Summary of Financial Statements
for Fiscal Year Ended March 31, 2020 [Japanese GAAP](Consolidated)
May 12, 2020
Name of listed company:

SHIP HEALTHCARE HOLDINGS, INC.
Shares listed on: Tokyo Stock Exchange
Code:
3360
URL
https://www.shiphd.co.jp/
Representative:(Title) Chairman and CEO(Name) Kunihisa Furukawa
Contact:(Title) Executive Director(Name) Hiroshi YokoyamaTel.: +81-6-6369-0130
Scheduled date for regular general meeting of shareholders: June 26, 2020
Scheduled start date for dividend payments: June 29, 2020
Scheduled date for filing securities report: June 26, 2020
Supplementary briefing materials on results:
Y
Briefing on results:
N(All figures are rounded down to the nearest million yen.)

1. Consolidated financial results for the fiscal year ending March 31, 2020
(April 1, 2019–March 31, 2020)(1) Consolidated operating results(Percentages represent year-on-year changes.)

Net sales

Operating profit(Millions yen)%

(Millions yen)%

(Millions yen)%

(Millions yen)%

19,931
18,5327.6(2.1)

11,803
11,2365.0
8.6

FY ended March 2020
484,395
9.1
18,794
4.7
FY ended March 2019
444,048
4.3
17,952(1.7)
Note: Comprehensive income: FY ended March 2020: ¥10,638 million ((8.8)%);FY ended March 2019: ¥11,666 million (3.2%)
Net income per
Diluted net
Return on
income per shareequityshare(Yen)Profit attributable toowners of parent

Ordinary profit(Yen)

Return on
assets%Operating margin%%

FY ended March 2020
248.03225.2412.0
6.6
FY ended March 2019
227.75221.11
11.5
6.3
Reference: Share of profit (loss) of entities accounted for using equity method: FY ended March 31, 2020: ¥38 million;
FY ended March 31, 2019: ¥67 million

3.9
4.0

(2) Consolidated financial condition
Total assets

Net assets(Millions yen)

Equity capital ratio(Millions yen)

Net assets per share
%

(Yen)

FY ended March 2020
308,873
104,68133.0
FY ended March 2019299,21297,734
31.9
Reference: Equity: FY ended March 2020: ¥101,784 million; FY ended March 2019: ¥95,420 million

2,146.71
2,003.36(3) Consolidated cash flows
Cash and cash
equivalents at end of
periodNet cash from operating Net cash from investing Net cash from financing
activities
activities
activities
FY ended March 2020
FY ended March 2019

(Millions yen)

(Millions yen)

(Millions yen)

(Millions yen)

24,01010,534(4,264)(7,678)(8,416)
9,828

82,81071,494

2. Dividends
Annual dividends
End Q2End Q3Year-end

End Q1
FY ended March 2019
FY ended March 2020
FY ending March 2021
(forecast)

Total

Total annual
dividends

(Yen)

(Yen)

(Yen)

(Yen)

(Yen)

(Millions yen)

–
–

0.00
0.00

–
–

70.00
75.00

70.00
75.00

3,334
3,556

–

0.00

–

77.00

77.00

Dividends to net
assets(consolidated)%%

Payout ratio(consolidated)

30.7
30.2
30.2

3.5
3.6

3. Forecast of consolidated financial results for fiscal year ending March 31, 2021 (April 1, 2020–March 31,
2021)(Percentages represent changes from previous year for full-year figures and year-on-year changes for quarterly figures.)
Profit attributable to Net income per
Net sales
Operating profit
Ordinary profit
owners of parent
share
Cumulative throughsecond quarter
Full-year(Millions yen)%

(Millions yen)%

(Millions yen)%

(Millions yen)

%

(Yen)

240,000

(0.9)

6,900

(31.6)

6,900(37.3)

4,000(40.2)

84.36

500,000

3.2

21,00011.7

21,0005.4

12,1002.5

255.20Notes(1) Changes affecting significant subsidiaries during period under review (changes affecting
specific subsidiaries accompanied by changes affecting the scope of consolidation):

None(2) Changes made in accounting policies, accounting estimates, and/or restatements(i) Changes in accounting policies associated with changes in accounting standards, etc.:(ii) Any changes in accounting policies other than those under (i) above:(iii) Changes in accounting estimates:(iv) Restatements:

None
None
None
None

(3) Number of shares issued and outstanding (common shares)(i) Number of shares issued and outstanding at
FY ended Marchthe end of the period (including treasury
2020
shares)(ii) Number of treasury shares at the end of the FY ended March
2020
period(iii) Average number of shares during the
FY ended March
2020
period50,834,700 shares

FY ended March
2019

50,834,700 shares

3,420,627 shares

FY ended March
2019

3,204,535 shares

47,587,591 shares

FY ended March
2019

49,335,752 shares

Reference: Overview of non-consolidated financial results
1. Non-consolidated financial results for fiscal year ended March 31, 2020 (April 1, 2019–March 31, 2020)(1) Non-consolidated operating results
Net sales
FY ended March 2020
FY ended March 2019

(Percentages represent year-on-year changes.)
Ordinary profit
Net income

Operating profit(Millions yen)%

(Millions yen)%

(Millions yen)%

(Millions yen)

%

7,191
7,046

2.1
8.3

5,764
5,884

(2.0)
9.6

5,785
5,856

(1.2)
10.1

5,642
5,745

(1.8)
10.7

Net income per share
FY ended March 2020
FY ended March 2019

Diluted net income per
share

(Yen)

(Yen)

118.56116.46107.49113.01(2) Non-consolidated financial condition
Total assets
FY ended March 2020
FY ended March 2019

