2005

Head Office 9-1, Shinmatsudo-Higashi, Matsudo-shi, Chiba Phone: +81-47-344-5111

URL http://www.matsukiyo.co.jp/

T O P M E S S A G E

2001 2002 2003 2004

Sales by division (Unit: millions of yen)

14,96315,504 15,586

11,011

12,4237,229

8,702

5,139

6,763226,724

272,527

10,905

24,311

245,657

9,69917,170

2005

291,174258,694

8,64912,776

11,053

229,418

252,666209,263

261,940

12,350

31,053

182,448

13,873

33,096

Home centers WholesaleSupermarketsDrugstores

Ordinary income (Unit: millions of yen) Net income (Unit: millions of yen)

2001 2002 2003 2004 2005 2001 2002 2003 2004

5,215

2005

648

16

632

OthersDrugstoresPart-timers (per 8-hours’ working time)Full-time workers

6,2125,741

5,009

2,200

2,830

3,266

2,809

2,911

2,946

6,120

3,045

3,07574,554

82,502

96,834

61,99468,173

588532 551

21

567524501

2731

2001 2002 2003 2004 2005 2001 2002 2003 2004

6,463

3,316

3,147

2005 2001 2002 2003 2004

694

14

680

2005 2008

Shareholders’ equity (Unit: millions of yen) Number of employees (Unit: persons) Number of stores (Unit: number of stores)

1,000 storesTarget:

The Company achieved the establishment of 500 stores in fiscal yearended March 2001, and now aims at establishing theMatsumotokiyoshi Group throughout Japan by March 2008, bywhich the Company also targets at running 1,000 stores and sales of¥500 billion. The Company is making its utmost to increase theGroup’s net sales to ¥1 trillion by the year through March 2008,comprising of a total of ¥500 billion in its own sales and ¥500billion in sales from tie-up operations.

As the first case of business alliance, the Company formed abusiness partnership with Takada Pharmaceutical Co., Ltd. inShizuoka Prefecture on May 30, 2001. Since then, the Company hasestablished business links with a total of 13 companies: YokohamaPharmacy Co., Ltd. in Aomori Prefecture; Drug Fujii Co., Ltd. inToyama Prefecture; Sapporo Drug Store Co., Ltd. in HokkaidoPrefecture; Natural Co., Ltd. in Fukuoka Prefecture; Shimizu DrugCo., Ltd. in Kyoto Prefecture; Koyo Yakuhin Co., Ltd. in OsakaPrefecture; Itayamamedico Co., Ltd. in Yamanashi Prefecture;Komeya Drugstore Co., Ltd. in Ishikawa Prefecture; Izumi Co., Ltd. inHiroshima Prefecture; Drug Eleven Co., Ltd. in Fukuoka Prefecture;Fujikoshi Co., Ltd. in Fukushima Prefecture; and Chubu Yakuhin Co.,Ltd. in Gifu Prefecture (in March 2005).

As for product distribution, since the Company established jointdistribution centers in November 1995, it has been consistentlysupplying products from 4 joint distribution centers (in Yoshikawacity, Saitama, Yokohama city, Kanagawa, Omihachiman city, Shigaand Ishikari city, Hokkaido) to Matsumotokiyoshi stores all overJapan as well as business partner.

Capital alliance was formed with Tobu Drug Co., Ltd. (25 stores) inSaitama Prefecture and Kenkou Kazoku Drug Corporation (29 stores)in Nagano Prefecture, Itohide Shoji Co., Ltd. (wholesale store ofmiscellaneous daily goods) in Chiba Prefecture and Sugiura Co., Ltd.(47 stores) in Aichi Prefecture in January 2005.The Company will continue to operate with an eye on business andcapital partnership in the future.

Traditional franchised Matsumotokiyoshi stores were primarily runby employees of the Company with internal franchise contract inother words, they are set up in business by the Company, at storesleased by the Company. As part of the plan to open 1,000 storesthroughout Japan by the end of March 2008, the Company organizedthe Store Promotion Group in April 2005 in order to realize a differentway of expansion of franchised stores presently owned, and createda business format and a system of package model targeting a multi-store network of external franchised stores all over Japan. Throughthe above measures, the Company will execute development offranchised Matsumotokiyoshi stores in line with the plan.

Matsumotokiyoshi Co., Ltd. (“the Company”) originates from theprivately-run Matsumoto Drugstore founded by KiyoshiMatsumoto in Kogane, Matsudo city, Chiba Prefecture in 1932.The present Matsumotokiyoshi drugstores firmly maintain thefounder’s spirit of good service to constantly seek customersatisfaction with its motto of “providing quality products at lowprices,” without being shackled by stereotypical mind-set. Thisspirit combines the volume purchase system with the chain storetheory earned by the founder in the United States.

