Summary of Consolidated Financial Results
For the Year Ended January 31, 2014
[Japanese Standards] (Consolidated)
March 3, 2014
Company name: Pigeon Corporation (Stock code: 7956)
Listings: First Section, Tokyo Stock Exchange
Website: www.pigeon.co.jp
Representative: Shigeru Yamashita (President and COO)
Contact: Tsutomu Matsunaga (Managing Officer, Corporate Planning & Administration Division)//Tel: +81-3-3661-4188
Annual General Meeting of Shareholders: April 25, 2014
Year-end dividends: Paid from April 28, 2014
Date of release of Business Report: April 28, 2014
Supplementary materials for the financial results: No
Investor conference for the financial results: Yes (For analysts and institutional investors)

1. Consolidated Financial Results (February 1, 2013 –January 31, 2014)(1) Performance(¥ millions, rounded down, % figures denote year-on-year change)
Operating Income
Ordinary Income
Net Income

Net SalesYear ended January 31, 2014

77,46519.0%

10,36546.3%

11,002

48.9%

6,985

52.7%

65,075
10.0%
7,086
40.5%
7,389
50.3%
4,573
43.7%
(Note) Comprehensive income for year ended January 31, 2014 ¥10,505 million (68.7%) Comprehensive income for year ended
January 31, 2013 ¥6,229 million (126.9%)

Year ended January 31, 2013

Diluted Net
Income Per
Share (¥)

Net Income per
Share (¥)

Return on
Equity (%)

Total Assets/
Ordinary
Income (%)

OperatingMargin (%)

Year ended January 31, 2014174.53

－

19.7

20.7

13.4

Year ended January 31, 2013114.27

－

15.5

16.0

10.9

Reference: Equity in earnings of affiliates: ¥58 million (January 31, 2014); ¥51 million (January 31, 2013)(Note) The Group conducted a stock split at the ratio of 2 shares for every 1 share of common shares. The effective date of the stock
split was August 1, 2013. Net income per share was calculated assuming that the stock split was performed at the beginning of theprevious fiscal year ended January 31, 2013.

(2) Financial Position
Total Assets

Net Assets

Equity Ratio (%)

Net Assets
Per Share (¥)

At January 31, 2014

57,95539,981

67.5

977.50At January 31, 2013

48,53832,36565.3

791.26

Reference: Equity: ¥39,124 million (At January 31, 2014); ¥31,671 million (At January 31, 2013)(Note) The Group conducted a stock split at the ratio of 2 shares for every 1 share of common shares. The effective date of the stock
split was August 1, 2013. Net assets per share were calculated assuming that the stock split was performed at the beginning of theprevious fiscal year ended January 31, 2013.

(3) Cash Flows
Cash and Cash
Equivalents
at Year-End

Cash Flows From
Operating Activities

Cash Flows From
Investing Activities

Cash Flows From
Financing Activities

Year ended January 31, 2014

7,930

(3,794)(3,163)

13,102

Year ended January 31, 2013

7,656

(1,848)(3,149)10,574

2. Cash Dividends
Annual Dividends (¥)
1Q

2Q

3Q

Year-end

Full-year

Total
Dividends
Paid (fullyear) (¥ mil)Consolidated
Payout Ratio(cons.) (%)

Dividends on
Consolidated
Net Assets(cons.) (%)

Year ended January 31, 2013

－

44.00

－

71.00

115.00

2,301

50.3

7.8

Year ended January 31, 2014

－

66.00

－

55.00

－

3,522

50.4

10.0

Year ending January 31, 2015
45.00
45.00
90.00
49.3
－
－
(Forecast)(Note) The Group conducted a stock split at the ratio of 2 shares for every 1 share of common shares. The effective date of the stock
split was August 1, 2013.

3. Forecast for the Year Ending January 31, 2015
(February 1, 2014 – January 31, 2015)
Net SalesYear Ending January 31, 2015(% figures denote year-on-year change)

84,500

9.1%

Operating
Income11,60011.9%

Ordinary
Income11,800

7.3%(¥ millions, rounded down)
Net Income per
Net Income
Share (¥)
7,300

4.5%

182.38*Notes(1) Changes in significant subsidiaries during the period under review (Change in specific subsidiaries accompanying
changes in scope of consolidation): None
(2) Changes in accounting policies, changes in accounting estimates, restatements
1) Changes in accounting policies pursuant to revision of accounting standards: Yes
2) Changes other than the above: None
3) Changes in accounting estimates: Yes
4) Restatement: None
(Note) From the consolidated accounting year under review, the depreciation method has been changed and thischange is applicable to “a case when it is difficult to distinguish between a change in an accounting policy and achange in an accounting estimate.” For further information, please refer to “(5) Notes relating to Consolidated
Financial Statements” in “3. Consolidated Financial Statement” on page 16.
(3) Number of outstanding shares (ordinary shares)
1) Number of shares outstanding at term-end (including treasury shares)
Year ended January 31, 2014: 40,551,162
Year ended January 31, 2013: 40,551,162
2) Number of treasury shares at term-end
Year ended January 31, 2014: 525,652
Year ended January 31, 2013: 524,218
3) Average number of shares during the period
Year ended January 31, 2014: 40,026,022
Year ended January 31, 2013: 40,027,582(Note) The Group conducted a stock split at the ratio of 2 shares for every 1 share of common shares. The
effective date of the stock split was August 1, 2013. The number of shares listed above was calculated assumingthat the stock split was performed at the beginning of the previous fiscal year ended January 31, 2013.
* Note on the current progress of the audit
This summary of consolidated financial results is not included among the audit targets according to the Financial
Instruments and Exchange Act, and the audit regarding the consolidated financial statement is being conducted at thetime this summary of consolidated financial results is announced.
*Disclaimer regarding appropriate use of performance forecasts and other important matters
The forecasts and future projections stated in this report have been prepared on the basis of the information andassumption that shall be reasonable as of the date of announcement of this summary information, and the actual results
could differ significantly from forecast figures depending on a variety of factors.
For the information regarding performance forecasts, please refer to “(1) Performance Analysis” on “1. Performance
Analysis and Financial Position Analysis” on page 2.

