Summary of Financial Statements
for Fiscal Year Ended March 31, 2018 [Japanese GAAP](Consolidated)
May 11, 2018
Name of listed company:

SHIP HEALTHCARE HOLDINGS, INC.
Shares listed on: Tokyo Stock Exchange
Code:
3360
URL
http://www.shiphd.co.jp/
Representative:(Title) Chairman and CEO(Name) Kunihisa Furukawa
Contact:(Title) Managing Director(Name) Hiroshi YokoyamaTel.: +81-6-6369-0130
Scheduled date for regular general meeting of shareholders: June 28, 2018
Scheduled start date for dividend payments: June 29, 2018
Scheduled date for filing securities report: June 28, 2018
Supplementary briefing materials on results: Y
Briefing on results:
Y (for institutional investors and analysts)(All figures are rounded down to the nearest million yen.)

1. Consolidated financial results for the fiscal year ending March 31, 2018 (April 1, 2017–March 31,
2018)(1) Consolidated operating results(Percentages represent year-on-year changes.)

Net sales

Operating profit(Millions yen)%%

(Millions yen)%

FY ended March 2018
425,566
4.2
18,25913.7
18,935
14.9
FY ended March 2017
408,487
33.1
16,055
14.3
16,47811.8
Note: Comprehensive income: FY ended March 2018: ¥11,304 million (15.6%);
FY ended March 2017: ¥9,782 million (14.4%)
Net income per
Diluted net
Return on
Return on
income per shareequityassetsshare

10,350
9,410

10.0
6.4

(Yen)

(Millions yen)

Profit attributable toowners of parent

Ordinary profit%(Millions yen)

(Yen)

%

Operatingmargin%%FY ended March 2018
204.57
–
10.8
6.9
4.3
FY ended March 2017
186.32
–
10.9
6.8
3.9
Reference: Share of profit (loss) of entities accounted for using equity method: FY ended March 31, 2018: ¥34 million;
FY ended March 31, 2017: ¥0(2) Consolidated financial condition
Total assets

Net assets(Millions yen)

Equity capital ratio(Millions yen)

Net assets per share
%

(Yen)

FY ended March 2018
285,438
102,354
35.0
FY ended March 2017
263,540
93,632
34.7
Reference: Equity: FY ended March 2018: ¥99,880 million; FY ended March 2017: ¥91,384 million

1,973.95
1,806.05(3) Consolidated cash flows
Net cash fromoperating activities
FY ended March 2018
FY ended March 2017

Net cash frominvesting activities

Net cash fromfinancing activities

Cash and cash
equivalents at end of
period(Millions yen)

(Millions yen)

(Millions yen)

(Millions yen)

20,204
15,311–6,640–5,709–3,347
3,543

58,787
48,661

2. Dividends
End Q1(Yen)

Annual dividends
End Q2End Q3 Year-end
(Yen)

(Yen)

(Yen)

Total
(Yen)

Total annual Payout ratio Dividends to
net assets
dividends (consolidated) (consolidated)(Millions yen)%%

FY ended March 2017
–
0.00
–
60.00
60.00
3,035
32.2
3.5
FY ended March 2018
–
0.00
–
64.00
64.00
3,238
31.3
3.4
FY ending March 2019
–
0.00
–
64.00
64.00
30.8
(forecast)
Notes: Breakdown of year-end dividends paid in FY ended March 2017: ordinary dividends: ¥56.00; commemorative
dividends: ¥4.00

3. Forecast of consolidated financial results for fiscal year ending March 31, 2019 (April 1, 2018–March
31, 2019)(Percentages represent changes from previous year for full-year figures and year-on-year changes for quarterly figures.)
Profit attributable
Net income
Net sales
Operating profit
Ordinary profit
to owners ofper share
parentCumulative throughsecond quarter
Full-year(Millions yen)%

(Millions yen)%

190,000

1.4

4,400 –27.1

440,000

3.4

17,500(Millions yen)

–4.2

%

(Millions yen)

%

(Yen)