In August 1990, the Company listed on the over-the-countermarket.

In August 1999, the Company listed on the First Section of theTokyo Stock Exchange, and subsequently consolidated its statusas Japan’s largest drugstore in terms of sales.

In 1981, the number of the Company’s stores totaled 100.In July 1987, the Company opened its 250th store in Ueno Ame-

yoko, Tokyo, incorporating a totally new concept of urbandrugstore. The success of this store, boosted in part by themorning shampoo boom in Japan, established a basis for furthergrowth of the urban drugstore chain, accelerating the founding ofa series of Matsumotokiyoshi drugstores in the Tokyometropolitan area.

In August 1995, the Company established its 378th outlet ofShibuya Part 1 Store in central Tokyo. At that time, the new storeoften appeared on TV and magazines as the Shibuya district wasbecoming a source of mass-media information. An article inwomen’s weekly magazine introduced the drugstore, referring tothe phrase Matsukiyo suru (go shopping at Matsumotokiyoshi).Since abbreviations were considered trendy at that time,Matsumotokiyoshi became known throughout Japan by word ofmouth and mass media by the pet name of Matsukiyo.

In April 1996, the Company began TV commercials so thatpeople throughout the nation would become familiar with thedrugstore business and at the same time improve the brand imageof “Matsumotokiyoshi.”

In March 2001, the number of the Company’s chain storesreached 500.

In February 2001, organizational reform was implemented tointegrate the marketing and operational functions of the DrugstoreDivision and the Supermarket Division. Under this new structure,the Company launched a medium-term management plan toincrease the number of stores to 1,000 nationwide by March2008: the number of stores throughout the Kanto region to 900and other regions throughout Japan to 100, mainly in cities withpopulations of at least 200,000, centering on shopping districtsand railway stations with shopping complex.

The Company will strive to become Japan’s No.1 drugstore inthe industry by establishing stores and running operations withthe purpose of satisfying customers, upholding the motto of“friendly stores” and the founder’s spirit of “sincerity” withaffectionate services as its basic principle.

The Company opened 67 Matsumotokiyoshi drugstores in fiscalyear 2004: 27 stores in first half and 40 stores in second half. Thegeographic distribution of the new stores is 1 in Hokkaido, 2 inTohoku, 49 in Kanto, 2 in Koshinetsu, 2 in Tokai, 5 in Kinki, 3 inChugoku and 3 in Kyushu. Currently, Matsumotokiyoshidrugstores are located in 27 prefectures, including Nagano, whichhad 2 new stores. For fiscal year 2005, ending March 2006, theCompany plans to establish 80 to 90 new stores (suburban-typestores: 50%; urban-type stores: 50%). The Company also plansto set up franchised stores.

T O P M E S S A G E

Namio MatsumotoPresident

New store-openings in fiscal year 2004

Expansion of franchised stores

21

Business partnership and M&As

Ginza 5th Store

Drugstore

The Company operates many Matsumotokiyoshi drugstores in prime locations in the Tokyo metropolitan area, has a wide range of excellent

items that meet consumer needs, and markets them together with the consulting services of expert staff. Through such practice, the Company

has built a relationship of deep trust with customers. Matsumotokiyoshi drugstores deal with many items of medicines, healthcare and beauty

care goods, as well as test products of cosmetics under the community-based marketing, meeting the needs of respective customers in each

region where stores are located. By doing so, each store enhances its capabilities to attract customers.

Establishment of a drugstore chain with the highest sales in Japan

[Urban type]

NEW

NEW

NEW

NEW

NEW

NEW

NEW

NEW

RUG STOREDDRUG STORE

43

Shibuya Part 2 Store Shibuya Part 1 Store

Akabane Station East Exit Store

Minami-Ikebukuro Store

Shinjuku 3-chome Store

Roppongi Store

Shinsaibashi Store

Kyoto Shin Kyogoku Store

Sapporo Tanuki Koji Store

Asunal Kanayama Store

LaLaport Koshien Store

Tenjin Chikagai Store Sendai Station Store

Marinoa city Fukuoka Store

Drugstore [in railway station shopping complex]DRUG STOREDRUG STORE

NEW

NEW

NEW

NEW

NEW

NEW

NEW65

Fukuyama Station Store (JR West) Asty Gifu Station Store (JR Tokai)

Crost Osaka Station Store (JR West)

Morioka Station Building Fezan Store (JR East)

Hiroshima Station Building Asse Store (JR West)

Kintetsu Nara Station Store (Kintetsu Railway)

Ebista Nishinomiya Store (Nishinomiya Station of Hanshin Railway)

Fresta Kashii Station Building Store (JR East)

Hirosaki Station Building Applese Store (JR East)

Kintetsu Fuse Station fusse Store (Kintetsu Railway)

Okayama Station B-1 Store (JR West)

Sendai Station East Exit Store (JR East) Abenobashi Station East Exit Store (Kintetsu Railway)

Reinforcement of fresh-food supermarkets

Stable growth by new-concept home centerMatsumotokiyoshi operates home centers using its managerial expertise andstore-operating techniques accumulated for years since its foundation.

