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, 2023 (Japanese GAAP)May 9, 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 Ordinary General Meeting of Shareholders: June 21, 2023
Scheduled date for dividend payment:
June 22, 2023
Scheduled date for annual securities report submission:
June 22, 2023
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, 2023 (April 1, 2022 to March 31, 2023)(1) Consolidated operating results
Net sales
Fiscal year ended

EBITDA

Million yen%

Operating profit

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

Million yen%

March 31, 2023

109,551

2.7

6,122

(8.7)

3,163

(17.9)

3,355(22.2)

1.610(32.7)March 31, 2022

106,685

2.3

6,708

4.4

3,852

12.3

4,313

24.0

2,394

8.9

Note: Comprehensive income:Fiscal year ended March 31, 2023
Fiscal year ended March 31, 2022
Note: EBITDA = (operating profit + depreciation + goodwill amortization)

1,599 million yen (-33.0% YoY)
2,386 million yen (+8.9% YoY).

Earnings per share

Diluted earnings
per share

Return on equity

Ordinary profit tototal assets

Yen

Yen

%

%

%

March 31, 2023

53.38

－

11.6

5.2

2.9

March 31, 2022

79.35

－

19.6

6.8

3.6

Fiscal year ended

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

Fiscal year ended March 31, 2023
- million yen
Fiscal year ended March 31, 2022
- 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, 2023

66,223

14,48821.8

478.86

March 31, 2022

62,941

13,28621.1

439.67

Reference: Shareholders’ equity:

As of March 31, 2023
14,451 million yen
As of March 31, 2022
13,268 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
Million yen

Cash flows fromfinancing activities
Million yen

Cash and cash
equivalents at end of
periodMillion yen

March 31, 2023

4,973

(2,114)(2,918)8,111

March 31, 2022

4,010

(2,511)(3,415)8,171

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, 2022

－

5.00

－

7.00

12.00

366

15.1

3.0

March 31, 2023
March 31, 2024
(forecast)

－

6.00

－

6.00

12.00

366

22.5

2.6

－

5.00

－

5.00

10.00

30.2

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, 2024 (April 1, 2023 to March 31, 2024)(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

54,6702.5

2,250(11.3)

800(27.3)

750(39.7)

250(50.2)

8.28

Full-year

112,500

2.7

5,600

(8.5)

2,600

(17.8)

2,550(24.0)

1,000(37.9)

33.14

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.:
None
2. Other accounting policy changes:
None
3. Changes in accounting estimates:
None
4. Retrospective restatements:
None(3) Number of shares outstanding (common stock)
1. Shares outstanding
As of March 31, 2023
(including treasury shares)
2. Treasury shares
As of March 31, 2023
outstanding
3. Period-average sharesFiscal year ended
outstanding
March 31, 2023

30,642,600

As of March 31, 2022

30,642,600

464,055

As of March 31, 2022

464,055

30,178,545

Fiscal year ended
March 31, 2022

30,170,942

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, 2023 (April 1, 2022 to March 31, 2023)(1) Non-consolidated operating results(Percentages indicate YoY change)
Net sales
Fiscal year ended

Operating profit

Million yen%

Million yen

March 31, 2023

8,108

10.0

March 31, 2022

7,374

7.2

Earnings per share
Fiscal year ended

Ordinary profit%

Million yen

429

6.2

404

553.8

Profit%Million yen

%

2,372

9.0

2,165

(1.5)

2,177

141.3

2,199

61.2

Diluted earnings
per share

Yen

Yen

March 31, 2023

71.75

－

March 31, 2022

72.89

－

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

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

March 31, 2023

53,091

18,30134.5

606.46

March 31, 2022

53,863

16,52830.7

547.69As ofReference: Shareholders’ equity:

As of March 31, 2023
18,301 million yen
As of March 31, 2022
16,528 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 4 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, 2023, 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.

