Note: This document is a translation of the original Japanese version and provided for reference purposes only. In theevent of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results
for the Six Months Ended September 30, 2023 (Japanese GAAP)
November 7, 2023

Company name:
Stock code:

Medical System Network Co., Ltd.
4350

Listing: Tokyo Stock Exchange
URL: https://www.msnw.co.jp/eng/

Representative:
Contact:
Tel:

Inao Tajiri, President and Representative Director
Eiji Hirashima, Executive Officer, Director of Finance and Director+81-11-613-7750

Scheduled date for quarterly report submission:
Scheduled date for dividend payment:
Preparation of supplemental explanatory materials:
Results briefing to be held:

November 9, 2023
December 11, 2023
Yes
Yes(for institutional investors and analysts)(Amounts of less than one million yen are rounded down)

1. Consolidated Financial Results for the Six Months Ended September 30, 2023
(April 1 to September 30, 2023)(1) Consolidated operating results
Net sales
Six Months ended
September 30, 2023
Six Months ended
September 30, 2022

EBITDA(Percentages indicate YoY change)
Profit attributable toOrdinary profit
owners of parent

Operating profit

Million yen%

Million yen% Million yen

56,461

5.9

3,247

28.0

53,3402.2

2,537(22.0)%

Million yen%

Million yen

%

1,712

55.7

1,692

36.2

861

71.5

1,099

(40.9)

1,242(44.4)

502(64.9)

Note: Comprehensive income for the six months ended September 30, 2023 was 892 million yen (70.3% YoY), and comprehensive income for thesix months ended September 30, 2022 was 523 million yen ((63.9)% YoY)
Note: EBITDA = (operating profit + depreciation + goodwill amortization)

Earnings per share
Six Months ended
September 30, 2023
Six Months ended
September 30, 2022

Diluted earnings
per share

Yen

Yen

28.54

－

16.64

－

Note: Please refer to “Appropriate use of earnings forecast and other special notes 2” for details of earnings per share calculations.

(2) Consolidated financial position
Total assets
As of
September 30, 2023
As ofMarch 31, 2023

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

66,255

15,19722.9

502.1866,223

14,48821.8

478.86

Reference: Shareholders’ equity amounted to 15,155 million yen as of September 30, 2023 and 14,451 million as of March 31, 2023.
Note: Please refer to “Appropriate use of earnings forecast and other special notes 2” for details of shareholders’ equity, equity ratio, and net
assets per share calculations.

2. Dividends
Dividends per share
End of Q1
Fiscal year ended
March 31, 2023
Fiscal year ending
March 31, 2024
Fiscal year ending
March 31, 2024 (forecast)End of Q2

End of Q3

Year-end

Total

Yen

Yen

Yen

Yen

Yen

－

6.00

－

6.00

12.00

－

6.00
－

6.00

12.00

Note: Revisions to the Company’s most recently announced dividend forecast: Yes

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2024
(April 1, 2023 to March 31, 2024)
Net sales

Full-year

EBITDA

Operating profit(Percentages indicate YoY change)
Profit attributable
Earnings
Ordinary profit
to owners ofper share
parentMillion yen%

Million yen%

Million yen%

Million yen%

Million yen%

Yen

113,800

3.9

6,600

7.8

3,500

10.6

3,450

2.8

1,650

2.4

54.67

Note: Revisions to the Company’s most recently announced consolidated earnings forecast: Yes
Note: EBITDA = (operating profit + depreciation + goodwill amortization)

*Notes(1) Changes in significant subsidiaries during the period under review: None
(Transfers of specified subsidiaries associated with changes in the Company’s scope of consolidation)
Newly added:
None
Excluded:None(2) Distinctive accounting methods applied when preparing quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates and retrospective restatements
1. Accounting policy changes due to accounting standard revisions, etc.:
None
2. Other accounting policy changes:
None
3. Changes in accounting estimates:
None
4. Retrospective restatements:
None(4) Number of shares outstanding (common stock)
1. Shares outstanding(including treasury
As of September 30, 2023
stock)

30,642,600

As of March 31, 2023

30,642,600

2. Treasury shares
outstanding

As of September 30, 2023

464,055

As of March 31, 2023

464,055

3. Period-average shares
outstanding (cumulative
quarterly figures)

Six months ended
September 30, 2023

30,178,545

Six months ended
September 30, 2022

30,178,545

Note: Please refer to “Appropriate use of earnings forecast and other special notes 2” for details of calculation method regarding period-end
treasury stock numbers and period-average shares outstanding (cumulative quarterly figures).