Equipped with a large parking lot, a full-scale home center Matsumotokiyoshistocks a wide range of product lineups, including do-it-yourself (DIY)merchandise, exterior goods, automotive accessories, items for pets andgardening articles. With “pay less” discount policy, the home centers havesucceeded in encouraging consumers to buy.

The Company’s supermarket sector operates food supermarkets centering onperishables, with “foods” as the essentials of everyday life. With the motto of“providing quality products at low prices,” our supermarkets stock a greatnumber of high quality merchandise, market them at prices that please thecustomers and offer them conscientious services to customers, as the Companystrives to win the hearts of local customers by precisely identifying their needs.The sector is making its utmost to further grow by, for example, establishing itsown logistics system to stabilize prices and distribution operations.

[Suburban type drugstore/Prescription pharmacy]DRUG STORE Drugstore

UPER MARKET

H

The center holds beautification courses by counseling experts with the topic “beauty andhealth” for employees and organizes workshops for customers with counseling experts.

Pharmacists Research and Training Center

Human Resource Development

Matsumotokiyoshi has been enhancing and expanding to fill aprescription for becoming “Personal Pharmacy in Local Area.”As part of this initiative, the Company has establishedPharmacists Research and Training Center with cutting-edge offacilities in 2002. This center has allowed our pharmacists toacquire sophisticated expertise and technology based on the

In this dispensing simulation room,pharmacists can experiencesequence of service from accept ofprescription, dispensing to deliveryof medicine. This enablespharmacists to obtain practicalknowledge and skills that can beutilized in prescription works in astore. Our training facilities are thebest among other drugstores andare one of the distinctivecharacteristics of Matsumotokiyoshithat focuses on prescription.

Dispensing Simulation Room DI (drug information) room collects

and manages all information related topharmaceuticals including Over-the-Counter drugs. In this office, staff canaccess the latest pharmaceuticalinformation. In addition, specializedstaff answers inquiries from eachMatsumotokiyoshi store. DI officeserves as so-called help desk forpharmacists by clarifying unclearpoints and answering questionsregarding pharmaceuticals.

DI Room

In the lecture room, pharmacists canlearn essential knowledge forpharmacists through lectures.Besides internal lecturers such astraining staff and senior staff withextensive experience, we also inviteguest instructors from outside as needarises so that pharmacists can obtainbroad range of knowledge from basicsof pharmacy and new drugs to clinicalpharmacy.

Lecture RoomComputer literacy has become anessential skill for pharmacists becauseof its wide usage such as calculationof dispensing fees, output of invoiceand management of customerinformation and medication history. Inthe Company’s training room, which isequipped with state-of-the-artequipments, pharmacists can learnhow PC application is useful for actualsituations over the counter, as well asbasic knowledge and know-howregarding data management andinvoice.

PC Training Room

curriculum prepared under the general editorship of a professorat school of medicine. In addition, the Company has preparedvarious training programs in which pharmacists can getpractical experiences to get ready for the actual prescriptionworks, enabling them to improve their skill as pharmacistefficiently and effectively.

Cosmetics Training Center

DRUG STORE

UPER MARKETSS

OME CENTEROME CENTERH

NEW

87

Drugstore Urayasu Higashino

Drugstore Chiba Sakusabe Pharmacy Souka

Pharmacy Ashikaga Honjo

Prescription counter

Supermarket Yakuendai

Futatsugi Home Center Store

“e! Matsumotokiyoshi” was opened as the Internet shopping site for the Company onYahoo! shopping (PC website) and i-mode shopping (mobile website) in May 2004, sincethen it has expanded to sell nearly 2,000 items.The Company, a leading company in the drugstore business, has been striving forestablishing new business categories, in addition to the current concepts for storedevelopment and franchised business. Moreover, by exploiting our advantage as the largestdrugstore in Japan in terms of sales, we will aim at business expansion by providingaccurate product information based on the expertise of specialized pharmacists andnutritionists and their latest information as well as medically selected cosmetics tocustomers. Following is the product category and business segment:

- Core products in beauty and health related: hair care products, body care products, supplement, diet food, health food, toiletries, beautymachines, baby goods, nursing care goods, daily necessities, gifts and health food.

