Sysmex Corporation

Annual Report 2014
For the year ended March 31, 2014

Annual Report 2014

Moving Forward at
the Forefront of Change

Sysmex Corporation
1-5-1 Wakinohama-Kaigandori,Chuo-ku, Kobe 651-0073, Japanwww.sysmex.co.jp
This brochure was printed in Japan on FSC R-certified paper using vegetable oil ink.

Profile

In its quest for further growth,
Sysmex is anticipating challenges in
its operating environment by moving
forward at the forefront of change.

SysmexCorporation (“the Company”) is an integrated supplier of the instruments, reagents andsoftware that are essential to testing processes performed during health checkups, treatment and ongoing disease management.
Since its establishment in 1968, Sysmex has concentrated on the field of diagnostics, where the Company
has played an integral role in the testing of blood and urine samples. While reinforcing its research and development capabilities and enhancing its production, Sysmex has expanded into the fields of urinalysis, immunochemistry, clinical chemistry and hemostasis, and has extended its operations onto a global scale.
The Sysmex Group comprises 60 companies in 38 countries throughout the world, operating in theadvanced countries of Europe and the Americas. In addition, the Group is aggressively building its business inemerging markets, including China, India, Eastern Europe and Russia by creating global networks for its R&D,
production, sales and support functions. Sysmex products are used by medical institutions in more than 170 of
the world’s countries.. In the field of hematology, which involves the analysis of red and white blood cells, theGroup holds the top share of the global market.
Sysmex’s operating environment is growing ever more complex and uncertain, but in its quest for further
growth, the Company strives to move forward at the forefront of change and devise strategies for responding
swiftly to emerging challenges.

Global Network

China
Subsidiaries: 4
Number of employees: 316

EMEA

Japan

Subsidiaries: 32
Number of employees: 1,488

Americas
Subsidiaries: 6
Number of employees: 796

Sysmex Corporation

Asia Paciﬁc

Subsidiaries: 6
Number of employees: 2,344

Subsidiaries: 12
Number of employees: 457

Net Sales by Destination

China
19.7%

Asia Paciﬁc
7.9%

Net Sales by Business

Japan
Japa
21.8%

Net Sales¥184,538 million
Americas
Am
2
21.6%

Life science 0.9%
Other IVD 4.1%

Other business 1.6%

Hemostasis 15.1%
Clinical chemistry 2.0%
Immunochemistry 1.1%
Other HU-BU 2.4%
Urinalysis 7.9%

Net Sales¥184,538 million
Hematology 64.8%

EMEA
28.9%
28 9
Sysmex Annual Report 20141

11-Year Growth and Highlights

For the years ended March 31,

2004

2005

2006

2007

2008

2009

2010

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

2014

2014

¥ 124,694 ¥ 134,744 ¥ 145,578 ¥ 184,538$ 1,791,631

2011

2012

2013

For the year:
Net sales¥ 65,970

Operating income

6,615¥ 76,935 ¥ 87,888¥ 101,041 ¥ 110,724 ¥ 111,843 ¥ 116,206

9,104

10,724

12,71515,033

15,134

15,74018,28919,20621,80532,871

319,136

Net income

3,157

5,731

7,423

9,008

9,132

8,014

9,765

11,412

12,007

14,166

20,574

199,748

Net increase (decrease) in cash and cash equivalents

3,465(3,261)

(499)

3,299

(3,044)

(269)

4,403

5,103

2,922

12,4692,241

21,757

Cash and cash equivalents, end of year

13,71810,4589,416

12,715

9,679

9,410

13,813

18,916

21,83834,30736,548354,835

Capital expenditure

2,451

2,729

5,638

4,546

8,244

9,340

4,540

5,840

7,909

8,945

13,366

129,767

Depreciation

3,203

3,296

3,592

3,959

3,924

7,189

7,067

6,871

7,031

7,945

9,961

96,709R&D expenditure

5,549

6,509

8,184

9,026

9,221

10,771

11,23812,38011,904

12,11913,260128,738

We aim to sustain highlevels of growth and further
increase our profitability bymoving forward at theforefront of change.

At year-end:
Total assets

71,983

77,66087,447

101,225

109,027

118,522

120,702130,060

142,285

173,011

210,759

2,046,204

Shareholders’ equity

51,09656,14962,647

71,34478,75379,18386,35893,534

101,834

118,801

145,757

1,415,117

Interest-bearing liabilities

4,175

657

695

669

1,081

10,344

2,565

1,971

1,026

769

1,960

19,029(Yen)(U.S. dollars)¥ 1,151.4¥ 703.8*2

6.83

2

0.97

Per share data:
Shareholders’ equity (yen)¥ 2,244.9 ¥ 1,251.8*2 ¥ 1,411.0¥ 2,042.7

2¥ 1,541.0¥ 1,548.2¥ 1,684.9¥ 910.7*2
2¥ 990.5

Net income (basic) (yen)

132.9

225.1

145.5*

179.6

178.9

156.7

190.8

111.2*

116.9

137.6

99.5*

Net income (diluted) (yen)

123.1

224.0

143.8*2

178.0

178.3

156.5

190.5

111.0*2

116.6

137.1

99.2*2

0.96

Cash dividends applicable to the year*3 (yen)

3.75

5.00

6.50*2

9.00

12.00

12.50

14.00

15.00*2

17.00

20.00

27.00*2

0.26

Dividend ratio (%)

22.6

17.8

17.9

20.0

26.8

31.9

29.4

27.0

29.1

29.1

27.1

Sales and Earnings Forecast for the Fiscal Year Ending March 31, 2015

2015

¥210.0 billion¥36.0 billion¥22.0 billion
17.1%
10.5%

Net sales
Operating income

Other data:
Shareholders’ equity ratio (%)

71.0

72.3

71.6

70.5

72.2

66.8

71.5

71.9

71.6

68.7

69.2

Return on equity (ROE) (%)

6.7

10.7

12.5

13.4

12.2

10.1

11.8

12.7

12.3

12.8

15.6

4.6

7.7

9.0

9.5

8.7

7.0

8.2

9.1

8.8

9.0

10.7

Yen/U.S. dollar

116.0

108.2

113.3

117.0

114.3

100.5

92.9

85.7

79.1

83.1

100.2

Yen/euro

131.0

134.5

137.9

150.1

161.5

143.5

131.2

113.1

109.0

107.2

134.4

Number of employees

2,907

3,115

3,334

3,580

3,916

4,148

4,578

4,960

5,324

5,594

6,211

4

Return on assets (ROA)* (%)

Net income
Operating margin
Net income margin
Assumed exchange rates: US$1 = ¥100; €1 = ¥135
(Announced in May 2014)

Note: Including part-time employees
Notes:*1. U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥103 = US$1, the approximate rate of exchange on March 31, 2014.
*2. Two-for-one stock split*3. Dividend (actual) coverted to post-split basis.
*4. ROA = Net Income/Total Assets (Yearly Average)×100(Years ended March 31)

Net SalesJapan

Americas(¥ million)(Including South Korea and IDEXX Laboratories, Inc.)
Intra-area transfers: Exports to Group aﬃliates, others
Sales to customers: IDEXX and others
Sales to customers: Japan
Segment proﬁt(¥ million)(¥ million)(¥ million)

150,000

40,000200,000

184,538

160,000
124,694

134,744

20,13890,00088,168

2011

2012

2013

2014

38,5945,000

Segment proﬁt
Sales(¥ million)(¥ million)

60,00010,00032,00039,09460,00045,197
8,683

3,955

2,783

0

2012*

24,0002013*

48,000Asia Paciﬁc
Segment proﬁt
Sales(¥ million)(¥ million)

40,000

5,000

3,000

36,0002,478

Segment proﬁt
Sales(¥ million)(¥ million)

14,731

15,00032,000

1,500

1,386

36,2584,195
8,000

37,032

2,872

11,93962,05840,1874,000

29,703
26,85515,00082,78430,00039,73540,0002010

20,000103,81780,000

Segment proﬁt
Sales(¥ million)

China

53,196 8,604
120,000

145,578

120,000 116,206

0

25,000

EMEA

4,000

1,200

12,0001,056

39,436
5,799

6,000

5,379

24,42524,00019,299 2,370

3,000

9,000

2,384

9,043

900

7,868

2,129
10,00016,0002,000

24,0004,000

16,000

2,000

6,000

5,000

8,000

1,000

12,000

2,000

8,000

1,000

3,000

1,446

600
330

300

40,313
2014*

0

0

2012*

2013*

2014*

0

0

2012

2013

2014

0

0

2012*

2013*

2014*

0

0

2012*

2013*

2014*

0

* Revision in intragroup transaction prices

2

Sysmex Annual Report 2014

Sysmex Annual Report 2014

3

Contents

Key Strategies for Future Growth

Key Stratteeg
gies
for Future
e Growth

Corporate G
Governance Message from the Chairman and CEO . . . . . . . . . . . . . . . .

8

 An Interview with the Chairman and CEO . . . . . . . . . . . .

11

 Special Feature

Moving Forward at the Forefront of Innovation . . . . . . 14

P45

P6
Thinking Forward
to More Robust
GovernanceSpecial F
FeatureBusiness Activities Milestones of Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20

 Sysmex at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22

 Market Overview and Sysmex’s Position. . . . . . . . . . . . . .

24

 Product Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25

 Sysmex’s State-of-the-Art Technologies . . . . . . . . . . . . . .

28

 Customer Feedback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31

 Development of Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . .

32

Functional Structure Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34

 Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36

 Purchasing, Production and Logistics. . . . . . . . . . . . . . . . . .

39

 Sales and After-Sales Support . . . . . . . . . . . . . . . . . . . . . . . . . .

42

Corporate Governance

P13
Moving Forward
at the Forefrontof Innovation

Business Activities

Sysmex Value Corporate Philosophy and Core Behaviors . . . . . . . . . . .

46

 Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

47

Sysmex Value
 Brand Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

56

 Socially Responsible Activities . . . . . . . . . . . . . . . . . . . . . . . . . .

58

Financial Section

P19

P55

 11-Year Consolidated Financial Data . . . . . . . . . . . . . . . . . .

66

 Management’s Discussion and Analysis . . . . . . . . . . . . . .

68

 Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . .

74

 Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . .

95

Sysmex Group Information

Functionall Structurre

P33

4

Sysmex Annual Report 2014

Extending Forward
Our Global Value
Chain

Stepping Forward
in Response toMarket Needs
Striking Forwardwith Renewed
Vigor

 Global Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

96

 Stock Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98

 Corporate Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99

Forward-Looking Statements
Statements in this annual report, other than those of historicalfact, are forward-looking statements about the future performance of Sysmex that are based on management’s assumptions
and beliefs in light of information currently available, and involve
both known and unknown risks and uncertainties. Actual eventsand results may differ materially from those anticipated in thesestatements.

Sysmex Annual Report 20145

Key Strategies for Future Growth

Key Strategies for Future GrowthT

he environment in which Sysmex operates
is undergoing fast-paced change, characterized by technological innovation occurring

on a daily basis and shifting market circumstances,such as the rapid growth of emerging markets.
Against this backdrop, Sysmex is developing its
sales and support structures in emerging markets
and making a full-fledged launch into personalized
medicine, setting the stage for moving forward.

6

Sysmex Annual Report 2014

Sysmex Annual Report 20147

Message from the Chairman and CEO

Operating Environment

External Environment
Healthcare Market

EconomyD

Global economy gradually recovering, Japanese
economy also remains in recovery phaseuring the fiscal year ended March 31, 2014, the Sysmex

of decelerating growth in China’s economy continued, asGroup generated net sales of ¥184,538 million, risingboth internal demand and exports leveled off. The Japanese

26.8% year on year and amounting to a new historic high. Major

economy was in a recovery phase, as the government’s eco-

contributors to this growth were double-digit expansion cen-nomic policies caused manufacturing activity in the corporate

tered on overseas operations, with sales and income increasing

sector to recover.

Global economy
ȉ Improvement in U.S. employment environment,
gradual recovery in Europe

Advanced countries
ȉ Europe/U.S.: Healthcare system reforms, healthcare
insurance system reforms
ȉ Japan: Developing healthcare industry as a pillar of growthJapanese economy
ȉ Gradual recovery due to government economic
stimulus and Bank of Japan measures

Emerging markets
ȉ Building healthcare infrastructure in line witheconomic expansion and population growthin all geographic areas. Performance also reached historicallyOn the healthcare front, demand in advanced countries ishigh levels across all financial income categories, benefiting

increasing as populations age. Although medical technologies

from the effects of higher sales as well as an improved cost of

are growing more sophisticated in such areas as regenerative

sales ratio. Operating income surged 50.8% year on year, toand personalized medicine, efforts to curtail healthcare spend-

Market entry by companies from other sectors¥32,871 million, and net income amounted to ¥20,574 million,

ing are also underway, as are moves to reform healthcareCompanies in emerging markets catching up rapidly

up 45.2% from the preceding fiscal year.

systems. Emerging markets include countries such as China,

Although we had initially planned to award a dividend for

Russia and Indonesia that are pushing forward with healthcare

the year of ¥42 per share, we decided to raise this amount byinfrastructures in tandem with economic development, and¥12, to ¥54 (adjusted figure for stock split is ¥27) per share. This

other countries that depend on healthcare support fromfigure represents a ¥14 per share increase from the precedingoverseas development agencies and foundations.

Firm demandCompetitive Environment

Key Strategies for Future Growth

During the fiscal year ended March 31, 2014, Sysmex recorded historically high levels of net
sales and income. Net sales expanded for the 14th consecutive fiscal year, and operating income
was up for the 13th year in a row. Sysmex aims to continue this growth moving forward.

Technological Innovation
Progress in regenerative medicine, diagnosis basedon genetic and analysis technologies(Advancement of personalized medicine)Proactive adoption of telecommunications androbotics technologies

In the healthcare business as a whole, competition is

fiscal year, a consolidated payout ratio of 27.1% and our 12th

expected to continue mounting due to the entry of companies

consecutive year of dividend increases.

Healthcare and IVD markets expected to maintain high rates of growthfrom electronics and other industries, as well as companies
from emerging markets.

Ongoing Growth in the Healthcare Market

Active Development of Operational Bases and
M&A Activity to Expand Business Further

globalization of R&D, we established the R&D Center Americas

ended March 31, 2014, in the United States the employment

targeting further growth. We are developing our sales and

The fiscal year ended March 31, 2014, was one of proactive

As part of our launch in the domain of personalized

situation continued to improve and activity in the corporate

support structures in emerging markets where business is

initiatives: we expanded manufacturing bases, built up sales

medicine, where advances are expected, we converted two

sector maintained its recovery trend. In Europe, the debt

growing and making a full-fledged launch into the field ofand support networks, and acquired companies as part of acompanies to subsidiaries: Partec, which is a pioneer in flow

crisis and the resulting austerity measures continued, but

personalized medicine.

full-scale launch into personalized medicine.

cytometry technology*2; and Inostics, which possesses gene

Sysmex is addressing this environment with an initiatives

Looking at global economic conditions during the fiscal year

In anticipation of ongoing growth in demand for in-vitro

the region showed signs of recovery, albeit slight. The sense

Net Sales

Operating Income
Operating Margin(¥ million)
200,000(¥ million)
35,000184,538

Operating income
Operating margin

32,871(%)
40

Net Income(¥ million)
25,00020,574160,000

28,000145,57832

20,000134,744
120,000

116,206

124,694

21,80521,00024

18,289 19,206

14,00013.5

14,166
11,412 12,007

15,74080,00015,000

14.7

14.3

15.0

17.8
16

10,000

9,765

7,000

8

5,000

0

0

0

0

genes circulating in the blood. By combining these two

struction of a new factory, i-Square, adjoining our Kakogawa

companies’ technologies with those of Sysmex, we expect toinstrument factory and simultaneously expanded affiliatedachieve advances in the hematology field and build techno-companies’ factories. These enhancements will gradually triple

logical foundations for personalized medicine. (For details,

the Sysmex Group’s total instrument production capacity.

please see the Special Feature, on pages 13–18.)

With regard to sales and support networks, in South Korea weWith Kawasaki Heavy Industries, Ltd., we establishedconverted our distributor to a subsidiary and expanded our

Medicaroid Corporation, to perform product planning mainly inbusiness there. We also set up a subsidiary in Turkey, which isthe area of medical robots—an area with the potential for global

slated for future growth.

demand growth. The company will conduct market research

Under R&D activities, based on the results of a New Energy

with a view to future development, manufacturing and sales.

and Industrial Technology Development Organization (NEDO)*1 Glycosylation marker: A glycosylation marker is a biomarker that targets

project, collaborative development by Sysmex and the National

structural changes in sugar changes present in glycoproteins. Sugar chains,the linked monosaccharides that link to the surface of a cell or a protein,
are sometimes described as “cell and protein costumes.” Their roles include
the transmission of information specific to individual cells and intercellularcommunications.
*2 Flow cytometry technology: Method involving the flow dispersion of minuteparticles and the use of laser light to optically analyze the minute flows.

resulted in the world’s first practical application of an immunochemistry reagent employing a glycosylation marker*1 to test

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

amplification technologies that can be used to detect cancer

diagnostic (IVD) instruments, we made progress on the con-Institute of Advanced Industrial Science and Technology

40,000in Chicago, at our regional headquarters for the Americas.

the degree of hepatic fibrosis by blood sampling. To promote the(Years ended March 31)

8

Sysmex Annual Report 2014

Sysmex Annual Report 20149

An Interview with the Chairman and CEO

Message from the Chairman and CEO

Leading
Hematology(Undisputed
Global Leader
in Hematology)

Overview of Long-Term Management Targets
Secure an undisputed leadership position
As an industry frontrunner, provide
products that oﬀer new value andhigh levels of usability

We will proactively develop our operations in order to meet the expectations of our stakeholders.

Long-Term Management Vision:

A Unique & Global
Healthcare Testing Company
Long-Term Management Targets

Establish uniqueness as a comprehensive
IVD supplier

Leading in
Emerging Markets Introduce products and services that meet
emerging market needs, reinforce sales and(Focus on
Emerging Markets)

support networks, and lead the developmentof testing within these countries
Strengthen the non-hematology businessin AsiaQ
A

The Mid-Term Management Plan introduces
three core strategies. Please explain yourinitiatives related to Leading Hematology.

Positioning ȉUndisputed global leader in hematology ȉLeading company in the Asian IVD market ȉLeading company in molecular diagnostics“theranostics”

Innovating
Life Sciencehigh marks from our customers for supporting high levels of

the field of hematology, which is the mainstay field

effectiveness and efficiency in laboratory operations.

of business for the Sysmex Group, constituting an importantbase of revenues and profits. Full-fledged sales of our flagshipbenefits patients with conditions such as thrombocytopenia¥500 billion

Create new value through personalized
medicine and by integrating therapy
with diagnostics

service functionality that reduces downtime through preven-reinforcing our undisputed position of leadership in

The XN-Series offers new measurement parameters andNet sales:

and requires less storage space. We have provided network
tive maintenance and failure prediction. We have earned

substantially in the fiscal year ended March 31, 2014.

Financial target

a concentrated reagent, which improves operating efficiency

Leading Hematology describes the objective ofmodel in the hematology field, the XN-Series, boosted sales
Create unique testing technologies in thearea of molecular diagnostics, centeringon cancer

to meet a variety of needs. Furthermore, we have introducedby significantly increasing measurement accuracy for low
platelet counts. This enables high-clinical-value reporting,leading to enhanced laboratory value.
In addition to boosting functionality and performance,
Sysmex employs a product design concept called Silent

Q
A

What are some of your initiatives under theplan’s core strategy of Leading in Emerging
Markets?

Sales in emerging markets accounted for 29.7% of
the total in the fiscal year ended March 31, 2013. This
figure rose to 33.6% in the fiscal year ended March 31,

2014, and we expect our presence in these markets to continue growing. Within emerging markets, in the hematology
field demand for more sophisticated instruments is increasing,Achieving Further Forward Momentum Based on
Our Corporate Philosophy, the “Sysmex Way”

which concludes in the fiscal year ending March 31, 2016. We

Design aimed at increasing usability by reducing theand we are seeing demand for instrument upgrades. Demandremain guided by the plan’s three core strategies: Leading

burden on the people who use our instruments, the clinicalfor system products is also rising as the number of samples

The Sysmex Way is the corporate philosophy for the entire

Hematology, Leading in Emerging Markets and Innovating

laboratory technologists. For example, this design embraces

to be tested grows and efficiency becomes a higher priority.

Sysmex Group, expressing the directions in which the Group

Life Science.

a modular concept that allows multiple instruments to be

We have begun targeting emerging markets with our compact

combined freely, and we can offer clients proposals tailoredmodel, the XP-Series, and we are cultivating new markets.

is heading and the values we hold important (see page 46).

Our management targets for the fiscal year ending MarchIn line with this philosophy, we are striving to make a leap

31, 2015, announced in May 2014, are net sales of ¥210.0

forward and earn additional trust from society. Our mission,

billion, up 13.8% year on year, and operating income of ¥36.0“Shaping the advancement of healthcare,” is to take on new

billion, up 9.5%. (Our assumed exchange rates are 1US$=¥100

challenges and move forward by applying our expertise andand 1EUR=¥135.)

technologies in the healthcare domain, thereby contributing
to the creation of a healthy and bountiful society.
All members of the Sysmex Group make the Sysmex Way

We intend to fulfill our corporate social responsibility byoperating in accordance with our corporate philosophy, theSysmex Way, and in line with our core behaviors targetingan integral part of their everyday activities, translating thisstakeholders. By doing so, we will enhance our corporate

philosophy into specific actions. Our core behaviors clarify thevalue and meet the expectations of our stakeholders.

values that we provide—to our customers, our employees, ourbusiness partners, our shareholders and society. By respecting
the viewpoints of our stakeholders and conducting businessactivities based on high ethical standards, we aim to earn®

Key Strategies for Future GrowthCore Strategies

We ask our stakeholders for their continued support andunderstanding of all our endeavors.
July 2014

further trust from society and make a significant leap forward
as a company.
With the objectives of maintaining its high level of Group10

growth and further enhancing profitability, in May 2013

Hisashi Ietsugu

Sysmex announced the Group Mid-Term Management Plan,

Chairman and CEO

Sysmex Annual Report 2014

Sysmex Annual Report 201411

Special Feature
An Interview with the Chairman and CEO

be used during surgery to determine the existence of lymph

We have also continued to enhance our presence in nonhematology fields such as urinalysis, clinical chemistry andnode metastasis, it helps to reduce the burden on the patient

hemostasis, turning them into pillars of growth.

and therefore enhances their quality of life. In Japan, in addition to breast cancer, in December 2013 insurance coverage ofIn terms of sales and support networks, in South Korea weconverted a distributor to a subsidiary, and we established aour method commenced for the rapid detection of colon andsubsidiary in Turkey, where we anticipate future growth. We

stomach cancers. Also in December 2013, in Japan we began

will continue to set up sales and support networks in suchoffering a new assay service (for research), Curebest™ 95GC

emerging markets as Central and South America and India,

Breast, involving analysis of genetic expression, providing

thereby driving the development of testing in rapidly growing

research data to predict recurrence risk of breast cancer.

emerging markets.

Q
A

Q
A

What closing message would you like toleave with stakeholders?

And what about activities in relation to thethird core strategy of Innovating Life Science?

aggressive investment, which is designed to sustain
steady high growth, and returns to our shareholders as

biopsy technology, a driver of personalized medicine,

our earning power increases. In terms of returns to sharehold-in September 2013 Sysmex acquired Inostics andconverted this company to a subsidiary. Inostics possesses

ers, we intend to provide a stable dividend on a continuous

gene amplification and other technologies that are usedbasis under our basic policy of sharing the successes of ourin measuring cancer genes circulating in the blood. Liquid

operations in line with business performance. In accordancebiopsies allow for the testing of cancer and other diseases bywith this policy, for the fiscal year ended March 31, 2014, we

sampling blood or other body fluids. This reduces the burden

increased dividends for the 12th consecutive fiscal year.

on patients and allows for repeated testing, if necessary, mak-We will aim to remain true to our Group corporate

ing treatment monitoring easier. (For details, please see thephilosophy, the “Sysmex Way,” and our core behaviors toward

Special Feature on pages 13–18.)

stakeholders. As a result, we intend to meet our social responsibilities as a listed company and enhance corporate value.

The RD-100i, which is on sale in Europe and Japan, tests
for breast cancer lymph node metastasis—automatically,

I ask for your ongoing support of Sysmex as we set the stage

rapidly and to a high degree of precision. As the system canto take on new challenges over the medium to long term.

Dividend Policy and Dividend Forecast

60

Dividend (annual) prior to stock split
Dividend (annual) converted to post-split base
Dividend payout ratio (consolidated)

Sysmex aims to maintain a proper balance between aggressive investment, which is designed to sustain
steady high growth, and returns to our shareholders as our earning power increases.
In terms of returns to shareholders, we intend to provide a stable dividend on a continuous basis and aim
for a consolidated payout ratio of 20% under our basic policy of sharing the successes of our operations
in line with business performance.

(%)
50

40
56

54

31.9%
29.4%

45

27.0%

26.8%

18.9%

17.8%

17.9%

13
7.5

6.25
3.125

3.75

26.4%

28

25

12.00

12.50

14.00

27.00

15.00

20
28.00

20.00

17.00

10

9.00

6.50

5.00

30
27.1%

30

18
10

29.1%

34

20.0%
24

15

29.1%

40

22.6%
30

Moving Forward
at the Forefrontof Innovation

0

0
2003

2004

2005

2006

2007

2008

Notes: Two-for-one stock split conducted on November 18, 2005
Two-for-one stock split conducted on April 1, 2011
Two-for-one stock split conducted on April 1, 201412his
section introduces
Sysmex’s proactive efforts
in the area of personalized
medicine by expanding its
technology platforms throughM&A activity and alliances,
as well as its businessexpansion initiatives.

Sysmex aims to maintain a proper balance between

Aiming toward the practical realization of liquid

(Yen)
75

T

Sysmex Annual Report 2014

2009

2010

2011

2012

2013

2014

2015
(Forecast)(Years to March 31)

Sysmex Annual Report 201413

Special Feature: Moving Forward at the Forefront of Innovation

In keeping with its corporate mission of “Shaping
the advancement of healthcare,” Sysmex is moving
aggressively forward with R&D aimed at realizing
personalized medicine.

personalized medicine. For example, we are creating and com-cells that are emitted from affected areas. As a result, whereas

mercializing new technologies for testing to support decisions

at the present, a biopsy of the affected specimen is required

on what treatments to incorporate among surgical procedures

to test for disease, it may become possible to test blood andand medications. These include OSNA for the detection ofother bodily fluids instead. As this process, known as liquidcancer lymph node metastasis and Curebest™ 95GC Breast forbiopsy, places less of a burden on the patient compared withresearch involving the recurrence of breast cancer.

physical sampling, it can be performed repeatedly for monitor-

effects of drugs can be predicted when selecting medication.

To accelerate our progress in this direction and fueling. Liquid biopsies are attracting a great deal of attention, but

Such testing allows healthcare to be optimized for individual

corporate growth, in the fiscal year ended March 31, 2014, wethey also require more sensitive testing than was needed inpatients, thereby reducing the physical impact on a patientwere proactive in our M&A and alliance activities, acquiring

the past, because the amount of patient-derived substances inand helping to control medical costs.

Inostics GmbH and Partec GmbH and in-licensing from Merck

the blood and other bodily fluids is extremely small. Sysmex is

The healthcare industry is evolving swiftly in response to

Amid rising demand for personalized medicine, particu-

Millipore. Sysmex has been promoting R&D into measurement

pursuing R&D, positioning the development of new measure-changes in the economic climate surrounding it, as well as

larly noteworthy is the growing importance of companion

technologies (technology platforms) targeting genes, proteins

ment technology that will contribute to the realization of liquid

to rapid advances in related technologies. In the past, thediagnostics*, which allows determination of the efficacy andand cells. In addition to facilitating our entry into companion

biopsies in personalized medicine as a strategic pillar.

prevailing trend has been toward single treatments for mul-safety of therapeutic drugs for individual patients prior to

diagnostics and reinforcing our competitiveness, our recent

tiple patients—treatments that “work for everyone”—but thistheir administration. Pharmaceutical companies are meeting

acquisitions and in-licensing will accelerate the extension ofsystems, or platforms, with the ability to detect genes,

approach has certain limitations. Having entered the postge-these treatment trends by simultaneously pursuing thetechnologies toward the realization of personalized medicine.

proteins and cells to a high degree of sensitivity.

nomic era, we now have the capability to analyze genes, cells

development of therapeutic drugs and clinically tested drugs.

We aim to generate synergies between Sysmex’s own* Companion diagnostics: Clinical testing performed to predict the efficacy

technologies and our newly acquired technologies to create

September 2013 Sysmex acquired Inostics. This company pos-unique new technologies.

sesses BEAMing technology, which allows identification andand proteins to gain more detailed information about patient
attributes. We can combine this information about a patient,and side effects of drugs before using them fortreatment, particularly testing that is performed at
the same time as pharmaceutical development.

representing his or her genetic background, with environ-First, to address the gene part of this equation, inblood with ultrahigh sensitivity, and has developed a business

Way, of “Shaping the advancement of healthcare,” we areSysmex’s Initiatives to Realize Liquid Biopsy*
Technologies to Drive Personalized Medicine

has a clinical testing laboratory at Johns Hopkins University, arecurrence, and provides prognoses. Such information is also

moving aggressively forward with R&D into testing andIn recent years, it has become evident that a patient’s bloodglobal leader in the healthcare field, where it collaborates with

helpful during drug therapy, as efficacy and potential side

diagnostic technologies that will lead to the realization ofand other bodily fluids contain certain genes, proteins andsome of the world’s most preeminent cancer researchers toare moving toward the realization of testing that diagnoses
the risk of developing disease, determines the early onset of

Healthcare Trends(Personalized medicine)

DigitalPCR
M&A

Conventionally:
Patients receive the same treatment (drug)

Molecular
imaging FCM

Conventionally

DigitalHISCLIn-licensed

Merck Millipore
Inostics
Enhanced competitiveness(introduction to CDx)
Clinical PCR

Introductionof new
technologies

Clinical FCM

From biopsy to liquid biopsy*

Analyze disease-derived
components that have leaked
into the blood (bodily ﬂuid)

Circulating
tumour genes+

PartecExisting platforms

Sysmex Annual Report 2014

Proprietary,
uniquetechnologies

Direct analysis ofaﬀected specimen

In Future

Circulating
tumour cells

M&A

Personalized medicine:
Treatment designed to meet
speciﬁc characteristics of individual patients

centered on the OncoBEAM® lab assay service. Inostics also

Platforms Targeting Personalized Medicine

Enhancing Platforms for Personalized Medicine
Toward liquid biopsy(leading to personalized medicine)

14

Turning liquid biopsies into reality requires measurement

analysis of minute quantities of cancer genetic markers in themental factors when treating the patient. For instance, we
In keeping with our corporate philosophy, the Sysmex

Moving Forward at the Forefront of Innovation

Sysmex’s Initiatives in the Area of Personalized Medicine
and Business Expansion Efforts

Our owntechnologies

OSNA®

FCM
(XN®)

Chemi-luminescence(HISCL®)

Gene measurement
platform

Cell measurement
platform

Protein measurement
platform

Proteins*Liquid biopsy:
Detection of cancer orother diseases by testingblood or other bodily ﬂuids.
This type of testing is lessinvasive than conventional
physical biopsies.

Sysmex Annual Report 201415

Special Feature: Moving Forward at the Forefront of Innovation

BEAMing technology is a type of digital PCR technology

cell conditions on the basis of statistical results. As imaging

more detailed tests are needed to make a firm diagnosis andand the United Nations Children’s Fund, and it has achieved a

FCM also enables cell information to be determined infor subsequent treatment and monitoring.

high market share in Africa.

that combines a tiny amount of single molecular gene with aexhaustive detail, even cancer and other hard-to-find cells canmagnetic bead inside a special oil bubble, and then amplifies

be detected. In addition to cell shape, this approach allows

thrombocytopenia and leukemia, which are closely related tothis area, but going forward we will leverage Sysmex’s global

and detects the specific genetic marker to an extremely highinformation to be gleaned about proteins expressed on a cell’shematology tests. At present, detailed tests that use FCM mea-

network to expand Partec’s business throughout the world. By

degree of precision. At the present, cancer genetic markers

surface or within the cell, permitting the analysis of cell func-

surements require manual pretreatment. But if pretreatment

accelerating development in this manner, we aim to contrib-

are detected by obtaining a tissue specimen during surgery

tion. If this technology can be deployed in a clinical setting,can be simplified, application will become possible on a broader

ute to higher levels of healthcare.

or needle biopsy. However, BEAMing allows cancer genetic

it might be used in the diagnosis of leukemia and a host of

scale. This market, termed “clinical FCM,” is expected to grow.

marker testing to be carried out using blood, to the sameother diseases.

By combining the technology that Sysmex has cultivated with

Mounting an Entry into the Clinical FCM Market
and Growing Our Business by Expanding
Existing Platforms

Also, in addition to the technology and expertise that

The Importance of Simultaneously Expanding
Technology Platforms and Quickly Acquiring
Biomarkers

Partec has accumulated in the area of FCM, it develops andBiomarkers refer to the use of quantitative indicators ofmarkets unique products for emerging and developing coun-

substances contained in the blood or other bodily fluids to

In addition, in September 2013 Sysmex acquired Partec, atries. Partec’s products for these countries are compact anddetermine physical condition. Using each of our technology

pioneer in FCM technology.

portable, and can be used in environments in which medical

platforms to determine what parameters, or biomarkers,

a full-fledged foray into the clinical FCM market.

BEAMing technology currently is possible only throughinstruments employing this technology, providing them assolutions and thereby generating new value.
Next, to address cell measurement for realizing liquidbiopsy, in March 2014 we entered into a clinical research,

Africa is the current focus of Partec’s sales and service in

the FCM technology that Partec possesses, we expect to makelevel of performance as traditional tissue testing. Althoughspecial facilities, Sysmex aims to develop automated testing

FCM measurements are taken during detailed tests for

Sysmex uses FCM as a fundamental technology in its

treatment facilities are lacking. In particular, its instruments

to measure is important to the realization of personalized

Millipore involving imaging flow cytometry (FCM). Imaging

hematology and urinalysis products, which are used in screen-for HIV testing have been widely adopted by various countries

medicine. Under its strategy of open innovation, in addition

FCM involves analyzing images of cells flowing at high speeds.

ing tests to determine the presence of disease. If abnormali-

and governments, nongovernmental organizations and inter-to pursuing research independently Sysmex is collaborating

Currently FCM measures large volumes of samples, analyzingties are observed during these screening tests, additional andnational institutions, including the World Health Organization

with research institutes, universities, venture companies

joint development and licensing agreement with Merck

Moving Forward at the Forefront of Innovation

promote R&D in leading-edge genetic testing for cancer.

