Summary of Financial Results for the Fiscal Year 2014 (Ended December 31, 2014)[Japanese GAAP]
February 5, 2015

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 27, 2015
Scheduled date of payment of dividend: March 30, 2015
Scheduled date of filing of Annual Security Report: March 30, 2015
Preparation of supplementary materials for financial results: Yes
Holding of financial results meeting: Yes(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the Fiscal Year 2014 (January 1, 2014 – December 31, 2014)(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%

Millions of yen%

Fiscal Year 2014
142,5260.7
3,088 (23.2)
3,549 (23.4)
1,798 (55.6)
Fiscal Year 2013
141,552
(2.9)
4,019
90.5
4,631 67.5
4,046
99.4
Note: Comprehensive income (millions of yen) Fiscal Year 2014: 3,870 (down 39.4%) 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 2014
41.52
37.52
Fiscal Year 2013
93.43
Reference: Equity in earnings (losses) of affiliates (millions of yen)

3.5
8.5
Fiscal Year 2014: 44

%

%

3.6
4.8
Fiscal Year 2013: 142

2.2
2.8

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

Fiscal Year 2014
100,785
53,160Fiscal Year 2013
98,80050,359Reference: Shareholders’ equity (millions of yen) Fiscal Year 2014: 53,160

Net assets per share
%

Yen

52.7
51.0
Fiscal Year 2013: 50,359

1,227.52
1,162.81(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

2,722
2,174

(1,540)(2,168)

(91)
(986)

7,910
6,495

Fiscal Year 2014
Fiscal Year 2013

2. Dividends
1Q-endFiscal Year 2013
Fiscal Year 2014
Fiscal Year 2015
(forecasts)

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

Total

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

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

-

12.00
12.00

-

12.00
12.00

24.00
24.00

1,039
1,039

25.7
57.8

2.2
2.0

-

8.00

-

8.00

16.00

34.6

3. Consolidated Outlook for Fiscal Year 2015 (January 1, 2015 – December 31, 2015)(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 2015 (cumulative)
Full Year 2015%

74,000 (0.1)
146,000 2.4

Millions of yen%

1,050 (42.7)
3.6
3,200

Millions of yen% Millions of yen

1,250 (35.8)
3,500 (1.4)%

Yen

700 (23.4)
2,000 11.2

16.16
46.18

* 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: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(3) Number of shares outstanding (common shares)
1) Number of shares outstanding at end of period (including treasury shares)
Fiscal Year 2014:

47,630,393 sharesFiscal Year 2013:

47,630,393 sharesFiscal Year 2013:

4,321,851 sharesFiscal Year 2013:

43,308,765 shares

2) Number of treasury shares at end of period
Fiscal Year 2014:

4,322,649 shares

3) Average number of shares outstanding during the period
Fiscal Year 2014:

43,308,206 shares(Reference) Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for Fiscal Year 2014 (January 1, 2014 – December 31, 2014)(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 2014
Fiscal Year 2013

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

121,851
126,483

(3.7)
(3.1)

1,856
2,973

(37.6)
48.9

2,496
3,634

(31.3)
36.9

1,376
3,214

(57.2)
67.7

Net income per share
Fiscal Year 2014
Fiscal Year 2013

Diluted net income per share

Yen

Yen

31.80
74.21

28.74
-

(2) Non-consolidated financial position
Total assets
Millions of yen

Net assets
Millions of yen

Fiscal Year 2014
92,81751,284
Fiscal Year 2013
91,417
48,959Reference: Shareholders’ equity (millions of yen) Fiscal Year 2014: 51,284

Equity ratio

Net assets per share
%

55.3
53.6
Fiscal Year 2013: 48,959

Yen

1,184.19
1,130.48* 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 thetime 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 to page4.

