



For the Fiscal Year Ended February 28, 2008

Corporate Vision
Our commitment totreating people around the world
with topical and transdermal patches

More than a half century has elapsed since
the launching of Salonpas, and about 20
billion pieces have been sold in last twenty
years.
Approx. 1.3 million kilometers, encircling theearth 31 times.

Topical and transdermal patches are simple to use, being placed on the skin totreat medical conditions. They are consistent with the latest trend of improving
drug delivery in medical treatment designed to enhance people’s quality of life.
Our message that medicated skin patches have a lot to offer is embodied
in the word Salonpathy, derived from our mainstay product Salonpas. Overthe years we have continued to help people improve their health by leveraging
our transdermal drug delivery system (TDDS) expertise to develop topical andtransdermal patches mainly for pain relief and reducing inﬂammation.
Our basic management policy is to concentrate on and specialize in creating
new pharmaceutical products and formulations adaptable to TDDS, which is thesource of our competitiveness. We believe this will allow us to respond to theunderlying need for health, safety, and comfort of people around the world andimprove their quality of life.
We are committed to supplying pharmaceutical products capable of treating
people anywhere in the world simply by applying them to the skin.

Forward-looking statements:
Statements in this annual report concerning current plans, forecasts, strategies, beliefs, and other forward-looking information related to Hisamitsu Pharmaceutical Co., Ltd.,other than those of historical fact, are forecasts of future business performance based on the judgments of management at Hisamitsu Pharmaceutical Co., Ltd. in light ofcurrently available information. Accordingly, please refrain from making investment decisions based solely on forecasts of business performance in this annual report. Actual
business performance may differ signiﬁcantly from these forecasts due to changes in a variety of factors.
Note: Amounts in US dollars are included solely for convenience and are translated at a rate of ¥104.78=U.S.$1.00, the approximate rate of exchange on February 29, 2008.

Contents

Corporate Vision1

Consolidated Financial Highlights

2

To Our Shareholders

3

Milestone

4

Overview of Operations

5

Corporate Governance and Internal Auditing

17

Corporate Information

24

Financial Section
Consolidated Balance Sheets

31

Consolidated Statements of Income

33

Consolidated Statements of Shareholders’ Equity

34

Consolidated Statements of Cash Flows35

Notes to Consolidated Financial Statements

37

Corporate DataHISAMITSU PHARMACEUTICAL CO., INC

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ANNUAL REPORT 2008

Consolidated Financial Highlights

Fiscal year (FY) to:

2/04

2/05

2/06

2/07

2/08

Sales

(¥ million)

74,58883,545

102,665

109,791

119,061

Operating income(¥ million)

17,98921,495

22,77026,13429,071

Ordinary income(¥ million)

18,38821,871

24,15927,00130,204

Net income(¥ million)

10,822

12,873

14,44815,847

18,663

Net assets(¥ million)

69,45380,86890,520103,966

113,929

Total assets(¥ million)

97,218111,063

136,584

141,143

149,750

Net assets per share(¥)

765.23891.33

1,020.26

1,164.05

1,276.16

EPS(¥)

118.77141.30159.75178.74210.45

Diluted EPS

(¥)

—

—

—

—

—

Equity ratio

(%)

71.4

72.8

66.3

73.1

75.6

ROE

(%)

16.7

17.1

16.9

16.4

17.2

P/E

(x)

11.9

15.6

17.3

20.0

15.9

Operating cash ﬂow(¥ million)

7,696

20,13023,114

12,22825,722

Investing cash ﬂow(¥ million)(2,258)(4,755)(18,606)(11,804)(11,911)

Financing cash ﬂow(¥ million)(2,397)(1,267)(303)(9,580)(7,479)Cash and equivalents at year-end(¥ million)

17,41731,47735,623

26,51032,706

Employees(average temporary staff)(People)

1,432
(355)

1,541
(290)

1,671
(295)

1,629
(353)

1,752
(297)

Notes: 1. Sales do not include consumption tax.
2. Diluted EPS is not listed due to the absence of residual securities.
3. Net assets have been calculated since FY 2/07 based on the Accounting Standards for the Presentation of Net Assets in the Balance Sheets(Corporate Accounting Standard No. 5) and the Application Guidelines for Accounting Standards for the Presentation of Net Assets in the
Balance Sheets (Corporate Accounting Standard Application Guideline No. 8).

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To Our Stakeholders

I would like to provide an overview of our operations andthe services provided to our customers.

ﬁnancial results for the year to February 29, 2008 (FY 2/08).

As a result of these business activities, groupwide sales

The ethical pharmaceutical industry continued to facea challenging business environment amid ongoing efforts

grew 8.4% year on year, or ¥9,269 million, to ¥119,061
million; ordinary income grew 11.9%, or ¥3,203 million, toto curb healthcare expenditures, notably the promotion of¥30,204 million; and net income grew 17.8%, or ¥2,815

generic drugs. We have responded to these circumstances
by working to provide medical institutions with pertinentscientiﬁc information about our ethical pharmaceuticals,particularly our mainstay anti-inﬂammatory pain relief
patches. We have also sought to promote sales of over-thecounter (OCT) pharmaceuticals, mainly anti-inﬂammatory
pain relief patches, amid a slumping market. Our researchand development efforts have focused on research in areasof specialty and on the development of new topical andtransdermal products. In our production facilities, we haveupgraded equipment to raise efﬁciency and improve quality,and have sought to maintain and increase ISO 14001
certiﬁcations to help protect the global environment. In ourcable television broadcasting and other businesses, groupcompanies have worked to improve earnings by enhancing

million, to ¥18,663 million.

NAKATOMI Hirotaka
President & CEO

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Milestone

1847
Komatsuya founded.
Emblem of “Komatsuya”

1903
Hisamitsu & Co. (Saburo Nakatomi,
representative) established

1934
SALONPAS
introduced to the market

1937
SALONPAS
begins overseas export

1988
MOHRUS
introduced to the market

1995
MOHRUS TAPE
introduced to the market

2003
Hisamitsu’s
corporate logo mark renewed

2007
The 160th anniversaryof the company’s founding

2008
SALONPAS PAIN RELIEF PATCH
SALONPAS ARTHRITIS PAIN
approved as the ﬁrst OTC topicalanalgestic patch by FDA

Hisamitsu Pharmaceutical was founded in the mid-19th century under thename of Komatsuya. The company went on to create a large variety ofhealth-related products, and has been the organization responsible for thepromotion of new ideas based on its comprehensive system encompassing
research, development, manufacturing, and sales. Salonpas was in fact introduced in 1934, and with its outright effectiveness achieved the positionof market leadership it continues to hold today. Salonpas was developed
through the application of Asahi Mankinko, the prototype therapeutic patchor that we introduced back in 1903. Just as its market launch signaled ahigh level of reﬁnement, the product has evolved considerably since then,thanks to the comments of everyday users. Moreover, it has served to
expand the culture of patch treatment, in which therapeutic patches are

HISAMITSU PHARMACEUTICAL CO., INC

promoted as safe and easy to use. Diversity has become a key word interms of culture and lifestyle today, yet unfortunately this has brought forth
new health concerns associated with increased stress and reduced exercise.The company went on to create a large variety of health-related
products, and has been the organization responsible for the promotion of
new ideas based on its comprehensive system encompassing research,development, manufacturing, and sales. Salonpas was in fact introduced
in 1934, and with its outright effectiveness achieved the position of market
leadership it continues to hold today. Salonpas was developed through theapplication of Asahi Mankinko

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Overview of Operations

4Overview of Operations

1. Overview of Operations(1) Operating results
The ethical pharmaceutical industry continued to face a challenging business environment amid ongoing efforts to curb
healthcare expenditures, notably the promotion of generic drugs. We have responded to these circumstances by working
to provide medical institutions with pertinent scientiﬁc information about our ethical pharmaceuticals, particularly ourmainstay anti-inﬂammatory pain relief patches. We have also sought to promote sales of OTC pharmaceuticals, mainly
anti-inﬂammatory pain relief patches, amid a slumping market. Our research and development efforts have focused on
research in areas of specialty and on the development of new topical and transdermal products. In our production facilities,
we have upgraded equipment to raise efﬁciency and improve quality, and have sought to maintain and increase ISO 14001
certiﬁcations to help protect the global environment. In our cable television broadcasting and other businesses, groupcompanies have worked to improve earnings by enhancing the services provided to our customers.
As a result of these business activities, consolidated sales grew 8.4% year on year, or ¥9,269 million, to ¥119,061
million; ordinary income grew 11.9%, or ¥3,203 million, to ¥30,204 million; and net income grew 17.8%, or ¥2,815 million,to ¥18,663 million.
Pharmaceuticals and related products
The pharmaceuticals and related products segment, particularly the ethical pharmaceuticals business, faced an extremely
uncertain business environment during FY 2/08 amid national efforts to curb healthcare expenditures. We responded tothese circumstances by providing medial institutions with appropriate and detailed scientiﬁc information about our products,
particularly our anti-inﬂammatory pain relief patches. While collecting and supplying information on efﬁcacy and safety, wesought to expand our market share for a variety of products, including our mainstay product Mohrus Tape, a ketoprofentransdermal patch; Mohrus Tape L, a double-sized version of the Mohrus Tape patch; Mohrus Pap 30mg, a ketoprofentransdermal patch; Mohrus Pap 60mg, and ketoprofen transdermal patch that can be applied to a large area; Naboal Pap 70
and Naboal Pap 140, one-a-day patches containing diclofenac sodium; and HMT, a transdermal bronchodilator tulobuteroltape.
In the OTC business, sales competition in the domestic market remained ﬁerce, and we sought to increase sales by
expanding our customer base through improvement in the brand image of mainstay products, including Salonpas, Air
Salonpas, Salonsip, Feitas, and Butenalock. We released several new products during the year in an effort to respond to
the diverse needs of our customers and cultivate new demand, including: Feitas L, which is twice the size of the original
Feitas to treat pain in the lower back and other large areas with one patch; Feitas Hot, which retains the same efﬁcacy as
Felbinac while providing continuous acute stimulation by promoting blood circulation through heat; Salonpas Lotion, which
responds to widespread demand for a lotion that makes it easier to apply Salonpas for soothing stimulation; the Butenalock
V series, which adds four additional ingredients, including an antipruritic, to the main ingredient butenaﬁne hydrochloride, astrong disinfectant for the cause of athlete’s foot; Butenalock V Air, which targets especially itchy athlete’s foot through the

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Overview of Operations

cooling sensation of a jet spray; and Ganryo Alﬁrst EX, an eye drop that is effective in treating allergy symptoms.
As a result of these efforts, sales in the pharmaceuticals and other products segment rose 8.8% year on year, or ¥9,374
million, to ¥116,129 million.
Cable television broadcasting and other businesses
In our cable and television broadcasting business, we completed preparations for terrestrial digital broadcasting and soughtto acquire customers for cable television and cable Internet services by expanding our service area.
We also worked to improve earnings in other businesses, including the production and sale of laboratory animals, byexpanding sales channels, improving customer services, and streamlining operations. Nevertheless, sales in the cable
television broadcasting and other businesses segment fell 3.5% year on year, or ¥105 million, to ¥2,931 million.
(2) Cash ﬂows
Cash provided by operating activities totaled ¥25,722 million, an increase of ¥13,493 million year on year, due mainly to
an increase in net income before taxes, increase in accounts payable, increase in other current liabilities, and decrease inaccounts receivable.
Cash used in investing activities totaled ¥11,911 million, an increase of ¥106 million year on year, due mainly to anincrease in payments for the purchase of tangible ﬁxed assets, increase in payments for the purchase of intangible ﬁxed
assets, increase in proceeds from the sale and redemption of securities, and decrease in payments for term deposits.
Cash used in ﬁnancing activities totaled ¥7,479 million, a decrease of ¥2,100 million year on year, due mainly to adecrease in the repayment of long-term debt.
As a result of the foregoing, cash and cash equivalents at the end of the ﬁscal year totaled ¥32,706 million, an increaseof ¥6,196 million from the beginning of the ﬁscal year.

