This summary is a translation of ‘KESSAN TANSHIN’ which is an unaudited report.

Summary of Consolidated Financial Results for FY2012(Year ended March 31, 2013) 〔Japanese GAAP〕
April 17, 2013
Company name:
Stock exchange listings:
Securities code:
Representative:
Inquiries:

SOGO MEDICAL CO., LTD.
Tokyo, 1st Section
4775
URL: http://www.sogo-medical.co.jp/english/(Title) President & Representative Director (Name) Itsuo Tashiro(Title) Managing Director(Name) Kohichi Hashimoto
Tel: +81-92-713-9181
E-mail: ir@sogo-medical.co.jp
Date of general shareholders’ meeting (as planned) : June 21, 2013
Dividend payable date (as planned) : June 24, 2013
Annual securities report filling date (as planned) : June 21, 2013
Supplemental material of annual results is available.
There will be a briefing of annual results for institutional investors and analysts.
(Amounts are rounded down.)

１．Consolidated Financial Results (from April 1, 2012 to March 31, 2013)（１）Consolidated operating results(% indicates year-on-year change.)
Net sales
FY2012FY2011

Operating income

Ordinary income

Net income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

86,65880,222

8.0
10.2

4,324
4,848

(10.8)
16.9

4,343
4,881

(11.0)
15.9

2,532
2,504

1.1
15.6

Notes: Comprehensive income: ¥2,643 million for FY2012 (3.3 %) :¥2,560 million for FY2011 (19.3%)

Net income
per share

Net income toshareholders’equity ratio

Diluted net income
per share
Yen

Operating income
to net sales ratio

%

%

%

－
12.3
－
13.6
References: Investment profit (loss) on equity method: ¥－for FY2012 :¥－for FY2011

7.9
10.2

5.0
6.0

FY2012FY2011

Yen

Ordinary income tototal assets ratio

350.81346.93（２）Consolidated financial positions
Total assets
FY2012FY2011

Net assets

Capital adequacy ratio

Net assets per share

Millions of Yen

Millions of Yen%

Yen

57,13853,16021,636
19,51137.8
36.7

2,993.28
2,702.78

References: Owner’s equity: ¥21,608 million for FY2012 :¥ 19,511 million for FY2011（３）Consolidated cash flows
Cash flows fromoperating activities
FY2012FY2011

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and equivalents,
end of period

Millions of Yen

Millions of Yen

Millions of Yen

Millions of Yen

7,269
4,484

(3,380)(4,086)(2,777)
(170)

5,095
3,984

２．Dividends
Dividend per shareFirst quarter

Second quarter
Yen

FY2011FY2012FY2013(forecast)Third quarter

Yen

－
－
－

35.00
40.00
40.00

FY2011FY2012FY2013(forecast)

Yen

－
－
－

Yen

Yen

35.00
40.00
40.00

70.00
80.00
80.00

Ratio of total amount of dividends
to net assets(Consolidated)

Payout ratio(Consolidated)

Total dividend paid

Total

Fiscal year end

Millions of Yen

%

%

505
577

20.2
22.8
20.2

2.7
2.8

３．Consolidated forecasts for FY2013 (from April 1, 2013 to March 31, 2014)(% indicates year-on-year change.)

Net salesInterim
Full-year

Operating income

Ordinary income

Net income
per share

Net income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

Yen

45,466
100,044

13.7
15.4

1,665
5,055

8.4
16.9

1,653
5,042

5.7
16.1

864
2,853

(8.6)
12.7

119.70395.28

４．Others（１）Material changes in subsidiaries during this period(changes in scope of consolidations resulting from change is subsidiaries): None
（２）Changes in accounting policies and accounting estimates, retrospective restatement① Changes in accounting policies based on revisions of accounting standards: None
② Changes in accounting policies other than ones based on revisions of accounting standard ①: Yes③ Changes in accounting estimates: Yes④ Retrospective restatement: None
Note: Please refer to “3. Consolidated Financial Statements (5) Notes to Consolidated Financial Statements” on page.19 for
Changes in accounting policies（３）Number of issued and outstanding shares (common stock）① Number of issued and outstanding sharesat the end of fiscal year (including treasury stock):
FY2012: 7,670,078 shares② Number of treasury stock at the end of fiscal year:
FY2012: 450,911 shares③ Average number of shares:
FY2012: 7,219,212 shares

FY2011: 7,670,078 shares
FY2011: 450,861 shares
FY2011: 7,219,220 shares

(Reference）Summary of Non-consolidated Financial Results
１．Non-consolidated Financial Results (from April 1, 2012 to March 31, 2013)（１）Non-consolidated operating Results
Net sales
FY2012FY2011

Operating income(% indicates year-on-year change.)

Ordinary income

Net income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

72,60867,759

7.2
8.9

3,250
3,698

(12.1)
12.1

3,624
3,901

(7.1)
9.9

2,370
2,130

11.3
1.4

Diluted net income
per share

Net income per shareYen

FY2012FY2011

328.39295.09Yen－－（２）Non-consolidated financial positions
Total assets
FY2012FY2011

Net assets

Capital adequacy ratio

Net assets per share

Millions of Yen

Millions of Yen%

yen

52,57349,614

19,907
17,97137.9
36.2

2,757.42
2,489.43

References: Owner’s equity: ¥19,906 million for FY2012 :¥ 17,971 million for FY2011※Expression of implementation status of audit proceduresThis summary is exempt from financial audit, to conform with “The Financial Instruments and Exchange Law” of Japan.
The financial audit has not been completed.
※ Notes for using forecasted information and others
These forecasts are based on currently available information. Actual financial results could differ from the forecast due tovarious factors. Please refer to “1. Operating Results (1) Operating Results Analysis” on page.2 for assumptions andcautions on the use of these financial forecasts.

