Sysmex Corporation

Annual Report 2013
For the year ended March 31, 2013

Annual Report 2013

Seizing Opportunity
throughout the World

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

We are seizing opportunities
to remain one step ahead of
emerging challenges.

SysmexCorporation (“the Company”) is an integrated supplier of the instruments,
reagents and software 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 theCompany 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 thefields of hemostasis, immunochemistry, clinical chemistry and urinalysis, and has expanded its operations onto a global scale.
The Sysmex Group comprises 44 companies in 29 countries throughout the world, operating in
the advanced countries of Europe and the Americas. In addition, the Group is aggressively building
its business in emerging 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 theanalysis of red and white blood cells, the Group holds the top share of the global market.
Sysmex’s operating environment is growing ever more complex and uncertain, but the Company
strives to consistently remain one step ahead of these changes and devise strategies for responding swiftly to emerging challenges. In short, ours is a culture that emphasizes seizing opportunity,
marshalling our strengths to make the most of the circumstances that arise. We intend to maintain thisstrategic approach well into the future.

Sysmex Annual Report 20131

11-Year Growth and Highlights

2003

2004

¥ 57,253¥ 65,970

5,299

6,615

For the years ended March 31,

2005

2006

2007

2008

2009

2010

2011

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

2013

2013

2012

We aim to sustain highlevels of growth and further
increase our profitability
by seizing opportunities inhealthcare testing.

For the year:
Net sales
Operating income¥ 76,935 ¥ 87,888
9,104

10,724¥ 101,041 ¥ 110,724 ¥ 111,843
12,71515,033

15,134¥ 116,206 ¥ 124,694 ¥ 134,744 ¥ 145,578 $ 1,548,702
15,74018,28919,20621,805

231,968

Net income

3,125

3,157

5,731

7,423

9,008

9,132

8,014

9,765

11,412

12,007

14,166

150,702

Net increase (decrease) in cash and cash equivalents

1,071

3,465

(3,261)

(499)

3,299

(3,044)

(269)

4,403

5,103

2,922

12,469132,649

Cash and cash equivalents, end of year

10,253

13,71810,4589,416

12,715

9,679

9,410

13,813

18,916

21,83834,307364,968

Capital expenditure

2,317

2,451

2,729

5,638

4,546

8,244

9,340

4,540

5,840

7,909

8,945

95,160Depreciation

3,107

3,203

3,296

3,592

3,959

3,924

7,189

7,067

6,871

7,031

7,945

84,522R&D expenditure

4,969

5,549

6,509

8,184

9,026

9,221

10,771

11,23812,38011,904

12,119128,926

At year-end:
Total assets

66,44971,983

77,66087,447

101,225

109,027

118,522

120,702130,060

142,285

173,011

1,840,543

Shareholders’ equity

43,32551,09656,14962,647

71,34478,75379,18386,35893,534

101,834

118,801

1,263,840

Interest-bearing liabilities

10,893

4,175

657

695

669

1,081

10,344

2,565

1,971

1,026

769

8,181

(Yen)

(U.S. dollars)

Per share data:
Shareholders’ equity (yen)¥ 1,879.5¥ 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$12.252

Net income (basic) (yen)

132.2

132.9

225.1

145.5*

179.6

178.9

156.7

190.8

111.2*

116.9

137.6

1.46

Net income (diluted) (yen)

121.8

123.1

224.0

143.8*2

178.0

178.3

156.5

190.5

111.0*2

116.6

137.1

1.46

Cash dividends applicable to the year (yen)

25.0

30.0

40.0

36.0*2

36.0

48.0

50.0

56.0

60.0

34.0*240.0

0.43

Dividend ratio (%)

18.9

22.6

17.8

17.9

20.0

26.8

31.9

29.4

27.0

29.1

29.1

2

Sales and Earnings Forecast for the Fiscal Year Ending March 31, 20142014¥175.0 billion¥30.0 billion¥18.5 billion
17.1%
10.6%

Net sales
Operating income

Other data:
Shareholders’ equity ratio (%)

65.2

71.0

72.3

71.6

70.5

72.2

66.8

71.5

71.9

71.6

68.7

Return on equity (ROE) (%)

7.9

6.7

10.7

12.5

13.4

12.2

10.1

11.8

12.7

12.3

12.8

Return on assets (ROA)* (%)

4.7

4.6

7.7

9.0

9.5

8.7

7.0

8.2

9.1

8.8

9.0

Yen/U.S. dollar

125.4

116.0

108.2

113.3

117.0

114.3

100.5

92.9

85.7

79.1

83.1

Yen/euro

118.1

131.0

134.5

137.9

150.1

161.5

143.5

131.2

113.1

109.0

107.2

Number of employees

2,639

2,907

3,115

3,334

3,580

3,916

4,148

4,578

4,960

5,324

5,594

3

Net income
Operating margin
Net income margin
Assumed exchange rates: US$1 = ¥95; €1 = ¥125
(Announced in May 2013)

Note: Including part-time employees
Notes:*1. U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥94 = US$1, the approximate rate of exchange on March 31, 2013.
*2. Two-for-one stock split*3. ROA = Net Income/Total Assets (Yearly Average)×100(Years ended March 31)

Net Sales by Geographical Region

Japan

EuropeAmericas

China

Asia Pacific(Including South Korea and IDEXX Laboratories, Inc.)

6.2%(¥ million)

16.8%

29.5%

(¥ million)

Intra-area transfers: Exports to Group aﬃliates, others
Sales to customers: South Korea, IDEXX and others
Sales to customers: Japan
Segment profit
100,000
15000

82,78480,000Net Sales¥145,578 million

34,01039,094

3,179

20.4%

Japan
Americas
EuropeChina
Asia Pacific

38,541

20,0000

Segment profit

29,70330,00025,476
12,000

9,000

4,000

18,000

2011*

3,955

2,783

39,73540,187

2012*

39,43640,000

2,872

3,000

37,032

10,000

8,000

5,799

24,000(¥ million)(¥ million)

Segment profit

Sales

24,42525,0005,000(¥ million)

5,379

6,000

19,29920,00015,00015,093

3,000

2,411

4,552

4,000

2,370

8,000

16,0004,000

10,000

2,000

4,000

3,000

6,000

1,000

8,000

2,000

5,000

1,000

2,000

2012*

2013*

0

0

2011

2012

2013

0

0

1,200

1,056
900

746

2,000

2011

7,868
7,109

6,000

2,384

12,0000

1,500

10,0006,000

0(¥ million)

Segment profit

Sales

9,043

32,000

2,129

2013*

(¥ million)

Segment profit

Sales

35,29624,0003,248

45,197
8,683

5,000

(¥ million)

26,855

6,816

40,00027.1%

11,939(¥ million)

Sales

88,16875,73060,000(¥ million)

600

330

2011*

2012*

2013*

0

0

300

2011*

2012*

2013*

0

* Revision in intragroup transaction prices

2

Sysmex Annual Report 2013

Sysmex Annual Report 20133

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Sharing Our Plans
with Stakeholders

8Long-Term Plan................................................................................................... 11n 

Mid-Term Management Plan........................................................................ 12n 

Q&A Session for Stakeholders..................................................................... 14n Sysmex at a Glance............................................................................................ 18n Market Overview and Sysmex’s Position.................................................. 20n Business Activities

Product Strategies.............................................................................................. 21n Sysmex’s State-of-the-Art Technologies.................................................................. 24n 

Customer Feedback........................................................................................... 27n 

Development of Instruments........................................................................ 28

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Research and Development.................................................................................... 32n Functional Structure

Purchasing, Production and Logistics.............................................................. 35n 

Sales and After-Sales Support................................................................................ 38n 

Corporate Philosophy and Core Behaviors.................................................. 42n 

Corporate Governance............................................................................................... 43n 

Corporate GovernanceBrand Equity......................................................................................................................................... 50n Socially Responsible Activities........................................................................................... 52n Sysmex Value
11-Year Consolidated Financial Data........................................................................... 58n Management’s Discussion and Analysis................................................................. 60n 

Financial Section

Consolidated Financial Statements............................................................................. 66n 

Independent Auditor’s Report.......................................................................................... 83n 

Global Network................................................................................................................................ 84n 

Brief History of the Company........................................................................................... 86n 

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Corporate Overview/Stock Information................................................................ 87n Forward-Looking Statements
Statements in this annual report, other than those of historical fact, 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 these statements.

4

Sysmex Annual Report 2013

Sysmex Annual Report 20135

Sharing Our Plans with Stakeholders

W

e are establishing ourselves as the undisputed global leader inhematology. Meanwhile, we are developing in emerging markets

and undertaking initiatives to accurately seize on future demand in the
non-hematology and life science fields, and we are working aggressively
toward future growth based on our new Mid-Term Management Plan.

6

Sysmex Annual Report 2013

Sysmex Annual Report 20137

Key Strategies for Future Growth

Message from the Chairman and CEO
Sales and income hit record levels in the fiscal year ended March 31, 2013. Net sales rose forthe 13th consecutive fiscal year, with operating income up for the 12th straight year. We expect
to grow even more in the fiscal year ending March 31, 2014, the first year of our new Mid-Term
Management Plan.

Operating Environment

Macro Environment

Healthcare and the IVD Market

Global Economy

Advanced Countries: Promotion of Healthcare
Reforms and More Sophisticated Technologies

 Global economy in a recovery phasehe Sysmex Group’s net sales reached a new historic highTadvanced countries, despite confusion in financial markets

in the fiscal year ended March 31, 2013. Sales expanded

and fiscal austerity measures stemming from the protracted

in Japan and overseas, driving net sales up 8.0% year on year,

financial crisis in Europe. The rate of economic growth into ¥145,578 million. Income also rose across all categories,

China, which has sustained robust emerging-market growthbuoyed by the effects of higher sales and successful efforts tofor some time, began to ease gradually. Nevertheless, emerg-

curtail selling, general and administrative expenses. Operating

ing markets—particularly the BRICs—have huge potential,

income increased 13.5%, to ¥21,805 million, and net income

which they demonstrated by maintaining solid economic

surged 18.0%, to ¥14,166 million.

growth overall. The Japanese economy also moved into a
growth phase, bolstered by the expectation of expansionary

year of ¥34 per share, we decided to raise this level to ¥40.

economic policies after a new administration took office.
On the healthcare front, in advanced countries graying

memorate the 45th anniversary of the Company’s founding.

populations are driving up healthcare demand, and sophis-Amounting to a ¥6 per share rise from the preceding fiscal

ticated technologies such as regenerative and personalized

year—our 11th consecutive year of increases—the resulting

medicine are gaining momentum, amid calls to hold down

consolidated payout ratio was 29.1%.

healthcare costs. On the other hand, in emerging markets
some countries are investing in healthcare infrastructure to

Ongoing Growth in the Healthcare Market

correct health disparities in line with their economic growth,

During the fiscal year ended March 31, 2013, the world

while others are receiving medical support through official

economy was characterized by general signs of recovery indevelopment assistance or aid from foundations.

Operating Income
Operating Margin

Net Sales

Operating income
Operating margin(¥ million)
24,000(¥ million)
160,000

21,805145,578
134,744
120,000

116,206

124,694

18,28912,0002009

2010(Years ended March 31)

8

13.5

14.7

Sysmex Annual Report 2013

2011

2012

2013

0

12

6

2009

2010

2011

2012

12,00011,412

2013

0

8,000

8,014

• Yen depreciation expanding revenues and profits,
but driving up costs of fuel and imported materials

 Accelerating eﬀorts to lower healthcare costs
 Promotion of regenerative and personalized medicine

Emerging Markets: Growing Demandin Line with Economic Growth Investment in healthcare infrastructure andincreasingly sophisticated healthcare

Technological Innovation
 Advances in genetic/molecular diagnostics

Competitive Environment
Structural Changes
 Response to globalization and high-value-added shift• Expansion of FTA/EPA increasing flexibility of funding,capital expenditure, personnel and services

 Companies from other sectors entering
the field of healthcare Reorganization of the in-vitro diagnostics (IVD) sector• Changes in ICT accelerating communications andreducing the importance of national borders

Healthcare and IVD markets expected
to maintain high rates of growth

I believe the overall healthcare sector promises strong

In our mainstay hematology field, we moved to a full-growth going forward, due to aging populations in advanced

fledged global launch of our flagship instrument model, thecountries, rising emerging-market populations and pushes to

XN-Series, after receiving approval in China and FDA clearance

build healthcare infrastructure in tandem with economic growth.

in the United States. We also commenced sales of a compact

At the same time, however, competition is likely to growmodel, the XP-Series (offering three-part white blood cell

fiercer, as players from electronics and other industries enter

differentiation), which is designed to meet emerging market

the field and the participation by companies in emerging

needs. In the immunochemistry field, we commenced sales incountries becomes more conspicuous.

Japan, China and other Asian countries of the HISCL-5000, a

Operating in this environment, Sysmex is establish-

new model that achieves increased functionality and speed.
In the life science field, we received approval from Japan’s

Simultaneously, we aim to grow by developing our business in

Ministry of Health, Labour and Welfare on extending applica-

emerging markets and by seizing on future market opportuni-tion of rapid diagnosis of cancer lymph node metastasis using

ties in non-hematology, life science and other fields.

the OSNA method to include stomach cancer, in addition tobreast and colon cancer. Furthermore, we extended our sales

Seizing Opportunities in a Changing Business
Environment, Continuing with Unique Initiatives

4,000

0

 Reversal from state of yen appreciation

ing itself as the undisputed global leader in hematology.

12,007

9,765

15.0

14.3

6,000

40,0000

13.5(¥ million)
16,00014,16618
15,134 15,740

80,000Net Income

19,20618,000111,843(%)
24

Exchange Rate Trends• Recovery in competitiveness of exports by
Japanese companies

Although we had initially planned on dividends for theThe ¥6 per share increase includes a ¥4 dividend to com-

• Advanced countries’ economies recovering, andemerging markets maintaining high rates of growth

2009

2010

2011

2012

2013

area in Europe and Asia for the RD-100i, used in detecting thelymph node metastasis of breast cancer.

We undertook a variety of growth-oriented initiatives in the

Efforts to augment our sales and support network

fiscal year ended March 31, 2013, such as introducing new

included the relocation of our U.S. office to accommodate

products in hematology and non-hematology fields, andexpansion there. The new office supports the infrastructureenhancing our sales and support networks.

that the Company’s continued market share growth requires,

Sysmex Annual Report 20139

Key Strategies for Future GrowthLong-Term Plansuch as a virtual studio for providing support over anthrough accelerated expansion under our new Mid-Termonline network. Targeting markets where future growth isManagement Plan.

anticipated, we transitioned our sales and support system in

In May 2013, we announced our new Mid-Term

Thailand partly to a direct sales structure, and we opened aManagement Plan, which concludes in the fiscal year ending

representative office in Mongolia.

March 31, 2016. Based on our long-term management vision

As a unique and global company, we will lead the healthcare testing field by providing ourcustomers with solutions that leverage our advanced technologies and distinctive strengths totheir full benefit.

and three core strategies, this plan is designed to propel
Initiatives such as these led to sales growth in Japan and over-Sysmex toward its long-term targets. By the fiscal year ending

seas. In Japan, we continued to promote solution proposals

March 31, 2016, we are aiming for net sales of ¥220.0 billion

and made steady progress in the mainstay hematology field,

and operating income of ¥40.0 billion. (Assumed exchange

but domestic growth was moderate, rising 1% year on year.

rates are US$1 = ¥95 and €1 = ¥125.)In the Americas, despite longer-than-expected clearance

True to our Group corporate philosophy, the “Sysmex Way,”S

ysmex’s Long-Term Management Vision is to be “A
Unique & Global Healthcare Testing Company.” Our long-term goals are to be the undisputed global leader in hematol-

support networks in emerging markets, which are expected

ogy, the leading company in the Asian IVD market and theto grow rapidly, we aim to become a comprehensive IVD

leading company in molecular diagnostics “theranostics.”* Oursupplier and lead the development of testing within thesefinancial target is to achieve net sales of ¥500 billion.

countries. Particularly in Asia, we intend to make the most ofprocedures for the XN-Series and uncertainty about the direc-

and our core behaviors targeting stakeholders, we aim to meettion of the healthcare reform law, sales in the United States

our social responsibilities, thereby enhancing corporate value

The three core strategies for promoting our long-termrose thanks to increased sales of the XN-Series and higher

and satisfying the expectations of our stakeholders. I ask for

management targets are “Leading Hematology,” “Leading insales of reagents and support services. Sales of five-part white

the continued support of our stakeholders in these activities.

Emerging Markets” and “Innovating Life Science.”

blood cell differentiation hematology instruments (see page

In “Leading in Emerging Markets,” by introducing products
tailored to meet market needs and enhancing our sales andthe advantages that we have created as we work to become
the leading company in non-hematology fields.
The third strategy, “Innovating Life Science,” indicates that

Under the first strategy, “Leading Hematology,” Sysmex

in the area of molecular diagnosis, particularly for cancer, we arewill secure the undisputed leading global position in the field

striving to create unique testing techniques and achieve synergy

In Europe, plagued by economic crisis, results wereof hematology by providing products with high levels of qual-

between our own technologies and those developed by others.

affected somewhat by government budget delays, but sales of

ity and usability, as well as advanced after-sales support. As

In this way, we intend to create new value through personalized

the XN were favorable in France and the Benelux countries.

the industry frontrunner, by applying advanced technologies

medicine and by integrating therapy with diagnostics.

Higher sales in Russia, the Middle East, Africa and otherand through ongoing R&D initiatives we will create new value*C omposite word (therapy + diagnostics) that means testing with highemerging markets also contributed to higher sales for thein the area of blood disorder diagnosis.

clinical value to realization of personalized medicine.

21) also grew in Central and South America.

Europe region.
Sales were sluggish in some parts of the Chinese market
in the fiscal year ended March 31, 2013, but in the hematology
field sales of system products continued to rise, as did sales ofCore Strategies

the XN and in the hemostasis field.
Despite delays in renewing distributor agreements in

Leading
Hematology

India, sales rose in the Asia Pacific region as a result of
increased selling volume stemming from the partial shift to(Undisputed
Global Leader
in Hematology)

direct selling in the Philippines and Thailand, plus favorable
IT-related sales in Oceania.

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

Long-Term Management Vision:

A Unique & Global
Healthcare Testing Company

Consequently, the Group’s overseas sales were ¥105,388
million, up 10.9% year on year. The overseas sales ratio wasLong-Term Management Targets

72.4%, up 1.9 percentage points from the previous fiscal year.

 Establish uniqueness as a comprehensive
IVD supplier

Leading in Introduce products and services that meet
Emerging Markets
emerging market needs, reinforce sales andReview of the Previous Mid-Term Management Plan
and the New Mid-Term Management Plan

(Focus on
Emerging Markets)

Progress on our previous Mid-Term Management Plan,

support networks, and lead the developmentof testing within these countries
 Strengthen the non-hematology businessin Asia

unveiled in May 2011, was affected significantly by foreignexchange rates, but nonetheless we achieved sales andPositioning• Undisputed global leader in hematology• Leading company in the Asian IVD market• Leading company in molecular diagnostics“theranostics”

income increases in the fiscal years ended March 31, 2012 and2013. We focused on leveraging the strengths of our stablebusiness model. Successful efforts to lower cost of sales andhold down selling, general and administrative expenses led tohigher operating income. Going forward, we plan to tackle theissue of growth in the non-hematology and life science fields

10Sysmex Annual Report 2013

Hisashi Ietsugu
Chairman and CEO

Innovating
Life Science Create unique testing technologies in thearea of molecular diagnostics, centeringon cancer
 Create new value through personalized
medicine and by integrating therapy
with diagnostics

Financial target
Net sales:¥500 billion
Sysmex Annual Report 201311

Key Strategies for Future Growth

Mid-Term Management Plan
We formulated a mid-term management plan concluding in the fiscal year ending March 31, 2016.
Through a business unit structure, we are aiming to bolster the level of specialization andincrease the speed of decision-making and execution in each testing field.

In May 2013, we formulated a new Group Mid-Termstructure and accelerate implementation. The plan defines

Management Plan for the three years ending March 31,

topics of key importance to be addressed for each business2016, to sustain our high rate of growth and boost profit-

unit, and introduces overall management spanning strategic

ability. Under this plan, in addition to the ICH Business Unit,

planning and product development to market introduction.

which we formed in the fiscal year ended March 31, 2013,

By the fiscal year ending March 31, 2016, we expect towe established the HU Business Unit and the LS Businessachieve net sales of ¥220.0 billion and operating income ofUnit. This plan looks to reinforce our business promotion¥40.0 billion.

structures in each field of testing through a business unit

(Assumed exchange rates are US$1 = ¥95 and €1 = ¥125.)

Quality assurance

Corporate staﬀ

Business strategy

Research, technological development(Hematology andurinalysis fields)

Net sales¥220.0 billion
14.8%

CAGR (Fiscal years to March 31, from 2013 to 2016)
Operating income¥40.0 billion

Operating margin

18.2%
22.4%

CAGR (Fiscal years to March 31, from 2013 to 2016)

15.5%

ROE
Operating cash flow

¥35.0 billion

Free cash flow

¥20.0 billion(Assumed exchange rates are US$1 = ¥95, €1 = ¥125, CNY1=¥15 and S$1=¥76.)

