Summary of Financial Statements for the Second Quarter of Fiscal Year Ending April 2016
[Japan GAAP] (Consolidated)
November 26, 2015
Name of listed company:

AIN HOLDINGS INC.

Exchange listed on:First Section of Tokyo Stock Exchange and Sapporo Securities Exchange

Code number:

9627

URL: http://www.ainj.co.jp/

Representative:
Inquiries:

Kiichi Otani, President and Representative Director
Toshihide Mizushima, Representative Senior Managing Director
TEL: +81-11-814-1000
Date of filing quarterly securities report:
December 15, 2015
Start of dividend payment:–

Supplementary documents for quarterly results:

Yes

Quarterly results briefing:

Yes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen.)
1. Consolidated results for the second quarter of fiscal year ending April 30, 2016 (May 1, 2015 to October 31, 2015)(1) Consolidated operating results(Percentage figures show year-on-year changes.)
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
Six months ended October 31, 2015
Six months ended October 31, 2014
(Note) Comprehensive income:Million yen%

Million yen%

Million yen%

Million yen%

106,924

21.2

5,901

39.5

6,084

36.7

3,295

30.5

88,2206.3
4,230(15.6)
4,451 (13.8)
Six months ended October 31, 2015: ¥3,290 million (+25.9%)
Six months ended October 31, 2014: ¥2,614 million(-9.3%)

2,525(12.9)

Earnings
per share

Diluted earnings
per share
Yen

Yen

Six months ended October 31, 2015

103.93–Six months ended October 31, 2014

79.64

–

* On October 1, 2014, the Company conducted a 2-for-1 stock split of common shares. Earnings per share is calculated by deeming stock
splits to have occurred at the beginning of the previous fiscal year.

(2) Consolidated financial position
Shareholders’equity ratio

Net assets

Total assets
Million yen

Million yen

Net assets per
share
%

Yen

As of October 31, 2015

133,72150,38537.6

1,584.87

As of April 30, 2015

114,149

48,04642.0

1,511.57(Reference) Shareholders’ equity:

As of October 31, 2015: ¥50,252 million

As of April 30, 2015: ¥47,928 million

2. Dividends

Year ended April 30, 2015

End of firstquarterYen––

End of second
quarter
Yen
0.00

Dividend per share
End of third
quarterYen–

End of year

Full year

Yen

Yen

30.00

30.00

40.00

40.00

0.00

Year ending April 30, 2016
Year ending April 30, 2016
(forecast)(Note) Revision to the most recently announced dividend forecasts: No–

3. Consolidated financial forecasts for the fiscal year ending April 30, 2016 (May 1, 2015 to April 30, 2016)(Percentage figures show year-on-year changes.)
Profit attributable toEarnings
Net sales
Operating income
Ordinary income
owners of parent
per share
Million yen%
Million yen%
Million yen%
Million yen%
Yen
Full year

218,280

16.2

13,40017.0

13,700

17.1

7,230

16.7

228.02(Note) Revision to the most recently announced consolidated financial forecasts: No*Notes(1) Major changes in subsidiaries during the period (changes in specified subsidiaries resulting from changes in scope of
consolidation): No
Newly consolidated: –Excluded: –(2) Application of specified accounting methods for the preparation of quarterly consolidated financial statements: Yes(Note) For detail, please refer to “2. Matters concerning summary information (notes) (2) Application of specified accounting methods forthe preparation of quarterly consolidated financial statements” on page 3 of the Attachment.

