〔Delayed〕The original disclosure in Japanese was released on February 13, 2015 at 15:00 (GMT+9)

February 13, 2015

Tsukada Global Holdings Inc.
Consolidated Earnings Report for the Fiscal Year ended December 31, 2014
(Japanese GAAP)
Stock listing: Tokyo Stock Exchange (First Section)
Securities code: 2418
URL: http://www.bestbridal.co.jp/english/
Representative: Masayuki Tsukada, President and CEO
Information contact: Keiji Ishihara, Director
Tel: +81-3-5464-0081
Scheduled dates:
Annual general meeting of shareholders:March 27, 2015
Filing of statutory year-end financial report:
March 27, 2015
Dividend payout:
March 30, 2015
Supplementary materials to year-end financial results available: Yes
Year-end earnings presentation held: Yes (targeted at institutional investors and analysts)(Amounts rounded down to the nearest million yen)

1. Consolidated Performance for the Fiscal Year ended December 31, 2014
(January 1, 2014 – December 31, 2014)(1) Consolidated Operating Results
Net sales
million yen(Percentages indicate year-on-year changes)%

Operating income
million yen%

Ordinary income
million yen%

Net income
million yen%

Year ended
51,691
9.0
6,406
(6.6)
6,708
(5.9)
December 31, 2014
Year ended
47,426
6.6
6,856
5.2
7,129
7.9
December 31, 2013
Note: Comprehensive income: Year ended December 31, 2014:
4,543 million yen (1.8 %)Year ended December 31, 2013:
4,465 million yen (28.3%)
Diluted net income
Ordinary income
Net income
Return on equity
per shareper share
to total assets
yen
yen
%
%
Year ended
87.95
78.52
16.1
11.1
December 31, 2014
Year ended
86.62
83.75
18.6
13.9
December 31, 2013
Reference: Investment gains/losses on equity-method: Year ended December 31, 2014: - million yen
Year ended December 31, 2013: - million yen

4,294

1.4

4,236

29.6

Operating income
to net sales
%
12.4
14.5

(2) Consolidated Financial Position

December 31, 2014

Total assets
million yen
67,269Net assets
million yen

42.7

Net assets per shareyen
587.9945.7

505.21Equity ratio%
28,71053,96824,668December 31, 2013
Reference: Total equity: December 31, 2014: 28,710 million yen
December 31, 2013: 24,668 million yen
Total equity=Shareholders’ equity plus total accumulated other comprehensive income.

(3) Consolidated Cash Flows
Cash flows fromoperating activities
million yen

million yen

Year ended
December 31, 2014
Year ended
December 31, 2013

Cash and cash
equivalents at end of
periodmillion yen

Cash flows fromfinancing activities

Cash flows frominvesting activities

million yen

6,960(10,780)

7,108

17,354

6,022(5,457)

1,897

13,758

2. Dividends
Dividend per share
Total
dividends
End-Q1yen

End-Q2yen

End-Q3yen

Year-endyen

Annual totalyen

Rate of total
Dividend
dividend to
payout ratio
net assets(consolidated)(consolidated)%%

million yen
Year ended
1,000.00
5.00
488
11.5
December 31, 2013
Year ended
5.00
5.00
10.00
488
11.4
December 31, 2014
Year ending
5.00
10.00
December 31, 2015
5.00
11.6
(Forecast)
Note: Effective July 1, 2013, the Company conducted a 1:200 common stock split. Without adjusting for the stock
split, the year-end dividend per share for the fiscal year ended December 31, 2013 would be 1,000.00 yen,
totaling the annual dividend per share of 2,000.00 yen.

2.2
1.8

3. Earnings Forecast for the Fiscal Year ending December 31, 2015
(January 1, 2015 – December 31, 2015)(Percentages indicate year-on-year changes)
Net sales
million yen%

Operating income

Ordinary income

million yen

million yen%%

Net income

Net income
million yen%

per shareyen

Six months ending
June 30, 2015

25,2907.6

1,770(10.7)

1,780(13.0)

1,130

(8.0)

23.14

Year ending
December 31, 2015

56,420

9.1

6,470

1.0

6,490

(3.3)

4,200

(2.2)

86.02

*Notes(1) Changes affecting the consolidation status of significant subsidiaries during the period: Yes
Newly consolidated: 4 Subsidiaries (Best Bridal, Inc., FAJA Co., Ltd., RAJA Co., Ltd.,
Retreat Co., Ltd.)
Newly Deconsolidated: None
Note: For details, please refer to "(5) Notes to the Financial Statements (Basis for Preparationof Consolidated Financial Statements)" in section "3. Consolidated Financial Statements" onpage 20 in the accompanying materials.

(2) Changes in accounting policy, changes in accounting estimates, and retrospective
restatement
1) Changes in accordance with amendments to accounting standards, etc.: Yes
2) Changes other than noted in 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
Note: For details, please refer to "(5) Notes to the Financial Statements (Changes in
Accounting Policy)” in section “3. Consolidated Financial Statements” on page 23 in theaccompanying materials.
(3) Shares issued (common stock)1) Number of shares issued at end of period(including treasury stock)2) Number of shares held in treasury at end of period

3) Average number of shares outstanding during the period

December 31, 2014

December 31, 2013

48,960,000

48,960,000

131,534

131,512

Year ended

Year ended

December 31, 2014

December 31, 2013

48,828,484

48,916,035* Audit Status
As of this report publication, an audit of the consolidated financial statements in accordance with Japan’s
Financial Instruments and Exchange Act is underway.
*Appropriate Use of Earnings Forecast and Other Important Information(Cautionary note on forward-looking statements)
The above forecasts are based on information available as of this report’s publication. Actual
results may differ from forecasts due to changes in the business environment. For theassumptions underlying the forecasts herein and other notice on the use of earnings forecasts,
please refer to “(1) Operating Results” in “1. Review of Consolidated Financial Results” on page 2
in the accompanying materials.
(Presentation handout materials)
The Company has scheduled an earnings presentation targeted at institutional investors andanalysts on February 16, 2015.
The presentation handout materials will be posted on the Company's website immediately after the
event.

Accompanying Material – Contents
1. Review of Consolidated Financial Results(1) Operating Results(2) Financial Condition(3) Basic Policy on Profit Distribution, Dividends for Fiscal 2014, and Dividend
Forecast for Fiscal 2015(4) Business and Other Risks
2. Management Policy(1) Basic Management Policy(2) Management Goals and Indicators(3) Medium-to Long-term Management Strategy(4) Issues to Address
3. Consolidated Financial Statements(1) Consolidated Balance Sheets(2) Consolidated Statements of Income and 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) Notes to the Financial Statements(Note on the Going-concern Assumption)(Basis for Preparation of Consolidated Financial Statements)(Changes in Accounting Policy)(Segment and Other Information)(Per Share Information)(Significant Subsequent Events)
4. Other Information(1) Changes in Officers(2) Weddings Held, Orders Received, and Sales Volume