- Products with limited offer at *mk selection: medical cosmetics, popular cosmetics by word-of-mouth, natural cosmetics, esthetic cosmetics,slimming cosmetics, slimming machines, diet supplement, beauty supplement, body parts care products, body care products and bathagent, medical facial equipments and highly selected makeup products.

e! Matsumotokiyoshi

Matsumotokiyoshi Membership Card

Matsumotokiyoshi Point Card

(As of April 30, 2005)

TOPICS

SELF MEDICATION SUPPORT

Fuji TelevisionNetwork (CX)

Very Very Saturday! (nationwide broadcast)Waratte Iitomo! ZokangoOwarai ToryumonGekidan EngishaShimura-tsuKitano Talent MeikanChonan Kang 2Sanma no Manma

*Live coverage of night baseball game will be broadcast as replacement program within the airtime of“Tensai! Shimura Dobutsuen” on NTV and “Super Friday” on TBS (Contents of broadcasting programs andbroadcast night games may differ depending on the area).

8:30 - 9:55 (Saturday)10:00 - 11:45 (Sunday)25:04 - 25:31 (Monday)24:58 - 25:28 (Tuesday)24:58 - 25:28 (Wednesday)25:05 - 25:35 (Thursday)25:35 - 25:50 (Friday)26:20 - 26:50 (Friday)

TV station Program name Time slot (day of the week)

Nippon Television(NTV)

Tokyo BroadcastingSystem (TBS)

Tensai! Shimura Dobutsuen (nationwide broadcast)Live coverage of Night baseball game (Tokyo, Osaka, Hiroshima, Fukuoka)NNN Document ‘04Omoikkiri TVSuper Friday (nationwide broadcast)Live coverage of Night baseball game (Tokyo, Osaka, Hiroshima, Fukuoka)Gekko OngakudanHanataka TenguAzassu!Okami ShonenR - 30

19:00 - 19:58 (Thursday)19:00 - 20:54 (Thursday)

24:25 - 24:55 (Sunday)12:00 - 13:55 (Monday through Friday)18:55 - 20:54 (Friday)18:55 - 20:54 (Friday)

23:55 - 24:30 (Monday)23:55 - 24:30 (Tuesday)23:55 - 24:30 (Wednesday)23:55 - 24:30 (Thursday)25:05 - 25:50 (Friday)

TV station Program name Time slot (day of the week)

Matsumotokiyoshi-sponsored TV programs

Members of popular Matsumotokiyoshi Membership Card on the rise

Lineups of private brand products on the rise

Self Medication Support

Sales of health food

Sales of OTC drugs (generic drugs)

Nursing care support

Dispensing service

Sales of cosmetics

Sales of daily necessities

Matsumotokiyoshi’s business lineup

The Company markets extensive lineup of cosmetics andbeauty-care related products so as to meet the needs of

female customers.

In-depth marketing has enabled the Company to offervarious high quality and new products that are suitable for

the location and customer of each Matsumotokiyoshistore. We also deal with individual customers

meticulously.

Matsumotokiyoshi has been carefully preparing andpromoting to create a system to offer full-scale nursing

care support service.

At Matsumotokiyoshi stores, pharmacists dispensemedications accurately and quickly instructed doctors’

prescription. In addition, we have been strengthening andexpanding dispensing service by providing the service by

all newly opened stores.

Matsumotokiyoshi offers a broad range of health foodproducts such as supplement and health-promoting food to

meet consumers’ needs toward health conscious. Consultingservice is adequately provided for such purposes to advicethat a consumer should avoid taking a health food with a

certain drug.

Through tender service to customers, we offer appropriateadvice and care, as well as select the most suitable drugs

among a wide range of OTC drugs for each customer.

*Note that mk selection is a general term for sales floors dealing with highly selected medical cosmetics that exceed the normal price range and productcategories of Matsumotokiyoshi and offered at limited stores such as Shibuya Part 1 Store, Shinjuku 3-chome Store, Shinsaibashi Store.

