Summary of Financial Statements for Fiscal Year Ended April 2010
June 3, 2010
Name of Listed Company: AIN PHARMACIEZ INC.
Exchange Listed on: First Section of Tokyo Stock Exchange and Sapporo Securities Exchange
Code Number: 9627
URL: http://www.ainj.co.jp/
Representative: Kiichi Ohtani, President and Representative Director
Inquiries:
Hiromi Kato, Senior Managing Director and Chief Director of Administration
TEL:+81-11-783-0189
Date of the ordinary general meeting of shareholders: July 29, 2010
Date of scheduled payment of dividends:
July 30, 2010
Date of filing securities report:
July 30, 2010
(Amounts are rounded down to the nearest million yen.)

1. Consolidated results for the fiscal year ended April 2010 (from May 1, 2009 to April 30, 2010)(1) Consolidated operating results(The percentages indicate the rate of increase or decrease compared with the previous fiscal year.)Net salesYear ended April 30, 2010
Year ended April 30, 2009

Operating income

Ordinary income

Net income

Million yen%

Million yen%

Million yen%

Million yen%

125,495
115,387

8.8
8.6

6,492
5,296

22.6
19.2

6,362
5,041

26.2
16.8

3,131
2,127

47.2
31.7

Net income
per share
Year ended April 30, 2010
Year ended April 30, 2009

Return on
shareholders’equityDiluted net income
per share

Ordinary income
to total assets

Operating income
to net sales

Yen

Yen

%

%

%

228.08170.74227.94170.28

16.7
15.1

9.9
8.4

5.2
4.6

(Reference) Equity in earnings of affiliates: Year ended April 30, 2010: ¥ － million, Year ended April 30, 2009: ¥ － million(2) Consolidated financial position
Total assets

Shareholders’ equity
ratio

Net assets

Net assets per share

Million yen

Million yen%

Yen

65,89862,032

21,492
16,10932.5
25.9

1,520.81
1,252.54

As of April 30, 2010
As of April 30, 2009

(Reference) Equity capital: As of April 30, 2010: ¥21,445 million,

As of April 30, 2009: ¥16,071 million(3) Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash and cash
equivalents at end ofyear

Cash flows fromfinancing activities

Million yen

Million yen

Million yen

Million yen

6,428
4,333

(2,700)(757)(1,773)
1,462

11,188
9,234

Year ended April 30, 2010
Year ended April 30, 2009

2. Dividends
Dividends per share(Record date)1Q-end2Q-endYen

3Q-endYen

Year-end

Yen

AnnualDividends Dividends on
payout ratio net assets

Yen

Yen

Million yen

384
564

Year ended April 30, 2010

－
－

－
－

－
－

30.00
40.00

30.00
40.00

Year ending April 30,
2011 (forecast)

－

－

－

45.00

45.00

Year ended April 30, 2009

Total
dividends(annual)(consolidated) (consolidated)
%
%

17.6
17.5

2.6
2.9

16.6

(Note) Breakdown of year-end dividend per share for the year ended April 30, 2010: Commemorative dividend: 5.00 yen

3. Consolidated financial forecast for the fiscal year ending April 30, 2011 (from May 1, 2010 to April 30, 2011)(Percentage figures for the full year are compared with the previous fiscal year, and for the first half, accumulated totals on a consolidated
basis are compared with the same period of the previous fiscal year.)Net salesFirst half
Full year

Operating income

Ordinary income

Net income
per share

Net income

Million yen%

Million yen%

Million yen%

Million yen%

Yen

63,500137,750

6.3
9.8

3,340
7,800

17.3
20.1

3,250
7,650

17.6
20.2

1,560
3,820

15.6
22.0

110.61270.84-1-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

4. Others(1) Major changes in subsidiaries during the fiscal year (changes in specified subsidiaries resulting in changes inscope of consolidation): None
(2) Changes in accounting principles, procedures and presentation methods used in preparation of theconsolidated financial statements
1) Changes as a result of revisions of accounting standards: None
2) Changes other than 1):
None(3) Number of outstanding shares (common stock)1) Number of outstanding shares at the end of the fiscal year (including treasury stock):
As of April 30, 2010: 14,104,106 shares,
As of April 30, 2009: 12,834,106 shares
2) Number of shares held in treasury at the end of the fiscal year:
As of April 30, 2010: 2,942 shares,
As of April 30, 2009: 2,730 shares(Reference) Overview of non-consolidated results
1. Results for Fiscal Year Ended April 2010 (from May 1, 2009 to April 30, 2010)(1) Non-consolidated operating results(The percentages indicate the rate of increase or decrease compared with the previous fiscal year.)Net salesYear ended April 30, 2010
Year ended April 30, 2009

Year ended April 30, 2009

Ordinary income

Net income%

Million yen%

Million yen%

Million yen%

60,36255,874

8.0
2.7

1,831
1,629

12.4
31.0

2,173
1,814

19.8
13.4

965
620

55.7
59.3

Net income per
share
Year ended April 30, 2010

Operating income

Million yen

Diluted net income per
share

Yen

Yen

70.32
49.76

70.27
49.63

(2) Non-consolidated financial position
Total assets
As of April 30, 2010
As of April 30, 2009

Net assets

Shareholders’ equity
ratio

Net assets per share

Million yen

Million yen%

Yen

52,54550,66815,854
12,65430.2
25.0

1,124.36
986.18(Reference) Equity capital: As of April 30, 2010: ¥ 15,854 million, As of April 30, 2009: ¥12,654 million* 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 from the forecast figures due to changes in economic conditions and other factors.

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AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

1. Operating results(1) Analysis of operating results
During the fiscal year ended April 30, 2010, the Japanese economy showed a steady rally with improving
corporate earnings accompanied by a recovery in overseas economies, but at the same time faced ongoingdifficulties with a severe employment situation and risks including fears of a downswing in overseas economies.
Against this economic background, the AIN PHARMACIEZ Group undertook an active program of new
dispensing pharmacy and urban drug store openings while also enhancing its flexibility and financial structure in
readiness for further expansion with measures that included internal restructuring and an increase in its capitalthrough a public offering of ¥2.4 billion.
In addition, the Company registered its stock on the first section of the Tokyo Stock Exchange on April 2, 2010,
and became a listed company on the Sapporo Securities Exchange on May 24, 2010.
In terms of results for the fiscal year under review, through the opening of new dispensing pharmacies andurban drug stores as well as increased sales at existing stores of dispensing pharmacies, we achieved thehighest records both in sales and profits with the net sales of ¥125,495 million (up 8.8% year on year), ordinary
income of ¥6,362 million (up 26.2% year on year), net income of ¥3,131 million (up 47.2% year on year).
Performance by business segment was as follows.

