Summary of Financial Results for the Fiscal Year 2013 (Ended December 31, 2013)[Japanese GAAP]
February 6, 2014
Company name: Senshukai Co., Ltd.
Stock exchange: Tokyo Stock Exchange, First Section
Stock code:
8165
URL: http://www.senshukai.co.jp
Representative:
Mr. Michio Tanabe, President and Representative Director
Inquiries:
Mr. Hiroyuki Hoshino, Director, Executive Officer,
General Manager of the Corporate Development Division Tel: +81-6-6881-3220
Scheduled date of annual general meeting of shareholders: March 28, 2014
Scheduled date of payment of dividend: March 31, 2014
Scheduled date of filing of Annual Security Report: March 31, 2014
Preparation of supplementary materials for financial results: Yes
Holding of financial results meeting: Yes(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year 2013 (January 1, 2013 – December 31, 2013)(1) Consolidated operating results(Percentages represent changes from the same period of the previous fiscal year)
Operating income
Ordinary income
Net income

Net sales
Millions of yen%

Millions of yen%

Millions of yen

Fiscal Year 2013
141,552
(2.9)
4,019
90.5
Fiscal Year 2012
145,750
6.2
2,109 (32.1)
Note: Comprehensive income (millions of yen) Fiscal Year 2013: 6,380 (up 51.1%)
Net income per
share

Diluted net income
per share

Yen

%

%

Yen

%

Ordinary income to Operating income
total assets
to net sales

Return on equity

Fiscal Year 2013
93.43
Fiscal Year 2012
46.86
Reference: Equity in earnings (losses) of affiliates (millions of yen)

Millions of yen

4,631 67.5
4,046
99.4
2,765 (14.5)
2,029
28.2
Fiscal Year 2012: 4,224 (up 57.4%)

8.5
4.7
Fiscal Year 2013: 142

%

%

4.8
3.0
Fiscal Year 2012: 93

2.8
1.4

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

Fiscal Year 2013
98,80050,359Fiscal Year 2012
92,88744,932
Reference: Shareholders’ equity (millions of yen) Fiscal Year 2013: 50,359

Net assets per share
%

Yen

51.0
48.4
Fiscal Year 2012: 44,932

1,162.81
1,037.48(3) Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

2,174
2,337

(2,168)(3,606)

(986)
991

6,495
7,452

Fiscal Year 2013
Fiscal Year 2012

2. Dividends
Dividend per share
2Q-end 3Q-end Year-end

1Q-endFiscal Year 2012
Fiscal Year 2013
Fiscal Year 2014
(forecasts)

Total

Total dividends(total)Payout ratio Dividend on equity(consolidated)(consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

-

10.00
12.00

-

10.00
12.00

20.00
24.00

866
1,039

42.7
25.7

2.0
2.2

-

12.00

-

12.00

24.00

45.2

3. Consolidated Outlook for Fiscal Year 2014 (January 1, 2014 – December 31, 2014)(Percentages represent changes from the same period of the previous fiscal year)
Net income
Operating income
Ordinary income
Net income
per share

Net sales
Millions of yen

2Q 2014 (cumulative)
Full Year 2014

76,400150,000% Millions of yen

5.0
6.0

%

1,100 (32.4)
3,600 (10.4)

Millions of yen% Millions of yen

1,400 (29.8)
4,000 (13.6)%

Yen

700 (43.6)
2,300 (43.2)

16.16
53.11

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
Newly added: -Excluded: -(2) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: Yes
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: Yes
4) Restatements: None
Note: Subject to “Changes in accounting policies that are difficult to distinguish from changes in accounting-based
estimates” since the Company has revised its depreciation method from the current fiscal year. Please refer to “(5)Notes to Consolidated Financial Statements, Changes in Accounting Policies That Are Difficult to Distinguish from
Changes in Accounting-based Estimates” on page 15 for further information.

(3) Number of shares outstanding (common shares)
1) Number of shares outstanding at end of period (including treasury stock)
Fiscal year 2013:

47,630,393 sharesFiscal Year 2012:

47,630,393 sharesFiscal Year 2012:

4,321,445 sharesFiscal Year 2012:

43,309,151 shares

2) Number of shares of treasury stock at end of period
Fiscal year 2013:

4,321,851 shares

3) Average number of shares outstanding during the period
Fiscal year 2013:

43,308,765 shares(Reference) Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for Fiscal Year 2013 (January 1, 2013 – December 31, 2013)(1) Non-consolidated operating results(Percentages represent changes from the same period of the previous fiscal year)
Net income
Operating income
Ordinary income

Net sales
Fiscal Year 2013
Fiscal Year 2012

Fiscal Year 2013
Fiscal Year 2012

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

126,483
130,589

(3.1)
5.2

2,973
1,996

48.9
(38.0)

3,634
2,654

36.9
(24.4)

3,214
1,916

67.7
(0.8)

Net income per share

Diluted net income per share

Yen

Yen

74.21
44.26

-

(2) Non-consolidated financial position
Total assets
Millions of yen
91,41786,855

Net assets
Millions of yen

Fiscal Year 2013
48,959Fiscal Year 2012
44,505
Reference: Shareholders’ equity (millions of yen) Fiscal Year 2013: 48,959

Equity ratio

Net assets per share
%

53.6
51.2
Fiscal Year 2012: 44,505

Yen

1,130.48
1,027.63* Disclosure regarding the implementation of audit proceduresThis financial report is not subject to the audit procedures based on the Financial Instruments and Exchange Act. Thus, at th etime of its disclosure, the financial statement audit procedures based on the Financial Instruments and Exchange Act have notbeen completed.
* Cautionary statement with respect to forward-looking statements
The above projections are based on information available at the time of release of this report. Actual results could differ
significantly from these projections due to a variety of factors. For further details regarding the projections, please refer topage 4.

