— 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