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

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 2015

4

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

Notes to Consolidated Statement of Income

15

Segment and Other Information

17

Per Share Information

18

Subsequent Events

19

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

19(2) Production, Orders and Sales

20

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SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

1. Analysis of Operating Results and Financial Position(1) Analysis of Operating Results
Overview
In the fiscal year under review, the Japanese economy continued to recover at a moderate pace partly due to the
support of economic and monetary measures by the Japanese government and Bank of Japan. However, personal
consumption remained unclear as was impacted by the longer than expected negative effect on consumer
sentiment of the April 2014 consumption tax hike and by the reduction in real disposable incomes caused byrising prices as the yen weakened. In the retail industry, the operating environment remained severe. Retailers
benefited from the rush to make purchases before the consumption tax hike, but consumers retained a defensive
stance about spending. In addition, there was even more fierce competition across industry sectors and businesscategories as the shopping preferences and activities of consumers became more diverse.
In this environment, the Senshukai Group is concentrating on achieving the first fiscal year targets of the mediumto long-term management plan “Innovate for Smiles 2018” that started in 2014.
Net sales in the current fiscal year increased 0.7% year-over-year to 142,526 million yen as higher sales in thebridal business offset a small decrease in sales in the mail-order business resulting from the extended impact ofthe drop in sales following the consumption tax hike.
Although selling, general and administrative expenses were lowered, the cost of sales was higher because of theweaker yen and an increase in the loss on valuation of goods. As a result, operating income decreased 23.2%
year-over-year to 3,088 million yen, ordinary income decreased 23.4% year-over-year to 3,549 million yen, andnet income decreased 55.6% year-over-year to 1,798 million yen.
Overview by segment(Mail-order Business)
Consolidated sales in the mail-order business, comprising the catalog and the hanpukai businesses, decreased
1.0% year-over-year to 125,296 million yen in the current fiscal year. Operating income decreased 32.4%
year-over-year to 1,921 million yen because the yen’s depreciation has increased the cost-of-sales ratio.
1) Catalog businessIn the catalog business, we provide customers with lifestyle ideas in a wide variety of genres through a rangeof catalogs and the online shop “Belle Maison Net.” We also develop many original products that focus on
Senshukai style.
Consolidated sales in the catalog business decreased 0.2% year-over-year to 117,926 million yen because of
the prolonged weakness in the interior goods and household goods categories following the consumption tax
hike.
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 11.9% year-over-year to 7,370 million yen, due to a
decline in the number of individual and corporate members.
(Bridal Business)
Consolidated sales in the bridal business, centered on the house wedding business, increased 18.8%
year-over-year to 12,750 million yen in the current fiscal year, due to contributions from the opening of new
facilities and an increase in the number of weddings. Operating income increased 18.9% year-over-year to 834
million yen.

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SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

(Corporates Business)
Consolidated sales in the corporates business, which provides products and services to corporations, increased
2.8% year-over-year to 3,944 million yen, and operating income decreased 22.7% year-over-year to 304 million
yen.
(Others)
Consolidated sales in other businesses, which provides services business (primarily insurance and credit card
services) and childcare business, increased 10.4% year-over-year to 534 million yen in the current fiscal year, andoperating income decreased 68.9% year-over-year to 26 million yen.
(2) Analysis of Financial Position(Balance sheet position)
Assets totaled 100,785 million yen at the end of the current fiscal year, an increase of 1,985 million yen from theend of the previous fiscal year.
Current assets increased 3,376 million yen to 53,554 million yen. The main factors were increases of 2,255
million yen in forward exchange contracts and 1,415 million yen in cash and deposits, while there were decreasesof 485 million yen in deferred tax assets and 252 million yen in other. Non-current assets decreased 1,391 million
yen to 47,231 million yen. The main factors were decreases of 350 million yen in intangible assets and 1,340
million yen in investments and other assets, while there was an increase of 299 million yen in property, plant andequipment.
Current liabilities decreased 6,164 million yen to 33,470 million yen. The main factors were decreases of 7,550
million yen in other, 3,639 million yen in short-term loans payable and 1,098 million yen in notes and accounts
payable-trade, while there were increases of 5,919 million yen in electronically recorded obligations-operatingand 616 million yen in accrued consumption taxes. Non-current liabilities increased 5,348 million yen to 14,153
million yen. The main factor was an increase of 7,000 million yen in bonds with subscription rights to shares,
while there were decreases of 1,304 million yen in long-term loans payable and 700 million yen in bonds payable.
Net assets increased 2,801 million yen to 53,160 million yen. The main factors were increases of 1,501 million
yen in deferred gains or losses on hedges, 733 million yen in retained earnings, and 486 million yen in valuationdifference on available-for-sale securities. Consequently, the equity ratio was 52.7%.
(Cash flow position)
The balance of cash and cash equivalents at the end of the current fiscal year was 7,910 million yen, an increaseof 1,415 million yen from the end of the previous fiscal year.
Operating activities provided net cash of 2,722 million yen (net cash provided of 2,174 million yen in the previous
fiscal year). The main cash inflows were an increase in notes and accounts payable-trade of 4,510 million yen,income before income taxes and minority interests of 2,992 million yen, and depreciation of 2,675 million yen.
The main cash outflow was a decrease in other current liabilities of 8,229 million yen.
Investing activities used net cash of 1,540 million yen (net cash used of 2,168 million yen in the previous fiscal
year). The main cash inflows were proceeds from sales of investment securities of 993 million yen, and proceedsfrom redemption of investment securities of 750 million yen. The main cash outflows were 1,718 million yen forthe purchase of property, plant and equipment, and 746 million yen for the purchase of intangible assets.
Financing activities used net cash of 91 million yen (net cash used of 986 million yen in the previous fiscal year).
The main cash inflow was proceeds from issuance of bonds with subscription rights to shares of 6,980 million yen,while main cash outflows were a 4,110 million yen decrease in short-term loans payable, and repayment oflong-term loans payable of 2,587 million yen.

