Summary of Financial Statements for Fiscal Year Ended April 2011
May 30, 2011
Name of listed company:

AIN PHARMACIEZ INC.

Exchange listed on:First Section of Tokyo Stock Exchange and Sapporo Securities Exchange

Code number:

9627

Representative:
Inquiries:

Kiichi Otani, President and Representative Director
Hiromi Kato, Senior Managing Director and Chief Director of Administration, TEL: +81-11-783-0189

URL:

http://www.ainj.co.jp/

Date of the ordinary general meeting of shareholders:Date of scheduled payment of dividends:
Date of filing securities report:

July 28, 2011
July 29, 2011
July 29, 2011

Supplementary documents for this summary of financial statements:

Yes

Explanation meeting for financial resultsYes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen.)

1. Consolidated results for the fiscal year ended April 2011 (from May 1, 2010 to April 30, 2011)(Percentage figures show year-on-year changes.)(1) Consolidated operating results
Net salesYear ended April 30, 2011
Year ended April 30, 2010

Operating income

Ordinary income

Net income

Million yen%

Million yen%

Million yen%

Million yen%

129,387
125,495

3.1
8.8

8,107
6,492

24.9
22.6

8,210
6,362

29.0
26.2

3,916
3,131

25.1
47.2

(Note) Comprehensive income:Year ended April 30, 2011: ¥3,822 million (17.0%)
Year ended April 30, 2010: ¥3,265 million (－ %)Return on
shareholders’equityNet income
per share

Diluted net income
per share

Yen

Yen

%

%

%

255.67228.08－227.94

15.4
16.7

11.5
9.9

6.3
5.2

Year ended April 30, 2011
Year ended April 30, 2010

Ordinary income
to total assets

Operating income
to net sales(Reference) Equity in earnings of affiliates: Year ended April 30, 2011: ¥ － million, Year ended April 30, 2010: ¥ － million(2) Consolidated financial position
Total assets
As of April 30, 2011
As of April 30, 2010

Net assets

Shareholders’ equity ratio

Net assets per share

Million yen

Million yen%

Yen76,94065,89829,49821,49238.3
32.5

1,847.46
1,520.81(Reference) Equity capital: As of April 30, 2011: ¥29,450 million,

April 30, 2010: ¥21,445 million(3) Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash and cash
equivalents at end ofyear

Cash flows fromfinancing activities

Million yen

Million yen

Million yen

Million yen

7,627
6,428

(3,881)(2,700)463(1,773)

15,397
11,188Year ended April 30, 2011
Year ended April 30, 2010

2. Dividends
Dividends per share(Record date)1Q-endYen

2Q-end3Q-endYen

Yen

Year-end

AnnualYen

YenMillion yen

564
717

Year ended April 30, 2011

－
－

0.00
0.00

－
－

40.00
45.00

40.00
45.00

Year ending April 30,
2012 (forecast)

－

0.00

－

50.00

50.00

Year ended April 30, 2010

Total
dividends(annual)Dividends Dividends on
payout ratio net assets(consolidated) (consolidated)
%
%

17.5
17.6
16.4

(Note) Year-end dividend per share for the year ended April 30, 2010 includes commemorative dividend of ¥5.00.

2.9
2.7

3. Consolidated financial forecast for the fiscal year ending April 30, 2012 (from May 1, 2011 to April 30, 2012)(Percentage figures show year-on-year changes.)

Net salesFirst half
Full year

Operating income

Ordinary income

Net income
per share

Net income

Million yen%

Million yen%

Million yen%

Million yen%

Yen

68,000143,000

10.0
10.5

4,080
9,670

19.4
19.3

4,010
9,500

15.6
15.7

1,970
4,850

16.1
23.8

123.56304.194. Other(1) Major changes in subsidiaries during the fiscal year (changes in specified subsidiaries resulting in changes
in scope of consolidation): None
(2) Changes in accounting principles, procedures and presentation methods used in preparation of theconsolidated financial statements
1) Changes as a result of revisions of accounting standards: Yes
2) Changes other than 1): None
(3) Number of outstanding shares (common stock)1) Number of outstanding shares at the end of the fiscal year (including treasury stock):
As of April 30, 2011: 15,944,106 shares
As of April 30, 2010: 14,104,106 shares
2) Number of shares held in treasury at the end of the fiscal year:
As of April 30, 2011: 3,102 shares
As of April 30, 2010: 2,942 shares
3) Average number of shares during the period:
Fiscal year ended April 30, 2011: 15,320,242 sharesFiscal year ended April 30, 2010: 13,728,534 shares*Status of execution of the audit procedures of financial statements:
The procedure for the review of the financial statements under the Financial Instruments and Exchange Act was notcomplete at the moment of disclosing this summary.
*Statement regarding the proper use of financial forecasts and other special remarks
The above forecasts are calculated based on the information available as of the publication date of this material, andactual financial results may vary due to change in future economic conditions and others.

Contents
1. Operating results.............................................................................................................................................2(1) Analysis of operating results.......................................................................................................................................2(2) Analysis of financial position.......................................................................................................................................4(3) Basic policies for profit distribution, and dividends for the current fiscal year and the next fiscal year ............................6(4) Business and other risks ............................................................................................................................................7

2. State of the Group.........................................................................................................................................10
3. Management policies .................................................................................................................................... 12(1) Basic management policies of the Company.............................................................................................................12(2) Target management indicators .................................................................................................................................12(3) The Group’s medium- to long-term management strategies.......................................................................................12(4) Issues to be addressed ............................................................................................................................................12

4. Consolidated financial statements .................................................................................................................13(1) Consolidated balance sheets ...................................................................................................................................13(2) Consolidated statements of income and comprehensive income ...............................................................................15
Consolidated statements of income ...............................................................................................................................15
Consolidated statements of comprehensive income .......................................................................................................17(3) Consolidated statements of changes in net assets ....................................................................................................18(4) Consolidated statements of cash flows .....................................................................................................................20(Segment Information, etc.) ...........................................................................................................................................22-1-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

