ANNUAL REPORT 2007

PARAMOUNT BED CO., LTD.

Profile

Statement:

As Human, for Human
Paramount Bed Co., Ltd., founded in 1947, is a pioneer in the field of medical beds.
Using its own unique integrated production system, it has been providing products
designed not only to improve conditions for convalescing patients, but also to facilitate
the work of caregivers for more than half a century. With the aging of the Japanese
population, in recent years it has expanded its scope of business to cover facilities forthe elderly and home nursing care, developing home-care beds and various other types
of welfare equipment. These initiatives are in line with Paramount Bed’s goal of creatinga patient-friendly healthcare environment.
The Paramount Bed group consists of Paramount Bed and 7 consolidated subsidiaries(as of March 31, 2007). In the fiscal year to March 2007, it had net sales of ¥35,928
million, operating income of ¥841 million and net loss of ¥2,033 million. Paramount Bed
is Japan’s leading maker of medical beds and has acquired a strong reputation, as
reflected in its domestic market share of 70% (PB estimate).

Contents
2 Financial Highlights

17 Consolidated Statements of Cash Flows

3 To Our Shareholders

18 Notes to Consolidated Financial Statements

5 Topics

24 Independent Auditors’ Report

7 Product Lineup

25 Corporate History

9 Special Features

26 Corporate Information

10 Six-year Summary

Corporate Data

11 Business Review in Fiscal 2007

Board of Directors and Corporate Auditors

13 Consolidated Balance Sheets

Shareholder Information

15 Consolidated Statements of Operations

Network

16 Consolidated Statements of Changes in Equity

Disclaimer Regarding Forward-Looking Statements
The information contained in this annual report is given for the sole purpose of providing information regarding the business performance ofParamount Bed Co., Ltd. during the fiscal year ended March 31, 2007, and is not intended to solicit investment in any securities issued by
the Company. Any statements with respect to Paramount Bed’s current plans, strategies and forecasts are forward-looking statements
based upon information available as of March 31, 2007, and involve known and unknown risks and uncertainties. Actual events and results
may differ materially from those anticipated in these statements.

1

Financial Highlights
Paramount Bed Co., Ltd. and Subsidiaries — Years ended March 31, 2007 and 2006

Millions of yen

2006

2007
For the year:
Net sales
Operating income(Loss) income before income taxes and minority interests
Net (loss) income
Per share data (yen):
Basic net (loss) income
Diluted net income
Total equity
At year-end:
Total assets
Total equity¥

Thousands of U.S. dollars¥

35,928841(2,359)(2,033)

2007

51,011
6,331
6,544
3,782

$

304,346
7,124(19,983)(17,221)(66.83)—2,150.22

120.61120.592,300.19(0.57)—
18.21

76,47865,51084,31570,016

647,844554,935

Note: The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥118.05 to U.S.$1, the approximate exchange rate at March 31, 2007, as discribed.

Net sales

Millions of yen

60,00045,000Operating income
8,000

45,77447,89550,616

7,103

51,011
6,000

Millions of yen

7,632
6,331

5,891

35,92830,0004,000

15,000

2,000

0

0

841

2003

2004

2005

2006

Net (loss) income

Millions of yen

6,000

4,000

2004

2005

2006

Total equity

2007

Millions of yen

80,000

5,140
4,182

2003

2007

3,782

60,000

3,127

2,000

61,14866,16069,90070,016

2005

2006

65,51040,000(2,033)0

20,0000(3,000)

2003

2004

2005

2006

2007

2003

2004

2007

2

To Our Shareholders

We strive to create
a comfortable healthcare environment
with advanced technology andconsideration towards users.

Streamlined management in response toradical changes in the business environment
During the fiscal year under review, earnings of Paramount
Bed Co., Ltd. deteriorated greatly due to radical changes
in the business environment, following major revisions oflaws in both the medical and nursing-care sectors. Under
such circumstances, the Company decided to review
drastically our cost structure and carried out management
rationalization. This included: reducing the directors’monthly remuneration and managers’ salaries; soliciting
voluntary retirement; reviewing general expenses; andimplementing measures such as discontinuing TV
commercials and deciding on the consolidation andreorganization of our domestic plants.
For the fiscal year ended March 2007, the Company
posted consolidated net sales of ¥35,928 million (down
29.6% year-on-year) and net income fell to a net loss
amounting to ¥2,033 million, the first time to record a net
loss since listing on the TSE, owing to premium severance
payments to voluntary retirees and impairment losses onplants.
As for dividend payments, the Company disbursed ¥25
per share as a year-end dividend, the same amount as
the interim dividend, for the fiscal year ended March 2007,
Kenji Kimura
President and Representative Director3

fulfilling stable and ongoing profit returns to ourbusinesses, concentrating on both the Japanese andshareholders. For the fiscal year ending March 2008,

overseas markets as well. The Company group has been

however, the Company regrettably will have to discontinue

strengthening its overseas operations for more than ten

abandon the current dividend payment level because theyears since the establishment of its plant in Indonesia, ourCompany’s performance level has not yet fully recovered.

first overseas production base. In December 2006,

Meanwhile, we plan to disburse ¥15 per share to ourCorona Medical S.A.S., the second largest manufacturer

shareholders as both interim and year-end dividends,

of medical and nursing-care beds in France, became ourwhich is ¥10 lower per share over the previous year,

affiliate. This development enabled us to make strategic

totaling ¥30 per share annually. We appreciate yourmoves in the healthcare bed markets in France, Italy andunderstanding in this decision.

Spain. Positioning Corona Medical S.A.S. as the marketingstrategic affiliate for the European market, we will further

Medium and long-term management
strategies

accelerate the globalization of our businesses. In addition,
we will promote building an optimum global production
system through collaboration with our three overseas

From the next fiscal year, the Company will strive to

production bases (Indonesia, China and France) andrecover earnings and expand business operations inJapanese plants.

accordance with three medium and long-term
management strategies: “maintenance and expansion of

Lastly, another challenge for us is to enhance efforts

the existing businesses,” “globalization of businesses

towards new businesses. We have been carrying out the(reinforcement of overseas operations)” andhome nursing care business under the nursing-care“enhancement of efforts towards new businesses.”insurance program, which allows customers to leasenursing-care beds by paying 10% of the leasing fees. We

Since its foundation, the Company has focused on the

believe there is also still room for development of thedevelopment and manufacture of medical beds andbusiness for general consumers who purchase nursing-ancillary products as its core business under the publiccare beds at their own expense without using theinsurance system. With the growth of social security

insurance system. For instance, we are eagerly

expenses being controlled in recent years, it is anticipateddiscussing how to develop the marketing of electric beds

that medical techniques will continue to grow more

for healthy adults, and other products utilizing our know-

sophisticated, and use of information technology in the

how in nursing-care beds, including development of

medical sector, as well as the realignment of hospital bed

products and price strategies. We will aim to create new

systems, will increase. Considering such changes to bemarkets other than the market covered by the nursing-business opportunities, we will do our utmost to maintaincare insurance program as well.

and expand existing businesses while ensuring ourcompetitiveness. We will proactively work to develop new
products and services, searching for various ways toJuly 2007

achieve potential growth, including alliances in different
business categories.
We believe globalization of businesses is our greatest
challenge. We must also think how to develop our current

Kenji Kimura
President and Representative Director

4Topics

Corona Medical of France has been put
under the umbrella of Paramount Group— A foothold for world strategies
In December 2006 we brought Corona Medical S.A.S., thesecond largest manufacturer of medical and nursing-care

New products

Launched Pharma Series Beds,
beds for use in the home that provide
relaxation and peace of mind

beds in France, under our wing by acquiring shares heldby Corbon Holding S.A.S., the holding company of Corona

On November 1, the Company started marketing theMedical S.A.S., and making the French manufacturer a

Pharma Series Beds, electric remote-controlled beds for

subsidiary.

general households that include many of the samefunctions of nursing-care beds when accessories are

Corona Medical S.A.S., established in 1954, holds about

attached.

20% of the market share in France. Though their domestic
sales account for about 90% of the total sales, they export

The Pharma Series Beds are electric remote-controlled

products to Spain, the United Arab Emirates and otherbeds that have been developed for broad use in generalcountries. End users of Corona Medical S.A.S. are hospitals,

households. They feature user-friendly control to keep

facilities for the elderly, and individuals, just like our end users.

comfortable bed posture, and are designed for use
matching the interiors of both Japanese and Western style

With Corona Medical S.A.S. joining our Group, werooms.

anticipate mutual improvements of technology throughtechnology exchange, and promotion of joint procurement

Users can attach accessories used for nursing-care beds

as well as increased sales such as those to the Middle

such as the “swing arm assistive bar” that provides theand near East regions, while utilizing these areas asnecessary support for users who have difficulty movingbases for entry into the European market.

from the bed. We intend to market these products tocollective housing for the elderly.

Outline of Corona Medical S.A.S.
Date of establishment: 1954
Capital:Approximately ¥110 million
Sales:
Approximately ¥4,200 million (FY2006)

New product of Corona Medical S.A.S.

5

Price: Sold under an open pricing system

Launched beds for newborn infants
that are designed to be friendly to bothinfants and mothers

Fully remodeled one-motor type
“Aura Electric Bed”

In February 2007, we released beds for infants (KB-115

The Company fully remodeled the one-motor type “Auraand KB-116), with the image of “young leaves” under theElectric Bed,” which had been favorably accepted sinceconcept of “wrapping newborn infants gently andits release in 1983, and launched its remodeled type on

comfortably.”

October 2.

The newly developed beds for newborn infants are

The new “Aura Electric Bed” adopts a mechanism to raiseequipped with a height and angle adjustment function,

users’ backs and knees, making it easier to shift their

which allow mothers, not to mention nursing staff, to easily

bodies when their backs are raised, and helps them keep

adjust the bed’s height and angle with a lever and aa comfortable posture on the bed. It is also designed soplastic basket with a wide opening to make changing

that it is possible to attach bed accessories such as adiapers easy, as well as silent casters to reduce noise“swing arm assistive bar” for improvement of user-

while moving.

friendliness and safety.

