Summary of Financial Results for the Fiscal Year 2012 (Ended December 31, 2012)[Japanese GAAP]
February 7, 2013
Company name: Senshukai Co., Ltd.
Stock exchanges: Tokyo and Osaka, First Sections
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, 2013
Scheduled date of payment of dividend: March 29, 2013
Scheduled date of filing of Annual Security Report: March 29, 2013
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 2012 (January 1, 2012 – December 31, 2012)(1) Consolidated operating results
Net sales(Percentages represent changes from the same period of the previous fiscal year)
Operating income
Ordinary income
Net income

Million yen%

Million yen%

Million yen

Fiscal Year 2012
145,750
6.2
2,109 (32.1)
Fiscal Year 2011
137,261
0.3
3,107
(9.2)
Note: Comprehensive income (million yen)
Fiscal Year 2012: 4,224 (up 57.4%)
Net income per
share

Diluted net income
per share

Yen

Yen

Fiscal Year 2012
46.86
Fiscal Year 2011
36.56
Reference: Equity in earnings (losses) of affiliates (million yen)%

Return on equity

%

2,029
28.2
1,583 (22.3)
2,683 (up 49.8 %)Ordinary income to Operating income
total assets
to net sales%-

Million yen

2,765 (14.5)
3,233
2.1
Fiscal Year 2011:

%

4.7
3.9
Fiscal Year 2012: 93

%

3.0
3.6
Fiscal Year 2011:

1.4
2.3
110

(2) Consolidated financial position
Total assets

Net assets

Million yen

Equity ratio

Million yen

Fiscal Year 2012
92,887
Fiscal Year 2011
90,441
Reference: Shareholders’ equity (million yen) Fiscal Year 2012:

Net assets per share%

44,932
41,44444,932

Yen

48.4
45.8
Fiscal Year 2011: 41,444

1,037.48
956.94(3) Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of period

Million yen

Million yen

Million yen

Million yen

2,337
448

(3,606)(2,077)991(1,727)

7,452
7,500

Fiscal Year 2012
Fiscal Year 2011

2. Dividends
1Q-endFiscal Year 2011
Fiscal Year 2012
Fiscal Year 2013
(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

Million yen

%

%

-

7.00
10.00

-

7.00
10.00

14.00
20.00

606
866

38.3
42.7

1.5
2.0

-

12.00

-

12.00

24.00

28.1

3. Consolidated Outlook for Fiscal Year 2013 (January 1, 2013 – December 31, 2013)(Percentages represent changes from the same period of the previous fiscal year)
Net income
Operating income
Ordinary income
Net income
per share

Net sales
2Q 2013 (cumulative)
Full Year 2013

Million yen%

Million yen%

Million yen%

Million yen%

Yen

77,200153,000

4.3
5.0

2,000
4,700

162.3
122.8

2,200
5,000

86.4
80.8

1,400
3,700

53.1
82.3

32.33
85.43

* 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 stock)
Fiscal Year 2012:

47,630,393 sharesFiscal Year 2011:

47,630,393 sharesFiscal Year 2011:

4,321,035 sharesFiscal Year 2011:

43,309,511 shares

2) Number of shares of treasury stock at end of period
Fiscal Year 2012:

4,321,445 shares

3) Average number of shares outstanding during the period
Fiscal Year 2012:

43,309,151 shares(Reference) Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for Fiscal Year 2012 (January 1, 2012 – December 31, 2012)(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 2012
Fiscal Year 2011

Fiscal Year 2012
Fiscal Year 2011

Million yen%

Million yen%

Million yen%

Million yen%

130,589
124,083

5.2
(1.5)

1,996
3,219

(38.0)
9.0

2,654
3,513

(24.4)
22.5

1,916
1,932

(0.8)
28.3

Net income per share

Diluted net income per share

Yen

Yen

44.26
44.62

-

(2) Non-consolidated financial position
Total assets

Net assets

Million yen

Million yen

Fiscal Year 2012
86,855
Fiscal Year 201185,724
Reference: Shareholders’ equity (million yen) Fiscal Year 2012:

44,505
41,21144,505Equity ratio

Net assets per share
%

51.2
48.1
Fiscal Year 2011: 41,211

Yen

1,027.63
951.56* 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 topage 4.