(Pharmaceutical business)
The pharmaceutical business performed well in both new and existing dispensing pharmacies thanks to a steadybase of patients and to the rise in prescription prices associated with the extension of prescription terms.
In addition to the revisions to drug prices and prescription dispensing fees in April 2010, the upcoming two-year
period during which graduates will be unavailable because of the change to a six-year system at pharmacology
faculties. In order to address these issues, the Group made solid efforts to recruit newly-graduated pharmacists
in a large scale, improve safety and efficiency and to strengthen the profitability of pharmacies.
The April 2010 revision of prescription dispensing fees is part of a move toward greater use of generic drugs
and is intended to gradually increase these fees to compensate for the increased use of generic drugs. However,the Group has from an early stage actively promoted the use of generic drugs.
In addition to having its dispensing pharmacies endeavor to increase the use of generic drugs throughcommunication with patients, the Group also expects to improve profitability through the supply system operated
by WHOLESALE STARS Co., Ltd., a wholesaling subsidiary that specializes in generic drugs.
Regarding pharmaceutical facilities, we have introduced automatic medicine picking machines (a general term
for fully automated machines for dispensing packaged pharmaceuticals) as a trial. Following the evaluation ofsafety and efficiency of automating the dispensing process by such trials, these machines will be installed in large
stores from the next term.
The Group has also promoted restructuring among subsidiaries in order to enhance profitability throughimproving the flexibility and efficiency of our marketing organization and reducing management costs. AIN
MEDICAL SYSTEMS Inc. (Tokyo, surviving company) merged with Rejoice Inc. (Tokyo) on August 1, 2009 and
AIN TOKAI Inc. (Nagoya, surviving company) merged with Rejoice Pharmacy Inc. (Kyoto) on October 1, 2009
(the company name subsequently changed to AIN MEDIO Inc.), and AIN MEDIO Inc. (surviving company)
merged with SUNWOOD Co., Ltd. (Toyama City) on April 1, 2010.
In the fiscal year under review, we continued active new store openings and business development with 24-3-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

store openings and closure of 2 stores. As a result, the Group had 397 dispensing pharmacies in operation in
total.
No large-scale mergers or acquisitions were undertaken because of a lack of candidates that matched our
return-on-investment and other criteria due to factors such as rising prices in the industry. However, we achieved
increases both in sales and profits with net sales of ¥111,602 million (up 9.6% year on year) and operating
income of ¥ 8,330 million (up 23.2% year on year).

(Product sales business)
In the product sales business, many drug stores have been affected to some degree by slack consumption
nationwide and by the entry into the pharmaceutical retail market of players from outside the industry due torevisions to the Pharmaceutical Affairs Law that came into force in June 2009.
The Company has added a range of supplementary beauty products centering on cosmetics (generalcosmetics and regulated cosmetics involving counseling sales) at its “Ainz & Tulpe” urban drug stores and“Tulpe” cosmetic specialty stores, while continuing to open new stores at commercial facilities in urban areas
across the country under a wide variety of store concepts in tune with the latest fashions.
Our business partnership with Seven & i Holdings Group has moved forward in several areas. These include
the establishment of Seven Health Care Co., Ltd. through joint capital investment, joint development of Seven’s
Garden of Beauty based on the concept of “Ainz & Tulpe” in Ito-Yokado stores, renovation of Hirokoji Place Storeof “Ainz & Tulpe” (Nagoya City) to incorporate a Seven-Eleven store, and the opening of a Ikebukuro Seibu Storein November 2009 which is the Company’s first store opened inside a department store.
Although “Ainz & Tulpe” and “Tulpe” operate in a different market to ordinary drug stores that mainly sell
pharmaceuticals and household goods and are therefore largely unaffected by the revised Pharmaceutical Affairs
Law, most existing stores suffered lower sales than the previous year due to growing price sensitivity amongst
consumers.
We are continuing to improve the profitability in existing stores mainly through the sales measures based on
new merchandise, inventory adjustment to ensure a proper level, and efficient sales promotion activities byutilizing the Ainz Point Club Card.
In the fiscal year under review, we opened 5 new stores in total, including Ikebukuro Seibu and other 3 “Ainz& Tulpe” stores and 2 “Tulpe” stores while closing 2 small stores. The total number of drug stores including a
subsidiary AIN MEDIO Inc. was 49.
The Ainz Point Club Card, serving as an indicator of the number of customers, has more than 2.02 million
members, in which 290 thousand members were added from the year-ago period.
Buoyed by income from new stores, net sales reached ¥13,619 million (up 2.8% year on year), although theoperating loss was ¥493 million (operating loss of ¥289 million for the previous fiscal year).

(Other businesses)
Net sales of other businesses were ¥273 million (up 5.6% year on year) and operating loss was ¥76 million(Operating loss of ¥82 million for the previous fiscal year).

For the next fiscal year, we plan to open around 60 stores in total including dispensing pharmacies andurban drug stores by further promoting the business development both in the pharmaceutical and product-4-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

sales businesses in order to expand the Group’s operational scale.
At the same time, we will enhance our profitability by streamlining our business operations through cooperation
between Group companies, promoting generic drugs and improving product sales business performance.
With these measures, the Group’s performance for the next fiscal year is expected to be the highest everboth in sales and profits with the net sales of ¥137,750 million (up 9.8% year on year), ordinary income of¥7,650 million (up 20.2% year on year), and net income of ¥3,820 million (up 22.0% year on year).