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Overview of Operations(3) Sales
A breakdown of sales by business segment in FY 2/08 is provided below.
Business segment
Pharmaceuticals and related products(Millions of yen)

YoY (%)¥ 116,129

8.8

105,664

10.5

Topical analgesic products
Other topical and transdermal products

4,242

7.2

Others6,222

5.4

Cable television broadcasting

1,834

(0.5)

Other businesses

1,097

(8.1)

¥ 119,061

8.4

Total

Notes: 1. Sales to main customers and percentage to total sales
FY 2/07
Customer

FY 2/08

Sales (¥ million)% of total

Sales (¥ million)% of total

Mediceo Paltac Holdings Co., Ltd.

26,025

23.7

27,885

23.4

Alfresa Holdings Corporation

15,60014.2

17,653

14.8

Mediceo Paltac Holdings Co., Ltd. made Kobashou, Inc. a wholly owned subsidiary on January 1,
2008. Figures for FY 2/07 have been adjusted to enable comparison after the change. Alfresa Holdings
Corporation made CS Yakuhin Co., Ltd. and Ryuyaku Co., Ltd. wholly owned subsidiaries on October 1,
2007. Figures for FY 2/07 have been adjusted to enable comparison after the change.
2. The foregoing ﬁgures do not include consumption tax.

2. Key Challenges
Pharmaceuticals and related products
We expect the ethical pharmaceuticals business to face continued efforts to curb pharmaceutical expenditures, including
reductions in national health insurance prices, amid the rapid aging of Japanese society. In response to this difﬁcult businessenvironment, we are stepping up efforts to provide medical institutions with scientiﬁc information and we seek to develop
new topical and transdermal products that meet the needs of medical institutions and their patients.
For OTC pharmaceuticals, amid a prolonged market slump and intensifying competition, we seek to expand sales ofmainstay anti-inﬂammatory pain relief patches and respond to the needs of our customers by continuing to improve existingproducts and developing new products.
In overseas business, we are working to establish our brand in terms of trademarks, designs, manufacturing technology,

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Overview of Operations

and quality control systems, and to further augment overseas manufacturing facilities and promote overseas clinical trials.
Continuing to recognize our mission and responsibility as a pharmaceutical company, we aim to create a more robust
business base and manufacturing structure, and to accelerate the development of new products by concentrating researchin areas of specialty.
Cable television broadcasting and other businesses
In the cable television broadcasting and other businesses, including the production and sale of laboratory animals, ourgroup companies are working to expand their businesses and provide precise services to their customers while further
improving earnings by streamlining management and bolstering their corporate structure.
Basic policy on control of the company(1) Overview of our basic policy
We believe any entity with control over decision-making related to the company’s ﬁnancial and business affairs must havean understanding of the source of the company’s enterprise value and be able to consistently maintain and improve thisenterprise value and the common interests of shareholders. We believe any decision on how to respond to a proposed
acquisition that would transfer control over the company should ultimately be based on the wishes of individual shareholders.
We are not opposed to large purchases of the company’s stock, provided that it contributes to enterprise value and thecommon interests of shareholders.
However, there are many instances in which large stock purchases and proposed acquisitions may not contribute to thetarget company’s enterprise value and the common interests of shareholders. Examples include: those that clearly damage
the target company’s enterprise value and the common interests of shareholders, in light of the objective and other aspectsof the share purchase or proposed acquisition; those that effectively coerce shareholders into selling their shares; thosethat fail to provide a reasonable amount of time for the target company’s board of directors and shareholders to consider thedetails and possibly prepare a counteroffer; those that have conditions (e.g., purchase price, timing, and method) that areeither inadequate or inappropriate in light of the target company’s enterprise value; and those that damage relations with
employees, customers, creditors, or other parties essential to continued growth in the target company’s enterprise value.
We believe any entity that pursues a large stock purchase or proposed acquisition that does not contribute to thecompany’s enterprise value and the common interests of shareholders is not an appropriate entity for controlling decisionmaking related to the company’s ﬁnancial and business affairs, and that necessary and appropriate countermeasures must
be taken against any large stock purchase or proposed acquisition by such an entity to ensure the company’s enterprisevalue and the common interests of shareholders.

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Overview of Operations(2) Speciﬁc initiatives to achieve our basic policy
1) Speciﬁc initiatives to achieve our basic policy
Since launching a pharmaceutical business in 1847, our company has worked hard to improve the health of people byproviding pharmaceutical products, mainly pain relieving patches. External patches that are easy for anyone to apply topromote healing are consistent with the current interest in improving therapeutic drugs and quality of life, and they arealso representative of Japan’s therapeutic culture, which is well respected around the world. We pursue our business as a
mission to convey to the world the effectiveness and resulting excitement of this therapeutic patch culture.
Since releasing Salonpas in 1934, we have successfully developed and marketed a variety of pharmaceutical patch
products, including the OTC pharmaceutical Salonsip and the ethical pharmaceuticals Mohrus Pap and Mohrus Tape, byconcentrating on the creation of new drugs and new drug preparations based on our accumulated expertise and experienceand the support of our customers. We have also created products in new areas other than anti-inﬂammatory pain relief,
including the external antifungal drug Volley and the hormone replacement patch Estrana, and are expanding our businessinternationally by conducting sales, pursuing research and development, and acquiring approvals in various countries
around the world.
Our corporate philosophy is to strive to improve the quality of life of people around the world by creating external drugs
to meet the needs of our customers, and by implementing this philosophy, we seek to enhance enterprise value and thecommon interests of shareholders.
In other words, the sources of enterprise value for our company are: 1) broad access to a variety of drugs createdby a number of companies, and research and development capabilities to make these drugs available in patches; 2)
manufacturing technology and quality control systems that enable the efﬁcient, stable, and ongoing production of high-quality
products; 3) marketing prowess to cultivate several long-selling and market-leading brands, including Salonpas, Salonsip,
Feitas, Butenalock, Mohrus Pap, and Mohrus Tape; and 4) an integrated research and development, manufacturing, andsales structure that allows us to quickly reﬂect the needs of our customers to improve products and services.
Going forward, we will continue our efforts to increase enterprise value and maximize the common interests ofshareholders through ongoing and aggressive investment.
To achieve this goal, we aim to build a robust corporate structure capable of meeting our sales targets and securing
net proﬁts despite the difﬁcult competitive environment, and to ensure sustained growth in net proﬁts by strengthening ourbusiness both in Japan and overseas. We also aspire to be an independent research and development-based pharmaceuticalcompany by concentrating research in our areas of specialty, in line with our basic management policy, and by focusing on
the creation of new drugs and new drug preparations.
We are also actively pursuing licensing activities, including an agreement with Mundipharma International Limited for the

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Overview of Operations

exclusive distribution in Japan of Norspan, a buprenorphine patch to treat noncancerous moderate to severe back pain andchronic osteoarthritis pain.
In this way, we seek to increase cash ﬂow through the active pursuit of our business and to create future assets thatwill contribute to the common interests of shareholders through the development of new topical and transdermal products,
international expansion of our brands in terms trademarks, designs, manufacturing technology, and quality control systems,
streamlining of management, and bolstering of our corporate structure.
We consider the return of proﬁts to shareholders to be an important management issue, and we seek to pay appropriate
dividends based on earnings and pursue ﬂexible ﬁnancial policies, including share buybacks, after considering researchand development investment to raise capital efﬁciency and enterprise value and the internal reserves needed for future
growth.
In particular, we seek to maintain ROE at 15% or higher from the standpoint of raising capital efﬁciency, and to consistently
pay divides with a target payout ratio of 30%.
2) Initiatives in light of our basic policy to prevent inappropriate entities from controlling decision-making related
to the group’s ﬁnancial and business affairs
Our board of directors voted at a meeting held on March 27, 2008 to adopt takeover defense measures to counter large
purchases of the company’s stock. These takeover defenses apply to purchases of the company’s stock with the objective
or result of a speciﬁc shareholder group owning 20% or more of the voting rights. Purchasers are required to follow certain
procedures in providing shareholders, the company’s board of directors, and an independent committee with information
on which to base their decision. If the purchaser fails to comply with these procedures or if the purchase will damage thecompany’s enterprise value and the common interests of shareholders, then the company can pursue countermeasuresagainst the purchaser in the form of a gratis allotment of share acquisition rights or other appropriate countermeasurethat the board of directors is permitted to take based on the Companies Act, other laws, and the company’s articles ofincorporation.
Whether countermeasures based on these takeover defenses are adopted is ultimately a decision of the board of
directors, but to ensure the proper use of these takeover defenses and objective, rational, and impartial decisions by thecompany’s board of directors, we established a committee independent from the board of directors and will give utmost
respect to the opinions of this committee.
These takeover defenses were effective from March 27, 2008 until the conclusion of the annual meeting of shareholders
on May 22, 2008, but upon approval by shareholders at this annual meeting, the effective period was extended until theconclusion of the annual meeting of shareholders for the ﬁscal year ending on February 28, 2011. Additionally, thesetakeover defenses shall be terminated immediately if the board of directors comprising directors appointed at a general
meeting of shareholders decides to terminate these defenses.

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Overview of Operations(3) Board of directors opinion and reasoning for the foregoing initiatives
1) Speciﬁc initiatives to achieve our basic policy
The initiatives outlined above are intended to contribute to fulﬁlling our basic policy and have been prepared as speciﬁc policies
to ensure and enhance on an ongoing basis the company’s enterprise value and the common interests of shareholders.
Accordingly, these initiatives comply with our basic policy and will not damage the common interests of shareholders.
2) Initiatives in light of our basic policy to prevent inappropriate entities from controlling decision-making related
to the group’s ﬁnancial and business affairs
These takeover defenses comply in their content with our basic policy and are intended to ensure objectivity and rationality
in the decisions of the board of directors. Further, these defenses were adopted to ensure and enhance the company’s
enterprise value and the common interests of shareholders, and are not intended to maintain the position of the company’s
directors.

3. Business and Other Risks
The following risks associated with our group’s business activities could have a signiﬁcant impact on the decisions ofinvestors.
Any forward-looking statements are based on our judgments at the end of FY 2/08.
(1) Legal and regulatory risks
Our mainstay pharmaceuticals and related products business is affected by a variety of regulations, including the national
health insurance drug price system and the healthcare insurance system. For example, the revision of national healthinsurance drug prices every two years places regular downward pressure on selling prices, and this could have a negative
impact on earnings if we are unable to compensate through growth in sales volume or other means. We are similarly
affected by a variety of regulations overseas.
(2) Risks from reliance on certain products
The four products Mohrus Tape, Mohrus Tape L, Mohrus Pap 30mg, and Mohrus Pap 60mg accounted for 65.7% ofconsolidated sales in FY 2/08. Consequently, earnings could be aversely affected if we are unable to adequately maintainthe rights related to these products or if serious side-effects are revealed.
(3) Research and development risks
We conduct research and development into new products and new technology. However, earnings could be adversely
affected by the suspension of research and development activities for a variety of reasons, including failure to produce
anticipated results, or by the inability to recover research and development investment through sales.

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Overview of Operations(4) Manufacturing and procurement risks
We manufacture products using independent technology at our own plants. We rely on speciﬁc vendors to supply certain
products and raw materials. Consequently, earnings could be adversely affected by the suspension of manufacturing orpurchasing of these products and raw materials for some reason.
(5) Environmental risksSome of the chemicals used in our research and development activities and manufacturing processes can have an adverse
impact on human health and the surrounding environment. Although we take sufﬁcient safeguards, earnings could be
adversely affected if these substances are judged to be having a negative impact on the surrounding environment.
(6) Intellectual property risks
Our business activities could possibly be suspended or lead to litigation if they violate the patents or other intellectual
property rights of another company. We may also initiate ligation if another company violates our intellectual property rights.
Earnings could be adversely affected by the process and outcome of such actions.
(7) Litigation risks
Our business activities could possibly lead to litigation related to pharmaceutical side-effects and product liability. Earnings
could be adversely affected by the process and outcome of such actions.
(8) Other risks
In addition to the foregoing, other potential risks include natural disasters and the security of computer systems.

4. Important Business Agreements
Distribution agreement
We concluded an exclusive contract with Mundipharma International Limited of Switzerland on August 6, 2007 for the
exclusive distribution rights in Japan of Norspan, a buprenorphine patch to treat moderate to severe back pain and chronic
osteoarthritis pain.
(1) Counterparty to the agreement
Mundipharma International Limited(2) Agreement details
Acquire exclusive distribution rights in Japan for the buprenorphine patch Norspan.
(3) Acquisition priceOne-time payment of $30 million and subsequent milestone payments based on development progress and sales.