1. Operating results(1) Analysis of operating results
During the fiscal year under review, the Japanese economy saw production and personal consumption pickup, led by improving corporate earnings. In the aftermath of the Great East Japan Earthquake and amid
electricity supply restrictions, production activity slackened and exports weakened, giving rise to concerns overa slowdown in the economic recovery.
Against this economic background, the AIN PHARMACIES Group (the Group) aggressively expanded its
dispensing pharmacy and urban drug and cosmetic store business through new store openings and M&As.
The Group also focused on enhancing its profitability, in particular by consolidating indirect operations acrossthe Group companies and by harnessing economies of scale.
For the purpose of further expanding its business operations, the Company increased its capital through a
pubic offering and private placement of new shares of a total amount of ¥4.7 billion, pursuant to a resolution by
its Board of Directors in August 2010, thereby strengthening the Group’s financial structure.
In terms of operating results for the fiscal year under review, through the opening of new dispensing
pharmacies and urban drug and cosmetic stores as well as the implementation of M&A deals in the dispensing
pharmacy business, we achieved the highest records both in sales and profits with the net sales of ¥129,387
million (3.1% up year-on-year), ordinary income of ¥8,210 million (29.0% up year-on-year), and net income of¥3,916 million (25.1% up year-on-year). The Group’s total number of dispensing pharmacies and drugstoresreached 501 at the end of the fiscal year.
The Group had 115 dispensing pharmacies in the Tohoku region and in Ibaraki Prefecture and one drugstore
in Sendai City that were operating on the day the Great East Japan Earthquake struck.
We promptly carried out recovery work at these stores. With the exception of one store that was damaged by
the tsunami and three stores located within the areas placed under special alert or to which evacuation orders
were issued following the Fukushima nuclear accident, all these stores stayed operational or came back into
operation within three weeks. As a result, we recorded ¥59 million in extraordinary losses as recognition ofdamage resulting from the disaster, including inventory and fixed asset losses, repair and other restoration
expenses (including allowances), and one-time expenses required for business continuity and other reasons.
Performance by business segment was as follows.

(Dispensing pharmacy business)
The dispensing pharmacy business reported increases in sales and profits. Although sales at existing
dispensing pharmacies decreased year on year affected by the revisions to the official drug prices andprescription dispensing fees in April 2010, factors such as business expansion through new store openings
and M&As, promotions to increase the use of generic drugs, and the streamlining of dispensing pharmacy
operations contributed to the favorable operating results.
As for the generic drugs, each dispensing pharmacy endeavored actively to promote the greater use ofgeneric drugs through communication with patients.
The percentage technical fees for dispensing pharmacists improved as a result of earning an additional
points in reward for improved amount of generic drugs dispensed. In addition, WHOLESALE STARS Co., Ltd.,a wholesaling subsidiary that specializes in generic drugs, performed well. These two factors also boosted
segment sales and profits.
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AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

As we are currently in the midst of a transitional phase because of the change to a six-year curriculum inpharmaceutical education at colleges, we have hired almost no new graduates as pharmacists during April
2010 and in April 2011. Accordingly, personnel divisions across the Group have joined forces and are now
undertaking activities on a national scale to ensure the hiring of a large number of new graduates as
pharmacists in April 2012.
The Group consolidated six dispensing pharmacy business operators as subsidiaries during the third quarter
after giving careful consideration to the potential return on investment in M&As. This added a total of 33 newdispensing pharmacies to the Group.
Within the Group, the Company (surviving company) merged with MEDICAL HEARTLAND Co., Ltd.
(Yamagata City) on April 1, 2011, and Asahi Pharmacy Co., Ltd. (Tokyo, surviving company) merged with
Saitama Chozai Co., Ltd. (Tokyo) on the same day. All of these consolidations were designed to reducehead-office costs and other administrative expenses.
In the fiscal year under review, we opened 53 stores, including those added through the above-noted M&As,
and closed 5 stores, bringing the total number of dispensing pharmacies to 448 (including those storestemporarily closed following the Great East Japan Earthquake and the Fukushima nuclear accident, andfranchise stores). This segment posted net sales of ¥114,354 million (2.5% up year on year) and segment
income of ¥10,209 million (20.2% up year on year).

(Drug and cosmetic store business)
Personal consumption as a whole remained on the recovery path, but the drugstore industry continued to
face a very challenging business climate. Competition for store openings and prices intensified, as a result of
the entry into the pharmaceutical retail market of players from outside the industry, and also due to M&As andalliances among peers within the industry.
In its drug and cosmetic store business, the Group operates ainz & tulpe urban drug and cosmetic stores andtulpe cosmetic specialty stores, which sell a wide range of cosmetics and other beauty products. Employing
various concepts in tune with the latest fashions, the Group is continuing to open stores at roadsides and in
station buildings and large commercial facilities in the centers of major cities across the country.
The Group is working on opening new ainz & tulpe and tulpe stores to expand sales. In addition, the Group has
been strategically restructuring its merchandise mixes, reviewing expenses, and improving operational
techniques to ensure profitability.
In order to enhance customer convenience, the Company sought to bolster sales efforts, especially in drug
(pharmaceutical) sections, which are the driver of the segment business in tandem with their cosmetic (beauty)
sections. We embarked on a review of product mixes and renovating sales spaces for drugs.
Our experiment with the renovation of six stores during the fiscal year confirmed the effectiveness of having anenhanced drug section in revitalizing and improving the profitability of the entire store, including its cosmetic
products section. Accordingly, we intend to go ahead with similar initiatives at other stores.
In the fiscal year under review, we opened 6 new stores in total, including ODORI BISSE store (Chuo ward,
Sapporo city) and Tokyo Station store (Chiyoda ward, Tokyo) and other 3 ainz & tulpe stores and 1 tulpe store
while closing 2 small stores. The total number of drug and cosmetic stores including a subsidiary AIN MEDIO
Inc. was 53.
The Ainz Point Club Card, an indicator of the number of customers, has more than 2.38 million members, up-3-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

360 thousand members from the year-ago period.
Sales at existing stores did not exceed the previous year’s level, in particular because the increase in sales of
new influenza-related products in the previous year could not be replicated elsewhere and because consumers
refrained from purchasing high-priced products. However, buoyed by sales from new stores, this segment posted
net sales of ¥14,821 million (8.8% up year on year) and a segment loss of ¥207 million (a loss of ¥398 million in
the previous fiscal year).

(Other businesses)
Net sales of other businesses were ¥211 million (22.6% down year on year) and segment loss was ¥78 million(a loss of ¥68 million for the previous fiscal year).

For the next fiscal year, we will achieve our goal of opening around 50 stores in total, including dispensing
pharmacies and urban drug and cosmetic stores, in our continued pursuit of expanding the Group’s
operational scale. For this purpose, we will reinforce our business development division both in the dispensing
pharmacy and drug and cosmetic store businesses.
At the same time, we will enhance our profitability by harnessing economies of scale, streamlining our business
operations through cooperation between Group companies, and by promoting the use of generic drugs. We will
also intensify sales/marketing efforts and improve operational processes in the drug and cosmetic store business.
With these measures, the Group’s performance for the next fiscal year is expected to be the highest everboth in sales and profits with the net sales of ¥143,000 million (10.5% up year on year), ordinary income of¥9,500 million (15.7% up year-on-year), and net income of ¥4,850 million (23.8% up year-on-year).