These new beds also take the safety of newborn infants

The new model is a unified dark woody color, giving due

into consideration. For example, they are equipped withconsideration for comfortable use even in a Japanesetransportation grips, which serve as bumpers, so that any

style room, as well as matching up easily with othershock from an impact is not directly conveyed to thefurniture.

plastic parts of the bed.

Price: ¥137,000 (tax not included)

Price:“KB-116” ¥165,900(including tax, shownon left)“KB-115” ¥134,400(including tax, shownon right)

6

Product Lineup

Hospital beds
Beds must provide safety, comfort and ease of operation.
Our hospital bed line offers a full range, from sophisticatedto standard models. The SO-7000 is a high quality nursingcare bed that features sophisticated functionality anddesign. Its robust and high quality manufacture supports
modern medical care.

Beds for elderly-care facilities

Acute care (for special rooms)
Falling out of bed can be a cause ofserious injury for residents of elderly-carefacilities. Our ultra-low Callisto beds
(Callisto Series) reduce the risk of harm in
the event of a fall. (Photo shows bed fittedwith Thestor shock-absorbing mattress)

Advanced, emergency use

SO-7000

KA-8900 ICU bed
Callisto series

Metis series

Woody seriesMulti-Purpose Medical Chair7

Beds for the home (INTIME)
Everyone spends time in bed, and thesemodels are designed to facilitate deep,
refreshing sleep.

Home-care beds
Demand for rental home-care beds hasgrown rapidly since the start of thenursing-care insurance program. The
Rakusho Series is designed to cater tothe varied needs of different users.

INTIME 7000 series

Bed peripherals
Mattresses
With elasticity similar to the human body’s,
the new released “Ever Fit” reduces theresistance produced when users turn overon the bed and it also stabilizes theposture during sleep.
The mattress is reversible and both sides
have different functions that users canchoose to suit their condition, build andpreference.
We also offer the versatile Preglar Matress,
for use in hospitals, elderly-care facilities
and home care.

Style Port

Ever Fit mattress

Preglar mattress

Rakusho series

Other Products
Scot-klean is a urine collector that automatically activates to collect urine when
it detects the presence of urine. The Patient Lifter assists in moving patients
between bed and wheelchair.
This unit is based on an original concept
developed by Paramount Bed. We alsooffer a wide range of bed peripherals,
such as drip stands, designed tomaximize usability.
Wide Aura bed
Scot-klean

KK-330S Wheelchair

Patient Lifter

I.V Stand

8

Special Features

Launched“INTIME7000” Series
INTIME is the brand of beds for healthy adults, withwhich we propose “good quality sleep and health.”
On September 25, the Company announced the“INTIME7000” series, the first fully remodeled versionof the product since its launch in May 2003.
The product was completely remodeled from scratch,including size, functionality and design, anticipating
the needs of the next-generation of bedrooms.

Image of the “INTIME7000” series

The prices of the new series range from ¥407,000 to ¥590,000 (including tax).

Characteristics of “INTIME7000”
We developed the “INTIME7000” series, which inherited all the characteristics of the existing INTIME products, targeting
quality and functions that surpass those of its predecessors.
For design of the new series, we selected Motomi Kawakami, a prestigious industrial designer who has a reputation forbeautiful, easy-to-use and refined designs. We have lined up seven models in the new series, each giving a different
impression, realized by combining forms, colors and materials in the frames and headboards.

INTIME website:
http://www.in-time.jp
Customer consultation desk:
0120-03-3648 (toll free in Japan)

In terms of function, in addition to wireless remote-control systems, there is “KIND Motion,”
which is used in our medical beds, and is fitted as standard equipment on the new models.
The length of the new models extends about 10cm longer than that of existing models in
consideration of user-friendliness when users’ backs are raised.

Newly released products

Aluminum/headboard: White

Square Wood/headboard: Black

Curved Wood/headboard: Yellow

Curved Wood/headboard: Red

Day bedThis is a bed for living rooms,
which enables users to enjoy
siestas*, a new type of affluence.
It is equipped with a reclining
function to raise and lower the backs
and knees using a hand switch.

INTIME pillow
This is an original INTIME pillow.
With its original two-layer
structure, it gives users a natural
posture during sleep and helps
them turn over easily. Bed pads,
quilts and linen are also available.

Side table
This is a side table with casters,on which books, cups and remotecontrol units can be placed.
Users can choose the tabletop
color from five colors to match thedesign of the bed.

Major INTIME products
Mattresses
In addition to the “Style Port”
custom-made mattress, which canbe made to match the physique ofeach person, we also offer the“S series.”*Siesta (from Spanish):A short break or nap taken after lunch.

9

Six-year Summary
Paramount Bed Co., Ltd. and Subsidiaries — Years ended March 31

2007

2006

For the year:
Net sales

2005

2004

2003

2002

Millions of yen¥ 35,928¥ 51,011¥ 50,616¥ 47,895¥ 45,774¥ 45,153

Cost of sales

23,54031,63030,232

28,251

27,57427,304Gross profit

12,38819,381

20,384

19,644

18,20017,849Selling, general and administrative expenses

11,547

13,05012,752

12,541

12,30913,063Operating income

841

6,331

7,632

7,103

5,891

4,786

Net (loss) income(2,033)

3,782

5,140

4,182

3,127

2,498

Net cash (used in) provided by operating activities(1,354)

5,069

4,556

7,138

6,194

4,076

Net cash used in investing activities(1,997)(6,057)(3,253)(423)(1,615)(3,948)Net cash used in financing activities(1,525)(4,588)(1,134)(758)(1,198)(1,040)Cash and cash equivalents, end of year

10,426

15,247

20,79020,622

14,661

11,267

Research and development costs

1,032

1,004

898

950

1,075

983

Total assets

76,47884,315

83,161

81,17074,331

72,822

Total equity

65,51070,016

69,90066,16061,14859,442

At year-end:

Per share data:
Basic net (loss) income
Diluted net income
Total equity

Yen(66.83)120.61

162.38131.87

98.29

78.86

—

120.59162.33———2,150.22

2,300.19

2,224.17

2,105.03

1,945.48

1,882.47%

Value indicators:
Return on equity (*1)

(3.00)

5.41

7.56

6.57

5.19

4.26

Return on assets (*2)

(2.53)

4.52

6.26

5.38

4.25

3.45

Equity ratio

85.53

83.04

84.05

81.51

82.26

81.63

*1) Return on equity (ROE): Net income / Average total equity*2) Return on assets (ROA): Net income / Average total assets

10Business Review in Fiscal 2007
Year ended March 31, 2007

Overview of Financial Results
The Japanese economy recovered in the fiscal year
ended March 2007, primarily because of the robustness
in the corporate sector and continued improvement in
the employment situation, although consumption was
weak as indicated by a slowdown and leveling off ofconsumer spending from the middle of the year.
The fiscal year under review saw rapid changes in thehealthcare industry. The revision of medical service fees
implemented in April 2006 had a more extensive
influence than before on medical institutions, and among
other things it accelerated the shortage of nurses. In
addition, laws related to medical system reforms,
including a great reduction in the number of long-termcare beds, were enacted.
In the sector of welfare for the elderly, the market dwindled
at a stroke, since a revision of the nursing-care insurance
law meant nursing-care bed rental services for persons
requiring mild nursing care at home were excluded frominsurance payments. However, there was criticism of thisrevision, and the Ministry of Health, Labor and Welfare
decided to ease the limit on using of nursing-care beds
rental for persons requiring mild nursing care at home,from April 2007 if certain requirements are satisfied,based on a survey of actual conditions.
In this business environment, the Company groupincreased its capital investment and focused on
research and development activities in order to bolster
earnings.
As for major capital investments, the Company built
information security systems and a new logistics system,
as well as renewed incidental facilities to the head officebuilding, and fully renovated the head office showroom.
With respect to the development and sales of products,
the Company released the “Ever Fit Mattress R Type,”
which makes it possible to quickly transport patients inan emergency, keeping them lying down; and the beds
for newborn infants with our original design. Also, wedeveloped a multi-function electric bed, which we plan
to produce at our Chinese plant, and a new-type swing
arm assistive bar. We fully remodeled the “Aura Electric
Beds” for persons who require mild nursing care. The

11

Company selected industrial designer Mr. Motomi
Kawakami to fully remodel the products in our “INTIME”
brand, the first time we had remodeled this brand, andreleased the electric adjustable beds, “INTIME7000
Series.”As for our overseas operations, the Company put Corona
Medical S.A.S., a wholly owned subsidiary of Corbon
Holding S.A.S. of France, under its umbrella by acquiring
shares held by its holding company. We position Corona
Medical S.A.S., the second largest manufacturer of
medical and nursing-care beds in France, as a strategic
subsidiary for making inroads into the European market.
In the fiscal year under review, looking at the sales bytype of user, consolidated sales related to nursing-carefacilities dropped by 19.7% year-on-year, because many
medical facilities refrained from making capital
investments, with a watchful eye on the future directionof institutional reform, while sales of home-care products
decreased by 51.2% year-on-year, directly hit by therevisions of the nursing-care insurance system.
Sales by major product category for the fiscal year underreview were as follows:%

Millions of yen

2007
Beds

¥

18,676

2006¥

Year-on-year Change

30,164(38.1)

Mattresses

2,943

4,390

(33.0)

Hospital-use furniture

2,814

3,884

(27.6)

Medical-use products

2,170

3,017

(28.1)

Other

9,325

9,556

(2.4)

51,011(29.6)

Total¥

35,928¥As a result, consolidated net sales for the fiscal year
under review fell by 29.6%, or ¥15,083 million, year-onyear to ¥35,928 million.
Operating income dropped by 86.7% year-on-year to¥841 million, primarily because of a sharp decline insales despite our efforts to reduce expenses as a whole.
We suffered our first net loss, amounting to ¥2,033 million,
since the listing of our stock, chiefly because we posted
approximately ¥3,900 million in premium severance

payment for voluntary retirees and about ¥800 million in
impairment losses for the Ohira Plant and others,
although financial income grew considerably year-on-year.
The Company decided to review our cost structure in
response to rapid changes in the business environment,
and implemented the following measures in the fiscal
year under review, in addition to the soliciting ofvoluntary retirement: (1) reducing the monthly
remunerations for directors and salaries for managers;(2) overall reviewing of our expenses, including thediscontinuation of TV commercials; and (3) plans forconsolidating and reorganizing of our domestic plants.

