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— c1 —
Annual Report
2005Year ended March 31, 2005
Annual Report
2005Year ended March 31, 2005
Matsumotokiyoshi Co., Ltd. was originally founded by Mr.
Kiyoshi Matsumoto in 1932 as an independent business,
Matsumoto Drugstore. The Company scrutinized the chain-
store concept practiced in the United States, which regarded
selling quality products at low prices as the ultimate goal of
the retail industry. Based on this concept, the Company
began full operation of a drugstore chain in 1964. In a coun-
try where selling at list prices was the norm, the advent of
Matsumotokiyoshi’s drugstore chain along with a corporate
philosophy of providing quality products at a low price had
a major impact on Japan’s retail industry, and enabled rapid,
widespread recognition of our Company in the marketplace.
While continuing to expand our drugstore chain opera-
tions, the Company also commenced operation of super-
markets in 1977, followed by further diversification into
“home center” retail outlets in 1988. Matsumotokiyoshi was
listed on the over-the-counter market in 1990, therein attaining top market position as Japan’s No. 1
drugstore chain. In August 1999, the Company was listed on the First Section of the Tokyo Stock
Exchange.
As of the end of March 2005, Matsumotokiyoshi operates 694 stores, including 664 directly managed
drugstores, 9 supermarkets and 5 home centers, primarily in the greater Tokyo metropolitan area.
Taking into account the 53 stores operated under consolidated subsidiaries, the Matsumotokiyoshi
Group includes a total of 747 outlets nationwide. All stores operate under the principles of our
founder, namely providing “quality products at reasonable prices in customer-friendly outlets” based
on our management policy of “promoting a healthy lifestyle for all people in leading an active and
healthy life.” Under these tenets, the Company has been intensifying corporate efforts to create stores
fully appreciated by customers and continuously striving to contribute to the well-being of society.
....................................................................................................................................................................
....................................................................................................................................................................
1 Financial Highlights
2 Interview with the President
7 Review of Operations
10 Focus
11 Six-year Summary of Selected Financial Data
12 Financial Analysis
14 Consolidated Balance Sheets
16 Consolidated Statements of Income
17 Consolidated Statements of Shareholders’ Equity
18 Consolidated Statements of Cash Flows
19 Notes to Consolidated Financial Statements
28 Independent Auditors’ Report
29 Corporate Data/Matsumotokiyoshi Network
CONTENTS
Profile
Ginza 5th Store in Tokyo
— 1 —
For the YearNet Sales................................................................................................................ ¥305,312 ¥275,596 $2,843,027Operating Income ................................................................................................ 14,841 14,005 138,198Net Income........................................................................................................... 5,512 8,567 51,334
At Year-endShareholders’ Equity ............................................................................................ ¥ 97,088 ¥ 82,634 $ 904,070Total Assets........................................................................................................... 182,810 167,581 1,702,307
Per Share Data (in Yen and U.S. Dollars)Net Income........................................................................................................... ¥ 104.63 ¥ 171.21 $ 0.97
Notes: (1) U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥107.39=US$1, the approximate Tokyo foreign exchange market rate as of March 31, 2005.
(2) Consolidated data are in accordance with the Company’s financial statements issued domestically.
Millions of Yen
2005 2004
Thousands ofU.S. Dollars(1)
2005
’01
Net Income (Millions of Yen)
’02 ’03 ’04 ’050
10,000
8,000
6,000
4,000
2,000
’01
Shareholders’ Equity (Millions of Yen)
’02 ’03 ’04 ’050
100,000
80,000
60,000
40,000
20,000
’01
Net Sales (Millions of Yen)
’02 ’03 ’04 ’050
50,000
150,000
100,000
300,000
250,000
200,000
Matsumotokiyoshi Co., Ltd. and Consolidated SubsidiariesYears ended March 31, 2005 and 2004
Financial Highlights
— 2 —
Despite the slowdown in sales growth generally observed in the
retail industry, drugstores, which also handle health foods and
cosmetics, are showing strong sales, fueled by growing interest
among consumers in health and beauty issues. Amid a society
that is rapidly ageing and reform of Japan’s medical system
requiring citizens to incur a higher percentage of medical
expenses, demand for preventive- and health-related products is
expected to grow further. Nevertheless, excessive competition is
driving the drugstore market to exhaustion. The general situa-
tion within the industry therefore remains fluid and uncertain.
In fiscal 2005, ended March 31, 2005, Matsumotokiyoshi
further promoted its management strategy pursuing “selection
and concentration in the drugstore business” by appropriately
allocating management resources, once again achieving
remarkable growth during the term.
In the following interview, Mr. Namio Matsumoto, President
of the Company and Chairman of the Japan Association of Chain
Drug Stores (JACDS), shares his views on the future strategies
and prospects of Matsumotokiyoshi as a leading company in
Japan’s drugstore industry.
Interview with the President
Q. Please give us a brief summary of
Matsumotokiyoshi’s consolidated results for fiscal
2005, ended March 31, 2005, and an overview of
market conditions during the term.
A. During fiscal 2005, the Japanese economy generally
remained strong thanks to improved corporate earn-
ings and greater consumer spending in the first half. In
the second half, however, growth in exports and con-
sumer spending slowed somewhat, pushing the econo-
my into a period of adjustment. Under these circum-
stances, the distribution and retail industries contin-
ued to suffer from a difficult business environment
caused by excessive price competition and a fall in
consumer sentiment triggered by a change in the
Consumption Tax Law, which requires retailers to
indicate gross price (net price plus consumption tax)
on price tags. In regard to the drugstore industry,
health- and beauty-care products, seasonal products,
and general pharmaceuticals posted steady sales in
the second half, but excessive price competition
served to drive a wedge between the winning and losing
participants.
Against this backdrop, on a consolidated basis, we
posted net sales of ¥305,312 million (US$2,843 mil-
lion), a year-on-year increase of 10.8%. Operating
income also increased 6.0% to ¥14,841 million
(US$138 million), while net income was down 35.7%
to ¥5,512 million (US$51 million).
Favorable sales and operating income were attrib-
utable to promotion of the “selection and concentra-
tion in the drugstore business” management strategy
as well as various other measures undertaken to
accomplish the targets of our medium-term manage-
ment plan: “1,000 drugstores including consolidated
subsidiaries with net sales of ¥500 billion, and total
sales of ¥1 trillion for the Matsumotokiyoshi Group
by the year ending March 31, 2008.”
In the first half, gross profit was adversely affected
by the aforementioned change in the Consumption
Namio MatsumotoPresident
— 3 —
accounting standards. It also serves to promote timely
disclosure of reliable corporate information. As a
leading company in the drugstore industry, we aim to
sustain growth and become a top-ranking company
from a global viewpoint. We switched to the LCM
method as a step to achieve this goal.
Q. What measures have you taken to attain the
targets of your medium-term management plan:
“1,000 drugstores including consolidated
subsidiaries with net sales of ¥500 billion, and
total sales of ¥1 trillion for the Matsumotokiyoshi
Group by the year ending March 31, 2008”?
A. The key to success lies in how we expand the
Matsumotokiyoshi Group. Starting from the current
term, our target number of store openings includes
outlets operated by consolidated subsidiaries joining
the Group through M&A and strategic franchise out-
lets. The plan is to expand the Group’s reach through-
out the nation. As the first step, we established a new
headquarters structure. The structure is designed to
promote our M&A activities and franchise operations,
but is also necessary for our future transition to a
holding company system.
Tax Law, the unstable weather due to an unusually hot
summer and typhoons, and more intense price com-
petition. We stepped up our efforts to reorganize our
profit structure by attaining an optimal product mix
for greater profitability and reducing selling, general
and administrative costs, with the latter concerning
personnel costs in particular. In the second half, sales
of health- and beauty-related products, seasonal
products, and general pharmaceuticals were strong
and garnered the highest business performance results
to date, achieving increases both in sales and operat-
ing income. The drop in net income was attributable
to a change in our method of inventory valuation
from the retail method (valuation at retail value) to
the lower of cost or market (LCM) method.
Q. What were the reasons for shifting your inventory
valuation formula from the retail method to the
LCM method?
A. We used to conduct inventory valuation using the
retail method, which has been widely adopted in
Japan’s distribution and retail industries and is used
by most of drugstore operators. However, as part of
an effort to introduce an enterprise resource planning
(ERP) system, which was launched in the second half,
we reviewed our inventory control system and real-
ized that the retail method cannot adequately reflect
the value of our inventory in the midst of declining
consumer prices—as we are currently seeing.
Corporate accounting principles require consis-
tency and continuity, and asset valuation standards
should not be taken lightly. Nevertheless, the contin-
ued downward trend in consumer prices and ever-
intensifying price competition within the drugstore
industry call for a more conservative inventory valua-
tion rule. The LCM method adequately reflects our
sales activities, allowing us to record more realistic
results in profit and loss statements and maintain a
sound financial structure.
Another reason was that the LCM method is a
commonly used method in international and U.S.
Minami Ikebukuro Store in Tokyo
— 4 —
General Shareholders’ Meeting
Board of Directors
Board of Auditors
President Senior Managing Director
Prescription Drug Promotion Dept.
Pharmaceutical Affairs Dept.
Drugstore Dept. I
Drugstore Dept. II
Drugstore Dept. III
Pharmacy Dept. I
Pharmacy Dept. II
Store Promotion Dept. I
Store Promotion Dept. II
Advertising Dept.
