〔Delayed〕The original disclosure in Japanese was released on February 12, 2016 at 15:00 (GMT+9)

February 12, 2016

Tsukada Global Holdings Inc.
Consolidated Earnings Report for the Fiscal Year ended December 31, 2015
(Japanese GAAP)
Stock listing: Tokyo Stock Exchange (First Section)
Securities code: 2418
URL: http://www.tsukada-global.holdings/en
Representative: Masayuki Tsukada, President and CEO
Information contact: Keiji Ishihara, Director
Tel: +81-3-5464-0081
Scheduled dates:
Ordinary general meeting of shareholders:March 30, 2016
Filing of statutory year-end financial report:
March 30, 2016
Dividend payout:
March 31, 2016
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, 2015
(January 1, 2015 – December 31, 2015)(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
53,8044.1
5,392(15.8)
5,431(19.0)
December 31, 2015
Year ended
51,691
9.0
6,406
(6.6)
6,708
(5.9)
December 31, 2014
Note: Comprehensive income: Year ended December 31, 2015:
3,585 million yen (-21.1%)
Year ended December 31, 2014:
4,543 million yen (1.8%)
Diluted net income
Ordinary income
Net income
Return on equity
per shareper share
to total assets
yen
yen
%
%
Year ended
79.48
70.95
12.8
7.4
December 31, 2015
Year ended
87.95
78.52
16.1
11.1
December 31, 2014
Reference: Equity in (earnings) losses of affiliates:
Year ended December 31, 2015: - million yen
Year ended December 31, 2014: - million yen

3,880

(9.6)

4,294

1.4

Operating income
to net sales
%
10.0
12.4

(2) Consolidated Financial Position

December 31, 2015

Total assets
million yen
80,32731,807

39.6

Net assets per shareyen
651.42

28,71042.7

587.99Net assets
million yen

67,269December 31, 2014
Reference: Total equity: December 31, 2015: 31,807 million yen
December 31, 2014: 28,710 million yen

Equity ratio%

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, 2015
Year ended
December 31, 2014

Cash and cash
equivalents at end of
periodmillion yen

Cash flows fromfinancing activities

Cash flows frominvesting activities

million yen

5,686(12,887)

7,712

17,863

6,960(10,780)

7,108

17,354

2. Dividends
Dividend per share
Total
dividends

Year ended
December 31, 2014
Year ended
December 31, 2015
Year ending
December 31, 2016
(Forecast)Rate of total
Dividend
dividend to
payout ratio
net assets(consolidated)(consolidated)%%

End-Q1yen

End-Q2yen

End-Q3yen

Year-endyen

Annual total
yen

-

5.00

-

5.00

10.00

488

11.4

1.8

-

5.00

-

5.00

10.00

488

12.6

1.6

-

5.00

-

5.00

10.00

million yen

11.9

3. Earnings Forecast for the Fiscal Year ending December 31, 2016
(January 1, 2016 – December 31, 2016)(Percentages indicate year-on-year changes)
Net sales
million yen%

Operating income

Ordinary income

million yen

million yen%%

Profit attributable to

Net income

owners of the parent
million yen%

per shareyen

Six months ending
June 30, 2016

27,400

10.8

1,720

9.7

1,770

9.9

1,000

0.3

20.48

Year ending
December 31, 2016

59,500

10.6

6,200

15.0

6,250

15.1

4,100

5.7

83.97

*Notes(1) Changes affecting the consolidation status of significant subsidiaries during the period: Yes
Newly Consolidated: None
Newly Deconsolidated: Retreat Co., Ltd.
Note: For details, please refer to "(5) Notes to the Financial Statements (Basis for Preparation ofConsolidated Financial Statements)" in section "4. Consolidated Financial Statements" on page
22 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 “4. Consolidated Financial Statements” on page 25 in the accompanying
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, 2015

December 31, 2014

48,960,000

48,960,000

131,534

131,534

Year ended

Year ended

December 31, 2015

December 31, 2014

48,828,466

48,828,484* 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 the assumptions 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 and analysts
on February 15, 2016.
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) Analysis of Financial Condition(3) Basic Policy on Profit Distribution, Dividends for Fiscal 2015, and Dividend
Forecast for Fiscal 2016(4) Business and Other Risks
2. Management Policy(1) Basic Management Policy(2) Target Management Indicators(3) Medium-to Long-term Management Strategy(4) Issues to Address
3. Basic Views on Adoption of Accounting Standards
4. 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)
5. Other Information(1) Changes in Officers(2) Weddings Held, Orders Received, and Sales Volume