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Overview of Operations

5. Research and Development
Pharmaceuticals and related products
We conduct research and development based on the needs of medical practice, focusing on the development of external
pharmaceuticals.
For ethical pharmaceuticals in Japan, we have been independently developing HFT-290, a transdermal-absorption
continuous-action drug for the treatment of cancer pain. We have completed Phase III clinical trials and are now preparing
to apply for approval.
We have been working to verify in Phase III clinical trials the analgesic effects of KPT-220 (generic name: ketoprofen),
which is intended to provide additional effectiveness in relieving rheumatoid arthritis pain to the anti-inﬂammatory pain relief
patch Mohrus Tape. We succeeded in showing a statistically signiﬁcant difference between the drug and a placebo, and wehave ﬁled an application for approval.
The anti Parkinson’s drug HPL-509 (generic name: pergolide mesylate) was in Phase II clinical trials, but development
has been suspended for the following reason. Revision of the package insert for oral pergolide and the removal of pergolide
as a ﬁrst-line drug for Parkinson’s patients created a need to assess market trends and for further baseline assessment of
the safety of HPL-509 for oral pergolide.
We concluded an exclusive contract with Mundipharma International Limited for distribution rights in Japan for a patch
to treat moderate to severe back pain and chronic osteoarthritis pain. Mundipharma has completed Phase III clinical trials
in Japan and currently seeks to ﬁle an application for approval.
For OTC pharmaceuticals, we are working to develop new products, improve existing products, and add items with thegoal of raising efﬁcacy, safety, and usability.
For ethical pharmaceuticals overseas, we have been developing the external anti-inﬂammatory pain reliever HKT-500(generic name: ketoprofen) as an overseas strategic product in the United States. We are currently conducting Phase III
clinical trials to acquire approval. We have also applied for approval in the United States for the severe pain reliever HFG512.
For OTC pharmaceuticals overseas, we have received approval from the US Food and Drug Administration of a new
drug application for the external anti-inﬂammatory pain reliever FS-67 (generic name: methyl salicylate, L-menthol).
To expand the potential of transdermal treatments, we are working to improve our commercialization technology throughindependent development of basic technology and joint development with outside organizations.

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Cable television broadcasting and other businesses
We do not conduct research and development in our cable television broadcasting business.
We conduct some research and development in other businesses, but because the amount is limited, it does not merit
special mention.
As a result of the foregoing, research and development expenditures totaled ¥11,234 million in FY 2/08.

6. Analysis of Financial Position and Operating Results(1) Analysis of ﬁnancial position in FY 2/08
1) Assets
Assets totaled ¥149,750 million at the end of FY 2/08, an increase of ¥8,607 million from the previous year, due mainly toinvestment securities decreasing by ¥3,063 million to ¥14,872 million as a result of marking to market, cash and deposits
increasing by ¥6,311 million to ¥36,129 million as a result of sales growth, and notes and accounts receivable increasing by¥2,920 million to ¥31,307 million.
2) Liabilities
Liabilities totaled ¥35,851 million at the end of FY 2/08, a decrease of ¥1,355 million from the previous year, due mainly tonotes and accounts payable increasing by ¥929 million to ¥9,933 million as a result of raw material purchases in response
to sales growth, short-term borrowings decreasing by ¥2,429 million to ¥1,038 million as a result of repayment, and otherpayables decreasing by ¥1,555 million to ¥7,699 million.

3) Net assets
Net assets totaled ¥113,929 million at the end of FY 2/08, an increase of ¥9.963 million from the previous year, due mainly
to dividend payments of ¥4,790 million, net unrealized holding gains on securities decreasing by ¥3,921 million, and net
income of ¥18,663 million.
(2) Analysis of operating results in FY 2/08
1) SalesSales grew 8.4% year on year to ¥119,061 million. As a result of focusing on expanding sales of mainstay products, Mohrus
Tape was up 6.3% and Mohrus Tape L was up 35.8% to contribute to overall sales growth.

HISAMITSU PHARMACEUTICAL CO., INC

14

ANNUAL REPORT 2008

Overview of Operations

2) Operating income
Operating income grew 11.2% year on year to ¥29,071 million as a result of holding the rise in the cost of sales ratio to
0.3 percentage points by raising productivity and reducing manufacturing costs, and limiting growth in selling, general andadministrative expenses by reducing advertising expenditures.
3) Ordinary income
Ordinary income grew 11.9% year on year to ¥30,204 million as a result of growth in operating income.
4) Net income
Net income grew 17.8% year on year to ¥18,663 million as a result of gains from the reversal of retirement beneﬁt reserves
and income tax adjustments. Consequently, earnings per share totaled ¥210.45 in FY 2/08, and return on equity was
17.2%.

7. Capital Expenditures
Capital expenditures totaled ¥6,356 million in FY 2/08, due mainly to augmenting production equipment.
In the pharmaceuticals and related products business, we mainly augmented production equipment at the Utsunomiya
plant, requiring capital expenditures of ¥3,944 million.
In the cable television broadcasting business, we mainly invested to expand bandwidth to provide digital capabilities toour subscribers, resulting in capital expenditures of ¥311 million.
We did not sell or remove any equipment that would affect production capacity in FY 2/08.

HISAMITSU PHARMACEUTICAL CO., INC

15

ANNUAL REPORT 2008

Corporate Governance and Internal Auditing

HISAMITSU PHARMACEUTICAL CO., INC

16

ANNUAL REPORT 2008

Corporate Governance and Internal Auditing

Dividend Policy
Our basic policy is to continue paying stable dividends to shareholders. We pay special and commemorative dividends inlight of earnings and other factors in an effort to return proﬁts to shareholders. We also repurchase and retire shares andconduct share splits as effective means for returning proﬁts to shareholders.
Our basic policy is to pay dividends from retained earnings twice yearly through interim dividends and year-end dividends. The general meeting of shareholders is responsible for deciding on year-end dividends and the board of directors
decides on interim dividends.
In FY 2/08 we paid an interim dividend of ¥30 per share and a year-end dividend of ¥30 per share, for an annual dividendof ¥60 per share. This resulted in a dividend payout ratio of 30.4%.
We use internal reserves for research and development activities in Japan and overseas and for making capital investment related to new products in an effort to further increase enterprise value.
Our articles of incorporation stipulate that interim dividends can be paid based on a board of directors resolution toshareholders or pledgees listed or registered in the ﬁnal shareholder registry at the end of August each year.
Note: Dividends in FY 2/08 are as follows.
Resolution date

Total dividends (¥ million)

Dividends per share (¥)

2,661

30.0

2,661

30.0

October 17, 2007
Board of directors resolution
May 22, 2008
General meeting of shareholders resolution

Corporate Governance(1) Basic approach to corporate governance
We have prepared basic internal control policies to enhance management transparency and ensure compliance, and we
consider the improvement of corporate government to be an important task. To this end, we have placed priority on creating
an organization capable of responding quickly to changes in the business environment and have implemented structuralreforms.
With this in mind, we have adjusted the number of directors to an appropriate level with the goals of enhancing the performance of the board of directors and speeding up decision making. We have also introduced an executive ofﬁce system
to clarify roles and responsibilities in business execution.

HISAMITSU PHARMACEUTICAL CO., INC

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ANNUAL REPORT 2008

Corporate Governance and Internal Auditing

Going forward, we seek to create a stronger bond of trust with our stakeholders as a good corporate citizen by improving
transparency, ensuring compliance, and upholding corporate ethics in our business activities.
(2) Corporate organization and internal control systems
Directors, executive ofﬁcers, and auditors
In the area of corporate governance, we reduced the number of directors and introduced an executive ofﬁcer system toclarify the responsibilities and authority of management and speed up decision-making and business execution.
We reduced the number of directors from 13 to nine at the annual general meeting of shareholders on May 22, 2003,
and to bolster our management structure further, we changed the articles of incorporation to reduce the number of directors
from 13 or fewer to 10 or fewer at the annual general meeting of shareholders on May 25, 2006.
Important management decisions are made by the Management Advisory Council comprising key directors and executive ofﬁcers, and important resolutions are debated and decided by the board of directors. We introduced an executiveofﬁcer system in March 2003 with the goals of accelerating management decisions and improving their transparency andstrategic focus. We have also worked to enhance management oversight and to separate, decentralize, and strengthen
decision-making functions and business execution functions.
To better facilitate fair auditing, we switched to an auditing system in which two of the four auditors comprise outside
auditors at the annual general meeting of shareholders on May 26, 2004. To bolster management oversight further andstrengthen our auditing system, we changed the articles of incorporation to increase the number of auditors from four or
fewer to six or fewer at the annual general meeting of shareholders on May 25, 2006.
Auditors attend meetings of the board of directors, regularly convene meetings of the board of auditors, and receive audit
reports from the independent auditor as needed. Our two outside auditors do not have any business relationships or otherinterests with the company.
Resolutions to appoint or remove directors(1) The articles of incorporation stipulate that resolutions to appoint directors require a majority vote of at least one-third of
shareholders capable of executing voting rights. Cumulative voting is not provided for.
(2) The articles of incorporation stipulate that resolutions to appoint auditors require a minimum two-thirds vote of shareholders owning a majority of the voting rights of shareholders capable of executing voting rights.

HISAMITSU PHARMACEUTICAL CO., INC

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ANNUAL REPORT 2008

Corporate Governance and Internal Auditing

Acquisition of treasury shares
To enable the ﬂexible execution of capital policy, the articles of incorporation stipulate that the company can repurchaseshares in the open market or through other means based on a board of directors resolution in accordance with Article 165of the Companies Act.
Interim dividends
To ﬂexibly return proﬁts to shareholders, the articles of incorporation stipulate that interim dividends from retained earnings,
as deﬁned in Article 454-5 in the Companies Act, can be paid based on a board of directors resolution to shareholders orpledgees listed or registered in the ﬁnal shareholder registry at the end of August each year.
Special resolutions of the general meeting of shareholders
To facilitate the smooth administration of general meetings of shareholders, the articles of incorporation stipulate that resolutions
based on Article 309-2 of the Companies Act require a minimum two-third vote of shareholders owning a minimum one-third of thevoting rights of shareholders capable of executing voting rights, except as otherwise provided for by the articles of incorporation.
Internal auditing
We established the Internal Audit Ofﬁce (two auditors) as an internal audit division. The Internal Audit Ofﬁce is responsible
for auditing the business activities of Hisamitsu Pharmaceutical and group companies to ensure that these activities are
effective and appropriate and that they comply with relevant laws and the articles of incorporation, reporting to the boardof directors and the board of auditors, promoting mutual cooperation, reporting to relevant business division managers anddirectors, and providing support and advice as needed to improve internal control.
Independent auditing
We have concluded an auditing contract with KPMG AZSA & Co. to serve as an independent auditor responsible for accounting auditing, and by providing accurate business information and taking other steps, we provide an environment conducive to fair auditing. There are no special interests between the company and KPMG AZSA & Co. and their designatedand engagement partners. We also receive advice as needed from advisory lawyers related to routine legal matters.
Audit company providing auditing services
Audit company

Certiﬁed public accountants providing auditing services

Assisting personnel

KPMG AZSA & Co.

Designated and Engagement Partner

Yukimitsu Aoki

CPAs

2

KPMG AZSA & Co.