(2) Analysis of financial position
1) Assets, liabilities and net assets
Consolidated current assets at the end of the fiscal year under review increased by ¥3,071 million to ¥31,242
million compared to ¥28,170 million at the end of the previous fiscal year.
This was the result of efforts to improve liquidity on hand to provide flexibility for store openings and M&As, andrepresented an increase in cash on hand in the banks of ¥11,188 million (up ¥1,954 million year on year). In
addition, the expansion in the number of dispensing pharmacies and drug stores has resulted in an increase inboth notes and accounts receivable to ¥9,269 million (up ¥709 million year on year) and merchandise andsupplies to ¥6,938 million (up ¥1,009 million year on year).
Consolidated fixed assets at the end of the fiscal year under review increased by ¥780 million to ¥34,642
million compared to ¥33,862 million at the end of the previous fiscal year.
This is mainly because of the increase in tangible fixed assets to ¥12,510 million (up ¥272 million year on year)
due to investments related to new stores, and the increase in investment securities to ¥2,802 million (up ¥745
million year on year) due to capital investments in affiliated companies.
The balance of unamortized goodwill at the end of term is ¥12,154 million (down ¥680 million year on year).
Liabilities decreased by ¥1,517 million to ¥44,406 million compared to ¥45,923 million at the end of the previous
year.
The primary cause of this decrease was that, although accounts payable increased to ¥19,666 million (up ¥954
million year on year) due to the greater number of stores and higher profits and accrued income taxes increasedto ¥1,709 million (up ¥445 million year on year), interest-bearing debts decreased with the balance of short-term
debts reducing to ¥6,549 million (down ¥1,027 million year on year), long-term debts to ¥8,427 million (down¥2,539 year on year) and the completion of bond redemption (balance at the same period of the previous fiscal
was ¥140 million).
As a result of the above, the balance of current liabilities increased by ¥737 million from the previous
year-end balance of ¥33,402 million to ¥34,140 million, and the balance of long-term liabilities decreased by¥2,254 million from the previous year-end balance of ¥12,521 million to ¥10,266 million.
Net assets increased by ¥5,382 million to ¥21,492 million compared to ¥16,109 million at the end of theprevious fiscal year.
This was because the public stock offering and exercise of subscription rights to shares increased the capitalstock to ¥6,308 million (up ¥1,251 million year on year) and the capital surplus to ¥5,498 million (up ¥1,251
million year on year) while the balance of retained earnings rose to ¥9,874 million (up ¥2,746 million year onyear) due to the growth of retained earnings in the current fiscal year.
Net unrealized losses on available-for-sale securities totaled ¥231 million.
As a result of the above factors, the consolidated shareholders’ equity ratio was 32.5%, compared with-5-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

25.9% at the end of the previous fiscal year.

2) Cash flows
During the fiscal year under review, consolidated cash and cash equivalents (hereunder “cash”) increased by¥1,954 million (up 21.2% year on year) from the previous fiscal year to ¥11,188 million. This is due to theincreased business cash-flow resulting from higher Group profits, and improvements to the Group’s financial
structure and better liquidity in preparation for further business expansion.
Cash flows from each category and their relevant factors are as follows.

(Cash flows from operating activities)
Net cash provided by operating activities was ¥6,428 million (up 48.3% year on year).
The main factors generating inflow were income before income taxes and minority interests of ¥6,105 million,
depreciation and amortization of ¥1,286 million, amortization of goodwill of ¥878 million, and increase inaccounts payable of ¥954 million. This increase was attributable to the higher profit resulting from new store
openings.
The main factors generating outflow were the increase of ¥1,009 million in inventories and ¥2,712 million inincome and other taxes paid.

(Cash flows from investing activities)
Net cash used in investing activities was ¥2.7 billion (up 256.5% year on year)
This reflects the payments of ¥471 million for purchases of shares in subsidiaries and affiliates, including thecapital investment in the establishment of Seven Health Care Co., Ltd., and ¥1,606 million for the acquisition of
fixed assets associated with the new store openings including urban drug stores and dispensing pharmacies.

(Cash flows from financing activities)
Net cash used in financing activities was ¥1,773 million (inflow of ¥1,462 million in the previous fiscal year).
This was mainly because of an inflow of ¥2,484 million attributable to the issuance of new shares associatedwith the public stock offering and exercise of stock options.
In terms of interest-bearing debts, the following net figures for borrowings and repayments are reflected in
the results: ¥1,090 million repaid for short-term borrowings, ¥2,476 million repaid for long-term borrowings, and¥140 million payments associated with the redemption of bonds.
There was also an outflow of ¥384 million in dividends paid.
Changes in the Group’s cash flow indicators are shown below.
Year ended
Year endedApril 30, 2007
April 30, 2008
Equity ratio (%)
21.5
20.9
Equity ratio based on market value
34.1
29.4
(%)
Debt redemption term (years)
8.1
2.2
Interest coverage ratio (times)
11.5
23.2
(Notes) Equity ratio = Equity capital / total assets
Equity ratio based on market value = market capitalization / total assets
Debt redemption term = interest-bearing debt / operating cash flows
Interest coverage ratio = operating cash flows / interest paid
*All indicators are calculated based on consolidated financial data.

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Year endedApril 30, 2009
25.9

Year endedApril 30, 2010
32.5

30.6

62.5

4.3
12.0

2.3
22.1

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010
*Interest-bearing debt includes all liabilities recorded on the balance sheet on which interest is being paid.
*Operating cash flows and interest paid were calculated using the cash flows from operating activities and the interest paidon the consolidated statements of cash flows.

(3) Basic policies for profit distribution, and dividends for the fiscal year under review and the following fiscal year
The Company considers the return of profits to shareholders as an important management issue. Our basic
policy is to repay our investors proportionate to the profit we make, and to maintain these at stable levels.
Internal reserves are held to strengthen the corporate structure and in preparation for new store openings
and future development of the business. We will make effective use of these funds to generate profits to be
returned to shareholders in the future.
The Company’s basic policy is to pay dividends from retained earnings once per year at the end of the fiscal
year. The year-end dividend to be paid is determined at the ordinary general meeting of shareholders, andinterim dividends are set at the Board of Directors’ meeting. Further, the Company has stated in its Articles ofIncorporation that “When approved by the Board of Directors’ meeting, interim dividends may be paid based ona record date of 31st October each year.”In regard to dividends from retained earnings in the fiscal year under review, we plan to pay ¥40 per share in
total, comprised of ¥35 per share as ordinary dividend (increase of ¥10 per share over the previous fiscal year)and ¥5 per share as commemorative dividend for the Company’s listing on the First Section of the Tokyo Stock
Exchange.
In view of our performance forecasts, ordinary dividends from retained earnings for the following fiscal year
are planned to be ¥45 per share, an increase of ¥10 from the previous term’s ordinary dividends (a 1.3 point
increase in the dividend payout ratio for common stock).

(4) Business and other risks
The following factors may influence the Group’s operating results, stock price and financial position.
Statements in the text referring to the future reflect the judgment of the Group at the end of the fiscal year
under review.

1) Statutory regulations(i) Regulations under the Pharmaceutical Affairs Law and other laws.
We operate insurance pharmacies and dispensing pharmacies (hereunder “insurance and dispensing
pharmacies”) under various permits, licenses, registrations and notifications including those set forth by the
Pharmaceutical Affairs Law, the Health Insurance Law, and the Pharmacists Law, under the supervision of
the Ministry of Health, Labour and Welfare, and of prefectural health and welfare departments.
The drug store business in our product sales business also involves sales of pharmaceuticals, which aresimilarly regulated under the Pharmaceutical Affairs Law.