(3) Changes in accounting principles, changes in accounting estimates, and restatement of revisions
1) Changes in accounting principles as a result of revisions to accounting standards, etc.:
Yes2) Changes in accounting principles other than 1):
No3) Changes in accounting estimates:
No4) Restatement of revisions:No(4) Number of outstanding shares (common stock)1) Number of outstanding
As of October 31,
shares (including treasury
2015
stock):
2) Number of shares held in
As of October 31,
treasury:
20153) Average number ofSix months ended
shares outstanding:
October 31, 2015

31,888,212 shares As of April 30, 2015

31,888,212 shares

180,595 shares As of April 30, 2015

180,595 shares

Six months ended
October 31, 2014

31,708,190 shares

31,707,617 shares* On October 1, 2014, the Company conducted a 2-for-1 stock split of common shares. Number of outstanding shares (common stock) is
calculated by deeming stock splits to have occurred at the beginning of the previous fiscal year.
*Status of execution of the quarterly review of financial statements
This quarterly financial summary is not subject to the quarterly review procedure based on the Financial Instruments and Exchange Act. Asof the time of disclosure, this review procedure for quarterly financial consolidated statements had not been completed.
*Statement regarding the proper use of financial forecasts and other special remarks
The above forecasts are calculated based on the information available as of the publication date of this material, and actual financial
results may vary due to change in future economic conditions and others.

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2016

Contents of the Attachment
1. Qualitative information on consolidated results for the period under review .......................................................................... 2(1) Consolidated operating results ........................................................................................................................................... 2(2) Consolidated financial position ........................................................................................................................................... 3(3) Forecast of consolidated financial results and other forward-looking information ............................................................... 3
2. Matters concerning summary information (notes) ................................................................................................................... 3(1) Major changes in subsidiaries during the period ................................................................................................................ 3(2) Application of specified accounting methods for the preparation of quarterly consolidated financial statements ................. 3(3) Changes in accounting principles, changes in accounting estimates, and restatement of revisions .................................... 3
3. Quarterly consolidated financial statements ............................................................................................................................ 5(1) Quarterly consolidated balance sheet .................................................................................................................................. 5(2) Quarterly consolidated statements of income and comprehensive income .......................................................................... 7
Quarterly consolidated statements of income ..................................................................................................................... 7
Quarterly consolidated statements of comprehensive income ............................................................................................. 8(3) Quarterly consolidated statements of cash flows ................................................................................................................. 9(4) Notes on quarterly consolidated financial statements ........................................................................................................ 11(Notes on the premise of a going concern) .......................................................................................................................... 11(Notes on significant changes in the amount of shareholders’ equity) ................................................................................. 11(Segment Information, etc.).................................................................................................................................................. 11(Material subsequent events) ............................................................................................................................................... 12

