Summary of Financial Statements for Fiscal Year Ended April 2012
May 30, 2012
Name of listed company:

AIN PHARMACIEZ INC.

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

Code number:

9627

URL:

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

Representative:
Inquiries:

Kiichi Otani, President and Representative Director
Toshihide Mizushima, Senior Managing Director and Chief Director of Administration
TEL: +81-11-783-0189
Date of the ordinary general meeting of shareholders:
July 27, 2012
Date of scheduled payment of dividends:

July 30, 2012

Date of filing securities report:

July 31, 2012

Supplementary documents for this summary of financial statements:

Yes

Explanation meeting for financial results:

Yes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen.)

1. Consolidated results for the fiscal year ended April 2012 (from May 1, 2011 to April 30, 2012)(Percentage figures show year-on-year changes.)(1) Consolidated operating results
Net sales

Operating income

Ordinary income

Net income

Million yen%

Million yen%

Million yen%

Million yen%

Year ended April 30, 2012

142,790
Year ended April 30, 2011 129,387

10.4
3.1

10,253
8,107

26.5
24.9

10,547
8,210

28.5
29.0

4,899
3,916

25.1
25.1

(Note) Comprehensive income:Year ended April 30, 2012: ¥4,947 million (+29.4%)
Year ended April 30, 2011: ¥3,822 million (+17.0%)
Return on
shareholders’equityNet income
per share

Diluted net income
per share

Yen

Yen

%

%

%

307.35255.67

－
－

15.5
15.4

13.0
11.5

7.2
6.3

Year ended April 30, 2012
Year ended April 30, 2011

Ordinary income
to total assets

Operating income
to net sales(Reference) Equity in earnings of affiliates: Year ended April 30, 2012: ¥ － million, Year ended April 30, 2011: ¥ － million(2) Consolidated financial position
Total assets
As of April 30, 2012
As of April 30, 2011

Shareholders’ equity ratio

Net assets

Net assets per share

Million yen

Million yen%

Yen

85,90876,94033,74529,49839.2
38.3

2,113.79
1,847.46(Reference) Equity capital: As of April 30, 2012: ¥33,695 million,

April 30, 2011: ¥29,450 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

11,6797,627(9,010)(3,881)(2,131)463

15,935
15,397

Year ended April 30, 2012
Year ended April 30, 2011

2. Dividends
Dividends per share
1Q-endYen

2Q-endYen

3Q-endYear-end

AnnualTotal
dividends(annual)

Yen

Yen

Yen

Million yen

717
797

Year ended April 30, 2011
Year ended April 30, 2012

－
－

0.00
0.00

－
－

45.00
50.00

45.00
50.00

Year ending April 30,
2013 (forecast)

－

0.00

－

60.00

60.00

Dividends Dividends on
payout ratio net assets(consolidated) (consolidated)
%
%

17.6
16.3
15.9

2.7
2.5

3. Consolidated financial forecast for the fiscal year ending April 30, 2013 (from May 1, 2012 to April 30, 2013)(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%

Yen76,350157,500

10.9
10.3

4,890
11,510

2.3
12.3

4,950
11,630

1.6
10.3

2,480
6,010

4.9
22.7

155.54376.94* Notes(1) Major changes in subsidiaries during the fiscal year (changes in specified subsidiaries resulting in changes inscope of consolidation): No(2) Changes in accounting principles, changes in accounting estimates, and restatement of revisions
1) Changes in accounting principles as a result of revisions to accounting standards, etc.: No
2) Changes in accounting principles other than 1):
No3) Changes in accounting estimates:
No4) Restatement of revisions:No(3) Number of outstanding shares (common stock):1) Number of outstanding
shares (including treasury As of April 30, 2012
stock):
2) Number of shares held in
As of April 30, 2012
treasury:
3) Average number of
Fiscal year endedApril 30, 2012
shares outstanding:

15,944,106 shares As of April 30, 2011
3,316 shares As of April 30, 201115,940,880 sharesFiscal year endedApril 30, 201115,944,106 shares
3,102

shares15,320,242 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, and actual
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(1) Dispensing pharmacy business .................................................................................................................................. 10(2) Drug and cosmetic store business ............................................................................................................................. 10(3) Other businesses ......................................................................................................................................................... 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(5) Other significant management matters...................................................................................................................... 12

