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 Fiscal Year Ended March 31, 2022 (Japanese GAAP)May 6, 2022

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 Ordinary General Meeting of Shareholders: June 22, 2022
Scheduled date for dividend payment:
June 23, 2022
Scheduled date for annual securities report submission:
June 23, 2022
Preparation of supplemental explanatory materials:
Yes
Results briefing to be held:
Yes (for institutional investors and analysts)(Amounts of less than one million yen are rounded down)
1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 to March 31, 2022)(1) Consolidated operating results
Net sales
Fiscal year ended

EBITDA

Million yen%

Million yen

Operating profit% Million yen%(Percentages indicate YoY change)
Profit attributable toOrdinary profit
owners of parent
Million yen%

Million yen%

March 31, 2022

106,685

2.3

6,708

4.4

3,852

12.3

4,313

24.0

2,394

8.9

March 31, 2021

104,257

(0.9)

6,426

38.3

3,429

112.3

3,479

123.0

2,198

－

Note: Comprehensive income:Fiscal year ended March 31, 2022
Fiscal year ended March 31, 2021
Note: EBITDA = (operating profit + depreciation + goodwill amortization)

2,386 million yen (+8.9% YoY)
2,191 million yen (-% YoY).

Earnings per share

Diluted earnings
per share

Return on equity

Ordinary profit tototal assets

Yen

Yen

%

%

%

March 31, 2022

79.35

－

19.6

6.8

3.6

March 31, 2021

72.51

－

21.3

5.3

3.3

Fiscal year ended

Operating profit
marginReference: Equity in earnings (losses) of affiliates:

Fiscal year ended March 31, 2022
- million yen
Fiscal year ended March 31, 2021
0 million yen
Note: Please refer to “Appropriate use of earnings forecast and other special notes 2” for details of earnings per share and return on equity
calculations.

(2) Consolidated financial position
Total assets
As of

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

March 31, 2022

62,941

13,28621.1

439.67

March 31, 2021

64,448

11,18717.3

370.23

Reference: Shareholders’ equity:

As of March 31, 2022
13,268 million yen
As of March 31, 2021
11,163 million yen
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.

(3) Consolidated cash flows
Cash flows fromoperating activities
Fiscal year ended

Million yen

Cash flows frominvesting activities

Cash flows fromfinancing activities

Million yen

Million yen

Cash and cash
equivalents at end of
periodMillion yen

March 31, 2022

4,010

(2,511)(3,415)

8,171

March 31, 2021

5,205

(1,485)(5,312)

10,088

2. Dividends
Dividends per share
End of
Q1

End ofQ2

End ofYear-end
Q3

Total

Total dividends

Payout ratio(consolidated)

Dividend on
equity ratio(consolidated)

Fiscal year ended/ending

Yen

Yen

Yen

Yen

Yen

Million yen%%

March 31, 2021

－

5.00

－

5.00

10.00

305

13.8

2.9

March 31, 2022
March 31, 2023
(forecast)

－

5.00

－

7.00

12.00

366

15.1

3.0

－

6.00

－

6.00

12.00

20.7

Note: The year-end dividend for the fiscal year ending March 31, 2022 consists of an ordinary dividend of six yen and a commemorative dividendof one yen for the 20th anniversary of the Company’s listing.
Note: Please refer to “Appropriate use of earnings forecast and other special notes 2” for details of payout ratio (consolidated) and dividend on
equity ratio (consolidated) calculations.

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 to March 31, 2023)(Percentages indicate YoY change)
Profit attributable
Earnings
Net sales
EBITDA
Operating profit Ordinary profit
to owners ofper share
parentMillion yen%

Million yen%

Millionyen% Million yen%

Million yen%

Yen

First half

53,4602.5

2,400(26.2)

1,120(39.9)

1,260(43.6)

590(58.8)

19.55

Full-year

110,000

3.1

6,200

(7.6)

3,500

(9.1)

3,700

(14.2)

1,750(26.9)

57.99

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) Changes in accounting policies, accounting estimates and retrospective restatements
1. Accounting policy changes due to accounting standard revisions, etc.:Yes
2. Other accounting policy changes:
None
3. Changes in accounting estimates:
None
4. Retrospective restatements:
None
Note: Please refer to “(5) Notes to Consolidated Financial Statements (Changes in accounting policies)” within “5. Consolidated Financial
Statements and Primary Notes” on page 18 of the attached materials for details.

(3) Number of shares outstanding (common stock)
1. Shares outstanding
As of March 31, 2022
(including treasury shares)
2. Treasury shares
As of March 31, 2022
outstanding
3. Period-average sharesFiscal year ended
outstanding
March 31, 2022

30,642,600

As of March 31, 2021

30,642,600

464,055

As of March 31, 2021

489,055

30,170,942

Fiscal year ended
March 31, 2021

30,314,865

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

(Reference) Summary of Non-Consolidated Financial Results
1. Non-Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 to March 31, 2022)(1) Non-consolidated operating results(Percentages indicate YoY change)
Net sales

Operating profit

Million yen

Fiscal year ended%

Million yen

Ordinary profit%

Million yen

Profit%Million yen%

March 31, 2022

7,374

7.2

404

553.8

2,177

141.3

2,199

61.2

March 31, 2021

6,880

(12.3)

61(93.5)

902(53.9)

1,364

(5.9)

Earnings per share

Diluted earnings
per share

Yen

Yen

March 31, 2022

72.89

－

March 31, 2021

45.01

－

Fiscal year ended

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

(2) Non-consolidated financial position
Total assets
As of

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

March 31, 2022

53,863

16,52830.7

547.69March 31, 2021

54,885

14,59226.6

483.95

Reference: Shareholders’ equity:

As of March 31, 2022
16,528 million yen
As of March 31, 2021
14,592 million yen
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.

*The financial information in this report is not subject to audits 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 from forecasts due to a variety of factors. For matters concerning
earnings forecasts, please refer to page 3 of the attached materials “1. Overview of Operating Results (4) Future Outlook.”
2. In both consolidated and non-consolidated balance sheets for the fiscal year ended March 31, 2022, the Company's
shares held as trust assets of the Board Benefit Trust (BBT) are recorded as treasury shares. They are included in treasury
shares in calculations of earnings per share, return on equity, equity ratio, net assets per share, shareholders’ equity,
dividend payout ratio (consolidated), dividend on equity ratio (consolidated), period-end treasury shares outstanding andperiod-average shares outstanding.