1

2
2
3
4
5
9
9
9
9
10
12
12
14
14
15
16
18
20
20
20
23
24
27
27
28
28
28

1. Review of Consolidated Financial Results(1) Operating Results
1) Results for Fiscal 2014
In the fiscal year ended December 31, 2014, the Japanese economy saw an improvement incorporate earnings, primarily those of leading manufacturers, which were underpinned bygovernment economic policies and the Bank of Japan’s financial measures. Overall, however, theeconomic outlook remains uncertain given the impact of such factors as the rise in prices in linewith the increase in the consumption tax, yen depreciation and concerns over a downturn inoverseas economies.
Regarding the bridal market in which the Tsukada Global Holdings Group operates, the number
of weddings in Japan in 2014 was estimated at 649,000 (compared with 660,613 in 2013; both
figures from the Ministry of Health, Labour and Welfare). Although Japan’s declining birthrate is
gradually having a discernible impact, the size of Japan’s wedding market remains generally firm
partly due to the moderate rise in wedding expenditures.
The hotel market in which the Group also operates, is expanding steadily thanks to the upsurge
in the number of foreign visitors to Japan, which is estimated to have reached a record 13.41
million in 2014 (according to the Japan National Tourism Organization) and helping to propel theJapanese economy back on a recovery track.
In addition, we transitioned into a holding company system as of July 1, 2014 in an effort tomaximize the Group’s corporate value by separating the decision-making process for the group asa whole from that for each operating company, working to speed up that process and clarifying
management responsibility. Specifically, the holding company makes management decisions forthe group as a whole, while each operating company is in charge of the operation of its own
business.
The Group entered the relaxation-related market by acquiring all the outstanding shares of FAJA
Co., Ltd. in September 2014 in view of the prospect of a major development and expansion of themarket going forward thanks to the burgeoning interest in health and beauty in recent years.
In this environment, the Group endeavored to increase sales and profitability by continuallycreating new value through high-quality, appealing outlets and high value-added services, and by
accurately responding to customers’ increasingly individualized and diversifying needs in the bridal,
hotel and relaxation markets.
As a result of these efforts, the Group posted consolidated net sales of ¥51,691 million in thefiscal year ended December 31, 2014, an increase of 9.0% over the same period of the previous
fiscal year. However, a decrease in the number of weddings held at existing outlets and anincrease in fixed expenses at some consolidated subsidiaries reduced operating income to ¥6,406
million (a year-on-year decrease of 6.6%) and ordinary income to ¥6,708 million, down 5.9%.
Meanwhile, net income was ¥4,294 million, a year-on-year increase of 1.4%, chiefly owing to thebooking of impairment losses and an allowance for doubtful receivables to affiliated companies.
The results for each business segment were as follows.
Note that the Group’s reporting segments have been changed, starting from the first and third
quarters of the fiscal year ended December 31, 2014. The year-on-year comparisons presented
below are based on figures for the same period of the previous fiscal year adjusted for the change
in reportable business segments for the current fiscal year.
a. Domestic wedding businessIn the current fiscal year, the number of small weddings held remained steady, but overall sales
declined slightly owing to the reduction in the number of weddings held at existing outlets during
the term.

2

As a result, net sales in the domestic wedding business totaled ¥36,849 million, a
year-on-year decrease of 1.5%, and segment operating income came to ¥7,147 million, down
11.6%.
b. Hotel business
During the fiscal year, sales of the Hotel InterContinental Tokyo Bay were firm following its
renovation in fiscal 2013. In addition, the recently acquired The Strings by InterContinental Tokyo
contributed to segment sales growth.
As a result, net sales in the hotel business reached ¥10,635 million, a year-on-year increaseof 49.0%. Segment operating income came to ¥432 million (¥1 million of income in the same
period of the previous fiscal year).
c. Overseas business
During the fiscal year, our overseas business steadily increased its direct sales business andenjoyed an increase in the number of weddings held for non-Japanese couples.
As a result, net sales in the overseas business totaled ¥3,458 million, a year-on-year increaseof 19.5%, and segment operating income totaled ¥173 million, up 149.7%.
d. W&R business (Wellness & Relaxation business)
Our consolidated results for fiscal 2014 have incorporated the business performance of FAJA
Co., Ltd. and its two subsidiaries between October 1, 2014 and December 31, 2014 as ourdeemed acquisition date for them was September 30, 2014.
Accordingly, net sales in the W&R business totaled ¥747 million and segment operating
income came to ¥45 million.
2) Earnings Forecast for Fiscal Year Ending December 31, 2015
Regarding the economic environment in which the Group operates, the economic outlook is
expected to remain uncertain despite the benefits of economic stimulus measures and a moderate
improvement in corporate earnings in Japan.
The Group will actively develop competitive products and strive to continually create new value.
The Group will also aim to strengthen its cost-competitiveness and enhance profitability throughefficient outlet development and the cultivation of its human resources.
The order backlog at the end of the fiscal year under review (December 31, 2014) was 7,507, adecline of 0.3% compared with the previous fiscal year. For the fiscal year ending December 31,
2015, the Group forecasts consolidated net sales of ¥56,420 million, operating income of ¥6,470
million, ordinary income of ¥6,490 million and net income of ¥4,200 million.
(2) Financial Condition
1) Assets, Liabilities, and Net Assets
Total assets at the end of the fiscal year (December 31, 2014) amounted to ¥67,269 million, an
increase of ¥13,300 million from the end of the previous fiscal year (December 31, 2013). This
was largely the result of increases of ¥6,266 million in increased land primarily from the acquisitionof land in Jingumae for business use, ¥4,574 million in cash and deposits as well as ¥1,842 million
in goodwill in conjunction with the new business acquisition and share purchase.
Liabilities at the end of the fiscal year totaled ¥38,558 million, an increase of ¥9,258 million
compared with the end of the previous fiscal year. This was chiefly attributable to a net increase of¥7,885 million in debt and corporate bonds related to the acquisition of the land in Jingumae, thenew business acquisition and share purchase and an increase of ¥952 million in other current
liabilities.
Net assets at the end of the fiscal year totaled ¥28,710 million, an increase of ¥4,042 million
from the end of the previous fiscal year. This increase was mainly due to the booking of ¥4,294
million in net income for the period, which outweighed the ¥488 million in dividends paid fromretained earnings.
2) Cash flow3

Cash and cash equivalents (“cash”) at the end of the fiscal year increased by ¥3,595million fromthe end of the previous fiscal year to ¥17,354 million. Cash flows and factors behind changes in
the cash flows are explained below.
(Operating cash flow)
Cash provided by operating activities during the fiscal year totaled ¥6,960 million, an increase of
15.6% from the previous fiscal year. Among the main factors were ¥6,363 million in income before
income taxes and minority interests and ¥2,696 million in depreciation and amortization, the sumof which was partially offset by ¥2,644 million in income taxes paid.
(Investing cash flow)
Cash used in investing activities totaled ¥10,780 million, an increase of 97.6% from the same
period a year ago. This was chiefly the result of outflows of ¥8,276 million for the purchase of
tangible assets, ¥2,048 million for the purchase of subsidiaries’ shares resulting in change in thescope of consolidation and ¥499 million for the purchase of investment securities.
(Financing cash flow)
Cash provided by financing activities in the fiscal year totaled ¥7,108 million, a rise of 274.5% fromthe previous fiscal year. This is attributable to a net increase of ¥7,605 million from debt andcorporate bonds issued, which eclipsed the ¥488 million in dividends paid.
The following are changes in cash flow indices for consolidated results.