Imaging Flow Cytometry Technologies (Merck Millipore)Detector
Dichroic
filter stack

Velocity
detector

Acquiring Biomarkers through Open Innovation

Autofocus

Cells in flow

Acquiring Biomarkers through Open Innovation
Brightfield
illuminator

Laser

Sysmex Inostics

Research Institutions
Fluorescent imagesof cultured cells

Sysmex Inostics Technologies
BEAMing Technology
One method of digital PCR[Advantages] Sensitivity is high, relatively easy conversion to multiple parameters, abundant clinical data
[Issues]
Processes are complex

National Cancer Center
Comprehensive collaboration
Q National Institute of Advanced Industrial
Science and Technology
Glycosylation marker
And others
Q

Clinical Value

Pharmaceutical Companies
esTechnology platforms
Q

Sysmex Annual Report 2014

Bayer (Sysmex Inostics)
Collaborative development agreement
And others

Development of companion
diagnostics withpharmaceutical companies

dNTPs
Polymerase
Primer
Oil-Emulsiﬁer Mixture

16

Joint research with universities
and medical institutionsin Japan and overseas

institutions in Japan and overseas+

Magnetic beads

Before ampliﬁcation

Kobe University
Funded course(Assessment of Clinical Testing)
Q University of Tokyo, Kyoto University,
Osaka University…
Q MKCC, JHC…
And others
Q

Joint research with research
Biomarkers

BEAMing Technology Process

Universities, Medical Institutions

Coacervation

On-beads PCR

Labeling

Droplet dissolution

Venture Companies
Q

Human Metabolome
Depression diagnosis
And others

Joint development with venturecompanies in Japan and overseas

FCM detection

Sysmex Annual Report 201417

Business Activities
Special Feature: Moving Forward at the Forefront of Innovationand pharmaceutical manufacturers to quickly acquire usefulbiomarkers.

The center is also a research institution that is active inthe development of new cancer diagnostic reagents and drugs

For example, in September 2013 we entered into a col-for treatment. While both parties so far have collaborated onlaboration agreement with the National Cancer Center tothe basis of independent programs, under the current agree-

develop cancer diagnostic reagents. Under this agreement,

ment, Sysmex and the National Cancer Center are aiming

new biomarkers discovered at the National Cancer Center

to work together to rapidly develop and provide clinicallywill be developed into new in-vitro diagnostic reagents forvaluable in-vitro diagnostic reagents for cancer patients, which

delivery to patients. As our first joint research project, weis the fundamental objective for both parties.

are currently working on new methods for the diagnosis of

Sysmex will continue promoting the creation of newbone cancers that occur frequently in children. Being able totesting technologies that lead to the realization of personal-

predict the effects of chemotherapy prior to treatment allows

ized medicine and contributing to the development andfor the selection of more appropriate treatment methods. The

advancement of healthcare by meeting increasingly diverse

National Cancer Center has become known as a key Japaneseand sophisticated testing needs.

institution for cancer treatments and countermeasures.

S

ysmex
provides the instruments
and reagents needed forhematology, hemostasis andother tests to customers aroundthe world. In recent years, we havealso been moving ahead withresearch to create new tests
for cancer, diabetes andother illnesses.

World’s First Practical Application of Technology Employing a Glycosylation Marker to Test Hepatic Fibrosis
In addition to cancer-related technologies, Sysmex is also

employs a glycosylation marker to determine progression

developing new testing technologies in the immunochem-from chronic hepatitis to cirrhosis of the liver by examining

istry field.

the degree of hepatic fibrosis. This approach differs fromIn December 2013, based on the results of a New Energy

conventional biopsies in that it can be conducted on an

and Industrial Technology Development Organization proj-

outpatient basis simply through blood sampling, whichect, collaborative development by Sysmex and the National

should reduce the burden on patients.

Institute of Advanced Industrial Science and Technology
resulted in the world’s first practical application of technol-* Glycosylation marker: A biomarker that allows disease condition to

ogy employing a glycosylation marker* to test the degreeof chronic hepatic fibrosis by blood testing. This technology

be determined by looking at changes in thephysical structure of glycosylation that exists on
glycoproteins.

Stepping Forward
in Response toMarket Needs

Changes in the Structures of Glycosylation on the Glycoproteins as Fibrosis Progresses

Glycoproteins ofan individualwith cirrhosis

Glycoproteins ofa healthy individual

Sugar
chain

Progression of liver ﬁbrosis

18

Sysmex Annual Report 2014

Sysmex Annual Report 201419

Milestones of Growth

Era of Dramatic Advances (2000s to the Present)
Q Mar. 2000

Q Apr. 2007

Q Oct. 2008

Q Jul. 2010

Q Sep. 2013

Promoted to the First Section of the Tokyo
Stock Exchange and the Osaka Securities
Exchange.

Established a Group Corporate Philosophy, the“Sysmex Way.”

Renewed the new corporate
logo on the occasion of the40th anniversary of theCompany’s establishment.

Launched joint business with IDEXX, leader inanimal diagnostics.

Converted Partec GmbH, a pioneer in FCM
technology, to a subsidiary.

Q Apr. 2011

Q Oct. 2013

Transfer from Katakura Industries Co., Ltd. of its
Research Institute of Biological Science.

Converted Inostics GmbH, a moleculardiagnostic technology, to a subsidiary.

Q Aug. 2013

Q Apr. 2014

Established Medicaroid Corporation with Kawasaki
Heavy Industries, Ltd., with a view to developing
medical robots.

Carried out a two-for-one stock split. (Also
conducted stock splits in November 2005 andApril 2011.)

Q Jun. 2007

Q Apr. 2002

Formed a global partnership with bioMérieux for
urinary screening in microbiology.

Consolidated Sysmex International Reagents asa subsidiary.

Q Apr. 2010

Established Long-Term Environmental Objectives.

Q Jan. 2008

Q Apr. 2005

Formed a commercial joint venture with bioMérieux
for the Japanese in-vitro diagnostics market.

Introduction of the executive oﬃcer system as ameans of strengthening corporate governance.

190,000

180,000

Business Activities(¥ million)
200,000

170,000

160,000
Q Jan. 2000

Q May 2005

Q Oct. 2007

Q Nov. 2008

Q May 2011

Founded a Shanghai subsidiary, Sysmex Shanghai.

Establishment of the Solution Center inKobe and concentration of the marketing
planning, customer support and scientiﬁc
support functions.

Released HISCL-2000i, a fully
automated immunoassay analyzer.

First insurance coverage inJapan for the Sysmex system
for rapid detection of breast
cancer lymph node metastasis.

Launched the XN-series of ﬂagshipmodels in the hematology ﬁeld.

Q Mar. 2000

Opened Central ResearchLaboratories in KobeHISCL-2000i
Q Oct. 2008

Q Aug. 2006

Q Jun. 2003

Consolidation of two local subsidiaries in the US toestablish Sysmex America. Rebuilding of the sales
and support structure in the US.

Rapid Growth Period (1990s)
Q Mar. 1995

Signed an agreement with Dade International, aUS-based company (now Siemens) for
collaboration in selling coagulation product lines.

Released the industry's ﬁrst coagulation
analyzer with a multi-wavelengthpre-analytical check, the CS-2000i.

RD-100i

Sysmex’s new instrument
factory,y, i-Square,q, openedpin the city of Kakogawa.

Q Jul. 1996

Q Oct. 1996

Listed stock on the Second Section of the Tokyo
Stock Exchange.

Hisashi Ietsugu becomes president,
now Chaiman and CEO.

120,000

Signed a basic agreement with F. Hoﬀmann-La
Roche of Switzerland for global collaboration inmarketing and joint R&D in hematology ﬁeld.
Q Oct. 1998

Listed stock on the Second Section of the Osaka
Securities Exchange.

Change of company name to Sysmex Corporation
to mark the 30th anniversary of founding.

Q Aug. 1990

Q May 1991

Q Jun. 1995

Launch of an integrated hematology systemthat fully automated the entire process fromthe counting of blood cells throughpreparation ofsmear samples.

Established the UK subsidiary, now Sysmex UK,
commencing direct sales overseas.

Established a joint venture, operating
reagent business, now Jinan Sysmex
Medical Electronics, in China.

Q Q Feb. 1998
Established a Singaporean subsidiary, operating
reagent business including manufacturing, now
Sysmex Asia Paciﬁc.

Q Nov. 1995

Q Feb. 1999

Launch of the world’s ﬁrst analyzer oftangible constituents of urine that fully
automated inspections of urinary sediments.

Released XE
XE-2100
2100, an automatic
multi-item blood cell analyzer
XE-2100
deve
eveloped as a product of the 21st century.

110,000

100,000

90,00080,000Completed the Neumünster
Factory, in Germany, the base forreagent production in Europe.

Hemotology system

130,000

Q May 1998

Q Nov. 1995

Q Jul. 1993

140,000

Q Jun. 2014

Established Technopark,
Sysmex’s core R&D base;double the size of previous
facilities.

CS-2000i

150,000

XN-series

Q Feb. 1991

Q Dec. 1993

Established a reagent factory in Ono, Japan.

Established a US subsidiary, now Sysmex
Reagents America.

UF-10070,00060,000The Early Years (1960s to 1980s)
Q Feb. 1968

Q Feb. 1978

TOA Medical Electronics was established for the
purpose of marketing medical electronics devices,
now Sysmex.

Launch of the Sysmex brand to mark the 10th
anniversary of founding.

50,00040,000Q Dec. 1963

Q Oct. 1979

Q Apr. 1986

TOA Electric successfully developed
and commercialized AutomatedHematology Analyzer “CC-1001” theﬁrst blood cell counter in Japan.

Established a US subsidiary, now Sysmex America.

Opened R&D base in the city of Kobe, now Technopark.

Q Oct. 1980

Q Mar. 1987

Established a European subsidiary, Sysmex Europe.

Launch of the immunochemistry analyzer,
which utilized an original immuno
immunoassay
method, marks entry into theheimmunochemistry segmenment.

CC-1001

Q May 1973

Q Oct. 1984

Established the Kakogawa instrument Factoryin Japan.

Launch of the automated coagulation analy
nalyzermarks entry into the hemostasis segment.

30,00020,000PAMIA-10

CA-10010,000Managemant

1963

1964

R&D

1965

Production

1966

1967

Marketing

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

2011

2012

2013

0
2014

Net Sales
Note: 1 Sales from 1963 to 1968 are not counted as Sysmex sales.
2 Figures from 1969 to1994 are on a non-consolidated basis, and on a consolidated basis from 1995.

20

Sysmex Annual Report 2014

Sysmex Annual Report 201421

Sysmex at a GlanceSysmex derives approximately 97.5% of its revenues from thediagnostics field in the business of testing samples of humanbodily fluids, such as blood and urine, with hospital and commercial
laboratories as its principal customers. More specifically, our main
field of business is hematology, which involves measuring the number
and type of red, white and other blood cells. This business accounts foraround 65% of net sales.
Hematology uses specific reagents, and the sale of hematology
instruments leads to an automatic and sustainable source of revenue
through the sales of reagents and provision of maintenance services.
Furthermore, in addition to our mainstay field of hematology and
IVD* operations in such fields as urinalysis, immunochemistry, clinicalchemistry and hemostasis, we are reinforcing our commercialization of
the life science field.
Sysmex also operates in the IT field, providing testing information
systems and proposing solutions to meet demand for network systems
to manage medical data.

(¥ million)(Year ended March 31, 2014)

Japan

Americas

EMEA

China

 IVD

38,81939,92650,26736,264

14,610S

ysmex enjoys a unique business model. On one hand, we conduct astock type of business in which we sell the instruments needed for
IVD, offer the specific reagents needed for long-term testing and provide
support and maintenance services. Reagents are more conducive toeconomies of scale than instruments, and deliver higher gross profit margins.
At the same time, instrument sales drive increased reagent usage. Therefore,
this segment should generate stable earnings growth and higher profitability.
Sales of reagents and the provision of maintenance and other services currently account for approximately 69% of net sales. Industrywide,sales are trending upward, with instrument sales focused on the secondand fourth quarters of the fiscal year.

Asia Pacific(¥ million)(¥ million)

200,000

184,538

Q IVD

97.5%

(Years ended March 31)

2010 Q HU-BU

75.1%

 IVD

112,223 120,754 131,360

22,34937,792

42,21324,064

12,099 Q Hematology Hematology

17,04135,39738,51818,223

10,413 Q Urinalysis

 Urinalysis

2,190

2,192

3,066

5,841

1,198

 Other HU-BU

3,117

202

628

—

486

10,877

2,134

6,162

12,0832,462

 Immunochemistry

2,094

—

13

5

2

 Clinical chemistry

2,210

—

241

1,075

176

 Hemostasis

6,572

2,134

5,907

11,002

2,282

5,592

—

1,890

115

48

257

—

1,439

—

29

 LS-BU

1,240

—

1,679

4

—

 Other business HU-BU

 ICH-BU

 Other IVD

 LS-BU
 Other business

64.8%
7.9%
 Q Other HU-BU
2.4%
 Q ICH-BU
18.3%
 Q Immunochemistry 1.1%
 Q Clinical chemistry 2.0%
 Q Hemostasis
15.1%
Q Other IVD
4.1%

160,000

145,578
134,744
116,206

120,000

124,694

Q LS-BU

60,00045,00040,31739,92636,2680

14,63915,000 HU-BU

2011

2012

2013

2014

141,947

179,887

83,676

91,799 100,122 108,579

138,519

72,966

79,56985,897

93,832

119,593

 Urinalysis

8,233

9,490

10,864

10,937

14,489 Other HU-BU

2,476

2,738

3,359

3,809

4,435

21,89021,93323,18926,36433,720 Immunochemistry

3,917

2,704

2,047

2,072

2,116

 Clinical chemistry

3,374

3,242

3,498

3,080

3,703

 Hemostasis

14,59915,987

17,643

21,211

27,899

6,656

7,021

8,049

7,004

7,647

906

1,204

850

1,060

1,726

3,045

2,735

2,532

2,569

2,924

 Hematology

 ICH-BU

 Other IVD

HU-BU: Hematology and urinalysis business unit
ICH-BU: Immunochemistry, clinical chemistry and hemostasis business unit
LS-BU: Life science business unit

53,38530,0000.9%
1.6%

Q Other business

80,00040,000(¥ million)

2010

2011

2012

2013

2014

(Years ended March 31)0* Acronym for in-vitro diagnostics.

Product Segments

Sales Composition by Business

Net Sales by Destination and BusinessBusiness Activities

Business Segments

Japan

Americas

EMEA

China

AsiaPaciﬁc

Sales Composition by ProductNet Sales by Destination and Product(¥ million)(Year ended March 31, 2014)

Japan

Americas

EMEA

China

Asia Pacific Instruments

12,413

11,462

12,401

16,3674,444

 Reagents

20,91813,897

26,103

19,596

7,647

 Maintenance services

3,926

8,408

5,008

260

473

 Others

3,058

6,158

9,872

44

2,073

(¥ million)(¥ million)

200,000

184,538
160,000

120,000

145,578
116,206

124,694

134,744(Years ended March 31)

2010

2011

2012

2013

2014

 Instruments

35,971

41,74946,14247,86757,089 Reagents

53,47255,291

59,906

66,50588,163

 Maintenance services

11,50012,14012,823

14,13018,079 Others

15,262

15,514

15,873

17,076

21,207(¥ million)

60,00045,00053,38540,31739,92680,00036,268Q Instruments

30,00014,63915,00040,000

Q Reagents
Q Maintenance

0
Japan

Americas

EMEA

China

Asia Paciﬁc

0

2010

2011

2012

2013

2014

30.9%
47.8%

services

9.8%

Q Others

11.5%

Q Japan

21.8%
21.6%
28.9%
19.7%
7.9%

(Years ended March 31)

Regional Segments by Destination

S

ysmex supplies products and services to customers in more than170 countries. Sales in three key regions—Japan, EMEA and theAmericas—account for approximately 72% of net sales*1. We are also
accelerating business development in China, which is experiencing
remarkably strong economic growth, and the Asia Pacific region. We
are steadily increasing our presence in emerging markets*2, whichcurrently account for around 34% of net sales.
*1 Net sales by destination is defined as the sales amount recorded by Group companies
to customers in a particular region. However, net sales by geographical region refers to
the sales amount made by a Group company in a particular location.
*2 Emerging markets: China, Southeast Asia, South Asia, Latin America, East Europe,
Russia, Middle East, Africa
Advanced countries: Other than those above

22

Sysmex Annual Report 2014

Sales Composition by Destination(¥ million)(¥ million)(Years ended March 31)

2010

2011

2012

2013

200,000

184,5382014

 Japan

38,62638,541

39,73540,19040,317

 Americas

23,444

26,53528,60730,76539,927

 EMEA

36,44635,41437,37039,58753,386

 China

11,84315,093

19,29924,43036,269

 Asia Pacific

5,847

9,111

9,733

10,606

14,639160,000

120,000

145,578
116,206

124,694

134,74480,000Q Americas

40,000Q EMEA0

Q China

2010

2011

2012

2013

2014

Q Asia Paciﬁc(Years ended March 31)

Sysmex Annual Report 201423

Market Overview and Sysmex’s Position

Product Strategies
HU Business Unit

Clinical Laboratory Testing Categories
Examination

Diagnosis and Treatment

RecoveryDiagnostic Support
Monitoring Eﬀects of TherapyHematology

Hematology tests are a type of screening that counts red, whiteor other blood cells to determine whether a more detailed
examination is necessary. In addition to instruments, these tests
require specific reagents, which constitutes an ongoing demand.
Sysmex estimates that the global hematology market accounts
for annual sales of $2,800 million. Furthermore, the market isdominated by only three major suppliers: Sysmex, Beckman
Coulter (Danaher) and Abbott. Nevertheless, we became theglobal leader in the field of hematology in 2007, and we are
steadily expanding our share of the market.
Hematology analyzers typically are identified by the
number of white blood cell types they distinguish: three or five.

Three-part white blood cell differentiation analyzers employ
relatively simple testing principles and have the advantage ofbeing compact and having low running costs, as they require few
reagents. Five-part white blood cell differentiation analyzers, on
the other hand, have a higher clinical significance, as they offer
the more accurate and precise measurement of five types ofwhite blood cell, enabling various complaints and blood disorders to be analyzed in more detail. In addition, analysis systems(five-part white blood cell differentiation instrument transportsystems) mainly at large-scale facilities are realizing efficiency
gains through the use of robotics.

Business Activities

C

linical testing, used in medical diagnosis and treatment or in monitoring the effects of drug administration, is essential to therealization of a healthy society. Clinical testing can be broadly divided into two categories: in-vitro diagnostics (IVD) that involvethe examination of blood, urine or cell samples taken from the body and in-vivo tests that involve direct examination using X-rays,
electrocardiograms (ECGs) or brain waves. Sysmex’s primary business is in the IVD domain.

Clinical Laboratory Testing
Sysmex’s Business Domains

ȉ+HPDWRORJ\  ȉ+HPRVWDVLVȉ8ULQDO\VLV ȉ,PPXQRFKHPLVWU\
ȉ&OLQLFDOFKHPLVWU\ȉ;UD\V&7VFDQQLQJȉ(OHFWURFDUGLRJUDPVȉ5HVSLUDWRU\IXQFWLRQWHVWLQJ ȉ(OHFWURHQFHSKDORJUDPVDQGRWKHUV'LDJQRVWLFVIRUPHGLFDOFKHFNXSVSysmex’s business in the IVD domain involves the provision of instruments, reagents and laboratory systems around the globe
in such fields as hematology, urinalysis, immunochemistry, clinical chemistry and hemostasis. At present, Sysmex is among the
top 10 IVD companies in the world, and the only leader that hails
from Asia.
Fields of Expansion by Region(As of March 31, 2014)
Leveraging the strength of this geographical advantage, we
Japan
China
AP
Americas EMEA
were an early proponent of a strategic focus on Asia. The Group
Hematology
Yes
Yes
Yes
Yes
Yes
is developing its business as an integrated supplier in various
Urinalysis
fields in Japan, China and the Asia Pacific region.
Yes
Yes
Yes
Yes
Yes
(Urine sediment)
In the Americas and EMEA, however, we maximize our
ImmunochemistryYes
Yesmanagement resources by strategically concentrating our sales
Clinical
Yes
Yes
Yes
efforts on fields of particular expertise: hematology, urinalysis
chemistryand hemostasis.
Hemostasis

Yes

Yes

Yes

Yes

IVD total
Hematology
Urinalysis
Immunochemistry
Clinical chemistry
Hemostasis
POC (excluding SMBG*)
OthersMarket size ($ million)

46,1002,800

Others700(Urine sediment 290)

Hematology$2,800 million

14,700
6,000
1,600
6,000
14,300(Sysmex estimates)

SysmexS

XN-2000(Twin module)

XN-9000(Transport system)

The XE-5000 is the high-end model in the
XE series, which is shipped with software
to measure immature cells in the bloodas standard instrument and a function tomeasure blood cells found in extremely
small quantities in body fluids.

XT-4000i

This compact, highly functional model features thesame measurement principles, reagents and operability
as models in the high-end XE
series. This space-saving unit
offers the ability to analyze
five types of white blood cell,
as well as excellent measurement data interchangeability.

(Three-part white blood cell diﬀerentiation analyzers)

Segment

Information Diversity

Diagnostics Market

XN-1000(Single module)

XS-Series

S

Market ShareThis new model in the hematology field is designed to enhance clinical value. In addition to providing abody fluid measurement mode, the model substantially increases measurement accuracy for low platelet
counts. Embracing the modular concept, this series allows the combination of multiple analyzers, transportsystem, smear preparation system and other instruments. This flexibility enables the proposal of tailoredsolutions to meet individual customer needs.

XE-5000Yes

ysmex currently ranks within the global top 10 in the IVD market. In hematology, we are the world leader in terms of market share.
However, competition is growing ever more intense, with developed countries’ demographics changing due to graying populations
and falling rates of childbirth, business becoming increasingly global, and companies from other fields of business are entering the market.
Sysmex is responding to these challenges by reinforcing its own sales network and aggressively leveraging the benefits of allianceswith other companies. By strengthening our sales channels and rounding out our product portfolio, we are steadily enhancing ourglobal presence.

XN-Series(Five-part white blood cell diﬀerentiation analyzers)

In-Vivo Diagnostics

Specialization

In-Vitro Diagnostics

This basic, compact model
is supported by the Sysmex
Network Communication Systems (SNCS), and features aviewer-friendly screen and aneasy-to-use operating system.

XP
Featuring compact size and easy operation,
this analyzer provides valuable blood test
data such as the white blood cell, threepart differential in less than one minute.

pocH-100i
Featuring compact size and easy operation,
this counter allows high-precision measurement results and makes it possible to perform
hematology simply in diagnostic and therapeutic settings.

Reagents
Hematology testing requires specific reagentsfor dilution, hemolysis and staining, as well as foruse in analyzers. We also manufacture reagentsfor other areas, including, urinalysis, immunochemistry, clinical chemistry and hemostasis.

Animal Diagnostics
In 2010, we formed a business alliance with IDEXX Laboratories, Inc., a leader
in this field. Under this accord, we began providing hematology analyzers foranimals on an OEM basis and selling them via IDEXX Laboratories’ networks.

ProCyte Dx (IDEXX’s brand name)
Incorporating numerous technologies and expertise
cultivated with humans into a compact hematology
analyzer that can be placed on a desktop, the ProCyte
Dx features data accuracy and ease of use, and canconduct tests in around 2 minutes.

* Self monitoring of blood glucose

Eﬃciency and Handling Capability

24

Sysmex Annual Report 2014

Scale of Laboratory

Sysmex Annual Report 201425

Product Strategies

HU Business Unit
Urinalysis

Urinalysis entails testing for the presence of sugar, protein
or blood in urine and can be broadly divided into two types:
qualitative urinalysis and quantitative urinalysis. The first type
involves dipping a test paper into urine to determine whether
the abovementioned solids are present. In the second, the quantities of these substances are analyzed. Sysmex estimates thatthe global urinalysis market accounts for sales of $700 million,
with urinalysis sediment making up $290 million. We introduced
the world’s first urine formed sediment analysis system—the
UF series—that uses the flow cytometry method. This series
enjoys an excellent reputation with customers and has theleading share of the global market for urine sediment analysis.
Sysmex, in cooperation with ARKRAY, Inc., developed the world’s
first fully automated integrated urine analyzer, the UX-2000,
which performs both qualitative and quantitative urinalysis. This
analyzer is being launched into markets throughout the world.
UX-2000
In addition to having a significantly
smaller footprint than previous transport systems, the UX-2000 improves
operability. The system is capable offully automated analysis of 100–200
samples per hour.

Other HU-BU

Hemostasis

Hemostasis involves testing for two blood functions: coagulation, or clotting; and fibrinolysis, the process by which bloodclots are broken down. By testing specimens of blood plasma,
it is possible to diagnose hemophilia and thrombosis and tomonitor their treatment. Furthermore, testing blood beforehandenables healthcare professionals to determine whether blood islikely to coagulate properly during surgery.
As a rule, hemostasis tests can be performed using generalpurpose reagents, rather than specific reagents.

Sysmex estimates that the global hemostasis segment
generates annual sales of $1,600 million. In 1995, we concluded a
distribution agreement with Siemens (previously, Dade BehringInc.), forging a synergistic relationship that reinforced ourrespective strengths in the hematology segment. As a result, thisshared business now accounts for the leading share of the global
market for coagulation analyzers.

Business Activities

ICH Business Unit

La-vietal LS

Advances in information technology have generated demandin the healthcare industry for IT-driven medical information
networks. Such networks contribute to effective diagnoses bycollecting and analyzing test data and consolidating this information into a convenient database. Sysmex plans to accelerate
its IT deployment to expand business with hospitals, clinics andremote medical care capabilities.

La-vietal is a clinical testing instrument system that links clinical testing instruments and other systems
to provide an efficient operating
environment.

CA-600 Series

CS-2000i

CS-5100

In addition to providing the functions that areneeded for hemostasis, these analyzers are someof world’s most compact. Operation is simple,
making these analyzers ideal for emergency
laboratories and for use at small and mid-size
institutions that test infrequently.

The CS-2000i analyzer employs a fourth method,
agglutination, in addition to the three fundamental
measurement methods—the coagulation, chromogenic substrate and turbidimetric immunoassay
methods. Integrating all these testing methods intoa single station raises processing performance.

The top of the CS series product line, the CS-5100
is capable of high-speed handling of tests such as
those that include D-Dimer, a parameter for determining thrombotic tendency.

ICH Business Unit

Immunochemistry

Immunochemistry tests are performed on blood serum, thesupernatant fluid isolated after blood separation. Antigenantibody reactions are used to test for the presence of HIV andhepatitis and to look for cancer markers.
Manufacturers of analyzers apply their own measurement
principles, and specific reagents depend on the principles used.
Sysmex estimates annual sales in the global immunochemistry

market at $14,700 million—making it the largest category in the
IVD field, and the market is expected to expand.
We aim to concentrate on developing sales in Japan of the
HISCL Series of fully automated immunoassay analyzers thatenable highly sensitive, high-speed assays. Going forward, we
intend to augment our lineup of related reagents as we make afull-fledged entry into the China and AP regions, as well.

LS Business Unit
In 2006, the Sysmex-developed system for rapid detection ofbreast cancer lymph node metastasis based on the OSNA method
was launched in EMEA. This system was covered by the Japanesenational health insurance program two years later, in 2008, andwe are steadily introducing this system to markets in EMEA andJapan. In 2013, insurance coverage expanded to include the rapid
detection of lymph node metastasis of colon and stomach cancer,
as well as breast cancer.
In addition, in December 2013 we commenced sales (forresearch) in Japan of a gene expression analysis assay service(Curebest™ 95GC Breast), that provides research data that can beused to predict the recurrence of breast cancer.

RD-100i

LYNOAMP BCHISCL-5000
HISCL-2000i
This model applies the chemiluminescence enzyme immunoassay (CLEIA)
methodology to produce a highly sensitive, rapid immunochemistry test
system that can be used with reduced specimen quantities. Designed for use
by medium-sized hospitals, the model can be used to test for diagnostic markers for hepatitis, infectious diseases, HIV, lung and other cancers and cardiac
insufficiency, among other conditions.

Capable of measurement using minute samples, highly sensitive and providing
rapid measurement results in only 17 minutes, the HISCL-5000 simultaneously
measures up to 24 parameters and connects flexibly to transport systems.
By meeting laboratories’ needs in a flexible manner, this instrument contributes to more efficient testing operations. Furthermore, the functionality
for connecting with Sysmex’s unique SNCS support service is provided as
standard, allowing product operating status to be monitored on line.

Clinical Chemistry

Clinical chemistry involves examining the enzymes, sugars andproteins in blood serum and plasma to determine the nutritional
status, liver and kidney functions, and testing for contraction of
conditions such as hyperlipidemia and arteriosclerosis.
Like hematology, clinical chemistry is commonly performed
around the world not only at times of illness, but also during
routine health checkups. Accordingly, the total number of
examinations is extremely high.
Sysmex estimates that the global clinical chemistry market
accounts for sales of $6,000 million, making it the nextlargest market in the IVD domain, after immunochemistry andapproximately the same size as POC, excluding SMBG. Amongother contributors to demand growth is that as standards ofliving improve, emerging economies are likely to experience
increases in such diseases as diabetes.
Sysmex has signed agreements with JEOL Ltd. and Furuno
Electric Co., Ltd., involving automated clinical chemistry analyzers
and is leveraging its sales network in
China as well as Japan to boost sales.
We will also gradually develop sales
in the AP region.

Other Business
Peripheral artery monitoring devices that can measure estimatedvalues for hemoglobin levels without blood sampling are being
introduced and used in various locations as advisory tools formonitoring athletic condition and dietary habits.
In 2011, Sysmex accepted the transfer from Katakura
Industries Co., Ltd., of the protein production services that
until then had been contracted to the company. Based onthese operations, we launched the ProCube business, providing
numerous pharmaceutical companies with proteins used in drug
development and testing.

ASTRIM FITThis non-invasive blood vessel monitor
measures hemoglobin concentrations andblood-vessel width through near-infrared
spectroscopic images simply by placing afinger on the detector. There is no need forblood sampling.

Reagents

26

Sysmex Annual Report 2014

Sysmex Annual Report 201427

Sysmex’s State-of-the-Art Technologies

Flow Cytometry: One of Sysmex’s Core Technologies

Hematology testing requires the separation of blood cells bytype according to size and cell information, and their numbers

Blood cells can be broadly divided into three categories:
red blood cells, white blood cells and platelets. Platelets

Basic Principles Underpinning Sysmex’s Hematology:
Sheath Flow DC Detection

A lower red blood cell count means that oxygen flow is
reduced, resulting in anemia. Conversely, an excess of red
blood cells (polyscythemia) can impair blood flow and clog

Red blood cells, which are produced by stem cells locatedblood vessels. The sheath flow electrical resistance methodin the bone marrow of bones such as the sternum, femur

distinguishes red blood cells from other types of cells in theand tibia, are a major constituent of the blood. These cells

blood and is the basic principal used for determining redtransport oxygen to tissue cells throughout the body andblood cell counts.

Business Activities

Depending on blood cell type, anywhere from several thousand to several million blood cells exist
per microliter (0.001 milliter) of blood. Hematology tests are essential for determining the number of blood cells that are responsible for oxygen transport, or hemostasis. Sysmex employs twobasic technologies—flow cytometry and sheath flow DC detection—to achieve precise measurements at the microliter level.

move carbon dioxide out.

must be measured accurately.
In its mainstay field of hematology, Sysmex employs

are the smallest in diameter, at around 2 micrometers, while

flow cytometry to measure the number of white blood cells

white blood cells are the largest, at around 15 micrometers.

and platelets.

Three Processes in Counting Red Blood Cells

Flow Cytometry Method
With flow cytometry, the target cells are stained with a special
reagent and then irradiated using a laser diode to capture
information on cell size and internal structure. This method
detects the five different types* of white blood cell, as well as ofany abnormal cells. Flow cytometry provides clinically distinct
information depending on the numbers of each of the five typesof white blood cells and differs according to the presence of
inflammation, viruses or allergies. Although in the past sheathflow DC detection was the only method used in counting
platelets, flow cytometry substantially increases the level ofprecision at low values, as it can be used to measure low platelet
counts. This approach allows preventive platelet transfusions to
be reduced, thereby reducing the side effects of transfusions andraising patient QOL. In the field of urinalysis, flow cytometry isused in fully automated urine cell analyzers. In the life sciences
field, which we are currently developing, the method is also underconsideration for use in cervical cancer screening tests. In thisway, Sysmex flow cytometry is becoming a core technology thathas a wide range of potential applications.

In 2013 Sysmex acquired Partec GmbH, a pioneer in FCM
technology. By combining the technologies that Sysmex has
cultivated to date with those that Partec possesses, we expect togenerate synergies and create new value.

Accurate Dilution* Each of the five types of white blood cell—neutrophil, lymphocyte, monocyte,
eosinophil and basophil—has a different shape and function.

Laser diode

Collimator
lens

Spectrum filter
Dichroic
mirror

Accurate dilution

Avalanche
photodiodePhotodiode*1

Condenser lensBeam stopper

Condenser lensPassing cells one by
one through thedetection aperture

Flow cell
Photodiode: Red blood cell
: White blood cell
: Platelet

Flow Cytometry Method Acquisition Parameters
Shrinkage of red blood cells and platelets by means of asurface-acting agent
 Nucleic acid staining of the white blood cells to be classified
and analysis and classification of forward-scattered light,
lateral-scattered light, and lateral fluorescent light signals using
a semiconductor laser


28

*2
Side-scattered light intensity

Information on RNA and DNA amounts

Side-scattered
light intensity

Information concerning the internal
structure of cells (nucleus shape,presence of cell granules, etc.)

Forward-scattered
light intensity

Information on cell size

Counting cells by
the electric signals

Forward-scattered
light intensity*4
Laser irradiation

Individual Passage through the Detection Aperture
Regardless of how accurately it has been diluted, a measured
sample (the diluted blood solution) will contain a large numberof cells. Lining up the cells in a row beforehand simplifies theprocess of counting them, so a stream of fluid*1 that forms asheath around the flowing blood cells is generated to align thecells. The cells flow along the stream*2 toward the detection
aperture, where cells are counted, and pass through its center.*3
Unidirectional flow prevents the stream*4 of blood cells fromflowing backward through the aperture once they have passed
through it.

Stream of ﬂuid
that forms a sheath*3

Lateral fluorescentlight intensity

Sysmex Annual Report 2014

Lateral ﬂuorescent light intensity

Blood must first be diluted a certain amount to allow
accurate measurement of the number and size of cells. This
process reduces the number of cells per volume of blood andminimizes errors caused by blood cells piling up on top of eachother. Accurate dilution requires meticulous measurementof the quantity of blood and of the solution, or reagent. This
process requires micro-level precision in the design of themeasuring chamber and uses an apparatus that minimizes
degradation and abrasion.

Counting Cells by Electric Signal
Blood cells do not transmit electric current easily, so cells
in the test sample cause resistance in a current applied
across the detection aperture through which they must pass.
Therefore, blood cells can be counted by measuring thenumber of times an electric resistance is generated. Larger
blood cells produce greater resistances, allowing the system
to distinguish cells by type.