Accompanying Materials – Contents
1. Overview of Operating Results .......................................................................................................................................... 2(1) Overview of Operating Results for the Fiscal Year Under Review ................................................................................ 2(2) Overview of Financial Position for the Fiscal Year Under Review ................................................................................ 3(3) Overview of Cash Flows for the Fiscal Year Under Review .......................................................................................... 3(4) Future Outlook.............................................................................................................................................................. 4(5) Dividend Policy and Dividends for the Fiscal Year Ended March 2022 and the Fiscal Year Ending March 2023 ......... 4
2. Group Companies ............................................................................................................................................................. 6
3. Management Policy ........................................................................................................................................................... 8(1) Our Basic Management Policy ..................................................................................................................................... 8(2) Medium to Long-Term Management Strategy and Targeted Management Benchmarks .............................................. 8(3) Issues Requiring Action from the Company.................................................................................................................. 8(4) Other Significant Matters Concerning Corporate Management .................................................................................... 9
4. Basic Policy on the Selection of Accounting Standards ..................................................................................................... 9
5. Consolidated Financial Statements and Primary Notes .................................................................................................. 10(1) Consolidated Balance Sheet ...................................................................................................................................... 10(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income .................................... 12(3) Consolidated Statement of Changes in Shareholders’ Equity .................................................................................... 14(4) Consolidated Statement of Cash Flows ..................................................................................................................... 16(5) Notes to Consolidated Financial Statements .............................................................................................................. 18(Notes to going concern assumptions) ......................................................................................................................... 18(Additional information) ................................................................................................................................................ 18(Changes in accounting policies) ................................................................................................................................. 18(Changes in presentation) ............................................................................................................................................ 19(Changes in presentation of Consolidated Statement of Changes in Shareholders’ Equity) ........................................ 19(Segment information) .................................................................................................................................................. 21(Per share information) ................................................................................................................................................ 25(Significant subsequent events) ................................................................................................................................... 25―1―

1. Overview of Operating Results(1) Overview of Operating Results for the Fiscal Year Under Review
During the consolidated fiscal year under review, the Japanese economy incurred impact from prolonged restrictions
placed on economic activities by state of emergency declarations and quasi-emergency measures implemented in
response to the COVID-19 pandemic, but expectations for a future recovery in economic activity are growing thanks inpart to the progress of vaccination programs.
Medical System Network operates within the pharmaceutical industry, where the Japanese government aimed to curb
medical costs by implementing NHI drug price revisions, which had been done biennially, annually from April 2021. Asidefrom these circumstances, our business environment remains challenging in part because prescription count has not fully
recovered to pre-pandemic levels due to patient reluctance toward medical examinations amid the spread of COVID-19.
Under these circumstances, during the fiscal year ended March 31, 2022, the Company reported a strong total of new
network affiliates in its Pharmaceutical Network Business. Meanwhile, in the Community Pharmacy Business, weobserved measurable recovery in prescription count despite a decline in prescription unit price. As a result, the Groupgenerated net sales of 106,685 million yen (+2.3% YoY), operating profit of 3,852 million yen (+12.3% YoY), and ordinary
profit of 4,313 million yen (+24.0% YoY). Meanwhile, profit attributable to owners of parent company amounted to 2,394
million yen (+8.9% YoY) thanks in part to gains on the sale of investment securities and a decrease in the Company's
income tax burden stemming from its July 2021 absorption of consolidated subsidiary Home-Visit Nursing Care Station
Himawari Co., Ltd. Having achieved these results, the Company generated record highs in all profit categories.
Results by segment were as follows. Net sales for individual segments include intersegment sales.
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 a pharmaceutical network to support pharmacy management, community pharmacy
operations, pharmaceutical manufacture and marketing, and a digital shift business using the LINE communication app.
In the Pharmaceutical Network Business, the environment surrounding the pharmacy industry has become
increasingly severe as the NHI drug price list, which was previously revised every other year, was made subject toannual revisions starting in April 2021. The number of new network affiliates continued to grow solidly amid mounting
needs for operational stability. As of March 31, 2022, network affiliates totaled 7,401, comprising 425 Group community
pharmacies and 6,976 general network affiliates (an increase of 1,285 from March 31, 2021).
In the Community Pharmacy Business, the Company reported measurable recovery in prescription count despite adecline in prescription unit price. As of March 31, 2022, the Company had 425 community pharmacies, one care plan
center, and eight drug/cosmetic stores.
In the Manufacture and Market Pharmaceuticals Business, we launched 14 products (seven ingredients) during the
fiscal year under review, and had 82 products (41 ingredients) available as of March 31, 2022.
In the Digital Shift Business, the number of registered LINE users had exceeded 310,000 as of March 31, 2022, anda total of 911 pharmacies were using the service (1,643 pharmacies had placed orders).
As a result, segment sales for the fiscal year under review were 101,457 million yen (+2.3% YoY), and operating profit
was 6,117 million (+7.3% YoY).
2) Leasing and Facility-related Segment
In the Leasing and Facility-related Segment, real estate lease revenue was generally solid, and orders for construction
projects increased, but occupancy rates at serviced residences for the elderly were sluggish. As a result, segment sales
were 3,326 million yen (+13.1% YoY), and operating profit was 39 million yen (+23.8% YoY).
As of March 31, 2022, occupancy rates were stable at three of our five serviced residences for the elderly. At theremaining two, Wisteria Senri-Chuo had an occupancy rate of 78.1% (64 out of 82 units occupied), and Wisteria MinamiIchijo had an occupancy rate of 69.8% (81 out of 116 units occupied). Moving forward, we will continue to conduct
relevant sales activities that incorporate COVID-19 countermeasures.
3) Meal Catering Segment―2―

In the Meal Catering Segment, the number of meals supplied fell during the COVID-19 pandemic, but gross profit
improved as we changed suppliers. Segment sales were 2,322 million yen (-6.1% YoY) and operating profit was one
million yen (operating loss of 21 million yen in the previous fiscal year).
4) Other Segment
The Other Segment provides home-visit nursing care. Segment sales were 305 million yen (+33.0% YoY) andsegment operating loss was 12 million yen (operating loss of 31 million yen in the previous fiscal year).

(2) Overview of Financial Position for the Fiscal Year Under Review
As of March 31, 2022, total assets amounted to 62,941 million yen, down 1,506 million yen from March 31, 2021.
Current assets totaled 18,701 million yen, down 612 million yen from March 31, 2021. This decline occurred despite
increases in accounts receivable—trade and merchandise and was primarily due to a decrease in cash and deposits.
Non-current assets were 44,239 million yen, down 894 million yen compared to March 31, 2021. The decrease wasprimarily due to a decline in goodwill.
Meanwhile, liabilities came to 49,654 million yen, down 3,605 million yen compared to March 31, 2021. Current liabilities
were 20,435 million yen, declining 4,983 million yen from March 31, 2021 due mainly to a downturn in short-termborrowings. Non-current liabilities came to 29,219 million yen, rising 1,377 million yen from March 31, 2021 due primarily
to growth in long-term borrowings.
Net assets totaled 13,286 million yen, growing 2,099 million yen compared to March 31, 2021 due mainly to higher
retained earnings.