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SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

Cash flow indicesFiscal Year 2012
(As of Dec. 31, 2012)

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

Fiscal Year 2014
(As of Dec. 31, 2014)

Equity ratio (%)

48.4

51.0

52.7

Equity ratio based on fair value (%)

24.7

38.6

36.0

Ratio of interest-bearing debt to cash flows (years)

5.9

6.7

5.8

Interest coverage ratio (times)
9.4
9.8
13.8
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 ratio of interest-bearing debt to cash flows is interest-bearing debt divided by the quantity of operating cash
flows.
The interest coverage ratio is operating cash flows divided by interest payments.
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 shares.
3. Interest-bearing debt includes short-term loans payable, current portion of bonds, bonds payable, bonds with
subscription rights to shares, long-term loans payable, and lease obligations shown on the consolidated balance
sheet.
4. Operating cash flows and interest payments represent net cash provided by (used in) operating activities andinterest 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 fora payout ratio of 30% on a consolidated basis. The Group will use internal reserves to invest in the developmentof 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 Groupplans 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 2015, we plan to pay a total annual dividend of 16 yen per share comprised of
an interim dividend of 8 yen per share and a year-end dividend of 8 yen per share, based on the earnings outlook.
(4) Outlook for Fiscal Year 2015
In the Fiscal Year 2015, Japan’s economy is expected to stage a recovery but the outlook for personal
consumption remains unclear.
Senshukai will take even more activities involving its growth strategy in 2015, which is the second year of themedium- to long-term management plan. Goals include strengthening the merchandise lineup in the coremail-order business and upgrade the ability to utilize a broad array of sales channels.
Based on this outlook, our earnings forecasts for the Fiscal Year 2015 are as follows.
Consolidated(Millions of yen)
Net sales

Operating income

Ordinary income

Net income

Fiscal Year 2015 (forecast)

146,000

3,200

3,500

2,000

Fiscal Year 2014 (results)

142,526

3,088

3,549

1,798

3.6

(1.4)

11.2

Change (%)

2.4* 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.

-4-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

2. Group Organization
The Senshukai Group comprises the parent company, 15 subsidiaries, and 8 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 orderCompany
Senshukai Co.,Ltd., Shufunotomo Direct Co.,Ltd.,
Mobakore Co.,Ltd., Shanghai Senshu Merchant andCommerce Co., Ltd., and 13 other companies
Senshukai Call Center Co., Ltd.
Belle Maison Logisco Co., Ltd., Senshu Logisco Co., Ltd.
Dears Brain Inc.
Senshukai Co.,Ltd.
Senshukai Child Care Co.,Ltd., Senshukai General Services
Co., Ltd., and 1 other company

Telemarketing
Logistics system
Bridal BusinessCorporates Business
OthersSchematic 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

Shufunotomo Direct Co.,Ltd.
Purchase products

Mobakore Co.,Ltd.