Sysmex Annual Report 201429

Customer Feedback

In the life sciences domain, our mainstay system for rapid detection of lymph node metastasis
based on the one-step nucleic acid amplification (OSNA) method is used routinely for diagnosisof breast, colon and stomach cancer lymph node diagnosis in hospitals and other facilities inmore than 270 locations throughout the world.

The Tohoku University Hospital, which has 1,262 beds, is a representative Japanese hospital.
With a philosophy of being “A hospital aiming for a harmony of patient-friendly care andadvanced medicine,” based on a holistic healthcare approach that respects the patient’s humanity the Tohoku University Hospital undertakes the development, application and evaluation ofleading-edge medical technology. Sysmex asked the hospital to discuss the background for its
introduction of the CS-5100, a fully automated blood coagulation analyzer, and its impressions
upon using the instrument.

Minimizing the extent of dissection in breast cancer

lymph node for metastasis, with quick delivery of results. This

treatment is generally considered desirable in terms

leads to increased precision in testing for cancer metastasisof the patient’s quality of life (QOL). At present, pathology

in the lymph node and contributes to the determination

labs offer a provisional diagnosis of the sentinel lymph node,of appropriate treatment methods. For example, each year

where metastasized cancer cells first reach, and conduct

throughout the world approximately 1 million people are said

confirmatory studies to determine the extent of resection, as

to be affected by stomach cancer. Japan accounts for approxi-

well as the post-surgical therapeutic principle. Sysmex’s genemately 110,000 of these patients, and the rate of death from

amplification detector, the RD-100i, enables the rapid andthis type of cancer is second only to lung cancer, for men

highly precise detection of breast cancer metastases in theand women alike. During treatment for stomach cancer, thesentinel lymph node. Having confirmed its efficacy, we areexistence of lymph node metastasis is one determinant of the

now introducing the system at about 80 hospitals in Japancancer’s progression. In addition to whether this metastasis

and about 190 in major European countries, particularly Spain.

occurs, knowing the number of metastases and their locations

Going forward, we plan to introduce the system in emerging

can help a physician decide on treatment methods, such as

markets where growth is expected.

whether to excise a portion of the stomach or to use anti-

In addition to breast cancer, on October 1, 2013, insurance

cancer agents.
In the future, we will expand the sales area for products

coverage commenced in Japan for use of the OSNA method
to test for the lymph node metastasis of stomach and colon

employing this method and push forward with research

cancer. Sysmex’s OSNA method enables testing of the entire

designed to extend its applicability to other types of cancer.

Mr. Osamu Seki,
Chief Medical Technologist,
Clinical Laboratory, Tohoku University Hospital

Q

A

What were some of the instrument selection
criteria you used when deciding to introduce
the CS-5100?

one of the most important points for us was the
CS-5100’s high processing capacity, of up to 400

this figure has fallen to 17 minutes. Setting specimens in placetubes containing important specimens to be overturned

has also become extremely simple.

could anticipate improved work efficiency, as well as reduced

and lost. We also compared instrument candidates from thestandpoint of operability, opting for the one that was best.
In addition, our hospital experienced the Great East Japan
Earthquake in March 2011. From that, we learned that inaddition to an instrument’s specifications, its seismic isolation

Homogenized buﬀer

mounting was important, too. After taking all of these factors
New sample
preparation method
RD-100i (analyzer)

ȉ Stabilization of mRNAȉ Prevention of ampliﬁcationinhibitory eﬀects

Direct gene ampliﬁcation
by RT-LAMP(without RNA puriﬁcation)

Homogenization
Gene of cancerous
cells (mRNA)
Interference
substance ofgene ampliﬁcation

Q

How would you evaluate the CS-5100 since itwent into use on a routine basis?

because it would reduce the potential for blood collection

the caps from the blood collection tubes meant that we

Tissuerate of about 10% per year, so we need to be able to process

biohazard risk. We considered this an important function

equipped with a cap-piercing function. Not having to remove

OSNA method

an increase in the number of D-dimer* tests, growing at aA

Next in importance was the fact that the instrument was

The OSNA method is a rapid gene amplification technique that does not require the purification of genes (mRNA) that have been takenfrom a living organism. This method enables the number of cancer cells to be determined during the limited time available during surgery
to a high degree of sensitivity.

parameters for each specimen. In recent years, we have seen

diverse combinations at high speed.

Our clinical laboratory tests many specimens, so

tests per hour (for simultaneous measurement of PT/APTT).

The OSNA Method

Business Activities

Sysmex’s State-of-the-Art Technologies

into consideration, we decided to introduce the CS-5100.

Q

A

From the standpoint of functionality, it definitely
delivers fast processing speed. In the past, ourturnaround time from receipt of a specimen to results

reporting averaged 31 minutes. Since introducing the CS-5100,

Q

What do you think of the support network?

A

We are satisfied with the support network; when we
encounter any sort of issue, someone at the Sysmex
Customer Support Center responds to our phone call.

Several times we have asked for assistance when we encountered aberrant data, and in those cases a support person con-Around how many tests do you run each day?

On average, we run 300 hemostasis tests per day,firmed the data and explained the reason for the abnormality.
Sysmex also provided us with some academic materials.
* D-dimer: A parameter for determining thrombotic tendency

and this number can increase to more than 400

LYNOAMP BC (proprietary reagent)

30

Sysmex Annual Report 2014

on a Monday after a holiday. We test four or five

Sysmex Annual Report 2014

31

Functional Structure
Development of Instruments

A

Fully AutomatedHematology Analyzers

1964
1965

Semi-AutomatedHematology Analyzers

Hemostasis
Analyzers

Urinalysis
Analyzers

Immunochemistry
Analyzers

Life Science
Analyzers

CC-10011970

CC-1001

CC-1002
TU-100CC-7101975

CC-107

CC-710World’s ﬁrst

CC-720 model to include

CC-110CC-120CC-700CC-180CC-170CC-150CC-130a sampler

1980

TU-100

TU-110
TU-120CC-108s
a comprehensive diagnostics supplier, Sysmex has
built an integrated businessencompassing R&D, production,
sales and after-sales support toprovide products and services
to healthcare facilities
around the world.

CC-800CC-800E Series
E-5000/E-4000/
E-3000E-2500/
E-2000CC-700E-5000CA-100CC-780CA-100AA-100Fully AutomatedHematology Analyzers

1985CA-3000
CA-4000

NE-8000

M-2000NE Series
NE-8000/NE-7000/
NE-6000

F-800
F-500
F-300

PAMIA-10

CA-3000

YELLOW IRIS
CA-4000

PAMIA-10
PAMIA-100

CA-4100

K-1000PAMIA-20
UA-1000

1990

CA-5000

K-1000
NE-1500

K-2000SE-9000

F-810
F-610
F-310

PAMIA-30

PAMIA-30
CA-1000 CA-1000 UA-2000

K-800

SE-9000

K-4500World’ s ﬁrst model to use
a semiconductor laser

1995

UA-1000

CA-5000

F-820
F-520

CA-6000

UF-100PAMIA-50

PAMIA-50

SF-3000
CA-500 Series
World’ s highest
processing capacity

KX-21

XE-2100

CA-1500
CA-1500

KX-21NHigh EndXE Series
XE-2100/XE-2100L/
XE-2100D

2000

UF-100CA-500 Series

UF-50
CA-7000
PAMIA-40i
KX-21N

Middle Range
XT Series
XT-2000i/
XT-1800i

CA-7000

PAMIA-40i

pocH-100i

GD-100UF-110i

pocH-100i

2005

Low End
XS Series
XS-1000i/
XS-800i

UF-110i

CS-2000i

HISCL-2000i

UF-1000i

RD-100i

Extending Forward
Our Global
Value ChainHISCL-2000i
CS-2000i

XE-5000
UF-1000i
XS-1000i

RD-100i

UF-500i
CA-8000

2010

XT-4000i

CA-8000

XN-Series
XP-300
XS-500i

2014

32

XN-Series

Sysmex Annual Report 2014

UX-2000

CS-5100
CS-5100

CA-600 Series

HISCL-5000

XP Series

UX-2000HISCL-5000

CA-600

Sysmex Annual Report 201433

Perspective

Functional Structure

Throughout its R&D, production, sales and after-sales support processes, Sysmex works to build
customer satisfaction and instill confidence and trust.

O

ur products are the primary source of our strength as asupport—ourselves. Furthermore, delivering customer feedback

Our delivery network also is extensive. With operations

We currently hold the leading share of the hematology

company. We develop in-house the instruments, reagentsto our R&D divisions quickly enables us to continuously aug-

at 60 locations in 38 countries, Sysmex provides products

markets in four of the regions in which we operate: Japan,

and software that are needed for in-vitro diagnostics, and havement product performance, operability and functionality, andand services to customers in some 170 countries. One of our

EMEA, China and Asia. We are number two in the United

built all operations—from production to sales and after-sales

develop high-value-added products rapidly and efficiently.

greatest strengths is our globally integrated structure span-

States, and boast the top overall share of the global market.

ning the R&D, production, sales and support functions.

Global Supply Chain
Research and Development

Sales and After-Sales Support

Japan

Japan

Technopark

Sysmex maintains extensive R&D operations, centered inJapan and with facilities globally, and the Company actively
collaborates with universities and research institutions
throughout the world. Technopark, our core R&D facility,
is also a symbol of the “Creation of ‘knowledge’ and its
inheritance” concept. Technopark serves as a springboard
for R&D to cultivate new diagnostic technologies andhigh-value-added products.

Overseas
R&D Center Europe
R&D Center Americas
Diagnostic Reagent Development
Center in China
and others

Solution CenterSeven branches, 12 sales oﬃces
Metropolitan Area Service Center

Sysmex TMC
Sysmex bioMérieux
Americas
Sysmex America (US)Sysmex Canada (Canada)

Production (Reagents)

Japan

Japan

i-Square

Sysmex International Reagents

Kakogawa Factory(two factories)

Sysmex Medica
Sysmex RA

Overseas
Sysmex Reagents America (US)Sysmex do Brasil Industria e Comercio (Brazil)
Sysmex Europe (Germany)
Jinan Sysmex Medical Electronics (China)
Sysmex Wuxi (China)

In response to growing global demand for IVD instruments, we
commenced operations at i-Square, the Group’Group’ss core factory.
Through a four-factory structure centered on i-Square, we
provide a stable supply of high-quality products worldwide.
Sysmex products enjoy an excellent reputation with customers.
We have introduced quality and process management systems
to ensure quality in all processes from the testing and assemblyof components to product testing and shipment.

and others
EuropeSysmex Europe (Germany)

Customer needs

Sysmex France (France)
Sysmex RUS (Russia)
Sysmex Middle East (U.A.E.)
Sysmex South Africa (South Africa)and others
China

Sysmex Asia Paciﬁc (Singapore)

Sysmex Shanghai (Shanghai)

Sysmex India (India)

Sysmex Hong Kong (Hong Kong)

Sysmex emphasizes local raw material procurement and product manufacturing,as this approach allows stable product supply and competitive pricing. In 2012,
we built a new production wing at our Ono Factory in Japan and expanded ourreagent plant in Jinan, China, to capitalize on rapid market growth there. We arefollowing suit by expanding reagent production factories in Singapore in 2014
and Germany in 2015.

Direct sales

Asia Paciﬁc
Sysmex Asia Paciﬁc (Singapore)
Sysmex Indonesia (Indonesia)

In addition to a direct sales and support network, the useof alliances has enabled Sysmex to build a global sales
and support system tailored to meet local characteristics.
In 2013, we converted our distributor in South Korea to a

Indirect sales(Distributors)

Worldwide customers

Production (Instruments)

Sysmex do Brasil Industria e Comercio(Brazil)subsidiary and transitioned to a direct sales and support
organization, and we established a subsidiary in Turkey
in the aim of enhancing business in growth markets. In
2014, we stepped up our direct sales and service systems
in Central and South America. We also have sales andservice agreements in place with Roche and Siemens inareas where we operate through distributors.

Sysmex India (India)
and others

: Sysmex Corporation: Subsidiaries

34

Sysmex Annual Report 2014

Sysmex Annual Report 201435

Research and DevelopmentS

ysmex’s inimitable R&D activities began in 1963 when

Sysmex has extended its business domains beyond

it became the first company in Japan to commercialize

hematology to cover such laboratory test fields as urinalysis,hematology analyzers. Since then, the Company has worked

immunochemistry, clinical chemistry, hemostasis and others.

to improve diagnostic test quality at the microscopic level

We are now working to broaden our R&D activities evenof blood cells by establishing core technologies for particle

further to create new diagnostic technologies for diseasemeasurement or bioassays and developing a range ofmanagement including hematology, immune diseases, infec-“industry-first” laboratory test technologies.

tious diseases, cancer and diabetes.

Sysmex is leveraging the abundant expertise it has culti-

Technopark, the core R&D center for the Sysmex Group,vated in the development of products to bring efficiency tointegrates the different technologies employed in our

the increasingly complicated diagnostic testing environment.

instruments, reagents and software, coupled with joint R&D

Another goal is to contribute to increased efficiency and lower

initiatives, enabling us to constantly incorporate customer

costs not only in the testing laboratory, but also by leveraging

feedback into our product offerings. This congregation of

networks throughout the entire hospital for customers rang-

researchers and engineers in a host of fields—electrical,

ing from small clinics to large medical institutions.

mechanical, biological, chemical and IT, among others—

Sysmex considers R&D to be a key source of Company

encourages interaction and drives the creative fusion thatgrowth, and each year, we invest approximately 10% of net

generates new technologies. Sysmex is also working toward

sales in R&D.

the establishment of a global R&D structure. Centered at
Technopark in Japan, we are building a global R&D structure
linked with other facilities in Japan and overseas, including the
R&D Center Europe, R&D Center Americas and the Diagnostic
Reagent Development Center in China.
As part of our aggressive M&A and alliance activities toexpand our technology platforms for personalized medicine,during the fiscal year ended March 31, 2014, we converted

Management System Designed for Business Optimization
Business Strategy Division

Research Division

ICH Business Unit

We promote optimal business strategies
for the entire Group, formulate and promote strategies across fields, and searchfor businesses and business development
opportunities, including through M&A. In
IVD domains in advanced countries, we
promote strategic planning and alliances,
as well as in emerging markets where
growth is anticipated. Also in the life
sciences domain, in addition to existingproducts and existing businesses such aslab assay, this division handles overall planning and promotion for new businesses.

We aim to acquire technologies thatdeliver an overwhelming competitive
advantage and innovate in new businessdomains. By searching for leadingedge technologies in cell analysis,
protein analysis, genetic analysis andbiological analysis, we aim to acquire new
diagnostic concepts and new technological platforms.

We established this business unit in
April 2012 to specialize in the key nonhematology fields of immunochemistry,
clinical chemistry and hemostasis (ICH).
The ICH Business Unit is designed tohandle the overall management ofactivities in these three fields, including
strategic planning, product planning,product development, reagent production
and data assurance, and to strengthen
our specialized value chain. The unit also
aims to boost business profitability by
managing profitability in the categories of
immunochemistry, clinical chemistry andhemostasis.

R&D Strategic Planning Division
The division’s strategic R&D planning function involves the creation of technology
strategies, the allocation of management
resources based on these strategies, andthe development of a global R&D structure.
This division handles a broad range ofactivities spanning research and development: providing planning and support for
acquiring new technology; supporting
product development and managing
related technological information; engaging in invention identification, filing andoperational maintenance; negotiating
agreements and resolving disputes related
to intellectual property; and conducting
public relations to build networks withrelated institutions in Japan and overseas.

Technology Development DivisionThis division creates systems for carrying
forward and extending the applicationof key technologies used in previous
reagents, ICT, mechatronics and otherproducts, as well as formulating theelemental technologies needed in future
product development. It also conducts
clinical performance trials and other activities aimed at creating new clinical value.

HU Business Unit
This business unit was established in April
2013 as a specialized organization for thehematology and urinalysis fields. In addition to our mainstay hematology field, thisunit performs integrated management of
the urinalysis field, where urine sediment
analysis is our forte, handling strategicplanning, product planning, productdevelopment, reagent production andglobal product introductions.

Functional Structure

Through its focus on improving test quality, Sysmex has established core technologies, developed a range of “industry-first” laboratory test technologies, created advanced and highly valuable diagnostic technologies and is actively engaged in life science R&D.

LS Business Unit
This business unit was established in April
2013 to oversee operations in the life sciences field. Supervising strategic planning,product planning, product development,
reagent production and global productintroductions in the life sciences field, theunit works toward the creation of newtechnologies and products that will aid in
the early detection of cancer and diabetes,
among other diseases, and help to prevent
recurrence or worsening, ensuring thatpatients receive the best care possible.

to subsidiaries two German companies, Inostics GmbH andPartec GmbH. We are also stepping up collaboration with out-

New Management Systemside research institutions to promote innovative technologicalBusiness Strategy Division(Formulates and promotes strategies across ﬁelds, and searches for and develops businesses, etc.)

developments that will create new market opportunities.
In our organizational structure, in April 2012 we

R&D Strategic Planning Division

established the ICH Business Unit to reinforce our base(Formulates technology strategy, prepares global R&D systems and manages intellectual property, etc.)

and promote growth in the key nonhematology fields ofEach business unit handles overall management processes involving
strategic planning, product development and market introduction

immunochemistry, clinical chemistry and hemostasis. In April
2013, we also established the HU Business Unit to oversee the

HU Business Unit

fields of hematology and urinalysis, and the LS Business Unit,

Technology
Development Division

to handle business in the life sciences field. Each business unit

（Elemental technology
development）

is a specialized organization that handles the overall management of its testing fields, including strategic planning, productplanning, product development, reagent production and global

ȉ+HPDWRORJ\ȉ8ULQDO\VLV

ICH Business Unitȉ,PPXQRFKHPLVWU\ȉ&OLQLFDO&KHPLVWU\ȉ+HPRVWDVLVLS Business Unit

product introductions. Through this approach, in each testing

Research
Divisionfield we aim to bolster the level of specialization, as well as to（Searching forleading-edge technology）

ȉ/LIH6FLHQFH

New Businesses, etc.

increase the speed of decision-making and execution.

36

Sysmex Annual Report 2014

Sysmex Annual Report 201437

Purchasing, Production and Logistics

 R&D Facilities

Rigorous quality control and global supply chain management systems allow Sysmex to swiftly provide
a stable supply of products of consistently high quality to customers in more than 170 countries.

Sysmex creates high-value-added diagnostic technologies and develops instruments and reagents mainly at the core
Technopark facility. By enhancing links with research and development centers in Japan and overseas, Sysmex works to develop
innovative technologies that will create new markets.

Technopark (Japan)

R&D Center Americas (the United States)

Based on the concept of the “Creation of ‘Knowledge’ andSysmex established this center in

Its Inheritance,” Technopark was established as the center ofAugust 2013 to promote joint research

R&D activities for the Sysmex Group in 2008, the 40th year ofwith U.S. healthcare institutions inestablishment. In addition to having more than half of its area

personalized and preventive medicine,

dedicated to green space, laboratory and office space is locatedas well as to strategically evaluate

on the same floor, providing an optimal R&D environment.

technologies possessed by local

the Business Support Center for
Biomedical Research Activities (BMA),a core facility in the Kobe Medical
Industry Development Project.

Protein Development Center (Japan)
Our Protein Development Center
employs technology for producing
proteins using silkworms to develop
ingredients for diagnostic reagents.
The center also carries out researchand development with the aim of
improving the quality of proteins andleading to their stable production.

Sysmex New Zealand (New Zealand)
Sysmex New Zealand is a Sysmex Group company that specializes in information technology. Mainly in Asian markets, thecompany develops laboratory
information systems in local
languages and tailored to otherregional requirements.

individual countries.

support. Sysmex stably procures the components and raw

Manufacturing Goes Digital, Reducing Work Timecompany in healthcare field and conducts its procurement

The Kakogawa Factory uses Smart Pro, a production support

activities in a manner that allows customers throughout

system that Sysmex developed in-house, to support factory

the world to use its products with confidence. In 2013, we

associates, manage processes and assist quality manage-

revised our Procurement Policies, which serve as a basis forment. We began using 3D CAD design data created at thecooperation with suppliers on enhancing levels of quality, costdevelopment stage to make work processes more visual,

R&D Center Europe (Germany)

competitiveness and technology, as well as for establishing ahelping to shorten the time employees require to commit

The R&D Center Europe was opened

stable procurement system and advancing CSR initiatives. We

these processes to memory and contributing greatly to theirin 2006 in Germany as the Company’s

also confirm quality and procurement aspects from the R&D

ability to absorb multiple skills. Monitors located alongside

first overseas research facility. This

stage, and select suppliers that are highly cost-competitive.

workbenches depict assembly and other processes in 3D,

center cooperates with research andWe also aim to quickly launch new products into mass

with an audio explanation accompanying each process.

other institutions in the development

production, transforming the engineering chain, including raw

This arrangement makes work processes easier for newof new testing technologies targeting

materials purchasing and through concurrent engineering.

associates to understand, and helps to maintain quality anduseful new technologies.

The BMA Laboratory is located within

system to ensure compliance with the legal frameworks intreatment test products is essential to medical carematerials of a quality appropriate to the development of acompanies in order to quickly acquire

BMA Laboratory (Japan)A

consistent supply of top-quality diagnostic and medical-

Functional Structure

Research and Development

diseases and other problems that areboost productivity.

uncommon in Japan.

Instruments Offering High “Made in Japan” Quality

Partec GmbH Görlitz (Germany)
We converted this company to a
subsidiary in 2013. A pioneer in FCM
technology, Partec has accumulated
leading-edge expertise in the development of FCM products. The company
also has a strong presence in emerging
markets and developing countries in
the area of testing for infectious diseases.

For the manufacture of instruments, we have introduced

networks linking manufacturing facilities to the products

leading-edge production and quality control technologies tothemselves. This configuration automates the final productprovide products that are of high quality and offer high added

adjustment and testing processes, which cuts down signifi-

value. For this reason, we manufacture our instruments incantly on time to shipment.

We also use our information technologies to configure

Japan. We produce internally those parts that use proprietary
technologies or for which stable sourcing is problematic.
This reduces the risk of technology outflows and lessens
procurement risk, while allowing us to maintain stable
quality. For other parts, however, we maintain cooperative

Sysmex Inostics Gmbh (Germany)
This subsidiary possesses highly sensitive PCR technologies for measuringcancer genes circulating in the blood,
as well as other advanced moleculardiagnostic technologies. We converted
this company to a subsidiary in 2013.

relationships with parts makers who can meet our stringent
quality requirements, thereby ensuring a stable supply.
“Made in Japan” and the Sysmex brand have become bywords
for quality, and our products are recognized worldwide for
their reliability.
We are significantly boosting our manufacturing capacity
to meet growing global demand for IVD instruments. To thisend, we commenced operations at i-Square, our new instru-

Diagnostic Reagent Development Center in China (China)
In 2009, Sysmex opened this center,located within Sysmex Wuxi Co., Ltd.,in preparation for our entry in the
immunochemistry field.

ment factory, in June 2014. This move, combined with the
expansion of two factories operated by domestic subsidiaries,
enable us to gradually increase the Group’s instrument
production capacity to three times its former level.
As some 80% of the instruments we produce are destinedfor overseas markets, we are erecting a quality control

38

Sysmex Annual Report 2014

Sysmex Annual Report 201439

Purchasing, Production and Logistics

the production of reagents requiring advanced, specialized

In its reagent production, Sysmex employs thorough quality

immunochemistry, clinical chemistry and hemostasis. Sysmex

management and makes every effort to provide reagentsis also expanding its overseas production bases to meet

i-Square (Japan)

consistently and stably. Our core production facilities ingrowing overseas demand and improve its ability to compete.

Japan are the Ono Factory and the Seishin Factory of Sysmex

The Company currently has nine production facilities in seven

International Reagents, a subsidiary. The Ono Factory handles

countries. By introducing at overseas facilities the expertise in

the mass production of reagents using labor-saving facilities.

manufacturing technologies that we have cultivated and the

The Group’s core instrument facility, which commenced
operations in June 2014, uses quality control systems to
produce highly reliable instruments based on international andindustrywide quality control standards, and the laws and regulations of destination countries. This plant and the Kakogawa

In 2012, we began operating a new automated production line

quality assurance systems that are in place at our Ono andat the plant that makes reagent packages (paper containers

Seishin factories, we are working to achieve a high-quality,

and reagent cartridges), including the concentrated reagent

efficient production system on a global basis.

knowledge that are used in non-hematology fields, such as

used in our flagship XN-Series, which should significantly
increase productivity. Meanwhile, our Seishin Factory handles

Improving Our Global Supply Chain Management
Systems by Reorganizing Logistics Locations andReconfiguring Supply flow
With regard to the physical function of delivering products tocustomers, we are reviewing logistics bases and reconfiguring
the flow of supplies at individual overseas locations to ensure
the stable provision of products to customers around the world.
While maintaining appropriate inventories of instruments madein Japan at each location in which we operate, we will alsoutilize a warehouse facility within i-Square—our new instrument
plant—to deliver products efficiently around the world. For

Functional Structure

Global Reagent Manufacturing to Ensure Stable
Product Supplies

 Purchasing Production and Logistics Facilities

Instrument Production
Factory together provide thecapacity to supply some 500
products to markets aroundthe world and employs
flexible production systems.

Reagent Production Facilities in Japan
Ono Factory

Seishin Factory(Sysmex International Reagents)(Sysmex International Reagents)

The Ono Factory in Japan is dedicated to the production of
about 1,300 reagents, centered on high-volume products for thehematology and urinalysis segments. In 2012, we built a new
production wing at the factory, adding equipment and raising
reagent production capacity to 1.5 times the previous level.
The production lines are divided into some types according tocapacity, and the factory seeks
to simultaneously increase
quality, reduce costs and mass
produce by optimizing automated and manual operations.

The Seishin Factory is mainly responsible for the productionof reagents and draws on wide-ranging production technologies to produce a line of around 800 products ranging fromclinical chemistry to immunochemistry reagents, hemostasis
reagents and reagents for use as quality control materials. The
factory has also constructed
a flexible production system
to meet requirements forhighly diverse, low-volume
manufacturing.

reagents, we have in place a distribution system whereby wemanufacture products in individual countries for timely delivery.
Furthermore, we are revising our package designs. As
well as improvements to make packaging stronger, we are
adopting environmentally friendly reusable packaging andOverseas Reagent Production Facilities
In order to ensure a timely and stable supply of reagents throughout the global market, Sysmex operates reagent factories in Germany,
the United States, Brazil, China, Singapore and India.

recyclable steel packaging. We are also reviewing packing

Americas

EMEA

sizes and improving external descriptions to increase storage

Sysmex operates two reagent factories in the Americas, which
represent the world’s largest market. Establishing a factory in
Chicago in 1993, the Company doubled its capacity in 2007 tomeet growing demand andenhance cost competitiveness.
Another reagent plant wenton line in Brazil in 2000 inanticipation of future growth in
the region.

In Europe, the location of
Sysmex’s first venture overseas,
we established a regent factoryin Neumunster, Germany, in
1993. To meet rising demand forregents, we increased the plant’s
capacity in 2007 and plan to doso again in 2014.

China

Asia Pacific

The first of these was established in Jinan in 1995, followed bya plant in Wuxi in 2003. We have expanded the Jinan Factory,
which in 2012 increased its production capacity to five times
its level in 2010. The Wuxi
Factory was the first operated
by a non-Chinese company toreceive local pharmaceuticalmanufacturing approval.

To meet anticipated future demand growth, in 2014 we will expand
the Singapore Factory, which opened in 1998, enabling us togradually triple output compared with current levels. This factory,
in combination with the reagent
factory in India we establishedin 2007, allows us to provide
a stable supply of high-quality
reagents broadly throughout
the Asia Pacific region.

and shipping efficiency.
In addition to fulfilling our responsibility for providing
products, we will continue forging ahead with efforts to create alogistics structure that contributes to low costs and high quality.

Japan’s Manufacturing ProwessO

ur medical instruments involve numerous parts, each requiring extremely high levels of precision andquality. Sourcing these products is possible thanks to the technological prowess of Japan’s small andmedium-sized parts manufacturers.
Many of Japan’s small and medium-sized companies are world technology leaders, and we have forgedpartnerships with many of these companies, building up a network that delivers win–win results.
The XN-Series, for example, is a product of collaboration with business partners who have strong
technological capabilities and with whom we have relationships going back many years. Such cooperation
resulted in the development of a piercer that can accurately aspirate blood samples measuring only a
few microliters. A special titanium alloy improves robustness and rigidity, and the elaborate and smoothprocessing of its interior surface at a diameter of less than 1 mm enables more precise testing results.

40

Sysmex Annual Report 2014

Sysmex Annual Report 201441

Sales and After-Sales Support

Delivering Specialized, High-Value-Added
Solutions Cultivated in Japan throughout the WorldSNCS is used by many customers and has earned a strong

Sysmex maintains seven branches and 12 sales offices in

the United States, European and other advanced countries, asJapan, constituting a top-class sales and support network inwell as in Asian and other emerging markets and is steadily

the domain of in-vitro diagnostics. We are in the process of

expanding the installed base.

reputation. The Company has launched the SNCS in Japan,

extending to the rest of the world the value-added proposal-

In 2012, we relocated Sysmex America, Inc., our regional

hen testing is interrupted, whatever the reason,technologist can conduct testing efficiently we do not merely

making skills and highly specialized support services we haveheadquarters for the Americas, in order to expand its opera-

physicians become unable to diagnose their patients.

engage in the sales of diagnostic instruments and reagents, but

cultivated in Japan, as we strive to build sales and support

tions. The expansion includes a new multipurpose building

We address this situation by providing after-sale services andprovide total solutions that employ information technology

service networks that are carefully matched to the needs ofthat houses the company’s virtual training studio. The virtual

scientific support, which inspire the trust and confidence ofto network the entire laboratory. This improves healthcare

individual markets.

training initiative provides customers with convenient, on line,

customers throughout the world. Confirming this satisfaction,

services in a number of ways, such as reducing patient waiting

In Japan, the Customer Support Center responds tosurvey results demonstrate that Sysmex has earned a solid

time and providing information on test results to the doctor.

inquiries around the clock, 365 days a year.* Knowledgeable

better meet the needs of North American customers, who are

reputation with its customers for meeting their expectations

At present, we take this overarching approach mainly in our

specialists answer questions not only about instruments

spread over an extensive area.

for instrument performance, as well as for overall service

proposals to customers in developed countries. In contrast,

and reagents, but also about scientific matters. Sysmex has* Service for customers who have specific contracts

performance.

in emerging markets where healthcare demand is risingestablished a system for rapidly dispatching service engineers

In line with ongoing medical advances, healthcare is grow-rapidly in line with economic growth, in addition to providing

by stepping up cooperation between the Customer Support

ing more sophisticated, and treatment regiments are changing

high-quality products without defects, products that have such

Center and Sysmex offices and sales offices across Japan.

and becoming more diverse. Customers in developed countries

specifications as high processing capacity and swift after-sales

are demanding ever more advanced and highly specialized

services are needed. In addition to providing products that

China, Germany and Singapore, and dispatches service engi-

testing, more efficient testing and even higher healthcare

meet regional demands such as these, we operate flexibly byneers to customer premises as necessary. In the United States,

service levels.

combining proprietary and distributor sales networks. In thesewhere customer support functions must cover extensive

ways, Sysmex concentrates on meeting the needs of individual

areas, close collaboration between call centers and serviceof testing to the delivery of results, we strive to shorten the

countries, building confidence and instilling confidence among

engineers allows Sysmex to respond rapidly to customer

lead time between a patient’s arrival at the reception desk andits customers.

requests. In addition, the Company is rolling out on a global

W

Instead of simply aiming to reduce the time from the start

Functional Structure

Sysmex does more than just sell products; we provide maintenance and other technical support,
as well as scientific support to deliver consistently accurate test results and instill confidence.
We offer high added value as a provider of IVD solutions.

instructor-led education on the use of Sysmex products to

Sysmex America, Inc.,

Sysmex operates call centers in Japan, the United States,

scale the Sysmex Network Communication Systems (SNCS),

the delivery of test results. To this end, to ensure that the lab

a support service that connects the Customer Support Center

Networkand customers’ products via the web for the online provisionof remote instrument maintenance and quality control. The

Virtual training studio

Customers

Customer Assessment in the United States (by IMV ServiceTrak™)• Survey of Customer Satisfaction
A survey of customer satisfaction published in 2014 has shown that Sysmex is ranked No. 1 in the United States for instrument
performance meeting expectations.
Instrument Performance Meets Expectations
Industry Avg.
Competitor 3
SysmexCompetitor 2Competitor 1
Competitor 4
A six-point scale was used for the years from 2000 to 2012. This was revised to a 10-point scale in 2013 to 2014.
2000–2012: 1=Very Poor 2=Poor 3=Fair 4=Good 5=Very Good 6=Excellent
2013–2014: 1-3=Very Poor 4-6=Poor/Fair 7-8= Good 9= Very Good 10=Excellent

Sysmex has Rated Highest for the Past 15 Years
5.6

9.5

5.4

9.0

5.2

8.5

5.0

8.0

4.8

7.5

4.6

7.0

4.4

6.5

4.2

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

6.0

9.18
8.63

2013

2014

Sales Strategies

S

ysmex employs sales strategies tailored to the characteristics of the regions and countries where it operates. In Japan, North
America and parts of Europe and the Asia Pacific, we conduct direct sales, with Sysmex salespeople maintaining close relationships
with customers. In other parts of the world—particularly in emerging market areas—we have found indirect sales, which leverages
the long experience and expertise of local distributors, to be an effective approach. In China, for example, we employ more than 100
local distributors. In
Direct sales
66.1%
Latin America andIndirect sales
33.9%
32.0%
.0%
Russia, among other(As of March 31, 2014)
EMEA
1.3%
regions, we have7%
98.7%
Americasalliances in place totake advantage of
China
68.0%
68.0
Japan
the sales networks
operated by leading
100.0%%
global pharmaceutical
39.9%
3
60.1%
%
manufacturers.
Net Sales
40.9%
Asia
¥ 184,538
Paciﬁc59.1%
millionFounded in 1977, IMV continues to be a leading supplier of comprehensive clinical diagnostic and medical imaging market
research reports and site-specific databases for the healthcare industry.