Key Objectives

Business Unit Structure

HU Business Unit

Mid-Term Management Targets (Fiscal Year Ending March 31, 2016)

ICH Business Unit
(Immunochemistry,
clinical chemistry andhemostasis fields)(1) Enhance undisputed leadership position and increase profitability in hematology(HU Business Unit)(2) Maintain growth rate in urinalysis field and augment our product portfolio(HU Business Unit)

LS Business Unit
(Life science field)

New businesses,
etc.

Manufacturing, SCM(3) Achieve high level of growth in the field of immunochemistry by rapidly developing business in Asia
(ICH Business Unit)(4) Achieve sustained growth by reinforcing our product portfolio in the hemostasis field(ICH Business Unit)

Global support

Japan

Americas

EuropeChina

AP(5) Accelerate commercialization in the OSNA business and lab assay* business(LS Business Unit)(6) Strengthen global R&D initiatives to contribute to personalized medicine and integrate therapy
with diagnostics(7) Achieve increases in efficiency and profitability through global supply chain management
reforms, and enhance system to provide a stable supply of products by expanding factories(8) Reinforce global regulatory affairs structure to enable flexible response to fast-changing
regulations(9) Recruit and train personnel to accelerate business structure reform(10) Prepare for IFRS application, and realize business process alignment and visualization throughbusiness process management (BPM) initiatives*P rovision of laboratory testing results as services

12

Sysmex Annual Report 2013

Sysmex Annual Report 201313

Key Strategies for Future Growth

Q&A Session for Stakeholders
We will work aggressively toward the goals of our new Mid-Term Plan in order to meet our
stakeholders’ expectations.

after-sales support, to customers in more than 170 countries.
Going forward, we plan to further leverage our collective
strengths to seize the position of undisputed global leader.
Specific advances in the hematology field include ourflagship model, the XN-Series. We commenced a full-fledged

Q

Please share with us your thoughts on the
new Mid-Term Management Plan.

A

global launch of this product in the fiscal year ended March 31,
us to discern customer needs more rapidly, think up ways toprovide value to them, set up structures to do so and execute
operations swiftly and accurately.
We are working to enhance the mobility of each of ourThis plan is underpinned by our mission of “shaping

businesses so that we can seize opportunities to accelerate

the advancement of healthcare,” as described in

growth by responding reliably to customers’ needs even when

our corporate philosophy, the Sysmex Way. To

facing dramatic changes in our operating environment.

contribute to society and continue growing, we need to keep
creating our own unique technologies and business model
as an industry frontrunner, and providing new value to ourcustomers. The new plan involves the reorganization of functionally separate organizations into three business units. By
adopting a business unit system, we will clarify responsibilities
and targets for each business and augment the speed ofdecision-making and execution. In this manner, rather thansimply providing product development, manufacturing, sales
and support services, the new organization should enableQ

2013, after receiving clearance in China and the United States.
We plan to accelerate global development even further. To provide our customers with an even better working environment,with the XN-Series we have introduced a new concept, added
parameters and substantially increased measurement accuracy
for low platelet counts, associated with such diseases as
thrombocytopenia. We also offer a diverse lineup of productsthat can be freely combined to meet a host of customer needs.

Would you explain some of the businessdevelopments of the HU Business Unit
under the new Mid-Term Management Plan?

Furthermore, the introduction of a concentrated reagent raises

The HU Business Unit is our specialized organization

prediction function. In emerging markets, we are stepping

for the hematology and urinalysis fields.

up sales for our compact model, the XP-Series, which should

Looking first at the hematology field, Sysmex has

enable us to cultivate untapped market demand.

A

earned its leading global position by providing productswith high levels of quality and usability, as well as advanced

operational efficiency and saves on reagent storage space, andwe have reduced down time by using a network-based service
to handle preventive maintenance checks and perform a failure

As the industry frontrunner, by continuing to apply
advanced technologies and through ongoing R&D initiatives
we aim to create new value in the area of blood disorderdiagnosis. At the same time, we will continue to grow as aleading company in the next-generation hematology field.
We will accelerate market introductions in the urinalysis
field as well, utilizing alliances to reinforce our global sales.

Q

Please describe business developments
under the new Mid-Term Management Planfor the ICH Business Unit.

test system through sales and support initiatives that takeadvantage of specialization, such as scientific support in JapanA

fiscal year ended March 31, 2013, we set up the ICH Businessa high-throughput instrument requiring only small sample

Unit as our specialized organization for three non-hematology

volumes and a compact and highly capable instrument manu-

fields: immunochemistry, clinical chemistry and hemostasis.

factured by Furuno Electric. We will continue promoting sales

characteristic testing parameters (reagents).

our presence and accelerate growth in IVD fields

In the clinical chemistry field, Sysmex is leveraging its

other than hematology. As part of this move, in thesales and support networks by offering JEOL’s JCA-BM6010/C,

In the hemostasis field, we are accelerating the market
introduction of such instruments as the CS-5100, a newmodel focused on mid-range to high-end facilities that offers

Sysmex Annual Report 2013

oring to expand sales of our HISCL-Series immunochemistry

and other parts of Asia. Moreover, we will quickly launch

As our next pillar of growth, we will work to increase

14

With regard to immunochemistry testing, we are endeav-of these products in China and other Asian countries.
By leveraging the strengths we have cultivated in Asia,
we will accelerate our developments in both the hematology

the functionality and high speeds necessary to achieve theirand non-hematology fields in our quest to become a compre-

objectives. By introducing products designed for emerging

hensive IVD supplier in China and the AP region, where highmarkets, we are working to achieve sustained growth bylevels of growth are expected. We will achieve these aims by

expanding our product portfolio, and we will use alliances tolaunching products tailored to market needs and enhancing

develop our business globally.

our sales and support networks.

Sysmex Annual Report 201315

Business Activities
Q&A Session for Stakeholders

Q

categorized into three stages (H: High; I: Intermediate; and L:
Low risk). We intend to search for new opportunities in clinical testing going forward.

A

Within life science, in the area of “theranotics”—par-In ways such as these, Sysmex is conducting R&D on new

ticularly for cancer—we are endeavoring to create

diagnostic technologies to improve patients’ quality of life andunique testing techniques and achieve synergy

offer healthcare optimized for individual patients.
*1 One-step nucleic acid amplification*2 Provision of laboratory testing results as services

between our own technologies and those developed by others. In this way, we intend to create new value by developingQ

diagnostic technologies suited to personalized medicine andWhat closing message would you like toleave with stakeholders?

by integrating therapy with diagnostics.
The RD-100i, which employs the OSNA* method, enables
1

the automatic, rapid and highly precise detection of cancer

introducing the system in Japan, Europe—particularly Spain,Aand the Asia-Pacific region. Going forward, we plan to expand

shareholders, we intend to provide a stable dividend on ametastases in the sentinel lymph node, helping to reduce theSysmex aims to maintain a proper balance between

burden of testing on patients and leading to improvements

aggressive investment, which is designed to sustain

in their quality of life. Having confirmed its efficacy, we are

steady high growth, and returns to our sharehold-ers as our earning power increases. In terms of returns tothe sales area to include emerging markets where growth iscontinuous basis under our basic policy of sharing the suc-

expected. We also intend to promote its application to othercesses of our operations in line with business performance. In

forms of cancer beyond breast, colon and stomach cancer.

line with this policy, for the fiscal year ended March 31, 2013,

Next, in 2012 we began offering a lab assay service*2 in

we increased dividends for the 11th consecutive fiscal year.

Japan for research involving the risk of recurrence of early-

We will aim to remain true to our Group corporatestage breast cancer, employing a new technology known as

philosophy, the “Sysmex Way,” and our core behaviors toward

Cell Cycle Profiling (C2P), and we will work toward the earlystakeholders. As a result, we intend to meet our social respon-commercialization of this service. Measurement will involve

sibilities as a listed company and enhance corporate value. I

studying the expression amounts of two types of proteinsask for your ongoing support of Sysmex as we set the stage toincluded in tumor tissue removed from the patient as well as

take on new challenges over the medium to long term.

Dividend Policy and Dividend Forecast
(Yen)
50

40

Dividend (annual)
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 successesof our operations in line with business performance.

80

34
60

25
40

20

18

18.9%
6.25

31.9%

13

22.6%
7.5

17.9%

17.8%

29.4%

29.1%

27.0%

29.1%

26.8%

10

23.4% 20

20.0%
0

2003

2004

2005

2006

2007

Notes: Figures adjusted for stock splits
Two-for-one stock split conducted on November 18, 2005
Two-for-one stock split conducted on April 1, 2011

16

42

40

28
24

0

(%)
100

30

30

10

Seizing Opportunity
in Response toMarket Needs

their enzyme activity. In principle, these results will then be

Could you also please outline business developments in the LS Business Unit, as laid out
in the new Mid-Term Management Plan?

Sysmex Annual Report 2013

2008

2009

2010

2011

2012

2013

2014
(Forecast)(Years to March 31)

Sysmex provides the instruments and reagents needed for hematology,
hemostasis and other tests to customers around the world. In recent years,
we have also been moving ahead with research to create new tests for cancer,
diabetes and other illnesses.
Sysmex Annual Report 201317

Business Activities

Sysmex at a Glance
Business Segments

Sysmex derives approximately 94.6% of its revenues from thediagnostics field in the business of testing samples of humanbody 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 62.4% 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 hemostasis, immunochemistry, clinicalchemistry and urinalysis, 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)
2011

2012

2013

106,316 109,384

117,683

127,475

137,732

71,216

77,28482,32190,8172009
n Diagnostics
n Hematology

2010

72,326n Hemostasis

13,97014,59915,987

17,643

21,211n Immunochemistry

2,639

2,426

2,677

2,024

2,028

n Clinical chemistry

2,479

3,375

3,242

3,498

3,080

n Urinalysis

8,154

8,233

9,417

10,796

10,906n POC testing

2,793

3,584

3,671

5,303

4,799

n Others

5,062

4,839

5,402

5,887

4,888

n IT

3,145

2,870

3,071

3,885

4,215

n Other business

2,381

3,951

3,939

3,382

3,630

Sales Composition by Business(¥ million)

134,744
124,694
120,000*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

62.4%
14.6%
 Immunochemistry 1.4%
 Clinical chemistry 2.1%
 Urinalysis
7.5%
 POC testing
3.3%
 Others
3.3%

90,00060,000 IT
 Other businessNet sales¥145,578 million

2.9%
2.5%

(Particle analysis, etc.)

0

2009

2010

2011

2012

2013

(Years ended March 31)

Sales Composition by Productn Instruments
n Reagentsn Maintenanceservicesn Others

2009

2010

2011

2012

2013

38,20235,971

41,74946,14247,867

48,96653,47255,291

59,906

66,505(¥ million)

145,578

150,000
150,000

134,744
120,000

120,000

116,206
111,843

110,724

124,694

134,744

124,694116,206

111,843

 Instruments

90,0009,684

11,50012,14012,823

14,13014,98915,262

15,514

15,873

17,076(Years ended March 31)

 Reagents
 Maintenanceservices Others

90,00060,000

32.9%
45.7%
9.7%

Net sales¥145,578 million

11.7%

30,00060,000
0

2009

2010

2011

2012

2013

(Years ended March 31)

Regional Segments by Destination

S

94.6%

 Hematology

30,000(¥ million)

ysmex supplies products and services to customers in more than170 countries. Sales in three key regions—Japan, Europe and theAmericas—account for approximately 76% 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.

 Diagnostics

111,843(Years ended March 31)

Product Segments

S

116,206

 Hemostasis* Acronym for in-vitro diagnostics.

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 otherservices currently account for approximately 67.1% of net sales.
Industrywide, sales are trending upward, with instrument sales focusedon the second and fourth quarters of the fiscal year.

145,578

150,000

Sales Composition by Destination124,694(¥ million)(¥ million)n Japann Americas

2009

2010

2011

2012

2013

35,82838,62638,541

39,73540,19023,41423,444

26,53528,60730,765n Europe

35,45436,44635,41437,37039,587n China

10,1 1 1

11,84315,093

19,29924,430n Asia Pacific(Years ended March 31)

7,036

5,847

9,1 1 1

9,733

10,606125,000(¥ million)

110,724

150,000
100,000

120,000

111,843

101,041

116,206

145,578

134,744
116,206

124,694

111,843

75,000 Japan

90,000 Americas
 Europe

50,000 China

60,000 Asia Pacific

27.6%
21.1%
27.2%
16.8%
7.3%

Net sales¥145,578 million

25,00030,000
0

0

2007

2008

2009

2010

2011

2009

2010

2011

2012

2013

(Years ended March 31)

18

Sysmex Annual Report 2013

Sysmex Annual Report 201319

Business Activities

Market Overview and Sysmex’s Position

Product Strategies
4Diagnostics

Clinical 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 Categories
Examination

Diagnosis and Treatment

RecoveryDiagnostic Support
Monitoring Eﬀects of Therapy

Clinical Laboratory Testing

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 ¥220 billion. 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 requirefew 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 typesof white blood cell, enabling various complaints and blood
disorders to be analyzed in more detail. In addition, analysis
systems (five-part white blood cell differentiation instrumenttransport systems) mainly at large-scale facilities in Japan, theUnited States and Europe are realizing efficiency gains throughthe use of robotics.

Sysmex’s Business Domains

In-Vivo Diagnostics• X-rays/CT scanning• Respiratory function testingand others• Electrocardiograms• Electroencephalograms* Diagnostics for medical checkups

Specialization• Hematology* • Hemostasis• Urinalysis*• Immunochemistry• Clinical chemistry*S

ysmex’s business in the IVD domain involves the provision of instruments, reagents and laboratory systems around the globe
in such fields as hematology, hemostasis, urinalysis, immunochemistry and clinical chemistry. 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 June 30, 2013)
Leveraging the strength of this geographical advantage, we
Japan
China
AP
Americas Europe
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
Hemostasis
Yes
Yes
Yes
Yes
Yes
fields in Japan, China and the Asia Pacific region.
ClinicalIn the Americas and Europe, however, we maximize our
Yes
Yes
Yes
chemistry
management resources by strategically concentrating our sales
Urinalysis
efforts on fields of particular expertise: hematology, hemostasis
Yes
Yes
Yes
Yes
Yes
(Urine sediment)
and urinalysis.
Immunochemistry

Yes

Market size (¥ billion)

3,670

Hematology

220

Hemostasis

130

Immunochemistry

1,190

Clinical chemistry

500

Urinalysis

60

Others(Urine sediment 24)
POC (excluding SMBG*)

490

Others1,080* Self monitoring of blood glucose

20

Sysmex Annual Report 2013

Hematology¥220 billion

Sysmex(Three-part white blood cell diﬀerentiation analyzers)

Segment

IVD total

Information Diversity

Diagnostics Market

XN-1000(Single module)

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.

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.

XS-Series

Yesysmex 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 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-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.

XN-2000(Twin module)

XN-9000(Transport system)

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

Reagents

Hematology testing requires specificreagents for dilution, hemolysis and staining,as well as for use in analyzers. We also manufacture reagents for other areas, including
hemostasis, immunochemistry, urinalysis andclinical chemistry.

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.

(Sysmex estimates)Eﬃciency and Handling Capability

Scale of Laboratory
Sysmex Annual Report 201321

Business Activities

Product Strategies
4Diagnostics

4Diagnostics

Hemostasis

Urinalysis

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 ¥130 billion. 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.

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 theabovementioned solids are present. In the second, the quantitiesof these substances are analyzed. Sysmex estimates that the
global urinalysis market accounts for sales of ¥60 billion, withurinalysis sediment making up ¥24 billion. We introduced theworld’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.

POC Testing

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.

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

POC is an abbreviation for point-of-care. POC testing can be
carried out on the spot in operating rooms, intensive care units,clinics or at the patient’s bedside, rather than in central laboratories, making possible rapid diagnosis and treatment. Currently,
Sysmex markets rapid detection kits to assist in influenza
diagnoses and easy-to-use devices to measure intravesicalurine volume.
Sysmex is working to increase its sales in this category byextending its business into pet diagnostics. In 2010, we formed
a business alliance with IDEXX Laboratories, Inc., a leader in thisLaboratory Information Systems
Advances in information technology have generated demandin the healthcare industry for IT-driven medical information
networks. Such networks contribute to effective diagnoses
by collecting and analyzing test data and consolidating thisinformation into a convenient database. Sysmex plans toaccelerate its IT deployment to expand business with hospitals, clinics and remote medical care capabilities.

La-vietal LS
HISCL-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.

22

Sysmex Annual Report 2013

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.

In 2006, the Sysmex-developed system for rapid detectionof breast cancer lymph node metastasis based on the OSNA
method was launched in Europe. This system was covered by
the Japanese national health insurance program two years later,in 2008, and we are steadily introducing this system to markets
in Europe and Japan. We are also expanding the applicability ofthis system to colon cancer and stomach cancer, and in 2012,
we began offering a laboratory testing service in Japan forresearch involving the risk of recurrence of early-stage breast
cancer, employing a new technology known as Cell Cycle
Profiling (C2P).

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

RD-100i

LYNOAMP BC

4Other Business
Self-Medication Support

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 ¥500 billion, making it the third-largest
market in the IVD domain, after immunochemistry and POC,

ProCyte Dx (IDEXX’s brand name)

4Life Sciences4IT
market at ¥1,190 billion—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.

field. Under this accord, we began providing hematology analyzers for pets and other animals on an OEM basis and selling them
via IDEXX Laboratories’ networks.

excluding SMBG. Among other contributors to demand growth isthat as standards of living 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 to sell these analyzers andtheir reagents in China and the Asia
Reagents
Pacific region.

Peripheral artery monitoring devices that can measure hemoglobin levels without blood sampling are used at fitness centersand various other sites. Sysmex also sells health management
support software that supports health check services at drugstores and in the healthcare sections of other shops.

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 on these operations,
we launched the ProCube business, providing numerous
pharmaceutical companies with proteins used in drug development and testing.

ASTRIM SUThis non-invasive blood vessel monitor measures
hemoglobin concentrations and blood-vessel width
through near-infrared spectroscopic images simply byplacing a finger on the detector. There is no need forblood sampling.

Sysmex Annual Report 201323

Business Activities

Sysmex’s State-of-the-Art Technologies
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.
Flow Cytometry: One of Sysmex’s Core Technologies

In 2011, Sysmex launched its new XN-Series of products in
the hematology field. To enhance customer testing environ-Blood cells can be broadly divided into three categories:

ments, the XN-Series provides a body fluid measurement

red blood cells, white blood cells and platelets. Platelets

mode and substantially increases measurement accuracy forare the smallest in diameter, at around 2 micrometers, while

low platelet counts, associated with such diseases as throm-

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

bocytopenia, to boost clinical value. Flow cytometry is used to

Hematology testing requires the separation of blood cells bymeasure the number of white blood cells and 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.

move carbon dioxide out.

Three Processes in Counting Red Blood Cells

type according to size and cell information, and their numbers
must be measured accurately.

Accurate Dilution
Flow Cytrometry 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 cytrometry 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 cytrometry 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 cytrometry is becoming a core technology thathas a wide range of potential applications.

Laser diode

Collimator
lens

Spectrum filter
Dichroic
mirrorAvalanche
photodiode*1

PhotodiodePassing cells one by
one through thedetection aperture

Condenser lensBeam stopper

Condenser lens

Flow cell
Photodiode

Flow Cytometry Method Acquisition ParametersS hrinkage of red blood cells and platelets by means of asurface-acting agentn 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

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

: Red blood cell
: White blood cell
: PlateletnLateral fluorescentlight intensity
Side-scattered
light intensity
Forward-scattered
light intensity

24

Sysmex Annual Report 2013

Lateral fluorescent light intensity*2Side-scattered light intensity*3

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 fluidthat forms a sheath

Information on RNA and DNA amounts
Information concerning the internal
structure of cells (nucleus shape,presence of cell granules, etc.)

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 201325

Business Activities

Sysmex’s State-of-the-Art Technologies

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 230 locations throughout the world.

Kyoto University Hospital, one of Japan’s leading general hospitals, has employed Sysmex
products for many years. Always maintaining the goal of making its operations more efficientand increasing its sophistication, in 2011 the hospital’s laboratory underwent a major reconfiguration. For this makeover, Sysmex provided a total solution including its new XN Series anddiagnostic information system. Below, we ask why the hospital elected to use Sysmex products.

M

Each year throughout the world approximately 1 million

inimizing the extent of dissection in breast cancer

people are said to be affected by stomach cancer. Japan

treatment is generally considered desirable in termsof the patient’s quality of life (QOL). At present, pathology

accounts for approximately 110,000 of these patients, andlabs offer a provisional diagnosis of the sentinel lymph node,

the rate of death from this type of cancer is second only towhere metastasized cancer cells first reach, and conduct

lung cancer, for men and women alike. During treatment

confirmatory studies to determine the extent of resection, as

for stomach cancer, the existence of lymph node metastasis

well as the post-surgical therapeutic principle. Sysmex’s geneis one determinant of the cancer’s progression. In addition

amplification detector, the RD-100i, enables the rapid andto whether this metastasis occurs, knowing the number ofhighly precise detection of breast cancer metastases in themetastases and their locations can help a physician decidesentinel lymph node. Having confirmed its efficacy, we areon treatment methods, such as whether to excise a portion

now introducing the system at about 60 hospitals in Japanof the stomach or to use anti-cancer agents. Sysmex’s OSNA

and about 170 in major European countries, particularly Spain.

method enables the rapid detection of metastasis over all

Going forward, we plan to introduce the system in emerging

lymph nodes. This system makes the rapid detection ofmarkets where growth is expected.

stomach cancer lymph node metastasis more precise, and is
expected to contribute to better decisions regarding treat-

Having extended the effective scope of detection toment methods.

include colon cancer and stomach cancer as well as breast

In the future, we will expand the sales area for products

cancer, in December 2010 we received manufacturing andmarketing approval from the Ministry of Health, Labour andemploying this method and push forward with research

Welfare in relation to colon cancer, followed by approvaldesigned to extend its applicability to other types of cancer.

targeting stomach cancer in July 2012.