Issues to Be Addressed and Outlook for
the Next Term
In the healthcare industry, moves to realign the hospital
bed systems will likely intensify, including the planned
formulation of a “regional care improvement plan” byeach prefecture as part of measures to accept long-termcare beds, whose number will be drastically reduced by
the end of fiscal 2012. In the sector of welfare for theelderly, new moves are expected in the market subject
to the nursing-care insurance program, since the limit on
using of nursing-care beds rental for persons requiring
mild nursing care at home was partially eased in April,while the market of welfare equipment, not covered by
the insurance, is also expected to expand.

Cash Flows
Cash and cash equivalent (hereinafter referred to as“cash”) at the end of the fiscal year under review totaled¥10,426 million, down ¥4,821 million from the end of theprevious fiscal year. Each cash flow and their causes in
the fiscal year under review are as follows:(Cash flows from operating activities)
Net cash used in operating activities amounted to ¥1,354
million in the fiscal year under review. A breakdown ofoutflow shows loss before income taxes and minority
interests of ¥2,359 million, a decrease in notes andaccounts payable of ¥1,465 million and a payment ofincome taxes amounting to ¥1,773 million. Meanwhile,contributors to cash inflow were depreciation andamortization of ¥1,822 million, a decrease in inventoriesof ¥1,004 million and a decrease in notes and accounts
receivable of ¥2,809 million.
(Cash flows from investing activities)
Net cash used in investing activities was ¥1,997 million.
This was chiefly attributable to acquisition costs ofmarketable and investment securities and acquisition
costs of property, plant and equipment, which totaled¥7,797 million and ¥1,955 million, respectively, as wellas proceeds from sales of marketable and investment
securities, which amounted to ¥7,129 million.

In this business environment, the Company will aim toraise earnings in the healthcare sector by focusing on:(1) enhancing sales capability in the so-called high care(advanced intensive care) field; (2) making
comprehensive proposals on renovation and products toimprove sickroom environments; and (3) offering a
bedside service to provide information to patients via TV
screens. In the sector of welfare for the elderly, theCompany will strive to expand sales to residence
facilities of the elderly, including rental houses
exclusively for the elderly, and closely watch market
changes in the home nursing care field.
In overseas operations, earnings of the consolidated
subsidiary in France will start to make full contributions
from the next fiscal year. We will do our utmost to
expand sales of the French company’s products toTurkey, Egypt and other Mediterranean countries, where
we have a scant sales track record.
For our domestic production system, the Company willconsolidate the existing three plants into two and reformthe production structure over the next year.

(Cash flows from financing activities)
Net cash used in financing activities was ¥1,525 million,
owing primarily to the payment of cash dividends of¥1,521 million.

12

Consolidated Balance Sheets
Paramount Bed Co., Ltd. and Subsidiaries — March 31, 2007 and 2006

Thousands of U.S. dollars(Note 1)Millions of yen

2007

ASSETS

CURRENT ASSETS:
Cash and cash equivalents
Marketable securities (Note 4)
Notes and accounts receivable:
Trade notes
Trade accounts
Other
Allowance for doubtful accounts
Inventories (Note 5)
Deferred tax assets (Note 11)
Prepaid expenses and other current assets¥¥

15,247
4,501

2007

$

88,31949,572

3,383
11,147
704
(6)
4,726
355
258

5,052
11,542
23
(7)
5,346
611
164

28,65894,426
5,963(51)
40,034
3,007
2,186

36,84542,479312,114

PROPERTY, PLANT AND EQUIPMENT (Note 6):
Land (Note 7)
Buildings and structures (Note 7)
Machinery and equipment
Construction in progress
Total
Accumulated depreciation

8,084
24,177
13,816
6
46,083(24,334)

8,403
23,722
14,436
95
46,656(23,903)

68,479204,803
117,03551
390,368(206,133)

Net property, plant and equipment

21,74922,753

184,235

INVESTMENTS AND OTHER ASSETS:
Investment securities (Note 4)
Goodwill (Note 3)
Life insurance premium
Deferred tax assets (Note 11)
Other assets

11,218
903
1,239
746
3,778

14,825
1,228
3
3,027

95,028
7,649
10,496
6,319
32,003

Total investments and other assets

17,88419,083

151,495

84,315$ 647,844

Total current assets

TOTAL
See notes to consolidated financial statements.

13

10,426
5,852

2006

¥

76,478¥

Thousands of U.S. dollars(Note 1)Millions of yen

2007

LIABILITIES AND EQUITYCURRENT LIABILITIES:
Notes and accounts payable:
Trade accounts
Other (Note 7)
Income taxes payable (Note 11)
Accrued expenses
Other current liabilities¥

Total current liabilities
LONG-TERM LIABILITIES:
Liability for employees’ retirement benefits (Note 8)
Deferred tax liabilities (Note 11)
Other long-term liabilities (Note 7)
Total long-term liabilities

5,764
1,515
35
1,025
660

2006

¥

6,372
1,639
1,741
1,308
512

2007

$

48,827
12,833
296
8,683
5,591

8,999

11,572

76,230

987

8,361

982

1,280
551
769

1,969

2,600

16,679MINORITY INTERESTS

8,318

127

COMMITMENTS AND CONTINGENT LIABILITIES(Notes 12, 13 and 15)
EQUITY (Notes 9 and 19):
Common stock — authorized, 126,000,000 shares;
issued, 31,682,526 shares
Capital surplus
Retained earnings
Unrealized gain on available-for-sale securities
Foreign currency translation adjustments
Treasury stock — at cost, 1,262,507 shares in 2007 and
1,260,653 shares in 2006
Total
Minority interests
Total equity
TOTAL

¥

6,591
7,277
53,784
1,130
161

6,591
7,277
57,3782,168
132

55,832
61,643455,604
9,572
1,364

(3,534)65,409101(3,530)70,016(29,936)
554,079856

65,51070,016554,935

84,315$ 647,844

76,478¥14

Consolidated Statements of Operations
Paramount Bed Co., Ltd. and Subsidiaries — Years Ended March 31, 2007 and 2006

Thousands of U.S. dollars(Note 1)Millions of yen

2007
NET SALES¥

2006

35,928¥

2007

51,011$COST OF SALES

23,54031,630199,407

Gross profit

12,38819,381

104,939

11,547

13,05097,815

841

6,331

7,124

221
228
1,561
145
(18)
(3,829)
(310)
(797)
(401)

162
47
77
6

(36)

1,872
1,931
13,223
1,228(152)(32,435)(2,626)(6,751)(3,397)(3,200)213(27,107)(2,359)6,544(19,983)

INCOME TAXES (Note 11):
Current
Deferred

61
(349)

3,213
(385)

517
(2,957)

Total income taxes

(288)

2,828

(2,440)

38

66

322

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (Note 14)
Operating income
OTHER INCOME (EXPENSES):Interest and dividend income
Foreign exchange gain
Gain on investments in partnerships and in anonymous association
Gain on sales of investment securities (Note 4)
Loss on sales of investment securities (Note 4)
Early retirement payments (Note 8)
Loss on disposal of property, plant and equipment
Loss on impairment of long-lived assets (Note 6)
Other — net
Other (expenses) income — net(LOSS) INCOME BEFORE INCOME TAXES AND MINORITY INTERESTSMINORITY INTERESTS IN NET LOSS
NET (LOSS) INCOME

¥

(43)

(2,033)

¥

3,782

$

Yen

PER SHARE OF COMMON STOCK (Notes 2.q and 17):
Basic net (loss) income
Diluted net income
Cash dividends applicable to the year
Diluted net income per share for 2007 is not calculated due to the net loss.
See notes to consolidated financial statements.

15

304,346¥(66.83)50.00(17,221)

U.S. dollars¥

120.61120.5950.00$(0.57)
0.42

Consolidated Statements of Changes in Equity
Paramount Bed Co., Ltd. and Subsidiaries — Years Ended March 31, 2007 and 2006

Thousands
Outstanding
Number of
Shares ofCommonCommon Stock
Stock

BALANCE, APRIL 1, 2005
Net income
Cash dividends, ¥57 per share
Bonuses to directors
Purchase of treasury stock
Disposal of treasury stock
Net increase in unrealized gain
on available-for-sale securities
Net increase in foreign currencytranslation adjustments
BALANCE, MARCH 31, 2006
Reclassified balance as ofMarch 31, 2006 (Note 2.j)
Net loss
Cash dividends, ¥50 per share
Bonuses to directors
Purchase of treasury stock
Net decrease in unrealized gain
on available-for-sale securities
Net increase in foreign currencytranslation adjustments
Other — net
BALANCE, MARCH 31, 2007

BALANCE, MARCH 31, 2006

31,409¥ 6,591¥ 7,277 ¥ 55,426¥ 1,402¥ (65) ¥

(988)
1

3,782
(1,790)(40)(2,801)
2

766

766

197

197

(3,530)70,01670,016(4)(2,033)(1,521)
(40)
(4)

127
(2,033)(1,521)(40)(4)(1,038)(1,038)197
7,277

57,378

2,168

132

¥ 127
(2,033)(1,521)(40)(2)(1,038)

29

29

(26)
30,420¥ 6,591¥ 7,277 ¥ 53,784¥ 1,130¥ 161 ¥ (3,534) ¥ 65,409

Thousands of U.S. dollars (Note 1)
Unrealized
Foreign
Gain onCurrency
Retained Available-for- Translation Treasury
Earnings sale Securities Adjustments
Stock

CommonStockCapitalSurplus$55,832$61,643 $486,048$18,365

Total

Minority
Interests

(34)

246

(17,221)(12,884)
(339)
(34)

1,076
(17,221)(12,884)
(339)
(34)

(8,793)(8,793)246(220)$55,832$61,643 $455,604$ 9,572

Total
Equity$593,104$1,076(17,221)(12,884)
(339)

29
(26)

¥ 101 ¥ 65,510$1,118 $(29,902) $593,104(8,793)Total
Equity3,782(1,790)(40)(2,801)2(2,801)
2

6,591

Minority
Interests¥ 69,900

766

30,422

Total(731) ¥ 69,900

3,782(1,790)(40)

Reclassified balance as ofMarch 31, 2006 (Note 2.j)
Net loss
Cash dividends, $0.42 per share
Bonuses to directors
Purchase of treasury stock
Net decrease in unrealized gain
on available-for-sale securities
Net increase in foreign currencytranslation adjustments
Other — net
BALANCE, MARCH 31, 2007

CapitalSurplusMillions of yen
Unrealized
Foreign
Gain onCurrency
Retained Available-for- Translation Treasury
Earnings sale Securities Adjustments
Stock$1,364 $(29,936) $554,079

246
(220)

$ 856 $554,935

See notes to consolidated financial statements.