Operation & Planning Dept.
Sales Promotion Dept.
Merchandise Development Dept.
Household & Miscellaneous Goods Team
Beauty Products Team
Pharmaceutical Products Team
Perishables Team
DIY Team
Food Products Team
Financial Planning Dept.
Accounting Dept.
Budget Dept.
Finance Dept.
Alliance Administration Dept.
Subsidiaries Administration Dept.
FC Administration Dept.
Information Technology Dept.
Product Data Management System Dept.
Education and Training Dept.
Personnel Administration Dept.
Personnel Dept. I
Personnel Dept. II
General Affairs Dept.
Store Development GroupStore Development Div. I
Store Development Div. II
Finance & Accounting Div.
Alliance Operation Div.
FC Planning & Operation Div.
Information Technology Div.
Personnel Div.
General Affairs Div.
Store Operation Section
Business Planning Section
Merchandise Section
Prescription Drug &Pharmaceutical Div.
Drugstore Div.
Pharmacy Div.
Store Promotion Div.
Business Planning Div.
Merchandise Development Div.
Merchandise Div. I
Merchandise Div. II
Store Operation Group
Finance & Accounting Group
Director
Stores
Director
Director
Internal Auditing Div. Auditing Department I
Auditing Department II
Legal Department
Claims Call Center
Office of President
Corporate Communications Div.
Business AllianceAdministration Group
In April 2005, we redesigned our headquarters
structure into a four-group system: Store Operation
Group, Store Development Group, Business Alliance
Administration Group, and Finance and Accounting
Group. The Store Operation Group is in charge of
administration and operation of directly managed
outlets as well as defining the Matsumotokiyoshi Group’s
product policies and plans, while the Store
Development Group handles development and
planning of stores for the entire Group. The Business
Alliance Administration Group is in charge of
promoting franchise strategies and management of
Group subsidiaries and business partners. The
Finance and Accounting Group, meanwhile, promotes
M&A strategies and plans and executes the
Matsumotokiyoshi Group’s financial policies and
strategies. Under this headquarters structure, the
Store Operation Group operates a system that
integrates store operations with product policies.
Based on this, and capitalizing on the close
cooperation among the remaining three groups, we
centrally manage all the information regarding store
operations—from the opening of directly managed
outlets to M&A and franchise strategies—and
facilitate sales operations to capture and quickly
respond to every business opportunity. In preparation
for our planned shift to a holding company system,
we are currently strengthening this four-group system
by assigning talented personnel to head each division.
In the future, we will set up separate functional
companies under a holding company, each taking
different roles of overseeing wholesale and distribution
operations, manufacturing original brand pharma-
ceuticals, and dispatching pharmacists. We also
equally treat the regional sales companies that operate
directly managed outlets and drugstore operators that
joined the Matsumotokiyoshi Group through M&A,
so as to promote integrated operation and manage-
ment throughout the entire Group.
New Organizational Chart (as of April 1, 2005)
— 5 —
Q. Can you please go into more detail on the new
business model?
A. First, we will establish a business model based on an
integrated business structure that covers manufactur-
ing through to distribution and sales. With the aim of
differentiating and diversifying our private brand
products as well as setting up an optimal supply chain
management system, we will develop a new form of
business in the distribution and retail industries
through the acquisition of other manufacturers and
wholesalers. The acquisition of sundries wholesaler
Itohide Shoji Co., Ltd. during the term was the first
step. As the next target, we plan to acquire a pharma-
ceuticals wholesaler. We also need to reorganize our
distribution network in order to effectively operate
Group companies and franchise outlets throughout
the nation. The plan includes the establishment of a
company specialized in management of distribution
operations. This, along with the planned wholesalers,
will serve to promote comprehensive and integrated
operations within the Matsumotokiyoshi Group.
In the previous term we obtained a business model
patent for our network system, which is designed to
facilitate integrated management of inventories and
distribution of prescription medicines. We will bolster
our efforts to expand sales of this system to other
drugstore operators with the aim of making our
model the de facto standard of the drugstore industry.
These efforts will be led by the Business Alliance
Administration Group, which is engaged in the
promotion of franchise strategies.
Q. What management issues will the
Matsumotokiyoshi Group have to overcome?
A. One of the most important management issues now
facing the Group is the development of infrastructure
centering on human resource, physical, financial and
information foundations to further concentrate our
efforts in realizing the operation of 1,000 drugstores
by 2008. Specifically, we aim to introduce by fiscal
2006 an enterprise resource planning (ERP) system,
which is indispensable for a holding company struc-
ture, and strengthen the organization of our
computer network. In addition, we will develop fields
such as personnel affairs, finance and accounting, and
product development.
Another issue common to the drugstore industry
in general is the securing of pharmacists. The current
Pharmaceutical Affairs Law requires prescription
pharmacies and stores selling general pharmaceuticals
to have pharmacists working onsite. While a revision
is scheduled for March 2006, we are still not able to
ascertain whether this regulation will be relaxed or not.
Currently, there is a severe shortage of pharmacists.
To solve this problem, JACDS submitted a request to
the Ministry of Health, Labour and Welfare to create a
new qualification,“general pharmaceutical pharma-
cist.” Relaxation of the regulation regarding the sale of
general pharmaceuticals would allow us to conduct
such operations during the late evening hours, while
conventional pharmacists would concentrate on sales
of prescription medicines and related consultation
Interview with the President
Asunal Kanayama Store in Aichi Prefecture
— 6 —
services. If this becomes a reality, the drugstore
industry is expected to grow into a ¥10 trillion market
by 2010.
Q. What is your perception of future business
prospects, as well as your management policy
regarding returns on profits to shareholders
and investors?
A. In fiscal 2006, although it is forecast that uncertainty
over the business environment in Japan will be slightly
reduced, we anticipate that our core drugstore business
will continue to face challenging business conditions.
Under these circumstances, the situation in the
distribution and retail industry is expected to remain
challenging due to continued intense competition as
well as the emergence of new competitors of different
business types and styles. The pattern of “survival of
the fittest” will therefore become more prominent.
We will adhere to our medium- to long-term manage-
ment strategies and remain loyal to our vision of
creating attractive stores that customers can trust
and which are capable of responding to their needs.
For the term ending March 31, 2006, we forecast
consolidated net sales of ¥320,000 million and operat-
ing income of ¥15,700 million. Consolidated net
income is expected to amount to ¥3,500 million after
an expected extraordinary loss of approximately
¥10,000 million due to the introduction of an asset
impairment accounting method that will be settled as
a lump sum.
While giving full consideration to the reinforce-
ment of our management foundation and future
business development, we remain committed to a sta-
ble flow of dividends that reflect our performance.
During the term under review, the Company paid out
a total annual dividend of ¥30.00 (US$0.28) per share.
This included an interim dividend of ¥10.00 per share
and a year-end dividend of ¥20.00 per share.
Matsumotokiyoshi will continue its efforts to
maintain a payout ratio at a level that reflects our
strong growth for the benefit of our investors over the
long term. At the same time, we will work to secure
earnings necessary for future business development,
as well as reinforce our management foundation in
order to prepare for expected significant changes in
the business environment.
Interview with the President
Namio MatsumotoPresident
June 2005
Japan is currently facing a shortage of qualified pharmacists.
— 7 —— 7 —
For the fiscal year ended March 31,
2005, net sales in the Drugstore
Division increased 12.9% to ¥276,460
million (US$2,574 million). As a
result, the division’s sales accounted
for 90.6% of total sales, up 1.7 per-
centage points.
Merchandising Focused onSelf-medication ConceptGenerated Record Sales
An increasing number of drugstores
have been forced under due to the
excessive price competition within the
drugstore industry. Against this back-
drop, the Drugstore Division of the
Matsumotokiyoshi Group continued
to show steady sales growth. This was
primarily attributable to our efforts
to pursue precise merchandising, an
optimal product mix for greater
profitability, and further reduce per-
sonnel costs and other selling, general
and administrative costs. Above all,
our merchandising strategy is based on
the idea of “health and beauty,” and
our product lineup includes a variety
of pharmaceuticals as well as function-
al supplements, cosmetics, and other
beauty-care products. Combined with
efforts to support a self-medication
concept, these served to attract more
customers to our stores, resulting in
increased sales.
During the term, we opened a total
of 67 stores, including drugstore con-
versions. Among the stores opened in
regions other than the Tokyo metro-
politan area, those recording signifi-
cant growth potential include the
Nagano Station Store and the
Matsumoto Station Building Midori
Store, the first and second outlets in
the Nagano region; the Hiroshima
Station Building Asse Store and the
Hiroshima Midorii Tenmaya Store,
the second and the third outlets in the
Hiroshima region; and the Kyoto
Shinkyogoku Store, the second outlet
in the Kyoto region. In the Tokyo met-
ropolitan area, we opened the
Ikebukuro West Exit Store and
Minami Ikebukuro Store, the fourth
and fifth outlets in the Ikebukuro area;
the Pharmacy Soka Store and Tokyo
Kyosai Hospital Pharmacy
Nakameguro Store, which are
prescription pharmacies located near
general hospitals; and the Shirakawa
3-chome Store, an outlet which
integrates prescription services and is
one of several such medical services
located adjacent to a large-scale apart-
ment complex in Koto-ku, Tokyo.