Shuichi Shiga,
Qualified Class 1 Laboratory Technologist, Manager,
Department of Clinical Laboratory, Kyoto University HospitalQ
A

Of the many manufacturers, why did you
select Sysmex when conducting this large-scalereconfiguration of your entire laboratory?

also clearly shows that Sysmex is making a substantial effort toratory information system (IT) that covered nearlylook at things from the customer’s perspective.

the entire IVD spectrum, spanning instruments,

reagents and after-sales support. As you can probably inferfrom the scale and role of our hospital’s activities, in addition to
routine testing we proactively support research. For this reason,
we needed a system that could automatically pick out, store

system products we needed products for immunochemistry

OSNA method
TissueHomogenized buﬀer
New sample
preparation method
RD-100i (analyzer)• Stabilization of mRNA
• Prevention of amplificationinhibitory eﬀects

Direct gene amplification
by RT-LAMP(without RNA purification)
LYNOAMP BC (proprietary reagent)

26

Sysmex Annual Report 2013

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

were able to boost our processing capabilities several times,

You proposed a total solution centered on a labo-

ous samples being handled. Also, in addition to hematology and

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.

a single instrument, but by combining multiple instruments wemaking mass-processing possible. I think the modular concept

and deliver needed research samples from among the numer-

The OSNA Method

Processing throughput would diminish if we were to use only

Q
A

What is your impression ofconcentrated reagents?
This has considerably extended the time between
setting in one set of reagents until it is time tochange to the next. The use of concentrated

and emergency testing. We chose Sysmex because it proposed

reagents also has made them simpler to change, which raises

a total solution that uniquely met all of these needs.

the efficiency of testing operations.
This system is particularly popular among our female

Q
A

How would you evaluate
the new XN Series?
One appeal of the XN Series is its ability to increasemeasurement precision when counts are low, suchas for low white blood cell and platelet counts.

Our hospital gives the series high marks for the extremely highaccuracy of its testing results, including for low counts. This allows
us to provide a wealth of information to doctors, particularly data
involving low counts, that they can use for post-transplant moni-

staff. The process of changing reagents is much less arduous,as they no longer have to deal with the size and weight of
20-liter reagent containers.

Q
A

What are your hopes for Sysmex
going forward?
We would ask that you listen closely to determine what laboratories need, and then reflect
those needs in your development. Your develop-

toring. High functionality for software as well as on the hardware

ment of the XN Series extensively reflects customer needs,

front gives us more flexibility when measuring individual samples.

and I understand that customers rate it highly. Companies

The series is also superb on the usability front. Our hospitalthat take careful heed of their customers and make goodtakes numerous samples having low white blood cell and plate-

products as a result will certainly grow. We hope that Sysmex

let counts, and we need to process these samples efficiently.

will remain cognizant of this fact and continue to grow.
Sysmex Annual Report 201327

Functional Structure
Development of Instruments

Fully AutomatedHematology Analyzers

1964
1965

Semi-AutomatedHematology Analyzers

Hemostasis
Analyzers

Urinalysis
Analyzers

Immunochemistry
Analyzers

Life Science
Analyzers

CC-10011970

CC-1001

1975

CC-710CC-1002

TU-100CC-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-108CC-800CC-800E Series
E-5000/E-4000/
E-3000E-2500/
E-2000CC-700E-5000CA-100CC-780CA-100AA-100Fully AutomatedHematology Analyzers

1985

Enhancing Our Global
Value Chain to Seize
Further Opportunities

CA-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

K-1000
NE-1500

SE-9000

CA-5000

K-2000K-4500World’ s first model to use
a semiconductor laser

1995

UA-1000

F-810
F-610
F-310

PAMIA-30

PAMIA-30

CA-1000 CA-1000 UA-2000

K-800

SE-9000

CA-5000

F-820
F-520

CA-6000

UF-100PAMIA-50

PAMIA-50

SF-3000

World’ s highest
processing capacity

KX-21

XE-2100

UF-100CA-1500

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

2000

CA-500 Series
CA-500 Series
CA-1500

UF-50

CA-7000
KX-21N

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

pocH-100i

PAMIA-40i
CA-7000

PAMIA-40i

GD-100UF-110i

pocH-100i

2005

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

UF-110i

CS-2000i

HISCL-2000i

UF-1000i

HISCL-2000i
CS-2000i

XE-5000

UF-1000i
XS-1000i

RD-100i

UF-500i
CA-8000

2010

XT-4000i

CA-8000

XN-Series

28

XN-Series

Sysmex Annual Report 2013

UX-2000

CS-5100
XP-3002013

RD-100i

XS-500i

CS-5100

CA-600 Series

HISCL-5000

XP Series

UX-2000HISCL-5000

As a comprehensive diagnostics supplier, Sysmex has built an integrated
business encompassing R&D, production, sales and after-sales support toprovide products and services to healthcare facilities around the world.

CA-600

Sysmex Annual Report 2013

29

Functional Structure

Perspective
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 44 locations in 29 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

Europe, 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, centeredin Japan and with facilities in Europe and Asia, and theCompany 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 and high-valueadded products.

Overseas
R&D Center Europe
Sysmex New Zealand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)Sysmex do Brasil Industria e Comercio

Japan

Japan

EuropeKakogawa Factory

Sysmex International ReagentsSysmex Europe (Germany)

Sysmex RA
The Kakogawa Factory, which produces all Sysmex instruments
shipped worldwide, provides a stable supply of high-quality
products. Sysmex products enjoy an excellent reputation withcustomers. We have introduced quality and process management
systems to ensure quality in all processes from the testing andassembly of components to product testing and shipment. Also,in May 2014 we will establish a new factory in Kakogawa to meetgrowing global demand for IVD instruments.

(two factories)
OverseasSysmex Reagents America (US)Sysmex do Brasil Industria e Comercio (Brazil)

Sysmex Middle East (U.A.E.)
Sysmex South Africa (South Africa)and othersSysmex Europe (Germany)

China

Jinan Sysmex Medical Electronics (China)

Sysmex Shanghai (Shanghai)Sysmex Wuxi (China)

Sysmex Hong Kong (Hong Kong)

Sysmex Asia Pacific (Singapore)Sysmex India (India)
Sysmex emphasizes local raw material procurement and product manufacturing,as this approach allows stable product supply and competitive pricing. In April
2012, we built a new production wing at our Ono Factory in Japan, adding equipment and raising reagent production capacity to 1.5 times the previous level.
The Company also is expanding its reagent plant in Jinan, China, to capitalize
on rapid market growth there. Compared with 2010 levels, the augmented
plant, which commenced production in 2012, quintupled the factory’s reagent
production capacity.

Sysmex Annual Report 2013

Sysmex France (France)

Asia PacificSysmex Asia Pacific (Singapore)

In addition to a direct sales and support network,
the use of alliances has enabled Sysmex to build aglobal sales and support system tailored to meet local
characteristics. In 2011, we established subsidiaries in
the Philippines, which is experiencing ongoing economic
development and expanding its healthcare infrastructure,and in Russia, one of the BRICs countries. In 2012,
we also revised our sales structure in Thailand, making
a partial move toward direct sales. In South Korea,
we have converted our distributor to a subsidiary andtransitioned to a direct sales and support organization.
At the same time, we renewed sales and service
agreements with Roche and Siemens in areas where we
operate through distributors.

Direct sales

Customer needs

Indirect sales(Distributors)

Worldwide customers

Production (Reagents)

Sysmex Medica

30(Brazil)

Production (Instruments)

Sysmex India (India)

and others

: Sysmex Corporation
: Subsidiaries

Sysmex Annual Report 2013

31

Functional Structure

Research and Development
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.

S

ysmex’s inimitable R&D activities began in 1963 whenfunctions and the key source of Company growth. Each year,

it became the first company in Japan to commercialize

we invest approximately 10% of net sales in R&D to keep ourhematology analyzers. Since then, the Company has worked
to improve diagnostic test quality at the microscopic leveltechnologies at the leading edge.
Sysmex has extended its business domains beyondof blood cells by establishing core technologies for particle

hematology to cover such laboratory test fields as hemostasis,

measurement or bioassays and developing a range of

immunochemistry, clinical chemistry, urinalysis and others.

“industry-first” laboratory test technologies.

We are now working to broaden our R&D activities even

Sysmex is leveraging the abundant expertise it has culti-

further to create new diagnostic technologies for diseasevated in the development of products to bring efficiency tomanagement including hematology, immune diseases, infec-

the increasingly complicated diagnostic testing environment.

tious diseases, cancer and diabetes.

Another goal is to contribute to the increased efficiency and

In 2008, we completed construction on Technopark, ourlower costs not only in the testing laboratory, but also bycore R&D facility, designed to foster synergy by accelerating

leveraging networks throughout the entire hospital for cus-

the sharing of information and expertise, as well as collabora-

tomers ranging from small clinics to large medical institutions.

tion. This integration of the different technologies employed in

Sysmex considers R&D to be one of its most important

our instruments, reagents and software, coupled with joint R&D
initiatives, enables us to constantly incorporate customer feedback into our product offerings. This congregation of researchers and engineers in a host of fields—electrical, mechanical,
biological, chemical and IT, among others—encourages
interaction and drives the creative fusion that generates newtechnologies. Sysmex is also working toward the establishmentof a global R&D structure. Centered at Technopark in Japan, ourstructure is linked with other facilities in Japan and overseas,
including the R&D Center Europe, Sysmex New Zealand andManagement 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.

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.

the Diagnostic Reagent Development Center in China. We arealso stepping up collaboration with outside research institu-

New Management Systemtions to promote innovative technological developments that

Business Strategy Division(Formulates and promotes strategies across fields, and searches for and develops businesses, etc.)

will create new market opportunities.
Furthermore, in April 2012 we established the ICH Business
Unit to reinforce our base and promote growth in the key non-R&D Strategic Planning Division(Formulates technology strategy, prepares global R&D systems and manages intellectual property, etc.)

hematology fields of immunochemistry, clinical chemistry andEach business unit handles overall management processes involving
strategic planning, product development and market introduction

hemostasis. In April 2013, we also established the HU Business
Unit to oversee the fields of hematology and urinalysis, andthe LS Business Unit, to handle business in the life sciences

Technology
Development Division

field. Each business unit is a specialized organization that

（Elemental technology
development）

handles the overall management of its testing fields, including
strategic planning, product planning, product development,
reagent production and global product introductions. Throughthis approach, in each testing field we aim to bolster the levelof specialization, as well as to increase the speed of decision-

HU Business Unit

• Hematology • Urinalysis

ICH Business Unit

• Immunochemistry • Clinical Chemistry • Hemostasis

LS Business Unit
Research
Division（Searching forleading-edge technology）• Life Science

New Businesses, etc.

making and execution.

32

Sysmex Annual Report 2013

Sysmex Annual Report 2013

33

Functional Structure

Research and Development

Purchasing, Production and Logistics

g 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.

TechnoparkA

Based on the concept of the “Creation of ‘Knowledge’ and
Its Inheritance,” Technopark was established as the center of
R&D activities for the Sysmex Group in 2008, the 40th year of
establishment. In addition to having more than half of its area
dedicated to green space, laboratory and office space is locatedon the same floor, providing an optimal R&D environment.

consistent supply of top-quality diagnostic and medical-

Manufacturing Goes Digital, Reducing Work Timetreatment test products is essential to medical care

The Kakogawa Factory uses Smart Pro, a production support

support. Sysmex employs a proprietary, fully automatedsystem that Sysmex developed in-house, to support factory

system that covers all procurement operations, giving theassociates, manage processes and assist quality manage-Company a real-time grasp of raw material and component

ment. We began using 3D CAD design data created at theorder, delivery, and receipt and inspection status. This systemdevelopment stage to make work processes more visual,

allows Sysmex to standardize at the R&D stage the selection

helping to shorten the time employees require to commit

of suppliers that can ensure stable delivery of appropriate raw

these processes to memory and contributing greatly to their

BMA Laboratory

R&D Center Europematerials and components, thereby achieving swifter R&D and

The BMA Laboratory is located within the Business Support
Center for Biomedical Research Activities (BMA), a corefacility in the Kobe Medical Industry
Development Project. In January 2012,
we began offering a laboratory testing
service for research involving the riskof recurrence of early-stage breast
cancer, employing a new technology(C2P: Cell Cycle Profiling).

The R&D Center Europe was opened in 2006 in Germany as
the Company’s first overseas research facility. Sysmex is taking
advantage of this European location tocooperate with research and medical
treatment institutions in the development of new testing technologies
targeting diseases and other problems
that are uncommon in Japan.

ability to absorb multiple skills. Monitors located alongside

better cost-competitiveness. We also aim to quickly launch

workbenches depict assembly and other processes in 3D,

new products into mass production, transforming the engi-

with an audio explanation accompanying each process.

neering chain, including raw materials purchasing and throughThis arrangement makes work processes easier for new

concurrent engineering.

associates to understand, and helps to maintain quality andSysmex CNA
Sysmex CNA is the specialist IT company within the Sysmex
Group. Sysmex CNA specializes in medical information
systems over a broad range of fields
and has built up a strong reputation
domestically in the clinical laboratory
test field.

Protein Development Center
Our Protein Development Center employs technology for
producing proteins using silkworms to develop ingredients fordiagnostic reagents. The center also
carries out research and developmentwith the aim of improving the qualityof proteins and leading to their stableproduction.

boost productivity.

Instruments Offering High “Made in Japan” Quality

We also use our information technologies to configure

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 all our instruments at

cantly on time to shipment.

the Kakogawa Factory. We produce internally those parts thatuse proprietary technologies or for which stable sourcing is
problematic. This reduces the risk of technology outflows andlessens procurement risk, while allowing us to maintain stable
quality. For other parts, however, we maintain cooperative
relationships with parts makers who can meet our stringent
quality requirements, thereby ensuring a stable supply. “Madein Japan” and the Sysmex brand have become bywords for
quality, and our products are recognized worldwide for

Sysmex New ZealandSysmex 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.

Diagnostic Reagent Development Center in China
In December 2009, Sysmex opened the Diagnostic Reagent
Center in China. Located within Sysmex Wuxi Co., Ltd., thiscenter prepares for our entry in the immunochemistry field in
China, which is enjoying one of the highest rates of economic
growth in Asia.
We employ this new development
center to expedite the developmentof reagents that meet the specificdemands of this growing market. Our
first initiative is the development of
immunochemistry reagents.

their reliability.
Furthermore, as around 80% of the Kakogawa Factory’s
products are shipped overseas, we have structures inplace to ensure that we meet the regulations of each
destination country.
We are significantly boosting our manufacturing capacity
to meet growing global demand for instruments. To this end,
we plan to commence operations at a new instrument factoryin the city of Kakogawa in May 2014. While we will continue
production at our current instrument factory, the new facility
will be positioned as the core instrument factory for theSysmex Group, reinforcing our capacity substantially.

34

Sysmex Annual Report 2013

Sysmex Annual Report 201335

Functional Structure

Purchasing, Production and Logistics
Global Reagent Manufacturing to Ensure Stable
Product Supplies

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

Kakogawa Factory (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 theIn April 2012, we began operating a new automated produc-quality assurance systems that are in place at our Ono and

The Kakogawa Factory is a production base for diagnostic
instruments that uses quality control systems to produce highly
reliable instruments based on international and industrywide
quality control standards, and the laws and regulations ofdestination countries. The plant provides the capacity to supply

tion line at the plant that makes reagent packages (paper

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

containers and reagent cartridges), including the concentrated

efficient production system on a global basis.

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

reagent used in our new 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
For instrument and reagent manufacturing, Sysmex promotes
upstream purchasing and is strengthening the Company’s
unified development and production structure to enable
early-stage mass production. Sysmex Trade Mission (STM), an
electronic purchasing system that automates complex ordering activities, helps reduce procurement costs and strengthengroupwide production management.
For the logistics function that is responsible for deliveringg Purchasing Production and Logistics Facilities

Instrument Productionsome 500 products to markets
around the 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 April 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 production ofreagents and draws on wide-ranging production technologies
to produce a line of around 900 products ranging from clinicalchemistry to immunochemistry reagents, hemostasis reagentsand reagents for use as
quality control materials. The
factory has also constructed
a flexible production system
to meet requirements forhighly diverse, low-volume
manufacturing.

final products to customers, Sysmex is improving its global
supply chain management (SCM) system by reorganizing
domestic logistics locations and reconfiguring supply flow
overseas. In the United States, the Company reorganized
its reagent supply system, creating a logistics system that

Europethe Company established a European parts center andSysmex 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 Neumünster, Germany, in
1993. To meet rising European
demand for regents, we doubled
the plant’s capacity in 2007.

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 May 2012 increased its production capacity to fivetimes its level in 2010. The
Wuxi Factory was the first
operated by a non-Chinesecompany to receive local
pharmaceutical manufacturing
approval.

In the Asia Pacific region, which is slated for future growth,
we opened the Singapore Factory in 1998. In 2007, we also set
up a reagent factory in India to meet fast-growing demand inthat market. This combination
allows us to provide a stablesupply of high-quality reagentsbroadly throughout the Asia
Pacific region.

IT-based logistics management system to allow the groupwide
sharing of inventory and order information.

Japan’s Manufacturing Prowess
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 new 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.

Sysmex Annual Report 2013

the United States, Brazil, China, Singapore and India.

Americastenance services. In the future, the Company will reinforce its

36

In order to ensure a timely and stable supply of reagents throughout the global market, Sysmex operates reagent factories in Germany,

encourages direct communications with customers. In Europe,
reworked its system for supplying the parts needed for main-

O

Overseas Reagent Production Facilities

Sysmex Annual Report 2013

37

Functional Structure

Sales and After-Sales Support
Sysmex does more than just sell products; we provide maintenance and other support services,
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.

W

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.

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

reputation. The Company has launched the SNCS in Japan,

In September 2012, we relocated Sysmex America, Inc.,hen testing is interrupted, whatever the reason,technologist can conduct testing efficiently we do not merely

making skills and highly specialized support services we haveour regional headquarters for the Americas, in order tophysicians 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

expand its operations. The expansion includes a new multi-

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 of

purpose building that houses the company’s virtual training

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

individual markets.

studio. The virtual training initiative provides customers withcustomers 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

Sysmex products to better meet the needs of North American

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 andcustomers, who are spread over an extensive area.

for instrument performance, as well as for overall service

proposals to customers in developed countries. In contrast,

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

performance.

in emerging markets where healthcare demand is risinglished a rapid support system by stepping up cooperation

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

between the Customer Support Center and Sysmex offices

ing more sophisticated, and treatment regiments are changing

high-quality products without defects, products that have suchand 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

Instead of simply aiming to reduce the time from the start

convenient, on line, instructor-led education on the use of

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

Customer Assessment in the United States (by IMV ServiceTrak™)

Virtual training studio

Customers• Survey of Customer Satisfaction
A survey of customer satisfaction published in 2013 has shown that Sysmex is ranked No. 1 in the United States for instrument
performance meeting expectations.

Sales Strategies

S

Instrument Performance Meets Customer 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.
2000–2012: 1=Very Poor 2=Poor 3=Fair 4=Good 5=Very Good 6=Excellent
2013:
1-3=Very Poor 4-6=Poor/Fair 7-8= Good 9= Very Good 10=Excellent

Sysmex Rated Highest for the Past 14 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

8.95
8.45

2013

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
63.3%
Latin America andIndirect sales
36.7%
33.3%
Russia, among other(As of March 31, 2013)
Europe1.3%
regions, we have
98.7%
Americasalliances in place totake advantage of
China
66.7%
Japan
the sales networks
operated by leading
100.0%
global pharmaceutical
37.1%
manufacturers.
Net Sales
38.2%
Asia
¥ 145,578
Pacific
61.8%
million
62.9%

Founded 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.

38

Sysmex Annual Report 2013

Sysmex Annual Report 201339

Corporate Governance
Sales and After-Sales Support
Sponsoring Scientific Seminars for
Advancement of Healthcare

was attended by approximately 1,000 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 Europe

certification, as well as our experience as a manufacturer

and 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
to provide physicians and laboratory technologists withinformation on the latest trends in hematology. The Company

Seizing Opportunities
to Reinforce Stakeholder
Faith in Our Company

began conducting annual seminars in Japan in 1978 andexpanded this program to China in 1998. In 2012, we held theSysmex 15th Scientific Seminar in China in Shanghai, 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.
n

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
SysmexHospital

Networkn

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 SupportnPreventive 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.

nFailure Prediction Function
Linking the failure prediction function with field support enables
us to remotely monitor the status of the analyzer componentsof each instrument. This allows us to predict failure times andprovide maintenance before it occurs.

40

Sysmex Annual Report 2013

3. Preventive
MaintenanceChecks4. Failure
Prediction
Function

Note: Such services may not be available on some products and incertain regions.