E-commerce site –

109

No registration fee, no annual membership fee for ever.New members receive a Matsumotokiyoshi Voucher worth ¥1,000.When paying by Matsumotokiyoshi Membership Card, the member gets a 10% discount from list prices for Shiseido, Kanebo, Kose, KaoSofina and Max Factor products (excluding exceptional periods).When paying by Matsumotokiyoshi Membership Card in Japan or abroad, the member gets 1 point for every ¥100 purchase, and will receivea Matsumotokiyoshi Voucher when the points exceed 500. When the number of members increases by 100,000, the Company draws a lottery and awards overseas trips to 500 pairs or 1,000 personsamong the members who have paid more than ¥5,000 using the card.The members can use telephone counseling services regarding health, medical treatment andnursing care round-the-clock all year round. The members can easily shop and cash.The members will be informed of various events and present campaigns.The members are covered by overseas travel accident insuranceup to ¥20 million.The members are covered by domestic travel accident insuranceup to ¥10 million.The members are covered by buckled-up car accident insurance upto ¥2 million.The members are ensured against loss or theft of the card.

One point is added for every shopping worth ¥100.When the points reach the first 300 points, the customer gets a deduction of ¥300 from the purchase total.When the points reach 500, the customer gets Matsumotokiyoshi Prepaid Card equivalent to ¥500 or adeduction of ¥500 from the purchase total.The members get additional “Goopon” points as double point privilege with their purchase.The members can convert every 500 points to ANA mileage as 100 miles.

Numberofstores

Division Number of stores Number of stores by prefecture

Drugstore

SupermarketHome center

Total

680 (16)

Number of stores by region

9 (-)5 (-)

694 (16)

The drugstore business is surrounded by such conditions as intensification ofcompetition for new store opening, entrants into the industry from differentsectors and lowering profitability due to fierce price competition.

Facing such business conditions, the Company has formed businesspartnership with other firms to develop future businesses and improve operationalefficiency, through information exchanges, mutual supply of products andcooperation in the planning and development of private brand products.

Sapporo Drug Store Co., Ltd. Headquarters: Sapporo, Hokkaido Prefecture

Shimizu Drug Co., Ltd. Headquarters: Kyoto, Kyoto Prefecture

Yokohama Pharmacy Co., Ltd. (Super Drug Asahi)Headquarters: Itayanagi-machi, Aomori Prefecture

Koyo Yakuhin Co., Ltd. (Koyo)Headquarters: Osaka, Osaka Prefecture

Itayamamedico Co., Ltd. Headquarters: Kofu, Yamanashi Prefecture

Drug Fujii Co., Ltd. Headquarters: Takaoka, Toyama Prefecture

Takada Pharmaceutical Co., Ltd. Headquarters: Shizuoka, Shizuoka Prefecture

Natural Co., Ltd. (Drugstore Mori) Headquarters: Amagi, Fukuoka Prefecture

Izumi Co., Ltd. Headquarters: Hiroshima, Hiroshima Prefecture

Komeya Drugstore Co., Ltd.Headquarters: Tsurugi-machi, Ishikawa Prefecture

Chubu Yakuhin Co., Ltd.Headquarters: Tajimi, Gifu Prefecture

Fujikoshi Co., Ltd. Headquarters: Iwaki, Fukushima Prefecture

Drug Eleven Co., Ltd. Headquarters: Onojo, Fukuoka Prefecture

Tobu Drug Co., Ltd. Headquarters: Matsudo, Chiba Prefecture

Kenkou Kazoku Drug Corporation (Family Drugstore) Headquarters: Okaya, Nagano Prefecture

Sugiura Yakuhin Co., Ltd.Headquarters: Konan, Aichi Prefecture

Itohide Shoji Co., Ltd.Headquarters: Matsudo, Chiba Prefecture

Note: The figures in parentheses are the number of franchises. The nine franchises in Saitama Prefecture are stores of Yano Co., Ltd.

Total number of stores: 748

Kenkou Kazoku: 29Tobu Drug: 25

Ishikari Distribution Center

Yoshikawa DistributionCenter

Yokohama Distribution Center

Omihachiman Distribution Center

HiroshimaPrefecture

OitaPrefecture

OkayamaPrefecture

KyotoPrefecture

AkitaPrefecture

AomoriPrefecture

IwatePrefecture

MiyagiPrefecture

FukushimaPrefecture

NiigataPrefecture

GunmaPrefecture

TochigiPrefecture

IbarakiPrefecture

ChibaPrefecture

SaitamaPrefecture

TokyoMetropolis

KanagawaPrefecture

HokkaidoPrefecture

HyogoPrefecture

GifuPrefecture

OsakaPrefecture

NaraPrefecture

MiePrefecture

AichiPrefecture

ShizuokaPrefecture

NaganoPrefecture

(As of March 31, 2005)

FukuokaPrefecture

Business Partnership

Capital Partnership

Business/Capital Partnership

Hokkaido: Aomori: Yamagata: Tokyo: Ibaraki: Yamanashi: Toyama: Aichi: Osaka: Nara: Tottori: Yamaguchi: Tokushima: Fukuoka: Oita: Okinawa:

