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

Summary of Consolidated Financial Results for FY2013(Year ended March 31, 2014) 〔Japanese GAAP〕
April 17, 2014
Company name:SOGO MEDICAL CO., LTD.

Stock exchange listings:

Tokyo 1st Section

Securities code:

4775

URL: http://www.sogo-medical.co.jp/english/

Representative:(Title) President & Representative Director(Name) Itsuo Tashiro

Inquiries:(Title) Director & Executive Managing Officer(Name) Kohichi Hashimoto

Tel: +81-92-713-9181
E-mail: ir@sogo-medical.co.jp
Date of general shareholders’ meeting (as planned) : June 20, 2014
Dividend payable date (as planned) : June 23, 2014
Annual securities report filling date (as planned) : June 20, 2014
Supplemental material of annual results is available.
There will be a convening briefing of annual results for institutional investors and analysts.
(Amounts are rounded down.)

１．Consolidated Financial Results (from April 1, 2013 to March 31, 2014)（１）Consolidated operating results(% indicates year-on-year change.)
Net sales
FY2013
FY2012

Operating income

Ordinary income

Net income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

103,318
86,658

19.2
8.0

5,014
4,324

16.0
(10.8)

5,068
4,343

16.7
(11.0)

2,856
2,532

12.8
1.1

Notes: Comprehensive income: ¥2,876 million for FY2013 (8.8 %) : ¥2,643 million for FY2012 (3.3 %)Net income
per share

Net income toshareholders’equity ratio

Diluted net income
per share
Yen

Operating income
to net sales ratio

%

%

%

－
12.6
－
12.3
References: Investment profit (loss) on equity method: ¥－for FY2013 :¥－for FY2012

8.2
7.9

4.9
5.0

FY2013
FY2012

Yen

Ordinary income tototal assets ratio

395.64350.81（２）Consolidated financial positions
Total assets
FY2013
FY2012

Net assets

Capital adequacy ratio

Net assets per share

Millions of Yen

Millions of Yen%

Yen

66,982
57,13823,934
21,63635.7
37.8

3,311.46
2,993.28

References: Owner’s equity: ¥23,905 million for FY2013 :¥ 21,608 million for FY2012（３）Consolidated cash flows
Cash flows fromoperating activities
FY2013
FY2012

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

7,461
7,269

(5,335)(3,380)(1,370)(2,777)

5,851
5,095

２．Dividends
Dividend per shareFirst quarter

Second quarter
Yen

FY2012FY2013
FY2014(forecast)Third quarter

Yen

－
－
－

40.00
40.00
40.00

FY2012FY2013
FY2014(forecast)

Yen

－
－
－

Yen

Yen

40.00
40.00
40.00

80.00
80.00
80.00

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

Payout ratio(Consolidated)

Total dividend paid

AnnualYear end

Millions of Yen

%

%

577
577

22.8
20.2
19.7

2.8
2.5

３．Consolidated forecasts for FY2014 (from April 1, 2014 to March 31, 2015)(% 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

52,481
111,027

6.9
7.5

1,727
5,214

(1.7)
4.0

1,655
5,111

(6.0)
0.8

878
2,929

(7.6)
2.6

121.63405.80４．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 standard: None
② Changes in accounting policies other than ones based on revisions of accounting standard ①: None
③ Changes in accounting estimates: None
④ Retrospective restatement: None
（３）Number of issued and outstanding shares (common stock）① Number of issued and outstanding sharesat the end of fiscal year (including treasury stock):
FY2013: 7,670,078 shares② Number of treasury stock at the end of fiscal year:
FY2013: 450,921 shares③ Average number of shares:
FY2013: 7,219,157 shares

FY2012: 7,670,078 shares
FY2012: 450,911 shares
FY2012: 7,219,212 shares

(Reference）Summary of Non-consolidated Financial Results
１．Non-consolidated Financial Results (from April 1, 2013 to March 31, 2014)（１）Non-consolidated operating Results
Net sales
FY2013
FY2012

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

Ordinary income

Net income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

86,576
72,608

19.2
7.2

3,807
3,250

17.1
(12.1)

4,307
3,624

18.8
(7.1)

2,820
2,370

19.0
11.3

Diluted net income
per share

Net income per shareYen

FY2013
FY2012390.70328.39Yen－－（２）Non-consolidated financial positions
Total assets
FY2013
FY2012

Net assets

Capital adequacy ratio

Net assets per share

Millions of Yen

Millions of Yen%

yen

60,83052,57322,167
19,90736.4
37.9

3,070.65
2,757.42

References: Owner’s equity: ¥ 22,167 million for FY2013 :¥ 19,906 million for FY2012※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) Analysis of Operating Results” on page.2 for assumptions andcautions on the use of these financial forecasts.