1

2
2
3
4
4
9
9
9
9
10
12
13
13
15
15
17
18
20
22
22
22
25
26
29
29
30
30
30

1. Review of Consolidated Financial Results(1) Operating Results
1) Results for Fiscal 2015
In the fiscal year ended December 31, 2015, the Japanese economy followed a gradual recovery
path due to improvement in corporate earnings and the employment environment. However,China and other emerging countries experienced an economic slowdown, and the economic
outlook remains uncertain.
In this economic environment, in the bridal market, in which the Tsukada Global Holdings Group
operates, the number of weddings in Japan in 2015 was estimated at 635,000, compared with
643,749 in 2014 (source: Outline of Vital Statistics in Japan, Ministry of Health, Labour andWelfare). Although the declining birthrate is gradually having a discernible impact, the size ofJapan’s wedding market remains generally stable, due in part to a moderate rise in wedding
expenditures.
The number of foreign visitors to Japan is estimated to have reached a record 19.73 million in2015 (source: Japan National Tourism Organization), and the hotel market, another market inwhich the Group operates, is expanding steadily thanks to recovery in the Japanese economy,
coupled with a boost from foreign visitors.
Furthermore, the relaxation-related market is expected to experience substantial development
and expansion in the coming years as the burgeoning interest in health and beauty of recent years
adds to the market’s previous underlying strength.
In this market environment, the Group endeavored to increase sales and profitability byaccurately responding to customers’ increasingly individualized and diversifying needs in the bridal,
hotel, and relaxation markets while constantly and actively working to create new value, develop
high-quality, appealing outlets, and provide high value-added services.
As a result of these efforts, in the fiscal year ended December 31, 2015 Tsukada Global
Holdings Inc. (“the Company) posted consolidated net sales of ¥53,804 million (up 4.1% year onyear). However, a decrease in the number of weddings held at existing outlets, among otherfactors, resulted in operating income of ¥5,392 million (down 15.8%), ordinary income of ¥5,431
million (down 19.0%), and net income of ¥3,880 million (down 9.6%).
The results for each business segment were as follows. The Company changed its reportablebusiness segments beginning in fiscal 2015, and in the year-on-year comparisons presented
below the figures for fiscal 2014 have been adjusted to reflect the change in segments.
a. Domestic wedding businessAlthough the number of small weddings held remained steady in fiscal 2015, net sales declined
slightly owing to the decrease in the number of weddings held at existing outlets.
As a result, net sales in the domestic wedding business were ¥33,427 million (down 4.6%
year on year), and segment operating income was ¥6,320 million (down 10.5%).
b. Hotel business
Sales of the Hotel InterContinental Tokyo Bay and The Strings by InterContinental Tokyo were
firm, thanks to factors including the increase in foreign visitors to Japan, and contributed to an
overall increase in net sales. In addition, although the number of orders received developed
steadily at the Meieki (formerly Sasashima) outlet, which opened in November 2015, theCompany recorded outlet-opening preliminary expenses of ¥292 million.
As a result, net sales in the hotel business were ¥13,946 million (up 11.9% year on year),while segment operating income was ¥431 million (down 17.1%).
c. Overseas business
The overseas business steadily increased its direct sales business and enjoyed an increase in
the number of weddings held for non-Japanese couples.
As a result, net sales in the overseas business were ¥3,475 million (up 0.5% year on year),and segment operating income was ¥79 million (down 54.2%).

2

d. W&R business (Wellness & Relaxation business)
In the W&R business, the market was strong, and average spend per customer and the numberof customers grew steadily. As the deemed acquisition date of FAJA Co., Ltd. and its
subsidiaries was September 30, 2014, the figures for fiscal 2014 are business performance forthe two-month period from October 1, 2014 to December 31, 2014.
As a result, net sales in the W&R business were ¥2,954 million (up 295.1% year on year), andsegment operating income was ¥110 million (up 141.9%).
2) Earnings Forecast for Fiscal Year Ending December 31, 2016
Regarding the economic environment in which the Tsukada Global Holdings Group operates,
although benefits are expected from economic stimulus measures and a moderate improvement
in corporate earnings in Japan, the economic outlook is likely to remain uncertain.
The Group intends to actively develop competitive products and constantly strive to create newvalue and will also aim at improving cost-competitiveness and enhancing profitability throughefficient outlet development and development of human resources.
The order backlog at the end of the fiscal year under review (December 31, 2015) was 7,258
orders (down 3.3% year on year). For the fiscal year ending December 31, 2016, the Company
forecasts consolidated net sales of ¥59,500 million, operating income of ¥6,200 million, ordinary
income of ¥6,250 million, and profit attributable to owners of the parent of ¥4,100 million.
(2) Analysis of Financial Condition
1) Assets, Liabilities, and Net Assets
Total assets at the end of the fiscal year (December 31, 2015) amounted to ¥80,327 million, an
increase of ¥13,057 million from the end of the previous fiscal year (December 31, 2014). Thechange resulted mainly from increases of ¥7,012 million in buildings and structures in conjunction
with the opening of the Meieki (formerly Sasashima) outlet, ¥3,830 million accompanying theacquisition of a site for a hotel in Hawaii, and ¥4,148 million in cash and deposits and a decreaseof ¥3,851 million in marketable securities.
Liabilities at the end of the fiscal year totaled ¥48,519 million, an increase of ¥9,960 million
compared with the end of the previous fiscal year. The change is chiefly attributable to a netincrease of ¥8,221 million in debt and corporate bonds accompanying the opening of the Meieki(formerly Sasashima) outlet and an increase of ¥1,308 million in other current liabilities.
Net assets at the end of the fiscal year totaled ¥31,807 million, an increase of ¥3,097 million
from the end of the previous fiscal year. The change is mainly due to ¥488 million in dividends paid
from retained earnings and the booking of ¥3,880 million in net income.
2) Cash Flow
Cash and cash equivalents (“cash”) at the end of the fiscal year increased by ¥509 million from theend of the previous fiscal year to ¥17,863 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 ¥5,686 million, a decrease of
18.3% from the previous fiscal year. The change is mainly attributable to ¥5,291 million in income
before income taxes and minority interests and ¥2,763 million in depreciation and amortization,
partially offset by ¥2,153 million in income taxes paid.
(Investing cash flow)
Cash used in investing activities totaled ¥12,887 million, an increase of 19.5% from the previous
fiscal year. The change is mainly the result of ¥11,645 million for purchase of tangible assets, ¥991
million in lease and guarantee deposits, and ¥702 million for purchase of investment securities.
(Financing cash flow)3Cash provided by financing activities in the fiscal year totaled ¥7,712 million, an increase of 8.5%
from the previous fiscal year. The change is mainly attributable to net proceeds of ¥8,211 million
from debt and issuance of bonds and ¥487 million in dividends paid to shareholders.
Change in the Tsukada Global Holdings Group’s cash flow-related indicators is as follows.