(2) Analysis of financial position
1) Assets, liabilities and net assets
Consolidated current assets at the end of the fiscal year under review increased by ¥6,790 million to ¥38,032
million compared to ¥31,242 million at the end of the previous fiscal year.
This was the result of efforts to improve liquidity on hand to provide funding flexibility for more than 50 store
openings per year and for M&As, and represented an increase in cash on hand and in banks to ¥15,437 million(¥4,249 million up year on year). In addition, the expansion in the number of dispensing pharmacies and drug
and cosmetic stores has resulted in an increase in notes and accounts receivable to ¥10,247 million (¥978 million
up year on year) and merchandise and supplies to ¥8,375 million (¥1,437 million up year on year).
Consolidated fixed assets at the end of the fiscal year under review increased by ¥4,229 million to ¥38,871
million compared to ¥34,642 million at the end of the previous fiscal year.
This is mainly because of the increase in property, plant and equipment to ¥13,451 million (¥940 million up year
on year) reflecting investments related to new store openings and fixed assets of consolidated subsidiaries
acquired through M&As, and of the increase in goodwill to ¥13,867 million (¥1,712 million up year on year).
Liabilities increased by ¥3,034 million to ¥47,441 million compared to ¥44,406 million at the end of the previous
year.
The primary cause of this was that accrued income taxes increased to ¥2,421 million (¥712 million up year onyear) and deposits received increased to ¥6,722 million (¥3,686 million up year on year) as a result of the-4-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011group-wide consolidation of schemes to liquidate dispensing fees receivable.
Interest-bearing debts reflected a decrease in the balance of short-term debts to ¥5,883 million (¥666 million
down year on year) and a decrease in the balance of long-term debts to ¥7,147 million (¥1,279 million down year
on year). It also reflected a new addition to corporate bonds, of ¥184 million, which was stemmed from newly
consolidated subsidiaries.
As a result of the above, the balance of current liabilities increased by ¥3,476 million from the previous
year-end balance of ¥34,140 million to ¥37,616 million, and the balance of long-term liabilities decreased by¥441 million from the previous year-end balance of ¥10,266 million to ¥9,824 million.
Net assets increased by ¥8,006 million to ¥29,498 million compared to ¥21,492 million at the end of theprevious fiscal year.
This was because the issuance of new shares through public offering and private placement increased thecommon stock to ¥8,682 million (¥2,374 million up year on year) and the capital surplus to ¥7,872 million( ¥2,374 million up year on year) while the balance of retained earnings rose to ¥13,227 million (¥3,352 million
up year on year) due to the growth of retained earnings in the fiscal year.
Net unrealized losses on available-for-sale securities totaled ¥327 million.
As a result of the above factors, shareholders’ equity ratio was 38.3%, compared with 32.5% at the end of
the previous fiscal year.

2) Cash flows
During the fiscal year under review, consolidated cash and cash equivalents (hereinafter “cash”) increased
by 37.6%, or ¥4,209 million from the previous fiscal year to ¥15,397 million. This is due to increases made inoperating cash flow for business expansion, investments undertaken focusing on new store openings andM&As, and improvements to the Group’s financial structure, and better liquidity.
Cash flows from each category and their relevant factors are as follows.

(Cash flows from operating activities)
Net cash provided by operating activities was ¥7,627 million (18.6% up year on year).
The main factors generating inflow were income before income taxes and minority interests of ¥7,644 million,
depreciation and amortization of ¥1,560 million, and amortization of goodwill of ¥973 million. This increase wasattributable to the higher profit resulting from new store openings and M&As.
The main factors generating outflow were the increase of ¥1,130 million in inventories and ¥3,365 million inincome and other taxes paid.

(Cash flows from investing activities)
Net cash used in investing activities was ¥3,881 million (43.7% up year on year)
This reflects the payments of ¥1,554 million for the purchase of fixed assets associated with new store
openings and renovations, etc. of urban drug and cosmetic stores and dispensing pharmacies, and of ¥1,635
million for the purchase of subsidiaries’ shares resulting in changes in the scope of consolidation associatedwith purchases of shares in subsidiaries acquired through M&As. The investments relating to the foregoing
were funded by internal sources and by proceeds raised by the issuance of new shares pursuant to a resolution
by the Board of Directors on August 4, 2009 and on August 17, 2010.
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AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

(Cash flows from financing activities)
Net cash used in financing activities was ¥463 million (outflow of ¥1,773 million in the previous fiscal year).
This was mainly because of an inflow of ¥4,720 million attributable to the issuance of new shares throughpublic offering and private placement.
In terms of interest-bearing debts, the following net figures for borrowings and repayments are reflected in
the results: ¥1,153 million repaid for short-term borrowings, ¥2,283 million repaid for long-term borrowings.
There was also an outflow of ¥564 million in dividends paid.
Changes in the Group’s cash flow indicators are shown below.
Year endedApril 30, 2008

Year endedApril 30, 2009

Year endedApril 30, 2010

Year endedApril 30, 2011

Shareholders‘ equity ratio (%)

20.9

25.9

32.5

38.3

Equity ratio based on market value
(%)

29.4

30.6

62.5

64.5

Debt redemption term (years)

2.2

4.3

2.3

1.7

Interest coverage ratio (times)

23.2

12.0

22.1

31.4

(Notes) Shareholders’ equity ratio = Equity capital / total assets
Equity ratio based on market value = market capitalization / total assets
Debt redemption term = interest-bearing debt / operating cash flows
Interest coverage ratio = operating cash flows / interest paid
*All indicators are calculated based on consolidated financial data.
*Interest-bearing debt includes all liabilities recorded on the balance sheet on which interest is being paid.
*Operating cash flows and interest paid were calculated using the cash flows from operating activities and the interest paidon the consolidated statements of cash flows.

(3) Basic policies for profit distribution, and dividends for the current fiscal year and the next fiscal year
The Company considers the return of profits to shareholders as an important management issue. Our basic
policy is to repay our investors proportionate to the profit we make, and to maintain these at stable levels.
Internal reserves are held to strengthen the corporate structure and in preparation for new store openings
and future development of the business. We will make effective use of these funds to generate profits to be
returned to shareholders in the future.
The Company’s basic policy is to pay dividends from retained earnings once per year at the end of the fiscal
year. The year-end dividend to be paid is determined at the ordinary general meeting of shareholders, andinterim dividends are set at the Board of Directors’ meeting. Further, the Company has stated in its Articles ofIncorporation that “When approved by the Board of Directors’ meeting, interim dividends may be paid based ona record date of 31st October each year.”
Regarding dividends from retained earnings in the fiscal year under review, we plan to pay ¥45 per share,compared with ¥40 per share in total in the previous fiscal year (comprised of ¥35 per share as ordinary
dividend and ¥5 per share as commemorative dividend for the Company’s listing on the First Section of theTokyo Stock Exchange).
In view of our profit forecasts, ordinary dividends from retained earnings for the following fiscal year areplanned to be ¥50 per share, an increase of ¥5 from the previous term’s ordinary dividends.