Designated and Engagement Partner

Yoshihide Takehisa

Other

10

Note: A statement on the years of continuous audit service is omitted because all auditors have served fewer
than seven years.
HISAMITSU PHARMACEUTICAL CO., INC

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ANNUAL REPORT 2008

Corporate Governance and Internal Auditing

Corporate governance structure    
                      
 
Directors and auditors

    
 
 

     Disclosure Policy Team          

Operational andaccounting auditing      HISAMITSU PHARMACEUTICAL CO., INC

20

ANNUAL REPORT 2008

Corporate Governance and Internal Auditing(3) Risk management systems
To respond to a variety of business risks, we have sought to enhance risk management and corporate governance by
establishing a variety of internal committees.
Various committees
Compliance Promotion Committee and Compliance Promotion Ofﬁce
We prepared the Hisamitsu Corporate Charter in June 2002 and established the Compliance Promotion Committee andCompliance Promotion Ofﬁce, both headed by a director of public relations and human resources, to promote thoroughand ethical compliance. We have distributed handbooks to ofﬁcers and employees to promote a recognition and sustained
awareness of the importance of compliance, and have worked to ensure behavior based on high ethical and moral
standards.
Going forward, we will continue our efforts to bolster compliance related to social responsibility, including corporate
ethics, the environment, and privacy protection, at Hisamitsu Pharmaceutical and group companies.
Crisis Management Committee (Chair: President & CEO)We established a Crisis Headquarters to help prevent risk and prepare for times of crisis, established a permanent Crisis
Management Committee to operate in normal times, and conduct training of committee members as needed.
Privacy Protection Committee (Chair: Director of Human Resources)
We established the Privacy Protection Committee in April 2005 to fully comply with the Personal Information Protection
Act. We have called personal information administrators together and held committee meetings as needed to create anorganization to protect individual rights and interests and to ensure that this organization is safely managed.
Disclosure Policy Team (Chair: President & CEO)We established the Disclosure Policy Team in April 2001 to provide the timely and appropriate disclosure of corporate
information. All ofﬁcers and employees work toward timely disclosure based on our Disclosure Policy Rules.
We strive to actively disclose information to enhance management transparency and seek to promote smoothcommunication with shareholders and investors through our investor relations activities.

HISAMITSU PHARMACEUTICAL CO., INC

21

ANNUAL REPORT 2008

Corporate Governance and Internal Auditing(4) Executive compensation
The company’s directors and auditors receive the following compensation.
Directors¥407 million

Auditors¥54 million (including ¥11 million for outside auditors)

Notes: 1. Includes retirement allowances for retired directors.
2. Directors’ compensation does not include employee salaries for directors who also serve as
employees.
3. There are no outside directors.
(5) Auditor compensation
The company’s independent auditor KPMG AZSA & Co. receives the following compensation.
Compensation for services stipulated in Article 2-1 of the Certiﬁed Public Accountants Law:
Compensation for other services:¥7 million¥30 million

Note: Services other than those stipulated in Article 2-1 of the Certiﬁed Public Accountants Law (non-auditing
services) comprise advisory services for preparing an internal control system for ﬁnancial reporting.

HISAMITSU PHARMACEUTICAL CO., INC

22

ANNUAL REPORT 2008

Corporate Information

23

Corporate Information

Stock Information(1) Total number of shares
1) Total number of shares
Type of shares

Total authorized shares

Ordinary shares

380,000,000

Total

380,000,0002)Shares issued and outstanding
Type of shares

Shares outstanding on
ﬁling date
(May 23, 2008)

Names of listing stock exchanges
or registered securities dealers
associations

Details

95,164,895

95,164,895

Tokyo Stock Exchange(First Section)
Osaka Securities Exchange(First Section)
Nagoya Stock Exchange(First Section)
Fukuoka Stock Exchange

All voting shares, standard
shares with unlimited rights

95,164,895

95,164,895——

Shares outstanding at endFY 2/08
(February 29, 2008)

Ordinary shares

Total(2) Status of share subscription rights
Not applicable.
(3) Details of rights plans
Not applicable.
(4) Changes in shares outstanding, common stock, and other items

Date

Change in shares
outstanding(Shares)

Shares outstanding(Shares)

Change in common
stock(¥ million)

Common stock(¥ million)

July 5, 2002(Note)—

95,164,895

—

8,473

Change in additional Additional paid-in
capitalpaid-in capital(¥ million)(¥ million)−6,123

2,118

Note: The decrease in additional paid-in capital was based on provisions in Article 289-2 of the former
Commercial Code (creditor protection procedures were completed on July 5, 2002).

HISAMITSU PHARMACEUTICAL CO., INC

24

ANNUAL REPORT 2008

Corporate Information(5) Details of shareholders
As of February 29, 2008
Status of shares (investment unit comprises 100 shares)
Category

National
and local
government

Foreign shareholders
Financial
institutions

Securities
companies

Other
corporations

Nonindividuals

Individuals

Individuals
and other

Total

Shares under
one unit(shares)

Shareholders(entities)

—

78

31

177

178

1

6,834

7,299

—

Shares owned(units)—497,675

5,853

139,129

120,64310

187,749

951,059

58,995

Ratio
(%)

—

52.33

0.62

14.63

12.68

0.00

19.74

100.00—Notes: 1. A total of 6,452,258 treasury shares are listed as 64,522 units in the individuals and other column andas 58 shares in the shares under one unit column. The 6,452,258 treasury share ﬁgure is the numberof shares listed in the shareholder registry.
2. The other corporations column includes three units owned under the name of the Japan Securities
Depository Center Inc.

HISAMITSU PHARMACEUTICAL CO., INC

25

ANNUAL REPORT 2008

Corporate Information(6) Principal shareholders
As of February 29, 2008
Name

Address

Percentage ofShares owned
shares outstanding(thou shares)(%)

Nippon Life Insurance Company

1-6-6 Marunouchi, Chiyoda-ku, Tokyo

6,108

6.42

The Master Trust Bank of Japan, Ltd.
(trust account)

2-11-3 Hamamatsu-cho, Minato-ku, Tokyo

5,584

5.87

5,325

5.60

2-2-2 Otemachi, Chiyoda-ku, Tokyo

4,387

4.61

1-8-11 Harumi, Chuo-ku, Tokyo

4,370

4.59

The Bank of Saga, Ltd.

2-7-20 Tojin, Saga

4,356

4.58

Fukuoka Bank

2-13-1 Tenjin, Chuo-ku, Fukuoka

4,201

4.42

Nipponkao Insurance

3-7-3 Kasumigaseki, Chiyoda-ku, Tokyo

2,101

2.21

2,064

2.17

2,056

2.16

40,555

45.62

Japan Trustee Service Bank, Ltd. (trust account) 1-8-11 Harumi, Chuo-ku, Tokyo
The Nomura Trust and Banking Co., Ltd.
(The Bank of Tokyo-Mitsubishi UFJ, Ltd.
pension trust account)
Japan Trustee Service Bank, Ltd.
(Resona Trust & Banking Co., Ltd. retrust
account, The Nishi-Nippon City Bank, Ltd.
pension trust account)

Japan Trustee Service Bank, Ltd.
(The Sumitomo Trust & Banking Co., Ltd. retrust
account, Sumitomo Mitsui Banking Corporation 1-8-11 Harumi, Chuo-ku, Tokyo
pension trust account)
State Street Bank and Trust Company(standing agent: Kabutocho Corporate Banking
and Securities Business Division, Mizuho
Corporate Bank, Ltd.)
Total

6-7 Nihonbashi Kabutocho, Chuo-ku, Tokyo

Notes: 1. The number of the foregoing shares related to ﬁduciary services is as follows.
Japan Trustee Service Bank, Ltd.: 11,759,000 shares
The Master Trust Bank of Japan, Ltd.: 5,584,000 shares
The Nomura Trust and Banking Co., Ltd. 4,387,000 shares
2. In addition to the shares listed above, the company owns 6,452,000 treasury shares (6.78%).

HISAMITSU PHARMACEUTICAL CO., INC

26

ANNUAL REPORT 2008

Corporate Information(7) Status of voting rights
1) Shares issued
As of February 29, 2008
SharesVoting rights

Details

Shares without voting rights

—

—

—

Shares with limited voting rights(treasury shares, etc.)

—

—

—

Shares with limited voting rights(other)———(Treasury shares) Ordinary shares
6,452,200—

Standard shares with unlimited
rights(Cross-held shares) Ordinary shares
63,500—Same as above

Shares with full voting rights (other)

Ordinary shares
88,590,200

885,902

Same as above

Shares less than one unit

Ordinary shares
58,995—Same as above

95,164,895

—

—

—

885,902—

Shares with full voting rights(treasury shares, etc.)

Total shares issued
Total voting rights of shareholders

Note: 1. Ordinary shares in the shares with full voting rights (other) section include 300 shares with three voting
rights held under the name of Japan Securities Depository Center, Inc.
2. The shares with less than one unit section includes 58 treasury shares held by the company.

HISAMITSU PHARMACEUTICAL CO., INC

27

ANNUAL REPORT 2008

Corporate Information

2) Treasury shares and cross-held shares
As of February 29, 2008
Shares held under thename of others

Total shares held

6,452,200—

6,452,200

6.78

892-1 Hikata Ogori-shi,
Fukuoka

23,00040,50063,5000.07—

6,475,200

40,5006,515,700

6.85

Address(Treasury shares)
408 Tashiro DaikanHisamitsu
machi, Tosu-shi Saga
Pharmaceutical Co., Ltd.
(Cross-held shares)
Maruto Co., Ltd.

Ratio to shares
outstanding (%)

Shares held under own
nameShareholders

Total

Note: 1. Ordinary shares in the shares with full voting rights (other) section include 300 shares with three voting
rights held under the name of Japan Securities Depository Center, Inc.
2. Reason for holding shares under the name of others
ReasonJointly held shares in shareholding
company

Name

Address

Hisamitsu Pharmaceutical Torihikisaki
Mochikabukai

Tashiro Daikan-machi, Tosu-shi Saga

(8) Stock option plans
Not applicable.

HISAMITSU PHARMACEUTICAL CO., INC

28

ANNUAL REPORT 2008

Corporate Information

Acquisition of Treasury Shares(1) Acquisition based on a resolution by the general meeting of shareholders
Not applicable.
(2) Acquisition based on a resolution by the board of directors
Not applicable.
(3) Acquisition not based on a resolution by the general meeting of shareholders or the board of directors
SharesTotal value (¥)

Treasury shares acquired during FY 2/08

2,524

8,535,520

Treasury shares acquired during FY 2/09

224

846,640

Note: Treasury shares acquired during FY 2/09 do not include shares acquired for less than one unit between
May 1, 2008 and the ﬁling date of this annual securities report.
(4) Treatment and holding of acquired treasury shares
FY 2/08

FY 2/09

SharesTotal amount(¥ thousand)SharesTotal amount(¥ thousand)Acquired treasury shares that were offered to subscribers

—

—

—

—

Acquired treasury shares that were retired

—

—

—

—

Acquired treasury shares that were transferred in relation to merger, share exchange,or corporate separation

—

—

—

—

Other

—

—

—

—

6,452,258—

6,452,482—

Held treasury shares

Note: Treasury shares held during FY 2/09 do not include shares acquired for less than one unit between May
1, 2008 and the ﬁling date of this annual securities report.

HISAMITSU PHARMACEUTICAL CO., INC

29

ANNUAL REPORT 2008

Financial Section

Note: Amounts in US dollars are included solely for convenience and are translated at a rate of ¥104.78=U.S.$1.00, the approximate rate of exchange on February 29, 2008.