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

FY2012FY2013

FY2014FY2015

43.0

45.7

42.7

39.6

39.9

60.2

60.1

47.7

3.2

3.2

3.9

6.2

16.7

23.4

32.6

24.8

Notes:
Return on equity: Total equity/Total assets
Return on equity 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. Cash flows from operating activities in the Consolidated Statements of Cash Flows are used
for operating cash flow. Interest-bearing debt includes all liabilities recorded on theConsolidated Balance Sheets on which interest is paid. Interest paid in the Consolidated
Statements of Cash Flows is used for Interest expenses.
(3) Basic Policy on Profit Distribution, Dividends for Fiscal 2015, and Dividend Forecast for
Fiscal 2016
The Company considers the return of profits to shareholders to be an important management
priority. The Company’s policy is to give comprehensive consideration to the financial situation,
profit level, and other factors while strengthening the business infrastructure and to return profits toshareholders in a flexible manner in accordance with the operating results each year while taking
into consideration enhancement of internal reserves.
With regard to dividends, the Company decided to pay a year-end dividend of ¥5 per share forthe year ended December 31, 2015. As the Company paid an interim dividend of ¥5 per share inAugust 2015, the annual dividend for fiscal 2015 is ¥10 per share.
The Company also plans to pay an annual dividend of ¥10 per share (including an interim
dividend of ¥5 per share) for the year ending December 31, 2016.
(4) Business and Other Risks
The following is a description of matters considered to be potential risks to the Tsukada Global
Holdings Group’s business operations. In the interest of proactive disclosure of information toinvestors, matters that the Company does not necessarily consider business risks but that may be
important for investor decisions or understanding of the Group’s business activities have been
included.
Forward-looking statements contained herein are based on the Company’s best judgment as ofthe end of fiscal 2015. The Company strives to avoid the occurrence of risks and respond when arisk occurs.
1) Characteristics of the businessa. Services
The Tsukada Global Holdings Group aims to provide the latest wedding styles based onservices highly responsive to the interests and preferences of its customers by constantly andmeticulously analyzing contemporary needs and fashion trends, combining experience andexpertise accumulated within the Group with high-level services provided by partner companies,

4and assigning professional chefs and service staff to each facility to provide dining and otherservices.
Nevertheless, if the Group’s services fail to respond to current needs and fashion trends or if
the Group is unable to secure partner companies, chefs, or staff that meet the desired level of
excellence and be unable to provide satisfactory services to customers, the Group’s operating
results may be affected.
b. Human resources
To cope with further expansion of operations and diversification of business activities, the Groupwill further bolster its sales and administrative department personnel by actively recruiting recent
university graduates and establishing education and training systems. Nevertheless, if theGroup is unable to secure internally personnel in line with expansion of operations as planned,
competitiveness may decline, further expansion of operations may be constrained, and theGroup’s operating results may be affected.
2) Markets in which the Group operates
According to the Ministry of Health, Labour and Welfare’s Outline of Vital Statistics in Japan,
Japan’s population of people reaching marrying age is gradually declining. If the overall size ofthe bridal market contracts in the future, the Group’s operating results may be affected.
Guest houses and wedding services are attracting attention as a new wedding style, theirshare of the bridal market is increasing as they gain recognition, and the Group expects
demand to further increase. As this market growth potential becomes a focus of attention, entry
into the guest house and wedding services market by existing hotels and ceremony halloperators, the provision of unprecedented new services, and market entry by companies fromother industries is expected. If competition with other companies intensifies as a result, theGroup’s operating results may be affected.
3) Operating results and financial situationa. Seasonal changes in operating results
The Group’s net sales increase at the time of opening of new facilities and tend to beconcentrated during the April–June and October–December peak wedding seasons in Japan(the second and fourth quarters of the Company’s fiscal year).
Quarterly operating results for the fiscal year ended December 31, 2015

Net sales
Operatingincome orloss (lossshown inparentheses)

First Quarter(percentage of full-year
results)
Million yen
10,757

Second Quarter(percentage of full-year
results)
Million yen
13,961

20.0%

(165)
-3.1%

25.9%

1,732
32.2%

Third Quarter(percentage of full-year
results)
Million yen
13,156

Fourth Quarter(percentage of full-year
results)
Million yen
15,928

24.5%

1,267

29.6%

2,557

23.5%

b. Heavy reliance on debt
Since heretofore the Group has raised investment capital for construction costs, lease andguarantee deposits, and other expenses incurred when building new guest houses primarily bymeans of loans from financial institutions, the ratio of interest-bearing debt to total assets is high.
The balance of interest-bearing debt was ¥27,149 million as of December 31, 2014 and¥35,409 million as of December 31, 2015. The ratio of interest-bearing debt to total assets stoodat 40.3% as of December 31, 2014 and 44.1% as of December 31, 2015, reflecting the Group’s