Other new openings reflected our
desire to place stores with a high
customer-attracting capability near or
’01
Drugstore Division Net Sales and Number of Outlets(Millions of Yen)
’02 ’03 ’04 ’050
50,000
150,000
100,000
250,000
0
Net SalesOutlets
200
600
400
1,000
200,000800
LaLaport Koshien Store in Hyogo Prefecture
.........................................................................................................................................................................................................................
......................................................................................................................................................................
DRUGSTORE DIVISION
Review of Operations
— 8 —
Store interior
Lecture room
PC training room
.......................................................................................................................................................
........................................................................................................................................................................................................................................
within large railway stations and in
adjacent station buildings. In line with
this strategy, we are also developing an
approach to promote the opening of
stores integrating prescription services
in or near medical facilities serving
apartment complexes. As a new busi-
ness model, we believe that this type of
store offers a total medical solution in
urban districts where the elderly popu-
lation is increasing and the birthrate is
declining.
In response to a move toward the
separation of medical care and dispen-
sary services, as of March 2005 a total
of 103 drugstores integrating prescrip-
tion services were in operation.
At the Matsumotokiyoshi
Pharmacists Education Center in the
Ikebukuro Part 2 Store, we are actively
undertaking efforts to improve the skills
of pharmacists by offering practical and
medical administrative work training
courses supervised by university pro-
fessors of pharmaceutical sciences. In
addition, we introduced a student
internship program for potential and
promising college students who
become pharmacists of
Matsumotokiyoshi in the future.
During the term under review,
we launched the operation of an e-
commerce site, “e! Matsumotokiyoshi,”
which provides online shopping capa-
bilities and also serves as a tool to sup-
port our self-medication concept.
We expect strong growth in this area.
The number of Matsumotokiyoshi
Membership Card users is also grow-
ing at a steady pace, showing our abili-
ty to both obtain new customers and
retain existing ones.
Matsumotokiyoshi GroupTargeting 1,000 Drugstoresby Fiscal 2008
Our medium-term management plan
aims to operate “1,000 drugstores
including consolidated subsidiaries
with net sales of ¥500 billion, and total
sales of ¥1 trillion for the
Matsumotokiyoshi Group by the year
ending March 31, 2008.” To achieve
these goals and bolster
Matsumotokiyoshi Group operations,
we are expanding business tie-ups and
franchise operations, while maintain-
ing a rigorous policy of opening con-
ventional, directly managed outlets.
During fiscal 2005, we established a
capital tie-up with Itohide Shoji, a
wholesaler of sundries, along with
a business and capital tie-up with
Sugiura Co., Ltd. and business tie-ups
with Fujikoshi Co., Ltd. and Chubu
Yakuhin Co., Ltd. The acquisition of
Itohide Shoji is the first step in
building an optimal supply chain
management system to establish a
business structure that integrates
manufacturing, distribution, and sales.
As of March 31, 2005, we have busi-
ness partnerships with 13 companies
and capital relationships with four,
including the two with which we
established a capital tie-up in the pre-
vious term, Tobu Drug Co., Ltd.,
based in Saitama Prefecture, and
Kenkou Kazoku Drug Corporation,
the largest drugstore chain operator in
Nagano Prefecture. With these 15
partners, excluding Itohide Shoji that
is engaged in the wholesale business,
we will facilitate joint procurement
and joint development of private
brand products. We anticipate
enhanced operational efficiency and
improved profitability via the resulting
increase in procurement volume and
reduction in distribution costs.
— 9 —
...............................................................................
...............................................................................
In order to establish a business
model based on an integrated
business structure from manufac-
turing through to distribution and
sales, we have strategically estab-
lished the Wholesale Division. As a
first step, we acquired sundries
wholesaler Itohide Shoji and are
also considering the future acquisi-
tion of a pharmaceuticals whole-
saler. With the expansion of the
wholesale field, we will further
promote the establishment of a new
form of business in the distribution
and retail industries and also work
to set up an optimal supply chain
management system, with the aim
of differentiating and diversifying
our private brand products.
In Other Business, net sales in
the Supermarket Division fell
25.6% to ¥12,776 million (US$119
million), and net sales in the Home
Center Division declined 10.8% to
¥8,649 million (US$81 million).
However, as a result of measures to
reduce costs in both divisions, we
secured profits for each division.
In addition, the Home Delivery
Services of First-Aid Medicines
Division was sold as part of
reorganization efforts.
In the fiscal year ahead, we will
push ahead with the implementation
of full-scale operation of the Franchise
Division, a new strategic division
that has been conducting research
and development of the
“Matsumotokiyoshi Franchise
Package.”
’01
Supermarket Division Net Sales and Number of Outlets (Millions of Yen)
’02 ’03 ’04 ’05
10,000
30,000
20,000
40,000
00
40
30
20
10
Net SalesOutlets ’01
Home Center Division Net Sales and Number of Outlets(Millions of Yen)
’02 ’03 ’04 ’05
3,000
12,000
6,000
15,000
00
10
8
9,0006
4
2
Net SalesOutlets ’01
Other Business Net Sales(Millions of Yen)
’02 ’03 ’04 ’05
2,000
6,000
4,000
8,000
0
Futatsugi Home Center Store in Chiba PrefecturePharmacy Soka Store in Saitama Prefecture
Review of Operations
OTHERS
Matsumotokiyoshi develops private brand products jointly
with large domestic pharmaceutical companies and overseas
cosmetics manufacturers.
In the medical field, we develop a variety of products
ranging from cold remedies and vitamin tablets to nutritious
drinks with reputable pharmaceutical companies. We also
focus on the development of health and beauty products, such
as haircare, skincare, and bodycare products and toiletries.
The Matsumotokiyoshi Group is working to establish a new
business model based on an integrated business structure from
manufacturing through to distribution and sales, with the aim
of differentiating and diversifying our private brand products.
As a means to promote this business model, we are planning to
acquire other manu-
facturers and whole-
salers. In this way, we
will continue to
concentrate on the
development and
sales of private brand
products.
— 10 —
Enhanced Lineup of Private Brand Products
term capital procurement structure. In addition, this will
facilitate widespread reduction of financing costs and lead to a
stronger financial structure for the Matsumotokiyoshi Group
through a streamlined cash management system.
Funds raised during the term will be used for new store
openings and product development activities, with the ultimate
aim of achieving the central goals of our medium-term manage-
ment plan: “1,000 drugstores including consolidated subsidiaries
with net sales of ¥500 billion, and total sales of ¥1 trillion for the
Matsumotokiyoshi Group by the year ending March 31, 2008.”
In the first half of the fiscal year we conducted capital procure-
ment amounting to ¥10,385 million by issuing a total of
3,910,000 shares for public subscription, while in the second,
we introduced syndicated loans totaling ¥22,500 million
(US$210 million), of which ¥11,250 million was financed
during the term in order to refinance a portion of existing long-
term debt that was due within one year. The combination of
term loans, commitment lines, and commercial paper enables
us to reinforce our medium- to long-term capital procurement
capabilities, while adding mobility and flexibility to our short-
Capital Procurement through Issue of New Shares and Syndicated Loans
“e! Matsumotokiyoshi,” Our First E-Commerce Site, Goes LiveIn May 2004, we opened our first official online shopping site
on the Yahoo!® Shopping website. The site is also available to
customers via cellular phone using NTT DoCoMo’s “i-mode”
service.
“e! Matsumotokiyoshi” targets female customers in their
late teens and above through a variety of information, includ-
ing comments and advice from pharmacists and nutritionists,
the latest news from the medical and cosmetics fields, and data
on selected cosmetic products from a “medical” viewpoint. We
intend to expand sales through this site by providing customers
with detailed information on products, including their efficacy
and ingredients. Currently, the site carries 2,000 items, and
moreover, this will be expanded to 15,000 in the future.
Those who log on to “e! Matsumotokiyoshi” via cellular
phone can redeem points accumulated by shopping at the
mobile site at our
actual stores. The site
therefore combines
our strength as an
operator of a nation-
wide chain of 680
drugstores with the
advanced capabilities
of the “i-mode"
service.
In addition to
ongoing plans and strategies for store openings and franchise
development, we plan to further concentrate on this promising
e-commerce business in the future.
Focus
“e! Matsumotokiyoshi”
Matsumotokiyoshi private brand products
Notes: (1) U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥107.39=US$1, the approximate Tokyo foreign exchange market rate as of March 31, 2005.See Note 1 to the consolidated financial statements.
(2) Cash Dividends per Share and Shareholders’ Equity per Share are not adjusted for stock splits.(3) The number of employees is on a non-consolidated basis.(4) Fiscal 2005 figures for the number of outlets include consolidated subsidiaries.
For the YearNet Sales.............................................Operating Income .............................Net Income ........................................Depreciation and Amortization .......
At Year-endTotal Shareholders’ Equity ...............Total Assets ........................................
RatiosROE (%) ............................................Equity Ratio (%) ...............................Assets Turnover (Times)...................
Per Share Data (in Yen and U.S. Dollars)Net Income ........................................Shareholders’ Equity(2).......................Cash Dividends(2) ...............................
Number of Employees(3) ....................Number of Outlets(4)..........................
Drugstores......................................Supermarkets .................................Home Centers................................