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

Contents of Attachments
1. Analysis of Operating Results and Financial Position

2(1) Analysis of Operating Results

2(2) Analysis of Financial Position

3(3) Basic Policy Regarding Distribution of Earnings and Dividends in the Current and Next Fiscal Years

4(4) Outlook for Fiscal Year 20144

2. Group Organization

5

3. Management Policies

6(1) Basic Management Policy

6(2) Key Performance Indicators

6(3) Medium- to Long-term Corporate Management Strategy and Issues

6(4) Other Important Business Matters

7

4. Consolidated Financial Statements

8(1) Consolidated Balance Sheet

8(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

10

Consolidated Statement of Income

10

Consolidated Statement of Comprehensive Income11(3) Consolidated Statement of Changes in Equity

12(4) Consolidated Statement of Cash Flows

14(5) Notes to Consolidated Financial Statements

15

Going Concern Assumption

15

Changes in Accounting Policies That Are Difficult to Distinguishfrom Changes in Accounting-based Estimates

15

Notes to Consolidated Statement of Income

15

Segment and Other Information

17

Per Share Information

18

Subsequent Events18

5. Other19(1) Changes in Members of Board of Directors

19(2) Production, Orders and Sales

19

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Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

1. Analysis of Operating Results and Financial Position(1) Analysis of Operating Results
Overview
In the fiscal year under review, share prices rose and the yen depreciated due to the government’s economic policies
and the Bank of Japan’s monetary easing, and corporate profits and personal consumption showed signs of picking
up, but as these improvements were limited, the outlook for the Japanese economy remained uncertain. In the retailindustry, department stores reported strong sales of some luxury items, but overall conditions in the retail industry
remained harsh. In the mail-order industry, sales continued to rise as the spread of smartphones, tablets, and othermobile devices expanded the online shopping market, and the fusion of online and brick-and-mortar shopping islikely to expand the market further. However, competition is intensifying due to the entry of companies from outside
the industry, and M&A activity.
In this environment, the Senshukai Group pulled together to advance its growth strategy and achieve the targets of
its medium-term management plan which concludes in this fiscal year.
Net sales in the current fiscal year decreased 2.9% year-over-year to 141,552 million yen due to weak sales in the
mail-order business.
As for profits, due to an improvement in the gross profit margin, and the cutting of selling , general andadministrative expenses, operating income increased 90.5% year-over-year to 4,019 million yen. Ordinary income
increased 67.5% year-over-year to 4,631 million yen. Net income increased 99.4% to 4,046 million yen due to loss
on sales and retirement of noncurrent assets and other factors.
Overview by segment(Mail-order Business)
Consolidated sales in the mail-order business, comprising the catalog and the hanpukai businesses, decreased 3.0%
year-over-year to 126,498 million yen in the current fiscal year. Sales declined, but the gross profit margin improved
thanks to higher sales of strategic products and review of the price range. Operating income in the mail-orderbusiness surged 185.6% year-over-year to 2,840 million yen. There were reductions in distribution-related costs due
to more efficient logistics as well as in catalog-related costs from review in the printing costs.
1) Catalog businessIn the catalog business, we provide customers with lifestyle ideas in a wide variety of genres through a range ofcatalogs and the online shop “Belle Maison Net.” We also develop many original products that focus on Senshukaistyle.
Internet sales, and Internet-only sales* in particular, increased due to system strengthening in response to the spreadof smartphones and tablets. However, as unseasonable weather lowered sales of apparel and fashion accessories,
overall sales in the catalog business decreased 2.6% year-over-year to 118,135 million yen. (*Internet-only sales: A
customer makes purchase by putting product into online shopping cart.)
2) Hanpukai business
The hanpukai business employs an original, unique sales model differing from other mail-order companies whereby
original goods are delivered monthly to all group and individual members, mainly working women. Consolidated
sales in the hanpukai business decreased 8.8% year-over-year to 8,362 million yen, due to a decline in the numberof individual and corporate members.
(Bridal Business)
Consolidated sales in the bridal business, centered on the house wedding business, increased 5.2% year-over-year to
10,731 million yen in the current fiscal year, due to contributions from the opening of a new facility and an increasein average sales per wedding. Operating income decreased 6.7% year-over-year to 701 million yen.

