TKLF 6-K
Tokyo Lifestyle Co., Ltd. (TKLF)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM6-K
REPORTOF FOREIGN PRIVATE ISSUER
PURSUANTTO RULE 13a-16 OR 15d-16
UNDERTHE SECURITIES EXCHANGE ACT OF 1934
Forthe month of June 2023
CommissionFile Number: 001-41181
YoshitsuCo., Ltd
HarumiBuilding, 2-5-9 Kotobashi,
Sumida-ku,Tokyo, 130-0022
Japan
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Convocationof Annual General Meeting of Shareholders of Yoshitsu Co., Ltd for Fiscal Year 2022
In accordance with the rules and regulations of the Japanese Companies Act, Yoshitsu Co., Ltd has sent a notice and accompanying information, including proxy instructions, to all holders of its ordinary shares and American Depositary Shares with respect to its 17th Annual General Meeting to be held in Tokyo, Japan on June 30, 2023. A complete copy of the notice is attached as Exhibit 99.1.
The notice furnished in this report as Exhibit 99.1 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Yoshitsu Co., Ltd | ||
|---|---|---|
| Date:<br> June 21, 2023 | By: | /s/<br> Mei Kanayama |
| Name: | Mei<br> Kanayama | |
| Title: | Representative<br> Director and Director<br><br> (Principal Executive Officer) |
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EXHIBITINDEX
| Exhibit No. | Description |
|---|---|
| 99.1 | Notice of the 17th Ordinary General Meeting of Shareholders to be held on June 30, 2023 |
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Exhibit99.1
[This is an English translation of the original issued in Japanese]
[Note]The Company assumes no responsibility for this translation or for direct, indirect, or other forms of damages arising from the translation.This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between thistranslated document and the Japanese original, the original shall prevail.
June 15, 2023
Harumi Building, 2-5-9 Kotobashi,
Sumida-ku, Tokyo, 130-0022, Japan
Yoshitsu Co., Ltd.
Representative Director and Director
(Principal Executive Officer)
Mei Kanayama
Notice of the 17th Ordinary General Meeting of Shareholders to be held on June 30, 2023.
Dear Shareholders,
We sincerely appreciate your continued support and kind attention. We would like to inform you that our 17th Ordinary General Meeting of Shareholders will be held as scheduled below. We kindly request your attendance at the meeting. Please note that if you are unable to attend the meeting, you have the option to exercise your voting rights by submitting a written form. We kindly ask you to review the enclosed Shareholders’ Meeting Reference Documents and indicate your approval or disapproval of the enclosed voting form. Please ensure the form arrives by Thursday, June 29, 2023, at 4:30 PM, Japan Standard Time.
| 1. | Date<br> and Time: Friday, June 30, 2023, at 11:00 AM (Registration starts at 10:00 AM), Japan Standard<br> Time |
|---|---|
| 2. | Address:<br> 5th Floor, Harumi Building, 2-5-9 Kotohashi, Sumida-ku, Tokyo, Japan |
| --- | --- |
| 3. | Agenda<br> Items |
| --- | --- |
| Report<br> Items: | Regarding<br> the Business Report for the 17th fiscal year (from April 1, 2022, to March 31, 2023), Financial Statements, and the Audit Report<br> on the Financial Statements by the Auditors and the Board of Corporate Auditors, which financial statements were based upon our statutory<br> financial results as prepared in accordance with Japanese GAAP. These results may differ in material respects from the audited consolidated<br> financial results under U.S. GAAP that will be reported later and included in our Annual Report on Form 20-F, which will be filed<br> with the U.S. Securities and Exchange Commission and will be available at www.sec.gov. The discussion of the Japanese GAAP is presented<br> to our shareholders and American Depository Share (“ADS”) holders solely in accordance with requirements under the Japanese<br> Companies Act in connection with our Annual Meeting. |
| --- | --- |
| Resolution<br> items: |
Proposal: Reappointments of four Directors
When attending on the day, we kindly ask that you bring the enclosed notice of convocation, accompanying documents, and reference materials for the shareholders’ meeting. Please also submit the enclosed voting rights exercise form to the reception desk at the venue. Your cooperation is greatly appreciated.
Shareholders’ Meeting Reference Documents
1. Proposals and Reference Items
Proposal: Reappointments of four Directors
The term of the current six Directors will reach an end upon the conclusion of this general meeting. We kindly request the reappointments of four Directors.
The candidates for Directors are as follows:
| Candidate<br> Number | Name<br> (Date of Birth) | Brief<br> Biography, Position, Significant Concurrent Positions, Number of Company’s Shares Held, and Special Interests with the Company. |
|---|---|---|
| 1 | Mei<br> Kanayama<br><br> <br>(October<br> 24, 1979) Reappointment of Director | (Brief<br> Biography, Position)<br><br> <br>November<br> 2000: Joined Yonechiku Co., Ltd.<br><br> <br>September<br> 2007: Left Yonechiku Co., Ltd.<br><br> <br>January<br> 2008: Joined the Company, appointed as a Director of the Company.<br><br> <br>June<br> 2009: Appointed as Representative Director of the Company, currently serving in that position. October 2019: Established Tokyo Lifestyle<br> Co., Ltd (the “Tokyo Lifestyle”), appointed as Representative Director of Tokyo Lifestyle Limited, currently serving<br> in that position.<br><br> <br><br><br> <br>(Significant<br> Concurrent Positions)<br><br> <br>Tokushin<br> Goudou Kaisha: Representative Director<br><br> <br>Tokyo<br> Lifestyle: Representative Director and Director<br><br> <br><br><br> <br>(Number<br> of Company Shares Held)<br><br> <br>25,264,000<br> shares, including:<br><br> <br><br><br> <br>(i) 7,216,436<br> Ordinary Shares held personally by Mr. Kanayama;<br><br> <br><br><br> <br>(ii) 14,775,050<br> Ordinary Shares held through Tokushin G. K., a limited liability company formed under the laws of Japan owned by Mr. Kanayama and<br> his family, for which Mr. Kanayama is the managing member, and accordingly, Mr. Kanayama has voting and dispositive control;<br><br> <br><br><br> <br>(iii) 2,672,460<br> Ordinary Shares held by Grand Elec-Tech Limited; and<br><br> <br><br><br> <br>(iv) 600,054<br> Ordinary Shares held by a minority shareholder.<br><br> <br><br><br> <br>*<br> Grand Elec-Tech Limited and the minority shareholder have delegated to Mr. Kanayama all authority to exercise the voting rights of<br> their Ordinary Shares.<br><br> <br><br><br> <br>(Special<br> Interests with the Company)<br><br> <br>None |
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| 2 | Youichiro<br> Haga<br><br> <br>(July<br> 5, 1966)<br><br> <br>Reappointment<br> of Director | (Brief<br> Biography, Position)<br><br> <br>April<br> 1991: Joined MUFG Bank, Ltd.<br><br> <br>September<br> 2020: Left MUFG Bank, Ltd<br><br> <br>October<br> 2020: Joined the Company as a member of the Finance Department<br><br> <br>June<br> 2021: Appointed as a Director of the Company, currently serving in that position.<br><br> <br><br><br> <br>(Significant<br> Concurrent Positions)<br><br> <br>None<br><br> <br><br><br> <br>(Number<br> of Company Shares Held)<br><br> <br>0<br> share<br><br> <br><br><br> <br>(Special<br> Interests with the Company)<br><br> <br>None |
|---|---|---|
| 3 | Yoji<br> Takenaka<br><br> <br>(August<br> 26, 1963) Reappointment of External Director | (Brief<br> Biography, Position)<br><br> <br>April<br> 1993: Registered as a lawyer.<br><br> <br>April<br> 2005: Established Takenaka Law Office, currently practicing.<br><br> <br>June<br> 2021: Appointed as an External Director of the Company, currently serving in that position.<br><br> <br><br><br> <br>(Significant<br> Concurrent Positions)<br><br> <br>None<br><br> <br><br><br> <br>(Number<br> of Company Shares Held)<br><br> <br>0<br> share<br><br> <br><br><br> <br>(Special<br> Interests with the Company)<br><br> <br>None |
| 4 | Tetsuya<br> Sato<br><br> <br>(May<br> 26, 1970) Reappointment of External Director | (Brief<br> Biography, Position)<br><br> <br>May<br> 1995: Joined Marco Co., Ltd.<br><br> <br>July<br> 2017: Appointed as Representative Director of WDM Co., Ltd.<br><br> <br>July<br> 2019: Appointed as CFO and Director of RSK Co., Ltd., currently serving in that position.<br><br> <br>June<br> 2021: External Director of the Company, currently serving in that position.<br><br> <br><br><br> <br>(Significant<br> Concurrent Positions)<br><br> <br>Director<br> and CFO of RSK Co., Ltd.<br><br> <br><br><br> <br>(Number<br> of Company Shares Held)<br><br> <br>0<br> share<br><br> <br><br><br> <br>(Special<br> Interests with the Company)<br><br> <br>None |