4. Consolidated financial statements ................................................................................................................. 13(1) Consolidated balance sheets ...................................................................................................................................... 13(2) Consolidated statements of income and comprehensive income .......................................................................... 15(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, 2012

1. Operating results(1) Analysis of operating results
During the fiscal year ended April 30, 2012, the Japanese economy showed signs of a moderate pickup owing
to a steady recovery from the Great East Japan Earthquake and upward trends in consumer spending,
production activity and capital expenditure. However, there were lingering concerns about deterioration in the
global economy due to the ongoing sovereign debt crisis in Europe and high crude oil prices, and a slowdown
in domestic production due to power shortages.
In this economic environment, the AIN PHARMACIEZ Group (the Group) opened new stores and madeeffective use of M&A to aggressively expand its dispensing pharmacy and urban drug and cosmetic store
businesses. It also reorganized the Group’s operating framework to boost the efficiency of store management
and integrate administrative functions. This reorganization included absorbing or merging the businesses of six
subsidiaries across Japan into AIN PHARMACIEZ INC. and core subsidiaries in each region.
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 ¥142,790
million (up 10.4% year on year), ordinary income of ¥10,547 million (up 28.5% year on year), and net income of¥4,899 million (up 25.1% year on year). The Group’s total number of dispensing pharmacies and drug andcosmetic stores reached 550 at the end of the fiscal year.
Performance by business segment was as follows.

(Dispensing pharmacy business)
The dispensing pharmacy business actively opened new stores across the Group and pushed ahead with
M&A. Earnings at existing stores were supported by a steady number of patients visiting its dispensing
pharmacies and a rise in the average prescription price due to an increase in longer-term prescriptions. As aresult, sales and profits in the dispensing pharmacy business grew year on year.
The business continued to develop new stores with a focus on dispensing pharmacies located near major
hospitals. It also launched the full-scale development of medical malls and medical villages with dispensing
pharmacies in order to meet demand for prescriptions from patients using mixed medical facilities, and opened
a number of new dispensing pharmacies in more accessible locations, such as inside or near stations.
Under revisions to drug prices and dispensing fees in April 2012, the average drug price was reduced by
6.25% and additional measures were introduced to promote the uptake of generic drugs. Since the revisions,earnings at dispensing pharmacies in Japan have been on the decline.
The Group will continue to actively increase the usage rate for generic drugs and work to secure thepremiums for prescribing generic drugs. Distribution of these drugs will be integrated through WHOLESALESTARS Co., Ltd., the Group’s specialist generic drug wholesaling subsidiary, in order to boost earnings.
M&A strategy during the fiscal year under review included acquiring and consolidating a total of ninedispensing pharmacy companies after carefully assessing the potential for return on investment. Also, in order
to increase the operating efficiency of the Group, five mid-size and small dispensing pharmacy subsidiaries
were absorbed or merged into AIN PHARMACIEZ, INC., AIN MEDICAL SYSTEMS INC., Asahi Pharmacy Co.,
Ltd. or DAICHIKU Co., Ltd. based on the locations of the subsidiary stores.
In the fiscal year under review, we opened 55 stores, including those added through the above-noted M&As,-2-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

and closed nine stores, bringing the total number of dispensing pharmacies to 494. This segment posted net
sales of ¥127,134 million (up 11.2% year on year) and segment income of ¥12,286 million (up 20.3% year onyear).