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

Contents
1. Operating Results ...........................................................................................................................2(1) Analysis of Operating Results .....................................................................................................2(2) Analysis of Financial Positions ...................................................................................................5
2. Management Policies ......................................................................................................................9(1) Medium-Term Management Plan “Further Challenge” ..............................................................9(2) Long-Term Vision and Medium-Term Management Plan .........................................................10(3) Priority Initiatives......................................................................................................................10
3. Consolidated Financial Statements ............................................................................................. 11(1) Consolidated Balance Sheet ...................................................................................................... 11(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income 13(3) Consolidated Statements of Change in Net Assets ....................................................................15(4) Consolidated Statements of Cash Flows ...................................................................................17(5) Notes to Consolidated Financial Statements .............................................................................19(Note on the Going-Concern Assumption) .................................................................................19(Basic Information of Consolidated Financial Statements) ........................................................19(Consolidated Balance Sheet) .....................................................................................................22(Consolidated Statements of Income) .........................................................................................23(Consolidated Statements of Cash Flows) ..................................................................................24(Segment Information) ................................................................................................................25(Per Share Information) ..............................................................................................................28(Significant Subsequent Events) ................................................................................................. 28

1

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

1. Operating Results(1) Analysis of Operating Results①Operating Results for FY2013(in millions, except percentages)
FY2012

Sales¥86,658

Higashinihon

MarginFY2013%¥103,318

MarginChange%Change¥16,659

19.2%

31,74736,700

4,953

15.6

Medical practice support

8,145

10,177

2,032

24.9

Pharmacies

23,601

26,522

2,920

12.4

20,06727,390

7,323

36.5

Medical practice support

6,341

9,863

3,522

55.5

Pharmacies

13,725

17,526

3,801

27.7

33,24937,238

3,988

12.0

Medical practice support

7,184

9,150

1,966

27.4

Pharmacies

26,06528,087

2,022

7.8

1,595

1,989

394

24.7

Nishinihon

KyushuOthersOperating Income

4,324

5.0

5,014

4.9

689

16.0

Higashinihon

1,282

4.0

1,289

3.5

6

0.5

Nishinihon

989

4.9

1,324

4.8

334

33.8

Kyushu

2,256

6.8

2,611

7.0

355

15.7

Others

247

15.5

346

17.4

99

40.2

Reconciliation

(452)

-

(558)

-

(105)

-

Ordinary Income

4,343

5.0

5,068

4.9

724

16.7

Net Income

2,532

2.9

2,856

2.8

323

12.8

In the year ended March 31, 2014, the final year of our medium-term management plan to “Grow as
an attractive company through leveraging our DtoD systems and creating high-value pharmacies,”
we continued to striving to build a base from which we can become the leader in all our businessdomains.

To achieve this, we bolstered practice start-up support and expanded high-value pharmacies.
Additionally, we enhanced our human resources though practice process innovation (PPI) systems
for practice start-up support, personnel introduction, and pharmacy management.

2

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

In practice start-up support, we conducted 314 projects, 99 projects more than in the previous fiscal
year. This included support for doctors who planned to retire their practices through introduction of
doctors who wish to start-up their own practices and support for new practices in health care malls.
These projects have led to new lease contracts and 28 new openings of pharmacies.
The number of registered doctors who wish to transfer or start-up practices was 48,430 as of March
31, 2014, an increase of 7,652 compared to March 31, 2013.

We opened 78 new pharmacies (including 33 opened through M&A activities). As a result, the total
number of pharmacies was 493 on March 31, 2014, 76 more than a year earlier. Of these 35 newpharmacies are in Higashinihon, 32 in Nishinihon, and 11 in Kyushu.
On April 1, 2014, we opened 10 new pharmacies. As a result, we operated a total of 503 pharmacies.

We also advanced other projects, such as health care mall operation, management contracting of
medical institutions, and facility leasing.

Consequently, net sales increased 19.2% year on year, to ¥103,318 million, due to new openings in
the pharmacy division and a rise in net sales in the leasing/installment division.
Operating income rose 16.0%, to ¥5,014 million. Ordinary income rose 16.7%, to ¥5,068 million.
Net income rose 12.8%, to ¥2,856 million.

Segment financial results were as follows:

A Higashinihon

Net sales for the year ended March 31, 2014, were ¥36,700 million, an increase of 15.6% year on
year. The major factors for the increased net sales were higher pharmacy sales in the pharmacy
division, a result of contributions from new openings and higher sales from existing pharmacies, aswell as a rise in sales in the leasing/installment division.
Operating income was ¥1,289 million, an increase of 0.5%. The major factors for the increased
operating income were rises in income in the consulting division and in net sales in theleasing/installment division, which offset an increase in selling, general and administrative expenses,
such as amortization of goodwill and allocation amount of common expenses.

3

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

B

Nishinihon

Net sales for the year ended March 31, 2014, were ¥27,390 million, an increase of 36.5% year on
year. The major factors for the increased net sales were a large increase in sales in theleasing/installment division and boosted pharmacy sales in the pharmacy division due tocontributions from new openings, including those conducted through M&A activities, and higher
sales from existing pharmacies.
Operating income was ¥1,324 million, an increase of 33.8%. The major factors were a large increasein net sales in the pharmacy division.