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012

Contents
1. Operating Results............................................................................................................ 2(1) Analysis of Operating Results............................................................................................ 2(2) Analysis of Financial Positions .......................................................................................... 5
2. Management Policies ....................................................................................................... 7
3. Consolidated Financial Statements ................................................................................... 8(1) Consolidated Balance Sheet .............................................................................................. 8(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income . 10
(3) Consolidated Statement of Change in Net Assets .............................................................. 12(4) Consolidated Statement of Cash Flows ............................................................................ 14(5) Notes to Consolidated Financial Statements ..................................................................... 16(Note on the Going-Concern Assumption) ...................................................................... 16(Basic Information of Consolidated Financial Statements) ............................................... 16(Changes in accounting policies) ................................................................................... 19(Consolidated Balance Sheet) ........................................................................................ 19(Consolidated Statement of Income) .............................................................................. 20(Consolidated Statement of Cash Flows) ........................................................................ 21(Segment Information).................................................................................................. 22(Per Share Information) ................................................................................................ 25(Significant Subsequent Events) .................................................................................... 25
4. Other Information..........................................................................................................26(1) The Business Conditions of Products, Orders and Sales..................................................... 26

1

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012

1. Operating Results(1) Analysis of Operating Results①Operating Results for FY2012(in millions, except percentages)
FY2011

Sales¥80,222

Higashinihon

MarginFY2012%¥86,658

MarginChange%Change¥6,4368.0%

28,22331,747

3,523

12.5

Medical practice support

7,621

8,145

523

6.9

Pharmacies

20,601

23,601

3,000

14.6

18,66420,0671,402

7.5

Medical practice support

6,038

6,341

302

5.0

Pharmacies

12,625

13,725

1,099

8.7

32,01033,2491,238

3.9

Medical practice support

6,243

7,184

940

15.1

Pharmacies

25,766

26,065

298

1.2

1,324

1,595

271

20.5

Nishinihon

KyushuOthersOperating Income

4,848

6.0

4,324

5.0

(524)

(10.8)

Higashinihon

1,282

4.5

1,282

4.0

0

0.1

Nishinihon

1,246

6.7

989

4.9

(256)

(20.6)

Kyushu

2,390

7.5

2,256

6.8

(133)

(5.6)

Others

353

26.7

247

15.5

(105)

(30.0)

Reconciliation

(423)

-

(452)

-

(28)

-

Ordinary Income

4,881

6.1

4,343

5.0

(537)

(11.0)Net Income

2,504

3.1

2,532

2.9

28

1.1

FY2012 was the second year of our current three-year medium-term management plan to ‘Grow as
an attractive company through leveraging our D to D systems and creating high-value pharmacies’
which was launched in April 2011. SOGO MEDICAL (hereinafter “the company” in this summary)aims to create the foundation to be the leader in all our business domains by the final year of themedium-term management plan. To achieve that, the company strengthened practice start-up support,
expanded “high-value pharmacies” and promoted projects such as health care malls. Additionally,
the company cultivated human resources and enhanced process management.
The company supported 215 cases of practice start-up for doctors (up 55 cases from one year
earlier), and composite transactions involving leasing and other transactions increased.
The company opened 53 new pharmacies (21 pharmacies in Higashinihon, 20 pharmacies in
Nishinihon, 12 pharmacies in Kyushu). Of these 21 pharmacies were opened by doctors to whom the2

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012

company provided practice start-up support. As a result, there were 417 pharmacies at FY2012 year
end. The company aims to increase the number of SOGO pharmacies to 500 by March 31, 2014.
As a result of aggressive project promotion, the number of pharmacy, health care mall and facility
leasing projects increased compared to FY2011.

Sales in FY2012 were ¥86,658 million, an increase of 8.0% compared to FY2011. The increase wasdue primarily to boosted pharmacy sales through new openings, and M&A activities, and increased
leasing/installment sales through new contracts. Operating income in FY2012 was ¥4,324 million, adecrease of 10.8% compared to FY2011. Ordinary income in FY2012 was ¥4,343 million, adecrease of 11.0%. Net income in FY2012 was ¥2,532 million, an increase of 1.1%. The primaryreasons are a decline in the rental sector as a reaction to the special demand in FY2011
accompanying the shift to all-digital terrestrial broadcasting (hereinafter “reactionary drop after highTV replacement demand”), and revisions of dispensing fees.

Segment financial results were as follows:
From the first quarter, reportable segments were changed from ‘practice start-up support’,‘pharmacies’ and ‘others’ to ‘Higashinihon’, ‘Nishinihon’, and ‘Kyushu’. The company reorganized
our organization by region to develop regional strategies and allow rapid decision-making aboutbusiness operations.

A Higashinihon

Sales in FY2012 were ¥31,747 million, an increase of 12.5% compared to FY2011. Despite thereactionary drop after high TV replacement demand, sales increased due primarily to a big increaseof leasing/installment sales and boosted pharmacy sales through new openings and subsidiaries
which the company acquired in FY2011. Operating income was ¥1,282 million, an increase of 0.1%
compared to FY2011, despite an increase in amortization.