Net assets

Equity capital ratio

Net assets per share(Millions yen)

(Millions yen)

%

(Yen)

80,38881,15645,63845,23256.8
55.7

962.56
949.65

Reference: Equity: FY ended March 31, 2020: ¥45,638 million; FY ended March 31, 2019: ¥45,232 million* This summary of financial statements is not subject to audits by a certified public accountant or audit firm.
* Information on appropriate use of financial forecasts and other special notes• The forecasts of financial results and other forward-looking statements provided herein are based on information available at the time thisdocument was prepared and certain assumptions considered reasonable. Actual results may differ significantly from forecasts due to various
factors. For assumptions underlying forecasts of financial results, notes on use of forecasts of financial results, and other related information, see“Future outlook” on page 5 of the Annexed Materials.
The Company is a holding company and the bulk of its revenue consists of dividends received from subsidiaries and revenues from theiroperating costs. Detailed information on non-consolidated financial forecasts is omitted since information is not important for investment
information and business indicators.
• Due to the epidemic of COVID-19, we have decided to cancel the financial results briefing for the year ending March 31, 2020 (for institutional

investors and analysts), which was planned to be conducted on May 15, 2020, as a result of considering the health and safety of our stakeholders
and participants.

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

 Index of attached materials

1.

Qualitative information on business results ...................................................................................................... 2(1)

Description of business results ................................................................................................................ 2(2)

Analysis of financial position .................................................................................................................. 3(3)

Analysis of cash flows ............................................................................................................................. 4(4)

Future outlook ......................................................................................................................................... 5

2.

Basic approach in selecting accounting standards ............................................................................................ 53.

Consolidated financial statements and notes thereto ........................................................................................ 6(1)

Consolidated balance sheet ...................................................................................................................... 6(2)

Consolidated statement of income and consolidated statement of comprehensive income ..................... 8(3)

Consolidated statement of changes in equity ..........................................................................................11(4)

Consolidated statement of cash flows .................................................................................................... 13(5)

Notes on consolidated financial statements ........................................................................................... 15(Notes on the going concern assumption) .............................................................................................. 15(Change of presentation method ) .......................................................................................................... 15(Segment information, etc.) ................................................................................................................... 15(Per-share information) .......................................................................................................................... 20(Important subsequent information)....................................................................................................... 21

1

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

1. Qualitative information on business results(1) Description of business results
The Japanese economy maintained a course of gentle recovery during the first half of the current consolidated fiscal year,with improved employment conditions and steady growth in personal income, both backed by strong corporate earnings.
In the second half of the year, however, there was stagnation in personal consumption due to the consumption tax increase
and prolonged trade friction between the United States and China. Since November 2019, the global spread of COVID-19,
the first case of which has been confirmed in Wuhan, China, has caused various social and economic impacts, and theglobal economy has been sharply slumped.
Within the healthcare industry in which the Group operates, the revised medical service fees that went into effect in Aprilof this year focuses on reduction of the burden on medical staff and promotion of work style reforms for doctors etc., andits basic viewpoints are the differentiation, strengthening, and cooperation of medical functions, and also promotion ofcomprehensive community healthcare system. Medical institutions and companies in the industry are required to build
wide-ranging cooperation and efficient business systems over the medium to long term. Meanwhile, due to the spread of
COVID-19, we are now facing the danger of collapse of the medical system in Japan as well, and serious shortage of
medical facilities, equipment, and medical materials for controlling infectious diseases such as intensive care beds,
ventilators, and medical masks and gowns, etc.
Under these economic conditions, the Group's business partly performed poorly on manufacturer companies and newly
invested projects, however, projects were recorded as initially planned. Medical Supply business also made steady growth
driven by the efforts to acquire new projects.
During this consolidated fiscal year, the various factors noted above resulted in net sales of 484,395 million yen (up 9.1%
YoY), operating profits of 18,794 million yen (up 4.7% YoY), ordinary profits of 19,931 million yen (up 7.6% YoY), andprofits attributable to owners of parent of 11,803 million yen (up 5.0% YoY).
Business results by segment are summarized below.
(i) Total Pack Produce businessIn the Total Pack Produce business, sales of large-scale project projects were recorded in the first half of the year,
which was unprecedented every year, and was affected by the last-minute demand due to the consumption tax
increase and a decline in reaction, particularly for manufacturers. In heavy ion beam cancer treatment facilities,
although the treatment opportunities are increasing as medical insurance coverage has been applied to some cancer
treatments including prostate cancer, the percentage of treatments with treatment unit prices that are significantly
lower than initially expected was increased.
As a result, this segment recorded net sales of 100,688 million yen (up 1.3% YoY) and segment profit (operating
profit) of 9,620 million yen (down 1.8% YoY).
(ii) Medical Supply business
The Medical Supply business recorded strong performance, thanks to the efforts to acquire new projects centered on
specialty materials and to improve the operational efficiency in SPD facilities.
As a result, this segment recorded net sales of 325,664 million yen (up 12.2% YoY) and segment profit (operating
profit) of 5,035 million yen (up 20.1% YoY).
(iii) Life Care business
The Life Care business recorded steady growth as a result of maintaining a high occupancy rate.
As a result, this segment recorded net sales of 23,929 million yen (up 1.8% YoY) and segment profit (operating
profit) of 1,770 million yen (up 8.9% YoY).
(iv) Dispensing Pharmacy business
The Dispensing Pharmacy business performed steadily as a result of small-scale M&A activities and continuous
improvement measures to promote management efficiency.
As a result, this segment recorded net sales of 27,050 million yen (up 5.7% YoY) and segment profit (operating
profit) of 2,661 million yen (up 21.4% YoY).
(v) Other businesses
In other businesses, the operation of veterinary hospitals and the security support company performed largely asplanned, and the performance of the newly integrated building management company contributed.
As a result, this segment recorded net sales of 7,062 million yen (up 36.9% YoY) and segment profit (operating
profit) of 449 million yen (up 6.8% YoY).