Table of contents of the appendix
1. Performance Analysis and Financial Position Analysis .................................................................. 2(1) Performance Analysis.................................................................................................................. 2(2) Financial Position Analysis ......................................................................................................... 4(3) Income Appropriation Policy ...................................................................................................... 5
2. Management Policies ....................................................................................................................... 7(1) Basic Policies ............................................................................................................................. .7(2) Performance Targets................................................................................................................... .7(3) Medium-Term Management Strategies ....................................................................................... 7(4) Issues to Address ......................................................................................................................... 7
3. Consolidated Financial Statement .................................................................................................... 8(1) Consolidated Balance Sheets....................................................................................................... 8(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income10
Consolidated Statements of Income .......................................................................................... 10
Consolidated Statements of Comprehensive Income ................................................................ 11(3) Statement of Changes in Consolidated Shareholders’ Equity ................................................... 12(4) Consolidated Statements of Cash Flows ................................................................................... 14(5) Notes relating to Consolidated Financial Statements ................................................................ 16(Notes Regarding Going Concern Assumptions)...................................................................... 16(Change in Accounting Policy which is Difficult to Distinguish from a Change in Accounting
Estimate) .................................................................................................................................. 16(Segment Information) .............................................................................................................. 16(Per Share Information) ............................................................................................................ 18(Material Subsequent Events) ................................................................................................... 18

1

1. Performance Analysis and Financial Position Analysis(1) Performance Analysis
1) Performance Overview
In the economy of Japan during the consolidated period under review, we have seen the effects ofthe financial and economic stimulus measures the government has conducted to stop deflation,
which resulted in improvement in both corporate earnings and personal consumption, and theeconomy enjoyed a continuing trend of a gradual recovery. On the other hand, due to uncertain
prospects for the economic conditions of the world economy, possibilities for a sharp rise in theprice of materials under the impact of the weak yen rates as well as for a downturn in consumption
following an increase in consumption tax and other factors, there is still a risk of domestic economy
entering a downward tendency.
Under these circumstances, in the final year of our fourth medium-term business plan “Achieving
global business success through company and individual competence,” starting February 2011 andending January 2014, we have defined the following key issues based on the fundamental policiesof this medium-term business plan and have conducted a business.
1) Domestic Baby and Mother Care Business- Ensuring growth and expansion of the large-size product business by releasing new products
into the markets- Establishment of such new fields as the "Pigeon from 1 year and a half" series, and the"Female Wellness" area
2) Child-rearing Support Services- Improvement of quality of products for nursing and raising the management efficiency ofthe business
3) Health Care and Nursing Care Business- Restructure of the business operation system and improvement in profitability throughpromotion of sales activities centering on facility routes- Ensuring thoroughness of implementation of the growth strategy centering on the important
products group4) Overseas Business- Chinese market: further strengthening of the brand name through such measures as ensuring
releases of products from the new business areas into the markets and increasing the numberof hospitals cooperating- The U.S. and European markets: releasing new products into the markets and developing thebrands (such as mOmma)- Market expansion: making inroads into new and growing markets of India, Malaysia, Korea,
and other countries
We focused on the above issues during the consolidated period under review (February 1, 2013 toJanuary 31, 2014).
As a result, net sales for the period amounted to ¥77,465 million, up 19.0% from the previous
corresponding period, due to factors including healthy business expansion in Overseas Businesscentering China and North America as well as weaker yen. As to earnings, operating income was¥10,365 million, up 46.3% from the previous corresponding period, due to increased sales andefficient utilization of production bases accompanying business expansion. Ordinary income was¥11,002 million, up 48.9% from the previous corresponding period, due to an increase in otherincome from foreign exchange gain, a result of yen moving weaker than the assumed level. Net
income was ¥6,985 million, up 52.7% from the previous corresponding period. Each significantly
exceeded the previous corresponding result.