Millions of Yen
2000 2001 2002 2003 2004 2005
Thousands ofU.S. Dollars(1)
2005
¥ 305,31214,841
5,5122,388
97,088182,810
6.153.11.74
104.631,813.17
30.00
3,147747733
95
¥ 275,596 14,005
8,567 1,891
82,634167,581
10.949.31.72
171.211,662.83
25.00
3,075648632115
¥ 267,07613,5947,0461,812
74,821153,229
9.848.81.78
280.623,013.57
30.00
2,946588567165
¥ 256,279 11,323 6,643 1,812
68,624146,901
10.146.71.78
267.532,763.81
30.00
2,91155152421
6
¥ 231,703 10,238 5,233 1,725
62,566141,837
8.744.11.79
211.332,519.81
22.00
2,809532501238
¥ 206,495 10,331
6,096 1,601
57,435116,765
11.649.21.93
250.672,325.82
22.00
2,558447416247
$2,843,027138,198
51,33422,247
904,0701,702,307
———
0.9716.88
0.28
—————
ROE (%)
’05’04’03’02’01’00
0
3
6
9
12
15
Equity Ratio(%)
’05’04’03’02’01’00
0
10
20
30
40
60
50
Assets Turnover(Times)
’05’04’03’02’01’00
1.00
1.25
1.50
1.75
2.00
Matsumotokiyoshi Co., Ltd. and Consolidated SubsidiariesYears ended March 31, 2000 through 2005
Six-year Summary of Selected Financial Data
— 11 —
— 12 —
Breakdown of OperationsFor the fiscal year ended March 31, 2005, net sales rose 10.8%
on a consolidated basis over the previous fiscal year to
¥305,312 million (US$2,843 million). Of this amount, net
sales for the Drugstore Division showed a favorable increase
of 12.9% to ¥276,460 million (US$2,574 million).
Conversely, net sales for the Supermarket Division declined
25.6% to ¥12,776 million (US$119 million), and net sales for
the Home Center Division dropped 10.8% to ¥8,649 million
(US$81 million). These declines were attributable to the
implementation of consolidations and operational
changeovers in line with a review of unprofitable stores.
Within the subsidiaries of the Other Business, net sales of
the Home Delivery Services of First-Aid Medicines Division
were down 6.7% to ¥905 million (US$8.4 million), net sales
of the Construction Division declined 8.9% to ¥638 million
(US$5.9 million), while net sales of other businesses’ activities
increased 1.4% to ¥136 million (US$1.3 million). Meanwhile,
net sales of the Wholesale Division, which was launched
during fiscal 2005, totaled ¥4,460 million (US$42 million).
Gross profit was up 11.3% year-on-year to ¥79,892
million (US$744 million), and the gross profit margin was
26.2%. Selling, general and administrative expenses rose
12.6% to ¥65,051 million (US$606 million), primarily due to
increased personnel costs and land rental fees. Operating
income increased 6.0% to ¥14,841 million (US$138 million).
The operating income margin was 4.9%, down 0.2%.
During the term, we changed the method of inventory
valuation from the retail method (valuation at retail value)
to the lower of cost or market (LCM) method. In doing so,
inventories for the past years were corrected, and this resulted
in a loss on revaluation of inventories due to accounting
change of ¥5,154 million (US$48 million). Consequently,
income before income taxes and minority interests declined
35.2% to ¥9,945 million (US$93 million).
Net income fell 35.7% to ¥5,512 million (US$51 million),
and the ratio of net income to net sales was 1.8%. As a result,
and due also to the issuance of new shares during the term,
net income per share declined from ¥171.21 to ¥104.63 (US$0.97).
Financial PositionAs of March 31, 2005, total assets stood at ¥182,810 million
(US$1,702 million), an increase of ¥15,229 million over the
previous fiscal year.
Total current assets increased by ¥15,866 million, or
23.2%, to ¥84,148 million (US$784 million). This was mainly
attributable to an increase of ¥10,321 million in cash and
cash equivalents, resulting from the issuance of new shares.
Net property, plant and equipment decreased ¥1,360
million to ¥59,949 million (US$558 million), and total
investments and other assets increased ¥723 million to
¥38,713 million (US$360 million).
Total liabilities increased ¥509 million to ¥85,420 million
(US$795 million). Current liabilities declined ¥3,201 million
to ¥59,746 million (US$556 million), while long-term liabili-
ties rose ¥3,710 million to ¥25,674 million (US$239 million).
Total shareholders’ equity rose ¥14,454 million to ¥97,088
million (US$904 million), and the equity ratio was up 3.8
’01
Net Sales (Millions of Yen)
’02 ’03 ’04 ’050
50,000
150,000
100,000
300,000
250,000
200,000
Drugstore SupermarketHome Center Other
’01
Operating Income(Millions of Yen)
’02 ’03 ’04 ’050
3,000
9,000
6,000
15,000
12,000
’01
Total Assets(Millions of Yen)
’02 ’03 ’04 ’050
40,000
80,000
200,000
160,000
120,000
Financial Analysis
— 13 —
percentage points to 53.1%. This was attributable to an
increase of ¥5,219 million in capital surplus, resulting from
the issuance of new shares. Consequently, shareholders’
equity per share grew ¥150.34 to ¥1,813.17 (US$16.88).
Cash Flow AnalysisAn increase in cash flows from operating activities during
fiscal 2005 more than offset the cash flows from investment
activities, including those used for store openings. As for cash
flows from financing activities, the Company conducted
medium- to long-term capital procurement through the
issuance of new shares and syndicated loans. The refinancing
from short-term loans and the portion of long-term loans
that will become due within one year to long-term debt
proceeded smoothly, and the Company’s financial stability
was enhanced.
Net cash provided by in operating activities for the fiscal
year ended March 31, 2005 increased to ¥8,425 million (US$78
million). This included income before income taxes of ¥9,945
million (US$93 million), depreciation and amortization of
¥2,388 million (US$22 million), and a loss on revaluation of
inventories due to accounting change of ¥5,154 million
(US$48 million). Subtracted were: an increase in accounts
receivable of ¥1,714 million (US$16 million), an increase in
inventories of ¥3,191 million (US$30 million), and
income taxes–paid of ¥7,073 million (US$66 million).
Net cash used in investing activities decreased to ¥3,259
million (US$30 million) as a result of ¥1,332 million
(US$12 million) in purchases of property, plant and equip-
ment and a payment for lease deposits of ¥3,212 million
(US$30 million).
Net cash provided by financing activities increased to
¥5,155 million (US$48 million). This included proceeds from
long-term debt amounting to ¥11,250 million (US$105
million), and proceeds from issuance of new shares totaling
¥10,385 million (US$97 million). These were offset by
repayments of long-term debt of ¥11,967 million (US$111
million) and a decrease of ¥2,000 million (US$19 million) in
commercial paper.
As a result of the above, cash and cash equivalents, end of
year increased to ¥26,741 million (US$249 million), register-
ing a net increase in cash and cash equivalents of ¥10,321
million (US$96 million).
’01
Net Income per Share (Yen)
’02 ’03 ’04 ’050
50
150
100
300
250
200
’01
Depreciation & Amortization(Millions of Yen)
’02 ’03 ’04 ’050
500
1,500
1,000
2,500
2,000
’01
Capital Expenditures(Millions of Yen)
’02 ’03 ’04 ’050
5,000
15,000
10,000
20,000
— 14 —
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ...................................................................................
Accounts receivable..............................................................................................
Inventories (Notes 3 and 5) .................................................................................
Deferred tax assets (Note 9) ................................................................................
Other current assets .............................................................................................
Allowance for doubtful accounts ........................................................................
Total current assets.......................................................................................
PROPERTY, PLANT AND EQUIPMENT (Note 6):
Land ......................................................................................................................
Buildings and structures ......................................................................................
Furniture, fixtures and vehicles ...........................................................................
Construction in progress .....................................................................................
Total ..............................................................................................................
Accumulated depreciation...................................................................................
Net property, plant and equipment ............................................................
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 4 and 6).................................................................
Investments in an associated company...............................................................
Lease deposits .......................................................................................................
Goodwill ...............................................................................................................
Deferred tax assets (Note 9) ................................................................................
Other assets...........................................................................................................
Total investments and other assets..............................................................
TOTAL......................................................................................................................
See notes to consolidated financial statements.
¥ 26,741
6,417
38,723
4,750
7,547
(30)
84,148
45,380
25,284
3,117
18
73,799
(13,850)
59,949
472
6
31,620
334
1,923
4,358
38,713
¥182,810
¥ 16,420
4,504
39,846
1,692
5,840
(20)
68,282
46,745
24,569
2,684
—
73,998
(12,689)
61,309
385
447
29,061
2,210
1,778
4,109
37,990
¥167,581
$ 249,016
59,761
360,590
44,240
70,256
(283)
783,580
422,581
235,449
29,013
176
687,219
(128,975)
558,244
4,401
59
294,446
3,116
17,911
40,550
360,483
$1,702,307
Thousands ofU.S. Dollars (Note 1)
2005
Millions of Yen
2005 2004
Matsumotokiyoshi Co., Ltd. and SubsidiariesMarch 31, 2005 and 2004
Consolidated Balance Sheets
— 15 —
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term borrowings (Note 6).........................................................................
Current portion of long-term debt (Note 6) ......................................................
Notes and accounts payable.................................................................................
Income taxes payable (Note 9) ............................................................................
Accrued bonuses ..................................................................................................
Provision for customers’ reward point ...............................................................
Other current liabilities........................................................................................
Total current liabilities.................................................................................
LONG-TERM LIABILITIES:
Long-term debt (Note 6) .....................................................................................