16

Consolidated Statements of Cash Flows
Paramount Bed Co., Ltd. and Subsidiaries — Years Ended March 31, 2007 and 2006

Thousands of U.S.dollars(Note 1)Millions of yen

2007
OPERATING ACTIVITIES:(Loss) income before income taxes and minority interests
Adjustments for:
Income taxes — paid
Depreciation and amortization
Loss on impairment of long-lived assets
Gain on investments in partnerships and in anonymous association
Gain on sales of investment securities
Changes in operating assets and liabilities:
Decrease in notes and accounts receivable
Decrease (increase) in inventories
Increase in prepaid expenses and other current assets
Decrease in notes and accounts payable
Decrease in accrued expenses and other current liabilities
Other — net¥(2,359)

¥

2007

6,544

$

(19,983)(1,773)
1,822
797(1,561)(145)(3,199)
1,768
(77)
(6)

(15,019)
15,434
6,751(13,223)(1,228)

2,809
1,004
(29)
(1,465)
(388)
(66)

1,002
(827)
(68)
(616)
(24)
572

23,795
8,505(246)(12,410)(3,287)(559)(1,354)

5,069(11,470)(2,321)4,000(1,955)(5,476)3,129(3,801)
3,360(2,524)(5,573)
1,953(19,661)
33,884(16,561)(46,387)
26,506

(954)
1,580

528

(8,081)
13,384(1,997)(6,057)(16,916)

(4)

(34)

(1,521)(2,801)2(1,789)(12,884)(1,525)(4,588)(12,918)

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS

55

33

466

NET DECREASE IN CASH AND CASH EQUIVALENTS(4,821)(5,543)(40,838)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

15,247

20,790129,157

Net cash (used in) provided by operating activities
INVESTING ACTIVITIES:
Purchases of marketable securities
Proceeds from sales of marketable securities
Purchases of property, plant and equipment
Purchases of investment securities
Proceeds from sales of investment securities
Payment for purchase of consolidated subsidiaries,
net of cash acquired (Note18)
Decrease in other assets
Net cash used in investing activities
FINANCING ACTIVITIES:
Purchases of treasury stock
Disposal of treasury stock
Cash dividends paid
Net cash used in financing activities

CASH AND CASH EQUIVALENTS, END OF YEAR
See notes to consolidated financial statements.

17

2006

¥

10,426¥

15,247$88,319

Notes to Consolidated Financial Statements
Paramount Bed Co., Ltd. and Subsidiaries — Years Ended March 31, 2007 and 2006

1. BASIS OF PRESENTING CONSOLIDATED FINANCIAL
STATEMENTS
The accompanying consolidated financial statements have been prepared inaccordance with the provisions set forth in the Japanese Securities andExchange Law and its related accounting regulations, and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”),
which are different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards.
On December 27, 2005, the Accounting Standards Board of Japan (“ASBJ”)
published a new accounting standard for the statement of changes in equity,which is effective for fiscal years ending on or after May 1, 2006.
The consolidated statement of shareholders’ equity, which was previously
voluntarily prepared in line with the international accounting practices, is now
required under Japanese GAAP and has been renamed “the consolidated
statement of changes in equity” in the current fiscal year.
In preparing these consolidated financial statements, certain reclassifications
and rearrangements have been made to the consolidated financial
statements issued domestically in order to present them in a form which ismore familiar to readers outside Japan. In addition, certain reclassifications
have been made in the 2006 consolidated financial statements to conform tothe classifications used in 2007.
The consolidated financial statements are stated in Japanese yen, thecurrency of the country in which Paramount Bed Co., Ltd. (the “Company”) is
incorporated and operates. The translations of Japanese yen amounts into
U.S. dollar amounts are included solely for the convenience of readers
outside Japan and have been made at the rate of ¥118.05 to $1, the rate ofexchange at March 31, 2007. Such translations should not be construed as
representations that the Japanese yen amounts could be converted into U.S.
dollars at that or any other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation — The consolidated financial statements as of March 31,
2007 include the accounts of the Company and all its seven (three in 2006)
subsidiaries (together, the “Group”). The excess of the cost of an acquisition
over the fair value of the net assets of the acquired subsidiary at the date ofacquisition is being amortized over a period of 5 years. All significant
intercompany balances and transactions have been eliminated inconsolidation. All material unrealized profit included in assets resulting fromtransactions within the Group is eliminated.
b. Business Combination — In October 2003, the Business Accounting
Council (the “BAC”) issued a Statement of Opinion, “Accounting for Business
Combinations,” and on December 27, 2005, the ASBJ issued ASBJ
Statement No.7, “Accounting Standard for Business Separations” and ASBJ
Guidance No.10, “Guidance for Accounting Standard for Business
Combinations and Business Separations.” These new accounting
pronouncements were effective for fiscal years beginning on or after April 1,
2006.
The accounting standard for business combinations allows companies toapply the pooling of interests method of accounting only when certain
specific criteria are met such that the business combination is essentiallyregarded as a uniting-of-interests.
For business combinations that do not meet the uniting-of-interests criteria,
the business combination is considered to be an acquisition and thepurchase method of accounting is required. This standard also prescribes theaccounting for combinations of entities under common control and for joint
ventures.
The Company acquired 91% of the net assets of Corbon Holding S.A.S. on
December 11, 2006 and accounted for it by the purchase method of
accounting. The related goodwill is systematically amortized over 5 years.
c. Cash Equivalents — Cash equivalents are short-term investments that arereadily convertible into cash and that are exposed to insignificant risk ofchanges in value. Cash equivalents include time deposits, commercial paper
and mutual funds investing in bonds, all of which mature or become due
within three months of the date of acquisition.
d. Inventories — Inventories are stated at cost determined principally by theaverage cost method except for supplies, which are stated by the mostrecent purchase price method.
e. Marketable and Investment Securities — Marketable and investment
securities are classified and accounted for, depending on management’s
intent, as follows: (1) held-to-maturity debt securities, which are expected tobe held to maturity with the positive intent and ability to hold to maturity arereported at amortized cost and (2) available-for-sale securities, which are notclassified as the aforementioned securities, are reported at fair value, withunrealized gains and losses, net of applicable taxes, reported in a separate
component of equity.
Non-marketable available-for-sale securities are stated at cost determined by
the moving-average method. The cost of securities sold is determined basedon the moving-average method. For other than temporary declines in fairvalue, investment securities are reduced to net realizable value by a charge
to income.
f. Property, Plant and Equipment — Property, plant and equipment arestated at cost. Depreciation of property, plant and equipment of theCompany and its consolidated domestic subsidiary is computed by the
declining-balance method, while the straight-line method is applied to thebuildings of the Company and its consolidated domestic subsidiary acquired
after April 1, 1998 and is principally applied to the property, plant andequipment of consolidated foreign subsidiaries. The range of useful lives isprincipally from 3 to 50 years for buildings and structures and from 2 to 20
years for machinery and equipment.
g. Long-lived Assets — In August 2002, the BAC issued a Statement of
Opinion, “Accounting for Impairment of Fixed Assets,” and in October 2003
the ASBJ issued ASBJ Guidance No. 6, “Guidance for Accounting Standard
for Impairment of Fixed Assets.” These new pronouncements were effective
for fiscal years beginning on or after April 1, 2005 with early adoption
permitted for fiscal years ending on or after March 31, 2004. The Group
adopted the new accounting standard for impairment of fixed assets as ofApril 1, 2005.
The Group reviews its long-lived assets for impairment whenever events orchanges in circumstances indicate the carrying amount of an asset or asset
group may not be recoverable. An impairment loss would be recognized if
the carrying amount of an asset or asset group exceeds the sum of theundiscounted future cash flows expected to result from the continued use andeventual disposition of the asset or asset group. The impairment loss would
be measured as the amount by which the carrying amount of the asset
exceeds its recoverable amount, which is the higher of the discounted cash
flows from the continued use and eventual disposition of the asset or the net
selling price at disposition.
h. Retirement and Pension Plans — The Company has an unfunded
severance indemnity plan partially supplemented by a defined contribution
pension plan and a welfare annuity plan. Two of the consolidated foreignsubsidiaries adopt a national welfare pension system of their countries where
those subsidiaries are located.
The Group accounts for liability for retirement benefits based on the projected
benefit obligations and plan assets at the balance sheet date.
i. Stock Option — On December 27, 2005, the ASBJ issued ASBJ Statement
No.8, “Accounting Standard for Stock Options” and related guidance. The
new standard and guidance are applicable to stock options newly granted on
and after May 1, 2006.
This standard requires companies to recognize compensation expense for
employee stock options based on the fair value at the date of grant and overthe vesting period as consideration for receiving goods or services. The
standard also requires companies to account for stock options granted to
non-employees based on the fair value of either the stock option or the goods
or services received. In the balance sheet, the stock option is presented as astock acquisition right as a separate component of equity until exercised. The
standard covers equity-settled, share-based payment transactions, but does
not cover cash-settled, share-based payment transactions. In addition, thestandard allows unlisted companies to measure options at their intrinsic value
if they cannot reliably estimate fair value.
The Group applied the new accounting standard for stock options to those
granted on and after May 1, 2006. There was no effect of adoption of the new
accounting standard for stock options.
j. Presentation of Equity — On December 9, 2005, the ASBJ published a
new accounting standard for presentation of equity. Under this accounting
standard, certain items which were previously presented as liabilities are now
presented as components of equity. Such items include stock acquisitionrights, minority interests, and any deferred gain or loss on derivatives
accounted for under hedge accounting. This standard is effective for fiscal
years ending on or after May 1, 2006. The consolidated balance sheet as ofMarch 31, 2007 is presented in line with this new accounting standard.
k. Research and Development Costs — Research and development costs
are charged to income as incurred.