2

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(2) Analysis of financial position(i) Current assets
The balance of current assets at the end of this consolidated fiscal year stood at 210,499 million yen (vs. a balance of
201,571 million yen at the end of the previous consolidated fiscal year), an increase of 8,927 million yen since theend of the previous consolidated fiscal year.
Major reasons included increases of 6,324 million yen in cash and deposits and 5,040 million yen in securities,
despite a decrease of 2,351 million yen in notes and accounts receivable – trade.
(ii) Non-current assets
The balance of non-current assets at the end of this consolidated fiscal year stood at 98,373 million yen (vs. a balanceof 97,640 million yen at the end of the previous consolidated fiscal year), an increase of 733 million yen since the endof the previous consolidated fiscal year.
Major reasons included increases of 1,648 million yen in land and 2,437 million yen in construction in progress,
despite decreases of 1,995 million yen in real estate for rent, net and 1,721 million yen in long-term loan receivable.
(iii) Current liabilities
The balance of current liabilities at the end of this consolidated fiscal year stood at 133,115 million yen (vs. a balanceof 128,176 million yen at the end of the previous consolidated fiscal year), an increase of 4,938 million yen since theend of the previous consolidated fiscal year.
Major reasons included increases of 4,750 million yen in notes and accounts payable – trade and 260 million yen inincome taxes payable, despite a decrease of 1,173 million yen in electronically recorded obligations – operating.
(iv) Non-current liabilities
The balance of non-current liabilities at the end of this consolidated fiscal year stood at 71,076 million yen (vs. abalance of 73,300 million yen at the end of the previous consolidated fiscal year), a decrease of 2,224 million yen
since the end of the previous consolidated fiscal year.
Major reasons included a decrease of 2,712 million yen in long-term loans payable.
(v) Net assets
The balance of net assets at the end of this consolidated fiscal year stood at 104,681 million yen (vs. a balance of
97,734 million yen at the end of the previous consolidated fiscal year), an increase of 6,946 million yen since the endof the previous consolidated fiscal year.
Major reasons included an increase 11,803 million yen in retained earnings from profit attributable to owners ofparent, despite 1,000 million yen in acquisition of treasury stock, and decreases of 3,334 million yen in retained
earnings due to payment of dividends and 1,059 million yen in valuation differences on available-for-sale securities.

3

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(3) Analysis of cash flows
The balance of cash and cash equivalents at the end of this consolidated fiscal year stood at 82,810 million yen, up 11,316
million yen from the balance of 71,494 million yen at the end of the previous consolidated fiscal year.
(i) Cash flow from operating activities
Cash flow from operating activities was 24,010 million yen (up 13,476 million yen compared to the previous
consolidated fiscal year). Major contributing factors included the recording of 19,870 million yen in profit before
income taxes and 3,135 million yen in depreciation expenses, and an increase of 3,092 million yen in notes andaccounts payable – trade and a decrease of 2,768 million yen in notes and accounts receivable – trade, despite
payment of 7,705 million yen in income taxes.
(ii) Cash flow from investing activities
Cash flow used in investing activities was 4,264 million yen (down 3,413 million yen compared to the previous
consolidated fiscal year). Major contributing factors included expenditures of 3,544 million yen on purchase ofproperty, 1,375 million yen on purchase of investment securities, and 1,003 million yen on purchase of shares ofsubsidiaries resulting in change in scope of consolidation, despite proceeds of 1,763 million yen from collection
long-term loans receivable.
(iii) Cash flow from financing activities
Cash flow provided in financing activities was 8,416 million yen (for an increase in proceeds of 18,245 million yen
compared to the previous consolidated fiscal year). Major contributing factors included expenditures of 5,871 million
yen on repayment of long-term loans, 3,334 million yen on dividend payments, and 1,000 million yen on acquisitionof treasury stock, despite a proceeds of 1,871 million yen from long-term loans payable.
Reference: Trends in cash flow indices
FY ended
March 2016
Equity capital ratio (%)

37.1

FY ended
March 2017

FY ended
March 201834.7

Mark-to-market equity
64.1
56.9
capital ratio (%)
Years of debt redemption
2.3
3.1(years)Interest coverage ratio
57.3
53.3
(times)* Equity capital ratio = equity capital/total assets
Mark-to-market equity capital ratio = total market capitalization/total assets
Years of debt redemption = interest-bearing debt/operating cash flows
Interest coverage ratio = operating cash flows/interest paid

FY ended
March 2019

FY ended
March 2020

35.0

31.9

33.0

66.5

72.3

67.9

2.3

6.9

2.9

80.6

40.9

89.4

Notes:
1. All indices are calculated from consolidated-basis financial data.
2. Total market capitalization is calculated by multiplying the closing stock price at the end of the fiscal year by total numberof shares issued and outstanding (after subtracting treasury stock) as of the end of the fiscal year.
3. Calculations of operating cash flows are based on cash flows from operating activities on the Consolidated Cash Flow
Statement. Interest-bearing debt consists of all debt on the Consolidated Balance Sheet for which interest is paid. The
amount of interest paid is based on interest paid as shown on the Consolidated Cash Flow Statement.