Liability for employees’ retirement benefits (Note 7) ........................................
Retirement benefits for directors and corporate auditors (Note 7) ..................
Other .....................................................................................................................
Total long-term liabilities ............................................................................
MINORITY INTERESTS
SHAREHOLDERS’ EQUITY (Notes 8 and 14):
Common stock—authorized, 160,000,000 shares;
issued, 53,579,014 shares in 2005 and 49,659,314 shares in 2004 .................
Capital surplus......................................................................................................
Retained earnings .................................................................................................
Net unrealized gain on available-for-sale securities ...........................................
Treasury stock—at cost, 67,228 shares in 2005 and 3,908 shares in 2004 ........
Total shareholders’ equity............................................................................
TOTAL......................................................................................................................
¥ 999
2,802
43,707
4,376
1,985
1,417
4,460
59,746
21,342
2,487
934
911
25,674
302
21,086
21,866
54,220
103
(187)
97,088
¥182,810
¥ 2,809
7,284
42,879
3,516
1,653
810
3,996
62,947
17,578
2,222
877
1,287
21,964
36
15,861
16,647
50,053
83
(10)
82,634
¥167,581
$ 9,303
26,098
406,999
40,750
18,489
13,201
41,499
556,339
198,742
23,161
8,700
8,477
239,080
2,818
196,353
203,618
504,893
954
(1,748)
904,070
$1,702,307
Thousands ofU.S. Dollars (Note 1)
2005
Millions of Yen
2005 2004
— 16 —
NET SALES...............................................................................................................
COST OF SALES......................................................................................................
Gross profit.......................................................................................................
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 11) ...........
Operating income ............................................................................................
OTHER INCOME (EXPENSES):
Interest and dividend income..............................................................................
Interest expense ....................................................................................................
Gain on exemption from the future pension obligation of the
governmental pension program ......................................................................
Gain on sales of investment securities ................................................................
Loss on disposal of property, plant and equipment...........................................
Loss on revaluation of inventories due to accounting change...........................
Other—net ...........................................................................................................
Other income (expenses)—net ......................................................................
INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS...............
INCOME TAXES (Note 9):
Current .................................................................................................................
Deferred ................................................................................................................
Total income taxes ..........................................................................................
MINORITY INTERESTS IN NET INCOME .........................................................
NET INCOME..........................................................................................................
PER SHARE OF COMMON STOCK (Note 2.p):
Net income ...........................................................................................................
Cash dividends applicable to the year .................................................................
See notes to consolidated financial statements.
¥305,312
225,420
79,892
65,051
14,841
175
(97)
—
353
(1,172)
(5,154)
999
(4,896)
9,945
7,591
(3,191)
4,400
33
¥ 5,512
¥104.63
30.00
¥275,596
203,820
71,776
57,771
14,005
148
(83)
1,685
—
(410)
—
14
1,354
15,359
6,863
(71)
6,792
—
¥ 8,567
¥171.21
25.00
$2,843,027
2,099,079
743,948
605,750
138,198
1,639
(907)
—
3,296
(10,918)
(47,999)
9,300
(45,589)
92,609
70,693
(29,733)
40,960
315
$ 51,334
$0.97
0.28
Yen U.S. Dollars
Thousands ofU.S. Dollars (Note 1)
2005
Millions of Yen
2005 2004
Matsumotokiyoshi Co., Ltd. and SubsidiariesYears Ended March 31, 2005 and 2004
Consolidated Statements of Income
— 17 —
BALANCE, APRIL 1, 2003 ....................................................
Net income .........................................................................
Cash dividends, ¥30.00 per share ......................................
Bonuses to directors and corporate auditors....................
Increase in treasury stock (2,356 shares) ..........................
Net increase in unrealized gain on
available-for-sale securities............................................
Stock split ...........................................................................
BALANCE, MARCH 31, 2004 ..............................................
Net income .........................................................................
Cash dividends, ¥25.00 per share ......................................
Bonuses to directors and corporate auditors....................
Increase in treasury stock (63,320 shares) ........................
Net increase in unrealized gain on
available-for-sale securities............................................
Issuance of common stock ................................................
BALANCE, MARCH 31, 2005 ..............................................
BALANCE, MARCH 31, 2004 ..............................................
Net income .........................................................................
Cash dividends, $0.23 per share ........................................
Bonuses to directors and corporate auditors....................
Increase in treasury stock (63,320 shares) ........................
Net increase in unrealized gain on
available-for-sale securities ...........................................
Issuance of common stock ................................................
BALANCE, MARCH 31, 2005 ..............................................
See notes to consolidated financial statements.
TreasuryStock
CapitalSurplus
RetainedEarnings
CommonStock
Issued Number ofShares of
Common Stock
Millions of YenThousands
Unrealized Gain on
Available-for-sale Securities
TreasuryStock
CapitalSurplus
RetainedEarnings
CommonStock
Thousands of U.S. Dollars (Note 1)
Unrealized Gain on
Available-for-sale Securities
24,830
24,829
49,659
3,920
53,579
¥15,861
15,861
5,225
¥21,086
$131,958
64,395
$196,353
¥16,647
16,647
5,219
¥21,866
$155,015
48,603
$203,618
¥42,309
8,567
(744)
(79)
50,053
5,512
(1,279)
(66)
¥54,220
$466,902
51,334
(11,918)
(615)
$504,893
¥ 12
71
83
20
¥103
$769
185
$954
¥ (8)
(2)
(10)
(177)
¥(187)
$ (97)
(1,651)
$(1,748)
Consolidated Statements of Shareholders’ EquityMatsumotokiyoshi Co., Ltd. and SubsidiariesYears Ended March 31, 2005 and 2004
— 18 —
OPERATING ACTIVITIES:Income before income taxes and minority interests ..........................................Adjustments for:
Income taxes—paid .........................................................................................Depreciation and amortization .......................................................................Increase in accrued bonuses ............................................................................Provision for employees’ retirement benefits .................................................Provision for retirement benefits for directors and corporate auditors........(Decrease) increase in allowance for doubtful receivables ............................Loss on disposal of property, plant and equipment .......................................Increase in provision for customers’ reward point ........................................Gain on transfer of the substitutional portion
of the governmental pension program........................................................Loss on revaluation of inventories due to accounting change.......................Increase in accounts receivable........................................................................Increase in inventories .....................................................................................Increase in interest and dividend receivables .................................................Increase (decrease) in notes and accounts payable ........................................(Decrease) increase in interest payable ...........................................................Other—net .......................................................................................................
Total adjustments.....................................................................................Net cash provided by operating activities ...............................................
INVESTING ACTIVITIES:Proceeds from sales of securities .........................................................................Purchases of property, plant and equipment .....................................................Purchases of intangibles.......................................................................................Payment for acquisition of a subsidiary’s stock..................................................Proceeds from sales of a subsidiary’s stock.........................................................Payment for lease deposits...................................................................................Proceeds from acquisition of subsidiary’s stock.................................................Decrease (increase) in other assets ......................................................................
Net cash used in investing activities ........................................................FINANCING ACTIVITIES:
Decrease in short-term bank loans—net ............................................................Decrease in commercial paper ............................................................................Proceeds from long-term debt ............................................................................Proceeds from issuance of new shares ................................................................Repayments of long-term debt............................................................................Dividends paid .....................................................................................................Other—net ...........................................................................................................
Net cash provided by financing activities ...............................................NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ............................CASH AND CASH EQUIVALENTS, END OF YEAR ..........................................
ADDITIONAL INFORMATION OF CASH FLOW:Purchase of Itohide Shoji Co., Ltd. in 2005 and
Kenkou Kazoku Drug Corporation and Tobu Drug Co., Ltd. in 2004:Assets acquired .................................................................................................Liabilities assumed ...........................................................................................Goodwill ...........................................................................................................Minority interest ..............................................................................................
Sales of Matsumotokiyoshi Pharmaceutical Co., Ltd.:Assets sold.........................................................................................................Liabilities assumed ...........................................................................................
See notes to consolidated financial statements.
¥ 9,945
(7,073)2,388
324259
21(7)
1,172621
—5,154
(1,714)(3,191)
(158)1,038
(1)(353)
(1,520)8,425
881(1,332)
(726)—25
(3,212)605500
(3,259)
(1,230)(2,000)11,25010,385
(11,967)(1,280)
(3)5,155
10,32116,420
¥26,741
¥ 7,1254,622
(1,593)(232)
500392
¥15,359
(7,593)1,891
1769221733
410543
(1,685)—(59)
(7,434)(133)(387)
314
(13,471)1,888
53(3,190)
(513)(2,898)
—(2,119)
—(293)
(8,960)
——
10,000—
(6,675)(743)
(3)2,579
(4,493)20,913
¥16,420
¥ 5,5014,2522,210
(36)
——
$ 92,609
(65,871)22,247
3,0172,416
198(66)
10,9185,786
—47,999
(15,966)(29,715)
(1,467)9,673
(13)(3,308)
(14,152)78,457
8,208(12,410)
(6,768)—
235(29,913)
5,6394,658
(30,351)
(11,455)(18,624)104,758
96,710(111,444)
(11,924)(15)
48,00696,112
152,904$249,016
$ 66,34943,042
(14,837)(2,167)
4,6583,651
Thousands ofU.S. Dollars (Note 1)
2005
Millions of Yen
2005 2004
Matsumotokiyoshi Co., Ltd. and SubsidiariesYears Ended March 31, 2005 and 2004
Consolidated Statements of Cash Flows
— 19 —
.....................................................................
