Corporate Vision
Our commitment totreating people around the world
with topical and transdermal patches
Topical and transdermal patches are simple to use, being placed on the skin totreat medical conditions. They are consistent with the latest trend of improving
drug delivery in medical treatment designed to enhance people’s quality of life.
Our message that medicated skin patches have a lot to offer is embodied in
the word Salonpathy, derived from our mainstay product Salonpas. Over theyears we have continued to help people improve their health by leveraging ourtransdermal drug delivery system (TDDS) expertise to develop topical andtransdermal patches mainly for pain relief and reducing inflammation.
Our basic management policy is to concentrate on and specialize in creating
new pharmaceutical products and formulations adaptable to TDDS, which isthe source of our competitiveness. We believe this will allow us to respond to
the underlying need for health, safety, and comfort of people around the world
and improve their quality of life.
We are committed to supplying pharmaceutical products capable of treating
people anywhere in the world simply by applying them to the skin.
Forward-looking statements:
Statements in this financial report concerning current plans, forecasts, strategies, beliefs, and other forward-looking
information related to Hisamitsu Pharmaceutical Co., Ltd., other than those of historical fact, are forecasts of futurebusiness performance based on the judgments of management at Hisamitsu Pharmaceutical Co., Ltd. in light ofcurrently available information. Accordingly, please refrain from making investment decisions based solely on forecastsof business performance in this financial report. Actual business performance may differ significantly from these
forecasts due to changes in a variety of factors.
Note:
Amounts in US dollars are included solely for convenience and are translated at a rate of ¥80.68=U.S.$1.00, theapproximate rate of exchange on February 29, 2012.

Contents
Corporate Vision
Consolidated Financial Highlights
To Our Stakeholders
Overview of Operations
Corporate Governance and Internal Auditing
Financial Section
Analysis of Financial Position, Operating Results, and Cash Flows
Capital Expenditures
Dividend Policy
Business and Other Risks
Consolidated Balance Sheets
Consolidated Statements of Income

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Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Shareholders’ Equity
Consolidated Statements of Cash Flows
Basis of Preparation of Consolidated Financial Statements
Significant Accounting Policies Concerning the Preparation ofConsolidated Financial Statements
Significant Changes in Accounting Policies Concerning the
Preparation of Consolidated Financial Statements
Changes in Presentation
Additional Information
Notes to Consolidated Financial Statements
Supplementary Schedule
Corporate Information

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FINANCIAL REPORT 2012

Consolidated Financial Highlights
Years ended the last day of February(Thousands of
U.S. dollars)(Millions of yen)
Fiscal 2008

Fiscal 2009

Fiscal 2010

Fiscal 2011

Fiscal 2012

Fiscal 2012

Net sales

119,061

124,655

129,834

137,184

137,794

1,707,908

Operating income

29,071

32,53228,58528,19325,937

321,480

Ordinary income

30,20432,476

31,231

33,23633,494415,146

Net income

18,663

19,12018,423

20,956

18,439228,545

—

—

—

—

17,458216,386

Net assets

113,929

124,105

130,976

141,222

149,263

1,850,062

Total assets

149,750

167,642

193,551

194,787

192,838

2,390,159

Net assets per share (yen and dollars)

1,276.16

1,391.49

1,500.92

1,618.69

1,730.22

21.45

Net income per share (yen and dollars)

210.45215.61210.78241.80215.09

2.67

—

—

—

—

—

—

Shareholders’ equity ratio (%)

75.6

73.6

67.2

72.0

76.9

—

Return on equity (ROE) (%)

17.2

16.2

14.5

15.5

12.8

—

Price-earnings ratio (PER) (times)

15.9

13.8

15.4

13.6

17.1

—

Net cash provided by operating activities

25,722

22,382

20,49836,34225,558316,782

Net cash used in investing activities(11,911)(15,927)(32,547)(8,248)(15,473)(191,782)

Net cash provided by (used in) financing activities(7,479)(5,467)

4,899(15,659)(13,010)(161,254)

Cash and cash equivalents, end of year

32,70633,356

26,23237,65434,222

424,170

Number of employees[average temporary staff]

1,752
[297]

1,890
[288]

2,562
[369]

2,635
[415]

2,718

Comprehensive income

Diluted net income per share (yen and dollars)

[503]

—

Notes: 1. Net sales do not include consumption tax.
2. Diluted net income per share is not listed due to the absence of residual securities.

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FINANCIAL REPORT 2012

To Our Stakeholders

The market environment during the fiscal year ended
February 29, 2012 for the ethical pharmaceutical industry in
Jap a n re ma i n ed sev er e d ue t o th e im p a c t o f t h egovernment’s stance of curtailing health spending, including
strengthened measures to promote the use of genericdrugs. Our Utsunomiya plant was affected by theearthquake, resulting in suspended production of some ofits mainstay products, but this issue was successfully
addressed by the swift relocation of production lines andincreased production at the Tosu plant.
In the ethical pharmaceuticals business, we have
responded to current conditions by launching products in

Medical Products

new areas and providing medical institutions with targetedscientific information that precisely corresponds to theirneeds while remaining primarily focused on our mainstay
anti-inflammatory pain relief patches. In the OTC
pharmaceutical business, we have worked to launch andpromote sales through launches of new products, especiallyour anti-inflammatory pain relief patches, amid continued
stagnating consumption in the OTC market and tough sales
competition. In research and development, we concentrated
resources for research and development in our specialty
areas of transdermal patches and focused on thedevelopment of new products with novel local or systemic
For Export

effects. Further, in research and development activities with
Noven Pharmaceuticals, Inc., an overseas subsidiary, we
have improved cooperation, including personnel exchanges
in efforts to speed up product development.
As a result of such efforts, consolidated net sales grew
0.4% year on year, to ¥137,794 million. Operating income
declined 8.0% year on year, to ¥25,937 million, ordinary
income increased 0.8% year on year to ¥33,494 million,
and net income declined 12.0% year on year, to ¥18,439
million.

NAKATOMI, Hirotaka
Over the Counter Products

President & CEO
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FINANCIAL REPORT 2012

Overview of Operations

Operating results
The Japanese economy during the fiscal year under review found itself under extremely harsh conditions, as financial
uncertainty continued to prevail on a global basis, corporate performance deteriorated and personal consumption slowed
down under the cumulative effects of the Great East Japan Earthquake and the nuclear accident, which occurred on March
11, 2011.
The operating environment for the ethical pharmaceutical industry in Japan remained severe, reflecting thegovernment’s stance of curtailing healthcare spending, including strengthened measures to promote generic drug use.
Although the Company faced disruptions in the production of a portion of its major products as a result of the damages
suffered by its Utsunomiya Plant in the earthquake, it responded by quickly relocating its production line and increasing
output at the Tosu Plant.
In Japan, we have responded to these conditions by engaging in the ethical pharmaceuticals business with a focus on
our mainstay anti-inflammatory pain relief patches, launching additional products in new areas and providing medical
institutions with scientific information that precisely correspond to their needs.
We have also worked to launch and promote sales of OTC pharmaceuticals, especially our anti-inflammatory pain relief
patches, amid continued stagnating consumption in the OTC market and tough sales competition.
Our research and development concentrated its resources on transdermal patches, a mainstay product, and focused on
the development of new products with novel topical or systemic effects.
Additionally, in research and development activities carried out with overseas subsidiary Noven Pharmaceuticals, Inc.
(“Noven”) we have strengthened cooperation that includes personnel exchanges and strived to speed up productdevelopment.
As for our production facilities, the Tosu and Utsunomiya Plants carried on initiatives to help protect the global
environment as “ISO 14001” (International Environmental Management Standard) certified factories.
In addition to improving the efficiency of our manufacturing processes, we made an effort to reduce our environmental
footprint through the switch to smaller boilers, the reduction of energy usage and waste by changing its method of producttransport and introducing highly functional air conditioning, and through maintaining a 99% recycle rate.
We also promoted energy conservation by establishing the Energy Management Committee and made an effort toconserve electricity by adjusting room temperatures.
The Company and employees jointly took part in community service programs such as the “Japan Red Cross Society
Street Collection Drive for Overseas Programs,” and supported organizations through the “Hisamitsu Hot Heart Club,” inwhich the Company matches donations deducted from employees’ and directors’ salaries.
The Company, along with its overseas subsidiaries, proactively engaged in support activities for those who sufferedimmense damage from the Great East Japan Earthquake through the local branches of the Red Cross and otherinstitutions.
In addition, we have continued to provide active financial support for the “SAGA Heavy Ion Medical Accelerator in Tosu
Project” that was launched to contribute to the crusade against cancer.
“Pharmaceuticals” is the Company’s sole reportable segment, whose performance is as follows.

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FINANCIAL REPORT 2012

Overview of Operations

Pharmaceuticals
The Pharmaceuticals segment, particularly the ethical pharmaceuticals business, faced an extremely uncertain businessenvironment during FY 02/2012 amid efforts to curb healthcare expenditures.
We responded to these circumstances by providing medical institutions with appropriate and detailed scientificinformation about our products, particularly our anti-inflammatory pain relief patches. While collecting and supplying
information on efficacy and safety, we sought to expand our market share for a variety of products, including our mainstay
product Mohrus Tape®, a ketoprofen transdermal patch; Mohrus® Pap, a ketoprofen transdermal patch; Estrana® Tape, an
estradiol transdermal patch; HMT, a transdermal patch containing the bronchodilator tulobuterol; and Fentos® Tape, atransdermal sustained-release cancer pain relief patch of fentanyl citrate which is a synthetic narcotic with significant
analgesic effects.
Also in August 2011, we launched the sales of NORSPAN® Tape, a transdermal sustained-release pain relief patch ofbuprenorphine, for which we had acquired the exclusive distribution right in Japan from Mundipharma K.K.
NORSPAN® Tape is a pharmaceutical indicated for analgesia of chronic pain associated with osteoarthritis and low
back pain not being controlled sufficiently with non-opioid analgesics.
Furthermore in August 2011, phase 3 trials for an oxybutynin hydrochloride transdermal patch to treat overactive
bladder demonstrated statistically significant improvement in the placebo group in the main areas of efficacy, andconfirmed non-inferiority compared with the active control group.
In terms of safety, no serious side effects were observed.
We are currently on course to submit the application for its manufacturing and marketing approval by the end of fiscal
2012, with a view to helping more patients to improve their QOL (quality of life).
In the OTC pharmaceuticals business, we launched new products in the area of our mainstay anti-inflammatory pain
relief patches, targeting new users.
Specifically, Feitas® 3.5α (in March 2011), Ganryo® 12 (in April 2011), Lifecella® Advanceline (in May 2011), andButenalock® Vα (in February 2012) were launched with an aim to develop new users.
Overseas, we newly obtained approvals in the U.K. and Russia for SALONPAS® PAIN RELIEF PATCH, the only antiinflammatory pain relief patch product in the world approved by the FDA (the U.S. Food and Drug Administration), in the
category of OTC pharmaceuticals. As a result, this product is now approved in eleven countries, while marketed in ninecountries.
In October 2011, we established a locally-incorporated subsidiary in Beijing, China, which is currently preparing for thesales launch of our products.
As a result of these business activities, net sales grew 0.4% year on year, or ¥609 million, to ¥137,794 million.
Operating income declined 8.0% year on year, or ¥2,256 million, to ¥25,937 million. Ordinary income increased 0.8% year
on year, or ¥257 million, to ¥33,494 million; and net income declined 12.0% year on year, or ¥2,517 million, to ¥18,439
million.

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FINANCIAL REPORT 2012

Overview of Operations

Sales results
Our sales results broken down by business segment are as follows:(Millions of yen)(Thousands of
U.S. dollars)YoY (%)

Fiscal 2012

Business segment

Fiscal 2012

Pharmaceuticals

134,6101.0

1,668,443

Other businesses

3,183(19.3)

39,452

137,794

0.4

1,707,908

Total

Notes: 1. Sales breakdown by main customers and percentage of sales to main customers.
(Thousands of
U.S. dollars)(Millions of yen)
Sales
Fiscal 2011

% of total

Medipal Holdings Corporation

27,72420.2

25,06618.2

310,684

Alfresa Holdings Corporation

24,05017.5

24,53117.8

304,053

Customer

Sales
Fiscal 2012

% of total

Fiscal 2012

2. The foregoing figures do not include consumption tax.

Key Challenges
We expect the ethical pharmaceuticals business to witness continued efforts to curb pharmaceutical expenditures,
including additional National Health Insurance drug reimbursement price cuts for long listed products, and strengthened
measures to promote the use of generic drugs, against a backdrop of a rapidly aging population. In response to this difficult
business environment, we are stepping up efforts to provide medical institutions with scientific information and seek todevelop new topical and systemic products that meet the needs of medical institutions and their patients.
Furthermore, we strive to grow further with an aim to improve our profitability as well as enhance our sales and R&D
capabilities.
For OTC pharmaceuticals, amid a prolonged market slump and intensifying competition, we seek to expand sales ofmainstay anti-inflammatory pain relief patches and respond to the needs of our customers by continuing to improveexisting products and developing new products.
In overseas business, we are working to establish our brand in terms of trademarks, designs, manufacturing technology,
and quality control systems, and to further augment overseas production facilities and promote overseas clinical trials.
Especially, in the U.S. ethical pharmaceutical market, we plan to enhance our R&D capability at our business baseNoven Pharmaceuticals by combining our areas of strength in technology, as well as building a manufacturing and sales
network. Continuing to recognize our mission and responsibility as a pharmaceutical company, we aim to create a morerobust business base and manufacturing structure, and to accelerate the development of new products by concentrating
research in areas of specialty.

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FINANCIAL REPORT 2012

Overview of Operations

Basic policy on control of the company(1) Overview of our basic policy on the entity with control over decision-making related to the company’s financial
and business policies
We believe any entity with control over decision-making related to the company’s financial and business policies must havean understanding of the source of the company’s enterprise value and be able to consistently maintain and improve thisenterprise value and the common interests of shareholders.
We believe any decision on how to respond to a proposed acquisition that would transfer control over the company
should ultimately be based on the wishes of individual shareholders. We are not opposed to large purchases of thecompany’s stock, provided that it contributes to enterprise value and the common interests of shareholders.
However, there are many instances in which large stock purchases and proposed acquisitions may not contribute to thetarget company’s enterprise value and the common interests of shareholders. Examples include: those that clearly damage
the target company’s enterprise value and the common interests of shareholders, in light of the objective and other aspectsof the share purchase or proposed acquisition; those that effectively coerce shareholders into selling their shares; thosethat fail to provide a reasonable amount of time for the target company’s board of directors and shareholders to consider
the details and possibly prepare a counteroffer; those that have conditions (e.g., purchase price, timing, and method) thatare either inadequate or inappropriate in light of the target company’s enterprise value; and those that damage relations
with employees, customers, creditors, or other parties essential to continued growth in the target company’s enterprisevalue.
We believe any entity that pursues a large stock purchase or proposed acquisition that does not contribute to thecompany’s enterprise value and the common interests of shareholders is not an appropriate entity for controlling decisionmaking related to the company’s financial and business affairs, and that any large stock purchase or proposed acquisition
by such an entity must be necessarily and appropriately counteracted to ensure the company’s enterprise value and thecommon interests of shareholders.
(2) Overview of specific initiatives instrumental to achieving our basic policy
Since launching a pharmaceutical business in 1847, our company has worked hard to improve the health of people byproviding pharmaceutical products, mainly pain relieving patches. Transdermal patches, that can heal the body simply by
being applied to the skin, will be an improvement of not only the administration of drugs but also quality of life, and they arealso representative of Japan’s therapeutic culture, which is well respected around the world. We pursue our business as a
mission to convey to the world the effectiveness and resulting excitement of this therapeutic patch culture.
Since releasing Salonpas® in 1934, we have successfully developed and marketed a variety of pharmaceutical patch
products, including the OTC pharmaceutical Salonsip and the ethical pharmaceuticals Mohrus® Pap and Mohrus Tape®, byconcentrating on the creation of new drugs and new drug preparations based on our accumulated expertise andexperience and the support of our customers. We have also created products in new areas other than anti-inflammatory
pain relief, including an estradiol transdermal patch Estrana® Tape, the transdermal sustained-release cancer pain relief
patch Fentos® Tape, and the like, and are expanding our business internationally by conducting sales, pursuing researchand development, and acquiring approvals in various countries around the world. As part of these efforts, Noven
Pharmaceuticals, Inc. was acquired and made a subsidiary in 2009 to establish the Hisamitsu brand in the US and toensure future growth.
Our corporate philosophy is to strive to improve the quality of life of people around the world by creating external drugs
to meet the needs of our customers, and by implementing this philosophy, we seek to enhance enterprise value and thecommon interests of shareholders.