(3) Overview of Cash Flows for the Fiscal Year Under Review(Status of cash flows)
As of March 31, 2022, cash and cash equivalents totaled 8,171 million yen, down 1,916 million yen compared toMarch 31, 2021. Cash flows during the fiscal year ended March 31, 2022 are detailed below.
(Cash flows from operating activities)
Net cash provided by operating activities was 4,010 million yen (versus 5,205 million yen provided in the previous
fiscal year). This was primarily due to inflows of 4,012 million yen in profit before income taxes, 1,727 million yen in
depreciation, and 1,128 million yen in amortization of goodwill, offsetting an outflow of 2,866 million yen in income taxes
paid.
(Cash flows from investing activities)
Net cash used in investing activities totaled 2,511 million yen (versus 1,485 million yen used in the previous fiscal
year). The main factor was an outflow of 1,934 million yen in purchase of property, plant, and equipment.
(Cash flows from financing activities)
Net cash used in financing activities totaled 3,415 million yen (versus 5,312 million yen used in the previous fiscal year).
This amount was primarily the result of a 2,869 million-yen decrease in borrowings.

―3―

Reference: Cash Flow Indicators
Fiscal year
ended March
31, 2018

Fiscal year
ended March
31, 2019

Fiscal year
ended March
31, 2020

Fiscal year
ended March
31, 2021

Fiscal year
ended March
31, 2022

Equity ratio (%)

16.9

15.6

14.2

17.3

21.1

Equity ratio based on market
value (%)

27.7

23.2

19.7

33.3

26.2

Interest-bearing debt to cash
flow ratio (years)

5.0

13.7

8.9

6.3

7.4

Interest coverage ratio (times)

29.9

11.8

17.5

24.4

21.9

Equity ratio: Shareholders’ equity/total assets
Equity ratio based on market value: Market capitalization/total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt/cash flow
Interest coverage ratio: Cash flow/interest payment
Note:
1. Indicators are calculated based on consolidated figures.
2. Market capitalization is determined based on the number of shares outstanding excluding treasury shares.
3. Cash flow refers to cash flows from operating activities.
4. Interest-bearing debt refers to all liabilities on the consolidated balance sheet requiring the payment of interest.

(4) Future Outlook
The NHI drug price and dispensing fee revisions implemented in April 2022 resulted in a 1.35% reduction in drug prices
and a 0.08% increase in dispensing fees, which occurred due to the Ministry of Health, Labour and Welfare's expanded
evaluation of the interpersonal work of pharmacists. Under these circumstances, we believe that the needs for improved
operational efficiency and more stable management will continue to persist in the pharmacy industry as organizations
operating within this industry aim to intensify their focus on interpersonal services while responding to the deteriorating
business environment. With regard to the Pharmaceutical Network Business, we view these circumstances as anopportunity for expansion and will strive to acquire new network affiliates, provide comprehensive management support
to pharmacies, and further improve the efficiency of pharmaceutical distribution. In terms of the Community Pharmacy
Business, we will endeavor to strengthen interpersonal operations by fostering medical mindsets and facilitating highquality pharmacotherapy while also targeting prescription acquisition primarily through our official "Tsunagaru Pharmacy"
LINE account. Moving forward, we will also strengthen pharmacy development and expand our network through newstore openings, which will incur upfront expenditures in the short term. As for the Manufacture and Market
Pharmaceuticals Business, we will focus on expanding customer base, mainly affiliates pharmacies in our pharmaceutical
network. In the Leasing and Facility-related Segment, we will aim to achieve occupancy rates of 90% at Wisteria SenriChuo and Wisteria Minami-Ichijo (both serviced residences for the elderly) as soon as possible.
Having considered these circumstances, the Company projects net sales of 110,000 million yen. (+3.1% YoY), EBITDA
of 6,200 million yen (-7.6% YoY), operating profit of 3,500 million yen (-9.1%), ordinary profit of 3,700 million yen (-14.2%),
and profit attributable to owners of parent of 1,750 million yen (-26.9% YoY) in the fiscal year ending March 31, 2023.
The above earnings forecasts are subject to change depending on the status of COVID-19 infections.

(5) Dividend Policy and Dividends for the Fiscal Year Ended March 2022 and the Fiscal Year Ending March2023
Our basic policy is to continuously provide our shareholders with stable dividends that are commensurate with ourbusiness performance, while securing the internal reserves needed to strengthen our financial position, expand the scaleof our business, and develop our human resources.
We plan to pay a year-end dividend of seven yen per share, consisting of an ordinary dividend of six yen per share anda commemorative dividend of one yen per share for the 20th anniversary of the Company's listing. If these dividends areissued as planned, our annual dividends for the fiscal year ended March 31, 2022 will amount to 12 yen per share,―4―

including an interim dividend of five yen per share previously disbursed on December 13, 2021.
For the fiscal year ending March 31, 2023, we plan to pay an interim dividend and a year-end dividend of six yen per
share each (annual dividend of 12 yen per share). This amount was determined based on the consolidated earnings
forecast for the fiscal year ending March 31, 2023.

―5―

2. Group Companies
As of March 31, 2022, our corporate group consists of Medical System Network Co., Ltd. (the Company) and 13
consolidated subsidiaries. Its business segments include the Community Pharmacy Network Segment, the Leasing andFacility-related Segment, the Meal Catering Segment, and the Other Segment. Included below is a summary of how thesesegments are arranged in accordance with our business activities.
The classifications indicated below correspond to the Company's business segments.

(1) Community Pharmacy Network Segment
1) Pharmaceutical Network BusinessWithin this business, we have adopted a business model focused on improving the efficiency of the pharmaceutical
distribution process and providing comprehensive management support services to pharmacies by facilitating thepurchase and sale of pharmaceuticals between pharmacies, hospitals and clinics, and pharmaceutical wholesalers. The
Pharmaceutical Network Business comprises the following three specific operations.
a. Pharmaceutical network operations
These activities form the operational core of the Pharmaceutical Network Business. They involve negotiating prices
in an appropriate manner (i.e., prices of individual items) with pharmaceutical wholesalers and making payments onbehalf of pharmacies, hospitals, and clinics, while also proposing inventory management systems and providing slow
moving inventory clearance services. Through these activities, we help improve the operational efficiency of these
institutions while also facilitating the stabilization of their business operations.
b. Pharmaceutical system-related services
These activities focus on the development, sale, and maintenance of computer systems for preparing medical fee
statements and associated peripherals for pharmacies. Through these operations, we also sell dispensing equipment,
as well as fixtures and fittings, to pharmacies and other customers.
c. Receivable securitization support services
Through these services, we provide means of financing to corporate members of our Pharmaceutical Network
System. Specifically, we help member pharmacies, hospitals, and clinics that examine and fill prescriptions for patientswith health insurance coverage raise funds by facilitating the securitization of insurance claims (dispensing, medical
treatment, and nursing care fee receivables) issued by Health Insurance Claims Review & Reimbursement Services
or the National Health Insurance Organization.
2) Community Pharmacy BusinessThis business consists primarily of pharmacy management and operation conducted by eight of our consolidated
subsidiaries. Additionally, consolidated subsidiary Hokkaido Institute for Pharmacy Benefit Co., Ltd. publishes technicalbooks for pharmacists and other healthcare professionals while also analyzing pharmaceutical data.
3) Manufacture and Market Pharmaceuticals BusinessIn this business, consolidated subsidiary Feldsenf Pharma Co., Ltd. manufactures and markets genericpharmaceuticals.
4) Digital Shift Business
Through this business, consolidated subsidiary PharmaShift Co., Ltd. supports the transition of standard pharmacies
into family pharmacies with the goal of establishing a new pharmaceutical platform actualized through theimplementation of digital technologies.