Sell products

Senshukai Iihana Co., Ltd.
K.Sense Co., Ltd.
SENTENs Co., Ltd.

Co., Ltd.

Outsources
product packing
and packaging

Senshukai Call Center
Co., Ltd.

Order
processing

Belle Maison Logisco Co., Ltd.

Senshu Logisco Co., Ltd.
2 consolidated subsidiaries

Dears Brain Inc.

Provides services

BridalBusiness

Other outsourcing
services

Corporates
Business

Outsources
product
inspection

Outsources orderprocessing

Provides solution and promotional services

Senshukai Child Care Co.,Ltd.
Senshukai General Services Co., Ltd.
1 non-consolidated subsidiary-5-

ProvideservicesOthers

5 non-equity-method affiliates

Outsources customer
services and area
Senshukai Service Hanbai
marketingOutsources
buyingproducts

Senshukai Co.,Ltd.

Suppliers

Luckwin GF China Co., Ltd.

Sells products

Mail-order BusinessOutsources buying products

Purchases products

Senshukai Hong Kong Ltd.

Sells products

Shanghai Senshu Merchant andCommerce Co., Ltd.

Customers

Purchases products

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

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 otherstakeholders 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, our target for Fiscal Year 2018 are consolidated net sales of 187 billion yen, operating income of 10
billion yen, and a return on equity of 10%.
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
The Group has formulated a five-year medium- to long-term management plan “Innovate for Smiles 2018” toenhance corporate value.
Progress in the Medium- to Long-term Management Plan
1) Mail-order BusinessWe are expanding activities to offer private brands that precisely target the requirements of specific customer
segments. We plan to shift to an SPA (specialty store retailer of Private-label Apparel) business structure thatencompasses each step from planning and manufacture to sales. This will include a merchandising that allows
each private brand to succeed in every sales channel (e-commerce, catalogs, stores and others). At the sametime, we will improve each sales channel with the goal of establishing an omni-channel framework thatenables our customers to make purchases at any time and any location. In 2015, we will launch the “BELLE
MAISON fashion 2015 spring” catalog, our primary fashion medium, that features a new look. This will be acatalog with a merchandise focus that starts with our commitment to selecting original products one by one
with extreme care. We will continue to differentiate our products by creating original designs that offer
customers added value. Two more goals are creating merchandise that targets primarily customers in their 30s
and 50s and linking 2015 first-half catalogs with e-commerce sales.
In addition to these strategic initiatives, we will reinforce our fulfillment capabilities so that our customers canuse our mail-order business services with even greater confidence. Renovation work has started at the
Minokamo Distribution Center to realign our distribution operations in the Chubu area. Preparations are under
way to start operations at this facility by the end of 2015.
2) Bridal BusinessOur goal is to continue increasing sales by renovating locations and opening new ones to offer an atmospherethat combines urban and suburban features. In 2014, we started operating wedding halls in March in
Kamakura City, Kanagawa and in May in Higashiyama-ku, Kyoto. In the Fiscal Year 2015, we plan to open afacility in March in Chuo-ku, Niigata City and in July in Nara City.
3) Corporates BusinessTo take advantage of the growth of the mail-order and e-commerce markets, we plan to step up activities tooffer outsourced distribution services for companies that want to start a B-to-C business.

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SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 20144) New Businesses
We started a childcare business for preschool age children in the Fiscal Year 2014. The first location was
opened in September in Sakura City, Chiba and the second started operating in October in Ota-ku, Tokyo. We
plan to open two more childcare facilities in Ota-ku in April 2015 and develop peripheral businesses relating
childcare.
(4) Other Important Business Matters
Not applicable.