4,600 –27.1

2,600 –28.3

51.38

17,80010,500207.51

-6.0

1.4

Notes
(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 andFY ended MarchFY ended March
50,834,700 shares
outstanding at the end of the period
2018
2017
(including treasury shares)
FY ended March(ii) Number of treasury shares at the end of FY ended March
235,568 shares
2018
2017
the period(iii) Average number of shares during the
FY ended MarchFY ended March
50,599,132 shares
2018
2017
period50,834,700 shares

235,568 shares

50,507,285 shares

Reference: Overview of non-consolidated financial results
1. Non-consolidated financial results for fiscal year ended March 31, 2018 (April 1, 2017–March 31,
2018)(1) Non-consolidated operating results
Operating revenues
FY ended March 2018
FY ended March 2017

FY ended March 2018
FY ended March 2017

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

Operating profit(Millions yen)%

(Millions yen)%

(Millions yen)%

(Millions yen)

%

6,504
6,162

5.5
16.3

5,367
5,123

4.8
16.8

5,319
5,044

5.4
15.9

5,188
4,937

5.1
14.5

Net income per share

Diluted net income per
share

(Yen)

(Yen)

102.5597.76––(2) Non-consolidated financial condition
Total assets
FY ended March 2018
FY ended March 2017

Net assets

Equity capital ratio

Net assets per share(Millions yen)

(Millions yen)

%

(Yen)

71,921
65,61755,19253,00976.7
80.8

1,090.79
1,047.64

Reference: Equity: FY ended March 31, 2018: ¥55,192 million; FY ended March 31, 2017: ¥53,009 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 this document was prepared and certain assumptions consideredreasonable. 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 fromsubsidiaries and revenues from their operating costs. Detailed information on non-consolidated financial
forecasts is omitted since information is not important for investment information and business indicators.

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2018

 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(Segment information, etc.) ................................................................................................................... 15(Per-share information) .......................................................................................................................... 20(Important subsequent information)....................................................................................................... 20

1

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2018

1. Qualitative information on business results(1) Description of business results
During this consolidated fiscal year, despite concerns about the negative effects of both international instability andpolitical developments under the new administration in the United States, the Japanese economy maintained a course ofgently recovery, buoyed by positive corporate earnings..
In the healthcare industry in which the Group operates, the Basic Policies for Economic and Fiscal Management andReform 2017 (the so-called Big-Boned Policy 2017) decided on by the Cabinet in June 2017, identified a course of action
to restrain growth in medical and nursing care costs in excess of the effects of the aging of Japanese society, with theobjective of maintaining the nation’s world-leading universal health insurance and pension programs and passing these on
to future generations. The concurrent revision of remuneration for healthcare and nursing care compensation in April 2018
was based on this government course of action.
Amid these economic conditions, in the Total Pack Produce business, the Group proceeded according to plan on several
projects. Demand for equipment upgrades began to recover in the second half. Continual kaizen activities produced results
across Group member companies, and improved occupancy rates in the Life Care business and increased earnings
potential in the Dispensing Pharmacy business contributed to results that met targets set at the start of the fiscal year. The
Group also made progress according to plan on building the foundations for continuing growth, including launching a
private finance initiative (PFI) business under the management of the International Legal Affairs Center, launchingoutpatient examination services at the heavy ion radiotherapy facility (where treatment services are set to begin in
October), and progress on construction of a hospital in Bangladesh.
During this consolidated fiscal year, the various factors noted above resulted in net sales of 425,566 million yen (up 4.2%
YoY), operating profits of 18,259 million yen (up 13.7% YoY), ordinary profits of 18,935 million yen (up 14.9% YoY),
and profits attributable to owners of the parent of 10,350 million yen (up 10.0% YoY).
Business results by segment are summarized below.
(i) Total Pack Produce business
The Total Pack Produce business made progress according to plan on several projects and reaped the benefits ofstrong demand to upgrade equipment at existing facilities.
As a result, this segment recorded net sales of 98,064 million yen (up 3.0% YoY) and segment profit (operating
profit) of 10,150 million yen (up 2.6% YoY).
(ii) Medical Supply business
Driven by various factors, including progress according to plan on startup of new SPD facilities and recovery indemand to upgrade devices in the second half of the fiscal year, the Medical Supply business recorded strong
performance.
As a result, this segment recorded net sales of 274,058 million yen (up 4.0% YoY) and segment profit (operating
profit) of 4,161 million yen (up 25.4% YoY).
(iii) Life Care business
Various factors significantly boosted earnings in the Life Care business, including improved performance at newly
opened facilities thanks to improved occupancy rates and continuing progress on the integrated management offacilities nationwide.
As a result, this segment recorded net sales of 22,724 million yen (up 7.4% YoY) and segment profit (operating
profit) of 955 million yen (up 50.5% YoY).
(iv) Dispensing Pharmacy businessIn the Dispensing Pharmacy business, improved management efficiency thanks to sustained business improvements
and mergers and acquisitions (M&A) bore fruit and led to steady progress in business performance.
As a result, this segment recorded net sales of 25,789 million yen (up 6.9% YoY) and segment profit (operating
profit) of 2,826 million yen (up 23.7% YoY).
(v) Other businesses
Results were positive for other sectors thanks to progress according to plans in the veterinary hospital business andthe strong performance of the security support company.
As a result, this segment recorded net sales of 4,929 million yen (up 11.7% YoY) and segment profit (operating
profit) of 303 million yen (up 292.3% YoY).