C

KyushuNet sales for the year ended March 31, 2014, were ¥37,238 million, an increase of 12.0% year on
year. The major factors for the increased net sales were higher pharmacy sales in the pharmacy
division, a result of higher sales from existing pharmacies and contributions from new openings, aswell as a rise in sales in the leasing/installment division.
Operating income was ¥2,611 million, an increase of 15.7%. The major factors included the rise inincome from higher sales in the pharmacy division and increased income in the consulting division.

D

Others

Net sales for the year ended March 31, 2014, were ¥1,989 million, an increase of 24.7% year on year.
Operating income was ¥346 million, an increase of 40.2%. These increases were due to the openingof fee-based homes for the elderly.

4

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013②Forecasts for FY2014

FY2013

FY2014

ChangeChange(Forecasts)(amount)(%)¥Millions¥Millions¥Millions%

103,318

111,027

7,709

7.5

Operating income

5,014

5,214

200

4.0

Ordinary income

5,068

5,111

43

0.8

Net income

2,856

2,929

73

2.6

Net income per share (¥)

395.64405.80--Net sales

In the year ending March 31, 2015, we will launch a new medium-term management plan. Under
this plan, priority measures will include undertaking new businesses, improving existing businesses,
and enhancing corporate value. For details, please refer to “2. Management Policies” on page 9.

We forecast that net sales in the year ending March 31, 2015, will be ¥111,027 million, an increaseof 7.5%, operating income will be ¥5,214 million, an increase of 4.0%, ordinary income will be¥5,111 million, an increase of 0.8%, and net income will be ¥2,929 million, an increase of 2.6%
compared to the year ended March 31, 2014.

These figures will be accomplished by advancing the aforementioned measures.

(2) Analysis of Financial Positions①Analysis of Assets, Liabilities, and Net Assets(in millions except percentages and ratios)
FY2012
Total Assets

FY2013

Change¥57,138¥66,982¥9,844including Cash and Deposits

5,115

5,873

757

Liabilities

35,50143,048

7,547

including Interest-Bearing Debt *1

14,33015,552

1,221

Net Assets

21,63623,934

2,297

Shareholders' Equity Ratio (%)

37.8

35.7

(2.1)

Net Debt-to-Equity Ratio (times) *2

0.43

0.40

(0.02)*1.Interest-Bearing Debts include lease obligations and accounts payable-installment purchases.

5

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013*2. Net Debt-to-Equity Ratio=( Interest-Bearing Debts－Cash and Deposits) / Shareholders' Equity

As of March 31, 2014, total assets were ¥66,982 million, an increase of ¥9,844 million compared toMarch 31, 2013.
Current assets were ¥37,047 million, an increase of ¥6,863 million compared to March 31, 2013.The
increase was due primarily to increases of ¥757 million in cash and deposits,¥3,999 million in notes
and accounts receivable-trade, and ¥1,502 million in inventories of compared to March 31, 2013.
Non-current assets were ¥29,934 million, an increase of ¥2,981 million compared to March 31,
2013.The increase was due primarily to increases of ¥2,015 million in goodwill and ¥1,214 million
in buildings and structures, which counteracted a decrease in property for lease of ¥1,114 million
compared to March 31, 2013.

As of March 31, 2014, total liabilities were ¥43,048 million, an increase of ¥7,547 million comparedto March 31, 2013.
Current liabilities were ¥30,358 million, an increase of ¥6,920 million compared to March 31, 2013.
The increase was due primarily to increases of ¥5,306 million in notes and accounts payable-tradeand ¥476 million in current portion of long-term loans payable.
Non-current liabilities were ¥12,689 million, an increase of ¥626 million compared to March 31,
2013.The increase was due primarily to an increase in long-term loans payable of ¥1,621 million,
which offset a decrease in long-term accounts payable-installment purchases of ¥1,153 million.
Interest-bearing debts (including lease obligations and accounts payable-installment purchases) were
¥15,552 million, an increase of ¥1,221 million compared to March 31, 2013. The net debt-to-equity
ratio (interest-bearing debt less cash and deposits divided by shareholders’ equity) was 0.40 times, adecrease of 0.02 times compared to March 31, 2013.

As of March 31, 2014, net assets were ¥23,934 million, an increase of ¥2,297 million compared toMarch 31, 2013. Net income increased net assets by ¥2,856 million and dividends payment
decreased net assets by ¥577 million. As a result, the capital adequacy ratio was 35.7%, a decrease of
2.1 percentage points compared to 37.8% on March 31, 2013.

6

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013②Cash FlowsOn March 31, 2014, cash and cash equivalents was ¥5,851 million, an increase of ¥755 million(14.8%) compared to March 31, 2013. The primary factors were as follows:(Cash Flows from Operating Activities)
Net cash provided by operating activities was ¥7,461 million in the year ended March 31, 2014. The
major cash increases were ¥5,046 million from net income before income tax, ¥3,522 million fromadjustment for depreciation and amortization, and ¥4,932 million from increase in notes andaccounts payable-trade. The major cash decreases were ¥3,468 million from increase in notes andaccounts receivable-trade, ¥1,222 from increase in inventories, and ¥1,842 million from income
taxes paid.