Sysmex considers reinforcing corporate governance one of its most important management topics. We aim to maximize the overall corporate value of
the Group through management robustness, better transparency and improved
management speed and efficiency.

Sysmex Annual Report 201341

Corporate GovernanceCorporate Philosophy and Core Behaviors
Our 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.

Corporate GovernanceManagement Organization

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 seven 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 17 executive officers (five of whom areManaging Board. The corporate auditors also maintain close

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

communications with the Internal Audit Office, exchanging

adopted the executive officer system to increase the speed

information and opinions as necessary, and confirm and evalu-

of decision making in the conduct of business and respondate the appropriateness of business execution. The Board ofquickly to changes in the business environment. In addition,

Auditors will continue to enhance management soundness

by appointing outside members of the Managing Board, weby engaging in appropriate supervision of the execution ofhave reinforced the Managing Board supervisory function,business as stipulated by law. The Board of Auditors works

and we have strengthened the auditor supervisory function byclosely with the accounting auditors on the audit plans reportappointing external auditors.

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

ment direction and important strategic issues.

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

Internal Control Systems

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-

month, in principle, serving as a consultative body to theand actions that consistently reflect the viewpoint of ourment policies, while promoting information disclosure andchairman 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 ofIncorporation

customers.

close communications.

cerning the Group’s business.

Sysmex defines compliance as “the conduct of open and

We constantly look out for our customers’ true needs, andWe commit ourselves to a consistent yet innovative style

The Group Management Reporting Committee consists

aboveboard business activities on the basis of observance of

seek to generate new solutions to satisfy those needs.

of 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.

affiliated companies and division managers. The committee

The Company is promoting and enhancing GroupTo Our Employees

The Steering Committee consists of the chairman and
CEO and executive officers. The committee meets once a

We 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 ethicalWe value the spirit of independence and challenge, provide

The Operating Committee consists of managers of divi-and counter risk. The Company implements and strengthens

standards.

sions. The Committee meets once a month to find solutions

compliance in the corporate group under the control of aemployees with opportunities for self-fulfillment andAs a responsible member of society, we play an active roleto cross-functional problems.

compliance officer and compliance committee. The Company

growth, and reward them for their accomplishments.

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

To Our Business Partners
We deliver commitment to our client companies throughbroad-ranging partnerships.
We strive to be a company that can grow in step with ourtrade partners, through respect and mutual trust.

42

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

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

Sysmex Annual Report 2013

In the fiscal year ended March 31, 2013, the Managing

rigorously ensures compliance through education and training

Board met 13 times, the Global Strategic Committee 14 times,

for members of the Managing Board and employees, promotes

the Steering Committee 18 times, the Group Management

the rapid detection and correction of violations of the law orReporting Committee four times and the Operating

the Articles of Incorporation by means of an internal compli-

Committee 12 times to address matters relating to manage-

ance related reporting system, and conducts audits of thement strategy and important issues facing the Group.

compliance structure by means of the Internal Audit Office.

Sysmex Annual Report 201343

Corporate GovernanceCorporate Governance
Systems for the Retention and Management ofInformation Relating to the Execution of Duties by
Members of the Managing Board

Company respects the autonomy of the management of

The Company appropriately retains and manages informa-

activities throughout the corporate group by such means astion relating to the execution of duties by members of theperiodic reporting on the details of the business of subsidiar-Managing Board in accordance with document management

ies and advance discussion concerning important matters.

With regard to the management of subsidiaries, theMembers of the Managing Board

subsidiaries and ensures the appropriateness of businessregulations and maintain the information in a state available
for inspection as necessary.

Assignment and Independence of Employees toAssist Corporate Auditors

Regulations Concerning the Management of Risk andOther Systems

Although the Company does not assign full-time staff to

To maintain a structure concerning risk management, theemployees of the Internal Audit Office cooperate with theentire Group complies with risk management regulations

corporate auditors to conduct efficient audits at importantestablished by the Risk Management Committee for theplaces of business.

assist corporate auditors in the performance of their duties,

integrated management of risk throughout the Company. The

At the request of the corporate auditors, the Company

Company endeavors to discover foreseeable risks, select theprovides full-time staff to assist the Board of Auditors. In such

most important of these risks, clarify the sections responsible

case, the members of the Managing Board discuss with thefor coping with risks, establish countermeasures and engage

corporate auditors in advance matters such as the transfer ofin measures to mitigate risks.

such support staff.

Systems to Ensure That Members of the Managing
Board Execute Their Duties Efficiently
The Company has positioned the Managing Board as the

Systems for Reporting to the Corporate Auditors andSystems for Ensuring Effective and Efficient Auditingby the Corporate Auditors

institution to make important management decisions andIf a member of the Managing Board discovers a violation ofsupervise the execution of the Company’s business affairs.

the law or the Articles of Incorporation or a material fact that

The Company has introduced the executive officer system toposes risk of causing significant damage to the Company, thebe capable of making swifter operating decisions and respondmember of the Managing Board is responsible for promptly

quickly to changes in the business environment.

reporting that fact to the Board of Auditors.

With 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 asaccordance with the organization regulations, scope ofapproval requests, and request explanations from members ofauthority regulations, and approval procedure. The Company

the Managing Board and employees as necessary.

establishes mid-term plans and annual management plans,periodically confirms the progress made with those plans, andtakes any necessary measures.

Basic Policy on and Status of Systems for Excluding
Antisocial Forces
Sysmex has in place a Compliance Code that applies to all

44

Systems to Ensure the Appropriateness of Business
Activities in the Corporate Group

executives and associates throughout the Sysmex Group. We

The Company ensures compliance in accordance with

we take a firm stand to thoroughly counter any such forces.

the compliance code applied to all the members of the

Our education and training programs for executives andmaintain absolutely no relationships with antisocial forces, andManaging Board and employees of companies in theassociates provide a thorough grounding on the exclusion

Group. In conformance with regulations established withof antisocial forces. We have an internal reporting system inrespect to risk management, the Company maintains

place to respond quickly and appropriately to any overtures.

groupwide risk management systems based on those

Furthermore, we maintain close relations with specialized

regulations. The Internal Audit Office conducts groupwide

external institutions to gather information about the activities

internal audits.

of antisocial forces.

Sysmex Annual Report 2013

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

Hisashi Ietsugu

Koji Tamura

Chairman and CEO

Member of the Managing Board and Senior Executive Officer
Managing Director
LS Business Unit
New Business Development

Masayoshi Hayashi
Member of the Managing Board and Senior Executive Officer
Senior Managing Director

Kazuya Obe
Yukio Nakajima
Member of the Managing Board and Senior Executive Officer
Senior Managing Director
Corporate Business Planning
Corporate Business Administration
Human Resources & General Affairs
Corporate Executive OfficeMember of the Managing Board and Senior Executive Officer
Managing Director
International Business Management

Mitsuru Watanabe
Member of the Managing Board and Senior Executive Officer
Managing Director
HU Business Unit

Susumu Nishiura
Member of the Managing Board (Outside)(As of June 21, 2013)

Sysmex Annual Report 201345

Corporate GovernanceCorporate GovernanceCorporate Auditors

to eliminate any concerns held by the staff member seeking

divisions responsible for disseminating this information exter-

the chairman and CEO, following deliberation by the Steering

advice, for example by providing contacts with male or female

nally. Information on Company decisions and earnings reports

Committee, before being promptly disclosed publicly.

managers or external legal consultants.

is disseminated quickly after deliberation by the Steering

Sysmex will reinforce its risk and quality management

For product exports, Sysmex has established a Security

Committee or following decisions by the Managing Board orprocedures to ensure the ongoing trust of a wide range

Export Control Committee to ensure the Company’s technolo-

the chairman and CEO. Any issues that arise are reported toof stakeholders.

gies and products are not used illegally overseas. The committee conducts ongoing and in-depth investigations to confirm
export destinations or product usage. In 2008, the Kobe

Executive Officers

Customs Office approved Sysmex as a Designated Exporter
under the Designated Export Declaration System.
This system is designed to speed up administrative
procedures for products distribution in line with tighter
security procedures and greater international distributionof products. Only exporters with an excellent compliancerecord are approved as Designated Exporters. Sysmex markets
its products around the world and now aims to improve its
service by using the Designated Export Declaration System to
Front row, from left: Katsuo Uhara, Masami Kitagawa
Back row, from left: Hiromu Fujioka, Kuniaki Maenaka

achieve greater administrative efficiency in export procedures.

Katsuo Uhara
Masami Kitagawa
Hiromu Fujioka
Kuniaki Maenaka

Standing Corporate Auditor

is for every Sysmex employee to be aware of compliance as anStanding Corporate Auditor

ongoing factor and to be able to apply this understanding in

Corporate Auditor (Outside)

their work. Sysmex will continue to ensure thorough compli-

Corporate Auditor (Outside)(As of June 21, 2013)

The ultimate goal in the Company’s pursuit of complianceance to remain a Company that stakeholders consider highly
trustworthy.

Compliance

Risk Management

Sysmex has established a compliance code to be observed by

Sysmex has raised the bar on risk management by promoting

all executives and employees of the Sysmex Group in Japanthese activities from a divisional level to a companywide

and overseas. The Company’s view of compliance is definedrisk management system. In 2007, the Company established

as “the conduct of open and aboveboard business activities

a Risk Management Committee to steadily address riskon the basis of observance of laws and regulations and highresponses, prioritized according to importance.

ethical standards.” Various training activities are underway,

In terms of quality, Sysmex is working to improve internal

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

Michiaki Ishida

Iwane Matsui

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

including groupwide programs on the introduction of the com-quality assurance levels and to further improve its quality

pliance code, to ensure that all employees have a thoroughmanagement system (QMS). Moving toward the establishment

understanding of the code. The Company has also appointed

of a groupwide QMS, Sysmex is pursuing ISO certification

Kaoru Asano

Compliance Training Managers in each Group company.

centered on the Quality Assurance Department. The Company

Senior Executive Officer
R&D Strategic PlanningCentral Research Laboratories
Technology Development

In 2007, Sysmex looked to combine its compliance andhas introduced quality training to promote an understand-risk-management systems and began managing complianceing of QMS, build individual employee awareness of these

activities on a groupwide basis under the direction of asystems and ultimately raise quality control levels. Internal

newly established Risk Management Officer. The Groupquality audits, which are conducted by a committee of internal

Compliance Sub-Committee meets periodically to confirm

product quality auditors selected by each department, provide

the implementation status of the Compliance Promotion Plan

periodic checks on the operational status of the QMS.

and deliberate the overall direction of the Group’s compliance

We disclose information in accordance with the timely

activities. To promote and supervise compliance activities,

disclosure regulations that stock exchanges have established

Sysmex has established “Campanula Lines” as points of con-for this purpose. Managerial divisions create documents ontact for all Group employees in Japan for advice or questions

decisions that have been made, issues that have arisen, andon any compliance issues. The Campanula Lines are designed

earnings reports, as well as liaising with the communications

Ikuo Otani
Executive Officer
Executive Vice President of Human Resources & General Affairs

Yukitoshi Kamao
Kenji Tachibana
Senior Executive Officer
Business Strategy Development

Executive Officer
Executive Vice President of Corporate Business Administration

Hiroshi Kanda
Junzo Yamamoto
Executive Officer
Instrument Production
SCM

Executive Officer
Executive Vice President of ICH Business Unit Hemostasis ProductEngineering

Hiroshi Nagao
Yukio Hamaguchi
Executive Officer

Executive Officer
Executive Vice President of SCM(As of June 21, 2013)

46

Sysmex Annual Report 2013

Sysmex Annual Report 201347

Sysmex Value
Corporate GovernanceOperating Risks

Seizing Opportunities to
Respond toSociety’s Needs

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

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

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

69.1% in the fiscal year ended March 31, 2011, to 70.5% in the

product information from Japanese and overseas markets,

fiscal year ended March 31, 2012, and 72.4% in the fiscal year

as well as from within the Company; collates technicalended March 31, 2013.

information that may improve design quality; and implements

As of its May 2013 announcement, the Company assumes

rigorous quality checks at the start of mass production andforex rates of US$1 = ¥95 and €1 = ¥125.

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 and

For these reasons, Sysmex hedges this risk by sourcing
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-

Sysmex Valuedemands for greater efficiency in hospital management, moreing procedures, such as transmitting information, supporting* The Japanese medical fee system is amended every other year. In 2012,

core businesses and completing approval documents via thefees remained essentially flat, with overall fees increasing at a rate of
0.004%, having a negligible impact on earnings compared to the previous
year. 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 systemshould not have a direct effect on Company earnings.

Company’s internal network.
The Company has therefore introduced countermeasures
to minimize the potential operational impacts of network or
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.

48

Sysmex Annual Report 2013

F

ounded in Kobe more than 40 years ago, Sysmex is now undergoing a transformation. The Company is moving its operations to a new stage, in orderto fulfill its social responsibilities and contribute to a comfortable and healthysociety, thereby enhancing its corporate value.

Sysmex Annual Report 201349

Sysmex Value

Brand Equity
The 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.

Intellectual Property Activities

based on patent performance. This system is designed tocontribute to the Group’s business and enhance incentives

Sysmex seeks to boost brand equity through carefulattention to its trademarks, patents and other intellectual property rights.

for inventors.

In line with its expanding business domains and global devel-

striving to ensure worldwide flexibility in R&D and operational

he Sysmex corporate logo expresses our deep commitment

opment, Sysmex has established basic principles to share with

development by also acquiring patent rights in the rapidly

to pioneering efforts as a frontrunner in healthcare as we

employees its fundamental thoughts on intellectual property

developing China and Asia Pacific regions.

continue to develop innovative testing and diagnostic tech-activities and do its utmost to strengthen the Group throughTnologies to raise the level of human health and instill greater

Sysmex holds approximately 1,523 patents worldwide,
concentrated in Japan, the United States and Europe. We are

In recent years, counterfeit Sysmex reagents havebeen discovered in China, Indonesia, Malaysia and otherthese activities.

confidence. The shape reminds us of the infinity symbol, “∞,”In accordance with these basic principles, thecountries. As we cannot guarantee the diagnostic reliability

and illustrates the unlimited possibilities of Sysmex. The motif

Company’s liaises with R&D divisions, globally uncoversof these knock-offs, we have cautioned consumers by placing

evokes the evolution of life from the ocean to the land as welllatent intellectual property opportunities and surveys theadvertisements in local newspapers. We have also mounted

as the landscape of Kobe, the birthplace of Sysmex.

intellectual property rights of third parties. We also define

extensive efforts to elicit the cooperation of these countries’

Sysmex products and services are used by healthcare

clearly the basic policy on handling intellectual property

governments in addressing the problem.

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

meet 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. We also provide bonuses

global competitiveness.

Patent Applications

Patents Held, by Region



300

Japan



As a research-driven company, Sysmex is reinforcing
its intellectual property management and supporting theOverseas

Asia Pacific 2%

37

China 9%

250

131

200
150

423

100
50

2004 2005 2006 2007 2008 2009 2010
(Years ended March 31)

Sysmex Annual Report 2013

1,523

624

As of March 31, 2013

Europe 28%

050Japan 41%

2011

2012

2013

308
Americas 20%

Sysmex Annual Report 201351

Sysmex Value

Socially Responsible Activities
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.

W

Social Contributions

Sysmex officially registered as a member of the United
Nations Global Compact in 2011, thereby demonstrating ourSysmex is involved in healthcare, with its headquarters in Kobe but conducting operations and makingsocial contributions on a global scale.

increased emphasis on activities pertaining to corporate social

Sysmex contributes to the advancement of medical care andWorld Economic Forum in January 1999, and was officiallylaunched at UN Headquarters in New York in July 2000. By
joining the Global Compact, business and non-business enti-

e believe that our corporate responsibility involves

their successes. In line with these objectives, in 2011 we put insupports activities related to science, culture and the environ-delivering products that are consistent with theplace a new human resource system founded on management

ment in a manner befitting a global healthcare company.

responsibility (CSR). The Global Compact was first announced
by then Secretary-General Kofi Anan in an address to The

Sysmex brand and conducting business activities thatby objectives (MBO). In our companywide human resource

Since 1984, Sysmex has provided assistance for researchcontribute to a healthy and prosperous society. To this end,development program, initiatives emphasize employee skill

into electronic measuring technology through the Nakatani

Sysmex fosters a corporate culture where each employee

development through level-specific, globalization and otherFoundation for Advancement of Measuring Technologies intypes of training.

Biomedical Engineering. The foundation’s goal is to contributetable initiatives. For example, employees in the United Statesto the development of Japan’s economy and society and tovoluntarily take part in a fund-raising campaign organized byenvironment, Sysmex introduced flex-time systems to enableimprove the quality of life (QOL) of the Japanese people. The

the Leukemia & Lymphoma Society (LLS), a large-scale NPO.

employees to adjust their work hours for childcare and long-late Taro Nakatani, the Company’s founder and first president,

Their efforts to attract donors through unique event- andterm nursing care responsibilities. In this way, the Company isestablished the Nakatani Foundation using funds contributed

web-based efforts have contributed substantially to theworking to improve its systems in support of a better work-life

by himself, Sysmex and others. So far, the foundation hasorganization’s fund-raising efforts. In recognition of these

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

balance. In 2009, we opened Sysmex Kids’ Park, an internal

provided support for around 300 research projects.

efforts, in March 2013 our U.S. subsidiary was ranked for theSysmex believes that recruiting, retaining and developing

can feel a sense of fulfillment in their work and emphasizes
excellent communications with all stakeholders as it conducts
its corporate activities.

Developing Human Resources

human resources is among the most fundamental of manage-As part of its efforts to develop a positive working

childcare facility where parents can go about their work

Sysmex provides funds to the Kobe University School ofties commit to upholding 10 principles in the areas of humanrights, labor, the environment and anticorruption.
Sysmex is also a proactive participant in a variety of chari-fifth consecutive year on the Companies That Care Award,

assured that their children are being nurtured in an appropri-

Medicine for an endowed course in laboratory medicine.

which is sponsored by Companies That Care, a U.S. NPO. Thisate care-giving environment.

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

annual award honors companies with the characteristics ofment of diagnosis and medical care by developing evaluationa “company that cares,” including social contributions andmethods for new clinical testing in advanced medical fields.

sustaining a good work environment.

We have extended the scope of these activities to include

ment tasks. The Company strives to create an environment

overseas communities, as well, and in the fiscal year ended

that encourages individual employees to develop their

March 31, 2012, we were rated a company where it is “easy tostrengths. Currently, around 50% of Sysmex employees

work” by three organizations, scoring in the top 100 in suchare stationed at companies overseas. As it becomes morerankings in Japan, the United States and Germany. We will

global, the Company is attracting an even broader range ofcontinue with such efforts to create a comfortable working

people from different countries and cultures; in short, ourenvironment for our employees.

human resources are rapidly growing more diverse. Sysmex• Japan: 68th / NICES (Nikkei Inc.)

supports individual diversity and accordingly works to build•U nited States: 66th / Top 100 Best Places to Work in

an atmosphere that encourages autonomy and a spirit ofHealthcare (ASC Communications)challenge, as well as a system that rewards employees for• Germany: Top 100 ranking / Great Place to Work® InstituteRenovated Factory in Jinan, China, Friendly to Workers and the Environment
IVD demand is expanding in China, as the country continues to enhance its healthcare infrastructure. In response, we are renovating the Jinan
Factory, a reagent production facility, which will commence production in April 2012.
We are pursuing construction of the new factory in accordance with four CSR-oriented concepts: eco, human, high quality and flexibility.
In addition to pursuing quality and efficiency, the new factory is being built for expandability. To make the factory environmentally friendly, we
are installing energy-efficient equipment and striving to use limited resources effectively. We are also designing the workplace as a location where
employees can work comfortably and confidently, and the nature that surrounds the factory encourages employees to refresh their minds.

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)

System (respect diversity, rules)

GlobalManagement

Understanding

Transparency

Autonomy

Teamwork

Equal opportunity

Training

Eco:

Providing anenvironmentallyfriendly factory

The Four Concepts of
the Renovation
High Quality:

Foster a positive corporate climate, create original value and oﬀer trust and confidence to stakeholders
Oﬀer job satisfaction and ideal working conditions

52

Sysmex Annual Report 2013

Ensure support from diverse stakeholders

Human:

Boosting employee
productivity andmotivation

Manufacturing productsthat customers can use
with confidence andsatisfaction

Cafeteria illuminated withnatural sunlight

Solar-powered lighting

Flexibility:

Responding to rapidly
growing demandin the China market

Workplace environment
featuring refreshingbiotope and strolling paths

Sysmex Annual Report 201353

Sysmex Value

Socially Responsible Activities
Environmental Conservation

Investor Relations Activities

these results, Sysmex will continue moving forward with

Our activities aim to fulfill social responsibilities,
becoming an “environmentally advanced company” inthe healthcare sector.

the world on the basis of corporate value characteristics

its efforts to enhance corporate value through corporate

Sysmex considers its social responsibility toward environ-including environmental, social and corporate governancecontribution activities.

mental conservation a management priority. In our efforts toachieve harmony with the global environment, we work to

Track & Field Team, welcoming Athens Olympic Games gold

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 promote amanagement style that is both steady and innovative.

reduce the environmental impact of each stage of our opera-

medalist Mizuki Noguchi. The team supports the training ofSysmex recognizes investor relations as an important facet oftions—from product design, development, procurement andPacific Index of the Dow Jones Sustainability Indexes

young athletes who aim to become world-class competitors.

corporate management and is active in its investor relations

production to sales, support and product usage.