2

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2018

(2) Analysis of financial position(i) Current assets
The balance of current assets at the end of this consolidated fiscal year stood at 193,488 million yen (vs. a balance of
174,430 million yen at the end of the previous consolidated fiscal year), an increase of 19,058 million yen since theend of the previous consolidated fiscal year.
Major reasons included increases of 10,200 million yen in cash and deposits and 3,432 million yen in notes andaccounts receivable - trade.
(ii) Non-current assets
The balance of non-current assets at the end of this consolidated fiscal year stood at 91,949 million yen (vs. a balanceof 89,093 million yen at the end of the previous consolidated fiscal year), an increase of 2,855 million yen since theend of the previous consolidated fiscal year.
Major reasons included increases of 4,675 million yen in buildings and structures and 1,080 million yen in
investment securities, while construction in progress fell by 1,288 million yen.
(iii) Current liabilities
The balance of current liabilities at the end of this consolidated fiscal year stood at 137,928 million yen (vs. a balanceof 126,377 million yen at the end of the previous consolidated fiscal year), an increase of 11,550 million yen since theend of the previous consolidated fiscal year.
Major reasons included increases of 5,593 million yen in electronically recorded obligations - operating and 2,409
million yen in notes and accounts payable - trade.
(iv) Non-current liabilities
The balance of non-current liabilities at the end of this consolidated fiscal year stood at 45,154 million yen (vs. abalance of 43,530 million yen at the end of the previous consolidated fiscal year), an increase of 1,624 million yen
since the end of the previous consolidated fiscal year.
Major reasons included increases of 618 million yen in long-term loans payable and 490 million yen in deferred tax
liabilities.
(v) Net assets
The balance of net assets at the end of this consolidated fiscal year stood at 102,354 million yen (vs. a balance of
93,632 million yen at the end of the previous consolidated fiscal year), an increase of 8,722 million yen since the endof the previous consolidated fiscal year.
Major reasons included increases of 10,350 million yen in retained earnings resulting from profit attributable toowners of parent and 1,137 million yen in valuation difference on available-for-sale securities, despite a decrease of
3,035 million yen in retained earnings resulting from dividend payments.