1

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2016

1. Qualitative information on consolidated results for the period under review(1) Consolidated operating results
During the first six months of the current fiscal year (May 1, 2015 to October 31, 2015), the Japanese economy
recovered at a moderate pace, supported by firm consumer spending and improvements in corporate earnings and theemployment market.
In this economic environment, the AIN HOLDINGS Group (the Group) worked to expand its business and increase
earnings. Specifically, the Group opened new dispensing pharmacies and used M&A to expand the business. It also
pushed ahead with the comprehensive development of medical malls and developed its urban drug and cosmetic store
business.
In addition, effective from November 1, 2015, the Group moved to a holding company structure. By separating theGroup’s management and business execution functions, the Group aims to enhance corporate governance, clarify theauthority and responsibility of each business segment and promote greater management autonomy, creating thefoundations for further business expansion.
In the first six months of the fiscal year, net sales rose 21.2% year on year to ¥106,924 million, operating income
increased 39.5% to ¥5,901 million, ordinary income increased 36.7% to ¥6,084 million, and profit attributable to owners ofparent increased 30.5% to ¥3,295 million.
Financial results by business segment are as follows.
(Dispensing pharmacy business)
In the dispensing pharmacy business, sales continued to rise at existing dispensing pharmacies, supported by growth inaverage sales per prescription due to a switch to new medicines.
In order to fulfill the role of dispensing pharmacies at the heart of local communities, the Group is building links with local
medical service providers, mainly in the area of home-based dispensing, stepping up the integration and continuous
management of drug information using patient medication notebooks and other means, and promoting wider use of genericdrugs. The Group is also implementing its pharmacy-led project that reviews and rebuilds all dispensing processes at eachdispensing pharmacy in order to improve efficiency and enhance patient services.
In business development, the Group continued to push ahead with business expansion by opening new dispensing
pharmacies and through M&A deals.
In November 2015, NP HOLDINGS Co., Ltd. (Takamatsu-shi, Kagawa Prefecture) become a subsidiary of the Group.
With a total of 41 dispensing pharmacies mainly in Kagawa Prefecture, NP HOLDINGS is the largest dispensing pharmacy
chain in Shikoku region. The Group intends to use the acquisition of the company to strengthen its network and businessbase in the region.
As a result, for the first six months of the fiscal year, the dispensing pharmacy business reported sales and profit growthwith sales rising 21.0% year on year to ¥95,940 million and segment income increasing 43.5% to ¥8,193 million.
During the period under review, the Group opened 32 new dispensing pharmacies, including those acquired throughM&A deals, and closed five pharmacies, resulting in a total of 781.
(Drug and cosmetic store business)
In the drug and cosmetic store business, the market environment remained challenging due to a narrowing competitive
gap between companies in the sector and the emergence of new competitors from sector consolidation and realignmentthat also extends to other business sectors.
Against this backdrop, the Group continued to open ainz & tulpe urban drug and cosmetic stores, strengthened
merchandise lineups, particularly drug and cosmetics products, and worked to capture inbound demand. As a result,sales at existing drug and cosmetic stores increased year on year.
In addition, the Company will work to reinforce the ainz & tulpe brand by launching new original brands LIPS and HIPS
and cocodecica, and by developing the Ayura brand acquired from Shiseido Co., Ltd.
The Le trois retail facility (Chuo Ward, Sapporo), which was opened in September 2015, saw steady customer trafficand sales, supported by efforts to promote it as a mixed-use integrated beauty complex in Sapporo’s Odori area.
As a result, for the first six months of the fiscal year, the drug and cosmetic store business reported an increase in salesof 18.7% year on year to ¥10,107 million. However, segment loss was ¥183 million, compared with segment income of¥32 million in the same period a year earlier.
In the second quarter of the fiscal year, the Group opened ainz & tulpe MARUI CITY YOKOHAMA (Nishi Ward,
Yokohama), ainz & tulpe SHINJUKU HIGASHIGUCHI (Shinjuku Ward, Tokyo) and ainz & tulpe Le trois (Chuo Ward,
Sapporo) and closed three suburban-type store, resulting in a total of 56 cosmetic and drug stores at the end of thesecond quarter.
2

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2016

(Other businesses)
Net sales and segment loss from other businesses were ¥875 million and ¥444 million, respectively.
(2) Consolidated financial position
The balance of total assets at the end of the second quarter increased by ¥19,571 million from the end of the previous
fiscal year to ¥133,721 million.
This mainly reflected cash on hand and in banks and increases in inventories, property, plant and equipment such as
land, buildings and structures, and trademark rights due to the Group’s business expansion through new store openings
and M&A.
The balance of liabilities increased ¥17,231 million to ¥83,335 million.
The balance of short- term and long-term debts increased by ¥9,787 million to ¥23,758 million.
Total net assets increased by ¥2,339 million to ¥50,385 million and the shareholders’ equity ratio decreased 4.4
percentage points to 37.6%.
(Cash flows)
In the first six months of the fiscal year, cash and cash equivalents (“cash”) increased by ¥11,261 million from theprevious fiscal year end to ¥30,650 million.
Cash flows from each activity and their relevant factors are as follows.
During the first six months of the fiscal year, net cash provided by operating activities was ¥9,221 million, comparedwith ¥4,822 million provided in the same period a year earlier. The main cash inflows were income before income taxes of¥5,825 million, depreciation and amortization of ¥1,417 million, amortization of goodwill of ¥1,339 million. The main cash
outflow was income taxes paid of ¥2,316 million.
Net cash used in investing activities amounted to ¥6,117 million, compared with ¥1,907 million used a year earlier. Thiswas mainly due to payments of ¥4,427 million for the acquisition of property, plant and equipment and intangible fixed
assets and ¥1,131 million for purchases of subsidiaries’ shares resulting in obtaining controls.
Net cash provided by financing activities was ¥8,157 million, compared with ¥3,170 million used a year earlier. The
main cash inflow was ¥9,460 million in net proceeds from short-term and long-term debt repayment and proceeds, while
the main cash outflow was cash dividends paid of ¥951 million.
(3) Forecast of consolidated financial results and other forward-looking information
The Group has made no change to its earnings forecasts for the full fiscal year, announced on May 27, 2015, in light ofearnings trends at new stores and existing stores in the first six months of the fiscal year and future store opening plans.