Equity ratio (%)
Equity ratio based on market value(%)
Cash flow to interest-bearing debt
(years)Interest coverage ratio (times)

FY2011FY2012FY2013

FY2014

37.6

43.0

45.7

42.7

36.1

39.9

60.2

60.1

3.5

3.2

3.2

2.8

14.9

16.7

23.4

45.1

Notes:
Equity ratio: Equity/Total assets
Equity ratio based on market value: Market valuation/Total assets
Cash flow to interest-bearing debt: Interest-bearing debt/Operating cash flow
Interest coverage ratio: Operating cash flow/Interest expenses
1. All indicators are calculated based on consolidated figures.
2. The figure for operating cash flow is taken from the operating activities of the consolidated
statements of cash flows. Interest-bearing debt includes all liabilities recorded on the
consolidated balance sheets on which interest is paid. The figure for interest expenses istaken from the consolidated statements of cash flows.
(3) Basic Policy on Profit Distribution, Dividends for Fiscal 2014, and Dividend Forecast for
Fiscal 2015
The Company considers the return of profits to shareholders to be an important management
issue. The Company uses profits to strengthen the management base, and returns profits toshareholders in a flexible manner based on the annual operating results after making acomprehensive analysis of the financial condition and profit levels, and ensuring ample internal
reserves.
With regard to dividends for fiscal 2014, the Company decided to pay a year-end dividend of ¥5
per share for the year ended December 31, 2014. The Company paid an interim dividend of ¥5
per share in August 2014, therefore the annual per-share dividend is ¥10 for fiscal 2014.
The Company plans to make an annual dividend payment of ¥10 per share (including an interim
payment of ¥5 a share) for the year ending December 31, 2015.
4

(4) Business and Other Risks
The following is information regarding risk factors to the business operations of the Tsukada
Group. The information includes items that are not necessarily risk factors, but which are included
proactively from an information disclosure perspective as important to making investment
decisions and understanding the Group’s business activities.
Forward-looking statements contained herein are based on the Company’s best judgment as ofthe end of fiscal 2014. The Company strives to prevent the emergence of risks and respond torisks when they materialize.
1) Special characteristics of the businessa. Services
The Tsukada Group aims to provide the latest wedding styles based on services highly
responsive to the interests and tastes of its customers. The Group continually makes a
meticulous analysis of contemporary needs and fashion trends and creates highly sophisticatedservices based on the accumulated know-how inside the Group and among partner companies,
including dining and other services delivered by chefs and service staff specially assigned toeach facility.
In the event that the Group’s services are unable to respond to current needs and fashion
trends, secure partner companies or chefs which meet the requirements of the Group, or
provide sufficient services to customers, the Group’s operating results may be affected.
b. Human resources
In order to expand its business scope and diversify its business operations, the Group is actively
recruiting recent university graduates as well as establishing training systems to enhance theabilities of staff in the sales and administrative departments. In the event that the Group cannot
acquire the number of employees needed to expand its business, the Group’s competitivenessmay decline or the scope of business expansion may be restricted, and the Group’s operating
results may be affected.
2) Market in which the Group operates
According to statistics from the Ministry of Health, Labour and Welfare, Japan’s population of
marriageable age adults is gradually declining. If the overall size of the bridal market shrinks inthe future, the Group’s operating results may be affected.
The Group plans to increase demand for its guest houses and wedding services by being
recognized for its new wedding styles and expanding market share as its recognition rises. In
the event that existing hotels or ceremony hall operators become attracted to the growth of themarket and enter the guest house and wedding market with original services, competition withother companies may arise on account of the new market entrants, and the Group’s operating
results may be affected.
3) Operating results and financial conditiona. Seasonal changes in operating results
The Group’s net sales increase with the construction of new facilities as well as during the prime
wedding seasons in Japan, which are April–June and October–December (the second andfourth quarters of the fiscal year).
Quarterly results for the fiscal year ended December 31, 2014
First Quarter
Second Quarter
Third Quarter
Fourth Quarter(proportion for the year) (proportion for the year) (proportion for the year) (proportion for the year)

Net sales

million yen
10,942(21.2%)

million yen
12,569(24.3%)
5

million yen
11,281(21.8%)

million yen
16,898(32.7%)

Operating
Income514(8.0%)

1,466(22.9%)

545(8.5%)

3,879(60.6%)

b. Heavy reliance on debt
The Tsukada Group procures loans primarily from financial institutions as investment capital tobuild new guest houses and to pay for construction costs, deposits, guarantees and otherexpenses incurred. Consequently, the ratio of interest-bearing debt to total assets is high. Thebalance of interest-bearing debt as of December 31, 2013 was ¥19,273 million, and it rose to¥27,149 million as of December 31, 2014. The ratio of interest-bearing debt to total assets stoodat 35.7% as of December 31, 2013 and rose to 40.3% as of December 31, 2014 reflecting theGroup’s heavy reliance on debt. The ratio of interest expenses to net sales was 0.5% in the year
ended December 31, 2013 and 0.4% in the year ended December 31, 2014.
In the event that the financial situation changes significantly and interest rates rise, theGroup’s operating results may be affected.
Additionally, some of the Group’s loans have financial covenants attached. In the event that alender enforces a covenant and demands settlement due to a conflict, the Group may be forced
to forfeit profits and repay the loan in full.
c. Overseas conditions
The Tsukada Group offers overseas wedding services, mainly to Japanese customers, in
Hawaii in the United States and Indonesia (Bali). As of December 31, 2014, in Hawaii the Group
directly operated five wedding chapels and had exclusive usage rights to one church, while inBali the Group directly operated two wedding chapels. Wedding plans for each of these markets
are sold through five sales salons in Japan and one in Hawaii, making a total of six sales salons.
Changes in political or economic situations in these overseas regions, including acts of war,
terrorism, or major natural disasters, could cause cancellations and may affect the Group’s
operating results.
Local companies Best Bridal Hawaii, Inc. and PT. Tirtha Bridal provide overseas wedding
services based on orders from the sales salons and also arrange weddings for local customers.
EcPark Pte. Ltd. operates restaurants that cater to local customers. Best Bridal Korea Inc. isconstructing guest houses and has signed lease contracts with Marizin Inc. as part of its plans toenter the Korean bridal market. In the event that these businesses do not perform according to
the Company’s forecasts, the Group’s operating results may be affected.
d. Foreign exchange rate volatility
The Company has liabilities denominated in foreign currencies, including outstanding loans to
subsidiaries, as well as outstanding loans denominated in foreign currencies. Consequently,
significant changes in foreign exchange rates may affect the Group’s financial condition andoperating results.
e. Food safety
The Tsukada Group operates restaurants in its ceremony halls and hotels which are subject toFood Sanitation Laws. To avoid the possibility of business suspension due to food poisoning or
any other hygiene-related issue, the Group appoints sanitary managers to its outlets andrestaurants and continually takes other measures to consistently maintain the highest levels offood safety and quality. In the event, however, of a major food quality problem which goesbeyond the scope of the Group’s measures, the Group’s operating results may be affected.
4) Continuity of management personnel
Masayuki Tsukada is the president and CEO of Tsukada Global Holdings Inc. He performs animportant role in the performance of business activities by making decisions on management
policies and strategy. The Company mitigates management risks through the use ofmanagement committees, the delegation of management responsibilities, and thestrengthening of human resources in each business area, to ensure that business operation
6

and performance are not overly reliant on Masayuki Tsukada. If, however, an unforeseen event
precluded Masayuki Tsukada from performing his duties, the promotion of the Group’s businessactivities and the Group’s business results may be affected.
5) Laws and regulations
In Japan, the Tsukada Group is subject to various regulations on the construction andrenovation of its guest houses, including the Building Standards Act, the Fire Service Act, andthe Sewerage Act. In addition, the Group is subject to wastewater emission, noise emission, andother local ordinances pertaining to the building structure and construction location. When theGroup constructs or renovates its facilities, it hires a licensed architect or construction company
to verify the structure. Additionally, verifications are made directly by the Company’s marketing
department and the fire department. Despite these measures, infringements of the above
regulations could delay construction plans or interfere with operations, and the Group’s
operating results may be affected.
The Group registers its overseas salons in accordance with the Travel Agency Act (type one
business activities). In the event that the Group contravenes this Act and is unable to renew its
registration or has its registration revoked, the Group’s operating results may be affected.
The Group operates its hotels in accordance with the Inns and Hotels Act. In addition, beauty
services offered prior to wedding ceremonies are subject to the Act on Specified Commercial
Transactions.
6) Capital investment and new construction
a. Current guest houses
Facility name
No. of guest houses
Facility name
No. of guest houses