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

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 2023 and the Fiscal Year Ending March 2024 ......... 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) Challenges to be Addressed by 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(Changes in presentation of Consolidated Statement of Changes in Shareholders’ Equity) ........................................ 18(Segment information) .................................................................................................................................................. 19(Per share information) ................................................................................................................................................ 23(Significant subsequent events) ................................................................................................................................... 23

1

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

1. Overview of Operating Results(1) Overview of Operating Results for the Fiscal Year Under Review
During the fiscal year under review, the Japanese economy showed signs of gradual recovery as COVID-19-related
restrictions eased, despite the ongoing impact of the pandemic. However, uncertainty remains due to rapidly risingenergy and raw material prices and inflation caused by the weakening yen.
In the pharmaceutical industry, in which the Medical System Network Group operates, the environment remains
challenging due to ongoing government measures to contain medical expenditures, such as the review of community
support system premiums in the April 2022 revision of dispensing fees and the change from biennial to annual drug
price revisions.
In our Community Pharmacy Business, prescription unit prices declined due to the April 2022 drug price anddispensing fee revisions, but the contribution from newly opened and acquired stores offset the impact. The
Pharmaceutical Network Business saw record growth in the number of new network affiliates, as our efforts to improve
distribution were supported by pharmaceutical wholesalers. As a result, the Group recorded net sales of 109,551 million
yen (+2.7% YoY). On the profit side, the Community Pharmacy Business was affected by the revision of drug prices
and dispensing fees, as well as increased labor costs due to the strengthening of interpersonal operations. The Group
posted operating profit of 3,163 million yen (-17.9% YoY), ordinary profit of 3,355 million yen (-22.2% YoY), and profit
attributable to owners of parent of 1,610 million yen (-32.7% YoY).
Segment results were as follows. Net sales for each segment include intersegment sales.
1)

Community Pharmacy Network Segment
In the Community Pharmacy Network Segment, we aim to provide value across the 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, despite declining prescription unit prices due to drug price and dispensing fee
revisions, the number of prescriptions increased on the back of the contribution from newly opened and acquired stores.
During the fiscal year under review, we opened eight new community pharmacies, including six inside medical malls.
We also acquired one company (one store) by share purchase and one store by business transfer. As of March 31,
2023, the Company had 428 community pharmacies, one care plan center, and nine drug/cosmetic stores.
In the Pharmaceutical Network Business, we achieved a record number of new network affiliates as our distribution
improvement efforts were supported by pharmaceutical wholesalers. As of March 31, 2023, the total number ofpharmaceutical network affiliates was 8,912 (an increase of 1,511 from March 31, 2022), comprising 428 Group
pharmacies and 8,484 general network affiliates.
In the Manufacture and Market Pharmaceuticals Business, we offered 93 products (45 ingredients) as of March 31,
2023. We supplied these to 2,161 general network affiliates (an increase of 463 from March 31, 2022) and 1,148 otherpartner pharmacies, in addition to Group pharmacies.
In the Digital Shift Business, the number of pharmacies using our service and those placing orders grew steadily, withthe former reaching 3,391 as of March 31, 2023 (an increase of 2,480 from March 31, 2022) and the latter reaching
3,787 (an increase of 2,144 from March 31, 2022).
As a result, segment sales were 104,399 million yen (+2.9% YoY) and operating profit was 5,887 million yen (-3.8%
YoY).
2)

Leasing and Facility-related Segment
In the Leasing and Facility-related Segment, real estate rental income and management fees for managed properties

were generally firm, and segment sales increased 5.1% YoY to 3,494 million yen. In terms of profit, the segment
recorded an operating loss of 92 million yen (operating profit of 39 million yen in the same period of the previous fiscal
year) due to factors such as higher labor costs resulting from an increase in the number of employees to strengthen
sales, and higher utility costs stemming from rising energy prices.

2Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

As of March 31, 2023, Wisteria Senri-Chuo had an occupancy rate of 72.0% (59 out of 82 units occupied), andWisteria Minami-Ichijo had an occupancy rate of 68.1% (79 out of 116 units occupied). The overall occupancy rate at
the five serviced residences for the elderly stood at 80.4%. Going forward, we will continue to aggressively conduct
sales activities.
3)

Meal Catering Segment
In the Meal Catering Segment, the number of meals supplied declined due to the impact of COVID-19 and grossmargins fell due to higher purchase prices. Segment sales were 2,289 million yen (-1.4% YoY) and operating loss was
65 million yen (operating profit of 1 million yen in the same period of the previous fiscal year).
4)

Other Segment
The Other Segment provides home-visit nursing care. Segment sales were 304 million yen (-0.2% YoY) and operating

loss was 22 million yen (operating loss of 12 million yen in the same period of the previous fiscal year).