30

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

Consolidated Balance Sheets(Millions of yen)
Fiscal 2007
Fiscal 2008
(to February 29, 2007)
Value(Thousands of U.S. dollars)
Fiscal 2008

(Assets)
I Current assets
Cash and deposits¥ 29,817¥ 36,129$ 344,808

Trade notes and accounts

28,38631,307

298,788

Marketable securities

3,111

2,332

22,266Inventories

8,931

8,635

82,420

Deferred tax assets

1,251

1,345

12,846

Others

1,123

909

8,675

Allowance for doubtful accounts

(156)

(171)

(1,632)

Total current assets

72,46680,488

768,717

Buildings and structures (Note 2,3)

13,445

16,668159,076

Machinery, equipment and vehicles (Note 2)

11,354

11,374

108,551

II Fixed assets
1 Property, plant and equipment

Tools, furniture and ﬁxtures (Note 2)

5,424

3,181

30,369Land (Note 4)

38,49740,299384,615

Goodwill

6,331

4,216

40,237

Software

51

38

372

Others21

1,209

11,538

6,403

5,464

52,147

Investment securities (Note 1)

17,935

14,872

141,945

Long-term loans receivable

855

512

4,896

Prepaid pension expenses

2,877

3,853

36,772

Construction in progress
Tangible ﬁxed assets total
2 Intangible assets

Total intangible assets
3 Investments and other assets

Deferred tax assets
Others—2,154

20,567

2,271

2,263

21,598

Allowance for doubtful accounts

(164)

(159)

(1,517)

Total investments and other assets

23,77523,497224,261

Total ﬁxed assets
Total assets

HISAMITSU PHARMACEUTICAL CO., INC

31

68,676

69,262

661,023¥ 141,143¥ 149,750$ 1,429,194

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)(Millions of yen)
Fiscal 2007
Fiscal 2008
(to February 29, 2007)
Value(Thousands of U.S. dollars)
Fiscal 2008

(Liabilities)
I Current liabilities
Trade notes and accounts¥ 9,004¥ 9,933$ 94,808

Short-term borrowings (Note 2)

3,467

1,038

9,906

Accounts payable

9,254

7,699

73,478

Income taxes payable

4,530

6,980

66,625

Allowance for sales returns

167

157

1,498

Provision for bonuses

688

808

7,721

Others

805

988

9,430

27,91927,606

263,466

1,058

842

8,036

415

-

-

Total current liabilities
II Long-term liabilities
Long-term borrowings (Note 2)
Deferred tax liabilities
Deferred tax liabilities on revaluation (Note 4)

2,164

2,164

20,653

Employees’ severance and retirement beneﬁts

4,384

4,071

38,853

Directors’ and corporate auditors’ retirement beneﬁts

1,166

1,102

10,517

Consolidated adjustments account

—

—

—

Negative goodwill

23

—

—

45

35

343

Total long-term liabilities

Others

9,257

8,215

78,402

Total liabilities

37,17635,821

341,868

Common stock

8,473

8,473

80,874

Capital surplus

8,376

8,396

80,130I Shareholders’ equity

Retained earnings

92,137106,010

1,011,739

Treasury stock(12,501)(12,504)(119,336)

96,486110,376

1,053,407

Valuation adjustment on other marketable securities

4,248

326

3,121

Land revaluation adjustment (Note 4)

3,188

3,188

30,425

Foreign currency translation adjustments

(692)

(712)

(6,795)

Total valuation and translation adjustments etc.

6,744

2,803

26,751

III Minority interests

735

750

7,158

Total shareholders’ equity
II Valuation and translation adjustments

Total net assets
Total liabilities and net assets

HISAMITSU PHARMACEUTICAL CO., INC

32

103,966

113,929

1,087,316¥ 141,143¥ 149,750$ 1,429,194

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

Consolidated Statements of Income(Millions of yen)(Thousands of U.S. dollars)
Fiscal 2007
Fiscal 2008
Fiscal 2008
(March 1, 2007 to February 29, 2008)
Value¥ 109,791¥ 119,061$ 1,136,305

II Cost of sales (Note 2, 3)

32,90336,101

344,541

Gross proﬁt

76,88882,960791,764

III Selling, general and administrative expenses (Note 1, 2)

50,75453,888514,306

Operating income

26,13429,071

277,458

1,034

1,422

13,571

Interest expenses

21

210

Foreign exchange losses

90

868

Equity in losses of afﬁliated companies——

I Net sales

IV Non-operating income
Interest received
Dividend income
Foreign exchange gains
Amortization of consolidated adjustment account
Amortization of negative goodwill
Equity in earnings of afﬁliated companies
Sales compensasion
Development license revenues
Other
V Non-operating expenses

45

429

167

130

1,241

27,00130,204

288,271

42

707

6,748

Others

1,125

705

6,729

Net income

25,91730,206288,290

10,058

11,477

109,544

11

66

630

¥ 15,847¥ 18,663$ 178,116

Loss on sales of receivables
OthersRecurring income
Gain on sales of ﬁxed assets (Note 4)
Government subsidies
Reversal of allowance for doubtful accounts
Gain on return of welfare pension fund substitutional portion
OthersVII Extraordinary losses
Loss on disposals of ﬁxed assets (Note 5)
Asset impairment losses (Note 6)
Loss on liquidation of afﬁliates
Loss on sales of investment securities
Book loss on investment securities
Additional severance beneﬁts

Corporate, other taxes
Income taxes: deferred
Minority interests (deduction)
Net income

HISAMITSU PHARMACEUTICAL CO., INC

33

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

Consolidated Statements of Shareholders’ Equity(Millions of yen)
Fiscal 2007
Fiscal 2008
(to February 29, 2007)
Value(Thousands of U.S. dollars)
Fiscal 2008

(Net assets)
I Shareholders’ equity
Common stock¥ 8,473¥ 8,473$ 80,874

Capital surplus

8,376

8,396

80,130Retained earnings

92,137106,010

1,011,739

Treasury stock(12,501)(12,504)(119,336)

96,486110,376

1,053,407

Total shareholders’ equity
II Valuation and translation adjustments
Valuation adjustment on other marketable securities

4,248

326

3,121

Land revaluation adjustment (Note 4)

3,188

3,188

30,425

Foreign currency translation adjustments

(692)

(712)

(6,795)

Total valuation and translation adjustments etc.

6,744

2,803

26,751

III Minority interests
Total net assets
Total liabilities and net assets

HISAMITSU PHARMACEUTICAL CO., INC

34

735

750

7,158

103,966

113,929

1,087,316¥ 141,143¥ 149,750$ 1,429,194

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

Consolidated Statements of Cash Flows(Millions of yen)(Thousands of U.S. dollars)
Fiscal 2007
Fiscal 2008
Fiscal 2008
(March 1, 2007 to February 29, 2008)
Value
I Cash ﬂows from operating activities
Income before income taxes¥ 25,917¥ 30,206$ 288,290

Depreciation and amortization

3,118

3,429

32,726

Asset impairment losses

154

292

2,787

Amortization of goodwill

2,129

2,114

20,185

Amortization of negative goodwil

(23)

(24)

(229)

Reduction in provision for employees’ severance and retirement beneﬁts

(157)

(306)

(2,930)

Increase in provision for corporate ofﬁcers’ retirement beneﬁts

87

(64)

(611)

Increase in provision for bonuses

75

120

1,145

(156)

9

95

Reduction in provision for doubtful accounts
Reduction in provision for sales returns

(52)

(10)

(105)

Interest and dividend income

(192)

(323)

(3,092)

Interest expenses

41

21

210

Foreign currency gains

(31)

92

868

Equity in losses of afﬁliated companies (Negative sign denotes earnings)

0

(264)

(2,529)Loss on disposal of shares in afﬁliates

—

5

48

Losses on sales of investment securities

116

130

1,241

Book loss on investment securities

—

22

210

Losses on sales of ﬁxed assets

346

—

—

Loss on disposal of ﬁxed assets

—

121

1,155

Additional severance beneﬁts

506

133

1,269

(4,519)(2,916)(27,830)

Increase in inventories

(391)

279

2,672

Increase in other current assets

(453)

178

1,708

Contributions in kind

634

621

5,927

Increase in notes and accounts payable (Negative sign denotes decrease)(1,145)

946

9,028

Increase in other current liabilities (Negative sign denotes decrease)(2,041)

750

7,167

Bonuses paid to corporate ofﬁcers

(59)

—

—

Others240(820)(7,826)

Increase in notes and accounts receivable

24,14334,745

331,609

Interest and dividends received

Subtotal

189

316

3,016

Interest paid

(34)

(21)

(210)

Additional severance beneﬁts

(506)

(133)

(1,279)

Income taxes paid
Cash ﬂows from operating activities

HISAMITSU PHARMACEUTICAL CO., INC

35(11,563)(9,184)(87,650)¥ 12,228¥ 25,722$ 245,486

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)(Millions of yen)(Thousands of U.S. dollars)
Fiscal 2007
Fiscal 2008
Fiscal 2008
(March 1, 2007 to February 29, 2008)
Value
II Cash ﬂows from investing activities
Outﬂow resulting from change in balance of term deposits¥ (2,353)¥ (569)$ (5,440)(5,638)(8,365)(79,843)

Proceeds from sales of tangible ﬁxed assets

34

0

0

Payments for purchases of ﬁxed intangible assets(3)(1,197)(11,424)

Proceeds from sales of ﬁxed intangible assets

49

—

—

Payments for purchases of marketable securities(6,340)(7,074)(67,522)

Proceeds from sales and redemptions of marketable securities

5,579

8,291

79,128

Payments for purchases of investment securities(3,314)(3,546)(33,842)

Proceeds from sales and redemptions of investment securities

55

170

1,632

Outﬂow from loans extended

(10)

(16)

(153)

Proceeds from loan repayments

129

396

3,788

Sales of shares in subsidiaries associated with change in scope of consolidation

6

—

—

Outﬂow on purchases of shares in subsidiaries

—

0

0

(11,804)(11,911)(113,676)

Inﬂow (Negative sign denotes outﬂow) from change in short-term borrowings

170

(27)

(258)

Proceeds from long-term borrowings

185

59

573

Payments for purchases of tangible ﬁxed assets

Cash ﬂows from investing activities
III Cash ﬂows from ﬁnancing activities

Outﬂow from repayments of long-term borrowings(5,200)(2,677)(25,558)

Dividend payments to minority investors

(35)

(34)

(334)

Outﬂow from purchases of treasury stock

(9)

(8)

(86)

(4,689)(4,790)(45,715)(9,580)(7,479)(71,378)

43

(135)

(1,299)(9,112)

6,196

59,133

Cash dividends paid
Cash ﬂows from ﬁnancing activities
IV Translation adjustment cash & equivalents
V Increase in cash and cash equivalents (Negative sign denotes decrease)
VI Balance of cash and cash equivalents at beginning of year
VII Balance of cash and cash equivalents at end of year

HISAMITSU PHARMACEUTICAL CO., INC

36

35,623

26,510253,016¥ 26,510¥ 32,706$ 312,149

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

Consolidated Financial Statements
1. Basis of preparation of consolidated ﬁnancial statements(1) The company has prepared consolidated ﬁnancial statements in accordance with the Regulations Concerning the
Terminology, Forms and Preparation Methods of Consolidated Financial Statements (Ministry of Finance Ordinance No.
28, 1976; hereinafter, Regulations for Consolidated Financial Statements).
However, the consolidated ﬁnancial statements for FY 2/07 (March 1, 2006 – February 28, 2007) were prepared basedon the Regulations for Consolidated Financial Statements prior to revision, whereas the consolidated ﬁnancial statements
for FY 2/08 (March 1, 2007 – February 29, 2008) were prepared based on the Regulations for Consolidated Financial
Statements after revision.
(2) The company has prepared non-consolidated ﬁnancial statements in accordance with the Regulations Concerning the
Terminology, Forms and Preparation Methods of Non-Consolidated Financial Statements (Ministry of Finance Ordinance
No. 59, 1963; hereinafter, Regulations for Non-Consolidated Financial Statements).
However, the non-consolidated ﬁnancial statements for FY 2/07 (March 1, 2006 – February 28, 2007) were preparedbased on the Regulations for Non-Consolidated Financial Statements prior to revision, whereas the non-consolidated
ﬁnancial statements for FY 2/08 (March 1, 2007 – February 29, 2008) were prepared based on the Regulations for NonConsolidated Financial Statements after revision.
I.Scope of consolidation(a) Consolidated subsidiaries: 10
Names of consolidated subsidiaries
Taiyo Co., Ltd
Kyudo Co., Ltd
Saga City-Vision Co., Ltd.
CRCC Media Co., Ltd.
Hisamitsu Agency Co., Ltd.
Hisamitsu America, Inc.
Hisamitsu Farmaceutica do Brasil Ltda.
Hisamitsu Vietnam Pharmaceutical Co., Ltd.
Hisamitsu UK Ltd.
P.T. Hisamitsu Pharma Indonesia
Hisamitsu Pharmaceutical Co., Inc. merged Hisamitsu Medical Co., Ltd. on April 1, 2007.

HISAMITSU PHARMACEUTICAL CO., INC

37

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)(b). Non-consolidated subsidiaries: 2
Names of non-consolidated subsidiaries
Kokusai Pappu-zai Kenkyusho Co., Ltd.
Taiyo Kaihatsu Co., Ltd.
The liquidation of RRF Kenkyusho Co., Ltd. was completed in ﬁscal 2008.
(Reason why non-consolidated subsidiaries have been excluded from the scope of consolidation)
Non-consolidated subsidiaries have been excluded from the scope of consolidation because they are small, and neither
their total assets, net sales, net income (proportion attributable to Group) nor retained earnings (proportion attributable toGroup) would have a material impact on the consolidated ﬁnancial statements.
II. Afﬁliates accounted for under the equity method(a). Equity-method non-consolidated subsidiaries: 0(b). Equity-method afﬁliates: 2
Taiwan Hisamitsu Pharmaceutical Co., Ltd.
Maruto Co., Ltd.
(Reason why non-consolidated subsidiaries have not been accounted for under the equity method)
The above non-consolidated subsidiaries have not been accounted for under the equity method because their impacts
on items such as net income and retained earnings is negligible, and is not material in the context of the total.
There are no afﬁliated companies for which the equity method is not being used.
III. Fiscal years of consolidated subsidiaries
The following consolidated subsidiaries have ﬁscal year-end dates that differ from consolidated accounts.
Company Year-end dateHisamitsu America, Inc.