22) Segment Review
Our business reporting segments are Domestic Baby and Mother Care Business, Child-rearing
Support Services, Health Care and Nursing Care Business and Overseas Business. Each segment isoutlined below.
Domestic Baby and Mother Care BusinessNet sales in this segment grew 2.4% over the previous corresponding period to ¥24,451 million,
aided by the introduction of fresh products. Segment income rose 1.0% from the previous
corresponding period to ¥3,411 million. This figure was restrained by cost of sales, as marketing for
expendable supplies and active implementation of sales policies contributed to an increase in selling,
general and administrative expenses.
In this segment, we have released such products as the Mahalo stroller created to ensure the comfortof the baby by equipping it with Pigeon's original hug sheet, six product types in the UV baby series
making it possible to protect baby from the UV rays in three steps, namely, protecting, removing,and moistening (released in February), the Bonyu Jikkan series of feeding bottles offering three
products with different designs enabling mothers to select the product for best fitting individual
tastes (released in March), OSHIRI Nap TAPPURI Aqua wipes using newly developed sheets
achieving use of 99% pure water in the product (released in July), and KANDE OISHII YOSAN
Tablet Calcium Plus, a supplement for women getting ready for pregnancy and those alreadypregnant, for whom it is very important to have a well-balanced diet in terms of three nutritional
elements this product contains: folic acid, iron, and calcium (released in August). Moreover, during
the consolidated period under review, we have held 48 events planned as a part of our directcommunications program such as our Premama Class for women expecting to give birth in the near
future and Mama Class for those who have just given birth. A total of approximately 3,600 women
have participated. We made continuing progress in attracting new members to “Pigeon Info”—aword-of-mouth community portal that supports women during pregnancy, in childbirth, and thoseraising children.
Child-rearing Support Services
Net sales of the segment amounted to ¥6,599 million, up 3.3% from the previous corresponding
period, while segment income went down to ¥176 million, which is somewhat less (down 3.6%)
than the previous corresponding period, due to an increase in selling, general and administrative
expenses, which was due to an increase in recruitment expenses the segment had to make to deal
with a continuing shortage of nurses. We launched three in-house nursery facilities in March andApril, and while improving the service quality, the Group is steadily promoting sales. There is alsoa satisfactory increase in the number of contracts concluded by the babysitter segment withcorporate clients.
Health Care and Nursing Care BusinessNet sales in this segment rose a slight 0.3% from the previous corresponding period to ¥6,721
million, as price competition continued to intensify in the area of expendable supplies. Segment
income declined 0.4% to ¥212 million.
In August the Company released products such as Recoup FUTAN KEIGEN Supporter
HIZAKANSETSU UGOKI Smooth, which helps the wearer to move the weakened knee joints
easier. In September we released Habinurse YABURENIKUI TAIPU NO OSHIRIFUKI wipes for
adults, which enable users to clean themselves well after using the washroom while keeping hands
clean. Also in November, we released new wheel chair, Habinurse Lock Assista, which locks thewheels automatically when a user stands up from its sheet. We will continue to bring further
products to market in this segment by identifying market needs using research targeted on important
categories. The segment will also actively advance Group policies, including marketing measurescentered on facility routes.
3

Overseas Business
Sales of the segment amounted to ¥38,540 million, up 42.9% from the previous corresponding
period. Although the selling, general and administrative expenses increased as a result of marketing
activities conducted to actively expand the business, the segment income amounted to ¥10,172
million, up 59.3% from the previous corresponding period. In China, in addition to measures tostrengthen marketing activities and activities to spread sales promotion, the Group also released a
new paper diaper product for babies in July, resulting in net sales far exceeding the results of theprevious corresponding period. The Group also successfully expanded the scale of production at our
two production bases located in China and is currently engaged in measures to increase theefficiency of operations. In India, we are continuing to actively expand sales and marketing
activities with a view to establish our brand on the market. In the future, we intend to strengthen thesales/distribution system further and tune up the product supply organization starting withconstruction of local factories. In North America, we are planning on continuing our businessexpansion by increasing the number of categories of products offered, strengthening of organization
control, and other measures.
OthersSales in this segment amounted to ¥1,151 million, up 1.0% from the previous corresponding period,
due to a slight increase in OEM product orders. The segment income amounted to ¥204 million, up
44.2% from the previous corresponding period.
3) Outlook
The Group has tabled its fifth medium-term business plan, covering the period from February 1,
2015 to January 31, 2017, adopting the slogan, “Pursuing world class business excellence, thinkglobally, plan agilely, and implement locally.” In this plan, the Group has stipulated Vision 2016 as
outlined below, aiming to expand Group operations and improve management quality. With thecoming period marking the first fiscal year of this new medium-term business plan, the Group ismoving resolutely forward to achieve this plan.
Vision 2016i) Strengthen brand effectiveness to become global No. 1 in childcare productsii) Strengthen the management framework for continuous business developmentiii) Improve management quality by focusing on cash flowiv) Construct a global system for personnel training and management and promote employee
dynamismv) Further enhance enterprise value(2) Financial Position Analysis
1) Assets
As of January 31, 2014, total asset amounted to ¥57,955 million, up ¥9,416 million (or 19.4%) fromthe previous fiscal year ended January 31, 2013.
Current assets had an increase of ¥6,260 million (or 21.5%), and fixed assets had an increaseof ¥3,156 million (or 16.2%).
Current assets increased mainly due to an increase in cash and deposits of ¥2,528 million (or23.9%) and an increase in notes and accounts receivable of ¥2,028 million (or 19.2%).
Fixed assets increased mainly due to an increase in machinery and transportation equipmentof ¥2,022 million (or 69.8%) and an increase in buildings and structures of ¥1,017 million (or19.5%).
2) Liabilities
As of January 31, 2014, total liabilities amounted to ¥17,973 million, up ¥1,800 million (or 11.1%)
from the fiscal year ended January 31, 2013. Current liabilities had an increase of ¥1,202 million (or10.4%), and long-term liabilities had an increase of ¥597 million (or 13.1%).
4