4

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(4) Future outlook
As the baby boom generation ages and low birth rates continue, projections indicate Japan will continue to see restraints
on remuneration for medical and nursing care costs, and reductions in their price. In addition, since the enactment of the
Act for Securing Comprehensive Medical and Long-term Care in the Community, progress is being made to develop
comprehensive community care systems through continuing reforms in the structure of providing medical care, withcompletion envisioned for 2025.
Given these conditions and drawing on advanced capabilities in delivering integrated and optimal solutions in medicine,
healthcare, welfare, nursing care, and services, the Group will seek to contribute to society by meeting a wide range ofneeds based on the SHIP philosophy and Group mission to create environments for those seeking to save lives.
The Group has formulated “SHIP VISION 2020,” its medium-term management plan for the fiscal years 2018–2020
ending in March 2021, the final year of the plan.
Though in the FY ending March 2021, the plan’s final year, the Group’s heavy ion radiotherapy facility and the hospitalmanagement business in Bangladesh commenced full-fledged operations, some delays are expected due to the pandemicof COVID-19. However, the Group’s medium-term plan still calls for record highs in both net sales and operating profit,
the specific targets are 500 billion yen and 21 billion yen, respectively.
The business performance projected for the next fiscal year (FY ending March 2021) is summarized below.
<Projected consolidated results>
FY ending March 2021 (projected)
Profit margin

YoY change(Unit: Millions yen, %)FY ended March 2020 (actual)
Profit margin

Net sales

500,000–

3.2

484,395–

Operating profit

21,0004.2

11.7

18,794

3.9

Ordinary profit

21,0004.2

5.4

19,931

4.1

11,803

2.4

Profit attributable to owners
12,1002.4
2.5
of patent
The projected amount of (year-end) dividends per share in FY ending March 2021 is 75 yen.

2. Basic approach in selecting accounting standards
To facilitate comparisons from period to period and between entities, the Group for the time being will continue to prepare
its consolidated financial statements based on J-GAAP.
The Group will duly address the application of International Financial Reporting Standards (IFRS) after taking into accountvarious circumstances both in Japan and abroad.

5

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

3. Consolidated financial statements and notes thereto(1) Consolidated balance sheet(Unit: Millions yen)March 31, 2020

March 31, 2019
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating
Lease investment assets
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Short-term loans
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant, and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Assets for rent
Accumulated depreciation
Assets for rent, net
Real estate for rent
Accumulated depreciation
Real estate for rent, net
Construction in progress
Other
Accumulated depreciation
Other, net
Total property, plant, and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans
Net defined benefit assets
Deferred tax assets
Claims provable in bankruptcy, claims provable in rehabilitation and other

Guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

6

72,393
97,975
3,232
3,801
61
14,034
1,471
648
1,770
6,278
(95)
201,571

78,717
95,623
3,611
3,500
5,101
14,029
1,511
845
1,790
5,839
(71)
210,499

31,735(12,828)
18,9075,890(1,252)
4,637
14,451
681
(566)
114
16,594(3,385)
13,2091,235
9,259(7,163)
2,095
54,65232,569(14,035)
18,534
6,515(2,108)
4,406
16,100649(570)
78
14,703(3,489)
11,213
3,673
10,862(7,854)
3,008
57,0149,304
1,029
10,333

8,548
972
9,520

14,683
9,531
1,060
3,188
452
5,512
848
(2,624)32,654
97,640299,212

14,535
7,810
1,131
3,435
68
5,571
1,002
(1,716)
31,83898,373308,873SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(Unit: Millions yen)March 31, 2020

March 31, 2019
Liabilities
Current liabilities
Notes and accounts payable - trade85,371

90,121

Electronically recorded obligations - operating

20,772

19,598

Short-term loans

1,030

935

Current portion of long-term loans

4,968

4,555

Income taxes payable

4,139

4,400

Provision for bonuses

2,032

2,194

Other

9,861

11,308128,176

133,115

Bonds with share acquisition rights

25,11625,091Long-term loans

39,70036,987

Net defined benefit liability

2,811

2,873

Deferred tax liabilities

1,070

919

Total current liabilities
Non-current liabilities

Asset retirement obligations
Other
Total non-current liabilities

628

838

3,973

4,365

73,30071,076

201,477

204,191

Capital stock

15,553

15,553

Capital surplus

23,921

23,895

Total liabilities
Net assets
Shareholders' equity

Retained earnings

66,372

74,841

Treasury stock(13,447)(14,447)

Total shareholders' equity

92,39999,841

3,079

2,019

(84)

(152)

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

7

26

75

3,021

1,942

2,314

2,897

97,734

104,681299,212308,873SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income
Fiscal year ended
March 31, 2019
444,048(Unit: Millions yen)
Fiscal year ended
March 31, 2020
484,395

Cost of sales

397,396434,768

Gross profit

46,652

49,627

Net sales

Sales, general, and administrative expenses
Directors’ compensation

1,435

1,418

Salaries and allowances

9,327

10,231

Bonuses

1,338

1,355

453

448

Retirement benefit expenses
Provision for bonuses

884

963

Other

15,26016,415

Total sales, general, and administrative expenses

28,69930,832

17,952

18,794

Interest income

306

391

Dividend income

206

288

Amortization of negative goodwill

232

116

Share of profit of entities accounted for using equity method

67

38

Reversal of allowance for doubtful accounts–

380

Operating profit
Non-operating profit

9

–

289

287

1,112

1,502

Interest expenses

258

268

Bond issue cost37–

Foreign exchange losses–

27

Provision of allowance for doubtful accounts

139–

Losses on sales of accounts receivable

18

–

Other

79

69

Total non-operating expenses

532

365

18,532

19,931

Foreign exchange profit
Other
Total non-operating profit
Non-operating expenses

Total ordinary profit

8

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(Unit: Millions yen)
Fiscal year ended
March 31, 2020