3

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2018

(3) Analysis of cash flows
The balance of cash and cash equivalents at the end of this consolidated fiscal year stood at 58,787 million yen, up 10,126
million yen from the balance of 48,661 million yen at the end of the previous consolidated fiscal year.
(i) Cash flow from operating activities
Cash flow from operating activities was 20,204 million yen (up 4,893 million yen compared to the previous
consolidated fiscal year). Major contributing factors included the recording of 17,413 million yen in profit before
income taxes, an increase of 7,466 million in notes and accounts payable - trade, and recording of 1,671 inamortization of goodwill, despite payment of 6,971 million yen in income taxes and an increase of 3,927 million yen
in notes and accounts receivable - trade.
(ii) Cash flow used in investing activities
Cash flow used in investing activities was 6,640 million yen (up 930 million yen compared to the previous
consolidated fiscal year). Major contributing factors included expenditures of 5,706 million yen on purchase ofproperty, plant and equipment and 1,914 million yen on purchase of shares of subsidiaries resulting in change inscope of consolidation, despite gains of 442 million yen from liquidation of subsidiaries and associates.
(iii) Cash flow used in financing activities
Cash flow used in financing activities was 3,347 million yen (for an increase in expenditures of 6,890 million yen
compared to the previous consolidated fiscal year). Major contributing factors included expenditures of 9,925 million
yen on repayment of long-term loans payable, 3,035 million yen on dividend payments, and 2,050 million yen on
redemption of corporate bonds, despite gains of 10,521 million yen from long-term loans payable.
Reference: Trends in cash flow indices
FY ended
March 2014
Equity capital ratio (%)

27.2

FY ended
March 2015

FY ended
March 201637.2

Mark-to-market equity
91.8
66.9
capital ratio (%)
Years of debt redemption
2.6
22.8(years)Interest coverage ratio
38.0
4.8(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 2017

FY ended
March 2018

37.1

34.7

35.0

64.1

56.9

66.5

2.3

3.1

2.3

57.3

53.3

80.6

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, 2018

(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.
To mark the 25th anniversary of its founding and the 10th anniversary of its listing on the First Section of the Tokyo Stock
Exchange, 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.
In the FY ending March 2019, the Group’s heavy ion radiotherapy facility and its hospital in Bangladesh will commence
full-fledged operations. The Group’s medium-term plan calls for record highs in both net sales and operating profit in FY
ending March 2021, the plan’s final year. The specific targets are 500 billion yen and 21 billion yen, respectively.
The business performance projected for the next fiscal year (FY ending March 2019) is summarized below.
<Projected consolidated results>
FY ending March 2019 (projected)
Profit margin

YoY change(Unit: Millions yen, %)FY ended March 2018 (actual)
Profit margin

Net sales

440,000–

3.4

425,566–

Operating profit

17,5004.0–4.2

18,2594.3

Ordinary profit

17,800

4.0–6.0

18,935

4.4

10,350

2.4

Profit attributable to owners
10,5002.4
1.4
of patent
The projected amount of (year-end) dividends per share in FY ending March 2019 is 64 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, 2018

3. Consolidated financial statements and notes thereto(1) Consolidated balance sheet
Previous consolidated
fiscal year
(March 31, 2017)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating
Lease investment assets
Merchandise and finished goods
Semi-finished goods
Raw materials and supplies
Deferred tax assets
Short-term loans receivable
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 receivable
Net defined benefit assets
Deferred tax assets
Claims provable in bankruptcy, claims provable in rehabilitation and other

Guarantee deposits
Other
Total allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Share issuance cost
Deferred assets
Total assets
6(Unit: Millions yen)
Consolidated fiscal year
under review(March 31, 2018)

49,444
95,657
1,920
4,057
11,669
1,328
840
1,623
1,684
6,282
–78
174,430

59,64499,0903,427
3,873
13,076
1,269
605
2,039
1,788
8,759
–86
193,488

25,900–10,928
14,972
1,351–1,078272
15,222623–543
80
17,181–2,994
14,186
5,716
9,298–6,265
3,032
53,48331,502–11,854
19,647
1,386
–919
467
15,556640–570
70
16,524–3,12913,395
4,428
8,926–6,721
2,204
55,77010,912
1,296
12,20810,6501,129
11,780

6,782
10,172
996
1,429
138
5,492
954
–2,563
23,40289,093

7,862
9,870
983
1,691
79
5,544
902
–2,536
24,39891,94916
16263,540––
285,438SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2018

(Unit: Millions yen)
Consolidated fiscal year
under review(March 31, 2018)

Previous consolidated
fiscal year
(March 31, 2017)
Liabilities
Current liabilities
Notes and accounts payable - trade86,30788,716