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SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

4. Consolidated Financial Statements(1) Consolidated Balance Sheet(Millions of yen)
Fiscal Year 2013
(As of Dec. 31, 2013)

Fiscal Year 2014
(As of Dec. 31, 2014)

AssetsCurrent assets
Cash and deposits

6,495

7,910

Notes and accounts receivable-trade

6,395

6,622

Merchandise and finished goods

21,296

21,591

Raw materials and supplies

114

139

Deferred tax assets

542

57

Accounts receivable-other

9,609

9,511

Forward exchange contracts

2,062

4,317

Other

3,968

3,715

Allowance for doubtful accounts

(306)

(311)

50,17753,55436,20737,362

Accumulated depreciation(22,453)(23,398)

Buildings and structures, net

13,754

13,963

Machinery, equipment and vehicles

8,507

8,403

(7,938)(7,889)568

514

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures

2,396

2,527

Accumulated depreciation(1,609)(1,717)

786

809

Land

12,10812,311

Leased assets

1,495

1,405

Accumulated depreciation

(330)

(350)

Leased assets, net

1,164

1,055

Construction in progress

392

422

28,77529,075

Goodwill

2,127

2,225

Other

3,604

3,154

Total intangible assets

5,731

5,380

Investment securities

7,514

6,155

Long-term loans receivable

1,010

1,083

Lease and guarantee deposits

1,430

1,644

298

162

Other

4,174

3,994

Allowance for doubtful accounts

(314)

(265)

Total investments and other assets

14,114

12,774Tools, furniture and fixtures, net

Total property, plant and equipment
Intangible assets

Investments and other assets

Deferred tax assets

Total non-current assets
Total assets-8-

48,622

47,231

98,800100,785

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

(Millions of yen)
Fiscal Year 2014
(As of Dec. 31, 2014)

Fiscal Year 2013
(As of Dec. 31, 2013)
Liabilities
Current liabilities
Notes and accounts payable-trade

6,496

5,397

Electronically recorded obligations-operating

6,204

12,124

Short-term loans payable

6,386

2,747

Current portion of bonds

700

700

Lease obligations

125

129

Accounts payable-other

6,602

6,100

Accrued expenses

2,144

2,130

Income taxes payable

416

915

Accrued consumption taxes

159

776

Provision for directors' bonuses

30-

Provision for sales promotion expenses

588

219

Other

9,780

2,230

Total current liabilities

39,63533,470Non-current liabilities
Bonds payable
Bonds with subscription rights to shares

1,150

450

-

7,000

Long-term loans payable

4,814

3,510

Lease obligations

1,328

1,239

Deferred tax liabilities for land revaluation

631

629

Provision for retirement benefits

34-

Net defined benefit liability-

84

Asset retirement obligations

387

455

Other

459

784

Total non-current liabilities

8,805

14,15348,44047,624

Capital stock

20,35920,359

Capital surplus

21,03821,038Retained earnings

16,35317,086

Treasury shares(2,776)(2,776)

Total shareholders’ equity

54,97555,707

Total liabilities
Net assets
Shareholders’ equity

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

774

1,261

Deferred gains or losses on hedges

1,278

2,780

Revaluation reserve for land

(6,720)(6,724)52

135(4,615)(2,546)

Foreign currency translation adjustment
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets-9-50,35953,16098,800100,785

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

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

Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)
141,552*1
72,475(Millions of yen)
Fiscal Year 2014
(Jan. 1, 2014 – Dec. 31, 2014)
142,526*1
75,038Gross profit

69,077

67,488Selling, general and administrative expenses
Freightage and packing expenses
Promotion expenses
Provision for allowance for sales promotion expenses
Provision of allowance for doubtful accounts
Bad debts expenses
Directors’ compensations
Salaries and allowances
Bonuses
Provision for directors’ bonuses
Provision for retirement benefits
Retirement benefit expenses
Depreciation
Other

8,441
18,584
588
300
137
546
11,104
1,676
30
12
2,618
21,017

8,048
18,254219
212
529
11,350
1,676
19
2,646
21,442

Total selling, general and administrative expenses*2

Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Gain on adjustment of account payable
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Miscellaneous loss
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities*3

Total extraordinary income

65,057

*2

3,088

54
118
142
259
390

69
120
44
214
329

964

778

215
136

190
127

352

317

4,631

3,549

4
51

*3

55

Extraordinary losses
Loss on sales and retirement of non-current assets
Impairment loss
Loss on sales of investment securities
Other

*4
*5

Total extraordinary losses

64,399

4,019

660
216
49

4
84
89

*4
*5

77
222
311
36

927

646

Income before income taxes and minority interests

3,760

2,992

Income taxes-current
Income taxes-deferred

471
(757)