Current liabilities increased mainly due to an increase in current portion of long-term loans
payable of ¥978 million and an increase in notes and accounts payable of ¥654 million (or 16.9%)
despite a decrease in short-term borrowings of ¥994 million (or 71.6%).
Long-term liabilities increased mainly due to an increase in deferred tax liabilities of ¥826
million (or 54.0%).
3) Net Assets
As of January 31, 2014, net assets amounted to 39,981 million, up ¥7,616 million (or 23.5%) fromthe fiscal year ended January 31, 2013.
This increase resulted mainly from an increase in foreign exchange adjustment accounts of¥3,211 million and an increase in retained earnings of ¥4,243 million (or 18.7%).
4) Cash Flow
As of January 31, 2014, cash and cash equivalents (hereinafter referred to as "net cash") amounted
to ¥13,102 million, up ¥2,528 million from a year earlier.
Cash Flows from Operating Activities
Net cash provided by operating activities amounted to ¥7,930 million, up from ¥7,656 million of
the previous year. Factors increasing operating cash flows included a ¥10,986 million in income
before income taxes and a ¥1,865 million in depreciation. Contrasting factors included an increaseof ¥587 million in trade receivables and a ¥3,241 million in income taxes paid.
Cash Flows from Investing Activities
Net cash used in investing activities totaled ¥3,794 million, up from ¥1,848 million of the previous
year. Main factors included expenditures of ¥3,223 million in the acquisition of tangible fixed
assets.
Cash Flows from Financing Activities:
Net cash used in financing activities was ¥3,163 million, up from ¥3,149 million of the previous
year. Decreases resulted primarily from ¥8,153 million in repayment of short-term debt and ¥2,740
million in payment of cash dividends. Contrasting factors included a ¥7,079 million in proceedsfrom short-term debt and a ¥752 million in proceeds from long-term loans payable.
[Reference] Cash Flow Indicators for the year ended January 31
FY2012FY2013

FY2014Equity Ratio (%)

62.7

65.3

67.5

Equity Ratio based on Market Price (%)

131.1

205.7

325.6

Debt Repayment Term (years)

1.1

0.4

0.4

Interest Coverage Ratio (times)

67.2

98.1

334.5

Notes:- Equity ratio: Total shareholders’ equity ÷ Total assets- Equity ratio based on market price: Market value of total stock ÷ Total assets- Debt repayment term: Interest-bearing debt ÷ Operating cash flows- Interest coverage ratio: Operating cash flows ÷ Interest paid
1. Each index is calculated based on consolidated financial figures.
2. Market value of total stock is calculated by multiplying the stock price (closing price at the end of the term) by the number of shares outstandingat the end of the term (after deduction of treasury stock).
3. Operating cash flow figures are taken from the Cash Flows from Operating Activities section of the Consolidated Statements of Cash Flows.
4. Interest-bearing debt refers to all debt that incurs interest (listed in Consolidated Balance Sheets).
5. For interest paid, interest expenses (listed in Consolidated Statements of Cash Flows) are used.

(3) Income Appropriation Policy
The Pigeon Group regards the return of income to shareholders as an important management
priority. Our policy is to actively return income to shareholders through appropriation of retained
earnings and other means, while reinforcing our financial position based on considerations of
medium-term changes in business conditions and the Group’s business strategies. In addition tostrengthening our financial position, we effectively use retained earnings in a number of ways to5fortify our operational base and improve future Group earnings. These include investing in new
businesses and research and development, as well as investing in production facilities to raise
production capacity, reduce costs, and enhance product quality.
With respect to specific goals of shareholder return, under our medium-term business planannounced in March 2011, we are targeting a consolidated total shareholder return of 50%. To thisend, we are seeking to further strengthen and upgrade measures for returning income to allshareholders.
Guided by these policies, the Company’s policy on interim dividends for the business year
under review is as follows. An ordinary dividend of ¥66 per share is appropriated (¥33 per shareafter the share split effective August 1, 2013). Thanks to positive trends in business results
significantly outstripping the current-term income plan, the Company has increased its planned
year-end dividend by ¥18 per share, from ¥37 per share as forecast in the announcement of
September 2, 2013 to ¥55 per share. As a result, the annual dividend for the business year underreview will total ¥88 per share. Calculated on the basis of the number of shares after the share split
mentioned above, the annual dividend is increased ¥30.5 from the previous fiscal year.