(2) Leasing and Facility-related Segment
Through this segment, we primarily develop locations for pharmacies and provide building leasing services. Additionally,―6―

we provide consulting services for physicians opening their own practices while also offering advisory counselingconcerning medical malls (facilities that organize different medical departments on single floors) and medical buildingsthat house multiple clinics. Aside from these services, we also operate serviced residences for the elderly. Furthermore,
consolidated subsidiary Paltecno Co., Ltd. is engaged in design and construction supervision of medical facilities andinsurance services.

(3) Meal Catering Segment
Through this segment, consolidated subsidiaries Total Medical Service Co., Ltd. and SAKURAFOOD Co., Ltd. perform
meal catering services for hospitals and welfare facilities.

(4) Other Segment
Through this business, we dispatch nurses and other personnel to the domiciles of the elderly and infirm, where they
provide services such as nursing care and advisory counseling regarding medical treatment.

―7―

3. Management Policy(1) Our Basic Management Policy
In accordance with our corporate philosophy, which calls for us to "facilitate healthy living as a beacon of light thatsafeguards members of communities throughout their lives while generating quality medical infrastructure," we focus on
two core businesses: the Pharmaceutical Network Business, through which we radically streamline inefficient drug
distribution processes between pharmaceutical wholesalers and dispensing pharmacies, and the Dispensing Pharmacy
Business, through which we maintain close ties with local communities. At the same time, we maintain a basic
management policy focused on ensuring healthy lives for local residents by laying groundwork for proper healthcare androbust livelihoods and by facilitating community development that allows these individuals to live safely and securely intheir established places of residence throughout their lives.

(2) Medium to Long-Term Management Strategy and Targeted Management Benchmarks
The Medical System Network Group operates within the pharmaceutical industry, where projections indicate medium
to long-term market expansion stemming from growth in medical spending aimed at addressing Japan's aging population.
At the same time, the industry is characterized by needs to stabilize and improve pharmaceutical distribution, patientoriented separation of medical and dispensary practice, and more efficient pharmacy management to address healthcare
cost reduction measures including revisions to NHI drug prices and dispensing fees.
In response to these circumstances, the Group has formulated its sixth Medium-Term Management Plan, which willfunction as the Company's medium to long-term management strategy for the four-year period beginning with April 2022.
Under this Medium-Term Management Plan, we will further expand the platform integrating the Group’s community
pharmacies with our pharmaceutical network affiliates while focusing on providing quality medical care and services andfacilitating improved efficiency within the pharmaceutical distribution market. Furthermore, we will leverage the strengthof this platform to drive expansion in our pharmacy support businesses (Pharmaceutical Network Business, Manufactureand Market Pharmaceuticals Business, and Digital Shift Business).
We have established the following benchmarks for the fiscal year ending March 31, 2026, the final year of our sixth
Medium-Term Management Plan. In particular, we aim to increase profits by more than 3 billion yen in the pharmacy
support businesses.
・Consolidated net sales

140.0 billion yen

・Consolidated operating profit

6.5 billion yen

・Operating profit margin

4.6%

・Consolidated EBITDA

10.0 billion yen

・Number of pharmaceutical network affiliates

12,000・Number of directly managed community pharmacies

550

・Equity ratio

30.0%

For more details regarding our sixth Medium-Term Management Plan, please refer to our website
URL: https://www.msnw.co.jp/uploads/2022/05/06/earningsreport202203.pdf(3) Issues Requiring Action from the Company
In response to our current business environment and in accordance with our sixth Medium-Term Management Plan,
we will tackle a wide variety of issues. Through the Pharmaceutical Network Business of our Community Pharmacy
Network Segment, we will aim to raise our network affiliate count to 12,000 through enhancement of our sales structureand efforts aimed at improving distribution. At the same time, we will expand the services we provide to these network
affiliates. In the fiscal year ending March 31, 2023, we will target a network affiliate count of 8,900 (a net increase of
1,499). Through our Community Pharmacy Business, we will further strengthen the interpersonal work of pharmacists,
facilitate high-quality drug therapy, and acquire prescriptions primarily through online tools (LINE communication app,prescription transmission features). Within the Manufacture and Market Pharmaceuticals Business, we will ensure stable―8―supply by strengthening relevant systems, expand product lineups, and implement measures aimed at expanding sales
to member pharmacies in our pharmaceutical network. In the Digital Shift Business, we will focus on quickly expanding
the number of pharmacies that use our official "Tsunagaru Pharmacy" LINE account.
Through our Leasing and Facility-related Segment, we aim to achieve occupancy rates of 90% at all of our serviced
residences for the elderly. At the same time, we aim to stabilize the profitability of our meal catering and home-visit nursing
care operations.
Meanwhile, in pursuit of a stronger financial position, we will strive to improve our equity ratio by securing profit throughthorough companywide cost control measures.

(4) Other Significant Matters Concerning Corporate Management
None to be reported.

4. Basic Policy on the Selection of Accounting Standards
The Group's operations are currently limited to Japan and it is not engaging in any overseas activities at this time.
Therefore, for the foreseeable future, the Group will maintain a policy of preparing its consolidated financial statements inaccordance with Japanese GAAP.
The Company will apply IFRS when it determines that such application would be appropriate based on considerations ofvarious conditions in Japan and overseas.