18

l. Leases — All leases are accounted for as operating leases. Under
Japanese accounting standards for leases, finance leases that deem totransfer ownership of the leased property to the lessee are to be capitalized,
while other finance leases are permitted to be accounted for as operatinglease transactions if certain “as if capitalized” information is disclosed in thenotes to the lessee’s financial statements.
m. Income Taxes — The provision for income taxes is computed based on
the pretax income included in the consolidated statements of operations. The
asset and liability approach is used to recognize deferred tax assets andliabilities for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted tax laws to thetemporary differences.
n. Appropriations of Retained Earnings — Appropriations of retained
earnings at each year end are reflected in the consolidated financial
statements for the following year upon shareholders’ approval.
o. Foreign Currency Transactions and Financial Statements —All short-term and long-term receivables and payables denominated inforeign currencies are translated into Japanese yen at the exchange rates at
each balance sheet date. The foreign exchange gains and losses fromtranslation are recognized in the consolidated statements of operations to theextent that derivatives for foreign currency transactions do not qualify forhedge accounting.
The balance sheet accounts of the consolidated foreign subsidiaries aretranslated into Japanese yen at the current exchange rate as of the balance
sheet date except for equity, which is translated at the historical rate.
Differences arising from such translation are shown as “Foreign currencytranslation adjustments” in a separate component of equity.
Revenue and expense accounts of the consolidated foreign subsidiaries aretranslated into Japanese yen at the current exchange rate as of the balance
sheet date.
p. Derivatives and Hedging Activities — The Group uses derivative
financial instruments, such as foreign exchange forward contracts(“derivatives”) to manage their exposures to fluctuations in foreign exchange
rates. The Group does not enter into derivatives for trading or speculative
purposes.
All derivatives are recognized as either assets or liabilities and measured atfair value with gains or losses recognized in the consolidated statements ofoperations. If derivatives used for hedging purposes qualify for hedge
accounting because of high correlation and effectiveness between thehedging instruments and the hedged items, gains or losses on derivatives aredeferred until maturity of the hedged transactions.
The foreign exchange forward contracts, which qualify for hedge accounting
employed to hedge foreign exchange exposures for import purchases, aretranslated at the foreign exchange rate stipulated in the contract.
q. Per Share Information — Basic net income per share is computed by
dividing net income available to common shareholders by the weightedaverage number of common shares outstanding for the period.
Diluted net income per share reflects the potential dilution that could occur if
treasury stock were issued by stock option plan.

other finance leases are permitted to be accounted for as operating leasetransactions if certain “as if capitalized” information is disclosed in the note to
the lessee’s financial statements.
The revised accounting standard requires that all finance leasetransactions should be capitalized. The revised accounting standard forlease transactions is effective for fiscal years beginning on or after April 1,2008 with early adoption permitted for fiscal years beginning on or after
April 1, 2007.
Unification of Accounting Policies Applied to Foreign Subsidiaries for
the Consolidated Financial Statements — Under Japanese GAAP, acompany currently can use the financial statements of foreign subsidiaries
which are prepared in accordance with generally accepted accounting
principles in their respective jurisdictions for its consolidation processunless they are clearly unreasonable. On May 17, 2006, the ASBJ issued
ASBJ Practical Issues Task Force (PITF) No.18, “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries for theConsolidated Financial Statements.” The new task force prescribes: (1) the
accounting policies and procedures applied to a parent company and its
subsidiaries for similar transactions and events under similar
circumstances should in principle be unified for the preparation of theconsolidated financial statements, (2) financial statements prepared byforeign subsidiaries in accordance with either International Financial
Reporting Standards or the generally accepted accounting principles in
the United States tentatively may be used for the consolidation process,(3) however, the following items should be adjusted in the consolidation
process so that net income is accounted for in accordance with Japanese
GAAP unless they are not material;(1) Amortization of goodwill(2) Actuarial gains and losses of defined benefit plans recognized outside
profit or loss
(3) Capitalization of intangible assets arising from development phases(4) Fair value measurement of investment properties, and the revaluation
model for property, plant and equipment, and intangible assets(5) Retrospective application when accounting policies are changed(6) Accounting for net income attributable to a minority interest
The new task force is effective for fiscal years beginning on or after April 1,2008 with early adoption permitted.

3. BUSINESS COMBINATIONOn December 11, 2006, the Company acquired 91% of the net assets ofCorbon Holding S.A.S. This acquisition was made to accelerate expansion of
global commercial activities and to position as the key center for entering
European market. The results of operations for Corbon Holding S.A.S. are notincluded in the Company’s consolidated statements of operations.
The Company accounted for this business combination by the purchasemethod of accounting. The acquisition cost was ¥964 million ($8,166
thousand) in cash in accordance with the Contract of Assignment dated
December 11, 2006.
The total cost of acquisition has been allocated to the assets acquired andthe liabilities assumed based on their respective fair values. Goodwill
recorded in connection with the acquisition totaled ¥903 million ($7,649
thousand).
The estimated fair values of the assets acquired and the liabilities assumed at
the acquisition date are as follows:
Millions of yen

Cash dividends per share presented in the accompanying consolidated
statements of operations are dividends applicable to the respective years
including dividends to be paid after the end of the year.
r. New Accounting Pronouncements
Measurement of Inventories — Under Japanese GAAP, inventories are
currently measured either by the cost method, or at the lower of cost or
market. On July 5, 2006, the ASBJ issued ASBJ Statement No.9,“Accounting Standard for Measurement of Inventories,” which is effective
for fiscal years beginning on or after April 1, 2008 with early adoption
permitted. This standard requires that inventories held for sale in theordinary course of business be measured at the lower of cost or net selling
value, which is defined as the selling price less additional estimatedmanufacturing costs and estimated direct selling expenses. The
replacement cost may be used in place of the net selling value, if
appropriate. The standard also requires that inventories held for trading
purposes be measured at the market price.
Lease Accounting — On March 30, 2007, the ASBJ issued ASBJ Statement
No.13, “Accounting Standard for Lease Transactions,” which revised theexisting accounting standard for lease transactions issued on June 17, 1993.

Current assets
Property, plant and equipment
Other assets
Total assets acquired
Total liabilities assumed
Net assets acquired

¥

1,659
301
13
1,973
1,906
¥
67

Thousands of
U.S. dollars$ 14,053
2,550
110
16,713
16,145$568

If this business acquisition had been completed as of April 1, 2006, thebeginning of the current fiscal year, the unaudited condensed pro forma
consolidated statements of operations for the year ended March 31, 2007
would be as follows:
Millions of yen

Sales
Operating income
Net loss

Thousands of
U.S. dollars¥ 40,116 $ 339,822
849
7,192
(2,152)(18,230)

4. MARKETABLE AND INVESTMENT SECURITIESUnder the existing accounting standard, finance leases that deem to transfer
ownership of the leased property to the lessee are to be capitalized, however,

19

Marketable and investment securities as of March 31, 2007 and 2006 wereconsisted of the following:Thousands of
U.S. dollars

Millions of yen

Current:
Government and corporate bonds
Trust fund investments
Total
Non-current:
Marketable equity securities
Government and corporate bonds
Trust fund investments and others
Non-marketable equity securities
Total

2007

2006

2007

¥ 3,852
2,000¥ 1,001
3,500$ 32,630
16,942¥ 5,852¥ 4,501$ 49,572¥ 1,958
3,613
4,959
688

¥ 2,466
4,610
7,060
689

$ 16,586
30,60642,008
5,828¥ 11,218¥ 14,825$ 95,028

The carrying amounts and aggregate fair values of marketable andinvestment securities at March 31, 2007 and 2006 were as follows:
Millions of yen
March 31, 2007

Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Others
Held-to-maturity

Cost

¥

Fair
Value

Unrealized Unrealized
Gains
Losses381 ¥ 1,589 ¥
5,877
15
6,617
361
1,600
8

12 ¥
28
19
26

1,958
5,864
6,959
1,582

5. INVENTORIESInventories at March 31, 2007 and 2006 consisted of the following:

2007

2006

2007

Merchandise
Finished products
Work in process
Raw materials and supplies

¥

¥

255
3,949
167
975

$ 2,279
27,497
1,508
8,750

Total

¥ 4,726¥ 5,346$ 40,034

269
3,246
178
1,033

6. LONG-LIVED ASSETSThe Company recognized impairment losses of fixed assets in the aggregateof ¥797 million ($6,751 thousand) for the year ended March 31, 2007. The
breakdown of the impairment losses is ¥278 million ($2,355 thousand) for the
Takamatsu Branch and ¥519 million ($4,396 thousand) for the Ohira Plant.
With a decline of 50% or more in land price, the Takamatsu Branch had
shown signs of impairment loss. Since we expect the plant to continue tohave insufficient cash flows in the future because of a sharp drop in sales
during fiscal 2007, we reduced its book value to the recoverable value andrecorded the said decrease as an impairment loss under “Other expenses.”
We believe that the ongoing restructuring of the Ohira Plant, including
reduction of its scale and partial transfer of machinery and equipment to the
Chiba Plant, comes under an impairment loss. Therefore, we reduced its bookvalue to the recoverable value and recorded the said decrease as an
impairment loss under “Other expenses.”