(Cash Flows from Investing Activities)
Net cash used by investing activities was ¥5,335 million in the year ended March 31, 2014. Major
cash outflows were ¥3,308 million for purchase of own-used assets and ¥2,277 million for purchaseof investments in subsidiaries.

(Cash Flows from Financing Activities)
Net cash used by financing activities was ¥1,370 million in the year ended March 31, 2014. Major
cash inflows came in the form of ¥3,650 million in proceeds from long-term loans payable. Major
cash outflows were ¥1,910 million for repayments of long-term loans payable, ¥1,963 million for
repayments of installments payable, ¥573 million for repayments of lease obligations, and ¥577
million for cash dividends paid.

7

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013(Reference) Cash flow-Related Indicators
FY2009
Capital adequacy ratio (%)
Capital adequacy ratio(based on fair value) (%)
Interest-bearing debt tocash flows (%)
Interest coverage ratio(times)

FY2010FY2011FY2012FY2013

43.3

40.5

36.7

37.8

35.7

41.0

36.8

40.5

41.9

44.6

1.6

2.0

3.3

2.0

2.1

63.7

56.0

34.2

49.1

57.1

Capital adequacy ratio: Shareholders’ equity / Total assets
Capital adequacy ratio (based on fair value): Market capitalization / Total assets
Interest-bearing debt to cash flows: Interest-bearing debt / Cash flows
Interest coverage ratio: Cash flows / Interest paid
(Notes)1. Each ratio is calculated using consolidated amounts.
2. Market capitalization is calculated using outstanding shares less treasury stock.
3. Cash flows and interest paid are clarified as net cash provided by (used in) operating
activities.
4. Interest-bearing debt is all debt for which interest is paid interest.

8

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

2. Management Policies(1) Medium-Term Management Plan “Further Challenge”

In Japan, rebuilding government finances has become a matter of utmost importance. As such, theconsumption tax rate was raised in April 2014 as a means of helping secure stable financing
resources for social security spending.
In the medical services area, medical spending is forecast to exceed ¥50 trillion by 2025. Patients
have thus come to expect efficient and high-quality medical services. In light of these factors, in
April 2014, the government revised reimbursement systems for medical services to better separate
medical functions and promote increased coordination between these functions, improve in-homemedical care, and establish comprehensive regional health-care systems.
We consider this significant turning point as an opportunity to better contribute to the society. One
reason we feel the Company can accomplish this is the fact that it has continued to stay a step aheadof the times throughout its history, always considering what society needed and what customers
desired while acting in accordance with its corporate concept of “good medicine through goodmanagement.”
Aiming to achieve our long-term vision, the new medium-term management plan has beenformulated based on the concept of “Further Challenge - Toward a better society in which people canlive with a sense of security-.” Additionally, we have set medium-term targets and defined priority
initiatives to guide us on our quest to resolve the issues faced by society, which we will do by further
advancing current initiatives will creating new services that meet social needs.
Through these efforts, we will work to build a better society through good medicine, which is our
mission and the very reason for our existence.

9

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013(2) Long-Term Vision and Medium-Term Management Plan
①Long-Term Vision“Establish a Japanese healthcare business model”
Our main objective is to create a Japanese-style healthcare system that helps create medical systems
through which patients can receive efficient and high-quality medical treatments under a limited
national budget.
②Medium-Term Management Plan ( from April 2014 to March 2017)

Further Challenge-Toward a better society in which people can live with a sense of security-

We are striving to build a platform for regional healthcare networks by leading the industry with our
DtoD (Doctor to Doctor) system and high-value pharmacies.

(3) Priority Initiatives①Undertaking New Businesses
・We will provide support for managing and coordinating medical services ranging from acutemedical care to in-home care to help build a platform for regional healthcare networks.
②Improving Existing Businesses
・We will provide medical support based around DtoD systems by constructing ideal health caremalls, enhancing support for starting up practices, improving user services, and expanding
stock-style businesses.
・We will create high-value pharmacies by helping pharmacists’ fully utilize their skills to enhancecoordination between pharmacies and medical institutions, make medical costs more reasonable,
improve in-home medical care services and self-health-care support.
③Enhancing Corporate Value
・Acting in accordance with our management principle, we strive to always be an organization thatgrows with its employees and at which employees can take pride in their work and feel a senseof purpose.