(Drug and cosmetic store business)
The drug and cosmetic store business recorded favorable sales of some seasonal product lines during theyear. In the summer, demand was strong for items that help save energy, including cooling products, and in
winter, heating products and items that help counter the dry conditions proved popular. However, the general
weakening in consumer sentiment after the earthquake persisted and the sector as a whole continued to facechallenging conditions.
In this environment, the Group continued to open ainz & tulpe stores and boost the profitability of existing
stores.
Specifically, specialist cosmetics and drug stores operated under the ainz & tulpe brand were opened instation retail areas and in general retail facilities in highly populated areas, while the store opening processitself was reviewed in order to ensure consistent profitability and returns on investment from store openings.
Steps were also taken to improve profitability. This included focusing on overhauling sales displays andstrengthening merchandising for cosmetics and over-the-counter (OTC) drugs in order to make stores more
appealing to consumers and increase the gross margin. The Group also upgraded the mobile version of its
membership system, reduced direct mail shots by half, and adopted the latest sales promotion methods usingsocial network service (SNS) websites. These efforts resulted in more efficient sales promotion at a lower cost.
Additionally, in order to make store operation more efficient and reduce store administration costs, AIN
PHARMACIEZ absorbed 11 drugstores in the Tokai region on April 1, 2012. The stores were previously
operated by AIN MEDIO, INC., the only Group company other than AIN PHARMACIEZ to have been involvedin drug and cosmetic store business.
During the fiscal year under review, the Group opened or relocated a number of ainz & tulpe stores. These
included the Sannomiya Store (Chuo Ward, Kobe City, Hyogo Prefecture), Miyanosawa Station Store (Nishi
Ward, Sapporo City), Paseo Sapporo Store (Chuo Ward, Sapporo City), Ario Sapporo Store (Higashi Ward,
Sapporo City), Ito-Yokodo Asahikawa Store (Asahikawa City, Hokkaido), Shin Sapporo Duo Store (Atsubetsu
Ward, Sapporo City), and Minato Mirai Store (Nishi-ku, Yokohama City), resulting in a Group total of 56 drug
and cosmetic stores.
Although sales at existing stores were lower compared with the previous fiscal year, sales from new storescontributed to growth. As a result, the drug and cosmetic store business reported net sales of ¥15,395 million(up 3.9% year on year) and segment income improved to ¥125 million (compared with a segment loss of ¥207
million a year earlier).

(Other businesses)
Net sales of other businesses were ¥261 million (up 23.5% year on year) and segment loss was ¥143 million(compared with a segment loss of ¥78 million a year earlier).

In the fiscal year ending April 30, 2013, the dispensing pharmacy business will continue to open newdispensing pharmacies near hospitals and medical malls and medical villages with dispensing pharmacies,-3-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

and actively seek M&A opportunities. The drug and cosmetic store business will also continue to open ainz &tulpe urban drug and cosmetic stores. These store development programs are aimed at creating a combined
network of more than 60 dispensing pharmacies and urban drug and cosmetic stores to drive the Group’s
continued business expansion.
Also, in response to the impact of drug price and dispensing fee revisions in April 2012, AIN PHARMACIEZ
announced on April 13, 2012 that it will merge with AIN MEDICAL SYSTEMS on August 1, 2012 (planned) tofurther boost operating efficiency and promote the uptake of generic drugs.
The drug and cosmetic store business will continue to improve sales areas and strengthen merchandising,as well as extend the use of the latest sales promotion methods to reinforce profitability at existing stores.
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 ¥157,500 million (up 10.3% year on year), ordinary income of¥11,630 million (up 10.3% year-on-year), and net income of ¥6,010 million (up 22.7% 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 ¥2,287 million to ¥40,320
million compared to ¥38,032 million at the end of the previous fiscal year.
This reflected steps to ensure sufficient levels of liquidity to flexibly fund store openings and M&A deals, with theGroup holding cash on hand and in banks totaling ¥15,935 million, an increase of ¥497 million year on year. In
addition, notes and accounts receivable increased ¥737 million to ¥10,985 million due to growth in new dispensing
pharmacies and drug and cosmetic stores, while other accounts receivable increased ¥720 million to ¥2,757
million.
Fixed assets at the end of the fiscal year under review increased by ¥6,698 million to ¥45,570 million
compared to ¥38,871 million at the end of the previous fiscal year.
This was mainly due to an increase in fixed assets related to investment in new stores and expansion in theasset base at consolidated subsidiaries that became part of the Group through M&A deals. Property, plant andequipment increased ¥1,805 million to ¥15,256 million, while goodwill rose ¥3,797 million to ¥17,664 million.
In addition, investments and other assets increased ¥1,065 million year on year to ¥11,657 million, chiefly
reflecting an increase in deposits and guarantees.
Liabilities increased by ¥4,721 million to ¥52,162 million compared to ¥47,441 million at the end of the previous
fiscal year.
This mainly reflected an increase in accounts payable of ¥2,817 million to ¥22,524 million and a rise in accrued
income taxes of ¥317 million to ¥2,739 million.
In interest-bearing liabilities, short-term debt increased ¥514 million to ¥6,397 million, long-term debt fell ¥829
million to ¥6,318 million and the outstanding balance for bonds declined to zero,As a result of the above, the balance of current liabilities increased by ¥5,328 million from the previous
year-end balance of ¥37,616 million to ¥42,945 million, and the balance of long-term liabilities decreased by¥607 million from the previous year-end balance of ¥9,824 million to ¥9,216 million.
Net assets increased by ¥4,247 million to ¥33,745 million compared to ¥29,498 million at the end of theprevious fiscal year.