62. Management Policies(1) Basic Policies
By delivering on its corporate commitment, “providing the gift of love to all” in the form of
products and services, the Group deploys operations to fulfill its mission of bringing joy, happinessand delight to babies and families around the world. Guided by this philosophy, the Group has set inits medium-term corporate vision the goal of becoming global No. 1 in its field, as the producer ofchildcare products that is most trusted by the world’s parents and families.
(2) Performance Targets
The Group has drafted its fifth medium-term business plan, covering the period from February 1,
2015 to January 31, 2017, adopting the slogan, “Pursuing world class business excellence, thinkglobally, plan agilely, and implement locally.” By resolutely implementing the necessary measures,
the Group aims to achieve the following targets by the final year of the plan, the fiscal year ending
January 31, 2017: Net sales of ¥100 billion, operating income of ¥15 billion and net income of ¥9billion. Moreover, to achieve further improvements in profitability and capital efficiency, the Groupwill focus on management indices such as return on equity (ROE) and return on invested capital(ROIC), with the aim of attaining further improvements.
(3) Medium-Term Management Strategies
In its fifth medium-term business plan, covering the period from February 1, 2015 to January 31,
2017, the Group has stipulated Vision 2016 as outlined below, aiming to expand Group operations
and improve management quality.
Vision 2016i) Strengthen brand effectiveness to become global No. 1 in childcare productsii) Strengthen the management framework for continuous business developmentiii) Improve management quality by focusing on cash flowiv) Construct a global system for personnel training and management and promote employee
dynamismv) Further enhance enterprise value(4) Issues to Address
The Group expects uncertainty to linger in the economic environment in which it operates. A
substantial recovery in the Japanese economy is slow to arrive, while trends remain unclear in the
global economy and particularly in North America and Europe. However, the Group expects to see
continuation of the trend in which the nations of East Asia ex-Japan and other emerging nations
drive growth in the world economy.
To thrive in this environment, the Group is steadily implementing a series of measures in new
strategies drafted for each business segment, along with a functional strategy on which these arebased. In particular, the Group is focusing on overseas operations, which are positioned as acontinuing growth field. In this arena the Group will expand and deepen its presence in existing
markets, most notably in China and North America, while making determined inroads in newmarkets. In so doing, the Group aims for further expansion in business results.
Further, for enterprises, the primal mandate is the continuation of business and with respect to
the Group’s Business Continuity Plan, we will further enhance the global risk management
structure that has already been put in place.
Further, in order to further enhance the soundness and transparency of management going
forward, a through enforcement of internal control systems, including the compliance organization
will be made for fortifying corporate governance.

73. Consolidated Financial Statement(1) Consolidated Balance Sheets(Thousands of yen)
At January 31, 2013ASSETS
I. Current Assets:
Cash and time deposit
Notes and accounts receivable
Goods and products
Goods in process
Raw material and inventory goods
Deferred tax assets-current
Receivables
Other current assets
Allowance for doubtful accounts
Total Current Assets
II. Fixed Assets:
1. Tangible Fixed Assets:
Buildings and structures
Accumulated depreciation
Buildings and structures-net
Machinery and transportation equipment
Accumulated depreciation and accumulated
impairment loss
Machinery and transportation equipment-net
Tools, furniture and fixtures
Accumulated depreciation and accumulated
impairment loss
Tools, furniture and fixtures-net
Land
Construction in progress
Total Tangible Fixed Assets
2. Intangible Fixed Assets:
Goodwill
Software
Other intangible fixed assets
Total Intangible Fixed Assets
3. Investments and Other Assets:
Investment securities
Bankruptcy claims
Deferred tax assets
Insurance reserve
Other
Allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets

8

At January 31, 2014

10,574,326
10,540,939
4,816,217
167,286
1,792,836
702,514
248,027
278,419(17,213)
29,103,354

13,102,606
12,569,111
5,350,773
281,547
2,420,080
825,622369,348475,283(30,988)
35,363,386

12,108,861(6,887,458)
5,221,403
10,131,586

13,421,260(7,182,701)
6,238,559
12,998,456(7,232,025)(8,076,077)

2,899,560
4,841,719

4,922,379
5,463,526(3,716,206)(4,158,908)

1,125,512
6,015,064
946,598
16,208,139

1,304,618
6,080,256
477,649
19,023,463

551,572
336,398
288,163
1,176,134

441,108
415,512584,710
1,441,331

1,420,538
54,140110,548
238,334
281,324(53,692)
2,051,193
19,435,468
48,538,822

1,448,245
45,441
120,483
206,197
350,241(43,424)
2,127,185
22,591,980
57,955,367

(Thousands of yen)
At January 31, 2013

At January 31, 2014

LIABILITIES
I. Current Liabilities:
Notes and accounts payable

3,864,039

4,518,251

Short-term borrowings

1,389,610

395,21226,327

1,004,953

Accrued account payable

3,179,388

3,401,135

Income taxes payable

1,134,047

1,155,862

Accrued bonuses to employees

606,257

782,653

Returned goods adjustment reserve

44,82457,318Other current liabilities

1,371,445

1,503,546

Total Current Liabilities

11,615,940

12,818,934

Long-term borrowings

2,204,365

2,011,503

Deferred tax liabilities

1,530,631

2,356,706

319,324

287,276

389,764

323,894

113,425

175,438

Total Long-Term Liabilities

4,557,510

5,154,818

Total Liabilities

16,173,451

17,973,753

Capital stock

5,199,597

5,199,597

Additional paid-in capital

5,180,246

5,180,246

Retained earnings

22,686,099

26,929,960

Treasury stock(450,289)(455,960)

Total Shareholders’ Equity

32,615,653

36,853,843

26,64430,520(970,653)

2,240,472(944,008)

2,270,992

693,726

856,777

32,365,371

39,981,614

48,538,822

57,955,367

Current portion of long-term loans payable

II. Long-Term Liabilities:

Employees’ retirement benefits
Retirement benefits for directors andcorporate auditors
Other long-term liabilities

NET ASSETS
I. Shareholder’s Equity:

II. Valuation and Translation Adjustments:
Net unrealized gains on securities
Foreign currency translation adjustment
Total Valuation and Translation Adjustments
III. Minority Interests
Total Net Assets
Total Liabilities, Minority Interests and Net
Assets9(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)