Electronically recorded obligations - operating

16,192

21,786

Short-term loans payable

2,020

2,970

Current portion of long-term loans payable

4,750

4,676

Income taxes payable

4,120

4,745

Deferred tax liabilities

2

2

Provision for bonuses

1,905

1,966

Other

11,07813,064

Total current liabilities

126,377

137,928

Long-term loans payable

36,14636,765Net defined benefit liability

2,548

2,706

491

982

Non-current liabilities

Deferred tax liabilities
Asset retirement obligations
Other
Total non-current liabilities

362

619

3,981

4,081

43,53045,154

169,908

183,083

Capital stock

15,553

15,553

Capital surplus

23,71623,948Retained earnings

51,05958,374

Treasury shares

–448

–448

89,881

97,428

Total liabilities
Net assets
Shareholders' equity

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

1,459

2,596

Foreign currency translation adjustment

47

–92

Remeasurements of defined benefit plans

–3

–52

1,503

2,451

Non-controlling interests

Total accumulated other comprehensive income

2,247

2,474

Total net assets

93,632

102,354

263,540

285,438

Total liabilities and net assets

7

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2018

(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income
Previous consolidated fiscal
year(April 1, 2016 – March 31,
2017)408,487(Unit: Millions yen)
Consolidated fiscal year
under review(April 1, 2017 – March 31,
2018)425,566

Cost of sales

363,992

378,484

Gross profit

44,49447,082

Directors’ compensation

1,447

1,473

Salaries and allowances

8,873

9,161

Bonuses

1,312

1,439

445

423

Net sales

Sales, general, and administrative expenses

Retirement benefit expenses
Provision for bonuses

880

875

Other

15,47915,448

Total sales, general, and administrative expenses

28,43828,822

16,055

18,259Interest income

336

301

Dividend income

105

124

Amortization of negative goodwill

240

232

0

34

Operating profit
Non-operating profit

Share of profit of entities accounted for using equity method
Reversal of allowance for doubtful accounts

6

9

426

395

1,115

1,098

Interest expenses

287

254

Foreign exchange losses

39

13

Provision of allowance for doubtful accounts

143

–

–

72

Other
Total non-operating profit
Non-operating expenses

Losses on sales of accounts receivable
Other

223

81

Non-operating expenses

692

422

16,47818,935

Total ordinary profit

8

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2018

Previous consolidated fiscal
year(April 1, 2016 – March 31,
2017)(Unit: Millions yen)
Consolidated fiscal year
under review(April 1, 2017 – March 31,
2018)

Gain on sales of property, plant, and equipment

1561

Gain on sales of investment securities

88–

Gain on transfer of business

461

20

Reversal of long-term accounts payable - other

229

–

0

0

794

82

Loss on sales of property, plant, and equipment

105

35

Loss on retirement of property, plant, and equipment

124

30

Loss on valuation of investment securities

37

113

Impairment loss

670

851

Loss on withdrawal from employees’ pension fund

212

–

–

568

Extraordinary profit

Other
Total extraordinary profit
Extraordinary losses

Loss on litigation
Other

43

3

Total extraordinary losses

1,193

1,604

Total income before income taxes

16,07817,413

Income taxes - current

6,808

7,466

Income taxes - deferred

–272

–542

Total income taxes

6,535

6,924

Profit9,543

10,489Profit attributable to non-controlling interests
Profit attributable to owners of parent

9

132

138

9,410

10,350SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2018

Consolidated statement of comprehensive income
Previous consolidated fiscal
year(April 1, 2016 – March 31,
2017)
9,543

(Unit: Millions yen)
Consolidated fiscal year
under review(April 1, 2017 – March 31,
2018)10,489Valuation difference on available-for-sale securities

376

1,137

Translation adjustments

–186

–272

Remeasurements of defined benefit plans

49

–48

Other comprehensive income

239

815

9,782

11,304

9,747

11,29935

5ProfitOther 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, 2018

(3) Consolidated statement of changes in equity
Previous consolidated fiscal year (April 1, 2016–March 31, 2017)(Unit: Millions yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