-4-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

This was because the balance of retained earnings rose ¥4,199 million to ¥17,426 million due to the growth ofretained earnings during the fiscal year.
Net unrealized losses on available-for-sale securities totaled ¥281 million.
As a result of the above factors, shareholders’ equity ratio improved 0.9 percentage points to 39.2%,
compared with 38.3% at the end of the previous fiscal year.

2) Cash flows
In the fiscal year under review, cash on hand and in banks (“cash”) increased ¥537 million, or 3.5% year on
year to ¥15,935 million. This increase mainly comprised operating cash flow from expansion in earnings, funds
secured through a public offering and private placement of new shares in the previous fiscal year to actively
invest in new store openings and M&A, and a certain level of liquidity to provide the Group with access toflexible sources of funds.
Cash flows from each category and their relevant factors are as follows.

(Cash flows from operating activities)
Net cash provided by operating activities was ¥11,679 million, an increase of 53.1% year on year.
The main items that were positive for cash flow were income before income taxes and minority interests of¥9,782 million, depreciation and amortization of ¥1,749 million, and amortization of goodwill of ¥1,262 million.
These increases came on the back of a rise in earnings related to new store openings and M&A.
The main items that were negative for cash flow were increase in other accounts receivable of ¥687 million
and income taxes paid of ¥4,418 million.
(Cash flows from investing activities)
Net cash used in investing activities totaled ¥9,010 million, an increase of 132.2% year on year.
This was mainly due to payments of ¥2,378 million for purchases of property, plant and equipment related to
new openings and refurbishments of urban drug and cosmetic stores and dispensing pharmacies, and ¥4,122
million for purchases of shares in subsidiaries due to changes in the scope of consolidation related to sharesacquired in nine companies through M&A deals.
(Cash flows from financing activities)
Net cash used in financing activities totaled ¥2,131 million, compared with cash of ¥463 million provided in
the previous fiscal year.
This was mainly attributable to net short-term debt procurement of ¥322 million, net long-term debt
repayment of ¥1,246 million, and ¥184 million in payments for redemption of bonds.
Cash dividends paid totaled ¥717 million.
Changes in the Group’s cash flow indicators are shown below.
Year ended

Year ended

Year ended

Year endedApril 30, 2009

April 30, 2010

April 30, 2011

April 30, 2012

25.9

32.5

38.3

39.2

30.6

62.5

64.5

79.6

Debt redemption term (years)

4.3

2.3

1.7

1.1

Interest coverage ratio (times)

12.0

22.1

31.4

73.6

Shareholders‘equity ratio (%)
Equity ratio based on market value(%)

Notes:

Shareholders’ equity ratio = Equity capital / total assets
Equity ratio based on market value = market capitalization / total assets-5-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012
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 October 31 each year.”
The Group plans to pay a dividend of ¥50 per share, an increase of ¥5 per share compared with the previous
fiscal year’s ordinary dividends of ¥45.
In view of our profit forecasts, ordinary dividends from retained earnings for the next fiscal year are planned tobe ¥60 per share, an increase of ¥10 from the planned dividend of ¥50 per share for the fiscal year ended April 30,
2012.

-6-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

(4) Business and other risks
The following factors may affect the Group’s operating results, stock price and financial position. Statementsin the 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

Narcotics andPsychotropics Control Law
Pharmaceutical Affairs
Indefinite
Law
Pharmaceutical Affairs
6 years
Law
Pharmaceutical Affairs
6 yearsLaw
2 years(Note)

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 is allowed
under the “Law for Partial Revision of the Pharmaceuticals Affairs Law,” (Law No. 69, June 14, 2006). If the Group
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, which constitutes aviolation of law set forth in Paragraph 1, Article 75 of the Pharmaceutical Affairs Law, items in Article 80 of 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 newly registeredsellers, not requiring a pharmacist. Factors such as the entry into the market of firms from other industries asa result of a continuing trend in the future to deregulate drug sales may affect the Group’s performance.