7. SHORT-TERM BANK LOANS AND LONG-TERM DEBT
Short-term borrowings at March 31, 2007 comprise the following:

Millions of yen
March 31, 2006

Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Others
Held-to-maturity

Unrealized Unrealized
Gains
Losses

Cost

Fair
Value

Bank loans — Weighted-average interest rate 5.2% at
March 31, 2007¥

381 ¥ 2,092 ¥
4,773
3
8,928
1,679
900
10

7 ¥ 2,466
65
4,711
47 10,560
13
897

Thousands of U.S. dollars
March 31, 2007

Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Others
Held-to-maturity

Unrealized Unrealized
Gains
LossesCost$ 3,227 $ 13,460 $
49,784
127
56,053
3,058
13,553
68

Fair
Value

101 $ 16,586
237 49,674
161 58,950
220 13,401

Available-for-sale securities whose fair value was not readily determinable asof March 31, 2007 and 2006 were as follows:
Carrying AmountThousands of
U.S. dollars

Millions of yen

Available-for-sale — Equity securities

2007

2006

2007

¥

¥

$ 5,828

688

689

Proceeds from sales of available-for-sale securities for the years ended March
31, 2007 and 2006 were ¥5,497 million ($46,565 thousand) and ¥4,980
million, respectively. Gross realized gains and losses on these sales,
computed on the moving average cost basis, were ¥145 million ($1,228
thousand) gains and ¥18 million ($152 thousand) losses for the year ended
March 31, 2007 and ¥6 million gains for the year ended March 31, 2006.
The carrying values of debt securities and others by contractual maturities forsecurities classified as available-for-sale and held-to-maturity at March 31,
2007 were as follows:
Millions of yen

March 31, 2007

Available
for SaleHeld toMaturityThousands of U.S.
dollars
Available
for SaleHeld toMaturity$ 60,627
Due in one year or less
¥ 7,157
Due after one year through five years
21,8302,577
Due after five years through ten years
11,8591,400
Due after ten years
8,454 $ 13,553
998 ¥ 1,600
Total¥ 12,132 ¥ 1,600 $102,770 $ 13,553

Thousands of
U.S. dollars

Millions of yen

Millions of yen

Thousands of
U.S. dollars

2007

2007

¥

$

78

661

Long-term borrowings at March 31, 2007 comprise the following:

Bank loans — Weighted-average interest rate 4.1% at
March 31, 2007
Total
Less current portionLong-term borrowing, less current portion

Millions of yen

Thousands of
U.S. dollars

2007

2007

¥

$

¥

52
52
(27)
25

441
441
(229)
$ 212

Annual maturities of long-term debt as of March 31, 2007 for the next four
years were as follows:
Millions of yen

Year Ending March 31
2008
2009
2010
2011
Total

¥

¥

27
15
6
4
52

Thousands of
U.S. dollars

$

$

229
127
51
34
441

At March 31, 2007, land and buildings of ¥216 million ($1,830 thousand) were
pledged as collateral for short-term bank loans of ¥24 million ($203 thousand).

8. LIABILITY FOR RETIREMENT BENEFITS
Under most circumstances, employees terminating their employment areentitled to certain severance payments based on their average pay during
their employment, years of service and certain other factors.
A portion of the severance payments is made in the form of a lump-sum payment
for the terminating employee, and the rest is annuity payment by a defined
contribution pension plan. Under the plan, employees are entitled to select thedefined contribution pension plan or the prepaid retirement benefit plan.
In addition to the plan above, the Company participates in the Tokyo
Pharmaceutical Welfare Annuity Foundation, which is established as a mutual
pension plan for employees in the same industrial parties. The projected
benefit obligation above does not include that of the foundation. The
Company’s undivided portion of the plan assets amounted to ¥5,104 million($43,236 thousand) as of March 31, 2007.
The Company had solicited employees to apply for a voluntary retirement
program since November 20, 2006, and 145 employees applied for the
program. We paid premium severance of ¥3,829 million ($32,435thousand) tothose voluntary retirees in addition to the payment of lump-sum retirement

20

benefits, specified in the Retirement Benefit Regulations, and recorded it asother expense.
Liabilities for employees’ retirement benefits as of March 31, 2007 and 2006
consisted of the following:Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Projected benefit obligation
Fair value of plan assets
Unrecognized actuarial net loss
Unrecognized prior service cost
Prepaid pension cost

¥ 2,395 ¥ 2,877 $ 20,288
(95)
(805)
(107)
(319)
(2,702)(369)(995)(8,429)(1,123)1
92

Liabilities presented on the
consolidated balance sheets

¥

987

¥

1,280

$ 8,361

The components of net periodic benefit costs for the years ended March 31,
2007 and 2006 were as follows:

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial loss
Amortization of prior service cost
Installment on the welfare annuity
Installment on the defined contribution pension plan
Other

¥

188
58

Net periodic benefit costs¥ 4,624

2006
¥

58
128
231
115
3,846
¥

2007

185 $ 1,593
491
54
(2)
491
57
1,084
128
1,957
229
974
116
32,58014781$ 39,170

Assumptions used for the years ended March 31, 2007 and 2006 were set
forth as follows:

Discount rate
Expected rate of return on plan assets
Recognition period of actuarial gain/loss
Amortization period of prior service costc. Treasury Stock and Treasury Stock Acquisition Rights
The Corporate Law also provides for companies to purchase treasury stockand dispose of such treasury stock by resolution of the Board of Directors.
The amount of treasury stock purchased cannot exceed the amount available
for distribution to the shareholders which is determined by specific formula.
Under the Corporate Law, stock acquisition rights, which were previously
presented as a liability, are now presented as a separate component ofequity. The Corporate Law also provides that companies can purchase bothtreasury stock acquisition rights and treasury stock. Such treasury stockacquisition rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.

10. STOCK OPTION
The stock option outstanding as of March 31, 2007 is as follows:

Thousands of
U.S. dollars

Millions of yen

2007of the common stock. Under the Corporate Law, the total amount ofadditional paid-in capital and legal reserve may be reversed without limitation.
The Corporate Law also provides that common stock, legal reserve,
additional paid-in capital, other capital surplus and retained earnings can betransferred among the accounts under certain conditions upon resolution of
the shareholders.

Number of Options
Stock
Option2002 Stock
Option(The Company)

Persons
GrantedDirectors
Selected employees

GrantedOutstanding

Date of
Grant

230,700

153,700

July 19, 2002 ¥

115

115

2006 Stock
OptionDirector(Corbon Holding S.A.S.)

December11, 2006

Exercise
Price

2,687

¥ 633,888

Exercise
Periodfrom July 1, 2004
to June 29, 2007

from December 11, 2007
to December 10, 2016

The options granted on July 19, 2002 are exercisable over a period of three
years, commencing about two years after the date of grant. The options
granted on December 11, 2006 are exercisable over a period of nine years,
commencing one year after the date of grant. The stock option activity is asfollows:

2007

2006

For the Year Ended March 31, 2007

2.0%—
10 years
10 years

2.0%
1.5%
10 years
10 yearsNon-vested:
March 31, 2006 — outstanding
GrantedForfeited
Transfer to vested
March 31, 2007 — outstanding

2002 Stock
Option(shares)

2006 Stock
Option(shares)

115

115

9. EQUITY
On and after May 1, 2006, Japanese companies are subject to a newcorporate law of Japan (the “Corporate Law”), which reformed and replaced
the Commercial Code of Japan with various revisions that are, for the mostpart, applicable to events or transactions which occur on or after May 1, 2006
and for the fiscal years ending on or after May 1, 2006. The significant
changes in the Corporate Law that affect financial and accounting matters are
summarized below:

Vested:March 31, 2006 — outstanding
GrantedForfeited
Transfer from non-vested
March 31, 2007 — outstandinga. Dividends
Under the Corporate Law, companies can pay dividends at any time during
the fiscal year in addition to the year-end dividend upon resolution at theshareholders meeting. For companies that meet certain criteria such as; (1)having the Board of Directors, (2) having independent auditors, (3) having theBoard of Corporate Auditors, and (4) the term of service of the directors isprescribed as one year rather than two years of normal term by its articles ofincorporation, the Board of Directors may declare dividends (except for
dividends in kind) at any time during the fiscal year if the company hasprescribed so in its articles of incorporation. However, the Company cannot
do so because it does not meet all the above criteria.

Exercise price
Average stock price at exercise
Fair value price at grant date

The Corporate Law permits companies to distribute dividends-in-kind (noncash assets) to shareholders subject to a certain limitation and additional
requirements.
Semiannual interim dividends may also be paid once a year upon resolution
by the Board of Directors if the articles of incorporation of the company sostipulate. The Company has stipulated so in its articles of incorporation. The
Corporate Law provides certain limitations on the amounts available fordividends or the purchase of treasury stock. The limitation is defined as theamount available for distribution to the shareholders, but the amount of net
assets after dividends must be maintained at no less than ¥3 million.

21b. Increases/Decreases and Transfer of Common Stock, Reserve andSurplus
The Corporate Law requires that an amount equal to 10% of dividends must
be appropriated as a legal reserve (a component of retained earnings) or as
additional paid-in capital (a component of capital surplus) depending on theequity account charged upon the payment of such dividends until the total of
aggregate amount of legal reserve and additional paid-in capital equals 25%

213,000(59,400)
153,700¥

2,687 ¥ 633,888

Calculation Method of Estimation for Revaluation of Fair Value per Sharefor Stock Option
Valuation of fair value per share for stock options granted by our consolidated
subsidiary, Corbon Holding S.A.S., on December 11, 2006 is calculated
based on their intrinsic value due to them being an unlisted company. The
intrinsic value per share for stock option at the time of granting is as follows:(1) Valuation of Corbon Holding S.A.S. stock¥ 633,888(Valuation is determined by the price calculated based on DCF(discounted cash flow).)(2) Exercise price of stock option
After calculation, because the exercise price of stock option is the same
as valuation of Corbon Holding S.A.S. stock, the intrinsic value is zero.
Therefore, valuation of fair value per share for stock option is computed to
be zero.
(3) Method of estimating number of stock options vested
Only the actual number of forfeited stock options is reflected because it isdifficult to rationally estimate the actual number of stock options that will
be forfeited in the future.
(4) Total intrinsic value of stock options as of end of the consolidated fiscal year
¥0

11. INCOME TAXESThe Company and its domestic subsidiary are subject to a number of different
taxes based on income, which, in the aggregate, resulted in a normal
effective statutory tax rate of approximately 40.7% for the years ended March
31, 2007 and 2006.
The tax effects of significant temporary differences and tax loss carryforwards
which resulted in deferred tax assets and liabilities at March 31, 2007 and2006 were as follows:
Thousands of
U.S. dollars