..............................................The accompanying consolidated financial statements have been prepared in accordance with the
provisions set forth in the Japanese Securities and Exchange Law and its related accounting regula-tions, and in conformity with accounting principles generally accepted in Japan, which are differentin certain respects as to application and disclosure requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangementshave been made to the consolidated financial statements issued domestically in order to present themin a form which is more familiar to readers outside Japan. In addition, certain reclassifications havebeen made in the 2004 financial statements to conform to the classifications used in 2005.
The consolidated financial statements are stated in Japanese yen, the currency of the country inwhich Matsumotokiyoshi Co., Ltd. (the “Company”) is incorporated and operates. The translationsof Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readersoutside Japan and have been made at the rate of ¥107.39 to $1, the approximate rate of exchange atMarch 31, 2005. Such translations should not be construed as representations that the Japanese yenamounts could be converted into U.S. dollars at that or any other rate.
a. Consolidation—The consolidated financial statements include the accounts of the Company and allsubsidiaries (together the “Group”).
Investment in an associated company is stated at cost. If the equity method of accounting hadbeen applied to the investment in the company, the effect on the accompanying consolidated financial statements would not be material.
All significant intercompany balances and transactions have been eliminated in consolidation.All material unrealized profit included in assets resulting from transactions within the Group is eliminated.
b. Goodwill—Goodwill represents the excess of the costs of an acquisition over the fair value of thenet assets of the acquired subsidiary at the date of acquisition and is being amortized by thestraight-line method within 20 years, while one which does not have a material effect on theaccompanying consolidated financial statements is being amortized over 1 year.
c. Cash Equivalents—Cash equivalents are short-term investments that are readily convertible intocash and that are exposed to insignificant risk of changes in value.
Cash equivalents include time deposits, all of which mature within three months of the date of acquisition.
d. Inventories—Inventories are principally stated at the lower of cost determined by the retail method,or market (see Note 3).
e. Marketable and Investment Securities—Marketable and investment securities are classified andaccounted for, depending on management’s intent, as follows: (1) trading securities, which are heldfor the purpose of earning capital gains in the near term are reported at fair value, and the relatedunrealized gains and losses are included in earnings, (2) held-to-maturity debt securities, which areexpected to be held to maturity with the positive intent and ability to hold to maturity are reportedat amortized cost and (3) available-for-sale securities, which are not classified as either of the afore-mentioned securities, are reported at fair value, with unrealized gains and losses, net of applicabletaxes, reported in a separate component of shareholders’ equity. Non-marketable available-for-salesecurities are stated at cost determined by the moving-average method. For other than temporarydeclines in fair value, investment securities are reduced to net realizable value by a charge to income.
1. BASIS OF PRESENTINGCONSOLIDATEDFINANCIALSTATEMENTS
...................................................................................................................................
..............................................2. SUMMARY OF
SIGNIFICANTACCOUNTINGPOLICIES
Matsumotokiyoshi Co., Ltd. and SubsidiariesYears ended March 31, 2005 and 2004
Notes to Consolidated Financial Statements
— 20 —
.............................................................................................................................................................................................................................................
f. Property, Plant and Equipment—Property, plant and equipment are stated at cost. Depreciation ofproperty, plant and equipment is computed by the declining-balance method at rates based on theestimated useful lives of the assets, while the straight-line method is applied to buildings acquiredafter April 1, 1998. The range of useful lives is principally from 8 to 34 years for buildings andstructures, and 5 to 8 years for furniture, fixtures and vehicles.
g. Lease Deposits—On signing a lease agreement in respect of any store, the Company is required toplace a deposit with the lessors to allow them to secure payment of the rent due under the agree-ment. Lease deposits are non-interest bearing and will be refundable upon expiry of the lease.
Amortization of refundable deposits paid to owners of shopping centers included in other assetsis computed on the straight-line method over the period of the lease contracts.
h. Deferred Charges—Stock issue costs are charged to income as incurred.i. Provision for Customers’ Reward Point—The Group distributes reward point cards to its customers
as a sales promotion. The Group provides for future exercise of these reward points based on actualexercise rate in the past.
j. Retirement and Pension Plans—The Company and certain consolidated subsidiaries have contributory funded defined benefit pension plans and unfunded retirement benefit plans covering substantially all of their employees. Other consolidated subsidiaries have non-contributoryfunded pension plans. The Group provided for the liability for employees’ retirement benefitsbased on its projected benefit obligations and plan assets at the balance sheet date.
Retirement benefits for directors and corporate auditors are provided at the amount based onthe Group’s bylaws.
k. Research and Development Costs—Research and development costs are charged to income when incurred.
l. Leases—All leases are accounted for as operating leases. Under Japanese accounting standards for leases, finance leases that deem to transfer ownership of the leased property to the lessee are to be capitalized, while other finance leases are permitted to be accounted for as operating leasetransactions if certain “as if capitalized” information is disclosed in the notes to the lessee’s financial statements.
m.Income Taxes—The provision for income taxes is computed based on the pretax income includedin the consolidated statements of income. The asset and liability approach is used to recognizedeferred tax assets and liabilities for the expected future tax consequences of temporary differencesbetween the carrying amounts and the tax bases of assets and liabilities. Deferred taxes are measured by applying currently enacted tax laws to the temporary differences.
n. Appropriations of Retained Earnings—Appropriations of retained earnings are reflected in thefinancial statements for the following year upon shareholders’ approval.
o. Derivatives and Hedging Activities—The Group uses derivative financial instruments to manage itsexposures to fluctuations in interest rates. Interest rate swap contract is utilized by the Group to reduceinterest rate risk. The Group does not enter into derivatives for trading or speculative purposes.
All derivatives are recognized as either assets or liabilities and measured at fair value, and gainsor losses on derivative transactions are recognized in the statement of income.
The fair value of the Group’s derivative financial instruments at March 31, 2005 and 2004 are notdisclosed because no assets or liabilities related to derivative transactions were recorded on each ofbalance sheet date.
p. Per Share Information—Net income per share is computed by dividing net income available tocommon shareholders by the weighted-average number of common shares outstanding for theyear, retroactively adjusted for stock splits.
Diluted net income per share is not disclosed because the Group does not have any kind of securities with potential dilutive effect.
Cash dividends per share presented in the accompanying consolidated statements of income aredividends applicable to the respective years including dividends to be paid after the end of the year.
— 21 —
q. New Accounting Pronouncements—In August 2002, the Business Accounting Council issued aStatement of Opinion, “Accounting for Impairment of Fixed Assets,” and in October 2003 theAccounting Standards Board of Japan (“ASB”) issued ASB Guidance No. 6, “Guidance forAccounting Standard for Impairment of Fixed Assets.” These new pronouncements are effective forfiscal years beginning on or after April 1, 2005 with early adoption permitted for fiscal years endingon or after March 31, 2004.
The new accounting standard requires an entity to review its long-lived assets for impairmentwhenever events or changes in circumstances indicate that the carrying amount of an asset or assetgroup may not be recoverable. An impairment loss would be recognized if the carrying amount ofan asset or asset group exceeds the sum of the undiscounted future cash flows expected to resultfrom the continued use and eventual disposition of the asset or asset group. The impairment losswould be measured as the amount by which the carrying amount of the asset exceeds its recover-able amount, which is the higher of the discounted cash flows from the continued use and eventualdisposition of the asset or the net selling price at disposition.
The Group expects to adopt these pronouncements as of April 1, 2005 and is currently in theprocess of assessing the effect of adoption of these pronouncements.
Prior to April 1, 2004, inventories are principally stated at cost determined by the retail method.Effective April 1, 2004, the Company changed its method to state inventories to lower of cost or market. The effect of this change was to decrease income before income taxes and minority interestsfor the year ended March 31, 2005 by ¥6,594 million ($61,410 thousand). Due to this change, theCompany revalued its inventories existing as of April 1, 2004, resulting in a loss on revaluation ofinventories of ¥5,154 million ($47,999 thousand) being recorded.
Marketable and investment securities as of March 31, 2005 and 2004, consisted of the following:
The carrying amounts and aggregate fair value of marketable and investment securities at March 31,2005 and 2004, were as follows:
Millions of Yen
2005
Unrealized Unrealized FairCost Gains Losses Value
Securities classified as—Available-for-sale equity securities......................................... ¥209 ¥150 ¥5 ¥354
Millions of Yen
2004
Unrealized FairCost Gains Value
Securities classified as—Available-for-sale equity securities......................................... ¥168 ¥115 ¥283
Non-current:
Marketable equity securities...................................................
Marketable trust fund investments and other ......................
Trust fund investments and other .........................................
Total ....................................................................................
2005
$3,308
693
400
$4,401
Thousands ofU.S. Dollars
2004
¥283
60
42
¥385
2005
¥354
76
42
¥472
Millions of Yen
.......................................................................................................
..............................................4. MARKETABLE AND
INVESTMENTSECURITIES
.....................................................................................................