1,107
85

Total income taxes

(286)

1,193

Income before minority interests

4,046

1,798

-

0

4,046

1,798

Minority interests in income
Net income- 10 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

(Consolidated Statement of Comprehensive Income)(Millions of yen)
Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)

Fiscal Year 2014
(Jan. 1, 2014 – Dec. 31, 2014)

4,046

1,798

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities

1,353

486

Deferred gains or losses on hedges

839

1,501

Foreign currency translation adjustment
Share of other comprehensive income of entities accounted
for using equity method

102

46

39

36

2,334

2,071

6,380

3,870

Comprehensive income attributable to owners of parent

6,380

3,869

Comprehensive income attributable to minority interests-

0

Total other comprehensive income
Comprehensive income
Comprehensive income attributable to- 11 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

(3) Consolidated Statement of Changes in Equity
Fiscal Year 2013 (Jan. 1, 2013 – Dec. 31, 2013)(Millions of yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus Retained earnings Treasury shares

20,35921,03813,581

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

Changes of items during period
Dividend of surplus

(952)

(952)

Net income

4,046

4,046

Purchase of treasury shares
Disposal of treasury shares

0

Reversal of revaluation reserve
for land

(0)

(0)

0

0

(321)

(321)

Change of scope of consolidation
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period

-

-

0

2,772

(0)

2,771

20,35921,03816,353(2,776)54,975(Millions of yen)

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference 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 period
Dividend of surplus(952)

Net income

4,046

Purchase of treasury shares(0)

Disposal of treasury shares

0

Reversal of revaluation reserve
for land(321)

Change of scope of consolidation-

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

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- 12 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

Fiscal Year 2014 (Jan. 1, 2014 – Dec. 31, 2014)(Millions of yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus Retained earnings Treasury shares

20,35921,03816,353

Total shareholders’equity(2,776)54,975

Changes of items during period
Dividend of surplus(1,039)Net income

1,798(1,039)
1,798

Purchase of treasury shares

(0)

(0)

Disposal of treasury shares-

Reversal of revaluation reserve
for land3

3

Change of scope of consolidation

(28)

(28)

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

-

-

733

(0)

732

20,35921,03817,086(2,776)55,707(Millions of yen)

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
available-for-salesecurities

Deferred
gains orlosses onhedges774

1,278

Foreign Total accumulated
Total net
Revaluation
currency
otherassetsreserve for land translation
comprehensive
adjustment
income(6,720)52(4,615)50,359Changes of items during period
Dividend of surplus(1,039)Net income

1,798

Purchase of treasury shares(0)

Disposal of treasury shares-

Reversal of revaluation reserve
for land

3

Change of scope of consolidation(28)

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

486

1,501

(3)

83

2,068

2,068

486

1,501

(3)

83

2,068

2,801

1,261

2,780

(6,724)135(2,546)53,160- 13 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

(4) Consolidated Statement of Cash Flows(Millions of yen)
Fiscal Year 2013
Fiscal Year 2014
(Jan. 1, 2013 – Dec. 31, 2013) (Jan. 1, 2014 – Dec. 31, 2014)
Cash flows from operating activities
Income before income taxes and minority interests

3,760

2,992

Depreciation

2,618

2,675

Impairment loss

216

222

Increase (decrease) in allowance for doubtful accounts

13

(75)

Increase (decrease) in provision for sales promotion expenses

280

(368)

Interest and dividend income

(172)

(190)

Interest expenses

215

190

Foreign exchange losses (gains)Share of (profit) loss of entities accounted for using equity
methodLoss (gain) on sales of investment securities

(14)

-

(142)

(44)

(51)

226

Loss (gain) on sales and retirement of non-current assets

656

72

152

(126)

Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Decrease (increase) in other current assets(4,561)

(9)

233

523

Increase (decrease) in notes and accounts payable-trade

4,606

4,510

Increase (decrease) in other current liabilities(5,586)(8,229)Other, net

208

976

Subtotal

2,434

3,346

Interest and dividend income received

172

184

Interest expenses paid

(223)

(197)