| (Note) | ||
| --- |
1. Mr. Yoji Takenaka and Mr. Tetsuya Sato are candidates for External Directors.
2. Mr. Yoji Takenaka and Mr. Tetsuya Sato have been serving as External Directors of the Company since June 2021, and their term of office will be two years from the conclusion of this general meeting, in the event of their elections.
3. Reasons for the appointment of the candidates as External Directors and the rationale for the Company’s determination that they can fulfill their duties effectively as External Directors.
| ① | Regarding<br> Mr. Yoji Takenaka, we request his appointment as an External Director to utilize his knowledge,<br> experience, and expertise as a lawyer for the benefit of the Company’s management. |
|---|---|
| ② | Regarding<br> Mr. Tetsuya Sato, we request his appointment as an External Director to utilize his extensive<br> experience as a business executive and his broad insights, which will contribute to the management<br> of the Company. |
| --- | --- |
The Company has entered into limited liability agreements (the “Agreements”) with Mr. Yoji Takenaka and Mr. Tetsuya Sato. In the event that their reappointments are approved, we intend to continue the Agreements with them. Under the Agreements, the limit of liability for damages is set at either 10 million Japanese Yen or the amount specified by law, whichever is higher, provided that the performance of their duties is carried out in good faith and without gross negligence.
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FiscalYear 2022 Business Report
From April 1, 2022, to March 31, 2023
StatutoryFinancial Statements Prepared in Accordance with Japanese GAAP
Note:The statutory financial statements on the following pages have been prepared in accordance with Japanese GAAP. These results may differin material respects from our audited consolidated financial results under U.S. GAAP that will be reported at a later date and includedin our Annual Report on Form 20-F, which will be filed with the U.S. Securities and Exchange Commission and available at www.sec.gov.The attached financial statements are provided to our shareholders and ADS holders solely in accordance with requirements under the JapaneseCompanies Act in connection with our Annual Meeting.
1.Current Status of the Company
| (1) | Business<br>Progress and Results |
|---|
During the fiscal year ended March 31, 2023, the global economy was affected by the high global prices of commodities, which led to procurement restrictions and monetary tightening policies that weighed on economic activities. In addition, unstable international conditions persisted, and their impact on the domestic and international economies must be closely monitored.
The domestic inbound market is also recovering on the back of easing restrictions on entry and the weakening of yen. Still, the number of visitors from China remains sluggish, partly due to the zero-corona policy that lasted until December 2022.
Even under these circumstances, we are striving to further strengthen our group brand power with the recent initial public offering (the “IPO”) on the NASDAQ market in the U.S., to further improve ourselves as a company with an international perspective by the acquisition of Tokyo Lifestyle Limited in July 2022, and to use our entry into the Southeast Asian market as a springboard to entry into the global market.
As a result, the Company’s net sales for the fiscal year ended March 31, 2023, were 21,667,575,000 yen, representing a decrease of 15.5% as compared to the net sales for the fiscal year ended March 31, 2022. The Company’s operating income for the fiscal year ended March 31, 2023, was 484,152,000 yen, representing a decrease of 31.5% as compared to the operating income for the fiscal year ended March 31, 2022. The Company’s ordinary income for the fiscal year ended March 31, 2023, was 192,972,000 yen, representing a decrease of 60.4% as compared to the operating income for the fiscal year ended March 31, 2022.
| (2) | Financing |
|---|
The Company procured 8,150,000,000 yen in syndicated loans led by MUFG Bank, Ltd. and Mizuho Bank, Ltd., to provide for working capital needs. The financing amount increased by 650,000,000 yen as compared to the total financing amount for the fiscal year ended March 31, 2022.
| (3) | Significant<br>Reorganization |
|---|
On July 27, 2022, we acquired 100% of the equity interests in Tokyo Lifestyle Limited and Tokyo Lifestyle Limited became our wholly owned subsidiary.
| (4) | Capital<br> Investment |
|---|
Capital investment during the period totaled 176,340,000 yen, and the main items of which are as follows:
Tokyo Lifestyle Nishikasai Branch, newly opened in June 2022.
Tokyo Lifestyle the Family Nishikawaguchi Branch, newly opened in January 2023.
| (5) | Changes<br> in Assets and Profit and Loss |
|---|
(Unit: thousand yen)
| Fiscal year ended March 31,<br><br> 2020) | Fiscal year ended March 31,<br><br> 2021) | Fiscal year ended March 31,<br><br> 2022) | Fiscal year ended March 31,<br><br> 2023) | |||||
|---|---|---|---|---|---|---|---|---|
| Net sales | 15,169,433 | 23,480,468 | 25,655,250 | 21,667,575 | ||||
| Ordinary income | 830,230 | 936,477 | 486,715 | 192,972 | ||||
| Net income | 540,074 | 556,209 | 192,523 | △71,427 | ||||
| Net income per share (yen) | 54,553 | 5,984 | 5 | △1 | ||||
| Total assets | 9,869,635 | 12,394,392 | 14,860,428 | 22,579,256 | ||||
| Net assets | 1,877,636 | 2,583,847 | 5,628,047 | 5,514,702 | ||||
| * | Net<br>income per share is calculated based on the number of shares outstanding at the end of the period. | |||||||
| --- | --- |
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| (6) | Tasks<br> to be undertaken by management |
|---|
Amid the significant changes in the global landscape and business environment caused by the COVID-19 pandemic, we are committed to pursuing the profitability, safety, comfort, and efficiency of various stakeholders, including customers and employees, more than ever before. We are dedicated to striving towards becoming a company that can support the global economy and be worthy of listing on the NASDAQ market in the United States.