2. Matters concerning summary information (notes)(1) Major changes in subsidiaries during the period
There are no applicable matters to be reported.
(2) Application of specified accounting methods for the preparation of quarterly consolidated financial statements
Tax expenses were calculated by reasonably estimating the effective tax rate after the application of tax effectaccounting to income before taxes for the consolidated fiscal year including the second quarter, and multiplying theestimated effective tax rate by income before income taxes for the quarter.
(3) Changes in accounting principles, changes in accounting estimates, and restatement of revisions[Application of accounting standard for business combinations, etc.]
The Company has applied the “Accounting Standard for Business Combinations” (Accounting Standards Board ofJapan (ASBJ) Statement No. 21, September 13, 2013), the “Accounting Standard for Consolidated Financial Statements”(ASBJ Statement No. 22, September 13, 2013) and the “Accounting Standard for Business Divestitures” (ASBJ
Statement No. 7, September 13, 2013) from the first quarter of the current fiscal year. As a result, the accounting method
was changed to record the difference arising from changes in the equity in subsidiaries under ongoing control of theCompany as capital surplus, and acquisition-related costs as expenses for the fiscal year in which they are incurred. In
addition, with respect to any business combination entered into on or after the first day of the first quarter under review,
the accounting method was changed to reflect adjustments to the allocation of acquisition cost under provisional
accounting treatment on the consolidated financial statements of the quarterly financial period in which the relevantbusiness combinations became or will become effective. Furthermore, the presentation method for “net income” waschanged, and references to “minority interests” were changed to “non-controlling interests.” To reflect these changes, theCompany has reclassified its quarterly and full-year consolidated financial statements for the first quarter of the previous
fiscal year and the previous fiscal year.
3

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2016

The Company has applied the Accounting Standard for Business Combinations and the other standards in accordancewith transitional provisions in paragraph 58-2(4) of the Accounting Standard for Business Combinations, paragraph44-5(4) of the Accounting Standard for Consolidated Financial Statements and paragraph 57-4(4) of the AccountingStandard for Business Divestitures, prospectively at the beginning of the first quarter under review.
As a result, during the first six months of the fiscal year, operating income, ordinary income and income before
income taxes each declined by ¥70,854 thousand.

4

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2016

3. Quarterly consolidated financial statements(1) Quarterly consolidated balance sheet
Fiscal year endedApril 30, 2015
(As of April 30, 2015)

AssetsCurrent assets
Cash on hand and in banks
Notes and accounts receivable
Merchandise
Supplies
Deferred tax assets
Short-term loans
Other accounts receivable
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures, net
Land
Other property, plant and equipment, net
Total property, plant and equipment
Intangible fixed assets
Goodwill
Other intangible fixed assets
Total intangible fixed assets
Investments and other assets
Investments in securities
Deferred tax assets
Deposits and guarantees
Other investments and other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

5(Thousand yen)Six months ended
October 31, 2015
(As of October 31, 2015)

19,553,423
8,369,451
9,747,115
162,635
894,440
739,342
5,291,030
1,765,517(157,053)
46,365,901

30,806,554
9,199,776
11,855,060
162,850
958,589
621,600
5,819,293
2,058,984(380,424)
61,102,284