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AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011(4) Business and other risks
The following factors may affect the Group’s operating results, stock price and financial position. Statements inthe text referring to the future reflect the judgment of the Group at the end of the current fiscal year.

1) Laws and regulations(i) Regulations under the Pharmaceutical Affairs Law and other laws
We operate dispensing pharmacy business under various permits, licenses, registrations and notifications
including those set forth by the Pharmaceutical Affairs Law, the Health Insurance Law, and the Pharmacists
Law, under the supervision of the Ministry of Health, Labour and Welfare, and of prefectural health andwelfare departments. The drugstore business in our drug and cosmetic store business also involves drug
sales, which are similarly regulated under the Pharmaceutical Affairs Law.
The main ones are as follows.
Approval, registration, appointment,
license or notification

Term ofvalidity

Related law or ordinance

Permit to open a pharmacy

6 years

Pharmaceutical Affairs
Law

Prefectural Governors

Insurance pharmacy certification

6 years

Health Insurance Law

Prefectural Social
Insurance Bureau
Heads

License to sell narcotic drugs
Notification of sales of medical
equipment
Business selling highly controlled
medical equipment
Medical product sales permit (Note)

Narcotics andPsychotropics Control
Law
Pharmaceutical Affairs
Indefinite
Law
Pharmaceutical Affairs
6 years
Law
Pharmaceutical Affairs
6 yearsLaw
2 years

GrantorPrefectural Governors
Prefectural Governors
Prefectural Governors
Prefectural Governors,
etc.

(Note) Under Article 25 of the Pharmaceutical Affairs Law, medical product sales permits fall into the three categories:
Store-based drug sellers, drug sellers by household distribution and drug sellers by wholesale distribution. The
Group’s drug and cosmetic store business has a permit for store-based drug sales under this law and also for the drug
sellers with first-class license and drug retailers with second-class license categories from the previous law which isallowed under the “Law for Partial Revision of the Pharmaceuticals Affairs Law,” (Law No. 69, June 14, 2006). If theGroup becomes the subject of an order of revocation or suspension of business license by the competent authorities
due to an act committed in the Group’s dispensing pharmacy and drug and cosmetic store businesses, whichconstitutes a violation of law set forth in Paragraph 1, Article 75 of the Pharmaceutical Affairs Law, items in Article 80of the Health Insurance Law, or Paragraph 1, Article 51 of the Narcotics and Psychotropic Control Law, the Group’s
performance may be affected.

(ii) Easing of drug sales regulations
Under the “Law for Partial Revision of the Pharmaceutical Affairs Law” (Law No. 69, June 14, 2006), which
includes a review of the sales system for over-the-counter (OTC) drugs; OTC drugs are categorized into
three groups by risk. It has thus possible to sell the two lower-risk categories of drugs as a “Registered
Vendor,” not requiring a pharmacist. Factors such as the entry into the market of firms from other industries
as a result of a continuing trend in the future to deregulate drug sales may affect the Group’s performance.

2) Details of businessIn the Group’s dispensing pharmacy business, we have a chain of dispensing pharmacies based on ascheme, in which pharmacies near hospital* to concentrate on the prescriptions from such medical institutions
to secure demand.
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AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

As the dispensing pharmacy business accounted for 88.4% of net sales in the fiscal year under review, weplan to continue the multi-store operation mainly based on dispensing pharmacies. Accordingly, the Group’s
operating results may be affected by the success or failure of the store opening policies and by trends in store
openings by competitors in the same industry.
Furthermore, sales of dispensing pharmacies significantly depend on the medical institutions that write
prescriptions. Therefore, some hard-to-predict factors including the issuance of outside-the-hospitalprescriptions by the medical institutions or suspension/discontinuation of operations thereof may affect theGroup’s performance.
*dispensing pharmacies located very near to medical institutions that mainly handle prescriptions from the facilities

3) Industry trends
The revenues in our dispensing pharmacy business come from pharmacy operations involving the dispensing
and supplying of dispensing drugs based on prescriptions. The drug prices and dispensing fees are set by the
Ministry of Health, Labour and Welfare. As a way to contract medical expenses, both medical treatment feesand drug prices are being revised incrementally. In the future as well, changes in profit structure resulting
from factors such as revisions in the medical treatment fee system could continue to affect the Group’s
performance and financial position.

4) Retention of qualified staff
Dispensing pharmacies and drugstores (Stores for Category 1 Drugs) are required by the Pharmaceutical
Affairs Law to have a pharmacist on site; the Pharmacists Law stipulates that the dispensing of drugs must be
handled by a pharmacist. The Group continues to have a policy of expansion by aggressively opening newstores, but if it becomes difficult to secure qualified pharmacists, this could affect our store openings and theGroup’s performance.

5) Risks of loss of trust in the Company(i) Dispensing operation
In our dispensing pharmacy business, pharmacists dispense and supply prescription drugs that affect thehuman body. This business carries the risk that medical accidents might be caused through errors indispensing drugs.
The Group recognizes that any medical accidents could have a severely damaging effect on society’s
confidence in the Group, and we place the highest priority on measures to avoid the risk from all aspects.
Primary risk prevention measures are as follows.
•

Training programs for new hires, including a three-month training program for newly-graduatedpharmacists and programs for mid-career pharmacists•

A continuing training program aimed at improving skills of pharmacists•

Pharmacy manager conferences attended by all pharmacy managers, to nurture supervisors•

Development of a drug dispensing error prevention system (PhAIN) using Personal Digital
Assistants (PDAs). Development and introduction of pharmacy equipment that make use of
information technology, such as the automation of dispensing operations.

•

Use of in-house manuals for the dispensing operation and a system of observing rules set by the-8-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

Internal Audit Office•

Establishment of a Safety Policy Office specializing in measures to prevent dispensing errors(ii) Protection of personal data
We possess patient data in the dispensing pharmacy business, including medical histories and prescription
information, and we possess personal data in the drug and cosmetic store business obtained from the Ainz
Point Club Card.
The Group has completed development of personal information protection systems and rules for thehandling of such information. The Company acquired the Privacy Mark accreditation in the healthcare,
medical and social service fields.
However, we believe it is possible that any accidental or illegal leakage of personal data may not only
affect the Group’s performance but also lead to a loss of society’s confidence in the Group.