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AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

The main ones are as follows.
Approval, registration, appointment,
license or notification

Term ofvalidity

Related law or ordinance

Permit to open a pharmacy

6 years

Pharmaceutical Affairs
Law

Prefectural Governors

Insurance pharmacy certification

6 years

Health Insurance Law

Prefectural Social
Insurance Bureau
Heads

License to sell narcotic drugs
Notification of sales of medical
equipment
Business selling highly controlled
medical equipment
Medical product sales permit (notes)

Narcotics andPsychotropics Control
Law
Pharmaceutical Affairs
Indefinite
Law
Pharmaceutical Affairs
6 years
Law
Pharmaceutical Affairs
6 yearsLaw
2 years

GrantorPrefectural Governors
Prefectural Governors
Prefectural Governors
Prefectural Governors,
etc.

(Notes) Under Article 25 of the Pharmaceutical Affairs Law, medical product sales permits fall into the three categories:
Storefront Sales, Household Medicine Sales and Wholesale Distribution. The Group’s product sales business has apermit for Storefront Sales under this law and also for the General Sales and Drug Trade and Sales categories fromthe previous law which is allowed under the “Law for Partial Revision of the Pharmaceuticals Affair Law,” (Law 69 of2006, June 14, 2006). If the Group becomes the subject of an order of revocation or suspension of business license by
the competent authorities due to an act committed in the Group’s insurance and dispensing pharmacies and drug
store business, which constitutes a violation of law set forth in Paragraph 1, Article 75 of the Pharmaceutical Affairs
Law, items in Article 80 of the Health Insurance Law, or Paragraph 1, Article 51 of the Narcotics and Psychotropic
Control Law, the Group’s business performance may be affected.

(ii) Deregulation of pharmaceutical sales
Under the “Law for Partial Revision of the Pharmaceutical Affairs Law,” (Law 69 of 2006, June 14, 2006)
which includes a review of the sales system for over-the-counter (OTC) drugs; OTC drugs are categorized
into three groups by risk. Sales of the two lower-risk categories of pharmaceuticals by a “Registered
Vendor,” not requiring a pharmacist, have become possible. In the future as well, factors such as the entry
into the market of firms from other industries, as a result of a continuing trend to deregulate pharmaceuticalsales, could have an impact on the Group’s performance.

2) Details of businessIn the Group’s pharmaceutical business, we have a chain of insurance and dispensing pharmacies based ona scheme, where insurance and dispensing pharmacies are located near medical institutions forconcentrating on the prescriptions from the certain medical institutions to secure demand.
As the pharmaceutical business accounted for 88.9% of net sales in the fiscal year under review, we plan
to continue the multi-store operation mainly based on the dispensing pharmacies. Accordingly, the Group’s
operating results may be affected by the success or failure of the store opening policies and by trends incompetitors’ store openings.
Furthermore, sales of dispensing pharmacies significantly depend on the medical institutions that write
prescriptions. Therefore, some hard-to-predict factors including the issuance of prescriptions for extramuraldispensing by the medical institutions who are our major customers or suspension/discontinuation ofoperations thereof may affect the Group’s performance.

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AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

3) Industry trends
The revenues in our pharmaceutical business come from dispensing operations, involving the dispensing andsupplying of prescription pharmaceuticals based on prescriptions. The prices of those pharmaceuticals (drugprices) and remuneration levels are set by the Ministry of Health, Labour and Welfare. As a way to confine
national medical expenses, both remuneration for medical treatments and drug prices tend to be revised instages. Changes in profit structure resulting from factors such as revisions in the treatment remuneration
system could continue to have an impact on the Group’s performance and financial position.

4) Retention of qualified staff
Dispensing pharmacies and drug stores (Stores for Category 1 Drugs) are required by the Pharmaceutical
Affairs Law to have a pharmacist on site; the Pharmacists Law stipulates that the dispensing of medicinesmust be handled by a pharmacist. The Group continues to have a policy of expansion by aggressively
opening new stores, but failing to secure qualified pharmacists could have an impact on the Group’s new
store opening plans and performance.

5) Risks of loss of trust in the Company(i) In the dispensing operation
In our pharmaceutical business, pharmacists dispense and supply prescription drugs that affect the humanbody. This business carries the risk that medical accidents might be caused through errors in dispensing
drugs.
The Group recognizes that any medical accidents could have a severely damaging effect on society’s
confidence in the Group, and we place the highest priority on measures to prevent this risk frommaterializing.
Primary risk prevention measures are as follows.
•

Training programs for new hires, including a 3-month training program for newly-graduatedpharmacists and programs for mid-career pharmacists•

A continuing training program aimed at improving skills of pharmacists•

Pharmacy manager conferences attended by all pharmacy managers, to nurture supervisors•

Development and introduction of pharmacy tools that make use of information technology, such as
the deployment of a prescription dispensing error prevention system (PhAin) using Personal Digital
Assistants (PDAs), developed jointly with manufacturers of dispensing equipment, and a prescription
reading system that makes use an optical character recognition (OCR) and 2D barcode (QR code)•

Use of in-house manuals for the dispensing operation and a system of observing rules set by theInternal Audit Office•

Establishment of a Safety Policy Office specializing in measures to prevent prescription dispensing
errors(ii) Protection of personal data
In the pharmaceutical business, we hold patient data including medical histories and prescription
information, and in the product sales business, we hold customer data obtained from the Ainz Point Club
Card operation.
The Group has taken all possible measures to secure the personal data by completing development of-9-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

personal information protection systems and rules for the handling of such information and the Company
acquired the “Insurance, medical and welfare sector PrivacyMark.”
However, we believe it is possible that any accidental or criminal leakage of personal data may not only
affect our business performance but also lead to a loss of society’s confidence in the Group.

6) Risk in business strategy
We have promoted the expansion of operational scale through active new store openings and M&A on
dispensing pharmacies.
Our basic policies in the M&A strategy require us to carefully examine target companies and determine theamount to be paid for acquisitions thereof in order to stably secure a profitability level that exceeds theamortization of goodwill to be incurred. If things do not go as well as we expected, however, we may incur
losses due to the valuation of subsidiaries’ shares and impairment loss on goodwill, which may have an
adverse impact on the Group’s operating results and financial position.