Our priority business and financial tasks to be addressed are as follows:
| ① | Improvement<br> and stabilization of financials |
|---|
Through proper financial analysis, we will work to create a financial management system that enables us to quantitatively assess our company and the issues we face, and to strive for improvement.
| ② | Maintaining<br> and developing excellent human resources |
|---|
As we continually accelerate our business growth, we believe that securing and developing excellent human resources is an important issue. We will continue to hire excellent human resources, both new graduates and mid-career hires, and expand our training system to develop human resources with high level knowledge and skills.
| ③ | Rebuilding<br> Business Models for the Post-COVID Era |
|---|
In the domestic market, we will prioritize profitability improvement through reassessing unprofitable stores, reviewing product offerings in our e-commerce business, and enhancing our online presence. In the international market, we will focus on developing our proprietary app, expanding into Southeast Asia, and fully operationalizing our overseas warehouses to improve profit margins. These efforts form the core of our business model reconstruction with a forward-looking perspective in the post-COVID era.
In order to overcome the above issues, the entire company will make a concerted effort. We would like to ask our shareholders for further guidance and encouragement.
| (7) | Major<br> businesses (As of March 31, 2023) |
|---|
Management of drugstores in Japan
Global EC stores operation and management
Domestic and foreign wholesale
| (8) | Principal offices and stores |
|---|---|
| Headquarters | 2-5-9 Koto-bashi, Sumida-ku, |
| --- | --- |
| Tokyo Tokyo Sales Dept. | 16F Harumi Island Triton Square Office Tower W, 1-8-8 Harumi, Chuo-ku, Tokyo |
| Saitama Center | 3-1-5 Ryutsu Danchi, Koshigaya-shi, Saitama |
Subsidiary offices
| Trade name | Location |
|---|---|
| Kaika International Co., Ltd | 2-5-9 Koto-bashi, Sumida-ku, Tokyo |
| Tokyo Lifestyle Limited | Unit 11, 12/F., Wing on Plaza, No.62 Mody Road, Tsim Sha Tsui East, Kowloon |
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Names and locations of physical stores are as follows:
| Store<br> Name | Location | Store<br> Name | Location | |
|---|---|---|---|---|
| Kameido<br> Store | Koto-ku,<br> Tokyo | Koshigaya<br> Ryutsu-Danchi Store | Koshigaya-shi,<br> Saitama | |
| Hirai<br> Store | Edogawa-ku,<br> Tokyo | Quizgate<br> Urawa Store | Saitama-shi,<br> Saitama | |
| Shinbashi<br> Store | Minato-ku,<br> Tokyo | Yokohama<br> Chinatown Store | Yokohama-shi,<br> Kanagawa | |
| Kamata<br> Store | Ota-ku,<br> Tokyo | Hakuba<br> Store | Hakuba-mura,<br> Nagano | |
| Nishikasai<br> Store | Edogawa-ku,<br> Tokyo | Nishikawaguchi<br> Store | Kawaguchi-shi,<br> Saitama | |
| *1. | We established the Nishikasai store in June 2022 and the<br>Nishikawaguchi store in January 2023. | |||
| --- | --- | |||
| *2. | We closed the Koiwa store in January 2023 and the Suidobashi<br>store in March 2023. | |||
| --- | --- | |||
| (9) | Employees<br>(As of March 31, 2023) | |||
| --- | --- | |||
| Number<br> of Employees | Change from the previous fiscal year | Average<br> age | Average<br> number of years of attendance | |
| --- | --- | --- | --- | |
| 146 | ±0 | About<br> 36-year-old | 3<br> years and 1 month | |
| * | The<br>number of employees includes part-time employees (77). | |||
| --- | --- | |||
| (10) | Significant<br>Subsidiaries | |||
| --- | --- | |||
| Company Name | Location | Capital stock | Business | Investment Ratio |
| --- | --- | --- | --- | --- |
| Kaika International Co., Ltd. | Tokyo | 5,000,000 yen | wholesale | 100% |
| Tokyo Lifestyle Limited | Hong Kong, China | 1,000,000 HK dollars | Wholesale and retail | 100% |
| Shenzhen Qingzhiliangpin Network Technology Co., Ltd. | China | RMB840 | EC Management | (100%) |
| *1. | As<br>of August 25, 2022, the subsidiary Tokyo lifestyle Co., Ltd. changed its trade name to Kaika International Co., Ltd. | |||
| --- | --- | |||
| *2. | As<br>of July 27, 2022, we acquired all shares of Tokyo Lifestyle Limited. | |||
| --- | --- | |||
| *3. | The<br>numerical value within the parentheses in the shareholding ratio represents the proportion based on indirect ownership. | |||
| --- | --- | |||
| (11) | Major<br>borrowings (As of March 31, 2023) | |||
| --- | --- | |||
| Commitment line contract | ||||
| (Unit: thousand yen) | ||||
| --- | --- | --- | ||
| Financial institutions | Balance of borrowings | |||
| Mizuho Bank, Ltd | 1,550,000 | |||
| MUFG Bank, Ltd | 1,300,000 | |||
| Resona Bank, Ltd | 1,000,000 | |||
| Sumitomo Mitsui Banking Corporation | 900,000 | |||
| *1. | We<br>have entered into a committed line of credit agreement with a maximum borrowing amount of 8,150,000,000 yen in order to secure stable<br>and efficient working capital funding. This agreement is a syndicated loan arranged by MUFG Bank, Ltd. and Mizuho Bank, Ltd., with participation<br>from a total of 17 financial institutions. | |||
| --- | --- | |||
| *2. | The<br>outstanding borrowing balance at the end of the current fiscal year based on this agreement is 8,150,000,000 yen. | |||
| --- | --- |
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2.Status of Stocks (As of March 31, 2023)
| ① | Total<br> number of authorized shares: | 100,000,000 | ||
|---|---|---|---|---|
| ② | Total<br> number of shares issued and outstanding: | 36,250,054 | ||
| ③ | Number<br> of shareholders: | 4 | ||
| ④ | Major<br> Shareholders are as follows: | |||
| Names of shareholders | Number of shares held | Percentage of shares held (%) | ||
| --- | --- | --- | --- | --- |
| Tokushin Goudou Kaisha | 16,838,350 | 46.45 | ||
| THE BANK OF NEW YORK MELLON | 11,595,214 | 31.99 | ||
| Mei Kanayama | 7,216,436 | 19.91 | ||
| SHUR Co., Ltd. | 600,054 | 1.66 | ||
| * | THE<br> BANK OF NEW YORK MELLON is a depository that issues American Depository Receipts (ADRs). | |||
| --- | --- |
3.Matters related to warrants of the Company (As of March 31, 2023)