December 31

Hisamitsu Farmaceutica do Brasil Ltda.

December 31

Hisamitsu Vietnam Pharmaceutical Co., Ltd.

December 31

Hisamitsu UK Ltd.

December 31

P.T. Hisamitsu Pharma Indonesia

December 31

Since for the above consolidated subsidiaries the difference from the term end used in the consolidated accounts does
not exceed three months, the ﬁnancial statements of these consolidated subsidiaries as at their term ends have been
used.

HISAMITSU PHARMACEUTICAL CO., INC

38

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

In any case where an important transaction has occurred between the term ends of these subsidiaries and the term endof the consolidated accounts, the necessary consolidation adjustments have been made.
IV. Accounting standards
A. Valuation standards and methods for signiﬁcant assets
1. Securitiesa) Held-to-maturity bonds
Valued under amortized cost method.
b) Other marketable securities
1) Securities with market value
Valued at market price, using the market price at the balance sheet date.
All valuation differences are directly charged or credited to shareholders’ equity, and costs of securities sold arecomputed using the moving average method.
2) Securities without market value
Valued at cost, determined by the moving average method.
2. Inventoriesa) Merchandise and ﬁnished products
Valued at cost, mainly using the period average method.
b) Raw materials, work in progress and supplies
At cost, mainly using the ﬁrst-in ﬁrst-out method.
(Change in accounting method)
Inventories were previously valued at cost using the ﬁrst-in ﬁrst-out method, but from the ﬁscal term under review, thecompanies’ merchandise and ﬁnished goods have been valued at cost using the period average method. This change
has been made along with the introduction of a new accounting system as part of a company-wide review of thebusiness, and is intended to accelerate the calculation of payments and receipts, and to enable management to grasp
period proﬁts and losses more quickly. The monetary effect of this change is minimal.

HISAMITSU PHARMACEUTICAL CO., INC

39

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

B. Depreciation methods for signiﬁcant depreciable assets
1. Property, plant and equipmenta) Company and domestic consolidated subsidiaries(1) Acquired before March 31, 2007
Mainly the former declining balance method.
(2) Acquired after April 1, 2007
Mainly the declining balance method.
(Change in accounting method)
Changed to the method prescribed in the revised Corporation Tax Law for assets acquired after April 1, 2007 as aresult of revisions of the Corporation Tax Law (Law Amending the Income Tax Law, March 30, 2007, Law No. 6 andOrdinance Amending the Income Tax Law Enforcement Ordinance, March 30, 2007, Ordinance No. 83). This change
has a negligible impact on income.
b) Overseas consolidated subsidiaries
Mainly straight-line method.
2. Intangible ﬁxed assets and long-term prepaid expenses
Amortized using the straight line method
For usable lives, the same criteria as those stipulated in the Corporation Tax Law are used. Goodwill is amortized on astraight-line basis over 5 years.
Within intangible ﬁxed assets, software used by the Company is depreciated over its useful life (5 years) using the straightline method.
C. Standards for signiﬁcant reserves and allowances
1. Allowance for doubtful accounts
In order to provide against losses from doubtful receivables, estimated irrecoverable amounts are recorded as a provision.
a) General receivables
Based on historical bad debt experience.
b) Receivables at risk of default and in bankruptcy reorganization
Based on an assessment of the ﬁnancial position.
2. Allowance for sales returns
In order to provide against losses from product returns after the balance sheet date, the company makes a provision up to
the maximum amount allowed under the Corporation Tax Law.

HISAMITSU PHARMACEUTICAL CO., INC

40

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

3. Bonus reserve
To provide for the payment of bonuses to employees, the Company and its domestic subsidiaries record a provision equal
to the portion of expected future bonus payments incurred during the term under review.
4. Allowance for employee retirement beneﬁts
The company and certain subsidiaries, to prepare for the payment of retirement beneﬁts to employees, provide a reserveat an amount based on estimated retirement beneﬁt obligations and pension assets at the end of the consolidated ﬁscal
year.
Actuarial differences are amortized starting in the next consolidated ﬁscal year in equal amounts for a ﬁxed number ofyears (ﬁve years) that is less than the average remaining years of service of employees when incurred. Prior service costs
are amortized in equal amounts for a ﬁxed number of years (two years) that is less than the average remaining years ofservice of employees when incurred.
5. Allowance for directors and statutory auditors retirement beneﬁts
The company makes a provision for estimated retirement payments to directors and statutory auditors in accordance with
its internal regulations.
D. Translation of signiﬁcant foreign currency denominated assets and liabilities used in preparing the ﬁnancial
statements of consolidated companies on which the consolidated ﬁnancial statements are based
Assets and liabilities denominated in foreign currencies are translated into yen using the spot exchange rate for ﬁnal dayof the ﬁscal year, and translation differences are booked as gains or losses. Note that the assets and liabilities of overseas
subsidiaries and other like entities are translated into yen using the spot exchange rate for ﬁnal day of the ﬁscal year, while
revenues and expenses are translated using the average exchange rate for the period, and these translation differences
are booked on the Foreign Currency Translation Adjustments line under Net Assets.
E. Treatment of signiﬁcant lease transactions
With the exception of ﬁnance leases in which ownership of the leased assets is deemed to have passed to the lessee,
leases are accounted for as operating lease transactions.
F. Other signiﬁcant accounting policies used in the preparation of the consolidated ﬁnancial statements
Treatment of Consumption Tax etc.
The accounts are prepared excluding Consumption Tax and Local Consumption Tax.
V. Valuation of assets and liabilities of consolidated subsidiaries
Assets and liabilities of consolidated subsidiaries are valued using the full market value method.

HISAMITSU PHARMACEUTICAL CO., INC

41

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

VI. Amortization of consolidation adjustments account
The consolidation adjustments account is amortized on a straight-line basis over 5 years. However, where sums are small,they are expensed in full in the term in which they are incurred.
VII. Note concerning treatment of income appropriation items.
Income appropriations in the consolidated statements of retained earnings are based on ﬁnalized income appropriations
during the term.
VIII. Scope of funds in the Consolidated Statements of Cash Flows
Funds (cash & cash equivalents) in the Consolidated Statements of Cash Flows consist of cash in hand, demand deposits
and easily realizable short-term investments with high liquidity and maturity dates not more than 3 months from the date ofpurchase, and which carry negligible risks of price ﬂuctuation.

Changes In Accounting Policies
In the previous ﬁscal term, “Losses on sales of ﬁxed assets” were included in the “Other” portion of cash ﬂows fromoperating activities but because the monetary signiﬁcance of this item has increased, from the ﬁscal term under review it isshown separately. “Losses on sales of ﬁxed assets” in the previous ﬁscal term were ¥70 million.
In the previous ﬁscal term, “Contributions in kind” were included in the “Other” portion of cash ﬂows from operating
activities but because the monetary signiﬁcance of this item has increased, from the ﬁscal term under review it is shown
separately. “Contributions in kind” in the previous ﬁscal term were ¥616 million.
Consolidated income statement
Royalty income is listed as a separate category starting in ﬁscal 2008 because it accounted for more than 10% of nonoperating income. Royalty income of ¥133 million was listed in the Other category in ﬁscal 2007.
Losses on the sale of accounts receivable is listed as a separate category starting in ﬁscal 2008 because it accounted
for more than 10% of non-operating expenses. Losses on the sale of accounts receivable of ¥36 million was listed in the
Other category in ﬁscal 2007.

HISAMITSU PHARMACEUTICAL CO., INC

42

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

Additional Information
CONSOLIDATED BALANCE SHEETS*1 Investment securities for non-consolidated subsidiaries and afﬁliated companies are as follows.
(Millions of yen)
Investment securities (stocks)¥1,536*2 Assets pledged as collateral are as follows.
(Pledged assets)
Buildings and structures¥ 858(book value)

Machinery, equipment, and vehicles¥ 68(book value)

Tools, furniture, and ﬁxtures¥ 146(book value)¥ 1,072(book value)

Buildings and structures¥ 538(book value)

Machinery, equipment, and vehicles¥ 13(book value)

Tools, furniture, and ﬁxtures¥ 145(book value)¥ 696(book value)

Total
Assets provided for factory foundation mortgage

Total(Millions of yen)
Liabilities related to the above assets
Short-term borrowings¥ 125(book value)

Long-term borrowings¥ 725(book value)

Total

¥ 850

(book value)

Liabilities provided for factory foundation mortgage
Short-term borrowings¥ 61

Long-term borrowings

¥ 333

Total

¥ 395

*3 Accelerated depreciation from government subsidies is ¥823 million. This ﬁgure is not included in the consolidatedbalance sheets.
*4 Application of the Land Revaluation Law
Land used for business purposes has been revalued in accordance with the “Act on revaluation of land” (Law 34 of 1998,
promulgated on 31 March 1998) and the “Law Partially Amending the Act on Revaluation of Land” (revision of 31 March
1999). The portion of the revaluation gain equivalent to corporation tax and other taxes with tax bases linked to corporate
proﬁts has been recorded under liabilities as “Deferred tax liability related to revaluation,” while the net sum after thistransfer to the deferred tax liability account is recorded under net assets as “Land revaluation adjustment”

HISAMITSU PHARMACEUTICAL CO., INC

43

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

Revaluation method
The land value used as the basis for calculation of the tax base under the Land Value Tax, stipulated in Article 16 of theLand Value Tax Law (Law No. 69 of 1991), has been calculated by making rational adjustments to the price calculated by
the method determined and publicly announced by the Commissioner of the National Tax Agency, as stipulated in Article
2.4 of the “Regulations for Applying the Land Revaluation Law” (Government Ordinance No. 119 of 1998, promulgated 31
March 1998).
Revaluation dateFebruary 28, 2001

The market value of commercial land revalued in accordance with Article 10 of the Land Revaluation Law at the end of ﬁscal
2008 was ¥1,972 million lower than the book value after revaluation.
CONSOLIDATED INCOME STATEMENT*1 Main selling, general, and administrative expense items and amounts are as follows.
(Millions of yen)
Advertising expenses¥ 9,595

Sales promotion expenses¥ 11,838

Packing and transportation expenses¥ 2,444

Addition to allowance for doubtful accounts¥ 21

Salaries and allowances¥ 5,148

Addition to bonus reserve¥ 485

Addition to allowance for employee retirement beneﬁts¥ (23)

Addition to allowance for executive retirement beneﬁts¥ 149

Goodwill amortization¥ 2,114

Research and development expenses¥ 11,234

Addition to bonus reserve¥ 139

Addition to allowance for employee retirement beneﬁts¥ (7)The addition to the allowance for employee retirement beneﬁts is a negative ﬁgure because expected investment returns
and actuarial gains were higher than service costs and interest costs.
General and administrative expenses include research and development expenses of ¥11,234 million. Manufacturingcosts do not include research and development expenses.
*3 Manufacturing costs include an addition to the bonus reserve of ¥181 million and an addition to the allowance for
employee retirement beneﬁts of −¥12 million.