7) Risk of financial fluctuation
In the Group’s promoted business expansion based on active new store openings and M&A, costs forordinary store openings are covered by its own resources within the range of operating cash flow whilelarge-scale M&A cases are partially financed by borrowings from financial institutions.
In order to deal with the capital requirements flexibly, the Group has enhanced the liquidity on hand while
increasing our capital through a public offering, and as of the end of the fiscal year under review, the balance ofinterest-bearing debts of the Group was ¥14,976 million against cash on hand in banks of ¥11,188 million.
As a result of the above, our net D/E ratio (which indicates our dependence on borrowing) is 0.05, where
D/E ratio is defined as (interest-bearing debts – (cash on hand in banks + investment securities) /shareholders’ equity).
In regards to implementing M&A, we have endeavored to reduce interest-bearing debts with an emphasison the potential return on investment, however, if the Group fails to secure an adequate return on its M&A
investment, or due to interest rate fluctuations associated with conditions in financial markets, the Group’s
financial position and operating results including interest payable may be affected.

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AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

2. State of the GroupThe Group consists of AIN PHARMACIEZ Inc. (the Company), 13 subsidiaries and 3 affiliated companies.
(1) Pharmaceutical business
The Company operates and franchises dispensing pharmacies, and engages in consulting on the opening ofdispensing pharmacies.
The subsidiaries AIN MEDICAL SYSTEMS Inc., AIN MEDIO Inc., MEDICAL HEARTLAND Co., Ltd.,DAICHIKU Co., Ltd., Asahi Pharmacy Co., Ltd., SUNWOOD Co., Ltd., MIYAKO AIN Inc. and Saitama ChozaiCo., Ltd. operate dispensing pharmacies.
Subsidiary MEDIWEL Corp. is a medical-related consulting business and is engaged in staff dispatching andintroduction, primarily of doctors and pharmacists, subsidiary United Healthcare Co., Ltd. is a medical-related
consulting business, and subsidiary WHOLESALE STARS Co., Ltd. sells generic drugs, etc.
In the fiscal year under review, AIN MEDICAL SYSTEMS Inc. merged with Rejoice Inc., while AIN TOKAI Inc.
merged with Rejoice Pharmacy Inc. and changed its business name to AIN MEDIO Inc.
Also, SUNWOOD Co., Ltd. became a defunct company following its merger with AIN MEDIO Inc. as of April
1, 2010.
(2) Product sales businesses
The Company and AIN MEDIO Inc. engages in the management of drug stores (selling pharmaceuticals,
non-medicinal products, cosmetics, food, life-style products, etc.), and in consulting related to theestablishment of shopping centers.
(3) Other businesses
The Company and subsidiaries of AIN AID Inc. and NICE AIN Inc. are in the building leasing business.
In addition, the subsidiary AIN AID Inc. was entrusted with part of the Company’s drug store operations, andanother subsidiary, NICE AIN Inc., was engaged in part of the sales activities of AIN MEDIO Inc. inaccordance with the business consigning contract between the two companies. However, the businessconsigning relationships between the Company and AIN AID Inc. and between NICE AIN Inc. and AIN MEDIO
Inc. were terminated as of June 1, 2009, the date on which the revision to the Pharmaceutical Affairs Law
came into force.

An organization chart of the business is as follows.

- 11 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

Dispensing and sales of pharmaceuticals

AIN MEDIO Inc.

*1

*1

MEDICAL HEARTLAND Co., Ltd.

*1DAICHIKU Co., Ltd.

*1

Asahi Pharmacy Co., Ltd.

*1SUNWOOD Co., Ltd.

*1MIYAKO AIN Inc.

*1

Saitama-Chozai Co., Ltd.

*1YAGI PHARMACY Inc.

*2

MEDIWEL Corp.

*1

United Healthcare Corporation*1

ProCare Co., Ltd.

*2

Staff dispatching andintroduction business/
Medical consulting
Medical consulting
Medical consulting*1

AIN AID Inc.

*1
Building leasing
Building leasing*2 affiliated company not accounted under the equity method- 12 -

Contract
counterparties

Other business

NICE AIN Inc.

Sales of pharmaceuticals, etc.
*2Consumers

Sales of pharmaceuticals, etc.

Seven Health Care Inc.

(Notes) *1 consolidated subsidiary

Dispensing
and sales ofpharmaceuticalsContract
counterparties

Product sales
business

Building leasing

Pharmacies/
Medicalinstitutions*1

Patients

WHOLESALE STARS Co., Ltd.

AIN PHARMACIEZ Inc.

Pharmaceutical business

Sales of generic drugs, etc.

AIN MEDICAL SYSTEMS Inc.

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

3. Management policies(1) Basic management policies of the Company
The Company’s main businesses are the insurance and dispensing pharmacies business, which dispense
based on prescriptions, and the drug store business of selling products, primarily pharmaceuticals andcosmetics. Because both of these businesses contribute to people’s health, we bear an important social
responsibility.
We believe the Company’s mission is not only to grow its profits and increase shareholder value throughaggressively opening new stores as the separation of dispensary from medical practice improves, but also towork for continuous improvements in safety and specialized skills in this business, given that we are a
Company that can affect people’s lives.
Accordingly, our basic management policy is “to fulfill our social mission by working to eliminate medicine
dispensing errors and other business risks, and by creating pharmacies that customers can be confident invisiting, while placing weight on actively expanding the business in accordance with market conditions.”(2) Target management indicators
While working to expand our corporate scale by actively opening new stores, the Group also focuses on
strengthening its financial structure and increasing shareholder value.
The Group had previously set goals to meet ROA 4.5% and ROE 15.5%, and in the fiscal year ended April
30, 2010, we achieved our goal with ROA of 4.9% and ROE of 16.7%.
(3) The Group’s medium- to long-term management strategies
The Group’s core businesses are the nationwide development of dispensing pharmacies through active newstore openings and M&A activities, and the development of urban drug stores, focusing primarily on cosmetics,
in major cities across Japan. We aim both to expand the scale of these businesses and to increase
shareholder value.
In the dispensing pharmacies business, our policy is for group companies to continue to grow sales by
opening dispensing pharmacies located just outside medium- and large-scale medical institutions in theirregions, and to pursue actively, after careful consideration, further M&A opportunities we envision in thisindustry in the future.
The Group has a policy of expanding still further the utilization of generic drugs and has actively promoted
their greater utilization through a sales system for generic drugs at WHOLESALE STARS Co., Ltd., awholesaling subsidiary that specializes in generic drugs, and by strengthening awareness amongst patients
throughout all Group pharmacies.
In addition, we will work to assure the safety of our patients, to improve customer service and to increasebusiness efficiency by reinforcing education and training, and by developing and introducing medicine
dispensing equipment using the latest technology.
In the product sales business, we are aiming at further expansion by opening stores in major cities acrossthe country, mainly using the “Ainz & Tulpe” urban drug store format and the new-format “Tulpe” specialty
stores of cosmetics, and by clearly differentiating these stores from other drug stores by the range of
cosmetics they offer.
As a result of the above, our medium- to long-term management strategies are based on the following
policies.
1) As a Group, we will open approximately 50 dispensing pharmacies per year, mainly in close proximity to- 13 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