The total number of warrants, etc. as of the end of the current fiscal year is as follows:
| ① | Total<br> number of warrants: 300,000 |
|---|---|
| ② | Class<br> and number of shares to be issued upon exercise of stock warrants rights: |
| --- | --- |
300,000 of our ordinary shares represented by American Depositary Shares in the United States
| ③ | Amount<br> to be paid in for stock warrants rights. |
|---|---|
| US$0.01<br> divided by the number of warrants in the Offering. | |
| ④ | Amount<br> of assets to be contributed upon exercise of stock warrants rights. |
| US$4.80<br> per common share. | |
| ⑤ | Exercise<br> period of stock warrants rights. |
| From<br> July 6, 2022, to January 7, 2027 | |
| ⑥ | Increase<br> in capital stock and capital reserve when shares are issued due to the exercise of stock<br> warrants rights. |
| a.<br> Amount of capital to be increased by the exercise of stock warrants rights. | |
| The<br> amount shall be half of the maximum amount of increase in capital, etc., as calculated in<br> accordance with Article 17, Paragraph 1 of the Corporate Calculation Regulations, with any<br> fraction of less than one yen resulting from the calculation being rounded up to the nearest<br> one yen. | |
| b.<br> Amount of additional paid-in capital to be increased by the exercise of stock warrants rights. | |
| The<br> amount of capital to be increased shall be the maximum amount of increase in capital, etc.<br> as calculated in accordance with the provisions of Article 17, Paragraph 1 of the Corporate<br> Calculation Regulations, less the amount of capital to be increased. | |
| ⑦ | Allottee<br> of warrants rights: Univest Securities, LLC. |
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4.Matters Relating to Corporate Officers (As of March 31, 2023)
(1) Directors and Auditors
| Position | Name | Responsibilities<br> and Important Concurrent Positions |
|---|---|---|
| President<br> and Representative Director | Mei<br> Kanayama | President<br> and Chief Executive Officer |
| Director | Sen<br> Uehara | Executive<br> Officer, Sales Department, Store Development <br><br> Department, Product Management Department, Sales <br><br> Department, Logistics Department |
| Director<br> and Corporate Officer (Principal Accounting and Financial Officer) | Yoichiro<br> Haga | Executive<br> Officer, Accounting Department. |
| Director | Tetsuya<br> Sato | CFO,<br> RSK Co., Ltd <br><br> President, WDM Co., Ltd |
| Director | Yoji<br> Takenaka | Lawyer |
| Director | Yukihisa<br> Kitamura | Board<br> of Trustees of Josai University |
| Auditor | Tadao<br> Iwamatsu | None |
| Auditor | Keiichi<br> Kimura | Certified<br> Administrative Procedures Legal Specialist<br><br> <br>Auditor,<br> Palpitoh Co., Ltd |
| Auditor | Junji<br> Sato | Director,<br> Seihinkokusai Co., Ltd. |
| * | 1. | Director<br> Tetsuya Sato, Yoji Takenaka and Yukihisa Kitamura are independent directors as defined in Article 2, Item 15 of the Companies Act. |
| --- | --- | --- |
| * | 2. | Auditor<br> Keiichi Kimura and Junji Sato are independent corporate auditors as stipulated in Article 2, Item 16 of the Companies Act. |
| --- | --- | --- |
| * | 3. | Mr.<br> Xu Wang resigned from the position of Corporate Auditor at the conclusion of the Annual General Meeting of Shareholders presented<br> on June 27, 2022, and Mr. Tadao Iwamatsu was newly elected and assumed office as a corporate auditor at the same shareholders’ meeting. |
(2) Total amount of remuneration, etc. of directors and corporate auditors for the current fiscal year
(Unit: thousand yen)
| Total<br> amount of remuneration, etc. by type | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Position | Number<br> of members | Total<br> amount of compensation, etc. | Monetary<br> reward | Performance-Linked<br> <br><br> Compensation, etc. | Non-monetary<br> <br><br> Compensation, etc. | |||||||||
| Directors<br> <br><br> (Independent directors) | 6<br><br> (3 | ) | 76,800<br><br> (9,600 | ) | 76,800<br> (9,600 | ) | -<br><br> <br>(- | ) | -<br><br> <br>(- | ) | ||||
| Auditors<br> <br><br> (Independent auditors) | 4<br><br> (2 | ) | 9,750<br><br> (3,600 | ) | 9,750<br><br> (3,600 | ) | -<br><br> <br>(- | ) | -<br><br> <br>(- | ) | ||||
| Total | 10<br><br> (5 | ) | 86,550<br><br> (13,200 | ) | 86,550<br> (13,200 | ) | -<br><br> <br>(- | ) | -<br><br> <br>(- | ) | ||||
| * | 1. | The<br> maximum amount of remuneration for Directors was resolved at the Ordinary General Meeting of Shareholders held on May 26, 2021 to<br> be 150,000,000 yen per year. | ||||||||||||
| --- | --- | --- | ||||||||||||
| 2. | The<br> maximum amount of remuneration for corporate auditors was resolved at the Extraordinary General Meeting of Shareholders held on October<br> 19, 2021 to be 30,000,000 yen per year. | |||||||||||||
| --- | --- |
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5.Accounting Auditors (As of March 31, 2023)
| (1) | Name: |
|---|---|
| Shine | Wing<br> Japan LLC |
| --- | --- |
| (2) | Amount<br> of compensation, etc. |
| --- | --- |
Amount of remuneration, etc. for services stipulated in Article 2, Paragraph 1 of the Certified Public Accountants Act (Act No. 103 of 1948): 10,000,000 yen.
The Board of Corporate Auditors conducted necessary verification to assess the adequacy of the content of the auditor’s audit plan, the performance of the accounting audit, and the basis for determining the remuneration estimate. Based on this, the Board of Corporate Auditors has reached a decision of approval regarding the auditor’s remuneration and other related matters.
| (3) | Policy<br> on Dismissal and Non-Reappointment of Auditors |
|---|
If the Board of Corporate Auditors determines that there is a problem with the performance of duties by the accounting auditor and that it is necessary to do so, the Board of Corporate Auditors will decide on the content of a proposal to be submitted to the General Meeting of Shareholders regarding the dismissal or non-reappointment of the accounting auditor.