I. Net Sales
II. Cost of Sales
Gross profit
Reversal of reserve for returned products
Transfer to reserve for returned products
Adjusted gross profit
III. Selling, General and Administrative Expenses
Operating Income
IV. Other Income:Interest income
Dividend income
Foreign exchange gains
Equity in earnings of non consolidated subsidiaries
and affiliates
Refund of consumption tax
Other
Total Other Income
V. Other Expenses:
Interest expense
Sales discounts
Other
Total Other Expenses
Ordinary Income
VI. Extraordinary Income:Gain on sales of property
Gain on negative goodwill
Total Extraordinary Income
VII. Extraordinary Loss:
Loss on sales of property
Loss on disposal of property
Total Extraordinary Loss
Income before Income Taxes
Income Taxes
Adjustment for Corporate Tax
Total Corporate Income Tax
Income before Minority Interests
Less: Minority Interest in Net Income ofConsolidated Subsidiaries
Net Income

10Year Ended
January 31, 2013
65,075,433
37,331,435
27,743,997
60,19043,42527,760,762
20,674,528
7,086,233(Thousands of yen)
Year Ended
January 31, 2014
77,465,007
42,992,337
34,472,670
47,12355,431
34,464,362
24,098,736
10,365,625

50,361
19,096
304,749

105,184
19,051410,098

51,627

58,102

52,121
178,257
656,214

99,914
281,886
974,238

76,232
231,955
44,757352,945
7,389,502

43,350258,685
35,547
337,583
11,002,280

7,170
－
7,170

5,345
3,480
8,825

285
26,70526,9907,369,683
2,128,638
526,538
2,655,176
4,714,506

2,616
21,64024,257
10,986,848
3,077,667
705,869
3,783,537
7,203,311

140,713217,640

4,573,793

6,985,670

(Consolidated Statements of Comprehensive Income)Year Ended
January 31, 2013
Net income before adjusted minority interests
incomeOther Comprehensive Income
Valuation difference on
available-for-salesecurities
Foreign currency translation adjustment
Total Other Comprehensive Incomes
Comprehensive Income(Breakdown)Comprehensive income on parent company
Comprehensive income on minority interests

11(Thousands of yen)
Year Ended
January 31, 2014

4,714,506

7,203,311

16,571

3,875

1,498,016
1,514,587
6,229,094

3,298,595
3,302,470
10,505,781

6,006,229
222,864

10,200,672
305,109(3) Statement of Changes in Consolidated Shareholders’ Equity
Year Ended January 31, 2013
(Thousands of yen)
Shareholders’ equity
Common stock
Balance at the
beginning of the period
Changes during theperiodDividends fromsurplus
Net income
Acquisition oftreasury stock
Changes in items
other thanshareholders equity(net)
Total changes during
the period
Balance at the end ofcurrent period

5,199,597

CapitalsurplusRetainedearnings

Treasurystock

5,180,246

19,873,527(448,680)

29,804,691(1,761,221)(1,761,221)

4,573,793

4,573,793(1,608)(1,608)－－2,812,571(1,608)2,810,962

5,199,597

5,180,246

22,686,099(450,289)

32,615,653

Minority
interests

Total net
assets

Accumulated other comprehensive income
Valuation
Total
Foreigndifference on
accumulated
currency
other
other
translation
marketable
comprehensive
adjustment
securities
incomeBalance at the
beginning of the period
Changes during theperiodDividends fromsurplus
Net income
Acquisition oftreasury stock
Changes in items
other thanshareholders equity(net)
Total changes during
the period
Balance at the end ofcurrent period

Totalshareholders’equity10,073(2,386,518)(2,376,445)

507,436

27,935,682(1,761,221)
4,573,793(1,608)

16,571

1,415,865

1,432,436

186,289

1,618,725

16,571

1,415,865

1,432,436

186,289

4,429,688

26,644(970,653)(944,008)

693,726

32,365,371

12

Year Ended January 31, 2014
(Thousands of yen)
Shareholders’ equity
Common stock
Balance at the
beginning of the period
Changes during theperiodDividends fromsurplus
Net income
Acquisition oftreasury stock
Changes in items
other thanshareholders equity(net)
Total changes during
the period
Balance at the end ofcurrent period

5,199,597

CapitalsurplusRetainedearnings

Treasurystock

5,180,246

22,686,099(450,289)

32,615,653(2,741,809)(2,741,809)

6,985,670

6,985,670(5,671)(5,671)－－

4,243,861(5,671)4,238,189

5,199,597

5,180,246

26,929,960(455,960)

36,853,843

Minority
interests

Total net
assets

Accumulated other comprehensive income
Valuation
Total
Foreigndifference on
accumulated
currency
other
other
translation
marketable
comprehensive
adjustment
securities
incomeBalance at the
beginning of the period
Changes during theperiodDividends fromsurplus
Net income
Acquisition oftreasury stock
Changes in items
other thanshareholders equity(net)
Total changes during
the period
Balance at the end ofcurrent period

Totalshareholders’equity26,644(970,653)(944,008)

693,726

32,365,371(2,741,809)
6,985,670(5,671)