2 (-)2 (-) - (-)

148 (2)54 (-)

- (-)- (-)4 (-)5 (-) 1 (-)- (-)- (-)- (-)6 (-)1 (-)- (-)

Iwate: Fukushima: Kanagawa: Tochigi: Nagano: Ishikawa: Gifu: Hyogo: Wakayama: Shimane:

Kagawa: Saga: Miyazaki:

1 (-) 8 (-)

64 (-)31 (-)

2 (-)- (-)1 (-)4 (-)- (-)- (-)

- (-)- (-)- (-)

Miyagi:

Saitama: Gunma: Niigata: Fukui: Shizuoka: Kyoto:

Okayama:

Ehime: Nagasaki: Kagoshima:

3 (-)

109 (9)26 (-)

1 (-)- (-)2 (-)2 (-)

1 (-)

- (-)- (-)- (-)

Akita:

Chiba:

Mie: Shiga:

Hiroshima:

Kochi: Kumamoto:

1 (-)

195 (5)

2 (-)- (-)

4 (-)

- (-)- (-)

2 (-)15 (-)

627 (16)

3 (-)- (-)9 (-)

12 (-)

5 (-)

- (-)7 (-)

- (-)

Hokkaido:Tohoku:

Kanto:

Koshinetsu:Hokuriku:Tokai:Kinki:

Chugoku:

Shikoku:Kyushu:

Okinawa:

Hokkaido: Aomori: Yamagata: Tokyo: Ibaraki: Yamanashi: Toyama: Aichi: Osaka: Nara: Tottori: Yamaguchi: Tokushima: Fukuoka: Oita: Okinawa:

2 (-)2 (-) - (-)

149 (2)54 (-)

- (-)- (-)4 (-)5 (-) 1 (-)- (-)- (-)- (-)6 (-)1 (-)- (-)

Iwate: Fukushima: Kanagawa: Tochigi: Nagano: Ishikawa: Gifu: Hyogo: Wakayama: Shimane:

Kagawa: Saga: Miyazaki:

1 (-) 8 (-)

64 (-)31 (-)

2 (-)- (-)1 (-)4 (-)- (-)- (-)

- (-)- (-)- (-)

Miyagi:

Saitama: Gunma: Niigata: Fukui: Shizuoka: Kyoto:

Okayama:

Ehime: Nagasaki: Kagoshima:

3 (-)

110 (9)26 (-)

1 (-)- (-)2 (-)2 (-)

1 (-)

- (-)- (-)- (-)

Akita:

Chiba:

Mie: Shiga:

Hiroshima:

Kochi: Kumamoto:

1 (-)

207 (5)

2 (-)- (-)

4 (-)

- (-)- (-)

2 (-)15 (-)

641 (16)

3 (-)- (-)9 (-)

12 (-)

5 (-)

- (-)7 (-)

- (-)

Hokkaido: Tohoku:

Kanto:

Koshinetsu: Hokuriku: Tokai: Kinki:

Chugoku:

Shikoku: Kyushu:

Okinawa:

Chiba: 9 (-)

Tokyo: 1 (-) Saitama: 1 (-) Chiba: 3 (-)

9 (-)

5 (-)

Kanto:

Kanto:

(as of March 31, 2005)

(as of March 31, 2005)

1211

Stores Location

2 drugstores

2 drugstores

1 drugstore

1 drugstore

3 drugstores

8 drugstores

31 drugstores

26 drugstores

2 drugstores

4 drugstores

4 drugstores6 drugstores

1 drugstore

1 drugstore

5 drugstores

1 drugstore

2 dr ugstores

2 dr ugstores

4 dr ugstores

64 drugstores

54 drugstores

148 drugstores1 home center6 Tobu Drug

195 drugstores9 supermarkets3 home centers3 Tobu Drug109 drugstores

1 home center16 Tobu Drug

2 drugstores29 Kenkou Kazoku

Drugstores: 680Supermarkets: 9Home centers: 5Capital Partnership: 54

1 drugstore

1 d rugstore

Corporate Data Corporate History

Organization Chart

Prescription Drug Promotion Dept.Store Development Div. II

Store Development Div. I

Prescription Drug & Pharmaceutical Div.

Store Operation Group

Sales & Planning Group

Merchandise Group

Store Promotion Div.

Sales Planning Div.

Finance & Accounting Div.

General Affairs Div.

Pharmaceutical Affairs Dept.

Partnership Operation Dept.

Partnership Operation Div. Subsidiaries Management Dept.

FC Planning & Operation Div. FC Administration Dept.

Pharmacy Div.Pharmacy Dept. I

Pharmacy Dept. II

Information Technology Div.Information Technology Dept.