6) Risk in business strategy
We have promoted the expansion of the business scale of dispensing pharmacies through actively promoting
new store openings and M&A.
Our basic policies regarding M&A strategy require us to carefully examine target companies and determine
the amount to be paid for acquisitions thereof in order to stably secure a profitability level that exceeds theamortization of goodwill to be incurred. If matters do not go as planned, however, we may incur loss on
valuation of shares in subsidiaries and impairment loss on goodwill, which may have an adverse impact on
the Group’s operating results and financial position.

7) Risk of financial fluctuation
In the Group’s promotion of business expansion based on actively promoting new store openings and M&A,
costs for ordinary store openings are covered by its own resources within the range of operating cash flow,
while in large-scale M&A, costs are partially financed by borrowings from financial institutions.
To flexibly respond to these capital needs, the Group improved liquidity on hand through such means asincreasing our capital through a public offering. As of the end of the current fiscal year, the balance of cash on
hand in banks of ¥15,437 million, while the balance of interest-bearing debts of the Group was ¥13,214 million.
We focus on possibility of return on investment and seek to reduce interest-bearing debts through efficientinvestment in implementing M&A deals. However, if the Group fails to secure an adequate return on its M&A
investment, or due to interest rate fluctuations associated with conditions in financial market, the Group’s
financial position and operating results including interest payable may be affected.

-9-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

2. State of the GroupThe Group consists of AIN PHARMACIEZ Inc. (the Company), 18 subsidiaries and 3 affiliated companies.
(1) Dispensing pharmacy business
The Company operates and franchises dispensing pharmacies, and engages in consulting on the opening ofdispensing pharmacies.
The subsidiaries AIN MEDICAL SYSTEMS Inc., AIN MEDIO Inc., MEDICAL HEARTLAND Co., Ltd.,DAICHIKU Co., Ltd., Asahi Pharmacy Co., Ltd., Saitama Chozai Co., Ltd. and seven other subsidiaries operate
dispensing pharmacies.
Subsidiary MEDIWEL Corp. is a medical-related consulting business and is engaged in staff dispatching andintroduction, primarily of doctors and pharmacists, subsidiary United Healthcare Corporation is engaged in a
medical-related consulting business, and subsidiary WHOLESALE STARS Co., Ltd. sells generic drugs, etc.
Also, MEDICAL HEARTLAND Co., Ltd. became a defunct company following its merger with the Company
as of April 1, 2011. Saitama Chozai Co., Ltd. became a defunct company following its merger with Asahi
Pharmacy Co., Ltd. as of April 1, 2011.
(2) Drug and cosmetic store business
The Company and AIN MEDIO Inc. engages in the management of drugstores (sales of drugs, quasi-drugs,
cosmetics, food, general merchandise, etc.), and in consulting on the opening of shopping centers.
(3) Other businesses
The Company and subsidiaries of AIN AID Inc. and NICE AIN Inc. are in the building leasing business.

An organization chart of the business is as follows.

- 10 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

Dispensing and sales ofdrugs

Dispensing pharmacy operation

AIN MEDIO Inc.

*1

DAICHIKU Co., Ltd.

*1

Asahi Pharmacy Co., Ltd.

*1

Patients*1(and 9 other consolidated subsidiaries)*2

Wholesale of generic drugs, etc.

Sales of generic drugs, etc.

WHOLESALE STARS Co., Ltd. *1

MEDIWEL Corp.

*1

Various types of consulting
Support of staff dispatching,introduction, and recruitment

United Healthcare Corporation *1
ProCare Co., Ltd.

*2

AIN MEDIO Inc.

*1

Seven Health Care Inc.

*2

*1

NICE AIN Inc.

*1

(Notes) *1 consolidated subsidiaryGroup companies/
General contract
counterparties

Other
business

Building leasing

AIN AID Inc.

Consumers

Drug and cosmetic
store business

Sales of cosmetics,
drugs, etc.

Drugstores operation

Contract
counterparties

Medical consulting

Pharmacies/
Medical institutions

YAGI PHARMACY Inc.
AIN PHARMACIEZ Inc.

Dispensing pharmacy business

AIN MEDICAL SYSTEMS Inc.

*2 affiliated company not accounted under the equity method- 11 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

3. Management policies(1) Basic management policies of the Company(2) Target management indicators(3) The Group’s medium- to long-term management strategies(4) Issues to be addressed
Disclosure of explanations regarding the above matters is omitted since there is no significant change from
Summary of Financial Statements for Fiscal Year Ended April 2010 (as of June 3, 2010).
The details can be checked on the website below;(AIN PHARMACIEZ, Inc.)
http://www.ainj.co.jp/(Tokyo Stock Exchange: Listed company search)
http://www.tse.or.jp/lsting/compsearch/index.html- 12 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

4. Consolidated financial statements(1) Consolidated balance sheets(Thousand yen)Previous fiscal year
(As of April 30, 2010)
AssetsCurrent assets
Cash on hand and in banks
Notes and accounts receivable
Merchandise
Supplies
Deferred tax assets
Short-term loans
Other accounts receivable
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
LandConstruction in progress
Other property, plant and equipment
Accumulated depreciation
Other property, plant and equipment, net
Total property, plant and equipment
Intangible fixed assets
Goodwill
Other intangible fixed assets
Total intangible fixed assets
Investments and other assets
Investments in securities
Deferred tax assets
Deposits and guarantees
Other investments and other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Deferred assets
Stock issuance cost
Total deferred assets
Total assets- 13 -

Current fiscal year
(As of April 30, 2011)11,188,462
9,269,803
6,841,202
96,821
723,032
892,880
1,404,247
850,723(24,957)
31,242,215

15,437,879
10,247,872
8,268,413
107,455
928,606
235,400
2,036,824
898,265(127,879)
38,032,838

10,382,023(4,388,578)
5,993,445
5,001,721
315,331
3,139,820(1,939,520)
1,200,300
12,510,799

12,128,606(5,672,056)
6,456,550
5,420,785
235,672
3,762,454(2,424,084)
1,338,369
13,451,378

12,154,420
923,368
13,077,789

13,867,280
960,649
14,827,929

2,802,672
995,611
4,462,540
1,013,395(220,215)
9,054,003
34,642,592

2,959,577
1,233,263
4,990,283
1,638,972(229,808)
10,592,288
38,871,596

14,042
14,04265,898,850

35,75035,75076,940,185

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011
(Thousand yen)Previous fiscal year
(As of April 30, 2010)
Liabilities
Current liabilities
Accounts payable
Short-term debt
Accrued income taxes
Deposits received
Allowance for bonuses to employees
Allowance for bonuses to directors
Reserve for reward obligations
Reserve for loss on disaster
Other current liabilities
Total current liabilities
Long-term liabilities
Long-term debt
Bonds
Allowance for retirement benefits
Other long-term liabilities
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized holding losses on securities
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets- 14 -