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Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

(Corporates Business)
Consolidated sales in the corporates business, which provides products and service s to corporations, increased 0.1%
year-over-year to 3,838 million yen, and operating income decreased 0.8% year-over-year to 393 million yen.
(Others)
Consolidated sales in other businesses, which consist of the services business (primarily travel and credit card
services) and the pet business (pet goods sales through retail stores), decreased 61.6% year-over-year to 484 million
yen in the current fiscal year due to withdrawal from pet business. Operating income totaled 83 million yen,
compared with an operating loss of 33 million yen in the previous fiscal year.
(2) Analysis of Financial Position(Balance sheet position)
Assets totaled 98,800 million yen at the end of the current fiscal year, an increase of 5,912 million yen from the endof the previous fiscal year.
Current assets increased 3,929 million yen to 50,177 million yen. The main factors were increases of 4,651 million
yen in merchandise and finished goods, and 1,289 million yen in forward exchange contracts, while there weredecreases of 957 million yen in cash and deposits, 595 million yen in short-term investment securities and 342
million yen in accounts receivable-other. Noncurrent assets increased 1,983 million yen to 48,622 million yen. The
main factors were increases of 601 million yen in property, plant and equipment, and 1,923 million yen in
investments and other assets, while there was a decrease of 542 million yen in intangible assets.
Current liabilities increased 2,572 million yen to 39,635 million yen. The main factors were increases of 6,204
million yen in electronically recorded obligations-operating and 2,980 million yen in short-term loans payable,
while there were decreases of 5,499 million yen in accounts payable-factoring, and 1,577 million yen in notes andaccounts payable-trade. Noncurrent liabilities decreased 2,087 million yen to 8,805 million yen. The main factors
were decreases of 2,178 million yen in long-term loans payable and 700 million yen in bonds payable, while there
was an increase of 499 million yen in lease obligations.
Net assets increased 5,427 million yen to 50,359 million yen. The main factors were increases of 2,772 million yen
in retained earnings, 1,353 million yen in valuation difference on available-for-sale securities, and 839 million yen
in deferred gains or losses on hedges. Consequently, the equity ratio was 51.0%.
(Cash flow position)
The balance of cash and cash equivalents at the end of the current fiscal year was 6,495 million yen, a decrease of
957 million yen from the end of the previous fiscal year.
Operating activities provided net cash of 2,174 million yen (net cash provided of 2,337 million yen in the previous
fiscal year). The main cash inflows were an increase in notes and accounts payable-trade of 4,606 million yen,income before income taxes and minority interests of 3,760 million yen, depreciation and amortization of 2,618
million yen, and loss (gain) on sales and retirement of noncurrent assets of 656 million yen. The main cash outflows
were a decrease in other current liabilities of 5,586 million yen, and an increase in inventories of 4,561 million yen.
Investing activities used net cash of 2,168 million yen (net cash used of 3,606 million yen in the previous fiscal
year). The main cash outflows were 2,694 million yen for the purchase of property, plant and equipment, and 782
million yen for the purchase of intangible assets. The main cash inflows were proceeds from redemption of
investment securities of 900 million yen.
Financing activities used net cash of 986 million yen (net cash provided of 991 million yen in the previous fiscal
year). The main cash inflow was an increase in short-term loans payable of 3,000 million yen, while main cash
outflows were repayment of long-term loans payable of 2,448 million yen, cash dividends paid of 950 million yen
and redemption of bonds of 700 million yen.

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Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

Cash flow indicesFiscal Year 2011
(As of Dec. 31, 2011)

Fiscal Year 2012
(As of Dec. 31, 2012)

Fiscal Year 2013
(As of Dec. 31, 2013)

Equity ratio (%)

45.8

48.4

51.0

Equity ratio based on fair value (%)

24.8

24.7

38.6

Average debt repayment period (years)

24.8

5.9

6.7

Interest coverage ratio (times)
1.9
9.4
Notes: 1. Cash flow indices are calculated, using consolidated financial figures, as follows:
The equity ratio is shareholders’ equity divided by total assets.
The equity ratio based on fair value is market capitalization divided by total assets.
The average debt repayment period is interest-bearing debt divided by the quantity of operating cash flows.
The interest coverage ratio is operating cash flows divided by interest payments.

9.8

2. Market capitalization is calculated by multiplying the closing share price at the end of the period by the number ofshares issued and outstanding at the end of the period, excluding treasury stock.
3. Interest-bearing debt represents all liabilities shown on the consolidated balance sheet that incur interest.
4. Operating cash flows and interest payments represent net cash provided by (used in) operating activities and interest
expenses paid, respectively, on the consolidated statement of cash flows.

(3) Basic Policy Regarding Distribution of Earnings and Dividends in the Current and Next Fiscal Years
The Group’s basic policy is to strengthen the business foundation while maintaining stable dividends, taking into
consideration the payout ratio, and ensuring a fair distribution of earnings to shareholders that reflects its businessperformance.
Specifically, the Group’s policy regarding the distribution of earnings to shareholders is to strive continuously for apayout ratio of 30% on a consolidated basis. The Group will use internal reserves to invest in the development of
new businesses for the medium to long term, to promote the efficiency of existing businesses, to conduct mergers
and acquisitions for expanding the Group businesses, to improve the soundness of its financials, and to generally
further strengthen its competitiveness and operations. Based on the aforementioned policies, the Group plans to pay
a year-end dividend of 12 yen per share in line with initial plan. Together with an interim dividend of 12 yen per
share, total annual dividend of 24 yen per share is to be paid.
Regarding dividends in Fiscal Year 2014, we plan to pay a total annual dividend of 24 yen per share comprised of aninterim dividend of 12 yen per share and a year-end dividend of 12 yen per share, the same as in Fiscal Year 2013.
(4) Outlook for Fiscal Year 2014
The Japanese economy remains on a recovery path thanks to yen’s depreciation and rising share prices since lastyear, and improvements in the employment and wage environment with the unemployment rate declining andcompanies raising wages. However, the outlook for personal consumption remains uncertain due to concerns about adrop in consumption by the reaction of consumption-tax hike in April.
In the new fiscal year, Senshukai forecasts sales will rise due to growth in the mail -order and bridal businesses, but
forecasts a decline in profits at every level as the yen’s depreciation and surging raw materials prices increase thecost-of-sales ratio, and reorganization of the logistics network increases temporary costs.
Based on this outlook, our earnings forecasts for the Fiscal Year 2014 are as follows.
Consolidated(Millions of yen)
Net sales

