A NNUAL R EPORT 2002 - 株式会社...

Ryohin Keikaku Co., Ltd.

A N N U A L R E P O R T 2 0 0 2Year Ended February 28, 2002

Following a period of rapid growth and expansion, profits

fell in the previous term, and in the term under review.

The causes lay in our failure to adequately evolve sys-

tems and procedures to cope with the added scale and

complexity of a rapidly expanding network. Since the

decline, we have engaged bold and far-reaching reforms

to correct these deficiencies. At this stage, it is still too

early for their results to emerge. Nevertheless, we are

encouraged by the early signs of our recovery and are

very determined to pursue change wherever necessary.

We believe these steps will lay the foundations for solid

and stable results throughout the years ahead.

A MESSAGE FROM THE PRESIDENT

CONSOLIDATED FIVE-YEAR SUMMARY

FINANCIAL REVIEW

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NON-CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE NON-CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

CORPORATE DATA AND MANAGEMENT

STOCK INFORMATION

IFC

3

4

8

13

20

24

24

25

25

C O N T E N T S

A M E S S A G E F R O M T H E P R E S I D E N T

Annual Report 2002 1

A Year of Change Prepares forRenewed Progress

On behalf of the management of Ryohin

Keikaku Co., Ltd., I would like to outline

our business results for fiscal 2001,

which ended February 28, 2002.

We reported disappointing results in

the previous term, fiscal 2000, experi-

encing the first drop in profits since our

establishment. During the year under

review, we began implementing various

measures to promote growth.

Consolidated operating revenue rose

3.8% from the previous year, to ¥119.8

billion. Regrettably, operating profit

dropped to ¥5.5 billion in total, a 52.4%

decline, and net income fell 99.8%, to

¥13 million. The latter came about as we

elected to include an extraordinary loss

of ¥5.9 billion in a positive move to clear

away negative legacies from our previ-

ous rapid growth phase. This move,

which included disposing of inventories

and supporting the reconstruction of a

subsidiary in France, was taken to lay

Bold Reforms to RestoreConsistent Growth

Reconstruction of store network under

new strategy

Although the year under review ended

with disappointing results for the

Company, we have already taken a

number of measures aimed at reestab-

lishing steady and consistent growth.

First, we reduced the pace of domes-

tic store openings, selecting eleven loca-

tions where high profitability could truly

be expected, and closing ten stores with

marginal prospects, while, in the previ-

ous year, we opened 45 stores, due to

accelerated openings in anticipation of

the enforcement of the Large-Scale

Retail Store Location Law.

In parallel with selective opening of

new stores, we promoted more efficient

store operations by concentrating on

developing business through licensed

stores in collaboration with leading

regional companies.

the groundwork for healthy growth in the

coming years.

During the year under review, we

opened a flagship store in the Yurakucho

district of Tokyo, and another in the

Nanba district of Osaka, both popular

shopping areas in major cities in eastern

and western Japan, respectively. Sales

at the online Mujirushi Ryohin Net Stores,

which were established in September

2000 as our sales channel on the

Internet, grew steadily to ¥1.5 billion. The

MUJI Card, our bonus-point credit card,

also turned in good results, as the

number of users exceeded 200,000

within two years of its introduction.

Overseas, we closed five unprofitable

stores in France and Belgium as part of

a plan to reform our European store net-

work. At the same time, we reestab-

lished our presence in Hong Kong with

the opening of a new store, which post-

ed profits in its first year of operation.

The store’s brisk business encouraged

us to open a second store in the region.

For the Year:Net sales .................................................................................Operating profit .......................................................................Income before income taxes....................................................Net income..............................................................................

Per Share (yen and U.S. dollars):Net income.................................................................Cash dividends........................................................................

At Year-End:Total assets .............................................................................Total shareholders’ equity........................................................Number of shares outstanding.................................................

Thousands of U.S. Dollars

2001 2002 20022000

Millions of Yen

¥ 115,26611,58810,4345,689

202.6044.00

¥ 55,72539,134

28,078,000

¥ 106,68913,43811,3665,880

209.4150.00

¥ 51,84034,648

28,078,000

¥ 119,1885,515

31213

0.4644.00

¥ 52,28437,974

28,078,000

$ 887,14841,0462,323

97

0.000.33

$ 389,165282,653

Notes: 1. U.S. dollar amounts represent translations of Japanese yen amounts at the rate of ¥134.35=US$1.

2. Net income per share is based upon the number of shares of common stock outstanding as of each year end.

F I N A N C I A L H I G H L I G H T SRyohin Keikaku Co., Ltd. and consolidated subsidiariesYears ended February 28/29, 2000, 2001 and 2002

2 Ryohin Keikaku Co., Ltd.

Building a framework for stronger sales

In one sense, the accelerated growth in

the previous terms exposed inefficien-

cies in sales functions. In response, we

have carried out programs to dramati-

cally change our operating procedures.

With delegation of merchandising

authority to the sales division, managers

from the nine regions and individual

store managers undertook sales plan-

ning and product allocation, which had

previously been drawn up by the prod-

uct division. We believe that such plan-

ning by individual stores will be more

effective as they are most in tune with

the tastes of customers in their regions.

At the same time, this measure is

expected to further improve the motiva-

tion of store staff.

We also reviewed our product supply

processes and concluded that it is indis-

pensable to control the flow of goods by

overseeing the store network in its

entirety. Accordingly, we established the

Controller Department in February 2002,

which is responsible for deciding on the

number of products initially supplied to

each store, taking the sales capability of

the store into account. After the initial

supply, the department monitors various

product sales trends and coordinates

the flow of goods, including additional

orders and suspension of production.

We developed and began the intro-

duction of an original automatic ordering

system called “PROFIT,” which is

expected to greatly contribute to an

improvement in store efficiency. The

system has already been put into opera-

tion at directly managed stores, with

respect to household goods other than

large items and some clothing and food

items. We plan to expand the system

into licensed stores in the coming years.

Automatic ordering, which eliminates the

most troublesome work at every store,

will enhance the flexibility of store staff

assignment. Moreover, sales staff will be

able to focus more on customer service,

thereby strengthening our sales ability.

Increasing links between sales

and production

The fundamental concept of MUJI prod-

ucts—offering items that are “lower

priced for a reason” through the careful

selection of materials, streamlining man-

ufacturing processes, and eliminating

non-essential functions, decoration and

packaging—has not lost its freshness

and luster. With our competitors improv-

ing their capability to procure goods,

however, competition is increasingly

heating up.

To sharpen our competitive edge, we

have begun to link more tightly the oper-

ations of sales and production. Under

this system, we select core items for

which large volumes of sales are expected

in the categories of apparel, household

goods and food. Then, we purposely

restrain the volume of these products’

initial production while retaining the

capability for rapid additional production

according to demand. This strategy will

enable us to sell out store merchandise

at full margin, minimizing low-margin

discounting and unsold inventories.

Meanwhile, to fortify our product

lineup, we initiated the Mujirushi Ryohin

Concept Factory (MCF) Project, which

involves outside designers at work

around the globe. This project aims to

deepen the concept of MUJI products

by melding the viewpoints of today’s

consumers with the solid origins of

our products.

Maintaining Firm Resolve toCarry Out Reform

During the year under review, we

squarely addressed a number of obsta-

cles to growth and carried out various

reform programs aimed at assuring

steady, continuous growth. Looking at

our performance on a quarterly basis,

signs of gradual improvement are clearly

to be seen. In the coming fiscal year,

ending February 2003, we are deter-

mined to show the solid results of these

ongoing reforms. To this end, we will not

slow the pace of reform or otherwise

jeopardize the realization of our plans.

The MUJI world has broadened into

various areas, including restaurants,

cafés, campgrounds and flower sales,

and we believe it has limitless possibili-

ties. The attractiveness of the product

lineup in our stores should further

enhance sales in fiscal 2002 as the MCF

Project and other programs begin to

produce new and appealing items. We

believe that as a result of the measures

outlined above, you will soon see Ryohin

Keikaku applying its proven ideals with

renewed strength and focus.

Tadamitsu Matsui

President and Representative Director


2002


2001200019991998 2002

Millions of Yen

For the Year:

Net sales.........................................................Cost of sales...................................................Gross profit.....................................................Other operating revenue .................................

Selling, general and administrative expenses ......................

Operating profit...............................................Other revenue (expenses):

Interest and dividend income .....................Gain on redemption of insurance funds ......Interest expense.........................................Loss on sale/disposal of fixed assets .........Write-down of inventories...........................Loss on disposal of inventories...................Loss on cancellation of store

rental contracts ......................................Loss on disposal of affiliates.......................Write-down of investments in securities......Foreign exchange gain (loss) ......................Prior years provision for retirement benefits .....Amortization of the unrecognized transition

amount arising from adopting the new accounting standard for retirement benefits for employees............................

Valuation loss on land ................................Other, net...................................................

Income before income taxes ...........................Income taxes ..................................................Minority interests in net income (expense)

of consolidated subsidiaries .......................Equity in earnings of affiliates ..........................Net income .....................................................

At Year-End:

Total assets ....................................................Total shareholders’ equity ...............................

Per Share:

Net income .....................................................Cash dividends ...............................................

Weighted average number of shares.................