B Nishinihon

Sales in FY2012 were ¥20,067 million, an increase of 7.5% compared to FY2011. The sales
increase was due primarily to increased pharmacy sales, leasing/installment sales, anddesign/construction sales. Operating income was ¥989 million, a decrease of 20.6% compared to
FY2011. The decrease was due primarily to increased salaries and the reactionary drop after high TV
replacement demand.
3

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012

C

KyushuSales in FY2012 were ¥33,249 million, an increase of 3.9% compared to FY2011. The sales
increase was due primarily to increased leasing/installment sales and consulting sales. Operating
income was ¥2,256 million, a decrease of 5.6%. The decrease was due primarily to revised
dispensing fees, although pharmacy sales were increased through new openings.

D Others

Sales in FY2012 were ¥1,595 million, an increase of 20.5%, while operating income was ¥247
million, a decrease of 30.0% compared to FY2011.
②Forecasts for FY2013
The company aims to create the foundation to be the leader in all our business domains in FY2013
as well as in FY2012. The main priority initiatives are to strengthen branch offices (both regional
field expertise and headquarters' role in providing support to offices), to expand the number of‘high-value pharmacies’ (increase the number of openings, acquire prescriptions through DtoD
operations, and enhance quality), to strengthen qualitative and quantitative support for practicestart-up and personal introduction to doctors, and to make process management more thorough.
Additionally, the company has taken on new business supporting regional health care network
infrastructure. In detail, the company is promoting projects such as health care malls, hospitalmanagement contracting, facility leasing, and has launched serviced housing for the elderly which iscoordinated with health care.
Through the activity above, the company forecasts that total sales will be ¥100,044 million, an
increase of 15.4%, operating income will be ¥5,055 million, an increase of 16.9%, ordinary income
will be ¥5,042 million, an increase of 16.1%, and net income will be ¥2,853 million, an increase of
12.7% compared to FY2012.

4

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012(2) Analysis of Financial Positions①Analysis of Assets, Liabilities, and Net Assets(in millions except percentages and ratios)
FY2011FY2012

Change¥53,160¥57,138¥3,977

including Cash and Deposits

4,004

5,115

1,111

Liabilities

33,64835,501

1,853

including Interest-Bearing Debt *1

14,57914,330(249)

Net Assets

19,511

21,636

2,124

Shareholders' Equity Ratio

36.7%

37.8%

1.1%

Net Debt-to-Equity Ratio *2

0.5times

0.4times(0.1)times

Total Assets*1.Interest-Bearing Debts include lease obligations and long-term accounts payable-installment
purchase.
*2. Net Debt-to-Equity Ratio=( Interest-Bearing Debts－Cash and Deposits)÷Shareholders' Equity
As of March 31, 2013, total assets were ¥57,138million, an increase of ¥ 3,977 million compared to
FY2011.Current assets were ¥30,184million, an increase of ¥1,592 million compared to FY2011.
The increase was due primarily to an increase in cash and deposits of ¥1,111 million, and ininventories of ¥1,044 million, and a decrease in notes and accounts receivable-trade of ¥495 million
compared to FY2011.
Non-current assets were ¥26,953 million, an increase of ¥2,385 million compared to FY2011.
The increase was due primarily to an increase in buildings and structures of ¥1,805 million
compared to FY2011 due to the acquisition of Sun Villa Co., Ltd’s serviced housing for the elderlyon June 15, 2012.
As of March 31, 2013, total liabilities were ¥35,501 million, an increase of ¥1,853milion comparedto FY2011.
Current liabilities were ¥23,437 million, an increase of ¥1,728 million compared to FY2011.
The increase was due primarily to an increase in notes and accounts payable-trade of ¥1,651 million.
Non-current liabilities were ¥12,063 million, an increase of ¥124 million compared to FY2011.
The increase was due primarily to an increase in other liabilities of ¥1,025 million, despite adecrease in long-term loans payable of ¥177 million, and a decrease in long-term accounts
payable-installment of ¥636 million. Interest-bearing debts (including lease obligations andlong-term accounts payable-installment) were ¥14,330 million, a decrease of ¥249 million comparedto FY2011. Net debt-to-equity ratio was 0.4 times, a decrease of 0.1 times compared to FY2011.
As of March 31, 2013, net assets were ¥21,636 million, an increase of ¥2,124 million compared to5

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012

FY2011. Net income increased net assets by ¥2,532 million and dividends payment decreased net
assets by ¥541 million. As a result, capital adequacy ratio was 37.8%, an increase of 1.1% compared
to 36.7% in FY2011.
②Cash Flows
As of March 31, 2013, cash and cash equivalent was ¥5,095 million, an increase of ¥1,111 million(27.9%) compared to FY2011. The primary factors were as follows:(Cash Flows from Operating Activities)
Cash provided by operating activities totaled ¥7,269 million, an increase of 62.1% compared to
FY2011. The major cash increases were ¥4,460 million for net income before income tax, ¥3,267
million for adjusted for non-cash provision of depreciation and amortization. The major cash
decrease was ¥1,807 million for income taxes paid.

(Cash Flows from Investing Activities)
Cash used by investing activities totaled ¥3,380 million, an increase of 17.3% compared to FY2011.
The major cash decreases were ¥3,032 million for acquisition of own-used assets and ¥455 million
for investment in subsidiaries.

(Cash Flows from Financing Activities)
Cash used by financing activities totaled ¥2,777 million, an increase of ¥2,607 million compared to
FY2011. The major cash increase was ¥1,500 million in long-term loans payable. The major cash
decreases were ¥1,755 million for repayment of installments payable, ¥1,376 million for repaymentsof loans payable, ¥593 million for repayment of lease obligations, and ¥541 million for dividends
payments.