11,678,535
7,931,761
2,862,045
22,472,342

14,099,477
8,186,045
3,826,348
26,111,870

26,340,056
1,283,021
27,623,077

26,393,871
2,068,006
28,461,878

2,872,382
984,239
9,710,040
4,644,288(522,385)
17,688,566
67,783,986
114,149,888

2,818,595
1,231,646
9,769,282
5,030,432(804,985)
18,044,971
72,618,720
133,721,005

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2016

Fiscal year endedApril 30, 2015
(As of April 30, 2015)

Liabilities
Current liabilities
Accounts payable
Short-term debt
Accrued income taxes
Deposits received
Allowance for bonuses to employees
Allowance for bonuses to directors
Reserve for reward obligations
Other current liabilities
Total current liabilities
Long-term liabilities
Long-term debt
Net defined benefit liability
Other long-term liabilities
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income (loss)
Unrealized holding gains on securities
Remeasurements of defined benefit plans
Total accumulated other comprehensive income(loss)
Non-controlling interests
Total net assets
Total liabilities and net assets

6(Thousand yen)Six months ended
October 31, 2015
(As of October 31, 2015)

31,826,516
6,330,773
2,320,567
9,052,200
1,353,380
11,751
338,824
3,199,345
54,433,358

36,279,567
17,607,646
2,598,754
9,251,921
1,793,171
11,935359,241
4,845,217
72,747,455

7,640,133
1,636,186
2,393,661
11,669,982
66,103,340

6,150,586
1,995,967
2,441,012
10,587,566
83,335,022

8,682,976
7,872,970
31,639,894(419,311)
47,776,529

8,682,976
7,872,970
33,984,169(419,311)
50,120,804

227,061(75,210)
151,851
118,166
48,046,547
114,149,888

193,856(62,251)
131,605
133,572
50,385,982
133,721,005

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2016

(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statements of income
Six months ended
October 31, 2014
(May 1, 2014 to
October 31, 2014

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Commissions received
Real estate rental revenue
Consignment income
Guarantees received
Other non-operating income
Total non-operating income
Non-operating expenses
Interest expenses
Losses on sales of accounts receivables
Real estate rental expenses
Provision of allowance for doubtful accounts
Other non-operating expenses
Total non-operating expenses
Ordinary income
Extraordinary income
Gains on sales of investments in securities
Gains on sales of fixed assets
Insurance income
Other extraordinary income
Total extraordinary income
Extraordinary losses
Losses on disposal and sales of fixed assets
Impairment losses on investments in securities
Directors’ retirement benefits
Other extraordinary losses
Total extraordinary losses
Income before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

7(Thousand yen)Six months ended
October 31, 2015
(May 1, 2015 to
October 31, 2015)

88,220,201
75,597,751
12,622,449
8,392,240
4,230,208

106,924,364
90,210,692
16,713,672
10,812,265
5,901,407

37,457
23,74523,936
81,732
73,611
131,033
371,517

27,14525,14435,23884,28096,099157,022
181,968
606,899

41,37442,06044,08022,588150,104
4,451,621

41,37939,57543,809282,600
16,767424,133
6,084,173

7,040
1,791
8,831

22,9998,368
2,772
34,14072,695
106,960
82,873
262,529
4,197,922
1,666,657
2,531,265
6,131
2,525,134

167,018
79,00946,597
292,625
5,825,688
2,514,779
3,310,909
15,406
3,295,503

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2016

Quarterly consolidated statements of comprehensive income
Six months ended
October 31, 2014
(May 1, 2014 to
October 31, 2014)

ProfitOther comprehensive income
Unrealized holding gains (losses) on securities
Remearurements of defined benefit plans, net of tax
Total other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

8(Thousand yen)Six months ended
October 31, 2015
(May 1, 2015 to
October 31, 2015)

2,531,265

3,310,909

69,518(33,205)