¥106,68961,37745,312

27145,583

32,14513,438

39–

(24)(248)

––

(53)–

(8)(124)

(1,406)

–(295)

4711,3665,486

– –

¥ 5,880

¥ 51,84034,648

¥306.5750.00

19,178,961

¥92,93955,30337,636

28837,924

27,48410,440

23–

(29)(260)

––

(192)(346)

(2)(233)

–

––

319,4325,018

– –

¥ 4,414

¥44,64329,010

¥157.2023.50

28,078,000

¥119,188

71,796

47,392

704

48,096

42,581

5,515

20

263

(72)

(588)

(1,401)

(2,446)

(565)

–

–

–

–

(450)

–

35

312

253

46

–

¥ 13

¥52,284

37,974

¥ 0.46

44.00

28,077,782

¥115,26667,04048,226

28848,514

36,92611,588

25–

(29)(971)

––

(249)–

(43)33

–

––

8010,4344,752

(7) –

¥ 5,689

¥55,72539,134

¥202.6044.00

28,077,076

$887,148

534,401

352,747

5,240

357,987

316,941

41,046

1501,960

(537)

(4,376)

(10,424)

(18,207)

(4,203)

–

–

–

–

(3,349)

–

263

2,323

1,886

340

–

$ 97

$389,165

282,653

$0.00

0.33

Notes: 1. U.S. dollar amounts represent translations of Japanese yen amounts at the rate of ¥134.35=US$1.2. The common stock was split into two shares for one on October 19, 1999. Net income per share is based upon the weighted average number of shares

outstanding during each year, appropriately adjusted for subsequent stock splits. Cash dividends per share for each period represent dividends declaredas applicable to each year after retroactive adjustments for subsequent stock splits.

U.S. DollarsYen

Thousands of U.S. DollarsMillions of Yen

Ryohin Keikaku Co., Ltd. and consolidated subsidiariesYears ended February 28/29

C O N S O L I D A T E D F I V E - Y E A R S U M M A R Y

¥75,44546,58028,865

27129,136

21,5837,553

55–

(19)(118)

––

(63)–

(4)57

–

––

(42)7,4194,039

– 27

¥ 3,353

¥ 39,83025,112

¥122.8917.50

27,283,480


Revenue

Consolidated operating revenue (net sales and other operating revenue) of Ryohin Keikaku Co., Ltd.

(the “Company”) and its subsidiaries reached ¥119,892 million for fiscal 2001, ended February 28,

2002, rising 3.8% from the previous fiscal year. In its domestic store network, to standardize stores and

improve store efficiency, the Company pursued a scrap-and-build program under which it closed 10

stores and reduced the sales floor space of six other stores during the year under review. At the same

time, it opened 11 stores, including large flagship stores, Mujirushi Ryohin Yurakucho and Mujirushi

Ryohin Nanba, and increased sales floor space at 10 stores. As a result, the number of stores in Japan

at the end of the period totaled 278, an increase of one from a year earlier. Of these, 274 were stores

that sell MUJI products (105 were directly managed and 169 were stores to which the Company

wholesales MUJI products). The remaining four stores were flower shops, which were spun off as a

wholly owned subsidiary during the period. Worldwide, the total number of stores was unchanged at

300, and sales floor space, excluding the flower shops, increased 4.1%, to 211,225 m2.

Looking at net sales by region, net domestic sales amounted to ¥113,473 million, up 2.3% from the

previous year. Net sales in the United Kingdom rose 10.8%, to ¥3,960 million, and net sales in France

jumped 49.7%, to ¥1,591 million. The Company reentered the Hong Kong market with the opening of

two stores, and net sales there totaled ¥800 million. Meanwhile, five unprofitable stores in France and

Belgium were closed as part of the reconstruction of Ryohin Keikaku France S.A., a subsidiary in

France. As a result, the number of overseas stores totaled 22. Sales at the two stores opened in Hong

Kong increased at a steady pace.

A breakdown of sales trends in Japan are provided below on the basis of non-consolidated results

of Ryohin Keikaku Co., Ltd. because domestic sales were mostly attributable to the Company.

The Company deals in three areas of business—operations at directly managed stores, wholesal-

ing and Internet sales. Net sales at directly managed stores rose 4.5% from the previous year, to

¥67,414 million, while net sales in wholesale operations were down 5.7%, to ¥42,892 million. Newly

opened stores increased the number of customers at directly managed stores by 13.9%. But falling

prices due to the ongoing deflation caused spending per customer to decline 6.3%. As a conse-

quence, net sales at directly managed stores overall grew only slightly. Net sales at existing directly

managed stores dipped 13.4% from the previous year.

In wholesale operations, sales to Mujirushi Ryohin KIOSK, which has stores in East Japan

Railways stations, rose a sharp 31.1%, due to the opening of five stores and steady sales at existing

stores. However, affected by anemic sales to licensed stores and the Seibu Department Store group,

which suffered sluggish sales at existing stores, net sales for wholesale operations overall fell below

the previous year’s level. Meanwhile, net sales at Mujirushi Ryohin Net Store, the Company’s Internet

sales channel, showed outstanding growth, with average monthly sales increasing 53.6% from the

previous year.

By product category on a non-consolidated basis, apparel sales dropped 7.0%, to ¥36,630 mil-

lion, sales of household goods rose 5.2%, to ¥62,541 million, food sales improved 9.1%, to ¥11,862

million, and sales of other categories stood at ¥845 million, an 8.5% decline.

In the apparel sector, inventories that had been carried over from the prior years, which had been

a vexing problem for the Company, were disposed of or written down. At the same time, the

F I N A N C I A L R E V I E W

Consolidated Operating Revenue(Millions of Yen)

106,

960

115,

554

93,2

27

75,7

16

119,

892

FY 97 98 99 00 01

Consolidated Total Sales Floor Space (m2)

144,

011

202,

902

211,

225

114,

120

85,2

73

FY 97 98 99 00 01


FY1999 FY2000 FY2001YOY YOY YOY(%) (%) (%)

Number of Customers/Average Sales per Customer/Average Sales Price per Unit of Directly Managed Stores (Ryohin Keikaku Co., Ltd.)

Number of customers (thousands)............ 27,998 121.2 32,790 117.1 37,353 113.9

Spending per customer (¥) ......................... 1,910 100.1 1,910 100.0 1,789 93.7

Average sales price per unit (¥) ............... 661 100.6 649 98.1 626 96.5

Sales Breakdown by Type of Sales (Ryohin Keikaku Co., Ltd.)

Directly managed stores .... 54,605 52.0 122.2 64,533 58.4 118.2 67,414 60.3 104.5

Licensed stores .......... 22,391 21.3 107.6 20,171 18.2 90.1 18,396 16.4 91.2

Seibu Department Stores group............ 7,155 6.8 105.4 5,806 5.2 81.1 4,673 4.2 80.5

Seiyu .......................... 12,345 11.8 116.4 12,474 11.3 101.0 12,385 11.1 99.3

FamilyMart Group........ 6,649 6.3 94.1 5,992 5.4 90.1 6,071 5.4 101.3

East Japan Kiosk ........... 262 0.2 — 1,041 0.9 397.3 1,365 1.2 131.1

Export............................ 1,580 1.5 130.4 134 0.1 8.5 — — —

Wholesale ...................... 50,385 48.0 108.4 45,621 41.3 90.5 42,892 38.3 94.0

Internet store ................. — — — 422 0.4 — 1,556 1.4 368.7

Others ........................... 10 0.0 109.3 19 0.0 190.0 16 0.0 84.2

Total .............................. 105,001 100.0 115.2 110,596 100.0 105.3 111,880 100.0 101.2

FY1999 FY2000 FY2001¥ Millions Share YOY ¥ Millions Share YOY ¥ Millions Share YOY

(%) (%) (%) (%) (%) (%)

Sales Breakdown by Product Category (Ryohin Keikaku Co., Ltd.)

Directly managed stores

Apparel ........................ 22,158 40.6 121.9 24,919 38.6 112.5 23,983 35.6 96.2

Household goods........... 28,650 52.5 123.5 34,486 53.4 120.4 37,565 55.7 108.9

Food ........................... 3,335 6.1 118.2 4,332 6.7 129.9 5,088 7.5 117.5

Others ......................... 461 0.8 99.2 795 1.2 172.5 777 1.2 97.7

Subtotal.......................... 54,605 100.0 122.2 64,533 100.0 118.2 67,414 100.0 104.5

Wholesale

Apparel ....................... 17,085 33.9 109.9 14,346 31.4 84.0 12,431 29.0 86.7

Household goods........... 26,007 51.6 112.9 24,611 53.9 94.6 23,634 55.1 96.0

Food ........................... 6,978 13.9 91.2 6,537 14.3 93.7 6,766 15.8 103.5

Others ......................... 313 0.6 122.1 125 0.3 39.9 59 0.1 47.2

Subtotal.......................... 50,385 100.0 108.4 45,621 100.0 90.5 42,892 100.0 94.0

Internet store .................. – – 422 – 1,556 368.7

Others ............................ 10 109.3 19 190.0 16 84.2

Total ............................... 105,001 115.2 110,596 105.3 111,880 101.2

FY1999 FY2000 FY2001¥ Millions Share YOY ¥ Millions Share YOY ¥ Millions Share YOY

(%) (%) (%) (%) (%) (%)

FY1999 FY2000 FY2001YOY YOY YOY(%) (%) (%)

Sales Productivity Analysis of Directly Managed Stores (Ryohin Keikaku Co., Ltd.)