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

Contents of Attachments
1. Analysis of Operating Results and Financial Position(1) Analysis of Operating Results(2) Analysis of Financial Position(3) Basic Policy Regarding Distribution of Earnings and Dividends in the Current and Next Fiscal Years(4) Outlook for Fiscal Year 2013

2
2
3
4
4

2. Group Organization

5

3. Management Policies(1) Basic Management Policy(2) Key Performance Indicators(3) Medium- to Long-term Corporate Management Strategy and Issues(4) Other Important Business Matters

6
6
6
6
6

4. Consolidated Financial Statements(1) Consolidated Balance Sheets(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income(3) Consolidated Statements of Changes in Net Assets(4) Consolidated Statements of Cash Flows(5) Going Concern Assumption(6) Additional Information(7) Notes to Consolidated Financial Statements
Notes to Consolidated Statements of Income
Segment and Other Information
Per Share Information
Subsequent Events

7
7
9
9
11
12
14
15
15
15
15
17
18
18

5. Other(1) Changes in Members of Board of Directors(2) Production, Orders and Sales

19
19
19

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Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

1. Analysis of Operating Results and Financial Position(1) Analysis of Operating Results
Overview
In the fiscal year under review, the outlook for the Japanese economy remained uncertain due to the global
economic slowdown caused by the European debt crisis among other factors, and the yen’s protracted appreciation.
In the retail industry, conditions remained harsh as worries over the future income and employment environment
weighed on personal consumption. In the mail-order industry, sales continued to rise supported by ongoing
expansion of Internet shopping through a wide range of devices including smartphones and tablets, butinter-industry competition intensified.
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 Fiscal Year 2013.
Net sales in the current fiscal year steadily rose 6.2% year-over-year to 145,750 million yen.
As for profits, the cost-of-sales ratio rose due to an increase in bargain and clearance sales to work down elevatedinventories, and together with a general rise in selling, general and administrative expenses, operating income
declined 32.1% year-over-year to 2,109 million yen. Ordinary income declined 14.5% to 2,765 million yen despite
an increase in foreign exchange gains and gain on valuation of compound financial instruments. However, net
income increased 28.2% to 2,029 million yen as extraordinary losses, including loss on valuation of investment
securities, declined year-over-year.
Overview by segment(Mail-order Business)
Consolidated sales in the mail-order business, comprising the catalog and the hanpukai businesses, increased 5.7%
year-over-year to 130,456 million yen in the current fiscal year. Although sales rose, the cost-of-sales ratio increased
because, as the Group prioritized the stocking of inventory to minimize opportunity losses, bargain and clearance
sales increased to work down elevated inventories. Also, distribution-related costs rose due to an increase in
shipments, catalog-related costs rose due to the reorganization of media, and depreciation rose due to system
investments. As a result, operating income in the mail-order business declined 54.4% year-over-year to 994 million
yen.
1) Catalog business
The catalog business provides customers with lifestyle ideas in a wide variety of genres, as well as original
Senshukai products, through a range of catalogs and the online shop “Belle Maison Net.”
Sales temporarily declined year-over-year in some months due to the impact of unfavorable weather and otherfactors, but held steady overall. Internet sales and Internet-only sales* increased due to cross-media promotions
including television advertising and the launch of free-shipping campaign for new members, and the introductionof various app services for smartphones and tablets. As a result, the number of active customers exceeded 4
million, and overall sales in the catalog business increased 7.0% year-over-year to 121,284 million yen.
(*Internet-only sales: 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 8.9% year-over-year to 9,171 million yen, despite strong
sales of new products, due to a decline in members.
(Bridal Business)
Consolidated sales in the bridal business, centered on the house wedding business, rose 21.3% year-over-year to
10,197 million yen in the current fiscal year due to an increase in the number of weddings from the opening of new
facilities in Fukuoka and Kagoshima. Operating income rose 55.8% year-over-year to 752 million yen.

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Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