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FINANCIAL REPORT 2012

Overview of Operations

In other words, the sources of enterprise value for our company are: 1) broad access to a variety of drugs created by anumber of companies, and research and development capabilities to make these drugs available in patches; 2)
manufacturing technology and quality control systems that enable the efficient, stable, and ongoing production of highquality products; 3) marketing prowess to cultivate several long-selling and market-leading brands, including Salonpas®,
Salonsip®, Feitas®, Butenalock®, Mohrus® Pap, Mohrus Tape®, and Estrana® Tape; and 4) an integrated research anddevelopment, manufacturing, and sales structure that allows us to quickly reflect the needs of our customers to improve
products and services.
Going forward, we will continue our efforts to increase enterprise value and maximize the common interests ofshareholders through ongoing and aggressive investment.
To achieve this goal, we aim to build a robust corporate structure capable of meeting our sales targets and securing net
profits despite the difficult competitive environment, and to ensure sustained growth in net profits by strengthening ourbusiness both in Japan and overseas. We also aspire to be an independent research and development-based
pharmaceutical company by concentrating research in our areas of specialty, in line with our basic management policy,
and by focusing on the creation of new drugs and new drug preparations.
We are also actively pursuing licensing activities, including an agreement with Mundipharma K.K. for the exclusive
distribution rights in Japan of NORSPAN® Tape, a buprenorphine patch for treatment of chronic pain associated withosteoarthritis and low back pain not being controlled sufficiently with non-opioid analgesics.
In this way, we seek to increase cash flow through the active pursuit of our business and to create future assets that willcontribute to the common interests of shareholders through the development of new topical and transdermal products,
international expansion of our brands in terms of trademarks, designs, manufacturing technology, and quality control
systems, streamlining of management, and bolstering of our corporate structure.
We consider the return of profits to shareholders to be an important management issue, and we seek to pay appropriate
dividends based on earnings and pursue flexible financial policies, including share buybacks, after considering researchand development investment to raise capital efficiency and enterprise value and the internal reserves needed for future
growth.
In particular, we seek to maintain ROE at 15% or higher from the standpoint of raising capital efficiency, and to
consistently pay dividends with a target payout ratio of 30%.
(3) Initiatives in light of our basic policy to prevent inappropriate entities from controlling decision-making related
to the group’s financial and business affairs
At the 106th annual general meeting of shareholders held on May 22, 2008, “Takeover defense measures to counter large
purchases of the company’s stock” were adopted to ensure and enhance the company’s enterprise value and the common
interests of shareholders. Upon expiration of the effective period for the takeover defense measures, the measures werepartly revised and its renewal was approved by shareholders at the 109th annual general meeting of shareholders held on
May 26, 2011 (hereinafter the renewed takeover defense measures are referred to as “the Plan”).
The Plan applies to purchases of the company’s stock with the objective or result of a specific shareholder groupowning 20% or more of the voting rights (hereinafter referred to as “Purchases” and those who conduct the “Purchases”
are referred to as “Purchasers”). Purchasers are required to follow certain procedures in providing shareholders, thecompany’s board of directors, and an independent committee with information on which to base their decision. If thepurchaser fails to comply with these procedures or if the purchase will damage the company’s enterprise value and thecommon interests of shareholders, then the company can pursue countermeasures against the purchaser in the form of a
gratis allotment of share acquisition rights or other appropriate countermeasure that the board of directors is permitted totake based on the Companies Act, other laws, and the company’s articles of incorporation. Whether countermeasures
HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Overview of Operations

based on the Plan are adopted is ultimately a decision of the board of directors, but to ensure the proper use of the Planand objective, rational, and impartial decisions by the company’s board of directors, we established a committee
independent from the board of directors and will give utmost respect to the opinions of this committee.
The Plan shall be effective until the conclusion of the annual general meeting of shareholders for the fiscal year ending
February 28, 2014. Additionally, the Plan shall be terminated immediately if the board of directors comprising directors
appointed at a general meeting of shareholders decides to terminate the Plan.
(4) Board of directors’ opinion and reasoning for the foregoing initiatives
1) Specific initiatives to achieve our basic policy
The initiatives outlined above are intended to contribute to fulfilling our basic policy and have been prepared as specificpolicies to ensure and enhance on an ongoing basis the company’s enterprise value and the common interests ofshareholders. Accordingly, these initiatives comply with our basic policy and will not damage the common interests ofshareholders.
2) Initiatives in light of our basic policy to prevent inappropriate entities from controlling decision-making related
to the group’s financial and business affairs
The Plan complies in its content with our basic policy and is intended to ensure objectivity and rationality in the decisions of
the board of directors. Further, the Plan was adopted to ensure and enhance the company’s enterprise value and thecommon interests of shareholders, and is not intended to maintain the position of the company’s directors.

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FINANCIAL REPORT 2012

Overview of Operations

Important Business Agreements
Joint sales agreement
We concluded an agreement with Kyowa Hakko Kirin Co., Ltd. (headquarters: Chiyoda-ku, Tokyo) on June 18, 2008 on
joint sales in Japan of Fentos® Tape, a transdermal sustained-release drug for the treatment of cancer pain.
(1) Counterparty to the agreement
Kyowa Hakko Kirin Co., Ltd.
(2) Agreement details
Contract on the joint sales within Japan with Kyowa Hakko Kirin Co., Ltd. of Fentos® Tape, a transdermal sustained-releasepatch for treatment of cancer pain that Hisamitsu Pharmaceutical has acquired manufacturing and marketing approval for.
(3) Compensation
Compensation commensurate with a one-time contract payment and subsequent payments according to milestones
reached.

Distribution agreement
We concluded an exclusive contract with Mundipharma K.K. on August 6, 2007, for the Japanese distribution rights to
NORSPAN® Tape, a transdermal sustained-release pain relief patch.
(1) Counterparty to the agreement
Mundipharma K. K.
(2) Agreement details
Contract acquiring the exclusive rights for distribution of NORSPAN® Tape, a transdermal sustained-release pain relieftape, in Japan(3) Compensation
Compensation commensurate with a one-time contract payment and subsequent milestone payments based on
development progress and sales.
Note: 	We terminated on February 29, 2012 the agreement with MSD K.K. on the co-promotion within Japan of Fosamac ® osteoporosis
medication manufactured and marketed by MSD K.K..

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FINANCIAL REPORT 2012

Overview of Operations

Research and Development
Pharmaceuticals
Our R&D program centered on the development of transdermal pharmaceutical products targets the needs of medical
institutions.
For ethical pharmaceuticals in Japan, currently phase 3 trials are underway for additional indications of chronic pain relief
for the Fentos® Tape (development code: HFT-290), a transdermal sustained-release cancer pain relief patch. Phase 3 trials
have been completed for HOB-294 (generic name: oxybutynin hydrochloride), a patch to treat an overactive bladder, and its
approval was submitted in May 2012. Regarding phase 3 trials for HTU-520 (generic name: terbinafine hydrochloride), a
patch to treat tinea unguium, the continuation of development is under consideration since the trials in April 2012 failed toshow the originally anticipated level of efficacy. Phase 2 trials are underway for HP-3000 (generic name: ropinirolehydrochloride), a patch to treat Parkinson’s disease.
For OTC pharmaceuticals, we are developing new products and improving existing products for the purpose of
improving effectiveness, safety, and user satisfaction.
In the U.S. ethical pharmaceutical market, Noven completed phase 3 trials for LDMP (generic name: paroxetine
mesylate), an oral preparation for vasomotor symptom treatment, and it is preparing to apply for its approval. An application
for the generic approval of a patch to treat postherpetic neuralgia (generic name: Lidocaine) was accepted by the FDA in
May 2012.
We are currently conducting phase 2 trials for HTU-520 (generic name: terbinafine hydrochloride), a patch to treat tinea
unguium.
For OTC pharmaceuticals, post-sale clinical trials with pediatric patients following the request received from the FDA for
the transdermal analgesic anti-inflammatory SALONPAS® PAIN RELIEF PATCH (development code: FS-67; genericname: methyl salicylate, l-menthol) have been completed.
In addition to development of our own fundamental technologies, we utilise Noven’s transdermal delivery system(TDDS) technology to improve the value of developed products and to conduct joint development with externalorganizations, working towards improvement of commercialization technologies to expand the possibilities of transdermal
absorption.

Other businesses
We conduct some research and development in other businesses, but because the amount is limited, it does not merit
special mention.
As a result of the foregoing, research and development expenses totaled ¥14,758 million in FY2/12.

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Corporate Governance and Internal Auditing

Corporate Governance(1) Basic approach to corporate governance1) Corporate governance structure
We have prepared basic internal control policies to enhance management transparency and ensure compliance, and we
consider the improvement of corporate governance to be an important task. To this end, we have placed priority on
creating an organization capable of responding quickly to changes in the business environment and have implemented
structural reforms.
With this in mind, we have adjusted the number of directors to an appropriate level with the goals of enhancing theperformance of the board of directors and speeding up decision making. We have also introduced an executive officer
system to clarify roles and responsibilities in business execution.
Going forward, we seek to create a stronger bond of trust with our stakeholders as a good corporate citizen by
improving transparency, ensuring compliance, and upholding corporate ethics in our business activities.
Overview of our corporate governance structure and reasons for adopting the structure
We are structured as a company with a Board of Corporate Auditors, comprising 10 directors and 6 corporate auditors(including 3 outside corporate auditors) as of May 25, 2012.
In the area of corporate governance, we reduced the number of directors and introduced an executive officer system toclarify the responsibilities and authority of management and speed up decision-making and business execution.
To bolster our management structure further, we changed the articles of incorporation to reduce the number of directors
from 13 or less to 10 or less at the annual general meeting of shareholders on May 25, 2006. In March 2003, we introduced
an executive officer system to improve the speed, transparency, and strategic focus of business decisions.
To clarify management responsibilities of directors and construct a management structure that can respond to changes
in management environments, the term of directors was changed from 2 years to 1 year at the annual general meeting ofshareholders held on May 26, 2011.
Important management decisions are made by the Management Advisory Council comprising key directors andexecutive officers, and important resolutions are debated and decided by the board of directors.
We have also worked to enhance management oversight and to separate, decentralize, and strengthen decision
making functions and business execution functions.
To better facilitate fair auditing, we switched to an auditing system in which two of the four corporate auditors compriseoutside corporate auditors at the annual general meeting of shareholders on May 26, 2004. To bolster management
oversight further and strengthen our auditing system, we changed the articles of incorporation to increase the number ofcorporate auditors from 4 or fewer to 6 or fewer at the annual general meeting of shareholders on May 25, 2006. In
addition, the number of corporate auditors was increased to 6 (including 3 outside corporate auditors) at the annual general
meeting of shareholders held on May 26, 2011.
Corporate Auditors attend meetings of the board of directors, regularly convene meetings of the board of corporate
auditors, and receive audit reports from the independent auditor as needed. The independence of our three outside
corporate auditors from the company has been ensured and we believe that a structure sufficiently capable of monitoring
management has been established.

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Corporate Governance and Internal Auditing

Internal auditing and audit by Board of Corporate Auditors
We established the Internal Audit Office (two persons in charge) as an internal audit division. The Internal Audit Office is
responsible for auditing the business activities of Hisamitsu Pharmaceutical and group companies to ensure that these
activities are effective and appropriate and that they comply with relevant laws and the articles of incorporation, reportingto the board of directors and the board of corporate auditors, promoting mutual cooperation, reporting to relevant businessdivision managers and directors, and providing support and advice as needed to improve internal control.
In addition to conducting audits based on predetermined audit guidelines and plans, the Board of Corporate Auditors
also regularly holds individual hearings with directors, executive officers, division managers and key staff from eachbusiness division.
Outside Directors and Outside Corporate Auditors
Our three outside corporate auditors are ONO Keinosuke, ICHIKAWA Isao, and TOKUNAGA Tetsuo. ONO Keinosuke has
gained scholarly knowledge related to management through his past career experience such as professor of a graduate
school of business. ICHIKAWA Isao has gained management experience and insight through his past career experiencesuch as executive vice president and representative director of a listed company. TOKUNAGA Tetsuo has gained overallmanagement experience and knowledge through his past career experience such as executive vice president andrepresentative director of a listed company.
Outside corporate auditors regularly attend meetings of the Board of Directors and meetings of the Board of Corporate
Auditors. We believe that a structure sufficiently capable of auditing management has been established. In consideration of
the efficiency and flexibility of the business decision making process, no outside directors have been appointed. There isno conflict of interests between our outside corporate auditors and the company.
2) Risk management systems
To respond to a variety of business risks, we have sought to enhance risk management and corporate governance by
establishing a variety of internal committees.
Compliance Promotion Committee and Compliance Promotion Office (Chair: Director)
We prepared the Hisamitsu Corporate Charter in June 2002 and established the Compliance Promotion Committee andCompliance Promotion Office, to promote thorough and ethical compliance. We have distributed handbooks to officers andemployees to promote a recognition and sustained awareness of the importance of compliance, and have worked toensure behavior based on high ethical and moral standards.
Going forward, we will continue our efforts to bolster compliance related to social responsibility, including corporate
ethics, the environment, and privacy protection, at Hisamitsu Pharmaceutical and group companies.
Crisis Management Committee (Chair: President & CEO))We established a Crisis Headquarters to help prevent risk and prepare for times of crisis, standing as a permanent Crisis
Management Committee to operate in normal times, and conduct training of committee members as needed.
Privacy Protection Committee (Chair: Director of Human Resources)
We established the Privacy Protection Committee in April 2005 to fully comply with the Personal Information Protection
Act. We have called personal information administrators together and held committee meetings as needed to create anorganization to protect individual rights and interests and to ensure that this organization is safely managed.

HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Corporate Governance and Internal Auditing

Disclosure Policy Team (Chair: President & CEO)We established the Disclosure Policy Team in April 2001 to provide the timely and appropriate disclosure of corporate
information. All officers and employees work toward timely disclosure based on our Disclosure Policy Rules.
We strive to actively disclose information to enhance management transparency and seek to promote smoothcommunication with shareholders and investors through our investor relations activities.
CSR Committee (Chair: Production Environment Division Manager)
We set up the CSR Committee to progress our environmental and community service programs. Headed by the CSR Office,
the CSR Committee is made up of CSR committee members in each business division and engages in CSR programs.

Corporate governance structure

General Meeting of Shareholders
Appoint and remove

Independent auditor

Board of Corporate
Auditors
Corporate Auditors
Operational andaccounting auditing

Appoint and remove

Audit

Board of Directors
Directors

Audit

Representative
director

Management Advisory
Council
Directors and Executive Officers
AdviceInternal Audit OfficeCommittees
Compliance Promotion Committee

Advising attorneys and other specialists

Appoint and remove

Crisis Management Committee
Privacy Protection Committee
Disclosure Policy TeamAudit

CSR Committee

Various business divisions and group companies

HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Corporate Governance and Internal Auditing

3) Executive compensation
A. Total compensations by classification of executives and by type of compensations, and number of executives
by category of the filing company(Millions of yen)
Fiscal 2012
Category

Total
compensation

Total compensation by type
Basiccompensation

Stock options

Bonuses

Retirement
benefits

Number of
officers to be paid

Directors (Excluding Outside Directors)

367

274

—

—

92

11

Corporate Auditors (Excluding Outside Corporate Auditors)

48

41

—

—

6

3

Outside Officers

18

17

—

—

1

3

(Thousands of U.S. dollars)
Fiscal 2012
Category

Total
compensation

Directors (Excluding Outside Directors)

4,549

Total compensation by type
Basiccompensation
3,396

Stock options

Bonuses——

Retirement
benefits
1,140

Number of
officers to be paid
11

Corporate Auditors (Excluding Outside Corporate Auditors)

595

508

—

—

74

3

Outside Officers

223

211

—

—

12

3

B. Total consolidated compensation paid to executive of the filing company(Millions of yen)
Fiscal 2012
Name
(Category of executive)

Total
consolidated
compensation

Category ofcompany

NAKATOMI, Hirotaka (President & CEO)140

The filingcompany

Total compensation by type
Basiccompensation

Stock options

Bonuses

Retirement
benefits

102

—

—

37

(Thousands of U.S. dollars)
Fiscal 2012
Name
(Category of executive)

Total
consolidated
compensation

Category ofcompany

NAKATOMI, Hirotaka (President & CEO)

1,735

The filingcompany

Total compensation by type
Basiccompensation
1,264

Stock options

Bonuses

Retirement
benefits

—

—

459

C. Material disclosures on employee salaries for directors who also serve as employees.
Not applicable.
D. Policy on deciding amount of executive compensation
Directors’ compensation is determined at the Board of Directors meeting within the range approved at the annual
general meeting of shareholders in consideration of the company’s business performance, as well as the position, job
HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Corporate Governance and Internal Auditing

specifications, and individual performance of each director.
Corporate Auditors’ compensation is determined at the Board of Corporate Auditors meeting within the range
approved at the annual general meeting of shareholders.
4) Accounting auditing
The company has concluded an auditing contract with KPMG AZSA LLC to serve as an independent auditor responsible
for accounting auditing, and by providing accurate business information and taking other steps, we provide an environment
conductive to fair auditing. There are no special interests between the company and KPMG AZSA LLC and theirdesignated limited liability partner and engagement partners.
Audit company providing auditing services
Audit company
KPMG AZSA LLC

Certified public accountants providing auditing services
Designated limited liability partner and engagement partner

Hiromi Kimura

Designated limited liability partner and engagement partner

Yoshihide Takehisa

Designated limited liability partner and engagement partner

Akihisa Sada

Assisting personnel
3 CPAs & 11 others

Note: A statement on the years of continuous audit service is omitted because all accounting have served less than seven years.

5) Annual general meeting of shareholders resolution items that can be decided at the Board of Directors meeting(1) Acquisition of treasury stock
To enable the flexible execution of capital policy, the articles of incorporation stipulate that the company can repurchaseshares in the open market or through other means based on a board of directors resolution in accordance with Article 1652 of the Companies Act.
(2) Interim dividends
To flexibly return profits to shareholders, the articles of incorporation stipulate that interim dividends from retained earnings,
as defined in Article 454-5 in the Companies Act, can be paid based on a board of directors resolution to shareholders orpledgees listed or registered in the final shareholder registry at the end of August each year.
6) Resolutions to appoint or remove directors(1) The articles of incorporation stipulate that resolutions to appoint directors require a majority vote of at least one-third of
shareholders capable of executing voting rights. Cumulative voting is not provided for.
(2) The articles of incorporation stipulate that resolutions to remove directors require a minimum two-third vote ofshareholders owning a majority of the voting rights of shareholders capable of executing voting rights.
7) Special resolutions of the general meeting of shareholders
To facilitate the smooth administration of general meetings of shareholders, the articles of incorporation stipulate that
resolutions based on Article 309-2 of the Companies Act require a minimum two-third vote of shareholders owning aminimum one-third of the voting rights of shareholders capable of executing voting rights, except as otherwise provided forby the articles of incorporation.

HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Corporate Governance and Internal Auditing(2) Compensation for auditing
1) Breakdown of compensation for certified public accountants providing auditing services, etc.
(Millions of yen)
Category
The company

Fiscal 2011
Compensation forCompensation
audit certification
for non-auditing
services
services(Thousands of U.S. dollars)
Fiscal 2012

Compensation foraudit certification
services

Fiscal 2012

Compensation
for non-auditing
services

Compensation foraudit certification
services

52

2

—

4

—

50

—

5

57

2

706

25

52

5

Subsidiaries

4

Total

57

645

Compensation
for non-auditing
services252) Breakdown of other important compensation
FY2/11
The company and most of its overseas consolidated subsidiaries paid the KPMG Group, which belongs to the same
network as our certified public accountants providing auditing services, for audit certification and non-auditing services(such as tax advisory services).
FY2/12The company and most of its overseas consolidated subsidiaries paid the KPMG Group, which belongs to the same
network as our certified public accountants providing auditing services, for audit certification and non-auditing services(such as tax advisory services).
3) Details of non-auditing services provided by certified public accountants to the company
FY2/11
We have commissioned an audit company to undertake financial due diligence support tasks, which is a non-auditing
service as stipulated in Article 2, Paragraph 1 of the Certified Public Accountants Act.
FY2/12
We have commissioned an audit company to undertake advisory and guiding tasks relating to the International Financial
Reporting Standards (IFRS), which is a non-auditing service as stipulated in Article 2, Paragraph 1 of the Certified Public
Accountants Act.
4) Policy on setting compensation for auditing services
Not applicable.

HISAMITSU PHARMACEUTICAL CO., INC

16

FINANCIAL REPORT 2012

Financial Section

Analysis of Financial Position, Operating Results, and Cash Flows(1) Analysis of financial position in Fiscal 2012
1) Assets
Assets totaled ¥192,838 million at the end of FY2/12, a decrease of ¥1,948 million from the previous year, due mainly todecreases of ¥5,397 million in cash and deposits and of ¥3,225 million in notes and accounts receivable-trade, despite anincrease of ¥7,893 million in distribution right.
2) Liabilities
Liabilities totaled ¥43,575 million at the end of FY2/12, a decrease of ¥9,989 million from the previous year, due mainly todecreases in short-term loans payable of ¥1,610 million, in income taxes payable of ¥6,399 million, and in long-term loans
payable of ¥1,864 million.
3) Net assets
Net assets totaled ¥149,263 million at the end of FY2/12, an increase of ¥8,040 million from the previous year, due mainly
to an increase in retained earnings of ¥12,405 million and a decrease in treasury stock of ¥3,319 million.

(2) Analysis of operating results in Fiscal 2012
1) Net sales
Net sales grew 0.4% year on year to ¥137,794 million. This increase is due mainly to the strong performance by overseas
subsidiaries including Noven.
2) Operating income
Operating income fell 8.0% year on year to ¥25,937 million. This decrease is attributable mainly to the increase inadvertising expenses and R&D expenses.
3) Ordinary income
Ordinary income rose 0.8% year on year to ¥33,494 million. This increase is attributable mainly to an increase in equity inearnings of affiliates.
4) Net income
Net income fell 12.0% year on year to ¥18,439 million due mainly to distribution license fees recorded as extraordinary
income in the previous year. Consequently, net income per share totaled ¥215.09 in FY2/12, and return on equity was
12.8%.

HISAMITSU PHARMACEUTICAL CO., INC

17

FINANCIAL REPORT 2012

Financial Section(3) Analysis of cash flows in Fiscal 2012
Cash and cash equivalents at the end of the FY2/12 totaled ¥34,222 million, a decrease of ¥3,431 million from the end of
the fiscal year.
1) Net cash provided by (used in) operating activities
Net cash provided by operating activities totaled ¥25,558 million (¥36,342 million provided for of the previous fiscal year),due mainly to income before taxes and minority interests (¥32,379 million), depreciation and amortization (¥6,188 million),and equity in earnings of affiliates (¥6,881 million).
2) Net cash provided by (used in) investment activities
Net cash used in investment activities totaled ¥15,473 million (¥8,248 million used for of the previous fiscal year), due
mainly to payments for purchases of tangible fixed assets (¥9,858 million) and payments for purchase of intangible fixed
assets (¥5,921 million).
3) Net cash provided by (used in) financing activities
Net cash used in financing activities totaled ¥13,010 million (¥15,659 million used for of the previous fiscal year), due
mainly to outflow from repayment of long-term loans payable (¥5,401 million) and cash dividends paid (¥6,031 million).

Capital Expenditures
Capital investment totaled ¥10,284 million in FY2/12, due mainly to augmenting and expanding production and researchequipment.
In the Pharmaceuticals segment, we mainly augmented and expanded production equipment at the Tosu and the
Utsunomiya Plants, and added research equipment at the Tosu and Tsukuba Laboratories, resulting in capital investmentof ¥2,176 million.
We also disposed of the building and production equipment of the Utsunomiya Plant during the fiscal year under review,
due to the effects of the Great East Japan Earthquake of March 11, 2011.
The total book value of such facilities at the time of disposal was ¥567 million.
In other businesses, we mainly invested to expand bandwidth to provide digital capabilities to our subscribers, resulting
in capital investment of ¥6,075 million.

HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Financial Section

Dividend Policy
Our basic policy is to continue paying stable dividends to shareholders. We pay special and commemorative dividends inlight of earnings and other factors in an effort to return profits to shareholders.
We also implement various other financial measures, such as company share buybacks, as effective means for
returning profits to shareholders.
Our basic policy is to pay dividends from retained earnings twice yearly through interim dividends and year-end
dividends. The General Meeting of Shareholders is responsible for deciding on year-end dividends and the Board of
Directors decides on interim dividends.
In FY2/12 we paid an interim dividend of ¥35 per share and a year-end dividend of ¥35 per share, for an annual
dividend of ¥70 per share.
We work to improve our business base through the targeted investment of internal reserves into research anddevelopment, manufacturing facilities, overseas business development, and other areas.
Our Articles of Incorporation stipulate that interim dividends can be paid based on a Board of Directors’ resolution toshareholders or pledgees listed or registered in the final shareholder registry at the end of August each year.
Note: Dividends in Fiscal 2012 are as follows.

Resolution date(Millions of yen)

(Yen)

(Thousands of
U.S. dollars)(U.S. dollars)

Total dividends

Dividends per share

Total dividends

Dividends per share

October 12, 2011
Board of directors resolution

2,999

35

37,172

0.43

2,999

35

37,172

0.43

May 24, 2012
General meeting of shareholders resolution

HISAMITSU PHARMACEUTICAL CO., INC

19

FINANCIAL REPORT 2012

Financial Section

Business and Other Risks
The following risks associated with our group’s business activities could have a significant impact on the decisions ofinvestors.
Any forward-looking statements are based on our judgments at the end of FY2/12.
1) Legal and regulatory risks
Our mainstay pharmaceuticals and related products business is affected by a variety of regulations, including the national
health insurance drug price system and the healthcare insurance system. For example, the revision of national healthinsurance drug prices every two years places regular downward pressure on selling prices, and this could have a negative
impact on earnings. We are similarly affected by a variety of regulations overseas.
2) Risks from side effects
Unforeseen side effects could force our mainstay pharmaceuticals and related products business to recall products orcancel product launches, which could have a negative impact on earnings.
3) Research and development risks
We conduct research and development into new products and new technologies. However, earnings could be adversely
affected by the suspension of research and development activities for a variety of reasons, including failure to produce
anticipated results, or by the inability to recover research and development investment through sales.
4) Manufacturing and procurement risks
We manufacture products using independent technology at our own plants. We rely on specific vendors to supply certain
products and raw materials. Consequently, earnings could be adversely affected by the suspension of manufacturing orpurchasing of these products and raw materials for some reason.
5) Environmental risksSome of the chemicals used in our research and development activities and manufacturing processes can have an
adverse impact on human health and the surrounding environment. Although we take sufficient safeguards, earnings could
be adversely affected if these substances are judged to be having a negative impact on the surrounding environment.
6) Intellectual property risks
Our business activities could possibly be suspended or lead to litigation if they violate the patents or other intellectual
property rights of another company. We may also initiate litigation if another company violates our intellectual property
rights. Earnings could be adversely affected by the process and outcome of such actions.
7) Litigation risks
Our business activities could possibly lead to litigation related to pharmaceutical side-effects and product liability. Earnings
could be adversely affected by the process and outcome of such actions.
8) Other risks
In addition to the foregoing, other potential risks include natural disasters and the security of computer systems.
HISAMITSU PHARMACEUTICAL CO., INC

20

FINANCIAL REPORT 2012

Financial Section

Consolidated Balance Sheets
February 28, 2011 and February 29, 2012

(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

Cash and deposits

33,18627,789344,435

Notes and accounts receivable-trade

36,86033,635416,894

Short-term investment securities

5,380

7,083

87,791

Merchandise and finished goods

6,198

7,249

89,849

333

367

4,549

Raw materials and supplies

4,770

4,935

61,168Deferred tax assets

3,620

2,896

35,895

Other

2,786

3,702

45,885

Allowance for doubtful accounts

(241)

(202)

(2,504)

92,89687,455

1,083,974

Buildings and structures (Notes 2, 3)

18,825

19,385240,270

Machinery, equipment and vehicles (Notes 2, 3)

7,452

6,972

86,415(Assets)
Current assets

Work-in-process

Total current assets
Noncurrent assets
Tangible fixed assets, net

Tools, furniture and fixtures (Note 2, 4)

2,223

2,470

30,615Land (Notes 2, 4)

12,422

12,364

153,247

454

390

4,834

Construction in progress

2,882

1,772

21,963

Total tangible fixed assets

44,26043,357537,395

Lease assets

Intangible fixed assets
Distribution right
Goodwill—

7,893

97,831

6,268

5,286

65,518

85

345

4,276

Temporary account for intangible fixed assets

2,813

50

620

Other

3,774

2,973

36,84912,943

16,548205,107

Investment securities (Note 1)

31,79934,549428,223

Long-term deposits

2,000

3,000

37,184

Prepaid pension cost

4,581

3,995

49,517

Deferred tax assets

3,833

1,402

17,377

Other

2,603

2,757

34,172

Allowance for doubtful accounts

(131)