Average sales/month per 1m2 (¥ thousands).... 89 98.9 68 76.4 52 76.5

Average sales/month per employee(¥ thousands)............................................ 2,265 91.3 2,040 90.1 1,868 91.6

Average inventories per 1m2 (¥ thousands) ...... 53 100.0 50 94.3 42 84.0

Sales floor space per employee (m2) ......... 25.54 93.0 29.89 117.0 35.75 119.6


Company introduced new items and reviewed existing products. Notably, the introduction of toddler

clothes sales contributed to a 69.0% growth in the sales of children’s wear. On the other hand, sales

of main items fell sharply, including knitwear, shirts and blouses, due to declines in unit prices. There

was also an unsuccessful introduction of the “On-Off” series, on which the company had put great

emphasis, promoting the concept of “going to the office without a tie.” The result was that apparel

sales overall were down from the previous year.

In the household goods sector, sales of linens and interior goods, electronics and electrical appli-

ances, housewares, and outdoor products were brisk. Among linens and interior goods, new prod-

uct lines in the areas of sheets and covers saw solid sales. Among electronics and electrical appli-

ances, sales of items having strong originality increased, including Good Design Award-winning

refrigerators, wall-hanging CD players and drum-type washing machines. Meanwhile, sales of stor-

age containers and bicycles grew sharply among housewares and outdoor goods, respectively.

Concerning food, PET-bottled beverages and other new products contributed to sales growth.

Operating Profit

Consolidated operating profit for the year under review plunged 52.4% from the previous year, to

¥5,515 million. Factors behind this fall were that the ratio of cost of sales to net sales rose by 2.0

percentage points to 60.2% and that sales, general and administrative expenses (SG&A) climbed

15.3%, a larger increase than sales growth.

By region, operating profit from domestic operations came to ¥6,805 million, sliding 44.1% from

the previous year, while U.K. and French operations reported operating losses of ¥618 million and

¥762 million, respectively. Business in Hong Kong posted an operating profit of ¥150 million.

Because deficits increased in Europe, the Company is working hard to pursue the reconstruction of

operations there and profit in the next fiscal year.

To improve cost efficiency in product procurement, the Company continued to limit production to

a select group of manufacturers. Despite this effort, the ratio of cost of sales to net sales increased

mainly for the following reasons in domestic operations: First, the Company disposed of a large

amount of apparel inventories carried over from the preceding years, and second, prices of house-

hold goods were reduced in a bid to increase competitiveness.

A main factor behind the rise of SG&A was that sales growth fell short of an increase in person-

nel and rent expenses at newly opened, directly managed stores. In addition, brisk Internet sales

pushed up costs of delivery to individual customers considerably. In this connection, the Company

plans to improve the situation by changing the delivery system from direct deliveries from individ-

ual stores to dispatching deliveries from the headquarters, as well as reviewing delivery costs

charged to customers.

Net Income

Net income for the year under review dropped 99.8% from the previous year, to ¥13 million. The

decline was partly attributable to the write-off of the shortfall in the reserve for retirement benefit

obligations amounting to ¥449 million on transition to the new accounting standard. Another reason

was that the Company recorded ¥3,846 million of “Loss on disposal of inventories” and “Write-down

Operating Profit to Operating Revenue (%)

Consolidated Operating Profit(Millions of Yen)

13,4

38

11,5

88

10.011.2

12.610.0

4.6

10,4

40

7,55

3

5,51

5

FY 97 98 99 00 01

SG&A to Net Sales (%)

Consolidated SG&A (Millions of Yen)

32,1

45 36,9

26

28.6 29.6

30.132.0

35.8

27,4

84

21,5

83

42,5

81

FY 97 98 99 00 01

Consolidated Net Income(Millions of Yen)

5,88

0

5,68

9

4,41

4

3,35

3

13

FY 97 98 99 00 01


Consolidated Total Assets(Millions of Yen)

51,8

40 55,7

25

44,6

43

39,8

30

52,2

84

FY 97 98 99 00 01

Equity Ratio (%)

Consolidated Total Shareholders Equity (Millions of Yen)

34,6

48 39,1

34

63.065.0 66.8

70.2 72.6

29,0

10

25,1

12

37,9

74FY 97 98 99 00 01

Consolidated Cash Flow(Millions of Yen)

*Cash Flow=Net Income+Depreciation

7,88

4

8,21

4

5,79

0

4,22

5

3,07

0

FY 97 98 99 00 01

of inventories” as the Company cleared away inventories that had been carried over from the pre-

ceding years, most of which were apparel items.

Financial Position

Of current asset items, inventories fell a significant ¥1,975 million from the previous year due to the

across-the-board disposal of inventories carried over from the previous years. Average inventory

turnover shortened 0.2 month from the previous year, to 1.03 month. Tangible fixed assets dropped

¥1,821 million due to such factors as depreciation of tools and furniture acquired for the massive

store expansion in fiscal 1999. Regarding investments, investments in securities rose ¥207 million

from the previous year as the Company acquired shares in EC-One, Inc. As a result, total assets at

the end of fiscal 2001 amounted to ¥52,284 million, a drop of ¥3,441 million.

Current liabilities dropped ¥3,048 million as non-operating notes payable decreased due to the

reduction of store openings and as income taxes payable declined. Furthermore, the adoption of

new accounting standards for retirement benefits caused accrued employee retirement benefits to

rise ¥482 million.

Shareholders’ equity dropped ¥1,160 million from the previous year, to ¥37,974 million, due to a

decline in consolidated net income. Return on assets (ROA) was down from 10.6% to 0.02%, while

return on equity (ROE) fell from 15.4% to 0.03%. These results directly reflect the impact on net

income from the disposal and write-down of inventories.

Cash Flows

Net cash provided by operating activities in fiscal 2001 totaled ¥5,596 million, nearly equal to the

previous year’s level. Although income before taxes dropped ¥10,122 million from the previous year,

inventories were down ¥2,111 million due to the disposal of inventories carried over, and income

taxes paid decreased ¥5,557 million as profit diminished.

Net cash used in investment activities decreased ¥5,284 million, to ¥4,042 million. This decline

came about as investment in tangible fixed assets dropped ¥3,783 million, and leasehold deposits

and guarantee deposits fell ¥1,545 million.

Net cash used in financial activities increased ¥1,799 million, to ¥1,436 million, as the Company

spent ¥216 million in repayment of short-term loans.

As a result of these activities, the balance of cash and cash equivalents as of February 28, 2002,

totaled ¥3,650 million, up ¥172 million from a year earlier.

Capital Investment

On a non-consolidated basis, capital investment during the year under review plunged ¥4,466 mil-

lion, to ¥5,186 million, due to the limited number of stores opened domestically, in contrast to the

vigorous openings seen until the previous year. Capital investment in fiscal 2002 will be reduced to

30% of the fiscal 2001 level as a whole. The Company plans to continue to hold back store openings

since efforts must be concentrated on reform programs to improve profitability. Thus, the main pur-

pose of capital spending in the next year will be the revitalization of existing stores.


Current Assets:

Cash on hand and in banks (Note 4) .......................................................................

Notes and accounts receivable—trade ...................................................................

Inventories ..............................................................................................................

Deferred tax assets—current (Note 9) .....................................................................

Accounts receivable—other....................................................................................

Other current assets ...............................................................................................

Less: allowance for doubtful accounts ....................................................................

Total current assets .................................................................................

Fixed Assets:

Tangible Fixed Assets (Note 6):

At cost.................................................................................................................

Less: accumulated depreciation ..........................................................................

Total tangible fixed assets............................................................................

Intangible Fixed Assets ...........................................................................................

Investments and Advances:

Investments in securities (Note 5).........................................................................

Guarantee deposits (Note 8) ................................................................................

Fixed leasehold deposits (Note 8) ........................................................................

Deferred tax assets—non-current (Note 9)...........................................................

Other investments and advances.........................................................................

Less: allowance for doubtful accounts .................................................................

Total investments and advances..................................................................

Total fixed assets.....................................................................................

Foreign Currency Translation Adjustments ............................................................

Total Assets..........................................................................................

2002

Thousands of U.S. Dollars (Note 3)

20022001ASSETS

Millions of Yen

¥ 3,478

3,339

12,221

220

2,815

1,206

(38)

23,241

21,175

(7,103)

14,072

3,279

311

6,067

5,922

1,257

1,478

–

15,035

32,386

98

¥55,725

¥ 3,650

3,798

10,246

402

–

3,912

(24)

21,984

22,220

(9,969)

12,251

3,465

518

6,090

7,036

1,103

245

(408)

14,584

30,300

–

¥52,284

$ 27,168

28,273

76,266

2,995

–

29,109

(179)

163,632

165,391

(74,205)

91,186

25,793

3,858

45,332

52,374

8,209

1,820

(3,039)

108,554

225,533

–

$ 389,165

Ryohin Keikaku Co., Ltd. and consolidated subsidiariesAs of February 28, 2001 and 2002

The accompanying notes are an integral part of the statements.

Consolidated Balance Sheets

C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S


200220022001


Millions of Yen

Current Liabilities:

Short-term loans payable........................................................................................

Notes and accounts payable—trade.......................................................................

Income taxes payable (Note 9)................................................................................

Accrued expenses ..................................................................................................

Other current liabilities.............................................................................................

Total current liabilities...................................................................................

Long-Term Liabilities:

Accrued retirement benefits for employees (Note 10) ..............................................

Accrued retirement benefits for directors and corporate auditors ............................

Other long-term liabilities ........................................................................................

Total long-term liabilities...............................................................................

Minority Interests in Consolidated Subsidiaries ......................................................

Shareholders’ Equity:

Common stock:

Authorized: 52,156,000 shares

at February 28, 2001 and 2002

Issued: 28,078,000 shares

at February 28, 2001 and 2002 ...............................................................

Additional paid-in capital .........................................................................................

Retained earnings (Note 11)....................................................................................

Net unrealized gain on other securities ...................................................................