Product Data Management System Dept.

Drugstore Div.

Drugstore Dept. I

Drugstore Dept. II

Drugstore Dept. III

Store Promotion Dept. I

Store Promotion Dept. II

Advertising Dept.

Operation & Planning Dept.

Sales Promotion Dept.

Merchandise Div. II

Perishables Team

DIY Team

Food Products Team

Merchandise Development Div. Merchandise Development Dept.

Merchandise Div. I

Household & Miscellaneous Goods Team

Beauty Products Team

Pharmaceutical Products Team

Financial Planning Dept.

Accounting Dept.

Budget Dept.

Finance Dept.

Personnel Div.

Education and Training Dept.

Personnel Management Dept.

Personnel Dept. I

Personnel Dept. II

General Affairs Dept.

Store Development GroupDirector

Sales & Merchandising GroupDirector

Finance & Accounting GroupDirector

Store Promotion Group

Auditing Department I

Auditing Department II

Legal Department

Claims Call Center

Board of Auditors

Senior Management Director

Corporate Communications Div.

Office of President

Internal Auditing Div.

President

General Shareholders’ Meeting

Board of Directors

Stores

Corporate name:

Address:

Phone:

Established:

Incorporate:

Common stock:

Book closing date:

Board of Directors:

Business line:

Net sales:

Number of employees:

Matsumotokiyoshi Co., Ltd.

9-1 Shinmatsudo-Higashi, Matsudo-shi, Chiba 270-8501

+81-47-344-5111 (switchboard)

December 26, 1932

January 8, 1954

¥21.086 billion

March 31

President: Namio Matsumoto

Senior Managing Director: Masashi Yoshida

Managing Director: Katsuhiko Terada

Director: Tetsuo Matsumoto

Director: Toshio Hayata

Director: Takao Watanabe

Director: Yukihiko Okubo

Director: Kazuaki Karahi

Director: Kazumi Matsumoto

Standing Corporate Auditor: Jun Saga

Corporate Auditor: Masato Taimura

Corporate Auditor: Tetsuo Oiwa

Corporate Auditor: Susumu Torigoe

Medicines, cosmetics, perishable foods, sundries, DIY

articles, etc.

¥291.1 billion (Year ended March 2005)

Full-time employees: 3,147

Part-timers: 3,316 (in terms of 8-hours’ working time)

Total: 6,463

UenoKita-Senju Matsudo

Shin-Matsudo

Transfer to a local train

JR Joban Line

To Minami-Urawa

To Nishi-Funabashi

To Ueno To Kashiwa

Chiyoda Line Hibiya Line

Tobu-Isesaki Line

The Park

Kashiwa

Shin-Matsudo

The Chiba Bank, Ltd.

Head office

Store outside of Shin-Matsudo Station

(As of March 31, 2005)

(from April 1, 2005)

1413

Outline of the Company

Head office

Dec.1932

Jan. 1954

May 1973 Apr. 1975

Mar.1977 Sep.1978

Oct. 1978 Jul. 1987 Nov.1988Aug.1990

Jul. 1992 Oct. 1993

Mar.1994

Aug.1994 Aug.1995 Apr. 1996

Nov.1996

Jan. 1997 Nov.1998

Dec.1998 May 1999

Jul. 1999

Aug.1999

Mar.2000

Aug.2000 Feb. 2001 Mar.2001 May 2001

Jun. 2001

Jul. 2001

Aug.2001

Oct. 2001

Feb. 2002

Apr. 2002 Jun. 2002

Jul. 2002

Oct. 2002

Nov.2002

Dec.2002

Jan. 2003

Feb. 2003

Mar.2003

Apr. 2003

May 2003

Aug.2003

Oct. 2003

Nov.2003

Dec.2003

Jan. 2004

Feb. 2004

Mar.2004

May 2004

Jan. 2005

Mar.2005

Founded on Dec. 26 as an independent businessoperator Matsumoto Drugstore at 44 Kogane, Matsudocity, Chiba Prefecture.