(228)

(2,826)

SoftwareTotal intangible fixed assets
Investments and other assets

Total investments and other assets

44,68645,477563,671

Total noncurrent assets

101,890

105,382

1,306,173

TOTAL ASSETS

194,787

192,838

2,390,159

HISAMITSU PHARMACEUTICAL CO., INC

21

FINANCIAL REPORT 2012

Financial Section(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

Notes and accounts payable-trade

11,27911,932

147,893

Short-term loans payable (Note 2)

6,055

4,445

55,094

103

111

1,376

(Liabilities)
Current liabilities

Lease obligations
Accounts payable

7,192

6,177

76,562

Income taxes payable

10,2393,839

47,583

Allowance for sales returns
Provision for bonuses

176

198

2,454

1,499

1,550

19,212

—

147

1,822

2,729

2,730

33,83739,275

31,134

385,895

3,089

1,224

15,171

375

304

3,768

Deferred tax liabilities on revaluation (Note 4)

2,164

1,894

23,475

Deferred tax liabilities

1,968

1,495

18,530

Provision for retirement benefits

4,910

4,927

61,068Provision for directors’ retirement benefits

1,200

1,230

15,245579

1,365

16,919Total noncurrent liabilities

14,28812,441

154,202

Total Liabilities

53,564

43,575

540,097

Capital stock

8,473

8,473

105,020

Capital surplus

8,396

8,396

104,065

147,272

159,677

1,979,140

Provision for loss on disaster
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable (Note 2)
Lease obligations

Other(Net Assets)
Shareholders’ equity

Retained earnings
Treasury stock
Total shareholders’ equity(18,525)(21,844)(270,749)

145,616

154,702

1,917,476

(564)

47

583

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land (Note 4)

3,189

3,459

42,873Foreign currency translation adjustment(7,949)(9,983)(123,736)(5,324)(6,476)(80,268)

930

1,036

12,841

Total net assets

141,222

149,263

1,850,062

TOTAL LIABILITIES AND NET ASSETS

194,787

192,838

2,390,159

Total accumulated other comprehensive income
Minority interests

HISAMITSU PHARMACEUTICAL CO., INC

22

FINANCIAL REPORT 2012

Financial Section

Consolidated Statements of Income
Years ended February 28, 2011 and February 29, 2012

(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012
1,707,908

Net sales

137,184

137,794

Cost of sales (Notes 2, 3)

47,697

46,785579,883

Gross profit

89,48691,008

1,128,012

Selling, general and administrative expenses (Notes 1, 2)

61,29265,070806,520

Operating income

28,19325,937

321,480

Non-operating income
Interest income

59

71

880

Dividends income

356

392

4,859

Development license revenues

137

127

1,574

Equity in earnings of affiliates

4,539

6,881

85,288

357

402

4,983

5,448

7,875

97,608Interest expenses

125

92

1,140

Foreign exchange losses

131

44

545

Other
Total non-operating income
Non-operating expenses

Provision of allowance for doubtful accounts

—

97

1,202

Loss on sales of receivables

23

21

260

Other

125

63

781

406

319

3,954

33,23633,494415,146

Government subsidies

19

4,611

57,152Gain on disposals of fixed assets (Note 4)

7

—

—

Reversal of allowance for doubtful accounts

34

20

248

Total non-operating expenses
Ordinary income
Extraordinary income

Distribution license fees

3,000

—

—

R&D expenses received

—

190

2,355

Insurance income

—

3,403

42,179

Other
Total extraordinary income

39

34

421

3,099

8,260

102,380

Extraordinary loss
Loss on disposals of fixed assets (Note 5)

83

189

2,343

Advanced depreciation deduction of fixed assets

9

4,611

57,152

Loss on valuation of investment securities

138

1,940

24,046

Loss on disaster (Notes 6)

—

2,584

32,028

Other

—

49

607

Total extraordinary loss

231

9,375

116,200

Income before taxes and minority interests

36,10432,379401,326

Income taxes-current

17,121

12,145150,533

Income taxes-deferred(2,146)

1,610

19,955

Total income taxes

14,975

13,755

170,488

Income before minority interests—

18,623230,825

Minority interests

173

184

2,281

20,956

18,439228,545

Net income
HISAMITSU PHARMACEUTICAL CO., INC

23

FINANCIAL REPORT 2012

Financial Section

Consolidated Statements of Comprehensive Income
Years ended February 28, 2011 and February 29, 2012

(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012—

18,623230,825

Valuation difference on available-for-sale securities

—

607

7,524

Revaluation reserve for land

—

270

3,347

Foreign currency translation adjustment—(1,508)(18,691)

Share of other comprehensive income of associates accounted for under the equity method

—

(534)

(6,619)Total other comprehensive income (Note 2)—(1,165)(14,440)—

17,458216,386

Owners of the parent—

17,287214,266

Minority interests

—

171

2,119

Income before minority interests
Other comprehensive income

Comprehensive income (Note 1)
Comprehensive income attributable to:

HISAMITSU PHARMACEUTICAL CO., INC

24

FINANCIAL REPORT 2012

Financial Section

Consolidated Statements of Changes in Shareholders’ Equity
Years ended February 28, 2011 and February 29, 2012

(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

8,473

8,473

105,020

Shareholders’ equity
Common stock
Balance at the end of the previous period
Changes of items during the period
Total changes of items during the period
Balance at the end of the current period

—

—

—

8,473

8,473

105,020

8,396

8,396

104,065

—

—

—

8,396

8,396

104,065

132,298

147,272

1,825,384

Capital surplus
Balance at the end of the previous period
Changes of items during the period
Total changes of items during the period
Balance at the end of the current period
Retained earnings
Balance at the end of the previous period
Changes of items during the period
Cash dividends(5,982)(6,033)(74,777)

Net income

20,956

18,439228,545

Revaluation reserve for land
Total changes of items during the period
Balance at the end of the current period

(0)

—

—

14,973

12,405

153,756

147,272

159,677

1,979,140(18,521)(18,525)(229,611)(4)(3,319)(41,138)

Treasury stock
Balance at the end of the previous period
Changes of items during the period
Purchase of treasury stock(4)(3,319)(41,138)(18,525)(21,844)

270,749

130,647

145,616

1,804,859

Cash dividends(5,982)(6,033)(74,777)

Net income

20,956

18,439228,545(4)(3,319)(41,138)

Total changes of items during the period
Balance at the end of the current period
Total shareholders’ equity
Balance at the end of the previous period
Changes of items during the period

Purchase of treasury stock
Revaluation reserve for land
Total changes of items during the period
Balance at the end of the current period

HISAMITSU PHARMACEUTICAL CO., INC

25

(0)

—

—

14,9699,086

112,618

145,616

154,702

1,917,476

FINANCIAL REPORT 2012

Financial Section(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

(780)

(564)

(6,991)

Net changes of items other than shareholders’ equity

215

611

7,573

Total changes of items during the period

215

611

7,573

(564)

47

583

3,188

3,189

39,527

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Balance at the end of the previous period
Changes of items during the period

Balance at the end of the current period
Revaluation reserve for land
Balance at the end of the previous period
Changes of items during the period
Net changes of items other than shareholders’ equity

0

270

3,347

Total changes of items during the period

0

270

3,347

3,189

3,459

42,873(2,968)(7,949)(98,525)

Net changes of items other than shareholders’ equity(4,981)(2,034)(25,211)

Total changes of items during the period(4,981)(2,034)(25,211)(7,949)(9,983)(123,736)(560)(5,324)(65,989)

Net changes of items other than shareholders’ equity(4,764)(1,152)(14,279)

Total changes of items during the period(4,764)(1,152)(14,279)(5,324)(6,476)(80,268)

889

930

11,527

40

106

1,314

Balance at the end of the current period
Foreign currency translation adjustments
Balance at the end of the previous period
Changes of items during the period

Balance at the end of the current period
Total accumulated other comprehensive income
Balance at the end of the previous period
Changes of items during the period

Balance at the end of the current period
Minority interests
Balance at the end of the previous period
Changes of items during the period
Net changes of items other than shareholders’ equity

40

106

1,314

930

1,036

12,841130,976

141,2221,750,397

Cash dividends(5,982)(6,033)(74,777)

Net income

20,956

18,439228,545(4)(3,319)(41,138)

Total changes of items during the period
Balance at the end of the current period
Total net assets
Balance at the end of the previous period
Changes of items during the period

Purchase of treasury stock
Revaluation reserve for land
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance at the end of the current period
HISAMITSU PHARMACEUTICAL CO., INC

26

(0)

—

—

(4,723)(1,045)(12,952)

10,246

8,040

99,653

141,222

149,263

1,850,062
FINANCIAL REPORT 2012

Financial Section

Consolidated Statements of Cash Flows
Years ended February 28, 2011 and February 29, 2012

(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

Income before taxes and minority interests

36,10432,379401,326

Depreciation and amortization

6,374

6,188

76,698

Amortization of goodwill

779

711

8,813

Increase (decrease) in provision for retirement benefits

198

21

260

Increase (decrease) in provision for directors’ retirement benefits

26

29

359

Increase (decrease) in provision for bonuses

185

79

979

Increase (decrease) in allowance for doubtful accounts

(29)

59

731

Increase (decrease) in provision for sales returns

(61)

22

273

Interest and dividends income

(415)

(464)

(5,751)

Interest expenses

125

92

1,140

Foreign exchange losses (gains)

71

2

25

(4,539)(6,881)(85,288)

Subsidy income(19)(4,611)(57,152)

Insurance income—(3,403)(42,179)

Advanced depreciation deduction of fixed assets

—

4,611

57,152

Loss on disaster

—

2,584

32,028Loss (gain) on sales of investment securities

(39)

(34)

(421)

Loss (gain) on valuation of investment securities

138

1,940

24,046

Loss (gain) on disposal of tangible fixed assets

83

189

2,343

5,140

2,979

36,924

Decrease (increase) in inventories

702(2,168)(26,872)

Decrease (increase) in other current assets(568)(1,004)(12,444)(3,184)

790

9,792

Increase (decrease) in other current liabilities

494(1,022)(12,667)

Other, net

742

1,449

17,96042,31034,543428,148

Interest and dividends received

5,954

6,982

86,539Interest expenses paid

(125)

(92)

(1,140)

Proceeds from insurance income

—

3,403

42,179Payments for loss on disaster

—

(793)

(9,829)(11,796)(18,484)(229,103)

36,34225,558316,782

Cash flows from operating activities

Equity in losses (earnings) of affiliates

Decrease (increase) in notes and accounts receivable-trade

Increase (decrease) in notes and accounts payable-trade

Sub-total

Income taxes paid
Net cash provided by (used in) operating activities

HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Financial Section(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

Net decrease (increase) in time deposits

(259)

189

2,343

Decrease (increase) in long-term deposits

150(1,000)(12,395)

Payments for purchase of tangible fixed assets(5,947)(9,858)(122,186)

Proceeds from sales of tangible fixed assets

37

3

37

Cash flows from investment activities

Payments for purchase of intangible fixed assets(217)(5,921)(73,389)

Payments for purchase of investment securities(2,428)(3,735)(46,294)

189

234

2,900

Payments of loans receivable

(9)

(11)

(136)

Collection of loans receivable

216

13

161

Proceeds from subsidy

19

4,611

57,152(8,248)(15,473)(191,782)(4,549)881

10,920

Proceeds from sales and redemption of investment securities

Net cash provided by (used in) investment activities
Cash flows from financing activities
Increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

270

1,065

13,200

Repayment of long-term loans payable(5,216)(5,401)(66,943)

2

—

—

(114)

(65)

(806)

(3)

(3,317)(41,113)(5,980)(6,031)(74,752)

(67)

(140)

(1,735)(15,659)(13,010)(161,254)

Effect of exchange rate changes on cash and cash equivalents(1,011)(506)(6,272)

Net increase (decrease) in cash and cash equivalents

11,422(3,431)(42,526)

Cash and cash equivalents, beginning of year

26,23237,654

466,708

Cash and cash equivalents, end of year (Note 1)

37,65434,222

424,170

Proceeds from stock issuance to minority shareholders
Cash dividends paid to minority shareholders
Purchase of treasury stock
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities

HISAMITSU PHARMACEUTICAL CO., INC

28

FINANCIAL REPORT 2012

Financial Section

Basis of Preparation of Consolidated Financial Statements
The Company has prepared consolidated financial statements in accordance with the Regulations Concerning the
Terminology, Forms and Preparation Methods of Consolidated Financial Statements (Ministry of Finance Ordinance No.
28, 1976; hereinafter, Regulations for Consolidated Financial Statements).
However, the consolidated financial statements for Fiscal 2011 (March 1, 2010 – February 28, 2011) were preparedbased on the Regulations for Consolidated Financial Statements prior to revision, whereas the consolidated financial
statements for Fiscal 2012 (March 1, 2011 – February 29, 2012) were prepared based on the Regulations for Consolidated
Financial Statements after revision.

Significant Accounting Policies Concerning the Preparation of Consolidated Financial Statements
Fiscal 2012 (March 1, 2011 – February 29, 2012)

I. Scope of consolidation(a) Consolidated subsidiaries: 17
Names of consolidated subsidiaries:
CRCC Media Co., Ltd.
Saga City-Vision Co., Ltd.
Taiyo Co., Ltd
Kyudo Co., Ltd
Hisamitsu Agency Co., Ltd.
Hisamitsu U.S., Inc.
Hisamitsu America, Inc.
Noven Pharmaceuticals, Inc.
Hisamitsu Farmaceutica do Brasil Ltda.
Hisamitsu UK Ltd.
Hisamitsu Vietnam Pharmaceutical Co., Ltd.
Hisamitsu Pharmaceutical Technology Consulting (Beijing) Co., Ltd.
P.T. Hisamitsu Pharma Indonesia
4 other companies
Hisamitsu Pharmaceutical Technology Consulting (Beijing) Co., Ltd., upon its formation, has been included in the scopeof consolidation. One consolidated subsidiary has been excluded from the scope of consolidation, as a result of its
liquidation.
(b) Non-consolidated subsidiaries: 2
Names of non-consolidated subsidiaries:
Kokusai Pappu-zai Kenkyusho Co., Ltd.
Taiyo Kaihatsu Co., Ltd.

HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Financial Section

Reason why non-consolidated subsidiaries have been excluded from the scope of consolidation
Non-consolidated subsidiaries have been excluded from the scope of consolidation because they are small, and neither
their total assets, net sales, net income (proportion attributable to the Group) nor retained earnings (proportion attributable
to the Group) would have a material impact on the consolidated financial statements.

II. Investments accounted for under the equity method(a) Equity-method non-consolidated subsidiaries: 0(b) Equity-method affiliates: 3
Yutoku Pharmaceutical Ind. Co., Ltd.
Maruto Sangyo Co., Ltd.
Novogyne Pharmaceuticals
Yutoku Pharmaceutical Ind. Co., Ltd., upon the acquisition of shares, has been accounted for under the equity method.
Reason why non-consolidated subsidiaries have not been accounted for under the equity method
The above non-consolidated subsidiaries have not been accounted for under the equity method because their impacts on
items such as net income and retained earnings is negligible, and is not material in the context of the total. There are noaffiliated companies for which the equity method is not being used.