5

47.4%

heavy reliance on debt. The ratio of interest expenses to net sales was 0.4% in the year ended
December 31, 2014 and 0.4% in the year ended December 31, 2015.
If the financial situation changes significantly and interest rates rise, the Group’s operating
results may be affected.
In addition, some of the Company’s loans have financial covenants attached. If the Company
violates these covenants and a lender demands settlement, the loan may become immediately
due and payable and the Company may repay the loan in full.
c. Overseas conditions
The Group operates an overseas wedding services business that caters mainly to Japanesecustomers in Hawaii, the United States and Bali, Indonesia. As of December 31, 2015, theGroup directly operated four wedding chapels and had exclusive usage rights to one church in
Hawaii and directly operated two wedding chapels in Bali. The Group sells wedding plans foreach of these markets through a total of six sales salons, five in Japan and one in Hawaii. For
this reason, changes in the political situation or economic trends in these overseas regions or
the occurrence of events such as war, terrorism, or major natural disaster may result incancellations and affect the Group’s operating results.
Local companies Best Bridal Hawaii, Inc. and PT. Tirtha Bridal provide wedding services on acontract basis for overseas wedding orders received by the Company and also arrange
weddings for local customers. BEST HOSPITALITY LLC owns a hotel development site in
Hawaii. EcPark Pte. Ltd. operates a restaurant business that caters to local customers. Best
Bridal Korea Inc. is constructing guest houses and has signed lease contracts with Marizin Inc.
in preparation for entry into the Korean bridal market. If these business activities fail to progressin line with the Company’s expectations, the Group’s operating results may be affected.
d. Impact of foreign exchange fluctuations
Since the Company has receivables denominated in foreign currencies including outstandingloans to subsidiaries and has debts denominated in foreign currencies, the Group’s operating
results and financial situation may be affected by significant foreign exchange fluctuations.
e. Food safety
Since the Group operates restaurants in its ceremony halls and hotels, it is subject to regulation
under food sanitation laws. To ensure that situations such as suspension of business due tofood poisoning or other hygiene-related issues occur, the Group appoints a sanitary manager at
each outlet and restaurant and constantly takes all possible measures to ensure safety andquality. Nevertheless, if a major quality problem that goes beyond the scope of the Group’s
measures occurs, 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 business activities, such as deciding management policies and strategy. To
avoid over-reliance on Masayuki Tsukada in business management and execution, theCompany mitigates management risk by means such as enhancement of the Management
Committee and delegation of authority and is also strengthening human resources developmentin each business sector. However, if Masayuki Tsukada becomes unable to perform his duties
due to unforeseen circumstances, business development and business results may be affected.
5) Laws and regulations
The Group’s domestic wedding business is subject to various regulations on the construction
and renovation of guest houses under the Building Standards Act, Fire Service Act, Sewerage
Act, and other laws as well as, depending on building structure and construction location,
regulations under local ordinances on wastewater control, noise control, and other matters.
When the Group constructs or renovates facilities, it hires a licensed architect or construction
company to perform structural checks, and the Company’s marketing department and local fire
departments also perform checks. Nevertheless, if the Group violates any of the above legal

6regulations, guest house construction plans may be delayed or operations impeded, and theGroup’s operating results may be affected.
The Group has registered its overseas salons (type one business activities) pursuant to theTravel Agency Act. If the Group violates the act and becomes unable to renew its registration or
has its registration revoked, the Group’s operating results may be affected.
Furthermore, the Group operates its hotels in accordance with the Inns and Hotels Act, andthe provision of beauty services offered prior to wedding ceremonies is subject to regulation
under the Act on Specified Commercial Transactions.
6) Capital investment and new construction riska. 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

Shinsaibashi Marunouchi
2

1

4

Yagoto
4

5

3

2

5

8

3

1

Kamogawa Chiba Akasaka Odaiba Nagoya Minato Iseyama Meieki
3

2

1

1

3

7

As of December 31, 2015, the Group operates the aforementioned 20 outlets (65 guest houses)
inside Japan. All of the outlets were planned internally by the Company’s business development
department.
The Group’s policy is to continue to efficiently open new guest houses, mainly in the Tokyo
Metropolitan, Kansai, and Chukyo regions, after meticulous market analysis, facility planning,and site selection.
The Group seeks to sustain a stable customer acquisition rate by renovating existing guest
houses on a three-year renewal cycle and maintaining newness and excellent design
characteristics at all times.
Nevertheless, if the Group is unable to acquire real estate (primarily land) suitable for facilities
construction or employ necessary operations staff, or if new or existing guest houses fail to meetwith customer acceptance, the Group’s operating results may be affected.
Additionally, if the real value of fixed assets held by the Group declines significantly due tofactors such as the industry trend or change in the business environment, the Group’s operating
results and financial situation may be affected due to recognition of impairment loss.
b. Outlet development risks
The Group typically signs lease contracts to secure sites needed for its directly operated outlets
and pays guarantee money as well as upfront interior and exterior design expenses when
opening outlets. After outlet opening as well, labor costs, rent, and other running costs are
incurred. For this reason, the amount of deposits and guarantees and related expenses
increase with the opening of new outlets. If the Company is forced to close an outlet after ashorter period than the expected period of operation, it may incur penalties for breach ofcontract. In addition, if a lessor goes bankrupt, the Company may be unable to recover all orpart of its guarantee money.
The Company’s policy on future site procurement is to proceed with guest house construction
using land acquisition and securitization as an option in addition to leasing for the purpose of
putting the outlet development plan on a firmer footing. Although the Company’s policy when
considering outlet development is to place priority on management efficiency and avoidance ofdeterioration of the financial position, acquisition of land may affect the financial position.
An outlet format unique to the Group is large-scale outlets that contain multiple guest houses
within a single large site. By constructing multiple guest houses on the same site, the Group
meets the diverse customer needs and preferences by preparing guest houses with a variety ofconcepts and different seating capacity. The Group’s policy is to focus on developing large-scale
outlets. As this necessitates securing large sites, if the Group is unable to secure properties

7

7

suitable for construction and the outlet development plan does not progress as expected,
business development may be constrained, and the Group’s operating results may be affected.
c. Special purpose company
The Group utilizes the Shirogane office (Shirogane SPC Co., Ltd.) as a special purpose
company (SPC). The Company invests in an anonymous partnership in connection with the
SPC and, with respect to the scope of consolidation of this anonymous partnership investment,
determines individually whether or not the Company has control and influence over the SPC in
accordance with the Practical Solution on Application of Control Criteria and Influence Criteria to
Investment Associations (ASBJ Practical Issues Task Force No. 20, March 25, 2011). The
executive authority for the anonymous partnership is the SPC, the partnership operator, and theCompany does not have any direct voting rights or other authority that would give it control over
the SPC. Since it is clear that the Company cannot make decisions over financial, operating, orbusiness policies, the anonymous partnership operated by Shirogane SPC Co., Ltd. does not
qualify as a subsidiary and is excluded from the scope of consolidation.
With regard to decisions on the scope of consolidation, in recent years transactions involving
the use of special purpose companies have rapidly increased and become more complex anddiversified, it has been pointed out that stakeholders may be misled in their judgments
concerning the status of business groups, and the Company recognizes that special purpose
companies are the subject of international debate. If a change occurs in the Company’s policy
on deciding the scope of consolidation due to the institution of new accounting standards or the
publication of practical guidelines on accounting standards, the Group’s operating results andfinancial condition may be affected.
The anonymous partnership operated by Shirogane SPC Co., Ltd. had trust beneficiary rightsof ¥2,707 million and loans from financial institutions totaling ¥1,784 million as of December 31,
2015.
7) Management of customer information
The Group handles the personal information of many customers through its wedding services
sales activities. The Group has prepared against the risk of information leakage by taking
security measures to maintain the confidentiality of this personal information, including storing
information in locked cabinets and using passwords to secure electronic information.
Nevertheless, if leakage of personal information occurs due to unforeseen circumstances, theGroup’s operating results may be affected by loss of public trust in the Group.