Foreign currency translation adjustments ...............................................................

Subtotal ......................................................................................................

Treasury stock ........................................................................................................

Total shareholders’ equity ............................................................................

Total Liabilities, Minority Interests and Shareholders’ Equity ..................

LIABILITIES AND SHAREHOLDERS’ EQUITY

¥ 1,937

5,743

1,498

2,499

2,972

14,649

1,451

254

229

1,934

8

6,766

10,076

22,296

–

–

39,138

(4)

39,134

¥55,725

¥ 1,775

6,061

88

2,051

1,626

11,601

1,933

241

233

2,407

302

6,766

10,076

21,074

4

55

37,975

(1)

37,974

¥52,284

$ 13,215

45,113

653

15,264

12,104

86,349

14,391

1,791

1,734

17,916

2,247

50,363

74,994

156,857

31

413

282,658

(5)

282,653

$389,165



Net Sales ..................................................................................................................

Cost of Sales ............................................................................................................

Gross profit ...........................................................................................................

Other Operating Revenue ........................................................................................

Selling, General and Administrative Expenses .......................................................

Operating profit .....................................................................................................

Other Income (Expenses):

Interest and dividend income.................................................................................

Gain on redemption of insurance funds ................................................................

Interest expenses ..................................................................................................

Loss on sale/disposal of fixed assets .....................................................................

Write-down of inventories .....................................................................................

Loss on disposal of inventories .............................................................................

Loss on cancellation of store rental contracts ........................................................

Write-down of investments in securities .................................................................

Amortization of the unrecognized transition amount arising from

adopting the new accounting standard for retirement benefits for

employees..........................................................................................................

Other, net ..............................................................................................................

Income before income taxes.......................................................................

Income Taxes (Note 9):

—Current ..............................................................................................................

—Deferred.............................................................................................................

Minority Interests in Net Income (Expense) of Consolidated Subsidiaries ...........

Net income............................................................................................................

Per Share (Note 12):

Net income............................................................................................................

Cash dividends......................................................................................................

Weighted average number of shares .....................................................................

¥115,266

67,040

48,226

288

48,514

36,926

11,588

25

–

(29)

(971)

–

–

(249)

(43)

–

113

10,434

4,703

49

4,752

(7)

¥ 5,689

¥202.60

44.00

28,077,076

¥119,188

71,796

47,392

704

48,096

42,581

5,515

20

263

(72)

(588)

(1,401)

(2,446)

(565)

–

(450)

35

312

284

(31)

253

46

¥ 13

¥0.46

44.00

28,077,782

Yen

200220022001

$887,148

534,401

352,747

5,240

357,987

316,941

41,046

150

1,960

(537)

(4,376)

(10,424)

(18,207)

(4,203)

–

(3,349)

263

2,323

2,114

(228)

1,886

340

$ 97

$0.00

0.33


Thousands of U.S. Dollars (Note 3)Millions of Yen

U.S. Dollars (Note 3)

Ryohin Keikaku Co., Ltd. and consolidated subsidiariesFor the years ended February 28, 2001 and 2002

Consolidated Statements of Income


Millions of Yen

Net Foreign Number of Additional unrealized currencyshares of Common paid-in Retained gain on other translation Treasury

common stock stock capital earnings securities adjustments stock

Balance at February 29, 2000 .........................................

Net income for the year ended February 28, 2001 ........

Cash dividends .............................................................

Directors’ and corporate auditors’ bonuses ..................

Net decrease in treasury stock......................................



Cash dividends .............................................................


Increase in net unrealized gain on other securities ........

Foreign currency translation adjustments .....................




Net Foreign Additional unrealized currency

Common paid-in Retained gain on other translation Treasurystock capital earnings securities adjustments stock



Cash dividends .............................................................


Increase in net unrealized gain on other securities ........

Foreign currency translation adjustments .....................



¥17,816

5,689

(1,179)

(30)

–

¥22,296

13

(1,235)

–

–

–

–

¥21,074

$165,955

97

(9,195)

–

–

–

–

$156,857

¥(10)

–

–

–

6

(4)

–

–

–

–

–

3

¥ (1)

$(27)

–

–

–

–

–

22

$ (5)


28,078,000

–

–

–

–

28,078,000

–

–

–

–

–

–

28,078,000

¥6,766

–

–

–

–

6,766

–

–

–

–

–

–

¥6,766

$50,363

–

–

–

–

–

–

$50,363

¥10,076

–

–

–

–

10,076

–

–

–

–

–

–

¥10,076

$74,994

–

–

–

–

–

–

$74,994


¥ –

–

–

–

–

–

–

–

–

4

–

–

¥ 4

$ –

–

–

–

31

–

–

$ 31

¥ –

–

–

–

–

–

–

–

–

–

55

–

¥ 55

$ –

–

–

–

–

413

–

$413

Consolidated Statements of Shareholders’ Equity


Cash Flows from Operating Activities:

Income before income taxes...................................................................................

Depreciation ...........................................................................................................

Amortization of computer software .........................................................................

Increase in allowance for doubtful accounts............................................................

Increase in accrued retirement benefits...................................................................

Interest and dividend income ..................................................................................

Interest expenses ...................................................................................................

Foreign exchange loss ...........................................................................................

Loss on disposal of tangible fixed assets ................................................................

Write-down of long-term prepaid expenses ............................................................

Write-down of investments in securities ..................................................................

Decrease (Increase) in notes and accounts receivable ............................................

Decrease (Increase) in inventories ...........................................................................

Increase (Decrease) in notes and accounts payable................................................

Increase in other assets ..........................................................................................

Increase (Decrease) in other liabilities ......................................................................

Payment of directors’ bonuses ...............................................................................

Subtotal........................................................................................................

Interest and dividend income received ....................................................................

Interest expenses paid............................................................................................

Income tax paid ......................................................................................................

Total .............................................................................................................

Cash Flows from Investing Activities:

Payments for acquisition of fixed assets..................................................................

Proceeds from sale of fixed assets..........................................................................

Payment of fixed leasehold deposits and guarantee deposits .................................

Collection of fixed leasehold deposits and guarantee deposits................................

Payments for acquisition of computer software.......................................................

Redemption from insurance funds ..........................................................................

Acquisition of investments in securities ...................................................................

Others ....................................................................................................................

Total .............................................................................................................

Cash Flows from Financing Activities:

Net increase (decrease) in short-term loans payable ...............................................

Net decrease (increase) in treasury stock................................................................

Dividends paid ........................................................................................................

Total .............................................................................................................

Effect of Exchange Rate Changes on Cash and Cash Equivalents ........................

Increase (Decrease) in Cash and Cash Equivalents ................................................

Cash and Cash Equivalents at Beginning of Year ...................................................

Cash and Cash Equivalents at End of Year .............................................................

¥ 312

3,057

591

394

468

(20)

72

0

588

248

82

227

2,111

120

(632)

(274)

–

7,344

20

(72)

(1,696)

5,596

(2,986)

–

(636)

458

(973)

291

(200)

4

(4,042)

(216)

3

(1,223)

(1,436)

54

172

3,478

¥ 3,650

200220022001

$ 2,323

22,751

4,397

2,936

3,487

(150)

537

2

4,376

1,842

613

1,686

15,713

899

(4,707)

(2,043)

–

54,661

150

(537)

(12,624)

41,650

(22,229)

–

(4,736)

3,414

(7,243)

2,168

(1,485)

28

(30,083)

(1,606)

22

(9,109)

(10,693)

405

1,279

25,889

$ 27,168


¥10,434

2,526

409

2

23

(21)

29

10

986

–

57

(7)

(1,342)

(65)

(467)

352

(30)

12,896

21

(29)

(7,253)

5,635

(6,769)

343

(2,181)

241

(960)

–

–

–

(9,326)

1,538

(7)

(1,168)

363

25

(3,303)

6,781

¥ 3,478



Consolidated Statements of Cash Flows


1. Basis of Presenting the Consolidated FinancialStatements

(1) Accounting principles The accompanying consolidated financial statements have beenprepared from accounts and records maintained by Ryohin KeikakuCo., Ltd. (hereinafter referred to as the “Company”) and its consoli-dated subsidiaries in conformity with accounting principles andpractices generally accepted in Japan, which are different in certainrespects as to application and disclosure requirements ofInternational Accounting Standards.

Certain items presented in the consolidated financial statementsfiled with the Financial Service Agency in Japan have been reclassi-fied for the convenience of readers outside Japan.

The consolidated financial statements are not intended to presentthe consolidated financial position, results of operations and cashflows in accordance with accounting principles and practices gener-ally accepted in countries and jurisdictions other than Japan.

Relevant notes have been added and certain account balances, asdisclosed in the basic consolidated financial statements in Japan,have been reclassified to the extent deemed necessary to enablepresentation in a form which is more familiar to readers outsideJapan.