*The financial information in this quarterly report is not subject to review by certified public accountants or auditing firms.
*Appropriate use of earnings forecast and other special notes
1. The earnings forecasts and other forward-looking statements contained in this document are based on information
currently available to the Company, and certain assumptions it considers reasonable, but are not intended to be a promisethat the Company will achieve. Actual results may vary materially from forecasts due to a variety of factors. For mattersconcerning earnings forecasts, please refer to page 4 of the attached materials “1. Qualitative Information on Quarterly
Financial Performance (3) Explanation of Consolidated Earnings Forecasts and Other Projections.”
2. In the quarterly consolidated balance sheets, the Company's shares held as trust assets of the Board Benefit Trust (BBT)
are recorded as treasury stock. They are included in treasury stock in calculations of earnings per share, equity ratio, net
assets per share, shareholders’ equity, period-end treasury stock numbers, and period-average shares outstanding(cumulative quarterly figures).

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2023

Accompanying Materials – Contents
1. Qualitative Information on Quarterly Financial Performance .................................................. 2(1) Explanation of Operating Results ........................................................................ 2(2) Explanation of Financial Position ......................................................................... 3(3) Explanation of Consolidated Earnings Forecasts and Other Projections ....................................... 4
2. Quarterly Consolidated Financial Statements and Primary Notes.............................................. 5(1) Consolidated Balance Sheet ............................................................................ 5(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ..................... 7(3) Consolidated Statement of Cash Flows ................................................................... 9(4) Notes to Quarterly Consolidated Financial Statements ..................................................... 11(Notes to going concern assumptions) .................................................................... 11(Notes in the event of significant changes in shareholders’ equity) ............................................ 11(Segment information) .................................................................................. 111

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2023

1. Qualitative Information on Quarterly Financial Performance(1) Explanation of Operating Results
In the six months ended September 30, 2023, the prescription unit price decreased in the Community Pharmacy
Business as the transitional measures for community support premiums came to an end. However, the number ofprescriptions filled increased, owing to lessened concerns about visiting doctors with the downgrading of COVID-19 toa Class 5 infectious disease, the outbreak of multiple respiratory infections, and the utilization of digital technologies,
such as the transmission of prescriptions using LINE, and patient follow-up during medication periods. In the
Pharmaceutical Network Business, the number of new network affiliates fell short of expectations but still grew steadily,leading to an increase in the total value of pharmaceuticals orders placed by network affiliates. On the expense front,
the Company worked on company-wide productivity-improvement measures in efforts to contain costs. As a result, inthe six-month period under review, net sales amounted to 56,461 million yen (+5.9% YoY), operating profit 1,712 million
yen (+55.7% YoY), ordinary profit 1,692 million yen (+36.2% YoY), and profit attributable to owners of parent 861 million
yen (+71.5% YoY).
Results by segment were as follows. Sales in each segment include intersegment sales.
From the first quarter of the fiscal year under review, the costs of the business development division, which werepreviously allocated to the Leasing and Facility-related Segment, have been transferred to the Community Pharmacy
Network Segment, as the division will focus on the development of the Company’s community pharmacies (the amounttransferred in the six-month period under review was 78 million yen).
1) Community Pharmacy Network Segment
In the Community Pharmacy Network Segment, we aim to provide value throughout the entire pharmaceutical supply
chain. Our businesses include community pharmacy operations, a pharmaceutical network to support pharmacy
management, pharmaceutical manufacture and marketing, and support services to help general pharmacies transition
into family pharmacies using the LINE communication app.
In the Community Pharmacy Business, the prescription unit price dropped as the transitional measures for community
support premiums came to an end. Meanwhile, the number of prescriptions filled grew, owing to diminished concerns
about visiting healthcare facilities with the downgrading of COVID-19 to a Class 5 infectious disease, the outbreak ofseveral respiratory infections, and the utilization of digital technologies, such as the transmission of prescriptions using
LINE, and patient follow-up during medication periods. Further, in the six-month period under review, the Group opened
eight new community pharmacies, including four in medical malls. As of September 30, 2023, the Group had 434
community pharmacies, one care plan center, and 10 drug/cosmetics stores.
In the Pharmaceutical Network Business, the number of new network affiliates fell short of expectations but still grewsteadily, and the total value of pharmaceuticals orders placed by network affiliates expanded. As of September 30, 2023,
the number of pharmaceutical network members totaled 9,374 (up 462 from March 31, 2023), broken down to 434
Group pharmacies and 8,940 affiliates.
In the Manufacture and Market Pharmaceutical Business, as of September 30, 2023, the Company’s product lineup
included 98 products spanning 47 active pharmaceutical ingredients. While the Company stopped accepting orders forsome products due to the impact of shipment adjustments, the number of new partner pharmacies steadily grew in thesecond quarter of the fiscal year under review, with the total number of partner pharmacies reaching 3,894 as of
September 30, 2023, up 663 year-on-year.
In the Digital Shift Business, the number of pharmacies that have adopted the Group’s services as of September 30,
2023 totaled 4,195 (up 804 compared with March 31, 2023).
As a result, segment sales for the six months ended September 30, 2023 were 53,765 million yen (+5.9% YoY), andoperating profit was 2,947 million yen (23.6% YoY).
2) Leasing and Facility-related Segment
In the Leasing and Facility-related segment, sales were 1,687 million yen (+0.8% YoY) and operating profit was 69
million yen (versus an operating loss of 65 million yen in the same period of the previous year). Growth in sales and2Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2023