Current fiscal year
(As of April 30, 2011)

19,666,791
6,549,284
1,709,338
3,036,027
875,171
21,072
297,728－
1,984,635
34,140,049

19,706,886
5,883,188
2,421,980
6,722,371
948,0219,375
313,371
11,0001,600,266
37,616,460

8,427,212－
1,017,997
821,540
10,266,750
44,406,799

7,147,773
184,000
1,270,319
1,222,684
9,824,778
47,441,238

6,308,456
5,498,450
9,874,264(4,445)
21,676,725

8,682,976
7,872,970
13,227,209(4,918)29,778,237(231,603)(231,603)
46,92921,492,051
65,898,850(327,875)(327,875)
48,58429,498,946
76,940,185

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

(2) Consolidated statements of income and comprehensive income
Consolidated statements of income(Thousand yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Advertising expenses
Promotion expenses
Salaries, allowances and bonuses
Provision for doubtful accounts
Provision for bonuses
Provision for directors’ bonuses
Provision for retirement benefits
Provision for reward obligations
Legal and employee benefits expenses
Correspondence and transportation expenses
Lease expenses
Rent expenses
Depreciation expenses
Amortization of goodwill
Taxes
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Commissions received
Real estate rental revenue
Gain on donation of fixed assets
Consignment income
Other non-operating income
Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of accounts receivables
Loss on funds managed in investment partnerships
Real estate rental expenses
Other non-operating expenses
Total non-operating expenses
Ordinary income- 15 -

Previous fiscal year
(From May 1, 2009
to April 30, 2010
125,495,820
108,258,533
17,237,287

Current fiscal year
(From May 1, 2010
to April 30, 2011)
129,387,173
109,297,522
20,089,651

502,644
181,727
2,845,686
21,692
145,750
20,57257,206
297,728
534,727
393,990245,707
1,761,534
367,751
781,232
378,959
2,207,683
10,744,597
6,492,689

582,369
190,167
3,156,618
10,448
159,991
9,375
69,395313,371626,155449,216
215,9172,086,666
433,218
874,105
443,123
2,361,838
11,981,9788,107,672

52,437
18,54081,92669,013
16,95447,52262,309348,705

54,97234,30052,18285,746
20,30489,517
248,754585,777

289,681
81,52622,19333,36652,150478,918
6,362,477

240,037
67,831
7,804
48,718
118,763483,154
8,210,295

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011
(Thousand yen)Previous fiscal year
(From May 1, 2009
to April 30, 2010)
Extraordinary income
Gain on sales of fixed assets
Gain on sales of investments in securities
Gain on transfer of business
Reversal of allowance for doubtful accounts
State subsidy
Other extraordinary income
Total extraordinary income
Extraordinary losses
Loss on disposal and sales of fixed assets
Loss on sales of investments in securities
Loss on devaluation of investments in securities
Impairment losses
Loss on adjustment for changes of accounting standard
for asset retirement obligations
Loss on disaster
Other extraordinary losses
Total extraordinary losses
Income before income taxes and minority interests
Income and other taxes – current
Income taxes – deferred
Total income taxes
Income before minority interests
Minority interests
Net income- 16 -

Current fiscal year
(From May 1, 2010
to April 30, 2011)－
71,079－6,887
10,176566
88,7091,306
45,112
19,047
13,00538,696
13,402
130,571

42,793
1,042
55,891
195,958

134,493
3,199
27,651
232,209－

160,596－
50,288345,974
6,105,212
3,157,284(192,860)
2,964,424－
9,571
3,131,216

59,747
78,256696,153
7,644,713
4,038,658(312,591)
3,726,067
3,918,646
1,654
3,916,991

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

Consolidated statements of comprehensive income

Income before minority interests
Other comprehensive income
Unrealized holding losses on securities
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of theparentComprehensive income attributable to minority interests- 17 -

Previous fiscal year
(From May 1, 2009
to April 30, 2010－

(Thousand yen)
Current fiscal year
(From May 1, 2010
to April 30, 2011)
3,918,646－－－(96,272)(96,272)
3,822,373－

3,820,719

－

1,654

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

(3) Consolidated statements of changes in net assets(Thousand yen)Previous fiscal year
(From May 1, 2009
to April 30, 2010)
Shareholders’ equity
Common stock
Balance at the end of previous fiscal year
Changes in the fiscal year
Issuance of new shares
Total changes for the fiscal year
Balance at the end of current fiscal year
Capital surplus
Balance at the end of previous fiscal year
Changes in the fiscal year
Issuance of new shares
Total changes for the fiscal year
Balance at the end of current fiscal year
Retained earnings
Balance at the end of previous fiscal year
Changes in the fiscal year
Dividends from retained earnings
Net income
Total changes for the fiscal year
Balance at the end of current fiscal year
Treasury stock
Balance at the end of previous fiscal year
Changes in the fiscal year
Acquisition of treasury stock
Total change for the fiscal year
Balance at the end of current fiscal year
Total shareholders’ equity
Balance at the end of previous fiscal year
Changes in the fiscal year
Issuance of new shares
Dividends from retained earnings
Net income
Acquisition of treasury stock
Total changes for the fiscal year
Balance at the end of current fiscal year

- 18 -

Current fiscal year
(From May 1, 2010
to April 30, 2011)

5,057,046

6,308,456

1,251,410
1,251,410
6,308,456

2,374,520
2,374,520
8,682,976

4,247,040

5,498,450

1,251,410
1,251,410
5,498,450

2,374,520
2,374,520
7,872,970

7,127,988

9,874,264(384,941)
3,131,216
2,746,275
9,874,264(564,046)
3,916,991
3,352,944
13,227,209(3,912)(4,445)

(533)
(533)
(4,445)

(472)
(472)
(4,918)16,428,163

21,676,725

2,502,820(384,941)
3,131,216(533)
5,248,561
21,676,725

4,749,040(564,046)
3,916,991(472)
8,101,512
29,778,237

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011
(Thousand yen)Previous fiscal year
(From May 1, 2009
to April 30, 2010)
Accumulated other comprehensive income
Unrealized holding gains (losses) on securities
Balance at the end of previous fiscal year
Changes in the fiscal year
Net change in non-shareholders’ equity items for the
fiscal year
Total changes for the fiscal year
Balance at the end of current fiscal year
Total accumulated other comprehensive income
Balance at the end of previous fiscal year
Changes in the fiscal year
Net change in non-shareholders’ equity items for the
fiscal year
Total changes for the fiscal year
Balance at the end of current fiscal year
Minority interests
Balance at the end of previous fiscal year
Changes in the fiscal year
Net change in non-shareholders’ equity items for the
fiscal year
Total changes for the fiscal year
Balance at the end of current fiscal year
Total net assets
Balance at the end of previous fiscal year
Changes in the fiscal year
Issuance of new shares
Dividends from retained earnings
Net income
Acquisition of treasury stock
Net change in non-shareholders’ equity items for the
fiscal year
Total changes for the fiscal year
Balance at the end of current fiscal year