2. Summary of Significant Accounting Policies

(a) Scope of consolidationThe Company had nine subsidiaries at February 28, 2002 (eight atFebruary 28, 2001). The consolidated financial statements as at andfor the year ended February 28, 2002 include the accounts of theCompany and its all subsidiaries (together, referred to as the“Companies”), of which these nine are listed below:

Direct or Indirect Ownership Percentage

2001 2002

R.K. Trucks Co., Ltd. ...................................... 100.0% 100.0%

Ryohin Keikaku Europe Ltd. ........................... 100.0% 100.0%

Ryohin Keikaku France S.A. ........................... 100.0% 100.0%

Ryohin Keikaku Hong Kong Ltd. ..................... 80.0% 80.0%

Zhuhai Free Trade Zone Ryohin Keikaku Ltd. ... 80.0% 80.0%

Ryohin Keikaku U.S.A., Ltd. ........................... 100.0% 100.0%

MUJI.net Co., Ltd. ......................................... 80.0% 74.6%

HANA-RYOHIN Co., Ltd. ............................... 95.0% 95.0%

MUJI (Hong Kong) Co., Ltd. ........................... – 51.0%

(b) Consolidation principlesThe following consolidated subsidiaries have fiscal year ends thatdiffer from that of the Company. In preparing the consolidated finan-cial statements, the financial statements for the most recent fiscalyear of each subsidiary have been used. Important transactions thatoccurred between their fiscal year ends and the consolidation datehave been included in the consolidation figures as necessary.

December 31 year end Ryohin Keikaku Hong Kong Ltd.Zhuhai Free Trade Zone Ryohin Keikaku Ltd.MUJI (Hong Kong) Co., Ltd.

January 31 year end Ryohin Keikaku Europe Ltd.Ryohin Keikaku France S.A.Ryohin Keikaku U.S.A. Ltd.

For the purposes of preparing the consolidated financial state-ments, all significant inter-company transactions, account balancesand unrealized profits among the Companies have been eliminated.

Any differences which may arise in elimination of cost of an invest-ment in a subsidiary and the amount of underlying equity in netassets of the subsidiary, which may arise in connection with theelimination of investment, were fully amortized.

(c) Translation of foreign currency financial statementsThe translation of foreign currency financial statements of an over-seas subsidiary into yen for consolidation purposes is made byusing the exchange rate prevailing at the balance sheet date inaccordance with the method prescribed by the statement issued bythe Business Accounting Deliberation Council of Japan.

The translations of assets and liabilities and revenues and expens-es are made at the current rate, while the translation of capital stockis made by using the historical rates.

In this connection, a certain adjusting account has been set up forthe reconciliation of the account balances. Such an adjustingaccount is shown as “Foreign currency translation adjustments” inthe accompanying consolidated financial statements.

Effective March 1, 2001, the Company adopted a new accountingstandard for foreign currency-denominated transactions as outlinedin the Japanese Business Accounting Deliberation Council’s paper,“Opinion Concerning the Revision of Accounting Standards forForeign Currency-Denominated Transactions,” issued on October22, 1999. The adoption of the new standard had no impact on theaccompanying consolidated statements of income.

Also, in fiscal 2001, according to the revised Japanese accountingstandards for preparation of consolidated financial statements,“Foreign currency translation adjustments,” which was reported as aseparate item in the “Assets” section in the previous accountingperiods, has been reported as a separate item in the “Shareholders’Equity” section (the balance at February 28, 2002 was ¥55 million(Credit balance)) and included in “Minority interests in consolidatedsubsidiaries” (the balance at February 28, 2002 was ¥25 million(Credit balance)), respectively, as individual occurrences.

(d) Income taxesThe income statements of the Company and its consolidated sub-sidiaries include many items for financial reporting purposes which,in the case of costs and expenses, are not currently deductible and,in the case of income, are not currently taxable. With respect to allsuch temporary differences, the practice of interperiod tax allocationhas been followed based on the asset and liability method.

(e) Inventory valuationMerchandise is mainly stated at cost determined by the specificidentification method. Supplies are valued at cost determined by thelast purchase price method.

Ryohin Keikaku Co., Ltd. and consolidated subsidiaries

N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S


(f) Financial instrumentEffective March 1, 2001, the Company adopted a new accountingstandard for financial instruments as outlined in the JapaneseBusiness Accounting Deliberation Council’s paper, “OpinionConcerning the Establishment of Accounting Standards for FinancialInstruments,” issued on January 22, 1999 and changed the valua-tion method for securities, golf-memberships, derivative transactionsand provision method of accounting standard for allowance fordoubtful accounts.

As a result, “Income before income taxes” decreased by ¥79 million($589 thousand) compared with the figure by the previous method.

i) Valuation of investments in securitiesOther securities:Securities with market quotations—Stated at fair value as determined by the market value at the fiscalyear end. (Net unrealized gains or losses on these securities arereported as a separate item in the shareholders’ equity at a net-of-tax amount. Cost is mainly determined by the moving-averagemethod.)

Securities without market quotations—Stated at cost, cost being determined by the moving-averagemethod.

ii) DerivativesStated at fair value.

(g) Tangible fixed assets and depreciationThe Company and domestic subsidiaries compute depreciation oftangible fixed assets by the declining balance method except thatdepreciation on buildings (excluding leasehold improvements andauxiliary facilities attached to buildings) acquired on or after April 1,1998 is computed on the straight-line basis. Foreign subsidiariesalso compute depreciation on a straight-line basis according to reg-ulations set by the accounting standards of the countries they arelocated in.

Normal repairs and maintenance, including minor renewals andimprovements, are charged to income as incurred.

(h) Accounting for leasesFinance lease transactions, other than those which are deemed totransfer ownership of the leased assets to the lessee, are accountedfor as operating lease transactions.

(i) Intangible fixed assetsAmortization of intangible fixed assets except for computer software(internal use) is computed by the straight-line method as prescribedby Japanese Corporation Tax Law. Amortization of computer soft-ware for internal use is computed by the straight-line method, andrelated useful life is determined by the estimated period of internaluse (five years).

(j) Allowance for doubtful accountsAllowance for doubtful accounts is provided at the aggregated max-imum amount, which is calculated based on the prior loss experi-ence and the estimated amount of probable individual bad debts atthe accounting period end. This amount is considered sufficient tocover possible losses on collection.

(k) Accrued retirement benefits for employeesAccrued retirement benefits for employees represents the estimatedpresent value of projected benefit obligations in excess of the fairvalue of plan assets. Also, the transition amount of ¥450 million($3,349 thousand) arising from the adoption of a new accountingstandard was fully charged to income at the time of new adoption.

Effective March 1, 2001, the Company adopted a new accountingstandard for the recognition of retirement benefits for employeesoutlined in the Japanese Business Accounting Deliberation Council’spaper, “Opinion Concerning the Establishment of AccountingStandards for Retirement Benefits for Employees,” issued on June16, 1998.

As a result, “Income before income taxes” decreased by ¥450 mil-lion ($3,349 thousand) compared with the figure by the previousmethod.

(l) Accrued retirement benefits for directors and corporate auditorsAccrued retirement benefits for directors and corporate auditors areprovided in an amount required to be paid at the end of each term,based upon internal regulation.

(m) Appropriation of retained earningsUnder the Japanese Commercial Code and the Articles ofIncorporation of the Company, the appropriation of retained earn-ings (including cash dividend payments) proposed by the Board ofDirectors should be approved at the shareholders’ meeting, whichmust be held within three months after the end of each fiscal year.The appropriation of retained earnings reflected in the accompany-ing financial statements represents the results of such appropria-tions applicable to the immediately preceding fiscal year and wasapproved at the shareholders’ meeting and disposed of during thatyear. Dividends are paid to shareholders on the shareholders’ regis-ter at the end of each fiscal year. As it is a customary practice inJapan, the payment of bonuses to directors and corporate auditorsis made out of retained earnings instead of being charged to incomeof the year, which constitute a part of appropriations cited above.

(n) Items included in the consolidated statements of retainedearnings

The consolidated statements of shareholders’ equity include appro-priations of retained earnings of consolidated subsidiaries thatoccurred during the accounting period used for the consolidation.

(o) Cash and cash equivalentsFor the purpose of the consolidated statements of cash flows, cashand cash equivalents included cash on hand and bank deposits,and short-term investments, with original maturities of three monthsor less, that are readily convertible to known amounts of cash andthat present insignificant risk of change in value.

(p) ReclassificationsCertain reclassifications of previous reported amounts have beenmade to conform with current classifications.


3. U.S. Dollar Amounts

The Company maintains its accounting records in yen. The dollaramounts included in the consolidated financial statements andnotes thereto represent the arithmetical results of translating yen todollars on a basis of ¥134.35 = U.S. $1. The inclusion of such dollaramounts is solely for convenience and is not intended to imply thatyen amounts have been or could be readily converted, realized orsettled in dollars at ¥134.35 = U.S. $1 or at any other rate.

4. Cash and Cash Equivalents

Cash and cash equivalents year-end balances are reconciled asbelow:

Thousands ofMillions of Yen U.S. Dollars

2001 2002 2002

Cash on hand and in banks ............. ¥3,478 ¥3,650 $27,168

Total ................................................ ¥3,478 ¥3,650 $27,168

5. Investments in Securities

(a) Other securities at February 28, 2002 for which market quota-tions are available:

Millions of Yen

Acquisition CarryingCost Amount Differences

Securities with unrealized gains:

Equity securities............................ ¥162 ¥166 ¥4

Debt securities.............................. 10 13 3

Others .......................................... – – –

Subtotal................................... 172 179 7

Securities with unrealized losses:

Equity securities............................ – – –

Debt securities.............................. – – –

Others .......................................... – – –

Subtotal................................... 172 179 7

Total ........................................ ¥172 ¥179 ¥7


Acquisition CarryingCost Amount Differences

Securities with unrealized gains:

Equity securities............................ $1,202 $1,231 $29

Debt securities.............................. 74 99 25

Others .......................................... – – –

Subtotal................................... 1,276 1,330 54

Securities with unrealized losses:

Equity securities............................ – – –

Debt securities.............................. – – –

Others .......................................... – – –

Subtotal................................... 1,276 1,330 54

Total ........................................ $1,276 $1,330 $54

(b) Other securities at February 28, 2002 for which market quota-tions are not available:

Thousands of Millions of Yen U.S. Dollars

Carrying Amount Carrying Amount

Other securities:

Unlisted equity securities

(excludes over-the-counter

securities) .................................... ¥340 $2,528

Disclosure of the above information for the fiscal year endedFebruary 28, 2001 is not required.