Millions of yen

Deferred tax assets:
Accrued bonuses
Enterprise taxes
Payables for directors’ and corporate
auditors’ retirement benefits
Liability for employees’ retirement benefits
Loss on impairment of fixed assets
Tax loss carryforwards
Other
Less valuation allowance

2007

2006

2007

¥

¥

354
143

$ 1,770
68

229
392
323
774
442
(486)

263
519

348
(74)

1,940
3,320
2,736
6,557
3,744
(4,117)

1,891

1,553

16,018209
8Total lease payments included in cost of sales and selling, general andadministrative expenses under finance lease arrangements that do nottransfer ownership of the leased property to the lessee were ¥199 million($1,686 thousand) and ¥76 million for the years ended March 31, 2007 and2006, respectively. Total lease revenues were ¥139 million ($1,177 thousand)and ¥21 million for the years ended March 31, 2007 and 2006, respectively.
(1) The Group as Lessee
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 do not transfer
ownership of the leased property to the lessee on an “as if capitalized” basis
for the years ended March 31, 2007 and 2006 was as follows:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Acquisition cost
Accumulated depreciation¥ 1,316
321

¥

304
130

$ 11,148
2,719

Net leased property

¥

¥

174

$ 8,429

995

Obligations under finance leases:
Thousands of
U.S. dollars

Millions of yen

Deferred tax assets
Deferred tax liabilities:
Unrealized gain on available-for-sale securities
Reserve for advanced depreciation
Other

(755)
(3)
(32)

(1,487)(3)

Deferred tax liabilities(790)(1,490)(6,692)63$ 9,326

Net deferred tax assets¥ 1,101¥(6,396)(25)(271)

A reconciliation between the normal effective statutory tax rates and theactual effective tax rates reflected in the accompanying consolidated
statements of operations for the years ended March 31, 2007 and 2006 is asfollows:

Normal effective statutory tax rate
Lower income tax rates applicable to incomein certain foreign countries
Permanently non-deductible expenses
Change in valuation allowance for deferred tax assets
Unrecognized deferred tax on unrealizedintercompany profit
Other — net
Actual effective tax rate

2007

2006

40.7%

40.7%

(3.1)
(1.3)
(17.4)

2.0
0.7

(6.2)
(0.5)

(0.2)

12.2%

43.2%

2007

2006

2007

Due within one year
Due after one year

¥

251
791

¥

75
132

$ 2,126
6,701

Total

¥ 1,042¥207$ 8,827

Depreciation expense and interest expense under finance leases:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Depreciation expense
Interest expense

¥

195
24

¥

73
4

$ 1,652
203

Total

¥

219

¥

77

$ 1,855

Depreciation expense and interest expense, which were not reflected in theaccompanying consolidated statements of operations, were computed by thestraight-line method and the interest method, respectively.
(2) The Group as Lessor
Pro forma information of leasing property such as acquisition cost,
accumulated depreciation, credits under finance leases, depreciation
expense and interest income of finance leases that do not transfer ownershipof the leasing property to the lessee on an “as if capitalized” basis for theyears ended March 31, 2007 and 2006 was as follows:
Thousands of
U.S. dollars

Millions of yen

At March 31, 2007, the Company and its domestic subsidiary have tax loss
carryforwards aggregating approximately ¥1,882 million ($15,942 thousand)which are available to be offset against taxable income of the Company andits domestic subsidiary in future years. These tax loss carryforwards, if not
utilized, will expire as follows:Year Ending March 31

Millions of yen

2011
2012
2013
2014
Total

¥

23
41
26
1,792
¥ 1,882

Thousands of
U.S. dollars

$

195
347
220
15,180$ 15,942

12. CONTINGENT LIABILITIESAt March 31, 2007, the Group had the following contingent liabilities:
Millions of yen

Guarantees for employees’ housing loans
Recourse obligation for the balance on thetransfers of payables in factoring transactions¥

247

Thousands of
U.S. dollars

$

2007

2006

2007

Acquisition cost
Accumulated depreciation¥ 1,066
158

¥

218
27

$ 9,030
1,338

Net leased property

¥

¥

191

$ 7,692

908

Credits under finance leases:
Thousands of
U.S. dollars

Millions of yen

2007

2006

2007

Due within one year
Due after one year

¥

193
722

¥

42
150

$ 1,635
6,116

Total

¥

915

¥

192

$ 7,751

Depreciation expense and interest income under finance leases:

2,092

Thousands of
U.S. dollars

Millions of yen

1,310

11,097

13. LEASESThe Group, as a lessee, leases certain machinery, computer equipment andother assets. As a lessor, the Group leases certain beds to its customers.

2007

2006

2007

Depreciation expense
Interest income

¥

130
15

¥

20
2

$ 1,101
127

Total

¥

145

¥

22

$ 1,228

22

Depreciation expense and interest income, which are reflected in theaccompanying consolidated statements of operations, were computed by thestraight-line method and the interest method, respectively.

17. NET INCOME PER SHARE
Reconciliation of the differences between basic and diluted net (loss) income
per share (“EPS”) for the years ended March 31, 2007 and 2006 is as follows:

14. RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were ¥1,032 million($8,742 thousand) and ¥1,004 million for the years ended March 31, 2007
and 2006, respectively.

Year Ended March 31, 2007

Basic EPS —Net loss attributable
to common shareholders

15. DERIVATIVESThe Group enters into foreign exchange forward contracts to hedge foreignexchange risk associated with certain liabilities denominated in foreign
currencies.

Year Ended March 31, 2006

Derivatives are subject to market risk and credit risk from potential fluctuations
in foreign exchange rates. The Group does not anticipate any losses arisingfrom credit risk because the counterparties to those derivatives are limited tohighly rated major financial institutions.
Derivative transactions are controlled by the finance department inaccordance with the Group’s internal regulations and are periodicallyreported by the finance manager in regular meetings of the Board of
Directors.
Fair Value of Derivative Financial Instruments
The fair value of the Company’s derivative financial instruments at March 31,
2007 and 2006 is as follows:
Millions of yen

2007
Fair
Value

Unrealized
Gain

¥

862 ¥

18 ¥

18

Millions of yen

2006
Contract
AmountForeign exchange forward contracts —Receivables — Euro

Fair
Value

¥ 1,128 ¥UnrealizedLoss(56) ¥(56)

Thousands of U.S. dollars

2007
Contract
AmountFair
Value

UnrealizedGain$ 7,302 $

152 $

152

Foreign exchange forward contracts which qualify for hedge accounting forthe years ended March 31, 2007 and 2006 and such amounts which areassigned to the associated assets and liabilities and are recorded on thebalance sheets at March 31, 2007 and 2006, are excluded from disclosure ofmarket value information.

16. RELATED PARTY TRANSACTIONSThe Company has entered into a consultant agreement with Planning HiroLtd. Mr. Hirokatsu Tokuda, director of the Company, owns 100% of theoutstanding shares of Planning Hiro Ltd.
Mr. Etsuji Ikegami, a corporate auditor of the Company, is a tax accountant.
He does not own any of the outstanding shares of the Company.
Transactions with these related parties for the years ended March 31, 2007
and 2006, and related balances at March 31, 2007 and 2006, were as follows:
Thousands of
U.S. dollars

Millions of yen

2007

¥

8

$
¥

2007

¥

2007

2006

Millions of yen

23

WeightedAverage Shares¥ (2,033)

Basic EPS —Net income available tocommon shareholders
Effect of dilutive securities —Warrants
Diluted EPS —Net income for computation

U.S.
dollars

Yen
EPS

30,421 ¥ (66.83) $ (0.57)
Thousandsof shares

Yen

WeightedNet Income
Average Shares

EPS¥ 3,743

31,029 ¥120.61
5¥ 3,743

31,034 ¥120.59

18. SUPPLEMENTAL CASH FLOW INFORMATIONThe Company acquired stock of the following companies, which are newly
consolidated for the year ended March 31, 2007. The breakdown of theassets and liabilities of these companies on the date of acquisition was asfollows:

Current assets
Goodwill
Other non-current assets
Current liabilities
Long-term liabilities
Minority interests
Acquisition of stock
Cash and cash equivalents
Payment for purchase of newly consolidated
subsidiaries, net of cash acquired

Millions of yen

Thousands of
U.S. dollars¥ 1,659 $ 14,054
7,649
903
2,668
315
(14,138)(1,669)(2,016)
(238)
(6)
(51)
964
8,166
(10)
(85)
¥

954

$ 8,081

19. SUBSEQUENT EVENT

Foreign exchange forward contracts —Receivables — U.S. dollars

Balances:
With Planning Hiro Ltd. —Notes and accounts payable — Other

Net Loss

Corbon Holding S.A.S. and its three group companies

Foreign exchange forward contracts —Receivables — U.S. dollars

Transactions:With Planning Hiro Ltd. —Consultant expenses
With Mr. Etsuji Ikegami —Expenses of tax accountant

Thousandsof shares

Millionsof yenThe Group does not hold or issue derivatives for trading or speculative
purposes.

Contract
AmountMillionsof yen

2006

1

68

1
Thousands of
U.S. dollars

2007

$

8

On June 28, 2007, the shareholders of the Company authorized the following
appropriations of retained earnings as of March 31, 2007:
Millions of yen

Ordinary year-end cash dividends,¥25 ($0.21) per share¥

761

Thousands of
U.S. dollars$ 6,446

Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORTTo the Board of Directors of
Paramount Bed Co., Ltd.:We have audited the accompanying consolidated balance sheets of Paramount Bed Co., Ltd. (the “Company”) and subsidiaries(together, the “Group”) as of March 31, 2007 and 2006, and the related consolidated statements of operations, changes in equity, andcash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial 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 Paramount Bed Co., Ltd. and subsidiaries as of March 31, 2007 and 2006, and the consolidated results of theiroperations and their cash flows for the years then ended in conformity with accounting principles generally accepted in Japan.
As discussed in Note 2.g, effective April 1, 2005, the consolidated financial statements have been prepared in accordance with the
new accounting standard for impairment of fixed assets.
As discussed in Note 2.i to the consolidated financial statements, the Group applied the new accounting standard for stock options tothose granted on and after May 1, 2006.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation
has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for the convenience ofreaders outside Japan.