6

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012

2. Management Policies(1) Basic Policy
Our long-term vision is to establish a Japanese health care business model. Achieving that goalmeans contributing to building a better society by accomplishing the goals of the current
medium-term management plan. This requires that each employee in the Sogo Medical Group
maintains a sense of pride and mission in executing high-quality work.

(2) Medium-Term Management Plans
SOGO MEDICAL aims to grow as an attractive company providing value-adding DtoD systems
and operating high-value pharmacies(3) Medium-Term Targets
 Consolidated Net Sales: ¥ 100,000 million
 Consolidated Ordinary Income: ¥ 5,000 million(4) Main Priority Initiatives
 Be a leader in the community through our DtoD systems and high-value pharmacy offerings.
 Take on new business involving regional health care network infrastructure.
 Grow with our employees, foster a corporate atmosphere that allows the uninhibited expressionof opinions, and be a company that meets the needs of regional communities.

(5) FY2013 Targets
 Practice startup support: 750 cases (from FY2011 to FY2013)
 Sogo Pharmacies: 500 pharmacies (FY2013)
 Management contracting: 30 cases (FY2013)
 Attractive Company for Applicants: Top 10 in each Regional Areas

7

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012

3. Consolidated Financial Statements(1) Consolidated Balance Sheet(in millions)
FY2011FY2012

AssetsCurrent assets
Cash and deposits

¥

4,004

¥

5,115

Notes and accounts receivable-trade

14,823

14,327

Accounts receivable-installment sales

1,404

1,377

Lease receivables and investment assets
Inventories

2,175
*1

3,928

Deferred tax assets

2,120
*1

4,973

746

687

Other

1,532

1,595

Allowance for doubtful accounts

(23)

(13)

28,59230,184

Property for lease

8,723

7,985

Buildings and structures, net

4,398

6,203

Land

2,650

3,018

Other, net

1,544

1,591

Total current assets
Noncurrent assets
Property, plant and equipment

Total property, plant and equipment*2

17,315*2

18,799Intangible assets
Goodwill
Other
Total intangible assets

2,736

3,279

812

711

3,548

3,990

Investments and other assets
Investment securities

*3

1,321

Deferred tax assets
Other

*3

1,290

664

587

1,717

2,294

Allowance for doubtful accounts

(0)

(8)

Total investments and other assets

3,703

4,163

Total noncurrent assets

24,56826,953

Total assets

53,16057,138

8

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012(in millions)
FY2011FY2012

Liabilities
Current liabilities
Notes and accounts payable-trade¥

Short-term loans payable
Current portion of long-term loans payable

13,414¥

15,065

260

330

1,297

1,679

Lease obligations

547

519

Accrued expenses

1,381

1,541

Income taxes payable

1,156

1,077

157

129

Other

3,493

3,093

Total current liabilities

21,70923,437

3,747

3,570

912

824

6,240

5,604

Other

1,038

2,064

Total noncurrent liabilities

11,93912,063

Total liabilities

33,64835,501

Capital stock

3,513

3,513

Capital surplus

4,136

4,136

Deferred profit on installment sales

Noncurrent liabilities
Long-term loans payable
Lease obligations
Long-term
accounts payable-installment purchase

Net assets
Shareholders' equity

Retained earnings

12,788

14,779Treasury stock(1,043)(1,043)

Total shareholders' equity

19,395

21,386

116

222

116

222

Subscription rights to shares-

1

Minority interests-

26

Total net assets

19,511

21,636

Total liabilities and net assets

53,16057,138

Accumulated other comprehensive income
Valuation difference on
available-for-sale securities
Total accumulated other comprehensive income

9

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)(in millions)

Net sales

FY2011FY2012¥¥80,22286,658

Cost of sales

67,18673,503Gross profit

13,035

13,155

Selling, general and administrative expenses*1

Operating income

8,187

*1

8,831

4,848

4,324

Dividends income

21

15

Dividends income of life insurance

10

12

Rent income

29

30

Other

78

93

140

151

Interest expenses

53

67

Other

53

65

107

132

4,881

4,343

Gain on sales of investment securities-

178

Contributed income-

23

Total extraordinary income-

201

Non-operating income

Total non-operating income
Non-operating expenses

Total non-operating expenses
Ordinary income
Extraordinary income

Extraordinary loss
Impairment loss

*2

20

*2

4

Loss on valuation of investment securities

53

6

Dismantlement expense

44-

Litigation expenses-

39

Office transfer expenses-

35

Total extraordinary loss

118

85

Income before income taxes

4,762

4,460

Income taxes-current

1,949

1,747

Income taxes-deferred

308

175

Total income taxes

2,258

1,922

Income before minority interests

2,504

2,537

-

5

2,504

2,532

Minority interests in income
Net income

10

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012(Consolidated Statement of Comprehensive Income)(in millions)
FY2011
Income before minority interests¥

Other comprehensive income
Valuation difference on
available-for-sale securities
Total other comprehensive income

FY2012
2,504

¥

55
*1

55

2,537

106
*1

106

Comprehensive income

2,560

2,643

Comprehensive income attributable toComprehensive income attributable toowners of the parent

2,560

2,638

Comprehensive income attributable tominority interests

-

5

11

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012(3) Consolidated Statement of Change in Net Assets(in millions)
FY2011FY2012