(2) Overview of Financial Position for the Fiscal Year Under Review
As of March 31, 2023, total assets were 66,223 million yen, an increase of 3,282 million yen from March 31, 2022.
Current assets amounted to 20,265 million yen, an increase of 1,564 million yen from March 31, 2022. This mainlyreflected increases in accounts receivable-trade and merchandise.
Non-current assets totaled 45,958 million yen, an increase of 1,718 million yen from March 31, 2022. This was mainly
attributable to an increase in leased assets (net).
Total liabilities were 51,735 million yen, an increase of 2,080 million yen from March 31, 2022. Current liabilities totaled
21,349 million yen, an increase of 913 million yen from March 31, 2022. This was mainly due to increases in accounts
payable-trade and the current portion of long-term borrowings. Non-current liabilities totaled 30,385 million yen, an
increase of 1,166 million yen from March 31, 2022. The main factor here was an increase in lease obligations, despitea decrease in long-term borrowings.
Net assets were 14,488 million yen, an increase of 1,201 million yen from March 31, 2022. This was mainly due toan increase in retained earnings.

(3) Overview of Cash Flows for the Fiscal Year Under Review(Status of cash flows)
As of March 31, 2023, cash and cash equivalents totaled 8,111 million yen, a decrease of 59 million yen comparedto March 31, 2022. Cash flows during the fiscal year ended March 31, 2023 are detailed below.
(Cash flows from operating activities)
Net cash provided by operating activities was 4,973 million yen (versus 4,010 million yen provided in the previous
fiscal year). This was primarily due to inflows of 3,019 million yen in profit before income taxes, 1,825 million yen in
depreciation, and 1,132 million yen in amortization of goodwill, offsetting an outflow of 1,294 million yen in income tax
paid.
(Cash flows from investing activities)
Net cash used in investing activities totaled 2,114 million yen (versus 2,511 million yen used in the previous fiscal
year). The main factor was an outflow of 1,373 million yen in purchase of property, plant, and equipment.
(Cash flows from financing activities)
Net cash used in financing activities totaled 2,918 million yen (versus 3,415 million yen used in the previous fiscal
year). This amount was primarily the result of a decrease of 2,269 million yen in borrowings.

3

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

Reference: Cash Flow Indicators

Equity ratio (%)
Equity ratio based on market
value (%)
Interest-bearing debt to cash
flow ratio (years)
Interest coverage ratio (times)

Fiscal year
ended March
31, 2019

Fiscal year
ended March
31, 2020

Fiscal year
ended March
31, 2021

Fiscal year
ended March
31, 2022

Fiscal year
ended March
31, 2023

15.6

14.2

17.3

21.1

21.8

23.2

19.7

33.3

26.2

18.2

13.7

8.9

6.3

7.4

6.1

11.8

17.5

24.4

21.9

18.0

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
Beginning in April 2021, drug price revisions, which were previously implemented biennially, became annual. In
addition, the transitional measures for community support system premiums, which were reviewed in the April 2022
dispensing fee revision, ended in March 2023. Under these circumstances, we believe that the need 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.
In the Community Pharmacy Business of the Community Pharmacy Network Segment, we will strengtheninterpersonal operations by fostering medical mindsets and facilitating high-quality pharmacotherapy while also
targeting prescription acquisition through our official “Tsunagaru Pharmacy” LINE account. In addition, we will step up
pharmacy development and expand our network by opening new stores, which will incur upfront expenditures in the
short term. In the Pharmaceutical Network Business, we view these circumstances as an opportunity for expansion andwill strive to acquire new network affiliates, provide comprehensive management support to pharmacies, and further
improve the efficiency of pharmaceutical distribution. In the Manufacture and Market Pharmaceuticals Business, we will
strengthen our supply chain to ensure stable supply and expand the customer base. In the Digital Shift Business, we
aim to expand the number of stores using our official “Tsunagaru Pharmacy” LINE account and improve our new service
offerings.
In the Leasing and Facility-related Segment, we aim to achieve an occupancy rate of 90% for all serviced residences
for the elderly.
Having considered these circumstances, the Company forecasts net sales of 112,500 million yen (+2.7% YoY),
EBITDA of 5,600 million yen (-8.5% YoY), operating profit of 2,600 million yen (-17.8% YoY), ordinary profit of 2,550
million yen (-24.0% YoY), and profit attributable to owners of parent of 1,000 million yen (-37.9% YoY) in the fiscal year
ending March 31, 2024.