June 28, 200724

Corporate History
In 1947 the Company’s founder, Ryusuke Kimura, bought scrapped hospital beds that were delivered to thegovernment during World War 2, refurbished them, and sold them. More than half a century has passed since then,and the Company’s brief history up to now is described below.
May 1947: Ryusuke Kimura founds Kimura Shindai Seisakujo Ltd. as a private
enterprise, and starts manufacturing hospital beds.
May 1950: Kimura Shindai Industry Co., Ltd. is established with capital of 200
thousand yen. Paramount Bed is adopted as the brand name.
May 1953: Edogawa plant is built.
July 1955: Gatch (hospital) bed is developed.
May 1961: Head office is moved to current location.
April 1962: KA-45, the first electric bed in Japan, is developed and sold.
March 1966: Kyushu sales office (now Fukuoka branch) is set up.
May 1966: Chiba plant is built.
February 1970: Matsuo plant is built and absorbs Edogawa plant operation.
February 1971: Osaka branch is set up.
January 1972: KA-500 and KA-600 Series hospital beds are developed and sold.
September 1977: Hiroshima and Nagoya sales offices (now Hiroshima branch andNagoya branch) are set up.
June 1980: Scot-klean (automatic urine receptacle) is developed and sold.
December 1983: KQ-100 (Aura electric bed) home-care bed is developed and sold.
July 1986: The Company absorbs Paramount Sendai Co., Ltd. (now Sendai
branch) and Paramount Sapporo Co., Ltd. (now Sapporo branch).
March 1987: Corporate name is changed to Paramount Bed Co., Ltd.
December 1987: The Company shares are listed on the JASDAQ market.
November 1988: Paracare Mattress, a mattress made from new material, is developedand sold.
October 1990: Hestia Series (beds for elderly-care facilities) is developed and sold.
April 1991: Ryusuke Kimura and Kenji Kimura become Chairman and President,
respectively.
January 1992: KA-900 Series (microcomputer controlled electric beds) is developedand sold.
May 1992: Yokohama branch is set up.
October 1993: Rakusho Series (home-care beds) is developed and sold.
December 1993: The Company shares are listed on the Second Section of the Tokyo
Stock Exchange.
September 1995: PT. Paramount Bed Indonesia is set up as an overseas subsidiary.
May 1996: Takamatsu branch is set up.
September 1996: The Company shares are listed on the First Section of the Tokyo Stock
Exchange.
April 1997: Kyma Aura Bed Series (home-care beds) is developed and sold.
October 1997: Customer Service Center is set up.
October 1998: KA-6000 Series (hospital beds) is developed and sold.
April 1999: New Scot-klean (automatic urine receptacle) is developed and sold.
May 1999: Obtain ISO9001 certification.
October 1999: Aura 21 Series (home-care beds) is developed and sold.
February 2000: Club Paramount Series (highly functional family beds) is developedand sold.
October 2000: Saitama branch is set up.
February 2001: Callisto Series (beds for elderly-care facilities) is developed and sold.
October 2001: Nagoya branch relocates to newly-built office.
January 2002: Shanghai representative office is set up.
July 2002: PARA TECHNO Co., Ltd. is set up as a consolidated subsidiary.
May 2003: A new brand INTIME, which provides sound sleep for better health,is established.
July 2003: Paramount Universal Design Station (PUDS) is set up.
November 2003: Rakusho Series (home-care beds) is developed and sold.
March 2004: Paramount Bed (China) Co., Ltd. is set up as a consolidated subsidiary.
March 2006: Head Office, Completed construction of the Technical Center.
December 2006: The Company acquired shares of Corbon Holding S.A.S. (currently
a consolidated subsidiary).

25

Gatch (hospital) bed

KA-500 Series hospital bed

Aura electric bed

Hestia Series

Callisto Series

INTIME

Rakusho SeriesCorporate Information
As of March 31, 2007

Corporate Data

Network
Domestic

Corporate Name:
Head Office:Founded:Capital:Number of Employees:

Paramount Bed Co., Ltd.
14-5, Higashisuna 2-chome, Koto-ku,
Tokyo 136-8670, JapanMay 1947¥6,591 million
788

Board of Directors and Corporate Auditors(As of June 28, 2007)
President and Representative Director:
Vice-president and Representative Director:

Kenji Kimura
Kyosuke Kimura

Directors:

Michihide Kimura
Tadaharu Kato
Ikuo Sakamoto
Toshio Horiuchi
Hirokatsu Tokuda

Standing Corporate Auditors:

Tadahiro Sekine
Katsuhiro Shibata

Corporate Auditors:

Etsuji Ikegami
Yukari Oka

Shareholder Information
Authorized Shares:
Issued Shares:
Number of Shareholders:

126,000,000
31,682,526
18,084

Major Shareholders
Number of Shares Percentage of
Owned (Thousands) Voting Rights (%)

Kimura Kosan Co., Ltd.
Kenji Kimura
Kyosuke Kimura
The Master Trust Bank of Japan, Ltd. (Trust)
Mizuho Bank, Ltd.
Michihide Kimura
Ryusuke Kimura
The Kimura Foundation for Nursing Education
Japan Trustee Services Bank, Ltd. (Trust)
RBC Dexia Investor Services Trust London Client Account

6,607
2,535
1,913
1,332
1,203
1,195
669
630
463
340

21.8
8.4
6.3
4.4
4.0
3.9
2.2
2.1
1.5
1.1

The Company holds 1,262 thousands shares of treasury stock, but is excluded fromthe above major shareholders.

Ownership among Shareholders
Number of Shares Percentage of Total
Owned (Thousands) Shares Issued (%)

Financial institutions
Securities firms
Foreign corporations
Other domestic corporations
Individuals and others
Treasury stock

5,230
180
3,187
7,951
13,870
1,262

16.5
0.6
10.0
25.1
43.8
4.0

Head Office14-5, Higashisuna 2-chome, Koto-ku, Tokyo 136-8670
Tel. +81-3-3648-1111 (key number)Tel. +81-3-3648-2961 (Overseas Trade Division)
Branches● Sapporo Branch318-11, Nishi 13-chome, Minaminijo, Chuo-ku, Sapporo,
Hokkaido 060-0062
Tel. +81-11-271-1181● Sendai Branch
3-3, Oroshi-machi 2-chome, Wakabayashi-ku, Sendai, Miyagi 984-0015
Tel. +81-22-239-5211● Saitama Branch
4-7, Kamiochiai 9-chome, Chuo-ku, Saitama, Saitama 338-0001
Tel. +81-48-852-0707● Yokohama Branch
1715-1, Tsuruma, Machida, Tokyo 194-0004
Tel. +81-42-795-8800● Nagoya Branch
20-17, Izumi 1-chome, Higashi-ku, Nagoya, Aichi 461-0001
Tel. +81-52-963-0600● Osaka Branch
3-33, Tosabori 2-chome, Nishi-ku, Osaka, Osaka 550-0001
Tel. +81-6-6443-8791● Hiroshima Branch
8-5, Yokogawa-cho 3-chome, Nishi-ku, Hiroshima, Hiroshima 733-0011
Tel. +81-82-293-1311● Takamatsu Branch223-1, Goto-cho, Takamatsu, Kagawa 761-8031
Tel. +81-87-881-8800● Fukuoka Branch
14-20, Hakataeki-higashi 3-chome, Hakata-ku, Fukuoka,
Fukuoka 812-0013
Tel. +81-92-461-1131
INTIME Shops● INTIME Kyobashi
Sumitomo Mitsui Hull Tepco Bldg.1F
6-1, Kyobashi 1-chome, Chuo-ku, Tokyo 104-0031
Tel. +81-3-5250-1515● INTIME Sapporo
1-4, Nishi 5-chome, Kitayojo, Chuo-ku, Sapporo, Hokkaido 060-0004
Tel. +81-11-219-8800● INTIME Nagoya
Address: Same as Nagoya Branch
Tel. +81-52-963-6800● INTIME Shinsaibashi
Sanei Shinsaibashi Bldg.1F
13-15, Nishishinsaibashi 1-chome, Chuo-ku, Osaka, Osaka 542-0086
Tel. +81-6-6245-9021● INTIME Fukuoka
Address: Same as Fukuoka Branch
Tel. +81-92-461-0666Plants● Chiba Plant
2078, Shirahata, Sammu-shi, Chiba 289-1306
Tel. +81-475-82-6111● Matsuo Plant
617, Kashikehongo, Matsuo-machi, Sammu-shi, Chiba 289-1537
Tel. +81-479-86-3331● Ohira Plant
690-1, Shimonogo, Matsuo-machi, Sammu-shi, Chiba 289-1536
Tel. +81-479-86-2121
Subsidiary● PARA TECHNO Co., Ltd.
1648-7, 1-chome, Kaijincho-minami, Funabashi, Chiba 273-0024
Tel. +81-47-431-0552

Overseas

Representative Office● Shanghai Representative Office

Suite 1105, Liu Lin Tower, No.1 Huai Hai Middle Road, Shanghai
20021, P.R. China
Tel. +86-21-5383-5111● Representative Office in Paris
6, Rue de Remusat, 75016 Paris, France
Tel. +33-6-09-841-507
Subsidiaries● PT. Paramount Bed Indonesia
MM2100 Industrial Town, Block M-1-1, Export Processing Zone,
Cikarang Barat, Bekasi 17520, Jawa Barat, Indonesia
Tel. +62-21-8980715● Paramount Bed (China) Co., Ltd.
A-105, Wuxi National Hi & New Tech Industrial Developement Zone,
Wuxi, Jiangsu, China
Tel. +86-510-8532-3201● Corbon Holding S.A.S.
Z.I. La Planche-37210 Rochecorbon, France
Tel. +33-2-47-885-885

26

Paramount Bed Co., Ltd.
14-5, Higashisuna 2-chome,
Koto-ku, Tokyo 136-8670, Japan
Tel. +81-3-3648-1111
http://www.paramount.co.jp
Printed in Japan