Operating income

Ordinary income

Net income

Fiscal Year 2014 (forecast)

150,000

3,600

4,000

2,300

Fiscal Year 2013 (results)

141,552

4,019

4,631

4,046

6.0

(10.4)(13.6)(43.2)

Change (%)* The above projections are based on information available at the time of release of this report. Actual results could differ fromprojections due to a variety of factors.

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Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

2. Group Organization
The Senshukai Group comprises the parent company, 15 subsidiaries, and 7 affiliates. Mail-order Business is themainstay business, and we also operate the Bridal Business, Corporates Business and others.
The following describes the position of each major business activity in the Group’s operations and business segments.
Segment
Mail-order
Business

Major business activity
Mail order

Order processing
Transportation and warehousing
Bridal BusinessCorporates Business
OthersCompany
Senshukai Co., Ltd., Senshukai Service Hanbai Co., Ltd.,Senshukai Iihana Co., Ltd., Shanghai Senshu Merchant andCommerce Co., Ltd., Senshukai Hong Kong Ltd., Luckwin
GF China Co., Ltd., SENTENs Co., Ltd., Mobakore Co.,
Ltd., K.Sense Co., Ltd., and 7 other companies
Senshukai Call Center Co., Ltd.
Belle Maison Logisco Co., Ltd., Senshu Logisco Co., Ltd.
Dears Brain Inc.
Senshukai Co., Ltd.
Senshukai General Services Co., Ltd., and 2 other companies

Schematic of businesses
Consolidated subsidiaryNon-consolidated subsidiary
Subsidiary accounted for by the equity method

Affiliate accounted for by the equity method
Affiliate not accounted for by the equity method

Senshukai Iihana Co., Ltd.
Purchase products

Mobakore Co., Ltd.

Sell products

SENTENs Co., Ltd.
K.Sense Co., Ltd.
1 non-consolidated subsidiary

Outsources
product packing
and packaging

Orderprocessing

Belle Maison Logisco Co., Ltd.

Provides services

Senshukai General
Services Co., Ltd.
2 non-consolidated subsidiaries

Provideservicess

Corporates
Business

Dears Brain Inc.

BridalBusiness

2 consolidated subsidiaries

Provides solution and promotional services-5-

Business

Senshu Logisco Co., Ltd.

Other outsourcing
services

OthersLtd.

4 non-equity-method affiliates

Outsources
product
inspection

Senshukai Call Center
Co., Ltd.

Mail-order BusinessCo., Ltd.

Senshukai Co., Ltd.

s

Suppliers

Outsources customer
services and area
Senshukai Service Hanbai
marketingOutsources
buyingproducts

Outsources orderprocessing

Luckwin GF China Co., Ltd.

Sells productssOutsources buying products

Purchases products

Senshukai Hong Kong Ltd.

Sells products

Shanghai Senshu Merchant andCommerce Co., Ltd.

Customers

Purchases products

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

3. Management Policies(1) Basic Management Policy
The Senshukai Group’s corporate philosophy is to “contribute to society by providing customers with outstanding
products and services.”
Senshukai works together with its shareholders, customers, business partners, employees, and all other stakeholders
to enhance corporate value and mutual prosperity.
(2) Key Performance Indicators
In the medium- to long-term management plan “Innovate for Smiles 2018” (Fiscal Year 2014 through Fiscal Year2018), we aim to build a solid and distinct position in the mail-order market which is expected to continue growing
while pro-actively developing new businesses appropriate to our corporate vision “Women's Smiles Company.”Specifically, we target consolidated net sales of 187 billion yen and operating income of 10 billion yen, by Fiscal
Year 2018.
Going forward, we aim to enhance corporate value by striving for more unified group management, boosting growth,and constructing a solid earnings foundation.
(3) Medium- to Long-term Corporate Management Strategy and Issues
We have formulated a five-year medium- to long-term management plan “Innovate for Smiles 2018” to enhance
corporate value.
Basic Policies of the Medium- to Long-term Management Plan
The four basic policies of the medium- to long-term management plan are as follows:
1) Mail-order Businessi. Customer strategy
Expand the customer base from our mainstay target of “childbearing and childrearing women” in their 30s and 40s,
to “career women” as well as “active women in their 50s,” a growing market.
ii. Merchandising strategy
Strengthen development of original brand products to differentiate ourselves from major mall-format e-commerce
retailers. Strengthen and expand “SPA” (specialty store retailer of private label apparel) products where we control
everything from planning, to manufacture and sales, in order to improve profitability.
iii. Sales channel strategy
Switch from a channel mix strategy centered on catalogs, to an omni-channel strategy centered on “original brandproducts,” to build a structure that encourages customers to become fans of Senshukai Group through a variety ofchannels including mobile devices, PCs, and brick-and-mortar stores.
iv. Fulfillment strategy
Pro-actively invest in IT and logistics to improve customer convenience and minimize operational costs. Also,
strengthen “customer targeting” based on each customer’s individual needs and preferences.
2) Bridal Business
A subsidiary Dears Brain, Inc., which operates the bridal business centered on house weddings, continues to invest
in wedding halls, renovating facilities and opening new ones that combine urban and suburban features, to expand
sales. It also aims to improve profitability by revising promotions and lowering the merchandise cost rate.