82. Management Policy(1) Basic Management Policy
The corporate philosophy of the Tsukada Global Holdings Group is “Tsukada Global Holdings
strives to create gathering places which leave an everlasting memory on guests by offering thefinest professional hospitality services.” In accordance with this philosophy, the Group has
accurately identified constantly changing customer needs and provided high-quality services andhigh value-added facilities. The Group will pursue sustained development and enhancement ofcorporate value by continuing to create new value in the markets in which it operates.
The Group has set forth five basic strategies to accomplish the basic management policy.
1. Outlet development strategy:
Develop guest houses, hotels, and wellness & relaxation facilities, primarily in the Tokyo
Metropolitan, Kansai, and Chukyo regions, that are adapted to the unique characteristics ofeach market.
2. Product development capabilities:
Realize competitive products with high added value, aiming to provide customers with highly
satisfying products and services.
3. Proposal and sales capabilities:
Accurately identify customer needs (customers’ dreams) and enhance product proposal andsales capabilities to make these dreams come true.
4. Profitability enhancement:
Streamline management and improve operating efficiency to continuously achieve highprofitability.
5. Financial strategy:
Procure funds by means suited to the characteristics of the business, placing priority on
capital costs, while carefully considering factors such as maintenance of a sound financial
position, capital efficiency improvement, and dilution of share value.
(2) Target Management Indicators
To remain a corporate entity capable of stable and continuous growth, the Group has made returnon equity (ROE) an important management indicator in order to increase overall profitability whilestrengthening the financial position. The Group will work to enhance corporate value by increasing
ROE.
(3) Medium- to Long-term Management Strategy
1) Product strategy
While meticulously analyzing contemporary needs and fashion trends, the Group continuously
provides 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, bride and groom become lady and lordof the manor, welcoming many guests as party hosts. For customers who seek to fulfill their own
dreams and aspirations, the Company has developed a system that is highly responsive tocustomers’ preferences and plans by combining the Group’s accumulated expertise withhigh-level services provided by many partner companies. As for eating and drinking andservices, the Company assigns a professional chef and service staff to each outlet to always
provide high-quality dining and services.
At the Hotel InterContinental Tokyo Bay, The Strings by InterContinental Tokyo, and the Sir
Winston Hotel, which the Group operates, the Company is defying the conventional wisdom of
profitability improvement through cost cutting by implementing transformational management
reform through new investment. As a result, the Company is achieving a significant
improvement in profitability.
The Group also operates the British-style Queensway reflexology salons, which boast an
extraordinary repeat rate as the first casual healing salons in Japan that provide reflexology

9services. The secrets to their success are their stylish pub-like British green exterior andreflexology techniques thoroughly researched and developed for the Japanese market.
2) Outlet development strategy
The Group aims to create high-quality, authentic facilities. The domestic network comprises 20
guest houses, the Hotel InterContinental Tokyo Bay, The Strings by InterContinental Tokyo, theSir Winston Hotel, The Strings Hotel Nagoya (opened January 2016), and 40 Queensway
reflexology salons. The sustained growth of the Company requires efficient outlet development
based on facility planning, site selection, and property selection based on meticulous marketing
analysis, and the Company plans to develop outlets mainly in the Tokyo Metropolitan, Kansai,
and Chukyo regions, which offer strong future growth potential. The Group seeks to sustain astable customer acquisition rate by renovating existing guest houses on a three-year renewal
cycle and maintaining newness and excellent design characteristics at all times.
3) Sales strategy
The Group does not conduct door-to-door selling. The principal sales method is face-to-facesales to customers visiting facilities by sales staff.
In the domestic wedding business, the product announcement and advertising strategy relies
heavily on paid advertising via TV commercials, wedding magazines, and other media, andcreating more appealing advertisements is critical for prevailing against competitors. The
Company creates appealing print advertising with an emphasis photographic content to callmaximum attention to the design and service content of facilities. The Company also actively
solicits customers via the Internet by combining use of Internet advertising with introduction offacilities and services on websites.
Trend in sales results such as sales success rates for each facility are compiled and analyzed
weekly, and supervisors from domestic business divisions discuss improvement measures withmanagers and staff of guest houses showing signs of declining customer acquisition andprovide guidance and recommendations on how to improve success rates.
With regard to the overseas business, the Company is strengthening the overseas wedding
salons in Japan (five outlets) and sales channels in order to improve the ability to attract
customers and increase success rates.
The Group will further emphasize the development of high-caliber personnel by establishingeducation and training systems to enhance the service proposal capabilities of individual
employees.
(4) Issues to Address
The economic environment in which the Tsukada Global Holdings Group operates is likely toremain generally unpredictable and adverse. Although the about-face in monetary policy andeconomic stimulus measures in Japan is expected to lead to revival of the stagnant economy,
worldwide fluctuation in crude oil prices, interest rates, exchange rate trends, and corporate
business performance is expected to continue for some time.
In these circumstances, the Group must continue to operate highly competitive and attractive
guest houses and hotels while providing meticulous products and services responsive to customer
needs, which are expected to become increasingly individualized and diverse, and constantly
create and provide new, high value-added services in the wellness and relaxation business.
The Company will seek to grow into a comprehensive hospitality company by reinforcing andimproving an advertising strategy that helps boost brand power in order to further enhancecompetitive advantage in the market and corporate value, further promote Group synergies with aview to expansion into overseas markets, strengthen the financial position by means including
cost cutting, and focus on securing and developing talented human resources.
1) Guest house development
The Company operates 20 outlets in Japan. Since development of highly competitive guest
houses is a cornerstone of the business, the Company plans to promote more efficientdevelopment while diversifying the outlet development strategy.