(Corporates Business)
Consolidated sales in the corporates business, which provides products and services to corporations, decreased 7.8%
year-over-year to 3,833 million yen due to the end of a contract with a major outsourcing client, and operating
income decreased 11.5% year-over-year to 396 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 2.1% year-over-year to 1,262 million
yen in the current fiscal year. Operating loss totaled 33 million yen, compared with an operating loss of 14 million
yen in the previous fiscal year.
Note: As stated in “4. Consolidated Financial Statements, (7) Notes to Consolidated Financial Statements, Segment
and Other Information,” we have changed business segment classifications. Accordingly, the year-over-yearchanges for net sales, operating income/loss are based on the recalculated figures for the previous fiscal year.
(2) Analysis of Financial Position(Balance sheet position)
Assets totaled 92,887 million yen at the end of the current fiscal year, up 2,445 million yen from the end of theprevious fiscal year.
Current assets increased 1,765 million yen to 46,248 million yen. The main factors were decreases of 528 million
yen in deferred tax assets and 378 million yen in merchandise and finished goods, and increases of 1,149 million
yen in accounts receivable-other, 772 million yen in forward exchange contracts, and 563 million yen in short-term
investment securities. Noncurrent assets increased 679 million yen to 46,639 million yen, mainly due to decreases of
661 million yen in intangible assets and 383 million yen in investments and other assets, and an increase of 1,724
million yen in property, plant and equipment.
Current liabilities decreased 4,181 million yen to 37,062 million yen. The main factors were decrease of 1,941
million yen in forward exchange contracts, 1,208 million yen in notes and accounts payable-trade, 437 million yen
in short-term loans payable, and 306 million yen in provision for sales promotion expenses. Noncurrent liabilities
increased 3,139 million yen to 10,892 million yen. The main factors were a decrease of 700 million yen in bonds
payable, and increases of 3,021 million yen in long-term loans payable and 827 million yen in other.
Net assets increased 3,487 million yen to 44,932 million yen. The main factors were increases of 1,676 million yen
in deferred gains or losses on hedges, 1,293 million yen in retained earnings, and 430 million yen in valuationdifference on available-for-sale securities. Consequently, the equity ratio was 48.4%.
(Cash flow position)
The balance of cash and cash equivalents at the end of the current fiscal year was 7,452 million yen, a decrease of
47 million yen from the end of the previous fiscal year.
Operating activities provided net cash of 2,337 million yen (net cash provided of 448 million yen in the previous
fiscal year). The main cash inflows were depreciation and amortization of 2,733 million yen, and income before
income taxes and minority interests of 2,462 million yen. The main cash outflows were an increase in other current
assets of 1,337 million yen, and a decrease in notes and accounts payable-trade of 1,213 million yen.
Investing activities used net cash of 3,606 million yen (net cash used of 2,077 million yen in the previous fiscal
year). The main cash outflows were 2,585 million yen for the purchase of property, plant and equipment, and 1,163
million yen for the purchase of intangible assets.
Financing activities provided net cash of 991 million yen (net cash used of 1,727 million yen in the previous fiscal
year). The main cash inflow was 5,750 million yen in proceeds from long-term loans payable, while main cash
outflows include repayment of long-term loans payable of 1,666 million yen, a decrease in short-term loans payableof 1,500 million yen, cash dividends paid of 736 million yen and redemption of bonds of 736 million yen.

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Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

Cash flow indicesFiscal Year 2010
(As of Dec. 31, 2010)

Fiscal Year 2011
(As of Dec. 31, 2011)

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

Equity ratio (%)

43.7

45.8

48.4

Equity ratio based on fair value (%)

23.9

24.8

24.7

Average debt repayment period (years)

1.3

24.8

5.9

Interest coverage ratio (times)
33.7
1.9
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.

9.4

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 sheets 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 statements 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.
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 rationalization of existing businesses, to improve thesoundness 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 10 yen per share in line with initial plan.
Together with an interim dividend of 10 yen per share, total annual dividend of 20 yen per share is to be paid.
Regarding dividends in Fiscal Year 2013, 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.
(4) Outlook for Fiscal Year 2013
The Japanese economy has begun to show signs of recovery in the wake of the yen’s depreciation and rising shareprices since the end of last year, but the environment for personal consumption remains harsh due to diversificationand stratification of the consumer base, and intensifying cross-industry competition.
Senshukai will push forward with its growth strategy in the final year of its medium-term management plan. In the
catalog business, this includes reorganizing Watashi no Kitai Fuku, the mainstay apparel catalog, increasing thenumber of customers through the continuation of cross-media promotions, developing new apps to meet the needs ofthe growing base of smartphone users, and further strengthening Internet policies. Also, to improve profit margins,
Senshukai will lower the cost-of-sales ratio by overhauling its inventory, procurement, and pricing strategies, andlower distribution-related costs by improving the efficiency of distribution. In the bridal business, consolidated
subsidiary Dears Brain Inc. will aim to expand business by opening new facilities and renovating existing ones.
Based on this outlook, our earnings forecasts for the Fiscal Year 2013 are as follows.
Consolidated(Million yen)
Net sales

Operating income

Ordinary income

Net income

Fiscal Year 2013 (forecast)

153,000

4,700

5,000

3,700

Fiscal Year 2012 (results)

145,750

2,109

2,765

2,029

5.0

122.8

80.8

82.3

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 2012

2. Group Organization
The Senshukai Group comprises the parent company, 14 subsidiaries, and 6 affiliates. Mail-order Business is themainstay business, and we also involved in the Bridal Business, Corporates Business and other businesses.
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
OthersPet business
Services

Company
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 5 other companies
Senshukai Call Center Co., Ltd.
Belle Maison Logisco Co., Ltd., Senshu Logisco Co., Ltd.
Dears Brain Inc.
Senshukai Co., Ltd.
Pet First Co., Ltd.
Senshukai General Services Co., Ltd., and 1 other company

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.