2) Details of business
The Group’s dispensing pharmacy business operates a chain of dispensing pharmacies. These dispensing
pharmacies are mainly located near major hospitals (in order to focus on demand from patients who haveprescriptions written by those hospitals) and in medical malls and medical villages developed by the Group (in-7-

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012order to focus on demand from patients who have prescriptions written by those mixed medical facilities)
As the dispensing pharmacy business accounted for 89.0% 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 non-hospital prescriptions by
the medical institutions or suspension / discontinuation of operations thereof may affect the Group’s
performance.

3) Industry trends
The revenues in our dispensing pharmacy business come from pharmacy operations involving thedispensing and supplying of 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 fromfactors such as revisions in the medical treatment fee system could continue to affect the Group’s performanceand 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, 2012

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 andprescription 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 theGroup’s operating results and financial position.

7) Interest rate risks
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 intenal funds within the range of operating cash flow, while inlarge-scale M&A, costs are partially financed by borrowings from financial institutions.
In order to ensure flexible access to funds to support these activities, the Group maintains a certain level ofliquidity on its balance sheet. As of the end of the fiscal year under review, cash on hand and in banks totaled¥15,935 million, compared with a balance of interest-bearing debt of ¥12,715 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, 2012

2. State of the GroupThe Group consists of AIN PHARMACIEZ Inc. (the Company), 19 subsidiaries and one affiliated company.
(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., DAICHIKU Co., Ltd., Asahi Pharmacy Co.,
Ltd., and 11 other subsidiaries operate dispensing pharmacies.
MEDIWEL Corp. is engaged in a medical-related consulting business and staff dispatching/ introduction,
primarily of doctors and pharmacists, Medical Development Co., Ltd. is engaged in a medical-related consulting
business, and subsidiary WHOLESALE STARS Co., Ltd. sells generic drugs and other merchandise.
(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.
As of April 1, 2012, AIN PHARMACIEZ absorbed the drug and cosmetic store business previously operated
by subsidiary AIN MEDIO.
(3) Other businesses
The Company and subsidiary Medical Development Co., Ltd. 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, 2012

Notes: *1 consolidated subsidiary*2 non-consolidated subsidiary*3 affiliated company not accounted under the equity method*4 As of April 1, 2012, AIN PHARMACIEZ absorbed the drug and cosmetic store business previously
operated by AIN MEDIO.

- 11 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

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(5) Other significant management matters
In accordance with a resolution of the Board of Directors passed on April 13, 2012, AIN PHARMACIEZ and
AIN MEDICAL SYSTEMS concluded an agreement to merge on August 1, 2012. The surviving company will be
AIN PHARMACIEZ and the merged company will be AIN MEDICAL SYSTEMS.

- 12 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

4. Consolidated financial statements(1) Consolidated balance sheets(Thousand yen)Previous fiscal year
(As of April 30, 2011)
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, 2012)

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

15,935,326
10,985,402
8,138,749
114,663891,515
606,000
2,757,752
917,774(26,875)
40,320,310

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

13,191,262(6,142,308)
7,048,953
5,621,786
824,9124,758,735(2,997,483)
1,761,251
15,256,904

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

17,664,823
990,546
18,655,369

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

2,825,629
1,122,782
5,758,338
2,208,196(256,986)
11,657,961
45,570,235

35,75035,75076,940,185

17,74817,74885,908,294

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012
(Thousand yen)Previous fiscal year
(As of April 30, 2011)
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, 2012)

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

22,524,795
6,397,458
2,739,772
7,714,207
965,445
12,846
302,011－2,288,815
42,945,352

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

6,318,430－
1,448,905
1,449,631
9,216,967
52,162,319

8,682,976
7,872,970
13,227,209(4,918)29,778,237

8,682,976
7,872,970
17,426,435(5,627)33,976,755(327,875)(327,875)
48,58429,498,946
76,940,185(281,315)(281,315)
50,53533,745,975
85,908,294