Fiscal year ended
March 31, 2019
Extraordinary profit
Gains on sales of property, plant, and equipment

61

193

Other

–

0

Total extraordinary profit

61

194

Losses on sales of property, plant, and equipment

04

Losses on retirement of property, plant, and equipment

19

14

Losses on valuation of investment securities

34

78

Impairment loss

44

152

Other

3

6

Extraordinary losses

Total extraordinary losses

102

255

Total income before income taxes

18,49019,870

Income taxes - current

7,015

7,962

Income taxes - deferred

392

79

Total income taxes

7,407

8,041

Profit11,083

11,828(152)

25

11,236

11,803

Profit attributable to non-controlling interests
Profit attributable to owners of parent

9

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

Consolidated statement of comprehensive income
Fiscal year ended
March 31, 201911,083(Unit: Millions yen)
Fiscal year ended
March 31, 202011,828Valuation difference on available-for-sale securities

482(1,059)Foreign currency translation adjustment

22

(179)

Remeasurements of defined benefit plans

78

49

Other comprehensive income

583(1,190)11,666

10,63811,805

10,676

(139)

(38)

Net income
Other comprehensive income

Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

10SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(3) Consolidated statement of changes in equity
Previous consolidated fiscal year (April 1, 2018–March 31, 2019)(Unit: Millions yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

15,553Retained earnings

23,94858,374

Treasury stock(448)

Total shareholders’equity97,428Changes of items during period
Dividends of surplus(3,238)(3,238)

Profit attributable toowners of parent

11,236

11,236

Purchase of treasury stock(12,999)

Capital increases by
consolidated subsidiaries(27)(12,999)(27)

Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period

–

(27)

7,997

(12,999)(5,029)15,55323,921

66,372(13,447)

92,399

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities

Balance at beginning of current
period2,596

Foreign currencytranslation
adjustments

Remeasurements of Total accumulated
defined benefit
other comprehensive
plansincome

(92)

(52)

2,451

Non-controllinginterests

2,474

Total net assets

102,354

Changes of items during period
Dividends of surplus(3,238)

Profit attributable toowners of parent

11,236

Purchase of treasury stock(12,999)

Capital increases by
consolidated subsidiaries(27)

Net changes of items otherthan shareholders’ equity

482

8

78

569

(160)

409

Total changes of items during
period

482

8

78

569

(160)

(4,620)

3,079

(84)

26

3,021

2,314

97,734

Balance at end of current
period11

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

This consolidated fiscal year (April 1, 2019–March 31, 2020)(Unit: Millions yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

15,553Retained earnings

23,921

66,372

Treasury stock(13,447)

Total shareholders’equity92,399Changes of items during period
Dividends of surplus(3,334)(3,334)

Profit attributable toowners of parent

11,803

11,803Purchase of treasury stock(1,000)Capital increases by
consolidated subsidiaries(26)(1,000)(26)

Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period

–

(26)

8,469

(1,000)7,442

15,55323,89574,841(14,447)

99,841

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities

Balance at beginning of current
period3,079

Foreign currencytranslation
adjustments

Remeasurements of Total accumulated
defined benefit
other comprehensive
plansincome

(84)

26

3,021

Non-controllinginterests

2,314

Total net assets

97,734

Changes of items during period
Dividends of surplus(3,334)

Profit attributable toowners of parent

11,803Purchase of treasury stock(1,000)Capital increases by
consolidated subsidiaries(26)

Net changes of items otherthan shareholders’ equity(1,059)(68)

49(1,078)

582

(495)

Total changes of items during
period

(1,059)(68)

49(1,078)

582

6,946

Balance at end of current
period

2,019

(152)

75

1,942

2,897

104,68112

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(4) Consolidated statement of cash flows(Unit: Millions yen)
Fiscal year ended
March 31, 2020

Fiscal year ended
March 31, 2019
Cash flows from operating activities
Income before income taxes

18,49019,870Depreciation and amortization

2,842

3,135

Impairment loss

44

152

Amortization of goodwill

1,661

1,718

Amortization of negative goodwill

(232)

(116)

Share of loss (profit) of entities accounted for using equity method

(67)

(38)

Increase (decrease) in provision for bonuses

63

153

Increase (decrease) in allowance for doubtful accounts

96

(558)

Net decrease (increase) in lease investment assets

72

300

Increase (decrease) in net defined benefit liability

182

73

Loss (gain) on sales of property, plant and equipment

(60)

(189)

Loss on retirement of property, plant and equipment

18

10

Loss on retirement of intangible assets

03

Loss (gain) on valuation of investment securities

34

78

Interest and dividend income

(513)

(680)

Interest expenses

258

268

Decrease (increase) in notes and accounts receivable – trade

1,329

2,768

Decrease (increase) in inventories(1,196)18

Increase (decrease) in notes and accounts payable – trade(4,367)

3,092

Other

(626)

1,246

Subtotal

18,03431,309503

674Interest and dividend income received
Interest expenses paid

(257)

(268)

Income taxes paid

(7,745)(7,705)

Cash flows from operating activities

10,53424,01013

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(Unit: Millions yen)
Fiscal year ended
March 31, 2020

Fiscal year ended
March 31, 2019
Cash flows from investing activities
Payments into time deposits

(238)

(219)