- 19 -

Current fiscal year
(From May 1, 2010
to April 30, 2011)(356,413)(231,603)

124,810(96,272)

124,810(231,603)(96,272)(327,875)(356,413)(231,603)

124,810(96,272)

124,810(231,603)(96,272)(327,875)

37,35746,929

9,571

1,654

9,571
46,9291,654
48,584

16,109,107

21,492,051

2,502,820(384,941)
3,131,216(533)

4,749,040(564,046)
3,916,991(472)

134,381(94,617)

5,382,943
21,492,051

8,006,894
29,498,946

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

(4) Consolidated statements of cash flows(Thousand yen)Previous fiscal year
(From May 1, 2009
to April 30, 2010)
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Amortization of goodwill
Impairment losses
Loss on disaster
Loss on devaluation of investments in securities
Decrease in allowance for doubtful accounts
Increase in reserve for reward obligations
Increase in allowance for retirement benefits
Increase in allowance for bonuses to employees
Decrease in allowance for bonuses to directors
Increase in allowance for loss on disaster
Interest and dividend income
Interest expenses
Loss on investments in partnerships
Gain on donation of fixed assets
Gain on sales of investments in securities
Loss on disposal and sales of fixed assets
Gain on transfer of business
Loss on adjustment for changes of accounting standard
for asset retirement obligations
Increase in accounts receivable
Increase in inventories
Decrease in other assets
Increase in other accounts receivable
Increase (decrease) in accounts payable
Increase in other liabilities
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities- 20 -

Current fiscal year
(From May 1, 2010
to April 30, 2011)

6,105,212
1,286,507
878,643
195,958－
55,891(35,473)
24,591
154,886
75,154(22,042)－(70,978)
289,681
22,193(16,954)(70,037)
42,793－7,644,713
1,560,690
973,679
232,20927,712
27,651(12,424)
15,642
192,979
33,577(11,697)
11,000(89,272)
240,037
7,804(20,304)(41,912)133,187(19,047)－

160,596(754,880)(1,009,176)
1,063,748－
954,184
194,680
9,364,584
67,059(291,097)(2,712,083)
6,428,462(86,356)(1,130,597)
7,201(505,511)(1,169,077)
2,963,490
11,145,971
89,574(243,269)(3,365,177)
7,627,098

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011
(Thousand yen)Previous fiscal year
(From May 1, 2009
to April 30, 2010)
Cash flows from investing activities
Payments for purchases of property, plant andequipment
Proceeds from sales of property, plant and equipment
Proceeds from transfer of business
Payments for purchase of investments in securities
Proceeds from sales of investments in securities
Purchase of shares in affiliated companies
Purchase of subsidiaries’ shares resulting in changes inscope of consolidation
Payments for loans receivable
Proceeds from collections of loans receivable
Payments for investments in capital
Proceeds from returns of investments in capital
Payments for purchase of intangible fixed assets
Decrease (increase) in other investments
Proceeds from withdrawal of time deposits
Payments for time deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from short-term debts
Repayments for short-term debts
Proceeds from long-term debts
Repayments for long-term debts
Payments for redemption of bonds
Repayments of lease obligations
Proceeds from issuance of new shares
Payments for purchase of treasury stock
Cash dividends paid
Dividend payments to minority shareholders
Net cash provided by (used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year

- 21 -

Current fiscal year
(From May 1, 2010
to April 30, 2011)(1,151,540)(1,237,377)

3,947－(392,163)
109,525(270,000)

16,87934,023(182,160)
53,676－(201,217)(1,635,485)(630,000)
365,802(210)
890(455,338)(80,403)－－(2,700,707)(875,000)
698,901(3,100)3,030(317,204)(475,907)
45,140(6,942)(3,881,526)

2,032,307(3,122,307)
1,350,000(3,826,132)(140,000)(166,134)
2,484,765(533)(384,941)(369)(1,773,345)
1,954,409
9,234,052
11,188,462

2,940,048(4,093,941)
7,380,010(9,663,719)(33,000)(221,442)
4,720,038(472)(564,046)(6)
463,469
4,209,041
11,188,462
15,397,504

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

(Segment Information, etc.)
a. Segment information by business
Previous fiscal year (From May 1, 2009 to April 30, 2010)
Dispensing
pharmacybusiness(Thousand yen)

Drug andcosmetic store
business

Otherbusinesses

13,619,760

273,088

6,000

I. Net sales and operating
income (loss)
Net sales(1) Sales to external
111,602,971
customers(2) Inter-segment sales－
and transfers
Total
111,602,971
Operating expenses
103,272,159
Operating income (loss)
8,330,812
II. Assets, depreciation andcapital investment
Assets56,643,343
Depreciation and
998,832
amortization
Impairment losses
103,401
Capital investment
1,583,136

Eliminations /Corporate

Consolidated

125,495,820－

125,495,820

18,747

24,747(24,747)－

13,625,760
14,119,354(493,594)

291,836
368,741(76,904)

125,520,568
117,760,255
7,760,312(24,747)
1,242,875(1,267,623)

125,495,820
119,003,130
6,492,689

7,192,814

1,155,175

64,991,332

907,51765,898,850

202,758

14,708

1,216,300

24,243

1,240,543

92,557395,142－－

195,958
1,978,278－
42,285

195,958
2,020,564

Total(Notes) 1. Business segmentation
Businesses are segmented based on the method adopted for internal management.
2. Individual business segments involve the following activities.
Dispensing pharmacy business:

Management of dispensing pharmacies, franchise operation, consulting

Drug and cosmetic store business:

Sales of drugs, cosmetics and household groceries, franchiseservice for the opening of dispensing pharmacies
operation, consulting service for the opening of shopping centers,
management of pharmacies
Other businesses:

Real-estate leasing service

3. In terms of operating expenses, the unclassifiable operating expenses included in “Eliminations / Corporate” aremainly attributable to the expenses related to the administration unit such as general affairs and accounting
departments in the parent company. These expenses for the previous and current fiscal years are as follows:
Previous fiscal year:¥1,242,875 thousand

4. In terms of assets, the corporate assets included in “Eliminations / Corporate” are mainly attributable to theCompany’s surplus funds (cash and securities), long-term investment funds (investments in securities), deferred tax
assets and assets related to the administration unit. These assets for the previous and current fiscal years are as
follows:
Previous fiscal year:¥907, 517 thousand

5. Consumption taxes are not included in the figures indicated above.

b. Segment information by location
This is not applicable because the Company has no subsidiary or important branch office located in foreigncountries.

c. Overseas sales
This is not applicable because the Company has no sales in foreign countries.