III. Information concerning business years, etc., of consolidated subsidiaries
The fiscal years of the 12 overseas consolidated subsidiaries end on December 31. Since there is less than three months’
difference between that date and the end of the consolidated fiscal year, we use financial statements as of the date of theend of the fiscal years of the consolidated subsidiaries. We make the required consolidated adjustments if any majortransactions occur between the end of the fiscal years of the consolidated subsidiaries and end of the consolidated fiscal
year.

IV. Accounting standards
A. Valuation standards and methods for significant assets
1. Securitiesa) Held-to-maturity bonds
Valued under amortized cost method.
b) Available-for-sale securities
1) Securities with market value
Valued at market price, using the market price at the balance sheet date.
All valuation differences are directly charged or credited to shareholders’ equity, and costs of securities sold arecomputed using the moving average method.
2) Securities without market value
Valued at cost, determined by the moving average method.

HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Financial Section

2. Inventories
Calculated by the average cost method (book value on the balance sheet is written down according to the decline inprofitability).
B. Depreciation methods for significant depreciable assets
1. Tangible fixed assets (excluding lease assets)a) Company and domestic consolidated subsidiaries
Mainly the declining balance method.
b) Overseas consolidated subsidiaries
Mainly straight-line method.
2. Intangible fixed assets (excluding lease assets) and long-term prepaid expenses
Measured by the straight line method.
Within intangible fixed assets, software for internal use is depreciated over its useful life (5 years) using the straight line
method.
3. Lease assets
For finance lease transactions other than those for which the right of ownership of the lease assets transfers to the lessee
at the end of the lease period, depreciation is calculated by the straight-line method based on the assumption that theuseful life equals the lease term and the residual value equals zero. The accounting treatment of finance lease transactions
other than those for which the right of ownership of the lease assets transfers to the lessee at the end of the lease period
and whose lease period commenced before February 28, 2009 is similar to that of normal rental transactions.
C. Standards for significant reserves and allowances
1. Allowance for doubtful accounts
In order to provide against losses from doubtful receivables, estimated irrecoverable amounts are recorded as a provision.
a) General receivables
Based on historical bad debt experience.
b) Receivables at risk of default and in bankruptcy reorganization
Based on an assessment of the financial position.
2. Provision for sales returns
In order to provide against losses from product returns after the balance sheet date, the company makes a provision up to
the maximum amount allowed under the Corporation Tax Law.
3. Provision for bonuses
To provide for the payment of bonuses to employees, the Company and its certain subsidiaries record a provision equal tothe portion of expected future bonus payments incurred during the term under review.

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FINANCIAL REPORT 2012

Financial Section

4. Provision for loss on disaster
The Company makes a provision prepared for the estimated amount of loss as at the end of FY2/12, associated with therestoration of assets affected by the Great East Japan Earthquake.
5. Provision for retirement benefits
The Company and certain subsidiaries, to prepare for the payment of retirement benefits to employees, provide a reserve at
an amount based on estimated retirement benefit obligations and pension assets at the end of the consolidated fiscal year.
Actuarial differences are amortized starting in the next consolidated fiscal year in equal amounts for a fixed number ofyears (five years) that is less than the average remaining years of service of employees when incurred.
6. Provision for directors’ retirement benefits
The Company makes a provision for estimated retirement payments to directors and corporate auditors in accordance with
its internal regulations.
D. Translation of significant foreign currency denominated assets and liabilities used in preparing the financial
statements of consolidated companies on which the consolidated financial statements are based
Assets and liabilities denominated in foreign currencies are translated into yen using the spot exchange rate for final day of
the fiscal year, and translation differences are booked as gains or losses. Note that the assets and liabilities of overseas
subsidiaries and other like entities are translated into yen using the spot exchange rate for final day of the fiscal year, while
revenues and expenses are translated using the average exchange rate for the period, and these translation differences
are booked on the Foreign Currency Translation Adjustment and Minority Interests under Net Assets.
E. Method and period of amortization of goodwill
Goodwill is amortized evenly over a five to ten-year period which is expected to show an effect. If the value of goodwill issmall, it is amortized in full in the fiscal year when it accrues.
F. Scope of funds in the Consolidated Statements of Cash Flows
Funds (cash & cash equivalents) in the Consolidated Statements of Cash Flows consist of cash in hand, demand deposits
and easily realizable short-term investments with high liquidity and maturity dates not more than three months from thedate of purchase, and which carry negligible risks of price fluctuation.
G. Other significant accounting policies used in the preparation of the consolidated financial statements
Treatment of Consumption Tax etc.
The accounts are prepared excluding Consumption Tax and Local Consumption Tax.

HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Financial Section

Significant Changes In Accounting Policies Concerning the Preparation Of Consolidated Financial Statements
Adoption of Accounting Standard for Asset Retirement Obligations
The Company adopted the “Accounting Standard for Asset Retirement Obligations (ASBJ Statement No. 18; March 31,2008) and “Guidance on Accounting Standard for Asset Retirement Obligations (ASBJ Guidance No. 21; March 31, 2008)
from FY2/12. This change has no impact on profit and loss.
Adoption of Accounting Standard for Equity Method of Accounting for Investments, and Practical Solution on
Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method
The Company adopted the “Accounting Standard for Equity Method of Accounting for Investments” (ASBJ Statement No.
16; issued on March 10, 2008) and “Practical Solution on Unification of Accounting Policies Applied to Associates
Accounted for Using the Equity Method” (PITF No. 24; March 10, 2008) from FY2/12. This adoption has no impact on profit
and loss.
Adoption of Accounting Standard for Business Combinations and other Standards
The Company adopted the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21; December 26,2008), “Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22; December 26, 2008),“Partial Amendments to Accounting Standard for Research and Development Costs” (ASBJ Statement No. 23; December
26, 2008), “Accounting Standard for Business Divestitures” (ASBJ Statement No. 7; December 26, 2008), “AccountingStandard for Equity Method of Accounting for Investments” (ASBJ Statement No. 16; issued on December 26, 2008) and“Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ
Guidance No. 10; December 26, 2008) from FY2/12.

Changes in Presentation
Consolidated statements of income
The Company adopted the “Cabinet Office Ordinance to Partially Amend Regulations Concerning Terminology, Forms andMethods of Preparation of Financial Statements” (Cabinet Office Ordinance No. 5; March 24, 2009) as based on the“Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22; December 26, 2008), and “income
before minority interests” is presented as an independent item.
Consolidated statements of cash flows“Advanced depreciation deduction of fixed assets” has been separately presented, in consideration of an increase in its
significance from FY2/12. For information, “advanced depreciation deduction of fixed assets” in the amount of ¥9 million in
the FY2/11, was included in “other, net” in cash flows from operating activities.

HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Financial Section

Additional Information
From FY2/12, the Company adopted the “Accounting Standard for Presentation of Comprehensive Income” (ASBJ
Statement No. 25; June 30, 2010). Though, the amounts of “valuation and translation adjustment” and “total valuation andtranslation adjustments” are posted as the amounts of “accumulated other comprehensive income” and “total accumulated
other comprehensive income” in FY2/11, respectively.

Notes to Consolidated Financial Statements
Fiscal 2011 (March 1, 2010 – February 28, 2011) and Fiscal 2012 (March 1, 2011 – February 29, 2012)

CONSOLIDATED BALANCE SHEETS*1 Investment securities for non-consolidated subsidiaries and affiliated companies are as follows.
(Millions of yen)
Fiscal 2011
13,592

Investment securities (stocks)

Fiscal 2012
14,738(Thousands of U.S. dollars)
Fiscal 2012
182,672*2 Assets pledged as collateral are as follows.
Pledged assets
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land
Total
Assets provided for factory foundation mortgage
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Total
Liabilities related to the above assets
Short-term loans payable
Long-term loans payable
Total
Liabilities provided for factory foundation mortgage
Short-term loans payable
Long-term loans payable
Total

736 (book value)
13 (book value)
90 (book value)
59 (book value)
900 (book value)

1,370 (book value)
32 (book value)
192 (book value)
59 (book value)
1,655 (book value)

16,981
397
2,380
731
20,513461 (book value)
3 (book value)
90 (book value)
555 (book value)

1,128 (book value)
28 (book value)
192 (book value)
1,349 (book value)

13,981347
2,380
16,720

119
407
526

182
1,164
1,346

2,256
14,427
16,683

54
169
223

119
989
1,108

1,475
12,25813,733*3 Advanced depreciation of government subsidies is ¥1,220 million and ¥5,830 million in FY2/11 and FY2/12, respectively.
This figure is not included in the consolidated balance sheets.
*4 Application of the Land Revaluation Law
Land used for business purposes has been revalued in accordance with the “Act on revaluation of land” (Law 34 of 1998,
promulgated on March 31, 1998) and the “Law Partially Amending the Act on Revaluation of Land” (revision of March 31,
HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Financial Section
Years ended February 28, 2010 and 20111999). The portion of the revaluation gain equivalent to corporation tax and other taxes with tax bases linked tocorporate profits has been recorded under liabilities as “Deferred tax liabilities on revaluation,” while the net sum after
this transfer to the deferred tax liability account is recorded under net assets as “Revaluation reserve for land.”
Revaluation method
The land value used as the basis for calculation of the tax base under the Land Value Tax, stipulated in Article 16 of theLand Value Tax Law (Law No. 69 of 1991), has been calculated by making rational adjustments to the price calculated by
the method determined and publicly announced by the Commissioner of the National Tax Agency, as stipulated in Article
2.4 of the “Regulations for Applying the Land Revaluation Law” (Government Ordinance No. 119 of 1998, promulgatedMarch 31, 1998).
Revaluation dateFebruary 28, 2001

The market value of commercial land revalued in accordance with Article 10 of the Land Revaluation Law at the end of
FY2/11 and FY2/12 was ¥2,810 million and ¥3,103 million lower than the book value after revaluation.

CONSOLIDATED STATEMENTS OF INCOME*1 Main items and the amounts under “Selling, general and administrative expenses” are as follows.
(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

Advertising expenses

8,581

9,565

118,555

Sales promotion expenses

11,702

12,415

153,880

Packing and transportation expenses

2,399

2,502

31,01110

112

Salaries and allowances

6,875

6,755

83,726

Provision for bonuses

921

941

11,663

Provision for retirement benefits

449

639

7,920

Provision for directors’ retirement benefits

26

101

1,252

Provision of allowance for doubtful accounts

779

711

8,813

Business consignment expenses

3,127

3,097

38,386

Research and development expenses, of which:Amortization of goodwill

13,80914,758

182,920

Provision for bonuses

267

263

3,260

Provision for retirement benefits

148

216

2,677

*2 General and administrative expenses include research and development expenses of ¥13,809 million and ¥14,758
million in FY2/11 and FY2/12, respectively.
Manufacturing costs do not include research and development expenses.
*3 In FY2/11 and FY2/12, manufacturing costs include provision for bonuses of ¥350 million and ¥333 million and provision
for retirement benefits of ¥266 million and ¥358 million, respectively.

HISAMITSU PHARMACEUTICAL CO., INC

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FINANCIAL REPORT 2012

Financial Section*4 Breakdown of losses on the disposal of fixed assets(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

Buildings and structures

29

122

1,512

Machinery, equipment and vehicles

38

57

706

Tools, furniture and fixtures

14

8

99

Loss on retirement

Software

—

0

0

Total

82

189

2,343

*5 Loss on disaster represents the loss resulting from the Great East Japan Earthquake which occurred on March 11, 2011
comprising primarily costs for retirement and restoration of tangible fixed assets, loss on disposal of inventories, andfixed expenses during the period of suspended operation. Of these, provision for loss on disaster is ¥147 million.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Fiscal 2012 (March 1, 2011 – February 29, 2012)
1. Comprehensive income in the fiscal year preceding FY2/12

Comprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests
Total(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2012

Fiscal 201216,191200,682

161

1,996

16,352

202,677

2. Other comprehensive income in the fiscal year preceding FY2/12(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2012

Fiscal 2012

214

2,652

Foreign currency translation adjustment(3,339)(41,386)

Share of other comprehensive income of associates accounted for using equity method(1,652)(20,476)

Total(4,777)(59,209)

Valuation difference on available-for-sale securities

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Financial Section

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Fiscal 2011 (March 1, 2010 – February 28, 2011)
1. Shares issued
Type of shares

End of fiscal 2010

Increase

Decrease

End of fiscal 2011

Common stock

95,164,895——

95,164,895

Type of shares

End of fiscal 2010

Increase

Decrease

End of fiscal 2011

Common stock

8,493,446

1,311

—

8,494,757

2. Treasury shares

Reasons for changes
Shares increased for the following main reasons
Increase from purchasing shares in less than one unit
Company portion of treasury shares purchased by equity method affiliates

991 shares
320 shares

3. Dividends(1) Dividends paid
Resolution

Type of shares

Total dividends(millions of yen)

Dividends per share(yen)

Record date

May 26, 2010
Annual general meeting ofshareholders

Common stock

2,947

34

February 28, 2010

May 27, 2010

October 4, 2010
Board of Directors meeting

Common stock

3,034

35

August 31, 2010

November 8, 2010

Payment date(2) Dividends with a record date in fiscal 2011 but a payment date in fiscal 2012
Resolution
May 26, 2011
Annual general meeting of
Shareholders

Type of shares

Source of dividend

Total dividends(millions of yen)

Dividends per share(yen)

Record date

Payment dateCommon stock

Retained earnings

3,034

35

February 28, 2011

May 27, 2011

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Fiscal 2012 (March 1, 2011 – February 29, 2012)
1. Shares issued
Type of shares

End of fiscal 2011

Increase

Decrease

End of fiscal 2012

Common stock

95,164,895——

95,164,895

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FINANCIAL REPORT 2012

Financial Section

2. Treasury shares
Type of shares

End of fiscal 2011

Increase

Decrease

End of fiscal 2012

Common stock

8,494,757

1,000,867—

9,495,624

Reasons for changes
Shares increased for the following main reasons
Acquisition in compliance with the Articles of Association under
the provisions of Paragraph 2, Article 165 of the Companies Act

1,000,000 shares

Increase from purchasing shares in less than one unit
Company portion of treasury shares purchased by equity method affiliates

538 shares
329 shares

3. Dividends(1) Dividends paid
Resolution

Type of shares

Total dividends(millions of yen)

Dividends per share(yen)

Record date

May 26, 2011
Annual general meeting ofshareholders

Common stock

3,034

35

February 28, 2011

May 27, 2011

October 12, 2011
Board of Directors meeting

Common stock

2,999

35

August 31, 2011

November 8, 2011

Resolution

Type of shares

Total dividends(Thousands of
U.S. dollars)

Dividends per share(U.S. dollars)

Record date

Payment date

May 26, 2011
Annual general meeting ofshareholders

Common stock

37,6050.43

February 28, 2011

May 27, 2011

October 12, 2011
Board of Directors meeting

Common stock

37,1720.43

August 31, 2011

November 8, 2011

Payment date(2) Dividends with a record date in fiscal 2012 but a payment date in fiscal 2013
Resolution
May 24, 2012
Annual general meeting of
Shareholders

Resolution
May 24, 2012
Annual general meeting of
Shareholders

Type of shares

Source of dividend

Total dividends(millions of yen)

Dividends per share(yen)

Record date

Payment dateCommon stock

Retained earnings

2,999

35

February 29, 2012

May 25, 2012

Type of shares

Source of dividend

Total dividends(Thousands of
U.S. dollars)

Dividends per share(U.S. dollars)

Record date

Payment dateCommon stock

Retained earnings

37,1720.43

February 29, 2012

May 25, 2012

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CONSOLIDATED STATEMENTS OF CASH FLOWS*1 Relationship between year-end balances of cash and cash equivalents and amounts stated in the consolidatedbalance sheets(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

Cash and deposits

33,18627,789344,435

Short-term investment securities

5,380

7,083

87,791

Total

38,56734,872432,226

(912)

(649)

(8,044)37,65434,222

424,170

Term deposits longer than three months
Cash and cash equivalents

LEASE TRANSACTIONS
Lease transactions other than finance leases in which ownership of the leased asset is deemed to have passed to thelessee and whose lease period commenced before February 28, 2009
1. Purchase price equivalent, accumulated depreciation equivalent, and book value equivalent(Millions of yen)
Fiscal 2011
Purchase value
equivalent

Accumulated
depreciation equivalentBook value
equivalent

Machinery, equipment and vehicles

403

280

122

Tools, furniture and fixtures

959

687

271

Software

41

30

10

1,404

999

405

Total

(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2012

Fiscal 2012

Purchase value
equivalent

Accumulated
depreciation equivalentBook value
equivalent

Purchase value
equivalent

Accumulated
depreciation equivalentBook value
equivalent

Machinery, equipment and vehicles

192

164

27

2,380

2,033

335

Tools, furniture and fixtures

749

604

144

9,284

7,486

1,785

Software

34

29

4

421

359

50

Total

976

799

176

12,097

9,903

2,181

Note: The purchase price equivalent was computed by including interest paid because the ratio of future lease payment
obligations to the year-end balance of tangible fixed assets is not material.