Outsources buying products
Sells products

Purchases products

Outsources
product packing
and packaging

Belle Maison Logisco Co., Ltd.

Senshu Logisco Co., Ltd.
Other outsourcing
services

2 consolidated subsidiaries

Dears Brain Inc.

Provides services

Provides solutions services and promotional services

BridalBusiness

3 non-equity-method affiliates

Outsources
product
inspection

Orderprocessing

Corporates
Business

Luckwin GF China Co., Ltd.

Senshukai Call Center
Co., Ltd.

CustomersCo., Ltd.
Outsources orderprocessing

Senshukai Co., Ltd.

Suppliers

Senshukai Hong Kong Ltd.

Outsources customer
services and area
Senshukai Service Hanbai
marketingOutsources
buyingproducts

Mail-order BusinessSells products

Shanghai Senshu Merchant andCommerce Co., Ltd.

Sells products

Purchases products

Pet First Co., Ltd.
Senshukai General
Services Co., Ltd.
1 non-consolidated subsidiary-5-

Provideservices

OthersPurchases products

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

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
Our medium-term management plan (runs from Fiscal Year 2011 through Fiscal Year 2013) aims to maximize groupstrengths, and targets strong growth in existing core businesses and new businesses.
Specifically, we had previously targeted consolidated net sales of 160,000 million yen, and operating income of
6,400 million yen for Fiscal Year 2013, but in light of intense cross-industry competition, the impact of theearthquake, unfavorable weather, and other factors, and recent earnings trends, our new consolidated targets arethose listed on reference page 4 “1. Analysis of Operating Results and Financial Position (4) Outlook for Fiscal Year2013.”
Going forward, we aim to enhance corporate value by increasing growth and improving the earnings structure.
(3) Medium- to Long-term Corporate Management Strategy and Issues
We have formulated a three-year medium-term management plan that ends in Fiscal Year 2013.
Basic Policies of the Medium-term Management Plan
i. Create “New Belle Maison”- We position Belle Maison as one strategic unit, and will separate its product development and marketing functions
in order to quickly grasp and respond to market changes ahead of the competition, and to strengthen thedevelopment of original products that can “only be bought here” to create a Belle Maison that our customers viewas necessary.
- To maintain the competitiveness of our Internet business, we will work to expand Belle Maison Net bytransforming its mail-order infrastructure through the leveraging of strengths such as proprietary Internet website
management and proprietary product development.
ii. Strengthen the Internet business- We will enhance cooperation between Belle Maison Net and other Internet businesses to expand the product lineupand strategic sharing of customer assets, strengthen merchandising, further develop the organizational system, andmaximize business synergies to strengthen the Internet business across the Group.
- At our subsidiaries, we will cultivate multiple specialty e-commerce websites that differ from Belle Maison Net to
expand gross profits across the Group.
iii. Expand the bridal business- We will continue to invest in the expansion of the bridal business, conducted by Dears Brain Inc., and strategically
positioning “weddings” as an important source of information for our existing businesses, enhance cooperation
within the Group to expand the customer base across the Group.
iv. Conduct high-quality, low-cost business operations- We will conduct high-quality business operations in which the entire Group gets back to basics and prioritizes the
supply of products and services to satisfy customers.
- We will implement across the Group low-cost business operations capable of flexibly responding to market
changes.
(4) Other Important Business Matters
Not applicable.
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Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

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

Fiscal Year 2011
(As of Dec. 31, 2011)
AssetsCurrent assets
Cash and deposits

7,500

7,452

Notes and accounts receivable-trade

6,589

6,663

Short-term investment securities

31

595

Merchandise and finished goods

17,022

16,644

Raw materials and supplies

118

188

Deferred tax assets

1,051

523

Accounts receivable-other

8,802

9,951

Forward exchange contracts
Other

-

772

3,644

3,744

Allowance for doubtful accounts

(278)

(289)

Total current assets

44,482

46,24835,64936,476

Accumulated depreciation(22,136)(22,425)