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Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

3) Corporates BusinessWe grow the corporates business by focusing on mail-order contracting services which we expected to expand instep with growth of the e-commerce market. Also, we aim to improve the profitability of merchandise sales services
and advertising services by enhancing our expertise.
4) New Businesses
We pro-actively develop new businesses from which we expect synergies with our core mail -order business. In
particular, we focus on the “childcare business” given its close connection with childrearing women, main customer
target.
(4) Other Important Business Matters
Not applicable.

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Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

4. Consolidated Financial Statements(1) Consolidated Balance Sheet(Millions of yen)
Fiscal Year 2012
(As of Dec. 31, 2012)

Fiscal Year 2013
(As of Dec. 31, 2013)

AssetsCurrent assets
Cash and deposits

7,452

6,495

Notes and accounts receivable-trade

6,663

6,395

Short-term investment securities

595-

Merchandise and finished goods

16,644

21,296

Raw materials and supplies

188

114

Deferred tax assets

523

542

Accounts receivable-other

9,951

9,609

Forward exchange contracts

772

2,062

Other

3,744

3,968

Allowance for doubtful accounts

(289)

(306)

46,24850,177

Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures

36,47636,207

Accumulated depreciation(22,425)(22,453)

Buildings and structures, net

14,05013,754

Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net

8,495

8,507

(7,784)(7,938)710

568

Tools, furniture and fixtures

2,639

2,396

Accumulated depreciation(1,907)(1,609)Tools, furniture and fixtures, net
Land
Lease assets

731

786

11,908

12,108898

1,495

Accumulated depreciation

(183)

(330)

Lease assets, net

715

1,164

Construction in progress

57

392

28,174

28,775

Goodwill

2,278

2,127

Other

3,995

3,604

Total intangible assets

6,273

5,731

5,950

7,514

Long-term loans receivable

797

1,010

Lease and guarantee deposits

1,563

1,430

Total property, plant and equipment
Intangible assets

Investments and other assets
Investment securities

Deferred tax assets

9

298

Other

4,186

4,174

Allowance for doubtful accounts

(317)

(314)

Total investments and other assets

12,190

14,114

46,63948,622

92,88798,800Total noncurrent assets
Total assets-8-Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

(Millions of yen)
Fiscal Year 2013
(As of Dec. 31, 2013)

Fiscal Year 2012
(As of Dec. 31, 2012)
Liabilities
Current liabilities
Notes and accounts payable-trade

8,073

6,496

-

6,204

Short-term loans payable

3,405

6,386

Current portion of bonds

700

700

Accounts payable-other

6,568

6,602

Accounts payable-factoring

13,993

8,494

Accrued expenses

2,225

2,144

Income taxes payable

207

416

Accrued consumption taxes

253

159

Electronically recorded obligations-operating

Provision for directors' bonuses
Provision for sales promotion expenses

-

30

307

588

Other

1,326

1,412

Total current liabilities

37,062

39,635

Bonds payable

1,850

1,150

Long-term loans payable

6,993

4,814

Lease obligations

828

1,328

Deferred tax liabilities for land revaluation

631

631

Noncurrent liabilities

Provision for retirement benefits

34

34

Asset retirement obligations

353

387

Other

201

459

Total noncurrent liabilities

10,892

8,805

47,95548,440Capital stock

20,35920,359

Capital surplus

21,03821,038Retained earnings

13,581

16,353

Total liabilities
Net assets
Shareholders’ equity

Treasury stock(2,775)(2,776)

Total shareholders’ equity

52,20354,975

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

(578)

774

Deferred gains or losses on hedges

438

1,278

(7,041)(6,720)(89)

52(7,271)(4,615)44,93250,35992,88798,800

Revaluation reserve for land
Foreign currency translation adjustment
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets-9-Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)Net sales

Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)
145,750

Cost of sales*1

Gross profit

76,392(Millions of yen)
Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)
141,552*1

69,35772,47569,077

Selling, general and administrative expenses
Freightage and packing expenses

9,074

8,441

Promotion expenses

19,744

18,584

Provision for allowance for sales promotion expenses

307

588

Provision of allowance for doubtful accounts

282

300

Bad debts expenses

23

137

Directors’ compensations

550

546

Salaries and allowances

11,332

11,104

Bonuses

1,664

1,676

Provision for directors’ bonuses-

30

Provision for retirement benefits

10

12

Depreciation

2,733

2,618

Other

21,52321,017

Total selling, general and administrative expenses*2

Operating income

67,248*2

2,109

65,057
4,019

Non-operating income
Interest income

56

54

Dividends income

112

118

Foreign exchange gains

416

107

Equity in earnings of affiliates

93

142

Gain on adjustment of account payable

160

259

Miscellaneous income

421

282

1,260

964

Interest expenses

238

215

Commission fee

187-

Miscellaneous loss

179

136

Total non-operating income
Non-operating expenses

Total non-operating expenses
Ordinary income

605

352

2,765

4,631

Extraordinary income
Gain on sales of noncurrent assets

*3

1

*3

4

Gain on sales of investment securities

22

51

Total extraordinary income

2355

Extraordinary loss
Loss on sales and retirement of noncurrent assets

*4

169

*4

660

Impairment loss

*5

64

*5

216

Loss on liquidation of business

84

-

Other

6

49

Total extraordinary losses
Income before income taxes and minority interests

326

927

2,462

3,760

Income taxes-current

184

471

Income taxes-deferred

249

(757)