(5) Dividend Policy and Dividends for the Fiscal Year Ended March 2023 and the Fiscal Year Ending March2024
Our basic policy is to continuously provide our shareholders with stable dividends commensurate with our businessperformance, while securing the internal reserves necessary to strengthen our financial position, expand the scale of4Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

our business, and develop our human resources.
For the fiscal year ended March 31, 2023, we plan to pay a year-end dividend of six yen per share. Annual dividends
will be 12 yen per share, including an interim dividend of six yen per share previously paid on December 12, 2022.
For the fiscal year ending March 31, 2024, we plan to reduce the dividend by two yen per share compared to thecurrent fiscal year, and to pay an interim dividend and a year-end dividend of five yen per share each (annual dividendof 10 yen per share). This amount was determined based on the consolidated earnings forecast for the fiscal year
ending March 31, 2024.

5

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

2. Group Companies
As of March 31, 2023, 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) 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.
2) 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 setting
economically rational prices in an appropriate manner (i.e., prices of individual items) with pharmaceutical wholesalers
and making payments on behalf of pharmacies, hospitals, and clinics, while also proposing inventory management
systems and providing slow moving inventory clearance services. Through these activities, we help improve theoperational 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
affiliates. 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.
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
6Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

Through this segment, we primarily develop locations for pharmacies and provide building leasing services. Additionally,
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

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

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) Challenges to be Addressed by the Company
Based on the current business environment and the 6th Medium-Term Management Plan, we will work to address
the following challenges.
In the Community Pharmacy Business of the Community Pharmacy Network Segment, we aim to obtain community
support system premiums by improving the family pharmacy function and home medical care, strengthen pharmacists’interpersonal operations, provide high-quality drug therapy, and promote prescription acquisition using online tools suchas the LINE app and electronic prescription transmission. In the Pharmaceutical Network Business, we will strengthen
our sales structure with the goal of having 12,000 network affiliates, improve distribution, and expand services for affiliate
pharmacies. We aim to have 10,400 network affiliates (a net increase of 1,488) by the end of March 2024. In the8Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

Manufacture and Market Pharmaceuticals Business, we will strengthen our supply chain to ensure stable supply andexpand our customer base, aiming to conduct business with 5,000 partner pharmacies by the end of March 2024. In
the Digital Shift Business, we will expand the number of stores using our official “Tsunagaru Pharmacy” LINE accountand enhance new service offerings, aiming to have a total of 5,300 stores using "Tsunagaru Pharmacy" and one million
registered users by the end of March 2024.
In the Leasing and Facility-related Segment, we target an occupancy rate of 90% for all serviced residences for theelderly. In the meal catering and home-visit nursing care businesses, we aim to stabilize the balance between income
and expenses.
On the financial front, we will strive to improve our equity ratio by thoroughly controlling costs across the company
and securing profits, thereby strengthening our financial foundation.

(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Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

5. Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheet(Millions of yen)
Fiscal year ended
March 31, 2023
(as of March 31, 2023)

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

8,201
2,891

8,141
3,437

954

1,039

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

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

18,701

20,26522,990(9,582)

23,406(10,242)

13,408

13,164

119
(110)

110
(107)

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

8

3

4,810
(3,174)

5,286(3,798)

1,636

1,488

8,847
1,284
(764)

8,916
3,879
(555)

Leased assets, net

520

3,323

Construction in progress

202

165

24,62427,06012,254401
111

11,183548
74

12,767

11,807

155
3,052
2,894
764
(19)

159
3,222
2,926
802
(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

6,848

7,090

44,23945,95862,941

66,223

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

(Millions of yen)
Fiscal year ended
March 31, 2023
(as of March 31, 2023)

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

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

9,937
1,016
5,152
209
600
1,569

38

2

2,635

2,861

20,435

21,34922,891740

20,226
3,913

600

637

210

243

3,752
1,023

4,157
1,208

29,21930,38549,65451,7352,128
1,182
10,393
(326)

2,128
1,182
11,606(326)

13,377

14,590

(7)

(2)

0

2

(102)

(139)

(108)

(139)

17

37

13,286

14,48862,941

66,223

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

(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, 2022
(from April 1, 2021
to March 31, 2022)
106,685
62,256(Millions of yen)
Fiscal year ended
March 31, 2023
(from April 1, 2022
to March 31, 2023)
109,551
63,629Gross profit

44,42945,921

Selling, general and administrative expenses

40,57642,758Operating profit

3,852

3,163

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

1
5
66
110
427
145

2
3
62
132
255
93

Total non-operating income

758

550

Interest expenses
Loss on sale of receivables
Miscellaneous losses

183
54
58

277
55
25

Total non-operating expenses

296

358

4,313

3,355

3
112
31

7
－

146

7

12
19
392
17
5

0
57
247
14
23

Non-operating expenses

Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
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 store closings
Other
Total extraordinary losses