Buildings and structures, net

13,513

14,050Machinery, equipment and vehicles

8,750

8,495

(7,880)(7,784)869

710

Noncurrent assets
Property, plant and equipment
Buildings and structures

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

2,963

2,639

Accumulated depreciation(2,244)(1,907)719

731

10,88011,908326

57

Tools, furniture and fixtures, net
LandConstruction in progress
Other

215

898

Accumulated depreciation

(74)

(183)

Other, net

140

715

26,44928,174

Goodwill

2,429

2,278

Other

4,506

3,995

Total intangible assets

6,935

6,273

Total property, plant and equipment
Intangible assets

Investments and other assets
Investment securities

5,996

5,950

Long-term loans receivable

943

797

Lease and guarantee deposits

1,690

1,563

60

9

Other

4,226

4,186

Allowance for doubtful accounts

(343)

(317)

Total investments and other assets

12,574

12,190

Deferred tax assets

Total noncurrent assets
Total assets-7-

45,95946,63990,441

92,887

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

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

Fiscal Year 2011
(As of Dec. 31, 2011)
Liabilities
Current liabilities
Notes and accounts payable-trade

9,282

8,073

Short-term loans payable

3,843

3,405

Current portion of bonds

736

700

Accounts payable-other

6,852

6,568

Accounts payable-factoring

13,71013,993

Accrued expenses

2,464

2,225

Income taxes payable

146

207

Accrued consumption taxes

124

253

Provision for directors’ bonuses

31

-

613

307

1,941

-

Provision for sales promotion expenses
Forward exchange contracts
Other

1,497

1,326

Total current liabilities

41,24437,062

Bonds payable

2,550

1,850

Long-term loans payable

3,971

6,993

Deferred tax liabilities for land revaluation

631

631

Provision for retirement benefits

31

34

Asset retirement obligations

364

353

Other

203

1,030

7,753

10,892

48,99747,955

Capital stock

20,35920,359

Capital surplus

21,03821,038

Noncurrent liabilities

Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity

Retained earnings

12,28813,581

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

Total shareholders’ equity

50,91052,203

Valuation difference on available-for-sale securities(1,008)(578)

Deferred gains or losses on hedges(1,237)

438

Revaluation reserve for land

(7,041)(7,041)

Accumulated other comprehensive income

Foreign currency translation adjustment
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

-8-

(177)

(89)

(9,465)(7,271)

41,44444,93290,441

92,887

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)Fiscal Year 2011
(Jan. 1, 2011 – Dec. 31, 2011)(Million yen)
Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)

137,261

145,750

Net sales
Cost of sales*1

Gross profit

71,311*1

76,392

65,95069,357

Freightage and packing expenses

8,386

9,074

Promotion expenses

18,82919,744

Provision for allowance for sales promotion expenses

613

307

Provision of allowance for doubtful accounts

276

282

Selling, general and administrative expenses

Bad debts expenses

38

23

Directors’ compensations

520

550

Salaries and allowances

11,142

11,332

Bonuses

1,703

1,664

Provision for directors’ bonuses

31-

Provision for retirement benefits

10

10

2,343

2,733

Depreciation
Other

18,945

Total selling, general and administrative expenses*2

Operating income

62,842

21,523*2

67,248

3,107

2,109

Interest income

4256

Dividends income

106

112

-

208

Foreign exchange gains

191

416

Equity in earnings of affiliates

110

93

Gain on adjustment of account payable

142

160

Miscellaneous income

208

212

Total non-operating income

801

1,260

Interest expenses

228

238

Loss on valuation of compound financial instruments

Non-operating income

Gain on valuation of compound financial instruments

Non-operating expenses
208-

Commission fee-

187

Relief aid expenses

108-

Miscellaneous loss

129

179

Total non-operating expenses

675

605

3,233

2,765

Ordinary income-9-Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

Fiscal Year 2011
(Jan. 1, 2011 – Dec. 31, 2011)(Million yen)
Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)

Extraordinary income
Gain on sales of noncurrent assets

*3

1

*3

1

Gain on sales of investment securities

139

22

Gain on forgiveness of debts

70-

Total extraordinary income

210

23

Extraordinary loss
Loss on sales and retirement of noncurrent assets*4

Loss on valuation of investment securities
Loss on sales of investment securities
Impairment loss

*5

166

*4

169

514

-

0

-

203

*5

64

Provision of allowance for doubtful accounts
Loss on adjustment for changes of accounting standard for
asset retirement obligations
Loss on disaster

183

-

111

-

108

-

Special retirement expenses

123-

Loss on liquidation of business

-

84

Other

44

6

1,455

326

1,988

2,462

Income taxes-current

148

184

Income taxes-deferred

256

249

Total extraordinary losses
Income before income taxes and minority interests

Total income taxes

405

433

Income before minority interests

1,583

2,029

Net income

1,583

2,029

- 10 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

Consolidated Statements of Comprehensive Income
Fiscal Year 2011
(Jan. 1, 2011 – Dec. 31, 2011)(Million yen)
Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)