3,875

3,211,126

3,215,001

163,051

3,378,053

3,875

3,211,126

3,215,001

163,051

7,616,243

30,5202,240,472

2,270,992

856,777

39,981,614

13

(4) Consolidated Statements of Cash Flows
Year Ended
January 31, 2013
I. Cash Flows from Operating Activities:
Income before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in accrued bonuses to
employees
Increase (decrease) in employees’ retirement
benefits
Increase (decrease) in directors’ retirement
benefits
Interest and dividend income
Equity in (gains) losses of non consolidated
subsidiaries and affiliates
Interest expense
Foreign exchange loss (gain)
Loss (gain) on sale of fixed assets
Loss on disposal of fixed assets
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in account payable
Increase (decrease) in consumption tax payable
Decrease (increase) in bankruptcy claims
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net Cash Provided by Operating Activities

14(Thousands of yen)
Year Ended
January 31, 2014

7,369,683
1,626,158
190,797

10,986,848
1,865,351
205,951(105,298)(707)

16,454

163,978

6,195(39,548)

34,465(65,870)(69,458)(124,236)(51,627)(58,102)

76,232(250,863)(6,885)26,705
192,375
585,635(342,242)
103,418
89,228
9,907(95,343)
9,405,538
82,308(78,035)(1,753,175)
7,656,637

43,350(377,564)(2,728)21,640(587,612)(480,119)(154,424)(1,534)(123,120)
8,698(218,452)
11,061,797
133,527(23,705)(3,241,602)
7,930,017

Year Ended
January 31, 2013
II. Cash Flows from Investing Activities:
Acquisition of property, plant and equipment
Proceeds from sales of property, plant andequipment
Acquisition of intangible assets
Acquisition of investment securities
Purchase of investments in subsidiaries
Payment to life insurance fund for directors
Proceeds from cancellation of life insurance fundfor directors
Loans advanced
Collection of loan receivables
Payment for lease deposits
Proceeds from recovery of lease deposits
Other
Net Cash Used in Investing Activities
III. Cash Flows from Financing Activities:
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from long-term loans payable
Repayment of long-term debt
Payment of cash dividends
Payment of cash dividends to minority
shareholders
Acquisition of treasury stock
Other
Net Cash Used in Financing Activities
IV. Effect of Exchange Rate Changes on Cashand Cash Equivalents
V. Net Change in Cash and Cash Equivalents
VI. Cash and Cash Equivalents at Beginning of
the Period
VII. Cash and Cash Equivalents at End of the
Period15(Thousands of yen)
Year Ended
January 31, 2014

(1,745,897)(3,223,309)

19,562

15,969(112,278)(1,969)(9,102)(453,270)(1,825)(87,300)(8,754)4,700

41,492(976)
1,479(27,690)
34,366(10,972)(1,848,777)(1,995)
1,678(17,606)
12,193(71,735)(3,794,463)

9,513,700(10,394,000)
1,200,000(1,656,900)(1,761,796)

7,079,810(8,153,100)
752,444(29,688)(2,740,876)(36,574)(51,276)(1,608)(12,565)(3,149,745)(5,671)(14,923)(3,163,282)

622,582

1,556,008

3,280,696

2,528,280

7,293,629

10,574,326

10,574,326

13,102,606

(5) Notes Relating to Consolidated Financial Statements(Notes Regarding Going Concern Assumptions)Not applicable.
(Change in Accounting Policy which is Difficult to Distinguish from a Change in Accounting
Estimate)
Following a revision of the Corporation Tax Law, from the consolidated accounting year underreview, the Company and its consolidated subsidiaries located in Japan have changed thedepreciation method for property, plant and equipment acquired on and after February 1, 2013 to amethod in accordance with the Corporation Tax Law after revision.
The effect this change has on the operating income, ordinary income, and Income before
income taxes for the term under review is negligible.
(Segment Information)
1. Summary of Reporting Segments
In respect of the Company’s reporting segments, these are, of the constituent units in the Group,
those for which separate financial information are available and those that are the subject of regularexamination by the board of directors to make decisions on management resource allocation andassessment of performance.
The Company separates sales of principally nursing products into domestic and overseas sales
and, in addition, is engaged in providing sales and services relating to health care and nursing care,services relating to supporting childcare. The Company has established business headquarters
along products, services, and regions.
For this purpose, the Company is configured by segments by products and services and byregions and constituted by 4 reporting segments, namely, “Domestic Baby and Mother Care
Business”, “Child-rearing Support Services”, “Health Care and Nursing Care Business” and“Overseas Business”.
The Company’s reporting segment types are as follows.
(i) Domestic Baby and Mother Care Business
It is engaged in the manufacture and sales of childcare products and feminine products in Japan.
(Principal Products) Breastfeeding-related products, weaning-related products, skincare products,
wet tissues, baby foods, baby outing products, feminine care products (supplements, maternity
products), other(ii) Child-rearing Support Services
It is engaged in provision of child-rearing support services in Japan.
(Principal Services) Operation and contracting of nursery facilities, operation of preschool
educational facilities, babysitter dispatch services, other(iii) Health Care and Nursing Care Business
It is engaged in the manufacture and sales of health care products and nursing care products as wellas provision of nursing care services in Japan.
(Principal Products) Incontinence protection products, skincare products, wet tissues, wheel chairs,
products for nursing care facilities, nursing care support services, other(iv) Overseas Business
It is engaged in the manufacture and sale of principally child-rearing products and feminine careproducts for overseas countries.
162. Calculation Method for the Values in Segmental Sales, Income or Losses, Assets and Other Items
The methodology adopted in calculating the segmental sales, profits or losses, assets and otheritems is generally the same as in “Basis for preparing Consolidated Financial Statements.”
3. Information Regarding Net Sales and Income & Loss in Each Report Segment
Previous fiscal year (February 1, 2012–January 31, 2013)(Thousands of yen)AmountAdjustment
Accounted ons
Quarterly(Note) 2
Consolidated(Note) 3 Statements of(Note) 4
Income(Note) 5(Note) 6