15,553Retained earnings

Treasury shares

Total shareholders’equity44,366–448

79,82820,356

Changes of items during period
Dividends of surplus–2,717–2,717

Profit attributable toowners of parent

9,410

9,410

Increase by shareexchanges

3,360

3,360

Capital increases by
consolidated subsidiaries–

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

–

3,360

6,693

–

10,053

15,55323,71651,059–448

89,881

Accumulated other comprehensive income

Balance at beginning of current
periodValuation difference
on available-for-salesecurities

Foreign currencytranslation
adjustments

1,082

136

Remeasurements of Total accumulated
defined benefit
other comprehensive
plansincome–52

1,166

Non-controllinginterests

528

Total net assets

81,522

Changes of items during period
Dividends of surplus–2,717

Profit attributable toowners of parent

9,410

Increase by shareexchanges

3,360

Capital increases by
consolidated subsidiaries–

Net changes of items otherthan shareholders’ equity

376

–88

49

336

1,719

2,056

Total changes of items during
period

376

–88

49

336

1,719

12,109

1,459

47

–3

1,503

2,247

93,632

Balance at end of current
period11

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2018

This consolidated fiscal year (April 1, 2017–March 31, 2018)(Unit: Millions yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

15,553Retained earnings

Treasury shares

Total shareholders’equity51,059–448

89,881

23,716

Changes of items during period
Dividends of surplus–3,035–3,035

Profit attributable toowners of parent

10,35010,350

Increase by shareexchanges–

Capital increases by
consolidated subsidiaries

232

232

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

–

232

7,314

–

7,547

15,55323,94858,374–448

97,428

Accumulated other comprehensive income

Balance at beginning of current
periodValuation difference
on available-for-salesecurities

Foreign currencytranslation
adjustments

1,459

47

Remeasurements of Total accumulated
defined benefit
other comprehensive
plansincome–3

1,503

Non-controllinginterests

2,247

Total net assets

93,632

Changes of items during period
Dividends of surplus–3,035

Profit attributable toowners of parent

10,350

Increase by shareexchanges–

Capital increases by
consolidated subsidiaries

232

Net changes of items otherthan shareholders’ equity

1,137

–140

–48

948

227

1,175

Total changes of items during
period

1,137

–140

–48

948

227

8,722

Balance at end of current
period

2,596

–92

–52

2,451

2,474

102,354

12

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2018

(4) Consolidated statement of cash flows
Previous consolidated
fiscal year
(April 1, 2016 – March
31, 2017)(Unit: Millions yen)
Consolidated fiscal year
under review(April 1, 2017 – March 31,
2018)

Income before income taxes

16,07817,413

Depreciation and amortization

2,648

2,514

670

851

Amortization of goodwill

2,021

1,671

Amortization of negative goodwill

–240

–232

Equity in (earnings) loss of affiliates

–0

–34

Increase (decrease) in provision for bonuses

172

25

Increase (decrease) in allowance for doubtful accounts

103

–52

Net decrease (increase) in lease investment assets

113

184

Increase (decrease) in net defined benefit liability

156

99

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

97

–25

Loss on retirement of property, plant and equipment

124

29

Cash flows from operating activities

Impairment loss

Loss on retirement of intangible assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities

0

1

–88

–

37

113

Loss (gain) on transfer of business

–461

–20

Interest and dividend income

–442

–426

Interest expenses

287

254

598

–3,927

Decrease (increase) in notes and accounts receivable – trade
Decrease (increase) in inventories

1,359

–910

Increase (decrease) in notes and accounts payable – trade–1,794

7,466

Other

192

2,008

Subtotal

21,63527,003437

423

Interest and dividend income received

–287

–251

Income taxes paid

–6,474–6,971

Cash flows from operating activities

15,311

20,204

Interest expenses paid

13

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2018

Previous consolidated fiscal
year(April 1, 2016 – March 31,
2017)(Unit: Millions yen)
Consolidated fiscal year
under review(April 1, 2017 – March 31,
2018)