Total income taxes

433

(286)

Income before minority interests

2,029

4,046

Net income

2,029

4,046

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Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

Consolidated Statement of Comprehensive Income(Millions of yen)
Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)

Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)

2,029

4,046

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income

430

1,353

1,676

839

71

102

16

39

2,194

2,334

4,224

6,380

4,224

6,380

-

-

Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests- 11 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

(3) Consolidated Statement of Changes in Equity
Fiscal Year 2012 (Jan. 1, 2012 – Dec. 31, 2012)(Millions of yen)
Shareholders’ equity

Balance at the beginning ofcurrent period

Capital stock

Capital surplus

20,35921,038Retained earnings Treasury stock
12,288

Total
shareholders’equity(2,775)50,910Changes of items during the period
Dividend from surplus

(736)

(736)

Net income

2,029

2,029

Purchase of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current
period

(0)

(0)

(0)

0

0

-

(0)

1,293

(0)

1,292

20,35921,03813,581(2,775)52,203(Millions of yen)
Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at the beginning ofcurrent period(1,008)Deferred
gains orlosses onhedges(1,237)

Foreign Total accumulated
Total net
Revaluation
currency
otherassetsreserve for land translation
comprehensive
adjustment
income(7,041)(177)(9,465)41,444

Changes of items during the period
Dividend from surplus(736)

Net income

2,029

Purchase of treasury stock(0)

Disposal of treasury stock0

Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current
period

430

1,676

-

87

2,194

2,194

430

1,676

-

87

2,194

3,487

(578)

438

(7,041)(89)(7,271)

44,932- 12 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

Fiscal Year 2013 (Jan. 1, 2013 – Dec. 31, 2013)(Millions of yen)
Shareholders’ equity

Balance at the beginning ofcurrent period

Capital stock

Capital surplus

20,35921,038Retained earnings Treasury stock
13,581

Total
shareholders’equity(2,775)52,203

Changes of items during the period
Dividend from surplus(952)

Net income

4,046

(952)
4,046

Purchase of treasury stock
Disposal of treasury stockReversal of revaluation reserve
for landNet changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current
period

0

(0)

(0)

0

0

(321)

(321)

-

0

2,772

(0)

2,771

20,35921,03816,353(2,776)54,975(Millions of yen)
Accumulated other comprehensive income

Balance at the beginning ofcurrent period

Valuationdifference on
available-for-salesecurities

Deferred
gains orlosses onhedges(578)

438

Foreign Total accumulated
Total net
Revaluation
currency
otherassetsreserve for land translation
comprehensive
adjustment
income(7,041)(89)(7,271)

44,932

Changes of items during the period
Dividend from surplus(952)

Net income

4,046

Purchase of treasury stock(0)

Disposal of treasury stock0

Reversal of revaluation reserve
for landNet changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current
period

(321)
1,353

839

321

141

2,655

2,655

1,353

839

321

141

2,655

5,427

774

1,278

(6,720)52(4,615)50,359- 13 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

(4) Consolidated Statement of Cash Flows(Millions of yen)
Fiscal Year 2012
Fiscal Year 2013
(Jan. 1, 2012 – Dec. 31, 2012) (Jan. 1, 2013 – Dec. 31, 2013)
Net cash provided by (used in) operating activities
Income before income taxes and minority interests

2,462

3,760

Depreciation and amortization

2,733

2,618

Impairment loss

64

216

Increase (decrease) in allowance for doubtful accounts

(15)

13

Increase (decrease) in allowance for sales promotion expenses

(306)

280

Interest and dividends income

(169)

(172)

Interest expenses

238

215

Foreign exchange losses (gains)

(682)

(14)

Equity in (earnings) losses of affiliates

(93)

(142)

Loss (gain) on sales of investment securities

(22)

(51)

Loss (gain) on sales and retirement of noncurrent assets

168

656

Decrease (increase) in notes and accounts receivable-trade

(63)

152

Decrease (increase) in inventories

316(4,561)

Decrease (increase) in other current assets(1,337)

233

Increase (decrease) in notes and accounts payable-trade(1,213)

4,606

Increase (decrease) in other current liabilities(68)(5,586)

Other, net

528

208

Subtotal

2,539

2,434

Interest and dividends income received

168

172

Interest expenses paid

(248)

(223)

Income taxes paid

(122)

(209)

Net cash provided by (used in) operating activities

2,337

2,174

(2,585)(2,694)28

449

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets(1,163)(782)

Purchase of investment securities

(54)

(7)

Proceeds from sales of investment securities

141

298

-

900

Purchase of investments in subsidiaries

-

(273)

Other, net

26

(59)