core regional hospitals. We will also aim to expand the scale of our business by growing our sales,
keeping M&As in our mind.
2) We will actively promote the introduction into the Group of the latest dispensing equipment anddeveloping dispensing technologies that make use of IT, and improve customer safety, service and theefficiency of pharmacy management through the integrated application of individual devices and systems.
3) We will enhance our profitability with improving flexibility and operational efficiency through streamlining
measures such as organizational restructuring and personnel exchanges. We will also enrich mutuallycomplementary cooperative systems for operations that are common across multiple companies such as
our systems for opening new stores that suit their locations, recruitment of pharmacists and expanding theuse of generic drugs.
4) In the product sales business, we will open approximately 10 stores nationwide per year, together with theurban drug stores “Ainz & Tulpe” and the cosmetic specialty stores “Tulpe”, to differentiate ourselves fromcompetitors.
5) We will aim to improve store profitability by expanding customer numbers through the Ainz Point Club
Card and effective sales promotion using a combination of online media and print advertising.

(4) Issues to be addressed
Average drug prices dropped by 5.75% under the April 2010 revision to the official drug prices and prescription
dispensing fee, and use of the cost-plus fee system is gradually increasing in accordance with the utilization
ratio of generic drugs.
These revisions have acted to reduce income and increase profits for pharmacies on average, but the Group
has achieved increased income through business expansion, reforming its organization and exchanging
personnel throughout the Group, endeavoring to improved the flexibility of its business development
operations, and actively pursuing a program of new store openings.
Moreover, by sharing information on the state of generic drug usage throughout the Group’s stores,
expanding activities to promote their use and synergies with our wholesaling subsidiary WHOLESALE STARS
Co., Ltd. that specializes in generic drugs, we are striving to further strengthening of our profitability.
Regarding pharmacist recruitment, the shift to a six-year system at pharmacology faculties will result in aperiod during which newly-graduated pharmacists will be unavailable, meaning the number of recruits for thisyear and next will be limited.
The Group has made moves to secure extra recruits over the last few years to ensure that we are in aposition to expand our business over this period of unavailability, while also aiming at improving work safety
and efficiency through operational streamlining, promotion of automation for dispensing services and actively
introducing the most advanced dispensing machines.
The product sales business continues to expand the urban drug store “Ainz & Tulpe” format and the “Tulpe”
cosmetic specialty stores, and we will attempt to enlarge the scale of our sales.
In addition, as part of our partnership with Seven & i Holdings Co., Ltd., we have established partial
collaboration in product purchasing and shared use of our distribution centers, while working to improvemerchandise and profits through our Ainz Point Club Cards and new effective sales promotions such as theactive utilization of our web-site. Through these efforts, we will quickly return to positive profits.

- 14 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

4. Consolidated financial statements(1) Consolidated balance sheets(In thousand yen)Previous fiscal year
(As of April 30, 2009)
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
Tangible fixed assets
Buildings and structures
Accumulated depreciation
Buildings and structures, net
LandConstruction in progress
Other tangible fixed assets
Accumulated depreciation
Other tangible fixed assets, net
Total tangible fixed assets
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
Deferred assets
Stock issuance cost
Total deferred assets
Total assets

9,234,052
8,560,181
5,832,459
96,387
631,776
613,327
2,409,241805,376(12,059)
28,170,743

11,188,462
9,269,803
6,841,202
96,821
723,032
892,880
1,404,247
850,723(24,957)
31,242,215

10,018,766(4,031,246)
5,987,520
4,958,767
208,840
2,734,244(1,650,933)
1,083,311
12,238,439

10,382,023(4,388,578)
5,993,445
5,001,721
315,331
3,139,820(1,939,520)
1,200,300
12,510,799

12,835,388
657,926
13,493,314

12,154,420
923,368
13,077,789

2,057,061
892,856
4,496,234
952,859(268,587)
8,130,424
33,862,179

2,802,672
995,611
4,462,540
1,013,395(220,215)
9,054,003
34,642,592－－

14,042
14,04265,898,850

62,032,922- 15 -

Current fiscal year
(As of April 30, 2010)

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010
(In thousand yen)Previous fiscal year
(As of April 30, 2009)
Liabilities
Current liabilities
Accounts payable
Short-term debt
Current portion of bonds
Accrued income taxes
Deposits received
Allowance for bonuses to employees
Allowance for bonuses to directors
Allowance for point certificates
Other current liabilities
Total current liabilities
Long-term liabilities
Long-term debt
Allowance for retirement benefits
Other long-term liabilities
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Valuation and translation adjustments
Unrealized holding gains (losses) on available-for-salesecurities
Total valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets- 16 -

Current fiscal year
(As of April 30, 2010)

18,712,606
7,576,357
140,000
1,263,593
2,841,871
800,017
43,114273,137
1,751,482
33,402,179

19,666,791
6,549,284－
1,709,338
3,036,027
875,171
21,072
297,728
1,984,635
34,140,049

10,966,271
863,110692,253
12,521,635
45,923,815

8,427,212
1,017,997
821,540
10,266,750
44,406,799

5,057,046
4,247,040
7,127,988(3,912)
16,428,163

6,308,456
5,498,450
9,874,264(4,445)
21,676,725(356,413)(231,603)(356,413)
37,357
16,109,107
62,032,922(231,603)
46,92921,492,051
65,898,850

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

(2) Consolidated statements of income(In thousand yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Advertising expenses
Promotion expenses
Salaries and bonuses
Provision for doubtful accounts
Provision for bonuses
Provision for directors’ bonuses
Provision for retirement benefits
Provision for point certificates
Legal and employee benefits expenses
Correspondence and transportation expenses
Lease expenses
Rent expenses
Depreciation expenses
Amortization of goodwill
Taxes
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Commissions received
Real estate rental revenue
Gain on donation of fixed assets
Consignment income
Other non-operating income
Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of receivables
Loss on funds managed in investment partnerships
Real estate rental expenses
OthersTotal non-operating expenses
Ordinary income- 17 -