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

(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 of allowance 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
Technical advisory fee
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
(May 1, 2010
to April 30, 2011)
129,387,173
109,297,522
20,089,651

Current fiscal year
(May 1, 2011
to April 30, 2012)
142,790,684
119,697,522
23,093,161

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

680,322
122,795
3,216,772
9,909
157,489
12,846
87,667302,011
721,138
492,268
175,266
2,266,312
501,077
1,077,879
504,206
2,511,316
12,839,280
10,253,881

54,97234,30052,18285,746
20,30489,51757,083
191,671585,777

59,45034,966
58,586
131,962
28,074
123,686
75,648234,508
746,886

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

159,399
71,29919,25082,737120,232
452,918
10,547,849

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012
(Thousand yen)Previous fiscal year
(May 1, 2010
to April 30, 2011)
Extraordinary income
Gain on sales of fixed assets
Gain on sales of investments in securities
Gain on sales of subsidiaries and affiliates' stocks
Gain on transfer of business
Provision of allowance for doubtful accounts
State subsidy
Surrender value of insurance
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
Effect of adoption of accounting standard for asset
retirement obligations
Loss on disaster
Other extraordinary losses
Total extraordinary losses
Income before income taxes and minority interests
Income taxes – current
Income taxes – deferred
Total income taxes
Income before minority interests
Minority interests
Net income- 16 -

Current fiscal year
(May 1, 2011
to April 30, 2012)

1,306
45,112－
19,047
13,00538,696－
13,402
130,571

17,121
21,332
22,795－－－18,302
2,826
82,378134,493
3,199
27,651
232,209

147,419
192,997
52,446
243,795

160,596－

59,747
78,256696,153
7,644,713
4,038,658(312,591)
3,726,067
3,918,646
1,654
3,916,991－
211,453
848,111
9,782,115
4,652,210
228,550
4,880,761
4,901,353
1,951
4,899,402

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

Consolidated statements of comprehensive income

Income before minority interests
Other comprehensive income
Unrealized holding gains (losses) on securities
Total other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to shareholders of
the parent
Comprehensive income attributable to minority interests- 17 -

Previous fiscal year
(May 1, 2010
to April 30, 2011)
3,918,646(Thousand yen)
Current fiscal year
(May 1, 2011
to April 30, 2012)
4,901,353(96,272)(96,272)
3,822,373

46,56046,5604,947,914

3,820,719

4,945,963

1,654

1,951

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

(3) Consolidated statements of changes in net assets(Thousand yen)Previous fiscal year
(May 1, 2010
to April 30, 2011)
Shareholders’ equity
Common stock
Balance at the beginning of current period
Net changes during the period
Issuance of new shares
Total changes during the period
Balance at the end of current period
Capital surplus
Balance at the beginning of current period
Net changes during the period
Issuance of new shares
Total changes during the period
Balance at the end of current period
Retained earnings
Balance at the beginning of current period
Net changes during the period
Cash dividends paid
Change of scope of consolidation
Net income
Total changes during the period
Balance at the end of current period
Treasury stock
Balance at the beginning of current period
Net changes during the period
Acquisition of treasury stock
Total change during the period
Balance at the end of current period
Total shareholders’ equity
Balance at the beginning of current period
Net changes during the period
Issuance of new shares
Cash dividends paid
Change of scope of consolidation
Net income
Acquisition of treasury stock
Total changes during the period
Balance at the end of current period- 18 -

Current fiscal year
(May 1, 2011
to April 30, 2012)

6,308,456

8,682,976

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

5,498,450

7,872,970

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

9,874,264

13,227,209(564,046)－
3,916,991
3,352,944
13,227,209(717,345)
17,1684,899,402
4,199,226
17,426,435(4,445)(4,918)

(472)
(472)
(4,918)

(708)
(708)
(5,627)

21,676,725

29,778,237

4,749,040(564,046)－
3,916,991(472)
8,101,512
29,778,237－(717,345)
17,1684,899,402(708)
4,198,517
33,976,755