42

Sysmex Annual Report 2014

Sysmex Annual Report 201443

Corporate Governance
Sales and After-Sales Support

Sponsoring Scientific Seminars for
Advancement of Healthcare

was attended by approximately 400 people. At the seminar,

To promote higher levels of healthcare service, Sysmex

clinical testing to doctors, nurses, laboratory technologist andprovides an ISO support service for healthcare institutions

other participants in China. Sysmex now conducts seminars

that are creating ISO management systems. Leveraging theand other activities periodically in Thailand, Indonesia, India

expertise we have gained through ISO 9001 and ISO 14001

and other Asian countries and holds symposiums in EMEA

certification, as well as our experience as a manufacturer

and the Americas.

we provided up-to-date information related to healthcare andof medical instruments, we consult with organizations on
earning certification under ISO 9001 and ISO 15189, as wellas other standards. Our services have been instrumental in
helping a number of customers gain ISO certification.
Sysmex sponsors hematology seminars around the world

S

ysmex
considers reinforcing
corporate governance oneof its most important management topics. We aim to maximize
the overall corporate value of
the Group through management robustness, improved
management speed andefficiency.

to provide physicians and laboratory technologists withinformation on the latest trends in hematology. The Company
began conducting annual seminars in Japan in 1978 andexpanded this program to China in 1998. In 2013, we held theSysmex 16th Scientific Seminar in China in Chengdu, which

Sysmex Network Communication Systems
SNCS puts the Customer Support Center on line, enabling Sysmex to manage the precision of customer equipment in real time, automatically monitor equipment and provide information over the web.


Online Quality Control
Precision management data is transmitted automatically over theInternet on a daily basis. The system conducts sample surveys todetermine precision. Customers can browse up-to-the-moment
survey results.

Sysmex Network Communication Systems
Hospital

Sysmex

Network

Online Support
Analyzers retain a host of data, such as error logs, numberof operations and set values. This information is transmitted
automatically to our server, allowing us to understand the statusof customer equipment and, if conditions warrant, offer advice tominimize potential damage.

Customer Support Center 1. Online Quality

Automated hematology
analyzer XN-Series andother Sysmex instruments

Control
2. Online SupportPreventive Maintenance Checks
When an instrument shuts down, information on the numberof operations is automatically sent to Sysmex, so that we candetermine replacement intervals based on the rated numberof operations.



Failure Prediction Function

3. Preventive
MaintenanceChecks4. Failure
Prediction
Function

Thinking Forward
to More Robust
GovernanceNote: Such services may not be available on some products and incertain regions.

Linking the failure prediction function with field support enables
us to remotely monitor the status of the analyzer componentsof each instrument. We provide preemptive maintenance at thefirst sign an instrument is behaving in an abnormal fashion.

44

Sysmex Annual Report 2014

Sysmex Annual Report 201445

Corporate Philosophy and Core Behaviors

Corporate GovernanceOur corporate philosophy, the “Sysmex Way,” consists of three parts: the Mission, which deﬁnes
our social raison d’être and states how we hope to contribute to society; the Value, which describes
the values and management style that we must abide by; and the Mind, which expresses the mindset and code of conduct that every employees within the Sysmex Group must observe.

Shaping the advancement of healthcare.

The Board of Auditors consists of four corporate auditors,

Sysmex has adopted the corporate auditor system. The cur-two of whom are outside auditors. The corporate auditors

rent management organization consists of nine members ofattend the Managing Board and Steering Committee meet-

the Managing Board (one of whom is an outside member ofings and maintain systems for appropriately supervising

the Managing Board), four corporate auditors (including two

the conduct of business on the part of the members of theoutside auditors), and 18 executive officers (seven of whom

Managing Board. The corporate auditors also maintain close

are also members of the Managing Board), and the Company

communications with the Internal Audit Office, exchanging

has adopted the executive officer system to increase theinformation and opinions as necessary, and confirm and evalu-

speed of decision making in the conduct of business andate the appropriateness of business execution. The Board of

respond quickly to changes in the business environment. In

Auditors will continue to enhance management soundness

addition, by appointing outside members of the Managing

by engaging in appropriate supervision of the execution ofBoard, we have reinforced the Managing Board supervisorybusiness as stipulated by law. The Board of Auditors works

function, and we have strengthened the auditor supervisory

closely with the accounting auditors on the audit plans reportfunction by appointing external auditors.

(annual) and the audit results reports (annual), exchanging

Corporate GovernanceManagement Organization

information and opinions as necessary, such as when conduct-

We continue to create unique and innovative values,
while building trust and conﬁdence.

With passion and ﬂexibility, we demonstrate
our individual competence and unsurpassed teamwork.

Matters Concerning Business Execution,
Auditing, Appointments, Supervision andOther Functions

ing internal control audits related to financial reporting.

The Managing Board consists of seven members. The board

audit. In addition to conducting an audit of the entire Sysmex

meets regularly once a month to deliberate on importantGroup, the Company maintains an environment that makes

management issues and convenes extraordinary meetings

it possible to rapidly cope with changes in the accounting

as necessary.

system. The Company has contracts in place with several law

The Global Strategic Committee consists of the chairman
and CEO and executive officers. As a rule, this committee

The Company has contracted with Deloitte Touche
Tohmatsu LLC to perform a certified public accountants

offices and maintains a structure to solicit and obtain advice
on important matters as necessary.

meets once a month to deliberate on the Group’s manage-

Core Behaviors
To Our Customers

To Our Shareholders

We deliver reassurance to our customers, throughOur shareholders can rest assured that we will continue tounmatched quality, advanced technologies, superior support,

improve the soundness and transparency of our manage-

and actions that consistently reflect the viewpoint of ourment policies, while promoting information disclosure andcustomers.

close communications.

ment direction and important strategic issues.

Internal Control Systems

chairman and CEO to deliberate on important matters con-Systems for Ensuring That the Execution of
Duties by Members of the Managing Board and
Employees Is Compliant with the Law and the
Articles of Incorporation

cerning the Group’s business.

Sysmex defines compliance as “the conduct of open and

The Steering Committee consists of the chairman and
CEO and executive officers. The committee meets once amonth, in principle, serving as a consultative body to the

The Group Management Reporting Committee consists

aboveboard business activities on the basis of observance ofof management, in order to achieve sustainable growth andof the chairman and CEO and executive officers, directors oflaws and regulations and high ethical standards” and main-increased shareholder value.

overseas regional headquarters, people in charge of domestic

tains a system to ensure compliance as described below.

To Our Employees

affiliated companies and division managers. The committee

The Company is promoting and enhancing GroupWe honor diversity, respect the individuality of each em-

To Society

meets once a quarter, in principle, reporting important mat-compliance, as it believes compliance countermeasures areployee, and provide them with a workplace where they can

We carry out our business in strict compliance with laws

ters concerning the Group’s operations.

the first and most important way to maintain society’s trust

realize their full potential.

and regulations, as well as in adherence to high ethical

We constantly look out for our customers’ true needs, andseek to generate new solutions to satisfy those needs.

We commit ourselves to a consistent yet innovative style

The Operating Committee consists of managers of divi-and counter risk. The Company implements and strengthens
compliance in the corporate group under the control of acompliance officer and compliance committee. The Company

We value the spirit of independence and challenge, provide

standards.

sions. The Committee meets once a month to find solutions

employees with opportunities for self-fulfillment andAs a responsible member of society, we play an active roleto cross-functional problems.
In the fiscal year ended March 31, 2014, the Managing

rigorously ensures compliance through education and training

Board met 18 times, the Global Strategic Committee 16 times,

for members of the Managing Board and employees, promotes

To Our Business Partners

the Steering Committee 19 times, the Group Management

the rapid detection and correction of violations of the law or

We deliver commitment to our client companies throughReporting Committee four times and the Operating

the Articles of Incorporation by means of an internal compli-

broad-ranging partnerships.

Committee 12 times to address matters relating to manage-

ance related reporting system, and conducts audits of the

We strive to be a company that can grow in step with ourment strategy and important issues facing the Group.

compliance structure by means of the Internal Audit Office.

growth, and reward them for their accomplishments.

in resolving environmental issues and other problems that
impact our society today.

trade partners, through respect and mutual trust.

46

Sysmex Annual Report 2014

Sysmex Annual Report 201447

Corporate Governance

Company respects the autonomy of the management of

Based on our Corporate philosophy, the “Sysmex Way,”is for every Sysmex employee to be aware of compliance assubsidiaries and ensures the appropriateness of businesswe define our view of compliance as “respecting laws andan ongoing factor and to be able to apply this understanding

The Company appropriately retains and manages informa-

activities throughout the corporate group by such means asregulations and going about our business boldly with a strong

in their work. Sysmex will continue to ensure thoroughtion relating to the execution of duties by members of theperiodic reporting on the details of the business of subsidiar-sense of ethics.” In accordance with this definition, we havecompliance to remain a Company that stakeholders consider

Managing Board in accordance with document management

ies and advance discussion concerning important matters.

established a Global Compliance Code, in which particularly

highly trustworthy.

With regard to the management of subsidiaries, theThe ultimate goal in the Company’s pursuit of complianceimportant conformance rules for all executives and employees

regulations and maintain the information in a state available
for inspection as necessary.

Assignment and Independence of Employees toAssist Corporate Auditors

to abide by are compiled. We conduct training programs to

Risk Management

ensure the thorough permeation of the code within the orga-

To control groupwide risk management activities, Sysmex

Regulations Concerning the Management of Risk
and Other Systems

Although the Company does not assign full-time staff tonization. The code also applies to overseas Group companies,

established a Risk Management Committee, which is chaired

assist corporate auditors in the performance of their duties,

constructing an integrated compliance structure for the entire

by a Risk Management Officer, the Group’s chief executive in

To maintain a structure concerning risk management, theemployees of the Internal Audit Office cooperate with theGroup. We established the Compliance Committee in 2013.

charge of risk management. The Risk Management Committee

entire Group complies with risk management regulations

corporate auditors to conduct efficient audits at important

In addition, we are encouraging compliance in a manner that

identifies major risks having the potential to significantly

established by the Risk Management Committee for theplaces of business.

reinforces the relationship between people responsible for

impact the Group’s business and consistently observes theintegrated management of risk throughout the Company. The

At the request of the corporate auditors, the Company

Group compliance and the people responsible for compli-

results of risk response and monitoring by individual divisions

Company endeavors to discover foreseeable risks, select theprovides full-time staff to assist the Board of Auditors. In suchance at affiliated companies. In 2014, we revised our global

and affiliated companies.

most important of these risks, clarify the sections responsible

case, the members of the Managing Board discuss with thecompliance code, adding text to describe our thoughts on

We have constructed a system to ensure compliance withfor coping with risks, establish countermeasures and engage

corporate auditors in advance matters such as the transfer of

ethics in relation to research and development, prevention

laws and regulations around the world with regard to quality,

in measures to mitigate risks.

such support staff.

of bribery, adherence to international guidelines such as theand we act accordingly. Sysmex is pursuing ISO certification,

Universal Declaration on Human Rights, as well as research

moving toward the establishment of a groupwide quality man-

Systems to Ensure That Members of the Managing
Board Execute Their Duties Efficiently

and development. We also set forth a bylaw for revising thisagement system (QMS). The Company has introduced quality

code once every two years, in principle, to respond to changes

training to promote an understanding of QMS, build individual

The Company has positioned the Managing Board as theSystems for Reporting to the Corporate Auditors
and Systems for Ensuring Effective and Efficient
Auditing by the Corporate Auditors

in our internal and external environments.

employee awareness of these systems and ultimately raise

institution to make important management decisions andIf a member of the Managing Board discovers a violation of

To promote and supervise compliance activities, as an

quality control levels. In addition to quality policy training forsupervise the execution of the Company’s business affairs.

the law or the Articles of Incorporation or a material fact thatinternal reporting system Sysmex has established “Campanula

all employees groupwide, we also conduct specialized quality

The Company has introduced the executive officer system toposes risk of causing significant damage to the Company, theLines” as points of contact for all Group employees in Japan

training for specific departments and job types. Furthermore,be capable of making swifter operating decisions and respondmember of the Managing Board is responsible for promptly

for advice or questions on any compliance issues. Employees

to share quality-related information throughout the Group andquickly to changes in the business environment.

reporting that fact to the Board of Auditors.

can contact these two lines—internal and external—for

reinforce our systems, each year we hold a conference attended

advice or to make are report via telephone, post or e-mail. All

by Sysmex headquarters, each regional headquarters andWith respect to the management of business, theThe corporate auditors attend Managing Board and other

Company ensures the efficient execution of business inimportant meetings, read important documents such as

information received is handled anonymously to protect thepeople from quality-related divisions at affiliated companies.

accordance with the organization regulations, scope ofapproval requests, and request explanations from members of

personal information of those providing the information andWe make it a rule to disclose any information that we

authority regulations, and approval procedure. The Company

the Managing Board and employees as necessary.

ensure against any disadvantageous treatment. We have also

believe will affect investment decisions in light of our own

establishes mid-term plans and annual management plans,

set up internal reporting lines at Group companies overseas.

standards, as well as to observe applicable laws and regula-periodically confirms the progress made with those plans, andSysmex strives to reinforce its security export control

tions concerning securities trading and the Rules on Timely

system based on the Security Export Control Regulations, thor-

Disclosure of Corporate Information by the Issuer of Listed

oughly verifying the destinations and purposes of its exports.

Security and the Like established by stock exchanges.

takes any necessary measures.

Corporate GovernanceComplianceSystems for the Retention and Management ofInformation Relating to the Execution of Duties by
Members of the Managing Board

Systems to Ensure the Appropriateness of Business
Activities in the Corporate GroupIn the fiscal year ended March 31, 2014, we conducted acompanywide e-learning program on security export control

procedures to ensure the ongoing trust of a wide range

The Company ensures compliance in accordance withand export administration regulations in the United States toof stakeholders.

the compliance code applied to all the members of theensure thorough awareness of controls. We also worked toManaging Board and employees of companies in theraise the consciousness of managers and people responsible forGroup. In conformance with regulations established withdepartments that conduct audits. Furthermore, to strengthen

respect to risk management, the Company maintains

the security export control system for the Group as a whole, wegroupwide risk management systems based on thoseare introducing management systems that link with enterpriseregulations. The Internal Audit Office conducts groupwide

resource planning (ERP) systems at regional headquarters

internal audits.

overseas in an effort to ensure management thoroughness andSysmex will reinforce its risk and quality management

increase efficiency.

48

Sysmex Annual Report 2014

Sysmex Annual Report 201449

Corporate GovernanceHisashi Ietsugu

Kazuya Obe

Chairman, President and CEO

Member of the Managing Board and Senior Executive Officer
Managing Director
International Business Management

Sep. 1986 Joined the Company, Member of the Managing Board
Mar. 1990 Member of the Managing Board and Senior Executive Officer
Managing Director
Apr. 1996 Member of the Managing Board and Senior Executive Officer
Senior Managing Director (Representative Director)
Jun. 1996 President and CEO
Apr. 2013 Chairman, President and CEO (current)

Masayoshi Hayashi
Member of the Managing Board and Senior Executive Officer
Senior Managing Director
Feb. 1972 Joined the Company
Jun. 1997 Member of the Managing Board
Executive Vice President of Business Development
Apr. 2005 Member of the Managing Board and Executive Officer
Apr. 2007 Member of the Managing Board and Senior Executive Officer
Managing Director
Apr. 2011 Member of the Managing Board and Senior Executive Officer
Senior Managing Director (current)

Yukio Nakajima

Front row, from left: Masayoshi Hayashi, Hisashi Ietsugu, Yukio Nakajima
Back row, from left: Kenji Tachibana, Mitsuru Watanabe, Koji Tamura, Kazuya Obe, Kaoru Asano, Susumu Nishiura

Member of the Managing Board and Senior Executive officer
Senior Managing Director
Corporate Business Planning, Human Resources & General Affairs
Corporate Executive Office
Apr. 1973 Joined the Company
Jun. 1999 Member of the Managing Board
Executive Vice President of Corporate Business Planning
Apr. 2001 Member of the Managing Board
Executive Vice President of Corporate Business Planning
Vice President of Corporate Communication
Apr. 2005 Member of the Managing Board and Executive Officer
Vice President of Corporate Business Planning
Apr. 2009 Member of the Managing Board and Senior Executive Officer
Managing Director
Apr. 2013 Member of the Managing Board and Senior Executive Officer
Senior Managing Director (current)

Apr. 1991 Joined the Company
Apr. 1996 President of TOA Medical Electronics (Europe) GMBH
(present Sysmex Europe GMBH)
Oct. 2002 Chairman of the Board of Sysmex Corporation of America(present Sysmex America, Inc.)
Apr. 2005 Executive Officer
Executive Vice Chairman & CEO of Sysmex America, Inc.
Apr. 2009 Member of the Managing Board and Executive Officer
Apr. 2013 Member of the Managing Board and Senior Executive Officer
Managing Director (current)

Corporate GovernanceMembers of the Managing Board

Mitsuru Watanabe
Member of the Managing Board and Senior Executive Officer
Managing Director
HU Business Unit
Apr. 1980 Joined the Company
Apr. 2005 Executive Officer,
Executive Vice President of R&D Strategic Planning
Apr. 2009 Executive Officer in charge of R&D Strategic Planning
Jun. 2009 Member of the Managing Board and Executive Officer
Apr. 2013 Member of the Managing Board and Senior Executive Officer
Managing Director (current)

Kaoru Asano
Member of the Managing Board and Senior Executive Officer
R&D Strategic PlanningManager of Central Research Laboratories
Aug. 1987 Joined the Company
Apr. 2009 Executive Officer, Manager of Central Research Laboratories
Apr. 2011 Executive Officer
Executive Vice President of R&D Strategic Planning
Apr. 2013 Senior Executive Officer
Manager of Central Research Laboratories
Jun. 2014 Member of the Managing Board and Senior Executive Officer (current)

Kenji Tachibana
Koji Tamura
Member of the Managing Board and Senior Executive Officer
Managing Director
LS business Unit, New Business Development
Sep. 1990 Joined the Company
Apr. 1993 President of TOA Medical Electronics(Europe) GMBH
(present Sysmex Europe GMBH)
Jun. 2001 Member of the Managing Board
Executive Vice President of International Business Management
Apr. 2003 Member of the Managing Board
Executive Vice President of International Business Management
Vice President of IT Business Strategy Development
Apr. 2005 Member of Managing Board and Executive Officer
Apr. 2009 Member of the Managing Board and Senior Executive Officer
Managing Director (current)

Member of the Managing Board and Senior Executive officer
Business Strategy Development
Executive Vice President of Business Strategy Development
Mar. 1980 Joined the Company
Apr. 1998 President of Sysmex Singapore PTE Ltd(present Sysmex Asia pacific Pte Ltd.)
Apr. 2011 Executive Officer
Executive Vice President of IVD Business Development
Apr. 2013 Senior Executive Officer
Executive Vice President of Business Strategy Development
Jun. 2014 Member of the Managing Board and Senior Executive Officer
Executive Vice President of Business Strategy Development (current)

Susumu Nishiura
Member of the Managing Board (Outside)
Apr. 1969 Joined TOA Electric Co., Ltd. (presently TOA Corporation)
Jun. 1998 Member of the Managing Board
Jun. 2004 Member of the Managing Board and Senior Executive Officer
Managing Director
Jun. 2008 Member of the Managing Board and Senior Executive Officer
Senior Managing Director
Jun. 2010 Retired from TOA Corporation
Jun. 2013 Joined the Company, Member of the Managing Board (current)(As of June 20, 2014)

50

Sysmex Annual Report 2014

Sysmex Annual Report 201451

Corporate GovernanceCorporate Auditors

Executive Officers

From left: Kuniaki Maenaka, Katsuo Uhara, Masami Kitagawa, Koichi Onishi

Front row, from left: Junzo Yamamoto, Michiaki Ishida, Takashi Goda, Yukio Hamaguchi,
Back row, from left: Hiroshi Nagao, Yukitoshi Kamao, Keiji Fujimoto, Iwane Matsui, Ikuo Otani, Hiroshi Kanda, John Kershaw

Katsuo Uhara

Kuniaki Maenaka

Michiaki Ishida

Iwane MatsuiStanding Corporate Auditor

Corporate Auditor (Outside)

Mar. 1981 Joined the Company
Apr. 1993 President & CEO of TOA Medical Electronics (USA), Inc.
(present Sysmex America, Inc.)
Apr. 2005 Executive Officer, Executive Vice President of SCM
Apr. 2006 Executive Officer, Executive Vice President of SCM
Apr. 2008 Executive Officer, Executive Vice President of SCM
Apr. 2011 President and CEO of Sysmex TMC Co., Ltd.
Jun. 2012 Standing Corporate Auditor of Sysmex Corporation (current)

Apr. 1975 Joined Price Waterhouse (present Japan Assurance Arata)
Sep. 1977 Joined Tohmatsu Awoki & Co.
(present Deloitte Touche Tohmatsu LLC), Osaka OfficeJun. 1989 Partner
Sep. 2010 Retired from Deloitte Touche Tohmatsu LLC
Jun. 2012 Joined the Company, Corporate Auditor (current)

Senior Executive Officer
ICH Business Unit

Executive Officer
Executive Vice President of International Business Management

Takashi Goda

Keiji Fujimoto

Senior Executive Officer
Business Management (Japan)
Sales & Marketing

Executive Officer
Regulatory Affairs & Quality Assurance
Scientific Affairs
Customer Support

Masami Kitagawa
Standing Corporate Auditor
Apr. 1975 Joined the Company
Apr. 2005 Executive Officer
Executive Vice President of Sales & Marketing Development
Apr. 2009 Executive Officer
Executive Vice President of Business Management (Japan)
Apr. 2010 Executive Officer
Apr. 2011 President and CEO of Sysmex International Reagents Co., Ltd.
Jun. 2012 Standing Corporate Auditor of the Company (current)

Junzo Yamamoto

Koichi Onishi
Corporate Auditor (Outside)
Jul. 1971 Joined Kobe Steel Ltd.
Jun. 2002 Officer
Apr. 2004 Senior Officer
Apr. 2007 Executive Officer
Jun. 2010 Retired from Executive Officer of Kobe Steel Ltd.
Jun. 2010 President of Nippon Koushuha Steel Co., Ltd.
Jun. 2013 Executive Corporate Adviser
Jun. 2014 Joined the Company, Corporate Auditor (current)(As of June 20, 2014)

Executive Officer
Instrument Production
SCM

Ikuo Otani

Yukio Hamaguchi

Yukitoshi Kamao

Executive Officer

Executive Officer
Executive Vice President of Corporate Business Administration

Executive Officer
Executive Vice President of Human Resources & General Affairs

Hiroshi Kanda
Executive Officer
Executive Vice President of ICH Business Unit Hemostasis
Product Engineering

Hiroshi Nagao
Executive Officer
Executive Vice President of SCM

John Kershaw
Executive Officer
President and CEO of Sysmex America, Inc.
(As of June 20, 2014)

52

Sysmex Annual Report 2014

Sysmex Annual Report 201453

Sysmex Value
Corporate GovernanceOperating Risks

Product Quality
The instruments and reagents that Sysmex supplies must beOverseas Sales

extremely reliable, so the Company has introduced a compre-

Sysmex sells to overseas customers through its overseas

hensive quality management system. However, earnings could

affiliates and distributors. For this reason, Sysmex hedges

be affected if problems with product quality were to arise

against the risk of currency fluctuations through exchange

nevertheless.

contracts and other means. Nevertheless, the Company’s

quality in accordance with international standards, suchexchange fluctuations. The proportion of consolidated net

as ISO 13485, and local laws and ordinances, such as thesales contributed by overseas sales is rising each year, fromPharmaceutical Affairs Law. Sysmex reviews on a daily basis

70.5% in the fiscal year ended March 31, 2012, to 72.4% in the

product information from Japanese and overseas markets,

fiscal year ended March 31, 2013, and 78.2% in the fiscal year

as well as from within the Company; collates technicalended March 31, 2014.

information that may improve design quality; and implements
rigorous quality checks at the start of mass production andforex rates of US$1 = ¥100 and €1 = ¥135.

prior to product launch.

The Impact of Healthcare System Reform

Stable Product Supply

Against a backdrop of a sharp decline in the birthrate andSysmex markets its products to customers in more than 170

rapid aging of the Japanese population, advances in medical

countries and works to ensure the stable supply of thesetechnology, increased demand from patients for a better

products to customers. The Company might experience dif-quality of life (QOL), and other changes in the healthcare

ficulties with procurement if, for example, business operations

environment, Japanese healthcare system reform continues.

were suspended at suppliers or the supply of raw materials

Such reforms are designed to optimize healthcare costs

was interrupted. If production facilities sustained damageand efficiently provide high-quality healthcare services. The

due to large-scale natural disasters, fires or other major

Company’s earnings and financial position could be affected*

calamities, our ability to supply products to the market couldby such healthcare system reforms.

be impaired.

Amid ongoing healthcare cost optimization measures andoundedin Kobe more than 40
years ago, Sysmex is now
undergoing a transformation. The
Company is moving its operations
to a new stage, in order to fulfill its
social responsibilities and contribute to a comfortable and healthysociety, thereby enhancing
corporate value.

To avoid this situation, Sysmex works to maintain productoperating results and financial position are affected by foreign

As of its May 2014 announcement, the Company assumes

F

For these reasons, Sysmex hedges this risk by sourcing

demands for greater efficiency in hospital management, more

raw materials from multiple companies. We are also enhanc-

advanced medical care and new clinical testing procedures,ing initiatives to prevent damage to production bases and to

Sysmex will boost its investment in the life science field,

restore facilities in the event damage is incurred.

including definitive diagnostic tests for cancer. We will also
ing total solutions that combine instruments and reagents,

Measures to Counter Risks Associated with
the Use of Information Systems

information technology and after-sales support.

Sysmex employs information technology in its decision-mak-strive to meticulously respond to diversifying needs by provid-

ing procedures, such as transmitting information, supporting* The Japanese medical fee system is amended every other year. The impact
on Sysmex of the most recent revisions, in 2014, was slight. Diagnostic
tests are covered by a fee for the provision of the test, unlike the fixed
reimbursement prices set for pharmaceuticals. Therefore, any changes
made to test fees by amendments to the medical fee system should nothave a direct effect on Company earnings.

core businesses and completing approval documents via the
Company’s internal network.
The Company has therefore introduced countermeasures
to minimize the potential operational impacts of network or

Striking Forwardwith Renewed
Vigor

information system disruption, computer viruses or unauthorized external access to information systems. Sysmex has inplace secondary, alternate network routes; implements dailysystem administration procedures; runs security measures
including virus gateways; and works to reinforce its internal
controls, for example by controlling access through strict user
management procedures and fingerprint authorization.

54

Sysmex Annual Report 2014

Sysmex Annual Report 201455

Brand Equity

their patents’ contributions to business, including bonuses

Intellectual Property Activities

for patent awards and based on patent performance.

Sysmex seeks to boost brand equity through careful attention to its trademarks, patents and otherintellectual property rights.

Japan, the United States and EMEA. We are striving to ensure

In line with its expanding business domains and global devel-also acquiring patent rights in the rapidly developing China

he Sysmex corporate logo expresses our deep commitment

opment, Sysmex has established basic principles to share withand Asia Pacific regions.

to pioneering efforts as a frontrunner in healthcare as we

employees its fundamental thoughts on intellectual property

In recent years, counterfeit Sysmex reagents have been

continue to develop innovative testing and diagnostic tech-activities and do its utmost to strengthen the Group throughdiscovered in China, Indonesia, Malaysia and other countries.

nologies to raise the level of human health and instill greater

these activities.

The use of such counterfeit reagents cannot guarantee theT

Sysmex holds 1,801 patents worldwide, concentrated in

Sysmex ValueThe Sysmex brand is a symbol of our efforts to advance the Company to the next stage.
The brand also signifies a promise to all stakeholders of our efforts to fulfill their expectations.

worldwide flexibility in R&D and operational development byconfidence. The shape reminds us of the infinity symbol, “∞,”In accordance with these basic principles, thereliability of testing results and, in some cases, can be harmful

and illustrates the unlimited possibilities of Sysmex. The motif

Company’s liaises with R&D divisions, globally uncovers

to patients’ health. Sysmex continuously monitors markets for

evokes the evolution of life from the ocean to the land as welllatent intellectual property opportunities and surveys thecounterfeit reagents. When they are discovered, we respondas the landscape of Kobe, the birthplace of Sysmex.

intellectual property rights of third parties. We also define

thoroughly. We seek cooperation from local governments and,

Sysmex products and services are used by healthcare

clearly the basic policy on handling intellectual property

when necessary, we bring cases to court.

institutions in more than 170 countries. We also have a diverse

for the Sysmex Group and strive to increase the efficiency

As our business has grown globally and our presence has

range of stakeholders, including the business partners with

with which we manage these assets in order to maximize

increased, cases have arisen of other companies imitating ourwhich we have alliances in place and conduct joint research,

their value.

company name and logo. In such cases, we take a firm standto prevent deterioration of our brand value.

and the shareholders and regional communities that support

In addition to reinforcing the liaison function (supporting

our activities. The Sysmex brand conveys our determination

idea generation, converting intellectual property into rights

to enhance our corporate value to contribute to society andand leveraging these assets), Sysmex takes a proactive

its intellectual property management and supporting themeet the expectations of stakeholders throughout the world.

stance on intellectual property education activities, whichknowledge-building efforts of its employees. We believe

are part of our effort to quickly convert research successes

that persevering in these areas will help us sustain our

into valuable intellectual property rights. We also have inglobal competitiveness.

As a research-driven company, Sysmex is reinforcing

place incentive schemes for inventors to reward them for

Patents Held, by Region

Patent Applications
J

Japan

J

Overseas300

Asia Paciﬁc 2%

250

China 11%

35

Japan 42%

196

200
150

455

100
50

2005 2006 2007 2008 2009 2010
(Years ended March 31)

Sysmex Annual Report 2014754

As of March 31, 2014

EMEA 25%

0

56

1,801

2011

2012

2013

2014

359
Americas 20%

Sysmex Annual Report 201457

Socially Responsible Activities

long-term nursing care responsibilities in Japan. In this way,by himself, Sysmex and others. This year, the foundation

the Company is working to improve its systems in support ofcelebrated its 30th anniversary of establishment by increasing

a better work-life balance. In 2009, we opened Sysmex Kids’

its research promotion. Since its inception, the foundation has

Park, an internal childcare facility where parents can go aboutprovided support for around 320 research projects.
Sysmex provides funds to the Kobe University School of

their work assured that their children are being nurtured in an

W

Medicine for an endowed course in laboratory medicine.

appropriate care-giving environment.
e believe that our corporate responsibility involves

recruiting and stationing them regardless of nationality,

delivering products that are consistent with thegender or physical disability.

The purpose of the course is to contribute to the advance-

These initiatives are being adopted at overseas locations,as well. Sysmex Europe and Sysmex Germany are particularly

ment of diagnosis and medical care by developing evaluation

Sysmex believes that recruiting, retaining and developing

proactive in supporting child-rearing and health promotion

methods for new clinical testing in advanced medical fields.

contribute to a healthy and prosperous society. To this end,

human resources is among the most fundamental of manage-

measures. Sysmex America aims to provide an excellent

Sysmex officially registered as a member of the United

Sysmex fosters a corporate culture where each employee

ment tasks. The Company strives to create an environment

workplace for its employees. Evincing the strong ties between

Nations Global Compact in 2011, thereby demonstrating ourcan feel a sense of fulfillment in their work and emphasizes

that encourages individual employees to develop their

the company and its employees, in the fiscal year ended

increased emphasis on activities pertaining to corporate social

excellent communications with all stakeholders as it conducts

strengths. In addition, Sysmex supports individual diversity

March 31, 2014, Sysmex America was selected in the Chicago

responsibility (CSR). The Global Compact was first announced

its corporate activities.

and accordingly works to build an atmosphere that encour-

Tribune Top Workplaces 2013 survey of regional organizations,by then Secretary-General Kofi Anan in an address to The

ages autonomy and a spirit of challenge, as well as a systemsponsored by the Chicago Tribune.

World Economic Forum in January 1999, and was officially

Sysmex brand and conducting business activities thatlaunched at UN Headquarters in New York in July 2000. By

that rewards employees for their successes. To this end, weDeveloping Human Resources

believe it is management’s responsibility to nurture individual

Sysmex fosters a corporate culture where employees
can feel a sense of fulfillment in their work, based on
mutual agreement and common understanding.

strengths and maximize them through incorporation into theSocial Contributions

joining the Global Compact, business and non-business entities commit to upholding 10 principles in the areas of humanrights, labor, the environment and anticorruption.

At present, around 50% of Sysmex Group employees are

system that links “assignment and transfer,” “evaluation andSysmex is involved in healthcare, with its headquarters in Kobe but conducting operations andmaking social contributions on a global scale.

stationed at overseas companies. As it becomes more global,

feedback,” “cultivation and education” to cultivate human

Sysmex contributes to the advancement of medical care andvoluntarily take part in a fund-raising campaign organized by

the Company will attract an even greater range of personnel

resources in a systematic and effective manner. The education

supports activities related to science, culture and the environ-the Leukemia & Lymphoma Society (LLS), a large-scale NPO.

from an increased diversity of countries and cultures. Sysmex

and training program comprises three types of training—selec-

ment in a manner befitting a global healthcare company.

Their efforts to attract donors through unique event- andoverall organization. Against this backdrop, in 2013 Sysmex
Corporation introduced a new human resource development

Sysmex Value

We aim to instill confidence in stakeholders throughout the world. In accordance with beliefs
firmly held since our founding, as a healthcare specialist we work toward a healthy and prosperous society.

Since 1984, Sysmex has provided assistance for research

Sysmex is also a proactive participant in a variety of charitable initiatives. For example, employees in the United States

web-based efforts have contributed substantially to thehas codified particularly important rules and action guidelines

tive, rank-based and elective—designed to nurture personnel

for compliance that it expects executives and employees toin a planned and gradual manner. Since 2012, we haveinto electronic measuring technology through the Nakataniorganization’s fund-raising efforts. In recognition of theseadhere to in the Global Compliance Code. This code defines

promoted exchanges of Japanese and overseas personnel

Foundation for Advancement of Measuring Technologies in

efforts, in March 2014 our U.S. subsidiary was ranked for theprohibitions on various types of discrimination and proscribes

by instituting the Global Personnel Exchange Program for

Biomedical Engineering. The foundation’s goal is to contribute

sixth consecutive year on the Companies That Care Award,

unjust working conditions. We strive to adhere thoroughly tostrengthening ties through deeper mutual understanding.

to the development of Japan’s economy and society and towhich is sponsored by Companies That Care, a U.S. NPO. This

these principles and work to ensure fair working conditions

As part of its efforts to develop a positive working

improve the quality of life (QOL) of the Japanese people. The

annual award honors companies with the characteristics ofa “company that cares,” including social contributions andsustaining a good work environment.

and treatment. Sysmex aims to provide a working environ-environment, Sysmex has also introduced flex-time systems tolate Taro Nakatani, the Company’s founder and first president,

ment that is amenable to a wide variety of human resources,

enable employees to adjust their work hours for childcare andestablished the Nakatani Foundation using funds contributed

Aiming to Popularize a Simple Test for HIV/AIDS

Evolve as an Attractive Company
Evolve into an attractive company by developing human resources and a culture to generate high value
Human resources (enhance individual skills)

Partec, which joined the Sysmex Group in September 2013, is a pioneer in flow cytometry technology. The products that Partec provides
are compact and portable, suiting them for use even in emerging and developing countries where medical treatment facilities may belacking. Partec has acquired a particularly high share of the market for testing for HIV/AIDS in Africa. Going forward, we look forward tocontributing to improved healthcare environments in emerging and developing countries.