1,583

2,029

Valuation difference on available-for-sale securities

(80)

430

Deferred gains or losses on hedges

Income before minority interests
Other comprehensive income

1,104

1,676

Revaluation reserve for land85-

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

0

71

(10)

16

1,099

2,194

2,683

4,224

2,683

4,224

-

-

Total other comprehensive income
Comprehensive income
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 2012

(3) Consolidated Statements of Changes in Net Assets(Million yen)
Fiscal Year 2011
Fiscal Year 2012
(Jan. 1, 2011 – Dec. 31, 2011) (Jan. 1, 2012 – Dec. 31, 2012)
Shareholders’ equity
Capital stock
Balance at the beginning of current period

20,35920,359Changes of items during the period
Total changes of items during the period--

20,35920,35921,03821,038

Disposal of treasury stock

(0)

(0)

Total changes of items during the period

(0)

(0)

21,03821,038

11,344

12,288Dividends from surplus

(649)

(736)

Net income

Balance at the end of current period
Capital surplus
Balance at the beginning of current period
Changes of items during the period

Balance at the end of current period
Retained earnings
Balance at the beginning of current period
Changes of items during the period

1,583

2,029

Reversal of revaluation reserve for land9-

Total changes of items during the period

943

1,293

12,28813,581(2,775)(2,775)(0)(0)

Balance at the end of current period
Treasury stock
Balance at the beginning of current period
Changes of items during the period
Purchase of treasury stock
Disposal of treasury stock00

Total changes of items during the period

(0)

(0)

(2,775)(2,775)49,96650,910

Dividends from surplus

(649)

(736)

Net income

Balance at the end of current period
Total shareholders’ equity
Balance at the beginning of current period
Changes of items during the period

1,583

2,029

Purchase of treasury stock

(0)

(0)

Disposal of treasury stock00

Reversal of revaluation reserve for land9-

Total changes of items during the period

943

1,292

50,91052,203

Balance at the end of current period- 12 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

(Million yen)
Fiscal Year 2011
Fiscal Year 2012
(Jan. 1, 2011 – Dec. 31, 2011) (Jan. 1, 2012 – Dec. 31, 2012)
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Balance at the beginning of current period(928)(1,008)Net changes of items other than shareholders’ equity

(80)

430

Total changes of items during the period

(80)

430

(1,008)(578)(2,342)(1,237)

Net changes of items other than shareholders’ equity

1,104

1,676

Total changes of items during the period

1,104

1,676

(1,237)438(7,117)(7,041)

75-

Changes of items during the period

Balance at the end of current period
Deferred gains or losses on hedges
Balance at the beginning of current period
Changes of items during the period

Balance at the end of current period
Revaluation reserve for land
Balance at the beginning of current period
Changes of items during the period
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance at the end of current period

75-(7,041)(7,041)

(167)

(177)

(9)

87

Foreign currency translation adjustment
Balance at the beginning of current period
Changes of items during the period
Net changes of items other than shareholders’ equity
Total changes of items during the period

(9)

87

(177)

(89)

(10,555)(9,465)

Net changes of items other than shareholders’ equity

1,089

2,194

Total changes of items during the period

1,089

2,194

(9,465)(7,271)

39,411

41,444

Balance at the end of current period
Total accumulated other comprehensive income
Balance at the beginning of current period
Changes of items during the period

Balance at the end of current period
Total net assets
Balance at the beginning of current period
Changes of items during the period
Dividends from surplus

(649)

(736)

Net income

1,583

2,029

Purchase of treasury stock

(0)

(0)

Disposal of treasury stock00

Reversal of revaluation reserve for land

9

-

1,089

2,194

Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance at the end of current period- 13 -

2,033

3,487

41,44444,932Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

(4) Consolidated Statements of Cash Flows(Million yen)
Fiscal Year 2011
Fiscal Year 2012
(Jan. 1, 2011 – Dec. 31, 2011) (Jan. 1, 2012 – Dec. 31, 2012)
Net cash provided by (used in) operating activities
Income before income taxes and minority interests

1,988

2,462

Depreciation and amortization

2,343

2,733

Impairment loss

203

64

Increase (decrease) in allowance for doubtful accounts

193

(15)

Increase (decrease) in allowance for sales promotion expenses

(42)

(306)

Interest and dividends income

(148)

(169)