Nihonbashi Shirogane Yokohama Osaka Sendai Hoshigaoka Shinurayasu Omiya Aoyama Ichigaya

1

2

4

5

3

2

5

8

3

1

Shinsaibashi Marunouchi Yagoto Kamogawa Chiba Akasaka Odaiba Nagoya Minato Iseyama

2

1

4

3

2

1

1

3

7

As of December 31, 2014, the Tsukada Group operates the aforementioned 19 outlets (58guest houses) inside Japan. All of the outlets were planned internally by the Company’sbusiness development department.
In the future, the Group will continue to launch new guest houses, mainly in the Tokyo
metropolitan, Kansai, and Chukyo regions, after meticulous market analysis, facility planning,and site selection.
The Group renovates existing guest houses on a three-year renewal cycle as it seeks tosustain a stable customer acquisition rate by maintaining the facilities’ newness and high-quality
design.
In the event, however, that the Group is unable to acquire real estate (primarily land) suitablefor facilities construction or employ necessary operations staff, or fails to receive customer
support for new or existing facilities, the Group’s operating results may be affected.
Additionally, in the event that the Group recognizes an impairment loss stemming from asignificant decline in the real prices of the Group’s property caused by changes in market trends
or the business environment, the Group’s operating results and financial condition may beaffected.
b. Outlet development risks
The Group typically signs lease contracts to secure sites needed for its directly operated outlets
and pays deposits and guarantees as well as upfront interior and exterior design expenses.
Human resource, rental and other running costs are incurred after an outlet opening. The
payment of deposits and guarantees, as well as related upfront expenses, increases with eachnew outlet. The Group may be required to pay a penalty in the event that it closes an outlet prior7

to the planned period of operation. Additionally, the Group may be unable to recover a portion or
all of its deposits and guarantees in the event that a lessor goes bankrupt.
With regard to securing sites for future outlets, in order to raise the assurance of outlet
planning and promote guest house construction, the Group will maintain a policy of using landacquisition and securitization as an option to leasing. The Group will continue to prioritize
management efficiency and avoid the deterioration of its financial condition in planning newoutlets, but the acquisition of land may affect the financial condition. As an original outlet design,
the Group also maintains large-scale sites containing multiple guest houses. The construction ofmultiple guest houses within a single site enables the Group to better serve the diverse needs
and tastes of customers by offering an array of concepts to a large number of occupants. The
Group’s policy is to continue to focus on the development of large-scale outlets. However, thedevelopment of large-scale outlets requires suitable sites which the group may not be able tosecure. If, as a consequence, the Group is unable to carry out its development plans, theGroup’s operating results may be affected.
c. Special-purpose company
The Tsukada Group utilizes the Shirogane office as a special-purpose company (Shirogane
SPC Co., Ltd.). The Company invests in an anonymous partnership in connection with the SPC
and has used the Practical Solution on Application of Control Criteria and Influence Criteria to
Investment Associations (ASBJ Practical Issues Task Force No. 20, September 8, 2006) todetermine whether or not the Company has control and influence over the SPC. The executive
authority for the anonymous partnership is the SPC, and the Company does not have any direct
voting rights or other authority which would give it control over the SPC. Since it is clear that theCompany cannot make decisions over financial, operating, or business policies, the anonymous
partnership operated by Shirogane SPC Co., Ltd. does not qualify as a subsidiary and is
excluded from the consolidated results.
The Company recognizes the issues surrounding special purpose companies, which havebeen the subject of international debate. Namely, in recent years transactions involving special
purpose companies have surged and become more complex and diversified, raising concernsthat the Company could cause interested parties to make incorrect judgments regarding
business combinations. In the event that the Company’s scope of consolidation changes in the
future based on the announcement of new accounting standards or practical solutions, theGroup’s operating results and financial condition may be affected.
The anonymous partnership operated by Shirogane SPC Co., Ltd. had trust beneficiary rightsof ¥2,732 million as of December 31, 2014, and loans from financial institutions totaling ¥1,914
million.
7) Management of customer information
The Tsukada Group gathers personal information on many customers through its order receipt
activities. The Group takes measures to maintain the confidentiality of this personal informationand mitigate the risk of information leaks, including storing the information in locked cabinets
and using passwords to secure electronic information. If, however, an unforeseen incident
caused the leakage of personal information, society’s trust in the Group would decline, and theGroup’s operating results may be affected.