Income taxes paid

(209)

(611)

Net cash provided by (used in) operating activities

2,174

2,722

Cash flows from investing activities
Purchase of property, plant and equipment(2,694)(1,718)Proceeds from sales of property, plant and equipment

449

11

Purchase of intangible assets

(782)

(746)

Purchase of investment securities

(7)

(25)

Proceeds from sales of investment securities

298

993

Proceeds from redemption of investment securities

900

750

Purchase of shares of subsidiaries

(273)

(125)

Other, net

(59)

(678)

(2,168)(1,540)3,000(4,110)

250

1,500

(2,448)(2,587)

-

6,980

(700)

(700)

Cash dividends paid

(950)

(1,041)Other, net

(138)

(132)

Net cash provided by (used in) financing activities

(986)

(91)

23

33

Net increase (decrease) in cash and cash equivalents

(957)

1,124

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly consolidated
subsidiary
Cash and cash equivalents at end of period

7,452

6,495

-

290

6,495

7,910

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds with subscription rights tosharesRedemption of bonds

Effect of exchange rate change on cash and cash equivalents- 14 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
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 2013
Fiscal Year 2014
(Jan. 1, 2013 – Dec. 31, 2013)(Jan. 1, 2014 – Dec. 31, 2014)
617
433*2. R&D expenses included in general and administrative expenses(Millions of yen)
Fiscal Year 2014
(Jan. 1, 2014 – Dec. 31, 2014)

Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)
205

179

3
0
4

(Millions of yen)
Fiscal Year 2014
(Jan. 1, 2014 – Dec. 31, 2014)
Machinery, equipment and vehicles, and others0
Investment and other assets
3
Total
4

*3. Gain on sales of non-current assets
Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)
Buildings and structures
Machinery, equipment and vehicles, and others
Total*4. Loss on sales and retirement of non-current assets
Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)
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 2014
(Jan. 1, 2014 – Dec. 31, 2014)2
Loss on retirement of buildings and structures
Loss on retirement of machinery, equipment and23
vehicles4
Loss on retirement of tools, furniture and fixtures
21
Loss on sales of land
21
Loss on retirement of intangible assets
3
Other

21
127
2
2
460
46
0
660

77

Total

*5. Impairment loss
The Senshukai Group posted impairment loss on the following asset groups.
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 werebooked as an impairment loss.

- 15 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

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 onroadside land prices and other benchmarks.
Fiscal Year 2014 (Jan. 1, 2014 – Dec. 31, 2014)(Millions of yen)
Location

Primary use

Type

Assets for the mail-order
Buildings and structures,
Nishi-ku, Osaka City, and others
businessand others
Assets for the bridal
Tomiya-machi, Miyagi
Buildings and structures
business
In principle, business assets are based on categories of management accounting

Impairment loss
81
141

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. These markdowns werebooked as an impairment loss.
The impairment loss on buildings and strucures, tools, furniture and fixtures, and intangible assets were 178 million yen, 14
million yen, and 29 million yen, respectively.

- 16 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

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 ofdetermining the allocation of resources and evaluating performance.
The Senshukai Group primarily operates the mail-order business, bridal business, and corporates business, andthe Company 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: themail-order business, bridal business, and corporates business.
The mail-order business is engaged in mail-order sales via a variety of media centered on catalogs and theInternet. The bridal business provides mostly house wedding services. The corporates business uses theCompany’s infrastructure to provide solutions services and promotional services targeting mail-order companies
and e-commerce businesses.
2. Calculation methods for net sales, profit/loss, assets, 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, and other items for each reportable segment
Fiscal Year 2013 (Jan. 1, 2013 – Dec. 31, 2013)(Millions of yen)

Reportable segment
Mail-orderbusiness

Bridalbusiness

Corporates
business

Sub-total

Others(Note 1)

126,498

10,731

3,838

141,068

484

Total

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

Net sales
Sales to customers
Inter-segment sales

141,552-

141,552

682

-

31

714

123

838

(838)

-

127,181

10,731

3,869

141,782608

142,391(838)

141,552

Segment profit

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

Total

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 the services
business primarily offering travel and credit card services, and the pet business distributing pet goods sales through retailstores.
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.