Interest expenses

228

238

Foreign exchange losses (gains)

(540)

(682)

Equity in (earnings) losses of affiliates

(110)

(93)

Loss (gain) on valuation of compound financial instruments

208

(208)

Loss (gain) on sales of investment securities

(138)

(22)

Loss (gain) on sales and retirement of noncurrent assets

165

168

Loss (gain) on valuation of investment securities
Loss on adjustment for changes of accounting standard for
asset retirement obligations
Decrease (increase) in notes and accounts receivable-trade

514

-

111

-

(227)

(63)

(4,418)316

Decrease (increase) in other current assets(583)(1,337)

Increase (decrease) in notes and accounts payable-trade

1,350(1,213)

Increase (decrease) in other current liabilities

(214)

(68)

Other, net

(103)

736

Decrease (increase) in inventories

Subtotal

778

2,539

Interest and dividends income received

277

168

Interest expenses paid

(235)

(248)

Income taxes paid

(372)

(122)

Net cash provided by (used in) operating activities

448

2,337

(924)

(2,585)

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

1

28(1,915)(1,163)

(20)

(54)

Proceeds from sales of investment securities

999

141

Other, net

(218)

26

(2,077)(3,606)2,500(1,500)Purchase of intangible assets
Purchase 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

300

5,750

Repayment of long-term loans payable(3,048)(1,666)

Redemption of bonds

(766)

(736)

Cash dividends paid

(648)

(736)

Other, net

(64)

(119)

(1,727)991

Net cash provided by (used in) financing activities

048

Net increase (decrease) in cash and cash equivalents

Effect of exchange rate change on cash and cash equivalents(3,355)(228)

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

10,855

7,500

-

181

7,500

7,452

- 14 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012(5) Going Concern Assumption
Not applicable.
(6) Additional Information
Application of Accounting Standard for Accounting Changes and Error Corrections
Senshukai has adopted the “Accounting Standard for Accounting Changes and Error Corrections” (AccountingStandards Board of Japan (ASBJ) Statement No. 24, December 4, 2009)” and the “Guidance on AccountingStandard for Accounting Changes and Error Corrections” (ASBJ Guidance No. 24, December 4, 2009) for
accounting method revisions and for corrections to past errors from the beginning of the current fiscal year.

(7) Notes to Consolidated Financial Statements
Notes to Consolidated Statements 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.
(Million yen)
Fiscal Year 2011
Fiscal Year 2012
(Jan. 1, 2011 – Dec. 31, 2011)(Jan. 1, 2012 – Dec. 31, 2012)
796
793*2. R&D expenses included in general and administrative expenses(Million yen)
Fiscal Year 2011
(Jan. 1, 2011 – Dec. 31, 2011)

Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)
232

274

*3. Gain on sales of noncurrent assets(Million yen)
Fiscal Year 2011
(Jan. 1, 2011 – Dec. 31, 2011)
Machinery, equipment and vehicles, and others

1

Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)
Machinery, equipment and vehicles, and others

1*4. Loss on sales and retirement of noncurrent assets
Fiscal Year 2011
(Jan. 1, 2011 – Dec. 31, 2011)
Loss on retirement of buildings and structures
Loss on retirement of machinery, equipment andvehiclesLoss on retirement of tools, furniture and fixtures
Loss on retirement of software
Other
Total

(Million yen)
Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)
Loss on retirement of buildings and structures
81
Loss on sales of buildings and structures
10
Loss on retirement of machinery, equipment and5vehiclesLoss on retirement of tools, furniture and fixtures
11
Loss on sales of land
15
Loss on retirement of intangible assets
38
Other
5
Total
169

12
130
14
5
3
166

- 15 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

*5. Impairment loss
The Senshukai Group posted impairment loss on the following asset groups.
Fiscal Year 2011 (Jan. 1, 2011 – Dec. 31, 2011)(Million yen)
Location

Primary use

Type

Impairment loss

Buildings and structures,
Kato City, Hyogo, other Idle assets
180
land, and others
Misato City, Saitama,
Buildings and structures,
Business assets
22
otherand others
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, land, tools, furniture and fixtures, and machinery, equipment and vehicles were
132 million yen, 64 million yen, 3 million yen, and 2 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 2012 (Jan. 1, 2012 – Dec. 31, 2012)(Million yen)
Location
Sanda City, Hyogo

Primary use
Idle assets

Type

Impairment loss

Land

1

Shibuya Ward, Tokyo,
Buildings and structures,
Business assets
62
otherand others
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 yen, 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.