profit were attributed to the transfer of the business development division costs, which were previously allocated to thissegment, to the Community Pharmacy Network Segment, as the division will now focus on the development of theGroup’s community pharmacies, and the revision of staff allocation and advertising expenses for the Wisteria serviced
residence for the elderly.
As of September 30, 2023, Wisteria Senri-Chuo had an occupancy rate of 67.1% (55 out of 82 units occupied), andWisteria Minami-Ichijo an occupancy rate of 67.2% occupancy rate (78 out of 116 units occupied). The overall
occupancy rate at the five serviced residences for the elderly stood at 82.1%. The Group will focus on meeting thechanging needs of residents and cultivate new sales routes, and continue to conduct aggressive sales activities.
3) Meal Catering Segment
In the Meal Catering Segment, while sales grew owing to a revision of the contract unit price, the gross profit margin
declined due to soaring purchase prices. As a result, segment sales were 1,189 million yen (+4.8% YoY), and theoperating loss was 23 million yen (versus an operating loss of 33 million yen in the same period of the previous year).
4) Other Segment
In the Other segment, the Group provides home-visit nursing care. While the number of home visits rose, the Group
incurred upfront expenditures due to an increase in headcount. As a result, sales were 155 million yen (+2.8% YoY)
and the operating loss was 20 million yen (versus an operating loss of 10 million yen in the same period of the previousyear).

(2) Explanation of Financial Position
As of September 30, 2023, total assets amounted to 66,255 million yen, up 31 million yen from March 31, 2023.
Current assets amounted to 19,668 million yen, down 596 million yen from March 31, 2023. This was primarily due
to a decline in consumption taxes refund receivable included in other. Non-current assets were 46,586 million yen, up
628 million yen from March 31, 2023, mainly reflecting an increase in leased assets, net, included in other, net, underproperty, plant and equipment, despite a decline in goodwill.
Total liabilities were 51,057 million yen, down 677 million yen from March 31, 2023. Current liabilities totaled 22,158
million, up 808 million yen from March 31, 2023. This was mainly due to increases in accounts payable-trade and shortterm borrowings. Non-current liabilities were 28,899 million yen, down 1,486 million yen from March 31, 2023. The
decrease here was mainly attributed to a decline in long-term borrowings.
Net assets were 15,197 million yen, up 708 million yen from March 31, 2023. The main reason for this was an increase
in retained earnings.
(Status of Cash flows)
Cash and cash equivalents on a consolidated basis as of September 30, 2023 amounted to 7,613 million yen, down
497 million yen from March 31, 2023. The status of cash flows during the six months ended September 30, 2023 is asfollows.
(Cash flows from operating activities)
Net cash provided by operating activities totaled 3,611 million yen (versus 1,701 million yen provided in the same
period of the previous fiscal year). This was primarily due to inflows of 1,705 million yen in profit before income taxes
and 972 million yen in depreciation.
(Cash flows from investing activities)
Net cash used in investing activities came to 1,209 million yen (versus 902 million yen used in the same period of theprevious fiscal year). The main factor was an outflow of 968 million yen in purchase of property, plant, and equipment.