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012
(Thousand yen)Previous fiscal year
(May 1, 2010
to April 30, 2011)
Accumulated other comprehensive income
Unrealized holding gains (losses) on securities
Balance at the beginning of current period
Net changes during the period
Net change in items other than those in shareholders’equityTotal changes during the period
Balance at the end of current period
Total accumulated other comprehensive income
Balance at the beginning of current period
Net changes during the period
Net change in items other than those in shareholders’equityTotal changes during the period
Balance at the end of current period
Minority interests
Balance at the beginning of current period
Net changes during the period
Net change in items other than those in shareholders’equityTotal changes during the period
Balance at the end of current period
Total net assets
Balance at the beginning of current period
Net changes during the period
Issuance of new shares
Cash dividends paid
Change of scope of consolidation
Net income
Acquisition of treasury stock
Net change in items other than those in shareholders’equityTotal changes during the period
Balance at the end of current period- 19 -

Current fiscal year
(May 1, 2011
to April 30, 2012)(231,603)(327,875)(96,272)

46,560(96,272)(327,875)

46,560(281,315)(231,603)(327,875)(96,272)

46,560(96,272)(327,875)

46,560(281,315)

46,92948,584

1,654

1,951

1,654
48,584

1,951
50,535

21,492,051

29,498,946

4,749,040(564,046)－
3,916,991(472)－(717,345)
17,1684,899,402(708)(94,617)

48,511

8,006,894
29,498,946

4,247,028
33,745,975

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

(4) Consolidated statements of cash flows(Thousand yen)Previous fiscal year
(May 1, 2010
to April 30, 2011)
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
Gain on sales of stocks of subsidiaries and affiliates
Decrease in allowance for doubtful accounts
Increase (decrease) in reserve for reward obligations
Increase in allowance for retirement benefits
Increase in allowance for bonuses to employees
Increase (decrease) in allowance for bonuses todirectors
Increase (decrease) in allowance for loss on disaster
Interest and dividends income
Interest expenses
Loss on investments in partnerships
Gain on donation of fixed assets
Loss (gain) on sales of investments in securities
Loss on disposal and sales of fixed assets
Gain on transfer of business
Effect of adoption of accounting standard for asset
retirement obligations
Decrease (increase) in accounts receivable
Decrease (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
(May 1, 2011
to April 30, 2012)

7,644,713
1,560,690
973,679
232,20927,712
27,651－(12,424)
15,642
192,979
33,577

9,782,115
1,749,581
1,262,920
243,795－
52,446(22,795)(79,104)(11,360)
174,879
1,749(11,697)

3,471

11,000(89,272)
240,037
7,804(20,304)(41,912)133,187(19,047)(11,000)(94,417)
159,399
19,250(28,074)
171,665
130,298－

160,596－(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

70,008404,720
10,133(687,125)
1,862,420
1,007,236
16,172,215
84,430(158,749)(4,418,239)
11,679,656

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012
(Thousand yen)Previous fiscal year
(May 1, 2010
to April 30, 2011)
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 purchases of investments in securities
Proceeds from sales of investments in securities
Purchase of additional affiliates’ shares
Purchase of subsidiaries’ shares resulting in changes inscope of consolidation
Proceeds from sales of investments in subsidiaries
resulting in change in scope 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
Proceeds from sales of intangible 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 debt
Repayments of short-term debt
Proceeds from long-term debt
Repayments of long-term debt
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
(May 1, 2011
to April 30, 2012)(1,237,377)(2,378,199)

16,87934,023(182,160)
53,676－

165,692－(477,754)
574,650(7,550)(1,635,485)(4,122,116)－

204,700(875,000)
698,901(3,100)3,030(317,204)－(475,907)
45,140(6,942)(3,881,526)(1,060,500)
182,509(3,600)6,316(1,228,303)
1,362(912,861)
45,175(300)(9,010,778)

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

3,100,000(2,777,437)
3,400,000(4,646,327)(184,000)(305,236)－(708)(717,345)－(2,131,055)
537,822
15,397,504
15,935,326

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

(Segment Information, etc.)
a. Segment information
I. Previous fiscal year (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 purpose of
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 operation 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 and suburban drug and cosmetic stores 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 reportable business segments are generally similar to thosedescribed in the Basic Important Matters for Preparation of Consolidated Financial Statements.
The income figures for the reportable segments are expressed at the ordinary income level. Intersegment
sales and transfers are based on prevailing market prices.