..............................................3. ACCOUNTING CHANGE
Thousands of U.S. Dollars
2005
Unrealized Unrealized FairCost Gains Losses Value
Securities classified as—Available-for-sale equity securities......................................... $1,951 $1,404 $47 $3,308
Available-for-sale securities whose fair value is not readily determinable as of March 31, 2005 and2004, were as follows:
Proceeds from sales of available-for-sale securities for the years ended March 31, 2005 and 2004were ¥846 million ($7,884 thousand) and ¥53 million, respectively. Gross realized gain on these salesfor the year ended March 31, 2005 and gross realized loss on these sales for the year ended March 31,2004, computed on the moving-average cost basis, was ¥353 million ($3,296 thousand) and ¥22 million, respectively.
Inventories at March 31, 2005 and 2004, consisted of the following:
Short-term borrowings at March 31, 2005 and 2004, consisted of the following:
Long-term debt at March 31, 2005 and 2004, consisted of the following:
.............................................................................................
..............................................6. SHORT-TERM
BORROWINGS ANDLONG-TERM DEBT
Short-term bank loans, 0.670% to 1.475% (2005)
and 0.320% to 1.475% (2004)
Commercial papers, 0.01038% (2004) .........................................
Total ......................................................................................
2005
$9,303
$9,303
Thousands ofU.S. Dollars
2004
¥ 809
2,000
¥2,809
2005
¥999
¥999
Millions of Yen
Drugs ...........................................................................................
Cosmetics ....................................................................................
Household goods ........................................................................
Foods ...........................................................................................
DIY goods....................................................................................
Other............................................................................................
Total .....................................................................................
2005
$118,393
152,176
59,239
12,643
9,617
8,522
$360,590
Thousands ofU.S. Dollars
2004
¥ 13,865
15,938
6,460
1,614
1,249
720
¥39,846
2005
¥12,714
16,342
6,361
1,357
1,032
917
¥38,723
Millions of Yen
.............................................
..............................................5. INVENTORIES
Available-for-sale—Trust fund investments and other...........2005
$400
Thousands ofU.S. Dollars
2004
¥42
2005
¥42
Millions of Yen
Carrying Amount
......................................................................................
Loans from banks and other financial institutions,
due serially to 2009 with interest rates ranging
from 0.27917% to 2.30578% at March 31, 2005,
and from 0.34000% to 2.60000% at March 31, 2004:
Secured.......................................................................................
Unsecured ..................................................................................
Total .......................................................................................
Less current portion.......................................................................
Long-term debt, less current portion ...........................................
2005
—
$224,840
224,840
(26,098)
$198,742
Thousands ofU.S. Dollars
2004
¥ 80
24,782
24,862
(7,284)
¥17,578
2005
—¥24,144
24,144
(2,802)
¥21,342
Millions of Yen
— 22 —
— 23 —
Annual maturities of long-term debt at March 31, 2005 for the next four years were as follows:Thousands of
Year ending March 31 Millions of Yen U.S. Dollars
2006 ............................................................................................................... ¥ 2,802 $ 26,098
2007 ............................................................................................................... 10,066 93,740
2008 ............................................................................................................... 11,274 104,989
2009 ............................................................................................................... 2 13
Total .......................................................................................................... ¥24,144 $224,840
At March 31, 2005, no assets were pledged as collateral for short-term borrowings or long-term debt.The carrying amount of assets pledged for other payable included in other liabilities on consolidatedbalance sheet were as follows:
Thousands ofMillions of Yen U.S. Dollars
Property, plant and equipment—net of accumulated depreciation.............. ¥155 $1,443
Other ................................................................................................................. 4 45
Total .......................................................................................................... ¥159 $1,488
As is customary in Japan, the Company maintains deposit balances with banks with which it hasborrowings. Such deposit balances are not legally or contractually restricted as to withdrawal.
General agreements with respective banks provide, as is customary in Japan, that additional collateral must be provided under certain circumstances if requested by such banks and that certainbanks have the right to offset cash deposited with them against any long-term or short-term debt orobligation that becomes due and, in case of default and certain other specified events, against all otherdebt payable to the banks. The Company has never been requested to provide any additional collateral.
The Company and certain consolidated subsidiaries enter into commitment-line agreements withrespective banks for efficient financing. The maximum amount available to be financed from bankswas ¥10,400 million ($96,843 thousand). At March 31, 2005, no loans were executed in associationwith this agreement, accordingly, no balance was recorded on the consolidated balance sheets.
The Company and certain consolidated subsidiaries have severance payment plans for employees,directors and corporate auditors.
Under most circumstances, employees terminating their employment are entitled to retirementbenefits determined based on the rate of pay at the time of termination, years of service and certainother factors. Such retirement benefits are made in the form of a lump-sum severance payment fromthe Company or from certain consolidated subsidiaries and annuity payments from a trustee.Employees are entitled to larger payments if the termination is involuntary, by retirement at themandatory retirement age, by death, or by voluntary retirement at certain specific ages prior to themandatory retirement age.
The Company and certain domestic subsidiaries have two types of pension plans for employees: anon-contributory and a contributory funded defined benefit pension plan. The contributory fundeddefined benefit pension plan, established under the Japanese Welfare Pension Insurance Law, covers asubstitutional portion of the governmental pension program managed by the Company on behalf ofthe government and a corporate portion established at the discretion of the Company. In accordancewith the Defined Benefit Pension Plan Law enacted in April 2002, the Company applied for anexemption from obligation to pay benefits for future employee services related to the substitutionalportion which would result in the transfer of the pension obligations and related assets to the govern-ment upon approval. The Company obtained approval for exemption from the future obligation by the Ministry of Health, Labour and Welfare on November 1, 2003 and recognized a gain onexemption from the future pension obligation of the governmental program in the amount of ¥1,685
...................................................................................................................................................................................................................................
..............................................7. RETIREMENT AND
PENSION PLANS
— 24 —
million for the year ended March 31, 2004. The substitutional portion of the plan assets transferredto the government in the subsequent year was measured to be approximately ¥2,785 million as atMarch 31, 2004.
The retirement benefits for directors and corporate auditors are paid subject to the approval of theshareholders.
The liability for employees’ retirement benefits at March 31, 2005 and 2004 consisted of the following:
The components of net periodic benefit costs for the years ended March 2005 and 2004 are as follows:
Assumptions used for the years ended March 31, 2005 and 2004 are set forth as follows:2005 2004
Discount rate..................................................................................................... 2.0% 2.0%
Expected rate of return on plan assets ............................................................. 2.0% 1.0%
Amortization period of prior service cost ....................................................... 5 years
Recognition period of actuarial gain/loss ........................................................ 5 years 5 years
Japanese companies are subject to the Japanese Commercial Code (the “Code”).The Code requires that all shares of common stock are recorded with no par value and at least 50%
of the issue price of new shares is required to be recorded as common stock and the remaining netproceeds as additional paid-in capital, which is included in capital surplus. The Code permits companies, upon approval of the Board of Directors, to issue shares to existing shareholders withoutconsideration as a stock split. Such issuance of shares generally does not give rise to changes withinthe shareholders’ accounts.
The Code also provides that an amount at least equal to 10% of the aggregate amount of cash dividends and certain other appropriations of retained earnings associated with cash outlays applicable to each period shall be appropriated as a legal reserve until such reserve and additionalpaid-in capital equals 25% of common stock. The amount of total additional paid-in capital and legalreserve that exceeds 25% of the common stock may be available for dividends by resolution of theshareholders. In addition, the Code permits the transfer of a portion of additional paid-in capital andlegal reserve to the common stock by resolution of the Board of Directors.
The Code allows Japanese companies to repurchase treasury stock and dispose of such treasurystock by resolution of the Board of Directors. The repurchased amount of treasury stock cannotexceed the amount available for future dividend plus amount of common stock, additional paid-in
.................................................................................
..............................................8. SHAREHOLDERS’
EQUITY
..................................................................................................................................................
Service cost ..................................................................................
Interest cost .................................................................................
Expected return on plan assets ...................................................
Recognized actuarial loss ............................................................
Amortization of prior service cost .............................................
Net periodic benefit costs ...........................................................
Gain on transfer of the substitutional portion
of the governmental pension program..................................
Total ....................................................................................
2005
$5,246
892
(454)
1,222
—
6,906
—
$6,906
Thousands ofU.S. Dollars
2004
¥ 740
209
(38)
496
(119)
1,288
(1,685)
¥ (397)
2005
¥563
95
(48)
131
—
741
—
¥741
Millions of Yen
Projected benefit obligation .......................................................
Fair value of plan assets ..............................................................
Unrecognized actuarial gain (loss).............................................
Net liability .................................................................................
2005
$ 47,494
(27,349)
3,016
$ 23,161
Thousands ofU.S. Dollars
2004
¥ 4,920
(2,462)
(236)
¥ 2,222
2005
¥ 5,100
(2,936)
323
¥ 2,487
Millions of Yen
— 25 —
capital or legal reserve to be reduced in the case where such reduction was resolved at the shareholders meeting.
In addition to the provision that requires an appropriation for a legal reserve in connection withthe cash payment, the Code imposes certain limitations on the amount of retained earnings availablefor dividends. The amount of retained earnings available for dividends under the Code was ¥1,071million ($9,977 thousand) as of March 31, 2005, based on the amount recorded in the Company’sgeneral books of account.
Dividends are approved by the shareholders at a meeting held subsequent to the fiscal year towhich the dividends are applicable. Semiannual interim dividends may also be paid upon resolutionof the Board of Directors, subject to certain limitations imposed by the Code.
The Company and its subsidiaries are subject to Japanese national and local income taxes which, inthe aggregate, resulted in a normal effective statutory tax rate of approximately 40.4% and 41.7% forthe years ended March 31, 2005 and 2004, respectively.