102) Hotel development
The Group operates the Hotel InterContinental Tokyo Bay, The Strings by InterContinental
Tokyo, the Sir Winston Hotel, and the Strings Hotel Nagoya (opened January 2016). The Groupplans to actively develop new properties in Japan and overseas while further enhancing earning
power.
3) Development of wellness and relaxation facilities
The Group operates British-style reflexology salons (Queensway) and plans to expand thescale of this business by proactively developing these salons and by accelerating developmentof a spa complex.
4) Securing and developing human resources
The Company believes that strengthening of its wedding presentation capabilities to enhancecustomer service contributes to differentiation from competitors and will continue to actively
create mechanisms to raise employee motivation and develop systems to make possible
medium- to long-term employee development.

11

3. Basic Views on Adoption of Accounting Standards
The Company’s financial statements are prepared in accordance with the accounting principles
generally accepted in Japan (Japanese GAAP), in order to ensure comparability with othercompanies in the peer. As to the possible future adoption of the International Financial ReportingStandards (IFRS), the Company shall continue its study going forward, taking into account the
future developments of the Company’s business and of the global and Japanese businessenvironments.

124. 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
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

13

December 31, 2014

(millions of yen)
December 31, 2015

AmountAmount13,441
871
4,214
40
480
551
1,371
(46)
20,923

17,589
879
362
33
569
615
1,876
(55)
21,87031,185(16,350)
14,835
11,023922
5,162(3,833)
1,328
28,10939,274(17,426)
21,847
14,854632
6,080(4,260)1,819
39,154

2,805
193
2,999

2,538
181
2,719

3,920
7,676
2,247
1,447
(164)
15,127
46,236

4,285
8,362
2,770
1,066
16,48558,358108
10867,26997
97
80,327

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 with stock acquisition rights
Long-term debt
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

14

December 31, 2014
Amount(millions of yen)
December 31, 2015
Amount

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

2,258
2,857
724
1,369
1,131
4,492
12,8343,422
5,000
15,613
308
681
1,419
650
27,09438,5583,558
5,000
23,227
331
691
2,139
736
35,68548,519472
634
27,238(88)
28,256472
634
30,630(88)
31,648

167

(28)

7

-

282
(3)
454
28,71067,269190(2)158
31,80780,327

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(millions of yen)
Year ended
Year ended
December 31, 2014 December 31, 2015
AmountAmount
51,69153,804
Net sales
Cost of sales
33,79135,756
17,90018,047Gross profit
11,493
12,655
Selling, general and administrative expenses
6,406
5,392
Operating income
Non-operating income
Interest income
74
81
Dividend income
13859
Gain on sales of marketable securities
43
Gain on investments in silent partnership
126
130
Foreign exchange gains
154
Gain on valuation of derivatives
129
Other
67
103
Total non-operating income
690
418
Non-operating expenses
Interest expenses
210
228
Loss on valuation of derivatives
56
Foreign exchange loss
51
Other
178
42
Total non-operating expenses
388
379
6,708
5,431
Ordinary income
Extraordinary income
Gain on sales of investment securities
7
Gain on sales of fixed assets
01
Total extraordinary income
81
Extraordinary loss
Loss on valuation of affiliated companies’ shares
38
Loss on sales of fixed assets
30
Loss on disposal of fixed assets
2247
Shop closing expenses
27
Impairment loss
128
Loss on liquidation of subsidiaries/affiliates
18
Provision of allowance for doubtful receivables
164
Provision of allowance for loss on shop closing
13
Others5
Total extraordinary loss
353
141
6,363
5,291
Income before income taxes and minority interests
2,477
1,874
Income taxes-current
(407)
(463)
Income taxes-deferred15

2,070
4,292
(1)
4,294

Total income taxes
Income before minority interests
Minority interests in income (loss)
Net income

16

1,411
3,880
3,880

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
Remeasurements of defined benefit plan
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of theparentComprehensive income attributable to minority
interests

17

Year ended
December 31, 2014
Amount4,292(millions of yen)
Year ended
December 31, 2015
Amount
3,880

78

(196)

(39)

(7)

211
250
4,543

(92)
0
(295)
3,585

4,543

3,585

-

-

(3) Consolidated Statements of Changes in Net Assets
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
Balance at end of term

472

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

88

634

3,794

(0)

3,794

27,238(88)

28,256

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

18

Year ended December 31, 2015 (January 1 to December 31, 2015)(millions of yen)
Shareholders’ equity

Balance at beginning of term

Capital stock

Capital surplus

472

634

Retainedearnings

Treasury stock

27,238Changes during term
Cash dividends
Net income

(88)

Total
shareholders’equity28,256

(488)

(488)

3,880

3,880

Purchase of treasury stock
Change in scope of
consolidation
Net changes in items otherthan shareholder's equity
Total changes during term

-

-

3,392

-

3,392

Balance at end of term

472

634

30,630(88)

31,648Net unrealized
gain onavailable-for-salesecurities
Balance at beginning of
term

167

Accumulated other comprehensive income
Deferred gain
(loss) on
Foreign currency Remeasurements
derivatives
translationof defined benefit
under hedge
adjustments
plans
accounting
7

282

(3)