Previous fiscal year
(From May 1, 2008
to April 30, 2009
115,387,067
100,141,791
15,245,276

Current fiscal year
(From May 1, 2009
to April 30, 2010)
125,495,820
108,258,533
17,237,287

438,439
116,6592,546,852
5,967
139,308
6,788
38,192
273,137
504,130
382,315
281,617
1,710,162
304,372
781,508
374,068
2,045,467
9,948,989
5,296,286

502,644
181,727
2,845,686
21,692
145,750
20,57257,206
297,728
534,727
393,990245,707
1,761,534
367,751
781,232
378,959
2,207,683
10,744,597
6,492,689

31,792
15,54958,74958,12629,47937,69364,493295,883

52,437
18,54081,92669,013
16,95447,52262,309348,705

357,699
63,41739,34637,90752,341
550,711
5,041,458

289,681
81,52622,19333,36652,150478,918
6,362,477

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010
(In thousand yen)Previous fiscal year
(From May 1, 2008
to April 30, 2009)
Extraordinary income
Gain on sales of fixed assets
Gain on sales of investment securities
Gain on transfer of business
Provison for doubtful accounts
State subsidy
Other extraordinary income
Total extraordinary income
Extraordinary losses
Loss on disposal and sales of fixed assets
Loss on sales of investment securities
Loss on valuation of investment securities
Impairment losses
Other extraordinary losses
Total extraordinary losses
Income before income taxes and minority interests
Income and other taxes-current
Income taxes-deferred
Total income taxes
Minority interests income
Net income- 18 -

Current fiscal year
(From May 1, 2009
to April 30, 2010)

7,152
582
77,95328,966–2,700
117,355－
71,079－6,887
10,176566
88,70983,304–
67,234
174,735
90,380415,654
4,743,158
2,532,794
80,722
2,613,517
1,740
2,127,901

42,793
1,042
55,891
195,958
50,288345,974
6,105,212
3,157,284(192,860)
2,964,424
9,571
3,131,216

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

(3) Consolidated Statements of Changes in Shareholders’ Equity(In thousand yen)Previous fiscal year
(From May 1, 2008
to April 30, 2009)
Shareholders’ equity
Capital stock
Balance at the end of previous fiscal year
Changes in the fiscal year
Issuance of new shares
Total changes for the fiscal year
Balance at the end of current fiscal year
Capital surplus
Balance at the end of previous fiscal year
Changes in the fiscal year
Issuance of new shares
Total changes for the fiscal year
Balance at the end of current fiscal year
Retained earnings
Balance at the end of previous fiscal year
Changes in the fiscal year
Dividends from retained earnings
Net income
Total changes for the fiscal year
Balance at the end of current fiscal year
Treasury stock
Balance at the end of previous fiscal year
Changes in the fiscal year
Acquisition of treasury stock
Total change for the fiscal year
Balance at the end of current fiscal year
Total shareholders’ equity
Balance at the end of previous fiscal year
Changes in the fiscal year
Issuance of new shares
Dividends from retained earnings
Net income
Acquisition of treasury stock
Total changes for the fiscal year
Balance at the end of current fiscal year

- 19 -

Current fiscal year
(From May 1, 2009
to April 30, 2010)

3,424,170

5,057,046

1,632,876
1,632,876
5,057,046

1,251,410
1,251,410
6,308,456

3,543,738

4,247,040

703,302703,3024,247,040

1,251,410
1,251,410
5,498,450

5,207,517

7,127,988(207,430)
2,127,901
1,920,471
7,127,988(384,941)
3,131,216
2,746,275
9,874,264(3,435)(3,912)

(477)
(477)
(3,912)

(533)
(533)
(4,445)

12,171,991

16,428,163

2,336,178(207,430)
2,127,901(477)
4,256,171
16,428,163

2,502,820(384,941)
3,131,216(533)
5,248,561
21,676,725

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010
(In thousand yen)Previous fiscal year
(From May 1, 2008
to April 30, 2009)
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Balance at the end of previous fiscal year
Changes in the fiscal year
Net change in non-shareholders’ equity items for the
fiscal year
Total changes for the fiscal year
Balance at the end of current fiscal year
Total valuation and translation adjustments
Balance at the end of previous fiscal year
Changes in the fiscal year
Net change in non-shareholders’ equity items for the
fiscal year
Total changes for the fiscal year
Balance at the end of current fiscal year
Minority interests
Balance at the end of previous fiscal year
Changes in the fiscal year
Net change in non-shareholders’ equity items for the
fiscal year
Total changes for the fiscal year
Balance at the end of current fiscal year
Total net assets
Balance at the end of previous fiscal year
Changes in the fiscal year
Issuance of new shares
Dividends from retained earnings
Net income
Acquisition of treasury stock
Net change in non-shareholders’ equity items for the
fiscal year
Total changes for the fiscal year
Balance at the end of current fiscal year

- 20 -

Current fiscal year
(From May 1, 2009
to April 30, 2010)(131,883)(356,413)(224,529)

124,810(224,529)(356,413)

124,810(231,603)(131,883)(356,413)(224,529)

124,810(224,529)(356,413)

124,810(231,603)

667,405

37,357(630,047)

9,571(630,047)
37,357

9,571
46,92912,707,512

16,109,107

2,336,178(207,430)
2,127,901(477)

2,502,820(384,941)
3,131,216(533)(854,577)

134,3813,401,594
16,109,107

5,382,943
21,492,051

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

(4) Consolidated statements of cash flows(In thousand yen)Previous fiscal year
(From May 1, 2008
to April 30, 2009)
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Impairment losses
Amortization of goodwill
Loss on valuation of investment securities
Decrease in allowance for doubtful accounts
Increase (decrease) in allowance for point certificates
Increase in allowance for retirement benefits
Increase in allowance for bonuses to employees
Increase (decrease) in allowance for bonuses todirectors
Interest and dividend income
Interest expenses
Loss on funds managed in investment partnerships
Gain on donation of fixed assets
Gain on sales of investment securities
Loss on retirement and sales of fixed assets
Gain on transfer of business
Decrease (increase) in accounts receivable
Increase in inventories
Decrease (increase) in other assets
Increase in accounts payable
Increase in other liabilities
SubtotalInterest and dividends received
Interest paid
Income and other taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Payments for purchase of tangible fixed assets
Proceeds from sales of tangible fixed assets
Proceeds from transfer of business
Payments for purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares in affiliated companies
Purchase of investments in subsidiaries resulting inchange in scope of consolidation
Payments for loans
Proceeds from collections of loans
Payments for investments in capital
Proceeds from returns of investments in capital
Payments for purchase of intangible fixed assets
Proceeds from sales of intangible fixed assets
Decrease (increase) in other investments
Proceeds from withdrawal of time deposits
Payments for time deposits
Net cash used in investing activities- 21 -