(3,606)(2,168)(1,500)3,000

Proceeds from redemption of investment securities

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

5,750

250

Repayment of long-term loans payable(1,666)(2,448)

Redemption of bonds

(736)

(700)

Cash dividends paid

(736)

(950)

Other, net

(119)

(138)

Net cash provided by (used in) financing activities

991

(986)

48

23

Net increase (decrease) in cash and cash equivalents

(228)

(957)

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from merger withunconsolidated subsidiaries

7,500

7,452

181

-

Cash and cash equivalents at end of period

7,452

6,495

Effect of exchange rate change on cash and cash equivalents- 14 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Changes in Accounting Policies That Are Difficult to Distinguish from Changes in Accounting-based Estimates(Change in depreciation method)
The Company and its domestic consolidated subsidiaries depreciate the property, plant and equipment acquired on
or after January 1, 2013, using the depreciation method stipulated in the revised Corporation Tax Act from thecurrent fiscal year, in line with revisions to the Corporation Tax Act.
This change has no significant effect on the amount of income for the current fiscal year.
Notes to Consolidated Statement of Income*1. The ending inventory is the amount written down to reflect the effect of lower profit margins. The following loss on
valuation of inventories is included in cost of sales.
(Millions of yen)
Fiscal Year 2012
Fiscal Year 2013
(Jan. 1, 2012 – Dec. 31, 2012)(Jan. 1, 2013 – Dec. 31, 2013)
793
617*2. R&D expenses included in general and administrative expenses
Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)
274(Millions of yen)
Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)
205*3. Gain on sales of noncurrent assets
Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)
Machinery, equipment and vehicles, and others

1(Millions of yen)
Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)
Buildings and structures
3
Machinery, equipment and vehicles, and others
0
Total
4

*4. Loss on sales and retirement of noncurrent assets
Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)
Loss on retirement of buildings and structures
Loss on sales of buildings and structures
Loss on retirement of machinery, equipment andvehiclesLoss on retirement of tools, furniture and fixtures
Loss on sales of land
Loss on retirement of intangible assets
Other
Total

(Millions of yen)
Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)21
Loss on retirement of buildings and structures
127
Loss on sales of buildings and structures
Loss on retirement of machinery, equipment and2
vehicles2
Loss on retirement of tools, furniture and fixtures
460
Loss on sales of land
46
Loss on retirement of intangible assets
0
Other
660
Total

81
10
5
11
15
38
5
169

- 15 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

*5. Impairment loss
The Senshukai Group posted impairment loss on the following asset groups.
Fiscal Year 2012 (Jan. 1, 2012 – Dec. 31, 2012)(Millions of yen)
Location

Primary use

Type

Impairment loss

Sanda City, Hyogo

Idle assets

Land

1

Shibuya Ward, Tokyo, and others

Business assets

Buildings and structures, and others

62

In principle, business assets are based on categories of management accounting. Idle assets are accounted independently.
Of the above asset groups, the Company marked down the book value of business assets to the recoverable amount reflecting
weak prospects for improved short-term performance due to worsening operating profitability, and it marked down the bookvalue of idle assets to the recoverable amount because of a decline in the assets’ market value. These markdowns were booked as
an impairment loss.
The impairment loss on buildings and strucures, tools, furniture and fixtures, land, and intangible assets were 43 million ye n, 7
million yen, 1 million yen, and 10 million yen, respectively.
The recoverable amount was measured at its net selling price. The net selling price was rationally estimated based on roadsideland prices and other benchmarks.
Fiscal Year 2013 (Jan. 1, 2013 – Dec. 31, 2013)(Millions of yen)
Location

Primary use

TypeSakaiminato City, Tottori

Idle assets

Land

Narita City, Chiba, and others

Business assets

Buildings and structures, and others

Impairment loss
4
212

In principle, business assets are based on categories of management accounting. Idle assets are accounted independently.
Of the above asset groups, the Company marked down the book value of business assets to the recoverable amount reflecting
weak prospects for improved short-term performance due to worsening operating profitability, and it marked down the bookvalue of idle assets to the recoverable amount because of a decline in the assets’ market value. These markdowns were booked as
an impairment loss.
The impairment loss on buildings and strucures, tools, furniture and fixtures, land, intangible assets, and other were 106 million
yen, 22 million yen, 4 million yen, 79 million yen, and 3 million yen, respectively.
The recoverable amount was measured at its net selling price. The net selling price was rationally estimated based on roadsideland prices and other benchmarks.

- 16 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

Segment and Other Information
1. Overview of reportable segment
Segments used for financial reporting are the Company’s constituent units for which separate financial information
is available and for which the Board of Directors performs periodic studies for the purposes of determining th e
allocation of resources and evaluating performance.
The Senshukai Group primarily operates the mail-order business, bridal business, and corporates business, and theCompany and its group companies manage each of these businesses according to these classifications.
Therefore the Group, comprised of these different business segments, has three reportable segments: the mail-orderbusiness, bridal business, and corporates business.
The mail-order business is engaged in mail-order sales via a variety of media centered on catalogs and the Internet.
The bridal business provides mostly house wedding services. The corporates business uses the Company’s
infrastructure to provide solutions services and promotional services targeting mail -order companies ande-commerce businesses.
2. Calculation methods for net sales, profit/loss, assets, liabilities, and other items for each reportable segment
The accounting methods for reportable segments are the same as those used for preparing the consolidated financial
statements.
Profits for reportable segments are generally operating income figures.
Inter-segment sales are based on market prices.
3. Information related to net sales and profit/loss, assets, liabilities, and other items for each reportable segment
Fiscal Year 2012 (Jan. 1, 2012 – Dec. 31, 2012)(Millions of yen)