HISAMITSU PHARMACEUTICAL CO., INC

44

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)*4 Breakdown of losses on the disposal of ﬁxed assets(Loss on retirement)(Millions of yen)

Buildings and structures¥ 64

Machinery, equipment, and vehicles¥ 19

Tools, furniture, and ﬁxtures

¥ 37

Total

¥ 121

*5 The group recorded the following asset impairment losses in ﬁscal 2008. (Millions of yen)
Use

Type

Location

Amount (¥m)

Idle assets

Buildings

Tsukuba, Ibaraki

292

Total

292

The group categorizes its assets into commercial assets, leased assets, and idle assets.
The company recorded impairment losses on the foregoing idle assets because it has no plans to use these assets andtheir recoverable value has fallen signiﬁcantly.
Recoverable value is assessed using net sales value based on a reasonable estimate.
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY
1. Shares outstanding
Type of shares

End of ﬁscal 2006

Ordinary shares

95,164,895

Increase

Decrease

End of ﬁscal 2007
95,164,895

2. Treasury shares
Type of shares End of ﬁscal 2006 Increase
Type of shares

End of ﬁscal 2006

Increase

Decrease

End of ﬁscal 2007

Ordinary shares

6,499,980

14,20031,716

6,482,464

Reasons for changes
Shares increased for the following main reasons
Increase from purchasing shares in less than one unit
Company portion of treasury shares purchased by equity method afﬁliates
Shares decreased for the following main reasons
Company portion of treasury shares sold by equity method afﬁliates

HISAMITSU PHARMACEUTICAL CO., INC

45

2,729 shares
11,471 shares
31,716 shares

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

3. Dividends(1) Dividends paid
Resolution

Type of shares

Total dividends(¥ million)

Dividends per share (¥)

Record date

Payment date

May 25, 2006
Annual general meeting ofshareholders

Ordinary shares

2,838

32

February 28, 2006

May 26, 2006

October 11, 2006
Board of Directors meeting

Ordinary shares

1,863

21

August 31, 2006

November 7, 2006

(2) Dividends with a record date in ﬁscal 2007 but a payment date in ﬁscal 2008
Resolution

Type of shares

Source of dividend

Total dividends(¥ million)

Dividends per share(¥)

Record date

Payment date

May 24, 2007
Annual general meeting ofshareholders

Ordinary shares

Retained earnings

2,129

24

February 28, 2008

May 25, 2007

CONSOLIDATED CASH FLOW STATEMENT*1 Relationship between year-end balances of cash and cash equivalents and amounts stated in the consolidatedbalance sheets(Millions of yen)
Cash and deposits
Securities
Total
Term deposits longer than three months¥ 36,129¥ 2,332¥ 38,461¥ (3,973)

Securities with maturities longer than three months
Cash and cash equivalents¥ (1,781)¥ 32,706

HISAMITSU PHARMACEUTICAL CO., INC

46

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

LEASE TRANSACTIONS
Lease transactions other than ﬁnance leases in which ownership of the leased asset is deemed to have passed to thelessee1. Equivalent purchase value, equivalent accumulated depreciation, and equivalent year-end residual value ofleased assets(Millions of yen)
Purchase value equivalent(¥ million)

Accumulated depreciation equivalent(¥ million)

Year-end balance at equivalent(¥ million)

Machinery, equipment and vehicles

¥ 233

¥ 171

¥ 62

Tools, furniture, and ﬁxtures

1,328

627

700

Software
Total

58

26

31

¥ 1,620

¥ 825

¥ 794

2. Equivalent year-end balance of remaining lease payments(Millions of yen)
Within one year

¥ 230

Over one year

¥ 564

Total

¥ 794

3. Lease payments and equivalent depreciation(Millions of yen)
Lease payments¥ 293

Equivalent depreciation¥ 293

4. Method of calculating equivalent depreciation

HISAMITSU PHARMACEUTICAL CO., INC

47

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

SECURITIES
1. Held-to-maturity bonds with market value(Millions of yen)
Fiscal 2007 (February 28, 2007)
Consolidatedbalance sheetsvalue

Market value

Fiscal 2008 (February 29, 2008)

Difference

Consolidatedbalance sheetsvalue

Market value

DifferenceMarket value higher than on consolidated balance sheets(1) National and local government bonds, etc.

¥—

¥—

¥—

¥—

¥—

¥—

(2) Corporate bonds

—

—

—

—

—

—

(3) Other

898

898

0

—

—

—

Subtotal

898

898

0

—

—

—

Market value lower than on consolidated balance sheets(1) National and local government bonds, etc.
(2) Corporate bonds

—

—

—

—

—

—

1,499

1,496

(3)

199

199

(0)

(3) Other

—

—

—

—

—

—

Subtotal

1,499

1,496

(3)

199

199

(0)

¥ 2,397¥ 2,395

¥ (2)

¥ 199

¥ 199

¥ (0)

Total

2. Other securities with market value(Millions of yen)
Fiscal 2007 (February 28, 2007)

Fiscal 2008 (February 29, 2008)

Acquisition cost

Consolidatedbalance sheets
value

Difference

Acquisition cost

Consolidatedbalance sheets
value

Difference(1) Stocks¥ 7,668¥ 14,774¥ 7,106¥ 4,206¥ 6,101¥ 1,894(2) Bonds

—

—

—

—

—

—

(3) Other

—

—

—

—

—

—

Subtotal

7,668

14,774

7,106

4,206

6,101

1,894

Acquisition cost higher than on consolidated balance sheets

Acquisition cost lower than on consolidated balance sheets(1) Stocks¥ 1,580¥ 1,455¥ (124)¥ 8,218¥ 6,838¥ (1,379)(2) Bonds

—

—

—

—

—

—

(3) Other

—

—

—

—

—

—

Subtotal
Total

HISAMITSU PHARMACEUTICAL CO., INC

1,580

1,455

(124)

8,218

6,838

(1,379)¥ 9,248¥ 16,230¥ 6,982¥ 12,425¥ 12,939

¥ 514

48

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

3. Main securities without market value(Millions of yen)
Details

Fiscal 2007 (February 28, 2007)

Fiscal 2008 (February 29, 2008)

Consolidated balance sheets value

Consolidated balance sheets value

Other securities
¥ 364

¥ 396

(2) Free ﬁnancial funds, etc.

——

(3) Trust beneﬁciary certiﬁcates, etc.

600

2,080

Total

964

2,476

53

48

(1) Unlisted stocks

Stock in subsidiaries and afﬁliated companies(1) Stock in subsidiaries(2) Stock in afﬁliated companies
Total

1,286

1,488

¥ 1,340¥ 1,536

4. Held-to-maturity bonds to be redeemed after the balance sheet dateFiscal 2007 (March 1, 2006 – February 28, 2007)
Within one year(¥ million)

One to ﬁve years(¥ million)

Five to 10 years(¥ million)

Over 10 years(¥ million)(1) Corporate bonds

1,499

—

—

—

(2) Other

898

—

—

—

Within one year(¥ million)

One to ﬁve years(¥ million)

Five to 10 years(¥ million)

Over 10 years(¥ million)(1) Corporate bonds

200

—

—

—

(2) Other

—

—

—

—

Fiscal 2008 (March 1, 2007 – February 29, 2008)

HISAMITSU PHARMACEUTICAL CO., INC

49

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

DERIVATIVE TRANSACTIONS
1. Transaction information
1) Transaction details and reason for use
The Group uses interest rate swap transactions to avoid risks of future ﬂuctuations in interest rates. The Group also uses
forward foreign exchange transactions in connection with foreign currency-denominated transactions, to avoid risks of future ﬂuctuations in foreign exchange rates.
2) Transaction policies
Foreign currency-related derivative transactions are undertaken in connection with foreign currency transactions to hedge
against risks of ﬂuctuations in foreign exchange rates. Forward foreign exchange transactions are used only up to the valueof the transactions to which they relate, or less.
Interest rate-related derivative transactions are undertaken in connection with interest on corporate bonds to avoid risks
of interest rate ﬂuctuations. Interest rate swap transactions are used only up to the value of the bond interest payments towhich they relate, or less. Interest rate swap transactions and interest rate swaption transactions are also used to avoid
risks of future rises in interest rates on borrowings, only up to the value of the expected interest payments to which they
relate, or less.
The Group’s policy is not to engage in derivative transactions for speculative purposes.
3) Transaction risks
All forward foreign currency transactions, interest rate swap transactions, and interest rate swaption transactions enteredinto by the corporate group relate to actual demand, and because all counterparties in derivatives transactions are Japanese banks with strong credit standing, we consider the so-called credit risk - i.e. risk that counterparties will default ontransactions – to be minimal.
4) Transaction risk management
Execution and administration of the corporate group’s derivatives transactions are undertaken by the Finance Department
after authorization by the Board of Directors or the General Manager of the Finance Department, depending on the importance of the transaction, and details are appropriately reported to the Board of Directors.
2. Transaction market value, etc.
Fiscal 2007 (March 1, 2006 – February 28, 2007)
No relevant transactions during ﬁscal 2007.
Fiscal 2008 (March 1, 2007 – February 29, 2008)
No relevant transactions during ﬁscal 2008.

HISAMITSU PHARMACEUTICAL CO., INC

50

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

RETIREMENT BENEFITS
Fiscal 2008 (March 1, 2007 – February 29, 2008)
1. Overview of retirement beneﬁt plans
Corporate pension plan:
The company previously used the Hisamitsu Pharmaceutical Welfare Pension Plan to cover a portion of retirement beneﬁts
starting on July 1, 1995, but it switched to the Hisamitsu Pharmaceutical Corporate Pension Plan on July 1, 2005.
The company previously used a qualiﬁed pension plan to augment its retirement beneﬁt plans from March 1, 1966, but
this plan was terminated on April 1, 2007 and integrated into the corporate pension plan
Lump sum retirement allowance:
The company and domestic consolidated subsidiaries provide lump sum retirement allowances based on retirement beneﬁtregulations. In some cases, employees may receive an additional retirement allowance upon retirement.
2. Retirement beneﬁt obligations(Millions of yen)
(1) Retirement beneﬁt obligations¥ (10,157)(2) Pension assets¥10,525(3) Subtotal (1) + (2)¥368(4) Unrecognized prior service costs¥114(5) Unrecognized actuarial differences¥ (701)(6) Total (3) + (4) + (5)¥ (218)(7) Prepaid pension costs¥ (3,853)(8) Allowance for employee retirement beneﬁts (6) + (7)¥ (4,071)

3. Retirement beneﬁt costs(Millions of yen)
(1) Service costs¥461(2) Interest costs¥195(3) Expected return on plan assets¥ (323)(4) Amortization of actuarial differences¥ (368)(5) Amortization of prior service costs¥ (701)(6) Retirement beneﬁt costs¥ (736)

Notes: 1. Excludes employee contributions to the corporate pension plan and qualiﬁed pension plan.
2. Retirement beneﬁt costs at consolidated subsidiaries using the simpliﬁed method are recorded under(1) Service costs.

HISAMITSU PHARMACEUTICAL CO., INC

51

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

4. Basis for calculating retirement beneﬁt obligations(1) Allocation of expected retirement beneﬁts(2) Discount rate

Straight-line method
2.00%(3) Expected return on plan assets
1) Corporate pension plan
2.90%2) Qualiﬁed pension plan
2.30%
(4) Amortization period of prior service costs
Two years (amortized in equal amounts for a ﬁxed number of years that is less than the average remaining years ofservice of employees when incurred)(5) Amortization period of actuarial differences
Five years (amortized starting in the next consolidated ﬁscal year in equal amounts for a ﬁxed number of years that isless than the average remaining years of service of employees when incurred.)
TAX EFFECT ACCOUNTING
1. Main reasons for deferred tax assets and deferred tax liabilities.
(Millions of yen)

Deferred tax assets
Allowance for employee retirement beneﬁts¥ 1,623

Allowance for executive retirement beneﬁts¥ 445

Accrued enterprise tax¥ 536

Allowance for doubtful accounts¥ 85

Valuation losses on stock and investments in afﬁliated companies¥ 134

Valuation losses on memberships¥ 321

Net unrealized gains on investment securities¥ 562

Bonus reserve¥ 326

Outsourced research and development

¥ 294

Other

¥ 954

Total deferred tax assets¥ 5,286

Deferred tax liabilities
Net unrealized gains on other securities¥ (228)Prepaid pension costs¥ (1,557)

Total deferred tax liabilities¥ (1,786)

Net deferred tax assets¥( 3,500)

HISAMITSU PHARMACEUTICAL CO., INC

52

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

2. Main reasons for difference in statutory tax rate and income tax rate after application of tax effect accounting(Millions of yen)
Statutory tax rate

40.4%

(Adjustments)
Entertainment expenses excluded from income

1.6%

Dividend income excluded from income(0.2)%

Per-capita inhabitants tax

0.1%

Special tax exemption for experimental research and development(3.8)%

Other(0.1)%

Income tax rate after application of tax effect accounting

38.0%

HISAMITSU PHARMACEUTICAL CO., INC

53

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

SEGMENT INFORMATIONBusiness segment information
The company and its consolidated subsidiaries, in consideration of the types of products sold and their qualitative similarities,
operate the three business segments of pharmaceuticals and related products, cable television broadcasting, and otherbusinesses. Segment information is omitted because pharmaceuticals and related products account for more than 90% of
the total sales, operating income, and assets of all business segments.
Geographic segment information
Fiscal 2008 (March 1, 2007 – February 29, 2008)
Geographic segment information is omitted because Japan accounts for more than 90% of the total sales and assets of allgeographic segments.
Overseas sales
Fiscal 2008 (March 1, 2007 – February 29, 2008)
Overseas sales information is omitted because they account for less than 10% of consolidated sales.
RELATED PARTY TRANSACTIONSFiscal 2008 (March 1, 2007 – February 29, 2008)
Executives and major individual shareholders

Category

Executive

Name

NAKATOMI
Hirotaka

Address—

Relationship
VotingTransaction
Capital orBusiness orrights ratio
Transaction amountinvestment
profession
Concurrent(%)(¥ million)(¥ million)
Business
positions

Item

Year-endbalance(¥ million)

Concurrently
a foundation
chairman
Other
concurrent
positions:
None
Secondments:
None
Transfers:
None

—

—

—

President & CEO
of Hisamitsu
PharmaceuticalCo., Inc.,
Chairmanof Nakatomi
Memorial
Foundation

Direct: 0.76
Indirect: -—Contributions
to theNakatomi
Memorial
Foundation

621

Transaction terms and policies for deciding transaction terms
Transaction amounts do not include consumption tax.
Contributions to the Nakatomi Memorial Foundation are third-party transactions.