(DJSI), a leading global index of socially responsible

Sysmex was a special sponsor of the Second Kobe Marathon,efforts, in line with its investor relations policy. The investor

investment. DJSI is an index developed through collabora-which took place in November 2012, again attracting aroundin 2009 with the aim of prioritizing initiatives to reducetion between Dow Jones Indexes of the United States

20,000 entrants. In addition to providing the runners’ bibs,

planning division, which reports directly to the chairman

its environmental impact in various phases of the productand Sustainable Asset Management, a Swiss research

we exhibited at a booth in the Kobe Marathon EXPO, which

and CEO. The department is charged with disclosing

lifecycle: product design, production, sales, usage and end-

specialist in the area of socially responsible investment.

was held to coincide with the marathon. Sysmex employees

appropriate information in a timely manner, communicatingof-life disposal.

The index evaluates companies from three perspectives:

volunteered their time to support these activities in a number

directly with shareholders and other investors, and promptly

the economy, the environment and society. Companies

of ways. A portion of the proceeds from this event were

further, in 2010 Sysmex established long-term environmental

evaluated as having superior sustainability are selected for

donated to assist victims of the Great East Japan Earthquake

objectives to be achieved by fiscal 2020, under the themes ofinclusion in the index.

and spur recovery in the affected region.

One focus of the Company’s communications with

global warming countermeasures, effective use of resources

shareholders and other investors is to explain a complex

and waste reduction, and effective use of water resources.

business in a straightforward manner. In addition to briefing

Sysmex was also selected as one of the 2012 Global

Members of the Asia Pacific Index include excellent

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

companies selected from among leading corporations in

based on joint research by Canadian publisher Corporate

the Asia Pacific region. In fiscal 2012, this index included

Knights, Bloomberg and other organizations. The Global

154 companies, 74 of which were Japanese. Encouraged by

100 are selected from among 3,500 companies aroundaspects. Sysmex ranked 77th overall and sixth in the HealthCare sector.
In 2012, Sysmex was selected for inclusion in the Asia

In 2005, the Company established the Sysmex Women’s

The Company reviewed its existing Environmental Policy

Ramping up its environmental conservation activities evenrelations department is located within the corporate businessproviding feedback to management regarding the Company’s
external assessment.

Sysmex also has acquired certification under the inter-

analysts and institutional investors about operating results, thenational ISO 14001 standard for environmental management

investor relations department provides technical briefings on

systems at principal business sites. In addition, we areareas such as the life sciences and hosts tours to research andformulating a groupwide system to promote environmental

manufacturing facilities. Overseas, the department holds inves-activities, including an annual environmental audit.

tor relations meetings, attends conferences held by securities

The year 2008 marked the grand opening ofTechnopark, our R&D facility that is designed to fit in withthe environment and the surrounding community. In addition to eco-friendly materials and an energy-saving design,
the greenery, lakes and other natural spaces that makeup more than half its surrounds add to its harmony withneighboring areas. Such environmental considerations haveearned Technopark the highest level for the environmental

Position of Sysmex IR Activities
Externally• Raise corporate value(which equals market
capitalization)

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

performance of buildings under a Japanese standard named
CASBEE, for the Comprehensive Assessment System for

Determine capital market
responses and requests

Built Environment Efficiency.
In a bid to reduce emissions and use resources effectively,
we have launched zero-emissions initiatives at our factories.
We also promote emissions separation and recovery andother recycling efforts. For its new product in the hematology field, the XN-Series, Sysmex has switched the packaging

Disseminate quality
information in atimely manneron some of its reagents from conventional polyethylene to

Swiftly reﬂect
management andIR activities

paper packaging, and introduced concentrated reagents.
These moves substantially reduce the changing frequency,
thereby reducing waste, making our products more environmentally considerate.

• Sustainable growth andproﬁtability improvements• Appropriate investment
for future growthInternally
A management innovation tool that works byfeeding back external evaluations and requests

Kobe Marathon 2012

54

Sysmex Annual Report 2013

Sysmex Annual Report 201355

Socially Responsible Activities
firms and seeks opportunities to foster an understanding ofSysmex’s annual report also earned awards for 2012 in

the Company’s strengths by providing individual explanations

two of the world’s largest annual report competitions—aat industry exhibitions or tours of local factories. For individualGold in the Health Care (Equipment & Supplies) segment ofinvestors and other shareholders, the department holds busi-

the Vision Awards (sponsored by the League of Americanness results briefings in Tokyo and Kobe, prepares shareholder

Communications Professionals LLC of the United States)

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

and a Bronze in the Healthcare Technology Category of thewith the aim of introducing the Company’s business in an

International ARC Awards (held by MerComm, Inc., of theeasily understandable way.

United States.

The Company earned the Japan Investor Relations

To raise the level of the Company’s investor relations

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

activities further, in addition to proactive external information

2011, following an award for fiscal 2006. In the 2012 Awards

disclosure Sysmex will concentrate on responding to feedback

for Excellence in Corporate Disclosure, sponsored by theto ensure the results of its investor relations activities are

Securities Analysts Association of Japan, Sysmex was selectedreflected in its capital policies and management.

for excellence in disclosure to individual investors. We were
given high marks for our chairman and CEO’s explanations in
his own words to individual investors at the Company’s briefing meetings, and the clear and simple explanations of ourfields of business and their distinctiveness, as well as of theCompany’s strengths. We were rated highly for arranging ourmaterials in a manner that encourages understanding of theCompany, as well as video distribution via our website. Other
positive comments included the simple and elegant structureof the “Investor Relations” section of our site, and the use ofvideo to introduce our R&D and manufacturing bases in the“Sysmex Virtual Tour” corner. We also received very positive
feedback on our shareholder newsletter, which was judged
easy to read and extensive in its content.

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

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 and other 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 and promptly, to help shareholders and otherinvestors 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 this period, theCompany will refrain from replying to questions or commenting on earnings projections. However, in the event that results are expected to deviatesignificantly from the projections during the quiet period, the Company will release appropriate information.

56

Sysmex Annual Report 2013

Financial Section

Contents
11-Year Consolidated Financial Data.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 58
Management’s Discussion and Analysis .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 60
Consolidated Balance Sheet.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 66
Consolidated Statement of Income .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 68
Consolidated Statement of Comprehensive Income.  .  .  .  .  .  .  .  . 68
Consolidated Statement of Changes in Equity .  .  .  .  .  .  .  .  .  .  .  .  .  . 69
Consolidated Statement of Cash Flows. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 70
Notes to Consolidated Financial Statements. .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 71
Independent Auditor’s Report .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 83

Sysmex Annual Report 201357

11-Year Consolidated Financial Data

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

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2013

¥ 57,253¥ 65,970¥ 76,935¥ 87,888¥ 101,041¥ 110,724¥ 111,843¥ 116,206¥ 124,694¥ 134,744¥ 145,578$ 1,548,702

Operating income

5,299

6,615

9,104

10,724

12,71515,033

15,134

15,74018,28919,20621,805

231,968

Net income

3,125

3,157

5,731

7,423

9,008

9,132

8,014

9,765

11,412

12,007

14,166

150,702

Net increase (decrease) in cash and cash equivalents

1,071

3,465

(3,261)

(499)

3,299

(3,044)

(269)

4,403

5,103

2,922

12,469132,649

Cash and cash equivalents, end of year

10,253

13,71810,4589,416

12,715

9,679

9,410

13,813

18,916

21,83834,307364,968

Capital expenditure

2,317

2,451

2,729

5,638

4,546

8,244

9,340

4,540

5,840

7,909

8,945

95,160Depreciation

3,107

3,203

3,296

3,592

3,959

3,924

7,189

7,067

6,871

7,031

7,945

84,522R&D expenditure

4,969

5,549

6,509

8,184

9,026

9,221

10,771

11,23812,38011,904

12,119128,926

Net cash provided by (used in) operating activities

5,603

9,302

6,692

8,275

10,085

11,635

13,194

21,23018,135

17,05925,806

274,531

Net cash provided by (used in) investing activities(2,260)(3,212)(5,631)(7,859)(6,630)(12,883)(13,545)(6,603)(8,916)(10,372)(12,524)(133,234)

Net cash provided by (used in) financing activities(2,034)(2,428)(4,377)(1,191)(458)(1,316)723(10,091)(3,475)(3,814)(3,117)(33,160)

Total assets

66,44971,983

77,66087,447

101,225

109,027

118,522

120,702130,060

142,285

173,011

1,840,543

Shareholders’ equity

43,32551,09656,14962,647

71,34478,75379,18386,35893,534

101,834

118,801

1,263,840

Interest-bearing liabilities

10,893

4,175

657

695

669

1,081

10,344

2,565

1,971

1,026

769

8,181

(Yen)

(U.S. dollars)

For the years ended March 31,

For the year:
Net sales

At year-end:

Per share data:
Shareholders’ equity (yen)¥ 1,879.5¥ 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$ 12.25

Net income (basic) (yen)

132.2

132.9

225.1

145.5*2

179.6

178.9

156.7

190.8

111.2*2

116.9

137.6

1.46

Net income (diluted) (yen)

121.8

123.1

224.0

143.8*2

178.0

178.3

156.5

190.5

111.0*2

116.6

137.1

1.46

Cash dividends applicable to the year (yen)

25.0

30.0

40.0

36.0*

36.0

48.0

50.0

56.0

60.0

34.0*

40.0

0.43

Dividend ratio (%)

18.9

22.6

17.8

17.9

20.0

26.8

31.9

29.4

27.0

29.1

29.1

Shareholders’ equity ratio (%)

65.2

71.0

72.3

71.6

70.5

72.2

66.8

71.5

71.9

71.6

68.7

Return on equity (ROE) (%)

7.9

6.7

10.7

12.5

13.4

12.2

10.1

11.8

12.7

12.3

12.8

Return on assets (ROA)*3 (%)

4.7

4.6

7.7

9.0

9.5

8.7

7.0

8.2

9.1

8.8

9.0

Price-earnings ratio (PER) (times)

15.9

20.3

27.2

35.3

23.8

20.1

20.0

28.7

26.5

28.6

42.1

Price-book value ratio (PBR) (times)

1.1

1.3

2.7

4.1

3.0

2.3

2.0

3.3

3.2

3.4

5.0

2,639

2,907

3,115

3,334

3,580

3,916

4,148

4,587

4,960

5,324

5,594

2

2

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 ¥94 = US$1, the approximate rate of exchange on March 31, 2013.
*2.	Two-for-one stock split*3.	 ROA = Net Income/Total Assets (Yearly Average)×100

58

Sysmex Annual Report 2013

Sysmex Annual Report 201359

Management’s Discussion and Analysis

Financial Policy

Rating & Investment Information, Inc. (R&I), and reviews

On the healthcare front, in April 2012 the Japanesethe 71.6% recorded as of March 31, 2012. Total asset turnover

Sysmex regards increasing its market capitalization to maxi-

and renews this rating each year. Having a high rating

government introduced its revisions to medical compensation

decreased from 0.99 time to 0.92 time. On the other hand,mize corporate value as an important management objective

reduces the cost of raising funds in the capital markets

under the national healthcare system, indicating its basic

return on equity (ROE) advanced from 12.3% in the preceding

and pays careful attention to stable cash flow generation. We

and helps build trust among our shareholders and with thepolicy on future structural reforms related to healthcare andyear to 12.8% during the fiscal year under review.

consider it important to share this goal with all stakeholders,world at large. To enhance its rating in upcoming years,

nursing care, but only slight revisions were made in the IVD

including shareholders, customers, business partners, local

Sysmex will construct a flexible and more robust financial

field. In advanced countries in Europe and the United States,

Net Sales by Destination*communities and employees, while sustaining medium- tobase, paying attention to expanding business scale while

efforts are underway to reduce healthcare costs and reform

Looking at net sales by destination, in Japan management

long-term growth. To that end, Sysmex has in place measuresconsidering the balance between sales and income, andmedical systems, and fiscal austerity measures in countries

improvements accompanying healthcare reforms resulted in

to communicate with stakeholders on the Company’s current

assets, liabilities and equity. Specifically, the Company

such as Spain and Italy are causing healthcare spending tosteady capital investment by large-scale medical institutions.

situation and the direction it should pursue. These measures

regards net sales, operating income, operating margin,

decline in those countries. In the United States, efforts toThis situation and our ongoing efforts to promote solutions

include enhancing timely disclosure, the website, shareholder

return on equity (ROE) and free cash flow (FCF) as impor-reduce the number of people without medical insurance

led to solid sales, as well as strong performance in terms ofnewsletters, financial data, periodic briefings on businesstant management indicators and aims to maintain a balancebegan in earnest. In China, medical system reform that isreceiving major orders. As a result, centering on firm results

results, visits to institutional investors and briefings for

between scale and efficiency by ensuring the optimalunderway, including to the medical insurance system, aims toin our mainstay hematology field, we posted sales in Japan ofindividual investors.

combination of sales and income and of assets, liabilities

build infrastructures that provide uniform medical services in¥40,190 million, up 1.1% from the previous fiscal year.

and equity.

cities and farming villages throughout the country. Therefore,

In overseas markets, we made steady progress in thealthough some causes for uncertainty remain, the foundations

strengthening of sales and support structures and the provi-of healthcare-related demand remain solid.

sion of solutions. As a result, sales rose in most geographic

Sustaining medium- to long-term growth requires a levelof R&D expenditure sufficient to prevail in global competition. We must consistently create new technologies andOverview

products and stimulate the growth of our critical mass to

Looking back on the global economy in the fiscal year

In July 2012, we received clearance from the China Foodregions due to increased sales of instruments and reagents.

absorb increases in selling, general and administrative (SG&A)

ended March 31, 2013, although in Europe the protracted

and Drug Administration on the XN-Series, our top-end

expenses. In recent years, our sales growth in overseas

financial crisis caused consternation in financial markets

multiparameter automated hematology analyzer in thelion, up 10.9% year on year. The overseas sales ratio was 72.4%,

markets has been striking and succeeded in sustaining steadyand prompted financial austerity measures, overallmainstay hematology market, followed by clearance fromup 1.9 percentage points from the previous fiscal year.

growth. Sysmex is aggressively making forward-looking

advanced countries began showing signs of recovery.

the U.S. Food and Drug Administration in October 2012. In

Looking at overseas sales by destination, sales in theinvestments not only in the hematology segment, the current

Gradual economic deceleration became apparent in China,

December 2012, in Japan we launched our new model for theAmericas amounted to ¥30,765 million, up ¥2,158 million, or

key business domain, but also in non-hematology segments

which has underpinned solid growth in emerging markets.

immunochemistry testing field, the HISCL-5000—our fully

7.5% year on year; in Europe ¥39,587 million, up ¥2,217 million,

such as hemostasis, immunochemistry, urinalysis and clinicalHowever, emerging markets, centered on the BRICs

automated immunoassay analyzer.

or 5.9%; in China ¥24,430 million, up ¥5,131 million, or 26.6%;

chemistry and in new forms of medical testing in the life sci-countries, continued to demonstrate their overall growth

As a result, during the year net sales increased ¥10,834 mil-ence field.

potential through robust ongoing economic growth. Japanlion, or 8.0%, to ¥145,578 million; operating income grew ¥2,599

Sysmex pays attention not only to business scale, but

entered a recovery phase, owing partly to expectations

million, or 13.5%, to ¥21,805 million; and net income expanded

also to asset and capital efficiency and liability and capitaldriven by financial measures introduced after the new¥2,159 million, or 18.0%, to ¥14,166 million. The equity ratio assoundness. The Company holds an A+ issuer rating fromadministration took office.

of March 31, 2013, was 68.7%, down 2.9 percentage points from

Consequently, the Group’s overseas sales were ¥105,388 mil-and in Asia-Pacific ¥10,606 million, up ¥873 million, or 9.0%.
* 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

60

Sysmex Annual Report 2013

Shareholder newsletter

Financial data (English/Japanese)posted in the “IR Library” on the Sysmex
website(As of May 31, 2013)
Rating symbols and definitions:Rating A+; The credit quality is high. It is also
accompanied by some excellent factors.

Japan
Overseas
Americas
EuropeChina
Asia Pacific

7.3%
16.8%

Net sales

OVERSEAS

72.4%¥105,388 million

JAPAN

27.6%

¥145,578¥40,190 million

million

27.2%
21.1%
Net sales by destination is defined as the sales amount recorded by group companies tocustomers in a particular region. However, net sales by geographical region refers to the sales
amount made by a group company in a particular location.

Sysmex Annual Report 201361

Management’s Discussion and Analysis

Net Sales by Geographical Region

Profits and Losses

sales negatively, but full-fledged sales of the XN-Series

full-fledged launch of the XN-Series and enhanced our directJapancommenced in the fourth quarter and sales of reagents andsales and support activities. Sales also expanded in the Middle

Sales remained robust in the hematology testing field, oursupport services grew as a result of a higher base of installed

East, Africa and other emerging markets. This resulted in

In Japan, our ongoing efforts to promote solutions led tomain business domain, due to our perseverance in presenting

instruments, pushing up overall sales in this market. Sales

robust sales, centered in the hematology field, and the rise instrong performance in terms of receiving major orders. As

solutions to customers, which paid off in the form of analso rose in Central and South America, centered on Brazil.

sales was 6.5% year on year, to ¥39,436 million.

a result, sales were robust, centering on firm results in ourincrease in large orders. However, sales were down 1.6%

Consequently, overall sales in the Americas amounted toOperating income increased 7.8%, to ¥5,799 million, as thecompared with the preceding fiscal year, to ¥42,971 million.

¥29,703 million, up 10.6% from the preceding fiscal year.

increase in sales more than compensated for a rise in selling,

Such factors as a revision in intragroup transaction prices

Cost of sales rose, due to a revision in intragroup transac-

and higher export sales to Group companies prompted a 37.5%

tion prices, and selling, general and administrative expenses

year-on-year increase in operating income, to ¥11,939 million.

increased, stemming from efforts to reinforce our sales and support operations, and the relocation of our regional headquarters.

Americas

Consequently, operating income fell 25.9%, to ¥2,129 million.

In the United States, longer-than-expected clearance

Net Sales

mainstay hematology field.
In overseas markets, meanwhile, we made steady progress

general and administrative expenses incurred to expand busi-

in the strengthening of sales and support structures and theness in the region.

provision of solutions. Consequently, sales increased in mostChinageographic regions due to increased sales of instruments andreagents.

Despite the impact of sluggish sales in certain parts of the

Owing to these factors, during the year ended March 31,

market, sales in China surged 26.6%, to ¥24,425 million. Behindprocedures for the XN-Series and a temporary hesitation in

Europethese solid results were the commencement of sales of thecustomer purchases of instruments in response to uncertainty

Although affected to some extent by austerity measures

XN-Series and substantially higher sales of instruments andabout the direction of the healthcare reform law affected

stemming from the European debt crisis, we embarked on the

diagnostic reagents in the hematology and hemostasis fields.

2013, net sales increased ¥10,834 million, or 8.0%, to ¥145,578
million. The yen depreciated during the fiscal year, with theaverage exchange rate against the U.S. dollar falling ¥4.04,
from ¥79.07 to ¥83.11. This shift had a ¥1,253 million positive

Higher sales compensated for such factors as a rise in cost

impact on sales. The yen appreciated ¥1.81 against the euro,of sales resulting from a revision in intragroup transaction
Net Sales by Geographical Region
Japan
Americas
EuropeChina
Asia Pacific

Sales and Segment Profit
by Geographical RegionJapan(¥ million)
100,000

6.2%

Sales and Segment Profit
by Geographical Region

Intra-area transfers: Exports to Group aﬃliates, others
Sales to customers: South Korea, IDEXX and others
Sales to customers: Japan
Segment profit
15,000Americas

Net sales
Segment profit(¥ million)
35,0005,000

88,16882,78416.8%

80,00029.5%

69,09066,48360,000Net Sales

34,01031,501 27,857¥145,578 million

40,000 1,761 1,806
4,672

27.1%

20,00020.4%

EuropeNet sales
Segment profit(¥ million)

10,00050,00012,0002009

2010

39,094 45,197
8,683

6,816
3,179 3,955

2,932
35,828 36,820 38,541

0

Sales and Segment Profit
by Geographical Region

11,93975,73029,70328,00025,47623,368 23,444

9,000

21,000

2,775

2,872

6,000

2011* 2012* 2013*

3,000

0

14,000

2,000

1,789

1,000

7,000

0

2009

2010

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

Sales and Segment Profit
by Geographical Region

Sales and Segment Profit
by Geographical Region
Net sales
Segment profit
24,425 5,000(¥ million)
25,000

3,000
2,129

2,783

39,735 40,187

China

4,000

26,855

3,248

Asia Pacific0

Net sales
Segment profit(¥ million)
10,0001,500¥2,384 million.

euro to ¥107.15. Yen appreciation against the euro had a ¥395

Asia Pacificof the yen against other currencies had a positive impact on

million negative effect on sales, but the overall appreciation

In India, delays in the renewal of distributor agreements

39,43635,387 36,446 35,296

37,032

8,000

5,135

6,000

5,379

5,304

4,000

19,299

7,868

8,000
7,109

5,799

30,00020,00015,0932,752
2,411
11,84315,000

4,552

20,0004,000

10,00010,000

2,000

5,000

3,000
2,370

6,000

2,384

10,111

5,388

our promotion of a shift to direct sales in the Philippines andCost of Sales and SG&A Expenses

Thailand and expanded reagent sales due to an increased base

Cost of sales increased ¥4,930 million, or 9.5%, to ¥56,582

of installed instruments pushed up regional sales 14.9% year

million, and the cost of sales ratio rose 0.6 percentage point,

on year, to ¥9,043 million.

to 38.9%.