10

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

3. Consolidated Financial Statements(1) Consolidated Balance Sheet(in millions)
FY2012FY2013( As of March.31, 2013)( As of March.31, 2014)

AssetsCurrent assets
Cash and deposits

¥

5,115

¥ 5.873

Notes and accounts receivable-trade

14,32718,326

Accounts receivable-installment sales

1,377

1,687

Lease receivables and investment assets

2,120

2,014

Inventories

4,973

6,475

687

762

Other

1,595

1,933

Allowance for doubtful accounts

(13)

(26)

30,18437,047

Property for lease

7,985

6,871

Buildings and structures, net

6,203

7,418

Land

3,018

3,078

Other, net

1,591

2,065

Total property, plant and equipment

18,79919,433

3,279

5,294

711

953

3,990

6,248

Investment securities

1,290

1,008

Deferred tax assets

587

568

Deferred tax assets

Total current assets
Noncurrent assets
Property, plant and equipment

Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets

2,294

2,681

Allowance for doubtful accounts

Other

(8)

(5)

Total investments and other assets

4,163

4,252

Total noncurrent assets

26,95329,934

Total assets

57,13866,982

11

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013(in millions)
FY2012FY2013( As of March.31, 2013)( As of March.31, 2014)

Liabilities
Current liabilities
Notes and accounts payable-trade¥

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

15,065¥ 20,372

330

350

1,679

2,155

Lease obligations

519

503

Accrued expenses

1,541

1,725

Income taxes payable

1,077

1,333

129

175

Other

3,093

3,743

Total current liabilities

23,43730,358

3,570

5,191

824

944

5,604

4,450

Other

2,064

2,103

Total noncurrent liabilities

12,063

12,68935,50143,048

Capital stock

3,513

3,513

Capital surplus

4,136

4,136

Retained earnings

14,77917,058Treasury stock(1,043)(1,043)

Total shareholders' equity

21,386

23,665

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

222

240

Total accumulated other comprehensive income

222

240

Subscription rights to shares

1-

Minority interests

26

28

Total net assets

21,63623,934

Total liabilities and net assets

57,13866,982

Deferred profit on installment sales

Noncurrent liabilities
Long-term loans payable
Lease obligations
Long-term
accounts payable-installment purchaseTotal liabilities
Net assets
Shareholders' equity

12

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(in millions)

Net sales

FY2012FY2013(Apr.1, 2012-Mar.31, 2013)(Apr.1, 2013-Mar.31, 2014)¥

86,658¥ 103,318

Cost of sales

73,503

88,889Gross profit

13,155

14,428Selling, general and administrative expenses

8,831

9,414

Operating income

4,324

5,014

Dividends income

15

16

Dividends income of life insurance

12-

Rent income

30

35

Other

93

130

Total non-operating income

151

183

Interest expenses

67

57

Other

65

71

Total non-operating expenses

132

128

4,343

5,068

Gain on sales of investment securities

178

41

Contributed income

23

7

Total extraordinary income

201

48

Impairment loss

4

34

Loss on sales of investment securities-

26

Loss on valuation of investment securities

6-

Litigation expenses

39-

Office transfer expenses

35

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary loss

9

Total extraordinary loss

85

70

Income before income taxes

4,460

5,046

Income taxes-current

1,747

2,082

Income taxes-deferred

175

105

Total income taxes

1,922

2,187

2,537

2,858

5

2

2,532

2,856

Income before minority interests
Minority interests in income
Net income

13

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013(Consolidated Statements of Comprehensive Income)(in millions)

Income before minority interests

FY2012FY2013(Apr.1, 2012-Mar.31, 2013)(Apr.1, 2013-Mar.31, 2014)¥

Other comprehensive income
Valuation difference on
available-for-sale securities
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable toowners of the parent
Comprehensive income attributable tominority interests

14

2,537

¥ 2,858

106

18

106

18

2,643

2,876

2,638

2,874

5

2

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013(3) Consolidated Statements of Change in Net Assets
FY2012（from April 1, 2012 to March 31,2013）(in millions)Shareholders' equity

Capital stock

Capital surplus

Retained earnings

3,513

4,136

12,788Treasury stock

Total shareholders' equity

Balance at the(1,043)

19,395

beginning of current period
Changes of
items during the period
Dividends from surplus

(541)

(541)

Net income

2,532

2,532

Purchase of treasury stock

(0)

(0)

Net changes of items
other than shareholders' equity
Total changes of items

-

-

1,991

(0)

1,991

3,513

4,136

14,779(1,043)

21,386during the period
Balance at theend of current period

Accumulated other comprehensive income

Subscription rights to

Valuation difference on available-for-salesharesMinority interests

Net assets

securities
Balance at the

116

-

-

19,511

beginning of current period
Changes of items during theperiodDividends from surplus(541)

Net income

2,532

Purchase of treasury stock(0)

Net changes of items
other than shareholders'

106

1

26

133

106

1

26

2,124

222

1

26

21,636equityTotal changes of items
during the period
Balance at theend of current period

15

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

FY2013（from April 1, 2013 to March 31,2014）(in millions)Shareholders' equity

Capital stock

Capital surplus

Retained earnings

3,513

4,136

14,779Treasury stock

Total shareholders' equity

Balance at the(1,043)

21,386

beginning of current period
Changes of
items during the period
Dividends from surplus

(577)

(577)

Net income

2,856

2,856

Purchase of treasury stock

(0)

(0)

Net changes of items
other than shareholders' equity
Total changes of items

-

-

2,278

(0)