6. Tangible Fixed Assets

Tangible fixed assets at February 28, 2001 and 2002 were as fol-lows:


2001 2002 2002

Buildings and structures.................. ¥11,871 ¥12,950 $96,390

Machinery and equipment ............... 1,482 1,540 11,462

Tools and furniture .......................... 7,123 7,483 55,702

20,476 21,973 163,554

Less: accumulated depreciation ....... (7,103) (9,969) (74,205)

13,373 12,004 89,348

Land ............................................... 247 247 1,838

Construction in progress ................. 452 – –

¥14,072 ¥12,251 $91,186

7. Lease Transactions

(1) Finance leases, other than those which are deemed to trans-fer ownership of the leased assets to the lessee

(a) Amount equivalent to purchase price and amount equivalent toaccumulated depreciation:


2001 2002 2002

Acquisition cost ............................... ¥40 ¥10 $77

Accumulated depreciation ............... 25 5 42

Net book value................................. ¥15 ¥ 5 $35

(b) Lease payments during the fiscal year under review and amountequivalent to depreciation expenses:


2001 2002 2002

Lease payments

(amount equivalent to

depreciation expenses) ................. ¥10 ¥2 $16

Depreciation is calculated using the straight-line method (zero resid-ual value) over the term of lease contract.


(c) Amount equivalent to balance of remaining lease payments:


2001 2002 2002

Future lease payments:

Within one year ......................... ¥10 ¥2 $16

Over one year............................ 6 3 18

Total ................................................ ¥16 ¥5 $34

(2) Remaining Payments on Operating Leases


2001 2002 2002

Future lease rental payments:

Within one year ......................... ¥2 ¥1 $9

Over one year............................ 4 3 23

Total ................................................ ¥6 ¥4 $32

8. Guarantee Deposit and Fixed Leasehold Deposits

Guarantee deposits and fixed leasehold deposits are those paid tothe lessors in connection with the lease contract of buildings andfacilities for office space, computers and related equipment.Lessors in Japan require large amounts of such deposits equivalentto several months’ payments. Those deposits do not bear interestand are generally returnable only when the contract is terminated.

9. Income Taxes

Income taxes applicable to the Company and subsidiaries in Japaninclude (1) corporation tax, (2) enterprise tax and (3) inhabitants taxwhich, in the aggregate, result in an statutory tax rate approximatelyequal to 42.1% for the year ended February 28, 2001 and 2002.

Income tax rates shown in the accompanying consolidated state-ments of income are higher than the aforementioned statutory taxrate. The principal reason such differences arise is permanent differ-ences as essentially domestic dividend income earned, which is nottaxable, entertainment expenses, which are not allowable taxdeductions, increase of valuation allowance with regard to deferredtax assets and inhabitants tax on a per capita basis.

Deferred tax assets and liabilities as of February 28, 2001 and 2002are derived from the temporary differences as follows:


2001 2002 2002Deferred tax assets (Current):Tax loss carryforwards ................... ¥ – ¥ 490 $ 3,649Disallowed losses on petty-sum depreciable tangible fixed assets.. 39 29 217

Accrued enterprise tax ................... 160 28 207Others............................................ 21 12 93

Subtotal ................................. 220 559 4,166Valuation allowance........................ – (157) (1,171)

Total deferred tax assets (Current), net of valuation allowance............................... 220 402 2,995

Deferred tax assets (Non-current):Amounts in excess of the tax limit of provision for accrued retire-ment benefits for employees ........ 606 809 6,025

Accrued retirement benefits for directors and corporate auditors .. 107 101 753

Disallowed losses on petty-sum depreciable tangible fixed assets.. 22 8 57

Disallowed interest paid for acquisition of land ........................ 5 – –

Valuation loss on investments in securities...................................... 274 – –

Loss on disposal of fixed assets..... 237 139 1,034Other ............................................. 6 49 363

Total deferred tax assets (Non-current).......................... 1,257 1,106 8,232

Deferred tax liabilities (Non-current):Net unrealized gain on other securities...................................... – (3) (23)

Total deferred tax liabilities (Non-current).......................... – (3) (23)Net deferred tax assets .......... ¥1,477 ¥1,505 $11,204

10. Retirement Benefits for Employees

In 2002, the Company adopted benefit pension plans governed bythe regulations of Saison Group Pension Plan under the JapaneseWelfare Pension Insurance Law covering its employees who haveworked more than five years. In the following fiscal year, theCompany is planning to secede from the plan and to arrange for theestablishment of a new pension plan.

Projected benefit obligations as of February 28, 2002 were as follows:


2002 2002

Fair value of plan assets....................... ¥ 884 $ 6,580

The balance of accrued retirement

benefits for employees....................... 1,933 14,391

Projected benefit obligations................ ¥2,817 $20,971


Millions of Yen Thousands of U.S. Dollars

2001 2002 2002Contracted Contracted Contracted

amount Valuation amount Valuation amount Valuation(More than Market gain (More than Market gain (More than Market gain

Classification Type 1 year) Value (loss) 1 year) Value (loss) 1 year) Value (loss)

Transactions Forward exchange outside contracts of market Buying

U.S. Dollars ............... 2,421 (–) 2,786 365 7 (–) 10 3 57 (–) 80 23Total ........................ ¥2,421 (–) ¥2,786 ¥365 ¥7 (–) ¥10 ¥3 $57 (–) $80 $23

13. Derivative Information

(1) Transactions, Company’s Policy and Purpose of Derivative TransactionsThe Company uses derivative financial instruments, which comprise foreign exchange forward contracts to minimize exposure to market risksfrom fluctuations in foreign currency exchange. The Company holds derivative financial instruments within the amount of import and exporttransactions denominated in foreign currency.

(2) Risk of TransactionsThe derivative transactions have market risk associated with the market price volatility.

The Company does not anticipate incurring significant losses from the derivative arrangements in the event of nonperformance of the coun-terparties.

(3) Risk ManagementUnder the Company’s rules for derivative transactions, the manager of the accounting and finance division is authorized to enter into foreignexchange forward contracts. The balance of such contracts and the results of derivative transactions are reported once a month or more tothe president and the directors in charge of related departments.

(4) The information of derivatives held by the Company at February 28, 2001 and 2002 is as follows:

Currency Transactions

Note: Market value is based on ruling quotations in the foreign exchange market in Tokyo.

The net pension expense related to the retirement benefits for theyear ended February 28, 2002 was as follows:


2002 2002

Service cost......................................... ¥219 $1,632

Interest cost ........................................ 64 472

Expected return on plan assets ........... (16) (117)

Amortization of actuarial differences..... 7 51

Amortization of transition amount ........ 450 3,349

Net pension expense........................... ¥724 $5,387

Assumptions used in calculation of the above information were asfollows:

2002

Discount rate................................................ 2.5%

Expected rate of return on plan assets ......... 2.5%

Method of attributing the projected

benefits to periods of employee service ...... Straight-line basis

Amortization of unrecognized actuarial

differences ................................................. 1 year

Amortization of transition amount ................. 1 year

11. Legal Reserve and Appropriation of RetainedEarnings

The Japanese Commercial Code provides that an amount equal toat least 10% of cash dividends and other distributions from retainedearnings paid by the company be appropriated to legal reserve untilthe total of such reserve and additional paid-in capital equals 25%of its stated common stock.

The board of directors, with subsequent approval by shareholders’meeting, has made annual appropriations of retained earnings forvarious purposes, of which the accumulated balance is presentedas “Retained earnings” in the accompanying financial statements.Any disposition of such appropriations shall be made at the discre-tion of the board of directors and shareholders’ meeting.

12. Net Income and Dividends per Share

Net income per share of common stock is based upon the weightedaverage number of common stock outstanding during each year,appropriately adjusted for subsequent stock splits. Cash dividendsper share shown for each period in the accompanying statements ofincome represent dividends declared as applicable to each yearafter retroactive adjustments for subsequent stock splits.


14. Segment Information

(1) Business segmentFor the years ended February 28, 2001 and 2002, segment information classified by business segment is disclosed as follows:

Millions of Yen

2001Muji brand sales Other business Total Unallocated & eliminations Consolidated

Outside customers ............................................... ¥115,093 ¥ 461 ¥115,554 ¥ – ¥115,554

Intersegment ........................................................ – – – – –

Operating revenue ......................................... 115,093 461 115,554 – 115,554

Operating expenses.............................................. 103,350 616 103,966 – 103,966

Operating profit (loss)..................................... 11,743 (155) 11,588 – 11,588

Assets .................................................................. 54,628 641 55,269 456 55,725

Depreciation and amortization .............................. 2,487 39 2,526 – 2,526

Capital expenditure............................................... ¥ 6,607 ¥ 13 ¥ 6,620 ¥ – ¥ 6,620

Millions of Yen


Outside customers ............................................... ¥119,293 ¥ 599 ¥119,892 ¥ – ¥119,892

Intersegment ........................................................ – – – – –

Operating revenue ......................................... 119,293 599 119,892 – 119,892

Operating expenses.............................................. 113,582 795 114,377 – 114,377

Operating profit (loss)..................................... 5,711 (196) 5,515 – 5,515

Assets .................................................................. 51,105 599 51,704 580 52,284


Capital expenditure............................................... ¥ 2,314 ¥ 28 ¥ 2,342 ¥ – ¥ 2,342



Outside customers ............................................... $887,928 $4,460 $892,388 $ – $892,388

Intersegment ........................................................ – – – – –

Operating revenue ......................................... 887,928 4,460 892,388 – 892,388

Operating expenses.............................................. 845,422 5,920 851,342 – 851,342

Operating profit (loss)..................................... 42,506 (1,460) 41,046 – 41,046

Assets .................................................................. 380,388 4,459 384,847 4,318 389,165


Capital expenditure............................................... $ 17,224 $ 208 $ 17,432 $ – $ 17,432

Notes: 1. Business divisions are determined according to business development considerations within the Companies.2. Muji brand sales consist of retail sales and wholesale of Mujirushi Ryohin merchandise, while other businesses consist of operation of campsites and retail

sales of flowers.3. Among the overall assets of the Companies, the major items in “Unallocated & eliminations” in 2002 are ¥56 million ($418 thousand) of memberships (¥139

million in 2001) and ¥518 million ($3,858 thousand) of investments in securities (¥311 million in 2001).