Total
accumulated
othercomprehensive
income454

Total net
assets

28,710Changes during term
Cash dividends(488)

Net income

3,880

Purchase of treasury
stock
Change in scope of
consolidation
Net changes in items
other than

(196)

(7)

(92)

0

(295)

(295)

Total changes during term

(196)

(7)

(92)

0

(295)

3,097

Balance at end of term

(28)

-

190

(2)

158

31,807

shareholder's equity

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

Year ended
Year ended
December 31, 2014 December 31, 2015
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

Amount

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

5,291
2,763
291
20
47
28
56
(130)
(22)
-

Increase (decrease) in allowance for doubtful receivables

48

Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors’ retirement
benefits
Increase (decrease) in provision for point card certificates
Loss on liquidation of subsidiaries and affiliates
Shop closing expenses
Interest and dividend income
Interest expenses(Gain) loss on sales of marketable securities(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

19

25

38

9

(22)
(213)
210
-

(18)
18
27
(141)
228
(43)

(249)

(11)

(91)
112
(346)
8
291
202
415
9,618
199
(213)
(2,644)
6,960

(82)
(68)
(8)
(53)
(582)
43
239
7,940
129
(229)
(2,153)
5,686

20

Year ended
Year ended
December 31, 2014 December 31, 2015
AmountCash flows from investing activities
Proceeds from sales of marketable securities
Purchase of tangible assets
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments for asset retirement obligations
Additional purchase of subsidiaries’ shares
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
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
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

21

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

209
(11,645)
(66)
(702)
177
(21)
(24)

(2,048)

-

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

(7)
9
(991)
230
(53)
(12,887)

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

10,700(2,654)
990
(824)
(487)
(11)
7,712

251

(2)

3,539
13,758509
17,35456-

17,354

17,863

(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
Best Hospitality Network Corporation
Best Global, Inc.
Ecpark Pte. Ltd.
FAJA Co., Ltd.
RAJA Co., Ltd.
Best Hospitality LLC
Among the above-listed subsidiaries, Best Hospitality LLC was newly established in thefiscal year under review, and has consequently been added to the scope of consolidation.
Retreat Co., Ltd., a consolidated subsidiary in the previous fiscal year ended December
2014, has been merged into RAJA Co., Ltd. during the fiscal year under review, and has
therefore been excluded from the scope of consolidation.
(2) Name of principal non-consolidated subsidiaries:
Non-consolidated subsidiaries
Life Create Bank, Inc.
Best Bridal Singapore Pte. Ltd.
Best Resort LLC
BT KALAKAUA, LLC(Reason for excluding these subsidiaries from consolidation)
These non-consolidated subsidiaries have been excluded from consolidation, because they
are all immaterial and their net income/loss for the year ended December 31, 2015
(amounts proportionate to the Company’s equity interest), and retained earnings (amounts
proportionate to the Company’s equity interest) have no significant impact on the
Company’s consolidated financial statements.
2. Application of equity method(1) Number of equity method affiliates:
Not applicable22(2) The equity method is not applied to some non-consolidated subsidiaries (Life Create Bank,
Inc. and Best Bridal Singapore Pte. Ltd., Best Resort LLC, KALAKUA, LLC) and an affiliate(Marizin Inc.), because they are of minor importance in terms of the bearing of net
income/loss (amounts proportionate to the Company’s equity interest) and retained earnings(amounts proportionate to the Company’s equity interest) on the consolidated financial
statements for the fiscal year ended December 31, 2015, 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
However, some consolidated subsidiaries employ the straight-line method, and thebuildings (excluding attached structures) acquired on or after April 1, 1998, are depreciatedwith the straight-line method.

23

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)
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 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) Attribution method for projected retirement benefits
In calculating retirement benefit obligations, the projected unit credit method has been used
for determining how much projected retirement benefits is attributable to the period till theend of the fiscal year ended December 31, 2015.
2) Use of simplified valuation method
In preparation for the future payment of the retirement benefit obligations for the employees,
the Company and some of its consolidated subsidiaries record estimates based on the
projected retirement benefits at the end of the fiscal year ended December 31, 2015.
(5) Standards for translating significant assets or liabilities denominated in foreign currencies into
Japanese yen
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 accounting24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, currency swap
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 March 26, 2015) have been applied, effective from the fiscal
year ended December 31, 2015, with regard to provisions set forth in the text of Article 35 of the
Accounting Standard for Retirement Benefits and Article 67 of the Guidance on AccountingStandard for Retirement Benefits. Accordingly, the methods for calculating retirement benefit
obligations and service costs, as well as the method of determining the discount rate, have beenrevised, and the attribution method for projected retirement benefits to periods has beenchanged from the straight-line basis to the benefit formula basis.
There is no effect of this change on net defined benefit liabilities, retained earnings and profit andloss accounts, as of at the beginning of the consolidated fiscal year ended December 31, 2015.

25

(Segment and Other Information)
Segment Information
1. Overview of reportable segment
The 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 theCompany’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 drinking and eating and services at wedding banquets, dress rental andbeauty care services. “Hotel business” offers the management of hotel weddings and banquets,
and provision of hotel accommodation services at Hotel InterContinental Tokyo Bay, The Strings
by InterContinental Tokyo, Sir Winston Hotel, and The Strings Hotel Nagoya (opened in January,2016). “Overseas business” consists mainly of management of wedding venues and operationof weddings and banquet in Hawaii and Bali Indonesia, for customers who order through theGroup’s sales salons in Japan. The segment also subleases wedding venues to an affiliate inSouth Korea. “W&R business (Wellness and Relaxation business)” operates, at 40 outlets
across Japan, a British-style reflexology salon, “Queensway” with a high level of skills andsophisticated know-how of attending to customers.
Effective from the fiscal year ended December 31, 2015, Sir Winston Hotel (Yagoto Outlet)
and The Strings Hotel Nagoya (Mei-Eki or formerly Sasashima Outlet), which used to belong to
the “Domestic Wedding business,” segment, have now been included in the “Hotel business”
segment, in accordance with the policy of segmentation change to enable a more appropriate
assessment and management of the performance of each reportable segment.
As a result, compared with the former segmentation, net sales of the “Hotel business”
increased by ¥2,162 million and its segment income decreased by ¥446 million, while net salesof the “Domestic Wedding business” dropped by ¥2,162 million with its segment income
growing by ¥446 million in the fiscal year ended December 31, 2015.
The segment information for the previous year ended December 31, 2014 has thus been
readjusted and restated reflecting the segmentation change.
2. Calculation of net sales, income/loss, assets, liabilities, and other items by reportable segment
Accounting methods applied in the reportable business segments largely correspond to thosepresented under “Basis for Preparation of Consolidated Financial Statements.”
Reportable segment income is based on operating income.
Inter-segment sales or transfers are based on market price.