13,84083,3582,614,624

12,958(20,246)
3,290,663

2,608,493

3,275,257

6,131

15,406AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2016(3) Quarterly consolidated statements of cash flows
Six months ended
October 31, 2014
(May 1, 2014 to
October 31, 2014)

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Increase in defined benefit liability
Increase in allowance for bonuses to employees
Increase in allowance for bonuses to directors
Interest and dividend income
Interest expenses
Losses on disposal and sales of fixed assets
Increase (decrease) in accounts receivable
Increase in inventories
Increase in other accounts receivable
Increase in accounts payable
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Payments for purchases of property, plant andequipment and intangible fixed assets
Proceeds from sales of property, plant andequipment and intangible fixed assets
Payments for purchase of investments in securities
Proceeds from sales of investments in securities
Purchase of subsidiaries’ shares resulting in obtaining
controls
Payments for loans receivable
Proceeds from collections of loans receivable
Payments for time deposits
Proceeds from withdrawal of time deposits
Other, net
Net cash used in investing activities

9(Thousand yen)Six months ended
October 31, 2015
(May 1, 2015 to
October 31, 2015)

4,197,922
1,198,524
1,044,474
61,863
241,5781(61,203)
41,37470,904
959,147(73,306)(41,802)861,459(810,753)
7,690,184
59,301(41,196)(2,885,789)
4,822,499

5,825,688
1,417,501
1,339,030
70,809326,105184(52,290)
41,379144,019(75,008)(1,515,572)(521,028)
3,806,792
721,316
11,528,927
50,576(40, 967)(2,316,854)
9,221,681(1,278,176)(4,427,422)

50,949192,595(30,180)
517,638(4,467)244,773(1,264,857)(1,131,659)(1,080,610)
1,496,342(13,500)
101,313(406,805)(1,907,886)(871,940)
14,110(33,805)
73,771(173,426)(6,117,471)

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2016

(Thousand yen)Six months ended
October 31, 2014
(May 1, 2014 to
October 31, 2014)

Cash flows from financing activities
Net increase (decrease) in short-term debts
Proceeds from long-term debts
Repayments of long-term debts
Repayments of lease obligations
Payments for purchase of treasury stock
Cash dividends paid
Net cash (used in) provided by financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period(161,747)
100,000(1,843,169)(312,931)(1,863)(951,251)(3,170,963)(256,350)
18,735,445
18,479,095

10

Six months ended
October 31, 2015
(May 1, 2015 to
October 31, 2015)

11,732,426
10,000(2,282,003)(351,731)(951,228)
8,157,463
11,261,673
19,389,097
30,650,771

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2016(4) Notes on quarterly consolidated financial statements(Notes on the premise of a going concern)
There are no applicable matters to be reported.
(Notes on significant changes in the amount of shareholders’ equity)
There are no applicable matters to be reported.
(Segment Information, etc.)
I Six months ended October 31, 2014 (May 1, 2014 to October 31, 2014)
1. Net sales and income (loss) by reportable segment
Reportable segments(Thousand yen)
Carried onquarterly
Adjustments
consolidated(Note) 1
statements ofincome(Note) 2

Dispensing
pharmacy

Drug andcosmetic store(1) Sales to third parties

79,261,223

8,514,066

444,910

88,220,201-

88,220,201(2) Intersegment sales--

158,682

158,682(158,682)-

Total sales

79,261,223

8,514,066

603,592

88,378,883(158,682)

88,220,201

Segment income (loss)

5,710,639

32,766(235,627)

5,507,778(1,056,157)

4,451,621

Other

Total

Sales

Notes:

1. The adjustment of ¥(1,056,157) thousand to segment income (loss) includes ¥1,050,263 thousand in corporate
expenses, ¥47,219 thousand in losses that are not allocated to reportable segments, and ¥(41,325) thousand ineliminations due to intersegment transactions.
Corporate expenses consist mainly of expenses associated with the administrative divisions of the parent
company, such as general affairs and accounting divisions.
2. Segment income (loss) is adjusted with the ordinary income of quarterly consolidated statements of income.