Proceeds from withdrawal of time deposits

186

172

Purchase of property, plant, and equipment(2,767)(3,544)

Proceeds from sales of property, plant, and equipment

1,618

479

Purchase of intangible assets

(252)

(268)

Payments of short-term loans receivable

(584)

(620)

Collection of short-term loans receivable

226

240

Payments of long-term loans receivable

(1)

(11)

Collection of long-term loans receivable

310

1,763

(6,097)(1,375)

0

–

(78)

(1,003)

–

117

1

6

(7,678)(4,264)(1,940)(495)

Purchase of investment securities
Proceeds from sales and redemption of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Proceeds from purchase of shares of subsidiaries resulting
in change in scope of consolidation
Other
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

8,000

1,871

Repayments of long-term loans payable(4,771)(5,871)

Proceeds from issue of bonds with share acquisition rights

25,087–Purchase of treasury stock(12,999)(1,000)Cash dividends paid

(3,238)(3,334)

Dividends paid to non-controlling interests

(48)

(90)

Proceeds from share issuance to non-controlling shareholders

－

731

(252)

(227)

(7)

–

9,828

(8,416)

21(13)

Net increase (decrease) in cash and cash equivalents

12,706

11,316

Cash and cash equivalents at the beginning of the period

58,78771,494

Cash and cash equivalents at the end of the period

71,49482,810

Repayments of lease obligations
Other
Cash flows from financing activities
Effect of exchange rate change on cash and cash equivalents

14

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(5) Notes on consolidated financial statements(Notes on the going concern assumption)
Not applicable(Changes in presentation)(Consolidated balance sheet)“Securities” included in “Other” of “Current assets” in the previous consolidated fiscal year is listed independently in thecurrent consolidated balance sheet due to their its increased importance.

(Segment information, etc.)[Segment information]
1

Overview of reporting segments
The Company’s reporting segments are Company components for which separate financial information is available andsubject to periodic review by the Board of Directors in determining the allocation of management resources and evaluating
business performance.
The Company classifies its business divisions by service. The Company formulates comprehensive strategies reflecting thenature of the activities of each business division and subsidiary and undertakes business activities based on these strategies.
Accordingly, the Company organizes its segments based on its business divisions. Its four reporting segments are the Total
Pack Produce business, the Medical Supply business, the Life Care business, and the Dispensing Pharmacy business.
The Total Pack Produce segment engages in sales of medical devices and medical equipment based on bulk orders;consulting on topics including medicine, healthcare, welfare, and nursing care facilities; and leasing of real estate to medical
facilities and other tenants. The Medical Supply segment engages in sales of medical examination and treatment materials
and special treatment materials. The Life Care segment operates homes for senior citizens, group homes, and other facilities
and nutritional services. The Dispensing Pharmacy segment operates dispensing pharmacies, among other business activities.

2

Methods for calculating net sales, profit (loss), assets, and other amounts by reporting segment
The accounting methods for reporting segments are same as those outlined under “Significant Matters that Serve as the Basisfor Preparation of Consolidated Financial Statements.”
Reporting segment profit figures are based on operating profit. Intersegment revenues and transfers are based on market
prices.

15

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

3

Net sales, profit (loss), assets, and other amounts by reporting segment
Previous consolidated fiscal year (April 1, 2018–March 31, 2019)(Unit: Millions yen)
Adjustments*2

Amountrecorded on
consolidated
financialstatements*3

444,048－444,048

258

5,641

(5,641)－

444,274

5,415

449,690(5,641)

444,048

2,193

17,804421

18,226(273)

17,952

24,932

15,350254,5312,681

257,212

41,999299,212

446

657

239

2,650

56

2,706

136

2,842

70

616

403

511

1,602

59

1,661

－

1,661

232

－

0

－

232

－

232

－

232

－

－

－

－

－

44

44

－

44

Reporting segment
Total Pack
Producebusiness

MedicalSupplybusiness

Life Carebusiness

Dispensing
Pharmacybusiness

Subtotal

99,441

290,363

23,50025,585438,890

5,157

2,100

1,274

205

1,803

5,383

101,542

291,637

23,70527,388Segment profit

9,794

4,191

1,625

Segment assets

101,706

112,541

1,306

Other*1

Total

Net sales(1) Sales to outside
customers(2) Intersegment
sales or transfers
Subtotal

Other items
Depreciation
Amortization of
goodwill
Amortization ofnegative goodwill
Impairment loss

Investment inentities accounted
303
303
303
303
－
－
－
－
－
for using equity
methodIncrease inproperty, plant
1,575
1,342
298
297
3,514
31
3,546
15
3,561
and equipment,
and intangible
fixed assets
Notes:
1. The “Other” category includes businesses not included in reporting business segments, such as the veterinary hospitalbusiness, sales of physical and chemical apparatus, and security business.
2. The amounts of the various adjustments are described below.
(1) The figure of ¥(273) million yen in adjustments to segment profit includes ¥(84) million yen for the cancellation ofintersegment transactions and ¥(192) million yen for companywide costs not allocated to an individual reporting
segment. These companywide costs consist mainly of parent company operating expenses and sales, general, andadministrative expenses not attributable to individual reporting segments.
(2) The figure of ¥41,999 million yen in adjustments to segment assets includes ¥(9,094) million yen for cancellation ofintersegment transactions, ¥(116) million yen for offsetting of negative goodwill, and ¥51,169 million yen forcompanywide assets not allocated to an individual reporting segment. These companywide assets consist mainly ofassets related to administrative sections not attributable to individual reporting segments.
(3) The figure of ¥15 million yen in adjustments to increase in property, plant and equipment, and intangible fixed assets
consists mainly of capital investment related to administrative sections not attributable to individual reporting
segments.
3. Segment profit is adjusted against the operating profit reported on the consolidated statement of income.