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Financial Section

2. Book value equivalent of future lease payments(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

Within one year

228

124

1,537

Over one year

176

52

645

Total

405

176

2,181

Note: Future lease payment obligations were computed by including interest paid because the ratio of the year-end balanceof future lease payments to the year-end balance of tangible fixed assets is not material.

3. Lease payments and depreciation equivalent(Millions of yen)
Fiscal 2011

(Thousands of U.S. dollars)

Fiscal 2012

Fiscal 2012

Lease payments

259

231

2,863

Depreciation equivalent

259

231

2,863

4. Method of calculating depreciation equivalent
The value is calculated using the straight-line method whereby the lease period equals the useful life of the lease asset,
and the residual value of the lease asset is zero.

FINANCIAL INSTRUMENTS
Fiscal 2011 (March 1, 2010 – February 28, 2011)
1. Outline of financial instruments(1) Policy for financial instruments
Our Group raises funds necessary to conduct mainly the manufacturing and sales of pharmaceuticals through bank loans
or issuance of bonds. Temporary cash surpluses are invested in low risk financial assets. Derivatives are used within thescope of actual requirements and not for speculative purposes.
(2) Nature and extent of risks arising from financial instruments, and risk management for financial instruments
Although operating receivables such as notes and accounts receivable-trade are exposed to customer credit risk, this risk
is managed through regular checks on the business and credit position of customers.
Short-term investment securities and investment securities, mainly consisting of stocks of corporations that theCompany has business relationships with, are exposed to the risk of market price fluctuations. This risk is managed
through periodic monitoring of market value and the financial status of the related issuers. With respect to stocks incompanies that have a business relationship, the Company checks necessity for holding them, taking into account thebusiness relationship.
Payment terms of operating payables, such as notes and accounts payable-trade, accounts payable, and income taxes
payable are less than one year. Loans were mainly used to procure the funds needed for mergers and acquisitions.
Although operating payables and borrowings are exposed to liquidity risk, this risk is managed through methods such as
preparing cash flow planning on a monthly basis.
Derivatives transactions are undertaken by the Finance Department after authorization by the Board of Directors or the
General Manager of the Finance Department, depending on the importance of the transaction, and details areappropriately reported to the Board of Directors.
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2. Market values of financial instruments
Carrying amount, market value and unrealized gain/loss of the financial instruments as of February 28, 2011 are as follows:
Financial instruments whose market values are not readily determinable are excluded from the following table (See(Note 2)):
(Millions of yen)
Carrying amountMarket value

Unrealized gain
(loss)(1) Cash and deposits

33,18633,186—(2) Notes and accounts receivable-trade

36,86036,860—Available-for-sale securities

22,956

22,956—

Stock of affiliated companies

1,329

663

(666)

(4) Long-term deposits

2,000

1,967

(32)

Total assets

96,332

95,634(698)(1) Notes and accounts payable-trade

11,27911,279

—

770

770

—

(3) Accounts payable

7,192

7,192

—

(4) Income taxes payable

10,23910,239—(5) Long-term loans payable (*)

8,375

8,380

5

Total liabilities

37,85637,861

5———(3) Short-term investment securities and investment securities(2) Short-term loans payable

Derivative transactions(*) Includes current portion of long-term loans payable.
Note 1: Calculation method of market values of financial instruments and securities
Assets(1) Cash and deposits and (2) Notes and accounts receivable-trade
These assets are recorded using book values because market values approximate book values because of theirshort-term maturities.
(3) Short-term investment securities and investment securities
Certificates of deposit are recorded using book values because market values approximate book values becauseof their short-term maturities. The market values of stocks are determined using the quoted market price on
applicable stock exchanges.
(4) Long-term deposits
Long-term deposits are stated using the quoted prices obtained from financial institutions.
Liabilities(1) Notes and accounts payable-trade, (2) Short-term loans payable, (3) Accounts payable, and (4) Income taxes
payableThese payables are recorded using book values because market values approximate book values because of theirshort-term maturities.

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Financial Section(5) Long-term loans payable (including current portion of long-term loans payable)
Long-term loans payable with floating interest rates are recorded using book values because market values
approximate book values as these rates reflect market interest rates over the short-term. For long-term loans
payable with fixed interest rates, market values are determined by discounting the aggregated values of theprincipal and interest using an assumed interest rate based on the interest rate that would be applied to a newloan of a similar nature.
Note 2: Financial instruments whose market values are not readily determinable(Millions of yen)

Category

Carrying amountUnlisted equity securities

12,812

Other

81

These items are not included in “(3) Short-term investment securities and investment securities,” because there is nomarket price, and it is very difficult to identify market values.
Note 3: Redemption schedule of monetary assets and securities with contractual maturities after the balance sheet date(Millions of yen)
Within one year

One to five
years

Five to ten
years

Over ten years

Cash and deposits

33,186———

Notes and accounts
receivable-trade

36,860

—

—

—

2,500

—

—

—

—

—

505

341

—

2,000

—

—

72,547

2,000

505

341

Short-term investment securities and investment securities:
Available-for-sale securities with contractual maturities:
Negotiable certificates of deposit
Other
Long-term deposits
Total

Note 4: Redemption schedule of long-term loans payable after the balance sheet date(Millions of yen)
Within one year

One to five
years

Five to ten
years

Over ten years

Long-term loans payable

5,285

3,034

28

26

Total

5,285

3,034

28

26

Additional information
The Company adopted the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10; March 10, 2008) and“Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19; March 10, 2008) from FY2/11.

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FINANCIAL INSTRUMENTS
Fiscal 2012 (March 1, 2011 – February 29, 2012)
1. Outline of financial instruments(1) Policy for financial instruments
Our Group raises funds necessary to conduct mainly the manufacturing and sales of pharmaceuticals through bank loans
or issuance of bonds. Temporary cash surpluses are invested in low risk financial assets. Derivatives are used within thescope of actual requirements and not for speculative purposes.
(2) Nature and extent of risks arising from financial instruments, and risk management for financial instruments
Although operating receivables such as notes and accounts receivable-trade are exposed to customer credit risk, this risk
is managed through regular checks on the business and credit position of customers.
Short-term investment securities and investment securities, mainly consisting of stocks of corporations that theCompany has business relationships with, are exposed to the risk of market price fluctuations. This risk is managed
through periodic monitoring of market value and the financial status of the related issuers. With respect to stocks incompanies that have a business relationship, the Company checks necessity for holding them, taking into account thebusiness relationship.
Payment terms of operating payables, such as notes and accounts payable-trade, accounts payable, and income taxes
payable are less than one year. Loans were mainly used to procure the funds needed for mergers and acquisitions.
Although operating payables and borrowings are exposed to liquidity risk, this risk is managed through methods such as
preparing cash flow planning on a monthly basis.
Derivatives transactions are undertaken by the Finance Department after authorization by the Board of Directors or the
General Manager of the Finance Department, depending on the importance of the transaction, and details areappropriately reported to the Board of Directors.

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2. Market values of financial instruments
Carrying amount, market value and unrealized gain/loss of the financial instruments as of February 29, 2012 are as follows:
Financial instruments whose market values are not readily determinable are excluded from the following table (See(Note 2)):
(Millions of yen)
Carrying amount Market value(Thousands of U.S. dollars)
Unrealized gain
Carrying amount Market value(loss)

Unrealized gain
(loss)(1) Cash and deposits

27,78927,789—344,435

344,435—(2) Notes and accounts receivable-trade33,63533,635—416,894

416,894—

25,862

25,862—

320,550

320,550—(3) Short-term investment securities andinvestment securities
Available-for-sale securities

1,382

612

(769)

17,1297,586(9,531)(4) Long-term deposits

3,000

2,986

(13)

37,18437,010(161)

Total assets

91,66990,885(783)

1,136,205

1,126,487(9,705)(1) Notes and accounts payable-trade

11,932

11,932—

147,893

147,893—

Stock of affiliated companies(2) Short-term loans payable

1,651

1,651

—

20,464

20,464—(3) Accounts payable

6,177

6,177

—

76,562

76,562—(4) Income taxes payable

3,839

3,839

—

47,58347,583—(5) Long-term loans payable (*)

4,018

4,032

14

49,802

49,975174

Total liabilities

27,62027,634

14342,340

342,514

174

—

—

—

—

—

—

Derivative transactions(*) Includes current portion of long-term loans payable.
Note 1: Calculation method of market values of financial instruments and securities Assets
Assets(1) Cash and deposits and (2) Notes and accounts receivable-trade
These assets are recorded using book values because market values approximate book values because of theirshort-term maturities.
(3) Short-term investment securities and investment securities
Certificates of deposit are recorded using book values because market values approximate book values becauseof their short-term maturities. The market values of stocks are determined using the quoted market price on
applicable stock exchanges.
(4) Long-term deposits
Long-term deposits are stated using the quoted prices obtained from financial institutions.
Liabilities(1) Notes and accounts payable-trade, (2) Short-term loans payable, (3) Accounts payable, and (4) Income taxes
payableThese payables are recorded using book values because market values approximate book values because of theirshort-term maturities.
(5) Long-term loans payable (including current portion of long-term loans payable)
Long-term loans payable with floating interest rates are recorded using book values because market values
approximate book values as these rates reflect market interest rates over the short-term. For long-term loans
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payable with fixed interest rates, market values are determined by discounting the aggregated values of theprincipal and interest using an assumed interest rate based on the interest rate that would be applied to a newloan of a similar nature.
Note 2: Financial instruments whose market values are not readily determinable(Millions of yen)

Category(Thousands of U.S. dollars)
Carrying amountUnlisted equity securities

14,388178,334

These items are not included in “(3) Short-term investment securities and investment securities,” because there is nomarket price, and it is very difficult to identify market values.
Note 3: Redemption schedule of monetary assets and securities with contractual maturities after the balance sheet date(Millions of yen)(Thousands of U.S. dollars)Within one
year

One to five
years

Five to ten
years

Over tenyears

Within one
year

One to five
years

Five to ten
years

Over tenyears

Cash and deposits

27,789———344,435———

Notes and accounts
receivable-trade33,635———416,894

—

—

—

2,000

—

—

—

24,789

—

—

—

—

—

433

282

—

—

5,367

3,495

—

3,000

—

—

—

37,184——63,424

3,000

433

282

786,118

37,184

5,367

3,495

Short-term investment securities
and investment securities:
Available-for-sale securities
with contractual maturities:
Negotiable certificates ofdeposit
Other
Long-term deposits
Total

Note 4: Redemption schedule of long-term loans payable after the balance sheet date(Millions of yen)(Thousands of U.S. dollars)Within one
year

One to five
years

Five to ten
years

Over tenyears

Within one
year

One to five
years

Five to ten
years

Over tenyears

Long-term loans payable

2,793

576

356

292

34,618

7,139

4,412

3,619

Total

2,793

576

356

292

34,618

7,139

4,412

3,619

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SECURITIESFiscal 2011 (March 1, 2010 – February 28, 2011)
1. Available-for-sale securities (February 28, 2011)(Millions of yen)
Fiscal 2011
Category

Carrying amount

Acquisition cost

Difference(1) Stocks

5,795

4,299

1,496

(2) Bonds———(3) Other———

Subtotal

5,795

4,299

1,496

(1) Stocks

11,77914,445(2,665)(2) Bonds———

Carrying amount higher than acquisition cost

Carrying amount lower than acquisition cost(3) Other

5,380

5,380

—

Subtotal

17,16019,825(2,665)

Total

22,95624,124(1,168)2. Available-for-sale securities sold during fiscal 2011 (March 1, 2010 – February 28, 2011)(Millions of yen)
Fiscal 2011
Category

Sale value

Profit from sale

Loss from sale(1) Stocks

189

39

—

(2) Bonds———(3) Other

—

—

—

Total

189

39

—

3. Impairment loss on securities (March 1, 2010 – February 28, 2011)
In FY2/11, the Group recognized an impairment loss of ¥138 million on stocks under available-for-sale securities.
Note that when the market value at the end of FY2/11 declines more than approximately 30% of its acquisition cost, themarket value is considered to have diminished sharply. An impairment loss is recognized when the market value declines
more than 50% of its acquisition cost, as it is not considered possible for market value to be recovered. When the market
value declines between 30% and 50% of the acquisition cost, the amount considered to be necessary, taking into accountthe recoverability in light of the market value and the financial position of the issuer of the security, is recognized as an
impairment loss.

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SECURITIESFiscal 2012 (March 1, 2011 – February 29, 2012)
1. Available-for-sale securities (February 29, 2012)(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2012
Category

Carrying amount Acquisition cost

Fiscal 2012
Difference

Carrying amount Acquisition cost

Difference

Carrying amount higher than acquisition cost(1) Stocks

7,833

6,414

1,419

97,08779,49917,588(2) Bonds

—

—

—

—

—

—

(3) Other

—

—

—

—

—

—

Subtotal

7,833

6,414

1,419

97,08779,49917,588(1) Stocks

10,22911,615(1,386)

126,785

143,964(17,179)(2) Bonds

—

—

—

—

—

—

Carrying amount lower than acquisition cost(3) Other

7,083

7,083

—

87,79187,791—

Subtotal

17,312

18,699(1,386)

214,576

231,767(17,179)

Total

25,145

25,11332

311,663311,267397

2. Available-for-sale securities sold during fiscal 2012 (March 1, 2011 – February 29, 2012)(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2012

Fiscal 2012

Category

Sale value(1) Stocks

234

34

—

2,900

421

—

(2) Bonds

—

—

—

—

—

—

(3) Other

—

—

—

—

—

—

Total

234

34

—

2,900

421

—

Profit from sale Loss from sale

Sale value

Profit from sale Loss from sale

3. Impairment loss on securities (March 1, 2011 – February 29, 2012)
In FY2/12, the Group recognized an impairment loss of ¥1,940 million on securities.
Note that when the market value at the end of FY2/12 declines more than approximately 30% of its acquisition cost, themarket value is considered to have diminished sharply. An impairment loss is recognized when the market value declines
more than 50% of its acquisition cost, as it is not considered possible for market value to be recovered. When the market
value declines between 30% and 50% of the acquisition cost, the amount considered to be necessary, taking into accountthe recoverability in light of the market value and the financial position of the issuer of the security, is recognized as an
impairment loss.