3

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2023

(Cash flows from financing activities)
Net cash used in financing activities amounted to 2,899 million yen (versus 2,226 million yen used in the same periodof the previous fiscal year). This was mainly attributable to an outflow of 2,630 million yen in repayments of long-termborrowings.

(3) Explanation of Consolidated Earnings Forecasts and Other Projections
The Company has revised the consolidated earnings forecast released on May 9, 2023. For details, please see the“Notice Regarding Differences between Forecasts and Actual Consolidated Operating Results for the Six Months Ended
September 30, 2023, Revision of Consolidated Operating Results Forecasts for Fiscal Year Ending March 2024,
Dividends from Surplus and Revision of the Year-End Cash Dividends Forecast” released today (November 7, 2023).

4

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2023

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheet
Fiscal year ended
March 31, 2023
(as of March 31, 2023)
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Unearned revenue from sale of accounts
receivable
Purchased receivables - dispensing fees
Merchandise
Raw materials
Work in process
Supplies
Other
Allowance for doubtful accounts
Total current assets(Millions of yen)Six months ended
September 30, 2023
(as of September 30, 2023)

8,141
3,437

7,643
3,676

1,039

1,078

463
5,160
17
2
74
1,939
(11)

408
5,595
17
27
79
1,152
(11)

20,265

19,668

13,164
8,916
165
4,814

13,285
9,031
145
5,665

27,06028,128

11,183548
74

10,622575
74

11,807

11,272

159
3,222
2,926
802
(19)

177
3,303
2,927
797
(19)

7,090

7,185

45,95846,586

66,223

66,255

Non-current assets
Property, plant and equipment
Buildings and structures, net
LandConstruction in progress
Other
Total property, plant and equipment
Intangible assets
Goodwill
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

5Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2023

(Millions of yen)Six months ended
September 30, 2023
(as of September 30, 2023)

Fiscal year ended
March 31, 2023
(as of March 31, 2023)
Liabilities
Current liabilities
Accounts payable – trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Provision for retirement benefits for directors(and other officers)
Provision for share awards for directors (andother officers)
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets

6

9,937
1,016
5,152
600
1,569

10,135
1,136
4,905
687
1,630

2

12

3,071

3,651

21,34922,15820,226

17,843

637

648

243

260

4,157
5,121

4,299
5,847

30,38528,89951,73551,0572,128
1,182
11,606
(326)

2,128
1,182
12,284(326)

14,59015,268

(2)

10

2
(139)

2
(126)

(139)

(113)

37

42

14,48815,197

66,223

66,255

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2023

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income

Net sales
Cost of sales

Six months ended
September 30, 2022
(from April 1, 2022
to September 30, 2022)
53,34031,024(Millions of yen)Six months ended
September 30, 2023
(from April 1, 2023
to September 30, 2023)
56,46133,008Gross profit

22,31523,453

Selling, general and administrative expenses

21,215

21,740Operating profit

1,099

1,712

Non-operating income
Interest and dividend income
Outsourcing service income
Rental income from facilities
Subsidy income
Miscellaneous income

3
35
71
176
38

3
33
75
28
39

Total non-operating income

325

179

Loss on sale of receivables
Interest expenses
Miscellaneous losses

27
138
16

28
157
13

Total non-operating expenses

182

199

1,242

1,692

7
－

0
22

7

22

47
18
13
6

1
5
1
0

85

9

Profit before income taxes

1,165

1,705

Income taxes - current
Income taxes - deferred

629
23

852
(13)

Total income taxes

653

839

Profit512

866

Profit (loss) attributable to non-controlling interests

10

5

Profit (loss) attributable to owners of parent

502

861

Non-operating expenses

Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of businesses
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment losses
Loss on store closings
Other
Total extraordinary losses

7Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2023

Consolidated Statement of Comprehensive Income

ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans, net oftax
Total other comprehensive income

Six months ended
September 30, 2022
(from April 1, 2022
to September 30, 2022)
512(Millions of yen)Six months ended
September 30, 2023
(from April 1, 2023
to September 30, 2023)
866

0

12

1

0

9

12

11

25

Comprehensive income

523

892

(Breakdown)Comprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests

513

887

10

5

8

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2023

(3) Consolidated Statement of Cash Flows(Millions of yen)Six months ended
September 30, 2023
(from April 1, 2023
to September 30, 2023)

Six months ended
September 30, 2022
(from April 1, 2022
to September 30, 2022)
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for
directors (and other officers)
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for shareawards for directors (and other officers)
Increase (decrease) in provision for retirement
benefits for directors (and other officers)
Increase (decrease) in retirement benefit liability
Interest and dividend income