2,278

3,513

4,136

17,058(1,043)

23,665during the period
Balance at theend of current period

Accumulated other comprehensive income

Subscription rights to

Valuation difference on available-for-salesharesMinority interests

Net assets

securities
Balance at the

222

1

26

21,636

beginning of current period
Changes of items during theperiodDividends from surplus(577)

Net income

2,856

Purchase of treasury stock(0)

Net changes of items
other than shareholders'

18

(1)

2

18

18

(1)

2

2,297

240

-

28

23,934

equityTotal changes of items
during the period
Balance at theend of current period

16

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013(4) Consolidated Statements of Cash Flows(in millions)
FY2012FY2013(Apr.1, 2012-Mar.31, 2013)(Apr.1, 2013-Mar.31, 2014)

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

¥

4,460

¥5,046

3,267

3,522

4

34

Interest and dividends income

(17)

(18)

Depreciation and amortization
Impairment loss

Capital cost and interest expenses

148

126

Decrease (increase) in notes andaccounts receivable-trade622(3,468)Decrease (increase) in
accounts receivable-installment

(1)

(264)

Net decrease (increase) inlease receivables and investment assets

54

106

(1,003)(1,222)

1,529

4,932

Increase/decrease/ in other assets/liabilities

(118)

181

Other, net

261

439

Subtotal

9,207

9,416

17

18

(148)

(130)

Income taxes paid

(1,807)(1,842)

Net cash provided by (used in) operating activities

7,269

7,461

(3,032)(3,308)Proceeds from sales of own-used assets

349

88

Purchase of property for lease

(74)

(69)

Purchase of investment securities

-

(97)

Proceeds from sales of investment securities

341

444

Purchase of investments in subsidiaries resulting inchange in scope of consolidation(455)(2,277)

Payments of loans receivable

(191)

-

Other, net

(317)

(115)

(3,380)(5,335)Decrease (increase) in inventories
Increase (decrease) in notes andaccounts payable-trade

Interest and dividends income received
Interest expenses paid

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

Net cash provided by (used in) investing activities

17

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013(in millions)
FY2012FY2013(Apr.1, 2012-Mar.31, 2013)(Apr.1, 2013-Mar.31, 2014)

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

¥

(12)

¥6

Proceeds from long-term loans payable

1,500

3,650

Repayment of long-term loans payable(1,376)(1,910)

Repayments of lease obligations

(593)

(573)

(1,755)(1,963)

(541)

(577)

Purchase of treasury stock

(0)

(0)

Other, net

1(1)

Net cash provided by (used in) financing activities(2,777)(1,370)Net increase (decrease) in cash and cash equivalents

1,111

755

Cash and cash equivalents at beginning of period

3,984

5,095

Cash and cash equivalents at end of period

5,095

5,851

Repayments of installment payables
Cash dividends paid

18

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013(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: 18 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.
・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.
・Taikodo yakkyoku honten Co., Ltd.
・T・M Yakkyoku Co., Ltd.
・Care Medical Co., Ltd.
・Beauty Drug Saito Co., Ltd.
・Nakano Pharmacy Co., Ltd.

Taikodo yakkyoku honten Co., Ltd. (all shares acquired on August 6, 2013), T・M Yakkyoku Co.,
Ltd. (all shares acquired on August 6, 2013), Care Medical Co., Ltd. (all shares acquired on
December 27, 2013), Beauty Drug Saito Co., Ltd. (all shares acquired on March 28, 2014), Nakano
Pharmacy Co., Ltd. (all shares acquired on March 28, 2014), were included in the scope of
consolidation starting from April 1, 2013.
Sogo Medical Pharmacy Kanto Co., Ltd. (absorbed into the Company on April 1, 2013), was
excluded from the scope of consolidation starting from April 1, 2013.

19

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

2. Equity-Method
None

3. Fiscal Periods of Consolidated Subsidiaries

Consolidated subsidiaries with fiscal-year ends different from that of the Company:

Nakano Pharmacy Co., Ltd.

May 31

Maeda & Co., Ltd.

June 30

T・M Yakkyoku Co., Ltd.

June 30

Taikodo yakkyoku honten Co., Ltd.

July 31

Sumiredo Pharmacy Co., Ltd.

August 31

Beauty Drug Saito Co., Ltd.

September 30

Yataya Pharmacy Co., Ltd.

October 31

Care Medical Co., Ltd.

December 31

When preparing consolidated financial statements, financial statements as of March 31, 2014, areused for these companies.

4. Significant Financial Accounting Principles(1) Valuation basis and method of major assets①Investment Securities
With market value:
By the mark-to-market method based on average market value over a period of one month prior
to the date of settlement of the consolidated accounts (valuation differences are reported as aseparate component of net assets and the sale price is determined by the moving-averagemethod).
Without market value:
At cost, using the moving-average method
Investments in a limited investment partnership or a similar partnership (that can be considered
as marketable securities in accordance with the Article 2 (2) of the Financial Instruments andExchange Act) are stated at their net equity value on the most recent financial statements that areavailable on the settlement report day as specified in the partnership agreement.