―9―

5. Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheet(Millions of yen)
Fiscal year ended
March 31, 2022
(as of March 31, 2022)

Fiscal year ended
March 31, 2021
(as of March 31, 2021)
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

10,118
2,646

8,201
2,891

735

954

424
4,390
12
6
75
916
(12)

443
4,765
14
1
76
1,355
(3)

19,31318,701

22,437(8,828)22,990(9,582)

13,60813,408

120
(111)

119
(110)

Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
VehiclesAccumulated depreciation
Vehicles, net

8

8

4,054
(2,717)

4,810(3,174)

1,336

1,636

9,091
826
(301)

8,847
1,284
(764)

Leased assets, net

525

520

Construction in progress

64

202

24,634

24,624

13,145304
122

12,254401
111

13,572

12,767

397
2,748
2,958
843
(20)

155
3,052
2,894
764
(19)

Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation

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

―10―

6,926

6,848

45,134

44,23964,44862,941

(Millions of yen)
Fiscal year ended
March 31, 2022
(as of March 31, 2022)

Fiscal year ended
March 31, 2021
(as of March 31, 2021)
Liabilities
Current liabilities
Accounts payable – trade
Short-term borrowings
Current portion of long-term borrowings
Lease obligations
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for point card certificates
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Lease obligations
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

―11―

9,258
3,916
6,045
249
1,556
1,495

9,680
1,016
4,756
163
617
1,528

83

38

2
2,810

－
2,635

25,41820,43521,556792

22,891
740

798

600

196

210

3,347
1,149

3,752
1,023

27,841

29,21953,26049,654

2,128
1,182
8,305
(344)

2,128
1,182
10,393(326)

11,27013,377

(24)

(7)

(3)
(78)

0
(102)

(106)

(108)

23

17

11,187

13,28664,44862,941

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

Net sales
Cost of sales

Fiscal year ended
March 31, 2021
(from April 1, 2020
to March 31, 2021)
104,257
61,844(Millions of yen)
Fiscal year ended
March 31, 2022
(from April 1, 2021
to March 31, 2022)
106,685
62,256Gross profit

42,412

44,429Selling, general and administrative expenses

38,982

40,576

Operating profit

3,429

3,852

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

1
8
69
93
79
109

1
5
66
110
427
145

Total non-operating income

361

758

Interest expenses
Loss on sale of receivables
Miscellaneous losses

215
52
44

183
54
58

Total non-operating expenses

312

296

3,479

4,313

2
0

3
112

907

－

4

31

914

146

19
10
360
9
23
2

12
19
392

Non-operating expenses

Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Gain on sale of shares of subsidiaries andassociates
Gain on sale of businesses
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Impairment losses
Loss on valuation of investment securities
Loss on store closings
Other
Total extraordinary losses

－
17
5

426

447

Profit before income taxes

3,967

4,012

Income taxes - current
Income taxes – deferred

2,027
(257)

1,469
154

Total income taxes

1,769

1,624

Profit

2,197

2,388

Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

―12―

(0)

(5)

2,198

2,394

Consolidated Statement of Comprehensive Income
Fiscal year ended
March 31, 2021
(from April 1, 2020
to March 31, 2021)
2,197(Millions of yen)
Fiscal year ended
March 31, 2022
(from April 1, 2021
to March 31, 2022)
2,388

13

17

(0)

4

(18)

(23)

(6)

(1)

Comprehensive income

2,191

2,386

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

2,192

2,392

(0)

(5)

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―13―(3) Consolidated Statement of Changes in Shareholders’ Equity
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
periodCapital surplus

2,128

Retained earnings

1,183

Treasury shares

6,414

Total shareholders’equity

(206)

9,519

Changes during period
Dividends of surplus
Transfer fromretained earnings tocapital surplus

1

Profit attributable toowners of parent

(306)

(306)

(1)

－

2,198

2,198

Purchases of treasury
shares
Disposal of treasury
shares

(2)

(150)

(150)

11

9

Net changes of items
other thanshareholders’ equity
Total changes during
periodBalance at end of
period

－

(1)

1,890

(138)

1,750

2,128

1,182

8,305

(344)

11,270

Accumulated other comprehensive income
Total
Valuation
Deferred gains Remeasurements accumulateddifference onor losses on of defined benefit
otheravailable-forplanshedgescomprehensive
sale securities
incomeBalance at beginning of
period

(37)

(3)

(60)

(100)

Share
acquisitionrights－Non-controlling
Total net assetsinterests

－

9,418

Changes during period
Dividends of surplus(306)

Transfer fromretained earnings tocapital surplus－

Profit attributable toowners of parent

2,198

Purchases of treasury
shares(150)

Disposal of treasury
sharesNet changes of items
other thanshareholders’ equity

9
13

(0)

(18)

(6)

－

23

17

Total changes during
period

13

(0)

(18)

(6)

－

23

1,768

Balance at end of
period

(24)

(3)

(78)

(106)

－

23

11,187―14―

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
periodCapital surplus

2,128

Retained earnings

1,182

Treasury shares

8,305

Total shareholders’equity(344)

11,270Changes during period
Dividends of surplus

(305)

(305)

Transfer fromretained earnings tocapital surplus－

Profit attributable toowners of parent

2,394

2,394

Purchases of treasury
shares－

Disposal of treasury
shares18

18

Net changes of items
other thanshareholders’ equity
Total changes during
periodBalance at end of
period

－

－

2,088

18

2,106

2,128

1,182

10,393(326)

13,377

Accumulated other comprehensive income
Total
Valuation
Deferred gains Remeasurements accumulateddifference onor losses on of defined benefit
otheravailable-forplanshedgescomprehensive
sale securities
incomeBalance at beginning of
period

(24)

(3)

(78)

(106)

Share
acquisitionrights－Non-controlling
Total net assetsinterests

23

11,187

Changes during period
Dividends of surplus(305)

Transfer fromretained earnings tocapital surplus－

Profit attributable toowners of parent

2,394

Purchases of treasury
shares－

Disposal of treasury
shares18

Net changes of items
other thanshareholders’ equity

17

4

(23)

(1)

－

(5)

(7)

Total changes during
period

17

4

(23)

(1)

－

(5)

2,099

Balance at end of
period

(7)

0

(102)

(108)

－

17

13,286―15―

(4) Consolidated Statement of Cash Flows(Millions of yen)
Fiscal year ended
March 31, 2022
(from April 1, 2021
to March 31, 2022)

Fiscal year ended
March 31, 2021
(from April 1, 2020
to March 31, 2021)
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Increase (decrease) in provision for bonuses

3,967
1,859
360
1,136

4,012
1,727
392
1,128

93

32

83

(45)

(5)

(10)

(0)

(2)

(9)

－

19

32

28

(198)

(69)

－

381
(9)
215
1

370
(7)
183
(112)

(907)

－

17
10
(4)
(239)

9
19
(31)
(214)

(0)

(218)

3

(19)

72
(864)

(406)
400

(314)

125

570

(115)

Subtotal

6,397

7,053

Interest and dividends received
Interest paid

8
(213)

6
(182)

Income taxes paid
Net cash provided by (used in) operating
activities(987)(2,866)

5,205

4,010

Increase (decrease) in provision for bonuses for
directors (and other officers)
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for point cardcertificates
Increase (decrease) in provision for loss on store
closing
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 provision for shareawardsIncrease (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Loss (gain) on sale of investment securities
Loss (gain) on sale of shares of subsidiaries andassociates
Loss (gain) on sale of non-current assets
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

―16―

(Millions of yen)
Fiscal year ended
March 31, 2022
(from April 1, 2021
to March 31, 2022)