Shareholders' equity
Capital stock
Balance at the beginning of current period

¥

3,513

¥

3,513

Changes of items during the period
Total changes of items during the period

-

-

3,513

3,513

4,136

4,136

-

-

4,136

4,136

10,753

12,788Dividends from surplus

(469)

(541)

Net income

2,504

2,532

Total changes of items during the period

2,035

1,991

Balance at the end of current period

12,788

14,779(1,043)(1,043)Purchase of treasury stock

(0)

(0)

Total changes of items during the period

(0)

(0)

(1,043)(1,043)17,36019,395

Dividends from surplus

(469)

(541)

Net income

2,504

2,532

(0)

(0)

Total changes of items during the period

2,035

1,991

Balance at the end of current period

19,395

21,386

Balance at the end of current period
Capital surplus
Balance at the beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at the end of current period
Retained earnings
Balance at the beginning of current period
Changes of items during the period

Treasury stock
Balance at the beginning of current period
Changes of items during the period

Balance at the end of current period
Total shareholders' equity
Balance at the beginning of current period
Changes of items during the period

Purchase of treasury stock

12

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012(in millions)
FY2011FY2012

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Balance at the beginning of current period

¥

60

¥

116

Changes of items during the period
Net changes of items other than shareholders' equity

55

106

Total changes of items during the period

55

106

Balance at the end of current period

116

222

-

-

-

1

-

1

-

1

-

-

Net changes of items other than shareholders' equity-

26

Total changes of items during the period-

26

Balance at the end of current period-

26

17,421

19,511Dividends from surplus

(469)

(541)

Net income

2,504

2,532

Purchase of treasury stock

(0)

(0)

Net changes of items other than shareholders' equity

55

133

Total changes of items during the period

2,090

2,124

Balance at the end of current period

19,511

21,636

Subscription rights to shares
Balance at the beginning of current period
Changes of items during the period
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of current period
Minority interests
Balance at the beginning of current period
Changes of items during the period

Net assets
Balance at the beginning of current period
Changes of items during the period

13

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012(4) Consolidated Statement of Cash Flows(in millions)
FY2011FY2012

Net cash provided by (used in) operating activities
Income before income taxes¥

Depreciation and amortization

4,762

¥

4,460

2,821

3,267

Impairment loss

20

4

Increase (decrease) in allowancefor doubtful accounts

3

(40)

Interest and dividends income

(21)

(17)

Capital cost and Interest expenses

131

148

Decrease (increase) in notes andaccounts receivable-trade(3,408)622

Decrease (increase) in
accounts receivable-installment

(268)

(1)

Net decrease (increase) inlease receivables and investment assets

(234)

54

29

(1,003)

856

1,529

1,256

(118)

Other, net

493

302

Subtotal

6,444

9,207

21

17

(130)

(148)

Income taxes paid

(1,850)(1,807)

Net cash provided by (used in) operating activities

4,484

7,269

(1,476)(3,032)-349

Purchase of property for lease

(225)

(74)

Purchase of investment securities

(429)

-

-

341

(1,971)(455)

Payments of loans receivable

-

(191)

Other, net

15

(317)

(4,086)(3,380)Decrease (increase) in inventories
Increase (decrease) in notes andaccounts payable-trade
Increase(decrease) in other assets/liabilities

Interest and dividends income received
Interest expenses paid

Net cash provided by (used in) investing activities
Purchase of own-used assets
Proceeds from sales of own-used assets

Proceeds from sales of investment securities
Purchase of investments in subsidiaries resulting inchange in scope of consolidation

Net cash provided by (used in) investing activities

14

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012(in millions)
FY2011FY2012

Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable

¥

(10)

¥

(12)

Proceeds from long-term loans payable

3,150

1,500

Repayment of long-term loans payable(950)(1,376)

Repayments of lease obligations

(517)

(593)

(1,372)(1,755)

(469)

(541)

(0)

(0)

-

1

Net cash provided by (used in) financing activities(170)(2,777)

Net increase (decrease) in cash and cash equivalents

227

1,111

Cash and cash equivalents at beginning of period

3,756

3,984

Repayments of installment payables
Cash dividends paid
Purchase of treasury stock
Other, net

Cash and cash equivalents at end of period

*1

15

3,984

*1

5,095

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012(5) Notes to Consolidated Financial Statements(Note on the Going-Concern Assumption)
None.

(Basic Information of Consolidated Financial Statements)
1. Scope of Consolidation
Number of Consolidated Subsidiaries: 14 Companies
・Somtech Co., Ltd.
・Sogo Healthcare Service Co., Ltd.
・Sogo Medipro Co.,Ltd.
・Sogo Real Estate Co., Ltd.
・SME Co., Ltd.
・Sogo Medical Pharmacy Chubu Co., Ltd.
・Sogo Medical Pharmacy Kanto Co., Ltd.
・Aoba Pharmacy Co., Ltd.
・Maeda & Co., Ltd.
・Yataya Pharmacy Co., Ltd.
・Sumiredo Pharmacy Co., Ltd.
・Sogo Media Supply Co., Ltd.
・Sogo Care Network Co., Ltd.
・Sun Villa Co., Ltd.
Sun Villa Co., Ltd. (shares acquired on June 15, 2012), Yataya Pharmacy Co., Ltd. (all sharesacquired on November 1, 2012), and Sumiredo Pharmacy Co., Ltd. (all shares acquired on
December 3, 2012) are included in the scope of consolidation in this consolidated fiscal year.
Shinkugenuma Co, Ltd and Hibari Co, Ltd (both of which were consolidated subsidiaries absorbed
into the company on October 1, 2012) are excluded from the scope of consolidation in thisconsolidated financial year.