System (respect diversity, rules)
Customer: Mr. Royal Orr (Organization: Highlands Hope)

GlobalManagement

Understanding

Transparency

Autonomy

Teamwork

Equal opportunity

Training

Foster a positive corporate climate, create original value and oﬀer trust and conﬁdence to stakeholders

Oﬀer job satisfaction and ideal working conditions

58

Sysmex Annual Report 2014

Ensure support from diverse stakeholders“We serve more than 2,000 HIV+ patients in Tanzania. Partec’s instruments’ promise of portability and ability to facilitate a large volume ofpatient service between calibrations was perfect for helping us to bringcare closer to our patients, especially mothers and young children in
the villages. We are very satisfied to date with both the lab-bench andportable versions of Partec CD4 and CD4% counters (which are usedin diagnosing and monitoring HIV/AIDS). Our successful piloting of aPartec instrument has garnered great interest from health officials in
Njombe, as well as in the region of Tanga. For the future, we would liketo explore a number of possibilities with Sysmex.”

Sysmex Annual Report 201459

Socially Responsible Activities

the garden at Technopark, our R&D center and had about
700 visitors. Sysmex America and Sysmex Brazil also hold

(DJSI), a leading global index of socially responsible invest-

company tours for children and students.

ment for the two years since 2012. DJSI is an index devel-

Sysmex Group Environmental Action Plan (Sysmex Eco-Vision 2020)/ Mid-term Environmental Objectives
Sysmex Eco-Vision 2020
Long-Term Environmental
Objectives (Fiscal YearEnding March 31, 2021)(Revised Edition)

In 2005, the Company established the Sysmex Women’s

oped through collaboration between Dow Jones Indexes

Track & Field Team, welcoming Athens Olympic Gamesof the United States and RobecoSAM, a Swiss researchgold medalist Mizuki Noguchi. The team supports the

specialist in the area of socially responsible investment.

training of young athletes who aim to become world-class

The index evaluates companies from three perspectives:competitors. Sysmex has been a special sponsor of the Kobe

the economy, the environment and society. Companies

Marathon since its inauguration three years ago. The 2013

evaluated as having superior sustainability are selected for

Kobe Marathon, which took place in November 2013, again

inclusion in the index.

attracted around 20,000 entrants. In addition to providing therunners’ bibs, we exhibited at a booth in the Kobe Marathon
EXPO, which was held to coincide with the marathon. Sysmex

Environment
consciousness
in product life
cycle process

employees volunteered their time to support these activities
in a number of ways. A portion of the proceeds from thisEarthquake and spur recovery in the affected region.

companies selected from among leading corporations in
the Asia Pacific region. In the fiscal year ended March 31, 2014,

Promote eco-friendly
products and service
modelsPromote eco-friendly
products and service
models• Promoted efforts toward RoHS directive compliance• Promoted product development for reduced power consumption• Promoted a switchover of protein raw materials used in reagentsfrom animal derivatives to artificially synthesized protein• Promoted reduction in materials used in product containers
and packaging• Promoted expansion of remote service in Asian regions for CO2
emissions reduction through improved service efficiency

Reduce carbon dioxide
emissions for logistics
by 50% (per unit of freight

Reduce carbon dioxide
emissions for logistics
by 30% (per unit of freight• For exports, promoted shift from air to ocean transport

Base year: Fiscal year
ended March 31, 2011

Base year: Fiscal year
ended March 31, 2011

Environmental Conservation

this index included 152 companies, 67 of which were Japanese.

We are putting in place a global environmental
management system to fulfill our social responsibilities with regard to environmental preservation.

Reduce greenhouse gas
emissions at businessoffices by 50% (per unit ofconsolidated sales)*2

consolidated sales)*2

Sysmex was also selected as one of the 2012 Global

Sysmex considers its social responsibility toward environ-

100’s Most Sustainable Companies in the World, a ranking

mental conservation a management priority. In our efforts toBase year: Fiscal year
ended March 31, 2009

Base year: Fiscal year
ended March 31, 2009

based on joint research by Canadian publisher Corporateachieve harmony with the global environment, we work to

Knights, Bloomberg and other organizations. The Global

reduce the environmental impact of each stage of our opera-

100 are selected from among 3,500 companies aroundtions—from product design, development, procurement andthe world on the basis of corporate value characteristics

production to sales, support and product usage.

Achieve a recycle rateof 93% or higher at all
business offices*3

Achieve a recycle rateof 90% or higher at all
business offices*3

Encouraged by these results, Sysmex will continue moving
forward with its efforts to enhance corporate value throughcorporate contribution activities.

including environmental, social and corporate governanceIn the Sysmex Group Environmental Action Plan (Sysmex

aspects. Sysmex ranked 77th overall and sixth in the Health

Eco-Vision 2020), we have set forth our long-term environ-

Care sector.

mental objectives, including environmental consciousness in

Indicating the importance it places on relations withproduct life cycle processes and environmental conscious-

local communities, each year Sysmex holds events aimed

ness at business offices. We have also established mid-term

at strengthening communications. In May 2013, we opened

environmental objectives for the term concluding in thefiscal year ending March 31, 2015, we are working to achieve

Activities/Achievements in Fiscal Year Ended March 31, 2014

Result in fiscal year ended March 31, 2014: 0.15
ton-km: Japan domestic andton-km: Japan domestic and11inter-regional transportation)* inter-regional transportation)* Base year (fiscal year ended March 31, 2011): 0.14

event were donated to assist victims of the Great East Japan
Members of the Asia Pacific Index include excellent

Mid-term Environmental
Objectives(Fiscal Years to March 31,
2014–2016)

Sysmex Value

Sysmex has been selected for inclusion in the Asia
Pacific Index of the Dow Jones Sustainability Indexes

Environment
consciousness
at businessoffices

Reduce greenhouse gas
emissions at businessoffices by 25% (per unit of

Up 3% against base year
• Installed equipment (including thorough air conditioning
controls, installation of energy efficient fluorescent lighting,placement of occupancy sensors to activate stairwell lighting) as
measures against global warming (each business office)• Purchased electricity from power companies using renewables(Sysmex Europe)• Reduced CO2 emissions by using solar power(Sysmex Europe Neumunster Factory)
Result in fiscal year ended March 31, 2014: 8.19
Base year (fiscal year ended March 31, 2009): 10.07
Down 20% against base year
• Conducted review of waste disposal companies(Technopark)• Reuse of packaged on outsourced items (Sysmex, Wuxi)
Result in fiscal year ended March 31, 2014: 88.9%

Reduce water usage
at reagent factories by
10% (per unit of amount ofReduce water usage
at reagent factories by
3% (per unit of amount of

production)*4

production)*4

Base year: Fiscal year
ended March 31, 2009

Base year: Fiscal year
ended March 31, 2009

• Installed water purifying equipment (Jinan Sysmex)• Reused industrial waste water after treatment (Sysmex India)
Result in fiscal year ended March 31, 2014: 22.0
Base year (fiscal year ended March 31, 2009): 21.5
Up 3% against base year

these goals.
Sysmex also has acquired certification under the international ISO 14001 standard for environmental management
systems at principal business sites. In addition, we areformulating a groupwide system to promote environmental
activities, including an annual environmental audit.

*1 Sysmex Corporation*2 Business offices: All factories and major business sites
Twelve domestic and overseas Group factories (five in Japan; one each in Germany, the United States and Brazil; two in China; one each in India and Singapore)
Eight domestic and overseas Group offices (four in Japan; one each in Germany, the United States, China and Singapore)*3 Business offices: All factories and major business sites that product and/or chemical substances are handled
Twelve domestic and overseas Group factories (five in Japan; one each in Germany, the United States and Brazil; two in China; one each in India and Singapore)Six domestic and overseas Group offices (two in Japan; one each in Germany, the United States, China and Singapore)*4 Reagent factories (nine sites)

Kobe Marathon 2013

60

Sysmex Annual Report 2014

Sysmex Annual Report 201461

Socially Responsible Activities

INPUT

The year 2008 marked the opening of Technopark, ourrelations meetings, attends conferences held by securities

R&D facility that is designed to fit in with the environment

firms and seeks opportunities to foster an understanding of

2013

2014

and the surrounding community. In addition to eco-friendly

the Company’s strengths by providing individual explanations

28,15434,519materials and an energy-saving design, the greenery, lakes andat industry exhibitions or tours of local factories. For individualCity gas (thousands m )

1,044

1,185

other natural spaces that make up more than half its sur-investors and other shareholders, the department holds busi-

LPG (m3)*1

5,337

5,671

rounds add to its harmony with neighboring areas. Such envi-

ness results briefings in Tokyo and Kobe, prepares shareholder

LNG (m3)*1

00

ronmental considerations have earned Technopark the highest

reports, as well as extensive video content on its website, all

Heavy oil (kL)*100level for the environmental performance of buildings underwith the aim of introducing the Company’s business in an

*1

62

68

a Japanese standard named CASBEE, for the Comprehensive

easily understandable way.

Diesel (kL)19

19

Assessment System for Built Environment Efficiency.

Gasoline for domestic fleet (kL)*4

748

795

In a bid to reduce emissions and use resources effectively,

Association (JIRA)’s “Best IR Award” the second time in fiscal

Diesel for domestic fleet (kL)*4

3.3

11.7

we have launched zero-emissions initiatives at our factories.

2011, following an award for fiscal 2006. For the second year

332

346

We also promote emissions separation and recovery andin a row, following on from fiscal 2012, in the 2013 Awards

53

50

other recycling efforts. For its flagship model in the hematol-for Excellence in Corporate Disclosure, sponsored by the

7.2

7.9

ogy field, the XN-Series, Sysmex has switched the packaging

Securities Analysts Association of Japan, Sysmex was selectedon some of its reagents from conventional polyethylene tofor excellence in disclosure to individual investors. We were

paper packaging, and introduced concentrated reagents.

given high marks for our chairman and CEO’s explanations

These moves substantially reduce the changing frequency,

in his own words to individual investors at the Company’s

thereby reducing waste, making our products more environ-

briefing meetings, and the clear and simple explanations ofmentally considerate.

our business model, as well as of the Company’s strengths.

For the year ended March 31,*1

Electricity use (thousands kWh)3 *1

Kerosene (kL)

3 *3Water use (thousands m )Office paper (t)*5PRTR (t)*4Sysmex’s business activities
Design Production Transportation Use Disposal
OUTPUT2013

2014

Greenhouse gas emissions frombusiness offices (t-CO2)*1

15,98820,194

Investor Relations Activities

CO2 emissions from domestic
company cars (t-CO2)*4

1,746

1,830

Total waste emissions (t)*2

We strive to sustain growth and increase corporate
value. Our investor relations activities aim to proactively disclose information to enhance managementsoundness and transparency, communicate ourcorporate directions to shareholders and promotea management style that is both steady andinnovative.

For the year ended March 31,

1,164

1,274

*2

89.2

89.1

Wastewater volume (thousands m3)*3

144

144

0.7

4.8

Recycling rate (%)
PRTR (t)*4*1 All Sysmex Corporation business offices, subsidiaries in Japan, factories
headquarters and regional headquarters*2 All Sysmex Corporation business offices (excluding branches and sales
offices in recycling rate) and factories*3 Sysmex Corporation business offices and factories handling products andchemical substances*4 All Sysmex Corporation business offices and factories in Japan*5 Sysmex Corporation and Sysmex International Reagents offices that haveacquired ISO 14001 certification

Sysmex recognizes investor relations as an important facet ofcorporate management and is active in its investor relations
efforts, in line with its investor relations policy. The investor
relations department is located within the corporate businessplanning division, which reports directly to the chairman
and CEO. The department is charged with disclosing

Note: As the scope of calculation for *5 has changed in accordance with the
integration of ISO 14001 certification in Japan, the amount of office
paper used has been revised to the figure indicated in the Sysmex
Sustainability Report, which was published for the fiscal year ended
March 31, 2014. Also, the amount of city gas used was adjusted to correct for a mistaken calculation for one overseas regional headquarters.

appropriate information in a timely manner, communicating
directly with shareholders and other investors, and promptly
providing feedback to management regarding the Company’s
external assessment.
One focus of the Company’s communications with shareholders and other investors is to explain a complex business ina straightforward manner. In addition to briefing analysts andinstitutional investors about operating results, the investor
relations department provides technical briefings on areas
such as the life sciences and hosts tours to research and manu-

Position of Sysmex IR Activities
Externallyȉ5DLVHFRUSRUDWHYDOXH ZKLFKHTXDOVPDUNHW
capitalization)

A management strategy tool for reinforcing themanagement base by ensuring appropriate shareprice formation

Sysmex Value

Environmental Impact of Business Activities'HWHUPLQHFDSLWDOPDUNHWUHVSRQVHVDQGUHTXHVWVThe Company earned the Japan Investor Relations'LVVHPLQDWHTXDOLW\
information in atimely mannerȉ6XVWDLQDEOHJURZWKDQG
SURȽWDELOLW\LPSURYHPHQWVȉ$SSURSULDWHLQYHVWPHQW IRUIXWXUHJURZWK6ZLIWO\UHȾHFW
PDQDJHPHQWDQG
IR activities

Internally
A management innovation tool that works byfeeding back external evaluations and requests

Investor Relations Policy
1. IR Goals and Basic Policy
The basic policy of Sysmex in IR activities is to disclose corporate information on performance, financial position, forecasts of the future
and management strategies in a fair, prompt, accurate and easy-to-understand manner, to ensure accountability to shareholders andother investors and gain proper understanding about management and business activities.
2. Basis of Information Disclosure
Sysmex discloses corporate information in accordance with applicable laws and regulations concerning securities trading and the Rules
on Timely Disclosure of Corporate Information by the Issuer of Listed Securities and the Like (“Timely Disclosure Rules”) established by
the stock exchange. The Company also seeks to disclose corporate information not required by the Timely Disclosure Rules fairly andpromptly, to help shareholders and other investors better understand the Company.
3. Methods of Information Disclosure
Sysmex releases corporate information required under the Timely Disclosure Rules via TD-net, operated by the Tokyo Stock Exchange.
The Company posts information through TD-net on its website as promptly as possible. The Company also provides corporate information not subject to the Timely Disclosure Rules on its website.
4. IR Quiet Period
Sysmex observes a quiet period from the day after the closing date of each quarter until the release of earnings statements. During thisperiod, the Company will refrain from replying to questions or commenting on earnings projections. However, in the event that results
are expected to deviate significantly from the projections during the quiet period, the Company will release appropriate information.

facturing facilities. Overseas, the department holds investor

62

Sysmex Annual Report 2014

Sysmex Annual Report 201463

Socially Responsible Activities

We were rated highly for arranging our materials in a mannerthat encourages understanding of the Company, as well as
video distribution via our website. Other positive comments
included the use of video to introduce our R&D and manufacturing bases in the “Sysmex Virtual Tour” corner. Our FAQ
earned extremely high marks for the broad range of coverageand the polite and thoughtful responses. We also received
positive feedback on our shareholder newsletter, which was
judged easy to read and extensive in its content. Sysmex’s
annual report also earned awards for 2013 in the world’s
largest annual report competition—a Gold in the HealthCare (Equipment & Supplies) segment of the Vision Awards(sponsored by the League of American Communications
Professionals LLC of the United States)
To raise the level of the Company’s investor relations
activities further, in addition to proactive external information
disclosure Sysmex will concentrate on responding to feedback
to ensure the results of its investor relations activities arereflected in its capital policies and management.

Ceremony in which we received an award for excellence indisclosure to individual investors

Promoting Direct Dialogue with Various Stakeholders
Sysmex values opportunities for direct dialogue with stakeholders. We incorporate opinions and requests received into ourbusiness activities.
Major Dialogue Achievements in Fiscal Year Ended March 31, 2014

Customers• Conducted survey on degree of customer satisfaction in each region (Sysmex Corporation and overseas Group companies in each region)• Held scientific seminars in each region (Sysmex Corporation and overseas Group companies in each region)• Ongoing customer training program incorporating customer feedback in each region (Sysmex Corporation and overseas Group
companies in each region)
Employees• Investigated desire concerning career design, including interest in working overseas or changing jobs through a voluntary report given to
all employees, with results made use of in HR rotation (Sysmex Corporation)• Conducted collective bargaining with the labor union and held labor–management meetings on topics such as workplace environment
improvement (Sysmex Corporation)
Business Partners• Held the 45th Anniversary Sysmex Suppliers Conference, communicating our appreciation to suppliers for their assistance over the past
45 years, and took this as an opportunity to share our thoughts on business continuity plans (BCPs) (Sysmex Corporation)
Shareholders and Investors• Conducted IR tours in France and Russia targeting institutional investors and analysts from Japan (Sysmex Corporation)• Held the 11th Technology Presentation for institutional investors and analysts (Sysmex Corporation)• Held informational meetings for individual investors (Sysmex Corporation)• Conducted tour for shareholders (Sysmex Corporation)
Communities• Held event for local community interaction at R&D core Technopark (Sysmex Corporation)• Participated in math and science education-focused “6th Science Fair in Hyogo” event for high school students (Sysmex Corporation)• Participated in the “Aim High Urban Mentoring Initiative” conducted by a U.S. NPO and advised local high school students(Sysmex America)

64

Sysmex Annual Report 2014

Financial Section

Contents
11-Year Consolidated Financial Data . . . . . . . . . . . . . . . . . . . . . . 66
Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . 68
Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Consolidated Statement of Income . . . . . . . . . . . . . . . . . . . . . . . 76
Consolidated Statement of Comprehensive Income . . . . . . . . 76
Consolidated Statement of Changes in Equity . . . . . . . . . . . . . 77
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . 78
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . 79
Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Sysmex Annual Report 201465

11-Year Consolidated Financial Data

(Thousands of
U.S. dollars)*1

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2014

¥ 65,970¥ 76,935¥ 87,888¥ 101,041¥ 110,724¥ 111,843¥ 116,206¥ 124,694¥ 134,744¥ 145,578¥ 184,538$ 1,791,631

Operating income

6,615

9,104

10,724

12,71515,033

15,134

15,74018,28919,20621,80532,871

319,136

Net income

3,157

5,731

7,423

9,008

9,132

8,014

9,765

11,412

12,007

14,166

20,574

199,748

Net increase (decrease) in cash and cash equivalents

3,465(3,261)

(499)

3,299

(3,044)

(269)

4,403

5,103

2,922

12,4692,241

21,757

Cash and cash equivalents, end of year

13,71810,4589,416

12,715

9,679

9,410

13,813

18,916

21,83834,30736,548354,835

Capital expenditure

2,451

2,729

5,638

4,546

8,244

9,340

4,540

5,840

7,909

8,945

13,366

129,767

Depreciation

3,203

3,296

3,592

3,959

3,924

7,189

7,067

6,871

7,031

7,945

9,961

96,709R&D expenditure

5,549

6,509

8,184

9,026

9,221

10,771

11,23812,38011,904

12,11913,260128,738

Net cash provided by (used in) operating activities

9,302

6,692

8,275

10,085

11,635

13,194

21,23018,135

17,05925,80636,564354,990

Net cash provided by (used in) investing activities(3,212)(5,631)(7,859)(6,630)(12,883)(13,545)(6,603)(8,916)(10,372)(12,524)(33,940)(329,514)

Net cash provided by (used in) financing activities(2,428)(4,377)(1,191)(458)(1,316)723(10,091)(3,475)(3,814)(3,117)(2,898)(28,136)

Total assets

71,983

77,66087,447

101,225

109,027

118,522

120,702130,060

142,285

173,011

210,759

2,046,204

Shareholders’ equity

51,09656,14962,647

71,34478,75379,18386,35893,534

101,834

118,801

145,757

1,415,117

Interest-bearing liabilities

4,175

657

695

669

1,081

10,344

2,565

1,971

1,026

769

1,960

19,029(Yen)(U.S. dollars)

For the year:
Net sales

Financial Section

For the years ended March 31,(Millions of yen)

At year-end:

Per share data:
Shareholders’ equity (yen)¥ 2,042.7¥ 2,244.9¥ 1,251.8*2¥ 1,411.0¥ 1,541.0¥ 1,548.2¥ 1,684.9¥ 910.7*2¥ 990.5¥ 1,151.4¥ 703.8*2$ 6.83

Net income (basic) (yen)

132.9

225.1

145.5*2

179.6

178.9

156.7

190.8

111.2*2

116.9

137.6

99.5*20.97

Net income (diluted) (yen)

123.1

224.0

143.8*2

178.0

178.3

156.5

190.5

111.0*2

116.6

137.1

99.2*2

0.96

2

2

2

0.26

3

Cash dividends applicable to the year* (yen)

3.75

5.00

6.50*

9.00

12.00

12.50

14.00

15.00*

17.00

20.00

27.00*

Dividend ratio (%)

22.6

17.8

17.9

20.0

26.8

31.9

29.4

27.0

29.1

29.1

27.1

Shareholders’ equity ratio (%)

71.0

72.3

71.6

70.5

72.2

66.8

71.5

71.9

71.6

68.7

69.2

Return on equity (ROE) (%)

6.7

10.7

12.5

13.4

12.2

10.1

11.8

12.7

12.3

12.8

15.6

Return on assets (ROA)*4 (%)

4.6

7.7

9.0

9.5

8.7

7.0

8.2

9.1

8.8

9.0

10.7

Price-earnings ratio (PER) (times)

20.3

27.2

35.3

23.8

20.1

20.0

28.7

26.5

28.6

42.1

33.1

Price-book value ratio (PBR) (times)

1.3

2.7

4.1

3.0

2.3

2.0

3.3

3.2

3.4

5.0

4.7

2,907

3,115

3,334

3,580

3,916

4,148

4,587

4,960

5,324

5,594

6,211

Other data:

Number of employees
Note: Including part-time employees

Notes:*1. U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥103 = US$1, the approximate rate of exchange on March 31, 2014.
*2. Two-for-one stock split*3. Dividend (actual) coverted to post-split basis.
*4. ROA = Net Income/Total Assets (Yearly Average)×100

66

Sysmex Annual Report 2014

Sysmex Annual Report 201467

Management’s Discussion and Analysis

Sysmex regards increasing its market capitalization to maximize
corporate value as an important management objective andpays careful attention to stable cash flow generation. We
consider it important to share this goal with all stakeholders,
including shareholders, customers, business partners, local
communities and employees, while sustaining medium- tolong-term growth. To that end, Sysmex has in place measures tocommunicate with stakeholders on the Company’s current situation and the direction it should pursue. These measures include
enhancing timely disclosure, the website, shareholder newsletters, financial data, periodic briefings on business results, visits
to institutional investors and briefings for individual investors.
Sustaining medium- to long-term growth requires a levelof R&D expenditure sufficient to prevail in global competition. We must consistently create new technologies andproducts and stimulate the growth of our critical mass toabsorb increases in selling, general and administrative (SG&A)
expenses. In recent years, our sales growth in overseas markets
has been striking and succeeded in sustaining steady growth.
Sysmex is aggressively making forward-looking investments
not only in the hematology segment, the current key businessdomain, but also in non-hematology segments such as urinalysis, immunochemistry, clinical chemistry and hemostasis and in
new forms of medical testing in the life science field.
Sysmex pays attention not only to business scale, butalso to asset and capital efficiency and liability and capitalsoundness. The Company holds an A+ issuer rating from
Rating & Investment Information, Inc. (R&I), and reviews andrenews this rating each year. Having a high rating reduces thecost of raising funds in the capital markets and helps build
trust among our shareholders and with the world at large. To
enhance its rating in upcoming years, Sysmex will construct
a flexible and more robust financial base, paying attention
to expanding business scale while considering the balance
between sales and income, and assets, liabilities and equity.
Specifically, the Company regards net sales, operating income,
operating margin, return on equity (ROE) and free cash flow(FCF) as important management indicators and aims tomaintain a balance between scale and efficiency by ensuring
the optimal combination of sales and income and of assets,
liabilities and equity.

Overview
Looking at economic conditions during the fiscal year ended
March 31, 2014, in the United States, the employment
situation continued to gradually improve and activity in thecorporate sector maintained its recovery trend. In Europe, thedebt crisis and the resulting austerity measures continued,
but the region showed signs of recovery, albeit slight. The
sense of decelerating growth in China’s economy continued,
as both internal demand and exports leveled off. Overall,however, the overseas economic outlook was in a gradual
recovery. The Japanese economy was in a recovery phase, as
the government’s economic policies and monetary easing
by Japan’s central bank caused manufacturing activity in thecorporate sector to recover, and the employment and income
environment showed signs of improving.
On the healthcare front, in advanced countries in Europe
and the Americas, efforts are underway to reduce healthcare
costs and reform medical systems, and fiscal austerity measures in countries such as Spain and Italy are causing healthcare spending in those countries to continue to decline. In the
United States, efforts to reform the health insurance system
to reduce the number of people without medical insurance
continue. In China, medical system reform that is underway,
including to the medical insurance system, aims to build
infrastructures that provide uniform medical services in cities
and farming villages throughout the country. The Japanese
government is positioning the healthcare industry as a pillarof its strategies for national growth, reorganizing Medical
Excellence JAPAN and announcing plans to establish Japanese
National Institutes of Health. Such measures are expected
to invigorate healthcare-related industries going forward.
Therefore, although some causes for uncertainty remain, thefoundations of healthcare-related demand remain solid.

The Sysmex Group has completed construction of a newfactory, i-Square, that will increase the Group’s instrument
manufacturing capacity to meet growing demand for in-vitro
diagnostic (IVD) instruments in the Japanese and overseas
markets. The new factory is located in the city of Kakogawa,
Hyogo Prefecture, adjoining the Kakogawa Factory. We
expanded existing factories at two domestic affiliatedcompanies, Sysmex Medica Co., Ltd., and Sysmex RA Co., Ltd.,boosting the Sysmex Group’s overall IVD instrument production capacity. We have converted our distributor in South
Korea to a subsidiary, strengthening our sales and support
structures. We are also augmenting our scientific support—a
Sysmex strength—and offering support proposals, efforts thatshould lead to enhanced customer satisfaction.
At the same time, we have established the R&D Center
Americas to promote the globalization of R&D activities,
locating the center at Sysmex America, Inc., our regional headquarters for the Americas. The center will pursue such strategic
activities as joint research with U.S. healthcare institutions andthe evaluation of technologies possessed by local companies inan effort to rapidly acquire useful leading-edge technologies.
As part of efforts to make entry into the area of personalized medicine, which is expected to grow, we converted toconsolidated subsidiaries Partec GmbH and its affiliates,
which possess flow cytometry technology*. We also converted
to subsidiaries Inostics GmbH and its affiliated companies,
which have gene amplification technologies that can be used
to detect cancer genes circulating in the blood. By combining
these companies’ technologies with our own, we aim to makeinroads in the hematology field and build the foundations for
personalized medicine.
Sysmex has also established a marketing company in Kobe
in cooperation with Kobe-based Kawasaki Heavy Industries,
Ltd. This new company, Medicaroid Corporation, will promote
the development of medical robots. Through this company,
we aim to draft product plans centered on medical robots, forwhich global demand is expected to increase. Going forward,these efforts will concentrate on development, manufacturing

and establishment of sales structures.
During the year the Group recorded consolidated net
sales of ¥184,538 million, up 26.8% year on year, operating
income rose 50.8%, to ¥32,871 million; and net income
increased 45.2%, to ¥20,574 million. Total asset turnoverincreased from 0.92 time to 0.96 time, and return on equity(ROE) advanced from 12.8% in the preceding year to 15.6%
during the fiscal year under review.

Financial Section

Financial Policy* Flow cytometry technology: Method involving the flow dispersionof minute particles and the use of laser light to optically analyze theminute flows.

Net Sales by Destination*
Looking at net sales by destination, in Japan capital investments by large-scale healthcare institutions were robust, andwe continued with solution-proposal efforts. Although sales
in the hematology field were down, sales centered on theurinalysis and hemostasis field were solid. As a result, sales inJapan amounted to ¥40,317 million, up 0.3% year on year.
In overseas markets, we made steady progress in thestrengthening of sales and support structures and the provision of solutions, leading to robust sales of IVD instruments,and sales of reagents and services grew in line with an increasein the installed instrument base. These factors, plus the effectof yen depreciation, caused the Sysmex Group’s overseas sales
to surge 36.8% year on year, to ¥144,221 million. The overseas
sales ratio accordingly rose 5.8 percentage points, to 78.2%.
Looking at overseas sales by destination, sales in theAmericas amounted to ¥39,927 million, up ¥9,162 million, or
29.8% year on year; in EMEA ¥53,386 million, up ¥13,799 million,
or 34.9%; in China ¥36,269 million, up ¥11,839 million, or 48.5%;
and in Asia-Pacific ¥14,639 million, up ¥4,033 million, or 38.0%.
* Net sales by destination is defined as the sales amount recorded byGroup companies to customers in a particular region. However, net
sales by geographical region refers to the sales amount made by aGroup company in a particular location.

Net Sales by Destination
Rating Institution

RatingRating & Investment
Information Inc. (R&I)

A+

Rating Information

Sysmex website

68

Sysmex Annual Report 2014

Shareholder newsletter

Financial data (English/Japanese)posted in the “IR Library” on theSysmex website(As of May 31, 2014)
Rating symbols and definitions:Rating A+; The credit quality is high. It is also
accompanied by some excellent factors.

Japan
Overseas
Americas
EMEA
China
Asia Paciﬁc

7.9%
9.7%
19.7%

OVERSEAS

Net sales

JAPAN

78.2%

¥184,538

21.8%¥144,221 million¥40,317 million

million

9%
28.9%
21.7%
Sysmex Annual Report 201469

Management’s Discussion and Analysis

Japan
Performance in Japan improved, mainly in the urinalysis andhemostasis fields, as we continued to persevere in promoting
solution proposals. However, sales in the “Japan” segment
decreased 2.8% year on year, to ¥41,759 million, because of theconversion of our South Korean distributor to a subsidiary, as
sales to external customers formerly recorded in the “Japan”
segment were shifted to the “Asia Pacific” segment during the
fiscal year.
On the profit front, such factors as the expansion of export
sales to Group companies led to a 68.7% surge in segment
profit, to ¥20,138 million.

Americas
In the United States, in addition to rising instrument sales, anincrease in the installed instrument base led to higher sales of

Net Sales by Geographical Region
Japan
Americas
EMEA
China
Asia Pacific22.6%

Sales in Germany and France increased, as did sales in Russia
and emerging markets, and we acquired new bid projects in
Spain, resulting in favorable sales, centered on the hematology
field. Segment sales consequently rose 34.9%, to ¥53,196 million.
Segment profit jumped 48.4%, to ¥8,604 million, as the
expansion in sales outpaced the rise in selling, general andadministrative expenses accompanying our business expansion.

The conversion of our South Korean distributor to a subsidiary
bolstered sales in this segment. We also boosted sales inThailand by enhancing our direct sales and support activities
and benefited from higher sales of reagents in Indonesia andMalaysia thanks to an increase in the installed instrument
base. As a result, sales expanded 62.9%, to ¥14,731 million.
Segment profit expanded 31.3%, to ¥1,386 million, as
the substantially higher sales overshadowed higher selling,
general and administrative expenses that went toward thebuilding of sales and support structures.

Americas

Intra-area transfers: Exports to Group aﬃliates, others
Sales to customers: IDEXX and others
Sales to customers: Japan
Segment proﬁt
25,000103,817

100,000
88,16875,73034,01027,85750,00062,058

0

2010

EMEA

29,70325,476 26,855
3,248
23,4442,872
24,000
2,775

10,00060,0002,129

16,000

2,000

5,000

8,000

1,000

1,446

2011* 2012* 2013* 2014*

0

0

8,000

2010

2011

6,000

China

2012* 2013* 2014*

IncomeIn Japan, we continued to persevere in making solution-based
proposals. As a result, although sales in the hematology field
were down, sale centered on the urinalysis and hemostasis
fields were solid.
In overseas markets, we strengthened our sales and support structures and continued with solution-based proposals.
Consequently, sales of IVD instruments were favorable. Also,an increase in the installed instrument base led to higher salesof reagents and services.

Higher sales overshadowed the rise in SG&A expenses,
causing operating income to increase ¥11,066 million, or
50.8%, to ¥32,871 million, and the operating margin was 17.8%,
up 2.8 percentage points. The foreign exchange situation,
meanwhile, had a ¥9,838 million positive impact on operating
income, compared with the preceding fiscal year.
Net income expanded ¥6,408 million, or 45.2%, to ¥20,574
million. This rise was despite a loss of ¥116 million due to atransportation accident, on which the Company posted insurance premiums receivable of ¥246 million, and an impairment
loss of ¥231 million. In addition, total income taxes increased¥4,439 million, or 52.6%, to ¥12,877 million.

0

Net Sales

Sales and Segment Proﬁt
by Geographical Region
Net sales
Segment proﬁt(¥ million)
40,0005,000

Asia Paciﬁc

Net sales
Segment proﬁt
14,731 1,500
1,386(¥ million)
15,00036,258

SG&A Expenses
SG&A Ratio(¥ million)
200,000

4,000

R&D Expenditure
R&D Expenditure as a Percentage of Net Sales
SG&A expenses
SG&A ratio(¥ million / %)100,000

100

4,000

24,00024,425
2,752

19,299
2,411
2,370

9,000

9,043

900

160,000

7,109 746

2,000

5,847
6,000

1,000

3,000

80,000145,578
134,744

900

R&D expenditure
R&D expenditure as a percentage of net sales
15
13,26082,853

1,200

12,0002,384

15,09316,0003,000(¥ million / %)15,000184,538

4,195

32,000

4,552

24,000

Cost of sales increased ¥12,232 million, or 21.6%, to ¥68,814
million, and the cost of sales ratio down 1.6 percentage point,
to 37.3%.
SG&A expenses rose ¥15,662 million, or 23.3%, to ¥82,853
million, stemming from the Company’s efforts to reinforce its
sales and support structures. The ratio of SG&A expenses to net
sales edged down 1.2 percentage points, from 46.1% to 44.9%.

Net Sales

1,056
39,43636,446 35,296 37,032
5,799
36,0005,379
5,304

Cost of Sales and SG&A Expenses(Years ended March 31)

53,196
8,604

48,0003,000

10,000

Sales and Segment Proﬁt
by Geographical Region
Net sales
Segment proﬁt(¥ million)

5,000

4,000

32,000(Years ended March 31)

Sales and Segment Proﬁt
by Geographical Region

38,5942,478

25,00036,820 38,541 39,735 40,187 40,313
2,932

28.8%

15,000Net sales
Segment proﬁt(¥ million)
40,000

Owing to these factors, during the year ended March
31, 2014, net sales increased ¥38,960 million, or 26.8%, to¥184,538 million. The yen depreciated during the fiscal year,with the average exchange rate against the U.S. dollar falling¥17.13, from ¥83.11 to ¥100.24. This shift had a ¥6,445 million
positive impact on sales. The yen depreciated ¥27.22 against
the euro, with the average for the year moving from ¥107.15
against the euro to ¥134.37. Yen appreciation against the euro
had a ¥10,127 million positive effect on sales. Overall depreciation of the yen against all currencies had a positive impact onsales of ¥24,995 million during the year.