82. Management Policy(1) Basic Management Policy
The Tsukada Group strives to create gathering places which leave an everlasting memory on
guests by offering the finest professional hospitality services. Based on this corporate philosophy,
the Group provides high-quality services and high value-added facilities by accurately
understanding the ever-changing needs of customers. Going forward, the Tsukada Group willcontinue to pursue the creation of new value in the market in which it operates, seeking to achievesustainable growth for the Group and enhancing corporate value.
The Group has five basic strategies to accomplish its basic management policy.
1. Outlet development strategy:
Develop guest houses, hotels and wellness & relaxation facilities, primarily in the Tokyo
metropolitan, Kansai, and Chukyo regions, which are geared towards the uniquecharacteristics of each market.
2. Product development capabilities:
Develop competitive products with high added value, aiming to provide customers with highly
satisfying products and services.
3. Proposal and sales capabilities:
Accurately understand the needs—the “dreams”—of customers and enhance productproposal and sales capabilities to realize these dreams.
4. Enhanced profitability:
Rationalize management and enhance the efficiency of business operations in order toachieve high profitability.
5. Financial strategy:
Procure funding with a priority on funding costs and that is in line with the characteristics of thebusiness while carefully considering the maintenance of a sound financial condition,enhancement of capital efficiency, and stock dilution.
(2) Management Goals and Indicators
The Tsukada Group aims to remain a corporate entity capable of stable and continuous growth. To
enhance its corporate value, the Group will strive to strengthen its financial condition while
increasing its equity ratio (ROE), an important index measuring improvement in comprehensive
profitability.
(3) Medium- to Long-term Management Strategy
1) Product strategy
While meticulously analyzing contemporary needs and fashion trends, the Group continuallyprovides high value-added products to customers in its mainstay bridal business, as well as in
the hotel and wellness and relaxation businesses.
In the Company’s guest house and wedding services, the bridal couples become the lords ofthe manor, acting as party hosts to their many guests. Bridal customers have their own personal
dreams and hopes, and the Company establishes a structure to provide sophisticated services
highly responsive to the interests and tastes of its customers by combining the accumulated
know-how inside the Company with its many partner companies. Additionally, in the dining andother service areas, the Company appoints chefs and other specialized staff to each outlet inorder to maintain the highest levels of service quality.
At the Hotel InterContinental Tokyo Bay and The Strings by InterContinental Tokyo, which theGroup operates, the strategy of using conventional cost reductions to improve profitability has
been replaced with transformational management reform which is generating significant
improvements in profitability through new investments.
Furthermore, the Tsukada Group operates the British-style Queensway reflexology salons,
which boast an extraordinary repeat rate as they are the first casual healing salons in Japan thatprovide reflexology services. The secret to their success is their stylish pub-like British green
9exterior and reflexology techniques thoroughly researched and developed for the Japanesemarket.
2) Outlet development strategy
The Group aims to create high-quality, authentic facilities. The domestic network comprises 19
guest houses, the Hotel InterContinental Tokyo Bay, The Strings by InterContinental Tokyo and
36 Queensway reflexology salons. The continued growth of the Company depends on facility
planning along with site and building selection based on meticulous marketing analysis, as wellas efficient outlet development. The Company is focusing its outlet development on the Tokyo
metropolitan, Kansai, and Chukyo regions, which offer strong future growth potential. Existingguest houses are renovated on a three-year renewal cycle in order to sustain a stable customer
acquisition rate by maintaining the facilities’ newness and high-quality design.
3) Sales strategy
The Group does not conduct door-to-door selling, but rather uses its sales staff to provide
face-to-face sales to customers visiting facilities.
For marketing and advertising of the domestic wedding business, the Company relies heavily
on paid advertisements in TV commercials, wedding magazines and other print media. To beatthe competition in winning orders, it is critical to create more appealing advertisements. The
Company aims to create highly appealing advertisements by featuring photographs thatmaximize the attraction of the design and service content of its facilities. The Company also
actively solicits customers over the Internet through the use of ads as well as its websites
featuring its facilities and service offerings.
Sales success rates and other sales results from each facility are compiled and analyzed
weekly. Domestic business managers consult with managers and staff at guest houses thatshow signs of declining success rates, and provide them with guidance on how to improve theirsuccess rates.
For overseas wedding services, the Company is strengthening the overseas wedding salonsin Japan (five outlets) and sales channels in order to enhance the ability of salons to draw
customers and achieve high success rates.
Going forward, the Company will establish a training system to enhance each staff member's
service proposal capabilities and nurture employees with even higher skills(4) Issues to Address
Regarding the economic environment in which the Tsukada Group operates, the Japanese
economy is expected to return to growth based on such government initiatives as the change inmonetary policy and economic stimulus measures. Overall, however, the future economic outlook
remains unpredictable as economic changes primarily owing to the global uncertainty over oil
prices, the trend in interest and exchange rates and corporate earnings are expected to continue.
In this environment, the Group must continue to provide meticulous products and services,develop highly competitive and attractive guest houses and hotels, and continually create highvalue-added services for wellness and relaxation businesses, all responsive to customer needs,
which are expected to become increasingly individualized and diverse in the future.
In addition, in order to further enhance its superior market position and corporate value, theCompany must enhance and improve its advertising strategies, which will lead to a stronger
brand, as well as work to promote additional synergies among group companies, with a positive
eye toward the rollout of our service in overseas markets. At the same time, the Company muststrengthen its financial condition, through cost-cutting and other measures, and secure and foster
talented human resources. These initiatives are aimed at supporting the development of acomprehensive hospitality company.
1) Guest house development
The Company operates 19 outlets in Japan. Since the development of highly competitive guest
houses is a core competency, the Company plans to diversify its outlet development strategy
and promote more efficient development.
102) Hotel development
The Tsukada Group operates the Hotel InterContinental Tokyo Bay and The Strings byInterContinental Tokyo. In order to enhance its earnings power, the Group plans to actively
develop new properties in and outside Japan.
3) Wellness and relaxation facilities
The Group, which operates British-style reflexology salons (Queensway), plans to expand its
business scale by not only proactively developing these salons but also accelerating thedevelopment of a spa complex.
4) Securing and fostering human resources
The Company considers the strengthening of its wedding presentation capabilities to be aneffective way to bolster customer service and differentiate its services from competitors. To thisend, the Company will continue to create systems to raise the motivation of its employees whilebuilding a structure to support their medium- to long-term nurturing of employees.

113. Consolidated Financial Statements(1) Consolidated Balance Sheets

AssetsCurrent assets
Cash and deposits
Accounts receivable - tradeMarketable securities
Merchandise
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful receivables
Total current assets
Fixed assets
Tangible assets
Buildings and structures, net
Accumulated depreciation
Buildings and structures, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total tangible assets
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
Deferred assets
Bond issuance costs
Total deferred assets
Total assets
12

December 31, 2013

(millions of yen)
December 31, 2014

AmountAmount

8,866
476
5,000
3
373
291
2,925
(41)
17,895

13,441
871
4,214
40
480
551
1,371
(46)
20,92329,340(13,998)
15,342
4,757
138
4,418
(3,195)
1,222
21,46031,185(16,350)
14,835
11,023922
5,162(3,833)
1,328
28,109

962
191
1,153

2,805
193
2,999

3,588
6,299
2,061
1,453
13,40236,016

3,920
7,676
2,247
1,447
(164)
15,127
46,23656
56
53,968108
10867,269

Liabilities
Current liabilities
Accounts payable - trade
Current portion of long-term debt
Current portion of bonds
Income taxes payable
Advances received
Provision for point card certificates
Other
Total current liabilities
Fixed liabilities
Bonds
Convertible bonds
Long-term debt
Provision for employees’ retirement benefits
Net defined benefit liability
Provision for directors’ retirement benefits
Asset retirement obligations
Other
Total fixed liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gain on available-for-sale securities
Deferred gain (loss) on derivatives under hedge
accounting
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

13

December 31, 2013
Amount(millions of yen)
December 31, 2014
Amount

2,189
2,709
484
1,786
968
2,231
10,370

2,327
2,426
684
1,634
1,188
18
3,184
11,463

1,106
5,000
9,960
282
636
1,083
861
18,92929,3003,422
5,000
15,613
308
681
1,419
650
27,09438,558472
634
23,443(88)
24,461

472
634
27,238(88)
28,256

88

167

46

7

71
206
24,66853,968282(3)454
28,71067,269(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(millions of yen)
Year ended
Year ended
December 31, 2013 December 31, 2014
AmountAmount47,426
51,691
Net sales
Cost of sales
30,646
33,791
16,78017,900Gross profit
9,923
11,493
Selling, general and administrative expenses
6,856
6,406
Operating income
Non-operating income
Interest income
6474
Dividend income
72
138
Gain on investments in silent partnership
122
126
Foreign exchange gains
117
154
Gain on valuation of derivatives
117
129
Other
41
67
Total non-operating income
537
690
Non-operating expenses
Interest expenses
252
210
Fees and commissions paid
159
Other
11
19
Total non-operating expenses
263
388
7,129
6,708
Ordinary income
Extraordinary income
Gain on sales of investment securities
7
Gain on sales of fixed assets
00Reversal of provision for loss on cancellation of rental
45
contract
Total extraordinary income
458Extraordinary loss
Loss on valuation of affiliated companies’ shares
38
Loss on disposal of fixed assets
36
22
Loss on store closing
6
Impairment loss
128
Provision of allowance for doubtful receivables
164
Total extraordinary loss
42
353
7,132
6,363
Income before income taxes and minority interests
2,958
2,477
Income taxes-current
(62)
(407)
Income taxes-deferred
2,895
2,070
Total income taxes
4,236
4,292
Income before minority interests(1)
Minority interests in income (loss)
4,236
4,294
Net income
14Consolidated Statements of Comprehensive Income

Income before minority interests
Other comprehensive income
Net unrealized gain on available-for-sale securities
Deferred gain (loss) on derivatives under hedge
accounting
Foreign currency translation adjustments
Share of other comprehensive income of affiliates
accounted for under the equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of theparentComprehensive income attributable to minority
interests