2. Equity-Method
The company exempts Rising Holdings Co., Ltd. to apply the equity-method. The investor’s
investment income and earnings are insignificant, so there is no material influence on the
consolidated financial statements on the whole.

16

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012

3. Fiscal Periods of Consolidated Subsidiaries
Fiscal periods of consolidated subsidiaries which were different from the fiscal period of the parent
company were as follows:
Maeda & Co., Ltd.

at the end of June

Sumiredo Pharmacy Co., Ltd.

at the end of August

Yataya Pharmacy Co., Ltd.

at the end of October

When the company prepares consolidated financial statements as of the date of March 31, 2013, thecompany uses three companies’ financial statements as of March 31, 2013.

4. Significant Financial Accounting Principles①Assets valuation
A Investment securities
If the quoted market price is available, the company applies a fair-value method. The fair-value wasmeasured at the average market price for March, 2013. Changes in fair value are recognized as othercomprehensive income.
If the quoted market price is not available, the company applies a moving average cost method.
B

Inventories

Inventories are mainly reported using the lower of cost or market price. The costs are calculatedusing the simple average method.
②Depreciation
A Rental Assets
Depreciation is calculated by use of the straight-line method over each rental term of the assets.
B

Leased Assets (Lessee)

Leased Assets are classified as property, plant and equipment and intangible assets. Depreciation is
calculated by use of the straight-line method over each lease term of the assets and no estimatedsalvage value.
C Other Assets
Depreciations for other property, plant and equipment are calculated by use of the declining balancemethod over estimated useful lives of the assets, which range from ten to forty-seven years.
Depreciations for other intangible assets are calculated by use of the straight-line method overestimated useful lives of the assets.

17

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012③Allowance
Allowance for Doubtful Accounts
Allowances are recognized for doubtful accounts. The company estimates the amount of
uncollectable receivables based on historical experiences, credit qualities of our customers and otherfactors that may affect customers’ ability to pay.
④Revenue and Expense Recognition
A Financing Leases (Lessor)
When the company receives a lease payment, the company recognizes the amount of cash received
as revenue and the amount of cash received excluded interest portion as cost of sales.
B

Installment Sales

When the company delivers a good, the company recognizes the full contract amount as accounts
receivable-installment sales. When a due date is arrived, the company reports both the installment
sale and the installment cost. Additionally, the company recognizes an unrealized income
corresponding to accounts receivable-installment sales which the due date is not arrived at year end,
as deferred profit on installment sales.
C

Financial Expenses

The company divides financial expenses into two categories based on the resources. One is thefinancial expense related to operating assets. The other is the financial expense related to other assets.
The former is included in the cost of sales, and the latter is classified as non-operating expense.
⑤Amortization
Goodwill is amortized using the straight-line method over reasonable years within ten years.
⑥Cash and Cash Equivalent
Cash is cash on hand and on demand deposit. Cash equivalent is a financial instrument that is both,
easily convertible into a known amount of cash and original maturity of three months or less fromthe date of purchase. It is so close to maturity that the company has very little risk of change in value,
due to changes in interest rate.
⑦ Others
Consumption and Local Consumption Tax
The company applies the tax excluded accounting method. The consumption tax amount not
subject to tax credit related to property, plant and equipment is classified as an investment and otherassets. The other assets are depreciated using the straight-line method over five years. The otherconsumption tax amount not subject to tax credit is classified as a period expense.
18

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012(Changes in accounting policies)
FY2012 (from April 1, 2012 to March 31, 2013)(Changes in accounting policies which are difficult to distinguish from changes in estimates)
The depreciation method for property, plant and equipment related to pharmacies① Depreciation was previously calculated by use of the declining balance method. The company
changed the depreciation method to the straight-line method for property, plant and equipment
related to newly open pharmacies. When the company changed to the current new pharmacy
opening policies, and considered the future operating circumstances for pharmacies, thestraight-line method was found to be reasonable to ensure appropriate cost allocations.
There was no material influence on profits and loss for FY2012.
② Due to revised corporation tax law, the company changed to the depreciation method requiredby corporation tax law for property, plant and equipment assets purchased after April 1, 2012,
excluding rental assets, lessors’ lease assets, and assets related to new pharmacies.
There was no material influence on profits and loss for FY2012.

(Consolidated Balance Sheet)*1. Inventories(in millions)
FY2011FY2012¥ 3,749¥ 4,762

Merchandise

22

22

Costs on uncompleted construction contracts

9

8

148

179

Medical supplies

Raw materials and supplies*2. Accumulated Depreciation(in millions)

Accumulated depreciation

19

FY2011FY2012¥ 8,824¥ 12,618SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012*3. Investment Securities for Affiliated Companies(in millions)

Investment securities

FY2011FY2012

¥ 429

¥ 429

4. Contingent Liabilities(in millions)
FY2011Kaze-No-Suzuran-Kai, etc (9 people)

FY2012¥ 2,289

Employees (8 people)

9

Total

Kaze-No-Suzuran-Kai, etc (10 people)¥ 2,324

Employees (9 people)

2,298

10
2,334

(Consolidated Statement of Income)*1. Main Selling General and Administrative Expenses(in millions)

Salaries and allowances

FY2011FY2012¥ 3,023¥ 3,104*2. Impairment Losses
FY2011（from April 1, 2011 to March 31,2012）
The company divides assets into groups based on a minimum unit which generates cash flows.
Specifically, the minimum unit for pharmacies is divided based on each pharmacy.
The company reported impairment loss for following groups:
Business

Place

Use

Classification

Amount(in millions)Pharmacies

3 Pharmacies (Chugoku，Shikoku，Pharmacies

Buildings and structures¥ 20

Kyushu)Total

20

If a pharmacy continues to operate at a deficit, and is not expected to go into the black, thecompany reduces the pharmacy’s book value to a collectable amount, and then recognizes
impairment loss as extraordinary loss. Impairment loss for FY2011 was ¥20 million made up as
follows: buildings and structures was ¥10 million, land was ¥8 million and other was ¥1 million.
The collectable amount is measured by a net sales price based on a land price or a fixed assets tax
assessment value. The company considers the materiality of each asset.