6.System designed to ensure the appropriateness of business operations (As of March 31, 2023)
| (1) | System<br> designed to ensure that the execution of duties by directors and employees complies with laws and regulations and the Articles of<br> Incorporation： |
|---|---|
| ① | Directors<br> of the Company and its subsidiaries shall comply with laws, regulations, and the Articles of Incorporation and promote the establishment<br> of a compliance system. |
| --- | --- |
| ② | Directors<br> of the company and its subsidiaries shall establish a compliance system to ensure that employees comply with laws, regulations, and<br> the Articles of Incorporation, and shall manage and supervise the status of compliance with such laws, regulations, and the Articles<br> of Incorporation. |
| --- | --- |
| ③ | Corporate<br> auditors shall investigate the status of the compliance system and whether or not there are any problems with laws, regulations,<br> and the Articles of Incorporation, and report to the Board of Directors. The Board of Directors shall periodically review the compliance<br> system to identify problems and make improvements. |
| --- | --- |
| ④ | The<br> Company shall establish regulations concerning whistle-blowing, and shall establish an internal reporting system to promptly report<br> and consult with directors and employees of the Company and its subsidiaries in the event that they discover any suspected violation<br> of laws and regulations, etc. |
| --- | --- |
| (2) | System<br> for the storage and management of information related to the execution of duties by directors |
| --- | --- |
| ① | Information<br> related to the execution of duties by Directors shall be prepared and stored in accordance with laws, regulations, and internal rules,<br> and managed in a manner that allows access by directors, corporate auditors, and accounting auditors as necessary. |
| --- | --- |
| ② | The<br> status of preparation, storage, and management of information related to the execution of duties by directors shall be subject to<br> audit by corporate auditors. |
| --- | --- |
9
| (3) | Regulations<br> and other systems for managing the risk of loss |
|---|---|
| ① | The<br> Company shall formulate the Risk Management Basic Regulations as the basis of the risk management system for the entire group and<br> establish a risk management system in accordance with the said Regulations. In the event of an unforeseen event, the Company shall<br> establish a Risk Management Committee chaired by the President and Representative Director, which shall take prompt action with the<br> advice of legal counsel and others and establish a system to prevent and minimize the spread of damage. |
| --- | --- |
| ② | Directors<br> and employees shall organize the contents of their respective departments’ risk management responsibilities, identify, analyze,<br> and evaluate inherent risks, consider and implement appropriate countermeasures, and periodically review the status of such risk<br> management. |
| --- | --- |
| ③ | Corporate<br> auditors shall audit the risk management status of each department and report the results to the Board of Directors. The Board of<br> Directors shall periodically review the risk management system to identify problems and make improvements. |
| --- | --- |
| (4) | System<br> to ensure that directors execute their duties efficiently |
| --- | --- |
| ① | Aiming<br> to increase corporate value, the Company shall work to achieve its goals based on a business plan formulated with its corporate philosophy<br> as the axis and shall manage the progress of its activities. |
| --- | --- |
| ② | As<br> a basis of the system to ensure the efficient execution of duties by directors, regular meetings of the Board of Directors (once<br> a month) and extraordinary meetings of the Board of Directors shall be held as necessary. |
| --- | --- |
| ③ | The<br> Company shall establish various internal rules, including rules on segregation of duties and rules on administrative authority and<br> decision-making authority, to clarify the authority and responsibilities of each officer and director, and establish a system to<br> ensure appropriate and efficient execution of duties. |
| --- | --- |
| ④ | The<br> Company shall also supervise its subsidiaries to maintain a balance in the establishment and operation of internal control systems<br> with ensuring efficiency and promptness in the execution of duties by the directors. |
| --- | --- |
| (5) | System<br> to ensure the appropriateness of operations of the corporate group consisting of the Company and its subsidiaries |
| --- | --- |
In order to ensure the appropriateness of operations of the entire group, including subsidiaries, we will strive to establish a compliance system for the entire group.
| (6) | Matters<br> concerning the system for employees to assist the duties of corporate auditors, the independence of such employees from directors,<br> and the effectiveness of instructions to such employees |
|---|
Employees to assist the duties of corporate auditors shall be assigned when requested by corporate auditors, and the consent of the Board of Corporate Auditors shall be obtained with respect to the transfer, evaluation, etc. of such employees.
| (7) | Systems<br> for directors and employees to report to corporate auditors and other systems related to reporting to corporate auditors and other<br> systems to ensure that corporate auditors’ audits are conducted effectively. |
|---|---|
| ① | Directors<br> and employees of the Company and its subsidiaries shall immediately report to the Company’s corporate Auditors if they discover<br> any fact that may cause significant damage to the Company. |
| --- | --- |
| ② | Corporate<br> auditors shall attend meetings of the Board of Directors and other important meetings, and receive reports from the directors and<br> other relevant personnel of the Company and its subsidiaries on the status of execution of their duties. |
| --- | --- |
10
| ③ | Corporate<br> auditors may inspect important documents related to the execution of business operations, such as approval documents, and may request<br> explanations from directors and employees of the Company and its subsidiaries. |
|---|---|
| ④ | Corporate<br> auditors and representative directors shall hold periodic meetings to exchange opinions in order to promote mutual communication. |
| --- | --- |
| (8) | System<br> to ensure that persons reporting to auditors are not subject to any disadvantageous treatment because of such reporting |
| --- | --- |
The Company and its subsidiaries shall prohibit any disadvantageous treatment of any person who reports to the Corporate Auditors by reason of such report and shall make such prohibition known to all employees.
| (9) | Matters<br> concerning procedures for prepayment or reimbursement of expenses incurred in the execution of duties by corporate Auditors and other<br> policies concerning the treatment of expenses or liabilities incurred in the execution of such duties |
|---|
The Company shall promptly comply with any request by a corporate auditor for prepayment or reimbursement of expenses incurred in the performance of his/her duties.
| (10) | Basic<br> policy on elimination of antisocial forces and status of its development |
|---|
For sound corporate management, our basic policy is to take a firm stand against antisocial forces and to have no relationship with them.
The General Affairs Department is in charge of dealing with antisocial forces, and the General Manager of the General Affairs Department is responsible for this department. In addition, the Company works closely with external organizations, including legal counsel, the police, and the Metropolitan Police Department’s Special Anti-Violence Countermeasures Association, to develop a system that enables the entire organization to respond promptly, collect information, and provide thorough employee education.
| 7. | Summary<br> of operation of the system to ensure the appropriateness of business |
|---|
The Company has established a system to ensure the appropriateness of its operations, and the Board of Directors continuously identifies and analyzes management risks and discusses measures to address them. Based on the results, the Company reviews internal rules and operations as necessary to improve the effectiveness of the internal control system. In addition to audits by corporate auditors, the Company has established a system that enables corporate auditors to monitor the status of business execution and compliance-related risks by attending important internal meetings. In addition, internal audits are conducted on a regular basis to verify that day-to-day operations do not violate laws, the Articles of Incorporation, or internal regulations.
11
Balance Sheet