HISAMITSU PHARMACEUTICAL CO., INC

54

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

SIGNIFICANT SUBSEQUENT EVENTS
Merger of consolidated subsidiary
Hisamitsu Pharmaceutical Co., Inc. merged consolidated subsidiary Hisamitsu Medical Co., Ltd. on April 1, 2007.
1. The name of the merged company or business, its business activities, legal format of merger, company nameafter merger, and a merger overview, including merger objective, is presented below.
(1) Name of merged company
Hisamitsu Medical Co., Ltd.
(2) Business activities
Intellectual property management(3) Legal format of merger
Merger between jointly-controlled companies(4) Company name after merger
Hisamitsu Pharmaceutical Co., Inc(5) Merger overview, including objective
The merged company Hisamitsu Medical Co., Ltd. was the successor company when SSP Co., Ltd. spun off andsold its ethical pharmaceuticals business in April 2005. It was involved in managing intellectual property, including
patents, trademarks, and know-how, and it seconded to the company executives and employees related to the ethicalpharmaceuticals business (e.g., sales staff, researchers, and back-ofﬁce personnel in medical information and otherdepartments). However, Hisamitsu Medical merged with the company in an effort to concentrate the group’s businessresources and enhance efﬁciency.
2. Overview of accounting treatment
The merger was treated as a merger between jointly-controlled companies in accordance with the Accounting Standards
for Business Combinations (Corporate Accounting Council, October 31, 2003) and the Application Guidelines for the Accounting Standards for Business Combinations and Accounting Standards for Business Divestitures.

HISAMITSU PHARMACEUTICAL CO., INC

55

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

PER SHARE INFORMATION
Fiscal 2007
(March 1, 2006 – February 28, 2007)

Fiscal 2008
(March 1, 2007 – February 29, 2008)

Net assets per share¥1,164.05

Net assets per share¥1,276.16

Earnings per share¥178.74

Earnings per share¥210.45

Diluted earnings per share are not listed due to the absence of residual
securities.

Diluted earnings per share are not listed due to the absence of residual
securities.

Note: Basis of calculation
1. Net assets per share
Fiscal 2007
(March 1, 2006 – February 28, 2007)

Fiscal 2008
(March 1, 2007 – February 29, 2008)

Total net assets in the consolidated balance sheets (¥ million)

103,966

113,929

Net assets attributable to ordinary shareholders (¥ million)
Main differences (¥ million)
Minority interests
Ordinary shares outstanding

103,231

113,179735

750

95,164,000

95,164,000

Ordinary shares held in treasury

6,482,000

6,477,000

Ordinary shares used in calculating net assets per share

88,682,000

88,687,000

Fiscal 2007
(March 1, 2006 – February 28, 2007)

Fiscal 2008
(March 1, 2007 – February 29, 2008)

2. Earnings per share

Net income (¥ million)

15,847

18,663

Amount not attributable to ordinary shareholders (¥ million)——

Net income attributable to ordinary shareholders (¥ million)

15,847

18,663

88,661,000

88,681,000

Average ordinary shares during year

HISAMITSU PHARMACEUTICAL CO., INC

56

ANNUAL REPORT 2008

Financial Section
Fiscal 2008
(March 1, 2007 – February 29, 2008)

ADDITIONAL CONSOLIDATED INFORMATION
Bond information
Not applicable.
Borrowing information

Short-term borrowings
Long-term borrowings due
within one year
Long-term borrowings(excluding borrowings due
within one year)
Total

Notes:

Balance at end of ﬁscal 2007 Balance at end of ﬁscal 2008(¥ million)(¥ million)
790
762

Average interest rate
(%)
1.40

Repayment date
—

2,677

275

1.63

—

1,058

842

0.44

March 1, 2009 to
February 29, 2016

4,526

1,880

1.00

—

1. Average interest rate shows the weighted average interest rate for year-end balances of borrowings,
etc.
2. Long-term borrowings due within one year include ¥725 million in interest free loans from the Development Bank of Japan.
3. Long-term borrowings (excluding borrowings due within one year) include ¥725 million in interest freeloans from the Development Bank of Japan.
4. The following long-term borrowings (excluding borrowings due within one year) are scheduled for repayment each year for ﬁve years from the consolidated balance sheet date.

Long-term borrowings

One to two years(¥ million)
166

Two to three years(¥ million)
166

Three to four years(million)
145

Four to ﬁve years(¥ million)
133(2) Other
Not applicable.

HISAMITSU PHARMACEUTICAL CO., INC

57

ANNUAL REPORT 2008

Corporate Data

Corporate Data

Group Companies
Our corporate group comprises Hisamitsu Pharmaceutical, 10 consolidated subsidiaries, two non-consolidated subsidiaries, and two equity-method afﬁliates.
Relationship
Location

Capital orinvestment

Main businessactivities

Votingrights(%)

Hisamitsu America, Inc.

Torrance,
California,
USA

USD
100,000

Pharmaceuticals
and related
products

100

1

—

Hisamitsu Farmaceutica
do Brasil Ltda.

Manaus,BrazilBRL
14 million

Pharmaceuticals
and related
products

100

—

3

Hisamitsu Vietnam
Pharmaceutical Co., Ltd.

Bien Hoa,
Vietnam

VND
31,293 million

Pharmaceuticals
and related
products

100

—

4

Saga City-Vision Co.,Ltd.

Saga, Saga

¥603 million

Cable television
broadcasting

69.41

1

2

CRCC Media Co., Ltd.

Kurume,Fukuoka¥830 million

Cable television
broadcasting

100

1

3

Taiyo Co., Ltd.

Tosu, Saga

¥10 million

Other businesses

100

1

3

Kyudo Co., Ltd.

Ueki-machi,
Kamoto-gun,
Kumamoto¥10 million

Other businesses

100

1

2

Hisamitsu Agency Co.,
Ltd.

Kurume,Fukuoka¥25 million

Other businesses

60
(60)

1

2

Hisamitsu UK Ltd.

London, UK

GPB
120,000

Pharmaceuticals
and related
products

100

—

2

PT. Hisamitsu PharmaIndonesia

Surabaya,Indonesia

IDR
32,518 million

Pharmaceuticals
and related
products

75

—

3

Name

Concurrent employees
CapitalHisamitsu Hisamitsu support fromofﬁcers employees Hisamitsu(Persons) (Persons)Businesstransactions

Other

Remarks

Consolidated subsidiaries

HISAMITSU PHARMACEUTICAL CO., INC

59

Sell products
supplied by—
Hisamitsu in the US
Manufacture andsell products in
WorkingBrazil, with products—
capital loans
and some raw
materials suppliedby Hisamitsu
Manufacture and sell
products in Vietnam,—with some raw—
materials suppliedby Hisamitsu
Working
Hisamitsu
capital loans
outsources—and debt
advertisingguarantees
Working
Hisamitsu
capital loans—
outsourcesand debt
advertisingguarantees
Agent for casualty
Hisamitsu—
insurance contracts
leases landfor Hisamitsu
Provide advertising Hisamitsu—
agency services to leases land
Hisamitsu& buildings
Provide advertising—
agency services to—
Hisamitsu
Hisamitsu—
outsources—
development
Manufacture andsell products inIndonesia, with
Working
products and some—
capital loans
raw materials
supplied by
Hisamitsu—

Note 3

ANNUAL REPORT 2008

Corporate Data

Equity-method afﬁliates
Taiwan Hisamitsu
Pharmaceutical Co., Ltd.

Banqiao,
TaiwanMaruto Co., Ltd.

Ogori,
Fukuoka

Pharmaceuticals
and related
products

50

—

5

—

—

¥1,807 million Other businesses

39.75

—

3

Working
capital loans—

TWD
15 million

Note 4

Notes: 1. Main business activities column lists names of business segments.
2. There are no companies in accounting insolvency that would signiﬁcantly affect the consolidated ﬁnancial statements.
3.Speciﬁed subsidiary.
4.Listed on the Fukuoka Stock Exchange and ﬁles ﬁnancial statements.
5. Figures in parenthesis in the voting rights column indicate indirect ownership.
6. Key earnings information for the foregoing consolidated subsidiaries is not listed because sales atthese companies account for less than 10% of consolidated sales (excluding internal sales between
consolidated subsidiaries).
7. Non-consolidated subsidiaries Kokusai Pappu-zai Kenkyusho Co., Ltd. and Taiyo Kaihatsu Co., Ltd.
have discontinued business operations.

HISAMITSU PHARMACEUTICAL CO., INC

60

ANNUAL REPORT 2008

Corporate Data

Company Profile
Company name

Hisamitsu Pharmaceutical Co., Inc.

Founded1847

Established
Head ofﬁce
Representative
CapitalFiscal year

May 22, 1944
408 Tashiro Daikan-machi, Tosu, Saga
NAKATOMI Hirotaka, President & CEO¥8,473,839,816
March 1 – End of February

Stock Information
Authorized shares
Shares outstanding
Shareholders
Stock exchange listings

380,000,000
95,164,895
7,299
First sections of the Tokyo Stock Exchange, Osaka Securities Exchange, andNagoya Stock Exchange, and the Fukuoka Stock Exchange (stock code: 4530)
Stock registrar
Mitsubishi UFJ Trust and Banking Corporation
1-4-5 Marunouchi, Chiyoda-ku, Tokyo
Annual general meeting of shareholders
May each year
Ex dividend date
End of February (August 31 for interim dividend)
Record date
Record date for the annual general meeting of shareholders is the end of February.
Report in advance if otherwise needed.
Newspaper for public announcements
Nihon Keizai Shimbun
Stock related inquiries
Stock Section, General Affairs Department, Kyushu Head Ofﬁce
408 Tashiro Daikan-machi, Tosu-shi Saga
Tel: +81 942-83-2101 Fax: +81 942-83-6119
Website: http://www.hisamitsu.co.jp

Number of Employees
Business segment

Employees

As of February 29, 2008

Pharmaceuticals and related products
1,651 (222)
Cable television broadcasting
44 (9)
Other businesses
57 (66)
Total
1,752 (297)Note:
Employee ﬁgures are for full-time employees. Temporary employees are shown in parentheses;
these ﬁgures are averages for the ﬁscal year and are not included in totals.

HISAMITSU PHARMACEUTICAL CO., INC

61

ANNUAL REPORT 2008

Hisamitsu Pharmaceutical Co., Inc.
408 Tashiro Daikan-machi, Tosu, Saga
Tel: +81 942-83-2101
Fax:+81 942-83-6119
Website: http://www.hisamitsu.co.jp