- 16 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

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 theallocation 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.
Following the business transfer between companies within the consolidated group, a part of the business in theothers segment was changed to the mail-order business segment in the current fiscal year. The reportable segment
for the previous fiscal year is prepared and disclosed based on the calculation methods after this change.
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 2011 (Jan. 1, 2011 – Dec. 31, 2011)
Reportable segment

Others(Note
1)
Sub-total

Total

4,159

135,972

1,289

137,261

-

281

1,183

88

1,272

Mail-orderbusiness

Bridalbusiness

Corporates
business

Sales to customers

123,405

8,407Inter-segment sales

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

Net sales

Total

124,307

8,407

4,441

137,156

1,377

138,534

Segment profit (loss)

2,183

482

448

3,114

(14)

3,100

Segment assets

82,5598,895

579

92,034672

92,707-137,261(

1,272)-(

1,272)

137,2617

3,1072,265)

90,441(Other items
Depreciation
1,816
491
27
2,334
8
2,343
2,343
Amortization of
145
151
151
151
5
goodwill
Investment inequity-method
478
478
478
478
affiliates
Increase in property,
2,561
474
3,035
11
3,046
3,046
plant and equipment
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 throughretail stores.
2. Adjustments are as follows.
(1) The 7 million yen adjustment to segment profit (loss) comprises elimination for inter-segment transactions.
(2) The (2,265) 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 statements ofincome.

- 17 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

Fiscal Year 2012 (Jan. 1, 2012 – Dec. 31, 2012)
Reportable segment(Million yen)Amounts shown on
Adjustment
consolidated(Note 2) financial statements(Note 3)Mail-orderbusiness

Bridalbusiness

Corporates
business

Sub-total

Others(Note 1)

Total

Sales to customers

130,456

10,197

3,833

144,487

1,262

145,750-

145,750

Inter-segment sales

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

Net sales

Total
Segment profit (loss)
Segment assets
Other items

Depreciation
2,178
525
22
2,725
7
2,733
2,733
Amortization of
145
151
151
151
5
goodwill
Investment in
396
396
396
equity-method396
affiliates
Increase in property,
1,431
3,150
4,582
20
4,602
4,602
plant and equipment
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 throughretail 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 statements ofincome.

Per Share Information(Yen)
Fiscal Year 2011
(Jan. 1, 2011 – Dec. 31, 2011)
Net assets per share
Net income per share

Fiscal Year 2012
(Jan. 1, 2012 – Dec. 31, 2012)
956.94
36.56

Net assets per share
Net income per share

Diluted net income per share is not presented since theCompany has no outstanding residual securities.

1,037.48
46.86
Same as on the left.

Note: Basis for calculation of net income per share is as follows.

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

Fiscal Year 2011
(Jan. 1, 2011 – Dec. 31, 2011)
Net income per share
Net income

1,583

2,029

-

-

Net income related to common stock

1,583

2,029

Average number of shares outstanding during theperiod (thousand shares)

43,30943,309Amounts unavailable to common shareholders

Subsequent Events
Not applicable.

- 18 -

Senshukai Co., Ltd. (8165) Financial Report for Fiscal Year 2012

5. Other(1) Changes in Members of Board of Directors
Not applicable.
(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(Million yen)
By business segment
Mail-order business

Fiscal Year 2011
(Jan. 1, 2011 – Dec. 31, 2011)

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

AmountAmountShare (%)

ChangeShare (%)

123,405

90.0

130,456

89.5

7,050

Bridal business

8,407

6.1

10,1977.0

1,790

Corporates business

4,159

3.0

3,833

2.6

(325)

Others
Total

1,289

0.9

1,262

0.9

(26)

137,261

100.0

145,750

100.0

8,489

Notes: 1. The figures above are stated exclusive of consumption taxes.
2. Following the business transfer between companies within the consolidated group, a part of the business in the others
segment was changed to the mail-order business segment in the current fiscal year. The reportable segment for theprevious fiscal year is prepared and disclosed based on the calculation methods after this change.

b. Sales by type(Million yen)
By type

Fiscal Year 2011
(Jan. 1, 2011 – Dec. 31, 2011)

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

AmountAmountShare (%)

ChangeShare (%)

Apparel

54,64839.8

58,882

40.4

4,233

Interior goods

29,50921.5

32,285

22.2

2,776

Household goods

18,70613.6

18,283

12.5

(423)

Fashion accessories

14,01010.2

15,240

10.5

1,229

Foods

4,547

3.3

3,958

2.7

(589)

Others

15,83911.6

17,101

11.7

1,262

137,261

100.0

145,750

100.0

8,489

Total

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 -