fiscal 2014, the Company lists the amount separately, effective from fiscal 2014, ended February 28, 2014. The consolidated balance sheets for the previous year have been restated to reflect these changes in the method of presentation. Consequently, the ¥1,172 million on the “Allowance for bonuses” line under current liabilities and the ¥1,890 million

(Unaudited) 20

on the line “Others,” as presented in the consolidated balance sheets in fiscal 2013, have been restated and are presented as ¥8 million on the“Current portion of long-term loans receivable” line, “¥1,020 million on the Allowance for bonuses” line, and ¥2,033 million on the “Others” line. 2. In the previous fiscal year, “Long-term loans payable” was included in “Others” under fixed liabilities. Because this amount exceeded 5% of the combined total for liabilities and net assets in fiscal 2014, the Company has listed the amount separately, effective from fiscal 2014, ended February 28, 2014. The consolidated balance sheets for the previous year have been restated to reflect these changes in the method of presentation. Consequently, the ¥358 million presented in “Others” under fixed liabilities in the consolidated balance sheets for fiscal 2013 has been restated and is presented as ¥1 million on the “Long-term loans payable” line and ¥356 million on the “Others” line (Consolidated statements of income) In the previous fiscal year, “Loss on store closures” was included in “Others” under extraordinary expenses. Because this amount exceeded 10% of net extraordinary expenses in fiscal 2014, the Company lists the amount separately, effective from fiscal 2014, ended February 28, 2014. The consolidated statements of income for the previous fiscal year have been restated to reflect these changes in the method of presentation. Consequently, the ¥97 million presented in “Others” under extraordinary expenses in fiscal 2013 has been separated and is presented as ¥46 million on the “Losses on store closures” line and ¥50 million on the “Others” line. (Consolidated statements of cash flows) 1. The consolidated financial statements for the previous fiscal year have been restated, following changes in the presentation method for accrued legal welfare expenses on allowance for employees’ bonuses. Consequently, the ¥215 million shown on the line “Increase (decrease) in allowance for employees’ bonuses” and the ¥226 million shown on the line “Others” in “Cash flows from operating activities” in fiscal 2013 havebeen restated and are presented as ¥180 million on the “Increase (decrease) in allowance for employees’ bonuses” line and ¥259 million on the “Others” line. 2. “Repayment of long-term loan payables” was included in “Others” under “Cash flows from financing activities” in fiscal 2013. Because the weight of this amount increased in fiscal 2014, the Company has listed it separately, effective from fiscal 2014, ended February 28, 2014. The consolidated financial statements for fiscal 2013 have been restated to reflect these changes in themethod of presentation. Consequently, the ¥ (7) million included in “Others” under “Cash flows from financing activities” has been restated and is presented as ¥ (7) million on the “Repayment of long-term loan payables” line and ¥0 on the “Others” line. [Segment information] (i) Summary of reporting segments

The Company’s reporting segments are segments for which separate financial information is available and subject to periodic reviews that enable the Board of Directors to properly allocate management resources and evaluate performance.

Previously, the Company had three reporting segments—the Aderans Business, the Fontaine Business and the Bosley Business—but from the first quarter of fiscal 2014, a fourth segment—the Overseas Wig Business—has been added.

This change reflects a review of overseas subsidiaries according to performance results, prompted by the addition of HC (USA) Inc. to the Group as a subsidiary from the first quarter of fiscal 2014.

Also, the beauty supply route, which previously fell under the Fontaine Business, is now under Other Operations due to organizational changes.

Segment information for the corresponding quarter of fiscal 2013 is reflected under the new segment names. (ii) Information regarding sales and profit or loss, assets and other items by reporting segment The accounting method for the reported business segments is almost the same as that explained in “Basis for preparation of consolidated financial statements”. Segment earnings are operating income-based figures. Intersegment earnings and transfer are calculated based on market prices.