(As of March 31, 2023)
(Unit: thousand yen)
| Assets | Liabilities | ||
|---|---|---|---|
| Subjects | Amounts | Subjects | Amounts |
| [Current<br> assets] | 16,065,799 | [Current<br> liabilities] | 15,571,530 |
| Cash<br> and deposits | 126,016 | Accounts<br> payable | 2,118,989 |
| Accounts<br> receivable trade | 12,576,884 | Short-term<br> borrowings | 8,150,000 |
| Merchandise<br> inventories | 719,794 | Long-term<br> borrowing Scheduled to be repaid within 1 year | 292,580 |
| Advances<br> paid | 6,425 | Other<br> payables | 920,469 |
| Prepaid<br> expenses | 330,281 | Accrued<br> expenses | 19,418 |
| Employee<br> advances | 4,302 | Deposit | 4,971 |
| Accounts<br> receivable | 53,930 | Accrued<br> income taxes | 90,076 |
| Income<br> taxes receivable | 651,121 | Unpaid<br> consumption tax, etc. | 3,873,668 |
| Consumption<br> taxes receivable | 1,712,463 | Provision<br> for bonuses | 20,225 |
| Allowance<br> for doubtful accounts | ∆115,420 | Provision<br> for allowance for point card certificates | 2,659 |
| [Fixed<br> assets] | 6,513,456 | Contract<br> liability | 14,288 |
| Tangible<br> fixed assets | 1,552,785 | Short-term<br> lease debt accounting | 53,554 |
| Buildings | 584,633 | Asset<br> retirement obligations | 10,629 |
| Building<br> and accessories | 480,073 | [Fixed<br> liabilities] | 1,493,023 |
| Structures | 34,984 | Long-term<br> borrowings | 1,063,955 |
| Vehicles<br> & delivery | 48,278 | Deposit<br> received for guarantee | 1,050 |
| Equipment,<br> tools, equipment, and fixtures | 121,275 | Long-term<br> other payables | 205,703 |
| Tangible<br> leased assets | 180,829 | Long-term<br> lease obligations | 73,522 |
| Land | 464,107 | Allowance<br> for retirement benefits | 25,782 |
| Accumulated<br> depreciation | ∆341,476 | Asset<br> retirement obligations | 123,009 |
| Accumulated<br> impairment loss | ∆19,920 | Total<br> liabilities | 17,064,554 |
| [Intangible assets] | 35,907 | Net<br> assets | |
| Intangible<br> lease assets | 35,907 | Subjects | Amount |
| [Investments<br> and other assets] | 4,924,763 | [Shareholders’<br> equity] | 5,514,691 |
| capital | 2,010 | Capital<br> stock | 1,659,974 |
| Security<br> deposit | 127,787 | Capital<br> surplus | 1,408,991 |
| Guarantee<br> deposits | 165,783 | Capital<br> reserve | 1,408,991 |
| Insurance<br> reserve fund | 21,233 | Retained<br> earnings | 2,445,725 |
| Recycling<br> deposit | 79 | Other<br> retained earnings | 2,445,725 |
| Long-term<br> prepaid expenses | 8,131 | Retained<br> earnings brought-forward | 2,445,725 |
| Long-term<br> accounts receivable | 4,133,801 | [Equity<br> warrant] | 11 |
| bankruptcy<br> reorganization claim | 107,400 | ||
| Allowance<br> for doubtful accounts | ∆148,720 | ||
| Deferred<br> tax asset | 74,582 | ||
| Shares<br> of subsidiaries and affiliates | 432,673 | Total net assets | 5,514,702 |
| Total<br> assets | 22,579,256 | Total<br> liabilities and net assets | 22,527,256 |
12
Income Statement
(For the fiscal year beginning April 1, 2022 ended March 31, 2023)
(Unit: thousand yen)
| Subject | Amount | |||
|---|---|---|---|---|
| Sales | 21,667,575 | |||
| Cost of sales | 18,312,570 | |||
| Gross profit | 3,355,004 | |||
| Selling, general and administrative expenses | 2,870,852 | |||
| Operating income | 484,152 | |||
| Non-operating income | ||||
| Interest and dividends income | 19 | |||
| Interest on refund | 8,640 | |||
| Miscellaneous income | 63,272 | 71,933 | ||
| Non-operating expenses | ||||
| Interest expense | 137,596 | |||
| Foreign exchange loss | 38,610 | |||
| Loan commission | 186,589 | |||
| Other expenses | 317 | 363,113 | ||
| Ordinary income | 192,972 | |||
| Extraordinary income | ||||
| Gain on sales of fixed assets | 253 | |||
| Compensation for damages received | 3,802,931 | 3,803,185 | ||
| Extraordinary loss | ||||
| Impairment loss | 19,920 | |||
| Past annual consumption tax amount, etc. | 4,581,839 | 4,601,759 | ||
| Income before income taxes | ∆605,602 | |||
| Corporate, inhabitant and enterprise taxes | 106,253 | |||
| Income taxes refundable | ∆651,121 | |||
| Income taxes-deferred | 10,692 | ∆534,174 | ||
| Net income | ∆71,427 |
13
Statement of Changes in Net Assets
From April 1, 2022, to March 31, 2023
(Unit: thousand yen)
| Shareholders’ equity | ||||||||
|---|---|---|---|---|---|---|---|---|
| Capital surplus | Retained earnings | |||||||
| Other retained earnings | ||||||||
| Capital | Capital reserve | Total capital surplus | Retained earnings brought forward | Total retained earnings | Total<br><br> shareholders’<br><br> equity | Subscription warrant | Total net assets | |
| Balance on April 1, 2021 | 1,659,974 | 1,408,991 | 1,408,991 | 2,559,070 | 2,559,070 | 5,628,036 | 11 | 5,628,047 |
| Cumulative effect of a change in accounting policy | △41,917 | △41,917 | △41,917 | △41,917 | ||||
| Balance at the beginning of the period after retroactive processing | 1,659,974 | 1,408,991 | 1,408,991 | 2,517,152 | 2,517,152 | 5,586,118 | 11 | 5,586,130 |
| Fluctuations during the fiscal year | ||||||||
| Net income | △71,427 | △71,427 | △71,427 | △71,427 | ||||
| Changes in items other than shareholders’ equity during the fiscal year (net amount) | ||||||||
| Total fluctuations during the fiscal year | △71,427 | △71,427 | △71,427 | △71,427 | ||||
| Balance at the end of March 31, 2022 | 1,659,974 | 1,408,991 | 1,408,991 | 2,445,725 | 2,445,725 | 5,514,691 | 11 | 5,514,702 |
14
IndividualNote Table
1. Notes to Significant AccountingPolicies
| (1) | Valuation standards and methods for securities |
|---|
Stocks of subsidiaries and affiliates -- Stated at cost based on the moving average method.
| (2) | Valuation standards and methods for inventories |
|---|
Cost method based on the moving average method -- The amount on the balance sheet is calculated by writing down the book value based on a decline in profitability.
| (3) | Depreciation method for fixed assets |
|---|---|
| ① | Property, plant and equipment (excluding lease assets) -- Declining-balance method (except for buildings<br>acquired on or after April 1, 1998) Buildings (excluding annexed facilities) acquired on or after April 1, 1998, and annexed facilities<br>and structures acquired on or after April 1, 2016, are depreciated using the straight-line method). |
| --- | --- |
The main supported years are as follows:
Buildings 38 ~50 years
Building ancillary equipment 6 ~18 years
Buildings 10~30 years
Vehicles 2~7 years
Tool and appliance spare parts 3~18 years
| ② | Leased asset. |
|---|
Lease assets related to finance lease transactions that do not transfer ownership.
We use the straight-line method with the lease term as the useful life and the residual value as zero.
| (4) | Basis for provisions |
|---|---|
| ① | Allowance for doubtful accounts |
| --- | --- |
The allowance for doubtful accounts is provided for possible losses on receivables based on the historical write-off ratio for general receivables and on the estimated number of uncollectible receivables based on a case-by-case determination of collectability for specific receivables such as doubtful receivables.
| ② | Reward and lead when gold |
|---|
To provide for the payment of bonuses to employees, the Company accrues an estimated number of bonuses to be paid, corresponding to the current fiscal year.
| ③ | Retirement benefit reserve |
|---|
To provide for the payment of retirement benefits to employees, the Company records an amount recognized to have accrued at the end of the current fiscal year based on the retirement benefit obligation at the end of the current fiscal year. The retirement benefit obligation is calculated based on the required amount at the end of the fiscal year in accordance with the retirement benefit regulations.
| ④ | Allowance for point card certificates |
|---|
The unused number of points issued under the point system for the purpose of sales promotion is recognized based on the estimated future use of the points, which is based on the historical usage rate and other factor
15
| (5) | Basis for recording revenues and expenses |
|---|
The Company’s principal business is the sale of cosmetics and household goods. The Company recognizes revenue from the sale of these products at the time of delivery because the Company believes that the customer obtains control of the products, and the performance obligation is satisfied at the time the products are delivered. Revenue is measured at the amount of consideration promised in the contract with the customer, less returns, discounts, and rebates. Consideration for transactions is received within one year of satisfaction of the performance obligation.
| (6) | Other important matters that form the basis for the preparation of financial statements |
|---|
Accounting for consumption taxes
Consumption taxes are accounted for using the tax exclusion method.