- 22 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

d. Segment information
Current fiscal year (From May 1, 2010 to April 30, 2011)
1. Description of the reportable segments
The Company’s reportable segments consist of those of its components for which it is possible to obtainseparate financial information that is examined by its Board of Directors on a regular basis for the purposeof deciding on the allocation of corporate resources and assessing business performance.
The Group’s business comprises three units that together represent its main business units, namely,
dispensing pharmacy business that consists of dispensing pharmacies, selling of generic drugs, temporary
staff/recruiting and consulting services, and drug and cosmetic store business that consists of the
management of urban, cosmetics and suburban drugstores, as well as other businesses that consist
mainly of real-estate leasing services. The formulation and examination of business strategy is conductedindividually for each business.
Accordingly, the reportable segments of the Group are composed of three units, namely, dispensing
pharmacy business, drug and cosmetic store business and other businesses.

2. Methods to determine the amounts of net sales, income or loss, assets, liabilities, and other items byreportable segment
The methods used for accounting for the business segments reported are broadly similar to thosedescribed in the Basis for Preparing the Consolidated Financial Statements.
The income figures for the reportable segments are expressed at the ordinary income level.
Inter-segment sales and transfers are based on prevailing market prices.

- 23 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

3. Information about sales, income / loss, assets and other items for each reportable segment
Previous fiscal year (May 1, 2009 to April 30, 2010)(Thousand yen)
Reportable segments

Carried on
Statement of
Income(Note) 2

Adjustment(Note) 1

Dispensing
pharmacybusiness

Drug andcosmetic
store
business

111,602,971

13,619,760

273,088

125,495,820-

125,495,820

-

6,000

18,747

24,747(24,747)-

Other
businesses

Total

Net sales
Sales to externalcustomers
Intersegment sales andtransfers
Total

111,602,971

13,625,760

291,836

125,520,568(24,747)

125,495,820

Segment income (loss)

8,495,457(398,989)(68,290)8,028,178(1,665,700)

6,362,477

Segment assets

56,643,343

7,192,814

1,155,175

64,991,332

907,51765,898,850

906,462

197,718

14,7081,118,889

24,243

1,143,133

Other
Depreciation
and amortization
Amortization of goodwill
Impairment losses
Increase in property
and equipment andintangible fixed assets
Notes:

873,603

5,040-

878,643-878,643

103,401

92,557-

195,958-

195,958

1,583,136

395,142-

1,978,278

42,2852,020,564

1. Segment income (loss) in “Adjustment” totaling (¥1,665,700 thousand) includes ¥1,267,623 thousand in overall
group expenses, ¥295,592 thousand in loss that may not be allocated to the reporting segments, and ¥102,485
thousand in elimination due to inter-segment transactions.
The overall group expenses consist mainly of expenses associated with the administrative divisions of theCompany, such as general affairs and accounting divisions. The adjustment of ¥907,517,000 to the segment assets
includes assets related primarily to the Company’s administration unit.
2. The segment income has been reconciled with the ordinary income that appears in the consolidated statements ofincome.

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AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

Fiscal year ended April 30, 2011 (May 1, 2010 to April 30, 2011)(Thousand yen)

Reportable segments

Carried on
Statement of
Income(Note) 2

Adjustment(Note) 1

Dispensing
pharmacybusiness

Drug andcosmetic
store
business

114,354,299

14,821,407

211,466

129,387,173-

129,387,173-

30,71918,74749,467(49,467)-

Total

114,354,299

14,852,127

230,213

129,436,640(49,467)

129,387,173

Segment income (loss)

10,209,549(207,337)(78,596)

9,923,615(1,713,320)

8,210,295

Segment assets

67,116,243

6,881,157

1,162,189

75,159,590

1,780,594

76,940,185

1,108,308

222,299

15,068

1,345,676

28,264

1,373,941

Otherbusinesses

Total

Net sales
Sales to externalcustomers
Intersegment sales andtransfers

Other
Depreciation
and amortization
Amortization of goodwill

968,6395,040-

973,679-

973,679

Impairment losses

76,349155,860-

232,209-232,209

1,487,810

403,981

131,956

2,023,748

55,3992,079,148

Increase in property
and equipment andintangible fixed assets
Notes:

1. Segment income (loss) in “Adjustment” totaling (¥1,713,320 thousand) includes ¥1,356,742 thousand in overall
group expenses, ¥243,061 thousand in loss that may not be allocated to the reporting segments, and ¥113,516
thousand in elimination due to inter-segment transactions.
The overall group expenses consist mainly of expenses associated with the administrative divisions of the parent
company, such as general affairs and accounting divisions.
2. Segment income is adjusted with the ordinary income of consolidated income statements.

e. Related information
Current fiscal year (May 1, 2010 – April 30, 2011)
1. Information by service
This disclosure has been omitted because the same information is disclosed under Segment Information.
2. Information by region(1) Net sales
This disclosure has been omitted because the Group had no sales to external customers outside Japan
during the year.
(2) Property and equipment
This disclosure has been omitted because the Group had no property, plant and equipment located outside
Japan at the balance sheet date.

f. Information regarding impairment loss of fixed assets for each reported segment
Current fiscal year (May 1, 2010 – April 30, 2011)
This disclosure has been omitted because the same information is disclosed under Segment Information.

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AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2011

g. Information about goodwill amortization amount and year-end balance for each reportable segment
Current fiscal year (May 1, 2010 – April 30, 2011)(Thousand yen)
Dispensing
pharmacybusiness
Amortization of current fiscal year
Balance at the end of current fiscal year

Drug andcosmetic store
business

Otherbusinesses

968,639

5,040

-

-

973,679

13,852,160

15,120--13,867,280

Eliminations /Corporate

Total

h. Information about gains on negative goodwill for each reported segment
Current fiscal year (May 1, 2010 – April 30, 2011)
There are no applicable matters to be reported.

(Additional information)
Current fiscal year (May 1, 2010 – April 30, 2011)
Starting with the current fiscal year, “Accounting Standard for Disclosures about Segments of an Enterpriseand Related information” (ASBJ Statement No. 17, issued on March 27, 2009) and “Guidance on AccountingStandard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No. 20,
issued on March 21, 2008) were applied.

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