Despite an increase in selling, general and administrative

million, stemming from the Company’s efforts to reinforce its

reduced cost of sales ratio contributed to a 220.0% increase

sales and support structures. The ratio of SG&A expenses to net

in operating income, to ¥1,056 million.

sales edged down 1.3 percentage points, from 47.4% to 46.1%.

Net Sales

SG&A Expenses
SG&A Ratio(¥ million)
150,000(¥ million / %)75,000145,578

4,000

1,000

2,000

2009

2010

2011

2012

2013

(Years ended March 31)

0

0

2009

2010

2011* 2012* 2013*(Years ended March 31)00116,206

124,694

60,000 55,871 57,986

120,000

900

90,00045,000600

60,00030,000300

30,00015,000111,843

50.0

330

2009

SG&A expenses
SG&A ratio

60,01663,886100

75,000(¥ million / %)15,00080

60,00012,00060

45,000

9,000

2010

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

0

0

2009

2010

2011

(Years ended March 31)

2012

2013

0

2009

49.9

2010

48.1

40

30,0006,000

20

15,000

3,000

2011

(Years ended March 31)

47.4

2012

0

0

R&D expenditure
R&D expenditure as a percentage of net sales
100

15

12,50012

10,000

9

7,500

40

6

5,000

20

3

2,500

0

0

67,191
12,380

746

1,309

0

R&D Expenditure
R&D Expenditure as a Percentage of Net Sales

134,744

647

2,000

SG&A expenses rose ¥3,305 million, or 5.2%, to ¥67,191

expenses to enhance our sales and support structure, a

1,200
1,056

5,847 900

sales of ¥2,711 million.

caused sales in that country to decline, but such factors as

9,043

40,000with the average for the year moving from ¥108.96 against theprices, and operating income increased 0.6% year on year, to

46.1

2013

10,771 11,238
9.6

9.7

11,904 12,11980

9.9 608.8

002008 20092009
2010 20102011 20112012 2012

8.3

2013

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

62

Sysmex Annual Report 2013

Sysmex Annual Report 2013

63

2008

Management’s Discussion and Analysis

IncomeAssets, Liabilities and Equity

amortization provided ¥8,812 million, ¥790 million more than

Bolstered by higher sales, operating income increased

from retained earnings, an interim dividend and a year-end

As of March 31, 2013, total assets amounted to ¥173,011

in the preceding year, and an increase in notes and accounts¥2,599 million, or 13.5%, to ¥21,805 million, and the operating

dividend. The year-end dividend is decided upon approval of

million, up ¥30,726 million from the end of the previous fiscal

payable provided ¥2,432 million, ¥1,836 million more than in

margin was 15.0%, up 0.7 percentage point. The foreign

the annual shareholders’ meeting, and the interim dividend

year. Major factors included a ¥12,469 million increase in cash

the preceding year. However, income taxes paid used ¥7,253

exchange situation, meanwhile, had a ¥940 million negative

upon approval by the members of the Managing Board.

and cash equivalents, a rise of ¥4,833 million in trade accounts

million, up ¥551 million.

As a basic policy, Sysmex pays twice-yearly dividends

In accordance with this policy and in light of business

impact on operating income, compared with the precedingreceivable, a ¥4,098 million increase in inventories and a ¥984

performance during the year under review, we announced

fiscal year.

Cash Flows from Investing Activities

million expansion in machinery and equipment.

dividends for the year of ¥40 per share, which includes an

Meanwhile, total liabilities were up ¥14,075 million, to¥14,166 million. This rise was despite a higher loss oninterim dividend of ¥17. As a result, the consolidated payout¥53,857 million. The main reasons for this rise were increases¥2,152 million more than in the preceding fiscal year. The main

disposal of property, plant and equipment of ¥162 million,

ratio was 29.1%.

of ¥2,894 million in trade accounts payable and a ¥1,619 mil-use of cash was purchases of property, plant and equipment,lion expansion in accrued expenses.

which used ¥9,608 million, ¥2,876 million more than in the

Net income expanded ¥2,159 million, or 18.0%, toGoing forward, Sysmex will continue to effectively invest

or 91.4%, from the previous year, to ¥339 million, and an

Net cash used in investing activities was ¥12,524 million,

increase in total income taxes of ¥1,509 million, or 21.8%, to

its internal reserves in the implementation of highly competi-¥8,438 million.

tive product development and global business strategies,

year, up ¥16,651 million. The principal reasons for this riseaiming to respond to anticipated changes in the businesswere a ¥10,462 million increase in retained earnings and an

R&D Expenditureenvironment. We will retain this commitment to continue

increase in net assets of ¥5,177 million resulting from the shift

Cash Flows from Financing Activities

To enhance its product portfolio, during the year Sysmex

meeting our shareholders’ expectations.

of foreign currency translation adjustments from a negative

Net cash used in financing activities amounted to ¥3,117 mil-to a positive figure. The equity ratio as of March 31, 2013, waslion, ¥697 million less than was used in these activities in the

68.7%, down 2.9 percentage points from the 71.6% recorded at

previous year. Major factors included proceeds from exercise

the end of the previous fiscal year.

of warrants, which provided ¥866 million, ¥626 million moredeveloped new products and aggressively pursued R&D cen-Liquidity and Sources of Capitaltering on the life sciences, a field targeted for future growth.

Fund Procurement and Liquidity Management

R&D expenditure expanded ¥215 million, or 1.8%, toprevious year. In addition, purchases of software and otherTotal equity came to ¥119,154 million at the end of theassets used ¥2,203 million, up ¥496 million.

than in the preceding year, while dividends paid used ¥3,704¥12,119 million. R&D expenditure as a percentage of net sales

The Company raises working capital as necessary throughdecreased 0.5 percentage point, from 8.8% to 8.3%.

short-term bank loans and other means. Consolidated

Cash Flows

million, ¥520 million more than in the previous year, andsubsidiaries obtain bank loans as needed to secure working

As of March 31, 2013, cash and cash equivalents amounted

payments of lease obligations used ¥269 million, ¥308 million

Dividend Policy

capital, but in October 2003, the Company introduced a cashto ¥34,307 million, up ¥12,469 million from March 31, 2012.

less than in the previous fiscal year.

We aim to maintain a proper balance between internalmanagement system to increase efficiency by unifying financ-

Cash flows from various activities are described in morereserves for R&D and capital expenditure, which are designed

ing and capital management at affiliates in Japan.

detail below.

Capital Expenditure and Depreciation

to sustain steady high growth, and returns to our sharehold-

For long-term capital requirements such as capitalers as our earning power increases. In terms of returns toinvestment, the Company decides the funding method after

Cash Flows from Operating Activities

equipment, including construction in progress) was up ¥1,036

shareholders, we intend to provide a stable dividend on ataking into account the investment recovery period and risk.

Net cash provided by operating activities was ¥25,806 million,

million year on year, or 13.1%, to ¥8,945 million. The principal

continuous basis and aim for a consolidated payout ratio of

During the year, the Company financed capital expenditureup ¥8,747 million. As principal factors, income before income

reason for this rise was the acquisition of instruments to lend

20% under our basic policy of sharing the successes of ourand R&D activities primarily from cash provided by operat-taxes and minority interests provided ¥22,619 million, ¥3,660

to customers. Depreciation and amortization increased ¥914

operations in line with business performance.

ing activities.

million more than during the preceding year, depreciation andmillion, or 13.0%, to ¥7,945 million.

Cash Dividends Applicable to the Year
Dividend Ratio

Net Income

Operating Income
Operating Margin
Operating income
Operating margin(¥ million / %)25,00025(¥ million)
15,00014,166

Cash dividends applicable to the year
Dividend ratio(¥ / %)
60
60
56

21,80520,00015,00018,28915,134

15,74013.5

19,206

20
15.0

14.7

15

12,000

14.3

13.5

10,000

10

11,41250

Total Assets
ROA*
Total assets
ROA(¥ million / %)200,000

20

40
31.9

36

160,000

142,285

40**
34*

29.4
27.0

6,000

Total equity
Equity ratio(¥ million / %)125,000

30

29.1

29.1

120,000

118,522 120,702

80,00079,851

12
8.8

8.2

102,503

100,000

130,060

9.1

20

24

16

9.0

75,00087,13666.8

80

94,233

71.5

71.9

Capital expenditure
Depreciation(¥ million)
119,154 100

173,01148

8,014

Capital Expenditure
Depreciation

Total Equity
Equity Ratio

50

12,007

9,765

9,000

Capital expenditure (investment in property, plant and

71.6

10,000

8,000

68.7

60

10,000

9,340

8,945
7,909

7,189 7,034

6,871

7,945

8,000

7,031

5,840

6,000

6,000

4,540

8

50,000

40

4,000

4,000

4

25,000

20

2,000

2,000

2013 0

0

0

0

7.0

5,000

0

2009

2010

2011

(Years ended March 31)

64

Sysmex Annual Report 2013

2012

2013

5

3,000

0

0

12

2009

2010

2011

(Years ended March 31)

2012

2013

0

2009

2010

2011

2012

2013

10

40,00000(Years ended March 31)* Two-for-one stock split conducted on April 1, 2011.
** Including special dividends of ¥4 commemorating
the 45th anniversary of the Company’s founding.

2009

2010

2011

2012

(March 31)

2009

2010

(March 31)

2011

2012

2013

2009

2010

2011

2012

2013

0

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

Sysmex Annual Report 201365

Consolidated Financial Statements
Consolidated Balance Sheet
Sysmex Corporation and Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
March 31, 2013

2013

2012

2013

ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 12)
Short-term investments (Note 3)
Receivables (Note 12):Trade notes
Trade accounts
Associated companies
Other
Allowance for doubtful accounts
Investments in lease (Notes 11 and 12)
Inventories (Note 4)
Deferred tax assets (Note 10)Prepaid expenses and other current assets
Total current assets¥ 34,307150¥ 21,838
269$ 1,364,968
1,596

3,584
37,507
165
261
(523)
3,263
25,941
6,030
3,727
114,412

3,383
32,674
164
221
(351)
2,577
21,8435,130
2,412
90,16038,128399,011
1,755
2,776(5,564)34,713275,968
64,14939,6491,217,149

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

10,02331,2168,314
33,8552,821
822
87,051(41,572)
45,4798,894
28,5187,330
27,8284,442
1,125
78,137(38,297)
39,840106,628
332,085
88,447360,159
30,011
8,744
926,074(442,255)
483,819

INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3 and 12)
Investments in associated companies
Goodwill (Note 5)
SoftwareDeferred tax assets (Note 10)
Other assets
Total investments and other assets
TOTAL

3,620
415
1,790
4,655
125
2,515
13,120¥ 173,011

3,183
76
2,194
4,447
88
2,297
12,285¥ 142,285

38,511
4,415
19,042
49,521
1,330
26,756
139,575$ 1,840,543

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

2013
LIABILITIES AND EQUITYCURRENT LIABILITIES:Current portion of long-term debt (Note 6)
Current portion of long-term lease obligations (Note 12)
Payables (Note 12):Trade notes
Trade accounts
Associated companies
Construction and other
Income taxes payable (Note 12)
Accrued expenses
Deferred tax liabilities (Note 10)
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:Long-term debt (Note 6)Long-term lease obligations (Note 12)
Liability for retirement benefits (Note 7)
Deferred tax liabilities (Note 10)
Other long-term liabilities
Total long-term liabilities

¥

3
54

2013

2012

¥

5
252

$

32
574

1,728
12,872
258
4,358
3,983
9,908
7
12,25345,424

2,023
9,978
165
4,490
2,776
8,289
1
6,749
34,72818,383
136,936
2,745
46,362
42,372
105,40475
130,351483,234

1
245
1,908
3,075
3,204
8,433

5
257
1,424
1,760
1,608
5,054

11
2,606
20,29832,71334,08589,713

9,712
14,652353
93,947(260)

9,187
14,127546
83,485(256)

103,319
155,872
3,756
999,436(2,766)

709

427
(0)
(5,136)102,380
123
102,503¥ 142,285

7,543

COMMITMENTS AND CONTINGENT LIABILITIES (Notes 11 and 13)
EQUITY (Notes 8, 9, 15 and 17):
Common stock, authorized, 299,344,000 shares; issued,
103,399,416 shares in 2013, and 103,027,016 shares in 2012
Capital surplus
Stock acquisition rights
Retained earnings
Treasury stock - at cost: 218,696 shares in 2013, and 217,764 shares in 2012
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities
Deferred loss on derivatives under hedge accounting
Foreign currency translation adjustments
Total
Minority interests
Total equity
TOTAL

41
119,154
0
119,154¥ 173,011

436
1,267,596
0
1,267,596$ 1,840,543

See notes to consolidated financial statements.

66

Sysmex Annual Report 2013

Sysmex Annual Report 201367

Consolidated Financial Statements

Consolidated Statement of Income
Sysmex Corporation and Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Year Ended March 31, 2013

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 10):
Current
Deferred
Total income taxes
NET INCOME BEFORE MINORITY INTERESTSMINORITY INTERESTS IN NET INCOME
NET INCOME

2013¥ 145,578
56,582
88,996
67,19121,8052012¥ 134,744
51,652
83,092
63,886
19,2062013$ 1,548,702
601,936
946,766
714,798
231,968

179
(59)
815
(121)
814
22,619

196
(96)
(403)
56
(247)
18,959

1,905
(628)
8,670
(1,287)
8,660
240,628

8,184
254
8,438
14,18115¥ 14,166

6,891
38
6,929
12,03023¥ 12,007

87,064
2,702
89,766150,862160$ 150,702

Yen

PER SHARE OF COMMON STOCK (Notes 2.w and 15):
Basic net income
Diluted net income
Cash dividends applicable to the year

¥ 137.58
137.06
40.00

U.S. Dollars¥ 116.85
116.6334.00$ 1.461.46
0.43

See notes to consolidated financial statements.

Consolidated Statement of Comprehensive Income
Sysmex Corporation and Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Year Ended March 31, 2013

NET INCOME BEFORE MINORITY INTERESTSOTHER COMPREHENSIVE INCOME (LOSS) (Note 14):
Unrealized gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Foreign currency translation adjustments
Total other comprehensive income (loss)
COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO :Owners of the parent
Minority interests
See notes to consolidated financial statements.

68

Sysmex Annual Report 20132013
¥ 14,1812012¥ 12,030

2013$ 150,862

282
0
5,190
5,472
¥ 19,653241
14(1,064)(809)¥ 11,221

3,000
055,21358,213$ 209,075¥ 19,625
28¥ 11,197
24$ 208,777298

Consolidated Statement of Changes in Equity
Sysmex Corporation and Subsidiaries

Millions of Yen

Year Ended March 31, 2013

Number of
Shares ofCommonStock
Outstanding

BALANCE, APRIL 1, 2011
51,353,500
Net income
Cash dividends,¥47.00 per share
Purchase of treasury stock(1,356)
Disposal of treasury stock
208
Stock splits (Note 8)
51,353,500
Exercise of warrants
103,400
Net change in the year
BALANCE, MARCH 31, 2012 102,809,252
Net income
Cash dividends,¥36.00 per share
Purchase of treasury stock(932)
Disposal of treasury stock
372,400
Exercise of warrants
Net change in the year
BALANCE, MARCH 31, 2013 103,180,720

Stock
Acquisition
RightsCommonStockCapitalSurplus¥ 9,042¥ 13,981¥ 600

Retained
Earnings

TreasuryStock¥ 74,662
12,007¥ (252)

Accumulated Other Comprehensive Income
Deferred
Unrealized
Gain
Gain on(Loss) on
Foreign
Available- Derivatives Currency
for-Sale under Hedge Translation
Securities Accounting Adjustments¥ 186¥ (14)¥ (4,071) ¥ 94,134
12,007(3,184)

145
9,187

145
14,127(54)
546

83,485
14,166

(256)

241
427

14
(0)

(1,065)(5,136)(3,704)¥ 9,712525¥ 14,652(193)¥ 353 ¥ 93,947¥ (260)

¥ 99

282
¥ 709

0

290
(864)
102,380
14,166

Total Equity¥ 94,233
12,007(3,184)
(4)
1

24
123

290
(840)
102,503
14,166(3,704)(4)(3,704)
(4)

1,050
5,177
5,266
¥41 ¥ 119,154

1,050
(123)
5,143
¥ 0 ¥ 119,154

(4)
525

Minority
Interests(3,184)
(4)
1

(4)
0

1

Total

Thousands of U.S. Dollars (Note 1)

CommonStock

BALANCE, MARCH 31, 2012
Net income
Cash dividends, $0.38 per share
Purchase of treasury stock
Disposal of treasury stock
Exercise of warrants
Net change in the year
BALANCE, MARCH 31, 2013

CapitalSurplus$ 97,734 $ 150,287

Stock
Acquisition
RightsRetained
Earnings$ 5,809 $ 888,138
150,702(39,404)

TreasuryStock$ (2,723)

Accumulated Other Comprehensive Income
Deferred
Unrealized
Gain
Gain on(Loss) on
Foreign
Available- Derivatives Currency
for-Sale under Hedge Translation
Securities Accounting Adjustments$ 4,543

(43)
5,585

$ 103,319 $ 155,872$ (2,766)

3,000$ 7,543

Minority
Interests

Total Equity$ (0) $ (54,638) $ 1,089,150
150,702(39,404)(43)$ 1,309 $ 1,090,459
150,702(39,404)(43)

11,17055,07456,021$ 436 $ 1,267,596

11,170(1,309) 54,712$ 0 $ 1,267,596

5,585(2,053)$ 3,756 $ 999,436

Total

0

See notes to consolidated financial statements.

Sysmex Annual Report 201369

Consolidated Financial Statements

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

Sysmex Corporation and Subsidiaries

Sysmex Corporation and Subsidiaries
Year Ended March 31, 2013

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Year Ended March 31, 2013

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:
Increase in notes and accounts receivable
Increase in inventories
Increase in notes and accounts payable
Increase in liability for retirement benefits
Other–net
Net cash provided by operating activities
INVESTING ACTIVITIES:
Purchases of property, plant and equipment
Purchases of software and other assets
Acquisitions, net of cash acquired
Purchase of business
Other–net
Net cash used in investing activities
FINANCING ACTIVITIES:
Decrease 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

2012

2013

¥ 22,619¥ 18,959$ 240,628(7,253)8,812
339(6,702)
8,022
177(77,160)
93,7453,606(2,425)(2,818)
2,432
453
3,647
25,806(4,755)(2,140)
596
526
2,376
17,059(25,798)(29,979)
25,872
4,819
38,798274,531(9,608)(2,203)(357)(6,732)(1,707)(102,213)(23,436)(3,798)(356)(12,524)(1,901)(32)(10,372)(3,787)(133,234)

(6)
(269)
866
(3,704)(4)(3,117)

(283)
(6)
(577)
240
(3,184)(4)(3,814)(64)(2,862)
9,213(39,404)(43)(33,160)

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

2,304
12,46921,838¥ 34,307

49
2,922
18,916¥ 21,838

24,512
132,649
232,319$ 364,968

ADDITIONAL CASH FLOW INFORMATION - Interest paid

¥ 42

¥ 50

$ 447

See notes to consolidated financial statements.

70

2013

Sysmex Annual Report 2013

1. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL
STATEMENTS

c. Unification of Accounting Policies Applied to Foreign AssociatedCompanies for the Equity Method —In March 2008, the ASBJ issued ASBJ

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 2012 consolidated financial statements to conform to the classifications used in 2013.
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 ¥94 to $1, the approximate rate of exchange
at March 31, 2013. 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.

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 adjustments. In addition, financial statements prepared byforeign associated companies in accordance with either International Financial
Reporting Standards or the 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 accounting for property,
plant, and equipment and investment properties and incorporation of the costmodel 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 forbusiness combinations, ASBJ Statement No. 21, “Accounting Standard forBusiness Combinations.” Major accounting changes under the revised accounting standard are as follows: (1) The revised standard requires accounting forbusiness combinations only by the purchase method. As a result, the pooling ofinterests 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 systematically amortizedover a period not exceeding 20 years. Under the revised standard, the acquirer
recognizes the bargain purchase gain in profit or loss immediately on theacquisition date after reassessing and confirming that all of the assets acquired
and all of the liabilities assumed have been identified after a review of theprocedures used in the purchase allocation. The revised standard was applicableto business combinations undertaken on or after April 1, 2011.
e. Cash Equivalents—Cash equivalents are short-term investments thatare readily convertible into cash and that are exposed to insignificant risk ofchanges in value. Cash equivalents include time deposits, commercial paper
and mutual funds investing in bonds, all of which mature or become due within
three months of the date of acquisition.
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, forwhich there is the positive intent and ability to hold to maturity are reported atamortized cost; and (3) available-for-sale securities, which are not classified as

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation—The consolidated financial statements as of March 31, 2013
include the accounts of the Company and 42 (45 in 2012) subsidiaries (together,
the “Group”).
Under the control or influence concept, 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 associated companies are accounted for by the equity method.
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 five 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 the generally accepted accounting principles in the United Statesof America tentatively may be used for the consolidation process, except for,the following items which should be adjusted in the consolidation process sothat net income is accounted for in accordance with Japanese GAAP, unlessthey are not material: 1) amortization of goodwill; 2) scheduled amortization of
actuarial gain or 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 accounting for property, plant, andequipment and investment properties and incorporation of the cost modelaccounting; and 5) exclusion of minority interests from net income, if containedin net income.