15

Year ended
December 31, 2013
Amount4,236(millions of yen)
Year ended
December 31, 2014
Amount
4,292

46

78

33

(39)

131

211

16

-

228
4,465

250
4,543

4,465

4,543

-

-

(3) Consolidated Statements of Changes in Net Assets
Year ended December 31, 2013 (January 1 to December 31, 2013)(millions of yen)
Shareholders’ equity

Balance at beginning of term

Capital stock

Capital surplus

472

634

Retainedearnings

Treasury stock

19,729Changes during term
Cash dividends
Net income

-

(489)

(489)

4,236

4,236

Purchase of treasury stock
Decrease due to shareexchange
Change of scope of equity

Total
shareholders’equity20,836

(90)

(90)

2

2

(34)

method(34)

Net changes in items other-than shareholder's equity
Total changes during term
472

Balance at end of term

Net unrealized
gain onavailable-for-salesecurities
Balance at beginning of
term

41

634

3,713

(88)

3,624

23,443(88)

24,461

Accumulated other comprehensive income
Deferred gain
(loss) on
Foreign currency Remeasurements
derivatives
translationof defined benefit
under hedge
adjustments
plans
accounting
13

(76)

-

Total
accumulated
othercomprehensive
income(21)

Total net
assets20,815

Changes during term
Cash dividends(489)

Net income

4,236

Purchase of treasury

(90)

stock
Decrease due to shareexchange
Change of scope of2(34)

equity method
Net changes in items
other than

46

33

148

-

228

228

Total changes during term

46

33

148

-

228

3,853

Balance at end of term

88

46

71

-

206

24,668shareholder's equity

16

Year ended December 31, 2014 (January 1 to December 31, 2014)(millions of yen)
Shareholders’ equity

Balance at beginning of term

Capital stock

Capital surplus

472

634

Retainedearnings

Treasury stock

23,443

Changes during term
Cash dividends
Net income

(88)

Total
shareholders’equity24,461

(488)

(488)

4,294

4,294

Purchase of treasury stock(0)

Change in scope of

(0)

(11)

consolidation(11)

Net changes in items otherthan shareholder's equity
Total changes during term

-

-

3,794

(0)

3,794

Balance at end of term

472

634

27,238(88)

28,256

Net unrealized
gain onavailable-for-salesecurities
Balance at beginning of
term

88

Accumulated other comprehensive income
Deferred gain
(loss) on
Foreign currency Remeasurements
derivatives
translationof defined benefit
under hedge
adjustments
plans
accounting
46

71

-

Total
accumulated
othercomprehensive
income206

Total net
assets

24,668Changes during term
Cash dividends(488)

Net income

4,294

Purchase of treasury

(0)

stock
Change in scope of(11)

consolidation
Net changes in items
other than

78

(39)

211

(3)

247

247

Total changes during term

78

(39)

211

(3)

247

4,042

Balance at end of term

167

7

282

(3)

454

28,710shareholder's equity

17(4) Consolidated Statements of Cash flows(millions of yen)

Year ended
Year ended
December 31, 2013 December 31, 2014
AmountCash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Amortization of goodwill
Amortization of bond issuance costs
Loss on disposal of tangible assets(Gain) loss on sales of fixed assets
Loss on valuation of affiliated companies’ shares
Provisions for doubtful receivables(Gain) loss on valuation of derivatives(Gain) loss on sales of investment securities(Gain) loss on investments in silent partnership
Foreign exchange (gain) loss
Impairment loss
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in provision for employees’ retirement
benefits
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors’ retirement
benefits
Increase (decrease) in provision for loss on cancellation ofrental contract
Increase (decrease) in provision for point card certificatesInterest and dividend income
Interest expenses
Fees and commissions paid
(Increase) decrease in notes and accounts receivable trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable - trade(Increase) decrease in other assets
Increase (decrease) in advances received
Increase (decrease) in accrued consumption taxes
Increase (decrease) in other liabilities
Other- net
Sub totalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

18

Amount

7,132
2,653
84
10
32
(0)
(117)
(122)
(54)
-

6,363
2,696
162
16
22
(0)
38
164
(129)
(7)
(126)
(88)
128

(7)

4

14

-

-

19

41

38

(97)

-

(137)
252
-

(22)
(213)
210
159

(131)

(249)

(10)
25
(21)
25
(42)
(147)
187
9,569
119
(256)
(3,409)
6,022

(91)
112
(346)
8
291
202
256
9,618
199
(213)
(2,644)
6,960

Year ended
Year ended
December 31, 2013 December 31, 2014
AmountCash flows from investing activities
Purchase of tangible assets
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of subsidiaries’ shares resulting in change
in the scope of consolidation
Loans receivableCollection of loans receivable
Lease and guarantee deposits
Collection of lease and guarantee deposits
Advance payments for business acquisition
Other- net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issuance of bonds
Payments for redemption of bonds
Proceeds from issuance of convertible bonds
Purchase of treasury stock
Dividends paid to shareholders
Other – net
Net cash provided by (used in) financing activities
Foreign currency translation adjustments on cash andcash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Increase in cash and cash equivalents fromnewly consolidated subsidiary
Cash and cash equivalents, end of period

19

Amount(1,938)
(30)
(918)
38

(8,276)
(57)
(499)
168

-

(2,048)

(304)
0
(509)
2
(1,710)(87)(5,457)

(66)
102
(231)
141
(12)
(10,780)