(Unaudited) 21

(iii) Information regarding sales and profit or loss, assets and other items by reporting segment Fiscal 2013 (March 1, 2012 through February 28, 2013)

Millions of yen

Reporting segments Other

Operations

(Note 1) Total

Adjustment (Note 2)

Quarterly Consolidated Statements of Income

amount (Note 3)

Aderans Business

Fontaine Business

Bosley Business

Overseas Wig

Business

Sales External customers 25,644 8,536 8,401 5,214 3,293 51,089 ― 51,089

Inter-segment ― ― ― 2 2,961 2,963 (2,963) ― Total 25,644 8,536 8,401 5,216 6,254 54,053 (2,963) 51,089

Segment income (loss) 6,793 3,168 764 (293) (259) 10,173 (6,614) 3,559 Other Depreciation and amortization

231 71 233 82 55 675 312 988

Amortization of goodwill

― ― 11 102 ― 113 ― 113

Notes: 1. The classification “Other Operations” represents business segments not included under other reporting segments and is the beauty supply route business, medical-use wig business and electronic commerce business.

2. The ¥ (6,614) million segment income (loss) adjustment includes ¥ 103 million in inter-segment elimination and ¥ (6,717) million in corporate expenses not included in any segment. Primary corporate expenses are general administrative expenses which are not associated with reporting segments.

3. The 312 million yen of adjustment depreciation and amortization is depreciation and amortization of assets related to the administrative division, which does not belong to the reporting segments.

4. Segment income has been reconciled with operating income on the Consolidated Statements of Income. 5. Assets are not listed in the table above because assets are distributed by segment.

Fiscal 2014 (March 1, 2013 through February 28, 2014) Millions of yen

Reporting segments

Other

Operations

(Note 1) Total

Adjustment (Note 2)

Quarterly Consolidated Statements of Income

amount (Note 3)

Aderans Business

Fontaine Business

Bosley Business

Overseas Wig

Business

Sales External customers 28,234 8,987 9,320 17,992 3,219 67,755 ― 67,755

Inter-segment ― ― ― 74 3,216 3,291 (3,291) ― Total 28,234 8,987 9,320 18,067 6,435 71,046 (3,291) 67,755

Segment income (loss) 7,703 2,051 457 (1,234) (476) 8,501 (4,884) 3,616 Other Depreciation and amortization

206 109 202 1,855 135 2,509 282 2,791

Amortization of goodwill

― ― 8 359 ― 368 ― 368

Notes: 1. The classification “Other Operations” represents business segments not included under other reporting segments and is the beauty supply route business, medical-use wig business and electronic commerce business.

2. The ¥ (4,884) million segment income (loss) adjustment includes ¥ 186 million in inter-segment elimination and ¥ (5,071) million in corporate expenses not included in any segment. Primary corporate expenses are general administrative expenses which are not associated with reporting segments.

3. The 282 million yen of adjustment depreciation and amortization is depreciation and amortization of assets related to the administrative division, which does not belong to the reporting segments.

(Unaudited) 22

4. Segment income has been reconciled with operating income on the Consolidated Statements of Income. 5. Assets are not listed in the table above because assets are distributed by segment. [Per share data]

Items Fiscal 2013



February 28, 2014) Net assets ¥817.40 ¥966.12Net income (loss) ¥89.69 ¥116.32Fully diluted earnings (loss) An amount for fully diluted income per share is

not disclosed here because no potential securities have been issued.

¥116.15

Note: Basic criteria for calculation

1． Shareholders’ equity per share

Items Fiscal 2013 (as of February 28, 2013)

Fiscal 2014 (as of February 28, 2014)

Total shareholders’ equity 30,219 35,823Deduction amount from total shareholder’ equity (Millions of yen) [Share option] [Minority interests]

132

[48][83]

263

[154][109]

Shareholders’ equity for common stock (Millions of yen)

30,086 35,560

Number of shares issued (shares)

40,213,388 40,213,388

Common shares held as treasury stock (shares)

3,405,266 3,406,272

Number of common shares used in the ca1culation of shareholders’ equity per share (shares)

36,808,162 36,807,116

2． Net income and fully diluted net income per share

Items Fiscal 2013



February 28, 2014) Net income (Millions of yen) 3,301 4,281Amount not attributed to common stock (Millions of yen)

― ―

Net income for common stock (Millions of yen)

3,301 4,281

Average number of shares of common stock for the period (Shares)

36,808,209 36,807,604

Fully diluted net income per share Increased shares of common stock (shares)

― 55,576

[Share option] ― [55,576]

[Significant subsequent events]