16

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

Consolidated fiscal year under review (April 1, 2019–March 31, 2020)(Unit: Millions yen)
Adjustments*2

Amountrecorded on
consolidated
financialstatements*3

484,395－

484,395

328

12,707(12,707)－489,7117,390

497,102(12,707)484,395

2,661

19,087449

19,537(742)

18,79424,272

20,558

270,511

3,940

274,452

34,420308,873

473

641

268

2,968

57

3,025

110

3,135

106

626

401

517

1,653

65

1,718

－

1,718

116

－

－

－

116

－

116

－

116

－

152

－

－

152

－

152

－

152

Reporting segment
Total Pack
Producebusiness

MedicalSupplybusiness

Life Carebusiness

Dispensing
Pharmacybusiness

Subtotal

100,688

325,664

23,92927,050477,332

7,062

2,662

1,101

210

8,403

12,378103,350

326,766

24,13935,454

Segment profit

9,620

5,035

1,770

Segment assets

97,121

128,558

1,584

Other*1

Total

Net sales(1) Sales to outside
customers(2) Intersegment
sales or transfers
Subtotal

Other items
Depreciation
Amortization of
goodwill
Amortization ofnegative goodwill
Impairment loss

Investment inentities accounted
339
339
339
339
－
－
－
－
－
for using equity
methodIncrease inproperty, plant
3,008
1,217
313
342
4,882
45
4,928
236
5,165
and equipment,
and intangible
fixed assets
Notes:
1. The “Other” category includes businesses not included in reporting business segments, such as the veterinary hospitalbusiness, sales of physical and chemical apparatus, and security business.
2. The amounts of the various adjustments are described below.
(1) The figure of ¥(742) million yen in adjustments to segment profit includes ¥(85) million yen for the cancellation ofintersegment transactions and ¥(659) million yen for companywide costs not allocated to an individual reporting
segment. These companywide costs consist mainly of parent company operating expenses and sales, general, andadministrative expenses not attributable to individual reporting segments.
(2) The figure of ¥34,420 million yen in adjustments to segment assets includes ¥(13,152) million yen for cancellation ofintersegment transactions and ¥47,690 million yen for companywide assets not allocated to an individual reporting
segment. These companywide assets consist mainly of assets related to administrative sections not attributable toindividual reporting segments.
(3) The figure of ¥236 million yen in adjustments to increase in property, plant and equipment, and intangible fixed assets
consists mainly of capital investment related to administrative sections not attributable to individual reporting
segments.
3. Segment profit is adjusted against the operating profit reported on the consolidated statement of income.

17

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

[Related information]
Previous consolidated fiscal year (April 1, 2018–March 31, 2019)1

Product and service-specific information
This information is reported under segment information and is therefore omitted here.

2

Region-specific information(1) Net sales
This information is omitted because sales to external customers in Japan account for more than 90% of net sales on theConsolidated Statement of Income.
(2) Property, plant and equipment
This information is omitted because property, plant and equipment located in Japan account for more than 90% of property,
plant and equipment on the Consolidated Balance Sheet.

3

Information concerning key individual customers
Not applicable because sales to no single external customer account for 10% or more of net sales on the Consolidated
Statement of Income.
This consolidated fiscal year (April 1, 2019–March 31, 2020)

1

Product and service-specific information
This information is reported under segment information and is therefore omitted here.

2

Region-specific information(1) Net sales
This information is omitted because sales to external customers in Japan account for more than 90% of net sales on theConsolidated Statement of Income.
(2) Property, plant and equipment
This information is omitted because property, plant and equipment located in Japan account for more than 90% of property,
plant and equipment on the Consolidated Balance Sheet.

3

Information concerning key individual customers
Not applicable because sales to no single external customer account for 10% or more of net sales on the Consolidated
Statement of Income.

[Information concerning impairment losses on fixed assets per reporting segment]
Previous consolidated fiscal year (April 1, 2018–March 31, 2019)
This information is reported under segment information and is therefore omitted here.
This consolidated fiscal year (April 1, 2019–March 31, 2020)
This information is reported under segment information and is therefore omitted here.

18

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

[Information concerning amounts of amortization of goodwill and remaining unamortized balances, per reporting segment]
Previous consolidated fiscal year (April 1, 2018–March 31, 2019)(Unit: Millions yen)
Reportable segment
Total Pack
Producebusiness(Goodwill)Ending balance

565

MedicalSupplybusiness
3,233

Life Carebusiness

Dispensing
Pharmacybusiness

3,030

2,158

Companywide/cancellation

Other
Subtotal

8,987

432

–

Total

9,420

(Negative goodwill)
116
–
–
–
116
–
–
116
Ending balance
Notes:
1. Amounts of amortization of goodwill and amortization of negative goodwill are omitted because similar information isreported under segment information.
2. Negative goodwill was incurred for reasons including corporate consolidations implemented before March 31, 2010 and isindicated on the Consolidated Balance Sheet after offsetting.

This consolidated fiscal year (April 1, 2019–March 31, 2020)(Unit: Millions yen)
Reportable segment
Total Pack
Producebusiness(Goodwill)Ending balance

933

MedicalSupplybusiness
2,686Life Carebusiness

Dispensing
Pharmacybusiness

2,628

1,821

Companywide/cancellation

Other
Subtotal

8,069

478

–

Total

8,548

(Negative goodwill)
–
–
–
–
–
–
–
Ending balance
Notes:
1. Amounts of amortization of goodwill and amortization of negative goodwill are omitted because similar information isreported under segment information.