2. Notes to Revenue Recognition
| (1) | Decomposition of earnings |
|---|
The Company operates a wholesale and retail business and an e-commerce business for domestic and overseas markets, and the main types of goods or services in each business are daily necessities and sundries, cosmetics, and pharmaceuticals.
| (Unit: thousand yen) | |
|---|---|
| Sales of each business | Domestic wholesale 7,454,347 |
| Domestic EC 1,098,013 | |
| Domestic retail 1,161,648 | |
| Overseas wholesale 7,358,085 | |
| Overseas EC 4,595,480 | |
| (2) | Information that serves as a basis for understanding earnings |
| --- | --- |
It is as described in “Revenue and Expense Recording Standards” in “Notes on Matters Related to Important Accounting Policies”.
3. Note on balance sheet.
| (Unit: thousand yen) | |
|---|---|
| (1) Assets provided as collateral and debt related to collateral | |
| Assets pledged as collateral | Land 464,107 |
| Building 552,875 | |
| Total 1,016,982 | |
| Debt related to collateral | Long-term borrowing 956,535 |
| Total 956,535 | |
| (2) Receivables from and payables to subsidiaries and affiliates | Accounts receivable trade 849,831 |
| Advance money 58 | |
| Accounts receivable 2,749 | |
| Long-term accounts receivable 116,296 | |
| Account payable 744 | |
| (3) Monetary debt to directors | Other payables 8,388 |
| (4) Guaranteed liabilities | |
| The Company guarantees the borrowing obligations of other companies from financial institutions. | (Unit: thousand yen) |
| Tokyo Lifestyle Limited | Balance of debt guarantees received 250,000 |
| Shintai Co., Ltd. | Balance of debt guarantees received 25,640 |
16
4. Notes on income statement
Transaction volume with affiliated companies
Operating transaction amount
| (Unit: thousand yen) | ||
|---|---|---|
| Sales | 1,488,202 | |
| Purchase | 46,072 | |
| Non-operating transaction amount | 127,514 |
As a subsequent event of correction, the Company recorded 4,581,839 thousand yen as “Consumption tax for prior periods, etc.” under extraordinary losses for the total amount of consumption taxes additionally paid, underpayment of consumption taxes, and delinquent taxes due to the amended consumption tax return in May 2023. In addition, 3,802,931 thousand yen was recorded as “Compensation for damages received” under extraordinary gains due to claims for compensation for damages associated with these items.
5. Notes on the statement of changes in shareholders’ equity,etc.
① Matters concerning the type and total number of issued shares on the last day of the current fiscal year.
| Ordinary Shares | 36,250,054 |
|---|
② The type and quantity of shares intended to be allocated for the stock options (excluding those for which the exercise period has not yet commenced) as of the last day of the fiscal year.
| Ordinary Shares | 300,000 |
|---|
6. Notes on tax effect accounting
Breakdown of deferred tax assets and deferred tax liabilities by major causes
| (Deferred tax assets) | (Unit: thousand yen) | |
|---|---|---|
| Accrued business tax | 6,838 | |
| Accrued business office taxes | 588 | |
| Allowance for doubtful accounts | 80,892 | |
| Allowance for bonuses | 6,193 | |
| Allowance for points | 814 | |
| Product deterioration write-down | 5,998 | |
| Net operating loss carried forward | 404,319 | |
| Asset retirement obligations | 40,926 | |
| Accumulated impairment loss | 5,515 | |
| Loss on valuation of stocks of subsidiaries and affiliates | 1,531 | |
| Allowance for retirement benefits | 7,895 | |
| Subtotal of deferred tax assets | 549,871 | |
| Valuation allowance for net operating loss carryforwards for tax purposes | △335,044 | |
| Valuation allowance for total deductible temporary differences | △127,990 | |
| Subtotal of valuation allowance | △463,035 | |
| Total deferred tax assets | 98,479 | |
| (Deferred tax liabilities) | ||
| Retirement costs corresponding to asset retirement obligations | △23,897 | |
| Total deferred tax liabilities | △23,897 | |
| Net deferred tax assets | 74,582 |
17
7. Notes on financial products
| (1) | Matters concerning the status of financial products |
|---|
Borrowings are used for working capital (mainly short-term) and capital investment funds (long-term).
| (2) | Matters concerning the market value of financial products |
|---|
The balance sheet amount, market value and the difference between them as of March 31, 2023 (the settlement date for the current fiscal year) are as follows.
Cash is omitted from the notes, while deposits, accounts receivable, accounts payable and short-term loans payable are settled in a short period of time and their fair value approximates their book value.
| (Unit thousand yen) | |||||
|---|---|---|---|---|---|
| Balance<br> sheet<br> amount*1 | Market<br> price*1 | Difference | |||
| Long-term borrowing*2 | (1,356,535 | ) | (1,337,643 | ) | 18,892 |
| *1 | Items recorded in liabilities are shown in parentheses. | ||||
| --- | --- | ||||
| *2 | Current portion of long-term debt is included. | ||||
| --- | --- |
(Note 1) How to calculate the market value of financialproducts.
Liabilities
| Long-term borrowing |
|---|
The actual price of the above items is calculated by discounting the total value of principal and interest at the interest rate assumed when a new loan is made.
The carrying amount of long-term borrowing with floating interest rates is used as their fair value approximates their carrying amount as long as the market interest rate is reflected within a short period of time (within one year) and the Company’s credit status has not changed significantly since the execution of the loan.
(Note2) Carrying number of financial instruments whose fair valueis extremely difficult to determine.
(Unit: thousand yen)
| Balance sheet amount | ||
|---|---|---|
| Shares of subsidiaries and affiliates | 432,673 |
Affiliates are not subject to fair value disclosure because they have no market value, and it is extremely difficult to determine their fair value.
18
8. Notes on transactions with related parties
| (1) Transactions with subsidiaries and related parties | |||||||
|---|---|---|---|---|---|---|---|
| (Unit: thousand yen) | |||||||
| Type | Name of<br><br> Company | Percentage of voting rights, etc. held by the Company | Relationship with related parties | Transaction details | Amount of transaction | Accounts | Balance at<br><br> the end of<br><br> year |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Subsidiary company | Kaika<br><br> International Co., Ltd. | Ownership<br><br> <br><br><br> <br>100% | Sales of products<br><br> <br><br><br> <br>Consignment of administrative services | Purchase<br><br> <br><br><br> <br><br><br> <br>Miscellaneous income | 25,119<br><br> <br><br><br> <br><br><br> <br><br><br> <br>6,917 | Accounts<br><br> <br>payable<br><br> <br><br><br> <br>Accounts<br><br> <br>receivable | 744<br><br> <br><br><br> <br><br><br> <br>49 |
| Subsidiary company | Tokyo<br><br> <br>Lifestyle<br><br> <br>Limited | Ownership<br><br> <br><br><br> <br>100% | Purchasing Merchandise<br><br> <br>Merchandise Sales<br><br> <br>Debt guarantee<br><br> <br>Claim for Damages | Purchases<br><br> <br>Sales<br><br> <br>miscellaneous income<br><br> <br>loan guarantee<br><br> <br>Compensation for damages received | 8,030<br><br> <br>1,481,690<br><br> <br>4,140<br><br> <br>250,000<br><br> <br>116,296 | Accounts receivable trade<br><br> <br><br><br> <br>Long-term accounts receivable | 848,466<br><br> <br>2,700<br><br> <br><br><br> <br>116,296 |
| Subsidiary company | Shen Zhen <br> Qingzhiliangpin <br> Network <br> technology Co.,<br><br> <br>Ltd | Ownership Indirect | Purchase of goods | Purchase | 3,428 | ||
| Affiliated company | Palpito Co., Ltd. | Ownership<br><br> <br><br><br> <br>40% | Sales of products<br><br> <br><br><br> <br>Merchandise Sales | Purchase<br><br> <br><br><br> <br>Sales<br><br> <br><br><br> <br>miscellaneous income | 9,493<br><br> <br><br><br> <br>5,808<br><br> <br><br><br> <br>160 | Advance money<br><br> <br>Accounts receivable trade | 58<br><br> <br><br><br> <br>1,083 |
Transaction conditions and policy for determining transaction conditions, etc.
| *1 | Prices<br>and other transaction conditions are determined by price negotiations, etc. taking into consideration market performance. |
|---|---|
| *2 | The Company guarantees borrowings from financial institutions. |
| --- | --- |
| *3 | No guaranteed fees are given or received from subsidiaries. |
| --- | --- |
19
(2) Officers and major individual shareholders, etc.