Current fiscal year
(From May 1, 2009
to April 30, 2010)

4,743,158
1,119,069
174,735
860,251
67,234(12,507)(5,629)127,815
81,504

6,105,212
1,286,507
195,958
878,643
55,891(35,473)
24,591
154,886
75,154174(22,042)(47,341)
357,699
39,346(29,479)(582)
76,151(77,953)
451,957(561,109)(374,945)
81,753112,043
7,183,345
43,957(360,227)(2,533,652)
4,333,422(70,978)
289,681
22,193(16,954)(70,037)
42,793－(754,880)(1,009,176)
1,063,748
954,184
194,680
9,364,584
67,059(291,097)(2,712,083)
6,428,462(1,391,679)
90,155
77,953(583,258)
1,264(179,675)(1,151,540)
3,947－(392,163)
109,525(270,000)–(201,217)(94,592)
95,770(590)
60(162,969)
517
1,269,566
120,024(24)(757,477)(630,000)
365,802(210)
890(455,338)－(80,403)－－(2,700,707)

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010
(In thousand yen)Previous fiscal year
(From May 1, 2008
to April 30, 2009)
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments for short-term borrowings
Proceeds from long-term borrowings
Repayments for long-term borrowings
Payments for redemption of bonds
Repayments of lease obligations
Proceeds from issuance of new shares
Payments for purchase of treasury stock
Cash dividends paid
Dividend payments to minority shareholders
Net cash provided by (used in) financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year

9,300,000(10,378,000)
4,550,000(3,032,876)(332,000)(70,456)
1,673,724(477)(227,220)(19,730)
1,462,963
5,038,908
4,195,144
9,234,052- 22 -

Current fiscal year
(From May 1, 2009
to April 30, 2010)
2,032,307(3,122,307)
1,350,000(3,826,132)(140,000)(166,134)
2,484,765(533)(384,941)(369)(1,773,345)
1,954,409
9,234,052
11,188,462

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010

(Segment Information)a) Business segment information
Segment information by business category for recent two fiscal years is as follows.
Previous fiscal year (From May 1, 2008 to April 30, 2009)(In thousand yen)Pharmaceutical Product sales
businessbusiness

Otherbusinesses

Total

Eliminations /Corporate

Consolidated

I. Net sales and operating
income (loss)
Net sales(1) Sales to externalcustomers(2) Inter-segment sales
and transfers
Total

101,876,835

13,251,729

258,502115,387,067–

115,387,067

–

6,000

18,747

24,747(24,747)–

101,876,835

13,257,729

277,250

115,411,814(24,747)

115,387,067

Operating expenses

95,114,856

13,546,940

359,331

109,021,128

1,069,652

110,090,781

Operating income (loss)

6,761,978(289,211)(82,081)6,390,686(1,094,399)

5,296,286

II. Assets, depreciation andcapital investment
Assets

53,379,642

6,173,970

1,058,864

60,612,477

1,420,445

62,032,922

Depreciation

837,080

174,465

14,486

1,026,032

19,795

1,045,827

Impairment loss

81,894

92,840–174,735–

174,735

Capital investment

1,837,775

217,1208,900

2,063,796

71,5002,135,296

Current fiscal year (From May 1, 2009 to April 30, 2010)(In thousand yen)Pharmaceutical Product sales
businessbusiness
I. Net sales and operating
income (loss)
Net sales(1) Sales to externalcustomers(2) Inter-segment sales
and transfers

Otherbusinesses

Total

Eliminations /Corporate

Consolidated

111,602,971

13,619,760

273,088

125,495,820－

125,495,820

－

6,000

18,747

24,747(24,747)－

111,602,971

13,625,760

291,836

125,520,568(24,747)

125,495,820

Operating expenses

103,272,159

14,119,354

368,741

117,760,255

1,242,875

119,003,130

Operating income (loss)
II. Assets, depreciation andcapital investment
Assets

8,330,812(493,594)(76,904)

7,760,312(1,267,623)

6,492,689

56,643,343

7,192,814

1,155,175

64,991,332

907,51765,898,850

Depreciation

998,832

202,758

14,708

1,216,300

24,243

1,240,543

Impairment loss

103,401

92,557－

195,958－

195,958

Capital investment

1,583,136

395,142－

1,978,278

42,2852,020,564

Total(Notes) 1. Business segmentation
Businesses are segmented based on the method adopted for internal management.
2. Individual business segments involve the following activities.
Pharmaceutical business: Management of dispensing pharmacies, franchise operation, consulting service for the
opening of dispensing pharmacies
Product sales business: Selling of pharmaceuticals, cosmetics and household groceries, franchise operation,
consulting service for the opening of shopping centers, management of pharmacies
Other businesses: Real-estate leasing service
3. In terms of operating expenses, the unclassifiable operating expenses included in “Eliminations / Corporate” aremainly attributable to the expenses related to the administration unit such as general affairs and accounting
departments in the parent company. These expenses for the previous and current fiscal years are as follows:- 23 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2010
Previous fiscal year:¥1,069,652 thousand
Current fiscal year:¥1,242,875 thousand
4. In terms of assets, the corporate assets included in “Eliminations / Corporate” are mainly attributable to the parent
company’s surplus funds (cash and securities), long-term investment funds (investments in securities), deferred tax
assets and assets related to the administration unit. These assets for the previous and current fiscal years are as
follows:
Previous fiscal year:¥ 1,420,445 thousand
Current fiscal year:¥ 907, 517 thousand
5. Consumption taxes are not included in the figures indicated above.
6. Changes in accounting methods(Previous fiscal year)
Although the Group has previously used lease transaction methods to account for finance lease transactions not
involving transfers of ownership, it has elected to use accounting procedures for normal sales transactions to accountfor these transactions starting from the current fiscal year by applying “Accounting Standards for Lease Transactions”
and “Guidance on Accounting Standard for Lease Transactions.”
For finance leases without an ownership transfer for which the lease transaction had started before the fiscal year
when this accounting standard was introduced, the conventional method was applied.
The effects of this adoption to operating expenses and income of each segment are negligible.

b) Segment information by location
This is not applicable because the Company has no subsidiary or important branch office located in foreigncountries.
c) Overseas sales
This is not applicable because the Company has no sales in foreign countries.

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