1,500(3,366)
(612)
4,966
(90)
(489)
(9)
1,897

7,981
(2,821)
2,930
(484)
(0)
(488)
(9)
7,108

89

251

2,553
11,205

3,539
13,758-56

13,75817,354

(5) Notes to the Financial Statements(Note on the Going-concern Assumption)
Not applicable(Basis for Preparation of Consolidated Financial Statements)
1. Scope of consolidation(1) Number of consolidated subsidiaries: 12
Name of consolidated subsidiaries:
Best Bridal Inc.
Best Planning Inc.
Best Bridal Hawaii, Inc.
Acqua Grazie, Inc.
Best Bridal Korea Inc.
PT. Tirtha Bridal
Hospitality Network Corporation
Best Global, Inc.
Ecpark Pte. Ltd.
FAJA Co., Ltd.
RAJA Co., Ltd.
Retreat Co., Ltd.
Among the above-listed subsidiaries, Best Bridal Inc. (the trade name changed from Best
Bridal Inc. Successor Preparatory Company, effective from July 1, 2014), was newly
established in the financial year under review, and has consequently been added to thescope of consolidation. Ecpark Pte. Ltd., has also been added to the scope of consolidation
as its relative importance increased under the newly revised Group policy on consolidation.
Following the acquisition of the shares of FAJA Co., Ltd., FAJA and its 2 subsidiaries, RAJA
Co., Ltd. and Retreat Co., Ltd., have been added to the scope of consolidation.
(2) Name of principal non-consolidated subsidiaries:
Non-consolidated subsidiaries
Life Create Bank, Inc.
Best Bridal Singapore Pte. Ltd.
(Reason for excluding these subsidiaries from consolidation)
These subsidiaries have been excluded from consolidation, because both of them are smallin size and their total assets, net sales, net income/loss for the year ended December 31,
2014 (amounts proportionate to the Company’s equity interest),and retained earnings(amount proportionate to the Company’s equity interest) have no significant impact on the
consolidated financial statements.
2. Application of equity method(1) Number of equity method affiliates:
Not applicable20(2) The equity method is not applied to some non-consolidated subsidiaries (Life Create Bank,
Inc. and Best Bridal Singapore Pte. Ltd.) and an affiliate (Marizin Inc.), because they are ofminor importance in terms of the bearing of net income/loss (amounts proportionate to theCompany’s equity interest) and retained earnings (amount proportionate to the Company’s
equity interest) on the consolidated financial statements for the fiscal year ended December
31, 2014, and in terms of their position within the whole Tsukada Global Holdings Group.
3. Accounting period of consolidated subsidiaries
Consolidated subsidiaries have the same accounting period as the parent company.
4. Accounting standards(1) Valuation of principal assets
1) Securities
Available-for-sale securities:
For which market quotations are available:
These securities are recorded at fair value based on market quotations, etc. on the
consolidated balance sheet date. (Unrealized holding gains and losses are recorded as a
net amount in net assets accordingly. The cost of securities sold is calculated with themoving average method.)
For which market quotations are not readily available:
Calculated using the moving average cost method.
With respect to investments in silent partnership, the Company uses a method whereby itrecords the net amount of the percentage interest held based on the most recent statementof accounts that the Company is able to obtain as of the day stipulated in the partnershipagreement on which the latest statement of accounts is reported.
2) Derivatives
Recorded at fair value.
3) Inventory
Merchandise:
Cost determined by identified cost method (The balance sheet amounts are calculated by
way of write-down of book value to reflect reduced profitability).
Raw materials and supplies:
Cost determined by last purchase cost method (The balance sheet amounts are calculated
by way of write-down of book value to reflect reduced profitability).
(2) Depreciation/amortization of material depreciable/amortizable assets
1) Tangible assets (excluding lease assets)
Declining balance method
Buildings (excluding leasehold improvements) acquired by some consolidated subsidiaries
on or after April 1, 1998, however, are depreciated with the straight-line method.
Buildings and structures held by the Company on leased land based on fixed term landlease agreements are depreciated by the straight-line method over the period equal to theremaining period of the fixed term land lease right with a residual value of nil.
2) Intangible assets (excluding lease assets)
21

Straight-line method
Software obtained for internal use is amortized over its estimated useful life (five years).
3) Lease assets
The straight-line method is used with the lease period as the useful life and a residual valueof nil.
Leased assets under finance leases other than those that transfer the ownership of theleased assets to the lessee and which constitute lease transactions entered into on or
before December 31, 2008, are accounted for in the same manner as operating leases.
(3) Accounting standards for principal reserves and allowances
1) Allowance for doubtful receivables
To cover possible losses from bad debts, the Company records an allowance for doubtfulreceivables in the uncollectible amount estimated based on historical default rates forgeneral receivables and based on analysis of debtors’ financial positions for specific doubtfulreceivables.
2) Provision for point card certificatesSome of the consolidated subsidiaries have provisions for the point card certificates granted
to the customers, stated at the amount estimated to accrue from the potential use of thecard.
3) Provision for directors’ retirement benefits
To prepare for the payment of directors’ retirement benefits, the necessary amount ischarged based on year-end provision calculated using the in-house regulations.
(4) Accounting method for employees’ retirement benefits
1) Method for attributing projected retirement benefits
In calculating retirement benefit obligations, a straight-line method has been used for
attributing projected retirement benefits to the period till the end of the fiscal year ended
December 31, 2014.
2) Amortization of Actuarial differences and prior service costs
Prior service costs are amortized on a straight-line basis over a certain period (mainly 7
years) within the average remaining service period of employees at the time of its
recognition.
Actuarial gains or losses are amortized on a straight-line basis over a certain period (mainly
7 years) within the average remaining service period of employees at the time of recognition
and are allocated proportionately, from the fiscal year following the respective fiscal year ofrecognition.
3) Use of simplified valuation method
In calculating retirement benefit obligations and costs, the Company and some of its
consolidated subsidiaries use the simplified valuation method which deems avoluntary-base accrued retirement benefit at the end of the year as retirement benefit
obligations.
(5) Standards for translating significant assets or liabilities denominated in foreign currencies into
Japanese yen

22Foreign currency denominated claims and obligations are translated into Japanese yen at
the spot rate prevailing on the consolidated balance sheet dates. Currency translation
losses or gains are recorded on the income statement as such. The assets and liabilities offoreign subsidiaries are also translated into Japanese yen at the spot rate prevailing on the
consolidated balance sheet date, and revenues and expenses are translated into Japanese
yen at the average rate over the period. Any translation losses or gains are recorded in the
net assets under the account “Foreign currency translation adjustments.”(6) Accounting for significant hedges
1) Hedge accounting
Deferred hedge accounting is applied. The company applies special treatment tointerest-rate swap agreements that meet the criteria for such special treatment.
2) Hedging instruments and hedged transactions
Hedging instruments:
Interest rate swap, foreign exchange forward contracts
Hedged transactions:
Foreign currency-denominated claims and obligations, foreign
currency-denominated-forecasted transactions, debts
3) Hedging policy
The Company uses derivative transactions for the purpose of hedging foreign exchangerisks and interest rate risks to meet the Company’s actual needs. It is the Company's policy
not to engage in derivative transactions for speculative purposes.
4) Method for evaluating effectiveness of hedges
The effectiveness of hedges is assessed by measuring the high correlation betweenchanges in market values or cash flows of hedge instruments and changes in market values
or cash flows of the hedged items.
(7) Amortization method and period for goodwill
Goodwill is equally amortized over the period of the future economic benefits for each
investment.
(8) Scope of cash and cash equivalents in the consolidated statements of cash flows
Cash on hand, bank deposits able to be withdrawn on demand, and short-term investmentswith maturities of three months or less at the date of acquisition and that are readily
convertible to cash and represent a minor risk of fluctuation in value.
(9) Other important matters for preparation of consolidated financial statements
Consumption taxes:
Transactions are recorded exclusive of consumption taxes.
(Changes in Accounting Policy)(Application of Accounting Standard for Retirement Benefits, etc.)“Accounting Standard for Retirement Benefits” (Accounting Standards Board of Japan - ASBJ Statement No. 26 of May 17, 2012) and “Guidance on Accounting Standard for Retirement
Benefits” (ASBJ Guidance No. 25 of May 17, 2012) have now been applied, effective from the23

end of the consolidated fiscal year ended December 31, 2014 (except for the provisions of Article
35 of the Accounting Standard for Retirement Benefits and Article 67 of the Guidance on
Accounting Standard for Retirement Benefits). Accordingly, net retirement benefit liability is now
recorded as the amount of retirement benefit obligations less the value of the pension plan assets.
Unrecognized actuarial gains/losses and unrecognized prior service costs are recorded as
defined benefit liability.
In accordance with the interim measures stipulated in Article 37 of the Accounting Standard for
Retirement Benefits, the effect of this change as of December 31, 2014, is added to or deductedfrom the remeasurements of defined benefit plans under accumulated other comprehensive
income.
Consequently, as of December 31, 2014, net defined benefit liability of ¥308 million is recorded,
while total accumulated other comprehensive income decreased by ¥3 million.
(Segment and Other Information)
Segment Information
1. Overview of reportable segment
The Company Group’s reportable segments are components of the Group about which
separate financial information is available. These segments are subject to periodic
examinations to enable the Company’s board of directors to decide how to allocate resources
and assess performance.
The Group’s operations are classified into four reportable segments: the “domestic wedding
business” that provides services such as planning and operation related to wedding
ceremonies and banquets in Japan, the “hotel business” that offers the management of hotel
weddings and provision of hotel accommodation services, the “overseas business” providing
wedding and related services overseas, and the “W&R business (Wellness and Relaxation
business)” segment that provides reflexology services.
“Domestic wedding business” comprises outlet management in Japan and sales tocustomers, provision of food and drink at wedding banquets, dress rental and beauty careservices. “Hotel business” offers the management of hotel weddings and provision of hotel
accommodation services at Hotel InterContinental Tokyo Bay and The Strings byInterContinental Tokyo. “Overseas business” consists mainly of management of wedding
venues and operation of weddings and banquet in Hawaii and Bali Indonesia, for customers
who book through the Group’s sales salons in Japan. The segment also subleases wedding
facilities to an affiliate in South Korea. “W&R business (Wellness and Relaxation business)”
operates, at 36 outlets across Japan, a British-style reflexology salon, “Queensway” with a highlevel of skills and sophisticated know-how of attending to customers.
2. Calculation of net sales, income/loss, assets, liabilities, and other items by reportable segment
Accounting methods applied in reportable segment by industry largely corresponding to thosepresented under “Basis for Preparation of Consolidated Financial Statements.”
Reportable segment income is based on operating income.
Intersegment sales or transfers are based on market price.