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DERIVATIVE TRANSACTIONSFiscal 2011 (March 1, 2010 – February 28, 2011)
1. Derivative transactions to which hedge accounting is not applied
Not applicable.
2. Derivative transactions to which hedge accounting is applied
Not applicable.

DERIVATIVE TRANSACTIONSFiscal 2012 (March 1, 2011 – February 29, 2012)
1. Derivative transactions to which hedge accounting is not applied
Not applicable.
2. Derivative transactions to which hedge accounting is applied
Not applicable.

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RETIREMENT BENEFITS
1. Overview of retirement benefit plans
Corporate pension plan:
The Company previously used the Hisamitsu Pharmaceutical Welfare Pension Plan to cover a portion of retirement benefits
starting on July 1, 1995, but it switched to the Hisamitsu Pharmaceutical Corporate Pension Plan on July 1, 2005.
The Company previously used a qualified pension plan to augment its retirement benefit plans from March 1, 1966, but
this plan was terminated on April 1, 2007 and integrated into the corporate pension plan.
Lump sum retirement allowance:
The Company and domestic consolidated subsidiaries provide lump sum retirement allowances based on retirement
benefit regulations. In some cases, employees may receive an additional retirement allowance upon retirement.
2. Retirement benefit obligations(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

(11,369)(11,604)(143,827)(2) Pension assets

9,239

9,024

111,849(3) Subtotal (1) + (2)(2,129)(2,580)(31,978)(4) Unrecognized actuarial differences

1,800

1,648

20,426(5) Total (3) + (4)

(329)

(931)

(11,539)(6) Prepaid pension costs(4,581)(3,995)(49,517)(7) Provision for retirement benefits (5) + (6)(4,910)(4,927)(61,068)(1) Retirement benefit obligations

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3. Retirement benefit costs(Millions of yen)
Fiscal 2011

(Thousands of U.S. dollars)

Fiscal 2012

Fiscal 2012

(1) Service costs

521

548

6,792

(2) Interest costs

216

223

2,764

(3) Expected return on plan assets

(252)

(267)

(3,309)(4) Amortization of actuarial differences

394

728

9,023

(5) Retirement benefit expenses

880

1,232

15,270Notes: 1. Excludes employee contributions to the corporate pension plan.
2. Retirement benefit expenses at consolidated subsidiaries using the simplified method are recorded under “(1)Service costs.”

4. Basis for calculating retirement benefit obligations(1) Allocation of expected retirement benefits(2) Discount rate(3) Expected return on plan assets

Straight-line method
2.00%
2.90%

(4) Amortization period of prior service costs
Two years (amortized in equal amounts for a fixed number of years that is less than the average remaining years ofservice of employees when incurred)(5) Amortization period of actuarial differences
Five years (amortized starting in the next consolidated fiscal year in equal amounts for a fixed number of years that isless than the average remaining years of service of employees when incurred.)

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TAX EFFECT ACCOUNTING
1. Main reasons for deferred tax assets and deferred tax liabilities.
(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

1,960

1,724

21,368Provision for directors’ retirement benefits

485

434

5,379

Accrued enterprise tax

712

344

4,264

Allowance for doubtful accounts

158

236

2,925

Valuation difference on available-for-sale securities

597

—

—

Inventories

252

181

2,243

Deferred tax assets
Provision for retirement benefits

Excess depreciation

797

645

7,995

Intangible fixed assets

3,138

2,886

35,771

Valuation losses on memberships

322

265

3,285

Loss on valuation of investment securities

555

946

11,725

Provision for bonuses

384

373

4,623

1,760

1,376

17,055937

1,551

19,224

12,062

10,966135,920(850)(2,202)(27,293)

11,212

8,764

108,627

Stock and investments in affiliated companies(3,135)(2,580)(31,978)

Prepaid pension costs(1,852)(1,413)(17,514)(739)(1,966)(24,368)(5,727)(5,960)(73,872)

5,485

2,803

34,742

Outsourced research and development
Other
Sub-total deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities

Other
Total deferred tax liabilities
Net deferred tax assets

Note: The net value of deferred tax assets are included in the following consolidated balance sheet categories:(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

Current assets – deferred tax assets

3,620

2,896

35,895

Noncurrent assets – deferred tax assets

3,833

1,402

17,377

Noncurrent liabilities – deferred tax liabilities(1,968)(1,495)(18,530)HISAMITSU PHARMACEUTICAL CO., INC

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2. Main reasons for difference in statutory tax rate and income tax rate after application of tax effect accounting
Fiscal 2011

Fiscal 2012

40.4%

40.4%

Non-deductible expenses, such as entertainment expenses

1.2%

1.3%

Non-taxable income, such as dividend income(0.2)%(0.3)%

Special tax exemption for experimental research and development(2.4)%(3.8)%

Amortization of goodwill

2.1%

—

Valuation allowance

—

4.2%

Other

0.4%

0.7%

41.5%

42.5%

Statutory tax rate
(Adjustments)

Income tax rate after application of tax effect accounting

3. Adjustment to the amount of deferred tax assets and deferred tax liabilities, due to changes in income tax rate
Income tax rate has been changed effective from the fiscal year commencing on or after April 1, 2012, as a result of thepromulgation on December 2, 2011, of “Law for Partial Amendment of the Income Tax Law, etc. for the Purpose of Creatinga Taxation System Responding to Changes in Economic and Social Structures” (Law No. 114; 2011) and “Law on Special
Measures for Securing Financial Resources Necessary to Implement Measures for Reconstruction following the Great East
Japan Earthquake” (Law No. 117; 2011).
Following the above change, statutory tax rates used in the calculation of deferred tax assets and deferred tax liabilities
are as follows, subject to the timing of the reversal of the temporary difference involved.
To February 28, 2013
From March 1, 2013 to February 29, 2016
After March 1, 201640.43%
37.75%
35.38%As a result of the above changes in tax rate, net amount of deferred tax assets decreased by ¥144 million, while income
taxes-deferred recorded as expenses in FY 2/12, increased by ¥214 million

INVESTMENT AND RENTAL PROPERTY
Fiscal 2011 (March 1, 2010 – February 28, 2011)
Because the total amount of investment and rental property is not material, this item is not stated.
Additional information
The Company adopted “Accounting Standard for Disclosures about Fair Value of Investment and Rental Property” (ASBJ
Statement No. 20; November 28, 2008) and “Guidance on Accounting Standard for Disclosures about Fair Value ofInvestment and Rental Property” (ASBJ Guidance No. 23; November 28, 2008) from FY2/11.

INVESTMENT AND RENTAL PROPERTY
Fiscal 2012 (March 1, 2011 – February 29, 2012)
Because the total amount of investment and rental property is not material, this item is not stated.
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SEGMENT INFORMATIONBusiness segment information
Fiscal 2011 (March 1, 2010 – February 28, 2011)
The Company and its consolidated subsidiaries, in consideration of the types of products sold and their qualitative
similarities, operate the three business segments of “pharmaceuticals and related products,” “cable television broadcasting,”and “other businesses.” Segment information is omitted because “pharmaceuticals and related products” account for morethan 90% of the total sales, operating income, and assets of all business segments.
Geographic segment information
Fiscal 2011 (March 1, 2010 – February 28, 2011)(Millions of yen)Japan

North America

Other

Total

Eliminations

Consolidated

Net sales and operating income (loss)
Net sales
Sales to third parties
Intra-sales and transfer

122,042

10,847

4,294

137,184—

137,184

1,761

173

288

2,224

(2,224)—

123,804

11,021

4,582

139,408(2,224)

137,184

Operating expenses

91,333

15,4994,441

111,273(2,283)

108,990

Operating Income (loss)

32,470(4,477)

141

28,13459

28,193

194,43142,9194,607

241,958(47,171)

194,787

Total Sales

Assets

Notes: 1. Segmentation by country or territory is based on geographical proximity.
2. Significant countries or territories classified in other segments than Japan(1) North America ..........America(2) Other ........................Brazil, Vietnam, Indonesia, and others

Overseas sales
Fiscal 2011 (March 1, 2010 – February 28, 2011)(Millions of yen)
North America
Overseas sales

Other

Total

9,979

7,693

17,672

Consolidated net sales——

137,184

Ratio of overseas sales to consolidated net sales (%)

7.3

5.6

12.9

Notes: 1. Segmentation by country or territory is based on geographical proximity.
2. Significant countries or territories in each segment(1) North America ..........America(2) Other ........................Brazil, Vietnam, Indonesia, and others
3. Overseas sales consist of sales conducted by the Company and its subsidiaries in countries or regions outside
Japan.

HISAMITSU PHARMACEUTICAL CO., INC

53

FINANCIAL REPORT 2012

Financial Section

SEGMENT INFORMATION
1. Outline of reportable segments
The Company engages in business activities primarily research and development, manufacturing, purchase, and sales ofpharmaceuticals, where “Pharmaceuticals” is the concerned reportable segment.
“Pharmaceuticals” is conducting business related to ethical and OTC pharmaceuticals both in Japan and overseas.
2. Method to calculate the amount of net sales, profit or loss, assets, liabilities and other items by reportablesegment
Because the reportable segment of the Company is “Pharmaceuticals” only, this item is not stated.
3. Information regarding the amounts of net sales, profit or loss, assets, liabilities and other items by reportablesegment
Because the reportable segment of the Company is “Pharmaceuticals” only, this item is not stated.
4. Difference between the aggregate of all reportable segments and the consolidated financial statements amount,and the details of such difference (items concerning the adjustment of difference)
Because the reportable segment of the Company is “Pharmaceuticals” only, this item is not stated.
Additional information
The Company adopted the “Accounting Standard for Disclosures about Segments of an Enterprise and Related information”(ASBJ Statement No. 17; March 27, 2009) and the “Guidance on the Accounting Standard for Disclosures about Segmentsof an Enterprise and Related information” (ASBJ Guidance No. 20; March 21, 2008) from FY2/12.

RELATED INFORMATION
Fiscal 2012 (March 1, 2011 – February 29, 2012)
1. Information by product/service segment
This information is omitted, as net sales to external customers in single product/service segment accounts for more than
90% of net sales in the consolidated statements of income.
2. Information by geographic segment(1) Net sales(Millions of yen)Japan

North America

Other

Total

116,644

12,541

8,608

137,794

Japan

North America

Other

Total

1,445,761

155,441

106,693

1,707,908(Thousands of U.S. dollars)

HISAMITSU PHARMACEUTICAL CO., INC

54

FINANCIAL REPORT 2012

Financial Section(2) Tangible fixed assets(Millions of yen)Japan

North America

Other

Total

37,029

4,495

1,832

43,357(Thousands of U.S. dollars)
Japan

North America

Other

Total

458,961

55,71422,707537,395

3. Information by significant customer(Millions of yen)
Name of customers

Net sales

Related segment

Medipal Holdings Corporation

25,066

Pharmaceuticals

Alfresa Holdings Corporation

24,531

Pharmaceuticals(Thousands of U.S. dollars)Name of customers

Net sales

Related segment

Medipal Holdings Corporation

310,684

Pharmaceuticals

Alfresa Holdings Corporation

304,053

Pharmaceuticals

Information on the impairment loss of noncurrent assets by reportable segment
Fiscal 2012 (March 1, 2011 – February 29, 2012)
Because the reportable segment of the Company is “pharmaceuticals” only, this item is not stated.
Information on the amortization of goodwill and unamortized balance by reportable segment
Fiscal 2012 (March 1, 2011 – February 29, 2012)
Because the reportable segment of the Company is “pharmaceuticals” only, this item is not stated.
Information on the gain on negative goodwill by reportable segment
Fiscal 2012 (March 1, 2011 – February 29, 2012)
Because the reportable segment of the Company is “pharmaceuticals” only, this item is not stated.

HISAMITSU PHARMACEUTICAL CO., INC

55

FINANCIAL REPORT 2012

Financial Section

RELATED PARTY INFORMATION
Fiscal 2011 (March 1, 2010 – February 28, 2011)
1. Transactions with related parties
Not applicable.
2. Notes to parent entities or significant affiliated companies
Not applicable.

RELATED PARTY INFORMATION
Fiscal 2012 (March 1, 2011 – February 29, 2012)
1. Transactions with related parties
Not applicable.
2. Notes on parent entities or significant affiliated companies
Summarized financial statements of significant affiliated companies
For FY2/12, the significant affiliated company is Novogyne Pharmaceuticals and its summarized financial statement is
as follows.
(Millions of yen)(Thousands of U.S. dollars)

5,363

66,472

Total noncurrent assets

523

6,482

Total current liabilities

1,854

22,980Total net assets

4,031

49,963

Net sales

20,262

251,140

Income before income taxes

13,852

171,691

Total current assets

HISAMITSU PHARMACEUTICAL CO., INC

56

FINANCIAL REPORT 2012

Financial Section

PER SHARE INFORMATION(Yen)(U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

Net assets per share

1,618.69

1,730.22

21.45

Net income per share

241.80215.092.67

Diluted net income per share is not listed due to the absence of residual securities.

Note: Basis of calculation

1. Net assets per share(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

Total net assets in the consolidated balance sheets

141,222

149,263

1,850,062

Net assets attributable to common shareholders

140,291

148,226

1,837,209

930

1,036

12,841

Common stock issued (Thousands of shares)

95,164

95,164—

Common stock held in treasury (Thousands of shares)

8,494

9,495

—

Common stock used in calculating net assets per share (Thousands of shares)

86,67085,669—Main differences
Minority interests

2. Net income per share(Millions of yen)(Thousands of U.S. dollars)

Fiscal 2011

Fiscal 2012

Fiscal 2012

20,956

18,439228,545

Amount not attributable to common shareholders

—

—

—

Net income attributable to common shareholders

20,956

18,439228,545

Average common stock during year (Thousands of shares)

86,67085,726—

Net income

SIGNIFICANT SUBSEQUENT EVENTSFiscal 2012 (March 1, 2011 – February 29, 2012)
Not applicable.