On March 31, 2003, a tax reform law concerning enterprise tax was enacted in Japan whichchanged the normal effective statutory tax rate from 41.7% to 40.4%, effective for years beginning onor after April 1, 2004. The deferred tax assets and liabilities which will realize on or after April 1,2004 are measured at the effective tax rate of 40.4% as at March 31, 2004.
A reconciliation between the normal effective statutory tax rates and the actual effective tax ratesreflected in the accompanying consolidated statements of income for the years ended March 31, 2005and 2004, is as follows:
2005 2004
Normal effective statutory tax rate .................................................................. 40.4% 41.7%
Per capita levy of local taxes ............................................................................. 2.9 1.6
Adjustment of deferred tax assets due to change in tax rate .......................... — 0.3
Other—net ........................................................................................................ 0.9 0.6
Actual effective tax rate..................................................................................... 44.2% 44.2%
..............................................
Deferred tax assets (current):
Enterprise tax payable ...............................................................
Accrued bonuses........................................................................
Inventories .................................................................................
Provisions for customers’ reward point ...................................
Other ..........................................................................................
Net deferred tax assets (current)...................................................
Deferred tax assets (non-current):
Employees’ retirement benefits ................................................
Lease deposit ..............................................................................
Investment securities.................................................................
Retirement allowance for directors and corporate auditors ...
Bad debt expense .......................................................................
Other ..........................................................................................
Total
Deferred tax liabilities (non-current):
Long-term prepaid expense ......................................................
Other ..........................................................................................
Total .......................................................................................
Net deferred tax assets (non-current)...........................................
2005
$ 3,227
7,480
24,551
5,334
3,648
$44,240
$ 9,350
4,989
1,376
3,391
2,915
2,397
24,418
5,861
646
6,507
$17,911
Thousands ofU.S. Dollars
2004
¥ 293
661
—
326
412
¥1,692
¥ 864
471
147
355
313
225
2,375
542
55
597
¥1,778
2005
¥ 346
803
2,636
572
393
¥4,750
¥1,004
535
147
364
313
258
2,621
629
69
698
¥1,923
Millions of Yen
..............................................................................................................................................................................
..............................................9. INCOME TAXES
— 26 —
Transactions of the Company with related parties for the years ended March 31, 2005 and 2004,were as follows:
The balances due to or from related parties at March 31, 2005 and 2004, were as follows:
Research and development costs charged to income were ¥18 million ($169 thousand) for the yearended March 31, 2005, while nil incurred for 2004.
Total lease payments were ¥1,764 million ($16,431 thousand) and ¥1,497 million for the yearsended March 31, 2005 and 2004, respectively.
Pro forma information of leased property such as acquisition cost, accumulated depreciation,obligations under finance leases, depreciation expense and interest expense of finance leases that donot transfer ownership of the leased property to the lessee on an “as if capitalized” basis for the yearsended March 31, 2005 and 2004, was as follows:
Millions of Yen Thousands of U.S. Dollars
2005 2005
Furniture, Other Furniture, OtherFixtures (Investments and Fixtures (Investments and
and Vehicles Other Assets) Total and Vehicles Other Assets) Total
Acquisition cost ....................... ¥8,691 ¥10 ¥8,701 $80,938 $96 $81,034
Accumulated depreciation ...... 4,432 9 4,441 41,275 90 41,365
Net leased property.................. ¥4,259 ¥ 1 ¥4,260 $39,663 $ 6 $39,669
Millions of Yen
2004
Furniture, OtherFixtures (Investments and
and Vehicles Other Assets) Total
Acquisition cost .......................................................................... ¥8,436 ¥75 ¥8,511
Accumulated depreciation ......................................................... 3,894 40 3,934
Net leased property..................................................................... ¥4,542 ¥35 ¥4,577
Obligations under finance leases:
.......
..............................................11. RESEARCH AND
DEVELOPMENTCOSTS
Lease deposits .................................................................................
2005
$446
Thousands ofU.S. Dollars
2004
¥23
2005
¥47
Millions of Yen
...............................................................
..............................................10. RELATED PARTY
TRANSACTIONS
........................................................................................................................................
..............................................12. LEASE
Rental expense................................................................................
Purchase of land.............................................................................
Deposits received ...........................................................................
Rental revenue................................................................................
2005
$378
—
—
447
Thousands ofU.S. Dollars
2004
¥ 43
170
24
20
2005
¥40
—
—
48
Millions of Yen
Due within one year.............................................................................Due after one year ................................................................................Total.......................................................................................................
2005
$14,716
24,953
$39,669
Thousands ofU.S. Dollars
2004
¥1,615
2,962
¥4,577
2005
¥1,580
2,680
¥4,260
Millions of Yen
— 27 —
The amount of obligations under finance leases includes the imputed interest expense portion.Depreciation expense, which is not reflected in the accompanying consolidated statements of
income, computed by the straight-line method was ¥1,764 million ($16,431 thousand) and ¥1,497million for the years ended March 31, 2005 and 2004, respectively.
The Group enters into interest rate swap contracts to manage its interest rate exposures on certainliabilities, not for trading or speculative purposes.
Because the counterparties to these derivatives are limited to major international financial institutions, the Group does not anticipate any losses arising from credit risk.
Derivative transactions entered into by the Group have been made in accordance with internalpolicies which regulate the authorization and credit limit amount.
The fair value of the Group’s derivative financial instruments at March 31, 2005 and 2004 are notdisclosed because no assets or liabilities related to derivative transactions were recorded on each ofbalance sheet dates.
The following appropriations of retained earnings at March 31, 2005, were approved at the shareholders meeting held on June 29, 2005:
Thousands ofMillions of Yen U.S. Dollars
Year-end cash dividends, ¥20 ($0.19) per share.............................................. ¥1,279 $11,918
Bonuses to directors and corporate auditors .................................................. 66 615
........................................................
..............................................13. DERIVATIVES
........................
..............................................14. SUBSEQUENT EVENT
— 28 —
Tohmatsu & Co. MS Shibaura Building13-23, Shibaura 4-chome,Minato-ku, Tokyo 108-8530, Japan
Tel:+81-3-3457-7321Fax:+81-3-3457-1694www.tohmatsu.co.jp
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors of Matsumotokiyoshi Co., Ltd.:
We have audited the accompanying consolidated balance sheets of Matsumotokiyoshi Co., Ltd. andsubsidiaries as of March 31, 2005 and 2004, and the related consolidated statements of income, shareholders’equity, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financialstatements are the responsibility of the Company’s management. Our responsibility is to express an opinionon these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,the consolidated financial position of Matsumotokiyoshi Co., Ltd. and subsidiaries as of March 31, 2005 and2004, and the consolidated results of their operations and their cash flows for the years then ended inconformity with accounting principles generally accepted in Japan.
As discussed in Note 3 to the consolidated financial statements, the Company changed its method ofaccounting for inventory as of April 1, 2004.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in ouropinion, such translation has been made in conformity with the basis stated in Note 1. Such U.S. dollaramounts are presented solely for the convenience of readers outside Japan.
June 29, 2005
— 29 —
Board of Directors (as of June 29, 2005)
President Namio Matsumoto
Senior Managing Director Masashi Yoshida
Managing Director Katsuhiko Terada
Directors Tetsuo MatsumotoToshio HayataTakao WatanabeYukihiko OkuboKazuaki KarahiKazumi MatsumotoKiyoo Matsumoto
Corporate Auditors Jun SagaMasato TaimuraTetsuo OiwaSusumu Torigoe
Data (as of March 31, 2005)
Founded December 26, 1932
Established January 8, 1954
Common Stock ¥21,086 million (US$196 million)
Shares of Common Stock Issued and Outstanding 53,579,014 shares
Number of Shareholders 7,431 (Total)
Number of Employees 3,147 (excluding part-time employees)
Head Office 9-1, Shinmatsudo-Higashi,Matsudo-shi, Chiba 270-8501, JapanTel: 047-344-5111Fax: 047-342-8446
The Matsumotokiyoshi retailing chain has expanded
throughout the Tokyo metropolitan area, and now
includes 747 stores. The Company’s principal business is
the operation of drugstores (680), supermarkets (9),
home centers (5) and stores operated under
consolidated subsidiaries (53). Customers
flock to Matsumotokiyoshi stores for their
wide selection, reasonable prices, appealing
decor, and friendly service.
Number of Outlets (as of March 31, 2005)
DrugstoresSupermarketsHome Centers
Consolidated Subsidiaries
54IBARAKI
148 1TOKYO 6
28
195 9 3 3CHIBA
64KANAGAWA
1NARA2KYOTO5OSAKA4HYOGO
1OITA6FUKUOKA
4AICHI1GIFU
2MIE
2SHIZUOKA
4HIROSHIMA1OKAYAMA
8FUKUSHIMA3MIYAGI
1AKITA1IWATE
2AOMORI
2HOKKAIDO
1NIIGATA
2NAGANO
31TOCHIGI
26GUNMA
109 1SAITAMA 16
Head Office
Corporate Data
Matsumotokiyoshi Network
— c4 —
Matsumotokiyoshi Co., Ltd.9-1, Shinmatsudo-Higashi, Matsudo-shi
Chiba 270-8501, JapanTel: 047-344-5111Fax: 047-342-8446
URL http://www.matsukiyo.co.jp/
Printed in Japan