24

3. Net sales, income/loss, assets, liabilities, and other items by reportable segment
Year ended December 31, 2013 (January 1 to December 31, 2013)(millions of yen)

Reportable segment
Domestic
weddingbusiness
Net sales
Sales to outside customers
Inter-segment sales andtransfersHotelbusinessAmount recorded

Overseasbusinesson consolidated

Adjustments

Total

financial(note 1)statements(note 2)37,392

7,139

2,894

47,426-47,426

394

124

0

519

(519)

-

Total

37,787

7,263

2,895

47,945(519)

47,426

Segment income (loss)

8,082

1

69

8,152

(1,296)

6,856

Segment assets

26,635

8,533

3,248

38,417

15,55053,968

2,226
-

278
84

120
-

2,625
84

28
-

2,653
84

1,125

589

27

1,742

15

1,758

Other items
Depreciation/amortization
Amortization of goodwill
Increase(decrease) intangible and intangible assets

Notes: 1. Details of adjustments are as follows:(1) The minus 1,296 million yen adjustment for segment income includes 40 million yen elimination ofinter-segment sales and minus 1,337 million yen of unallocated corporate expenses. The main
component of these unallocated corporate expenses is SG&A expenses that are not attributable toreportable segments.
(2) The 15,550 million yen adjustment for segment assets comprises unallocated corporate assets.
Unallocated corporate assets consist mainly of cash and deposits held by the Company which are not
attributable to reportable segments.
(3) The 28 million yen adjustment for depreciation/amortization comprises depreciation/amortization for
unallocated corporate assets.
(4) The 15 million yen adjustment for increase (decrease) in tangible and intangible assets comprises
investments in unallocated corporate assets.
2. Segment income is adjusted to correspond with operating income reported on the consolidated statements
of income for the corresponding period.

25Year ended December 31, 2014 (January 1 to December 31, 2014)(millions of yen)

Reportable segment

Amountrecorded on

Domestic
weddingbusinessHotelbusiness

Overseasbusiness

W&R
business

Total

Adjustments

consolidated(note 1)

financialstatements(note 2)

Net sales
Sales to outside
customers
Inter-segment sales
and transfers

36,84910,635

3,458

747

51,691-

51,691

590

149

0

-

739

(739)

-

Total

37,44010,784

3,458

747

52,431(739)

51,691

Segment income (loss)

7,147

432

173

45

7,799

(1,392)

6,406

Segment assets

32,116

9,696

3,475

3,769

49,057

18,211

67,269

2,151
-

349
128

149
-

17
34

2,668
162

28
-

2,696
162

7,977

1,536

172

50

9,737

32

9,769

Other items
Depreciation/amortization
Amortization of goodwill
Increase(decrease) intangible and intangible
assets
Notes: 1. Details of adjustments are as follows:(1) The minus 1,392 million yen adjustment for segment income includes 43 million yen elimination ofinter-segment sales and minus 1,435 million yen of unallocated corporate expenses. The main
component of these unallocated corporate expenses is SG&A expenses that are not attributable toreportable segments.
(2) The 18,211 million yen adjustment for segment assets comprises unallocated corporate assets.
Unallocated corporate assets consist mainly of cash and deposits held by the Company which are not
attributable to reportable segments.
(3) The 28 million yen adjustment for depreciation/amortization comprises depreciation/amortization for
unallocated corporate assets.
(4) The 32 million yen adjustment for increase (decrease) in tangible and intangible assets comprises
investments in unallocated corporate assets.
2. Segment income is adjusted to correspond with operating income reported on the consolidated statements
of income for the corresponding period.

26

(Per Share Information)
Year ended December 31, 2013
Net assets per share
Net income per share
Diluted net income per share
Note:

Year ended December 31, 2014505.21 yen
86.62 yen
83.75 yen

Net assets per share
Net income per share
Diluted net income per share

587.99 yen
87.95 yen
78.52 yenCalculation base for net income per share and for diluted net income per share is as follows:Year ended
December 31, 2013

Year ended
December 31, 2014

4,236

4,294

-

-

4,236

4,294

48,916,035

48,828,484--

1,672,133

5,868,544--

Net income per share
Net income (millions of yen)Amount not attributable to common
stockholders (millions of yen)
Net income attributable to common stock(millions of yen)
Average number of shares outstanding during
the term (shares)
Diluted net income per share
Adjustment to net income (millions of yen)
Increase in the number of common stock(shares)
Residual securities that are not dilutive and notincluded in the calculation for diluted net income
per share(Significant Subsequent Events)
Not applicable27

4. Other Information(1) Changes in Officers
Not applicable(2) Weddings Held, Orders Received, and Sales volume
1) Number of weddings held
Year ended December 31, 2013

Year ended December 31, 2014

Number of weddings held (cases)

Number of weddings held (cases)

9,857

10,187

Hotel business

758

819

Overseas business

2,932

3,025

Total

13,547

14,031

Year ended December 31, 2013

Year ended December 31, 2014

Segment
Domestic wedding
business2) Orders received

Segment

Orders received

Order backlog

Orders received

Order backlog(cases)(cases)(cases)(cases)Domestic wedding
business

9,555

5,608

10,117

5,538

Hotel business

800

448

966

595

Overseas business

2,987

1,477

2,922

1,374

Total

13,342

7,533

14,005

7,5073) Sales volume
Segment
Domestic wedding
businessYear ended December 31, 2013

Year ended December 31, 2014

million yen

million yen
37,392

36,849Hotel business

7,139

10,635

Overseas business

2,894

3,458

-

747

47,426

51,691

W&R business
Total

Notes: 1. Classification of reportable segments has been changed since the first three months ended
March 31, 2014. The figures for the previous fiscal year ended December 31, 2013, havebeen readjusted to the new reportable segments.
2. Starting from the first three months ended March 31, 2014, those numbers of weddings held,orders received and order backlogs at the facilities in partnership with the Company have
newly been added, and therefore the figures for the previous fiscal year ended December
31, 2013, have been readjusted and reported accordingly.
3. Effective from the third quarter ended September 30, 2014, FAJA Co., Ltd. and two of its
28

subsidiaries have become the consolidated subsidiaries of the Company, and as a result,
W&R business (Wellness & Relaxation business) has been added as a reportablesegment.
4. Inter-segment transactions have been eliminated from the amounts shown above.
5. The above amounts do not include consumption tax.

29