Sysmex Annual Report 201371

Consolidated Financial Statements

either 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 determinedby 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 domestic subsidiaries, andat the lower of cost, determined by the first-in, first-out method, or market forforeign 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 to 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 a straight-line
method over the estimated salable years. The estimated salable years are
principally three years.
Software for internal use is amortized by the straight-line method over theestimated usable years. The estimated usable years are principally five years.
l. Liability for Retirement Benefits—The Company has a non-contributory
funded pension plan covering substantially all of its employees.
The liability for employees’ retirement benefits is accounted for based on
projected benefit obligations and plan assets at the balance sheet date.
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 published 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

72

Sysmex Annual Report 2013

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.
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 ¥12,119 million ($128,926 thousand) and ¥11,904 million for theyears ended March 31, 2013 and 2012, 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. The revised accounting standard for leasetransactions was effective for fiscal years beginning on or after April 1, 2008.
(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
was disclosed in the note 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 which 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 totransfer ownership of the leased property to the lessee were treated as sales.
However, other finance leases were permitted to be accounted for as operating lease transactions if certain “as if sold” information was disclosed in thenote to the lessor’s financial statements. The revised accounting standard
requires that all finance leases that are deemed to transfer ownership of theleased property to the lessee should be recognized as lease receivables, andall 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 theyear 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 thepretax 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 tax laws 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 offoreign subsidiaries are translated into Japanese yen at the current exchange rate
as of the balance sheet date except for equity, which is translated at the historicalrate. Differences arising from such translation are shown as “Foreign currencytranslation adjustments” under accumulated other comprehensive income in a
separate component of equity.
Revenue and expense accounts of foreign subsidiaries are translated 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 their 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 statement of income and (2) for derivatives
used for hedging purposes, if derivatives qualify for hedge accounting becauseof high correlation and effectiveness between the hedging instruments and thehedged items, gains or losses on derivatives are deferred until maturity of thehedged transactions.
The interest rate swaps that qualify for hedge accounting and meet specificmatching criteria are not remeasured at market value but the differential paidor received under the swap agreements are recognized and included in interest
expense or income.
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 an applicable adjustment for related interest expense, net of tax, and full
exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated
statement of income are dividends applicable to the respective years including
dividends to be paid after the end of the year, which is not 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 and future 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 followed bypartial 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).
(b)	Treatment in the statement of income and the statement of comprehensive
income	The 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 working lives 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 expects to apply the revised accounting standard
for (a) and (b) above from the end of the annual period beginning on
April 1, 2013, and for (c) above from the beginning of the annual period
beginning on April 1, 2014. The revised accounting standard may have asignificant impact to the Company’s consolidated financial statements.
The Company is in the process of measuring the effects of applying therevised accounting standard in future applicable periods.

Sysmex Annual Report 201373

Consolidated Financial Statements

3. SHORT-TERM INVESTMENTS AND INVESTMENT SECURITIESShort-term investments and investment securities as of March 31, 2013 and2012, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2013
2012
2013
Current:
Time deposits other than cash
equivalents
¥ 23
¥ 24
$ 245
Investment trust
127
245
1,351
Total
¥ 150
¥ 269
$ 1,596
Non-current:
Marketable equity securities¥ 2,677 ¥ 2,239$ 28,479
Unquoted equity securities
943
944
10,032
Total¥ 3,620 ¥ 3,183$ 38,511
The costs and aggregate fair values of investment securities as of March 31,
2013 and 2012, were as follows:
Millions of Yen
2013
Unrealized Unrealized
Cost
Fair Value
Gains
LossesAvailable-for-sale Equity securities¥ 1,567¥ 1,110¥ (0) ¥ 2,677

Cost
Available-for-sale Equity securities¥ 1,567

Millions of Yen
2012
Unrealized Unrealized
Fair Value
Gains
Losses¥ 683¥ (11)¥ 2,239

Thousands of U.S. Dollars
2013
Unrealized Unrealized
Cost
Fair Value
Gains
LossesAvailable-for-sale Equity securities$ 16,670$ 11,809$ (0) $ 28,479

4. INVENTORIESInventories as of March 31, 2013 and 2012, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2013
2012
2013
Finished products and merchandise ¥ 20,317 ¥ 16,534$ 216,138
Work in process
1,473
1,402
15,670Raw materials
3,599
3,368
38,287
Supplies
539
5,873
552
Total
¥ 25,941 ¥ 21,843$ 275,968

5. GOODWILL
Goodwill as of March 31, 2013 and 2012, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2013
2012
2013
Goodwill on purchase of¥ 879 ¥ 1,165$ 9,351a specific business
Consolidation goodwill
911
1,029
9,691
Total
¥ 1,790 ¥ 2,194$ 19,042

74

Sysmex Annual Report 2013

Goodwill on purchase of a specific business and consolidation goodwill areamortized using straight-line method over five years.

6. LONG-TERM DEBT
Long-term debt as of March 31, 2013 and 2012, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2013
2012
2013
Loans from banks, due through2016, with interest ranging
from 0.02% to 0.05% for 2013
(from 0.02% to 0.05% for 2012)Unsecured
¥4
¥ 10
$ 43
Total
4
10
43
Less current portion
(3)
(5)
(32)
Long-term debt, less current portion
¥1
¥5
$ 11
Annual maturities of long-term debt as of March 31, 2013, were as follows:
Thousands ofYear Ending March 31
Millions of Yen
U.S. Dollars

Assumptions used for the years ended March 31, 2013 and 2012, are set
forth as follows:
2013
2012
Discount rate
1.5%
2.0%
Expected rate of return on plan assets
3.0%
3.0%
Amortization period of prior service cost
5 years
5 years
Recognition period of actuarial gain/loss
5 years
5 years	 Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorporation of the company
so stipulate. The Companies Act provides certain limitations on the amounts
available for dividends or the purchase of treasury stock. The limitation isdefined as the amount available for distribution to the shareholders, but theamount of net assets after dividends must be maintained at no less than ¥3
million.

In addition, the Company and certain subsidiaries participate in contributory multiemployer pension plans covering substantially all of their employees.
Under these plans, the amount of pension assets and benefit obligations wereapproximately ¥9,533 million ($101,415 thousand) and ¥11,561 million ($122,989
thousand) at March 31, 2012, the most recent valuation date.
The Company also has recorded a liability for an unfunded retirement
benefit plan covering all of its directors in the amount of ¥160 million ($1,702
thousand) and ¥160 million as of March 31, 2013 and 2012, respectively.

	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.

8. EQUITY

2014

¥3

$ 32

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:

2015

1

11

(a) Dividends

2016

0

0

Total

¥4

$ 43

	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.

7. RETIREMENT BENEFITSThe Company and its certain subsidiaries have retirement benefit plans for
employees. Under most circumstances, employees terminating their employment are entitled to retirement benefits determined based on the rate of pay at
the time of termination, years of service and certain other factors. Employees
are entitled to larger payments if the termination is involuntary, as opposed toby retirement at the mandatory retirement age or by death.
Certain subsidiaries have unfunded lump-sum payment plans and certain
overseas subsidiaries have defined contribution pension plans.
The liability for employees’ retirement benefits as of March 31, 2013 and2012, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2013
2012
2013
Projected benefit obligation¥ 11,373 ¥ 10,177$ 120,990
Fair value of plan assets(9,746)(7,984)(103,681)
Unrecognized prior service cost
(22)
(234)
(28)
Unrecognized actuarial loss
143
(901)
1,521
Net liability¥ 1,748 ¥ 1,264$ 18,596
The components of net periodic retirement benefit costs for the years
ended March 31, 2013 and 2012, are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2013
2012
2013
Service cost
¥ 1,270 ¥ 1,195$ 13,511
Interest cost
196
185
2,085
Expected return on plan assets
(239)
(227)
(2,543)
Amortization of prior service cost
664
3
Recognized actuarial loss
564
509
6,000
Net periodic retirement benefit costs ¥ 1,797 ¥ 1,665$ 19,117(b) Increases/decreases and transfer of common stock, reserve and surplus(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, 2011, the Company made a two-for-one stock split by way of afree share distribution based on the resolution of the Board of Directors meeting
held on March 3, 2011.

9. STOCK OPTION
The stock options outstanding as of March 31, 2013, are as follows:
Stock Option

Persons Granted2007 Stock Option

9 directors
152 employees
18 directors of subsidiaries
42 employees of subsidiaries

Number of
Options Granted(Shares)
1,466,400

Date of
Grant

Exercise
Price

Exercise Period

July 30, 2007

¥ 2,325($ 24.73)

From July 30, 2009 to
July 29, 2015

The number of options granted and price information in the above table are retroactively adjusted for stock splits.

Sysmex Annual Report 201375

Consolidated Financial Statements

The stock option activity is as follows:
For the year ended March 31, 2012
Non-vested
March 31, 2011 - Outstanding
GrantedCanceled
VestedMarch 31, 2012 - Outstanding
VestedMarch 31, 2011 - Outstanding
VestedExercised
Canceled
March 31, 2012 - Outstanding

For the year ended March 31, 2013
Non-vested
March 31, 2012 - Outstanding
GrantedCanceled
VestedMarch 31, 2013 - Outstanding
VestedMarch 31, 2012 - Outstanding
VestedExercised
Canceled
March 31, 2013 - Outstanding
Exercise price
Average stock price at exercise
Fair value price at grant date2007 Stock
Option(Shares)

1,221,000(103,400)(6,000)1,111,600
2007 Stock
Option(Shares)

1,111,600(372,400)(21,000)
718,200¥ 2,325¥ 3,770¥ 98,325

The Assumptions Used to Measure Fair Value of 2007 Stock Optionn
Estimate method:Black-Scholes option pricing model
Volatility of stock price:26.14%
Estimated remaining
outstanding period:
five years
Estimated dividend:¥ 36 per share
Interest rate with risk free:
1.403%

10. INCOME TAXESThe 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 38.0% and 40.6% for the years ended March
31, 2013 and 2012, 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, 2013 and 2012,
are as follows:76

Sysmex Annual Report 2013

2013

2012

Thousands of
U.S. Dollars
2013¥ 2,609
517
1,091
299
1,519
6,035

¥ 2,072
489
1,067
163
1,341
5,132

$ 27,755
5,500
11,606
3,181
16,16064,202Millions of Yen
Deferred tax assets (current):
Unrealized intercompany profits
Inventories
Accrued bonuses
Accrued enterprise tax
Other
Total
Deferred tax assets (non-current):
Depreciation
Liability for retirement benefits
SoftwareInvestment securities
Other
Less valuation allowance
Total
Deferred tax liabilities (current)

11. LEASES(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
Due within one year
Due after one year
Total

73
576
792
287
1,208
(213)
2,723
12

69
420
746
287
1,187
(228)
2,481
3

777
6,128
8,426
3,053
12,850(2,266)28,968
128

2013

2013

¥ 929

$ 9,883

5,873

62,479¥ 6,802$ 72,362(Lessor)The net investments in lease are summarized as follows:
Thousands of
U.S. Dollars

Millions of Yen
Gross lease receivables

2013

2012

2013

¥ 3,267¥ 2,692$ 34,755

Estimated residual values

564

397

6,000

Deferred tax liabilities (non-current):

Unearned interest income

(568)

(512)

(6,042)Net unrealized gain on
available-for-sale securities
Revaluation of land forconsolidation
Investment loss for subsidiaries
capital reduction bycorporation tax law
Undistributed earnings offoreign subsidiaries
Other
Total
Net deferred tax assets

Investments in lease¥ 3,263¥ 2,577$34,713

375

239

3,989

400

400

4,255

377

377

4,011

3,351
1,170
5,673
¥ 3,073

2,356
781
4,153
¥ 3,457

35,64912,44760,351$ 32,691

A reconciliation between the normal effective statutory tax rates and theactual effective tax rates reflected in the accompanying consolidated statementof income for the year ended March 31, 2012, is as follows:2012
Normal effective statutory tax rate
40.6%
Expenses not deductible for income tax purposes
1.3
Per capita levy
0.3
Foreign tax credit(0.8)
R&D tax credit(3.3)
Amortization of goodwill
1.5
Effect of tax rate reduction
0.8
Tax effect on undistributed earnings of foreign subsidiaries
2.0
Different tax rates applied to foreign subsidiaries(6.7)
Other - net
0.8
Actual effective tax rate
36.5%
Since the actual effective tax rate at March 31, 2013, differed from the normal
effective statutory tax rate by less than 5%, disclosure of details is omitted.

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
2014¥ 1,016$ 10,809
2015
871
9,266
2016
687
7,308
2017
456
4,851
2018
195
2,074
2019 and thereafter
42
447
Total
¥ 3,267$ 34,755
Future rental income under operating leases (including imputed interest income):
Millions ofThousands of
Yen
U.S. Dollars
2013

2013

Due within one year

¥ 4

$ 42

Due after one year

6

64

¥ 10

$ 106

Total

12. 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.
	 Maturities of finance lease obligation, which are mainly used for fundingof equipment investment, are less than ten 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 13, “DERIVATIVES” for more detail 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 13, “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,
2013 and 2012, are as follows. Note that financial instruments whose fairvalue cannot be reliably determined are not included (see (b)).

Sysmex Annual Report 201377

Consolidated Financial Statements

March 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)

March 31, 2012
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)¥1¥1Millions of Yen
Unrealized
Carrying
Fair Value
Gain/Loss
Amount¥ 21,838 ¥ 21,838
3,383
32,674164(344)
35,8772,577

35,876
2,489

¥ (1)
(88)

2,239
¥ 62,531

2,239¥ 62,442¥ (89)¥ 2,023 ¥ 2,023
9,978
9,978
165
165
509
506
2,776
2,776
¥ 15,451 ¥ 15,448¥ (238)¥ (238)

¥ (3)
¥ (3)

March 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)

Thousands of U.S. Dollars
Unrealized
Carrying
Fair Value
Gain/Loss
Amount$ 364,968 $ 364,968

 arrying amount of financial instruments whose fair value cannot be(b) Creliably determined
Thousands ofMillions of Yen
U.S. Dollars

38,128399,011
1,755

Investments in equity
instruments that do nothave a quoted market pricein an active market(5,564)433,330
34,713433,319
34,468$ (11)(245)

28,47928,479$ 861,490 $ 861,234$ (256)$ 18,383 $ 18,383
136,936 136,936
2,745
2,745
3,180
3,191
42,372
42,372$ 203,616 $ 203,627$ (1,606) $ (1,606)

$ 11
$ 11

Notes: *1. A llowance for doubtful accounts associated with trade accounts receivables
are deducted.
		 *2. Derivative assets and liabilities are on net basis.

AssetsCash 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 3, “SHORT-TERM INVESTMENT AND INVESTMENT
SECURITIES,” for securities categorized by purposes.

Liabilities
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.

Derivatives
Fair value information for derivatives is included in Note 13, “DERIVATIVES.”

78

Sysmex Annual Report 2013

2013

2012

2013

¥ 1,358¥ 1,021$ 14,447

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, 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
Millions of Yen
Due after Due after
Due inOne Year Five Years Due after
March 31, 2012
One Yearthrough through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents ¥ 21,838
Receivables:
Trade notes
3,383
Trade accounts
32,425¥ 249
Associated companies
164
Investments in lease
579
1,962
¥ 36
Total
¥ 36
¥ 58,389¥ 2,211
Thousands of U.S. Dollars
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 $ 364,968
Receivables:
Trade notes
38,128Trade accounts
395,862 $ 3,149
Associated companies
1,755
Investments in lease
9,372
25,064
$ 277
Total
$ 277
$ 810,085 $ 28,213

13. DERIVATIVESThe 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 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.

Derivative transactions to which hedge accounting is not applied

March 31, 2013
Foreign currency forward
contracts:
Selling U.S. dollars
Selling euro

March 31, 2012
Foreign currency forward
contracts:
Selling U.S. dollars
Selling euro

March 31, 2013
Foreign currency forward
contracts:
Selling U.S.dollars
Selling euro

Millions of Yen
Contract
Unrealized
Contract Amount
Fair Value
Gain/Loss
Amount Due after
One Year¥ 5,524
310¥ (160)9¥ (160)9Millions of Yen
Contract
Unrealized
Contract Amount
Fair Value
Gain/Loss
Amount Due after
One Year¥ 4,700
1,044¥ (184)(54)¥ (184)(54)

Thousands of U.S. Dollars
Contract
Unrealized
Contract Amount
Fair Value
Gain/Loss
Amount Due after
One Year$ 58,766
3,298$ (1,702)96$ (1,702)
96

Derivative transactions to which hedge accounting is applied

March 31, 2012

HedgedItem

Foreign currency forward
contracts Selling euro
Receivables

Millions of Yen
Contract
Contract Amount
Fair Value
Amount Due after
One Year

¥ 55

¥ (0)

The fair value of derivative transactions is measured at the quoted priceobtained from the financial institution.
The contract amounts of derivatives which are shown in the above table do
not represent the amounts exchanged by the parties and do not measure theGroup’s exposure to credit or market risk.

Sysmex Annual Report 201379

Consolidated Financial Statements

14. COMPREHENSIVE INCOME

16. RELATED PARTY DISCLOSURESThe components of other comprehensive income for the years ended March 31,
2013 and 2012, were as follows:
Thousands ofMillions of Yen
U.S. Dollars

Transactions of the Company with related parties for the year ended March 31,
2013, were as follows:
Millions Thousands ofof YenU.S. Dollars

2013
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 (loss)

2013

2012

Officers of the Company Exercise of stock options
¥ 438

¥ 349

349
(108)
¥ 241

4,660
(1,660)$ 3,000¥ (16)¥ 3$ (170)

16

20

170

0
(0)
¥ 0

23
(9)
¥ 14

0
(0)
0

¥ (1,092)$$ 55,21328¥ 5,190¥ (1,064)$ 55,213¥ 5,472¥ (809)$ 58,213

15. NET INCOME PER SHARE
Reconciliation of the differences between basic and diluted net income pershare (“EPS”) for the years ended March 31, 2013 and 2012, is as follows:
Millions of Thousands of
U.S.
Yen
Yen
U.S. Dollars
Dollars
WeightedNet
Average
EPS
IncomeSharesFor the year ended March 31, 2013:
Basic EPS
Net income available to¥ 14,166
102,964 ¥ 137.58$ 1.46
common shareholders
Effect of dilutive
securities
391
Stock options
Diluted EPS
Net income for¥ 14,166
103,355 ¥ 137.06$ 1.46computation
For the year ended March 31, 2012:
Basic EPS
Net income available to¥ 12,007
common shareholders
Effect of dilutive
securities
Stock options
Diluted EPS
Net income forcomputation¥ 12,007

80

Sysmex Annual Report 2013

102,758 ¥ 116.85

191

2013

2013

¥ 216

$ 2,298$ 4,660

438
(156)
¥ 282

¥ 5,190

3. Information about sales, profit (loss), assets and other items is as follows:

17. SUBSEQUENT EVENTSAppropriations of Retained Earnings
The following appropriation of retained earnings at March 31, 2013, wasapproved at the shareholders’ meeting of the Company held on June 21, 2013:
Millions of Thousands of
Yen
U.S. Dollars
Year-end cash dividends, ¥23 ($0.24)¥ 2,373$ 25,245
per share

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 equity method
Increase in property, plant andequipment and intangible assets

Americas

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 equity method
Increase in property, plant andequipment and intangible assets

Reconciliations Consolidated¥ 29,703
2¥ 29,705¥ 2,129
25,471¥ 39,436
483¥ 39,919¥ 5,799
35,255¥ 24,425
6¥ 24,431¥ 2,384
19,063¥ 9,043167¥ 9,210¥ 1,056
8,502¥ 145,578
45,855¥ 191,433¥ 23,307
188,237

4,464
280

1,257

2,349
580

203

539
7

8,812
867

415
6,086

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 equity method
Increase in property, plant andequipment and intangible assets

Total¥ 42,971
45,197¥ 88,168¥ 11,939
99,946

1,957

Americas

2,634

328

1,138

12,143

Millions of Yen
2012
Reportable Segment
EuropeChina
Asia PacificTotal¥ 26,855
2¥ 26,857¥ 2,872
18,173¥ 37,032
453¥ 37,485¥ 5,379
28,364¥ 19,2995¥ 19,304¥ 2,370
11,860¥ 7,868131¥ 7,999
¥ 330
5,772

¥ 134,744
39,685¥ 174,429¥ 19,634
154,868

3,926
454

1,075

2,229
530

137

363
7

7,730
991

76

7,945
867
415

(994)

11,149¥ 134,744¥ (39,685)¥ (39,685)¥ (428)(12,583)(699)¥ 134,744¥ 19,206
142,285
7,031
991

76
1,261

3,178

828

476

Japan

Americas

Thousands of U.S. Dollars
2013
Reportable Segment
EuropeChina
Asia Pacific$ 457,138
480,819$ 937,957$ 127,011
1,063,255$ 315,989
21$ 316,010$ 22,649
270,968$ 419,532
5,138$ 424,670$ 61,691
375,054$ 259,841
64$ 259,905$ 25,362
202,798

47,4892,979

13,372

24,989
6,170

2,160

10,539Total$ 96,202 $ 1,548,702
1,777
487,819$ 97,979 $ 2,036,521$ 11,234 $ 247,947
90,4472,002,522
5,734
74

4,415
64,745(867)¥ 145,578¥ 21,805
173,011

Reconciliations Consolidated¥ 43,690
39,094¥ 82,784¥ 8,683
90,6994,796¥ 145,578¥ (45,855)¥ (45,855)¥ (1,502)(15,226)

415

18. SEGMENT INFORMATION
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 separate
financial 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, Europe, 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,” “Europe,”“China” and “Asia-Pacific.”
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 to those
disclosed in Note 2, “Summary of Significant Accounting Policies,” and the
profits of the reportable segments are their operating incomes.
Intersegment sales or transfers are determined based on market prices orcosts of goods manufactured.