20

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013②Inventories
Inventories are mainly reported using the lower of cost or market price. The costs are calculatedusing the gross average method.

(2)Depreciation①Property for lease
Depreciation is calculated by use of the straight-line method over each rental term of the assets.
②Plant, Property and Equipment and Intangible assets (Excluding rental assets, leasd assets (lessee)and plant property and equipment related to pharmacies opened after April 1, 2012)
Depreciation for plant, property and equipment is calculated by use of the declining balancemethod. Depreciation for intangible assets is calculated by use of the straight-line method.
Useful lives of building and structures range from 10 to 47 years.
③Leased 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 asset’s lease term of the assets and with noestimated salvage value.
④Plant property and equipment related to pharmacies opened after April 1, 2012
Depreciation is calculated by use of the straight-line method.

(3)Allowance
Allowance for Doubtful Accounts
Allowances are recognized for doubtful accounts. General provisions are determined on the basisof past credit loss experience, and specific provisions, such as loss apprehensive credits, aredetermined by considering individual collectability.

(4)Revenue and Expense Recognition①Financing Leases (Lessor)
When the Company receives a lease payment, the Company recognizes the sale amount and costof sale.
②Installment Sales
When the Company delivers a product through an installment contract, the Company recognizes
the full contract amount as accounts receivable-installment sales. When a due date arrives, theCompany reports both the installment sale and the installment cost. Additionally, the Company
recognizes an unrealized income corresponding to accounts receivable-installment sales for which
the due date has not arrived at year end as deferred profit on installment sales.

21

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013(5)Amortization of Goodwill Method and Period
Goodwill is amortized using the straight-line method over a period of no more than 10 years, withthe reasonable period being decided for individual items.

(6) Scope of Funds Used to Prepare Consolidated Cash Flow Statements
Funds used to prepare the consolidated cash flow statements (cash and cash equivalents) include
cash on hand, deposits withdrawable at immediate notice, and easily convertible short-term
investments redeemable within 3 months of acquisition with minimal risk of fluctuations in value.

(7) Others
Consumption and Local Consumption Tax
The Company applies the tax exclusion method for consumption and local consumption tax. The
consumption tax amount not subject to tax credit related to property, plant and equipment isclassified as an investment and other assets. The other assets are depreciated using thestraight-line method over five years. The other consumption tax amount not subject to tax credit isclassified as a period expense.

(Consolidated Balance Sheet)
1. Inventories(in millions)
FY2012
Medical supplies

FY2013¥ 4,762¥ 6,214Merchandise

22

23

Costs on uncompleted construction contracts

8

34

179

202

Raw materials and supplies

2. Accumulated Depreciation(in millions)
FY2012
Accumulated depreciation¥ 12,618

FY2013¥ 14,901

3. Investment Securities for Affiliated Companies(in millions)
FY2012
Investment securities

¥ 429

22

FY2013¥ -SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

4. Contingent Liabilities(in millions)
FY2012Kaze-No-Suzuran-Kai, etc (8people)
Employees (10people)

FY2013¥ 2,324
11

Total

2,335

Kaze-No-Suzuran-Kai, etc (8 people)¥2,456

Employees (10people)

11

Total

2,467

(Consolidated Statements of Income)
1. Main Selling General and Administrative Expenses(in millions)
FY2012
Salaries and allowances

FY2013¥ 3,108¥ 3,193

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

Place

Use

Classification

Amount(in millions)

Kyushu1 Pharmacy (Kyushu)

Pharmacies

Buildings and structures, etc

¥ 4

Total

4

For pharmacies that continue to record losses and are not expected to return to profitability, theCompany reduces the book value of applicable pharmacies to a collectable amount, and thenrecognizes impairment loss as extraordinary loss. Impairment loss for the year ended March 31,
2013, was ¥4 million made up as follows: buildings and structures was ¥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 with consideration made for the materiality of each asset.

23

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

FY2013（from April 1, 2013 to March 31,2014）
We divide assets into groups based on a minimum unit which generates cash flows. Specifically,
the minimum unit for pharmacies is divided based on each pharmacy.
We reported impairment loss for following groups:
Business

Place

Use

Classification

Amount(in millions)

Higashinihon

1 Pharmacy (Kanto)

Pharmacies

Buildings and structures, etc¥ 11

Nishinihon

1 Pharmacy (Chugoku),

Pharmacies

Buildings and structures, etc

11

1 Office (Kinki)

OfficeKyushu1 Pharmacy (Kyushu)

Pharmacies

Buildings and structures, etc

5

Whole

Head office(Kyushu)

SystemSoftware

5
Total

34

For pharmacies that continue to operate at a deficit and are not expected to return to profitability,
pharmacies and offices scheduled to be relocated, and old operating systems disposed of following
the introduction of new systems, the Company reduces the book value of the applicable asset to acollectable amount, and then recognizes impairment loss as extraordinary loss. Impairment loss
for the year ended March 31, 2014, was ¥34 million made up as follows: buildings and structures,etc. was ¥17 million, property, plant and equipment-other was ¥11 million, and intangible assets
was ¥5 million.
The collectable amount is measured by a net sales price based on a land price or a fixed assets tax
assessment value with consideration made for the materiality of each asset. The collectableamount of assets for disposal following the introduction of a new system was zero.