2. Impairment losses on fixed assets and goodwill by reportable segment[Significant impairment losses on fixed assets]:
There are no applicable matters to be reported.
[Significant changes in the amount of goodwill]:
The dispensing pharmacy segment includes six dispensing pharmacy companies that have been acquired by theGroup. During the first six months of the fiscal year, the increase in goodwill related to these companies was ¥1,259,144
thousand.
II Six months ended October 31, 2015 (May 1, 2015 to October 31, 2015)
1. Net sales and income (loss) by reportable segment
Reportable segments(Thousand yen)
Carried onquarterly
Adjustments
consolidated(Note) 1
statements ofincome(Note) 2

Dispensing
pharmacy

Drug andcosmetic store(1) Sales to third parties

95,940,867

10,107,600

875,896

106,924,364-

106,924,364(2) Intersegment sales--

155,311

155,311(155,311)-

Total sales

95,940,867

10,107,600

1,031,207

107,079,676(155,311)

106,924,364

Segment income (loss)

8,193,917(183,965)(444,421)

7,565,530(1,481,357)

6,084,173

Other

Total

Sales

Notes:

1. The adjustment of ¥(1,481,357) thousand to segment income (loss) includes ¥1,201,363 thousand in corporate
expenses, ¥333,062 thousand in losses that are not allocated to reportable segments, and ¥(53,069) thousand ineliminations due to intersegment transactions.
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AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2016

Corporate expenses consist mainly of expenses associated with the administrative divisions of the parent
company, such as general affairs and accounting divisions.
2. Segment income (loss) is adjusted with the ordinary income of quarterly consolidated statements of income.
2. Impairment losses on fixed assets and goodwill by reportable segment[Significant impairment losses on fixed assets]:
There are no applicable matters to be reported.
[Significant changes in the amount of goodwill]:
In the dispensing pharmacy business segment, the Company acquired five dispensing pharmacy companies and one
other company. During the first six months of the fiscal year, the increase in goodwill related to these companies was¥1,025,281 thousand.

(Material subsequent events)
Transition to holding company structure
In accordance with a resolution approved by the Board of Directors on June 24, 2015 and an absorption-typecompany split agreement approved by the General Meeting of Shareholders on July 30, 2015, the Company adopted aholding company structure on November 1, 2015. As a result, operations related to the Company’s dispensing
pharmacy and drugstore businesses were transferred to Ain Company Split Preparation Co., Ltd. Effective on the samedate, the company names of AIN PHARMACIEZ INC. and Ain Company Split Preparation Co., Ltd. were changed to
AIN HOLDINGS INC. and AIN PHARMACIEZ INC., respectively.
1. Summary of corporate split(1) Objective of corporate split
The Group is targeting further growth by accelerating business development in the dispensing pharmacy businessthrough new pharmacy openings and M&A and by enhancing the functions of dispensing pharmacies as “dispensing
pharmacies at the heart of local communities,” and by increasing the size of its urban drug and cosmetic stores. The
Group believes a holding company is the best structure to realize sustained growth in corporate value by clarifying theauthority and responsibility of each business segment, promoting greater management autonomy, increasing theGroup’s competitiveness and enhancing corporate governance by separating the Group’s management and businessexecution functions.
(2) Method of corporate split
An absorption-type corporate split, by which the operations of AIN PHARMACIEZ INC. are split and transferred towholly owned consolidated subsidiary Ain Company Split Preparation Co., Ltd.
(3) Date of corporate split
November 1, 2015(4) Business to be transferred
All business divisions excluding the Company’s Group management functions.
2. Summary of accounting treatment
The corporate split has been treated as a transaction under common control in accordance with the “AccountingStandard for Business Combinations” (ASBJ Statement No. 21, September 13, 2013) and the “Guidance on AccountingStandard for Business Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No. 10,
September 13, 2013).

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