20

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012

FY2012（from April 1, 2012 to March 31,2013）
The company divides assets into groups based on a minimum unit which generates cash flows.
Specifically, the minimum unit for pharmacies is divided based on each pharmacy.
The company reported impairment loss for following groups:
Business

Place

Use

Classification

Amount(in millions)Pharmacies

1 Pharmacy (Kyushu)

Pharmacies

Buildings, etc

¥ 4

Total

4

If a pharmacy continues to operate at a deficit, and is not expected to go into the black, thecompany reduces the pharmacy’s book value to a collectable amount, and then recognizes
impairment loss as extraordinary loss. Impairment loss for FY2012 was ¥4 million made up as
follows: buildings, etc were ¥4 million and other was ¥0 million.
The collectable amount is measured by a net sales price based on a land price or a fixed assets tax
assessment value. The company considers the materiality of each asset.

(Consolidated Statement of Cash Flows)*1. Items of Cash and Cash Equivalent(in millions)
FY2011FY2012¥ 4,004¥ 5,115Over three-month time deposit

(20)

(20)

Cash and Cash Equivalent

3,984

5,095

Cash and deposits

2. Significant Non-Cash Transactions
FY2011 (from April 1, 2011 to March 31, 2012)
Assets and liabilities as a result of this fiscal year’s financing lease transactions were ¥433 million,and ¥455 million respectively. Assets and liabilities as a result of this fiscal year’s installment sales
transactions were ¥5,132 million, and ¥5,400 million respectively.

FY2012 (from April 1, 2012 to March 31, 2013)
Assets and liabilities as a result of this fiscal year’s financing lease transactions were ¥464 million,and ¥486 million respectively. Assets and liabilities as a result of this fiscal year’s installment sales
transactions were ¥1,281 million, and ¥1,347 million respectively.

21

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012(Segment Information)
1. Outline of Segment
The company identifies a reportable segment by a component of the company about which
separate financial information is available that is evaluated regularly by a board of directors whomake decisions about how to allocate resources and assess performance.
The company’s reportable segments are now ‘Higashinihon’, ‘Nishinihon’ and ‘Kyushu’ to allow
for development of regional strategies and rapid decision-making about business operations.

Changes in reportable segments
From this consolidated fiscal year, reportable segments were changed from ‘practice start-up
support’, ‘pharmacies’ and ‘others’ to ‘Higashinihon’, ‘Nishinihon’, and ‘Kyushu’. The company
reorganized our organization by region to develop regional strategies and allow rapid
decision-making about business operations.
The company reports segment information at ‘3. Segment Sales, Profit (Loss), and Assets’ using the
new segments.

2. Accounting Method for Segment Sales, Profit (Loss), and Assets
The accounting method for reportable segments was almost the same as the ‘Basic Information ofConsolidated Financial Statements’.
Each segment profit (loss) is calculated based on operating income. Intersegment sales and transfer
pricing are calculated by market prices.
As mentioned at ‘Changes in accounting policies’, depreciation was previously calculated by use of
the declining balance method. The company changed the depreciation method to the straight-line
method for property, plant and equipment related to newly open pharmacies. When the company
changed to the current new pharmacy opening policies, and considered the future operating
circumstances for pharmacies, the straight-line method was found to be reasonable to ensure
appropriate cost allocations.
There was no material influence on profits and loss for FY2012.
As mentioned at ‘changes in accounting policies’, due to revised corporation tax law, the company
changed to the depreciation method required by corporation tax law for property, plant andequipment assets purchased after April 1, 2012, excluding rental assets, lessors’ lease assets, andassets related to new pharmacies.
There was no material influence on profits and loss for FY2012.

22

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012

3. Segment Sales, Profit (Loss), and Assets
FY2011 (from April 1, 2011 to March 31, 2012)(in millions)
Reportable Segments
Higashinihon

Nishinihon

KyushuTotal

Others

Total

Reconciliations*1*2

consolidated
amounts*3

Sales
Unaffiliated sales¥ 28,223¥ 18,664¥ 32,010¥ 78,898¥ 1,324¥ 80,222－¥ 80,222

Intersegment sales

46

16

7

71

512

583

¥ (583)－

Total

28,26918,68132,01878,9691,836

80,806(583)

80,222

Segment profit

1,282

1,246

2,390

4,918

353

5,272

(423)

4,848

Segment assets

16,316

11,795

15,841

43,953

1,584

45,538

7,622

53,160Depreciation

739

844

763

2,348

195

2,543

278

2,821

Amortization of goodwill

206

32

12

252

－

252

－

252

4,017

2,371

2,472

8,861

367

9,229

(438)

8,790

OthersIncrease in assets

Notes:*1. Others includes items such as TV rental for hotels, which are not classified as reportablesegments.
*2. Reconciliations were as follows:(1) Reconciliation for reportable segment loss (¥423 million) included elimination of intersegment
sales (¥11 million) and overall corporate expense (¥(435) million). The

overall corporate

expense was classified as selling general and administrative expenses and was not allocated toreportable segments.
(2) Reconciliation for reportable segment assets (¥7,622 million) included elimination investment
against equity (¥(4,656) million) and overall corporate assets (¥12,801 million). The overall
assets were classified as parent company’s deposits and were not allocated to reportablesegments.
(3) Assets included property, plant and equipment and intangible assets. Reconciliation of increaseof those assets ((¥438) million) was classified as the parent company’s investment in plant andequipment relating to networking.
*3. Reportable segment profits were reconsolidated with the operating income of the consolidated
income statement.