(Consolidated Statements of Cash Flows)
1. Items of Cash and Cash Equivalents(in millions)
FY2012
Cash and deposits

FY2013¥ 5,115¥ 5,873

Over three-month time deposit

(20)

(22)

Cash and Cash Equivalents

5,095

5,851

2. Significant Non-Cash Transactions
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.
24

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

FY2013 (from April 1, 2013 to March 31, 2014)
Assets and liabilities as a result of this fiscal year’s financing lease transactions were ¥667 million,and ¥703 million respectively. Assets and liabilities as a result of this fiscal year’s installment
sales transactions were ¥918 million, and ¥964 million respectively.

(Segment Information)
1. Outline of Segment
Reportable segment are components of the Company for which separate financial information isavailable. The board of directors regularly evaluates these segments to make decisions about how
to allocate resources and assess performance.
Our businesses consist of management consulting for medical institutions and medical doctors,
DtoD (support system for medical practice succession, medical cooperatives, and practitioner
recruitment), TV rental for patients in hospitals, leasing and installment payment sales of medical
equipment, design and construction of medical institutions, pharmacies, managing fee-based
residential homes for the elderly, and TV rental for hotels.

Our reportable segments are now ‘Higashinihon’, ‘Nishinihon’ and ‘Kyushu’ to allow for
development of regional strategies and rapid decision-making about business operations.

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.

25

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

3. Segment Sales, Profit (Loss), and Assets
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

19,093

11,547

15,12345,764

3,278

49,042

8,095

57,138Depreciation

906

861

907

2,675

254

2,930

337

3,267

Amortization of goodwill

348

36

22

406

0

407

－

407

2,052

1,247

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 and was notallocated to reportable segments.
(2) Reconciliation for reportable segment assets (¥8,095 million) included elimination
investment against equity (¥-5,114 million) and overall corporate assets (¥13,985 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) was 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.

26

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013

FY2013 (from April 1, 2013 to March 31, 2014)(in millions)
Reportable Segments
Higashinihon

Nishinihon

KyushuOthers

Total

Total

*1

Reconciliations*2

consolidated
amounts*3

Sales
Unaffiliated sales¥ 36,700¥ 27,390¥ 37,238¥ 101,329¥ 1,989¥103,318－¥ 103,318

Intersegment sales

19

346

3

369

2,457

2,826

¥ (2,826)

－

Total

36,71927,737

37,241

101,698

4,446

106,145(2,826)

103,318

Segment profit

1,289

1,324

2,611

5,225

346

5,572

(558)

5,014

Segment assets

22,936

15,651

16,524

55,112

3,285

58,398

8,584

66,982

1,052

923

921

2,897

289

3,187

335

3,522

415

140

22

578

0

579

－

579

2,930

2,318

944

6,192

224

6,417

737

7,155

OthersDepreciation
Amortization of goodwill
Increase 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 (¥558million) included elimination of intersegment
sales (¥5million) and overall corporate expense (¥-563million). The overall corporate expense
was classified as selling general and administrative expenses and was not allocated toreportable segments.
(2) Reconciliation for reportable segment assets (¥8,584 million) included elimination investment
against equity (¥-7,529 million) and overall corporate assets (¥17,040 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 (¥737 million) was classified as head office’s networking systems and allocationof other reportable segments.
*3. Reportable segment profits were reconsolidated with the operating income of the consolidated
income statement.

27

SOGO MEDICAL CO., LTD. (4775)
Summary of Consolidated Financial Results for FY2013(Per Share Information)
FY2012FY2013

Net assets per share¥ 2,993.28¥ 3,311.46

Net income per share

350.81395.64

Notes:
1. We calculate net assets per share according to the following financial information:(in millions)
FY2012FY2013

Net assets¥ 21,636¥ 23,934

Deduction

27

28(Subscription rights to shares)

1-(Minority interests)

26

28

21,60823,905

Net assets attributable to common stocks

Number of common stocks at the end of FY2012and FY2013: 7,219,000 shares

2. We did not issue dilutive potential common shares for FY2012.
Therefore we did not report diluted earnings per share information.

3. We did not issue dilutive potential common shares for FY2013.
Therefore we did not report diluted earnings per share information.

4. We calculate net income per share according to the following financial information：(in millions)
FY2012
Net income

FY2013¥ 2,532¥ 2,856--(Preferred dividends)
Net income attributable to common stocks

2,532

2,856

Average number of common stocks for FY2012 and FY2013: 7,219,000 shares
The Company repurchased and then cancelled all 13,500 stock options issued following approvalby the board of directors on April 18, 2012.

(Significant Subsequent Events)
None.

28