1,165
872
18
565
76

1,705
972
5
561
60

(30)

10

7

0

16

16

20

11

175
(3)

161
(3)

Interest expenses
Loss (gain) on sale of non-current assets

138
(7)

134
(0)

Loss on retirement of non-current assets
Loss (gain) on sale of businesses
Decrease (increase) in trade receivables
Decrease (increase) in unearned revenue fromsale of accounts receivable
Decrease (increase) in purchased receivables dispensing fees
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued consumption
taxes
Other

47
－
(437)

1
(22)
(239)

(26)

(39)

11

55

(456)
150

(470)
198

(98)

772

205

490

Subtotal

2,410

4,385

Interest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating
activities

2
(138)
(572)

2
(132)
(644)

1,701

3,611

9

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2023

(Millions of yen)Six months ended
September 30, 2023
(from April 1, 2023
to September 30, 2023)

Six months ended
September 30, 2022
(from April 1, 2022
to September 30, 2022)
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant andequipment
Purchase of intangible assets
Proceeds from sale of businesses
Loan advances
Proceeds from collection of loans receivable
Payments of guarantee deposits
Proceeds from refund of guarantee deposits
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings
Repayments of lease obligations
Dividends paid
Net cash provided by (used in) financing
activities
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

10

(670)

(968)

22

0

(156)
－
(0)
3
(49)
30
(81)

(122)
31
(1)
1
(132)
35
(54)

(902)

(1,209)500(2,392)
(120)
(213)

120
(2,630)
(205)
(182)

(2,226)(2,899)(1,427)

(497)

8,171

8,111

6,743

7,613

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2023

(4) Notes to Quarterly Consolidated Financial Statements(Notes to going concern assumptions)None to be reported.
(Notes in the event of significant changes in shareholders’ equity)
None to be reported.
(Segment information)
I. Six months ended September 30, 2022 (from April 1, 2022 to September 30, 2022)
Information on sales and profit (loss) by reporting segment
Reporting segment
Community Leasing andFacilityPharmacy
relatedNetwork

Meal
Catering

Other

Total

(Millions of yen)Amounts on
consolidated
Adjustments
statement of(Note 1)income(Note 2)

Net sales
Sales to externalcustomers
Intersegment sales ortransfers

50,785

1,268

1,134

151

53,340－53,340

7

404

0

－

412

(412)

－

Total

50,792

1,673

1,135

151

53,752(412)

53,340

Segment profit (loss)

2,384

(65)

(33)

(10)

2,275

(1,175)

1,099

Notes: 1. The negative 1,175 million yen adjustment to segment profit (loss) includes 145 million yen in elimination ofintersegment transactions and 1,321 million yen in companywide expenses not allocated to reporting segments.
Companywide expenses mainly refer to general expenses that do not belong to reporting segments.
2. Segment profit (loss) is adjusted with operating profit (loss) in the quarterly consolidated statement of income.
II. Six months ended September 30, 2023 (from April 1, 2023 to September 30, 2023)
1.Information on sales and profit (loss) by reporting segment
Reporting segment
Community Leasing andFacilityPharmacy
relatedNetwork

Meal
Catering

Other

Total

(Millions of yen)Amounts on
consolidated
Adjustments
statement of(Note 1)income(Note 2)

Net sales
Sales to externalcustomers
Intersegment sales ortransfers

53,741

1,375

1,189

155

56,461－

56,461

24

311

0

－

336

(336)

－

Total

53,765

1,687

1,189

155

56,797(336)

56,461

Segment profit (loss)

2,947

69

(23)

(20)

2,974

(1,261)

1,712

Notes: 1. The negative 1,261 million yen adjustment to segment profit (loss) includes 130 million yen in elimination ofintersegment transactions and 1,392 million yen in companywide expenses not allocated to reporting segments.
Companywide expenses mainly refer to general expenses that do not belong to reporting segments.
2. Segment profit (loss) is adjusted with operating profit (loss) in the quarterly consolidated statement of income.
2. From the first quarter of the fiscal year under review, the costs of the business development division, which werepreviously allocated to the Leasing and Facility-related Segment, have been transferred to the Community
Pharmacy Network Segment, as the division will focus on the development of the Company’s community
pharmacies (the amount transferred in the six-month period under review was 78 million yen).

11