In this market, sales were sluggish in some areas. However, salesof reagents rose in the hematology, urinalysis and hemostasis
fields, pushing up segment sales 48.4%, to ¥36,258 million.
Boosted by higher sales, segment profit rose 76.0%, to¥4,195 million, offsetting an increase in selling, general andadministrative expenses stemming from efforts to reinforce
our sales structure.

Profits and Losses

45,197
11,93939,094

8,683
3,179 3,955 2,783
6,816

1,806

20.9%
20

20,13820,00082,784¥184,538 million

Asia PacificJapan

75,00066,483

Net Sales

EMEA

Sales and Segment Proﬁt
by Geographical Region(¥ million)

19.7
.7%

China

Sales and Segment Proﬁt
by Geographical Region

125,000

8.0%

reagents and support services, pushing up sales in the country.
In Central and South America, the expansion of businessvolume in Chile and Costa Rica boosted sales, and for theAmericas as a whole, sales expanded 29.9%, to ¥38,594 million.
Segment profit rose 16.4%, to ¥2,478 million, as the impact
of expanded sales outpaced the impact of higher selling,
general and administrative expenses stemming from efforts toreinforce our sales management system.

120,000

116,206

124,694

60,000

7,868

Financial Section

Net Sales by Geographical Region

57,986 60,016

63,886

12,38080

12,000 11,238

60

9,000

11,904 12,119

12

67,191
9.7

9

9.9
8.8

49.9

600

80,00040,000300

40,00020,000

8.3
48.1

47.4

46.1

44.9

7.2

40

6,000

6

20

3,000

3

0

0

11,843330

2,000

12,000

0

2010

2011

2012

2013

2014

(Years ended March 31)

0

8,000

0

2010

2011* 2012* 2013* 2014*(Years ended March 31)

0

0

2010

2011* 2012* 2013* 2014*(Years ended March 31)

0

0

2010

2011

2012

(Years ended March 31)

2013

2014

0

2010

2011

2012

(Years ended March 31)

2013

2014

2010

2011

2012

2013

2014

0

(Years ended March 31)* Revision in intragroup transaction prices

70

Sysmex Annual Report 2014

Sysmex Annual Report 201471

Management’s Discussion and Analysis

Liquidity and Sources of Capital

To enhance its product portfolio, during the year Sysmex
developed new products and pursued R&D centering on
clinical testing and the life sciences, fields targeted for future
growth. As a result, R&D expenditure amounted expanded¥1,141 million, or 9.4%, to ¥13,260 million. R&D expenditure
as a percentage of net sales decreased 1.1 percentage points,from 8.3% to 7.2%.

Fund Procurement and Liquidity Management

Dividend Policy
We aim to maintain a proper balance between internal
reserves for R&D and capital expenditure, which are designed
to sustain steady high growth, and returns to our shareholders as our earning power increases. In terms of returns toshareholders, we intend to provide a stable dividend on acontinuous basis and aim for a consolidated payout ratio of
20% under our basic policy of sharing the successes of ouroperations in line with business performance.
As a basic policy, Sysmex pays twice-yearly dividends
from retained earnings, an interim dividend and a year-end
dividend. The year-end dividend is decided upon approval of
the annual shareholders’ meeting, and the interim dividend
upon approval by the members of the Managing Board.
In accordance with this policy and in light of businessperformance during the year under review, we announced
dividends for the year of ¥27 per share, which includes aninterim dividend of ¥10.5. As a result, the consolidated payout
ratio was 27.1%.
Going forward, Sysmex will continue to effectively invest its
internal reserves in the implementation of highly competitive
product development and global business strategies, aiming to
respond to anticipated changes in the business environment.

The Company raises working capital as necessary throughshort-term bank loans and other means. Consolidated
subsidiaries obtain bank loans as needed to secure working
capital, but in October 2003, the Company introduced a cash
management system to increase efficiency by unifying financing and capital management at affiliates in Japan.
For long-term capital requirements such as capital investment, the Company decides the funding method after taking
into account the investment recovery period and risk. During
the year, the Company financed capital expenditure and R&D
activities primarily from cash provided by operating activities.

Assets, Liabilities and Equity
As of March 31, 2014, total assets amounted to ¥210,759 million, up ¥37,748 million from the end of the previous fiscal year.
Among current assets, major factors included a ¥2,241 million
increase in cash and cash equivalents, a rise of ¥4,995 million
in trade accounts receivable, and a ¥1,982 million expansion
in deferred tax assets. Under property, plant and equipment,
furniture and fixtures grew ¥8,833 million and construction inprogress increased ¥3,856 million. Amoung investments andother aseets, goodwill increased ¥11,325 million.
Meanwhile, total liabilities were up ¥10,652 million, to¥64,509 million. The main reasons for this rise, in current
liabilities, were increases of ¥3,717 million in income taxes
payable and ¥2,525 million in accrued expenses. In long-term
liabilities, deferred tax liabilities were up ¥3,004 million.
Total equity came to ¥146,250 million at the end of theyear, up ¥27,096 million. The principal reasons for this rise
were a ¥16,030 million increase in retained earnings and an

Net Income

Operating Income
Operating Margin

Cash Dividends Applicable to the Year
Dividend Ratio(¥ million / %)35,000increase in foreign currency translation adjustments of ¥8,612
million. The equity ratio as of March 31, 2014, was 69.2%, up
from 68.7% at the end of the previous fiscal year.

¥1,610 million. Also, acquisitions, net of cash acquired used
¥16,643 million, ¥16,286 million more than in the fiscal year
ended March 31, 2013.

Cash Flows

Cash Flows from Financing Activities

As of March 31, 2014, cash and cash equivalents amounted
to ¥36,548 million, up ¥2,241 million from March 31, 2013.
Cash flows from various activities are described in moredetail below.

Net cash used in financing activities amounted to ¥2,898
million, ¥219 million less than in the previous year. This figure
was mainly due to dividends paid of ¥4,544 million, whichused ¥840 million more in cash than in the preceding fiscal
year. At the same time, the Company recorded an ¥855 million
net increase in short-term bank loans, which was absent in theprevious year, and ¥877 million in proceeds from exercise of
warrants, up ¥11 million.

Cash Flows from Operating Activities
Net cash provided by operating activities was ¥36,564 million,¥10,758 million more than in the preceding fiscal year. As principal factors, income before income taxes provided ¥33,451
million, ¥10,832 million more than in the preceding fiscal
year; depreciation and amortization provided ¥11,396 million,¥2,584 million more; the decrease in notes and accounts
receivable provided ¥713 million, compared with a ¥2,425
million increase in the previous fiscal year; and the decrease
in inventories provided ¥1,644 million, compared with a ¥2,818
million increase in the preceding year. However, the decreasein notes and accounts payable used ¥2,937 million, comparedwith a ¥2,432 million increase in the previous fiscal year, andincome taxes paid used ¥10,233 million, ¥2,980 million morethan in the preceding fiscal year.

Cash Flows from Investing Activities

Total Assets
ROA*

32,87130(¥ million)
25,00075(¥ million / %)250,000

18,289 19,206

14,00015,740
13.5

14.7

2010

2012

(Years ended March 31)

15,00011,412

2013

2014

10,000

6

5,000

0

0

18

14,166

15.0

12

2011

Sysmex Annual Report 2014

146,250 100

15,00015000

12,0071245

17200,000

29.4

27.0

29.1

29.1

30
27.1

100,000

15

50,000

0

0

6

2010

2011

2012

(Years ended March 31)

2013

2014

0

150,000

15

14

9,765

13,366

2010

2011

2012

16

120,000

12
10.7

90,000860,000173,011

2013

2014

(Years ended March 31)
Note: Two-for-one stock split conducted on April 1,2014 and 2011.

72(¥ million)(¥ million / %)150,000

210,759

60

24
20

18
17.8

7,000

0

20,00021,805

14.3

Capital expenditure
Depreciation

27

24

21,000Capital Expenditure
Depreciation
Total equity
Equity ratio

20

20,57428,000Capital expenditure (investment in property, plant andequipment, including construction in progress) was up¥4,421 million year on year, or 49.4%, to ¥13,366 million. The
principal reason for this rise was our construction of a newfactory, i-Square, to increase production of IVD instruments
in response to growing domestic and overseas demand, as
well as the expansion of existing factories at subsidiaries inJapan. In addition, in response to growing business in overseas
markets, we invested in the expansion of overseas subsidiaries’ factories for producing IVD reagents, and sales promotion
expenditures grew, as well. Also, depreciation increased¥2,016 million, or 25.4%, to ¥9,961 million.

Total Equity
Equity Ratio
Total assets
ROA

Dividend ratio(¥ / %)
30

Capital Expenditure and Depreciation

Net cash used in investing activities was ¥33,940 million,¥21,416 million more than in the preceding fiscal year. Among
major factors were purchases of property, plant and equipment, which used ¥13,283 million, up ¥3,675 million, and thepurchase of software and other assets used ¥3,813 million, up

Cash dividends applicable to the year
(Dividend convert to post-split base)

Operating income
Operating margin

Financial Section

R&D Expenditure

142,285
130,060
120,702
9.1
8.2

8.8

9.0

71.5
87,136

71.9

119,154
102,503
71.6
68.7

94,23380

12,000

12000
9,961

69.2

60

40

8,945

9,000

6,000

7,909
7,031

7,945

7,034 6,871
5,840

9000

6000

4,540

2010

2011

2012

2013

4

30,0002014 00(March 31)

2010

2011

(March 31)

2012

2013

2014

20

3,000

0

0

3000

2010

2011

2012

2013

2014

0

(March 31)* Net Income/Total Assets (Yearly Average)×100

Sysmex Annual Report 201473

Consolidated Financial Statements
Consolidated Balance Sheet
Sysmex Corporation and Consolidated Subsidiaries

March 31, 2014

2014

2013

2014

ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 13)
Short-term investments (Note 4)
Receivables (Note 13):
Trade notes
Trade accounts
Associated companies
Other
Allowance for doubtful accounts
Investments in lease (Notes 12 and 13)
Inventories (Note 5)
Deferred tax assets (Note 11)
Prepaid expenses and other current assets
Total current assets

PROPERTY, PLANT AND EQUIPMENT:Land
Buildings and structures
Machinery and equipment
Furniture and fixtures
Lease assets
Construction in progress
Total
Accumulated depreciation
Net property, plant and equipment

INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 4 and 13)
Investments in unconsolidated subsidiaries and associatedcompanies
Goodwill (Note 6)
SoftwareDeferred tax assets (Note 11)
Other assets
Total investments and other assets
TOTAL
See notes to consolidated financial statements.

74

Sysmex Annual Report 2014

¥ 036,548
282¥ 34,307150$ 0,354,835
2,738

2,854
42,502
161
254
(889)
4,640
27,3208,012
4,139
125,823

3,584
37,507
165
261
(523)
3,263
25,941
6,030
3,727
114,41227,709412,6411,563
2,466(8,631)45,049265,243
77,78640,183
1,221,582

11,26432,756
9,461
42,6882,536
4,678
103,383(49,609)53,774

10,02331,2168,314
33,8552,821
822
87,051(41,572)
45,479109,359
318,019
91,854414,448
24,62145,417
1,003,718(481,640)
522,078

4,283

3,620

41,583

390
13,115
5,969
132
7,273
31,162¥ 210,759

415
1,790
4,655
125
2,515
13,120¥ 173,011

3,786
127,330
57,951
1,282
70,612
302,544$ 2,046,204

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

2014
LIABILITIES AND EQUITYCURRENT LIABILITIES:
Short-term bank loans (Note 7)
Current portion of long-term debt (Note 7)
Current portion of long-term lease obligations (Note 13)
Payables (Note 13):
Trade notes
Trade accounts
Associated companies
Construction and other
Income taxes payable (Note 13)
Accrued expenses
Deferred tax liabilities (Note 11)
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:Long-term debt (Note 7)Long-term lease obligations (Note 13)
Liability for retirement benefits (Note 8)
Deferred tax liabilities (Note 11)
Other long-term liabilities
Total long-term liabilities

2013

2014

3
54

$ 0,009,709
495
553

1,388
11,728
154
4,398
7,700
12,4338
15,09354,0101,728
12,872
258
4,358
3,983
9,908
7
12,25345,424

13,476
113,864
1,495
42,69974,757
120,70978
146,534
524,369

105
251
734
6,079
3,330
10,499

1
245
1,908
3,075
3,204
8,433

1,019
2,437
7,126
59,01932,331
101,932

10,243
15,184493
109,977
(270)

9,712
14,652353
93,947(260)

99,447
147,417
4,786
1,067,738(2,621)

1,134
8,653
836
146,2500146,250¥ 210,759

709
41

11,00984,0108,117
1,419,903
01,419,903$ 2,046,204¥ 001,000
51
57¥

Financial Section

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

COMMITMENTS AND CONTINGENT LIABILITIES (Notes 12 and 14)
EQUITY (Notes 9, 10, 17 and 19):
Common stock, authorized, 598,688,000 shares; issued,
207,553,632 shares in 2014 and 206,798,832 shares in 2013*
Capital surplus
Stock acquisition rights
Retained earnings
Treasury stock - at cost: 440,556 shares in 2014 and 437,392 shares in 2013*
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities
Foreign currency translation adjustments
Defined retirement benefit plans
Total
Minority interests
Total equity
TOTAL

119,154
0
119,154¥ 173,011* Shares have been restated, as appropriate, to reflect a two-for-one stock split effected April 1, 2014.

Sysmex Annual Report 201475

Consolidated Financial Statements

Consolidated Statement of Income
Sysmex Corporation and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Year Ended March 31, 2014

NET SALESCOST OF SALES
Gross profit
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Operating income
OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Foreign exchange gain (loss)–net
Other–net
Other income (expenses)–net
INCOME BEFORE INCOME TAXES AND MINORITY INTERESTSINCOME TAXES (Note 11):
Current
Deferred
Total income taxes
NET INCOME BEFORE MINORITY INTERESTSMINORITY INTERESTS IN NET INCOME
NET INCOME

2014¥ 184,538
68,814
115,724
82,85332,8712013¥ 145,578
56,582
88,996
67,19121,8052014$ 1,791,631
668,097
1,123,534
804,398
319,136

230
(41)
411
(20)
580
33,451

179
(59)
815
(121)
814
22,619

2,233
(398)
3,990
(194)
5,631
324,767

13,735(858)
12,877
20,5740¥ 20,574

8,184
254
8,438
14,18115¥ 14,166

133,350(8,331)125,019
199,748
0$ 199,748

Yen

PER SHARE OF COMMON STOCK (Notes 2.w and 17):
Basic net income*Diluted net income*Cash dividends applicable to the year*¥ 99.47
99.16
27.00

U.S. Dollars¥ 68.79
68.53
20.00

$ 0.970.96
0.26* Per share figures have been restated, as appropriate, to reflect a two-for-one stock split effected April 1, 2014.
See notes to consolidated financial statements.

Consolidated Statement of Comprehensive Income
Sysmex Corporation and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Year Ended March 31, 2014

NET INCOME BEFORE MINORITY INTERESTSOTHER COMPREHENSIVE INCOME (Note 15):
Unrealized gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Foreign currency translation adjustments
Total other comprehensive income
COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO :Owners of the parent
Minority interests
See notes to consolidated financial statements.

76

Sysmex Annual Report 20142014
¥ 20,574

2013¥ 14,181

2014$ 199,748

425

4,126

8,612
9,037
¥ 29,611

282
0
5,190
5,472
¥ 19,653

83,61287,738$ 287,486¥ 29,611(0)¥ 19,625
28$ 287,486(0)Consolidated Statement of Changes in Equity
Sysmex Corporation and Consolidated Subsidiaries

Financial Section

Millions of Yen

Year Ended March 31, 2014

Number of
Shares ofCommon Stock Common
Outstanding*
Stock

CapitalSurplus

BALANCE, APRIL 1, 2012
205,618,504 ¥ 9,187 ¥ 14,127
Net income
Cash dividends,¥18.00 per share*
Purchase of treasury stock(1,864)
Disposal of treasury stock
744,800
525
525
Exercise of warrants
Net change in the year
BALANCE, MARCH 31, 2013 206,361,440
9,712 14,652
Net income
Cash dividends,¥22.00 per share*
Purchase of treasury stock(3,304)
1
Disposal of treasury stock140
Exercise of warrants
754,800
531
531
Net change in the year
BALANCE, MARCH 31, 2014 207,113,076 ¥ 10,243 ¥ 15,184

Stock
Acquisition Retained
Rights
Earnings¥ 546 ¥ 83,485
14,166

TreasuryStock¥ (256)

Accumulated Other Comprehensive Income
DeferredGain
Unrealized (Loss) on
DefinedGain on Derivatives Foreign
Currency Retirement
Availableunder
for-Sale
Hedge Translation Benefit
Securities Accounting Adjustments Plans

¥ 427

Total

Minority
Interests Total Equity¥ 102,380
14,166¥ 123 ¥ 102,503
14,166(3,704)(4)(3,704)
(4)

1,050
5,266
119,154
20,574

1,050(123) 5,143
0 119,154
20,574(4,544)
(10)
1
1,062
¥ 836 10,013¥ 836 ¥ 146,250(4,544)
(10)
1
1,062
(0) 10,013¥ 0 ¥ 146,250¥ (0) ¥ (5,136)(3,704)
(4)

(193)
353

93,947
20,574

(260)

282
709

0

5,177
41

(4,544)(10)
0140¥ 493 ¥ 109,977

425¥ (270) ¥ 1,134

8,612¥ 8,653

Thousands of U.S. Dollars (Note 1)

CommonStock

BALANCE, MARCH 31, 2013
Net income
Cash dividends, $0.21 per share*
Purchase of treasury stock
Disposal of treasury stock
Exercise of warrants
Net change in the year
BALANCE, MARCH 31, 2014

Stock
Capital Acquisition
Surplus
Rights$ 94,292 $ 142,252

5,155

10
5,155

$ 99,447 $ 147,417

Retained
Earnings

Accumulated Other Comprehensive Income
Deferred
Unrealized
Gain
Gain onForeignDefined(Loss) on
Available- Derivatives Currency Retirement
Treasury for-Sale under Hedge Translation Benefit
Stock Securities Accounting Adjustments Plans$ 3,427 $ 912,107 $ (2,524) $ 6,883
199,748(44,117)
(97)
0

$ 398

1,359
4,126
$ 4,786 $ 1,067,738 $ (2,621) $ 11,009

83,612$ 84,010

Total$ 1,156,835
199,748(44,117)(97)
10
10,310$ 8,117
97,214$ 8,117 $ 1,419,903

Minority
Interests Total Equity$ 0 $ 1,156,835
199,748(44,117)(97)
10
10,310(0) 97,214$ 0 $ 1,419,903* Shares and per share figures have been restated, as appropriate, to reflect a two-for-one stock split effected April 1, 2014.
See notes to consolidated financial statements.

Sysmex Annual Report 201477

Consolidated Financial Statements

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

Sysmex Corporation and Consolidated Subsidiaries

Sysmex Corporation and Consolidated Subsidiaries
Year Ended March 31, 2014

Year Ended March 31, 2014

2014

2013

2014

¥ 33,451¥ 22,619$ 324,767(10,233)
11,396204(7,253)
8,812
339(99,350)
110,641
1,981

713
1,644
(2,937)35
2,291
36,564(2,425)(2,818)
2,432
453
3,647
25,806

6,922
15,961(28,515)340
22,243354,990

INVESTING ACTIVITIES:
Purchases of property, plant and equipment
Purchases of software and other assets
Acquisitions, net of cash acquired (Note 16)
Other–net
Net cash used in investing activities(13,283)(3,813)(16,643)(201)(33,940)(9,608)(2,203)(357)(356)(12,524)(128,961)(37,019)(161,583)(1,951)(329,514)

FINANCING ACTIVITIES:
Increase in short-term bank loans - net
Repayments of long-term debt
Payments of lease obligations
Exercise of warrants
Dividends paid
Other–net
Net cash used in financing activities

855
(13)
(63)
877
(4,544)(10)(2,898)

(6)
(269)
866
(3,704)(4)(3,117)

8,301
(126)
(612)
8,515
(44,117)(97)(28,136)

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON
CASH AND CASH EQUIVALENTS
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR

2,515
2,241
34,307¥ 36,548

2,304
12,46921,838¥ 34,307

24,41721,757333,078$ 354,835

ADDITIONAL CASH FLOW INFORMATION - Interest paid

¥ 16

¥ 42

$ 155

OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments for:
Income taxes - paid
Depreciation and amortization
Loss on disposal of property, plant and equipment
Changes in assets and liabilities:
Decrease (increase) in notes and accounts receivable
Decrease (increase) in inventories(Decrease) increase in notes and accounts payable
Increase in liability for retirement benefits
Other–net
Net cash provided by operating activities

See notes to consolidated financial statements.

1. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL
STATEMENTS
The accompanying consolidated ﬁnancial statements have been prepared inaccordance with the provisions set forth in the Japanese Financial Instruments
and Exchange Act and its related accounting regulations, and in accordance withaccounting principles generally accepted in Japan (“Japanese GAAP”), which are
diﬀerent in certain respects as to application and disclosure requirements ofInternational Financial Reporting Standards.
In preparing these consolidated ﬁnancial statements, certain reclassiﬁcations and rearrangements have been made to the consolidated ﬁnancial
statements issued domestically in order to present them in a form which is morefamiliar to readers outside Japan. In addition, certain reclassiﬁcations have been
made in the 2013 consolidated ﬁnancial statements to conform to the classiﬁcations used in 2014.
The consolidated ﬁnancial statements are stated in Japanese yen, thecurrency of the country in which Sysmex Corporation (the “Company”) is
incorporated and operates. The translations of Japanese yen amounts into U.S.
dollar amounts are included solely for the convenience of readers outside Japanand have been made at the rate of ¥103 to $1, the approximate rate of exchange
at March 31, 2014. Such translations should not be construed as representations
that the Japanese yen amounts could be converted into U.S. dollars at that or
any other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation—The accompanying consolidated ﬁnancial statements as ofMarch 31, 2014, include the accounts of the Company and its 56 (42 in 2013)
signiﬁcant subsidiaries (collectively the “Group”). Consolidation of the remaining
subsidiaries would not have a material eﬀect on the accompanying consolidated
ﬁnancial statements.
Under the control and inﬂuence concepts, those companies in which theCompany, directly or indirectly, is able to exercise control over operations are
fully consolidated, and those companies over which the Group has the ability to
exercise signiﬁcant inﬂuence are accounted for by the equity method.
Investments in three (two in 2013) associated companies are accounted forby the equity method.
Investments in four unconsolidated subsidiaries are stated at cost. If theequity method of accounting had been applied to the investments in thesecompanies, the eﬀect on the accompanying consolidated ﬁnancial statements
would not be material.
Goodwill represents the excess of the cost of an acquisition over the fairvalue of the net assets of the acquired subsidiary and associated company at thedate of acquisition, and is carried at cost less accumulated amortization, which is
calculated by the straight-line method over 5 or 20 years.
All signiﬁcant intercompany balances and transactions have been eliminatedin consolidation. All material unrealized proﬁt included in assets resulting fromtransactions within the Group is also eliminated.

b. Uniﬁcation of Accounting Policies Applied to Foreign Subsidiaries
for the Consolidated Financial Statements—In May 2006, the AccountingStandards Board of Japan (the “ASBJ”) issued ASBJ Practical Issues Task Force(PITF) No. 18, “Practical Solution on Uniﬁcation of Accounting Policies Applied
to Foreign Subsidiaries for the Consolidated Financial Statements.” PITF
No. 18 prescribes that the accounting policies and procedures applied to aparent company and its subsidiaries for similar transactions and events undersimilar circumstances should in principle be uniﬁed for the preparation of theconsolidated ﬁnancial statements. However ﬁnancial statements prepared byforeign subsidiaries in accordance with either International Financial ReportingStandards or generally accepted accounting principles in the United States ofAmerica tentatively may be used for the consolidation process, except for, the78

Sysmex Annual Report 2014

following items that should be adjusted in the consolidation process so that net
income is accounted for in accordance with Japanese GAAP, unless they are notmaterial: 1) amortization of goodwill; 2) scheduled amortization of actuarial gainor loss of pensions that has been directly recorded in the equity; 3) expensing
capitalized development costs of research and development (R&D);
4) cancellation of the fair value model of accounting for property, plant andequipment and investment properties and incorporation of the cost model ofaccounting; and 5) exclusion of minority interests from net income, if containedin net income.

Financial Section

Thousands of
U.S. Dollars (Note 1)

Millions of Yenc. Uniﬁcation of Accounting Policies Applied to Foreign AssociatedCompanies for the Equity Method —In March 2008, the ASBJ issued ASBJ
Statement No. 16, “Accounting Standard for Equity Method of Accounting forInvestments.” The new standard requires adjustments to be made to conformthe associate’s accounting policies for similar transactions and events undersimilar circumstances to those of the parent company when the associate’s
ﬁnancial statements are used in applying the equity method unless it is impracticable to determine such adjustments. In addition, ﬁnancial statements preparedby foreign associated companies in accordance with either International
Financial Reporting Standards or generally accepted accounting principles in the
United States of America tentatively may be used in applying the equity method
if the following items are adjusted so that net income is accounted for inaccordance with Japanese GAAP, unless they are not material: (a) amortizationof goodwill; (b) scheduled amortization of actuarial gain or loss of pensions thathas been directly recorded in the equity; (c) expensing capitalized development
costs of R&D; (d) cancellation of the fair value model of accounting for property,
plant and equipment and investment properties and incorporation of the costmodel of accounting; and (e) exclusion of minority interests from net income, if
contained in net income.

d. Business Combination— In October 2003, the Business Accounting Council
issued a Statement of Opinion, “Accounting for Business Combinations,” and in
December 2005, the ASBJ issued ASBJ Statement No. 7, “Accounting Standard
for Business Divestitures” and ASBJ Guidance No. 10, “Guidance for AccountingStandard for Business Combinations and Business Divestitures.”
The accounting standard for business combinations allowed companies toapply the pooling-of-interests method of accounting only when certain speciﬁccriteria are met such that the business combination is essentially regarded as auniting-of-interests.
For business combinations that do not meet the uniting-of-interests criteria,
the business combination is considered to be an acquisition and the purchasemethod of accounting is required. This standard also prescribes the accounting
for combinations of entities under common control and for joint ventures.
In December 2008, the ASBJ issued a revised accounting standard for business combinations, ASBJ Statement No. 21, “Accounting Standard for Business
Combinations.” Major accounting changes under the revised accounting
standard are as follows: (1) The revised standard requires accounting for businesscombinations only by the purchase method. As a result, the pooling-of-interests
method of accounting is no longer allowed. (2) The previous accounting
standard required R&D costs to be charged to income as incurred. Under therevised standard, in-process R&D costs acquired in the business combination
are capitalized as an intangible asset. (3) The previous accounting standard
provided for a bargain purchase gain (negative goodwill) to be systematicallyamortized over a period not exceeding 20 years. Under the revised standard,
the acquirer recognizes the bargain purchase gain in proﬁt or loss immediately
on the acquisition date after reassessing and conﬁrming that all of the assets
acquired and all of the liabilities assumed have been identiﬁed after a review ofthe procedures used in the purchase price allocation. The revised standard wasapplicable to business combinations undertaken on or after April 1, 2011.

Sysmex Annual Report 201479

Consolidated Financial Statements

e. Cash Equivalents—Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to insigniﬁcant risk of changes invalue. Cash equivalents include time deposits, commercial paper and bond funds,
all of which mature or become due within three months of the date of acquisition.

f. Marketable and Investment Securities—Marketable and investment securities are classiﬁed and accounted for, depending on management’s intent, as
follows: (1) trading securities, which are held for the purpose of earning capitalgains in the near term, are reported at fair value, and the related unrealized
gains and losses are included in earnings; (2) held-to-maturity debt securities,
for which there is a positive intent and ability to hold to maturity, are reported
at amortized cost; and (3) available-for-sale securities, which are not classiﬁed aseither of the aforementioned securities, are reported at fair value, with unrealized gains and losses, net of applicable taxes, reported in a separate componentof equity.
Nonmarketable available-for-sale securities are stated at cost determined by
the moving-average method. For other-than-temporary declines in fair value,
investment securities are reduced to net realizable value by a charge to income.
g. Allowance for Doubtful Accounts—The allowance for doubtful accounts
is stated in amounts considered to be appropriate based on the Group’s pastcredit loss experience and an evaluation of potential losses in the receivables
outstanding.

h. Inventories—Inventories are stated at cost determined by the average cost
method or net selling value for the Company and its consolidated domestic
subsidiaries, and at the lower of cost, determined by the ﬁrst-in, ﬁrst-out method,or market for consolidated foreign subsidiaries.

i. Property, Plant and Equipment—Property, plant and equipment are statedat cost. Depreciation is computed by the straight-line method over the estimated useful lives of the assets. The range of useful lives is from 31 to 50 years
for buildings and structures, from 5 to 11 years for machinery and equipment,
and from 2 to 15 years for furniture and ﬁxtures.
Equipment held for lease is depreciated by the straight-line method over therespective lease periods.

j. Long-lived Assets—The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the carrying amount of anasset or asset group may not be recoverable. An impairment loss is recognized if
the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash ﬂows expected to result from the continued use and eventual
disposition of the asset or asset group. The impairment loss would be measured
as the amount by which the carrying amount of the asset exceeds its recoverable
amount, which is the higher of the discounted cash ﬂows from the continued use
and eventual disposition of the asset or the net selling price at disposition.
k. Software—Software o be sold is amortized at the greater of either the
proportional amount to be amortized in proportion of the actual sales of thesoftware to be made during the current year to the estimated total sales overthe estimated salable years or the amount to be amortized using the straightline method over the estimated salable years. The estimated salable years are
principally three years.

80

Sysmex Annual Report 2014

Software for internal use is amortized by the straight-line method over theestimated usable years. The estimated usable years are principally ﬁve years.

l. Retirement and Pension Plan—The Company has deﬁned beneﬁt pension
plans for employees’ retirement beneﬁts and accounted for the liability for
retirement beneﬁts based on the projected beneﬁt obligations and plan assets atthe balance sheet date. Actuarial gains and losses are amortized on a straightline basis over ﬁve years within the average remaining service period. Past
service costs are amortized on a straight-line basis over ﬁve years within the
average remaining service period.
Certain consolidated subsidiaries have unfunded lump-sum payment plansfor employees’ retirement beneﬁts and accounted for the liability for retirement
beneﬁts based on the required amount in accordance with the retirement
allowance regulations.
In May 2012, the ASBJ issued ASBJ Statement No. 26, “Accounting Standard
for Retirement Beneﬁts” and ASBJ Guidance No. 25, “Guidance on AccountingStandard for Retirement Beneﬁts,” which replaced the accounting standard for
retirement beneﬁts that had been issued by the Business Accounting Council in1998 with an eﬀective date of April 1, 2000, and the other related practical guidance, and were followed by partial amendments from time to time through 2009.
(a) Under the revised accounting standard, actuarial gains and losses and past
service costs that are yet to be recognized in proﬁt or loss are recognizedwithin equity (accumulated other comprehensive income), after adjustingfor tax eﬀects, and any resulting deﬁcit or surplus is recognized as a liability(liability for retirement beneﬁts) or asset (asset for retirement beneﬁts).
(b) The revised accounting standard does not change how to recognize actuarial
gains and losses and past service costs in proﬁt or loss. Those amounts
are recognized in proﬁt or loss over a certain period no longer than the
expected average remaining service period of the employees. However,actuarial gains and losses and past service costs that arose in the current
period and have not yet been recognized in proﬁt or loss are included inother comprehensive income and actuarial gains and losses and past service
costs that were recognized in other comprehensive income in prior periods
and then recognized in proﬁt or loss in the current period shall be treated asreclassiﬁcation adjustments (see Note 2.x).
(c) The revised accounting standard also made certain amendments relating to
the method of attributing expected beneﬁt to periods and relating to thediscount rate and expected future salary increases.
This accounting standard and the guidance for (a) and (b) above are eﬀective
for the end of annual periods beginning on or after April 1, 2013, and for (c)above are eﬀective for the beginning of annual periods beginning on or after
April 1, 2014, or for the beginning of annual periods beginning on or after April
1, 2015, subject to certain disclosure in March 2015, both with earlier application
being permitted from the beginning of annual periods beginning on or after
April 1, 2013. However, no retrospective application of this accounting standard
to consolidated ﬁnancial statements in prior periods is required.
The Company applied the revised accounting standard and guidance forretirement beneﬁts for (a) and (b) above, eﬀective March 31, 2014. As a result,liability for retirement beneﬁts of ¥632 million ($6,136 thousand) and asset for
retirement beneﬁts of ¥14 million ($136 thousand) were recorded as of March 31,
2014, and accumulated other comprehensive income for the year ended March
31, 2014, increased by ¥836 million ($8,117 thousand).
Unfunded retirement beneﬁts for the Company’s directors are provided at
the estimated amount which would be required if such individuals retired at thebalance sheet date. However, the Company abolished its unfunded retirement
beneﬁt plan on June 24, 2005. No additional provisions have been recorded
for retirement beneﬁts to be paid to the Company’s directors since then. The
liability for directors’ retirement beneﬁts is the amount provided in proportion
to the term that present directors had been in place before June 24, 2005.

m. Asset Retirement Obligations—In March 2008, the ASBJ issued ASBJ
Statement No. 18, “Accounting Standard for Asset Retirement Obligations” andASBJ Guidance No. 21, “Guidance on Accounting Standard for Asset Retirement
Obligations.” Under this accounting standard, an asset retirement obligation isdeﬁned as a legal obligation imposed either by law or contract that results fromthe acquisition, construction, development and normal operation of a tangible
ﬁxed asset and is associated with the retirement of such tangible ﬁxed asset.
The asset retirement obligation is recognized as the sum of the discounted cash
ﬂows required for the future asset retirement and is recorded in the period
in which the obligation is incurred if a reasonable estimate can be made. If
a reasonable estimate of the asset retirement obligation cannot be made in
the period the asset retirement obligation is incurred, the liability should berecognized when a reasonable estimate of asset retirement obligation can be
made. Upon initial recognition of a liability for an asset retirement obligation,
an asset retirement cost is capitalized by increasing the carrying amount of therelated ﬁxed asset by the amount of the liability. The asset retirement cost is
subsequently allocated to expense through depreciation over the remaining
useful life of the asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the amount of theoriginal estimate of undiscounted cash ﬂows are reﬂected as an adjustment tothe carrying amount of the liability and the capitalized amount of the related
asset retirement cost.

transfer ownership of the leased property to the lessee are recognized aslease receivables, and all ﬁnance leases that are not deemed to transfer
ownership of the leased property to the lessee are recognized as investments in lease.

q. Bonuses to Directors—Bonuses to directors are accrued at the end of the

Financial Section

On September 30, 2013, the Company acquired 100% of the net assets ofPartec GmbH and its aﬃliated companies and on October 1, 2013, the Company
acquired 100% of the net assets of Inostics GmbH and its aﬃliated companies.
The Company accounted for these transactions by the purchase method of
accounting. The related goodwill is systematically amortized over 20 years.