[Information on gains on bargain purchases per reporting segment]
Previous consolidated fiscal year (April 1, 2018–March 31, 2019)No important gains on bargain purchases occurred.
This consolidated fiscal year (April 1, 2019–March 31, 2020)
No important gains on bargain purchases occurred.

19–

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(Per-share information)
Fiscal year ended
March 31, 2019

Fiscal year ended
March 31, 2020
(Yen)

(Yen)

Net assets per share

2,003.36

2,146.71

Net income per share

227.75248.03

Diluted net income per share

221.11225.24

Notes:
1. Net income per share was calculated based on the following information:
Account

Fiscal year ended
March 31, 2019

Net income per share
Profit attributable to owners of parent(millions yen)

Fiscal year ended
March 31, 2020

11,236

11,803––

11,236

11,80349,335,752

47,587,591

221.11225.24

Adjustment for profit attributable to owners ofparent (millions yen)

(5)

(16)

[Interest income (after tax equivalentdeduction) (millions yen)][(5)][(17)]

Increase in number of common stock(shares)

1,456,876

4,741,064[Bonds with share acquisition rights included inabove (shares)][1,456,876][4,741,064]

Amount not attributable to owners ofcommon stock (millions yen)
Profit attributable to owners of parent related tocommon stock (millions yen)
Average shares of common stock during theperiod (shares)
Diluted net income per share

Description of potentially dilutive commonshares not included in the computation ofdiluted earnings per share because of theiranti-dilutive effect––

2. Net assets per share were calculated based on the following information:
Account

Fiscal year ended
March 31, 2019

Fiscal year ended
March 31, 2020

Total net assets (millions yen)

97,734

104,681

Amount subtracted from total net assets(millions yen)

2,314

2,897

[Non-controlling interests included in above(millions yen)][(2,314)][(2,897)]

Ending balance of net assets related to common
stock (millions yen)

95,420101,784

Ending number of shares of common stock usedin calculation of net assets per share (shares)

47,630,165

47,414,073

20

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(Important subsequent information)(Purchase of shares of subsidiaries)
The Group has been developing dialysis and CT services in the Republic of the Union of Myanmar (hereinafter“Myanmar”) since 2014. In order to further expand the business by utilizing the experience and know-how cultivated sofar, we acquired the shares of Okkar Thiri Co., Ltd., which is the largest medical device sales company in Myanmar, andSnow Everest Co., Ltd., which is the third largest on April 27, 2020, and made them consolidated subsidiaries.
(1) Overview of business combination① Name of the acquired company, details of its business, and name of the combined company

②

③
④
⑤

Name of the acquired company

Okkar Thiri Co.,Ltd.

Snow Everest Co.,Ltd.

Business content

Sales of medical devices andequipment

Sales of medical devices andequipment

Name of the combined company

Okkar Thiri Co.,Ltd.

Snow Everest Co.,Ltd.

Main reasons for business combination
In the field of medical equipment wholesale business in Myanmar, the company develop Total Pack Produce
business in their own way, which is one of the group’s main businesses, through a wide range of facility consulting,medical equipment sales, and maintenance for major medical institutions in the country as an agent of major
manufacturers in Europe, the United States, and Japan.
The Group has acquired shares for the purpose of further expanding its business in Myanmar.
Date of business combination
April 27, 2020
Legal form of business combination
Acquisition of shares
Voting right ratio acquired
Okkar Thiri Co.,Ltd.

Snow Everest Co.,Ltd.

14.9%

14.0%

65.1%

66.0%

80.0%

80.0%

Okkar Thiri Co.,Ltd.

Snow Everest Co.,Ltd.

822 million yen

242 million yen

Cash 3,592 million yen

Cash 1,142 million yen

4,414 million yen

1,384 million yen

Voting rights ratio owned before the acquisition ofsharesVoting rights ratio additionally acquired through theacquisition of shares
Voting rights ratio after the acquisition of shares⑥

Major reason for deciding the acquiring company
For the acquisition of shares for which the Group will pay cash.
(2) Breakdown of acquisition cost and consideration by type of the acquired company
Market value of the equity held immediately before
the date of business combination on the date ofbusiness combination
Consideration for additional common stock acquiredon the date of business combination
Acquisition cost(3) Difference between the acquisition cost of the acquired company and the total acquisition cost for each transaction that
led to the acquisition

Loss on step acquisition

Okkar Thiri Co., Ltd.

Snow Everest Co., Ltd.

71 million yen

21 million yen(4) Amount of goodwill incurred, cause, and amortization method and amortization period
Calculation is in progress.
(5) Amount of assets and liabilities assumed on the day of business combination and their main breakdown
Calculation is in progress.

21

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2020

(Purchase of treasury stock)
At its meeting held May 12, 2020, the Company’s board of directors passed a resolution related to the purchase of treasury
shares pursuant to Article 156 of the Companies Act applicable with rewording as required under Article 165, Paragraph 3of that Act.
1. Reason for purchase of treasury shares
Treasury shares was purchased to implement dynamic capital policies in response to changes affecting businessconditions.
2. Details of purchase(1) Class of stock subject to the purchase:(2) Total number of shares to be purchased:(3) Total purchase price of stock:(4) Period of purchase:(5) Method of purchase:

Company common stock
Up to 480,000 shares(Corresponding percentage of total shares issued and outstanding, notincluding treasury shares: 1.0%)
Up to 2 billion yen
May 13, 2020–March 31, 2021
Market purchases on the Tokyo Stock Exchange

22