Fiscal year ended
March 31, 2021
(from April 1, 2020
to March 31, 2021)
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant andequipment
Purchase of intangible assets
Proceeds from sale of investment securities
Purchase of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from sale of shares of subsidiaries andassociates
Proceeds from liquidation of subsidiaries andaffiliates
Payments for acquisition of businesses
Proceeds from sale of businesses(1)12(1,375)－(1,934)

57

33

(154)
18

(194)
379

(8)

(209)

960

－

29

－

(191)
30

(293)
90

Loan advances
Proceeds from collection of loans receivable

(239)
6

(2)
9

Payments of guarantee deposits
Proceeds from refund of guarantee deposits
Other

(550)
58
(138)

(401)
65
(54)

(1,485)(2,511)－－(4,634)
(368)
(30)
(304)

(2,901)
6,100(6,067)
(241)

24

－

(5,312)(3,415)(1,592)(1,916)

11,681

10,08810,0888,171

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayments of lease obligations
Purchase of treasury shares
Dividends paid
Proceeds from share issuance to non-controllingshareholders
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

―17―

(0)

－
(304)

(5) Notes to Consolidated Financial Statements(Notes to going concern assumptions)None to be reported.
(Additional information)(Accounting estimates associated with COVID-19 impact)
The Company continues to incur impact from the COVID-19 pandemic, and the formulation of sound projections
regarding the time at which the pandemic will end remains prohibitively difficult.
We prepared accounting estimates regarding impairment of non-current assets and the recoverability of deferred
tax assets based on recent circumstances surrounding the pandemic and the assumption of ongoing COVID-19 impact
in the fiscal year ending March 31, 2022 and subsequent accounting periods.
Our financial position, business performance, and cash flows may be affected if circumstances related to thepandemic's spread or associated impact on our economic environment deviates from the assumptions on which theseestimates were based.
(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition, etc.)
The Group has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29; March 31,
2020; hereinafter, “Revenue Recognition Standard”) from the beginning of the consolidated fiscal year under review.
As a result of the application of this standard, revenue will be recognized in the amount expected to be received in
exchange for the promised goods or services at the time control of the promised goods or services is transferred tothe customer.
The Company previously recognized the gross amount received from the customer as revenue for certaintransactions. Following the change, when the Company acts as an agent in providing goods or services to the customer,
it will recognize revenue based on the net amount received from the customer less the amount paid to the supplier.
Regarding points awarded under the customer loyalty program at the time of sale, the Company previously
recognized revenue at the time of sale and booked the amount expected to be needed to redeem the points in the
future as a provision for point card certificates, and recorded this under selling, general and administrative expenses.
However, since the points are insignificant from a monetary perspective, the Company now applies a method that
does not identify separate performance obligations.
The Company participates in point programs operated by third parties and awards those parties’ points at the timeof product sales. Previously the Company recognized revenue at the time of sale and booked the amount equivalent
to points awarded under selling, general and administrative expenses. However, this amount does not constitute a
separate performance obligation, and the Company now excludes the amount paid to other companies at the time ofsale from revenue as an amount collected on behalf of third parties.
Regarding construction contracts, the Company previously applied the percentage of completion method when theoutcome of the construction activity was deemed certain. However, we have changed our revenue recognition method.
When control over goods or services is transferred to the customer over a certain period, we now recognize revenue
for that period as our performance obligation to transfer the goods or services to the customer is satisfied. To measure
the progress toward fulfilling performance obligations for each reporting period, costs incurred until the last day of theperiod as a percentage of total expected costs are calculated. When it is not possible to reasonably estimate progressin the initial phase of a contract, but the Company expects to recover costs incurred, the Company recognizes revenue
under the cost recovery method. For contracts with a very short period from the start of the transaction until theperformance obligation is expected to be fully satisfied, we apply an alternative treatment under which revenue is notrecognized for a set period but only when the performance obligation is fully satisfied.
When applying the Revenue Recognition Standard, etc., we comply with the transitional treatment prescribed in theprovisions of Paragraph 84 of the Revenue Recognition Standard. The cumulative impact of retroactively applying the
new accounting policy to accounting periods prior to the beginning of consolidated fiscal year under review has been
added to or subtracted from retained earnings at the beginning of the consolidated fiscal year under review, and the―18―

new accounting policy has been applied using the resulting balance. However, our application of the standard had no
impact on the starting balance of retained earnings.
In the fiscal year ended March 31, 2022, the application of the standard had downward impacts of 758 million yen
on net sales, 691 million yen on cost of sales, and 67 million yen on selling, general and administrative expenses,
while exacting upward impacts of 2 million yen on both ordinary profit and profit before income taxes. The standard's
application had no impact on operating profit.
In accordance with the transitional treatment stipulated in Paragraph 89-3 of the Revenue Recognition Standard,
we have omitted information related to revenue recognition for the previous consolidated fiscal year.
(Application of Accounting Standard for Fair Value Measurement)
The Company applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019,
hereinafter, “Fair Value Measurement Standard”) and related implementation guidance from the beginning of thecurrent fiscal year. In accordance with the transitional treatment prescribed in paragraph 19 of the Fair Value
Measurement Standard and paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement
No. 10, July 4, 2019), the new accounting policy prescribed in the Fair Value Measurement Standard will be applied
prospectively. There was no impact on the consolidated financial statements.

(Changes in presentation)(Changes in presentation of Consolidated Statements of Income)
Although we booked "Gain on sale of investment securities" in the "Other" account under "Extraordinary income" inthe fiscal year ended March 31, 2021, we have recorded these gains as a separate item in the fiscal year under review
because the amount of these gains exceeded 10% of total extraordinary income. Consolidated financial statements
for the fiscal year ended March 31, 2021 have been adjusted to reflect this change in presentation.
In accordance with this change, an entry of 0 million yen originally recorded in the "Other" account under"Extraordinary income" in the consolidated statement of income for the fiscal year ended March 31, 2021 has been
removed and rerecorded as an entry of 0 million yen in the "Gain on sale of investment securities" account.
(Changes in presentation of Consolidated Statement of Changes in Shareholders’ Equity)
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)
1. Issued SharesClass of shares

Number of shares at
beginning of period

Common shares

30,642,600

Increase

Number of shares at
end of period

Decrease－

30,642,600－

2. Treasury SharesClass of shares

Number of shares at
beginning of period

Common shares

261,115

Increase
228,740

Number of shares at
end of period

Decrease
800

489,055

Note: The number of treasury shares at the end of the fiscal year ended March 31, 2021 includes 426,000 shares in the
Company held by Custody Bank of Japan, Ltd. (Trust account E) as trust assets of the Board Benefit Trust (BBT).
(Outline of reasons for changes)
Increase due to the purchase of shares less than one unit:
Increase due to the acquisition of treasury shares:
Increase due to the additional acquisition of shares as trust assets of the BBT:
Decrease due to the awarding of BBT benefits:―19―

40 shares
61,900 shares
166,800 shares
800 shares3. Dividends(1) Dividends Paid
Total dividends(million yen)