Payments into time deposits

–217

–239

Proceeds from withdrawal of time deposits

186

342

Purchase of property, plant, and equipment–5,509–5,706

Cash flows from investing activities

Proceeds from sales of property, plant, and equipment

123

351

Purchase of intangible assets

–411

–179

Payments of short-term loans receivable

–32

–108

Collection of short-term loans receivable

32

4

Payments of long-term loans receivable

–509

–2

Collection of long-term loans receivable

438

335

Purchase of investment securities

–18

–9

Proceeds from sales and redemption of investment securities

738

114

Payments for transfer of business––70

Proceeds from transfer of business

646–

Payments for transfer of business––6

Proceeds from liquidation of subsidiaries and associates
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Other

–

442

–1,587–1,914

411

3

Cash flows from investing activities–5,709–6,640Cash flows from financing activities

204

950

Net increase (decrease) in short-term loans payable

12,20010,521

Proceeds from long-term loans payable–5,859–9,925

Repayments of long-term loans payable–20–2,050

Redemption of bonds–2,717–3,035

Cash dividends paid

–40

–46

Dividends paid to non-controlling interests

14

498

Repayments of lease obligations

–227

–250

Other

–10

–9

3,543

–3,347

Proceeds from share issuance to non-controlling shareholders

Cash flows from financing activities

–2

–90

Net increase (decrease) in cash and cash equivalents

13,142

10,126

Cash and cash equivalents at the beginning of the period

35,51848,661

Cash and cash equivalents at the end of the period

48,66158,787

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, 2018(5) Notes on consolidated financial statements(Notes on the going concern assumption)
Not applicable(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, 20183

Net sales, profit (loss), assets, and other amounts by reporting segment
Previous consolidated fiscal year (April 1, 2016–March 31, 2017)(Unit: Millions yen)
Adjustments*2

Amountrecorded on
consolidated
financialstatements*3

408,487–

408,487

49

8,984–8,984–

413,009

4,462

417,471–8,984408,487

2,284

16,127

77

16,204–148

16,05525,331

15,741

243,026

3,120

246,146

17,393

263,540

465

725

269

2,399

127

2,527

120

2,648

1

734

405

819

1,961

59

2,021

–

2,021

232

1

6

–

240

–

240

–

240

7

229

361

–

598

71

670

–

670

Reporting segment
Total packproducebusiness

Medicalsupplybusiness

Life carebusiness

Dispensing
pharmacybusiness

Subtotal

95,245263,528

21,167

24,134

404,074

4,412

5,024

1,995

27

1,887

8,935

100,269

265,523

21,19526,021

Segment profit

9,889

3,318

634

Segment assets

95,604

106,349

939

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
645
–
–
–
645
–
645
–
645
for using equity
methodIncrease inproperty, plant
3,727
749
820
251
5,549
83
5,632
441
6,073
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 −148 million yen in adjustments to segment profit includes −18 million yen in cancellation ofintersegment transactions and −128 million yen in companywide costs not allocated to an individual reporting segment.
These companywide costs consist mainly of parent company operating expenses and sales, general, and administrative
expenses not attributable to individual reporting segments.
(2) The figure of 17,393 million yen in adjustments to segment assets includes −8,762 million yen for cancellation ofintersegment transactions, −581 million yen for offsetting of negative goodwill, and 26,707 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 441 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, 2018

Consolidated fiscal year under review (April 1, 2017–March 31, 2018)(Unit: Millions yen)
Adjustments*2

Amountrecorded on
consolidated
financialstatements*3

425,566–

425,566

110

6,130

–6,130–426,657

5,039

431,696–6,130425,566

2,826

18,093303

18,396–137

18,25925,56816,362

260,847

2,603

263,450

21,987285,438

457

679

261

2,324

64

2,389

125

2,514

72

619

405

515

1,611

59

1,671

–

1,671

232

0

0

–

232

–

232

–

232

208

–

–

643

851

–

851

–

851

Reporting segment
Total packproducebusiness

Medicalsupplybusiness

Life carebusiness

Dispensing
pharmacybusiness

Subtotal

98,064

274,058

22,72425,789420,636

4,929

1,783

1,551

234

2,451

6,020

Subtotal

99,847

275,610

22,95828,240

Segment profit

10,1504,161955

Segment assets

104,419

114,496926

Other*1

Total

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

Other items
Depreciation
Amortization of
goodwill
Amortization ofnegative goodwill
Impairment loss