23

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012

FY2012 (from April 1, 2012 to March 31, 2013)(in millions)
Reportable Segments
Higashinihon

Nishinihon

KyushuTotal

OthersTotal*1Reconciliations*2

consolidated
amounts*3

Sales
Unaffiliated sales¥ 31,747¥ 20,067¥ 33,249¥ 85,063¥ 1,595¥ 86,658－¥ 86,658

Intersegment sales

25

11

3

41

810

851

¥ (851)－

Total

31,772

20,07933,253

85,1042,406

87,510(851)

86,658Segment profit

1,282

989

2,256

4,529

247

4,776

(452)

4,324

Segment assets

16,917

11,351

15,05943,3283,278

46,607

10,531

57,138Depreciation

906

861

907

2,675

254

2,930

337

3,267

Amortization of goodwill

348

36

22

406

0

407

－

407

2,213

1,085

1,294

4,594

402

4,996

435

5,431

OthersIncrease in assets

Notes:*1. Others include items such as TV rental for hotels, which are not classified as reportablesegments.
*2. Reconciliations were as follows:(1) Reconciliation for reportable segment loss (¥452 million) included elimination ofintersegment sales (¥6 million) and overall corporate expense (¥(459) million). The
overall corporate expense was classified as selling general and administrative expenses andwas not allocated to reportable segments.
(2) Reconciliation for reportable segment assets (¥10,175 million) included elimination
investment against equity (¥(5,114) million) and overall corporate assets (¥13,627 million).
The overall assets were classified as parent company’s deposits and were not allocated toreportable segments.
(3) Assets included property, plant and equipment and intangible assets. Reconciliation ofincrease of those assets (¥435 million) were classified as the parent company’s investment inplant and equipment relating to networking.
*3. Reportable segment profits were reconsolidated with the operating income of the consolidated
income statement.

24

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012(Per Share Information)
FY2011FY2012

Net assets per share¥ 2,702.78¥ 2,993.28

Net income per share

346.93350.81

Notes:
1. The company calculates net assets per share according to the following financial information:(in millions)
FY2011FY2012

Net assets¥ 19,511¥ 21,636

Deduction－

27(Subscription rights to shares)－

1(Minority interests)－

26

Net assets attributable to common stocks

19,511

21,608

Number of common stocks at the end of FY2011and FY2012: 7,219,000 shares

2. The company did not issue dilutive potential common shares for FY2011.Therefore thecompany did not report diluted earnings per share information.

3. The company did not issue dilutive potential common shares for FY2012.
Therefore the company did not report diluted earnings per share information.

4. The company calculates net income per share according to the following financial information：(in millions)

Net income(Preferred dividends)
Net income attributable to common stocks

FY2011FY2012¥ 2,504¥ 2,532

－

－

2,504

2,532

Average number of common stocks for FY2011 and FY2012: 7,219,000 shares(Significant Subsequent Events)
FY2011(from April 1, 2011 to March 31, 2012) and FY2012 (from April 1, 2012 to March 31, 2013)
None.

25

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2012

4. Other Information(1) The Business Conditions of Products, Orders and Sales(in millions except percentages)
FY2011FY2012

Change¥ 80,222¥ 86,658¥ 6,436

8.0%

Medical Practice Support

20,20122,062

1,861

9.2

Consulting

1,289

1,334

45

3.5

733

806

72

9.9

556

528

(27)

(4.9)

7,333

5,795

(1,537)(21.0)

2,864

1,373

(1,491)(52.1)

4,468

4,422

(46)

(1.0)

9,104

12,979

3,875

42.6

7,414

9,458

2,044

27.6

1,305

3,075

1,769

135.5

383

445

61

16.1

2,473

1,952

(521)

(21.1)

Design and construction

1,842

1,209

(632)

(34.3)

Operating in-hospital store

458

434

(24)

(5.2)

Others

173

308

135

78.2

59,062

63,4204,358

7.4

58,19862,3374,139

7.1

Prescription drug sales

43,68846,212

2,523

5.8

Dispensing technical fees

14,50916,125

1,615

11.1

864

1,082

218

25.3

959

1,175

216

22.5

Sales

Consulting

ChangeDoctor practice transfer/
Practice start-up support
RentalSales*1

RentalLeasing and Installment
Sales

*1

Leasing
Installment sales
OthersPharmacies
Dispensing sales

Non-prescription drug sales
Others

Notes:*1. Sales are recognized when the company sells leasing contracts and rental contracts to otherleasing companies. The company receives lease payments from the original lessee on behalf ofthe leasing companies, and pays the lease payments to the leasing companies. The company’s
income from sales is the difference between the sales price to the leasing companies and thepurchase price from suppliers of underlying assets.

26