26

3. Net sales, income/loss, assets, liabilities, and other items by reportable segment
Year ended December 31, 2014 (January 1 to December 31, 2014)(millions of yen)

Reportable segment

Amountrecorded on

Domestic
weddingbusinessHotelbusiness

Overseasbusiness

W&R
business

Adjustments

Total

consolidated(note 1)

financialstatements(note 2)

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

35,023

12,462

3,458

747

51,691-

51,691

775

186

0

-

961

(961)

-

Total

35,79812,6483,458

747

52,653(961)

51,691

Segment income (loss)

7,059

520

173

45

7,799

(1,392)

6,406

Segment assets

29,19912,612

3,475

3,769

49,057

18,211

67,269

2,069
-

431
128

149
-

17
34

2,668
162

28
-

2,696
162

7,074

2,440

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 adjustment for segment income includes ¥43 million elimination ofinter-segment sales and minus ¥1,435 million of unallocated corporate expenses. The main componentof these unallocated corporate expenses is SG&A expenses that are not attributable to reportablesegments.
(2) The ¥18,211 million adjustment for segment assets comprises unallocated corporate assets. Unallocatedcorporate assets consist mainly of cash and deposits held by the Company which are not attributable toreportable segments.
(3) The ¥28 million adjustment for depreciation/amortization comprises depreciation/amortization for
unallocated corporate assets.
(4) The ¥32 million 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.

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Year ended December 31, 2015 (January 1 to December 31, 2015)(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

33,427

13,946

3,475

2,954

53,804-53,804

935

253

1

-

1,190

(1,190)-Total

34,363

14,199

3,477

2,954

54,994(1,190)53,804

Segment income (loss)

6,320

431

79

110

6,941

(1,549)5,392

Segment assets

29,332

21,075

7,144

4,003

61,555

18,77280,327

1,949
-

542
128

143
24

79
138

2,714
291

49
-

2,763
291

941

8,391

4,194

637

14,16578

14,243

Other items
Depreciation/amortization
Amortization of goodwill
Increase(decrease) intangible and intangible
assets
Notes: 1. Details of adjustments are as follows:(1) The minus ¥1,549 million adjustment for segment income includes ¥20 million elimination ofinter-segment sales and minus ¥1,569 million of unallocated corporate expenses. The main componentof these unallocated corporate expenses is SG&A expenses that are not attributable to reportablesegments.
(2) The ¥18,772 million 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 ¥49 million adjustment for depreciation/amortization comprises depreciation/amortization for
unallocated corporate assets.
(4) The ¥78 million 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.

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(Per Share Information)
Year ended December 31, 2014
Year ended December 31, 2015
Net assets per share
587.99 yen Net assets per share
651.42 yen
Net income per share
87.95 yen Net income per share
79.48 yen
Diluted net income per share
78.52 yen Diluted net income per share
70.95 yen
Note: Calculation base for net income per share and for diluted net income per share is asfollows:

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)
Of which convertible bond with stock acquisitionrights (shares)

Residual securities that are not dilutive and notincluded in the calculation for diluted net income
per share(Significant Subsequent Events)
Not applicable

29

Year ended
December 31, 2014

Year ended
December 31, 2015

4,294

3,880

-

-

4,294

3,880

48,828,484

48,828,466--

5,868,544

5,868,544

5,868,544

5,868,544--

5. 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, 2014

Year ended December 31, 2015

Number of weddings held (cases)

Number of weddings held (cases)

9,873

9,578

Hotel business

1,133

1,344

Overseas business

3,025

2,602

Total

14,031

13,524

Segment
Domestic wedding
business

Note: Classification of reportable segments has been changed effective from the fiscal year ended
December 31, 2015. The figures for the previous fiscal year ended December 31, 2014, havebeen readjusted to the new reportable segments.

2) Wedding orders received
Year ended December 31, 2014
Segment

Year ended December 31, 2015

Orders received

Order backlog

Orders received

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

9,779

5,288

9,219

4,929

Hotel business

1,304

845

1,840

1,341

Overseas business

2,922

1,374

2,216

988

Total

14,005

7,507

13,275

7,258

Note: Classification of reportable segments has been changed effective from the fiscal year ended
December 31, 2015. The figures for the previous fiscal year ended December 31, 2014, havebeen readjusted to the new reportable segments.

3) Sales volume
Segment
Domestic wedding
businessYear ended December 31, 2014

Year ended December 31, 2015

Millions of yen

Millions of yen
35,02333,427

Hotel business

12,462

13,946

Overseas business

3,458

3,475

W&R business

747

2,954

Total

51,69153,804

Notes: 1. Classification of reportable segments has been changed effective from the fiscal year ended
December 31, 2015. The figures for the previous fiscal year ended December 31, 2014,
have been readjusted to the new reportable segments.

30

2. Inter-segment transactions have been eliminated from the amounts shown above.
3. The above amounts do not include consumption tax.

31