Investment inentities accounted
236
–
–
–
236
–
236
–
236
for using equity
methodIncrease inproperty, plant
4,983
212
155
592
5,945
94
6,039
331
6,371
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 −137 million yen in adjustments to segment profit includes −6 million yen for the cancellation ofintersegment transactions, −136 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, and administrative
expenses not attributable to individual reporting segments.
(2) The figure of 21,987 million yen in adjustments to segment assets includes −8,919 million yen for cancellation ofintersegment transactions, −348 million yen for offsetting of negative goodwill, and 31,203 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 331 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, 2018

[Related information]
Previous consolidated fiscal year (April 1, 2016–March 31, 2017)
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, 2017–March 31, 2018)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, 2016–March 31, 2017)
This information is reported under segment information and is therefore omitted here.
This consolidated fiscal year (April 1, 2017–March 31, 2018)
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, 2018

[Information concerning amounts of amortization of goodwill and remaining unamortized balances, per reporting segment]
Previous consolidated fiscal year (April 1, 2016–March 31, 2017)(Unit: Millions yen)
Reportable segment
Total Pack
Producebusiness(Goodwill)Ending balance

12

MedicalSupplybusiness

4,423

Life Carebusiness

Dispensing
Pharmacybusiness

3,838

2,665

Companywide/cancellation

Other
Subtotal

10,941

552

–

Total

11,493(Negative goodwill)
580
0
0
–
581
–
–
581
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, 2017–March 31, 2018)(Unit: Millions yen)
Reportable segment
Total Pack
Producebusiness(Goodwill)Ending balance

636

MedicalSupplybusiness

3,849

Life Carebusiness

Dispensing
Pharmacybusiness

3,433

2,586

Companywide/cancellation

Other
Subtotal

10,506

492

–

Total

10,998(Negative goodwill)
348
–
0
–
348
–
–
348
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.

[Information on gains on bargain purchases per reporting segment]
Previous consolidated fiscal year (April 1, 2016–March 31, 2017)
No important gains on bargain purchases occurred.
This consolidated fiscal year (April 1, 2017–March 31, 2018)
No important gains on bargain purchases occurred.

19

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Fiscal Year Ended March 31, 2018

(Per-share information)
Previous consolidated fiscal year
(April 1, 2016–March 31, 2017)

This consolidated fiscal year
(April 1, 2017–March 31, 2018)

(Yen)

(Yen)

Net assets per share

1,806.05

1,973.95

Net income per share

186.32204.57

Notes:
1. Diluted net income per share is not indicated because there were no diluting shares.
2. Net income per share was calculated based on the following information:
Account

Previous consolidated fiscal year
(April 1, 2016–March 31, 2017)

This consolidated fiscal year
(April 1, 2017–March 31, 2018)

Profit attributable to owners of parent (millions
yen)

9,410

10,350

Amount not attributable to owners of common
stock (millions yen)––

Profit attributable to owners of parent related tocommon stock (millions yen)

9,410

10,35050,507,285

50,599,132

Average shares of common stock during theperiod (shares)

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

Previous consolidated fiscal year
(March 31, 2017)

This consolidated fiscal year
(March 31, 2018)

Total net assets (millions yen)

93,632

102,354

Amount subtracted from total net assets(millions yen)

2,247

2,474

(Non-controlling interests included in above)(millions yen)

(2,247)(2,474)Ending balance of net assets related to common
stock (millions yen)

91,384

99,880Ending number of shares of common stock usedin calculation of net assets per share (shares)

50,599,132

50,599,132(Important subsequent information)(Purchase of treasury shares)
At its meeting held May 11, 2018, 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 860,000 shares(Corresponding percentage of total shares issued and outstanding, notincluding treasury shares: 1.7%)
Up to 3 billion yen
May 14–September 30, 2018
Market purchases on the Tokyo Stock Exchange

20