(Unit: thousand yen)
| Type | Name of Company, etc. | Voting rights, etc. <br>Percentage of voting rights, etc. held | Transaction details | Transactions | Amount of transaction | subject | Balance at end of year | |||
|---|---|---|---|---|---|---|---|---|---|---|
| Company or entity where officers and their close relatives hold a majority of voting rights | Tokushin Goudou Kaisha | None | Merchandise Sales | Sales | 668 | Accounts receivable trade | 281 | |||
| Company or entity where officers and their close relatives hold a majority of voting rights | Takuetsu International Co.,Ltd | None | Merchandise Sales | Sales | 34 | None | None |
Terms and conditions of transactions and policy for determining terms and conditions of transactions, etc.
| * | Prices and other transaction terms are determined by price negotiations,<br>etc., in consideration of market performance. |
|---|
9. Note on fixed assets used by leasing
In addition to the fixed assets recorded on the balance sheet, some office equipment, etc. are used under a finance lease contract that does not transfer ownership.
10. 1 Information of per share
| (Unit: yen) | ||
|---|---|---|
| (1) Net assets per share | 152.13 | |
| (2) Net income per share | △1.97 |
11. Other notes
The stated amount is rounded down to the nearest thousand yen.
20
Annexed specification
From April 1, 2022 to March 31, 2023
1. Detailsof property, plant and equipment and intangible assets (including those incurring depreciation expenses recorded in investments and otherassets)
(Unit: thousand yen)
| Asset types | Book value <br> at the<br> beginning<br> of the<br> fiscal year | Increase of<br> the<br> fiscal year | Decreased<br> Amount of the<br> fiscal year | Current reimbursement <br>(Current impairment amount) | Book<br> value at<br> the end of the<br> fiscal year | Accumulated impairment loss | Accumulated depreciation | End of period <br>Acquisition Price | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property, plant and equipment | Building | 567,434 | - | - | 14,559 | 552,875 | - | 31,758 | 584,633 | ||||||||
| Equipment attached to buildings | 306,396 | 90,218 | 3,080 | 56,105<br> <br>(19,920) | 337,428 | 19,920 | 122,724 | 480,073 | |||||||||
| structure | 33,113 | 359 | - | 2,122 | 31,351 | - | 3,632 | 34,984 | |||||||||
| Vehicles and transportation equipment | 14,287 | 16,028 | - | 9,342 | 20,974 | - | 27,303 | 48,278 | |||||||||
| Tools and equipment spare parts | 45,822 | 40,443 | 146 | 20,668 | 65,451 | - | 55,823 | 121,275 | |||||||||
| Land | 464,107 | - | - | - | 464,107 | - | - | 464,107 | |||||||||
| Tangible leased assets | 92,433 | 22,881 | - | 34,718 | 80,596 | - | 100,232 | 180,829 | |||||||||
| Total amount | 1,523,595 | 169,932 | 3,227 | 137,515<br> <br>(19,920) | 1,552,785 | 19,920 | 341,476 | 1,914,181 | |||||||||
| Intangible <br> fixed assets | Intangible lease assets | 46,825 | 6,408 | - | 17,326 | 35,907 | |||||||||||
| Total amount | 46,825 | 6,408 | - | 17,326 | 35,907 | ||||||||||||
| Investments and other <br> assets | Long-term prepaid expenses | 511,800 | 3,587 | 334,073 | 173,184 | 8,131 | |||||||||||
| Total amount | 511,800 | 3,587 | 334,073 | 173,184 | 8,131 | ||||||||||||
| * | Figures in parentheses in the “Depreciation for the fiscal<br>year” column indicate the amount of impairment loss recorded for the fiscal year. The increase in building fixtures during the period<br>was mainly due to the construction of the Nishi-Kasai and Nishi-Kawaguchi stores. | ||||||||||||||||
| --- | --- |
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2. Details of provisions
(Unit: thousand yen)
| Subject | Balance at<br> beginning of the<br> fiscal year | Increase<br><br>during the<br> fiscal year | Decrease<br><br>during the<br> fiscal year | Balance at<br><br>end of the fiscal year | ||||
|---|---|---|---|---|---|---|---|---|
| Allowance for doubtful accounts | 129,601 | 134,539 | - | 264,140 | ||||
| Allowance for bonuses | 26,595 | 20,225 | 26,595 | 20,225 | ||||
| Allowance for point card certificates | 640 | 2,659 | 640 | 2,659 | ||||
| Retirement benefit reserve | 21,187 | 22,941 | 18,346 | 25,782 |
3. Details of selling, general and administrative expenses
(Unit: thousand yen)
| Subject | Balance at<br><br> the end of<br><br> current period | Summary | |
|---|---|---|---|
| Advertising expenses | 101,083 | ||
| Sales promotion expenses | 25,836 | ||
| Packing and freight charges | 642,861 | ||
| Provision for allowance for point card certificates | 2,019 | ||
| Recruitment and training expenses | 1,636 | ||
| Loss on disposal of inventory | 14,992 | ||
| Officer’s compensation or remuneration | 86,550 | ||
| Salary supplement | 364,858 | ||
| Bonus | 2,024 | ||
| Provision for bonuses | 45,825 | ||
| Legal welfare expenses | 62,429 | ||
| Welfare expense | 3,982 | ||
| Depreciation and amortization | 134,921 | ||
| Repair expense | 352 | ||
| Health expenses | 5,429 | ||
| Office supplies | 21,103 | ||
| Utilities charge | 28,153 | ||
| Travel expenses | 40,799 | ||
| Commission | 644,903 | ||
| Taxes and public dues | 29,472 | ||
| Entertainment expenses | 48,950 | ||
| Insurance premium | 29,364 | ||
| Postage | 6,658 | ||
| Sundry expenses | 344 | ||
| Vehicle expenses | 4,405 | ||
| Allowance for doubtful accounts | 134,539 | ||
| Lease payment | 8,000 | ||
| Expenses for rent of space, land, etc. | 166,789 | ||
| Advisory fee | 16,323 | ||
| Conference expenses | 73 | ||
| Miscellaneous expenses | 42 | ||
| Retirement benefit expenses | 22,941 | ||
| Amortization of long-term prepaid expenses | 173,184 | ||
| Selling, general and administrative expenses | 2,870,852 |
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