- 17 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

Fiscal Year 2014 (Jan. 1, 2014 – Dec. 31, 2014)(Millions of yen)Amounts shown on
Adjustment
consolidated(Note 2) financial statements(Note 3)

Reportable segment
Mail-orderbusiness

Bridalbusiness

Corporates
business

Sub-total

Others(Note 1)

Sales to customers

125,296

12,7503,944

141,991534

142,526-

142,526

Inter-segment sales

881

-

118

1,000

0

1,000

(1,000)-Total

Net sales

126,177

12,750

4,063

142,992535

143,527(1,000)142,526

Segment profit

Total

1,921

834

304

3,060

26

3,086

2

3,088

Segment assets

90,013

13,650606

104,270574

104,845(4,060)100,785

Other items
Depreciation
1,959
681
26
2,667
7
2,675
2,675
Amortization of
21
149
170
170
170
goodwill
Investment inequity-method
659
659
659
659
affiliates
Increase in property,
plant and equipment
1,225
1,655
25
2,905
140
3,045
3,045
and intangible assets
Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of the services
business primarily offering insurance and credit card services, and childcare business.
2. Adjustments are as follows.
(1) The 2 million yen adjustment to segment profit comprises elimination for inter-segment transactions.
(2) The (4,060) 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
Fiscal Year 2013
(Jan. 1, 2013 – Dec. 31, 2013)(Yen)
Fiscal Year 2014
(Jan. 1, 2014 – Dec. 31, 2014)

Net assets per share

1,162.81

1,227.52

Net income per share

93.43

41.52

-

37.52

Diluted net income per share

Notes: 1. Diluted net income per share in Fiscal Year 2013 is not presented since the Company has no outstanding residual
securities.
2. Basis for calculation of net income per share and diluted net income per share are as follows.
(Millions of yen)
Fiscal Year 2013
Fiscal Year 2014
(Jan. 1, 2013 – Dec. 31, 2013)(Jan. 1, 2014 – Dec. 31, 2014)
Net income per share
Net income

4,046

Amounts unavailable to common shareholders

1,798

-

-

Net income related to common stock

4,046

1,798

Average number of shares outstanding during theperiod (thousand shares)

43,30843,308Adjustment to net income--

Increase in number of common stock (thousand shares)

-

4,611

Diluted net income per share[Including: subscription rights to shares (thousand
shares)]Number of residual securities with no dilution excluded
from calculation of diluted net income per share-- 18 -(

4,611)-SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2014

Subsequent Events
Not applicable.

5. Other(1) Changes in Members of Board of Directors
1) Changes in Representative Director
Not applicable.

2) Changes in Other Directors and Executive Officers (as of March 27, 2015)- Candidate for Director
Director and Executive Officer: Kenji Kajiwara(current Executive Officer, General Manager of Fashion Business Division)- Candidate for Auditor(Full-time) Auditor: Masanori Maeda (current Executive Officer)- Retiring Auditor(Full-time) Auditor: Makoto Yamamoto- Retiring Executive Officer
Executive Officer: Masanori Maeda- 19 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 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 2013
(Jan. 1, 2013 – Dec. 31, 2013)

Fiscal Year 2014
(Jan. 1, 2014 – Dec. 31, 2014)

AmountAmountShare (%)

ChangeShare (%)

Mail-order business

126,498

89.4

125,29687.9(1,202)

Bridal business

10,731

7.6

12,7508.9

2,019

Corporates business

3,838

2.7

3,944

2.8

106

484

0.3

534

0.4

50

141,552

100.0

142,526

100.0

974

OthersTotal

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

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

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

Fiscal Year 2014
(Jan. 1, 2014 – Dec. 31, 2014)

AmountAmountShare (%)

ChangeShare (%)

Apparel

57,42640.6

56,468

39.6

(958)

Interior goods

32,14122.7

31,262

21.9

(879)

Household goods

18,14412.8

16,725

11.7(1,418)

Fashion accessories

13,9299.8

13,739

9.7

(189)

Foods

3,473

2.5

5,638

4.0

2,164

OthersTotal

16,437

11.6

18,691

13.1

2,254

141,552

100.0

142,526

100.0

974

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.

- 20 -