Not applicable ============================================================

(END)

Non-Consolidated

(Unaudited) 23

1. Non-consolidated financial statements (1) Non-consolidated balance sheets

Fiscal 2013 as of

February 28, 2013Fiscal 2014 as of

February 28, 2014Yen in millions Yen in millions

Assets Current assets Cash and cash equivalents 11,042 6,844 Notes 708 718 Accounts receivable 2,953 3,512 Commercial goods 1,580 2,027 Inventories 393 397 Prepaid expenses 356 436 Deferred tax assets 819 1,426 Short-term loans to affiliates 1,535 1,906 Others 273 494 Allowance for doubtful accounts (11) (2) Total current assets 19,653 17,763 Fixed assets Tangible fixed assets Buildings 12,766 12,627 Accumulated depreciation (10,305) (10,291) Buildings (Net) 2,461 2,335 Structures 125 150 Accumulated depreciation (108) (102) Structures (Net) 16 48 Machinery 115 122 Accumulated depreciation (114) (118) Machinery (Net) 0 4 Vehicles 0 0 Accumulated depreciation (0) (0) Vehicles (Net) ― ―

Equipment 2,766 2,706 Accumulated depreciation (2,487) (2,423) Equipment (Net) 278 283 Land 4,111 3,944 Lease assets 908 1,197 Accumulated depreciation (102) (150) Lease assets (Net) 805 1,047 Construction in progress account 1 281 Total tangible fixed assets 7,675 7,944 Intangible fixed assets Patent rights 0 0 Leasehold right 1,346 1,219 Trade names 22 18 Software 621 645 Others 108 108 Total intangible fixed assets 2,099 1,992 Investments and other fixed assets Investment securities 113 232 Investment securities in affiliates 5,020 5,018 Equity funds 1 3 Investments in partnerships with affiliates 373 116 Long-term loans receivable 400 400 Long-term loans to affiliates 1,705 18,488

Claims provable in bankruptcy, claims provable in rehabilitation and other 7 0

Long-term prepaid expenses 23 28 Deferred tax assets 172 131 Guarantee deposits 3,108 2,936 Others 182 143 Allowance for doubtful accounts (1,792) (540) Total investments and other fixed assets 9,316 26,959 Total fixed assets 19,091 36,895 Total assets 38,744 54,658

Non-Consolidated

(Unaudited) 24

Fiscal 2013 as of

February 28, 2013Fiscal 2014 as of

February 28, 2014Yen in millions Yen in millions

Liabilities Current liabilities Accounts payable - trade 297 272 Current portion of long-term loans receivable ― 1,050 Lease obligations 562 105 Accrued accounts payable 1,547 1,792 Accrued expenses payable 518 556 Accrued consumption tax 191 467 Accounts payable 1,086 1,110 Deposits received 66 64 Unearned revenue 1 1 Allowance for employees’ bonuses 1,019 950 Allowance for product guarantee 78 100 Allowance for returned goods 132 136 Allowance for loss on store closing 2 53 Asset retirement obligations 27 65 Others 185 125 Total current liabilities 5,716 6,851 Fixed liabilities Long-term loans payable ― 8,662 Lease obligations 329 948 Allowance for employees’ severance and

retirement benefits 761 1,012 Asset retirement obligations 1,019 985 Others 166 137 Total current liabilities 2,275 11,746 Total fixed liabilities 7,992 18,598Net Assets Shareholders’ equity Common stock 12,944 12,944 Capital surplus Additional paid-in capital 13,157 13,157 Total capital surplus 13,157 13,157 Earned surplus Earned reserve 1,022 1,022 Other reserve Reserve for reduction entry of buildings 0 0 General reserves 25,000 ― Retained earnings carried forward (14,377) 15,820 Total earned surplus 11,644 16,842 Treasury stock (7,035) (7,037) Total shareholders’ equity 30,710 35,906 Other comprehensive income

Unrealized gains (losses) on investment securities 11 22

Total other comprehensive income 11 22 Stock acquisition rights 29 131 Total net assets 30,752 36,060Total liabilities and net assets 38,744 54,658