Dividend pershare (yen)Resolution

Class of shares

June 19, 2020
Ordinary General
Meeting of
Shareholders

Commonshares153

November 6, 2020
Board of Directors
meeting

Commonshares152

Record date

Effective date

5.00

March 31, 2020

June 22, 2020

5.00

September 30,
2020

December 14,
2020

Notes:
1. Total dividends based on resolutions adopted during the Ordinary General Meeting of Shareholders held on June 19,
2020 include dividends of one million yen on the Company’s shares held by Custody Bank of Japan, Ltd. (Trust account E)
as trust assets of the Board Benefit Trust (BBT).
2. Total dividends based on resolutions adopted by the Board of Directors during a meeting held on November 6, 2020
include dividends of one million yen on the Company’s common shares held by Custody Bank of Japan, Ltd. (Trust accountE) as trust assets of the Board Benefit Trust (BBT).
(2) Dividends for which the record date fell in the fiscal year ended March 31, 2021, but the effective date fell in thefollowing fiscal year
Resolution

Class ofshares

Source ofdividends

Total
dividends(million yen)

Dividend pershare (yen)Record date

Effective dateJune 24, 2021
Ordinary General
Meeting of
Shareholders

CommonsharesRetainedearnings

152

5.00

March 31,2021

June 25,2021

Note: Total dividends based on resolutions adopted during the Ordinary General Meeting of Shareholders held on June 24,
2021 include dividends of two million yen on the Company’s shares held by Custody Bank of Japan, Ltd. (Trust account E)
as trust assets of the Board Benefit Trust (BBT).
Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
1. Issued SharesClass of shares

Number of shares at
beginning of period

Common shares

30,642,600

Increase

Number of shares at
end of period

Decrease－－

30,642,600

2. Treasury SharesClass of shares

Number of shares at
beginning of period

Common shares

489,055

Increase

Decrease－

25,000

Number of shares at
end of period
464,055

Note: The number of treasury shares at the end of the fiscal year ended March 31, 2022 includes 401,000 shares in the
Company held by Custody Bank of Japan, Ltd. (Trust account E) as trust assets of the Board Benefit Trust (BBT).
(Outline of reasons for changes)
Decrease due to the awarding of BBT benefits:

25,000 shares―20―

3. Dividends(1) Dividends Paid
Total dividends(million yen)

Dividend pershare (yen)Resolution

Class of shares

June 24, 2021
Ordinary General
Meeting of
Shareholders

Commonshares152

November 5, 2021
Board of Directors
meeting

Commonshares152

Record date

Effective date

5.00

March 31, 2021

June 25, 2021

5.00

September 30,
2021

December 13,
2021

Notes:
1. Total dividends based on resolutions adopted during the Ordinary General Meeting of Shareholders held on June 24,
2021 include dividends of two million yen on the Company’s shares held by Custody Bank of Japan, Ltd. (Trust account E)
as trust assets of the Board Benefit Trust (BBT).
2. Total dividends based on resolutions adopted by the Board of Directors during a meeting held on November 5, 2021
include dividends of two million yen on the Company’s common shares held by Custody Bank of Japan, Ltd. (Trust accountE) as trust assets of the Board Benefit Trust (BBT).
(2) Dividends for which the record date fell in the fiscal year ended March 31, 2022, but the effective date falls in thefollowing year
Resolution

Class ofshares

Source ofdividends

Total cash
dividends(million yen)

Dividend pershare (yen)June 22, 2022
Ordinary General
Meeting of
Shareholders

CommonsharesRetainedearnings

214

7.00

Record date

Effective date

March 31, 2022

June 23, 2022

Note: Total dividends based on resolutions to be adopted during the Ordinary General Meeting of Shareholders to be heldon June 22, 2022 include dividends of two million yen on the Company’s common shares held by Custody Bank of Japan,
Ltd. (Trust account E) as trust assets of the Board Benefit Trust (BBT).
(Segment information)(Segment information)
1. Description of reporting segments
The Company’s reporting segments represent components of its overall composition for which separate financial
information is available and are regularly evaluated by the Board of Directors to determine how management resources
will be allocated and to assess performance
Through our Community Pharmacy Network Segment, we provide management support for pharmacies and othermedical facilities through our pharmaceutical network. The segment also involves operating dispensing pharmacies,
manufacturing and selling pharmaceuticals, and supporting the transition of general pharmacies into family pharmacies
through use of the LINE communication app. In the Leasing and Facility-related Segment, we develop locations fordispensing pharmacies, provide building leasing services, operate serviced residences for the elderly, and engage indesign and construction supervision of medical facilities. Through the Meal Catering Segment, we perform mealcatering services for hospitals and welfare facilities. Our Other Segment focuses on the dispatch of nurses who provide
at-home care.
2. Method of Calculating Net Sales, Profit (Loss), Assets, Liabilities, and Other Items by Reporting Segment
The accounting methods we apply to our reporting segments are generally identical to those described in the“Significant Accounting Policies for Preparing Consolidated Financial Statements.”
Individual segment profits indicate operating profit. Intersegment sales and transfers are based on market values.
As described in the section entitled "Changes in accounting policies," we began applying the Accounting Standard
for Revenue Recognition with our consolidated financial statements for the fiscal year ended March 31, 2022. In
accordance with this change, we have applied the same adjustments that were made to our accounting methods for―21―

revenue recognition to our calculations concerning profit or loss in individual business segments.
Compared to our previous accounting methods, the application of the standard had downward impacts of 726 million
yen in sales in the Community Pharmacy Network Segment and 31 million yen in sales in the Leasing and Facilityrelated Segment during the fiscal year ended March 31, 2022. It had no impact on segment profit or loss during theyear.

3. Information on net sales, profit (loss), assets, liabilities, and other items by reporting segment
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)(Millions of yen)
Reporting segment
Community
Pharmacy
Network

Leasing
andFacilityrelated

Meal
Catering

Other

Total

Adjustments(Note 1)

Amounts on
consolidated
financialstatements(Note 2)

Net sales
Sales to externalcustomers
Intersegment sales ortransfers

99,211

2,342

2,474

229

104,257－

104,257

3

598

－

－

601

(601)

－

Total

99,214

2,940

2,474

229

104,858(601)

104,257

Segment profit (loss)

5,703

32

(21)

(31)

5,683

(2,253)

3,429

Segment assets

43,38817,543694

2261,6492,798

64,448Depreciation

1,125

603

0

0

1,728

130

1,859

Amortization of
goodwill

1,135

－

－

－

1,135

1

1,136

Impairment loss

307

42

－

2

352

7

360

Other items

Increase in property,
plant and equipment
1,157
476
5
1,639
221
1,861
－
and intangible assets
Notes:
1. Adjustments are as follows:(1) Adjustment of -2,253 million yen for segment profit (loss) includes 439 million yen in elimination of intersegment
transactions and -2,692 million yen in companywide expenses not allocated to any reporting segment. Companywide
expenses mainly refer to general expenses that do not belong to any reporting segment.
(2) Adjustment of 2,798 million yen for segment assets includes -7,610 million yen in elimination of intersegment
receivables and payables and companywide assets of 10,408 million yen not allocated to any reporting segment.
Companywide assets mainly refer to companywide non-current assets that do not belong to any reporting segment.
(3) Adjustment of 221 million yen for increase in property, plant and equipment and intangible assets mainly represents
the acquisition of property, plant and equipment and intangible assets related to companywide assets.
2. Segment profit (loss) is adjusted with operating profit in the consolidated statement of income.