Millions of Yen
2013
Reportable Segment
EuropeChina
Asia Pacific

93,744
9,223

76
(923)

Reconciliations Consolidated$ 1,548,702$ (487,819)$ (487,819) $ 1,548,702$ (15,979) $ 231,968(161,979) 1,840,543(9,222)

4,415
20,81928,021

3,489

12,106

129,180

9,616

84,522
9,223
4,415(10,574)

118,606

Note: Reconciliations principally consist of intersegment transfers and unallocated corporate assets at ¥3,105 million ($33,032 thousand) and ¥2,692 million for 2013 and 2012, respectively.
The unallocated corporate assets primarily composed of funds such as marketable equity securities.

102,949 ¥ 116.63

Sysmex Annual Report 201381

Consolidated Financial Statements

4. Information about products and services
Millions of Yen
2013
Maintenance
Reagent
Service¥ 66,505¥ 14,130

Instrument¥ 47,867

Sales to external customers

Millions of Yen
2012
Maintenance
Reagent
Service¥ 59,906¥ 12,823

Instrument
Sales to external customers¥ 46,142

OthersTotal¥ 17,076¥ 145,578

OthersTotal¥ 15,873¥ 134,744

Thousands of U.S. Dollars
2013
Maintenance
Reagent
Others
Total
Service$ 707,500$ 150,319$ 181,660 $ 1,548,702

Instrument
Sales to external customers$ 509,223

5. Information about geographical areas(1) Sales
Millions of Yen
2013
Japan
AmericaChina¥ 40,190¥ 25,229¥ 24,430

Total¥ 145,578(2) Property, plant and equipment
Millions of Yen
2013
Japan
AmericaOther¥ 30,786¥ 4,720¥ 9,973

Total¥ 45,479

Total¥ 134,744

Millions of Yen
2012
AmericaOther¥ 2,375¥ 8,148

Total¥ 39,840

Thousands of U.S. Dollars
2013
Japan
AmericaOther$327,511$ 50,213$ 106,095

Total$ 483,819

Other¥ 55,729

Japan¥ 39,735

Millions of Yen
2012
AmericaChina¥ 24,046¥ 19,299

Japan$ 427,553

Thousands of U.S. Dollars
2013
America
China
Other
Total
$ 268,394 $ 259,893 $ 592,862 $ 1,548,702

Other¥ 51,664Japan¥ 29,317

Note: Sales are classified in countries or regions based on location of customers.

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
2013
Japan
Goodwill at March 31, 2013

Americas¥ 841

EuropeChina

Asia Pacific¥ 944

Eliminations/
Corporate

¥5

Total
¥ 1,790

Millions of Yen
2012
Japan
Goodwill at March 31, 2012

Americas¥ 1,121

EuropeChina

Asia Pacific¥ 1,061

Eliminations/
Corporate

¥ 12

Total
¥ 2,194

Thousands of U.S. Dollars
2013
Japan
Goodwill at March 31, 201382

Sysmex Annual Report 2013

$ 8,947

Americas

Europe$ 10,042

China

Asia Pacific$ 53

Eliminations/
Corporate

Total$ 19,042

Sysmex Group Netrwork

Independent Auditor’s Report

Sysmex Annual Report 201383

Sysmex Group Network
Global Network
Sysmex UK Limited(As of May 31, 2013)

HYPHEN BioMed, SAS

Jinan Sysmex Medical Electronics Co., Ltd.

Sysmex France S.A.S.

Corporate name

Sysmex Wuxi Co., Ltd.

Sysmex Nederland B.V.
Sysmex Belgium N.V.
Sysmex Deutschland GmbH

Sysmex Korea Co., Ltd.

Sysmex Corporation

1968

—%

Sysmex Taiwan Co., Ltd.

Sysmex International Reagents Co., Ltd.

1969

100%

Japan

Sysmex Europe GmbH
Sysmex RUS LLC
HITADO GmbH
Sysmex Polska Sp.z o.o.
Sysmex CZ s.r.o.
Sysmex Slovakia s.r.o.
Sysmex Hungaria Kft.

Sysmex America, Inc.

Japan
Sysmex Shanghai Ltd.

Sysmex Reagents America, Inc.

Americas

Sysmex Transasia Services Pvt. Ltd.

Sysmex Espana S.L.

Sysmex Canada, Inc.

Sysmex Philippines Inc.
Sysmex Hong Kong Limited

Sysmex Middle East FZ - LLC
Sysmex Digitana AG

Sysmex RA Co., Ltd.
Sysmex CNA Co., Ltd.
Sysmex bioMérieux Co., Ltd.

Sysmex India Pvt. Ltd.

Sysmex Austria GmbH

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.

EMEA*

Sysmex International Reagents Co., Ltd.
(Head Oﬃce/Seishin Factory)
Kakogawa Factory
Sales
Production
R&D
Regional headquarters

EquityEstablished ownershipby Group

Technopark

Head Oﬃce

Sysmex Business Support Co., Ltd.
Solution Center
Research and Development Center
Kobe Sales Oﬃce

Kansai Area

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 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) 847-996-4500

Sysmex Reagents America, Inc.

1993

100%

2 Nelson C. White Parkway, Mundelein, IL 60060, U.S.A.

TEL: (+1) 847-367-2800

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

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 Digitana AG

2006

100%

Tödistrasse 50, 8810 Horgen, Switzerland

TEL: (+41) 44-718-38-38

Sysmex Austria GmbH

2007

100%

Odoakergasse 34-36 A-1160 Wien, Austria

TEL: (+43) 1-4861631

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

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

Head Office

1-5-1 Wakinohama-Kaigandori, Chuo-ku, Kobe, Hyogo 651-0073, Japan

TEL: (+81) 78-265-0500

FAX: (+81) 78-265-0524

Sysmex South Africa (Pty) Ltd.

2006

100%

Fernridge Office Park, Block 2; 5 Hunter Avenue; Ferndale; Randburg 2194 RSA

TEL: (+27) 11-3299480

Tokyo Office

1-2-2 Ohsaki, Shinagawa-ku, Tokyo 141-0032

TEL: (+81) 3-5434-8910

FAX: (+81) 3-5434-8555

Sysmex Shanghai Ltd.

2000

100%

9th Floor, Azia Center, 1233 Lujiazui Ring Road, Shanghai, 200120, China

TEL: (+86) 21-6888-2626

Technopark

4-4-4 Takatsukadai, Nishi-ku, Kobe, Hyogo 651-2271

TEL: (+81) 78-991-1911

FAX: (+81) 78-991-1917

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

Solution Center

1-3-2 Murotani, Nishi-ku, Kobe, Hyogo 651-2241

TEL: (+81) 78-992-5860

FAX: (+81) 78-992-5868

Sysmex Hong Kong Limited

1999

100%

Room 1012, 10/ F, Tower 1, Silvercord, 30 Canton Road, Tsimshatsui, Kowloon, Hong Kong

TEL: (+852) 2543-5123

Research and Development Center

1-1-2 Murotani, Nishi-ku, Kobe, Hyogo 651-2241

TEL: (+81) 78-991-2212

FAX: (+81) 78-992-1082

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

Kakogawa Factory

314-2 Kitano, Noguchicho, Kakogawa, Hyogo 675-0011

TEL: (+81) 79-424-1171

FAX: (+81) 79-424-6814

Sysmex Asia Pacific Pte Ltd.

1998

100%

9 Tampines Grande #06-16 to #06-22 528735, Singapore

TEL: (+65) 6221-3629

Protein Development Center

1548 Ooaza Shimookudomi, Sayama, Saitama 350-1332

TEL: (+81) 4-2954-2171

FAX: (+81) 4-2954-2172

Sysmex (Malaysia) Sdn Bhd

1998

100%

No. 11A & 15, Jalan PJS 7/21, Bandar Sunway, 46150 Petaling 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

TEL: (+91) 22-2822-4040

Sysmex India Pvt. Ltd.

1998

100%

308, ASCOT Centre, 3rd Floor, Next to Hotel Le Royal Meridian Sahar Airport Road, Andheri (East) MUMBAI 400 099, India

TEL: (+91) 22-2822-4040

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%

66 Umyeon-dong, Seocho-gu, Seoul, 137-900, Korea

TEL: (+82) 2-3498-5359

Sysmex New Zealand Limited

2001

100%

382-386 Manukau Road, Epsom, Auckland 1344, New Zealand

TEL: (+64) 9-630-3554

Domestic Offices

Nagoya Branch
Nagano Sales Office
Kobe Sales OfficeOsaka Branch
Niigata Sales OfficeTakamatsu Sales Office

FAX

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

TEL

Associated Foundation

Nakatani Foundation for Advancement of
Measuring Technologies in Biomedical
1-2-2 Ohsaki, Shinagawa-ku, Tokyo 141-0032, Japan
Engineering

China

Sendai Branch
Fukuoka Branch
Shizuoka Sales Office
Kagoshima Sales Office

Location

TEL: (+81) 3-5719-2125

FAX: (+81) 3-5719-2135* The name of this region was changed from “Europe” to “EMEA” in April 2013.

84

Sysmex Annual Report 2013

Sysmex Annual Report 201385

Sysmex Group Netrwork

Brief History of the Company

Corporate Overview/Stock Information (As of March 31, 2013)=Management =R&D =Production =Marketing(See page 28 for a history of our instrument development.)

Sysmex Corporation=1963		

Successfully developed and commercialized Automated Hematology
Analyzer “CC-1001” the first blood cellcounter in Japan.
=Feb. 1968 Toa Electric founded Toa Medical
Electronics as the subsidiary for salesof its medical electronics devices andinstrument.
=May 1973 Established the Kakogawa Factory inJapan.
=Oct. 1975 Launch of the first fully automatedhematology analyzer developed inJapan.
=Feb. 1978 Launch of the Sysmex brand to markthe 10th anniversary of founding.
=May 1978 Started hematology seminar in Japan.
(now held around the world)=Oct. 1979 Established a US subsidiary, now
Sysmex America.
=Oct. 1980 Established a European subsidiary,
Sysmex Europe.
=Oct. 1984 Launch of the automated coagulation analyzer marks entry into thehemostasis segment.
=Mar. 1987 Launch of the immunochemistry
analyzer, which utilized an original
immunoassay method, marks entry
into the immunochemistry segment.
=Aug. 1990 Launch of an integrated hematology
system that fully automated theentire process from the counting ofblood cells through preparation ofsmear samples.
=Feb. 1991 Opened the Ono Factory in Japan andtransferred the reagent production
division.
=May 1991 Established the UK subsidiary, now
Sysmex UK.
=Jul. 1993 Completed the Neumünster Factory, thebase for reagent production in Europe.
=Mar. 1995 Signed an agreement with Dade
International, a US-based company(now Siemens) for collaboration inselling coagulation product lines.
=Jun. 1995 Established a joint venture, now Jinan
Sysmex Medical Electronics, in China.
=Nov. 1995 Listed stock on the Second Section of
the Osaka Securities Exchange.
=Nov. 1995 Launch of the world’s first analyzer
of tangible constituents of urinethat fully automated inspections ofurinary sediments.
=Jul. 1996 Listed stock on the Second Section of
the Tokyo Stock Exchange.
=Oct. 1996 Hisashi Ietsugu becomes president.
=Feb. 1998 Established a Singaporean subsidiary,
now Sysmex Asia Pacific.
=May 1998 Signed a basic agreement with
F. Hoffmann-La Roche of Switzerland
for global collaboration in marketingand joint R&D.
=Oct. 1998 Change of company name to Sysmex
Corporation to mark the 30th
anniversary of founding.
=Dec. 1998 Established the Brazilian subsidiary,
Sysmex do Brasil Industria eComercio Ltda.

86

Sysmex Annual Report 2013

=Jan. 2000 Founded a Shanghai subsidiary,
Sysmex Shanghai.
=Mar. 2000 Promoted to the First Section of theTokyo Stock Exchange and the Osaka
Securities Exchange.
=Mar. 2000 Opened Central ResearchLaboratories in the Techno Center.
=Mar. 2002 Established the Indonesian subsidiary,
PT. Sysmex Indonesia.
=Apr. 2002 Consolidated Sysmex International
Reagents as a wholly owned subsidiary through a share exchange.
=Apr. 2003 Sysmex and Toshiba announce
development of minimally-invasive
blood glucose self-measurement
technology that does not require
blood sampling.
=Jun. 2003 Consolidation of two local subsidiaries in the US to establish Sysmex
America. Rebuilding of the sales andsupport structure in the US.
=Jan. 2004 Release for research purposes of the
GD-100, an instrument incorporating
the independently developed OSNA
method that detects cancer lymph
node metastasis in a short time.
=Jan. 2004 Development of the world’s firstmulti-protein analysis chip capable ofsimultaneous measurement of activities
and amounts of up to 20 proteins.
=Jun. 2004 Established the R&D bases at
the Business Support Center for
Biomedical Research Activities (BMA)
on Port Island in Kobe.
=Jan. 2005 Sysmex develops technology todiagnose the risk of post-operative
recurrence of early-stage cancer.
=Apr. 2005 Introduction of the executive officer
system as a means of strengthening
corporate governance.
=May 2005 Establishment of the Solution
Center in Nishi-ku, Kobe andconcentration of the marketing
planning, customer support andscientific support functions.
=Nov. 2005 Carried out a two-for-one stock split.
=Jan. 2006 Released the XS Series, the world’s
smallest automated hematology
analyzers, which require only minutequantities of blood.
=Apr. 2007 CNA became a wholly-owned
subsidiary through a stock-for-stock
exchange.
=Apr. 2007 Established a Group Corporate
Philosophy, the “Sysmex Way.”=Apr. 2007 Announced preparations for establishinga business presence in Austria, Slovakia,
Hungary and the Czech Republic.
=Jun. 2007 Formed a global partnership with
bioMérieux for urinary screening in
microbiology.
=Oct. 2007 Established a Canadian subsidiary,
Sysmex Canada.
=Dec. 2007 Started supplying hematology
analyzers to animal test laboratories
operated by animal diagnostics major
IDEXX Laboratories.

=Jan. 2008 Formed a commercial joint venturewith bioMérieux for the Japanesein-vitro diagnostics market.
=Apr. 2008 Started direct sales and support
services in France.
=Jun. 2008 Established the Dubai subsidiary
Sysmex Middle East FZ-LLC.
=Oct. 2008 Renewed the new corporate logo on
the occasion of the 40th anniversaryof the Company’s establishment.
=Oct. 2008 Established Technopark, Sysmex’s
core R&D base; double the size ofprevious Techno Center facilities.
=Nov. 2008 First insurance coverage in Japan for
the Sysmex system for rapid detection of breast cancer lymph nodemetastasis.
=Dec. 2008 The Indian joint venture Sysmex India
Pvt. Ltd. became a wholly-owned
subsidiary.
=Apr. 2009 Established the Netherlands
subsidiary Sysmex Nederland B.V.
=Apr. 2009 Established the Belgian subsidiary
Sysmex Belgium N.V.
=Dec. 2009 Opened a reagent development basein China.
=Jan. 2010 Established an overseas subsidiary in
Spain to expand life science business.
=Mar. 2010 Started joint research with the
National Cancer Center Hospitalto verify clinical usefulness oftechnology for detecting circulatingtumor cells.
=Mar. 2010 Established a sales and support
subsidiary, Sysmex Vietnam.
=July. 2010 Launched joint business with IDEXX,
leader in pet diagnostics.
=Sep. 2010 Established the Philippines subsidiary
Sysmex Philippines Inc.
=Jan. 2011 Established the Russian subsidiary
Sysmex RUS LLC.
=Apr. 2011 Carried out a two-for-one stock split.
=Apr. 2011 Transfer of Katakura Industries Co.,
Ltd. Research Institute of Biological
Science.
=May 2011 Launched the XN-series of flagshipmodels in the hematology field.
=Oct. 2011 Converted company in Taiwan
to wholly owned subsidiary andreinforced sales and support services.
=Jan. 2012 Began offering laboratory testing
service for research involving the risk ofrecurrence of early-stage breast cancer.
=Apr. 2012 Upgraded and made additions to the
new wing of Ono Factory, expanding
our Ono reagent production facility
to 1.5 times its previous level.
=Apr. 2012 Renewed successful alliance in thehematology business with Roche,
extending distribution, sales andservices agreement for another 10
years.
=Oct. 2012 Established protein production center
to strengthen protein production
service business.
=Apr. 2013 Established the Korean subsidiary,
Sysmex Korea Co., Ltd.

Composition of Shareholders

Established			February 20, 1968

Financial institutions
17.65%

Individuals and others
21.18%

Number of Employees

5,594 (consolidated basis)

				
				

2,158 (non-consolidated basis)(Including part-time employees)

Fiscal Year			

April 1—March 31

Shareholders’ Meeting

In JuneFinancial instrument firms
0.39%
Other Japanese companies
20.09%

Number of Shares Authorized 299,344,000 shares
Number of Shares Issued

103,399,416 shares

Paid-in Capital			¥9,712 million

Foreign investors
40.69%

Stock Listings		

Tokyo Stock Exchange, First Section

Distribution of Shares by Number of Shares Held				

Osaka Securities Exchange, First Section

Less than 1,000 shares 1.45%

More than 1,000 shares 2.40%

Number of shares: 1,495,465(5,921 shareholders)Number of shares: 2,484,072(1,171 shareholders)November 1995: Listed on Osaka Securities Exchange, Second Section
		July 1996: Listed on Tokyo Stock Exchange, Second Section

		 March 2000: Listed on Tokyo Stock Exchange, First Section and			 Osaka Securities Exchange, First SectionMore than 500,000 shares 72.61%

More than 5,000 shares 1.14%

Number of shares: 75,081,494(51 shareholders)Number of shares: 1,180,372(169 shareholders)

Ticker Code			

6869

More than 10,000 shares 7.64%

Transfer Agent							

Mitsubishi UFJ Trust and Banking
Corporation

Number of shares: 7,898,281(254 shareholders)

Independent Auditor

Deloitte Touche Tohmatsu LLC

Rating							

A+ (Rating and Investment
Information, Inc. (R&I))

Indexes			

MSCI Standard Index				

Russell/Nomura Japan Equity Indexes				FTSE Japan Index				

DSI (Daiwa Stock Indices)				

S&P Japan 500

Japan Trustee Services Bank, Ltd.

8,960

8.67

				

Dow Jones Sustainability Indexes

The Kobe Yamabuki Foundation

6,000

5.80

Nakatani Foundation for Advancement of
Measuring Technologies in Biomedical Engineering

5,915

5.72

Nakatani Kosan, Ltd.

5,148

4.98

The Master Trust Bank of Japan, Ltd.

3,893

3.77

JPMorgan Chase Bank 380055 (Standing proxy:
Mizuho Corporate Bank. Custody & Proxy Dept.)

3,652

3.53

Kazuko Ietsugu

3,062

2.96

Taeko Wada

3,062

2.96

State Street Bank and Trust Company(Standing proxy: The Hongkong and Shanghai
Banking Corporation Limited, Tokyo Branch)

2,511

2.43

Kenji Itani

2,500

2.42

More than 100,000 shares 14.76%
Number of shares: 15,259,732(59 shareholders)

Principal Shareholders
Number of Percentage ofshares held(Thousands) shareholding

Shareholders

Stock Price Range and Trading Volume

(Yen)
8,000

Common stock price range (¥)
6,000

Cash Dividends per Share and Dividend Ratio (Consolidated)

4,000
2,000

(%)

(Yen)

80
Tokyo Price Index close

Cash dividends per share
Dividend ratio
Figures adjusted for stock split

60
04/2012 5

6

7

8

9

10

11

12 1/2013 23

45(Month)25(Thousands)
15,000Monthly trading volume (shares)
12,500

29.4
28

27.0

34*

40**
29.1

29.1

0

45
30

30
15

20

10,000

2009

2010

2011

2012

2013

0

* Two-for-one stock split conducted on April 2011.
** Including special dividends of ¥4 commemorating the 45th anniversary of theCompany’s founding.

7,500
5,000
2,500
0

31.9

40

60

56

50

60

4/2012 5

6

7

8

9

10

11

12 1/2013 23

45(Month)Dividend Policy
Our dividend policy is to attain a balance between investment in sustainable growth
and return to shareholders. In line with this policy, we maintain a payout ratio of 20%
on a consolidated basis.

Sysmex Annual Report 201387