－

447

343

Profit before income taxes

4,012

3,019

Income taxes – current
Income taxes – deferred

1,469
154

1,366
23

Total income taxes

1,624

1,389

Profit

2,388

1,630

(5)

19

2,394

1,610

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

12Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

Consolidated Statement of Comprehensive Income
Fiscal year ended
March 31, 2022
(from April 1, 2021
to March 31, 2022)
2,388(Millions of yen)
Fiscal year ended
March 31, 2023
(from April 1, 2022
to March 31, 2023)
1,630

17

4

4

1

(23)

(37)

(1)

(30)

Comprehensive income

2,386

1,599

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

2,392

1,580

(5)

19

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Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

(3) Consolidated Statement of Changes in Shareholders’ Equity
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

Total shareholders’equityTreasury shares

8,305

(344)

11,270Changes during period
Dividends of surplus

(305)

(305)

Profit attributable toowners of parent

2,394

2,394

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
Valuation
Total accumulateddifference on
Deferred gains or Remeasurements ofotheravailable-for-sale losses on hedges defined benefit plans comprehensive
securities
incomeBalance at beginning of
period

(24)

(3)

(78)

(106)

Non-controllinginterests

Total net assets

23

11,187

Changes during period
Dividends of surplus(305)

Profit attributable toowners of parent

2,394

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

13,28614

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

Fiscal year ended March 31, 2022 (April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
periodCapital surplus

2,128

Retained earnings

1,182

Total shareholders’equityTreasury shares

10,393(326)

13,377

Changes during period
Dividends of surplus

(397)

(397)

Profit attributable toowners of parent

1,610

1,610

Disposal of treasury
shares－Net changes of items
other thanshareholders’ equity
Total changes during
periodBalance at end of
period

－

－

1,213

－

1,213

2,128

1,182

11,606(326)

14,590

Accumulated other comprehensive income
Valuation
Total accumulateddifference on
Deferred gains or Remeasurements ofotheravailable-for-sale losses on hedges defined benefit plans comprehensive
securities
incomeBalance at beginning of
period

(7)

0

(102)

(108)

Non-controllinginterests

Total net assets

17

13,286

Changes during period
Dividends of surplus(397)

Profit attributable toowners of parent

1,610

Disposal of treasury
shares－Net changes of items
other thanshareholders’ equity

4

1

(37)

(30)

19

(11)

Total changes during
period

4

1

(37)

(30)

19

1,201

(2)

2

(139)

(139)

37

14,488

Balance at end of
period15

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

(4) Consolidated Statement of Cash Flows(Millions of yen)
Fiscal year ended

Fiscal year ended

March 31, 2022

March 31, 2023

(from April 1, 2021

(from April 1, 2022

to March 31, 2022)

to March 31, 2023)

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 point cardcertificates
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
Interest expenses
Loss (gain) on sale of investment securities
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

4,012
1,727
392
1,128
32

3,019
1,825
247
1,132
40

(45)

(36)

(10)

8

(2)

－

32

32

(198)

36

370

351

(7)
183
(112)
9
19
(31)
(214)

(5)
277

－
(505)

(218)

(84)

(19)

(20)

(406)
400

(377)
211

125

(139)

－
(7)
57

(115)

475

Subtotal

7,053

6,539

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

6(182)(2,866)

4(276)(1,294)

4,010

4,973

16

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

(Millions of yen)
Fiscal year ended
March 31, 2023
(from April 1, 2022
to March 31, 2023)

Fiscal year ended
March 31, 2022
(from April 1, 2021
to March 31, 2022)
Cash flows from investing activities
Payments into 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
Payments for acquisition of businesses
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
Proceeds from long-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

17(0)(1,934)(0)(1,373)

33

30

(194)
379

(234)

(209)

(54)

(293)
90
(2)
9
(401)
65
(54)

(80)
4
(130)
6
(296)
110
(95)

(2,511)(2,114)(2,901)
6,100(6,067)
(241)
(304)

－
3,200
(5,469)
(253)
(395)

(3,415)(2,918)(1,916)(59)

10,088

8,171

8,171

8,111

－

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

(5) Notes to Consolidated Financial Statements(Notes to going concern assumptions)None to be reported.
(Changes in presentation of Consolidated Statement of Changes in Shareholders’ Equity)
Fiscal year ended March 31, 2021 (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

Number of shares at
end of period

Decrease
25,000－464,055

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

Resolution

Class of shares

June 24, 2021
Ordinary General
Meeting of
Shareholders

Commonshares152

November 5, 2021
Board of Directors
meeting

Commonshares152

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

CommonsharesRetainedearnings

214

7.00

March 31,2022

June 23,2022

Note: Total dividends based on resolutions adopted during the Ordinary General Meeting of Shareholders held on June 22,2022 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).