Reportable segment
Mail-orderbusiness

Bridalbusiness

Corporates
business

130,456

10,197

3,833

Amounts shown on
Adjustment
consolidated(Note 2) financial statements(Note 3)Sub-total

Others(Note 1)

Total

144,487

1,262

145,750-

Net sales
Sales to customers
Inter-segment sales
Total
Segment profit (loss)
Segment assets

145,750

647

-

51

698

162

861

(861)

-

131,103

10,197

3,884

145,186

1,425

146,612(861)

145,750

994

752

396

2,143

(33)

2,109

(0)

2,109

83,595

11,933514

96,043607

96,651(3,763)92,887

Other items
Depreciation
2,178
525
22
2,725
7
2,733
2,733
Amortization of
5
145
151
151
151
goodwill
Investment inequity-method
396
396
396
396
affiliates
Increase in property,
plant and equipment
1,431
3,150
4,582
20
4,602
4,602
and intangible assets
Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of theservices business primarily offering travel and credit card services, and the pet business distributing pet goods sales
through retail stores.
2. Adjustments are as follows.
(1) The (0) million yen adjustment to segment profit (loss) comprises elimination for inter-segment transactions.
(2) The (3,763) million yen adjustment to segment assets comprises elimination for inter-segment transactions.
3. Segment profit (loss) is adjusted to be consistent with operating income shown on the consolidated statement of income.

- 17 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

Fiscal Year 2013 (Jan. 1, 2013 – Dec. 31, 2013)(Millions of yen)

Reportable segment

Amounts shown on
Adjustment
consolidated(Note 2) financial statements(Note 3)Mail-orderbusiness

Bridalbusiness

Corporates
business

Sub-total

Others(Note 1)

Sales to customers

126,498

10,731

3,838

141,068484

141,552-

141,552

Inter-segment sales

682

-

31

714

123

838

(838)

-

Total

Net sales

127,181

10,731

3,869

141,782608

142,391(838)

141,552

Segment profit

Total

2,840

701

393

3,935

83

4,019

0

4,019

Segment assets

88,99912,558475

102,033

384

102,417(3,617)98,800

Other items
Depreciation
1,981
605
29
2,616
1
2,618
2,618
Amortization of
5
145
151
151
151
goodwill
Investment inequity-method
578
578
578
578
affiliates
Increase in property,
plant and equipment
2,825
1,335
56
4,217
9
4,227
4,227
and intangible assets
Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of theservices business primarily offering travel and credit card services, and the pet business distributing pet goods sales
through retail stores.
2. Adjustments are as follows.
(1) The 0 million yen adjustment to segment profit comprises elimination for inter-segment transactions.
(2) The (3,617) million yen adjustment to segment assets comprises elimination for inter-segment transactions.
3. Segment profit is adjusted to be consistent with operating income shown on the consolidated statement of income.

Per Share Information(Yen)
Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)
Net assets per share
1,037.48
Net income per share
46.86
Diluted net income per share is not presented since theCompany has no outstanding residual securities.

Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)
Net assets per share
Net income per share
Same as on the left.

1,162.81
93.43

Note: Basis for calculation of net income per share is as follows.
(Millions of yen)
Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)

Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)
Net income per share
Net income

2,029

4,046

-

-

Net income related to common stock

2,029

4,046

Average number of shares outstanding during theperiod (thousand shares)

43,30943,308Amounts unavailable to common shareholders

Subsequent Events
Not applicable.

- 18 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2013

5. Other(1) Changes in Members of Board of Directors(Effective March 28, 2014)
For details regarding changes in members of board of directors, please refer to “Notice of Personnel Change”(Japanese version only) announced on January 31, 2014.
(2) Production, Orders and Sales
1) Production
There were no production activities.
2) Orders
There were no production activities in response to orders received.
3) Salesa. Sales by business segment(Millions of yen)
By business segment

Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)

Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)

AmountAmountShare (%)

ChangeShare (%)

Mail-order business

130,456

89.5

126,498

89.4(3,957)

Bridal business

10,197

7.0

10,731

7.6

533

Corporates business

3,833

2.6

3,838

2.7

4

Others

1,262

0.9

484

0.3

(778)

145,750

100.0

141,552

100.0(4,198)Total

Note: The figures above are stated exclusive of consumption taxes.

b. Sales by type(Millions of yen)
By type

Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)

Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)

AmountAmountShare (%)

ChangeShare (%)

Apparel

58,882

40.4

57,42640.6(1,455)Interior goods

32,28522.2

32,141

22.7

(143)

Household goods

18,28312.5

18,144

12.8

(138)

Fashion accessories

15,240

10.5

13,9299.8(1,310)

Foods

3,958

2.7

3,473

2.5

(484)

OthersTotal

17,101

11.7

16,437

11.6

(664)

145,750

100.0

141,552

100.0(4,198)

Note: The figures above are stated exclusive of consumption taxes.
* This financial report is solely a translation of summary of “Kessan Tanshin” (in Japanese, including attachments), which has
been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience ofreaders who prefer an English translation.

- 19 -