Became incorporated. Trade name was renamed toMatsumotokiyoshi Drugstore.Founder Kiyoshi Matsumoto died at 64.Matsumotokiyoshi Drugstore was reorganized into joint-stock company Matsumotokiyoshi Co., Ltd.Kazuna Matsumoto took office as president.Opened supermarket Hikarigaoka Store.Established three business divisions: Drugstore,Supermarket and Convenience Store.Launched Benri Shinmatsudo Store (convenience store).Opened Ueno Ame-yoko Store.Opened Minami-Masuo Home Center Store.Became listed on the over-the-counter market. (TheCompany received approval from the Japan SecuritiesDealers Association to register its shares on the over-the-counter market.)Opened Ikebukuro Higashiguchi Store.Relocated the head office to 9-1, Shinmatsudo-Higashi,Matsudo city, Chiba Prefecture.Opened drugstore Kashiwa Kaga Store (1st roadsidestore).Opened prescription pharmacy Kita-Matsudo Store.Opened Shibuya Part 1 Store.Launched TV commercials. Number of stores totaled232.Integrated Convenience Store Division into DrugstoreDivision.Opened drugstore Ota Takara-chou Store (1st store inGunma Prefecture).Opened drugstore Ashikaga Asakura Store (1st store inTochigi Prefecture).Opened Roppongi Store.Opened Sendai Jujiya Store (1st store in MiyagiPrefecture).Opened Harajuku Takeshita-dori Store.Opened Ginza 5th Store.Opened Shinjuku 3-chome Store.Opened Sendai Chuo-dori Store.Opened drugstore Niigata Station Patio East Store (1ststore in Niigata Prefecture). Listed on the First Section of the Tokyo Stock Exchange.Opened Shibuya Part 2 Store.Opened Crost Osaka Station Store (1st store in OsakaPrefecture).Opened Tokorozawa Part 2 Store.Namio Matsumoto took office as president.Opened Ikebukuro Part 2 Store.Formed business partnership with TakadaPharmaceutical Co., Ltd. in Shizuoka Prefecture.Formed business partnership with Yokohama PharmacyCo., Ltd. in Aomori Prefecture.Formed business partnership with Drug Fujii Co., Ltd. inToyama Prefecture.Opened Abenobashi Station East Exit Store (2nd store inOsaka Prefecture).Opened Tenjin Matsuya-Ladies Store (1st store in Fukuoka Prefecture and Kyushu as well).

Formed business partnership with Sapporo Drug StoreCo., Ltd. in Hokkaido Prefecture.Formed business partnership with Natural Co., Ltd. inFukuoka Prefecture.

Formed business partnership with Shimizu Drug Co.,Ltd. in Kyoto Prefecture.Launched a point card service.Opened Canal City Hakata Store (2nd store in FukuokaPrefecture).Opened Okayama Station B-1 Store (1st store inOkayama Prefecture).Formed business partnership with Koyo Yakuhin Co.,Ltd. in Osaka Prefecture.Opened Hamamatsu Part 1 Store (1st store in ShizuokaPrefecture).Opened Shinsaibashi Store (3rd store in OsakaPrefecture).Established Pharmacists Education Center andCosmetics Education Center.Formed business partnership with Itayamamedico Co.,Ltd. in Yamanashi Prefecture.Opened Ebista Nishinomiya Store (1st store in HyogoPrefecture).Opened Fukuyama LOTZ Store (1st store in HiroshimaPrefecture).Opened Kintetsu Nara Station Store (1st store in NaraPrefecture).Adviser Toshiko Matsumoto (wife of the late KiyoshiMatsumoto) died.Opened Akita Station ALS Store (1st store in AkitaPrefecture).Formed business partnership with Komeya DrugstoreCo., Ltd. in Ishikawa Prefecture.Opened Aomori Station Building Lovina Store (1st storein Aomori Prefecture).Opened Sapporo Minami Ichijo Store (1st store inHokkaido Prefecture).Opened Park Place Oita Store (1st store in OitaPrefecture).Opened Asty Gifu Station Store (1st store in GifuPrefecture).Opened Tsu Station Cham Store (1st store in MiePrefecture).Opened Kyoto Shijo-dori Store (1st store in KyotoPrefecture).Formed business partnership with Tobu Drug Co., Ltd.in Saitama Prefecture.Executed a 2-for-1 stock split for shareholders listed onshareholders register as of Dec. 31.Formed business partnership with Kenkou Kazoku DrugCorporation in Nagano Prefecture.Formed business partnership with Izumi Co., Ltd. inHiroshima Prefecture.Formed business partnership with Drug Eleven Co., Ltd.in Fukuoka Prefecture.Formed business partnership with Itohide Shoji Co., Ltd.in Chiba Prefecture. Opened Nagano Station Store (the first store in NaganoPrefecture).Formed business partnership with Fujikoshi Co., Ltd. inFukushima Prefecture.Formed business and capital partnership with SugiuraYakuhin Co., Ltd. in Aichi Prefecture.Formed business partnership with Chubu Yakuhin Co.,Ltd. in Gifu Prefecture.

Founder Kiyoshi Matsumoto Matsumoto Drugstore at time of foundation.

Commemorative ceremonyfor the 70th anniversary ofMatsumotokiyoshi’sfoundation