- 22 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

3. Sales, income or loss, assets, liabilities and other items for each reportable segment(Thousand yen)
Reportable segments
Adjustment(Note) 1

Carried on
consolidated
financialstatements(Note) 2

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)－

Other
businesses

Total

Net sales
Sales to externalcustomers
Intersegment sales
and transfers
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

968,6395,040－

973,679－

973,679

76,349155,860－

232,209－232,209

1,487,810

403,981

131,956

2,023,748

55,3992,079,148

Other
Depreciation
and amortization
Amortization of
goodwill
Impairment losses
Increase in property,
plant and equipment
and intangible 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 intersegment 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.
Segment assets in “Adjustment” totaling ¥1,780,594 thousand includes assets related primarily to the Company’s
administrative unit.
2. Segment income is adjusted with the ordinary income of consolidated statements of income.

- 23 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012
II. Current fiscal year (May 1, 2011 to April 30, 2012)

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 purpose of
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 operation 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 mainlyof 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 reportable business segments are generally similar to thosedescribed in the Basic Important Matters for Preparation of Consolidated Financial Statements.
The income figures for the reportable segments are expressed at the ordinary income level.
Intersegment sales and transfers are based on prevailing market prices.

- 24 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

3. Sales, income or loss, assets, liabilities and other items for each reportable segment(Thousand yen)
Reportable segments
Adjustment(Note) 1

Carried on
consolidated
financialstatements(Note) 2

Dispensing
pharmacybusiness

Drug andcosmetic
store
business

127,134,361

15,395,215

261,108

142,790,684－

142,790,684－－

18,747

18,747(18,747)－

Other
businesses

Total

Net sales
Sales to externalcustomers
Intersegment sales
and transfers
Total

127,134,361

15,395,215

279,855

142,809,432(18,747)

142,790,684

Segment income (loss)

12,286,672

125,900(143,752)

12,268,820(1,720,971)

10,547,849

Segment assets

77,141,833

7,204,152

2,445,785

86,791,771(883,476)

85,908,294

1,276,009

220,40228,747

1,525,159

28,135

1,553,295

1,257,880

5,040

－

1,262,920－

1,262,920

177,469

54,688

11,637

243,795－

243,795

3,645,188456,862

138,8144,240,866

2,395

4,243,261

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

1. Segment income (loss) in “Adjustment” totaling (¥1,720,971 thousand) includes ¥1,557,834 thousand in overall
group expenses, ¥87,312 thousand in loss that may not be allocated to the reporting segments, and ¥75,824
thousand in elimination due to intersegment 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.
Segment assets in “Adjustment” totaling (¥883,476 thousand) consist mainly of assets associated with theadministrative divisions of the parent company and the difference in elimination of intersegment transactions.
2. Segment income is adjusted with the ordinary income of consolidated statements of income.

- 25 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

b. Related information
I. Previous fiscal year (May 1, 2010 to April 30, 2011)
1. Information by product and 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 fiscal year.
(2) Property, plant and equipment
This disclosure has been omitted because the Group had no property, plant and equipment located outside
Japan at the balance sheet date.

II. Current fiscal year (May 1, 2011 to April 30, 2012)
1. Information by product and 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 fiscal year.
(2) Property, plant and equipment
This disclosure has been omitted because the Group had no property, plant and equipment located outside
Japan at the balance sheet date.

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

Current fiscal year (May 1, 2011 to April 30, 2012)
This disclosure has been omitted because the same information is disclosed under Segment Information.

- 26 -

AIN PHARMACIEZ, INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2012

d. Information about goodwill amortization amount and year-end balance for each reportable segment
Previous fiscal year (May 1, 2010 to 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

Corporate /Eliminations

968,639

5,040

－

－

973,679

13,852,160

15,120－－13,867,280

Total

Current fiscal year (May 1, 2011 to April 30, 2012)(Thousand yen)
Dispensing
pharmacybusiness

Drug andcosmetic store
business

Otherbusinesses

Corporate /Eliminations

Total

Amortization of current fiscal year

1,257,880

5,040

－

－

1,262,920

Balance at the end of current fiscal year

17,654,743

10,080－－17,664,823

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

Current fiscal year (May 1, 2011 to April 30, 2012)
There are no applicable matters to be reported.

- 27 -