HISAMITSU PHARMACEUTICAL CO., INC

57

FINANCIAL REPORT 2012

Financial Section

Supplementary Schedule
Supplementary schedule of bonds payableNot applicable.
Supplementary schedule of loans payable(Thousands of
U.S. dollars)(Millions of yen)(%)

Balance as ofFebruary 28, 2011

Balance as ofFebruary 29, 2012

Balance as ofFebruary 29, 2012

Average interest rate

Due date

770

1,651

9,424

0.82

—

Current position of long-termloans due within one year

5,285

2,793

64,6800.83—

Current position of long-termlease obligation due within
one year

103

111

1,261

—

—

Long-term loans(excluding current portion)

3,089

1,224

37,804

1.05

March 1, 2013 toMarch 31, 2026

Lease obligation(excluding current portion)

375

304

4,589

—

March 1, 2013 toJanuary 31, 2019

Other liabilities

—

—

—

—

—

9,624

6,085

117,782——

Category
Short-term loans

Total

Notes: 1. Average interest rate is the weighted average interest rate for the year-end balances of loans, etc.
2. Repayments of long-term loans due within one year, include ¥111 million in interest free loans from theDevelopment Bank of Japan Inc.
3. The average interest rate on lease obligations is not listed, mainly because lease obligations are stated in the
consolidated balance sheet mainly as a total before deduction of the equivalent of interest contained in the totallease payment.
4. Repayments of long-term loans (excluding those due within one year), include ¥230 million in interest free loans
from the Development Bank of Japan Inc.
5. Yearly repayments of long-term loans and lease obligations (both excluding those due within one year) within five
years after the consolidated balance sheet date are as follows:(Millions of yen)
Due after one year
but within two years

Due after two years
but within three years

Due after three years
but within four years

Long-term loans

235

153

108

78

Lease obligations

112

94

82

11

Category

Due after four years
but within five years(Thousands of U.S. dollars)
Due after one year
but within two years

Due after two years
but within three years

Due after three years
but within four years

Due after four years
but within five years

Long-term loans

2,913

1,896

1,339

967

Lease obligations

1,388

1,165

1,016

136

Category

HISAMITSU PHARMACEUTICAL CO., INC

58

FINANCIAL REPORT 2012

Financial Section

Supplementary schedule of asset retirement obligations
Not applicable.
Other
Consolidated sales and income by quarter, Fiscal 2012
(Millions of yen)First quarter(March 1 – May 31, 2011)

Second quarter(June 1 – August 31, 2011)

Net sales

33,03936,12034,612

34,020

Income before income taxes

5,189

7,415

12,545

7,229

Net income

2,758

4,329

7,581

3,769

Net income per share (yen)

32.11

50.54

88.49

44.00

Third quarter
Fourth quarter(September 1 – November 30, 2011) (December 1 – February 29, 2012)

Consolidated sales and income by quarter, Fiscal 2012
(Thousands of U.S. dollars)First quarter(March 1 – May 31, 2011)

Second quarter(June 1 – August 31, 2011)

Net sales

409,507447,695

429,003421,666

Income before income taxes

64,31691,906

155,491

89,601

Net income

34,18453,656

93,96446,715

0.40

0.63

1.10

0.55

Net income per share (U.S. dollars)

HISAMITSU PHARMACEUTICAL CO., INC

59

Third quarter
Fourth quarter(September 1 – November 30, 2011) (December 1 – February 29, 2012)

FINANCIAL REPORT 2012

Corporate Information

Stock Information(1) Total number of shares
1) Total number of shares
Type of shares

Total authorized shares

Common stock

380,000,000

Total

380,000,000

2) Shares issued
Type of shares

Shares issued
at endFiscal 2012
(February 29, 2012)

Shares issued
on filing date
(May 25, 2012)

Names of listing stock
exchanges or registeredsecurities dealers
associations

Details

All voting shares, standard
shares with unlimited rights(Voting units: 100 shares)—

Common stock

95,164,895

95,164,895

Tokyo Stock Exchange(First Section)
Nagoya Stock Exchange(First Section)
Fukuoka Stock Exchange

Total

95,164,895

95,164,895—(2) Status of share subscription rights to shares
Not applicable.
(3) Execution of warrant bonds, etc. with clause allowing change in exercise priceNot applicable.
(4) Details of rights plans
Not applicable.

HISAMITSU PHARMACEUTICAL CO., INC

60

FINANCIAL REPORT 2012

Corporate Information(5) Changes in shares issued, common stock, and other items(Shares)
Date

Change in sharesissuedJuly 5, 2002 (Note)—(Millions of yen)

Shares issued

Change in capitalstock

Capital stock

Change in additional
paid-in capital

Additional paid-in
capital95,164,895

—

8,473

(6,123)

2,118(Shares)(Thousands of U.S. dollars)

Date

Change in sharesissuedShares issued

Change in common
stock

Capital stock

Change in additional
paid-in capital

Additional paid-in
capitalJuly 5, 2002 (Note)—

95,164,895—

105,020(75,892)

26,252

Note: The decrease in additional paid-in capital was based on provisions in Article 289-2 of the former Commercial Code(creditor protection procedures were completed on July 5, 2002).

(6) Details of shareholders
As of February 29, 2012
Status of shares (investment unit comprises 100 shares)
Category

National
and local
government

Financial
institutions

Securities
companies

Other
corporations

Foreign shareholders
Nonindividuals

Individuals

Individuals
and other

Total

Shares under
one unit(shares)

Shareholders(entities)

1

51

23

180

263

5

4,932

5,455

—

Shares owned(units)100457,986

3,199

167,856

124,896319

196,822

951,178

47,095

Ratio (%)

0.01

48.15

0.34

17.65

13.13

0.03

20.69

100.00—Note: Treasury stock of 9,469,205 are listed as 94,692 units in the individuals and other column and as 5 shares in theshares under one unit column. The 9,469,205 treasury share figure is the number of shares listed in the shareholder
registry.

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FINANCIAL REPORT 2012

Corporate Information(7) Principal shareholders
As of February 29, 2012
Name

Address

Percentage ofShares owned
shares outstanding(thousand shares)(%)

Japan Trustee Service Bank, Ltd. (trust account)

1-8-11 Harumi, Chuo-ku, Tokyo

5,886

6.19

Nippon Life Insurance Company

1-6-6 Marunouchi, Chiyoda-ku, Tokyo

4,887

5.14

The Master Trust Bank of Japan, Ltd.
(trust account)

2-11-3 Hamamatsucho, Minato-ku, Tokyo

4,555

4.79

The Nomura Trust and Banking Co., Ltd.
(The Bank of Tokyo-Mitsubishi UFJ, Ltd.
pension trust account)

2-2-2 Otemachi, Chiyoda-ku, Tokyo

4,387

4.61

Japan Trustee Service Bank, Ltd.
(Resona Bank, Ltd. retrust account, The NishiNippon City Bank, Ltd. pension trust account)

1-8-11 Harumi, Chuo-ku, Tokyo

4,370

4.59

Fukuoka Bank

2-13-1 Tenjin, Chuo-ku, Fukuoka

3,871

4.07

The Bank of Saga, Ltd.

2-7-20 Tojin, Saga

3,356

3.53

Japan Trustee Service Bank, Ltd.
(The Sumitomo Trust & Banking Co., Ltd. retrust
account, Sumitomo Mitsui Banking Corporation
pension trust account)

1-8-11 Harumi, Chuo-ku, Tokyo

2,064

2.17

Japan Trustee Service Bank, Ltd.
(The Sumitomo Trust & Banking Co., Ltd.
retrust account ; Resona Bank,
Limited pension trust account)

1-8-11 Harumi, Chuo-ku, Tokyo

2,000

2.10

BBH for Matthews Asian Growth andIncome Fund
(Standing proxy: The Bank ofTokyo-Mitsubishi UFJ, Ltd.)

Four Embarcadero Center Suite 550
San Francisco, CA 94111 U.S.A.
(2-7-1 Marunouchi, Chiyoda-ku, Tokyo)

1,983

2.08

37,362

39.26

Total

Notes: 1. The number of the foregoing shares related to fiduciary services is as follows.
Japan Trustee Service Bank, Ltd.: 14,320 thousand shares
The Master Trust Bank of Japan, Ltd.: 4,555 thousand shares
The Nomura Trust and Banking Co., Ltd.: 4,387 thousand shares
2. In addition to the shares listed above, the company owns treasury stock of 9,469 thousand shares (9.95%).

HISAMITSU PHARMACEUTICAL CO., INC

62

FINANCIAL REPORT 2012

Corporate Information(8) Information on transfer of the Company’s stock
Stock exchange listings

First sections of the Tokyo Stock Exchange, and Nagoya Stock Exchange,
and the Fukuoka Stock Exchange (stock code: 4530)

Stock registrar

Mitsubishi UFJ Trust and Banking Corporation
1-4-5 Marunouchi, Chiyoda-ku, Tokyo

Annual general meeting ofMay each year

shareholders
Ex dividend date

End of February (August 31 for interim dividend)

Record date

Record date for the annual general meeting of shareholders is the end of February.
Report in advance if otherwise needed.

Newspaper for public

Nihon Keizai Shimbun

announcements
Stock related inquiries

Stock Section, General Affairs Department, Kyushu Head Office
408 Tashiro Daikan-machi, Tosu-shi Saga
Tel: +81 942-83-2101 Fax: +81 942-83-6119
Website: http://www.hisamitsu.co.jp

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FINANCIAL REPORT 2012

Corporate Information

Group Companies
Our corporate group comprises Hisamitsu Pharmaceutical, 17 consolidated subsidiaries, two non-consolidated subsidiaries, and three equity-method affiliates.
Relationship
Name

Location

Capital orinvestment

Main businessactivities

Votingrights(%)

Concurrent employees

CapitalHisamitsu Hisamitsu support from Business transactions
officers employees Hisamitsu(Persons) (Persons)

Other

Remarks

Consolidated subsidiaries
CRCC Media Co., Ltd.

Kurume,Fukuoka¥1,115 million Other businesses

69.50

1

4

Debt
guarantees——

Saga City-Vision Co.,Ltd.

Saga, Saga

¥605 million Other businesses

70.12

—

3

Debt
guarantees——

Taiyo Co., Ltd.

Tosu, Saga

¥50 million Other businesses

100

1

3

—

Agent for casualty
insurance contracts
for Hisamitsu

Hisamitsu
leases land

Kyudo Co., Ltd.

Tosu, Saga

¥10 million Other businesses

100

1

2

—

Provide laboratory
animals and equipment to Hisamitsu

Hisamitsu
leases land
& buildings

Hisamitsu Agency Co.,
Ltd.

Kurume,Fukuoka¥25 million Other businesses

100
(100)

—

3

—

Provide advertising
agency services to
Hisamitsu

Hisamitsu
leases partof a leasebuilding

Hisamitsu U.S., Inc.

Delaware
USA

USD
Pharmaceuticals
10

100

1

—

—

—

—

Hisamitsu America, Inc.

California,
USA

USD
Pharmaceuticals
3,000,000

100
(100)

1

1

Selling productsWorking—
capital loans supplied by Hisamitsu

USD
Pharmaceuticals
10

100
(100)

2

—

—

Hisamitsu outsources—
development

Note 3Note 3Noven Pharmaceuticals, Florida,
Inc.
USA
Hisamitsu Farmaceutica
do Brasil Ltda.

Manaus,BrazilBRL
Pharmaceuticals
15 million

100

—

3

Manufacture and sell
products in Brazil,
Working—with products andcapital loans
some raw materials
supplied by Hisamitsu

Hisamitsu UK Ltd.

London, UK

GPB
Pharmaceuticals
120,000

100

—

2

—

Hisamitsu outsources—
development
Manufacture and sell
products in Vietnam,with some raw—
materials supplied by
Hisamitsu

Hisamitsu Vietnam
Bien Hoa,
Pharmaceutical Co., Ltd. Vietnam

VND
Pharmaceuticals
258,775 million

100

—

2

Debt
guarantees

Hisamitsu
Pharmaceutical
Technology Consulting(Beijing) Co., Ltd.

CNY
Pharmaceuticals
1,846 thousand

100

1

3

—

Hisamitsu outsources—
medical marketing

Beijing,
China

PT. Hisamitsu PharmaIndonesia

Surabaya,Indonesia

4 other companies—

IDR
Pharmaceuticals
32,518 million

75

—

3

—

Manufacture andsell products inIndonesia, with—products and some
raw materials
supplied by Hisamitsu

— —

—

—

—

—

—

HISAMITSU PHARMACEUTICAL CO., INC

64

Note 3Note 3Note 3—

FINANCIAL REPORT 2012

Corporate Information

Relationship
Name

Location

Capital orinvestment

Main businessactivities

Votingrights(%)

Concurrent employees

CapitalHisamitsu Hisamitsu support from Business transactions
officers employees Hisamitsu(Persons) (Persons)

Other

Remarks

Equity-method affiliates
Yutoku PharmaceuticalInd. Co., Ltd.

Kashima,Saga¥120 million Pharmaceuticals

15.0

—

—

—

Maruto Sangyo Co., Ltd.

Ogori,
Fukuoka¥1,807 million Other businesses

39.76

1

2

—

Novogyne
Pharmaceuticals

Delaware,
USA

USD
Pharmaceuticals
32 million

49.0(49.0)———

Manufacture and sell
products with some—products supplied by
Hisamitsu, supply someproducts of Hisamitsu
Supplies raw
materials to—
Hisamitsu——

Note 4—

Notes: 1. Main business activities column lists names of business segments.
2. There are no companies in accounting insolvency that would significantly affect the consolidated financial statements.
3. Specified subsidiary.
4. Listed and files financial statements.
5. Figures in parenthesis in the voting rights column indicate indirect ownership.
6. Key earnings information for the foregoing consolidated subsidiaries is not listed because sales at these companies account for less than 10% of consolidated sales (excluding internal sales between consolidated subsidiaries).

Management
President & CEO

NAKATOMI, Hirotaka

Standing Corporate Auditor

NAKATOMI, Nobuyuki

Senior Managing Director

YOSHIDA, Tsukasa

Standing Corporate Auditor

UEDA, Masahiro

Senior Managing Director

NAKATOMI, KazuhideStanding Corporate Auditor

HIRANO, MunehikoManaging Director

HADATE, Hidenori

Corporate Auditor

ONO, Keinosuke

Managing Director

YOSHIDA, Minoru

Corporate Auditor

ICHIKAWA, Isao

Managing Director

NODA, TakehikoCorporate Auditor

TOKUNAGA, Tetsuo

Director

AKIYAMA, Tetsuo

Director

SUGIYAMA, Kousuke

Director

KABASHIMA, Mitsumasa

Director

TSURUDA, Toshiaki

Notes: 1. NAKATOMI Nobuyuki, Standing Corporate Auditor, is the younger brother of NAKATOMI Hirotaka, President & CEO.
2. NAKATOMI Kazuhide, Senior Managing Director, is the first son of NAKATOMI Hirotaka, President & CEO.
3. Corporate Auditors ONO Keinosuke, ICHIKAWA Isao, and TOKUNAGA Tetsuo are Outside Corporate Auditors
provided for under Article 2, Paragraph 16, of the Companies Act.

HISAMITSU PHARMACEUTICAL CO., INC

65

FINANCIAL REPORT 2012

Corporate Information

Company Profile
Company name
FoundedHisamitsu Pharmaceutical Co., Inc.
1847

Established
Head office
Representative

May 22, 1944
408 Tashiro Daikan-machi, Tosu, Saga
NAKATOMI, Hirotaka, President & CEO

CapitalFiscal year
Number of employees¥8,473,839,816
March 1 – End of February
Business segment
Pharmaceuticals
Other businesses
Total

Employees (As of February 29, 2012)
2,561 (448)157 (55)
2,718 (503)

Note: Employee figures are for full-time employees. Temporary employees are shown inparentheses; these figures are averages for the fiscal year and are not included in
totals.

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FINANCIAL REPORT 2012

Hisamitsu Pharmaceutical Co., Inc.
408 Tashiro Daikan-machi, Tosu, Saga
841-0017, Japan
Tel: +81 942-83-2101
Fax: +81 942-83-6119
Website: http://www.hisamitsu.co.jp