Notes: 1. Regional separations are determined by proximity.2. Main countries and areas in regions other than Japan are the United Kingdom and France in Europe, and Hong Kong, China and the United States in

“Other regions.”3. Among the overall assets of the Companies, the major items in “Unallocated & eliminations” in 2002 are ¥56 million ($418 thousand) of memberships

(¥139 million in 2001) and ¥518 million ($3,858 thousand) of investments in securities (¥311 million in 2001).

(3) Overseas Operating RevenuesOverseas operating revenues for the years ended February 28, 2001 and February 28, 2002 have been eliminated from the segment informa-tion as intersegment transfers.

(2) Geographic AreaFor the years ended February 28, 2001 and 2002, segment information classified by geographic area is disclosed as follows:

Millions of Yen

2001Unallocated &

Japan Europe Other regions Total eliminations Consolidated

Outside customers ............... ¥110,876 ¥4,676 ¥ 2 ¥115,554 ¥ – ¥115,554Intersegment ........................ 342 – 2,461 2,803 (2,803) –

Operating revenue ......... 111,218 4,676 2,463 118,357 (2,803) 115,554

Operating expenses.............. 99,048 5,426 177 104,651 (685) 103,966Operating profit (loss)..... 12,170 (750) 2,286 13,706 (2,118) 11,588

Assets .................................. ¥ 53,952 ¥4,126 ¥ 223 ¥ 58,301 ¥(2,576) ¥ 55,725

Millions of Yen

2002Unallocated &


Outside customers ............... ¥113,473 ¥5,606 ¥ 813 ¥119,892 ¥ – ¥119,892Intersegment ........................ – – 109 109 (109) –

Operating revenue ......... 113,473 5,606 922 120,001 (109) 119,892

Operating expenses.............. 106,668 6,991 891 114,550 (173) 114,377Operating profit (loss)..... 6,805 (1,385) 31 5,451 64 5,515

Assets .................................. ¥ 50,581 ¥3,093 ¥1,191 ¥ 54,865 ¥(2,581) ¥ 52,284


2002Unallocated &


Outside customers ............... $844,608 $41,728 $6,052 $892,388 $ – $892,388Intersegment ........................ – – 811 811 (811) –

Operating revenue ......... 844,608 41,728 6,863 893,199 (811) 892,388

Operating expenses.............. 793,958 52,037 6,633 852,628 (1,286) 851,342Operating profit (loss)..... 50,650 (10,309) 230 40,571 475 41,046

Assets .................................. $376,488 $23,022 $8,865 $408,375 $(19,210) $389,165


Current Assets:

Cash on hand and in banks ....................................................................................

Notes and accounts receivable...............................................................................


Inventories ..............................................................................................................

Prepaid expenses ...................................................................................................

Deferred tax assets—current .................................................................................

Accounts receivable—other ...................................................................................

Other current assets ...............................................................................................

Total current assets ................................................................................

Fixed Assets:

Tangible Fixed Assets:

Buildings and structures ......................................................................................

Machinery and equipment ...................................................................................

Vehicles and transportation equipment ................................................................

Tools and furniture...............................................................................................

Land....................................................................................................................

Construction in progress......................................................................................

Total tangible fixed assets............................................................................

Intangible Fixed Assets:

Leasehold............................................................................................................

Trademarks .........................................................................................................

Software ..............................................................................................................

Other intangible fixed assets ................................................................................

Total intangible fixed assets .........................................................................

Investments and Advances:

Investments in securities ......................................................................................

Investments in subsidiaries .................................................................................

Long-term loans to subsidiaries ...........................................................................

Long-term prepaid expenses ...............................................................................

Deferred tax assets—non-current ........................................................................

Guarantee deposits .............................................................................................

Fixed leasehold deposits......................................................................................

Store development in progress ............................................................................

Claim in bankruptcy and similar debts .................................................................

Other investments and advances.........................................................................


Total investments and advances..................................................................

Total fixed assets.....................................................................................

Total Assets........................................................................................

2002


20022001ASSETS

Millions of Yen

¥ 2,767

6,120

(40)

10,967

515

237

–

1,817

22,383

8,198

845

3

2,972

247

414

12,679

1,478

25

1,391

38

2,932

311

212

1,162

16

1,258

5,963

5,921

835

–

429

(7)

16,100

31,711

¥54,094

¥ 1,531

3,494

(26)

9,465

564

390

2,575

1,197

19,190

8,143

697

2

2,240

247

–

11,329

1,478

20

1,738

38

3,274

518

1,874

237

23

1,103

5,958

7,037

–

93

139

(135)

16,847

31,450

¥50,640

$ 11,395

26,005

(194)

70,451

4,199

2,906

19,164

8,910

142,836

60,614

5,184

15

16,676

1,838

–

84,327

11,002

149

12,938

280

24,369

3,858

13,945

1,764

169

8,209

44,348

52,372

–

690

1,039

(1,001)

125,393

234,089

$376,925


Ryohin Keikaku Co., Ltd.As of February 28, 2001 and 2002

N O N - C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S

Non-Consolidated Balance Sheets



Current Liabilities:

Short-term loans payable........................................................................................

Notes and accounts payable—trade.......................................................................

Accounts payable—other .......................................................................................

Consumption taxes payable....................................................................................

Accrued expenses ..................................................................................................

Accrued bonuses ...................................................................................................

Income taxes payable .............................................................................................

Other current liabilities.............................................................................................

Total current liabilities.......................................................................................

Long-Term Liabilities:

Accrued retirement benefits for employees .............................................................

Accrued retirement benefits for directors and statutory auditors..............................

Other long-term liabilities ........................................................................................

Total long-term liabilities...................................................................................

Total liabilities.................................................................................................

Shareholders’ Equity:

Common stock;

Authorized: 52,156,000 shares

at February 28, 2001 and 2002

Issued: 28,078,000 shares

at February 28, 2001 and 2002 ...............................................................

Additional paid-in capital .........................................................................................

Legal reserve ..........................................................................................................

General reserves.....................................................................................................

Retained earnings...................................................................................................

Net unrealized gain on other securities....................................................................

Treasury stock ........................................................................................................

Total shareholders’ equity ............................................................................

Total Liabilities and Shareholders’ Equity ............................................

200220022001LIABILITIES AND SHAREHOLDERS’ EQUITY

¥ 1,400

6,721

583

115

2,177

256

1,468

236

12,956

1,451

254

229

1,934

14,890

6,766

10,076

370

16,000

5,992

–

–

39,204

¥54,094

¥ 1,600

5,978

147

91

1,681

–

57

294

9,848

1,933

241

233

2,407

12,255

6,766

10,076

493

20,500

546

4

(1)

38,385

¥50,640

$ 11,909

44,495

1,093

677

12,515

–

426

2,187

73,302

14,391

1,791

1,734

17,916

91,218

50,363

74,994

3,672

152,587

4,065

31

(5)

285,707

$376,925



Net Sales....................................................................................................................

Cost of Sales .............................................................................................................

Gross profit.............................................................................................................

Other Operating Revenue .........................................................................................

Selling, General and Administrative Expenses ........................................................

Operating profit.......................................................................................................

Other Income (Expenses):

Interest and dividend income ..................................................................................

Interest expenses ...................................................................................................

Gain on redemption of insurance funds...................................................................

Gain on sale of investments in securities .................................................................

Loss on sale/disposal of fixed assets ......................................................................

Write-down of inventories .......................................................................................

Loss on disposal of inventories ...............................................................................

Loss on cancellation of store rental contracts .........................................................

Write-down of investments in subsidiary .................................................................

Loss on forgiveness of debt to subsidiary ...............................................................

Amortization of the unrecognized transition amount arising from

adopting the new accounting standard for retirement benefits for

employees ............................................................................................................

Other, net ...............................................................................................................

Income before income taxes........................................................................

Income Taxes

—Current................................................................................................................

—Deferred..............................................................................................................

Net income..................................................................................................

Per Share:

Net income.............................................................................................................

Cash dividends .......................................................................................................

Weighted average number of shares.......................................................................