―22―

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)(Millions of yen)
Reporting segment
Community
Pharmacy
Network

Leasing
andFacilityrelated

Meal
Catering

Other

Total

Adjustments(Note 1)

Amounts on
consolidated
financialstatements(Note 2)

Net sales
Sales to externalcustomers
Intersegment sales ortransfers

101,457

2,599

2,322

305

106,685－

106,685

0

726

－

－

727

(727)

－

Total

101,457

3,326

2,322

305

107,412(727)

106,685

Segment profit (loss)

6,117

39

1

(12)

6,145

(2,293)

3,852

Segment assets

43,01017,474699

62

61,246

1,694

62,941

Depreciation

994

598

0

0

1,594

133

1,727

Amortization of
goodwill

1,127

－

－

－

1,127

1

1,128

Impairment loss

392

－

－

－

392

0

392

Other items

Increase in property,
plant and equipment
2,229
181
3
2,414
205
2,620
－
and intangible assets
Notes:
1. Adjustments are as follows:(1) Adjustment of -2,293 million yen for segment profit (loss) includes 204 million yen in elimination of intersegment
transactions and -2,498 million yen in companywide expenses not allocated to any reporting segment. Companywide
expenses mainly refer to general expenses that do not belong to any reporting segment.
(2) Adjustment of 1,694 million yen for segment assets includes -7,137 million yen in elimination of intersegment
receivables and payables and companywide assets of 8,831 million yen not allocated to any reporting segment.
Companywide assets mainly refer to companywide non-current assets that do not belong to any reporting segment.
(3) Adjustment of 205 million yen for increase in property, plant and equipment and intangible assets mainly represents
the acquisition of property, plant and equipment and intangible assets related to companywide assets.
2. Segment profit (loss) is adjusted with operating profit in the consolidated statement of income.

(Associated information)
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)
1. Information for individual products or services
Descriptions have been omitted because similar information is disclosed in the segment information section.
2. Information for individual regions(1) Net Sales
Not applicable since the Company generated no sales through external customers outside of Japan.
(2) Property, Plant and Equipment
Not applicable since the Company holds no property, plant or equipment outside of Japan.
3. Information for individual primary customers
Not applicable since the Company did not generate 10% or more of the net sales indicated by its consolidated
statement of income through any individual customer.

―23―

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
1. Information for individual products or services
Descriptions have been omitted because similar information is disclosed in the segment information section.
2. Information for individual regions(1) Net Sales
Not applicable since the Company generated no sales through external customers outside of Japan.
(2) Property, Plant and Equipment
Not applicable since the Company holds no property, plant or equipment outside of Japan.
3. Information for individual primary customers
Not applicable since the Company did not generate 10% or more of the net sales indicated by its consolidated
statement of income through any individual customer.
(Disclosure of impairment losses on non-current assets for each reporting segment)
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)
Descriptions have been omitted because similar information is disclosed in the segment information section.
Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
Descriptions have been omitted because similar information is disclosed in the segment information section.
(Amortization and unamortized balance of goodwill for each reporting segment)
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)(Millions of yen)
Reporting segment
Community
Pharmacy
Network

Leasing andFacilityrelated

Meal
Catering

Other

Unadjusted
Total

Companywide
andeliminations

Total

Balance at
13,144
13,144
1
13,145－－－end of period
Note: Information concerning amortization of goodwill has been omitted because similar information has been disclosed in
the segment information section.
Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)(Millions of yen)
Reporting segment
Community
Pharmacy
Network

Leasing andFacilityrelated

Meal
Catering

Other

Unadjusted
Total

Companywide
andeliminations

Total

Balance at
12,254
12,2540
12,254－－－end of period
Note: Information concerning amortization of goodwill has been omitted because similar information has been disclosed in
the segment information section.

―24―

(Information concerning gains on bargain purchase for each reporting segment)
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)
The Company recorded no significant gains on bargain purchase.
Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
The Company recorded no significant gains on bargain purchase.
(Per share information)
Fiscal year ended March 31, 2021
(April 1, 2020 to March 31, 2021)

Fiscal year ended March 31, 2022
(April 1, 2021 to March 31, 2022)

Net assets per share (yen)370.23

Net assets per share (yen)439.67

Earnings per share (yen)

72.51

Earnings per share (yen)79.35

Notes:
1. Information regarding diluted earnings per share has been omitted due to the absence of dilutive shares.
2. The basis for calculation of net assets per share is as follows:

Item

Fiscal year ended
March 31, 2021
(April 1, 2020 to March
31, 2021)

Fiscal year ended March
31, 2022(April 1, 2021 to March
31, 2022)

Total net assets (million yen)

11,187

13,286

Amount deducted from total net assets (million
yen)

23

17

Of which, non-controlling interests (million yen)

(23)

(17)

Net assets associated with common shares in the
11,163
13,268Company (million yen)
Number of year-end common shares used in the
30,153,545
30,178,545
calculation of net assets per share
Note: Shares in the Company held by Board Benefit Trust (BBT), which are recorded as treasury shares inshareholders' equity, are included in number of the treasury shares deducted from the total number of shares
outstanding at the fiscal year-end for the purpose of calculating net assets per share. The number of such treasury
shares deducted for the calculation of net assets per share was 426,000 shares for the fiscal year ended March
31, 2021 and 401,000 shares for the fiscal year ended March 31, 2022.
3. The basis for calculation of earnings per share is as follows.
Item

Fiscal year ended
March 31, 2021
(April 1, 2020 to March
31, 2021)

Fiscal year ended March
31, 2022(April 1, 2021 to March
31, 2022)

2,198

2,394

Earnings per share
Profit attributable to owners of parent (million yen)Amount not attributed to common shareholders－－(million yen)
Net income attributable to owners of common
2,198
2,394
shares in the parent company (million yen)
Average number of common shares during the30,314,865
30,170,942
periodNote: Shares in the Company held by Board Benefit Trust (BBT), which are recorded as treasury shares inshareholders' equity, are included in number of the treasury shares deducted from the period-average number ofshares outstanding for the purpose of calculating earnings per share. The number of such treasury shares deducted
for the calculation of earnings per share was 276,542 shares for the fiscal year ended March 31, 2021 and 408,602
shares for the fiscal year ended March 31, 2022.
(Significant subsequent events)
None to be reported.
―25―