18

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
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

464,055

Increase

Number of shares at
end of period

Decrease－－

464,055

Note: The number of treasury shares at the end of the fiscal year ended March 31, 2023 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).
3. Dividends(1) Dividends Paid
Total dividends(million yen)

Resolution

Class of shares

June 22, 2022
Ordinary General
Meeting of
Shareholders

Commonshares214

November 4, 2022
Board of Directors
meeting

Commonshares183

Dividend pershare (yen)Record date

Effective date

7.00

March 31, 2022

June 23, 2022

6.00

September 30,
2022

December 12,
2022

Notes:
1. Total dividends based on resolutions adopted during the Ordinary General Meeting of Shareholders held on June 22,2022 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 4, 2022
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, 2023, but the effective date falls in thefollowing year
Resolution

Class ofshares

Source ofdividends

Total cash
dividends(million yen)

Dividend pershare (yen)June 21, 2023
Ordinary General
Meeting of
Shareholders

CommonsharesRetainedearnings

183

6.00

Record date

Effective date

March 31, 2023

June 22, 2023

Note: Total dividends based on resolutions to be adopted during the Ordinary General Meeting of Shareholders to be heldon June 21, 2023 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 for19Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

dispensing 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.

3. Information on net sales, profit (loss), assets, liabilities, and other items by reporting segment
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.

20

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(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

104,366

2,590

2,289

304

109,551－

109,551

32

903

0

－

937

(937)

－

Total

104,399

3,494

2,289

304

110,488(937)

109,551

Segment profit (loss)

5,887

(92)

(65)

(22)

5,706

(2,542)

3,163

Segment assets

46,082

16,839720

63

63,7052,518

66,223

Depreciation

1,119

575

1

1

1,697

128

1,825

Amortization of
goodwill

1,131

－

－

－

1,131

0

1,132

Impairment loss

239

6

1

－

247

－

247

Other items

Increase in property,
plant and equipment
4,561
114
8
2
4,687
247
4,935
and intangible assets
Notes:
1. Adjustments are as follows:(1) Adjustment of -2,542 million yen for segment profit (loss) includes 243 million yen in elimination of intersegment
transactions and -2,785 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 2,518 million yen for segment assets includes -6,006 million yen in elimination of intersegment
receivables and payables and companywide assets of 8,525 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 247 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, 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.

21Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
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, 2022(April 1, 2021 to March 31, 2022)
Descriptions have been omitted because similar information is disclosed in the segment information section.
Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
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, 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.
Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)
Reporting segment
Community
Pharmacy
Network

Leasing andFacilityrelated

Meal
Catering

Other

Unadjusted
Total

Companywide
andeliminations

Total

Balance at
11,183
11,183
11,183－－－－end of period
Note: Information concerning amortization of goodwill has been omitted because similar information has been disclosed in
the segment information section.
(Information concerning gains on bargain purchase for each reporting segment)
Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
The Company recorded no significant gains on bargain purchase.
Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
The Company recorded no significant gains on bargain purchase.
22Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

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

Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Net assets per share (yen)439.67370.23
Net assets per
share (yen)478.86

Earnings per share (yen)79.35

72.51 (yen)Earnings per share

53.38

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, 2022
(as of March 31, 2022)

Fiscal year ended
March 31, 2023
(as of March 31, 2023)

Total net assets (million yen)

13,286

14,488Amount deducted from total net assets (million
yen)

17

37

Of which, non-controlling interests (million yen)

(17)

(37)

Net assets associated with common shares in the
13,26814,451Company (million yen)
Number of year-end common shares used in the
30,178,545
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 401,000 shares for the fiscal year ended March
31, 2022 and 401,000 shares for the fiscal year ended March 31, 2023.
3. The basis for calculation of earnings per share is as follows.
Item

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

Fiscal year ended March
31, 2023(April 1, 2022 to March
31, 2023)

2,394

1,610

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
2,394
1,610
shares in the parent company (million yen)
Average number of common shares during the30,170,942
30,178,545
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 was408,602 shares for the fiscal year ended March 31, 2022 and 401,000
shares for the fiscal year ended March 31, 2023.
(Significant subsequent events)
None to be reported.

23