Report Segment
HealthDomestic
Child-rearing Care andBaby andSupportNursingMother Care
Services
Care
Business
Business

Overseas
Business

Sub Total

Other(Note) 1

Total

Sales
Sales tooutsidecustomers
Total

23,882,457

6,388,210 6,699,523 26,964,262 63,934,453

1,140,980 65,075,433－

65,075,433

23,882,457

6,388,210 6,699,523 26,964,262 63,934,453

1,140,980 65,075,433－

65,075,433

Segment income

3,379,626

6,387,289 10,162,361

141,748 10,304,110 (3,217,876)

7,086,233

Segment asset

10,245,735

1,200,233 3,588,461 22,380,308 37,414,739

1,038,518 38,453,258 10,085,564

48,538,822

Other Items
Depreciation andamortization(Note) 7
Amortization ofGood Will
Increasein
Tangible Fixed
AssetsandIntangible Fixed
Assets(Note) 8

182,638

212,807435,649

31,122

128,877

789,235

1,384,883

53,005

1,437,889

188,268

1,626,158

9,812

3,720

－

177,264

190,797－

190,797－

190,797244,752

47,36889,5001,480,688

1,862,310

27,1791,889,489

155,887

2,045,377

Current fiscal year (February 1, 2013–January 31, 2014)(Thousands of yen)
Report Segment
HealthDomestic
Child-rearing Care andBaby andSupportNursingMother Care
Services
Care
Business
Business

Overseas
Business

Sub Total

Other(Note) 1

Total

AmountAdjustment
Accounted ons
Quarterly(Note) 2
Consolidated(Note) 3 Statements of(Note) 4
Income(Note) 5(Note) 6

Sales
Sales tooutsidecustomers
Total

24,451,183

6,599,506 6,721,454 38,540,954 76,313,096

1,151,911 77,465,007－

77,465,007

24,451,183

6,599,506 6,721,454 38,540,954 76,313,096

1,151,911 77,465,007－

77,465,007

Segment income

3,411,850

204,390 14,176,682 (3,811,056)

10,365,625

Segment asset

10,372,814

Other Items
Depreciation andamortization(Note) 7
Amortization ofGood Will
Increasein
Tangible Fixed
AssetsandIntangible Fixed
Assets(Note) 8

176,026

212,061 10,172,354 13,972,292

1,214,589 3,497,752 32,418,432 47,503,588

1,085,308 48,588,896

9,366,470

57,955,367

376,917

29,571

108,709

1,094,334

1,609,533

47,067

1,656,600

208,751

1,865,351

－

3,720

－

202,231205,951－

205,951－

205,951

508,748

23,146

110,5732,619,325

3,261,794

47,3453,309,139

266,438

3,575,578

17

Notes:1. “Other” represents a business segment not included in the reporting segments and principally covers manufacture and sales by manufacturingsubsidiaries of the company for sales outside the Group.
2. Adjustments to the segment income are all unallocable operating expense4s and principally are expenses relating to the company’s administrative
areas.
3. Segment asset adjustments are all company assets and consist principally of investments of surplus of the parent company (Cash and Deposits),
long term investment assets (Investment Securities and the Like) and assets relating to the administrative area.
4 Depreciation adjustments is depreciations relating the entire company assets。
5 Tangible fixed assets and intangible assets relate to all company assets。
6.Segment income has been adjusted with the operating income in the consolidated financial statements
7.Amortization relating to long term pre-paid expenses are included in the depreciation expenses。
8.Increases in tangible fixed assets and intangible fixed assets include increases in long term pre-paid expenses。

(Per Share Information)

Net Assets per ShareNet Income per SharePrevious fiscal year
(February 1, 2012–January 31,
2013)¥791.26¥114.27

Current fiscal year
(February 1, 2013–January 31,
2014)¥977.50¥174.53(Note) 1. With respect to Net Income for the Term after Adjustments for Latent Shares, there are no latent shares existing, thus, has
not been included.
2. The basis for the calculation of the Net Income per Share is as follows.

Net Income (¥ thousands)
Amount not Attributable to Ordinary
Shareholders (¥ thousands)
Net Income Relating to Ordinary
Shares (¥ thousands)
Average Number of Shares during theTerm (shares)

Previous fiscal year
(February 1, 2012–January 31,
2013)
4,573,793

Current fiscal year
(February 1, 2013–January 31,
2014)
6,985,670－－

4,573,793

6,985,670

40,027,582

40,026,022

3. The Group conducted a stock split at the ratio of 2 shares for every 1 share of common shares. The effective date of thestock split was August 1, 2013. Net Assets per Share and Net Income per Share were calculated assuming that the stock
split was performed at the beginning of the fiscal year ended January 31, 2014.

(Material Subsequent Events)
Not applicable.

18