year to which such bonuses are attributable.

r. Construction Contracts—In December 2007, the ASBJ issued ASBJ
Statement No. 15, “Accounting Standard for Construction Contracts” andASBJ Guidance No. 18, “Guidance on Accounting Standard for Construction
Contracts.” Under this new accounting standard, construction revenue and construction costs should be recognized by the percentage-of-completion method,
if the outcome of a construction contract can be estimated reliably. When total
construction revenue, total construction costs and the stage of completion of
the contract at the balance sheet date can be reliably measured, the outcomeof a construction contract is deemed to be estimated reliably. If the outcome ofa construction contract cannot be reliably estimated, the completed-contract
method should be applied. When it is probable that the total construction costs
will exceed total construction revenue, an estimated loss on the contract shouldbe immediately recognized by providing for a loss on construction contracts.
s. Income Taxes—The provision for income taxes is computed based on the

n. Stock Option—ASBJ Statement No. 8, “Accounting Standard for Stock
Options” and related guidance are applicable to stock options granted on andafter May 1, 2006.
This standard requires companies to recognize compensation expense for
employee stock options based on the fair value at the date of grant and overthe vesting period as consideration for receiving goods or services. The standard
also requires companies to account for stock options granted to nonemployees
based on the fair value of either the stock option or the goods or services
received. In the balance sheet, the stock option is presented as a stock acquisition right as a separate component of equity until exercised.

o. Research and Development—R&D costs are charged to income as incurred.
Such costs were ¥13,260 million ($128,738 thousand) and ¥12,119 million for theyears ended March 31, 2014 and 2013, respectively.
p. Leases— In March 2007, the ASBJ issued ASBJ Statement No. 13, “AccountingStandard for Lease Transactions,” which revised the previous accounting
standard for lease transactions.
(1) Finance Leases as Lessee
Under the previous accounting standard, ﬁnance leases that were deemed
to transfer ownership of the leased property to the lessee were capitalized.
However, other ﬁnance leases were permitted to be accounted for as
operating lease transactions if certain “as if capitalized” information wasdisclosed in the notes to the lessee’s ﬁnancial statements. The revised accounting standard requires that all ﬁnance lease transactions be capitalized
by recognizing lease assets and lease obligations in the balance sheet. In
addition, the revised accounting standard permits leases that existed at thetransition date and do not transfer ownership of the leased property to thelessee to continue to be accounted for as operating lease transactions.
(2) Finance Leases as Lessor
Under the previous accounting standard, ﬁnance leases that were deemed
to transfer ownership of the leased property to the lessee were treatedas sales. However, other ﬁnance leases were permitted to be accounted
for as operating lease transactions if certain “as if sold” information wasdisclosed in the notes to the lessor’s ﬁnancial statements. The revised
accounting standard requires that all ﬁnance leases that are deemed topretax income included in the consolidated statement of income. The asset andliability approach is used to recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary diﬀerences between the carrying
amounts and the tax bases of assets and liabilities. Deferred taxes are measured
by applying currently enacted income tax rates to the temporary diﬀerences.

t. Foreign Currency Transactions—All short-term and long-term monetary
receivables and payables denominated in foreign currencies are translated
into Japanese yen at the exchange rates at the balance sheet date. The foreignexchange gains and losses from translation are recognized in the consolidated
statement of income to the extent that they are not hedged by forward
exchange contracts.

u. Foreign Currency Financial Statements—The balance sheet accounts ofthe consolidated foreign subsidiaries are translated into Japanese yen at thecurrent exchange rate as of the balance sheet date except for equity, which istranslated at the historical rate. Diﬀerences arising from such translation are
shown as “Foreign currency translation adjustments” under accumulated othercomprehensive income in a separate component of equity.
Revenue and expense accounts of consolidated foreign subsidiaries aretranslated into yen at the average exchange rate.
v. Derivatives and Hedging Activities—The Group uses foreign exchange
forward contracts and interest rate swaps to manage its exposure to ﬂuctuations
in foreign exchange and interest rates. The Group does not enter into derivatives for trading or speculative purposes.
Derivative ﬁnancial instruments and foreign currency transactions areclassiﬁed and accounted for as follows: (1) all derivatives are recognized as either
assets or liabilities and measured at fair value, and gains or losses on derivativetransactions are recognized in the consolidated statement of income; and (2)for derivatives used for hedging purposes, if such derivatives qualify for hedge
accounting because of high correlation and eﬀectiveness between the hedging
instruments and the hedged items, gains or losses on derivatives are deferred
until maturity of the hedged transactions.
Interest rate swaps which qualify for hedge accounting and meet speciﬁcmatching criteria are not remeasured at market value but the diﬀerential paid

Sysmex Annual Report 201481

Consolidated Financial Statements

w. Per Share Information—Basic net income per share is computed by dividing
net income available to common shareholders by the weighted-average number ofcommon shares outstanding for the period, retroactively adjusted for stock splits.
Diluted net income per share reﬂects the potential dilution that could occur
if securities were exercised or converted into common stock. Diluted net income
per share of common stock assumes full conversion of the outstanding convertible
notes and bonds at the beginning of the year (or at the time of issuance) with anapplicable adjustment for related interest expense, net of tax, and full exercise ofoutstanding warrants.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicable to the respective ﬁscal years, including
dividends to be paid after the end of the year, retroactively adjusted for stock splits.
x. Accounting Changes and Error Corrections—In December 2009, ASBJ
issued ASBJ Statement No. 24, “Accounting Standard for Accounting Changes andError Corrections” and ASBJ Guidance No. 24, “Guidance on Accounting Standard
for Accounting Changes and Error Corrections.” Accounting treatments under thisstandard and guidance are as follows:(1) Changes in Accounting Policies
When a new accounting policy is applied following revision of an accounting standard, the new policy is applied retrospectively unless the revised
accounting standard includes speciﬁc transitional provisions, in which casethe entity shall comply with the speciﬁc transitional provisions.
(2) Changes in Presentation
When the presentation of ﬁnancial statements is changed, prior-period ﬁnancial statements are reclassiﬁed in accordance with the new presentation.
(3) Changes in Accounting Estimates
A change in an accounting estimate is accounted for in the period of thechange if the change aﬀects that period only, and is accounted for prospectively if the change aﬀects both the period of the change andfuture periods.
(4) Corrections of Prior-Period Errors
When an error in prior-period ﬁnancial statements is discovered, thosestatements are restated.

y. New Accounting Pronouncemen—
Accounting Standard for Retirement Beneﬁts—On May 17, 2012, the ASBJ
issued ASBJ Statement No. 26, “Accounting Standard for Retirement Beneﬁts”
and ASBJ Guidance No. 25, “Guidance on Accounting Standard for Retirement
Beneﬁts,” which replaced the Accounting Standard for Retirement Beneﬁts that
had been issued by the Business Accounting Council in 1998 with an eﬀective
date of April 1, 2000, and the other related practical guidance, and were
followed by partial amendments from time to time through 2009.
Major changes are as follows:(a) Treatment in the balance sheet
Under the current requirements, actuarial gains and losses and past service
costs that are yet to be recognized in proﬁt or loss are not recognized in thebalance sheet, and the diﬀerence between retirement beneﬁt obligations
and plan assets (hereinafter, “deﬁcit or surplus”), adjusted by such unrecognized amounts, is recognized as a liability or asset.
Under the revised accounting standard, actuarial gains and losses andpast service costs that are yet to be recognized in proﬁt or loss shall berecognized within equity (accumulated other comprehensive income),
after adjusting for tax eﬀects, and any resulting deﬁcit or surplus shall berecognized as a liability (liability for retirement beneﬁts) or asset (asset for
retirement beneﬁts).

82

Sysmex Annual Report 2014(b) Treatment in the statement of income and the statement of comprehensive
incomeThe revised accounting standard does not change how to recognize actuarial
gains and losses and past service costs in proﬁt or loss. Those amounts
would be recognized in proﬁt or loss over a certain period no longer thanthe expected average remaining service period of the employees. However,actuarial gains and losses and past service costs that arose in the current
period and have not yet been recognized in proﬁt or loss shall be included inother comprehensive income and actuarial gains and losses and past service
costs that were recognized in other comprehensive income in prior periods
and then recognized in proﬁt or loss in the current period shall be treated asreclassiﬁcation adjustments.
(c) Amendments relating to the method of attributing expected beneﬁt to periods
and relating to the discount rate and expected future salary increases
The revised accounting standard also made certain amendments relating to
the method of attributing expected beneﬁt to periods and relating to thediscount rate and expected future salary increases.
This accounting standard and the guidance for (a) and (b) above
are eﬀective for the end of annual periods beginning on or after April 1,
2013, and for (c) above are eﬀective for the beginning of annual periods
beginning on or after April 1, 2014, or for the beginning of annual periods
beginning on or after April 1, 2015, subject to certain disclosure in March
2015, both with earlier application being permitted from the beginning ofannual periods beginning on or after April 1, 2013. However, no retrospective application of this accounting standard to consolidated ﬁnancial
statements in prior periods is required.
The Company applied the revised accounting standard for (a) and (b)above eﬀective March 31, 2014, and expects to apply (c) above from April
1, 2014. The eﬀects of applying the revised accounting standard for (c)above in future applicable periods would be minor.

3. BUSINESS COMBINATIONOn September 30, 2013, the Company acquired 100% of the net assets of Partec
GmbH and its aﬃliated companies (hereinafter referred to as “Partec”). Partec,a pioneering company in the ﬁeld of FCM (Flow Cytometry), has amassed
signiﬁcant expertise and developmental capabilities involving leading-edge FCM
products. Partec has gained a strong presence in emerging markets and developing countries for its eﬀorts in areas such as HIV monitoring, malaria diagnostics
and other infectious diseases. In developed countries, Partec provides testing
instruments that employ its FCM technology, targeting research institutions
and customers in general industry categories. The Company plans to extend its
business domain as well as accelerate global outreach by leveraging its sales andsupport network. The Company expects to further advance in the hematology
ﬁeld by combining FCM technologies - Partec’s forte - with its own expertise in
the hematology ﬁeld cultivated over the years.
On October 1, 2013, the Company acquired 100% of the net assets of
Inostics GmbH and its aﬃliated companies (hereinafter referred to as “Inostics”).
Inostics possesses advanced genetic testing technologies, such as ultrasensitive
digital PCR (Polymerase Chain Reaction) technology for detecting cancer cell
DNA directly from blood - a “liquid biopsy” process as opposed to tissue testing.
By acquiring those technologies, the Company plans to globally develop assay
services that Inostics already provides. Its companion diagnostics activities incollaboration with pharmaceutical companies will be enhanced as well.
The Company accounted for these transactions by the purchase methodof accounting.

The aggregate acquisition costs of these transactions were ¥12,940 million($125,631 thousand) in cash, which included the purchase price of ¥12,568
million ($122,019 thousand) and the direct costs of acquisition of ¥372 million($3,612 thousand). The total cost of acquisition has been allocated to the assets
acquired and the liabilities assumed based on their respective fair values.
Goodwill recorded in connection with these acquisitions totaled ¥9,043 million ($87,796 thousand), which is amortized over 20 years. As the acquisition costof each of these transactions exceeded the net amount allocated to the assets
acquired and liabilities assumed, the diﬀerence has been posted as goodwill.
The estimated fair values of the assets acquired and the liabilities assumed
at the acquisition dates are as follows:
Millions ofThousands of
Yen
U.S. Dollars
2014

2014

Current assets¥ 1,876$ 18,214

Fixed assets

4,387

42,592

Total assets¥ 6,263$ 60,806

Current liabilities¥ 1,097$ 10,650

Long-term liabilities
Total liabilities

1,269

12,321¥ 2,366$ 22,971

The results of operations of Partec and Inostics are included in the consolidated statements of income from October 1, 2013 to December 31, 2013.
The contingent consideration for these acquisitions is a contract underwhich an additional payment shall be made upon the achievement of a predetermined milestone. In the event an additional payment has been made, theCompany deems it as having been paid at the time of acquisition and modiﬁes
the goodwill amount and the accumulated amortization amount.
As the Company believes that the eﬀect of consolidating Partec and Inostics
on the ﬁnancial statements would be minor, the unaudited pro forma ﬁnancial
statements of these business combinations which had been completed as ofApril 1, 2013 are omitted.

The costs and aggregate fair values of investment securities as of March 31,
2014 and 2013, were as follows:
Millions of Yen
2014
Unrealized Unrealized
Cost
Fair Value
Gains
LossesAvailable-for-sale Equity securities¥ 1,569¥ 1,772¥ (0) ¥ 3,341

Cost
Available-for-sale Equity securities

Millions of Yen
2013
Unrealized Unrealized
Fair Value
Gains
Losses¥ 1,110¥ (0)¥ 2,677

Thousands of U.S. Dollars
2014
Unrealized Unrealized
Cost
Fair Value
Gains
LossesAvailable-for-sale Equity securities$ 15,233$ 17,204$ (0) $ 32,437

The information for available-for-sale securities which were sold during theyear ended March 31, 2014, was as follows:
Millions of Yen
2014
Realized Realized
Proceeds
Gains
LossesAvailable-for-sale Equity securities¥2¥1

4. SHORT-TERM INVESTMENTS AND INVESTMENT SECURITIESShort-term investments and investment securities as of March 31, 2014 and2013, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2014
2013
2014
Current:
Time deposits other than cash
equivalents
¥ 151
¥ 23
$ 1,466
Investment trust
131
127
1,272
Total
¥ 282
¥ 150
$ 2,738
Non-current:
Marketable equity securities¥ 3,341 ¥ 2,677$ 32,437
Unquoted equity securities
942
943
9,146
Total
¥ 4,283 ¥ 3,620$ 41,583¥ 1,567

Financial Section

or received under the swap agreements is recognized and included in interest
expense or income.

Thousands of U.S. Dollars
2014
Realized Realized
Proceeds
Gains
LossesAvailable-for-sale Equity securities

$ 19

$ 10

The impairment losses on available-for-sale equity securities for the year
ended March 31, 2014, were ¥46 million ($447 thousand).

Sysmex Annual Report 201483

Consolidated Financial Statements

Inventories as of March 31, 2014 and 2013, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2014
2013
2014
Finished products and merchandise ¥ 21,242 ¥ 20,317$ 206,233
Work in process
1,726
1,473
16,757
Raw materials
3,648
3,599
35,418Supplies
552
6,835
704
Total
¥ 27,320 ¥ 25,941$ 265,243

The carrying amounts of assets pledged as collateral for the above
collateralized long-term debt at March 31, 2014, were as follows:
Thousands ofMillions of
U.S. Dollars
Yen
Land
¥ 26
$ 252
Buildings and structures - net ofaccumulated depreciation
Machinery and equipment - net ofaccumulated depreciation
Total

2,757

22

214

¥ 332

$ 3,223

6. GOODWILL

8. RETIREMENT AND PENSION PLANS

Goodwill as of March 31, 2014 and 2013, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2014
2013
2014
Goodwill on purchase of¥ 594 ¥ 879$ 5,767a specific business
Consolidation goodwill
12,521
911
121,563
Total¥ 13,115 ¥ 1,790$ 127,330

The Company and its certain consolidated subsidiaries have retirement benefit
plans for employees. Under most circumstances, employees terminating theiremployment are entitled to retirement benefits determined based on the rateof pay at the time of termination, years of service and certain other factors.
Employees are entitled to larger payments if the termination is involuntary, by
retirement at the mandatory retirement age or by death.
The Company has defined benefit pension plans and its certain consolidated subsidiaries have unfunded lump-sum payment plans or defined contribution pension plans.

Goodwill on purchase of a speciﬁc business and consolidation goodwill areamortized using the straight-line method over 5 or 20 years.

Year Ended March 31, 2014
(1) The changes in deﬁned beneﬁt obligation for the year ended March 31,
2014, were as follows:

7. SHORT-TERM BANK LOANS AND LONG-TERM DEBT
Short-term bank loans at March 31, 2014, consisted of bank overdrafts. The
annual interest rates applicable to the short-term bank loans ranged from 0.21%
to 0.22% at March 31, 2014.
Long-term debt as of March 31, 2014 and 2013, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2014
2013
2014
Loans from banks, due through2021, with interest ranging
from 0.02% to 5.45% for 2014
(from 0.02% to 0.05% for 2013):
Collateralized¥ 155$ 1,504
Unsecured
1
¥4
10
Total
156
4
1,514
Less current portion
(51)
(3)
(495)
Long-term debt, less current portion¥ 105¥1$ 1,019
Annual maturities of long-term debt as of March 31, 2014, were as follows:
Thousands ofMillions ofYear Ending March 31
U.S. Dollars
Yen
2015
¥ 51
$ 495
2016

18

175

2017

18

175

2018

18

175

2019

16

155

2020 and thereafter
Total

84

284

Sysmex Annual Report 2014

35

339

¥ 156

$ 1,514

Millions ofYen

Thousands of
U.S. Dollars¥ 11,373$ 110,417

Current service cost

877

8,515

Interest cost

164

1,592

(1)

(10)

(512)

(4,971)

79768¥ 11,980$ 116,311

Balance at beginning of year

Actuarial (gains) losses
Benefits paid
OthersBalance at end of year

(3) Reconciliation between the liability recorded in the consolidated balance
sheet and the balances of deﬁned beneﬁt obligation and plan assets
Millions ofYen

Thousands of
U.S. Dollars

2014

2014

Funded defined benefit obligation¥ 11,348$ 110,175

Plan assets(11,362)(110,311)

(14)

(136)

632

6,136

Unfunded defined benefit obligation
Net liability (asset) arising fromdefined benefit obligation

¥

618

$

6,000

Millions ofYen

Thousands of
U.S. Dollars

2014

2014

Liability for retirement benefits¥ 632$ 6,136

Asset for retirement benefits

(14)

(136)

Net liability (asset) arising fromdefined benefit obligation¥ 618$ 6,000(4) The components of net periodic benefit costs for the year ended
March 31, 2014, were as follows:
Millions ofYen

Thousands of
U.S. Dollars

Balance at beginning of year

¥ 9,746$ 94,621

Expected return on plan assets

292

2,835

Actuarial (gains) losses

992

9,631

Contributions from the employer

835

8,107

Benefits paid
Balance at end of year(503)

(4,883)¥ 11,362$ 110,311(7) Assumptions used for the year ended March 31, 2014, were set forth asfollows:
Discount rate
Expected rate of return on plan assets

1.5%
3.0

(8) Defined contribution pension plan
Required contributions to the defined contribution pension plan of certain
consolidated subsidiaries were ¥512 million ($4,971 thousand) as of March 31, 2014.

Year Ended March 31, 2013
The liability for employees’ retirement benefits as of March 31, 2013, consistedof the following:
Millions of Yen
Projected benefit obligation
Fair value of plan assets
Unrecognized prior service cost
Unrecognized actuarial loss
Net liability¥ 11,373(9,746)(22)
143¥ 1,748

Service cost

¥ 877

$ 8,515

164

1,592

The components of net periodic retirement benefit costs for the year ended
March 31, 2013, were as follows:

Expected return on plan assets(292)(2,835)

Millions of Yen

Recognized actuarial (gains) losses

179

1,738

Amortization of prior service cost

6

58

¥ 934

$ 9,068

Net periodic benefit costs(2) The changes in plan assets for the year ended March 31, 2014, wereas follows:
Thousands of
U.S. Dollars

The expected rate of return on plan assets is determined considering thelong-term rates of return which are expected currently and in the futurefrom the various components of the plan assets.

Interest cost(5) Accumulated other comprehensive income on defined retirement
benefit plans as of March 31, 2014

Millions ofYenb. Method of determining the expected rate of return on plan assets

Unrecognized prior service cost
Unrecognized actuarial (gains) losses
Total

Millions ofYen

Thousands of
U.S. Dollars

¥

$

(16)

(155)

1,314

12,757¥ 1,298$ 12,602(6) Plan assets
a. Components of plan assets
Plan assets consisted of the following:2014
Domestic debt investments
Domestic equity investments
Foreign debt investments
Foreign equity investments
Others
Total

31%
26
12
26
5
100%

Financial Section

5. INVENTORIES

Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Recognized actuarial loss
Net periodic retirement benefit costs¥ 1,270
196
(239)
6
564
¥ 1,797

Assumptions used for the year ended March 31, 2013, were set forth asfollows:
Discount rate
1.5%
Expected rate of return on plan assets
3.0%
Amortization period of prior service cost
5 years
Recognition period of actuarial gain/loss
5 years
In addition, the Company and its certain consolidated subsidiaries
participate in contributory multiemployer pension plans covering substantiallyall of their employees. Under these plans, the amount of pension assets andbenefit obligations were approximately ¥11,151 million ($108,262 thousand) and¥13,069 million ($126,883 thousand), respectively, at March 31, 2013, the mostrecent valuation date. Required contributions to the contributory multiemployer
pension plans of the Company and its certain consolidated subsidiary were ¥545
million ($5,291 thousand) as of March 31, 2014.
The Company also has recorded a liability for an unfunded retirement
benefit plan covering all of its directors in the amount of ¥102 million ($990
thousand) and ¥160 million as of March 31, 2014 and 2013, respectively.

Sysmex Annual Report 201485

Consolidated Financial Statements(b) Increases/decreases and transfer of common stock, reserve and surplus

Japanese companies are subject to the Companies Act of Japan (the “CompaniesAct”). The significant provisions in the Companies Act that affect financial andaccounting matters are summarized below:

The Companies Act requires that an amount equal to 10% of dividends must
be appropriated as a legal reserve (a component of retained earnings) or
as additional paid-in capital (a component of capital surplus) dependingon the equity account charged upon the payment of such dividends until
the aggregate amount of legal reserve and additional paid-in capital equals
25% of the common stock. Under the Companies Act, the total amount ofadditional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve,
additional paid-in capital, other capital surplus and retained earnings can betransferred among the accounts under certain conditions upon resolution of
the shareholders.

(a) Dividends
Under the Companies Act, companies can pay dividends at any time during
the ﬁscal year in addition to the year-end dividend upon resolution at theshareholders’ meeting. For companies that meet certain criteria such as (1)having the Board of Directors, (2) having independent auditors, (3) having
an Audit & Supervisory Board, and (4) the term of service of the directors isprescribed as one year rather than two years of normal term by its articles
of incorporation, the Board of Directors may declare dividends (except for
dividends-in-kind) at any time during the ﬁscal year if the company hasprescribed so in its articles of incorporation. However, the Company cannot
do so because it does not meet all the above criteria.
The Companies Act permits companies to distribute dividends-in-kind(noncash assets) to shareholders subject to a certain limitation andadditional requirements.
Semiannual interim dividends may also be paid once a year upon
resolution by the Board of Directors if the articles of incorporation of thecompany so stipulate. The Companies Act provides certain limitations on
the amounts available for dividends or the purchase of treasury stock. The
limitation is deﬁned as the amount available for distribution to the shareholders, but the amount of net assets after dividends must be maintained at
no less than ¥3 million.

(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury stockand dispose of such treasury stock by resolution of the Board of Directors.
The amount of treasury stock purchased cannot exceed the amount available
for distribution to the shareholders which is determined by speciﬁc formula.
Under the Companies Act, stock acquisition rights are presented as aseparate component of equity.
The Companies Act also provides that companies can purchase bothtreasury stock acquisition rights and treasury stock. Such treasury stockacquisition rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
On April 1, 2014, the Company made a two-for-one stock split by way of
a free share distribution based on the resolution of the Board of Directors’
meeting held on March 5, 2014.

10. STOCK OPTION

2007 Stock Option2013 Stock Option

Persons Granted
9 directors
152 employees
18 directors of subsidiaries
42 employees of subsidiaries
6 directors
203 employees
34 directors of subsidiaries
43 employees of subsidiaries

Number of
Options Granted(Shares*)
2,932,800

Date of Grant
July 30, 2007

Exercise
Price*¥ 1,163($ 11.29)

March 31, 2012 - Outstanding

September 13, 2013

¥ 3,110($ 30.19)

2013 Stock
Option(Shares*)(Shares*)

2,223,200

VestedExercised
Canceled
March 31, 2013 - Outstanding(744,800)(42,000)
1,436,400

For the year ended March 31, 2014
Non-vested
March 31, 2013 - Outstanding
GrantedCanceled
VestedMarch 31, 2014 - Outstanding
Vested1,460,000(8,000)1,452,000
1,436,400

Exercise Period
From July 30, 2009 to
July 29, 2015

Exercised(754,800)

Canceled(4,000)March 31, 2014 - Outstanding

From September 13, 2015 to
September 12, 2021

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

677,600¥ 1,163($ 11.29)¥ 3,110($ 30.19)¥ 98,325($ 954.61)¥ 3,110($ 30.19)¥ 1,749($ 16.98)* Shares, exercise price and average stock price at exercise have been restated, as appropriate, to reﬂect a two-for-one stock split eﬀected April 1, 2014.

The Assumptions Used to Measure Fair Value of 2007 Stock Option
Estimate method:Black-Scholes option pricing model
Volatility of stock price:26.14%
Estimated remaining
outstanding period:
five years
Estimated dividend:¥ 36 per share
Risk free interest rate:
1.403%The Assumptions Used to Measure Fair Value of 2013 Stock Option
Estimate method:Black-Scholes option pricing model
Volatility of stock price:34.51%
Estimated remaining
outstanding period:
five years
Estimated dividend:¥ 36 per share
Risk free interest rate:
0.250%

86

Sysmex Annual Report 2014

The Company and its domestic subsidiaries are subject to Japanese national
and local income taxes which, in the aggregate, resulted in a normal eﬀective
statutory tax rate of approximately 35.6% and 38.0% for the years ended March
31, 2014 and 2013, respectively. Foreign subsidiaries are subject to income taxesof the countries in which they operate.
The tax eﬀects of signiﬁcant temporary diﬀerences and loss carryforwards
which resulted in deferred tax assets and liabilities at March 31, 2014 and 2013,
are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2014
2013
2014
Deferred tax assets (current):
Unrealized intercompany profits ¥ 4,155 ¥ 2,609$ 40,340
Inventories
579
517
5,621
Accrued bonuses
1,184
1,091
11,495
Accrued enterprise tax
451
299
4,379
Other
1,659
1,519
16,107
Total
8,028
6,035
77,942
Deferred tax assets (non-current):
Depreciation
85
73
825
Liability for retirement benefits
91
576
883
Software
829
792
8,049
Investment securities
330
287
3,204
Other
1,365
1,208
13,253
Less valuation allowance
(224)
(213)
(2,174)
Total
2,476
2,723
24,040
Deferred tax liabilities (current)
24
12
234
Deferred tax liabilities (non-current):

VestedExercise price*
1,460,000

11. INCOME TAXES
2007 Stock
OptionFor the year ended March 31, 2013
Non-vested
March 31, 2012 - Outstanding
GrantedCanceled
VestedMarch 31, 2013 - Outstanding
VestedMarch 31, 2013 - Outstanding

The stock options outstanding as of March 31, 2014, are as follows:
Stock Option

The stock option activity is as follows:

Financial Section

9. EQUITY

Net unrealized gain on
available-for-sale securities
Revaluation of land forconsolidation
Revaluation of intangible
assets for consolidation
Investment loss for subsidiaries
capital reduction bycorporation tax law
Undistributed earnings ofconsolidated foreign subsidiaries
Other
Total
Net deferred tax assets

630

375

6,117

400

400

3,883

1,229

11,932

377

377

3,660

4,570
1,217
8,423
¥ 2,057

3,351
1,170
5,673
¥ 3,073

44,36911,816
81,777$ 19,971

Since the actual eﬀective tax rate at March 31, 2014 and 2013, diﬀered fromthe normal eﬀective statutory tax rate by less than 5%, disclosure of details isomitted.
New tax reform laws enacted in 2014 in Japan changed the normal eﬀective
statutory tax rate for the ﬁscal year beginning on or after April 1, 2014, from approximately 38.0% to 35.6%. The eﬀect of this change was to decrease deferred
tax assets in the consolidated balance sheet as of March 31, 2014, by ¥152 million($1,476 thousand) and to increase income taxes - deferred in the consolidated
statement of income for the year then ended by ¥152 million ($1,476 thousand).

Sysmex Annual Report 201487

Consolidated Financial Statements(Lessee)
The Group leases certain furniture, ﬁxtures and other assets.
The minimum rental commitments under noncancelable operating leases
are as follows:
Millions ofThousands of
Yen
U.S. Dollars
2014

2014

Due within one year

¥ 992

$ 9,631

Due after one year

5,792

56,233¥ 6,784$ 65,864

Total(Lessor)The net investments in lease are summarized as follows:
Thousands of
U.S. Dollars

Millions of Yen

Gross lease receivables

2014

2013

2014

¥ 4,434¥ 3,267$ 43,049

Estimated residual values

848

564

8,233

Unearned interest income

(642)

(568)

(6,233)¥ 4,640¥ 3,263$ 45,049

Investments in lease

Maturities of investment in lease for ﬁnance leases that are not deemed totransfer ownership of the leased property to the lessee are as follows:
Millions ofThousands ofYear Ending March 31
Yen
U.S. Dollars
2015¥ 1,333$ 12,942
2016
1,145
11,117
2017
896
8,699
2018
611
5,932
2019
353
3,427
2020 and thereafter
96
932
Total
¥ 4,434$ 43,049
Future rental income under operating leases (including imputed interest income):
Millions ofThousands of
Yen
U.S. Dollars
2014

2014

Due within one year

¥3

$ 29

Due after one year

3

29

¥6

$ 58

Total

13. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group invests cash surpluses in low-risk ﬁnancial assets, mainly
short-term deposits and uses ﬁnancial instruments, mainly short-term bankloans, for funding. Derivatives are used, not for speculative purposes, but tomanage exposure to ﬁnancial risks as described in (2) below.
(2) Nature and Extent of Risks Arising from Financial Instruments
Receivables, such as trade notes, trade accounts and investments in lease, areexposed to customer credit risk. Although receivables in foreign currencies
are exposed to the market risk of ﬂuctuation in foreign currency exchange
rates, the position, net of payables in foreign currencies, is hedged by using
forward foreign currency contracts. Marketable and investment securities,
mainly listing shares, are exposed to the risk of market price ﬂuctuations.
Payment terms of payables, such as trade notes and trade accounts, aremostly less than six months.

88

Sysmex Annual Report 2014

Maturities of ﬁnance lease obligations, which are mainly used for funding ofequipment investment, are less than nine years after the balance sheet date.
Derivatives mainly include forward foreign currency contracts, which areused to manage exposure to market risks from changes in foreign currency
exchange rates of receivables.
Please see Note 14, “DERIVATIVES” for more details about instruments,
hedged items and policy for hedge accounting and assessment proceduresof hedge eﬀectiveness.
(3) Risk Management for Financial Instruments

Credit risk management
Credit risk is the risk of economic loss arising from a counterparty’s failure
to repay or service debt according to the contractual terms. The Groupmanages its credit risk from receivables on the basis of internal guidelines,
which include monitoring of payment term and balances of major customers
by each business administration department to identify the default risk ofcustomers at an early stage. The credit risk regarding subsidiaries is also
managed in the same manner. With respect to ﬁnancial investments, theGroup manages its exposure to credit risk by prohibiting its funding to highcredit rated bonds in accordance with its internal guidelines. Credit risk fromderivatives is minimized because the Group deals only with large ﬁnancial
institutions.

Market risk management (foreign exchange risk)
Foreign currency trade receivables are exposed to market risk resulting
from ﬂuctuations in foreign currency exchange rates. Such foreign currency
exchange risk, which is recognized with respect to each currency and eachmonth, is hedged principally by forward foreign currency contracts. Forward
foreign currency contracts are used when foreign currency trade receivables
are certainly expected from forecasted transactions according to conditions
in foreign currency exchange ﬂuctuations.
Marketable and investment securities are managed by monitoring market
values and ﬁnancial position of issuers on a regular basis.
Derivative transactions have been approved by a predeﬁned decision
maker based on the internal guidelines, which prescribe the authority andthe limit, and managed by regularly conﬁrming the balance of each day by
the ﬁnance department.

Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meet its contractual
obligations in full on their maturity dates. The Group manages its liquidity
risk by holding adequate volumes of liquid assets in view of businessincome, expenditure, and equipment investment spending plan alongwith adequate ﬁnancial planning by the corporate treasury department.
Subsidiaries also report their ﬁnancial plans to the Group. The ﬁnancedepartment manages the liquidity risk by obtaining information of cash
ﬂows of the whole Group.
(4) Fair Values of Financial Instruments
Fair values of ﬁnancial instruments are based on quoted prices in active markets. If a quoted price is not available, other rational valuation techniques
are used instead. The techniques include some changing factors and the fairvalues may be changed by adopting diﬀerent assumptions. In addition, thecontract amounts of derivatives in Note 14, “DERIVATIVES,” do not directly
indicate the market risk of derivatives.

(a) Fair value of ﬁnancial instruments
The carrying amounts, fair values and unrealized gain/loss as of March 31,
2014 and 2013, are as follows. Note that ﬁnancial instruments whose fairvalue cannot be reliably determined are not included (see (b)).
Millions of Yen
Unrealized
Carrying
March 31, 2014
Fair Value
Gain/Loss
AmountCash and cash equivalents¥ 36,548 ¥ 36,548
Receivables:
Trade notes
2,854
Trade accounts
42,502
Associated companies
161
Allowance for doubtful(889)
accounts (*1)
Receivables - net
44,62844,627¥ (1)Investments in lease
4,640
4,594
(46)
Investment securities Available-for-sale securities
3,341
3,341
Total
¥ 89,157 ¥ 89,110¥ (47)
Payables:Trade notes¥ 1,388 ¥ 1,388
Trade accounts
11,728
11,728
Associated companies
154
154
Lease obligations
308
311
¥3
Income taxes payable
7,700
7,700
Total
¥ 21,278 ¥ 21,281¥3
Derivatives (*2)
¥ (6)
¥ (6)

March 31, 2014
Cash and cash equivalents
Receivables:
Trade notes
Trade accounts
Associated companies
Allowance for doubtful
accounts (*1)
Receivables - net
Investments in lease
Investment securities Available-for-sale securities
Total
Payables:Trade notes
Trade accounts
Associated companies
Lease obligations
Income taxes payable
Total
Derivatives (*2)

Thousands of U.S. Dollars
Unrealized
Carrying
Fair Value
Gain/Loss
Amount$ 354,835 $ 354,835
27,709412,641
1,563

Financial Section

12. LEASES(8,631)
433,282
45,049433,272
44,602

$(10)
(447)

32,43732,437$ 865,603 $ 865,146$(457)$ 13,476 $ 13,476
113,864 113,864
1,495
1,495
2,990
3,019
74,75774,757$ 206,582 $ 206,611$ (58)$ (58)$ 29$ 29

Notes: *1. Allowance for doubtful accounts associated with trade accounts receivable
is deducted.
*2. Derivative assets and liabilities are on a net basis.