200220022001

¥110,597

64,959

45,638

472

46,110

33,916

12,194

83

(5)

–

13

(970)

–

–

(17)

(1,370)

–

–

70

9,998

4,672

(30)

4,642

¥ 5,356

¥190.75

44.00

28,077,076

¥111,880

68,429

43,451

633

44,084

37,276

6,808

34

(8)

263

–

(473)

(1,401)

(2,446)

(121)

(47)

(1,450)

(450)

(58)

651

240

(2)

238

¥ 413

¥14.71

44.00

28,077,782

$832,752

509,337

323,415

4,712

328,127

277,456

50,671

253

(56)

1,960

–

(3,522)

(10,425)

(18,207)

(904)

(348)

(10,792)

(3,349)

(432)

4,849

1,786

(12)

1,774

$ 3,075

$0.11

0.33


YenU.S. Dollars

(Note 3)


Ryohin Keikaku Co., Ltd.For the years ended February 28, 2001 and 2002

Non-Consolidated Statements of Income


Millions of Yen

Net Number of Additional unrealizedshares of Common paid-in Legal General Retained gain on other Treasury

common stock stock capital reserve reserves earnings securities stock

Balance at February 29, 2000 .......................................

Net income for the year ended February 28, 2001 ......

Cash dividends ...........................................................

Transfer to legal reserve ..............................................

Directors’ and corporate auditors’ bonuses ................

Transfer to general reserves ........................................


Net income for the year ended February 28, 2002 ......

Cash dividends ...........................................................

Transfer to legal reserve ..............................................

Directors’ and corporate auditors’ bonuses ................

Transfer to general reserves ........................................

Increase in net unrealized gain on other securities.......

Net increase in treasury stock .....................................



Net Additional unrealized

Common paid-in Legal General Retained gain on other Treasurystock capital reserve reserves earnings securities stock



Cash dividends .............................................................

Transfer to legal reserve................................................


Transfer to general reserves..........................................

Increase in net unrealized gain on other securities.........

Net increase in treasury stock.......................................



¥11,000

–

–

–

–

5,000

16,000

–

–

–

–

4,500

–

–

¥21,500

$119,092

–

–

–

–

33,495

–

–

$152,587

¥ –

–

–

–

–

–

–

–

–

–

–

–

–

(1)

¥ (1)

$ –

–

–

–

–

–

–

(5)

$ (5)

28,078,000

–

–

–

–

–

28,078,000

–

–

–

–

–

–

–

28,078,000

¥6,766

–

–

–

–

–

6,766

–

–

–

–

–

–

–

¥6,766

$50,363

–

–

–

–

–

–

–

$50,363

¥10,076

–

–

–

–

–

10,076

–

–

–

–

–

–

–

¥10,076

$74,994

–

–

–

–

–

–

–

$74,994

¥ –

–

–

–

–

–

–

–

–

–

–

–

4

–

¥ 4

$ –

–

–

–

–

–

31

–

$ 31

¥248

–

–

122

–

–

370

–

–

123

–

–

–

–

¥493

$2,751

–

–

921

–

–

–

–

$3,672

¥6,967

5,356

(1,179)

(122)

(30)

(5,000)

5,992

413

(1,235)

(123)

–

(4,500)

–

–

¥ 546

$44,601

3,075

(9,195)

(921)

–

(33,495)

–

–

$ 4,065

Ryohin Keikaku Co., Ltd. For the years ended February 28, 2001 and 2002

Non-Consolidated Statements of Shareholders’ Equity


1. Basis of Presenting the Non-Consolidated FinancialStatements

The accompanying non-consolidated financial statements havebeen prepared from accounts and records maintained by RyohinKeikaku Co., Ltd. (the “Company”) in accordance with the provi-sions set forth in the Japanese Commercial Code and in conformitywith accounting principles and practices generally accepted inJapan, which are different in certain respects as to application anddisclosure requirements of International Accounting Standards.

Certain items presented in the non-consolidated financial state-ments filed with the Financial Service Agency in Japan have beenreclassified for the convenience of readers outside Japan.

The non-consolidated financial statements are not intended to pre-sent the non-consolidated financial position and results of opera-tions in accordance with accounting principles and practices gener-ally accepted in countries and jurisdictions other than Japan.

2. Accounting Principles

Accounting principles and practices employed by the Company inpreparing the accompanying non-consolidated financial statements,which have significant effects thereon, are explained in Note 2 of theNotes to the Consolidated Financial Statements. Therefore, theaccompanying non-consolidated financial statements should beread in conjunction with such notes.

3. United States Dollar Amounts

The Company maintains its accounting records in yen. The dollaramounts included in the non-consolidated financial statements andnotes thereto represent the arithmetical results of translating yen todollars on a basis of ¥134.35=U.S. $1. The inclusion of such dollaramounts is solely for convenience and is not intended to imply thatyen amounts have been or could be readily converted, realized orsettled in dollars at ¥134.35=U.S. $1 or at any other rate.

The Board of Directors


We have audited the accompanying consolidated balance sheets of Ryohin Keikaku Co., Ltd. (hereinafter referred to as

the “Company”) and its consolidated subsidiaries as of February 28, 2002 and 2001, and the related consolidated state-

ments of income, shareholders’ equity, and cash flows for the years then ended, all expressed in Japanese yen. Our

audits were made in accordance with auditing standards, procedures and practices generally accepted and applied in

Japan and, accordingly, included such tests of the accounting records and such other auditing procedures as we con-

sidered necessary in the circumstances.

In our opinion, the consolidated financial statements referred to above present fairly the consolidated financial posi-

tion of Ryohin Keikaku Co., Ltd. and its consolidated subsidiaries as of February 28, 2002 and 2001, and the consoli-

dated results of their operations and their cash flows for the years then ended in conformity with accounting principles

and practices generally accepted in Japan (see Note 1) applied on a consistent basis.

As described in Note 2., effective from the year ended February 28, 2002, the Company has adopted new Japanese

accounting standards for recognition of retirement benefits for employees, financial instruments and foreign currency-

denominated transactions.

The amounts expressed in U.S. dollars, which are provided solely for the convenience of the reader, have been trans-

lated on the basis set forth in Note 3 to the accompanying consolidated financial statements.

ChuoAoyama Audit Corporation

Tokyo, Japan

May 23, 2002


N O T E S T O T H E N O N - C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S

R E P O R T O F T H E I N D E P E N D E N T C E R T I F I E D P U B L I C A C C O U N T A N T SO N T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S


0

2,000

1,000

3,000

4,000

1/31 2/28 3/30 4/27 5/31 7/31 9/28 11/30 1/31 2/28 3/29 4/3010/318/31 12/286/29

(·)

(2001) (2002)

Distribution of Shares (As of February 28, 2002)

Number of Number of % of sharesshareholders shares held in issue

Financial institutions 77 11,948,000 42.55

Securities companies 36 284,000 1.01

Other corporations 361 4,182,800 14.90

Foreign companies and individuals

160 5,104,912 18.18

Individuals and others 24,510 6,558,288 23.36

Total 25,144 28,078,000 100.00

Major Shareholders (As of February 28, 2002)

Number of Percentage ofshares held shares in (thousand) issue (%)

The Mitsubishi Trust and Banking Corporation 2,344 8.35

Japan Trustee Services Bank, Ltd. 1,977 7.04

UFJ Trust Bank Limited 1,916 6.83

The Nomura Trust and Banking Co., Ltd. 1,869 6.66

The Seiyu, Ltd. 1,787 6.37

The Chuo Mitsui Trust and Banking Co., Ltd. 1,241 4.42

Trust & Custody Services Bank, Ltd. 1,057 3.77

Mitsubishi Corporation 856 3.05

Citibank London General UK Resident Treaty JAS Client

847 3.02

The Chase Manhattan Bank N.A. London 668 2.38

Total 14,566 51.88

Corporate Data (As of February 28, 2002)

Corporate Name Ryohin Keikaku Co., Ltd.

Address 4-26-3, Higashi-Ikebukuro Toshima-ku, Tokyo 170-8424, Japan

Telephone 03-3989-4403

Web site http://www.muji.co.jp

Date of Establishment May 18, 1979

Paid-in Capital ¥6,766 million

Fiscal Year-end Last day of February

Revenue ¥112,513 million

Number of Employees 679 (average age: 31.5)

Number of Retail Outlets Directly managed: 105

Licensed: 169

Primary Business Operation of MUJI retail outlets,product planning, development,manufacture, wholesale, and sales

Management (As of May 22, 2002)

Chairman Masao Kiuchi

President Tadamitsu Matsui*

Senior Managing Directors Shigeyoshi Oikawa*

Masanobu Furuta

Managing Directors Masaaki KanaiNaohiro Asada

Directors Shuji AbeHidejiro Fujiwara

Corporate Auditors Ryuhei MurayamaTakashi OkamuraKatsuhiro KawaiTatsuo Sukekawa

* Representative directors

Advisory Board Kazuko KoikeHiroshi KojitaniTakashi SugimotoMasaru AmanoKenya HaraNaoto Fukasawa

Note: The listed number of shares held includes those left in trust. A breakdown oftrustees and numbers of shares is as follows:

The Mitsubishi Trust and Banking Corporation ..................... 2,290 thousand

Japan Trustee Services Bank Ltd. ........................................ 1,904 thousand

The Nomura Trust and Banking Co., Ltd. ............................. 1,866 thousand

UFJ Trust Bank Limited ....................................................... 1,853 thousand

The Chuo Mitsui Trust and Banking Co., Ltd. ....................... 1,229 thousand

Trust & Custody Services Bank, Ltd. .................................... 999 thousand

Stock Price

C O R P O R A T E D A T AA N D M A N A G E M E N T

S T O C K I N F O R M A T I O N

Printed in Japan

Ryohin Keikaku Co., Ltd.4-26-3, Higashi-Ikebukuro

Toshima-ku, Tokyo 170-8424, Japan

A NNUAL R EPORT 2002 - 株式会社...

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