Non-Consolidated

(Unaudited) 25

(2) Non-consolidated statements of income Fiscal 2013




Net sales 37,483 40,404 Cost of sales 6,061 6,791 Gross profit 31,421 33,612 Selling, general and administrative expenses 27,978 29,346 Operating income (loss) 3,443 4,266 Non-operating Income 613 2,440 Interest received 40 357 Dividends received 1 527 Rent on real estate 59 58 Foreign exchange profits 276 1,073 Consulting fee income 141 306 Others 95 115 Non-operating expenses 207 500 Interst paid 21 205 Transfer to allowance for doubtful accounts 37 ― Rent on real estate 17 18 Commission paid 112 239 Others 18 36 Ordinary profit 3,850 6,205

Extraordinary income 0 0 Gain on sale of fixed assets 0 0 Extraordinary expenses 722 714 Loss on sale of fixed assets ― 0 Loss on disposal of fixed assets 1 19 Impairment loss 475 325 Unrealized loss on investment in affiliates 46 ― Loss on valuation of investments in affiliates 173 256 Loss on store closures 26 112

Income (loss) before income taxes 3,128 5,492 Corporate, inhabitant and business taxes 133

498

Adjustments to corporate and other taxes Total income taxes

(574)(440)

(571)(72)

Net income 3,568 5,565

Non-Consolidated

(Unaudited) 26

(3) Non-consolidated statements of changes in shareholders’ equity Fiscal 2013 (March 1, 2012 through February 28, 2013)

Millions of yen Shareholders’ Equity

Common Stock

Capital Surplus Retained Earnings

Additional paid-in capital

Total of capital surplus

Earned reserve

Other reserve Total of retained earnings

Reserve for reduction entry of

buildings

General reserves

Retained earnings carried

forward


12,944 13,157 13,157 1,022 0 25,000 (17,946) 8,076

Changes Net income

(loss) 3,568 3,568

Purchases of treasury stock


(0) (0)

Reverse of reserve for reduction entry of buildings

(0) 0 ―



Total changes ― ― ― ― (0) ― 3,568 3,568Balance at end of fiscal year

12,944 13,157 13,157 1,022 0 25,000 (14,377) 11,644

Shareholders’ Equity Other comprehensive income


Total Net Assets Treasury Stock

Total of Shareholders’

Equity


securities

Total of Other comprehensive


(7,035) 27,141 (3) (3) ― 27,137

Changes Net income (loss) 3,568 3,568

Purchases of treasury stock

(0) (0) (0)


0 0 0


― ―



15 15 29 45

Total changes 0 3,568 15 15 29 3,614Balance at end of fiscal year

(7,035) 30,710 11 11 29 30,752

Non-Consolidated

(Unaudited) 27

Fiscal 2014 (March 1, 2013 through February 28, 2014) Millions of yen Shareholders’ Equity

Common Stock

Capital Surplus Retained Earnings

Additional paid-in capital

Total of capital surplus

Earned reserve

Other reserve Total of retained earnings

Reserve for reduction entry of

buildings

General reserves

Retained earnings carried

forward


12,944 13,157 13,157 1,022 0 25,000 (14,377) 11,644

Changes Dividends of surplus

(368) (368)

Net income (loss) 5,565 5,565 Purchases of treasury stock


(0) 0 ―

Reverse of general reserves

(25,000) 25,000 ―



Total changes ― ― ― ― (0) (25,000) 30,197 5,197Balance at end of fiscal year

12,944 13,157 13,157 1,022 0 ― 15,820 16,842

Shareholders’ Equity Other comprehensive income


Total Net Assets Treasury Stock

Total of Shareholders’

Equity


securities

Total of Other comprehensive


(7,035) 30,710 11 11 29 30,752

Changes Dividends of surplus

(368) (368)

Net income (loss) 5,565 5,565 Purchases of treasury stock

(1) (1) (1)


― ―

Reverse of general reserves

― ―



10 10 101 112

Total changes (1) 5,196 10 10 101 5,308Balance at end of fiscal year

(7,037) 35,906 22 22 131 36,060

============================================================

(END)

Documents

Aderans Co., Ltd.pdf.irpocket.com/C8170/YWWN/CFqs/wqcV.pdf · 2014-04-14 · (iii) Bosley Business (Hair transplantation) The Bosley business, which handles the hair-transplantation