AssetsMarch 31, 2013
Cash and cash equivalents
Receivables:
Trade notes
Trade accounts
Associated companies
Allowance for doubtful
accounts (*1)
Receivables - net
Investments in lease
Investment securities Available-for-sale securities
Total
Payables:Trade notes
Trade accounts
Associated companies
Lease obligations
Income taxes payable
Total
Derivatives (*2)

Millions of Yen
Unrealized
Carrying
Fair Value
Gain/Loss
Amount¥ 34,307 ¥ 34,307
3,584
37,507165(523)
40,733
3,263

40,732
3,240

¥ (1)
(23)

2,677
¥ 80,980

2,677¥ 80,956¥ (24)¥ 1,728 ¥ 1,728
12,872
12,872
258
258
299
300
3,983
3,983
¥ 19,140 ¥ 19,141¥ (151)¥ (151)

Cash and Cash Equivalents
The carrying values are adopted for cash and cash equivalents as they
approximate fair value because of their short maturities.
Receivables
The carrying values are adopted for short-term receivables as they approximate fair value.
The fair values of long-term receivables, such as installment receivables,
are measured at the present values discounted by risk-free rates and thefuture cash ﬂows including credit risks.
Investments in Lease
The fair values of investments in lease are measured at the present values
discounted by the interest rate after consideration of the remaining terms
and credit risks.
Investment Securities
The fair values of equity securities are determined by securities exchange
prices. Please see Note 4, “SHORT-TERM INVESTMENT AND INVESTMENT
SECURITIES,” for securities categorized by purposes.

Liabilities¥1¥1

Payables and Income Taxes Payable
The carrying values are adopted for payables and income taxes payable as
they approximate fair value because of their short maturities.
Lease Obligations
The fair values of lease obligations are measured at the present values of
total principal discounted by the interest rate which would be used if a newlease transaction occurred.

Sysmex Annual Report 201489

Consolidated Financial Statements

14. DERIVATIVES

15.COMPREHENSIVE INCOME

17. NET INCOME PER SHARE

Fair value information for derivatives is included in Note 14, “DERIVATIVES.”(b) Carrying amount of ﬁnancial instruments whose fair value cannot be
reliably determined
Thousands ofMillions of Yen
U.S. Dollars

The Group enters into foreign currency forward contracts and foreign currency
option contracts to hedge foreign exchange risk associated with certain assets
and liabilities denominated in foreign currencies.
The Group also enters into interest rate swap contracts to manage its
interest rate exposures on certain liabilities.
All derivative transactions are entered into to hedge interest and foreign
currency exposures incorporated within the Group’s business. Accordingly,
market risk in these derivatives is basically oﬀset by opposite movements in thevalue of hedged assets or liabilities. The Group does not hold or issue derivatives
for trading purposes.
Because the counterparties to these derivatives are limited to majorinternational ﬁnancial institutions, the Group does not anticipate any losses
arising from credit risk.
Derivative transactions entered into by the Group have been made inaccordance with internal policies which regulate the authorization and credit
limit amount.

The components of other comprehensive income for the years ended March 31,
2014 and 2013, were as follows:
Thousands ofMillions of Yen
U.S. Dollars

Reconciliation of the diﬀerences between basic and diluted net income pershare (“EPS”) for the years ended March 31, 2014 and 2013, is as follows:
Millions Thousands
U.S.
Yen
Dollarsof Yenof Shares

Investments in equity
instruments that do nothave a quoted market pricein an active market

2014

2013

2014

¥ 1,332¥ 1,358$ 12,932

The above ﬁnancial instruments are not included in investment securities because they do not have market values and it is diﬃcult to estimate
the future cash ﬂows.
(5) Maturity Analysis for Financial Assets
Millions of Yen
Due after Due after
Due inOne Year Five Years Due after
March 31, 2014
One Yearthrough through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents ¥ 36,548
Receivables:
Trade notes
2,854
Trade accounts
42,018¥ 484
Associated companies
161
Investments in lease
1,202
3,291
¥ 147
Total
¥ 147
¥ 82,783¥ 3,775
Millions of Yen
Due after Due after
Due inOne Year Five Years Due after
March 31, 2013
One Yearthrough through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents ¥ 34,307
Receivables:
Trade notes
3,584
Trade accounts
37,211¥ 296
Associated companies
165
Investments in lease
881
2,356
¥ 26
Total
¥ 26
¥ 76,148¥ 2,652

Thousands of U.S. Dollars
Due after Due after
Due inOne Year Five Years Due after
March 31, 2014
One Yearthrough through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents $ 354,835
Receivables:
Trade notes
27,709Trade accounts
407,942 $ 4,699
Associated companies
1,563
Investments in lease
11,67031,952$ 1,427
Total$ 1,427$ 803,719 $ 36,651

Derivative transactions to which hedge accounting is not applied

March 31, 2014
Foreign currency forward
contractsSelling U.S. dollars

March 31, 2013
Foreign currency forward
contracts:
Selling U.S. dollars
Selling Euros

March 31, 2014
Foreign currency forward
contractsSelling U.S. dollars

Millions of Yen
Contract
Unrealized
Contract Amount
Fair Value
Gain/Loss
Amount Due after
One Year¥ 3,081

¥ (6)

¥ (6)

Millions of Yen
Contract
Unrealized
Contract Amount
Fair Value
Gain/Loss
Amount Due after
One Year

2014
Unrealized gain on available-forsale securities:
Gains arising during the year
Reclassification adjustments toprofit or loss
Amount before income tax effect
Income tax effect
Total
Deferred gain (loss) on derivatives
under hedge accounting:
Gains arising during the year
Reclassification adjustments toprofit or loss
Amount before income tax effect
Income tax effectTotal
Foreign currency translation
adjustments:
Adjustments arising during
the year
Reclassification adjustments toprofit or loss
Total
Total other comprehensive
income

¥ 662

2013

¥ 438

(1)
661
(236)
¥ 425

2014

$ 6,427
(10)

438
(156)
¥ 282

6,417
(2,291)$ 4,126¥ (16)
16
0
(0)
¥ 0

$ 83,612¥ (160)9¥ (160)9

Thousands of U.S. Dollars
Contract
Unrealized
Contract Amount
Fair Value
Gain/Loss
Amount Due after
One Year$ 29,913$ (58)$ (58)For the year ended March 31, 2014:
Basic EPS
Net income available tocommon shareholders ¥ 20,574
Effect of dilutive securities
Stock options
Diluted EPS
Net income for¥ 20,574
computation
For the year ended March 31, 2013:
Basic EPS
Net income available to¥ 14,166
common shareholders
Effect of dilutive securities
Stock options
Diluted EPS
Net income for¥ 14,166
computation

WeightedAverage
Shares*

206,828

EPS*¥ 99.47$ 0.97

207,473¥ 99.16$ 0.96205,928¥ 68.79645

784¥ 8,612¥ 5,190¥ 8,612¥ 5,190$ 83,612* Shares and per share ﬁgures have been restated, as appropriate, to reﬂect a two-for-one
stock split eﬀected April 1, 2014.

¥ 9,037¥ 5,472$ 87,738

18. RELATED PARTY DISCLOSURES

16. CASH FLOW INFORMATION¥ 5,524
310

Net
IncomeThe Company acquired Partec and Inostics during the year ended March 31, 2014.
Assets and liabilities of Partec and Inostics at the acquisition dates, cash
paid for the capital and cash received in conjunction with the purchases of
consolidated subsidiaries were as follows:
Millions Thousands ofof YenU.S. Dollars
2014

2014

Current assets¥ 1,876
Fixed assets
4,387
Goodwill
9,043
Current liabilities(1,097)Long-term liabilities(1,269)Cash paid for the capital
12,940Cash and cash equivalents(419)
Cash paid in conjunction with the purchases¥ 12,521
of consolidated subsidiaries - net$ 18,214
42,592
87,796(10,650)(12,321)
125,631(4,068)$ 121,563

Financial Section

Derivatives

206,712¥ 68.53

Transactions of the Company with related parties for the years ended March 31,
2014 and 2013, were as follows:
Thousands ofMillions of Yen
U.S. Dollars
Officers of the Company Exercise of stock options
Significant officers of theCompany’s subsidiaries Exercise of stock options

2014

2013

2014

¥ 135

¥ 216

$ 1,31123

223

19. SUBSEQUENT EVENTS
a. Appropriations of Retained Earnings
The following appropriation of retained earnings at March 31, 2014, wasapproved at the shareholders’ meeting of the Company held on June 20, 2014:
Millions of Thousands of
Yen
U.S. Dollars
Year-end cash dividends, ¥16.50 ($0.16)¥ 3,417$ 33,175per share** Per share ﬁgures have been restated, as appropriate, to reﬂect a two-for-one stock split
eﬀected April 1, 2014.

b. Stock Split
On April 1, 2014, the Company made a two-for-one stock split by way of a freeshare distribution based on the resolution of the Board of Directors’ meeting
held on March 5, 2014.

90

Sysmex Annual Report 2014

Sysmex Annual Report 201491

Consolidated Financial Statements

Under ASBJ Statement No. 17, “Accounting Standard for Segment Information
Disclosures” and ASBJ Guidance No. 20, “Guidance on Accounting Standard for
Segment Information Disclosures,” an entity is required to report ﬁnancial anddescriptive information about its reportable segments. Reportable segments areoperating segments or aggregations of operating segments that meet speciﬁed
criteria. Operating segments are components of an entity about which separateﬁnancial information is available and such information is evaluated regularly by
the chief operating decision maker in deciding how to allocate resources andin assessing performance. Generally, segment information is required to be reported on the same basis as is used internally for evaluating operating segment
performance and deciding how to allocate resources to operating segments.
1. Description of reportable segments
The Group’s reportable segments are those for which separate ﬁnancial information is available and regular evaluation by the Company’s management
is being performed in order to decide how resources are allocated among
the Group. The Group mainly produces and sells diagnostic instruments

and reagents. The Company plans comprehensive strategies within Japanand conducts business activities there, and the four regional headquarters
located in America, EMEA, China and Asia-Paciﬁc plan comprehensive
strategies for each region and conduct business activities in those regions.
Therefore, the Group consists of the geographical segments based on
production and sales structures, which are “Japan,” “Americas,” “EMEA,”“China” and “Asia-Paciﬁc.”
The name of the reportable segment “Europe” was changed to “EMEA”
in April 2013.
2. Methods of measurement for the amounts of sales, proﬁt (loss), assets andother items for each reportable segment
The accounting policies of each reportable segment are consistent withthose disclosed in Note 2, “Summary of Signiﬁcant Accounting Policies,” andthe proﬁts of the reportable segments are their operating incomes.
Intersegment sales or transfers are determined based on market prices orcosts of goods manufactured.

3. Information about sales, proﬁt (loss), assets and other items is as follows:

Japan
Sales:
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Investment of associates accounted
for using the equity method
Increase in property, plant andequipment and intangible assets

AmericasTotal¥ 36,2585¥ 36,263¥ 4,195
23,468¥14,731165¥ 14,896¥ 1,386
16,198¥ 184,538
63,038¥ 247,576¥ 36,801
235,655¥ (63,038)¥ (63,038)¥ (3,930)(24,896)¥ 184,538¥ 32,871
210,759

4,672

1,841

3,291

267

986

11,057(1,096)

9,961

514

1,435

1,435

390

390

10,144

1,858

4,487

165

1,936

$ 374,699
233$ 374,932$ 24,058
288,767$ 516,466
7,631$ 524,097$ 83,534
634,554$ 352,020
48$ 352,068$ 40,728
227,845

45,35917,874

31,952

2,592

Amortization of goodwill
Investment of associates accounted
for using the equity method
Increase in property, plant andequipment and intangible assets

2,719

6,223

18,03943,563

1,602

18,590Instruments¥ 184,538(1,412)

Sales to external customers¥ 57,089

Instruments
Sales to external customers¥ 47,867

17,178Instruments

Japan
Sales:
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Investment of associates accounted
for using the equity method
Increase in property, plant andequipment and intangible assets¥ 42,971
45,197¥ 88,168¥ 11,939
99,9464,464
280

Americas¥ 29,703
2¥ 29,705¥ 2,129
25,471
1,257

Millions of Yen
2013
Reportable Segment
EMEA
China
Asia-PacificTotal¥ 39,436
483¥ 39,919¥ 5,799
35,255¥ 145,578
45,855¥ 191,433¥ 23,307
188,237

2,349
580¥ 24,425
6¥ 24,431¥ 2,384
19,063203¥ 9,043167¥ 9,210¥ 1,056
8,502
539
7

415
6,086

Reconciliations Consolidated

8,812
867

¥ 145,578¥ (45,855)¥ (45,855)¥ (1,502)(15,226)
(867)

415
1,957

2,634

328

1,138

$ 143,019 $ 1,791,631
1,602
612,019$ 144,621 $ 2,403,650$ 13,456 $ 357,291
157,2622,287,913

Reconciliations Consolidated$ 1,791,631$ (612,019)$ (612,019) $ 1,791,631$ (38,155) $ 319,136(241,709) 2,046,204

9,573

107,350

4,990

13,932

13,932

3,786

3,786

3,786
98,485

Total

18,796

180,485(10,641)(13,709)96,709166,776

4. Information about products and services¥ 53,196
786¥ 53,982¥ 8,604
65,359390$ 405,427
602,505$ 1,007,932$ 195,515
979,485

Reconciliations Consolidated¥ 38,594
24¥ 38,618¥ 2,478
29,743641

AmericasNote: Reconciliations principally consist of intersegment transfers and unallocated corporate assets at ¥3,740 million ($36,311 thousand) and ¥3,105 million for 2014 and 2013, respectively. The
unallocated corporate assets are primarily composed of funds such as marketable equity securities.

Millions of Yen
2014
Reportable Segment
EMEA
China
Asia-Pacific¥ 41,759
62,058¥ 103,817¥ 20,138
100,887

280

Sales:
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation

Japan

Thousands of U.S. Dollars
2014
Reportable Segment
EMEA
China
Asia-PacificFinancial Section

20. SEGMENT INFORMATION

12,143¥ 145,578¥ 21,805
173,011
7,945
867

Millions of Yen
2014
Maintenance
Reagents
Services¥ 88,163¥ 18,079
Millions of Yen
2013
Maintenance
Reagents
Services¥ 66,505¥ 14,130$ 554,262

5. Information about geographical areas(1) Sales
Millions of Yen
2014
Japan
AmericaChina¥ 40,317¥ 33,211¥ 36,269(2) Property, plant and equipment
Millions of Yen
2014
Japan
Other
Total
¥ 34,426¥ 19,348¥ 53,774

Total¥ 184,538

Japan¥ 40,190

Millions of Yen
2013
AmericaChina¥ 25,229¥ 24,430

Japan$ 391,427

Thousands of U.S. Dollars
2014
America
China
Other
Total
$ 322,437 $ 352,126 $ 725,641 $ 1,791,631

Other¥ 55,729

Total¥ 145,578

Total¥ 21,207¥ 184,538

OthersTotal¥ 17,076¥ 145,578

Thousands of U.S. Dollars
2014
Maintenance
Reagents
Others
Total
Services$ 855,951$ 175,524$ 205,894 $ 1,791,631

Sales to external customers

Other¥ 74,741

OthersMillions of Yen
2013
Japan
Other
¥ 30,786¥ 14,693

Total¥ 45,479

415
(994)

11,149Thousands of U.S. Dollars
2014
Japan
Other
Total
$ 334,233$ 187,845$ 522,078

Note: Sales are classiﬁed in countries or regions based on location of customers.

92

Sysmex Annual Report 2014

Sysmex Annual Report 201493

Consolidated Financial Statements

6. Information about major customers
There is no customer who occupies more than 10% of the consolidated sales.
7. Information on the balance of goodwill of reportable segments
Millions of Yen
2014
Japan
Goodwill at March 31, 2014

Americas

¥ 561

EMEA

China

Asia-Pacific¥ 10,415

Eliminations/
Corporate¥ 2,139

Total¥ 13,115

Millions of Yen
2013
Japan
Goodwill at March 31, 2013

Americas

¥ 841

EMEA

China

Asia-Pacific¥ 944

Eliminations/
Corporate

¥5

Total
¥ 1,790

Thousands of U.S. Dollars
2014
Japan
Goodwill at March 31, 201494

Sysmex Annual Report 2014

$ 5,447

Americas

EMEA$ 101,116

China

Asia-Pacific$ 20,767

Eliminations/
Corporate

Total$ 127,330

Independent Auditor’s Report

Financial Performance

Sysmex Annual Report 201495

Sysmex Group Information
Global Network(As of May 31, 2014)

HYPHEN BioMed, SAS
Jinan Sysmex Medical Electronics Co., Ltd.

Corporate name

Sysmex France S.A.S.
Sysmex Wuxi Co., Ltd.

Sysmex Nederland B.V.

Sysmex Korea Co., Ltd.

Sysmex Belgium N.V.
Sysmex Inostics GmbH

EquityEstablished ownershipby Group

Sysmex Corporation

1968

—%

Sysmex International Reagents Co., Ltd.

1969

100%

Sysmex Taiwan Co., Ltd.

Sysmex Deutschland GmbH

LocationTEL

1-5-1 Wakinohama-Kaigandori, Chuo-ku, Kobe, Hyogo 651-0073, Japan

TEL: (+81) 78-265-0500

Head Office/Seishin Factory 4-3-2 Takatsukadai, Nishi-ku, Kobe, Hyogo 651-2271, Japan

TEL: (+81) 78-991-2211

Ono Factory

TEL: (+81) 794-62-7001

17 Takumidai, Ono, Hyogo 675-1322, Japan

Sysmex RA Co., Ltd.

1978

100%

1850-3 Hirookanomura, Shiojiri, Nagano 399-0702, Japan

TEL: (+81) 263-54-2251

Sysmex Medica Co., Ltd.

1978

100%

323-3 Miyaoki, Yumesaki-cho, Himeji, Hyogo 671-2121, Japan

TEL: (+81) 79-335-2080

Sysmex TMC Co., Ltd.

1992

100%

1-3-2 Murotani, Nishi-ku, Kobe, Hyogo 651-2241, Japan

TEL: (+81) 78-992-5883

Sysmex CNA Co., Ltd.

1996

100%

2-3-7 Hakata Eki Mae, Hakata-ku, Fukuoka 812-0011, Japan

TEL: (+81) 92-476-1121

Sysmex Business Support Co., Ltd.

2013

100%

4-4-4 Takatsukadai, Nishi-ku, Kobe, Hyogo 651-2271, Japan

TEL: (+81) 78-992-5826

Sysmex Engineering Co.,Ltd.

2014

100%

4-4-4 Takatsukadai, Nishi-ku, Kobe, Hyogo 651-2271, Japan

TEL: (+81) 78-991-2702

Medicaroid Corporation

2013

50%

5-5-2 Minatojima Minamimachi, Chuo-ku, Kobe, Hyogo 650-0047, Japan

TEL: (+81) 78-303-8770

RIKEN GENESIS CO., LTD.

2007

36.5%

1-7-22 Suehiro-cho, Tsurumi-ku, Yokohama-shi, Kanagawa, 230-0045, Japan

TEL: (+81) 45-521-8781

Sysmex bioMérieux Co., Ltd.

2008

34%

1-2-2 Ohsaki, Shinagawa-ku, Tokyo 141-0032, Japan

TEL: (+81) 3-6834-2666

Sysmex America, Inc.

2003

100%

577 Aptakisic Road, Lincolnshire, IL 60069, U.S.A.

TEL: (+1) 224-543-9500

Sysmex Reagents America, Inc.

1993

100%

2 Nelson C. White Parkway, Mundelein, IL 60060, U.S.A.

TEL: (+1) 847-367-2800

Sysmex Inostics, Inc.

2013

100%

855 N. Wolfe St., Suite 631, Baltimore, Maryland 21205, U.S.A.

TEL: (+1) 443-759-8650

Sysmex Canada, Inc.

2007

100%

5045 Orbitor Drive Building 9, Suite 401 Mississauga, ON L4W 4Y4, Canada

TEL: (+1) 905-366-7900

Sysmex do Brasil Industria e Comercio Ltda.

1998

100%

Rua Joaquim Nabuco, 615-Bairro Cidade Jardim-Sao Jose dos Pinhais-Parana- Brasil-CEP 83040-210

TEL: (+55) 41-2104-1314

Sysmex Europe GmbH

1980

100%

Bornbarch 1, 22848 Norderstedt, Germany

TEL: (+49) 40-527260

Sysmex Deutschland GmbH

1995

100%

Bornbarch 1, 22848 Norderstedt, Germany

TEL: (+49) 40-5341020

HITADO GmbH

2010

100%

Dreihausen 2, D-59519 Moehnesee, Germany

TEL: (+49) 0-2924-9705-0

Partec GmbH

2013

100%

Am Flugplatz 13, 02828 Goerlitz, Germany

TEL: (+49) 3581-8746-0

Sysmex Inostics GmbH

2013

100%

Falkenried 88, D-20251 Hamburg, Germany

TEL: (+49) 0-40-413383-90

Sysmex UK Limited

1991

100%

Sysmex House, Garamonde Drive, Wymbush, Milton Keynes, MK8 8 DF, U.K.

TEL: (+44) 870-902-9210

Sysmex France S.A.S.

2000

100%

22, avenue des Nations, Paris Nord II-B.P. 51414 Villepinte, 95944 ROISSY-CDG Cedex, France

TEL: (+33) 1-48-170190

HYPHEN BioMed, SAS

2010

100%

155 Rue d’Eragny-95000 Neuville sur Oise, France

TEL: (+33) 134-406-510

Sysmex Espana S.L.

2010

100%

Frederic Mompou, 4-B Planta 2 08960. Sant Just Desvern, Espana

TEL: (+34) 934-236-231

Sysmex Belgium N.V.

2009

100%

Park Rozendal, Building A Terhulpsesteenweg 6a 1560 Hoeilaart, Belgium

TEL: (+32) 2-769-7474

Sysmex Nederland B.V.

2009

100%

Ecustraat 11, 4879 NP Etten-Leur, The Netherlands

TEL: (+31) 76-508-6000

Sysmex Polska Sp.z o.o.

2005

100%

Kopernik Office Building, Al. Jerozolimskie 176, 02-486 Warszawa, Poland

TEL: (+48) 22-57284-00

Sysmex Suisse AG

2006

100%

Tödistrasse 50, 8810 Horgen, Switzerland

TEL: (+41) 44-718-38-38

Research and Development Center

Sysmex Austria GmbH

2007

100%

Odoakergasse 34-36 A-1160 Wien, Austria

TEL: (+43) 1-4861631

Kobe Sales Oﬃce

Sysmex Hungaria Kft.

2007

100%

Forum Offices Obuda Irodahaz, III kerulet, Becsi ut 271, 1037 Budapest, Hungary

TEL: (+36) 1-210-96-70

Sysmex CZ s.r.o.

2007

100%

Elgartova 683/4 61400 Brno Czech Republic

TEL: (+420) 548-216-855

Sysmex Slovakia s.r.o.

2007

100%

Trencianska 47 821 09 Bratislava, Slovakia

TEL: (+421) 2-6453-2881-2

Sysmex RUS LLC

2011

100%

1 Magistralny tupik, 11, Bld. 10, Office 1020 Russia, Moscow 123290

TEL: (+7) 495-7816772
TEL: (+90) 216-681-66-00

Sysmex Europe GmbH
R&D Center Europe

Japan

Sysmex RUS LLC

HITADO GmbH
Sysmex Polska Sp.z o.o.
Partec GmbH
Sysmex CZ s.r.o.

R&D Center Americas

Japan
Sysmex RA Co., Ltd.
Sysmex CNA Co., Ltd.
RIKEN GENESIS CO., LTD.
Sysmex bioMérieux Co., Ltd.

Sysmex Slovakia s.r.o. Sysmex Shanghai Ltd.
Sysmex Turkey Diagnostik
Sistemleri Ltd. Sti.
Sysmex India Pvt. Ltd.
Sysmex Hungaria Kft.
Sysmex Austria GmbH

Sysmex Espana S.L.

Sysmex Inostics, Inc.
Sysmex Reagents America, Inc.

Americas

Sysmex Transasia Services Pvt. Ltd.

Sysmex Canada, Inc.

Sysmex Philippines Inc.
Sysmex Hong Kong Limited

Sysmex Middle East FZ - LLC
Sysmex Suisse AG

Sysmex America, Inc.

Sysmex Vietnam Company Limited

Sysmex (Thailand) Co., Ltd.
Sysmex (Malaysia) Sdn Bhd

Sysmex do Brasil
Industria e Comercio Ltda.

PT. Sysmex Indonesia
Sysmex New Zealand Limited

Sysmex Asia Paciﬁc Pte Ltd.

Sysmex South Africa (Pty) Ltd.

Sysmex TMC Co., Ltd.
Sysmex International Reagents Co., Ltd.
(Ono Factory)
Sysmex Medica Co., Ltd.

Sales
Production
R&D
MarketingRegional headquarters

Medicaroid Corporation

Domestic Offices

Head Oﬃce

Kansai Area

LocationTEL

1-5-1 Wakinohama-Kaigandori, Chuo-ku, Kobe, Hyogo 651-0073, Japan

TEL: (+81) 78-265-0500

Sysmex Turkey Diagnostik Sistemleri Ltd. Sti.

2014

100%

Tokyo Office

1-2-2 Ohsaki, Shinagawa-ku, Tokyo 141-0032

TEL: (+81) 3-5434-8910

Sysmex Middle East FZ-LLC

2008

100%

Dubai Healthcare City, City Pharmacy Building C/P 72 Office 304, P.O. Box 505119, Dubai, U.A.E.

TEL: (+971) 4-4370515

Technopark

4-4-4 Takatsukadai, Nishi-ku, Kobe, Hyogo 651-2271

TEL: (+81) 78-991-1911

Sysmex South Africa (Pty) Ltd.

2006

100%

Fernridge Office Park, Block 2; 5 Hunter Avenue; Ferndale; Randburg 2194 RSA

TEL: (+27) 11-3299480

Solution Center

1-3-2 Murotani, Nishi-ku, Kobe, Hyogo 651-2241

TEL: (+81) 78-992-5860

Sysmex Shanghai Ltd.

2000

100%

9th Floor, Azia Center, 1233 Lujiazui Ring Road, Shanghai, 200120, China

TEL: (+86) 21-6888-2626

Research and Development Center

1-1-2 Murotani, Nishi-ku, Kobe, Hyogo 651-2241

TEL: (+81) 78-991-2212

Jinan Sysmex Medical Electronics Co., Ltd.

1995

100%

7493 Airport Road, Yaoqiang Town, Licheng District, Jinan City, Shandong Province, China; PC. 250107 TEL: (+86) 531-8873-4440

i-Square262-11 Mizuashi, Noguchi-cho, Kakogawa, Hyogo 675-0019

TEL: (+81) 79-456-8010

Sysmex Hong Kong Limited

1999

100%

Room 907, 9/ F, Tower 1, Silvercord, 30 Canton Road, Tsimshatsui, Kowloon, Hong Kong

TEL: (+852) 2543-5123

Kakogawa Factory

314-2 Kitano, Noguchi-cho, Kakogawa, Hyogo 675-0011

TEL: (+81) 79-424-1171

Sysmex Wuxi Co., Ltd.

2003

100%

#8-9, No. 93, Science Technology Stand-up Park, New District, Wuxi, Jiangsu, 214028, China

TEL: (+86) 510-8534-5837

Protein Development Center

1548 Ooaza Shimookudomi, Sayama, Saitama 350-1332

TEL: (+81) 4-2954-2171

Sysmex Asia Pacific Pte Ltd.

1998

100%

9 Tampines Grande #06-16 to #06-22 528735, Singapore

TEL: (+65) 6221-3629

Sysmex (Malaysia) Sdn Bhd

1998

100%

11A&15 Jln PJS 7/21, Bdr Sunway, 47500 Subang Jaya, Selangor, Malaysia

TEL: (+60) 3-56371788

Sysmex (Thailand) Co., Ltd.

1999

100%

12 Floor, Tonson Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 11330, Thailand

TEL: (+66) 2539-1127

Sysmex Vietnam Company Limited

2010

100%

8th floor, 106 Nguyen Van Troi, Phu Nhuan District, Ho Chi Minh City, Vietnam

TEL: (+84) 8-39979400

PT. Sysmex Indonesia

2002

100%

Cyber 2 Tower, 5th Floor, Unit E Jl. HR. Rasuna Said Blok X5 No. 13 Jakarta Selatan 12950, Indonesia TEL: (+62) 21-3002-6688

Sysmex Transasia Services Pvt. Ltd.

2009

51%

308, ASCOT Centre, 3rd Floor, Next to Hotel Le Royal Meridian Sahar Airport Road, Andheri (East) MUMBAI 400 099, India

Sysmex India Pvt. Ltd.

1998

100%

1002, Damji Shamji Business Galleria, 10th Floor, LBS Marg, Kanjur Marg - West, Mumbai - 400078, India TEL: (+91) 22-6112-6666

Sysmex Philippines Inc.

2011

100%

30th Floor, MDC 100 Bldg, E. Rodriguez Jr. Ave. cor. Eastwood Ave. Bagumbayan, Quezon City, Philippines TEL: (+63) 2-621-2460

Sysmex Taiwan Co., Ltd.

2000

100%

Song Jiang Road 318 13F-3, Zhong Shan District, Taipei, Taiwan

TEL: (+886) 2-2542-2339

Sysmex Korea Co., Ltd.

2013

100%

8F, Nobel Bldg, 16, Teheran-ro 78-gil, Gangnam-gu, Seoul, 135-840 Korea

TEL: (+82) 2-3498-5300

Sysmex New Zealand Limited

2001

100%

382-386 Manukau Road, Epsom, Auckland 1344, New Zealand

TEL: (+64) 9-630-3554

Nagoya Branch
Nagano Sales Office
Kobe Sales OfficeOsaka Branch
Niigata Sales OfficeTakamatsu Sales Office

Hiroshima Branch
Chiba Sales Office
Okayama Sales Office
Asia Pacific

Kita Kanto BranchTokyo Branch
Sapporo Sales OfficeMorioka Sales Office
Kanazawa Sales Office
Kyoto Sales Office
Metropolitan Area Service Center

Associated Foundation

Nakatani Foundation for Advancement of
Measuring Technologies in Biomedical
1-2-2 Ohsaki, Shinagawa-ku, Tokyo 141-0032, Japan
Engineering

Sysmex Annual Report 2014

China

Head Office

Rüzgarlıbahçe Mah. Şht. Yzb. Sinan Eroğlu Cad. No:6 Akel İş Merkezi A Bl. Kat -5 Kavacık Beykoz
34805 İstanbul Turkey

Sendai Branch
Fukuoka Branch
Shizuoka Sales Office
Kagoshima Sales Office

96

EMEA

Sysmex International Reagents Co., Ltd.
(Head Oﬃce/Seishin Factory)
i-Square
Kakogawa Factory
Technopark
Sysmex Engineering Co., Ltd.
Sysmex Business Support Co., Ltd.
Solution Center

TEL: (+81) 3-5719-2125

FAX: (+81) 3-5719-2135

Sysmex Group Information

Sysmex UK Limited

TEL: (+91) 22-2822-4040

Sysmex Annual Report 2014

97

Stock Information

Corporate Overview(As of March 31, 2014)(As of March 31, 2014)

Principal Shareholders

Common stock price range (¥)

Two for one
stock split

4,000
2,000
0

Tokyo Price Index close

4/2013 56

7

8

Sysmex Corporation
Number of Percentage ofshares held(Thousands) shareholding

Shareholders

6,000

9

10

11

12 1/2014 23

45(Month)(Thousands)
20,000Monthly trading volume (shares)
15,000Established
Number of Employees

February 20, 1968
5,401

Japan Trustee Services Bank, Ltd.

9,045

8.72

(consolidated basis)

JPMorgan Chase Bank 380072 (Standing proxy:
Mizuho Corporate Bank. Custody & Proxy Dept.)

7,153

6.89

6,211

The Kobe Yamabuki Foundation

6,000

5.78

April 1—March 31

Nakatani Foundation for Advancement of
Measuring Technologies in Biomedical Engineering

Fiscal Year

5,915

5.70

Shareholders’ Meeting

In JuneNakatani Kosan, Ltd.

5,148

4.96

Number of Shares Authorized 299,344,000 shares

The Master Trust Bank of Japan, Ltd.

3,775

3.64

Number of Shares Issued

103,776,816 shares

Kazuko Ietsugu

3,062

2.95

Paid-in Capital¥10,243 million

Taeko Wada

3,062

2.95

Stock Listings

Kenji Itani

2,500

2.41

Ryoshin Co.

2,400

2.31

(including part-time employees and others)

Tokyo Stock Exchange, First Section
November 1995: Listed on Osaka
Securities Exchange,
Second Section

10,000July 1996:

5,000
0

Sysmex Group Information

Stock Price Range and Trading Volume
(Yen)
8,000

Exchange, Second

Cash Dividends per Share and Dividend Ratio (Consolidated)
4/2013 5

6

7

8

9

10

11

12 1/2014 23

45(Month)40

Financial institutions
17.52%

20

Financial instrument ﬁrms
0.66%

10

Individuals and others
20.27%

Other Japanese companies
20.03%
Foreign investors
41.52%

Distribution of Shares by Number of Shares Held

29.4

27.0

29.1

50

29.1

27.1

0
2010

2011

2012

and Osaka Securities
Exchange, First Section

20
17

15

Listed on Tokyo Stock
Exchange, First Section

75

27

14

March 2000:

100

Cash dividends per share (Figures adjusted for stock split)
Dividend ratio

30

Composition of Shareholders

Section

(%)

(Yen)

Listed on Tokyo Stock2013

Ticker Code

6869

25

Transfer Agent

Mitsubishi UFJ Trust and Banking
Corporation0

Independent Auditor

Deloitte Touche Tohmatsu LLC

RatingA+ (Rating and Investment
Information, Inc. (R&I))

Indexes

MSCI Standard Index

2014

Note: Two-for-one stock split conducted on April 2014 and 2011.
Dividend Policy
Sysmex aims to maintain a proper balance between aggressive investment, which isdesigned to sustain steady high growth, and returns to our shareholders as our earning
power increases. In terms of returns to shareholders, we intend to provide a stabledividend on a continuous basis and aim for a consolidated payout ratio of 20% under ourbasic policy of sharing the successes of our operations in line with business performance.

Russell/Nomura Japan Equity Indexes
FTSE Japan Index
DSI (Daiwa Stock Indices)

Less than 1,000 shares 1.70%

More than 1,000 shares 2.12%

S&P Japan 500

Number of shares: 1,759,569(7,670 shareholders)Number of shares: 2,202,383(1,089 shareholders)

Dow Jones Sustainability Indexes

More than 500,000 shares 70.91%

More than 5,000 shares 1.10%

Number of shares: 73,586,434(46 shareholders)Number of shares: 1,145,274(167 shareholders)

JPX-Nikkei Index 400

More than 10,000 shares 7.83%
Number of shares: 8,121,923(261 shareholders)More than 100,000 shares 16.34%
Number of shares: 16,961,233(75 shareholders)98

Sysmex Annual Report 2014

Sysmex Annual Report 201499